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20 P.3d 100 (2001)
2001 MT 6
STATE of Montana, Plaintiff and Respondent,
v.
Michael Carl HASER, Defendant and Appellant.
No. 99-693.
Supreme Court of Montana.
Submitted on Briefs December 21, 2000.
Decided January 30, 2001.
Rehearing Denied March 6, 2001.
*101 *102 Margaret L. Borg, Chief Public Defender, Leslie Ocks, Assistant Public Defender, Missoula, MT, for Appellant.
Joseph P. Mazurek, Montana Attorney General, Ilka Becker, Assistant Montana Attorney General, Helena, MT; Fred Van Valkenburg, Missoula County Attorney, Kirsten LaCroix, Deputy Missoula County Attorney, Missoula, MT, for Respondent.
Justice JAMES C. NELSON delivered the Opinion of the Court.
¶ 1 The Appellant, Michael Carl Haser (Haser), appeals from an order and a judgment entered by the Fourth Judicial District Court, Missoula County. The order denied Haser's motion to dismiss due to the alleged violation of his constitutional right to a speedy trial. The judgment sentenced him to 40 years for one count of sexual intercourse without consent, and a concurrent sentence of six months for one count of sexual assault. Haser was found guilty of both counts following a jury trial. Haser argues that the District Court erred by denying his motion to dismiss for lack of a speedy trial, and that the evidence before the jury was insufficient to sustain a conviction for sexual intercourse without consent.
¶ 2 We affirm in part and reverse in part.
¶ 3 Haser raises the following two issues:
1. Did the District Court err in denying Haser's motion to dismiss for lack of speedy trial?
2. Was the evidence before the jury sufficient to sustain the conviction of sexual intercourse without consent?
FACTUAL AND PROCEDURAL BACKGROUND
¶ 4 At issue on appeal is whether Haser was afforded a speedy trial, and whether the evidence was sufficient to sustain his conviction for sexual intercourse without consent involving two victims. Thus, the underlying factual and procedural background detailing the sexual assault conviction is not pertinent to our discussion and will be addressed accordingly.
¶ 5 Haser operated a photography studio, Picture Perfect Studios, in Missoula, Montana, at the time the alleged crimes of sexual intercourse without consent took place. Haser also published a free monthly magazine, Missoula Magazine. The two victims, both females, sought Haser's services as a professional photographer, specifically one who would take professional-modeling photos. Both victims were interested in pursuing modeling careers, and one testified that she hoped that her photo would appear in Haser's magazine. One victim paid for her photo session, and the other had the option to buy photos at a later date, although Haser did not charge her for the session itself.
¶ 6 Each victim's account of Haser's conduct during the photo sessions is similar. Each woman testified that she was alone in the studio with Haser during the scheduled appointment. One victim testified that the session lasted six hours, and the other testified that her session lasted two hours. It is undisputed that the victims understood that they would pose before Haser wearing a variety of attire belonging to them or Haser, including swimsuits, and that the "modeling" involved striking poses similar to those found in fashion magazines.
¶ 7 What was not understood or disclosed prior to the photo sessions was Haser's insistence that he be allowed to rub lotion or apply makeup to their bodies, including their bare breasts. Haser similarly surprised the victims when he informed them that in order to avoid "panty lines" they would not be *103 permitted to wear underwear. Haser apparently persuaded the victims that such conditions were necessary to improve the quality of the photos. Both women removed their underwear upon Haser's request, and allowed him to personally apply either lotion or makeup to their bare breasts.
¶ 8 Haser also repeatedly insisted that he had to adjust or re-position them in a particular pose, which also involved his touching them. It was during these sudden and frequent "adjustments" that one of his hands would slip under the women's clothing, rub between their legs, and up against their pubic region. The testimony reveals that his explanation at the time was that such interplay between his hand and the women's vaginal areas was strictly for the sake of attaining the optimal pose which would produce high quality photos. Haser does not deny now, on appeal, that his touching the two victims as described at trial constituted "penetration" pursuant to Montana law governing the offense of sexual intercourse without consent.
¶ 9 Neither victim abruptly ended the photo sessions due to Haser's conduct, however. Apparently, the victims voiced little or no objection to Haser's conduct during their respective sessions-due, apparently, to the suddenness of his actions and the resulting surprise or shock. Rather, at the time of the incidents, the victims believed or were led to believe that such treatment was incidental in the context of a professional model's photo session, although both testified that they thought at the time, as well as afterward, that Haser's touchings were odd, disgusting, and made them uncomfortable. The two victims testified that Haser's conduct elicited embarrassment, surprise, shock, anger, and fear.
¶ 10 Haser's conduct with the two foregoing victims was not limited to them alone. Rather, the evidence indicates he routinely took similar liberties with other clientele. As a result of one victim coming forward, which led to an extensive police investigation, Haser was charged on November 12, 1997, with eleven counts of misdemeanor sexual assault in violation of § 45-5-502, MCA, or, in the alternative, eleven counts of misdemeanor assault in violation of § 45-5-201, MCA, and six counts of sexual intercourse without consent, in violation of § 45-5-503, MCA. On December 3, 1997, Haser entered not guilty pleas to all counts.
¶ 11 The State amended its information on December 22, 1997, increasing the number of counts of sexual intercourse without consent to eight. Haser entered a not guilty plea to the amended information on January 7, 1998.
¶ 12 On March 23, 1999, the State filed a second amended information, which consolidated the prior multiple counts into two. Under Count I, the State charged Haser with sexual intercourse without consent as a continuing course of conduct involving four victims, and under Count II, the State charged him with misdemeanor sexual assault as a continuing course of conduct involving 14 victims. Haser entered not guilty pleas to both counts.
¶ 13 Prior to trial, Haser filed a motion to dismiss for lack of a speedy trial. The District Court denied his motion at the conclusion of a March 25, 1999 hearing, and issued an opinion and order on April 1, 1999. Haser contended that the length of delay502 daysfrom the time the original charges were filed on November 12, 1997, until the scheduled trial date of March 29, 1999, denied his constitutional right to a speedy trial. The court concluded that the State was responsible for 276 days of the delay, and Haser was responsible for the remaining 226 days. The court concluded that the defendant had failed to demonstrate he had been prejudiced by the State's delay.
¶ 14 A jury trial commenced March 29, 1999. At the close of the State's case in chief, which included testimony from the victims, the daughter of one victim, police investigators, and an expert witness, Haser moved for a directed verdict on the ground that the evidence presented was insufficient to take the matter to the jury. The court denied the motion. Haser then called six witnesses, all women, to testify on his behalf. The witnesses testified that they knew Haser and in the past had either worked for or modeled for himor both. Their testimony was consistent *104 in denying that Haser had ever engaged in inappropriate conduct with them during modeling sessions. None of the witnesses testified that they were present during the victims' photo sessions. None of the witnesses testified that they knew any of the victims.
¶ 15 On April 5, 1999, the jury returned a guilty verdict on the first count, sexual intercourse without consent, as applied to two of the four victimsmeaning the jury found Haser not guilty of committing the offense with two of the four victims. The jury also returned a guilty verdict on the second count, sexual assault, committed on 11 different victims. Two of these 11 victims were the alleged victims of the sexual intercourse without consent charge that the jury found Haser not guilty of committing.
¶ 16 On June 2, 1999, the District Court sentenced Haser to 40 years with 20 suspended on the first count, and to six months on the second count. The judgment was entered on August 30, 1999. Haser appeals the denial of his motion to dismiss due to the violation of his constitutional right to a speedy trial, and the judgment that sentenced him to 40 years for the offense of sexual intercourse without consent.
STANDARD OF REVIEW
¶ 17 We recognize that the violation of a defendant's right to a speedy trial is a question of constitutional law which requires that we review a district court's decision to determine if it is correct. See State v. Taylor, 1998 MT 121, ¶ 18, 289 Mont. 63, ¶ 18, 960 P.2d 773, ¶ 18 (citation omitted).
¶ 18 We review the sufficiency of evidence to support a conviction by viewing the evidence in a light most favorable to the prosecution and then determining whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. See State v. Berger, 1998 MT 170, ¶ 25, 290 Mont. 78, ¶ 25, 964 P.2d 725, ¶ 25 (citations and quotations omitted).
DISCUSSION
Issue 1.
Did the District Court err in denying Haser's motion to dismiss for lack of speedy trial?
¶ 19 Haser argues that the 276 day-delay attributable to the State pursuant to the District Court's order was incorrectly calculated, and that the State's evidence failed to disprove the presumption that he was prejudiced by the 502 day delay in this matter going to trial. Therefore, he contends that the District Court erred when it denied his motion to dismiss. We disagree.
¶ 20 Since 1972, we have reviewed claims that a speedy trial was denied in violation of the Sixth Amendment to the U.S. Constitution, and Article II, Section 24, of the Montana Constitution, based on the general guidelines established by the U.S. Supreme Court in Barker v. Wingo (1972), 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101. See, e.g., City of Billings v. Bruce, 1998 MT 186, ¶ 19, 290 Mont. 148, ¶ 19, 965 P.2d 866, ¶ 19 (citations omitted).
¶ 21 The Barker test offers four criteria for a court's consideration: (1) the length of the delay; (2) the reason for the delay; (3) the assertion of the right to a speedy trial by the defendant; and (4) the prejudice to the defense. See Bruce, ¶ 19 (citing Barker, 407 U.S. at 530, 92 S.Ct. at 2192). As this Court emphasized in Bruce, however, the four factors established by Barker "are necessarily general guidelines to be applied on a case-by-case basis to the unique circumstances of each case." Bruce, ¶ 20 (quoting from Barker, 407 U.S. at 533, 92 S.Ct. at 2193, that "these factors have no talismanic qualities; courts must still engage in a difficult and sensitive balancing process").
¶ 22 Primarily at issue here is the fourth element, that Haser suffered prejudice due to the delay. We stated in Bruce that prejudice sufficient for a dismissal can be established based on any one or more of the following factors: (1) pretrial incarceration, (2) anxiety and concern to the defendant, and (3) impairment of the defense. Bruce, ¶ 19 (citing Barker, 407 U.S. at 532, 92 S.Ct. at 2193). Of these concerns, the U.S. Supreme Court has stated the following about their order of importance:
Of these, the most serious is the last, because the inability of a defendant adequately *105 to prepare his case skews the fairness of the entire system. If witnesses die or disappear during a delay, the prejudice is obvious. There is also prejudice if defense witnesses are unable to recall accurately events of the distant past. Loss of memory, however, is not always reflected in the record because what has been forgotten can rarely be shown.
Barker, 407 U.S. at 532, 92 S.Ct. at 2193.
¶ 23 The District Court followed the three-part test in Bruce for determining prejudice, and concluded that (1) Haser had been released on his own recognizance prior to trial; (2) Haser had not suffered any more "inordinate pretrial anxiety" than "any other defendant charged with a felony" and as time passed and the publicity died down the "tension and stress on the Defendant lessened;" and (3) Haser's defense was not "impaired or prejudiced" by the delay, rather, the "State's witnesses have suffered on parts of their recollection to the benefit of the Defendant."
¶ 24 Haser's first contention is that the court miscalculated the number of days of delay attributable to the State, and therefore incorrectly analyzed the "reason for the delay" prong of the four-part Barker test. We conclude that this argument is without merit.
¶ 25 As this Court has stated, once the delay attributable to the State exceeds 275 days, speedy trial analysis is triggered and prejudice is presumed. See Bruce, ¶ 56. Thus, because 276 days of the 502 day delay were allocated to the State, the burden shifted to the State to demonstrate that Haser had not been prejudiced by the delay. See Bruce, ¶ 56. If the State satisfied its burden of demonstrating that Haser had not been prejudiced by the delay, the burden would have shifted to him to show that he had been prejudiced. See State v. Hardaway, 1998 MT 224, ¶ 23, 290 Mont. 516, ¶ 23, 966 P.2d 125, ¶ 23. This is one of the primary functions of the "reason for delay" prong: to conclusively establish a burden shift for the determination of prejudice. Here, whether the delay attributable to the state was 276 days or 418 days (as Haser argues),[1] the State nevertheless bore the initial burden of showing that the delay did not cause Haser prejudice. Neither party contests this burden shift, and we conclude that the District Court did not error in assigning the burden to the State.
¶ 26 Further, Haser suggests the alleged 418 days of delay attributable to the State "may have been intentional rather than mere institutional delay." We agree that the constitutional question of a speedy trial is primarily designed to protect the accused from oppressive tactics of the prosecution, and that a showing that the delay was an intentional device to harass or gain tactical advantage over the accused rather than ordinary "institutional delay" is another primary function of the "reason for delay" prong of the Barker test. See State v. Heffernan (1991), 248 Mont. 67, 73, 809 P.2d 566, 569 (citing Barker, 407 U.S. at 529, 92 S.Ct. at 2191). Institutional delays, on the other hand, weigh less heavily against the State in the Barker balancing process than intentional delays resulting from oppressive tactics. See Heffernan, 248 Mont. at 73, 809 P.2d at 570 (citation omitted).
¶ 27 On appeal, Haser does not support his shadow of an innuendo with reference to any evidence or authority. We conclude that there was no showing by Haser, or any other evidence, that the State intentionally delayed his trial to harass him or to gain some tactical advantage over him. We agree with the State that the reason for its delay here was purely institutional in nature. See Heffernan, 248 Mont. at 73, 809 P.2d at 570.
¶ 28 Finally, this Court has never established a threshold number of days that conclusively establishes the denial of the right to speedy trial without the necessary finding of prejudice to the defendant. See Bruce, ¶ 56 (citing Doggett v. United States (1992), 505 U.S. 647, 112 S.Ct. 2686, 120 L.Ed.2d 520). Although encouraging the District Court to entertain such a threshold, Haser does not suggest that this Court should do so now here on appeal, in light of his claim of error.
*106 ¶ 29 We conclude, therefore, that the District Court did not err in determining that, due to the length of the institutional delay attributable to the State, the State carried the initial burden of rebutting the presumption that Haser had been prejudiced by the delay. Therefore, we turn our attention to the issue of prejudice.
¶ 30 Of the three factors that a court considers under the "prejudice to the defense" prong of the Barker test, Haser and the State agree that the first, "pretrial incarceration," is not at issue.
¶ 31 As for the next factor, "anxiety and concern to the defendant," Haser contends that the State essentially offered no evidence to rebut the presumption of prejudice-other than what amounted to the State calling upon its own investigators to opine that they were not aware of any anxiety or concern by Haser. Haser argues that "the detectives had neither the opportunity, the qualifications, nor the inclination to determine whether the defendant endured anxiety and concern during the 500 days he awaited trial."
¶ 32 This Court has previously stated, however, that since it is nearly impossible for the State to prove that anxiety and concern do not exist, the State's burden to show a lack of anxiety becomes "considerably lighter in the absence of more than marginal evidence of anxiety." State v. Williams-Rusch (1996), 279 Mont. 437, 452, 928 P.2d 169, 178 (citations omitted).
¶ 33 Here, the State asserted through testimony and exhibits that to the best of its knowledge Haser had not undergone any treatment or otherwise suffered any extreme distress due to pretrial anxiety or concern, and that he appeared to be maintaining employment and could continue to pursue business ventures related to the field of photography. We conclude that the District Court did not err in determining that, based on this evidence, the State met its burden in rebutting the presumption that Haser experienced prejudicial "anxiety and concern," during the 500 day delay before trial sufficient to warrant a dismissal.
¶ 34 In turn, we agree with the State that the anxieties expressed by Haser in rebuttal at his motion to dismiss hearing were clearly attributable to the fact that as a proprietor of a business that held its doors open to the general public, he stood charged of sexual crimes involving a substantial number of customers who sought his professional services. That these charges would directly and adversely impact his business as well as his reputation in the community speak far more to the nature of the crimes themselves than the delay in commencing the trial-whether that delay was 276, 391, or 418 days. We conclude that, at best, Haser presented marginal evidence of prejudicial anxiety and concern that can be attributed to the institutional delay in going to trial.
¶ 35 The third and final consideration under the element of prejudice, "impairment of the defense," which is the most important, focusses primarily on a defendant's ability to adequately prepare his case. Specifically, we look at whether the delay directly affected the defendant's ability to call witnesses on his own behalfthose who can be located and accurately recall events and whether the delay directly diminished and impeded the defendant's own ability to present any other evidence, or develop a particular theory or line of defense. See Bruce, ¶ 71-73; State v. Keating (1997), 285 Mont. 463, 475-76, 949 P.2d 251, 259.
¶ 36 The State, in this instance, argues it sufficiently rebutted the presumption that the institutional delay in this matter impaired Haser's ability to prepare his defense. In sum, the State argued to the District Court that it had provided Haser all discoverable materials that could assist his defense and that none of his witnesses would provide exculpatory evidence. The State also argued that it had not impaired Haser's ability to assert an affirmative defense on account of any delay in this matter. On appeal, the State correctly states that Haser offered no evidence at the speedy trial hearing to restore the presumption of prejudice on this basis, and asserts that no such argument has been made here.
¶ 37 Haser does not argue that any of his witnesses were unavailable due to the delay. He does not dispute that all of his witnesses supplied character testimony only, or that *107 not one of his witnesses were present during any of the victims' photo sessions, or that not one of his witnesses knew or had had any contact with any of the victims. Thus, their memory of witnessed events would be marginal at best. As the District Court stated, witnesses for the Statei.e., the victims of the alleged offenseswere far more susceptible to memory loss.
¶ 38 Further, Haser has not contested here on appeal the State's assertion that it timely provided him with discoverable information concerning its witnesses and their statements, materials seized during the search of his business, and any statements he may have made. Likewise, Haser has not suggested that any such delay in this matter affected his ability to establish a defense, such as the affirmative defense of "alibi," which he alluded to in the omnibus hearing in early 1998, and in his February 27, 1998 motion to dismiss. In sum, Haser has not presented any argument, let alone evidence, that due to the State's delay in this matter he was not afforded an ample opportunity to review the State's case against him, refresh his own recollection of events, develop his theory of the case, or establish a credible affirmative defense.
¶ 39 Finally, we observe that the focus of Haser's prejudice argument centers on the "anxiety and concern" factor. Restated, Haser's argument on appeal regarding the factor of "impairment of defense" is that the State failed to meet its burden and, therefore, he is relieved of his burden to present evidence of prejudice in rebuttal. We disagree, and conclude that Haser's ability to prepare his defense was not prejudiced by the delay in this matter going to trial.
¶ 40 Accordingly, we affirm the order of the District Court denying Haser's motion to dismiss for lack of a speedy trial.
Issue 2.
Was the evidence before the jury sufficient to sustain the conviction of sexual intercourse without consent?
¶ 41 Haser does not deny that any of the alleged conduct occurred, which includes various accounts of his hand, thumb, or fingers penetrating each victim's vaginal region. He does not deny that he deceived the women into submitting to conduct that obviously exceeded the reasonable boundaries of what constitutes a model's photo session with a professional photographer. In Haser's brief to this Court he blatantly admits that he used the same "it's all for the pictures" and "panty line" ploys on both victims to get them to remove their underwear, that it was "certainly misleading" for him to put his hand between one of the victim's legs "up to her vaginal area under the guise of showing her how to pose," and that both victims fell for his deceptions "hook, line and sinker."
¶ 42 Instead, Haser focusses this Court's scrutiny of his conviction on the statutory element "without consent," contending that neither victim was "compelled to submit by force" or was "incapable of consent" as required under the governing statutes.[2]
¶ 43 The State counters by arguing that the victims in this instance were subject to what it contends was "constructive force," or that force may be implied due to the sudden and surprise nature of the "sexual attack," and, alternatively, both victims were physically incapable of consenting because Haser abused his position of power and trust over the young women, and lulled them into a state of vulnerability not unlike sleep or intoxication.
¶ 44 Under § 45-5-503, MCA, a person commits the offense of sexual intercourse without consent if he or she "knowingly has sexual intercourse without consent with another *108 person." Under the general definitions provided under § 45-2-101, MCA, "sexual intercourse" includes "penetration of the vulva... of one person by a body member of another person ..." and "any penetration, however slight, is sufficient." Accordingly, we conclude that there was sufficient evidence presented at trial for a rational trier of fact to find that Haser committed the essential element of "sexual intercourse" with the victims beyond a reasonable doubt.
¶ 45 Under the definitions provided by § 45-5-501(1), MCA, which are expressly applicable to the offense of sexual intercourse without consent under § 45-5-503, MCA, the term "without consent" means:
(a) the victim is compelled to submit by force against the victim or another; or
(b) the victim is incapable of consent because the victim is:
(i) mentally defective or incapacitated; [or]
(ii) physically helpless ...[3]
Under § 45-5-501(2), MCA, the term "force" as used in subsection (1), sub-part (a), means:
(a) the infliction, attempted infliction, or threatened infliction of bodily injury or the commission of a forcible felony by the offender; or
(b) the threat of substantial retaliatory action that causes the victim to reasonably believe that the offender has the ability to execute the threat.
¶ 46 The instructions presented to the jury by the District Court followed the foregoing statutory definitions. The jury was also instructed that "Resistance by the victim is not required to show lack of consent" and that "Force, fear, or threat is sufficient alone to show lack of consent." This set of instructions is a verbatim recital of § 45-5-511(5), MCA, which provides provisions generally applicable to sexual crimes.
¶ 47 Under the general definitions of § 45-2-101, MCA, a person is "mentally incapacitated" if he or she is "rendered temporarily incapable of appreciating or controlling the person's own conduct as a result of the influence of an intoxicating substance." Obviously, this definition has no application to the factual circumstances sub judice. Under this same statute, a person is "physically helpless" when he or she is "unconscious or is otherwise physically unable to communicate unwillingness to act." This statutory definition was not presented to the jury in the court's instructions.
A. The use of "force" under § 45-5-501(1)(a), MCA.
¶ 48 The State concedes that Haser did not threaten either victim. Thus, in order to satisfy the "compelled to submit by force" element of "without consent," under §§ 45-5-501 and -503, MCA, there must be evidence that Haser inflicted or attempted to inflict bodily injury, or committed a forcible felony. Under the general definitions of § 45-2-101, MCA, "bodily injury" is defined as "physical pain, illness, or an impairment of physical condition and includes mental illness or impairment." Under the same statute, a "forcible felony" means "a felony that involves the use or threat of physical force or violence against any individual." The instructions presented to the jury did not include these statutory definitions.
¶ 49 The testimony of the two victims, viewed in a light most favorable to the State, indicates that they experienced shock, embarrassment, surprise, anger, and perhaps even a trace of fear during the course of their respective photo sessions with Haser. The State has not argued, pursuant to state law, that any of these responses are a species of pain, illness, or impairment inflicted by Haser in order to compel them to submit to his repeated acts of digital penetration.
¶ 50 Instead, the State argues that this Court should follow other jurisdictions that have construed the essential element of "force" to include "constructive force." See State v. Brown (1992), 332 N.C. 262, 420 S.E.2d 147, 150 (stating that the "requisite force may be established either by actual, physical force or by constructive force in the *109 form of fear, fright, or coercion") (citation omitted).
¶ 51 Contrary to the State's argument, however, Montana's statutory scheme accounts for "constructive force" pursuant to the amended version of § 45-5-501(2), MCA (amended in 1991), which provides that "force" includes threats of bodily injury or "substantial retaliatory action." Thus, under the current law in Montana, actual physical force is no longer necessary to satisfy the essential "submit by force" element of the offense of sexual intercourse without consent. Again, as conceded by the State, there was no evidence presented at trial that Haser, via his physical or verbal conduct, threatened either victim in any manner. Mere chicanery simply cannot be construed as a form of force under our governing statutes. Likewise, evidence that a victim is frozen in a state of shock or in a state of fearbut not as a result of a threat or as a result of an attempted or actual infliction of bodily injury or the commission of a forcible felonyis insufficient to establish that a defendant did in fact use "force" to compel a victim's submission to sexual intercourse. Thus, we conclude that Haser did not use "force" in compelling the victims to submit to sexual intercourse.
¶ 52 The State also argues that this Court should equate "surprise" with "force," and again turns our attention to case law from other jurisdictions. The State reasons that, due to Haser's surprise "attacks," the victims were not afforded the opportunity to consent, and therefore the use of force may be implied by the act of penetration itself. This argument formed the basis of the State's closing argument to the jury that Haser used force: "If you're surprised, then the force required to penetrate or the force required to touch is sufficient to satisfy the force requirement." See State v. Atkins (Mo. 1926), 292 S.W. 422, 426 (stating that "illicit sexual connection" with a woman may be accomplished "through surprise, when she is awake, but utterly unaware of his intention in that regard" and therefore "force merely incident to penetration should be deemed sufficient force within the meaning of the rape statute"). See accord People v. Borak (1973), 13 Ill.App.3d 815, 301 N.E.2d 1, 5 (citing Atkins and concluding that "force" in the statutory sense is present when the victim is incapable of consenting to the sexual act involved because she has been given no opportunity to consent and that force is "implied when the rape or deviate sexual acts proscribed by statute are accomplished under the pretext of medical treatment when the victim is surprised, and unaware of the intention involved"). The prosecution's comments to the jury, however, were not a correct statement of the law regarding the use of "force" under our sexual intercourse without consent statutes.
¶ 53 In contrast to Montana's clear statutory definition of "force," the Illinois court decision cited by the State recognized that its statutory requirementthat the proscribed sexual intercourse must be committed "by force and against the will of the other person"could be present in certain circumstances "where no actual force is used," and where "no actual violence is either committed or threatened." See Borak, 301 N.E.2d at 4-5. See also Brown, 420 S.E.2d at 150 (stating that "`by force and against the will of the other person' as used in N.C.G.S. § 14-27.5(a)(1) has the same meaning as it did at common law when it was used to describe an element of rape" and that the element is present if the defendant "uses force sufficient to overcome any resistance the victim might make").
¶ 54 In sum, the case law cited by the State, however compelling, simply does not comport with Montana's clear legislative mandate that "force" must be related somehow to bodily injury, the attempted infliction of bodily injury, or an actual threat of some kind. We conclude that "surprise" penetration, alone, is insufficient to establish the essential element of "without consent" under § 45-5-501(1)(a), MCA, which requires that the victim was "compelled to submit by force."
¶ 55 Accordingly, we hold that there was insufficient evidence to support a conviction for sexual intercourse without consent in that a rational trier of fact could not have properly found that the essential element of "without consent," based on either victim being "compelled to submit by force" pursuant to § 45-5-501(1)(a), MCA, had been proven beyond a reasonable doubt.
*110 B. "Incapable of consent" under § 45-5-501(1)(b), MCA.
¶ 56 The State next contends that implicit in the definition of "incapable of consent," under § 45-5-501(1)(b), MCA, is the notion that the victim must have an opportunity to consent or to communicate a lack of consent, and suggests that Haser, as a professional photographer, managed to exploit his position of trust with the young hopeful models and thereby "lull" his victims into a state of mind analogous to intoxication or sleep, which satisfy, respectively, the statutory requirements of being mentally incapacitated or physically helpless. See State v. Graves (1995), 272 Mont. 451, 457, 901 P.2d 549, 553 (victim "passed out" due to use of alcohol); State v. Lundblade (1986), 221 Mont. 185, 187, 717 P.2d 575, 577 (victim sound asleep and did not consent to sexual acts with defendant); State v. Gould (1995), 273 Mont. 207, 221, 902 P.2d 532, 541 (sufficient evidence for the jury to find beyond a reasonable doubt that victim was mentally incapacitated due to intoxication).
¶ 57 The "incapable of consent" alternative under the "without consent" definition of § 45-5-501, MCA, was not argued by the State in closing argument to the jury, but was included in the jury instructions and recited to the jury by the District Court. As noted, the statutory definition of "physically helpless," which is the only viable argument that the victims here were "incapable of consent" under § 45-5-501, MCA, was not presented to the jury.
¶ 58 Contrary to the State's argument, we conclude there is indeed a "logical difference" between Haser's sexual intercourse with the two victims and sexual intercourse with a sleeping or intoxicated victim. Namely, the victims here were awake and sober. Both were therefore conscious and physically capable of communicating an unwillingness to act, pursuant to §§ 45-5-501(1)(b)(ii) and 45-2-101, MCA, which defines "physically helpless."
¶ 59 Further, contrary to the State's encouragement, we are not at liberty to read into the already thoroughly defined statutory term "incapable of consent" such implicit notions as "opportunity to consent" or "awake and sober but unaware" to fit those circumstances where the victim has been "lulled" by another person. See State v. Goodwin (1991), 249 Mont. 1, 22-23, 813 P.2d 953, 966 (quoting 73 Am.Jur.2d Statutes § 295). Although we must construe the provisions of a penal statute "according to the import of their terms with a view to effect its object and to promote justice" (see § 45-1-102(2), MCA), the Legislature has provided specific definitions of the specific conditions that render a person "incapable of consent" under § 45-5-501(1)(b), MCAstatutory definitions which are noticeably absent from the State's argument here, and were not addressed by the State at trial in its development of its theory of the case or incorporated in its instructions to the jury.
¶ 60 We therefore conclude that there was insufficient evidence to support a conviction for sexual intercourse without consent. We hold that a rational trier of fact could not have properly found that the essential element "without consent" due to the victims being "incapable of consent" pursuant to § 45-5-501(1)(b), MCA, had been proven beyond a reasonable doubt.
¶ 61 In sum, there was simply no evidence offered at Haser's trial that either victim was compelled to submit to his digital penetration by "force" or that either victim was "incapable of consent" because she was mentally incapacitated or physically helpless. Accordingly, without such evidence, a rational trier of fact could not have found that the essential element "without consent" had been proven by the State beyond a reasonable doubt. We therefore reverse that portion of the District Court's judgment that determined that Haser was guilty of the offense of sexual intercourse without consent.
¶ 62 Accordingly, the judgment of the District Court is affirmed in part, reversed in part, and remand for further proceedings consistent with this opinion.
GRAY, C.J., and REGNIER and LEAPHART, JJ., concur.
NOTES
[1] In its response brief to Haser's motion to dismiss, the State conceded that is was responsible for 391 days of delay.
[2] Haser does not challenge his conviction for sexual assault involving a total of 11 women, all of whom he similarly deceived with his self-described "it's all for the camera" scheme. Like the crime of "sexual intercourse without consent" an element of sexual assault is "without consent." See § 45-5-502, MCA. The definition of "without consent," provided under § 45-5-501, MCA, however, is expressly applicable only to the offense of sexual intercourse without consent, § 45-5-503, MCA. The Legislature has not similarly defined the term as used in the sexual assault statute. Regardless, Haser has not argued that his sexual assault conviction should be reversed on the grounds argued under issue two.
[3] The jury at Haser's trial was instructed on both subsection (a) and (b)(i)-(ii) of the "without consent" definition, with the exception of the "mentally defective" requirement.
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823 So.2d 637 (2001)
UNITED STATES FIDELITY & GUARANTY COMPANY
v.
BALDWIN COUNTY HOME BUILDERS ASSOCIATION, INC., and L.M. Smith.
1001633.
Supreme Court of Alabama.
December 14, 2001.
*638 Edward G. Bowron and Michael A. Montgomery of Pierce, Ledyard, Latta, Wasden & Bowron, P.C., Mobile, for appellant.
W. Beatty Pearson and Michelle A. Meurer of Pearson, Cummins & Hart, L.L.C., Spanish Fort, for appellees.
LYONS, Justice.
United States Fidelity & Guaranty Company (hereinafter "USF & G") appeals from a judgment of the Baldwin Circuit Court in a declaratory-judgment action involving coverage under a general liability policy issued to Baldwin County Home Builders Association, Inc. (hereinafter "BCHBA"). We affirm.
The general liability policy obligated BCHBA to give notice to USF & G "as soon as practicable of an `occurrence' or an offense which may result in a claim."[1] Some dissatisfied home buyers sued BCHBA and L.M. Smith, an officer of BCHBA. BCHBA and Smith first notified USF & G of the claims asserted by the dissatisfied home buyers after they had been served with a complaint in the action. USF & G declined coverage as to the claims because, it says, notice of the potential claims was too late. BCHBA and Smith filed an action against USF & G, seeking a declaration that USF & G was required to provide coverage under the general liability policy. Both sides filed motions for a summary judgment. The trial court entered a summary judgment in favor of BCHBA and Smith. USF & G appealed; this Court reversed. See United States Fidelity & Guaranty Co. v. Baldwin County Home Builders Ass'n, Inc., 770 So.2d 72 (Ala.2000) ("USF & G I"), which sets out a complete statement of the underlying facts.
In USF & G I, this Court remanded this case to the trial court for an evidentiary hearing, stating that "the question of the reasonableness of [BCHBA and Smith's] delay in giving notice is a question for the trier of fact." 770 So.2d at 76. On remand, the trial court conducted a bench trial, ordered additional briefs, and then entered a judgment in favor of BCHBA and Smith, declaring that USF & G had a duty to defend and to indemnify them under the general liability policy issued by USF & G.
On this appeal, USF & G contends that the untimeliness of the notice to it of the potential claims is established as a matter of law from the dealings between BCHBA, Smith, and the dissatisfied home buyers in the months previous to the commencement of the underlying action by the home buyers against BCHBA and Smith. *639 In its conclusion in its brief to this Court in USF & G I, USF & G stated:
"For the foregoing reasons, USF & G respectfully requests that (1) the decision of the trial court be reversed and this court render an opinion that the notice given by the plaintiffs to USF & G was unreasonable as a matter of law, or, in the alternative, (2) reverse the granting of summary judgment in favor of the plaintiff and remand this case to the trial court for further proceedings."
This Court declined to grant the first request but granted USF & G's second request. In USF & G I, this Court summarized the evidence:
"Although Smith referred Crowe [the home buyer] to the subcontractors, Heaton Septic Tank Services and Moore Engineering, Smith remained in constant contact with the subcontractors, and Smith was probably aware that the subcontractors were not correcting the seepage problem at the Crowe residence. In Crowe's letter to Smith dated January 13, 1995, Smith was told that Heaton Septic Tank Services had taken no action. Smith testified that he and BCHBA did not notify USF & G until after the lawsuit had been filed because, they say, they had believed until then that the problem could be `worked out.' BCHBA and Smith argued that because Crowe did not respond to Smith's June 6 letter informing Crowe that the problem would not be covered under his homebuilder's warranty, BCHBA and Smith considered the issue resolved.
"BCHBA and Smith also argue that the letters from Crowe to Smith did not indicate that the Crowes would sue. USF & G claims that the letters did, in fact, notify Smith that the Crowes intended to sue. BCHBA and Smith also argue that notice to USF & G was not required, because, they say, they were not liable for the alleged injury to the Crowes; they say they were not liable because, they argue, the drainage problem was not covered under the homebuilder's warranty. BCHBA and Smith offered mitigating circumstances, leading to conflicting inferences concerning the reasonableness of the delay; their excuses could be found to justify the protracted delay. Thus, the matter should be resolved by the trier of fact.
"Given these circumstances, the trial court improperly entered the summary judgment in favor of BCHBA and Smith. Accordingly, that judgment is reversed, and, because BCHBA and Smith offered mitigating circumstances, the question of the reasonableness of their delay in giving notice is a question for the trier of fact."
USF & G I, 770 So.2d at 76 (emphasis added).
As the emphasized portions of the quote from USF & G I reflect, USF & G's contention in that appeal that the evidence established that notice of the claims was late as a matter of law was decided adversely to USF & G. Had this Court concluded in the earlier appeal that the facts established that notice had been late as a matter of law, this Court's mandate to the trial court on remand would have been to render a judgment in favor of USF & G. Instead, this Court reversed the trial court's judgment and remanded the case on the question of the reasonableness of delay, which was to be determined by the trier of fact. "`Under the doctrine of the "law of the case," whatever is once established between the same parties in the same case continues to be the law of that case, whether or not correct on general principles, so long as the facts on which the decision was predicated continue to be the facts of the case.'" Southern United Fire Ins. Co. v. Purma, 792 So.2d 1092 *640 (Ala.2001), quoting Blumberg v. Touche Ross & Co., 514 So.2d 922, 924 (Ala.1987). Because the facts have remained the same as those presented in the former appeal and because we cannot say that the trial court's findings based on ore tenus evidence and adverse to USF & G are clearly erroneous, we affirm the trial court's declaratory judgment in favor of BCHBA and Smith.
AFFIRMED.
MOORE, C.J., and HOUSTON, JOHNSTONE, and WOODALL, JJ., concur.
NOTES
[1] The policy defines an "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."
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817 N.E.2d 928 (2004)
352 Ill. App.3d 952
288 Ill.Dec. 278
Andre L. WALKER, Plaintiff-Appellant,
v.
William J. LEWIS, Defendant-Appellee.
No. 1-03-2924.
Appellate Court of Illinois, First District, First Division.
September 20, 2004.
*929 Richard M. Craig of Law Offices of Richard M. Craig, P.C., for Plaintiff-Appellant.
Robert J. Lentz of Meachum, Spahr, Cozzi, Postel & Zenz, Chicago, for Defendant-Appellee.
Justice McBRIDE delivered the opinion of the court:
Plaintiff-appellant, Andre L. Walker, brought a negligence action for personal injuries he sustained after being struck by an automobile driven by defendant-appellee, William J. Lewis. The matter was submitted to mandatory arbitration under Supreme Court Rule 86(b). 155 Ill.2d R. 86(b). Defendant did not appear at the arbitration hearing although Walker requested defendant's presence pursuant to Supreme Court Rule 237, which governs compelling the appearance of witnesses at arbitration hearings. See 166 Ill.2d Rs. 237, 90(g). Defense counsel, however, appeared and participated. An arbitration award was entered in favor of Walker in the amount of $3,000. Because the arbitration award satisfied neither party, the parties agreed that defendant would file a timely rejection of the award, which defendant did 16 days after the arbitration award was filed. Thereafter, the trial court, sua sponte, ordered the parties to brief the issue of whether defendant should be debarred from rejecting the arbitration award because of his absence at the arbitration hearing. Each party filed written memoranda supporting defendant's right to reject but the trial court, sua sponte and over the objection of both parties, entered its own order debarring defendant from rejecting the award.
Walker then filed a motion to reconsider, which was denied. He also presented a motion to adjudicate and to reduce a worker's compensation lien and a physician's lien that had been asserted against him. The trial court reduced the physician's lien, but refused to reduce the worker's compensation lien.
Walker contends on appeal that the trial court erred when it debarred defendant from rejecting the award because there was no evidence supporting the sanction, there was no petition for sanctions before the court, the sanction was too severe, and the court should not have prohibited Walker from rejecting the award. He also claims that the trial court erred when it declined to reduce the worker's compensation lien.
On April 28, 2003, the trial court, sua sponte, ordered the parties to file written memoranda on the issue of whether defendant should be debarred from rejecting the award because defendant did not appear at the arbitration hearing. In a response to the trial court's order, defendant admitted that he was present by defense counsel only but claimed that he meaningfully participated in the arbitration hearing because defense counsel made an opening statement, cross-examined Walker, and gave a closing argument. He also stated that Walker was not prejudiced by the defendant's absence.
In his reply to the trial court's briefing order, Walker claimed that he too was dissatisfied with the arbitration award and stood ready to reject it himself. He explained that after settlement negotiations failed, it was agreed by both parties that defendant would reject the award. Walker further requested that the court decline to bar defendant from rejecting the award.
At a hearing May 29, 2003, Walker informed the trial court that he expressly *930 waived any sanction that might issue as a result of defendant's failure to appear at the arbitration hearing. The record reveals that this waiver was memorialized in a letter from Walker's counsel to defense counsel dated April 28, 2003. After the hearing on May 29, 2003, over the objection of both parties, the trial court entered an order debarring defendant from rejecting the award of the arbitrators for failing to appear at the arbitration hearing pursuant to Walker's Rule 237 request. It did so on the ground that defendant's failure to appear at the arbitration violated Supreme Court Rule 91(b), which requires good-faith participation at an arbitration hearing. 145 Ill.2d R. 91(b). On the same day, the trial court struck the previously established trial date and entered judgment on the arbitration award. It also denied Walker's oral motion to reject the award himself, finding that Walker should have timely filed an objection under Supreme Court Rule 93(a) despite the fact that defendant had already rejected the award within the requisite 30 days. See 166 Ill.2d R. 93(a).
On June 24, 2003, Walker brought a motion to reconsider the trial court's rulings of May 29, 2003. The motion to reconsider was denied by the trial court on July 8, 2003, on the basis that no new facts or arguments were presented to the court. In the order dated July 8, 2003, the court stated that it stood "on its finding of fact that Defendant failed to participate in good faith and failed to comply with the Plaintiff's Rule 237 Notice."
On August 7, 2003, Walker filed a motion to adjudicate liens. The motion indicated that two separate liens had attached to Walker's cause; a worker's compensation lien asserted by Liberty Mutual Insurance Company, Inc. (Liberty Mutual), and a physician's lien filed by Alpha Pain Treatment Center, located in Riverside, Illinois where Walker had been treated for his injuries over the course of several weeks. The motion asserted that because the trial court debarred defendant from rejecting the arbitration award and would not allow Walker to reject the award due to "untimeliness," Walker was stuck with a $3,000 arbitration award that "[fell] woefully short of [compensating him for] his injuries." According to Walker's motion to adjudicate, the worker's compensation lien totaled $4,337.75, $841.76 in medical bills and $3,495.99 in lost wages due to Walker's inability to work. Walker argued that the worker's compensation lien should be reduced to zero because he did not pursue a claim of lost wages and his employer denied that he missed any time from work due to the accident.
With regard to the physician's lien, Walker claimed that the lien should be reduced to 33% of the recovery under section 1 of the Physicians Lien Act (770 ILCS 80/1 (West 2000) (providing that a physician's lien shall not exceed one-third of the sum paid to the injured person on the claim)). On September 3, 2003, the trial court adjudicated the physician's lien to zero, but denied Walker's motion to adjudicate the worker's compensation lien held by Liberty Mutual. Walker appeals the trial court's orders of May 29, 2003, July 8, 2003, and September 3, 2003.
We first address whether the trial court abused its discretion when it sua sponte debarred defendant from rejecting the arbitration award. A trial court has the discretion to determine whether to bar a party from rejecting an arbitration award and that decision will not be disturbed on appeal absent an abuse of discretion. Easter Seal Rehabilitation Center for Will-Grundy Counties, Inc. v. Current Development Corp., 307 Ill.App.3d 48, 50, 240 Ill.Dec. 215, 716 N.E.2d 809 (1999). An abuse of discretion *931 is found "`when the court rules arbitrarily or when its ruling "exceed[s] the bounds of reason."' [Citation.]" Easter Seal Rehabilitation Center, 307 Ill.App.3d at 50, 240 Ill.Dec. 215, 716 N.E.2d 809.
Walker argues, among other things, that the trial court abused its discretion when it debarred defendant from rejecting the arbitration award because there was no evidence supporting the sanction and there was no petition for sanctions before the court. These arguments are unopposed by defendant, who did not file a response brief on appeal. As noted above, the trial court's basis for debarring defendant from rejecting the arbitration award was the trial court's finding that defendant acted in bad faith in violation of Rule 91(b) by failing to appear at the arbitration hearing pursuant to Walker's Rule 237 request.
Rule 91(b) provides in relevant part:
"All the parties to the arbitration hearing must participate in the hearing in good faith and in a meaningful manner. If a panel of arbitrators unanimously finds that a party has failed to participate in the hearing in good faith and in a meaningful manner, the panel's finding and factual basis therefor shall be stated on the award. Such award shall be prima facie evidence that the party failed to participate in the arbitration hearing in good faith and in a meaningful manner and a court, when presented with a petition for sanctions or remedy therefor, may order sanctions as provided in Rule 219(c), including, but not limited to, an order debarring that party from rejecting the award, and costs and attorney fees incurred for the arbitration hearing and in the prosecution of the petition for sanctions, against that party." (Emphasis added.) 145 Ill.2d R. 91(b).
A party is required to "participate in an arbitration hearing in good faith by subjecting the case to the type of adversarial testing expected at a trial." State Farm Insurance Co. v. Harmon, 335 Ill.App.3d 687, 690, 269 Ill.Dec. 538, 781 N.E.2d 335 (2002). A party acts in bad faith "where its actions amount to a deliberate and pronounced disregard for the rules and the court." Harmon, 335 Ill.App.3d at 690, 269 Ill.Dec. 538, 781 N.E.2d 335. "Bad faith may consist of inept preparation or intentional disregard for the process." Harmon, 335 Ill.App.3d at 690, 269 Ill.Dec. 538, 781 N.E.2d 335
For the following reasons, we conclude that the trial court abused its discretion in debarring defendant from rejecting the arbitration award.
We first find that there was no evidence supporting the sanction in this case. The analysis in Anderson v. Mercy, 338 Ill.App.3d 685, 273 Ill.Dec. 174, 788 N.E.2d 765 (2003), is instructive here. In Anderson, the plaintiff sued the defendant as the result of an automobile collision. The matter was submitted to mandatory arbitration. Prior to the arbitration hearing, defense counsel informed the plaintiff's attorney that he did not intend to produce his client (the defendant) because he anticipated admitting liability. The plaintiff did not object to the defendant's absence and did not request his presence at the hearing pursuant to Rule 237. An arbitration hearing was held and the defendant was not present although he was represented by defense counsel. Defense counsel did not present an arbitration package under Rule 90(c) and did not present any direct evidence at the arbitration hearing. The arbitrators entered an award on behalf of the plaintiff and made no finding that the defendant acted in bad faith.
The defendant then rejected the arbitration award and the plaintiff responded by *932 filing a motion to debar the defendant's rejection on the basis that the defendant presented no evidence to the arbitration panel and failed to participate at the arbitration hearing in good faith. Defendant responded by asserting that he actively participated in the arbitration proceedings through counsel, who indicated by affidavit that he cross-examined plaintiff and made a closing argument. The trial court found that defendant failed to participate in good faith at the arbitration hearing and he was barred from rejecting the award. The trial court reasoned that the defendant did not present any evidence at the arbitration hearing and "`deemed it too inconvenient'" to appear. Anderson, 338 Ill.App.3d at 688, 273 Ill.Dec. 174, 788 N.E.2d 765.
The issue on appeal was whether the trial court erred in barring the defendant from rejecting the arbitration award. The appellate court noted the well-established principle that "bad faith" in the context of an arbitration proceeding consists of "`inept preparation or intentional disregard for the process.' [Citation.]" Anderson, 338 Ill.App.3d at 689, 273 Ill.Dec. 174, 788 N.E.2d 765. In disposing of the issue, the court considered the following factors: the record before the trial court did not contain a transcript of the arbitration hearing; the arbitrators did not make a finding that the defendant failed to participate in good faith, nor did the award indicate noncompliance with a Rule 237 notice to produce; and there was no claim that the plaintiff was prejudiced or inconvenienced by the defendant's failure to present evidence. Citing West Bend Mutual Insurance Co. v. Herrera, 292 Ill.App.3d 669, 676, 226 Ill.Dec. 862, 686 N.E.2d 645 (1997), the appellate court found that in the absence of either a bad-faith finding by the arbitrators or a transcript of the proceedings, the trial court was not in a position to determine whether defense counsel's opening statement, cross-examination of the plaintiff, and closing statement constituted bad-faith participation based on failure to present evidence. Anderson, 338 Ill.App.3d at 690, 273 Ill.Dec. 174, 788 N.E.2d 765. Thus, the court concluded that the trial court abused its discretion in debarring the defendant from rejecting the award. Anderson, 338 Ill.App.3d at 691, 273 Ill.Dec. 174, 788 N.E.2d 765.
We find the facts in Anderson are similar to those in the instant case. Significantly, the arbitrators here, like the panel in Anderson, did not find that the defendant failed to participate in good faith. Although no Rule 237 request was made in Anderson, here the arbitrators were aware of defendant's absence despite a Rule 237 request, yet the arbitrators made no bad-faith finding in the arbitration award. Thus, there was no prima facie evidence that the defendant failed to participate in good faith under Rule 91(b). 145 Ill.2d R. 91(b).
Further, there was no evidence that the defendant's participation here amounted to inept preparation or intentional disregard for the arbitration process. The response and reply to the trial court's motion filed by the defendant and Walker, respectively, indicated these facts. The defendant did participate in the arbitration hearing by making an opening statement, cross-examining Walker, and making a closing argument. Defendant claimed that Walker was not prejudiced by his failure to appear.
The lack of prejudice is supported by the fact that Walker requested the court not to bar defendant from filing the rejection. At the hearing on the trial court's motion on May 29, 2003, Walker indicated that he waived the imposition of any sanction based on defendant's failure to appear at the arbitration hearing and that such *933 waiver was memorialized in a letter to defense counsel dated April 28, 2003.
Despite the claims of not only defendant, but also Walker, the trial court on its own debarred defendant from rejecting the award apparently based on the "classic example of party(s) attempting to treat [the] arb[itration] process as merely another hurdle to be overcome before trial," and "no meaningful participation + 237 violation." These findings, however, are based upon conclusions and the trial court relied upon no evidence indicating defendant's inept preparation or intentional disregard for the arbitration process.
Like Anderson, here, the record does not show that the trial court had a transcript of the arbitration hearing at the time it entered its order. Without the benefit of that transcript, the trial court had no way of determining whether defense counsel's participation at the arbitration hearing by making an opening statement, cross-examining Walker, and making a closing argument amounted to bad faith. Further, there is no claim by either party that Walker was prejudiced, or even inconvenienced, by defendant's failure to appear at the arbitration hearing. We therefore find that there was no evidence supporting the trial court's finding of bad faith and the sanction imposed.
Moreover, we note that a trial court's finding of bad-faith participation without the benefit of a transcript of the arbitration proceedings and without a prior finding of bad faith by the arbitration panel has been discouraged. See West Bend Mutual Insurance Co. v. Herrera, 292 Ill.App.3d 669, 674, 226 Ill.Dec. 862, 686 N.E.2d 645 (1997).
We also interpret Rule 91(b), set forth above, to mean that sanctions should be entered when a litigant presents a petition for sanctions, not on the court's own motion. Specifically, we construe the language, "a court, when presented with a petition for sanctions," in Rule 91(b) to mean that a court may enter sanctions when a litigant presents the court with a petition for sanctions. 145 Ill.2d R. 91(b). We do not read the rule to mean that a trial court may, sua sponte, debar a party from rejecting an arbitration award where no party has presented a petition for sanctions. Our research has revealed no decision where a reviewing court has affirmed a trial court's sua sponte sanction debarring a party from rejecting an arbitration award where no petition for sanctions was made by either party. However, our construction of Rule 91(b) is supported by other decisions interpreting Supreme Court Rule 92(c), a companion rule in the Illinois arbitration system. 155 Ill 2d. R 92(c).
Specifically, the appellate court has determined it is error for a trial court to enter judgment on an arbitration award sua sponte under Rule 92(c) because Rule 92(c) places the obligation on the parties to bring the motion for judgment on the award. Lollis v. Chicago Transit Authority, 238 Ill.App.3d 583, 585, 179 Ill.Dec. 647, 606 N.E.2d 479 (1992); George v. Ospalik, 299 Ill.App.3d 888, 891, 234 Ill.Dec. 328, 702 N.E.2d 982 (1998).
In Lollis, the plaintiff filed a personal injury action against the defendants, the Chicago Transit Authority (CTA) and its driver employee, when a bus driven by the defendant employee, and on which the plaintiff was a passenger, stopped suddenly. The action went to mandatory arbitration and an award was handed down in favor of the defendants. The plaintiff rejected the arbitration award under Supreme Court Rule 93(a) (166 Ill.2d R. 93(a)) and the matter was set for trial. On the trial date, the plaintiff's counsel indicated the plaintiff was "not ready" for trial because the plaintiff was incarcerated and *934 the plaintiff's counsel requested a continuance. The trial court denied the plaintiff's request and found that the plaintiff had not adequately preserved his right to reject the arbitration award for the defendants, given the plaintiff's inability to proceed to trial. The trial court then entered judgment on the arbitrators' award in favor of the defendants. The plaintiff, in two separate motions, sought to vacate the trial court's order but the motions were denied. The plaintiff appealed claiming that the trial court erred when it found that the plaintiff had not adequately preserved his rejection of the arbitration award because he was not prepared to go to trial and that the subsequent judgment on the award amounted to a prejudicial disposition of the action.
On review, the appellate court found that the trial court erred in entering judgment on the award sua sponte. Lollis, 238 Ill.App.3d at 585, 179 Ill.Dec. 647, 606 N.E.2d 479. Specifically, the court stated that Rule 92(c) "places the obligation on the parties to bring the motion; it makes no provision for the court to enter judgment on its own motion." Lollis, 238 Ill.App.3d at 585, 179 Ill.Dec. 647, 606 N.E.2d 479. It also found that Rule 92(c) permits entry of judgment on the arbitrators award only if no party rejects it and that the plaintiff had complied with the requirements of Rule 93(a) in rejecting the arbitration award. Lollis, 238 Ill.App.3d at 585-86, 179 Ill.Dec. 647, 606 N.E.2d 479. Based on these two errors, the trial court was reversed. Lollis, 238 Ill.App.3d at 588, 179 Ill.Dec. 647, 606 N.E.2d 479.
In George, cited above, the plaintiffs brought a personal injury and property damage action against the defendant as the result of an automobile accident. A mandatory arbitration hearing was held and the arbitrators ruled in favor of the defendant and against the plaintiffs. On the same day as the arbitration hearing, the trial court entered an order setting the case for status report on October 27, 1997. The order stated that if a rejection of the arbitration award had not been filed by the status date, a judgment would be entered pursuant to the award of the arbitrators and neither party was required to appear. No rejection of the arbitration award was filed by October 27, 1997. On the status date, the plaintiffs filed a motion to voluntarily dismiss the case. The motion was denied and the trial court entered judgment in favor of the defendant on the arbitration award.
On appeal, the plaintiffs claimed that the trial court erred in entering judgment on the arbitration award sua sponte. They argued that a trial court could only enter a judgment on an arbitration award pursuant to a motion by a party under Rule 92(c). Based on the language in Rule 92(c) and Lollis, the George court concluded that Rule 92(c) places the obligation on the parties to bring a motion to enter judgment on the award and it does not allow a trial court to enter a judgment on its own motion. George, 299 Ill.App.3d at 891, 234 Ill.Dec. 328, 702 N.E.2d 982.
While we acknowledge that Lollis and George did not involve Rule 91(b), the Lollis court indicated that the arbitration rules are a "comprehensive package of rules" promulgated to create the mandatory arbitration system in Illinois and these rules "cannot [be] read" in a vacuum; we must attempt to harmonize [them] as a unified body of law. [Citations.]" Lollis, 238 Ill.App.3d at 587, 179 Ill.Dec. 647, 606 N.E.2d 479. See also Martinez v. Gaimari, 271 Ill.App.3d 879, 884, 208 Ill.Dec. 262, 649 N.E.2d 94 (1995). Given the requirement that we interpret the arbitration rules harmoniously, we conclude that if a court may not enter judgment on an award sua sponte under the language of Rule 92(c), it is likewise improper for a *935 trial court to move to debar a litigant from rejecting an arbitration award sua sponte in the absence of a petition for sanctions filed by a moving party under Rule 91(b).
We note that the construction of Supreme Court Rule 90(g) (166 Ill.2d R. 90(g)) in other appellate court decisions does not conflict with our finding that Rule 91(b) requires a litigant to present a petition for sanctions. Rule 90(g), which involves compelling the appearance of a witness at a hearing, states:
"The provisions of Rule 237, herein, shall be equally applicable to arbitration hearings as they are to trials. The presence of a party may be waived by stipulation or excused by court order for good cause shown not less than seven days prior to the hearing. Remedies upon a party's failure to comply with notice pursuant to Rule 237(b) may include an order debarring that party from rejecting the award." 166 Ill.2d R. 90(g).
In several decisions, the appellate court has determined that it is within the trial court's authority under Rule 90(g) to bar a party from rejecting an award as a sanction for failing to comply with a notice to appear under Rule 237(b). Bachmann v. Kent, 293 Ill.App.3d 1078, 1082, 228 Ill.Dec. 299, 689 N.E.2d 171 (1997); State Farm Insurance Co. v. Gebbie, 288 Ill.App.3d 640, 643, 224 Ill.Dec. 280, 681 N.E.2d 595 (1997); Williams v. Dorsey, 273 Ill.App.3d 893, 900-01, 210 Ill.Dec. 310, 652 N.E.2d 1286 (1995). However, none of these cases involved a trial court's sua sponte sanction barring a defendant from rejecting an arbitration award. Instead, the trial court in each of these cases, under its Rule 90(g) authority, imposed a sanction barring the defendant from rejecting the arbitration award pursuant to a motion brought by the plaintiff. Bachmann, 293 Ill.App.3d at 1080, 228 Ill.Dec. 299, 689 N.E.2d 171; Gebbie, 288 Ill.App.3d at 642, 224 Ill.Dec. 280, 681 N.E.2d 595; Williams, 273 Ill.App.3d at 896, 210 Ill.Dec. 310, 652 N.E.2d 1286. And in each of these cases, the appellate court found the trial court did not abuse its discretion in so doing. Bachmann, 293 Ill.App.3d at 1082, 228 Ill.Dec. 299, 689 N.E.2d 171; Gebbie, 288 Ill.App.3d at 644, 224 Ill.Dec. 280, 681 N.E.2d 595; Williams, 273 Ill.App.3d at 901, 210 Ill.Dec. 310, 652 N.E.2d 1286. Because none of these cases involved the sua sponte action of the trial court, they are distinguishable and do not frustrate our construction of Rule 91(b) in the instant case.
For the reasons above, we find that the trial court abused its discretion in its sua sponte order barring defendant from rejecting the arbitration award. Because of this finding, we need not address the additional arguments raised by Walker.
Additionally, because we reverse the trial court and remand this case for trial, the second issue regarding Walker's motion to adjudicate, is moot because we are vacating the judgment award. An issue becomes moot "if the interests and right of the parties are no longer in controversy and the resolution of the issue will have no practical effect. [Citation.]" Adkins Energy, LLC v. Delta-T Corp., 347 Ill.App.3d 373, 282 Ill.Dec. 685, 806 N.E.2d 1273 (2004). Liberty Mutual concedes this point in its "Brief of Lienholder." We therefore need not address this question.
The trial court's orders of May 29, 2003, July 8, 2003, and September 3, 2003, are reversed and the case is remanded for trial.
Reversed and remanded for trial.
CAHILL, P.J., and GORDON, J., concur.
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437 F.2d 196
Nathan RICHMAN, Administrator, Plaintiff, Appellant,v.GENERAL MOTORS CORPORATION, Defendant, Appellee.
No. 7718.
United States Court of Appeals, First Circuit.
Feb. 3, 1971.
James W. Kirk, Boston, Mass., with whom John J. Perenyi, Brockton, Mass., was on the brief, for appellant.
Timothy H. Donohue, Boston, Mass., with whom Hale, Sanderson, Byrnes & Morton, Boston, Mass., was on the brief, for appellee.
Before McENTEE and COFFIN, Circuit Judges, and JULIAN, District judge.*
McENTEE, Circuit Judge.
1
Plaintiff's intestate, while driving her 1964 Chevrolet Corvair in the wrong direction on a divided highway in Brighton, Massachusetts, collided with another car coming in the opposite direction. The impact of the collision allegedly thrust the Corvair's steering rod and column into her heart, as a result of which she died. In this diversity action, plaintiff claims that but for the defendant manufacturer's negligent design of the 1964 Corvair, particularly the steering rod and column, his intestate would not have lost her life in this accident. As will presently appear, however, the liability aspects of this case are not directly before us for decision on this appeal.
2
Suit was brought in the district court on January 13, 1969. In due course the defendant answered, and between June 1969 and May 1970 the parties propounded written interrogatories to each other. On May 8, 1970, the court notified both parties to appear on May 20 for assignment of a trial date. Neither the plaintiff's trial attorney nor the plaintiff himself, who was also an attorney, appeared on the 20th and the court dismissed the suit for failure to appear and prosecute. It later appeared that the plaintiff was out of the country on May 20 and that his trial attorney had not entered his appearance in the case until June 30, 1970, and hence had not received the May 8 notice. When plaintiff returned to this country on June 1, he immediately filed a motion to vacate the dismissal, setting forth as his reasons (1) mistake and inadverstence of his trial counsel, (2) that he had a meritorious cause of action, and (3) that he would suffer irreparable harm if the order were not vacated.1 A hearing was held on this motion on July 2, at which plaintiff represented to the court that he had substantial engineering data and expert testimony indicating that, because the design of the Corvair steering shaft was faulty, a frontal collision would project the steering post towards the operator. On July 9 the court vacated the dismissal and on the following day sent the parties a notice of trial for Monday, August 24, 1970. On August 20 plaintiff obtained twelve subpoenas from the clerk of court but on the following day filed a 'Request for a Conference' representing to the court that a situation had arisen which should be brought to its attention prior to August 24, 1970. He also requested that all counsel be given an opportunity to confer with the court at its convenience. It appears that this was done with the knowledge and approval of defendant's attorney. The court, however, refused to confer with counsel as requested, whereupon plaintiff filed a formal motion to continue the case for trial to a day certain in November. In it, plaintiff recited that he had engaged three experts to testify to the chief issues in the case, namely, the defective design of the Corvair and the extent of the injuries plaintiff sustained by reason of said defective design;2 that upon receipt of notice of trial, he had made numerous unsuccessful efforts to contact these experts until August 17 when he learned for the first time that none of them would be available for trial on August 24. When the case was called on the 24th, plaintiff's attorney asked to address the court on the motion for a continuance. That request was summarily denied as was the motion for a continuance, and the court dismissed the case.3 From this dismissal, plaintiff appeals.
3
Under Fed.R.Civ.P. 41(b) as well as under the inherent power of the court, a complaint may be dismissed with prejudice for want of prosecution. Link v. Wabash R. Co., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962). Such dismissal is within the court's sound discretion and will be reversed only upon a showing of an abuse of that discretion. In determining whether there has been such an abuse all pertinent circumstances must be considered. Dismissal is a harsh sanction which should be resorted to only in extreme cases. The court has a broad panoply of lesser sanctions available to it.4 Moreover, the power of the court to prevent undue delays must be weighed against the policy of the law favoring the disposition of cases on their merits. Dyotherm Corp. v. Turbo Machine Co., 392 F.2d 146, 149 (3d Cir. 1968); Flaksa v. Little River Marine Construction Co., 389 F.2d 885, 888 (5th Cir.), cert. denied, 392 U.S. 928, 88 S.Ct. 2287, 20 L.Ed.2d 1387 (1968); Davis v. Operation Amigo, Inc., 378 F.2d 101, 103 (10th Cir. 1967). Moreover, as stated by Judge Wisdom in Durham v. Florida East Coast Ry. Co., 385 F.2d 366, 368 (5th Cir. 1967),
4
"the sanction of dismissal is the most severe sanction that a court may apply, and its use must be tempered by a careful exercise of judicial discretion.' Durgin v. Graham, 1967, 5 Cir., 372 F.2d 130, 131. The decided cases, while noting that dismissal is a discretionary matter, have generally permitted it only in the face of a clear record of delay or contumacious conduct by the plaintiff.'
5
See also Syracuse Broadcasting Corp. v. Newhouse, 271 F.2d 910, 914 (2d Cir. 1959). Finally, we note that 'no precise rule can be laid down as to what circumstances justify a dismissal for failure to prosecute but the procedural history of each case must be examined in order to make such determination.' Davis, supra, 378 F.2d at 103.
6
In light of the aforesaid guidelines we are of the opinion that the district court imposed too harsh a penalty on the plaintiff in dismissing his complaint in the circumstances of this case. To begin with, we cannot say that plaintiff's cause of action is necessarily lacking in substance.5 At the time of the August dismissal nineteen months had elapsed since the complaint had been filed, but the district court's time had been little used and both parties were advancing the case. There is no indication that defendant's case has been harmed by the delay although, of course, defendant may have incurred expense in preparing to go to trial on August 24. In oral argument on appeal, plaintiff presented a satisfactory explanation for his actions in August 1970, e.g., requesting subpoenas, etc. His account of his activities-- or lack of them-- between July 14 and August 24 shows that he was not contumacious. Yet the district court summarily refused to confer with plaintiff or listen to why he could not go forward with the trial on August 24. Moreover, August 24 was actually the first time the case was reached for trail-- not the second time, as the court originally stated. See note 3, supra.
7
In reaching our conclusion, however, we wish to make it clear that neither the plaintiff nor his attorney were free from fault in this matter. They were responsible in large measure for the predicament in which they found themselves in not having their experts available on the trial date. As a practical matter, we recognize that it is not easy for plaintiffs to obtain experts, especially in this type of case, and make them available even on six weeks notice during the summer months. Plaintiff represented during oral argument that he placed no less than ten telephone calls to his experts between July 10 and August 17 without reaching any of them personally. But we fault him for not acting more effectively. Although we feel that the able trial judge had reason to be impatient with plaintiff and his trial counsel, nevertheless we think that under the circumstances dismissal of the action was altogether too harsh and that the ends of justice would have been well served by imposing a lesser penalty. We have seen no case in which such a harsh penalty was imposed on similar facts. As stated in Davis, supra, 378 F.2d at 103: 'A dismissal, with prejudice, is a harsh sanction and should be resorted to only in extreme cases. * * * The judge must be ever mindful that the policy of the law favors the hearing of a litigant's claim upon the merits.'
8
The judgment of the district court is reversed with instructions to reinstate the case to its status as of the time said judgment was entered. It is within the district court's discretion to impose reasonable sanctions upon the plaintiff or his attorney or both short of final disposition of the case.
*
Sitting by designation
1
Any new action would have been barred by the statute of limitations, which had long since run
2
In oral argument, plaintiff represented to this court that he had engaged these experts a year before
3
'Mr. Kirk: May I address the Court?
'The Court: On what?
'Mr. Kirk: On the motion for a continuance.
'The Court: The motion for continuance is denied.
'Mr. Kirk: Will you hear me, your Honor? We have certain reasons in addition to the written reasons that we gave you to present.
'The Court: If you have reasons in addition to the written reasons, you must put them in writing.
'Mr. Kirk: If your Honor please, we would like the Court's indulgence in going forward on this case.
'The Court: This case is reached for trial the second time. The last time no one appeared and the action was dismissed. On the representations made at the time the motion to restore the case to the trial list and to vacate the order of dismissal was filed, the Court considered the same and vacated your dismissal. At the same time the Court has set the case down for trial today. The case will go forward.
'Mr. Kirk: With your Honor's indulgence, at that time--
'The Court: I will not hear you further. Is the plaintiff ready to go forward?
'Mr. Kirk: No, we are not, your Honor, because we have-- our witnesses can't be here.
'The Court: You will kindly hand to the Clerk all of the subpoenas that were taken out last week so that the Court may examine the returns on them.
'Mr. Kirk: None were made out, I am advised by my brother whose case it is.
'The Court: Unless the plaintiff is prepared to go forward forthwith, the action will be dismissed.
'Mr. Kirk: If your Honor please, it is a hardship.
'The Court: Is the plaintiff ready to go forward?
'Mr. Kirk: No, he is not.
'The Court: All right, the action is dismissed.'
It is noted that defendant's attorney neither moved nor pressed for dismissal.
4
E.g., contempt, fines, conditional orders of dismissal, etc. See generally Waterman, An Appellate Judge's Approach When Reviewing District Court Sanctions Imposed for the Purpose of Insuring Compliance with Pretrial Orders, 29 F.R.D. 420, 425-426 (1962); Note, 72 Yale L.J. 819, 830-32 (1963); see also Comment, 34 U.Chi.L.Rev. 922 (1967); Note, 51 Geo.L.J. 309 (1963); Note, 38 Notre Dame Lawyer 158 (1963)
5
E.g., Larsen v. General Motors Corp., 391 F.2d 495 (8th Cir. 1968); Grundmanis v. British Motor Corp., 308 F.Supp. 303 (E.D.Wis.1970); Dyson v. General Motors Corp., 298 F.Supp. 1064 (E.D.Pa.1969); Mickle v. Blackmon, 252 S.C. 202, 166 S.E.2d 173 (1969); Restatement, Torts 2d 398 (1965); cf. LeBlanc v. Ford Motor Co., 346 Mass. 225, 191 N.E.2d 301, 6 A.L.R.3d 83 (1963); Flaherty v. New York, N.H. & H.R.R., 337 Mass. 456, 149 N.E.2d 670 (1958); Thornhill v. Carpenter-Morton Co., 220 Mass. 593, 108 N.E. 474 (1915); contra. e.g., Evans v. General Motors Corp., 359 F.2d 822 (7th Cir.), cert. denied, 385 U.S. 836, 87 S.Ct. 83, 17 L.Ed.2d 70 (1966)
| {
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563 F.Supp. 608 (1983)
SDS LUMBER COMPANY, a Washington corporation, Plaintiff,
v.
ALLENDALE MUTUAL INSURANCE COMPANY, a Rhode Island corporation, Defendant.
Civ. No. 81-485BU.
United States District Court, D. Oregon.
May 6, 1983.
Michael E. Haglund, David H. Lohman, Lindsay, Hart, Neil & Weigler, Portland, Or., for plaintiff.
Douglas G. Houser, John W. Buehler, Bullivant, Wright, Leedy, Johnson, Pendergrass & Hoffman, Portland, Or., for defendant.
JAMES M. BURNS, Chief Judge:
SDS Lumber Company (SDS) obtained a $427,610[1] jury verdict against Allendale *609 Mutual Insurance Company (Allendale) on a business interruption insurance policy. The matter is now before me on SDS's motion for prejudgment interest. For reasons discussed below, the motion is denied.
FACTS
This is a diversity action. Oregon law applies.
SDS is a Washington corporation. It operates wood products facilities in the Pacific Northwest, including the Cascade Locks Lumber Company (Cascade Locks) at Cascade Locks, Oregon. Allendale is a Rhode Island corporation. It insured SDS and its affiliates against business interruption losses.[2]
When the trial began on January 10, 1983, precisely three years had passed since a silver thaw hit western Oregon and Washington, causing severe property damage. In the Columbia River Gorge, ice and snow drifting to heights of over six feet collapsed many of the buildings at Cascade Locks.
At the time of the ice storm, Cascade Locks was shut down, in part, to allow SDS to modify the edger table in the sawmill. The mill had been closed since late fall 1979. However, SDS claimed that but for the ice storm it would have completed the modification and restarted the mill by mid-February 1980. In fact, SDS took advantage of the down time to modernize some of the facilities and did not restart the mill until well into the summer of 1980.
On August 13, 1980, SDS filed its initial proof of loss statement with Allendale, claiming it lost $274,819 on the production of ties, timbers, and chips for the period from February 18 through April 30. This was the period SDS estimated it would have needed, using due diligence and dispatch, to repair the mill to where it could resume normal operations. Later, on March 6, 1981, SDS submitted a second proof of loss statement extending the claim period to May 30. This resulted in a claim of $448,011. Allendale rejected the claim and this lawsuit followed.
Following several months of discovery, SDS tendered a new statement of loss on February 23, 1982, based on its expectation that Cascade Locks would have produced dimension lumber in addition to ties, timbers, and chips. This statement, totalling $618,900, also revised upward the amount of wood products Cascade Locks would have produced and the expenses it would have incurred during the interruption period. At trial, SDS submitted into evidence a fourth computation of its claim. This resulted in the same net amount of claim as the third claim with different figures on anticipated gross profit and expenses. This fourth claim went to the jury.
At trial, the parties presented conflicting evidence as to when SDS would have restarted Cascade Locks had there been no ice storm. The 1980s have been exceptionally bad years for the wood products industry. Many mills have been idle. Consequently, the jury heard testimony from industry experts as to whether Cascade Locks could have weathered the economic climes better than it did the meteorologic.
The jury heard conflicting evidence as to the type, grade, and quantity of products Cascade Locks could and would have produced and at what prices. There was conflicting evidence as to whether SDS could have made up the production it lost at Cascade Locks by running an extra shift at one of its other mills. There was also conflicting *610 evidence concerning the reasonableness of the manner of performance of the repairs at Cascade Locks. SDS elected to repair the facility itself rather than employ the casualty repair expert whose services Allendale had promptly made available to SDS.
In sum, the jurors listened to four days' testimony from lumbermen, accountants, and contractors, and then, like Alexander with the Gordian Knot, returned a verdict for $427,610.[3]
LAW
By statute, Oregon courts award prejudgment interest at nine percent per year on "[a]ll monies after they become due; ..." Or.Rev.Stat. § 82.010(2)(a) (1981). The Oregon courts interpret this grant as limited to breach of contract claims where the exact amount of the damages is either ascertained or readily ascertainable and the time from which the interest runs is easily ascertained. Krieg v. Union Pacific Land Resources Corp., 269 Or. 221, 234, 525 P.2d 48, 54 (1974); Public Market Co. of Portland v. City of Portland, 171 Or. 522, 625, 130 P.2d 624, 138 P.2d 916, 918 (1943).
Because the Oregon courts do not allow prejudgment interest in personal injury actions, Calcagno v. Holcomb, 181 Or. 603, 613-14, 185 P.2d 251, 255 (1947), the award is apparently intended to compel debtors to pay debts when due rather than *611 to make whole the party the debtor injured. As the Oregon Supreme Court said in United Farm Agency v. McFarland, 243 Or. 124, 133, 411 P.2d 1017, 1022 (1966): "[Or.Rev. Stat. § 82.010(2)(a)] imposes a duty to pay interest only in those cases in which the law recognizes a duty to pay a certain sum at a certain time and such a payment has not been made."[4] The ready ascertainability requirement makes sense in this context. If the object of the rule were to compensate injured parties for the loss of money that should have been theirs from the time of their injuries then there is no need to require that damages be readily ascertainable. Physical injuries are not ascertainable in the same sense as are contract damages because physical injuries do not take on a pecuniary character until the jury by its verdict says they do.
Prejudgment interest provides a disincentive to debtors to delay settling their accounts. If, however, a debtor cannot reasonably compute what he owes the creditor, the potential award loses its compulsive effect. A debtor cannot wrongfully withhold that which he cannot know he owes. See Public Market Co., 171 Or. at 628, 138 P.2d at 919. Because the award serves to compel the debtor to act, it is from the debtor's viewpoint the court must direct its inquiry into the ready ascertainability of the creditor's claim.[5] Of course, the evidence presented at trial is usually the best indicator of the information with which the debtor had to work.
DISCUSSION
With those thoughts in mind, I turn to the questions central to this motion: whether SDS's business interruption loss was readily ascertainable and, if so, whether the time from which the interest runs was easily ascertained. I do not reach the second question because the short answer to the first is no.[6]
*612 The Oregon courts have not dealt with whether to award prejudgment interest on a business interruption loss. My job, therefore, is to rule as I believe the Oregon Supreme Court would if it were faced with these questions. Commercial Union Insurance Co. v. Ford Motor Co., 640 F.2d 210, 212-13 (9th Cir.), cert. denied, 454 U.S. 858, 102 S.Ct. 310, 70 L.Ed.2d 154 (1981). This is not an easy task because the cases are not sufficiently consistent with one another for me to identify the most cogent principles or relevant factors to guide me on my way.[7] Nevertheless, I conclude the Oregon Supreme Court would find Allendale could not have readily ascertained SDS's business interruption loss. I arrive at this conclusion based on the following factors.
1. SDS's business interruption loss was hypothetical. The mill was not operating at the time of the casualty. This does not prevent SDS's recovery of damages but it does make the amount of damages difficult to ascertain.
Cascade Locks did not have an immediate past production when the ice storm damaged the mill. Allendale, and later the jurors, had to determine when, given the soft market, SDS would have reopened Cascade Locks. This decision necessarily involved conjecture. Then they had to determine what and how much wood products Cascade Locks would have produced. There was little historical evidence on which to base this decision. To determine the amount of SDS's damage also required exploration of the permissible duration of the interruption period, i.e., the reasonableness of SDS's repair efforts and of the modifications to the facilities in the course of those repairs.
In a sense, this case can be analogized to lost profits cases. The Oregon courts are *613 particularly reluctant to award lost profits to a business without a proven track record. See Western Energy, Inc. v. Georgia Pacific Corp., 55 Or.App. 138, 637 P.2d 223 (1981); White v. Oregon Horticultural Supply, Inc., 40 Or.App. 323, 594 P.2d 1321 (1979). With a hypothetical starting point and with hypothetical production, SDS's business interruption loss was nearly as difficult to figure as the lost profits of a new business.
SDS contends its net profit was capable of being ascertained by reference to the 1980 wood products market. Allendale may well have been able to ascertain the market value of the wood products SDS would have produced at Cascade Locks. See Corder v. A & J Lumber Co., 223 Or. 443, 450-51, 354 P.2d 807, 810-11 (1960). But Allendale could not have ascertained what and how much SDS would have produced by reference to the wood products market. This is not the kind of generally recognized standard of value to which Public Market Co. referred. Cf. Or.Rev.Stat. § 72.3050(1)(c) (1981). The wood products market is affected by myriad forces.
I do not mean to indicate a court should never award prejudgment interest on a business interruption loss. But this is not the easy case where Cascade Locks operated in a stable market and where the type, grade, and quantity of its production remained the same over time. The evidence did not show a lengthy history of production by Cascade Locks of a set quantity of a particular mix of wood products over a several month period interrupted only by the few months needed to repair the storm damage. In the easy case, Cascade Locks's past and future production would provide a ready guide for determining its losses during the interruption period. See Stanley v. Onetta Boat Works, Inc., 303 F.Supp. 99, 106 (D.Or.1969), aff'd, 431 F.2d 241 (9th Cir.1970). Here, however, the equation contains as many, if not more, variables as it does constants.
2. SDS could not readily ascertain its own damages. Therefore, it is reasonable to conclude Allendale had the same difficulty.
During the course of this dispute, SDS submitted three proof of loss statements and four computations of its claim. SDS changed its mind about the types and amounts of wood products it would have produced at Cascade Locks. SDS also submitted different statements of the duration of the interruption period. None of these discrepancies prevent SDS from recovering its business losses but they serve to highlight the difficulty of reconstructing the company's past.
Submitting multiple claims does not automatically disqualify SDS from receiving prejudgment interest. See Walter E. Heller Western, Inc. v. Bohemia, Inc., 61 Or. App. 57, 68, 655 P.2d 1073, 1079-80 (1982); Isler v. Shuck, 38 Or.App. 233, 239-40, 589 P.2d 1180, 1183-84 (1979). In Heller Western, the plaintiff demanded one figure then sued for and obtained a lesser sum. The court of appeals nevertheless awarded the plaintiff prejudgment interest. When it made its initial demand, the plaintiff did not have all of the information it needed to compute its losses. But the defendant did have the information and, in fact, ascertained the amount it owed the plaintiff. In Isler, the plaintiffs demanded one figure then sued for another. During trial, the plaintiffs reduced their prayer to a third figure and in rebuttal settled on a fourth, still lower, amount. But the computation of the plaintiffs' claim there depended on information of which only the defendant had knowledge. The defendant "doggedly resisted the plaintiffs' efforts to arrive at an agreed upon computation ...." Id. 38 Or.App. at 240, 589 P.2d at 1184. The plaintiffs' claim would have been ascertainable from the outset had it not been for the defendant's recalcitrance. By contrast, the information necessary to compute SDS's claim has been within its ken. Therefore, if SDS had trouble figuring out what and how much wood products it could and would have produced and when, I ought not penalize Allendale by concluding it wrongfully withheld that sum.
3. Much of the information necessary to extrapolate Cascade Locks's lost business *614 came from accountants and from industry and market analysts. If industry experts could reasonably differ over what Cascade Locks could and would have produced and at what cost one cannot sensibly describe as readily ascertainable the measure of damages arising from the interruption period proved here.
Of course, that one needs an accountant to compute a claim does not for that reason make the claim difficult to ascertain. See McKean v. Bernard, 54 Or.App. 540, 547-49, 635 P.2d 673, 677-78 (1981). But the level of expertise needed to compute the amount of the claim is a factor for a court to consider in determining ready ascertainability. This factor alone may not support a finding here that SDS's claim is not readily ascertainable. However, taken together with the hypothetical nature of the claim and SDS's own trouble determining its losses, the need for expert testimony is strong evidence of the claim's lack of ready ascertainability. If SDS's loss had not been hypothetical, it would not have had such a difficult time computing its claim. If the loss had been easy to figure, SDS would not have needed the expert analysts.
CONCLUSION
To recover prejudgment interest, SDS must show Allendale could have readily ascertained SDS's business interruption loss. Allendale could not have done so. SDS's loss was hypothetical. It submitted a number of different statements of loss, and the evidence of the amount of the loss was complicated and diverse. SDS's motion for prejudgment interest is denied.[8]
NOTES
[1] This is a net figure. The jury verdict and the figures quoted from SDS's proof of loss statements reflect the application of the insurance policy's $25,000 deductible clause.
[2] The insurance contract between the parties defines business interruption loss as follows:
[T]he actual loss sustained by the Insured due to necessary interruption of business as a result of physical damage caused directly by the perils insured against .... In the event the insured is wholly or partially prevented from producing goods or from continuing business operations or services and is unable:
(a) to make up lost production within a reasonable period of time (not to be limited to the period during which production is interrupted); or
(b) to continue business operations or services;
all through the use of any property or service owned or controlled or obtainable from other sources or through working extra time or overtime at the location(s) specified herein, or at such other location(s) acquired for the purpose.
[3] To facilitate the jury's deliberations, I reduced the parties' instructions to a compendium. Even using this distilled instruction as a guide, I cannot figure out how the jurors arrived at the precise figure they did. The verdict does not equal any of the claims SDS submitted. But the jurors never asked me to clarify the instructions and it took them a relatively short five hours to reach their verdict. Apparently, with the electronic calculator they requested, the jurors devised a formula that made sense out of the variety of components of SDS's claims.
"The plaintiff, SDS Lumber Co., seeks to recover its net profits and fixed expenses for the period the January 10, 1980 ice storm interrupted its operations at Cascade Locks Lumber Co. The defendant, Allendale Mutual Insurance Co., insured SDS Lumber Co. and its affiliated company, Cascade Locks Lumber Co., against business interruption loss during 1980. Business interruption insurance puts the injured party in the position it would have been in had the injury not occurred. Your job is to determine what Cascade Lock Lumber Co.'s profits and fixed charges, if any, would have been if there had been no ice storm.
The insurance policy defines net profit and fixed expenses as follows:
1. Net profit is the profit Cascade Locks Lumber Co. was prevented from earning during the interruption period.
2. Fixed expenses include administrative expenses, interest on fixed indebtedness, advertising, taxes, other than income taxes, insurance, utility expenses, salaries or wages of personnel whose services had to be continued during the interruption or who are employed under guaranteed contracts, and all other items contributing to the overhead expenses Cascade Locks Lumber Co. incurred even though SDS did not operate the mill.
If you find Cascade Locks Lumber Co. would have lost money rather than earn a profit if it had operated during the interruption period, you should subtract that deficit from the fixed expenses SDS would otherwise be entitled to recover.
To find SDS suffered a business interruption loss, you must find the ice storm prevented Cascade Locks Lumber Co. from producing wood products. If you find the ice storm prevented Cascade Locks Lumber Co. from operating, you must then determine the period of time the storm closed the mill. The mill was idle when the storm damaged the mill. Therefore, you must determine (1) when SDS planned to open the mill and (2) when SDS, with due diligence and dispatch, should have repaired the mill to where it could resume normal operations. Normal operations means operations the way they would have been had there been no ice storm. It does not include operations as achieved by a modernization of the mill facilities. To determine when SDS planned to open the mill, you may consider the operation of the mill before and after the ice storm, and the market conditions during that time.
The insurance policy required SDS to do what it reasonably could to make up the interrupted production at Cascade Locks Lumber Co. If you find SDS reasonably could have produced some wood products at Cascade Locks Lumber Co. during the interruption period or reasonably could have made up some of the interrupted production at one of its other plants, you should subtract that amount from the net profits and fixed expenses SDS would otherwise be entitled to recover for the interruption period."
[4] House Bill 2363 currently before the Oregon legislature would purportedly make prejudgment interest available in all cases. See Hearings on H.B. 2363 Before the Special Task Force on Prejudgment Interest of the House Comm. on Judiciary, 1983 Sess., Tape H-83-JUD-133, Side A at 147 (statement of Charles Burt) (March 8, 1983).
[5] Relying on Adams v. Northwest Farm Bureau Insurance Co., 40 Or.App. 159, 165-67, 594 P.2d 1256, 1259-60 (1979), SDS contends ready ascertainability is irrelevant where the debtor denies liability. While Adams is not a model of clarity, I do not read the case as supporting that proposition. The ascertainability requirement was not irrelevant. The defendant insurance company simply did not dispute the Adams' computation of their damages: "the parties agree[d] on the facts of the incident and disagree[d] only on the import of the terms of the policy." Id. at 167, 594 P.2d at 1260. As such, Adams is viewed properly in the line of classic, i.e., easy, prejudgment interest cases in which the amount of damages, if any, is not in dispute; only liability is at issue. E.g., Gray v. Mitsui & Co. (U.S.A.), Inc., 434 F.Supp. 1071, 1079-80 (D.Or.1977); School District No. 1, Multnomah County v. Mission Insurance Co., 58 Or.App. 692, 714-15, 650 P.2d 929, 943 (1982); Ace Electric Co. v. Portland General Electric Co., 55 Or.App. 382, 388-89, 637 P.2d 1366, 1369-70 (1981); Carlson v. Blumstein, 54 Or.App. 380, 383-85, 635 P.2d 380, 383-84 (1981).
By the same token, despite language to the contrary in Arden-Mayfair, Inc. v. Patterson, 46 Or.App. 849, 857-58, 613 P.2d 1062, 1066-67 (1980), a claim is not unascertainable simply because the parties do not agree on the amount in dispute. For example, in Delaney v. Georgia Pacific Corp., 42 Or.App. 439, 446-49, 601 P.2d 475, 480-81 (1979), the court awarded prejudgment interest though the parties disputed not only the amount of the claim but also the method of its computation cruises of timberlands. See Corder v. A & J Lumber Co., 223 Or. 443, 450-51, 354 P.2d 807, 810-11 (1960).
[6] I would be inclined to rule against SDS on the second prong of the test. Assuming SDS's business interruption loss were readily ascertainable, it is not at all clear from what time that interest should run.
SDS wants interest from October 12, 1980, sixty days after its initial proof of loss statement. But this statement claimed only a $274,819 loss on a production mix SDS later said it would not have produced. I cannot penalize Allendale for withholding $427,610 when SDS only asked for $274,819. I reject SDS's suggestion that interest runs on $274,819 from October 12, 1980, and on the balance from May 5, 1981, sixty days after SDS's $448,011 proof of loss statement. SDS based neither claim on the mix or quantity it ultimately said Cascade Locks would have produced. At oral argument, SDS's counsel said he believed the jury based its verdict on the production mix stated in SDS's third proof of loss statement. SDS submitted the third proof of loss statement on February 23, 1982, and recalculated that claim at trial.
[7] It is difficult to reconcile the results even within narrow classes of cases. For example, in City of Portland ex rel. Donohue & Fleskes Corp. v. Hoffman Construction Co., 286 Or. 789, 805-06, 596 P.2d 1305, 1315 (1979), the plaintiff subcontractor recovered the reasonable value of the labor and materials it furnished. The court awarded prejudgment interest. On the other hand, in Unitec Corp. v. Beatty Safway Scaffold Co. of Oregon, 358 F.2d 470, 475 (9th Cir.1966), the court held that the value of services cannot be ascertained by computation or reference to well-known standards of value.
In Laro Lumber Co. v. Patrick, 52 Or.App. 1035, 1040-41, 630 P.2d 400, 403-04 (1979), a builder received prejudgment interest on an award that equaled the contract price less the reasonable cost to cure defects. However, in Cloud v. Riddell, 54 Or.App. 917, 923, 636 P.2d 996, 999 (1981), a builder won a quantum meruit recovery less the cost of curing defects but no prejudgment interest.
In Convoy Co. v. Sperry Rand Corp., 672 F.2d 781, 784-85 (9th Cir.1982), a purchaser's out-of-pocket expenses to cure defects in the seller's goods were readily ascertainable. But in Soderhamn Machine Manufacturing Co. v. Martin Bros. Container & Timber Products Corp., 415 F.2d 1058, 1064 (9th Cir.1969), the same court found that a purchaser's out-of-pocket expenses to bring goods up to contract specifications were "not easy" to ascertain though the purchaser supported each expenditure with an invoice.
North Pacific Construction Co. v. Wallowa County, 119 Or. 565, 572-73, 249 P. 1100, 1102-03 (1926) (per curiam), a contractor litigated the amount, type, and value of the excavating he had done. The court awarded prejudgment interest. However, in State ex rel. State Land Board v. Corvallis Sand & Gravel Co., 18 Or.App. 524, 556-57, 526 P.2d 469, 484-85 (1974), aff'd as modified, 272 Or. 545, 536 P.2d 517, 538 P.2d 70 (1975), vacated and remanded, 429 U.S. 363, 97 S.Ct. 582, 50 L.Ed.2d 550 (1977), remanded, 283 Or. 147, 582 P.2d 1352 (1978), the State recovered the reasonable value of the use of its land but the court declined to add prejudgment interest to the award because the amount, location, and value of the gravel removed from the land had been the subject of "active litigation."
Given the difficulty reconciling these differing results in seemingly indistinguishable cases, one could be left with the impression that the courts were sub silentio reevaluating jury verdicts, thereby adopting the analysis of California Superior Court Judge A.A. Scott, who, in denying a motion for prejudgment interest on a business interruption claim, stated:
I am very frank to tell you that I think the plaintiff got a very, very substantial judgment in this case based on the facts as I heard them; and now, to come in and ask for interest on something that was as uncertain as this seems to be pouring [it] on a little.
Esgro Central, Inc. v. General Insurance Co. of America, 20 Cal.App.3d 1054, 1060, 98 Cal. Rptr. 153, 157 (1971).
[8] The result in this case should not encourage insurance companies to stonewall business interruption claims. The prospect of an attorney's fee award alone may coerce insurance companies to pay meritorious claims. For instance, SDS's attorneys have petitioned for $90,000 in fees. Even if a fee award would not act as a Damoclean sword, prejudgment interest does not further a public policy so compelling that it requires Procrustean application.
Because the determination of a business interruption loss is an exercise in hypotheticals and necessarily requires the insurer and the insured to work together, perhaps society's (and this court's) resources would be better utilized by resort to the policy's arbitration provisions. Parties should be encouraged to anticipate situations such as these in their insurance contracts. For example, parties could insert a clause allowing for prejudgment interest in all contested cases. Alternatively, they could agree to an award of prejudgment interest on any amount awarded above the figure tendered by the insurance company in settlement.
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178 Cal.App.4th 1404 (2009)
DAWNA A. JOSEPH et al., Plaintiffs and Appellants,
v.
CAROLYN A. JOHNSON, Defendant and Respondent.
No. A123270.
Court of Appeals of California, First District, Division Three.
November 6, 2009.
*1407 Arnold I. Berschler for Plaintiffs and Appellants.
Buresh, Kaplan, Jang & Feller and Lawrence A. Baker for Defendant and Respondent.
OPINION
POLLAK, Acting P. J.
Plaintiffs Dawna A. Joseph and Nicole N. McGowan appeal from an order sustaining without leave to amend a demurrer to their third amended complaint for personal injury against defendant Carolyn A. Johnson. Plaintiffs contend that Johnson is liable for damages arising out of their sexual molestation by Johnson's husband, Albert Caesar, for which Caesar has been criminally convicted, but the trial court held that their claims against Johnson are now barred by the statute of limitations. We conclude that the court properly sustained the demurrer with regard to plaintiffs' second and fifth causes of action for negligence but erred in *1408 sustaining the demurrer to plaintiffs' third and sixth causes of action for intentional misconduct. Accordingly, we shall affirm in part but reverse the order with respect to the third and sixth causes of action.
Factual and Procedural Background
On June 28, 2006, plaintiffs filed a complaint against Johnson and Caesar for personal injury arising out of Caesar's sexual molestation of the plaintiffs when they were minors.[1] A first amended complaint was filed shortly thereafter and in December 2007, plaintiffs filed a second amended complaint. Johnson's demurrer to the second amended complaint was sustained on the ground that the action is barred by the statute of limitations. Plaintiffs were given leave to amend to allege facts showing that when Caesar committed the molestation he was acting as Johnson's agent, so that an exception in subdivision (b)(2) of the applicable statute of limitations, Code of Civil Procedure section 340.1, would apply, extending the time limitation period.[2]
Plaintiffs, who were over the age of 26 at the time the civil action was filed, allege in their third amended complaint as follows: In January 2006, Caesar was convicted of sexually abusing plaintiffs when they were minors. At all relevant times, Johnson was married to Caesar. Johnson knew that *1409 Caesar "had been convicted of one or more sex crimes arising from his sexually deviant propensities" and that he "was predisposed to sexually molest minors." When plaintiffs were minors, Johnson, who was related to plaintiffs,[3] would offer "to provide babysitting services for [plaintiffs] from time to time . . . . [¶] . . . The quid pro quo for the offers of babysitting service was to receive like service and other consideration from [plaintiffs'] mother." Johnson assumed a duty to provide plaintiffs "with an environment reasonably safe and secure for [their] health and well being" and she represented to plaintiffs' mother "that it was perfectly safe for [plaintiffs] to visit and be exposed to [Caesar]." Johnson "caused the subject babysitting. . . to occur at the residence of [Johnson and Caesar]" and "delegated to [Caesar] those babysitting duties" she had assumed. "[S]he knew and/or should have known [Caesar] was to be alone with [plaintiffs] while so babysitting. . . . [¶] . . . Johnson readily could have controlled [Caesar's] conduct with [plaintiffs] by not allowing him to be alone with [plaintiffs] while babysitting. [¶] Caesar sexually molested [plaintiffs] while he was alone with [them] during the course of providing baby sitting services in lieu of Ms. Johnson." Based on these allegations, plaintiffs allege that "Johnson negligently breached the aforesaid duties of care she owed [plaintiffs], increasing the risk of harm to [plaintiffs] on those occasions when [plaintiffs were] being baby sat by [Caesar]." Plaintiffs also allege that while they were minors "Johnson intentionally provided and/or made [them] available to [Caesar] for the purpose of lewd and/or lascivious conduct as defined in Penal Code section 288" and caused them "to engage in conduct proscribed by Penal Code section 288." Finally, plaintiffs allege that their "complaint was filed within three years of when [they] reasonably discovered psychological injury and/or illness caused by [the sexual abuse]."
Johnson's demurrer to the third amended complaint was sustained without leave to amend on the ground that plaintiffs' claims are barred by the statute of limitations. A judgment of dismissal was entered and plaintiffs filed a timely notice of appeal.
Discussion
Standard of Review
(1) Because this appeal arises from a judgment of dismissal following the sustaining of a demurrer without leave to amend, we give the complaint a reasonable interpretation, and treat the demurrer as admitting all material facts properly pleaded. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 543 *1410 [67 Cal.Rptr.3d 330, 169 P.3d 559].) "We apply well-established principles of statutory construction in seeking `to determine the Legislature's intent in enacting the statute "`so that we may adopt the construction that best effectuates the purpose of the law.'"'" (Shirk v. Vista Unified School Dist. (2007) 42 Cal.4th 201, 211 [64 Cal.Rptr.3d 210, 164 P.3d 630].) The statutory language is generally the most reliable indicator of legislative intent. However, if the statutory language may reasonably be given more than one interpretation, courts may consider various extrinsic aids, including the purpose of the statute, the evils to be remedied, the legislative history, public policy, and the statutory scheme encompassing the statute. (Ibid.)
Statute of Limitations
(2) Section 340.1, quoted in footnote 2, ante, sets forth the limitations period for an action seeking damages suffered as a result of childhood sexual abuse. In Aaronoff v. Martinez-Senftner (2006) 136 Cal.App.4th 910, 919 [39 Cal.Rptr.3d 137], the court summarized the core statutory provisions as follows: "Section 340.1 provides that an action for recovery of damages suffered as a result of childhood sexual abuse must be commenced within three years of discovering that injury occurred as the result of the abuse, or within eight years after the plaintiff attains the age of majority, whichever is later. (§ 340.1, subd. (a).) This limitations provision applies whether the defendant is the perpetrator of the abuse, or a third party whose liability stems from a negligent or intentional act which was the legal cause of the abuse that resulted in the injury. (§ 340.1, subd. (a)(1)-(3).) [¶] In the case of a third party defendant, the action must be commenced before the plaintiff's 26th birthday unless the third party defendant `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' in which case the action must be commenced within three years of discovering the injury was caused by the abuse. (§ 340.1, subd. (b)(2).)"
1. The Second and Fifth Causes of Action for Negligence
Plaintiffs' second and fifth causes of action for negligence allege that Johnson negligently breached a duty of care owed to plaintiffs, which she assumed by virtue of her agreement to babysit the plaintiffs, when she delegated her babysitting responsibilities to Caesar. Plaintiffs thus assert causes of action described in subdivision (a)(2) of section 340.1, "[a]n 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 *1411 plaintiff." An action against a third party governed by subdivision (a)(2) of section 340.1 must be commenced before the plaintiff's 26th birthday unless the exception found in subdivision (b)(2) of section 340.1 applies, in which case the action may be commenced within three years of discovering the injury was caused by the abuse.
(3) "Subdivision (b)(2) extends past a plaintiff's 26th birthday claims against a non-perpetrator defendant who is or was in a specified relationship with the perpetrator`employee, volunteer, representative, or agent'and who, `knew or had reason to know, or was otherwise on notice' of the perpetrator's `unlawful sexual conduct' and `failed to take' preventative measures to `avoid acts of unlawful sexual conduct in the future' by that perpetrator." (Doe v. City of Los Angeles, supra, 42 Cal.4th at p. 544.) In Aaronoff v. Martinez-Senftner, supra, 136 Cal.App.4th 910, the court held that the special relationship required by subdivision (b)(2) of section 340.1 does not include a parental relationship. The court explained, "The statute is targeted at third party defendants who, by virtue of certain specified relationships to the perpetrator (i.e., employee, volunteer, representative, or agent), could have employed safeguards to prevent the sexual assault. It requires the sexual conduct to have arisen through an exploitation of a relationship over which the third party has some control. In other words, the perpetrator's access to the victim must arise out of the perpetrator's employment with, representation of, agency to, etc., the third party, and the third party must be in such a relationship with the perpetrator as to have some control over the perpetrator. The child must be exposed to the perpetrator as an inherent part of the environment created by the relationship between the perpetrator and the third party . . . ." (Aaronoff, at p. 921.) Relying on the legislative history of the 2002 amendment to section 340.1, which "explained that the responsible third party entity to which the legislation is directed is an entity such as `an employer, sponsoring organization or religious organization'" (Aaronoff, at p. 922), the court concluded that "the statute applies to assaults that are related to the perpetrator's employment, or that are made more likely by the nature of the perpetrator's work and the fact of the perpetrator's continued employment" (id. at pp. 922-923).[4]
Here, plaintiffs do not allege that Caesar was Johnson's agent by virtue of their marital relationship. Instead, plaintiffs assert that the agency or volunteer *1412 relationship arose out of Johnson's delegation to Caesar of Johnson's babysitting responsibilities. The third amended complaint alleges that Johnson and plaintiffs' mother traded babysitting and other services; that Johnson delegated her babysitting responsibilities to Caesar; and that "Johnson readily could have controlled [Caesar's] conduct with [plaintiffs] by not allowing him to be alone with [plaintiffs] while babysitting." Plaintiffs reject the argument that their familial relationship to Johnson and the fact that no money was exchanged render subdivision (b)(2) of section 340.1 inapplicable. They note, "If Ms. Johnson had been a Girl Scout den mother or a casual baby-sitter for cash compensation, it seems that she would be within the bounds of section 340.1, subdivision (b)(2)."
It is not the familial relationships that defeat plaintiffs' claims. The negligence claims fail for lack of factual allegations demonstrating the requisite relationship between Johnson and Caesar that would provide Johnson with control over Caesar's conduct. Plaintiffs' only allegation with respect to control is that Johnson could have controlled Caesar's conduct "by not allowing him to be alone with [plaintiffs] while babysitting." But the fact that Johnson might not have permitted Caesar to be alone with the plaintiffs does not mean that she had the right to control his behavior. The amended complaint does not allege any relationship between Johnson and Caesar, such as an employer/employee or agency/volunteer relationship, that would give Johnson the right to control Caesar's conduct. The allegation that Johnson's delegation of babysitting responsibilities to Caesar was negligent brings plaintiffs' claims within subdivision (a)(2) of section 340.1. However, under subdivision (b)(1) of the statute, an action falling within subdivision (a)(2) may not be commenced after the plaintiff's 26th birthday unless the exception in subdivision (b)(2) applies. And, as just indicated, plaintiffs' negligence claims do not plead an agency or other relationship that comes within subdivision (b)(2). Plaintiffs' analogy to a den mother or professional babysitter is not persuasive. Both would fall outside the scope of subdivision (b)(2) absent allegations showing that they had the right to control the conduct of the person who assumed their duties. (See Aaronoff v. Martinez-Senftner, supra, 136 Cal.App.4th at pp. 921-922.)
Plaintiffs do not suggest that this deficiency could be cured by further amendment. Accordingly, the trial court did not err in sustaining the demurrer to plaintiffs' second and fifth causes of action without leave to amend.
2. The Third and Sixth Causes of Action for Intentional Tort
Plaintiffs contend that their third and sixth causes of action against Johnson assert claims "against [a] person for committing an act of childhood sexual abuse" under section 340.1, subdivision (a)(1), so that they are timely if they *1413 were brought within three years of discovery. The claim under subdivision (a)(1) is timely if brought within three years of discovery, regardless of the nature of the relationship between Johnson and Caesar. (§ 340.1, subd. (b)(1).) Johnson argues that plaintiffs' causes of action based on the allegation of intentional misconduct at most come within subdivision (a)(3) of section 340.1, which applies to claims based on intentional acts of a person other than the direct perpetrator of the sexual abuse, because subdivision (a)(1) "applies only to the person who committed the actual act of childhood sexual abuse, i.e. Caesar, not Johnson."
(4) Subdivision (a) of section 340.1 applies to claims against persons who have committed "an act of childhood sexual abuse." Subdivision (e) of section 340.1 defines "childhood sexual abuse" as including, inter alia, "any act committed against the plaintiff that occurred when the plaintiff was under the age of 18 years and that would have been proscribed by Section 266j of the Penal Code." Penal Code section 266j in turn provides, "Any person who intentionally gives, transports, provides, or makes available, or who offers to give, transport, provide, or make available to another person, a child under the age of 16 for the purpose of any lewd or lascivious act as defined in Section 288, or who causes, induces, or persuades a child under the age of 16 to engage in such an act with another person, is guilty of a felony . . . ." Hence, under the plain language of the statute, one who commits an act that would violate Penal Code section 266j commits childhood sexual abuse for purposes of subdivision (a)(1) of section 340.1. (Debbie Reynolds Prof. Rehearsal Studios v. Superior Court (1994) 25 Cal.App.4th 222, 231, fn. 4 [30 Cal.Rptr.2d 514].)
In Debbie Reynolds the court interpreted former section 340.1, which applied to a civil action seeking damages for "`any act committed by a defendant against a plaintiff . . . and which act would have been proscribed'" by specified Penal Code sections including section 266j.[5] (Debbie Reynolds Prof. Rehearsal Studios v. Superior Court, supra, 25 Cal.App.4th at p. 231.) The court held that the extended limitations period did not apply to a claim of negligent hiring, supervision or retention against the employer of a person *1414 who committed childhood sexual abuse. However, the court expressly distinguished between claims of intentional and negligent misconduct. "By its plain terms, section 340.1 applies an extended statute of limitations only to those defendants who perpetrate, against minors, certain intentional criminal acts prohibited by law." (Id. at p. 231.) The court also observed, "By including Penal Code section 266j as a prohibited act, it seems clear that section 340.1 defines an individual who intentionally makes a child available for sexual abuse as a perpetrator of child abuse and thus covered by the statute." (Id. at fn. 4.) Subdivision (a) of section 340.1 was amended in 1998 to include subparts (1) to (3). (Stats. 1998, ch. 1032, § 1.)[6] The amendment did not delete the incorporation of Penal Code section 266j in the definition of childhood sexual abuse as that term is used in subdivision (a)(1) of section 340.1. Nothing in the legislative history suggests that the Legislature meant to exclude from the category of perpetrators those whose conduct violates Penal Code section 266j.[7]
Plaintiffs' third and sixth causes of action allege that "Johnson intentionally provided and/or made [plaintiffs] available to [Caesar] for the purpose of lewd and/or lascivious conduct as defined in Penal Code section 288" and "caused [them] to engage in conduct proscribed by Penal Code section 288." Plaintiffs do not allege explicitly that Johnson violated Penal Code section 266j, but by alleging that she intentionally made plaintiffs available to Caesar for the purpose of engaging in conduct proscribed by Penal Code section 288, they do allege that she engaged in conduct that is proscribed by section 266j of the Penal Code. With whatever skepticism these allegations may be viewed, they must be treated as having been admitted for the purpose of ruling on the demurrer. (Doe v. City of Los Angeles, supra, 42 Cal.4th at p. 543.)[8] The allegations of the complaint, quoted above, allege conduct that would be a *1415 violation of Penal Code section 266j, and thus invoke the longer limitations period of three years from discovery contained in subdivision (a)(1) of section 340.1.
Dutra v. Eagleson (2006) 146 Cal.App.4th 216 [52 Cal.Rptr.3d 788], cited by Johnson, is not to the contrary. In that case the court concluded, consistent with our reading of the statute, that "only those actions against the actual perpetrator, or against a third party defendant described in subdivision (b)(2), could be brought after the plaintiff's 26th birthday . . . ." (Id. at p. 224, italics added.) The court there had no occasion to consider whether a person who allegedly violates Penal Code section 266j is a person who "commit[s] an act of childhood sexual abuse" within the meaning of subdivision (a)(1) of section 340.1. Nothing in the opinion suggests that such a person is not to be treated as an actual perpetrator under the statute.
(5) Interpreting subdivision (a)(1) of section 340.1 to include conduct by a third party that violates Penal Code section 266j does not render subdivision (a)(3) of section 340.1 superfluous, as Johnson contends. Subdivision (a)(3) governs "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." This provision applies to acts (such as kidnapping, for example) that are not necessarily committed for the purpose of enabling another person to engage in lewd or lascivious conduct, but that are nonetheless a proximate cause of sexual abuse by another. In contrast, a third person deemed a perpetrator of childhood sexual abuse under subdivision (a)(1) because of conduct violating Penal Code section 266j must either act for the purpose of enabling another to commit a lewd or lascivious act as defined in Penal Code section 288, or cause or induce a minor under the age of 16 to engage in such conduct. Thus, the nature of the intentional conduct that may render a person other than the direct perpetrator a person deemed to have committed childhood sexual abuse within the meaning of subdivision (a)(1) of section 340.1 because the conduct violates Penal Code section 266j, is not necessarily the same as intentional conduct that falls within the meaning of subdivision (a)(3) of section 340.1. The possibility that some conduct may fall within both subdivision (a)(1) and subdivision (a)(3) does not imply that the longer limitations period provided for claims against those whose conduct comes within subdivision (a)(1) should not apply.
(6) Because plaintiffs' third and sixth causes of action allege a claim under subdivision (a)(1) of section 340.1, and allege that the complaint was filed within three years of discovery of the injury and its causation, the court erred in sustaining the demurrer to these causes of action.
*1416 Disposition
The order sustaining Johnson's demurrer is reversed as to plaintiffs' third and sixth causes of action and affirmed in all other respects. The parties shall bear their respective costs of appeal.
Siggins, J., and Jenkins, J., concurred.
NOTES
[1] Due to her relationship with Caesar, Johnson was improperly named in the original complaint as Carolyn Caesar. Her name, however, was corrected in subsequent amendments. Albert Caesar, who is named as the sole defendant in the first and fourth causes of action, is not a party to this appeal.
[2] Code of Civil Procedure section 340.1, provides in relevant part: "(a) In an 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 period expires later, 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. [¶] (b)(1) No action described in paragraph (2) or (3) of subdivision (a) may be commenced on or after the plaintiff's 26th birthday. [¶] (2) This subdivision 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 placement of that person in a function or environment in which contact with children is an inherent part of that function or environment."
All statutory references are to the Code of Civil Procedure unless otherwise noted.
[3] Although not specifically alleged in the third amended complaint, it appears that Johnson and plaintiffs' mother are sisters, so that Johnson is plaintiffs' aunt.
[4] Plaintiffs suggest that the California Supreme Court's decision in Doe v. City of Los Angeles, supra, 42 Cal.4th 531 calls into question the appellate court's interpretation of section 340.1, subdivision (b)(2) in Aaronoff v. Martinez-Senftner, supra, 136 Cal.App.4th 910. To the contrary, the court in Doe expressly affirmed that "[t]he language of the provision expressly supports [the lower court's] characterization" and that "[t]he statute's enumeration of the necessary relationship between the nonperpetrator defendant and the perpetrator implies that the former was in a position to exercise some control over the latter." (Doe v. City of Los Angeles, supra, at pp. 543-544.)
[5] Former section 340.1 provided in relevant part: "(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. [¶] (b) `Childhood sexual abuse' as used in this section includes any act committed by the defendant against the plaintiff which act occurred when the plaintiff was under the age of 18 years and which act would have been proscribed by Section 266j of the Penal Code . . . ." (Stats. 1990, ch. 1578, § 1, p. 7550.)
[6] The amendment extended to eight years after the minor attains majority the statute of limitations for childhood sexual abuse claims against those who owe a duty of care to the minor and whose negligence was a contributing cause of the sexual abuse and against those whose intentional acts contribute to the sexual abuse. The further extension of the limitations period to three years from discovery does not apply to claims against such persons or entities unless they were on notice "of any unlawful sexual conduct by an employee, volunteer, representative, or agent" and failed to take reasonable steps to avoid the unlawful sexual conduct. The amendment clarified that an action against any person or entity other than a person deemed to be the perpetrator of the sexual abuse must be commenced before the plaintiff's 26th birthday. (Sen. Rules Com., Off. of Sen. Floor Analyses, Rep. on Assem. Bill No. 1651 (1997-1998 Reg. Sess.) as amended Aug. 19, 1998.)
[7] Indeed, a person convicted of a violation of Penal Code section 266j must register as a sex offender under Penal Code section 290, subdivision (c).
[8] Johnson did not demur on the ground that the amended complaint is uncertain (Code Civ. Proc., § 430.10, subd. (f)) and neither Johnson nor the trial court asserted that the allegation is deficient because conclusory. Had that been the basis of the court's ruling, leave to amend to provide further specificity would have been appropriate.
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678 F.Supp. 1323 (1987)
Loran W. ROBBINS, et al., Plaintiffs,
v.
LADY BALTIMORE FOODS, INC., Defendant.
No. 85 C 9262.
United States District Court, N.D. Illinois, E.D.
October 14, 1987.
*1324 Terence G. Craig, Francis J. Carey, Thomas J. Angell, Central States Law Dept., Chicago, Ill., for plaintiffs.
James G. Baker, David L. Wing, Spencer, Fane, Britt & Browne, Kansas City, Mo., James C. Murray, Jr., Katten, Muchin, Zavis, Pearl & Galler, Chicago, Ill., for defendant.
MEMORANDUM OPINION AND ORDER
DECKER, District Judge.
Plaintiffs, trustees of the Central States, Southeast and Southwest Areas Pension Fund ("the Fund"), commenced this action pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. As amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), ERISA provides in part that upon withdrawal from a multiemployer pension plan, an employer shall owe the plan a certain "withdrawal liability." 29 U.S.C. §§ 1381-1405. The Fund brought the instant suit against defendant employer Lady Baltimore Foods, Inc. ("Lady Baltimore") to compel interim withdrawal liability payments, pursuant to 29 U.S.C. §§ 1399(c)(2) and 1401(d), pending final determination of Lady Baltimore's total withdrawal liability. Jurisdiction is founded upon 29 U.S.C. §§ 1132(e), 1132(f), and 1451(c). The Fund now moves for summary judgment. Lady Baltimore makes a cross motion for summary judgment on the grounds that it is expressly exempted from withdrawal liability by statute.
I. Statutory Framework
Before exploring the facts of the instant case, we must survey but one small chamber of ERISA's architecture. As noted, when an employer leaves a multiemployer plan, the employer owes the plan a withdrawal liability. 29 U.S.C. § 1381. This withdrawal liability serves to cover the employees' share of the vested, but unfunded, benefits. Robbins v. B and B Lines, Inc., 830 F.2d 648, 649 (7th Cir.1987). Although the pension plan makes the initial assessment of withdrawal liability, 29 U.S.C. § 1382,
Any dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of this title shall be resolved through arbitration.
29 U.S.C. § 1401(a). The arbitrator's award is subject to judicial review. 29 U.S.C. § 1401(b)(2).
*1325 Despite such ample opportunity to contest assessed withdrawal liability, Congress clearly envisioned a "`pay now, dispute later' collection procedure." Robbins v. Pepsi-Cola Metropolitan Bottling Co., 800 F.2d 641, 642 (7th Cir.1986) (per curiam). 29 U.S.C. § 1399(c)(2) provides:
Withdrawal liability shall be payable in accordance with the schedule set forth by the plan sponsor under subsection (b)(1) of this section beginning no later than 60 days after the date of the demand notwithstanding any request for review or appeal of determinations of the amount of such liability or of the schedule.
29 U.S.C. § 1401(d) also elaborates the mandatory nature of "interim" payments:
Payments shall be made by an employer in accordance with the determinations made under this part until the arbitrator issues a final decision with respect to the determination submitted for arbitration, with any necessary adjustments in subsequent payments for overpayments or underpayments arising out of the decision of the arbitrator with respect to the determination. If the employer fails to make timely payment in accordance with such final decision, the employer shall be treated as being delinquent in the making of a contribution required under the plan (within the meaning of section 1145 of this title).
The withdrawal liability provisions of the MPPAA have been upheld as constitutional. Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 106 S.Ct. 1018, 89 L.Ed.2d 166 (1986); Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 104 S.Ct. 2709, 81 L.Ed.2d 601 (1984); Peick v. Pension Benefit Guaranty Corp., 724 F.2d 1247 (7th Cir.1983), cert. denied, 467 U.S. 1259, 104 S.Ct. 3554, 82 L.Ed.2d 855 (1984).
II. Factual Background and Procedural Posture
Lady Baltimore, a Kansas corporation, entered into a collective bargaining agreement that became effective on January 12, 1979, and which remained in effect through May 15, 1982. Under Article XVIII, Section 7,
Effective January 12, 1982 all contributions to the Central States, Southeast and Southwest Areas Pension Fund shall cease, Sections 1, 2, 3, 4, 5 and 6 of this Article shall be null and void and of no further force and effect and all obligations of the Company to said Fund or under any trust agreement shall be terminated.
Agreement, Lady Baltimore's Suggestions in Support of its Motion for Summary Judgment and in Opposition to the Fund's Motion for Summary Judgment, Exhibit 1.[1]
On or about December 27, 1983, the Fund sent Lady Baltimore a notice and demand for payment of withdrawal liability in the amount of $216,488.80. This document notified Lady Baltimore that it was required to discharge its liabilities in monthly payments of $4,967.25, the first such payment to be made on February 1, 1984. Subsequently, the Pension Fund voluntarily reduced the assessment of Lady Baltimore to $212,797.92, and changed the monthly rate of demanded payment to $5,001.06. The Fund and Lady Baltimore are presently engaged in § 1401(a) mandatory arbitration over the assessed withdrawal liability.
On November 1, 1985, the Fund filed the instant suit to force Lady Baltimore to make interim payments of its assessed withdrawal liability pending the outcome of arbitration. On August 26, 1986, the Court ordered Lady Baltimore to begin making its assessed monthly payments as they became due. Therefore, the Fund's motion *1326 for summary judgment effectively prays for such interim payments to continue, and to collect unpaid, pre-August, 1986 interim payments. The Fund also seeks interest on these past due payments plus attorney's fees, costs, and an additional amount equal to the greater of (1) the interest on the unpaid contributions, or (2) liquidated damages not in excess of 20% of the unpaid contributions. See 29 U.S.C. § 1132(g)(2). Lady Baltimore, in its cross motion for summary judgment, seeks relief from the Court's August 26, 1986 order for it to make interim payments, and Lady Baltimore also requests that payments it has made pursuant to the order be returned to it with interest.
III. Discussion
Summary judgment is appropriate if the parties' submissions demonstrate that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The moving party will be entitled to judgment as a matter of law if the non-moving party fails to make a sufficient showing on an essential element of his case with respect to which he has the burden of proof. Celotex v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).
To support its motion for summary judgment the Fund relies on the above-quoted language of 29 U.S.C. §§ 1399(c)(2) and 1401(d). The Fund argues simply that Lady Baltimore's undisputed withdrawal automatically triggered its duty to make interim payments, pending the outcome of arbitration. Lady Baltimore counters with a number of equitable defenses to the Fund's motion, as well as a specific statutory defense which also forms the basis of its own motion. The Court will consider first Lady Baltimore's equitable defenses.
A. Equitable Defenses
To avoid interim payments, Lady Baltimore raises a number of equitable defenses to withdrawal liability in general. First, Lady Baltimore maintains that the collective bargaining agreement expressly precludes any withdrawal liability in its provision that "all obligations of the Company to said fund" would terminate effective January 12, 1982. Furthermore, Lady Baltimore argues that, since the Fund first objected to and then acquiesced in this language, it is estopped from denying the validity of the liability limitation. Third, Lady Baltimore suggests that the Fund is also estopped from asserting withdrawal liability because it cashed a check, as Lady Baltimore's last pre-withdrawal payment in 1982, restrictively endorsed to preclude any further liability of Lady Baltimore. Fourth, Lady Baltimore maintains that it has already paid to the Fund more than enough money to cover the vested benefits of its employees. Finally, Lady Baltimore argues that the Fund has delayed unduly in asserting its claims, and interim payments should be denied on the basis of laches.
The Fund steadfastly maintains that all of these arguments are immaterial to its demand of interim payments, and go only to the issue of withdrawal liability per se, which is currently being arbitrated. Indeed, 29 U.S.C. §§ 1399(c)(2) and 1401(d) expressly provide for interim payments pending arbitration, and § 1401(a) makes it clear that all disputes over the assessed withdrawal liability must be arbitrated. Lady Baltimore counters that, as its equitable defenses to withdrawal liability present no factual ambiguities, arbitration is unnecessary, and the Court can deny the Fund interim payments as a matter of law.
In making such an assertion Lady Baltimore misconstrues the statutory requirements of the MPPAA. Establishing that a withdrawal liability dispute raises only questions of law will not suffice to remove a case from mandatory arbitration. I.A.M. National Pension Fund v. Clinton Engines Corp., 825 F.2d 415, 422 (D.C.Cir. 1987). Congress was concerned that if employers could use litigation to delay making withdrawal liability payments, the fiscal health of entire pension funds could be severely jeopardized. Robbins v. Chipman Trucking, Inc., No. 85 C 1489 slip op. at 13-14 (N.D.Ill. Dec. 8, 1986) [Available on WESTLAW, 1986 WL 14122]. But this *1327 is not to say a court has no discretion in ordering interim payments. See Robbins v. McNicholas Transportation Co., 819 F.2d 682 (7th Cir.1987). In McNicholas Transportation, the pension fund found a withdrawal probably erroneously where the employer stopped making contributions after being shut down by a strike. The district court had ordered payment of interim withdrawal liability, pending arbitration, reading the statute as giving it no discretion to refuse to issue such an order. The employer contended that since its assessed monthly liability was $71,000, and its current annual income (non-operating) was less than $100,000, the district court's order would make its resumption of operations economically impossible. The Court of Appeals vacated and remanded, concluding that
... where the trustees bring an action to compel payment, pending arbitration, the court should consider the probability of the employer's success in defeating liability before the arbitrator and the impact of the demanded interim payments on the employer and his business.
Id. at 685.
But although the Seventh Circuit allows an examination of a case's merits, as well as employer hardship, a substantial allegation of employer hardship remains a threshold prerequisite to the court's exercise of discretion. In McNicholas Transportation itself, the district court's order of interim payments was effectively moot because it would have instantly bankrupted the employer. In ordering the district court to exercise discretion on remand, the court deferred to the reasoning of the Pension Benefit Guaranty Corporation, which is statutorily charged to enforce Title IV of ERISA. 29 U.S.C. § 1303(e)(1). The Seventh Circuit quoted a passage from the corporation's brief in another case, part of which read:
"Ordinarily, in the absence of a demonstration that making interim payments would inflict irreparable injury on an employer, a court should enforce the interim payments requirement without examining the merits of the underlying dispute concerning withdrawal liability."
819 F.2d at 686. Delaying interim payments, pending arbitration, whenever an employer asserts meritorious defenses to withdrawal liability would directly frustrate Congressional intent that pension funds be secure first, and that such meritorious defenses be arbitrated later. Id. at 685.
In the case at bar, Lady Baltimore asserts no particular economic hardship from making interim payments. The Seventh Circuit leaves no doubt that "compelled payment of money, recoverable with interest upon later determination of error, is not, in itself, irreparable harm." Id. Therefore, since Lady Baltimore cannot allege irreparable harm from making interim payments, the court may not reach its equitable defenses to interim withdrawal liability.
B. Statutory Defense
The big gun in Lady Baltimore's arsenal of arguments against interim withdrawal liability, which it fires at the expense of all other arguments in its own motion for summary judgment, is that it has been statutorily exempted in an amendment to the MPPAA drafted specifically for it from paying any withdrawal liability to the Fund. Passed as part of the massive Tax Reform Act of 1986, Pub.L. No. 99-514, § 1852(i), 100 Stat. 2869 (1986), 29 U.S.C. § 1461(h)(1) states as follows:
In the case of an employer who entered into a collective bargaining agreement
(A) which was effective on January 12, 1979, and which remained in effect through May 15, 1982, and
(B) under which contributions to a multiemployer plan were to cease on January 12, 1982,
any withdrawal liability incurred by the employer pursuant to part 1 of subtitle E of this subchapter as a result of the complete or partial withdrawal of the employer from the multiemployer plan before January 12, 1982, shall be void.
*1328 The Fund argues that this statutory provision is unconstitutional, but first argues that the court cannot construe the statute's effect on interim liability, it being just another asserted defense for arbitration.
1. Reaching § 1461(h)(1)
The Fund seeks to delay consideration of this statute's effect, characterizing it as simply one more issue for the arbitration table. But the Fund's contention that the court must allow the arbitrator to first construe § 1461(h)(1) ignores the precise wording of the provision. § 1461(h)(1) would void "any withdrawal liability incurred by the employer pursuant to part 1 of subtitle E...." Part 1 of subtitle E includes 29 U.S.C. § 1401(a), which provides for arbitration of withdrawal liability disputes. § 1461(h)(1) would thus void any finding of liability by the arbitrator per se. Therefore, the question of § 1461(h)(1)'s validity is a legal threshold to arbitration. The court is presently concerned only with interim withdrawal liability. But if § 1461(h)(1) would nullify all withdrawal liability, even that found ultimately by an arbitrator, it would block interim liability as well. Therefore, the court must decide the provision's validity. Compare Shelter Framing Corp. v. Pension Benefit Guaranty Corp., 705 F.2d 1502, 1508-1509 (9th Cir.1983), rev'd on other grounds sub nom. Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 104 S.Ct. 2709, 81 L.Ed.2d 601 (1984) (in dispute over withdrawal liability, district court did not have to leave for arbitration question of MPPAA's constitutionality).
2. Constitutionality of § 1461(h)(1)
On the merits, the Fund's principal argument with respect to § 1461(h)(1) is that it violates substantive due process on its face. The Fifth Amendment provides in part that "No person shall ... be deprived of life, liberty, or property, without due process of law...." U.S. Const. amend. V. It is axiomatic that "one person's property may not be taken for the benefit of another private person without a justifying public purpose...." Thompson v. Consolidated Gas Utilities Corp., 300 U.S. 55, 80, 57 S.Ct. 364, 376, 81 L.Ed. 510 (1937). Due process forbids a law that is wholly arbitrary and irrational. See, e.g., Cleveland Board of Education v. LaFleur, 414 U.S. 632, 650, 94 S.Ct. 791, 801, 39 L.Ed.2d 52 (1974). Furthermore,
In cases where the legislation in question has retroactive effect, special care must be taken in applying the "arbitrary and irrational" test to determine if there was indeed justification for the added burden which retroactive legislation imposes on those it regulates.
Peick v. Pension Benefit Guaranty Corp., 724 F.2d 1247, 1266 (7th Cir.1983), cert. denied, 467 U.S. 1259, 104 S.Ct. 3554, 82 L.Ed.2d 855 (1984).
The legislative history of the Tax Reform Act of 1986 provides no clue to the justification for 29 U.S.C. § 1461(h)(1). See, e.g., H.R.Conf.Rep. No. 841, 99th Cong., 2d Sess. 1, reprinted in 1986 Code Cong. & Admin.News 4075. However, Lady Baltimore's various briefs suggest why no such justification is forthcoming. Facing the instant lawsuit, Lady Baltimore petitioned its Congressional representatives to relieve it retroactively from its specific liability to the Fund. As a result, Kansas Senator Robert Dole offered what is now ERISA § 4402(h)(1), 29 U.S.C. § 1461(h)(1), as an Amendment to the Tax Reform Act of 1986. The provision tracks precisely terms of Lady Baltimore's collective bargaining agreement "to eliminate Lady Baltimore's withdrawal liability to the Fund." Lady Baltimore's Motion for Immediate Relief from the Court's Order of August 26, 1986 and for Summary Judgment at 2. Indeed, Lady Baltimore is quite candid that "[t]he sole purpose of this provision ... was to eliminate Lady Baltimore's withdrawal liability to the Fund." Lady Baltimore's Suggestions in Support of its Motion for Summary Judgment and in Opposition to the Fund's Motion for Summary Judgment at 2 (emphasis added).
With no purpose for altering the liability of one private entity to another other than to do just that 29 U.S.C. § 1461(h)(1) is wholly arbitrary and irrational. This would be true even if it had no retroactive effect; thus, the fact that § 1461(h)(1) *1329 works retroactively makes it all the more pernicious. Lady Baltimore maintains that § 1461(h)(1) was merely intended to "clarify" ERISA's withdrawal liability provisions. Lady Baltimore's Suggestions in Opposition to the Fund's Motion for Summary Judgment at 9. Lady Baltimore argues that since Congress created withdrawal liability, it is empowered to alter such liability as it sees fit. Defendant's Reply Suggestions in Support of its Motion for Summary Judgment at 5. Lady Baltimore's perception of the legislative process is somewhat Orwellian. Although Congress is certainly entitled to tinker with its legislative schemes, and even to do so retroactively at times, as in the enactment of the MPPAA, Congress cannot redistribute property among private parties solely for the benefit of one of those parties. 29 U.S.C. § 1461(h)(1) embodies a blatant violation of substantive due process.
But perhaps even more insidiously, the enactment of § 1461(h)(1) violated procedural due process as well. It is difficult to distinguish precisely "legislative" action, which promulgates rules for society, from "judicial" action, which applies these rules to disputes between particular parties. But informing this distinction is the right of affected persons to be heard, which we demand in judicial fora and limit with respect to legislatures. See e.g., Bi-Metallic Investment Co. v. State Board of Equalization, 239 U.S. 441, 36 S.Ct. 141, 60 L.Ed. 372 (1915); Londoner v. Denver, 210 U.S. 373, 28 S.Ct. 708, 52 L.Ed. 1103 (1908). Indeed,
"the case for due process protection grows stronger as the identity of the persons affected by a government choice becomes clearer; and the case becomes stronger still as the precise nature of the effect on each individual comes more determinately within the decisionmaker's purview. For when government acts in a way that singles out identifiable individuals in a way that is likely to be premised on suppositions about specific persons it activates the special concern about being personally talked to about the decision rather than simply being dealt with."
O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 801, 100 S.Ct. 2467, 2483, 65 L.Ed.2d 506 (1980) (Blackmun, J., concurring) (quoting L. Tribe, American Constitutional Law, § 10-7, pp. 503-504 (1978) (emphasis in original)).
In the case at bar, the dispute between an employer and a pension fund, as to the former's liability to the latter under certain provisions of the MPPAA, a fortiori calls for a judicial forum in which both parties may be heard. The employer brazenly admits its efforts to evade such a forum:
Lady Baltimore has provided the Congress, through Senator Dole, basically the same factual information provided this Court in this case concerning why the withdrawal liability provisions of ERISA would produce unduly harsh results if applied to Lady Baltimore. Congress determined that this is not a factual situation in which it intended withdrawal liability to be assessed and has enacted the transition rule at issue here to eliminate the possibility of such liability.
Defendant's Reply Suggestions in Support of its Motion for Summary Judgment at 6-7. It is for the courts, and not Congress, to apply the law to a particular "factual situation." In such an application, the parties to the given "factual situation" have a right to be heard. The Fund was denied this right when Congress "adjudicated" Lady Baltimore's liability to it. Therefore, 29 U.S.C. § 1461(h)(1) violates procedural due process.
29 U.S.C. § 1461(h)(1) is unconstitutional, and therefore invalid, on the alternate grounds that it violates substantive due process and procedural due process.[2]
*1330 3. Severability of § 1461(h)(1)
Having found § 1461(h)(1) unconstitutional, it is necessary to determine the extent, if any, to which it taints the rest of ERISA's statutory framework. The Supreme Court has warned that when striking down a provision "a court should refrain from invalidating more of the statute than is necessary." Regan v. Time, Inc., 468 U.S. 641, 652, 104 S.Ct. 3262, 3269, 82 L.Ed.2d 487 (1984). Buckley v. Valeo, 424 U.S. 1, 108-109, 96 S.Ct. 612, 677-78, 46 L.Ed.2d 599 (1976) elaborated the test for what is "necessary":
Unless it is evident that the legislature would not have enacted those provisions which are within its power, independently of that which is not, the invalid part may be dropped if what is left is fully operative as a law.
There can hardly be doubt that Congress originally intended to enact ERISA without § 1461(h)(1), and that ERISA will be "fully operative" without it. § 1461(h)(1) does not represent any legitimate component of a legislative scheme, but rather the litigation tactic of a single, private entity. § 1461(h)(1) can be severed from ERISA without fear.
C. Details of Judgment
As Lady Baltimore's equitable defenses to withdrawal liability are a matter for arbitration, and Lady Baltimore's statutory exemption is unconstitutional, the Fund is entitled to summary judgment. Therefore, the monthly interim payments that the court has ordered to be paid since August, 1986 must continue pending the outcome of arbitration. In addition, the Fund is entitled to payments due during the period of February, 1984 through July, 1986, and appropriate interest on those payments. See Robbins v. McNicholas Transportation Co., 819 F.2d 682, 686 (7th Cir.1987).
The Fund has also requested liquidated damages, costs, and attorney's fees pursuant to 29 U.S.C. § 1132(g)(2). Since neither party, in its plethora of briefs, bothered to address this provision, the court will make no determination at this time.
IV. Conclusion
ERISA § 4402(h)(1), 29 U.S.C. § 1461(h)(1), is hereby declared null and void. The Fund's motion for summary judgment is hereby granted. Accordingly, Lady Baltimore's motion for summary judgment is denied. Interim withdrawal liability payments, ordered by this court in August, 1986 to be paid monthly, shall continue pending the final arbitration of Lady Baltimore's total withdrawal liability. In addition, Lady Baltimore is hereby ordered to pay the Fund its interim withdrawal liability for the period of February, 1984 through July, 1986, plus appropriate interest on that amount. Within ten days the Fund shall submit to this court a statement of the past-due interim withdrawal liability plus interest.
NOTES
[1] The Fund maintains that Lady Baltimore did not actually withdraw until January 16 because January 12, 1982 fell on a Tuesday, and Article XVIII, Section 2 of the Agreement provided in part that the company was to make contributions for the entire week (i.e., through Saturday) in which a given employee worked. Thus, contends the Fund, a genuine issue of material fact exists as to precisely when Lady Baltimore withdrew. However, under Section 7 of the same Article, the provisions of Section 2 were null and void effective January 12, 1982. Therefore, no genuine issue of material fact exists as to when Lady Baltimore withdrew: by January 12, 1982.
[2] Lady Baltimore suggests rather half-heartedly that the court cannot strike down this provision without giving the United States a chance to intervene. Under 28 U.S.C. § 2403(a), the court must certify to the Attorney General any constitutional attack on a statute "affecting the public interest." If this phrase is to have any meaning, it cannot apply to a provision enacted solely to satisfy parochial desires. Compare Cox v. Schweiker, 684 F.2d 310, 319 (5th Cir.1982) (statute is not one "affecting the public interest" if it is no longer on the books and thus can only affect parties to instant case); Keyes v. Madsen, 179 F.2d 40, 43 (D.C.Cir.1949), cert. denied, 339 U.S. 928, 70 S.Ct. 628, 94 L.Ed.2d 1349 (1950) (matter of merely local concern does not trigger § 2403(a)). Therefore, § 2403 does not apply to the case at bar.
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COURT OF APPEALS OF VIRGINIA
Present: Judges Bray, Annunziata and Overton
ZINAIDA R. SOYFER
v. Record No. 1879-95-2 MEMORANDUM OPINION *
PER CURIAM
ST. MARY'S HOSPITAL JANUARY 23, 1996
AND
PENNSYLVANIA MANUFACTURER'S ASSOCIATION
INSURANCE COMPANY
FROM THE VIRGINIA WORKERS'
COMPENSATION COMMISSION
(David C. Jackson, on brief), for appellant.
(Jennifer G. Marwitz; Sands, Anderson, Marks & Miller,
on brief), for appellees.
Zinaida R. Soyfer ("claimant") contends that the Workers'
Compensation Commission erred in finding that she failed to prove
a causal connection between her current condition (consisting of
reflex sympathetic dystrophy ("RSD") of the right upper
extremity, chronic right shoulder pain, and chronic right hand
pain) and her compensable September 28, 1993 injury by accident.
Claimant also argues that the commission erred by not addressing
the issues of whether Dr. I. M. Averbuch's treatment constituted
emergency treatment and whether the failure of St. Mary's
Hospital ("employer") to provide claimant a panel of physicians
justified her seeking treatment from Dr. Averbuch. Upon
reviewing the record and the briefs of the parties, we conclude
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
that this appeal is without merit. Accordingly, we summarily
affirm the commission's decision. Rule 5A:27.
On appeal, we view the evidence in the light most favorable
to the prevailing party below. R.G. Moore Bldg. Corp. v.
Mullins, 10 Va. App. 211, 212, 390 S.E.2d 788, 788 (1990).
Unless we can say as a matter of law that claimant's evidence
sustained her burden of proving causation, the commission's
findings are binding and conclusive on appeal. Tomko v.
Michael's Plastering Co., 210 Va. 697, 699, 173 S.E.2d 833, 835
(1970).
The commission held that claimant's evidence did not show
that her September 28, 1993 compensable right shoulder injury
caused her RSD and disability, if any, beginning September 14,
1994. In so ruling, the commission found that Dr. Averbuch, who
first diagnosed claimant as suffering from RSD in September 1994,
did not opine whether this condition was caused by claimant's
compensable right shoulder injury or her non-compensable right
1
carpal tunnel syndrome. This finding is supported by the
medical records and will not be disturbed on appeal.
Moreover, Dr. Whipple's medical records do not provide any
evidence of a causal connection between claimant's current
condition and her compensable right shoulder injury. On March
1
On February 3, 1994, Dr. Terry Whipple, claimant's initial
treating physician, opined that he could not relate her right
hand symptoms to her compensable right shoulder injury or the
repetitive tasks she performed at work. No evidence contradicted
this opinion.
2
24, 1994, Dr. Whipple noted that claimant suffered from "right
upper extremity pain, unknown etiology." He also noted that the
report of Hand Management Specialists showed no evidence of
reflex sympathetic dystrophy. On May 31, 1994, Dr. Whipple noted
that claimant's shoulder was no longer uncomfortable and he
released her to return to work, without restrictions, as of
June 1, 1994.
Based upon this record, we cannot say as a matter of law
that claimant met her burden of proving that her current
condition and resulting disability, if any, are related to her
compensable right shoulder injury. Because our ruling on the
causation issue disposes of this appeal, we need not address the
remaining two questions presented by claimant.
For the reasons stated, we affirm the commission's decision.
Affirmed.
3
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People v Carsey (2017 NY Slip Op 00080)
People v Carsey
2017 NY Slip Op 00080
Decided on January 5, 2017
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on January 5, 2017
Friedman, J.P., Acosta, Mazzarelli, Andrias, Moskowitz, JJ.
2649 2998/10
[*1]The People of the State of New York, Respondent,
vMichael Carsey, Defendant-Appellant.
Mischel & Horn, P.C., New York (Richard E. Mischel of counsel), for appellant.
Cyrus R. Vance, Jr., District Attorney, New York (Malancha Chanda of counsel), for respondent.
Judgment, New York County (Juan M. Merchan, J.), rendered May 17, 2012, convicting defendant, after a jury trial, of perjury in the first degree and offering a false instrument for filing in the first degree, and sentencing him to a conditional discharge for a period of three years, unanimously affirmed.
The verdict was not against the weight of the evidence (see People v Danielson, 9 NY3d 342, 348—349 [2007]). There is no basis for disturbing the jury's credibility determinations. The falsity of defendant's statements was amply corroborated, notwithstanding any minor inconsistencies in the testimony of the People's witnesses.
The court providently exercised its discretion in imposing reasonable limits on cross-examination (see People v Corby, 6 NY3d 231, 234-235 [2005]) that did not violate defendant's constitutional rights (see Crane v Kentucky, 476 US 683, 689-690 [1986]; Delaware v Van Arsdall, 475 US 673, 678-679 [1986]). In one of the instances at issue, the court providently precluded elicitation of a purported inconsistency that lacked any probative value and was potentially confusing to the jury. In the other instance, the court providently excluded hearsay testimony because, although not offered for its truth, its relevance essentially depended on its being true.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: JANUARY 5, 2017
CLERK
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76 Wn.2d 428 (1969)
457 P.2d 199
HOMER R. HOUSE et al., Respondents,
v.
RAY THORNTON et al., Appellants.[*]
No. 40197.
The Supreme Court of Washington, Department Two.
July 17, 1969.
John L. Vogel, for appellants.
Clinton, Moats, Andersen & Fleck and Gordon S. Clinton, for respondents.
HALE, J.
Fraud is so easy to claim that the law makes it hard to prove. When the basement, walls, floors and foundation of a house plaintiffs had brought from defendants slipped and cracked and the supporting terrain slid away from the foundation, plaintiffs brought this suit to rescind the sale. Plaintiffs Homer and Noreen House charged the sellers with overt false misrepresentations and deceit but the court granted the rescission although expressly finding that these allegations were not clearly, cogently and convincingly *429 proved. Defendant sellers appeal, and we perceive the major issue to be whether, in the sale of a brand-new house to its first buyer and occupant, the law impresses the transaction with a warranty that the foundation is firm and secure.
Defendant Headley, a real-estate broker, in 1961, bought lots 7, 8 and 9 in block 3, on 57th Avenue Northeast in Seattle. He built and sold a house on lot 7, kept lot 8, and arranged with his building contractor, defendant Ray Thornton, to build and sell a house on lot 9 to a young doctor who subsequently withdrew from the deal. Before buying the lots, Headley had discovered on lot 9 the foundation of a house that had once been there. The vendor told him that the house had been removed from the lot because septic tanks on adjacent higher ground had drained onto it, and the drainage from them had impaired the stability of the earth there. The owner also told him that the removed house and the remaining foundation had been improperly constructed and the lot improperly drained, but that the lot had never been filled and that the area had never been considered a slide area.
Headley checked with the city engineer's office, found that the land on lot 9, although on a fairly steep slope, was considered to be stabilized; that there had been no contrary indication for 15 years; and that the septic tanks once thought to have been the source of the slides were now disconnected and a city sewer installed in their stead. According to Headley's builder, Thornton, the old foundation had been an amateurish job of construction with improper and inadequate use of steel and badly poured concrete, and was altogether unsuitable for hillside construction. Discovery of the foundation thus did not amount to warning or indication that the lot and subsoil would prove to be unstable for a new foundation properly designed and built.
Defendant Headley and his contracting builder entered into a copartnership and agreement to construct a residence on lot 9 for a young doctor who agreed to purchase it. After construction had been well under way, the prospective purchaser withdrew from the transaction on the basis that his *430 immediate future income potential did not warrant so great an investment. Nevertheless, the defendants proceeded with their plans to finish the residence and to advertise it for sale.
Homer and Noreen House, plaintiffs, first saw the house in August, 1964. At the time, it was virtually complete and the upstairs was ready for occupancy but some partitions and plasterboard had yet to be installed in the basement. Landscaping was largely uncompleted. Plaintiffs noticed ruts and crevices in the rockery and ditches in the backyard apparently caused by erosion. A few weeks later, in September, 1964, they bought the house and lot 9 plus an adjoining 10 feet on lot 10 for $32,583.38, making a down payment of $12,583.38 and financing the $20,000 balance through a mortgage with the University Federal Savings and Loan Association.
About 3 months later, in December, 1964, following a period of heavy rains, the Houses observed a three-eighths inch crack open up in the earth outside of but running the length of and parallel to the east wall of the house and on into the adjacent lot. Water accumulated in the yard, and Mr. House, on the advice of Mr. Thornton, the builder, dug a trench to drain it. In digging this trench, Mr. House first discovered the existence of the old foundation.
During the following winter, 1965, another crack in the yard opened up and Mr. House dug another trench to drain the water away from it and found that the earth beneath it settled for about 3 inches near the north end of the house. Then the steps and basement wall separated, and the seam between the chimney and house opened so that daylight showed through it into the living room. Earth supporting the end of the concrete patio dropped 4 to 6 inches and the walkway to the patio separated 4 to 5 inches for a distance of 20 feet. Mr. Thornton brought in a machine, cracked up and removed the patio, and discovered that the east wall of the basement had bulged. A crack developed in the basement floor running up into a section of the concrete basement wall. The floor of the basement dropped about 6 inches and another crack opened up in the basement wall.
*431 Nearly all of the doors in the house settled and had to be planed but finally the shifting of the house made the planing futile. Cracks developed in the plasterboard of the kitchen, hallway, stairwell and bedroom. Thornton, the builder, treated the yard soil and rockery with plastic sheeting to reduce moisture content of the subsoil, separated the drain tile from the downspouts, and connected fire hose to lead the water away from the basement.
But the crack in the yard running parallel to the east side of the house widened to 4 to 6 inches and deepened to nearly 3 feet in places. Cracks in the basement walls continued to widen and deepen, and at one place near a basement window a wide, jagged, open crack appeared which would leave doubts that the house was safe for occupancy. Pictures of the place showed long, jagged cracks in the yard, and the earth sluffing away from under the foundation. Cracks appeared in the concrete basement walls which formed part of the foundation. There was little doubt among the parties that, after 23 months of occupancy and continuous efforts to remedy the slipping and cracking, the house was untenable and unfit for further occupancy as a dwelling.
Plaintiffs brought this suit for rescission. The trial court granted a decree rescinding the sale on tender of a deed by plaintiffs to the defendants, awarded plaintiffs judgment in the sum of $11,685.69, and ordered the defendants to hold plaintiffs harmless from any further liability on the mortgage. In allowing plaintiffs rescission and arriving at damages of $11,685.69 for moneys paid in and expended by them, the court deducted from their award a reasonable rental for their occupancy fixed at $200 per month for 39 months, or a total reduction in the judgment of $7,800.
Plaintiffs, as earlier stated, brought this suit for rescission on the basis of deceit and misrepresentation concerning the stability of the house, lot and surrounding terrain. They testified that the appearance of the lot and slope on which the house rested and the appearance of the higher surrounding terrain and that of the rockery and patio prompted them to make inquiries of the defendant sellers *432 before completing the purchase as to the security of the lot. They said the defendants assured them that there would be no problems as to the hill on which the house stood, that sewers had been installed to replace the old septic tanks in the area, and that, if there had been any problems of slides, the trees in the vicinity would have shown it. Defendants, they said, pointed to some standing trees and piling, all completely erect, which they said would have been leaning had there been slippage.
The vendor-builders made no reference to the removal of a house from lot 9 nor that its foundation remained there, and the plaintiff-buyers were unaware of either. Plaintiffs did not learn of the removal of the house nor its remaining foundation until long after they had moved in and had attempted to drain the lot. Plaintiffs thus based their suit for rescission mainly on a claim of fraud through misleading and deceptive statements but relied, too, on the fact that defendants knew there had been a residence on the property and that it had been removed because of the instability of the foundation, and urged that a failure to divulge this information to a prospective purchaser amounted to the fraudulent withholding of material information which the seller had a duty to divulge.
The trial court granted plaintiffs a decree of rescission but not on the main grounds of false and misleading representations. It categorically exonerated defendants of overt misrepresentation and deceit in an express finding that there was insufficient proof of positive, fraudulent misstatements and that no fraudulent misstatements were "established by clear, cogent and convincing evidence." Further obviating the idea of fraud, the court found that the defendants "believed that the foundations which had been established for the house ... were adequate to support it," and that "defendants Thornton took all the steps they felt were necessary to comply with a difficult soil situation." The court found, too, that the defendants knew there had been a house on the same lot and that, because of "some type of earth movement, the concrete foundation had cracked and the house had to be removed."
*433 Again, in summarizing the case in an oral opinion, the court categorically stated that its judgment was not to be based on concepts of fraud and deceit.[1] Finally, to make it clear that actionable fraud and deceit were not the basis for the relief granted, the trial judge, favoring the record with a memorandum opinion, said:
Plaintiffs alleged fraud as grounds for their requested rescission. However, the Court found, after the presentation of all the evidence, that the plaintiffs had failed to sustain their burden to prove by clear, convincing and cogent evidence that any affirmative misrepresentation had been made to Mr. House concerning the soil stability.
Rescission was thus granted and judgment awarded the buyers, as we understand the learned judge's opinion, on the basis that the defendants knew of the earlier soil slippage and removal of the house some 15 years earlier from lot 9; that this possible instability would not be evident to a purchaser even on careful examination unless he were a soil expert; and that this knowledge, even though the vendor conscientiously and for good reason believed the foundation and soil to be firm and secure, gave rise to a duty to disclose it to the buyer. The failure to make such a disclosure, concluded the trial court, engendered the same right to rescission in this case as would actionable fraud and deceit.
[1] Fraud and deceit, being so easy to assert, must be proved by clear, cogent and convincing evidence. Baertschi v. Jordan, 68 Wn.2d 478, 413 P.2d 657 (1966); Williams v. Joslin, 65 Wn.2d 696, 399 P.2d 308 (1965); Swanson v. Solomon, 50 Wn.2d 825, 314 P.2d 655 (1957). Despite the *434 absence of actionable fraud, deceit and misrepresentation, however, we think that the trial court reached the right conclusion. Our reasons differ in some degree from those of the trial court although it should be said that the doctrines upon which we affirm have not, we think, been heretofore squarely stated in this jurisdiction in cases arising from the sale and purchase of realty.
In two cases, the issues concerning the sale of or construction upon real estate have approached, but not quite reached, the determinative issues now before us. Hoye v. Century Builders, Inc., 52 Wn.2d 830, 329 P.2d 474 (1958), held that when a contractor undertook to construct a house for and upon the land of another, there was an implied warranty that the house would be fit for human habitation. In Fain v. Nelson, 57 Wn.2d 217, 356 P.2d 302 (1960), we again held that, where a building is sold in the course of construction, there can be an implied warranty that on completion it will be fit for the intended purpose, but that a defective but reparable roof was not such a fatal defect or deficiency as to vitiate the contract since it did not render the building unfit for its intended purpose and did not amount to a breach of the implied warranty.
The rule of implied warranty of fitness covering new construction or the sale of a partially constructed building, although closely related to the sale of a brand-new residence, falls short of meeting the precise issues in the instant case. Frequently, the prospective purchaser of a house buys it with knowledge of its defects and makes no point whatever of their existence before consummating the deal; and if the defects or deficiencies or conditions do not render the house unfit for habitation, the question of whether an implied warranty covers them could be said to depend on whether they are of such magnitude as to prevent the house from being used for the purpose for which it was purchased. See Fain v. Nelson, supra. But the present trend is toward the implied warranty of fitness and away from caveat emptor when it comes to the things which vitally affect the structural stability or preclude the occupancy of the building.
*435 [2] Nothing, of course, can be said to be more vital to a dwelling than the stability of its foundation. When the foundation of a house cracks, slips, shifts or deteriorates to such an extent that a person of reasonable prudence would reasonably assume that the house is unsafe for occupancy, it is no longer fit for its intended purpose, i.e., a place of residence for the owner and his family. This, of course, is true whether the danger arises from instability of the land and terrain on which the foundation rests or from defects in the foundation's design, installation, fabrication or composition. There can be little doubt that the house which plaintiffs bought from the defendants met this test of unsuitability. The evidence amply supported the court's conclusion that the sliding, slipping, and cracking of the foundation and floors, and the cracking and shifting of the walls, although due not to faulty design, installation or workmanship but rather to the instability of the ground and terrain upon which the house stood, rendered the premises unusable as a dwelling.
Although the court found that the defendants were free of fraud and misrepresentation, and there was no proof that the defendants failed to properly design and erect the building, or that they used defective materials or in any respect did an unworkmanlike job, and that they were innocent of any intentional wrong, the fact remains that they sold and turned over to plaintiffs a brand-new $32,000 residence which turned out to be unfit for occupancy. As between vendor and purchaser, the builder-vendors, even though exercising reasonable care to construct a sound building, had by far the better opportunity to examine the stability of the site and to determine the kind of foundation to install. Although hindsight, it is frequently said, is 20-20 and defendants used reasonable prudence in selecting the site and designing and constructing the building, their position throughout the process of selection, planning and construction was markedly superior to that of their first purchaser-occupant. To borrow an idea from equity, of the innocent parties who suffered, it was the builder-vendor who made the harm possible. If there is a comparative *436 standard of innocence, as well as of culpability, the defendants who built and sold the house were less innocent and more culpable than the wholly innocent and unsuspecting buyer. Thus, the old rule of caveat emptor has little relevance to the sale of a brand-new house by a vendor-builder to a first buyer for purposes of occupancy.
[3] We apprehend it to be the rule that, when a vendor-builder sells a new house to its first intended occupant, he impliedly warrants that the foundations supporting it are firm and secure and that the house is structurally safe for the buyer's intended purpose of living in it. Current literature on the subject overwhelmingly supports this idea of an implied warranty of fitness in the sale of new houses. See Property-Implied Warranty of Fitness in the Sale of a New House, 71 W. Va. L. Rev. 87 (1968); The Case of the Unwary Home Buyers: The Housing Merchant Did It, 52 Cornell L.Q. 835 (1967); Caveat Emptor in Sales of Realty Recent Assaults Upon the Rule, 14 Vand. L. Rev. 541, (1961); The Case For an Implied Warranty of Quality in Sales of Real Property, 53 Geo. L.J. 633 (1965). See, also, 43 Den. L. Rev. 379 (1966); 26 U. Pitt L. Rev. 862 (1965); 44 N.C.L. Rev. 236 (1965); 1 Cal. West. L. Rev. 110 (1965).
Other jurisdictions have imposed an implied warranty of fitness upon the vendor-builder of a new house. Waggoner v. Midwestern Dev., Inc., 154 N.W.2d 803 (S.D. 1967); Schipper v. Levitt & Sons, Inc., 44 N.J. 70, 207 A.2d 314 (1965); Carpenter v. Donohoe, 154 Colo. 78, 388 P.2d 399 (1964); Bethlahmy v. Bechtel, 91 Ida. 55, 415 P.2d 698 (1966).
Affirmed.
HUNTER, C.J., HILL and ROSELLINI, JJ., and ARMSTRONG, J. Pro Tem., concur.
NOTES
[*] Reported in 457 P.2d 199.
[1] "I frankly have been impressed with both sets of clients in this case. I have been impressed with Mr. House and I have also been impressed with the Thorntons. I was thinking this afternoon if I had a house to build, I am not sure I wouldn't call Mr. Thornton at some stage and let him take a look at it. I am impressed with his conscientiousness in approaching the problems in this house. I have been impressed with Mr. House's attempt to recollect what happened in the case.
"I feel in stating it very summarily that the proof of positive fraudulent misstatements on the part of the Headleys and the Thorntons has not been made by clear, cogent and convincing evidence."
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544 S.E.2d 186 (2001)
247 Ga. App. 457
SMITH
v.
NASSERAZAD.
No. A00A2541.
Court of Appeals of Georgia.
January 3, 2001.
Certiorari Denied June 12, 2001.
*187 Slater, King & Gross, Scott R. King, Atlanta, for appellant.
King & Croft, Terrence L. Croft, Atlanta, for appellee.
Morris & Witcher, Robert P. Witcher, Joseph H. King, Jr., Atlanta, amici curiae.
MILLER, Judge.
In a single deed to secure debt, Douglas T. Smith transferred to his mortgagees two separate lots, one lying wholly in DeKalb County and one lying wholly in Fulton County. A copy of the deed was recorded in each county. Smith defaulted on his debt, and the mortgagees foreclosed on both lots. Smith filed the instant petition to cancel a Deed After Foreclosure Under Power of Sale and for declaratory judgment, alleging that defendant Hooshang Nasserazad's purchase of the property located in Fulton County at a foreclosure conducted on the DeKalb County courthouse steps was invalid. Smith argued that he had filed a notice of appeal from the Fulton County Superior Court order authorizing the mortgagees (Nasserazad's grantors) to proceed with foreclosure and that the foreclosure was not conducted in the county where the property is located.
The superior court dismissed the petition, relying on a nonprecedential opinion of this Court in a related appeal between Smith and his mortgagees[1] to conclude that foreclosure was proper. In his sole enumeration of error, Smith contends the superior court erred in relying on our unpublished nonprecedential opinion to grant Nasserazad's motion to dismiss on the basis of collateral estoppel. We affirm.
1. Although Rule 36 cases are not binding on other courts, our unreported nonprecedential decisions are still binding on the parties, for they establish the law of the case as provided by OCGA § 9-11-60(h).[2] Thus, the appellate record in a Rule 36 case, including the enumerations of error, may be used to prove collateral estoppel.
2. The modern trend in applying the doctrine of collateral estoppel or issue preclusion is to confine the privity requirement to the party against whom the plea is asserted, so as to permit one who is not a party to the judgment to assert the judgment against a party who is bound by it, and thus preclude relitigation by that party of issues which have been determined adversely to him in a prior action, even though if the issue had been decided in his favor in the prior action, he would not be entitled to assert the prior adjudication in a subsequent action against a *188 stranger to the judgment.[3] Nevertheless, in Wickliffe v. Wickliffe Co.,[4] a majority of this Court overruled cases following this modern trend and adhered to the traditional rule as announced by the Supreme Court of Georgia,[5] that collateral estoppel requires an "identity of parties or their privies in both actions."[6]
In Case No. A00A0066, Smith raised the same grounds for reversal as he did in this complaint, namely that foreclosure on the Fulton County property at a knock-down proceeding in DeKalb County, pending an appeal of the Fulton County order allowing foreclosure to proceed, was improper. This contention was necessarily decided against Smith by this Court's judgment of affirmance. But Nasserazad was not a party to that case, in that he was not named and served, nor did he appear voluntarily. The question then becomes whether he is in privity with the mortgagees, who were parties to that appeal.
3. "The test of privity is to determine whether one has privity with another, not whether the other has privity with the one, and then assume that such privity is reciprocal."[7]
Generally speaking, privies are those legally represented at trial. Privity connotes those who are in law so connected with a party to the judgment as to have such an identity of interest that the party to the judgment represented the same legal right; and where this identity is found to exist, all are alike concluded and bound by the judgment.[8]
One party is the privy of another where there is a mutual or successive relationship to the same right.[9] So "a privy is one who, after the commencement of the action, has acquired an interest in the subject matter affected by the judgment through or under one of the parties, as by inheritance, succession, purchase, or assignment."[10] Thus,
[t]here is privity within the meaning of the doctrine[s] of res judicata [and collateral estoppel] where there is an identity of interest and privity in estate, so that a judgment is binding as to a subsequent grantee, transferee, lienor, or lessee of property.[11]
Here, Smith transferred his title in both lots to his mortgagees by security deed containing the power of sale. He tried unsuccessfully to block their foreclosure sale and that decision was affirmed by this Court. Subsequently, the mortgagees transferred title to Nasserazad under the Deed After Foreclosure Under Power of Sale that Smith now seeks to set aside on the basis that foreclosure was improper for the reasons rejected in Case No. A00A0066. Since the mortgagees granted Nasserazad their interests in the property affected by the judgment in Case No. A00A0066, subsequent to the commencement of that action, he is in privity of estate with Smith's mortgagees. Consequently, Nasserazad is entitled to raise collateral estoppel to bar Smith from relitigating the propriety of foreclosure.[12] The trial *189 court correctly dismissed the instant complaint.
Judgment affirmed.
POPE, P.J., and MIKELL, J., concur.
NOTES
[1] Smith v. Levadi, Case No. A00A0066, decided under Court of Appeals Rule 36, 243 Ga.App. XXII (April 26, 2000).
[2] Court of Appeals Rule 33(b).
[3] Green v. Thompson, 208 Ga.App. 609, 610, 431 S.E.2d 390 (1993).
[4] 227 Ga.App. 432, 434(1), 489 S.E.2d 153 (1997) (whole court).
[5] Waldroup v. Greene County Hosp. Auth., 265 Ga. 864, 867(2), 463 S.E.2d 5 (1995).
[6] Green v. Thompson, supra, being contrary to the subsequent whole court decision in Wickliffe, supra, can no longer be followed on this point.
[7] (Citation omitted). Gilmer v. Porterfield, 233 Ga. 671, 674(2), 212 S.E.2d 842 (1975).
[8] (Citations and punctuation omitted). Pinkard v. Morris, 215 Ga.App. 297, 298(1), 450 S.E.2d 330 (1994).
[9] Smith v. Wood, 115 Ga.App. 265, 268(4), 154 S.E.2d 646 (1967).
[10] (Footnotes omitted). 47 AmJur2d 87, Judgments, § 663 (1995)
[11] (Footnotes omitted.) Id. at pp. 88-89. Accord Morris v. Murphy & Co., 95 Ga. 307, 309(1), 22 S.E. 635 (1895) (every person is a privy to a judgment whose succession to the rights of property thereby affected, coming through one or other of the parties, occurred subsequent to the commencement of the suit).
[12] See, e.g., Morris v. Ga. Power Co., 65 Ga.App. 180, 188-189(1), 15 S.E.2d 730 (1941).
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670 F.2d 238
68 A.L.R.Fed. 825, 216 U.S.App.D.C. 80,7 Media L. Rep. 2363
Howard SYMONSv.CHRYSLER CORPORATION LOAN GUARANTEE BOARD, Appellant.
No. 80-1599.
United States Court of Appeals,District of Columbia Circuit.
Argued April 10, 1981.Decided Dec. 4, 1981.
Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 80-1036).
Frank A. Rosenfeld, Atty., U. S. Dept. of Justice, Washington, D. C., with whom Alice Daniel, Asst. Atty. Gen., Charles F. C. Ruff, U. S. Atty., and Leonard Schaitman, Atty., U. S. Dept. of Justice, Washington, D. C., were on brief, for appellant.
Alan B. Morrison, Washington, D. C., with whom David C. Vladeck and Katherine A. Meyer, Washington, D. C., were on brief, for appellee.
Before McGOWAN, Senior Circuit Judge, and TAMM and WALD, Circuit Judges.
Opinion for the court filed by Circuit Judge TAMM.
TAMM, Circuit Judge:
1
In this action the Government challenges the district court's determination that the Chrysler Corporation Loan Guarantee Board (the Board) is an "agency" required to comply with the open meeting provisions of the Government in the Sunshine Act, 5 U.S.C. § 552b (1976) (Sunshine Act or the Act). Because we conclude that the Board does not fall within the Sunshine Act's definition of "agency," we reverse, 488 F.Supp. 874.
I. BACKGROUND
A. The Sunshine Act
2
In 1976 Congress enacted the Government in the Sunshine Act.1 The purpose of the Sunshine Act is to provide the public with information regarding the decision-making processes of the Federal Government "while protecting the rights of individuals and the ability of the Government to carry out its responsibilities." Pub.L.No.94-409, § 2, 90 Stat. 1241 (1976). To effectuate this purpose, the Act requires that every "meeting" of a covered "agency" be open to the public, 5 U.S.C. § 552b(b), with but a few limited exceptions. See 5 U.S.C. § 552b(c)(1)-(10). The Act also mandates the public announcement of meetings, 5 U.S.C. § 552b(e), and the maintenance of a complete transcript or electronic recording of meetings closed under any of the section 552b(c) exemptions. 5 U.S.C. § 552b(f).
3
The definitions of "meeting" and "agency" in the Sunshine Act are quite specific. The term "meeting" applies only to "the deliberations of at least the number of individual agency members required to take action on behalf of the agency where such deliberations determine or result in the joint conduct or disposition of official agency business ...." 5 U.S.C. § 552b(a)(2). In order to be covered by the Sunshine Act, an "agency" must initially fall within the ambit of the definition found in the Freedom of Information Act (FOIA), 5 U.S.C. § 552(e) (1976),2 and in addition must be "headed by a collegial body composed of two or more individual members, a majority of whom are appointed to such position by the President with the advice and consent of the Senate ...." 5 U.S.C. § 552b(a)(1) (emphasis added). It is this definition of "agency," and in particular the words "to such position," upon which this case turns.
4
B. The Chrysler Corporation Loan Guarantee Board
5
The Chrysler Corporation Loan Guarantee Act of 1979, 15 U.S.C. §§ 1861 et seq. (Supp. III 1979), was enacted to help the Chrysler Corporation avoid bankruptcy by having the United States provide the company with up to $1.5 billion in loan guarantees. The Chrysler Corporation Loan Guarantee Board, established by Congress to administer the loan guarantee program, 15 U.S.C. § 1862, is authorized to make commitments for loan guarantees and to issue such guarantees if it determines that conditions imposed by the Act have been satisfied. 15 U.S.C. §§ 1863, 1864. The Board must make findings and report them to Congress no less than fifteen days prior to issuing any guarantees. 15 U.S.C. §§ 1864(b), 1873(b).
6
The Chrysler legislation provides that the Board shall be composed of persons holding particular government posts. 15 U.S.C. § 1862. The Secretary of the Treasury chairs the Board; the Chairman of the Board of Governors of the Federal Reserve System and the Comptroller General of the United States are the other voting members, while the Secretaries of Labor and Transportation serve as nonvoting members of the Board. Id. Thus, although all Board members have been appointed to some position by the President with the advice and consent of the Senate, they were not so appointed to their Board positions. Rather, they serve, according to statutory mandate, by virtue of the other offices they hold.
C. The Instant Litigation
7
The facts in this case are straightforward and undisputed. Appellee Howard Symons is a staff attorney and lobbyist with Congress Watch, a public interest organization. On April 23, 1980, counsel for Symons sent a letter to the Board demanding that it comply with the Sunshine Act and stating that relief would be sought in federal court if he was not assured that such compliance would ensue. Joint Appendix (J.A.) at 10-11. The Board responded on the following day that it is not an "agency" required to conduct its business within the contours of the Act since none of its members were appointed to their Board positions by the President. J.A. at 12. Symons subsequently filed suit in the United States District Court for the District of Columbia on April 25, 1980, and moved for a temporary restraining order directing the Board to comply with the statutory requirements of the Act pending a decision on the merits.3 On the same day, the district court issued a temporary order enjoining the Board from holding any meeting in a manner inconsistent with the Sunshine Act provisions. J.A. at 13.
8
On May 14, 1980, after briefing and argument, the district court issued a final order and accompanying opinion holding that the Board is an "agency" for Sunshine Act purposes and directing the Board to comply with the Act in all respects. J.A. at 27-33. It is this decision, now reported at 488 F.Supp. 874 (D.D.C.1980), that the Government appeals.
II. DISCUSSION
9
The only issue before this court is whether the Board is an "agency" subject to the provisions of the Sunshine Act. For the purposes of the Act, the term "agency" applies only to federal bodies "headed by a collegial body composed of two or more individual members, a majority of whom are appointed to such position by the President with the advice and consent of the Senate ...." 5 U.S.C. § 552b(a)(1) (emphasis added). In the Government's view, the phrase "to such position" can refer back only to the term "collegial body." Thus, the Government contends that the Board is not covered by the Act because none of its members were appointed to positions on the "collegial body" (the Board) by the President, as required by the literal terms of the statute. Rather, Board members serve ex officio, by virtue of their appointment, concededly by the President with the advice and consent of the Senate, to other high government offices.
10
The district court rejected the Government's argument, saying it derived from a "crimped, unduly restrictive view of the statute ...." 488 F.Supp. at 876. Although the district court implicitly acknowledged that the Board would not be subject to the Act if the phrase "to such position" were accorded its plain meaning, it believed that the broadly remedial nature of the Sunshine Act mandated liberal construction in order to effectuate legislative goals. Id. at 876-77. In addition, the trial court stated that in passing the Sunshine Act Congress chose to employ a "broad, all encompassing definition of agency ...." Id. at 876. The district court could find no hint in the legislative history of why Congress included the phrase "to such position" in the definition of "agency":
11
The legislative history is silent as to any purpose served by the distinction excluding an agency from the Act's coverage because its members are statutorily appointed following initial Presidential appointment to their principal executive positions as opposed to an agency whose members are individually appointed by the President at the outset.
12
Id. Given this silence in the legislative history and the remedial nature of the Act, the district court did not feel obliged to give effect to the plain meaning of the phrase "to such position." Rather, purporting to effectuate the overriding legislative purpose, the court rejected a literal reading of the statute and held that the Act's definitional threshold was met where the agency members were simply "appointed by the President," even if not to the agency itself.
13
It is axiomatic that in interpreting any statutory provision our starting point must be the language of the statute itself. Consumer Product Safety Commission v. GTE Sylvania, 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980). Ordinarily, courts will give effect to the plain meaning of the words used by the legislature, and appellee Symons has presented no convincing argument that the phrase "to such position" can be given any plausible construction other than the one urged upon this court by the Government.
14
We do not quarrel with the district court's characterization of the Sunshine Act as a broadly remedial statute dedicated to the principles of open government deliberations and the public's "right to know." 488 F.Supp. at 876. The fact that legislation has a remedial purpose, however, does not give the judiciary license, in interpreting a provision, to disregard entirely the plain meaning of the words used by Congress. This court has stated in the FOIA context that, even where a statute is broad in scope, proper deference must be paid to the plain meaning rule. Consumers Union of the United States, Inc., v. Heimann, 589 F.2d 531, 533 (D.C.Cir.1978).
15
Although Symons initially suggests that the phrase "to such position" could be read to include presidential appointment to positions other than the "collegial body" itself, Brief for Appellee at 7, he relies primarily on the argument that the phrase is mere surplusage. Brief for Appellee at 5, 8-9. Such a construction of a statute, however, is not favored by the law and would violate a fundamental rule of statutory interpretation-that in construing statutes courts should give effect, if possible, to every word used by Congress. Reiter v. Sonotone Corp., 442 U.S. 330, 339, 99 S.Ct. 2326, 2331, 60 L.Ed.2d 931 (1979).
16
Symons attempts to bolster his surplusage argument by pointing out the dearth of legislative history on the meaning of the disputed phrase. He contends that if "to such position" were intended to have a major impact on the scope of the definition of "agency," Congress would have elaborated upon it somewhere in the legislative history. Thus, Symons reasons, it is probable that Congress did not ascribe any particular meaning to the phrase, and therefore neither should courts. Brief for Appellee at 8-9, 15-24.
17
We do not, however, attribute any special significance to the legislative history's silence in this regard. Drawing inferences as to congressional intent from silence in legislative history is always a precarious business. Here, for example, the absence of any explanatory reference to the phrase in floor debates and committee reports could well evince Congress' feeling that the language employed was so clear as not to require elaboration. In any event, appellee's theory of statutory interpretation would allow courts to read out of a statute an unambiguous phrase when no explanation of it exists in the legislative history. This is, in our view, a unique principle of statutory construction, and one we cannot embrace.
18
We recognize, of course, that in interpreting legislation courts are not straitjacketed by Congress' choice of words. When the language used so conflicts with evidenced congressional intent that a mistake in draftsmanship is obvious, courts may remedy the mistake. See United States v. Babcock, 530 F.2d 1051, 1053 (D.C.Cir.1976). In this case, however, there is no evidence of mistake or contrary legislative intent that persuades us to ignore the plain meaning of the statute's words. As the Supreme Court has recently reaffirmed, "(a)bsent a clearly expressed legislative intention to the contrary, (the language of the statute) must ordinarily be regarded as conclusive." Consumer Product Safety Commission, 447 U.S. at 108, 100 S.Ct. at 2056.
19
Moreover, there is one piece of legislative history that suggests Congress contemplated that the phrase "to such position" would be given the meaning ascribed to it by the court today. Congresswoman Bella Abzug, who chaired the subcommittee of the House Government Operations Committee that initially reported the Sunshine Act, testified before a subcommittee of the House Judiciary Committee that agencies whose members serve in an ex officio capacity would not be subject to the Sunshine Act.4 Specifically, in answer to a question asked by Representative Thomas Kindness, Ms. Abzug stated that the National Security Council would not be covered by the Act because its members were not appointed to the Council by the President, but rather were appointed to other offices and served on the Council ex officio.5
20
We recognize that "(t)he remarks of a single legislator, even the sponsor, are not controlling in analyzing legislative history," Chrysler Corp. v. Brown, 441 U.S. 281, 311, 99 S.Ct. 1705, 1722, 60 L.Ed.2d 208 (1979), and we therefore disagree with the Government's assertion that Ms. Abzug's testimony is "controlling" in this case. Reply Brief for Appellant at 8. The testimony is, however, some evidence of Congress' views regarding the applicability of the Sunshine Act to ex officio agencies and is entitled to more weight than Symons suggests.6 Brief for Appellee at 27-29. This is particularly true since Ms. Abzug was a primary supporter of Sunshine legislation for many years and chaired the House subcommittee that originally considered the bill. It is also significant that the view expressed by the Congresswoman in her testimony is not controverted anywhere in the legislative history.
21
Other government offices have interpreted the disputed phrase in a manner consistent with Ms. Abzug's testimony in at least two instances. The Department of Justice has taken the position, in a nonlitigation context, that members who serve on an agency ex officio are not presidential appointees in the sense contemplated by the Sunshine Act's definition of "agency" because their appointment was not to such position, i.e., on the collegium.7 The Federal Open Market Committee (FOMC) has concluded that it is not a covered agency for the same reason. 12 C.F.R. § 281.2 (1981). Although we recognize that these government interpretations are, to some degree, self-serving, particularly in the FOMC's case, they do represent previous consistent constructions of the Act and therefore provide additional support for the reading given to the statute today.
22
We do not find persuasive the assertion by the district court and appellee that in enacting the Sunshine Act Congress adopted a "broad, all encompassing definition of agency." 488 F.Supp. at 876. We think it is clear from the face of the Act that Congress chose a more narrow definition of "agency" than suggested by appellee and the trial court. Although the Act uses as a foundation the general "agency" definition found in the FOIA, Congress chose further to restrict Sunshine coverage to particular types of agencies. The Act clearly does not apply to agencies headed by a single individual, and Congress failed to act on an early version of the legislation that would have made all agencies having more than one member subject to the Act, without regard to method of appointment.8
23
Although there are very few cases that discuss the term "agency" in the Sunshine context, and none that discuss the particular language at issue here, the United States Court of Appeals for the Tenth Circuit has recognized that "agency" as used in the Sunshine Act is not a broad term.
24
In this statute we are not concerned with an "agency" in the broad sense of that word. The statute itself limits the Sunshine Act to any agency headed by a collegial body, a majority of whose members are appointed by the President with the advice and consent of the Senate. That is the only type of an agency covered by the Act.
25
Hunt v. NRC, 611 F.2d 332, 336 n.2 (10th Cir. 1979), cert. denied, 445 U.S. 906, 100 S.Ct. 1084, 63 L.Ed.2d 322 (1980).9
26
It is true, as noted by the district court, that Congress preferred a statutory definition to a restrictive listing of covered agencies. 488 F.Supp. at 876. The idea of listing covered agencies in the Act was rejected, however, not because Congress wanted a broad definition of "agency," but out of fear that an agency might inadvertently be omitted when the list was compiled, and to avoid the need for amending the statute each time a new agency was created. See House Hearings at 9-10 (testimony of Rep. Fascell); see also 122 Cong.Rec. 24213-14 (1976) (remarks of Reps. Kindness, Abzug, and Flowers).
27
Although the idea of listing covered agencies was ultimately rejected by Congress for the reasons just stated, both the Senate Report and the House Judiciary Report set forth what Congress believed was a complete list of entities that would be covered by the bill's definition of "agency."10 It should be noted that not one of the forty-seven agencies listed had a majority of ex officio members. Each one had a majority of persons who were appointed by the President to the agency itself. Appellant points out that such ex officio agencies as the Federal Open Market Committee, the Federal Labor Relations Council, and the Emergency Loan Guarantee Board, which performed a task for Lockheed similar to the one performed by the Board for Chrysler in the present case, were not listed. See Brief for Appellant at 18. We agree with appellant that it is unlikely that Congress would have overlooked an entire category of agencies it wished to subject to the Act. We therefore view the failure to list any ex officio agency as additional, although certainly not conclusive, evidence that Congress did not contemplate their inclusion in the definition of "agency."
28
The district court held that it could reject a literal reading of a statute if such a reading would "produce an absurd result," 488 F.Supp. at 877, citing United States v. Babcock, 530 F.2d 1051, 1053 (D.C.Cir.1976); "greatly impair the statute's effectiveness," 488 F.Supp. at 877, quoting Zeigler Coal Co. v. Kleppe, 536 F.2d 398, 405 (D.C.Cir.1976); or result in "stultification of the scheme or plan as a whole," 488 F.Supp. at 877-78, quoting Cabell v. Markham, 148 F.2d 737, 739 (2d Cir.), aff'd, 326 U.S. 404, 66 S.Ct. 193, 90 L.Ed. 165 (1945). Although we heartily agree with the basic premises stated by the district court, we believe they were misapplied in the instant case. The consequences of giving effect to the plain meaning of the words used by Congress here are not nearly as Draconian as in the cases cited by the district court.11 We are not persuaded that our interpretation of the language will undermine the aims of the Sunshine Act in the manner suggested by Symons. Brief for Appellee at 38. As noted above, many government agencies are excluded by definition from Sunshine Act coverage. If Congress wanted to subject the Board to the provisions of the Act, it could have so provided when the Board was established. In fact, shortly after creating the Chrysler Board, Congress established the Depository Institutions Deregulation Committee, another agency whose members serve ex officio.12 The legislation creating this entity explicitly provided that it would be subject to the requirements of the Sunshine Act.13 This suggests that when Congress wishes to extend Sunshine coverage to ex officio agencies, it will do so.
III. CONCLUSION
29
For the reasons noted above, we hold that the Chrysler Corporation Loan Guarantee Board is not an "agency" as defined by the Government in the Sunshine Act. The terms of the definition are clear, and there is no evidence in the legislative history suggesting that Congress did not intend that the plain meaning of the words be given effect. It may be that exclusion of the Board and similar government entities from Sunshine coverage runs counter to the spirit of the Act, but, in the final analysis, the words of the statute must control. Arguments that this result is unfortunate should be addressed to Congress rather than to the courts. Accordingly, the judgment of the district court is reversed.
30
It is so ordered.
WALD, Circuit Judge, dissenting:
31
The Government in the Sunshine Act, 5 U.S.C. § 552b (1976) ("Sunshine Act"), was enacted to provide the public with "the fullest practicable information regarding the decisionmaking processes of the Federal Government ... while protecting the rights of individuals and the ability of Government to carry out its responsibilities." Pub.L.No.94-409, § 2, 90 Stat. 1241 (1976). To fulfill this design, every meeting of an agency covered by the Sunshine Act must be open to the public except when a majority of the agency's members determines that its meeting or any part of its meeting is likely to reveal matters which Congress had determined ought not be disclosed prematurely, such as national security, internal personnel practices, or pending litigation.1
32
Agencies subject to the Sunshine Act are those
33
headed by a collegial body composed of two or more individual members, a majority of whom are appointed to such position by the President with the advice and consent of the Senate.
34
5 U.S.C. § 552b(a)(1). A generic definition of agency was used in the law instead of a specific list of agencies so that qualifying subsequently-constituted agencies would automatically be covered by the Act. See Government in the Sunshine Act-S.5 (Public Law 94-409), Source Book: Legislative History, Texts, and Other Documents, Comm. on Gov't Operations, United States Senate, and Comm. on Gov't Operations, U. S. House of Representatives, 94th Cong., 2d Sess. (December 1976) (hereinafter Source Book). Neither advisory committees, id. at 210, nor collegial bodies of a subordinate nature, Hearings Before the Subcommittee on Reorganization of the Committee on Government Operations, United States Senate, on S. 260, 93d Cong., 2d Sess. 245 (1975), were meant to be included in the Act. Otherwise, the definition was intended to be a broad one.2
35
The question in this case is whether the members of the Board constituted by the Chrysler Corporation Loan Guarantee Act, 15 U.S.C. §§ 1861 et seq. (Supp. III 1979) ("Chrysler Act"), were appointed "to such position by the President with the advice and consent of the Senate." The Chrysler Corporation Loan Guarantee Board ("Chrysler Board" or "Board") is statutorily composed of the Secretary of the Treasury, who serves as Chairman of the Board, the Chairman of the Board of Governors of the Federal Reserve System, and the Comptroller General of the United States-officials who are appointed by the President with the advice and consent of the Senate. In addition, the Secretary of Labor and the Secretary of Transportation, also appointed and confirmed officials, are designated ex officio nonvoting members of the Board.
36
The majority finds the statutory language "clear" and so, relying primarily upon the "plain meaning doctrine," holds that the Sunshine Act is inapplicable to the Chrysler Board. That reading of the statute is, I believe, overly simplistic and, in the context of the facts here, unjustified. While the language of the Sunshine Act might seem clear on first reading, it carries with it a substantial ambiguity when applied in this case. Simply put, it seems to me that when appointed and confirmed officials are statutorily required to serve as a majority of members on a high-level, decisionmaking, collegial body, the definition of "agency" under the Sunshine Act is satisfied.
37
The Chrysler Act requires the Secretary of the Treasury and other appointed and confirmed officials to serve on the Board. Having been appointed and confirmed to one of the offices enumerated in the Act, each of those individuals must serve on the Chrysler Board. An appointment to head the Treasury Department is also an appointment to chair the Chrysler Board. When Donald Regan was appointed and confirmed as Secretary of the Treasury, he was simultaneously appointed and confirmed as Chairman of the Chrysler Board. Hearings on his appointment naturally included questions about the Chrysler "bailout." See e.g., Hearings Before the Senate Committee on Finance on the Nomination of Donald T. Regan To Be Secretary of the Treasury, 97th Cong., 1st Sess., 12-13 (January 6, 1981). If, for example, Secretary Regan were replaced as Secretary of the Treasury by the President, he could not continue to serve as Chairman of the Chrysler Board. His replacement as Secretary of the Treasury would be required to serve as Chairman of the Chrysler Board. The President could not replace Secretary Regan with someone to serve as Secretary of the Treasury and someone else to serve as Chairman of the Chrysler Board, for the latter position is a necessary part of the duties of the former position. This reading of the statute is not undercut by the fact that the first Chairman of the Chrysler Board was already serving as Secretary of the Treasury at the time the Chrysler Act was passed. Clearly it is contemplated that, during the tenure of an appointed and confirmed official, that official might be required to discharge duties assigned by subsequently enacted legislation. Cf. Shoemaker v. United States, 147 U.S. 282, 13 S.Ct. 361, 37 L.Ed. 170 (1893) (Congress may increase the powers and duties of an appointed and confirmed officer without rendering it necessary that the officer be again appointed and confirmed). Thus, the members of the Chrysler Board, by virtue of their appointment and confirmation to the positions enumerated in the Chrysler Act, are appointed and confirmed to that Board and so meet the requirement of the Sunshine Act set by the words "to such position."
38
The only legislative history available to suggest any other interpretation is testimony before the House Judiciary Committee by Representative Bella Abzug, who chaired the House Government Operations Committee which reported out the House version of the Sunshine Act. In response to Representative Kindness' question about whether the National Security Council was to be covered by the bill, Representative Abzug answered:
39
No; I don't think they are because they're not appointed to that position by the President.
40
You see, I think that the answer to that is that they are appointed to other positions and that they are ex officio members and that the NSC is not a subsidiary of a covered agency. And I'm looking at section 552b(b) which gives us the definition-I don't know if you have the act in front of you, I mean, the bill-but in any case the term "agency" means "headed by a collegial body composed of two or more individual members, a majority of whom are appointed to such position by the President with the advice and consent of the Senate."
41
I think the definition itself is clear, I mean, I had to stop and think for a minute. I think the definition gives you an answer for almost any agency that you have. I don't think there's any problem with the generic definition.3
42
The majority acknowledges that the remarks of a single legislator are not controlling in analyzing legislative intent. Nevertheless, it embraces the remarks of Representative Abzug for the support those remarks provide. I cannot, however, accord the remarks any significant weight. Nowhere else in the legislative history is there any indication of Congressional intent to exclude from the purview of the Sunshine Act high-level, policymaking bodies, composed of statutorily designated appointed and confirmed officers. Further, nowhere in the legislative history can there be found any reason for distinguishing bodies whose appointed and confirmed members were statutorily designated from those whose members are appointed and confirmed separately for the collegial body on which they serve. Although courts, in construing Congressional intent, ought not attempt to probe the motives behind statements made by legislators, they should not be blind to confusion or error in such statements. In this case, Representative Abzug was obviously casting about for a quick answer to soothe the apprehensions of a colleague concerned that the sensitive discussions of the National Security Council would be exposed to public view by the Sunshine Act. Representative Abzug could have answered simply that the National Security Council was not subject to the Sunshine Act because it is an advisory body. Instead, she took a position with which neither proponents nor opponents of the Act had any need to take issue at the time (although, as appears from the exchange, Representative Kindness was not altogether persuaded by the position). The testimony consequently offers little insight into Congressional intent. Without any reliable legislative history to inform our choice between two reasonable constructions of the statutory language, we must look to the spirit and goal of the two Acts for guidance.
43
The majority admits that its position "may ... run counter to the spirit of the (Sunshine) Act." At 245. It undoubtedly does. As noted above, the Act was designed to encompass all multi-member, high-level, policymaking bodies, a majority of whose members were appointed and confirmed to the body. The history of the Chrysler Board legislation strongly suggests that it is precisely the kind of agency that Congress meant to subject to the Act. See, e.g., 125 Cong.Rec. H10621 (daily ed. Nov. 13, 1979) (remarks of Rep. Hinson, Rep. Bethune and Rep. Shumway); see also S.Rep.No.96-463, 96th Cong., 1st Sess. 17 (1979). Surely the public, whose funds are being expended to save the Chrysler Corporation from bankruptcy is entitled to the "fullest practicable information" regarding its investment.4 While section 14 of the Chrysler Act, 15 U.S.C. § 1873, requiring regular reports to Congress, provides a limited mandate for disclosure, compliance with the Sunshine Act's requirement of open meetings accomplishes a far broader remedial purpose of keeping the public informed. And the exemption provided by section 3(c)(9)(A) of the Sunshine Act, 5 U.S.C. § 552b(c)(9)(A), for partial closings when premature disclosure would upset the securities markets, alleviates any fear that sunshine will fall on areas that require cover to insure the public interest. Note that the Federal Reserve Board and the Securities and Exchange Commission, agencies that deal regularly with sensitive financial matters, are included within the Sunshine Act. See Source Book at 211.
44
In sum, I find that neither the plain language, the legislative history, nor the spirit of the Act command the decision of the majority. I would affirm the district court, and therefore I dissent.
1
5 U.S.C. § 552b (1976). For a narrative history of the Sunshine Act, see Government in the Sunshine Act-S.5 (Public Law 94-409), Source Book: Legislative History, Texts, and Other Documents, Comm. on Gov't Operations, United States Senate, and Comm. on Gov't Operations, U. S. House of Representatives, 94th Cong., 2d Sess. (December 1976) (hereinafter Source Book)
2
For Freedom of Information Act (FOIA) purposes, the term "agency" includes "any executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch of the Government ... or any independent regulatory agency." 5 U.S.C. § 552(e) (1976)
We presume that case law and other authorities under FOIA will govern the initial agency determination in Sunshine Act cases. See, e.g., Public Citizen Health Research Group v. Department of HEW, 668 F.2d 537 (D.C.Cir.1981); Forsham v. Califano, 587 F.2d 1128 (D.C.Cir.1978), aff'd sub nom., Forsham v. Harris, 445 U.S. 169, 100 S.Ct. 978, 63 L.Ed.2d 293 (1980); Rocap v. Indiek, 539 F.2d 174 (D.C.Cir.1976); Washington Research Project, Inc. v. Department of HEW, 504 F.2d 238 (D.C.Cir.1974), cert. denied, 421 U.S. 963, 95 S.Ct. 1951, 44 L.Ed.2d 450 (1975).
3
The Government in the Sunshine Act (Sunshine Act or the Act), 5 U.S.C. § 552b (1976), gives United States district courts jurisdiction to compel agency compliance with the Act. 5 U.S.C. § 552b(h)(1)
4
After the bill cleared Ms. Abzug's Subcommittee on Government Information and Individual Rights and was reported by the full Committee on Government Operations, it was referred to the Committee on the Judiciary, whose Subcommittee on Administrative Law and Governmental Relations held further hearings on the bill. See Source Book at pp. 3-4
5
Government in the Sunshine Act: Hearings on H.R. 11656 Before the Subcomm. on Administrative Law and Gov't Relations of the House Comm. on the Judiciary, 94th Cong., 2d Sess. 16 (1976)
6
As the district court noted, the Sunshine Act was not intended to encompass entities that perform primarily advisory, as opposed to decision making, functions. 488 F.Supp. at 876. Symons argues that the value of Ms. Abzug's testimony is reduced because the National Security Council could be excluded from Sunshine coverage on the ground that it is an advisory body. Brief for Appellant at 27-28. We do not believe that the existence of an alternate ground on which Ms. Abzug could have relied for excluding the Council makes her comments on the meaning of the disputed phrase any less significant
7
The Justice Department articulated this position in response to a request by an ex officio agency-the now-defunct Federal Labor Relations Council-for an opinion regarding its status under the Sunshine Act. See letter of Oct. 22, 1976, from Harold D. Kessler, Acting Executive Director of the Federal Labor Relations Council, to Antonin Scalia, Assistant Attorney General, Office of Legal Counsel, Joint Appendix (J.A.) at 21-24; letter of Oct. 27, 1976, from Leon Ulman, Deputy Assistant Attorney General, Office of Legal Counsel, to Mr. Kessler, J.A. at 25-26
8
Compare S.3881, § 5, 92nd Cong., 2d Sess. (1972), Source Book at 24, with the language ultimately adopted by Congress, 5 U.S.C. § 552b(a)(1)
9
In Hunt, the issue was whether the Sunshine Act applied to an adjudicatory hearing before the Atomic Safety and Licensing Board. The court's discussion of the term "agency" arose in the context of determining whether the phrase "any subdivision thereof" as used in 5 U.S.C. § 552b(a)(1) means any subdivision of a "collegial body" or any subdivision of an "agency." Hunt v. NRC, 611 F.2d 332, 336 n.2 (10th Cir. 1979), cert. denied, 445 U.S. 906, 100 S.Ct. 1084, 63 L.Ed.2d 322 (1980)
10
See S.Rep.No.354, 94th Cong., 1st Sess. 15-16 (1975), reprinted in Source Book at 210-11; H.R.Rep.No.880, Part 2, 94th Cong., 2d Sess. 13-14 (1976), U.S.Code Cong. & Admin.News 1976, p. 2183, reprinted in Source Book at 563-64
11
We agree with appellant that there are significant distinctions between this case and the cases cited by the district court. Brief for Appellant at 20, n.8. Appellee has made no attempt to refute these distinctions
12
See The Depository Institutions Deregulation Act of 1980, Pub.L.No.96-221, Title II, 94 Stat. 142, 12 U.S.C.A. §§ 3501 et seq. (1980). Voting members of the Committee are the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve Board, and the chairmen of other banking agencies. The Comptroller of the Currency is a nonvoting member of the Committee. 12 U.S.C.A. § 3502(b)
13
"All meetings of the Deregulation Committee shall be conducted in conformity with the provisions of section 552b of Title 5." 12 U.S.C.A. § 3502(b)
1
5 U.S.C. § 552b(c)(1)-(10) provides that
Except in a case where the agency finds that the public interest requires otherwise, the second sentence of subsection (b) shall not apply to any portion of an agency meeting, and the requirements of subsections (d) and (e) shall not apply to any information pertaining to such meeting otherwise required by this section to be disclosed to the public, where the agency properly determines that such portion or portions of its meeting or the disclosure of such information is likely to-
"(1) disclose matters that are (A) specifically authorized under criteria established by an Executive order to be kept secret in the interests of national defense or foreign policy and (B) in fact properly classified pursuant to such Executive order;
"(2) relate solely to the internal personnel rules and practices of an agency;
"(3) disclose matters specifically exempted from disclosure by statute (other than section 552 of this title), provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld;
"(4) disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential;
"(5) involve accusing any person of a crime, or formally censuring any person;
"(6) disclose information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy;
"(7) disclose investigatory records compiled for law enforcement purposes, or information which if written would be contained in such records, but only to the extent that the production of such records or information would (A) interfere with enforcement proceedings, (B) deprive a person of a right to a fair trial or an impartial adjudication, (C) constitute an unwarranted invasion of personal privacy, (D) disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source, (E) disclose investigative techniques and procedures, or (F) endanger the life or physical safety of law enforcement personnel;
"(8) disclose information contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;
"(9) disclose information the premature disclosure of which would-
"(A) in the case of an agency which regulates currencies, securities, commodities, or financial institutions, be likely to (i) lead to significant financial speculation in currencies, securities, or commodities, or (ii) significantly endanger the stability of any financial institution; or
"(B) in the case of any agency, be likely to significantly frustrate implementation of a proposed agency action.
except that subparagraph (B) shall not apply in any instance where the agency has already disclosed to the public the content or nature of its proposed action, or where the agency is required by law to make such disclosure on its own initiative prior to taking final agency action on such proposal; or
"(10) specifically concern the agency's issuance of a subpena, or the agency's participation in a civil action or proceeding, an action in a foreign court or international tribunal, or an arbitration, or the initiation, conduct, or disposition by the agency of a particular case of formal agency adjudication pursuant to the procedures in section 554 of this title or otherwise involving a determination on the record after opportunity for a hearing.
2
See Source Book at 212:
While many of those (agencies) covered are regulatory, others have more general policy-making roles. The decisions of one may involve no less important policy questions than the decisions of the other. Opening one type of meeting to the public is as important as opening another type. The notion of including some multiheaded agencies ... and excluding others would do violence to the fundamental purpose of the legislation, which is open Government to the people wherever and whenever possible.
3
The colloquy continued:
Mr. KINDNESS: In that specific case, the reasoning there would be that the people who serve on that Council, the National Security Council, are appointed by the President-
Ms. ABZUG: They serve their-they are appointed to another office. And they serve here as ex officio.
Mr. KINDNESS: And not appointed to such positions?
Ms. ABZUG: That's correct.
Mr. KINDNESS: I submit there may be some room for questions there. But the Domestic Council and the Council on Environmental Quality fall in about the same category, I think, then.
Ms. ABZUG: We would simply take the definition of "appointment" and see how they're appointed.
Hearings on H.R.11656 Before the House Subcommittee on Administrative Law and Government Relations of the Committee on the Judiciary, 94th Cong., 2d Sess. 16 (1976).
4
Congressional concern for the risk the American taxpayer was being asked to take was evidenced throughout the floor debates. See, e.g., 125 Cong.Rec. H12204 (daily ed. Dec. 18, 1979) (remarks of Rep. Stanton) ("In petty arguments about whether or not it is the Secretary of Transportation or the Secretary of Labor, we can stand up here all night and give arguments that it should be the Secretary of Commerce, that it is his business, that this affects small business or something, and that the Secretary of Commerce should be there as well as the Secretary of Labor. We can keep this up all night. For those who are so anxious to get home for Christmas and to get this subject out of the way, truthfully, I hope that they could give control to someone who would be a meaningful participant and do the best for my taxpayers and the gentleman's taxpayers to protect their money."); id., S. 19165 (remarks of Senator Bellmon) ("I urge Members to be very careful and not jump into something where we think we are doing a company a service when, in fact, we are doing an enormous disservice to the American taxpayer."); id., at S. 19201 (remarks of Senator Gravel) ("Another of my concerns with this bill is the risk the Congress proposes to take with taxpayers' dollars.")
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786 F.Supp.2d 1352 (2011)
UNITED STATES of America, Plaintiffs,
v.
Brian E. SAWYER, Defendant.
Case No. 5:11-CR-00139.
United States District Court, N.D. Ohio.
May 25, 2011.
*1353 Michael A. Sullivan, Office of the U.S. Attorney, Cleveland, OH, for Plaintiff.
Donald J. Malarcik, Jr., Gorman, Malarcik & Pierce, Akron, OH, for Defendant.
OPINION & ORDER
[Resolving Doc. No. 23]
JAMES S. GWIN, District Judge:
Defendant Brian E. Sawyer moves the Court to suppress evidence found during *1354 an allegedly illegal search and seizure of the Defendant's computer files. [Doc. 23.] The United States of America opposes the motion. [Doc. 24.] For the following reasons, the Court DENIES the Defendant's motion to suppress.
I. Background
In this case, the United States charges the Defendant with possession and distribution of child pornography, in violation of 18 U.S.C. § 2252(a)(2) and 18 U.S.C. § 2252A(a). The government bases its charges on evidence found on the Defendant's computer, which was seized during the execution of a search warrant on March 4, 2011. [Doc. 23-1 at 2-3.] The warrant was based upon information obtained as a result of the Defendant Sawyer's peer to peer file sharing. [Id. at 2-3.]
The Defendant used a "closed" peer-to-peer file sharing program called GigaTribe. [Id. at 1.] Normally, peer-to-peer file sharing programs, such as LimeWire or Kazaa, allow anyone using the same software to view and download files from the shared folder on any other user's computer, without special permission. Thus, in these "open" file sharing programs, any files stored in the shared folder on a user's hard drive are visible and may be downloaded by any other person using that same program.
The Defendant used a program called GigaTribe that is slightly different from these "open" programs. With GigaTribe, a user's files are not automatically made publicly available to all other users; instead, users may view and download files only after receiving specific authorization. [Id. at 1.] Consent to view and download files on GigaTribe is given when a user adds another user to his or her private list of so-called "friends." [Id. at 1.] GigaTribe users may become "friends" with other users through an electronic invitation; acceptance of this invitation allows the "friends" to directly browse and download files that are stored on each other's computers over the internet. [Id. at 1.] Individuals using the program select specified folders on their computer that they wish to share, and "friends" can browse, search, and download any of the files stored in those folders. [Id. at 1.] GigaTribe also features a chat function that allows users to communicate with each other. [Id. at 2.]
At the time of the events in question, the Defendant's GigaTribe username was "happyb." [Id. at 2.] While using his "happyb" username, the Defendant became online friends with another user, "SB," allowing the two accounts to access each other's shared folders to browse and download files. [Id. at 2.] Agent Couch previously obtained written consent from the user in control of the of the "SB" username to use that account for "any purpose relating to an official investigation by the above law enforcement authority [FBI], including (but not limited to) sending and receiving e-mail or conducting any other electronic communications, accessing stored information, and using and disclosing such communications or information." [Doc. 23-3.] On February 22, 2011, Special Agent Barry Couch of the FBI ("Agent Couch") logged into the GigaTribe network using the "SB" user name, viewed the Defendant's shared file list, and downloaded twenty-eight images of child pornography. [Id. at 2.] While downloading the images, Agent Couch and the Defendant, still using the "happyb" and "SB" usernames, engaged in a private chat about sexual contact with minors. [Id. at 2.]
During the download process, Agent Couch ascertained the internet protocol (IP) address for the Defendant's internet connection; the Defendant's physical address was later obtained through a subpoena from Time Warner Cable. [Doc. 23-1 *1355 at 2; Doc. 1-1.] Based upon this information, the FBI obtained a search warrant for Defendant Sawyer's home at 230 Superior Street, Louisville, Ohio, that was executed on March 4, 2011. [Doc. 23-1 at 2-3.] During the search, Defendant Sawyer's computer was seized and Sawyer was also interrogated for several hours. [Id.]
On April 6, 2011, a federal grand jury indicted the Defendant on one count of receipt and distribution of images of child pornography in violation of 18 U.S.C. § 2252(a)(2) and one count of possession of a computer containing child pornography in violation of 18 U.S.C. § 2252A(a). [Doc. 7.] The Defendant now moves the Court to suppress all evidence seized when Agent Couch logged onto the "SB" user name and downloaded files on February 22, 2011, as well as any evidence later seized as a result of that search and seizure, including the Defendant's computer. [Doc. 23.]
II. Analysis
The Fourth Amendment protects individuals against "unreasonable searches and seizures" by the government and protects privacy interests where an individual has a reasonable expectation of privacy. Smith v. Maryland, 442 U.S. 735, 740, 99 S.Ct. 2577, 61 L.Ed.2d 220 (1979). An expectation of privacy is protected by the Fourth Amendment where (1) an individual has exhibited a subjective expectation of privacy, and (2) that expectation of privacy is one that "`society is prepared to recognize as reasonable.'" Id. (quoting Katz v. United States, 389 U.S. 347, 361, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967) (Harlan, J., concurring)). In areas where an individual has a legitimate privacy interest, the Fourth Amendment prohibits warrantless searches of an individual's home or possessions, subject to only limited exceptions. Illinois v. Rodriguez, 497 U.S. 177, 181, 110 S.Ct. 2793, 111 L.Ed.2d 148 (1990). "Where valid consent is given, [however,] a search is permissible under the Fourth Amendment[,] even without a warrant or probable cause." United States v. Morgan, 435 F.3d 660, 663 (6th Cir.2006) (citing Schneckloth v. Bustamonte, 412 U.S. 218, 219, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973)). Valid consent may be given not only by the defendant, but also by "a third party who possessed common authority over or other sufficient relationship to the premises or effects sought to be inspected." United States v. Matlock, 415 U.S. 164, 171, 94 S.Ct. 988, 39 L.Ed.2d 242 (1974). Generally, any evidence obtained in violation of the Fourth Amendment must be suppressed, as well as any evidence seized subsequent to that illegal investigation as "fruits of the poisonous tree." Wong Sun v. United States, 371 U.S. 471, 487-88, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963).
First, the Court must determine whether Defendant Sawyer has a Fourth Amendment privacy interest in the materials stored on his computer that were shared on GigaTribe. A general consensus has formed among courts that an individual does not have a Fourth Amendment privacy interest in information made available on a public peer to peer filing sharing programs, such as LimeWire or Kazaa, since their expectation of privacy in that shared information is not objectively reasonable. United States v. Borowy, 595 F.3d 1045, 1047-49 (9th Cir.2010) (denying motion to suppress and finding that a defendant lacked a reasonable expectation of privacy over files that were made publicly available); United States v. Stults, 575 F.3d 834, 841-43 (8th Cir.2009) (same); United States v. Ganoe, 538 F.3d 1117, 1128 (9th Cir.2008) (same); United States v. Brese, 2008 WL 1376269, at *2 (W.D.Okla. Apr. 9, 2008) (same); United States v. Meysenburg, 2009 WL 1090664, at *2 (D.Neb. Apr. 22, 2009) (same); State *1356 v. Thornton, 2009 WL 3090409, at *2-3 (Ohio Ct.App. Sept. 22, 2009) (same). Indeed, a person who grants the public access to folders on his computer cannot be said to have an objectively reasonable expectation of privacy in those folders, as any member of the public using that program has free and unfettered access to them. Ganoe, 538 F.3d at 1127.
In the current case, however, where a person shares files over a "closed" network in which only pre-approved friends have access an expectation of privacy is somewhat more reasonable. Unlike in an open program, where any user can see and download the files, Defendant Sawyer's files were only visible to his "friends." [Doc. 23-1 at 1-3.] Nonetheless, despite the program affording some greater degree of privacy, the rationale of the decisions analyzing open file sharing programs is still persuasive here and the Court finds that Sawyer did not have an objectively reasonable expectation of privacy in the files that were shared over GigaTribe. United States v. Ladeau, 2010 WL 1427523, at *1-5 (D.Mass. Apr. 7, 2010) (holding an individual using GigaTribe has no reasonable expectation of privacy in the information that they share). Once Defendant Sawyer granted his "friends" access to his files, he had no control over the manner in which his friends used that access. Id. The Supreme Court "consistently has held that a person has no legitimate expectation of privacy in information he voluntarily turns over to third parties." Smith, 442 U.S. at 743-44, 99 S.Ct. 2577; see also United States v. White, 401 U.S. 745, 752, 91 S.Ct. 1122, 28 L.Ed.2d 453 (1971) ("Inescapably, one contemplating illegal activities must realize and risk that his companions may be reporting to the police."); see also Hoffa v. United States, 385 U.S. 293, 302, 87 S.Ct. 408, 17 L.Ed.2d 374 (1966) ("Neither this Court nor any member of it has ever expressed the view that the Fourth Amendment protects a wrongdoer's belief that a person to whom he voluntarily confides his wrongdoing will not reveal it."). Defendant Sawyer voluntarily made his files available to all of his "friends" and he also bore the risk that those "friends" might turn the files over to law enforcement. United States v. Meriwether, 917 F.2d 955, 958 (6th Cir.1990) (finding no reasonable expectation of privacy in information sent to pager even though sender did not know Government had pager). The Court, therefore, finds that the Defendant did not have an objectively reasonable expectation of privacy in the information that he shared over GigaTribe and that Agent Couch's activities on the "SB" username did not implicate the Fourth Amendment. See United States v. Haffner, 2010 WL 5296920, at *5-6 (M.D.Fla. Aug. 31, 2010) (finding that a defendant has no legitimate expectation of privacy in messages and images transmitted over internet).
Moreover, even if Defendant Sawyer possessed a privacy interest in the shared files stored on his computer, the Court finds that consent was given to search those files. First, Defendant Sawyer himself directly consented to the February 22 downloads. Simply because the government obtained access to these files through use of a ruse does not render the consent involuntary. Rather, "it is well established that an undercover officer may gain entrance [to a home] by misrepresenting his identity and may gather evidence while there." United States v. Pollard, 215 F.3d 643, 649 (6th Cir.2000). For example, in United States v. Lord, the Sixth Circuit found consent voluntary where government agents posing as real estate investors gained access to an individual's bedroom and bedroom closet. 230 Fed.Appx. 511, 514 (6th Cir.2007). Here, the Defendant freely granted the username "SB," which Agent Couch was using *1357 at the time, access to his files, believing that Couch wanted to download child pornography, even going as far as to discuss previous sexual contact with minors during the download process.[1] [Doc. 23-1.] It is difficult to see how the consent directly given to Agent Couch while using the "SB" account was not made voluntarily.
Second, as to third party consent, the owner of the "SB" account also validly consented to Agent Couch searching the shared folder on Defendant Sawyer's computer. It is well accepted that a third party with authority or control over property subject to a search may grant law enforcement consent to search that property. Morgan, 435 F.3d at 663. For example, a third party with access to a home computer may consent to a police search of the files on that computer. Id. at 664. However, where certain files on the computer are password protected or where the consenting third party otherwise lacks access to them, the third party generally has no authority to consent to a police search of those locked files. United States v. Andrus, 483 F.3d 711, 718-19 (10th Cir.2007); Trulock v. Freeh, 275 F.3d 391, 403 (4th Cir.2001) (finding Fourth Amendment rights were violated where FBI searched password-protected computer files based on his roommate's consent because roommate did not have access to password-protected files); United States v. Trejo, 2010 WL 940036, at *3-11 (E.D.Mich. Mar. 12, 2010) (finding effective third-party consent given to computer search where user had access to files and folders); United States v. Albertson, 2006 WL 3613776, at *4-9 (M.D.Pa. Dec. 11, 2006) (holding third party could consent to search of computer where she had access to computer).
Here, by becoming "friends" with "SB," Defendant Sawyer granted the "SB" username the authority to access any files or folders designated as shared. The owner of the "SB" name then voluntarily consented to Agent Couch using that username to access the shared folders and files on Sawyer's computer. [Doc. 23-3.] It makes little difference that "SB" was granted authority to access and download the files on the computer over the internet, rather than through a grant of physical access to the computer actually storing those files, particularly since Agent Couch only accessed the files remotely over the internet. As such, the Court finds that even if the Defendant has a Fourth Amendment privacy interest in the shared files on his computer, that the user in control of the "SB" gave effective third-party consent to a police search of those shared files.
For the foregoing reasons, the Court DENIES the Defendant's motion to suppress.
IT IS SO ORDERED.
NOTES
[1] This case is easily distinguishable from United States v. Hardin, 539 F.3d 404 (6th Cir.2008). In that case, the Sixth Circuit found that consent was not validly obtained where government agents entered the defendant's apartment while pretending to be maintenance workers who needed to fix a water leak. The consent was not voluntary in that case because the defendant, believing that there was an emergency leak in his apartment, did not have a choice to deny the "maintenance workers" entry. Id. at 425. Here, it is not possible to argue that Defendant Sawyer believed that he had no choice but to allow "SB" to download files of child pornography.
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73 Cal.App.2d 522 (1946)
CLARA BRADLEY, Respondent,
v.
SAMUEL D. DUTY, Appellant.
Civ. No. 15182.
California Court of Appeals. Second Dist., Div. Two.
Mar. 13, 1946.
William H. Brawner and Robert H. Davis for Appellant.
Gladys Towles Root and Eugene V. McPherson for Respondent.
MOORE, P. J.
Respondent sued appellant on three distinct theories in as many causes of action, claiming (1) her right to joint ownership in and title to a parcel of real estate; (2) $750 on account of services rendered at his request; (3) *524 $750 for money had and received by appellant to and for the use of respondent. The court found against her claims alleged in the second and third counts. Respondent evidently acquiesced in such findings, since no mention of them appears in the conclusions of law or in the judgment and no appeal was taken on that account. Remaining for review is the finding in response to the first count that in "April, 1944, plaintiff advanced to defendant Samuel D. Duty the sum of $750 to be expended by said defendant for the purchase of real estate for the benefit of plaintiff and defendant Samuel D. Duty, the title to said property to be in the name of Clara Bradley and Samuel D. Duty as joint tenants."
[1a] Appellant, a single man, resided in the home of respondent from 1928 to April, 1944. She testified that for two years prior to the latter date she had paid $30 a month for rent and food; that the bills ran over $100 a month; that the cost of her support of him was $50 a month; that during those two years they had talked about the purchase of a home and she told him she would pay the household expenses and he should save all of his earnings in order that they could have "a quick down payment"; that she paid the household expenses and he saved his own money. Finally, in April, 1944, without her knowledge he purchased an improved city lot and took conveyance to himself alone. She demanded that the title be placed in the two as joint tenants. He refused but continued to collect $100 monthly rentals. During the two-year period above mentioned she had a bank account in her name and he also had his own bank account. She further testified that they had been partners since 1928 and concluded to buy a home in 1938; that during 1942 and 1943 he paid her only small sums although during much of the time prior to 1942 he was incapacitated by virtue of a foot disease for heart trouble. However, in view of the finding against her claim of his indebtedness to her it must be deemed that his payments were full compensation for her services.
But if she was not fully paid by him for food and lodging prior to the filing of this action it cannot be concluded that he held her money, in the absence of proof that she advanced the $750 to him or of an agreement that he was indebted to her in that sum and that he should invest the same. Where mutual current accounts have run between two parties or one holds a book account against the other it cannot be said that the alleged debtor has in his possession money for *525 the alleged creditor in the absence of an agreement that a definite balance is payable. With the exception of small weekly payments made to her in 1942 and 1943 he deposited his earnings in the bank and purchased war bonds until he had saved a total of $950. With this sum and $50 he had borrowed he paid $1,000 on the purchase price of the property here in dispute. Whereas appellant denied that he owed respondent any sum of money at all, there is no evidence that at any time the parties agreed that he was indebted to her or that he held any amount of money belonging to her. The nearest approach to it was her proof that in the two years prior to April, 1944, he became indebted to her for services performed, to the contrary of which the court found.
Since the uncontradicted testimony of appellant was that he paid $1,000 on the purchase price, the finding that plaintiff advanced $750 of such sum requires explanation. This is found in the fact that after the motion for nonsuit had been at one time denied respondent gained leave to amend her amended complaint by interlineation, whereupon she made the pleading read "that on or about April, 1944, and for an approximation of 16 years prior thereto plaintiff advanced" to defendant the sum of $750 to be expended by him in the purchase of real estate for the benefit of plaintiff and defendant, the title to be in both of their names as joint tenants. However, the amount of money she alleges herself to have advanced becomes immaterial in view of her claim for only a half interest in the lot and improvements.
[2] The judgment is based upon the finding of a resulting trust which is alleged to have arisen from appellant's having received $750 from respondent prior to his receipt of the conveyance of the lot. Notwithstanding such finding she now contends that a constructive trust arose by virtue of his promise and of the provisions of section 2224, Civil Code, which declares that "One who gains a thing by fraud ... the violation of a trust, or other wrongful act, is ... an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it." It is readily seen that the quoted section cannot avail her for the reason that she pleads a resulting trust and the finding adopts her allegation. [3] Moreover, there is no proof of a fraud on the part of appellant. She says that he made a promise to buy a home for them and thereafter breached his agreement. But the mere violation of a contract is not a fraud. (O'Melia v. Adkins, *526 ante, p. 143 [166 P.2d 298]; Bragg v. Bragg, 219 Cal. 715 [28 P.2d 1046].) [4] If appellant's conduct was fraudulent in not keeping a promise and respondent had desired to take advantage of such action, an appropriate remedy was available to which she might have readily resorted and whereby she might have alleged fraud by virtue of his lack of intention to perform his promise. But no such proof was admissible under count one of the complaint herein.
[5] A resulting trust is implied from the facts, and neither written evidence of an agreement nor a fraud on the part of the alleged trustee is essential to its existence. [6] It arises where title of a property is vested in the trustee while the consideration therefor is paid by the beneficiary. (Brown v. Spencer, 163 Cal. 589, 593 [126 P. 493]; O'Rourke v. Skellenger, 169 Cal. 270, 272 [146 P. 633].) Therefore, in view of the allegation of a resulting trust neither respondent's testimony alone nor when supported by other reliable evidence as to the existence of a partnership or of a fraud can avail her in her attempt to establish a constructive trust.
[7] If a resulting trust was created by appellant's investment it arose out of the payment by respondent to him of the $750 at the time of or prior to the purchase of the property. If it did not arise at the very instant the deed was taken by appellant it could not have been created by an agreement between the parties after the conveyance, nor could it have been effected by an agreement made before the transfer. (Lincoln v. Chamberlain, 61 Cal.App. 399, 402 [214 P. 1013].)
[8] Respondent attempts to sustain the judgment by her contention that a constructive trust arose out of appellant's oral agreement that he would save his money and with it purchase a home for them "jointly." Such attempt is frustrated first by the finding of a resulting trust and second by the statute of frauds, which declares that no trust in relation to real property is valid unless declared by a written instrument subscribed by the trustee or unless it is created by operation of law. (Civ. Code, 852.) If all the terms of a trust in real estate must be evidenced by a writing subscribed by the trustee, then no terms can be ascribed to an alleged trust in relation to land by virtue of an oral agreement. Hence the contention that a constructive trust arose by virtue of a "partnership that had existed many years" and that the parties were engaged in a "joint enterprise to acquire enough money to buy a home for them jointly," is defeated by the cited *527 statute. Neither is the fact material that in the two years respondent expended $100 a month for their joint support, for there was no writing whereby appellant agreed in consideration for such support to buy the lot and hold it in trust for her.
[1b] The consideration urged by respondent as the ineradicable support of the trust adjudged is that she served appellant and that for such service he became indebted to her in the amount of $1,200 whereby she acquired a half interest in all of his savings. Her arguments in that behalf are doomed by the findings against both the second and third causes. It follows that if respondent acquired a beneficial interest in the lot such interest must have had its genesis in the oral contract or in the fact that she paid appellant $750 cash in hand with which to make the purchase. Inasmuch as the asserted oral agreement has no more force in proving a trust than if it had never been uttered, and since respondent never paid appellant $750 and he was not indebted to her in any sum prior to his receipt of the conveyance, no part of the $1,000 down payment belonged to respondent and no trust arose in her favor out of the purchase of the home. [9] Where there is no written contract and a party sues to impress a purchase price resulting trust upon real property, the action is founded on the presumption contained in section 853, Civil Code, which declares that under such circumstances "a trust is presumed to result in favor of the person by or for whom such payment is made." (Juranek v. Juranek, 29 Cal.App.2d 276, 280 [84 P.2d 195].)
The judgment is reversed.
McComb, J., and Wilson, J., concurred.
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866 P.2d 703 (1993)
David L. HADERLIE and J.P. Robinson, d/b/a Jack Knife Ranch and Construction, Appellants (Defendants),
v.
James A. SONDGEROTH, Appellee (Plaintiff).
No. 91-114.
Supreme Court of Wyoming.
December 15, 1993.
*705 R. Michael Mullikin (argued) of Mullikin, Larson & Swift, Jackson, for appellants.
Gerald R. Mason (argued) of Mason & Graham, and William H. Twichell (argued), Pinedale, for appellee.
Before MACY, C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, JJ.
CARDINE, Justice.
This was a suit by appellee James Sondgeroth to recover personal injury damages resulting from his automobile striking a horse that had earlier been struck and killed by appellant Haderlie near Bondurant, Wyoming. Two defendants, the owner of the horse and owner of the land where the horse was pastured, had settled prior to trial and were dismissed from the case. Each was on the verdict form and found to be 0 percent at fault. This appeal is from a judgment on the $375,000 jury verdict without credit for the sums paid by the defendants who settled before trial.
We affirm.
Appellants raised the following issues which were presented to the court in the first oral argument:
1. Whether the trial court erred in instructing the jury that David L. Haderlie had a legal duty to take reasonable steps to warn appellee and other motorists, or guard against the danger, of the horse obstructing the highway and in refusing appellants proposed Instructions Nos. 7 and 9.
2. Whether the trial court erred in refusing to admit into evidence the prior pleadings and settlement agreements of appellee which admitted the fault of co-defendants Sleeping Indian Outfitters, Inc. and Paul Anselmi, which co-defendants had settled with appellee, as judicial admissions *706 under Rule 801, W.R.E., and on the issue of damages.
3. Whether the trial court erred in refusing to permit the attorney for appellants to cross-examine the plaintiff with his prior pleadings and with the settlement agreements between appellants and co-defendants, Sleeping Indian Outfitters, Inc. and Paul Anselmi.
4. Whether the trial court erred in refusing to permit the attorney for appellants to advise the jury of the fact of the settlements and the terms thereof, which appellee had made with the former co-defendants, Sleeping Indian Outfitters, Inc. and Paul Anselmi, on the basis of Wyo.Stat. § 1-1-109(b)(i)(B) (1977), which requires the court, when requested, to inform the jury of the consequences of its verdict.
5. Whether the trial court erred in entering judgment for the full amount of the jury verdict without crediting appellants for the aggregate amount received by appellee from the settling co-defendants.
6. Whether the trial court erred in refusing to give the "sudden emergency" instruction proffered by appellants.
7. Whether the verdict of the jury finding appellants one hundred percent (100%) at fault is supported by the evidence. [emphasis in original]
After argument, conference and discussion among the justices, it became apparent that the most significant and critical issue presented was whether the amounts paid appellee by the settling defendants should be credited upon the judgment against appellants Haderlie, et al. Therefore, on February 11, 1993, we ordered additional briefing and argument requiring that
each of the parties shall submit a brief addressing the applicability, if any, of the following: Wyo.Stat. § 1-1-108 (1988); Rambaum v. Swisher, 435 N.W.2d 19 (Minn.1989); and, such other additional authorities as the parties may choose to present. Each party may submit a brief in reply 15 days thereafter. And it is,
FURTHER ORDERED that this matter shall then be set for argument before the Court at its earliest convenience.
Order Directing Additional Briefing and Argument (Feb. 11, 1993).
Facts
On the evening of October 29, 1987, appellant David Haderlie was driving a truck northbound on U.S. 191 near Bondurant, Wyoming. Appellant came upon a dark-colored horse in his lane of traffic. Before he could take evasive action, appellant struck and killed the horse. When appellant struck the horse, the hood of his vehicle flew up. He pulled to the side of the road and discovered that his truck was inoperable. Appellant shut the hood of his truck, turned on his flasher lights, walked to the horse, and discovered that it was dead. He began to walk toward some lights for help when he came upon another pickup truck coming down a side road towards the highway. He informed the group in that truck that he had hit a horse. Appellant and the group then drove to the highway to move the horse from the center of the road.
The group parked on the side of the road, and, while there, another vehicle was approaching where the horse lay. Appellant testified at trial that someone turned the flashers on in the group's pickup and flashed the headlights to warn the approaching vehicle. This testimony, however, was impeached on cross-examination and not corroborated by others in the group. The highway patrol officer testified that one minute and thirty seconds had passed between the time that appellant and the group in the truck had seen the vehicle approaching before it hit the horse.
Appellee James Sondgeroth was driving the approaching vehicle. He noticed a truck pulled over with just the yellow running lights on. Appellee testified that there were no flashing or blinking lights. Appellee passed the pickup, his vehicle struck the dead horse in the road, and he became "air-borne."
Appellee suffered severe injuries in the accident consisting of cervical spine fractures, a dislocation of vertebral bodies with nerve injury, and a severe concussion. Appellee brought suit against: appellant, the driver of the first vehicle; appellant's employer, *707 J.P. Robinson, d/b/a Jack Knife Ranch and Construction (appellants); and Sleeping Indian Outfitters, the owner of the horse. Appellee later amended his complaint to join Paul Anselmi, the owner of the property where Sleeping Indian Outfitters pastured this horse. Sleeping Indian Outfitters and Paul Anselmi settled with appellee before trial and were dismissed from the suit.
Appellee proceeded to trial against appellants. After hearing the evidence, the jury returned its verdict finding fault as follows: appellee 0 percent, appellants David Haderlie and J.P. Robinson d/b/a Jack Knife Ranch and Construction (Haderlie) 100 percent, Paul Anselmi 0 percent, and Sleeping Indian Outfitters 0 percent. The jury found that $375,000 was the amount of damages sustained by appellee and that appellants were liable for 100 percent of the damage.
Appellants challenge the judgment below on several grounds. Their initial primary focus on appeal was directed to whether or not appellants should have been allowed to introduce evidence of the settlements with other defendants that occurred prior to trial. Upon rebriefing and reargument, the primary focus of the appeal has shifted to the issue of credit upon the judgment for payments made by the settling defendants. The parties in their additional briefs filed pursuant to the court's order agreed that the issue presented was clearly stated in issue five above as:
Whether the trial court erred in entering judgment for the full amount of the jury verdict without crediting appellants for the aggregate amount received by appellee from the settling co-defendants.
This is the issue we discuss first.
Entry of Judgment without Settlement Credit
Appellants argue that the trial court erred in entering judgment for the amount of the verdict without first deducting the amount appellee received from Paul Anselmi and Sleeping Indian, the settling defendants.
In this case, prior to trial, appellee settled for the sums shown and dismissed his case against:
(a) Sleeping Indian Outfitter
(horse owner) $195,000
(b) Paul Anselmi (pasture owner) 10,000
________
Total agreed upon settlement $205,000
Thereafter, the case was tried to a jury against appellant David Haderlie and his employer, the only defendants remaining, with the settling participants listed on the verdict form. The jury returned the following verdict:
(a) Sleeping Indian percentage
of fault 0%
(b) Paul Anselmi percentage of
fault 0%
(c) David Haderlie and J.P.
Robinson, dba Jack Knife
Ranch and Construction
percentage of fault 100%
Total damages suffered by
Sondgeroth $375,000[1]
Thus the jury found that the settling defendants owed appellee nothing since they were 0 percent at fault. The settling defendants, in hindsight, paid more than this jury found they owed. Aside from the law (which is clear), the policy question presented is who should receive the benefit of the $205,000 paid by the settling parties. Should it be:
(a) Returned to Anselmi and Sleeping Indian? The parties' settlement agreement does not provide this result.
(b) Should that defendant, who took his chances on trial and who was found 100 percent at fault, receive a $205,000 credit? If he does, he will only pay 45 percent of the judgment rather than the 100 percent found due. If this is the result, tortfeasors will hold off settling to get credit for the payment of others. There will be little incentive to settle.
(c) Should it go to the injured plaintiff? He gambled that the settlement would be rightif it is less, he losesif it is more, he gains.
*708 Prior to 1986, joint tortfeasors were jointly and severally liable for damages payable to an injured party. Thus, all parties liable were jointly obligated for the total damage and each party was individually obligated to pay the total damage. An injured party, not at fault, could recover his entire judgment (100 percent) from a five percent negligent party. With joint and several liability, there was the right of contribution among tortfeasors found in W.S. 1-1-110(b) (1977), which provided:
(b) The right of contribution exists only in favor of a tortfeasor who has paid more than his pro rata share of the common liability, and his total recovery is limited to the amount paid by him in excess of his pro rata share. No tortfeasor is compelled to make contribution beyond his own pro rata share of the entire liability.
The five percent negligent party, having paid 100 percent of the judgment, then had a right of contribution under W.S. 1-1-110(b) and could recover from the 95 percent negligent party the 95 percent of the judgment paid by the five percent party.
In 1986, the Wyoming legislature abolished joint and several liability by amending W.S. 1-1-109 to provide that a party at fault be required to pay for only his proportionate share of the faultin the above example, five percent. At the same time, W.S. 1-1-110(b) providing for contribution among tortfeasors was repealed. Wyoming Statute 1-1-109, as now amended, provides in pertinent part:
(d) Each defendant is liable only for that proportion of the total dollar amount determined as damages under paragraph (b)(i) or (ii) of this section in the percentage of the amount of fault attributed to him under paragraph (b)(i) or (ii) of this section. [emphasis added]
and § 1-1-109(b)(i) and (ii) provides:
(b) The court may, and when requested by any party shall:
(i) If a jury trial:
(A) Direct the jury to find separate verdicts determining the total amount of damages and the percentage of fault attributable to each actor whether or not a party; and
(B) Inform the jury of the consequences of its determination of the percentage of fault.
(ii) If a trial before the court without jury, make special findings of fact, determining the total amount of damages and the percentage of fault attributable to each actor whether or not a party.
By repeal of W.S. 1-1-110(b), the legislature has clearly and unambiguously stated that appellants may not have help paying this judgment by way of contribution from other tortfeasors. If help in paying the judgment is not available by way of contribution, consistency would demand that such help be unavailable by way of a credit upon the judgment. Whether called contribution or credit, we speak of the same thing, i.e., someone else paying part of the judgment.
With the amendment of W.S. 1-1-109(d), W.S. 1-1-110(b) providing for contribution was repealed and for good reason, for after joint and several liability was abolished, no tortfeasor would ever pay more than his proportionate share of a judgment. Thus, there would never be a need for contribution or for credit upon a judgment. Credit would not be given because the amount of judgment for which each defendant is liable is always limited by the percentage of fault assigned to that defendant. Therefore, as a matter of law, Haderlie can have no credit upon the judgment for sums paid by others because Haderlie, if and when he pays 100 percent of this judgment, will not pay more than the "percentage of the amount of fault attributed to him" by the jury in its verdict finding him 100 percent at fault.
The cases we cite to support our conclusion are the only cases that treat the situation existing after repeal of joint and several liability. These cases are the better reasoned and the developing majority in states like Wyoming that have abolished joint and several liability. Of necessity and as a matter of law, they differ substantially from states still retaining joint and several liability and contribution among tortfeasors. A recent Arizona case is nearly identical to this case. See Roland v. Bernstein, 171 Ariz. 96, 828 P.2d *709 1237 (App.1991) (review denied May 5, 1992). This Arizona court reaches a result identical to that reached by us. In Roland, the plaintiff sued a neurosurgeon, an anesthesiologist, and the hospital. The anesthesiologist and the hospital settled for $700,000 each. Roland, 828 P.2d at 1238. The neurosurgeon and his professional corporation remained in the case for trial. The jury awarded $1,965,000 damages and apportioned fault as follows: neurosurgeon 47 percent; anesthesiologist 28 percent; and the hospital 25 percent. Id. The trial court allowed the neurosurgeon to reduce the total judgment by the amount of the prior settlements. Thus, the trial court subtracted from $1,965,000 (the judgment) $1,400,000 (the settlement) and entered judgment for $565,000 instead of $923,550 (47 percent of the $1,965,000). The Arizona Court of Appeals reversed the trial court, and the Arizona Supreme Court denied review. Id.
Roland was tried under a recent Arizona statute in which the Arizona legislature, as did the Wyoming legislature, abolished joint and several liability and limited recovery against any defendant to that percentage of the plaintiff's damages representing that defendant's degree of fault. Id., citing A.R.S. § 12-2506. The court stated that under the new statute, there is no contribution because "each defendant is liable only for the portion of the injury he caused, not the whole injury; no two are liable for the same injury." Roland, 828 P.2d at 1239 (citing Kussman v. City and County of Denver, 706 P.2d 776 (Colo.1985)). The rationale of the court of appeals is persuasive:
[W]e believe that it would be anomalous to give the benefit of an advantageous settlement, not to the plaintiff who negotiated it, but to the nonsettling tortfeasor. Had plaintiff made a disadvantageous settlement, she would have borne that consequence because her recovery against [the neurosurgeon] would have been limited to $923,550. At a minimum, symmetry requires that if the disadvantage of settlement is hers so ought the advantage be. Beyond that, we see no reason why a nonsettling tortfeasor ought to escape the liability that is his by reason of the faulty assessment of probabilities by a settling tortfeasor. Indeed, such a rule might well discourage settlement by the last tortfeasor on the reasoning that his exposure is limited to his degree of fault and even that might be reduced by reason of preexisting settlements. These considerations have led most courts considering this question to apply the rule we are adopting.
Roland, 828 P.2d at 1239.
We have acknowledged that guidance in interpreting the Wyoming legislation can be found in court decisions from states which have, like Wyoming, based their statute on Wisconsin's. Board of County Comm'rs v. Ridenour, 623 P.2d 1174, 1190 (Wyo.1981). Minnesota's comparative negligence statute was adopted from Wisconsin's. Id., see also Ferguson v. Northern States Power Co., 307 Minn. 26, 239 N.W.2d 190, 196 (1976).
Minnesota faced a similar argument, that credit for settlements with other defendants should be given for the benefit of the nonsettling defendant. While Minnesota has adopted Wisconsin's basic comparative negligence scheme, it has not, as in Wyoming, abolished joint and several liability. Minn. Stat.Ann. § 604.02 (West Cum.Supp.1991). Instead, Minnesota allows the use of a Pierringer release which allows a joint tortfeasor under joint and several liability to settle for his share "without fear that the nonsettling defendant will later have a contribution claim against him[.]" Shantz v. Richview, Inc., 311 N.W.2d 155, 156 (Minn.1980).
When settlement is pursuant to a Pierringer release, Minnesota has held that a nonsettling defendant is not entitled to credit the amount of settlement from settling defendants against the judgment he must pay. The situation is thus analogous to our case. The Minnesota Supreme Court has said, "we believe it would be inequitable to allow defendant, the nonsettling party, to profit from a settlement agreement between plaintiff and third-party defendant." Shantz, 311 N.W.2d at 156. The rationale followed by the Minnesota Supreme Court is relevant here. The Minnesota Supreme Court has said:
In this case, the settling parties misgauged what the jury's verdict would be and O'Neill's Bar paid "too much" for its *710 release. This observation, however, is as idle as most hindsight pronouncements. Judged as of the time the settlement was made, weighing the risks as then understood, the settlement amount was "just right." In accepting the settlement payment, the plaintiff accepted the likelihood of being under-compensated as well as being over-compensated. If the jury had determined the amount of the O'Neill's Bar fair share at more than O'Neill paid for its release, the Croatian Club, as the nonsettling defendant, would have been relieved of the obligation of making up the difference. * * * [I]f subsequent events sometimes result in a so-called "windfall" for plaintiff, that result is acceptable within the context of the law's strong policy to encourage settlement of disputes. * * * The nonsettling defendant, hoping the jury would provide a "windfall" which would work to its advantage, would also have a further reason for not settling its own liability exposure.
Rambaum v. Swisher, 435 N.W.2d 19, 23 (Minn.1989). See also Thurston v. 3K Kamper Ko., Inc., 482 A.2d 837, 842 (Me.1984).
The policy choice is clear. Appellants are liable for 100 percent of the verdict. The jury said so. Appellants are asked to pay that amount, no more. Appellee's contractual settlements with others is not appellants' concern. Common sense, logic and justice tells us that if the injured party must suffer the loss that might result from settlement, he should benefit from the gain. This is the result mandated by law. It is the best result. We hold that entry of the judgment without credit for the payments of the settling parties was proper and in accord with the jury's verdict and Wyoming law.
Does W.S. 1-1-108 Provide Credit?
The singular question next presented results from an issue we raised and upon which we requested additional briefing and heard argument. It is, does W.S. 1-1-108 (1988) provide for a credit to a party upon a judgment for payments made by another in settlement of the claim of an injured person?
Section 1-1-108 provides as follows:
1-1-108. Voluntary partial payment of liability claims.
No voluntary partial payment of a claim based on alleged liability for injury or property damage shall be construed as an admission of fault or liability, or as a waiver or release of claim by the person receiving payment. Such payment is not admissible as evidence in any action for the purpose of determining the amount of any judgment, with respect to the parties to the occurrence from which the claim arose. Upon settlement of the claim, the parties may make any agreement they desire in respect to all voluntary partial payments. After entry of judgment, any such payment shall be treated as a credit and deducted from the amount of the judgment. If after partial voluntary payments are made it is determined by final judgment of a court of competent jurisdiction that the payor is liable for an amount less than the voluntary payments already made, the payor has no right of action for the recovery of amounts by which the voluntary payments exceed the final judgment. No voluntary partial payments shall be construed to reduce the amount of damages which may be pleaded and proved in a court proceeding between the parties. [emphasis added]
It is with some considerable reluctance that we undertake resolution of the right to credit under W.S. 1-1-108, for perhaps it is no longer an issue presented to us by the parties. Appellants, who would benefit from a credit provided by W.S. 1-1-108, stated candidly in oral argument that they could not in good conscience argue that § 1-1-108 provided credit upon the judgment for payment by Sleeping Indian and Anselmi and, in his brief, stated: "Appellants do not contend that Section 1-1-108 of the Wyoming Statutes applies to the payments made by the settling defendants." Appellee also forcefully asserts that W.S. 1-1-108 does not provide credit to appellants upon the judgment for payments by Sleeping Indian and Anselmi. We could stop here, but failure to resolve the issue would be a disservice to citizens and the bar of Wyoming.
*711 Before W.S. 1-1-108 became an issue in this case, practitioners in the tort field generally accepted § 1-1-108 as providing a means for a potentially liable defendant or his insurance carrier to pay medical bills and other damages immediately after an injury and during recovery without the necessity of the injured party filing a legal action. The statute is beneficial to an injured party who can receive partial payments of medical bills, lost earnings and other loss promptly without using his own funds, borrowing, or facing bankruptcy for large medical expense he is unable to pay. It is beneficial to the potentially liable party who can aid the injured person during recovery, act reasonably, maintain good relations with the injured person, and perhaps settle the claim, avoiding the substantial cost and expense of litigation and trial. Thus, W.S. 1-1-108, when it uses the plural "parties," clearly refers only to the injured party and the "payor" settling party. There is not a reference or a hint of reference in the language of W.S. 1-1-108 that it also establishes rights of third parties who are not payors and have given nothing to the injured party. The statute then protects the party paying (payor) by providing a credit for all payments and prohibiting use of voluntary payment to establish liability. It protects the injured party in allowing litigation if settlement is not achieved.
Yet we must concede that the following language in the statute, "[a]fter entry of judgment, any such payment shall be treated as a credit and deducted from the amount of the judgment," taken out of context, can have two meanings. The credit might be available only to the party paying (payor), or credit "deducted from the amount of the judgment" may refer to any judgment against any other person. If we accept the claim of two possible interpretations, the statute is ambiguous, and we must proceed to ascertain the intent of the legislature in its enactment. Our rules of statutory interpretation and construction are well established.
In interpreting statutes, if the statutory language is clear and unambiguous, we must abide by the plain meaning of the statute. Adobe Oil & Gas Corporation v. Getter Trucking, Inc., Wyo., 676 P.2d 560 (1984). If a statute is ambiguous, however, we will resort to general principles of statutory construction in the effort to ascertain legislative intent. State v. Sodergren, Wyo., 686 P.2d 521 (1984). A statute which is uncertain and susceptible of more than one meaning is ambiguous. McArtor v. State, Wyo., 699 P.2d 288 (1985). In addition, we have said that "[s]tatutes should be given a reasonable, practical construction." State Board of Equalization v. Cheyenne Newspapers, Inc., Wyo., 611 P.2d 805, 809 (1980). Further, "all portions of an act must be read in pari materia, and every word, clause and sentence of it must be considered so that no part will be inoperative or superfluous," Hamlin v. Transcon Lines, Wyo., 701 P.2d 1139, 1142 (1985), and a statute should not be construed to render any portion of it meaningless, Reliance Ins. Co. v. Chevron U.S.A. Inc., Wyo., 713 P.2d 766 (1986), or in a manner producing absurd results, State v. Sodergren, supra.
Story v. State, 755 P.2d 228, 231 (Wyo.1988).
First, W.S. 1-1-108 discloses an intent to encourage partial voluntary payments by potential tortfeasors to injured persons as a positive step toward settlement of the claim. The statute provides for protection of the parties' interests in that making partial payments and negotiations resulting in such partial payments (a) are not to be construed as an admission of fault; (b) are not admissible as evidence in any action for the purpose of determining the amount of any judgment; and (c) such payments are treated as credits if a larger judgment is entered. A strong public policy has always existed in Wyoming favoring settlement of litigation. Coulter, Inc. v. Allen, 624 P.2d 1199, 1202-03 (Wyo. 1981); Hursh Agency, Inc. v. Wigwam Homes, Inc., 664 P.2d 27 (Wyo.1983).
Next, the statute, in providing that partial payments are not admissible in evidence for the purpose of determining the amount of judgment, surely would refer to a judgment against the payor and evidences a legislative intent that credit only belongs to a defendant who makes the voluntary partial payment. Other defendants would have no need to be protected from the use of the *712 voluntary payment in determining the amount of the judgment. Indeed other defendants might want to use evidence of such payments to shift liability and fault to codefendants.
The next clear indication of legislative intent that this statute applies only between a party paying and a party being paid is found in the language dealing with voluntary payments that are less than the amount of the judgment and voluntary payments which exceed the amount of the judgment. If the voluntary payments are less than the amount of the judgment, clearly it is the payor who is entitled to credit for his payments. And if the amount of the judgment is less than the voluntary payments, it is the payor who is clearly identified as having no right of credit or recovery back. Thus, W.S. 1-1-108 specifically states:
If after partial voluntary payments are made it is determined by final judgment of a court of competent jurisdiction that the payor is liable for an amount less than the voluntary payments already made, the payor has no right of action for the recovery of amounts by which the voluntary payments exceed the final judgment. [emphasis added]
The specific use of the term "payor" suggests that, throughout the statute, reference to parties is a reference to payors, i.e., parties paying, and refers to the amount of a judgment entered against a "payor." The "payor" under the statute must remain in the case for there to be a judgment against him, and it would be strange indeed if his voluntary payment was credited against the total judgment and not first against his portion thereof. Thus, the clear legislative intent is that the voluntary payments accrue only to the benefit or detriment of the payor of voluntary payments. The statute makes no mention of third parties who pay nothing as being either benefitted or harmed by the party paying and the injured party.
The statute specifically provides that the person who made the voluntary payments (payor) cannot recover the excess amount of the payments (surely a windfall to the injured party). It stretches credulity to even suggest that, in spite of a prohibition against getting back an overpayment of total damage, it would be proper for other defendants, who chose not to make any such payments, to be able to recover the same sum by means of a deduction "from the amount of the judgment."
The statute, when read in its entirety and in view of its purpose, demonstrates a clear legislative intent that credit for voluntary payments be made only against the amount of the judgment entered against a "payor."
Introduction of Pleadings or Settlement Agreements As "Judicial Admissions"
Objections to appellants' offer into evidence of the pleadings and settlement agreements of Anselmi and Sleeping Indian Outfitters were sustained. These documents were offered in an apparent attempt to establish negligence on the part of Anselmi and Sleeping Indian Outfitters. Appellants argue that the trial court should have admitted prior pleadings and settlement agreements as "judicial admissions." The admission of evidence at trial is within the sound discretion of the trial court and evidentiary rulings will not be disturbed absent an abuse of discretion. Waggoner v. General Motors Corp., 771 P.2d 1195, 1200 (Wyo.1989); L.U. Sheep Co. v. Bd. of County Comm'rs, 790 P.2d 663, 673 (Wyo.1990).
W.R.E. 408 provides:
Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. [emphasis added]
*713 Thus, under W.R.E. 408, evidence concerning settlements "is not admissible to prove liability." "Rule 408 is founded on public policy to encourage out of court settlements and is in the nature of a privilege." Coulter, Inc. v. Allen, 624 P.2d at 1202 (citing the Advisory Committee Note to Fed.R.Evid. 408). The "evidence of an offer to compromise is irrelevant since it may be motivated by a desire for peace, rather than any concession of weakness." Hursh Agency, Inc. v. Wigwam Homes, Inc., 664 P.2d at 36. See also McInnis v. A.M.F., Inc., 765 F.2d 240, 84 A.L.R.Fed. 259 (1st Cir.1985) (citing Advisory Committee Note to Fed.R.Evid. 408). The policy reasons for excluding settlement negotiations are so strong that courts have said "[g]enerally, statements regarding settlement negotiations are considered to be highly prejudicial and are typically sufficient grounds for a mistrial." Georgia Casualty and Sur. Co. v. White, 582 So.2d 487, 494 (Ala.1991). New trials are often granted where evidence of settlement was admitted. See McInnis, 765 F.2d at 246.
Although W.R.E. 408 does allow evidence of settlement to be admitted if not offered to prove liability, this exception should be used sparingly, with due care. Weinstein's Evidence notes:
[c]are should be taken that an indiscriminate and mechanistic application of this "exception" to Rule 408 does not result in undermining the rule's public policy objective. The almost unavoidable impact of the disclosure of such evidence is that the jury will consider the offer or agreement as evidence of a concession of liability. * * * The trial judge should weigh the need for such evidence against the potentiality of discouraging future settlement negotiations.
2 J. Weinstein, Weinstein's Evidence ¶ 408[05] at 408-31 (1991). Because of the potential prejudice "when the issue is doubtful, the better practice is to exclude evidence of compromises or compromise offers." Bradbury v. Phillips Petroleum Co., 815 F.2d 1356, 1364 (10th Cir.1987).
Appellants contend that the agreements should have been admitted for the jury to correctly apportion fault among the settling and nonsettling defendants. The admission would have been highly prejudicial. The settlement agreements are not evidence of negligence or fault, yet the jury could have interpreted the settlement agreements as an admission of fault of a party not at fault at all. Further, were we to approve the admission of these settlement agreements, there would be a very real risk that parties would be deterred from settling future cases because of a fear that their agreement would be received in evidence and become public knowledge, thereby compromising goals in settling, i.e., not admitting liability in exchange for peace and plaintiff not having liability established detrimental to the continuing case against nonsettling defendants. Thus, attempts at settlement would be chilled. Appellants fail to articulate an acceptable reason for admitting the settlement agreements other than proving liability which is impermissible under W.R.E. 408.
Next appellants contend that they should have been allowed to introduce appellee's original complaint and pleadings which contained the settling defendants as parties. Appellants argue that the pleadings constitute "judicial admissions" that Sleeping Indian Outfitters, Inc. and Paul Anselmi were at fault and should have been admitted under W.R.E. 801(d)(2)(C). W.R.E. 801 relates to hearsay. W.R.E. 801(d)(2)(C) provides:
(d) Statements which are not hearsay.A statement is not hearsay if:
* * * * * *
(2) Admission by Party-Opponent.The statement is offered against a party and is * * * (C) a statement by a person authorized by him to make a statement concerning the subject[.]
Appellee alleged negligence on the part of Anselmi and Sleeping Indian Outfitters in the amended complaint. After settlement, the complaint was again amended to allege negligence only of appellants. Under W.R.C.P. 8[2] a party "may also state as many separate claims or defenses as he has regardless *714 of consistency[.]" W.R.C.P. 8(e)(2). Therefore, it was proper for appellee to include Sleeping Indian and Anselmi in the original complaint and later amend the complaint to eliminate claimed negligence on their part. Appellee took advantage of the liberal modern pleading rules and pled in the alternative.
Appellants cite Louisell and Mueller stating that "pleadings, answers to interrogatories, and responses to requests for admissions filed on behalf of a party in a civil action generally qualify as admissions by the party." 4 D. Louisell & C. Mueller, § 425, p. 302 (1980 and 1992 Supp.). Although appellants quote Louisell and Mueller, they fail to recognize limitations placed upon the introduction of pleadings. W.R.C.P. 8 allows parties to plead hypothetically, inconsistently, and in the alternative. Therefore, when an inconsistency in pleading is present because of the liberal modern pleading rules, use of "the pleading as an evidential admission should be disallowed." Louisell and Mueller at p. 306.
In a products liability case, the defendant attempted to introduce statements made by the plaintiff in his complaint as judicial admissions. Whatley v. Armstrong World Indus., Inc., 861 F.2d 837, 839 (5th Cir.1988). The Fifth Circuit Court of Appeals found that reliance on the pleadings was not proper because the pleadings "provide little real evidence of the liability of the settling defendants, [and] they provide no evidence upon which a jury could determine the percentage or extent of liability[.]" Whatley, 861 F.2d at 839. This argument against admitting pleadings is especially applicable here because the trial court found that the pleadings were in the alternative, were not admissions, and had no probative value. Furthermore, the appellants' attempts to introduce the pleadings into evidence were in reality an attempt to allude to the settlement agreements which were inadmissible. The trial court properly refused admission of the settlement agreements and pleadings.
Use of Settlement Agreements For Impeachment in Cross-Examination
Appellants next claim that they should have been allowed to use the pleadings and the settlement agreements to cross-examine appellee. The trial court ruled that use of the settlement agreements in cross-examination of appellee was not permissible under W.R.E. 403 because the risk of prejudice in introducing the settlement agreements outweighed their probative value. We leave evidentiary rulings to the discretion of the trial judge, reviewing only whether there has been a clear abuse of that discretion. Waggoner, 771 P.2d at 1200. Appellants have not identified a clear abuse of discretion. The trial court properly served the policy behind both W.R.E. 408 and 403 by ruling that the settlement agreements were not available for impeachment during the cross-examination of appellee.
Appellants concede this issue in their reply brief. They admit they should not contest the trial court's decision to deny cross-examination of appellee with the settlement agreements because they are not appealing the damage award portion of the verdict. After this significant concession, however, appellants argue that "there were numerous other opportunities during the trial for cross-examination with respect to the pleadings." Appellants do not support this claim with examples in the record where such cross-examination would have been appropriate. They do not advance cogent argument but, rather, unsupported assertion. This court will not review incomplete assertions. Arguments must be reasoned, supported, and refer to the record. As we have said before "[t]his perfunctory argument does not rise to the level of cogent argument supported by pertinent authority, which we have stated many times is a requirement for consideration by this court." Weisbrod v. Ely, 767 P.2d 171, 176 (Wyo.1989) (citing Kipp v. Brown, 750 P.2d 1338 (Wyo.1988)).
Advice to Jury Regarding Consequences of its Verdict Under Section 109
Appellants claim that the trial court should have informed the jury of the facts surrounding *715 the claim and settlement and the amount of the settlement with Anselmi and Sleeping Indian Outfitters to satisfy its obligation to inform the jury of "the consequences of its determination of the percentage of fault" as required by W.S. 1-1-109(b)(i)(B) (1988).
The phrase in our statute which requires the judge to "[i]nform the jury of the consequences of its determination of the percentage of fault" is atypical. It is not found in states which have a similar comparative negligence statute. See Wis.Stat.Ann. § 895.045 (West 1983); Mont.Code Ann. § 27-1-702 (1991); Okla.Stat.Ann. Tit. 23, § 13 (West 1987); Minn.Stat.Ann. § 604.01 (West 1991); N.D.Cent.Code § 9-10-07 (1987).
Wyoming Statute 1-1-109(b)(i)(B) provides:
The court may, and when requested by any party shall:
* * * * * *
Inform the jury of the consequences of its determination of the percentage of fault.
The trial court gave the following instruction to the jury:
INSTRUCTION NO. 7
The case must be determined on the basis of comparative fault of the parties involved in the occurrence. * * *
* * * * * *
It will be necessary for you to determine the percentage of fault, if any, of each of the parties involved in the occurrence. It also will be necessary for you to determine the amount of damages sustained [by] the plaintiff.
Your findings as to fault will affect the plaintiff's recovery. It is my duty to explain how that may occur.
First, should you determine that if the plaintiff's fault exceeds fifty percent, the plaintiff will not be entitled to recover any damages.
Second, the defendant's liability for damages is limited by the percentage of fault which you determine is attributable to him and he will only be liable to pay that percentage of the total damages.
In explaining the consequences of your verdict, the court has not meant to imply that any of the parties are at fault. That is for you to decide in conformity with these instructions. [emphasis added]
Appellants did not object to Instruction No. 7. W.R.C.P. 51[3] provided in part:
At the close of the evidence, or at such earlier time as the court reasonably directs, any party may file written requests that the court instruct the jury on the law as set forth in the requests. A direction by the court that requests be filed prior to the close of the evidence shall not preclude any party from filing any subsequent request necessitated by the evidence and not reasonably anticipated by the party prior to the time of filing. Before the argument of the case to the jury is begun, the court shall give to the jury such instructions on the law as may be necessary and same shall be in writing, numbered and signed by the judge, and shall be taken by the jury when it retires. No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection. Opportunity shall be given to make any such objection out of the hearing of the jury. [emphasis added]
The purpose of W.R.C.P. 51 is to provide the trial court with an opportunity to correct any potential error by requiring that objections be made before the instructions are given to the jury. Goggins v. Harwood, 704 P.2d 1282, 1289 (Wyo.1985).
Appellants did present a motion before trial that the trial court instruct the jury concerning the settling defendants on the grounds that the jury was entitled to know the consequences of its determination as to the percentage of fault. Appellants' motion was not presented at the close of evidence, per W.R.C.P. 51, nor did appellants object to Instruction No. 7. The motion, therefore, did not satisfy the requirement of W.R.C.P. *716 51 and did not adequately make the trial court aware of a potential error in sufficient time to be corrected. The procedural problem with making the objection in the form of a motion preceding the instruction conference, rather than an objection at the instruction conference, is made obvious in this record. We are unable to locate a ruling on this particular motion. Perhaps the trial court considered this motion to be similar to one previously ruled on and therefore assumed it was implicitly denied. Appellants did not request a ruling from the trial court. They may have assumed it had been previously ruled upon as well. The loss of continuity in the handling of this motion makes clear that a motion for a jury instruction cannot take the place of presentation of an alternative instruction or an objection at the instruction conference.
Even if appellants had not failed procedurally in their opposition to Instruction No. 7, their argument would fail substantively. We hold that Instruction No. 7 was properly given and accurately informed the jury of the consequences of its determination of the percentage of fault as required by W.S. 1-1-109(b)(i)(B).
Appellants' disagreement with the instruction centers on their interpretation of "consequences of its determination of the percentage of fault" in W.S. 1-1-109(b)(i)(B). Under appellants' interpretation, this phrase would encompass informing the jury of the fact and amount of settlement with other entities no longer parties to the litigation. This statutory language has been interpreted in practice as requiring only that the jury be told that if the plaintiff's percentage of negligence is more than 50 percent, the plaintiff will not recover and that a defendant who is liable will only pay in proportion to his percentage of fault. See Wyoming Civil Pattern Jury Instructions 10.01A, 10.03A (1988). Instruction No. 7 is nearly identical to Instruction Nos. 10.01A and 10.03A of the Wyoming Civil Pattern Jury Instructions.
In Coryell v. Town of Pinedale, 745 P.2d 883 (Wyo.1987), we held that the language allows the trial court to inform the jury of the consequences of its verdict by giving an instruction on the law of joint and several liability as affected by percentages of negligence. Coryell, 745 P.2d at 886. In Harmon v. Town of Afton, 745 P.2d 889 (Wyo. 1987), we followed our previous Coryell interpretation of the phrase in Section 114.
Harmon and Coryell were decided under the 1977 version of W.S. 1-1-109 and 1-1-114. Harmon, 745 P.2d at 892. In 1986 the legislature eliminated the doctrine of joint and several liability and substituted a provision that "each defendant is liable only to the extent of his percentage of fault as compared to all other actors whether or not parties to the action." Joint LiabilityRepeal, 1986 Wyo.Sess. Laws ch. 24.
In Harmon and Coryell we viewed this phrase as a part of the joint and several liability scheme about which the court should inform the jury. The same reasons for allowing the court to inform the jury of the effect of joint and several liability exist for informing the jury of the effect of a defendant's percentage of negligence under the amended comparative fault scheme.
The jury is to be informed of the consequences of its determination of the plaintiff's percentage of fault, defendant's and other actors' percentages of fault, only in the context of explaining that the court will reduce the amount of damages by the percentage of fault attributed to the plaintiff and that each defendant is liable only for the proportion of total damages determined by the percentage of fault attributed to that defendant. Informing the jury of those consequences is all that the phrase encompasses. In cases in which the jury will determine percentage of negligence of several persons, some parties and some not, care should be exercised to assure that the jury is not left with the impression that plaintiff has, has not, or will not recover from persons not parties to the case before them. This is in accord with W.R.E. 408. If a better public policy would be to inform the jury of more concerning settling defendants, then that ought to be accomplished by amendment to the Wyoming Rules of Evidence or by legislative enactment.
*717 Appellee's Remark in Closing Argument
In closing argument appellee argued:
no matter how much you find the damages to be, he will recover only the amount that you attribute to the Defendants. Amounts that you attribute to anybody else, to Crittenden or to Anselmi or to Sleeping Indian, he recovers none of that.
Appellants argue that this remark was prejudicial and, as a result, the jury did not accurately understand the consequences of its verdict. No objection was made to this argument at trial. This court has held "improper argument of counsel cannot be raised or urged for reversal in the absence of an objection." Coryell, 745 P.2d at 886, quoting Joly v. Safeway Stores, Inc., 502 P.2d 362, 364 (Wyo.1972).
The remark made by appellee at trial was an attempt to explain Instruction No. 7. However, appellee went beyond what was contained in Instruction No. 7 and arguably hinted that appellee can be compensated for his injuries only by appellants. It is true that he can recover compensation in this lawsuit only from appellants. It is not true that he cannot recover from others in another case or has not recovered compensation. This remark was improper, and appellee's counsel should not have made it. If counsel persists in this type of argument, the opposing party, upon timely objection, should be permitted to respond. However, there was no objection here and no effort by appellants to respond in argument. Also, appellants have not demonstrated that this single remark resulted in substantial prejudice to their case. The instructions given did accurately instruct the jury on the law. One sentence in a closing argument in all likelihood escaped the notice of the jury, and since they had the correct law in hand in the form of Instruction No. 7, there was no prejudice. We presume the jury followed the instructions and not a single sentence spoken in closing argument. In addition, Instruction No. 8 required the jury to determine the percentage of fault attributable to Sleeping Indian or Paul Anselmi even though they did not appear or offer evidence. The settling defendants' names appeared on the verdict form. Appellants were afforded the opportunity to argue their negligence. Thus, there was no prejudicial error in the argument.
Jury Instructions
Appellants tendered the following proposed instructions in relevant part:
PROPOSED INSTRUCTION NO. [7]
[T]he Plaintiff has the burden of proving by a preponderance of the evidence:
1. That, following the time he struck the horse, Defendant David L. Haderlie breached a duty owed to Plaintiff and was, thereby, negligent;
2. That Defendant Haderlie, by his negligence, increased the risk of harm to which Plaintiff and other motorists were subject after he struck the horse;
3. That the negligence of Defendant David L. Haderlie was a proximate cause of injury and damage to the Plaintiff * * *.
INSTRUCTION NO. [9]
At the time and place of the accident, Plaintiff James Sondgeroth had a duty to operate his vehicle with ordinary care and to maintain a proper look out as that term is defined to you in other instructions.
At the time and place of the accident, after David L. Haderlie struck the horse, pursuant to Wyoming Statute, he had the following duty:
The driver of any vehicle which collides with or is involved in an accident with any vehicle or other property which is unattended resulting in any damage to the other vehicle or other property shall immediately stop and shall immediately either locate and notify the operator or owner of the vehicle or other property of his name, address and the registration number of the vehicle he is driving or shall attach securely in a conspicuous place in or on the vehicle or other property a written notice giving his name, address and the registration number of the vehicle he is driving. Every stop shall be made without obstructing traffic more than is necessary.
*718 David L. Haderlie had no duty to warn James Sondgeroth of the condition which existed on the highway following his non-negligent striking of the horse. However, if you find that David L. Haderlie attempted to come to the aid of James Sondgeroth and other motorists, he had only a duty to not increase the risk of harm to which James Sondgeroth and other motorists were subject following his striking of the horse.
The trial court refused both instructions. This court has consistently recognized that "a party is entitled to have a jury instruction upon its theory of the case but only if such theory is supported by competent evidence." Bigley v. Craven, 769 P.2d 892, 894 (Wyo.1989), quoting Short v. Spring Creek Ranch, Inc., 731 P.2d 1195, 1199 (Wyo. 1987). We find that the evidence in this case did not support the theory under which appellants offered either instruction and they were thus properly refused by the trial court.
With proposed Instruction No. 7, appellants were attempting to instruct the jury on the standard of care owed by a volunteer who comes across a dangerous situation. Appellants cited Ellsworth Bros., Inc. v. Crook, 406 P.2d 520 (Wyo.1965). However, the circumstances in Ellsworth which invoked a volunteer standard of care were not present here. In Ellsworth, Crook saw the cattle on the road and was "herding them back to the owner's property[.]" Ellsworth, 406 P.2d at 523. Crook moved the cattle as a volunteer and unlike Haderlie did not have a duty to do so because he was not involved in creating the danger. Therefore, we find that appellants' proposed Instruction No. 7 was properly refused.
Instruction No. 9 was based on the statutory duty of a driver in an accident as found in W.S. XX-X-XXXX (1989). The trial court rejected proposed Instruction No. 9 stating "[t]he statutory section cited pertains to striking an unattended vehicle or property, and it relates to the driver's duty to the owner of that vehicle or property and does not relate to the duty [to] other motorists. It is inapplicable, for those reasons, and is not being given." The trial court's refusal of both proposed instructions was not error.
Appellants also contend that the trial court erred in refusing to give the following "sudden emergency" instruction which appellants offered:
Where a person finds himself or herself confronted with a sudden emergency, which was not brought on about his or her own negligence or want of care, such person has a legal right to do what appears to him or her at the time he or she should do, so long as he or she acts in a reasonable manner as any other person would have done under like or similar circumstances, to avoid an injury; and if he or she does so act, he or she will not be deemed to have been negligent even though it might afterwards be apparent that some other course of action would have been safer.
The trial court refused the instruction and reasoned that:
This Court does not deem that there has been any evidence of a sudden emergency. That's more applicable to a driver's suddenly finding someone in his own lane, or a spot of ice that he's onto, or something very immediate. In this case, there was an attenuation of approximately ten minutes of time from the time that Mr. Haderlie struck the horse until the Plaintiff struck the horse; and the Court does not deem that to be a sudden emergency.
The trial court's reasoning is logical and supported by this court's case law. See Holly Sugar Corp. v. Perez, 508 P.2d 595, 601 (Wyo.1973). Mr. Haderlie knew of the dangerous condition for a period of time, at least a minute and a half, before the second accident which negates any showing that an unknown or unforeseen condition arose unexpectedly. Holly Sugar, 508 P.2d at 601. All three instructions were properly refused because they were not adequately supported by the evidence or the law, and the ruling of the trial court was correct.
Percentage of Fault was Supported by the Evidence
Appellants contend that the jury verdict finding appellants 100 percent at fault was not supported by the evidence. We begin our examination of their contention *719 with our standard of review for fact findings of a jury:
We assume the evidence in favor of the successful party to be true, leaving out of consideration entirely the evidence in conflict, and assigning every favorable inference to the evidence of the successful party that can be reasonably and fairly drawn from it. In addition, when reviewing a jury verdict, we leave to the jury the duty of ascertaining the facts, reconciling conflicts therein and drawing its own inferences if more than one inference is permissible.
Woodbury v. Nichols, 797 P.2d 556, 558 (Wyo.1990), quoting Crown Cork & Seal Co., Inc. v. Admiral Beverage Corp., 638 P.2d 1272, 1274-75 (Wyo.1982). After a careful and thorough review of the record, we find that the jury's apportionment of fault was supported by substantial evidence. Appellants argue that, because of the evidence presented, the jury should have found at least some percentage of fault attributable to the settling defendants. Several facts in the record defeat this contention.
There was evidence to show that settling defendant Anselmi did not have notice that there was a defect in his fence because the horses had been successfully contained in that fence for the two weeks prior to the accident. In addition, there was evidence that when Paul Crittenden of Sleeping Indian, Inc. learned of the break in the fence the night of the accident, he repaired the fence that same evening.
The jury's determination that appellants were 100 percent at fault is supported by the record. In our review of appellant's testimony it is likely that the picture he painted of the events was not found credible by the jury. He explained one series of events in his deposition and a different version upon direct examination. Plaintiff's counsel seemed to be successful in impeaching appellant on the inconsistencies, thus making the jury doubt his credibility. In addition, there was evidence that one minute and thirty seconds passed from the time appellant saw appellee's headlights approaching before appellee hit the horse. The question of the proximate cause of the accident was before the jury. The jury most likely determined that there was sufficient time for appellant to have warned the oncoming vehicle, and had he warned him, the second accident would not have occurred. In sum, we find that the evidence in the record is sufficient to support the jury's assignments of percentage of fault in this case.
Conclusion
This jury's finding two settling defendants 0 percent at fault and the nonsettling defendant 100 percent at fault was supported by the evidence. Appellants are not entitled to credit for the settlement reached between the plaintiff and the settling defendants and therefore must pay the judgment as rendered. None of the errors alleged substantiated appellants' claim that they did not receive a fair trial. They had the opportunity to argue the fault of the settling defendants, and the jury nevertheless found otherwise. Appellants may not benefit from a settlement by the plaintiff with actors not parties in the case.
Affirmed.
THOMAS, J., filed a dissenting opinion.
THOMAS, Justice, dissenting.
I must dissent from the majority opinion in this case. I am satisfied the intent of the Wyoming legislature is being frustrated rather than implemented. The assumption that the Wyoming legislature would abrogate joint and several liability to assure a joint tortfeasor never pays more than his pro rata share of damages and, at the same time, intend that an injured person should receive $205,000 more than the total damages as determined by the jury does not ring true for me. Consequently, I offer my thoughts with the hope they may be of some use to the legislature in correcting the inequities the majority has injected into our system of tort litigation by this decision. In addition, I am satisfied plain error is present with respect to the jury instructions, and the case should be reversed for that reason, as well as for the failure to implement legislative policy.
I identify the following areas of concern in this case:
*720 1. The failure of the majority to recognize plain error did occur in the jury instructions referring to parties, when the statute clearly requires reference to actors.
2. The failure to credit the amounts paid by the actors who settled against the determination of damages by the jury, thus approving a double recovery, which the legislature must have assumed it was foreclosing when it amended WYO.STAT. § 1-1-109 in 1986 to abolish joint and several liability and at the same time did away with the statutes providing for contribution.
3. The failure of the majority to construe consistently WYO.R.EVID. 408 and WYO. STAT. § 1-1-108 by applying the rule to non-parties while limiting the application of the statute to parties.
4. The failure of the majority of the court to implement the legislative intent that a tortfeasor would not pay more than that person's percentage share of the damages as determined by the jury.
The major fallacy found in the majority opinion lies in this statement from page 6 of the slip opinion:
With the amendment of W.S. 1-1-109(d), W.S. 1-1-110(b) providing for contribution was repealed and for good reason, for after joint and several liability was abolished, no tortfeasor would ever pay more than his proportionate share of a judgment.
If the situation is analyzed in terms of damages rather than judgments, it is obvious that, in this instance, Haderlie or Sleeping Indian or Anselmi or, perhaps, all of them have paid more than a proportionate share of the damages. It is an evasion of the issue to contend that perhaps the total damages were more than $375,000 because we must rely on the determination of that figure by the jury.
In this case, the analysis is made substantially more difficult by plain error that occurred in the jury instructions. It must be remembered Sleeping Indian and Anselmi no longer were parties to the litigation after settlement was accomplished. Nevertheless, the jury was advised in Instruction No. 7 as follows:
The case must be determined on the basis of comparative fault of the parties involved in the occurrence.
* * * * * *
It will be necessary for you to determine the percentage of fault, if any, of each of the parties involved in the occurrence. It also will be necessary for you to determine the amount of damages sustained [by] the plaintiff.
Your findings as to fault will affect the plaintiff's recovery. It is my duty to explain how that may occur.
First, should you determine that if the plaintiff's fault exceeds fifty percent, the plaintiff will not be entitled to recover any damages.
Second, the defendant's liability for damages is limited by the percentage of fault which you determine is attributable to him and he will only be liable to pay that percentage of the total damages.
In explaining the consequences of your verdict, the court has not meant to imply that any of the parties are at fault. That is for you to decide in conformity with these instructions. (Emphasis added.)
The word "parties" in the second and last paragraphs clearly refers only to Sondgeroth and Haderlie, the plaintiff and defendant, respectively. The jury was never told to determine the fault, if any, of any other "actor whether or not a party."
The correct treatment of these matters is set forth in WYO.STAT. § 1-1-109 (1988) as follows:
Comparative negligence.
(a) Contributory negligence shall not bar a recovery in an action by any person or his legal representative to recover damages for negligence resulting in death or in injury to person or property, if the contributory negligence of the said person is not more than fifty percent (50%) of the total fault. Any damages allowed shall be diminished in proportion to the amount of negligence attributed to the person recovering.
(b) The court may, and when requested by any party shall:
(i) If a jury trial:
*721 (A) Direct the jury to find separate special verdicts determining the total amount of damages and the percentage of fault attributable to each actor whether or not a party; and
(B) Inform the jury of the consequences of its determination of the percentage of fault.
* * * * * *
(d) Each defendant is liable only for that proportion of the total dollar amount determined as damages under paragraph (b)(i) or (ii) of this section in the percentage of the amount of fault attributed to him under paragraph (b)(i) or (ii) of this section.
The failure of the trial court to couch the instructions in the terms of the statute constitutes plain error in this instance and, for a correct result to be achieved, even under the majority analysis, a reversal is demanded.
Haderlie's persistent efforts to apprise the jury of the existence of these two "actors" should have been treated as a request to the court to give the directive to the jury to apportion fault among all "actors." Placing the horse owner and pasture owner on the verdict form with no explanation as to their being "actors," while at the same time instructing the jury to apportion liability only among the parties, structured an unacceptable result. This feature, alone, serves to distinguish this case from Roland v. Bernstein, 171 Ariz. 96, 828 P.2d 1237 (Ct.App. 1991), relied upon by the majority. It is obvious a correct instruction was provided to the jury in that case. Glossing over this significant deviation from the statutory mandate on the ground Haderlie failed to object to it evades the responsibility of this court to rationally develop the law. Even worse is the suggestion that it is a proper instruction in the face of glaring departures from statutory requirements.
Additionally, the fourth paragraph of the instruction quoted above, telling the jury that if Sondgeroth is determined to be over fifty percent at fault he cannot recover any damages, implies Sondgeroth will receive no remuneration at all, if he should not recover from Haderlie, because Haderlie is the only other "party" to the lawsuit. Adding insult to injury is Sondgeroth's attorney's remark in his closing argument "explaining" the trial court's instruction in paragraph four:
If you attribute 50 and a half percent of the fault to Jim [Sondgeroth], he's going to get nothing.
The second thing is that no matter how much you find the damages to be, he will recover only the amount that you attribute to the Defendants. Amounts that you attribute to anybody else, to Crittenden or to Anselmi or to Sleeping Indian, he recovers none of that. He gets the percent times the damages that you attribute to the Defendants.
So, if you put in there two percent, and you have $100,000 of damages, he will get $20,000, period, in the sum. You just need to be aware of the effect of your verdict, and I want you to know that. (Emphasis added.)
Even the majority states "care should be exercised to assure that the jury is not left with the impression that plaintiff has, has not, or will not recover from persons not parties to the case before them." At 716. Obviously, care was not taken in this regard. The result, in this case, was that the jury apportioned 0% fault to both Sleeping Indian and Paul Anselmi and 100% fault to Haderlie.
In light of this explanation of the impact of the erroneous instruction, the failure to credit the amounts paid by the settling actors becomes much more critical. The instructional error would be cured by such a credit.
The legislature now has departed from a rational and comprehensive statutory scheme, even though it was arbitrary and complex in some of its aspects. It has left us essentially with a legislative policy that:
Each defendant is liable only for that proportion of the total dollar amount determined as damages under paragraph (b)(i) or (ii) of this section in the percentage of the amount of fault attributed to him under paragraph (b)(i) or (ii) of this section.
WYO.STAT. § 1-1-109(d).
The product of the legislative adjustments has led this court to adopt a common law *722 indemnity rule in part because the legislature did away with our earlier contribution statute. Schneider Nat'l, Inc. v. Holland Hitch Co., 843 P.2d 561 (Wyo.1992). In this regard, it is noted California has held that the common-law equitable indemnity doctrine should be modified to permit, in appropriate cases, a right to partial indemnity under which liability among multiple tortfeasors may be apportioned on a comparative negligence basis. American Motorcycle Ass'n v. Superior Court of Los Angeles County, 20 Cal.3d 578, 146 Cal.Rptr. 182, 578 P.2d 899 (1978). Having invoked common law indemnity in Schneider, I am satisfied this court must develop a rational and comprehensive plan for the actors collectively to pay the total damages. I am satisfied our history and our precedent leads to the ineluctable conclusion that there is only one recovery for the damages to an injured person. The ceiling on that "pot of gold" is the damages awarded by the jury. The "pot of gold" can be no larger than that, in this instance, $375,000. The next task is to determine how those who are perceived to be responsible for a plaintiff's injuries must contribute to the payment of those damages.
In Schneider, we held, when one of those actors achieves a settlement with the plaintiff, even though the damages were not determined by a jury, that actor can seek to be indemnified by others perceived to be responsible. It is logical the same result should flow if the actor proceeds to a jury determination of those damages rather than agreeing with the plaintiff as to the amount. In this instance, we have a situation in which the others achieved a settlement with the plaintiff and, in accordance with Schneider, those settling actors would be entitled to seek indemnity from Haderlie and J.P. Robinson, d/b/a Jack Knife Ranch and Construction, for the amounts they had paid since the jury found them not at fault. The missing factor, of course, is an adjudication among the settling actor or actors and the other actors as to relative fault. I recognize the jury apparently addressed that question in this case, although the jury may have eliminated those who were not parties in the case. It is clear, however, that none of the actors, Haderlie, Robinson, Anselmi, or Sleeping Indian, are bound by that judgment, as among them, because Anselmi and Sleeping Indian were dismissed from the case upon settlement.
The majority completely ignores our decision in Schneider. In Schneider, this Court agreed with the United States District Court for the District of Wyoming that "indemnity is still available in Wyoming despite the repeal of contribution in 1986." Schneider, 146 Cal.Rptr. 182, 843 P.2d at 570. We held that indemnity liability is to be allocated among the parties proportionately to their comparative degree of fault in negligence causes of action. Schneider.
From the perspective of this time and these cases, it would seem the legislature was too optimistic in its assumption that the responsibility of the several actors would be settled in one case by one verdict. It is obvious the legislature did not account for the creativity of experienced practitioners at the bar. Any anticipation that the several tortfeasors would agree to hang together is fallacious, and there is a compelling interest by the injured party to see to it that they hang separately.
While the possible combinations are myriad, it is clear from both this case and Schneider that it is possible for the parties to avoid having a jury arrive at the apportionment of fault with all parties present and defending their positions. In Schneider, the issue never got to a jury. In this case, the issue got to a jury, but Anselmi and Sleeping Indian were not present, and the debate before the jury essentially was only the fault of those who were present in the courtroom. It is easy to understand how a jury could find no fault on the part of those actors who were not even parties to a lawsuit. That is demonstrated by the effective, but inappropriate, argument of counsel for the plaintiff in this case, in which the jury was told, in substance, that Sondgeroth could not recover any portion of his damages from those actors who were not parties. This argument is simply an example of a potential for injustice which must be accounted for in developing rational and cohesive rules for the application of relative fault under our statute.
*723 In Schneider, we adopted RESTATEMENT (SECOND) OF TORTS § 886B (1979) to justify our adoption of equitable indemnity. It would be consistent, in this case, to also adopt the RESTATEMENT rule for crediting the settlements against the judgment. RESTATEMENT (SECOND) OF TORTS § 885, at 333 (1979) states:
Effect of Release of or Payment by or on Behalf of One of Several Tortfeasors
(1) A valid release of one tortfeasor from liability for a harm, given by the injured person, does not discharge others liable for the same harm, unless it is agreed that it will discharge them.
(2) A covenant not to sue one tortfeasor or not to proceed further against him does not discharge any other tortfeasor liable for the same harm.
(3) A payment by any person made in compensation of a claim for a harm for which others are liable as tortfeasors diminishes the claim against the tortfeasors, at least to the extent of the payment made, whether or not the person making the payment is liable to the injured person and whether or not it is so agreed at the time of payment or the payment is made before or after judgment. (Emphasis added.)
This rule simply provides for a pro tanto credit of the settlement amounts against the verdict in entering judgment. We have been committed to the RESTATEMENT as a source of common law rules for a number of years. We need to remember that the several rules found in the RESTATEMENT are interwoven and designed to function together. Consequently, it seems appropriate in this situation to turn to the rule set forth in the RESTATEMENT (SECOND) OF TORTS § 885 (1979).
Subsection (3) is further analyzed in Comments e. and f. as follows:
e. Payments made by one of the tortfeasors on account of the tort either before or after judgment, diminish the claim of an injured person against all others responsible for the same harm. This is true although it was agreed between the payor and the injured person that the payment was to have no effect upon the claims against the other. If the payment is made as full satisfaction for a specified item of damage, the claim against the others is terminated with respect to that item. If it is agreed that the payment is to satisfy the payor's proportion of the total claim, the claim against the others is diminished in that proportion, if this is greater than the amount paid; if the proportion is less than the amount paid, the claim against the others is diminished by the amount paid, irrespective of the agreement.
f. Payments made by one who is not himself liable as a joint tortfeasor will go to diminish the claim of the injured person against others responsible for the same harm if they are made in compensation of that claim, as distinguished from payments from collateral sources such as insurance, sick benefits, donated medical or nursing services, voluntary continuance of wages by an employer, and the like. These payments are commonly made by one who fears that he may be held liable as a tortfeasor and who turns out not to be. Less frequently they are made by a stranger, who wishes to compensate the plaintiff or to protect one tortfeasor against a possible judgment. The older rule was that the payments did not diminish the claim, which in effect allowed double compensation to the plaintiff on the basis of inconsistent positions taken toward different persons. This has now generally given way to the rule stated, that the claim is diminished if compensation was intended. This is consistent with the general holding as to accord and satisfaction of contracts. (On Subsection (3) in general, see § 920A).
RESTATEMENT (SECOND) OF TORTS § 885, at 335-36 (emphasis added).
The only area of debate which, in either case, assumes prior settlement credit differentiates pro tanto credit and pro rata credit. Pundzak, Inc. v. Cook, 500 N.W.2d 424 (Iowa 1993); Wadle v. Jones, 312 N.W.2d 510 (Iowa 1981). See T.J. Oliver, Annotation, Manner of Crediting One Tortfeasor with Amount Paid by Another for Release or Covenant Not to Sue, 94 A.L.R. 352 (1964). See also Hess Oil Virgin Islands Corp. v. UOP, Inc., 861 F.2d 1197 (10th Cir.1988). PROSSER *724 agrees, stating: "[I]t is everywhere agreed that the amount received must be credited pro tanto against the amount to be collected." W. PAGE KEETON, ET AL., PROSSER & KEETON ON THE LAW OF TORTS § 48, at 331 (1984). The Reporter's Note to the RESTATEMENT (SECOND) OF TORTS § 885 states with respect to subsection (3):
Subsection (3): Payments made by the released tortfeasor in partial satisfaction of the plaintiff's claim must be credited to diminish pro tanto the amount of damages recoverable against others not released.
RESTATEMENT (SECOND) OF TORTS APPENDIX § 885, at 164 (1982).
In this regard a number of additional cases are cited including Natrona Power Co. v. Clark, 31 Wyo. 284, 225 P. 586 (1924).
A persuasive discussion of the general law is found in Glidden v. German, 360 N.W.2d 716 (Iowa 1984). That court first determined general comparative law concepts did not change principles of credit resulting from tortfeasor settlement and then determined that the historical Iowa rule of a pro tanto application against the verdict existed. The case is interesting because the Iowa legislature had enacted a pro rata credit provision, which was inapplicable to that particular case, in a section which otherwise was similar to our repealed WYO.STAT. § 1-1-113, but differing in a pro rata proviso rather than pro tanto as our repealed statute provided. Iowa had legislatively moved beyond the Uniform Joint Contribution Act to legislate the pro rata provision. Wyoming has nothing remaining in its statutory scheme that is comparable. By repeal of the statute we have returned to the common law long extant.
There are various methods that are invoked to arrive at a proper award when some, but not all, of the joint tortfeasors have settled, but precedent favors limiting the injured person to a net recovery by subtracting the amount of the settlement from the jury verdict. See Jeffrey F. Ghent, Annotation, Comparative Fault: Calculation of Net Recovery By Applying Percentage of Plaintiff's Fault Before or After Subtracting Amount of Settlement by Less Than All Joint Tortfeasors, 71 A.L.R.4th 1108 (1989). According to one work specifically addressing the rules surrounding comparative negligence, there are four approaches that can be invoked with respect to the deduction of settlements from a jury's verdict. Each of the four approaches has been invoked by some jurisdiction. JOHN JAMES PALMER & STEPHEN M. FLANAGAN, COMPARATIVE NEGLIGENCE MANUAL § 4.180 (rev. ed. 1974-1986). According to the authors, the first method is to reduce the judgment by the amount actually paid by the settlor; the second method is to reduce the judgment by the percentage share of fault of the settlor; the third method is to reduce the judgment by either the amount stipulated in the settlement agreement or the amount paid in consideration for the release, whichever is greater; and the fourth method is to reduce the judgment by a "reasonable" amount paid in settlement. The authors note that the first method is rarely used, but a respectable minority of jurisdictions that do invoke this method can be identified. These include Arizona (by statute, ARIZ.REV.STAT. ANN. §§ 12-2503 to -2504 (1984)); Maine (Dongo v. Banks, 448 A.2d 885 (Maine 1982)); Massachusetts (Boston Edison Co. v. Tritsch, 370 Mass. 260, 346 N.E.2d 901 (1976)); Montana (Boyken v. Steele, 256 Mont. 419, 847 P.2d 282 (1993)); and West Virginia (Biro v. Fairmont Gen. Hosp., 184 W.Va. 458, 400 S.E.2d 893 (1990)). The second method is to reduce the judgment by the percentage of fault, which is the method used under the comparative fault act. The third method is essentially in vogue in California and New York, and the fourth method is a relatively new approach which does not seem to be followed by courts, although apparently it has been invoked by the Washington legislature.
While perhaps either the first method or the third method would assist the resolution of our dilemma, the first method is exactly what WYO.STAT. § 1-1-108 provides. The third method primarily is used where the Uniform Contribution Among Tortfeasors Act is in place, and our legislature specifically has repealed that statute. It should be noted that the New Mexico Court of Appeals has concluded the second method, also known as the proportionate fault rule, is the best *725 system to adopt since the contribution statute no longer is in effect. Wilson v. Galt, 100 N.M. 227, 668 P.2d 1104 (Ct.App.1983).
Lost in the debate up to this point is WYO.STAT. § 1-1-108 (1988), which provides:
Voluntary partial payment of liability claims.
No voluntary partial payment of a claim based on alleged liability for injury or property damage shall be construed as an admission of fault or liability, or as a waiver or release of claim by the person receiving payment. Such payment is not admissible as evidence in any action for the purpose of determining the amount of any judgment, with respect to the parties to the occurrence from which the claim arose. Upon settlement of the claim, the parties may make any agreement they desire in respect to all voluntary partial payments. After entry of judgment, any such payment shall be treated as a credit and deducted from the amount of the judgment. If after partial voluntary payments are made it is determined by final judgment of a court of competent jurisdiction that the payor is liable for an amount less than the voluntary payments already made, the payor has no right of action for the recovery of amounts by which the voluntary payments exceed the final judgment. No voluntary partial payments shall be construed to reduce the amount of damages which may be pleaded and proved in a court proceeding between the parties. (Emphasis added.)
I recognize that the invocation of this statute is awkward, since even the appellants eschew reliance upon it. I submit, however, that, in the context of the legislative tinkering with the concepts of contribution and joint and several liability, this language is clear and unambiguous. The statute should be dispositive in this case as to whether the amounts paid in settlement should be credited against the judgment. Certainly, the language of the statute supports the proposition that an injured plaintiff is entitled to only one recovery.
The majority argues Wyoming's statute on voluntary partial payment of liability claims applies only to "parties." However, they do concede the statute is ambiguous because the language, "[a]fter entry of judgment, any such payment shall be treated as a credit and deducted from the amount of the judgment," can be interpreted two ways. In this regard, the majority states:
The credit might be available only to the party paying (payor), or credit "deducted from the amount of the judgment" may refer to any judgment against any other person.
Op. at 711.
In finding that a non-settling defendant is not entitled to a credit from others' payments or prior settlements, the majority relies on "court decisions from states which have, like Wyoming, based their statute on Wisconsin's." Op. at 709. In its holding, however, the majority relies primarily on three decisions from the Minnesota Supreme Court as controlling. Because Minnesota has not abolished joint and several liability as Wyoming has done, the majority's reliance on these cases is, at best, speculative and, at worst, artificial. The majority's reliance on Bernstein is also misplaced because, in that case, the jury apparently had enough information before it to apportion 28% and 25% fault, respectively, to two actors who settled before trial. Because of the instructional error, the same situation is not involved in this case.
I would opt for interpreting WYO.STAT. § 1-1-108 to allow any payments by any party or any other "actor" to be credited against a plaintiff's total damage award. This view comports with Wyoming's longstanding policy that a plaintiff is entitled to compensation from all wrongdoers, but with one satisfaction for his damages. See Day v. Smith, 46 Wyo. 515, 30 P.2d 786 (1934); Natrona Power, 31 Wyo. 284, 225 P. 586; see also Kirby Bldg. Systems v. Mineral Explorations Co., 704 P.2d 1266 (Wyo.1985). Generally, the case law holds that an injured plaintiff is not entitled to a second recovery for payments already made in satisfaction of his total damages. Consequently, I would hold WYO.STAT. § 1-1-108 requires payments made in partial satisfaction of a plaintiff's claim must be credited against any remaining liability to prevent double recovery. See also *726 Sanders v. Cole Municipal Finance, 489 N.E.2d 117 (Ind.Ct.App.1986); Barker v. Cole, 396 N.E.2d 964 (Ind.Ct.App.1979).
Moreover, in my opinion the majority's insistence on applying WYO.STAT. § 1-1-108 solely to the "parties" is more appropriate when construing WYO.R.EVID. 408 in this case. At the very least, the statute and the rule should be construed consistently. If the statute is limited to parties to the action, the rule should be similarly limited. WYO. R.EVID. 408 provides:
Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.
The majority construes this rule to preclude evidence of settlements of both parties and non-parties from being presented to the jury unless one of the exceptions applies. However, MCCORMICK takes an antithetical viewpoint:
The rule is available as an objection to one who made the offer and is a party to the suit in which the evidence is offered.
To invoke the exclusionary rule, there must be an actual dispute, preferably some negotiations, and at least an apparent difference of view between the parties as to the validity or amount of the claim. (Emphasis added.)
MCCORMICK ON EVIDENCE § 266, at 194 (John W. Strong ed., 4th Practitioner's ed. 1992).[1]
As to the admissibility of settlements with third parties, MCCORMICK states:
A settlement which is offered as proof of the liability of a third party, arising out of the transaction in suit, is not within the privilege since the evidence will not harm the parties to the compromise. (Emphasis added.)
MCCORMICK ON EVIDENCE § 266 n. 24.
A New Jersey court, relying on the above language, had this to say:
The admission of this evidence [third-party settlement of Firestone] could not undermine the policy of encouraging settlements, because it was not offered against one of the parties to the settlement. * * * Stated another way, since Firestone was not a party to the lawsuit and hence could not be held liable, evidence of the settlement was not offered "to prove [Firestone's] liability for the loss" within the intent of Rule 52. See McCormick, supra [MCCORMICK ON EVIDENCE (3 ed. 1984) § 274] at 813 n. 23 ("A settlement which is offered as proof of the liability of a third party, arising out of the transaction in suit, is not within the privilege since the evidence will not harm the parties to the compromise.") (Emphasis added.)
Wyatt By Caldwell v. Wyatt, 217 N.J.Super. 580, 526 A.2d 719, 722 (Ct.App.Div.1987).
The facts of our case justify the invocation of this rule. The horse owner and the pasture owner made their "deals" with plaintiff Sondgeroth prior to trial. Unlike an offer to compromise or settlement negotiations which did not culminate in a final settlement agreement prior to trial, these two settlements were entered into by "actors" "arising out of the transaction in suit" who agreed to pay a sum certain in damages to Sondgeroth. Despite disclaimers on the settlement agreements themselves, these settlements evidence some "liability" or responsibility for Sondgeroth's total damages, but only up to the amount offered and accepted by Sondgeroth.
The policy reason for excluding a settlement offer at trial is obvious: It is for the jury to determine liability and damages. This policy is not present when the damages *727 owed by other "actors" will not be determined by the jury. The horse owner, the pasture owner, and Sondgeroth agreed among themselves what those damages would be and sealed it in a binding contract. At this point, there is no longer an inadmissible, speculative offer to settle which could mislead or prejudice the jury. Rather, this is evidence of a fait accompli which "will not harm the parties to the compromise." Accordingly, the existence of these two settlements should have been divulged to the jury because the "actors" who settled with Sondgeroth were not parties to the suit and, consequently, could not be held liable by the jury.
Even if I were to agree that the trial court properly excluded the settlements under WYO.R.EVID. 408, I would still find them admissible as an exception to the rule. The exception portion of the rule states:
This rule does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. (Emphasis added.)
WEBSTER'S NINTH NEW COLLEGIATE DICTIONARY 1178 (9th ed. 1983) defines "such" as "of a kind or character to be indicated or suggested." Thus, because the list of exceptions is not exhaustive, I would hold that the existence of the settlement agreements should have been made known to the jury for it to correctly apportion fault among the settling "actors" and the "parties" to the lawsuitor to state it another wayto prevent anything more than a full, 100% recovery by a successful plaintiff.
I fail to see how the jury's knowledge of these settlements could be prejudicial to the parties in the suit or how such knowledge could chill future attempts at settlement. In fact, in Frey v. Snelgrove, 269 N.W.2d 918, 923 (Minn.1978) (citing from Connar v. West Shore Equip. of Milwaukee, Inc., 68 Wis.2d 42, 227 N.W.2d 660, 662 (1975), the court apparently found that the remaining defendants in the lawsuit could be prejudiced without such evidence, when it stated:
In almost every case the trial court should submit to the jury the fault of all parties, including the settling defendants, even though they have been dismissed from the lawsuit. If there is "evidence of conduct which, if believed by the jury, would constitute negligence [or fault] on the part of the person * * * inquired about," the fault or negligence of that party should be submitted to the jury.
See also Moser v. Wilhelm, 300 N.W.2d 840 (N.D.1980).
In any event, I would find the jury was not properly informed of the consequences of its determination of the percentage of fault in this case as required by WYO.STAT. § 1-1-109(b)(i)(B); nor was the jury properly instructed as to its duty to determine the percentage of fault attributable to each actor whether or not a party under section (b)(i)(A) of the statute. I would find this latter omission by the trial court, in tandem with the untoward remark by Sondgeroth's attorney in his closing argument, to be plain error requiring reversal and remand.
In 1986, the Wyoming legislature abolished joint and several liability by amending WYO. STAT. § 1-1-109 to provide that:
(d) Each defendant is liable only for that proportion of the total dollar amount determined as damages under paragraph (b)(i) or (ii) of this section in the percentage of the amount of fault attributed to him under paragraph (b)(i) or (ii) of this section. (Emphasis added.)
When requested by any party, the plain language of section (b)(i) of the statute commands the court to:
(A) Direct the jury to find separate special verdicts determining the total amount of damages and the percentage of fault attributable to each actor whether or not a party; and
(B) Inform the jury of the consequences of its determination of the percentage of fault. (Emphasis added.)
Sections (b) and (d) of the amended statute are interrelated and, when read together, the logical inference is that the legislature wanted each responsible "actor," whether or not a *728 plaintiff or defendant, to be apportioned a percentage of fault by the jury.
The legislature's repeal of joint and several liability came in response to the decision in Kirby, 704 P.2d 1266. Apparently, the legislature thought it was inequitable that two tortfeasors, who were found to be 55% negligent, would have to pay 95% of the plaintiff's damages. Thus, with comparative negligence, if a plaintiff cannot recover from one tortfeasor because he is bankrupt, for example, the plaintiff bears the loss and may obtain his damages only from the remaining tortfeasors, if any. In this case, the jury assessed 100% of the fault to defendant Haderlie while two other "actors" agreed before trial to pay $205,000 in damages. This $205,000 accounts for approximately 55% of the $375,000 total damage award. Yet, Haderlie is supposed to pay 100% amounting to the full $375,000 in damages, which includes the 55% payment ($205,000) ascribed and agreed to by others. Thus, as the verdict stands, Haderlie will have to pay 100% of the plaintiff's damages when two other tortfeasors are arguably 55% negligent. This result is déjà vu from Kirby and, in my opinion, the same perversity the Wyoming legislature was trying to eliminate when it abolished joint and several liability in 1986. Also, after placing the burden of any non-recovery on the plaintiff by abolishing joint and several liability, it would be incongruous if the legislature impliedly authorized a plaintiff to recover 155% in damages at the same time. I cannot believe the legislature intended these anomalies.
The legislature's repeal of WYO.STAT. § 1-1-110(b), which provided a right of contribution among tortfeasors, clearly was perceived as consistent with the implementation of a system where each responsible party was to pay only his pro rata share of a plaintiff's total damages. Assuming the jury had the requisite knowledge of the other "actors" settlement agreements to be able to apportion some fault to them, application of indemnity liability, I believe, would have achieved a better result. It seems clear, from other jurisdictions which reduce the judgment by the percentage of fault of settling actors, that this knowledge is given to the jury in some form or the settling actors themselves participate in the trial where fault is apportioned.
Because any fault of the settling "actors" was inadmissible at trial, because the jury was not instructed to consider the liability of other "actors" based on settlements totaling $205,000, and because the jury was led to believe Sondgeroth would recover nothing if not from Haderlie, the jury rationallybut inappropriatelyattributed all the fault to Haderlie. In any event, someone is going to have to pay more than a proportionate share of the judgment of $375,000, which presumably compensates Sondgeroth completely for his injuries.
If the rule of partial equitable indemnity from Schneider is applied correctly, it follows that Haderlie has an action to recover 55% or $205,000 from the settling actors that he would pay on their behalf. If the settling actors had to pay Haderlie back, then they would end up paying $410,000 (double the settlement payments) and should in turn be permitted to seek recoupment from Sondgeroth for $205,000. If Sondgeroth were required to pay the $205,000 to the settling actors, then all have paid the correct amount according to the jury verdict, and we have come full circle. Credit should have been given against the total judgment which would leave only one step, the seeking of common law indemnity from Sondgeroth if, in fact, Anselmi and Sleeping Indian were found not at fault in an action involving them as parties with Haderlie.
I would hold the jury was not properly informed of the consequences of its determination of the percentage of fault in this case as required by WYO.STAT. § 1-1-109(b)(i)(B); nor was the jury properly instructed as to its duty to determine the percentage of fault attributable to each actor whether or not a party under subsection (b)(i)(A) of the statute. I would find this latter omission by the trial court, in tandem with the untoward remark by Sondgeroth's attorney in his closing argument, to be plain error requiring reversal and remand.
In light of what I perceive is a clear, but frustrated, legislative policy, the legislature either should reinstate a statute providing for contribution and indemnity consistent with the policy advanced by abolishing joint *729 and several liability or it should make clear that rules found in the RESTATEMENT (SECOND) OF TORTS are applicable in Wyoming. This would require the re-enactment of WYO. STAT. § 1-1-108 to clearly provide for crediting of all amounts paid in settlement against any judgment. Hopefully, the legislature will correct the chaotic state of the law this court has structured. The sword of justice is double edged, and any rule that permits the sword to cut in only one direction is inappropriate because the thrust of the rule of law is dulled.
NOTES
[1] Parenthetically, I must add that I am not convinced $375,000 was appellee's total damages. It was just the amount this jury would award against this lone defendant. Had there been three defendants against whom the jury could award damages, I am convinced the total verdict would be greaterand most experienced trial counsel will agree this is true.
[2] Amended March 24, 1992.
[3] Amended March 24, 1992.
[1] In a footnote, however, McCormick acknowledges that "[t]he cases in general do not display much concern as to the basis of the rule." MCCORMICK ON EVIDENCE § 266 n. 2.
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245 Md. 254 (1967)
225 A.2d 868
FLOHR, SURVIVING WIDOW, ETC.
v.
COLEMAN
[No. 13, September Term, 1966.]
Court of Appeals of Maryland.
Decided January 26, 1967.
*258 The cause was argued before HAMMOND, C.J., and MARBURY, OPPENHEIMER, McWILLIAMS and FINAN, JJ.
Samuel D. Hill, with whom were Buckmaster, White, Mindel & Clarke, and Richard E. Zimmerman on the brief, for appellants.
James McSherry and Frederick J. Bower, with whom were McSherry & Burgee on the brief, for appellee.
MARBURY, J., delivered the opinion of the Court.
This is a motor tort action brought by Elsie V. Flohr (Roberts) on behalf of the surviving children of Kenneth M. Flohr, and as administratrix of his estate. She made no personal claim for any damages for herself as surviving widow. The declaration alleged that the death of Kenneth M. Flohr was caused by the negligence of David Lee Coleman, defendant. The case was tried before a jury in the Circuit Court for Frederick County, Judge Robert E. Clapp, Jr., presiding. The questions of the defendant's negligence and the deceased's contributory negligence were submitted to the jury, which found a verdict in favor of the defendant.
On appeal from the judgment on the verdict, the appellants contend that the court's instructions to the jury were insufficient to fairly submit the case to the jury as to certain issues and that the court erred in sustaining objections to questions asked the defendant by the Flohrs' attorney concerning the defendant's knowledge of laws pertaining to a driver's duty to keep a lookout and to have headlights which show certain distances. On December 31, 1964, at approximately 9:15 p.m., Kenneth M. Flohr was struck and killed while walking north on the east side of State Route 75 by an automobile owned and operated by the defendant. Neither the defendant nor Flohr had been drinking. The accident occurred approximately three-tenths of a mile north of the intersection of Clemsonville Road and Route 75 in Frederick County. Route 75, at the point where the accident occurred, was straight and level and ran through open farm country. It was not artificially illuminated and was twenty-one feet in width, excluding the earth shoulders. The *259 roadway was comprised of an eighteen foot concrete strip with one and one-half foot asphalt shoulders on each side. The earth shoulders on either side of the roadway were three feet, eight inches wide. There were no sidewalks. Defendant admitted that he had used the road often and that he knew pedestrians walked on or along the side of the road.
Defendant, Coleman, was traveling north on Route 75 at a rate of speed from between thirty-five to forty-five miles per hour, when an automobile traveling in the opposite direction on Route 75 passed the defendant with its headlights on high beam. Coleman testified that he slowed his vehicle and pulled to the right. He stated that the bright lights of the oncoming vehicle temporarily blinded him. Just after the southbound car passed, defendant's companion, Arthur Greenholtz, Jr., who was riding on the front seat beside him, cried out "There's a man," but before he finished that statement, defendant heard a "thump." Neither had seen Flohr prior to the accident. Coleman immediately turned his vehicle sharply to the left and applied his brakes.
At the time of the accident, Flohr was dressed in black trousers and a black pull-over sweater which had a white stripe on the front. A witness for the appellants, Harold D. Kline, testified that he had seen Flohr walking on the traveled portion of the highway some time before the accident. Kline had traveled in a southerly direction, facing Flohr. The white stripe on the front of Flohr's sweater was visible to Kline. It was not shown that the stripe was visible to someone approaching Flohr from the rear.
There was controversy over whether or not Coleman drove off the hard surface of the road and whether or not Flohr was walking on the asphalt extension or on the dirt shoulder. The investigating police officer found a skid mark from the right tire of the Coleman vehicle. The skid mark began eight inches from the east edge of the hard surface of the highway, twenty-five feet north of where the officer placed the approximate point of impact. The officer placed the point of impact on the east asphalt extension. In a statement to the police, Arthur Greenholtz, Jr., defendant's companion, stated that when the approaching vehicle refused to dim its lights, defendant "went *260 to the side of the road," and that when the approaching car passed, defendant "went back on the road." In his testimony, Greenholtz stated that defendant's vehicle "stayed on the edge" of the paved road and that Flohr was on the paved portion.
Appellants objected to the failure of the trial court to include in its instructions these portions of the following instructions requested by their trial counsel:
"2. * * * It is the duty of the pedestrian to use reasonable care in walking on a street, and to act as an ordinarily careful person would act under similar circumstances. But the driver of a motor vehicle is required to exercise much greater vigilance and caution to look out for the pedestrian than the pedestrian is required to exercise to look out for the driver. This is because of the fact that the pedestrian cannot usually harm the motorist by the way he uses the street and needs to look only after his own safety, whereas the motorist may kill or seriously injure the pedestrian and therefore should look out for the safety of the pedestrian as well as his own. * * *
"3. Pedestrians walking along public highways outside of towns and cities where there are no sidewalks ordinarily use the sides of the road and vehicles the middle. Therefore, pedestrians must expect to find and watch for the approach of vehicles in the middle of the road. Drivers must expect to find and be alert for pedestrians walking along or on the sides of the road. * * *"
The trial court refused to include these requested instructions in its instructions to the jury because it felt that to do so would overemphasize and change the degree of care required of a pedestrian and of a motorist, and it felt that the requested instruction pedestrians must expect to find and watch for the approach of vehicles in the middle of the road and drivers must expect to find and be alert for pedestrians walking along the road was erroneous, because it thought that a pedestrian has no greater legal right to travel on a particular portion of a country road than does the driver of a vehicle.
*261 The court instructed the jury as to the burden of proof imposed on the appellants in proving negligence. It defined negligence "as either doing something that a reasonably prudent man would not have done under the circumstances as you find them from the evidence, or failing to do something that a reasonably prudent man would have done under the circumstances that you have outlined in the evidence." The court then defined proximate cause. In its instruction on the motorist's duty in cases of this nature, the court told the jury of the duty of a motorist to slow down when blinded by approaching lights in order to avoid striking something that may be within the blind area. The court also defined and explained contributory negligence.
As to the various rights of persons using the highway, the court stated:
"Now I advise you also that there is no law in this State that requires a person to walk to the left facing traffic, that is, there is no provision of the Motor Vehicle law of the State that requires a person to do that. Where Mr. Flohr was walking and the circumstances under which he was walking is entirely a question of this due care that I have advised you about, because pedestrians and motor vehicles have an equal right on the public highways of the State and each must use due care under the circumstances to avoid any possible accident that may or may not develop, so that in the judgment of this case it boils down to a question of due care under all of the circumstances of the case as you may find them."
After counsel for both sides were afforded an opportunity to challenge the given instructions, the court gave additional instructions on the rights of users of the highway:
"I stated to you also that each person, the driver of an automobile and a pedestrian, has equal rights to use the highways of the State. That is particularly true, of course, where there are no sidewalks, and each has an equal duty to look out for the other. In other words, a pedestrian is under duty to look out *262 for automobiles on the road, and automobiles by the same token are under a duty to look for pedestrians on the road, and all of these items are to be considered by you in connection with the consideration of due care and negligence and contributory negligence that I discussed with you previously."
The text of the appellants' requested instructions followed closely the language in the opinions of this Court in Wiggins v. State, Use of Collins, 232 Md. 228, 192 A.2d 515; Heffner v. Admiral Taxi Service, 196 Md. 465, 77 A.2d 127; Fotterall v. Hilleary, 178 Md. 335, 13 A.2d 358; and Holler v. Lowery, 175 Md. 149, 200 Atl. 353. Each of these cases involve a discussion of the care required in the operation of a motor vehicle as compared to the care required of a pedestrian. There is no doubt that the abstract statements of law contained in the requested instructions are good law; but none of the above cases relied on by the appellants involve the granting or refusal of such instructions as those sought here. The reasoning of courts in opinions is not addressed to juries and is not always adapted to use in instructions to them. Neas v. Bohlen, 174 Md. 696, 199 Atl. 852. Cf. Garfinkle v. Birnios, 232 Md. 402, 404, 194 A.2d 91.
The court below correctly stated the rights of motor vehicular and pedestrian users of the highways, and it properly refused the above requested instructions. Its instruction generally followed those in previous cases which stated that in the absence of special circumstances or statutes, pedestrians using public highways, which are located outside of towns and cities, have a duty to watch for and expect to find approaching vehicular traffic thereon, and operators of motor vehicles have a corresponding duty to watch for and expect to find pedestrians walking on or off the sides of the highways. Critzer v. Shegogue, 236 Md. 411, 204 A.2d 180; Dunn v. Eitel, 231 Md. 186, 189 A.2d 356; Hall v. Albertie, 140 Md. 673, 118 Atl. 189.
In Critzer v. Shegogue, supra, the appellants contended that the court's instructions, which stated the reciprocal duties of pedestrian and vehicular users of the highway, and the duty of a driver of a motor vehicle to expect to find and to be alert to discover pedestrians (The pertinent instructions are set out in *263 full in Joint Record Extract, pp. E. 98-99, Critzer v. Shegogue, supra.), placed a greater duty with respect to the use of the highway on the part of a motorist to a pedestrian than the law imposes. This Court rejected this contention and held that the court's instructions did not conflict with the general rule.
In another case a requested instruction, which stated that because of the nature of an automobile and the difference in the consequences of a breach of the duty owed by a motorist and a pedestrian respectively, ordinary care requires a motorist to exercise a higher degree of diligence to avoid a collision with a pedestrian than it would require of a pedestrian under similar circumstances (The instruction is set out in Appellant's Brief and Appendix, p. 32, Dunn v. Eitel, supra.), was rejected by the lower court, which was affirmed by this Court in a per curiam opinion. Dunn v. Eitel, supra. In Dunn, appellant argued that the trial court failed to instruct the jury fully on the question of ordinary care. See Lemons v. Chicken Processors, 223 Md. 362, 164 A.2d 703; where this Court found that an owner-operator of a passenger car was not entitled to a specific instruction to the jury based upon the great size and weight of a tractor trailer and its lesser maneuverability.
In their brief, appellants suggest that they do not contend that the operator of a motor vehicle owed greater than ordinary care, but that ordinary care under the circumstances required greater vigilance and lookout of the driver than of the pedestrian. It is true that the driver of an automobile is obliged to anticipate that pedestrians may be using the public roads, and it is especially incumbent upon him to exercise reasonable care to avoid injury to pedestrians. Hall v. Albertie, supra, citing Mears v. McElfish, 139 Md. 81, 83, 114 Atl. 701. However, appellants were asking the court to instruct the jury that a greater amount of reasonable care was required of the defendant, and this would have been an inaccurate statement of the law and misleading to the jury. It is not the law that the driver or operator of the automobile is required to use something in the way of care over and above reasonable care under the circumstances. Rangel v. Badolato, 284 P.2d 138 (Cal. App. 1955). Cf. Kaffl v. Moran, 233 Md. 473, 197 A.2d 240. The rejected instruction in Rangel stated that both plaintiff-pedestrian *264 and defendant-motorist were charged with ordinary care, but a greater amount of such care was required of defendant at the time because he was driving an automobile. The required standard of care on the part of the operators of motor vehicles is ordinary care under the existing circumstances. The actions or precautions required to be taken to comply with this standard may vary under different circumstances, but the standard remains the same. Kaffl v. Moran, Lemons v. Chicken Processors, both supra.
The requested instruction overemphasized the required standard of care owed by a motorist. As stated by former Chief Judge Brune in Lemons, 223 Md. at 369:
"If the trial court had undertaken to discuss the facts in detail in the charge to the jury, we may assume that an instruction along the lines requested, not overemphasizing any one factor or carrying the implication of any higher degree of care being required, would have been proper and, indeed, should have been given. But in the instant case, the trial judge did not give a charge reviewing the facts in detail, and we do not think that he was bound to do so. Sometimes a charge embodying a particular rule of law may be necessary in order to prevent an abstract, general charge which is granted, and which may in itself be a correct charge, from being misleading. State, Use of Taylor v. Barlly, 216 Md. 94, 99, 140 A.2d 173. In the present case, however, we find no such situation. The type of charge to be given whether detailed or general was within the discretion of the trial judge, and he was not required to include the requested instruction in it. Ager v. Baltimore Transit Co., [213 Md. 414, 132 A.2d 469]."
Appellants contend that "a driver does not have to be as vigilant for pedestrians walking in the middle of the road, where not expected, as for those walking along the edge, where they are to be expected. Likewise, pedestrians need not be as vigilant for autos along the edge of the road, where not expected, * * *."
*265 The public roads are for the general use of all members of the public, and the rights of one operating a vehicle and of a pedestrian on a public highway are mutual, reciprocal, and equal. Neither may use it in disregard of the right of the other to use it. Each must accommodate his movements to the other's lawful use of it, and each must anticipate the other's possible presence. Mahan v. State, 172 Md. 373, 191 Atl. 575. Pedestrians have an equal right with those in motor vehicles to use a country highway according to their need, convenience, or pleasure. Edwards v. State, 166 Md. 217, 170 Atl. 761. The public highway includes not only the paved portion of the highway but the shoulder. Code (1957), Article 66 1/2, Section 2 (a) (58).
In the absence of any statute, ordinance, or special circumstances, a pedestrian has, in the exercise of due care for his own safety under the conditions existing on the highway, the right to travel anywhere upon a public highway; and he is not negligent as a matter of law in walking on the paved portion, instead of the shoulder. White v. State of Maryland, 106 F.2d 392 (4th Cir.1939); Hall v. Albertie, Mears v. McElfish, both supra. The pedestrian is not under a legal duty to look back or watch behind to see if he is in danger of being struck or run down by any vehicle approaching him from the rear, Rangel v. Badolato, supra, although he must anticipate vehicles on the highway and have due regard for their rights to use it and for his own safety. Critzer v. Shegogue, supra; 4 Blashfield, Automobile Law and Practice, Section 143.5 (1965). The pedestrian may assume that the driver will use ordinary care for his protection, and the driver may assume that the pedestrian will exercise ordinary care for his own safety. 3 Blashfield, supra, Section 141.11 (1965).
A motorist has the right to use the highway, and he must use reasonable care to observe conditions along the side of a highway, although his primary attention should be directed to the road in front. Mumford v. United States, 150 F. Supp. 63 (D. Md. 1957). It is especially incumbent upon him to exercise reasonable care to avoid injury to pedestrians who, out of regard for their own safety, would naturally make use of the unpaved margin. Hall v. Albertie, supra. To instruct that a *266 driver on a country road, which pedestrians have the right, subject to the exercise of due care, to use in its entirety, does not have the duty to be as vigilant for pedestrians walking in the middle as for those walking along side would mislead the jury to believe that the driver's duty of full attention and due care to look out for pedestrians on the highway was less if the driver was traveling in the middle portion of the highway. Drivers of motor vehicles must exercise due care and caution and must anticipate pedestrians on the highway regardless of the part of the highway on which pedestrians may be. Williams v. State, 161 Md. 39, 155 Atl. 339.
Appellants allege error in the failure of the trial court to give requested instruction No. 4 which covered the requirements that a motorist constantly observe the highway ahead at night to discover persons lawfully using the road and that he keep his automobile under such control as to be able to readily turn or stop it to avoid colliding with such persons.
There is no obligation that the trial court point out any and all of the reciprocal duties and obligations of the respective parties in minute detail, provided the subject is fully and comprehensively covered in the charge to the jury. Lemons v. Chicken Processors, Ager v. Baltimore Transit Co., both supra. Judge Clapp defined and explained the necessary components of negligence and contributory negligence. He pointed out the particular duty of a driver, blinded by the lights of an approaching vehicle, to slow down to avoid hitting a pedestrian who might be on the highway, and the general duties and rights of motorists and pedestrians under the circumstances. We think the instructions given by the trial judge did adequately inform the jury concerning the duties of the defendant, and that it was discretionary with him as to whether or not each detailed obligation should be mentioned in the charge.
The sustaining of objections to certain questions propounded to the defendant by Flohrs' counsel and the refusal of the trial court to instruct the jury that the law requires automobile headlights on high beam to be of sufficient intensity to reveal persons or vehicles on the road at least 350 feet ahead, Code (1957), Article 66 1/2, Section 281, are alleged to be prejudicially erroneous. The court sustained the objections to the questions *267 on the ground that counsel for the Flohrs could not ask the defendant any questions of law.
The questions involved are:
"You know the law requires you to keep a lookout for pedestrians walking on or along the side of the road, don't you?
"You knew the law required your headlights to show on high beam at least 350 feet ahead and 100 feet ahead on low beam?"
A motorist is presumed to know the law regulating the use of motor vehicles. That is, ignorance of that law will not relieve him from the legal consequences of a wrongful act. Since a motorist's acts and omissions have such legal effect as the law prescribes regardless of his knowledge or ignorance, the questions concerning defendant's knowledge of his legal duties to look out for pedestrians and to have headlights of sufficient illumination were immaterial. 31A C.J.S., Evidence, Section 132 (2), page 259. The material issue in controversy was whether defendant fulfilled his duties under the circumstances, not whether he knew them.
There was no evidence to prove that defendant's headlights did not illuminate the road ahead for the required distance. Defendant testified on cross-examination that he could see far enough ahead to observe where he was going, but that he did not see Flohr. He was not asked if both headlights were operating properly prior to the accident, or how far ahead they illuminated in terms of feet or any other measured distance. The police officer, who investigated the scene shortly after the accident, testified that he found that the right headlight of defendant's car was broken out (Flohr was struck by the right front of the vehicle), but that he found no broken glass from that light at the scene of the accident. The officer also found that the left headlight was lighted and that it was on high beam. He was not asked if the left headlight illuminated the required distance.
Appellants had the burden of proving that defendant's headlights did not meet the statutory requirements. Ebling v. Nielsen, 109 Wash. 355, 186 P. 887 (1920); 9B Blashfield, Cyclopedia *268 of Automobile Law and Practice, Section 6070, page 616 (1954). A party who has the burden of proving another party guilty of negligence does not meet this burden by offering a mere scintilla of evidence, amounting to no more than surmise, possibility, or conjecture that the other party has been guilty of negligence. Fowler v. Smith, 240 Md. 240, 213 A.2d 549. In the absence of other evidence, it would be a mere conjecture to surmise that because glass from the broken headlight was not found at the scene of the accident, the headlight was broken out some time prior thereto. Cf. Glazier v. Tetrault, 148 Me. 127, 90 A.2d 809; 10 Blashfield, supra, Section 6564 (1954). Since the record discloses no evidence to permit an inference of any violation of the motor vehicle law with respect to headlights, there was no basis for an instruction relating to the illumination requirements of headlights, and the trial judge, in the exercise of his discretion, was not prejudicially in error in rejecting the requested instruction. Compare Victor Lynn Lines, Inc. v. State, 199 Md. 468, 87 A.2d 165, and Nelson v. Seiler, 154 Md. 63, 139 Atl. 564.
We find that the instructions given were adequate and that there was no prejudicial error in the court's refusal to instruct the jury as requested by the appellants, or in the sustaining of objections to the two questions concerning defendant's knowledge of the law.
Judgment affirmed, appellants to pay the costs.
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Becker v. State
COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
BERTHA SALAZAR,
Appellant,
v.
JOSE MONSIVAIS, M.D.,
Appellee.
§
§
§
§
§
§
No. 08-06-00143-CV
Appeal from the
41st District Court
of El Paso County, Texas
(TC# 2006-1159)
MEMORANDUM OPINION
This appeal is before the Court on its own motion for determination of whether it should be
dismissed for want of prosecution. Finding that the Appellant has failed to file a brief or respond
to our inquiry letter, we dismiss the appeal.
On August 4, 2006, this Court informed Appellant by letter that her brief was past due and
no motion for extension of time had been filed. The Court advised Appellant that her appeal would
be dismissed unless she responded within ten days and provided a reason why the appeal should be
continued. See Tex.R.App.P. 38.8. No reply has been filed.
This Court possesses the authority to dismiss an appeal for want of prosecution when the
appellant has failed to file his brief in the time prescribed, and gives no reasonable explanation for
such failure. Tex.R.App.P. 38.8(a)(1); Elizondo v. City of San Antonio, 975 S.W.2d 61, 63
(Tex.App.--San Antonio 1998, no writ). We have given notice of our intent to do so, requested a
response if a reasonable basis for failure to file the brief exists, and have received none. We see no
purpose that would be served by declining to dismiss this appeal at this stage of the proceedings.
Pursuant to Tex.R.App.P. 42.3(b), 42.3(c), and 38.8(a)(1), we dismiss the appeal for want of
prosecution.
September 21, 2006
ANN CRAWFORD McCLURE, Justice
Before Barajas, C.J., McClure, and Chew, JJ.
Barajas, C.J., not participating
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22 So.3d 543 (2009)
MONIER LIFETILE
v.
ROMAN.
No. 1D09-2532.
District Court of Appeal of Florida, First District.
November 23, 2009.
Decision Without Published Opinion Affirmed.
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436 F.2d 319
Rudy CHOY, Warren Seaman and Alfred Kumulae, Co-Partners doing Business as Choy, Seaman and Kumulaev.Elmer H. BOUCHELLE, Appellant.
No. 16584.
United States Court of Appeals, Third Circuit.
Argued January 26, 1970.
Decided October 9, 1970.
James H. Isherwood, Young, Isherwood, Gibbs & Carney, Christiansted, St. Croix, V. I., for appellant.
William W. Bailey, Bailey, Wood & Rosenberg, Charlotte Amalie, St. Thomas, V. I., for appellees.
Before HASTIE, Chief Judge, and GANEY and STAHL,* Circuit Judges.
OPINION OF THE COURT
GANEY, Circuit Judge.
1
A jury awarded plaintiffs $15,000 on their claim for the balance due them by defendant under both a design fee and a boat construction contract and for special damages, and found against the latter on his counterclaim for loss of a charter season. The district court denied, without opinion, defendant's post-trial motions for judgment n. o. v. and for a new trial wherein it was alleged that the contract was so vague and indefinite with regard to prices, the times of delivery and what was to be delivered, as to render it unenforceable. Additionally, the plaintiffs' motion for bill of costs, as well as for an attorney's fee in the sum of $3,020.00, plus $94.06 for disbursements was allowed, to which the defendant objected and this appeal followed. We agree with the district court's denial of the motion for judgment n. o. v., but would grant the motion for a new trial, and the remaining contention for counsel fees has no relevancy in the disposition of this case.
2
After much long distance correspondence between the parties, plaintiffs, designers and builders of pleasure boats in California, by letter of January 11, 1962, advised defendant, a charter boat captain in the Virgin Islands, of what they felt would be "a realistic and fair completed construction cost" of a 51-foot charter catamaran. A portion of the letter stated:
3
Here is a breakdown of what we feel to be a
realistic and fair completed construction cost of
this catamaran if built by our yard:
Materials, Equipment & Rig (at our cost)
1. Lumber & materials ....................... $5,000
2. Fiberglass, resins & plastics ............ $1,500
3. Interior hardware, equipment &
fixtures ................................. $2,000
4. Marine hardware .......................... $2,000
5. Rigging .................................. $ 555
6. Working sails ............................ $1,000
7. Spars .................................... $1,700
8. Cushions & mattresses .................... $ 700
9. Generator (diesel) ....................... $ 900
10. Edison steering equipment ................ $ 900
_______
$16,250
Labour
1. 4 boat builders (including taxes and benefits)
2. $3,150.00 labor cost per month for 6 months.
Labour Cost Total — $18,900.00
Profit — 5% of $35,150.00
To this you must add cost of two 40 H.P.
outboard motors, awning, fuel tanks, shower
equipment or electronic equipment * * *
4
On April 25, 1962, the defendant, in the Virgin Islands, signed a written form agreement prepared by the plaintiffs and sent to him from California, where plaintiffs' boat shop and office were located, with an accompanying letter by mail dated twenty days earlier, or April 5, 1962.1 Under the agreement, defendant, as owner, hired plaintiffs, as the contractor, to build a day-sailing catamaran in California according to plans and specifications which were subject to change within certain limits by defendant before completion of the boat, and any additional expenses caused by these changes were to be paid by defendant. Besides the administrative expenses, which included seven categories, the total contract price was estimated to be $35,150 plus a fixed profit not to exceed 5% of that figure. No date was set for the completion of the boat, but construction time was estimated to take six months. The boat was built and launched, but before paying the balance which plaintiffs claimed was due them and without their permission, defendant in the middle of May of 1963, took possession of the boat and sailed it from California to the Virgin Islands via the Panama Canal, a distance of approximately 5,000 nautical miles. In September of 1964, while the vessel was still in the possession of defendant, plaintiffs brought the action here involved in the District Court of the Virgin Islands. Jurisdiction of the court was invoked on the grounds of diversity.
5
The contract stated that the vessel was to be delivered within a reasonable time from the execution of the contract, and is silent concerning a penalty in the event of an unreasonable delay in delivery. This provision does not render the contract vague. The law assumes a reasonable time even when no time is stated. By the terms of the contract, it was estimated that the vessel would be completed within six months from the signing of the contract, but no definite date was given because the defendant was permitted to make changes in the plans which might cause delay in the completion of the vessel.
6
Plaintiffs claimed and offered evidence to prove that defendant's actions delayed delivery of the vessel by five months, paragraph 4 of the contract stating:
7
In the event that construction time is unnecessarily delayed by OWNER'S failure to comply with the installment payments of the purchase price as set forth in paragraph (3) hereof, OWNER hereby agrees to pay CONTRACTOR all additional costs and expenses incurred due to said delays.
8
While the contract price here is not particularly definite, it need not be, for it may be left to be fixed in a manner to be agreed by the parties. Here the price was purposely left indefinite because it was made to depend on the actual cost of construction which included a number of items, the value of which could not be determined until the vessel was delivered to the defendant. However, at trial the plaintiffs claimed the following amounts:
9
1. Contract figure ......................... $35,150.00
2. Fixed profit (5% of $35,150.00) 1,757.50
3. Mothballing for two months .............. 450.00
4. Rental of yard ($75 a month for
11 months) ........................... 825.00
5. Overhead ($65 a month for
11 months) ........................... 715.00
6. Administrative expenses for
11 months ............................ 525.00
7. Extras .................................. 4,512.51
8. Insurance (for 11 months) ............... 780.44
9. Property tax ............................ 71.12
__________
Sub-Total ............................ $44,786.58
10. Design fee (10% of construction
cost) ............................... 4,478.66
__________
Total ............................... $49,265.24
10
From this total plaintiffs subtracted the following amounts: $32,465.00, of which $1,260.00 was for the design fee, paid them by defendant; and $2,007.00, a credit for items bought by defendant and for which admittedly plaintiffs should have supplied under the contract. This left a balance of $14,793.24.
11
The payment schedule in paragraph (3) of the contract provides for six installments with the initial payment of $6,000.00 to be paid upon the execution of the contract. Installments two to five, respectively, of $6,000.00 each were to be paid on or before the first of June, July, August and September, and the sixth, or balance, on or before the first of October. The first four installments were paid on time, but the fourth was one thousand dollars short. The fifth, $7,000.00 in amount, was not paid until December 5, 1962, sometime after defendant arrived in California; and the sixth was never paid except for a number of checks for various items totaling $1,205.00. Due to the failure of the defendant to make the required payments due under the contract, plaintiffs alleged they were compelled to stop all work and in November they mothballed the vessel and notified defendant by telegram dated November 10, 1962, that work had been halted.
12
Regarding the $450.00 mothballing item, Rudy Choy, one of the plaintiffs, testified that once a boat is mothballed, work on the boat cannot be immediately resumed. This is so, he said, because, in addition to protecting the vessel from the elements, tools and plans are put away; the scaffolding removed; orders for future items are cancelled; material, previously ordered and received must be returned to the supplier or safely stored so that it won't be destroyed or stolen. Also, workers assigned to build the vessel must be laid off or diverted to other projects. And even if the work is resumed at a moment's notice, it takes weeks before the pace is in full stride again.
13
Under the contract defendant agreed to pay the administrative expenses pertaining to construction. These include taxes, shop and space rent at $75.00 per month at the yard, construction insurance, an administrative fee of $50.00 per month, and estimated additional overhead not to exceed $400.00 during a six-month period, launching and moving expenses and costs incidental to sea trials. Choy testified that they came to $2,916.50 over an eleven-month period, approximately $1,180.00 of which may be attributable to the last five months of that period.
14
When work was resumed on the vessel after the December 5 payment was received, defendant was granted permission to live on the uncompleted vessel along with a crewman brought to California for the purpose of sailing it to the Virgin Islands. Plaintiffs did this to save defendant and the crewman the cost of staying at a hotel. Moreover, the defendant, and others at his request, did some work on the boat, most of which plaintiffs denied they consented to, such as sandpapering, adding extra coats of paint and installing fixtures. Defendant also requested a number of changes in the original plans after the vessel had undergone construction.2 These actions, along with defendant's failure to pay the sixth installment, Choy stated from the witness stand, caused delay in the construction of the vessel.
15
In April of 1963, the vessel was launched, and it was put through crowded anchorage maneuvers, the mast and rigging adjusted and the outboard motors tested by plaintiffs. While they were waiting for bad weather to put the vessel through rough water trials so as to complete plaintiffs' obligations under the contract, defendant made off with the boat at nighttime, without the plaintiffs' consent, as hereinbefore adverted to.
16
During defendant's stay in California, a dispute arose between the parties as to what constituted an "extra" under paragraph 2 of the contract. In effect, plaintiffs claimed that the mere hull and rough bare outline of the cabin alone constituted the completed vessel and just about everything below was an extra. Defendant, on the other hand, believed that all items shown on the final plans, which were prepared by plaintiffs, except those items specifically mentioned to him as extras in the letter of April 5, 1962,3 accompanying the contract, were part of the completed boat and were included in the contract price. However, while the letter accompanied the contract, it was not indicated therein in any wise that it was to be made a part thereof.
17
Paragraph 2 of the contract provides in part:
18
CONTRACTOR agrees to construct, build, assemble and complete said vessel in accordance with said design, plans and specifications, and any final plans and specifications to be completed by CONTRACTOR subsequent to the execution of this agreement, or after construction has been commenced by CONTRACTOR. * * * CONTRACTOR shall construct said vessel in accordance with general specifications, general arrangement drawings, and other finished drawings. CONTRACTOR shall furnish all materials required in said constructions, excepting extras and optional items desired by OWNER. (Emphasis supplied.)
And paragraph 19 states:
19
This contract contains the entire agreement between the parties, and any alteration or modification thereof shall not be effective unless also reduced to writing and executed by both parties thereto.
20
There was no evidence to show that the contract was altered or modified in the manner provided in paragraph 19.
21
The term "extra" is not defined or explained in the contract. However, there were two plans. The first was a general arrangement drawing pursuant to which the vessel was constructed. It was dated August 4, 1961, almost nine months before the signing of the contract, and showed a top and side view of the vessel with the unbroken outline of the following equipment and fixtures in various locations within the outline of the vessel: "Edison" steering pedestal, rudder, helmsman swivel chair, seat cushions, 1,500 W generator, battery, two water tanks (capacity in gallons), ice box, galley sink, "Hiller" alcohol range, shower fixtures and curtain, two wash basins, two water closets, medicine locker, foreward and aft safety nets, and a portable loading ramp.4 Placed in broken outline within the outline of the vessel are two Johnson 40 H.P. outboard motors, fuel tanks, and two removable canvas tops with their supporting poles.
22
Choy testified that the estimated contract price of $35,150.00 was for a rough bare outline of the vessel with an initial coat of paint so that the defendant, whose funds admittedly were extremely limited, could sail the vessel to the Virgin Islands where he could repaint it and add equipment to it at his convenience. He stated that the equipment and fixtures appearing on the August 4, 1961 plan, in broken lines, were placed thereon for the purpose of showing their most convenient location in the event defendant ordered any of them. Written correspondence of preliminary negotiations between the parties offered by plaintiffs to bolster Choy's position was introduced into evidence. The preliminary negotiations might have been of some aid in solving the problem as to what items fit into the category of extras, but evidence of those negotiations, with the exception of the letter of January 11, 1962,5 which the parties concede is a criteria for determining extras, were inadmissible. Under California law, which is to be applied here, when the parties have agreed that a written contract is an integration, as here, evidence of prior or contemporaneous negotiations is inadmissible to vary the terms of the written agreement. Parsons v. Bristol Development Co., 1965, 62 Cal.2d 861, 44 Cal.Rptr. 767, 402 P.2d 839; Mangini v. Wolfschmidt, 1958, 165 Cal.App.2d 192, 331 P.2d 728. The rule does not prevent a party from conceding that the contract does not express the entire agreement. Absent any indication in the contract or plans to the contrary, paragraph 2, supra, means that the plaintiffs will build and complete a vessel with all the items appearing on the plans. The illustrations in broken lines, in contrast to those in solid outlines is some indication that they might not be included in that plan, but were drawn to show their location on the completed vessel. However, the defendant admitted that the outboard motors were his responsibility. With respect to the fuel tanks shown in broken outline on the plan, the letter of January 11, 1962, which set forth the breakdown of the material and equipment which was to be included by the plaintiffs under the contract price, sets them forth as an extra, as well as the shower and electronic equipment.
23
The plaintiffs claimed $4,512.52 for extras, which sum represented the total of certain items appearing in invoices and check-marked in red pencil. Choy testified that these items were ordered by the defendant and charged to the plaintiffs' account without their consent and since there was no provision in the contract which permitted defendant to purchase items for the vessel in this maner, unless they were agreed to, they should be considered as extras. While the defendant made no effort to demonstrate that the amount claimed was within the contract price and not extras, the burden was on him to go forward with evidence concerning this sum and the jury, under proper instructions from the court, was at liberty to decide whether these items were extras to be paid for by the defendant, or whether they were within the contract price.
24
The second plan, dated January of 1963, more than nine months after the signing of the contract, outlined the assembly and location of an elaborate electrical system for the vessel. This system constituted an additional expense, for paragraph 9 of the contract states:
25
That any additional expenses incurred due to changes approved by CONTRACTOR at OWNER'S request shall be in addition to the purchase price * * *
26
The installation of the electrical wiring system was performed by a technician hired by defendant. However, Choy testified that the plaintiffs would have installed on the vessel a simple running light system consisting of three or four lights, one for each side, the stern, and perhaps one on the bow, respectively, and he would consider it fair to give the defendant an allowance for that system. Since the system installed by the defendant was a much more elaborate one, the jury should have been instructed that the defendant was entitled to a credit for the value at plaintiffs' cost of a simple running light system and that the plaintiffs should not be bound by the cost of the elaborate system set up by the defendant.
27
This case presents a complex factual situation concerning the price of the boat. It also presents a serious factual question as to whether the delay in delivery from six to eleven months was chargeable to the defendant or not. Additionally, there was the ascertainment, in conformity with the plans, of whether or not the broken lines on it indicated extras and were put in only to apprise the defendant of the proper place and whether the solid outlines in the plans indicated only those features which were to be installed in the vessel in conformity with the contract. Furthermore, it was questionable whether, as the plaintiff Choy testified, the sink was an extra or not; whether the defendant should be given an allowance for a plain toilet in place of the flush toilet which the plaintiffs installed, inasmuch as the plaintiffs claim that all the defendant was entitled to, under the contract, was a plain toilet.
28
Likewise, with respect to the generator under the plans, the jury should have been told that if they determined it to be an extra, the plaintiffs should be given credit against the more elaborate one installed by the defendant. Also in question was whether the life lines were an extra, and whether the two chain plates, as well as the safety devices for the crew and passenger, were to be considered as extras.
29
These are but a few of the items which were in sharp controversy during the trial of the case and were never set forth by the trial judge in their proper perspective. The trial judge, in his charge to the jury, merely set forth the law with respect to the case, in abstract fashion, never relating it with an relevancy to the facts which were complex in nature and which required the court to elaborate on them and to give a clear guideline for their proper determination, especially with respect to the extras, which are really at the heart of the questions here posed.
30
It is most important in the determination of the factual questions, such as this case presented, that the jury be given full and complete instructions by relating the law to the relevant evidence in the case. McNello v. John B. Kelly, Inc., 283 F.2d 96 (3 Cir. 1960). As stated in Atkinson v. Roth, 297 F.2d 570, 574 (3 Cir. 1961), "If it is to be assumed that jurors have ordinary intelligence, it may not be assumed that they are students of the law. The task of the jury, to apply the rules of law as given by the court below, certainly cannot be satisfactorily accomplished, as we pointed out in McNello, in the abstract." This applies equally to the question of whether the various amounts expended by the defendant in his claim for $7,046.29 for labor and material was done at the behest of the plaintiff and was proper and necessary for the completion of the boat according to the plans.
31
The defendant here made no objection to the charge of the court which was purely a legalistic definition of principles, as we have indicated, but by reason of the factual complexity here involved, we feel it was plain error to leave the disposition of the case to the jury under the circumstances which the court did, for if the jury was to have any understanding of the value of the matters adverted to, they should have been discussed by the court in the light of their relevancy to the law involved.
32
However, since attorney's fees and costs are awardable to the winning party, as provided in section 166 of the contract, and likewise in Section 541a(6), Title V, Virgin Islands Code, Volume 1A, in our disposition of the case, with respect to these items, we have no present concern.
33
We consider the charge of the court, as adverted to, totally inadequate in providing legal guidelines to the relevant factual situations here involved, and though no objection was raised at trial, in reviewing the evidence here, we conclude our failure to consider this as plain error would be a miscarriage of justice. Rule 51, 28 U.S.C.
34
The judgment of the lower court will be reversed and the case remanded for a new trial.
Notes:
*
Judge Stahl participated in the hearing and consideration of this appeal but died before decision
1
Paragraphs 2 and 3 of this letter read as follows:
2
It is important for you to outline any changes in general arrangement you may desire within 30 days of the date construction starts. It has been our experience that the main reason building costs exceed the stated price is due to changes insisted upon by owners during construction. This can increase labor costs by an astonishing amount. The reason for this is design changes, work slow-down and confusion, and usually additional material or construction complexity
3
The contract is based upon continuous and uninterrupted construction from lofting till launching. I wish to emphasize now that if we are forced to slow-down or halt work because of lack of funds, you must anticipate additional expense. This extra amount would be $75.00 per month for space rental plus "mothballing" costs (covering boat with tarpaulin or plastic covers). Storage costs under these conditions would amount to approximately $100 to $125 per month until construction starts again when funds are available
2
Paragraph (9) of the contract provides: "Any additional expenses incurred due to changes approved by CONTRACTOR at OWNER'S request, shall be in addition to the purchase price. * * *"
3
Paragraph 4(c) of this letter reads as follows:
4
Please note that the contract says, "is estimated not to exceed the sum of $35,150.00, etc." The reasons for not stating a fixed price are:
* * * * *
c. We've been fairly successful of holding to estimated prices, not counting extras, simply because we have a policy of submitting for the Owner's approval everything purchased for the boat (with the exception of lumber, fibreglas, resins, spars and steering equipment) before placing a firm order. In other words, you will have to approve sail costs, interior hardware list, marine hardware list, cushions and mattress prices, Generator, O/B motor and other equipment before they are purchased.
4
This listing is not necessarily a complete one
5
Counsel for defendant concedes that the letter of April 5, 1962, may be used to determine what are extras. This letter contains no criteria for making that determination. The letter of January 11, 1962, a portion of which is quoted in the beginning of the opinion, does
6
This section provides: "16) In the event that either party shall file suit to enforce this Agreement or any part thereof, it is hereby agreed that the winning party shall be entitled to a reasonable attorney's fee and all cost of suit."
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633 So.2d 1179 (1994)
The FINE ARTS MUSEUMS FOUNDATION, Appellant,
v.
FIRST NATIONAL IN PALM BEACH, A DIVISION OF FIRST UNION NATIONAL BANK OF FLORIDA, Stanley F. Reed, Jr. and Carol E. Hannon, Personal Representatives, Leland Stanford Junior University, Good Samaritan Foundation, and Olean General Hospital, Inc., Appellees.
No. 93-1715.
District Court of Appeal of Florida, Fourth District.
March 23, 1994.
Rehearing, Clarification, Certification and Rehearing Denied April 25, 1994.
*1180 David S. Pressly of Pressly & Pressly, P.A., West Palm Beach, for appellant.
Edward Downey of Downey & Downey, P.A., Palm Beach, for appellee-First Nat. in Palm Beach.
Robert W. Goldman of Goodman, Breen, Lile & Goldman, Naples, for appellee-Olean General Hosp.
Rehearing, Clarification, Certification and Rehearing En Banc Denied April 25, 1994.
PER CURIAM.
Appellant, the Fine Arts Museums Foundation (the Foundation), respondent below, appeals the probate court's order granting respondent Olean General Hospital's motion for summary judgment in this will contest case. Appellant argues that the probate court erred in ruling as a matter of law that the will is not ambiguous. Because the facts present a latent ambiguity as to the intended beneficiary, we reverse.
Charles Norton Adams (Testator) died on February 24, 1992, leaving a will executed on September 19, 1991. Testator's will devised one-sixth of the net proceeds from the sale of his real property located in Palm Beach "to [the] De Young Museum Art School, San Francisco, California, for scholarships for students in the art school, to be held in a fund to be known as `The Peggy Adams Scholarship Fund,' [to be] administered by the governing body of the school in its discretion." However, the corporate entity named the De Young Museum Art School was dissolved on March 29, 1988, before Testator executed his 1991 will. Presently, the De Young Museum and its art school are operated by the Foundation. In the event of a lapsed gift, a residuary clause names Olean General Hospital (Olean) as the residuary beneficiary.
First National in Palm Beach, as personal representative of Testator's estate, filed a petition for construction of will in the probate division of the circuit court. First National asked the probate court to construe Testator's will to determine which organization is entitled to the bequest designated for the "De Young Museum Art School." The petition named the Foundation as a potential taker.
Olean filed a motion for summary judgment, arguing that it was entitled to the disputed gift because the De Young Museum Art School corporation no longer exists and a lapsed gift becomes part of the residue of the estate. The Foundation filed a memorandum of law and an affidavit in opposition to the motion for summary judgment. In the affidavit, Charles Crocker, Testator's stepson and President of the Foundation, testified about the De Young Museum Art School:
For virtually all of its existence, the Art School was located in a back room of the De Young Museum, which is how my mother and stepfather remembered it. The Art School was not a "school" as such; no degrees were awarded, and it was simply a series of classes and programs serving the San Francisco community. The De Young Museum currently operates (and has operated) a similar series of classes and programs serving the San Francisco community.
My stepfather and mother considered the Art School to be a part of the De Young Museum, and never considered it to be a separate entity.
It was the intent of my stepfather and mother to benefit the De Young Museum, and the Art School was merely a vehicle for carrying out this intent.
The trial court granted Olean's motion for summary judgment, reasoning that the will is not ambiguous and that the devise to the De Young Museum Art School fails and thus the bequest passes to Olean, the residuary beneficiary.
The movant for summary judgment bears the burden of proving the absence of any question of material fact, and the court must draw every reasonable inference in favor of the nonmoving party. Landers v. Milton, 370 So.2d 368, 370 (Fla. 1979); Holl v. Talcott, 191 So.2d 40, 43-44 (Fla. 1966). A material fact, for purposes of a summary *1181 judgment motion, is a fact that is essential to the resolution of the legal questions raised in the case. If the record raises the slightest doubt that an issue might exist, then summary judgment is improper. Holland v. Verheul, 583 So.2d 788, 789 (Fla. 2d DCA 1991).
Determining whether a will is ambiguous is a question of law. Adkins v. Woodfin, 525 So.2d 447, 448 (Fla. 4th DCA 1988). Essential to the resolution of that legal question is the factual question of whom Testator intended to receive the devise to the "De Young Museum Art School."
Testator's will is not patently ambiguous because the will's language is not ambiguous on its face. Estate of Rice, 406 So.2d 469, 476 (Fla. 3d DCA 1981) (a patent ambiguity appears in the language of the will itself). However, the face of the will and the affidavit filed in opposition to Olean's motion for summary judgment reflect a classic latent ambiguity. A latent ambiguity arises when applying the words of a will to the subject matter of a devise or to a devisee renders the will ambiguous. In re Estate of Rice, 406 So.2d 469, 476 (Fla. 3d DCA 1981); In re Estate of Lenahan, 511 So.2d 365, 371 (Fla. 1st DCA 1987). In other words, latent ambiguities are either cases of equivocation or misnomer and misdescription. Scheurer v. Tomberlin, 240 So.2d 172, 175 (Fla. 1st DCA 1970).
The intention of the testator is the polestar of any will construction proceeding. Estate of Lenahan, 511 So.2d at 371-72. Consequently, where a latent ambiguity exists, extrinsic evidence reflecting the testator's intent is admissible. Id. at 371; Estate of Rice, 406 So.2d at 476. For example, in Scheurer, a testatrix devised trust income to her "presently-living grandchildren" who survive her but had no known grandchildren. The Fifth District held that the will contained a latent ambiguity and affirmed a trial court's decision allowing the admission of extrinsic evidence to show that the testatrix considered the children of her former husband's son to be her grandchildren. Scheurer, 240 So.2d at 176; see also Humana, Inc. v. Estate of Scheying, 483 So.2d 113 (Fla. 2d DCA 1986) (holding that devise to "Apollo Medical Center" should go to Humana, Inc., the corporation that acquired Apollo, because decedent intended to devise half her residuary estate to the hospital at which her husband was treated before his death).
In the instant case, the will contains a latent ambiguity in Testator's devise to the "De Young Museum Art School." This ambiguity arises because the De Young Museum and its art school, although no longer a corporation, still exist but are currently operated by the Foundation. Accordingly, the trial court erred in granting summary judgment in favor of Olean where the face of the will and the affidavit filed in opposition to the motion evidenced a latent ambiguity. From the four corners of the will, Testator's intent to leave a portion of his estate to the art school at the De Young Museum in San Francisco is clear, even though he mislabeled the intended beneficiary. Moreover, Testator's wish to honor his wife was evident in the will's provision for a scholarship fund to be known as "The Peggy Adams Scholarship Fund."
Because the will and affidavit raise a doubt as to an intended beneficiary, the trial court erred in ruling that the will was not ambiguous as a matter of law. Accordingly, this case was prematurely decided at the summary judgment stage. Therefore, we reverse the probate court's order granting Olean's motion for summary judgment and remand for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
GUNTHER, WARNER and POLEN, JJ., concur.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-2073
ANTOINE WRIGHT,
Plaintiff - Appellant,
versus
CHARLES E. MOORE, Sheriff; PAUL ANDERSON, Head
Doctor; MS. HASHANN, Nurse; MS. NEALY,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. Richard L. Williams, Senior
District Judge. (CA-05-324)
Submitted: February 24, 2006 Decided: May 23, 2006
Before LUTTIG1 and TRAXLER, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Vacated and remanded by unpublished per curiam opinion.
Antoine Wright, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
1
Judge Luttig was a member of the original panel but did not
participate in this decision. This opinion is filed by a quorum of
the panel pursuant to 28 U.S.C. § 46(d).
PER CURIAM:
Antoine Wright appeals the district court’s order
dismissing his 42 U.S.C. § 1983 (2000) action pursuant to 28 U.S.C.
§ 1915(e)(2)(B)(ii) (2000) for failure to state a claim. Wright
alleged that defendants, the Sheriff of the Newport News City Jail
and members of the medical staff at the jail, violated his Eighth
Amendment rights through deliberate indifference to his serious
medical needs. We vacate the decision of the district court and
remand for further proceedings.2
A pro se litigant’s pleadings should be construed
liberally to avoid inequity. Gordon v. Leeke, 574 F.2d 1147, 1151
(4th Cir. 1978). However, the district court “shall dismiss the
case at any time if the court determines that the action . . .
fails to state a claim on which relief can be granted.” 28 U.S.C.
§ 1915(e)(2)(B)(ii). We review de novo dismissals for failure to
state a claim under § 1915(e)(2)(B)(ii), to determine whether
dismissal would be appropriate under Fed. R. Civ. P. 12(b)(6). See
De’Lonta v. Angelone, 330 F.3d 630, 633 (4th Cir. 2003). “[A]
district court may dismiss a complaint for failure to state a claim
only if it appears beyond doubt that the plaintiff can prove no set
of facts that would entitle him to relief.” Lambeth v. Bd. of
Comm’rs, 407 F.3d 266, 268 (4th Cir. 2005). In evaluating such a
2
No part of this opinion should be read as an indication of
our assessment of the merits of Wright’s claims, as we conclude
only that they were prematurely dismissed.
- 2 -
dismissal, we accept as true the facts alleged in the complaint,
viewing those allegations in the light most favorable to the
plaintiff, and decide whether the pleadings allege facts that, if
proved to be true, would entitle the plaintiff to relief. Id.
A prison official unnecessarily and wantonly inflicts
pain proscribed by the Eighth Amendment by acting with deliberate
indifference to a prisoner’s serious medical needs. Estelle v.
Gamble, 429 U.S. 97, 104 (1976). In order to support such a claim,
a prisoner “must allege acts or omissions sufficiently harmful to
evidence deliberate indifference to serious medical needs.” Id. at
106. We conclude that Wright sufficiently stated such a claim of
deliberate indifference to his medical need regarding his cancer
treatment. We therefore vacate the district court’s order and
remand for further proceedings.
We dispense with oral argument because the facts and
legal contentions are adequately presented in the materials before
the court and argument would not aid the decisional process.
VACATED AND REMANDED
- 3 -
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Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of May 30 2013, 9:16 am
establishing the defense of res judicata,
collateral estoppel, or the law of the
case.
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
THOMAS C. ALLEN GREGORY F. ZOELLER
Fort Wayne, Indiana Attorney General of Indiana
JUSTIN F. ROEBEL
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
AARON WIEGAND, )
)
Appellant-Defendant, )
)
vs. ) No. 02A04-1210-CR-502
)
STATE OF INDIANA, )
)
Appellee-Plaintiff. )
APPEAL FROM THE ALLEN SUPERIOR COURT
The Honorable Frances C. Gull, Judge
Cause No. 02D05-1206-FB-93
May 30, 2013
MEMORANDUM DECISION - NOT FOR PUBLICATION
BROWN, Judge
Aaron Wiegand appeals the denial of his petition to withdraw his guilty pleas for
unlawful possession of a firearm by a serious violent felon as a class B felony and
criminal recklessness as a class C felony. Wiegand raises the issue of whether the trial
court abused its discretion in denying his request to withdraw his guilty pleas. We
affirm.
PROCEDURAL HISTORY
On June 7, 2012, the State charged Wiegand with unlawful possession of a firearm
by a serious violent felon as a class B felony and criminal recklessness as a class C
felony.1 The State and Wiegand entered into a plea agreement dated August 8, 2012,
pursuant to which Wiegand agreed to plead guilty as charged and the State agreed that
Wiegand would be sentenced to fourteen years with six years suspended for the class B
felony and to five years for the class C felony, that Wiegand would be placed on
probation for two years following the executed portion of his sentence, and that the
sentences would run concurrent with each other.
On August 8, 2012, the court held a guilty plea hearing at which Wiegand pled
guilty as charged pursuant to the plea agreement, and the court scheduled a sentencing
hearing for September 7, 2012. At the start of the September 7, 2012 hearing, Wiegand
1
The information charging Wiegand with unlawful possession of a firearm by a serious violent
felon alleged that, “[o]n or about May 23, 2012, [Wiegand], a serious violent felon, did knowingly or
intentionally possess a firearm,” and the information charging Wiegand with criminal recklessness
alleged that, “[o]n or about May 23, 2012, [Wiegand], did while armed with a deadly weapon, to wit: a
firearm, recklessly, knowingly, or intentionally perform an act which created a substantial risk of bodily
injury to another person, to wit: Cortez Harris, by discharging said firearm at and/or in the direction of []
Harris, who was located in a place where people are likely to gather . . . .” Appellant’s Appendix at 32,
34.
2
indicated that he desired to withdraw his guilty pleas, and the court provided deadlines
for Wiegand to file a written request and for the State to file a response.
On September 11, 2012, Wiegand filed a Verified Petition to Withdraw Guilty
Pleas arguing that he “wanted to take depositions of certain of the State’s witnesses to
help establish his innocence,” that “[i]n the meantime, [his] brother was incarcerated, and
[his] financial assistance went away with him,” and that “[w]ith [his] trial date
approaching and an inability in [his] mind to be properly prepared for trial in this case,
[he] felt pressured to accept the plea agreement offered by the State, so [he] signed the
agreement and entered pleas of guilty in the belief that it was [his] only option.”
Appellant’s Appendix at 12. Wiegand maintained that he was innocent of the charges
and that there was no evidence to support an argument that the State had been
substantially prejudiced by reliance upon his improper entry of pleas of guilty. On
September 17, 2012, the State filed a response to Wiegand’s petition in which it stated
that it expected “to establish by evidence at the hearing . . . that the victim [Cortez Harris]
of [Wiegand’s] alleged offense of criminal recklessness was shot to death approximately
three (3) days after [Wiegand] entered his plea of guilty” and that a “reasonable inference
from this fact . . . is that [Wiegand] wishes to withdraw his guilty plea not because he is
actually innocent, but because the victim is dead and [Wiegand] thinks this would make it
more difficult for the State to prove its case.” Id. at 18.
On September 20, 2012, the court held a hearing on Wiegand’s petition to
withdraw his guilty pleas at which the State presented the testimony of Fort Wayne
Police Officer Thomas Strausborger and the parties presented arguments. Following
3
arguments, the court denied Wiegand’s request to withdraw his guilty plea. The court
sentenced Wiegand to concurrent terms of fourteen years with six years suspended and
two years of probation for his conviction for unlawful possession of a firearm by a
serious violent felon as a class B felony and five years for his conviction for criminal
recklessness as a class C felony.
DISCUSSION
The issue is whether the trial court abused its discretion in denying Wiegand’s
petition to withdraw his guilty pleas. Ind. Code § 35-35-1-4(b) governs motions to
withdraw guilty pleas filed after a defendant has pled guilty but before the trial court has
imposed a sentence. The trial court must allow a defendant to withdraw a guilty plea if
“necessary to correct a manifest injustice.” Brightman v. State, 758 N.E.2d 41, 44 (Ind.
2001) (quoting Ind. Code § 35-35-1-4(b)). By contrast, the trial court must deny the
motion if withdrawal of the plea would “substantially prejudice” the State. Id. (quoting
Ind. Code § 35-35-1-4(b)). In all other cases, the trial court may grant the defendant’s
motion to withdraw a guilty plea “for any fair and just reason.” Id. (quoting Ind. Code §
35-35-1-4(b)).
“Manifest injustice” and “substantial prejudice” are necessarily imprecise
standards, and an appellant seeking to overturn a trial court’s decision faces a high hurdle
under the current statute and its predecessors. Coomer v. State, 652 N.E.2d 60, 62 (Ind.
1995). “The trial court’s ruling on a motion to withdraw a guilty plea arrives in this
Court with a presumption in favor of the ruling.” Id. We will reverse the trial court only
for an abuse of discretion. Id. In determining whether a trial court has abused its
4
discretion in denying a motion to withdraw a guilty plea, we examine the statements
made by the defendant at his guilty plea hearing to decide whether his plea was offered
“freely and knowingly.” Id. See also Davis v. State, 770 N.E.2d 319, 326 (Ind. 2002)
(holding that a trial court’s decision on a request to withdraw a guilty plea is
presumptively valid, and a party appealing an adverse decision must prove that the court
has abused its discretion), reh’g denied.
Wiegand contends that he presented evidence that there was a fair and just reason
to grant his petition to withdraw his guilty pleas and that he testified at the September 7,
2012 hearing that there was a witness he believed needed to be deposed, that he believed
he lost the financial ability to have the deposition taken by his private counsel when his
brother became incarcerated, and that the deadline to accept the plea agreement put
additional pressures on him and overcame his free will. Wiegand argues that there was
no evidence that the State would have been prejudiced by the withdrawal of the guilty
plea, that the untimely death of the victim of the gunshot did not create any prejudice as
the victim would not have been able to identify Wiegand as the person who fired the
shots but only that he had been shot, and that the State had other witnesses which were to
be used to identify him as the perpetrator.
The State argues that Wiegand has not shown that the denial of his petition
resulted in manifest injustice and that the trial court was not required to believe
Wiegand’s representations that the guilty plea was the result of undue pressure. The
State also argues that the State would have suffered substantial prejudice if Wiegand was
permitted to withdraw his pleas, that the State presented evidence that the victim, Cortez
5
Harris, was killed in a manner the prosecutor described as an execution three days after
Wiegand’s guilty plea, that the circumstances of Harris’s death made other witnesses
reluctant to testify, and that, while there may have been other avenues for the State to
prove Wiegand’s guilt, this change in circumstances following the guilty plea hearing
significantly complicated the State’s ability to prosecute the case.
The record reveals that at the August 8, 2012 guilty plea hearing, Wiegand
indicated that he had never been treated for any mental illness and to his knowledge did
not suffer from any mental or emotional disability and that he was not under the influence
of alcohol or drugs that would affect his understanding of the proceedings. The court
questioned Wiegand regarding his understanding that he would be giving up certain
rights by pleading guilty, including the right to face all witnesses against him and to see,
hear, question, and cross-examine these witnesses, and Wiegand indicated that he
understood these rights. The trial court then asked Wiegand whether he understood
various constitutional rights, and Wiegand responded that he understood those rights. The
court asked Wiegand whether he understood that by pleading guilty to an agreement
calling for a specific term of years he waived his right to appeal the sentence, and
Wiegand responded affirmatively. The trial court recited the information against
Wiegand, the State’s burden of proof, and the range of penalties and possible fines.
The court also recited the terms of the plea agreement signed by Wiegand,
including the terms related to the sentences which would be imposed with respect to each
conviction. When questioned by the court, Wiegand indicated that no one had forced or
threatened him to cause him to plead guilty to the charges and that his plea of guilty was
6
his own free and voluntary act. Wiegand admitted that, on May 23, 2012, he was in Fort
Wayne, Allen County, Indiana, that on that day he was in possession of a firearm, and
that on that date he was, based on a prior felony conviction, classified as a serious violent
felon. Wiegand further admitted that he fired the firearm at or in the vicinity of a person
named Cortez Harris, that he recklessly, knowingly, or intentionally fired the firearm
creating a substantial risk of bodily injury to Harris, and that at the time Harris had been
present at an apartment complex in an area where a number of people were gathered. The
court admitted into evidence an exhibit containing a certified copy of Wiegand’s prior
conviction as part of the factual basis for Wiegand’s plea of guilty to unlawful possession
of a firearm by a serious violent felon. The court found that Wiegand understood the
nature of the charges against him, understood the possible sentences and fines thereunder,
that his plea was freely and voluntarily made, and that the plea was accurate and there
was a factual basis for the plea.
At the September 7, 2012 hearing, Wiegand indicated that he desired to withdraw
his guilty plea. The prosecutor stated that the State believed that Wiegand’s “newly
desired plea of innocence is based upon the fact that Cortez Harris was executed
subsequent to his plea of guilty in this matter so he’s no longer available” and that the
State “does have other witnesses but the plea was entered into with the evaluation of the
likelihood that witnesses would come forward and cooperate.” September 7, 2012
Transcript at 5. Wiegand testified in part that “[u]nder the circumstances [he] [was]
innocent,” that at the time he signed the plea agreement he “was under a lot of pressure
and stress,” that the prosecutor “gave [him] a two day deadline and it was either that or
7
trial and [he] only had two weeks for trial,” that he “felt like [he] wasn’t ready for trial,”
that he “didn’t get to do [his] depositions like [he] wanted to because [his] brother got
locked up and was means for paying [Wiegand’s] lawyer for trial,” and that he “signed
the plea under the impression that [] was [his] only option.” Id. at 7. The court asked
Wiegand whether he was lying when he signed the plea agreement and when he pled
guilty under oath on August 8, 2012, and Wiegand responded “Well I did if I didn’t
commit them crimes” and that he did not commit the crime. Id. at 9.
At the September 20, 2012 hearing, Police Officer Thomas Strausborger testified
that he was one of the investigating officers of the shooting that occurred on May 23,
2012, at the apartment complex where Cortez Harris had been shot. Officer Strausborger
testified that Wiegand had been identified as the shooter by various witnesses and that
police were looking at the shooting as gang related. Officer Strausborger testified that
Harris was the victim of a homicide which occurred on August 11, 2012, that he assisted
with the investigation of the homicide, that the homicide was investigated as gang
related, and that police “felt it kind of odd that the victim of the original shooting that was
going to be a possible witness in a trial was a victim of a homicide.” September 20, 2012
Transcript at 8.
Officer Strausborger further testified that police had video footage of the shooting
of Harris which showed that a vehicle pulled up alongside Harris, that Harris exited his
vehicle, and that there was a single gunshot to Harris’s face. Officer Strausborger
testified that, prior to the August 11, 2012 death of Harris, he had been working with the
various witnesses who would be testifying against Wiegand and that, while they were
8
hesitant, he believed they were going to be cooperative. Officer Strausborger testified
that he had contact with the witnesses since the death of Harris on August 11, 2012, and,
when asked if the witnesses are still expressing the same degree of cooperation, testified
that one of the witnesses was a juvenile and his mother was extremely fearful for her son
and that the other witnesses were very hesitant. Officer Strausborger indicated that in his
opinion he could not assure the court that those witnesses would come forward and
testify. On cross-examination, Officer Strausborger indicated that Harris was not an
identification witness in the case but a witness to the fact that he had been shot and
received treatment at the hospital and that the other witnesses in the case were the
identification witnesses. Wiegand’s counsel argued in part that Harris was not an
identification witness, that the other witnesses are still available, and that the “alleged
prejudice . . . arises to no more th[a]n speculation at this juncture . . . .” Id. at 15. The
prosecutor argued that Harris was brutally murdered in an apparent act of an intentional
homicide, that Wiegand was not pressured into entering his plea of guilty, that Wiegand’s
defense counsel never communicated anything about needing depositions, that there were
three or four witness that were going to identify Wiegand, and that “[y]ou can’t tell” the
witnesses that their lives are “not in danger.” Id. at 20. The court found that Wiegand’s
self-serving statements did not support a withdrawal of his guilty pleas and that Wiegand
did not carry his burden to demonstrate a manifest injustice if the court did not allow him
to withdraw his pleas of guilty.
A defendant has the burden to prove by a preponderance of the evidence and with
specific facts that he should be permitted to withdraw his plea. Ind. Code § 35-35-1-4(e);
9
Smith v. State, 596 N.E.2d 257, 259 (Ind. Ct. App. 1992). We observe that Wiegand
essentially contends that he lied under oath at the guilty plea hearing. The court was
permitted to find Wiegand’s testimony at the hearing on his petition to withdraw to be
less than credible. See Gipperich v. State, 658 N.E.2d 946, 949 (Ind. Ct. App. 1995)
(holding that “[t]he trial court did not abuse its discretion in determining that [the
defendant’s] self-serving statements after the guilty plea hearing were incredible and
constituted an attempt to manipulate the system” where the defendant alleged that he had
lied at the plea hearing when he admitted to the charges), trans. denied.
We also observe that Wiegand succeeded in convincing the court at the guilty plea
hearing that he knew what he was doing when he pled guilty and that his decision was
not prompted by undue pressure or coercion. While there is always some chance that a
defendant might give less than candid responses, we cannot say under the circumstances
presented that the contradiction between Weigand’s testimony at the guilty plea hearing
and his subsequent claims of undue pressure, coercion, and an inability to depose certain
witnesses due to time or financial restraints as described by Wiegand present the factual
basis necessary to overcome the presumption favoring the trial court’s ruling. See
Coomer, 652 N.E.2d at 62-63 (noting that the defendant’s testimony did not provide the
necessary factual basis to overcome the presumption favoring the trial court’s ruling
where there was a contradiction between the defendant’s testimony at the guilty plea
hearing and his subsequent claims of coercion); see also Brightman, 758 N.E.2d at 46
(holding that the trial court did not abuse its discretion in denying the defendant’s request
to withdraw his guilty plea where the trial court observed the defendant’s testimony at the
10
guilty plea hearing and the hearing on his request to withdraw and found that his
testimony at the latter was not credible).
Based upon our review of the record, we conclude that Wiegand has not overcome
the presumption of validity accorded the trial court’s denial of his petition to withdraw
his guilty pleas. Such a denial was within the discretion of the court, and we cannot say
its refusal to allow Wiegand to withdraw his guilty pleas constitutes manifest injustice.
See Coomer, 652 N.E.2d at 63 (holding that “Coomer has not overcome the presumption
of validity accorded the trial court's denial of his motion to withdraw his guilty plea” and
that “[s]uch a denial was within the discretion of the court, and we cannot say its refusal
to allow Coomer to withdraw his guilty plea constitutes manifest injustice.”).
CONCLUSION
For the foregoing reasons, we affirm the trial court’s denial of Wiegand’s petition
to withdraw guilty pleas.
Affirmed.
RILEY, J., and BRADFORD, J., concur.
11
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504 So.2d 546 (1987)
Gigi Gil FRANCESE, Appellant,
v.
TAMARAC HOSPITAL CORPORATION, d/b/A University Community Hospital, Appellee.
No. 4-86-0634.
District Court of Appeal of Florida, Fourth District.
April 1, 1987.
Benjamin D. Rust, Susan S. Lerner and James C. Blecke, Miami, for appellant.
Rex Conrad and Valerie Shea of Conrad, Scherer and James, Fort Lauderdale, for appellee.
RIVKIND, LEONARD, Associate Judge.
Appellant appeals a final summary judgment which held that her action for medical *547 malpractice was barred by the statute of limitations.[1]
The issue before the trial court, and before this court, was whether the amended complaint related back to the date of the filing of the original complaint.[2] The trial court concluded it did not; therefore, plaintiff's suit was time barred. We disagree; consequently, we reverse.
Appellant filed a complaint against "University Community Hospital at 7201 North University Drive, Tamarac, Florida." Tamarac Hospital Corporation, not a named party, did business as University Community Hospital at the address shown in appellant's original complaint.[3] The complaint was mistakenly served upon the registered agent for a Tampa hospital also operating as "University Community Hospital." Service of process was refused. Appellant, learning of the error, subsequently served the administrator of the Tamarac Hospital but once again failed to name the corporate entity which operated the hospital. Finally, by a fourth amended complaint, appellee, Tamarac Hospital Corporation d/b/a University Community Hospital, was named defendant and served with process. By this time, over two years had passed from the date of the incident giving rise to appellant's claim.
Appellee successfully contended in the trial court that the corporation named in the amended complaint was a new party, and that the amendment did not involve the correction of a misnomer, as appellant contended. The same contentions are made here.
The general rule is: "An amendment which merely corrects a misnomer might well relate back to the date the complaint was originally filed but this relation back rule is inapplicable where the effect is to bring new parties into the suit." Louis v. South Broward Hospital District, 353 So.2d 562, 563 (Fla. 4th DCA 1977).
Although the rule is clear, its application is cloudy. The reported decisions attest to the difficulty experienced in applying the general rule to a particular case.[4]
Our supreme court in Cabot v. Clearwater Construction Company, 89 So.2d 662 (Fla. 1956), applied the relation back doctrine to an amendment which changed the description of the defendant from a corporation to an individual after the running of the statute of limitations. The court stated "that since the adoption of the New Rules of Civil Procedure on January 1, 1950, Florida can more appropriately align itself with the more liberal view in allowing amendments of this nature." The court further stated:
No longer are we concerned with the "tricks and technicalities of the trade." The trial of a lawsuit should be a sincere effort to arrive at the truth. It is no longer a game of chess in which the technique of the maneuver captures the prize.
Id. at 664.
In the instant case, appellant's original complaint, admittedly filed within the period of the statute of limitations, named University Community Hospital, at 7201 North University Drive, Tamarac, Florida. The amended pleading named Tamarac Hospital Corporation d/b/a University Community Hospital at the address shown in the original complaint. We have decided that the amendment naming the corporation which operated the hospital was nothing more than the rectification of a misnomer. Therefore, the amended pleading related back to the date of filing the original complaint *548 and the action was commenced within the period of the statute of limitations.[5]
Appellee's reliance on Louis v. South Broward Hospital, 353 So.2d 562 (Fla. 4th DCA 1977), is misplaced. The facts in Louis were stated by the court as follows:
The original complaint named "Hollywood Memorial Hospital of West Hollywood." The summons issued pursuant to the original complaint named "Hollywood Memorial Hospital ... North Broward Hospital District." The amended summons and complaint named "South Broward Hospital District." The North and South Broward Hospital Districts were listed in the different summonses at entirely different addresses. Here the trial court was correct in entering summary judgment for the defendant, "South Broward Hospital District," on the ground that the action was instituted subsequent to the running of the applicable statute of limitations.
Id. at 563.
That case is distinguishable. In Louis, there was substantial confusion concerning the identity of the defendant. Here, there was no confusion. The original complaint left no doubt as to the identity of the defendant intended to be sued.
REVERSED AND REMANDED.
NOTES
[1] Section 95.11(4)(b) of the Florida Statutes (1981).
[2] Florida Rule of civil Procedure 1.190 provides in part:
(c) Relation Back of Amendments. When the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment shall relate back to the date of the original pleading.
[3] Paragraph 5 of the original complaint alleged as follows: "That at all times material hereto the defendant, University Community Hospital, was and is a Florida corporation authorized to do and in fact doing business at 7201 North University Drive, Tamarac, Florida."
[4] See Annot., 8 A.L.R.2d 6 (1949).
[5] In view of this disposition, we need not address appellant's second point on appeal, namely, that there remained an issue of fact as to when the cause of action was or could have been discovered to commence the running of the statute of limitations.
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187 B.R. 508 (1995)
In re Charles Marvin KAHLER, Debtor.
HOUSEHOLD FINANCE CORP., Plaintiff,
v.
Charles Marvin KAHLER, Defendant.
Bankruptcy No. 95-21050-J. Apn. No. 95-2084-J.
United States Bankruptcy Court, E.D. Virginia, Norfolk Division.
October 10, 1995.
*509 *510 Glenn R. Tankersley, Virginia Beach, VA, for debtor.
MEMORANDUM OPINION AND ORDER
STEPHEN C. ST. JOHN, Bankruptcy Judge.
This case is before the Court on Household Finance Corp.'s (Household) complaint to determine the dischargeability of two debts incurred by the debtor, Charles Marvin Kahler, pursuant to § 523(a)(2)(A). After reviewing the evidence and the arguments of counsel, we make the following determinations.
FINDINGS OF FACT
The facts in this matter are uncontroverted. The debtor was a self-employed home improvement contractor who historically earned approximately $20,000 per year. His financial troubles began when he decided to invest in the commodities market. Like other investors in this extremely volatile market, he stood to earn a substantial return had his investments turned out as he had hoped. However, his investments failed and his financial condition plummeted accordingly. By the summer of 1994, he had lost almost all of his savings and accumulated large debts. Despite losing and owing much, the debtor continued to trade in commodities, apparently covering his margins with borrowed money. The debtor maintained this course of action hoping that his investments would somehow rebound to restore his prosperity. Any rebound in the market came too late for the debtor, who ceased trading by *511 January 19, 1995 when he was unable to satisfy his margin calls.
During the period in which he actively traded in commodities, the debtor financed his living expenses with his savings and borrowed money. Before April 1994, the debtor paid his living expenses and trading costs with his savings. However, after April 1994, the debtor borrowed and incurred credit card debts to cover these losses and expenses.
Deciding that filing bankruptcy would be necessary, the debtor met with his counsel on February 4, 1995. On March 2, 1995, the debtor filed the present bankruptcy petition, in which he scheduled $135,358 of unsecured debts. Most of the unsecured debts originated from advances and charges received from credit cards and other lines of credit.
The debts at issue were incurred when the debtor received two cash advances totalling $2,400.00 from Household. Before these transactions, the debtor had no business relationship with Household. Notwithstanding the fact that the debtor had 19 credit card with substantial debts on each, Household sent him a check for $1,500.00 on December 8, 1995. The debtor did not apply for nor solicit this check. In addition, Household did not require the debtor to make any disclosure of his financial status and the debtor made no representation to Household regarding the same. The proceeds from this advance were used by the debtor to pay his margin losses so that he could continue to hold his commodity investments.
The debtor received a second check from Household on January 16, 1995. This time a representative of Household called the debtor and told that him that he was entitled to receive another check for $900.00. Again, Household did not ask the debtor about his financial condition and the debtor did not make any statements regarding the same. The debtor accepted the offer and cashed the check when it arrived. Once more he used the proceeds to cover his margin losses. The debtor did not make any payments toward the debts. Household offered no evidence at trial as to any credit checks or investigations of the debtor at the time of either of the two advances, nor did it offer any evidence about how Household came to select the debtor for its offer of credit.
CONCLUSIONS OF LAW
The exceptions to a discharge are governed by 11 U.S.C. 523. The subsection affecting the instant debts states:
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt
(2) for money, property, services, or an extension, renewal, or renewal, or refinancing of credit, to the extent obtained by
(A) false pretense, a false representation, or actual fraud, other than a statement respecting the debtor's or insider's financial condition . . .
11 U.S.C. 523(a)(2)(A) (1995).
In addition, certain cash advance debts are presumed nondischargeable under § 523(a)(2)(C), which states:
[F]or purposes of subparagraph (A) of this paragraph . . . cash advances aggregating more than $1,000 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 60 days before the order for relief under this title, are presumed to be non-dischargeable . . . 11 U.S.C. 523(a)(2)(C) (1995).
To obtain a judgment rendering a debt nondischargeable under § 523(a)(2)(A), a creditor must establish:
(1) that the debtor made the representation;
(2) that at the time, the debtor knew the representation was fraudulent;
(3) that the debtor's conduct was with the intention and purpose of deceiving or defrauding the creditor;
(4) that the creditor relied on the debtor's representations;
(5) that the creditor sustained loss and damage as the proximate result of the representation.
Lawyers Title Insurance Company v. Pitt (In re Pitt), 157 B.R. 585, 587 (E.D.Va.1991); Maneval v. Davis (In re Davis), 155 B.R. *512 123, 131 (Bankr.E.D.Va.1993); Western Union Corp. v. Ketaner (In re Ketaner), 154 B.R. 459, 464-465 (Bankr.E.D.Va.1992); Zedd v. Sandler (In re Sandler), 143 B.R. 67, 70 (Bankr.E.D.Va.1992); In re Fravel, 143 B.R. 1001, 1006 (Bankr.E.D.Va.1992); Visotsky v. Woolley (In re Woolley), 145 B.R. 830 (Bankr.E.D.Va.1991); Central Fidelity Bank and Virginia First Savings Bank, F.S.B. v. Higginbotham (In re Higginbotham), 117 B.R. 211, 214 (Bankr.E.D.Va.1990).
The creditor bears the burden of proof by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991).
We first address Household's argument that the debts arising from both checks are presumed nondischargeable under § 523(a)(2)(C). In support of this conclusion, Household argues that the 60-day presumption period begins to toll from the date that the debtor first contacted his attorney in contemplation of bankruptcy. This construction, it argues, is consistent with the intent of preventing debtors from incurring debts with an eye toward filing bankruptcy. We reject this construction of § 523(a)(2)(C). In the absence of any ambiguity, statutory construction should be limited to the plain language of the statute. United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). The plain language of § 523(a)(2)(C) clearly provides that the presumption of nondischargeability period is 60 days before the order for relief under this title. Accordingly, there is no presumption of nondischargeability for these debts for purposes of § 523(a)(2)(A).
Turning back to § 523(a)(2)(A), we address the core of Household's complaint. The first element requires Household to prove that the debtor represented his ability to pay or intent to repay. Household argues that the debtor represented his ability or intent to repay when he cashed the checks received from Household. In contrast, the debtor argues that he made no representations of any kind. No representation was made, the debtor argues, because the checks were unsolicited and information about his financial condition was not disclosed. Consequently, the debtor contends, the acceptance of these checks, without more, negates the existence of this element.
Misrepresentation may be implied by silence. Central Bank v. Kramer (In re Kramer), 38 B.R. 80, 82 (Bankr.La.1984). No overt misrepresentation is required under § 523(a)(2)(A). Peterson v. Bozzano (In re Bozzano), 173 B.R. 990, 993 (Bankr.M.D.N.C. 1994); Kramer, 38 B.R. at 82. Instead, omissions or a failure to disclose by the debtor can constitute misrepresentations for the purposes of nondischargeability where the circumstances of the cases are such that omissions or failure to disclose creates a false impression which is known by the debtor. Bozzano, 173 B.R. at 993-994. A misrepresentation may exist notwithstanding the finding that he did not affirmatively state a misrepresentation or was never asked to disclose pertinent facts. Bozzano, 173 B.R. at 993-994. In the instant case, the debtor's failure to disclose his financial troubles constitutes misrepresentations. When he cashed the checks and when he spoke with Household, his failure to disclose his financial troubles created the false impression that he could pay. Accordingly, we conclude that the debtor impliedly represented his financial condition when he cashed the checks.[1]
The second element requires Household to prove, that the at the time of the representation, the debtor knew the representation *513 was fraudulent. Household contends that the loss of his savings, the failure of his commodity holdings, and the lack of another income source are evidence that the debtor knew or should have known that he could not repay this debt when he incurred it. In contrast, the debtor argues that the representation was not fraudulent because he believed that by using the proceeds from Household to hold his commodities investment would allow him to weather his losses until they became profitable and thus allow him to pay his debts.
When the debtor received the checks, the debtor was suffering severe financial problems. He had lost his savings and could no longer pay his margin losses. Any possibility of repayment was remote. With these problems, the debtor knew or should have known that he did not have the ability or the intent to repay. Accordingly, we conclude that the debtor knew or should have known that his representations were fraudulent when he made them.
The third element requires Household to prove that the debtor made the misrepresentations with the intent to defraud. Because direct proof of fraudulent intent is almost impossible to produce, fraudulent intent can be inferred from circumstantial evidence. Ketaner, 154 B.R. at 465. Additionally, where a person recklessly makes false representations that the person knows or should know will induce another to rely on it, intent to deceive may logically be inferred. United Leasing Corp. v. Roop, 48 B.R. 310, 312 (E.D.Va.1985); Ketaner, 154 B.R. at 465; Woolley, 145 B.R. at 834; Fravel, 143 B.R. at 1010. However, the recklessness must exceed negligence and rise to the level of reckless disregard for truth. Ketaner, 154 B.R. at 465; Fravel, 143 B.R. at 1010; Woolley, 145 B.R. at 830.
In the instant case, the debtor knew of his serious financial problems when he cashed the checks. He had no source of income and financed his living expenses with his credit cards. With other debts, including margin losses from the commodities trading, acutely mounting, we are not persuaded by the debtor's assertion that he thought he could repay. Furthermore, there was no indication how the debtor would or could be able to repay any of the debts. These facts together lead us to find that the debtor recklessly disregarded the truth when he represented that he had the ability to repay. Accordingly, we conclude that the debtor had the requisite fraudulent intent when he made the representations.
The fourth element requires that the creditor relied on the debtor's representations. Household contends that reliance in credit card transactions exists every time a debtor used the card. We agree. Direct proof of reliance is difficult in credit card cases. Whereas reliance in the normal credit transaction contemplates that the issuer of credit make personal inquiry of the debtor at the time of each credit transaction, credit card cases involve a continuing relationship between the debtor and creditor and only infrequent inquiry as to the continuing state of the debtor's financial affairs. First Deposit National Bank v. Pursley (In re Pursley), 158 B.R. 664, 669 (Bankr.N.D.Ohio 1993). As a result, reliance, or lack thereof, cannot be shown as it is in the normal credit transaction by the creditor's conduct in response. Pursley, 158 B.R. at 669. Consequently, actual reliance is evidenced by the fact that the card holder actually used the card. Bank of Virginia v. Davis (In re Davis), 42 B.R. 611, 613 (Bankr.E.D.Va.1984) and cases cited therein; Pursley, 158 B.R. at 669.
In addition, the direct card industry functions upon the issuer's guarantee of payment to the merchant. Citicorp Credit Services, Inc. v. Hinman (In re Hinman), 120 B.R. 1018, 1022 (Bankr.N.D.1990). Reliance by the issuer is inherent in the system because a card holder in using the credit card forces the issuer to honor its guarantee to the merchant. Hinman, 120 B.R. at 1022. The debtor, in presenting the card and thereby forcing the issuer to honor its guarantee to merchants necessarily compels reliance by the issuer. Hinman, 120 B.R. at 1022, citing In re Cullen, 63 B.R. 33, 36 (Bankr.E.D.Mo. 1986).
Although Household relied upon the debtor's misrepresentations, it must also prove that its reliance was reasonable. We *514 note that the circuits disagree on whether a creditor must show reasonable reliance.[2] However, most of the courts in this circuit require the creditor's reliance to be reasonable. See Maurer v. Mallen (In re Mallen), 146 B.R. 681, 683 (Bankr.E.D.Va.1992), (mere persuasion by strong personality does not ordinarily amount to fraud, absent some false pretense or misrepresentation upon which the victim reasonably relies); Seymour v. Yates (In re Yates), 118 B.R. 427, 432 (Bankr.S.C.1990), (creditor failed to show reasonable reliance); Lisk v. Criswell (In re Criswell), 52 B.R. 184, 198 (Bankr.E.D.Va. 1985), (reasonable reliance is an element of a cause of action under § 523(a)(2)(A); Borg-Warner Acceptance Corporation v. Lipscomb (In re Lipscomb), 41 B.R. 112, 117 (Bankr. E.D.Va.1984); Cuneo v. Smith (In re Cuneo), 25 B.R. 396, 398 (Bankr.Md.1982), (unsophisticated creditor reasonably relied upon misrepresentations of businessman due to special relationship); Bialek's Medical Arts Clinical Reference Laboratory, Inc. v. Patch (In re Patch), 22 B.R. 970, 972 (Bankr.Md. 1982), (debt discharged because plaintiffs unreasonably relied on misstatements); see Lawyers Title Insurance Company, 157 B.R. at 589, (assuming, without deciding, that the more significant showing of reasonable reliance is required, creditor's reliance was unreasonable); Cf. Rowe v. Showalter (In re Showalter), 86 B.R. 877, 881 (Bankr.W.D.Va. 1988), (reliance in loans between friends does not need to be reasonable) and O'Connor, CPO, Inc. v. Booker (In re Booker), 165 B.R. 164 (Bankr.M.D.N.C.1994), (finding that creditors were reasonable in their reliance although the court declines to rule whether there is such a reasonableness requirement).
To determine whether a creditor was reasonable in its reliance, other courts have examined several factors, which may include:
(1) whether the debtor and creditor had a business relationship;[3]
(2) whether the creditor conducted a credit check;
(3) whether the creditor examined the debtor's record in meeting his credit card debts;[4]
(4) whether there had been previous dealings with the debtor that produced a relationship of trust;[5]
(5) whether the debt was incurred for personal or commercial reasons;[6]
(6) whether there were any red flags that would have alerted an ordinary prudent lender to the possibility that the representations relied upon were not accurate;[7]
(7) whether minimal investigation would have revealed the inaccuracy of the debtor's representation;[8]
*515 (8) whether the debtor and creditor had a personal relationship;[9]
(9) the sophistication of the parties;[10]
(10) whether the creditor or the debtor solicited the extension of credit;[11]
(11) the length of time of any relationship.
In the case sub judice, the debtor had no personal or business relationship with Household before receiving the first unsolicited check in the mail. Household, a sophisticated creditor, had only a 1-month relationship with the debtor when it telephoned the debtor to offer the second check. In addition, Household did not provide any evidence that it conducted a credit check or whether it examined the debtor's record in meeting his credit card debts. A credit check likely would have raised red flags that would alert an ordinary prudent lender to the possibility that the representations relied upon were not accurate. A minimal inquiry into the debtor's finances would have revealed that he made about $20,000 per year with tremendous debt. This minimal investigation also presumably would have revealed the inaccuracy of the debtor's representation and alerted the creditor that the risk of loss in extending credit to him would be great. While a requirement of inquiry before each extension of credit would be impracticable in some credit transactions, a creditor has a duty to make some inquiry into the debtor's financial condition before extending credit. Chech, 96 B.R. at 784. Furthermore, a creditor can hardly be heard to complain about a debtor's implied misrepresentation concerning his ability to pay and its reliance thereon if it neglected to conduct some inquiry before providing credit to the debtor or ignored its results. Chech, 96 B.R. at 784. With the foregoing analysis in mind, we conclude that Household was not reasonable in its reliance of the debtor's representations. Accordingly, we hold that the debts at issue are dischargeable.
We also note that our conclusion is supported by Manufacturer's Hanover Trust Company v. Ward (In re Ward), 857 F.2d 1082 (6th Cir.1988), in which substantially similar facts exist. In Ward, the creditor sought to except from discharge a debt incurred by the debtor from the use of a credit card under § 523(a)(2)(A). Similar to the case at bar, the creditor engaged in direct mail solicitation to enroll new members. The creditor mailed a credit card to the debtor with a pre-approved credit limit. During a 23-day period the debtor incurred debts on the account. The creditor did not request a financial statement from the debtor nor conducted a credit check, which would have revealed 12 credit card debts (and an embezzlement conviction ordering a restitution of $250,000). Like the case at bar, the creditor here did not provide evidence that it conducted a credit check. The court held that the debt was dischargeable because the creditor's reliance upon the debtor's misrepresentation (that he would repay) was unreasonable as a matter of law absent evidence that the creditor conducted even a superficial credit investigation. Ward, 857 F.2d at 1084.
We are persuaded by the analysis in Ward and adopt its policy considerations. The court in Ward stated:
From the perspective of the bankruptcy proceeding, it is inequitable to reward a possibly imprudent creditor who failed to detect the debtor's misrepresentation by excepting her debt from discharge, while the debtor's other more prudent creditors have their claims evaluated collectively. As a matter of fairness among creditors, it is inappropriate to allow a creditor who is likely to have been imprudent to participate in the liquidation of the debtor's assets. Ward, 857 F.2d at 1084-1085, citing Zeigler, The Fraud Exception to Discharge in Bankruptcy: A Reappraisal, 38 Stan.L.Rev. 891, 907-08 (Feb. 1986).
Furthermore, the decision will encourage financial institutions to more prudently investigate *516 the credit worthiness of high-risk borrowers and will deter potential debtors from engaging in credit card fraud. Ward, 857 F.2d at 1085. Disallowing a non-dischargeability claim when the financial institution fails to investigate would best comport with the intent of Congress (which was concerned that creditors investigate and verify debtors' information) and would discourage fraudulent credit transaction. Id. Our result would prevent preferential protection, at the expense of other unsecured creditors, to financial institutions that profit from extending consumer credit at the risk of non-payment, which risk is factored into finance charges. Id.
ORDER
For the reasons stated above, the debts are hereby dischargeable pursuant to § 523(a)(2)(A). Since the debtor received his discharge on June 7, 1995, these debts are now DISCHARGED.
The Clerk shall mail copies of this Memorandum Opinion and Order to counsel for the debtor and for Household.
IT IS SO ORDERED.
NOTES
[1] We recognize that the instant case is different from the ordinary credit card cases, in which the courts have created the implied misrepresentation rationale, in that the debtor in the instant case dealt directly with the creditor instead of a third-party merchant. Third party credit card transactions are not typical fraud cases due to the difficulty, if not impossibility, of applying the concepts of representation and reliance. First, the creditor seeking relief is not the merchant who accepts the representation that the creditor will pay him. Second, there is an ongoing relationship between the debtor and the creditor with only infrequent inquiry being made concerning the status of the debtor's financial condition. Recognizing this problem, courts have modified the element of representation. The majority position appears that the debtor implies a representation to the creditor that he has both the intent and ability to pay purchases and advances.
[2] Circuits requiring the reliance to be reasonable: Century 21 Balfour Real Estate v. Menna (In re Menna), 16 F.3d 7 (1st Cir.1994); Longo v. McLaren (In re McLaren), 3 F.3d 958 (6th Cir. 1993); First Bank of Colorado Springs v. Mullet (In re Mullet), 817 F.2d 677 (10th Cir.1987); Schweig v. Hunter (In re Hunter), 780 F.2d 1577 (11th Cir.1986); First National Bank of Red Bud v. Kimzey (In re Kimzey), 761 F.2d 421 (7th Cir.1985), but see Mayer v. Spanel International Ltd., 51 F.3d 670 (7th Cir.1995), (doubting that Kimzey was right and relied upon actual knowledge standard).
Circuits not requiring the reliance to be reasonable: Allison v. Roberts (In re Allison), 960 F.2d 481 (5th Cir.1992); In re Ophaug, 827 F.2d 340 (8th Cir.1987).
The Ninth Circuit requires justifiable reliance: Eugene Parks Law Corporation Defined Benefit Pension Plan v. Kirsh (In re Kirsh), 973 F.2d 1454 (9th Cir.1992).
[3] See The May Co. v. Chech (In re Chech), 96 B.R. 781, 784 (Bankr.N.D.Ohio 1988), (one-year credit relationship between creditor and debtor did not establish reasonable reliance); Booker, 165 B.R. at 170, (eight-year relationship between creditor and debtor was a basis for reasonable reliance).
[4] First Deposit National Bank v. Pursley (In re Pursley), 158 B.R. 664, 669 (Bankr.N.D.Ohio 1993).
[5] BancBoston Mortgage Corporation v. Ledford (In re Ledford), 970 F.2d 1556, 1560 (6th Cir. 1992).
[6] Ledford, 970 F.2d at 1560.
[7] Ledford, 970 F.2d at 1560.
[8] Ledford, 970 F.2d at 1560.
[9] See Booker, 165 B.R. at 170, in which the creditors were reasonable in the reliance of the debtor's misrepresentations since they considered the debtor a friend and trusted him with their financial matters.
[10] Cuneo v. Smith (In re Cuneo), 25 B.R. 396 (Bankr.Md.1982), in which an unsophisticated hair stylist creditor reasonably relied upon misrepresentations of high-powered businessman.
[11] See Manufacturer's Hanover Trust Company v. Ward (In re Ward), 857 F.2d 1082 (6th Cir.1988).
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904 F.2d 732
284 U.S.App.D.C. 276
FARMLAND INDUSTRIES, INC., Appellant,v.GRAIN BOARD OF IRAQ, et al.
No. 89-7127.
United States Court of Appeals,District of Columbia Circuit.
Argued May 14, 1990.Decided June 12, 1990.
Richard M. Ziccardi, with whom Curtis E. Pew, New York City, and Jack P. Janetatos, Washington, D.C., were on the brief, for appellant.
Michael T. Shor, with whom William D. Rogers and Hadrian R. Katz, Washington, D.C., were on the brief, for appellees.
Before RUTH B. GINSBURG, SILBERMAN, and THOMAS, Circuit Judges.
Opinion for the Court filed by Circuit Judge SILBERMAN.
SILBERMAN, Circuit Judge:
1
This case turns on the meaning of a disputed provision in several large wheat sales contracts between appellant Farmland Industries, Inc., an American agriculture and agribusiness concern, and appellee Grain Board of Iraq, an agency of the government of Iraq that purchases wheat, barley, and rice for that country. The contracts provided for the payment to Farmland of certain charges in the event that ships assigned to transport American wheat to points in the Middle East failed to arrive in American loading ports on time. And the contracts also called for Farmland to receive incentive payments if it loaded the wheat into the ships ahead of schedule. When the shipowners refused to pay any of these charges, Farmland brought suit in the district court against them and the Grain Board. The district court granted the Grain Board's motion for summary judgment, and Farmland challenges that order before us. We conclude that no genuine issue of material fact existed because no evidence supported Farmland's interpretation of the contract and that its tort claims are meritless. We therefore affirm the judgment of the district court.
I.
2
Through a series of seven commodity sales contracts between December 1983 and September 1984, Farmland sold approximately 750,000 metric tons of hard red winter wheat to the Grain Board. The Grain Board paid for the wheat in full, an amount totalling $112 million, and those sums are not in dispute here. Since the Grain Board purchased the wheat on an "F.O.B." basis, it bore the cost and responsibility of arranging for the shipment of the cargo from the United States to ports in the Middle East. Consequently, the Grain Board entered into several maritime contracts (known as "charterparties") with three disponent shipowners1 to transport the wheat: Compania Imacasa Maritime Corporation ("Imacasa"), Cerrigina Maritime Ltd. ("Cerrigina"), and Bulkferts, Inc. ("Bulkferts"). Imacasa carried the wheat from the first four sales contracts for December 1983 to March 1984, Cerrigina was assigned the April 1984 sales agreement, and Bulkferts shipped the wheat from the final two contracts for June and September 1984. As called for in the charterparties, the Grain Board opened letters of credit with a London bank to pay the vessel owners.
3
This dispute primarily involves a claim for payment of "carrying charges."2 Carrying charges are designed to compensate a commodity seller for the storage and interest costs it incurs in the event the vessels on which the commodities are to be shipped are delayed. Five of the sale contracts provided for these charges to be paid to Farmland if the transporting ship failed to arrive in American ports on time for loading.3 In the typical F.O.B. sales contract the buyer would be responsible for paying these charges to the seller, but here the parties sought to vary the normal commercial understanding. The carrying charge clause reads:
4
In case buyer [Grain Board] fails to ship during the period [?] shall make an allowance of 20 cents per M/T [metric ton] per day to be settled directly between [disponent vessel] owners and shippers [Farmland].
5
We agree with the district court and the Grain Board that a word is missing in the contract--the key subject in the payment clause--between the words "period" and "shall." The Grain Board contends that the clause was intended to place sole responsibility on the disponent shipowners to pay any carrying charges (i.e., the missing word should be "owners"). Farmland, on the other hand, does not argue that the missing word is "buyer," which would impose sole liability on the Grain Board. Instead, claiming the clause is ambiguous, Farmland reads the whole clause to establish a primary obligation to pay on the vessel owners and a secondary liability on the Grain Board. Any other interpretation, it argues, would deviate too much from normal commercial practice.
6
By the spring of 1984, carrying charges began to mount as the shipowners experienced delays in arriving to the United States. When the carriers declined to pay the charges, Farmland told the Grain Board it would refuse to make any further shipments of wheat unless the carrying charges were paid. The letters of credit directed the bank to withhold carrying charges from the freight payments to the carriers. Soon after Farmland threatened to halt the wheat shipments, the bank (presumably instructed by the Grain Board) began to deduct, from freight charges the Grain Board paid to the carriers, an amount equal to the carrying charges; the withheld sums remained in the Grain Board's account. In May 1984, the owners of Imacasa and Cerrigina contacted Farmland to arrange a meeting in Kansas City, Missouri to discuss the carrying charges. According to Farmland, after a day of negotiations a representative of the two carriers told Farmland that he had been instructed by the Grain Board to break off the talks.
7
In July, August, and September 1984, the Grain Board transferred to Farmland a total of $476,025.99, which the Grain Board claimed reflected all of the carrying charges withheld from Cerrigina. Farmland asserted, however, that it was owed additional carrying charges from the Cerrigina delay in excess of the amounts withheld by the Grain Board's issuing bank. Later in September, representatives of Imacasa, Cerrigina, Farmland, and the Grain Board met in Baghdad, Iraq to resolve the carrying charge dispute. The parties apparently reached a tentative settlement, but it soon fell apart. Thereafter, on March 19, 1985, the Grain Board transferred to Farmland $377,564.16 withheld for carrying charges traceable to Imacasa vessels' delays. And later, Farmland received an additional $75,584.85 from the Grain Board attributable to Bulkferts' carrying charges. But the Grain Board halted further transfers to Farmland when the carriers disputed the carrying charges and asserted an interest in additional withheld sums. The Grain Board explains that to avoid the possibility of having to pay the same sum to both the shipowners and Farmland, it held and continues to hold, as a stakeholder only, the remaining $383,052.33 withheld from the carriers.
8
Since Farmland believed that it was still owed considerably more money than was paid to it, the company filed suit against both the shipowners and the Grain Board for $1,229,714.41. The complaint alleged breach of contract, unjust enrichment, conversion, and tortious interference with contractual relations. Since the jurisdictional statute precludes jury trials against the Grain Board, which is an instrumentality of a foreign government, see 28 U.S.C. Sec. 1330(a), no jury demand was made. The district court dismissed the complaint with respect to Imacasa and Bulkferts because of ineffective service of process and also dismissed the suit against Cerrigina due to the absence of personal jurisdiction. Each of the carriers are now insolvent and in liquidation proceedings, and the Grain Board has asserted that Farmland's suit is an attempt to circumvent the arbitration clause contained in the charterparties, under which Farmland is a third party beneficiary.4 After the completion of discovery and the production of virtually all of the evidence that would have appeared in the bench trial, the Grain Board moved for summary judgment. The district court granted the motion, determining that although the carrying charge provision was ambiguous, extrinsic evidence made clear that only the disponent shipowners were liable. The court also rejected Farmland's tort claims; it held that the Grain Board was acting only as a stakeholder and therefore had not been unjustly enriched, that a conversion cause of action was not available to enforce a debt, and that the tort of interference with contractual relations does not lie when the defendant is a party to that contract.
II.
9
A party is entitled to summary judgment if no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. See Fed.R.Civ.P. 56. Material facts are those "that might affect the outcome of the suit under the governing law," Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986), and a genuine dispute about material facts exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party," id.5 Appellant contends that, with respect to its contract claims, the district court committed two errors in applying the summary judgment standard. First, it is asserted that under District of Columbia contract law Farmland was entitled to a trial on the meaning of the disputed contract provisions. Second, appellant argues that the district court improperly granted summary judgment under the Federal Rules because it either ignored or insufficiently credited inferences favorable to Farmland's interpretation of the contract.6 We reject both of these arguments because they are based on incorrect understandings of District of Columbia contract law and federal summary judgment law.
10
Under District of Columbia law, according to appellant, a plaintiff is entitled to a trial to resolve a disputed term of a contract if it is facially ambiguous. Even the cases appellant cites in support of this dubious proposition, however, indicate that it has misread local law. When the meaning of a contract provision is facially uncertain, a court may resort to an examination of extrinsic evidence, such as statements, course of conduct, and contemporaneous correspondence, aimed at discerning the intent of the parties. See Sundown, Inc. v. Canal Square Associates, 390 A.2d 421, 432 (D.C.1978). To be sure, if extrinsic evidence supports more than one reasonable interpretation of the contract, local law calls for the trier of fact to resolve the dispute. But if that evidence demonstrates that only one view is reasonable--notwithstanding the facial ambiguity--the court must decide the contract interpretation question as a matter of law. See Howard University v. Best, 484 A.2d 958, 966-67 (D.C.1984); Glekas v. Boss & Phelps, Inc., 437 A.2d 584, 587 (D.C.1981); 1901 Wyoming Avenue Cooperative Ass'n v. Lee, 345 A.2d 456, 461 n. 8 (D.C.1975). The question for us, therefore, as it was for the district court, under both District of Columbia substantive contract law and federal summary judgment law, is whether there exists more than one reasonable interpretation of the contract.7
11
We agree with the district court that all of the direct evidence--the testimony of individuals involved in the negotiation and implementation of the contracts and the contemporaneous correspondence between the parties--supports the Grain Board's interpretation of the clause. Indeed, Farmland's own key personnel testified in depositions that they thought the disponent vessel owners were responsible for the carrying charges. Ray Larson, Farmland's representative in the negotiations with the Grain Board, admitted that the parties wished to depart from the normal practice of buyers paying sellers the carrying charges and that the contract made no provision for the Grain Board to pay for such charges. And the Farmland employee responsible for implementing the agreements, Randy Hayes, understood that only the carriers were responsible and testified that he sent invoices of the mounting carrying charges to the Grain Board only "as a courtesy."
12
What is more, the Grain Board offered numerous contemporaneous documents and correspondence demonstrating that Farmland never intended the interpretation it now asserts. For each sales contract, Farmland drafted an internal "confirmation of sale" document, which read:
13
Carrying Charges/Interest 9 [sic] if vessel files within contact period, otherwise 20 [cents] per M/T [metric ton] per day to be settled directly between [disponent ship] owners and shippers [Farmland]. (emphasis added).
14
And as carrying charges increased throughout 1984, Larson sent several telexes to the carriers and the Grain Board, each document indicating that Farmland thought the carriers were responsible for paying the carrying charges. Finally, the charterparties between the Grain Board and the carriers unquestionably impose the payment obligation on the carriers. For instance, the Imacasa and Bulkferts charterparties provide that vessel "[o]wners are to be fully responsible for carrying charges." The charterparties further state that "[c]arrying charges, if any, are to be settled directly between the [disponent vessel] Owners and Suppliers [Farmland]."8 Of course, as Farmland insists, the charterparties are agreements between the Grain Board and the carriers, not Farmland. But Farmland is a third-party beneficiary, and we think the district court was correct in believing this evidence probative of the meaning of the ambiguous sales contract.
15
Farmland offers no direct evidence to rebut the Grain Board's powerful showing. Instead, it relies primarily on two inferences that may be drawn from the evidence, inferences Farmland contends were adequate to compel the district judge to hold a bench trial rather than dispose of the case on summary judgment. It will be recalled that in negotiating the sales contracts, Farmland waived carrying charges on the first two contracts as a "sweetener" to encourage the Grain Board. From that action, Farmland argues the trier of fact could infer that both parties understood that the Grain Board would be liable for carrying charges--in the absence of such a waiver. The difficulty with this argument is that the Grain Board produced evidence that the carrying charges on the first two contracts were to be paid to the Grain Board. In other words, Farmland agreed that the buyer, Grain Board, rather than the seller, Farmland, would be compensated if the shipping companies delayed in picking up the cargo. There is nothing, of course, irrational in this arrangement; the buyer as well as the seller suffers costs of delay (albeit different costs), and the arrangement provides a continued spur to the carriers not to delay--which a complete waiver of carrying charges would not.
16
Perhaps because of these considerations, by the time of oral argument appellant rested virtually its entire case on the inference that can be drawn from the provision in the letters of credit directing the issuing bank to withhold carrying charges from the sums that were to be paid on the Grain Board's account to the carriers. To be fair, that arrangement at least suggests that the Grain Board wished to protect itself against a claim for liability, which, in turn, might suggest that there were objective reasons for such a claim. Of course, one could also infer that the Grain Board had an interest--without regard to any liability on its part--in ensuring that its seller was compensated by the carriers for carrying charges. But as Farmland correctly argues, in a summary judgment motion the district court must confer on the nonmoving party the benefit of any reasonable inferences. See, e.g., Goodrich v. International Bhd. of Elec. Workers, 712 F.2d 1488, 1494-95 (D.C.Cir.1983).
17
The Grain Board urges us to hold, as did the district court, that such inferential evidence cannot as a matter of law create a material issue of fact when juxtaposed against the direct and uncontradicted evidence it has brought to court. There is, we note, an element of artificiality about this issue (indeed this appeal), because appellant did not and cannot ask for a jury to decide this question.9 The district judge has examined virtually all the evidence it would have before it at a bench trial. Appellant's chances, if there were a remand, are under these circumstances hardly bright. Nevertheless, we must decide this case just as if there were a jury available, for the law of summary judgment does not vary with this circumstance. And we are not certain that the Grain Board's proposition--that evidence susceptible to more than one inference cannot create a material issue of fact if juxtaposed against direct evidence that rebuts the inference the nonmoving party would have the court draw--is necessarily correct in all cases. We need not accept that proposition here, however, because Farmland's suggested interpretation of the contract is without adequate support even with the benefit of the inference it would draw.
18
Farmland does not argue that the missing word in the carrying charge clause is "buyer"--i.e., that the parties intended the Grain Board to be solely responsible. Instead, appellant postulates a rather complex contractual arrangement, without benefit of any contract language or extrinsic evidence, to the effect that the carriers (the owners) had a primary duty to pay the carrying charges, but the Grain Board remained liable as something of a guarantor in the event the vessel owners did not pay. That contractual arrangement seems supported only by Farmland's post hoc desires in light of the carriers' bankruptcy. Even if the withholding provision in the letters of credit were to suggest that the Grain Board thought it bore some liability, one could not infer without other evidence--and there is none--that the parties intended the construction of the clause that Farmland proposes. We therefore think the district court was correct; since no reasonable trier of fact could reach appellant's contract interpretation, even accepting the inference it argues, summary judgment on this issue was appropriate.10
III.
19
Farmland, it will be recalled, also alleged tortious interference with contractual relations, conversion, and unjust enrichment. We agree with the district court that the Grain Board was entitled to judgment as a matter of law on each of these claims. Farmland concedes that the tort of interference with contractual relations does not lie when the defendant itself is a party to the contract. See Donohoe v. Watt, 546 F.Supp. 753, 757 (D.D.C.1982), aff'd, 713 F.2d 864 (D.C.Cir.1983); W. KEETON, PROSSER AND KEETON ON THE LAW OF TORTS Sec. 129 at 990 (5th ed.1984). According to appellant, however, if we decide that the Grain Board's interpretation of the sales contracts is correct, then Farmland must prevail on this tort claim because no contractual relationship would have existed between the two--at least on the carrying charge issue. But when we decide that the Grain Board had no contractual obligation to pay the disputed shipping-related charges, we are not concluding that no contract at all existed between the parties. Adoption of the Grain Board's view simply means that the appellant and appellee agreed that Farmland would receive certain fees from a third party; the law of contract, not tort, still governs their rights and duties respecting the sales contract and therefore the tortious interference cause of action is not available. It is possible that the Grain Board's alleged instructions to the owners' representative to break off the Kansas City negotiations breached an implied duty of good faith that the Grain Board owed to Farmland, under either or both the sales contract and the charterparty, but this claim, if it were made at all, was certainly not raised on appeal.
20
The unjust enrichment and conversion claims suffer from the common defect that the Grain Board is only holding the money until it is determined in other proceedings whether the shipowners or Farmland are entitled to the withheld sums. We take the Grain Board's representation in this court to estop them from asserting otherwise in another proceeding, and also as a good faith representation that in the event the shipowners' claims were, for any reason, no longer viable, it would pay over the withheld sums to Farmland.
21
* * * * * *
22
Because we believe that the Grain Board's interpretation of the contract was the only reasonable one advanced by the parties and that Farmland did not allege any cognizable torts against the Grain Board, we affirm the granting of summary judgment by the district court.
23
It is so ordered.
1
A "disponent" shipowner does not own the vessel but leases or otherwise obtains it for the necessary shipping period
2
Farmland also claims that the Grain Board owes it "despatch" payments, which are fees the commodity seller receives if it loads the cargo on board the ship ahead of schedule and that the Grain Board must pay it stevedoring overtime and bank extension charges
3
As discussed below, the carrying charge provision was waived for the first two sales contracts
4
In accordance with the arbitration clause in the charterparties, Cerrigina initiated arbitration proceedings in March 1985 against the Grain Board to recover the withheld freight payments. Cerrigina's claims have now been settled. Similar arbitration proceedings apparently are pending between Imacasa and the Grain Board
5
Farmland argues that Anderson 's reasonable jury standard applies only to actions that implicate standards of proof higher than a preponderance, such as libel claims. This assertion is simply a gross misreading of Anderson. See 477 U.S. at 252, 106 S.Ct. at 2512
6
Appellant's argument that the district court prematurely granted summary judgment is easily rejected. Appellant contends that it would have offered additional evidence on the impact of the withholding provision of the letters of credit. Farmland never raised that objection below or asked the court to delay its ruling under Federal Rule of Civil Procedure 56(f), which grants the nonmoving party additional time for discovery. And the summary judgment motion was filed nearly a month and a half after the close of discovery
7
The Grain Board argues and precedent indicates that the distribution of roles between the judge and jury (or in this case the judge and judge) is determined by federal procedural law. See, e.g., Lighting Fixture & Elec. Supply Co. v. Continental Ins. Co., 420 F.2d 1211, 1213 (5th Cir.1969) ("[I]n proceedings on motions for summary judgment questions of state law will arise in determining the materiality of particular facts to the claims and defenses of the parties and the factual elements required to establish the claims or defenses of the moving party, but whether a trial is necessary is a matter of federal law.") (citation omitted); C. WRIGHT, A. MILLER & M. KANE, FEDERAL PRACTICE AND PROCEDURE Sec. 2712 at 591 (2d ed. 1983); cf. Richardson v. Richardson-Merrell, Inc., 857 F.2d 823, 825 n. 9 (D.C.Cir.1988), cert. denied, --- U.S. ----, 110 S.Ct. 218, 107 L.Ed.2d 171 (1989). We note, however, that the result is the same under either D.C. or federal law, so that the choice between the two is, in this setting, academic
8
The charterparty with Cerrigina differs from the others in that the agreement requires Cerrigina to pay the Grain Board any carrying charges. According to the Grain Board, this provision only served as a payment mechanism because the Grain Board would transfer to Farmland any carrying charges it received from Cerrigina
9
See 28 U.S.C. Sec. 1330(a)
10
Extrinsic evidence similarly supports the Grain Board's view that the carriers alone owe Farmland $188,672 in unpaid "despatch" charges. The sales contracts do not indicate who must pay despatch fees, the Grain Board or the carriers. Five of the sales contracts simply provide for such payments. The remaining two contracts, however, explicitly refer to the charterparties, and the charterparties clearly state that despatch payments are "to be settled directly between [disponent vessel] owners and suppliers [Farmland]." Moreover, Farmland's internal confirmations of sales for each of the February-September 1984 sales contracts provide for "demurrage/despatch as per C/P [charterparty]."
Farmland's final contract claim for stevedoring overtime and fees the bank charged for the extension of its letter of credit is directed only at Bulkferts under the charterparty. The terms of the charterparty plainly require the carrier to pay these fees rather than the Grain Board. The charterparty states that "any overtime expenses at the loading port are for the Owner's [Bulkferts'] account." The agreement further makes clear that "all bank charges outside Iraq are for the Owners' [Bulkferts'] account."
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UNITED STATES ARMY COURT OF CRIMINAL APPEALS
Before
HAIGHT, PENLAND, and WOLFE
Appellate Military Judges
UNITED STATES, Appellee
v.
Sergeant GENE N. WILLIAMS
United States Army, Appellant
ARMY 20130582
Headquarters, Fort Bragg
Karin G. Tackaberry, Military Judge (arraignment and pretrial motions)
Tara A. Osborne, Military Judge (pretrial motions)
Stephen E. Castlen, Military Judge (trial)
Colonel Paul S. Wilson, Staff Judge Advocate (pretrial)
Colonel Michael O. Lacey, Staff Judge Advocate (recommendation)
Lieutenant Colonel Jerrett W. Dunlap, Jr., Staff Judge Advocate (addendum)
For Appellant: Captain Patrick A. Crocker, JA; Frank J. Spinner, Esq. (on brief);
Captain Patrick J. Scudieri, JA; Frank J. Spinner, Esq. (on reply brief).
For Appellee: Colonel Mark H. Sydenham, JA; Major Steven J. Collins, JA; Captain
Tara E. O’Brien (on brief).
29 February 2016
----------------------------------
OPINION OF THE COURT
----------------------------------
WOLFE, Judge:
A general court-martial composed of officer and enlisted members convicted
appellant, contrary to his pleas, of one specification of rape on divers occasions,
four specifications of forcible sodomy (three of which were on divers occasions),
and five specifications of assault consummated by battery (three of which were on
divers occasions), in violation of Articles 120, 125, and 128, Uniform Code of
Military Justice, 10 U.S.C. §§ 920, 925, 928 (2000; 2006). The court-martial
sentenced appellant to a dishonorable discharge, confinement for twenty years,
forfeiture of all pay and allowances, and reduction to the grade of E-1. The
convening authority approved the reduction, forfeiture, and confinement portion of
the adjudged sentence, but approved only a bad-conduct discharge.
WILLIAMS — ARMY 20130582
This case is now before us for review pursuant to Articles 66(c) and 73,
UCMJ. On appeal, appellant assigns two errors, one of which merits discussion but
not relief. Additionally, appellant submitted a petition for a new trial pro se and
raises thirty-seven issues pursuant to United States v. Grostefon, 12 M.J. 431
(C.M.A. 1982), 1 none of which merits discussion or relief.
I. BACKGROUND
The allegations against appellant were levied by appellant’s ex-wives, SW and
TW. Both testified to violent marriages that involved rape (in the case of TW) and
forcible anal sodomy and battery (in the case of SW).
On 10 November 2011, prior to trial, the government provided timely notice
to the defense of its intent to offer evidence of the offenses against each woman as
propensity evidence that appellant committed the charged offenses against the other.
That is, the government intended to use evidence that appellant committed each
sexual offense against one victim as evidence that appellant committed every other
sexual offense against the other victim. In response, on 30 January 2012, the
defense filed a timely motion asking the military judge to preclude the government
from offering evidence “for the purpose of showing propensity of the accused to
commit other charged offenses.”
At an Article 39(a), UCMJ, session held on 21 March 2012, the military judge
discussed the matter with both parties. The military judge confirmed that the
government was not seeking to admit evidence of uncharged misconduct under
Military Rule of Evidence [hereinafter M.R.E.] 413. That is, any evidence that was
the subject of the motion was also evidence of a charged offense. Accordingly, the
military judge noted that the question was not whether the evidence would be
admissible, but rather the question turned on the purposes for which the evidence
would be considered. The defense counsel appeared to agree with the military judge
that this was an instructional issue, not a matter of whether the evidence was
admissible:
MJ: So this is really an issue of whether or not I’m going
to grant or I’m going to give an unmodified spillover
instruction to the panel or whether or not I’m going to
give an instruction to the panel about how they may use
1
Appellant raised three matters under Grostefon in his initial brief. We
subsequently granted appellant’s motion to file an additional thirty-four matters out
of time. While we are able to fully consider appellant’s additional matters, they
were disorganized, poorly written, and would have benefited from additional
attention from counsel. See Grostefon, 12 M.J. at 435 (“Thus, the proper procedure
for appellate defense counsel, after consultation with the accused, is to identify the
issue to the appellate court and to supply such briefs and argument as he feels will
best advance his client’s interest.”).
2
WILLIAMS — ARMY 20130582
the offenses vis-à-vis each other to show some type of
propensity for sexual assaults.
ADC: Yes, Your Honor.
MJ: And that’s solely the issue here with this motion as I
understand it?
ADC: Yes, Your Honor.
While the defense asked for a pretrial ruling, the military judge indicated that
the issue was not ripe and could be more properly addressed when discussing how to
instruct the panel. The military judge did not explicitly rule on the motion. 2
After the close of evidence, the military judge held a session under Article
39(a), UCMJ, to discuss instructions. He informed the parties he intended to give an
instruction on “propensity” and provided an opportunity for the parties to object and
request additional instructions. The defense requested an additional instruction,
objected to the military judge’s intent to instruct on a lesser-included offense, but
did not object to the military judge’s intent to instruct the members on propensity
evidence. The military judge then provided to the parties a written draft copy of his
instructions, which included an instruction on propensity evidence under M.R.E.
413. After a nearly two-hour recess, the defense renewed its objection to instructing
on a lesser-included offense and proposed specific changes to those parts of the
military judge’s instructions that addressed uncharged misconduct (pursuant to
M.R.E. 404(b)), but did not object to the military judge’s decision to instruct the
panel under M.R.E. 413. After the military judge instructed the panel, he
specifically asked if either party objected to the instructions as given. Again,
neither side made any objection.
Specifically, the military judge instructed the panel that:
Evidence that the accused committed rape on divers
occasions alleged in The Specification of Charge I may
have no bearing on your deliberations in relation to any of
the allegations of forcible sodomy in the Specifications of
Charge II unless you first determine by a preponderance of
the evidence that [it] is more likely than not that the
offenses alleged in The Specification of Charge I
occurred. If you determine by a preponderance of the
evidence the offenses alleged in The Specification of
Charge I occurred, even if you’re not convinced beyond a
2
We note that a different military judge presided over the motions session than at
trial.
3
WILLIAMS — ARMY 20130582
reasonable doubt that the accused is guilty of those
offenses, you may nonetheless then consider the evidence
of those offenses for its bearing on any matter to which it
is relevant in relation to the forcible sodomys [sic] alleged
in Charge II. You may also consider the evidence of such
other acts of sexual assault for its tendency, if any, to
show the accused’s propensity or predisposition to engage
in sexual assault.
You may not, however, convict the accused solely because
you believe he committed these other offenses or solely
because you believe the accused has a propensity or
predisposition to engage in sexual assault. In other words,
you cannot use this evidence to overcome a failure of
proof in the government’s case, if you perceive any to
exist. The accused may be convicted of an alleged offense
only if the prosecution has proven each element beyond a
reasonable doubt.
Each offense must stand on its own and proof of one
offense carries no inference that the accused is guilty of
any other offense. In other words, proof of one sexual
assault creates no inference that the accused is guilty of
any other sexual assault. However, it may demonstrate
that the accused has a propensity to commit that type of
offense. The prosecution’s burden of proof to establish
the accused’s guilt beyond a reasonable doubt remains as
to each and every element of each offense charged. Proof
of one charged offense carries with it no inference that the
accused is guilty of any other charged offense.
Interestingly, the military judge did not provide a similar detailed M.R.E. 413
propensity instruction regarding Charge II (forcible sodomy) and its specifications
and how those offenses could be used by the panel in relation to its deliberations on
the Specification of Charge I (rape) or with respect to individual specifications
within Charge II. See United States v. James, 63 M.J. 217, 221-22 (C.A.A.F. 2006)
(“[T]he ‘one or more offenses’ language of M.R.E. 413 and M.R.E. 414 is no more
temporally restrictive than the “other crimes” language of M.R.E. 404(b)” which
generally is not limited to prior acts.).
On appeal, appellant argues the military judge committed error when he
instructed the panel on propensity evidence without making an explicit ruling under
M.R.E. 413.
4
WILLIAMS — ARMY 20130582
II. LAW
Under M.R.E. 413, in any case where an accused is charged with a sexual
offense, evidence of an accused’s commission of another sexual offense “is
admissible and may be considered for its bearing on any matter to which it is
relevant.” Mil. R. Evid. 413(a). Appellant points us to United States v. Myers, 51
M.J. 570 (N.M. Ct. Crim. App. 1999), for the proposition that it is improper to use
M.R.E. 413 as a vehicle to show that evidence of an accused’s commission of a
charged offense may be used to demonstrate the propensity to commit another
charged offense. However, in an opinion published subsequent to appellant’s filing,
the Navy-Marine Court of Criminal Appeals explicitly rejected Myers. United States
v. Bass, 74 M.J. 806, 816 (N.M. Ct. Crim. App. 2015). Recently, this court similarly
determined that evidence under M.R.E. 413 applies to both uncharged and charged
misconduct. United States v. Barnes, 74 M.J. 692 (Army Ct. Crim. App. 2015), pet.
denied, 75 M.J. 27 (C.A.A.F. 28 Jul. 2015); see also United States v. Hills, ARMY
20130833, 2015 CCA LEXIS 268 (Army Ct. Crim. App. 25 Jun. 2015) (mem. op.)
review granted, 2016 CAAF LEXIS 55 (C.A.A.F. 19 Jan. 2016). 3
Before admitting evidence under M.R.E. 413, several threshold findings are
required. 4 They are: 1) that the accused is charged with an offense of sexual assault;
2) that the evidence proffered is “evidence of the defendant’s commission of another
offense of . . . sexual assault”; and 3) as with all evidence, the evidence must have
the “tendency to make the existence of any fact that is of consequence to the
determination of the action more or less probable than it would be without the
evidence.” United States v. Wright, 53 M.J. 476, 482 (C.A.A.F. 2000); Mil. R. Evid.
3
Hills involved the use of M.R.E. 413 evidence to show the appellant’s propensity
“involving three charged sexual offenses . . . against the same victim in the same
place during an approximate two-hour window of opportunity.” 2015 CCA LEXIS
268 at *18. Although not presented by this case, as offenses become closer in time
and space, the concept of propensity begins to merge with intent and ultimately with
the res gestae of the offense.
4
The posture of the rule suggests that the burden is first on the defense to object to
the consideration of evidence under M.R.E. 413. The rule, for example, requires the
government to provide notice to the defense but does not require notice to the court.
Mil. R. Evid. 413(b). Additionally, the rules of evidence do not require a moving
party to file a motion to admit evidence that “is admissible” under the rules. Mil. R.
Evid. 402; Mil. R. Evid. 413(a). However, our superior court has indicated that the
trial judge must make “threshold” findings before admitting evidence under M.R.E.
413. United States v. Wright, 53 M.J. 476, 482 (C.A.A.F. 2000). It is unclear
whether Wright intended for this to be a sua sponte requirement placed on the
military judge (which would inferably require the government to provide notice to
the court) or whether these threshold findings are necessary only upon a motion by
the defense to exclude the evidence.
5
WILLIAMS — ARMY 20130582
413(a); Mil. R. Evid. 401; Mil. R. Evid. 402. “Additionally, the court must apply a
balancing test under M.R.E. 403.” Wright, 53 M.J. at 482. In other words, evidence
submitted under M.R.E. 413 must be both logically relevant under M.R.E. 401 and
402 and legally relevant under M.R.E. 403.
In Wright, our superior court identified a non-exhaustive list of some of the
things a court should consider when conducting a M.R.E. 403 balancing test in this
context. These factors include: 1) the strength of the evidence of the other act; 2)
the probative weight of the evidence; 3) the potential for less prejudicial evidence;
4) the distraction of the factfinder; 5) the time needed for proof of the prior conduct;
6) temporal proximity; 7) frequency of the acts; and 8) presence or lack of
intervening circumstances and the relationship between the parties. Id. at 482.
“[T]he judge has substantial discretionary power in deciding on the
instructions to give.” United States v. Damatta-Olivera, 37 M.J. 474, 478 (C.M.A.
1993). We review a military judge’s non-mandatory panel instructions for an abuse
of discretion and the correctness of the instructions actually given de novo. United
States v. Davis, 75 M.J. 537 (Army Ct. Crim. App. 2015); see also United States v.
Forbes, 61 M.J. 354, 358 (C.A.A.F. 2005). In a case of unpreserved error when
there was no objection to the instructions, we review for plain error. United States
v. Payne, 73 M.J. 19, 22-23 (C.A.A.F. 2014) (“Where there is no objection to an
instruction at trial, we review for plain error.”).
In evaluating non-constitutional error, we must determine whether the
instructional error had “substantial influence” on the findings. United States v.
Gibson, 58 M.J. 1, 7 (C.A.A.F. 2003) (internal quotation marks omitted) (quoting
Kotteakos v. United States, 328 U.S. 750, 765 (1946)). However, if we find error
such that it rises to a constitutional dimension, we may only affirm the affected
findings of guilty if we determine the error was harmless beyond a reasonable doubt.
See Chapman v. California, 386 U.S. 18, 24 (1967); United States v. Kreutzer, 61
M.J. 293, 298–99 (C.A.A.F. 2005). To find instructional error of a constitutional
dimension, our court would have to find “a reasonable likelihood that the jury has
applied the challenged instruction in a way that violates the Constitution.” Estelle v.
McGuire, 502 U.S. 62, 72 (1991) (internal quotation marks omitted) (quoting Boyde
v. California, 494 U.S. 370, 380 (1990)).
III. DISCUSSION
A. Standard of Review
As an initial matter, we find that appellant forfeited any instructional error
with regards to M.R.E. 413 by repeatedly failing to object to the military judge’s
instructions. R.C.M. 920(f). While the defense filed a motion requesting a ruling on
the permissible use of the M.R.E. 413 evidence, the military judge indicated that the
issue was not yet “ripe” as this was an instructional issue. During the fifteen months
6
WILLIAMS — ARMY 20130582
that separated the motions session and the military judge’s findings instructions, 5 the
defense did not again raise the issue of propensity or object to the military judge’s
instructions on findings. Accordingly, although we consider appellant’s assigned
error on its merits, we initially review for plain error. As we do not find error, we
cannot find plain error. In the present case, appellant complains in his assigned
error that the military judge did not articulate his M.R.E. 403 balancing test on the
record prior to instructing the members. Of course, had appellant objected to the
instruction we would have a developed record on that very issue one way or the
other.
B. The 403 Balancing Test In Cases Not
Involving Uncharged Misconduct.
In a case where the application of M.R.E. 413 involves only charged
misconduct, we agree with the military judge that this is not a matter of
admissibility, but is rather one of instructions. With regard to charged offenses, the
evidence is admissible (or not) regardless of the application of M.R.E. 413. Military
Rule of Evidence 413(a) provides that evidence of a commission of sexual assault
“is admissible” and may be considered “for its bearing on any matter to which it is
relevant.” Stated differently, in the case of uncharged misconduct, the focus is on
the first part of the sentence (whether the evidence “is admissible?”). Whereas in
the case of charged misconduct, the focus is on the latter half of the sentence (for
what purposes and for which offenses is evidence—already admitted—relevant, both
logically and legally?).
In this case, the military judge was required to conduct an M.R.E. 403
balancing test not to determine the admissibility of the evidence, but rather to
address the purposes for which the evidence could be used. If the use of propensity
evidence is substantially more prejudicial than probative under M.R.E. 403, the
military judge should instruct the panel that they may not consider it for such a
purpose. Mil. R. Evid. 105 (“[w]hen evidence which is admissible as to . . . one
purpose but not admissible as to . . . another purpose is admitted, the military judge,
upon request, shall restrict the evidence to its proper scope and instruct the members
accordingly.”). 6
5
The Article 39(a), UCMJ, motions session was held on 21 March 2012. The parties
discussed instructions on 20 June 2013.
6
When instructing members about applying evidence from one offense to other
offenses, this type of limiting instruction is often referred to as a “spillover”
instruction. See Dept. of Army, Pam. 27-9, Legal Services: Military Judges’
Benchbook [hereinafter Benchbook], para. 7-17 (10 September 2014).
7
WILLIAMS — ARMY 20130582
C. Applying the M.R.E. 403 Balancing Test to This Case
Here, as in Barnes, the military judge did not articulate his M.R.E. 403
balancing test on the record. 7 74 M.J. at 699. Nonetheless, “Military judges are
presumed to know the law and to follow it absent clear evidence to the contrary.”
United States v. Erickson, 65 M.J. 221, 225 (C.A.A.F. 2007).
As we stated in Barnes “[w]hen a military judge is required to conduct a
balancing test but does not sufficiently articulate his analysis on the record, his
evidentiary ruling will receive less deference on appeal.” Barnes, 74 M.J. at 699
(internal citations omitted). “As the military judge did not address his balancing test
on the record, we have nothing to which we can give deference, and so, we will
evaluate the use of the evidence based upon the record.” Id.; see also United States
v. Berry, 61 M.J. 91, 96 (C.A.A.F. 2005) (“Where the military judge is required to
do a balancing test under M.R.E. 403 and does not sufficiently articulate his
balancing on the record, his evidentiary ruling will receive less deference from this
court.”).
Even a cursory weighing of the Wright factors reveals that their application is
substantially different when addressing charged vice uncharged misconduct. When
the government seeks to introduce evidence of uncharged sexual offenses, the
government must introduce witnesses and evidence that have no direct connection to
the charged offenses. Depending on the facts of the case, the potential for unfair
prejudice, confusion of the factfinder, and waste of time may be easily established.
Whereas, when applying M.R.E. 413 to charged offenses—as no new evidence is
introduced—such considerations have less significance. If the evidence is already
admitted to prove the charged offense, it is less likely that any application of M.R.E.
413 would cause additional delay or confusion. See Barnes, 74 M.J. at 700 (“Three
of these [Wright] factors: the potential for less prejudicial evidence; the possible
distraction of the fact finder; and the time needed for proof of the prior conduct, are
arguably only applicable to the admission of uncharged misconduct and not
particularly helpful in a case involving charged misconduct.”). Additionally, in
cases where the application of M.R.E. 413 evidence to charged offenses is overly-
7
However, the record amply demonstrates that the military judge was familiar with
the proper standard. During the testimony of appellant’s first wife, she described
multiple rapes but also gave a detailed description of one circumstance where she
was able to fight appellant off. The defense objected to the testimony of an
“attempted rape” as “uncharged misconduct.” In overruling the objection, the
military judge put on the record his analysis that an attempted rape was admissible
under M.R.E. 413, to include an abbreviated analysis under M.R.E. 401, 402, and
403. We note that attempted rape is a lesser-included offense of rape. See UCMJ
art. 79.
8
WILLIAMS — ARMY 20130582
prejudicial, one possible remedy is severance. See Rule for Courts-Martial
[hereinafter R.C.M.] 906(b)(10). 8
Weighing the facts in the record under the M.R.E. 403 balancing test, we find
that the evidence in question was far more probative than prejudicial. There were
substantial similarities between the victims of the charged offenses. Both women
were young and married to appellant at the time of the respective offenses. In both
marriages, appellant exercised excessive control over their lives by requiring them
to wear their hair in a certain manner and limiting their contact with others. Both
women described sexual assaults that were preceded by physical abuse and appellant
drinking heavily and watching pornographic videos. As witnesses, they testified
credibly to an abusive sexual relationship that spanned years and also provided
specific examples of appellant’s criminal conduct, to include grabbing and pulling
their hair to physically control them during sexual intercourse. While appellant’s
first wife testified to instances of vaginal rape and appellant’s second wife described
instances of forcible anal sodomy, we find this distinction to be without a
meaningful difference under these circumstances. Their testimony provided strong
evidence of the offenses and was probative of appellant’s propensity to engage in
similar conduct.
With regard to time, there is a break of approximately four years and nine
months between the charged offenses. 9 While the probative value of M.R.E. 413
evidence tends to dissipate over time, a gap of nearly five years does not
significantly diminish the probative weight of the evidence. See, e.g., United States
v. Bailey, 55 M.J. 38, 41 (C.A.A.F. 2001) (prior sexual misconduct occurring up to
ten years prior to the charged offenses admissible under Mil. R. Evid. 413).
In sum, applying the pertinent Wright factors, we find the similarities are such
that the probative value of the evidence is not substantially outweighed by the
danger of unfair prejudice. The military judge did not err in determining that—in
accordance with Mil. R. Evid. 413—the panel could use evidence of appellant’s
rapes of SW in their deliberations on the sodomy offenses he was charged with
committing against TW.
D. The Military Judge’s Instructions
Having determined the military judge did not err in deciding to give an
M.R.E. 413 instruction, we must now consider the substance of the instructions that
were given.
8
Appellant did not move for severance of the offenses in this case.
9
Appellant was convicted of raping his first wife on divers occasions between on or
about 7 July 2000 and on or about 1 January 2003. The four specifications of
forcible sodomy covered a period that began on or about 21 September 2007 and
ended on or about 28 March 2011.
9
WILLIAMS — ARMY 20130582
In Barnes, we noted the instruction given by the military judge was “not a
model of clarity,” “internally contradictory,” and was “nonsensical.” Barnes, 74
M.J. at 700, 701 n.5. Specifically, we found that instructing panel members that
“proof of one offense carries no inference that the accused is guilty of another
sexual assault” to be the “opposite” of the purpose of propensity evidence. Id. at
700-01 (citing the Benchbook, para. 7-13-1 n.4.2). That is, the military judge in
Barnes instructed panel members that they could consider M.R.E. 413 propensity
evidence and shortly thereafter instructed them that they could not. As we noted in
Barnes, “Congress has said that in a criminal trial for an offense of sexual assault, it
is not improper to draw the inference that the defendant committed this sexual
assault because he had the propensity to do so.” Id. at 701 (quoting United States v.
Rogers, 587 F.3d 816, 822 (7th Cir. 2009)).
However, what we did not specifically address in Barnes was that it was this
court that not only suggested but required that exact instruction. See United States
v. Dacosta, 63 M.J. 575, 583 (Army Ct. Crim. App. 2006) (“Therefore, for all cases
tried on or after ninety days from the date of this opinion . . . [the military judge]
shall inform the panel members . . . .”). As an appendix to the opinion in Dacosta,
this court attached a suggested instruction which was then incorporated into the
Benchbook with only minimal changes. Id. at 584; See Benchbook, para. 7-13-1.
As a result, while Barnes found the Dacosta instruction to be problematic,
Barnes did not explicitly eliminate the requirement in Dacosta for such an
instruction. For this reason—and because we find additional concerns with our
holding in Dacosta—we revisit Dacosta today.
In addition to the contradictory language discussed in Barnes, in Dacosta we
also required a military judge to instruct a panel that “the Rule 413 evidence should
have no bearing on their deliberations unless they determine the other offense
occurred.” DaCosta, 63 M.J. at 583. In the proposed instruction, we suggested the
panel make this determination “by a preponderance of the evidence.” Id. at 584. If
the purpose of that instruction was to tell the panel that they should give no weight
to evidence they do not believe to be true, the instruction is obvious to the point of
being a truism. Such an instruction would be equally applicable to all forms of
evidence. However, our opinion in Dacosta went further and mandated “a
determination.” Id. at 583.
The problem with requiring a “determination” by a preponderance is that this
would appear to require a finding; either by each member individually or by the
panel as a whole. Article 52(c), UCMJ, seems to direct the latter as all “questions to
be decided by the members” other than votes on the findings and sentence, “shall be
determined by a majority vote.” That is, by requiring that the members make a
preliminary decision about the weight to be given certain evidence, Dacosta appears
to require that the panel formally vote on the matter before voting on the ultimate
findings of guilt.
10
WILLIAMS — ARMY 20130582
More concerning is that our opinion in Dacosta appears to have been based on
a desire to know the results of such a determination by the panel. In Dacosta, we
justified our requirement for the proposed M.R.E. 413 instructions by reasoning that
without such instructions “[a]n appellate court would . . . be unable to determine
upon which evidence (e.g., “propensity”) a panel based its findings of guilty.”
Dacosta, 63 M.J. at 582-83. In other words, we appeared to see a need to know
whether the panel members credited the M.R.E. 413 evidence or not. Such a
requirement, if that is what Dacosta intended, absent a statutory or regulatory basis,
see, e.g., R.C.M. 1004(b)(4), is an improper breach of panel member deliberations.
See also R.C.M. 923 (Impeachment of findings); Mil. R. Evid. 509 (Deliberations of
courts and juries). We routinely review the decisions of panels without an
accounting of how the panel weighed the evidence. Cf. United States v. Walters, 58
M.J. 391, 396 (C.A.A.F. 2003) (requiring such an accounting when the members
acquit an accused of some conduct by striking the words “on divers occasions.”).
The requirement that a panel make a preliminary determination by a
preponderance before considering evidence under M.R.E. 413 likely comes from an
application of Huddleston v. United States, 485 U.S. 681 (1988). There, a
unanimous Supreme Court determined that it was improper for the trial judge to
make a preliminary preponderance determination before submitting evidence to the
jury that the defendant had committed similar (uncharged) acts. 10 Id. at 689. The
Court’s analysis concluded that the trial court does not make a preliminary ruling
but “simply examines all the evidence in the case and decides whether the jury could
reasonably find the conditional fact . . . by a preponderance of the evidence.” Id. at
690 (emphasis added).
However, Huddleston did not require that the jury be instructed that they must
make a preponderance determination before they may consider the evidence. And,
notably, neither this court nor our superior court has ever required such a
determination when addressing M.R.E. 404(b) evidence—the military analogue of
the federal rule of evidence in question in Huddleston. The focus in Huddleston was
that it is the jury, not the judge, who determines the weight to be applied to the
evidence once admitted. In contrast, the judge’s role is limited to that of
gatekeeper; determining whether a jury “could reasonably find” the evidence
credible when ruling on admissibility of that evidence. Id.
In United States v. Schroder, 65 M.J. 49 (C.A.A.F. 2007), our superior court
was presented with the issue of how to instruct a panel on issues relating to M.R.E.
413 and M.R.E. 414 and noticeably did not adopt Dacosta. Instead, the United
States Court of Appeals for the Armed Forces (C.A.A.F.) “note[d]” portions of the
10
Huddleston involved application of Federal Rule of Evidence 404(b) (“Crimes,
Wrongs, or Other Acts”). 485 U.S. at 685.
11
WILLIAMS — ARMY 20130582
Decosta instruction, but then pointed out that the 10th Circuit had approved a
“different formulation” of the instruction 11 in United States v. McHorse, 179 F.3d
889, 903 (10th Cir. 1999). Id. at 56, 56 n.4. 12 The C.A.A.F. did, however,
emphasize that “where, as here, the members are instructed that M.R.E. 414
evidence may be considered for its bearing on an accused’s propensity to commit the
charged crime, the members must also be instructed that the introduction of such
propensity evidence does not relieve the government of its burden of proving every
element of every offense charged [and] the factfinder may not convict on the basis of
propensity evidence alone.” Id. at 56. That is, while instructions are necessary to
properly guide a panel on how to consider M.R.E. 413 evidence, the C.A.A.F. did
not adopt the requirement for the more lengthy instructions that we promulgated in
Dacosta.
Accordingly, as the instructions required by Dacosta remain problematic in
numerous respects, 13 we overturn the requirement for the specific instructions
required in that decision.
To be clear, nothing in this opinion removes the requirement that a military
judge must provide appropriate instructions to the panel. R.C.M. 920(a). While
“the law does not mandate a formulaic instruction,” an instruction on M.R.E. 413 or
M.R.E. 414 evidence must still inform the panel that: 1) an accused may not be
convicted based on propensity evidence alone; and 2) that M.R.E. 413 or M.R.E. 414
evidence does not relieve the government of its burden to prove every element of
every offense charged. Schroder, 65 M.J. at 56. While the instruction approved by
the 10th Circuit in McHorse provides an adequate template, having already once
waded too far from shore, we decline to mandate any specific wording or contents
beyond what our superior court directed in Schroder.
11
McHorse entailed a jury instruction addressing evidence admitted pursuant to
Federal Rule of Evidence 414(a) (“Permitted Uses” of “Similar Crimes in Child
Molestation Cases”). 179 F.3d at 903.
12
Schroder involved evidence admitted under M.R.E. 414, which in all relevant
respects is the same as M.R.E. 413. 65 M.J. at 52.
13
The Dacosta instructions also require that the panel be instructed that the M.R.E.
413 evidence only be considered on “the sexual assault offenses charged” and that
the “evidence has no bearing on any other offense charged.” Dacosta, 63 M.J. at
583. This is a substantial narrowing of Mil. R. Evid. 413, which clearly states that
the evidence “may be considered for its bearing on any matter to which it is
relevant.” Mil. R. Evid. 413(a). While it will often be the case that the legal
relevance of M.R.E. 413 evidence is limited to other sexual assault offenses, our
opinion in Dacosta did not explain why we definitively limited the scope of M.R.E.
413 in all cases, preventing a case-by-case analysis.
12
WILLIAMS — ARMY 20130582
E. Prejudice
As discussed above, we find significant problems with the instructions given
in this case. As in Barnes, however, the instructional error either accrued to the
benefit of appellant or had no appreciable effect on the court-martial. To the degree
that the instructions were in error, they erred in telling the panel that they could not
consider propensity evidence. Accordingly, we find beyond a reasonable doubt that
appellant was not prejudiced by any instructional error.
IV. CONCLUSION
The findings and sentence are correct in law and fact and are AFFIRMED.
Senior Judge HAIGHT and Judge PENLAND concur.
FOR
FOR THE
THE COURT:
COURT:
MALCOLM
MALCOLM H. H. SQUIRES,
SQUIRES, JR.
JR.
Clerk of Court
Clerk of Court
13
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80 Mich. App. 428 (1978)
264 N.W.2d 13
PEOPLE
v.
BRYANT
Docket No. 28880.
Michigan Court of Appeals.
Decided January 4, 1978.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, Peter E. Deegan, Prosecuting Attorney, and Peter R. George, Chief Appellate Attorney, for the people.
Marshall S. Redman, Assistant State Appellate Defender, for defendant on appeal.
*430 Before: T.M. BURNS, P.J., and R.B. BURNS and W.R. BROWN,[*] JJ.
R.B. BURNS, J.
Defendant was convicted by jury of unarmed robbery, MCLA 750.530; MSA 28.798, and appeals. Although his codefendant, Elmer Suratt, was also charged with unarmed robbery, he was convicted of the lesser offense of assault and battery, MCLA 750.81; MSA 28.276, and has not appealed.
Ten witnesses testified that defendant and three others repeatedly visited their campsite. The last visit precipitated a fight between Suratt and one of the campers, which escalated into an assault on the campers by the visitors. After the visitors subdued the campers, they rummaged through the campsite, and carried away a cooler, a chain saw, and tent poles. As the visitors left, defendant kicked one of the campers in the face.
Defendant testified that he was at a party at the time of the assault, and presented three corroborating witnesses. Suratt admitted being involved in the incident, but claimed to have fought and taken the tent poles in self-defense.
Both defendant and Suratt requested jury instructions on the lesser offense of assault and battery. Although the trial court granted Suratt's request, it ruled that defendant had waived instructions on any lesser included offenses by interposing the defense of alibi. Defendant objected to the court's failure to give the requested instruction. After four hours of deliberation, the jury returned to the courtroom to ask the trial court if defendant could "be charged with just assault and battery". The trial court answered in the negative. *431 When the jury was polled after returning the verdict, the following transpired:
"THE CLERK: [W]as that your verdict, Mrs. Hull?
"JUROR HULL: Yes, I believe he was there.
"THE CLERK: Was that your verdicts, Mr. Bankson?
"JUROR BANKSON: He was there.
* * *
"MR. FOSTER: If the Court please, I do not believe the first two persons answered the question correctly, their answer to my understanding was that Mr. Byrant was there.
* * *
"THE COURT: Mrs. Hull, the question was, was that your verdict, the verdict in the case of Alan Bryant?
"JUROR HULL: We had to accept the way it was written and that was our verdict.
"THE COURT: And Mr. Bankson.
* * *
"JUROR BANKSON: Right, that's the way it was written."
Defendant argues on appeal that assault and battery was a cognate lesser included offense upon which the trial court was required to instruct. People v Ora Jones, 395 Mich 379, 390; 236 NW2d 461, 465 (1975). Plaintiff argues that assault and battery is not a cognate lesser included offense; that even if it is, Ora Jones is not retroactive and does not apply in this case.
We note initially that the trial court's ruling cannot be sustained on the rationale advanced by it. Although there is merit to the argument that it is inconsistent for a defendant to both assert that he was not at the scene of the crime and that, if he was, the crime he committed was a lesser offense than that charged, a defendant "may advance inconsistent claims and defenses". People v *432 John Willie Williams, 26 Mich App 218, 222; 182 NW2d 347, 349 (1970).
"A defense of alibi, per se, does not mean that a defendant may not be convicted of a lesser offense. A jury may disbelieve a defendant's alibi but nevertheless find that a disputed element of the principal charge was not proven." People v Membres, 34 Mich App 224, 232 fn 7; 191 NW2d 66, 69 fn 7 (1971).
We are not unmindful that People v Clemons, 74 Mich App 448, 452-454; 253 NW2d 795, 796-797 (1977), dealt with a situation similar to that in the instant case. In Clemons this Court distinguished Ora Jones on the basis that it was unclear that Ora Jones was to be applied retroactively, that Ora Jones did not involve an alibi situation, and that the trial court "properly applied the law as it was then understood". The Court did not discuss why an alibi defense should waive a defendant's right to instruction on lesser included offenses, nor did it review the analyses in Williams or Membres. We agree with the concurring opinion in Clemons "that the alibi makes not a whit of difference", 74 Mich App at 459; 253 NW2d at 800 (D.C. RILEY, J., concurring), and hold that assertion of an alibi defense does not deprive a defendant of his right to instruction on appropriate lesser included offenses.
Was assault and battery a lesser included offense of unarmed robbery in the instant case? MCLA 750.530; MSA 28.798 states that
"[a]ny person who shall, by force and violence, or by assault or putting in fear, feloniously rob, steal and take from the person of another, or in his presence, any money or other property which may be the subject of larceny, such robber not being armed with a dangerous weapon, shall be guilty of [unarmed robbery]."
*433 Assault has been defined as
"any intentional, unlawful offer of corporal injury to another by force, or force unlawfully directed toward the person of another, under such circumstances as create a well-founded fear of imminent peril, coupled with the apparent present ability to effectuate the attempt if not prevented." Tinkler v Richter, 295 Mich 396, 401; 295 NW 201, 203 (1940).
Battery is
"the wilful touching of the person of another by the aggressor or by some substance put in motion by him; or, as it is sometimes expressed, a battery is the consummation of the assault." Id.
An assault and battery is therefore a consummated assault. A necessarily included lesser offense is one such that it is impossible to commit the greater without first having committed the lesser. People v Ora Jones, supra, at 387; 236 NW2d at 464. Since it is possible to commit an unarmed robbery by some method of "putting in fear" other than through an assault and battery, assault and battery is not a necessarily included lesser offense of unarmed robbery. An offense is a cognate lesser included offense where it shares overlapping elements with the greater, and the overlapping elements relate to a common statutory purpose. Whether a lesser offense is a cognate included offense depends upon whether the facts in a given case will support a conviction on the lesser offense. People v Ora Jones, supra, at 389-390; 236 NW2d at 464-465. In the instant case there was evidence that defendant's group beat the campers into submission and then carried off their equipment. Since the "force and violence" through which the unarmed robbery was accomplished was *434 an assault and battery, the unarmed robbery in this case shares all the elements of assault and battery. Although the unarmed robbery statute has the dual purpose of protecting persons and their property, the overlapping elements have the shared purpose of protecting persons. Therefore, assault and battery was a lesser included offense of unarmed robbery in the instant case.
Ora Jones requires that instructions on cognate lesser included offenses be given where requested by the defendant. The defendant in this case was found guilty prior to the release of the opinion in Ora Jones. Does Ora Jones apply retroactively? The Supreme Court has not explicitly addressed this issue. It has, however, consistently applied Ora Jones retroactively, albeit without discussing the retroactivity issue. See People v Lovett, 396 Mich 101; 238 NW2d 44 (1976), People v Thomas, 399 Mich 826; 249 NW2d 867 (1977). See also People v Bills, 396 Mich 819; 238 NW2d 803 (1976), People v Dates, 396 Mich 820; 238 NW2d 360 (1976), People v Archie Smith, 396 Mich 825; 238 NW2d 536 (1976), People v Aaron, 396 Mich 843; 239 NW2d 602 (1976), People v Watson, 396 Mich 870 (1976), People v Delvin Jones, 397 Mich 871 (1976). The Court of Appeals has split on the issue, with some panels deciding that the acts, if not the words, of the Supreme Court should be followed, while other panels have determined that substantial reliance on the old rule requires Ora Jones be given only prospective application.[1] Since *435 the Supreme Court has not explicitly decided this issue, and there is no consensus on the issue in this Court, we proceed to determine whether Ora Jones should be applied retroactively as to an instruction on a cognate lesser included offense.
As a general principle full retroactivity is the rule, and prospectivity is the exception. People v Markham, 397 Mich 530, 548; 245 NW2d 41, 49 (1976) (LEVIN, J., dissenting). However, retroactivity may be limited where a balancing of three factors so dictates. The three factors are (1) the purpose of the new rule, (2) the general reliance upon the old rule, and (3) the effect on the administration of justice of the new rule. People v Markham, supra, at 535; 245 NW2d at 42, People v Hampton, 384 Mich 669, 674; 187 NW2d 404, 405 (1971).
Hampton is instructive as to the importance of the first factor. In holding retroactive a new rule that a trial court must, on request, instruct that a defendant found not guilty by reason of insanity would not be released, the Supreme Court said:
"It is clear that the primary purpose of this instruction is to insure that a defendant will not be found guilty because the jury fears that he will be set free if an insanity verdict is returned. Thus, this decision goes to the very heart of our jury trial system. The United States Supreme Court has applied decisions retroactively *436 where the guilt or innocence of the defendant was at stake." 384 Mich at 676; 187 NW2d at 406.
The rule in Ora Jones maximizes a jury's discretion with regard to what verdict to render, institutionalizes the jury role as the conscience of the community, and prevents jury conviction on a higher offense merely because the jury recognizes a defendant committed some offense. The rule goes to the "very heart of our jury trial system". See People v Hampton, supra. However, we do not feel that the rule announced in Ora Jones is as fundamentally important as that made retroactive in Hampton. In any given case it is speculative that a jury would have convicted on a lesser charge, and the former rule, denying instruction only when there was no evidence to support a finding of a lesser offense, renders a finding of prejudice in any given case even more speculative.
The second and third factors may be considered together. People v Markham, supra. There was substantial reliance upon the old rule. See People v Wilkinson, 76 Mich App 109; 256 NW2d 48 (1977), People v Clemons, 74 Mich App 448; 253 NW2d 795 (1977), People v Harrison, 71 Mich App 226, 229-231; 247 NW2d 360, 361 (1976) (BASHARA, P.J., concurring). Because of that reliance, the impact on the administration of justice has been substantial. However, this impact has been lessened to an extent by the practice of remanding for resentencing on the lesser included offense, with the prosecutor maintaining the option to retry on the greater offense. See, e.g., People v Thomas, 399 Mich 826; 249 NW2d 867 (1977), People v Jenkins,[2]*437 395 Mich 440, 442-443; 236 NW2d 503, 504 (1975).
We feel the proper equilibrium in balancing the above factors is that reached by Judge BRENNAN in his dissent in People v Thurmond, 75 Mich App 310, 317-319; 254 NW2d 879, 882 (1977), limiting retroactivity to those cases in the process of appeal December 18, 1975, the date of the Ora Jones opinion. At some point the interest in the finality of the criminal process outweighs the value of granting full retroactivity. The point chosen has the advantage of insuring that Court of Appeals cases will receive the same disposition that Supreme Court cases have in the past.
Another factor militates against affirmance. When the jury asked whether defendant could be found guilty of assault and battery, the trial court affirmatively excluded as an option jury consideration of the lesser charge. This had long been considered as error. People v Lemmons, 384 Mich 1; 178 NW2d 496 (1970), People v Jones, 273 Mich 430; 263 NW 417 (1935). Although People v Henry, 395 Mich 367, 370-374; 236 NW2d 489, 492-493 (1975), ambiguously[3] states "a repudiation of the doctrine, first articulated in People v Jones, supra, *438 but endorsed and followed in Lemmons, that `affirmative exclusion' is erroneous but `implied exclusion' is not", the holding is narrow.
"[W]ith the sole exception of first-degree murder cases, failure of the trial court to instruct on lesser included offenses will not be regarded as reversible error, absent requests for such instructions before the jury retires to consider its verdict." 395 Mich at 374; 236 NW2d at 492.
In light of the Court's decision to maximize jury discretion as to what verdict to return, Ora Jones, supra, we do not feel that the Court intended to repudiate Lemmons and Jones where counsel requested the instruction, and the exclusion was as patently affirmative as it was in this case.
We reverse the conviction of unarmed robbery and remand for entry of a judgment of conviction on the lesser included offense of assault and battery and for resentencing. If, however, the prosecutor is persuaded that the ends of justice would be better served, upon notification to the trial court before resentencing, the trial court shall vacate the judgment of conviction and grant a new trial on the charge of unarmed robbery.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] People v Page, 73 Mich App 667; 252 NW2d 239 (1977), People v Van Wyck, 72 Mich App 101; 249 NW2d 311 (1976), and People v Harrison, 71 Mich App 226; 247 NW2d 360 (1976), held Ora Jones retroactive on the basis of Lovett in cases involving necessarily included offenses without distinguishing cognate offenses. People v Charles Jackson, 71 Mich App 395; 249 NW2d 132 (1976), held Ora Jones retroactive as to both necessarily included and cognate offenses, without distinguishing the two, based on Lovett. People v Jones, 76 Mich App 601, 605; 257 NW2d 185, 187 (1977), held Ora Jones retroactive as to a cognate offense, relying on People v Thomas, 399 Mich 826; 249 NW2d 867 (1977). People v Jones, 71 Mich App 270; 246 NW2d 381 (1976), and People v Jackson, 70 Mich App 478; 245 NW2d 797 (1976), held Ora Jones retroactive as to necessarily included offense, but questioned whether it was retroactive regarding cognate offenses. People v Thomas, 68 Mich App 302; 242 NW2d 564 (1976), rev'd 399 Mich 826 (1977), held Ora Jones prospective, and People v Wilkinson, 76 Mich App 109; 256 NW2d 48 (1977), and People v Clemons, 74 Mich App 448; 253 NW2d 795 (1977), refused to accord Ora Jones retroactive effect.
[2] The Court observed that, the jury having found guilt of first-degree murder, it must necessarily have found the lesser offense of second-degree murder. We note also that the presumed effect of failure to instruct on the lesser charge is that a defendant was not found guilty on the lesser charge, not that the instruction might have resulted in acquittal. Thus, the limited remand would be appropriate where the lesser offense is cognate rather than necessarily included.
[3] Did the Court repudiate the notion that "affirmative exclusion" is erroneous or that "implied exclusion" is not erroneous? The Court goes on to discuss the duty of the trial court to instruct on relevant law and indicates that it is considering formulation of a court rule requiring instruction on lesser offenses absent request by counsel. It thus appears to indicate dissatisfaction with the "implied exclusion" rule. Other language in the opinion implies the Court was overruling Lemmon and Jones, yet such an overruling would appear to be unnecessary to the decision and dicta, at least as it applies to the situation in the instant case where a jury affirmatively asks if it may convict on a lesser offense and the trial court answers "no". People v Hager, 72 Mich App 664, 667-668 fn 1; 250 NW2d 754, 755 fn 1 (1976), would interpret the Court's language as totally removing from the jury's consideration all uncharged lesser offenses.
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861 F.2d 1
PARIS UTILITY DISTRICT, Plaintiff, Appellee,v.A.C. LAWRENCE LEATHER CO., INC., Defendant, Appellant.
No. 88-1287.
United States Court of Appeals,First Circuit.
Heard Sept. 13, 1988.Decided Nov. 3, 1988.As Amended Nov. 15, 1988.
Peter L. Murray with whom Michael L. Parker and Murray, Plumb & Murray, Portland, Me., were on brief, for defendant, appellant.
Theodore H. Kurtz with whom Douglas M. Myers and Kurtz & Myers, South Paris, Me., were on brief, for plaintiff, appellee.
Before COFFIN, BOWNES and BREYER, Circuit Judges.
BOWNES, Circuit Judge.
1
This contract diversity action when tried in the district court involved a number of factual and legal issues. The district court wrote a comprehensive and trenchant opinion. Paris Utility District v. A.C. Lawrence Leather Co., 665 F.Supp. 944 (D.Me.1987). The appeal, however, presents only one issue: the effect to be given an indemnity agreement entered into between plaintiff-appellee Paris Utility District and defendant-appellant A.C. Lawrence Leather Co.
2
I. The basic facts, which are taken from the district court opinion, are not in dispute. Paris Utility District is a quasi municipal entity that provides water and sewer services in South Paris, Maine. A.C. Lawrence Co. ran a tannery in South Paris. In 1976, the District and Lawrence's predecessor Estech, Inc., executed a contract whereby the District would construct a sewage treatment plant and treat the industrial wastes from Lawrence's tannery as well as other sewage. The parties have stipulated that the 1976 agreement is binding on Lawrence and the District. Under paragraph 21 of the contract, Lawrence agreed that the District could use, without cost, a specified portion of Lawrence's premises for depositing sludge produced by the sewage treatment plant. The balance of paragraph 21, which contains the indemnity agreement that is the focus of this appeal, provides:In consideration of this permit, the District shall conduct on such premises a sanitary land-fill operation in accordance with all applicable Federal, State and local statutes, ordinances and regulations, and, further, the District shall indemnify, save and hold the Company harmless from and against any and all liabilities and claims arising out of the activities conducted by the District on such premises. (Emphasis added.)
3
The District used the designated portion of the premises (known as the landfill) for depositing sludge.
4
We now quote directly the pertinent findings of the district court.
5
As contemplated by the 1976 Agreement, the District deposited sludge in the landfill on Lawrence's premises. (Lawrence itself had been depositing waste at the site since 1955.) In 1973 the District had applied to Maine's Board of Environmental Protection (BEP) for permission to operate a landfill at the Lawrence site. The BEP denied the application because the soil on the site was too permeable to be suitable for sludge disposal; Lawrence knew of the BEP denial as early as 1975. The BEP ordered the District to find another site, but in the interim granted the District a series of temporary, conditional permits to operate the landfill. The last of these permits expired on October 1, 1979, and the District's application for a further extension was denied.
6
The BEP ordered the District to submit a site closure plan and a ground water quality monitoring plan by December 12, 1979. Despite an exchange of letters between the District and BEP over the following years, the District never submitted a site closure plan and did not submit the monitoring plan until 1985, when it did so in conjunction with Lawrence. Lawrence received copies of several of the District-BEP letters during this period and thus was repeatedly reminded that BEP had found the site unsuitable for permanent use and that the District was not operating the site in accordance with applicable law. Much of the sludge that the District deposited at the site was the by-product of the District's treatment of wastes from Lawrence's own operations, and Paul Finnegan, Lawrence's Director of Environmental Affairs, told the District that finding an appropriate landfill site elsewhere would have been very expensive for Lawrence.
7
665 F.Supp. at 946-47.
8
Since at least March of 1985, Lawrence has retained an engineering firm to monitor ground water contamination at the landfill used by the District on Lawrence's premises. Lawrence did so in order to comply with BEP requirements. As of October 1986, Lawrence had been billed more than $60,000 for these monitoring services.
9
Id. at 949.
10
II. The question is whether Lawrence can recover from the District under the indemnity provision of the 1976 contract the $60,000 it has been billed for the monitoring services. We agree with the district court that it cannot.
11
The controlling law on the scope and effect to be given indemnity agreements of the type at issue here is set forth in Emery Waterhouse Company v. Lea, 467 A.2d 986 (Me.1983):
12
Indemnity clauses to save a party harmless from damages due to negligence may lawfully be inserted in contracts such as the lease entered into between Emery Associates and Emery Waterhouse, and such clauses are not against public policy.
13
But, when purportedly requiring indemnification of a party for damage or injury caused by that party's own negligence, such contractual provisions, with virtual unanimity, are looked upon with disfavor by the courts, and are construed strictly against extending the indemnification to include recovery by the indemnitee for his own negligence. It is only where the contract on its face by its very terms clearly and unequivocally reflects a mutual intention on the part of the parties to provide indemnity for loss caused by negligence of the party to be indemnified that liability for such damages will be fastened on the indemnitor, and words of general import will not be read as expressing such an intent and establishing by inference such liability.
14
Id. at 993 (citations omitted).
15
It seems clear that, as the district court held, the indemnity agreement here did not meet the Emery Waterhouse requirements. The agreement provides: "The District shall indemnify, save and hold the Company harmless from and against any and all liabilities and claims arising out of the activities conducted by the District on such premises." The contract "on its face and by its very terms" does not "clearly and unequivocally reflect a mutual intention on the part of the parties to provide indemnity for loss caused" by the negligence of Lawrence, the party to be indemnified.
16
Lawrence seeks to avoid the strictures of the Maine rule on the ground that it is the intent of the parties that controls, and that such intent must be gleaned from all the circumstances at the time the indemnity contract was executed. Lawrence then goes on to argue that despite any knowledge or negligence on the part of Lawrence, the District intended to assume all of the risks attendant upon use of the landfill for depositing sludge. This, Lawrence says, is clear because the District knew that Lawrence and its predecessor, Estech, had been using the landfill area as a dumpsite for its own sludge since 1955.
17
Lawrence cites as authority for its argument Whit Shaw Associates v. Wardwell, 494 A.2d 1385 (Me.1985). The question in that case was the effect to be given an indemnity clause that was part of a brokerage agreement for the sale of a bakery business. The clause provided that the Broker agreed to prepare for the Owner a brochure describing the business, with the Owner having the right to review, make corrections, and give his written approval for the final version of the brochure. The sentence in dispute read: "Owner shall indemnify and hold harmless the Broker for any loss, injury or damage suffered by Broker by reason of any claim arising out of or by reason of an error, misleading statement or misrepresentation contained in said brochure." Id. at 1386. The Supreme Judicial Court of Maine found that "the definition of 'Owner' for purposes of identifying who undertook to indemnify Whit Shaw is ambiguous." Id. It held that "[w]ho the owner is cannot be determined without extrinsic evidence." Id. The case was remanded to resolve the ambiguity. In the course of its opinion, the court stated the well-known rule: "[T]he paramount principle in the construction of contracts is to give effect to the intention of the parties as gathered from the language of the agreement viewed in the light of all the circumstances under which it was made." Id. at 1387. This case does not, as Lawrence urges, modify the Emery Waterhouse rule as to indemnity agreements so as to make the intent of the parties the sine qua non. Nowhere does Whit Shaw mention Emery Waterhouse, decided two years prior, either directly or indirectly. It merely restates the universally accepted contract principle that where a contract, or a part thereof, is ambiguous, extrinsic evidence may be used to determine the intent of the parties. There is nothing ambiguous about the indemnity agreement in the case before us. The District is obligated to indemnify Lawrence for any and all claims "arising out of the activities conducted by the District" on Lawrence's premises. Whit Shaw is no bar to the application of Emery Waterhouse and the intent of the parties is not a factor to be considered.
18
Lawrence also tries to avoid the impact of Emery Waterhouse on the grounds that its facts differentiate it from the case at bar and therefore it does not apply. We need not rebut point by point Lawrence's rather intricate argument. Emery Waterhouse laid down a general rule as to indemnity agreements. Unless the rule is narrowed by the Supreme Judicial Court of Maine, we are bound under the Erie doctrine to follow it. We have found no Maine case, and Lawrence has cited none, limiting the scope of Emery Waterhouse.
19
The next contention made by Lawrence is that its conduct was neither tortious, nor "active" negligence and that therefore Emery Waterhouse does not apply. The district court made the following findings on the issue of whether Lawrence was negligent and whether such negligence made the ground water monitoring necessary.
20
The Court has no difficulty in concluding that Lawrence's conduct in this respect was, at the least, negligent. Lawrence was aware at least as early as 1975 that its site was unsuitable for permanent use as a landfill because the permeability of the soil made the landfill a threat to the ground water. And Lawrence was repeatedly reminded of this fact, and of the need to close the landfill, from the time the 1976 Agreement was signed up until the present. It appears that Lawrence learned as early as 1977 that the BEP required ground water monitoring at the site. Lawrence knew that after October 1, 1979 the use of the landfill violated applicable law, yet it took no steps to stop the District's use of the landfill, as Paragraph 21 gave it the right to do in such a situation. Nor did Lawrence otherwise attempt to reduce the threat of ground water contamination. Lawrence continued to operate the tannery throughout this period, generating a large proportion of the waste that the District deposited at the landfill. The Court makes no determination of what Lawrence knew or should have known about the harm that contaminated ground water from its site had caused or might cause. The Court determines only that Lawrence failed to exercise ordinary care to minimize the threat of ground water contamination and that Lawrence thereby caused the ground water monitoring to become necessary.
21
Id. at 960-61 (footnote omitted).
22
Findings of fact cannot be set aside unless they are clearly erroneous. Fed.R.Civ.P. 52(a). See Anderson v. Bessemer City, 470 U.S. 564, 573-76, 105 S.Ct. 1504, 1511-13, 84 L.Ed.2d 518 (1985). Based upon the record, we cannot find that the district court's finding of negligence by Lawrence was clearly erroneous.
23
Lawrence's last argument requiring discussion is that its negligence was "passive" and therefore falls outside the ambit of Emery Waterhouse. Its legal basis for the claim is language taken from Northeast Bank of Lewiston and Auburn v. Murphy, 512 A.2d 344 (Me.1986). We point out first that Northeast Bank did not involve an indemnity agreement. The question was whether an insurer which paid the settlement proceeds of a personal injury action to the debtor's attorney in contravention of the judgment creditor's lien on settlement proceeds was entitled to indemnity from the attorney in the judgment creditor's conversion action against the insurer. The court found that the insurer had contacted the attorney on learning of the lien and did all it could to assure that the lien would be paid and tried to persuade the attorney to set aside funds to satisfy the lien. In finding that the attorney should indemnify the insurer the court stated:
24
The case at bar is an appropriate one for indemnity in order 'to do justice within the law so that one guilty of an active or affirmative act of negligence [or intentional act] will not escape liability, while another whose fault was only technical or passive assumes complete liability.' 41 Am.Jur.2d Indemnity Sec. 20, at 706 (1968).
25
Id. at 351. As in Whit Shaw Associates v. Wardwell, 494 A.2d 1385, there is no mention directly or by plausible inference of Emery Waterhouse. We do not think that this statement can be the basis for carving a "passive" negligence exception out of Emery Waterhouse. We add that we are dubious that Lawrence's conduct and failure to act can correctly be characterized as "passive" negligence.
26
We have considered all other contentions made by Lawrence and find them unavailing. The rule of Emery Waterhouse controls.
27
AFFIRMED.
28
Costs to appellee.
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717 A.2d 1129 (1998)
In re John DOE Grand Jury Proceedings. § 5-37.3-6.1.
No. 97-283-M.P.
Supreme Court of Rhode Island.
August 4, 1998.
*1130 Lauren Sandler Zurier, Asst. Attorney General, Aaron Weisman; Helen D. Altomari, Providence, for Plaintiff.
Glenn R. Friedemann, Providence, for Defendant.
Before WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS and GOLDBERG, JJ.
OPINION
GOLDBERG, Justice.
The issue in this case concerns the applicability of the notification requirements of the Confidentiality of Health Care Communications and Information Act (CHCCIA or act), G.L.1956 chapter 37.3 of title 5, in the context of grand jury proceedings. Specifically the parties to the instant action contest whether notifying a patient that his or her medical records have been subpoenaed by the grand jury, as required by § 5-37.3-6.1 of the CHCCIA, violates the grand jury secrecy requirements of Rule 6(e) of the Superior Court Rules of Criminal Procedure. For the reasons set forth below, we hold that the required notification does not implicate the provisions of Rule 6(e) and that thus the grand jury is obligated to comply with § 5-37.3-6.1 and to inform interested parties of the issuance of a subpoena and their right to object to the production of the records.
I
Facts and Travel
On various dates between January 13, 1997, and April 23, 1997, the Providence County Grand Jury (grand jury) served subpoenas duces tecum upon Rhode Island Hospital (hospital), seeking the medical records of twelve patients who were being investigated by the grand jury. Each of the twelve patients had been treated at the hospital between May 1996 and April 1997. Of the twelve sets of records sought, eight concerned tests for blood-alcohol and drug concentrations performed on those patients, while the remaining four requests sought "all medical records for treatment" on the given *1131 dates. It is noteworthy that one of the patients whose records were subpoenaed by the grand jury died prior to the issuance of the subpoena for his records.
Citing the CHCCIA, the hospital refused to produce the requested records and instead moved the Superior Court to quash the subpoenas and/or to issue protective orders. The hospital maintained that the grand jury had failed to comply with § 5-37.3-6.1(a) and serve copies of the subpoenas on the individuals whose records were being sought together with a notice of the individuals' right to challenge the subpoenas. The state maintained that it could not comply with the notice provisions of § 5-37.3-6.1(a) without violating the secrecy requirements of Rule 6(e) and risking contempt charges pursuant to G.L.1956 § 12-11.1-5.1.[1]
A hearing was held on the hospital's motions on May 22, 1997, before a justice of the Superior Court. After hearing from counsel and conducting an in camera proceeding with a representative from the Office of the Attorney General concerning the necessity and relevancy of the documents sought, the trial justice denied the hospital's motions and concluded that the medical records were material to the grand jury proceedings and that the need for the records outweighed the privacy interests of the individual patients. Thus he ordered that the information be disclosed but solely for the purpose of investigation by the grand jury. Thereafter the hospital filed this petition for certiorari and a motion to stay the Superior Court order. We granted the petition, issued the stay, and further directed the parties to brief the issue of the propriety of naming police officers as agents of the grand jury.
In support of its petition the hospital argues that compliance with the notification requirements of the CHCCIA by the grand jury would neither violate the secrecy requirements of Rule 6(e) nor subject the state to charges of criminal contempt. The hospital asserts that subpoenas that identify the names of patients and compel the production of medical records do not constitute matters occurring before the grand jury and thus are not within the scope of Rule 6(e) but that even if they were, the reasons that necessitate the imposition of secrecy over the grand jury proceedings do not apply. Conversely the state maintains that this case presents a direct conflict between the traditional rule of grand jury secrecy and the notification provisions of § 5-37.3-6.1 and that it cannot meet its obligations under the CHCCIA without violating its duties under Rule 6(e), thereby subjecting the disclosing grand juror or prosecutor to charges of criminal contempt. The state further asserts that in resolving this conflict, the Court must consider the policies underlying the requirement of grand jury secrecy and ultimately determine that the secrecy requirements of Rule 6(e) are paramount to the disclosure requirements of § 5-37.3-6.1.
After a careful review of Rule 6(e) and the recently amended CHCCIA, as well as the polices underlying the dictates of both provisions, we are of the opinion that the Legislature has made clear its intentions to protect the privacy rights of individuals with respect to their medical records and that the secrecy provisions of the grand jury proceedings are not threatened by giving these individuals notice and an opportunity to object to the disclosure of their records.
*1132 II
Analysis
We begin our analysis with an examination of the relevant provisions and note that when the Court is called upon to construe provisions of coexisting statutes, we attempt to follow the rule of statutory construction that provides that statutes relating to the same subject matter "should be construed such that they will harmonize with each other and be consistent with their general objective scope." Blanchette v. Stone, 591 A.2d 785, 786 (R.I.1991). See also Pickering v. American Employers Insurance Co., 109 R.I. 143, 148, 282 A.2d 584, 587 (R.I. 1971). This rule also applies to rules of court. See Singer, 2B Sutherland Statutory Construction § 51.02 (5th ed.1992)
The Confidentiality of Health Care Communications and Information Act
The CHCCIA represents the General Assembly's attempt to create a physician-patient privilege that had not existed previously in the state of Rhode Island. See State v. Guido, 698 A.2d 729, 734 (R.I.1997); In re Grand Jury Investigation, 441 A.2d 525, 526-27 (R.I.1982). The act, which was first promulgated by virtue of P.L.1978, ch. 279 § 1, and was then referred to as the "Confidentiality of Health Care Information Act" (CHCIA), was intended "`to establish safeguards for maintaining the integrity of confidential health care information that relates to an individual." In re Grand Jury Investigation, 441 A.2d at 528. As originally drafted, § 5-37.3-4(a) of the CHCIA prohibited the release of a patient's confidential healthcare information without the patient's written consent, subject to certain enumerated exceptions listed in § 5-37.3-4(b). Id. Furthermore, § 5-37.3-6 of the CHCIA provided that this information was not subject to compulsory legal process.
In Bartlett v. Danti, 503 A.2d 515 (1986), however, this Court declared these sections of the CHCIA to be unconstitutional as violative of the separation of powers mandated by article 3 of the Rhode Island Constitution. 503 A.2d at 517. Specifically we stated that "in addition to interfering with the subpoena power of the judiciary, [the CHCIA] removes from the court's discretion the determination of the admissibility of otherwise relevant evidence." Id Instead, the Court found that the CHCIA vested "the power to make such determinations in the hands of individual patients who can decide with impunity whether to permit access to such information." Id.
Later, in State v. Almonte, 644 A.2d 295 (R.I.1994), this Court examined a similar provision of the Privileged Communications Act, G.L.1956 § 9-17-24, which addressed communications to and information obtained by health-care providers. The Almonte Court noted that although this statute was enacted subsequent to our opinion in Bartlett and with an obvious intent to cure the constitutional infirmities of the CHCIA, it tracked "with little modification the language set forth in the earlier statute." Almonte, 644 A.2d at 298. The Court concluded that it must answer the questions presented by § 9-17-24 the same way it had answered the questions presented by §§ 5-37.3-4 and 5-37.3-6 of the CHCIA in Bartlett so as not to "allow the Legislature to create such a sweeping privilege with regard to health-care information as to cripple the ability of the Judiciary to try and determine a wide range of civil and criminal cases." Almonte, 644 A.2d at 298. We noted, however, that our opinion was in no way intended to prohibit the General Assembly from enacting a statute "dealing with confidential communications between a physician and a patient" but rather was simply stating that a statute could not unequivocally impinge upon the power of the Judiciary in carrying out its fact finding function. Id. at 299. See also Washburn v. Rite Aid Corp., 695 A.2d 495, 498 (R.I.1997) ("neither Bartlett nor Almonte eradicated the underlying privilege created by such statutes").
With this pronouncement in mind, the Legislature once again undertook the task of fashioning a statute that would address the need for confidential communications between physician and patient while at the same time adhering to the authority of the Judiciary to access this type of information. After numerous amendments and revisions to *1133 the CHCIA, on August 6, 1996 the General Assembly enacted the CHCCIA. See P.L. 1996, ch. 248 and P.L.1996, ch. 266. Significantly the amended act added subsection 6.1, which provides:
"(a) Except as otherwise provided in § 5-37.3-6, a health care provider or custodian of health care information may disclose confidential health care information in a judicial proceeding if the disclosure is pursuant to a subpoena and the provider or custodian is provided written certification by the party issuing the subpoena that:
(1) A copy of the subpoena has been served by the party on the individual whose records are being sought on or before the date the subpoena was served, together with a notice of the individual's right to challenge the subpoena; or, if the individual cannot be located within this jurisdiction, that an affidavit of that fact be provided; and
(2) Twenty (20) days have passed from the date of service on the individual and within that time period the individual has not initiated a challenge; or
(3) Disclosure is ordered by a court after challenge.
"(b) Within twenty (20) days after the date of service of a subpoena, an individual or his/her authorized representative may file a motion to quash the subpoena in the court in which the case is pending or, if no case is pending, in superior court. A copy of the motion to quash shall be served by the movant upon the party issuing the subpoena in accordance with the rules of civil procedure.
"(c) The party issuing the subpoena may file with the court such papers, including affidavits and other sworn documents, as sustain the validity of the subpoena. The movant may file with the court reply papers in response to the issuing party's filing. The court, upon receipt of these papers may proceed in camera. The court may conduct such proceedings as it deems appropriate to rule on the motion, but shall endeavor to expedite its determination.
"(d) The court shall grant a motion to quash unless the requesting party can demonstrate that there is reasonable ground to believe the information being sought is relevant to the proceedings, and the need for the information clearly outweighs the privacy interest of the individual.
"(e) In determining whether the need for information clearly outweighs the privacy of the individual, the court shall consider:
(1) The particular purpose for which the information was collected;
(2) The individual's reasonable expectation of privacy in the information;
(3) The degree to which disclosure of the information would embarrass, injure, or invade the privacy of the individual;
(4) The effect of the disclosure on the individual's future health care;
(5) The importance of the information to the lawsuit or proceeding; and
(6) Whether the information is available from another source, including rule 35 of the rules of civil procedure.
"(f) If the court determines that a subpoena should issue, the information shall not be disclosed for any other purpose except as otherwise authorized by this chapter.
"(g) Nothing contained herein shall be construed to bar a health care provider or custodian of health care information from filing a motion to quash a subpoena for such information in accordance with the rules of civil procedure." Section 5-37.3-6.1.
In so doing, the General Assembly provided a means by which information could be disclosed in a judicial proceeding without obviating a patient's right to contest the disclosure.
It is our opinion that this newly amended provision adequately addresses the heretofore recognized constitutional infirmities and strikes a permissible balance between a party's interest in maintaining the confidentiality of his or her personal health care records and the court's need to access relevant information. A presumption in favor of privacy exists, but the party seeking the disclosure may overcome this presumption *1134 by demonstrating a particularized need that clearly outweighs the privacy interest of the interest of the individual. See § 5-37.3-6.1.
Rule 6(e)
"The grand jury has always occupied a high place as an instrument of justice in our system of criminal law * * *. * * * It serves the `dual function of determining if there is probable cause to believe that a crime has been committed and of protecting citizens against unfounded criminal prosecutions.'" United States v. Sells Engineering, Inc., 463 U.S. 418, 423, 103 S.Ct. 3133, 3137, 77 L.Ed.2d 743, 751-52 (1983). "[C]oncern for the grand jury's dual function underlies the `long-established policy that maintains the secrecy of the grand jury proceedings.'" Id. at 424, 103 S.Ct. at 3138, 77 L.Ed.2d at 752.
"Although the English forerunner of the modern grand jury served primarily as a prosecutorial and investigative arm of the Crown and was designed to enhance the government's authority, by the 17th century the grand jury had developed an equally important function to safeguard citizens against an overreaching Crown and unfounded accusations. * * * The tradition of secrecy surrounding grand jury proceedings evolved, at least partially, as a means of implementing this latter function by ensuring the impartiality of that body." Butterworth v. Smith, 494 U.S. 624, 629, 110 S.Ct. 1376, 1380, 108 L.Ed.2d 572, 580 (1990).
Rule 6(e) of the Superior Court Rules of Criminal Procedure codifies the traditional rule of grand jury secrecy and provides in pertinent part:
"Disclosure of matters occurring before the grand jury, other than its deliberations or the vote of any juror where an indictment has not been returned, may be made to attorneys for the State for use in the performance of their duties. Otherwise, a juror, attorney, interpreter, stenographer, operator of a recording device, or any typist who transcribes recorded testimony may disclose matters occurring before the grand jury only when so directed by the court preliminary to or in connection with a judicial proceeding or when permitted by the court at the request of the defendant upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury. No obligation of secrecy may be imposed upon any person except in accordance with this rule."
In construing Rule 6(e), courts begin with the "fundamental policy of grand jury secrecy." In re Grand Jury Investigation, 642 F.2d 1184, 1190 (9th Cir.1981); see also Douglas Oil Company of California v. Petrol Stops Northwest, 441 U.S. 211, 218, 99 S.Ct. 1667, 1672, 60 L.Ed.2d 156, 164 (1979); State v. Carillo, 112 R.I. 6, 11, 307 A.2d 773, 776 (1973). Accordingly, whenever a reviewing court is asked to determine whether a specific disclosure impermissibly pierces this veil of secrecy, that court must examine not only the need for and the character of the material sought but also the effect such disclosure would have on policies underlying grand jury secrecy. These policy considerations include (1) preventing the escape of those whose indictment may be contemplated, (2) ensuring the grand jurors the utmost freedom in their deliberations and preventing a defendant or target of an investigation from importuning them, (3) preventing the subornation of perjury and other witness tampering, (4) encouraging the free and untrammeled disclosure of relevant information, and (5) protecting the innocent defendant or target exonerated by the investigation from public disclosure of the fact that he or she was under investigation. See In re Grand Jury Investigation, 642 F.2d at 1191; see also Carillo, 112 R.I. at 11-12 n. 4, 307 A.2d at 776 n. 4. Nevertheless various courts have cautioned that the secrecy extended to grand jury proceedings is not absolute. "There is no per se rule against disclosure of any and all information which has reached the grand jury chambers." Senate of the Commonwealth of Puerto Rico v. United States Department of Justice, 823 F.2d 574, 582 (D.C.Cir.1987). See also Butterworth, 494 U.S. at 630, 110 S.Ct. at 1380, 108 L.Ed.2d at 580; United States v. Stanford, 589 F.2d 285, 291 (7th Cir.1978); Carillo, 112 R.I. at 11, *1135 307 A.2d at 776. See, e.g., In re Vescovo Special Grand Jury, 473 F.Supp. 1335, 1336 (C.D.Cal.1979) (government cannot impose obligation of secrecy on bank employee with respect to grand jury subpoena requiring production of financial records of a bank customer).
With these principles in mind, we turn our attention to the issue squarely before the Court: Does notice to a target of a grand jury investigation or other person that a subpoena has been issued for his or her medical records, as well as an opportunity to object to the same, constitute disclosure of a "matter[ ] occurring before the grand jury" that serves to undermine the stated reasons for grand jury secrecy? A review of the underlying policies and relevant case law leads us to conclude that it does not.
To begin, we are not persuaded that a subpoena issued by the grand jury constitutes a "matter[ occurring before the grand jury." After an extensive review of both state and federal cases, we discern "no reading of Rule 6(e) so literal as to draw a `veil of secrecy over ... all matters occurring in the world that happen to be investigated by a grand jury." Senate of the Commonwealth of Puerto Rico, 823 F.2d at 582. The courts have consistently held that "the touchstone is whether disclosure would `tend to reveal some secret aspect of the grand jury's investigation' " including " the identities of witnesses or jurors, the substance of testimony, the strategy or direction of the investigation, the deliberations or questions of jurors, and the like.'" Id.; see also Fund for Constitutional Government v. National Archives and Records Service, 656 F.2d 856, 869 (D.C.Cir. 1981); Stanford, 589 F.2d at 291. If the disclosure of the information will not reveal the inner workings of the grand jury investigation, Rule 6(e) is not applicable and the information may be disclosed. See Stanford, 589 F.2d at 291 ("[p]ersons may have a legitimate interest in documents so that disclosure to them does not constitute disclosure of matters occurring before the grand jury"). It is our opinion that the issuance of a subpoena and its service upon a person inherently is not a secret.
It is arguable the notification of a patient that a subpoena has issued for his or her medical records could reveal the nature and course of the grand jury investigation. See Fund for Constitutional Government, 656 F.2d at 869-70 (disclosure of potential witnesses and potential document exhibits could reveal strategy of investigation). We find this position unpersuasive, however, in that we can perceive no justifiable distinction between this instance and those in which an individual targeted by a grand jury investigation is subpoenaed and asked to provide a handwriting or voice exemplar, fingerprints, or hair sample. See, e.g., In re Melvin, 546 F.2d 1, 4 (1st Cir.1976) (subpoena for fingerprints and photographs permissible); United States v. O'Kane, 439 F.Supp. 211, 213 (S.D.Fla.1977) (compelling handwriting or voice exemplars permissible); State v. Bertram, 591 A.2d 14, 21-22 (R.I.1991) (compelling handwriting exemplar). Similarly Rule 3.8(f) of the Supreme Court Rules of Professional Conduct prohibits a prosecutor from issuing a subpoena to an attorney seeking disclosure of information obtained as a result of the attorney-client relationship without first obtaining judicial approval. We have declined to create an exception to this rule for grand jury investigations. See In re Petition of Almond, 603 A.2d 1087, 1088-89 (R.I.1992).
The perceived threat of revealing the nature and course of the investigation to a potential grand jury target is no different in this instance, and thus this argument cannot serve as the basis for denying disclosure. Further we are satisfied that in an appropriate case in which the risk of flight or other untoward consequences may arise from notice to the patient that his or her records are sought, the Presiding Justice of the Superior Court has the inherent authority to order the custodian to produce the records. See Bartlett v. Danti, 503 A.2d 515 (R.I.1986).
Moreover, we note that the grand jury's subpoena power is not without limits. See United States v. Calandra, 414 U.S. 338, 346, 94 S.Ct. 613, 619, 38 L.E d.2d 561, 570 (1974). The grand jury "may consider incompetent evidence, but it may not itself violate a valid privilege, whether established *1136 by the Constitution, statutes, or the common law." Id.; In re Zuniga, 714 F.2d 632, 636 (6th Cir.1983) (grand jury cannot violate a valid privilege). Without notice of the subpoenas being afforded to the individual patients, there would be no means by which to challenge the grand jury's use of its subpoena powers. See People v. DeLaire, 240 Ill. App.3d 1012, 183 Ill.Dec. 33, 610 N.E.2d 1277, 1283 (1993) (subpoena power is not unlimited so that respondent of subpoena has an opportunity to quash it before complying); see also In Matter of Grand Jury Subpoenas Dated October 22, 1991 and November 1, 1991, 959 F.2d 1158, 1163-64 (2nd Cir.1992) (custodian cannot assert Fifth Amendment privilege).
The state maintains, however, that our opinion in Guido is dispositive in this case and precludes the conclusion reached by this Court. Specifically the state posits that in passing on arguments similar to those in the instant case, the Guido Court rejected the defendants contentions that he had a legitimate expectation of privacy with respect to the medical records sought or that he was afforded any statutory protection by the CHCIA. In so doing this Court reasoned that the pertinent provisions of the CHCIA "could not constitutionally prohibit judicial access to these types of records." Guido, 698 A.2d at 734. In spite of the perceived similarities between the scenario presented in this case and that presented in Guido, however, we conclude that several key factual distinctions between the two cases undermine the state's reliance on Guido.
First, we note that Guido addressed § 5-37.3-4 of the CHCIA and not § 5-37.3-6.1 of the amended CHCCIA. Thus the analysis conducted in Guido is not relevant to this discussion. Furthermore unlike § 5-37.3-4 of the CHCIA, § 5-37.3-6.1 of the CHCCIA does not "prohibit judicial access to [a patient's medical] records," 698 A.2d at 734, but rather implements a procedure by which the individual patient can object to the disclosure.
Moreover, one of the major reasons we declined to find reversible error in Guido was that the prosecutor later obtained "a Rule 17(c) subpoena that was issued upon
probable cause, after proper application to the Superior Court and after due notice had been given to defense counsel." Guido, 698 A.2d at 738. We are of the opinion that this is a significant distinction that should not be overlooked.
The state further argues that since "patients have neither a constitutional nor a statutory basis for resisting an otherwise legitimate grand jury subpoena duces tecum," it serves no purpose to afford them an opportunity to object to the subpoenas. This argument is flawed in two respects. First, Guido does not stand for the proposition that an individual does not possess any protected interest in his or her medical records, it simply states that there is no constitutional right of privacy. Id. at 734. With respect to a statutory right of privacy, the Guido court acknowledged the Legislature's attempt to create such a right and only took issue with the portion of the act that afforded the unrestricted right to deny access. Id. Furthermore, this argument presumes that the subpoena is otherwise valid. We cannot and shall not make any such presumptions and therefore conclude that the patient should be given the opportunity to challenge the validity of the subpoena. See In re Zuniga, 714 F.2d at 641 (no reasonable expectation that medical history will remain completely confidential does not mean that a person has no interest in protecting to a certain extent his or her medical records).
Accordingly we perceive no inconsistency between § 5-37.3-6.1 and Rule 6(e). We conclude that requiring conformance with the notification provisions of the CHCCIA by the grand jury does not effect an unconstitutional abrogation of and intrusion upon the grand jury's power to conduct a criminal investigation but rather strikes a balance between an individual's privacy interests and the state's interests in prohibiting illegal activity.
Agency
Finally we address the issue of the grand jury's use of police officers as their agents. In Guido we expressed misgivings concerning this practice and issued cautionary directives against its continued use. Guido, 698 A.2d at 736-38. Nevertheless the grand *1137 jury continues to utilize police officers (and other law enforcement officers) as its authorized representatives in serving subpoenas and also securing the return of service. Accordingly we requested that both parties brief and address the propriety of this practice. Unfortunately, after reviewing the briefs submitted by the parties and considering the oral arguments of counsel, we are even more troubled by the persistent utilization of law enforcement officers as agents of the grand jury and conclude this practice to be more pervasive than we were originally led to believe.
While acknowledging that the State of Rhode Island "does not have a rule or statutory procedure expressly authorizing grand juries to appoint police officers or other governmental personnel as their agents," the state relies upon Rule 17(d) of the Superior Court Rules of Criminal Procedure as authorizing a police officer to undertake the service of a subpoena issued by the grand jury and asserts that appointment by the grand jury as its authorized agent is a "long-standing practice in our jurisdiction." Rule 17(d) states:
"A subpoena may be served by the sheriff, by the sheriff's deputy, by a constable, or by any other person who is not a party and who is not less than eighteen (18) years of age. Service of a subpoena shall be made by delivering a copy thereof to the person named and by tendering to him the fee for one (1) day's attendance and the mileage allowed by law. When the subpoena is issued in behalf of the State or an officer or agency thereof, fees and mileage need not be tendered."
We note, however, that this provision merely authorizes the police to serve subpoenas and does not confer upon the officers the power to effectuate return of service or other broad investigatory powers commensurate with a grand jury proceeding. Furthermore, we have found nothing in our review of Rhode Island case law that would indicate this Court's approval of this unauthorized practice.
The state asserts, however, that the pre-1977 federal version of Rule 6(e), upon which our rule was modeled, has long been construed to permit precisely the disclosure that occurs when police officers are appointed agents of the grand jury and that as a practical matter, the grand jury would not be able to perform its investigative functions without extensive help from other law enforcement personnel in doing the legwork. We conclude, however, that the state's reliance on the original version of Rule 6(e) of the Federal Rules of Criminal Procedure is misplaced.
Federal Rule 6(e) has been amended by Congress numerous times since its adoption in 1944 and in its present form has little similarity to its Rhode Island counterpart. Only in its amended form does the rule provide for the disclosure to government personnel assisting in an investigation and only then after certain mandatory precautions have been taken to preserve grand jury secrecy, namely that the federal prosecutor "promptly provide the district court, before which was impaneled the grand jury whose material has been so disclosed, with the names of the persons to whom such disclosure has been made, and * * certify that the attorney has advised such persons of their obligation of secrecy under this rule." Fed.R.Crim.P. 6(e)(3)(B); See also United States v. Hogan, 489 F.Supp. 1035, 1038 (W.D.Wash.1980). In addition Federal Rule 6(e) provides that the person to whom matters are disclosed may utilize the material only to assist the attorney for the government "in the performance of such attorney's duty to enforce federal criminal law." (Emphasis added.) Fed.R.Crim.P. 6(e)(3)(B); see also Stanford, 589 F.2d at 292-93 (disclosure to FBI is permissible but only when grand jury swears in FBI as agent of grand jury and precautions are taken to preserve secrecy).
In stark contrast, Rule 6(e) of the Superior Court Rules of Criminal Procedure contains no means by which a police officer can be appointed an agent, no explicit authorization to disclose information to police officers, and no procedural safeguards to underline the importance of secrecy or limit the scope of the disclosure. Indeed at oral argument the state was unable to describe the oath these agents are given or to explain its origin, nor *1138 was this Court provided with any evidence concerning the existence of any policies or procedures that govern the conduct of these agents. Accordingly we find reliance on federal precedent with respect to this issue to be inappropriate.
Having found no explicit statutory authority that would allow the utilization of police officers as agents of the grand jury, we must nevertheless determine whether it is a power inherent in the grand jury process. This Court has always recognized that law enforcement investigatory personnel are an integral part of a grand jury investigation. In re Grand Jury Investigation, 441 A.2d at 532. However, we have also expressed our concern that "a potential for danger exists whenever the grand jury's role is usurped or the grand jury is used to expand the investigating authority of the prosecuting attorney and police to circumvent constitutional safeguards." Guido, 698 A.2d at 737. Even though we observe that the in camera proceeding in this case occurred before our opinion in Guido, we take little comfort in that fact in light of the disclosures by the state at oral argument. Indeed neither the facts of this case nor the arguments submitted by the state in support of this practice have done anything to allay our fears.
First we point to the specific language used in these grand jury subpoenas. The subpoenas served upon the hospital indicated that the police officer serving the subpoena was an agent of the grand jury and that "these records should be given directly to him." This procedure is simply not allowed and results in police officers being armed with grand jury subpoenas demanding the immediate surrender of records that may be otherwise privileged. Once in receipt of the records, the officer has complete and unfettered use of them, including the prosecution of misdemeanor crimes without any participation of the grand jury or the Attorney General. We declare this practice to be well beyond the power of the grand jury and to be potentially abusive to the rights of citizens, resulting in a roving investigating commission that is the very antithesis of the purpose of the grand jury. See In re P.I. Nwamu, 421 F.Supp. 1361, 1365 (S.D.N.Y. 1976) (subpoena is not a warrant and does not provide agents the authority to demand compliance or seize subpoenaed items. The power to enforce a subpoena lies not with government agents but with the court).
Furthermore there is no procedure in place that addresses the risk that secret information will be disclosed in violation of Rule 6(e). As previously stated, the Superior Court has yet to adopt the same prophylactic procedures as its federal counterpart. See Fed.R.Crim.P. 6(e)(3)(B). The state's suggestion that a disclosing officer would be held in contempt pursuant to § 12-11.1-5.1 is of little assistance since the protections afforded by that statute are triggered not by the issuance of the subpoena but by the production of the material and the testimony before the grand jury.
Of greatest concern, however, is the demonstrated abuse of the grand jury subpoena power and the usurping of that power by the state's prosecutors. At oral argument it was disclosed that the Office of the Attorney General utilizes the grand jury for the issuance of subpoenas to obtain evidence concerning matters that are not before the grand jury and may never come before the grand jury. The prosecutor revealed to this Court that approximately 250 subpoenas were issued by the grand juries in Rhode Island for investigations and cases that are not grand jury matters. The state attempts to justify this practice on the grounds of management problems inherent in a procedure that limits grand jury subpoenas to grand jury matters, stating that this would give rise to the need for additional grand juries and staff to handle the increased volume. This practice, however, is simply unlawful and results in a total eradication of the independence of the grand jury and a merger of the identity of the grand jury with the prosecuting arm of the executive branch of government.
We remind the state's prosecutors that the General Assembly has not seen fit to authorize the Office of the Attorney General or the state's police departments to issue subpoenas for criminal investigations. "The subpoena power of the grand jury is designed for its own use, not to further independent investigations of the prosecutor or *1139 police." DeLaire, 183 Il1.Dec. 33, 610 N.E.2d at 1284. Indeed it is important to remember that the process issued by the grand jury is the process of the court, not the prosecutor.
Therefore we find ourselves constrained to declare that the grand juries of this state have no authority to appoint agents to recover documents in furtherance of investigations not related to the grand jury. We conclude that the issuance of so-called forthwith subpoenas for the immediate production of documents is more akin to the issuance of a warrant without the intervention of the neutral magistrate and is therefore impermissible. In addition, in circumstances in which a witness seeks to be excused from appearing before the grand jury and voluntarily surrenders records in lieu of a personal appearance, such materials are to be returned to the grand jury forthwith and a record is to be prepared and signed by the witness memorializing the transaction and the fact that the witness voluntarily waived his or her right to a personal appearance and right to contest the subpoena.
III
Conclusion
For the foregoing reasons the petition for certiorari is granted, and the order of the Superior Court is hereby quashed. The papers in this case may be remanded to the Superior Court with our decision endorsed thereon.
NOTES
[1] General Laws 1956 § 12-11.1-5.1, "Unlawful grand jury disclosure," states:
"(a) Any person who, when being a grand juror, a public prosecutor, a grand jury stenographer, a grand jury interpreter, a police officer or a peace officer guarding a witness in a grand jury proceeding, or a clerk, attendant, warden or other public servant having official duties in or about a grand jury room or proceeding, or a public officer or public employee, obtains information in his or her official capacity and intentionally discloses, prior to the report of the grand jury on the matter, to another the nature or substance of any grand jury testimony, or any decision, result, or other matter attending a grand jury proceeding which is required by law to be kept secret, except in the proper discharge of his or her official duties or upon written order of the court shall be guilty of grand jury disclosure. Nothing in this section shall be construed to prohibit a witness from disclosing his or her own testimony.
"(b) Any person who violates any provision of this section shall be punishable by a fine of note exceeding five thousand dollars ($5,000), or imprisonment not exceeding one year, or both."
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FILED
JUL 22 2016
1 ORDERED PUBLISHED
SUSAN M. SPRAUL, CLERK
2 U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP Nos. AZ-14-1497-JaJuKu
) AZ-15-1040-JaJuKu
6 DONALD GARY SHANNON and ) (Consolidated)
MAI DOAN SHANNON, )
7 ) Bk. No. 2:10-bk-35640-BKM
Debtors. )
8 ______________________________) Adv. No. 2:11-ap-00260-EPB
)
9 ANDRES CARDENAS; TERESA )
CARDENAS, )
10 )
Appellants, )
11 )
v. ) O P I N I O N
12 )
DONALD GARY SHANNON; MAI DOAN )
13 SHANNON, )
)
14 )
Appellees. )
15 ______________________________)
16 Argued and Submitted on May 20, 2016
at Phoenix, Arizona
17
Filed – July 22, 2016
18
Appeal from the United States Bankruptcy Court
19 for the District of Arizona
20 Honorable Eddward P. Ballinger, Jr., Bankruptcy Judge, Presiding
21
22 Appearances: H. Troy Romero of Romero Park P.S. argued for
appellants Andres Cardenas and Teresa Cardenas;
23 Neal H. Bookspan of Jaburg & Wilk, P.C. argued for
appellees Donald Gary Shannon and Mai Doan
24 Shannon.
25
Before: JAIME,1 JURY, and KURTZ, Bankruptcy Judges.
26
27
1
Hon. Christopher D. Jaime, United States Bankruptcy Judge
28 for the Eastern District of California, sitting by designation.
1 JAIME, Bankruptcy Judge:
2
3 Creditors Andres Cardenas and Teresa Cardenas (“Cardenases”)
4 appeal from an order denying their request for an order declaring
5 that a debt owed by debtors Donald Gary Shannon and Mai Doan
6 Shannon (“Shannons”) is non-dischargeable in the Shannons’
7 bankruptcy case and the judgment entered on that order
8 discharging the debt. The bankruptcy court concluded that the
9 Cardenases failed to prove several elements of their
10 non-dischargeability claim under 11 U.S.C. § 523(a)(2)(A),2 which
11 excepts from discharge debts for, among other things, money and
12 property to the extent obtained by false pretenses, a false
13 representation, or actual fraud.
14 The Cardenases also appeal the bankruptcy court’s order and
15 judgment awarding costs and attorney’s fees with interest to the
16 Shannons, arguing that the action before the bankruptcy court was
17 based in fraud and misrepresentation and not contract.
18 For the reasons explained below, we AFFIRM the bankruptcy
19 court’s ruling that the Cardenases failed to prove
20 non-dischargeability under § 523(a)(2)(A), we AFFIRM the
21 bankruptcy court’s award of costs to the Shannons in the amount
22 of $5,002.10, and we VACATE and REMAND the bankruptcy court’s
23 award of $72,691.00 in attorney’s fees to the Shannons.
24 ///
25
26 2
Unless specified otherwise, all chapter and section
27 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
all “Rule” references are to the Federal Rules of Bankruptcy
28 Procedure, Rules 1001-9037.
2
1 I. INTRODUCTION
2 The dispute below and this appeal arise out of a
3 longstanding business and personal relationship between the
4 Cardenases and the Shannons. It began in 2005 when Mr. Cardenas
5 purchased vacant land and a dilapidated building located at 30333
6 Pacific Highway South, Federal Way, Washington (“Washington
7 Property”) for $1,000,000.00, with Ms. Shannon’s assistance. It
8 continued with a fraud and negligent misrepresentation lawsuit
9 the Cardenases filed against the Shannons in Washington state
10 court in which the Cardenases obtained a default judgment in
11 excess of $1,000,000.00 against the Shannons after the Washington
12 Property was lost to foreclosure. The adversary proceeding
13 ensued when the Shannons moved to Arizona and filed a voluntary
14 petition for relief under chapter 7 of the Bankruptcy Code.
15 The Cardenases commenced an adversary proceeding in the
16 Shannons’ chapter 7 case in which they sought to have the debt
17 created by the Washington state court default judgment declared
18 non-dischargeable under § 523(a)(2)(A). After a three-day trial
19 during which the bankruptcy judge heard testimony from numerous
20 witnesses and judged their credibility, the bankruptcy court
21 entered an order denying the Cardenases’ request for an order
22 providing that any debt owed to them based on the Washington
23 state court default judgment be deemed non-dischargeable in the
24 Shannons’ bankruptcy case. Entry of a judgment, as amended,
25 discharging that debt followed. The bankruptcy court concluded
26 that the Cardenases failed to carry their burden of proof on two
27 elements of the § 523(a)(2)(A) claim. It also concluded that the
28 Cardenases failed to prove their damages were proximately caused
3
1 by their reasonable reliance on any representations made by the
2 Shannons.
3 In post-trial proceedings, the bankruptcy court awarded the
4 Shannons their costs and attorney’s fees as the prevailing
5 parties on the Cardenases’ § 523(a)(2)(A) claim.
6 The Cardenases first appealed from the adverse order and
7 judgment discharging the debt created by the Washington state
8 court default judgment. A subsequent appeal from the order and
9 judgment awarding costs and attorney’s fees followed. This court
10 consolidated both appeals.
11 II. FACTS3
12 A. The Parties
13 Before moving to Arizona, the Shannons resided in Washington
14 where they established a successful bookkeeping and accounting
15 practice. Ms. Shannon began her career with the Internal Revenue
16 Service as an enrolled agent. She is also a licensed real estate
17 agent with numerous years of real estate experience.
18 Mr. Cardenas is a Mexican immigrant. Although he lacks an
19 extensive formal education and his command and understanding of
20 the English language are limited, he is a fairly sophisticated
21 and experienced businessman. He has established an impressive
22 empire of Mexican-themed restaurants throughout Washington. He
23 owned as many as twenty restaurants, and he currently owns at
24 least fifteen. Throughout his career, Mr. Cardenas has
25
3
26 Because the parties provided limited excerpts from the
trial transcripts, we exercise our discretion to review the
27 bankruptcy court’s docket for the complete trial transcript
record. See Woods & Erickson, LLP v. Leonard (In re AVI, Inc.),
28 389 B.R. 721, 725 n.2 (9th Cir. BAP 2008).
4
1 personally managed and overseen his restaurant holdings and other
2 business operations in Washington and Oregon. He also has
3 experience renovating and selling real properties. Mr. Cardenas
4 always communicated with Ms. Shannon in English.
5 The Cardenases and the Shannons met sometime around 1998 and
6 formed a personal and business relationship. Through her tax and
7 accounting business, for a number of years Ms. Shannon provided
8 accounting, payroll, and tax services for all of the Cardenases’
9 restaurants. As a result of their work for the Cardenases, the
10 Shannons received an annual six-figure income.
11 In addition to accounting, payroll, and tax services,
12 Ms. Shannon also represented Mr. Cardenas in real estate matters.
13 They had partnered successfully and profitably on the
14 rehabilitation of a former bank property where Ms. Shannon
15 oversaw and managed the purchase, renovations, and sale of the
16 building. Although Mr. Cardenas worked with Ms. Shannon on real
17 estate transactions, on the first day of trial he testified that
18 he did not rely on her for advice in real estate matters.
19 B. The Washington Property
20 Without performing any due diligence or obtaining an
21 appraisal, Mr. Cardenas purchased the Washington Property in 2005
22 for $1,000,000.00 cash as the property was about to be sold to
23 another buyer. Ms. Shannon represented Mr. Cardenas in that
24 transaction. Mr. Cardenas used his personal funds to purchase
25 the Washington Property. However, the property was subsequently
26 titled in the name of Mazatlan Properties, LLC (“MPL”), a limited
27 liability company of which the Cardenases were the sole members
28 when the Washington Property was purchased.
5
1 The Washington Property sat vacant for approximately a year.
2 It was vandalized, gutted of its fixtures and copper wiring, and
3 a target for graffiti.
4 By the summer of 2006, Mr. Cardenas decided he no longer
5 wanted the Washington Property. He retained Ms. Shannon as the
6 listing agent in 2006 and she unsuccessfully attempted to sell
7 the property through 2008. She then approached Mr. Cardenas with
8 a proposal to renovate and sell the Washington Property.
9 C. The Agreement
10 The Washington state court action and the adversary
11 proceeding arise out of the failed business venture between
12 Mr. Cardenas and Ms. Shannon for the purchase, renovation, and
13 sale of the Washington Property. It is in that context that the
14 Cardenases accused Ms. Shannon of making false representations
15 and engaging in other deceitful conduct in an effort to obtain
16 the Washington Property from Mr. Cardenas without payment.
17 Ms. Shannon denied those accusations.
18 An initial oral understanding between Mr. Cardenas and
19 Ms. Shannon provided for the renovation and sale of the
20 Washington Property, required Ms. Shannon to furnish funds for
21 renovations to the property, and required Ms. Shannon to pay
22 $1,000,000.00 to Mr. Cardenas upon renovation and sale of the
23 property. That much is undisputed.
24 The parties’ understanding was subsequently memorialized in
25 two writings, both of which are entitled “Amendment of Operating
26 Agreement of Mazatlan Properties, LLC” (the “First Amendment” and
27 “Second Amendment”). Following discussions, the First Amendment
28 would have made Ms. Shannon and one of her associates equal
6
1 members in MPL with the Cardenases, stated that Ms. Shannon and
2 her associate would provide funds necessary for renovations to
3 the Washington Property, and would have made Ms. Shannon a co-
4 manager in MPL with Mr. Cardenas. The First Amendment, admitted
5 at trial as Exhibit 17, is neither dated nor signed. The Second
6 Amendment, admitted at trial as Exhibit 18, is signed and dated
7 August 23, 2008. It transferred the Cardenases’ interest in MPL
8 and the Washington Property to Ms. Shannon, made Ms. Shannon the
9 sole member and manager of MPL, and gave her the power and
10 authority to sell or lease the Washington Property.
11 The Cardenases asserted that they never agreed to the terms
12 in the Second Amendment. They accused Ms. Shannon of using a
13 signature page from the First Amendment for the Second Amendment
14 without their knowledge or authorization. They also accused
15 Ms. Shannon of not renovating and selling the Washington Property
16 within a promised three- to five-month time period, using funds
17 other than her own funds (which they claimed she fraudulently
18 obtained through loans) to fund renovations, and not providing
19 Mr. Cardenas with a lien on the Washington Property to secure his
20 interest as she purportedly promised to do. They further accused
21 Ms. Shannon of selling a portion of the Washington Property and
22 not paying Mr. Cardenas the sale proceeds.
23 Ms. Shannon denied the Cardenases’ accusations. She denied
24 forging or appending an unauthorized signature page to the Second
25 Amendment. This is consistent with Mr. Cardenas’ trial testimony
26 that he signed the Second Amendment, signed his wife’s signature,
27 and discussed the terms of the Second Amendment with Pat Horan
28 (“Mr. Horan”), vice-president of Timberland Bank (“Timberland”),
7
1 the bank from which Ms. Shannon obtained a loan which she used
2 for renovations. Ms. Shannon attested that she had a prospective
3 buyer when she entered into the business venture with
4 Mr. Cardenas. She also attested that she agreed to furnish funds
5 to renovate the Washington Property and pay the Cardenases
6 $1,000,000.00 upon the sale of that property. However,
7 Ms. Shannon denied that she represented any time limitation on
8 completion of the renovations or sale of the property, that she
9 committed to use only her own funds, or that she promised to give
10 Mr. Cardenas a lien on the property. Additionally, the purported
11 $72,000.00 “sale” was actually a payment to MPL in 2010 by the
12 City of Federal Way for its taking of a portion of the Washington
13 Property through condemnation in an eminent domain proceeding.
14 D. Trial
15 In March of 2014, the bankruptcy court conducted a three-day
16 trial on the issue of non-dischargeability under § 523(a)(2)(A).4
17 On September 30, 2014, the bankruptcy court entered findings of
18 fact and conclusions of law in support of its order denying the
19 Cardenases’ request for an order declaring the debt created by
20 the Washington state court default judgment non-dischargeable in
21 the Shannons’ bankruptcy case. On February 25, 2015, the
22 bankruptcy court entered a judgment discharging all pre-petition
23 indebtedness the Shannons owed to the Cardenases.
24 In support of its judgment for the Shannons and against the
25
4
26 The Cardenases’ complaint pled two claims for relief:
(1) enforcement of the Washington state court fraud and negligent
27 misrepresentation default judgment; and (2) “fraud under the
Bankruptcy Code” based on the Shannons’ alleged negligent and
28 intentional misrepresentations.
8
1 Cardenases, the bankruptcy court made the following specific
2 findings:
3 (1) That the Shannons did not make any representation
to the Cardenases that they knew to be false and they
4 did not make any representations with the intent and
purpose of deceiving the Cardenases; and
5
(2) That any damages suffered by the Cardenases are not
6 a result from reasonably relying on representations by
the Shannons.
7
8 Minute Entry/Order entered October 1, 2014; Judgment entered
9 February 25, 2015.
10 The bankruptcy court’s ruling was based primarily upon its
11 evaluation of live witness testimony of Mr. Cardenas,
12 Ms. Shannon, and Mr. Horan who dealt with both the Cardenases and
13 Ms. Shannon. The bankruptcy court found Ms. Shannon’s testimony
14 credible and consistent with the objective documentary evidence.
15 It found that Ms. Shannon had a letter of intent for
16 $1,700,000.00 from a prospective buyer at the inception of the
17 parties’ agreement, she did not represent there was a temporal
18 limit associated with renovations and a sale, she did not commit
19 to use only her funds for renovations, and she did not promise to
20 give Mr. Cardenas a lien on the Washington Property.
21 On the other hand, the bankruptcy court found Mr. Cardenas’
22 testimony inconsistent with his position in the litigation and
23 other admitted evidence. Some of the more important
24 contradictions noted were: the Cardenases’ claim that Ms. Shannon
25 was a trusted advisor upon whom Mr. Cardenas relied for real
26 estate advice was contradicted by Mr. Cardenas’ testimony on the
27 first day of trial that he did not rely on her; the Cardenases’
28 claim that Ms. Shannon represented she had a committed buyer who
9
1 would purchase the Washington Property in three to five months
2 was contradicted by Mr. Cardenas’ testimony that Ms. Shannon
3 committed to help him find a buyer within three to five months;
4 Mr. Cardenas’ claim that funds for renovation would come solely
5 from Ms. Shannon and that he was unaware of and did not authorize
6 loans was contradicted by Mr. Cardenas’ admission that he was
7 aware of the loan that Ms. Shannon obtained from Timberland and
8 that the Washington Property was security for that loan; despite
9 his claim that signature pages from the First Amendment were
10 appended to the Second Amendment, Mr. Cardenas admitted he signed
11 the Second Amendment and signed it for his wife after having it
12 in his possession; and Mr. Cardenas’ admission at trial that
13 Ms. Shannon did in fact own the Washington Property despite his
14 claim she fraudulently held herself out as an owner to obtain
15 loans.
16 In post-trial proceedings, the bankruptcy court entered an
17 order, followed by a judgment, awarding the Shannons costs in the
18 amount of $5,002.10 and attorney’s fees in the amount of
19 $72,691.00 with interest accruing at the rate set forth in 28
20 U.S.C. § 1961. It based that award on the parties’ joint pre-
21 trial statement which referenced Washington law.
22 III. JURISDICTION
23 The bankruptcy court had jurisdiction under 28 U.S.C.
24 §§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C.
25 § 158.
26 IV. ISSUES
27 1. Was the bankruptcy court clearly erroneous in its
28 findings that Ms. Shannon did not make representations that were
10
1 false and did not intend to deceive the Cardenases?
2 2. Did the bankruptcy court err in awarding the Shannons
3 costs and attorney’s fees as the prevailing party?
4 V. STANDARD OF REVIEW
5 Whether a claim is excepted from discharge presents mixed
6 issues of law and fact, which we review de novo. Diamond v.
7 Kolcum (In re Diamond), 285 F.3d 822, 826 (9th Cir. 2002). When
8 reviewing a bankruptcy court’s determination of an exception to
9 discharge claim, we review its findings of fact for clear error
10 and its conclusions of law de novo. Oney v. Weinberg (In re
11 Weinberg), 410 B.R. 19, 28 (9th Cir. BAP 2009). As relevant in
12 this appeal, whether there has been proof of an essential element
13 of § 523(a)(2)(A) is a factual determination reviewed for clear
14 error. Am. Express Travel Related Servs. Co. v. Vinhnee (In re
15 Vinhnee), 336 B.R. 437, 443 (9th Cir. BAP 2005).
16 “Clearly erroneous review is significantly deferential,
17 requiring that the appellate court accept the [trial] court’s
18 findings absent a definite and firm conviction that a mistake has
19 been committed.” United States v. Syrax, 235 F.3d 422, 427 (9th
20 Cir. 2000) (citation and internal quotation marks omitted). The
21 bankruptcy court’s choice among multiple plausible views of the
22 evidence cannot be clearly erroneous. Anderson v. City of
23 Bessemer City, 470 U.S. 564, 573-75 (1985); United States v.
24 Elliott, 322 F.3d 710, 715 (9th Cir. 2003); Ng v. Farmer (In re
25 Ng), 477 B.R. 118, 132 (9th Cir. BAP 2012). The deference owed
26 to the bankruptcy court is heightened where its choice is based
27 on the credibility of live witnesses. Anderson, 470 U.S. at 575.
28 In fact, we give great deference to the bankruptcy court’s
11
1 findings when they are based on its determinations as to
2 credibility of witnesses. Retz v. Samson (In re Retz), 606 F.3d
3 1189, 1196 (9th Cir. 2010) (citing Anderson, 470 U.S. at 575).
4 We may affirm the bankruptcy court on any basis supported by
5 the record. See ASARCO, LLC v. Union Pac. R.R. Co., 765 F.3d
6 999, 1004 (9th Cir. 2014).
7 VI. DISCUSSION
8 A. The Bankruptcy Court Did Not Err in Finding That the
Cardenases Failed to Satisfy Their Burden of Proof on
9 an Element of Their § 523(a)(2)(A) Claim.
10 In a non-dischargeability action under § 523(a), the
11 creditor has the burden of proving all the elements of its claim
12 by a preponderance of the evidence. Grogan v. Garner, 498 U.S.
13 279, 291 (1991). Exceptions to discharge are strictly construed
14 against an objecting creditor and in favor of the debtor to
15 effectuate the fresh start policies under the Bankruptcy Code.
16 Snoke v. Riso (In re Riso), 978 F.2d 1151, 1154 (9th Cir. 1992).
17 Section 523(a)(2)(A) states as follows:
18 (a) A discharge under section 727 . . . of this title
does not discharge an individual debtor from any debt -
19
. . .
20
(2) for money, property, services, or an extension,
21 renewal, or refinancing of credit, to the extent
obtained by - (A) false pretenses, a false
22 representation, or actual fraud, other than a statement
respecting the debtor’s or an insider’s financial
23 condition[.]
24 11 U.S.C. § 523(a)(2)(A).
25 A creditor seeking to except a debt from discharge under
26 § 523(a)(2)(A) based on false representations bears the burden of
27 proving by a preponderance of the evidence five elements:
28 (1) misrepresentation(s), fraudulent omission(s), or deceptive
12
1 conduct; (2) knowledge of the falsity or deceptiveness of such
2 representation(s), omission(s), or conduct; (3) an intent to
3 deceive; (4) justifiable reliance by the creditor; and (5) damage
4 to the creditor proximately caused by its reliance. Ghomeshi v.
5 Sabban (In re Sabban), 600 F.3d 1219, 1222 (9th Cir. 2010);
6 In re Weinberg, 410 B.R. at 35. The bankruptcy court found that
7 the Cardenases failed to carry their burden of proving false
8 representations and deceitful conduct by Ms. Shannon. Its
9 decision is not clearly erroneous.
10 The bankruptcy court identified the representations that the
11 Cardenases accused Ms. Shannon of making to obtain ownership of
12 MPL and the Washington Property without payment as follows:5
13 (1) that Ms. Shannon had a valid purchase commitment
that would permit payment to the Cardenases of
14 $1,000,000.00 within a period of three to five
months (the “Buyer and Temporal Representation”);
15
(2) that Ms. Shannon would use only her own funds to
16 renovate the Washington Property (the “Use of
Funds Representation”);
17
(3) that the agreement between the parties created an
18 immediate debt (but not a property sale) owed to
the Cardenases that was to be secured by a deed of
19 trust (the “Lien Representation”); and
20 (4) a representation by the Shannons through which
they improperly obtained loans that were secured
21 by the Washington Property and use of the loan
proceeds for other than MPL purposes (the “Other
22 Deceitful Conduct”).
23 As to each of these matters, the bankruptcy court found
24 either that the representations were not made, or if made were
25
26
27
5
These are consistent with the representations identified in
28 the Cardenases’ amended opening brief.
13
1 not false, and Ms. Shannon’s conduct was not deceitful.6
2 Supported by the record and based on its assessment of the
3 credibility of the witnesses providing testimony, the bankruptcy
4 court’s findings are not clearly erroneous. That holds true even
5 if, as the Cardenases complain on appeal, the bankruptcy judge
6 selected the Shannons’ version of events over the Cardenases’
7 version of events.
8 1. The Buyer and Temporal Representation
9 The Cardenases accused Ms. Shannon of stating that she had a
10 committed buyer who would purchase the property within three to
11 five months of the initial oral agreement. However, Mr. Cardenas
12 contradicted that accusation at trial when he testified as
13 follows:
14 Q And can you please describe for the Court what she
proposed. In other words, what was she willing to --
15 what was her offer to you?
16 A She told me she wanted to help me out as always and
that she told me that with three or four months, no
17 more than five months down the road she would find me a
buyer who would be willing to pay me $1 million for
18 that property.
19 Trial Tr. (March 25, 2014) at 45:23-46:4 (emphasis added).
20 In other words, according to Mr. Cardenas, the
21
6
Although not raised by the parties, we note that the
22
bankruptcy court also recited a “reasonable” reliance standard.
23 Section 523(a)(2)(A) only requires justifiable reliance. Field
v. Mans, 516 U.S. 59, 74-75 (1995); In re Sabban, 600 F.3d at
24 1222; In re Weinberg, 410 B.R. at 35. Nevertheless, because the
bankruptcy court’s factual findings that Ms. Shannon made no
25 false representations and her conduct was not deceitful are not
26 clearly erroneous, we need not reach the reliance standard used
by the bankruptcy court. In the absence of false pretenses,
27 misrepresentations, or deceitful conduct, the Cardenases’
§ 523(a)(2)(A) claim fails regardless of which reliance standard
28 the bankruptcy court used.
14
1 representation was actually that Ms. Shannon would help find him
2 a buyer for - not that she would actually sell - the Washington
3 Property. And she did just that, it being undisputed that she
4 had a letter of intent from an interested investor for
5 $1,700,000.00 at the inception of the agreement.
6 As to the three- to five-month time frame, Mr. Cardenas
7 wavered in his testimony. In fact, Mr. Cardenas himself was
8 unsure of the time frame within which Ms. Shannon supposedly told
9 him the Washington Property would be sold. He testified on
10 direct examination that Ms. Shannon “proposed selling [the
11 property] as soon as possible and within two or three months,
12 three or four months.” Trial Tr. (March 25, 2014) at 49:22-23.
13 On cross-examination he testified that Ms. Shannon “said from
14 three to five” months. Trial Tr. (March 25, 2014) at 65:11. In
15 short, Mr. Cardenas was unclear and uncertain, and could not
16 definitively articulate what Ms. Shannon supposedly said as to
17 any time frame for a sale.
18 Mr. Cardenas’ claim that Ms. Shannon represented she would
19 renovate and sell the Washington Property within three to five
20 months is further undercut, again, by his own testimony regarding
21 another much easier and better resourced renovation project that
22 took over a year to complete. Trial Tr. (March 25, 2014) at 62-
23 63. That suggests an understanding by Mr. Cardenas that
24 renovation of the Washington Property within three to five months
25 was not likely, and two months was even less likely.
26 Mr. Cardenas’ understanding is consistent with Ms. Shannon’s
27 testimony that she “never” told him the Washington Property would
28 be renovated and sold within three to five months, (Trial Tr.
15
1 (March 25, 2014) at 136:8-10; Trial Tr. (March 26, 2014) at
2 168:17-23), because a three- to five-month time frame was not
3 possible due to permitting issues for renovations. Trial Tr.
4 (March 26, 2014) at 169:6-8. Ms. Shannon’s testimony is also
5 consistent with Mr. Horan’s testimony that there was no reference
6 in Timberland’s loan file of any mention by Ms. Shannon of a
7 three- to five-month renovation and sale time frame. Trial Tr.
8 (March 26, 2014) at 50:9-11, 55:6-8.
9 In short, when faced with Mr. Cardenas’ contradictory and
10 wavering testimony, both as to renovation and sale of the
11 Washington Property and the timeline for both, we find no error
12 in the version of events that the bankruptcy court accepted. Its
13 findings, supported by the evidence, will not be disturbed. The
14 bankruptcy court’s findings related to the Buyer and Temporal
15 Representation are not clearly erroneous.
16 2. The Use of Funds Representation
17 To support this representation, the Cardenases pointed to
18 language in the First and Second Amendment that states
19 Ms. Shannon was to “furnish funds” for the renovations. The
20 bankruptcy court also established this as the representation the
21 Cardenases accused Ms. Shannon of making based on the parties’
22 joint pre-trial statement.
23 Ms. Shannon testified that she did not tell Mr. Cardenas she
24 would use only her funds but did tell him that all necessary
25 funds would be used for renovations to the Washington Property.
26 Trial Tr. (March 25, 2014) at 136:24-137:7. And while
27 Ms. Shannon used a significant amount of her own money for
28 renovations, she also used funds from loans obtained from
16
1 Timberland and private lenders.
2 After the Second Amendment made Ms. Shannon the sole member
3 and 100% owner of MPL, she obtained a $250,000.00 loan from
4 Timberland and a $300,000.00 loan from private lenders.7
5 Mr. Horan testified that he and Mr. Cardenas were aware that
6 Mr. Cardenas no longer owned 100% of MPL and that 100% of the
7 interest in MPL had been transferred to Ms. Shannon because the
8 two discussed the matter. Trial Tr. (March 26, 2014) at 70-71.
9 Mr. Cardenas also testified that he was aware of the Timberland
10 loan and that the Washington Property was security for that loan
11 because he and Mr. Horan also discussed both matters:
12 BY MR. DRAKE:
13 Q Mr. Cardenas, were you aware that Pat Horan and
Timberland Bank were loaning money to Mai Shannon to
14 renovate the building?
15 A Yes.
16 Q And were you aware that Timberland Bank was going to
get a lien in the property for that loan?
17
A The property was security for that.
18
Q Was security to Timberland Bank?
19
A Let me tell you honestly, Pat asked me if she was
20 applying for a loan and I told him it’s your money, do
you have any security. And he said, yes, the security
21 is your land, your property.
22 Trial Tr. (March 25, 2014) at 96:6-18. In fact, Mr. Horan
23 testified that Timberland would not have proceeded with the loan
24 to Ms. Shannon if Mr. Cardenas was unaware that the Washington
25
26 7
Although loan funds were deposited into accounts other than
27 those maintained by MPL, the bankruptcy court concluded loan
funds were not misused. It found no credible evidence that loan
28 funds were used for anything other than renovations.
17
1 Property was security for the loan. Trial Tr. (March 26, 2014)
2 at 85:4-11.
3 Based on the testimony described above, the bankruptcy court
4 could easily conclude that Ms. Shannon did not make the Use of
5 Funds Representation. In other words, Mr. Cardenas’ knowledge
6 and understanding that Ms. Shannon was using loan funds to
7 renovate the Washington Property is inconsistent with his claim
8 that Ms. Shannon represented that only her funds would be used
9 for renovations. Therefore, the bankruptcy court’s finding that
10 the Use of Funds Representation did not support the Cardenases’
11 § 523(a)(2)(A) claim is not clearly erroneous.
12 3. The Lien Representation
13 While it is true that Ms. Shannon did not place a lien on
14 the Washington Property in favor of Mr. Cardenas, it is equally
15 true that she never represented to Mr. Cardenas that she would.
16 Trial Tr. (March 25, 2014) at 138:3-6; Trial Tr. (March 26, 2014)
17 at 211:2-6.
18 Mr. Cardenas, on the other hand, could not definitively
19 state if Ms. Shannon ever told him that she would ensure he had a
20 deed of trust on the Washington Property. At first he testified
21 she did. Trial Tr. (March 25, 2014) at 47:1-8. Then he reversed
22 course and testified that she did not:
23 BY MR. ROMERO:
24 Q Mr. Cardenas, when you entered into your agreement
with Ms. Shannon, did she ever tell you that you would
25 be protected or secured if her buyer didn’t come
through in buying the property?
26
A Well, I was told she had a buyer, and that
27 everything was safe, that everything that was going
along fine, and --
28
18
1 Q Did she ever tell you that she would give you a deed
of trust or lien or something to protect your interest
2 in the property?
3 A No, my protection was the promise she told me.
4 Trial Tr. (March 25, 2014) at 54:7-17.8
5 Again, we will not disturb the choice by the bankruptcy
6 court of the version of events it accepted, particularly, when
7 the version accepted is supported by evidence in the record and
8 heavily dependent on the credibility of witnesses. On this
9 record, there is ample support for the bankruptcy court’s finding
10 that Ms. Shannon did not promise to provide Mr. Cardenas with a
11 lien on the Washington Property. Therefore, the bankruptcy
12 court’s finding in regard to the Lien Representation is not
13 clearly erroneous.
14 4. The Additional Deceitful Conduct
15 After this case was briefed and before it was argued, the
16 United States Supreme Court decided Husky Int’l Electronics, Inc.
17 v. Ritz, 136 S. Ct. 1581 (2016). In Husky, the Supreme Court
18 held that the term “actual fraud” in § 523(a)(2)(A) includes
19 fraudulent schemes even when those schemes do not involve a false
20 representation.
21 The parties did not raise Husky during oral argument.
22 However, the Cardenases’ amended opening brief includes
23 references to conduct raised at trial which the Cardenases claim
24 was fraudulent. This includes changing the terms of the parties’
25
26 8
There also is no reference to any such requirement in the
27 First or Second Amendment, and there is no reference to any such
lien in Timberland’s credit write-ups until early 2010. Earlier
28 write-ups did not include any such reference.
19
1 agreement, using the signature page from the First Amendment for
2 the Second Amendment without telling Mr. Cardenas, obtaining
3 loans secured by the Washington Property, and not paying
4 Mr. Cardenas the $72,000.00 MPL received when the City of Federal
5 Way condemned and took a portion of the Washington Property
6 through eminent domain. Since the conduct occurred after the
7 parties agreed to renovate and sell the Washington Property,
8 arguably, it could not have induced Mr. Cardenas to enter into
9 the business venture with Ms. Shannon in the first instance. The
10 Cardenases complain that the bankruptcy court ignored evidence of
11 this conduct. Perhaps a better characterization, and a more
12 accurate one, is that the bankruptcy judge assessed credibility,
13 found that the Cardenases lacked it, and concluded either these
14 events did not occur or, if they did, they were not fraudulent
15 because Mr. Cardenas knew of and consented to them. In any
16 event, the above-described conduct does not implicate Husky.
17 The terms of the agreement were not changed without
18 Mr. Cardenases’ knowledge or consent. The First Amendment was
19 prepared by Ms. Shannon’s lawyer after discussions with
20 Mr. Cardenas. Trial Tr. (March 25, 2014) at 132, 138. That
21 document was given to Mr. Cardenas by one of Ms. Shannon’s
22 employees. Trial Tr. (March 25, 2014) at 51-51, 77. It was also
23 reviewed by one of Mr. Cardenas’ daughters who assists with
24 business matters. Trial Tr. (March 25, 2014) at 77.
25 With regard to the Second Amendment, Mr. Cardenas claimed
26 the document was forged or fabricated, and he did not know about
27 it. Mr. Cardenas accused Ms. Shannon of tricking him into
28 signing the First Amendment and then taking the signature page
20
1 from the First Amendment and attaching it to the Second Amendment
2 without his knowledge. Not only does that make no sense because
3 the First Amendment admitted at trial was not signed, (Trial Tr.
4 (March 25, 2014) at 131:19-132:1, 138:7-9, and Appellants’
5 Excerpts of Record BAP dkt 21 Tab 13 p. 191-192), but
6 Mr. Cardenas admitted during trial that he signed the Second
7 Amendment - admitted as Exhibit 18 - and he signed it for his
8 wife:
9 BY MR. DRAKE:
10 Q Let me start with this. Mr. Cardenas, please look
at the screen right now. I’ll try and mark -- is that
11 your signature there beside the marking?
12 A That is my signature.
13 Q And what about the signature for your wife; do you
recognize that signature?
14
A No, that’s not my wife’s signature.
15
Q And how do you know that?
16
A Real well. I’ve lived with her 38 years.
17
Q And you did not sign your wife’s signature there?
18
A I signed.
19
Q Oh, so you’re saying it’s not your wife’s signature
20 because you signed it, not her?
21 A Because Mai told me it would be valid, that
ultimately everything would be taken care of soon
22 enough.
23 Q But is it you that signed for your wife on this
document then?
24
A Yes, I’m telling yes.
25
Q Okay. And then your signature, you signed that one
26 as well?
27 A I signed it. How could I? I cannot deny that.
28
21
1 Trial Tr. (March 25, 2014) at 87:8-88:4.9
2 As discussed above in the context of the Use of Funds
3 Representation, Mr. Cardenas also testified that he was aware of
4 the Timberland loan. More precisely, he testified that he was
5 aware that Ms. Shannon obtained a loan from Timberland to fund
6 renovations because he discussed both the loan and the use of the
7 Washington Property as security for the loan with Mr. Horan.
8 Moreover, at the time Ms. Shannon obtained the Timberland loan
9 she owned 100% of MPL which owned the Washington Property. In
10 that regard, Ms. Shannon’s conduct was not deceitful.
11 That is also true with respect to the $72,000.00 that MPL
12 received from the City of Federal Way during the time the city
13 condemned and took a portion of the Washington Property through
14 eminent domain. That occurred in 2010 and, thus, when
15 Ms. Shannon owned 100% of the interest in MPL. Moreover, those
16 proceeds were received upon condemnation through eminent domain -
17 not a sale - which means the transaction would not have triggered
18 any obligation that Ms. Shannon may have had to pay those funds
19 to Mr. Cardenas upon a sale of the Washington Property.
20 5. Conclusion
21 We find no error with the bankruptcy court’s conclusion that
22 the above-described representations and conduct are not false or
23 deceitful and, thus, are insufficient to support the first
24 element of the Cardenases’ § 523(a)(2)(A) claim. Because its
25 factual determinations are supported by the record, we cannot say
26
9
27 The Cardenases never explained how the signature page of
Exhibit 17, without signatures, could be swapped for a signature
28 page on Exhibit 18 with signatures.
22
1 that the bankruptcy court’s decision is clearly erroneous.
2 Therefore, as to the order and judgment that the debt created by
3 the Washington state court default judgment is dischargeable, we
4 AFFIRM.
5 B. The Bankruptcy Court Erred When it Awarded Attorney’s
Fees to the Shannons.
6
7 Unless prohibited by a federal statute or the Bankruptcy
8 Rules, a prevailing party in an adversary proceeding is typically
9 awarded its costs other than attorney’s fees. See Fed. R. Bankr.
10 P. 7054(b)(1). Here, the bankruptcy court awarded the Shannons
11 $5,002.10 in costs apart from its award of $72,691.00 in
12 attorney’s fees. The Cardenases’ amended opening brief does not
13 articulate a separate argument that the bankruptcy court erred in
14 its award of costs to the Shannons. An issue not raised by a
15 party in its opening brief is generally deemed waived. Rivera v.
16 Orange County Probation Dept. (In re Rivera), 511 B.R. 643, 649
17 (9th Cir. BAP 2014). Therefore, as to the award of costs other
18 than attorney’s fees to the Shannons in the amount of $5,002.10,
19 we AFFIRM.
20 We turn now to attorney’s fees. Mr. Cardenas asked the
21 bankruptcy court to determine that his Washington state court
22 default judgment against the Shannons be deemed excepted from
23 discharge for fraud and false representations. Essentially,
24 Mr. Cardenas alleged that Ms. Shannon induced him to sign and
25 execute the First Amendment to the Limited Liability Company
26 Operating Agreement of Mazatlan Property, LLC (January 1, 2016)
27 (“Operating Agreement”) by making false representations about the
28 substance of that agreement and then by committing actual fraud
23
1 when she allegedly removed the parties’ signature page from the
2 First Amendment and attached it to the Second Amendment, which
3 effectively transferred his interest in the Washington Property
4 to her. In her answer and at trial, Ms. Shannon both denied
5 Mr. Cardenas’ allegations and showed that her conduct was
6 consistent with the Operating Agreement as amended. In other
7 words, her defense was not simply a denial of fraud allegations
8 but an assertion of her right to act as she did based upon the
9 parties’ written agreement. After hearing the evidence, the
10 bankruptcy court did not accept Mr. Cardenas’ testimony and
11 instead found Ms. Shannon’s testimony more credible.
12 The executed Second Amendment provides “except as amended by
13 this agreement, the other provisions of the operating agreement
14 shall remain in full force and effect and hereby ratified and
15 confirmed.” In the Operating Agreement, there is an attorney’s
16 fees provision that provides:
17 Section 12.3 Attorney’s Fees. If any litigation
or other dispute resolution proceeding is commenced
18 between parties to this Agreement to enforce or
determine the rights or responsibilities of such
19 parties, the prevailing party or parties in any such
proceeding will be entitled to receive, in addition
20 [to] such other reliefs as may be granted, its or their
reasonable attorney’s fees, expenses and costs incurred
21 preparing for [sic] participating in such proceedings.
22 Operating Agreement at Section 12.3. Significantly, the scope of
23 this bilateral attorney’s fees provision is quite broad and
24 likely its sweep reached issues raised by Ms. Shannon’s defense.
25 Before trial the parties filed a proposed joint pre-trial
26 order but it was not signed by the court. However, the parties
27 and the court thereafter treated it as a joint pre-trial
28 statement. Under the heading Agreed Issues of Law, the joint
24
1 pre-trial statement stated:
2 The court may award attorney fees to the prevailing
party on any claim arising out of contract. RCW
3 4.84.330.
4 Relying upon the joint pretrial statement, the bankruptcy court
5 awarded attorney’s fees and costs to Ms. Shannon for the reason
6 that “the parties stipulated that the court may make an award of
7 attorney fees and costs to the prevailing party.” This is the
8 only explanation that the court provides for its award of
9 attorney’s fees. The court’s decision referenced, but does not
10 explain, the applicability of the attorney’s fees provision in
11 the Operating Agreement.
12 RCW 4.84.330 is a fee shifting statute that regulates
13 unilateral attorney’s fees provisions, making them bilateral.
14 Because the agreement at issue here contained a bilateral fee
15 provision, RCW 4.84.330 did not apply. “By its terms,
16 RCW 4.84.330 applies only to contracts with unilateral attorney
17 fee provisions.” Kaintz v. PLG, Inc., 147 Wash. App. 782, 786,
18 197 P.3d 710 (2008). Moreover, a stipulation by the parties to
19 the law does not bind a trial court or an appellate court.
20 Modeer v. United States, 183 F. A’ppx 975, 977 (Fed. Cir. 2006);
21 Avila v. INS, 731 F.2d 616, 620-21 (9th Cir. 1984); Worden v.
22 Smith, 178 Wash. App. 309, 327, 314 P.3d 1125 (2013). The
23 bankruptcy court’s reliance on the joint pre-trial statement as
24 opposed to the Operating Agreement’s attorney’s fees provision
25 for its award of attorney’s fees was error.
26 “[U]nder Cohen [v. de la Cruz, 523 U.S. 213 (1998)], the
27 determinative question for awarding attorney’s fees is whether
28 the creditor would be able to recover the fee outside of
25
1 bankruptcy under state or federal law.” Fry v. Dinan (In re
2 Dinan), 448 B.R. 775, 785 (9th Cir. BAP 2011) (citations
3 omitted). Notably, Cohen is not limited to attorney’s fees
4 awarded under state or federal statutes; it also applies to cases
5 in which fees are provided for by contract. Redwood Theaters,
6 Inc. v. Davison (In re Davison), 289 B.R. 716, 722 (9th Cir. BAP
7 2003). Under the rationale of Renfrow v. Draper, 232 F.3d 688,
8 694 (9th Cir. 2000), and Heritage Ford v. Baroff (In re Baroff),
9 105 F.3d 439, 441 (9th Cir. 1997), a prevailing debtor also can
10 recover attorney’s fees, provided the parties have a written
11 agreement which would award fees to the debtor if the same issues
12 were tried in a state court.
13 The rule in Washington is that, absent a contract, statute
14 or recognized ground of equity, attorney’s fees will not be
15 awarded as part of the cost of litigation.10 Pennsylvania Life
16 Ins. Co. v. Emp’t Sec. Dep’t, 97 Wash. 2d 412, 413, 645 P.2d 693
17 (1982). Under Washington law, attorney’s fees in contract cases
18 may be awarded if the contract contains a provision specifically
19 providing for attorney’s fees upon breach or other stipulated
20 circumstances. For purposes of a contractual attorney’s fees
21 provision, an action is on a contract if the action arose out of
22 the contract and if the contract is central to the dispute.
23 Hemenway v. Miller, 116 Wash. 2d 725, 742, 807 P.2d 863 (1991).
24
25 10
The parties stipulated to the applicability of Washington
26 state law, which is appropriate given that the business venture
between the Cardenases and Shannons arose in Washington, the
27 property in question is located in Washington, and the judgment
giving rise to the Shannons’ debt to the Cardenases was issued by
28 a Washington state court.
26
1 The meaning of “on the contract” is explained in Boguch v.
2 Landover Corp., 153 Wash. App. 595, 615, 224 P.3d 795 (2009), and
3 Brown v. Johnson, 109 Wash. App. 56, 58-59, 34 P.3d 1233 (2001).
4 In Boguch, the court held that “[i]f a party alleges breach of a
5 duty imposed by an external source, such as a statute or the
6 common law, the party does not bring an action on the contract,
7 even if the duty would not exist in the absence of a contractual
8 relationship.” Boguch, 153 Wash. App. at 615. Boguch sued his
9 realtors for breach of contract and negligence, contending that
10 their mistakes caused his property to lose value. His case was
11 dismissed on summary judgment and his realtors were awarded
12 attorney’s fees based upon a provision in the listing agreement.
13 Id. at 606-07. On appeal, the court reversed the attorney’s fees
14 award and remanded, stating that Boguch’s negligence claims were
15 not “on the contract” because they concerned breaches of duties
16 imposed by statute and common law. Id. at 619. The case was
17 remanded to the trial court with instructions to recalculate the
18 attorney’s fees award, limiting it to fees arising from the
19 contract claim. Id. In Brown, the purchaser of the house sued
20 the vendor for misrepresenting the house’s condition. The court
21 awarded attorney’s fees to the purchaser for her
22 misrepresentation claim against the seller because the purchase
23 and sale agreement provided for attorney’s fees to the prevailing
24 party “concerning this agreement,” and the tort arose from the
25 parties’ agreement. Brown, 109 Wash. App. at 58-59.
26 These Washington cases are consistent with Ninth Circuit
27 case law. In Baroff, Baroff’s creditors, like Mr. Cardenas,
28 disputed the dischargeability of their debt to him, alleging that
27
1 they were induced to enter into a settlement agreement by fraud
2 and false representations. Like Ms. Shannon, Baroff based his
3 defense upon the parties’ written settlement agreement. He
4 prevailed because the bankruptcy court ruled that the statute of
5 frauds barred the oral statements purporting to amend or
6 supplement the written agreement. Baroff, 105 F.3d at 442.
7 Although he prevailed, Baroff’s request for attorney’s fees was
8 denied. Id. at 441. The Ninth Circuit reversed, reasoning that
9 because the bankruptcy court was required to determine whether
10 the statute of frauds applied to the creditors’ fraudulent
11 inducement claim before ruling on the question of
12 dischargeability, “the document containing the attorney fees
13 clause in this case played an integral role in the proceedings.”
14 Id. at 442.
15 Baroff was clarified by the Ninth Circuit’s subsequent
16 decision in Renfrow. In that case, the court stated that the
17 rule in Baroff does not permit the bankruptcy court to award a
18 party’s attorney’s fees for litigating federal law issues in
19 bankruptcy court whenever a state law is “integral” to
20 determining dischargeability. Renfrow, 232 F.3d at 694.
21 Instead, the court held that attorney’s fees should be awarded
22 solely to the extent they were incurred in litigating state law
23 issues. Id. Likewise the rule in Washington is that if
24 attorney’s fees are recoverable for only some of the parties’
25 claims, the award “must properly reflect a segregation of the
26 time spent on issues for which fees are authorized from time
27 spent on other issues.” Hume v. Am. Disposal Co., 124 Wash. 2d
28 656, 673, 880 P.2d 988 (1994).
28
1 Here, the parties’ agreement contained an attorney’s fees
2 provision awarding fees to the prevailing party in any litigation
3 between them to enforce or determine their respective rights and
4 responsibilities. In part, Ms. Shannon responded to
5 Mr. Cardenas’ fraud allegations by maintaining that the Second
6 Amendment to the Operating Agreement was validly executed and by
7 showing that her conduct was consistent with the amended
8 agreement. To the extent that she litigated those state law
9 issues before the bankruptcy court and prevailed, she was
10 entitled to an award of reasonable attorney’s fees.
11 In conclusion, the bankruptcy court’s award of attorney’s
12 fees is VACATED because it is based on an erroneous application
13 of the law. Upon REMAND, the bankruptcy court should base its
14 award of attorney’s fees upon the fees provision of the parties’
15 Operating Agreement, and the court should limit its award to the
16 fees incurred in litigating state law issues under that
17 provision.
18 VII. CONCLUSION
19 Based on the foregoing, we AFFIRM the bankruptcy court’s
20 ruling that the Cardenases failed to meet their burden of proof
21 in establishing non-dischargeability under § 523(a)(2)(A) and its
22 judgment that the debt created by the Washington state court
23 default judgment is discharged in the Shannons’ bankruptcy case,
24 we AFFIRM the bankruptcy court’s order and judgment awarding the
25 Shannons $5,002.10 in costs, and we VACATE and REMAND the
26 bankruptcy court’s order and judgment awarding the Shannons
27 $72,691.00 in attorney’s fees.
28
29
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Foster Township :
: No. 1172 C.D. 2018
v. :
: Submitted: September 27, 2019
Farida B. Rahman, :
Appellant :
OPINION NOT REPORTED
MEMORANDUM OPINION
PER CURIAM FILED: November 18, 2019
Farida B. Rahman (Rahman), proceeding pro se, purports to appeal from
the July 24, 2018 order of the Court of Common Pleas of Luzerne County (trial court)
at Civil Docket Number 2012-9256, denying her motion to open and/or strike an
order dated March 15, 2018. In that order, the trial court granted the petition of
Rahman’s attorney, Thomas J. Jones, Jr., Esq. (Counsel), to withdraw as counsel.
Also, at a March 15, 2018 hearing, the trial court made a ruling from the bench—later
reduced to an order that was filed on March 16, 2018—granting Rahman’s motion
that he recuse himself from the case. For the reasons that follow, we quash the
appeal.1
1
As this Court noted in a per curiam order dated December 3, 2018, Rahman filed a notice
of appeal seeking to challenge the trial court’s July 24, 2018 order at No. 2012-09256, but the trial
court’s March 15, 2018 order bears a docket number of 2012-09255. In its opinion issued in
accordance with Pennsylvania Rule of Appellate Procedure (Pa.R.A.P.) 1925(a), the trial court
noted “that there is no [o]rder docketed to this case number that was dated or filed on March 15,
2018” and further stated that, “although they are somewhat unclear [Rahman’s] submissions seem
to relate to matters, decided by another Judge of this Court, which are interlocutory in nature.”
(Footnote continued on next page…)
The underlying dispute in this continuing legal saga, see supra note 1,
concerns the Township’s filing of a civil complaint against Rahman for allegedly
delinquent sewer payments and her claims against the Township and Counsel for
allegedly billing and obtaining funds from her account unlawfully. The facts
pertinent to our resolution of the procedural issues presented in this matter are as
follows.
On March 7, 2018, the trial court sent correspondence to Rahman, the
Township, and Counsel scheduling a hearing for March 15, 2018, to address
Counsel’s request to withdraw. Prior to the hearing, Counsel unofficially filed and
served upon Rahman and the trial court an affidavit in support, explaining, among
(continued…)
(Trial court op. at 1.) Nonetheless, the trial court’s Pa.R.A.P. 1925(a) opinion listed 2012-09256, as
the docket number and case through which it denied Rahman’s motion to open and/or strike. And,
upon our independent examination of the civil docket sheets for Luzerne County, there does not
appear to be a number assigned as 2012-09255. In this context, we conclude that any confusion
with respect to the docket number is harmless in nature and has no bearing on our jurisdiction or
authority to review the appeal and assess whether it stems from an appealable order. Cf. K.H. v.
J.R., 826 A.2d 863, 871 (Pa. 2003); Commonwealth v. Brandt (Pa. Cmwlth., No. 866 C.D. 2016,
filed August 25, 2017) (unreported), slip op. at 8; see section 414(a) of our Internal Operating
Procedures, 210 Pa. Code §69.414(a).
Nevertheless, we note that Rahman has been involved in multiple suits against or involving
Foster Township (Township) and Counsel, including at Civil Docket Numbers 2019-05535, 2018-
00427, 2018-02486, 2018-04482, 2017-02486, 2017-04458, 2012-09255. See The Prothonotary
On-line Viewer for Luzerne County located at: https://www.luzernecounty.org/594/Prothonotary
(last visited November 6, 2019); see also Rahman v. Foster Township and Thomas J. Jones, Jr., 211
A.3d 914 (Pa. Cmwlth. 2019) (addressing Rahman’s appeal at 2018-04482 and reinstating her
appeal to the trial court from a magisterial district judge). Assuming, arguendo, that an order was
entered in one or more of these cases on March 15, 2018, as suggested by the trial court, Rahman’s
current notice of appeal, due to substantive divergences in the docket number and lack of any
positive indication that she intended to appeal from an order entered in one of these cases, is
insufficient to perfect an appeal from such an order. See Commonwealth v. Walker, 185 A.3d 969,
979 (Pa. 2018).
2
other things, that Rahman had commenced a civil action against him. In turn,
Rahman filed an affidavit in opposition, asserting, in part, that Counsel did not
formally file a written motion to withdraw. (Reproduced Record (R.R.) at 20a, 23a,
25a-36a.)
At the March 15, 2018 hearing, the trial court inquired as to whether
Counsel’s affidavit to withdraw was officially filed of record, although Counsel had
formally filed a motion to withdraw months earlier, and Counsel responded, “no.”
The trial court then verified that Rahman had received a copy of the previous motion
to withdraw and filed a formal reply in opposition to that motion, and also received a
copy of the then-recent affidavit to withdraw, and responded to the affidavit with an
affidavit in opposition. The trial court asked questions regarding Rahman’s civil suit
against Counsel, noting the inherent conflict and strife of representing a client while
being subjected to suit by that client. Next, the trial judge entertained a request filed
by Rahman that he recuse himself from the case. Following complaints made by
Rahman on the record that the trial court and Counsel were acting unfairly and in
collusion, the trial judge orally ruled that he was “going to grant [her] request [and]
recuse.” (R.R. at 38a-41a, 59a-69a.)
On March 15, 2018, the trial court signed an order, apparently prepared
by Counsel in January 2018 (the month of January was crossed out and replaced with
the month of March), that granted Counsel’s request to withdraw. On March 16,
2018, the trial court filed an order granting Rahman’s recusal motion. (R.R. at 43a,
110a.)
Subsequently, on May 29, 2018, Rahman filed a “Motion to Open and
Strike Off Order dated March 15, 2018.” On July 24, 2018, the trial court denied the
3
motion and Rahman thereafter filed an appeal to this Court on August 22, 2018.
(R.R. at 6a-12a; Trial court op. at 1.)
On November 17, 2018, and November 19, 2018, the Township and
Counsel filed motions to quash, respectively, and Rahman filed answers. On
December 4, 2018, this Court entered an order denying the motions to quash without
prejudice to refile upon receipt of the original record. After the original record was
filed in this Court, we entered an order on January 29, 2019. In this order, the judge
noted that “it appears that there is a question as to whether the July 24, 2018 order is
a final order pursuant to Pa.R.A.P. 341” and directed that “the parties shall address in
their principal briefs on the merits the appealability of [the] order.” Order, 1/29/19, at
1.
Before we could proceed to the merits of the issues that Rahman raises
on appeal, this Court, as a threshold matter, must first determine whether we have
jurisdiction over Rahman’s appeal.2 As oft been stated, “[t]he appealability of an
order directly implicates the jurisdiction of the court asked to review the order.”
Commonwealth v. Sabula, 46 A.3d 1287, 1290 (Pa. Super. 2012). As such, by
legislative and judicial mandate, this Court is required to determine whether the order
appealed from is appealable, and the appealability of a trial court’s order is a question
of law subject to our plenary review. In re First Baptist Church of Spring Mill, 22
A.3d 1091, 1094-95 (Pa. Cmwlth. 2011); Robinson v. City of Philadelphia, 706 A.2d
1295, 1297 (Pa. Cmwlth. 1998).
Generally, an appellate court’s jurisdiction only extends to review of a
final order. Pa.R.A.P. 341(a); In re First Baptist Church, 22 A.3d at 1095. A final
order is any order that: (1) disposes of all claims and all parties or (2) is certified as a
2
In her brief, Rahman makes no meaningful argument that her appeal is properly before us.
4
final order by the trial court or other reviewing body. See Pa.R.A.P. 341(b); Rae v.
Pennsylvania Funeral Directors Association, 977 A.2d 1121, 1125 (Pa. 2009).
Further, Pa.R.A.P. 311 provides that, in certain circumstances involving interlocutory
orders that are specified and enumerated in the rule, an appellate court has
jurisdiction to entertain an appeal from those orders as a matter of right. See
Pa.R.A.P. 311 (Interlocutory Appeals as of Right). Nonetheless, if an appellant
attempts to appeal from an order that is non-appealable and interlocutory under the
Rules of Appellate Procedure, this Court has no discretion in the matter and must
quash the appeal. See Hionis v. Concord Township, 973 A.2d 1030, 1034 (Pa.
Cmwlth. 2009).
Here, the trial court’s March 15, 2018 order did not dispose of any of the
claims asserted by either Rahman or the Township and, thus, it is not a final order.
The trial court did not certify the order as final and immediately appealable. Pursuant
to Pa.R.A.P. 311(a)(1), “[a]n appeal may be taken as of right . . . from . . . [a]n order
refusing to open, vacate, or strike off a judgment.” Id. However, although the trial
court’s July 24, 2018 order denied Rahman’s “Motion to Open and Strike Off Order
dated March 15, 2018,” Pa.R.A.P. 311(a)(1) “is inapplicable here because no
judgment was entered” below. Schneller v. Clerk of Courts of the First Judicial
District of Pennsylvania (Pa. Cmwlth., No. 352 C.D. 2016, filed October 18, 2016)
(unreported), slip op. at 9 (emphasis added). As an illustrative example, in Borough
of Ambler v. Regenbogen, 713 A.2d 145 (Pa. Cmwlth. 1998), the appellant attempted
to appeal from an order denying his motion to strike off a municipal claim filed by a
borough under section 3 of the statute occasionally referred to as the Municipal
Claims Act of 1923.3 In analyzing the process through which a municipal claim is
3
Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §7106(a).
5
reduced to a “judgment,” and having determined that the process for doing so had not
yet been completed in the case, we concluded:
Under the applicable rules, therefore, the [b]orough may not
execute its municipal claim until it obtains a judgment on
the writ of scire facias. At the time of the denial of the
motion to strike off the municipal claim, the trial court had
not yet heard the merits of the instant action in rem. Since a
judgment has not been entered in this matter, the trial
court’s order cannot be considered an order refusing to
strike off or open a judgment appealable under Pa.R.A.P.
311(a)(1).
Borough of Ambler, 713 A.2d at 148 (emphasis added).
The same reasoning applies here with as much force. In short, the
underlying March 15, 2018 order, whether it be construed to encompass the trial
court’s grant of Counsel’s request to withdraw or the trial court’s grant of Rahman’s
request for recusal, or both, simply does not have the effect of entering a judgment in
this matter. Therefore, as in Borough of Ambler, the trial court’s July 24, 2018 order
is not appealable pursuant to Pa.R.A.P. 311(a)(1).
Otherwise, to the extent that Rahman is seeking to appeal from, and
obtain review of, the March 15, 2018 order on the merits, she did not file her notice
of appeal until August 22, 2018, approximately five months after the entry of that
order. It is well-settled that a “notice of appeal . . . shall be filed within 30 days after
the entry of the order from which the appeal is taken.” Pa.R.A.P. 903(a). Where, as
here, an appellant files an untimely notice of appeal from an underlying merits order,
and there has been no showing or suggestion of fraud or a breakdown in the court’s
operations, this Court is obligated to quash the appeal. See City of Philadelphia v.
Frempong, 865 A.2d 314, 317 (Pa. Cmwlth. 2005). In this case, we are required to
quash the appeal, due to the untimeliness of the appeal, even if the trial court’s March
6
15, 2018 order granting Counsel’s withdrawal and/or Rahman’s recusal request
satisfied the criteria of the collateral order doctrine and was immediately appealable
as such. See Pa.R.A.P. 313; McGrogan v. First Commonwealth Bank, 74 A.3d 1063,
1078 (Pa. Super. 2013). This is because, like most (if not all other orders), “a
collateral order must be appealed within 30 days of its entry.” McGrogan, 74 A.3d at
1076 n.16. That is not the situation here.
Accordingly, we are constrained to quash the appeal.
7
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Foster Township :
: No. 1172 C.D. 2018
v. :
:
Farida B. Rahman, :
Appellant :
PER CURIAM
ORDER
AND NOW, this 18th day of November, 2019, the appeal of Farida B.
Rahman in the above-captioned matter is hereby QUASHED.
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847 So.2d 523 (2003)
Joseph MAGALETTI, Appellant,
v.
STATE of Florida, Appellee.
No. 2D01-3074.
District Court of Appeal of Florida, Second District.
April 4, 2003.
Rehearing Denied June 12, 2003.
*524 James Marion Moorman, Public Defender, and James T. Miller, Special Assistant Public Defender, Bartow, for Appellant.
Charles J. Crist, Jr., Attorney General, Tallahassee, and Dale E. Tarpley, Assistant Attorney General, Tampa, for Appellee.
STRINGER, Judge.
Joseph Magaletti challenges his judgment and sentence for the first-degree murder of Kathleen Leonard. He advances four arguments on appeal; we affirm, without discussion, as to three of these but write to address oneidentification evidence in the form of mitochondrial DNA (mtDNA) analysis, an issue of first impression in Florida appellate courts.[1]
On March 12, 1995, Kathleen Leonard's employer made a missing person report to the Sarasota County Sheriff's Office after several unexplained absences and being unable to contact Ms. Leonard by phone. Her badly decomposed body was discovered in her apartment on that same day. Upon entering the apartment, investigators found her fully clothed and lying facedown on her bed. Strips of torn towels had been used to strangle her and to bind her hands behind her back. The contents of her purse were dumped out on her living room floor. Credit cards were found inside her wallet but no cash. There were no signs of forced entry. The neck ligature and wrist binding were collected and swept for trace evidence; several hairs were recovered, all of which belonged to the victim, save one. Hair comparison and mtDNA analysis later identified Magaletti as the donor of this single hair, which appeared to have been broken at some point along the shaft rather than having been pulled from its root. Also, Magaletti's fingerprints were found on the inside of the victim's door beneath the door knob.
Prior to trial, Magaletti challenged the admissibility of identification testimony, arguing that the State should not be allowed to introduce evidence of the mtDNA analysis performed on the single hair found in the victim's binding. Specifically, he maintains that mtDNA analysis has been primarily used for genealogical studies and to identify war remains but has not been widely accepted for use in the area of forensics. Relying on the supreme court's decision in Brim v. State, 695 So.2d 268 (Fla.1997), Magaletti argues that the method of statistical calculation used in his case does not satisfy the Frye[2] test for new or novel scientific evidence. He further argues that the mtDNA results in this case are not reliable due to the limited number of profiles resident in the FBI's national mtDNA database. In response the State contends that it produced sufficient evidence to establish general acceptance under Frye. The State relies on cases from other jurisdictions to argue that disputes *525 concerning the methodological validity of scientific evidence generally go to weight and not the admissibility of evidence. See, e.g., State v. Pappas, 256 Conn. 854, 776 A.2d 1091, 1106 (2001).
For reasons which will be discussed, we find that the evidence admitted at the Frye hearing conclusively established that the method of mtDNA analysis, as well as the statistical calculations used to determine a rate of exclusion in this case, satisfy Frye. Admissibility of nucDNA[3]Analysis in Florida
In order to test the reliability and determine the admissibility of new or novel scientific evidence, Florida courts adhere to the Frye test. Brim, 695 So.2d at 271; Hayes v. State, 660 So.2d 257, 262 (Fla.1995). Under Frye, the admission of expert testimony concerning a new scientific principle involves a four-step inquiry which requires the trial court to determine whether:
(1) [the] expert testimony will assist the jury in understanding the evidence or in determining a fact in issue; (2) the expert's testimony is based on a scientific principle or discovery that is "sufficiently established to have gained acceptance in the particular field in which it belongs" under the Frye test; and (3) the particular expert witness is qualified to present opinion evidence on the subject in issue. If the answer to the first three questions is in the affirmative, the trial judge may proceed to step four and allow the expert to present an opinion to the jury.
Hayes, 660 So.2d at 262 (quoting Ramirez v. State, 651 So.2d 1164, 1166 (Fla.1995)). In the context of DNA cases, the supreme court has frequently observed that Frye determinations require two levels of analysis. The first involves principles of molecular biology and chemistry and results in a qualitative determination which "simply indicate[s] that two DNA samples look the same." Murray v. State, 692 So.2d 157, 162 (Fla.1997); Brim, 695 So.2d at 269. However, as to this initial inquiry, the supreme court has concluded that "to say that two patterns match, without providing any scientifically valid estimate ... of the frequency with which such matches might occur by chance, is meaningless." Brim, 695 So.2d at 270. Therefore, on the second level of analysis, "experts [are required to] provide quantitative, rather than qualitative, estimates of the frequency of an incriminating profile [occurring] in one or more races." Id. This quantitative estimate assists the trier of fact in understanding the probative value or significance of a match, and Florida law requires a separate Frye analysis. Id. We are guided by the supreme court's analysis in Brim in considering whether the statistical calculations used during the mtDNA analysis in the present case satisfy Frye.
The defendant in Brim challenged his 1993 conviction for several offenses, including two counts of sexual battery. Nuc DNA evidence was the focus of the State's case, and prior to trial Brim sought to exclude it. Brim alleged that the State's method of calculating frequency was not generally accepted within the relevant scientific community, and he produced evidence of the use of an alternative method. In Brim's 1995 appeal, this court found *526 that the DNA evidence was properly admitted because the Frye standard does not limit the "admissible deductions that can be made from reliable scientific evidence to a single `generally accepted' deduction or theory." Brim v. State, 654 So.2d 184, 186 (Fla. 2d DCA 1995). The supreme court later disapproved of this court's decision and held that the statistical presentation of the evidence requires a separate Frye analysis. Brim, 695 So.2d at 270.
The court noted that the record in Brim established that the scientific community was split as to the proper approach for reporting DNA test results. At that time, the leading authority on DNA analysis, the National Research Council, recommended the use of a "modified ceiling principle" to calculate population frequency. However, the record was not clear as to which statistical method was used in Brim's case or whether that method satisfied Frye. Therefore, the supreme court found it necessary to remand the case for an evidentiary hearing to clarify the exact method of statistical calculation used in that case. Id. at 275.
In contrast, evidence adduced at the Frye hearing below established that the scientific method of mtDNA analysis, as well as the method of statistical calculation used in the present case, are generally accepted by forensic scientists throughout the country.
MtDNA Analysis in this Case
While the admissibility of mtDNA analysis has been addressed in Florida trial courts as early as 1998,[4] our appellate courts have not yet weighed in on the issue in light of Frye. This court reviews a trial court's Frye determination de novo. Brim, 695 So.2d at 274. Under Frye, the trial court in this case had to determine that the basic underlying principles of scientific evidence have been sufficiently tested and accepted by the relevant scientific community. Contrary to the State's assertions, the court was required to treat the Frye inquiry as a question of admissibility, rather than evidentiary weight to be considered by the jury. Id. at 271. As the proponent of mtDNA analysis, the State had the burden of proving general acceptance by a preponderance of the evidence. Id.
At the Frye hearing in this case, the State produced the testimony of Meghan Clement, technical director for the Forensic Identity Department of Laboratory Corporation of America (Labcorp). The State also introduced an article which discusses the use of mtDNA profiling in forensic investigations: M.M. Holland & T.J. Parsons, Mitochondrial DNA Sequence AnalysisValidation and Use for Forensic Casework, 11 Forensic Science Review 22 (1999). Ms. Clement was familiar with Holland and Parsons' article and testified that it has been peer reviewed and is considered authoritative in the field of mtDNA profiling. These commentators note that "mtDNA analysis has become a validated,[5] robust, reliable, and well established *527 forensic DNA profiling system." Id. at 23.
MtDNA analysis has two primary advantages over nucDNA: mtDNA requires smaller samples than are necessary for nucDNA analysis, and small amounts of mtDNA sufficient for analysis may be recovered from highly degraded samples which are old or have been exposed to extreme conditions, e.g., heat or cold. Because nucDNA is not present in the human hair shaft, only in the follicle, mtDNA analysis is the method used in cases such as this where there is no root or follicle tissue attached to the subject hair. Id. Ms. Clement testified that mtDNA analysis is widely used in forensics and has been accepted as reliable by the Federal Bureau of Investigation (FBI), the Armed Forces Institute of Pathology, and medical examiners' labs in New York and Illinois. Internationally, mtDNA analysis is being used in Sweden, Germany, and the United Kingdom. Ms. Clement further testified that a uniform process of mtDNA analysis has been validated for use in Labcorp facilities. This testimony, which was corroborated by Holland and Parsons' article, established general use of mtDNA analysis in the area of forensic science.
After responding to the State's questions regarding the history and present use of mtDNA analysis, Ms. Clements gave a step-by-step description of the process. The preliminary steps of nucDNA and mtDNA analysis (extraction, replication, and sequencing) are essentially identical with the exception of the source of the genetic material. These methodologies have been scientifically validated and used by researchers in nucDNA analysis since the 1970s and 1980s. The Florida Supreme Court first declared evidence of nucDNA analysis admissible in the trial courts of this state in Hayes v. State, 660 So.2d 257 (Fla.1995).
Once the preliminary steps have been completed, a technician may then compare the unknown sample to the known sample to determine whether there is a match. If there is a match, the matching sequence is then compared to profiles in the FBI's mtDNA database to determine whether the sequence appears in the database, and a simple "counting method" is used to indicate the number of times the sequence appears in the database. There are presently 4142 profiles in the FBI's mtDNA database. For example, if the subject sequence appears in the database twice, the lab will report that two matches were observed out of 4142 profiles currently in the database. Because mtDNA is maternally inherited and because all matrilineal decedents will share the same mtDNA, traditional random match probability used in nucDNA analysis cannot be calculated. Instead, the counting method is used, and a ninety-five percent confidence interval is applied. If, as in this case, the matching sequence derived from the mtDNA analysis is not found in the FBI database, an exclusionary rate is calculated to say that "X" percent of the population may be excluded as potential donors of the unknown sample.
With regard to Magaletti's objections to the number of profiles in the FBI database (4142), Ms. Clement testified that this number, albeit limited, does not affect the validity of test results. Her testimony is consistent with Holland and Parsons' observations. See Holland & Parsons, Mitochondrial DNA Sequence Analysis, 11 Forensic Sci. Rev. at 32. Their article, which *528 was published in 1999, indicates that the database was even more limited at that time and contained only 1657 profiles. Id. at 29. In spite of this limited number of profiles in the database at that time, these commentators describe mtDNA analysis as a "robust" and "reliable" method of DNA profiling. Id. at 23. Moreover, they note that the counting method is the only method of analysis reported in the United States. Id. at 31. And, while they acknowledge that labs in the United States report the results of mtDNA analysis using the counting method exclusively, they suggest that when used by itself, this is "a poor method of estimating the frequency of rare[6] mtDNA types." Id. at 30. They also note, however, that the reliability of results is increased by going beyond the counting method to provide a more valid statement regarding frequency. Id. at 32. This may be done by applying a ninety-five percent confidence interval based on the number of times a sequence occurs in the database. Id. at 32.
Consistent with the authors' suggestions, Ms. Clement testified that the results in the present case were obtained by use of this statistical methodology. And, by applying a ninety-five percent confidence interval, the mtDNA analysis conducted in this case determined an exclusionary rate of 99.93 percent. In other words, the results indicate that 99.93 percent of people randomly selected would not match the unknown hair sample found in the victim's bindings. By providing an explanation of the analytical process which resulted in the genetic match between the hair found in the victim's bindings and Magaletti's hair, and then going further to explain the statistical significance of the match, the expert testimony provided in this case assisted the jury in determining a critical fact issueidentity. See Hayes, 660 So.2d at 262.
Unlike the method of statistical calculation challenged in Brim, the State established that the counting method is the only method of reporting used by analysts in the United States. As the supreme court noted in Brim, "general acceptance" under the Frye standard can be established if use of a technique is supported by a clear majority of the community. 695 So.2d at 272. Having established that the counting method is used exclusively in this country, the State amply satisfied its burden of proving general acceptance by a preponderance of the evidence. Furthermore, in view of Ms. Clement's testimony and Holland and Parsons' commentary on the method used to calculate an exclusionary rate, the State also established general acceptance of the statistical methodology used in this case.
For the foregoing reasons, we find that the trial court properly admitted evidence of mtDNA analysis in this case.[7]
Affirmed.
SALCINES and DAVIS, JJ., Concur.
NOTES
[1] Magaletti also contends (1) that the State failed to produce sufficient evidence to support his conviction, (2) that the trial court erred in admitting evidence of his cocaine use, and (3) that the trial court erred in admitting evidence of hair comparison.
[2] Frye v. United States, 293 F. 1013 (D.C.Cir. 1923).
[3] There are essentially two forms of DNA. DNA which resides in the nucleus of cells is termed nuclear DNA (nucDNA). The type of DNA examined in the present case came from organelles found outside of the cell nucleus called mitochondria. This DNA is called mitochondrial DNA (mtDNA). M.M. Holland & T.J. Parsons, Mitochondrial DNA Sequence AnalysisValidation and Use for Forensic Casework, 11 Forensic Science Review 22, 23 (1999).
[4] See State v. Crow, No. 96-1156 *4 (Fla. 18th Cir.Ct. May 14, 1998) (finding mtDNA analysis inadmissible because the "database from which the experts wish to refer is insufficient to provide reliable statistical conclusions," also finding that the counting method of quantitative analysis used for mtDNA test results "fails to provide a meaningful comparison to assist, rather than confuse, the jury").
[5] Validation studies are conducted during the development of a new procedure or technology in order to facilitate uniformity, monitor consistency, and to ensure that results are reproducible. The Technical Working Group on DNA Analysis Methods (TWGDAM), sponsored by the Federal Bureau of Investigation, has developed guidelines for the validation of DNA profiling systems, including mtDNA analysis. M.M. Holland & T.J. Parsons, Mitochondrial DNA Sequence AnalysisValidation and Use for Forensic Casework, 11 Forensic Science Review 22, 34 (1999).
[6] There was no testimony characterizing Magaletti's mtDNA sequence as rare.
[7] In determining the admissibility of mtDNA analysis in the present case, we join several jurisdictions which have accepted this method of identification as a reliable forensic tool to assist in identifying and excluding suspects during criminal investigations and trials. See, e.g., People v. Klinger, 185 Misc.2d 574, 713 N.Y.S.2d 823 (N.Y.Co.Ct.2000); State v. Smith, 100 Wash.App. 1064, 2000 WL 688180, review denied, 142 Wash.2d 1012, 16 P.3d 1267 (2000). MtDNA analysis has likewise been deemed admissible in jurisdictions which adhere to the federal standard pronounced in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), wherein the court held that Federal Rule of Evidence 702 supersedes Frye. See Fed.R.Evid. 702 (enumerating criteria for determining the admissibility of scientific evidence based on reliability rather than general acceptance within the scientific community); State v. Pappas, 256 Conn. 854, 776 A.2d 1091 (2001); State v. Hammons, 2002 WL 484645 (Del.Super.Ct. Mar.28, 2002); State v. Scott, 1999 WL 547460 (Tenn. Crim.App. July 28, 1999), reversed in part on other grounds, 33 S.W.3d 746 (Tenn.2000) (reversing for new trial based on trial court's failure to approve DNA expert assistance for the defense).
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283 S.W.2d 258 (1955)
Carr P. COLLINS et al., Appellants,
v.
John L. LEWIS et al., Appellees.
No. 12831.
Court of Civil Appeals of Texas, Galveston.
October 13, 1955.
Rehearing Denied November 3, 1955.
*259 Fulbright, Crooker, Freeman, Bates & Jaworski, Chas. W. Bell and Austin C. Wilson, Houston, for appellants.
Kelley & Ryan, R. H. Kelley, C. O. Ryan, Houston, Hollers, O'Quinn & Crenshaw and Hardy Hollers, Austin, for appellees.
HAMBLEN, Chief Justice.
This suit was instituted in the District Court of Harris County by the appellants, who, as the owners of a fifty per cent (50%) interest in a partnership known as the L-C Cafeteria, sought a receivership of the partnership business, a judicial dissolution of the partnership, and foreclosure of a mortgage upon appellees' interest in the partnership assets. Appellees denied appellants' right to the relief sought, and filed a cross-action for damages for breach of contract in the event dissolution should be decreed. Appellants' petition for receivership having been denied after a hearing before the court, trial of the issues of dissolution and foreclosure, and of appellees' cross-action, proceeded before the court and a jury. At the conclusion of such trial, the jury, in response to special issues submitted, returned a verdict upon which the trial court entered judgment denying all relief sought by appellants.
The facts are substantially as follows:
In the latter part of 1948 appellee John L. Lewis obtained a commitment conditioned upon adequate financial backing from the Brown-Bellows-Smith Corporation for a lease on the basement space under the then projected San Jacinto Building for the purpose of constructing and operating a large cafeteria therein. Lewis contacted appellant Carr P. Collins, a resident of Dallas, proposing that he (Lewis) would furnish the lease, the experience and management ability for the operation of a cafeteria, and Collins would furnish the money; that all revenue of the business, except for an agreed salary to Lewis, would be applied to the repayment of such money, and that thereafter all profits would be divided equally between Lewis and Collins. These negotiations failed to materialize because of the inability of Lewis to conclude satisfactory terms with the building owners. Thereafter, in 1949, negotiations along substantially the same terms were reopened, and culminated in the execution between the building owners, as lessors, and Lewis and Collins, as lessees, of a lease upon such basement space for a term of 30 years. Thereafter Lewis and Collins entered into a partnership agreement to endure throughout the term of the lease contract. This agreement is in part evidenced by a formal contract between the parties, but both litigants concede that the complete agreement is ascertainable only from the verbal understandings and exchanges of letters between the principals. It appears to be undisputed that originally a corporation had been contemplated, and that the change to a partnership was made to gain the advantages which such a relationship enjoys under the internal revenue laws. The substance of the agreement was that Collins was to furnish all of the funds necessary to build, equip, and open the cafeteria for business. Lewis was to plan and supervise such construction, and, after opening for business, to manage the operation of the cafeteria. As a part of his undertaking, he guaranteed that moneys advanced by Collins would be repaid at the rate of at least $30,000, plus interest, in the first year of operation, and $60,000 per year, plus interest, thereafter, upon default of which Lewis would surrender his interest to Collins. In addition Lewis guaranteed Collins against loss to the extent of $100,000. In the partnership agreement fifty per cent interest therein is reflected to be owned by Collins and certain members of his family, in stated proportions, and the other fifty per cent is reflected to be owned by Lewis and members of his family. However, in their conduct of the business of the partnership, it is conceded by all litigants that Lewis and Collins completely controlled the respective equal fifty per cent interests in the business to the same extent *260 as if the actual ownership were so vested. For the purpose of this opinion, they are treated as if that were in fact the case.
Immediately after the lease agreement had been executed Lewis began the preparation of detailed plans and specifications for the cafeteria. Initially Lewis had estimated, and had represented to Collins, that the cost of completing the cafeteria ready for operation would be approximately $300,000. Due to delays on the part of the building owners in completing the building, and delays in procuring the equipment deemed necessary to opening the cafeteria for business, the actual opening did not occur until September 18, 1952, some 2½ years after the lease had been executed. The innumerable problems which arose during that period are in part reflected in the exchange of correspondence between the partners. Such evidence reflects that as to the solution of most of such problems the partners were in entire agreement. It further reflects that such disagreements as did arise were satisfactorily resolved. It likewise appears that the actual costs incurred during that period greatly exceeded the amount previously estimated by Lewis to be necessary. The cause of such increase is disputed by the litigants. Appellants contend that it was brought about largely by the extravagance and mismanagement of appellee Lewis. Appellees contend that it resulted from inflation, increased labor and material costs, caused by the Korean War, and unanticipated but necessary expenses. Whatever may have been the reason, it clearly appears that Collins, while expressing concern over the increasing cost, and urging the employment of every possible economy, continued to advance funds and pay expenses, which, by the date of opening for business, had exceeded $600,000.
Collins' concern over the mounting costs of the cafeteria appears to have been considerably augmented by the fact that after opening for business the cafeteria showed expenses considerably in excess of receipts. Upon being informed, shortly after the cafeteria had opened for business, that there existed incurred but unpaid items of cost over and above those theretofore paid, Collins made demand upon Lewis that the cafeteria be placed immediately upon a profitable basis, failing which he (Collins) would advance no more funds for any purpose. There followed an exchange of recriminatory correspondence between the parties, Collins on the one hand charging Lewis with extravagant mismanagement, and Lewis on the other hand charging Collins with unauthorized interference with the management of the business. Futile attempts were made by Lewis to obtain financial backing to buy Collins' interest in the business. Numerous threats were made by Collins to cause Lewis to lose his interest in the business entirely. This suit was filed by Collins in January of 1953.
The involved factual background of this litigation was presented to the jury in a trial which extended over five weeks, and is reflected in a record consisting of a transcript of 370 pages, a statement of facts of 1,400 pages, and 163 original exhibits. At the conclusion of the evidence 23 special issues of fact were submitted to the jury. The controlling issues of fact, as to which a dispute existed, were resolved by the jury in their answers to Issues 1 to 5, inclusive, in which they found that Lewis was competent to manage the business of the L-C Cafeteria; that there is not a reasonable expectation of profit under the continued management of Lewis; that but for the conduct of Collins there would be a reasonable expectation of profit under the continued management of Lewis; that such conduct on the part of Collins was not that of a reasonably prudent person acting under the same or similar circumstances; and that such conduct on the part of Collins materially decreased the earnings of the cafeteria during the first year of its operation. In their briefs the litigants make widely divergent claims relative to the factual conclusions properly to be drawn from the evidence, as well as the legal effect thereof. This Court has been able to resolve such differences only by a most detailed examination of the entire record. From that examination we conclude not only that there is ample support for the findings of the jury which we consider *261 to be controlling, but further that upon the entire record, including such findings, the trial court entered the only proper judgment under the law, and that that judgment must be in all things affirmed.
Appellants present seven asserted points of error. Points one to four, inclusive, present appellants' contention that the trial court erred in refusing to dissolve the partnership. Points five to seven, inclusive, present their contention that the trial court erred in refusing to foreclose appellant Collins' lien upon the appellees' interest in the partnership.
As we understand appellants' position relative to their points one to four, they contend that there is no such thing as an indissoluble partnership; that it is not controlling or even important, in so far as the right to a dissolution is concerned, as to which of the partners is right or wrong in their disputes; and finally, that whenever it is made to appear that the partners are in hopeless disagreement concerning a partnership which has no reasonable expectation of profit, the legal right to dissolution exists. In support of these contentions appellants cite numerous authorities, all of which have been carefully examined. We do not undertake to individually distinguish the authorities cited for the reason that in no case cited by appellants does a situation analogous to that here present exist, namely, that the very facts upon which appellants predicate their right to a dissolution have been found by the jury to have been brought about by appellant Collins' own conduct, in violation of his own contractual obligations.
We agree with appellants' premise that there is no such thing as an indissoluble partnership only in the sense that there always exists the power, as opposed to the right, of dissolution. But legal right to dissolution rests in equity, as does the right to relief from the provisions of any legal contract. The jury finding that there is not a reasonable expectation of profit from the L-C Cafeteria under the continued management of Lewis, must be read in connection with their findings that Lewis is competent to manage the business of L-C Cafeteria, and that but for the conduct of Collins there would be a reasonable expectation of profit therefrom. In our view those are the controlling findings upon the issue of dissolution. It was Collins' obligation to furnish the money; Lewis' to furnish the management, guaranteeing a stated minimum repayment of the money. The jury has found that he was competent, and could reasonably have performed his obligation but for the conduct of Collins. We know of no rule which grants Collins, under such circumstances, the right to dissolution of the partnership. The rule is stated in Karrick v. Hannaman, 168 U.S. 328, 18 S.Ct. 135, 138, 42 L.Ed. 484, as follows: "A court of equity, doubtless, will not assist the partner breaking his contract to procure a dissolution of the partnership, because, upon familiar principles, a partner who has not fully and fairly performed the partnership agreement on his part has no standing in a court of equity to enforce any rights under the agreement." It seems to this Court that the proposition rests upon maxims of equity, too fundamental in our jurisprudence to require quotation.
The basic agreement between Lewis and Collins provided that Collins would furnish money in an amount sufficient to defray the cost of building, equipping and opening the L-C Cafeteria for operation. As a part of the agreement between Lewis and Collins, Lewis executed, and delivered to Collins, a mortgage upon Lewis' interest in the partnership "until the indebtedness incurred by the said Carr P. Collins * * * has been paid in full out of income derived from the said L-C Cafeteria, Houston, Texas."
The evidence shows that a substantial portion of the money used to build, equip and open the cafeteria was borrowed by Collins from the First National Bank in Dallas. The bank credit was admittedly extended upon Collins' financial responsibility. In the mechanics of arranging for such credit, however, Collins prepared and requested Lewis and his family to execute notes in the total sum of $175,000 payable *262 to the First National Bank in Dallas on demand. Lewis expressed concern at creating an obligation payable on terms which he felt unable to meet, whereupon Collins addressed a signed letter to Lewis, Containing language as follows: "* * * If you are apprehensive because of the fear that there might be a foreclosure of these notes or a failure to renew these notes for a sufficient period of time to liquidate them at a rate of not more than $2,500 per month the first year and $5,000 per month the second year, I can assure you that the notes will be renewed as often as is necessary to protect you on that point. I have never had in mind any arrangement other than that the notes would be carried for an indefinite time. * * * My arrangement with you in regard to this financing would be binding on my estate or until the obligation was fully discharged." Collins testified that after execution and delivery of the notes to him by Lewis, he endorsed them and guaranteed their payment to the bank.
At about the time this suit was instituted, the First National Bank in Dallas made demand upon Lewis for payment of the notes described, thus maturing the liability of Collins upon his endorsement of the notes. The failure of Lewis to pay such notes on demand constitutes the default, by reason of which Collins seeks foreclosure of his mortgage on Lewis' interest in the partnership. We are unable to agree with appellants in this contention, and must overrule their points presenting it. Regardless of the legal relationship between Lewis and the First National Bank in Dallas, created by the notes described, Lewis' obligation to Collins is limited to repaying money advanced by Collins at the minimum rate of $30,000 the first year and $60,000 per year thereafter. Only upon default of that obligation does the right of foreclosure ripen. There is testimony in the record to the effect that Collins, as a director and stockholder in the Dallas Bank had induced the bank to make demand for payment in order to effect foreclosure. That proof appears to us to be entirely immaterial to the determination of the rights of these litigants. The proof is undisputed that the bank, after maturing the notes, took no further steps to effect collection. Aside from that, however, as we construe the partnership agreement, it was Collins' obligation to furnish all money needed to build, equip and open the cafeteria for business. With particular reference to the notes, it was Collins' obligation to protect Lewis against any demand for payment so long as Lewis met his obligation of repaying money advanced by Collins at the rate agreed upon. Failure on Collins' part to protect Lewis on his obligation to the bank would constitute a breach of contract by Collins.
Collins' right to foreclose, therefore, depends upon whether or not Lewis has met his basic obligation of repayment at the rate agreed upon. Appellees contend, we think correctly, that he has, in the following manner: the evidence shows that Collins advanced a total of $636,720 for the purpose of building, equipping and opening the cafeteria for business. The proof also shows that Lewis contended that the actual cost exceeded that amount by over $30,000. The litigants differed in regard to such excess, it being Collins' contention that it represented operating expense rather than cost of building, equipping and opening the cafeteria. The jury heard the conflicting proof relative to these contentions, and resolved the question by their answer to Special Issue 20, whereby they found that the minimum cost of building, equipping and opening the cafeteria for operation amounted to $697,603.36. Under the basic agreement of the partners, therefore, this excess was properly Collins' obligation. Upon the refusal of Collins to pay it, Lewis paid it out of earnings of the business during the first year of its operation. Thus it clearly appears that Lewis met his obligation, and the trial court properly denied foreclosure of the mortgage.
In their brief, appellants repeatedly complain that they should not be forced to endure a continuing partnership wherein there is no reasonable expectation of profit, which they say is the effect of the trial *263 court's judgment. The proper and equitable solution of the differences which arise between partners is never an easy problem, especially where the relationship is as involved as this present one. We do not think it can properly be said, however, that the judgment of the trial court denying appellants the dissolution which they seek forces them to endure a partnership wherein there is no reasonable expectation of profit. We have already pointed out the ever present inherent power, as opposed to the legal right, of any partner to terminate the relationship. Pursuit of that course presents the problem of possible liability for such damages as flow from the breach of contract. The alternative course available to appellants seems clearly legible in the verdict of the jury, whose services in that connection were invoked by appellants.
Judgment affirmed.
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. AP-77,020
THE STATE OF TEXAS
V.
LARRY RAY SWEARINGEN, Appellee
ON DIRECT APPEAL
FROM THE 9th JUDICIAL DISTRICT COURT OF
MONTGOMERY COUNTY
Womack, J., delivered the opinion of the Court in which Keller, P.J., Meyers, Price,
Keasler, Hervey, Cochran, and Alcala, JJ. joined. Johnson, J., concurred.
The appellee, Larry Ray Swearingen, was convicted in 2000 of the capital murder of
Melissa Trotter and sentenced to death. We affirmed the judgment and sentence. (1) He then filed
seven applications for writs of habeas corpus, which were denied. Here, the State appeals the
decision of the trial court to grant the appellee's fourth Article 64 motion for DNA testing. (2) In
this appeal, as in a prior action, the appellee has not established that biological evidence exists or
that, where it does, exculpatory test results would have affected his trial. We shall reverse the
trial court's order.
Background Facts
The victim, Melissa Trotter, disappeared on December 8, 1998, after last being seen with
the appellee. On December 11, 1998, the appellee was arrested on unrelated charges. On January
2, 1999, hunters found Trotter's decomposing body in the Sam Houston National Forest. The
appellee was convicted of her murder primarily on circumstantial evidence. We have
summarized this evidence previously:
On the evening of December 7, 1998, two of the appellee's acquaintances,
the Fosters, witnessed a phone conversation in which [the appellee] arranged for a
lunch meeting with a girl at a library the following day, and the appellee then told
the Fosters that the girl was Melissa Trotter, a college student from Willis.
Three witnesses saw the appellee sitting with Melissa in the Montgomery
College library between 11:30 a.m. and 1:30 p.m. the following day, December 8,
1998.
Melissa's Biology teacher saw her leave the Montgomery College library
with a male shortly after 1:30 p.m. that day.
Melissa's car remained in the Montgomery College parking lot following
her disappearance on December 8, 1998.
At 2:05 p.m. on December 8, 1998, [the appellee] called Sarah Searle and
said that he was at lunch with a friend.
Sometime around 3:00 p.m. on December 8, 1998, [the appellee's]
landlord saw [the appellee's] truck leaving from behind his home.
At 3:03 p.m. on December 8, 1998, [the appellee] placed a cell phone call
that utilized a cell tower near FM 1097 in Willis, Texas, which would be
consistent with [the appellee] driving from his home to the Sam Houston National
Forest.
[The appellee's] wife testified that she found their home in disarray on the
evening of December 8, 1998, but none of the Swearingens' property was
missing.
[The appellee's] wife observed Melissa's cigarettes and lighter in [the
appellee's] house that evening, and those items were subsequently recovered from
[the appellee's] home during the investigation.
Hair and fiber evidence, as well as other physical evidence, showed that
Melissa had been in [the appellee's] car and his home on the day of her
disappearance.
[The appellee] filed a burglary report falsely claiming that he had been out
of town and his home was broken into on the day of Melissa's disappearance.
Between the time of Melissa's disappearance and [the appellee's] arrest,
[the appellee] told two acquaintances on two different occasions that he believed
police would be after him.
When the Fosters heard that Melissa Trotter was missing on December 9,
1998, they contacted [the appellee], who claimed he did not remember the last
name of the girl with whom he had met the day before.
When Mrs. Foster told [the appellee] that she recalled him saying the last
name was "Trotter," and that a girl named Melissa Trotter was now missing, the
phone went dead.
[The appellee] led a Sheriff's deputy on a high speed chase.
Following [the appellee's] arrest, law enforcement authorities observed
and photographed red marks on [the appellee's] neck, cheek, and back.
On December 17, 1998, two neighbors of [the appellee's] mother and
stepfather collected numerous pieces of torn paper from along their street, which
turned out to be Melissa Trotter's class schedule and some health insurance paper
work Melissa's father had given to her.
Melissa's body was discovered in an area of the Sam Houston National
Forest with which [the appellee] would have been familiar from previous time
spent there.
Melissa's body showed signs of significant decomposition when it was
discovered in the woods 25 days after her disappearance.
The ligature found around Melissa's neck matched the remainder of a pair
of pantyhose found within [the appellee's] home.
The Harris Country Chief Medical Examiner testified that during the
digestive process, a person's stomach will usually not empty in less than two
hours, and any food within the stomach at death will remain there.
The contents of Melissa's stomach at the autopsy, which included what
appeared to be chicken and a french fry-like form of potato, were consistent with
the tater tots she had eaten at Montgomery College shortly before leaving with
[the appellee] and the Chicken McNuggets she and [the appellee] had apparently
purchased at the nearby McDonald's on the day of her disappearance.
While in jail, [the appellee] attempted to create an exculpatory letter
written in Spanish in which he claimed to be someone else who had knowledge of
Melissa's murder.
Within that letter, [the appellee] detailed specifics of the offense that
accurately corroborated the physical and medical evidence in the case.
While in jail awaiting trial, [the appellee] told a cell mate that he had
committed the capital murder and his only objective was to escape the death
penalty. (3)
Law of The Case Doctrine
The appellee is seeking to have DNA testing performed on several pieces of evidence: the
pantyhose leg used to strangle the victim, the other leg of the pantyhose found at the appellee's
home, four cigarette butts recovered near the victim's remains, various pieces of the victim's
clothing, and scrapings from under the victim's fingernails.
In 2010, we reviewed another Article 64 motion from the appellee which requested
testing of the fingernail scrapings, the ligature, and the victim's clothes (the cigarette butts were
also considered in a separate, previous motion). We sustained the trial court's decision to deny
testing on that motion because the appellee could not establish that any of the pieces of evidence
were not tested through no fault of his own, that new technology would lead to more accurate or
probative results (in regards to the evidence that had already been tested), that the evidence
contained biological material, and that there was a 51% chance or higher that he would have been
acquitted had any exculpatory results been available at trial. (4)
The State argues (among other things) that our 2010 resolution of these issues is
dispositive of the appellee's current motion under the law of the case doctrine.
The "law of the case" doctrine provides that an appellate court's resolution of questions
of law in a previous appeal are binding in subsequent appeals concerning the same issue. (5) In
other words, when the facts and legal issues are virtually identical, they should be controlled by
an appellate court's previous resolution. (6) This is a court-made doctrine designed to promote
judicial consistency and efficiency.
The appellee, however, argues that since Article 64 was amended in 2011, the law has
changed and he is entitled to another review of the merits.
Although the law has been amended, these amendments did not affect all of our previous
determinations. In the instances where the amendment did not impact our analysis, the trial court
erred by failing to adhere to our previous determinations.
Chapter 64 Motions Generally
Chapter 64 of the Code of Criminal Procedure allows a convicted person to "submit to
the convicting court a motion for forensic DNA testing of evidence containing biological
material." (7) This motion may request testing of evidence that was secured in relation to the
offense comprising the underlying conviction and was in the possession of the State during the
trial but either was not previously tested or, although previously tested, can be tested with newer
techniques which can provide more accurate and probative results. (8) A convicting court may order
testing if the evidence in question "(i) still exists and is in a condition making DNA testing
possible; and (ii) has been subjected to a chain of custody sufficient to establish it has not been
substituted, tampered with, replaced, or altered in any material respect; and identity was or is an
issue in the case." (9) Further, the convicted person has the burden of showing by a preponderance
of the evidence that "the person would not have been convicted if exculpatory results had been
obtained through DNA testing; and the request for the proposed DNA testing is not made to
unreasonably delay the execution of sentence
." (10)
Article 64 has changed in two major ways since the appellee's last round of DNA
requests. First, the legislature added a definition of "biological material." Now, biological
material means "an item in the possession of the state and that contains blood, semen, hair,
saliva, skin tissue or cells, fingernail scrapings, bone, bodily fluids, or other identifiable
biological evidence
." (11) Second, the legislature eliminated a requirement that the lack of
previous testing had not been the convicted person's fault. (12)
"Containing Biological Material"
As a threshold matter, we address the statute's requirement that the evidence requested to
be tested contain "biological material." In our previous decision, we held that the appellee had
not shown that most of the evidence he now wants tested contained biological material. The
appellee's motion relies on the first legislative change (defining biological material) to support
his assertion that the law of the case is not dispositive. He claims that the amendment corrected a
problem with the statute that we identified in our last opinion. We stated:
Article 64.01(a) reads in part, "A convicted person may submit to the convicting
court a motion for forensic DNA testing of evidence containing biological
material" (emphasis added). A literal reading of the statute unequivocally
mandates that all evidence to be tested must first be proven to contain biological
material. When interpreting a statute, this court is limited to its plain meaning
unless the language is ambiguous or its plain meaning leads to absurd results that
the Legislature could not possibly have intended. Because Chapter 64 does not
describe a method for determining the existence of biological material, a plain
reading of the statute, as [appellee] points out, could lead to the deprivation of
DNA testing in the rare case simply because of the inability to ascertain whether
or not biological material exists. As an appellate court, we must give effect to the
plain meaning of the statute. It is incumbent upon the Legislature, not this Court,
to provide statutory means, if appropriate, for determining whether the defendant
meets the burden of showing that evidence contains biological material. However,
this court has held that a mere assertion or a general claim that existence of
biological material is probable will fail to satisfy the [appellee's] burden. (13)
The recent amendments have not fixed this problem in most cases. No part of the amendments
addresses a method for determining the existence of biological material.
In this case, the only effect the amendments had was to relieve the appellee's burden as to
the fingernail scrapings. Because fingernail scrapings are now defined as biological material per-se, the appellee no longer needs to show that they contain biological material. However, the
appellee still cannot prove the existence of biological material in the case of the ligature, the
other half of the pantyhose, the cigarette butts, or the victim's clothing. The most recent
amendments do not affect our previous analysis in those cases, and the law-of-the-case doctrine
controls.
In support of his motion, the appellee offers the affidavit of Huma Nasir, a DNA analyst
at Cellmark Forensics. He claims that even if the law has not changed, Ms. Nasr's affidavit
changes the facts. Ms. Nasr's affidavit states that touch-DNA from the victim's murderer would
likely be contained on the pantyhose ligature, the victim's clothing, and the cigarette butts.
However, we have explicitly held that appellee must prove biological material exists and not that
it is merely probable. (14) This burden was neither changed by the legislature's amendments nor met
by Ms. Nasir's affidavit. Consequently, the appellee is not entitled to testing on the victim's
clothing, the cigarette butts, or the ligature.
Since we have previously held that, as a matter of law, the appellee had not met his
burden of proof as to the existence of biological material, and because the legislature's
amendment did not alter this result except in the case of the fingernail scrapings, the trial court
erred under the law of the case doctrine when it disregarded our previous holding. (15) The appellee
is not entitled to testing of the ligature, the victim's clothing, or the cigarette butts.
Fingernail Scrapings
Because of the law-of-the-case doctrine and the requirement that evidence "contain
biological material," the only evidence that the appellee can show to contain biological materials
are the fingernail scrapings from both of the victim's hands. (16)
As an initial matter, we must determine if the evidence the appellee is requesting (1) was
obtained in relation to the underlying offense, (2) was in the possession of the State during the
trial of the offense, and (3) either was not previously subjected to DNA testing or, although it
was previously tested, testing could produce more accurate and probative results through newer
technology. Neither party contests the first two prongs.
Before the original trial, both the scrapings from the left and right hands were examined
by the Texas Department of Public Safety. It appears that some of the scrapings were tested for
DNA while some were not. Given this mixed record, we shall assume without deciding that the
evidence qualifies under this subsection.
In order to be entitled to DNA testing, the appellee must show by a preponderance of the
evidence (51%) that he would not have been convicted if the exculpatory results were available
at trial. (17) We have clarified that this requires the convicted person to show that he, more likely
than not, would not have been convicted with exculpatory results. In the past, we have held
"exculpatory results" to mean only results "excluding [the convicted person] as the donor of this
material ...." (18)
We are not persuaded that results showing the presence of another DNA donor in the
fingernail scrapings would overcome the "mountain of evidence" (19) of the appellee's guilt.
Primarily, this is because the victim's having encountered another person would not factually
exclude the appellee from having killed her. There are many ways someone else's DNA could
have ended up in the victim's fingernails. Such results would not require an inference that the
appellee would been acquitted.
Further, before the appellee's trial, DPS analysts conducted a microscopic review of the
scrapings and discovered blood flakes in the fingernail scrapings. Criminologists were able to
create a full DNA profile from those blood flakes. Both the appellee and Trotter were excluded
as contributors of the blood. These results were available at trial and presented to the jury. Since
the jury already was aware that an unidentified male's DNA was found under the victim's
fingernails, we fail to see how other such results would have changed its verdict. The jury chose
to believe that the foreign DNA either was contamination or that it came from outside the context
of the crime. If the jury already knew of exculpatory results obtained from under the victim's
nails and disregarded them, we have no reason to believe that it would be any different with
regards to the remainder of the fingernail scrapings. As to the blood itself, the appellee cannot
show that new testing would lead to a different result.
The appellee argues that because the legislature's amendment requires DNA results to be
run through CODIS (Combined DNA Index System), we should now construe an "exculpatory
result" to mean DNA results that are not from the convicted person and which generate a CODIS
hit. The appellee's argument goes too far.
A requirement to assume that the results of testing were not only from someone other
than the convicted person but that the other person was a repeat offender (or as the appellee
argued before this court, a repeat offender with a similar modus operandi), makes it hard to
imagine a case in which we would not grant DNA testing. Such compelling DNA results would
certainly overcome any mountain of inculpatory evidence. We believe that had the legislature
meant to so drastically lower the barrier for Chapter 64 testing, they would have said so
explicitly. The statute requires only that the results be run through CODIS. It does not set a
standard for exculpatory results.
Conclusion
We reverse the order of the trial court and remand for proceedings in accordance with this
opinion.
Delivered February 5, 2014.
Publish.
1. Swearingen v. State, 101 S.W.3d 89 (2003).
2. The State argues that (1) the trial court erred in finding that the appellee would not have been convicted if
exculpatory results from this testing were available at his trial; (2) the trial court erred in ignoring our previous
decision on the same issues; (3) the trial court erred by finding that the appellee had shown that "biological
evidence" exists on the items he seeks to have tested; (4) the trial court erred in finding that the appellee's motion
was not made to unduly delay his execution; (5) the trial court erred in finding that the evidence had been subjected
to a sufficient chain of custody to show a lack of tampering; (6) the trial court erred in finding the evidence had been
subjected to a chain of custody sufficient to establish its integrity; (7) the trial court erred in requiring retesting of
fingernail scrapings.
3. Swearingen v. State, 303 S.W.3d 728, 737-38 (Tex. Cr. App. 2010).
4. See id.
5. Carroll v. State, 101 S.W.3d 454, 461 n.35 (Tex. Cr. App. 2003); Howlett v. State, 994 S.W.2d 663, 667
(Tex. Cr. App. 1999).
6. Ware v. State, 736 S.W.2d 700, 701 (Tex. Cr. App. 1987).
7. Tex. Code Crim. Proc. art. 64.01(a-1).
8. Id., art. 64.01(b).
9. Id., art. 64.03(a)(1).
10. Id., art. 64.03(a)(2).
11. See Act of May 23, 2011, 82nd Leg., R.S., § 1, 2011 Tex. Gen. Laws 366.
12. See ibid.
13. Swearingen, 303 S.W.3d at 732.
14. See id.;Routier v. State, 273 S.W.3d 241 (Tex. Cr. App. 2008).
15. Because the cigarette butts were not mentioned in our published opinion, we note that, even without the
law of the case doctrine, the trial court abused its discretion in finding the evidence contained biological material.
The only evidence that the cigarettes contained biological material was Ms. Nasr's affidavit stating that it was
"likely." Our precedent is clear that the presence of biological material must be proven. The appellee has not done
so.
16. The State also argues that the blood flecks can no longer be found, that chain of custody was not
sufficient for testing any of the evidence, and that the request is made to unreasonably delay the sentence. However,
since our finding is dispositive, we do not reach these other issues.
17. See Smith v. State, 165 S.W.3d 361, 364 (Tex. Cr. App. 2005).
18. Blacklock v. State, 235 S.W.3d 231, 232 (Tex. Cr. App. 2007).
19. Swearingen, 303 S.W.3d at 736.
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683 N.W.2d 147 (2004)
ALIBRI
v.
DETROIT WAYNE COUNTY STADIUM AUTHORITY.
No. 123091.
Supreme Court of Michigan.
July 20, 2004.
SC: 123091. COA: 228921.
On order of the Court, leave to appeal having been granted, 469 Mich. 951, ___ N.W.2d ___ (2003), and the briefs and oral arguments of the parties having been considered by the Court, we REVERSED the judgment of the Court of Appeals, and REINSTATE the Wayne Circuit Court's July 11, 2000, order granting partial summary disposition for plaintiff and dismissing the remaining claims, though on a somewhat different basis.
The defendant represented that all of the west side properties, including plaintiff's, were needed by the stadium project for parking. It was later determined that this was not correct. While there is no indication that the defendant knew of the inaccuracy of its representation, this justifies rescission on the ground of innocent misrepresentation. See generally United States Fidelity & Guaranty Co. v. Black, 412 Mich. 99, 113-121, 313 N.W.2d 77 (1981).
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904 So.2d 142 (2005)
Lainie Bell CRIDER
v.
John Paul CRIDER, Jr.
No. 2003-CT-01066-SCT.
Supreme Court of Mississippi.
March 31, 2005.
*143 John A. Ferrell, Booneville, attorney for appellant.
Jason D. Herring, attorney for appellee.
EN BANC.
ON WRIT OF CERTIORARI
COBB, Presiding Justice, for the Court.
¶ 1. This case addresses the authority of a chancellor to grant joint custody of a child to its parents in an irreconcilable differences (ID) divorce proceeding. Although it is a case of first impression for this Court, the Mississippi Court of Appeals has interpreted Miss.Code Ann. § 93-5-24(2)[1] to prohibit a chancellor from awarding joint custody in ID cases unless both parents have specifically requested joint custody. Thus, when one or both parties to an ID divorce request primary custody, but both parties consent in writing for the chancellor to make the custody determination, the Court of Appeals has held that a chancellor is prohibited from granting joint custody, even if the chancellor determines that joint custody is in the child's best interest. We reject the Court of Appeals' interpretation because it is not consistent with our statutory or case law, which both require a chancellor to make determinations that are in the best interest of the child in all circumstances.
FACTS
¶ 2. John and Lainie Crider are parents of a son who was born September 5, 2001. Approximately a year later, the Criders separated, and John filed for divorce on October 11, 2002, on grounds of adultery and in the alternative irreconcilable differences. Lainie filed a cross claim for divorce on grounds of habitual cruel and inhuman treatment and in the alternative irreconcilable differences. Each requested sole custody of their son, with visitation for the other party.
¶ 3. At the January 13, 2003, trial, John and Lainie filed a written consent to a divorce on the ground of irreconcilable differences and asked the chancellor to decide the remaining issues of primary custody, property settlement, and support, pursuant to Miss.Code Ann. § 93-5-2(3).[2] The chancellor conducted a two-day trial, in which she heard testimony from numerous witnesses, including both parents of each party, friends of the parties, and Lainie's two sisters. After a thoughtful and thorough analysis of the Albright[3] factors in relation to the facts of the case, the chancellor found that "both parties have their flaws. They are equally good and equally bad." She found it particularly significant that the parties, on their own initiative, had essentially split time in caring for the child since the separation. Additionally, both had very supportive families *144 that were willing to help care for their son. She then found that, although joint custody was not specifically requested, joint custody was in their son's best interest. "[B]oth parties love this child and enjoy a comparable bond with him, and... his best interest would not be served by severing the bond he holds with each parent at this delicate age." She awarded joint legal and physical custody until the summer prior to their son's beginning kindergarten. She also stated that the matter should be reset for a hearing in June, 2005, at which time a review of custody would be made.
¶ 4. Lainie appealed, asserting that § 93-5-24(2) prohibits the chancellor from awarding joint custody unless both parties specifically request that joint custody be awarded. A divided Court of Appeals agreed and reversed the chancellor, stating that it had interpreted § 93-5-24(2) on several occasions to mean that each party must consent to joint custody in an ID divorce proceeding.[4]Crider v. Crider, 905 So.2d 706, 2004 WL 1728594 (Miss.Ct.App.2004). However, the Court of Appeals pointed out that the rightness of the need for a joint request for joint custody remains unaddressed by this Court. Id. at *3, at 709. The two dissenting Court of Appeals judges argued that awarding joint custody is discretionary with the court. Id. at *3-*4, at 709-10 (Lee, J., dissenting).
¶ 5. John filed a petition for certiorari, arguing that this is a fundamental issue of broad public importance that this Court should determine. We agreed and granted certiorari. The issue, in essence, is whether a statute which is susceptible to multiple interpretations should be interpreted to prohibit a chancellor from awarding custody based on the best interest of a child in ID divorce cases. Because we hold that it should not, we reverse the Court of Appeals' judgment and affirm the chancellor's judgment.
ANALYSIS
¶ 6. Mississippi case law has clearly declared time and time again that the polestar consideration in all cases dealing with child custody and visitation is the best interest and welfare of the child. Brekeen v. Brekeen, 880 So.2d 280, 283 (Miss.2004); Woodell v. Parker, 860 So.2d 781, 788 (Miss.2003); Sellers v. Sellers, 638 So.2d 481, 485 (Miss.(1994); Moak v. Moak, 631 So.2d 196, 198 (Miss.1994); Albright v. Albright 437 So.2d 1003, 1005 (Miss.1983). The Legislature, in Miss.Code Ann. § 93-5-24(1) states: "Custody shall be awarded as follows according to the best interests of the child:. ..." (emphasis added). Additionally, in 1996 this Court departed from the then-existing case law in a custody modification case, because it was not in the best interest of the child, stating:
However, we take this opportunity to clarify that a chancellor is never obliged to ignore a child's best interest in weighing a custody change; in fact, a chancellor is bound to consider the child's best interest above all else. "Above all, in `modification cases, as in original awards of custody, we never depart from our polestar consideration: the best interest and welfare of the child.'"
Riley v. Doerner, 677 So.2d 740, 744 (Miss.1996) (citing Ash v. Ash, 622 So.2d 1264, 1266 (Miss.1993) (citing Marascalco v. Marascalco, 445 So.2d 1380, 1382 (Miss.1984))) (emphasis added).
¶ 7. In Morris v. Morris, 758 So.2d 1020 (Miss.Ct.App.1999), the Court of Appeals *145 first interpreted the statutory language of Miss.Code Ann. § 93-5-24(2), which reads: "[j]oint custody may be awarded where irreconcilable differences is the ground for divorce, in the discretion of the court, upon application of both parents." Miss.Code Ann. § 93-5-24(2) (emphasis added). This subsection is part of the general joint custody statute.[5] As we discuss below, because the statute does not define what is meant by "application of both parents," the wording of this statute is susceptible to varying interpretations, particularly in light of the history and language of § 93-5-2,[6] the ID divorce statute.
*146 ¶ 8. A brief historical summary of the adoption and modifications of the two statutes at issue in the present case is helpful.[7] Prior to the adoption of the ID divorce statute, a party seeking a divorce was required to prove that he or she deserved the divorce and that the other party was at fault. The court would then determine custody, property settlement and support issues. When the ID divorce statute was adopted in 1976, the parties to an ID divorce were required to agree in writing on all issues, including custody, property distribution and support, without court direction, prior to a divorce being granted. Although the ID divorce statute was seen by many as a major step forward in divorce law in Mississippi, the requirement that parties having "irreconcilable differences" must "agree" to the major questions of custody, property, and support, without the court's help, was seen as unworkable. After the adoption of the ID divorce statute, we explained its shortcomings:
Today's decision and our recent decision in Marble v. Marble, 457 So.2d 1342 (Miss.1984), make apparent, however, that further improvements in our law are needed. As enlightened and desirable as was the enactment of the Irreconcilable Differences Act in 1976, the job has not yet been completed. Indeed, these cases reveal what I regard as a congenital defect in our Irreconcilable Differences Act-it facilitates, even encourages, financial blackmail.
I speak here of the requirement in the law that, before a divorce may be granted on grounds of irreconcilable differences, the parties must have voluntarily negotiated and entered into an agreement respecting the custody and maintenance of children as well as all matters touching alimony and the settlement of their respective property rights.
Gallaspy v. Gallaspy, 459 So.2d 283, 286-87 (Miss.1984). See also Wilson v. Wilson, 547 So.2d 803, 805 (Miss.1989) ("However viable a theory of freedom of contract in other contexts, it is an oxymoron in divorce cases."). This Court in Gallaspy encouraged the Legislature to add a thirteenth ground, of irreconcilable differences, to the fault-based grounds for divorce under § 93-5-1, which would be treated the same as the other twelve, in that the court would determine custody, property settlement and support issues. Gallaspy, 459 So.2d at 288.
¶ 9. In 1983, the Legislature adopted § 93-5-24, the joint custody statute, which delineated the types of joint custody available and to whom joint custody could be awarded. The language of subsection (2) tracked the requirement that parties to an ID divorce were required to submit a written agreement pertaining to custody.
¶ 10. In 1990, the Legislature finally added subsection (3)[8] to § 93-5-2, which allowed the parties to submit custody and support issues to the court for resolution. To facilitate the court's involvement, the consent "must be in writing, signed by *147 both parties personally, must state that the parties voluntarily consent to permit the court to decide such issues, which shall be specifically set forth in such consent, and that the parties understand that the decision of the court shall be a binding and lawful judgment...." Miss.Code Ann. § 93-5-2(3).
¶ 11. In light of timing of the statutes and their modifications, it is reasonable to conclude that the "application of both parents" language was included in § 95-5-24(2) due to the prior existence of § 93-5-2, requiring a written agreement between parties. Because § 93-5-2 now allows more flexibility with the inclusion of subsection (3), it follows that this flexibility is also to be recognized by § 93-5-24(2). That is, the concept of joint application is defined by § 93-5-2, not § 93-5-24(2).
¶ 12. The Court of Appeals erred by interpreting § 93-5-24(2) without reference to § 93-5-2, because the court undertook no analysis of possible alternate interpretations. In Morris, the parents sought an irreconcilable differences divorce, but were unable to agree to child custody and support and therefore submitted this and other issues to the chancellor. The chancellor awarded joint custody. On appeal, the Court of Appeals reversed. The Court of Appeals' entire analysis of this issue was:
In the present case the chancellor failed to follow the specific directive of Miss.Code Ann. § 93-5-24(2). Under § 93-5-24(2) where a divorce is based upon the grounds of irreconcilable differences, both parents must agree to joint custody. Because we find that neither party agreed to nor requested joint custody, we are compelled to reverse this case and remand for further proceedings.
Morris, 758 So.2d at 1021. Without taking into consideration the ID divorce statute, or the legislative and case law directives requiring that custody decisions must be made in the best interest of the child, the court did not properly view the intended meaning of § 93-5-24(2). The Court of Appeals' interpretation requiring the parties to jointly request joint custody is contrary to the 1990 subsection (3) amendment to § 93-5-2. It is logical and reasonable that "application of both parties" exists when both parties consent to allowing the court to determine custody. The fact that the parties request that the court determine which parent is to receive "primary custody" does not alter this. The parties are allowing the court to determine what form of custody is in the best interest of the child. If joint custody is determined to be in the best interest of the child using court-specified factors, i.e., the Albright factors, the parties should not be able to prohibit this by the wording of the consent. It would be the same if the parties requested that the court determine which party will receive "all marital assets." The chancellor has the responsibility to determine how to best distribute the assets according to court-specified factors (the Ferguson factors) and must not be bound by the wording of the consent to award all marital assets to one party.
¶ 13. To be sure, unless the parents are capable of sharing joint custody cooperatively, it is incumbent upon a chancellor not to award joint custody. This is for the chancellor to determine as he or she is in the best position to evaluate the credibility, sincerity, capabilities and intentions of the parties. The chancellor in the present case determined that because the parents had been sharing joint legal and physical custody since their separation, on their own initiative, that there was a proven willingness from both parties to cooperate. And since she had determined that the child needed what both parents were giving *148 and willing to give, it would be in the child's best interest to continue this way.
¶ 14. There is also a problem interpreting § 93-5-24(2) due to the definition of "joint custody" in Miss.Code Ann. § 93-5-24(5).[9] A chancellor could award joint legal custody to both parents, but award primary physical custody to one parent, and liberal visitation to another parent, and this would not be "joint custody" as defined by the statute, and would not trigger § 93-5-24(2). If the same legal and physical arrangement were labeled "joint custody," § 93-5-24(2) would apply. This anomaly was dealt with in Dearman v. Dearman, 811 So.2d 308 (Miss.Ct.App.2001). In that case, the Court of Appeals affirmed the chancellor's grant of joint legal and joint physical custody to parents who both sought sole custody after an ID divorce.[10] As in the present case, the parents consented to the court making the decision concerning custody. The Court of Appeals stated that, based on Morris, joint custody could not be awarded, but then hinged its affirmance on the rationale that the court actually awarded primary custody to the father with liberal visitation to the mother, but mislabeled it as "joint custody." The Legislature may desire to correct this anomaly.
¶ 15. We hold that when parties consent in writing to the court's determination of custody, they are consenting and agreeing to that determination and this meets the statutory directive of "joint application" in § 93-5-24(2). This is the only interpretation that conforms to the primary directive of § 93-5-24(1) that "custody shall be awarded as follows according to the best interests of the child." It is the chancellor who must determine what is in the best interest of the child, and it is the chancellor who determines the level of commitment parents have to sharing joint custody.
CONCLUSION
¶ 16. This issue is one of first impression for this Court. It is clear that the courts and the Legislature look to the best interest of the child as the paramount concern in custody determinations. Additionally, because the phrase "joint application" has not been defined, it is open to interpretation. When parties to an ID divorce request the court to make a custody determination, it is this Court's interpretation that this is a joint application in keeping with section 93-5-24(2). It is the chancellor's responsibility to ensure that the parents are capable of cooperating in a joint custody arrangement.
¶ 17. For these reasons, we reverse the judgment of the Court of Appeals and affirm the trial court's judgment and finding that the chancellor may award joint *149 custody in an ID divorce, when the parties request the court to determine custody.
¶ 18. THE JUDGMENT OF THE COURT OF APPEALS IS REVERSED; THE JUDGMENT OF THE ALCORN COUNTY CHANCERY COURT IS AFFIRMED.
SMITH, C.J., WALLER, P.J., EASLEY, CARLSON, GRAVES, DICKINSON AND RANDOLPH, JJ., CONCUR. DIAZ, J., NOT PARTICIPATING.
NOTES
[1] Miss.Code Ann. § 93-5-24 is Mississippi's joint custody statute.
[2] See footnote 5 for the language of this statute.
[3] See Albright v. Albright, 437 So.2d 1003, 1005 (Miss.1983).
[4] See Dearman v. Dearman, 811 So.2d 308 (Miss.Ct.App.2001); Wolfe v. Wolfe, 766 So.2d 123 (Miss.Ct.App.2000); Morris v. Morris, 758 So.2d 1020 (Miss.Ct.App.1999).
[5] Subsections (1)-(4) read as follows:
(1) Custody shall be awarded as follows according to the best interests of the child:
(a) Physical and legal custody to both parents jointly pursuant to subsections (2) through (7).
(b) Physical custody to both parents jointly pursuant to subsections (2) through (7) and legal custody to either parent.
(c) Legal custody to both parents jointly pursuant to subsections (2) through (7) and physical custody to either parent.
(d) Physical and legal custody to either parent.
(e) Upon a finding by the court that both of the parents of the child have abandoned or deserted such child or that both such parents are mentally, morally or otherwise unfit to rear and train the child the court may award physical and legal custody to:
(I) The person in whose home the child has been living in a wholesome and stable environment; or
(ii) Physical and legal custody to any other person deemed by the court to be suitable and able to provide adequate and proper care and guidance for the child.
In making an order for custody to either parent or to both parents jointly, the court, in its discretion, may require the parents to submit to the court a plan for the implementation of the custody order.
(2) Joint custody may be awarded where irreconcilable differences is the ground for divorce, in the discretion of the court, upon application of both parents.
(3) In other cases, joint custody may be awarded, in the discretion of the court, upon application of one or both parents.
(4) There shall be a presumption that joint custody is in the best interest of a minor child where both parents have agreed to an award of joint custody.
Miss.Code Ann. § 93-5-24(1),(2),(3),(4).
[6] This statute states in pertinent part:
(1) Divorce from the bonds of matrimony may be granted on the ground of irreconcilable differences, but only upon the joint complaint of the husband and wife or a complaint where the defendant has been personally served with process or where the defendant has entered an appearance by written waiver of process.
(2) If the parties provide by written agreement for the custody and maintenance of any children of that marriage and for the settlement of any property rights between the parties and the court finds that such provisions are adequate and sufficient, the agreement may be incorporated in the judgment, and such judgment may be modified as other judgments for divorce.
(3) If the parties are unable to agree upon adequate and sufficient provisions for the custody and maintenance of any children of that marriage or any property rights between them, they may consent to a divorce on the ground of irreconcilable differences and permit the court to decide the issues upon which they cannot agree. Such consent must be in writing, signed by both parties personally, must state that the parties voluntarily consent to permit the court to decide such issues, which shall be specifically set forth in such consent, and that the parties understand that the decision of the court shall be a binding and lawful judgment. Such consent may not be withdrawn by a party without leave of the court after the court has commenced any proceeding, including the hearing of any motion or other matter pertaining thereto. The failure or refusal of either party to agree as to adequate and sufficient provisions for the custody and maintenance of any children of that marriage or any property rights between the parties, or any portion of such issues, or the failure or refusal of any party to consent to permit the court to decide such issues, shall not be used as evidence, or in any manner, against such party. No divorce shall be granted pursuant to this subsection until all matters involving custody and maintenance of any child of that marriage and property rights between the parties raised by the pleadings have been either adjudicated by the court or agreed upon by the parties and found to be adequate and sufficient by the court and included in the judgment of divorce. Appeals from any orders and judgments rendered pursuant to this subsection may be had as in other cases in chancery court only insofar as such orders and judgments relate to issues that the parties consented to have decided by the court.
Miss.Code Ann. § 93-5-2(1),(2),(3).
[7] See Dearman v. Dearman, 811 So.2d 308 (Miss.Ct.App.2001), for a more complete discussion of the history of these statutes.
[8] See footnote 6 for the full language of this subsection.
[9] This statute states in pertinent part:
(a) For the purposes of this section, "joint custody" means joint physical physical and legal custody....
(c) For the purposes of this section, "joint physical custody" means that each of the parents shall have significant periods of physical custody. Joint physical custody shall be shared by the parents in such a way so as to assure a child of frequent and continuing contact with both parents....
(e) For the purposes of this section, "joint legal custody" means that the parents or parties share the decision-making rights, the responsibilities and the authority relating to the health, education and welfare of a child. An award of joint legal custody obligates the parties to exchange information concerning the health, education and welfare of the minor child, and to confer with one another in the exercise of decision-making rights, responsibilities and authority.
Miss.Code Ann. § 93-5-24(5).
[10] In the initial divorce proceeding, the paternal grandparents were awarded custody.
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53 F.3d 346NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.
Donald SANTOS, Petitioner,v.UNITED STATES POSTAL SERVICE, Respondent.
No. 95-3026.
United States Court of Appeals, Federal Circuit.
April 13, 1995.
Before NEWMAN, MAYER, and PLAGER, Circuit Judge.
JUDGMENT
PER CURIAM.
1
AFFIRMED. See Fed.Cir.R. 36.
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593 F.Supp.2d 44 (2009)
STOCKBRIDGE-MUNSEE COMMUNITY, Plaintiff,
v.
UNITED STATES of America, et al., Defendants.
Civil Action No. 08-1031 (EGS).
United States District Court, District of Columbia.
January 5, 2009.
*45 Derril B. Jordan, Fredericks, Peebles & Morgan, LLP, Washington, DC, for Plaintiff.
Daniel G. Steele, Maureen Elizabeth Rudolph, U.S. Department of Justice, Washington, DC, for Defendants.
MEMORANDUM OPINION
EMMET G. SULLIVAN, District Judge.
Plaintiff, the Stockbridge-Munsee Community, Band of Mohican Indians ("the Stockbridge-Munsee" or "Plaintiff"), challenges the Department of Interior's ("Interior") May 23, 2008 decision to take certain lands located in New York into trust for the benefit of another tribe, the Oneida Indian Nation of New York. Plaintiff also names the Secretary of Interior and the Associate Deputy Secretary of Interior, in their official capacities, as Defendants (collectively, with Interior, "Defendants"). Plaintiff argues that some of the land Defendants seek to take into trust is within the historical boundaries of Stockbridge-Munsee tribal land. Plaintiff seeks both declaratory and injunctive relief to set aside Interior's decision under the Administrative Procedure Act ("APA"). Defendants seek to transfer the case to the Northern District of New York where six other challenges to the same administrative action are pending. Upon consideration of Defendants' Motion, Plaintiff's Opposition, Defendants' Reply, the applicable case law, the entire record herein, and for the reasons discussed below, this Court GRANTS Defendants' Motion to Transfer Venue and to Suspend Obligation to Answer in the District Court.
I. BACKGROUND
The United States can acquire and take land into trust for the benefit of individual Indians and tribes, pursuant to "the authorities, policy, and procedures" of 25 C.F.R. § 151.1. Interior, the agency empowered to take lands into trust under the regulations, must notify the state and local governments having jurisdiction over the land to be acquired. Id. § 151.10. Interior must also consider the potential impact of the acquisition on regulatory jurisdiction and real estate taxes. Id. When Interior places land into trust, the placement preempts state and local regulation of the use of the land. See Act of May 25, 1926, ch. 379, 44 Stat. 629 (formerly codified at 43 U.S.C. §§ 733-736 (1975)); 25 U.S.C. § 465; 43 C.F.R. § 2564.4; 25 C.F.R. §§ 1.4, 152.22.
In the 1970s, the Oneida Nation filed a lawsuit claiming that certain lands were improperly taken from the Nation by the state of New York. See, e.g., Oneida Indian Nation of N.Y. v. Oneida County, 414 U.S. 661, 94 S.Ct. 772, 39 L.Ed.2d 73 (1974). In 1986, the Stockbridge-Munsee filed a land claim in the Northern District of New York against the state, surrounding counties, and the New York Highway Department. See Stockbridge-Munsee Cmty. v. New York, No. 86-1140 (N.D.N.Y. filed Oct. 15, 1986). The Oneida Nation intervened in the Stockbridge-Munsee suit, claiming an interest in the land at issue. The Stockbridge-Munsee filed an amended complaint in 2004, arguing that the land it challenged was never part of an Oneida reservation.
After the U.S. Supreme Court ruled that the Oneida Nation could not unilaterally assert tribal immunity over land it recently acquired in the City of Oneida, New York, see City of Sherrill v. Oneida Indian Nation of N.Y., 544 U.S. 197, 220-21, 125 S.Ct. 1478, 161 L.Ed.2d 386 (2005), the Oneida Nation petitioned Interior to acquire title to approximately 17,370 acres of real property in trust for the Oneida Nation. *46 The land spans Madison and Oneida counties in the north-westerly part of the state of New York.
In accordance with the regulatory scheme of the National Environmental Policy Act, 42 U.S.C. § 432 et seq., Interior consulted with the state of New York and the local governments, and reviewed the comments received by the Stockbridge-Munsee. On May 23, 2008, Interior issued a decision taking approximately 13,000 acres into trust for the Oneida Nation.
The Stockbridge-Munsee Community is an Indian tribe recognized by the United States. On June 17, 2008, the Stockbridge-Munsee filed a Complaint with this Court naming the United States, Interior, Dirk Kempthorne, as Secretary of Interior, and James S. Cason, as Associate Deputy Secretary of Interior, in their official capacities, respectively. Plaintiffs filed an Amended Complaint on July 21, 2008. In the suit, Plaintiff seeks review of Interior's May 23, 2008 decision to take land in trust for the Oneida Nation. Six other cases have been filed in the Northern District of New York, claiming that Interior's decision was arbitrary and capricious in contravention of the APA. See Cent. N.Y. Fair Bus. Ass'n v. Kempthorne, No. 08-660 (N.D.N.Y. filed June 21, 2008); Niagara Mohawk Power Corp. v. Kempthorne, No. 08-649, 2008 WL 2841419 (N.D.N.Y. filed June 20, 2008); City of Oneida v. Kempthorne, No. 08-648 (N.D.N.Y. filed June 19, 2008); Town of Verona v. Kempthorne, No. 08-647, 2008 WL 2841417 (N.D.N.Y. filed June 19, 2008); New York v. Kempthorne, No. 08-644 (N.D.N.Y. filed June 19, 2008); Upstate Citizens for Equality, Inc. v. United States, No. 08-633, 2008 WL 2841386 (N.D.N.Y. filed June 16, 2008).
The Stockbridge-Munsee seek relief under the APA, 5 U.S.C. §§ 702, 706; the Indian Non-Intercourse Act, 25 U.S.C. § 177; federal common law; the 1788 Treaty of Fort Schuyler and the February 25, 1789 New York implementing statute; and the 1798 Treaty of Canandaigua, 7 Stat. 44. The instant suit alleges that Defendants, inter alia, failed to consider whether the land acquisition would extinguish Stockbridge-Munsee property or treaty rights. Defendants filed this motion on August 28, 2008.
II. DISCUSSION
The Defendants have moved this Court to transfer this case to the United States District Court for the Northern District of New York under 28 U.S.C. § 1404(a). The statute provides as follows:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
The threshold question for this Court is whether this case could have been brought in the Northern District of New York. See Shawnee Tribe v. United States, 298 F.Supp.2d 21, 23 (D.D.C.2002). "A civil action wherein jurisdiction is not founded solely on diversity of citizenship may ... be brought ... in a judicial district in which ... a substantial part of property that is the subject of the action is situated." 28 U.S.C. § 1391(b)(2). As the land at issue is situated in the Northern District of New York, the Stockbridge-Munsee concedes that the case could have been brought there.
This Court has the discretion to grant the motion to transfer. See Shawnee Tribe, 298 F.Supp.2d at 23. "The Court must balance a number of `case-specific' factors when determining whether or not transfer of the case is appropriate." Id. (quoting Stewart v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988)). Defendants acknowledge that they carry the burden of showing that the *47 balances of factors warrant transfer. See Citizen Advocates for Responsible Expansion v. Dole, 561 F.Supp. 1238, 1239 (D.D.C.1983).
This Court has articulated a list of private and public factors to be weighed when considering the transfer of a case. In Shawnee Tribe, this Court said:
The private interest considerations include: (1) the plaintiff's choice of forum, unless the balance of convenience is strongly in favor of the defendants; (2) the defendant's choice of forum; (3) whether the claim arose elsewhere; (4) the convenience of the parties; (5) the convenience of the witnesses of the plaintiff and defendant, but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; (6) the ease of access to sources of proof.
The public interest considerations include: (1) the transferee's familiarity with the governing laws; (2) the relative congestion of the calendars of the potential transferee and transferor courts; (3) the local interest in deciding local controversies at home.
298 F.Supp.2d at 24 (citing Trout Unlimited v. U.S. Dep't of Agric., 944 F.Supp. 13, 17 (D.D.C.1996)).
A. Private-Interests Considerations
The "plaintiff's choice of forum is afforded great deference, and is a `paramount consideration' in any determination of a motion to transfer. However, that choice is conferred less deference by the court when a plaintiff's choice of forum is not the plaintiff's home forum." Id. (internal citations omitted); see also Citizen Advocates, 561 F.Supp. at 1239. The Stockbridge-Munsee's home forum is Wisconsin. Defendants' choice of forum, given other pending actions dealing with the same land dispute and the same administrative decision, is the Northern District of New York. Like in Shawnee Tribe, Plaintiff argues that events giving rise to this suit occurred in Washington and that the case should be heard here. 298 F.Supp.2d at 25. "[M]ere involvement," however, "on the part of federal agencies, or some federal officials who are located in Washington, D.C. is not determinative." Id. at 26. Though the administrative action at issue in this case arose in Washington, "the only real connection [the] lawsuit has to the District of Columbia is that a federal agency headquartered here ... is charged with generally regulating and overseeing the [administrative] process." DeLoach v. Philip Morris Co., Inc., 132 F.Supp.2d 22, 25 (D.D.C.2000). As the D.C. Circuit noted in Cameron v. Thornburgh, 983 F.2d 253 (D.C.Cir.1993):
Courts in this circuit must examine challenges to personal jurisdiction and venue carefully to guard against the danger that a plaintiff might manufacture venue in the District of Columbia. By naming high government officials as defendants, a plaintiff could bring a suit here that properly should be pursued elsewhere.
Id. at 256.
Defendants note that they are facing six challenges to Interior's land-into-trust decision in the Northern District of New York, and that it would be more convenient for them to defend the same decision in one forum. Plaintiff argues that because Interior has assigned this challenge to a different section within the Department than the one that is handling the other cases, this should lessen any inconvenience to Defendants. Defendants counter, however, that Interior's positions amongst the different sections will be coordinated. Plaintiff and Defendants agree that this case is to be decided based on the administrative record; therefore, convenience to witnesses is a non-factor. Given *48 that APA challenges are limited to the administrative record compiled by the agency, see Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985), neither does "the case of access to sources of proof" constrain the Court from transferring the case, Shawnee Tribe, 298 F.Supp.2d at 24. The administrative record here is the same as the one in all six cases pending in the Northern District of New York.
The Court concludes that the privateinterest considerations favor transfer. Having evaluated the private interests, the Court must still consider the public-interest considerations.
B. Public-Interest Considerations
Defendants note that the Northern District of New York and the Second Circuit have considerable experience with land disputes in New York. All six actions that were filed as a result of Interior's decision in May 2008 have been assigned to the same judge; the Stockbridge-Munsee action filed in 1986 has also been assigned to the very same judge. Furthermore, the Stockbridge-Munsee filed an action in the Northern District of New York for a preliminary injunction challenging the land-into-trust decision. See Stockbrige-Munsee Cmty. v. New York, No. 08-1140 (N.D.N.Y filed June 24, 2008). Although the preliminary injunction challenge was subsequently withdrawn, Plaintiff does not dispute that the Northern District of New York has particular expertise in adjudicating land disputes involving Indian tribes and the U.S. Government. Neither side has made any contention that the transferring of this case to the Northern District of New York will congest that court's calendar, and therefore this Court does not consider that factor in its analysis.
Transferring this case to the Northern District of New York will also avoid inconsistent results and waste of judicial resources. See Ledyard v. United States, 1995 WL 908244, at *2 (D.D.C.1995) ("The action here and that in [New York] seek review of the same administrative decision and present similar claims and demands for relief. If this case were transferred to [New York], the cases could be consolidated, thus saving expense to the public and avoiding the duplicative use of judicial resources.") (citation and footnote omitted). The fact is, this case, and the six other cases cited above, all challenge the same administrative decision. See Cont'l Grain Co. v. FBL-585, 364 U.S. 19, 26, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960) ("a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent"). The issues here clearly overlap with the cases before the Northern District of New York, even if the cases technically are seeking different relief. See Martin-Trigona v. Meister, 668 F.Supp. 1, 3 (D.D.C. 1987) ("The interests of justice are better served when a case is transferred to the district where related actions are pending."). The public-interest considerations, likewise, weigh in favor of transfer.
III. CONCLUSION
In balancing the factors in this case, it is in the interest of justice that this case should be transferred to the Northern District of New York. Defendants' Motion to Transfer Venue and to Suspend Obligation to Answer in the District Court is GRANTED. An appropriate Order accompanies this Memorandum Opinion.
SO ORDERED.
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953 F.2d 635
LaJoyv.Lefevre
NO. 90-7434
United States Court of Appeals,Second Circuit.
Dec 13, 1991
1
Appeal From: N.D.N.Y.
2
AFFIRMED.
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92 N.J. Super. 498 (1966)
224 A.2d 132
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
WILLIAM STEELE AND WILLIAM STOKES, DEFENDANTS-APPELLANTS.
Superior Court of New Jersey, Appellate Division.
Argued May 16, 1966.
Decided November 10, 1966.
*500 Before Judges GOLDMANN, FOLEY and COLLESTER.
Mr. Fred J. Kalisky, assigned counsel, argued the cause for appellant William Stokes.
Mr. Joel L. Pitman, argued the cause for appellant William Steele (Mr. Robert Diamond, assigned counsel, attorney).
Mr. Martin G. Holleran, Assistant County Prosecutor, argued the cause for respondent (Mr. Brendan T. Byrne, Essex County Prosecutor, attorney).
The opinion of the court was delivered by FOLEY, J.A.D.
Defendants were convicted after a trial by jury upon joint indictments charging them with the rape of Miss L and the robbery of Alfred E. Blyskal.
Of the several grounds which they raise on appeal we find only one of determinative merit, viz., that the court erred in limiting cross-examination of the complaining witnesses, which was designed to affect their credibility.
The proofs offered by the State ran thus: On March 7, 1964 Blyskal and Miss L, by prior arrangement, had a social engagement. At about 10:30 of that evening Blyskal, operating *501 a 1955 Cadillac, called for Miss L at her address in Irvington. They drove about for a while and then went to the Joli Lounge, a tavern in Newark, where they had "about 3 or 4 drinks" and "listened to the music." At about 2 A.M. they left the tavern and went to Blyskal's car, which was parked about 75 feet away. According to Miss L, Blyskal said he felt a little tired and "he wanted to doze off for a half hour." While they were seated in the car, he in the driver's seat and she beside him, the car door on Blyskal's side was opened by one of two men. One man "had a pipe or some type of a bat or something" and struck Blyskal in the face with it. Mention was made by the men of getting Blyskal's wallet. Before he had an opportunity to give them the wallet, the man who struck him said, "jump in the car and let's get out of here." From the stand Blyskal identified defendant Steele as that person, and defendant Stokes as his companion. Blyskal was pulled from the car and thrown to the ground. The two men then jumped into the Cadillac and, with Miss L sitting in the middle of the front seat, drove off. Blyskal, despite some difficulty in locating a telephone, managed to reach the police and inform them of the robbery.
The testimony relevant to the alleged rape came entirely from Miss L. She testified that the men drove her to a desolate spot in Weequahic Park where, after the car was parked, she was "taken in the back of the car." She did not remember who "took" her there. Her clothing was removed "from the waist down." She did not remember who took her clothing off, or whether she herself removed it. She then said that her abductors, whom she identified as the two defendants, successively had sexual intercourse with her, in all four times, in the course of which they kissed her mouth and fondled her breasts. The entire affair lasted 20 minutes. She had a clear and detailed recollection of what happened, admitted that she had not been threatened either en route to the park or at the time of the "attack," or that acts of violence (other than the intercourse itself) had been practiced upon her. In fact, in her direct examination she gave no testimony whatever that *502 she submitted to the men through fear of violence. It was only after the direct examination was concluded that the court through a series of leading questions, which in form would have been objectionable had they been propounded by the prosecutor, asked:
"Q. Miss L., before the cross-examination starts, they forced you into the back of the car?
A. Yes.
Q. Were you in fear when you went into the back of the car?
A. Of course.
Q. They didn't ask you to have relations, did they?
A. No, I didn't have any choice.
Q. Explain that to the jury that you had no choice.
A. I had no choice. By that I mean I think they would have killed me. I had no choice.
Q. You were in fear?
A. Yes, of course."
Miss L said that after the several acts of intercourse, she dressed and told the defendants that she "didn't want to get involved in anything and to just leave the car and park it," and "just leave me, which they did." Pursuant to her request they dropped her off at 20th Street and 16th Avenue, Newark, a little after 4 A.M., leaving the car with her. After about "five or ten minutes" she left and started walking toward her home. Immediately thereafter she was accosted by detectives who asked her if she was Miss L. Upon identifying herself she was taken to a police station house. There she identified defendants, as did Blyskal who had preceded her to the police station.
While the evidence prima facie made out both the robbery and the rape charges, and in our judgment was sufficient to sustain a conviction of both, it is patent that as to both charges the identification of defendants as the persons who had committed the offenses was in serious issue since both maintained that they were not present when the alleged crimes were committed. Furthermore, in connection with the rape charge, there is implicit in the testimony of the complaining witness herself the question of whether defendants *503 had with force and violence had intercourse with her against her will, as required by the rape statute, or, on the contrary, whether despite her protestations in answer to the judge's questions, she had in fact, for reasons unconnected with fear, voluntarily submitted. Thus, the issue of credibility both as to Blyskal and Miss L assumed formidable proportions.
The specific challenge which defendants make to the court's limitation of the scope of cross-examination is based upon: (1) the refusal of the court to permit the cross-examiner to inquire into Blyskal's activities during the day with respect to the imbibing of alcoholic beverages; (2) the interrogation of that witness concerning his alleged illicit sexual relationship with Miss L, and (3) Miss L's testimony, previously not referred to, that defendants had robbed her of $70, a matter which she did not report to the police officers who apprehended her and took her into custody. It is argued that (1) Blyskal's entire drinking activities, taken in conjunction with the events of the evening and the fact that he was "drowsy," if established, might seriously have affected the weight to be accorded to his assertion that he was physically able to identify defendants as of the time he was robbed; (2) in light of Miss L's avowed quiescence, evidence relating to her sexual immorality was relevant to a showing of defect in character in a sex offense case, on the issue of her consent, and (3) her credibility might also have been affected had defendants been able to establish the fact that she had not reported to the police the robbery which allegedly was perpetrated on her.
Considerable latitude is customarily allowed in the cross-examination of a witness, but the extent of such examination rests in the sound discretion of the trial court. State v. Siegler, 12 N.J. 520, 526-527 (1953). In consonance with this general rule the trial judge has broad discretion to determine the proper limits of cross-examination of a witness whose credibility is put in issue. State v. Pontery, 19 N.J. 457, 473 (1955). Thus, it has been held in a bastardy proceeding that cross-examination was properly limited *504 when it sought to attack the credibility of the complaining witness, State v. Arbus, 54 N.J. Super. 76, 82-84 (App. Div. 1959); see also Annotation, "Cross-examination as to sexual morality for purposes of affecting credibility of witness," 65 A.L.R. 410 (1930); and in a prosecution for carnal abuse it was held that cross-examination which sought to inquire into evidence of sexual acts on other occasions with persons other than the defendant was properly excluded. State v. Raymond, 74 N.J. Super. 434, 438 (App. Div. 1962).
But cross-examination upon proper foundation has been permitted with respect to the complaining witness's general reputation for chastity, or lack of it, as bearing on the issue of consent in a rape case. State v. Rubertone, 89 N.J.L. 285, 287 (E. & A. 1916) (dictum; carnal abuse case); State v. Yevchak, 130 N.J.L. 584, 587 (Sup. Ct. 1943) (no proper foundation; rape case); O'Blenis v. State, 47 N.J.L. 279 (Sup. Ct. 1885) (rape case); Annotation, "Admissibility in rape cases of evidence of previous unchastity, or reputation for unchastity, of prosecutrix," 140 A.L.R. 364, 380 et seq. (1942); 1 Wigmore, Evidence (3d ed. 1940), § 62, p. 464. See also State v. Orlando, 119 N.J.L. 175, 180 (Sup. Ct. 1937), where cross-examination designed to establish that the intercourse was by consent and not forcible was allowed; and State v. Lasowski, 4 N.J. Misc. 489, 491, 133 A. 415 (Sup. Ct. 1926), where it was held to be within the discretionary control of the court to permit cross-examination of the prosecutrix's mother.
The rule that the trial judge has broad discretion in controlling cross-examination is widely endorsed. And a number of jurisdictions have also specifically subscribed to the rule that the defense should be accorded great latitude in the cross-examination of the complaining witness in sex cases where an accusation is easily made and difficult to disprove. See People v. Clark, 63 Cal.2d 503, 47 Cal. Rptr. 382, 407 P.2d 294 (Sup. Ct. 1965); People v. Rainford, 58 Ill. App.2d 312, 208 N.E.2d 314, 316 (App. Ct. 1965); Frady v. State, 212 Ga. 84, 90 S.E.2d 664, 665 (Sup. Ct. 1955); *505 Sherrick v. State, 157 Neb. 623, 61 N.W.2d 358, 366 (Sup. Ct. 1953); State v. Morgan, 235 Minn. 388, 51 N.W.2d 61, 63 (Sup. Ct. 1952); State v. Rosenberry, 156 Kan. 508, 134 P.2d 414, 416 (Sup. Ct. 1943); State v. Jones, 62 Idaho 552, 113 P.2d 1106 (Sup. Ct. 1941); DeSalvo v. People, 98 Colo. 368, 56 P.2d 28, 29 (Sup. Ct. 1936); State v. Warner, 79 Utah 510, 13 P.2d 317, 319 (Sup. Ct. 1932); State v. Paddock, 86 Mont. 569, 284 P. 549, 551 (Sup. Ct. 1930); State v. Brooks, 181 Iowa 874, 165 N.W. 194, 198 (Sup. Ct. 1917); 3 Wharton, Criminal Evidence (12th ed. 1955) § 862, p. 244. These authorities support the proposition that a clear abuse of discretion in the limitation of cross-examination of the prosecutrix in rape cases justifies reversal.
We are satisfied that in the circumstances of this case fundamental fairness required that wider latitude should have been granted defendants in the examination of Blyskal on the issue of the weight of his identification of defendants.
Furthermore, we believe that a ruling made by the court in the course of cross-examination of Blyskal was couched in language capable of prejudicial effect. At the outset of that cross-examination defendants attempted to probe Blyskal concerning his relationship with Miss L. The following then appears in the record:
"THE COURT: I will not permit you to ask any questions about sexual relations. It would be prejudicial to the State's case."
and again:
"* * * Any question concerning sexual relations don't ask. I will not permit it." (Emphasis added)
We are satisfied that the court ruled correctly insofar as it enjoined defendants from questioning Blyskal about his relationship with Miss L. However, if defendants' counsel could reasonably have understood (as is now contended they did) that the use of the word "any" precluded them generally from questioning Miss L, the complaining witness, concerning *506 her chastity, for the purpose of affecting her credibility, or from introducing evidence of her general reputation for chastity, error was committed.
Although we fully recognize that the trial court has wide discretion in regulating or fixing the limits of cross-examination, it seems apparent that the judge did not curb the examination under review with this in mind. From the record it clearly appears that the court mistakenly understood that where, as here, defendants deny presence at and participation in a crime, or where they offer proof of alibi, or both, they are denied the privilege of developing on cross-examination facts militating against the conclusion that a crime was in fact committed. For example, when Miss L was being interrogated about what occurred during the course of the ride from the tavern to Weequahic Park, she was asked whether she smelled the breaths of the men. The prosecutor objected upon the ground that the question was irrelevant, and well it might have been. However, at that juncture the trial judge revealed his thinking. In sustaining the objection upon the ground of irrelevancy he said, "I don't [think so] either because your defense is one of alibi. What difference does it make whether there was or was not alcohol on their breath?" When the attorney suggested that it went to credibility the court said, "How can it affect her [Miss L's] credibility if your defense is that they were not there? Do you want to withdraw that question or do you want to still press it?" The attorney pressed the ruling and the court sustained the objection.
Later, when Miss L was being cross-examined on a statement she had given to the police, without objection to an apparently innocuous answer, the following occurred:
"Q. What time did you return on Monday?
A. I was there Monday morning, and they took the case down all over again.
THE COURT: Is there anything in this statement about this?
MR. ROSENTHALL: Nothing in this statement.
THE COURT: What is the purpose of the examination? Again, your defense is alibi, isn't it?
*507 MR. ROSENTHALL: That is right; but if the occurrence never took place, your Honor * * *
THE COURT: That isn't your defense, is it? Your defense is that these men were not there.
MR. ROSENTHALL: Correct." (Emphasis added)
Notwithstanding that the judge then allowed the answer to stand, he plainly indicated that where alibi is pleaded cross-examination on the subject of whether a crime was in fact committed by anybody is improper. This concept is clearly erroneous. Where the presence of defendant at the scene of the crime is essential to show its commission by him, the burden of proving that presence beyond a reasonable doubt is upon the State. Defendant has neither the burden nor the duty to show that he was elsewhere at the time and so could not have committed the offense. State v. Peetros, 45 N.J. 540, 551 (1965). Alibi is simply a part of defendant's general denial of guilt. Id., at p. 544.
We are obliged to conclude that the judge's misconception of the limited scope of cross-examination where alibi is pleaded led him to think erroneously that, as a matter of law, he was barred from the exercise of his discretion in determining the length to which the cross-examination in this case should have been permitted. It is well settled that discretion means legal discretion, in the exercise of which the judge must take account of the law applicable to the particular circumstances of the case and be governed accordingly. If the trial judge misconceives the applicable law or misapplies it to the factual complex, in total effect the exercise of legal discretion lacks a foundation and becomes an arbitrary act. When this occurs it is the duty of the reviewing court to adjudicate the controversy in light of the applicable law in order that a manifest denial of justice be avoided. Kavanaugh v. Quigley, 63 N.J. Super. 153, 158 (App. Div. 1960).
Reversed and remanded for a new trial.
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302 F.2d 262
Luba WANG, formerly known as Lillian Murashek, Plaintiff-Appellant,v.UNITED STATES of America, Defendant-Appellee.
No. 294.
Docket 27277.
United States Court of Appeals Second Circuit.
Argued April 2, 1962.
Decided April 30, 1962.
Samuel W. Sherman, New York City, for plaintiff-appellant.
Philip J. Ryan, Jr., Asst. U. S. Atty., S. D. N. Y., New York City (Robert M. Morgenthau, U. S. Atty., and Eugene R. Anderson, Asst. U. S. Atty., New York City, on the brief), for defendant-appellee.
Before CLARK, HINCKS, and FRIENDLY, Circuit Judges.
PER CURIAM.
1
Undoubtedly this action for veteran life insurance is time-barred under 38 U.S.C. § 784(b), requiring action within six years after the right has accrued unless plaintiff can show that the time was suspended by her filing of a claim. Her brother, then in service, took out the policies in 1942 and 1943; but they lapsed for nonpayment of the premiums when he left the service in 1946. He died on July 17, 1949, and she did not make formal claim until 1957. She relies, however, on two letters she wrote the Veterans Administration — one in 1949 and one in 1950 — asking for information as to the policies and the possibility that nonpayment of the premiums was excused by his service disability at the time. In each case the Veterans Administration answered stating that no benefits were payable, since the insurance had lapsed for nonpayment of the premiums, but stating that she could apply for waiver of payment for disability and sending her the appropriate forms to fill out. See the opinion below, D.C.S.D.N.Y., 196 F.Supp. 240, at 241-242. But she took no further action until 1957.
2
While no particular form is necessary for the presentation of a claim under 38 U.S.C. § 784, the courts have uniformly held that requests for information, without demand of payment, do not constitute a claim for purposes of suspending the running of the statute of limitations. We so held quite explicitly in Werner v. United States, 2 Cir., 86 F.2d 113; and other cases so holding are cited in the opinion below, D.C.S.D.N.Y., 196 F. Supp. 240, at 243. The district court was therefore correct in dismissing the complaint.
3
Affirmed.
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FILED
Jun 21 2019, 8:50 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Amanda McIlwain Curtis T. Hill, Jr.
Legal Aid Corporation of Attorney General of Indiana
Tippecanoe County Abigail R. Recker
Lafayette, Indiana Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
In the Matter of the Termination June 21, 2019
of the Parent-Child Relationship Court of Appeals Case No.
of: 18A-JT-3110
A.B. (Minor Child), Appeal from the Tippecanoe
Superior Court
and
The Honorable Faith A. Graham,
C.B. (Mother), Judge
The Honorable Tricia L.
Appellant-Respondent,
Thompson, Magistrate
v. Trial Court Cause No.
79D03-1804-JT-48
Indiana Department of
Child Services,
Appellee-Petitioner
Baker, Judge.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 1 of 17
[1] C.B. (Mother) appeals the trial court’s order terminating her parent-child
relationship with her child, A.B. (Child). Mother argues that there is
insufficient evidence supporting the trial court’s conclusion that the conditions
resulting in the placement of Child outside Mother’s custody will not be
remedied, that the continuation of the parent-child relationship poses a threat to
Child’s well-being, and that the termination of the parent-child relationship is in
the child’s best interest. Finding the evidence insufficient, we reverse and
remand for further proceedings.
Facts
[2] Child was born in January 2011 to Mother and B.B. (Father).1 On April 18,
2017, the Department of Child Services (DCS) and law enforcement officers
went to Mother’s home after receiving a report that Child’s half-brother
(Sibling), who was then three years old, had been neglected due to lack of
supervision by Mother. When they arrived, Sibling was walking down the
street unsupervised; Mother was inside, passed out on the couch with burnt
spice cigarettes near her and within a child’s reach. The officers tried several
times to wake Mother. Once they did, they arrested her, and DCS placed Child
and Sibling in relative care. The State charged Mother with Level 6 felony
1
Father is not a party to this appeal.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 2 of 17
neglect of a dependent and Class A misdemeanor possession of a synthetic drug
or lookalike substance. Mother remained incarcerated until April 22, 2017.
[3] On April 19, 2017, DCS filed a petition alleging both children to be children in
need of services (CHINS) based on the above facts.2 On May 15, 2017, a
factfinding hearing took place, after which the juvenile court adjudicated Child
to be a CHINS. On May 25, 2017, the juvenile court entered its dispositional
and parental participation decrees, ordering Mother to participate in parenting
time, a substance abuse assessment and all recommendations, case
management, a parenting assessment and all recommendations, random drug
screens, a mental health evaluation and all recommendations, individual
counseling and all recommendations, and family therapy and all
recommendations.
Mother’s Participation with Services and Visits
[4] In May 2017, DCS referred Mother to Bauer Family Resources for parenting
time and case management. In May and June 2017, Mother participated in
case management and her parenting visits were positive, with Mother providing
appropriate care for the children and no safety concerns reported. Mother then
missed multiple visits in July and August 2017. Mother reported that she was
2
Sibling’s father ultimately took custody of him. Sibling is not part of this appeal.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 3 of 17
depressed and that her depression was why she disengaged with visitation.
Because Mother missed visits, in August 2017, Bauer closed its services to her.
[5] In May 2017, DCS referred Mother to Wabash Valley Alliance (WVA) for a
mental health evaluation, which Mother completed. WVA also recommended
that Mother participate in individual therapy and family therapy.
[6] On June 13, 2017, Mother completed an intake assessment with an addictions
counselor at WVA. Mother told the counselor that she had used alcohol in the
past but that she had never used illegal drugs. Following the assessment, the
counselor recommended that Mother complete a substance abuse assessment
and participate in individual counseling for her symptoms of depression.
[7] On July 31, 2017, Mother completed her substance abuse assessment at WVA.
During the assessment, Mother indicated that she was using alcohol,
methamphetamine, and opiates, and that she had used methamphetamine three
days before the assessment. The treatment provider recommended that Mother
attend an intensive outpatient program (IOP). On September 5, 2017, Mother
attended one IOP session at WVA; she was later discharged for noncompliance.
In October 2017, DCS referred Mother to Bauer for another IOP, which
Mother did not complete. On August 22, 2017, Mother requested a medication
evaluation; it is unclear from the record whether she received a referral for it.
[8] On August 30, 2017, the juvenile court stated that Mother’s parenting time may
continue so long as she submitted to all requested drug screens and refrained
from using or testing positive for methamphetamine, but that if she tested
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 4 of 17
positive, her parenting time would be immediately suspended and would not
resume until further order of the juvenile court. After Mother tested positive for
methamphetamine on September 28, 2017, the juvenile court suspended her
parenting time. Family Case Manager (FCM) Samantha Goltz testified that
Mother “was given the opportunity to participate in I believe 30 days of clean
screens and not be missing any screens” but that Mother did not comply with
those terms and has not been allowed to visit Child since then. Tr. Vol. II p. 77.
[9] Mother requested that visitation be reinstated. Mother testified that in October
2017, she requested a Skype or telephone visit if she could not have an in-
person visit due to her failing the drug screen. DCS denied her request,
believing it would be detrimental to Child. In February 2018, DCS denied
Mother’s request because Mother did not participate in drug screens and had
not seen Child in a long time. In June 2018, DCS denied Mother visitation
because of the length of time that had passed since Mother’s last visit with
Child. DCS never reinstated visits during these proceedings.
[10] In November 2017, DCS referred Mother to case management at Lifeline
Youth and Family Services; Lifeline later discharged her due to lack of contact.
However, Mother was incarcerated from November 6 through December 16,
2017, for contempt of court because she failed to pay child support for another
child. She was then on work release until January 5, 2018.
[11] FCM Goltz made a referral for a psychological evaluation on March 5, 2018,
and although Mother was incarcerated again on March 26, 2018, FCM Goltz
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 5 of 17
did not renew the referral because she did not know when Mother would be
released. Mother’s incarceration, which was for the neglect of a dependent
charge (to which Mother had pleaded guilty) that led to this case, lasted through
May 23, 2018. Following her arrest, she was on house arrest through August 1,
2018. Mother was on probation at the time of the termination hearing.
[12] At the start of these proceedings, Mother was seeking housing because her
residence at the time was being investigated for mold. She testified that she had
been living in the same place since November 2017, and at the time of the
termination hearing, she was facing eviction because the property owners sold
the building. She testified that she was actively looking for housing, and that if
she needed to, she could stay with her father or her boyfriend’s mother. As for
employment, at the time of the termination hearing, Mother was in her second
month of employment at Steak ‘n’ Shake; she had previously worked for a
cleaning company. Mother was also taking prescribed medication to treat her
depression and was working to obtain health insurance.
Mother’s Drug Use and Screens
[13] DCS referred Mother for drug screens. Mother missed twenty-two screens
between August 22, 2017, and October 10, 2017. Mother completed eleven
screens from September 27, 2017, to November 1, 2017, that were negative of
all substances. On October 13 and 26, 2017, she tested positive for alcohol. On
September 28, 2017, Mother tested positive for methamphetamine.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 6 of 17
[14] In the three months leading up to the termination hearing, Mother consistently
participated in drug screens, all of which were clean, and she was still
participating at the time of the hearing.3 FCM Goltz testified that because
Mother had been incarcerated before the three months in which she consistently
tested clean, Mother could have been clean for approximately five months.
Mother testified that, at the termination hearing, she was five days shy of five
months of sobriety.
Child
[15] When this case began, Mother and Child had a bond. Court Appointed Special
Advocate (CASA) Suzanne Wetzel testified that in June 2017, Mother was
“loving” and “attentive” toward Child. Tr. Vol. II p. 46. Child has some
developmental delays that involve irregular social behaviors, including toilet
training delays. She has been diagnosed with Attention-Deficit Hyperactivity
Disorder and impulse-control disorder. On May 26, 2017, Child completed an
intake appointment with a therapist who recommended that Child participate in
case management and medication management to address Child’s behaviors
and in individual therapy to work on coping skills and establishing boundaries.
[16] Between September 11 and 22, 2017, Child participated in case management.
Child struggled to comply with directions, had difficulty transitioning between
3
From May 23 through August 1, 2018, Mother submitted to approximately seven drug screens for her
criminal case. It is unclear whether she was also screening through DCS.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 7 of 17
activities, and became fearful when it was time to use the restroom. The
treatment provider was concerned that Child may have suffered from trauma
that resulted in her fear of using the restroom. CASA Wetzel testified that
Child has made significant progress both at home and at school and is now able
to be attentive and stay focused. Her toilet training has improved. Child was
taking medication for her ADHD and aggression.
[17] Since being removed from Mother’s care, Child has been placed in four foster
homes and with two relative caregivers. At the time of the termination hearing,
Child was in relative placement in Florida; she was doing well in that
placement, and her caregivers were willing to adopt her.
Termination Proceedings
[18] On April 4, 2018, DCS filed a petition to terminate the parent-child relationship
between Mother and Child. DCS stopped funding services for Mother in June
2018 because Mother was not participating in services. A factfinding hearing
took place on June 27 and August 22, 2018. During the hearing, FCM Goltz
testified that termination was in Child’s best interest because Child is in a stable
and loving environment and is doing well. CASA Wetzel also recommended
termination based on Mother’s failure to comply with services and her lack of
participation in Child’s life; she also testified that termination was in Child’s
best interest because Child is thriving in her current placement and that
disruption would be detrimental to her.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 8 of 17
[19] On November 21, 2018, the juvenile court entered an order terminating the
relationship. Mother now appeals.
Discussion and Decision
I. Standard of Review
[20] Our standard of review with respect to termination of parental rights
proceedings is well established. In considering whether termination was
appropriate, we neither reweigh the evidence nor assess witness credibility.
K.T.K. v. Ind. Dep’t of Child Servs., 989 N.E.2d 1225, 1229 (Ind. 2013). We will
consider only the evidence and reasonable inferences that may be drawn
therefrom in support of the judgment, giving due regard to the trial court’s
opportunity to judge witness credibility firsthand. Id. Where, as here, the trial
court entered findings of fact and conclusions of law, we will not set aside the
findings or judgment unless clearly erroneous. Id. In making that
determination, we must consider whether the evidence clearly and convincingly
supports the findings, and the findings clearly and convincingly support the
judgment. Id. at 1229-30. It is “sufficient to show by clear and convincing
evidence that the child’s emotional and physical development are threatened by
the respondent parent’s custody.” Bester v. Lake Cty. Office of Family & Children,
839 N.E.2d 143, 148 (Ind. 2005).
[21] Indiana Code section 31-35-2-4(b)(2) requires that a petition to terminate
parental rights for a CHINS must make the following allegations:
(A) that one (1) of the following is true:
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 9 of 17
(i) The child has been removed from the parent for at least
six (6) months under a dispositional decree.
(ii) A court has entered a finding under IC 31–34–21–5.6
that reasonable efforts for family preservation or
reunification are not required, including a description of
the court's finding, the date of the finding, and the manner
in which the finding was made.
(iii) The child has been removed from the parent and has
been under the supervision of a local office or probation
department for at least fifteen (15) months of the most
recent twenty-two (22) months, beginning with the date
the child is removed from the home as a result of the child
being alleged to be a child in need of services or a
delinquent child;
(B) that one (1) of the following is true:
(i) There is a reasonable probability that the conditions
that resulted in the child’s removal or the reasons for
placement outside the home of the parents will not be
remedied.
(ii) There is a reasonable probability that the continuation
of the parent-child relationship poses a threat to the well-
being of the child.
(iii) The child has, on two (2) separate occasions, been
adjudicated a child in need of services;
(C) that termination is in the best interests of the child; and
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 10 of 17
(D) that there is a satisfactory plan for the care and treatment of
the child.
DCS must prove the alleged circumstances by clear and convincing evidence.
K.T.K., 989 N.E.2d at 1230.
II. Drug Screens
[22] Initially, we address an issue raised by neither of the parties. The trial court’s
order included this finding of fact:
15. Mother tested positive for methamphetamine on July 17,
2017, July 31, 2017, and September 28, 2017. Mother tested
positive for alcohol on two (2) drug screens in October 2017.
Mother failed to submit to numerous drug screens as requested.
Appealed Order p. 3. DCS submitted evidence regarding Mother’s drug screens
through an exhibit, which included affidavits from a “Certifying Scientist and
Custodian of Records” for a toxicology laboratory and a “custodian of the
records” for another laboratory and Mother’s drug screen results. Appellee’s
Ex. Vol. III p. 4-49. DCS did not elicit expert testimony regarding these drug
screens during the termination hearing.
[23] As we have recently stated, exhibits containing drug test results do not fall
under the business records exception to the rule against hearsay and, although
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 11 of 17
Mother did not make a hearsay objection,4 the exhibit should have been
inadmissible as hearsay. See Matter of L.S., — N.E.3d — at *4 (Ind. Ct. App.
May 21, 2019). Admission of this evidence requires expert testimony and the
opportunity for cross-examination. Accordingly, the trial court erred by
admitting the exhibit into evidence and by relying on them in its order.
III. Remedy of Conditions
[24] Mother first argues that DCS did not prove by clear and convincing evidence
that there is a reasonable probability that the conditions resulting in Child’s
removal will not be remedied. Child was initially removed from Mother
because of concerns of neglect and substance abuse.
[25] When this case began, Mother “was wanting to work on getting her
relationship back with [Child] and being – and getting life back.” Tr. Vol. II p.
42. Child’s therapist testified that “for all intents and purposes at that time
[Mother] had good intentions.” Id. CASA Wetzel testified that in June 2017,
Mother was “loving” and “attentive” toward Child. Id. at 46.
[26] Although Mother suffered a relapse with her drug use and was twice
incarcerated during these proceedings, by the time of the termination hearing,
Mother had completed a mental health assessment, a substance use assessment,
4
Mother objected to the admission of this exhibit because the exhibit did not include all of Mother’s screens
throughout the proceedings, but instead included screens only through June 2018. We admonish DCS to be
thorough in its submission of evidence.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 12 of 17
and, during her incarceration, a psychological evaluation. She also had
complied with her criminal case. By the time of the termination hearing,
Mother had maintained sobriety for at least three months, if not longer. She
also had stable employment for two months, had applied for health insurance,
and had addressed her mental health needs by visiting her doctor and starting
medication. Although the State argues that Mother likely will be unable to
maintain her sobriety long-term without treatment, Mother has maintained her
sobriety even after DCS stopped funding services in June 2018.
[27] Moreover, Mother missed some of her services because she was incarcerated.
Specifically, in November 2017, DCS referred Mother to case management at
Lifeline; Lifeline later discharged her due to lack of contact. However, Mother
was incarcerated from November 6 through December 16, 2017, for contempt
of court because she failed to pay child support for another child. Similarly,
when Mother did not complete the psychological evaluation that FCM Goltz
referred for her because of her incarceration, FCM Goltz did not renew the
referral because she did not know when Mother would be released. It is well
established that incarceration is an insufficient basis for terminating parental
rights, K.E. v. Indiana Dep’t of Child Servs., 39 N.E.3d 641, 643 (Ind. 2015), and
we decline to hold against Mother her inability to participate in referred services
because she was incarcerated.
[28] As for Mother’s living environment, Mother testified that she has been living in
the same place since November 2017, her incarcerations notwithstanding. At
the time of the termination hearing, she was facing eviction because the
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 13 of 17
property owners sold the building. She testified that she was actively looking
for housing, and that if she needed to, she could stay with her father or her
boyfriend’s mother. We find no evidence in the record to contravene Mother’s
testimony that she has had or will have appropriate housing. Indeed, neither
FCM Goltz nor CASA Wetzel had visited Mother’s residence.
[29] Under these circumstances, there is not clear and convincing evidence
supporting the trial court’s conclusion that there is a reasonable probability that
the reasons for Child’s placement outside of Mother’s care and custody will not
be remedied.
IV. Child’s Well-Being
[30] Because the statute is phrased in the disjunctive, we must also consider whether
DCS established by clear and convincing evidence that there is a reasonable
probability that the continuation of the parent-child relationship poses a threat
to Child’s well-being.
[31] The trial court did not cite any specific facts to support its conclusion that the
continuation of the parent-child relationship posed a threat to Child’s well-
being. The trial court simply stated that the “child needs stability in life. The
child needs parents with whom the child can form a permanent and lasting
bond and who will provide for the child’s emotional, psychological, and
physical well-being. The child’s well-being would be threatened by keeping the
child in parent-child relationships with Mother . . . .” Appealed Order p. 4.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 14 of 17
[32] At the start of this case, Mother and Child were bonded. A Bauer report from
July 2017 noted that Mother “has a bond with [Child] and [Sibling]; as
evidence by her interactions with [Sibling] and [Child] during parenting time
and how [Sibling] and [Child] run and hug [Mother] upon seeing her during
parenting time.” Appellee’s Ex. Vol. II p. 68. That same report indicated that
Mother appropriately engaged with and took care of the children.
[33] The State contends that Mother failed to complete the actions necessary to
resume visitation with Child. It is accurate that Mother was advised that if she
continued to test positive for methamphetamine, her visits with Child would be
suspended; after Mother tested positive and the juvenile court suspended her
visits, the juvenile court provided that Mother would be able to resume visits if
she submitted clean drug screens for thirty days, but Mother failed to do so.
[34] Yet the record is clear that Mother wanted another chance so she could
maintain her bond with Child—and DCS refused to give Mother this chance.
DCS justified its decision in part by arguing that the visits would be traumatic
to Child based on the length of time that had passed since Child had last seen
Mother. Yet Mother was unable to rectify that potential issue because DCS
denied her any additional visitation. Moreover, DCS did not explain why the
passage of time between visits would make another visit traumatic for Child.
Considering that Child was placed in six different homes throughout these
proceedings, we find DCS’s reasoning puzzling. Indeed, it is hard to
understand how seeing a parent with whom she has a bond could be more
traumatic than bouncing from placement to placement. To terminate a parent-
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 15 of 17
child relationship based on the circular logic that DCS employed in this case
regarding visitation is not a result that we can sanction.
[35] In short, the record does not hold clear and convincing evidence of a reasonable
probability that the continuation of the parent-child relationship poses a threat
to Child’s well-being.
V. Child’s Best Interests
[36] Finally, we consider the general question of what is in Child’s best interests.
Stability and consistency are important for every child. Throughout these
proceedings, Mother has made noteworthy improvements with her sobriety and
personal stability. Mother and Child had a bond when this case began. Mother
has exerted herself to remedy her situation and become a better caregiver.
Mother wants to have a relationship with Child and wants to parent Child.
[37] CASA Wetzel testified that she believed that termination was in Child’s best
interest because Child was thriving in her current placement and the disruption
would be “extremely detrimental to her.” Tr. Vol. II p. 48. It seems, then, that
DCS recommended termination based on the grounds that Child needs stability
and would be harmed by yet another placement. Yet the record is devoid of
evidence that Child would be affected if termination were delayed to give
Mother an opportunity to maintain her sobriety, participate in services, and
resume visitation with Child, nor is there evidence that Child’s current
caregivers’ willingness to adopt her would be affected by putting off
termination.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 16 of 17
[38] We acknowledge that Mother must continue to build a stable, sober life,
participate in services, and preserve her bond with Child. Yet, based on the
record, we simply cannot say that clear and convincing evidence exists that, at
this point, the termination of this relationship is in Child’s best interests.5
[39] The judgment of the trial court is reversed and remanded for further
proceedings.
Najam, J., and Robb, J., concur.
5
Mother also argues that DCS violated her due process rights by filing a petition to terminate her parental
rights despite not providing appropriate services. Because we addressed her concerns regarding those services
in our discussion of the substantive issues, we need not also address them as procedural errors.
Court of Appeals of Indiana | Opinion 18A-JT-3110 | June 21, 2019 Page 17 of 17
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 19-4390
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
KEVIN STATTS,
Defendant - Appellant.
Appeal from the United States District Court for the Southern District of West Virginia, at
Charleston. John T. Copenhaver, Jr., Senior District Judge. (2:05-cr-00024-1)
Submitted: October 31, 2019 Decided: November 25, 2019
Before MOTZ and HARRIS, Circuit Judges, and SHEDD, Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
Wesley P. Page, Federal Public Defender, Jonathan D. Byrne, Assistant Federal Public
Defender, Rhett H. Johnson, Assistant Federal Public Defender, OFFICE OF THE
FEDERAL PUBLIC DEFENDER, Charleston, West Virginia, for Appellant. Michael B.
Stuart, United States Attorney, Kathleen Robeson, Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, of
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Kevin Statts pled guilty to conspiracy to manufacture methamphetamine, in
violation of 21 U.S.C. § 846 (2012) (Count 2), and possession of a firearm in furtherance
of a drug trafficking offense, in violation of 18 U.S.C. § 924(c)(1)(A) (2012) (Count 6).
The district court sentenced Statts to 84 months in prison followed by 6 years of supervised
release on Count 2 and 60 months in prison followed by 5 years of supervised release on
Count 6. The district court specified that Statts’ terms of imprisonment were to run
consecutively while his terms of supervised release were to run concurrently.
Statts completed his term of incarceration and began to serve his supervised release.
Following his conviction for negligent homicide and driving while impaired, Statts
admitted to violating the conditions of his supervised release. The district court revoked
Statts’ supervised release and sentenced him to an aggregate term of 24 months’
imprisonment, consisting of 12 months each on Counts 2 and 6, to be served consecutively.
Statts now appeals, asserting that his aggregate revocation sentence is plainly unreasonable
because it is longer than necessary to achieve the goals of supervised release. We affirm.
“A district court has broad discretion when imposing a sentence upon revocation of
supervised release.” United States v. Webb, 738 F.3d 638, 640 (4th Cir. 2013). We “must
determine whether the sentence is procedurally or substantively unreasonable,” evaluating
the same general considerations employed in review of original sentences. United States
v. Slappy, 872 F.3d 202, 207 (4th Cir. 2017). We will affirm a revocation sentence if it is
within the applicable statutory maximum and not plainly unreasonable. United States v.
2
Padgett, 788 F.3d 370, 373 (4th Cir. 2015). “Only if a revocation sentence is unreasonable
must we assess whether it is plainly so.” Id.
“A revocation sentence is procedurally reasonable if the district court adequately
explains the chosen sentence after considering the Sentencing Guidelines’ nonbinding
Chapter Seven policy statements and the applicable 18 U.S.C. § 3553(a) [(2012)] factors.”
Slappy, 872 F.3d at 207 (footnotes omitted). The revocation “sentence is substantively
reasonable if the court sufficiently states a proper basis for its conclusion that the defendant
should receive the sentence imposed,” up to the statutory maximum. Id. (alteration and
internal quotation marks omitted). “A sentence within the policy statement range is
presumed reasonable.” Padgett, 788 F.3d at 373 (internal quotation marks omitted).
Finally, a district court has the authority “to impose consecutive rather than concurrent
sentences upon revocation of concurrent terms of supervised release.” United States v.
Johnson, 138 F.3d 115, 119 (4th Cir. 1998) (alteration and internal quotation marks
omitted).
Having reviewed the parties’ briefs and the record, we conclude that the district
court relied on appropriate factors and adequately justified the selected sentence, which
was within the statutory maximums. Statts’ aggregate 24-month sentence is not
unreasonable and, therefore, not plainly so. Accordingly, we affirm the district court’s
judgment. We dispense with oral argument because the facts and legal contentions are
adequately presented in the materials before this court and argument would not aid the
decisional process.
AFFIRMED
3
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186 Cal.App.2d 618 (1960)
CARNATION COMPANY (a Corporation), Respondent,
v.
JOHN M. MARCEVICH et al., Appellants.
Civ. No. 18923.
California Court of Appeals. First Dist., Div. Two.
Nov. 23, 1960.
Anthony J. Franich for Appellants.
William H. Birnie for Respondent.
DRAPER, J.
By contract, defendants became the exclusive wholesale distributors of plaintiff's milk and dairy products in the Watsonville area. After five years of operation under the contract, defendants exercised their option to terminate it. Plaintiff brought this action on the common counts to recover a balance claimed due for products theretofore delivered to defendants. Defendants answered by general denial and pleaded, by way of counterclaim, a common count for money had and received. At pretrial conference, the parties agreed that their dispute involved the prices for fluid milk charged by plaintiff under the written contract. Plaintiff contended that it had the right to fix fluid milk prices to be charged, and defendants contended that plaintiff could charge only the minimum resale prices fixed by the State Bureau of Milk Control. The pretrial order recited these contentions and the admission in evidence of the written contract of the parties.
The case was tried to the court sitting without a jury, and much extrinsic evidence was introduced by both sides as to the circumstances under which the contract was entered into and the acts of the parties under it during the five years it remained operative. The court made findings in the general language of the common counts in favor of plaintiff on the *620 complaint and against defendants on their counterclaim. Judgment was for plaintiff for $5,328.21. Defendants appeal.
Because we find little of substance or relevance in much of appellants' argument, it is difficult for us to summarize their contentions.
However, as we understand them, they contend that since the pretrial order recites the existence of an express contract, it supersedes the pleadings and thus requires a "finding" as to whether the price provision of the contract is ambiguous. Contending that the contract is ambiguous, they analyze the parol evidence and conclude that it compels interpretation of the price provision in their favor, thus requiring reversal of the judgment. We cannot agree.
[1a] The pretrial rules provide only that the pretrial conference order, "where inconsistent with the pleadings, controls the subsequent course of the case" (Rules for the Superior Courts, rule 8.8). There is no such inconsistency here. [2] The contract had been fully performed by plaintiff and nothing remained to be done under it except the payment of money. Thus plaintiff could declare generally upon the common count (Castagnino v. Balletta, 82 Cal. 250, 258 [23 P. 127]; Lucy v. Lucy, 22 Cal.App.2d 629, 632 [71 P.2d 949]) or could join such count with one upon the express contract, without being compelled to elect between them (Haggerty v. Warner, 115 Cal.App.2d 468, 474 [252 P.2d 373]; Sessions v. Pacific Improvement Co., 57 Cal.App. 1, 27 [206 P. 653]). [1b] Thus the complaint, which pleads the common count, is completely consistent with the pretrial order, which recites the existence of an express contract.
Even if the action be deemed one upon the express contract, appellants' contention is not aided. [3] Whether the contract is ambiguous on its face, so as to warrant parol evidence, is a question of law, and not of fact. Thus no "finding" as to ambiguity is required (Wheeler v. Board of Medical Examiners, 98 Cal.App. 267 [276 P. 1119]).
Nor are the findings deficient because they fail to deal with details of the parol evidence introduced. [4] The findings here are in the general language of the complaint, a permissible procedure (Voss v. Friedgen, 141 Cal.App.2d 135, 136 [296 P.2d 424]). If any subsidiary findings be required, which we doubt, they may be implied from the general findings (New v. New, 148 Cal.App.2d 372, 388 [306 P.2d 987]; 2 Witkin, California Procedure, p. 1850). The findings thus support the judgment. *621
The only remaining question is whether the evidence, even assuming ambiguity of the contract's price provision, supports the implied finding that plaintiff had the right to charge defendants more than the state minimum price for fluid milk. There is testimony that the custom of the trade generally was that distributors such as plaintiff charged more than the state-fixed minimum, except where competitive conditions, not shown to exist here, required otherwise. [5] There is no direct contradiction of defendants' testimony that plaintiff's representative, just before the contract was signed, stated that the fluid milk price to defendants would be the state minimum. But the trial court was not required to accept this testimony as true (Hicks v. Reis, 21 Cal.2d 654, 659- 660 [134 P.2d 788]). [6] The manner in which the witness testified, the character of his testimony, or his motives may be considered by that court in determining his credibility (Code Civ. Proc., 1847). Defendants concede that they raised no question as to prices charged them for the first four years of operation under the contract. They contend that they did not know that they were being charged more than the state minimum during this period. [7] But there is testimony that from time to time during the life of the contract they received lists stating the prices charged to them and that they also received statements of the state-fixed minimum prices. Thus there is evidence, extrinsic to the contract, to sustain the trial court's determination that the agreement permitted plaintiff to charge more than the state-fixed minimum price. [8] As an appellate court, we do not weigh the evidence.
Appellants do not even remotely suggest that the agreement on its face requires their construction. Rather, they urge only that it is ambiguous and that the parol evidence compels the construction they seek. Since the extrinsic evidence is sufficient to support the determination made by the trial court, it is unnecessary for us to determine whether the contract is in truth ambiguous.
Judgment affirmed.
Kaufman, P. J., and Shoemaker, J., concurred.
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NOTICE
The text of this opinion can be corrected before the opinion is published in the
Pacific Reporter. Readers are encouraged to bring typographical or other formal
errors to the attention of the Clerk of the Appellate Courts:
303 K Street, Anchorage, Alaska 99501
Fax: (907) 264-0878
E-mail: corrections @ akcourts.us
IN THE COURT OF APPEALS OF THE STATE OF ALASKA
RICHARD LAVERNE WAGNER JR.,
Court of Appeals No. A-11682
Appellant, Trial Court No. 3AN-11-9522 CR
v.
O P I N I O N
STATE OF ALASKA,
Appellee. No. 2533 — January 27, 2017
Appeal from the Superior Court, Third Judicial District,
Anchorage, Larry D. Card, Judge.
Appearances: Kevin Higgins, under contract with the Public
Defender Agency, and Quinlan Steiner, Public Defender,
Anchorage, for the Appellant. Timothy W. Terrell, Assistant
Attorney General, Office of Criminal Appeals, Anchorage, and
Craig W. Richards, Attorney General, Juneau, for the Appellee.
Before: Mannheimer, Chief Judge, Allard, Judge, and Suddock,
Superior Court Judge. *
Judge MANNHEIMER.
*
Sitting by assignment made pursuant to Article IV, Section 16 of the Alaska
Constitution and Administrative Rule 24(d).
In the early morning of August 23, 2011, Richard Laverne Wagner Jr. came
to the end of a street, failed to stop, and drove his van into a tree. When the police
arrived, Wagner told the officers that he had recently dropped off some out-of-town
relatives at their hotel, and that he had then taken some medications and started driving
home. Wagner told the officers that, when he came to the end of the street, he attempted
to apply his brakes, but he mistakenly pressed the accelerator instead.
Later, however, Wagner changed his story: he told the police that all he
remembered was being in his home, and then the next thing he remembered was striking
the tree.
Because Wagner admitted drinkingand smokingmarijuana, he was arrested
for driving under the influence. His breath test showed a blood alcohol concentration of
.066 percent — below the legal limit. Wagner then consented to a blood test. A
subsequent chemicalanalysis of Wagner’s blood showed that he had consumed zolpidem
— a sedative that was originally sold under the brand name Ambien, and is now
available under several brand names.
Wagner was charged with driving under the influence and driving while his
license was revoked.
At Wagner’s trial, his defense attorney elicited testimony (from the State’s
expert witness) that one of the potential side effects of zolpidem is “sleep-driving” —
i.e., driving a vehicle without being conscious of doing so.
During the defense case, Wagner took the stand and testified that he had
been at home watching television, and then he took his medication and fell asleep.
According to Wagner, the next thing he remembered was waking up when he hit the tree
and his air bag deployed. Wagner asserted that he remembered nothing about getting
into a motor vehicle and driving.
–2– 2533
Based on this testimony, Wagner’s attorney asked the judge to instruct the
jury that the State was required to prove that Wagner consciously drove the motor
vehicle. More specifically, Wagner’s attorney asked the judge to give this instruction:
If you find that [Wagner] was under the effects of a
prescription medication, [and] that he was not aware of those
effects when he consumed the medication, and that he
performed an otherwise criminal act while unconscious as a
result of this medication, [then] you must find him not guilty
of that criminal act.
The trial judge rejected this proposed instruction because the judge ruled
that, if Wagner voluntarily took the medication, then Wagner could be found legally
responsible for what ensued, even if he was not consciously driving at the time of the
crash.
But even though the judge declined to instruct the jury on Wagner’s view
of the law, the judge did not instruct the jury on his view of the law either. Instead, the
judge simply gave the jury instructions on (1) the definition of driving under the
influence and (2) the definition of acting “knowingly”.
When the attorneys delivered their summations to the jury, the defense
attorney argued that Wagner had not “knowingly” driven his motor vehicle because
Wagner had been sleep-driving under the influence of the zolpidem. In rebuttal, the
prosecutor argued that Wagner’s ability to carry on detailed conversations with the police
showed that he had not been sleep-driving. But the prosecutor also argued that even if
Wagner had been sleep-driving, Wagner still “knowingly” drove the motor vehicle. In
support of this last argument, the prosecutor relied on the concludingsentence of the jury
instruction on “knowingly”: “A person who is unaware of conduct ... of which the
–3– 2533
person would have been aware had he not been intoxicated acts knowingly with respect
to that conduct[.]”
The jury convicted Wagner of both charges, and Wagner then filed this
appeal.
Wagner’s primary claim on appeal is that the jury should have been
instructed along the lines that Wagner’s attorney proposed — i.e., that if Wagner was
sleep-driving, he should be acquitted.
The correct categorization of Wagner’s claim
Although the attorneys and the judge at Wagner’s trial discussed this issue
in terms of mens rea — i.e., whether Wagner acted “knowingly” when he drove the
motor vehicle — Wagner’s appellate attorney correctly recognizes that Wagner’s
proposed defense was actually a claim that Wagner could not be held responsible for the
actus reus of driving. Wagner does not claim that his act of driving was “unknowing”.
Rather, he claims that his act of driving was “involuntary”.
Normally, a person can not be held criminally responsible for their conduct
unless they have engaged in a voluntary act or omission. The term “voluntary act” is
defined in AS 11.81.900(b)(66) as “a bodily movement performed consciously as a result
of effort and determination”. As we explained in Mooney v. State, 105 P.3d 149, 154
(Alaska App. 2005), the criminal law defines “voluntary act” as a willed movement
(or a willed refraining from action) “in the broadest sense of that term”.
But as we are about to explain, a voluntary act is not necessarily a
“knowing” act, as that term is used in our criminal code.
–4– 2533
Many criminaloffenses require proof of a particular type of conduct — e.g.,
delivering a controlled substance to another person, 1 or warning a fugitive felon of their
impending discovery or apprehension. 2 When a crime is defined this way, there will be
circumstances when a defendant’s willed actions (their “voluntary” acts) will fit the
statutory definition of the prohibited conduct, but the defendant will not have been aware
that they were engaging in this defined type of conduct.
For instance, a mail carrier or other delivery person may deliver a letter or
package without knowing that it contains a controlled substance. Or someone (a
neighbor or a news reporter, for example) may unwittingly say or do something that tips
off a fugitive felon to their impending discovery or apprehension. In these instances, the
person will have performed a “voluntary act”, but they will not have “knowingly”
engaged in the conduct specified in the statute.
This is not the kind of defense that Wagner wished to raise at his trial.
Wagner’s attorney did not argue that, even though Wagner knew he was engaging in
some form of action, Wagner somehow remained unaware that, by his actions, he was
putting a motor vehicle into operation.
Rather than raisinga defense of “unknowing” conduct, the defense attorney
argued that Wagner did not engage in any conscious action — that Wagner was
essentially asleep, and that he was unaware that he was engaged in activity of any kind.
This was a claim of involuntariness.
1
See, e.g., AS 11.71.030(a)(1).
2
See AS 11.56.770(b)(2).
–5– 2533
Why we reverse Wagner’s conviction
In State v. Simpson, 53 P.3d 165 (Alaska App. 2002), this Court recognized
that even though the voluntariness of a defendant’s conduct is rarely disputed, the
requirement of a voluntary act is “an implicit element of all crimes”. Thus, “[i]f
voluntariness is actively disputed, the government must prove it.” 53 P.3d at 169.
The criminal law’s concept of involuntariness includes instances where a
defendant is rendered unconscious by conditions or circumstances beyond the
defendant’s control, if the defendant neither knew nor had reason to anticipate this result.
See Wayne R. LaFave, Substantive Criminal Law (2nd ed. 2003), §9.4 (“Automatism”),
Vol. 2, pp. 32-37.
Compare Solomon v. State, 227 P.3d 461, 467 (Alaska App. 2010), where
this Court ruled that defendants charged with driving under the influence can raise a
defense of “unwitting intoxication” if the defendant made “a reasonable, non-negligent
mistake concerning the intoxicating nature of the beverage or substance that they
ingested”.
Having considered these authorities, as well as other authorities cited in the
State’s brief, 3 we conclude Wagner would have a valid defense to the charges of driving
under the influence and driving with a revoked license if (1) he took a prescription dose
of zolpidem, (2) he was rendered unconscious by this drug and engaged in sleep-driving,
and (3) he neither knew nor had reason to anticipate that the drug would have this effect.
The State argues that even if Wagner articulated a valid involuntariness
defense (meaning that the trial judge was wrong when he ruled that Wagner’s proposed
3
People v.Holloway,78 Cal.Rptr.3d770,782-83 (Cal.App. 2008); People v. Mathson,
149 Cal.Rptr.3d 167, 191-93 (Cal. App. 2012); People v. Garcia, 113 P.3d 775, 780-82
(Colo. 2005); State v. Newman, 302 P.3d 436, 440-43 (Or. 2013).
–6– 2533
defense was legally invalid), Wagner should still be procedurally barred from
challenging the trial judge’s ruling in this appeal.
First, the State argues that Wagner’s request for a jury instruction on this
issue was untimely. More specifically, the State contends that Wagner’s defense of
involuntariness falls within the mandate of Alaska Criminal Rule 16(c)(5); this rule
declares that defendants must notify the State in advance of trial if they “[intend] to rely
upon a defense of alibi, justification, duress, entrapment, or other statutory or affirmative
defense.”
In its brief, the State offers a lengthy and complicated argument as to why
the defense of involuntariness should be deemed to fall within Rule 16(c)(5)’s
designation of “statutory or affirmative” defenses. But we need not resolve this issue of
statutory interpretation, because the prosecutor at Wagner’s trial never argued that the
State was prejudiced by any lack of notice. And, in any event, Wagner’s trial judge did
not rely on the issue of timeliness when he rejected Wagner’s proposed defense. Rather,
the trial judge reached the merits of Wagner’s proposed defense: he ruled — mistakenly
— that Wagner’s defense was invalid as a matter of law.
Given these circumstances, we will not cut off Wagner’s right of appellate
review simply because he arguably failed to comply with Criminal Rule 16(c)(5). See
generally Grimmett v. University of Alaska, 303 P.3d 482, 486 n. 9 (Alaska 2013).
In Abruska v. State, 705 P.2d 1261, 1271-72 (Alaska App. 1985), and in
Morgan v. State, 661 P.2d 1102, 1103 n. 1 (Alaska App. 1983), we held that when a trial
court allows a defendant to raise an untimely challenge to an indictment — that is, when
the trial court overlooks the untimeliness and reaches the merits of the defendant’s
challenge — then an appellate court should not reject the claim on forfeiture grounds.
We apply that same rule here. Even assuming that the State is correct in arguing that
–7– 2533
Wagner was required to raise his involuntariness defense before trial, we will
nevertheless review the trial judge’s ruling on the merits of Wagner’s claim.
The State next argues that Wagner failed to preserve his claim of
involuntariness because Wagner’s attorney presented no expert testimony to support the
assertion that Wagner was sleep-driving as a result of his ingestion of zolpidem. But
given the trial judge’s ruling (during the State’s case-in-chief) that this proposed defense
was legally invalid, it is unclear why Wagner’s attorney should be expected to present
expert testimony on this issue.
One might argue that the trial judge would have acted within his proper
authority if he had rejected Wagner’s proposed defense because the defense attorney
failed to give pre-trial notice of any expert testimony to support it. See Alaska Criminal
Rule 16(c)(4). But again, the prosecutor did not object on the ground of lack of notice.
And the State’s own expert (a forensic chemist from the Washington State Toxicology
Laboratory) admitted on cross-examination — without objection from the prosecutor —
that zolpidem can cause a person to sleep-drive.
The State also faults Wagner for failing to offer any evidence on the
question of whether Wagner personally was on notice that zolpidem might have such
side effects. But again, the judge had already ruled (before Wagner took the stand) that
the proposed involuntariness defense was not legally valid.
The State’s final argument on appeal is that, even if the trial judge
improperly prevented Wagner’s attorney from presentingan involuntariness defense, this
error was harmless beyond a reasonable doubt.
The State points to the significant inconsistencies between Wagner’s trial
testimony and the earlier account of events that Wagner offered to the police at the scene
and following his arrest. According to the State, these inconsistencies were so
–8– 2533
substantial that no juror could reasonably have thought there was a possibility that
Wagner was sleep-driving.
The State is correct that the evidence at Wagner’s trial offered many
reasons to doubt Wagner’s claim of sleep-driving. But as we have explained, Wagner
took the stand and testified that (1) he took zolpidem and (2) he had no memory of
events between the time he began feeling drowsy at home and the time he awoke in his
vehicle with the air bag deploying. It was up to the jury to decide whether Wagner’s
testimony created a reasonable doubt as to whether he was sleep-driving.
We therefore reject the State’s harmless error argument.
Conclusion
The judgement of the superior court is REVERSED.
–9– 2533
| {
"pile_set_name": "FreeLaw"
} |
455 F.Supp.2d 648 (2006)
Graciela ELISERIO, et al., Plaintiffs,
v.
FLOYDADA HOUSING AUTHORITY, et al., Defendants.
No. CIV.A. L-05-CV-04.
United States District Court, S.D. Texas, Laredo Division.
September 26, 2006.
*649 *650 Linley Rebecca Boone, Lakshmi Ramakrishnan, Texas Rio Grande Legal Aid Inc., Weslaco, TX, Robert W. Doggett, Texas Rio Grande Legal Aid Inc., Austin, TX, for Plaintiffs.
Charlotte Bingham, Crenshaw Dupree et al, Lubbock, TX, Jean-Michel Voltaire, U.S. Department of Justice, Washington, DC, for Defendants.
*651 ORDER
KAZEN, District Judge.
Pending before the Court is the Report and Recommendation of Magistrate Judge Salda๑a regarding Defendant Floydada Housing Authority's Rule 12(b)(6) motion to dismiss all the Plaintiffs' claims against it. The Report was filed on September 8, 2006, and neither party has objected to it.
Having carefully considered the Magistrate Judge's Report and Recommendation, the Court concludes that it is well-reasoned and correct.
Accordingly, the Report and Recommendation is ADOPTED, and Floydada's Motion to Dismiss (Docket No. 45) is hereby DENIED.
REPORT AND RECOMMENDATION
SALDANA, United States Magistrate Judge.
Pending before the Court is Defendant Floydada Housing Authority's Rule 12(b)(6) motion to dismiss all the Plaintiffs' (the individual Plaintiffs and Plaintiff United Farmworkers of America) claims under the Migrant and Seasonal Agricultural Worker Protection Act, 29 U.S.C. งง 1801-1872, and Plaintiff United Farmworkers of America's claims under the Fair Housing Act, 42 U.S.C. งง 3601-3631, for failure to state a claim. (Docket No. 45.)
Having reviewed the motion, the parties' filings, and the applicable law, this Court is of the opinion that all the Plaintiffs have stated a claim under the Migrant and Seasonal Agricultural Worker Protection Act and that Plaintiff United Farmworkers of America has stated a claim under the Fair Housing Act. Therefore, Defendant's motion to dismiss should be DENIED.
FACTUAL BACKGROUND
The individual Plaintiffs, Graciala Eliserio, Jose J. Eliserio, Argelio Garza, Armandina Garza, Marco Gonzalez, Jose Islas, Sonia Islas, Antonio Lopez, Eduvijes Lopez, Armando Soto, Domingo Soto, Maria Soto, Rafael Soto, Jesus Villarreal, Roxana Villarreal, and Juan Gonzalez, are migrant farm workers whose permanent place of residence is in a Texas county on the TexasโMexico border. (Docket No. 43 ถ 3.1, Pls.' 2d Am. Compl.) Plaintiff United Farmworkers of America (UFW) is a nonprofit membership organization composed of farm workers who regularly rely on farm labor housing programs for housing in Texas. Id. at ถ 3.2. According to the Texas Director of the UFW, the "UFW's mission is to help farm workers seek improved working conditions, including housing." (Docket No. 50, Flores Aff. ถ 3.) As such, the UFW has devoted resources and time trying to correct the deficiencies of farm labor housing in Texas on behalf of its members, and this burden has prevented UFW from addressing other priorities, including seeking to improve poor wages as well as access to workers compensation and health care. Id. The UFW claims that its "inability to improve housing conditions for farm workers in [the Texas Panhandle area, which includes the City of Floydada] has affected the organization's ability to make an impact for [its] members, and [has] harmed the UFW as an organization." Id. at ถ 4.
All Plaintiffs allege that Floydada Housing Authority (Authority) operates one of the worst farm labor housing facilities in Texas. (Docket No. 43 ถ 1.6.) According to Plaintiffs' Second Amended Complaint, the United States Department of Agriculture (USDA) is the executive agency of the United States government that Congress charged with administering farm labor housing programs pursuant to Title 42 *652 U.S.C. ง 1471, et seq. Id. at ถ 4.1 Plaintiffs claim that the Authority received funding and entered into agreements with the USDA to provide decent and affordable housing to farm workers pursuant to Title 42 U.S.C. งง 1484 and 1486, also known as the Section 514 and 516 housing programs. Id. at ถ 4.2. As a result, the Authority built a 78-unit farm labor housing facility in Floydada, Texas under the Section 514 and 516 housing programs. Id. at ถ 4.3. In order to save resources, Plaintiffs claim, the Authority has only attempted to maintain approximately half of the 78-unit complex for occupancy during Floydada's farm labor season. Id. at ถ 4.11. The individual Plaintiffs and members of Plaintiff UFW have occupied the Authority's farm labor housing over the years from about June until October, during the pumpkin harvest and cotton gin production, and intend to rent these units in future seasons. Id. at ถถ 3.2, 4.5, 4.6.
Plaintiffs allege that the Authority's farm labor housing consistently fails to meet federal and state safety and health standards, and has consistently failed to meet these standards for many years. Id. at ถ 4.12. In addition, Plaintiffs claim that the deficient housing conditions materially affect the health and safety of the occupants. Id. at ถ 4.13. As such, Plaintiffs allege that the Authority has violated the Migrant and Seasonal Agricultural Worker Protection Act's (AWPA) safety and health of housing provision, which provides, in relevant part:
[E]ach person who owns or controls a facility or real property which is used as housing for migrant agricultural workers shall be responsible for ensuring that the facility or real property complies with substantive Federal and State safety and health standards applicable to that housing.
29 U.S.C. ง 1823(a); (Docket No. 43 ถถ 5.1, 5.2.)
For this violation, all Plaintiffs filed suit under AWPA's private cause-of-action provision. See 29 U.S.C. ง 1854. The individual Plaintiffs request actual damages, or alternatively, statutory damages, pursuant to 29 U.S.C. ง 1854; and declaratory and injunctive relief from the Authority.[1] (Docket No. 43 at ถ 5.2.) Plaintiff UFW seeks declaratory and injunctive relief from the Authority. Id. at ถ 7.1(c).
Plaintiffs also allege that the Defendants (the Authority and the USDA) harmed them by the Defendants' discriminatory conduct, based on race and national origin, with respect to: (1) the availability of housing; (2) the terms, conditions, and privileges associated with the rental of a dwelling; and (3) the provision of services and facilities in connection with the rental of a dwelling, all in violation of Sections 3604(a) and 3604(b) of the Fair Housing Act (FHA). Id. at ถถ 3.4, 5.7, 5.8, 5.9. The individual Plaintiffs request actual damages, punitive damages, declaratory and injunctive relief from the Authority. Id. at ถ 5.13. The UFW seeks declaratory and injunctive relief against the Authority for its violation of the FHA. Id. at ถถ 5.7, 7.1(c).
SUMMARY OF ARGUMENT
Defendant Floydada Housing Authority argues that there are two reasons why they cannot be held liable under AWPA's housing provision. First, in order to be liable under this provision, the housing provider must be considered a "person" as that term is defined under the Act. See 29 *653 U.S.C. ง 1823(a). AWPA defines "person" as, among other things, "any . . . corporation." 29 U.S.C. ง 1802(9). Although the Authority concedes that they are a public corporation, they argue that they cannot be considered a "person" under AWPA because of their governmental status. (Docket No. 57 ถถ 2, 4, Def.'s Reply.) Specifically, the Authority argues that "statutory language and court decisions regularly distinguish government entities that are public corporations from corporations and that nothing in the AWPA indicates that this distinction should be ignored." Id. at 1. Second, the Authority contends that, even if they are considered a "person" for purposes of AWPA's housing provision, an employment relationship between them and Plaintiff migrant workers is required before the Authority is subject to liability under this provision. (Docket Nos. 45 at 6-10, 57 at 10.) The Authority contends that no such relationship exists between them. Id.
Plaintiffs maintain that the Court's inquiry with respect to the Authority's liability under AWPA should and with the plain meaning of the statutory text. (Docket No. 59 at 1-2, Pls.' Sur-Reply.) Under AWPA, Plaintiffs note, "`person' means any . . . corporation." Id.; See 29 U.S.C. ง 1802(9). Plaintiffs argue that "any . . . corporation" encompasses all corporate entities on its face. (Docket No. 50 at 2, Pls.' Resp.) Since the Authority is a corporation under Texas state law, Plaintiffs note, the Court therefore should find that the Authority is a "person" under AWPA. Id.
Additionally, the Authority argues that Plaintiff UFW lacks standingโspecifically prudential or statutory standingโto sue under either AWPA or the FHA in this case. (Docket No. 45 at 11.) In response, the UFW asserts that it has standing to bring this suit under the jurisdiction of federal court pursuant to Article III of the United States Constitution. (Docket No. 50 at 6-17.)
DISCUSSION
1. Fed.R.Civ.P. 12(b)(6)โStandard for Failure to State a Claim
When a party files a motion to dismiss a claim under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, the Court may not dismiss the claim unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Scanlan v. Texas A & M Univ., 343 F.3d 533, 536 (5th Cir.2003). In considering the 12(b)(6) motion, the Court may "not go outside the pleadings and must accept all well-pleaded facts as true, viewing those facts most favorably to the plaintiff." Id.
2. Statutory Interpretation of "Person" Under AWPA
In interpreting a statute, the Court's objective is to give effect to the intent of Congress. Stiles v. GTE Southwest, 128 F.3d 904, 907 (5th Cir.1997). To give such effect, "[c]ourts routinely emphasize the significance of the precise wording of laws presented for interpretation." Veeck v. S. Bldg. Code Cong. Int'l, 293 F.3d 791, 801 (5th Cir.2002). Accordingly, "[t]he starting point for interpreting a statute is the language of the statute itself." Kennedy v. Texas Utils., 179 F.3d 258, 261 (5th Cir.1999) (citing Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 64 L.Ed.2d 766 (1980)).
In construing such language, the Court adheres to the "plain meaning of a statute unless it would lead to a result so bizarre that Congress could not have intended it." Id. However, "the meaning of statutory language, plain or not, depends *654 on context." Chair King v. Houston Cellular Corp., 131 F.3d 507, 511 (5th Cir. 1997) (citing King v. St. Vincent's Hospital, 502 U.S. 215, 221, 112 S.Ct. 570, 116 L.Ed.2d 578 (1991)). Accordingly, the statute must be read as a whole. Id.
However, if, after application of the above principles of statutory construction, the Court concludes that the statute is ambiguous, meaning that it is "susceptible to more than one reasonable interpretation [or] more than one accepted meaning," United States v. Kay, 359 F.3d 738, 743 (5th Cir.2004), "we may look to the legislative history or agency interpretations for guidance," United States v. Orellana, 405 F.3d 360, 365 (5th Cir.2005). See also Burlington Northern R.R. v. Oklahoma Tax Commn., 481 U.S. 454, 461, 107 S.Ct. 1855, 95 L.Ed2d 404 (1987) ("Legislative history can be a legitimate guide to a statutory purpose obscured by ambiguity").
Under AWPA, "`person' means any individual, partnership, association, joint stock company, trust, cooperative,, or corporation." 29 U.S.C. ง 1802(9) (emphasis added). The Authority concedes that, as a housing authority under Texas law, it is a public corporation. (Docket No. 57 at 2, citing Tex. Loc. Gov't Code ง 392.002(1), "`Authority' or `housing authority' means a public corporation created under this chapter"; Tex. Loc. Gov't Code ง 392.011(b), "A municipal housing authority is a public body corporate and politic.")
Giving the phrase "any corporation" its plain meaning, as Congress expressly intended,[2] this phrase clearly encompasses all types of corporate entities, including public corporations. See, e.g., Cook County, Ill. v. U.S. ex rel. Chandler, 538 U.S. 119, 124-26, 134, 123 S.Ct. 1239, 155 L.Ed.2d 247 (2003) (rejecting the defendant county's argument that as a local government entity, it was not a "person" under the False Claims Act, and holding that even the undefined statutory term "person" included corporations, both public and private). In fact, the Supreme Court recognized that there is an "understanding going back at least to Coke [referring to the year 1787, when E. Coke authored the third edition of Institutes of the Laws of England] . . . that municipal corporations and private ones [are] simply two species of `body politic and corporate,' treated alike in terms of their legal status as persons capable of suing and being sued." Cook County, 538 U.S. at 126, 123 S.Ct. 1239. Therefore, public municipal corporations, like private ones, "should be treated as natural persons for virtually all purposes of constitutional and statutory analysis." Id. at 126-27, 123 S.Ct. 1239 (quoting Monell v. Dep't of Soc. Servs., 436 U.S. 658, 687-88, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978)); (citing W. Glover, A Practical Treatise on the Law of Municipal Corporations 41 (1837)) ("[m]unicipal corporations have, as an attribute necessarily and inseparably incident to every corporation, the ability to sue and be sued, . . . and do all other acts as natural persons may") (internal quotations omitted).
Consequently, the Court finds the phrase "any . . . corporation" to be unambiguous on its face. Ordinarily, where the text of a Congressional statute is unambiguous, judicial inquiry is complete. Burlington Northern, 481 U.S. at 461, 107 S.Ct. 1855; see also BedRoc Ltd., LLC v. United States, 541 U.S. 176, 183, 124 S.Ct. 1587, 158 L.Ed.2d 338 (2004) ("The preeminent canon of statutory interpretation requires *655 us to presume that the legislature says in a statute what it means and means in a statute what it says there. Thus, our inquiry begins with the statutory text, and ends there as well if the text is unambiguous.") (internal citation omitted). The Court will nevertheless briefly address the Authority's argument that government entities that are public corporations are such a distinct class that there needs to be explicit evidence of Congressional intent to subject these municipal governmental corporations to liability under a statute which subjects "any corporation" to liability.[3] (Docket No. 57 at 6.)
In the cases the Authority cites for this proposition, however, the courts found substantial evidence, in the statute's legislative history, of Congressional intent to exclude government entities. See Abbott v. Vill. Of Winthrop Harbor, 205 F.3d 976, 980 (7th Cir.2000) (substantial evidence that Congress explicitly intended to exclude government entities from those subjected to liability under the statute); Amati v. City of Woodstock, 829 F.Supp. 998, 1001 (N.D.Ill.1993) (noting that Congress specifically excluded governmental units from the definition of "person" under the statute); In re New York Municipal Securities Litigation, 507 F.Supp. 169, 181 n. 24 (S.D.N.Y.1980) (holding that the term "corporation" did not include "municipal corporations" because it was "wholly inconsistent with the [statute's] legislative history").
There is no evidence in AWPA's legislative history that government entities were intended to be excluded from the Act's provisions. In fact, in the House Report for AWPA,[4] the Education and Labor Committee stated that it intended AWPA's housing provision, as a whole, to "be interpreted with the broadest possible meaning to ensure that the person who owns or controls the facility used as housing for migrant agricultural workers and their families is responsible for maintaining that facility in compliance with all substantive federal and state safety and health standards." H.R. Rep. 97-885 at 17-18, 1982 U.S.C.C.A.N. at 4563-64. Further, where they have intended certain "persons" to be excluded under this Act, Congress did so explicitly, and the Authority does not fall under any of these exceptions. 29 U.S.C. ง 1803(a).[5]
*656 As Plaintiffs point out, the only public entities that are excluded under AWPA are public non-profit educational institutions. (Docket No. 50 at 3); see 29 U.S.C. ง 1803(a)(3)(C). Importantly, nowhere in this list does it exempt government entities such as the Authority.[6]See 29 U.S.C. ง 1803(a). There is an additional exclusion provided specifically by the housing provision of AWPA into which the Authority also does not fit. That exclusion states that its mandates do "not apply to any person who, in the ordinary course of that person's business, regularly provides housing on a commercial basis to the general public and who provides housing to migrant agricultural workers of the same character and on the same or comparable terms and conditions as is provided to the general public." 29 U.S.C. ง 1823(c). This exception applies to persons such as innkeepers, see H.R. 97-885 at 29, 1982 U.S.C.C.A.N. at 4574, and thus, also does not encompass entities like the Authority with respect to the farm labor housing they provide to agricultural workers.
Accordingly, the Court reiterates that the term "person" under AWPA, as it is defined to mean "any . . . corporation," is not ambiguous and includes all public corporations except the public corporations explicitly excluded under AWPA. The *657 Court further concludes that AWPA's full text and legislative history, as well as case-law, are consistent with this finding. Therefore, the Court holds that the Authority, as a public corporation not expressly excluded under AWPA, is subject to liability under AWPA's housing provision.
3. Whether An Employment Relationship Is Necessary Between The "Person" Who Provides Housing Used by Migrant Farmworkers and the Farmworker under AWPA
Defendant next argues that even if the Authority, as a housing authority, does constitute a "person" under the AWPA, (Docket No. 57 at 10), an employment relationship between it and the migrant workers is necessary before it can become liable under the Act's housing provision. (Docket No. 45 at 6-10). Specifically, the Authority argues that there must be some relationship between their provision of housing to the migrant workers and the terms of the farmworkers' employment. (Docket No. 45 at 7-9.) However, neither the language of the Act nor the caselaw that the Authority cites supports this argument.
In fact, caselaw that both parties to this action cite have refused to constrain liability under AWPA's housing provision to employer-provided housing or to situations where some sort of employment relationship exists between the housing provider and the migrant worker. In refusing to do so, these cases are consistent with both (1) the stated intention of Congress that the housing provision section under AWPA "be interpreted with the broadest possible meaning to ensure that the person who owns or controls the facility used as housing for migrant agricultural workers and their families is responsible for maintaining that facility in compliance with all substantive federal and state safety and health standards," H.R. Rep. 97-885 at 17-18, 1982 U.S.C.C.A.N. at 4563-64, and (2) caselaw holding that since "AWPA is a remedial statute[,][it] should be construed broadly to effect its humanitarian purpose,"[7]Caro-Galvan v. Curtis Richardson, Inc., 993 F.2d 1500, 1505, 1511 & n. 25 (11th Cir.1993) (restricting its analysis under AWPA to employer-provided migrant worker housing because that situation was before the court, but at the same time, explicitly refusing to address non-employer provided housing situations as that issue was not before the court). Accord Castillo v. Case Farms of Ohio, Inc., 96 F.Supp.2d 578, 613-14 (W.D.Tex.1999) ("unlike most other provisions of the AWPA, the housing provisions hold liable not only `agricultural employers' and `farm labor contractors' for violations, but also any person, including private landlords, who owns or controls housing. . . . [T]he housing provisions of the AWPA include landlords in the list of potentially liable entities. . . . [A]ny entity that owns or controls migrant housing can be held liable under the AWPA.") (emphasis added); Howard v. Malcolm, 629 F.Supp. 952, 954 (E.D.N.C.1986) (holding a non-employer owner of property liable under AWPA's housing provision, where the non-employer had rented the property to a farm labor contractor, because the property was used as housing for migrant agricultural workers, stating that "Congress obviously intended to apply the AWPA to non-employers when selecting their statutory wording to include `each person,' not simply `each agricultural employer'").
*658 Because there is no support for the Authority's argument that the housing provision of AWPA requires an employment relationship between the housing provider and the migrant worker either in the clear language of the statute or under caselaw, the Court therefore finds that the Authority is subject to liability under AWPA's housing provision even though the Authority does not have an employment relationship with Plaintiffs.
4. Plaintiff UFW's Standing
In the Authority's Motion to Dismiss, they also argue that Plaintiff UFW lacks prudential or statutory standing, both as an organization and on behalf of its members, to sue the Authority under either AWPA or the FHA. (Docket No. 45 at 11-17.) In their Response, the UFW argues that it does have standing to sue, both on its own, under principles of organizational standing, and on behalf of its affected members, under principles of associational standing.[8] (Docket No. 50 at 6-11.)
Both AWPA and the FHA vests a person who has been "aggrieved" under the statute with a private cause of action. See 29 U.S.C. ง 1854(a) (AWPA states that [a]ny person aggrieved by a violation of this Act or any regulation under this Act by a farm labor contractor, agricultural employer, agricultural association, or other person may file suit in any district court of the United States having jurisdiction of the parties . . ."); 42 U.S.C. ง 3613(a)(1)(A) (the FHA states that "[a]n aggrieved person may commence a civil action in an appropriate United States district court or State court . . ."). As an alleged "person aggrieved," the UFW brings a private cause of action in this Court for violations of AWPA and the FHA, and seeks declaratory and injunctive relief from the Court for these alleged violations. (See Docket No. 43 ถ 7.1(c).)
Standing is a "threshold question in every federal case, determining the power of the court to entertain the suit." Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed2d 343 (1975). It is a question of whether the plaintiff has made out a "case or controversy" between himself and the defendant within the meaning of Article III to the United States Constitution. Id. This Court finds, and both parties concede, that the UFW's standing as an "aggrieved person" under AWPA and the FHA should be analyzed pursuant to the standing requirements under Article III. (Docket Nos. 45 at 11-17, and 50 at 6-11); See, e.g., Ass'n of Community Orgs. for Reform Now v. Fowler, 178 F.3d 350, 363-64 (5th Cir.1999) (analyzing the undefined term "party aggrieved," in which the court recognized that "history associates the word aggrieved with a congressional intent to cast the standing net broadlyโ beyond the common-law interests and substantive statutory rights upon which prudential *659 standing traditionally rested.") (internal citation omitted).
To establish whether an organization has standing in its own right, the Court conducts the same inquiry as in the case of an individual: "Has the plaintiff alleged such a personal stake in the outcome of the controversy as to warrant his invocation of federal-court jurisdiction?" Havens Realty Corp. v. Coleman, 455 U.S. 363, 378-79, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982) (internal citation omitted). For a plaintiff to demonstrate such a personal stake, he must satisfy three elements which comprise the Article III constitutional minimum for establishing standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Louisiana ACORN Fair Housing v. LeBlanc, 211 F.3d 298, 304 (5th Cir. 2000).
First, the plaintiff must allege that he has suffered an "injury in fact," an invasion of a legally-protected interest that is (a) concrete and particularized (particularized means that the injury must affect the plaintiff in a personal and individual way), and (b) actual or imminent, not conjectural or hypothetical. Lujan, 504 U.S. at 560-61 & n. 1, 112 S.Ct. 2130. Second, there must be a causal connection between the injury and the conduct complained of, meaning that the injury must be fairly traceable to the challenged action of the defendant. Id. at 560, 112 S.Ct. 2130. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Id. at 561, 112 S.Ct. 2130.
With respect to the first two elements, the Supreme Court has held that an organization has suffered an injury in fact caused by a defendant where that organization's ability to provide counseling and referral services has been impaired, and this impairment was caused by the defendant's actions. Havens, 455 U.S. at 379, 102 S.Ct. 1114. In Havens, the plaintiff was a nonprofit corporation whose purpose was to promote equal opportunity housing in a city in Virginia. Id at 368, 102 S.Ct. 1114. Its activities included the operation of a housing counseling service, and the investigation and referral of complaints concerning housing discrimination. Id. at 369, 102 S.Ct. 1114. The plaintiff alleged that its purpose as an organization had been frustrated by the defendant realty corporation's racial steering practices[9] in its efforts to assist equal access to housing through its counseling and other referral services, and that there was an attendant drain on its resources. Id. at 369, 379, 102 S.Ct. 1114.
The Supreme Court held that if the plaintiff had in fact been so frustrated in its efforts by the defendant's actions, then "there can be no question that the organization ha[d] suffered [an] injury in fact." Id. at 379, 102 S.Ct. 1114. The Supreme Court held that "[s]uch concrete and demonstrable injury to the organization's activitiesโwith the consequent drain on the organization's resourcesโconstitute[d] far more than simply a setback to the organization's abstract social interests." Id.; Accord ACORN Fair Housing, 211 F.3d at 305 ("an organization could have standing if it had proven a drain on its resources resulting from counteracting the effects of the defendant's actions.") (internal citation omitted).
Similarly, in Plaintiffs' Second Amended Complaint, Plaintiff UFW allegdential *660 that it is a nonprofit organization and that many of its farm worker members regularly rely on fair labor housing programsโsuch as those operated by Defendant Floydada Housing Authorityโfor housing in Texas. (Docket No. 43 ถ 3.2.) The UFW's mission is to help farm workers find adequate housing and it "actively and consistently advocate[s] for better treatment of farm workers [with respect to] . . . housing." (Docket No. 50, Flores Aff. ถ 2.)
The UFW claims, in their Response, that it "has devoted resources and time to try to correct the deficiencies of farm labor housing in Texas" on behalf of its members. (Docket No. 50, Flores Aff. ถ 3.) These deficiencies include inadequate housing conditions and discriminatory treatment of the farm workers with respect to that housing. (Id. at ถ 3; Docket No. 43 ถถ 4.13, 5.8, 5.9.) The UFW claims that the burden of correcting these deficiencies "has prevented UFW from addressing other priorities, including [seeking to improve] poor wages, [and access] to workers compensation and . . . health care for [the] [farm] workers." (Flores Aff. ถ 3.) Furthermore, the UFW's "inability to improve housing conditions for farm workers in [the Texas Panhandle area, which includes the City of Floydada] has affected the organization's ability to make an impact for [its] members, and [has] harmed the UFW as an organization." Id. at ถ 4. If the VFW's claims prove trueโthat their organizational goals have been so frustrated and its resources so drained as a result of the Authority's alleged, violation of both AWPA and the FHAโthen the UFW has suffered an injury in fact its own right sufficient to satisfy the first two elements of constitutional standing.
With respect to the third element, the Court finds that the UFW's injury will be redressed if the Court enjoins the defendant's actions pursuant to the UFW's request for declaratory and injunctive relief. (See Docket No. 43 ถ 7.1(c).) Accordingly, the Court concludes that the UFW has standing to sue the Authority it its own right pursuant to Article III's constitutional standing requirements.
Under principles of associational standing, "an association has standing to bring suit on behalf of its members when: (1) its members would otherwise have standing to sue in their own right, (2) the interests it seeks to protect are germane to the organization's purpose, and (3) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977).
With respect to the first element, the UFW can demonstrate that its members have standing to sue in their own right by showing that the three constitutional requirements for standing, noted above, have been metโthe members suffered an injury in fact, that injury was caused by the Authority's actions, and granting the requested relief will redress this injury. Plaintiff UFW alleges that some of its members have occupied the Authority's farm labor housing facilities over the years, and are eligible to and intend to reside in these units in the future. (Docket No. 43 ถ 4.6, Docket No. 50 at 9-10.) The members' injury is both the poor condition of this housing and the discriminatory treatment they received due to the Authority's failure to adhere to AWPA and the FHA. (Docket No. 43 ถ 4.13, 5.8, 5.9.) This injury will be redressed if the Court enjoins the Authority's actions pursuant to the UFW's request for declaratory and injunctive relief. (See Docket No. 43 ถ 7.1(c).) Accordingly, this Court finds *661 that the first element of associational standing has been satisfied.
With respect to the second element, the UFW alleges that their organizational "mission is to help farm workers seek improved working conditions, including housing." (Flores Aff. ถ 13.) Specifically, the UFW alleges that it "actively and consistently advocate[s] for better, treatment of farm workers [with respect to] better wages, working conditions and housing." Id. at ถ 2. In fact, they allege that "[a]dvocacy for farm worker[s] [who seek adequate] housing lies at the core of the UFW's organizational purpose." Id. at ถ 3. As noted above, the UFW's members are trying to protect their interest in the adequacy of the Authority's farm labor housing as well as their interest in receiving equal treatment with respect to this housing. The UFW alleges that it seeks to protect these interests and that their advocacy of adequate farm labor housing for farm workers and better treatment for them with respect to such housing lies at the core of their organizational purpose. Therefore, this Court finds that the second element of associational standing is satisfied.
With respect to the third element, the Supreme Court has held that "whether an association has standing to invoke the court's remedial powers on behalf of its members depends in substantial measure on the nature of the relief sought." Warth v. Seldin, 422 U.S. 490, 515, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). In Warth, the Supreme Court stated that if "the association seeks a declaration, injunction, or some other form of prospective relief, it can reasonably be supposed that the remedy, if granted, will inure to the benefit of those members of the association actually injured." Id. In fact, the Supreme Court noted that "in all cases in which we have expressly recognized standing in associations to represent their members, the relief sought has been of this kind." Id. Here, the UFW seeks declaratory and injunctive relief for the Authority's alleged violations of AWPA and the FHA. Therefore, granting this relief will benefit all members of the UFW by redressing their injuries allegedly caused by the Authority. Finally, the UFW is an appropriate representative of its members and is entitled to invoke the court's jurisdiction because the nature of its claims does not make the individual participation of each injured party indispensable to the proper resolution of the case. Warth, 422 U.S. at 511, 95 S.Ct. 2197.
RECOMMENDATION
The Magistrate Court recommends that the District Court DENY the Defendant's motion to dismiss (Docket No. 45).
WARNINGS
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir.1987) (quoting Nettles v. Wainwright, 677 F.2d 404, 410 n. 8 (5th Cir. 1982) (en bane)).
A party's failure to file written objections, to the proposed findings and recommendations contained in this Report within ten (10) days after being served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations and, except upon grounds of plain error, shall bar the party from appellate review of proposed factual findings and legal conclusions accepted by the District Court to which no objections were filed. *662 See 28 U.S.C. ง 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53, 106 S.Ct. 466, 88 L.E d.2d 435 (1985); Douglass v. United Services Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir.1996) (en bane).
The Clerk is directed to send a copy of this Report and Recommendation by certified mail, or other verifiable means, to all parties.
NOTES
[1] The individual Plaintiffs also filed claims under Texas state law for violations of their lease and the Texas Habitability Statute. Those claims are not addressed in this report and recommendation.
[2] Congress "intends that the language of this and the other protections provided by [AWPA], be given their plain meaning." H.R. Rep. 97-885, at 13, as reprinted in 1982 U.S.C.C.A.N. 4547, 4559.
[3] The Authority also contends that the Court should refer to the Dictionary Act's default definition of "person," at 1 U.S.C. ง 1, which the Authority argues does not include government entities. (Docket No. 57 at 6-10.) The Court finds referral to the Dictionary Act inapposite here. Because the Court has found that the definition of "person," as defined under AWPA, is unambiguous, there is no need to review a default definition.
[4] No Senate Report was submitted for the AWPA legislation. H.R. Rep. 97-885, 1982 U.S.C.C.A.N. 4547.
[5] 29 U.S.C. ง 1803(a) states that the following persons are not subject to the AWPA:
(1) Family business exemption. Any individual who engages in a farm labor contracting activity on behalf of a farm, processing establishment, seed conditioning establishment, cannery, gin, packing shed, or nursery, which is owned or operated exclusively by such individual or, an immediate family member of such individual, if such activities are performed only for such operation and exclusively by such individual or an immediate family member, but without regard to whether such individual has incorporated or otherwise organized for business purposes.
(2) Small business exemption. Any person, other than a farm labor contractor, for whom the man-days exemption for agricultural labor provided under section 13(a)(6)(A) of the Fair Labor Standards Act of 1938 (29 U.S.C. ง 213(a)(6)(A)) is applicable.
(3) Other exemptions.
(A) Any common carrier which would be a farm labor contractor solely because the carrier is engaged in the farm labor contracting activity of transporting any migrant or seasonal agricultural worker.
(B) Any labor organization, as defined in section 2(5) of the Labor Management Relations Act (29 U.S.C. ง 152(5)) (without regard to the exclusion of agricultural employees in that Act [29 U.S.C. ง 141-197] or as defined under applicable State labor relations law).
(C) Any nonprofit charitable organization or public or private nonprofit educational institution.
(D) Any person who engages in any farm labor contracting activity solely within a twenty-five mile intrastate radius of such person's permanent place of residence and for not more than thirteen weeks per year.
(E) Any custom combine, hay harvesting, or sheep shearing operation.
(F) Any custom poultry harvesting, breeding, debeaking, desexing, or health service operation provided the employees of the operation are not regularly required to be away from their permanent place of residence other than during their normal working hours.
(G) (i) Any person whose principal occupation or business is not agricultural employment, when supplying full-time students or other individuals whose principal occupation is not agricultural employment to detassel, rogue, or otherwise engage in the production of seed and to engage in related and incidental agricultural employment, unless such full-time students or other individuals are required to be away from their permanent place of residence overnight or there are individuals under eighteen years of age who are providing transportation on behalf of such person.
(ii) Any person to the extent he is supplied with students or other individuals for agricultural employment in accordance with clause (i) of this subparagraph by a person who is exempt under such clause.
(H) (i) Any person whose principal occupation or business is not agricultural employment, when supplying full-time students or other individuals whose principal occupation is not agricultural employment to string or harvest shade grown tobacco and to engage in related and incidental agricultural employment, unless there are individuals under eighteen years of age who are providing transportation on behalf of such person.
(ii) Any person to the extent he is supplied with students or other individuals for agricultural employment in accordance with clause (i) of this subparagraph by a person who is exempt under such clause.
(I) Any employee of any person described in subparagraphs (A) through (H) when performing farm labor contracting activities exclusively for such person.
[6] In fact, the Supreme Court in Tennessee Valley Authority v. Hill, 437 U.S. 153, 188, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978) used the interpretative canon expression unius est exclusio alterius (the expression of one thing implies the exclusion of another) to conclude that where Congress enumerated a list of exemptions under a statute (there, the Endangered Species Act), that list was exclusive, and that since there was no exemption for federal agencies, Congress did not intend to exempt them.
[7] Referring to the fact that AWPA was enacted, in large part, to remedy the failure of its predecessor (the Farm Labor Contractor Registration Act of 1963) to protect agricultural workers from exploitation.
[8] For purposes of ruling on a motion to dismiss for lack of standing, the Court must both accept as true all material allegations of the complaint and construe the complaint in favor of the complaining party, but may also consider subsequent discovery, including affidavits submitted by the parties and further particularized allegations of fact deemed supportive of the plaintiff's standing, in order to illuminate the allegations in the complaint and aid the Court in resolving the standing question. See Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); Spann v. Colonial Village, Inc., 899 F.2d 24, 28 n. 1 (D.C.Cir.1990) (citing Warth, 422 U.S. at 501, 95 S.Ct. 2197 and Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 95, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979)). Accordingly, this Court considers the affidavit of Rebecca Flores attached to Plaintiffs' response in opposition to the Authority's motion to dismiss for purposes of the standing issue. (Docket No. 50.)
[9] "Racial steering" refers to segregating people into available housing in different neighborhoods based on the racial or ethnic group to which they belong. Havens, 455 U.S. at 366 & n. 1, 102 S.Ct. 1114.
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85 F.3d 624
Pailletv.Freeman*
NO. 95-20470
United States Court of Appeals,Fifth Circuit.
May 01, 1996
Appeal From: S.D.Tex., No. CA-H-93-3379
1
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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} |
112 S.W.3d 616 (2003)
EL PASO PRODUCTION COMPANY, Appellant,
v.
VALENCE OPERATING COMPANY, Appellee.
No. 01-01-00195-CV.
Court of Appeals of Texas, Houston (1st Dist.).
June 12, 2003.
Rehearing Overruled July 25, 2003.
*618 Jefferson Hunt Read, Oldenettel & Associates, Houston, for Appellant.
Michael D. Conner, Hirsch & Westheimer, P.C., Houston, for Appellee.
Panel consists of Justices NUCHIA, JENNINGS, and DUGGAN.[*]
OPINION ON REHEARING
SAM NUCHIA, Justice.
We deny appellee's motion for rehearing. However, we withdraw our opinion issued March 20, 2003 and issue this opinion in its place.
El Paso Production Company, the successor in interest to Sonat Exploration Company (together, Sonat), owned a working interest in the Holmes A-1 Well (the well) in Freestone County, Texas. Sonat sued appellee, Valence Operating Company (Valence), for breach of a joint operating agreement (the JOA) under which Valence was the operator and Sonat was one of the non-operators. After a jury trial, the trial court entered a take-nothing judgment against Sonat, and Sonat appealed. We reverse and remand.
BACKGROUND
Texas Oil & Gas Corporation and the owners of oil and gas leases and interests entered into a JOA for the exploration and production of oil and gas from a 680-acre *619 contract area in Freestone County. The well was drilled on that contract area under the JOA. The JOA provided that, if any party to the agreement desired to rework, deepen, or plug the well that was drilled at the parties' joint expense,
[That party] shall give the other parties written notice of the proposed operation, specifying the work to be performed, the location, proposed depth, objective formation and the estimated cost of the operation. The parties receiving such a notice shall have thirty (30) days after receipt of the notice within which to notify the parties wishing to do the work whether they elect to participate in the cost of the proposed operation.
The JOA further provided that the parties electing to participate in the proposed operation (consenting parties) would receive, in proportion to their respective interest, the share of production of any party not electing to participate (non-consenting parties) until the non-consenting parties' share was equal to "400% of that portion of the costs and expenses of drilling, reworking, deepening, or plugging back ... which would have been chargeable to such non-consenting party if it had participated therein."
Regarding the sale of the oil and gas produced, the JOA granted each party the right to take its proportionate share in kind. In addition, the JOA provided,
Operator shall have the right, subject to the revocation at will by the party owning it, but not the obligation, to purchase such oil and gas or sell it to others at any time and from time to time, for the account of the non-taking party at the best price obtainable....
The JOA also provided, under "Maintenance of Uniform Interest,"
For the purpose of maintaining uniformity of ownership in the oil and gas leasehold interests covered by this agreement, and notwithstanding any other provisions to the contrary, no party shall sell, encumber, transfer or make other disposition of its interest in the leases embraced within the Contract Area and in wells, equipment and production unless such disposition covers either:
1. the entire interest of the party in all leases and equipment and production; or
2. an equal undivided interest in all leases and equipment and production in the Contract Area.
Every such sale, encumbrance, transfer or other disposition made by any party shall be made expressly subject to this agreement, and shall be made without prejudice to the right of the other parties.
The JOA included a Gas Balancing Agreement, which provided for any period when a party had no market for its share of gas, its purchaser was unable to take the gas, or the party failed to take the gas. In that event, the other parties were entitled to produce each month 100% of the allowable gas production, and each of those parties was to receive its pro rata share. The party who was unable to take or market its share "shall be credited with gas in storage equal to its share of the gas produced," and the operator was to "maintain a current account of the gas balance between the parties...." When the party began to take its share of the gas, the party could take, in addition to its share, 25% of each "over-produced party's share of gas produced." If production permanently ceased before the accounts were balanced, the accounts were to be balanced through a monetary settlement.
Valence succeeded to the rights of Texas Oil & Gas Corporation, which was the operator under the JOA. Sonat acquired a *620 17.58407% non-operating working interest in the well. Houston Lighting & Power Company (HL & P) was, and is, the owner of the surface of the land.
In 1993, HL & P, needing to enlarge its ash disposal area, began negotiations with Valence to acquire access rights to a tract of land within the unit. The negotiations were unsuccessful, and HL & P informed Valence that HL & P would pursue efforts to purchase rights of the individual mineral interest owners and would also proceed with a condemnation action.
HL & P offered Sonat $204,000 for the release of Sonat's surface rights to a 91-acre tract at the well site. Sonat accepted the offer and, on November 14, 1994, executed the following release:
That the undersigned, who owns or claims a working interest or leasehold estate in the mineral estate presently being produced in the Marcus Holmes "A" Gas Unit ... hereby: 1) releases Houston Lighting & Power Company ("HL & P") from any and all claims for compensation ... directly or indirectly resulting from the acquisition by HL & P of the right to utilize the surface of that certain 91.217 acre tract of land ... and 2) quitclaims to HL & P all of my right, title and interest, if any, to directly or indirectly utilize or authorize the utilization of any portion of the surface of the Tract for the exploration, development or production of the underlying mineral estate.
The undersigned further, to the extent possible under the terms of that certain Operating Agreement dated October 11, 1979 between Texas Oil & Gas Corporation, as Operator, and Seneca Resources, assign to HL & P the right to cause or otherwise authorize the Holmes A# 1 Gas Well, which is presently being operated on the surface of the tract, to be plugged and abandoned, provided that such well shall not be plugged and abandoned prior to December 31, 1995.
This document transfers no interest whatsoever in the oil, gas or other minerals underlying the Tract, or the right to lease same or participate in any of the production of these minerals, whether by royalty or otherwise, all of same being expressly excepted from this release.
There is further excepted from this document the right and privilege of developing and producing the minerals underlying the Tract by pooling, unitization, directional drilling or similar means so long as HL & P's use of the surface of the Tract is not disturbed thereby.
This document is subject to oil and gas leases currently in effect.
In a letter to Sonat dated August 12, 1996, Kenneth Cummings, a landman with Valence, referenced the release and informed Sonat,
Valence now considers you as no longer having an interest in production from the well.
Within the next two weeks, Valence plans to workover the Holmes A-1. Due to the terms of the "Release," we can no longer consider you a working interest owner.
Note that this letter is intended merely as a courtesy notification of our upcoming operation. Please advise if you have any questions.
On April 4, 1997, Mark Robinson made the following reply on behalf of Sonat:
Your position in this regard was so absurd that I thought you must be joking. Sonat's accounting personnel now tell me that it was no joke.
Accordingly, please be advised that unless Valence agrees to credit Sonat with its working interest in the Holmes A 1 within ten (10) days from the date of *621 this letter, Sonat is going to file suit to have its interest judicially recognized, all without further notice to you. Of course, Sonat is willing to pay for its share of the costs and expenses associated with whatever work Valence has done on the Holmes A 1 since Sonat last received an AFE from Valence if you will send me a detailed listing of such costs and expenses.
Sonat sued Valence, asserting causes of action for conversion, breach of contract, breach of fiduciary duty, money had and received, unjust enrichment, fraud, misapplication of fiduciary property, and theft and, in addition, requested an accounting. Valence asserted a counterclaim for breach of contract, tortious interference, breach of fiduciary duty, unjust enrichment, money had and received, and conspiracy to defraud and also requested an accounting and declaratory relief.
The trial court granted a directed verdict in favor of Sonat on all of Valence's claims against Sonat, based on the expiration of the statute of limitations, except for Valence's request for declaratory relief. The trial court also granted a directed verdict in favor of Valence on all of Sonat's claims against Valence except for Sonat's breach-of-contract claim. The case was tried to a jury, which found that (1) Valence breached the agreement, (2) Sonat repudiated the agreement and waived the right to enforce the agreement, (3) Valence was excused from further performance under the agreement, and (4) Sonat failed to consent to workover operations at the well. The jury found that a negative $66,192 would compensate Sonat for damages resulting from Valence's breach and found $25,000 in reasonable and necessary attorney's fees for each party.
In its appeal, Sonat challenges the jury's findings on repudiation, waiver, failure to consent, and damages. Sonat also complains of the directed verdict on Sonat's claims for conversion and breach of fiduciary duty, the trial court's declaration that Sonat had a legal duty to market its own gas, the court's award of attorney's fees to Valence, and the court's failure to award Sonat prejudgment interest and to order an accounting.
DISCUSSION
1. Repudiation
In its first two issues, Sonat contends that the evidence is legally and factually insufficient to support the jury's answer to jury question number three, which asked,
Do you find, by a preponderance of the evidence that Sonat repudiated the Operating Agreement such that Valence did not need to seek Sonat's consent to the 1966 workover operations at the Holmes A-1 well?
"Repudiation" is a positive and unconditional refusal to perform the contract in the future, expressed either before performance is due or after partial performance.
Answer "Yes" or "No"
The jury answered "Yes."
To constitute a repudiation, a party to a contract must have absolutely and unconditionally refused to perform the contract without just excuse. Van Polen v. Wisch, 23 S.W.3d 510, 516 (Tex.App.-Houston [1st Dist.] 2000, pet. denied). Upon a party's repudiation of a contract, the nonrepudiating party may treat the repudiation as a breach or may continue to perform under the contract and await the time of the agreed-upon performance. Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 211 (Tex.1999). The non-repudiating party must either rescind the contract or continue to perform under it; it cannot do both. Bumb v. InterComp *622 Technologies, L.L.C., 64 S.W.3d 123, 125 (Tex.App.-Houston [14th Dist.] 2001, no pet.).
Valence asserted repudiation as an affirmative defense. Therefore, Valence had the burden of proving that Sonat unconditionally refused to perform the contract. See Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex.1988).
Valence argues that Sonat repudiated the JOA by executing the release because Sonat "gave up all right it had to authorize Valence to rework" the well and "sold its right to produce the `underlying minerals.'" Valence further argues that "it was impossible for Sonat to legally discharge its obligation under the JOA to contribute its proportionate share of costs for any development or production out of Holmes A 1." Valence does not direct us to any specific language in the JOA or the release to support its contention, nor does Valence cite any authority to support its "legal impossibility" argument. Valence also asserts that it did not rescind the contract, as it was entitled to do in response to Sonat's repudiation, but rather, "continued to perform under the JOA."
The release executed by Sonat released HL & P from claims for compensation resulting from HL & P's acquisition of rights to use the surface of the land and quitclaimed to HL & P Sonat's rights to use the surface for exploration, development, or production of the mineral estate. However, the assignment of the right to plug and abandon the well was made only to the extent possible under the terms of the JOA. The release explicitly did not transfer any interest in the oil, gas, or other minerals underlying the tract or the right to participate in any production. The release also reserved to Sonat the right of developing and producing the minerals by any means that did not interfere with HL & P's use of the surface, and the release was made subject to the current oil and gas leases on the tract.
The release did not convey Sonat's interest in the mineral estate, nor did it transfer any rights in the gas produced at the well. Furthermore, the release did not in any way interfere with Valence's activities as operator. In fact, by Valence's own admission, Valence has continued to produce gas from the well up to the time of trial. We hold that the release was no evidence that Sonat positively and unconditionally refused to perform its obligations under the JOA. We further hold that the execution of the release was not a repudiation of the JOA by Sonat.
We sustain Sonat's first issue (legal sufficiency) and, thus, need not reach its second issue (factual sufficiency).
2. Waiver
In its third and fourth issues, Sonat challenges the legal and factual sufficiency of the evidence to support the jury's answer to question number four, which asked,
Do you find that Sonat, by conveying the interest of HL & P evidenced by the Release marked as Plaintiff's Exhibit 37, waived its right to demand compliance by Valence with the Joint Operating Agreement marked as Plaintiff's Exhibit 1?
"Waiver" is the intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right. Waiver also occurs when a person, who has full knowledge of material facts, acts or fails to act upon rights which he or she legally holds, and such act or failure to act is inconsistent with that right or intention to rely upon that right.
*623 Answer "Yes" or "No"
The jury answered "Yes."
Valence asserted waiver as an affirmative defense. Therefore, Valence had the burden of establishing all the elements of waiver. See Woods, 769 S.W.2d at 517. Waiver is the intentional relinquishment of a known right or intentional conduct inconsistent with the intent to claim that right. Robinson v. Robinson, 961 S.W.2d 292, 300 (Tex.App.-Houston [1st Dist.] 1997, no writ).
Valence asserts that Sonat's execution of the release was a sale of Sonat's right to explore, develop, and produce gas from the well, and that Sonat therefore waived its right to demand compliance with the JOA to the extent of any matter pertaining to exploration, development, or production of the "released" tract. We do not agree.
The release did not give up any right to participate in the oil and gas production of the well. The release stated that it was subject to the oil and gas leases currently in effect. The release quitclaimed to HL & P Sonat's rights to the surface for exploration, development, or production of the underlying mineral estate. However, it explicitly did not transfer any interest in that mineral estate. Cummings testified that only the operator needed access to the well. We conclude that the release is no evidence that Sonat intentionally relinquished its right to demand that Valence comply with the JOA.
We sustain Sonat's third issue (legal sufficiency) and, thus, need not reach its fourth issue (factual sufficiency).
3. Non-Consent
In its fifth issue, Sonat contends that the trial court erred in submitting question number six to the jury because Valence did not comply with the notice provision of the JOA for the rework of the well and, therefore, that Sonat could not be a non-consenting party. We construe this issue as a challenge to the legal sufficiency of the evidence to support the jury's answer to question number 6, which asked, "Did Sonat fail to consent to the 1996 workover operations at the Holmes A-1 well?" The jury answered "Yes."
By the terms of the JOA, a party who wanted to rework the well at the joint expense of all parties was required to give written notice of the proposed operation to the other parties. This notice was required to specify the work to be performed, the location, the proposed depth, the objective formation, and the estimated cost. A party who received such notice had 30 days in which to give notice of its election to participate. A party who did not give notice of participation became a non-consenting party and was subject to a 400% penalty if the reworked well produced in paying quantities. There was no provision in the JOA for the imposition of the penalty if the initial required notice was not given.
At trial, when Steve Manning, a vice-president of Valence, was asked whether Valence had provided the required notice to Sonat, he replied, "Of course not." On appeal, Valence contends that, because of Sonat's actions, Sonat was "contractually precluded from giving effective consent to walk up to Holmes A-1 for the purpose of any rework operation."
Even if Valence's contention is correct, Sonat's failure to consent to the rework operation cannot result in the imposition of any of the contractual penalties because the obligation to give timely notice of consent is triggered only by the required notice of proposed operations. Because the evidence conclusively established that Valence did not give such notice, it was *624 error for the trial court to submit jury question number six.
We sustain Sonat's fifth issue.[1]
4. Damages
In its seventh and eighth issues, Sonat challenges the legal and factual sufficiency of the evidence to support the jury's answer to question number two, which was predicated on the jury's finding in question number one that Valence had breached the JOA. Question number two asked,
What sum of money, if any, if now paid in cash, would fairly and reasonably compensate Sonat Exploration Company for its damages, if any, that resulted from such a breach?
Do not increase or reduce the amount in one answer because of your answer to any other question about damages. Do not speculate about what any party's ultimate recovery may or may not be. Any recovery will be determined by the court when it applies the law to your answers at the time of judgment. Do not add any amount for interest on damages, if any.
Answer in dollars and cents for damages, if any.
The jury's response shows the following calculations handwritten below the answer line:
Gross Income 330,042
Expenses includes rework $89,000
______________
Net Income 200,808
Rework Penalty
______________
Answer
The answer is written as $66,192.[2]
James Shows, a certified public accountant who testified for Sonat, testified that he calculated that, from August 1996 to the present time, Valence owed Sonat $200,808.13. Shows further testified that he and Walter Sherr, chief executive officer of Valence, came to an agreement that Shows's number was correct. Valence did not dispute Shows's calculations at trial and does not dispute it on appeal. We hold that there is no evidence to support the jury's answer to question number two.
In its motion for rehearing, Valence contends that the Gas Balancing Agreement provides the remedy for Valence's breach of contract. Valence argues that, consistent with the Gas Balancing Agreement, a "money settlement" can be made only after cessation of production, which Valence characterizes as a "condition precedent" to a money settlement.
*625 The Gas Balancing Agreement does not purport to provide the remedy for breach of contract. It provides a method of balancing the gas account in the event that any party to the JOA fails to take its share of gas. Sonat did not fail to take its gas. Sonat was prevented from taking the gas by Valence. Furthermore, Sonat was not suing for a "money settlement," but for monetary damages for breach of contract and other causes of action.
We sustain Sonat's seventh issue (legal sufficiency) and need not reach its eighth issue (factual sufficiency).
5. Directed Verdict: Conversion
In its tenth issue, Sonat contends that the trial court erred in granting Valence a directed verdict on Sonat's claim for conversion. Sonat argues that it pleaded, presented evidence of, and requested a jury question on its cause of action for conversion. The trial court granted Valence's motion for directed verdict on the conversion cause of action without explanation and denied Sonat's requested jury submission on the issue.
To establish a claim for conversion, a plaintiff must show (1) title, (2) right to possession, and (3) a demand for return of the property unless the possessor's acts manifest a clear repudiation of the plaintiff's rights. Schwartz v. Pinnacle Communications, 944 S.W.2d 427, 432 (Tex. App.-Houston [14th Dist.] 1997, no writ). Sonat argues that it established each of these elements.
Valence appears to contest the first elementtitle. Although Valence admits that Sonat had title to a percentage of the gas in the ground, it argues that Sonat no longer had an interest in production out of the well. Valence also asserts that, because of the JOA's penalty provision for Sonat's non-consent status, "neither gas nor proceeds from the sale of gas have been shown to exist." Thus, Valence argues that Sonat owned the gas, but had no interest in the produced gas, and that Sonat's interest belonged to the consenting parties until the penalty was paid in full. Valence also alludes, without elaboration, to the Gas Balancing Agreement and the trial court's determination that the JOA imposed no duty on Valence to market Sonat's gas.
We have determined, under Sonat's first issue, that Sonat did not repudiate the JOA. Therefore, Sonat had an interest in the produced gas in the same proportion as its interest in the gas in the ground. We have also determined, in Sonat's fifth issue, that Sonat was not a non-consenting party. Therefore, the penalty could not be imposed.
Sonat showed title and right to possession of the produced gas. Sonat also showed its demand for the proceeds of the produced gas in plaintiff's exhibit 39, Sonat's letter demanding that Valence credit Sonat with its working interest in the well. The trial court erroneously granted Valence's motion for directed verdict on Sonat's conversion cause of action.
We sustain Sonat's tenth issue.
6. Directed Verdict: Fiduciary Duty
In its eleventh issue, Sonat contends that the trial court erred in granting a directed verdict for Valence on Sonat's claims for breach of a fiduciary duty.
Although a joint operating agreement does not necessarily create a fiduciary relationship, such a relationship may exist if a special relationship exists between the parties in the form of a partnership, joint venture, or agency relationship. Cone v. Fagadau Energy Corp., 68 S.W.3d 147, 169 (Tex.App.-Eastland 2001, no pet.). The existence of a fiduciary duty *626 is a question of law for the court. Taylor v. GWR Operating Co., 820 S.W.2d 908, 911 (Tex.App.-Houston [1st Dist.] 1991, writ denied). However, the determination of factual issues underlying a fiduciary duty is a question of fact for the fact finder. Id.
In this case, both parties pleaded a cause of action for breach of fiduciary relationship. Sonat produced some evidence, through the testimony of Manning, that Valence marketed gas on behalf of Sonat from November 1994 through August 1996. Thus, whether Valence was acting as an agent for Sonat was a question of fact for the jury to determine. The trial court erroneously granted Valence's motion for directed verdict on Sonat's cause of action for breach of fiduciary duty.
We sustain Sonat's eleventh issue.
7. Legal Duty to Market the Gas
In its fourteenth issue, Sonat contends that the trial court erred by rendering judgment that Valence had "no legal duty to market Sonat's gas." Sonat misstates the trial court's judgment. The judgment provides, "IT IS FURTHER ORDERED, ADJUDGED, JUDICIALLY DECLARED and DECREED that Sonat Exploration Company was legally obligated to market its own gas...." Sonat has not challenged this declaration. The reason, as stated in the judgment, for this declaration was the conclusion that the JOA imposed no legal duty upon Valence to market Sonat's gas. However, to the extent that Sonat challenges the basis for the court's declaration, we conclude that Valence did not have a duty under the JOA to market Sonat's gas.
There were two separate provisions in the JOA for the disposal of the produced gas. The JOA provided that a party could take its production in kind or could separately dispose of its share, but that if it did not, "Operator shall have the right, subject to the revocation at will by the party owning it, but not the obligation, to purchase such oil and gas or sell it to others at any time and from time to time, for the account of the non-taking party." Exhibit C to the JOA, the Gas Balancing Agreement, provided for a party's ownership of its share of the gas in the ground in the event that the party could not or "fail[ed] to" take its share of gas. If production were to permanently cease before the party had taken its share of gas, the Gas Balancing Agreement provided for a money settlement. Thus, the JOA did not create a legal obligation on either the operator or the non-operators to market the gas.
We overrule Sonat's fourteenth issue.
8. Accounting
In its fifteenth issue, Sonat contends that the trial court erred in denying Sonat an accounting. However, Sonat does not specify the period of time the accounting should cover. There is evidence that Sonat and Valence agreed that the gross proceeds that would have been paid by Valence for Sonat's share of the produced gas from November 1994 through August 1996 was $330,042; that Sonat's share of the expenses, including expenses for reworking the well, were $129,234; and that the net proceeds that Valence would have paid Sonat was $200,808.[3] Therefore, it appears that a further accounting through August 1996 *627 was unnecessary. We do not find, in the record, any request for an accounting of the proceeds of production after August 1996. In its motion for new trial, Sonat simply stated, "The trial court erred by not including in the Final Judgment Plaintiff's right to an accounting from Valence Operating Company." This complaint was not sufficiently specific to make the trial court aware of the relief requested. See Tex.R.App. P. 33.1. Thus, the issue is waived.
We overrule Sonat's fifteenth issue.
9. Valence's Issues
Valence asserts two cross-points challenging the legal and factual sufficiency of the evidence to support the jury's finding, in jury question number one, that Valence breached the JOA. In our original opinion, we stated that these issues were waived.
In its motion for rehearing, Valence asserts that, by its take-nothing judgment, the trial court rendered an implied judgment notwithstanding the verdict on the jury's finding that Valence breached the JOA. The record does not support Valence's argument. We find no motion by Valence for judgment notwithstanding the verdict and no motion to disregard the jury's finding in question number one. Therefore, a judgment notwithstanding the verdict would not have been proper. See Tex.R. Civ. P. 301. In its recitations, the judgment stated, "The jury answered ... that the breach of contract damages were a negative amount." In the decretal portion, the judgment decreed "that Sonat Exploration Company shall take nothing on any of its claims herein." This decree was consistent with the jury's findings on breach of contract and damages and, thus, constituted a judgment on the verdict.
Valence filed a motion for entry of judgment, and the trial court signed the judgment as it was submitted by Valence. Valence did not express to the trial court any dissatisfaction with the judgment. To preserve a complaint for review in a cross-point, an appellee must inform the trial court of its dissatisfaction with the judgment. Kenneth Leventhal & Co. v. Reeves, 978 S.W.2d 253, 258-59 n. 6 (Tex. App.-Houston [14th Dist.] 1998, no pet.); Larrumbide v. Doctors Health Facilities, 734 S.W.2d 685, 693 (Tex.App.-Dallas 1987, writ denied). Valence has waived its complaint. Accordingly, we overrule Valence's cross-points.
CONCLUSION
We have sustained Sonat's issues one, three, five, and seven challenging the jury findings regarding repudiation, waiver, failure to consent, and damages. We have also sustained Sonat's issues 10 and 11 complaining about the trial court's directed verdict on Sonat's conversion and fiduciary-duty claims. We have overruled Sonat's fourteenth and fifteenth issues complaining about the trial court's determination of Sonat's legal duty to market its gas and the trial court's failure to order an accounting. Because the issues above dispose of this appeal, we need not reach Sonat's second, fourth, sixth, eighth, ninth, twelfth, or thirteenth issues.
We reverse the judgment of the trial court and remand the cause to the court below for proceedings consistent with this opinion.
NOTES
[*] The Honorable Lee Duggan, Jr., retired Justice, Court of Appeals, First District of Texas at Houston, participating by assignment.
[1] In its sixth issue, Sonat challenges the factual sufficiency of the evidence to support the jury's answer to question number six. However, Sonat briefed only its legal sufficiency issue. In light of our ruling sustaining the legal sufficiency issue, Sonat's failure to brief the factual sufficiency is irrelevant.
[2] It appears from the calculations written under question number two that the jury did not follow the trial court's instruction not to increase or reduce the amount because of an answer to another question. The jury calculated a net income amount that is consistent with the testimony of James Shows, Sonat's accounting expert. It appears that the jury then reduced that amount by applying the 400% penalty, which would have been the result of the jury's answer to question number six. However, we do not consider the jury's handwritten calculations in determining the sufficiency of the evidence to support the jury's answer because, unless there is evidence of misconduct, the jury's reasons for reaching a verdict are irrelevant. See Thomas v. Oldham, 895 S.W.2d 352, 360 (Tex.1995).
[3] Valence argues that there was no basis for any accounting because Sonat's gas remained in the ground by the terms of the Gas Balancing Agreement. However, under the Gas Balancing Agreement, Valence was required to "maintain a current account of the gas balance between the parties and shall furnish all parties hereto monthly statements showing the total quantity of gas produced, used in lease operations, vented or lost, and the total quantity of condensate recovered." Furthermore, under that agreement, Sonat was entitled to take its share and up to 25% of each overproduced party's share until it had recovered its gas and balanced its account. Therefore, the Gas Balancing Agreement did not deprive Sonat of its right to an accounting.
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940 F.Supp. 898 (1996)
Miguel A. APONTE and Belivia S. Aponte, Plaintiffs,
v.
UNITED STATES of America, DEPARTMENT Of the TREASURY, BUREAU OF ALCOHOL, TOBACCO, AND FIREARMS; and Agent William F. Marshall, Defendants.
No. 5:95-CV-839-BO(3).
United States District Court, E.D. North Carolina, Western Division.
September 23, 1996.
*899 Alice C. Stubbs, Raleigh, NC, for plaintiffs.
R.A. Renfer, Jr., Assistant U.S. Attorney, Raleigh, NC, for defendants.
ORDER
TERRENCE WILLIAM BOYLE, District Judge.
This case comes before the Court on defendants' motion to dismiss plaintiffs' action pursuant to Rules 12(b)(1) and (6) of the Federal Rules of Civil Procedure. This Court finds that plaintiffs' exclusive remedy is the FECA; thus, defendants' MOTION is GRANTED.
STATEMENT OF THE CASE
The facts of this case are undisputed. Plaintiffs are Miguel A. Aponte and his wife, Belivia S. Aponte. Miguel Aponte was a deputy sheriff for the Wake County Sheriff's Department. Because Aponte could speak Spanish, he was asked to assist the United States Bureau of Alcohol, Tobacco and Firearms in the execution of a federal search warrant and a federal arrest warrant. The target of these warrants was to be arrested on federal criminal charges for conspiracy to distribute cocaine and heroin.
The warrants were executed on the morning of December 14, 1994. The raid team consisted of six federal agents and Deputy Sheriff Aponte. Once the team had positioned itself at the apartment specified in the warrants, one federal agent knocked on the door and announced, "Federal Agents! We have a search warrant, open the door!" Aponte repeated the announcement in Spanish. The agents then used a master key to open the door. The door only opened about three inches, where it was caught by a chain. The federal agents again announced the order to open the door; and again Aponte repeated in Spanish. When there was still no response, the agents forced the door and announced, "Police! Police Officers! Search warrant, we're coming in!" Aponte repeated in Spanish.
As the raid team entered the apartment, one federal agent lost his balance and fell forward. When the agent tried to regain his balance, his gun went off. As a result, Deputy Aponte was shot in the foot.
Deputy Aponte retired from the Wake County Sheriff's department as of September 19, 1995. He is entitled to North Carolina Workers Compensation due to the disability arising from the gunshot wound to his foot. Aponte also filed for and was granted Federal Workers Compensation. The Department of Labor determined that Aponte was covered under the Federal Employee's Compensation Act (hereinafter "FECA"), under 5 U.S.C. § 8191; and that Aponte was entitled to the total amount of FECA, which is greater than the North Carolina Workers Compensation. 5 U.S.C. § 8192(a).
Instead of accepting FECA compensation, Aponte has filed suit under the Federal Torts Claims Act (hereinafter "FTCA"). Aponte asks for damages in excess of $1,000,000.00, *900 including medical damages, lost wages/earning capacity, loss of use of part of his body, permanent injury and impairment, pain and suffering, emotional distress, loss of consortium, loss of enjoyment, and incidental damages. Aponte's wife, Belivia, has also filed a suit for loss of consortium and loss of enjoyment.
DISCUSSION
The FECA provides explicitly for non-federal employees in situations analogous to that of the plaintiffs. Section 8191 of Title 5 of the United States Code reads:
The benefits of this subchapter are available ... to eligible law enforcement officers ... and their survivors. For the purposes of this subchapter, an eligible officer is any person who determined by the Secretary of Labor in his discretion to have been on any given occasion
(1) a law enforcement officer and to have been engaged on that occasion in the apprehension or attempted apprehension of any person
(A) for the commission of a crime against the United States, or
(B) who at that time was sought by a law enforcement authority of the United States for the commission of a crime against the United States, or ...
and to have been on that occasion not an employee as defined in section 8108(1), and to have sustained on that occasion a personal injury for which the United States would be required under subchapter I of this chapter to pay compensation if he had been on that occasion such an employee engaged in the performance of his duty.
5 U.S.C. § 8191.
Congress enacted Section 8191 in 1968 for the purpose of extending FECA benefits to state and local law enforcement personnel who are injured while collaborating with federal officials in the apprehension of persons committing federal crimes. City of Whittier v. United States Dept. of Justice, 598 F.2d 561, 563 (9th Cir.1979). Essentially, Congress wanted to insure injured local law enforcement officers were entitled to the same benefits that would be available to injured federal employees. See H.R.Rep. No. 567, 90th Cong., 2d Sess. 1 (1968), reprinted in (1968) U.S.Code Cong. & Admin.News 1877.
The uncontested facts of this case clearly show that at the time of Deputy Aponte's injury, he was within the coverage of Section 8191. Aponte was a local law enforcement officer (Wake County Deputy Sheriff); and he was injured while assisting federal agents execute a federal arrest and search warrant. Therefore, Section 8191 is applicable.
The determination of who is entitled to FECA coverage is within the sole discretion of the Secretary of Labor. McDaniel v. United States, 970 F.2d 194, 196-97 (6th Cir.1992). In the instant case, the Secretary of Labor has reviewed Deputy Aponte's injury and has concluded that plaintiffs are covered under the FECA.
The Secretary's determination that the plaintiffs are covered under the FECA is not subject to judicial review. Section 8128(b) of Title 5 states:
The action of the Secretary or his designee in allowing or denying a payment under this subchapter is
(1) final and conclusive for all purposes and with respect to all questions of law and fact; and
(2) not subject to review by another official of the United States or by a court by mandamus or otherwise.
5 U.S.C. § 8128(b).
The Supreme Court has upheld this bar to judicial review. In Southwest Marine v. Gizoni, 502 U.S. 81, 91, 112 S.Ct. 486, 493-94, 116 L.Ed.2d 405 (1991), the Court said that the "FECA contains an unambiguous and comprehensive provision barring any judicial review of the Secretary's determination of FECA coverage ... [therefore] the courts have no jurisdiction over FECA claims where the Secretary or Labor determines that FECA applies." Thus, if a claim is covered by the FECA, the federal courts have no subject matter jurisdiction to entertain the case. See Heilman v. United States, 731 *901 F.2d 1104, 1109 (3rd Cir.1984); Reep v. United States, 557 F.2d 204, 207 (9th Cir.1977); Bailey v. United States, 451 F.2d 963, 965 (5th Cir.1971).
Plaintiffs do not contest the Secretary's determination that they are covered by the FECA. (Plaintiffs' Brief at 2). Plaintiffs argue that Section 8191 of the FECA, which gives coverage to injured officers such as Deputy Aponte, should not be interpreted as being an exclusive remedy. Plaintiffs support this argument with the legislative history of Section 8191. See H.R.Rep. No. 567, 90th Cong., 2d Sess. 1 (1968), reprinted in (1968) U.S.Cong. & Admin.News 1877. Plaintiffs state that "nothing in the legislative history suggests that those officers falling within the purview of Section 8191 are handcuffed to the FECA as their sole remedy against the federal government." (Plaintiffs' Brief at 4). Plaintiffs contend that they have the option of either accepting FECA compensation or pursuing compensation under FTCA. This contention is fatally flawed in two respects. First, it overlooks the purpose and import of the FECA. Second, it misconstrues the government's waiver of sovereign immunity in the FTCA.
The purpose of the FECA indicates that it was intended to be the sole remedy for a person covered by the Act. The FECA was enacted in 1916 for the purpose of establishing a comprehensive program of workers' compensation for federal civilian employees who are injured on the job. Weyerhaeuser Steamship Co. v. United States, 372 U.S. 597, 601, 83 S.Ct. 926, 928-29, 10 L.Ed.2d 1 (1963). The FECA's impetus was "to give injured workers a quicker and more certain recovery than would be available to them under a civil action by providing certain recoverable amounts for employment-related injuries without proof of fault and regardless of an employee's contributory negligence." Wallace v. United States, 669 F.2d 947, 951 n. 3 (4th Cir.1982); See United States v. Demko, 385 U.S. 149, 87 S.Ct. 382, 17 L.Ed.2d 258 (1966); Bradford Electric Co. v. Clapper, 286 U.S. 145, 52 S.Ct. 571, 76 L.Ed. 1026 (1932).
In exchange for quick and certain recovery, injured workers lose the right to sue the government under the FTCA. Lockheed Aircraft Corp. v. United States, 460 U.S. 190, 193-194, 103 S.Ct. 1033, 1036-37, 74 L.Ed.2d 911 (1983); Weyerhaeuser Steamship Co. v. United States, 372 U.S. 597, 83 S.Ct. 926, 10 L.Ed.2d 1 (1963); See H.R.Rep. No. 729, 81st Cong., 1st Sess., 14-15 (1949); S.Rep. No. 836, 81st Cong., 1st Sess., 23 (1949), U.S.Code Cong.Serv.1949, p. 2125. In Lockheed, the Supreme Court said that the Congress by enacting the FECA's exclusive-liability provision "adopted the principle compromise the `quid pro quo' commonly found in workers' compensation legislation: employees are guaranteed the right to receive immediate, fixed benefits, regardless of fault and without need for litigation, but in return they lose the right to sue the Government." 460 U.S. at 193-94, 103 S.Ct. at 1036-37. As a result of this underlying principle, "once an injury falls within the coverage of FECA, its remedies are exclusive and no other claims can be entertained by the court." Jones v. TVA, 948 F.2d 258, 265 (6th Cir.1991).
The exclusivity of FECA coverage has been applied to a situation very analogous to that of Deputy Aponte. In City of Whittier v. United States Dept. of Justice, 598 F.2d 561 (9th Cir., 1979), the City of Whittier claimed to be subrogated to the rights of a local police officer to whom it had paid workmen's compensation benefits for injuries suffered while working in cooperation with the Federal Bureau of Narcotics and Dangerous Drugs in attempting to apprehend suspects. The injuries to the local police officer allegedly stemmed from a gunshot wound inflicted by federal drug enforcement agent during the joint operation. The City of Whittier brought suit under the FTCA alleging negligence of the federal agent. Id. at 562. The Ninth Circuit, upholding summary judgment against the City of Whittier, stated "that with the enactment of section 8191, and the extension of the comprehensive benefits of the FECA to non-federal officers, the Act provides the exclusive remedy for injuries suffered by such officers while participating in federal law enforcement activities." Id. at *902 563. This Court agrees with the Ninth Circuit's determination.
It is true that the legislative history of Section 8191 does not explicitly state that the coverage is an exclusive remedy. However, the legislative history, case law interpretation, and overall purpose of the entire FECA has the effect of leaving no question about Section 8191 being an exclusive remedy for plaintiffs such as the Apontes. Therefore, since the FECA is plaintiffs exclusive remedy and the Secretary of Labor has exclusive authority over FECA matters, this Court does not have subject matter jurisdiction over plaintiffs' claims.
Plaintiffs' contention that the FTCA grants this Court subject matter jurisdiction over this case is also erroneous. The FTCA is only a limited waiver of the United States' sovereign immunity. United States v. Orleans, 425 U.S. 807, 813, 96 S.Ct. 1971, 1975-76, 48 L.Ed.2d 390 (1976). If the United States has not waived is sovereign immunity in a particular circumstance, the Federal Government and its agencies are immune from suit. Loeffler v. Frank, 486 U.S. 549, 554, 108 S.Ct. 1965, 1968-69, 100 L.Ed.2d 549 (1988); Federal Housing Admin. v. Burr, 309 U.S. 242, 244, 60 S.Ct. 488, 490, 84 L.Ed. 724 (1940). In fact, if the United States has not consented to be sued, a court has no jurisdiction to hear such a suit. United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983); United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769-70, 85 L.Ed. 1058 (1941).
Title 5 of the United States Code clearly proclaims that the Unites States has retained its sovereign immunity by granting the right to receive compensation under the FECA:
(c) The liability of the United States or an instrumentality thereof under this subchapter of any extension thereof with respect to the injury or death of an employee is exclusive and instead of all other liability of the United States or the instrumentality to the employee, his legal representative, spouse, dependents, next of kin, and any other person otherwise entitled to recover damages from the United States of the instrumentality because of the injury or death in a direct judicial proceeding, in a civil action, or in admiralty, or by an administrative or judicial proceeding under a workmen's compensation statute or under a Federal tort liability statute.
5 U.S.C. § 8116.
As the statute says, FECA coverage is "exclusive and instead of all other liability of the United States." Id. The Secretary of Labor has determined plaintiffs' claim are covered by the FECA; therefore, plaintiffs' exclusive remedy is the FECA.
In addition, the Secretary's ruling encompasses the emotional injuries, which are a result of the initial injury, claimed by the plaintiffs. See McDaniel v. United States, 970 F.2d 194 (6th Cir.1992) (court ruled that the Secretary of Labor has determined that the FECA covers emotional injuries, and the Secretary has final say as to the scope of the FECA). The Secretary's determination of FECA coverage also includes Mrs. Aponte's particular claims of emotional damage and loss of consortium. See Swafford v. United States, 998 F.2d 837 (10th Cir.1993) (court ruled that an injured party's receipt of FECA compensation precluded spouse's claim for loss of consortium, services, companionship and society).
Lastly, the fact that plaintiffs have not accepted FECA benefits does not nullify the Secretary's determination of FECA coverage. The court in McDaniel stated that if the injury is "of the type intended to be covered [by the FECA], its remedies are exclusive, even if no actual compensation was awarded." 970 F.2d at 194. Thus, regardless of whether plaintiffs decide to accept FECA benefits, plaintiffs will be limited to the exclusive remedy of FECA coverage.
In conclusion, plaintiffs' exclusive remedy is found in the FECA. Plaintiffs have no cause of action under the FTCA. Therefore, defendants' motion to dismiss is GRANTED.
SO ORDERED.
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436 F.3d 1269
The SIERRA CLUB, Petitioner,v.Stephen L. JOHNSON, in his Official Capacity as Administrator of the United States Environmental Protection Agency, United States Environmental Protection Agency, Respondents.Georgia Forestwatch, Petitioner,v.Stephen L. Johnson, in his Official Capacity as Administrator of the United States Environmental Protection Agency, United States Environmental Protection Agency, Respondents.
No. 03-10262.
No. 03-10263.
No. 03-10264.
No. 03-10265.
United States Court of Appeals, Eleventh Circuit.
January 20, 2006.
COPYRIGHT MATERIAL OMITTED Justine Thompson, Curtis A. Cox, GA Ctr. for Law in the Pub. Interest, Atlanta, GA, Lisa L. Barclay, William B. Schultz, Zuckerman Spaeder, LLP, Washington, DC, for the Sierra Club.
Ethan Shenkman, U.S. Dept. of Justice, Ammie Roseman-Orr, Joshua M. Levin, U.S. Dept. of Justice/Env. & Nat. Res. Div., Washington, DC, Ellen A. Rouch, EPA, Atlanta, GA, for Johnson & U.S. EPA.
Diane L. DeShazo, State of GA Dept. of Law, Atlanta, GA, for Envir. Prot. Div., Dept. of Nat. Res., Amicus Curiae.
Petitions for Review of an Order of the United States Environmental Protection Agency.
Before BIRCH, CARNES and FAY, Circuit Judges.
CARNES, Circuit Judge:
1
The Sierra Club and Georgia Forestwatch bring this consolidated petition for review of the Environmental Protection Agency's orders denying their requests that EPA object to four Clean Air Act Title V permits. The Georgia Environmental Protection Division issued these permits to King Finishing, Monroe Power, and Shaw Industries' Plants No. 2 and No. 80.1
2
The Sierra Club contends that EPA is required to object to the King Finishing permit because Georgia EPD failed to implement a mailing list to notify the public of its right to comment on the permit. The Sierra Club and Georgia Forestwatch also contend that EPA must object to all four of the permits because of Georgia EPD's failure to require the permittee facilities to report all of their monitoring data and to provide all relevant information to the public during the comment period.2
I.
3
Navigating through the intricacies of the Clean Air Act is no task for the uninformed or the short-winded. We will focus our beginning discussion on Title V of that Act, because it underlies the issues before us in this appeal.
4
In 1990 Congress amended the Clean Air Act to include Title V. Clean Air Act Amendments of 1990, Pub.L. No. 101-549, §§ 501-507, 104 Stat. 2399, 2635-48 (1990). It requires stationary sources of air pollution such as manufacturing and electricity plants to obtain permits which include emission limitations and other conditions that ensure compliance with the Clean Air Act's air quality control standards. See 42 U.S.C. § 7661a(a). The Title V permit program generally does not impose new substantive air quality control requirements. Instead, in order to ensure compliance with existing requirements, Title V requires permits to contain monitoring, record keeping, reporting, and other conditions. The Title V program strives to "enable the source, States, EPA, and the public to understand better the requirements to which the source is subject, and whether the source is meeting those requirements." Operating Permit Program, 57 Fed.Reg. 32,250, 32,251 (July 21, 1992) (to be codified at 40 C.F.R. pt. 70). The goal is "[i]ncreased source accountability and better enforcement." Id.
5
When state permitting authorities issue Title V permits, the terms of those permits must comply with their EPA-approved state implementation plans. See 40 C.F.R. Part 70 (codifying EPA rules that set minimum requirements for state operating permit programs and standards for state-issued permits). As for the process, state permitting authorities must provide at least 30 days for public comment on draft Title V permits and must give 30 days notice of any public hearing. 40 C.F.R. § 70.7(h)(4). Notice must be given "by publication in a newspaper of general circulation in the area where the source is located or in a State publication designed to give general public notice; to persons on a mailing list developed by the permitting authority, including those who request in writing to be on the list; and by other means if necessary to assure adequate notice to the affected public." Id. § 70.7(h)(1). Permitting authorities may not issue a Title V permit unless all of the public participation requirements set forth in § 70.7(h) of the regulations are satisfied. Id. § 70.7(a)(1)(ii).
6
After the state authority considers any comments and approves a permit, it submits that permit to EPA for review. See 42 U.S.C. § 7661d(a)(1); 40 C.F.R. § 70.8(a)(1). EPA has 45 days to object to the proposed permit. 42 U.S.C. § 7661d(b)(1). If it does object, the proposed permit is sent back to the state authority which must correct the problem. Id. If EPA does not object, any person may challenge its failure to do so by petitioning the EPA Administrator within 60 days after the 45-day review period has expired. Id. § 7661d(b)(2); 40 C.F.R. § 70.8(d). The petition must be based only on objections to the permit that were raised during the comment period, unless the petitioner shows that it was impracticable to raise those objections at that time or that the objections arose after the comment period. 42 U.S.C. § 7661d(b)(2). If the petitioner demonstrates that the permit does not comply with the requirements of the Clean Air Act or the applicable state implementation plan, EPA must issue an objection to the permit. Id.
II.
A.
7
Because the Clean Air Act sets forth no independent standard of review, see 42 U.S.C. § 7607(b), and because an EPA decision not to object to a Title V permit is a final agency decision, we apply the deferential standard of review set forth in the Administrative Procedure Act, 5 U.S.C. §§ 701-706. See Legal Envtl. Assistance Found., Inc. v. EPA, 118 F.3d 1467, 1473 (11th Cir.1997) (applying the Administrative Procedure Act's standard of review to an EPA final decision to deny a petition to promulgate a rule). EPA's decision may be set aside only if found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). Under this standard, we give deference to a final agency decision by reviewing for clear error, and we cannot substitute our own judgment for that of the agency. Sierra Club v. U.S. Army Corps of Eng'rs, 295 F.3d 1209, 1216 (11th Cir.2002) (citing Motor Vehicle Mfrs. Ass'n of United States, Inc., v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866-67, 77 L.Ed.2d 443 (1983)).
8
Although the standard of review applied to final agency decisions is deferential, the matter is a little more complicated than that. Under the arbitrary and capricious standard, we must consider whether an agency's decision "was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Fund for Animals, Inc. v. Rice, 85 F.3d 535, 541 (11th Cir.1996) (quotation marks omitted). "This inquiry must be searching and careful, but the ultimate standard of review is a narrow one." Id. (quotation marks omitted).
B.
9
When we review an agency's interpretation of a statute that the agency is responsible for administering, we apply a two-step test. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984); see also Lewis v. Barnhart, 285 F.3d 1329, 1333 (11th Cir.2002); Legal Envtl. Assistance Found. v. EPA, 118 F.3d at 1473. First, we must determine "whether Congress has directly spoken to the precise question at issue." Chevron, 467 U.S. at 842, 104 S.Ct. at 2781. Then, if Congress' intent is clear from the statutory language, we must give effect to it. Id. at 842-43, 104 S.Ct. at 2781. "[I]f the statute is silent or ambiguous with respect to the specific issue," we must decide whether the agency based its interpretation on a permissible construction of the statute. Id. at 843, 104 S.Ct. at 2782. To uphold EPA's interpretation of a statute, we "need not conclude that the agency construction was the only one it permissibly could have adopted" or even that we would have interpreted the statute the same way that the agency did. Id. at 843 n. 11, 104 S.Ct. at 2782 n. 11.
C.
10
An agency's interpretation of its own regulations is "controlling unless plainly erroneous or inconsistent with the regulation." Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 911, 137 L.Ed.2d 79 (1997) (citations and quotation marks omitted); see also Legal Envtl. Assistance Found., Inc. v. EPA, 276 F.3d 1253, 1262 (11th Cir.2001). This deferential standard applies as long as the agency does not promulgate "a parroting regulation" that does nothing more than "paraphrase the statutory language" that it should be implementing. See Gonzales v. Oregon, No. 04-623, ___ U.S. ___, 126 S.Ct. 904, ___, ___ L.Ed.2d ___ (2006).
11
We will uphold the agency's interpretation of its regulations "so long as it is reasonable, that is, so long as the interpretation sensibly conforms to the purpose and wording of the regulations." Legal Envtl. Assistance Found., 276 F.3d at 1262 (citation and quotation marks omitted); see also U.S. Steel Mining Co. v. Dir., Office of Workers' Comp. Programs, 386 F.3d 977, 985 (11th Cir.2004) (explaining that "[t]he obligation to defer to an agency's reasonable interpretation of its own regulations is rooted not only in our case law, but also in binding Supreme Court precedent") (citations omitted). We apply this deferential standard of review "even if [the agency's] interpretation is not `the best or most natural one by grammatical or other standards.'" Legal Envtl. Assistance Found., 276 F.3d at 1262 (quoting Pauley v. BethEnergy Mines, Inc., 501 U.S. 680, 702, 111 S.Ct. 2524, 2537, 115 L.Ed.2d 604 (1991)). Deference permits some degree of disagreement.
III.
A.
12
King Finishing sought a Title V permit for its Dover, Georgia facility where the company bleaches, dyes, finishes, and prints cotton and synthetic fabrics. This facility uses two boilers that burn fuel oil and natural gas, and its primary air emissions are particulate matter, sulfur dioxide, and nitrogen oxides.
13
In April 2001, Georgia Environmental Protection Division published a notice in a local newspaper announcing the 30-day comment period on the draft Title V permit for King Finishing. The comment period ended in May 2001. The next month Georgia EPD established the mailing list required by EPA regulations. See 40 C.F.R. § 70.7(h)(1). Because the mailing list was not created until after the time for public comment on the King Finishing draft permit had expired, Georgia EPD failed to comply with the mailing list requirement set forth in 40 C.F.R. § 70.7(h)(1).
14
Even though it had actual knowledge of the public comment period, the Sierra Club brought the lack of mailing list notice to the attention of Georgia EPD during the comment period. Because of that failure to follow the regulation, the Sierra Club requested that the King Finishing permit be put through the notification process again. Georgia EPD responded that it had provided notice through the other means specified in the regulation. It had actually made some changes to the King Finishing permit based on other comments that Sierra Club had made.3 Georgia EPD determined that its implementation of a mailing list after it had issued the King Finishing permit sufficiently addressed the Sierra Club's concerns, the idea apparently being that too late can still be close enough for government work.
15
The Sierra Club then timely requested that EPA object to the King Finishing permit because of the lack of mailing list notice and on other grounds. EPA denied this request, reasoning that, despite the regulation's requirement that a state permitting authority provide notice to the public via a mailing list, the use of a mailing list would not have significantly increased public participation.
16
EPA's Title V regulations unambiguously require that a state permitting authority must notify the public of the opportunity to comment on draft Title V permits by several means, one of which is a mailing list. See 40 C.F.R. § 70.7(h)(1). It is undisputed that Georgia EPD approved the King Finishing permit without complying with the mailing list requirement. EPA regulations clearly provide that permits may be issued only if "the permitting authority has complied with the requirements for public participation under paragraph (h) of [40 C.F.R. § 70.7]." 40 C.F.R. § 70.7(a)(1)(ii). As we have noted, paragraph (h) is the provision that makes mailing list notice mandatory. The Sierra Club's position that since Georgia EPD did not comply with the requirements of 40 C.F.R. § 70.7(h)(1), EPA must object to the issuance of the permit is a strong one. Before we can bless that position with a holding, however, we must decide whether the Sierra Club has standing to assert it.
B.
17
In accordance with the "case or controversy" requirement of Article III, a plaintiff must have standing to bring a claim in federal court. See U.S. Const. Art. III, § 2, cl. 1; see also Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984) ("[T]he `case or controversy' requirement defines with respect to the Judicial Branch the idea of separation of powers on which the Federal Government is founded."). EPA contends that the Sierra Club lacks standing to challenge its decision not to object to the King Finishing permit because the Sierra Club did have actual notice of the public opportunity to comment and did in fact comment.
18
The Sierra Club bases its standing on the procedural injury it claims was suffered by one of its members, Judge Ogden Doremus, who lives and fishes near the King Finishing facility. An association such as the Sierra Club has standing to bring suit on behalf of its members when:
19
(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.
20
Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 2441, 53 L.Ed.2d 383 (1977). EPA does not contest the last two elements, only the first one. It says that the Sierra Club does not have standing to raise the claim for Judge Doremus because he would not have standing to bring it himself. We turn to that question.
21
By affidavit Judge Doremus attests that not only is he a longtime resident of the community surrounding the plant and sometimes fishes near it, but he also is "concerned that emissions from the King Finishing plant will harm [his] health and the health of [his] friends and family in Southeast Georgia, and that these emissions will also have a negative impact on the aesthetic beauty of the surrounding area." Doremus Aff. at 2, ¶ 6. Connecting that injury to the procedural omission, Judge Doremus says in his affidavit that "because of defective public participation procedures and inadequate reporting requirements, [he] cannot be certain that the King Finishing facility does not emit pollutants in illegal quantities." Id. He explains:
22
Had Georgia EPD established a mailing list to notify the public of opportunities to review and comment on proposed Title V permits by the time of the public comment period [for] the King Finishing permit, Sierra Club members, as well as other members of the general public, would have reviewed and commented on that permit. This additional public input could have led to improvements in the King Finishing permit, which, in turn, could have reduced the harm caused by the air pollution emitted by the King Finishing plant.
23
Id. at 4, ¶ 10. According to the affidavit, the lack of a mailing list reduced the amount of public comment and the likelihood that violations of the permit would be detected, thereby raising the risk of environmental damage and increasing his concerns. Id. at 2-5.
24
The shortcoming of that affidavit, according to EPA, is this. The only people who have standing to challenge an asserted defect in the notice procedures are those who did not get actual notice and would have commented if they had, and Judge Doremus' affidavit does not put him within that category. If the EPA's legal premise is correct, the Sierra Club does lack standing because it has not presented an affidavit from any member who did not comment but would have if proper notice had been given. We will now examine that legal premise.
25
A plaintiff has standing under the Constitution when: (1) the plaintiff has suffered an injury in fact that is (a) concrete and particularized and (b) actual or imminent, (2) there is a causal connection between the injury and the conduct complained of, and (3) it is likely that the injury will be redressed by a favorable decision of the court. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992). When the plaintiff complains of an injury in fact that is procedural in nature, the plaintiff must demonstrate that "the procedures in question are designed to protect some threatened concrete interest of his." Id. at 573 n. 8, 112 S.Ct. at 2143 n. 8. Our view of Lujan is that the question of whether a plaintiff has a procedural right is inseparable from the requirement of a concrete injury.
26
In Lujan the plaintiffs filed suit under the citizen suit provision of the Endangered Species Act. Id. at 571-72, 112 S.Ct. at 2142. They challenged a rule promulgated by the Secretary of the Interior which provided that the Endangered Species Act's requirement of interagency consultation applied only to actions within the United States or on the high seas. Id. at 557-58, 112 S.Ct. at 2135. The Supreme Court concluded that because the plaintiffs had no immediate intention to return overseas to the sites of the challenged development projects that allegedly threatened endangered species, the rule did not affect them. Id. at 564-66, 112 S.Ct. at 2138-39. As a result, the plaintiffs could show no concrete injury and did not have standing. Id.
27
The Lujan Court offered two examples of procedural requirements that a plaintiff would have standing to enforce: (1) a required hearing prior to the denial of his license application, and (2) the required issuance of an environmental impact statement before a federal facility was constructed next door to him. Id. at 572, 112 S.Ct. at 2142. Elaborating on the second example, the Court explained:
28
[U]nder our case law, one living adjacent to the site for proposed construction of a federally licensed dam has standing to challenge the licensing agency's failure to prepare an environmental impact statement, even though he cannot establish with any certainty that the statement will cause the license to be withheld or altered, and even though the dam will not be completed for many years.
29
Id. at 572 n. 7, 112 S.Ct. at 2142 n. 7.
30
The Court indicated that these procedural requirements are enforceable because disregarding them could impair a plaintiff's non-procedural, concrete interest. See id. at 572, 112 S.Ct. at 2142. The Court emphasized that it did "not hold that an individual cannot enforce procedural rights; he assuredly can, so long as the procedures in question are designed to protect some threatened concrete interest of his that is the ultimate basis of his standing." Id. at 573 n. 8, 112 S.Ct. at 2143 n. 8. In other words, determining whether a plaintiff can enforce a procedural right requires determining whether he has suffered a concrete injury as a result of the claimed procedural error or omission.
31
The Lujan decision reaffirms that claims amounting to generalized grievances against the government are insufficient to confer standing on plaintiffs. Id. at 573-74, 112 S.Ct. at 2143. As examples of generalized grievance lawsuits, the Lujan Court mentioned the following: a suit that challenged the propriety of the process by which the Nineteenth Amendment was ratified, Fairchild v. Hughes, 258 U.S. 126, 129-130, 42 S.Ct. 274, 275, 66 L.Ed. 499 (1922), a taxpayer suit that challenged the propriety of federal expenditures, Massachusetts v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923), and a suit that claimed Justice Black's appointment to the Supreme Court violated the Ineligibility Clause, Ex parte Levitt, 302 U.S. 633, 58 S.Ct. 1, 82 L.Ed. 493 (1937). Id. at 574, 112 S.Ct. at 2143-44. The Court's analysis in Lujan suggests that a procedural injury not personal to a plaintiff is enough to confer standing if that injury is connected to a separate concrete interest of the plaintiff's. See Fla. Audubon Soc'y v. Bentsen, 94 F.3d 658, 665 (D.C.Cir.1996) (interpreting Lujan as "finding a procedural right in the citizen suit provision of the Endangered Species Act").
32
In Region 8 Forest Service Timber Purchasers Council v. Alcock, 993 F.2d 800 (11th Cir.1993), we held that a trade association had no standing to claim procedural injuries under the National Environmental Policy Act, the Endangered Species Act, or the National Forest Management Act. Id. at 802. The plaintiffs contended that they were injured by the United States Forest Service's failure to comply with certain procedures required by those acts when it adopted a policy governing timber cutting around woodpecker colonies on federal land. Id. at 810.
33
The plaintiffs in Alcock claimed that the procedures used by the Forest Service injured their rights to "information, participation, and informed decision making." Id. We held that these injuries were "generalized grievances" similar to those in Lujan. Id. This Court in Alcock, like the Supreme Court in Lujan, concluded that the plaintiffs lacked standing because they failed to connect the procedural injury to a "separate concrete interest" distinct from the general public's interest. See id. at 810-11; see also id. at 810 n. 16 ("This is not a case where the failure to follow a mandated procedure caused a distinct injury, different from that suffered by the public generally.").
34
Because this Court in Alcock had already rejected the plaintiffs' asserted economic, quality of life, and environmental injuries, no "separate concrete interest" could serve as the basis for standing to assert the procedural injury. Id. at 811. We stated that in order to support a plaintiff's standing to sue, "the injury alleged must be personal." Id. at 809. We did not conclude, however, that the procedural right itself—the violation of which might give rise to a concrete and personal injury—necessarily had to be personal to the plaintiff for him to have standing. See id. at 809-11. No decision cited to us has required that, and at least one court has rejected the notion. See Sw. Ctr. for Biological Diversity v. Forest Serv., 82 F.Supp.2d 1070, 1077-78 (D.Ariz.2000) (holding that even though the Endangered Species Act required the Forest Service to consult with the Wildlife Service and gave the plaintiffs no right to participate in the consultation process, plaintiffs had alleged a cognizable injury in fact for standing purposes).4
35
We conclude that a plaintiff has established procedural injury standing if he has established that the claimed violation of the procedural right caused a concrete injury in fact to an interest of the plaintiff that the statute was designed to protect. See Fla. Audubon Soc'y, 94 F.3d at 665 (requiring a plaintiff who claims procedural injury to demonstrate "that the defendant's acts omitted some procedural requirement, [and] ... it is substantially probable that the procedural breach will cause the essential injury to the plaintiff's own interest"); see generally Pac. Northwest Generating Co-op. v. Brown, 38 F.3d 1058, 1065 (9th Cir.1994) (noting that by requiring a certain procedure in a statute, Congress has causally linked that procedure with the goal of the statute).
36
In applying this test to the present case, we begin with the injury in fact requirement, keeping in mind that "environmental plaintiffs adequately allege injury in fact when they aver they use the affected area and are persons `for whom the aesthetic and recreational values of the area will be lessened' by the challenged activity." Friends of the Earth v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 183, 120 S.Ct. 693, 705, 145 L.Ed.2d 610 (2000) (quoting Sierra Club v. Morton, 405 U.S. 727, 735, 92 S.Ct. 1361, 1366, 31 L.Ed.2d 636 (1972)). Judge Doremus' affidavit brings him within that description, assuming that reduced aesthetic and recreational values stemming from concern about pollution qualifies. It does. The Second Circuit has observed that "the distinction between an alleged exposure to excess air pollution and uncertainty about exposure is one largely without a difference since both cause personal and economic harm." N.Y. Pub. Interest Research Group v. Whitman, 321 F.3d 316, 326 (2d Cir.2003). The court explained in Whitman that "[t]o the extent that this distinction is meaningful, it affects the extent, not the existence, of the injury." Id. Judge Doremus' injury in fact exists as a result of concerns about pollution, concerns that arise because the failure to use one of the mandated public participation procedures leaves him uncertain about whether pollution is being emitted in illegal quantities. See Doremus Aff. at 2, ¶ 6.
37
It is true, as EPA emphasizes, that Judge Doremus has never contended that he did not have actual notice of the opportunity to comment on the King Finishing draft permit. That does not, however, remove his concern about the potential impact of the failure to utilize a mailing list on the correctness of the result in the permitting process. Actual notice is irrelevant to the injury claimed in Judge Doremus' affidavit, which states that use of the required mailing list would have led to additional public input, which "could have led to improvements in the King Finishing permit, which, in turn, could have reduced the harm caused by the air pollution emitted by the King Finishing plant." Doremus Aff. at 4, ¶ 10. See Idaho Farm Bureau v. Babbitt, 900 F.Supp. 1349, 1363-64 (D.Idaho 1995) (disregarding actual notice to conclude that the Fish & Wildlife Service violated plaintiffs' procedural rights under the Federal Advisory Committee Act when the FWS failed to chair a required meeting, publish notice of that meeting, and prepare and maintain minutes of the meeting even though the plaintiffs attended and actively participated in that meeting).
38
For these reasons, Judge Doremus would have standing in his own right to challenge the failure to maintain and use a mailing list, and the Sierra Club has associational standing to raise the claim on his behalf as one of its members.
C.
39
Turning to the merits, EPA concedes that the plain language of 40 C.F.R. § 70.7(h)(1) establishes the mailing list requirement and admits that Georgia EPD did not satisfy this requirement before issuing the King Finishing permit. Nonetheless, EPA contends that it was not required to object to the King Finishing permit on that ground. EPA makes a distinction between procedural defects, to which it need not object, and defects in a permit to which it must. It contends that the lack of mailing list notice did not create a defect in the permit because the Sierra Club has not demonstrated that this omission actually resulted in less meaningful public participation. After all, EPA argues, Georgia EPD used other means to notify the public, and the Sierra Club itself commented on the draft permit. Not much harm, not much foul, it seems to say.
40
The Clean Air Act and EPA's own regulations do not allow EPA unfettered discretion to ignore obvious violations of Title V permit program requirements. Chevron deference requires us to give effect to Congress' intent when that intent is clear from the statutory language. Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781. It is clear that Congress intended for EPA to object to a permit when the public participation requirements for issuing it have not been met. See 42 U.S.C. § 7661d(b)(2) (providing that the EPA Administrator "shall issue an objection" if a permit is defective) (emphasis added); 40 C.F.R. § 70.7(a)(1)(ii) (stating that a permit may issue "only if" the requirements for public participation under 40 C.F.R. § 70.7(h) are met); see also U.S. Steel Corp. v. EPA, 595 F.2d 207, 212-15 (5th Cir.1979) (failure to follow public participation requirements of the Administrative Procedure Act renders agency action invalid); N.Y. Pub. Interest Research Group v. Whitman, 321 F.3d at 333-34. If that were not otherwise clear, the conference report for the 1990 amendments settles it: "[Section 7661d(b)(2)] sets out clearly the procedures required of EPA in reviewing permits. Simply put, [EPA] is required to object to permits that violate the Clean Air Act. This duty to object to such permits is a nondiscretionary duty." 136 Cong. Rec. S16,895, 16,944 (1990); see also N.Y. Pub. Interest Research Group, 321 F.3d at 333 n. 12 (quoting same).
41
Even under the deferential standard of review that we apply to an agency's interpretation of its own regulations, EPA is wrong in asserting that it can avoid its own unambiguous mailing list requirement in the Title V permitting process. The statute itself says that EPA has a duty to object when the statutory requirements are violated by a state permitting authority. 42 U.S.C. § 7661d(b)(2) ("The Administrator shall issue an objection within such period if the petitioner demonstrates to the Administrator that the permit is not in compliance with the requirements of [the Clean Air Act], including the requirements of the applicable implementation plan."). The regulations implement the statutory requirements. It follows that the duty to object extends to the implementing regulations. Otherwise, the statutory interests could be undermined by EPA's overly generous attitude toward the mistakes of the state permitting authority. When it comes to the Title V permitting process, EPA is not a board of pardons. Its duty is to enforce requirements, not to grant absolution to state agencies that have violated them.
42
While we accord EPA's interpretation of its regulations much deference, we will not abdicate our obligation to review those interpretations. For the reasons we have discussed, we conclude that EPA abused its discretion and acted arbitrarily and capriciously when it failed to object to the King Finishing permit based on Georgia EPD's failure to comply with the mailing list requirement set out in 40 C.F.R. § 70.7(h)(1). On that basis, insofar as the King Finishing facility permit is concerned, we grant the petition for review, vacate the EPA order, and remand this case to the EPA for further consideration.
IV.
43
In addition to the King Finishing facility permit, Georgia EPD issued permits to Monroe Power and to Shaw Industries' Plant No. 2 and Plant No. 80. The Sierra Club and Georgia Forestwatch challenge EPA's decision not to object to all four permits on the ground that they require the permittees to report only monitoring results showing permit deviations rather than monitoring that shows both permit deviations and compliance. This dispute is about the extent of the reporting that the statute and regulation require.
A.
44
Section 7661c(a) of the Clean Air Act provides:
45
Each permit issued under [Title V] shall include ... a requirement that the permittee submit to the permitting authority, no less often than every 6 months, the results of any required monitoring, and such other conditions as are necessary to assure compliance with applicable requirements of [the Clean Air Act], including the requirements of the applicable implementation plan.
46
42 U.S.C. § 7661c(a) (emphasis added). The statute does not define "results," which leads to the question: what does "submit ... the results of any required monitoring" mean?
47
EPA's corresponding regulation, 40 C.F.R. § 70.6, elaborates on the reporting duty as follows:
48
(a) Standard permit requirements. Each permit issued under this part shall include the following elements:
49
* * *
50
(3) Monitoring and related record keeping and reporting requirements
51
* * *
52
(iii) With respect to reporting, the permit shall incorporate all applicable reporting requirements and require the following:
53
(A) Submittal of reports of any required monitoring at least every 6 months. All instances of deviations from permit requirements must be clearly identified in such reports. All required reports must be certified by a responsible official ....
54
40 C.F.R. § 70.6(a)(3)(iii)(A) (emphasis added).
55
The permits, which reflect EPA's (and Georgia EPD's) interpretation of the statute and regulation, only require the reporting of monitoring results that show deviations from the permit requirements; they do not require permittees to report results showing emissions within permissible limits. EPA contends that 42 U.S.C. § 7661c(a) and 40 C.F.R. § 70.6(a)(3)(iii)(A) merely require permittees to submit reports that (1) identify all instances of deviations and (2) are certified by a responsible official. EPA argues that its approach is reasonable because the challenged permits do require the sources to state affirmatively that no deviations occurred if, in fact, there were no deviations during a particular reporting period. According to EPA, it is reasonable to conclude that the purpose of 42 U.S.C. § 7661c(a) and 40 C.F.R. § 70.6(a)(3)(iii)(A), is to require enough reporting to assure compliance and reporting of deviations is enough for that.
56
Sierra Club and Georgia Forestwatch contend that the plain language of 42 U.S.C. § 7661c(a) and 40 C.F.R. § 70.6(a)(3)(iii)(A) mandates that King Finishing, Monroe Power, and Shaw Industries report "any required monitoring," which means reporting all monitoring data and not just deviations. They contend that EPA's narrower interpretation denies full and effective citizen participation by depriving the public of valuable information, because reporting of all monitoring results may show a deviation that the permittee failed to recognize or report. They insist that, without all monitoring data, the public will be unable to detect unreported deviations.
57
EPA argues that reporting of "any required monitoring" can be achieved in a variety of ways, and that neither 42 U.S.C. § 7661c(a) nor 40 C.F.R. § 70.6(a)(3)(iii)(A) specifies what form the monitoring report must take. According to EPA, the challenged permits, which require quarterly reporting of deviations, malfunctions, operating time, monitor down time, and other information, provide sufficient information to indicate whether operations are in compliance with permit terms and conditions. More specifically, EPA says that the following requirements in the challenged permits constitute sufficient "reports" of "any required monitoring": all of the facilities must (1) keep monitoring systems in continuous operation with data recorded during all periods of operation; (2) state affirmatively that there were no deviations if, in fact, no deviations occurred for a given reporting period; and (3) have a responsible official certify that the contents of the reports are true, accurate, and complete.
B.
58
The challenged action in this case is EPA's decision not to object to each of four permits issued by Georgia EPD. EPA did not object to those permits because it determined that each of them complied with the reporting requirement of 40 C.F.R. § 70.6(a)(3)(iii)(A). That determination was based on EPA's interpretation of its own regulation.
59
We have explained that our "obligation to defer to an agency's reasonable interpretation of its own regulations is rooted not only in our case law, but also in binding Supreme Court precedent." U.S. Steel Mining, 386 F.3d at 985 (citations omitted). According to that precedent, "when an agency has regularly advocated a uniform interpretation of its regulation, the interpretation is deserving of substantial deference unless it is plainly erroneous or inconsistent with the regulation." Id. (citing Mullins Coal Co. of Va. v. Dir., Office of Workers' Comp. Programs, 484 U.S. 135, 159, 108 S.Ct. 427, 440, 98 L.Ed.2d 450 (1987)) (quotation marks omitted).
60
The Sierra Club and Georgia Forestwatch argue that EPA has not uniformly interpreted 40 C.F.R. § 70.6(a)(3)(iii)(A) because it once defined "any required monitoring" as all required monitoring (not just deviations), and it should be bound by that prior interpretation. As evidence of this prior inconsistent interpretation, they rely on a memo written by a member of EPA's staff and sent to Georgia EPD. According to that memo, in order to comply with 40 C.F.R. § 70.6(a)(3)(iii)(A), another draft permit with the same monitoring and reporting requirements as those in the four permits involved in the present case should have been revised to require reporting of all monitoring and not just reports of deviations. However, EPA implicitly rejected the position advocated in the memo by issuing that permit without the suggested revision.
61
The point is that the memo does not evidence a regularly advocated, uniform interpretation of 40 C.F.R. § 70.6(a)(3)(iii)(A) because the memo merely contains staff comments on a draft permit. It is not a formal determination of the agency. Given that EPA ultimately accepted and issued the earlier permit with the same monitoring and reporting requirements as the four permits challenged in this case, we infer consistency in the position that reporting of deviations is all that is required by 40 C.F.R. § 70.6(a)(3)(iii)(A) and the statute it implements.
62
When an agency has interpreted one of its regulations in a consistent manner, that interpretation is "controlling unless plainly erroneous or inconsistent with the regulation." Auer, 519 U.S. at 461, 117 S.Ct. at 911 (quotation marks and citation omitted).5 Under EPA's interpretation of 40 C.F.R. § 70.6(a)(3)(iii)(A), a permittee is required to file certified reports containing monitoring data showing deviations (or a statement that no deviations occurred), malfunctions, operating time, monitor down time, and other information; it is not required to submit all of its monitoring data. In light of the fact that the text of the regulation does not specify what data must be included in the reports, we cannot say that this interpretation is plainly erroneous or inconsistent with the regulation. EPA's interpretation reflects the regulation's emphasis on deviations and also requires the reporting of other pertinent monitoring data. Moreover, requiring permittees to submit reports containing only deviations, as opposed to submitting a voluminous amount of raw data from all monitoring, is reasonable since deviations are particularly relevant to determining whether a source is complying with the Clean Air Act. See 42 U.S.C. § 7661c(a) ("Each permit... shall include ... a requirement that the permittee submit... the results of any required monitoring, and such other conditions as are necessary to assure compliance with the applicable requirements of [the Clean Air Act] ....").
63
Under the deferential standard of review we apply, our inquiry ends where, as here, we conclude that EPA's interpretation of the regulation is not plainly erroneous or inconsistent with the regulation's plain language, see U.S. Steel Mining, 386 F.3d at 985, and its interpretation of the statute is reasonable, see Chevron, 467 U.S. at 844-45, 104 S.Ct. at 2782-83. It follows that EPA's decision not to object to the four title V permits at issue on the basis that they did not require reporting of all monitoring data was not "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." See 5 U.S.C. § 706(2)(A). Accordingly, we deny the petition insofar as it concerns EPA's refusal to object to the permits based on claims of inadequate reporting of monitoring results.
V.
64
Finally, the Sierra Club and Georgia Forestwatch contend that EPA should have objected to all four permits because Georgia EPD failed to provide the public with adequate information about the facilities during the public comment period. EPA's regulation governing public participation in the issuance of draft Title V permits requires state permitting authorities to give notice of:
65
the name, address, and telephone number of a person from whom interested persons may obtain additional information, including copies of the permit draft, the application, all relevant supporting materials, ... and all other materials available to the permitting authority that are relevant to the permit decision ....
66
40 C.F.R. § 70.7(h)(2) (emphasis added). This issue involves a dispute over what constitutes information "relevant to the permit decision" for purposes of this regulation. Id.
67
EPA has approved, and thereby adopted as its own, Georgia EPD's position that the regulation allows a permitting authority to make available to the public only the information that it has actually used in the permit review process. The problem, according to the Sierra Club and Georgia Forestwatch, is that additional relevant information is kept at the Title V facilities; the public has no access to this information; and Georgia EPD may, and often does, choose not to review it. For example, monitoring data is often kept at the facilities, and facilities' risk management plans, if they exist, are housed at the Risk Management Plan Reporting Center in Virginia. Georgia EPD may choose not to use these materials in developing the draft permits.
68
The Sierra Club and Georgia Forestwatch argue that the plain language of 40 C.F.R. § 70.7(h)(2) requires public access to all information that is relevant and available to the permitting authority—not just the information that the permitting authority deems relevant and actually uses in its permitting review process. Georgia EPD's public notice makes available for review the draft permit and all of the materials that it actually used to develop the permit—not all of the materials that it could have used.
69
Again we are considering EPA's interpretation of its own regulations, and again we apply a deferential standard of review. See Legal Envtl. Assistance Found., 276 F.3d at 1262 (giving the agency's interpretation "controlling weight," "even if this interpretation is not the best or most natural one by grammatical or other standards") (citations and quotation marks omitted). EPA has determined that the phrase "materials available to the permitting authority that are relevant to the permit decision," 40 C.F.R. § 70.7(h)(2), means the information that the permitting authority has deemed to be relevant by using it in the permitting process. EPA argues that Sierra Club's contrary interpretation of the regulation would place no boundaries on the scope of the "relevant" material that a permitting authority would have to produce, and that a citizens' group would inevitably claim a violation of § 70.7(h)(2) if the permitting authority excluded any requested information.
70
EPA's interpretation of § 70.7(h)(2) may not be the one that we would have chosen, but it is not contrary to the plain meaning of the language. Nor can we say that EPA's interpretation is unreasonable. The regulation does not detail what materials are "relevant to the permitting decision" and does not specify who gets to decide. Therefore, we conclude that EPA did not abuse its discretion or act arbitrarily or capriciously in refusing to object to the four permits based on the failure of Georgia EPD to provide the public during the comment period with information about the facilities that it, as the permitting authority, did not consider.
VI.
71
Insofar as it concerns the King Finishing facility, we GRANT the petition for review, VACATE the EPA's order, and REMAND the case to EPA for further consideration consistent with this opinion, based on Georgia EPD's failure to use a mailing list for public notification during the comment period. In all other respects, we DENY the petitions for review.
Notes:
1
Following changes in ownership after their Title V permits were issued, King Finishing changed its name to King American Finishing, Inc., and Monroe Power changed its name to MPC Generating, LLC. The change in ownership did not affect the requirements and conditions of these facilities' permits. The record and the briefs refer to "King Finishing" and "Monroe Power," and for the sake of consistency, so do we
2
The petition for review and the parties' initial briefs addressed an additional issue concerning Monroe Power's monitoring of its carbon monoxide emission limit. That issue is no longer before us because the parties have settled it
3
Georgia Center for Law in the Public Interest submitted comments on behalf of the Sierra Club for the King Finishing and Monroe Power draft permits and on behalf of Georgia Forestwatch for the Shaw Industries' Plants No. 2 and No. 80 draft permits. For the sake of simplicity, we refer to those comments as having been submitted by the Sierra Club or Georgia Forestwatch
4
Utah v. Babbitt, 137 F.3d 1193 (10th Cir.1998), is not to the contrary. The Babbitt plaintiffs claimed injury because they were denied their right to participate in the inventory of federal lands under the Federal Land Policy and Management Act. Id. at 1206. The Tenth Circuit held that the plaintiffs had no standing because the FLPMA did not require public participation during the inventory process, and, therefore, no procedural right had been violated. Id. at 1210. The court did not require the plaintiffs to show, in order to establish standing, that their personal participation rights had been violated. See id. at 1206-10. The court merely recognized that no statutory procedures had been violated in that case. Id. at 1210.
5
Our application ofAuer deference in this case is not undermined by the Supreme Court's recent decision in Gonzales v. Oregon, ___ U.S. ___, 126 S.Ct. 904, ___ L.Ed.2d ___ (2006). In that case, the Supreme Court held that it would not accord Auer deference to an Attorney General rule interpreting a "parroting regulation" that "just repeats two statutory phrases and attempts to summarize the others." Gonzales v. Oregon, 126 S.Ct. at 915. The Supreme Court reasoned that "[a]n agency does not acquire special authority to interpret its own words when, instead of using its expertise and experience to formulate a regulation, it has elected merely to paraphrase the statutory language." Id.
The regulation at issue in this case does not merely "parrot" the statute. Although 42 U.S.C. § 7661c(a) and 40 C.F.R. § 70.6(a)(3)(iii)(A) both use the phrase "any required monitoring," the regulation does more. The regulation specifies that the permittee must "clearly identif[y]" "all instances of deviations" in monitoring "reports" and requires that those reports be certified.
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278 B.R. 619 (2002)
In re GREW, Carla Michelle-Lynne, Debtor.
No. 01-06976-9P7.
United States Bankruptcy Court, M.D. Florida, Fort Myers Division.
May 8, 2002.
Christian Felden, Naples, FL, for debtor.
Thomas S. Heidkamp, Ft. Myers, FL, trustee.
*620 ORDER ON MOTION TO CONVERT CHAPTER 7 CASE TO A CHAPTER 13 CASE AND ON OBJECTION TO DEBTOR'S MOTION TO CONVERT CHAPTER 7 CASE TO A CHAPTER 13 CASE
(Doc. Nos. 26 & 27)
ALEXANDER L. PASKAY, Bankruptcy Judge.
The matters under consideration are a Motion by Carla Michelle-Lynne Grew (Debtor) for conversion of her original Chapter 7 Case to a Chapter 13 case and a challenge by Thomas S. Heidkamp (Trustee) to the Debtor's right to convert. It is the Trustee's contention that based on the Schedules filed by the Debtor, she is not eligible for relief under Chapter 13 by virtue of 11 U.S.C. § 109(e) because the Debtor's non-contingent, liquidated unsecured debts equal 498,009.30, which is far in excess of the statutory cap of $269,250.00 for relief under Chapter 13.
In addition, the Trustee contends that the Plan proposed by the Debtor will not pay creditors as much as they would receive in a Chapter 7 case. This contention is based on the allegation that there is a pending Objection to her claim of exemption, there are potential fraudulent transfers, and if either of them succeeds, the recovery would certainly give the creditors more than they would receive under the Plan. The Trustee also contends that the Debtor sought conversion in bad faith.
It is appropriate to note, at the outset, that the challenge of the right of the Debtor to convert is not by a creditor of the Debtor, but by the Trustee appointed in the Chapter 7 case, who holds no allowable pre-petition claim against the Debtor. The events relevant to the matters under consideration as appear from the record are as follows.
The Debtor filed her Petition for Relief under Chapter 7 on April 18, 2001. The Petition was signed by Richard Johnston, Jr., as counsel of record for the Debtor. The Petition was accompanied by the documents required by F.R.B.P. 1007. The Schedule F listed a total of $498,009.30, as creditors holding unsecured non-priority claims.
Out of the total of forty-eight unsecured claims scheduled, twenty-four were scheduled as amounts unknown and one with amount of $00.00. Four claims were filed as disputed. Three out of the forty-eight were scheduled as a debt in the amount of $159,000, owed to Mark Hopper, James Jamo, and Wilber and Mollie Henderson, all three described as "Legal Fees/Sanctions." Mr. and Mrs. Henderson, according the Statement of Financial Affairs, were plaintiffs suing the Debtor in Jackson, Michigan, and Messieurs Hopper and Jamo were the attorneys representing the Hendersons in that litigation. Mr. and Mrs. Henderson filed two unsecured proofs of claim one in the amount of $157,178.83 and the other in the amount of $4,101.98, although the later was not timely filed. Neither Messieurs Hopper nor Jamo filed a proof of claim.
On June 29, 2001, the Trustee filed its Report of Assets and an Application to send an asset notice. On July 2, 2001, the creditors were notified by the Court that fixed October 1, 2001 as the bar date for filing claims. The total unsecured claims actually timely filed is in the amount of $196,801.82. Thus, it appears that the same debt was scheduled by the Debtor three times, evidently representing attorneys' fees incurred by the Henderson litigation in Michigan with the Debtor.
The right of the Debtor to convert a Chapter 7 case to a Chapter 13 case is governed by 11 U.S.C. § 706 which provides as follows:
*621 The debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title. Any waiver of the right to convert a case under this subsection is unenforceable.
It should be noted at the outset that while the issue of standing of the Trustee was not raised initially, but later, this Court is satisfied that based on the fact the Chapter 7 Trustee has a potential administrative claim under Section 503 of the Code, he has standing to challenge the Debtor's right to convert.
It is beyond peradventure with the enactment of Chapter 13, that Congress intended to extend the scope of the relief provisions for individuals and made it more accessible, attractive, and easier for individuals to work out repayment plans. It is equally true that it also placed a statutory cap on eligibility with the enactment of Section 109(e) of the Code.
This requirement indicates a Congressional intent to limit the benefits of Chapter 13 and use the language that is somewhat in the form of a jurisdictional requirement. In re Pearson, 773 F.2d 751 (6th Cir.1985). The legislative history of this Section fails to furnish any help in determining the appropriate standard and procedure to be used in determining a debtor's eligibility for relief under Chapter 13 when the eligibility is challenged. It is not surprising that there is no consensus as to what the court should consider when determining a debtor's eligibility and what is the controlling date for the determination. In the case of In re Pearson, supra, the Sixth Circuit held that in determining eligibility, the court should rely primarily on the debtor's Schedules, checking only to determine that the Schedules were prepared in good faith and the requirement was intended to be determined based on the debts as existed on the date of the filing.
The Ninth Circuit B.A.P. appeared to endorse the standard adopted by the Sixth Circuit in In re Pearson, supra, but qualified its endorsement by adding that "bankruptcy court should look past the Schedules to other evidence submitted when a good faith of the debtor is challenged." In re Scovis, 231 B.R. 336, 341 (9th Cir. BAP 2000) quoting In re Quintana, 107 B.R. 234, 239 n. 6 (9th Cir. BAP 1989), aff'd, 915 F.2d 513 (9th Cir.1990). Scovis was subsequently appealed by the debtors in that case, which was reversed by the Ninth Circuit in In re Scovis, 249 F.3d 975 (9th Cir.2001). In In re Soderlund, 236 B.R. 271, the Ninth Circuit B.A.P. held that the bankruptcy court did not err in making the determination of the debtor's eligibility by looking behind the debtor's schedules and considering the allowed unsecured claims on file. The Ninth Circuit in In re Scovis, supra rejected the B.A.P.'s extension of the standard established by Pearson and reversed stating that the rule for determining the eligibility should be normally determined by the original Schedules by the debtor checking only if the Schedules were made in good faith.
Some bankruptcy courts have arrived at a totally opposite standard from the Ninth Circuit and have held that in determining the debtor's eligibility, the court is not restricted only to review the Schedules but may consider matters outside of the Schedules, even in the absence of any showing of lack of good faith by the debtor in filing the schedules. In re Sullivan, 245 B.R. 416 (N.D.Fla.1999); In re Lucoski, 126 B.R. 332 (S.D.Ind.1991).
In the present instance, it is without any dispute that the Schedule F of the Debtor stated the total of unsecured debts of $498,009.00, or far in excess of the current *622 statutory cap of $269,250. As noted earlier, this is a Chapter 7 case, which the Debtor seeks to convert to Chapter 13. It is well established that the controlling time which governs eligibility is when the Petition is filed and not what may have happened after the filing. In re Pearson, supra. Thus, it is clear that under Pearson, the Debtor is not eligible for relief as a Chapter 13 debtor unless this Court finds that the Schedules were not filed in good faith.
There is no allegation in this case, let alone any proof, that the Schedules were filed in bad faith. The only allegation by the Trustee is that the Debtor sought the conversion in bad faith and this is not the same as filing Schedules in bad faith. The fact that the total claims actually filed are below the statutory cap is of no consequence, even if it is appropriate fact for consideration. It is a well-known fact that frequently, numerous creditors fail to file claims, especially in a Chapter 7 case, which originally was noticed pursuant to F.R.B.P. 2002(e) as a no dividend case. Lastly, the debt for the debt to Messieurs Hopper and Jamo are scheduled in the same amount of the debt owed to Mr. and Mrs. Henderson is equally without significance. While facially they appear to be duplicates, this is not necessarily so and may very well represent a joint liability by the Debtor to all three. See In re Correa, 15 B.R. 195 (Bankr.D.Md.1981).
In sum, this Court is satisfied that the Debtor is not eligible for relief under Chapter 13 and the Trustee's objection to the Debtor's motion is well taken and should be sustained. There is nothing in this record which would warrant a contrary finding.
Accordingly, it is
ORDERED, ADJUDGED AND DECREED that the Debtor's Motion to Convert from Chapter 7 to Chapter 13 (Doc. No. 26) be, and the same is hereby, denied. It is further
ORDERED, ADJUDGED AND DECREED that the Objection (Doc. No. 27) interposed by the Trustee, be and the same is hereby, sustained
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 04-3283
___________
United States of America, *
*
Appellee, * Appeal from the United States
* District Court for the
v. * District of Minnesota.
*
Pheng Yang, also known as Fuji, * [UNPUBLISHED]
*
Appellant. *
___________
Submitted: September 7, 2005
Filed: September 23, 2005
___________
Before BYE, McMILLIAN, and RILEY, Circuit Judges.
___________
PER CURIAM.
Pheng Yang appeals the sentence the district court1 imposed after he pleaded
guilty to aiding and abetting the sexual trafficking of minor B.B. He argues that the
district court erred in (1) assessing a 2-level increase under U.S.S.G. §§ 2G1.1(d)(1)
(multiple victims in commercial sex crime) and 3D1.4(a) (multiple count adjustment)
(2003), because he pleaded guilty to one count that involved only one victim; and
(2) increasing his offense level under both U.S.S.G. § 2G1.1(b)(1) (offense involved
commercial sex act and use of physical force, fraud, or coercion) and (b)(4)(B)
1
The Honorable Joan N. Ericksen, United States District Judge for the District
of Minnesota.
(participant unduly influenced minor to engage in commercial sex act), because it was
“double counting.”
Yang’s first argument fails because the district court did not clearly err in
finding that the offense of conviction involved a second victim: unobjected-to
portions of the presentence report (PSR) indicate a second victim, M.M., was
subjected to all of the charged commercial-sex activities. See United States v. Thorn,
413 F.3d 820, 823 (8th Cir. 2005) (facts presented in PSR are deemed admitted unless
defendant objects to inclusion of those facts); United States v. Mathijssen, 406 F.3d
496, 498 (8th Cir. 2005) (district court’s factual findings in application of Guidelines
are reviewed for clear error). Further, application of section 2G1.1(d)(1) to the
second victim was proper: according to Commentary Application Note 4, section
2G1.1(d)(1) “directs that if the relevant conduct of an offense of conviction” involves
more than one victim, “whether specifically cited in the count of conviction, each
such victim shall be treated as if contained in a separate count of conviction.” See
Mathijssen, 406 F.3d at 498 (application of Guidelines is reviewed de novo).
Yang’s second argument fails because he agreed to the relevant increases in his
plea agreement. See United States v. Barrett, 173 F.3d 682, 684 (8th Cir. 1999)
(defendant may not challenge application of Guidelines to which he agreed in plea
agreement unless he proves agreement is invalid or succeeds in withdrawing from it).
Accordingly, we affirm.
______________________________
-2-
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772 S.W.2d 946 (1989)
Randy Kim SMITH, Appellant,
v.
The STATE of Texas, Appellee.
No. 05-87-01289-CR.
Court of Appeals of Texas, Dallas.
May 26, 1989.
Braden W. Sparks, Dallas, for appellant.
Kathi Alyce Drew, Dallas, for appellee.
Before HOWELL, LAGARDE and WHITTINGTON, JJ.
LAGARDE, Justice.
Randy Kim Smith appeals his conviction for obstructing an entrance to a place of business to which the public had access. TEX.PENAL CODE ANN. § 42.03 (Vernon 1974). Punishment was assessed at five days' confinement and a $500 fine. In eight points of error, appellant claims that section 42.03 of the Texas Penal Code is unconstitutional and that the evidence is insufficient to support his conviction. We overrule all eight points of error and affirm the conviction.
Because several of appellant's points of error require a detailed analysis of the statement of facts, we set forth the following *947 summary. On May 23, 1987, appellant, his wife, and his two children picketed the Fairmount Center. Appellant carried a picket sign with an "anti-abortion" message on it. Officer Charles Reynolds testified that on that date, he was dispatched to the Fairmount Center. After arriving, but before entering the clinic, he spoke with the picketers:
When I arrived at the Fairmount Center, being as the call involved a disturbance with picketers, I first stopped to talk to the individuals outside the building on the public sidewalk, and explained to them, as is my standard procedure, we have several calls like that throughout the year, that just to make sure that they understood that if they were on the public sidewalk picketing, that was their right; but that they needed to make sure they remained moving or kept the public sidewalk open and clear so that no citizens or clients to the business were inconvenienced and had to leave the public sidewalk to get to the business.
At trial, Officer Reynolds confirmed that it was appellant to whom he spoke, and that appellant indicated that he understood that he was to abide by the law and to keep the public sidewalk clear and free in order to permit access to the public and clients. At the time of this conversation, appellant was standing on the public sidewalk immediately in front of, or in close proximity to, the steps leading to the private walkway to the clinic.
After appellant indicated to Officer Reynolds that he understood what was required of him, Officer Reynolds and Officer Christine Carmell went into the clinic to speak with the individuals inside. While inside, Officer Reynolds observed a Weir's Furniture delivery truck park in front; he saw an individual, later identified as Magnus Ruthenborg, carry a chair from the truck down the public sidewalk to the Fairmount Center. At that time, appellant was on the public sidewalk between the private access and the truck. Officer Reynolds then observed the following:
Mr. Ruthenborg approached [appellant]; and as a result of carrying a medium size [sic] chair, he was unable to pass [appellant], and [appellant] refused to yield on the public sidewalk, causing Mr. Ruthenborg an inconvenience and a safety hazard for that matter by having to step over a brick about [sic] two foot tall wall while carrying a chair attempting to do his job and deliver the chair to the Fairmount Center, which apparently had ordered the furniture.
. . . .
At the point where Mr. Ruthenborg and [appellant] came together, they were on a public sidewalk, which the general public has access to, and Mr. Ruthenborg was attempting to get to the two or three steps leading to the private sidewalk, private entranceway into the Fairmount Center; and as a result, he was unable to reach that point because of [appellant's] actions.
Officer Reynolds stated that appellant obstructed the entrance and Ruthenborg breached the retaining wall.
After observing this, Officer Reynolds went outside to speak with appellant who, by this time, had moved back to the stairs leading to the private walkway to the clinic. Officer Reynolds testified:
I explained to him that it is apparent that the Fairmount Center has ordered some furniture, and that Mr. Ruthenborg was going to be making more trips with the furniture, and it was going to be necessary for him to alter his picketing actions somewhat to allow Mr. Ruthenborg free access to the private entrance from the public sidewalk.
Appellant responded that he had a right to be there and that he did not have to move if he did not want to. Officer Reynolds then informed appellant as follows:
After he explained to me what his rights were, I then further gave him a second warning and advised [appellant] that it was a violation of the Texas State Penal Code to block or obstruct a private passageway or sidewalk in any manner where it would be an inconvenience to the general public; and as a result of their loading and unloading of the furniture, he was going to be blocking the sidewalk, and he needed to move a little *948 bit north so that they had access to the building.
Appellant once again informed Officer Reynolds that he did not have to move. Officer Reynolds reiterated his warning: "I advised him that he had been warned twice and been told that it was a violation of Texas State Penal Code, and he was still going to refuse to give way to the public access, [and] I placed him under arrest for obstructing a public sidewalk." Officer Reynolds stated that at the time of his arrest, appellant was not blocking anyone from entering the clinic.
Officer Carmell corroborated Officer Reynolds's testimony that appellant was instructed to leave the sidewalk area directly in front of the walkway leading to the Fairmount Center, that Officer Reynolds informed appellant that he was obstructing the walkway leading to the clinic in violation of the Texas Penal Code, and that appellant refused to move.
Magnus Ruthenborg testified that, as a truck driver/delivery person for Weir's Furniture, he was delivering furniture to the Fairmount Center at about 10:30 a.m. on May 23, 1987. He first came in contact with appellant when he initially obtained the chairs from the back of the truck, got out of the truck, went to take the chairs in, and heard appellant's verbal "gestures," such as "I'm a baby killer, baby murderer." Ruthenborg initially ignored appellant and went around him. Ruthenborg stated:
I am not a very patient person with regard to verbal abuse; and after a while, it began to get to me, and I lowered myself to his level and began talking back to him, you know, and I told him to "get the fuck away from me." And I asked him to move several times, and every time I asked him to move, he just ignored me like I wasn't even there, he kept talking to me, [and he] stepped in front of me. I would try to go around him and he would step back in front of me again. My partner wouldn't say anything to him
(Emphasis added.) Ruthenborg further testified that he had six occasions, three trips in and three out, to walk by appellant and that on each of the three trips in, he had a chair in his hands.
Ruthenborg testified that on the second trip from the delivery truck to the clinic:
I asked him to move several times and he would move and he stepped over like this, and when I [sic] went over to step in front of me, and I stepped back like this and he stepped in front of me again, and I told him to get the fuck out of my way, that is what I told him, and called him a freak and said, "Leave me alone." And he just continued to talk. And so, I didn't really listen too much to what he said.
(Emphasis added.) Ruthenborg stated that in order to avoid further confrontations he "went over the brick wall a little step, it is probably two feet ... instead of coming this way to deal with [appellant], [Ruthenborg] cut across and [appellant] was talking the whole time." On subsequent trips to and from the clinic, Ruthenborg chose to go over the brick wall and across the lawn. Ruthenborg also testified that although appellant did not force him to go over the brick wall and across the lawn, he would have preferred to walk up the walkway to the clinic.
Both defense witnesses claimed that appellant did not block the passageway to the clinic. Appellant denied that Ruthenborg ever asked him to move. Appellant's wife stated that she noticed that Ruthenborg was uncomfortable in dealing with appellant and testified that she believed that Ruthenborg cut across the lawn to avoid appellant.
We must first consider the State's contention that appellant failed to properly preserve his points of error because he raises them for the first time on appeal. Citing Ellis v. State, 722 S.W.2d 192, 198 (Tex.App.Dallas 1986, no pet.), the State maintains that this Court should not consider appellant's first two points of error because appellant's trial counsel failed to raise these points below. We agree with the State that generally appellate courts will not consider any error that counsel could have called, but did not call, to the attention of the trial court at a time when such error could have been avoided or corrected. Rogers v. State, 640 S.W.2d 248, *949 264 (Tex.Crim.App.1982) (opinion on motion for rehearing). However, since Ellis, the Court of Criminal Appeals has stated that trial counsel's failure to object to the constitutionality of a statute upon which a defendant's conviction was based does not waive the right to raise that point for the first time on appeal. Rabb v. State, 730 S.W.2d 751, 752 (Tex.Crim.App.1987). Thus, we conclude that appellant's first point of error should be considered.
In his first point of error, appellant contends that section 42.03,[1] both facially and as applied, constitutes an impermissible restraint on his freedom. Specifically, appellant argues that he was exercising his right to free speech and to picket an abortion clinic and, therefore, the State's proscription of his activity must be supported by such substantial and compelling interest to justify infringement of his constitutional rights. See Spence v. Washington, 418 U.S. 405, 409-10, 94 S.Ct. 2727, 2729-30, 41 L.Ed.2d 842 (1974).
Appellant maintains that because there is no compelling interest here, his conviction must be reversed. Appellant asserts that his arrest and subsequent conviction were based on the officers' initial misperception that he had "obstructed" Ruthenborg, thereby requiring Ruthenborg to take an alternate route across the lawn. Appellant contends that, in fact, Ruthenborg chose the alternate route rather than face his message: thus, the State had no compelling interest in preserving Ruthenborg's "convenience" to the detriment of his fundamental right to free speech.
The Court of Criminal Appeals considered the constitutionality of section 42.03[2] under the first amendment to the United States Constitution in Haye v. State, 634 S.W.2d 313, 315 (Tex.Crim.App.1982). As explained by the Court:
The State has the right to regulate the use of city streets and other facilities to assure the safety and convenience of people in their use. Cox v. Louisiana, 379 U.S. 536, 85 S.Ct. 453, 13 L.Ed.2d 471. We find that Sec. 42.03, supra protects the right of the public to the reasonably convenient use of sidewalks and other passageways without an encroachment upon the First Amendment rights of the individual. Sherman v. State, supra [626 S.W.2d 520 (Tex.Cr.App.1981.] We find Sec. 42.03, supra to not be violative of the First Amendment to the United States Constitution.
Haye, 634 S.W.2d at 315. Thus, we conclude that section 42.03 is supported by a substantial and compelling state interest. See Spence, 418 U.S. at 409-10, 94 S.Ct. at 2729-30. Moreover, the fact that Ruthenborg chose an alternate route is insignificant in light of the fact that Ruthenborg repeatedly "asked [appellant] to move" and subsequently told appellant to "get the fuck away from" Ruthenborg and "to get the fuck out of" Ruthenborg's way. Ruthenborg's alternate route was less than voluntary considering appellant's refusal to move in response to Ruthenborg's repeated requests. Accordingly, we overrule appellant's first point of error.
In his second point of error, appellant asserts that section 42.03, as drafted and as applied, is unconstitutionally vague because it fails to fairly warn citizens exercising their right to free speech that any resulting "inconvenience" to a third party may subject them to arrest, prosecution, and conviction. Appellant urges this Court to reverse his conviction; otherwise, whenever a controversial social or religious message is lawfully expressed by a picketer, thereby causing a third party merely to alter his course of travel, the citizen exercising such rights may be arrested. Appellant also argues that section 42.03 is vague because it does not fairly differentiate between permissible and impermissible "inconvenience," thereby allowing the police unfettered discretion in making that differentiation and resulting in a significant and unwarranted chill on citizens' fundamental right of free speech.
In response, the State asserts that appellant does not have standing to complain *950 of the vagueness of section 42.03. The State contends that one who engages in conduct that is clearly proscribed by a statute cannot complain of the vagueness of the law as it might possibly be applied either to other conduct of that person or to other persons. See Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494, 102 S.Ct. 1186-1191, 71 L.Ed.2d 362 (1982); Kingsley v. State, 744 S.W.2d 191, 193 (Tex.App.Dallas 1987, pet. granted). The State maintains that under any construction of section 42.03, the record in this case establishes that appellant's conduct clearly constituted a safety hazard, which is the very type of act the statute prohibits.
A vagueness challenge is applicable to all criminal laws and not merely those that regulate speech. Bynum v. State, 767 S.W.2d 769, 773 (Tex.Crim.App.1989). As a fundamental proposition, all criminal laws must give notice to the populace as to what activity is made criminal so as to provide fair notice to persons before making their activity criminal. Id. In examining a criminal statute for vagueness, the initial inquiry must be whether the ordinary, law-abiding individual would have received sufficient information that his or her conduct risked violating a criminal law. Id. at 773-774. Assuming the enactment implicates no constitutionally protected conduct, a court should uphold the challenge only if the enactment is impermissibly vague in all of its applications. Hoffman, 455 U.S. at 494-95, 102 S.Ct. at 1191-92. An individual who engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of others. Id.
However, a defendant may challenge the constitutionality of a statute on vagueness grounds, even though the statute may not be vague as applied to his conduct, where the statute at issue purports to regulate or proscribe rights of speech or press protected by the first amendment. Coates v. City of Cincinnati, 402 U.S. 611, 619, 91 S.Ct. 1686, 1690, 29 L.Ed.2d 214 (1971) (White, J., dissenting); see Bynum, at 773-774, quoting Hoffman, 455 U.S. at 499, 102 S.Ct. at 1193. Only those statutes that purport to regulate "only spoken words," rather than conduct, see Broadrick v. Oklahoma, 413 U.S. 601, 612, 93 S.Ct. 2908, 2916, 37 L.Ed.2d 830 (1973), are considered statutes that "purport to regulate rights of speech." Cf. Gooding v. Wilson, 405 U.S. 518, 519-20, 92 S.Ct. 1103, 1104-05, 31 L.Ed.2d 408 (1972) (statute prohibiting "opprobrious words or abusive language, tending to cause a breach of peace" punishes only spoken words and does, therefore, attempt to regulate or proscribe rights of speech protected by the first amendment); Plummer v. City of Columbus, Ohio, 414 U.S. 2, 2-3, 94 S.Ct. 17, 17-18, 38 L.Ed.2d 3 (1973) (statute prohibiting "abuse [of] another by using menacing, insulting, slanderous, or profane language" was facially unconstitutional). In this instance, section 42.03 purports to regulate conduct, not speech. Thus, we conclude that the "special" standing requirement when statutes purporting to regulate speech are implicated is not applicable here. Appellant only has standing to challenge the statute as applied to his conduct.
We note that appellant fails to cite any authority in support of his proposition that the term "inconvenience" is unconstitutionally vague.[3] However, we need not address this issue because the information upon which appellant's conviction is based charges him with "standing in a position in front of the walkway refusing to move." Thus, the conduct with which appellant is charged and of which appellant was convicted falls squarely within the former, ("render[s] impassable") rather than the latter ("render[s] passage unreasonably inconvenient or hazardous") definition of "obstruct," as set forth in section 42.03(b). Therefore, we conclude that appellant has no standing to complain of the definition of "unreasonably inconvenient." Accordingly, we overrule appellant's second point of error.
In his third point of error, appellant contends that the trial court erred in finding him guilty because the information does *951 not state an offense under the law. Appellant claims that by alleging that appellant obstructed an entrance to a place of business "by standing in a position in front of the walkway refusing to move," the charging instrument unsuccessfully attempts to further specify the manner and means in which the obstruction occurred. He asserts that because the terms "entrance" and "walkway" are not defined in section 42.03 or any other provision within the Texas Penal Code, those words should be given their original meaning and common usage. Appellant further contends that because "entrance" is defined as "door, opening or passage for entering," and "walkway" is defined as "any passage used by one walking" or "a sidewalk, path, promenade," and because the information in this cause alleges that appellant "obstruct[ed] an entrance ... by standing in a position in front of the walkway," the relationship between the term "walkway" and the term "entrance" renders the allegation indecipherable. Appellant argues that the physical relationship between the walkway and the entrance is not apparent and is not alleged in the information; that by all accounts, he was pacing back and forth on the sidewalk, rather than the walkway leading to the entrance of the building, and that the information improperly alleges that he stood in a position in front of the walkway. Appellant suggests that it would have been a very simple matter to state explicitly that the appellant stood in the middle of the pathway leading to an entrance and thereby prevented passageway to the entrance, or made such passageway dangerous or unreasonably inconvenient.
The record discloses no motion to quash the information for failure to state an offense. Effective December 1, 1985,[4] article 1.14(b) of the Code of Criminal Procedure provides that if a defendant does not object to a defect, error, or irregularity of form or substance in an indictment or information before the date on which the trial on the merits commences, he waives and forfeits the right to object on appeal or in any other post-conviction proceeding. See TEX. CODE CRIM.PROC.ANN. art. 1.14(b) (Vernon Supp.1989). The purpose of the rule is explained as follows:
A major objective of this new rule was to aid in the elimination of "sand bagging" by defense counsel. Id., at 91. The habit of defense counsel of not objecting until the last minute to a defective indictment or information in the trial court and then objecting on appeal if the defendant was found guilty was not favored. Consequently, the new rule is drafted in such a way as to allow the prosecution to correct a defective indictment or information before the cause commences in the trial court. If a defective indictment or information is not objected to before the date on which the trial on the merits commences, a defendant waives any rights stemming from such defect. See Aylor v. State, 727 S.W.2d 727, 730 (Tex. App.Austin 1987, no writ).
Van Dusen v. State, 744 S.W.2d 279, 280 (Tex.App.Dallas 1987, no pet.); see Studer v. State, 757 S.W.2d 107, passim (Tex. App.Dallas 1988, pet. granted).
However, we recognize that article 1.14(b) is not applicable in situations where a charging instrument wholly fails to charge an offense. See Milam v. State, 742 S.W.2d 810, 815 (Tex.App.Dallas 1987, pet. granted). In Milam, the indictment alleged conduct which was not illegal at the time the conduct occurred. This Court noted in Milam that the complained of indictment was presented before the 1985 amendments to the Texas Constitution and article 1.14. TEX.CODE CRIM.PROC. ANN. art. 1.14 (Vernon Supp.1989). In Milam, this Court determined that the Texas Constitution defines an indictment as "a written instrument presented to a court by a grand jury charging a person with the commission of an offense." Id. Therefore, in Milam the failure to charge the defendant with criminally prohibited conduct prevented the instrument presented by the grand jury from meeting the constitutional requirements of an indictment. Id. Thus, the defendant's failure to object to the instrument was not fatal to his appeal. Id. Because the instrument presented to *952 the trial court did not constitute an indictment as defined by the Texas Constitution, the trial court's jurisdiction was not invoked. Id.
We conclude that Milam is distinguishable from the present case because the information in the instant case does charge criminally prohibited conduct. Thus, appellant has failed to preserve error. However, even assuming that error is preserved, we further conclude that the information is sufficient for reasons that follow.
It is the general rule that an indictment or information which tracks the language of the penal statute in question is legally sufficient to provide an appellant with notice of the charged offense. See Marras v. State, 741 S.W.2d 395, 401 (Tex. Crim.App.1987); Clark v. State, 577 S.W.2d 238, 240 (Tex.Crim.App.1979). The information in the case at bar states that appellant did "then and there without legal privilege or authority, knowingly and intentionally obstruct an entrance to a place of business to which the public had access by standing in a position in front of the walkway refusing to move." Thus, as worded, the information in this case alleges that appellant: (1) knowingly and intentionally; (2) without legal privilege or authority; (3) obstructed; (4) an entrance; (5) to which the public had access. The necessary elements of an offense under section 42.03(a)(1) are that the accused: (1) knowingly, intentionally, or recklessly; (2) without legal privilege or authority; (3) obstructs; (4) a highway, street, sidewalk, railway, waterway, elevator, aisle, hallway, entrance, or exit; (5) to which the public, or a substantial group of the public, has access. We conclude that the information does adequately charge appellant with the offense of obstructing a passageway and that the complained of language goes simply to manner and means, a nonjurisdictional consideration.
Moreover, although appellant does not appear to argue that he failed to receive adequate notice upon which to prepare his defense, we hold that any defect in the charging instrument did not prejudice the substantial rights of appellant. Adams v. State, 707 S.W.2d 900, 903 (Tex.Crim.App. 1986). In order to determine whether appellant received adequate notice, we must first decide whether the charging instrument failed to convey some requisite item of notice. Id. Even if the information in this case failed to convey some requisite item of notice, upon review of the record, we conclude that the alleged defect did not impact on the defendant's ability to prepare his defense. Id. Appellant's defensive strategy at trial had nothing to do with the definitions of "walkway" and "entrance" upon which the State relied, and appellant does not explain how his ignorance regarding the definition and use of the terms "entrance" and "walkway" hindered his defense. See id. at 904. Accordingly, we overrule appellant's third point of error.
In points of error four through eight, appellant contends that the evidence is insufficient to sustain the conviction because: (1) the evidence fails to establish that an order pursuant to section 42.04 was given and not promptly obeyed; (2) the evidence affirmatively establishes that an order given pursuant to section 42.04 was prospective in nature; (3) the evidence fails to establish that appellant obstructed an entry after receiving an order to desist, disperse, or otherwise remedy his violation; and (4) the evidence affirmatively establishes that appellant did not obstruct an entrance to a place of business. Section 42.04, referred to by appellant, provides the following defense:
(a) If conduct that would otherwise violate Section 42.01(a)(5) (Unreasonable Noise) or 42.03 (Obstructing Passageway) of this code consists of speech or other communication, of gathering with others to hear or observe such speech or communication, or of gathering with others to picket or otherwise express in a nonviolent manner a position on social, economic, political, or religious questions, the actor must be ordered to move, disperse, or otherwise remedy the violation prior to his arrest if he has not yet intentionally harmed the interests of others which those sections seek to protect.
(b) The order required by this section may be given by a peace officer, a fireman, a person with authority to *953 control the use of the premises, or any person directly affected by the violation.
(c) It is a defense to prosecution under Section 42.01(a)(5) or 42.03 of this code:
(1) that in circumstances in which this section requires an order no order was given;
(2) that an order, if given, was manifestly unreasonable in scope; or
(3) that an order, if given, was promptly obeyed.
(Emphasis added.)
Our review of the sufficiency of the evidence is limited to determining whether, viewing the evidence in the light most favorable to the prosecution, a 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); Girard v. State, 631 S.W.2d 162, 163 (Tex.Crim.App. [Panel Op.] 1982); Lopez v. State, 630 S.W.2d 936, 940 (Tex. Crim.App. [Panel Op.] 1982).
Appellant contends that he was expressing his views about abortion in a nonviolent manner, and that he clearly raised the defense of the application of section 42.04. Appellant asserts that he met the burden of producing evidence to raise a defense under section 42.04, and thus, the prosecution had the burden of persuasion to disprove it beyond a reasonable doubt. Appellant argues that because the evidence clearly supports inferences other than his guilt, a finding of guilt beyond a reasonable doubt is not a rational finding. Wilson v. State, 654 S.W.2d 465, 472 (Tex. Crim.App.1983) (opinion on rehearing). Appellant also maintains that he was not arrested for his failure to obey an order and that he was not ordered to remedy a violation. He further contends that if, in fact, any request or order was given, it was prospective in nature and could not have been promptly obeyed.
In this case, appellant was charged with obstruction of a passageway, pursuant to section 42.03(a)(1). In order to convict appellant once a defense is raised, the State must prove that an order "to move, disperse, or otherwise remedy the violation" was given pursuant to section 42.04. Section 42.04(b) specifies that any "order required" may be given by a "peace officer" or "any person directly affected by the violation." Thus, an order need not come solely from a police officer but may be given by anyone whose passage may be obstructed. We conclude from the evidence that Ruthenborg was a "person directly affected" by appellant's obstruction because appellant obstructed Ruthenborg as he attempted to walk down the public sidewalk to the steps and up the private walkway to the entrance of the clinic. The record reflects that appellant blocked Ruthenborg's access on two separate occasions. Ruthenborg testified that the first time he encountered appellant, he told appellant to "get the fuck away from [Ruthenborg]" and that appellant then stepped in Ruthenborg's way twice when Ruthenborg tried to go around appellant. On his second trip, Ruthenborg again encountered appellant, appellant stepped in front of Ruthenborg twice as Ruthenborg tried to step aside, and once again, Ruthenborg told appellant to "get the fuck out of [Ruthenborg's] way." Thus, the evidence is sufficient, when viewed in the light most favorable to the verdict, to establish that appellant did stand in a position in front of Ruthenborg so as to render the walkway impassable. In addition, the evidence reflects that Officer Reynolds told appellant to remain "moving or [keep] the sidewalk open and clear," to "alter his picketing actions to allow Ruthenborg free access to the private entrance," and to "move a little bit north." Accordingly, we hold that this evidence is sufficient to establish that appellant was ordered several times to move and to alter or otherwise remedy the violation by a peace officer and a "person directly affected by the violation."
We further conclude that the orders to appellant were not prospective in nature. Moreover, even if Officer Reynolds' final order ("move a little bit north so that they [have] access to the building") was prospective in nature, appellant had previously been ordered by Ruthenborg and Officer Reynolds to move. Points of error four *954 through eight are overruled. We affirm the trial court's judgment.
NOTES
[1] All section references are to the Texas Penal Code unless otherwise specified.
[2] We note that appellant asserts that section 42.03 is unconstitutional but does not challenge section 42.04.
[3] We do note that the statute specifically states "unreasonably inconvenient." TEX.PENAL CODE ANN. § 42.03(b) (Vernon 1974) (emphasis supplied).
[4] The information in this case was filed on June 18, 1987.
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T.C. Summary Opinion 2012-29
UNITED STATES TAX COURT
DANIEL W. TOMASELLO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 435-08SL. Filed March 29, 2012.
Daniel W. Tomasello, pro se.
John M. Janusz, for respondent.
SUMMARY OPINION
WELLS, Judge: The petition in this case was filed pursuant to the
provisions of section 7463.1 Pursuant to section 7463(b), the decision to be
1
Unless otherwise indicated, section references are to the Internal Revenue
Code of 1986, as amended, and Rule references are to the Tax Court Rules of
Practice and Procedure.
-2-
entered is not reviewable by any other court, and this opinion shall not be treated as
precedent for any other case. This case is before the Court on respondent’s motion
for summary judgment pursuant to Rule 121. We must decide whether respondent’s
Appeals Office abused its discretion when it upheld respondent’s notice of intent to
levy with respect to trust fund recovery penalties pursuant to section 6672 for
unpaid balances due from Tomasello Limousine, Inc. (Tomasello Limousine) for the
quarters ending December 31, 2002, March 31, 2003, June 30, 2003, September 30,
2003, December 31, 2003, and June 30, 2004 (periods in issue).
Background
The facts set forth below are based upon examination of the pleadings,
moving papers, responses, and attachments. Petitioner resided in New York at the
time he filed his petition.
During the periods in issue, petitioner was the president and owner of
Tomasello Limousine. During 2001, Tomasello Limousine’s bookkeeper
unexpectedly passed away, and petitioner was unable to find a good replacement.
Because petitioner is a mechanic and has little bookkeeping knowledge, he did not
pay close attention to bookkeeping matters. Unfortunately, the replacement
bookkeepers he hired failed to pay all of Tomasello Limousine’s taxes. According
-3-
to petitioner’s own account, at various times, he discovered that checks to pay
Tomasello Limousine’s taxes had not been printed or submitted. Although he was
aware of those failures and pointed them out to his bookkeepers, he apparently
failed to follow up and ensure that the taxes were paid.
On January 17, 2007, respondent mailed petitioner a Letter 1153, Trust Funds
Recovery Penalty Letter, proposing an assessment of trust fund recovery penalties
pursuant to section 6672 against petitioner as an individual required to collect,
account for, and pay over employment taxes for Tomasello Limousine. The Letter
1153 proposed to collect trust fund recovery penalties from petitioner with respect
to the periods in issue. The Letter 1153 was mailed to petitioner’s last known
address, which is the same address he used when he filed his petition with this
Court. Petitioner has not disputed that he received the Letter 1153, but he failed to
submit a protest to the Appeals Office.
During May 2007, petitioner hired a reliable bookkeeper, who has helped him
get Tomasello Limousine’s finances in order. Although he had originally thought
some of the tax payments were made but not recorded properly, he has been unable
to verify that any payments were made for the periods in issue. Working together
with his new bookkeeper, petitioner wrote that he “cannot find the paper trail or any
cancelled checks to substantiate the [tax] payments.”
-4-
On May 24, 2007, respondent mailed to petitioner a Letter 1058, Notice of
Intent to Levy and Notice of Your Right to a Hearing with respect to Tomasello
Limousine’s unpaid balances for the periods in issue. Petitioner submitted a Form
12153, Request for a Collection Due Process or Equivalent Hearing, which
respondent received on June 12, 2007. On the Form 12153, petitioner wrote that he
disagreed with the filing of the levy because “no court has placed an order showing
I have to pay.” Petitioner did not request a collection alternative. On August 28,
2007, Settlement Officer Kenneth Heidle mailed petitioner a letter acknowledging
that respondent’s Appeals Office had received his request for a collection due
process hearing and scheduling a telephone conference for September 14, 2007.
On September 14, 2007, Mr. Heidle held a telephone conference with
petitioner. During the telephone conference, in response to petitioner’s query, Mr.
Heidle explained how the trust fund recovery penalty operates. Petitioner
explained that he had recently filed Tomasello Limousine’s 2003 and 2004 income
tax returns and that his new bookkeeper was working on the 2005 and 2006 returns.
Petitioner explained that those returns had not been filed because of the death of
Tomasello Limousine’s previous bookkeeper. Petitioner asked Mr. Heidle to
review Tomasello Limousine’s past payments to ensure that they had been
-5-
properly credited. Petitioner mentioned that Tomasello Limousine was no longer in
operation and that he now operates a business known as Tomasello Truck and
Repair Shop.
After the telephone conference, petitioner mailed Mr. Heidle a letter dated
October 11, 2007, reiterating how Tomasello Limousine’s finances became
disorganized after the death of its bookkeeper. Petitioner also enclosed a completed
Form 433-B, Collection Information Statement for Businesses, and a copy of
Tomasello Limousine’s Form 1120S, U.S. Income Tax Return for an S Corporation,
for its 2005 tax year.
On November 30, 2007, respondent’s Appeals Office mailed petitioner a
Notice of Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 (notice of determination), sustaining the levy action. The notice of
determination stated that, according to respondent’s records, petitioner had not filed
his 2003, 2004, 2005, or 2006 U.S. Individual Income Tax Returns. The notice of
determination explained that petitioner was not eligible for any collection
alternatives because he was not current with his personal income tax filings. The
notice of determination stated that Mr. Heidle had verified that the requirements of
all applicable laws and procedures had been met and that the levy action balanced
-6-
the need for the efficient collection with the concern that the collection action be no
more intrusive than necessary.
On December 31, 2007, petitioner mailed his petition to the Tax Court. In his
petition, he wrote: “I disagree with original amount owed and have already paid
$2500.00 and also my personal income tax returns are being found personally liable
for these taxes in a court of law.”
On September 18, 2008, petitioner filed a petition with the U.S. Bankruptcy
Court for the Western District of New York (bankruptcy court). On September 22,
2008, respondent filed a Notice of Proceeding in Bankruptcy, and we issued an
order on October 3, 2008, staying the proceedings in this Court. On October 18,
2011, respondent filed a status report with this Court reporting that the bankruptcy
court had issued an order dismissing petitioner’s bankruptcy proceeding, and on
October 18, 2011, we issued an order lifting the stay on proceedings in this Court.
Discussion
Summary judgment is intended to expedite litigation and avoid unnecessary
and expensive trials and may be granted where there is no genuine issue of material
fact and a decision may be rendered as a matter of law. Rule 121(a) and (b); Fla.
Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). The moving party bears
the burden of proving that there is no genuine issue of material fact, and factual
-7-
inferences are viewed in the light most favorable to the nonmoving party.
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d 965
(7th Cir. 1994). However, the party opposing summary judgment must set forth
specific facts that show a genuine issue of material fact exists and may not rely
merely on allegations or denials in the pleadings. Rule 121(d).
The underlying liabilities in the instant case were assessed under section 6672,
which imposes penalties for failure to collect, account for, and pay over income and
employment taxes of employees. Those penalties are commonly known as trust fund
recovery penalties and are assessed and collected in the same manner as taxes
against a person who is “an officer or employee of a corporation
* * * who as such officer, employee or member is under a duty to perform” the duties
referred to in section 6672. Sec. 6671(b). Such persons are referred to as
“responsible persons”, and the term may be broadly applied. McClure v.
Commissioner, T.C. Memo. 2008-136; see generally Logal v. United States, 195
F.3d 229, 232 (5th Cir. 1999); Barnett v. IRS, 988 F.2d 1449, 1454 (5th Cir. 1993).
Any person who qualifies as a responsible person under the statute is liable for the
penalty; a right of contribution against other responsible persons exists but must be
claimed separate and apart from proceedings to collect the penalty brought by the
United States. Sec. 6672(d). The liability of a responsible person pursuant to
-8-
section 6672 is independent of the employer corporation’s duty to pay trust fund
taxes. See Cash v. United States, 961 F.2d 562, 565 (5th Cir. 1992).
A taxpayer has the opportunity to dispute the taxpayer’s liability for a trust
fund recovery penalty when he receives a Letter 1153. Mason v. Commissioner, 132
T.C. 301, 317-318 (2009); Sparkman v. Commissioner, T.C. Memo. 2009-308;
McClure v. Commissioner, T.C. Memo. 2008-136. Petitioner has not disputed that
he received a Letter 1153, but he failed to submit a protest to respondent’s Appeals
Office disputing his liability for the trust fund recovery penalty. Accordingly,
petitioner is not entitled to dispute his underlying liability before the Appeals Office
or before this Court. See Sparkman v. Commissioner, T.C. Memo. 2009-308.
Where the underlying tax liability is not in issue, we review the determination
of the Appeals Office for abuse of discretion. See Sego v. Commissioner, 114 T.C.
604, 610 (2000). In reviewing for abuse of discretion, we will reject the
determination of the Appeals Office only if the determination was arbitrary,
capricious, or without sound basis in fact or law. See Murphy v. Commissioner, 125
T.C. 301, 308 (2005), aff’d, 469 F.3d 27 (1st Cir. 2006).
Petitioner failed to file a response to respondent’s motion for summary
judgment, but he appears to make three arguments in his one-sentence petition: (1)
-9-
that he disagrees with the amount owed; (2) that respondent did not correctly apply
his payments; and (3) that he does not understand how respondent can assess the
trust fund recovery penalty against him.
With respect to his first contention, petitioner is not entitled to contest his
underlying liability before the Appeals Office or this Court because he failed to
protest the Letter 1153. See Sparkman v. Commissioner, T.C. Memo. 2009-308. As
to his second contention, petitioner acknowledged in his October 11, 2007, letter that
he has been unable to document any payments made with respect to the tax liability
in issue.
Finally, with respect to petitioner’s third argument, petitioner appears to be
confused as to how he can be held liable for the trust fund recovery penalties.
Although petitioner is not entitled to contest his underlying liabilities, we will
briefly explain why petitioner is liable for the trust fund recovery penalties.
Petitioner was the president and sole owner of Tomasello Limousine during the
periods in issue and therefore had an obligation to collect, account for, and pay over
income and employment taxes for the employees of Tomasello Limousine. Secs.
6671(b) and 6672. Pursuant to section 6672(a), a person in petitioner’s position is
liable for a penalty for willfully failing to collect, account for, and pay over such tax.
In the context of section 6672, willfulness includes a “failure to investigate or to
- 10 -
correct mismanagement after having notice that withholding taxes have not been
remitted to the Government.” Kalb v. United States, 505 F.2d 506, 511 (2d Cir.
1974). In his October 11, 2007, letter, petitioner acknowledged that he noticed on at
least two separate occasions that the taxes had not been paid, yet he failed to ensure
that the taxes were paid. Accordingly, petitioner willfully failed to collect, account
for, and pay over withholding taxes and therefore is liable for the trust fund recovery
penalty pursuant to section 6672.
On the basis of the foregoing, we hold that respondent’s Appeals Office did
not abuse its discretion, and therefore we will grant respondent’s motion for
summary judgment.
In reaching these holdings, we have considered all the parties’ arguments, and,
to the extent not addressed herein, we conclude that they are moot, irrelevant, or
without merit.
To reflect the foregoing,
An appropriate order and decision will
be entered for respondent.
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54 So.3d 1026 (2011)
FLORIDA DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES, Appellant,
v.
Kathryn COX, et al., Appellees.
No. 4D09-979.
District Court of Appeal of Florida, Fourth District.
January 26, 2011.
Wesley R. Parsons, Jack R. Reiter and Veronica Tejada Lacayo of Yoss, LLP, Miami, for appellant.
Robert C. Gilbert and Bruce S. Rogow of Alters Law Firm, P.A., Miami, Julie H. Littky-Rubin of Lytal, Reiter, Clark, Fountain & Williams, LLP, West Palm Beach, Jamie Alan Cole of Weiss Serota Helfman Pastoriza Cole & Boniske, P.A., Fort Lauderdale, and Michael J. Pucillo of Berman DeValerio, Palm Beach Gardens, for appellees.
WARNER, J.
In an inverse condemnation action, the Department of Agriculture appeals the trial court's order denying its request for costs as the prevailing party pursuant to section 57.041, Florida Statutes. This action involves the Department's destruction of backyard citrus trees of homeowners in Broward County in the Department's futile attempt to eradicate citrus canker in this state.[1] Even though the Department was defeated in its claim that no taking occurred,[2]and the jury awarded damages, which resulted in a net award to the class of plaintiffs of $4,000,000, when the Department argued that no damages occurred, the Department still claims it prevailed because the class sought substantially more in damages than what the jury awarded.
We find the Department's arguments to be frivolous. No matter how one looks at the facts, the owners prevailed on the significant issues. The mere fact that the owners sought more in damages than the jury awarded does not mean that they did not prevail on both issues of liability and damages.
Moreover, section 57.041, Florida Statutes, applies to all civil actions except those that are governed by specific statutes containing more particular provisions concerning the taxation of costs. See Morales v. Rosenberg, 919 So.2d 476, 480 (Fla. 3d DCA 2005). Sections 73.091 and 73.092 *1027 specifically relate to condemnation proceedings, including inverse condemnation proceedings. See Volusia County v. Pickens, 435 So.2d 247, 248 (Fla. 5th DCA 1983). Those statutes govern these proceedings.
Affirmed.
POLEN and STEVENSON, JJ., concur.
NOTES
[1] The history of the citrus canker eradication program is contained in Haire v. Florida Department of Agriculture, 870 So.2d 774 (Fla. 2004).
[2] Florida Dep't of Agriculture v. Bogorff, 35 So.3d 84 (Fla. 4th DCA 2010), review denied, 48 So.3d 835 (Fla.2010).
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509 F.2d 574
*Freitagv.Estelle
74-2973
United States Court of Appeals Fifth Circuit
2/17/75
1
W.D.Tex.
AFFIRMED
2
---------------
* Summary Calendar case; Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of N
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285 F.3d 1035
BAY VIEW, INC., Plaintiff-Appellant,v.UNITED STATES, Defendant-Appellee.
No. 00-5097.
United States Court of Appeals, Federal Circuit.
DECIDED: March 25, 2002.
1
Samuel J. Fortier, Fortier & Mikko, P.C., of Anchorage, AK, argued for plaintiff-appellant.
2
Sandra Slack Glover, Attorney, Environment and Natural Resources Division, Department of Justice, of Washington, DC, argued for defendant-appellee. On the brief were Lois J. Schiffer, Assistant Attorney General; Susan L. Pacholski, and David C. Shilton, Attorneys.
3
ON COMBINED PETITION FOR PANEL REHEARING AND REHEARING EN BANC
ORDER
4
A combined petition for panel rehearing and rehearing en banc having been filed by the Appellant, and a response thereto having been invited by the court and filed by the Appellee, and the petition for rehearing having been referred to the panel that heard the appeal, and thereafter the petition for rehearing en banc and response having been referred to the circuit judges who are in regular active service, and authorized to request a poll whether to rehear the appeal en banc,
5
A poll having been requested, taken, and failed,
6
Upon consideration thereof,
IT IS ORDERED THAT:
7
(1) The petition for rehearing is denied.
8
(2) The petition for rehearing en banc is denied.
9
(3) The mandate of the court will issue on April 1, 2002.
10
Circuit Judge GAJARSA, with whom Circuit Judge NEWMAN, Circuit Judge CLEVENGER, and Circuit LINN join, dissents from the denial of the petition for rehearing en banc.
11
GAJARSA, Circuit Judge, with whom NEWMAN, CLEVENGER, and LINN, Circuit Judges, join, dissenting from the denial of the petition for rehearing en banc.
12
In Bay View, Inc. v. United States, 278 F.3d 1259 (Fed.Cir.2001) ("Bay View"), a divided panel of this court affirmed the decision of the Court of Federal Claims dismissing Bay View's complaint for failure to state a claim upon which relief may be granted. The panel majority determined that Bay View had no vested property interest on which to predicate its taking claim. Id. at 1262. Judge Newman dissented. Id. at 1266-68. Because Judge Newman was correct that Bay View had a vested property interest and that its complaint therefore raised "a straightforward issue cognizable under the Fifth Amendment," id. at 1266, and because of the gravity of the error associated with the panel majority's conclusion to the contrary, this court should have granted the petition for rehearing en banc. The failure to do so compounds the error committed by the majority. For the reasons stated below, we must respectfully dissent from this court's failure to grant the petition.
13
Bay View's complaint alleged that a 1995 amendment to the Alaska Native Claims Settlement Act ("ANCSA"), among other things, effected a taking under the Fifth Amendment. Congress enacted the ANCSA in 1971 to eradicate the cloud on title to land ownership in Alaska posed by claims of aboriginal title. See H.R. Rep. 92-523, reprinted in, 1971 U.S.C.C.A.N. 2192, 2193 (stating that the purpose "is to provide an equitable solution to the claims made by the Natives of Alaska through a combination grant of land and money"). To this end, the ANCSA extinguished all claims of aboriginal title in Alaska in exchange for granting ownership of certain interests in land to twelve native-owned Regional Corporations1 and to approximately 220 smaller, native-owned Village Corporations. Bay View, 278 F.3d at 1262; see also H.R. Rep. 92-532, reprinted in, 1971 U.S.C.C.A.N. 2192, 2194 (stating that judicial settlement of claims to aboriginal title would "take many years, would involve great administrative expense, and would involve a Federal liability of an undeterminable amount," that therefore a legislative settlement "is the only practical course to follow," and that enactment of the ANCSA "would provide this legislative settlement").
14
The ANCSA gave the Village Corporations surface estates in approximately 22 million acres of land, and gave the Regional Corporations 16 million acres of land in fee as well as the subsurface estates and timber rights for the 22 million acres in which the Village Corporations received surface rights. Bay View, 278 F.3d at 1262. Bay View is one of these Village Corporations. Id. Although the ANCSA gave the Regional Corporations the timber rights in those 22 million acres, it also required the Regional Corporations to share with each other a percent of "all revenues received by each Regional Corporation from the timber resources and subsurface estate patented to it pursuant to this chapter," 43 U.S.C. § 1606(i). Section 1606(j) then required each Regional Corporation to share with the Village Corporations in its region a percentage of its income from certain sources, including revenues received under § 1606(i). Bay View, 278 F.3d at 1262; see also Bay View, Inc. v. Ahtna, Inc., 105 F.3d 1281, 1283 (9th Cir.1997) ("[E]ach Regional Corporation must distribute 50% of the `shared revenue' to its assigned Village Corporations and at-large shareholders.") (citing § 1606(j)) ("Ahtna"); H.R. Rep. 92-523, reprinted in 1971 U.S.C.C.A.N. 2192, 2198-99 (stating that the bill intends "to avoid the creation of one or more giant corporate entities ... that might become in effect the third level of government" in Alaska, and that "[a]lthough twelve regional corporations are contemplated, a substantial portion of the funds received by them must be passed on to the village level") (emphasis added).2
15
In order to provide a value from which the "shared revenue" could be determined, Congress set the tax basis for the land at its estimated fair value at the time of receipt, and set the basis for land interests attributable to an interest in a block of timber at its fair value at the time of first commercial development. See 43 U.S.C. § 1620(c) (1994 & Supp. III 1997). This value was set in the early 1970's. Due to various economic factors, when much of the timber was sold in the 1980's, the Regional Corporations incurred losses. These losses represented the difference between the fair value of the timber rights and the value the Regional Corporations realized when the timber was sold.3 These losses were reported as accounting losses realized directly from the timber sales, permitting many of the Regional Corporations to report net operating losses ("NOLs") for tax purposes.
16
These accounting losses were particularly valuable assets, because, between 1984 and 1988, Alaskan Native Corporations were specifically exempt by statute from the normal Internal Revenue Service restrictions on the sale of net operating losses. Thus, by a specific act of Congress intended to benefit the Alaskan natives, the Regional Corporations were able to sell the net operating losses to profitable companies including Campbell Soup and the Marriott Corporation, thereby converting these accounting losses obtained from the timber sales to a net gain. Cf. Ahtna, 105 F.3d at 1284 (calling this device "a discreet way to give the Alaskan natives a subsidy without having to list it as a budget item" (citing 132 Cong. Rec. S8175-76 (daily ed. June 23, 1986) (statement of Sen. Stevens))). The Regional Corporations typically received about $30 for a $100 loss, and, in the end, sold approximately $1.5 billion in losses, converting them into millions of dollars of profitable revenue.
17
The Village Corporations sought to obtain their revenue share from the sale of the NOLs, but the Regional Corporations refused. As the Ninth Circuit explained:
18
Although section 7(i) of ANCSA requires sharing of resource-based revenue among the Regional Corporations, 43 U.S.C. § 1606(i), ten of the Regional Corporations agreed not to share NOL revenue as part of a Mutual Assistance Agreement (MAA). This cut out village corporations and at-large shareholders whose Regional Corporations were unable to get in on the bounty.
19
Ahtna, 105 F.3d at 1284 (footnote omitted, noting that the Regional Corporations contended that NOL revenues were not sharable under section 7(i) because they were from tax law not timber).
20
Bay View filed a class action on behalf of the Village Corporations, which the United States District Court for the District of Alaska dismissed. Id. On appeal, the Ninth Circuit affirmed the dismissal on the grounds that an intervening amendment to the ANCSA "wiped out any claim appellants might have had to shared NOL revenue." Id. (citing Pub. L. No. 104-42, § 109, 109 Stat. 353, 357 (1995) (codified at 43 U.S.C. § 1606(i)(2)) ("For purposes of this subsection, the term `revenues' does not include any benefit received or realized for the use of losses incurred or credits earned by a Regional Corporation.")). Congress made this amendment fully retroactive, thereby taking away from the Village Corporations, by unilateral Congressional action, their right to share in this revenue. Id. The Ninth Circuit also held that it lacked jurisdiction to address the merits of Bay View's taking claim because the appellants were entitled to bring that claim before the Court of Federal Claims, pursuant to the Tucker Act. Id. at 1285.
21
Bay View then brought this suit in the Court of Federal Claims. Bay View complained that the 1995 amendment changed the law and took away a vested property right, and that it was therefore entitled to just compensation pursuant to the Fifth Amendment. The panel majority affirmed the Court of Federal Claims' determination that Bay View failed to state a claim because the Village Corporations never had a property interest in a portion of the proceeds from the sale of NOLs generated by the timber sales. Bay View, 278 F.3d at 1266. It so concluded because it held that the Village Corporations had a right only to revenue "from the timber resources" under §§ 1606(i) and (j). Id. at 1263-64. Proceeds from the sale of NOLs, it held, were a separate business transaction; they were not from the sale of timber resources within the meaning of the statute because they were "not directly from the sale of natural resources." Id. at 1264 (emphasis added).
22
This conclusion fails to comprehend that the NOLs are in fact revenues derived from the timber sales. This failure is grave error. The net operating losses represented the negative asset value of the timber after it was sold at less than the tax basis established by Congress. It is true that Congress may not have intended to confer upon the Village Corporations a right to share in all other future business income; however, this was limited to revenue the Regional Corporations generated by investing the portion of residual timber sale proceeds they were entitled to keep (rather than required to share) in subsequent business transactions. In contrast, "[s]tatute and precedent make quite clear that Bay View had a property right in the full proceeds of the timber sales," id. (Newman, J., dissenting) (emphasis added), in the first instance. Hypothetically, if the Regional Corporations had structured the timber sales such that they sold timber rights in exchange for stock in a corporation, and then sold that stock for cash in a subsequent transaction, surely the Regional Corporations could not escape their statutory obligation to share the timber sale proceeds by virtue of that "indirectness." If the stock were subsequently sold at a loss, the result would be the same. Substituting "NOLs" for "stock," that is precisely what happened in this case. Either way, the intervening paper transaction fails in principle to sever the connection between the revenue received and the value of the timber.
23
The sale of the net operating losses was not a subsequent business transaction that increased the value of timber proceeds above and beyond a portion that the Regional Corporations had already shared. It was the realization of revenue in exchange for the negative asset value of the timber. This accounting loss was the timber value that the Regional Corporations had yet to share. Had the Regional Corporations sold the timber for a profit, they would unquestionably have been obligated to share that profit, and, moreover, that profit would have been calculated based upon the Regional Corporations' statutory tax basis in the timber. The tax basis is only a reference point determinative of the fair value of the timber transferred pursuant to the ANSCA. The tax basis caused the Regional Corporations to account for a tax loss in the sale of the timber rather than a profit, which tax loss is the operating loss gainfully sold by the Regional Corporations. This tax loss is an asset derived directly from the timber sale, which was monetized by its sale to profitable corporations. It was a property interest derived from the sale of timber that the Regional Corporations were required to share with the Village Corporations.
24
That the sale of NOLs incurred from timber sales generated "revenue[] received... from the timber resources," 43 U.S.C. § 1606(j), prior to the 1995 amendment is underscored by the substance of the amendment itself. Notably, the new subsection created by that amendment in 1995, § 1606(i)(2), does not exclude NOL proceeds from the sharing requirement on the grounds that revenue generated from such proceeds fails to constitute revenue generated from, or directly from, the timber resources. Rather, the amended subsection excludes NOL proceeds from the definition of "revenue" entirely. See 43 U.S.C. § 1606(i)(2) (Supp. V 1999) ("For purposes of this subsection, the term `revenues' does not include any benefit received or realized for the use of losses incurred or credits earned by a Regional Corporation."). Prior to that amendment, no provision of the ANCSA specifically defined the term "revenue." It must therefore have been construed according to its plain meaning, viz. the return, yield, or profit from an income source. See XIII The Oxford English Dictionary 815-16 (2d ed. 1989) (defining revenue as, inter alia, "[t]hat which comes in to one as a return from property or possessions ... income from any source (but esp. when large and not directly earned)"). Prior to their specific exclusion from the definition, proceeds from the sale of NOLs fell within the plain meaning of the term "revenue." Those NOLs incurred from timber sales, when sold, therefore generated revenue from the timber resources; there is simply no other resource from which they could be said to originate. This alteration to the definition of "revenue" cannot properly be deemed mere clarification of the law. It altered the plain meaning of "revenue," and, in doing so, it eviscerated the sharing requirement previously applicable to the proceeds of the sale of NOLs incurred from the sale of timber.
25
Prior to the 1995 amendment to the ANCSA, in exchange for extinguishing Native aboriginal title claims in Alaska, Congress gave Bay View a vested property right to a portion of the full fair value of the timber — to "all revenues received by each Regional Corporation from the timber resources." 43 U.S.C. § 1606(i) (1994) (emphasis added). Congress retroactively revoked that right. As a result, Bay View has a cognizable Fifth Amendment claim. That claim should have been heard on the merits, not dismissed on the pleadings. For these reasons, we respectfully dissent.
Notes:
1
Originally, the ANCSA established only twelve Regional Corporations. A thirteenth Regional Corporation, however, was subsequently established to represent those Alaskan Natives living in the lower forty-eight States,see 43 U.S.C. § 1606(c).
2
The sharing requirement is now 70 percentSee 43 U.S.C. § 1606(i)(1) (1994 & Supp. V 1999).
3
The losses were derived artificially because of the tax basis established by CongressCf. 132 Cong. Rec. 14943 (statement of Sen. Stevens, June 23, 1986) (explaining that for accounting purposes Native Corporations cannot carry on their books many of the assets received under the ANCSA "because it is virtually impossible to make a solid estimate of the value of these assets" under generally accepted accounting principles, but noting that Native Corporations "are entitled to recognize a cost basis for tax purposes" pursuant to the legislation). Had Congress set the tax basis at zero, for instance, there would have been no loss from the sale of the timber rights, and any and all proceeds would have been profits from which the "shared revenue" would derive.
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600 N.E.2d 70 (1992)
234 Ill. App.3d 615
175 Ill.Dec. 447
James BINGHAM and Linda Bingham, his wife, d/b/a "Winner's Circle" and "Winner's Circle Speed & Custom", and Winner's Circle Speed & Custom, Inc., an Illinois Corporation, Plaintiffs-Appellants,
v.
INTER-TRACK PARTNERS, an Illinois Partnership, Defendant-Appellee.
No. 3-91-0790.
Appellate Court of Illinois, Third District.
September 8, 1992.
*72 James T. Bradley (argued), Joliet, for James Bingham.
Philip Petti, Chicago, Michael J. Martin (argued), Dunn, Martin & Miller, Ltd., Joliet, for Inter-Track Partners.
Justice McCUSKEY delivered the opinion of the court:
Plaintiffs James and Linda Bingham are the sole shareholders of plaintiff Winner's Circle Speed and Custom, Inc. Plaintiffs appeal from a judgment in favor of defendant, Inter-Track Partners, in an action to prevent defendant from using the trade name "Winner's Circle."
Plaintiffs contend that the trial court erred when it: (1) found plaintiffs' mark was invalid; (2) found that no likelihood of confusion existed between the parties' marks; and (3) refused to award attorney fees for willful infringement of plaintiffs' mark.
We find that the plaintiffs have established: (1) a protectable trade name; (2) that a likelihood of confusion does exist between the parties' marks; and (3) that the defendant's infringement was willful, and therefore, plaintiffs are entitled to reasonable attorney fees and costs.
Accordingly, we reverse the judgment of the trial court. We find that the plaintiffs are entitled to injunctive relief to protect their trade name. Therefore, we remand this cause to the trial court so that a proper determination can be made of the appropriate geographical area where the defendants will be enjoined from using the names "The Winner's Circle" or "Winner's Circle."
The record shows that plaintiffs sell auto racing, performance and sports car equipment under the trade names "Winner's Circle" and "Winner's Circle Speed and Custom." Plaintiffs operate retail stores in Galesburg, Bradley, and Joliet, Illinois. Plaintiffs have continuously used the "Winner's Circle" trade names since they began doing business in Joliet on May 1, 1971. Plaintiffs have recently achieved annual sales of approximately $2.5 million.
In April 1990, defendant obtained a certificate of registration from the Illinois Secretary of State for the mark "The Winner's Circle." In October 1990, defendant opened an off-track betting parlor and restaurant in Joliet named "The Winner's Circle." Just prior to defendant's grand opening, plaintiffs brought their action for injunctive relief.
Plaintiff's three-count amended complaint sought to enjoin defendant, under principles of common law trade name infringement, from using the trade names "The Winner's Circle" or "Winner's Circle". Plaintiffs' amended complaint also sought cancellation of defendant's Illinois service mark registration and an award of attorney fees for willful infringement under section 312 of the Uniform Deceptive Trade Practices Act (Ill.Rev.Stat.1989, ch. 121½, par. 312).
Following a bench trial, the trial court entered judgment for defendant. The trial court found no evidence that the defendant: (1) was likely to expand into plaintiffs' business; (2) portrayed its business as plaintiffs' business; or (3) intended to deprive plaintiffs of their customers or obtain a competitive edge.
The trial court further found that the services offered by the parties were completely different, and that the likelihood of confusion between the businesses' marks was slight. The trial court determined that the plaintiffs had failed to prove the name "Winner's Circle" was so identified with their business that it entitled them to exclusive use of the name. The trial court also found no evidence of willful infringement, and therefore denied plaintiffs' request for attorney fees. Based upon these findings, *73 the trial court denied plaintiffs' request for injunctive relief.
The resolution of plaintiffs' action for trade name infringement involves a two-step analysis. The court must first determine if the plaintiffs' mark is a valid mark. Next, the court must determine if the alleged infringer's use of a similar mark creates a "likelihood of confusion" on the part of the consuming public. Thompson v. Spring-Green Lawn Care Corp. (1984), 126 Ill.App.3d 99, 105, 81 Ill.Dec. 202, 208, 466 N.E.2d 1004, 1010.
Whether a trade name is valid and, therefore, protectable, depends upon its placement in a range of classifications. (Miller Brewing Co. v. G. Heileman Brewing Co. (7th Cir.1977), 561 F.2d 75, 79.) Here, the parties agree that the validity of the "Winner's Circle" mark turns upon whether it can be classified as a "suggestive" term.
"`If [a mark] stands for an idea which requires some operation of the imagination to connect it with the goods, it is suggestive.'" (Union Carbide Corp. v. Ever-Ready, Inc. (7th Cir.1976), 531 F.2d 366, 379 (quoting A. Seidel, S. Dalroff, and E. Gonda, Trademark Law and Practice sec. 4.06, at 77 (1963)).) A suggestive term suggests rather than describes an ingredient or characteristic of the goods and requires the observer or listener to use their imagination and perception to determine the nature of the goods. (Miller, 561 F.2d at 79.) Suggestive terms merely hint at the product or the result of using the product and yet, viewed in the abstract, do not readily lead to an identification of the product area. Thompson, 126 Ill.App.3d at 107-08, 81 Ill.Dec. at 209-10, 466 N.E.2d at 1011-12 (citing Intellectual Property Law (Ill.Inst.Cont.Legal Educ.1978)).
Applying this analysis to the mark at issue, we find that plaintiffs' trade name is "suggestive" and, therefore, subject to protection. "Winner's Circle" is not simply descriptive of plaintiffs' goods and services. The name "Winner's Circle" requires the operation of a person's imagination to connect it with plaintiffs' goods and services. Consumers must associate "winning," or a place for winners, with plaintiffs' racing, speed, performance and custom automotive equipment.
The exclusive right to use a suggestive term as a trade name vests in the party who first used the term in a particular market. (Thompson, 126 Ill.App.3d at 109, 81 Ill.Dec. at 210-11, 466 N.E.2d at 1012-13.) State registration of a trade name does not establish any substantive rights which would not otherwise exist. Mars, Inc. v. Curtiss Candy Co. (1972), 8 Ill.App.3d 338, 343, 290 N.E.2d 701, 704.
Here, the exclusive right to use the mark clearly belongs to plaintiffs. The evidence shows that the plaintiffs have continuously used the "Winner's Circle" mark since 1971. Based upon Thompson, the plaintiffs are entitled to protection if the evidence indicates a likelihood of confusion on the part of the consuming public due to defendant's use of a similar mark. (Thompson, 126 Ill.App.3d at 109-10, 81 Ill.Dec. at 211, 466 N.E.2d at 1013.) Evidence of infringement of a valid trademark is found where the evidence indicates a likelihood of confusion, deception or mistake by ordinary purchasers. Thompson, 126 Ill.App.3d at 110, 81 Ill.Dec. at 211, 466 N.E.2d at 1013.
In determining whether likelihood of confusion exists, courts typically consider such factors as: (1) the similarity of the marks in appearance and suggestion; (2) the area and manner of current use; (3) the degree of care likely to be exercised by customers; (4) the strength of the complainant's mark; and (5) actual confusion. (Thompson, 126 Ill.App.3d at 110-11, 81 Ill.Dec. at 212, 466 N.E.2d at 1014.) It is not necessary to resolve all factors in favor of plaintiffs to sustain their claim of infringement.
Evidence of actual confusion is not necessary to support injunctive relief, although such evidence weighs in favor of injunctive relief. (Cullen Electric Co. v. Cullen (1991), 218 Ill.App.3d 726, 735, 161 Ill.Dec. 412, 418, 578 N.E.2d 1058, 1064.) A latecomer owes a duty to take affirmative *74 precautions sufficient to make confusion in the use of similar service marks improbable. Thompson, 126 Ill.App.3d at 111, 81 Ill.Dec. at 212, 466 N.E.2d at 1014.
From our review of the record, we find that the trial court was presented with substantial evidence of actual confusion. The record shows that both parties received telephone calls, freight shipments, and U.S. mail deliveries intended for the other. Testimony indicated that telephone directory assistance operators confused the two businesses, despite efforts by telephone company supervisors to alleviate the problem. The trial court heard evidence of misdirected bills and an unemployment compensation claim intended for defendant which was filed against plaintiffs. Customers interested in defendant's betting parlor began visiting plaintiffs' store even before defendant opened its facility. Plaintiffs received a number of inquiries from its customers questioning whether plaintiffs had relocated, expanded their business, or allowed the use of its name by defendant's betting parlor. In short, confusion among the consuming public occurred even prior to defendant opening its doors, and evidence of such confusion was presented through the time of trial.
We conclude that based upon the similarity of the marks and defendant's attempted concurrent use of the mark in the Joliet area that a likelihood of confusion will indefinitely exist between the businesses. Plaintiffs' establishment and use of a valid trade name prior to defendant's use affords plaintiffs the right to enjoin the defendant from using a mark likely to confuse or mislead the public.
Plaintiffs' prayer for relief requested that defendant be permanently enjoined from using "The Winner's Circle" or "Winner's Circle" trade names within a protected "trade area." However, plaintiffs presented insufficient evidence to determine the parameters of this trade area. Therefore, we remand the cause for a proper determination of the boundaries of plaintiffs' "zone of protection." See, e.g., Brewer v. Egyptian Sports, Inc. (1984), 122 Ill.App.3d 1022, 78 Ill.Dec. 401, 462 N.E.2d 520.
Plaintiffs also requested cancellation of defendant's Illinois registration of the service mark "The Winner's Circle." Pursuant to statute, the Secretary of State is required to cancel any registration where the circuit court finds, inter alia, that the registrant is not the owner of the mark, that the registration was granted contrary to the Act, or that the registration was obtained fraudulently. (Ill.Rev.Stat.1989, ch. 140, par. 16(A)(4).) Plaintiffs do not allege that any of these factors are present, but apparently desire that we order cancellation "on any ground" (Ill.Rev. Stat.1989, ch. 140, par. 16(A)(5)). We decline to do so.
Defendant obtained registration of the mark based upon its first use at its Chicago location on September 8, 1987. The record shows that defendant was not aware of plaintiffs' mark until the summer of 1990. Based upon the evidence, we cannot say that defendant's mark was obtained fraudulently or contrary to the trademark act.
Plaintiffs contend that the trial court erred in refusing to enjoin defendant's use of the "Winner's Circle" trade name as a violation of the Uniform Deceptive Trade Practices Act and in refusing to award attorney fees under the Act. We agree. Prior to a consideration of fees, we first conclude that the trial court erred in refusing to enter an injunction in favor of plaintiffs. Again applying the foregoing analysis, we find that injunctive relief is warranted when a party's trade practice creates a likelihood of confusion or misunderstanding (Ill.Rev.Stat. ch. 121½, pars. 312(2), (3), (12) and 313).
The Act allows costs and attorneys' fees to be assessed in favor of a plaintiff if the court finds that the defendant willfully engaged in a deceptive trade practice. (Ill. Rev.Stat.1989, ch. 121½, par. 313.) The trial court, however, found "no evidence of bad faith intent by defendant to benefit from [plaintiffs'] goodwill and reputation * * * and therefore insufficient proof of willful infringement justifying an award of attorneys fees [was presented] * * *." *75 However, we find that the trial court's determination was against the manifest weight of the evidence.
Sufficient evidence was presented to show that defendant had actual knowledge of plaintiffs' prior use of the "Winner's Circle" trade name and nonetheless disregarded plaintiffs' common law rights in the name. In a cease and desist letter dated May 25, 1990, plaintiffs notified defendant of their established trade name and their intent to protect it. This letter placed defendant on notice of plaintiffs' long-standing prior use of "Winner's Circle." Despite this warning, defendant proceeded to implement and promote "The Winner's Circle" in connection with the October 1990 opening of the Joliet betting parlor. Defendant further admitted that it was aware of plaintiffs' mark prior to promoting its business. We find that the defendant made a reasoned, deliberate business decision to proceed with "The Winner's Circle" despite plaintiffs' protest.
Plaintiffs presented sufficient evidence in the trial court of reasonable attorney fees and costs of $36,443.59. Also, plaintiffs have requested that we allow $7,500 as reasonable attorney fees for their appeal. We find both amounts to be reasonable. Therefore, we award plaintiffs' attorney fees and costs of $43,943.59.
In summary, we reverse the judgment of the circuit court of Will County and order an award of plaintiffs' attorney fees of $43,943.59. We remand for a determination by the trial court of the area of protection for plaintiffs' use of the "Winner's Circle" trade names. We decline to order cancellation of defendant's Illinois service registration.
Reversed and remanded.
GORMAN and HAASE, JJ., concur.
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ACCEPTED
03-13-00760-CR
3718822
THIRD COURT OF APPEALS
AUSTIN, TEXAS
1/9/2015 3:56:06 PM
JEFFREY D. KYLE
CLERK
NO. 03-13-00760-CR
IN THE COURT OF APPEALS FILED IN
3rd COURT OF APPEALS
THIRD DISTRICT AUSTIN, TEXAS
________________________________________
1/9/2015 3:56:06 PM
JEFFREY D. KYLE
JAMES BROWN, Clerk
APPELLANT
VS.
THE STATE OF TEXAS,
APPELLEE
________________________________________
THE STATE’S MOTION TO ABATE APPEAL
AND
MOTION FOR APPELLANT’S MOTION TO BE HELD IN
ABEYANCE
TO THE HONORABLE JUSTICES OF THE COURT OF APPEALS:
The State of Texas, by and through the District Attorney for Travis
County, respectfully moves this Court for its order abating the instant appeal
and holding in abeyance the pending motion of the appellant styled Motion
to Abate Appeal and Remand for Hearing on Motion for New Trial and for
Permission to File Out of Time Motion for New Trial (herein referred to as
“the appellant’s motion”).
In support of the instant motion, the State asserts as follows:
1. Procedural background
On May 29, 2013, a Travis County grand jury filed an indictment
charging the appellant with three counts of the felony offense of obstruction
or retaliation. CR 19. One of the victims named in the indictment was
employed, at the time of the offense, as a Travis County Assistant District
Attorney and continues to be so employed.
On April 5, 2013, the Travis County District Attorney appointed
attorney Corby Holcomb to serve as Special Assistant District Attorney for
the purpose of representing the State in the case styled State of Texas v.
James A. Brown, Cause Number D1DC13-300630. CR 10. For the Court’s
convenience, a copy of the document reflecting that appointment is attached
hereto.
On October 23, 2013, a bench trial was held in the 331st District
Court. The trial court (the Honorable David Crain presiding) found the
appellant guilty of all three counts and, on each count, assessed the
appellant’s punishment at confinement for a term of 15 years in the
Institutional Division of the Texas Department of Criminal Justice. CR 51-
58.
The appellant’s motions for new trial were filed on October 31 and
November 1, 2013. CR 59-66. Notice of appeal was filed on November 8,
2
2013, and on January 30, 2014. CR 83, 107. The trial court certified that
the appellant has the right of appeal. CR 84.
On December 29, 2014, the appellant filed his Motion to Abate
Appeal and Remand for hearing on Motion for New Trial and for
Permission to File Out of Time Motion for New Trial (herein referred to as
“the appellant’s motion”).
2. This appeal should be abated
In light of the fact that one of the appellant’s victims is currently
employed as an Assistant District Attorney, and the fact that a special
prosecutor was appointed to represent the State in the proceedings occurring
in the 331st District Court, the State of Texas asserts that it would be
appropriate for the State to be represented by a special prosecutor in relation
to the instant appellate proceedings.
Abatement of this appeal is warranted because it is presently unclear
whether the State be represented during the instant appellate proceedings by
Special Assistant District Attorney Holcomb or, alternatively, by a different
special prosecutor. It appears that Mr. Holcomb has not been served with
appellant’s motion or with the appellant’s brief. The State respectfully
requests that the appeal be abated for a period of time reasonably sufficient
3
to enable the State to secure the services of a special prosecutor, whether it
be Mr. Holcomb or a different individual.
3. The appellant’s motion should be held in abeyance
Because the special prosecutor who will represent the State in the
proceeding has been firmly identified and has not been served with the
appellant’s motion, the State requests that, as part of the above-requested
abatement, the appellant’s motion be held in abeyance. Further, the State
requests that the special prosecutor be afforded an adequate opportunity to
respond to the appellant’s motion after these proceedings are reinstituted and
after that individual receives service of the appellant’s motion.
PRAYER
Wherefore, the State requests that this Court abate the instant appeal
and hold the appellant’s motion in abeyance.
4
Respectfully submitted,
ROSEMARY LEHMBERG
District Attorney
Travis County, Texas
/s/ M. Scott Taliaferro
M. Scott Taliaferro
Assistant District Attorney
Director, Appellate Division
State Bar No. 00785584
P.O. Box 1748
Austin, Texas 78767
Phone No. (512) 854-3626
Fax. No. (512) 854-4810
[email protected]
[email protected]
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i), I hereby certify,
based on the computer program used to generate this motion, that this
motion contains 636 words, excluding words contained in those parts of the
brief that Rule 9.4(i) exempts from inclusion in the word count.
/s/ M. Scott Taliaferro
M. Scott Taliaferro
Assistant District Attorney
5
CERTIFICATE OF SERVICE
I hereby certify that, on this 9th day of January, 2015, a copy of the
foregoing motion was sent, via U.S. mail, email, facsimile, or electronically
through the electronic filing manager, to the following attorney for the
appellant:
Tanisa Jeffers, Esq.
Brian Bernard, Esq.
Bernard & Associates
1203 Baylor Street
Austin, TX 78703
Fax: 512.478.9827
Email: [email protected]
[email protected]
/s/ M. Scott Taliaferro
M. Scott Taliaferro
Assistant District Attorney
6
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556 F.2d 556
Hollandv.County Court of Nassau County
No. 76-2084
United States Court of Appeals, Second Circuit
11/24/76
1
E.D.N.Y.
AFFIRMED
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Case: 18-10122 Document: 00514788089 Page: 1 Date Filed: 01/09/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 18-10122 January 9, 2019
Lyle W. Cayce
SOUTHWEST AIRLINES COMPANY, Clerk
Plaintiff - Appellant
v.
LOCAL 555, TRANSPORT WORKERS UNION OF AMERICA AFL-CIO,
Defendant - Appellee
Appeal from the United States District Court
for the Northern District of Texas
Before WIENER, SOUTHWICK, and COSTA, Circuit Judges.
WIENER, Circuit Judge:
Plaintiff-Appellant Southwest Airlines Company (“Southwest”) and
Defendant-Appellee Local 555, TWU AFL-CIO (“Local 555”), the union
representative for Southwest’s ramp, operations, provisioning, and freight
agents, agreed to a new collective bargaining agreement (“CBA”). The new
CBA was ratified by Local 555’s membership on February 19, 2016 and signed
by the parties on March 16, 2016. The CBA contains provisions (1) stating that
it would become “effective” after Southwest accepted the agreement and the
union ratified it and (2) requiring that grievances be filed within ten working
days of notice of a management decision. On March 28, 2016—within ten
working days after the CBA was signed but more than ten working days after
it was ratified—Local 555 filed a grievance against Southwest for using non-
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union vendors to clean the interiors of “remaining overnight” (“RON”) aircraft.
In arbitration, Southwest challenged the grievance as untimely because it was
filed more than ten working days after the CBA was ratified. The arbitrator
ruled that the grievance was timely because Local 555 filed it within ten
working days after the CBA was signed.
Southwest sought judicial review of the arbitration award, arguing that
the arbitrator exceeded his jurisdiction by ignoring the CBA’s terms. The
district court declined to vacate the arbitrator’s ruling, primarily based on the
narrow scope of judicial review of labor-arbitration awards. Southwest
appealed.
Despite the significant deference that we must pay to arbitrators, this
case is an example of when an arbitrator goes too far. The terms of the CBA
expressly state that it would become effective upon ratification. The CBA does
not mention “signing” or “execution,” and does not have any language linking
its effective date to the signing date. Despite this, the arbitrator ruled that the
CBA became effective on the date it was signed. In so doing, the arbitrator
ignored the unambiguous terms of the CBA. We therefore reverse and remand.
I. FACTS AND PROCEEDINGS
Southwest is a Texas corporation and a “common carrier by air” under
the Railway Labor Act (“RLA”), 45 U.S.C. § 181. Local 555 is an unincorporated
labor organization and the exclusive collective bargaining representative for
the approximately 13,000 ramp, operations, provisioning, and freight agents
Southwest employs. Southwest and Local 555 are parties to a CBA that
governs rates of pay, work rules, and working conditions.
Local 555 disputed Southwest’s use of non-union, third-party contractors
instead of Southwest’s unionized employees to clean the interiors of RON
aircraft, i.e., planes that spend the night parked at airports. Southwest has
contracted with third parties to perform this work since 1982. Local 555
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contended that the practice violated a CBA provision about the use of third-
party contractors.
A. The Collective Bargaining Agreement
Southwest and Local 555 have agreed to several CBAs over the years,
but the timing of the most recent one is at issue here. After Southwest and
Local 555 negotiated terms for a new CBA, Local 555 sent a “tentative
agreement” to its membership, along with a document titled “Tentative
Agreement Frequently Asked Questions and Answers.” On February 19, 2016,
Local 555’s membership voted to ratify the new CBA. On March 16, 2016,
Southwest’s and Local 555’s representatives signed and executed the CBA.
The cover page of the CBA states: “FOR THE PERIOD FEBRUARY 19,
2016 THRU FEBRUARY 18, 2021.” The CBA also contains several terms that
reference the date of ratification:
ARTICLE THREE
STATUS OF AGREEMENT
A. Ratification. It is expressly understood and agreed that,
when this Agreement is accepted by the Company and ratified by
the membership of the Union, it shall be binding on both the
Company and the Union and shall supersede any and all
agreements existing or previously executed between the Company
and the Union and/or any other organization representing the
Employees hereunder.
...
ARTICLE TWENTY EIGHT
WAGE RULES
...
3. One-Time Bonuses:
The Company will provide a one-time lump sum bonus for those
Employees who have completed initial probation and are working
under the TWU Local 555 Agreement as of the Date of Ratification
3
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(February 19, 2016) and must be employed at Southwest Airlines
five (5) business days prior to date of payment.
...
ARTICLE TWENTY NINE
DURATION AND AMENDMENTS
The entire Agreement shall remain in full force and effect as of the
date of ratification through and including February 18, 2021, and
thereafter shall be subject to change as provided in Section Six of
the Railway Labor Act, as amended.
The CBA also set a ten-working-day deadline for grievances:
1. Step 1/Department/Assistant Manager (“Manager”). If
an employee is unable to resolve his grievance through his
supervisor, within ten (10) calendar days of the occurrence
of the circumstances in question, the grievance shall be
summarized in writing and presented to the manager or his
designee. . . . The manager or his designee shall issue a
written decision upholding or denying the grievance within
five (5) working days.
...
3. Step 3/Labor Relations or designee. If the decision of the
Station/Provisioning Manager is unsatisfactory, the District
Representative/designees of the Union may appeal the
grievance to Labor Relations or designee, provided that such
appeal is presented, in writing, within ten (10) working days
after receipt of the Station Manager’s decision. . . .
The CBA defines a “working day” as “Monday through Friday, excluding all
Company recognized holidays.”
The CBA’s language does not specifically address the type of large-scale
grievance at issue here, but instead pertains more to employees filing
grievances based on unfair discipline. The parties agree, however, that the
deadline for filing this grievance was ten working days after notice of the
4
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management decision. The deposition testimony of Local 555’s president
confirms that the ten working-day deadline governs. 1 Based on this deadline,
there is a reasonable argument that the instant grievance was filed more than
thirty years too late because Local 555 had known about the complained-of
practice since 1982. The arbitrator, however, rejected that argument based on
the new CBA’s so-called “zipper clause,” 2 which the arbitrator concluded
nullified “all past practices and prior agreements between Southwest and Local
555.” On appeal, Southwest did not challenge that determination. Based on
that interpretation of the zipper clause, we proceed under the premise that
Local 555’s notice period began when the new CBA became effective.
Southwest began to implement the terms of the CBA after Local 555’s
members ratified it on February 19, 2016, including by paying the employees
increased wages starting on March 1, 2016 and by using the ratification date
to trigger employee bonuses. The parties signed the CBA on March 16, 2016.
B. The Arbitration Proceedings
After filing a number of grievances over several years about Southwest’s
use of third-party contractors, Local 555 filed the grievance at issue here,
Grievance No. 5001/16, on March 28, 2016—within ten working days of when
1 Local 555’s president testified:
Q. What is that time frame?
A. Time frames is [sic] the amount of time that we have to file a grievance and
how long you have to -- the other party has to respond.
Q. And what is the that for the Union filing a grievance alleging the Company has
violated a contract?
A. Ten working days.
Q. From what point?
A. From when we became knowledgeable of the incident.
2 That clause stated: “It is expressly understood and agreed that, when this Agreement
is accepted by the Company and ratified by the membership of the Union, it shall be binding
on both the Company and the Union and shall supersede any and all agreements existing or
previously executed between the Company and the Union and/or any other organization
representing the Employees hereunder.”
5
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the CBA was signed on March 16, 2016, but more than ten working days after
it was ratified on February 19, 2016. 3
In August 2016, while the instant grievance was pending in arbitration,
a different arbitrator issued a decision on Grievance No. 5001/15 (a different
grievance about the same issue), holding that the grievance was untimely
because Local 555 did not file it within ten working days of the management
decision to use non-union vendors.
In the instant arbitration, Southwest moved to dismiss the grievance on
the grounds that it was (1) untimely and (2) barred by res judicata based on
the other arbitrator’s decision. In October 2016, the arbitrator held a hearing
at which counsel for the parties presented witnesses and oral argument then
filed post-arbitration briefs. In December 2016, the arbitrator issued a 38-page
revised award setting out the parties’ arguments and concluding that the
instant grievance was (1) not barred by res judicata and (2) filed timely based
on the signing date of the new CBA. The arbitrator’s reasoning on the
timeliness issue was as follows:
The Union requested that the job duties involved in RONA aircraft
cleaning be returned to the Union. When the Company failed to do
so, the Union filed Grievance 5001/16. Based on the contractual
time frames of the newly implemented CBA, the Union has ten
working days to file a grievance. An important question is what is
the date when the current CBA became effective and enforceable?
The Company’s position is that the CBA Ratification date of
3 The district court thoroughly set out the procedural history of the arbitrations, much
of which is not directly relevant to this appeal. In short, the grievance at issue here is the
fifth about Southwest’s use of third-party contractors to clean RON aircraft. Local 555 had
filed two grievances about the issue in 2012, and another in 2015, but withdrew those
grievances before the arbitrators reached their decisions. Local 555 filed a fourth grievance
in November 2015, and while that grievance was pending and after the parties renegotiated
their CBA, filed the grievance at issue here on March 28, 2016. In all the arbitrations,
Southwest defended by insisting that the grievances were untimely based on Local 555’s
knowledge of Southwest’s longstanding practice of using third-party contractors for RON
cleaning.
6
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February 19, 2016 is such a date. However the Union contends
that the current CBA became effective and enforceable on March
16, 2016, the date which is shown on the Execution page of the
current CBA. By way of explanation, the ratification of a CBA is
an internal procedure in which the Union membership reviews the
negotiated items within the CBA. Once such ratification is
completed, the Company is so advised and the Parties then agree
that both Parties (the Company and the Union) will approve the
agreement. The agreement is signed and dated by officials of both
Parties. That signing date becomes the Execution Date and is
presented on the Execution Page of the agreement. The Execution
Date for the newly negotiated CBA is March 16, 2016 which is
listed on page 89 of the present CBA. Grievance 5001/16 was
submitted to the Company on March 28, 2016. That March 16,
2016 date is within the ten day required filing date for grievances.
In summary, this Arbitrator is convinced that Grievance 5001/16
was filed on a timely basis.
C. The District Court Proceedings
Southwest challenged the arbitration award in federal court under 45
U.S.C. § 153 First (q). Southwest and Local 555 cross-moved for summary
judgment, with Southwest arguing that the award should be vacated for three
reasons. First, the arbitrator prematurely reached the merits of the grievance.
Second, the arbitrator’s conclusion that the CBA took effect on the signing date
rather than the ratification date ignored the express terms of the CBA and
exceeded the scope of the arbitrator’s jurisdiction. Third, the arbitrator’s
hostility toward Southwest amounted to “fraud or bias” sufficient to vacate the
award under the RLA.
The district court affirmed in part and vacated in part. Local 555 did not
dispute that the arbitrator prematurely addressed the merits of the grievance,
so the court vacated “any and all portions of Arbitrator Jennings’s award that
venture beyond the threshold questions the parties presented.” On the
timeliness issue, the district court concluded that the arbitrator’s decision did
not exceed the scope of his jurisdiction:
7
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Rather than endeavoring to interpret the parties’ CBA for
itself, the court is mindful of the narrow scope of its review. So long
as the arbitrator’s decision draws its essence from the contract in
question, and does not ignore outright the CBA’s plain language in
a manner that reflects a personal brand of industrial justice, the
court must defer to the arbitrator. See Continental Airlines[, Inc.
v. Air Line Pilots Ass’n Int’l, 555 F.3d 399, 406 (5th Cir. 2009)]. In
this case, despite potential deficiencies in the arbitrator’s
reasoning, the court cannot conclude that the arbitrator’s
interpretation was wholly divorced from the parties’ CBA. While
the court finds some of Southwest’s arguments with respect to the
CBA’s date of effectiveness compelling, the mere fact that a court
is convinced that the arbitrator committed serious error does not
suffice to overturn an arbitrator’s decision. Id. Therefore, after
careful consideration, the court concludes that Arbitrator Jennings
did not exceed his jurisdiction by ruling that TWU Local 555 filed
its fourth grievance in a timely fashion.
On the issue of arbitrator bias, the district court concluded that the arbitrator’s
conduct did not meet the high bar to show fraud or bias under the RLA. Finally,
the court remanded the case to a different arbitrator, to be selected under the
terms of the CBA, for a hearing on the merits of the grievance.
Southwest timely appealed. In its opening brief, Southwest limited the
scope of its appeal to the district court’s affirmance of the arbitrator’s ruling on
timeliness.
II. ANALYSIS
This is a dispute about a grievance that involves the application and
interpretation of a CBA, so it is classified as a “minor dispute” under the RLA. 4
“Minor disputes must be resolved through compulsory and binding
arbitration.” 5
4 Cont’l Airlines, Inc. v. Air Line Pilots Ass’n, Int’l, 555 F.3d 399, 405 (5th Cir. 2009).
5 Id.
8
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Judicial review of arbitration decisions “arising from the terms of a
[CBA] is narrowly limited, and courts should afford great deference to
arbitration awards.” 6 This standard is “‘among the narrowest known to the
law’ and flows from the RLA’s ‘preference for the settlement of disputes in
accordance with contractually agreed-upon arbitration procedures.’” 7
An award may be set aside:
[1] for failure of the [arbitrator] to comply with the requirements
of [the RLA], [2] for failure of the order to conform, or confine itself,
to matters within the scope of the [arbitrator’s] jurisdiction, or [3]
for fraud or corruption by [the arbitrator] making the order. 8
“Absent one of those exclusive grounds, or a judicially created exception for
public policy concerns,” we must defer to the arbitrator’s decision. 9
Southwest challenges the arbitrator’s award under only the second
statutory exception—that the award exceeded the scope of his jurisdiction, viz.
the terms of the CBA. 10 An arbitrator exceeds his jurisdiction if he “issues a
decision that is contrary to an unambiguous provision of the CBA . . . .” 11 “This
is a narrow exception, however, and ‘a court should not reject an award on the
ground that the [arbitrator] misread the contract[.]’” 12 Rather, the decision
“need only ‘draw its essence from the contract[] and [not] simply reflect the
[arbitrator’s] own notions of industrial justice,’ so that the decision is ‘grounded
in the [contract].’” 13
6 Id. (quoting Resolution Performance Prods., LLC v. Paper Allied Indus. Chem. &
Energy Workers Int’l Union, Local 4–1201, 480 F.3d 760, 764 (5th Cir. 2007)).
7 Id. (quoting E. Air Lines, Inc. v. Transp. Workers Union, Local 533, 580 F.2d 169,
172 (5th Cir. 1978); Andrews v. Louisville & Nashville R.R. Co., 406 U.S. 320, 323 (1972)).
8 45 U.S.C. § 153 First (q).
9 Cont’l Airlines, 555 F.3d at 406.
10 Id.
11 Id.
12 Id. (quoting Cont’l Airlines, Inc. v. Int’l Bhd. of Teamsters, 391 F.3d 613, 617 (5th
Cir. 2004)).
13 Id. (quoting Cont’l Airlines, 391 F.3d at 617).
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If the arbitrator’s decision “may be supported by any analysis” that
“arguably construes” the CBA, whether or not relied on by the arbitrator, we
must defer to that decision. 14 “Even if the chain of reasoning is not correct” and
the “decision appears . . . to be a serious error,” we “must defer as long as no
step in the reasoning process ignores an unambiguous provision” of the CBA. 15
Despite this deferential standard, Southwest maintains that the
arbitrator ignored the CBA’s terms about its effective date. Southwest cites
several cases holding that arbitrators exceed the scope of their jurisdiction by
ignoring or contradicting explicit terms in a CBA. 16 It also cites cases outside
the RLA context vacating arbitration awards that contradict unambiguous
CBA language. 17
To support its contention that the arbitrator ignored the CBA’s express
terms, Southwest points to the CBA’s cover language and to Article 29, which
states that the CBA “shall remain in full force and effect as of the date of
ratification through and including February 18, 2021.” Southwest claims that,
because the CBA does not expressly reference the “signing date,” and the
signature page states only “Execution Page,” nothing in the CBA supports the
14 Id. at 407.
15 Id.
16 See BNSF Ry. Co. v. Bhd. of Maint. of Way Emps., 550 F.3d 418, 425 (5th Cir. 2008)
(“We have previously held that an arbitration panel exceeds the scope of its jurisdiction if it
ignores an explicit term in a CBA.” (citing Cont’l Airlines, 391 F.3d at 620 (noting that an
interpretation which reads out a phrase from an agreement cannot be an arguable
construction of the agreement))); Am. Eagle Airlines, Inc. v. Air Line Pilots Ass’n, Int’l, 343
F.3d 401, 406 (5th Cir. 2003) (“Although we are not unmindful of the high degree of deference
the federal courts generally afford arbitrators, . . . an arbitrator may not ignore the plain
language of a collective bargaining agreement.”).
17 See Beaird Indus., Inc. v. Local 2297, Int’l Union, 404 F.3d 942, 946 (5th Cir. 2005)
(“It is well-established that courts may set aside awards when the arbitrator exceeds his
contractual mandate by acting contrary to express contractual provisions.”); Delta Queen
Steamboat Co. v. Dist. 2 Marine Eng’rs Beneficial Ass’n, 889 F.2d 599, 604 (5th Cir. 1989)
(“We agree with the company that the rule in this circuit, and the emerging trend among
other courts of appeals, is that arbitral action contrary to express contractual provisions will
not be respected.”).
10
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arbitrator’s conclusion that the signing date should be treated as the effective
date. Rather, insists Southwest, the signing of the agreement on March 16,
2016 was just a formality. Finally, Southwest contends that the parties’ course
of performance confirms its interpretation. It points to the CBA terms showing
that Southwest started paying employees increased wages starting on March
1, 2016.
In response, Local 555 cites the deferential standard of review for labor-
arbitration awards and contends that the arbitrator’s interpretation of the
CBA was arguable. Local 555’s proposed interpretation is that Article 3’s
“when this Agreement is accepted by the Company” language imposed a
condition precedent that was not satisfied until the CBA was both ratified by
the union and signed by the parties. According to Local 555, Southwest did not
“accept” the CBA until it signed the CBA on March 16, 2016.
Southwest’s response to this specific argument is that it “had accepted
the agreement well before the Union ratified it.” Southwest maintains that its
management and Local 555’s leadership had agreed to the terms in the
“tentative agreement” that Local 555 sent out to its membership for
ratification. So, by the time the CBA was ratified, it had already been “accepted
by the Company.” In support, Southwest cites (1) a Fifth Circuit case
explaining that the parties’ conduct is determinative of the existence of a
CBA; 18 (2) Third and Eleventh Circuit decisions holding that “Union
ratification is generally considered to be ‘the last act necessary . . . to create a
18See Savant v. APM Terminals, 776 F.3d 285, 290 (5th Cir. 2014) (“‘An employer can
in writing obligate itself to follow portions of a collective bargaining agreement without
signing the collective bargaining agreement itself.’ . . . Indeed, a CBA need not even be
reduced to writing. ‘Instead, what is required is conduct manifesting an intention to abide by
the terms of an agreement.’” (citations omitted)); see also Brown v. C. Volante Corp., 194 F.3d
351, 354–55 (2d Cir. 1999).
11
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meeting of the minds and an enforceable agreement’”; 19 and (3) the general
contract principles that (a) a contract can be accepted “in any manner and by
any medium reasonable in the circumstances”; 20 (b) contracts are generally
interpreted as “a cohesive whole”; 21 and (c) “[w]herever reasonable,” contracts
should be “interpreted as consistent with each other and with any relevant
course of performance, course of dealing, or usage of trade.” 22
We hold that the arbitration award conflicts with the plain language of
the CBA. It was not an arguable construction of the CBA and instead amounted
to the arbitrator’s own brand of industrial justice. The arbitrator’s
interpretation failed to account for (1) the CBA’s title page that sets February
19, 2016 through February 18, 2021 as the “period” for the CBA; (2) Article 29’s
express language that the CBA shall “remain in full force and effect as of the
date of ratification through and including February 18, 2021”; (3) the CBA’s
one-time bonus paid to employees working under the CBA as “of the Date of
Ratification”; and (4) the parties’ conduct, including Southwest’s payment of
the increased rates and bonuses set out in the CBA, starting after the CBA was
ratified but before it was signed.
The arbitrator ascribed significance to the CBA’s “Execution Page.” 23 But
the Execution Page is not one of the CBA’s terms, and none of the CBA’s terms
19 Mack Trucks, Inc. v. Int’l Union, United Auto., Aerospace & Agric. Implement
Workers of Am., 856 F.2d 579, 592 (3d Cir. 1988) (quoting NLRB v. Deauville Hotel, 751 F.2d
1562, 1569 n.10 (11th Cir. 1985)).
20 RESTATEMENT (SECOND) OF CONTRACTS § 30(2).
21 Id. § 202(2).
22 Id. § 202(5).
23 The relevant reasoning in the arbitration award is as follows:
By way of explanation, the ratification of a CBA is an internal procedure in
which the Union membership reviews the negotiated items within the CBA.
Once such ratification is completed, the Company is so advised and the Parties
then agree that both Parties (the Company and the Union) will approve the
agreement. The agreement is signed and dated by officials of both Parties. That
signing date becomes the Execution Date and is presented on the Execution
Page of the agreement. The Execution Date for the newly negotiated CBA is
12
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mentions “execution,” “signing,” or “execution date.” In contrast, Article 29
expressly provides that the CBA “shall remain in full force and effect as of the
date of ratification . . . .” By relying on the Execution Page, the arbitrator
ignored the express terms of the CBA. The arbitration award therefore was
contrary to and not an interpretation of the CBA. 24
We are aware that Article 3, titled “Status of the Agreement,” ties the
effective date to ratification and acceptance by Southwest, whereas Article 29,
titled “Duration and Amendments,” states only that the agreement “shall
remain in full force and effect as of the date of ratification . . . .” But that does
not justify the arbitrator’s reasoning. Article 3 says only that Southwest must
accept the agreement; it does not prescribe a specific mode of acceptance. The
cases holding that a CBA need not be signed to create an enforceable
agreement 25 and that ratification is generally the last act necessary to create
an enforceable agreement 26 foreclose Local 555’s argument that “accepted by
the Company” in this instance meant the date the parties signed the CBA.
Rather, the CBA’s title page and language stating that it shall “remain in full
March 16, 2016 which is listed on page 89 of the present CBA. Grievance
5001/16 was submitted to the Company on March 28, 2016. That March 16,
2016 date is within the ten day required filing date for grievances.
24 See BNSF Ry., 550 F.3d at 425 (“By not making any finding as to the necessary
element of causation, the [National Railroad Adjustment Board] essentially ignored a term
of the CBA. Accordingly, sustaining the claims without any finding as to the second element
of [a term in the CBA] was ‘wholly baseless and without reason’ and not an interpretation of
the CBA.” (citation omitted)).
25 E.g., Savant, 776 F.3d at 290.
26 See Mack Trucks, Inc., 856 F.2d at 592 (“Union ratification is generally considered
to be ‘the last act necessary . . . to create a meeting of the minds and an enforceable
agreement.’” (citation omitted)); NLRB v. S. Fla. Hotel & Motel Ass’n, 751 F.2d 1571, 1581
n.14 (11th Cir. 1985) (“Article I of the collective bargaining agreement provided that the
contract would become effective upon execution. . . . This clause notwithstanding, the Union
and the Association created a valid and enforceable contract upon rank and file
ratification . . . .”).
13
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force and effect as of the date of ratification” confirm that it became effective
on the date of ratification.
III. CONCLUSION
We REVERSE the district court’s judgment and REMAND for
proceedings consistent with this opinion.
14
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831 F.2d 298
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.Luther H. TAYLOR, Defendant-Appellant.
No. 87-5142
United States Court of Appeals, Sixth Circuit.
October 6, 1987.
ORDER
Before KEITH, MILBURN and ALAN E. NORRIS, Circuit Judges.
1
This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the record and briefs, this panel agrees unanimously that oral argument is not needed. Fed. R. App. P. 34(a).
2
The defendant appeals the district court's order denying his motions for a new trial and for a reduction of sentence. He claimed that counsel for the United States knew or should have known that its chief witness, Mr. Arnold, had been branded a perjurer in a previous unrelated case, and that the government should have so informed defendant. The government denied any such knowledge.
3
Upon review, we conclude that the trial court erred in denying the motion for a new trial without first holding an evidentiary hearing because there is not ample evidence in the record to support its decision to deny the motion. See United States v. O'Dell, 805 F.2d 637 (6th Cir. 1986). Specifically, the case is remanded so that the district court may hold an evidentiary hearing in order to determine whether the government knew that its key witness was a perjurer.
4
The defendant has not raised an argument on appeal attacking the district court's denial of the motion for a reduction of sentence. Therefore, his challenge to the sentence is considered abandoned. See Hershinow v. Bonamarte, 735 F.2d 264, 266 (7th Cir. 1984); McGruder v. Necaise, 733 F.2d 1146, 1148 (5th Cir. 1984).
5
For these reasons, the district court's judgment denying the motion for a new trial is hereby vacated and the case remanded for additional proceedings. Rule 9(b)(6), Rules of the Sixth Circuit.
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10 Utah 2d 165 (1960)
350 P.2d 147
ARTHUR L. CRAWFORD, PLAINTIFF AND APPELLANT,
v.
LEHI IRRIGATION COMPANY, A CORPORATION, A. CLARK NELSON, R. WARD WEBB, VIRGIL H. PETERSON, JOSEPH E. SMITH, REED THOMPSON, W.H. DANSIE, GEORGE A. RICKS AND RANDALL SCHOW, DEFENDANTS AND RESPONDENTS.
No. 9074.
Supreme Court of Utah.
March 14, 1960.
J. Rulon Morgan, Provo, Elias Hansen, Salt Lake City, for appellant.
Edward W. Clyde, Salt Lake City, Harvard R. Hinton, Lehi, for respondents.
McDONOUGH, Justice.
The plaintiff, Arthur L. Crawford, owns a tract of pasture land to the southwest of Lehi City. In the improvement of a road by the county, an old drain was moved to its present site, which is along a country road between the plaintiff's lands and the lands owned by the defendant, Dansie. Water has flowed in this drain continuously since 1935.
On May 14, 1951, the plaintiff filed an application No. 22900 with the office of the state engineer for one second foot of water from this drain, which he identified by designating it as an "unnamed drain," to be used for irrigation and stock watering purposes. This application has been approved and is in good standing with the state engineer.
During the fall of 1950, and the spring of 1951, Lehi City was improving their drainage system, particularly the Third East Drain. This new drainage system intersected two old drains that had beneficially been used for irrigation. Lehi Irrigation Company purchased the diligence right to use the water from these two old drains. In 1953, a further improvement was made upon the city's Third West Drain. The water from the Lehi City drains was substantially increased as a result of these improvements. The outlet from both of these new city drains is at the head of the "unnamed drain."
The Lehi City Council passed a resolution authorizing defendant, Lehi Irrigation Company to file on the increased water from the city drains. It filed two applications with the office of the State Engineer on July 9, 1951. Each of the applications was for two second feet of underground water from the Third East Drain, to be used for irrigation purposes. Both of these applications have been approved and are now in good standing with the state engineer.
The plaintiff put in a diversion works in 1952, and used the water from the "unnamed drain" during that summer. During the summer of 1953, he did not use the water because the diversion works had been torn out. The diversion works placed by plaintiff, Crawford, in the drain raised the water table in defendant Dansie's land to a point near the surface of the land thereby damaging the grain and alfalfa growing on the land. Although the plaintiff's tract of land is somewhat larger than 25 acres, the arrangement of the land, the land levels, and the location of the drain make it possible for him to irrigate only 25 acres of land with the water filed upon, and this water is supplementary to water that he obtains from two irrigation companies that is also used upon this and other of his land.
In 1954 plaintiff installed a new diversion works and then used the water from the "unnamed drain" until July 17, 1954, when the Lehi Irrigation Company diverted the water away to the west through their newly installed works above plaintiff's diversion. It is because of this diversion of the water away from plaintiff's use that he sought injunctive relief and damages against the defendants, Lehi Irrigation Company, its board of directors, and W.H. Dansie, claiming that the water diverted away includes the water which plaintiff had filed upon and to which he had prior right.
The appropriation of the water from a source does not exclude subsequent appropriations upon new water from the same source. If as in the case of Lehi Irrigation Company v. Jones, 115 Utah 136, 202 P.2d 892, new water flows from the source in excess to that appropriated, the new water is available for appropriation. Lehi City's improved drainage system developed new water that had not been alloted, and therefore was available for appropriation to some beneficial use. The trial court found that the plaintiff's application No. 22900 "was filed for the expressed purpose of appropriating the water which for more than 20 years had been available in the unnamed drain." His designation covered the water that had been in the drain and did not cover the new water made available by the improvement in Lehi City's drainage system. Under our statute, Sec. 73-3-2, U.C.A. 1953, the application is required to designate the water being filed upon with sufficient certainty for identification. This provides the state engineer with an accurate basis for approving or disapproving applications.
The appropriation of the additional water developed by the new drainage system did not interfere with the historic flow in the "unnamed drain," which the trial court found to be one second foot up to July 1 each year, and one-half second foot after July 1 and decreed that that amount should be made available to the plaintiff.
In appropriating water it is necessary not only to designate the water to be appropriated, but also to have the intent to apply the water to a beneficial use,[1] to have a diversion from the natural channel by means of a ditch, canal or other structure, and to make application of it within a reasonable time to some useful purpose.[2]
The intent to place water, and the application of it to a beneficial use do not alone govern the distribution of water that is being appropriated. Water may not be appropriated in excess of the reasonable amount that may be used for the beneficial use designated in the application. As this court said in the case of Little Cottonwood Water Co. v. Kimball, 76 Utah 243, at pages 246-247, 289 P. 116, at page 117, "The question is important because, on the one hand, the statute ought not to be a shield of protection to prior appropriators who divert water in excess of their reasonable necessities; * * * In the arid region water is precious, and it is the undoubted policy of the law to prevent its waste and promote its largest beneficial use. Water is a bounty of nature, and, while prior rights to its use are obtained by those who first apply it to a beneficial use, those rights are limited to the quantities reasonably necessary for the uses to which it is applied. This is a cardinal principle of law of prior appropriation."
The evidence supports the finding of the trial court that the above stated water from the "unnamed drain" is the amount which could beneficially be used upon the plaintiff's land to which it is applied. It appears that the objective of achieving the most economical use of the water will be served by the order made directing that it be used under a rotation system, and that it will result neither in hardship nor injustice to the plaintiff. Accordingly we see no basis to justify interference with the conclusion reached by the trial court in refusing to issue an injunction.
The plaintiff asks damages for the amount paid by him for the rental of water under a stipulation entered into by him and the defendant irrigation company. This agreement was that the irrigation company would pay a reasonable rental only if the schedule that was agreed upon failed to provide him with the necessary water for his irrigation purposes. The trial court did not find that the schedule was deficient in the water allocated to plaintiff and therefore concluded that the "plaintiff failed to show that he was entitled to damages." The evidence, when viewed in the light most favorable to the finding of the trial court, substantially supports the finding of the trial court, and should not be disturbed.[3]
The judgment is affirmed. Costs to defendants (respondents).
CROCKETT, C.J., and WADE, HENRIOD and CALLISTER, JJ., concur.
NOTES
[1] Utah Code Annotated 1953, Sec. 73-3-1.
[2] Tanner v. Provo Reservoir Co., 99 Utah 139, 98 P.2d 695; Sowards v. Meagher, 37 Utah 212, 108 P. 1112; Utah Code Annotated 1953, Sec. 73-3-16, 73-3-17.
[3] See Nokes v. Continental Mining & Milling Co., 6 Utah 2d 177, 308 P.2d 954.
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903 F.2d 844
284 U.S.App.D.C. 226
Unpublished DispositionNOTICE: D.C. Circuit Local Rule 11(c) states that unpublished orders, judgments, and explanatory memoranda may not be cited as precedents, but counsel may refer to unpublished dispositions when the binding or preclusive effect of the disposition, rather than its quality as precedent, is relevant.UNITED STATES of America,v.Clarence JOHNSON, Appellant.
No. 88-3121.
United States Court of Appeals, District of Columbia Circuit.
June 1, 1990.
Before D.H. GINSBURG and SENTELLE, Circuit Judges, and SPOTTSWOOD W. ROBINSON, III, Senior Circuit Judge.
JUDGMENT
PER CURIAM.
1
This case was considered on the record on appeal from the United States District Court for the District of Columbia, and was argued by counsel. The court has determined that the issues presented occasion no need for a published opinion. See D.C.Cir.Rule 14(c). It is
2
ORDERED and ADJUDGED that the judgment of conviction be and hereby is affirmed for the reasons stated in the accompanying memorandum.
3
The Clerk is directed to withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing. See D.C.Cir.Rule 15(b)(2).
MEMORANDUM
4
Clarence Johnson was convicted pursuant to 21 U.S.C. Sec. 841(a) (1982) of possessing cocaine with intent to distribute. He now asserts that the evidence underpinning the conviction was illegally obtained. His principal argument is that he was "seized" in violation of the Fourth Amendment, and that the unlawful nature of the seizure tainted that evidence, which was uncovered upon a subsequent consent search. Alternatively, Johnson contends that his "consent" was without effect because it was involuntary.
5
Johnson's encounter with the law occurred shortly after 10:10 on a February morning as Detectives Hanson and Beard of the Metropolitan Police Department, in coordination with Special Agent Sauve of Amtrak, conducted random "interviews" of passengers alighting from an Amtrak train in Washington's Union Station. The train had left New York at 6:30 that morning, and the officers' "intention [was] to ... ferret out those drug couriers that [were] using" Amtrak to transport drugs. All three officers were dressed casually in suits without ties, and their weapons remained concealed at all times. When Sauve felt that someone should be questioned, he signaled one of the other officers, who approached the passenger for that purpose.
6
Johnson attracted Sauve's attention because he wore expensive casual clothing, including a full-length padded-down jacket, and carried a single nylon bag as his only luggage. Johnson also appeared nervous, and markedly so after he saw Beard searching another passenger's luggage, the contents of which were spread out on the floor. When Johnson then began to look around for other exits, Sauve gave Hanson the signal to quiz.
7
Hanson approached Johnson, exhibited his badge, identified himself and said in a normal tone of voice, "Police officer, may I talk with you a moment?" Johnson replied, "Sure, Okay." On request, Johnson produced the stubs of his spent round-trip tickets between Washington and New York, which Hanson examined and promptly returned. Hanson explained that he "was part of the narcotics branch drug interdiction unit and that part of [his] job was to talk with people coming into the city from source-cities such as Miami and Chicago[.]" He asked Johnson "if he was aware of the major drug problem that existed in Washington," and Johnson answered in the affirmative. Hanson then asked if Johnson "would mind" if he searched his bag. Johnson responded, "Sure, no problem" and handed the bag to Hanson. Inside the bag, Hanson discovered cocaine and drug-peddling paraphanelia. He then informed Johnson that he was under arrest, and Sauve, who stood nearby throughout the encounter, handcuffed him.
8
The District Court denied Johnson's motion to suppress this evidence,1 concluding that Johnson had not been "seized" within the meaning of the Fourth Amendment, and that he had consented to the search of his bag. Transcript of Motions Hearing (May 27, 1988) 81-88. On a motion to suppress evidence as illegally obtained, we accept the District Court's factual findings when not clearly erroneous, e.g., United States v. Thomas, 864 F.2d 843, 846 (D.C.Cir.1989), and, indeed, the pertinent facts of this case are undisputed. But the ultimate inquiry--whether, on the facts conceded or found, there was a Fourth Amendment seizure--is a question of law determinable de novo by this court. United States v. Maragh, 894 F.2d 415, 417-418 (D.C.Cir.1990).
9
Johnson maintains that "a reasonable person would conclude that a newcomer to the law, after observing the stopping and searching of the luggage of another at an exit he must pass and immediately confronted by a police officer and subject to a barrage of questions for 3-5 minutes, would believe that police detention and search was inevitable and that he had no voluntary choice to preclude such." Brief for Appellant at 11. The essentially uncontroverted factual record, however, leads us to the opposite conclusion.
10
Detective Hanson approached Johnson in the station concourse, an open area. He requested conversation, but did not order it; he neither directed nor restrained Johnson's activity in any way. Hanson, in plain clothes, identified himself, spoke politely, kept his weapon concealed, and returned Johnson's ticket stubs after briefly examining them. In asking about Johnson's traveling, he was brief and to the point. We share the District Court's view that the events immediately preceding Johnson's arrest did not amount to a Fourth Amendment seizure.
11
We believe, moreover, that the fact that Detective Beard was searching another passenger's luggage at the time Johnson was approached would not lead a reasonable law-abiding person to doubt his freedom to ignore a policeman's importunity to talk, and to instead continue on his way. There was no indication that the search in progress was other than consensual, or that a search of Johnson's own bag was inevitable. See United States v. Brady, 842 F.2d 1313, 1315 n. 3 (D.C.Cir.1988) ("a reasonable person is not assumed to have a guilty mind, which is especially prone to apprehensions of confinement"); Gomez v. Turner, 672 F.2d 134, 141-142 (D.C.Cir.1982) (guiltless citizens often cooperate with police by consenting to searches designed to uncover illegal activity). The only inference objectively deducible from the other search is that police officers were present and looking for something, and that would hardly visit any significant amount of anxiety upon a reasonable person innocent of any crime. The witnessed search might have taken on a different cast under other circumstances--for example, overt coercion in carrying it out--but nothing of that sort appeared here. We therefore agree with the District Court that the challenged events amounted to no more than "the sort of consensual encounter that implicates no Fourth Amendment interest." Florida v. Rodriguez, 469 U.S. 1, 5-6 (1984) (per curiam).
12
Nor have we been given reason to upset the District Court's finding that Johnson consented to the search of his bag. The standard for evaluating the validity of consent is voluntariness under the totality of the circumstances. Schneckloth v. Bustamonte, 412 U.S. 218, 223 (1973). The "ultimate determination by a trial judge at a suppression hearing as to the issue of consent, whether it be consent to enter or consent to search, is factual in nature [and] [a]s such ... that determination must remain untouched on appeal unless it is 'clearly erroneous.' " United States v. Sheard, 473 F.2d 139, 146 (D.C.Cir.1972).
13
Johnson insists that his consent was involuntary because, he says, it was not knowingly and intelligently given. More specifically, he argues that no person "in his right mind is going to voluntarily consent to ... a search for drugs, where discovery is certain, if he actually knows he has the right not to consent...." Brief for Appellant at 11. But both the Supreme Court and this court have recognized that people cooperate with the police for a variety of reasons. E.g., United States v. Mendenhall, 446 U.S. 544, 559 n. 7 (Stewart, J., concurring) (respondent who twice consented to a strip search "may have thought she was acting in her self-interest, by voluntarily cooperating with the officers in the hope of receiving more lenient treatment"); Gomez v. Turner, supra, 672 F.2d at 141-142. And the Supreme Court has expressly declined to impose on police an obligation to advise the subject of a search of his right to refuse to consent. Schneckloth v. Bustamonte, supra, 412 U.S. at 231. Accordingly, we perceive no basis for distinguishing this case from a host of others in which drug couriers reacted to a search exactly as Johnson did. E.g., Schneckloth v. Bustamonte, supra, 412 U.S. at 220; United States v. Brady, supra, 842 F.2d at 1314; United States v. Joseph, 892 F.2d 118, 120 (D.C.Cir.1989).
1
Johnson also sought unsuccessfully to suppress, as fruit of the poisonous tree, two incriminating statements he made to the police after he was formally arrested
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228 P.3d 441 (2010)
STATE
v.
ALONZO.
No. 101805.
Court of Appeals of Kansas.
April 15, 2010.
Decision Without Published Opinion Affirmed.
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824 F.2d 150
James M. SHANNON, As He is Attorney General of theCommonwealth of Massachusetts, Plaintiff, Appellant,v.TELCO COMMUNICATIONS, INC. and Donald Quatrucci, Defendants,Appellees.
No. 87-1054.
United States Court of Appeals,First Circuit.
Argued June 3, 1987.Decided July 31, 1987.
Johanna Soris, Asst. Atty. Gen., Division of Public Charities, Public Protection Bureau, with whom Leslie G. Espinoza, Asst. Atty. Gen., Division of Public Charities, Public Protection Bureau, and James M. Shannon, Atty. Gen., were on brief, for plaintiff, appellant.
Peter S. Brooks with whom Louis J. Scerra, Jr. and Goldstein & Manello were on brief, for defendants, appellees.
Before BREYER and TORRUELLA, Circuit Judges, and RE,* Judge.
BREYER, Circuit Judge.
1
Telco is a private Rhode Island corporation that raises funds for charities. The Attorney General of Massachusetts sued Telco in a Massachusetts court, claiming that Telco had violated a Massachusetts law that says that a "professional solicitor" (such as Telco) may not "receive compensation" that exceeds "twenty-five per cent of the total moneys, pledges or other property raised or received by reason of any [charity-related] solicitation activities." Mass.Gen.L. c. 68, Sec. 21 (1984). Telco then brought suit in federal district court, seeking a declaratory judgment that this statutory provision violates its first amendment rights. On Telco's motion, the district court removed the Commonwealth's state enforcement action and consolidated it with Telco's federal declaratory judgment action. Ruling on cross-motions for summary judgment, the district court held that the Massachusetts statute was unconstitutionally overbroad and invalid on its face. Bellotti v. Telco Communications, Inc., 650 F.Supp. 149 (D.Mass.1986). The court found the statute to be indistinguishable from a similar Maryland statute that the Supreme Court held to be invalid under the first amendment in Secretary of State v. Joseph H. Munson Co., 467 U.S. 947, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984). The Commonwealth appeals this ruling.
2
Before considering the merits, we must address a technical issue. The Commonwealth claimed below that the district court should abstain from considering Telco's federal declaratory judgment action under the doctrine of Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), because the Commonwealth's enforcement proceeding was already pending in state court. Telco answered that no state proceeding was pending because the Commonwealth's suit had, on Telco's motion, been removed to federal court on the basis of diversity jurisdiction. As the Commonwealth correctly argued, however, its suit was not one between "citizens of different States," 28 U.S.C. Sec. 1332 (defining the diversity jurisdiction of the district courts), but rather one brought "by a State against [a] citizen[ ] of another State," 28 U.S.C. Sec. 1251 (defining the Supreme Court's original jurisdiction); cf. Ohio v. Wyandotte Chemicals, 401 U.S. 493, 91 S.Ct. 1005, 28 L.Ed.2d 256 (1971) (holding that the Supreme Court has discretion to decline to exercise original jurisdiction over a suit brought by a state against a citizen of another state). And, " 'it is well settled that a suit between a State and a citizen or a corporation of another State is not between citizens of different States' " and that such a suit does not lie within the district court's diversity jurisdiction. State Highway Commission v. Utah Construction Co., 278 U.S. 194, 200, 49 S.Ct. 104, 106, 73 L.Ed. 262 (1929) (quoting Postal Telegraph Cable Co. v. Alabama, 155 U.S. 482, 15 S.Ct. 192, 39 L.Ed. 231, 487 (1894)); see Ohio v. Wyandotte Chemicals, 401 U.S. at 498 n. 3, 91 S.Ct. at 109 n. 3. Thus, the Commonwealth's enforcement action was not properly removed to federal court, see 28 U.S.C. Sec. 1441 (allowing removal of suits "of which the district courts of the United States have original jurisdiction"), and the district court should (arguably) have abstained from hearing Telco's federal declaratory judgment action in deference to the (properly pending) state action.
3
The Commonwealth has not, however, pressed the abstention question before this court. In such circumstances, as the Supreme Court held in Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471, 480, 97 S.Ct. 1898, 1904, 52 L.Ed.2d 513 (1977), "[i]t may not be argued ... that a federal court is compelled to abstain...." The Court reasoned:If the State voluntarily chooses to submit to a federal forum, principles of comity do not demand that the federal court force the case back into the State's own system. In the present case, [the State] either believes that the District Court was correct in its analysis of abstention or, faced with the prospect of lengthy ... appeals followed by equally protracted state judicial proceedings, now has concluded to submit the constitutional issue to this Court for immediate resolution. In either event, under these circumstances Younger principles of equity and comity do not require this Court to refuse [the State] the immediate adjudication it seeks.
4
Id.; accord Brown v. Hotel & Restaurant Employees Local 54, 468 U.S. 491, 500 n. 9, 104 S.Ct. 3179, 3184 n. 9, 82 L.Ed.2d 373 (1984); Sosna v. Iowa, 419 U.S. 393, 396, 95 S.Ct. 553, 555, 42 L.Ed.2d 532 n. 3 (1975). We therefore proceed to the merits of Telco's action seeking a declaratory judgment that the Massachusetts statute is unconstitutional under the first and fourteenth amendments.
5
Regarding the merits, we, like the district court, can find no relevant distinction between the case before us and Munson. Munson concerned a statute that forbade a "charitable organization" from paying "as expenses in connection with any fund-raising activity a total amount in excess of 25 percent of the total gross income raised or received by reason of the fund-raising activity." Md.Ann.Code art. 41, Sec. 103D(a), quoted in Munson, 467 U.S. at 950 n. 2, 104 S.Ct. at 2843 n. 2. In Munson, the Supreme Court pointed to an earlier case, Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620, 100 S.Ct. 826, 63 L.Ed.2d 73 (1980), in which it had held unconstitutional a local ordinance banning solicitations by charities that do not use at least 75 percent of their receipts for charitable purposes. Such an ordinance, the Court had held, would improperly interfere with the charitable work of those "organizations that are primarily engaged in research, advocacy, or public education"--organizations that use "paid staff" or "paid solicitors who 'necessarily combine' the solicitation of financial support with the 'functions of information dissemination, discussion, and advocacy of public issues.' " Id. at 635, 636, 100 S.Ct. at 836 (quoting Citizens for a Better Environment v. Village of Schaumburg, 590 F.2d 220, 225 (7th Cir.1978)). Such charities might reasonably wish to pay their solicitors more than 25 percent of receipts in order both to raise money and to spread their word. The Munson Court concluded that the Maryland statute, which directly limited a charity's fundraising expenses, suffered the same constitutional defect as the ordinance in Schaumburg even though the Maryland statute provided for an administrative waiver of the spending limit if the charity could "demonstrate financial necessity." Munson, 467 U.S. at 962, 104 S.Ct. at 2850. The Court reasoned that both the Maryland statute and the Schaumburg ordinance would limit the fundraising activities of charities that educate or advocate. See Munson, 467 U.S. at 963-64, 104 S.Ct. at 2850-51; Schaumburg, 444 U.S. at 635, 100 S.Ct. at 835. In both cases, the state could pursue the law's ostensible objective of preventing fraud in less restrictive ways. See Munson, 467 U.S. at 968 n. 16, 104 S.Ct. at 2852 n. 16; Schaumburg, 444 U.S. at 637-38, 100 S.Ct. at 836-37. Therefore, both statutes, in the Court's view, were unconstitutionally overbroad. See Munson, 467 U.S. at 970, 104 S.Ct. at 2854. Schaumburg, 444 U.S. at 639, 100 S.Ct. at 837.
6
The Commonwealth attempts to distinguish the Massachusetts statute from the Maryland statute on the grounds that Massachusetts imposes limits on what professional fundraisers can charge the charities, whereas Maryland imposed a limit on what the charity could spend on fundraising, including what it could pay a fundraiser. This is a distinction without a difference. The Supreme Court majority in Munson replied to the dissent's claim that the Maryland statute sought primarily to control only the "economic relations between charities and professional fundraisers," Munson, 467 U.S. at 979, 104 S.Ct. at 2858 (Rehnquist, J., dissenting), as follows:The dissenters' suggestion that, because the Maryland statute regulates only the economic relationship between charities and professional fundraisers, it is not a direct restriction on the charities' First Amendment activity is perplexing. Any restriction on the amount of money a charity can pay to a third party as a fundraising expense could be labeled "economic regulation." The fact that paid solicitors are used to disseminate information did not alter the Schaumburg Court's conclusion that a limitation on the amount a charity can spend in fundraising activity is a direct restriction on the charity's First Amendment rights. Whatever the State's purpose in enacting the statute, the fact remains that the percentage limitation is a direct restriction on the amount of money a charity can spend on fundraising activity.
7
For similar reasons, it is the dissent that "simply misses the point" when it urges that there is an element of "fraud" in a professional fundraiser's soliciting money for a charity if a high proportion of those funds are expended in fundraising. The point of the Schaumburg Court's conclusion that the percentage limitation was not an accurate measure of fraud was that the charity's "purpose" may include public education. It is no more fraudulent for a charity to pay a professional fundraiser to engage in legitimate public educational activity than it is for the charity to engage in that activity itself. And concerns about unscrupulous professional fundraisers, like concerns about fraudulent charities, can [be] and are accommodated directly, through disclosure and registration requirements and penalties for fraudulent conduct.
8
Munson, 467 U.S. at 967 n. 16, 104 S.Ct. at 2852 n. 16. Given this language and the theory of the Supreme Court's opinion in Munson, it is not surprising that those courts that have considered the issue since Munson have concluded that laws regulating the fees of professional charitable solicitors are not significantly different from laws regulating the expenditures of charities. See National Federation of the Blind v. Riley, 635 F.Supp. 256, 258 (E.D.N.C.1986) ("A charitable organization does not lose the protection of the first amendment merely because it chooses to use a professional solicitor in its fund-raising campaign."), aff'd, 817 F.2d 102 (4th Cir.1987); Heritage Publishing Co. v. Fishman, 634 F.Supp. 1489, 1504 (D.Minn.1986) ("Whether the statute limits what a charity may pay or what a professional fund-raiser may receive simply does not [a]ffect the impact that the limitation has on the free speech rights of the charity.").
9
The Commonwealth next argues that the Massachusetts statute is constitutional because it exempts from its 25-percent compensation limit "the actual cost ... of performances, events or goods sold to the public." Mass.Gen.L. c. 68, Sec. 21(b). The Maryland statute rejected in Munson, however, contained an even broader exemption that covered the cost of "goods, food, entertainment, or drink sold or provided to the public" as well as postage and printing costs. Md.Ann.Code art. 41, Sec. 103D(b) (emphasis added), quoted in Munson, 467 U.S. at 951 n. 2, 104 S.Ct. at 2843. The Massachusetts statute would seem to impose a greater burden on charities that educate or advocate than did the Maryland statute, for Massachusetts does not exempt the cost of printed matter given to the public, the cost of postage, or the cost of free fund-raising events. And, the Massachusetts statute, like the Maryland statute, fails to exempt the wages paid to door-to-door, on-the-street, or over-the-phone solicitors who spread the charity's educational message while asking for funds.
10
Finally, the Commonwealth argues that the Massachusetts statute is necessary to protect the public from fraudulent charities. But, this is the exact argument that the Supreme Court rejected in Schaumburg and Munson. The Court said that the state could control fraud "directly, through disclosure and registration requirements and penalties for fraudulent conduct." Munson, 467 U.S. at 968 n. 16, 104 S.Ct. at 2852 n. 16; see Schaumburg, 444 U.S. at 637-38, 100 S.Ct. at 836-37; cf. Mass.Gen.L. c. 68, Secs. 22-26 (establishing extensive registration and disclosure requirements); Mass.Gen.L. c. 68, Sec. 28 (directly prohibiting fraudulent and deceptive practices); Mass.Gen.L. c. 68, Secs. 30-32 (empowering state officials to penalize violations of registration, disclosure, and anti-fraud provisions).
11
In sum, because we can perceive no relevant distinction between this case and Supreme Court precedent directly on point, the judgment of the district court is
12
Affirmed.
*
Chief Judge of the United States Court of International Trade, sitting by designation
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298 F.2d 188
The TEXAS AND PACIFIC RAILWAY COMPANY, Appellant,v.Edward E. JONES, Appellee.
No. 19119.
United States Court of Appeals Fifth Circuit.
January 12, 1962.
Gerry N. Wren, Dallas, Tex., for appellant.
Warren Burnett and Lee Arnett, Odessa, Tex., for appellee.
Before BROWN, WISDOM and BELL, Circuit Judges.
JOHN R. BROWN, Circuit Judge.
1
This FELA1 case raises but two questions of any real substance. The first concerns the sufficiency of the evidence to support the implied finding of a failure to keep a proper lookout. The second is whether the Court properly charged the jury concerning the basic defense that Jones, the injured employee, was a mere volunteer not acting in the scope of his employment at the time of his injury. We find no error and affirm.
2
Admittedly, at the time of his injury, Jones was not performing his customary job. He was, in an everyday sense, acting as a volunteer in doing something he did not normally do in order to assist a fellow employee of the railroad. But in performing this act beyond the strict call of duty, it does not necessarily follow that he forfeited his status as an employee. Jones regularly worked in a communications department as a telephone maintainer. His usual work, however, was in the simple, routine construction, installation, maintenance and repair of electrical equipment in residential and similar buildings. His immediate supervisor was Greer. On the date of the accident Jones and Greer went to Odessa, Texas, to install a pole light on the station premises. To do this Greer, for the Railroad, arranged to borrow from the T&P affiliate, Motor Transport Company, a flatbed truck equipped with a power winch and a collapsible A-frame gin pole derrick. The derrick truck was used to set the light pole. The pole was thereafter set, the work finished and nothing remained for Jones and Greer to do save wait for dark to test the electronic-eye switching device. The derrick truck and the pickup truck being used by Greer's crew were then parked rear-end-to the loading dock and about ten feet apart.
3
While idling away time, Jones was sitting at the wheel of the pickup truck and Greer was engaged on the opposite side in some paper-work. About this time another Railroad supervisor instructed McCue, likewise a Railroad employee, to lower the A-frame gin pole and return the truck to the Motor Company. It was during this process that Jones was severely injured when one leg of the A-frame fell on his head.
4
Much of the difficulty of the Railroad stems from its unwillingness to recognize that credibility choices were open to, and resolved by, the jury verdict for Jones. That simplifies it considerably. Crediting Jones' version as the verdict does, it presented this uncomplicated situation. Jones was seated in the pickup truck. He saw McCue attempt to push the A-frame forward toward the cab of the truck so it would come to rest on the "headache" bar just behind the cab. However, the wire cable which ran from the power winch through a snatch block at the read end of the truck bed and then up through a block at the apex of the A-frame was hooked in such a way that the A-frame could not be pushed forward. McCue had attempted to slack-off on the winch drum, but not enough. About this time Jones told McCue what had to be done and then got up onto the truck bed to help. With McCue controlling the winch from the truck cab, Jones paid off some more of the wire cable so that the hook could be freed. He then called out for McCue to cut off the power. At that moment there was a lurch causing the heavy steel pipe legs to be jerked forward falling on Jones.
5
Little need be said of the first question concerning lookout. Lookout is a broad and inclusive term. Once the jury rejected McCue's version that he did not know Jones was on the truck bed pulling on the wire cable, it was quite permissible to infer that the injuries came from a failure on McCue's part to take proper regard of Jones' safety knowing (as the jury verdict imputed to him) that Jones was there and in a position of such danger as to require care in the further movement of the power winch.
6
As to the second question concerning status as an employee versus volunteer, the criticism is confined to the jury charge.2 No contention is now made that a directed verdict ought to have been granted on this score.
7
It is not easy to discern just what the Railroad thinks is objectionable either as formally stated in the exceptions or in the more detailed exploration of it in brief and on oral argument. Part [1] is acknowledged to be correct as are [2] and [3]. Complaint is made as to [4] and [5] in several ways. The principal one drawn out by oral argument was in the physical sequence of these parts. Thus, the Railroad asserts, the positive command of parts [1], [2] and [3] were somehow materially lessened so that it would have been preferable to have [4] and [5] come first. In this criticism the Railroad, at least momentarily, accepts parts [4] and [5] as essentially correct in content.
8
We see no such fault. Bearing in mind that neither judge nor jury can contrive, communicate or assimilate complex knowledge with the superhuman speed of a data computer, Thermo King Corp. v. White's Trucking Service, Inc., 5 Cir., 1961, 292 F.2d 668, the law as it is laid down must perforce come word by word, sentence by sentence. Something has to come first, something last. The thought — complex as it almost invariably will be — is to be judged for its accuracy, its fullness, its balance by the completed expression. The burden then is a heavy one in demonstrating that an error has come about from sequential arrangement of sentences.
9
On more traditional grounds, the Railroad next contends that this was an effectual direction of a finding that Jones was at a place called for by his employment, and that he was acting in the scope of it. We do not read these simple words in such a complicated fashion, nor could the jury.3 Parts [1], [2] and [3] emphatically required the injury to arise in the scope of employment. By parts [4] and [5] the jury was told that if the conditions therein discussed were found to exist, then the jury could find that the injury occurred in the employment. This was neither a partial direction of a jury finding,4 an unbalanced, overemphasized comment on the weight of the evidence, or a withdrawal from jury consideration of pertinent significant testimony.5
10
Finally, it is urged specifically that there was no definition of the term "general employment" as that is used in part [4] and perhaps implied in part [5] in the phrase "some specifically prescribed task." We think the meaning of this is quite plain as referring here to Jones' work as a telephone maintainer in the communications division. Terms of this character are to be used in their natural sense, Hull v. Philadelphia & Reading Ry. Co., 1920, 252 U.S. 475, 40 S.Ct. 358, 64 L.Ed. 670, and that ordinarily ought to mean, as it certainly does here, common sense.6
11
Except for these criticisms, the Railroad did not challenge the substantive content of the Court's charge on the status of volunteer versus employee. In the light of this we do not find it necessary or appropriate to explore the full reaches of the problem of the volunteer act in an FELA situation. The test laid down by the trial court was an objective one which the Railroad, as an employer, "might reasonably have * * * foreseen * * *" and which the employee reasonably thought "necessary for the benefit or in the interest of his employer."7 A willing spirit of cooperative helpfulness in which employees pitch in to advance the interest of their mutual employer is conducive to good employer-employee relations. These should not be thwarted by a niggardly application of the statute by which, out of a proper concern on the part of an employee whether protection would exist, might lead a cooperative employee to be reluctant to offer help to fellow employees apparently in need of assistance.
12
The other errors urged may be swiftly rejected. The attack that the charge allowed the jury to return a verdict for Jones on a finding of his own negligence borders on the frivolous. So does the criticism defining the burden of proof to be "the greater weight of the preponderance of the evidence." So inconsequential was this likely slip-of-the-tongue or slip-of-the-reporter's-pen (writing the hieroglyphic for "of" instead of "or") that it completely slipped the attention of the astute counsel for the Railroad. His exception was an afterthought made long after the trial was over. Moreover, if the error as uttered meant nought to him, it would be curious to ascribe to the jury a greater wisdom on this fine point of law.
13
The case was a swearing match between Jones and McCue on what happened and why. That was for the jury to resolve both on questions of liability vel non and on the status of volunteer versus employee. There it ends.
14
Affirmed.
Notes:
1
45 U.S.C.A. § 51 et seq
2
To simplify discussion of the Railroad's complaints, the numbers in brackets have been inserted:
"You are further instructed that under the Federal Employers' Liability Act, [1] the railroad owes no duty to protect the plaintiff or its other employees in a place where such employees were not required to be in the performance of the duties which he owes to the railroad as its employee. [2] In this connection, you are instructed that before the plaintiff can recover as against the defendant herein, he must show that at the time of the accident he was acting within the scope of employment, and in a place where his duty as an employee required him to be, and unless it is proven by a preponderance of the evidence that at the time of the accident plaintiff was performing some act or service which his duty required, and at a place where his duty required him to be, then you will find for the defendant. [3] In this connection you are also instructed that the defendant contends that the plaintiff was not in the course of his employment at the time he was injured.
[4] "You are instructed that once it has been established, that a plaintiff, under the Federal Employers' Liability Act, has become an employee he does not lose his status as an employee when he leaves his precise place of work and does other acts which are incidental to his general employment. [5] Further, you are instructed that an employee does not cease to be in the scope of his employment merely because he is not doing some specifically prescribed task, if in the course of his work he does some act which might reasonably have been foreseen by his employer, which he deems necessary for the benefit or in the interest of his employer."
3
If there were any doubt, it was certainly dispelled by this subsequent categorical direction:
"You are further instructed that if the plaintiff voluntarily or of his own free will, and not acting within the scope of his employment, as the Court has heretofore instructed you, undertook to assist in the lowering of the A-frame upon such winch truck, you will find for the defendant. * * *."
4
The Railroad emphasizes United States v. Raub, 7 Cir., 1949, 177 F.2d 312
5
The railroad strenuously urges these cases. Clement v. Packer, 1888, 125 U.S. 309, 8 S.Ct. 907, 31 L.Ed. 721; McCoy v. Blakely, 8 Cir., 1954, 217 F.2d 227; Virgiman Railway Co. v. Armentrout, 4 Cir., 1948, 166 F.2d 400, 4 A.L.R. 2d 1064; Starr v. United States, 1894, 153 U.S. 614, 14 S.Ct. 919, 38 L.Ed. 841; Quercia v. United States, 1933, 289 U.S. 466, 53 S.Ct. 698, 77 L.Ed. 1321; Grounds v. Roth, 10 Cir., 1954, 210 F. 2d 239; Crowe v. DiManno, 1 Cir., 1955, 225 F.2d 652; Rio Grande W. Ry. Co. v. Leak, 1896, 163 U.S. 280, 16 S.Ct. 1020, 41 L.Ed. 160
6
We have repeated it thus: "The test for the correctness of an instruction does not lie in the indulgence which a lawyer in his office with the aid of his books, or the trial and appellate courts with the benefit of briefs and arguments of counsel, give to instructions, but as to how the instructions will naturally be understood by the average men composing juries." Government Employees Insurance Co. v. Davis, 5 Cir., 1959, 266 F. 2d 760, 765. Judge Wyzanski has put it with more color: "[T]he object of a charge to a jury is not to satisfy an appellate court that you have repeated the right rigmarole of words, but to try to make jurors who are laymen understand what you are talking about." Cape Cod Food Products, Inc. v. National Cranberry Ass'n, D.C.D.Mass., 1954, 119 F. Supp. 900, 907
7
The instructions given here find explicit support, for parts at least, in several cases. Casey v. Hansen, Iowa. 1947, 238 Iowa 62, 26 N.W.2d 50; Bushing v. Iowa Ry. & Light Co., 1929, 208 Iowa 1010, 226 N.W. 719; Associated Employers' Reciprocal v. State Industrial Commission, 1921, 82 Okl. 229, 200 P. 174; Oklahoma Ry. Co. v. Cannon, 1946, 198 Okl. 65, 176 P.2d 482
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209 Cal.App.3d 542 (1989)
257 Cal. Rptr. 263
COLLEEN L., a Minor, Plaintiff and Appellant,
v.
HOWARD M., Defendant and Respondent.
Docket No. B035564.
Court of Appeals of California, Second District, Division Seven.
April 7, 1989.
*543 COUNSEL
Zelinsky & Lipton, Donald Zelinksy and Hugh A. Lipton for Plaintiff and Appellant.
Blum & Roseman and Mark E. Roseman for Defendant and Respondent.
OPINION
WOODS (Fred), J.
Our question is: Does Code of Civil Procedure section 340.1[1] which grants to certain sexually assaulted minors a three-year period, instead of a one-year period, to file an action, deny those same minors the tolling benefits of section 352? Our answer is no.
PROCEDURAL BACKGROUND
On January 21, 1986, while appellant was still a minor, one month shy of her eighteenth birthday, she filed the instant complaint, by her guardian ad litem, against respondent. The complaint alleged that during the 10-year period 1971-1981 respondent by threats and force sexually assaulted her.[2] The complaint did not allege any family relationship between appellant and respondent.
Respondent's answer, filed July 11, 1986, denied appellant's essential allegations based upon respondent's lack of "information or belief."
*544 On March 18, 1988, respondent filed a notice of motion for summary judgment (§ 437c) stating two undisputed "facts," first, that appellant is his daughter, and second, that applicable section 340.1's[3] three-year filing period expired in 1984, well before appellant filed her complaint.
Appellant's opposition to respondent's summary judgment motion appears to correct their relationship to stepdaughter and stepfather and secondly to state that appellant was still a minor when she filed her complaint and therefore the filing period was tolled by section 352, subdivision (a)(1).[4]
On June 10, 1988, as reflected by the clerk's minute order, the court granted respondent's motion for summary judgment "pursuant to Code of Civil Procedure section 340.1."[5]
DISCUSSION
For the purposes of the summary judgment motion appellant and respondent agreed on the facts, with the exception of whether respondent was the father or stepfather of appellant, an immaterial fact since section 340.1 (ante, fn. 3) applies to both. Thus the issue for the trial court was, and on appeal is, one of law.
(1a) This issue of law, whether the tolling protections of section 352 (ante, fn. 4) are nullified by the filing limitation provisions of another *545 section, is not novel. In Williams v. Los Angeles Metropolitan Transit Authority (1968) 68 Cal.2d 599 [68 Cal. Rptr. 297, 440 P.2d 497] a minor-plaintiff filed a complaint after the prescribed six-month filing period had elapsed. There, as in the instant case, the question was whether minor-plaintiff enjoyed the tolling benefits of section 352.
The court stated: "Section 352 of the Code of Civil Procedure, which governs this case, preserves during minority the minor's right to bring any action mentioned in chapter three of part two, title two of that code."[6] (68 Cal.2d at p. 601. Original italics.) After indicating that the applicable limitations section was mentioned in chapter three, the court expressed the function and policy of section 352 this way: "The legislative protection of the rights of the minor in all chapter three causes cuts across the limitations applicable to other litigants; the Legislature has enacted an express and clear tolling of the statute for the minor. We need engage in no rhetoric to establish the minor's right; we need not rely upon precepts of statutory construction to support it.
"The express words of the statutes effectuate a deep and long recognized principle of the common law and of this state: children are to be protected during their minority from the destruction of their rights by the running of the statute of limitations. This principle became a part of California statutory law as long ago as 1863...." (68 Cal.2d at p. 602.)
Similarly, in Jessica H. v. Allstate Ins. Co. (1984) 155 Cal. App.3d 590 [202 Cal. Rptr. 239] the court, by applying section 352, tolled a special two-year limitation provision applicable to no-fault insurance actions.
Most recently, the plaintiff in Snyder v. Boy Scouts of America, Inc. (1988) 205 Cal. App.3d 1318 [253 Cal. Rptr. 156] contended that his action was based upon section 340.1 and therefore timely filed because section 352 tolled the limitation period during his minority and the complaint, filed 15 months thereafter, was well within section 340.1's 3-year period. This argument, squarely opposite to respondent's position, that a minor who has been sexually assaulted by a family member may both toll the limitation period pursuant to section 352 and then, upon reaching majority, have three years to file an action pursuant to section 340.1, was impliedly accepted by the court (id., at p. 1325) but held inapplicable to plaintiff (since defendant was not a household or family member).
Respondent's position is the opposite. He contends that the class of children described by section 340.1 have three years from the last injurious *546 act to file an action. (While other similarly injured children but not described by section 340.1 have one year to file an action.)[7] Such children described by section 340.1 are without the tolling benefits of section 352 (while other children not described by § 340.1 enjoy the tolling benefits of § 352).
This position, and the summary judgment order which adopted it, may be illuminated by the following examples.
Example 1. Father sexually assaults his one-year-old daughter Mary. A stranger sexually assaults one-year-old Jane.
It is respondent's position that Jane may bring her action against stranger anytime until her 19th birthday but Mary must file her complaint against father before her 4th birthday.[8]
Example 2. Father sexually assaults his one-year-old daughter Sue and also sexually assaults her one-year-old friend Ellen.
It is respondent's position that Ellen may bring her action against father anytime until her 19th birthday but Sue must file her complaint against Father before her 4th birthday. (See fn. 7.)
We reject respondent's construction of sections 340.1 and 352 as absurd. (2) "[L]egislative policy is best effectuated by avoiding those constructions which lead to mischief or absurdity." (People v. Jeffers (1987) 43 Cal.3d 984, 998-999 [239 Cal. Rptr. 886, 741 P.2d 1127].)
(1b) As Williams aptly said "Despite the Legislature's express preservation in Code of Civil Procedure section 352 of the minor's right to sue, [respondent] would outlaw such action upon the ground of an alleged implied negation of it." (Williams v. Metropolitan Transit Authority, supra, 68 Cal.2d 599, 603. Original italics.)
We hold that a minor described by section 340.1 enjoys the tolling benefits of section 352. The trial court in granting the motion for summary judgment, was therefore in error.[9]
*547 DISPOSITION
The order granting respondent's motion for summary judgment is reversed. Costs on appeal are awarded to appellant.
Lillie, P.J., and Johnson, J., concurred.
NOTES
[1] Unless otherwise noted all statutory references are to the Code of Civil Procedure.
[2] Three causes of action, all based on the same conduct, are alleged: assault and battery, negligence, and trespass to person.
[3] "(a) In any civil action for injury or illness based upon lewd or lascivious acts with a child under the age of 14 years, fornication, sodomy, oral copulation, or penetration of genital or anal openings of another with a foreign object, 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.
"(b) `Injury or illness' as used in this section includes psychological injury or illness, whether or not accompanied by physical injury or illness.
"(c) `Household or family member' as used in this section includes a parent, stepparent, former stepparent, sibling, stepsibling, any other person related by consanguinity or affinity within the second degree, or any other person who regularly resided in the household at the time of the act, or who six months prior to the act regularly resided in the household.
"(d) Nothing 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.
"(e) 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."
[4] "If a person entitled to bring an action, mentioned in Chapter 3 of this title, be, at the time the cause of action accrued, either: [¶] 1. Under the age of majority; ... the time of such disability is not a part of the time limited for the commencement of the action." Section 340.1 is in chapter 3. Both sections 340.1 and 352 are part of title 2.
[5] The record on appeal does not include a transcript of the hearing nor the judgment (granting the motion for summary judgment) which is missing and lost from the file.
[6] Section 342, the limitations section in Williams, like section 340.1, is in title 2, chapter 3 as referred to by section 352.
[7] Section 340, subdivision (3).
[8] Jane may rely on section 352 until her 18th birthday and then has 1 year, pursuant to section 340, subdivision (3), to file her complaint. Mary has three years to file her complaint, pursuant to section 340.1, but may not rely on section 352.
[9] It is unnecessary for us to discuss either "delayed discovery" (§ 340.1, subd. (d)) or divestiture of appellant's cause of action by giving retroactive effect to section 340.1. (See, e.g., Black v. Vermont Marble Co. (1905) 1 Cal. App. 718, 723-724 [82 P. 1060].)
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537 U.S. 1031
MANTECON-ZAYASv.UNITED STATES.
No. 02-5366.
Supreme Court of United States.
November 18, 2002.
1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT.
2
C. A. 11th Cir. Certiorari denied. Reported below: 31 Fed. Appx. 928.
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691 F.2d 491
Joseph Horne Co., Inc., Appeal of
81-1374, 81-2996
UNITED STATES COURT OF APPEALS Third Circuit
8/4/82
1
W.D.Pa.
AFFIRMED
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405 B.R. 322 (2009)
In re Gary Roger KNOTTS, Jr., Debtor.
No. 08-20244-659.
United States Bankruptcy Court, E.D. Missouri, Northern Division.
April 29, 2009.
*323 James D. Smiser, James D. Smiser LLC, Kirksville, MO, for Debtor.
Brian James LaFlamme, Summers Compton Wells PC, St. Louis, MO, for Trustee.
ORDER
KATHY A. SURRATT-STATES, Bankruptcy Judge.
The matter before the Court is Trustee's Objection to Exemptions and Debtor's Response to Trustee's Objection to Exemptions. A hearing on the matter was held on August 28, 2008. Debtor and Trustee were represented by counsel and both counsel presented oral argument at the hearing. The matter was then taken as submitted by the Court. Upon consideration of the record as a whole, the Court issues the following FINDINGS OF FACT:
*324 On July 27, 2008, Debtor Gary Knotts (hereinafter "Debtor") filed a voluntary petition under Chapter 7 of the Bankruptcy Code. Debtor claimed a homestead exemption of $13,600.00 for real property located at 23074 Spencer Lane, Kirksville, Missouri, 63501 (hereinafter "Residential Property"), pursuant to MO.REV.STAT. § 513.475. Debtor moved out of the Residential Property prior to filing bankruptcy. Debtor, who is disabled, has been living with and caring for his disabled father-in-law.
Trustee alleges and Debtor does not deny that the home on the Residential Property is uninhabitable. Debtor further admits that the Residential Property would require significant improvements for Debtor and his wife to inhabit it. Debtor has no immediate intention to live at the Residential Property. Debtor intends to place a mobile home on the Residential Property while the home is renovated or replaced. Though Debtor's father-in-law has died, Debtor may continue to live at his father-in-law's residence for the undetermined future. At the hearing, Debtor's counsel indicated that the Residential Property is encumbered by a mortgage and the mortgage creditor has placed a padlock on the home at the Residential Property.
Trustee argues that Debtor cannot claim a homestead exemption because Debtor does not occupy the Residential Property, has not shown intent to occupy it and has no ability to control or strongly influence the time of occupation. Trustee further argues that Debtor does not have the present ability to build a structure on the Residential Property. Trustee contends therefore that Debtor's homestead exemption is improper and should be denied.
Debtor argues that he lived away from the Residential Property to care for his ill father-in-law. Debtor asserts that the majority of his personal property remains at the Residential Property. Debtor argues that he has a present ability to build a habitable structure on the Residential Property, in that a family member has agreed to fund the building of a habitable structure. Debtor further argues that the homestead exemption is proper and should be allowed.
JURISDICTION AND VENUE
This Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 151, 157 and 1334 (2008) and Local Rule 81-9.01(B) of the United States District Court for the Eastern District of Missouri. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (B) (2008). Venue is proper in this District under 28 U.S.C. § 1409(a) (2008).
CONCLUSIONS OF LAW
The issue here is whether Debtor may claim a homestead exemption in real property that Debtor owns but does not occupy. According to Missouri Revised Statutes § 513.475, "[t]he homestead of every person, consisting of a dwelling house and appurtenances, and the land used in connection therewith", is allowed a homestead exemption of up to $15,000. MO.REV. STAT. § 513.475 (2008). The definition of a homestead in Missouri is ownership plus occupancy. In re Dennison, 129 B.R. 609, 610 (Bankr.E.D.Mo.1991).
Here, Debtor owns the Residential Property. Debtor claims a homestead exemption of $13,600.00 in the Residential Property. Debtor moved out of the Residential Property prior to filing bankruptcy. Thus, Debtor is not occupying the Residential Property. Dennison makes it clear that if a debtor does not occupy the property that is being claimed as exempt, a debtor must show intent to occupy the property and an ability to control or *325 strongly influence the time of occupation. Dennison, 129 B.R. at 611. Intent to occupy requires both a declaration of intent and overt acts that support the intention. Id. at 611.
Trustee argues against Debtor's homestead exemption in light of the fact that Debtor does not occupy the Residential Property, has not shown an intent to occupy, and has no ability to control or strongly influence the time of occupation. Debtor admits that the home on the Residential Property is uninhabitable, and thus, Debtor is unable to live in the Residential Property at this time. The fact that a party makes a declaration of intent to make the property a homestead or permanent residence is not enough to establish a homestead for the purposes of exemption. Id. at 611. Although Debtor stated his intention to move back to the Residential Property and live in a mobile home, there has been no overt act to support his intention because Debtor has made no attempt to do so. Thus, Debtor's statement of intention lacks the additional requirement of overt acts in support of the intention.
Debtor is also required to show an ability to control or strongly influence the time of occupation. Trustee argues that Debtor has no present ability to build a structure on the Residential Property. Trustee correctly cited Dennison, which states that Debtor must prove that such a change in the land is practicable and physically and financially feasible. Dennison, 129 B.R. at 611. Debtor argues the fact that a family member has agreed to fund the building of a house demonstrates his ability to build a habitable structure on the Residential Property. Debtor himself does not have the financial means to build a new structure. The fact that Debtor lacks the financial means to build a new structure and has not moved a mobile home on the Residential Property shows that he has no ability to control or strongly influence the time of occupation.
Debtor asserted that the majority of his personal property remains at the Residential Property and that Debtor maintains possession of the Residential Property. The Court in In re Maloney found that after a debtor physically removes himself from the property and continuously occupies another residence, debtor must demonstrate to the court that at the time of removal he possessed the intent to return to the property and occupy it as a residence. In re Maloney, 311 B.R. 525 (Bankr.W.D.Mo.2004). However, Debtor has lived and continues to live away from the Residential Property in his father-in-law's residence. Therefore, Debtor has not shown evidence of his intent to return to the Residential Property and occupy it as his residence. Therefore,
IT IS ORDERED THAT Trustee's Objection to Exemptions is SUSTAINED and Debtor's exemption is DENIED.
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 02-60170
Summary Calendar
FRANCISCO ANTONIO CASTILLO,
Petitioner,
versus
IMMIGRATION AND NATURALIZATION SERVICE,
Respondent.
--------------------
Petition for Review of an Order of the
Board of Immigration Appeals
(A28 343 270)
--------------------
January 10, 2003
Before BARKSDALE, DEMOSS and BENAVIDES, Circuit Judges.
PER CURIAM:*
Francisco Antonio Castillo (“Castillo”) has filed a petition
for review of a final order of the Board of Immigration Appeals
(“BIA”) affirming the denial of Castillo’s motion to reopen his
deportation proceeding. Castillo was ordered deported in absentia
on May 13, 1988, when he failed to appear for his deportation
hearing.
*
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.
Contrary to Castillo’s assertion, the BIA did not determine
that the motion to reopen was untimely; the BIA denied the motion
on the basis that Castillo did not establish “reasonable cause” for
his failure to attend the hearing. The BIA did not abuse its
discretion in denying the motion. See Lara v. Trominski, 216 F.3d
487 (5th Cir. 2000); United States v. Estrada-Trochez, 66 F.3d 733,
735-36 (5th Cir. 1995). To the extent that the BIA determined that
Castillo’s request for substantive relief in the form of an
adjustment of status was untimely, Castillo asserts only that he
would have filed a timely motion for relief had he been given
proper notice of the deportation order. Inasmuch as he has not
shown that the notice was improper, this argument is without merit.
PETITION DENIED.
G:\screener\02-60170.opn.wpd 2
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13 N.Y.3d 838 (2009)
PEOPLE
v.
PIKE.
Court of Appeals of New York.
Decided October 8, 2009.
Application in criminal case for leave to appeal denied. (Read, J.).
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34 So.3d 197 (2010)
Clinton COLSON, III, Petitioner,
v.
STATE of Florida, Respondent.
No. 1D10-1668.
District Court of Appeal of Florida, First District.
May 6, 2010.
Matt Shirk, Public Defender, Fourth Judicial Circuit, and Richard B. Gordon, Assistant Public Defender, Jacksonville, for Petitioner.
Bill McCollum, Attorney General, Tallahassee, for Respondent.
PER CURIAM.
The petition seeking belated appeal of the judgment and sentence rendered on January 29, 2010, in Duval County Circuit Court case number 16-2008-CF-009451-AXXX-MA, is granted. Upon issuance of mandate, a copy of this opinion shall be furnished to the clerk of the circuit court for treatment as a notice of appeal in accordance with Florida Rule of Appellate Procedure 9.141(c)(5)(D). The court notes that pursuant to the lower tribunal's order of January 29, 2010, the Office of the Public Defender has been appointed to represent petitioner on appeal.
WOLF, PADOVANO, and CLARK, JJ., concur.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 09-15656 ELEVENTH CIRCUIT
AUGUST 16, 2010
Non-Argument Calendar
JOHN LEY
________________________
CLERK
D. C. Docket No. 09-00527-CV-2-MEF-SRW
KENNETH GENE WALL,
Plaintiff-Appellant,
versus
ANITA DENISE WALL,
a.k.a. Anita Denise Griffith,
JOHN B. BUSH, in his individual
and official capacities,
SIBLEY G. REYNOLDS, in his
individual and official capacities,
CAROL "FAIN" BUSH,
PAUL HIEBEL,
in his individual and official capacities,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Alabama
_________________________
(August 16, 2010)
Before WILSON, PRYOR and ANDERSON, Circuit Judges.
PER CURIAM:
Kenneth Wall appeals pro se the denial of his motion to alter or amend the
judgment that dismissed his complaint that he was denied a fair divorce hearing
because of a conspiracy between his former wife, Anita Wall, Judges John Bush
and Sibley Reynolds, court reporter Carol Bush, and Family Court Referee Paul
Hiebel. 42 U.S.C. §§ 1983, 1985. Wall moved to alter or amend on the ground
that he had not received a copy of the report and recommendation of the magistrate
judge that the district court had adopted. The district court denied Wall’s motion,
and we affirm.
The district court did not abuse its discretion by denying Wall’s motion to
alter or amend. The magistrate judge directed the clerk to serve Wall a copy of the
report and recommendation, see Fed. R. Civ. P. 72(b)(1), and that “service [was]
complete upon mailing,” Fed. R. Civ. P. 5(b)(2)(C). There is a presumption that an
item mailed has been received, Barnett v. Okeechobee Hosp., 283 F.3d 1232, 1239
(11th Cir. 2002), and Wall failed to submit sufficient evidence to rebut that
presumption. Although Wall alleged that he did not receive the report and
recommendation, he offered nothing more than his bare assertion to overcome the
presumption. See id. at 1241. The clerk mailed the report and recommendation to
2
the address provided by Wall, and the report was not returned as undeliverable by
postal officials. Wall also had received documents mailed previously to that same
address. Wall also failed to explain what objections, if any, he would have filed
had he received the report earlier, nor has Wall offered any explanation on appeal.
We AFFIRM the denial of Wall’s motion to alter or amend.
3
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389 U.S. 50 (1967)
CENTRAL MAGAZINE SALES, LTD.
v.
UNITED STATES.
No. 368.
Supreme Court of United States.
Decided October 23, 1967.
ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT.
Richard Lipsitz for petitioner.
Solicitor General Marshall, Assistant Attorney General Vinson and Jerome M. Feit for the United States.
PER CURIAM.
The petition for a writ of certiorari is granted and the judgment of the United States Court of Appeals for the Fourth Circuit is reversed. Redrup v. New York, 386 U. S. 767.
MR. JUSTICE HARLAN concurs in the judgment of reversal upon the premises stated in his separate opinion in Roth v. United States, 354 U. S. 476, 496, and in his dissenting opinion in Memoirs v. Massachusetts, 383 U. S. 413, 455, 457.
THE CHIEF JUSTICE believes this case is controlled by Roth v. United States, 354 U. S. 476, and the judgment should be affirmed in accordance with the principles enunciated in the opinion of the Court in that case.
MR. JUSTICE MARSHALL took no part in the consideration or decision of this case.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 11-14949 JUNE 5, 2012
Non-Argument Calendar JOHN LEY
________________________ CLERK
D.C. Docket No. 3:11-cr-00012-TJC-MCR-1
UNITED STATES OF AMERICA,
lllllllllllllllllllllllllllllllllllllll lPlaintiff-Appellee,
versus
WILLIS ALPHONSO WILLIAMS,
a.k.a. Will,
llllllllllllllllllllllllllllllllllllllll Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(June 5, 2012)
Before TJOFLAT, BARKETT and ANDERSON, Circuit Judges.
PER CURIAM:
Pursuant to a plea agreement, Willis Alphonso Williams pled guilty to
passing and uttering false financial instruments, in violation of 18 U.S.C.
§§ 514(a)(2), and the district court varying upward from the prescribed Guidelines
sentence range, which called for a prison sentence of 41 to 51 months, sentenced
Williams to a prison term of 75 months. He now appeals, arguing that his
sentence is both procedurally and substantively unreasonable. We affirm.
I.
Between March and November 2010, Williams and Lashonda Barry were
involved in a scheme to pass counterfeit commercial checks. As part of this
scheme, the pair would locate homeless individuals, use their identifying
information to create counterfeit checks, drive them to various businesses (mostly
Walmart stores), and instruct them to cash the checks. Williams and Barry paid
their recruits $75 for cashing each check. During the course of the enterprise, the
pair attempted to pass 106 counterfeit checks totaling nearly $105,000, while the
actual loss amount was approximately $21,000.
Williams’s criminal record reveals that, beginning in 1985, Williams had
been convicted on at least 30 separate occasions for various crimes. Many of
these offenses were relatively minor, such as driving without a license or with an
improper tag. Many were more serious, however, and included possession of
illegal drugs, theft, battery, giving false names to the police, burglary, and escape
2
from jail. On one occasion, Williams was convicted in federal district court for an
offense nearly identical to the one here, namely, recruiting persons to negotiate
counterfeit checks.
In preparing the presentence investigation report and calculating the
Guidelines sentence range for Williams’s offense, the court’s probation officer
assigned the offense a base offense level of 7, pursuant to U.S.S.G. § 2B1.1(a)(1).
The officer added 8 levels under § 2B1.1(b)(1)(E) because the amount of intended
loss exceeded $70,000; added 4 levels under § 3B1.1(a) because Williams was an
organizer or leader of the criminal activity; and subtracted 3 levels under § 3E1.1
for acceptance of responsibility. Based on five of Williams’s prior convictions,
the probation officer placed him in a criminal history category of V, which,
combined with the total offense level of 16, yielded a sentence range of 41 to 51
months in prison.
At the sentencing hearing, the district court provided a comprehensive
explanation for why a sentence above the sentence range was appropriate. It
discussed the seriousness of Williams’s offense, observing that he played a major
role in the scheme, that he recruited homeless persons, and that the offense
involved over 100 counterfeit checks, occurred over a period of time, and would
not have stopped but for the intervention of law enforcement. The court also
3
discussed at length Williams’s extensive criminal history, characterizing it as
“fairly remarkable” and stressing the fact that he was previously convicted in
federal court for a nearly identical check fraud scheme. The court further stated
that the Guidelines were “not quite there” and “remarkably forgiving for repeat
economic crimes offenders.” It then sentenced Williams to 75 months in prison to
be followed by five years of supervised release.
II.
We review the reasonableness of a sentence under a “deferential abuse-of-
discretion standard.” Gall v. United States, 552 U.S. 38, 41, 128 S.Ct. 586, 591,
169 L.Ed.2d 445 (2007). First, we determine whether the district court committed
any “significant procedural error” and, second, whether the sentence was
“substantively reasonable under the totality of the circumstances.” United States
v. Turner, 626 F.3d 566, 573 (11th Cir. 2010). “A sentence may be procedurally
unreasonable if the district court improperly calculates the Guidelines sentence
range, treats the Guidelines as mandatory rather than advisory, fails to consider the
appropriate statutory factors, selects a sentence based on clearly erroneous facts,
or fails to adequately explain the chosen sentence.” United States v. Gonzalez,
550 F.3d 1319, 1323 (11th Cir. 2008). “The review for substantive
unreasonableness involves examining the totality of the circumstances, including
4
an inquiry into whether the statutory factors [set out in 18 U.S.C.] § 3553(a)
support the sentence in question.” Id. at 1324.1
If the district court determines that a sentence outside the prescribed
sentence range is appropriate, “it must consider the extent of the deviation and
ensure that the justification is sufficiently compelling to support the degree of the
variance.” United States v. Williams, 526 F.3d 1312, 1322 (11th Cir. 2008)
(quotation omitted). However, we only reverse a sentence due to a variance “if we
are left with the definite and firm conviction that the district court committed a
clear error of judgment in weighing the § 3553(a) factors by arriving at a sentence
that lies outside the range of reasonable sentences dictated by the facts of the
case.” United States v. Shaw, 560 F.3d 1230, 1238 (11th Cir. 2009) (quotation
omitted).
Williams alleges only one procedural error, namely, that the district court
considered an improper factor in imposing the variance by expressing its concern
that the Guidelines were overly lenient towards economic-crime offenders. We
1
Under § 3553(a), a sentencing court must impose a sentence that is “sufficient, but not
greater than necessary” to comply with the purposes of sentencing set forth in § 3553(a)(2), which
include the need to reflect the seriousness of the offense, promote respect for the law, provide just
punishment for the offense, deter criminal conduct, and protect the public from the defendant’s
further crimes. 18 U.S.C. § 3553(a)(2). Other factors to be considered in imposing a sentence
include the nature and circumstances of the offense, the history and characteristics of the defendant,
the available sentences, the applicable guideline range, the need to avoid unwarranted sentence
disparities, and the need to provide restitution to victims. Id. § 3553(a)(1), (3)-(7).
5
need not decide the merits of this issue, however, because the court’s statements
regarding the Guidelines’ leniency formed only a minor part of its explanation for
the sentence. The court placed much more emphasis on the seriousness of
Williams’s offense and his extensive criminal history, which, as discussed below,
amply supported the variance in question. Thus, the court’s disagreement with the
applicable Guidelines, even if improper, at most constituted harmless error. See
United States v. Jones, 1 F.3d 1167, 1171 (11th Cir. 1993) (“A sentencing error is
harmless if the record as a whole shows that the error did not affect the district
court’s selection of the sentence imposed.”); see also United States v. Williams,
456 F.3d 1353, 1371-72 (11th Cir. 2006) (holding that the district court’s
consideration of an impermissible factor at sentencing did not constitute harmless
error because the court devoted “the overwhelming majority of its explanation” to
the improper factor), abrogated on other grounds by Kimbrough v. United States,
552 U.S. 85, 128 S.Ct. 558, 169 L.Ed.2d 481 (2007).
As to substantive unreasonableness, Williams argues that nothing
extraordinary about his case justified a major variance, as the Guidelines sentence
range had already accounted for the seriousness of his offense and his criminal
history. However, while the sentence range accounted for several aggravating
factors, such as the loss amount and William’s leadership role in the offense, the
6
district court could still consider these factors as a basis for varying upwards. See
United States v. Rodriguez, 628 F.3d 1258, 1264 (11th Cir. 2010) (stating that a
district court can impose a variance based on factors that it had already considered
in applying a guideline enhancement), cert. denied, 131 S.Ct. 2166 (2011).
Moreover, the district court considered other aggravating circumstances that
were not reflected in the sentence range. Specifically, the court noted that
Williams and his accomplice used homeless persons to carry out their scheme and
that the offense involved over 100 counterfeit checks and occurred over a
prolonged period of time. Moreover, the court heavily emphasized Williams’s
criminal history, which included a number of serious offenses and extended far
beyond the five prior convictions used to calculate his criminal history score under
the Guidelines. Thus, in light of the aggravated nature of Williams’s offense and
his extensive criminal history, the court could reasonably conclude that no
sentence less than 75 months would adequately reflect the seriousness of the
crime, promote respect for the law, provide just punishment, deter criminal
conduct, and protect the public from Williams’s further crimes. See 18 U.S.C.
§ 3553(a)(1)-(2); Shaw, 560 F.3d at 1239-41 (upholding as reasonable a
120-month sentence that significantly exceeded the guideline range of 30 to 37
months, in large part due to the defendant’s extensive criminal history). We also
7
note that Williams’s sentence of 6.25 years fell far below the statutory maximum
sentence of 25 years, which further indicates its substantive reasonableness. See
Gonzalez, 550 F.3d at 1324 (concluding that a sentence was reasonable in part
because it was well below the statutory maximum).
Because Williams’s sentence is procedurally and substantively reasonable,
it is
AFFIRMED.
8
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[Cite as State v. Smith, 2012-Ohio-2956.]
COURT OF APPEALS
RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JUDGES:
STATE OF OHIO : Hon. W. Scott Gwin, P.J.
: Hon. Sheila G. Farmer, J.
Plaintiff-Appellee : Hon. Julie A. Edwards, J.
:
-vs- :
: Case No. 2011-CA-0110
STEVE A. SMITH :
:
Defendant-Appellant : OPINION
CHARACTER OF PROCEEDING: Criminal appeal from the Richland Couonty
Court of Common Pleas, Case No. 2011-
CR-347D
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: June 27, 2012
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellant
JAMES J. MAYER JOHN C. O'DONNELL, III.
JILL COCHRAN 13 Park Avenue West, Ste. #300
Richland County Prosecutor Mansfield, OH 44902
38 South Park Street
[Cite as State v. Smith, 2012-Ohio-2956.]
Gwin, P.J.
{¶1} An indictment was filed on July 8, 2011, charging the appellant, Steve
Smith [“Smith”], with one count of Aiding and Abetting Illegal Conveyance of Prohibited
Items onto the Grounds of Specified Governmental Facility, a felony of the third degree,
one count of Bribery, a felony of the third degree, and two counts of Aiding and Abetting
Trafficking in Marijuana. One of the counts of trafficking was dismissed prior to trial.
{¶2} At the end of the presentation of the evidence, the jury found Smith guilty
of the three remaining charges. Smith was sentenced on October 17, 2011. He was
given three years in prison on the charge of Illegal Conveyance. Because Smith was a
corrections officer in the prison at the time of the offense, this prison time was
mandatory. Smith was further sentenced to twelve months in prison for the trafficking
charge. This time was to run concurrently with the time on the Illegal Conveyance
charge. On the charge of Bribery, Smith was sentenced to a two-year term of
community control to begin upon his release from prison on counts one and three.
Facts and Procedural History
{¶3} In May 2011, an FBI agent was interviewing Manuel Garza, AKA Manny,
an inmate at the Richland Correctional Institution (hereinafter RiCI) about a matter
unrelated to his current incarceration. At the end of the interview, the agent asked
Manuel if he had anything else that he wanted to discuss. Because of this conversation,
an undercover operation was devised to arrest a corrections officer who was reportedly
bringing contraband into the prison. The identity of the corrupt correction officer was not
initially known.
Richland County, Case No. 2011-CA-0110 3
{¶4} Manny was given a telephone number to transfer to the corrections officer.
He completed this transaction through another inmate Marvin Crayton. The subject
corrections officer was to contact "Doug" at the number provided. The corrections officer
was told that "Doug" was Manny's girlfriend's uncle and "Doug" would provide him with
a package to deliver into the institution. It was the understanding of the officers involved
in the operation the corrections officer would be asking for an ounce of marijuana, an
unknown amount of tobacco and a thousand dollars to complete the transaction.
{¶5} The cellular telephone associated with the telephone number given to
Manny belonged to the Ohio State Highway Patrol and was obtained from the Findlay
headquarters. This cellular telephone was given to Trooper Bryan Butler, an investigator
for the Ohio State Highway Patrol, who was briefed on the situation and told how to
respond when contacted by the corrections officer in question.
{¶6} In preparation for the operation, Trooper Butler signed out $1000 in cash
from the investigation section of the Ohio State Highway Patrol and signed out a little
more than an ounce of marijuana from the Ohio State Highway Patrol lab. He took
possession of these items on May 20, 2011.
{¶7} On May 26, 2011, Trooper Butler was contacted on the undercover
cellular phone via text message from telephone number 419-631-0579. The message
read, "Hi, I'm a friend of Manny's. He told me to contact you about a package I was
supposed to pick up. Is this the right person?" Trooper Butler responded and indicated
that he was indeed the right person. Several messages passed back and forth and a
meeting was set up for the following day at 11:00 a.m. Trooper Butler was to meet the
corrections officer in the parking lot of the Salvation Army located on Ashland Road in
Richland County, Case No. 2011-CA-0110 4
Mansfield, Ohio. It was determined by matching the telephone number that the text
messages came from with the telephone numbers on record in the prison personnel
files, that the corrections officer in question was Smith.
{¶8} Around 8:00 a.m. on May 27, 2011, members of the Ohio State Highway
Patrol investigative staff, the Ohio State Highway Patrol Special Response Team and
officers of METRICH met at the METRICH office to work out how the operation would
be carried out. Trooper Butler brought the money and the marijuana. Investigator Bret
Perdue from RiCI brought the tobacco used in the operation. A member of METRICH
wired Trooper Butler with video and audio recording equipment. METRICH also aided in
the surveillance of the transaction.
{¶9} At 10:11 a.m., Trooper Butler sent a text message to Smith to ask him
what he was supposed to be bringing to the meeting. Smith texted back "Well I
understand I’m picking up tobacco, an ounce, and $600." The understanding of the
investigating officers was that "an ounce" referred to an ounce of marijuana, not an
ounce of tobacco. The clear bag of tobacco and smaller clear sandwich baggies of
marijuana were placed inside of two plastic grocery bags, which were then loosely
folded over the interior bags. The marijuana had been taken from a hard-pressed brick
of marijuana from a previous drug bust and was harder than the loose tobacco.
{¶10} Trooper Butler drove to the meeting place in an Ohio State Highway Patrol
undercover Volkswagen Jetta. Several other undercover vehicles were positioned at
different locations nearby. Smith had indicated that he was going to be driving a blue
S10 pickup truck and just prior to arriving at the meeting location, Trooper Butler had
received a text message from Smith indicating that Smith was already present.
Richland County, Case No. 2011-CA-0110 5
{¶11} Trooper Butler pulled into a parking spot next to Smith who had backed
into his spot so that the two vehicles were parked driver's side to driver's side. Trooper
Butler got out of his vehicle and approached Smith. Smith then left his vehicle and
accompanied Trooper Butler back to his vehicle. Although the video surveillance did not
show much, the audio surveillance did pick up the conversation that occurred in the car
and the jury was able to listen to the conversation. During this conversation, Smith
seemed calm and talkative. He discussed how he was going to smuggle the contraband
into the prison and how much money it was going to bring. Although there was no
mention by Trooper Butler of marijuana, Smith told Trooper Butler "tobacco is a bigger
business than the weed is in there."
{¶12} Trooper Butler gave Smith the grocery bag with the bag of tobacco and
marijuana and then counted out six hundred dollars in cash and gave that to Smith.
Trooper Butler did not recall if Smith looked inside of the grocery bag and Smith denied
ever looking inside. Smith exited the undercover vehicle and approached his own
vehicle but was stopped and arrested by the Special Response Team before he made it
to his vehicle.
{¶13} Smith gave an audio statement to police, admitted that he had made a
deal with an inmate to go pick up a package, and was supposed to bring this package
into the prison. He denied knowing that the drugs were in the package and indicated
that he was only supposed to bring in tobacco. He admitted that he knew he was
supposed to bring in tobacco and that he had done so in the past. Smith admitted that
inmate Crayton had asked him to bring in drugs but that he was leery of going down that
road. Smith also stated that he told Crayton he was not comfortable with the idea of
Richland County, Case No. 2011-CA-0110 6
bringing in marijuana but that he never gave Crayton a definite answer about whether or
not he would bring in the drugs. He admitted the same on the stand. During the
interview, Smith vacillated from denying that he had any knowledge about the drugs to
admitting that he had a good idea that he would be picking up an ounce of marijuana.
{¶14} Smith admitted "the only reason I even considered weed this time was
because we was in so much trouble, cause they're only give you a couple hundred for
tobacco and I needed six hundred to get us out of trouble." (State's Trial Exhibit 21).
Smith testified at trial and denied that he was ever going to transport the marijuana into
prison.
{¶15} Smith testified that he started to bring in tobacco into the prison because
he was being blackmailed by inmate McDonald, who said he would tell the Captain that
Smith was sneaking cigarettes into prison for his own use. Smith admitted that he
brought tobacco into the prison three times for inmate McDonald for a total amount of
$700, rather than the twenty to twenty-five times that he admitted to in his statement to
police. Smith indicated that the deal was always for an ounce of tobacco and that was
what he meant in his text message to Trooper Butler. The delivery person always tried
to give Smith more tobacco than an ounce so Smith was not surprised that the bag
given to him by Trooper Butler was clearly more than an ounce of tobacco. Smith also
testified that he was not surprised that there was marijuana because on two of the three
occasions that people had given him tobacco, they had also tried to give him marijuana.
Smith testified that he just threw the marijuana away rather than transport it into the
prison and that he intended to do the same on this occasion, although he had been
clearly paid to deliver the marijuana.
Richland County, Case No. 2011-CA-0110 7
{¶16} Tobacco and marijuana are both considered contraband at RiCI.
Assignments of Error
{¶17} Smith raises seven assignments of error,
{¶18} “I. IT IS AGAINST THE SUFFICIENCY OF THE EVIDENCE THAT
DEFENDANT/APPELLANT ATTEMPTED- TO CONVEY MARIJUANA INTO A
CORRECTIONAL FACILITY.
{¶19} “II. IT IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE
THAT DEFENDANT/APPELLANT ATTEMPTED TO CONVEY MARIJUANA INTO A
CORRECTIONAL FACILITY.
{¶20} “III. IT IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE THAT
DEFENDANT/APPELLANT KNOWINGLY TRAFFICKED IN DRUGS.
{¶21} “IV. IT IS AGAINST THE SUFFICIENCY OF THE EVIDENCE THAT
DEFENDANT/APPELLANT KNOWINGLY TRAFFICKED IN DRUGS.
{¶22} “V. THE COURT COMMITTED PLAIN ERROR IN INSTRUCTING THE
JURY THAT A CORRECTIONS OFFICER IS A PUBLIC SERVANT FOR PURPOSES
OF A BRIBERY OFFENSE.
{¶23} “VI. THE COURT COMMITTED PLAIN ERROR BY INSTRUCTING THE
JURY ON ATTEMPT.
{¶24} “VII. THE TRIAL COUNSEL WAS INEFFECTIVE FOR FAILING TO
OBJECT TO THE JURY INSTRUCTIONS.”
Richland County, Case No. 2011-CA-0110 8
Analysis
I, II, III IV
{¶25} Smith’s first four arguments of error raise issues involving the sufficiency
and manifest weight of the evidence presented below. Smith argues he did not intend to
transport marijuana into the prison and he could have changed his mind and disposed of
the marijuana.
{¶26} Our review of the constitutional sufficiency of evidence to support a criminal
conviction is governed by Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d
560 (1979), which requires a court of appeals to determine whether “after viewing the
evidence in the light most favorable to the prosecution, any rational trier of fact could
have found the essential elements of the crime beyond a reasonable doubt.” Id.; see also
McDaniel v. Brown, _U.S._, 130 S.Ct. 665, 673, 175 L.Ed.2d 582(2010) (reaffirming this
standard); State v. Fry, 125 Ohio St.3d 163, 926 N.E.2d 1239, 2010–Ohio–1017, ¶ 146;
State v. Clay, 187 Ohio App.3d 633, 933 N.E.2d 296, 2010–Ohio–2720, ¶ 68.
{¶27} Weight of the evidence addresses the evidence's effect of inducing belief.
State v. Thompkins, 78 Ohio St.3d 380, 386-387, 678 N.E.2d 541 (1997), superseded by
constitutional amendment on other grounds as stated by State v. Smith, 80 Ohio St.3d 89,
684 N.E.2d 668, 1997-Ohio–355. Weight of the evidence concerns “the inclination of the
greater amount of credible evidence, offered in a trial, to support one side of the issue
rather than the other. It indicates clearly to the jury that the party having the burden of
proof will be entitled to their verdict, if, on weighing the evidence in their minds, they shall
find the greater amount of credible evidence sustains the issue which is to be established
before them. Weight is not a question of mathematics, but depends on its effect in
Richland County, Case No. 2011-CA-0110 9
inducing belief.” (Emphasis sic.) Id. at 387, 678 N.E.2d 541, quoting Black's Law
Dictionary (6th Ed. 1990) at 1594.
{¶28} When a court of appeals reverses a judgment of a trial court on the basis
that the verdict is against the weight of the evidence, the appellate court sits as a
“’thirteenth juror’” and disagrees with the fact finder’s resolution of the conflicting
testimony. Id. at 387, 678 N.E.2d 541, quoting Tibbs v. Florida, 457 U.S. 31, 42, 102 S.Ct.
2211, 72 L.Ed.2d 652 (1982). However, an appellate court may not merely substitute its
view for that of the jury, but must find that “‘the jury clearly lost its way and created such a
manifest miscarriage of justice that the conviction must be reversed and a new trial
ordered.’” State v. Thompkins, supra, 78 Ohio St.3d at 387, quoting State v. Martin, 20 Ohio
App.3d 172, 175, 485 N.E.2d 717, 720–721(1st Dist. 1983). Accordingly, reversal on
manifest weight grounds is reserved for “‘the exceptional case in which the evidence
weighs heavily against the conviction.’” Id.
“[I]n determining whether the judgment below is manifestly against
the weight of the evidence, every reasonable intendment and every
reasonable presumption must be made in favor of the judgment and the
finding of facts. * * *
“If the evidence is susceptible of more than one construction, the
reviewing court is bound to give it that interpretation which is consistent with
the verdict and judgment, most favorable to sustaining the verdict and
judgment.”
Seasons Coal Co., Inc. v. Cleveland, 10 Ohio St.3d 77, 80, 461 N.E.2d 1273 (1984), fn.
3, quoting 5 Ohio Jurisprudence 3d, Appellate Review, Section 60, at 191–192 (1978).
Richland County, Case No. 2011-CA-0110 10
{¶29} In the case at bar, Smith was convicted of illegal conveyance. R.C. 2921.36
Prohibited conveying of certain items onto property of state facilities states in relevant
part,
(A) No person shall knowingly convey, or attempt to convey, onto the
grounds of a detention facility or of an institution, office building, or other
place that is under the control of the department of mental health, the
department of developmental disabilities, the department of youth services,
or the department of rehabilitation and correction any of the following items:
(1) Any deadly weapon or dangerous ordnance, as defined in section
2923.11 of the Revised Code, or any part of or ammunition for use in such
a deadly weapon or dangerous ordnance;
(2) Any drug of abuse, as defined in section 3719.011 of the Revised Code;
(3) Any intoxicating liquor, as defined in section 4301.01 of the Revised
Code.
{¶30} Smith was also convicted of trafficking in marijuana. R.C. 2925.03(A)(2)
states in part that no person shall knowingly "[p]repare for shipment, ship, transport,
deliver, prepare for distribution, or distribute a controlled substance, when the offender
knows or has reasonable cause to believe that the controlled substance is intended for
sale or resale by the offender or another person."
{¶31} Whether a person acts knowingly can only be determined, absent a
defendant's admission, from all the surrounding facts and circumstances, including the
doing of the act itself.” State v. Huff, 145 Ohio App.3d 555, 563, 763 N.E.2d 695(2001).
(Footnote omitted.) Thus, “[t]he test for whether a defendant acted knowingly is a
Richland County, Case No. 2011-CA-0110 11
subjective one, but it is decided on objective criteria.” State v. McDaniel, 2nd Dist.
No.6221, 1998 WL 214604, (citing State v. Elliott, 104 Ohio App.3d 812, 663 N.E.2d
412(1995)).
{¶32} R.C. 2923.02(A) provides a definition of attempt: "[n]o person, purposely
or knowingly, and when purpose or knowledge is sufficient culpability for the
commission of an offense, shall engage in conduct that, if successful, would constitute
or result in the offense."
{¶33} In State v. Woods, 48 Ohio St. 2d 127, 357 N.E. 2d 1059(1976), vacated
on other grounds (1978), 438 U.S. 910, 98 S.Ct. 3133, 57 L.Ed.2d 1153, the Supreme
Court held at paragraph one of the syllabus that “[a] ‘criminal attempt’ is when one
person purposely does or omits to do anything which is an act or omission constituting a
substantial step in a course of conduct planned to culminate in his commission of the
crime. To constitute a substantial step, the conduct must be strongly corroborative of
the actor's criminal purpose. (R.C. 2923. 02[A] construed).”
{¶34} In Woods, the defendant and another defendant, Reaves, decided to rob
the manager of the store as he came out with the store's receipts. The defendants
began to “case” the premises. Reaves climbed on the roof with a gun while Woods
stayed behind as lookout. Reaves then climbed back down, apparently having heard a
nearby fire engine siren, and then Reaves and Woods walked away.
{¶35} The Supreme Court found Reaves' actions to be plainly a substantial step
in the planned robbery, and strongly corroborative of his and Woods' criminal purpose.
The court found no error in the trial court's finding that this conduct constituted
attempted robbery. Justice Stern wrote the following:
Richland County, Case No. 2011-CA-0110 12
The committee comment for this section [R.C. 2923.02(A) ] states, in part,
that: ‘In order to prove an attempt to commit an offense, it must be shown
that particular conduct directed toward commission of the offense took
place and that such conduct, if successful, would constitute or result in the
offense. * * *’ This language establishes that the essential elements of a
criminal attempt are the mens rea or purpose or knowledge, and conduct
directed toward the commission of an offense. The statute does not,
however, indicate how far this conduct must proceed toward the actual
consummation of the crime in order to be considered an attempt to commit
that crime. There is also little case law in Ohio on this question, although
this court has held that the conduct necessary for a criminal attempt ‘need
not be the last proximate act prior to the consummation of the felony.’
State v. Farmer (1951), 156 Ohio St. 214, 216, 102 N.E.2d 11; Fox v.
State (1878), 34 Ohio St. 377. In Farmer, an assault with intent to rob was
held, at page 217, ‘sufficient to justify the triers of the facts in determining
beyond a reasonable doubt that the action of the defendant at the time of *
* * [an] altercation was action taken to carry out that intent and therefore
amounted to an attempt to perpetrate robbery.’ In this case, Reaves
committed no assault, and the question arises as to whether his acts
nevertheless amounted to an attempt to rob.
American courts have generally agreed that intent to commit a crime does
not of itself constitute an attempt, nor does mere preparation. The difficulty
is to formulate a standard that excludes preparations prior to an actual
Richland County, Case No. 2011-CA-0110 13
attempt to commit a crime, while including, as punishable, those acts
which are so dangerously close to resulting in a crime that intervention
and arrest by the police are justified, even before the ‘last proximate act.’
Various tests have been suggested and followed in other jurisdictions.
There is a good discussion of this problem and the various approaches in
Wechsler, Jones and Korn, The Treatment of Inchoate Crimes in the
Model Penal Code of the American Law Institute: Attempt, Solicitation,
and Conspiracy. 61 Columbia L.Rev. 571, 573-621. It is not necessary to
consider each of the alternative approaches here. Ohio's statutory
definitions of criminal offenses in the Revised Code are based largely
upon the American Law Institute's Model Penal Code, and the standard
adopted in the latter Code appears to us workable, reasonable, and
consistent with the language of R.C. 2923.02(A). Under Section 5.01 of
the Model Penal Code, an attempt is when one ‘purposely does or omits
to do anything which is * * * an act or omission constituting a substantial
step in a course of conduct planned to culminate in his commission of the
crime.’ To constitute a ‘substantial step,’ the conduct must be ‘strongly
corroborative of the actor's criminal purpose.’ The application of this
standard will of course depend upon both the nature of the intended crime
and the facts of the particular case. A substantial step in the commission
of a robbery may be quite different from that in arson, rape, or some other
crime. But this standard does properly direct attention to overt acts of the
defendant which convincingly demonstrate a firm purpose to commit a
Richland County, Case No. 2011-CA-0110 14
crime, while allowing police intervention, based upon observation of such
incriminating conduct, in order to prevent the crime when the criminal
intent becomes apparent.
Id. 48 Ohio St. 2d at 131-132, 357 N.E.2d at 1063.
{¶36} In State v. Brooks, 44 Ohio St.3d 185, 542 N.E.2d 636, the Supreme
Court further defined “substantial step,”
Comment 6(a) to Section 5.01 of the Model Penal Code explains the
requirements of “substantial step” and corroboration of the actor's criminal
purpose:
‘(a) Requirements of ‘Substantial Step’ and Corroboration of Purpose.
Whether a particular act is a substantial step is obviously a matter of
degree. To this extent, the Code retains the element of imprecision found
in most of the other approaches to the preparation-attempt problem. There
are, however, several differences to be noted:
‘First, this formulation shifts the emphasis from what remains to be done,
the chief concern of the proximity tests, to what the actor has already
done. That further major steps must be taken before the crime can be
completed does not preclude a finding that the steps already undertaken
are substantial. It is expected, in the normal case, that this approach will
broaden the scope of attempt liability.
‘Second, although it is intended that the requirement of a substantial step
will result in the imposition of attempt liability only in those instances in
which some firmness of criminal purpose is shown, no finding is required
Richland County, Case No. 2011-CA-0110 15
as to whether the actor would probably have desisted prior to completing
the crime. Potentially the probable desistance test could reach very early
steps toward crime, depending on how one assesses the probabilities of
desistance; but since in practice this test follows closely the proximity
approaches, rejection of a test of probable desistance will not narrow the
scope of attempt liability.
‘Finally, the requirement of proving a substantial step generally will prove
less of a hurdle for the prosecution than the res ipsa loquitur approach,
which requires that the actor's conduct itself have manifested the criminal
purpose. The basic rationale of the requirement that the actor's conduct
shall strongly corroborate his purpose to commit a crime is, of course, the
same as that underlying the res ipsa loquitur view. But framed in terms of
corroboration, the present formulation does not so narrowly circumscribe
the scope of attempt liability. Rigorously applied, the res ipsa loquitur
doctrine would provide immunity in many instances in which the actor had
gone far toward the commission of an offense and had strongly indicated
a criminal purpose. * * *” (Emphasis added.) A.L.I. Model Penal Code and
Commentaries, Part I (1985), 329-330.
Id. at 191-192, 542 N.E.2d 636.
{¶37} In the case at bar, two diametrically opposed scenarios were presented
during Smith’s jury trial. Smith testified that he never looked inside the bag that he was
given by the undercover officer and further testified he never agreed to smuggle
marijuana into the prison. Smith argues that there is no evidence that he knew
Richland County, Case No. 2011-CA-0110 16
marijuana was inside the bag and no evidence that he intended to smuggle it into the
prison. Smith further argues that he could have abandoned the crime by throwing the
drugs away but was prevented from doing so by his immediate arrest.
{¶38} In the case at bar the steps taken by Smith that convincingly demonstrate
a firm purpose to commit a crime include the following: Smith admitted that he had
taken contraband, i.e. tobacco, into the prison in violation of prison regulations in the
past. He admitted that he was aware there might be drugs involved in the transaction.
Smith admitted to the investigating officer "the only reason I even considered weed this
time was because we was in so much trouble, cause they're only give you a couple
hundred for tobacco and I needed six hundred to get us out of trouble." Smith made
telephone contact with and arranged to meet the contact. Smith drove to the arranged
meeting place and discussed how he would smuggle the contraband into the prison.
Smith testified that he was not surprised that marijuana was included with the tobacco.
{¶39} We conclude that there was sufficient competent and credible evidence
presented to the jury to convince the jury beyond a reasonable doubt that the state had
proven each element of each of the offenses.
{¶40} Whether Smith had arranged to pick up an ounce of tobacco or an ounce
of marijuana was for the jury to decide. Ultimately, “the reviewing court must determine
whether the appellant or the appellee provided the more believable evidence, but must
not completely substitute its judgment for that of the original trier of fact ‘unless it is
patently apparent that the fact finder lost its way.’” State v. Pallai, 7th Dist. No. 07 MA
198, 2008-Ohio-6635, ¶31, quoting State v. Woullard, 158 Ohio App.3d 31, 2004–Ohio–
3395, 813 N.E.2d 964, ¶ 81. In other words, “[w]hen there exist two fairly reasonable
Richland County, Case No. 2011-CA-0110 17
views of the evidence or two conflicting versions of events, neither of which is
unbelievable, it is not our province to choose which one we believe.” State v. Dyke, 7th
Dist. No. 99 CA 149, 2002–Ohio–1152, at ¶ 13, citing State v. Gore (1999), 131 Ohio
App.3d 197, 201, 722 N.E.2d 125. The weight to be given to the evidence and the
credibility of the witnesses are issues for the trier of fact. State v. DeHass, 10 Ohio
St.2d 230, 227 N.E.2d 212(1967), paragraph one of the syllabus; State v. Hunter, 131
Ohio St.3d 67, 2011-Ohio-6524, 960 N.E.2d 955, ¶118. Accord, Glasser v. United
States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942); Marshall v. Lonberger, 459
U.S. 422, 434, 103 S.Ct. 843, 74 L.Ed.2d 646 (1983).
{¶41} The jury was free to accept or reject any and all of the evidence offered by
the parties and assess the witness’s credibility. "While the jury may take note of the
inconsistencies and resolve or discount them accordingly * * * such inconsistencies do
not render defendant's conviction against the manifest weight or sufficiency of the
evidence". State v. Craig, 10th Dist. No. 99AP-739, 1999 WL 29752 (Mar 23, 2000)
citing State v. Nivens, 10th Dist. No. 95APA09-1236, 1996 WL 284714 (May 28, 1996).
Indeed, the [judge] need not believe all of a witness' testimony, but may accept only
portions of it as true. State v. Raver, Franklin App. No. 02AP-604, 2003- Ohio-958, ¶ 21,
citing State v. Antill, 176 Ohio St. 61, 67, 197 N.E.2d 548 (1964); State v. Burke, 10th
Dist. No. 02AP-1238, 2003-Ohio-2889, citing State v. Caldwell (1992), 79 Ohio App.3d
667, 607 N.E.2d 1096 (4th Dist. 1992). Although the evidence may have been
circumstantial, we note that circumstantial evidence has the same probative value as
direct evidence. State v. Jenks, supra.
“[I]n determining whether the judgment below is manifestly against the
Richland County, Case No. 2011-CA-0110 18
weight of the evidence, every reasonable intendment and every
reasonable presumption must be made in favor of the judgment and the
finding of facts. * * *
“If the evidence is susceptible of more than one construction, the
reviewing court is bound to give it that interpretation which is consistent
with the verdict and judgment, most favorable to sustaining the verdict and
judgment.”
Seasons Coal Co., Inc. v. Cleveland, 10 Ohio St.3d 77, 80, 461 N.E.2d 1273 (1984), fn.
3, quoting 5 Ohio Jurisprudence 3d, Appellate Review, Section 60, at 191–192 (1978).
{¶42} In Cross v. Ledford, 161 Ohio St. 469, 477, 120 N.E. 2d 118 (1954), the
Supreme Court further cautioned,
The mere number of witnesses, who may support a claim of one or the
other of the parties to an action, is not to be taken as a basis for resolving
disputed facts. The degree of proof required is determined by the
impression which the testimony of the witnesses makes upon the trier of
facts, and the character of the testimony itself. Credibility, intelligence,
freedom from bias or prejudice, opportunity to be informed, the disposition
to tell the truth or otherwise, and the probability or improbability of the
statements made, are all tests of testimonial value. Where the evidence is
in conflict, the trier of facts may determine what should be accepted as the
truth and what should be rejected as false. See Rice v. City of Cleveland,
114 Ohio St. 299, 58 N.E.2d 768.
161 Ohio St. at 477-478. (Emphasis added).
Richland County, Case No. 2011-CA-0110 19
{¶43} Although Smith cross-examined the witnesses and argued that he had no
knowledge that marijuana was inside the bag, and further that there was a lack of
evidence that Smith intended to smuggle the marijuana into the prison the weight to be
given to the evidence and the credibility of the witnesses are issues for the trier of fact.
State v. Jamison, 49 Ohio St.3d 182, 552 N.E.2d 180(1990).
{¶44} We find that this is not an “‘exceptional case in which the evidence weighs
heavily against the conviction.’” Thompkins, 78 Ohio St.3d at 387, 678 N.E.2d
541, quoting Martin, 20 Ohio App.3d at 175, 485 N.E.2d 717. The jury was in the best
position to evaluate this competent, credible evidence, and we will not substitute our
judgment for that of the trier of fact. The jury neither lost their way nor created a
miscarriage of justice in convicting Smith of the charges.
{¶45} Smith’s first, second third and fourth assignments of error are overruled in
their entirety.
V.
{¶46} In his fifth assignment of error, Smith argues that the trial court erred in
instructing the jury that a corrections officer is a public servant for purposes of the
bribery statute.
{¶47} Crim.R. 30(A) governs instructions and states as follows:
At the close of the evidence or at such earlier time during the trial
as the court reasonably directs, any party may file written requests that the
court instruct the jury on the law as set forth in the requests. Copies shall
be furnished to all other parties at the time of making the requests. The
court shall inform counsel of its proposed action on the requests prior to
Richland County, Case No. 2011-CA-0110 20
counsel's arguments to the jury and shall give the jury complete
instructions after the arguments are completed. The court also may give
some or all of its instructions to the jury prior to counsel's arguments. The
court need not reduce its instructions to writing.
On appeal, a party may not assign as error the giving or the failure
to give any instructions unless the party objects before the jury retires to
consider its verdict, stating specifically the matter objected to and the
grounds of the objection. Opportunity shall be given to make the objection
out of the hearing of the jury.
{¶48} In Neder v. United States, 527 U.S. 1, 119 S.Ct. 1827, 144 L.Ed.2d
35(1999), the United State Supreme Court held that because the failure to properly
instruct the jury is not in most instances structural error, the harmless-error rule of
Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 applies to a failure to
properly instruct the jury, for it does not necessarily render a trial fundamentally unfair or
an unreliable vehicle for determining guilt or innocence. Accordingly, an erroneous jury
instruction that omits an element of the offense is subject to harmless-error analysis. Id.
at 15, 119 S.Ct. at 1837.
{¶49} In the case at bar, Smith did not object to instruction that he now contends
should not have been given by the trial court. Accordingly, our review of the alleged
error must proceed under the plain error rule of Crim. R. 52(B).
{¶50} Crim.R. 52(B) provides that, “[p]lain errors or defects affecting substantial
rights may be noticed although they were not brought to the attention of the court.”
“Notice of plain error under Crim.R. 52(B) is to be taken with the utmost caution, under
Richland County, Case No. 2011-CA-0110 21
exceptional circumstances and only to prevent a manifest miscarriage of justice.” State
v. Long, 53 Ohio St.2d 91, 372 N.E.2d 804(1978) paragraph three of the syllabus. In
order to find plain error under Crim.R. 52(B), it must be determined, but for the error, the
outcome of the trial clearly would have been otherwise. Id. at paragraph two of the
syllabus.
{¶51} Smith was convicted of Bribery. R.C. 2921.02(B) provides, in part,
No person, either before or after he is elected, appointed, qualified,
employed, summoned, or sworn as a public servant or party official, shall
knowingly solicit or accept for himself or another person any valuable thing
or valuable benefit to corrupt or improperly influence him or another public
servant or party official with respect to the discharge of his or the other
public servant's or party official's duty.
{¶52} R.C. 2921.01(B) defines “public servant” as,
(B) “Public servant” means any of the following:
(1) Any public official;
(2) Any person performing ad hoc a governmental function,
including, but not limited to, a juror, member of a temporary commission,
master, arbitrator, advisor, or consultant;
(3) A person who is a candidate for public office, whether or not the
person is elected or appointed to the office for which the person is a
candidate. A person is a candidate for purposes of this division if the
person has been nominated according to law for election or appointment
to public office, or if the person has filed a petition or petitions as required
Richland County, Case No. 2011-CA-0110 22
by law to have the person's name placed on the ballot in a primary,
general, or special election, or if the person campaigns as a write-in
candidate in any primary, general, or special election.
“Public servant” does not include an employee, officer, or governor-
appointed member of the board of directors of the nonprofit corporation
formed under section 187.01 of the Revised Code.
{¶53} A “public official” is defined as,
(A) “Public official” means any elected or appointed officer, or
employee, or agent of the state or any political subdivision, whether in a
temporary or permanent capacity, and includes, but is not limited to,
legislators, judges, and law enforcement officers. “Public official” does not
include an employee, officer, or governor-appointed member of the board
of directors of the nonprofit corporation formed under section 187.01 of the
Revised Code.
R.C. 2921.01(A).
{¶54} In State v. Lozano, 90 Ohio St.3d 560, 2001-Ohio-224, 740 N.E.2d 273,
the appellant, a city employee accused of theft in office, argued that the definition of
“public official” under R.C. 2921.01 was ambiguous. Specifically,
He contends that if the General Assembly had intended the term
“public official” to include all public employees, it could have simply
defined the term as “any employee of the state or any political
subdivision.” By providing examples of public employees who are included
in the class “public official,” i.e., legislators, judges, and law enforcement
Richland County, Case No. 2011-CA-0110 23
officers, defendant maintains, the General Assembly intended the statute
to apply only to public employees who share the same characteristics as
legislators, judges, and law enforcement.
Id. at 562, 740 N.E.2d 273. The Ohio Supreme Court disagreed and concluded that the
term “public official,” as defined in R.C. 2921.01(A) is free from ambiguity and clearly
includes a city employee.
{¶55} In the case at bar, appellant admitted he was a state employee who was
employed as a corrections officer at RiCI. (2T. at 310-311). The term “public official,” as
defined in R.C. 2921.01(A) is free from ambiguity and clearly includes a state employee.
{¶56} Accordingly, we find no plain error affecting Smith's substantial rights.
{¶57} Smith’s fifth assignment of error is overruled.
VI.
{¶58} In his sixth assignment of error, Smith contends that the jury instruction
defining “attempt” to the jury was erroneous and prejudicial because it included an
omission, which is contrary to aiding and abetting which requires an overt act. Further,
Smith appears to argue that there should have been an instruction on "abandonment"
as a defense to the attempt.
{¶59} In Neder v. United States, 527 U.S. 1, 119 S.Ct. 1827, 144 L.Ed.2d
35(1999), the United State Supreme Court held that because the failure to properly
instruct the jury is not in most instances structural error, the harmless-error rule of
Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 applies to a failure to
properly instruct the jury, for it does not necessarily render a trial fundamentally unfair or
an unreliable vehicle for determining guilt or innocence. Accordingly, an erroneous jury
Richland County, Case No. 2011-CA-0110 24
instruction that omits an element of the offense is subject to harmless-error analysis. Id.
at 15, 119 S.Ct. at 1837.
{¶60} In the case at bar, Smith did not object to the instruction on “attempt” and
did not request an instruction on “abandonment.” Accordingly, our review of the alleged
error must proceed under the plain error rule of Crim. R. 52(B).
{¶61} The trial court instructed the jury as follows,
The defendant is charged first with aiding or abetting an illegal
conveyance of a drug of abuse into a detention a facility. Before you can
find him guilty of aiding or abetting an illegal conveyance, you must find
beyond a reasonable doubt that, on or about May 27, 2011, here in
Richland County, he aided or abetted another in knowingly conveying or
attempting to convey a drug of abuse onto the grounds of a detention
facility.
To "aid" or "abet" means to support, assist, encourage, cooperate
with, advise or incite. If you find beyond a reasonable doubt that Mr. Smith
knowingly helped, supported, assisted, encouraged, cooperated with,
advised or incited another in the commission of an illegal conveyance, he
is to be regarded as if he were the principal offender and is just as guilty
as if he personally performed every act constituting the offense. When two
or more persons have a common purpose to commit a crime and one
does one part and a second performs another, those acting together are
equally guilty of the crime. However, the mere association with one who
Richland County, Case No. 2011-CA-0110 25
does an unlawful act does not make a person a participant in the crime so
long as his acts are innocent.
To knowingly convey or attempt to convey a drug of abuse is an
element of this crime. A person acts knowingly regardless of his purpose
when he is aware his conduct will probably cause a certain result. A
person, therefore, knowingly conveys or attempts to convey a drug of
abuse onto a detention facility when he is aware that his conduct will
probably cause a conveyance or attempt to convey a drug of abuse onto a
detention facility.
An "attempt to convey" is when one intentionally does or fails to do
anything which is an act or omission constituting a substantial step in a
course of conduct planned to culminate in the conveyance of a drug of
abuse into a detention facility.
2T. at 350-351.
{¶62} R.C. 2923.03 Complicity provides, in relevant part,
(A) No person, acting with the kind of culpability required for the
commission of an offense, shall do any of the following:
(1) Solicit or procure another to commit the offense;
(2) Aid or abet another in committing the offense;
(3) Conspire with another to commit the offense in violation of
section 2923.01 of the Revised Code;
(4) Cause an innocent or irresponsible person to commit the
offense.
Richland County, Case No. 2011-CA-0110 26
(B) It is no defense to a charge under this section that no person
with whom the accused was in complicity has been convicted as a
principal offender.
(C) No person shall be convicted of complicity under this section
unless an offense is actually committed, but a person may be convicted of
complicity in an attempt to commit an offense in violation of section
2923.02 of the Revised Code.
(Emphasis added).
{¶63} The Legislative Service Commission notes to R.C.2923.03 provide,
It is unnecessary that the principal offender be convicted before an
accomplice can be convicted. An offense must actually be committed,
however, before a person may be convicted as an accomplice. The single
exception to this rule permits conviction as an accomplice in an attempt to
commit an offense.
(Emphasis added). Thus, the jury was properly charged that Smith could be found guilty
of complicity in an attempt to convey the drugs into the prison.
{¶64} Further, the record establishes that Smith was not being charged with an
attempt through an omission to act. On the contrary, the state presented specific
evidence of Smith’s actions in attempting to convey the marijuana into the prison. There
was evidence adduced at trial that Smith aided and abetted inmate Marvin Crayton in
illegally conveying drugs into the prison and in trafficking marijuana. It was inmate
Crayton that was Smith’s contact person. There was no evidence presented at trial that
inmate Crayton was working for police or was aware that an undercover operation was
Richland County, Case No. 2011-CA-0110 27
going in progress. Smith made a deal with Crayton to bring in the substances in
exchange for $600.00. (2T. at 330). Thus, there was evidence that Smith aided and
abetted inmate Crayton both in conveying the drugs into the prison and in trafficking in
the drugs.
{¶65} Accordingly, we find no plain error affecting Smith's substantial rights.
{¶66} Smith’s sixth assignment of error is overruled in its entirety.
VII.
{¶67} Smith’s final argument is that he was denied the effective assistance of
counsel because counsel failed to object to the jury instructions regarding "public
servant" and "attempt" and because trial counsel failed to make a Rule 29 motion for
acquittal at the close of the State's case.
{¶68} A claim of ineffective assistance of counsel requires a two-prong analysis.
The first inquiry is whether counsel's performance fell below an objective standard of
reasonable representation involving a substantial violation of any of defense counsel's
essential duties to appellant. The second prong is whether the appellant was prejudiced
by counsel's ineffectiveness. Strickland v. Washington, 466 U.S. 668, 104 S.Ct.
2052(1984); State v. Bradley, 42 Ohio St.3d 136, 538 N.E.2d 373(1989).
{¶69} In order to warrant a finding that trial counsel was ineffective, the petitioner
must meet both the deficient performance and prejudice prongs of Strickland and
Bradley. Knowles v. Mirzayance, 556 U.S. 111, 129 S.Ct. 1411, 1419, 173 L.Ed.2d
251(2009).
{¶70} To show deficient performance, appellant must establish that “counsel’s
representation fell below an objective standard of reasonableness.” Strickland 466 U.S.
Richland County, Case No. 2011-CA-0110 28
at 688, 104 S.Ct. at 2064. This requires showing that counsel made errors so serious
that counsel was not functioning as the “counsel” guaranteed the defendant by the Sixth
Amendment. Strickland, 466 U.S. at 687, 104 S.Ct. at 2064. Counsel also has a duty to
bring to bear such skill and knowledge as will render the trial a reliable adversarial
testing process. Strickland, 466 U.S. at 688, 104 S.Ct. 2052 at 2065.
{¶71} Thus, a court deciding an actual ineffectiveness claim must judge the
reasonableness of counsel's challenged conduct on the facts of the particular case,
viewed as of the time of counsel's conduct. A convicted defendant making a claim of
ineffective assistance must identify the acts or omissions of counsel that are alleged not
to have been the result of reasonable professional judgment. The court must then
determine whether, in light of all the circumstances, the identified acts or omissions
were outside the wide range of professionally competent assistance. In making that
determination, the court should keep in mind that counsel's function, as elaborated in
prevailing professional norms, is to make the adversarial testing process work in the
particular case. At the same time, the court should recognize that counsel is strongly
presumed to have rendered adequate assistance and made all significant decisions in
the exercise of reasonable professional judgment. Strickland 466 U.S. 668 at 689,104
S.Ct. at 2064.
{¶72} In light of “the variety of circumstances faced by defense counsel [and] the
range of legitimate decisions regarding how best to represent a criminal defendant,” the
performance inquiry necessarily turns on “whether counsel’s assistance was reasonable
considering all the circumstances.” Strickland, 466 U.S. 668 at 689,104 S.Ct. at 2064.
Richland County, Case No. 2011-CA-0110 29
At all points, “[j]udicial scrutiny of counsel’s performance must be highly deferential.”
Strickland, 466 U.S. 668 at 689,104 S.Ct. at 2064.
{¶73} An appellant must further demonstrate that he suffered prejudice from his
counsel’s performance. See Strickland, 466 U. S. at 691 (“An error by counsel, even if
professionally unreasonable, does not warrant setting aside the judgment of a criminal
proceeding if the error had no effect on the judgment”). To establish prejudice, “[t]he
defendant must show that there is a reasonable probability that, but for counsel’s
unprofessional errors, the result of the proceeding would have been different. A
reasonable probability is a probability sufficient to undermine confidence in the
outcome.” Strickland, 466 U.S. at 694. To prevail on his ineffective-assistance claim,
appellant must show, therefore, that there is a “reasonable probability” that the Trier of
fact would not have found him guilty.
{¶74} The failure to make a Rule 29 motion for acquittal does not prevent an
argument regarding the sufficiency of the evidence on appeal. A defendant preserves
his right to object to any alleged insufficiency of the evidence when he enters his "not
guilty" plea. State v. Jones (2001), 91 Ohio St.3d 335, 346, 2001-Ohio-57, 744 N.E.2d
1163. See also, Eastley v. Volkman, ___Ohio St.3d ___, 2012-Ohio-2179, 2012 WL
1889147(May 22, 2012) (“When the evidence to be considered is in the court's record,
a party need not have moved for directed verdict or filed a motion for a new trial or a
motion for judgment notwithstanding the verdict to obtain appellate review of the weight
of the evidence”).
{¶75} None of the instances raised by Smith rise to the level of prejudicial error
necessary to find that he was deprived of a fair trial. Having reviewed the record that
Richland County, Case No. 2011-CA-0110 30
Smith cites in support of his claim that he was denied effective assistance of counsel,
we find Smith was not prejudiced by defense counsel’s representation of him. The result
of the trial was not unreliable nor were the proceedings fundamentally unfair because of
the performance of defense counsel.
{¶76} Because we have found no instances of error in this case, we find Smith
has not demonstrated that he was prejudiced by trial counsel’s performance.
{¶77} Smith’s seventh assignment of error is overruled.
Conclusion
{¶78} Smith’s first, second, third, fourth, fifth, sixth and seventh assignments of
error are overruled in their entirety and the judgment of the Court of Common Pleas,
Richland County, Ohio, is affirmed.
By Gwin, P.J.,
Farmer, J., and
Edwards, J., concur
_________________________________
HON. W. SCOTT GWIN
_________________________________
HON. SHEILA G. FARMER
_________________________________
HON. JULIE A. EDWARDS
WSG:clw 0611
[Cite as State v. Smith, 2012-Ohio-2956.]
IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
STATE OF OHIO :
:
Plaintiff-Appellee :
:
:
-vs- : JUDGMENT ENTRY
:
STEVE A. SMITH :
:
:
Defendant-Appellant : CASE NO. 2011-CA-0110
For the reasons stated in our accompanying Memorandum-Opinion, the judgment of
the Court of Common Pleas, Richland County, Ohio, is affirmed. Costs to appellant.
_________________________________
HON. W. SCOTT GWIN
_________________________________
HON. SHEILA G. FARMER
_________________________________
HON. JULIE A. EDWARDS
| {
"pile_set_name": "FreeLaw"
} |
Opinion issued February 3, 2005
In The
Court of Appeals
For The
First District of Texas
NO. 01-03-00628-CR
LANCE GERARD BIAGAS, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 176th District Court
Harris County, Texas
Trial Court Cause No. 913949
O P I N I O N
A jury found Lance Gerard Biagas guilty of the felony offense of theft of
property, aggregated at a total value of over $1,500.00 and under $20,000.00, as
charged in the indictment. The trial court assessed punishment at two years’
confinement, suspended the sentence and placed Biagas on community supervision,
and fined him $500.00. In this appeal, Biagas contends: (1) the evidence is legally
insufficient to support the jury’s verdict; (2) the trial court erred in refusing to permit
him to replace a biased juror; (3) he received ineffective assistance of counsel; (4) the
trial court erred in admitting the trial prosecutor’s affidavit at a hearing on a motion
for new trial; (5) the trial court erred in excluding certain testimony essential to his
defense; and (6) the trial court erred in overruling his motion for a mistrial after the
prosecutor’s improper jury argument. Facts
Angela Holden, Biagas’s mother, formerly served as Chief Clerk in the office
of Harris County Precinct 7 Constable Perry Wooten. During her employment, Harris
County contracted with A-Temps Corporation to provide temporary workers to staff
various Harris County departments, including the constable’s office. Holden, as a
supervisor in the constable’s office, approved the temporary employees’ time sheets
on behalf of Harris County. Based on the workers’ representations on the time sheets,
and a Harris County supervisor’s signature, the county remitted funds to A-Temps to
pay the temporary workers upon receipt of an invoice. Harris County also paid A-Temps a commission of 15–18% of the total funds paid.
Holden assigned several of her relatives, including her son Biagas, to work at
the constable’s office as employees of A-Temps. The relatives, including Biagas,
submitted falsified time sheets for hours they never worked, which Holden approved
as a Harris County supervisor. She then submitted the time sheets to A-Temps. A-Temps forwarded an invoice together with the false time sheets to the Harris County
accounts payable department. Harris County remitted funds to A-Temps for the time
reflected on the time sheets, and a commission, as directed by the Harris County
auditor’s office. Biagas received A-Temps checks payable to him in the amount of
$8,662.68 for time he had never worked. Biagas either cashed and spent the checks
or he deposited them in Holden’s account at the Harris County Federal Credit Union. Legal Sufficiency of the Evidence
In determining the legal sufficiency of the evidence, we review the evidence
in a light most favorable to the verdict to determine whether any rational fact finder
could have found the essential elements of the criminal offense beyond a reasonable
doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789 (1979);
Escamilla v. State, 143 S.W.3d 814, 817 (Tex. Crim. App. 2004). Although our
analysis considers all evidence presented at trial, we may not re-weigh the evidence
or substitute our judgment for that of the fact finder. King v. State, 29 S.W. 3d 556,
562 (Tex. Crim. App. 2000).
Biagas contends that the evidence is legally insufficient to support the jury’s
verdict because the State failed to prove an essential element of felony
theft—ownership. To prove felony theft, the State must prove that a person
unlawfully appropriated property with intent to deprive the owner of the property.
Tex. Pen. Code Ann. § 31.03(a) (Vernon 2003). Here, the indictment alleged that
Steve Garner, in his capacity as chief assistant auditor for Harris County, was the
owner of the funds. Biagas asserts that Garner and Harris County were not the
“owners” of the money at the time he misappropriated it, and that the county did not
have any right, title, or interest in the funds he received from A-Temps.
The State responds that Steve Garner and the county possessed the funds at the
time Biagas misappropriated them. The State concedes that although A-Temps “may
have been in possession of the funds after they were appropriated, the corporation had
no right to possession of the funds whatsoever because of appellant’s fraud and
therefore did not have and could not have a greater right to possession of same than
Harris County.”
The Texas Penal Code defines an owner as a person who “has title to the
property, possession of the property, whether lawful or not, or a greater right to
possession of the property than the actor.” Tex. Pen. Code Ann. § 1.07(a)(35)(A)
(Vernon 2003). Section 1.07(a)(39) defines possession as “actual care, custody,
control, or management.” Tex. Pen. Code Ann. § 1.07(a)(39) (Vernon 2003). Here,
it is undisputed that A-Temps was an independent contractor hired by Harris County
to provide temporary employees to the constable’s office. A-Temps employed
Biagas, who falsified the time sheets for work he did not perform at the constable’s
office. Based upon the verified (but false) time sheets, A-Temps paid Biagas, and
submitted invoices, with the time sheets for supporting documentation, to Harris
County for reimbursement. At trial, Garner conceded that the county did not have
authority or control over A-Temps funds. Harris County personnel, however,
supervised Biagas and approved his payment claims based on time sheets Biagas
falsified and submitted to the county. By falsifying the time records, Biagas caused
the county to release its money to a conduit corporation from which he ultimately
took possession of the funds. Thus, Harris County released funds in its possession
based upon Biagas’s misrepresentation.
Biagas relies on Bailey v. State, 87 S.W.3d 122 (Tex. Crim. App. 2002), for his
contention that Harris County is not an owner of the funds. In Bailey, the City of
Houston entered into a contract with C & C Services to provide flagmen. Id. at 125.
The flagmen allegedly submitted false time sheets to the City of Houston. Id. C &
C Services paid the defendants based on their daily time sheets. Id. The City of
Houston later reimbursed C & C Services. Id. The trial court granted the defendants’
motions for directed verdicts because the State had alleged the City as the owner of
the funds, as opposed to the owner of C & C Services. Id. The issue on appeal in
Bailey, however, was whether the State could re-indict the defendants on behalf of
another owner. Id. The facts in Bailey are distinguishable from this case. In Bailey,
an attorney for the City testified during the bench trial that she was not aware of any
conditions in the contracts that would require the city to monitor checks written by
the independent contractor to the workers and the opinion does not indicate that the
defendants ever misrepresented their work directly to the City. Id. Here, the record
shows that Harris County required Biagas and a Harris County supervisor to verify
his work before it would release funds to A-Temps. Thus, Harris County actually
approved the time sheets before A-Temps received payment and issued a check to
Biagas. Such evidence shows that Harris County maintained control over the funds,
and absent Biagas’s misrepresentations, would not have released the funds.
Biagas also relies on United States v. Howard, 787 F.Supp. 769, 771 (S.D.
Ohio, 1992) for the proposition that Garner was not the proper owner of the stolen
funds. The Howard court observed that if “the government no longer has supervision
or control over funds or the ultimate use of the funds, and no longer has any
pecuniary interest in the funds, it would grossly distort the English language to call
those funds money . . . of the United States.” Id. In Howard, the court held that the
evidence was insufficient to prove that the federal government was the owner of
social security benefits that had been properly deposited into a personal banking
account. Id. The court noted that the deposits were made correctly, because the
recipient was entitled to the monthly payments and had not defrauded the
government. Rather, the defendant had defrauded the social security recipient. Id.
In this case, however, Biagas wrongfully submitted false time sheets to both A-Temps
and Harris County, causing Harris County to release the funds.
Biagas correctly observes in his brief that in Freeman v. State, 707 S.W.2d 597,
603 (Tex. Crim. App. 1986), the Court of Criminal Appeals stated that “the key to
answering the question of which person has the greater right to possession of the
property is who, at the time of commission of the offense, had the greater right to
possession of the property.” The record here shows that Biagas committed the
offense when he forged time sheets and sought and obtained Harris County approval
for compensation to him. See Salazar v. State, 711 S.W.2d 720, 723 (Tex.
App.—Corpus Christ 1986, pet. ref’d) (holding fact that defendant’s conduct caused
owner to part with merchandise was sufficient to show that defendant “exercised
control” over same irrespective of fact that nothing showed defendant actually
received merchandise); see also Freeman, 707 S.W. 2d at 605 (stating that implicit
in meaning of word “appropriation,” when it comes to competing and equal
possessory interests in property, is that accused must have exercised “unauthorized”
control over property).
Harris County retained control and supervision over the funds absent Biagas’s
false time sheets, which he submitted to Harris County for approval, and thus we hold
that the evidence is legally sufficient to support the jury’s finding that Harris County,
and Garner as its representative, was an owner of the funds for the purposes alleged
in the indictment. We therefore overrule Biagas’s first issue. Replacing a Biased Juror
In his second issue, Biagas contends that the trial court erred in refusing to
permit him to replace a biased juror because his counsel believed that he had made
an agreement with the prosecutor to excuse the juror. During the voir dire
examination, Biagas’s counsel asked Juror #38, a Harris County Sheriff’s Deputy,
whether he believed that all law enforcement officers tell the truth at all times. The
juror answered affirmatively.
Biagas’s trial counsel never challenged Juror #38 for cause, either during or
after the voir dire examination. Subsequently, both lawyers for the State and Biagas
announced their agreed strikes to the judge on the record. Their discussion did not
include Juror #38. After the clerk empaneled the jury, Biagas’s attorney objected to
the jury as empaneled because it included Juror #38, and moved for a mistrial. He
stated that he believed that Juror #38 had been stricken for cause. The trial judge
denied the motion.
Biagas contends that the trial court’s refusal to remove a biased juror is an error
of constitutional dimension that warrants the reversal of his conviction. In his brief,
Biagas cites to Hughes v. United States, 258 F.3d 453, 463 (6th Cir. 2001) for the
contention that the “impaneling of a biased juror warrants a new trial.” The State, on
the other hand, maintains that the trial court did not abuse its discretion in denying
Biagas’s request for a mistrial, because a mistrial was not warranted, and Biagas’s
counsel asked for no other relief—not to grant the challenge, or to reseat a different
juror. He also did not request an additional peremptory strike.
We review the trial court’s ruling under an abuse of discretion standard. Ladd
v. State, 3 S.W.3d 547, 567 (Tex. Crim. App. 1999). We agree that the trial court did
not abuse its discretion in denying Biagas’s motion for a mistrial. The record
demonstrates that the jury had not been sworn, the panel from which the jury was
selected was present, and the trial could have acted within its discretion in
considering or granting a challenge for cause, or its equivalent, had such lesser relief
been requested. See Bauder v. State, 921 S.W.2d 696, 698 (Tex. Crim. App. 1996)
(observing that mistrials are extreme remedy and should not be granted if less drastic
relief is available).
As Biagas acknowledges in his brief, it is the responsibility of the parties to
assure that the empaneled jury does not include a struck juror. Truong v. State, 782
S.W.2d 904, 905 (Tex. App.—Houston 14th Dist.] 1989, pet. ref’d). Biagas relies on
both Truong and Pogue v. State, 553 S.W.2d 368, 370-71 (Tex. Crim. App. 1977), in
support of his position that the trial court should have replaced Juror #38. In Pogue,
however, the Texas Court of Criminal Appeals held that the trial court erred in not
allowing the defendant to use a peremptory challenge on a prospective juror before
the jury was sworn. 553 S.W.2d at 370-71; see also Truong, 782 S.W.2d at 905
(concluding trial court erred in denying defendant peremptory challenges allotted to
him by statute). Here, however, trial counsel moved for a mistrial, and did not seek
additional peremptory challenges to remove Juror #38.
Biagas further contends that Juror #38s responses indicate he was subject to
a challenge for cause pursuant to article 35.16(c)(2), because he has a bias or
prejudice. See Tex. Code Crim. Proc. Ann. art. 35.16(c)(2) (Vernon 1989 & Supp.
2004-2005). He relies on Brown v. State, 925 S.W.2d 1, 5-6 (Tex. App.—Tyler
1994), rev’d, 913 S.W.2d 577, 580 (Tex. Crim. App. 1996), in which the court held
that the trial court erred in refusing to grant a challenge for cause to a juror who was
unable to follow court’s instructions regarding the defendant’s failure to testify.
However, the Texas Court of Criminal Appeals reversed the judgment and held that
appellate courts were bound to defer to a trial court’s ruling in refusing to grant a
challenge for cause of a venireperson who vacillated between stating that she would
be able to follow the law and stating that she did not know for sure whether she could
follow the law. 913 S.W.2d 577, 580 (Tex. Crim. App. 1996). If a prospective juror
states unequivocally that he would always believe a police officer in every case over
an ordinary citizen, then that could be bias as a matter of law. See Hernandez v.
State, 563 S.W.2d 947, 950 (Tex. Crim. App. 1978). Here, however, the failure of
defense counsel to raise a challenge for cause deprived the trial court of the ability to
assess whether Juror #38 was unequivocally biased. See, e.g., Smith v. State, 907
S.W.2d 522, 531 (Tex. Crim. App. 1995) (holding juror not disqualified as matter of
law, despite his statement that he might believe law enforcement officers over others
because he also stated he would listen to both sides and make his decision based on
facts and circumstances presented). We therefore hold that the trial court did not
abuse its discretion in denying the motion for mistrial and overrule Biagas’s second
issue. Ineffective Assistance of Counsel
In his third issue, Biagas contends that his trial attorney failed to render
effective assistance of counsel. Biagas contends that his trial counsel was ineffective
because he failed to take steps to ensure that Juror #38 did not sit on the jury. To
prevail on a claim of ineffective assistance of counsel, the defendant must show (1)
his counsel’s performance was deficient; and (2) a reasonable probability exists that
the result of the proceeding would have been different. Strickland v. Washington,
466 U.S. 668, 687, 104 S. Ct. 2052, 2064 (1984).
The first prong of Strickland requires the defendant to show that counsel’s
performance fell below an objective standard of reasonableness. Thompson v. State,
9 S.W.3d 808, 812 (Tex. Crim. App. 1999). Thus, the defendant must prove by a
preponderance of the evidence that his counsel’s representation objectively fell below
professional standards. Mitchell v. State, 68 S.W.3d 640, 642 (Tex. Crim. App.
2002).
The second prong requires the defendant to show a reasonable probability that,
but for counsel’s unprofessional errors, the result of the proceeding would have been
different. See Strickland, 466 U.S. at 694, 104 S. Ct. at 2068; see also Thompson, 9
S.W.3d at 812. The Court of Criminal Appeals has observed that the “purpose of this
two-pronged test is to judge whether counsel’s conduct so compromised the proper
functioning of the adversarial process that the trial cannot be said to have produced
a reliable result.” Mallett v. State, 65 S.W.3d 59, 63 (Tex. Crim. App. 2001); see also
Thompson, 9 S.W.3d at 812-13 (citing McFarland v. State, 845 S.W.2d 824, 843
(Tex. Crim. App. 1992)). A reviewing court must indulge a strong presumption,
however, that counsel’s conduct falls within the wide range of reasonable
professional assistance; that is, the defendant must overcome the presumption that,
under the circumstances, the challenged action might be considered sound trial
strategy.” Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. Any allegation of
ineffectiveness must be firmly founded in the record, and the record affirmatively
must demonstrate the alleged ineffectiveness. Thompson, 9 S.W.3d at 813 (citing
McFarland v. State, 928 S.W.2d 482, 500 (Tex. Crim. App. 1996)). Failure to make
the required showing of either deficient performance or sufficient prejudice defeats
an ineffectiveness claim. Thompson, 9 S.W.3d at 813.
Biagas presented his ineffective assistance claim to the trial court in a motion
for new trial. The trial court overruled Biagas’s complaint by denying his motion for
new trial. We therefore analyze his ineffective assistance of counsel issue as a
challenge to the denial of his motion for new trial. See Charles v. State, 146 S.W.3d
204, 208 (Tex. Crim. App. 2004) (holding appropriate standard of review for
ineffective assistance claim brought forth in motion for new trial is abuse of
discretion); see also Schoenbauer v. State, 85 S.W.3d 400, 402 (Tex. App.—Tyler
2002, no pet.) In such circumstances, we review the Strickland test through an abuse
of discretion standard. Charles, 146 S.W.3d at 208. Thus, we reverse only if the trial
court’s decision is arbitrary or unreasonable, viewing the evidence in the light most
favorable to the ruling. Id.
At the outset, we note that Biagas’s trial counsel submitted an affidavit at the
hearing on Biagas’s motion for a new trial. In it, trial counsel avers that his failure
to challenge Juror #38 for cause was not part of his trial strategy, but instead was an
oversight on his part. Biagas thus has rebutted the presumption that his trial
counsel’s inaction was a reasonable trial strategy.
Biagas contends that the affidavit by his trial counsel cannot be contradicted
by the State and thus the trial court had no option but to grant his motion for new
trial. In Charles, the Texas Court of Criminal Appeals squarely rejected such an
analysis. 146 S.W.3d at 213. The defendant in Charles moved for a new trial based
upon ineffective assistance of counsel grounds. Id. at 207. He offered affidavits that
averred that trial counsel had not conducted any independent investigation into the
voluntariness of the defendant’s confession. The State offered no contrary affidavit,
and thus the defendant contended that the facts were uncontradicted and required a
new trial. Id. at 207-08.
The Court of Criminal Appeals disagreed. The court first noted that ambiguous
and conclusory statements are an inherent problem associated with affidavit
evidence—such evidence does not allow the witness to clear up ambiguities, nor for
an examination into the factual basis of a conclusion. Id. at 209-10. Next, the court
held that a court of appeals should presume that all reasonable implied findings that
could be made against the losing party were, indeed, made by the trial court. Id. at
208, 211. Finally, the Court of Criminal Appeals held that a trial judge need not
believe the statements made in an affidavit—rather, the trial court may believe “all,
some, or none of the affidavit, even though it may be difficult (if not impossible) to
assess an affidavit’s credibility.” Id. at 213.
Applying the analysis in Charles to this case, we hold that the trial court did
not abuse its discretion in denying Biagas’s motion for new trial based upon
ineffective assistance of counsel. In his affidavit, trial counsel states that he “felt that
[Juror #38] was a biased juror subject to my challenge for cause.” He further states
that he “mistakenly believed that Juror #38 was among those jurors whom both sides
had agreed to excuse by agreement and did not object when the trial judge called out
the numbers of those jurors who were either being challenge [sic] for cause or who
were being excused by agreement.” The affidavit concludes: “My failure to ensure
that [Juror #38] did not serve on this jury given his bias by taking action at a time
when the judge could have corrected my oversight was not the result of any reasoned
trial strategy. I simply made a mistake.”
The State offered the trial prosecutor’s affidavit, in which she averred that both
sides agreed to strike six jurors, not including Juror #38. In addition, the record
reflects that the trial court struck four other jurors for cause and denied two
challenges for cause. Defense counsel’s strike list does not reflect either a strike for
cause, nor a peremptory challenge to Juror #38.
As the Court of Criminal Appeals held in Charles:
Statements in affidavits of interested witnesses concerning their own
state of mind are “uncontrovertible” because the “mental workings of an
individual’s mind are matters about which adversaries have no
knowledge or ready means of confirming or controverting.” A trial
judge has discretion to discount factual assertions in an affidavit by an
interested party that do not meet this test. And an appellate court, in its
review, must defer to the trial court’s ruling to the extent that any
reasonable view of the record evidence will support that ruling.
146 S.W.3d at 210 (citations omitted).
Jury selection, in particular, involves strategy. This case involves a theft within
the constable’s office, allegedly organized by a constable’s employee. Juror #38, who
was not challenged, is a peace officer. Defense counsel’s affidavit concludes that his
decision was a mistake, but the trial judge who oversaw voir dire was in a position
to evaluate whether trial counsel’s statement was credible. The trial judge could have
found otherwise, given the agreement as to six other jurors, as well as the fact that
trial counsel did not ask for further examination of the juror, to reseat a different
juror, or for an additional peremptory strike—even after he discovered his error.
Following Charles, we defer to the trial court’s ruling. Biagas fails to demonstrate
that no reasonable view of the record supports the trial court’s ruling, because the trial
court could have concluded that trial counsel’s affidavit was not credible. See id.
Even if trial counsel had been deficient, Biagas has not shown that a different
outcome would have resulted from more effective representation. Biagas claims
automatic harm from the presence of a biased juror on the jury, but we cannot reach
such a conclusion here, where the juror was not sufficiently questioned to determine
whether he absolutely should have been excused for cause, because no challenge was
ever made, and counsel never sought to further examine the juror. We therefore hold
that the trial court did not abuse its discretion in denying a new trial based upon
ineffective assistance of counsel.
Evidentiary Rulings
Prosecutor’s Affidavit
Rule 21.7 allows a trial court to receive evidence by affidavit at a hearing on
a motion for new trial. Tex. R. App. P. 21.7. In his fourth, fifth, and sixth issues,
Biagas maintains that the trial court erred in admitting the trial prosecutor’s affidavit
at the new trial hearing. He contends that the affidavit is inadmissible under Texas
Disciplinary Rule of Professional Conduct 3.08 and Texas Rules of Evidence 401 and
403. Tex. Disciplinary R. Prof’l Conduct 3.08(a), reprinted in Tex. Gov’t Code
Ann., tit. 2, subtit. G app. A (Vernon 1998) (Tex. State Bar R. Art. X, § 9). We review the trial court’s admission or exclusion of evidence under an abuse
of discretion standard. See Guzman v. State, 955 S.W.2d 85, 89 (Tex. Crim. App.
1997); see also Goff v. State, 931 S.W.2d 537, 553 (Tex. Crim. App. 1996). A trial
court has wide discretion in its decision to admit or exclude evidence. Guzman, 955
S.W.2d at 89; Theus v. State, 845 S.W.2d 874, 881 (Tex. Crim. App. 1992). A trial
court’s evidentiary ruling should not be disturbed on appeal unless it is an abuse of
discretion. Goff, 931 S.W.2d at 553; Erdman v. State, 861 S.W.2d 890, 893 (Tex.
Crim. App. 1993). If the trial court’s ruling is within the reasonable zone of
disagreement, then an appellate court should not disturb it. Pierre v. State, 2 S.W.3d
439, 442 (Tex. App.—Houston [1st Dist.] 1999, pet. ref’d) (citing Montgomery v.
State, 810 S.W.2d 372, 391 (Tex. Crim. App. 1990)).
Disciplinary Rule 3.08(a) provides that a lawyer shall not continue employment
as an advocate before a tribunal in an adjudicatory proceeding if the lawyer knows
or believes that the lawyer is or may be a witness necessary to establish an essential
fact on behalf of the lawyers’s client. Tex. Disciplinary R. Prof’l Conduct
3.08(a). The rule provides an exception that allows a lawyer to testify if “the
testimony relates to the nature and value of legal services rendered in the case.” Tex.
Disciplinary R. Prof’l Conduct 3.08(a)(3).
In support of his contention that Rule 3.08 prohibits a prosecutor from
introducing her own affidavit into evidence, Biagas maintains that “the core concern
is the possible confusion for the trier of fact as to whether statements by an advocate-witness should be taken as evidence or argument.” See Gonzalez v. State, 117 S.W.3d
831, 840-41 (Tex. Crim. App. 2003) (holding that disqualification of defendant’s
counsel of choice, based on counsel’s possible dual role as both advocate and witness
with respect to allegations that defendant attempted to bribe State’s key witness, was
warranted).
The State responds that: (1) the prosecutor’s affidavit fell within an exception
to rule 3.08; (2) Biagas’s trial counsel also attached an affidavit to his motion for a
new trial; and (3) even if the affidavit violates rule 3.08(a), Biagas has not
demonstrated that the violation affected his substantial rights or deprived him of a fair
trial. See Tex. Disciplinary R. Prof’l Conduct 3.08(a).
We agree with the State. The exception to Disciplinary Rule 3.08 allows a
lawyer to testify if “the testimony relates to the nature and value of legal services
rendered in the case.” Tex. Disciplinary R. Prof’l Conduct 3.08(a)(3). The
prosecutor presented her affidavit to the judge at a hearing on the defense’s motion
for new trial—a hearing at which the effectiveness of defense counsel was an issue.
Unlike Gonzalez, the prosecutor’s affidavit here was offered for the purpose of
demonstrating that Biagas’s trial counsel was neither deficient nor prejudicial, and
did not relate to an issue in the trial. In such an instance, where the affidavit was not
presented to the jury, little likelihood of confusion exists. The trial judge has
firsthand knowledge of the matter in issue, and thus, is less dependent on the
adversary process to test the credibility of the testimony. See Tex. Disciplinary R.
Prof’l Conduct 3.08 cmt. 6.
Next, Biagas contends that the trial court erred in admitting the prosecutor’s
affidavit over his objection that it is irrelevant under Texas Rules of Evidence 401.
Evidence is relevant under Rule 401 if it “influences consequential facts, i.e., facts
which have something to do with the ultimate determination of guilt or innocence in
a particular case.” Mayes v. State, 816 S.W.2d 79, 84 (Tex. Crim. App. 1991).
Biagas did not expressly direct the trial court to the particular statement within
the affidavit that he asserts was irrelevant on Rule 401 or Rule 403 grounds. Tex. R.
Evid. 401, 403. In the absence of any request to limit the scope of the affidavit, we
will uphold the trial court’s ruling if any of the material in the affidavit is relevant.
Tex. R. Evid. 105(a).
We have reviewed the affidavit, and conclude that, although of limited
relevance, it contains statements that the trial judge could properly consider in
connection with a motion for new trial. For example, it recounts the prosecutor’s
recollection regarding voir dire, and refutes defense counsel’s assertion that an
agreement as to a challenge for cause for Juror #38 existed between the prosecutor
and the defense attorney.
Finally, Biagas contends that the prosecutor’s affidavit is inadmissible under
Texas Rule of Evidence 403. Evidence is unfairly prejudicial if it has a “tendency to
suggest decision on an improper basis, commonly, though not necessarily, an
emotional one.” See Montgomery v. State, 810 S.W.2d 372, 389 (Tex. Crim. App.
1990)(citing Advisory Committee’s Note to Fed. R. Evid. 403). The affidavit
contains speculation that the outcome of this trial would not have been different had
the trial court removed Juror #38, because the jury reached a “swift verdict.” Where
the trial court was the fact finder at the motion for new trial hearing, however, there
is less danger that it would be influenced by improper suggestion. See Tex. R. Evid.
403 (including “misleading the jury” as special ground for exclusion of relevant
evidence). On balance, we conclude that the trial court did not abuse its discretion
in deciding that the probative value of the affidavit was not “substantially
outweighed” by the danger of unfair prejudice. See Tex. R. Evid. 403.
Excluded Hearsay Testimony
In his seventh issue, Biagas contends that the trial court erred in excluding the
testimony of Dan McAnulty, an investigator with the Harris County District
Attorney’s office. During cross-examination of McAnulty, Biagas attempted to elicit
a statement that his mother, Angela Holden, made to McAnulty. The record
demonstrates the following exchange:
DEFENSE COUNSEL: Now, you had several conversations with
Angela Holden, Ms. Holden, during this matter, didn’t you?
MCANULTY: Yes, I did.
DEFENSE COUNSEL: Okay. And she told you that Lance Biagas
didn’t know anything about what was going on, did she?
Biagas contends that Holden’s out-of court statement made to McAnulty is a
statement against her penal interest, which is an exception to the hearsay rule, and
therefore, the trial court should have admitted it. See Tex. R. Evid. 803(24).
Rule 803(24) defines a statement against interest as one which, at the time of
its making, so far tended to subject the declarant to criminal liability, that a
reasonable person in the declarant’s position would not have made the statement
unless believing it to be true. Tex. R. Evid. 803(24). In criminal cases, a statement
tending to expose the declarant to criminal liability is not admissible unless
corroborating circumstances clearly indicate the trustworthiness of the statement. Id.
The rule does not limit the exception to cases in which the defendant is the declarant.
Bingham v. State, 987 S.W.2d 54, 56 (Tex. Crim. App. 1999). In our review of the
admissibility of Holden’s statement, we determine: (1) whether it tended to expose
her to criminal liability; and (2) whether there were any corroborating circumstances
that clearly indicated its trustworthiness. Davis v. State, 872 S.W.2d 743, 747-48
(Tex. Crim. App. 1994).
The State responds that, without more in the record, it is impossible to
determine whether the purported statements of Holden to McAnulty were actually
against her penal interest within the meaning of Rule 803(24). Biagas’s trial counsel
did not make an offer of proof or present a bill of exceptions to the trial court
showing McAnulty’s answer to the question propounded. Furthermore, the State
points out that nothing in the record corroborates Holden’s purported statements.
Texas Rule of Evidence 103(a)(2) requires an offer of proof of the proposed
evidence to the trial court, unless the substance is apparent from the context, if the
ruling of the trial court excludes the evidence. Guidry v. State, 9 S.W.3d 133, 153
(Tex. Crim. App. 1999); Gutierrez v. State, 764 S.W.2d 796, 798 (Tex. Crim. App.
1989); Howard v. State, 962 S.W.2d 119, 122 (Tex. App.—Houston [1st Dist.] 1997,
pet. ref’d). An offer of proof must show that the excluded evidence is relevant and
admissible. See Warner v. State, 969 S.W.2d 1, 2 (Tex. Crim. App. 1998).
We hold that Biagas failed to show the trial court that Holden’s statement was
against her penal interest within the meaning of Rule 803(24). Tex. R. Evid.
803(24). Additionally, no evidence corroborates the trustworthiness of her purported
statements. We conclude that Biagas failed to show that the trial court abused its
discretion in refusing to admit the hearsay evidence.
Excluded Character Evidence
In his eighth issue, Biagas alleges that the trial court erred in refusing to admit
character evidence supporting his reputation for honesty and trustworthiness. During
his defense, Biagas attempted to elicit testimony from his former employer, Charles
Johnson. After the trial court sustained the State’s relevancy objection, Johnson
testified outside the presence of the jury that Biagas was a reliable employee who
handled large sums of money, and had never stolen anything from him. Johnson also
testified that he was of the opinion Biagas was not the kind of person who would
steal, and based on his experience in working with Biagas, he was of the opinion that
Biagas was honest and trustworthy.
Biagas asserts that the testimony of Johnson is admissible under Texas Rule of
Evidence 404(a)(1)(A). We agree that Rule 404(a)(1)(A) allows a criminal defendant
to offer evidence of a pertinent character trait. Tex. R. Evid. 404(a)(1)(A). The
indictment alleges Biagas committed an offense involving moral turpitude, thereby
placing his reputation and character for honesty in issue. See Canto-Deport v. State,
751 S.W.2d 698, 700 (Tex. App.—Houston [1st Dist.] 1988, pet. ref’d) (finding trial
court erred, in trial for fraudulent removal of a writing, in refusing to admit evidence
of defendant’s reputation for honesty and fair dealing).
The record demonstrates, however, that Biagas failed to sort out the admissible
portions of Johnson’s testimony from the inadmissible portions. Here, part of
Johnson’s testimony involved specific instances of conduct, e.g., that Biagas had
never stolen from him at work. Direct testimony regarding specific instances of
conduct is not admissible under Texas Rules of Evidence 404(a)(1)(A) or 405(b),
because a person’s character trait is not an essential element of a theft charge. See
Valdez v. State, 2 S.W.3d 518, 519-20 (Tex. App.—Houston [14th Dist.] 1999, pet.
ref’d) (providing that if evidence of accused’s character or character trait is
admissible, proof may be made through reputation or opinion testimony, but specific
instances of conduct are inadmissible to show inference that accused did or did not
commit offense). If a judge is presented with a proffer of evidence containing both
admissible and inadmissible evidence and the proponent fails to segregate and
specifically offer the admissible evidence, the trial judge may properly exclude all the
evidence. Willover v. State, 70 S.W.3d 841, 847 (Tex. Crim. App. 2002). We
therefore hold that the trial judge did not abuse its discretion in refusing to admit the
evidence.
Improper Jury Argument
In his final issue on appeal, Biagas maintains that “the trial court erred in not
overruling appellant’s objection after the prosecutor improperly referred to
appellant’s failure to testify during final argument in the guilt-innocence stage of
trial.” The record reflects the following exchange:
DEFENSE COUNSEL: . . . [Appellant] didn’t know what was going on.
He didn’t have a clue.
Should he be found guilty of a felony because he was doing what he was
told to do? He didn’t know about this elaborate scheme of overtime
sheets with Harris County.
PROSECUTOR: Your Honor, I’m going to object to the defendant has
not testified of him going into what the defendant knew or did not know
[sic].
DEFENSE COUNSEL: Your Honor, I’m going to object to that as–
PROSECUTOR: It’s outside the record is my objection.
DEFENSE COUNSEL: Your Honor, I object to that as a comment on
the defendant not testifying; and I move for a mistrial.
THE COURT: That will be overruled.
We review the trial court’s ruling on Biagas’s motion for mistrial under an
abuse of discretion standard of review. Wead v. State, 129 S.W.3d 126, 129 (Tex.
Crim. App. 2004); Ladd v. State, 3 S.W.3d 547, 567 (Tex. Crim. App. 1999). We
uphold the trial court’s ruling if that ruling was within the zone of reasonable
disagreement. Wead, 129 S.W.3d at 129; Montgomery v. State, 810 S.W.2d 372, 391
(Tex. Crim. App. 1990). In addition, an appellate court must review the trial court’s
ruling in light of the arguments that were before the court at the time it ruled. See
Tex. R. App. P. 33.1; Wead, 129 S.W.3d at 129; Dragoo v. State, 96 S.W.3d 308, 313
(Tex. Crim. App. 2003).
Biagas correctly states that the prosecutor may not use final argument at either
stage of the trial to comment on a defendant’s failure to testify. See Bustamante v.
State, 48 S.W.3d 761, 764 (Tex. Crim. App. 2001). The law is well settled that a
prosecutor’s comment to the jury on an accused’s failure to testify violates the state
and federal constitutional privileges against self-incrimination. Bird v. State, 527
S.W.2d 891, 893-94 (Tex. Crim. App. 1975). The failure of a defendant to testify
shall not be alluded to or commented on by counsel. See Tex. Code Crim. Proc.
Ann. art. 38.08 (Vernon 1979).
Biagas argues that the prosecutor’s objection “amounted to a direct comment
on Appellant’s failure to testify.” He also cites to several cases for the proposition
that improper prosecutorial remarks warrant reversal. See, e.g., Haddad v. State, 860
S.W.2d 947, 954-55 (Tex. App.—Dallas 1993, pet. ref’d)(holding that defendant was
entitled to mistrial due to prosecutor’s comment on organized crime during voir dire
and continued indirect references to organized crime throughout trial); Godfrey v.
State, 859 S.W.2d 583, 584 (Tex. App.—Houston [14th Dist.] 1993, no pet.) (holding
defendant did not receive fair trial due to prosecutor’s misstatement during voir dire
of the law regarding his right not to testify). The State, on the other hand, responds
that the comment by the prosecutor was not a direct comment on Biagas’s failure to
testify.
Although the prosecutor’s remark was improper, the remark does not
demonstrate any willful or calculated effort on the part of the State to deprive Biagas
of a fair and impartial trial. Biagas moved for a mistrial, as opposed to seeking a
limiting instruction. Any harm from the prosecutor’s remark could have been cured
by a prompt instruction to the jury to disregard the comment. See Moore v. State, 999
S.W.2d 385, 405-06 (Tex. Crim. App. 1999) (holding harm from comment upon
defendant’s failure to testify cured by instruction to disregard). Moreover, the jury
charge instructed the jury not to consider the defendant’s failure to testify, and thus
nothing in the record indicates that the trial judge would not have heeded a proper
request to instruct the jury to disregard the comment. The denial of a mistrial is not
improper if a lesser remedy would have cured any harm and was not requested.
Young v. State, 137 S.W.3d 65, 70-72 (Tex. Crim. App. 2004). We therefore hold
that the trial court did not abuse its discretion in denying Biagas’s motion for a
mistrial.Conclusion
After reviewing the record, we conclude that (1) the evidence is legally
sufficient to support the jury’s verdict; (2) the trial court did not abuse its discretion
in refusing to permit Biagas to replace Juror #38; (3) the trial court did not err in
denying Biagas’s motion for new trial on the ground that he received ineffective
assistance of counsel at trial; (4) the trial court did not err in admitting the trial
prosecutor’s affidavit at a hearing on the motion for new trial; (5) the trial court did
not err in excluding the hearsay testimony of Angela Holden, or the character
evidence of Charles Johnson; and (6) the trial court did not err in overruling Biagas’s
motion for a mistrial after the prosecutor’s comment on Biagas’s failure to testify.
We therefore affirm the judgment of the trial court.
Jane Bland
Justice
Panel consists of Justices Taft, Jennings, and Bland.
Publish. Tex. R. App. P. 47.2(b).
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706 F.2d 174
UNITED STATES of America, Plaintiff-Appellee,v.Jose Joaquin GRAVIER and Mariano Bustamante-Cuadros,Defendants-Appellants.
Nos. 82-3369, 82-3429.
United States Court of Appeals,Sixth Circuit.
Argued March 29, 1983.Decided May 9, 1983.
David J. Graeff (argued), Columbus, Ohio, for defendant-appellant in No. 82-3429.
Henry E. Sheldon, II (argued), Cincinnati, Ohio, for defendants-appellants in No. 82-3369.
Anthony Nyktas (argued), Asst. U.S. Atty., Cincinnati, Ohio, for plaintiff-appellee in both cases.
Before MERRITT, KENNEDY and WELLFORD, Circuit Judges.
PER CURIAM.
1
Appellants were convicted of drug conspiracy and possession of cocaine with intent to distribute charges, and appeal their convictions following a suppression hearing and a jury trial. The suppression hearing dealt with appellant Bustamante's motion to suppress three bags of cocaine found in the hotel room which he was occupying and from which the other appellant, Gravier, had just departed after the bags containing the cocaine had been displayed in his presence to an undercover agent seeking to purchase the substantial quantity of cocaine involved. Both appellants contest the admissibility of taped conversations between the undercover agent, William Modesitt of the Drug Enforcement Administration (DEA), and a third party, one Castaneda, who pled guilty to the related charges made against him as a member of the alleged conspiracy. Appellants contend that their actions in bringing cocaine to Cincinnati involved a different conspiracy from that in which Castaneda may have been involved.
2
Modesitt, posing undercover as a drug dealer from Cincinnati, Ohio, met with Gravier and Castaneda in Miami, Florida, during September of 1981 to discuss purchasing cocaine from them on a regular basis for resale in the Cincinnati area. Modesitt negotiated a purchase price for the cocaine and obtained a sample. Modesitt returned to Cincinnati and stayed in contact with Gravier and Castaneda by telephone.
3
On October 10, 1981, Modesitt spoke with Castaneda by telephone and ordered three kilos of cocaine. Castaneda indicated that he would let him know about the delivery. The next day, Castaneda called Modesitt and told him that Gravier was going to talk to some other people and get back to Castaneda. He indicated that likely he and Gravier would be delivering the cocaine to Cincinnati. Modesitt spoke with Castaneda again on October 12. Castaneda told Modesitt that Gravier would deliver the cocaine the following Wednesday, and that the people who supplied the cocaine would be coming with him. Castaneda then asked Modesitt to reserve two motel rooms in Cincinnati.
4
Still later on October 12, Modesitt received a telephone call from Gravier, who told Modesitt that he and Castaneda had a disagreement and that Castaneda was no longer included in the transaction. He stated, however, that the three kilos of cocaine would be forthcoming and that he had made the necessary arrangements with others about delivery.
5
The next day, Castaneda again called Modesitt, and advised him that Gravier had told him that Gravier's "people" did not want to meet him, that they did not want anyone but Gravier now included. Later that same day, Modesitt received a call from Gravier to the effect that the other party and he would now rent a car to deliver the cocaine to Cincinnati. On October 14, Gravier called Modesitt and told him that he and "another guy" were in Jellico, Tennessee, en route to Cincinnati.
6
Modesitt met Gravier and Bustamante, at a restaurant in Cincinnati in accordance with their arrangements. This was Modesitt's first contact with Bustamante, who spoke little, if any, English. The three men proceeded to the Westin Hotel to consummate the sale of the cocaine.
7
It was late at night when Gravier and Bustamante checked in; Bustamante went to the room first, then Gravier invited Modesitt to come to the room to see the cocaine. Once in the room, Modesitt was shown three opaque, but not transparent, plastic bags taken from a yellow flight container that Bustamante had been carrying. A clear plastic bag containing a white powdery substance was removed from each bag. Bustamante then put the clear plastic bags containing what was indicated to be cocaine back into the other bags, and returned them to the yellow flight container.
8
Gravier told Modesitt that Bustamante wanted Gravier and Modesitt to go to get the money for the cocaine buy. Once the availability of money was ascertained, Modesitt was to return to the room to get Bustamante. All would then meet in the lobby, where the cocaine and money would be exchanged. Gravier and Modesitt went to the bar of the Westin, where Gravier was arrested by DEA agents. Modesitt then left Gravier with other agents and went to the room with five other agents to arrest Bustamante. When Bustamante opened the door for Modesitt, the agents burst into the room with guns drawn and told Bustamante that they were federal officers and he was under arrest. Bustamante ran back into the room in the direction of a table upon which a pistol was lying. Two of the agents caught Bustamante, put him on the bed and handcuffed him. Two other agents checked the bathroom for possible accomplices. Modesitt then walked over to the partially unzipped yellow flight container and looked inside. He discovered that the bags of cocaine were not there, and so advised the other agents present.
9
Agent Stewart, who was standing next to a chest of drawers and within a few feet of Modesitt, then glanced down into the top drawer which was open about an inch, and a half. Inside he saw what he thought were the plastic bags which had been described by Modesitt, who came over to the chest and looked into the partially opened drawer. He recognized therein the same opaque plastic bags he had seen earlier while with Gravier and Bustamante. The agents opened the drawer and seized the three bags containing cocaine. Also seized from the room were an eyeglass case containing cocaine and a handgun, which were in view.
10
Bustamante was unsuccessful in his challenge to the admission into evidence of the cocaine seized without a search warrant as were both appellants in their efforts to suppress the tapes of conversations between Modesitt and Castaneda.
11
We affirm the district court, 532 F.Supp. 876, in its decision not to suppress this evidence of the cocaine and of the telephone calls. The district court found that the discovery of the cocaine by Agent Stewart fell within the scope of the plain view exception to the warrant requirement, noting that the DEA agents were lawfully in the hotel room effecting a valid arrest. In addition, the court found that the agents had a right to conduct a search incident to the arrest of Bustamante for weapons or evidence. When Stewart glanced down into the partially open drawer, he recognized the packages described to him by Modesitt. The court found that, since the agents knew the cocaine was contained in opaque bags, it was immediately recognizable as evidence even though the nature of the contents could not specifically be seen by Stewart without opening those bags.
12
The "plain view" exception to the warrant requirement is applied where a police officer has a prior justification for an intrusion in the course of which he comes inadvertently across a piece of incriminating evidence. Coolidge v. New Hampshire, 403 U.S. 443, 466, 91 S.Ct. 2022, 2038, 29 L.Ed.2d 564 (1971); United States v. Rodriguez, 596 F.2d 169, 175 (6th Cir.1979). The district court found that the inadvertence requirement was met under this Court's decision in United States v. Hare, 589 F.2d 1291 (6th Cir.1979).
13
Agent Stewart's discovery of the bags when he glanced into the partially opened drawer justified seizure under the circumstances. Since the bags of cocaine were shown to Agent Modesitt in the hotel room a short time before, even if out of immediate sight when he and the agents returned to the room, there was a proper basis for the agents to look about for any unconcealed articles in a cursory overview of the immediate area.
14
This holding finds support in United States v. Rodriguez, supra. In that case an airline employee conducted a private party search of a package and found that it contained drugs. The employee called the police. The police came and saw the contents of the partially opened box, which appeared to be contraband. The court found that the plain view exception applied because (1) the officer was lawfully present, (2) the object was in plain view, and (3) its incriminating nature was immediately apparent. The court found the third requirement met where the contents looked like narcotics packaged in plastic bags, ready for sale. (596 F.2d at 175). Similarly, in this case, Agent Stewart was lawfully in the hotel room to arrest Bustamante, the bags were visible in the partially opened drawer, and their incriminating nature was apparent, particularly in light of Modesitt's description of them. Agent Modesitt lawfully saw the bags of cocaine when he was in the motel room with Gravier and Bustamante, and the three requirements set out in Rodriguez, supra, were met at that time. Therefore, the subsequent look in the same motel room, occurring a few moments later, for the same bags of contraband would fall under the plain view exception.
15
Appellants also argue that the evidence shows that there were actually two conspiracies; the first between Gravier and Castaneda; and the second between Gravier and Bustamante. They point to the fact that after Gravier and Castaneda had their disagreement, each offered separately to supply Modesitt with the cocaine he had ordered. Appellants note, moreover, that Bustamante was never mentioned by name, nor did Modesitt meet him until after Castaneda was removed from the planned delivery. The government, on the other hand, argues that the evidence indicates that there was one continuing conspiracy in which Gravier, Bustamante and Castaneda each participated. It contends that there is sufficient evidence to show that Bustamante was involved before the conspiracy between Gravier and Castaneda ended.
16
It has long been established that a conspirator may join a conspiracy already in progress and be held responsible for actions done in furtherance of the conspiracy before he joined. See Poliafico v. United States, 237 F.2d 97 (6th Cir.1956), cert. denied, 352 U.S. 1025, 77 S.Ct. 590, 1 L.Ed.2d 597. Particularly in a "chain" conspiracy, such as the one alleged in the instant case, a single conspiracy does not become multiple conspiracies simply because each conspirator did not know every other conspirator, or because each conspirator was not involved in every aspect of the conspiracy. United States v. Warner, 690 F.2d 545, 548-49 (6th Cir.1982).
17
In the case at bar, there was sufficient evidence that Bustamante was involved in the conspiracy before Castaneda was excluded from it to admit the evidence of conversations with Castaneda. On October 11, Castaneda told Modesitt that Gravier was supposed to talk to another person, and call back Castaneda. On October 12, Castaneda told Modesitt that Gravier was coming to Cincinnati to deliver the cocaine, and that the persons who supplied the cocaine would be coming with him; consequently, Modesitt was to get two motel reservations. Later on the 12th, Gravier called Modesitt and told him about the disagreement with Castaneda. Gravier had stated to Castaneda that the people who supplied the cocaine had accepted responsibility for delivering it. On the 13th, Castaneda told Modesitt that Gravier had told him that he could not accompany them in the delivery of the cocaine because Gravier's people did not want to meet Castaneda. Eventually, the other person involved turned out to be Bustamante. There was ample evidence, then, for a jury to find that Bustamante was involved before Castaneda was excluded from the conspiracy, even though he was not mentioned by name.
18
Accordingly, the district court was correct in allowing the taped conversations with the co-conspirator to be admitted.
19
The convictions are accordingly affirmed as to both appellants.
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23 Mass. App. Ct. 428 (1987)
503 N.E.2d 50
ROBERT A. JERMAIN
vs.
BOARD OF REGENTS OF HIGHER EDUCATION[1] & another.[2]
Appeals Court of Massachusetts, Suffolk.
November 6, 1986.
January 27, 1987.
Present: GRANT, QUIRICO, & FINE, JJ.
Maurice M. Cahillane for the plaintiff.
Carolyn V. Wood, Assistant Attorney General, for the defendants.
*429 FINE, J.
Robert A. Jermain, a nontenured associate professor at North Shore Community College who had been reappointed for the 1975-1976 academic year, was notified by the college president in late August of 1975 that budgetary limitations required that his employment be terminated, effective August 30, 1975. Jermain was rehired, effective November 15, 1975. In this action, originally brought against those who on the relevant dates were members of the Board of Regional Community Colleges (board), Jermain seeks back pay in the amount of $3,499, claiming that the termination violated his contractual rights and his constitutional right to due process.[3] He claims that he was entitled to a pretermination hearing before the members of the board. On cross motions for summary judgment and a statement of agreed facts, the Superior Court entered summary judgment for the defendants.
Jermain was first employed at North Shore Community College in a part-time position in 1971. Although he was not granted tenure, he became a full-time faculty member in 1972 and each spring he would receive an appointment for the next academic year. In due course, Jermain received a letter, dated March 28, 1975, from George Traicoff, president of North Shore Community College, inquiring whether he was interested in continuing his employment for the 1975-1976 academic year. Jermain returned the letter indicating that he intended to continue in his employment.
On August 20, 1975, the Legislature enacted the Interim Budget Act, St. 1975, c. 530, § 1, which reduced the total *430 amount of funds allotted to community colleges for the 1975-1976 fiscal year by ten percent and provided for criminal penalties for any official who authorized excess expenditures. In accordance with the new fiscal realities and with written direction from the board to reduce academic personnel according to suggested criteria,[4] Traicoff informed Jermain by letter, dated August 27, 1975, that, effective August 30, 1975, he would be removed from his position. The stated reasons for his selection for removal were his untenured status and the reduced level of demand for courses in his department. Of the three professors in the department, Jermain was the only one who lacked tenure and the one with the least advanced academic degree.
Traicoff's letter and a subsequent letter from the board notified Jermain that he could request a hearing; he did so on September 5, 1975. On October 22, the personnel committee of the board, consisting of two of the board's sixteen members, and the personnel director, a nonmember, held a hearing on the termination. Jermain appeared with counsel and offered testimony and cross-examined opposing witnesses. The personnel director prepared a summary of the hearing for the personnel *431 committee; the committee in turn recommended to the board that Jermain be removed. After some discussion, the board adopted that recommendation.
1. The contract claim. The parties stipulated that the March 28, 1975, letter from Traicoff to Jermain and Jermain's affirmative response constituted a contract between the parties for Jermain's employment for the 1975-1976 academic year and that the reappointment was governed by the board's policies for professional staff appointment. There is no dispute that budgetary limitations required that some professional staff at North Shore Community College be terminated in August of 1975. Nor is there any dispute that the selection of Jermain as one of the individuals to be removed was made in good faith. Furthermore, Jermain does not challenge the general principle relied upon by the board that, in the absence of an express term to the contrary, there is an implied right in any agreement for employment as a public employee to terminate that employment on grounds of financial necessity. See Debnam v. Belmont, 388 Mass. 632, 635-636 (1983); Nutter v. School Comm. of Lowell, 5 Mass. App. Ct. 77, 79-80 (1977); Jimenez v. Almodovar, 650 F.2d 363, 368 & n. 5 (1st Cir.1981). Compare Breslin v. School Comm. of Quincy, 20 Mass. App. Ct. 74, 80-81 (1985). Termination in such circumstances is considered to be for "just cause." See Debnam v. Belmont, 388 Mass. at 634.
The question remains whether the procedural requirements included in the board's policy, and therefore in the employment contract, are applicable in the context of a termination of employment due to lack of funds. The board had adopted a policy entitled "Academic Freedom and Tenure in Massachusetts Community Colleges," which, by its terms, was to "remain in effect until amended or revoked by the Board." It was amended on May 9, 1975, and retitled "Appointment to Professional Positions in the Massachusetts Community Colleges."[5] The amended policy provides:
*432 "A person holding a professional appointment without tenure may, before the expiration of his/her term of appointment, be removed for just cause by action of the Board taken upon recommendation of the President of the college with the concurrence of the President of the Board of Regional Community Colleges, after consultation with the appropriate dean and department head or equivalent, and after notice to such person and an opportunity to be heard, as provided for persons with tenure."
Tenured personnel who have been recommended for dismissal have the right under the policy to notice and a hearing before the board "or a committee thereof." The board may act on the recommendation of the college president and the board president that the person be removed "[a]fter such hearing."
The question whether the hearing procedure outlined in the board's policy applies to a termination based on financial necessity turns on the reasonableness of such a construction in the circumstances. A hearing requirement usually serves the purpose of assuring a teacher faced with a charge of misconduct or incompetency an opportunity to defend himself by presenting his version of the facts or by demonstrating that the charge is a pretext for some improper purpose. The protection of a hearing, suitable for resolving such factual issues, may be unsuitable, however, in a case such as this. See Jimenez v. Almodovar, 650 F.2d at 369; Hartman v. Providence, 636 F. Supp. 1395, 1408 (D.R.I. 1986). The need for the public agency to act when there are insufficient funds available to pay an employee is likely to be immediate. Even so, the employee, facing the severe consequence of loss of employment, might view a hearing as a protection against unfairness and as a meaningful opportunity for him to attempt to persuade the decision maker that the budget cuts, however necessary, should be made in some way other than by terminating his employment. *433 See Black v. School Comm. of Malden, 365 Mass. 197, 205 (1974); Milne v. School Comm. of Manchester, 381 Mass. 581, 583 n. 3 (1980); Boston Teachers Local 66 v. School Comm. of Boston, 386 Mass. 197, 216 (1982); Breslin v. School Comm. of Quincy, 20 Mass. App. Ct. at 80-82; Jimenez v. Almodovar, 650 F.2d at 369 n. 7; Russell v. Harrison, 562 F. Supp. 467, 470 (N.D. Miss. 1983), modified in part, 736 F.2d 283 (5th Cir.1984). Compare Nawn v. Selectmen of Tewksbury, 4 Mass. App. Ct. 715, 718 (1976). It may be that the public agency, having extended to the employee some expectation of continued employment and having provided some procedural protections, ought to be put to the burden of justifying the termination of employment even if for lack of available funds. We are not compelled to resolve the issue of the applicability of the hearing provisions in the contract, however, because in this case, even if the provisions were applicable, there was no violation such as to entitle Jermain to the contract damages he is seeking.
Jermain first complains that his hearing was not before the board. The policy, however, authorizes a hearing before a committee of the board, and that is what he had; the personnel committee, two of whose three members sat on the board, heard his appeal.
Secondly, he claims that he did not receive the pretermination hearing to which he was entitled. The policy does suggest that the hearing should be held before termination, and the board concededly did not comply with that provision. Jermain, however, was not prejudiced in any way and suffered no loss as a result of the delay. He had a meaningful hearing within a reasonable time of his removal, and he was unable to establish at the hearing an absence of necessity for the termination or a lack of good faith. The clear evidence of a fiscal emergency and the use of appropriate guidelines, together with other indications of the board's good faith, lead us to conclude that strict compliance with the 1975 procedure would not have changed the result; Jermain simply would not have prevailed even if the hearing had been held prior to the effective date of his dismissal. Therefore, even if there was a technical departure *434 from the required procedure, it was of no significance to the substantial rights of Jermain, and he may not base a claim for contract damages on it. See Jantzen v. School Comm. of Chelmsford, 332 Mass. 175, 178 (1955); Kaplan v. School Comm. of Melrose, 363 Mass. 332, 336 (1973).
2. The due process claim. Jermain claims that he had a property interest in his one-year employment as a professor because during that period, according to his contract, he could not be removed except for just cause. See Regents of State Colleges v. Roth, 408 U.S. 564, 576-578 (1972); Perry v. Sinderman, 408 U.S. 593, 601-602 (1972); Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 538-540 (1985); Barnett v. Housing Authy. of Atlanta, 707 F.2d 1571, 1576-1577 (11th Cir.1983). Compare Milne v. School Comm. of Manchester, 381 Mass. at 582-583; Hartman v. Providence, 636 F. Supp. at 1408. Accordingly, Jermain contends that he had a right to a meaningful hearing at a meaningful time. See Mathews v. Eldridge, 424 U.S. 319, 333 (1976); Breslin v. School Comm. of Quincy, 20 Mass. App. Ct. at 81.
We need not decide whether, in the circumstances, Jermain had a protectable property interest in his position, however, because we rule that the procedures employed by the board were more than adequate to meet the minimal requirements of due process. After fair notice, Jermain, represented by counsel, had a hearing before a committee of the board including two of its members and the personnel director. The delegation of authority by the board was not improper. See Bates v. Sponberg, 547 F.2d 325, 332-333 (6th Cir.1976). Jermain had a full opportunity to present evidence, to cross-examine witnesses and to argue his position. A transcript of the hearing was prepared, and the personnel director composed a detailed summary of the evidence and the issues and contentions of the parties. Jermain does not contend that the summary was unfair or inaccurate. No issue of credibility emerged at the hearing. The board discussed the matter at a subsequent meeting and reached its decision in an apparently fair manner. It appears that the ultimate decision maker acted on personal understanding *435 and exercised independent judgment. See Megill v. Regents of Florida, 541 F.2d 1073, 1080 (5th Cir.1976).
It was not a violation of due process that the hearing was held after Jermain's termination. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985), on which Jermain relies to support his claim that he had a right to a pretermination hearing, involved a teacher charged with unsatisfactory performance. Loudermill required "some kind of hearing" prior to termination in such circumstances to determine whether there were reasonable grounds to believe the charges were true and to support the proposed action. A pretermination hearing, it was said, would serve as an initial check against an erroneous decision. Those considerations have limited application to a case in which a public employee is terminated on grounds of financial necessity. See and compare Breslin v. School Comm. of Quincy, 20 Mass. App. Ct. at 81-82; see also Russell v. Harrison, 562 F. Supp. at 469.
Judgment affirmed.
NOTES
[1] The action was originally brought against the Board of Regional Community Colleges. That board was dissolved and its duties assumed by a new agency, the Board of Regents of Higher Education, pursuant to St. 1980, c. 329, §§ 111, 112.
[2] The Commonwealth.
[3] At the time Jermain filed this action in December, 1975, similar actions had been filed in the Superior Court in Suffolk, Worcester and Franklin Counties by eighteen other teachers who had been terminated from community colleges. All of those plaintiffs sought review under G.L.c. 30A, § 14, the State Administrative Procedure Act. Since all the actions involved the applicability of the State Administrative Procedure Act, counsel agreed to submit the issue on one case. The Superior Court entered summary judgment for the defendants, holding that there was no right under G.L.c. 30A to judicial review of a termination. The Appeals Court affirmed but indicated that the plaintiff could amend his complaint to state a claim which did not depend on G.L.c. 30A. Massey v. Regional Community Colleges, 11 Mass. App. Ct. 1033 (1981).
[4] Board President Dwyer's August 15, 1975, memorandum to the community college presidents outlined the financial restrictions affecting the colleges from July through October of 1975 and proposed the following:
"SUGGESTED CRITERIA FOR PERSONNEL REDUCTION
"Basic Principle: top priority is delivery of educational services to students in state funded programs
"Order for determining lay-offs and/or terminations:
1. Non teaching personnel, professional and classified
2. Teaching personnel
a. lowest student contact hours
b. least productive on basis of evaluations, student success: least flexible in terms of qualifications to teach other subjects c. teaching in program or subject with below average enrollment or declining demand d. given equal conditions, tenured faculty will be given preference for retention over nontenured; between tenured faculty, seniority will be given preference."
[5] Jermain contends that his rights were governed by the 1968 policy and not the 1975 policy because the 1968 policy was in effect in March, 1975, when the parties entered into the employment contract. The 1968 policy provides the employee with more extensive procedural rights than does the later policy. Unlike the 1975 policy, the 1968 version incorporates some of the provisions of G.L.c. 30A, §§ 11 and 12. In view of the authorization in the 1968 policy for amendments, Jermain's position is without merit.
| {
"pile_set_name": "FreeLaw"
} |
453 B.R. 743 (2011)
In re Peter E. JOKIEL, Debtor.
No. 09-B-27495.
United States Bankruptcy Court, N.D. Illinois, Eastern Division.
April 22, 2011.
*745 Catherine L. Steege, Michael J. Kelly, Jenner & Block LLP, Chicago, IL, for Debtor.
David C. Christian II, P. Shawn Wood, Jason J. DeJonker, James B. Sowka, Seyfarth Shaw LLP, Chicago, IL, for CNA Financial Corp.
Charles J. Myler, Esq., Aurora, IL, Trustee.
MEMORANDUM OPINION
MANUEL BARBOSA, Bankruptcy Judge.
This matter comes before the Court on the objections of the Trustee and creditor CNA Financial Corporation ("CNA") to the Debtor's claim of exemption in a "Supplemental Executive Retirement Plan." For the reasons set forth herein, the Court grants the Trustee's and CNA's objection.
JURISDICTION AND PROCEDURE
The Court has jurisdiction to decide this matter pursuant to 28 U.S.C. § 1334 and Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. It is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B) and (O).
FACTS AND BACKGROUND
The following facts and procedural history are taken from CNA's Objection to Debtor's Claim of Exemption for the Supplemental Executive Retirement Plan, the Trustee's Objection to Debtor's Claimed Exemption of Supplemental Executive Retirement Plan, the Debtor's response, the Trustee's reply, CNA's reply, the Debtor's sur-reply, the Debtor's supplemental brief, the Trustee's sur-reply and CNA's surreply, and all attachments thereto.
The Debtor filed for protection under Chapter 7 of the Bankruptcy Code with this Court on July 29, 2009. The Debtor was an employee of CNA from 1981 until he resigned in 2001. Through his employment at CNA, he participated in two retirement plans: a general plan qualified under ERISA and eligible for favorable tax deferrals on contributions by CNA to the plan (the "General Plan"), and a supplemental executive retirement plan which was only available to a select group of highly paid executives (the "Supplemental Plan"). Since the Debtor's retirement from CNA in 2001, he has received, and continues to receive, monthly payments under the Supplemental Plan of $17,718,86. The Supplemental Plan was not qualified for favorable tax treatment under Section 401 of the Internal Revenue Code because it discriminated in favor of highly compensated employees and exceeded the maximum benefits under the Internal Revenue Code. 26 U.S.C. § 401(a)(4), (16), (17). The Supplemental Plan itself stated that the purpose of the plan was to provide benefits in excess of the limitations in Section 415 of the Internal Revenue Code and the limitation on compensation in Section *746 401(a)(17). (CNA's Objection, Ex.A, at ¶ 1.2, ECF No. 27). The Supplemental Plan also expressly provided that CNA would make no provision for the funding of any benefits payable under the Supplemental Plan, and that in the event the company decided to establish any reserve, such reserve "shall remain a part of the general assets of the Company, subject to claims of the Company's creditors." (CNA's Objection, Ex.A, at ¶ 5.1, ECF No. 27). The Supplemental Plan was therefore a so-called "top hat" employee benefit plan, because it was "unfunded" and "maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees." Cogan v. Phoenix Life Ins. Co., 310 F.3d 238, 242 (1st Cir.2002) (citing 29 U.S.C. § 1101(a)(1)). Because of this, the plan was not subject to certain key provisions of ERISA, such as the requirement for minimum funding of the plan and liability for contributions, the restriction on assignment or alienation of plan benefits, the imposition of a trust on plan assets, and the imposition of fiduciary duties on the administrators or other `fiduciaries' of the plan.
In addition to being the Debtor's former employer, CNA is also his largest creditor. According to the Debtor's bankruptcy schedules, of his $2,819,291.10 in liabilities, $2,776,415.16 is owed to CNA.[1] This debt primarily arises out of a loan of $1,649,986.24 extended by CNA in October 1998 for the purpose of investing in CNA stock. The Debtor alleges that his bankruptcy was caused by the loan coming due in October 2008, at a time that the value of CNA stock had plummeted. The Debtor alleged in his bankruptcy schedules that the CNA stock was valued at $690,527.04 as of the petition date.[2]
The Debtor did not list his interest in the CNA General Plan as an asset in his original bankruptcy schedules. However, he filed an Amended Schedule B and C on April 16, 2010, listing a "CNA Pension" of "unknown" value and asserting an exemption in 100% of the asset under 735 ILCS 5/12-1006.[3] The Trustee and CNA apparently do not object to the claim of exemption in the General Plan, but do object to the exemption in the Supplemental Plan. The Debtor listed the CNA Supplemental Plan in his original bankruptcy schedules, again listing the value as "unknown" and asserting an exemption in 100% of the asset under 735 ILCS 5/12-1006. In addition to the claim of exemption under the Illinois statute, the April 2010 Amended Schedule included a "Statement Regarding Amended Schedules" in which the Debtor argued that the interest in the Supplemental Plan was not property of the estate under 11 U.S.C. § 541(c)(2) because the plan was subject to a valid anti-alienation clause.
CNA filed an objection to the claim of exemption in the Supplemental Plan on October 15, 2009, which was joined by the *747 Trustee when he filed his own objection on June 9, 2010.[4] CNA and the Trustee argue that 735 ILCS 5/12-1006 does not apply to the Supplemental Plan because it was not "intended in good faith to qualify as a retirement plan under applicable provisions of the Internal Revenue Code," 735 ILCS 5/12-1006(a), and argue that 11 U.S.C. § 541(c)(2) does not apply to the Supplemental Plan because it was unfunded and therefore did not constitute a beneficial interest "in a trust." CNA and the Trustee bear the burden of proving that the Debtor's exemptions are not properly claimed. Fed. R. Bankr.P. 4003(c).
DISCUSSION
A. 735 ILCS 5/12-1006
735 ILCS 5/12-1006 provides an exemption in a debtor's interest in a retirement plan only if the plan "is intended in good faith to qualify as a retirement plan under applicable provisions of the Internal Revenue Code of 1986, as now or hereafter amended." 735 ILCS 5/12-1006(a). Unlike the parallel exemption in the federal set of exemptions, 11 U.S.C. § 522(d)(E), which states that a pension or retirement plan is not exempt if it "does not qualify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code," the Illinois statute does not refer to a specific section of the Internal Revenue Code. From this, the Debtor argues that the Illinois exemption is intended to cover a broader group of so-called retirement plans. The Debtor argues that, because there is no specific reference to a code section, the Illinois statute was intended to refer to the term "retirement plan" as used throughout the Internal Revenue Code. The term is not specifically defined in the Internal Revenue Code, and is frequently used generally to refer to a plan, whether it qualifies for special tax treatment or not.
However, the Illinois statute does not state that it exempts retirement plans "as defined in" the Internal Revenue Code. It says it exempts retirement plans that are intended in good faith to "qualify" under the applicable provisions of the tax code. Numerous provisions of the Internal Revenue Code contain lists of criteria that must be met for a certain type of asset to qualify for some form of special tax treatment. The Court concludes that the Illinois exemption only applies to retirement plans that are intended to qualify for one or more such forms of preferred tax treatment. See, e.g., In re Ellis, 274 B.R. 782, 787 (Bankr.S.D.Ill.2002) (Meyers, J.) ("To be eligible for exemption under § 12-1006, then, an annuity must come within the Internal Revenue Code provisions for tax-qualified retirement plans.").
For example, the title of Section 401 of the Internal Revenue Code is "Qualified pension, profit-sharing, and stock bonus plans." Subsection (a) is titled "Requirements for qualification," and subsection (a) states that "[a] trust[5] created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section" only if it satisfies the enumerated 37 criteria. The Debtor has admitted that the Supplemental Plan at issue did not *748 qualify under 26 U.S.C. § 401, because it violated the anti-discrimination provision in Section 401(a)(4), and because it provided "retirement benefits in excess of those benefits that would be allowed under a [qualified] retirement plan [as] described in Section 401(a)(17)." (D's Resp., p. 2, ECF No. 88).
While the Internal Revenue Code does not define "retirement plan," the Illinois exemption statute does. It defines "Retirement plan" to include the following:
(1) a stock bonus, pension, profit sharing, annuity, or similar plan or arrangement, including a retirement plan for self-employed individuals or a simplified employee pension plan;
(2) a government or church retirement plan or contract;
(3) an individual retirement annuity or individual retirement account; and
(4) a public employee pension plan created under the Illinois Pension Code, as now or hereafter amended.
735 ILCS 5/12-1006(b). As noted above, 26 U.S.C. § 401, titled "Qualified pension, profit-sharing, and stock bonus plans," corresponds to the first three asset types in 735 ILCS 5/12-1006(b)(1), and contains a list of requirements that the Supplemental Plan does not satisfy. There are corresponding sections in the Internal Revenue Code with lists of qualifying requirements for employee annuities, 26 U.S.C. § 403, individual retirement accounts, 26 U.S.C. § 408(a), and individual retirement annuities, 26 U.S.C. § 408(b). "Government plan" and "Church plan" are defined in 26 U.S.C. § 414. However, the Debtor has neither suggested nor provided evidence that the Supplemental Plan would fall within any of these other categories of retirement plans, or that it would satisfy the qualification requirements in such sections of the Internal Revenue Code. For example, while the Supplemental Plan is a promise to make future payments, it is not an employee annuity under 26 U.S.C. § 403, since it was not "purchased by an employer for an employee." 26 U.S.C. § 403(a)(1). Nor is it an "individual retirement annuity" under the Internal Revenue Code, since it was not "issued by an insurance company," 26 U.S.C. § 408(b), or an "individual retirement account" since it is not a trust where the "trustee is a bank." 26 U.S.C. § 408(a)(2).
The Debtor notes that the previously mentioned sections of the Internal Revenue Code focus on the tax effects on the employer or the plan itselfwhether the employer can deduct contributions it makes, and whether the plan or trust has taxable income on the appreciation of funds it is holdingand questions why the Illinois legislature would have been concerned about the tax treatment for employers when exemption statutes are designed to protect debtors. However, it is likely that the Illinois legislature believed Congress made certain policy choices in drafting the sections dealing with retirement plans to encourage certain types of retirement plans with certain features, such as non-discrimination in favor of highly-paid executives and restrictions on early withdrawals. Congress encouraged these types of plans by providing tax benefits if the plan satisfied the enumerated qualifications. Benefits to either the employer or the employee would create incentives for employers to develop such plans and for employees to invest in them. It does not seem surprising that the Illinois legislature, generally agreeing with the policy choices made by Congress with respect to retirement plans, might have adopted and deferred to such policies by making such qualified plans eligible for an exemption under state law. Moreover, the Internal Revenue Code already has detailed provisions and sets of qualifications, and it *749 would be easier to cross-reference the federal statute than to design and draft new provisions. Nor is it surprising that the Illinois legislature would refer generally to the Internal Revenue Code rather than list specific code sections as Congress did in 11 U.S.C. § 522(d)(E). The Internal Revenue Code is complex and changes frequently. When Congress amends the Internal Revenue Code, it can be expected make conforming changes to cross-references in other federal laws. In contrast, it would be difficult for the Illinois legislature to monitor changes in specific sections of federal law, and there could be a lag between when Congress changes a law and the Illinois legislature is able to make conforming changes in Illinois law.
The Debtor next argues that even if the Supplemental Plan did not qualify under the Internal Revenue Code, he is entitled to the exemption because the plan was "intended in good faith to qualify" under the tax code. First, it is important to note that by the clear language of the statute the intent must be to qualify under the tax code, and not simply that the plan was intended to be used for retirement. See, e.g., In re Ellis, 274 B.R. 782, 788 (Bankr.S.D.Ill.2002) (noting that, while exemption statutes are normally construed liberally in favor of debtors, "even under a liberal construction, § 12-1006 cannot be extended to protect whatever a debtor unilaterally chooses to claim as intended for retirement purposes."). Such a broad interpretation could make substantially all of a debtor's assets, such as all bank accounts and all investments, exempt merely upon a representation by the debtor that he hoped to use the asset for his retirement. Instead, the `intended to qualify' provision is meant to protect debtors who intend to invest in qualified retirement plans that turn out to be nonqualified, either because of a technical defect in the structuring of a plan that was intended to qualify, or because the debtor in good faith thought he was investing in a qualified plan because of representations made to him or because of his misunderstanding of the complexities of the Internal Revenue Code. Here, the Debtor has presented no evidence to support such an argument, and instead has presented evidence supporting the opposite conclusion. Attached to the Debtor's Response to the Debtor's Claim of Exemption is a hand-written set of questions from the Debtor to someone at CNA from around the time he invested in the CNA stock program in 1998, where he refers to the "top hat" plan as his "non-qualified savings plan" or his "non-qualified retirement fund," and a response from the company in the form of a printed Q & A, in which the company also refers to the plan as "non-qualified savings and pension assets." (D's Resp., Ex. 3, Ex. 5, ECF No. 88). The Debtor was therefore clearly on notice that the Supplemental Plan would not qualify for special tax treatment. Moreover, on the first page of the body of the Supplemental Plan documentation, it clearly states that the "purpose of the [Supplemental] Plan is to provide to retired participants ... benefits that would have been provided under the [General Plan] but for the limitations on benefits imposed under Section 415 of the [Internal Revenue] Code and the limitations on compensation for purposes of the [General Plan] imposed by Section 401(a)(17) of the Code." (CNA's Objection, Ex. A, ECF No. 27). This further demonstrates that the Debtor was aware that the Supplemental Plan would not qualify for special treatment under the Internal Revenue Code and nor was it intended to qualify. It is therefore clear that the Supplemental Plan was not "intended in good faith to qualify as a retirement plan under applicable provisions of the Internal Revenue Code."
*750 Finally, the Debtor argues that, even if the plan did not qualify for the Illinois exemption, CNA either lacks standing, has waived its right to object or should be estopped from objecting to the claim of exemption because in the previously mentioned written Q & A, which CNA gave the Debtor before extending him a loan in 1998 to purchase stock in the company, CNA made a statement that if the Debtor "declare[d] personal bankruptcy," the "company cannot look to qualified and non-qualified savings and pension assets as an offset to satisfy the loan balance." (D's Resp., Ex. 3, ECF No. 88). However, first, even if CNA were estopped, the Trustee has also filed an objection to the claim of exemption, and the Trustee clearly has standing and has not waived his right to object. Second, even as to CNA estoppel would not apply, since the statement in the Q & A is not inconsistent with the relief CNA currently seeks or the arguments it is making. Such a statement says nothing about whether the Debtor could validly assert an exemption in pension assets. It only states that CNA will not exercise or has no right of setoff against the retirement assets. But, CNA is not seeking to set off payments it owes the Debtor under the plan against debts the Debtor owes the company. The company is objecting to a claim of exemption by the Debtor, asserting that the claimed exemption is not supported by law.
B. 11 U.S.C. § 541(c)(2)
The Supplemental Plan documentation contains a provision stating that "No Payee may assign, anticipate or otherwise encumber any payment due him under this Plan. Any payment due to a payee under the Plan shall be exempt from the claims of his creditors." (CNA's Objection, Ex.A ¶ 5.7, ECF No. 27). The Debtor makes two arguments, either that the anti-alienation provision prevented the Debtor's interest in payments under the Supplemental Plan from becoming property of the estate, or that CNA should be estopped from claiming the interest is not exempt because it is a party to the Supplemental Plan agreement and is therefore bound by the language stating the interest is exempt from the claims of creditors. Neither argument is persuasive.
A contractual anti-alienation clause is normally insufficient to prevent a payment right from becoming property of a bankruptcy estate. This is because 11 U.S.C. § 541(c)(1) states that "Except as provided in paragraph (2) of this subsection, an interest of the debtor in property becomes property of the estate under subsection (a)(1), (a)(2), or (a)(5) of this section notwithstanding any provision in an agreement, transfer instrument, or applicable nonbankruptcy law(A) that restricts or conditions transfer of such interest by the debtor." Thus, unless the exception in Section 541(c)(2) applies, the anti-alienation provision in the contract did not prevent the Debtor's interest in the Supplemental Plan from passing to the bankruptcy estate.
11 U.S.C. § 541(c)(2) states that a "restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under applicable nonbankruptcy law is enforceable in a case under this title."[6] The Debtor focuses on the language *751 "enforceable under applicable nonbankruptcy law" to argue that the anti-alienation language in the Supplemental Plan documents operates to prevent the Debtor's interest in the Supplemental Plan from entering the bankruptcy estate. The problem is that the Debtor ignores the limitation in Section 541(c)(2) that it only applies to a "beneficial interest of the debtor in a trust." See, e.g., In re Weinhoeft, 275 F.3d 604, 605 (7th Cir.2001) ("The $40,000 did not enter a trust, so § 541(c)(2) does not avail the Weinhoefts"); In re Lowe, 252 B.R. 614, 625 (Bankr.W.D.N.Y. 2000) ("More broadly speaking, exemption claims based solely upon anti-alienation provisions in mere contracts that are not themselves trusts, or that are not part of an overall, ERISA-qualified pension "package," have no force of law as against creditors or trustees."). "Trust" is not specifically defined in the Bankruptcy Code. However, the term is defined in the Restatement (Third) of Trusts as "a fiduciary relationship with respect to property, arising from a manifestation of intention to create that relationship and subjecting the person who holds title to the property to duties to deal with it for the benefit of charity or for one or more persons, at least one of whom is not the sole trustee." Restatement (Third) of Trusts § 2 (emphasis added). Therefore, for a trust to be formed, there must be specific property or a `res.' See, e.g., George Gleason Bogert et al., Bogert's Trusts & Trustees § 113 (2010) ("A present trust requires an existent property interest, and an existent property interest demands an existent subject of ownership."); Brainard v. Comm'r of Internal Revenue, 91 F.2d 880 (7th Cir. 1937) (finding that "an interest which has not come into existence or which has ceased to exist can not be held in trust" and therefore a declaration of a trust over an interest not in existence is at most a contract "to create a trust of an interest if he should thereafter acquire it"). Without a trust, Section 541(c)(2) does not apply.
However, the Debtor has identified no trust res or other indicia of a trust for the Supplemental Plan. The Supplemental Plan documentation expressly provided that CNA would make no provision for the funding of any benefits payable under the Supplemental Plan, and that in the event the company decided to establish any reserve, such reserve "shall remain a part of the general assets of the Company, subject to claims of the Company's creditors." (CNA's Objection, Ex.A, at ¶ 5.1, ECF No. 27). The Debtors provided no evidence that CNA ever established a reserve to fund the Supplemental Plan. Nor was it required to do so under ERISA. Because the Supplemental Plan was "unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees," it was not subject to ERISA's funding requirements. 29 U.S.C. § 1081(3). For the same reason, it was not subject to ERISA's establishment of a trust over plan assets. See 29 U.S.C. §§ 1101(a)(1), 1103. With no specific `res' or trust `corpus,' the plan was therefore only a contractual obligation of CNA to make future payments to the Debtor, and did not constitute an interest in a trust. See, e.g., In re Lowe, 252 B.R. 614, 624 (Bankr.W.D.N.Y.2000) ("Moreover, there does not appear to be a trust here at all, but rather this Plan simply provides additional, deferred compensation paid by the employer."). Therefore, it did not satisfy the plain language of Section *752 541(c)(2). The Court cannot accept the Debtor's argument that 541(c)(2) applies to any right to payment subject to a valid anti-alienation clause. See, e.g., In re Simon, 170 B.R. 999, 1002 (Bankr.S.D.Ill. 1994) (finding that, despite antiassignment language in agreement, payments under structured settlement were mere contractual right with no "indicia of trust" such as an "identifiable trust res" and therefore Section 541(c)(2) did not apply). Such a reading would treat the words "beneficial interest . . . in a trust" in Section 541(c)(2) as surplusage, and would make Section 541(c)(1)(A) meaningless.[7]
While Section 541(c)(2) is most often asserted to exclude a valid spendthrift trust under state law, the Supreme Court has held that "applicable nonbankruptcy law" for purposes of Section 541(c)(2) can include applicable federal law, including ERISA. Patterson v. Shumate, 504 U.S. 753, 758, 112 S.Ct. 2242, 2246, 119 L.Ed.2d 519 (1992). Therefore, the Court found that, for "an ERISA-qualified pension plan. . . Section 206(d)(1) of ERISA, which states that `[e]ach pension plan shall provide that benefits provided under the plan may not be assigned or alienated,' 29 U.S.C. § 1056(d)(1), clearly imposes a `restriction on the transfer' of a debtor's `beneficial interest' in the trust," and therefore the plan interest was excluded from the estate under Section 541(c)(2). Shumate, 504 U.S. at 757-759, 112 S.Ct. at 2246-47. The problem here, though, is that the Supplemental Plan is not a `qualified' ERISA plan. While 29 U.S.C. § 1103 imposes a trust on plan assets and 29 U.S.C. § 1051, restricts the assignment or alienation of plan benefits, neither of those provisions applies to "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees," and therefore neither provision applies to the Supplemental Plan. 29 U.S.C. §§ 1051(2), 1101(a)(1).[8] Therefore, Shumate is easily distinguishable, and does not support the Debtor's argument that the Supplemental Plan is excluded under Section 541(c)(2).
Again the Debtor raises a waiver or estoppel argument, arguing that CNA should not be allowed to object because it is bound by the anti-alienation language in the Supplemental Plan, to which it is a party. But this argument fails for the same reasons as the Debtor's estoppel argument in connection with the stock purchase loan. First, even if CNA were estopped from raising an objection, the Trustee has also filed an objection. Second, CNA is not asserting a direct interest, *753 such as a security interest, in the Supplemental Plan payments. It is objecting to the Debtor's claim of exemption as not supported by law. The Debtor has cited no case law or authority for the proposition that a creditor, in its capacity as a general unsecured creditor, should be barred from distribution of proceeds of the estate traceable to estate property in which the creditor had waived its right to collect. Even if that were the case, it would not mean that CNA had no standing to object to the claim of exemption. Even if it were barred from a pro rata distribution from the Supplemental Plan, the resolution of the objection could still affect its ultimate distribution. Distribution to other creditors from proceeds of the Supplemental Plan who had not waived their right would free up other estate property in which CNA had not waived its right to distribution, and therefore the objection could still increase CNA's right to a dividend from the estate.
CONCLUSION
For the foregoing reasons, the Court grants the Trustee's and CNA's objection, and finds that the Debtor's interest in the Supplemental Plan is neither excluded from the estate under 11 U.S.C. § 541(c)(2) nor exempt under 735 ILCS 5/12-1006.
A separate order shall be entered pursuant to Fed. R. Bankr.P. 9021 giving effect to the determinations reached herein.
NOTES
[1] CNA filed a proof of claim, listing the amount as "at least $5,520,261.37" and claiming that $2,629,527 of the claim constituted a claim for breach of a retirement agreement. The precise size and nature of CNA's claim is not relevant to the determination of the objection to exemption, and the Court makes no finding on the issue.
[2] CNA's proof of claim listed the value of the stock as "TBD." Again, the precise value of the CNA stock is not relevant to the determination of the objection to exemption, and the Court makes no finding on the issue.
[3] The docket entry for the amended schedule contains a notation by the Clerk of "Incorrect Event Entered, Filer Notified to Refile," but the document was never refiled by the Debtor. The Court makes no finding at this time as to the effectiveness of the filing.
[4] The Trustee had filed motions and received orders extending the time to file an objection to claim of exemption, which were issued on October 15, 2009, December 17, 2009, February 11, 2010, and April 8, 2010, and ultimately extended the deadline to file an objection through June 14, 2010.
[5] As noted below, the Debtor has not demonstrated that the Supplemental Plan was or included a "trust," which is an additional reason it would not qualify under Section 401.
[6] 735 ILCS 5/12-1006(c) provides that a "retirement plan that is (i) intended in good faith to qualify as a retirement plan under the applicable provisions of the Internal Revenue Code of 1986, as now or hereafter amended,... is conclusively presumed to be a spendthrift trust under the law of Illinois." Valid spendthrift trusts under state law are generally excluded from the estate under 11 U.S.C. § 541(c)(2). However, because, as discussed in the previous section, the Court finds the Supplemental Plan was not "intended in good faith to qualify as a retirement plan under the applicable provisions of the Internal Revenue Code," 735 ILCS 5/12-1006(c) does not apply.
[7] The only case that the Debtor cites is Morter v. Farm Credit Services, 937 F.2d 354 (7th Cir.1991), which the Debtor argues stands for the proposition that 541(c)(2) does not require "a traditional trust to make a retirement plan a spendthrift trust." But, the plan in Morter contained an identifiable trust corpus. The court described that "when a participant retires, TIAA applies preretirement contributions to purchase a fixed annuity contract for the participant's benefit." 937 F.2d at 355. Moreover, the court in Morter ultimately found that the assets at issue were express trusts. 937 F.2d at 359.
[8] Since the Debtor's interest in the Supplemental Plan would neither be excluded nor exempted from the bankruptcy estate under ERISA, 11 U.S.C. § 541(c)(2) or 735 ILCS 5/12-1006, the Court need not address the parties' contention as to whether any portion of 735 ILCS 5/12-1006 is preempted by ERISA. See In re Weinhoeft, 275 F.3d 604, 605 (7th Cir.2001) ("Illinois provides that retirement plans are exempt from creditors' claims. 735 ILCS § 5/12-1006. To the extent that this statute speaks to pensions regulated by ERISA it is preempted (but redundant); to the extent it deals with individual retirement accounts, church plans, and other assets outside the scope of ERISA, it is not preempted.").
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NUMBER 13-09-00132-CR
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
OMAR GUZMAN, Appellant,
v.
THE STATE OF TEXAS, Appellee.
On appeal from the 105th District Court
of Kleberg County, Texas.
MEMORANDUM OPINION
Before Justices Yañez, Rodriguez, and Garza
Memorandum Opinion by Justice Garza
Appellant Omar Guzman was convicted of unauthorized use of a motor vehicle, a
state jail felony. See Tex. Penal Code Ann. § 31.07 (Vernon 2003). Guzman pleaded
guilty to the offense pursuant to a plea agreement with the State and was sentenced to
two years in a state facility. The trial court suspended Guzman's sentence of confinement
and placed him on community supervision for five years, which was later revoked due to
Guzman's non-compliance with the terms of his community supervision. See Tex. Code
Crim. Proc. Ann. art. 42.12, § 23 (Vernon Supp. 2009). Upon revocation, Guzman was
sentenced to two years' confinement.
By one issue, Guzman contends that the punishment assessed is disproportionate
to the seriousness of the alleged offense. We affirm.I. Background
On December 23, 2008, the State filed an amended motion to revoke Guzman's
suspended sentence from a conviction for the unauthorized use of a motor vehicle. See
Tex. Penal Code Ann. § 31.07. In its motion, the State alleged that Guzman had
committed six different violations of the terms of his community supervision; specifically,
Guzman: (1) failed to remain within his county of residence and departed without
permission from the supervision officer; (2) failed to report to his community supervision
officer for the month of November 2008; (3) failed to pay $50 to the local Crime Stoppers
Program; (4) failed to report any change of residence, job, or job status to his community
supervision officer within 24 hours; (5) failed to complete an intensive supervision program;
and (6) failed to complete 180 days of electronic monitoring. Guzman pleaded "true" to all
six allegations.
The trial court granted the State's motion to revoke and sentenced Guzman to two
years' imprisonment in a state jail facility. This appeal followed. (1)
II. Discussion
In his sole issue, Guzman complains that the punishment assessed is
disproportionate to the seriousness of the alleged offense, in violation of the Eighth and
Fourteenth amendments to the United States Constitution. See U.S. Const. art. VIII.
Guzman, however, did not object to his sentence at the time of sentencing or in any
post-trial motion. To preserve error for appellate review, a party must present a timely
objection to the trial court, state the specific grounds for the objection, and obtain a ruling.
Tex. R. App. P. 33.1(a). Because Guzman failed to specifically object to the allegedly
disproportionate sentence in the trial court or in a post-trial motion, he has waived any error
for our review. See Noland v. State, 264 S.W.3d 144, 151 (Tex. App.-Houston [1st Dist.]
2007, pet. ref'd) ("[I]n order to preserve for appellate review a complaint that a sentence
is grossly disproportionate, constituting cruel and unusual punishment, a defendant must
present to the trial court a timely request, objection, or motion stating the specific grounds
for the ruling desired."); Trevino v. State, 174 S.W.3d 925, 927-28 (Tex. App.-Corpus
Christi 2005, pet. ref'd) ("Because the sentence imposed is within the punishment range
and is not illegal, we conclude that the rights [appellant] asserts for the first time on appeal
are not so fundamental as to have relieved him of the necessity of a timely, specific trial
objection."); see also Figueroa v. State, No. 13-08-00115-CR, 2009 Tex. App. LEXIS 8307,
at *4 (Tex. App.-Corpus Christi Oct. 29, 2009, no pet.) (mem. op., not designated for
publication) (holding that appellant did not preserve the issue of whether the punishment
assessed was disproportionate where he "neither objected to his sentence nor raised the
issue in his motion for new trial").
Accordingly, because Guzman did not preserve this alleged error, we overrule his
sole issue.
III. Conclusion
The judgment of the trial court is affirmed.
________________________
DORI CONTRERAS GARZA
Justice
Do Not Publish.
Tex. R. App. P. 47.2(b)
Delivered and filed the
20th day of May, 2010.
1. Texas Rule of Appellate Procedure 25.2 provides that a defendant who accepted a plea bargain
in a criminal case "may appeal only those matters that were raised by written motion filed and ruled on before
trial, or after getting the trial court's permission to appeal." Tex. R. App. P. 25.2 (2). The record reflects that
the trial court signed Guzman's "Certification of Defendant's Right of Appeal" on January 28, 2009.
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 12-99V
(Not to be published)
*****************************
*
KATIE ROBERTS, as parent and guardian of her *
daughter, E.M.R., *
* Filed: August 3, 2015
Petitioner, *
* Decision by Stipulation; Attorney’s
v. * Fees & Costs
*
SECRETARY OF HEALTH AND *
HUMAN SERVICES, *
*
Respondent. *
*
*****************************
Diana L. Stadelnikas Sedar, Maglio Christopher and Toale, PA, Sarasota, FL, for Petitioner
Justine Walters, U.S. Dep’t of Justice, Washington, DC, for Respondent
ATTORNEY’S FEES AND COSTS DECISION1
On February 10, 2012, Katie Roberts filed a petition as parent and guardian of her daughter,
E.M.R., seeking compensation under the National Vaccine Injury Compensation Program. On
December 12, 2014, Petitioner moved for a Decision on the Record. I issued a decision dismissing
the case for insufficient proof on January 16, 2015.
On July 31, 2015, counsel for both parties filed a joint stipulation, in regards to attorney’s
fees and costs. The parties have stipulated that Petitioner’s counsel should receive a lump sum of
$33,364.54, in the form of a check payable to Petitioner and Petitioner’s counsel. This amount
1
Because this decision contains a reasoned explanation for my actions in this case, I will post it on the United States
Court of Federal Claims website, in accordance with the E-Government Act of 2002, Pub. L. No. 107-347, § 205, 116
Stat. 2899, 2913 (Dec. 17, 2002) (current version at 44 U.S.C. § 3501 (2014)). As provided by 42 U.S.C. § 300aa-
12(d)(4)(B), however, the parties may object to the published decision’s inclusion of certain kinds of confidential
information. Specifically, under Vaccine Rule 18(b), each party has fourteen days within which to request redaction
“of any information furnished by that party: (1) that is a trade secret or commercial or financial in substance and is
privileged or confidential; or (2) that includes medical files or similar files, the disclosure of which would constitute
a clearly unwarranted invasion of privacy.” Vaccine Rule 18(b). Otherwise, the whole decision will be available to
the public. Id.
represents a sum to which Respondent does not object. In addition, and in compliance with General
Order No. 9, Petitioner has represented that she did incur any reimbursable costs in proceeding on
this petition.
I approve the requested amount for attorney’s fees and costs as reasonable. Accordingly,
an award should be made in the form of a check in the amount of $33,364.54 payable jointly to
Petitioner and Petitioner’s counsel, Diana L. Stadelnikas Sedar, Esq. In the absence of a motion
for review filed pursuant to RCFC Appendix B, the clerk of the court SHALL ENTER
JUDGMENT in accordance with the terms of the parties’ stipulation.2
IT IS SO ORDERED.
/s/ Brian H. Corcoran
Brian H. Corcoran
Special Master
2
Pursuant to Vaccine Rule 11(a), the parties may expedite entry of judgment by filing a joint notice renouncing their
right to seek review.
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680 F.2d 683
110 L.R.R.M. (BNA) 2944, 94 Lab.Cas. P 13,708
ZURN INDUSTRIES, INC., Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.
Nos. 81-7219, 81-7331.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted April 7, 1982.Decided July 2, 1982.
William B. Moore, Ferguson & Burdell, Seattle, Wash., for petitioner.
1
Lawrence Blatnik, N. L. R. B., Washington, D. C., argued, for respondent; Andrew F. Tranovich, N. L. R. B., Washington, D. C., on brief.
2
On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.
3
Before HUG and SKOPIL, Circuit Judges, and SCHWARZER, District Judge*.
SCHWARZER, District Judge:
4
Petitioner, Zurn Industries, Inc. (Zurn), appeals from a decision of the National Labor Relations Board (Board) holding that Zurn's discharge of six employees was an unfair labor practice in violation of Section 8(a)(1) of the National Labor Relations Act (the Act), 29 U.S.C. § 158(a)(1).1 The Board cross-appeals for enforcement of the order.
5
Zurn contracted with the Washington Public Power Supply System to design and construct concrete cooling towers for a nuclear power plant near Satsop, Washington. The six employees in question were Zurn's concrete placement crew ("mud crew") for the jobsite. On August 15, 1979, these employees were among those attending one of Zurn's regular weekly safety meetings. The main topic at the meeting was employee concern over Zurn's newly acquired safety skip, a device used to move injured workers. Procurement of an adequate safety skip had been a source of controversy between the workers and management for several months. The meeting generated a heated discussion. Field Superintendent Buffington came from his adjacent office and interrupted the meeting, telling the group in an annoyed tone that he was "tired of hearing all this commotion about safety and especially about this safety skip," that dissatisfied employees should "talk to the steward about it," and that anyone who did not like that procedure could "pick up their checks."2 The meeting broke up when Buffington finished his remarks.
6
After the meeting, the mud crew reported for its concrete pour for the day. On arriving at the jobsite, the men discovered that the forms were not yet finished, lacking safety handrails and ladders and fully capped rebars. The crew refused to begin the pour because the forms appeared both incomplete and unsafe. They reported the problem to the safety officer and waited for the forms to be completed, ignoring instructions from Quality Control Supervisor Lewis that Buffington wanted them to start work.3 The crew began the pour after lunch, but met with further difficulties when several pieces of equipment, the tremie chute carrying the concrete and two of the three vibrators used to prevent separation and air pocket formation, broke down.
7
The forms were removed two days later, on August 17, revealing serious deficiencies in the concrete structure including rock pockets and holes. The flaws in the pour were immediately reported to jobsite supervisors. That afternoon, the entire mud crew save the foreman received termination notices. Each notice stated that the worker to whom it was issued "does not work to our satisfaction."4 On receiving the notices, the crew members assembled at Buffington's office to protest their discharges. Although admitting the poor quality of the August 15 vibration work, they argued that the flaws were not their fault but were largely due to machine deficiencies and breakdowns. Two of them also objected that four of the workers discharged had not been engaged in any work related to vibration at the August 15 pour. Buffington told the crew that the poor quality of the August 15 vibration work was the reason for their discharges. Three employees testified that when pressed Buffington said further that an additional reason for their discharges was their complaints about safety.5
8
The crew members filed grievances with their union and unfair labor practice charges with the federal and state agencies. The Board issued a complaint against Zurn alleging violations of Section 8(a)(1) of the Act. An administrative law judge (ALJ) heard the evidence and concluded that the General Counsel had failed to prove that the crew had been discharged for engaging in the protected activity of expressing safety concerns. The Board reviewed the record de novo and found that Buffington's remarks at the August 15 safety meeting threatened employees with discharge for engaging in protected activities relating to job safety, and that the General Counsel had made a prima facie showing that the motive for the crew's discharge was its complaints about safety. The Board went on to find that the asserted reason for the discharge based on the unsatisfactory work of the crew was a pretext, and that a violation of Section 8(a)(1) had therefore been proved.
9
We must enforce the Board's order if the Board correctly applied the law and if its findings are supported by substantial evidence on the record viewed as a whole. NLRB v. Nevis Industries Inc., 647 F.2d 905, 908 (9th Cir. 1981). Our review therefore entails a two-step process: did the Board apply a correct rule, and does substantial evidence support its order.
A. The Board's Standard for Causation
10
This case again brings before the court the recurring problem of mixed, dual or pretextual motive discharges.6 In its recent decision in Wright Line, a Division of Wright Line, Inc., 251 N.L.R.B. No. 150 (1980), the Board sought to end the confusion generated by the use of a variety of tests for gauging the lawfulness of such discharges. See Western Exterminator Co. v. NLRB, 565 F.2d 1114, 1118 (9th Cir. 1977). It rejected both the "in part" test, under which the General Counsel had only to show the presence of a prohibited motive, and the "dominant motive" test requiring proof that an unlawful motive was the motivating cause for discharge. Taking its lead from the Supreme Court's decision in Mt. Healthy City School District Bd. of Education v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977),7 the Board developed a two-part test.8 Under that test, the General Counsel has the initial burden of proving that protected activity was a substantial factor in bringing about the discharge. Once the General Counsel has made this prima facie case, the burden shifts to the employer to prove, as an "affirmative defense," that the decision would have been the same in the absence of the protected activity.
11
This court has previously approved the Wright Line standard in NLRB v. Nevis Industries, Inc., supra; see also Doug Hartley Inc. v. NLRB, 669 F.2d 579, 580-81 (9th Cir. 1982); and Lippincott Industries, Inc. v. NLRB, supra, 661 F.2d at 115.9 Recent decisions by the First and Third Circuits raise a question, however, whether the test as formulated in Wright Line is entirely consistent with the Act. NLRB v. Wright Line, a Division of Wright Line, Inc., 662 F.2d 899 (1st Cir. 1981), cert. denied, --- U.S. ----, 102 S.Ct. 1612, 71 L.Ed.2d 848 (1982) (enforcing the Board's Wright Line decision); Behring International Inc. v. NLRB, 675 F.2d 83, 93 Lab.Cas. (CCH) P 13,392 (3rd Cir. 1982) (remanding to the Board for further consideration). Contra, NLRB v. Fixtures Manufacturing Corp., 669 F.2d 547, 550 & n.4 (8th Cir. 1982) (disagreeing with First Circuit's criticisms). Specifically, the First and Third Circuit decisions approved the Board's adoption of a "but for" test patterned on the reasoning of Mt. Healthy, but rejected the Board's procedural framework which shifts to the employer the burden of proving good cause. Both courts expressed concern that the Board's burden-shifting approach violates Section 10(c) of the Act in two ways: by placing a burden of proof on the employer when it should be entirely on the General Counsel,10 and by allowing the General Counsel to prevail on the strength of a prima facie case should the employer fail to sustain its burden of proving its affirmative defense.11 To meet these concerns, these courts looked to the Supreme Court's decision in a Title VII discrimination case, Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), decided after the Board's Wright Line decision, and found the approach there taken more appropriate for mixed motive cases than the Mt. Healthy approach. Under Burdine, after the plaintiff has made a prima facie showing of wrongful conduct, the burden of production, not persuasion, shifts to the defendant. Once the defendant comes forward with evidence of a legitimate reason for its conduct, the burden shifts back to the plaintiff to prove that the defendant's proffered reason was not a "true" reason for the questioned action; that burden then merges with the ultimate statutory burden of persuasion.
12
We must accept the Board's Wright Line rule if it is a reasonably defensible interpretation of the Act consistent with its purposes, Ford Motor Co. v. NLRB, 441 U.S. 488, 496-97, 99 S.Ct. 1842, 1848-49, 60 L.Ed.2d 420 (1979); NLRB v. Local 103 International Association of Iron Workers, 434 U.S. 335, 350-51, 98 S.Ct. 651, 660-61, 54 L.Ed.2d 586 (1978); NLRB v. Nevis Industries, supra, 647 F.2d at 909. Although the Burdine approach would be a permissible implementation of the Act's purposes, we conclude that the Mt. Healthy approach used in the Board's Wright Line decision is within the Board's authority to adopt. We find support for that conclusion in the legislative history of the 1947 amendments to the Act. While the First Circuit read that history as "inconclusive" on the issue of burden of proof, NLRB v. Wright Line, supra, 662 F.2d at 904, n.8,12 the Board, and commentators, have read it as reflecting an intention to place a burden of proof on the employer. Wright Line, a Div. of Wright Line, Inc., supra, 251 N.L.R.B. at 1088; Brodin, The Standard of Causation in the Mixed Motive Title VII Action: A Social Policy Perspective, 82 Columbia L.Rev. 293, 297-98 n.6 (1982); DuRoss, Toward Rationality in Discriminatory Discharge Cases: The Impact of Mt. Healthy Board of Education v. Doyle upon the NLRA, 66 Georgetown L.Rev. 1109, 1123 n.69 (1978). We see no need to fathom the Congressional intent; it is sufficient for our present purposes if the history does not foreclose a legislative purpose to place on the employer the burden of proving the presence of a legitimate cause. If that is the case, then the Board's interpretation cannot be rejected. With that background, we turn to the legislative history.
13
The "discharge for cause" language was added to Section 10(c) by the 1947 Taft-Hartley amendments.13 The bill introduced by Congressman Hartley and passed by the House of Representatives on April 10, 1947, had placed the burden of proving the absence of a legitimate cause for discharge on the General Counsel as follows:
14
No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, unless the weight of the evidence shows that such individual was not suspended or discharged for cause.
15
H.R. 3020, 80th Cong., 1st Sess. 39 (1947), reprinted in 1 NLRB, Legislative History of the Labor Management Relations Act of 1947 (hereinafter "Legislative History") at 31, 69 and at 158, 196 (1947) (emphasis added). The Senate amendments to the House bill omitted such a provision altogether. S. 1126, 80th Cong., 1st Sess. 28 (1947), reprinted in 1 Legislative History 99, 126; H.R. 3020 as passed Senate, 80th Cong., 1st Sess. 96, reprinted in 1 Legislative History 226, 254. A joint conference drafted a compromise version of the bill, passed by both houses of Congress in June, 1947, which deleted the "weight of the evidence" language quoted above and cast the standard in affirmative rather than negative terms:
16
No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, if such individual was suspended or discharged for cause.
17
H.R.Rep.No.510, 80th Cong., 1st Sess. 13 (1947), reprinted in 1 Legislative History 505, 517 (emphasis added). The House Conference Committee report explained these revisions as follows:The House bill also included, in section 10(c) of the amended act, a provision forbidding the Board to order reinstatement or back pay for any employee who had been suspended or discharged unless the weight of the evidence showed that the employee was not suspended or discharged for cause. The Senate amendment contained no corresponding provision. The conference agreement omits the "weight of evidence" language, since the Board, under the general provisions of section 10, must act on a preponderance of evidence, and simply provides that no order of the Board shall require reinstatement or back pay for any individual who was suspended or discharged for cause. Thus employees who are discharged or suspended for interfering with other employees at work, whether or not in order to transact union business, or for engaging in activities, whether or not union activities, contrary to shop rules, or for Communist activities, or for other cause (see Wyman-Gordon v. N.L.R.B., 153 Fed. (2) 480), will not be entitled to reinstatement. The effect of this provision is also discussed in connection with the discussion of section 7.
18
H.R.Rep.No.510, 80th Cong., 1st Sess. 55 (1947), reprinted in 1 Legislative History 505, 559 (emphasis added).
19
In the Senate debate on the conference report, Senator Pepper of Florida, who opposed the legislation, and Senator Taft of Ohio, who favored it, discussed this provision.14 Pepper expressed concern that the conference version placed on the General Counsel the burden of proving that the employee was not discharged for cause. He pointed out that the House bill had clearly placed that burden on the employee, i.e., the General Counsel. The conferees' deletion of the phrase "weight of the evidence," he argued, served only to eliminate a redundancy with regard to the nature of the burden of proof while preserving the House's intent with respect to its allocation. Taft, while agreeing that the original House bill did intend to shift to the General Counsel the burden of proving lack of cause, pointed out that that language had been taken out. He argued that the conference version simply left the burden of proving a legitimate cause for discharge with the employer where, according to Taft, it had always been.15 The conference version was then adopted by the Senate.
20
The only other explicit mention of burden of proof allocation to be found in the legislative history is in Senator Ball's remarks urging override of President Truman's veto of the Taft-Hartley amendments. Ball, too, read Section 10(c) as preserving a preexisting rule that the employer had the burden of proving its legitimate motive for discharge:
21
(There) is an explicit provision inserted in the bill in conference, saying that if the employer proves to the satisfaction of the Board that he discharged an employee for cause, he cannot be held guilty of an unfair-labor practice in discharging him. That is exactly the rule which the courts now require the National Labor Relations Board to follow. In other words, if the National Labor Relations Board finds that an employer discharged an employee for cause, they cannot find him guilty of an unfair-labor practice, and it is up to the Board to make the decision.
22
93 Cong.Rec. 7523, 7529 (1947), reprinted in 2 Legislative History 1629, 1640 (emphasis added).
23
This history, although not conclusive, places a sufficient gloss on Section 10(c) to sustain the Board's Wright Line rule. It shows that those who successfully advocated passage of the Taft-Hartley amendments over generally pro-labor opposition did so in part at least on the strength of the argument that the burden of proving good cause for discipline would remain on the employer. The Board's rule, of course, does not relieve the General Counsel of its burden of proving an unfair labor practice by a preponderance of the evidence. See, Wright Line, a Div. of Wright Line, Inc., supra, 251 N.L.R.B. at 1088, n.11 (quoted in note 10, supra ). But it does provide a "formal framework" for establishing legitimate justification, which the Board described as follows:
24
Under the Mt. Healthy test, the aggrieved employee is afforded protection since he or she is only required initially to show that protected activities played a role in the employer's decision. Also, the employer is provided with a formal framework within which to establish its asserted legitimate justification. In this context, it is the employer which has "to make the proof." Under this analysis, should the employer be able to demonstrate that the discipline or other action would have occurred absent protected activities, the employee cannot justly complain if the employer's action is upheld. Similarly, if the employer cannot make the necessary showing, it should not be heard to object to the employee's being made whole because its action will have been found to have been motivated by an unlawful consideration in a manner consistent with congressional intent, Supreme Court precedent, and established Board processes.
251 N.L.R.B. at 1089.16
B. Sufficiency of the Evidence
25
Having concluded that the Board applied a correct legal standard in the instant case,17 we turn to the Board's factual findings. Our review is limited to a determination whether the Board's finding that Zurn discharged the six employees because of their safety-related actions is supported by substantial evidence on the record considered as a whole, 29 U.S.C. § 160(e); Universal Camera Corporation v. NLRB, 340 U.S. 474, 490-91, 71 S.Ct. 456, 465-66, 95 L.Ed. 456 (1951). The record to be considered includes the ALJ's findings, and the Board's reversal of the ALJ's decision requires that our review be more searching. Doug Hartley, Inc. v. NLRB, supra, 669 F.2d at 581.
26
The quantum of evidence required to support the Board's decision is greater when the ALJ, on the basis of the witnesses' demeanor, made credibility determinations contrary to those of the Board. Penasquitos Village, Inc. v. NLRB, 565 F.2d 1074, 1078 (9th Cir. 1977). In Penasquitos, this court drew a distinction between credibility determinations based on the observed demeanor of the witnesses and inferences drawn from the evidence itself. While the ALJ's ability to observe at first hand the witnesses' demeanor entitles his credibility determinations to deference, the Board's experience and expertise require that deference be given the derivative inferences it draws from the evidence.
27
In this case, the Board departed from the ALJ's decision in both respects. The Board accepted the testimony of the mud crew respecting the reasons given by Buffington for the discharge which the ALJ had rejected on considerations of "demeanor and fervor." The ALJ's rejection of the testimony, however, is entitled to little deference since the testimony is unrefuted. Buffington, though available, was not called by Zurn as a witness.
28
The Board and the ALJ also differed on the inferences to be drawn from the evidence respecting the motive for the discharges. The ALJ found the General Counsel's interpretation of the events to be improbable, holding that Zurn's justified dissatisfaction with the admittedly poor quality of the pour fully explained the discharges. The Board, on the other hand, concluded that the conflicting explanations for the discharges given by Zurn's witnesses, the lack of involvement of some of the discharged men in the pour work, Zurn's own responsibility for inoperable equipment, the failure to discharge the responsible working foreman, and the generally satisfactory work of the crew supported the inference that the asserted reason for the discharge was a pretext. Considering the record as a whole, we conclude that there was substantial evidence to support the Board's decision.
29
Zurn advances several other arguments criticizing the Board's order. Zurn contends that the Department of Labor, not the NLRB, has exclusive jurisdiction over employee safety matters. This argument is without merit. The Board has jurisdiction to investigate unfair labor practices, which include discharges based on protected activity such as voicing safety complaints; that the employees may also have had other rights or remedies under the Occupational Health and Safety Act does not divest the Board of jurisdiction. See, e.g., Whirlpool Corp. v. Marshall, 445 U.S. 1, 17-18 n.29, 100 S.Ct. 883, 893-94 n.29, 63 L.Ed.2d 154 (1980). Zurn also argues that a grievance settlement made after the discharge should be given great weight. While private grievance and arbitration procedures are preferred methods of resolving labor disputes, the Board may in its discretion choose not to defer to such settlements if, in its judgment, the public interest would not be served by doing so. See, Carey v. Westinghouse Electric Corp., 375 U.S. 261, 270-71, 84 S.Ct. 401, 408-09, 11 L.Ed.2d 320 (1974). Finally, Zurn argues that Buffington's remarks are free speech protected by the First Amendment and the Act. This argument is frivolous. Neither the Constitution nor the Act are meant to shield employers from unlawfully threatening discharge.
30
The petition for review is denied. The Board's order is affirmed and will be enforced.
*
The Honorable William W. Schwarzer, United States District Judge for the Northern District of California, sitting by designation
1
The act states in relevant part:
It shall be an unfair labor practice for an employer-
(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7 (29 U.S.C. § 157)....
29 U.S.C. § 157 states in relevant part:
Employees shall have the right to self-organization, ... and to engage in other concerted activities for the purpose of ... mutual aid or protection....
2
Witnesses testified differently as to the scope of Buffington's remarks. Kissler and Wells of the mud crew and Safety Supervisor Seaman testified that Buffington expressed annoyance with employee complaints about the safety skip; crew members Stedham and Pendergrass testified that Buffington's remarks encompassed safety matters beyond the skip. Buffington was not called by Zurn as a witness, nor was he questioned about his comments at the safety meeting when called as an adverse witness by the General Counsel
3
While the Administrative Law Judge found that there was no evidence that Buffington knew of the crew's refusal to begin work, the Board concluded otherwise
4
There was conflicting evidence as to who made the termination decision. Project manager Stamp and Buffington testified that the decision was solely Stamp's; yet in his affidavit Buffington averred that he alone had made the decision, without consulting Stamp. There also was testimony that management offered different reasons for the discharges, one being poor vibration at the August 15 pour, and others being bad pours on August 3, 12, 15, 16, and 17
5
Crew member Wells testified that Buffington referred to complaints "about the project site, about the safety skip ... and just general complaints." Crew members Jones and Pendergrass testified that Buffington specifically referred to employee "commotion" and "complaints" about safety
6
The distinction between pretextual and dual or mixed motive discharges is irrelevant for purposes of this analysis. See, Lippincott Industries, Inc. v. NLRB, 661 F.2d 112, 114-15 (9th Cir. 1981)
7
In Mt. Healthy, plaintiff, an untenured school teacher, alleged that the school board's refusal to renew his contract violated his rights under the First and Fourteenth Amendments. The school board's action had been based on two grounds: (1) plaintiff's release to a radio station of an internal memorandum, which was clearly protected activity, and (2) his use of obscene language and gestures, which was not protected. The lower courts held that since protected activity played a substantial part in the school board's decision, plaintiff was entitled to reinstatement. The Supreme Court reversed, stating that the rule of causation used by the lower courts "could place an employee in a better position as a result of the exercise of constitutionally protected conduct than he would have occupied had he done nothing." 429 U.S. at 285, 97 S.Ct. at 575. It went on to hold as follows:
Initially, in this case, the burden was properly placed upon respondent to show that his conduct was constitutionally protected, and that this conduct was a "substantial factor"-or, to put it in other words, that it was a "motivating factor" in the (school) Board's decision not to rehire him. Respondent having carried that burden, however, the District Court should have gone on to determine whether the (school) Board had shown by a preponderance of the evidence that it would have reached the same decision as to respondent's reemployment even in the absence of the protected conduct.
429 U.S. at 287, 97 S.Ct. at 576.
8
The Board stated:
(We) shall henceforth employ the following causation test in all cases alleging violation of Section 8(a)(3) or violations of Section 8(a)(1) turning on employer motivation. First, we shall require that the General Counsel make a prima facie showing sufficient to support the inference that protected conduct was a "motivating factor" in the employer's decision. Once this is established, the burden will shift to the employer to demonstrate that the same action would have taken place even in the absence of the protected conduct.
Wright Line, A Div. of Wright Line, Inc., supra, 250 N.L.R.B. at 1089.
9
Other courts of appeal have approved the Wright Line rule, although the First and Third Circuit courts alone have written at length on the rule and its ramifications
The Second Circuit has not examined the burden shifting part of the Wright Line rule, although it has accepted the Wright Line decision's definition of pretextual justification, NLRB v. Charles Batchelder Co., Inc., 646 F.2d 33, 39 (2nd Cir. 1981).
The Fourth Circuit, in a recent dual motive case, found it unnecessary to decide whether the Wright Line rule was an appropriate one. NLRB v. Burns Motor Freight, Inc., 635 F.2d 312, 315 (4th Cir. 1980).
The Fifth Circuit recited the Wright Line rule without comment in NLRB v. Robin American Corporation, 654 F.2d 1022, 1025 (5th Cir. 1981), and in NLRB v. Charles H. McCauley Associates, Inc., 657 F.2d 685, 688 (5th Cir. 1981). In Red Ball Motor Freight, Inc. v. NLRB, 660 F.2d 626, 627-28 (5th Cir. 1981), cert. denied, --- U.S. ----, 102 S.Ct. 2282, 72 L.Ed.2d ---- (1982), it approved of the rule, rejecting without analysis an employer's challenge to the rule's burden shifting.
The Sixth Circuit specifically approved the Wright Line burden shifting rule in Borel Restaurant Corporation v. NLRB, 676 F.2d 190 (6th Cir. 1982). The Wright Line rule was cited with approval in NLRB v. Consolidated Freightways Corp., 651 F.2d 436, 437-38 (6th Cir. 1981), in NLRB v. Allen's I. G. A. Foodliner, 651 F.2d 438, 441 (6th Cir. 1981), in NLRB v. Lloyd A. Fry Roofing Co., Inc., of Delaware, 651 F.2d 442, 446 (6th Cir. 1981), and in Charge Card Association v. NLRB, 653 F.2d 272, 275 (6th Cir. 1981).
The Seventh Circuit mentioned Wright Line in Sullair P. T. O., Inc. v. NLRB, 641 F.2d 500, 504 (7th Cir. 1981), and explicitly approved the Wright Line rule in Peavey Co. v. NLRB, 648 F.2d 460, 461 (7th Cir. 1981). Accord, NLRB v. Eldorado Manufacturing Corporation, 660 F.2d 1207, 1213 (9th Cir. 1981).
The Eighth Circuit approved the Wright Line rule and rejected the First Circuit's criticisms of the burdenshifting approach in NLRB v. Fixtures Manufacturing Corp., 669 F.2d 547, 550 and n.4 (8th Cir. 1982), finding that the Board's rule was well within the latitude it should have in structuring its fact-finding process.
The Supreme Court, although aware of the conflict among the circuits, has recently declined to resolve this issue. Red Ball Motor Freight, Inc. v. NLRB, --- U.S. ----, 102 S.Ct. 2282, 72 L.Ed.2d ---- (1982) (White, J., dissenting) (denial of certiorari).
10
Section 10(c) of the Act, 29 U.S.C. § 160(c), states in relevant part:
If upon the preponderance of the testimony taken the Board shall not be of the opinion that the person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board shall state its findings of fact and shall issue an order dismissing the said complaint. No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, if such individual was suspended or discharged for cause.
The Board's Wright Line decision recognizes that the burden of persuasion should remain with the General Counsel, and attempts to resolve the apparent conflict between the Mt. Healthy rule and the statutory mandate with this footnote:
It should be noted that this shifting of burdens does not undermine the established concept that the General Counsel must establish an unfair labor practice by a preponderance of the evidence. The shifting burden merely requires the employer to make out what is actually an affirmative defense ... to overcome the prima facie case of wrongful motive. Such a requirement does not shift the ultimate burden.
251
N.L.R.B. at 1088, n. 11
11
As the court put it in Behring :
The shifting burden of persuasion undermines the "but for" test and reintroduces the confusion which Wright Line purported to eliminate. To understand why, it is only necessary to realize that in establishing a prima facie case, the General Counsel need not prove that anti-union discrimination was the "real cause" of the employee's discharge. Instead, the Wright Line procedure only requires the General Counsel to show that antiunion animus was "a" motivating factor in the employer's decision. If the employer then proffers a legitimate reason for its action, but does not do so with enough weight to carry the burden of persuasion, the Board would rule that the § 8(a) (3) charge had been proved. This would be so despite the fact that two factors-neither outweighing the other-had been advanced as causes, and the Board never determined which was the real one. As such, the procedural aspect of the rule is plainly at odds with the "but for" test.
675 F.2d at 88.
This court's opinion in Doug Hartley, Inc. v. NLRB, supra, 669 F.2d at 581 (9th Cir. 1982), appeared to adopt this approach:
Whereas previously, the General Counsel bore the burden of proving that protected union activity was the "dominant" or "moving" cause for the discharge, under Wright Line, and Nevis Industries, the General Counsel bears only the initial burden of showing that protected activity was "a motivating factor" in the discharge. The burden then shifts to the employer to prove that he would have discharged the employee absent the protected activity.
In Doug Hartley, however, the court denied enforcement on the ground that on the record as a whole there was not substantial evidence to support the Board's finding that the employer's reasons for the discharge were pretextual.
12
One judge of that court has recently asserted even more strongly that "the language of the statute as well as its legislative history seem clear .... These indicate quite clearly that the Board, not the employer, must bear the overall burden of showing a violation of the Act." NLRB v. Transportation Management Corp., 674 F.2d 130, 93 Lab.Cas. (CCH) P 13,38 5 (1st Cir. 1982) (Breyer, J., concurring)
13
See footnote 10, supra. The second sentence quoted was added by the 1947 amendments
14
Mr. PEPPER. Mr. President, turning to page 34 of the conference committee print, the conference has added the following language to the Senate bill:
No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, if such individual was suspended or discharged for cause.
That looks like a very simple and innocent provision. It may seem on its face to be a very proper provision, for it appears only to give the employer the right to discharge a worker for good reason. But this is what the provision does: Under the present law a worker may be discharged by his employer for cause, but the Board may go into the real reasons for the discharge, and if the Board finds that although cause was given as the excuse, the real reason was the fact that the worker was trying to organize a union or trying to join a union, the Board may set aside the act of the employer and require the reinstatement of the worker upon that evidence. But this language allows a worker to be discharged because of union activities, although that may be only a concurrent cause of discharge.
Mr. TAFT. Mr. President, will the Senator yield?
The PRESIDING OFFICER. Does the Senator from Florida yield to the Senator from Ohio?
Mr. PEPPER. If the Senator will allow me to finish this statement, so as to make the point clear, I shall then be glad to yield.
In other words, if an employer has been allowing workers to smoke in a prohibited area, if he has been allowing workers to show up late for work, if he has been letting them quit ahead of time at the end of the day, or violate any other rules, yet if a given employee, because he has been engaged in union activities which the employer does not like, is selected out of the crowd and discharged for violating a rule, and no one else is discharged for violating the rule, or if it can be shown that the real motivating reason which caused the employer to fire the worker was his union activities, if cause existed it would be a basis for discharge, and this provision would forbid the Board to reinstate the worker. As a practical matter, that is the effect of that language.
I now yield to the Senator from Ohio.
Mr. TAFT. I think the Senator is completely mistaken. That is not all the effect of this language. It merely states the present rule. If a man is discharged for cause, he cannot be reinstated. If he is discharged for union activity, he must be reinstated. In every case it is a question of fact for the Board to determine.
The House language provided that the burden of proof should be on the employee to show that he was not discharged for cause. The Senate conferees took the position that the question was whether he was discharged for cause, and that the burden of proving that cause should be on the employer, because the information is in his hands. So we did not accept the House provision. All this language does is simply to say exactly what the present rule is. If the Board finds that the man was discharged for cause, that is one possible outcome. If it finds that he was discharged for union activity, that is the other outcome. The Board must determine the facts in every case. For years it has had to determine in every case whether a man was discharged for cause or for union activity. In my opinion this language in no way changes the existing provision of law, after the modification which we forced in the House provision.
Mr. PEPPER. Let me comment on what the able Senator from Ohio has said. If it were not intended to change the existing law, why was anything placed in the conference report on the subject?
Mr. TAFT. Let me say why. When we have a conference with the House and the House yields on all the major points, if the House conferees want certain language in, and the language does not do any more than state the existing law, it is a little hard to refuse to put it in. That is why we put it in. For the purpose of the RECORD, I am glad to make that statement, because there is no intention whatever to change the existing law on this particular question.
Mr. PEPPER. I submit the further inquiry, Why did the House put it in?
Mr. TAFT. Mr. President, will the Senator yield?
Mr. PEPPER. Everyone knows that the House was trying to write the strongest bill it could write. Why did the House put it in if it did not intend to do something to tighten up the present law?
Mr. TAFT. When the House put it in, it wanted to shift the burden of proof to the employee. That is why it was put in.
Mr. PEPPER. Exactly.
Mr. TAFT. We said, "We will accept this language if you will eliminate the other." Naturally the House conferees wanted to show that some of the House language was preserved. In general they accepted the entire basis of the Senate bill and the Senate language. What we did here, in effect, was to say, "If you will modify the language so that it does not change the existing law, we will accept it, and you can point to it as one of the instances in which the House language instead of the Senate language was accepted."
Mr. PEPPER. We have an admission from the Senator from Ohio that the language was intended to mean something. It was intended to shift the burden of proof from the employer to the employee.
Mr. TAFT. Mr. President, will the Senator yield?
Mr. PEPPER. I yield.
Mr. TAFT. Of course, the Senator understands that that part of the House language was taken out.
Mr. PEPPER. Yes. However, I wish to quote from the conference report, and I hope Senators will attend what I am about to quote. I suggest that the result of the conference report is to leave the interpretation of the language exactly as the House intended it. Let us see if that is correct. I read from page 55 of the conference report:
(10) The House bill also included, in section 10(c) of the amended act, a provision forbidding the Board to order reinstatement or back pay for any employee who had been suspended or discharged, unless the weight of the evidence showed that the employee was not suspended or discharged for cause. The Senate amendment contained no corresponding provision. The conference agreement omits the "weight of evidence" language, since the Board, under the general provisions of section 10, must act on a preponderance of evidence, and simply provides that no order of the Board shall require reinstatement or back pay for any individual who was suspended or discharged for cause. Thus employees who are discharged or suspended for interfering with other employees at work, whether or not in order to transact union business, or for engaging in activities, whether or not union activities, contrary to shop rules, or for Communist activities, or for other cause (see Wyman-Gordon v. N. L. R. B., 153 Fed. (2) 480 (7th Cir.) ), will not be entitled to reinstatement. The effect of this provision is also discussed in connection with the discussion of section 7.
That shows that the Senate conferees agreed to the elimination of the words "weight of evidence," because they do not use those words which are necessary to accomplish the effect which the House sought to achieve. They say that under the rules of the Board itself the Board had to find by a preponderance of the evidence, and therefore there was not any need to put in the words of the House; but they do not disaffirm the purpose of the House, which the Senator from Ohio has acknowledged this afternoon.
What I am saying, Mr. President, is that if an employer has a union employee of whom he wants to get rid, all he has to do is to snoop around and find him violating some rule or regulation or prohibition, and then fire him in spite of the fact that he does not fire anyone else for the same reason; in spite of the fact that the real reason for the discharge of the worker is the fact that the employer dislikes his activities with respect to the union, which may be perfectly legal under the provisions of the bill. There, again, Mr. President, the burden of proof is shifted. In other words, instead of leaving it up to the Board to put the burden of proof on the employer, the burden of proof is put on the employee, which makes it just a little harder for the employee to get the protection that the law was intended to afford.
Again, Mr. President, I remind the Senate that that is only one single provision of the bill, although many of them are iniquitous. It is a cumulative affair. Everywhere we turn there is a dagger or a nail or a spike to be stuck into the body of labor to make it less effective in the future than it has been in the past.
Mr. TAFT. Mr. President, will the Senator yield?
Mr. PEPPER. I yield to the Senator from Ohio.
Mr. TAFT. The conference report does not quite say what the Senator from Florida suggests. The original House provision was that no order of the Board could require the reinstatement of any individual or employee who had been suspended or discharged, unless the weight of the evidence showed that such individual was not suspended or discharged for cause. In other words, it was turned around so as to put the entire burden on the employee to show he was not discharged for cause. Under provision of the conference report, the employer has to make the proof. That is the present rule and the present practice of the Board. The Board will have to determine-and it always has-whether the discharge was for cause or for union activity, and the preponderance of the evidence will determine that question. The mere fact that there may be a little cause or real reason would not in any way lead the Board to refuse to give the employee reinstatement and back pay.
Mr. PEPPER. I do not desire to prolong the argument, because I wish to conclude. I shall have to let the matter stand on the statement of the Senator from Ohio as to the intention of the House in its original bill, what I read from the report of the conferees, and the fact that the language to which I have alluded was put in the bill at all, which certainly was intended to have some effect. Here is the importance of it. It is always a difficult matter to determine the real reason of the employer in discharging a worker. There can always be found some sort of excuse if it is desired to find one. If the employer does not give the worker the benefit of the doubt he can always wait until he smokes a cigarette 3 feet before he gets out of the door, or find some error that would constitute cause. The provision shifts the burden of proof to make the worker show he was discharged for union activities, rather than to make the employer show that the worker was discharged for cause.
Bear in mind, please, this provision in relation to another which I previously discussed. That was the provision in the conference report which denies to the Board the right to consider anything the employer said in advance of the act of discharge which might have any bearing upon his reason for discharge, and keeping such statements out of evidence unless they contain not only a declaration but an actual threat, implied or expressed. Take those two provisions together, and it will be seen that they add many times to the power of the employer to discharge a worker for some reason that may be dissociated from cause or relating entirely to the exercise of the workers' rights under the law.
93
Cong.Rec. 6494, 6518-19 (1947), reprinted in 2 Legislative History 1565, 1593-95 (emphasis added)
15
Contrary to Senator Taft's statement, the pre-1947 decisions had in fact not been consistent. Some held that the Act placed the burden of proving a legitimate reason for discharge on the employer, NLRB v. Entwistle Manufacturing Co., 120 F.2d 532, 536 (4th Cir. 1941); see also NLRB v. Barrett Co., 135 F.2d 959, 962 (7th Cir. 1943) (employer bears burden of proving that strike would have taken place even if he had not refused to bargain). Some refer to an employer's burden which resembles a burden of coming forward with evidence, see Montgomery Ward and Co. v. NLRB, 107 F.2d 555, 560 (7th Cir. 1939). And some cases held that under the Act the employee (i.e., the General Counsel) bore the burden of proof, see NLRB v. Union Manufacturing Co., 124 F.2d 332, 333 (5th Cir. 1941); Martel Mills. Corp. v. NLRB, 114 F.2d 624, 632 (4th Cir. 1940), citing NLRB v. Remington Rand., Inc., 94 F.2d 862, 872 (2nd Cir. 1938). Whether Senator Taft's characterization of the law is technically correct or not, however, is not relevant since the issue of Congressional intent turns on the state of mind of the legislators who participated in or heard the debate
16
We do not interpret the Board's reference to discipline or other action which would have occurred "absent protected activities" as implying that the employer has an additional burden to prove the absence of a causal relationship between the protected activity and the discipline. The employer's burden is limited to proving the presence of an independent legitimate ground sufficient for the disciplinary action. As the Court explained in Mt. Healthy :
But that same candidate ought not to be able, by engaging in such (protected) conduct, to prevent his employer from assessing his performance record and reaching a decision not to rehire on the basis of that record, simply because the protected conduct makes the employer more certain of the correctness of its decision.
429 U.S. at 286, 97 S.Ct. at 575.
17
The Board's order states:
The Board has recently stated in Wright Line, A Division of Wright Line, Inc., 251 NLRB No. 150 (1980), that where the motivation for discharge is at issue, the General Counsel must make a prima facie showing sufficient to support an inference that protected activity by employees was a motivating factor in an employer's decision to discharge. The employer then has the burden of showing that the employees would have been discharged absent that protected activity.
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535 U.S. 1074
CURTISv.SOUTH CAROLINA ET AL.
No. 01-875.
Supreme Court of the United States.
May 13, 2002.
1
Petitions for rehearing denied.
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565 F.2d 358
COMPANIA GALEANA, S. A., Plaintiff-Appellee,v.The MOTOR VESSEL CARIBBEAN MARA, etc., et al., Defendants-Appellees,Captain Antonios Tantoulas, master of S. S. FLORIDA STATE,Claimant-Appellant.
No. 77-2269
Summary Calendar.*
United States Court of Appeals,Fifth Circuit.
Jan. 3, 1978.
Dionysios Spyronoulas, New York City, for claimant-appellant.
Donald A. Gifford, Tampa, Fla., Brendan P. O'Sullivan, Tampa, Fla., for Compania Galeana, S. A.
Appeal from the United States District Court for the Middle District of Florida.
Before THORNBERRY, RONEY and HILL, Circuit Judges.
PER CURIAM:
1
On February 27, 1974, the S.S. FLORIDA STATE, en route from Tampa, Florida, to Tampico, Mexico, sighted the abandoned M/V CARIBBEAN MARA ablaze on the high seas. The FLORIDA STATE's crew boarded the vessel, extinguished the fires, and towed her back to Tampa.
2
Captain Antonios Tantoulas, the master of the FLORIDA STATE, appeals a court-approved salvage settlement, contending that the settlement, having been approved without his consent, is not binding upon him; that the settlement, the crew's allotment, and his share are inadequate; and that his attorney should have been awarded a fee. The appellant having failed to submit any evidence or to contest the settlement in the district court, his attorney having done nothing but file an appearance, we affirm.
3
Almost a year after the salvage, the owner of the FLORIDA STATE (Compania Galeana, S.A.), filed a complaint in rem in the district court against the CARIBBEAN MARA and her cargo. Both the vessel and the cargo filed answers.
4
On July 2, 1976, the district court approved a $10,000 settlement between Galeana and the vessel, leaving open the cargo claim. On the same day an attorney for Captain Tantoulas, the master of the FLORIDA STATE, filed a document entitled, "Notice of Appearance for Claimant to the Res," which simply requested the clerk to enter the attorney's appearance in the case. This notice was the only document filed by Captain Tantoulas in this case through the date of trial.
5
The cargo case was scheduled to go to trial during the week beginning February 14, 1977. A copy of the trial order was sent to Captain Tantoulas' attorney. Subsequently, Galeana and the cargo negotiated a settlement. A copy of the motion for approval was mailed to Captain Tantoulas' attorney on February 16.
6
The motion was heard on February 27. Neither Captain Tantoulas nor his attorney appeared. The settlement was argued and approved. On March 4 the district court ordered that portion of the settlement fund awarded to the master, officers, and crew of the FLORIDA STATE be proportionally distributed according to monthly base wage. Captain Tantoulas thereupon appealed.
7
A salvage settlement between the salvor shipowner and the owners of the salved vessel and cargo cannot bind the salvor crew without their consent. The Neptune, 277 F. 230, 232 (2d Cir. 1921); Sobonis v. Steam Tanker National Defender, 298 F.Supp. 631, 637-638 (S.D.N.Y.1969). Captain Tantoulas, however, was aware of the settlement several days before its approval. He does not allege that he was unaware of the settlement's terms or the fact that it included his claim. Yet he neither filed an objection to the settlement nor appeared at the hearing to oppose it. From the record it does not appear that either Captain Tantoulas or his attorney was dissatisfied with the settlement until the release of the district court's March 4 order. The district court has never yet been informed that the Captain did not consent to the settlement. Under these circumstances, there appears to have been passive approval of the settlement which would prevent Captain Tantoulas from attacking the order approving it on the ground that he had not consented.
8
In any event, appellate courts will not disturb a salvage award unless it is based on erroneous principles or a misapprehension of the facts or is so grossly excessive or inadequate as to be deemed an abuse of discretion. Oelwerke Teutonia v. Erlanger, 248 U.S. 521, 39 S.Ct. 180, 63 L.Ed. 399 (1919); Norris, The Law of Salvage, § 311, at 464 (1958); 1 Norris, The Law of Seamen § 235, at 315 (3d ed. 1976).
9
Appellant makes no showing on this record that any of these standards has been violated. The proportional distribution based on the wages of each crew member is a generally accepted means of distributing a salvage award fairly. Norris, The Law of Salvage § 284, at 430-431 (1958).
10
The granting of attorney's fees is discretionary in admiralty actions, see Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962), and in salvage cases specifically, Conolly v. S.S. Karina II, 302 F.Supp. 675 (E.D.N.Y.1969). Since the record reveals that counsel for appellant filed no pleadings and did not participate in the trial, there is no basis for finding an abuse of discretion in failing to award attorney's fees to appellant's counsel.
11
AFFIRMED.
*
Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I
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316 U.S. 527 (1942)
HELVERING, COMMISSIONER OF INTERNAL REVENUE,
v.
CEMENT INVESTORS, INC.[*]
No. 644.
Supreme Court of United States.
Argued April 27, 1942.
Decided June 1, 1942.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE TENTH CIRCUIT.
*528 Assistant Attorney General Clark, with whom Solicitor General Fahy and Messrs. Sewall Key, J. Louis Monarch, and Samuel H. Levy were on the briefs, for petitioner.
Mr. Stephen H. Hart, with whom Mr. James B. Grant was on the brief, for respondent in No. 644. Mr. Richard M. Davis for respondents in Nos. 645 and 646.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
The issue presented by these cases is whether, under § 112(b)(5) of the Revenue Act of 1936 (49 Stat. 1648, *529 1678, 26 U.S.C. § 112 (b) (5)), the gain of the taxpayers from the transactions in question should be recognized.
The taxpayers owned first mortgage bonds of Colorado Industrial Co., which was a wholly-owned subsidiary of the Colorado Fuel and Iron Co. The bonds were guaranteed both as to principal and interest by the parent company. After defaults on these bonds, and on other bonds issued by the parent company, each company filed a petition under § 77B of the Bankruptcy Act. A plan of reorganization was formulated by committees of the security holders. It provided for the formation of a new company, to which all the assets of the two debtor companies would be transferred. The new company would assume the obligations of the bonds of the old parent company, Colorado Fuel and Iron Co., and issue income bonds and common stock in exchange for the bonds of the old subsidiary company, Colorado Industrial Co. The stockholders of the debtor companies would receive no interest in the new company; but in exchange for their stock they would receive warrants for the purchase of shares of the new company. Approval of the plan by the requisite percentage of security holders was obtained. The plan was confirmed by the court in April, 1936, and was duly consummated as follows: The debtor companies, the bankruptcy trustee, and the trustee under the indenture securing the bonds of the old subsidiary company, conveyed the assets of the debtors to the new company. The new securities were issuable to, or on the order of, the reorganization managers, who were acting, as stated in the plan, as "agents" of the security holders. The reorganization managers effected an exchange of the old securities for the new on or about September 1, 1936. Immediately after the consummation of the plan, all of the issued shares of the new company (552,660 shares of common, out of an authorized issue of 1,000,000 shares) belonged to the former holders of the bonds of the old subsidiary company. No stock was issued *530 by the new company to other parties until October, 1936, when 37 shares were issued on exercise of the warrants. By June, 1938, only 465 shares had been issued to holders of the warrants.
Each of the taxpayers in these cases exchanged his Colorado Industrial Co. bonds for income bonds and common stock of the new company In each case, the fair market value of the new securities exceeded the basis of the old. The Commissioner determined deficiencies on the ground that the profit from the exchange was a taxable gain. The Board of Tax Appeals held for the taxpayers. See 42 B.T.A. 473. The Circuit Court of Appeals affirmed (122 F.2d 380, 416), holding, inter alia, that the exchange met the requirements of § 112 (b) (5). We granted the petitions for certiorari because the application of § 112 (b) (5) to receivership or bankruptcy reorganizations raised important problems in the administration of the income tax law.
It is plain from Helvering v. Southwest Consolidated Corp., 315 U.S. 194, which involved identical definitions of the term "reorganization" as are involved here, that this transaction does not meet the requirements of § 112 (g) (1) (B) of the 1936 Act.[1] The assets of the old companies were not acquired in exchange "solely" for voting stock of the new company, since income bonds and warrants were also issued. It is also clear that the requirements of § 112 (g) (1) (C) were not satisfied, since clause C "contemplates that the old corporation or its stockholders, rather than its creditors, shall be in the dominant position of *531 `control' immediately after the transfer and not excluded or relegated to a minority position." Id., p. 202. But it does not necessarily follow that § 112 (b) (5) is inapplicable. Sec. 112 (b) (5) provides:
"No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock or securities in such corporation, and immediately after the exchange such person or persons are in control of the corporation; but in the case of an exchange by two or more persons this paragraph shall apply only if the amount of the stock and securities received by each is substantially in proportion to his interest in the property prior to the exchange."
"Control" is defined in § 112 (h) to mean
"the ownership of stock possessing at least 80 per centum of the total combined voting power of all classes of stock entitled to vote and at least 80 per centum of the total number of shares of all other classes of stock of the corporation."
If it may be said that property was transferred by the bondholders to the new corporation, then the other requirements of § 112 (b) (5) were satisfied. For the bondholders, as owners of all of the outstanding shares of the new corporation, were in "control" of it "immediately after the exchange." And it has not been disputed that the stock and income bonds acquired by each bondholder were substantially in proportion to his interest in the assets of the debtor companies prior to the exchange. Petitioner, however, maintains that the only transfer within the meaning of § 112 (b) (5) was effected by the debtor companies, the bankruptcy trustee, and the indenture trustee; and that the exchange of the bonds for the new securities was merely part of the mechanics for consummation of the plan, and not an exchange by which "property" was *532 transferred to the new corporation. Though we agreed with the latter proposition, it would not necessarily follow that the requirements of § 112 (b) (5) were not met.
In case of reorganizations of insolvent corporations, the creditors have the right to exclude the stockholders entirely from the reorganization plan. When the stockholders are excluded and the creditors of the old company become the stockholders of the new, "it conforms to realities to date their equity ownership" from the time when the processes of the law were invoked "to enforce their rights of full priority." Helvering v. Alabama Asphaltic Limestone Co., 315 U.S. 179. Under that approach, the ownership of the equity in these debtor companies effectively passed to these creditors at least when § 77B proceedings were instituted. But however their interest in the property may be described, it clearly was an equitable claim in or to it. It was that equitable interest with which the plan dealt. The transfer of the properties of the debtor companies to the new corporation was made pursuant to that plan. The plan was approved by the requisite percentage of these creditors, as required by § 77B (e) (1) of the Bankruptcy Act. Thus it is fair to say that the property transferred was property in which the creditors had an equitable interest, and that the transfer was made with their authority and on their behalf. Certainly, "property," as used in § 112 (b) (5), includes such an interest in property. And we see no reason to conclude that a beneficial owner of, or equitable claimant to, property is precluded from consummating an exchange which qualifies under § 112 (b) (5) merely because the actual conveyance is made by his trustee or title holder. In situations comparable to this one, the Board of Tax Appeals has held that § 112 (b) (5) is applicable. Leckie v. Commissioner, 37 B.T.A. 252; Miller & Paine v. Commissioner, 42 B.T.A. 586. Cf. Rockford Brick & Tile Co. v. Commissioner, 31 B.T.A. 537. We accept its view.
*533 The legislative history of § 112 (b) (5) supports that conclusion. Sec. 112 (b) (5) and the "reorganization" provisions are rather closely related. See Miller, Hendricks, and Everett, Reorganizations and Other Exchanges in Income Taxation (1931), ch. 6. While the "reorganization" provisions are restricted to inter-corporate transactions, § 112 (b) (5) is not so confined, since the phrase "one or more persons" includes "individuals, trusts or estates, partnerships and corporations." Treasury Reg. 94, Art. 112 (b) (5)-1. But there is no indication that the "reorganization" provisions were designed as the exclusive method of deferring recognition of gain or loss in all cases of corporate readjustments or reorganizations. The history of § 112 (b) (5) makes clear that it too was designed to function in that field (American Compress & Warehouse Co. v. Bender, 70 F.2d 655, 657-658) and to permit deferment of gains or losses where "there has been a mere change in the form of ownership" or where the taxpayer has not "closed out a losing venture." Portland Oil Co. v. Commissioner, 109 F.2d 479, 488. Sec. 112 (b) (5) derives from § 202 (c) (3) of the 1921 Act. 42 Stat. 229, 230. Its legislative history shows that it was designed to permit "readjustments"[2] without present recognition of gain or loss by allowing property to be transferred to a controlled corporation by an individual, a partnership, a corporation, or others.[3] See Hearings, Senate Committee on Finance, Proposed Revenue Act of 1921, 67th Cong., 1st Sess., May 9-27, 1921, pp. 536-537, 546, 557-558; Magill, Taxable Income (1936), pp. 123-131. *534 If a transaction meets the requirements of § 112 (b) (5), the basis of the property in the hands of the acquiring corporation is the same as it would be in the hands of the transferor. § 113 (a) (8). See P.A. Birren & Son, Inc. v. Commissioner, 116 F.2d 718. A similar result obtains in case of a transaction which qualifies as a "reorganization." See § 113 (a) (7) (B). And the theory underlying the two basis provisions is the same. Miller, Hendricks, and Everett, op. cit., pp. 304, 404; S. Rep. No. 398, 68th Cong., 1st Sess., Committee Reports on the Revenue Acts, 1913-1938, Int. Rev. Bull., pp. 278-279. The close relationship between § 112 (b) (5) and the "reorganization" provisions is further evidenced by the fact that they overlap to a degree. Thus, a transaction which meets the requirements of clause B or clause C of § 112 (g) (1) may also qualify under § 112 (b) (5). In short, the "reorganization" provisions do not furnish the exclusive methods for securing a deferment of gains or losses arising out of transactions popularly known as corporate readjustments or reorganizations. The instant transaction comes fairly within the family of business readjustments for which § 112 (b) (5) was designed. Hence the fact that it cannot meet the statutory standards of a "reorganization" does not necessarily mean that it cannot qualify as an "exchange," any more than the failure to satisfy one clause of the "reorganization" provisions means that none can be satisfied.
But the argument seems to be that, even though there was an "exchange" which met the requirements of § 112(b) (5), there was nevertheless a gain which is taxable. That gain, it is suggested, arose from the acquisition by the taxpayers of their equitable interest in the properties in substitution for their old bonds. And it is argued that, unlike the situation which obtains under the "reorganization" provisions (Helvering v. Alabama Asphaltic Limestone Co., supra), § 112 (b) (5) covers only the exchange itself *535 and not the antecedent steps in connection with a plan of reorganization. Thus the contention seems to be that, since a gain arose from a transaction which was separate and distinct from and anterior to the exchange of property for the new securities, it must be recognized under the general rule of § 112 (a). We express no view on that contention. The deficiencies were not assessed on that transaction but only upon the exchange of stock and securities in the new corporation for bonds of the old. We will not consider here for the first time the question whether a tax liability may have been incurred under § 112 (a) by reason of the earlier transaction, a question not fairly within the issues as framed by the Commissioner and hence not decided below. Cf. Helvering v. Wood, 309 U.S. 344, 349.
Affirmed.
NOTES
[*] Together with No. 645, Helvering, Commissioner of Internal Revenue, v. James Q. Newton Trust, and No. 646, Helvering, Commissioner of Internal Revenue, v. Newton, also on writs of certiorari, 315 U.S. 825, to the Circuit Court of Appeals for the Tenth Circuit.
[1] In Helvering v. Southwest Consolidated Corp., supra, no question as to the applicability of § 112 (b) (5) was involved. The only question raised or considered by the Board or the Circuit Court of Appeals, or passed on by this Court, was whether or not the transaction in question qualified as a "reorganization" under § 112 (g) (1) of the 1934 Act.
[2] H. Rep. No. 350, 67th Cong., 1st Sess.; S. Rep. No. 275, 67th Cong., 1st Sess., Committee Reports on the Revenue Acts, 1913-1938, Int. Rev. Bull., pp. 175-176, 188-189.
[3] For the result which would otherwise obtain in such situations, see Insurance & Title Guarantee Co. v. Commissioner, 36 F.2d 842, and cases cited.
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FILED
NOT FOR PUBLICATION DEC 21 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
GUSTAVO PEREZ HERNANDEZ, No. 10-73136
FRANCISCA JERONIMA BALTAZAR,
Agency Nos. A073-419-233
Petitioners, A095-599-971
v.
MEMORANDUM *
ERIC H. HOLDER, Jr., Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted December 19, 2012 **
Before: GOODWIN, WALLACE, and FISHER, Circuit Judges.
Gustavo Perez Hernandez and Francisca Jeronima Baltazar, natives and
citizens of Guatemala, petition for review of the Board of Immigration Appeals’
order dismissing their appeal from the immigration judge’s decision denying their
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
application for asylum, withholding of removal, and relief under the Convention
Against Torture (“CAT”). We have jurisdiction under 8 U.S.C. § 1252. We
review for substantial evidence factual findings. Gonzalez-Hernandez v. Ashcroft,
336 F.3d 995, 998 (9th Cir. 2003). We deny the petition for review.
Substantial evidence supports the agency’s finding that the threats and
beatings Perez experienced at the hands of guerilla and government soldiers did not
rise to the level of persecution. See Canales-Vargas v. Gonzales, 441 F.3d 739,
744 (9th Cir. 2006) (threats petitioner received, absent evidence they would be
fulfilled, did not compel a finding of persecution); see also Prasad v. INS, 47 F.3d
336, 339 (9th Cir. 1995) (a single instance of abusive detention by a group of
military and civilian attackers did not constitute persecution). Substantial evidence
also supports the agency’s finding that Perez failed to demonstrate a well-founded
fear of persecution. See Gonzalez-Hernandez, 336 F.3d at 997-98, 1000-01 (the
1996 peace accords ending Guatemalan civil war may rebut a presumption of well-
founded fear); see also Belayneh v. INS, 213 F.3d 488, 491 (9th Cir. 2000)
(evidence of uneventful return trips to home country may show petitioner’s fear of
future persecution is not well founded); Halim v. Holder, 590 F.3d 971, 979 (9th
Cir. 2009) (evidence that petitioner’s family lives unharmed in home country tends
to show fear of persecution is not well founded); Zetino v. Holder, 622 F.3d 1007,
2 10-73136
1016 (9th Cir. 2010) (petitioner’s subjective fear of criminal violence bears no
nexus to a protected ground). Petitioners’ asylum claim fails.
Because petitioners could not meet the burden of establishing eligibility for
asylum, the agency correctly found they could not meet the heavier burden of
qualifying for withholding of removal. See Zehatye v. Gonzales, 453 F.3d 1182,
1190 (9th Cir. 2006).
Lastly, substantial evidence supports the agency’s denial of CAT relief
because petitioners failed to establish it is more likely than not they will be tortured
if they return to Guatemala. See Soriano v. Holder, 569 F.3d 1162, 1167 (9th Cir.
2009).
PETITION FOR REVIEW DENIED.
3 10-73136
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813 F.2d 399
U.S.v.Lawlor (Edward), a/k/a 'Fast', 'Fast Eddie', 'Fast Man'
NO. 86-1365
United States Court of Appeals,Third Circuit.
FEB 26, 1987
1
Appeal From: E.D.Pa.
2
AFFIRMED.
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August 8, 1962
Honorable Mack Wallace Opinion No. W-1413
County Attorney
Henderson County Courthouse Re: Whether a contract seismograph
Athens, Texas crew has the right to shoot on
county roads without obtaining
aneasement for that purpose
Dear Mr. Wallace: from the county.
You have requested the opinion of this office as to the
following question:
II
. . . whether or not a contract seismograph
crew has a right to shoot on county roads without
obtaining an easement for that purpose from the
county."
The public roads and highways of this State are estab-
lished and maintained as an attribute of sovereignty. Title and
control of public roads and highways, whether title to the land
over which it runs has been taken in fee simple or a mere easement
has been acquired by condemnation or otherwise, is in the State
and not the counties. Travis Countv v. Trogden, 88 Tex. 302, 31
S.W. 358 (1895); Robbins v. Limestone ,Countv 114 Tex. 345, 268
S.W. 915 (1925); State v. Hale 136 Tex. 29 '146 S.W.2d 731 (1941);
State v. Malone 168 S.W.2d 293 (Civ.App. 1543 error ref. w.o.m.1.
This is true ev& though the right of way for i particular road
may have been acquired or taken in the name of the county, for as
stated at page 919 of Robbins v. Limestone Countv, sunra:
"Where not restricted by the Constitution, the
Legislature has full control of the property held
by a county as an agency of the state, and may ex-
ercise dominion and control over it without the con-
sent of the county and without compensating the
county for it."
It is only by virtue of the enactments of our Legisla-
ture, as passed anJ amended from time to time, that the counties
of this State through their commissioners' courts, have ever ex-
ercised jurisdiction over public roads as a part of the county
business. The jurisdiction so granted may be erlarged or re-
stricted at the will of the Legislature, even to the point of ex-
cluding all authority respecting public roads, for as so often
stated by our courts: the county commissioners' courts are courts
,
I
Honorable Mack Wallace, page 2 (WW-1413)
of limited jurisdiction and exercise only such powers and author-
ity as may be conferred upon them by the Constitution of Texas
or the statutory enactments of the Legislature. Bland V* Orr,
90 Tex. 492, 39 S.W. 558 (1897); Mills Countv v. Lamnasas Countv,
90 Tsx. 603, 40 s.w. 403 (1897).
There is no provision of our Constitution or statutory
enactment which would empmJer a county commissioners' court to
issue a permit authorizing a seismograph crew to use the county
roads or other public roads in the county for purposes of making
a seismic survey. It, therefore, necessarily follows that such
crew or company would not have to seek and obtain such a permit
from the county commissioners' court.
We have partially answered your question by holding
that no permit from the county is necessary, yet it does not
necessarily follow, nor do we wish to be understood as holding,
that a seismograph crew may have free and unrestricted use of
the county roads in pursuing the secrets of the geological struc-
tures lying thereunder and adjacent, for such is certainly not
the case.
The drilling of holes beneath the surface of the earth
and the discharge of explosives incident to a seismograph survey
necessarily involves the invasion of the mineral estate which
lies beneath the surface of the earth. One who so invades the
property of others without their permission must respond in dam-
ages for the trespass so committed. Phillips Petroleum Co. v.
Cowden, 241 F.2d 586 (C.C.A. 5th, 1957). Your opinion request
does not indicate how the roads in question were acquired or the
status of the mineral estate involved, however, the general rule
in Texas is well established to the effect that: (1) The owners
of property abutting upon a public road or high>Jayown the fee
to the center of the road, subject to the public easement, unless
it appears to the contrary in the granting clause by which the
property was deeded, Mitchell v. Bass, 26 Tex. 372 (1862); Stan-
berv v. Wallace, 45 S.W.2d 198 (Tex.Comm.App. 1932); Roarin
Sprints Townsite Co. v. Paducah Teleohone Co., 164 S.&Civ.
~ccessosuccessors
App. 191 ; in title
if the mineral estate be severed, retains the exclusive right in
all minerals subject orl,yto the public easement for travel,
Clutter v. Davis, 62 S.V. 1107 (Civ.App. 1901, error ref.); m
of Refuaio V* Strauch, 20 S.W,2d 326 (Civ.App. 1929) reversed on
other grounds 29 S.X.2d 1041 (Corm. App. 1930).
Assuming that the seismograph crew or company in ques-
tion has the authority of the owner of the mineral estate to con-
duct the tests in question, their use of the county roads for
such purpose rrlould
still not be without restraint, for the public
Hon. Nack Wallace, page 3 (‘uw1413)
has a right to free and unobstructed access to the public roads
and highways. Though the mineral owners and their privies may
retain their rights in the mineral estates, nonetheless these
rights are subject to the public right of travel and they may
not interfere therewith. Calvert v. Harris Countv .W.2d
375 (Civ.App. 1932, error ref.); Perrv v. mer ‘9%; 2d 143
(Civ.App. 1928, error dism. w.0.j.); Town ,"gRef$io v. itrauch,
supra.
Boone v. Clark, 214 S.W. 607 (Civ.App. 1919, error ref.)
is a case where an oil well was to be drilled upon the right of
way of a public highway under a lease from the county and the
landowner who abutted the highway at the point where the well was
to be drilled. Two legs of the derrick extended onto the trav-
eled portion of the road and there was evidence that the ,free
access of the public to the highway was thus impaired. The court
there held that the county had no authority to lease the right of
way easement for oil and gas purposes or to grant authority to
either the owner of the abutting fee or his lessee to obstruct the
public way in the process of developing their mineral estate. The
court further held that the obstruction of the highway was a pub-
lic nuisance which could be properly enjoined by other land owners
who abutted the public road in question and also pointed out that
Articles812 of Vernon's Penal Code (1911 Revision), which is now
Article 784 of Vernon's Penal Code, made the wilful obstruction of
a public road a misdemeanor and provided punishment therefor.
These same principles would apply to a seismograph crew which uses
the public right of way for conducting its tests. It should be
noted however that the question of whether the public may be ob-
structed in its use of the roadway or whether the roadway will be
damaged are questions of fact to be determined from the particular
circumstances.
We have endeavored to set forth the various principles
of law which would applicable under various circumstances because
of the fact that you informed us by telephone that you did not at
this time know who OWX?d the fee under the roadway involved or
whether the seismograph cre>Jpurported to act with the consent of
the owner of the underlying mineral estate, consequently, we did
not, by holding that no permit from the county commissioners'
court to use the county roads bJaS necessary, desire to leave the
impression that we were holding that a seismograph crew would be
entitled to subvert the public roads of the county to its own
needs an5 purposes in fulfilling its contract.
/ I
_ \
Ron. I4ackWallace, page 4 ('W-1413)
SUMMARY
The county commissioners' court is not author-
ized to issue a permit to a seismograph crew to
make use of the right of way of the county roads to
conduct its tests. Such seismograph crew may not
use such roads so as to obstruct the public use
thereof and may also be responsible in damages for
any unauthorized invasion upon the underlying min-
eral estate, or damages to the highway.
Very truly yours,
WILL WILSON
Attorney General of Texas
W. 0. Shultz
WOS:mkh:wb Assistant
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
John Reeves
Elmer McVey
L. P. Lollar
Dudley McCalla
REVIEWED FOR THE ATTORNEY GENEPSL
BY: Leonard Passmore
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782 F.2d 1036
Shumatev.Patterson
85-1420
United States Court of Appeals,Fourth Circuit.
12/30/85
1
W.D.Va.
AFFIRMED
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495 F.Supp.2d 142 (2007)
COMBINED ENERGIES, Plaintiff,
v.
CCI, INC., Defendant.
Civil No. 07-17-B-W.
United States District Court, D. Maine.
July 11, 2007.
James J. Reardon, Leboeuf, Lamb, Greene & Macrae LLP, Hartford, CT, John J. Aromando, Pierce, Atwood LLP, Portland, ME, for Plaintiff.
Glenn Israel, Ronald W. Schneider, Jr., Bernstein, Shur, Portland, ME, for Defendant.
ORDER ON DEFENDANT'S MOTION TO STAY MATTER PENDING OUTCOME OF DEFENDANT'S APPEAL
JOHN A. WOODCOCK, JR., District Judge.
Since an interlocutory appeal of the denial of a motion to stay and compel arbitration under the Federal Arbitration Act divests the district court of the power to proceed with the aspects of the case on appeal, the Court grants the Defendant's motion to stay discovery pending appeal.
I. STATEMENT OF FACTS
This law suit stems from Combined Energies' (CE) allegations that CCI, Inc. (CCI) raided its business. In response, CCI asserted that the dispute is subject to mandatory arbitration and, on February 21, 2007, CCI filed a motion to stay and to compel arbitration based on an arbitration clause in a purchase order agreement between the two companies. Def's Mot. to Stay and Compel Arbitration (Docket # 7). In turn, CE argued that the raid on its business was outside the scope of the arbitration clause. Pl.'s Mem. in Opp'n to Def's Mot. to Stay and Compel Arbitration (Docket # 10). The Court issued an Order on May 3, 2007, agreeing with CE, and denying the motion, saying "the Court cannot conclude that the arbitration clause in a construction contract encompasses a law suit alleging multiple violations of tort and contract law from the unsavory tactics CE claims CCI used in a bid to take-over its business." Order at 7 (Docket # 13).
On May 15, 2007, CCI filed a notice of appeal, Notice of Appeal (Docket # 15), and on May 25, 2007, it filed a motion to stay the proceedings pending the outcome of its appeal. Def's Mot. to Stay Matter Pending Outcome of Appeal (Docket # 21) (Def's Mot.). CE opposes the motion. Pl.'s Opp'n to Def's Mot. to Stay Matter *143 Pending Outcome of Appeal (Docket # 22) (Pl.'s Opp'n).
II. DISCUSSION
Long ago, the First Circuit addressed a similar question. In Lummus Co. v. Commonwealth Oil Refining Co., after the district court issuel an order staying arbitration, the defendant appealed this order to the First Circuit, and then moved to delay discovery until after the decision on its pending appeal. 273 F.2d 613, 613 (1st Cir.1959). The First Circuit allowed the defendant's motion to stay discovery, explaining that "a court order of discovery would be affirmatively inimical to appellee's obligation to arbitrate. . . ." Id. Lummus noted that "if arbitration is to be had of the entire dispute, appellee's right to discovery must he far more restricted than if the case remains in a federal court for plenary trial. . . ." Id. Lummus strongly suggests that a party should not be allowed to proceed with discovery when the other party has appealed an order denying arbitration.[1]
Other circuits that have considered the precise issue are divided. Compare Ehleiter v. Grapetrec Shores, Inc., 482 F.3d 207, 215 n. 6 (3d Cir.2007) (expressing agreement with "the majority rule of automatic divestiture where the Section 16(a) appeal is neither frivolous nor forfeited); McCauley v. Halliburton Energy Servs., Inc., 413 F.3d 1158, 1162-63 (10th Cir.2005) (finding automatic divestiture of trial court jurisdiction unless appeal is frivolous or forfeited"); Blinco v. Green Tree Servicing, LLC, 366 F.3d 1249, 1251 (11th Cir.2004) (finding automatic divestiture unless appeal is frivolous); Bombardier Corp. v. National Railroad Passenger Corp., No. 02-7125, 2002 WL 31818924, at *1, 2002 U.S.App. LEXIS 25858, at *2 (D.C.Cir. Dec. 12, 2002) (denying a motion to stay as unnecessary because the circuit court has "exclusive jurisdiction to resolve the threshold issue whether the dispute is arbitrable, and the district court may not proceed until the appeal is resolved"); Bradford-Scott Data Corp. v. Physician Computer Network, 128 F.3d 504, 506 (7th Cir.1997) (endorsing automatic divestiture rule, reasoning that "[c]ontinuation of proceedings in the district court largely defeats the point of the appeal and creates a risk of inconsistent handling of the case by two tribunals"); with Motorola Credit Corp. v. Uzan, 388 F.3d 39, 65 (2d Cir. 2004) (finding no automatic stay); Britton v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir.1990) (finding no automatic stay);. see also Nickolas J. McGrath, Survey, McCauley v. Halliburton Energy Services, Inc.: Treatment' of a Motion to Stay Proceedings Pending an Arbitrability Appeal 83 DENY. U.L. REV. 793 (2006).
Here, influenced by Lummus, the Court concludes that the better view is the majority view. To begin, it is an "unassailable general proposition that the filing of a notice of appeal, whether from a true final judgment or from a decision within the collateral order exception, `is an event of jurisdictional significance it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal.'" Stewart v. Donges, 915 F.2d 572, 575 (10th Cir.1990) (quoting Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982)). To assume ongoing jurisdiction over discovery would be inconsistent with *144 the bedrock principle that once a case is appealed, jurisdiction rests with the court of appeals, not in both the court of appeals and the district court. Bradford-Scott Data, 128 F.3d at 505 ("[A] federal district court and a federal court of appeals should not attempt to assert jurisdiction over a case simultaneously.") (citation omitted).
Further, as the Tenth Circuit commented in Donges, the "divestiture of jurisdiction occasioned by the filing of a notice of appeal is especially significant when the appeal is an interlocutory one." 915 F.2d at 575. Donges explained that the "interruption of the trial proceedings is the central reason and justification for authorizing such an interlocutory appeal in the first place." Id. at 576. Section 16(a)(1)(C) of the Federal Arbitration Act expressly authorizes an appeal from an order "denying an application . . . to compel arbitration. 9 U.S.C. § 16(a)(1)(C); Campbell v. Gen. Dynamics Gov't Sys. Corp. 407 F.3d 546, 550 (1st Cir.2005) ("[W]e have jurisdiction to review, here and now, the lower court's denial of the company's motion to stay proceedings and compel arbitration.").
Finally, even though the divestment of district court jurisdiction is qualified by the phrase "involved in the appeal," Griggs, 459 U.S. at 58, 103 S.Ct. 400, the Seventh Circuit has persuasively pointed out that "[w]hether the litigation may go forward in the district court is precisely what the court of appeals must decide." Bradford-Scott Data Corp., 128 F.3d at 506. Arbitration clauses "reflect the parties' preference for non judicial dispute resolution, which may be faster and cheaper. These benefits are eroded, and may be lost or even turned into net losses, if it is necessary to proceed in both judicial and arbitral forums, or to do this sequentially." Id. Thus, "[c]ases of this kind are . . . poor candidates for exceptions to the principle that a notice of appeal divests the district court of power to proceed with the aspects of the case that have been transferred to the court of appeals." Id.
III. CONCLUSION
The Court GRANTS Defendant's Motion to Stay Matter Pending Outcome of Defendant's Appeal (Docket # 21).
SO ORDERED.
NOTES
[1] The Seventh Circuit in Bradford-Scott Data Corp. v. Physician Computer Network, 128 F.3d 504, 506 (7th Cir.1997) cited Lummus as arriving at "exactly this conclusion;" namely, that an appeal under 16(a) divests the district court of jurisdiction to order ongoing discovery.
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523 A.2d 1244 (1987)
Caryl and Sallie ADAMS
v.
TOWN OF WEST HAVEN.
No. 84-476.
Supreme Court of Vermont.
January 23, 1987.
*1245 Caryl T. and Sallie K. Adams, pro se.
Therese M. Corsones of Corsones & Hansen, Rutland, for defendant-appellee.
Before ALLEN, C.J., and HILL, PECK, GIBSON and HAYES, JJ.
ALLEN, Chief Justice.
This is an appeal by plaintiffs Caryl and Sallie Adams (taxpayers) from a decision by the State Board of Appraisers (Board) finding the fair market value of taxpayers' property to be $69,300 and its listed value, for tax purposes, to be $63,000. We reverse and remand.
Taxpayers own 150 acres in West Haven on which a two-story stone dwelling, an attached shed, and a small camp are located. In May, 1983, the Town of West Haven's townwide reappraisal raised the fair market value of taxpayers' property from $13,772 to $86,800. A grievance to the Board of Listers resulted in a reduction of the listed value of taxpayers' property from $86,800 to $84,550. An appeal to the Board of Civil Authority (BCA), 32 V.S.A. § 4404, led to a reduction in the listed value of the property from $84,550 to $69,250. Further appeal to the Director of the Division of Property Valuation and Review, 32 V.S.A. § 4461, from the BCA decision, led to a hearing before the Board and a reduction in listed value from $69,250 to $63,000. This appeal is from the Board's decision.
Taxpayers raise three related claims. First, they argue that the findings of fact and conclusion of the Board were erroneous; second, that the Board erred in not adopting the taxpayers' evidence on the fair market value of their property; and third, that the Board's method of determining land values was erroneous because it considered taxpayers' property in bulk. We find the Board's findings to be insufficient, inconsistent, and contrary to the evidence presented at the hearing.
Taxpayers essentially argued before the Board that the listed value of their home, given its condition, had been set too high when compared with similar properties, and that their land had been overappraised when compared with similar lands adjacent to their property and at other locations in West Haven.
A presumption that an appraisal is valid and legal accompanies a taxpayer's appeal to the Board. Kruse v. Town of Westford, 145 Vt. 368, 371, 488 A.2d 770, 772 (1985). The burden rests on the taxpayer to go forward with evidence to overcome this presumption. Id.; New England Power Co. v. Town of Barnet, 134 Vt. 498, 507, 367 A.2d 1363, 1369 (1976). If the taxpayer introduces "credible evidence fairly and reasonably tending to show that his property was appraised at more than its fair market value," the presumption disappears. Kruse, 145 Vt. at 371-72, 488 A.2d at 772. Once the presumption of validity is overcome by the taxpayer, it is up to the town to introduce evidence that justifies its appraisal.[*] In a tax assessment appeal, the Board must determine "whether the listed value of the property corresponds to the listed value of comparable properties within the town." Kachadorian v. Town of Woodstock, 144 Vt. 348, 350, 477 A.2d 965, 967 (1984) (emphasis added); 32 V.S.A. § 4467. Valuation for purposes of taxation under 32 V.S.A. § 4467 is "fair market value, reduced or increased if necessary to correspond to valuations of comparable properties." New England Power Co., 134 Vt. at 505, 367 A.2d at 1367-68.
In the present case, taxpayers' expert presented evidence of values of at least six *1246 other houses and three other parcels of land located in West Haven that were comparable to taxpayers' property. The Board nevertheless found that "[i]nasmuch as the dwelling on the subject property is the only house of stone construction in the Town, the property in its entirety must be considered unique."
There is no indication in the findings why the fact that taxpayers' residence was constructed of stone made the taxpayers' entire 150-acre piece of property "unique." Nor is there any indication why the land could not have been considered separately and compared with abutting land. A simple declaration that the property is unique does not satisfy the Board's duty of stating in its findings the basis for its conclusion. Findings of fact must state how a decision was reached in order to give a taxpayer reasons for the Board's result as well as to give this Court an adequate basis for review. New England Power Co., 134 Vt. at 503, 367 A.2d at 1366.
Taxpayers have demonstrated that the Board's findings and opinion are inadequate. No specific reasons were given for finding taxpayers' property unique; no findings indicate whether or not the structural deficiencies in taxpayers' dwelling were considered; no findings indicate whether or not taxpayers' acreage was considered in bulk or by tillable acre. Even if findings on uniqueness had been present, nothing indicates the basis of the equalization ratio which the Board applied.
Although our holding that the findings are inadequate is sufficient to reverse and remand, we note in passing that taxpayers have argued that their experts' testimony should have been accepted by the Board because of his qualifications. This is not the law. The weight to be given testimony, including the testimony of experts, is always within the discretion of the Board. See New England Power Co., 134 Vt. at 504, 367 A.2d at 1370.
The purpose of findings, as stated above, is to allow an indication of how the ultimate conclusion is arrived at. New England Power Co., 134 Vt. at 503, 367 A.2d at 1366. Where no indication of either the method of appraisal or the weight given to value factors presented in the evidence is given, the purpose fails. Id.
Reversed and remanded.
NOTES
[*] The burden of persuasion remains with the taxpayer, however, on all contested issues. Kruse, 145 Vt. at 372 n., 488 A.2d at 773 n.; New England Power Co., 134 Vt. at 508, 367 A.2d at 1369.
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878 F.2d 382
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Christine A. PETERSON, as the Personal Representative of theEstate of Allan P. Peterson, Deceased, Plaintiff-Appellant,v.CHESAPEAKE AND OHIO RAILWAY COMPANY, a Virginia Corporation;E.I. Dupont Denemours and Company, Defendants-Appellees.
No. 88-1623.
United States Court of Appeals, Sixth Circuit.
June 23, 1989.
Before RYAN and ALAN E. NORRIS, Circuit Judges, and RICHARD B. McQUADE, Jr., District Judge.*
PER CURIAM.
1
Plaintiff appeals from the order of the district court granting summary judgment to defendants.
2
Having had the benefit of oral argument, and having carefully considered the record on appeal and the briefs of the parties, we are unable to say that the district court erred in granting summary judgment to defendants.
3
Accordingly, the judgment of the district court is affirmed, upon the reasoning set forth in its opinion of April 28, 1988.
*
The Honorable Richard B. McQuade, Jr., United States District Judge for the Northern District of Ohio, sitting by designation
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FILED
Aug 25 2017, 8:35 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANTS/ ATTORNEY FOR APPELLEE/
CROSS-APPELLEES CROSS-APPELLANT
Darla S. Brown Robert M. Hamlett
Sturgeon & Brown, PC Carmel, Indiana
Bloomington, Indiana
IN THE
COURT OF APPEALS OF INDIANA
In the Matter of the Supervised August 25, 2017
Estate of Gary D. Kent, Court of Appeals Case No.
Deceased; and 55A01-1612-ES-2907
In the Matter of the Educational Appeal from the Morgan Superior
Trust of the Grandchildren of Court
Gary D. Kent; The Honorable Peter R. Foley,
Judge
John David Kent, Kevin Kent,
Trial Court Cause Nos.
Jacob Anderson, Garrett Kerr,
55D01-1602-ES-000022
Griffin Kerr, Nicholas Kent, and 55D01-1603-TR-000038
David Kent, 55D01-1605-PL-000659
Appellants/Cross-Appellees-
Respondents,
v.
Cynthia Kerr,
Appellee/Cross-Appellant-Petitioner.
Najam, Judge.
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 1 of 13
Statement of the Case
[1] Following the death of her father, Gary Kent (“Gary”), Cynthia Kerr
(“Cynthia”) filed with the probate court a verified petition to revoke the probate
of Gary’s will and, under a separate cause number, a complaint to revoke the
probate of the will. Under a third cause number, Cynthia’s brother John David
Kent (“John”) filed with the probate court a verified petition to docket Gary’s
educational trust. Following a consolidated hearing on the parties’ cross-
motions for summary judgment, the probate court dismissed, with prejudice,
both the trust proceeding and the will contest. Specifically, the court denied
Cynthia’s summary judgment motion, which sought to enforce a family
settlement agreement that had been executed by Gary, John, and Cynthia
before Gary’s death. And the court ordered the Personal Representatives, John
and Gary’s cousin, Kevin Kent (“Kevin”), to “proceed with administration of
the probate estate pursuant to decedent’s Last Will and Testament, executed on
June 23, 2008.” Cross-Appellant’s App. at 25.
[2] John and Kevin filed a notice of appeal, but this court granted Cynthia’s motion
to dismiss that appeal after John and Kevin1 failed to timely file an appellants’
brief. We retained jurisdiction, however, to hear Cynthia’s cross-appeal, where
she presents a single dispositive issue for our review, namely, whether Indiana
Code Section 29-1-9-1 permits the prospective beneficiaries of a future
1
For ease of discussion, we refer to John as the sole Cross-Appellee herein.
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 2 of 13
inheritance to execute, prior to the decedent’s death, a family settlement
agreement to determine their anticipated rights or interests in the decedent’s
estate. We reverse and remand, and we instruct the trial court to enter
judgment for Cynthia on her motion to enforce the parties’ agreement.
Facts and Procedural History
[3] On December 19, 2015, Gary, who was terminally ill, asked John and Cynthia
to sign a settlement agreement (“the agreement”) regarding “how their
inheritance [would] be divided” upon his death. Cross-Appellant’s App. Vol. 3
at 46. At that time, Gary had a valid will, which provided in relevant part that
the majority of his personal property and his entire residuary estate would be
divided equally between John and Cynthia, with a few personal items going to
Gary’s grandson Jacob Anderson.2 The agreement provided as follows:
Cynthia would receive Gary’s coin collection; John would receive certain rental
properties; John would “remove the mortgage on [real estate on Hacker Creek
Road] at his sole expense”; and John and Cynthia would “subdivide” the
Hacker Creek Road property “equally.” Id. Gary, John, and Cynthia each
signed the agreement, and Gary’s attorney notarized it. Unbeknownst to Gary,
a few days later, on December 26, John executed a written notice purporting to
rescind the settlement agreement, and he notified Cynthia by certified mail.
2
Gary disinherited his son Donald Kent and Vickie Beach, Gary’s stepdaughter.
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 3 of 13
[4] On January 27, 2016, Gary died. On February 9, John and Kevin filed a
verified petition for probate of Gary’s will and issuance of letters testamentary
for supervised administration in cause number 55D01-1602-ES-22 (“ES-22”).3
On March 21, Cynthia filed a verified petition to revoke the probate of Gary’s
will. And on May 5, Cynthia filed a complaint to revoke the probate of the will
under cause number 55D01-1605-PL-659 (“PL-659”). Following a hearing on
the parties’ cross-motions for summary judgment, the probate court found in
relevant part that the agreement, which Cynthia had asked the court to enforce,
does not meet the legal requirements of a “settlement agreement”
or “compromise” under I.C. § 29-1-9-1, et. seq. The Settlement
Agreement was executed prior to the decedent’s death. At the
time the Settlement Agreement was executed, the parties to the
Settlement Agreement had no vested rights in decedent’s estate[],
but[,] rather[,] mere expectancy interests. In addition, John
David Kent rescinded the Settlement Agreement prior to the
death of the decedent. Based upon the undisputed facts
presented to the Court, the Settlement Agreement does not meet
the requirements of I.C. § 29-1-9-1.
Cross-Appellant’s App. Vol. 2 at 24. Thus, the probate court denied Cynthia’s
“motion to enforce” the agreement. Id. at 25. The court also dismissed the will
contest and ordered that the Personal Representatives “promptly proceed with
3
John also filed a verified petition to docket an educational trust, but that matter is not relevant to this
appeal.
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 4 of 13
administration of the probate estate pursuant to decedent’s Last Will and
Testament, executed on June 23, 2008.” Id. This cross-appeal ensued.
Discussion and Decision
[5] Cynthia contends that the trial court erred when it denied her motion for
summary judgment to enforce the agreement.
“When reviewing the grant or denial of a motion for summary
judgment we stand in the shoes of the trial court.” SCI Propane,
LLC v. Frederick, 39 N.E.3d 675, 677 (Ind. 2015) (internal
quotation omitted). Summary judgment is appropriate only
when “the designated evidentiary matter shows that there is no
genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” Ind. Trial Rule 56(C).
When “the challenge to summary judgment raises questions of
law, we review them de novo.” Rogers v. Martin, 63 N.E.3d 316,
320 (Ind. 2016) (citing Ballard v. Lewis, 8 N.E.3d 190, 193 (Ind.
2014)). Issues of statutory construction are questions of law,
which are particularly appropriate for summary resolution.
Evansville Courier & Press v. Vanderburgh Cnty. Health Dep’t, 17
N.E.3d 922, 927-28 (Ind. 2014) (citations omitted).
City of Lawrence Util. Serv. Bd. v. Curry, 68 N.E.3d 581, 585 (Ind. 2017).
[6] Initially, we note that Cynthia complied with Trial Rule 9.2(A) by filing a copy
of the agreement with her petition in the trial court. As such, the agreement
became a part of the record and execution of the instrument was deemed
established pursuant to Trial Rule 9.2(B).
[7] In her cross-appeal, Cynthia contends that the settlement agreement is a valid
contract on its face and that there is no authority for John’s purported rescission
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 5 of 13
of the agreement. Cynthia presents an issue of first impression for our courts,
namely, whether Indiana Code Section 29-1-9-1 permits family settlement
agreements to be executed prior to a decedent’s death. The statute provides as
follows:
The compromise of any contest or controversy as to:
(a) admission to probate of any instrument offered as
the last will of any decedent,
(b) the construction, validity or effect of any such
instrument,
(c) the rights or interests in the estate of the decedent
of any person, whether claiming under a will or as
heir,
(d) the rights or interests of any beneficiary of any
testamentary trust, or
(e) the administration of the estate of any decedent or
of any testamentary trust,
whether or not there is or may be any person interested who is a
minor or otherwise without legal capacity to act in person or
whose present existence or whereabouts cannot be ascertained, or
whether or not there is any inalienable estate or future contingent
interest which may be affected by such compromise, shall, if
made in accordance with the provisions of this article, be lawful
and binding upon all the parties thereto, whether born or unborn,
ascertained or unascertained, including such as are represented
by trustees, guardians of estates and guardians ad litem; but no
such compromise shall in any way impair the rights of creditors
or of taxing authorities.
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 6 of 13
Ind. Code § 29-1-9-1 (2017). Indiana Code Section 29-1-9-2 provides in
relevant part that the terms of the compromise shall be set forth in an agreement
in writing which shall be executed by all competent persons having interests or
claims which will or may be affected by the compromise. And Indiana Code
Section 29-1-9-3 provides in relevant part that the court shall, if it finds that the
contest or controversy is in good faith and that the effect of the agreement upon
the interests of persons represented by fiduciaries is just and reasonable, make
an order approving the agreement.
[8] Cynthia maintains that Section 1 does not “specif[y] a time when an agreement
may or must be made, or a time before which it may not or must not be made.”
Cross-Appellant’s Br. at 10. But John maintains that Section 1 unambiguously
and plainly prohibits “pre-mortem” family settlement agreements. Cross-
Appellees’ Br. at 19. “As is apparent [from] the arguments of both sides we are
presented with a question of statutory construction which is a matter of law and
is reviewed de novo.” Suggs v. State, 51 N.E.3d 1190, 1193 (Ind. 2016).
When construing a statute our primary goal is to ascertain the
legislature’s intent. Adams v. State, 960 N.E.2d 793, 798 (Ind.
2012). To discern that intent, we look first to the statutory
language itself and give effect to the plain and ordinary meaning
of statutory terms. Pierce v. State, 29 N.E.3d 1258, 1265 (Ind.
2015). “If a statute is unambiguous, that is, susceptible to but
one meaning, we must give the statute its clear and plain
meaning.” State v. Evans, 810 N.E.2d 335, 337 (Ind. 2004)
(quotation omitted). However, if a statute admits of more than
one interpretation, then it is ambiguous; and we thus resort to
rules of statutory interpretation so as to give effect to the
legislature’s intent. Adams, 960 N.E.2d at 798. “For example,
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 7 of 13
we read the statute as whole, avoiding excessive reliance on a
strict, literal meaning or the selective reading of individual
words.” Id. And we seek to give a practical application of the
statute by construing it in a way that favors public convenience
and avoids an absurdity, hardship, or injustice. Merritt v. State,
829 N.E.2d 472, 475 (Ind. 2005).
Id. at 1193-94.
[9] Indiana Code Section 29-1-9-1 does not specifically address the timing of a
family settlement agreement. And while the tense of some of the words used
might suggest that such an agreement may only be made “post-mortem,” such a
strict interpretation would undermine the statute’s underlying policy of
encouraging family settlement agreements and Indiana’s policy which favors
freedom of contract. See I.C. § 29-1-9-1 study commission’s comment (stating
that family settlement agreements “are looked upon with favor in law”).
Indeed, as our Supreme Court has stated,
because we value the freedom to contract so highly, we will not
find that a contract contravenes a statute unless the language of
the implicated statute is clear and unambiguous that the
legislature intended that the courts not be available for either
party to enforce a bargain made in violation thereof.
Cont’l B’ball Ass’n, Inc. v. Ellenstein Enters., Inc., 669 N.E.2d 134, 140 (Ind. 1996).
No part of the statute clearly and unambiguously prohibits pre-mortem family
settlement agreements. Indeed, agreements made in accordance with the
statute are lawful and binding “whether or not there is . . . any future contingent
interest which may be affected,” which suggests that the statute contemplates
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 8 of 13
pre-mortem agreements to determine expectancy interests in a decedent’s estate.
Here, the parties’ respective interests under the agreement are future contingent
interests, that is, interests subject to a condition subsequent, namely, Gary’s
death.
[10] In any event, as our Supreme Court has observed, “when interpreting an Indiana
statute for the first time, it is appropriate to look to the decisions of other
jurisdictions that construe identical statutory provisions.” Fratus v. Marion Cmty.
Sch. Bd. of Trustees, 749 N.E.2d 40, 44 (Ind. 2001). In support of her interpretation
of the statute, Cynthia directs us to the decision of the United States Court of
Appeals for the Tenth Circuit in Salcedo-Hart v. Burningham, No. 15-4099, 656 F.
App’x 888, 892 (10th Cir. 2016), where the court interpreted Colorado’s family
settlement agreement statute, which is substantively similar to Indiana’s statute,4 to
permit pre-mortem agreements. That court held as follows:
It is important to first note that Salcedo-Hart has not identified
even a single case, either from Colorado or any other jurisdiction,
to support her position as to the validity of pre-mortem
4
Colorado Revised Statute Annotated Section 15-12-912 provides as follows:
Subject to the rights of creditors, competent successors may agree among themselves to
alter the interests, shares, or amounts to which they are entitled under the will of the
decedent or under the laws of intestacy in any way that they provide in a written
agreement, whether or not supported by a consideration, executed by all who are affected
by its provisions. The personal representative shall abide by the terms of the agreement
subject to his or her obligation to administer the estate for the benefit of creditors, to pay all
taxes and costs of administration, and to carry out the responsibilities of his or her office for
the benefit of any successors of the decedent who are not parties. Personal representatives
of decedents' estates are not required to see to the performance of trusts if the trustee
thereof is another person who is willing to accept the trust. Accordingly, trustees of a
testamentary trust are successors for the purposes of this section. Nothing in this section
relieves trustees of any duties owed to beneficiaries of trusts.
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 9 of 13
agreements. Instead, cases addressing the issue uniformly favor
the validity of pre-mortem settlements. See, e.g., Machen v.
Machen, 2011 Ark. 531, 385 S.W.3d 278, 282 (2011) (“Family-
settlement agreements are favorites of the law. Courts of equity
have uniformly upheld and sustained family arrangements in
reference to property. . . . The motive in such cases is to preserve
the peace and harmony of families.” (citations omitted)); Rector
v. Tatham, 287 Kan. 230, 196 P.3d 364, 368 (2008) (“We have
found no cases disallowing an assignment of an expectancy
interest from one heir to another.”). These cases are entirely
consistent with the general notion of freedom of contract. See
Balt. & Ohio Sw. Ry. Co. v. Voigt, 176 U.S. 498, 505, 20 S. Ct. 385,
44 L. Ed. 560 (1900) (“[T]he right of private contract is no small
part of the liberty of the citizen, and . . . the usual and most
important function of courts of justice is rather to maintain and
enforce contracts than to enable parties thereto to escape from
their obligation. . . .”); Fox v. I-10, Ltd., 957 P.2d 1018, 1022
(Colo. 1998) (“Where a party enters into a contract absent fraud,
duress or incapacity, the courts will not relieve that party of the
consequences of the bargain simply because it may have been
improvident.”).
***
Upon careful review of the relevant authorities, this court
concludes that Colorado courts would agree with the apparently
unanimous view that pre-mortem agreements are valid and
enforceable contracts. . . . [W]e decline to read into § 15-1-912 an
intent by the Colorado legislature to bar all other types of family
settlement agreements but for the one described therein. Thus,
the district court correctly concluded the Agreement between
Salcedo-Hart[ and her stepsons] was valid and enforceable.
Id. at 892-93 (emphasis added).
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 10 of 13
[11] In other words, rather than concluding that Colorado’s family settlement
agreement statute expressly permits pre-mortem agreements, the Tenth Circuit
Court of Appeals held that the statute does not bar such agreements. Id.
Following the reasoning in Salcedo-Hart, we observe that Indiana courts have
held that “future interests are valuable property rights which may be freely
conveyed.” Kuhn v. Kuhn, 179 Ind. App. 441, 385 N.E.2d 1196, 1200 (1979).
Moreover, a “‘very strong presumption of enforceability of contracts that
represent the freely bargained agreement of the parties’ exists reflecting ‘the
principle that it is in the best interest of the public not to unnecessarily restrict
peoples’ freedom of contract.’” Robert’s Hair Designers, Inc. v. Pearson, 780
N.E.2d 858, 869 (Ind. Ct. App. 2002). Finally, in his treatise on wills, Professor
William Herbert Page discusses family settlement agreements at length and
acknowledges that some are executed “prior to the testator’s death.” 2 Page on
the Law of Wills § 25.1 (2003). Accordingly, we hold that Indiana Code
Section 29-1-9-1 does not prohibit pre-mortem family settlement agreements.
[12] Still, John maintains that the agreement is unenforceable because it lacked
consideration and because he rescinded the agreement before Gary’s death. But
it is well settled that an exchange of mutual promises is consideration for a
contract, and the agreement expressly includes promises by both Cynthia and
John. See Hinkel v. Sataria Dist. & Packaging, Inc., 920 N.E.2d 766, 770 (Ind. Ct.
App. 2010). In addition, Professor Page states that, where, as here, “the
contract is made to give effect to the wish which [the] testator had expressed in
his lifetime but which did not take the form of a new will or codicil[,] it has
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 11 of 13
been said that the desire to carry out the wishes of the testator is consideration.”
Page, supra, § 25.2. We hold that the settlement agreement is supported by
adequate consideration.
[13] Further, it is well settled that a contract may be rescinded “only when a party avers
that he has performed a substantial part of his obligations under a contract and that
the other party refused to perform its obligations.” Van Bibber Homes Sales v.
Marlow, 778 N.E.2d 852, 858 (Ind. Ct. App. 2002), trans. denied. John has not
averred, either to the trial court or to this court, that Cynthia refused to perform
her obligations under the agreement. John contends only that he had a right to
rescind the agreement because Gary was still alive when he executed the
rescission. But John does not support that contention with citation to authority,
and we are not aware of any such authority. In sum, the agreement is supported
by adequate consideration, and John’s purported rescission was a nullity. The trial
court erred when it denied Cynthia’s motion to enforce the agreement.
Conclusion
[14] Cynthia moved for summary judgment on the enforceability of the settlement
agreement, which presents a pure question of law on appeal. We hold that
nothing in Indiana Code Section 29-1-9-1 prohibits the agreement, and it is a
valid and enforceable contract. We also hold that the trial court erred when it
concluded that the agreement was not supported by sufficient consideration and
that John had rescinded the agreement. The trial court erred when it denied
Cynthia’s summary judgment motion. We reverse and remand with
instructions that the trial court enter judgment for Cynthia on her motion to
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 12 of 13
enforce the agreement and for further proceedings not inconsistent with this
opinion.
[15] Reversed and remanded with instructions.
Kirsch, J., and Brown, J., concur.
Court of Appeals of Indiana | Opinion 55A01-1612-ES-2907 | August 25, 2017 Page 13 of 13
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888 F.2d 1392
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.Patricia BORCH, Defendant-Appellant.
No. 88-2287.
United States Court of Appeals, Sixth Circuit.
Nov. 8, 1989.
Before NATHANIEL K. JONES and RALPH B. GUY, Jr., Circuit Judges, and WILLIAM O. BERTELSMAN, District Judge.*
PER CURIAM.
1
Defendant-appellant, Patricia Borch appeals the district court's rulings in the trials of her co-defendants.
I.
2
A federal grand jury in the Eastern District of Michigan indicted Patricia Borch, her son and her two daughters for conspiring to distribute both marijuana and cocaine in violation of 21 U.S.C. Sec. 741(a)(1). Her son and two daughters were also indicted for conspiracy. Borch was also indicted for ten counts of unlawful use of a telephone to facilitate a drug conspiracy in violation of 21 U.S.C. Sec. 843(b), and two firearms offenses.
3
On August 22, 1988, Borch filed a motion to suppress tape recorded conversations intercepted during the course of a court ordered wiretap of a telephone listed in her name. A hearing was held in the United States District Court for the Eastern District of Michigan, Judge James P. Churchill, presiding. On September 2, 1988, the district court granted Borch's motion to suppress the phone conversations.
4
On September 22, 1988, Borch entered a guilty plea to count one of the indictment, conspiracy to distribute marijuana and cocaine, pursuant to a plea agreement with the United States. The plea agreement provided that Borch would be sentenced at the lower limit of the applicable sentencing guideline range for count one, and that the remaining counts would be dismissed. On December 15, 1988, Borch was sentenced to 108 months imprisonment and three years of supervised release in accordance with the plea agreement.
II.
5
Borch appeals the admission of evidence against her son, who although a codefendant, was tried separately. She also appeals the sentences of her son and two daughters because she feels they are unduly harsh. She does not appeal the length of her own sentence, nor does she wish to withdraw her guilty plea. Federal courts may act only to adjudicate the rights of litigants in actual controversies. Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691 (1962). A litigant has standing to raise an issue only when he has a personal adversary interest in the outcome. 1 La Fave and Israel, Criminal Procedure Sec. 9.1 at 714 (1984). Borch's attorney concedes that she does not have standing to appeal on these issues. He states:
6
appellant's attorney has reviewed the transcripts and records in this case, and can understand her feelings as a mother, [but] does not see how she was legally prejudiced in this case.
7
Appellant's Brief at 1. It is clear that Borch does not have standing to raise these issues, because she has no personal adversary interest in the outcome. She does not allege any special circumstance or issue of her children's competence which would make this appeal appropriate.
III.
8
For the reasons stated above, the judgment of the district court is AFFIRMED.
*
Honorable William O. Bertelsman, United States District Judge for the Eastern District of Kentucky, sitting by designation
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646 F.2d 1173
107 L.R.R.M. (BNA) 2252, 91 Lab.Cas. P 12,719
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.PEPSI-COLA DISTRIBUTING COMPANY OF KNOXVILLE, TENNESSEE,INC., Respondent.
No. 79-1314.
United States Court of Appeals,Sixth Circuit.
Argued Feb. 2, 1981.Decided May 1, 1981.
Elliott Moore, Deputy Associate Gen. Counsel, John Ferguson, Joseph Norelli, N.L.R.B., Washington, D. C., Curtis L. Mack, Director, Region 10, N.L.R.B., Atlanta, Ga., for petitioner.
J. W. Alexander, Jr., Blakeney, Alexander & Machen, Charlotte, N. C., for respondent.
Before EDWARDS, Chief Judge, BROWN, Circuit Judge, and BATTISTI,* District Judge.
EDWARDS, Chief Judge.
1
The National Labor Relations Board petitions for enforcement of its order entered April 13, 1979, reported at 241 NLRB No. 136.
2
Pepsi-Cola Distributing Company of Knoxville, Tennessee, Inc. purchased a distributorship previously owned and operated by Hartman Beverage Company. For a considerable number of years, Hartman had paid its route salesmen a year-end bonus calculated at one cent per case sold by individual route salesmen during the previous year. The bonus was paid annually approaching the Christmas season and had been so paid before the union, Teamsters Local Union No. 519, negotiated a one year contract, effective November 27, 1975. At the time of these negotiations, no mention was made of the year-end bonus for route salesmen but Hartman paid the bonus in late 1975. The following year, Hartman and the union executed another contract and the bonus was discussed but no reference to it was put in the labor management contract.
3
During the year 1976, respondent Pepsi-Cola Distributing Company purchased Hartman's business without actual knowledge of the Hartman practice of paying a one cent a case bonus to its salesmen. While the new ownership became effective February 1, 1977, and the management told the route salesmen that there would be no change in pay structure, the record indicates that the new management did not become aware of the bonus until some time in May. Respondent did not discuss the matter with the union or with its route salesmen until some of them began asking about the bonus, at which time General Manager Moore reviewed Hartman's payroll records and found that Hartman had paid its route salesmen the full rate due under the contract and that the one cent per case bonus was paid in addition to wages under the contract. At that point, Moore informed the route salesmen that he would not pay the year-end bonus.
4
On complaint filed by the General Counsel alleging that the company had violated Section 8(a)(5) and (1) of the National Labor Relations Act by unilaterally withholding the 1977 bonus, the Administrative Law Judge who heard this case initially found that the Christmas bonus "was essentially part of (the route salesmen's) employment as distinguished from being in nature a gift or gratuity" and that the employer was under a duty to negotiate with the union prior to effecting any change therewith, citing NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962); Leeds & Northrup Co. v. NLRB, 391 F.2d 874 (3rd Cir. 1968), unless the union had previously waived its bargaining rights. On his analysis, the ALJ concluded that the waiver clause in the contract previously signed by Hartman with the union served to relieve the successor Pepsi-Cola Distributing Company of any obligation to continue the bonus or to negotiate with the union in relation to discontinuing it in advance of doing so even though the ALJ acknowledged "that employees hired after respondent's takeover were told that their pay and conditions would remain the same." In this respect, the ALJ relied upon Bancroft-Whitney Co., Inc., 214 NLRB 57 (1974).
5
On review by the NLRB, a three-member panel thereof held that the Bancroft- Whitney decision was not determinative in relation to this case. Its reasoning concerning Bancroft-Whitney bears quotation here:
6
the Board found that the union had clearly waived any right to bargain about the payment of an annual wage dividend during the contract's duration. In that case, bargaining was extensive and the contract contained a clear and specific provision that "all wages and other benefits to be received are contained in this agreement."
7
The law is settled that the right to be consulted concerning unilateral changes in terms of employment is a right given by statute and not one obtained by contract and that, in order to establish a waiver of a statutory right, there must be a showing of a clear relinquishment of the right. Whether there has been a clear relinquishment of the right is to be decided on the facts and circumstances surrounding the making of the contract. 4 Having considered all the circumstances herein, we conclude that there has been no showing that the Union relinquished its statutory right to bargain over the year-end bonus.
8
The Board thereupon ordered respondent to cease and desist from "unilaterally without notification of or consultation with the union discontinuing its past practice of conferring upon its route salesmen a year-end bonus" and required the respondent to pay the 1977 year-end bonus and to bargain collectively in relation to any change of practice concerning it.
9
While this case is not beyond dispute, we conclude that the union had a statutory right to be consulted about changes in relation to the bonus paying practices before it was discontinued and that the Board's order is consistent with Section 8(d) of the Act which requires the parties to "confer in good faith with respect to wages, hours and other terms and conditions of employment." In the unanimous decision in NLRB v. Katz, supra, the opinion for the court said as follows:
10
The duty "to bargain collectively" enjoined by § 8(a)(5) is defined by § 8(d) as the duty to "meet and confer in good faith with respect to wages, hours, and other terms and conditions of employment." Clearly, the duty thus defined may be violated without a general failure of subjective good faith; for there is no occasion to consider the issue of good faith if a party has refused even to negotiate in fact "to meet and confer" about any of the mandatory subjects.10 A refusal to negotiate in fact as to any subject which is within § 8(d), and about which the union seeks to negotiate, violates § 8(a)(5) though the employer has every desire to reach agreement with the union upon an over-all collective agreement and earnestly and in all good faith bargains to that end. We hold that an employer's unilateral change in conditions of employment under negotiation is similarly a violation of § 8(a)(5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) much as does a flat refusal.11
11
10. See, e. g., Labor Board v. Allison & Co., 165 F.2d 766 (6 Cir. 1948).
12
11. Compare Medo Corp. v. Labor Board, 321 U.S. 678, 64 S.Ct. 830, 88 L.Ed. 1007; May Department Stores v. Labor Board, 326 U.S. 376, 66 S.Ct. 203, 90 L.Ed. 145; Labor Board v. Crompton-Highland Mills, 337 U.S. 217, 69 S.Ct. 960, 93 L.Ed. 1320.
13
In Medo, the Court held that the employer interfered with his employees' right to bargain collectively through a chosen representative, in violation of § 8(1), 49 Stat. 452 (now § 8(a)(1)), when it treated directly with employees and granted them a wage increase in return for their promise to repudiate the union they had designated as their representative. It further held that the employer violated the statutory duty to bargain when he refused to negotiate with the union after the employees had carried out their promise.
14
May held that the employer violated § 8(1) when, after having unequivocally refused to bargain with a certified union on the ground that the unit was inappropriate, it announced that it had applied to the War Labor Board for permission to grant a wage increase to all its employees except those whose wages had been fixed by "closed shop agreements."
15
369 U.S. at 742-743, 82 S.Ct. at 1111-1112.
16
The dissent in this case relies upon NLRB v. Southern Materials Co., 447 F.2d 15 (4th Cir. 1971). There on somewhat similar facts, enforcement of a Board order to pay Christmas bonuses was denied. In that case, however, the bonuses were small and consistent with being Christmas gifts, as opposed to part of regular compensation.
17
In our instant case, Pepsi-Cola had assured employees that their compensation would be the same as it had been under the Hartman administration. Additionally, it appears clear to us that the year-end payments were not mere bonuses, but were a regularly calculated part of the route salesmen's compensation, based upon a formula of one cent per case. Thus, what we deal with here, as opposed to Southern Materials, is a unilateral management change of one of the fundamental issues of collective bargaining; namely, wages.
18
On this record, where a successor employer has promised to continue previously established compensation, a general waiver clause, which does not refer specifically to waiver of a portion of the promised compensation, should not be regarded as a clear and unmistakable waiver of the union's right to collective bargaining.
19
The petition of the Board to enforce its order is hereby granted.
20
BAILEY BROWN, Circuit Judge, dissenting.
21
I respectfully dissent.
22
The precise issue before the Board was whether Pepsi-Cola, as a successor employer that adopted the existing collective bargaining contract effective November 1976-November 1977, committed an unfair labor practice under Section 8(a)(5) by its failure to bargain with respect to the payment of the 1977 Christmas bonus. I recognize that the Union's statutory right to bargain cannot be held to have been waived unless such result is required by the provisions of the collective bargaining contract and the surrounding circumstances. The ALJ determined that the right to bargain was waived by the clear terms of the contract and that the surrounding circumstances did not support a different result. The Board determined that the contract was not clear as to waiver of the right to bargain, and that, moreover, the surrounding circumstances did not support a waiver by the Union. In my view, under the collective bargaining contract the parties waived the right to bargain by language that could not have been clearer had it been written by Abraham Lincoln and etched in stone. Moreover, there was nothing in the surrounding circumstances that supported a different result.
23
I would agree, as the ALJ determined, that this bonus, though not mentioned in the contract, was not a gratuity and had become part of Hartman's (the predecessor employer's) wage structure. It might well be that, if the Union had taken this bonus issue to arbitration, it should have prevailed. It could have possibly prevailed either on the theory that the bonus claim had not been waived by the contract or on the theory that, even if so waived, Pepsi-Cola in effect "waived the waiver" when it obtained some information from Hartman about the bonus in May of 1977 and did not then take the matter up with the Union. (In May, Pepsi-Cola did receive information from Hartman about the bonus, but it was incorrect; the information was that the route salesmen were paid one cent per case less than the contract rate and that this amount was accumulated and paid as a "bonus" at the end of the year.) But, as I have indicated, the question before the Board was not whether the Union had effectively waived the right to the bonus but rather whether the Union had waived the right to bargain with respect to the bonus. It was not for the Board to determine whether Pepsi-Cola was bound to pay the bonus where, as here, there was an arbitration provision in the contract to resolve such disputes. See N.L.R.B. v. C & C Plywood Corp., 385 U.S. 421, 87 S.Ct. 559, 17 L.Ed.2d 486 (1967), at 426-428, 87 S.Ct. at 562-564.
24
First, I will deal with the terms of the collective bargaining contract and then with the surrounding circumstances.
25
The operative provision of this contract provided as follows:
26
Section 2. The Employer and the Union agree that all matters desired by either party have been presented, discussed and incorporated herein or rejected. Accordingly, it is agreed that for the life of this Agreement each party voluntarily and unqualifiedly waives the right and each agrees that the other shall not be obligated to bargain collectively with respect to any subject or matter, whether or not referred to in this Agreement. (Emphasis supplied.)
27
In N.L.R.B. v. Southern Materials Co., 447 F.2d 15 (4th Cir. 1971), the Fourth Circuit found the following clause to be a "clear and unmistakable" waiver of the union's right to negotiate about Christmas bonuses. The clause in Southern Materials stated (at 17):
28
The Company and the Union, for the life of this Agreement, each voluntarily and unqualifiedly waives the right, and each agrees that the other shall not be obligated to bargain collectively with respect to any subject matter referred to or covered in this Agreement, or with respect to any subject matter not specifically referred to or covered in this Agreement. 447 F.2d at 17.
29
There is no difference of consequence between the waiver clause presented here and the waiver clause before the court in Southern Materials.
30
As stated, there is nothing in the surrounding circumstances that could be interpreted as a waiver of this waiver provision. It is without dispute that Pepsi-Cola had no knowledge of this practice of Hartman of paying a Christmas bonus when Pepsi-Cola bought this business and adopted this collective bargaining contract which did not mention bonus, in February of 1977. Pepsi-Cola did, in adopting this contract, verbally assure that compensation of employees would continue as under Hartman, but it obviously meant the compensation set out in the contract would be paid. Pepsi-Cola did receive some incorrect information about the bonus from Hartman, as before stated, in May of 1977 and did not consult with the Union about it. But the only effect this could have possibly had on the rights of these parties would be to create a waiver of its contract right not to pay the bonus. It could not effect a waiver of Pepsi-Cola's contract right not to bargain with respect to the bonus.
31
Even if the Board were correct in determining that Pepsi-Cola was guilty of an unfair labor practice in failing to bargain with respect to the bonus, it is doubtful that it had the authority to, in effect, adjudicate the obligation of Pepsi-Cola to pay the bonus (see C & C Plywood Corp., supra, 385 U.S. at 428, 87 S.Ct. at 564) rather than to order Pepsi-Cola to bargain. In any case, the Board exercised some overkill when, in spite of Pepsi-Cola's strong position, it ordered Pepsi-Cola to pay the 1977 bonus rather than to bargain with respect to it and when, in spite of the fact that the parties had settled the bonus issue as to future years, it ordered Pepsi-Cola to bargain as to future years.
32
For these reasons, I respectfully dissent and would deny enforcement.
*
Honorable Frank J. Battisti, Chief Judge, United States District Court for the Northern District of Ohio, sitting by designation
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 00-1224
THOMAS J. DEPETERDY, d/b/a Depeterdy Tree Farms,
Plaintiff - Appellant,
versus
CABOT OIL & GAS CORPORATION,
Defendant - Appellee.
Appeal from the United States District Court for the Southern Dis-
trict of West Virginia, at Charleston. John T. Copenhaver, Jr.,
District Judge. (CA-97-966-2)
Submitted: August 31, 2000 Decided: September 21, 2000
Before WIDENER, WILLIAMS, and MOTZ, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Larry L. Skeen, SKEEN & SKEEN, Ripley, West Virginia, for Ap-
pellant. Timothy M. Miller, ROBINSON & MCELWEE, L.L.P., Charleston,
West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Thomas J. Depeterdy appeals from the district court’s order
partially granting summary judgment in favor of Cabot Oil and Gas
Corporation and the jury’s subsequent award of damages in his
diversity action against Cabot. We have reviewed the record and
the materials presented by the parties, including Depeterdy’s spe-
cific allegations of error in the district court’s determinations,
and find no reversible error therein. Accordingly, we affirm those
decisions on the reasoning of the district court. See Depeterdy v.
Cabot Oil & Gas Corp., No. CA-97-966-2 (S.D.W. Va. Sep. 13, 1999 &
Feb. 3, 2000).
Depeterdy has also raised a handful of claims not clearly pre-
sented to the court below. We find these claims to be both waived,
and without merit. Accordingly, we find no reason to disturb the
district court’s order, and therefore affirm. We dispense with
oral argument because the facts and legal contentions are adequate-
ly presented in the materials before the court and argument would
not aid the decisional process.
AFFIRMED
2
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414 So.2d 226 (1982)
Elena VELIZ and Gilberto Veliz, Her Husband, Appellants,
v.
AMERICAN HOSPITAL, INC., Appellee.
No. 81-1229.
District Court of Appeal of Florida, Third District.
May 4, 1982.
As Corrected on Denial of Rehearing June 7, 1982.
*227 Rudolph Browd, Miami, for appellants.
Adams & Hill and Jeffrey C. Fulford, Orlando, for appellee.
Before HENDRY, DANIEL S. PEARSON and FERGUSON, JJ.
FERGUSON, Judge.
This appeal is taken from a Final Judgment entered on a jury verdict finding that appellee, American Hospital, Inc., was not negligent in a medical malpractice action. The first of two issues raised for our review is whether two instructions given the jury as to the standard of care required of nurses were so conflicting and confusing as to necessitate a new trial. By the second point of this appeal, appellant claims prejudicial error caused by a casual communication between the defense representative and a juror during a luncheon recess. The first issue has merit. The second issue is without merit.
On February 5, 1979, appellant was admitted to American Hospital for foot surgery. On February 6th an operation was performed under general anesthesia. Other medications were subsequently administered post-operatively. On February 7, 1979 at approximately 9:30 A.M. appellant rang the nurse's bell for assistance. The call was answered by a nurse on duty who helped appellant to the bathroom but then left her alone. While appellant was attempting to undress and wash, she experienced dizziness and fell backwards, injuring her lower back on the bathtub. The question before the jury was whether leaving the appellant in the bathroom unattended, while she was still under the influence of sedative medication, was below the standard of care required by health care providers.
At the conclusion of all the evidence, a charge conference was held at which time defendant requested a special jury instruction[1] which was objected to by appellant. The trial court sustained the objection and indicated that the instruction would not be given. However, the trial court did read the first part of the challenged instruction to the jury, as follows:
The practice of medicine is not an exact science and nurses are not to be held liable for honest errors of judgment.
The instruction given to the jury immediately before the above-challenged instruction was Standard Jury Instruction 4.2(a) which reads:
Negligence is the failure to use reasonable care. Reasonable care on the part of a hospital is the use of that knowledge, skill and care which is generally used in similar cases and circumstances by hospitals in communities having similar medical standards and available facilities.
Appellant contends the instruction is erroneous because it is confusing as to the duty of care owed to the patient and suggests conflicting standards of proof. We agree.
This subject was considered by the Supreme Court Committee on Standard Jury Instructions which thought it deserving of a specific recommendation. That recommendation is found as a note following Standard Jury Instruction 4.2(a) and states:
The Committee recommends that no charge be given to the effect that "a physician is not to be held liable for an honest error in judgment" and that "it must be shown that the course he pursued was clearly against the course recognized as correct by his profession." The *228 charge is confusing, difficult of application and argumentative.[2]
The Florida Supreme Court's decision in Allstate Insurance Company v. Vanater, 297 So.2d 293 (Fla. 1974) is directly applicable in this case. In it, the Supreme Court held that the trial court's instruction (however justifiable under the authorities before the trial judge) gave the jury two different standards of proof to apply, thus giving the jury contradictory instructions. The mere giving of two conflicting standards may, without more, constitute reversible error, even though one of the standards correctly applies. Key West Electric Company v. Albury, 91 Fla. 695, 109 So. 223 (1926); Florida East Coast Railway Company v. Jones, 66 Fla. 51, 62 So. 898 (1913). An instruction which tends to confuse rather than enlighten the jury is cause for reversal if it may have misled the jury and caused them to arrive at a conclusion that otherwise they may not have reached. Finch v. State, 116 Fla. 437, 156 So. 489 (1934). See also Schwab v. Tolley, 345 So.2d 747 (Fla. 4th DCA 1977). Under the instructions in this case, the jury could have found the defendant not liable because it believed the nurse on duty made an honest mistake of judgment while at the same time it also could have believed her conduct constituted a clear departure from the required standard of care.
Finally, this court recently found error in a trial judge's giving jury instructions similar to those in this case, on grounds the instructions were confusing and conflicting. Webb v. Priest, 413 So.2d 43 (Fla. 3d DCA 1982).
Reversed and remanded for a new trial.
NOTES
[1] Special instruction No. 9 as requested reads as follows (but only the underlined portion was given to the jury):
The practice of medicine is not an exact science and nurses are not to be held liable for honest errors in judgment. They are allowed a wide range in the exercise of their judgment and discretion. To hold a nurse liable it must be shown that the course she pursued by [sic] clearly against the course recognized to be acceptable by her profession.
[2] Florida Standard Jury Instructions, Supreme Court Committee on Jury Instructions in Civil Cases, Library of Congress, Catalog No. 67-24732, copyright 1981, The Florida Bar.
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