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103 F.2d 14 (1939)
MANGOL
v.
METROPOLITAN LIFE INS. CO.
No. 6754.
Circuit Court of Appeals, Seventh Circuit.
March 27, 1939.
Nathaniel Rubinkam and William S. Allen, both of Chicago, Ill. (James C. Rich, of Chicago, Ill., of counsel), for appellant.
George J. Haddad and William A. Murphy, both of Chicago, Ill., for appellee.
*15 Before EVANS, TREANOR, and KERNER, Circuit Judges.
TREANOR, Circuit Judge.
Defendant Metropolitan Life Insurance Company prosecuted this appeal from a judgment for the plaintiff in an action brought to recover the face amount of an accident policy issued by the defendant company. There was a trial to the court without a jury upon an agreed statement of facts. The sole question on appeal relating to the merits of plaintiff's claim is whether it falls within the following narrow exception to a general disclaimer of coverage:[1]
"* * * (excepting only septic infection of and through a visible wound caused directly and independently of all other causes by violent and accidental means)."
The evidence discloses that the insured extracted a hair, or hairs, from the inside of his nose with a pair of tweezers. There was some bleeding from the nostril and the insured applied iodine thereto and put some cotton in his nose. On the following day the insured's nose and face, in the region of his nose, were swollen; and two days later a physician was called who diagnosed the case as erysipelas. Later the insured was taken to a hospital where he died the following morning.
The agreed statement of facts includes the following:
"Based upon reasonable medical certainty, the following facts are known concerning erysipelas. It is a septic infection and it is believed in medical circles that infection takes place always because of some break in the skin or mucous membranes, such as a wound, an abrasion, or a scratch. The period of incubation varies between several hours and a few days depending on the virility of the germ and manner in which it entered the system. A pulling of the hair or hairs out of the nostril accompanied by a slight hemorrhage would produce an opening in the skin or mucous membrane which would be visible. Based upon the facts heretofore stated and based on reasonable medical certainty, the erysipelas of which the insured died might or could have been caused by the germ entering the system through the opening of the skin or other lesion caused by the act of the insured by the pulling of the hair or hairs out of his nose as stated above.
"That the terminal broncho-pneumonia is a condition known medically as an end result and usually follows a disease of the character of erysipelas due to the lowered resistance of the patient suffering from erysipelas and in this case did follow the erysipelas."
The trial court entered the following finding of fact: "The court finds that the insured, Nick Mangol, died, on April 25, 1936, from a septic infection of and through a visible wound caused directly and independently of all other causes by violent and accidental means on April 21, 1936."
The evidence was sufficient to support a finding that insured died from a septic infection of and through a visible wound caused directly and independently of all other means by the deceased's plucking a hair, or hairs, from his nose with the tweezers. But appellant contends that the wound was not caused by accidental means within the meaning of the exception of clause 9. In the words of defendant "the facts show conclusively that the wound was not caused by accidental means, but was voluntarily caused by the insured." Defendant's position is clearly indicated by its seventh finding of fact which it submitted to the court and which is as follows: "The Court finds that the opening in the skin through which the infection entered the body of Nick Mangol was the result of an intentional act by said Nick Mangol."
In support of its contention that the visible wound was the result of "an intentional act" by the deceased, defendant cites and relies upon cases which purport to distinguish between accidental means and accidental result and which assert that there can be an accidental result effected by non-accidental means. The substance of the reasoning of these cases seems to be that a wholly unforeseen and unexpected *16 result, which by common understanding is an accidental result, properly can be said to be effected by non-accidental means if the "means" takes the form of a voluntary act, even though the actor had no intention of causing the result which is admittedly accidental in the sense that it was not anticipated and was not the usual and probable result of the intended act.
On the other hand, in support of the proposition that "the facts show conclusively that the accident was not caused by accidental means but was voluntarily caused by the insured," defendant argues that deceased knew that "extracting a hair from the nose or any place always may cause a wound"; and that he "certainly knew or should have known that such wound may be a serious one"; and that "he therefore extracted a hair from his nose with full knowledge of the possible consequences." The foregoing argument is in essence an application of the well known rule that a person is presumed to intend the natural and probable consequences of his acts. If a visible wound had been the natural and probable consequence of deceased's act of plucking a hair, or hairs, from his nose, then there would have been at least a presumption that he intended to produce such wound. The agreed statement of facts recites that "a pulling of the hair or hairs out of a nostril accompanied by a slight hemorrhage would produce an opening in the skin or mucous membrane which would be visible." The foregoing does not, and is not intended to, state as a fact that a hemorrhage or visible wound would naturally and probably accompany, or result from, the plucking of a hair, or hairs, from the nostril. The agreed statement of facts furnishes no basis either for an inference of fact or a presumption that the deceased intended to produce the visible wound which the District Court was clearly justified in finding did result from the deceased's act of plucking the hair, or hairs, from his nose.
In view of the foregoing our question reduces to this: If an act is performed with the intention of accomplishing a certain result, and if in the attempt to accomplish that result, another result, unintended and unexpected and not the natural and probable consequence of the intended act, in fact occurs, must it be said, as a matter of law, that the unintended result was not effected by "accidental means" within the meaning of the policy exception?
This Court had occasion to consider the foregoing question in New York Life Ins. Co. v. Kassly.[2] The facts of that case are not distinguishable from the facts of the instant case. It is true that the wording of the pertinent provisions of the policy of the Kassly case and of the policy in the instant case is not the same, but in the course of the opinion in the Kassly case this Court demonstrated the impossibility of rationally distinguishing between "accidental means" and "accidental results," and approved the doctrine "that an effect which cannot be reasonably anticipated from use of means producing it by one not intending to produce such effect is caused by accidental means within the terms of an accident policy which limits liability to death from accidental means."
Our question is whether the visible wound was caused by accidental means, and its answer involves the factual analysis and reasoning of the Kassly opinion. Under the doctrine of Erie R. Co. v. Tompkins,[3] the Kassly case is not a direct authority for decision in the instant case in which we must apply the law of Illinois. But the discussion of the relation between "accidental means" and "accidental injury" in the opinion of the Kassly case is especially helpful in our analysis of the decisions of the Supreme and Appellate courts of Illinois since they have recognized as sound the same reasoning which is found in the opinion in the Kassly case.
In Vollrath v. Central Life Insurance Company of Illinois[4] death was caused by paralysis of the respiratory organs, resulting from the administration of ether in preparation for an operation to remove the tonsils of deceased, who apparently was in suitable condition for such an operation. The deceased submitted voluntarily to the anesthetic and the means employed were those usually and customarily adopted by reputable physicians. The Appellate Court held that death resulted from accidental means within the terms of a double indemnity clause of a policy of life insurance, and repudiated, as a divergence from the law of Illinois, the doctrine expressed *17 in the following statement: "If the means which cause an injury are voluntarily employed in the usual and expected way, the resulting injury is not produced by accidental means within the meaning of an accident insurance policy, even though it was entirely unusual, unexpected, and unforeseen."
In Schleicher v. General Accident, Fire & Life Assurance Corporation[5] the court made the following statement: "Notwithstanding what some of the other courts have said concerning cases involving the same question, we are of the opinion the courts of Illinois are committed to the rule announced in 4 Cooley's Briefs on Insurance 3156: `An effect which is not the natural or probable consequence of the means which produced it, an effect which does not ordinarily follow and cannot be reasonably anticipated from the use of such means, an effect which the actor did not intend to produce and which he cannot be charged with the design of producing, is produced by "accidental means."'"
In Paoli v. Loyal Protection Insurance Company[6] the insured sustained strain by lifting a sack of cement which caused bursting of a blood vessel in his brain. The Appellate Court held that the evidence warranted a verdict that the insured came to his death by accidental means. The court relied especially on United States Mutual Accident Ass'n v. Barry[7] and approved the following excerpt from the Barry case: "* * * that if a result is such as follows from ordinary means, voluntarily employed, in a not unusual or unexpected way, it cannot be called a result effected by accidental means; but that if, in the act which precedes the injury, something unforeseen, unexpected, unusual, occurs which produces the injury, then the injury has resulted through accidental means."
In the case of Higgins v. Midland Casualty Company[8] the court stated that the chief question in dispute was "whether the sunstroke was the result of `accidental means,' as that term is used in the policy." And the court further stated that counsel for appellee was insisting that if the insured "suffered the sunstroke when and while he was doing just what he intended to do and in the way he intended, such sunstroke is not sustained through accidental means." The court quoted with approval: "The proper and true test, in all instances of voluntary action, is that defined in the Barry Case. If in the act which precedes the injury, though an intentional act, something unforeseen, unexpected and unusual occurs, which produces the injury, it is accidentally caused." Quoted by Ill. Supreme Court from Bryant v. Continental Casualty Company, 107 Tex. 582, 182 S.W. 673, L.R.A.1916E, 945, Ann.Cas.1918A, 517.
Defendant urges that the Vollrath and Schleicher cases, supra, have been nullified and in fact overruled by Ebbert v. Metropolitan Life Ins. Co.[9] There are statements in the opinion of the Appellate Court in the Ebbert case which seem to be in conflict with the statements and reasoning of the Appellate Court in the Vollrath case. But the opinion and decision of the Supreme Court of Illinois in the Ebbert case cannot be said to affect the reasoning and holding of the Vollrath case in respect to the point of "accidental means." Such must be the conclusion from the following statement in the opinion: "The Appellate Court reversed the judgment in the present case on two grounds. The first was, that if the death was caused by the ether wholly and independently of all other causes, this was not a death by `accidental means.' The second ground was that other diseases or bodily infirmities had contributed to the death. In the view we take of the case the question of the correctness of the first ground does not arise."
The Appellate Court's opinion in the Ebbert case contains no criticism of the doctrine of the Vollrath and Schleicher cases and does not discuss the facts of either of the earlier cases. If the Appellate Court thought the facts in the Ebbert case distinguishable, the finding that the injury was not caused by "accidental means" could not be given the effect of overruling the doctrine of the earlier cases. In determining the law of a state, federal courts do not review decisions of its courts for error of law or fact, and if a line of decisions clearly establishes a *18 rule of law which has been approved by the court of last resort of a state, such rule must be recognized until it clearly appears that it has been overruled by the court of last resort.
We conclude that under the law of Illinois the agreed statement of facts justified a finding that there was a visible wound caused directly and independently of all other causes by violent and accidental means. In the words of the Barry case, supra, quoted and relied upon by the Illinois Supreme and Appellate Courts, it was for the trial court to determine whether "in the act which precedes the injury something unforeseen, unexpected [or] unusual, occurs, which produces the injury," [131 U.S. 100, 9 S.Ct. 759] the injury in the instant case being the visible wound in the nostril.
Defendant assigns as error the action of the trial court in striking paragraph 3 of the answer of the defendant which averred failure of the plaintiff to perform conditions of the policy relating to notice. It is defendant's contention that a provision of the policy which requires that "written notice of injury on which claim may be based must be given to the company within twenty days after the accident causing such injury" was not complied with.
The court sustained plaintiff's motion to strike paragraph 3 of defendant's answer on the ground that the paragraph did not state a good and sufficient defense. The plaintiff supports the action of the trial court on the ground that "injury" as used in paragraph four of the policy is limited to a non-fatal injury and, consequently, that paragraph 4 does not require the giving of a written notice where the claim under the policy is based on the loss of life of the insured. Plaintiff also urges that sufficient notice was given the defendant company within the 20 day period if it be assumed that the word "injury" is broad enough to include death of the insured. The information which plaintiff claims was sufficient notice was furnished in connection with the proofs of death submitted by the plaintiff in connection with her claim on other policies. In this proof of death the defendant was informed that the immediate cause of Mangol's death was "erysipelas terminal broncho pneumonia," and that the deceased also was insured under the accident policy in suit.
Clearly paragraph 4 does not require the notice of injury to include any of the details of the accident causing the injury. The foregoing written information, given within 20 days of the accident, complied with notice requirements which are in substance that a notice of injury given by or in behalf of the insured or beneficiary "with particulars sufficient to identify the insured shall be deemed to be notice to the company."[10]
Also there is merit in plaintiff's contention that the word "injury" as used in paragraph 4 must be held to mean a "bodily harm" that does not result in death. In Ziolkowski v. Continental Casualty Company,[11] relied upon by plaintiff in support of the foregoing, the Supreme Court of Illinois held that the word "injury" as used in an accident policy then before the court should be limited to a non-fatal injury.
Plaintiff points out that in the instant policy under the subject Risks Excluded the language discriminates between fatal and non-fatal injuries, accident and death, and "any other loss."[12]
It was not error to strike out defendant's third paragraph of answer.
The judgment of the District Court is affirmed.
NOTES
[1] (clause 9 of Insurance Policy) "This insurance shall not cover * * * death or any other loss caused wholly or partly, directly or indirectly, by disease or bodily or mental infirmity * * * nor shall it cover injury, disability, death or any other result caused wholly or partly, directly or indirectly, by ptomaines or disease germs or any kind of infection, whether introduced or contracted accidently or otherwise (excepting * * *"
[2] 7 Cir., 87 F.2d 236, 240.
[3] 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487.
[4] 243 Ill.App. 181.
[5] 240 Ill.App. 247.
[6] 289 Ill.App. 87, 6 N.E.2d 909, 912.
[7] 131 U.S. 100, 9 S.Ct. 755, 33 L.Ed. 60.
[8] 281 Ill. 431, 118 N.E. 11.
[9] 289 Ill.App. 342, 7 N.E.2d 336; Id., 369 Ill. 306, 16 N.E.2d 749, 751.
[10] See Lyon v. Metropolitan Life Ins. Co., 101 F.2d 658, Circuit Court of Appeals Seventh Circuit, February 2, 1939.
[11] 365 Ill. 594, 7 N.E.2d 451.
[12] "Clause 9. * * * nor shall it (this insurance) cover injuries, fatal or non fatal, * * * nor shall it cover accident, injury, disability, death or any other loss caused * * *; nor shall it cover injury, disability, death or any other result * * *"
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693 F.Supp. 80 (1988)
MEDITERRANEAN SHIPPING CO., Plaintiff,
v.
ELOF HANSSON, INC. (OF SWEDEN) and Elof Hansson, Inc. (Of New York), Defendants.
No. 87 Civ. 0468 (BN).
United States District Court, S.D. New York.
August 29, 1988.
*81 Deorchis & Partners, New York City, for plaintiff; Vincent M. DeOrchis, Craig V. Rasile, of counsel.
Haight, Gardner, Poor & Havens, New York City, for defendants; R. Glenn Bauer, Mark C. Flavin, Paul E. O'Brien, of counsel.
MEMORANDUM OPINION
NEWMAN, Senior Judge United States Court of International Trade, sitting by designation:
Introduction
In this admiralty case brought under 28 U.S.C. § 1333 plaintiff, Mediterranean Shipping Co. ("Mediterranean"), an ocean carrier based in Geneva, Switzerland, seeks recovery of $41,580.91 for unpaid freight charges under two bills of lading from defendant Elof Hansson, Inc. (Of Sweden) ("Hansson"), a commodities trading house and the shipper.[1] The two bills of lading under which plaintiff seeks to recover, state: "FREIGHT PREPAID." Plaintiff asserts that despite the fact the bills of lading show the freight charges were "PREPAID," plaintiff in fact did not receive payment, but rather extended credit to defendant. Hansson asserts that pursuant to its "Cost and Freight" ("C. & F.")[2] contract with its supplier, Fenesty, Inc. ("Fenesty"), and letter of credit in favor of the latter, Hansson paid Fenesty all freight charges due on the bills of lading in reliance upon their being marked prepaid by plaintiff's local agent, Containership Agency, Inc. ("Containership"). Unfortunately, Fenesty terminated its business without paying over to plaintiff the freight monies Fenesty had received from defendant under the C. & F. contract. Hansson insists that under these circumstances it should not be required to pay the freight charges twice.
Fenesty made the cargo booking for the shipments in question with Containership through Leyden Shipping Corp. ("Leyden"), a New York based freight forwarder.[3] Containership's action in this case will be deemed the action of its principal, Mediterranean.
The Record
As a preliminary matter, the court notes the parties requested that the court proceed under Local Admiralty Rule 16 for a summary determination and submitted depositions and other documentary evidence. However, the court declined to proceed under Rule 16 because plaintiff's claim exceeds the $25,000 limitation imposed by the rule. See Order filed June 20, 1988.
A nonjury trial was held on August 17, 1988 at which the parties, by agreement, submitted solely the depositions and other documentary evidence previously presented under Local Rule 16.
The record includes the depositions of the following persons to which reference is made herein:
1. Lars Edlund, Vice President in charge of the Shipping Division of Hansson (Exh. 1).
2. Allen Clifford, a Line Manager for Containership (Exh. 2).
*82 3. Brian S. Leyden, Vice President and Secretary of Leyden (Exh. 3).
4. Nicola Arena, Vice President of Containership (Exh. 4).
After presentation of oral arguments, the court informed counsel that judgment would be entered for defendant dismissing the complaint with written findings of fact and conclusions of law to follow. This memorandum opinion constitutes the court's findings of fact and conclusions of law in accordance with Rule 52(a), Fed.R. Civ.P.
Findings and Conclusions
I.
In November 1985 Hansson purchased thirty containers of polypropylene granules from Fenesty on a C. & F. basis to be shipped by Fenesty from Houston, Texas to Dar Es Salaam, Africa (Exh. 1, pp. 30-32; Exh. 10; Exh. B, telex dated November 26, 1985). On December 20, 1985 fourteen containers were placed aboard the M/V Tumilco for carriage from Houston to Dar Es Salaam. The freight charge for this shipment was $27,715.43 under bill of lading No. 1604 (Exh. 5).
On January 14, 1986 seven containers of the polypropylene granules were placed aboard the M/V Tuxpan for carriage. The freight charge for this shipment was $13,865.78 under bill of lading No. 1036 (Exh. 7).[4]
Hansson arranged for payment to Fenesty through a Swedish bank under a letter of credit: payment was to be made to Fenesty under the letter of credit upon presentation of certain documents, including three bills of lading marked "freight prepaid" and indicating "Elof Hansson" as shipper. (Exh. 1, p. 32; Exh. 9). Although Leyden booked the shipments with Containership in Fenesty's name, Hansson insisted upon appearing as shipper on the bills of lading because Hansson did not wish to reveal the name of the supplier, Fenesty, to the ultimate buyer of the goods, Kabwe Industrial Fabrics, Ltd. (Exh. 1, p. 28). Hansson's designation as shipper on the bills of lading is standard operating procedure for Hansson (Id.), and generally it is customary practice in the shipping industry not to reveal a supplier's name on a bill of lading (Exh. 1, p. 46). Plaintiff's bald assertion at oral argument that Fenesty was acting as an agent of Hansson is completely without merit. The only relationship between Fenesty and Hansson established by the record is that of seller and buyer under the C. & F. contract.
Fenesty turned to Leyden to arrange for shipment of the polypropylene granules to Dar Es Salaam. Leyden contacted Containership, negotiated a freight rate, and made a cargo booking on behalf of Fenesty (Exh. 2, pp. 15, 23). Further, Fenesty prepared the bills of lading marked "freight prepaid" which were then forwarded directly to and issued by Containership without payment of the freight charges (Exh. 3, pp. 13, 23). The decision to release these prepaid bills of lading without any credit arrangement having been effected with Hansson was made unilaterally by personnel at Containership (Exh. 2, pp. 59-60) "in order to remain competitive" (Exh. 4, p. 7). No evidence was submitted by plaintiff of any credit arrangement with Hansson in the form of "Outward Freight Bills" or in any other format. See Farrel lines, Inc. v. Titan Indust. Corp., 306 F.Supp. 1348, 1350 (S.D.N.Y.), aff'd on opinion below, 419 F.2d 835 (2d Cir.1969), cert. denied, 397 U.S. 1042, 90 S.Ct. 1365, 25 L.Ed.2d 653 (1970) ("Farrell I").
A shipper may enter into a "loyalty" contract with a "conference" of carriers in which he agrees to ship exclusively on conference vessels in exchange for reduced rates. See 46 U.S.C. § 813a. Further, as observed in Strachan Shipping Co. v. Dresser Industries Inc., 701 F.2d 483 (5th Cir.1983):
Besides the loyalty contract, the conference also provides credit agreements. The general purpose of a conference *83 credit agreement is to provide for bills of lading marked prepaid prior to receipts of payment by the carrier. The release of the bill of lading is in essence an extension of credit by the carrier to the shipper. The shipper agrees to pay within a certain time after the ship sails.
Id. at 485.
Plaintiff, concededly, is not a signatory to the North Atlantic Conference (Exh. 4, p. 7), and consequently no formal credit arrangement between the parties may be predicated on a conference credit agreement.
Contrary to Arena's deposition testimony that Leyden had requested an extension of credit on behalf of Hansson (Exh. 4, p. 31), Leyden testified that he had never heard of Hansson until this lawsuit (Exh. 3, pp. 8, 30), and in any event Leyden was never employed by or acted as an agent of Hansson. While Hansson had previously done business with Mediterranean, at no time prior to November 1986 did Hansson ever communicate with Leyden, Mediterranean, or Containership regarding the subject shipments (Exh. 2, p. 73; Exh. 3, p. 8; Exh. 4, p. 19).
In short, the court finds that Hansson never desired, requested, knowingly received or benefited from the purported extension of credit by Containership to Hansson covering the subject prepaid bills of lading. It is plain from the record that because of the excellent reputations of Hansson and Leyden, Containership merely "assumed" that the freight charges would somehow be paid (Exh. 13, p. 2; Exh. 2, pp. 54-56, 59-60, 78-79), but in point of fact there were no credit arrangements whatever between the parties.[5] Under these circumstances, the court finds that the release of the prepaid bills of lading by Containership did not constitute an extension of credit to Hansson.
II.
In the shipping industry, a bill of lading acknowledging that freight has been prepaid normally means that the carrier has received payment of the freight charges from the shipper prior to release of the bills of lading. However, it is not unusual for carriers to release bills of lading marked "freight prepaid" without actual payment of the freight charges where the carriers have a formal credit agreement with shippers or other credit relationship with freight forwarders (Exh. 1, pp. 36-37; Exh. 3, p. 17; Exh. 4, p. 26). See, e.g., Farrell I; Farrell Lines, Inc. v. American Motorists Ins. Co., 572 F.Supp. 939 (S.D.N. Y.1983), aff'd on opinion below, 728 F.2d 147 (2d Cir.1984); Evergreen Line v. Interstate Paper Sales Co., 1981 A.M.C. 2146 (S.D.N.Y. April 7, 1981); Koninklijke Nedlloyd BV v. Uniroyal, Inc., 433 F.Supp. 121 (S.D.N.Y.1977). See also Compania Sud Americana De Vapores v. Atlantic Caribbean Shipping Co., 587 F.Supp. 410, 412 (S.D.Fla.1984); Naviera Mercante S.A. v. Northrup King Co., 491 F.Supp. 508 (S.D.Tex.1980); Inversiones Navieras Imparca, C.A. v. Polysar Int'l. S.A., 465 F.Supp. 102 (S.D.Fla.1979); Alcoa S.S. Co. v. Graver Tank & Mfg. Co., 1953 A.M.C. 844, 124 N.Y.S.2d 77 (N.Y.City Ct.1953).
Here, as we have noted, Containership not only released the bills of lading to Fenesty marked "freight prepaid," but there is no evidence that plaintiff had any credit agreement with defendant;[6] and defendant was not even apprised that plaintiff intended to extend credit until November 1986 nearly ten months after issuance of the subject bills of lading during which period plaintiff was pursuing Leyden for *84 payment.[7] Furthermore, and understandably, defendant relied upon the prepaid bills of lading in paying the freight monies to Fenesty under a letter of credit requiring that freight prepaid bills of lading be presented. Defendant contends, therefore, that plaintiff should be estopped from claiming that freight charges have not been paid.
III.
Hence, the pivotal question is whether the principle of equitable estoppel should be invoked to preclude plaintiff's recovery of freight on the prepaid bills of lading and the double payment of freight by defendant. The court finds that equitable estoppel should be applied in the instant case.
Fundamentally, of course, the bill of lading is a contract of carriage. Asbestos Corp. v. Compagnie De Navigation Fraissinet Et Cyprien Fabre, 345 F.Supp. 814, 819 (S.D.N.Y.1972), aff'd, 480 F.2d 669 (2d. Cir.1973). See also Waterman S.S. Corp. v. 350 Bundles of Hardboard, 603 F.Supp. 490 (D.Mass.1984). Plaintiff argues that under the subject bills of lading the shipper is liable to the carrier for ocean freight charges no matter how inequitable the conduct of the carrier or its agent, even where this results in double payment. In that connection plaintiff relies upon Flota Mercante Gran Columbiana S.A. v. Florida Constr. Equip. Inc., 798 F.2d 143, 145 (5th Cir.1986); Bartlett-Collins Co. v. Surinam Navigation Co., 381 F.2d 546, 549 (10th Cir.1967); Compania Anomia Venezolana De Navegacion v. A.J. Perez Export Co., 303 F.2d 692, 696 (5th Cir.), cert. denied, 371 U.S. 942 (1962). See also Strachan Shipping Co., 701 F.2d at 489 (carrier did not relieve shipper from liability notwithstanding carrier's initial efforts to collect from freight forwarder).
The court disagrees with plaintiff's position and declines to follow the rationale in the above-cited cases, which "absolutist approach" has been rejected in the Second Circuit and in several other cases. See Farrell I, 306 F.Supp. at 1349; Compania, 587 F.Supp. at 412-13; Naviera Mercante, 491 F.Supp. at 510; Inversiones, 465 F.Supp. at 103; Uniroyal, 433 F.Supp. at 127. See also Naviera Neptuno, 709 F.2d at 665 n. 3.
The Supreme Court, while disfavoring judicial application of affirmative defenses against carriers in I.C.C. credit regulation cases, has carved out a special category for the so-called "double payment" cases: "Each and all of them involved a carrier's misrepresentation, such as false assertion of prepayment on a bill of lading, upon which the consignee detrimentally relied only to find itself later sued by the carrier for the same charges." Southern Pac. Trans. Co. v. Commercial Metals Co., 456 U.S. 336, 351, 102 S.Ct. 1815, 1824, 72 L.Ed. 2d 114 (1982). And "[t]he Court in Southern Pacific did not foreclose implication of an affirmative defense to the shipper ... in the so-called `double payment' cases." Flota, 798 F.2d. at 147 n. 1 (emphasis added).[8] The parties have not cited and this court's research has failed to discover any prior reported decisions involving the application of equitable estoppel on behalf of a shipper that paid the freight to a supplier in reliance on prepaid bills of lading; and from that perspective this case is one of first impression. The court finds that although defendant as the shipper of record incurred liability for the freight charges on the bills of lading, the present case, which involves prepaid bills of lading, is an appropriate one for the application of equitable estoppel where otherwise unjustifiably there would be liability by defendant for double payment.
*85 Hansson's letter of credit (Exh. 9) required Fenesty to present "freight prepaid" bills of lading. Essentially, then, it was in reliance upon these "prepaid" bills of lading that Hansson paid Fenesty under the letter of credit in conformance with their C. & F. contract. That contract required Fenesty to ship the merchandise under prepaid bills of lading, and clearly Hansson as a matter of law was entitled to rely upon plaintiff's marking the bills prepaid. See U.C.C. § 2-320(2)(b).
Since the bills of lading were not marked "freight collect," Hansson, as the purchaser of the merchandise under a C. & F. contract, was entitled to receive from Fenesty, the seller, documentary evidence that Hansson was not obligated to pay the freight. Fenesty, therefore, under its C. & F. contract with Hansson was required to obtain a receipt "showing that the freight has been paid or provided for." U.C.C. § 2-320(2)(b).[9]See Waterman, 603 F.Supp. at 492. As pointed out in Note 5 of the Official Comments to section 2-320, "The usual notation in the appropriate space on the bill of lading that the freight has been prepaid is a sufficient receipt, as at common law." Consequently, then, as a matter of law Hansson was entitled to rely on the prepaid bills of lading as evidence of payment. Moreover, there can be no doubt that in fact Hansson relied on the prepaid bills of lading as proof that the freight charges had been paid by Fenesty. See Exh. 1, pp. 44-46. As previously mentioned, plaintiff never informed defendant that the former intended to extend the latter credit and defendant did not benefit from plaintiff's lax credit practices.
Concededly, where credit arrangements have been entered into with shippers, carriers customarily issue bills of lading marked "freight prepaid" without payment of the freight charges and thus extend credit to the shippers. Here, however, since plaintiff had no credit agreement with defendant, marking the bills of lading "freight prepaid," when in fact there was no payment, constituted a misrepresentation by plaintiff and defendant relied upon the misrepresentation of payment on the bills of lading. In addition to plaintiff's marking the bills of lading "freight prepaid," there is nothing in the record to charge Hansson with notice that plaintiff intended to unilaterally extend credit to defendant upon release of the "prepaid" bills of lading to Fenesty. The short of the matter is Hansson never requested, expected or desired any extension of credit on the subject bills of lading.
While plaintiff cannot be charged with notice of the C. & F. contractual arrangement between Hansson and Fenesty, nonetheless it is equitable that plaintiff, which chose to issue the prepaid bills of lading without payment and astonishingly, without even a credit agreement with defendant, should bear the risk of loss. In light of U.C.C. § 2-320, it would be absurd to hold that defendant was under a duty to require Fenesty to submit proof of payment in addition to the bills of lading marked "freight prepaid," or was under a duty to double-check with plaintiff to learn whether the bills of lading were actually prepaid, as represented on their face. See Consolidated Freightways Corp. of Del. v. Admiral Corp., 442 F.2d 56, 60 (7th Cir. 1971). See also Southern Pac. Transp. Co. v. Campbell Soup Co., 455 F.2d 1219 (8th Cir.1972); Missouri Pac. R.R. Co. v. National Milling Co., 409 F.2d 882 (3d Cir.1969). The affirmative defense of equitable estoppel in prepaid freight cases was acknowledged by the Second Circuit in In Re Roll Products, Inc., 662 F.2d 150, 154 n. 7 (2d Cir.1981), citing the Consolidated Freightways and Campbell Soup cases.
Finally, during oral argument plaintiff's counsel called the court's attention to the recent decision in Sea-Land Serv., Inc. v. Amstar Corp., 690 F.Supp. 246 (S.D.N.Y. 1988), wherein judgment was entered for the ocean carrier against the shipper for unpaid freight charges on shipments of refined *86 sugar. Sea Land, however, is entirely inapposite to the present litigation since that case does not involve the issue of whether the carrier should be equitably estopped because it issued false prepaid bills of lading upon which the shipper relied in disbursing payment to its supplier under a letter of credit.
Interestingly, in Sea-Land, the court found the shipper liable where: (1) all shipments were carried under bills of lading providing that "Payment of ocean freight and charges to a freight forwarder, broker or anyone other than Sea-Land Service, Inc. or its authorized agent shall not be deemed payment to the Carrier and shall be made at payor's sole risk ..."; (2) the tariffs that applied to the shipments provided that the carrier could extend credit when evidence of financial security was furnished; (3) Amstar was an established customer of Sea-Land and the latter had been extending credit to Amstar since 1972; (4) Sea-Land had attempted to arrange for direct billing to Amstar, but Amstar rejected the proposal; and (5) Amstar was on notice that its freight forwarder (to whom Amstar had paid the freight monies) was misappropriating the payments.
In sum, none of the foregoing pertinent factors upon which the court predicated the shipper's liability in Sea-Land are present here, and significantly the equitable estoppel issue arising from prepaid bills of lading was not before the Sea-Land court.
Conclusion
The subject bills of lading were marked by plaintiff "freight prepaid" and such marking was relied upon by defendant in paying Fenesty (its supplier) the freight money under a letter of credit in conformance with the C. & F. contract. Under U.C.C. § 2-320(2)(b) defendant, as a matter of law, was entitled to rely upon the receipt for payment of freight in the bills of lading; in point of fact, defendant relied upon the prepaid bills of lading in paying Fenesty. There was no extension of credit by plaintiff to defendant, since there was no credit agreement between the parties, and defendant never desired, requested or knowingly received the purported extension of credit by Containership.
Under the unfortunate circumstances of this case, plaintiff's lax marking of the bills of lading "freight prepaid" constituted a misrepresentation to defendant that the freight had been paid or provided for. In view of defendant's reliance upon plaintiff's misrepresentation, the court concludes that the principle of equitable estoppel is applicable to preclude a double payment of the freight charges by defendant.
The Clerk of the Court shall enter judgment for defendant pursuant to Rule 58, F.R.Civ.P. that all relief sought by plaintiff be denied.
NOTES
[1] At trial, plaintiff dismissed this action as to Elof Hansson, Inc. (Of New York). All references herein to "defendant" or "Hansson" refer solely to Elof Hansson, Inc. (Of Sweden).
[2] The abbreviated term "C. & F." means: the contract price includes the cost of the goods and the freight charges to the named destination. See U.C.C. § 2-320.
[3] When this action was commenced, Leyden was joined with Hansson as a co-defendant, but subsequently plaintiff voluntarily dismissed this action, without prejudice, as against Leyden. See Order of Judge Daronco filed September 10, 1987.
Although Leyden booked the shipments in the name of Fenesty, there is no dispute that Hansson was the shipper of record on the bills of lading.
[4] A third bill of lading, No. 1609, accounts for the remaining nine containers. The freight charge on this bill of lading was paid by Fenesty to plaintiff (Exh. 13) and is not in dispute in this lawsuit.
[5] Interestingly, as a result of this lawsuit, Containership changed its procedure for extending credit on prepaid bills of lading. Presently, extensions of credit are made only pursuant to a written request of a shipper or freight forwarder (Exh. 4, p. 28).
[6] The court is unable to agree with defendant that there was an extension of credit to Leyden. Although plaintiff initially sought payment from Leyden, there is no evidence that Leyden exchanged due bills for the prepaid bills of lading or that plaintiff otherwise extended credit to the freight forwarder. Moreover, Leyden never received the freight monies from defendant. Accordingly, defendant's contention that plaintiff extended credit to Leyden is not supported by Farrel I, Evergreen or Uniroyal.
[7] This lack of notice of any intention by plaintiff to extend credit to the shipper is significant since there is no evidence in the record that as a matter of local custom the stamping of a bill of lading "freight prepaid" when in fact the freight was not prepaid is an extension of credit to the shipper. Cf. Naveria Neptuno All Int'l. Freight Forwarders, 709 F.2d 663, 665 (11th Cir.1983).
[8] One of the so-called "double-payment" cases cited by the Supreme Court for the application of affirmative defenses against carriers is the decision of the Second Circuit in Farrel I involving a suit against a shipper rather than a consignee.
[9] Under this section, the phrase "provided for" is intended to cover certain situations where the carrier extends credit to a "shipper." See Note 5 in the Official Comments to section 2-320. For purposes of the foregoing section, the seller under a C. & F. contract is the "shipper" vis-a-vis the carrier.
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229 S.W.3d 745 (2007)
Michael W. HARRISON, Appellant,
v.
Shirley J. NEELEY, ED.D., Texas Commissioner of Education and Southside Independent School District By and Through Its Board of Trustees, Appellees.
No. 04-07-00054-CV.
Court of Appeals of Texas, San Antonio.
May 9, 2007.
Robert L. Wilson, III, RL Wilson, P.C., San Antonio, for appellant.
George Warner, Asst. Atty. Gen., Austin, Laura C. Rodriguez, Jose A. De Los Santos, Jr., Tony Resendez, Walsh, Anderson, Brown, Schulze & Aldridge, P.C., San Antonio, for appellees.
Sitting: ALMA L. LÓPEZ, Chief Justice, KAREN ANGELINI, Justice, PHYLIS J. SPEEDLIN, Justice.
OPINION
Opinion by ALMA L. LÓPEZ, Chief Justice.
Michael W. Harrison appeals the trial court's order dismissing the underlying lawsuit for want of jurisdiction based on *746 his failure to exhaust his administrative remedies. The only issue presented on appeal is whether the trial court erred in concluding that Harrison was required to present his claim alleging a violation of the Texas Open Meetings Act ("Act") to the Texas Commissioner of Education prior to filing his lawsuit in district court. We affirm the trial court's order.
BACKGROUND
Harrison was employed as the head football coach for Southside High School in the Southside Independent School District (the "District"). On February 27, 2006, a motion was made to renew Harrison's contract. The motion did not carry. Immediately following this action, the board separately considered an issue regarding the non-renewal of two term contracts. On February 28, 2006, Harrison tendered his resignation.
Harrison filed a petition for review with the Commissioner of Education seeking a review of the decision to non-renew his contract. Harrison stated that the District's superintendent requested and received a letter of resignation from him; however, the letter was submitted under duress, so he withdrew and rescinded it. Harrison sought a determination under section 21.303 of the Texas Education Code ("Code") that he did not receive the notice required by the Code with regard to the decision to non-renew and that the decision was arbitrary and capricious.
The Commissioner dismissed the petition concluding that the Commissioner lacked jurisdiction over the case. The Commissioner concluded that the failure of a motion to renew is not the same as a passage of a motion to non-renew, and the failure of a motion to renew is not appealable under section 21.301 of the Code.
Harrison filed a petition in district court seeking judicial review of the Commissioner's decision. In his petition, Harrison asserted additional claims for breach of contract and declaratory judgment. Harrison later amended his petition to include a claim for violation of the Act. The District filed a plea to the jurisdiction asserting that Harrison had failed to exhaust his administrative remedies with regard to the additional claims. The trial court dismissed the additional claims for lack of jurisdiction, and Harrison appealed the order exclusively as to his claim for violation of the Act.
DISCUSSION
If an administrative body has exclusive jurisdiction, a party must exhaust all administrative remedies before seeking judicial review of the decision. Thomas v. Long, 207 S.W.3d 334, 340 (Tex.2006). Until the party has satisfied this exhaustion requirement, the trial court lacks subject matter jurisdiction and must dismiss those claims without prejudice to refiling. Id.
The parties to this appeal agree that the Commissioner of Education has exclusive jurisdiction to review claims of a person aggrieved by an action or decision of any school district board of trustees that violates the school laws of this state. See TEX. EDUC.CODE ANN. § 7.057(a) (Vernon 2006). The parties disagree as to whether the Act is a school law of the state such that a decision made by a school district in violation of the Act requires the person aggrieved by the decision to exhaust his or her administrative remedies.
The phrase "school laws of this state" is defined to include all statutes contained in titles 1 and 2 of the Code. See TEX. EDUC. CODE ANN. § 7.057(f)(2) (Vernon 2006). Section 26.007(b) of the Code, which is contained in title 2, provides that all public meetings of a school district "must comply *747 with Chapter 551, Government Code." See TEX. EDUC.CODE ANN. § 26.007(b) (Vernon 2006). Chapter 551 of the Government Code contains the provisions of the Act. See TEX. GOV'T CODE ANN. §§ 551.001-551.146 (Vernon 2004 & Supp.2006). By incorporating the Act into title 2 of the Code, the Legislature incorporated the Act into the definition of a school law of the state; therefore, a claim by a person aggrieved by a decision made by a school district in violation of the Act requires the person to exhaust his or her administrative remedies. See TEX. EDUC.CODE ANN. § 7.057(a) (Vernon 2006); see also Stockdale v. Meno, 867 S.W.2d 123, 124 (Tex. App.-Austin 1993, writ denied) (considering appeal of trial court's judgment affirming Commissioner's decision that school district did not violate the Act); Lang. v. Grand Prairie Ind. Sch. Dist., No. 187-R3-799 (Comm'r Educ.2000) (concluding Commissioner has jurisdiction over claims alleging a violation of the Act); Reeves v. Aledo Ind. Sch. Dist, No. 106-R10-496 (Comm'r Educ.1999) (same); but see Point Isabel Ind. Sch. Dist. v. Hinojosa, 797 S.W.2d 176, 178-79 (Tex.App.-Corpus Christi 1990, writ denied) (considering appeal from lawsuit brought in district court complaining of a violation of the Act by the board without addressing exhaustion requirement). Because Harrison failed to exhaust his administrative remedies with regard to his claim asserting a violation of the Act, the trial court did not err in granting the plea to the jurisdiction and dismissing the claim.
The trial court's order is affirmed.
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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
October 24, 2006
No. 06-11393 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 05-00005-CR-FTM-33-SPC
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JOSE VITA,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(October 24, 2006)
Before BLACK, MARCUS and WILSON, Circuit Judges.
PER CURIAM:
Jose Vita appeals his sentence of 240 months’ imprisonment, imposed after
he pled guilty to conspiracy to possess with intent to distribute more than 1,000
marijuana plants, 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(A)(vii), and possession with
intent to distribute more than 1,000 marijuana plants, 21 U.S.C. § 841(a)(1),
(b)(1)(A)(vii). Vita asserts the district court erred by: (1) applying a sentencing
enhancement pursuant to 21 U.S.C. § 851 because the fact of his prior conviction
was not included in the indictment or admitted by him; (2) applying an
aggravating-role enhancement, pursuant to U.S.S.G. § 3B1.1(a), based on safety-
valve statements from other co-conspirators when he did not have advance notice
or a meaningful opportunity to comment on this evidence during the sentencing
hearing; (3) applying a four-level aggravating-role enhancement, noting the facts
support only a two-level enhancement; and (4) finding him accountable for over
11,000 marijuana plants, noting the number of plants found on his property totaled
between 6,000 to 7,000 and that the record is silent as to whether any of the
marijuana found at the other grow house locations could be counted as “marijuana
plants” under U.S.S.G. § 2D1.1. The district court did not err, and we affirm
Vita’s sentence.
As to Vita’s argument that the fact of his prior conviction was not included
in his indictment or admitted, we review preserved constitutional claims de novo,
2
but reverse for harmful error only. United States v. Paz, 405 F.3d 946, 948 (11th
Cir. 2005). “[A] district court does not err by relying on prior convictions to
enhance a defendant’s sentence.” United States v. Shelton, 400 F.3d 1325, 1329
(11th Cir. 2005). In Almendarez-Torres v. United States, the Supreme Court held
that prior convictions could be considered and used to enhance a defendant’s
sentence without having been alleged in the indictment or proved beyond a
reasonable doubt. 118 S. Ct. 1219, 1231-32 (1998). Subsequent decisions,
namely, Apprendi v. New Jersey, 120 S. Ct. 2348 (2000), Blakely v. Washington,
124 S. Ct. 2531 (2004), and United States v. Booker, 125 S. Ct. 738 (2005) have
not disturbed its holding. See United States v. Camacho-Ibarquen, 410 F.3d 1307,
1316 (11th Cir.), cert. denied, 126 S. Ct. 457 (2005). “Although recent decisions,
including Shepard v. United States, 125 S. Ct. 1254 (2005), may arguably cast
doubt on the future prospects of Almendarez-Torres’s holding regarding prior
convictions, the Supreme Court has not explicitly overruled Almendarez-Torres.
As a result, we must follow Almendarez-Torres.” Id. at 1316 n.3.
Vita acknowledges that whether a district court can enhance a sentence
based on prior convictions not alleged in the indictment nor proven beyond a
reasonable doubt survives solely on the continued vitality of Almendarez-Torres.
3
As we have held the decision in Almendarez-Torres is still good law, Vita’s issue
fails. See id. at 1315-16.
As to Vita’s remaining arguments concerning the Guidelines, “[a]n error in
the district court’s calculation of the advisory Guidelines range warrants vacating
the sentence, unless the error is harmless. . . . A Guidelines miscalculation is
harmless if the district court would have imposed the same sentence without the
error.” United States v. Williams, 456 F.3d 1353, 1360 (11th Cir. 2006). We need
not address Vita’s alleged Guidelines errors because it is clear that, even if the
court erred as Vita alleged, any error was harmless. Vita is subject to a mandatory
minimum sentence of 240 months’ imprisonment pursuant to 21 U.S.C.
§ 841(b)(1)(A) regardless of the district court’s Guidelines calculation.1
AFFIRMED.
1
We note that Vita does not argue his sentence is unreasonable.
4
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337 F.Supp. 118 (1972)
UNITED STATES ex rel. John L. LEWIS, Petitioner,
v.
Melvin LAIRD, as Secretary of Defense, et al., Respondents.
Civ. A. No. S-4964.
United States District Court, S. D. Illinois, S. D.
February 1, 1972.
Edward T. Stein, Chicago, for petitioner.
Max J. Lipkin, Asst. U. S. Atty., Peoria, Ill., Max Goodwin, Asst. U. S. Atty., Springfield, Ill., for respondents.
DECISION AND ORDER
ROBERT D. MORGAN, District Judge.
This case arises on petition for habeas corpus or mandamus by a member of the United States Army Reserve in a unit at Decatur, Illinois. The court is satisfied of jurisdiction and venue. Neither is disputed. Petitioner seeks voiding of a *119 military order to report for active duty for training and also seeks discharge from the military service. By order of court dated December 30, 1971, the order to report for active duty was temporarily suspended as to petitioner to permit hearing and consideration of the case.
In answer to an order to show cause why the requested relief should not be granted, defendants do not deny any facts alleged. They expand upon them with some documentation, and ask dismissal of the petition as a matter of law. At a hearing on January 7, 1972, it appeared that there is no substantial dispute on any material fact. Petitioner introduced one exhibit, being a written acknowledgment of understanding of service requirements executed by him on the date of enlistment (Pet. Ex. 1). No testimony was offered and the matter was submitted to the court on the record before it.
The facts before the court are that petitioner enlisted in the Army Reserve on March 23, 1970 by executing an Enlistment Contract, a copy of which is attached to the Answer herein, as well as the acknowledgment mentioned above. He has since performed assigned duties thereunder, except for the order to report for active duty which is here challenged. The enlistment was with the knowledge of and upon recommendation of petitioner's then and present employer, a consulting engineering firm. The basis of challenge to the order to report and request for discharge is that Army regulations and the enlistment contract itself specifically provided for entry on active duty for limited term training "within 120 days" after enlistment, and that such entry was ordered instead over 20 months (some 600 days) after enlistment. Petitioner asserts that this is a material breach of the enlistment contract, justifying recision thereof. He alleges further that his present work, developed in the interim, is of such critical community importance as to justify discharge from the Army Reserve under Army regulations. Denial of the formal request for discharge by the Army and the order to report for active duty precipitated this law suit. Defendants deny only the legal conclusions that the contract of enlistment should be rescinded as a matter of law and that any case for discharge or delay has been made as a matter of law on the basis of petitioner's present work. Both sides have furnished the court with citations to numerous prior published decisions of courts of review which they believe support their respective positions.
No case is found involving the precise factual situation before this court, but Orloff v. Willoughby, 345 U.S. 83, 73 S. Ct. 534, 97 L.Ed. 842 (1953), involved a somewhat analogous situation. In Orloff, a psychiatrist who was a member of the Army Reserve was called to active duty because of a need for his professional specialty. The case arose out of the failure of the Army to grant him a commission as a medical officer and to assign him to duties within the area of his medical specialty because of his refusal to subscribe the then prescribed loyalty oath or to answer questions whether he had ever been a member of the Communist Party and related organizations. The doctor contended, inter alia, that the court should order his discharge on the ground that the basis of his call-up had been his medical specialty, a fact which would preclude his assignment to duties outside his specialty.
In rejecting that contention, the Court said, in pertinent part:
"We know that from top to bottom of the Army the complaint is often made, and sometimes with justification, that there is discrimination, favoritism, or other objectionable handling of men. But judges are not given the task of running the Army. The responsibility for setting up channels through which such grievances can be considered and fairly settled rests upon the Congress and upon the President of the United States and his subordinates. The military constitutes a specialized community governed by a separate discipline from that of the civilian. Orderly *120 government requires that the judiciary be as scrupulous not to interfere with legitimate Army matters as the Army must be scrupulous not to intervene in judicial matters. While the courts have found occasion to determine whether one has been lawfully inducted and is therefore within the jurisdiction of the Army and subject to its orders, we have found no case where this Court has assumed to revise the duty orders as to one lawfully in the service." Orloff v. Willoughby, 345 U.S. 83, 93-94, 73 S.Ct. 534, 540 (1953).
No case is found in which there has been a departure from the principle pronounced in Orloff. The courts have uniformly held that in matters involving military orders issued within the discretionary power given to the military services by the Congress, civil courts are without the power to judge whether a proper balance between military needs and personal rights has been forged. E. g., Anderson v. Laird, 437 F.2d 912, 914 (7 Cir. 1971); Gianatasio v. Whyte, 426 F.2d 908, 911 (2 Cir. 1970), cert. denied, 400 U.S. 941, 91 S.Ct. 234, 27 L.Ed.2d 244; Nixon v. Secretary of Navy, 422 F.2d 934, 939 (2 Cir. 1970); Dix v. Rollins, 413 F.2d 711, 716 (8 Cir. 1969); Fox v. Brown, 402 F.2d 837, 840 (2 Cir. 1968), cert. denied, 394 U.S. 938, 89 S. Ct. 1219, 22 L.Ed.2d 471.
Though all cases above cited are factually distinguishable from this cause, there is present in this cause no fact which would empower this court to interfere with the order in issue.
Petitioner's enlistment in the Army Reserve was voluntary. By enlistment he submitted himself to military discipline and to the performance of duties in response to military commands.
It seems doubtful that the extraordinary remedy sought would ever be available to obtain judicial review of an alleged breach by the Army of the provisions of a contract of enlistment. See Orloff v. Willoughby, supra. However, this court need not decide that question. It is apparent that there is not shown to be any breach of contract in this cause.
For purposes of this opinion, it is assumed that petitioner's "Acknowledgment of Understanding of Service Requirements" is a part of his enlistment contract. That instrument stated, in pertinent part:
"I will enter on active duty for training * * * within 120 days of this date (March 23, 1970) unless a delay for a longer period is authorized or directed by the Department of the Army." (Emphasis supplied.) Thus, if the quoted language must be construed as a covenant in the enlistment contract, it is inherent in the language employed that the 120-day provision is conditioned upon the discretionary power of the Department of the Army to "authorize" or "direct" a "longer period" of delay between petitioner's enlistment and the order for his active duty for training. The delay for some 600 days is a matter entrusted to military discretion, and not a proper subject of judicial inquiry.
Petitioner's contention that the order for active duty was violative of Army Regulation 135-200 is equally as specious as the argument that there was a breach of contract. The basic authority for the order is contained in an Act of Congress, which provides, in pertinent part:
"* * * Each person enlisted under this subsection shall perform an initial period of active duty for training of not less than four months to commence insofar as practicable within 180 days after the date of that enlistment." 10 U.S.C. 511(d). (Emphasis supplied)
The pertinent part of the Regulation adopted pursuant to that statute is set forth in the margin.[1] It is apparent *121 that the Regulation is designed to establish guidelines for those persons charged with the administration of the reserve program, not to create the right in enlistees to be ordered to training duty within a specified, limited time. That conclusion is inherent in the language of the Regulation. Thus, the Regulation directs that enlistees enter training not later than 120 days after date of enlistment, with stated exceptions not shown to have any application to the factual background of this case. It continues with the statement that delays beyond 120 days for reasons other than those stated exceptions "will require approval by Headquarters, Department of the Army."[2]
The answer to the order to show cause reveals no reason why there was a delay of some 600 days between petitioner's enlistment and the order calling him to active duty for training. Any such reason is wholly immaterial. The statute must be construed as giving the military services discretion in the timing of their ordering of personnel to training duty.
Finally, petitioner's contention that he should be discharged from the Army Reserve, or that the training order should be stayed for the reason that his compliance with the order would entail extreme community hardship, is wholly frivolous.
It is alleged that petitioner is a "project engineer" possessed of "unique skills that cannot be readily be replaced," and that he is enrolled in an air pollution control course.
Under Army Regulation 601-25, Par. 1-12(b), the "extreme community hardship" requirement is met only if the service performed by the reservist is essential to the maintenance of health, safety or welfare of his community; the service cannot be performed by other persons residing in the area and the reservist cannot be replaced in the community by another person who can perform such services.
The allegations of this complaint do not even suggest that petitioner could meet any of those requirements. Moreover, the rejection of a claim of extreme community hardship is a matter entrusted by the Congress to military discretion, a decision which would seldom, if ever, be reviewable by the courts. E. g., Roth v. Laird, 446 F.2d 855, 856-857 (2 Cir. 1971); Schonbrun v. Commanding Officer, 403 F.2d 371 (2 Cir. 1968), cert. denied, 394 U.S. 929, 89 S.Ct. 1195, 22 L.Ed.2d 460.
In Schonbrun, the petitioner sought exemption from active duty, based upon his contention that his wife suffered a psychiatric disorder which his absence would tend to intensify, and upon the basis of his employment as a teacher of a class of severely disturbed boys in a special service school. Though the court characterized both the personal and community claims as appealing, it said that the call-up order being there challenged was the type of discretionary action by the military service which is not subject to judicial review. Schonbrun v. Commanding Officer, supra, 403 F.2d at 374-375. The same view was stated in Roth, which involved a claim by a physician that his call to active duty created an extreme hardship in his community.
It seems apparent on the face of this complaint that it is probably now more inconvenient for petitioner to serve his active duty for training than it would have been had the order issued at an earlier time. The file will not support a stronger case in his favor.
Petitioner voluntarily enlisted in the Army Reserve. He became a part of the nation's reserve program, subject to *122 orders deemed by his superiors necessary to the conduct of that program. The order for petitioner to report for training duty, and the rejection by the Army authorities of his claim for exemption from, or delay of, that order, were acts within the discretion of the Army. No basis for judicial interference exists.
It is ordered, accordingly, that the order entered herein on December 30, 1971, temporarily staying enforcement of the order commanding petitioner to report for active duty be, and the same is, discharged. Judgment is hereby entered dismissing the petition.
NOTES
[1] "It is mandatory that all nonprior service personnel required to perform an initial tour of ACDUTRA as a condition of enlistment enter training not later than 120 days after date of enlistment, except as indicated below. [Expressed bases for delay beyond 120 days, not here pertinent.]
"(4) Delays beyond 120 days for reasons not listed above will require approval by Headquarters, United States Army. * * *"
A R 135-200, Par. 26b.
[2] Change 6 to the Regulation, effective April 22, 1970, changed the 120-day delay period to a period of 180 days. For purposes of this opinion it is immaterial whether the delay period, as it related to petitioner, was 120 days or 180 days.
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369 F.2d 293
67-1 USTC P 9107
UNITED STATES of America, Appellee,v.Robert G. SHELLER, Defendant-Appellant.
No. 156, Docket 30442.
United States Court of Appeals Second Circuit.
Argued Oct. 31, 1966.Decided Dec. 5, 1966.
Jacob D. Fuchsberg, New York City (Fuchsberg & Fuchsberg, Irving Younger, New York City, on the brief), for defendant-appellant.
Richard A. Givens, Asst. U.S. Atty. (Robert M. Morgenthau, U.S. Atty. for S.D. New York, David M. Dorsen, Asst. U.S. Atty., on the brief), for appellee.
Before FRIENDLY, SMITH and FEINBERG, Circuit Judges.
FEINBERG, Circuit Judge:
1
Robert G. Sheller was tried by Judge Edward C. McLean and a jury in the United States District Court for the Southern District of New York for wilfully attempting to evade his income taxes for the years 1958 and 1959 in violation of 26 U.S.C. 7201. The jury found Sheller not guilty on the 1958 count, but guilty on the 1959 count. Sheller was sentenced to imprisonment for six months and is presently on bail pending appeal. Because of the effect of the decision of this court in United States v. Freeman, 357 F.2d 606 (2d Cir. 1966), which was rendered after Sheller's conviction, we reverse for a new trial.
2
At the trial, defendant's counsel conceded that Sheller's returns for 1958 and 1959 failed to disclose substantial amounts of income which should have been reported. The defense presented was that Sheller, a prominent attorney with a well-known and heretofore unblemished reputation for integrity, was not legally responsible for his wrongful acts because of his mental state when he committed them. On appeal, defendant claims that the trial court erred in not charging the jury that insanity was a defense, in failing to direct a judgment of acquittal, and in excluding from evidence certain records of a deceased psychiatrist. As to the first two arguments, the Government responds that the defense failed to introduce evidence sufficient to require an instruction on insanity, that Judge McLean presented the issue of insanity adequately in his charge on the element of intent, and that, in any event, the defense failed to raise adequately below its objection to the charge. On the evidentiary point, the Government claims that the trial court's ruling was proper.
3
The recent decision in United States v. Freeman, Supra, is basic to consideration of the insanity defense issues; in that case, this court adopted as the standard of criminal responsibility section 4.01 of the Model Penal Code, drafted by the American Law Institute:
4
(1) A person is not responsible for criminal conduct if at the time of such conduct as a result of mental disease or defect he lacks substantial capacity either to appreciate the wrongfulness of his conduct or to conform his conduct to the requirements of law.
5
(2) The terms 'mental disease or defect' do not include an abnormality manifested only by repeated criminal or otherwise antisocial conduct.
6
Prior to Freeman, trial judges in this circuit apparently followed the M'Naghten test.1 The new rule is substantially broader than M'Naghten; it focuses on a defendant's ability not only to appreciate the wrongfulness of his conduct but also to conform it to the requirements of law, and it recognizes that both capacities involve matters of degree. The question immediately arises whether the new test should be applied to this case, which had been on appeal barely a month when Freeman was decided.2
7
The Government makes a pro forma claim that the expanded standard of Freeman should not apply to Sheller, citing Johnson v. State of New Jersey,384 U.S. 719, 731-733, 86 S.Ct. 1772, 16 L.Ed.2d 882 (1966).3 It is true that in that case, the Supreme Court held that the 'new standards governing in-custody interrogation' would apply only to trials commenced after the decisions promulgating them. See 384 U.S. at 732-735, 86 S.Ct. 1772. However, the reasons given there are largely inapplicable to the narrow issue before us-- whether Freeman should apply to those cases still on direct appeal when it was decided. Most important, we do not believe that limited retroactivity will 'seriously disrupt the administration of our criminal laws.' See Johnson, supra, 384 U.S. at 731, 86 S.Ct. at 1780. It is worth noting that in two other recent situations in which full retroactivity was denied, the Court nevertheless has applied new criminal law doctrines to cases still on appeal. Thus, in Linkletter v. Walker, 381 U.S. 618, 622 and nn. 4, 5, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965), the Court recognized such limited retroactivity for the rule announced in Mapp v. Ohio, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081 (1961), that evidence obtained through an unreasonable search and seizure was to be excluded from state criminal proceedings. In Tehan v. United States ex rel. Shott, 382 U.S. 406, 409 n. 3, 86 S.Ct. 459, 15 L.Ed.2d 453 (1966), the Court similarly treated the rule announced in Griffin v. State of California, 380 U.S. 609, 85 S.Ct. 1229, 14 L.Ed.2d 106 (1965), which forbade prosecutors and judges to comment adversely on the failure of a defendant to testify in a state criminal trial. Certainly, where the changed rule deals with the substantive question whether 'certain classes of wrongdoers are * * * properly the subjects of criminal punishment,' see Freeman, supra, 357 F.2d at 625, at least a similar limited retroactivity is called for.
8
We turn next to the Government's assertion that Sheller's conviction should be affirmed in the face of the later ruling in Freeman. First, it claims that no jury question was raised. However, defendant produced testimony of his personal physician, two psychiatrists and a psychologist, and records of a deceased psychiatrist who had treated Sheller. Dr. O'Connor, one of the psychiatrists, was asked whether in his opinion at the time of filing the returns Sheller 'was suffering from such a condition of his mental faculties as to render * * * the governing power of his mind, impaired to such an extent that his actions in filing such returns and the nature of such returns was beyond his control?' He replied that 'it would be markedly impaired' and Sheller's 'actions would be the result of the impairment of these mental faculties.' Another psychiatrist testified that, at the time Sheller filed his returns, he
9
was suffering from a psychotic reactive depression, and in the depression there were various distortions of moods and of thought, and in many areas the individual is incapable of knowing precisely right from wrong or what he is doing.
10
This testimony was sufficient to raise an issue as to Sheller's criminal responsibility. We are not unmindful of the other contrary evidence in the record, including the testimony of both of these witnesses on cross-examination, defendant's efficient functioning as a busy trial lawyer, and his attempt to deceive the Internal Revenue Service years after filing the returns. It is for this reason that we reject without further comment appellant's contention that he was entitled to a judgment of acquittal because of insanity.
11
The Government next claims that the defense of insanity was adequately covered by the judge's charge on intent. There is no doubt that Judge McLean gave full consideration to the question whether a separate charge on the defense of insanity is necessary when the crime requires a highly specific intent with a bad purpose or evil motive to defraud the Government by evading a tax known to be due. However, for reasons already stated, we need not decide whether his careful charge on intent put before the jury the essence of whether defendant knew the wrongfulness of his conduct under the M'Naghten rule. Compare United States v. Cain, 298 F.2d 934 (7th Cir.), cert. denied, 370 U.S. 902, 82 S.Ct. 1250, 8 L.Ed.2d 400 (1962), with Goforth v. United States, 106 U.S.App.D.C. 111, 269 F.2d 778 (1959). We have no doubt that the instruction on specific intent failed to submit to the jury the significant issue under Freeman of whether defendant could conform his conduct to the requirements of law.
12
Finally, the Government argues that, in any event, appellant's present contention that the court improperly failed to charge on insanity was not raised below. It is unnecessary to recount the involved reasoning advanced to support this position. It is enough to say that Sheller's counsel made abundantly clear that the chief-- if not only-- defense was insanity, and sought the most liberal definition of that concept obtainable. To hold on this record that the request for a specific charge on the defense of insanity was waived would be unwarranted. See also O'Connor v. Ohio, 87 S.Ct. 252 (1966) (per curiam).
13
Accordingly, the judgment of conviction must be reversed. However, if it is not already obvious from the facts set forth, we wish to make it plain that our decision is no reflection on the trial judge's handling of the trial, which the record reveals as excellent, or necessarily on his formulation of the charge. Our disposition is mandated by our own supervening decision in Freeman, which Judge McLean had no reason to anticipate. At the retrial, the question may arise again whether to admit into evidence certain notes made by Dr. Watson, a psychiatrist now deceased who treated defendant as well as other members of his immediate family. Appellant claims exclusion was error because the papers were kept in the ordinary course of the doctor's practice and were allegedly relevant to Sheller's mental condition. The Government argues that the notes were at best only remotely relevant, were in part illegible, in part redundant, and would have been confusing. Therefore, the Government contends that the trial court had discretion to keep them out and did not abuse it. This is a matter that could properly have been decided either way by the trial judge, and we express no view other than to emphasize his broad discretion on retrial.
14
Reversed and remanded for a new trial on the second count.
1
This was supplemented by the 'irresistible impulse' rule, see Freeman, supra, 357 F.2d at 608 n. 3, which defendant does not claim is applicable here
2
Sheller was convicted on December 22, 1965, and sentenced on January 19, 1966. A notice of appeal was filed on January 26; on February 28, the opinion in Freeman was filed
3
Government's brief, p. 10 n. * * * says only that since Sheller's trial preceded Freeman, the decision in that case 'would not necessarily assist * * * (Sheller) retrospectively.'
|
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IN THE SUPREME COURT OF IOWA
No. 14–2095
Filed January 29, 2016
REGIONAL UTILITY SERVICE SYSTEMS,
Appellee,
vs.
CITY OF MOUNT UNION, IOWA,
Appellant.
Appeal from the Iowa District Court for Henry County, John M.
Wright, Judge.
A city appeals a district court order finding its bank account was
not exempt from execution under Iowa Code section 627.18 (2013).
REVERSED AND REMANDED.
Steven E. Ort of Bell, Ort & Liechty, New London, for appellant.
Lucas C. Helling and Vanessa M. Young of Foss, Kuiken &
Cochran, P.C., Fairfield, for appellee.
2
WIGGINS, Justice.
A judgment creditor garnished a city’s bank account when the city
failed to pay a judgment. The city moved to quash the garnishment on
the grounds the bank account was exempt from execution under Iowa
Code section 627.18 (2013). The court denied the motion and found the
bank account was not exempt. The city appeals. On appeal, we find the
bank account was exempt from execution. Therefore, we reverse the
judgment of the district court and remand the case for further
proceedings consistent with this opinion.
I. Background Facts and Proceedings.
On June 18, 2014, the district court entered judgment for
$27,862.10 against the City of Mount Union in a breach of contract
action brought by the Regional Utility Service Systems Commission
(RUSS). The basis of that judgment is not at issue in this appeal. On
August 21, RUSS filed a praecipe directing the clerk of court to issue a
writ of general execution against the City. On August 25, the clerk of
court issued a writ of general execution commanding the county sheriff
to levy on all bank accounts held by the City at Iowa State Bank in
Mount Union. On September 1, the sheriff served the City with a notice
indicating RUSS had garnished its bank account in the amount of
$25,164.57. On September 3, the City filed a motion to quash the
garnishment, claiming the garnished funds were exempt from execution
under Iowa Code section 627.18. The district court heard evidence on
the motion to quash and claim of exemption.
At the hearing before the district court, Mayor John Marek testified
the garnished bank account was the only account the City had and
therefore contained both general funds and special funds, administration
3
and expenditure of which is limited to specific purposes by law. 1 He also
testified at length about the means by which the City generates revenue
and limitations on how the revenue it generates may be spent. His
testimony established the City collects only $17,000 to $18,000 per year
in property tax revenues it may allocate as general funds. Although the
City collects additional property, sales, and road-use tax revenues, the
law requires the City to designate those funds as special funds. The City
spends its general funds on garbage collection, landfill operation,
building maintenance, vehicle maintenance, streetlight operation,
elections, legal services, liability insurance, property insurance, fire and
police services, and compensation for the mayor, members of the city
council, a part-time clerk, a part-time maintenance person, and
contractors. Consequently, Mayor Marek testified the City’s general
funds were necessary for the City to fulfill the purposes for which it was
incorporated and necessary for it to continue to pay its officials and
provide basic services not paid for with special funds. Additionally,
Mayor Marek indicated that approximately $23,000 of the $25,000 in the
bank account represented special funds and indicated the budget
submitted by the City in support of its motion to quash the garnishment
supported this conclusion.
During the hearing, the district court instructed the parties to
submit briefs addressing what portion of the comingled funds in the
bank account were special funds. Relying on Mayor Marek’s testimony
1Where a special fund is created or set aside by statute for a particular
purpose or use, it must be administered and expended in accordance
with the statute, and may be applied only to the purpose for which it was
created or set aside, and not diverted to any other purpose, or
transferred from such authorized fund to any other fund.
Des Moines Metro. Area Solid Waste Agency v. Branstad, 504 N.W.2d 888, 890 (Iowa
1993) (quoting 81A C.J.S. States § 228 (1977)).
4
and the budget submitted by the City, RUSS argued the account
contained $6550 in special funds. The City argued the account
contained only $1392 in general funds and submitted a supporting
affidavit signed by Mayor Marek and an exhibit listing the sources of the
remaining special funds.
The district court denied the motion to quash and the claim of
exemption. In its order denying the motion, the court acknowledged the
City depends on the money in its bank account to carry out the general
purposes for which the City was organized. In addition, the court
acknowledged a prior case in which we held public property other than
buildings owned by a city to be exempt from execution. See City of Fort
Dodge v. Moore, 37 Iowa 388, 388–90 (1873). However, the court found
no caselaw directly supporting the argument that general funds held by a
municipality may constitute public property exempt from execution
under section 627.18. Thus, the court concluded the City stood in the
same position as any other judgment debtor with nonexempt funds in a
bank account and denied its motion to quash the garnishment of its
general funds. Because the court found RUSS’s argument with respect
to the balance of special funds in the account to be more persuasive, the
court found the garnished account contained only $6550 in special
funds.
The City appeals the district court judgment denying its motion to
quash the garnishment.
II. Issues.
We must first decide whether the general funds in the City’s bank
account constitute “other public property” within the meaning of section
627.18. If they do, we then must decide whether the general funds in
5
the City’s bank account were “necessary and proper for carrying out the
general purpose” for which the City was organized.
III. Scope of Review.
We review questions of statutory construction for correction of
errors at law. Postell v. Am. Family Mut. Ins. Co., 823 N.W.2d 35, 41
(Iowa 2012). A factual finding by the district court is binding on this
court if substantial evidence supports it. GE Money Bank v. Morales, 773
N.W.2d 533, 536 (Iowa 2009). Substantial evidence supports a factual
finding only if the fact finder may reasonably infer the finding from the
evidence presented. Vaughan v. Must, Inc., 542 N.W.2d 533, 538 (Iowa
1996).
IV. Analysis and Discussion.
In its motion to quash the garnishment, the City claimed the
general funds in its bank account were exempt from execution under the
Iowa Code. The Code provides:
Public Property.
Public buildings owned by the state, or any county,
city, school district, or other municipal corporation, or any
other public property which is necessary and proper for
carrying out the general purpose for which such corporation
is organized, are exempt from execution.
Iowa Code § 627.18.
A. Whether the General Funds in the City’s Bank Account
Constitute Other Public Property Within the Meaning of Section
627.18. We begin our analysis by recounting basic principles of
statutory interpretation. When we interpret a statute, our goal is to
determine legislative intent. Auen v. Alcoholic Beverages Div., 679
N.W.2d 586, 590 (Iowa 2004). “We determine legislative intent from the
words chosen by the legislature, not what it should or might have said.”
Id. When the language in a statute is plain and unambiguous such that
6
reasonable persons cannot disagree as to its meaning, we need not resort
to rules of statutory construction. Zimmer v. Vander Waal, 780 N.W.2d
730, 733 (Iowa 2010). When statutory definitions bearing on the
meaning of the words in a statute exist, those definitions serve as the
foundation of our analysis. Id. When the language of a statute has
changed little over time, we look to its origins to discern legislative intent.
See Woodbury County v. City of Sioux City, 475 N.W.2d 203, 205 (Iowa
1991). Thus, when interpreting a statute originating in the early history
of our state, the common law informs our interpretation. See id.
Finally, when interpreting a statute, we may not mitigate the
hardships either party presumes will flow from its enforcement, nor
impose our personal opinions as to its wisdom. Kneppe v. Huismann,
223 Iowa 569, 571, 272 N.W. 602, 603 (1937). Particularly in the
context of interpreting grants of powers and rights to public corporations,
doubt or ambiguity arising out of the terms the legislature used must be
resolved in favor of the public. See Clark, Dodge & Co. v. City of
Davenport, 14 Iowa 494, 500 (1863). As the Code instructs, it is
presumed the legislature intended the public interest to be favored over
any private interest in enacting a statute. See Iowa Code § 4.4(5).
Iowa Code section 4.1 contains three statutory definitions bearing
on the meaning of the phrase “other public property” in section 627.18.
These definitions serve as the foundation of our analysis so long as they
are not “inconsistent with the manifest intent of the general assembly, or
repugnant to the context of the statute.” Iowa Code § 4.1. First, section
4.1(24) defines the term “property” to include both “personal and real
property.” Id. § 4.1(24). Second, section 4.1(21) defines the phrase
“personal property” to include “money, goods, chattels, evidences of debt,
and things in action.” Id. § 4.1(21). Third, section 4.1(13) defines the
7
phrase “real property” to include “lands . . . and all rights thereto and
interests therein.” Id. § 4.1(13).
Because the Code includes statutory definitions bearing directly on
the meaning of the phrase “other public property,” we construe the
phrase to accommodate these definitions in the absence of contrary
legislative intent. See Groenendyk v. Fowler, 204 Iowa 598, 601, 215
N.W. 718, 720 (1927). When interpreted in harmony with these
statutory definitions, the plain language of section 627.18 creates a
municipal right to exempt real property and personal property from
execution, including money held in a bank account. In other words, the
inclusion of the phrase “other public property” in section 627.18
indicates municipal corporations may claim as exempt from execution
virtually any property that is “necessary and proper for carrying out the
general purpose for which such corporation is organized.” Iowa Code
§ 627.18.
The legislative history of section 627.18 yields no evidence of
contrary legislative intent. On the contrary, legislative history supports
construing section 627.18 in harmony with the statutory definitions
contained in section 4.1. The statutory provision creating the exemption
from execution for public property now contained in section 627.18 first
appeared in the 1851 Code. The language of the statutory exemption
from execution has changed little over time. In fact, nearly identical
language to that contained in section 627.18 appeared the 1851 Code,
which provided in relevant part:
Public property exempt. Public buildings owned by the
state or any county, city, school district, or other civil
corporation, and any other public property which is
necessary and proper for carrying out the general purpose
for which any such corporation is organized, are exempt
from execution.
8
Iowa Code § 1895 (1851). 2 The 1851 Code also included definitions of
the terms “property,” “personal property,” and “real property” identical to
those appearing in the modern Code. Compare Iowa Code § 26(8)–(10)
(1851), with Iowa Code § 4.1(13), (21), (24) (2013). 3
Likewise, the common law offers no basis for disregarding the
relevant statutory definitions in interpreting section 627.18. See
Woodbury County, 475 N.W.2d at 205. For example, the first edition of
Black’s Law Dictionary acknowledged the term “property” as being “a
very wide term” that “includes every class of acquisitions which a man
can own or have an interest in.” Black’s Law Dictionary 953–54 (1st ed.
1891). In fact, the notion that a person possesses an absolute and
fundamental right of private property consisting of “the free use,
enjoyment, and disposal of all his acquisitions” has been a foundational
premise of the common law since at least the time of Blackstone. See
Kerry v. Din, 576 U.S. ___, ___, 135 S. Ct. 2128, 2133, 192 L. Ed. 2d 183,
188 (2015) (quoting 1 William Blackstone, Commentaries on the Laws of
England 134 (1769)).
We have never addressed the question of whether general funds in
a municipal bank account may constitute public property for purposes of
the exemption from execution contained in section 627.18. However,
nothing in our caselaw suggests the phrase “other public property”
excludes bank accounts containing general funds. We have previously
construed the phrase “other public property” to encompass personal
2Section 1895 of the 1851 Code contained an additional sentence, which
provided that “property of a private citizen can in no case be levied upon to pay the debt
of a civil corporation.” Iowa Code § 1895 (1851). The legislature removed the bulk of
this sentence from the Code in 1981. See 1981 Iowa Acts ch. 182, § 4 (codified at Iowa
Code § 627.18 (1983)).
3Neither the exemption from execution for public property nor these definitions
appeared in the Revised Statutes of the Territory of Iowa (1843).
9
property. See Moore, 37 Iowa 388–90 (holding lumber, tools, and other
chattels owned by a municipal corporation were exempt from execution
under Iowa Code section 3274, now section 627.18). In addition, we
have long acknowledged the breadth of the term “property.”
The term “property” is said to be nomen generalissimum and
to include everything which is the subject of ownership,
corporeal or incorporeal, tangible or intangible, visible or
invisible, real or personal; everything that has an
exchangeable value, or which goes to make up one’s wealth
or estate.
Wapsie Power & Light Co. v. City of Tipton, 197 Iowa 996, 1000, 193 N.W.
643, 645 (1923); see also Reynolds v. Miller, 6 Iowa 459, 461 (1858)
(explaining the term “property” as defined in Iowa Code section 26(10),
now section 4.1(24), encompasses “every interest a man may have in any
property, real or personal” such that it is “equivalent to the word ‘estate,’
as used in relation to wills”).
Consequently, we conclude the general funds in a municipal bank
account constitute “other public property” exempt from execution under
Iowa Code section 627.18 so long as they are necessary and proper for
carrying out the general purpose for which the municipality is organized.
This conclusion accords not only with the statutory definitions in the
Code and the common law existing when the general assembly enacted
the statutory exemption from execution for public property, but also with
our caselaw and the scope of the exemption from execution for public
property in other jurisdictions. See P.H.V., Annotation, Municipal Funds
and Credits as Subject to Levy Under Execution or Garnishment on
Judgment Against Municipality, 89 A.L.R. 863, 864 (1934) (“The courts
are practically unanimous in holding that the funds or credits of a
municipality or other public body exercising governmental functions,
acquired by it in its governmental capacity, may not be reached by its
10
creditors by execution under a judgment against the municipality, or by
garnishment served upon the debtor or depository of the municipality.”).
B. Whether the General Funds in the City’s Bank Account
Were Necessary and Proper for Carrying Out the General Purpose for
Which the City Was Organized. RUSS argues the general funds were
not necessary and proper for carrying out the general purpose for which
the City was organized, urging the City presented no evidence it has been
unable to fulfill the purposes for which it was incorporated since its
general funds were garnished. The City argues RUSS failed to preserve
this issue on appeal by failing to cross-appeal from an adverse ruling by
the district court.
Ordinarily a successful party need not cross-appeal on a ground
presented to but ignored or rejected by the district court to preserve
error. EnviroGas, L.P. v. Cedar Rapids/Linn Cty. Solid Waste Agency, 641
N.W.2d 776, 781 (Iowa 2002) (quoting Johnson Equip. Corp. of Iowa v.
Indus. Indem., 489 N.W.2d 13, 16 (Iowa 1992)). But this general rule
applies only when the party received a favorable ruling on the claim at
issue. See Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 398–99 (Iowa
2001); Ritz v. Wapello Cty. Bd. of Sup’rs, 595 N.W.2d 786, 789 (Iowa
1999); Venard v. Winter, 524 N.W.2d 163, 165 (Iowa 1994). “This is
because a party need not, in fact cannot, appeal from a favorable ruling.”
Garling Const., Inc. v. City of Shellsburg, 641 N.W.2d 522, 523 (Iowa
2002) (quoting Johnson Equip., 489 N.W.2d at 16). Our determination as
to whether RUSS preserved the argument that the general funds were
not necessary and proper for carrying out the general purpose for which
the City was organized turns on whether RUSS received an adverse
ruling from the district court on this issue from which it could have
appealed.
11
The sole issue before the district court was whether the City was
entitled to the statutory exemption from execution from public property,
and RUSS received a favorable ruling denying the claim of statutory
exemption. Although the district court made an adverse finding in
arriving at that ruling, RUSS could not appeal the ruling in its favor.
Thus, RUSS preserved its argument that the general funds were not
necessary to the general purpose for which the City was organized as
there was no adverse ruling from which it could have appealed.
The district court found the City depends on the general funds in
its bank account to carry out the general purposes for which the City
was organized. This finding is binding on appellate review so long as
substantial evidence actually presented to the district court supports it.
See Morales, 773 N.W.2d at 536. Of course, in determining whether
substantial evidence supports a district court finding, we do not weigh
the evidence. See Allison-Kesley Ag Ctr., Inc. v. Hildebrand, 485 N.W.2d
841, 844 (Iowa 1992). Rather, “we only decide if there is a proper basis
upon which the trial court could find as it did.” Id. (quoting Arbie Mineral
Feed Co. v. Nissen, 179 N.W.2d 593, 595 (Iowa 1970))
We have never specified a legal test for determining whether
property is “necessary and proper for carrying out the general purpose
for which such corporation is organized” in evaluating claims of
exemption brought under section 627.18. Nor does either party advance
a specific legal test for determining whether public property meets this
prerequisite of the statutory exemption from execution. However, we
long ago concluded a recitation of statutory language is sufficient to state
a claim of statutory exemption from execution. Moore, 37 Iowa at 390.
The City presented ample evidence from which the district court
could have reasonably inferred the general funds in its bank account
12
were necessary to the general purposes for which the City was organized.
Mayor Marek testified the general funds were necessary for the City to
fulfill the purposes for which it was incorporated because without them
the City would unable to pay its officials or provide basic services it could
not pay for with special funds. In addition, the City submitted various
documents to support its allegation that the general funds were
necessary and proper to carrying out the general purposes for which it
was organized, including a copy of its budget for the present fiscal year
along with schedules summarizing its recent historical revenues and
expenditures. Consequently, we conclude the district court based its
finding on substantial evidence.
Because the determination of whether a finding is supported by
substantial evidence requires us to consider the evidence actually
presented to the district court, it is irrelevant that the City presented no
evidence on appeal suggesting it was unable to fulfill the purposes for
which it was incorporated after its general funds were garnished.
Moreover, although RUSS cross-examined Mayor Marek at the hearing
on the motion to quash, RUSS produced no other evidence tending to
undermine the conclusion that the general funds were necessary and
proper to carrying out the general purposes for which the City was
organized.
In its order denying the motion to quash the execution, the district
court found the special funds are dedicated to the purposes set forth by
the government entities that provide them whereas the use of general
funds is unrestricted. However, the court made no explicit finding that
the general funds were proper to carrying out the general purposes for
which the City was organized. Thus, we must determine whether the
funds were proper for that purpose.
13
The meaning of the word “proper” may depend on context. See
Lockhart v. Cedar Rapids Cmty. Sch. Dist., 577 N.W.2d 845, 847 (Iowa
1998). For example, property may be “proper” for carrying out a specific
purpose in the sense that it is “suitable, right, fit, or correct” to use the
property in carrying out that purpose. Black’s Law Dictionary, 1410
(10th ed. 2014). Alternatively, property may be “proper” for carrying out
a specific purpose in the sense it is “allowable, right, and becoming” to
use the property for such purposes. Id.
We need not parse the shades of meaning between competing
definitions of the term “proper” to resolve the question before us,
however. We conclude that regardless of the precise meaning of the term
“proper,” it is obvious the general funds were proper to carrying out the
general purpose for which the City was organized. Notably, neither party
disputed the propriety of using such funds for carrying out that purpose
or the propriety of the means by which the City collected the funds.
More importantly, at the hearing on the motion to quash the execution,
Mayor Marek testified use of the general funds was unrestricted by law
and indicated the general funds derived from property taxes assessed at
a rate allowed by law.
Therefore, we conclude the general funds qualified as exempt from
execution under Iowa Code section 627.18.
V. Disposition
We reverse the judgment of the district court denying the City’s
motion to quash the garnishment and remand the case to the district
court for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
|
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23 F.3d 397
Gabrelianv.Lamura
NO. 93-7846
United States Court of Appeals,Second Circuit.
Apr 28, 1994
1
Appeal From: E.D.N.Y.
2
AFFIRMED.
|
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|
35 So.3d 555 (2010)
Demario WALKER, Appellant
v.
STATE of Mississippi, Appellee.
Demario Walker, Appellant
v.
State of Mississippi, Appellee.
Nos. 2008-CP-01987-COA, 2008-CP-01988-COA.
Court of Appeals of Mississippi.
March 30, 2010.
*556 Demario Walker, appellant, pro se.
Office of the Attorney General by Laura Hogan Tedder, attorney for Appellee.
Before KING, C.J., ISHEE and MAXWELL, JJ.
MAXWELL, J., for the Court:
¶ 1. Demario Walker submitted three pro se filings in the Circuit Court of Marion County, which were labeled "Motion for Post-Conviction Collateral Relief," *557 "Petition for an Order to Show Cause," and "Petition to Clarify Sentence." The circuit court treated the latter two filings as requests for post-conviction relief (PCR), and dismissed them under Mississippi Code Annotated section 99-39-23(6) (Supp.2009) as procedurally-barred successive writs. On appeal, Walker argues the circuit court erred in treating these filings as PCR motions.
¶ 2. The circuit court also dismissed the filing Walker labeled a PCR motion. Walker argues the circuit court should have granted this motion because his parole was unlawfully revoked and because Mississippi Code Annotated section 47-7-27 (Rev.2004) (which contains the applicable procedure for parole revocation) is unconstitutional.[1]
¶ 3. Finding no error, we affirm.
FACTS AND PROCEDURAL HISTORY
¶ 4. A Marion County grand jury charged Walker with four counts of attempting to utter a forgery. He pled guilty to one count, and the State agreed not to pursue the remaining three. On June 7, 2002, the circuit court entered an order of conviction on Walker's guilty plea, and sentenced Walker to ten years in the custody of the Mississippi Department of Corrections (MDOC).
¶ 5. Soon thereafter, Walker was granted an early release on probation, and his remaining sentence was suspended. However, less than one month later, the circuit court found Walker had violated the terms of his probation and revoked Walker's probationary release.
¶ 6. Walker then filed two PCR motions, which were both appealed to this Court. In the first motion, Walker raised multiple issues, most of which were procedurally barred, and we affirmed the circuit court's denial of his PCR motion. See Walker v. State, 861 So.2d 354, 355-56 (¶¶ 2, 8) (Miss. Ct.App.2003). In his second motion, Walker argued: "(1) the trial court denied him due process of law by revoking his probation and not providing him with counsel, and (2) [his sentence] to a restitution center was cruel and unusual punishment." Walker v. State, 910 So.2d 584, 585 (¶ 2) (Miss.Ct.App.2005). We affirmed the dismissal of this PCR motion as well. Id. at 586 (¶ 11).
¶ 7. Walker later became eligible for parole and was released in early 2006. Less than six months later, his parole was revoked. But he was again released on parole in September 2007. Less than a month later, Walker pled guilty to two felony counts of uttering bad checks in violation of Mississippi Code Annotated section 97-19-55 (Rev.2006). The Mississippi Parole Board subsequently revoked Walker's parole on the attempting-to-utter-forgery crime based upon his recent guilty pleas to the two felony-bad-check counts.
¶ 8. On August 1, 2008, Walker made the three filings giving rise to this appeal, all of which the circuit court dismissed.
STANDARD OF REVIEW
¶ 9. "This Court reviews the dismissal of a post-conviction relief motion for an abuse of discretion." Felton v. State, 18 So.3d 328, 329 (¶ 4) (Miss.Ct.App.2009) (citation omitted). The trial court may summarily dismiss a PCR motion where "it plainly appears from the face of the motion, any annexed exhibits and the prior proceedings in the case that the movant is not entitled to any relief[.]" Miss.Code Ann. § 99-39-11(2) *558 (Supp.2009); See also State v. Santiago, 773 So.2d 921, 923-24 (¶ 11) (Miss. 2000). "On appeal, this Court will affirm the summary dismissal of a PCR petition if the petitioner has failed to demonstrate a claim procedurally alive substantially showing the denial of a state or federal right." Robinson v. State, 19 So.3d 140, 142 (¶ 6) (Miss.Ct.App.2009). We review questions of law de novo. Felton, 18 So.3d at 329 (¶ 4).
DISCUSSION
¶ 10. Walker argues the circuit court erred in addressing his petitions to show cause and clarify his sentence under the Mississippi Uniform Post-Conviction Collateral Relief Act (UPCCRA). He also claims the circuit court erred in dismissing a third filing, which he admits was a PCR motion. The State responds that the circuit court appropriately dismissed all three filings. The State also requests this Court decide whether Walker's "repetitive, frivolous filings" warrant imposing sanctions.
I. Petitions to Show Cause and Clarify Sentence
¶ 11. The UPCCRA contains various grounds for relief that are properly sought in a PCR motion. These grounds include claims that the inmate's "sentence has expired; his probation, parole or conditional release [was] unlawfully revoked; or he is otherwise unlawfully held in custody[.]" Miss.Code Ann. § 99-39-5(1)(h) (Supp.2009). However, as our statutes and case law make clear, a PCR motion is not a proper vehicle for all inmate grievances. Mississippi Code Annotated section 47-5-803(2) (Rev.2004) provides that "[n]o state court shall entertain an offender's grievance or complaint which falls under the purview of the administrative[-]review procedure unless and until such offender shall have exhausted the remedies as provided in such procedure."
¶ 12. In Burns, we had occasion to consider an MDOC prisoner's complaints that were similar to those presently before us. In that case, David Burns filed a pro se motion to clarify and show cause. Burns v. State, 933 So.2d 329, 330 (¶ 4) (Miss.Ct. App.2006). The circuit court considered the motion as a filing under the UPCCRA and denied relief. Id. Burns argued that he simply wanted clarity about the meaning of his sentence. Id. at 331 (¶ 7). He therefore argued his filing was not a PCR motion. Id. This Court concluded that Burns did not pursue the correct avenue for the relief he sought. The Burns Court reasoned:
An argument that the sentence violates law, either because it is clearly erroneous or because it is unredeemably ambiguous or incomplete, would be proper under the post-conviction relief procedures.
On the other hand, if the operation of the sentence is confusing to the petitioner, that is not necessarily due to any violation of law. Clarity is after all in the eye of the beholder. The inmate may simply not have sufficient knowledge to make clear to him what is legally clear. For many such questions regarding confusion about the operation of the state's system of incarceration, the proper procedure is for a prisoner to seek relief through the administrative processes of the Department of Corrections. Miss.Code Ann. §§ 47-5-801 through 47-5-807 (Rev.2004).... We conclude that an inmate who is uncertain about the operation of his sentence and desires clarity should pursue the administrative-review procedures before turning to court.
Id. at 331 (¶¶ 8-9). Here, Walker's complaints are nearly identical to those in *559 Burns. We find his petitions to clarify and show cause should be handled initially under administrative-review procedures rather than in the courts. See Miss.Code Ann. § 47-5-803. Since there is no indication in the record that Walker exhausted his administrative remedies on these claims, we are without jurisdiction to consider them. Miss.Code Ann. § 47-5-803(2); Adams v. Epps, 900 So.2d 1210, 1213 (¶ 12) (Miss.Ct.App.2005). Notwithstanding our lack of jurisdiction, we point out that the record reflects Walker has been advised on multiple occasions that he must serve the remaining balance of his sentence for attempting to utter a forgery.
¶ 13. To the extent Walker is claiming any illegality regarding his sentence within the meaning of section 99-39-5which he does not appear to do and in fact argues adamantly that he is nothis petitions would have been properly dismissed as procedurally barred.[2] This issue is without merit.
II. Motion for Post-Conviction Relief
¶ 14. We turn now to the third filing made by Walkerthe one he labeled a PCR motion. The circuit court dismissed the filing pursuant to Mississippi Code Annotated section 99-39-11(2). On appeal, Walker argues his parole was unlawfully revoked because he was not given notice and a fair opportunity to present evidence at his parole-revocation hearing. He also argues section 47-7-27 is unconstitutional.
A. Notice and Fair Opportunity to Respond
¶ 15. Before reaching the merits of this issue, we note that this issue is not procedurally barred. Because Walker presents an argument that his parole was unlawfully revoked, his PCR motion fits within an exception to both the general prohibition against successive writs and the three-year statute of limitations. See Miss.Code Ann. § 99-39-23(6) (successive-writ exception); Miss.Code Ann. § 99-39-5(2)(b) (time-bar exception).
¶ 16. The United States Supreme Court in Morrissey v. Brewer, 408 U.S. 471, 480, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972), addressed the minimum due-process rights states must afford parolees. The Supreme Court explained:
Revocation of parole is not part of a criminal prosecution and thus the full panoply of rights due a defendant in such a proceeding does not apply to parole revocations. Parole arises after the end of the criminal prosecution, including imposition of sentence. Supervision is not directly by the court but by an administrative agency, which is sometimes an arm of the court and sometimes of the executive. Revocation deprives an individual, not of the absolute liberty to which every citizen is entitled, but only of the conditional liberty properly dependent on observance of special parole restrictions.
(Internal citation omitted). Mississippi Code Annotated section 47-7-27 has been specifically held to include the minimum due-process requirements set forth in Morrissey. Godsey v. Houston, 584 So.2d 389, 392 (Miss.1991) (citing section 47-7-27); see also Bobkoskie v. State, 495 So.2d 497, 500 (Miss.1986). Section 47-7-27 states in pertinent part: "An offender convicted of a felony while on parole, whether in the State of Mississippi or another state, shall immediately have his parole revoked *560 upon presentment of a certified copy of the commitment order to the board."
¶ 17. Here, the record shows the Mississippi Parole Board received a certified copy of Walker's commitment order showing Walker pled guilty to two felony counts of uttering bad checks. Thus, upon receiving the certified copy of this order, the parole board had authority pursuant to section 47-7-27 to immediately revoke Walker's parole on his earlier conviction of attempting to utter a forgery. Miss.Code Ann. § 47-7-27. Furthermore, we note the record shows a preliminary revocation hearing and a parole-revocation hearing were held. The parole board then sent Walker a letter, which provided notice of its decision to revoke his parole and afforded an opportunity to present evidence on his behalf. Though Walker may have indeed responded,[3] his response contains no specific facts and presents no arguable reason for not revoking his parole.
¶ 18. For these reasons, we find that Walker's due-process rights were not violated. See Godsey, 584 So.2d at 392; Bobkoskie, 495 So.2d at 500. This issue is without merit.
B. Constitutionality of Section 47-7-27
¶ 19. Walker cites no authority that supports his claim that section 47-7-27 is unconstitutional, and we are aware of none. The constitutionality of section 47-7-27 has been upheld on many occasions by our supreme court. See, e.g., Godsey, 584 So.2d at 392 (interpreting section 47-7-27 to embody minimum due-process requirements). This issue is without merit.
III. Sanctions
¶ 20. As noted by the circuit judge, Walker had previously filed numerous motions in the circuit court, all of which have been found meritless. The judge observed that Walker's repetitive filings have caused "waste of [the circuit court's] personnel, materials, and time." The same could probably be said of this Court, although it is apparent that the circuit court has been affected to a much greater extent. The State requests that we sanction Walker for his repetitive, frivolous filings.
¶ 21. This Court is vested, as are the trial courts, with authority to impose sanctions on pro se litigants for frivolous filings. McLamb v. State, 974 So.2d 935, 939 (¶ 17) (Miss.Ct.App.2008) (citing Miss. Code Ann. § 47-5-138(3) (Supp.2007)). One potential sanction is that an inmate's accrued earned time may be forfeited. Id. Other sanctions include "monetary sanctions as well as appropriate restrictions on future filings," so long as these restrictions are "appropriately tailored to redress the transgression found and to assure that valid claims will not be prohibited." Ivy v. State, 688 So.2d 223, 224 (Miss.1997) (imposing a $250 fine on pro se petitioner for frivolous filing). We do not find imposing sanctions to be appropriate at this time, but Walker should be aware of these various measures available to the Court.
¶ 22. THE JUDGMENTS OF THE CIRCUIT COURT OF MARION COUNTY DISMISSING THE MOTIONS FOR POST-CONVICTION RELIEF ARE AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO MARION COUNTY.
LEE AND MYERS, P.JJ., GRIFFIS, BARNES, ISHEE AND ROBERTS, JJ., CONCUR. KING, C.J., AND IRVING, J., CONCUR IN RESULT ONLY.
NOTES
[1] By order dated December 11, 2009, cause numbers 2008-CP-01988-COA and 2008-CP-01987-COA were consolidated by this Court on its own motion. See M.R.A.P. 3(b).
[2] More specifically, Walker's motions would have been procedurally barred for being successive writs and for being time-barred. See Miss.Code Ann. § 99-39-23(6); Miss.Code Ann. § 99-39-5(2) (Supp.2009).
[3] Walker's supplemental record excerpts indicate that he responded to the parole board's letter, but Walker's response appears nowhere in the official record.
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114 Ill. App.2d 241 (1969)
252 N.E.2d 406
Irma M. Paulsen, Plaintiff-Appellee,
v.
Gateway Transportation Company, Inc., a Corporation, Defendant-Appellant.
Gen. No. 69-41.
Illinois Appellate Court Second District.
November 4, 1969.
*242 *243 Pedderson, Menzimer, Conde and Stoner, of Rockford, for appellant.
Russell J. Goldman and R.A. Jacobsen, of Rockford, for appellee.
PRESIDING JUSTICE THOMAS J. MORAN delivered the opinion of the court.
This is an action for personal injuries arising out of an auto accident on July 20, 1965. In the trial of this case the plaintiff proved medical bills amounting to $1,318.30, and claimed lost wages of $2,800 in addition thereto. The jury returned a verdict of $37,500 on behalf of the plaintiff upon her claim that the accident occasioned the surgical removal of an intervertebral disc in February of 1966. The accident occurred when the defendant's tractor-trailer *244 struck the rear end of plaintiff's vehicle, driving it into a vehicle in front of her.
Two assignments of error are made. Both concern the conduct of plaintiff's counsel; first, in his examination of the plaintiff during the trial and second, during his argument to the jury.
The record discloses that the court reporter was not present at the time of plaintiff's opening statement and defendant's closing argument, "... but was called in by the Court in the middle of Mr. Goldman's final argument before the jury...." Plaintiff, in her brief, states "... the court can read the same and decide whether or not the trial judge erred in his judgment.... It should also be noted that only part of plaintiff's closing argument was reported and none of the appellant's argument to the jury was reported, and, therefore, is not subject to review by the Appellate Court."
[1] The plaintiff has not cited any authority for this proposition; however, in the case of Brown v. Schintz, 98 Ill. App. 452, 455 (1901) it was held:
"Although the transcript of record is not complete as to the whole case, yet if it fully and fairly presents all matters material and necessary for a decision of the questions involved, under the assignments of error, it is enough." (Citations omitted.)
The Brown case was later affirmed by the Supreme Court, 202 Ill. 509, 67 NE 172 (1903), and in quoting from an earlier case of Bertrand v. Taylor, 87 Ill. 235, it had this to add at pages 512-513:
"`... This court cannot properly consider any question arising upon the record unless we have a full record before us, or it is made known to us in some approved manner that the transcript contains all parts of the record material to the question submitted to us for decision.'" (Emphasis added.)
*245 The defendant relies upon only the transcribed portion of the plaintiff's closing argument to present one of his questions of error. Even if the closing remarks of defendant's counsel were of such a nature as to provoke the final remarks of plaintiff's counsel, which is not claimed herein, still, under the Brown case, an "approved manner" for making such instance known to this Court would be for the plaintiff to use Supreme Court Rule 323(c). We, therefore, find no merit to plaintiff's contention in this regard.
Some excerpts of plaintiff's closing argument to the jury, which are mostly directed at defense counsel, are as follows:
"Is that fair, ladies and gentlemen of the jury to try and deprive this poor widow of whatever she has coming? ...
"Would you want that to happen to you, to be treated that way?"
Counsel referred to defense counsel as "... this man who plays fast and loose with the facts in this case, such as counsel has done." The court overruled an objection and plaintiff's counsel then continued:
"Think about all of that. Think about it. It isn't decent, it isn't fair. He is trying to change the facts by trickery, he is trying to change the situation, he is trying to color the facts, to distort the facts and take them out of context.
"But I'm up to his gimmicks, I'm up to his tricks."
While referring to a doctor who had testified on behalf of the plaintiff, counsel, directing his remarks at defense counsel, observed the doctor had: "... graduated from medical school in 1928 before this guy was born."
*246 Shortly thereafter counsel argued, "... And while that doctor was doing that very thing for his country (referring to the fact that the doctor was a surgeon in a field hospital during the war), this attorney, the attorney for the defendants had just gotten out of his rompers and was an escapee from a playpen."
Continuing on about the doctor, counsel stated: ". .. But to now come in and find after all those 42 years of practice and a member of all these learned medical societies in connection with his profession, and find this young man who was not even born when he started to practice medicine, who was just getting out of his rompers when the doctor was in the Army...."
In referring to defense counsel's examination of the plaintiff's physician and a myelogram examination, plaintiff's counsel argued, "... Then Mr. Stern asked the doctor, getting back to Mrs. Paulsen, whether or not she should have a myelogram, and again they had to torture her some more. They are not satisfied that they put her in the hospital and caused her one operation which laid her up for ten months, now they want to subject her to this horrifying, terrible ordeal of another jab with the needle into her back and go through that again. That is what they want to do, and the doctor tells you absolutely not, it can't be done.
"... Ladies and gentlemen of the Jury, he has the temerity, the guts, the gall to bring it up time and time again about this arthritic condition...."
While other objections were made, the only objection to the foregoing statements is noted and set out above. Appellee maintains that counsel waived any objection because he failed to object at the time of trial.
[2-5] Certainly it is the duty of counsel to promptly object to improper conduct or argument in order that both *247 parties receive a fair trial of the legal issues present. It is the duty of the trial court to control the proceedings to the extent necessary to insure this result. In a proper case the court has the duty to act promptly to stop misconduct. If the argument of counsel is seriously prejudicial, the court on its own motion should stop the argument and direct the jury not to consider it.
[6, 7] In a clear case, this court will reverse a judgment because of improper conduct and prejudicial statements even though timely objections have been granted and the jury instructed to disregard the remarks. In a case where prejudicial arguments or improper conduct of counsel affect the case to the extent that the litigants cannot receive a fair trial and the judicial process suffers deterioration, this court may consider such an assignment of error even though no objection was made and no ruling made or preserved thereupon by court or counsel. (Belfield v. Coop, 8 Ill.2d 293, 311-313, 134 NE2d 249 (1956).)
[8] This court may thus consider the assignment of error notwithstanding the failure of the defense attorney to object to each statement. The attacks were clearly attacks upon defense counsel. It is obvious that the above remarks have no application to any issue in the case. This court views remarks of plaintiff's counsel as an unwarranted characterization of defendant's counsel and a successful effort to belittle, impugn and ridicule him and thus deprive the defendant of fair treatment by the jury.
[9] The constitutional right of trial by jury is not a license to counsel to indulge in abusive and prejudicial conduct to gain a verdict, nor does it grant any privilege to embarrass, belittle and abuse an adversary before a jury to such an extent that the hope of the adversary to obtain respectful consideration at the hands of the jury is destroyed or seriously jeopardized. Vujovich v. Chicago Transit Authority, 6 Ill. App.2d 115, 122-123, 126 *248 NE2d 731 (1955); Vandaveer v. Norfolk & Western Ry. Co., 78 Ill. App.2d 186, 207-208, 222 NE2d 897 (1966).
[10] In this court's view of the case, the conduct of counsel and the verdict leads us to the conclusion that plaintiff's counsel was successful and that the prejudicial argument had an obvious prejudicial effect upon the jury.
Defendant assigns, as further error, two other incidents which occurred during trial.
First, in his direct examination of the plaintiff, her counsel established that she was a widow since 1951 with two children, 18 and 30 years of age. He then inquired:
Q. "And this boy has been living with you ever since he was born, the 30 year old one?"
A: "Yes."
Q: "What is his condition?"
A: "You mean, the older boy?"
Q: "Yes."
A: "He is a quadraplegic."
Q: "And you are his sole support?"
A: "Yes."
Second, defendant complains that, in his closing argument to the jury, plaintiff's attorney referred to the plaintiff as a "poor widow."
[11-13] Because of our prior conclusion it is not necessary to discuss at length the propriety of the above two assignments of error. However, the court suggests some guidelines for the retrial of this case. The mere statement, upon direct examination, that the plaintiff was a widow is not in itself prejudicial. The fact that she is the sole care of a quadraplegic son was not an issue in this case and certainly should be avoided upon the retrial. The reference to the plaintiff as a "poor widow" in the closing argument is an obvious effort at sympathy and prejudice. All of the foregoing taken together could easily be considered reversible error.
*249 The judgment of the trial court denying the post-trial motion for a new trial is reversed and the cause remanded for a new trial in accordance with this decision.
Reversed and remanded.
DAVIS and SEIDENFELD, JJ., concur.
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65 So.3d 1044 (2009)
ACE DONALD HUTCHINS
v.
ANDREA L. HUTCHINS GILLIAM.
No. 2080390.
Court of Civil Appeals of Alabama.
October 23, 2009.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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|
J-S47026-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
GUY EDWARD YEAGER
Appellant No. 2086 MDA 2015
Appeal from the Judgment of Sentence November 2, 2015
In the Court of Common Pleas of Franklin County
Criminal Division at No(s): CP-28-CR-0000918-2014
BEFORE: SHOGAN, J., LAZARUS, J., and JENKINS, J.
MEMORANDUM BY JENKINS, J.: FILED AUGUST 09, 2016
Appellant Guy Edward Yeager appeals from the judgment of sentence
entered in the Franklin County Court of Common Pleas following his jury trial
conviction for three counts of involuntary deviate sexual intercourse (“IDSI”)
with a child, and one count each of corruption of minors and indecent assault
of a child.1 We affirm.
On December 6, 2013, Franklin County Children and Youth Services
were notified of allegations that Appellant sexually assaulted his nephew
(“Victim”). N.T., 5/18/2015, at 162. On January 9, 2014, CYS caseworker
Nicholas Ranney interviewed Victim. Id. at 166-68. Detective Travis
Carbaugh of the Waynesboro Police Department was present. Id. at 168.
____________________________________________
1
18 Pa.C.S. § 3123(b), 6301(a)(1)(ii), and 3126(a)(7), respectively.
J-S47026-16
During the interview, which was videotaped, Victim described the sexual
abuse committed by Appellant. On January 15, 2014, Appellant was
arrested.
On February 28, 2014, the Commonwealth filed a tender years motion
and a motion for closed-circuit testimony.2 The Commonwealth sought to
introduce statements Victim made to his Mother and statements he made
during the January 9, 2014 interview. The Commonwealth also requested
permission to allow Victim to testify by contemporaneous alternative method
so that he did not have to testify before Appellant.
On April 23, 2014, the trial court held a hearing on the motions. At
the hearing, Mr. Ranney and Victim’s mother testified, and Victim testified in
camera. On April 29, 2014, the trial court found Mr. Ranney could testify to
statements Victim made to him on January 9, 2014, but found Mother would
not be permitted to testify regarding statements Victim made to her. The
court also granted the Commonwealth’s motion for closed-circuit testimony.
On May 19, 2015, a jury found Appellant guilty of three counts of IDSI
of a child, and one count each of corruption of minor and indecent assault of
a child.3 The trial court ordered that the Sexual Offender’s Assessment
____________________________________________
2
The Commonwealth previously requested a continuance of the preliminary
hearing in order to file the motions, and the request was granted.
3
Victim testified at trial via closed-circuit television. N.T., 5/18/2015, at 33-
106. The video of Mr. Ranney’s interview of Victim also was played for the
jury during Mr. Ranney’s testimony. Id. at 169.
-2-
J-S47026-16
Board (“SOAB”) conduct an assessment of Appellant and prepare a report
evaluating whether Appellant met the criteria as a sexually violent predator
(“SVP”).4 On November 2, 2015, the trial court held a hearing, and found
Appellant met the criteria as a SVP. That same day, the trial court
sentenced Appellant to 25 to 60 years’ imprisonment.5
Appellant filed a timely notice of appeal. Both Appellant and the trial
court complied with Pennsylvania Rule of Appellate Procedure 1925.6
Appellant raises the following issue on appeal:
Did the trial court err or abuse its discretion when it
granted the Commonwealth’s [t]ender [y]ears [m]otion
allowing Nicholas Ranney to testify as to hearsay
statements the alleged victim made to him because the
time, content and circumstances of the statements did not
provide sufficient indicia of reliability due to the
inconsistency of the statements made, the use of
terminology unexpected of a child of similar age and the
presence of a motive to fabricate?
Appellant’s Brief at 8.
____________________________________________
4
In his 1925(b) statement, Appellant also alleged the trial court erred or
abused its discretion when it classified Appellant as a SVP. He, however,
does not challenge the court’s SVP classification in his appellate brief.
Therefore, he has waived this claim. Pa.R.A.P. 2116(a) (“No question will be
considered unless it is stated in the statement of questions involved or is
fairly suggested thereby.”).
5
The trial court sentenced Appellant to the following consecutive sentences:
96 to 240 months’ imprisonment for each IDSI conviction; 6 to 12 months’
imprisonment for the corruption of a minor conviction; and 6 to 12 months’
imprisonment for the indecent assault conviction.
6
The trial court’s 1925(a) opinion incorporates its April 29, 2014
memorandum addressing the Commonwealth’s tender years motion.
-3-
J-S47026-16
This Court applies the following standard of review for admission of
evidence claims:
The admission or exclusion of evidence is within the sound
discretion of the trial court, and in reviewing a challenge to the
admissibility of evidence, we will only reverse a ruling by the
trial court upon a showing that it abused its discretion or
committed an error of law. Thus, [this Court’s] standard of
review is very narrow. To constitute reversible error, an
evidentiary ruling must not only be erroneous, but also harmful
or prejudicial to the complaining party.
Commonwealth v. Lopez, 57 A.3d 74, 81 (Pa.Super.2012) (quoting
McManamon v. Washko, 906 A.2d 1259, 1268–1269 (Pa.Super.2006)).
The Pennsylvania Rules of Evidence define hearsay as “a statement
that (1) the declarant does not make while testifying at the current trial or
hearing; and (2) a party offers into evidence to prove the truth of the matter
asserted in the statement.” Pa.R.E. 801(c). “Hearsay is not admissible
except as provided by [the Pennsylvania Rules of Evidence], by other rules
prescribed by the Pennsylvania Supreme Court, or by statute.” Pa.R.E. 802.
In Pennsylvania, the Tender Years Act, 42 Pa.C.S. § 5985.1, creates an
exception to the hearsay rule for victims of childhood sexual abuse. See
Commonwealth v. G.D.M., Sr., 926 A.2d 984, 988 (Pa.Super.2007).
The tender years exception provides:
(a) General rule.–An out-of-court statement made by a child
victim or witness, who at the time the statement was made was
12 years of age or younger, describing any of the offenses
enumerated in 18 Pa.C.S. Chs. 25 (relating to criminal
homicide), 27 (relating to assault), 29 (relating to kidnapping),
31 (relating to sexual offenses), 35 (relating to burglary and
other criminal intrusion) and 37 (relating to robbery), not
-4-
J-S47026-16
otherwise admissible by statute or rule of evidence, is admissible
in evidence in any criminal or civil proceeding if:
(1) the court finds, in an in camera hearing, that the
evidence is relevant and that the time, content and
circumstances of the statement provide sufficient indicia of
reliability; and
(2) the child either:
(i) testifies at the proceeding; or
(ii) is unavailable as a witness.[7]
42 Pa.C.S. § 5985.1. “The tender years exception allows for the admission
of a child’s out-of-court statement because of the fragile nature of young
victims of sexual abuse.” Commonwealth v. Lukowich, 875 A.2d 1169,
1172 (Pa.Super.2005), appeal denied, 885 A.2d 41 (Pa.2005). A statement
admitted under Section 5985.1 must possess sufficient indicia of reliability,
____________________________________________
7
Pursuant to the Tender Years Act:
[T]o make a finding under subsection (a)(2)(ii) that the
child is unavailable as a witness, the court must
determine, based on evidence presented to it, that
testimony by the child as a witness will result in the child
suffering serious emotional distress that would
substantially impair the child’s ability to reasonably
communicate. In making this determination, the court may
do all of the following:
(1) Observe and question the child, either inside or outside
the courtroom.
(2) Hear testimony of a parent or custodian or any other
person, such as a person who has dealt with the child in a
medical or therapeutic setting.
42 Pa.C.S. § 5985.1(a.1).
-5-
J-S47026-16
as determined from the time, content, and circumstances of its making.
Commonwealth v. O’Drain, 829 A.2d 316, 320 (Pa.Super.2003) (citing
Commonwealth v. Fink, 791 A.2d 1235, 1248 (Pa.Super.2002)). Courts
consider various factors to determine whether the statements are reliable,
including “the spontaneity of the statements, consistency in repetition, the
mental state of the declarant, use of terms unexpected in children of that
age and the lack of a motive to fabricate.” Commonwealth v. Walter, 93
A.3d 442, 451 (Pa.2014) (quoting Commonwealth v. Delbridge, 855 A.2d
27, 34 n. 8 (Pa.2003)).
Appellant concedes the statements are relevant, but argues the
statements do not contain sufficient indicia of reliability.
The trial court found:
After viewing the video recording of the January 9, 2014
interview and considering the above[-]enumerated factors,
the [c]ourt finds that [Victim’s] statements to Nicholas
Ranney provide sufficient indicia of reliability. First,
[Victim] said that he did not know why he was brought in
for the interview but initially started disclosing information
about the alleged abuse spontaneously. Ranney asked
[Victim] if he visits any family members, and [Victim] said
that he goes to see his grandmother but he is not around
[Appellant] anymore. [Victim] said his grandmother
kicked [Appellant] out of the house for molesting him.
[Victim] was also consistent in the interview as he did not
recant any statements and he gave very specific,
organized details about the alleged incidents. For
example, [Victim] explained the orientation of [Appellant’s]
bedroom. Also, the statements [Victim] said to Ranney
were consistent with the statements he said to his Mother,
specifically that the alleged incidents occurred in
[Appellant’s] bedroom. Also [Appellant] told [Victim] to
“do what girls do,” and that he “sucked” [Victim’s]
-6-
J-S47026-16
“privates.” Second, there is little evidence on [Victim’s]
mental state when he made the statements, but he
appeared on the video recording to be unimpaired.
Additionally, [Victim] said that [Appellant] told him “not to
let anyone know,” that it was a “secret” between [Victim]
and [Appellant]. Such statements show sufficient indicia
of reliability as [Victim] likely feared retribution from
[Appellant]. See Commonwealth v. Kriner, 915 A.2d
653, 660 n.3 (Pa.Super.2007) (the child victim “made the
statements despite [the] fact that she was suffering
negative consequences as a result of the disclosure.”).
Third, [Victim] recounted the details of the alleged sexual
acts which children his age may not be likely to know, but
in terms a child with actual knowledge of such acts would
likely use. For example, [Victim] said that [Appellant] put
his “you know what” into his “rear end” when he “humped”
him. [Victim] also said that [Appellant] “sucked” his
“private,” and “sucked” his “thinger” and “humped” him.
[Victim] said that [Appellant] told him to “touch his private
and do what a girl does.” Also, [Appellant] “put a rubbery
thing on his private,” and when he humped [Victim], his
“you know what” was inside [Victim’s] “rear end.” [Victim]
also said that [Appellant] “was an adult and my mom told
me to listen to any adult.” Fourth, there was no evidence
presented to show [Victim] had a motive to fabricate. The
[c]ourt finds the time, content, and circumstances of
[Victim’s] statements to Nicholas Ranney provide sufficient
indicia of reliability.
Opinion and Order of Court, filed Apr. 19, 2014, at 7-80. The trial court
considered the factors and did not abuse its discretion or err in applying the
law.
Appellant argues that the statements were not spontaneous because
they were influenced by an “external stimulus.” Appellant’s Brief at 14. He
claims Victim stated that Appellant used to work for a carnival “but he got
fired a week later because of molesting children” and that Victim’s
grandmother kicked Appellant out of the house “for molesting me.” Id.
-7-
J-S47026-16
Appellant argues Victim would not have first-hand knowledge of Appellant’s
termination of employment or of the reason his Grandmother did not let
Appellant live at her home. Id. at 15. Therefore, Appellant argues,
someone told Victim the information, and the statements were not
spontaneous. Id. However, as the trial court noted, Victim did not know
why he was being interviewed and offered many details about the incidents
of abuse.
Appellant also maintains that Victim’s use of the term “molested” was
not age-appropriate, and established that someone told Victim what to say.
Appellant’s Brief at 16. However, Appellant fails to establish that a 10-year-
old would not use the term “molested.” Further, even if someone had told
Victim that Appellant had lost his job because he molested someone or told
Victim that Appellant had molested him, Victim described the “molestation”
during the interviewing, using details and age-appropriate terms.
Appellant next argues that there was no indication during the interview
of when the alleged abuse occurred and that the January 9, 2014 interview
occurred a month after the December 6, 2013 allegation of abuse made to
CYS. Appellant’s Brief at 17. Appellant maintains, because of the time
delay, Victim was less likely to accurately remember the incidents. Id.
However, as noted above, Appellant recalled many details of the incidents,
and was able to relay those details during the interview.
Appellant also maintains that the presence of Detective Carbaugh, a
police officer, gave Appellant motive to fabricate. Appellant’s Brief at 17-18.
-8-
J-S47026-16
Appellant provides no support for this contention. Further, during his
competency examination, Victim stated that he believed he could “get in a
lot of trouble” for lying. N.T., 5/18/2015, at 36.
The trial court acted within its discretion when it admitted the
statements Victim made during the January 9, 2014 interview pursuant to
the Tender Years Act.
Judgment of sentence affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/9/2016
-9-
|
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776 S.W.2d 106 (1989)
Eddie SMITH, Individually and Eddie Smith as Next-of-Kin, f/u/b of the Heirs of Frederick Keith Smith, Deceased, Plaintiff/Appellee,
v.
SOUTHEASTERN PROPERTIES, LTD., d/b/a Southwinds Apartments, Bill Turner, Leo J. Johnson, Wayne Key, Glen G. Blackwell, William R. Collins, and Rex Rankin, Jr., d/b/a North Shelby Pools, Defendants/Appellants.
Court of Appeals of Tennessee, Western Section.
February 24, 1989.
Application for Permission to Appeal Denied August 7, 1989.
*107 Robert F. Miller and Daniel F. Johnson, of Wildman, Harrold, Allen, Dixon & McDonnell, Memphis, for defendants-appellants.
Leslie I. Ballin, Ballin & Ballin, P.C., Memphis, for plaintiff-appellee.
Application for Permission to Appeal Denied by Supreme Court, August 7, 1989.
TOMLIN, Presiding Judge (Western Section).
This is an interlocutory appeal pursuant to Rule 9 T.R.A.P. from the Circuit Court for Shelby County. This court granted the appealing defendants permission to challenge the trial court's order granting plaintiff's motion to amend his complaint to add them as party defendants pursuant to T.R.C.P. 15.03, at the same time overruling defendants' motion for summary judgment. In so doing the trial court disallowed their plea of the statute of limitations. The sole issue presented by the appeal is whether the trial court erred in overruling defendants' summary judgment motion. We hold that it did. Accordingly, we reverse and dismiss.
On June 10, 1984, plaintiff's minor son drowned in the Southwinds Apartments' swimming pool. On May 15, 1985, plaintiff *108 filed his complaint against Southeastern Properties, Ltd., d/b/a Southwinds Apartments, as well as against Bill Turner and Leo J. Johnson, d/b/a North Shelby Pools.[1] Service was not had on Southeastern Properties, alleged in the complaint to be a corporation. The summons was returned by the Shelby County Sheriff's Office with the notation "no authorized agent in this state."
The applicable one-year statute of limitations for plaintiff's wrongful death action ran on June 10, 1985. On June 13, 1985, plaintiff filed an amended complaint, this time alleging that Southeastern Properties was a limited partnership, with Wayne Key as general partner, and Graham C. Blackwell, William R. Collins and Rex Rankin, Jr. as limited partners. They were all served. On August 9, 1985, these defendants filed a motion to dismiss and/or for summary judgment, contending they did not own Southwinds Apartments on the date of young Smith's death.
On November 18, 1985, plaintiff filed yet another motion to amend his original complaint, this time seeking to add as defendants Southwinds Associates, Ltd., a limited partnership, which was in fact the actual owner of the subject property at the time of the incident, along with its two general partners and all of its limited partners. Each general partner of Southwinds was served with a summons, a copy of the original complaint, a copy of the first amended complaint, and a copy of the motion to allow amendment. One general partner received these documents on November 29, 1985, the other on December 2, 1985. These defendants are the "appealing defendants" in the case under consideration. On December 27, 1985, the appealing defendants filed their motion to dismiss and/or for summary judgment, asserting two grounds (1) the statute of limitations; and (2) that the limited partners had no liability.
On May 29, 1986, the trial court entered an order dismissing the case with prejudice as to Southeastern Properties and its partners, leaving Turner and Johnson in the case. On January 28, 1987, the trial court entered an order allowing plaintiff to amend his complaint to add the defendants herein. As of this time, however, no complaint has been filed setting forth a cause of action against these defendants. On April 29, 1988, after a hearing on defendants' motion for summary judgment, the trial court overruled the motion and again allowed plaintiff's amendment to his original complaint, relating the amendment back to May 15, 1985, the date the original complaint was filed.
Rule 15.03 of the Tennessee Rules of Civil Procedure, which is identical with Rule 15(c) of the Federal Rules of Civil Procedure, provides as follows:
Whenever the claim or defense asserted in the amended pleadings arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and if, within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a misnomer or other similar mistake concerning the identity of the proper party, the action would have been brought against him. Except as above specified, nothing in this rule shall be construed to extend any period of limitations governing the time in which any action may be brought.
In Karash v. Pigott, 530 S.W.2d 775, 777 (Tenn. 1975), our Supreme Court noted that "Rule 15.03 has never been construed by our courts; however, its language is so *109 clear and unequivocal that it is virtually self-construing."
Furthermore, the Committee comments to this rule make clear under what circumstances a party brought into the litigation late may be kept in the litigation:
Under Rule 15.03, an amendment changing the party against whom a claim is asserted will relate back to the date of the original pleading and thus avoid the bar of any statute of limitations if, and only if, the party brought in by amendment receives notice, before the statute has run, that the suit has been brought and that he knows or should have known that but for misnomer or similar mistake the suit would have been brought against him. The rule does not, therefore, raise any possibility that a person who has had no reason to know that he is expected to respond to a claim will be brought into a suit after the applicable statute of limitations has run.
It is clear from the rule, the Committee comments, and cases construing Rule 15, in both our courts and the federal system, that timely notice to the party being charged is material to the amendment relating back to the date of the original suit. In order to be "timely" the notice must be received during the statutory period by the party sought to be charged in this case one year from the date of death on June 10, 1984. "Notice" means notice that a lawsuit asserting a legal claim has been filed. That the defendants in the case under consideration may have had notice of the incident out of which this action arose is insufficient. Osborne Enterprises, Inc. v. City of Chattanooga, 561 S.W.2d 160, 164 (Tenn. App. 1977); Jenkins v. Carruth, 583 F. Supp. 613, 616 (E.D.Tenn. 1982), aff'd, 734 F.2d 14 (6th Cir.1984)
Neither in the trial court nor in this Court does plaintiff contend the appealing defendants had actual knowledge or notice of plaintiff's original lawsuit. Rather, plaintiff contends that one or more of several people were "agents" of these defendants, one or more of these "agents" had knowledge of the institution of the suit prior to the running of the statute of limitations, and this knowledge should be imputed to the defendants. A reading of the record demonstrates that the trial judge did not resolve the question of notice, for in overruling defendants' summary judgment motion and allowing plaintiff's amendment to relate back to the date of the original complaint, the court simply stated: "Well, then on a question that close I'd be inclined to allow it. I'm going to allow it."
In a case such as this, in which the defendants have asserted a defense based on the statute of limitations, if their entitlement to the statute's protection has been established, the burden of proof shifts to the plaintiff to establish the exception to the statute being claimed. Stockburger v. Ray, 488 S.W.2d 378, 382 (Tenn. App. 1972). Plaintiff did not seek any relief against the defendants herein until November, 1985, more than five months after the statute of limitations had run. Thus, the record on its face revealed that the one-year statute of limitations barred plaintiff's action against these defendants, thereby shifting the burden to the plaintiff to establish by credible proof that the defendants are not entitled to this defense.
Rule 15.03 presents a two-pronged test. We will discuss the first of those notice presently. Addressing the second element, plaintiff has not shown that the failure to name these defendants in the original complaint resulted from a "mistake concerning the identity of the proper party," as required by Rule 15.03(2). A "mistake" within the meaning of this rule does not exist merely because a party who may be liable for conduct alleged in the original complaint was omitted as a party defendant. Jenkins, 583 F. Supp. at 616. Plaintiff addressed this element only by way of argument, which does not rise to the dignity of evidence.
Notice is clearly the critical element involved in the application of Rule 15.03. The type of notice required under these circumstances has been described as "fair notice that a legal claim existed in, and was in effect being asserted by," the plaintiff. Williams v. United States, 405 F.2d 234, 236-38 (5th Cir.1968). Plaintiff has in no *110 way challenged the affidavits of Southwinds' two general partners wherein they stated unequivocally under oath they were unaware of plaintiff's legal claim until November-December, 1985. Rather, plaintiff seeks to establish notice on the basis of an alleged agency relationship between the named defendants and certain individuals.
The record reflects that following the death of young Smith, the Integon Insurance Company, Southeastern's insurer, set in motion an investigation of plaintiff's claim. Jeffrey Burns testified he was an independent insurance adjuster employed by Integon to investigate the accident and to report to Integon. He testified the only person with whom he ever made contact was Mrs. Betty Galloway, the apartment manager. He sent a copy of plaintiff's notice letter to Integon and to Dan Richardson, an attorney employed by Integon. Burns identified the named insured as Southwinds Associates. He had no contact whatsoever with the entity, Southwinds Associates. Furthermore, there is no evidence in the record that any of the defendants employed either Burns or Richardson or that they even knew Burns or Richardson. While we find no case law on this point from Tennessee, it has been held that in the context of litigation neither an insurance company nor persons employed by it are agents of the insured. See Attleboro Manufacturing Co. v. Frankfort Marine, Accident & Plate Glass Ins. Co., 240 F. 573 (1st Cir.1917).
In addition, plaintiff contends one of Southwinds' present counsel, Robert Miller, was an attorney of record for Southeastern; thus, Southwinds would be charged with notice through him. The technical record does reflect that after plaintiff filed his first amended complaint against Southeastern Properties, Robert Miller filed Southeastern's motion to dismiss on the grounds that it did not own the property. This is the first time Miller appeared for Southeastern. He filed this pleading on August 9, 1985, two months after the statute of limitations had run. This would in no way meet the requirement of Rule 15.03
The last "agent" as contended by plaintiff through whom defendants purportedly received sufficient notice was Betty Galloway, the apartment manager at the time young Smith drowned. There is no testimony by Mrs. Galloway in the record. Plaintiff's characterizations of Mrs. Galloway's actions at the time suit was filed in "refusing to accept service" and in June, 1985 allegedly misleading plaintiff's investigator are misstated insofar as the alleged refusal of service of process is concerned. The record does not reflect that service was refused by her. Written on the face of the summons issued to Southeastern Properties, Ltd., d/b/a Southwinds Apartments at 1760 Chancery, by a representative of the Shelby County Sheriff's Office, is the following legend: "Their [sic] is no authorized agent in this State per Betty Galloway Res Mgr." Furthermore, a reading of the affidavit of plaintiff's investigator indicates plaintiff's statements to the effect that Mrs. Galloway misled the investigator as to who owned the property is a conclusion in the way of argument not borne out by the affidavit.
In conclusion, we find plaintiff failed to carry his burden of proof to establish by credible evidence that prior to the running of the one-year statute of limitations these defendants "had fair notice that a legal claim existed in and was being asserted by" the plaintiff. This record does not establish that either of the two tests required by Rule 15.03 in order to relate the amendment back to the initial filing date has been met.
Accordingly, the trial court's judgment is reversed. Plaintiff's motion seeking to bring in as party defendant Southwinds Associates, Ltd. and all of its partners is denied. Defendants' summary judgment motion is granted, as these defendants are protected by the one-year statute of limitations. Costs on appeal are taxed to the plaintiff, for which execution may issue if necessary.
FARMER, J., and McLEMORE, Special J., concur.
NOTES
[1] Service of process was had on Turner and Johnson. They are not involved in the issue prsented by this appeal.
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131 Mich. App. 92 (1983)
345 N.W.2d 647
BANASZEWSKI
v.
COLMAN
Docket No. 65440.
Michigan Court of Appeals.
Decided December 8, 1983.
Charfoos, Christensen, Gilbert & Archer, P.C. (by Adrienne G. Southgate and Ronald L. Gilbert), for plaintiff.
Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, P.C. (by Ernest R. Bazzana and Thomas M. O'Leary), for defendants Levitt & Gorenstein.
Kitch, Suhrheinrich, Smith, Saurbier & Drutchas, P.C. (by Mark D. Willmarth), for defendant Richard J. Colman.
Barbier, Goulet & Petersmarck, P.C. (by Ralph W. Barbier, Jr.), for defendant Martin Place Hospital-East.
Before: HOOD, P.J., and V.J. BRENNAN and D.S. DEWITT,[*] JJ.
PER CURIAM.
Plaintiff appeals as of right from the dismissal, with prejudice, of her suit alleging medical malpractice. The dismissal was based on plaintiff's failure to comply with a pretrial order requiring her to file a specific statement setting forth the "area of malpractice concerning each defendant and defendant's failure to perform in relation thereto".
Plaintiff concedes that a trial judge has the authority to dismiss an action where a party has failed to comply with a court order. Plaintiff claims, however, that its pretrial statement did *94 comply with the judge's order. We disagree and affirm.
GCR 1963, 504.2 permits the court to dismiss any action in which a plaintiff fails to comply with its orders. Dismissal may be ordered where a party fails to comply with a court's order to amend pleadings to make them more specific. S & S Excavating Co, Inc v Monroe County, 37 Mich App 358, 362, 366-367; 194 NW2d 416 (1971). In the present case, the trial judge's order to plaintiff to make her pretrial statement more specific was a valid one. Dismissal was an acceptable remedy for failure to comply. This Court need only decide whether the trial judge abused his discretion by deciding that plaintiff failed to comply with his pretrial order.
Plaintiff argues that dismissal was appropriate only if her complaint and pretrial statement, read together, failed to state a claim. We do not believe that the trial judge's authority to dismiss a case for a party's failure to comply with his orders is limited to complaints which fail to state a claim. GCR 1963, 301.1 requires a trial court to direct the parties' attorneys to appear before it for a pretrial conference. It may direct the attorneys to state and simplify the factual and legal issues to be litigated. GCR 1963, 301.1(1). The same provision allows the court to direct the parties to consider the formal amendment of pleadings or to order such amendment if desirable or necessary. If the trial court's power to direct pretrial summaries is limited to directing the amendment of pleadings, the language requiring the court to direct the attorneys to "state and simplify the factual and legal issues to be litigated" is rendered nugatory. We believe that GCR 1963, 301 was intended to allow the judge to require a far more specific *95 statement of the issues to be litigated. One of the primary goals of the pretrial conference is to illuminate and narrow the issues to be litigated, thereby shortening trial proceedings. See 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 6. See also Applebaum v Wechsler, 350 Mich 636, 650; 87 NW2d 322 (1957). A trial judge has the authority to direct a party to make a pretrial summary which is more specific than a pleading sufficient to state a claim. Where discovery has been completed (as in this case), such a claim should not be difficult to make. A trial judge must have the discretion to treat a party's failure to make an adequate pretrial statement as a failure to participate in pretrial proceedings. Where such a failure occurs, the trial judge must have the discretion to enforce his orders by appropriate sanctions. See Kromat v Vestevich, 14 Mich App 291; 165 NW2d 428 (1968).
In attempting to determine if the trial judge abused his discretion by dismissing plaintiff's complaint, we have reviewed the entire court file, particularly plaintiff's various complaints and the pretrial statement and amendment thereto. We are satisfied that good and substantial reasons existed for the court's order to plaintiff to specify more fully the factual and legal bases of her claims. Plaintiff had not adequately specified the standard of care, how the standard was breached, theories of causation, or the type of injury.[1] She
*96 *97 had not named an expert witness from whom this information could be obtained. Subsequent to defendant's motions to dismiss, plaintiff did not seek to amend the pretrial statement to expose her claim more fully. We believe that the trial judge did not abuse his discretion by deciding to dismiss plaintiff's complaint for failure to comply with his order.
Affirmed. Costs to appellees.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] The relevant pleadings state:
"8. That the defendant[s], * * * and their agents and employees, were negligent and violated the standard of care in regard to the treatment, diagnosis and surgical procedures performed upon the plaintiff in one or more of the following ways:
"(a) They did not follow the standard of care in regard to performing a tubal ligation.
"(b) That they violated the standard of care in performing the tubal ligation by also damaging or injuring the plaintiff's uterus and/or colon and other internal organs.
"(c) The defendants failed to follow the standard of care in regard to performance of the routine abortion which may also have been involved in this case; but instead, they caused injury and damage to the plaintiff's colon and/or uterus and other internal organs.
"(d) That the defendants, their agents and employees were guilty of violating the standard of care in regard to the surgical procedures involved in this case in other ways which will become more obvious through discovery.
"9. That as a result of the above-mentioned negligent acts of the defendant[s], the plaintiff suffered serious injuries which resulted in extensive hospitalization, medical care and treatment for a long period of time, which all would have been unnecessary had the original surgical procedure been performed properly." (Complaint; first amended complaint.)
and
"3. That when the plaintiff was admitted to the hospital for surgery to be performed as described in the original complaint, in August of 1977, Dr. Jack Levitt was the anesthesiologist.
"4. That the defendant Dr. Levitt did perform the anesthesiology throughout the surgery in question during the hospitalization in August of 1977.
"5. That based upon the deposition of the defendant doctor performing the surgery and other evidence available to the plaintiff, the plaintiff believes that the defendant Jack Levitt was negligent and violated the standard of care in administering anesthesiology during said surgery in one or more of the following ways:
"(A) Failing to properly put in place a collar round the endotracheal tube.
"(B) That if the collar was installed, that it was improperly installed and put in place and improperly inflated.
"(C) That throughout the surgery that the defendant Levitt improperly failed to supervise and observe events occurring so as to prevent injury to the plaintiff from occurring from the improper installation or use of a collar described above.
"(D) That the defendant may be negligent in other ways which will become more obvious through discovery.
"6. That as a result of the negligence described above by the defendant Levitt, certain fluids from the stomach of the plaintiff went up the esophagus and came down the endotracheal tube into her lungs causing her severe injury and damage to her lungs and pulmonary system." (Second amended complaint.)
Plaintiff's response to the order to make her claim more specific, intended to be her final pretrial statement, was:
"The plaintiff claims that the current defendant doctor, Dr. Levitt, was negligent in administrating [sic] the anesthesia. Dr. Levitt indicated that he did not use a [sic] endotracheal tube although the hospital records indicate that the patient was `intubated'. The plaintiff claims against Dr. Levitt that he violated the standard of care for administering anesthesia considering the type of surgery that was being done.
"In the alternative, the plaintiff claims against Dr. Colman and his assistant that if in fact Dr. Levitt intubated the patient or that the failure to use the endotracheal tube did not result in the plaintiff's damages, that Dr. Colman may have been negligent in either nicking the uterus or in causing some other type of abdominal injury which resulted in the plaintiff's injuries. The plaintiff submits that every doctor who has testified and reviewed this matter seems to have a different opinion as to what occurred.
"Responsibility on the part of the hospital may rest with the nursing staff and assistants who knew or should have known that the patient was to be intubated and they failed to do so since intubation is the normal procedure for this type of surgical procedure according to Dr. Colman." (Pretrial statement, 12/21/81.)
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Citation Nr: 1438748
Decision Date: 08/29/14 Archive Date: 09/03/14
DOCKET NO. 09-30 703 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Winston-Salem, North Carolina
THE ISSUES
1. Entitlement to a rating in excess of 30 percent for left knee strain from December 18, 2012, to include on a scheduler and extra-schedular basis.
2. Entitlement to a temporary total rating based on left knee surgery necessitating convalescence.
REPRESENTATION
Appellant represented by: The American Legion
ATTORNEY FOR THE BOARD
D. Rogers, Associate Counsel
INTRODUCTION
The Veteran served on active duty from January 2002 to May 2006.
These matters come before the Board of Veterans' Appeals (Board) on appeal from July 2008 (increase for left knee) and April 2014 (temporary total disability) rating decisions of the Department of Veterans Affairs (VA) Regional Office (RO) in Winston-Salem, North Carolina.
In February 2013, the Appeals Management Center (AMC) granted an increased 30 percent rating for the Veteran's left knee strain, effective December 18, 2012. As that grant did not represent a total grant of benefits sought on appeal, the claim for increase remains before the Board. AB v. Brown, 6 Vet. App. 35 (1993).
In August 2013 the Board, in relevant part, denied entitlement to an initial rating in excess of 10 percent for left knee strain prior to December 18, 2012, and remanded the issue of entitlement to a rating in excess of 30 percent from December 18, 2012, for additional development. The Board again remanded the claim for additional development in January 2014. The case has since been returned to the Board for further appellate consideration.
This appeal was processed using the Virtual VA paperless claims processing system. Accordingly, any future consideration of this appellant's case should take into consideration the existence of this electronic record. In evaluating this case, the Board has reviewed the Veteran's electronic file on the Virtual VA and VBMS systems to ensure a complete assessment of the evidence.
This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c). 38 U.S.C.A. § 7107(a)(2) (West 2002).
The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ). VA will notify the appellant if further action is required.
REMAND
While the Board sincerely regrets additional delay of adjudication of the Veteran's claims for a disability rating in excess of 30 percent for left knee strain from December 18, 2012, to include on a schedular and extra-schedular basis, and entitlement to a temporary total rating for treatment necessitating convalescence, the Board finds the claims must be remanded for additional development.
As to the claim for increase for left knee strain since December 18, 2012, the Board observes that he was most recently afforded a VA examination to determine the current severity of his left knee strain disability in November 2013. A December 2013 statement from Dr. RM, the Veteran's private orthopedic physician who performed left knee arthroscopy with partial lateral meniscectomy, chondral debridement, and removal of loose bodies in July 2013, indicated that the Veteran has continued to have significant left knee problems since undergoing surgery with no real improvement in his left knee disability. He stated that further testing was in progress to hopefully find the underlying problem causing continued left knee pain. VA treatment records dated most recently through January 31, 2014, contain a January 2014 report of a left lower extremity MRI, which showed a radial tear in the anterior horn of the lateral meniscus and small left knee effusion. This evidence suggests that the Veteran's left knee strain disability has worsened since it was most recently evaluated during VA examination in November 2013. The Board also notes that in a December 2013 statement, the Veteran raised concerns as to the adequacy of range of motion findings obtained during the November 2013 examination. To ensure that the evidence of record accurately portrays the current severity of the Veteran's left knee disability, the Board finds that it is necessary to afford the Veteran a new VA examination. 38 C.F.R. § 3.159(c)(4)(i) (2013).
In addition, in January 2014, the Board directed that VA treatment records be obtained from the Salisbury VAMC/Charlotte CBOC dating since December 2012. On review, however, it appears that VA treatment records were obtained dating from December 2013. Thus, VA treatment records dating from December 2012 must again be requested and associated with the claims file for review. Ongoing private treatment records OC and PMA should also be requested and associated with the claims file for review.
The Board also notes that evidence received from the Veteran on December 20, 2013, includes a work attendance record which purportedly shows his leave used during the course of his employment at the U.S. Postal Service from August to December 2013. The record appears to show leave entered for "FMLA" protected conditions and "leave without pay" as the Veteran exhausted both his annual and sick leave prior to left knee surgery July 2013 (see June 2013 statement from the Veteran's supervisor). The Board notes, however, that the record contains FMLA paperwork pertaining to conditions other than the left knee disability on appeal (PTSD and influenza). Thus, it is unclear what leave, if any, was used as a consequence of the Veteran's left knee disability on appeal. As this evidence is relevant in determining whether the Veteran's left knee disability has caused marked interference with his employment pursuant to 38 C.F.R. § 3.321(b)(1) as alleged, it is necessary to contact the U.S. Postal Service for clarification of the exact dates and times of any leave the Veteran used as a consequence of his left knee disability on appeal as opposed to any other service-connected and/or FMLA protected disability or condition.
As to the claim for a temporary total rating for treatment necessitating convalescence, in May 2014, the Veteran filed a timely notice of disagreement to an April 2014 rating decision that denied entitlement to a temporary total rating based on left knee surgery in July 2013 necessitating convalescence. The Veteran has appealed the denial of a temporary total rating for treatment necessitating convalescence. He has not yet been provided with a Statement of the Case for that issue. Because the Veteran has filed a notice of disagreement, a remand is necessary for issuance of a Statement of the Case. Manlincon v. West, 12 Vet. App. 238 (1999).
Accordingly, the case is REMANDED for the following action:
(Please note, this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c). Expedited handling is requested.)
1. Obtain all pertinent VA treatment records from the Salisbury VAMC/Charlotte CBOC dating since December 2012. All records and/or responses received should be associated with the claims file.
2. After obtaining any necessary authorization from the Veteran, request relevant private treatment and occupational medical and attendance records from:
a) OC (orthopedic) pertaining to any treatment the Veteran received from Dr. RM at OC and Dr. O at OC University campus for a left knee disability dating since August 27, 2013.
b) PMA (primary care) pertaining to any treatment received at that facility dating since September 2013.
c.) The U.S. Postal Service and any other records repository deemed appropriate and request a copy of all of the Veteran's employment records, including any associated medical records and attendance records. Clarification should be requested to the extent possible as to the exact dates and times of any leave (sick, annual, FMLA, and leave without pay) used related to the Veteran's service-connected left knee disability. If any leave used is known to be for disability other than a left knee disability, that should also be specified.
All efforts to obtain records must be documented in the claims file. If the records do not exist or further attempts to obtain the records would be futile, notify the Veteran in accordance with 38 C.F.R. § 3.159(e).
3. The Veteran should also be scheduled for a new VA examination to determine the current severity of his left knee strain disability. The Veteran's electronic claims file and a copy of this REMAND should be furnished to the examiner, who should indicate in the examination report that he or she has reviewed the claims file. All necessary diagnostic testing should be performed and all findings should be described in detail. The examiner should note any functional impairment caused by the Veteran's left knee disability, including a full description of the effects on his ordinary activities and occupation, if any.
The claims file must be properly documented regarding any notifications to the Veteran as to any scheduled examination.
4. Following receipt of the above requested evidence, undertake any additional development deemed appropriate in light of the additional evidence received. Then, readjudicate the claim for increase for a left knee disability from December 18, 2012, to include on an extra-schedular basis pursuant to 38 C.F.R. § 3.321(b)(1). If the benefit sought on appeal is not granted to the Veteran's satisfaction, a supplemental statement of the case must be provided to the Veteran and his representative. The case should then be returned to the Board for further appellate review, if in order.
5. Also provide the Veteran a Statement of the Case as to the issue of entitlement to a temporary total rating based on left knee surgery in July 2013 necessitating convalescence. If the case needs to be transferred to the RO or if a Statement of the Case must be requested from the RO as to this issue as suggested in the AMC's July 2014 memorandum, this must be accomplished. The Statement of the Case should be sent to the latest address of record for the Veteran. The Veteran must be informed that he must file a timely and adequate substantive appeal in order to perfect an appeal of the issue to the Board. See 38 C.F.R. §§ 20.200, 20.202, and 20.302(b) (2013).
The appellant has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2013).
_________________________________________________
MICHAEL LANE
Veterans Law Judge, Board of Veterans' Appeals
Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2013).
|
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472 F.2d 207
The UNITED STATES, Appellee,v.Harry C. BASS, Jr., Appellant.The UNITED STATES, Appellee,v.SELB MANUFACTURING CO., Appellant.
Nos. 71-1733, 71-1734.
United States Court of Appeals,Eighth Circuit.
Submitted Sept. 11, 1972.Decided Jan. 11, 1973.Rehearing and Rehearing En Banc Denied Feb. 21, 1973.
Robert V. Light, Little Rock, Ark., for appellants.
Sidney H. McCollum, Asst. U. S. Atty., Little Rock, Ark., for appellee.
Before BRIGHT and STEPHENSON, Circuit Judges, and TALBOT SMITH, District Judge.*
STEPHENSON, Circuit Judge.
1
This appeal from a jury conviction charges trial court error in (1) denying discovery of documents and other evidence; (2) overruling a motion to dismiss the substantive charge because of failure to state a violation of Title 18 U.S.C. Sec. 1001; (3) overruling the motion for judgment of acquittal on the same Count because of insufficiency of the evidence; (4) admitting certain evidence; (5) denying a motion for mistrial based on the alleged misconduct of the prosecuting attorney during closing arguments; and (6) assuming advocacy in the charge to the jury. We discuss the alleged errors seriatum. We affirm the conviction of both defendants.
2
Count I charged the defendant Harry C. Bass, Jr., and his solely owned corporation, defendant Selb Manufacturing Company (sub-contractor) and six other individual defendants,1 with conspiring to defraud the United States by fraudulent statements and representations for the purpose of passing off on General Dynamics (general contractor), and ultimately the Air Force, unacceptable component parts for the F-111 aircraft as acceptable parts in violation of Title 18 U.S.C. Sec. 371. Selb held a sub-contract with General Dynamics to manufacture pursuant to purchase orders certain component parts. Count XVI charged Bass and three other individual defendants with making false and fraudulent representations to the Air Force by fraudulent misapplication of serial numbers on aircraft parts and falsely representing that the aircraft parts met required specifications when they knew the parts were unacceptable.
3
In the fall of 1966, Selb and its affiliates, all owned by Bass, obtained a subcontract with General Dynamics to manufacture pursuant to purchase orders certain airplane parts to be included in the F-111 aircraft which General Dynamics was to build for the United States Air Force. Several purchase orders bearing dates between October 1966 and March 1967, and amendments thereto, were issued and executed. By the fall of 1967 Selb was behind in its delivery of parts and was experiencing difficulty in machining parts to blue print tolerances. The Government contends that it was at this time that there began a scheme and plan to defraud General Dynamics and ultimately the Air Force by sending them parts which were deficient and did not meet specifications without informing them of such deficiencies and in fact falsely representing that the parts were good and acceptable. The indictment in substance charged that the named defendants and other co-conspirators conspired to defraud the Government (1) by sending in deficient parts without indicating the parts were defective on Suppliers Inspection Rejection Reports (SIRs) as required by the contract; (2) by removing serial numbers from defective parts and replacing them with serial numbers of good or acceptable parts; and (3) that in furtherance of the scheme officers and employees of Selb gave to employees of General Dynamics certain gratuities for the purpose of influencing and inducing favorable action as to the acceptance or rejection of parts. The trial extended over a two-week period. Some 28 witnesses testified and over 100 exhibits were received in evidence.
Discovery
4
Grand Jury Testimony. Timely motions were filed in behalf of both defendants pursuant to Rules 6(e) and 16, Fed.R.Crim.Proc. for permission to inspect and copy the testimony of all witnesses who appeared before the grand jury, and, in the alternative, such permission with respect to the testimony of the officials and employees of General Dynamics, such testimony of Selb's officers and employees and such testimony of the witnesses the Government intended to call at trial. The Government resisted upon the grounds that no particularized need was shown, and further indicated it would (and it did) furnish copies of transcripts of the testimony of each witness it called to testify at the trial. The trial court denied defendants' motions upon the ground there was no showing of a substantial or particularized need for the testimony requested, with the reservation that if during the course of the trial a particularized need developed, upon renewed motion, the court would in all probability grant the motion.2
5
We are satisfied that the trial court's ruling was correct. Dennis v. United States, 384 U.S. 855, 868-875, 86 S.Ct. 1840, 16 L.Ed.2d 973 (1966). It was in accord with the rule well established in this Circuit. National Dairy Products Corp. v. United States, 384 F.2d 457 (CA8 1967); United States v. Cole, 449 F.2d 194, 198 (CA8 1971); United States v. Harflinger, 436 F.2d 928, 935 (CA8 1970).
6
Pretrial Conferences. Defendants complain because they were excluded from pretrial conferences conducted by the Court in connection with the separate trials of other defendants. This complaint is so devoid of merit that it requires little comment. Initially a pretrial conference was held by the trial judge on the numerous motions filed by all the separate defendants, i. e., to dismiss, for severance, and general discovery. The trial judge then indicated that motions for separate trial would be granted and that additional pretrial conferences would be held with the individual defendants shortly before their respective trials. Conference was being conducted for the purpose of arranging the mechanics of the separate trials of those concerned. There was no need for including representatives of defendants whose trials were not affected. The instant defendants and their counsel were not excluded from any pretrial conference concerning their trial. No agreements or stipulations were entered into in their absence. See Rule 17.1 Fed.R.Crim.Proc. No prejudice has been shown. The pretrial conferences were conducted in conformance with the principles of sound judicial administration. Defendants complaints are completely devoid of merit.3
7
Prime contract. Defendants caused a subpoena duces tecum to be served on a representative of General Dynamics to produce the prime contract between the Air Force and General Dynamics. The Government moved to quash upon the grounds that classified portions of the prime contract were irrelevant to any issue in the case. The Government agreed to make available and did make available all portions of the prime contract regardless of relevancy, except for certain specifications for the manufacture and performance of component parts of the aircraft which were classified as "secret" or "confidential" because they involved military secrets, and which, the Government also claimed, were in no way connected to the parts involved in the case on trial. The Government offered the testimony of the senior engineer for the Air Force at General Dynamics to establish that the documents in question were not relevant to any issues involved in the trial. The Government also offered evidence that Selb and its affiliates did not have security clearances and therefore could not have worked on classified portions of the contract.
8
The trial judge in granting the Government's motion to quash noted that the same issue had been raised in a pre-trial proceeding in connection with the trial of two other defendants named in the same indictment and that the judge had examined the classified portions of the contract in camera and did not find anything exculpatory or otherwise connected with the Selb work or relevant to the issues on trial. Defendants contend the information in question should have been disclosed, United States v. Andolscheck, 142 F.2d 503 (CA2 1944), and that the in camera inspection by the Court was inadequate to protect their right to determine if the evidence was relevant and material to the issues in dispute.4 Jencks v. United States, 353 U.S. 657, 668-672, 77 S.Ct. 1007, 1 L.Ed.2d 1103 (1957); Alderman v. United States, 394 U.S. 165, 181-182, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969). However, we are satisfied from a review of the evidence that the possible evidentiary value of these documents was clearly negligible and the trial court did not abuse its discretion in quashing the subpoena. See United States v. Schneiderman, 106 F.Supp. 731, 735-739 (S.D.Cal.1952). The added precaution taken by the trial court in making an in camera inspection of the documents lends added assurance that the motion to quash was proper. Taglianetti v. United States, 394 U.S. 316, 89 S.Ct. 1099, 22 L.Ed.2d 302 (1969); see also, Palermo v. United States, 360 U.S. 343, 354, 79 S.Ct. 1217, 3 L.Ed.2d 1287 (1959); Boeing Airplane Co. v. Coggeshall, 108 U.S.App.D.C. 106, 280 F.2d 654, 662 (1960).
9
Kersey Report. Defendants complain that the trial court erred in refusing to require the Government to produce an Air Force investigation report concerning quality control at General Dynamics Ft. Worth plant. It came to be called the Kersey Report. The Government objected upon the grounds that the material contained therein was immaterial to any issue in the case; that it was a separate investigation of other matters; that there was no mention in the report of Selb nor any mention of unauthorized welding or false documents; that it did contain statements important only to inner Air Force Planning and actions. The report was submitted to the Court for an in camera inspection with the request by the Government that if the Court determined that the report should be made available, certain matter be deleted. The trial court examined the report and determined that it need not be produced. We have examined the report and are satisfied the Court properly ruled it need not be turned over to the defendants.
10
General Dynamics Investigation Report. Prior to trial defendants also caused a subpoena to be issued requiring General Dynamics to produce its industrial security department's investigation report. The trial court granted General Dynamics' motion to quash upon the grounds that it was the work product of General Dynamics prepared for other purposes; that it contained opinions of the investigator; that it was privileged and should not be produced unless clearly shown to be relevant to issues before the Court; that no good cause was shown for production of the document. This document was likewise sealed and preserved for our examination. We have examined the three volume report and are satisfied the trial court's ruling was correct.
11
In summarizing our rejection of defendants' complaints that their efforts to obtain production of documents and discovery of other evidence was unduly restricted, we observe that a vast amount of information was furnished to them. This includes (1) all records of Selb supplied to the grand jury; (2) a flow sheet showing a history of each part manufactured by Selb; (3) a report prepared by General Dynamics entitled "Chronology of Management Decisions, Re: Selb Matter"; (4) a list of the serial numbers of the parts about which the Government planned to present evidence; (5) a list of serial numbers that were changed; (6) a copy of an Air Force report which was the primary and official investigation by the Air Force into the fraud involving Selb; (7) at pretrial defendants' attorney was shown every exhibit which the Government intended to introduce at trial; (8) pretrial disclosure made of all witnesses to be called by the Government in their case in chief; (9) names of all witnesses appearing before the grand jury; and (10) all statements of each witness called by the Government whether given to the FBI, General Dynamics, or before the grand jury. We are abundantly satisfied that the experienced and able trial judge exercised due care to insure that the defendants were afforded maximum but reasonable discovery. Defendants' complaints to the contrary are devoid of merit.
The substantive charge
12
Defendant Bass made a timely motion to dismiss Count XVI upon the grounds that the facts alleged therein failed to constitute a violation of Title 18 U.S.C. Sec. 1001. He claims that the disputed Count charges fraudulent misapplication of serial numbers on parts manufactured by Selb for General Dynamics; and it may fairly be inferred from the indictment that there was no direct relationship between the agency of the United States involved (the Air Force) and the defendants; that the indictment does not charge that the defendants tendered any parts with altered serial numbers to the Air Force. Defendants cite, Lowe v. United States, 141 F.2d 1005 (CA5 1944); Terry v. United States, 131 F.2d 40 (CA8 1942).
13
The indictment specifically charges "in a matter within the jurisdiction of the United States Air Force" the defendants did make false and fraudulent statements and did alter and change serial numbers of various parts manufactured by Selb. It is not essential that it be charged or shown that the fraudulent representations were directly presented to an agency of the United States. Ebeling v. United States, 248 F.2d 429 (CA8 1957), cert. denied sub nom., Emerling v. United States, 355 U.S. 907, 78 S.Ct. 334, 2 L.Ed.2d 261 (1957); United States v. Waters, 457 F.2d 805 (CA3 1972). It is essential that the matter be within the jurisdiction of an agency or department of the United States. Friedman v. United States, 374 F.2d 363 (CA8 1967). See also, Bryson v. United States, 396 U.S. 64, 70-71, 90 S.Ct. 355, 24 L.Ed.2d 264 (1969). We are satisfied Count XVI clearly states a violation of Title 18 U.S.C. Sec. 1001.
14
Bass claims that the trial court erred in denying his motions for judgment of acquittal on Count XVI made at the close of the Government's case, and again at the conclusion of all the evidence grounded upon insufficiency of the evidence. His chief complaint is that the sole testimony suggesting Bass' knowledge and participation in the changing and misapplication of serial numbers on parts was vague and confusing testimony by co-conspirators and co-defendant Kenneth Hunn,5 then vicepresident of Selb. We fail to find Hunn's testimony vague and confusing. For instance, the record of Hunn's testimony discloses that in April 1969 on one occasion Hunn told Bass "* * * that we were all out of good parts that we could send to General Dynamics, and we had quite a few parts in the plant that were undercut * * *. And then Bass told me to weld the parts up and don't get caught." The weight and credibility of the testimony was for the jury. There was ample evidence indicating Bass took an active part in operating the business and knew about and participated in the fraud on the Government. We, of course, in determining the sufficiency of the evidence take that view of the evidence which is most favorable to the prevailing party and accord the Government in this case the inferences reasonably to be drawn from the facts shown. United States v. Liggins, 451 F.2d 577 (CA8 1971). The record adequately supports the conviction on Count XVI.
Evidentiary Rulings
15
We find no error in the trial court's admission of business records of Selb and General Dynamics. They were properly admissible under the Business Records Act, 28 U.S.C. Sec. 1732. In some instances the foundation for the admission of records came through the testimony of several witnesses. Lack of personal knowledge concerning certain entries shown in some instances goes to their weight and not their admissibility.
16
Defendants contend that the Court erred in permitting the Government to offer evidence to establish the commission of overt act No. 12 which charged: "12) On or about July 24, 1968, defendant Harry C. Bass, Jr., paid a note on a 1968 Ford automobile for James L. Townley, in the amount of $2,150.00." Defendants urge that since co-defendant Townley was acquitted on the conspiracy charge in an earlier trial, evidence of that overt act should not have been admitted or the overt act submitted to the jury in their trial. They cite Herman v. United States, 289 F.2d 362 (CA5 1961), cert. den. 368 U.S. 897, 82 S.Ct. 174, 7 L.Ed.2d 93; Yawn v. United States, 244 F.2d 235 (CA5 1957). Alternatively, defendants argue that the jury should have been cautioned that the evidence was admissible only on the question of the existence of the conspiracy, but that the act itself could not satisfy the requirements to complete the crime of conspiracy.
17
The difficulty with defendants' contention is that Bass, not Townley, is charged with committing the overt act. Townley's acquittal on the conspiracy count, which includes besides Bass and Selb six additional co-defendant conspirators, does not absolve Bass, i. e., the discussion supra, regarding Count XVI illustrates there is strong evidence that Bass conspired with defendant Hunn. See Cross v. United States, 392 F.2d 360, 362 (CA8 1968); United States v. Fabric Garment Co., 262 F.2d 631 (CA2 1958); United States v. Pugliese, 153 F.2d 497 (CA2 1945). Neither does it prevent the Government from showing Bass committed the overt act in question. The overt act need not be criminal in nature. It need not involve more than one of the conspirators. Bergen v. United States, 145 F.2d 181, 187-188 (CA8 1944).
18
Defendants contend the Court erred in admitting testimony regarding a telephone conversation between co-defendants Townley and Davis about the automobile transaction just referred to. They urge that Townley's prior acquittal prevents his statements from being received, since they were not the statements of a co-conspirator, and they were not made in furtherance of the conspiracy. Townley's acquittal in a prior trial does not prevent the jury from considering testimony regarding his relationship with other defendants and co-conspirators. Burt v. United States, 139 F.2d 73, 76 (CA5 1944); Kamanosuke Yuge v. United States, 127 F.2d 683, 689 (CA9 1942).
19
At the time this testimony was received, the trial court properly admonished the jury that it could not consider the statements offered unless it was convinced from independent evidence beyond a reasonable doubt that a conspiracy, in fact, existed and that the defendants on trial were a part of the conspiracy, and that the statements made were in furtherance of the conspiracy. United States v. Reed, 446 F.2d 1226, 1231 (CA8 1971). There was evidence from which the jury could so find.
20
We find no merit in defendants' contention that a mistrial should have been granted because of prejudicial argument on the part of the United States Attorney. Neither do we find any merit whatsoever in the allegation that the trial court unfairly commented on the evidence in its instructions to the jury.
21
We are satisfied that defendants have received a fair trial free of prejudicial error.
22
Affirmed.
*
Eastern district of Michigan, sitting by designation
1
Prior to the instant trial, defendant Townley, a former employee of General Dynamics, was tried and acquitted on similar counts. Defendants Hunn and Davis, former employees of Selb, plead nolo contendere to certain counts of the same indictment. At the commencement of the instant case the Government dismissed Counts II through XV as to Bass. Bass was tried and convicted on Counts I and XVI, Selb on Count I. Bass was sentenced to 4 years imprisonment on each Count (to run concurrently) and fined $20,000; Selb was fined $5,000. In addition to the 7 named defendant-conspirators, there were 4 non-defendant conspirators listed in the indictment
2
The trial court also noted that much of the testimony had become public at the previous Townley trial (n. 1)
3
The trial court did indicate that transcripts of those conferences held in connection with the trial of other defendants if reported could be examined upon request
4
The prime contract consisted of numerous documents which filled several file cases
5
At the time of this trial Hunn had plead nolo contendere to certain counts of the indictment but had not yet been sentenced
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT June 29, 2005
Charles R. Fulbruge III
Clerk
No. 04-41590
Summary Calendar
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
DIANA PATRICIA GAMBOA
Defendant - Appellant
--------------------
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 1:04-CR-442-ALL
--------------------
Before KING, Chief Judge, and HIGGINBOTHAM and PRADO, Circuit
Judges.
PER CURIAM:*
Diana Patricia Gamboa appeals the sentence imposed following
her guilty-plea conviction for possession with intent to
distribute more than file kilograms (5.45 kilograms) of cocaine.
She argues that the district court committed reversible plain
error in sentencing her pursuant to the mandatory United States
Sentencing Guidelines held unconstitutional in United States v.
Booker, 125 S. Ct. 738 (2005). Gamboa argues that the error is
structural, presumptively prejudicial, and, therefore, she need
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
No. 04-41590
-2-
not show plain error. This court has rejected this argument and
applied the plain error standard of review to such unpreserved
claims. See United States v. Malveaux, ___ F.3d ___, No. 03-
41618, 2005 WL 1320362, *1 n.9 (5th Cir. Apr. 11, 2005); see also
United States v. Mares, 402 F.3d 511, 520 (5th Cir. 2005)
(applying plain error standard of review), petition for cert.
filed, No. 04-9517 (U.S. Mar. 31, 2005). The district court’s
application of the Guidelines in their mandatory form constituted
error that is plain. See United States v. Valenzuela-Quevedo,
407 F.3d 728, 733 (5th Cir. 2005). However, Gamboa has not shown
that the error affected her substantial rights as the record
gives no indication that the district court judge would have
sentenced her any differently had he known that the Guidelines
were only advisory. See Mares, 402 F.3d at 522. Therefore,
Gamboa has not shown that the district court’s imposition of her
sentence under the mandatory Guidelines constituted reversible
plain error. See id.
For the first time on appeal, Gamboa argues that 21 U.S.C.
§ 841, the statute under which she was convicted, is
unconstitutional in view of Apprendi v. New Jersey, 530 U.S. 466
(2000). Gamboa acknowledges that her argument is foreclosed by
United States v. Slaughter, 238 F.3d 580, 582 (5th Cir. 2000),
but states that she is raising it to preserve it for possible
Supreme Court review. The issue is indeed foreclosed. See
No. 04-41590
-3-
Slaughter, 238 F.3d at 582; Valenzuela-Quevedo, 407 F.3d at 731
(same).
Gamboa argues, and the Government concedes, that the case
should be remanded to allow the district court to correct a
clerical error in the judgment to reflect the district court’s
recommendation that Gamboa be placed in a federal correctional
institution in or near California. “After giving any notice it
considers appropriate, the court may at any time correct a
clerical error in a judgment, order, or other part of the record,
or correct an error in the record arising from oversight or
omission.” FED. R. CRIM. P. 36. The error is obvious, and the
district court may correct such an error at any time under FED.
R. CRIM. P. 36. Accordingly, the case is REMANDED for the limited
purpose of conforming the judgment to the oral recommendation
that Gamboa be placed in a federal correctional institution in or
near California. Id.
AFFIRMED; LIMITED REMAND TO CORRECT JUDGMENT.
|
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19 F.Supp.2d 925 (1998)
Linda GREGSON and Tom McKinney, Plaintiffs,
v.
U.S. FORESTRY SERVICE, Lynn Neff, Forest Supervisor, Ozark-St. Francis National Forest, Robert Joslin, Regional Forester, U.S. Forestry Service, and George Rogers, District Ranger, Defendants,
v.
ARKANSAS FORESTRY ASSOCIATION, Ozark-St. Francis National Forest Renewable Resources Council, and Bibler Brothers, Inc., Intervenors.
No. LR-C-97-1004.
United States District Court, E.D. Arkansas, Western Division.
August 21, 1998.
*926 Dale W. Finley, Richard H. Young, Young & Finley, Russellville, AR, for Plaintiffs.
Searcy W. Harrell, Jr., Harrell & Lindsey, P.A., Camden, AR, for intervenors.
Kenneth F. Stoll, U.S. Attorney's Office, Eastern District of Arkansas, Little Rock, AR, for Defendants.
*927 MEMORANDUM OPINION AND ORDER GRANTING SUMMARY JUDGMENT
EISELE, District Judge.
Before the Court are defendants' and intervenors' separate Motions for Summary Judgment. The movants contend that, based upon the Administrative Record below, they are entitled to judgment as a matter of law in this action arising under the Administrative Procedure Act, 5 U.S.C. §§ 701-06 ("APA"); the National Forest Management Act, 42 U.S.C. § 4321, et seq. ("NFMA"); National Environmental Policy Act, 16 U.S.C. § 1600, et seq. ("NEPA"); and the Land Resource Management Plan for the Ozark-St. Francis National Forests. The Court has reviewed the parties' submissions, and for the reasons set forth below will grant defendants' motion for summary judgment and will dismiss as moot intervenors' motion for summary judgment. Thus, the administrative decision below will be affirmed.
I. BACKGROUND
Situated in Northwest Arkansas, the Ozark National Forest contains over 1.1 million acres of National Forest System land. In 1986, the United States Forest Service ("the Forest Service") produced a Land Resource Management Plan ("LRMP") for the Ozark-S. Francis National Forests. An Environmental Impact Statement ("EIS") was prepared, and a Record of Decision ("RD") was issued on July 29, 1986. Administrative Record ("AR"), Part B., Vol. 1, Tabs 1 & 3. Waldo Mountain is located within the Ozark National Forest. On January 17, 1997, the District Ranger for the Bayou Ranger District of the Ozark-St. Francis issued a notice of a proposed project called the Waldo Mountain Timber Sale and Wildlife Habitat Improvement Project (the "Waldo Project"). AR, Part A, Tab 1. The Forest Service proposed the harvesting and sale of timber, the commercial thinning of pine areas, as well as other activities within a 26,680 acre area known as the Waldo Mountain Landscape. Plaintiff Tom McKinney was mailed a copy of the Waldo Mountain Landscape Analysis Report and related scoping materials. AR, Part A, Tabs 3 & 7. Plaintiff Linda Gregson was not mailed these materials.
A comment period followed, after which the Forest Service prepared an Environmental Assessment ("EA") containing its proposed action and four alternative courses of action (which included a "no action" alternative). AR, Part A, Tab 13. The Waldo Project EA is 118 pages, and it contains over 80 pages of appendices. On May 9, 1997, a copy of the EA was sent to interested individuals, including Mr. McKinney, and a legal notice was published in the Russellville Courier Democrat on May 11, 1997. AR, Part A, Tab 16.
On June 19, 1997, after a 30 day comment period, the District Ranger entered a Notice of Decision ("DN") and a Finding of No Significant Impact ("FONSI"), which means that an EIS was not prepared for the Waldo Project. In the end, the District Ranger opted to implement Alternative IV from the EA, which was not its preferred alternative.
On August 7, 1997, plaintiff McKinney filed a Notice of Appeal pursuant to 36 C.F.R. § 215, et seq. AR, Part A, Tab 30. Plaintiff Gregson did not file an administrative appeal. The Appeal Deciding Officer for the Department of Agriculture for the most part rejected Mr. McKinney's Appeal and issued an eleven page decision. AR, Part A, Tab 39. The Deciding Officer concluded "that the District Ranger has adequately addressed the issue you raised in your [notice of appeal] in the EA and DN/FONSI on the Waldo Mountain timber sale project except for the issue (Issue 7) of consultation with the [United States Fish and Wildlife Service].... I find that the environmental effects disclosure in the EA is appropriate and adequate for this project and supports the District Ranger's conclusion that the selected actions will not have a significant impact on the quality of the human environment." Id. at 39-11.
Plaintiffs challenge the Forest Service's implementation of the Waldo Project on the Bayou Ranger District of the Ozark National Forest, seeking judicial review of the Forest Service's decision to implement the Project. First Am. Pet. for Inj. Relief ¶¶ 5 13. They contend that the Project violates the NEPA and the NFMA. Id. ¶ 2. And they seek "to enjoin the Forest Service from timber sales *928 and logging until it remedies the violations of law and inadequacies [set forth in the Complaint.]" Id. ¶ 1.
Plaintiffs seek a declaratory judgment establishing that defendants' approval of the Project is unlawful under the NFMA, the NEPA, and relevant regulations. Plaintiffs further seek an Order "enjoining all further activity pursuant to Defendants' approval of [the Project] including the awarding of any timber sale contracts, the felling, yarding and removal of trees, the construction or closing of any roads, and other activities." Id., page 25. On May 4, 1998, the Court granted the intervenors' petition to intervene in this action as party defendants.
Defendants contend they are entitled to summary judgment for several reasons. First, they contend that plaintiff Gregson entirely failed to exhaust her administrative remedies prior to bringing this action. Defendants further assert that Mr. McKinney impermissibly seeks to raise issues not raised during his administrative appeal. Finally, based upon the Administrative Record ("AR") below, defendants claim that the Deciding Officer's decision should be upheld as a matter of law on the remaining NFMA and NEPA claims. Intervenors have also filed motions for summary judgment, focusing primarily on the merits of plaintiffs' case. Because the Court is granting summary judgment based upon the arguments advanced by the defendants, the Court need not formally rule on the intervenors' motion for summary judgment.
II. ANALYSIS
A. Standard of Review and Record on Review
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment may be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Summary judgment should be granted so long as whatever is before the Court demonstrates that the standard for the entry of summary judgment, as set forth in Rule 56(c), is satisfied. Celotex v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Review of final agency action under the NEPA and NFMA is governed by the APA, which directs a reviewing court to affirm final agency action unless that action is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). The ultimate standard of review is a narrow one, and the Court is not empowered to substitute its judgment for that of the agency. Instead, it is to determine whether "the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Id. at 416, 91 S.Ct. 814; Newton County Wildlife Ass'n. v. Rogers, 948 F.Supp. 50, 51 (E.D.Ark.1996), aff'd 141 F.3d 803 (8th Cir.1998)(citing Collins Securities Corp. v. FDIC, 145 B.R. 277, 283 (E.D.Ark.1992)). Furthermore, the Court generally must confine its review to the administrative record and issues presented to, and considered by, the agency. Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973).
The Court has reviewed the three volume Administrative Record in light of the Deciding Officer's decision and plaintiffs' petition for injunctive relief. It is clear that the Administrative Record in this case is more than sufficient to permit the Court to resolve the legal issues raised in defendants' motion for summary judgment. Thus, the Court rejects plaintiffs' argument that "[d]iscovery is not complete and no depositions have been scheduled" and that "there is no way for either party to make a complete argument to the court to allow the court to make an informed decision." If the agency record is not adequate, the proper procedure is to remand the case for additional investigation. Newton County Wildlife, 141 F.3d at 807. Because the record is ample, remand for further proceedings is not necessary. The Court further concludes that there has been no showing of bad faith or improper behavior which would justify discovery or *929 evidentiary supplementation of the Administrative Record. See id.
B. Linda Gregson Has Failed to Exhaust Administrative Remedies
A reviewing court must refuse to conduct an APA review when a plaintiff has failed to exhaust her administrative remedies. Darby v. Cisneros, 509 U.S. 137, 113 S.Ct. 2539, 125 L.Ed.2d 113 (1993); Sharps v. United States Forest Service, 28 F.3d 851 (8th Cir.1994). And the Forest Service has established mandatory appeal procedures. See 36 C.F.R. § 215, et seq. Before implementation, proposed national forest land and resource management plans, as well as proposed timber harvests, require a "notice and comment" procedure. Id. § 215.3(a) & (b). Section 215.5(b)(1) requires publication in a newspaper of general circulation. Section 215(b)(2)(i) & (ii) require that notice be sent to persons who have requested it or who are known to have "participated in the environmental analysis process" or "in the decision-making process."
Before enacting a project, the Forest Service must address comments made during a 30 day comment period. Id. § 215.6(d). After a project is decided upon, only individuals who have "provided comment or otherwise expressed an interest in particular proposed action by the close of the comment period" may participate in the administrative appellate procedure. Id. § 215.11(a). Resort to federal court for judicial review is premature absent exhaustion of an individual's administrative remedies. Id. § 215.20.
Defendants contend that Linda Gregson did not file comments on the proposed Waldo Project. Furthermore, she did not administratively appeal the project decision. Defendants assert, therefore, that she is not entitled to obtain judicial review in the instant action. Linda Gregson does not dispute that she did not participate in the administrative process. However, without citation to supporting authority, she contends that she was not provided adequate notice so that she could have so participated. "Adequate notice must be given in order to participate in the administrative review process," Gregson asserts. She goes on, "[o]ne legal notice in the local newspaper is not sufficient and that was all there was."
The Court concludes that the Forest Service complied with the notice and comment requirements of 36 C.F.R. § 215.3-.6. Notice was sent to those who had requested notice, and notice was published in the Russellville Courier Democrat. Although publication for one day may not constitute broad notice, the law does not require more. If Ms. Gregson had wanted to assure herself of notice of proposed forest projects, she could have requested that the Forest Service provide her notice, but she did not. Had she requested notice and not received it, perhaps her position would have merit.
Ms. Gregson does not dispute that she in fact did not participate in the administrative appeal process. Defendants have cited the unpublished Memorandum Opinion of United States District Judge William L. Standish from the Western District of Pennsylvania. Kleissler v. United States Forest Service, No. 97-2187 (W.D.Penn. May 27, 1998). Therein, Judge Standish concludes that 7 U.S.C. § 6912(e) and 36 C.F.R. § 215.20 clearly mandate exhaustion of administrative remedies prior to seeking judicial review in federal court. Id. at 14. Eighth Circuit cases have similarly required exhaustion before proceeding in Federal Court. See discussion, infra. Therefore, Ms. Gregson is barred from maintaining this action, and summary judgment is proper as to her participation in this action.
C. Tom McKinney Failed to Exhaust Administrative Remedies on Certain NFMA Issues
Defendants concede that Tom McKinney participated to some extent in the administrative appeal process. However, defendants argue that Mr. McKinney seeks judicial review of legal issues not raised below. Thus, they contend they are entitled to summary judgment on the issues not pursued during the administrative appeal process.
In his administrative appeal below, McKinney asserted that the Waldo Project violated the NFMA, the NEPA, the Wild & Scenic Rivers Act, the Clean Water Act, the Endangered *930 Species Act, and the Migratory Bird Act. In this action, McKinney raises only claims related to the NEPA and NFMA.
Below, McKinney alleged three violations of the NFMA. First, he claimed that the Waldo Project violated 16 U.S.C. § 1604(g)(3)(E), by not "ensur[ing] that timber will be harvested only from lands where `soil, slope or other watershed conditions will not be irreversibly damaged,' and where streams are protected from `detrimental changes in water temperatures, blockages of water courses, and deposits of sediment.'" AR, Part A, Tab 30 at 10. Citing pages 49 through 59 of the EA, the Appeal Deciding Officer rejected this argument. AR, Part A, Tab 39 at 5.
Second, McKinney alleged violations of 16 U.S.C. § 1604(g)(3)(b) and 36 C.F.R. § 219.19, which involve the diversity of plant and animal communities in the affected area. The Appeal Deciding Officer rejected this challenge at pages 5 and 6 of her decision, concluding that the District Ranger had provided a detailed ecosystem analysis. The Officer further noted that the EA and Biological Evaluation had adequately considered the Project's effects on "rare elements." Id. at 6.
Finally, McKinney lodged a challenge to the Waldo Project based upon its impact on the visual quality of the area. The Officer concluded that the EA did not violate the NFMA regarding visual quality. Id. at 6-7. In arriving at this conclusion the Officer considered several sections of the Waldo Mountain Landscape Analysis which focused on visual quality within the Project.
Now, in his First Amended Petition for Injunctive Relief, plaintiff raises additional violations of the NFMA. See Am. Pet. for Inj. Relief ¶¶ 67(c) (h). In these paragraphs, plaintiff raises claims regarding the implications of clearcutting (¶ 67(c)); multiple-use issues (¶ 67(d)); the economic and environmental aspects of various systems of renewable resource management (¶ 67(e)); the growth of tree stands (¶ 67(f)); public participation in the implementation of land management plans (¶ 67(g)); and the restocking of lands after harvest (¶ 67(h)). Failure to raise these issues at the administrative level has deprived the proper agency the opportunity to make an appropriate factual record. Sierra Club v. Robertson, 784 F.Supp. 593, 598 (W.D.Ark.1991); aff'd 28 F.3d 753 (8th Cir.1994). To the extent any of these six claims seek to raise issues not raised before the Appeal Deciding Officer, the Court concludes that they must be dismissed due to plaintiff's failure to exhaust his administrative remedies. To the extent that they raise issues arguably coextensive with the points addressed by the Deciding Officer, the Court will address those points below.
D. The Merits of Tom McKinney's Remaining Claims
1. NFMA claims
The Court will now consider the three NFMA claims which were raised at the administrative level. As enumerated above, these issues were raised and briefed before the proper administrative authority. The Appeal Deciding Officer took up and rejected each argument. Essentially, the Officer concluded that the Project's EA adequately addressed plaintiff's concerns and that there had been no violations of the NFMA. The Court has reviewed the Deciding Officer's decision, and the relevant portions of the record cited therein.
The Forest Service's decisions are presumptively correct on areas in which the Service has expertise. Volpe, 401 U.S. at 415, 91 S.Ct. 814. In light of the cases addressing NFMA challenges,[1] the Administrative Record clearly indicates that the Ranger District adequately contemplated the Project's impact on soil erosion, water quality, plant and animal diversity, and visual quality. The Court cannot conclude that the Hearing Officer's decision was "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law." In fact, the Officer's decision appears quite sound. Thus, the Court must affirm the Deciding *931 Officer's decision and grant summary judgment in defendants' behalf on the three remaining NFMA claims.
2. NEPA claims
First, plaintiff contends that defendants violated the NEPA by failing to prepare an EIS for the Project. Plaintiff contends an EIS was required because the Waldo Project could have a significant effect on the human environment in several ways. Am. Pet. for Inj. Relief ¶ 69(a). Next, plaintiff asserts that the Project fails to explore "numerous serious possibilities of injury to fish and wildlife which might result from logging the timber." Id. ¶ 69(b). Finally, plaintiff asserts that the EA prepared by defendants presents a biased analysis of, and otherwise fails to consider, certain environmental costs, such as recreation and reforestation. Id. ¶ 69(c).
The scope of review of an agency decision under the NEPA is a narrow one, with the Court simply determining whether the Forest Service took a "hard look" at the relevant factors and reached a decision that was neither arbitrary nor capricious. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 377, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989). Administrative appeal challenges brought pursuant to the NEPA are limited to addressing whether the agency complied with the NEPA's procedural mandates. Robertson, 784 F.Supp. at 604.
a. The Necessity of Preparing an EIS for the Waldo Project
The NEPA requires all federal agencies to prepare an EIS for "all major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C). If the agency decides based upon its preparation of an EA not to prepare an EIS, it makes and publishes a finding of no significant impact ("FONSI"). 40 C.F.R. § 1501.4. Where an agency issues a FONSI and thus relies on an EA for a specific project (and does not prepare an EIS), a reviewing court reviews such a determination under an arbitrary and capricious standard. Marsh, 490 U.S. at 377, 109 S.Ct. 1851. In some cases the preparation of an EIS for a broad forest plan may alleviate the necessity for a full-blown EIS for a particular harvest plan, or the like, within the broader forest plan. See Newton County Wildlife, 141 F.3d at 809 (noting that the Regulations encourage an agency to incorporate an EIS for a large action into a subsequent, smaller action within the large action).
Newton County Wildlife involved four timber sales within the Ozark National Forest. Id. at 806. The Eighth Circuit affirmed Judge William R. Wilson, Jr.'s granting summary judgment on behalf of the Forest Service. Newton County Wildlife, 948 F.Supp. 50. In particular, the Court concluded that it was not an abuse of discretion for the Forest Service to not prepare an EIS, but rather to utilize an EA for the proposed timber sales that was tiered to the overall Forest plan EIS. Newton County Wildlife, 141 F.3d at 809.
The Court has reviewed the Waldo Project's EA, the DN and FONSI (AR, Part A, Tab 20), plaintiff's Notice of Appeal, and the Appeal Deciding Officer's decision. The Court finds the issue involving the decision not to prepare an EIS analogous to the NEPA issue addressed in Newton County Wildlife. Like the case before Judge Wilson, this case involves a timber harvesting plan within the Ozark National Forest Plan, for which the Forest Service prepared a 1986 EIS describing the cumulative impacts of timber harvesting to be experienced over the ten to fifteen year life of the plan. The EA for the Waldo Mountain Project (almost 200 pages including appendices) considered numerous environmental consequences (pages 49 through 114), and eventually the Forest Service concluded that an EIS for this Project was not required. The Appeal Deciding Officer rejected McKinney's contentions that an EIS was required. See pages 8 and 9 of her decision. The Court concludes that the decision to not prepare another EIS for the Waldo Project (which was within the scope of the 1986 EIS for the Ozark-St. Francis National Forest) was neither arbitrary nor capricious. See Sierra Club v. United States Forest Service, 46 F.3d 835, 840 (8th Cir. *932 1995).[2] Accordingly, neither was the Deciding Officer's upholding of that decision. Therefore, the Court will grant summary judgment on behalf of defendants on the issue of whether an EIS was required for the Waldo Mountain Project.
b. Other NEPA Issues
Finally, the Court will summarily address the claims raised in paragraphs 69(b) and (c) of the First Amended Petition for Injunctive Relief. These paragraphs challenge specific issues which plaintiff contends were not adequately addressed in the EA (potential injury to fish and wildlife, potential disruption to recreation, and reforestation concerns). An EA is a "rough-cut, low-budget environmental impact statement designed to show whether a full-fledged environmental impact statement ... is necessary." Newton County Wildlife, 141 F.3d at 809 (quoting Cronin v. United States Dep't of Agriculture, 919 F.2d 439, 443 (7th Cir.1990)). And "an EA cannot be both concise and brief and provide detailed answers for every question." Sierra Club, 46 F.3d 835, 840 (8th Cir.1995). Giving deference to the Forest Service's expertise, the Court is of the opinion that the Waldo Project EA exceeded the minimal "rough-cut, low-budget" threshold which cases have established.
The Court concludes that the Deciding Officer provided a well-reasoned basis for rejecting these challenges and finding that the EA adequately considered plaintiff's NEPA concerns. Thus, having nothing to add to the Deciding Officer's decision, the Court will succinctly conclude that nothing in the administrative chain appears arbitrary or capricious as to the consideration of the remaining NEPA issues. Thus, summary judgment is proper on all the NEPA issues plaintiff raises.
III. CONCLUSION
The Court therefore grants defendants' motion for summary judgment on all claims raised in this lawsuit. Accordingly, the Court will not grant any of the relief sought in the petition for injunctive relief. Because the Court is granting summary judgment as to all claims against the original party defendants, the Court will dismiss as moot intervenors' motion for summary judgment. The Court has reviewed the intervenors' submissions which primarily address the merits of plaintiffs' NEPA and NFMA challenges. The Court found these submissions instructive. However, because defendants' motion has been granted in whole, the Court need not separately deal with the arguments advanced in the intervenors' briefs.
IT IS THEREFORE ORDERED that defendants' Motion for Summary Judgment[3] be, and it is hereby, GRANTED.
IT IS FURTHER ORDERED that intervenors' Motion for Summary Judgment[4] be, and it is hereby, DISMISSED AS MOOT.
NOTES
[1] See e.g., Newton County Wildlife Ass'n v. Rogers, LR-C-95-673 (E.D.Ark. Feb. 12, 1997)(noting that a plaintiff challenging an agency's decisions must demonstrate that methodologies or choices were irrational); Robertson, 784 F.Supp. 593 (W.D.Ark.1991).
[2] See also, Minnesota Public Research Group v. Butz, 498 F.2d 1314, 1323 n. 29 (8th Cir.1974) (en banc)(noting that if the environmental impacts of timber cutting are considered in an overall EIS that an individual EIS is not required for all subsequent timber sales absent a material change in circumstances).
[3] Doc. # 6.
[4] Doc. # 14.
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Cite as 2017 Ark. 124
SUPREME COURT OF ARKANSAS.
No. CV-16-1015
Opinion Delivered April 13, 2017
MATTHEW W. BARNETT
APPELLANT
PRO SE APPEAL FROM PULASKI
V. COUNTY CIRCUIT COURT
[No. 600T-50-6 ]
DEXTER PAYNE, ASSISTANT
DIRECTOR, ARKANSAS HONORABLE TIMOTHY DAVIS
DEPARTMENT OF CORRECTION; FOX, JUDGE
MS. RAMSEY, GRIMES UNIT
CLASSIFICATION OFFICER; AND MR.
PEARCE, GRIMES UNIT
CLASSIFICATION OFFICER REMANDED.
APPELLEES
PER CURIAM
Appellant Matthew W. Barnett submitted to the Pulaski County Circuit Court a pro
se petition for leave to proceed in forma pauperis so that he might initiate an action seeking
judicial review of an administrative action taken by the named appellees, employees of the
Arkansas Department of Correction, who had denied a grievance filed by Barnett that was
related to his application for a work-release program. Barnett also submitted to the circuit
court an affidavit of indigency in support of his request to proceed in forma pauperis.
The petition to proceed as a pauper and the underlying pleading were file marked
and assigned a miscellaneous case number used to docket documents not associated with a
specific circuit court case number. The circuit court denied the in forma pauperis petition
without stating the factual basis for the denial. Barnett filed a timely appeal from the denial
Cite as 2017 Ark. 124
of his in forma pauperis petition, and the record on appeal was lodged in this court on
November 10, 2016. Barnett filed a timely brief. The State has not filed a responsive brief.
Under Rule 72 of the Arkansas Rules of Civil Procedure (2016), the right to proceed
in forma pauperis is based on, among other things, indigency and the circuit court’s
satisfaction that the alleged facts indicate a colorable cause of action. Dunahue v. Dennis,
2016 Ark. 285, at 2 (per curiam); Boles v. Huckabee, 340 Ark. 410, 12 S.W.3d 201 (2000)
(per curiam). A colorable cause of action is a claim that is legitimate and may reasonably be
asserted given the facts presented and the current law or a reasonable and logical extension
or modification of it. Dunahue, 2016 Ark. 285, at 2
Rule 72 mandates that the circuit court make a specific finding of indigency based
on the petitioner’s affidavit. Here, the circuit court did not address the validity of Barnett’s
affidavit of indigency nor did it address whether Barnett’s underlying pleading stated a
colorable cause of action. Appellate courts do not make findings of fact but rather review
findings of fact of the circuit court to determine whether they are clearly erroneous. Ward
v. Williams, 354 Ark. 168, 177, 118 S.W.3d 513, 518 (2003). Because the circuit court
failed to enter an order setting forth the factual basis for denying Barnett’s in forma pauperis
petition, the matter is remanded for that purpose. The court is directed to file a
supplemental order within thirty days and submit that order to this court in compliance with
Rule 72. When the remand is returned, a new briefing schedule will be set for the appeal.
Remanded.
Matthew W. Barnett, pro se appellant.
One brief only.
2
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|
962 F.Supp. 5 (1997)
Robert E. OLSEN, Plaintiff,
v.
Warren M. CHRISTOPHER, et al., Defendants.
Civil Action No. 96-00570(CRR).
United States District Court, District of Columbia.
April 23, 1997.
Robert E. Olsen, Plaintiff, pro se.
Sherri Evans Harris, Assistant United States Attorney, with whom Eric H. Holder, Jr., United States Attorney, appeared on the briefs, for Defendants.
MEMORANDUM OPINION
SPORKIN, District Judge.
The Plaintiff in this suit, Robert E. Olsen, brings this action against former Secretary of State Warren Christopher, in his official capacity, and certain other employees of the United States Department of State ("State Department"), alleging that he was separated from the Foreign Service in retaliation for opposing a visa adjudication system employed by the United State's Consulate General *6 in São Paulo, Brazil that was "arbitrary, irrational and discriminatory."
Before the Court are the Defendants' Motion to Dismiss, Motion for Summary Affirmance of the Decision of the Foreign Service Grievance Board and oppositions and replies thereto. Also before the Court is the Plaintiff's "Motion for Judicial Abstention," Motion for De Novo Review and the Defendants' oppositions thereto. Upon careful consideration of the parties' pleadings, the entire record herein, and the law applicable thereto, and for the reasons set forth below, the Court shall direct the Secretary of State to investigate the use of codes to classify applicants for nonimmigrant visas based on certain aspects of their physical appearance. The Secretary of State shall submit to the Court a pleading setting forth its findings on or before May 30, 1997. The case shall be held in abeyance until the Secretary of State submits the requested information.
BACKGROUND
I. Statement of Facts.
The Plaintiff is an attorney who entered the Foreign Service after a nearly twenty-year career in business and law. After graduating from Harvard University in 1966, the Plaintiff received an M.A. in American civilization from the University of Pennsylvania, and completed all but the dissertation for a doctorate in that field. He later graduated from the University of Denver College of Law, served as the chief operating officer of an equipment leasing company and industrial bank, and practiced law for fifteen years in Denver, Colorado, specializing in securities law and litigation. Adm.R. 574.
In September 1990, the Plaintiff took and passed the written Foreign Service Officer examination. During 1991, he took and passed the oral Foreign Service Officer examination, and received medical and top secret security clearances. On January 6, 1992, the Plaintiff was appointed a Foreign Service Officer. New Foreign Service Officers receive a five-year limited appointment, during which they are to serve two or more tours of duty, at different posts and under different supervisors, before being reviewed by the Department for tenure and assignment to a functional career specialization. In this case, however, the State Department discharged the Plaintiff from employment for "unsatisfactory performance," on September 21, 1994, following his single abbreviated tour of duty as a consular officer at the U.S. Consulate General in São Paulo, Brazil. The Plaintiff's principal responsibility in that position was to adjudicate nonimmigrant visa applications.
The Plaintiff alleges that Defendant Thomas Lloyd, the head of the São Paulo visa unit and the Plaintiff's immediate supervisor, directed the Plaintiff and the three other consular officers under his supervision to note on nonimmigrant visa applications certain aspects of the applicant's physical appearance through a system of codes, and to base decisions to issue or deny nonimmigrant visas, in part or in whole, on those visual cues. First Amended Cmplt. ¶ 11, 20-25. For example, the visa officers were to place an "LP" on the application of an individual who "looks poor." An "LR" would be placed on the application of an individual who "looks rough." An "RK" would be placed on an application of a person who looks like a "rich kid." The post-specific profiling codes were incorporated into the Visa Officer's Manual.[1] Adm.R. 42.
The Plaintiff alleges that the codes and other written and unwritten criteria adopted by the Consulate's visa unit involved the consideration of an applicant's skin color, race or national origin in evaluating his or her application.[2] First Amended Cmplt. *7 ¶ 21-22. The Plaintiff claims that the use of the codes to adjudicate nonimmigrant visa applications reflected notions held by Mr. Lloyd that: (1) dark-skinned Brazilians were "poorer" than light-skinned Brazilians, and, therefore, less likely to return to Brazil if allowed to enter the United States; and (2) members of certain ethnic groups, such as Chinese and Koreans, were more likely to engage in fraud.[3]Id.; Adm.R. 741.
Mr. Lloyd allegedly emphasized the use of profiles because it quickened the visa adjudication process. Mr. Lloyd and Ms. Lochman allegedly told the Plaintiff that he should spend a maximum of three minutes per interview with the large majority of cases. First Amended Cmplt. ¶ 45. Consul General Taylor, however, purportedly directed Mr. Lloyd and Ms. Lochman to change this standard out of a concern that profiles may be used as the sole basis of adjudication. Id.
The Plaintiff claims that he objected to using the codes, and in November 1992, began expressing his concerns about the policies in private meetings with, and communications to, his direct supervisor, Mr. Lloyd, Defendant Philip Taylor, serving then as the São Paulo Consul General, acting visa unit chief Laura Lochman, and consular section head Patricia Murphy. Adm.R. 47, 66, 449, 454, 505-25, 569, 578, and 853-54. After numerous discussions between the Plaintiff and his supervisors about the Plaintiff's objections to the visa adjudication system as well as his overall performance, Mr. Lloyd rated the Plaintiff's performance as unsatisfactory in a June 23, 1993 draft performance evaluation, stating that the Plaintiff "disagree[d] with our policy and has decided to do things `his way', while paying lip service to authority." Adm.R. 78, 85-86, 120, 463-64. The narrative portion of the evaluation stated that the Plaintiff's visa decisions were "routinely questionable," and that he "has a problem accepting authority." Adm.R. 83, 85. Mr. Lloyd further stated that he believed that the Plaintiff "well underst[ood] what is appropriate but refuses to do what everyone else in the section does because he simply does not agree." Adm.R. 86. That same day, Mr. Lloyd instructed the three other visa officers and a Brazilian employee of the visa unit to begin reviewing all of the Plaintiff's visa issuances and to report any departures from the post's "local policies." Adm.R. 464, 562.
Consul General Philip Taylor also allegedly criticized the Plaintiff for failing to adjudicate visa applications in the same manner as the other visa officers. Adm.R. 92. On June 30, 1993, Mr. Taylor gave the Plaintiff the draft employee evaluation prepared by Mr. Lloyd on June 23, 1993, and explained to the Plaintiff that he was given the interim report as an indication of where he needs to improve to be successful in his first assignment. Adm.R. 89.
On July 6, 1993, the consulate received a cable from Washington asking whether the Plaintiff should be administratively promoted to FP-4, effective August 11, 1993. The consulate replied by telegram dated July 7, 1993 that administrative promotion was not warranted because of the Plaintiff's poor performance, and that the post had prepared a draft evaluation of the Plaintiff, and had given the Plaintiff sixty days to raise his performance to the satisfactory level. Adm.R. 88.
Just thirteen days after the start of the "trial period," Mr. Taylor allegedly told the Plaintiff that it was "a virtual certainty" that he would be rated unsatisfactory at the end of it. Adm.R. 95, 112. In a July 19, 1993 Memorandum to Consul General Taylor, Ms. Murphy concluded "that Mr. Olsen's performance *8 falls far short of that which I would expect from an officer who has been on the job for over eight months. His deficiencies lie in the two core skills required to perform visa work speed and judgment." Adm.R. 294. The sixty-day trial period was ended after thirty-seven days, and the Plaintiff was relieved of his visa adjudication responsibilities on August 13, 1993. First Amended Cmplt. ¶ 66.
On August 16, 1993, the Plaintiff received his Candidate Evaluation Report, which rated his performance as unsatisfactory. Adm.R. 55-61. The unsatisfactory rating triggered the procedures under State Department regulations for separation of officer candidates for unsatisfactory performance. The regulations state that while officer candidates usually are evaluated for tenure by a Commissioning and Tenure Board during their five-year limited appointment,
in exceptional cases a candidate may, prior to Board review, prove unable to perform assigned duties satisfactorily.... In such circumstances, it serves neither the interest of the Service nor the individual to retain the candidate for the full trial period originally scheduled. In such instances, the Director General will terminate the candidate's appointment without delay, as authorized by section 611 of the Act.
3 FAM 578.1. Under 3 FAM 578.2, the Director General was required to review "all relevant and admissible material with respect to the [Plaintiff's] performance" and do one of the following: (1) change the rating to satisfactory; (2) direct the separation of the Plaintiff under section 611 (now 612) of the Act; or (3) provide an additional period of on-the-job observation.
By cable dated December 4, 1993, the Director General of the Foreign Service informed the Plaintiff that she had reviewed his most recent letter, as well as prior documentation provided by him and the Consulate. After a "thorough review" of the file, the Director General concluded that the evidence did not support overturning the finding of unsatisfactory performance, nor granting an additional period of observation. Accordingly, the Director General informed the Plaintiff that she had directed that action be taken under Section 611 of the Act to separate him from the Foreign Service effective January 30, 1994. Adm.R. 129.
II. Administrative Appeals
The Plaintiff filed a grievance with the State Department on January 19, 1994, in which he claimed that the decision to separate him was contrary to law or regulation for a number of reasons, and that the performance report on which the decision was based contained omissions, errors and falsely prejudicial information. The State Department placed the Plaintiff's separation in abeyance until the grievance was decided. Answer ¶ 78. On July 8, 1994, the Department denied the grievance, but held the separation in abeyance for fifteen more days to permit the Plaintiff to appeal to the Foreign Service Grievance Board. Answer ¶ 82.
Still working in the São Paulo Consulate, the Plaintiff filed a grievance with the Foreign Service Grievance Board on July 27, 1994. Adm.R. 217. The Plaintiff stayed on the State Department's employment rolls until September 21, 1994, at which time the Board refused to extend the abeyance. On September 25, 1995, the Board issued a decision denying the Plaintiff's grievance in full. Plaintiff's Memorandum of Points and Authorities in Opposition to Defendant Christopher's Motion For Summary Affirmance of the Decision of the Foreign Service Grievance Board, Exh. B.
DISCUSSION
Whether the Plaintiff's poor performance evaluation and separation from the Foreign Service were the legitimate consequences of his unsatisfactory performance as a visa officer or the retaliatory acts of foreign service officers, it is clear from the record that the Plaintiff was separated from the Foreign Service because he failed to abide by the São Paulo Consulate's system for adjudicating nonimmigrant visa applications, not because he was incompetent.
Appearing in this action pro se the Plaintiff has shown through his pleadings and oral argument that he is intelligent and articulate. The record suggests that the Plaintiff's superiors *9 also found him so. Adm.R. 84-85. In the same manner, the Plaintiff's education, successful careers in law and business prior to joining the Foreign Service, his favorable evaluations from State Department employees in the U.S. Consulate in Porto Alegre, Brazil and in Washington, and even his ability to pass the Foreign Service Exam belie the notion that the Plaintiff did not have the intelligence to properly adjudicate visa applications.
Rather, it is much more likely that the slowness and poor judgment exhibited by the Plaintiff, if any, stemmed from his failure to employ the Consulate's time-saving profiling system, or to adopt the criteria urged upon him and his fellow visa officers. Defendant Lloyd concedes as much in his June 23, 1993 performance evaluation of the Plaintiff. Adm.R. 86. If, for example, the Plaintiff believed that the Consulate was wrongfully denying visas to a whole class of visa applicants and, in defiance, issued visas to members of that class, his supervisors naturally would find that he exercised poor judgment in his decisions to issue and deny visas. If, for example, the Plaintiff refused to employ the system of profiling adopted by the Consulate (as both sides agree he did), which allows the visa officers to speed up the adjudication process through reliance on visual cues, then the Plaintiff naturally would take more time to adjudicate applications than visa officers relying more heavily on visual cues. In short, while it is possible that the Plaintiff was separated from the Foreign Service for processing applications too slowly, for poor judgment or for refusing to follow the directions of his supervisors, it is unlikely that he was separated because he lacked the ability to perform the tasks of a visa officer.
Therefore, two related questions appear to be at the heart of this dispute: (1) Was the Plaintiff justified in refusing to adopt the Consulate's system for adjudicating visa applications? and (2) Was the system for adjudicating visa applications a legitimate practice or a violation of federal law or State Department policy?
The Court takes seriously the Plaintiff's allegations that the profiling system results in actions taken based on skin color, race and national origin. At issue is the São Paulo Consulate's practice of relying heavily on visual cues when adjudicating nonimmigrant visa applications. The administrative record contains evidence that visas were issued and denied largely on how rich or poor the applicant appeared.
Of concern is the possibility that skin color, race or national origin played a role in the adjudication of nonimmigrant visa applications. Even if the codes, such as "LP" for "looks poor" or "LR" for "looks rough," literally refer to indicia of socio-economic status as considerations in issuing and denying visas, the Plaintiff makes a compelling argument that such codes are as tied to skin color, race and national origin as they are to dress or other indicia of wealth. It is a disturbing reality that in many countries, such as Brazil and even the United States, certain ethnicities are disproportionately represented among the poor. The issue is what, if any, consideration can a Cabinet agency of the federal government give to skin color, race or national origin when determining the socio-economic status of a visa applicant.
In order to better understand the visa adjudication system challenged by the Plaintiff, the Court shall request the Secretary of State to investigate the nature and extent of visa applicant "profiling" by State Department officers. The Secretary shall submit a pleading to the Court, setting forth its findings on the following: (1) what internal State Department procedures govern the adjudication of nonimmigrant visa applications; (2) how much discretion is accorded visa officers under the law in issuing and denying nonimmigrant visas; (3) which embassies and consulates employ a profiling system that allows visa officers to consider visual cues in issuing or denying visas; (4) what visual cues or other codes are employed by embassies and consulates using a profiling system; (5) how much weight are visa officers allowed to place on visual cues or other profiling codes in adjudicating nonimmigrant visa applications; (6) whether profiling codes, such as those purportedly used by the São Paulo Consulate, comport with the law and State Department procedures and processes; (7) *10 the extent to which the State Department protects such profiling systems from resulting in race-based decisions with respect to nonimmigrant visa applications; (8) what is the reason, if any, for using codes rather than specifying precisely the reason for issuing or denying a visa; (9) the identity of the highest State Department officer who is aware of the use of "profiling" codes and has approved their use; (10) whether the legitimacy of the São Paulo Consulate's profiling system was considered and addressed in the Foreign Service Grievance Board's adjudication of the Plaintiff's grievance; and (11) what, if any, consideration was given to treating the Plaintiff's actions as those of a whistle blower.
CONCLUSION
The Court needs the information requested in order to appropriately adjudicate the Plaintiff's case. The record in this case raises the possibility that the State Department did not seriously consider that the Plaintiff's actions were more akin to those of a whistle blower, misguided or not, than those of an incompetent Foreign Service officer who could not meet the demands of his assignment.
For the reasons stated, the Court will request the Secretary of State to submit to the Court a pleading detailing its findings on the issues described herein on or before May 30, 1997. The case will be held in abeyance until the Court has received the requested information. The Court will issue an order of even date consistent with the foregoing Memorandum Opinion.
NOTES
[1] The Visa Officer's Manual states the following: It is helpful to circle any doubtful items on the OF-156 so that other officers have an idea of why the applicant was g-ed. Officers sometimes use abbreviations on the forms:
RK = Rich kid
LP = Looks poor
TP = Talks poor
LR = Looks rough
TC = Take care
Adm.R. 42.
[2] A Memorandum distributed to the United States posts in Brazil in April, 1993 suggested that visa officers should carefully scrutinize applications from persons with Arab or Chinese last names. The Memorandum suggested that:
Arab and Chinese last names set off bells and whistles, regardless of what passport/nationality they may have.
Adm.R. 519. The Memorandum gave a further warning:
Note: As we learned in two fraud investigations, it is very easy to assume a false identity in Brazil and obtain a genuine passport and nationality and other documents. Most Brazilians have no interest in doing so, but Arabs and Chinese are two groups to worry about.
Adm.R. 521.
[3] The Visa Officer's Manual contains the following guidance:
Korean/Chinese Fraud
Major fraud; hard to check. In general, they are almost always called for an interview. Visas are rarely issued to these groups unless they have had previous visas and are older.
Adm.R. 741.
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402 F.3d 217
In re George E. KERSEY, Respondent.
No. 04-8016.
United States Court of Appeals, First Circuit.
Heard January 3, 2005.
Decided March 25, 2005.
George E. Kersey on memorandum for respondent.
Before SELYA, LYNCH and LIPEZ, Circuit Judges.
ON ORDER TO SHOW CAUSE WHY RECIPROCAL DISCIPLINE SHOULD NOT BE IMPOSED
PER CURIAM.
1
Attorney George E. Kersey was ordered disbarred by the New Hampshire Supreme Court in February 2004 and then, in reciprocal fashion, by a single justice of the Massachusetts Supreme Judicial Court in July of that year. Initiating our own reciprocal discipline proceeding in September 2004, we directed Kersey to show cause why this court should not impose a similar sanction. Having reviewed his written responses and held oral argument, we now order that Kersey be disbarred from the practice of law before this court.
2
Our recent decision in In re Williams, 398 F.3d 116 (1st Cir.2005) (per curiam), outlined the methodology that applies in this context. "As a general rule," we stated, "discipline similar to that imposed in the state court will be imposed in a reciprocal proceeding." Id. at 119. An exception can arise if one of the circumstances listed in Selling v. Radford, 243 U.S. 46, 51, 37 S.Ct. 377, 61 L.Ed. 585 (1917), and memorialized in Rule II.C of this court's Rules of Attorney Disciplinary Enforcement (2002), is involved. That rule provides that this court will impose substantially the same discipline as the original court unless it is persuaded:
3
1. that the procedure used by the other court was so lacking in notice or opportunity to be heard as to constitute a deprivation of due process; or
4
2. that there was such an infirmity of proof establishing the misconduct as to give rise to the clear conviction that this Court could not, consistent with its duty, accept as final the conclusion on that subject; or
5
3. that the imposition of substantially similar discipline by this Court would result in grave injustice; or
6
4. that the misconduct established is deemed by this Court to warrant different discipline.
7
1st Cir. Discip. R. II.C. We also explained in Williams that the respondent attorney bore twin burdens in such a proceeding: first, to "ensure that th[e] whole of the record is furnished to the court in a timely manner and to identify the parts of the record upon which he relies," 398 F.3d at 119; and, second, to "carry the devoir of persuasion, by clear and convincing evidence, that imposition of reciprocal discipline is unwarranted," id. We emphasized that "[g]iven the limited nature of our inquiry, the norm will be for this court to impose discipline which is substantially similar to that imposed by the state court." Id.
8
The New Hampshire Supreme Court disbarred Kersey after finding him in contempt of court in three respects in connection with two of its orders. See In re Kersey, 147 N.H. 659, 797 A.2d 864 (2002) (holding him in contempt); In re Kersey, 150 N.H. 585, 842 A.2d 121 (2004) (ordering disbarment). Specifically, it concluded that Kersey had violated: (i) a September 2001 order by continuing to practice law after being suspended from practice; (ii) that same order by failing to turn over his client files to a designated attorney; and (iii) a December 2001 order by failing to bring his client files to a scheduled hearing before a referee. Kersey now denies that he continued to practice law following his suspension and insists that he had a reasonable basis for refusing to produce his client files.
9
The continued-law-practice charge arose out of the following events. The state supreme court's suspension order was itself the product of a reciprocal discipline proceeding, which had been prompted by outstanding contempt citations in Vermont and an ensuing disciplinary sanction in Massachusetts. The September 2001 order suspended Kersey from the practice of law for three months, beginning on October 20, 2001. On October 19, Kersey appealed to the New Hampshire Supreme Court from the dismissal of a case he had brought on behalf of several clients. And the following month he filed two pleadings in that appeal. According to Kersey, his pursuit of the appeal did not violate the suspension order, inasmuch as he was there only for the purpose of challenging an award of attorneys' fees against him personally (and, therefore, he was the real party in interest). In other words, because he was representing himself rather than his clients — indeed, because only he (not his clients) had standing to pursue such a challenge on appeal — he was not engaged in the practice of law.
10
The state supreme court disagreed, noting that "[t]he appeal in question was filed by [Kersey] in his capacity as his clients' attorney, and stemmed from a case in which [he] was acting as his clients' attorney." 797 A.2d at 866-67. Accordingly, when Kersey in November "filed with this court two pleadings..., he violated the September order." Id. at 867. Kersey now claims that this analysis was flawed.1
11
An initial obstacle encountered by Kersey is that he has not supplied many of the relevant state court papers, despite our request that he do so (and despite his burden in this regard). In particular, we have none of the materials from the state court litigation — such as the award of attorneys' fees, the notice of appeal, and the two subsequent pleadings cited by the state supreme court. We thus cannot confirm, for example, that the fees award was directed only against Kersey personally. Regardless, even if we accept all of Kersey's factual allegations as true, we would still conclude that Kersey has failed to establish by clear and convincing evidence that a lesser sanction was warranted.
12
The state supreme court's finding that the suspension order was violated necessarily rested on a determination, as a matter of state law, that Kersey's pursuit of the appeal constituted the practice of law. In challenging that finding, Kersey is asking us to conclude, in essence, that the state court misapplied state law. It is not within the province of a federal court to render such a judgment. See, e.g., Wainwright v. Goode, 464 U.S. 78, 84, 104 S.Ct. 378, 78 L.Ed.2d 187 (1983) (per curiam) ("the views of the State's highest court with respect to state law are binding on the federal courts"); Noviello v. City of Boston, 398 F.3d 76, 91 (2005) (similar). Nor is the state supreme court's analysis obviously flawed. The court stated, and Kersey has not disputed, that he filed the appeal in his capacity as his clients' attorney. We take this to mean that Kersey's intent to appeal only on his own behalf was not apparent from the face of his appellate pleadings. It is hardly unreasonable, when a suspended attorney appears in court, to demand clear evidence of such intent from the outset.2
13
This raises a related consideration. Even if Kersey's interpretation of the suspension order could be viewed as plausible at the time, it was by no means airtight. The attorney who was to collect his client files, for example, had advised him that his position was untenable. Under these circumstances, and especially where Kersey was serving a suspension precisely because of earlier contempt citations, his decision to press ahead without first seeking guidance from the state supreme court reflects a level of recklessness that is deserving of little sympathy.
14
Kersey's refusal to hand over his client files, in violation of two court orders, further supports the state court's choice of discipline. To be sure, disbarment might well be unwarranted on the basis of these violations alone. The first order imposed no explicit command on Kersey in this respect; Kersey had what he presumably thought were legitimate reasons to withhold the files; his noncompliance was somewhat short-lived; and his former clients suffered no evident prejudice. In one respect, however, the second violation here could be deemed more egregious than the practicing-law offense: while Kersey might plausibly (if erroneously) have believed that his participation in the state appeal did not contravene the suspension order, he could have harbored no doubt that he was in direct defiance of the December order. These violations thus reinforce the reasonableness of the state court's sanction.
15
For these reasons, we conclude that cause has not been shown why reciprocal discipline substantially similar to that ordered by the New Hampshire Supreme Court should not be imposed here. Accordingly, Attorney George E. Kersey is hereby disbarred from the practice of law before this court.
16
So ordered.
Notes:
1
Kersey also had two cases pending in federal district court during this period. While a referee relied on them as well in finding the continued practice of law, the state supreme court did not. Accordingly, we need not pursue Kersey's argument that the suspension order did not apply to federal litigation
2
Nor, for that matter, is it even clear that the state court would adopt the standing principles upon which Kersey relies. He has pointed to federal case law in this regard but has cited no relevant state precedents
|
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123 S.W.3d 270 (2003)
Sharon GAUERT, as the Assignee in interest of Phillip and Phyllis Collins, Appellant,
v.
CHRIS-LEEF GENERAL AGENCY, INC., Respondent.
No. WD 61664.
Missouri Court of Appeals, Western District.
November 4, 2003.
Motion for Rehearing and/or Transfer Denied December 23, 2003.
Application for Transfer Denied January 27, 2004.
*271 Allan H. Bell, Kansas City, MO, for appellant.
Spencer J. Brown, Kansas City, MO, for respondent.
Before JAMES M. SMART, JR., P.J., ROBERT G. ULRICH and LISA WHITE HARDWICK, JJ.
Motion for Rehearing and/or Transfer to Supreme Court Denied December 23, 2003.
ROBERT G. ULRICH, Judge.
Sharon Gauert appeals the trial court's grant of summary judgment in favor of Chris-Leef General Agency, Inc. on her claim of negligence in the procurement of general liability insurance. The judgment of the trial court is affirmed.
On March 31, 1992, Kansas City Oil Company (KCO) operated a gasoline station on Swope Parkway in Kansas City. At that time, Phil Collins owned all of the stock of KCO. Mr. Collins and his wife, Phyllis, owned the real estate on which the gasoline station was located. Tim Gauert was employed by KCO as an attendant at the gasoline station. On that day, while working for KCO, Mr. Gauert was shot to death in the course of a robbery at the gasoline station.
Sharon Gauert, Mr. Gauert's widow, filed a wrongful death action against the Collinses alleging that their negligence as landowners caused her husband's death. The parties entered into an agreement pursuant to section 537.065, RSMo 2000, wherein the Collins agreed to allow judgment to be taken against them in an amount to be determined by the trial court with recovery from them limited to their insurance coverage. The trial court approved the settlement of the parties, entered judgment against the Collinses, and awarded Mrs. Gauert damages in the amount of $2,400,867.22.
Thereafter, Mrs. Gauert, in her capacity as assignee of the Collinses, sued Chris-Leef alleging that the insurance agency, as the agent of KCO, negligently failed to have the Collinses named as additional insureds on the KCO commercial liability policy. Chris-Leef subsequently filed a motion for summary judgment. It argued that the facts were not in dispute and that it was entitled to judgment as a matter of law for four separate reasons. First, it contended that neither Sharon Javinsky nor her employer, Encore Insurance Agency, Inc., the insurance agent with whom the Collinses dealt, was the agent of Chris-Leef. Second, Chris-Leef argued that even if the Collinses had been named insureds on the policy, the assault and battery exclusion in the policy would have precluded coverage for the death of Tim Gauert. Third, it argued that because the claim of Mrs. Gauert against the Collinses was within the exclusive jurisdiction of the Labor and Industrial Relations Commission, the judgment entered in the case was void and, thus, did not injure the Collinses. Finally, Chris-Leef contended that the assignment to Mrs. Gauert of the Collinses' unliquidated claim against Chris-Leef was void. The trial court granted summary judgment in favor of Chris-Leef. This appeal by Mrs. Gauert followed.
Standard of Review
Appellate review of summary judgment is de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is upheld on appeal where the movant is entitled to judgment as a matter of law and no genuine issues of material fact exist. Id. at 377. The record is reviewed in the light most favorable to the party against whom judgment was entered, according that party all reasonable inferences that may be drawn from the record. Id. at 376. Facts contained in affidavits or otherwise in support of a party's *272 motion are accepted as true unless contradicted by the non-moving party's response to the summary judgment motion. Id.
A defending party may establish a right to judgment as a matter of law by showing any one of the following: (1) facts that negate any one of the elements of the claimant's cause of action; (2) the non-movant, after an adequate period of discovery, has not and will not be able to produce evidence sufficient to allow the trier of fact to find the existence of any one of the claimant's elements; or (3) there is no genuine dispute as to the existence of each of the facts necessary to support the movant's properly-pleaded affirmative defense. Id. at 381.
Once the movant has established a right to judgment as a matter of law, the non-movant must demonstrate that one or more of the material facts asserted by the movant as not in dispute is, in fact, genuinely disputed. Id. The non-moving party may not rely on mere allegations and denials of the pleadings, but must use affidavits, depositions, answers to interrogatories, or admissions on file to demonstrate the existence of a genuine issue for trial. Id. The material facts in this case are not in dispute. The issue on this appeal, therefore, is whether Chris-Leef established a right to judgment as a matter of law on Ms. Gauert's claim against it.
Agency
In her first point on appeal, Mrs. Gauert claims that the trial court erred in granting summary judgment in favor of Chris-Leef on her claim for negligence in the procurement of insurance. In a negligence action, the plaintiff must establish that the defendant had a duty to the plaintiff, that the defendant failed to perform that duty, and that the defendant's breach was the proximate cause of the plaintiff's injury. Hecker v. Mo. Prop. Ins. Placement Facility, 891 S.W.2d 813, 816 (Mo. banc 1995). An insurance broker or agent who undertakes to procure insurance for a party, with a view to earning a commission, becomes the party's agent and, in part, owes a duty to timely notify that party if it fails to procure such insurance. Id. If the broker or agent unjustifiably and through its fault or neglect fails to procure such insurance, it will be held liable for any damage resulting therefrom. Zeff Distrib. Co. v. Aetna Cas. & Sur. Co., 389 S.W.2d 789, 795 (Mo.1965) (citation omitted).
The following material facts are undisputed. In February 1992, Phil Collins sought a commercial liability insurance policy on behalf of KCO. Mr. Collins contacted Sharon Javinsky, the sole shareholder of Encore Insurance Agency, to purchase such insurance. During their dealing, Mr. Collins did not know for what company Ms. Javinsky worked and assumed she ran her own business as an insurance broker dealing with a number of insurance companies. After talking with Mr. Collins, Ms. Javinsky completed KCO's application for insurance dated February 7, 1992, and submitted it to eight or nine potential wholesale suppliers including Chris-Leef. Chris-Leef is a managing general agency that provides underwriting services for a number of insurance companies. It does not sell insurance. An underwriter at Chris-Leef received the KCO application on February 14, 1992. Based on several factors in the application, the application fell outside Chris-Leef's underwriting authority; therefore, Chris-Leef referred the application directly to the insurance company, Colony, on February 25, 1992. It received authorization from Colony the same day to provide a quotation.
*273 Ms. Javinsky received nine quotes on the KCO applications that she submitted to various wholesalers. Because Colony offered the best coverage and quote, KCO selected its offer. Based on Ms. Javinsky's request on February 27, 1992, Chris-Leef issued a binder for the coverage on February 29, 1992. It also ordered inspections of the KCO properties on behalf of Colony. Because KCO could not afford to pay the premium on the Colony policy, KCO asked Ms. Javinsky to help it obtain premium financing, which she did. Chris-Leef did not receive any financial benefit from the financing company or participate in financing the premium other than confirming for the finance company that KCO had procured the coverage represented in the application for premium financing.
The Colony policy was typed on April 7, 1992. Chris-Leef provided Colony with a copy of the policy, the signed application, the binder, the worksheet, and the inspection report. The inception date of the Colony policy was February 27, 1992. Chris-Leef was identified on the policy as the Producer. The Collinses were not named on KCO's commercial liability policy as additional insureds.
Mrs. Gauert's claim against Chris-Leef for negligence in the procurement of insurance was based on the allegation that Chris-Leef was the Collinses' insurance agent directly or through its agent, Ms. Javinsky, and that Chris-Leef failed to have the Collinses named as additional insureds on the policy as directed.
A principal is responsible for the acts and agreements of its agent that are within the agents actual or apparent authority. Nichols v. Prudential Ins. Co. of Am., 851 S.W.2d 657, 661 (Mo.App. E.D.1993). "Authority is the power of the agent to affect the legal relations of the principal by acts done in accordance with the principal's manifestations of consent to him." Id. (quoting RESTATEMENT (SECOND) OF AGENCY 7 (1957)). Actual authority is express or implied. Id. Actual authority is created when a principal instructs the agent specifically how to act on the principal's behalf. Euclid Plaza Assocs., L.L.C. v. African Am. Law Firm, L.L.C., 55 S.W.3d 446, 449 (Mo.App. E.D.2001). Implied authority consists of those powers incidental and necessary to carry out express authority. Nichols, 851 S.W.2d at 661.
Apparent authority, on the other hand, is created when a principal acts in such a manner that a third party believes the agent is authorized to act on behalf of the principal. Graue v. Mo. Prop. Ins. Placement Facility, 847 S.W.2d 779, 783 (Mo. banc 1993); Euclid Plaza Assocs., 55 S.W.3d at 450. Apparent authority develops solely from the acts of the alleged principal and not from the acts of the purported agent. Euclid Plaza Assocs., 55 S.W.3d at 450. It must be based on facts that exist at the time of the transaction and may not be based on facts that arise later. Gray v. Builders Square, Inc., 943 S.W.2d 858, 861 (Mo.App. W.D.1997). Apparent authority cannot arise where a third party does not know the identity of the principal or where the third party is undisclosed. Euclid Plaza Assocs., 55 S.W.3d at 450.
The undisputed evidence shows that Chris-Leef was not the Collinses' insurance agent. The Collinses never had contact with Chris-Leef. Mr. Collins testified in his deposition that he only dealt with Ms. Javinsky of Encore in obtaining commercial liability insurance for KCO. He further testified that he did not become aware of Chris-Leef until he saw its name on the Colony policy in his attorney's office after litigation resulting from Tim Gauert's *274 death began.[1] Mrs. Gauert argues that because Chris-Leef issued the binder for insurance coverage, was named on the insurance policy as the producer, arranged for inspection of the property, and confirmed for the finance company that KCO had procured the coverage represented in the application for premium financing, it was acting as the insurance agent of KCO and the Collinses. These actions, however, were done for the benefit of the insurance company, Colony, for which Chris-Leef underwrites policies.
Neither was Ms. Javinsky or her company, Encore, the agent of Chris-Leef either through actual or apparent authority. The undisputed evidence shows that as a managing general agency, Chris-Leef is a wholesale insurance supplier that underwrites insurance for a number of insurance companies. It does not have direct contact with insureds but instead receives business from approximately 350 insurance agencies, which it refers to as its Agency Force, such as Encore in this case. While Chris-Leef and Encore do have a business arrangement, the arrangement is not one of principal and agent. The relationship between Encore and Chris-Leef is one where Encore brings the customer and Chris-Leef brings the insurance policy. Chris-Leef does not provide any incentive to Encore for business referred to it and has no financial interest in Encore. It does not instruct Encore how to operate nor does it demand a certain sales volume from Encore. Additionally, Chris-Leef did nothing to cause the Collinses to believe that Encore had the authority to act for Chris-Leef. As stated above, the Collinses did not even know the identity of Chris-Leef until after they purchased the Colony insurance policy. The trial court, therefore, did not err in granting summary judgment in favor of Chris-Leef.[2] The point is denied.
The judgment of the trial court is affirmed.
SMART, P.J. and HARDWICK, J. concur.
NOTES
[1] Mrs. Gauert claims that whether Mr. Collins assumed or believed that Ms. Javinsky worked for Chris-Leef was disputed. In making this claim, she cites to specific answers in Mr. Collins' deposition. Review of the deposition, however, shows that after further questioning, Mr. Collins ultimately acknowledged that he did not know who Ms. Javinsky worked for at the time he purchased the insurance and only learned of Chris-Leef when he saw its name on the policy in his attorney's office after litigation began.
[2] Because this point disposes of the case, Mrs. Gauert's remaining points regarding the trial court's grant of summary judgment for other reasons need not be addressed. Chester Bross Constr. Co. v. Mo. Highway & Transp. Comm'n, 84 S.W.3d 149, 150 n. 3 (Mo.App. W.D.2002).
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
JUN 4 2003
TENTH CIRCUIT
PATRICK FISHER
Clerk
THURMAN HARRISON, JR.,
Petitioner-Appellant,
v. No. 02-1501
(District of Colorado)
CHARLES RAY; ATTORNEY (D.C. No. 00-RB-1971 (OES))
GENERAL OF THE STATE OF
COLORADO,
Respondents-Appellees.
ORDER
Before SEYMOUR, MURPHY, and O’BRIEN, Circuit Judges.
Because the denial by this court of an application to file a second or
successive habeas petition may not be the subject of a petition for rehearing, we
strike the petition for rehearing filed by petitioner-appellant. See 28 U.S.C. §
2244(b)(3)(E). The court, however, sua sponte vacates its order and judgment in
this matter filed on March 31, 2003, and substitutes the following order in its
place.
Petitioner, Thurman Harrison Jr., is before this court pro se, seeking a
certificate of appealability (“COA”). Harrison must obtain a COA before he can
appeal the district court’s dismissal of the habeas petition he filed pursuant to 28
U.S.C. § 2254. See 28 U.S.C. § 2253(c)(1)(A) (providing that no appeal may be
taken from the denial of a § 2254 petition unless the petitioner first obtains a
COA).
Harrison was charged in Colorado with felony theft and fraud by check.
Pursuant to the terms of a plea agreement, Harrison pleaded guilty to the felony
theft charge and the remaining charge was dismissed. Harrison was sentenced to
nine years’ incarceration to be followed by a three-year term of mandatory parole.
Harrison’s application for post-conviction relief was denied by the Colorado
Court of Appeals on February 24, 2000. The Colorado Supreme Court then
denied Harrison’s petition for a writ of certiorari.
Harrison filed his § 2254 petition with the federal district court on October
3, 2000. In the petition, Harrison raised five issues: (1) the indictment charged
him with conduct that did not constitute a crime; (2) his due process rights were
violated when the trial court failed to inform him of the three-year term of
mandatory parole; (3) Colorado’s mandatory parole statute, Colo. Rev. Stat. § 18-
1-105(1)(a)(V)(A), is unconstitutional; (4) his due process and equal protection
rights were violated when the trial court refused to provide him with a free
transcript; and (5) his due process rights were violated at the sentencing hearing
when the trial court failed to make findings justifying an aggravated-range
-2-
sentence. The federal district court denied each of Harrison’s claims on the
merits.
This court cannot grant Harrison a COA unless he can demonstrate “that
reasonable jurists could debate whether (or, for that matter, agree that) the
petition should have been resolved in a different manner or that the issues
presented were adequate to deserve encouragement to proceed further.” Slack v.
McDaniel, 529 U.S. 473, 484 (2000) (quotations omitted). In evaluating whether
Harrison has carried his burden, this court undertakes “a preliminary, though not
definitive, consideration of the [legal] framework” applicable to each of his
claims. Miller-El v. Cockrell, 123 S. Ct. 1029, 1040 (2003). Harrison is not
required to demonstrate that his appeal will succeed to be entitled to a COA. He
must, however, “prove something more than the absence of frivolity or the
existence of mere good faith.” Id. (quotations omitted).
This court has reviewed Harrison’s application for a COA and appellate
brief, the magistrate judge’s recommendation, the district court’s order, and the
entire record on appeal pursuant to the framework set out by the Supreme Court in
Miller-El and concludes that Harrison is not entitled to a COA. The district
court’s resolution of Harrison’s claims is not reasonably subject to debate and the
-3-
claims are not adequate to deserve further proceedings. 1 Harrison, therefore, has
not “made a substantial showing of the denial of a constitutional right.” 28
U.S.C. § 2253(c)(2). This court denies Harrison’s request for a COA for
substantially those reasons set forth in the magistrate judge’s recommendation for
dismissal dated July 31, 2002 and the district court’s order dated October 15,
2002, and dismisses this appeal. Harrison’s request to proceed on appeal in
forma pauperis is granted.
ENTERED FOR THE COURT
Michael R. Murphy
Circuit Judge
1
Although Harrison has not provided this court with a copy of the plea
agreement, we note that he admitted before the Colorado Court of Appeals that in
the agreement he expressly agreed to a sentence of nine years. Further, the
Colorado Court of Appeals found that Harrison was advised in the plea agreement
that he could be required to serve up to five years of mandatory parole. Harrison
has failed to rebut the presumption of correctness afforded this finding. See 28
U.S.C. § 2254. (“[A] determination of a factual issue made by a State court shall
be presumed to be correct. The applicant shall have the burden of rebutting the
presumption of correctness by clear and convincing evidence.”). Because the
sentence Harrison received is less than twice the presumptive maximum, it was
permitted by Colorado law and, therefore, is not an illegal sentence. See Colo.
Rev. Stat. § 18-1-105(6) (2000).
-4-
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923 F.2d 848Unpublished Disposition
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.In re James Edward HARRIS, Petitioner.
No. 90-8045.
United States Court of Appeals, Fourth Circuit.
Submitted Jan. 7, 1991.Decided Jan. 29, 1991.
On Petition for Writ of Mandamus. (CA-90-338-CRT)
James Edward Harris, petitioner pro se.
PETITION DENIED.
Before DONALD RUSSELL, WIDENER and K.K. HALL, Circuit Judges.
PER CURIAM:
1
James Edward Harris brought this mandamus petition seeking an order directing the United States Attorney to present certain facts concerning alleged criminal activity to a grand jury and to allow Harris to testify before this grand jury. Because Harris has not shown that a special grand jury, called pursuant to 28 U.S.C. Sec. 3331, is currently sitting in the Eastern District of North Carolina, he is not entitled to require the United States Attorney to present his allegations to such a grand jury under 28 U.S.C. Sec. 3332. Accordingly, mandamus relief is not available to compel the United States Attorney to initiate an investigation. Therefore, we grant permission to proceed in forma pauperis and deny mandamus relief. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the Court and argument would not significantly aid in the decisional process.
2
PETITION DENIED.
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1 U.S. 175 (1786)
1 Dall. 175
KERLIN'S Lessee
versus
BULL et al.
Supreme Court of United States.
*176 M`KEAN, C.J.
This cause was tried at Nisi Prius in Chester, when the Jury found a special verdict, which contains the following statement: That a certain John Hunter, being seized in fee of the premisses in question, on the 30th of July 1751, made his last will and testament in writing, duly executed, and, among other things, devised in the words following: "I give and bequeath to my eldest son James when he arrives at the age of twenty one years, all and singular the messuage, &c. to hold to him, his heirs and assigns for ever." "Item, I give and bequeath unto my youngest son John, when he arrives to the age of twenty one years, one hundred acres of land, that I bought of John Chads, known by the name and called Jehu's Hundred, and the house and lot of seven acres of land, lying on the south west side of the Connestogoe road near the Whitehorse sign; to hold to him, his heirs and a signs for ever." That the estate devised to the youngest son John is the one in question. That afterwards he devises "to his wife Anne the use and profits of all his said lands and tenements, for the maintenance and education of his children, until his said sons should attain to their several ages aforesaid successively." That the Testator died seized thereof, leaving James, his eldest son, and John, Margaret, Hannah, Elizabeth, Anne and Mary his children, and also Martha, who intermarried with John Rattew, one of the Defendants. That the other Defendant intermarried with the daughter Anne. That John, the devisee, died in the year 1769, under age, intestate, unmarried, and without issue, living his mother, his brother James and all his sisters. That the lessor of the plaintiff has the estate that was in James, who was found to be the heir at law of John. But whether, upon the whole matter, the defendants be guilty of the trespass and ejectment, the jurors know not, &c. in common form.
The questions that arise upon this special verdict, are two 1st. Whether the estate vested immediately in John, or remained in contingency 'till he came of age? And, if it be a vested devise, 2dly. Whether the lands in dispute went to James, his eldest brother, as his heir at common law, or were subject to distribution, under the Act of Assembly, amongst his brothers and sisters, as he died intestate, under age, unmarried, and without issue?
To prove, that it was a contingent and lapsed devise to John, the counsel for the defendants cited 3 Bacon's Abr. 478. 1 Burr. 227. and 2 Salk. 415. and insisted, that where the time is annexed to the substance of the gift, and not to the possession, there it is a lapsed devise, by the devisee's not living until the time specified.
And, to show, that if the estate vested immediately in John by the devise, upon the death of his father, yet it descended and was to be distributed equally among his surviving brother and sisters, they produced the "Supplement to an Act of Assembly, intitled, "An Act for the better settling intestates estates," passed the 23d of March, 1764, in page 307 of the first volume of Pennsylvania Laws: And *177 also cited a case, determined at Nisi Prius in Bucks county, by Judges Lawrence and Willing, in 1773, in an ejectment by Joseph Heister's Lessee versus Jacob Lambert; wherein this point was ably argued and adjudged for the party claiming distribution.[*]
For the Plaintiff, it was insisted, that this was a vested devise, and in support thereof, they cited 3 Bacon's Abr. 478. 2 Vent. 366. 3 Co. 21. 8 Vin. 370 pl. 13, 373. pl. 12. 16. Gilb. Rep. in Eq. 36, 2 Mod. 289. 2 Freeman 243. 2 Vern. 561 and 1 Burr. 228. And that the cases mentioned on the other side were of lapsed legacies, and not devises.
And, on the 2d question, they urged, that the original Act of Assembly, as well as the supplement, must be taken into consideration, and then it will appear, that the supplement only related to such lands as should come to a child from an intestate father or mother by descent, and not to those he should acquire by purchase, as in the present case, by the will of the father. And that this case does not come within even the words of the Act, which are, "if after the death of any father and mother, any of their children shall die in their minority and intestate, but not otherwise &c." for the mother survived the son. John the devisee. It was further said, in answer to the case cited to have been determined at Nisi Prius in Bucks, that the two Judges did not pretend to be skilled in the law, and that they were obliged to give their judgment on a sudden and without deliberation, and that therefore it ought to have little or no weight.
THE COURT have detained this action under advisement until now, and with respect to the first question, whether the devise to John is a vested, or contingent and lapsed devise? they are clear, that to effectuate the intention of the Devisor, it must be construed a vested devise.
The absolute property is given to John when he should arrive at age, and the use and profits in the mean time to his mother, for the maintenance and education of all the children. This last devise is a particular interest, and no more than a chattle interest. The son John was the principal object of the testator's bounty, and if he had married, and died before 21 years of age, leaving children, he certainly meant not that this estate should go from them. This, therefore, was an immediate gift to John, though he was not to have the possession until he came of age. All the cases support this judgment. Legacies are governed by the rules of the civil and ecclesiastical Courts; Devises by the intention of the testator.
The 2d question is, Whether by the intestate laws of this State, the lands in dispute belonged to the eldest brother James Hunter, or to all the sisters and him equally, upon the death of John intestate, under age, unmarried, and without issue?
I will make an observation or two, previously to my delivering the particular opinion of the Court on this point.
*178 1. Where the intention of the legislature, or the Law is doubtful, and not clear, the Judges ought to interpret the law to be, what is most consonant to equity, and least inconvenient. Vaugh. 38. 285.
2. A Court is not bound to give the like judgment, which had been given by a former Court, unless they are of opinion that the first judgment was according to law; for any Court may err; and if a Judge conceives, that a judgment given by a former Court is erroneous, he ought not in conscience to give the like judgment, he being sworn to judge according to law. Acting otherwise would have this consequence; because one man has been wronged by a judicial determination, therefore every man, having a like cause, ought to be wronged also. Vaugh. 383.
We will now have recourse to the supplementary Act of Assembly, 1 State Laws 397, and consider the words and the spirit of it. In the case before the Court, John Hunter, the devisee, died intestate, under age, unmarried and without issue, after the death of his father, his mother surviving him. The words of the Act are, after the death of any father and mother, so that he was not within the words; but I am of opinion, that the word and, in this place, must be construed or; as in the very next sentence the mother is given an equal share of the personal estate of such intestate child, which came from the father, with the brothers and sisters of such child; which shews, the Legislature did not mean that the estate should not be distributed, unless both parents were dead. The clause, respecting the real estate of an infant intestate, does not take notice or distinguish, whether it was to come from the father, or mother, by descent or purchase, or how it was to be acquired, or from whom; but says, generally, that all his lands &c. shall be divided &c. And, it is remarkable, that the personal estate of such an intestate is to go in the same manner with the real estate: But in the following sentence there is an express provision for the mother out of that part of the personal estate, to which the intestate shall be intitled under such father; which shews, manifestly, that the mother was nor to have any share of any personal estate that should be acquired by such child, in any other manner than from the father; and perhaps they meant in both cases an intestate father; but this is by no means clear; it is very doubtful from the disposition of the personal estate, that was acquired differently; and our constitution and laws favor equality and distribution of estates.
This Act of Assembly has been made upwards of twenty years ago, and the question upon it now before the Court has received at least one judicial determination thirteen years ago, that the real estate, in such a case, should be distributed among the intestate's brothers and sisters equally. When there has been a solemn determination before two Judges of the Supreme Court after debate, and an acquiescence under it, there ought always to be great consideration paid to it, that the law may be certain. Upon the best information we can obtain from the gentlemen of the law in different parts of the *179 State, we find that estates have been distributed agreeably to this determination: And as this construction of the Act has been so long accepted and received as a rule of property, though some may not be satisfied in their private judgment, were the matter to be newly resolved, it is but reasonable we should acquiesce and determine the same way in so doubtful a case, to prevent greater mischiefs which may arise by shaking a number of estates, and from the uncertainty of the law.
Let judgment be entered for the Defendants.
NOTES
[*] Art. 125.
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530 F.Supp. 814 (1981)
Alan RAGUSA, Plaintiff,
v.
The STREATOR POLICE DEPARTMENT, et al., Defendants.
No. 81 C 4887.
United States District Court, N. D. Illinois, E. D.
December 31, 1981.
*815 Daryl Driver, Kelly & Driver, LaSalle, Ill., for plaintiff.
Russell Eggert, O'Conor, Karaganis & Gail, Ottawa, Ill., for defendants.
MEMORANDUM OPINION AND ORDER
SHADUR, District Judge.
Alan Ragusa ("Ragusa") sues the Streator Police Department,[1] its Chief of Police David Kaschak and Officer William Bohne in a purported civil rights action under 42 U.S.C. § 1983 ("Section 1983"). Both policemen are alleged to have deprived Ragusa of property without due process of law by having impounded Ragusa's 1969 GMC pickup truck[2] and then having "refused or neglected to complete the proper release forms when duly requested to do so by [Ragusa]" (Complaint ¶ 9). *816 While the vehicle was in custody the officers "or others not presently known to [Ragusa] intentionally or negligently removed or allowed to be removed [various] items of personal property" (Complaint ¶ 10) of an alleged total value of some $1100, and the windshield was damaged requiring $160 in repairs. Finally the officers "or others not presently known to [Ragusa] either sold the aforesaid property at auction without notice to [Ragusa] or otherwise intentionally or negligently converted that property to their own personal use" (Complaint ¶ 11).
Defendants have moved to dismiss Ragusa's Complaint. For the reasons stated in this memorandum opinion and order, their motion is granted in part and denied in part.
Ragusa's Failure To State a Federal Claim for Negligence
Civil case filings in this District Court during 1981 have once again followed the familiar pattern of breaking all previous annual records by a wide margin. As a concomitant to that increase without any corresponding increase in the number of judges,[3] calendars grow even larger and more unmanageable. To some extent the increased influx is due to expanded sources of federal jurisdiction. But all too much of this growth industry is traceable to frivolous actions (in the federal sense) like Ragusa's negligence claim.
Defendants' supporting memorandum said they would (as they must) treat the Complaint's allegations as true for purposes of their motion. Despite that, defendants have made a number of factual statements in their memoranda (of which this opinion's footnote 2 reflects only one example) that belong in a motion for summary judgment rather than a motion to dismiss. But taking the Complaint at face value, its negligence claims are remarkable primarily for having totally ignored two controlling United States Supreme Court decisions[4] handed down a few months before this action was filed at the end of August 1981.
In June 1981 Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981) had put it beyond question that the determination of what process is due[5] for a negligent deprivation of property like that alleged by Ragusa depends on whether "the tort remedies which the State of [Illinois] provides as a means of redress for property deprivations satisfies the requirements of procedural due process" (id. at 1914). Parratt also taught that under circumstances comparable to those alleged by Ragusa a post deprivation hearing satisfies the requirements of due process. All that means is the availability of a conventional tort remedy in the Illinois courts, an action plainly available to Ragusa. Though definitive in nationwide terms, Parratt scarcely represented new law. Bonner v. Coughlin, 517 F.2d 1311, 1320 (7th Cir. 1975), modified en banc 545 F.2d 565 (1976), cert. denied 435 U.S. 932, 98 S.Ct. 1507, 55 L.Ed.2d 529 (1978).
Justice Powell's concurrence in Parratt might have been written for this case (101 S.Ct. at 1922 n.13):
The present case ... illustrates the extent to which constitutional law has been trivialized, and federal courts often have been converted into small-claims tribunals. There is little justification for making such a claim a federal case....
If Ragusa's negligence claim has substance he is free to assert it in the Illinois courts without having to overcome any jurisdictional hurdles. It is frankly difficult to understand why he felt compelled, in the face of Parratt and with a readily available remedy elsewhere, to add (as Justice Powell *817 added) to "an overburdened federal system."
Accordingly defendants' motion to dismiss is granted as to the Complaint's claims of their negligence.[6] This ruling extends as well to allegations that "others not presently known to [Ragusa] intentionally" took action that injured Ragusa, for such allegations would at worst charge defendants with negligence in having failed to prevent the possibility of such action.
Ragusa's Claim for Defendants' Intentional Misconduct
There remain for consideration the Complaint's allegations of intentional misconduct by the individual defendants. Such allegations do survive a motion to dismiss a Section 1983 lawsuit, under Kimbrough v. O'Neil, 545 F.2d 1059, 1061 (7th Cir. 1976). However Ragusa would then be left with only a piece and the more difficult piece of his possible claim. This Court will leave it to Ragusa to determine whether under the circumstances he wishes to dismiss this action without prejudice or to pursue the claim, as limited by this order, in this Court.
Conclusion
As indicated at the outset of this opinion, defendants' motion is granted in part and denied in part. At the December 31, 1981 status hearing at which this opinion will be announced to counsel, the Court will determine what proceedings should appropriately follow.
NOTES
[1] Of course the Department is not a legal entity, and this action is subject to dismissal as to it on that ground alone. If Ragusa were to replead by naming a legal entity, continuing to rely only on the naked allegation (Complaint ¶ 4) that the individual defendants "acted toward Plaintiff under color of the statutes, ordinances, customs and usage of the State of Illinois, City of Streator and the Streator Police Department," he would simply generate a further waste of time and money. Either on the face of the Complaint or with appropriate affidavit support for a summary judgment motion (depending on how one reads Powe v. City of Chicago, 664 F.2d 639 (7th Cir. 1981)), the new pleading would in all likelihood be equally unsuccessful as to the municipal defendant.
[2] Complaint ¶ 7 attributes the impoundment to a citation against Mrs. Ragusa for having lacked a valid registration for the vehicle. Ragusa argues in his memorandum opposing defendants' motion that no provision of Illinois law permits such impoundment. Defendants' memorandum asserts on that score:
There is no allegation that the citation issued to [Ragusa's] wife was factually or legally defective in any respect, or that the plaintiff did in fact have a valid registration for his truck.
When plaintiff demanded, in a letter from his former lawyer, that the truck be returned he was told that he need merely produce evidence that the truck was in fact his. Although plaintiff's former lawyer was told this in December of 1979, plaintiff did not get around to actually producing evidence of title to his truck until September 25, 1980. When he did so, the truck was immediately released to him.
During the time that plaintiff's truck was impounded, while defendants were waiting for plaintiff to produce some evidence that the truck was actually his, a former prisoner in the Streator city jail (not a party to this case) broke the windshield. The replacement cost of the windshield was apparently about $160.00. Some items of personal property were apparently stolen as well.
The defendants had possession of the pick-up truck at the time the windshield was broken and the personal property stolen, and they have accordingly already acknowledged their responsibility for it. The Streator Police Chief offered to pay for the broken windshield in December of 1979, nearly two years ago. Defendants remain willing to pay for the windshield as well as any of the personal property which was stolen and for which the plaintiff can furnish reasonable documentation to this day. All defendants ask is some reasonable proof of the claimed losses.
In ruling on the current motion this Court is of course limited to the matters alleged in the Complaint. It must therefore, at least for present purposes, ignore defendants' factual assertions.
[3] Indeed the inevitable delays in filling judicial vacancies compound the problem.
[4] Ragusa's Complaint flouted not only the Parratt case next discussed in the text but the slightly later City of Newport v. Fact Concerts, Inc., ___ U.S. ___, 101 S.Ct. 2748, 69 L.Ed.2d 616 (1981), which held punitive damages unavailable against municipal defendants in Section 1983 actions. Ragusa prayed such damages against the "Police Department" as well as the individual defendants.
[5] This inquiry is essential to a viable Section 1983 claim.
[6] This opinion expresses no views as to the possible maintainability of negligence as a pendent claim to a viable Section 1983 claim.
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141 Cal.App.2d 849 (1956)
THE PEOPLE, Respondent,
v.
JOSEPH E. WILLIAMS, Appellant.
Crim No. 3153.
California Court of Appeals. First Dist., Div. Two.
May 28, 1956.
Henry M. Elson, under appointment by the District Court of Appeal, for Appellant.
Edmund G. Brown, Attorney General, Clarence A. Linn, Assistant Attorney General, and Victor Griffith, Deputy Attorney General, for Respondent.
DOOLING, J.
Appellant, Joseph E. Williams, was charged with a violation of Vehicle Code, section 503, in that he took and drove a vehicle without the consent of the owner and with the intent to deprive the owner of his possession of said vehicle. He was also charged with having been convicted of three prior felonies, auto thefts, all of which he admitted. He pleaded not guilty and after a jury trial was convicted of the crime charged. He appeals from the judgment of conviction.
[1] Appellant's first contention that the evidence is insufficient to support the verdict is without merit. The owner of the car, one Luther Upshaw, allowed his daughter, Mrs. McCauley, to use his automobile on Saturday, September 4, 1954. He did not give appellant permission to drive the car *851 and did not know him. He described his car as a 1951 Buick, License Number 3B2671. Mrs. McCauley testified that on the afternoon of September 4, she parked the car in front of her house on Twenty-ninth Street near San Pablo Avenue in Oakland. She left the car locked with the windows rolled up. There was only one set of keys to the car and she had possession of them. The next morning the car was missing. Mrs. McCauley had given no one permission to drive it.
One L. D. Williams testified that on Saturday, September 4, at about 10:30 or 11 p. m. he called upon appellant Joseph E. Williams at the Ebony Plaza Hotel. This hotel was located about a block from where Mrs. McCauley parked the car in question. He and appellant drank half a bottle of gin in appellant's room. The witness then informed appellant that he had no money with him but suggested that if appellant could "get a way in a car" they could go to the witness' home in Richmond where he had some money. This would enable them to buy some more drinks. Appellant then left the room and returned an hour or an hour and a half later. He again left the room and was gone about 25 minutes. When he returned he said, "Come on, let's go." The witness left the hotel with appellant. The two of them entered a '51 or '52 Buick parked on the street. When the witness entered the car he noted sparks flying under the dash. The witness said to appellant: "Joe, you are not stealing this car?" Appellant with the witness as a passenger then drove the car to Richmond. They stayed in Richmond approximately 25 or 30 minutes and then came back to Oakland. Appellant parked the car two or three blocks from the Ebony Plaza Hotel. The witness asked appellant why he was leaving the car there and appellant answered: "I am supposed to leave it here."
Police Officer Milton P. Habelt testified that on September 5, 1954, he was sent to check a 1951 Buick, License Number 3B2671 for fingerprints. It was parked on Twenty-sixth Street, just west of San Pablo Avenue. He found two prints, one on the left wind-wing and one on the rear-view mirror. He stated that the car was not "hot-wired" (a method of by-passing the ignition so that a car may be started without the key) when he saw it although there were two or three small pieces of wire lying on the floor.
Robert M. Cooper, an assistant criminologist for the Oakland Police Department, identified the fingerprint taken by *852 Officer Habelt from the left wind-wing as that of appellant Williams.
The owner of the car testified that after the car was returned to his daughter he noted his son-in-law fixing some wires under the dashboard. He stated that his son-in-law was trying to connect them.
There was ample evidence presented at the trial from which the jury could have found that appellant was guilty. The jury could have found that appellant gained entrance to the car through the wind-wing where his fingerprint was found and then "hot-wired" the car in order to get it started without the key. The testimony of the witness L. D. Williams is not so unreliable and inherently improbable, as appellant contends, that it must be disregarded. Further in view of the other evidence against appellant the fingerprint evidence would seem to constitute strong evidence against him. (People v. Adamson, 27 Cal.2d 478 [165 P.2d 3].) A different situation was presented in People v. Flores, 58 Cal.App.2d 764 [137 P.2d 767], relied on by appellant, wherein the fingerprint evidence was held not sufficient. In the Flores case there was no other evidence connecting the defendant with the crime of grand theft of an auto and he admitted being in the stolen car, thus furnishing an explanation for the presence of his print in the car. In the instant case there is other evidence connecting appellant with the crime and he did not admit being in the car.
[2] Appellant's next contention is that the trial court committed prejudicial error in failing to instruct the jury that a violation of Penal Code, section 499b, was an included offense under a charge of violation of Vehicle Code, section 503. Vehicle Code, section 503, provides in part: "Any person who drives or takes a vehicle not his own, without the consent of the owner thereof, and with intent to either permanently or temporarily deprive the owner thereof of his title to or possession of such vehicle, whether with or without intent to steal the same, ... is guilty of a felony ..." Penal Code, section 499b, provides in part: "Any person who shall, without the permission of the owner thereof, take any automobile, ... for the purpose of temporarily using or operating the same, shall be deemed guilty of a misdemeanor ..." No instruction was given or requested on this latter code section.
Although appellant did not request an instruction on Penal Code, section 499b, as an included offense he argues that it *853 was error for the trial court not to give such instruction on its own motion. He cites People v. Carmen, 36 Cal.2d 768 [228 P.2d 281], and People v. Brown, 131 Cal.App.2d 643 [281 P.2d 319]. In both of these cases the defendant requested an instruction on the included offense so that they are not authority that such instruction must be given by the court on its own motion. He argues, however, that the case falls within the reasoning of the statement in People v. Klor, 32 Cal.2d 658, 662 [197 P.2d 705], that the "jury should be given instructions on the general principles of law applicable to the case and even if not requested by the parties such instruction should be given by the court of its own motion."
That the Supreme Court does not extend this rule to instructions on included offenses, at least of the character involved here, seems clear from the following language found in People v. Chessman, 38 Cal.2d 166, 187-188 [238 P.2d 1001]:
"As to crime (2), grand theft of an automobile, there is ample evidence ... to show that he intended to steal it. But, defendant says, the evidence would also permit the inference that he took the car with intent merely to deprive the owner of possession temporarily; i. e., the lesser offense of violation of section 503 of the Vehicle Code; and the jury should have been so instructed. ... If defendant wished to raise this contention, he should have requested an instruction as to the lesser offense and argued the matter to the jury." Here appellant neither requested the instruction nor argued the matter to the jury. In this respect his case is on all fours with that of Chessman. See also People v. Johnson, 99 Cal.App.2d 717, 727 [222 P.2d 335]; People v. Zabel, 95 Cal.App.2d 486, 489 [213 P.2d 60]; People v. Arguilida, 85 Cal.App.2d 623, 625 [193 P.2d 478]; People v. Dunlop, 79 Cal.App.2d 207, 211 [179 P.2d 658].
[3] Appellant's last contention is that the district attorney was guilty of prejudicial misconduct in commenting in his opening and closing arguments to the jury on appellant's failure to testify. No objection was made to these comments on the trial of the action. No motions were made to strike these remarks from the record or to instruct the jury to disregard them. It would seem that appellant is thus in no position to complain about them on appeal. (People v. Perry, 14 Cal.2d 387, 396 [94 P.2d 559, 124 A.L.R. 1223]; People v. Sykes, 44 Cal.2d 166, 172-173 [280 P.2d 769].) *854 An examination of the comments satisfies us, as well, that in view of California Constitution, article I, section 13 and Penal Code, section 1323, they were not improper. (People v. Adamson, 27 Cal.2d 478, 486-490 [165 P.2d 3].) The trial court correctly instructed the jury on appellant's right to remain silent. Appellant's argument that the prosecutor should not be allowed to comment as he did here because as a practical matter appellant had no choice but to remain silent in view of his three prior convictions for the same or similar offenses was presented in the Adamson case and there rejected. The court there stated that any change in the law in this respect must be made by the Legislature.
Judgment affirmed.
Nourse, P. J., and Kaufman, J., concurred.
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317 F.2d 743
Gottfried SEITZ, Appellant,v.The SECRETARY OF the SOCIAL SECURITY ADMINISTRATION, HEALTH,EDUCATION AND WELFARE DEPT., OLD-AGE AND SURVIVORSINSURANCE BUREAU, Appellee.
No. 18471.
United States Court of Appeals Ninth Circuit.
May 24, 1963, Rehearing Denied Aug. 1, 1963.
Gottfried Seitz, in pro. per.
Herman T. F. Lum, U.S. Atty., and Joseph M. Gedan, Asst. U.S. Atty., Honolulu, Hawaii, for appellee.
Before HAMLEY, HAMLIN and DUNIWAY, Circuit Judge.
HAMLIN, Circuit Judge.
1
Appellant, Gottfried Seitz, filed applications under the Social Security Act for disability insurance benefits on April 12, 1957, and to establish a period of disability on May 10, 1957. In his application for a period of disability, he stated that he became unable to work in October, 1946, due to 'psychic shock' and resulting 'physical ills.' The applications were denied by the Bureau of Old-Age and Survivors Insurance, and appellant requested a hearing. A hearing was held, the hearing officer concluding that appellant was not entitled to a period of disability or to disability benefits under the Act. The hearing officer's decision was reviewed and affirmed by the Appeals Council of the Social Security Administration. Appellant then instituted an action in the United States District Court for the District of Hawaii under section 205(g) of the Act (42 U.S.C. 405(g)) to review the decision. A summary judgment was granted by the district court in favor of appellee and appellant appeals from that judgment to this court.
2
Appellant in propria persona has filed written briefs and has presented oral argument before this court.
3
The issue to be considered on this appeal is whether there is 'substantial evidence'1 in the record to support the Secretary's decision.
4
The burden of proof was on appellant to establish his entitlement to benefits under the Act.2 In order to sustain this burden, it was necessary for him to prove that he was unable as of September 30, 1947, 'to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.'3 The date September 30, 1947, is important because under the Act the claimant must have been in a 'special insured status,' i.e., have had a certain number of quarters of coverage under the Act, immediately preceding the beginning of his period of disability,4 and it is uncontested that appellant last met this requirement on that date.
5
Appellant introduced no medical evidence or records that would tend to show that he was unable as of September 30, 1947, to engage in substantial gainful activity. Further, it was undisputed that from July 15, 1946, to June 13, 1949, appellant held a responsible position as Probation-Parole Officer for the Territorial First Circuit Court. In 1951, he taught courses in adult education classes in Territorial schools and from October 20, 1952, to September 17, 1955, he was employed as a guard for the Board of Public Parks and Recreation in Honolulu. There was no evidence to indicate that he was unable to perform any of these jobs in a satisfactory manner.
6
In view of the fact that appellant was unable to produce any medical evidence that would indicate that he was unable to engage in substantial gainful activity on September 30, 1947, and since he was in fact engaged in such activity on that date and continued to be so engaged subsequent thereto, we can only conclude that there is substantial evidence to support the Secretary's decision.
7
Judgment affirmed.
1
Section 205(g) of the Act (42 U.S.C. 405(g)) provides that 'the findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive.'
2
Sections 216(i)(1) and 223(c)(2) of the Act (42 U.S.C. 416(i)(1) and 42 U.S.C. 423(c)(2))
3
Ibid
4
See sections 216(i) and 223(c) of the Act (42 U.S.C. 416(i) and 42 U.S.C. 423(c))
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985 So.2d 1101 (2008)
PAGUADA
v.
STATE.
No. 4D08-916.
District Court of Appeal of Florida, Fourth District.
July 2, 2008.
Decision without published opinion. Affirmed.
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571 S.W.2d 926 (1978)
Michael H. NEELY, Appellant,
v.
The STATE of Texas, Appellee.
No. 56094.
Court of Criminal Appeals of Texas, Panel No. 3.
October 18, 1978.
*927 Steven E. Halpin, Houston, (Court-appointed), for appellant.
Carol S. Vance, Dist. Atty., William W. Burge and Robert N. Burdette, Asst. Dist. Attys., Houston, for the State.
Before DOUGLAS, ROBERTS and DALLY, JJ.
OPINION
DALLY, Judge.
The appellant was indicted for, convicted of, and now appeals from the conviction for unauthorized use of a motor vehicle under V.T.C.A. Penal Code, Sec. 31.07. Appellant was sentenced to five years' imprisonment.
On January 10, 1976, appellant borrowed Gloria Alex's car, telling her he would return it in a couple of hours. Two days later he called Alex from out of town, telling her that something was wrong with the car. Alex told him that she needed the car, and appellant again told her that he would have it back in two hours. Alex next saw her car three months later, in damaged condition and with different license plates. In the meantime she had filed charges on appellant.
In his sole ground of error, appellant contends that the evidence is insufficient to sustain his conviction under Sec. 31.07, supra, because when he took the car he had the owner's consent. Appellant asserts that he can only be convicted for theft under V.T.C.A. Penal Code, Sec. 31.03. Although these facts would support a conviction for theft, they also support a conviction for unauthorized use of a motor vehicle.
The general theft statute, V.T.C.A. Penal Code, Sec. 31.03(a) provides:
"A person commits an offense if he unlawfully appropriates property with intent to deprive the owner of property."
The elements of this offense are (1) a person (2) with intent to deprive the owner of property (3) unlawfully appropriates property. An appropriation of property is "unlawful" if it is without the owner's effective consent. V.T.C.A. Penal Code, Sec. 31.03(b). "Appropriate" means in part "to acquire or otherwise exercise control over property ..." V.T.C.A. Penal Code, Sec. 31.01(5)(B). (Emphasis added.)
V.T.C.A. Penal Code, Sec. 31.07(a) provides:
"A person commits an offense if he intentionally or knowingly operates another's boat; airplane, or motor-propelled vehicle without the effective consent of the owner."
The elements of this offense are (1) a person (2) intentionally or knowingly (3) operates *928 a boat, airplane, or motor-propelled vehicle (4) without the effective consent of the owner.
The elements of these two offenses are the same except that in theft there is the additional element of an intent to deprive the owner of property. See Practice Commentary, V.T.C.A. Penal Code, Sec. 31.07. The operation of a vehicle under Sec. 31.07 is included within the term "appropriate" as used in the theft statute. "Operation" is not defined in the Penal Code, but "operator" is defined in Art. 6701h, V.A.C.S., as "Every person who is in actual physical control of a motor vehicle." Virtually the same definition is provided in Art. 6687b, V.A.C.S.
Because the offense of unauthorized use of a motor vehicle can be proved by the same or less than all the facts necessary to prove theft, it is a lesser included offense of theft. Art. 37.09, V.A.C.C.P.; Sutton v. State, 548 S.W.2d 697 (Tex.Cr.App.1977); Hazel v. State, 534 S.W.2d 698 (Tex.Cr.App. 1976).
Since the appellant admits and we agree that the facts would sustain his conviction for the offense of theft, such facts will sustain his conviction for the lesser included offense of unauthorized use of a motor vehicle. See Daniels v. State, 464 S.W.2d 368 (Tex.Cr.App.1971).
Art. 40.03, V.A.C.C.P. supports this result:
"New trials, in cases of felony, shall be granted the defendant for the following causes, and for no other:
* * * * * *
"(9) Where the verdict is contrary to law and evidence. A verdict is not contrary to the law and evidence, within the meaning of this provision, where the defendant is found guilty of an offense of inferior grade to, but of the same nature as, the offense proved."
See Daniels v. State, supra.
Under the former penal code, the predecessor to the offense of unauthorized use of a motor vehicle was driving without consent. Art. 1341, V.A.P.C. In Hutchins v. State, 167 Tex.Cr.R. 595, 321 S.W.2d 880 (1959), and Ex parte Rhoder, 120 Tex.Cr.R. 78, 47 S.W.2d 827 (1932), this Court held that driving without consent was not a lesser included offense of theft. However, the lesser included offense statute has been completely revised since these decisions; thus they do not control the instant case. Compare Art. 37.09, V.A.C.C.P. as amended by Acts 1973, 63rd Leg. P. 968, ch. 399, Sec. 2(A), effective January 1, 1974, and Art. 695, V.A.C.C.P. (1925). See Day v. State, 532 S.W.2d 302 (Tex.Cr.App.1976).
Appellant's ground of error is overruled; the judgment is affirmed.
|
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No. DA 07-0070
No. DA 07-0071
IN THE SUPREME COURT OF THE STATE OF MONTANA
2007 MT 127N
____________________________________
IN THE MATTER OF THE CUSTODY AND
PARENTAL RIGHTS OF M.A. and J.A.,
Youths In Need of Care.
____________________________________
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade, Cause Nos. BDJ 06-111-Y
and BDJ 06-112-Y
The Honorable Julie Macek, Presiding Judge.
COUNSEL OF RECORD:
For Appellant:
Jim Wheelis, Chief Appellate Defender; Joslyn Hunt, Assistant Appellant
Defender, Helena, Montana
For Respondent:
Mike McGrath, Attorney General; Mark W. Mattioli, Assistant Attorney
General, Helena, Montana
Brant S. Light, Cascade County Attorney; Sarah Corbally, Deputy County
Attorney, Great Falls, Montana
____________________________________
Submitted on Briefs: May 16, 2007
Decided: May 31, 2007
Filed:
_____________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(d)(v), Montana Supreme Court 1996 Internal
Operating Rules, as amended in 2003, the following memorandum decision shall not be
cited as precedent. It shall be filed as a public document with the Clerk of the Supreme
Court and its case title, Supreme Court cause number and disposition shall be included in
this Court’s quarterly list of noncitable cases published in the Pacific Reporter and
Montana Reports.
¶2 W.K. appeals from the decision of the Eighth Judicial District Court, Cascade
County, denying her motion for a continuance of her termination hearing and the court’s
order terminating her parental rights to her children, M.A. and J.A. We affirm.
¶3 The Department of Public Health and Human Services (Department) petitioned for
emergency protective services regarding M.A. and J.A. on March 16, 2006. The
Department alleged that W.K. had attempted suicide by ingesting sixty Tegratol pills
while the children had been sleeping. W.K. stipulated at the show cause hearing on April
25, 2006, that probable cause existed for the Department’s petition. The District Court
adjudicated the children as youths in need of care.
¶4 The court held the dispositional hearing on May 4, 2006, at which W.K. was
present. W.K. agreed to a treatment plan. The court approved the treatment plan on May
4, 2006, and ordered W.K. to complete it.
¶5 The treatment plan called for, among other things, that W.K. address her mental
health problems, that she obtain a chemical dependency evaluation and follow its
recommendations, that she maintain a safe home and employment, that she attend and
2
complete anger management classes, that she attend parenting classes, and that she
maintain contact with the children and her social worker during the dependency treatment
plan. The Department petitioned for termination of W.K.’s parental rights in October
2006. The court set a hearing on the Department’s petition for January 11, 2007.
¶6 W.K. failed to appear for the termination hearing and her counsel moved for a
continuance. W.K.’s counsel informed the court that he did not know why W.K. was not
at the hearing, but speculated that W.K. may have been attempting to obtain an
independent psychological evaluation. The District Court denied the motion and
proceeded to the merits of the Department’s petition.
¶7 The Department presented the testimony of a social worker and two mental health
professionals. The District Court determined that W.K. had failed to complete nearly
every portion of her proposed treatment plan and that the continuation of the parent-child
legal relationship likely would result in continued abuse and neglect of the children due
to W.K.’s failure to address and resolve her mental health issues.
¶8 We review a denial of a motion for continuance under an abuse of discretion
standard. State v. Walker, 225 Mont. 415, 419, 733 P.2d 352, 355 (1987). W.K. argues
on appeal that the District Court’s denial of her motion for continuance constitutes an
abuse of discretion in light of the fact that W.K. was in the process of obtaining an
independent psychological evaluation. W.K. contends that she was having difficulty
obtaining an independent psychological evaluation because of her financial constraints.
¶9 We also review a district court’s decision to terminate a person’s parental rights
under an abuse of discretion standard. In re Custody and Parental Rights of C.J.K., 2005
3
MT 67, ¶ 13, 326 Mont. 289, ¶ 13, 109 P.3d 232, ¶ 13. To satisfy the relevant statutory
requirements for terminating the parent-child relationship, a district court must make
specific factual findings. In re C.J.K., ¶ 13. We review a district court’s findings of fact
to determine whether those findings are clearly erroneous. In re Custody and Parental
Rights of M.A.D., 2003 MT 10, ¶ 12, 314 Mont. 38, ¶ 12, 62 P.3d 717, ¶ 12. We review
the court’s conclusions of law with respect to those findings to determine whether the
court correctly interpreted and applied the law. In re M.A.D., ¶ 12.
¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(d), of
our 1996 Internal Operating Rules, as amended in 2003, that provides for memorandum
opinions. It is manifest on the face of the briefs and record before us that the District
Court did not abuse its discretion in denying W.K.’s motion for a continuance. It also is
manifest on the face of the briefs and record before us that substantial evidence supports
the District Court’s findings of fact. Finally, it also is manifest on the face of the briefs
and record before us that settled Montana law clearly controls the legal issues and that the
District Court correctly interpreted the law.
¶11 We affirm the judgment of the District Court.
/S/ BRIAN MORRIS
We Concur:
/S/ KARLA M. GRAY
/S/ PATRICIA COTTER
/S/ W. WILLIAM LEAPHART
/S/ JAMES C. NELSON
4
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13-1873
Thomas v. Social Security Administration
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held
2 at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
3 York, on the 24th day of January, two thousand fourteen.
4
5 PRESENT:
6 Dennis Jacobs,
7 Denny Chin,
8 Christopher F. Droney,
9 Circuit Judges.
10 _____________________________________
11
12 Eugene Thomas,
13
14 Plaintiff-Appellant,
15
16 v. 13-1873
17
18 Social Security Administration,
19
20 Defendant-Appellee.
21 _____________________________________
22
23
24 FOR PLAINTIFF -APPELLANT: Eugene Thomas, pro se, Brooklyn, NY.
25
26 FOR DEFENDANT -APPELLEE: Arthur Swerdloff (Varuni Nelson, Kathleen A.
27 Mahoney, on the brief), for Loretta E. Lynch,
28 United States Attorney, Eastern District of New
29 York, Brooklyn, NY.
30
1 Appeal from a judgment of the United States District Court for the Eastern District of
2 New York (Brodie, J.).
3 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
4 DECREED that the judgment of the district court is AFFIRMED.
5 Appellant Eugene Thomas, pro se, appeals the judgment of the United States District
6 Court for the Eastern District of New York (Brodie, J.) granting summary judgment in favor of
7 the Commissioner of Social Security (“the Commissioner”) on Thomas’ claim under the
8 Freedom of Information Act (“FOIA”), 5 U.S.C. § 552(a). At oral argument in the district court,
9 Thomas additionally complained that the Social Security Administration (“SSA”) improperly
10 appointed a representative payee prior to the issuance of a court order. Construing the pro se
11 complaint liberally, see, e.g., Hughes v. Rowe, 449 U.S. 5, 9-10 (1980), the district court
12 considered this additional claim, and dismissed it for lack of subject matter jurisdiction. We
13 assume the parties’ familiarity with the underlying facts, the procedural history of the case, and
14 the issues on appeal.
15 We review de novo a grant of summary judgment in a FOIA case. See Brennan Ctr. for
16 Justice at N.Y. Univ. Sch. of Law v. U.S. Dep’t of Justice, 697 F.3d 184, 193 (2d Cir. 2012).
17 “Summary judgment is appropriate if there is no genuine dispute as to any material fact and the
18 moving party is entitled to judgment as a matter of law.” Gonzalez v. City of Schenectady, 728
19 F.3d 149, 154 (2d Cir. 2013). When an agency presented with a FOIA request claims that it
20 cannot locate the requested documents, the agency has the burden of showing that it conducted
21 an “adequate” search – that is, a search “reasonably calculated” to produce the requested
22 documents. Weisberg v. U. S. Dep’t of Justice, 745 F.2d 1476, 1485 (D.C. Cir. 1984). Here, the
23 SSA was unable to locate the requested court order notwithstanding multiple searches.
2
1 Moreover, a search of the docket and file associated with Thomas’ guardianship proceedings in
2 the Kings County Supreme Court revealed that no court order had been entered prior to October
3 1, 1999. Because the search was adequate, the district court properly granted summary judgment
4 to the Commissioner.
5 In reviewing the dismissal of a claim for lack of subject matter jurisdiction, we review
6 factual findings for clear error and legal conclusions de novo. Liranzo v. United States, 690 F.3d
7 78, 84 (2d Cir. 2012). The SSA may distribute benefits “for [a beneficiary’s] use and benefit to
8 another individual or entity as the beneficiary’s representative payee.” Wash. Dep’t of Soc. &
9 Health Servs. v. Guardianship Estate of Keffeler, 537 U.S. 371, 376 (2003) (alteration in
10 original) (internal citations omitted). A plaintiff may seek federal judicial review of the SSA’s
11 appointment of a representative payee pursuant to 42 U.S.C. § 405(g) only after presenting the
12 claim to the SSA and exhausting all administrative remedies. See Califano v. Sanders, 430 U.S.
13 99, 101–02 (1977); Smith v. Schweiker, 709 F.2d 777, 779-80 (2d Cir. 1983); 20 C.F.R. §
14 404.981. Because Thomas submitted no evidence that he filed a claim with the SSA and
15 exhausted his administrative remedies, the district court lacked subject matter jurisdiction to
16 review the claim. Schweiker, 709 F.2d at 780.
17 We have considered all of Thomas’ arguments and find them to be without merit.
18 Accordingly, we AFFIRM the judgment of the district court.
19
20 FOR THE COURT:
21 Catherine O’Hagan Wolfe, Clerk
22
23
3
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SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
960
CA 11-00079
PRESENT: SCUDDER, P.J., PERADOTTO, CARNI, GORSKI, AND MARTOCHE, JJ.
FRANKLIN CORPORATION, PLAINTIFF-APPELLANT,
V OPINION AND ORDER
JUSTIN M. PRAHLER, DEFENDANT-RESPONDENT,
ET AL., DEFENDANT.
THE KNOER GROUP, PLLC, BUFFALO (ROBERT E. KNOER OF COUNSEL), FOR
PLAINTIFF-APPELLANT.
MURA & STORM, PLLC, BUFFALO (ERIC T. BORON OF COUNSEL), FOR
DEFENDANT-RESPONDENT.
Appeal from an order of the Supreme Court, Erie County (Gerald J.
Whalen, J.), entered October 22, 2010. The order, insofar as appealed
from, precluded plaintiff from presenting evidence at trial on the
issue of diminished value and denied plaintiff’s request for a jury
charge on that issue.
It is hereby ORDERED that the order insofar as appealed from is
unanimously reversed on the law without costs.
Opinion by MARTOCHE, J.: On this appeal, we are presented with an
issue of damages, namely, whether a plaintiff whose personal property
has allegedly increased in value from the time of its purchase is
limited to recovering the cost of repairs to the personal property
after it has been damaged or whether the plaintiff may seek to recover
the diminution in value of the property. Supreme Court agreed with
defendant that plaintiff was precluded from presenting evidence at
trial on the issue of the alleged diminished value of the property
after repairs had been made to it. That was error, and we therefore
conclude that the order insofar as appealed from should be reversed.
FACTS
Plaintiff was the owner of a 2000 Ford GT (hereafter, GT). On
May 28, 2005, the GT was parked on the east side of Franklin Street in
the City of Buffalo. According to plaintiff, the GT “is a rare
collector’s sports car rapidly appreciating in value.” On the day in
question, Justin M. Prahler (defendant) was driving a 1997 Jeep
Cherokee and had consumed several alcoholic beverages. He was legally
intoxicated when he struck and damaged the GT.
Plaintiff asserted, inter alia, a cause of action for negligence
-2- 960
CA 11-00079
per se against defendant, and it sought $52,000 in damages.
Defendants’ answer is not contained in the record. They subsequently
sought disclosure from plaintiff, and plaintiff responded with several
documents, including a letter from State Farm Insurance (State Farm)
to plaintiff’s counsel advising that, until the vehicle was repaired
and thereafter appraised, State Farm was unable to determine if the
vehicle had diminished in value. Plaintiff also included an estimate
prepared by State Farm indicating that the total cost of repairs for
the vehicle was $3,484.35. Plaintiff disclosed the identity of its
expert appraiser, James T. Sandoro, and it thereafter supplemented its
response and identified Kenneth J. Merusi as another expert appraiser
and Jeff Mucchiarelli as a fact witness.
The record also includes an excerpt from the deposition of Mark
C. Croce, the president of plaintiff. Croce testified that, as of
March 19, 2009, the GT had not been repaired but that it had been
driven approximately 2,500 miles. Plaintiff filed a note of issue on
August 14, 2009, and the matter was scheduled for trial.
Defendant made a motion in limine pursuant to CPLR 3101 and 3106
seeking to preclude plaintiff’s two expert appraisers from “giving
expert opinion testimony” at the damages trial1 and to preclude
Mucchiarelli from testifying. Defendant’s counsel stated in his
affirmation in support of the motion that the expert disclosure of
Sandoro did not contain the specific information required by CPLR 3101
(d) and that, even if plaintiff had provided a “technically sufficient
response” to the expert disclosure demand, Sandoro should be precluded
from providing expert testimony regarding the market value of the GT
before and after the accident because he lacked the requisite skill,
training, education, knowledge and experience to provide a reliable
market value for the vehicle. Defendant’s counsel further stated that
the other expert witness, Merusi, and the fact witness, Mucchiarelli,
should be precluded from testifying because their identities were
disclosed after plaintiff filed the note of issue and the matter was
ready for trial. In addition, defendant’s counsel further stated that
Merusi was not qualified as an expert. Along with the motion,
defendant submitted an affidavit in support of proposed post-trial
jury charges, requesting that the court charge PJI 2:311, entitled
“Damages—Property with Market Value.” The charge states as follows:
“If plaintiff’s . . . automobile . . . was damaged
by the defendant’s negligence, you will award to
the plaintiff as damages the difference between
its market value immediately before and
immediately after it was damaged, or the
reasonable cost of repairs necessary to restore it
to its former condition, whichever is less.
Thus, if the reasonable cost of repairs
1
The court granted plaintiff’s motion for summary judgment on the issue
of liability.
-3- 960
CA 11-00079
exceeds the reduction in market value, you will
award the amount by which the market value was
reduced. If the reasonable cost of repairs is
less than the reduction in market value, you will
award to the plaintiff the reasonable cost of
repairs required to restore the . . . automobile .
. . to its condition immediately before it was
damaged.”
In opposition to the motion and in support of its cross motion in
limine, plaintiff submitted the affidavit of its counsel contending
that Sandoro was qualified as an expert and that defendant did not
make any demand for further information or a motion to compel with
regard to Sandoro, nor did he request any further information with
regard to expert disclosure. Plaintiff’s counsel further averred that
Sandoro was a nationally and internationally recognized expert who had
testified in state and federal courts throughout the country regarding
the market value of automobiles. In addition, plaintiff’s counsel
averred that Merusi was qualified as an expert and that plaintiff
voluntarily disclosed Mucchiarelli as a fact witness without any
requirement that it do so. Mucchiarelli would be testifying with
respect to an estimate prepared by an auto repair shop, which was
provided to defendant as part of discovery, and thus defendant was not
prejudiced by the information that was to be the subject of
Mucchiarelli’s testimony.
Plaintiff also submitted its own proposed post-trial jury
instructions including, as relevant on this appeal, language based on
PJI 1:60:
“In this case the plaintiff claims that it has
suffered damage to its automobile as a result of
the accident caused by the defendant. Plaintiff
further claims that the measure of damages is the
difference between the market value of the vehicle
immediately prior to the accident and the value
after the accident. It is plaintiff’s contention
that even with repairs to return the vehicle to
its pre-loss condition in terms of appearance and
function, this particular vehicle is worth less
after the accident simply because it was involved
in an accident.”
Plaintiff also submitted a proposed instruction on damages,
including a charge that,
“[w]here the repairs do not restore the property
to its condition before the accident, the
difference in the market value immediately before
the accident and after the repairs have been made
may be added to the costs of repairs,”
citing Johnson v Scholz (276 App Div 163, 165). Plaintiff further
requested the following charge:
-4- 960
CA 11-00079
“When, as in this case, the property damaged is a
limited edition collector item[,] the plaintiff
may recover the difference in money between the
market value of the property before and after the
damage. In determining the amount of such loss,
you will consider the evidence presented with
respect to: witnesses experienced in the trade of
the specialized market, testimony as to the market
for such property, the distinction in value
between two similar collector items where one has
been damaged and repaired and one that has never
been damaged and repaired, together with all other
evidence presented to establish the value of the
vehicle and the extent of plaintiff’s damage.”
The court heard argument on the motion and cross motion
immediately before jury selection. In granting the motion, the court
expressed its sympathy for plaintiff’s position, but it concluded that
the case was controlled by the Second Department’s decision in Johnson
and that the
“testimony of repairs is appropriate and testimony
of the value of the car after the repairs are made
-- if there’s a diminution in the value of the car
after the repairs are made -- are the proper
measure of damages to be contemplated by the
finder of fact and specifically not --
specifically not the difference in diminution in
value of the market value of the car, basing the
value of the car before the accident and
immediately after the accident, simply because it
was in an accident . . . .”
The court further concluded that, because its ruling in favor of
defendant limited the proof and issues at trial, it would issue an
order staying the trial pending consideration of this appeal.
DISCUSSION
The issue raised by this appeal is relatively straightforward:
Whether plaintiff is entitled to a jury charge that will permit the
jury to consider diminution in the value of the GT or whether
plaintiff is limited to recovering the cost of repairs. We conclude
that the court erred in limiting plaintiff’s proof at trial with
respect to the diminution in value of the GT and thus that plaintiff
is entitled to the charges it requested on that issue.
Preliminarily, we consider an issue not raised by the parties,
namely, the appealability of the order determining the motion and
cross motion. “Generally, an order ruling [on a motion in limine],
even when made in advance of trial on motion papers[,] constitutes, at
best, an advisory opinion [that] is neither appealable as of right nor
by permission” (Innovative Transmission & Engine Co., LLC v Massaro,
-5- 960
CA 11-00079
63 AD3d 1506, 1507; see Scalp & Blade v Advest, Inc., 309 AD2d 219,
224). “[A]n order that ‘limits. . .’ the scope of the issues at
trial,” however, is appealable (Scalp & Blade, 309 AD2d at 224).
Thus, because the court’s order “has a concretely restrictive effect
on the efforts of plaintiff[] to . . . recover certain damages from
[him] . . ., defendant[’s] motion . . . [is] ‘the functional
equivalent of a motion for partial summary judgment dismissing the
complaint insofar as it sought damages . . . in excess of the damages’
that defendant[] believe[s] are appropriate” (id.).
It is well settled that the purpose of awarding damages in a tort
action is to make the plaintiff whole (see generally Campagnola v
Mulholland, Minion & Roe, 76 NY2d 38, 42). Here, the court relied
heavily on the Second Department’s decision in Johnson. In that case,
the plaintiff’s vehicle, which was being operated by the defendant,
was damaged in an accident (Johnson, 276 App Div at 164). The
plaintiff testified at trial that, prior to the accident, the value of
the vehicle was between $1,750 and $2,000 and that, after the
accident, its value was between $500 and $700. The defendant
testified that, prior to the accident, the value of the vehicle was
$1,600 and that, after the accident, its value was $1,000. Both
parties in Johnson were in the used car business and presumably
competent to testify concerning the value of the vehicle. The
plaintiff also provided the testimony of an expert who opined that the
fair and reasonable value of making the necessary repairs was $600,
while the defendant’s expert testified that the repairs were $419.40.
Additionally, there was evidence that it would take three weeks to
make the repairs, and the defendant conceded that the reasonable
rental value for the use of such an automobile was $9 per day. The
trial court in Johnson awarded the plaintiff $1,050, apparently based
on the difference between the value of the automobile before and after
the accident, inasmuch as the plaintiff’s lowest estimate of value
before the accident was $1,750 and his highest estimated value after
the accident was $700.
The Second Department in Johnson stated that the “measure of
damages for injury to property resulting from negligence is the
difference in the market value immediately before and immediately
after the accident, or the reasonable costs of repairs necessary to
restore it to its former condition, whichever is the lesser” (id.).2
The Court concluded that the difference in market value immediately
before and immediately after the accident was $1,050 and that the
reasonable costs of repairs to restore it to its former condition was
$600 and the loss of use was $189. Thus, the recovery was limited to
$789. The Court further stated that,
2
That proposition ultimately became the basis for PJI 2:311
and, in support of that proposition (Johnson, 276 App Div at
164), the Second Department cited Hartshorn v Chaddock (135 NY
116), a case from 1892 involving the wrongful obstruction of a
stream that led to the flooding of land and the destruction of
personal property.
-6- 960
CA 11-00079
“[w]here the repairs do not restore the property
to its condition before the accident, the
difference in market value immediately before the
accident and after the repairs have been made may
be added to the cost of repairs. But in
[Johnson,] there is no claim that the automobile
could not be fully restored to its former
condition by the repairs contemplated in the
estimate” (id. at 165).
Rather, the only basis for the plaintiff’s claim was that “the resale
value would be diminished because the car had been in an accident”
(id.). The Court stated that “the diminution in resale value [was]
not to be taken into account if the repairs would place the car in the
same condition it was before the accident” (id.).
Although here the court believed that it was constrained by the
decision in Johnson, we conclude that there was no evidence that the
automobile in Johnson had appreciated in value from the time of its
purchase, as plaintiff contends in this case. The automobile here is
more akin to the violin in Schalscha v Third Ave. R.R. Co. (19 Misc
141). In that case, the plaintiff’s violin was damaged by the
negligence of the defendant, and the court concluded that the
plaintiff could recover not only the cost to repair the violin but
also its depreciation in value (id. at 142-143). Here, plaintiff
submitted evidence that, even if the GT was fully repaired, the mere
fact that it had been in an accident had diminished its market value
by $40,000 because it would no longer be in its “original factory
condition.”
The weight of authority supports our conclusion that plaintiff is
entitled to a charge that it may recover the diminution in value of
the vehicle. Restatement of Torts § 928, entitled “Harm [t]o
[C]hattels” and followed by the majority of jurisdictions, provides
that,
“[w]here a person is entitled to a judgment for
harm to chattels not amounting to a total
destruction in value, the damages include
compensation for
(a) the difference between the value of the
chattel before the harm and the value after the
harm or, at the plaintiff’s election, the
reasonable cost of repair or restoration where
feasible, with due allowance for any difference
between the original value and the value after
repairs, and
(b) the loss of use.”
Numerous courts have followed Restatement of Torts § 928 and have
concluded that a plaintiff may recover the reduction in value after
repairs are made (see e.g. American Serv. Ctr. Assoc. v Helton, 867
-7- 960
CA 11-00079
A2d 235, 243-244, 244 n 12 [DC Cir]; Brennen v Aston, 84 P3d 99, 102
[Okla]). Other jurisdictions allow for diminution of market value or
the cost of repairs, but not both (see e.g. Meredith GMC, Inc. v
Garner, 78 Wyo 396, 404-405, 328 P2d 371, 374; Adams v Hazel, 48 Del.
301, 303-304, 102 A2d 919, 920).
Here, plaintiff requested that the jury consider the diminution
in value only and not the cost to repair the vehicle, and we note that
the vehicle apparently has not yet been repaired. The court followed
the holding in Johnson, which, as we noted above, apparently served as
the basis for PJI 2:311, the charge that defendant sought here. That
charge provides that the plaintiff will be entitled to the difference
between the market value of the property immediately before and
immediately after the property was damaged or the reasonable cost of
repairs to restore the property to its former condition, whichever is
less. The other cases cited in support of the charge in the Comment
to PJI 2:311 are not directly apposite. For example, the first case
cited therein, Fisher v Qualico Contr. Corp. (98 NY2d 534, 536-537),
involves losses to the plaintiff’s home as a result of fire and the
issue of collateral source payments and setoffs under former CPLR 4545
(c). The underlying purpose of that statute is to eliminate windfalls
and duplicative recoveries (see Fisher, 98 NY2d at 537). Similarly,
in another Court of Appeals case cited in the Comment to PJI 2:311,
Gass v Agate Ice Cream, Inc. (264 NY 141, 143-144), the plaintiff was
not allowed to recover the cost of repairs to his vehicle where the
cost of repairs exceeded the value of the vehicle at the time of the
accident. Again, the Court’s conclusion was based upon the notion
that a plaintiff is not entitled to a windfall (see id.).
Conversely, there can be no doubt that, under a general theory of
damages, a plaintiff is entitled to be made whole. The situation
presented here is somewhat unusual in that the GT has allegedly
increased in value since the time of purchase, unlike most motor
vehicles that would have diminished in value from the time of purchase
to the time of the accident. Where a vehicle, like any other piece of
personal property, has increased in value and is subsequently damaged
by the negligence of the defendant, the plaintiff should be entitled
to recover the cost of that diminution in value. Otherwise, the
plaintiff will not be made whole. In our view, PJI 2:311 was intended
to cover the situation in Gass (264 NY at 143-144), where personal
property has depreciated from its original market value and is then
damaged by the negligence of the defendant. The plaintiff in such a
case will be entitled to recover the costs of repairs or the
diminution in value, whichever is less.
CONCLUSION
Under the circumstances presented herein, plaintiff is entitled
to the charges sought. Accordingly, we conclude that the order
insofar as appealed from should be reversed.
Entered: November 10, 2011 Patricia L. Morgan
Clerk of the Court
|
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187 F.Supp.2d 499 (2002)
Anthony BLOCKER, Plaintiff,
v.
GIANT FOOD, INC., et al., Defendant.
No. CIV. JFM-02-541.
United States District Court, D. Maryland.
February 20, 2002.
*500 JoAnn Patricia Myles, Largo, MD, for plaintiff.
Robert P. Watkins, Julie Hilden, Kumiki Gibson, Kathleen L. Jennings, Kristin E. Adler, Jeffrey M. Smith, Williams and Connolly LLP, Washington, DC, Mark Scott London, London & Mead, Washington, DC, Claudette V. Ferron, Washington, DC, for defendants.
OPINION
MOTZ, District Judge.
Plaintiff Anthony Blocker has instituted this action against Giant Food, Inc. ("Giant")[1] alleging discrimination on the basis *501 of race under Title VII and § 1981, quantum meruit, discrimination under the Maryland Human Relations Act, intentional infliction of emotional distress and negligent infliction of emotional distress.[2] Defendant now moves for summary judgment on all counts. The motion will be granted.
I.
Blocker was hired by Giant as a vacation relief worker at Giant's Landover, Maryland warehouse in October 1989. He was hired into a permanent position as a produce selector in the Landover warehouse three months later. A produce selector is a warehouse employee who selects produce items from the warehouse to ship to various Giant stores. "[S]ome of the items could be as light as two pounds on up to maybe seventy or eighty pounds." Blocker Dep. at 38. Throughout his employment at Giant, Blocker was a member of the Warehouse Employees Local Union No. 730.
On July 18, 1994, Blocker slipped on the stairs and fell as he left the warehouse during a break. The fall injured Blocker's back, but the next day Blocker saw a physician who released him to work on "modified duty."[3] He was limited to lifting no more than ten pounds. See Med. Certif. dated July 19, 1994, Def.'s Ex. 5. Giant sets out the purpose, eligibility requirements and specifications of its modified duty program in a memorandum that employees must sign to enter the program. Blocker signed this memorandum on July 20, 1994. Def.'s Ex. 1. According to the memorandum, Giant's modified duty program "is designed for associates who are recovering from a temporary disability and are unable to fulfill all of the requirements of their present job." In particular, "it is designed for [employees] whose physicians feel that an early and gradual return to work will facilitate a speedy and total recovery." Id.
From August 15 through August 22, 1994, Blocker took medical leave from Giant. Med. Certif. dated August 15, 1994, Def.'s Ex. 6. Blocker returned to the modified duty program on August 23, 1994 and the next day signed a new memorandum acknowledging the terms of the program. Def.'s Ex. 2. The same day that he signed the memorandum to return to modified duty, Blocker went on medical leave because he was unable to work at all. See Med. Certif. dated August 24, 1994, Def.'s Ex. 9. Blocker did not successfully return to his position after this date. He periodically presented Giant with medical certifications that stated that he was unable to work. On November 14, 1995, Blocker submitted a medical certification that stated "no work 3 months more." Med. Certif. dated November 14, 1995, Def.'s Ex. 20. On December 27, 1995, Blocker attempted to return to the modified duty program, presenting Giant with a medical certification stating that he should lift no more than 15 pounds. See Med. Certif. dated December 26, 1995, Def.'s Ex. 21. Giant refused to let Blocker return to the modified duty program.
*502 While Blocker was unable to work, he was paid disability benefits by Giant's worker's compensation carrier, Kemper Insurance Co. On February 14, 1995, Dr. Antoni B. Goral examined Blocker for Kemper. Dr. Goral concluded that Blocker had a permanent injury and had reached "Maximal Medical Improvement." Let. from A. Goral to B. Green dated Feb. 14, 1995 at 2-3, Def.'s Ex. 12. He concluded that Blocker could "return to a work status which requires no repetitive bending or lifting of greater than twenty five pounds repetitively, for a period of four weeks, after which time he [could] resume a full work status." Id. at 3. In April 1995, Blocker also underwent an Ergonomics Physical Abilities Test designed to replicate the physical requirements of his job. See Dennison Decl. at ¶ 7. After less than two minutes, he had to stop the test due to his medical condition. On May 9, 1995, Dr. Goral examined Blocker again and concluded that Blocker was not "capable of working in an environment which requires prolonged standing, walking or heavy lifting." Let. from A. Goral to B. Green dated May 9, 1995 at 3. On July 10, 1995, Giant's Modified Duty Placement Committee considered Blocker's situation and unanimously recommended that Blocker be removed as a warehouse employee and assisted in locating another less strenuous position at Giant. Dennison Decl. at ¶ 9. On July 17 and August 31, 1995, Giant wrote letters to Blocker informing him of its decision and asking him to contact its employment office regarding reassignment. See Lets. to A. Blocker from R. Crescenzi dated July 17, 1995 and Aug. 31, 1995, Def.'s Ex. 15, 16.
In mid-October 1995, Blocker met with Bea Schlesinger of the Giant employment office. Ms. Schlesinger reviewed with Blocker job opportunities that were available with Giant and Blocker told her that he was either not qualified for them or unable to perform them due to his physical condition. See Blocker EEOC Aff. at 3, Def.'s Ex. 17. On October 27, 1995, Giant informed its insurer, Kemper, of Blocker's meeting with Schlesinger. On October 30, 1995, Kemper terminated Blocker's disability benefits because he refused Giant's reassignment offer. Termination of Temp. Disab. Form dated October 30, 1995, Def.'s Ex. 19.
On January 4, 1996, Blocker filed a new claim with the Worker's Compensation Commission, stating that he had a "[t]emporary total disability from 10/16/95 present and continuing." Worker's Compensation Commission Claim dated Jan. 4, 1996, Def.'s Ex. 23. The Commission awarded Blocker benefits for 30 days from the date of the hearing while Giant tried to place Blocker in a job. Worker's Comp. Comm'n Award dated Feb. 27, 1996, Def.'s Ex. 26. From January through March 1996, Giant attempted to place Blocker in a new job at Giant, see Def.'s Exs. 27-29, and Kemper hired an employment consultant to help Blocker find a job outside of Giant, see Blocker Dep. at 197. Eventually, Blocker ended his relationship with the counselor and Kemper immediately halted his benefits. See Blocker Dep. 202-204.
Blocker filed another Worker's Compensation Commission Claim on November 1, 1996 claiming that he had a permanent injury to his back. Worker's Comp. Comm's Claim dated Nov. 1, 1996. On January 14, 1998, Kemper and Blocker agreed that Kemper would pay Blocker $20,000 to satisfy his Worker's Compensation Claim. The Worker's Compensation Commission approved the settlement on March 30, 1998. Worker's Comp. Comm'n Order dated March 30, 1998.
II.
Blocker has made claims under Title VII and § 1981 of racial discrimination based *503 on disparate treatment and retaliation. For both of these claims, he has not met his burden under the three-part burden shifting scheme of McDonnell Douglas v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).[4] Summary judgment will be granted as to these claims.
A.
Blocker's disparate treatment claim is based on Giant's refusal to allow him to return to light duty on December 27, 1995. In order to establish a prima facie case of racial discrimination based on disparate treatment, Blocker must show that (1) he is a member of a protected class; (2) he was qualified to return to modified duty on that date; (3) he did not get to return to modified duty; and (4) other employees who are not members of the protected class and who were similarly situated were placed in the modified duty program. See Taylor v. Va. Union Univ., 193 F.3d 219, 233 (4th Cir.1999) (en banc). If Blocker establishes a prima facie case, the burden shifts to Giant to advance a legitimate, nondiscriminatory reason for the adverse employment action. See Texas Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 254, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). If Giant successfully proffers such an explanation, the burden returns to the plaintiff to show that the proffered reason is a pretext for impermissible discrimination. See St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 507-08, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993).
Viewing the evidence in the light most favorable to Blocker, he has failed to establish the second and fourth elements of the prima facie case. Giant's modified duty program was for employees who were recovering from temporary disabilities, were expected to return to regular duty within 90 days and whose recovery was likely to be aided by a partial workload. See Def.'s Ex. 1. Blocker did present Giant with a medical certification on December 27, 1995 that stated that he was ready to return to light duty. See Def.'s Ex. 21. However, the certification does not specify how long it would be before Blocker could return to regular duties. Id. In addition, this certification cannot be reconciled with the medical certificate from the same doctor six weeks earlier stating that Blocker could not work for three more months, Def.'s Ex. 20, or Blocker's January 4, 1996 Worker's Compensation claim that states that he had a temporary total disability from "10/16/95 present and continuing," Def.'s Ex. 23. In fact, the report from the physician that completed both medical certificates indicates that he changed his diagnosis only because Blocker requested that he do so. See Pl.'s Ex. 109. Based on the present record, Blocker has failed to show that he was qualified for Giant's modified duty program.
In addition, Blocker has not shown that other employees not in a protected class were given modified duty under similar circumstances. To satisfy this prong of the prima facie case, Blocker relies on several affidavits by warehouse workers. However, these affidavits contain general statements that the workers had seen white employees be on modified duty for more than 90 days. They do not specify the types of injuries the white employees had sustained or their prognosis for returning to regular duty. See Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 962 (4th Cir.1996) (holding that affidavits that are conclusory can not be used to oppose motion for summary judgment). *504 Blocker also submits the produce seniority list and the worker's compensation awards of a number of Giant employees that were injured yet still appear on the list. The awards do not specify the race of the employees, whether they were currently or ever in the modified duty program or whether they were capable of returning to regular duty despite their injuries. This evidence does not show that similarly situated white employees were placed in the modified duty program.[5] Thus, Blocker has not established the fourth element of a prima facie case of disparate treatment.
B.
Blocker's retaliation claim could potentially be based on several different actions by Giant. In his complaint, Blocker claims that Giant ceased worker's compensation payments to him on August 15, 1996, in retaliation for his filing an EEOC discrimination charge on May 7, 1996. Compl. ¶¶ 100, 102. Blocker's reply brief focuses on the claim that Giant terminated him in November 1996[6] in retaliation for filing this suit two months earlier. Pl.'s Reply Br. at 14. In order to establish a prima facie case of retaliation, Blocker must show that: "(1) [h]e engaged in a protected activity; (2) the employer took an adverse employment action against h[im]; and (3) a causal connection existed between the protected activity and the asserted adverse action." Von Gunten v. Md., 243 F.3d 858, 863 (4th Cir.2001). Even if I assume that Blocker is able to establish a prima facie case of retaliation,[7] his claim still fails. Giant has offered legitimate non-discriminatory justifications for its actions and Blocker has not proven that they were merely pretext for retaliation.
Giant has offered legitimate non-discriminatory justifications for both adverse employment actions that Blocker claims were retaliatory. First, Blocker's worker's compensation benefits were terminated because he declined to work with the employment counselor that Kemper had procured for him. See Blocker Dep. at 204 ("The relationship between myself and the counselor was severed. The payments were severed also.") Second, Giant terminated Blocker because it believed he had a permanent injury that precluded warehouse work and Blocker had refused its offers of reassignment to a different position. See Pl.'s Opp'n Br. at 14.
Blocker argues that these non-discriminatory justifications were merely pretext for retaliation because white employees with similar injuries remained in selector positions and were not required to look for *505 jobs outside of Giant with the help of an employment counselor. As discussed above, Blocker has failed to provide specific evidence to support his claim regarding white employees. His argument is also contradicted by his statement in his Worker's Compensation Claim that he was unable to work as a selector. For these reasons, Blocker has not met his burden of showing that Giant's reasons were merely pretext for retaliation. Thus, Blocker's retaliation claim must fail. Settle v. Baltimore County, 34 F.Supp.2d 969, 991 (D.Md.1999) (explaining that the plaintiff bears "the ultimate burden of projecting evidence sufficient to prove that [he has] been the victim[] of discriminatory treatment"); Evans, 80 F.3d at 959 (citations omitted). ("[T]he defendant-employer has an opportunity to present a legitimate, non-discriminatory reason for its employment action. If the employer does so, the presumption of unlawful discrimination created by the prima facie case `drops out of the picture' and the burden shifts back to the employee to show that the given reason was just a pretext for discrimination.")
A separate order is attached.
ORDER
For the reasons stated in the accompanying Opinion and in the related Opinion in the case of Carson v. Giant Food, Inc., JFM-96-2882, it is, this 20th day of February 2002
ORDERED
1. Defendants' motions for summary judgment against Plaintiff on all causes of action in Plaintiff's complaint are Granted; and
2. Judgment is hereby entered in favor of the Defendants.
NOTES
[1] Blocker has also asserted claims against several of Giant's employees. Those defendants are entitled to summary judgment for the reasons stated in the accompanying opinion in Carson v. Giant Food, Inc., JFM-96-2882. That opinion also addresses Blocker's state law claims against Giant, in addition to global arguments made by Blocker and other Plaintiffs concerning the early right-to-sue notices issued to them by the Equal Employment Opportunity Commission. Thus, this opinion focuses on Blocker's disparate treatment and retaliation claims under Title VII and section 1981.
[2] On August 7, 1997, I dismissed Blocker's claims based on §§ 1985 and 1986, the Equal Pay Act and the Americans with Disabilities Act.
[3] Giant used the terms modified duty and light duty interchangeably.
[4] The analysis and result are identical under Title VII and Section 1981. See Gairola v. Va. Dep't of Gen. Servs., 753 F.2d 1281, 1285 (4th Cir.1985) ("Under Title VII and ... § 1981, the elements of the required prima facie case are the same.").
[5] Blocker also attempts to rely on his own statements to establish this element of the prima facie case. However, his statements offer little, if any support, in establishing that similarly situated white employees were treated more favorably. See Blocker Dep. at 79-80 ("[O]n December 27th, 1995 there were white counterparts that I worked with that were on light duty and same injuries or same restrictions or possibly different, I'm not sure because I'm not privy to their medical documentation."); see also Blocker EEOC Aff. at 2 (listing black and white employees who participated in Giant's modified duty program and black and white employees who were denied entry into the program). In addition, mere allegations by Blocker are insufficient to establish a prima facie case. Blocker "is required to identify specific evidence in the record, and to articulate the `precise manner' in which that evidence supported [his] claim." Causey v. Balog, 929 F.Supp. 900, 910 (D.Md. 1996), aff'd, 162 F.3d 795 (4th Cir.1998) (citations omitted).
[6] Blocker does not point to a specific place in the record to indicate when Giant actually terminated him.
[7] Giant argues that the alleged adverse employment action, cessation of Blocker's worker's compensation benefits, was caused by Kemper, not Giant.
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476 F.Supp.2d 163 (2007)
UNITED STATES of America
v.
John M. LUCARELLI.
No. 3:05cr268.
United States District Court, D. Connecticut.
March 8, 2007.
*164 *165 John H. Durham, Michael S. McGarry, Peter S. Jongbloed, U.S. Attorney'S Office, New Haven, CT, for United States of America.
David T. Grudberg, Jacobs, Grudberg, Belt, Dow & Katz, P.C., New Haven, CT, for John M. Lucarelli.
RULING ON MOTION FOR JUDGMENT OF ACQUITTAL OR NEW TRIAL [DOC. # 163]
ARTERTON, District Judge.
Familiarity with the factual and procedural background of this case and the Court's ruling on the pre-trial motions of defendant John M. Lucarelli and his co-defendant Chance Vought, including motions to dismiss, see Ruling on Defendants' Pending Motions [Doc. # 75], is presumed.
On July 28, 2006, the jury returned a verdict finding defendant Lucarelli guilty of one count of conspiracy in violation of 18 U.S.C. § 371 (Count 1) and one count of securities fraud in violation of 18 U.S.C. § 1348 (Count 12), and finding him not guilty on the remaining eight counts of mail and securities fraud, see Verdict Form [Doc. # 128], all in connection with a scheme to illegally obtain shares of New Alliance Bancshares, Inc. ("NAB") through the conversion of the New Haven Savings Bank ("NHSB") from a Connecticut-chartered mutual savings bank to a Connecticut-chartered capital stock savings bank wholly-owned by NAB.[1] The jury was also presented with a Special Interrogatory, asking:
If you find the defendant guilty on any of Counts 2-4 or 7-12, did you find the defendant participated in the fraudulent scheme with the specific intent to defraud:
(a) The Bank of property: YES ____ NO ____
(b) Depositors of money or property: YES ____ NO ____
The jury answered "No" to both (a) and (b) of the Special Interrogatory. Id. at 2.[2]
Before the Court accepted the jury's verdict, colloquy with counsel was held at sidebar to determine how to proceed in light of the jury's special interrogatory answers. Defense counsel advanced the position that "Lucarelli could not have been found guilty here unless he had a specific Lucarelli had a specific intent either to aid or abet Ross in defrauding one or both [the Bank or its depositors]. Lucarelli could not have been found guilty unless he had a specific intent to defraud one or both, whether he aided and abetted or not." 7/28/06 Tr. [Doc. # 154] at 1718. The Court observed that it "did not charge [the jury] with respect to specific intent on aiding and abetting. We charged them only that the aider and abettor must know the crime is being committed and acted in a way which is intended to bring about the success of the criminal venture." Id. Defense counsel pressed that "Lucarelli to be convicted of aiding and abetting had to aid and abet the principal in seeking to defraud either the bank and/or the 2,100 depositors, and if the jury is saying that they are not finding Lucarelli had that specific intent to do either, it cannot convict him of those charges." Id. at 1719. With respect to the conspiracy count, defense counsel also advanced the position that he did not believe Lucarelli could be *166 found guilty unless the jury found he had a specific intent to defraud either the bank or the depositors. Id. at 1720. The Court queried whether it should leave the issue for post-trial briefing or ask for clarification from the jury; defense counsel asked for a judgment of acquittal and stated that "we should take [the verdict] as it is," and the Court ultimately agreed.[3]Id. at 1721-23.
Defendant now moves for a judgment of acquittal or for a new trial, contending, inter alia, that "[t]he jury's finding in response to the special interrogatory that Mr. Lucarelli did not act with specific intent to defraud either the Bank or the depositors, an essential element of both crimes, requires an acquittal on both counts," or, alternatively, that "the contradiction between the jury's answers to the special interrogatory and its general verdict warrants a new trial." See Def. Mot. [Doc. # 163]; Def. Mem. [Doc. # 164]. The Government opposes, contending that the Court's jury instructions were proper and that the jury's special interrogatory answers do not warrant entry of a judgment of acquittal or a new trial. See Gov. Opp. [Doc. # 177]. For the reasons that follow, Lucarelli's motion will be granted and a judgment of acquittal will enter on Count 1 and Count 12.
I. Summary
As noted above, Count 1 of the Indictment charged Lucarelli with conspiracy to commit mail and securities fraud in violation of 18 U.S.C. § 371, while Count 12 charged him with securities fraud in violation of 18 U.S.C. § 1348 in relation to the stock order form submitted by NHSB depositor Linda Morant on March 7, 2004 requesting 70,000 shares of NAB stock.
Following the close of evidence, the Court instructed the jury about criminal liability on the conspiracy count, as well as on the securities and mail fraud counts as both a principal and an aider and abettor. Neither the Court's charge on conspiracy nor on aiding and abetting specifically instructed the jury that it must find proved that Lucarelli acted with a specific intent to defraud the NHSB and/or its depositors in order to find him guilty. However, as the parties now agree (with some equivocation on the Government's part with respect to aiding and abetting), and as detailed more thoroughly below, in order to find Lucarelli guilty of conspiracy to commit mail/securities fraud and/or of aiding and abetting securities fraud, the jury was required to find that Lucarelli had the specific intent to defraud the NHSB and/or its depositors. And, given the jury's finding on the special interrogatories that Lucarelli did not have a specific intent to defraud either the NHSB or its depositors, it can be ascertained that the jury misunderstood, or was not adequately guided by, the instructions on the intent element of Counts 1 and 12.
*167 Although the jury was generally instructed regarding the Government's theory in the Indictment of a "scheme or artifice to defraud by means of false or fraudulent pretenses, representations, or promises (a) the New Haven Savings Bank of its right to control its property, that is, its ability to sell stock shares in the manner that it chose and in compliance with state and federal banking laws, and/or (b) depositors who sought to obtain stock shares but were unable to do so because of the alleged scheme," see Jury Instr. [Doc. # 112] at 39, this instruction was apparently insufficient to carry over to the specific intent element instructions for each crime charged. Thus, considering the Government's burden to prove each legal element of Counts 1 and 12, the jury's special interrogatory answers are tantamount to an acquittal on both counts.
II. Standards
Fed.R.Crim.P. 29 requires a judgment of acquittal on any charge for which there is insufficient evidence to sustain a conviction. "A district court can enter a judgment of acquittal where the evidence is insufficient `only if, after viewing the evidence in the light most favorable to the prosecution and drawing all reasonable inferences in the government's favor, it concludes no rational trier of fact could have found the defendant guilty beyond a reasonable doubt.'" United States v. Hernandez, 02cr341 (EBB), 2006 WL 861002, at *4 (D.Conn. Mar. 31, 2006) (citing United States v. Reyes, 302 F.3d 48, 52 (2d Cir.2002)). When considering a Rule 29 motion, "the court must be careful to avoid usurping the role of the jury." United States v. Guadagna, 183 F.3d 122, 129 (2d Cir.1999). "The court must give `full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact' in determining whether a reasonable mind might fairly conclude guilt beyond a reasonable doubt was established upon the evidence." Hernandez, at *4 (citing Guadagna, 183 F.3d at 129). Thus, "Rule 29(c) does not provide the trial court with an opportunity to substitute its own determination of . . . the weight of the evidence and the reasonable inferences to be drawn for that of the jury." Guadagna, 183 F.3d at 129.
Rule 33 of the Federal Rules of Criminal Procedure, which permits the Court, upon defendant's motion, to "vacate any judgment and grant a new trial if the interest of justice so requires," allows "broad discretion . . . to set aside a jury verdict and order a new trial to avert a perceived miscarriage of justice." United States v. Ferguson, 246 F.3d 129, 133 (2d Cir.2001) (internal quotation omitted). "In exercising the discretion so conferred, the court is entitled to weigh the evidence and in so doing evaluate for itself the credibility of witnesses." United States v. Sanchez, 969 F.2d 1409, 1413 (2d Cir.1992) (internal quotation omitted). Nonetheless, in evaluating the witnesses' testimony:
[T]he judge must examine the totality of the case. All the facts and circumstances must be taken into account. An objective evaluation is required. There must be a real concern that an innocent person may have been convicted. It is only when it appears that an injustice has been done that there is a need for a new trial "in the interest of justice."
Id. at 1414 (emphasis added).
III. Discussion
A. Securities Fraud Conviction (Count 12)
As noted above, the Court's charge to the jury on aiding and abetting did not explicitly instruct that in order to be guilty of aiding and abetting securities or mail fraud, Mr. Lucarelli must have had a specific intent to defraud the NHSB and/or its depositors. Rather, the jury was instructed, *168 inter alia, that "[a]n aider and abettor must know that the crime is being committed and act in a way which is intended to bring about the success of the criminal venture," that he must "participate in the crime charged as something he wished to bring about," that he must "knowingly associate himself with the criminal venture," and that he must "seek by his actions to make the criminal venture succeed." Jury Instr. at 53-54. However, both sides now appear to be in at least marginal agreement that a finding of specific intent to defraud the NHSB and/or the depositors was required for a fraud conviction, even on an aiding and abetting theory: defense counsel made this contention after the charge was given and the case submitted to the jury, in summarizing his objections to the Court's charge; the Government at oral argument on defendant's post-trial motions agreed that the required intent of a principal and an aider and abettor is "essentially," if not "precisely," the same, and admitted that any distinction between the two may be one "without a difference." And, with the 20/20 vision of hindsight, the Court agrees that the defendant's position with respect to the aiding and abetting charge is correct and that the jury's special interrogatory answers illustrate that the charge was insufficiently tailored to the novel circumstances of this prosecution.
The comment to the proposed model jury charge for aiding and abetting in Sand, Modern Federal Jury Instructions Criminal (2006) ("Sand"), states that "[i]n order to associate oneself with the underlying crime, the defendant must have shared the principal's criminal intent." Sand, Instruction 11-2, cmt. at 11-11 (citing, inter alia, United States v. Evans-Garcia, 322 F.3d 110, 114-15 (1st Cir. 2003); United States v. Sayetsitty, 107 F.3d 1405, 1412 (9th Cir.1997) (elements of conviction under an aiding and abetting theory include "that the accused had the specific intent to facilitate the commission of a crime by another" and "that the accused had the requisite intent of the underlying substantive offense")). This position is also supported by Second Circuit authority. For example, in United States v. Wiley, 846 F.2d 150, 154 (2d Cir.1988), the court considered the sufficiency of the evidence to sustain an aiding and abetting wire fraud conviction in connection with an alleged scheme "to attract distributors to sell home energy conservation devices and home security devices" and stated "the government in the instant case had the burden of proving that [defendant] joined the SCS scheme, acted with the specific intent to defraud potential SCS distributors through the use of the wires, and that he contributed to the scheme's success" (emphasis added). Similarly, in United States v. Frampton, 382 F.3d 213, 222-23 (2d Cir.2004), the court considered a defendant's conviction of aiding and abetting the commission of a violent crime in aid of racketeering in violation of 18 U.S.C. § 1959 and stated that "the defendant must act with the specific intent of facilitating or advancing the principal's commission of the underlying crime," and that with respect to the particular crime charged therefore "the burden was on the Government to prove that at the time [the defendant] assaulted [the victim], he knew that [the principal] was seeking to increase his position in the [criminal enterprise] and acted toward that end."
These cases show that the nuanced distinction the Government attempted to draw at oral argument by referring to the more general language of cases such as United States v. Reifler, 446 F.3d 65, 96 (2d Cir.2006), United States v. Samaria, 239 F.3d 228, 235 (2d Cir.2001), and United States v. DeFiore, 720 F.2d 757, 763-64 (2d Cir.1983), for the proposition that an aider and abettor must only act "with the *169 specific purpose of bringing about the underlying crime," Samaria, 239 F.3d at 235, particularly in the context of a specific intent crime such as fraud (conviction of which as a principal requires specific intent to defraud another of money and/or property), is one without a difference. While the language of the cases cited by the Government parallels the essence of the Court's charge, it does not alter the intent proof required and it fails to articulate the required shared intent between aider and abettor and principal.[4] Accordingly, the language of the Court's charge, while technically correct, did not suffice for purposes of adequately guiding the jury in a case such as this one.[5]
Thus it appears that the Court's and the parties' original intent in positing the special interrogatory to the jury to facilitate the Second Circuit's review of what conduct can constitute fraud in the context of a mutual bank conversion case such as this one has ended up having a life beyond this purpose inasmuch as it became the vehicle to reflect the jury's finding that the Government's proof on the element of intent fell short. Given this finding, the appropriate remedy is to set aside the jury's general verdict on Count 12 and enter a judgment of acquittal, rather than to order a new trial, because through the special interrogatory answers the jury memorialized its finding with respect to the element of specific intent to defraud, albeit in a context separate from its consideration of the other elements of securities fraud.
B. Conspiracy Conviction (Count 1)
As with the aiding and abetting charge, the Court's conspiracy charge did not explicitly instruct the jury that it must find that the Government proved that Lucarelli had a specific intent to defraud the NHSB and/or its depositors. Rather, the charge stated, inter alia, that the Government must prove that Lucarelli "knowingly and willfully became a member of the conspiracy" and participated in it "with knowledge of its unlawful purpose and with the specific intention of furthering its business or objective as an associate or worker," defining "willfully" as "to act intentionally, with knowledge that one's conduct is unlawful and with the intent to do something the law forbids, that is to say, to do something with a bad purpose either to disobey or disregard the law," specifically noting that "[t]o act willfully requires a general *170 awareness of illegality, but does not require a defendant to know the specific legal rules or requirements." Jury Instr. at 63-64.
However, after review of the parties' briefing and oral argument on the necessity of a "specific intent to defraud" finding for a conspiracy conviction, the Court is convinced that such a finding is an essential element of a charge of conspiracy to commit securities and/or mail fraud and, given the special interrogatory answers, it is clear that the jury did not find such an intent proved here.[6] While the Sand Instructions 19-3 and 19-6 cited by defendant do not support this conclusion, as they track the charge given by the Court, other authority specifically relating to conspiracy to commit specific-intent crimes such as fraud does support the conclusion that a finding of specific intent to defraud is a necessary element of a conviction of conspiracy to commit securities or mail fraud.[7] Second Circuit case law teaches that for a defendant to be convicted of conspiring to commit a specific intent crime, the Government must prove "that the defendant had specific intent to violate the substantive statute," United States v. Ceballos, 340 F.3d 115, 124 (2d Cir.2003); Samaria, 239 F.3d at 234, and "that the intended future conduct [the conspirators] agreed upon includes all elements of the substantive crime," United States v. Pinckney, 85 F.3d 4, 8 (2d Cir.1996), which in this case would thus include the specific intend to defraud. See also United States v. Forcada, 206 Fed.Appx. 969, 2006 WL 3406541, at *2 (11th Cir.2006) (rejecting defendant's argument of insufficient evidence for conviction of conspiring to commit health care fraud where there was circumstantial evidence sufficient to permit a jury to infer "that the defendant acted with the specific intent to defraud"); United States v. Peterson, 244 F.3d 385, 389 (5th Cir.2001) (holding that for conspiracy charge, the Government was required to "prove the same degree of criminal intent as is necessary for proof of the underlying substantive offense" and noting defendants' arguments that "there was insufficient evidence of the required intent to defraud"); United States v. Rahseparian, 231 F.3d 1257, 1262 (10th Cir.2000) (noting "[defendant] argues the evidence is insufficient to show he knew [defendants' company] was defrauding its customers, an essential element of both the mail fraud and conspiracy alleged in this case") (emphasis added).
Accordingly, while it is unfortunate that this issue was not explicitly recognized and decided before the jury was charged, the special interrogatory answers make clear that the jury found no specific intent to defraud either the NHSB or its depositors and, applying the correct legal formulation of the elements of conspiracy to commit securities/mail fraud including specific intent to defraud it would be a miscarriage of justice to convict Lucarelli on Count 1 and thus a judgment of acquittal on this count will enter.
IV. Conclusion
For the foregoing reasons, defendant's Motion for Judgment of Acquittal or New *171 Trial [Doc. # 163] is GRANTED and a judgment of acquittal shall enter on Count 1 and Count 12.
IT IS SO ORDERED.
NOTES
[1] Co-defendant Chance Vought, and Robert Ross and George Kundrat, pled guilty to various crimes related to this scheme.
[2] As this was the first prosecution of alleged fraud in the context of a mutual bank conversion such as this, the Court and the parties crafted this special interrogatory as a way of teeing up for the Second Circuit's consideration the issue, previewed in defendants' motions to dismiss, of what constitutes fraud and who must be proved to have been defrauded in such a case, as well as for potential determination of applicable sentencing guidelines.
[3] The Government's suggestion that defendant has waived any request for a new trial based on defense counsel's preference to take the verdict "as it is" is not persuasive as defense counsel raised his claim of an internally inconsistent verdict and articulated his justification for requesting a judgment of acquittal before the verdict was accepted, agreeing to reserve the issue for post-trial briefing. Cf. generally Fed.R.Civ.P. 51(b) ("A party may preserve a claim of error by informing the court when the court ruling or order is made or sought of the action the party wishes the court to take, or the party's objection to the court's action and the grounds for that objection."); Kosmynka v. Polaris Indus., Inc., 462 F.3d 74, 82-83 (2d Cir.2006) (defendant's objection to inconsistency in negligence verdict was preserved for appeal when court entered verdict over defense counsel's request for a mistrial); United States v. Rivera, 192 F.3d 81, 84 (2d Cir.1999) (defendant-appellant preserved objection by "fairly alert[ing] the district court and the government to the nature of his claim").
[4] The Court does not find persuasive the Government's other attempts to explain the jury's special interrogatory answers. As to the Government's argument that "in returning a general verdict of guilty on Count 12, the jury necessarily found that Lucarelli did have specific intent to defraud or else they could not have returned a verdict of guilty for Count 12," Gov't Opp. at 16, this contention cannot be accurate because, as just described, the Court's instruction on aiding and abetting liability did not explicitly state that a finding of specific intent to defraud the NHSB and/or its depositors was required for conviction. The Government's reference to United States v. Edelkind, 467 F.3d 791, 795 (1st Cir.2006), is thus inapposite because in that case the jury was instructed as to all essential elements of bank fraud, notwithstanding that the special interrogatory omitted reference to one of those elements. The Government's argument that the jury may have applied a different definition of "property" in answering the special interrogatories than in applying the Court's instructions to the substantive counts, Gov't Opp. at 15-16, is speculative and contrary to the assumption that juries follow the instructions given to them, see Richardson v. Marsh, 481 U.S. 200, 211, 107 S.Ct. 1702, 95 L.Ed.2d 176 (1987).
[5] This case is an example of how generalized language from case law and standardized model charges, absent adequate tailoring, may be insufficient in novel or otherwise unusual cases, notwithstanding that neither of the parties requests a more specialized charge, as was the case here (indeed, Lucarelli did not submit any proposed charge on aiding and abetting).
[6] The Government's argument that "[t]he jury returned a verdict of guilty as to Count One and accordingly they necessarily found each of the elements of Count One to be present," Gov't Opp. at 24, is unpersuasive because, as just described, the jury was not explicitly instructed that specific intent to defraud the Bank and/or its depositors was an essential element of the conspiracy charge.
[7] The Government did not dispute this general legal proposition in its briefing or at oral argument, but rather appears to argue that the charge given somehow communicated this requirement to the jury, which it demonstrably did not do as the jury convicted defendant of conspiracy notwithstanding its finding of no specific intent to defraud either the NHSB or its depositors.
|
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 14-1235V
Filed: March 31, 2015
Unpublished
****************************
VINCENT J. CHRISTIANCY, *
*
Petitioner, * Ruling on Entitlement; Concession;
* Trivalent Influenza or Flu Vaccine;
* Shoulder Injury Related to Vaccine
SECRETARY OF HEALTH * Administration; SIRVA; Special
AND HUMAN SERVICES, * Processing Unit
*
Respondent. *
*
****************************
Matthew Menzer, Esq.,Menzer Law Firm, PLLC, Seattle, WA for petitioner.
Lara Englund, Esq., U.S. Department of Justice, Washington, DC for respondent.
RULING ON ENTITLEMENT1
Vowell, Chief Special Master:
On December 24, 2014, Vincent J. Christiancy filed a petition for compensation
under the National Vaccine Injury Compensation Program, 42 U.S.C. §300aa-10, et
seq,2 [the “Vaccine Act” or “Program”]. Petitioner alleges that he suffered a shoulder
injury which was caused by the trivalent influenza vaccination he received on October
16, 2013. Petition at 1-2, 6. The case was assigned to the Special Processing Unit of
the Office of Special Masters.
On March 30, 2015, respondent filed her Rule 4(c) report in which she agrees
that “petitioner’s alleged injury is consistent with a shoulder injury related to vaccine
administration (SIRVA) . . . [and] petitioner’s SIRVA was caused-in-fact by the flu
vaccination he received on October 16, 2013.” Respondent’s Rule 4(c) Report at 3.
1 Because this unpublished ruling contains a reasoned explanation for the action in this case, I intend to
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 (codified as amended at 44 U.S.C. § 3501
note (2006)). In accordance with Vaccine Rule 18(b), petitioner has 14 days to identify and move to
redact medical or other information, the disclosure of which would constitute an unwarranted invasion of
privacy. If, upon review, I agree that the identified material fits within this definition, I will redact such
material from public access.
2National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755. Hereinafter, for
ease of citation, all “§” references to the Vaccine Act will be to the pertinent subparagraph of 42 U.S.C. §
300aa (2006).
Respondent further agrees that petitioner’s injury lasted for more than six months and
no other cause for petitioner’s injury was identified. Id. at 3-4.
In view of respondent’s concession and the evidence before me, I find that
petitioner is entitled to compensation.
s/Denise K. Vowell
Denise K. Vowell
Chief Special Master
2
|
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|
705 F.2d 451
Barfieldv.Knott County Bd., of Educ.
82-5272, 82-5273
UNITED STATES COURT OF APPEALS Sixth Circuit
9/7/82
1
E.D.Tenn.
APPEALS DISMISSED
|
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|
624 P.2d 481 (1981)
MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, a Colorado Corporation, Plaintiff and Appellant,
v.
The DEPARTMENT OF PUBLIC SERVICE REGULATION, Montana Public Service Commission et al., Defendants and Respondents.
No. 80-99.
Supreme Court of Montana.
Submitted January 12, 1981.
Decided February 5, 1981.
Rehearing Denied March 4, 1981.
*482 Hughes, Bennett, Kellner & Sullivan, Helena, J. Walter Hyer, III, argued, Denver, Colo., for plaintiff and appellant.
Calvin K. Simshaw, argued, M.P.S.C., Helena, James C. Paine, Montana Consumer Counsel, Helena, John Allen, argued, Consumer Counsel, Helena, for defendants and respondents.
HASWELL, Chief Justice.
This is an appeal by Mountain States Telephone & Telegraph Company (Mountain Bell) from a judgment of the District Court in a utility rate case. The Montana Public Service Commission (PSC) granted Mountain Bell an annual rate increase totalling $3,097,000 as compared to the $11.83 million sought. The District Court concurred. We affirm.
Mountain Bell petitioned the PSC for utility rate increases that would generate $11.83 million additional yearly revenues from its Montana customers. PSC granted interim rate increases of $2,326,000 pending its final decision which are not at issue in this appeal. PSC's final order granted Mountain Bell an annual revenue increase of $3,097,000 in increased charges for its services to its Montana customers.
Mountain Bell petitioned the District Court of Lewis and Clark County for judicial review of PSC's final order pursuant to the Montana Administrative Procedures Act. Subsequently Mountain Bell elected to proceed under Montana Public Utilities Act (Section 69-3-401, MCA et seq). The District Court's pretrial order narrowed the issues to two: (1) PSC's application of the "double leverage" adjustment in determining the cost of capital in Mountain Bell's rate base, (2) PSC's "NARUC" tax adjustment.
The District Court received the transcript of proceedings before the PSC, heard additional evidence, and remanded the case to the PSC for reconsideration on the basis of the additional evidence. The PSC reconsidered, affirmed its previous final order, and returned the case to the District Court. The District Court affirmed PSC's final order holding (1) that the "double leverage" concept was lawful, was applied within the statutory authority of the PSC, and was supported by substantial evidence, and (2) that the "NARUC" tax adjustment was within the statutory authority of the PSC and was supported by substantial evidence.
Mountain Bell appealed from the judgment of the District Court, abandoning the issue of the "NARUC" tax adjustment.
The sole issue on appeal is the legality of PSC's "double leverage" adjustment in determining the cost of capital in Mountain Bell's rate base.
Before considering the arguments of Mountain Bell, an understanding of the capital structure of Mountain Bell and its parent company, AT&T is necessary. The "double leverage" adjustment, as applied here, is premised on the PSC's consideration of the parent-subsidiary financial relationship and its effect on the cost of capital in Mountain Bell's rate base.
It is a basic principle of utility regulation that a utility is entitled to receive a fair and reasonable rate of return on its investment in plant and equipment used to provide its services to the public. In determining a fair and reasonable rate of return, it is necessary to determine what it costs the utility to secure the required capital to finance its operations. This "cost of capital" approach to utility ratemaking involves determining the composite cost of the several types of the utility's capital, properly weighted on the basis of an appropriate *483 capital structure. New England Telephone & Telegraph Co. v. Public Utility Commission (1978), Me., 390 A.2d 8, 32. The "cost of capital" involves not only the interest the utility must pay on its borrowed capital (debt), but also the cost of attracting purchasers of its common stock (equity). A regulatory commission such as the PSC must authorize utility rates sufficient to cover the utility's cost of debt and cost of equity, but no more, or the utility's customers will be paying excessive rates for the services the utility provides.
In this case Mountain Bell's capital structure as reflected in its books indicates that it is funded 44.65% by borrowed funds (debt) and 55.35% by sale of its common stock (equity). Because Mountain Bell is partially financed by debt and partially financed by equity, Mountain Bell's common stockholders are said to be "leveraged" to the extent that the cost of its debt is less than the (weighted) cost of its capital. In other words, Mountain Bell's common stockholders are "leveraged" because Mountain Bell is paying less interest on its borrowed funds than the return it makes on the use of its borrowed funds. This is leverage # 1.
But in this case there is a second or "double leverage" enjoyed by the common stockholders of AT&T arising out of the parent-subsidiary relationship between AT&T and Mountain Bell. When this case was heard by the PSC, AT&T owned 88.55% of the common stock of Mountain Bell, with the balance being held by minority stockholders. Thus the common stockholders of AT&T are "double leveraged": first, because the cost of debt in AT&T's capital structure is less than the return it makes on the use of its borrowed funds; and second because it derives the benefit of similar leverage in Mountain Bell's own capital structure by reason of its 88.55% ownership of Mountain Bell's common stock.
The PSC found that if the "cost of capital" in Mountain Bell's rate base was considered in isolation without regard to the "double leverage" enjoyed by AT&T's common stockholders, it would result in an excessive return to AT&T's common stockholders at the expense of Montana utility ratepayers. To correct this inequity, the PSC applied a "double leverage" adjustment in determining the "cost of capital" in Mountain Bell's rate base.
In summary form, the PSC applied the "double leverage" adjustment in this manner:
(1) PSC determined that the capital structure of Mountain Bell was composed of 45.65% debt (borrowed funds) and 55.35% equity (common stock) as reflected in its books.
(2) PSC determined that an 11.25% return on the capital invested in Mountain Bell was a fair and reasonable rate of return.
(3) PSC determined that if Mountain Bell had been funded in the open market the weighted cost of Mountain Bell's capital would have been 9.47%, figured as follows:
% of Weighted
Type of Capital Capitalization Cost Cost
Debt 44.65% X 7.26% = 3.24%
Common Stock 55.35% X 11.25% = 6.23%
_______ _____
100.00% 9.47%
(4) PSC determined that 88.55% of Mountain Bell's equity is owned by AT&T whose weighted cost of capital is 9.86% figured as follows:
% of Weighted
Type of Capital Capitalization Cost Cost
Debt 23.1% X 6.47% = 1.49%
Preferred Stock 8.0% X 7.82% = .63%
Common Stock 68.8% X 11.25% = 7.74%
_____
9.86%
(5) PSC determined that 88.55% of Mountain Bell's equity should be sourced to AT&T because it owned 88.55% of Mountain Bell's stock; and AT&T's cost of capital of 9.86% should be applied to such 88.55%. The remaining 11.45% of Mountain Bell's equity held by minority stockholders was allowed a capital cost of 11.25%.
(6) PSC determined that the composite weighted cost of capital to Mountain Bell was 8.78% based on the following computation:
*484
% of Weighted
Type of Capital Capitalization Cost Cost
Debt 44.65 X 7.26% = 3.24%
Equity supplied 49.01 X 9.86% = 4.83%
by AT&T
(88.55% x 55.35%)
Equity supplied 6.34 X 11.25% = 0.71%
by minority _____
stockholders
(11.45% x 55.35%) 8.78%
The use of 8.78% as the weighted cost of capital of Mountain Bell will result in a return of 10.01% to its minority stockholders rather than the 11.25% found to be a fair and reasonable return by the PSC. The District Court held this inequity was the result of the capital structure of AT&T and Mountain Bell rather than the PSC's rate order. The District Court pointed out that the PSC's function was fulfilled when it established a fair and reasonable rate of return on the utility's investment regardless of how the utility's management distributed that return among its stockholders.
Mountain Bell advances three principal arguments against the PSC's application of the "double leverage" adjustment in determining the cost of capital in Mountain Bell's rate base: (1) that it is not supported by substantial evidence, (2) that the "double leverage" adjustment as applied by the PSC is inconsistent within itself, ignoring the very principles on which it is based, and (3) it is premised on a disregard of applicable law in that the minority stockholders will not receive the return on their investment found to be fair and reasonable by the PSC.
At the outset we note that Mountain Bell's third argument is now moot. The minority stockholder's interests in Mountain Bell have been purchased by AT&T. Mountain Bell is now a wholly-owned subsidiary of AT&T.
Mountain Bell contends first that PSC's use of the "double leverage" adjustment must be set aside as unsupported by substantial evidence. Mountain Bell urges that the uncontradicted evidence shows that Mountain Bell's capital structure appropriately consists of 44.65% debt, but by use of the "double leverage" adjustment, the PSC raised Mountain Bell's debt ratio to 55.99%, without an analysis of the effect on the cost of equity. The addition of 11.34% debt into the capital structure must be accompanied by a change in the cost of equity, in order to provide a return to equity reflecting the increased risk. The result is a substantial understatement of Mountain Bell's revenue requirements a result which is contrary to the financial principles relied on by the parties, according to Mountain Bell.
The evidence presented by the PSC established to the satisfaction of the district judge that the "double leverage" adjustment was based on substantial evidence. The District Court found that the double leverage adjustment simply established the true cost of that portion of Mountain Bell's equity (common stock) attributable to AT&T's financing (88.55%). The PSC established 9.86% as the true cost by weighing the three associated costs making up AT&T's capital structure debt, preferred stock and common stock. Contrary to what Mountain Bell asserted, this adjustment did not infuse additional debt into Mountain Bell's capital structure. The earnings of Mountain Bell will be subject to the same debt obligations regardless of the source of the equity investment. There is no increase in the financial risk nor any change in the priority of the Mountain Bell stockholders' claim to the assets or income of Mountain Bell. Therefore, the Mountain Bell stockholders are not entitled to a greater rate of return because the risk of the stockholders has not been increased. Here the return to the stockholders of Mountain Bell capital is influenced because the capital structure of the consolidated Bell System has varying amounts of debt in the capital structure of both AT&T and Mountain Bell, not because the "double leverage" adjustment has increased the risk to stockholders in Mountain Bell.
We note that the "double leverage" adjustment has previously been recognized by regulatory commissions in situations involving a parent and a wholly-owned subsidiary: Re General Telephone Company of Wisconsin (1960), 34 PUR3d 497, 515-519; Re Hawkeye State Telephone Co. (1974), 2 PUR4th 166, 180-181; Re United Telephone *485 Co. of New Jersey (1974), 2 PUR4th 299, 307-310; Re Midstate Telephone Co., Inc. (1975), 10 PUR4th 88, 95-96; Re Continental Telephone Co. of Minnesota, Inc. (1976), 14 PUR4th 310, 315-317; Re Blackstone Valley Electric Company (1978), 24 PUR4th 309, 321-323. It has been recognized but denied application in the only appellate decision cited involving a parent corporation owning 86% of the stock of the subsidiary. New England Telephone & Telegraph Co. v. Public Utilities Commission, supra, Me., 389 A.2d at 39-43. That case is clearly distinguishable, in that the Maine Commission failed to adequately consider the effect of "double leverage" on both the majority and minority shareholders so as to enable the court to determine the reasonableness of the result; additionally the method of applying double leverage by the Maine Commission was not supported by substantial evidence and was inconsistent with the Commission's own declaration concerning the "double leverage" concept. None of these factors is present in the instant case.
The District Court found that "the application of `double leverage' does not cause an increase in financial risk and there is, therefore, no increase in the cost of equity" and "there being no change in priorities [the priority of claims of Mountain Bell stockholders to the assets and income of Mountain Bell] there is no change in financial risk and no change in the cost of equity." (Bracketed material inserted.)
We hold that the PSC's order was lawful and was supported by substantial evidence. Accordingly, we affirm the District Court on this issue mindful of our role in reviewing cases under the Montana Public Utilities Act (sections 69-3-401, MCA et seq.).
Our review in utility rate cases is limited to determining whether the PSC order (1) exceeds the constitutional or statutory powers of the PSC or (2) is based upon a mistake of law. Cascade County Consumer's Ass'n v. PSC (1964), 144 Mont. 169, 192, 394 P.2d 856, 868. The Commission is the judge of the facts and the court only decides questions of law. New England Telephone & Telegraph Co. v. Public Utilities Commission, supra, Me., 390 A.2d at 15. In deciding questions of law, this Court may determine whether the PSC acted arbitrarily and unreasonably without sufficient evidence to support its findings, or exercised its authority unreasonably, or set the utility rates so low that they are confiscatory and deprive the utility of its property without due process of law. Cascade County Consumers Ass'n v. PSC, supra. This Court on appeal cannot substitute its judgment for that of the PSC. State v. Public Service Comm. (1957), 131 Mont. 272, 280-281, 309 P.2d 1035, 1040.
Mountain Bell next contends that the "double leverage" adjustment applied by the PSC is inconsistent with itself and understates Mountain Bell's revenue requirements in part by ignoring the principles on which the "double leverage" adjustment is based. Mountain Bell argues that the principle on which the "double leverage" adjustment is based is that the source of funds determines its cost; that the PSC applied its "double leverage" adjustment to retained earnings as well as to paid-in capital of Mountain Bell; that PSC misapplied the principle on which the "double leverage" adjustment is based because the source of the retained earnings is not AT&T but the assets, income, and capital structure of Mountain Bell; in so doing PSC sourced 88.55% of Mountain Bell's retained earnings to AT&T and applied AT&T's overall cost of capital to those retained earnings. This is inconsistent with the principle that the source of funds determines its cost, is unsupported by any evidence, and is totally arbitrary and illogical, according to Mountain Bell.
The PSC argued to the District Court that the true source and ultimate destination of 88.55% of Mountain Bell's retained earnings is AT&T. The cost of capital associated with 88.55% of Mountain Bell's retained earnings is 9.86% (the cost of capital to AT&T) because that is the cost of capital associated with that portion of Mountain Bell's operating assets that generated those *486 retained earnings. If Mountain Bell retains a portion of its earnings these are no less the capital of AT&T than paid-in capital. PSC further emphasized that no court or commission has accepted Mountain Bell's argument that the source of retained earnings is the subsidiary and not the parent which controls its stock, or that a distinction should be made between cost of capital attributable to paid-in capital and that attributable to retained earnings.
Consumer Counsel agreed that the retained earnings are a reinvestment by the stockholders of Mountain Bell in the company. Consumer Counsel pointed out that before Mountain Bell's board of directors (controlled by AT&T by reason of its majority stock ownership) ever retained part of its earnings they were available to Mountain Bell's stockholders as dividends. Thus the source of 88.55% of Mountain Bell's retained earnings is AT&T which has complete control over Mountain Bell's board of directors and thus complete control over whether its earnings are retained by Mountain Bell or paid out as dividends. Accordingly, the PSC properly included retained earnings in the equity investment of AT&T in Mountain Bell and applied AT&T's cost of capital to its entire equity investment in Mountain Bell.
The District Court adopted the reasoning of Basil L. Copeland, Jr., in his article "Double Leverage One More Time," 100 Public Utilities Fortnightly 19, in finding in favor of the PSC:
"... the cost of equity is the same whether the equity was raised in the capital market or exists in the form of retained earnings. If a subsidiary retains a portion of its earnings, the earnings it retains are no less the capital of the parent than the capital recorded on its accounts as `paid in'!"
The District Court held that because retained earnings are the property of the equity owner (AT&T to the extent of its 88.55% ownership of Mountain Bell's common stock) it had a claim against 88.55% of Mountain Bell's retained earnings. Therefore the PSC correctly applied its "double leverage" adjustment in order to reflect the true cost of capital associated with that portion of Mountain Bell's retained earnings attributable to the parent AT&T.
The record in this case shows substantial, though conflicting, evidence supporting the PSC's application of the "double leverage" adjustment. The district judge based his findings on that evidence, and we will not overturn him.
In sum, the District Court held that PSC's concern was to determine a rate base which represents the total investment in property used and useful in rendering utility services and to multiply that by a rate of return sufficient to generate enough earnings to make the return on investment fair and reasonable. The District Court further held that PSC's function is fulfilled when it determines such total investment and a rate of return which will afford a reasonable return on that investment.
This is a correct statement and the evidence shows that the PSC acted reasonably and within the bounds of the law. It would appear that the PSC applied the "double leverage" adjustment in order to protect Montana ratepayers from paying excessive utility rates. A fair overall rate of return to all stockholders on their investment was fixed and determined, but because the capital structure of AT&T afforded double leverage to the common stockholders of AT&T their rate of return on their investment in Mountain Bell would always be greater than the minority stockholders in Mountain Bell regardless of what rate of return might be adopted by the PSC. This discrepancy is inherent in the capital structure of the parent AT&T vis-a-vis the capital structure of the subsidiary Mountain Bell. This capital structure was determined by the management of the two companies, not by the rate order of the PSC. The PSC's function was fulfilled when it established a fair and reasonable return on Mountain Bell's investment in plant and equipment used and useful in furnishing its services to the public. It is a function of management to distribute that return to its stockholders and if Mountain Bell's *487 capital structure prevents an equitable distribution, this is not the fault of the PSC. To guarantee the minority stockholders the 11.25% return found to be fair and reasonable by the PSC would result in an unconscionable and excessive return of 14.26% to AT&T common stockholders at the expense of Montana ratepayers, all because of the capital structure of the two companies. This inequity will not recur in the future as Mountain Bell is now a wholly-owned subsidiary of AT&T with no minority stockholders in Mountain Bell.
Affirmed.
MORRISON, HARRISON, SHEEHY, DALY and WEBER, JJ., and MARK P. SULLIVAN, District Judge,[*] concur.
NOTES
[*] Sitting for SHEA, J.
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452 F.2d 510
Fed. Sec. L. Rep. P 92,971
Irving GOTTLIEB et al.,v.SANDIA AMERICAN CORPORATION (formerly known as SandiaAmerican Development Corporation), Appellant in 18400 and18956, and Sigmund Goldblatt, Bernard L. Frishman, PaulineI. Wechsler, Dr. Herbert Wechsler, Joseph L. Nellis, WallaceAgnew, James Roosevelt, individualy and as the officers anddirectors of Sandia American Corporation (formerly known asSandia American Development Corporation), and NathanWechsler, individually and as agent for Sandia AmericanCorporation (formerly known as Sandia American DevelopmentCorporation).Appeal of Nathan WECHSLER, Individually and as Agent forSandia American Corporation, in Nos. 18530 and 18957.
Nos. 18400, 18530 and 18956-18957.
United States Court of Appeals,Third Circuit.
Argued Jan. 26, 1971.Decided March 15, 1971.Rehearing Denied April 15, 1971.Certiorari Denied Nov. 9, 1971.See 92 S.Ct. 274.
Pace Reich, Modell, Pincus, Hahn & Reich, Philadelphia, Pa., for appellants.
William R. Pomerantz, Philadelphia, Pa., for appellees.
Before HASTIE, Chief Judge, and ALDISERT and GIBBONS, Circuit Judges.
OPINION OF THE COURT
ALDISERT, Circuit Judge.
1
The corporate and individual appellants challenge the civil judgment of the district court, sitting without a jury, awarding damages for violations of Rule 10b-5, 17 C.F.R. Sec. 240.10b-5 and the Securities Exchange Act, 15 U.S.C. Sec. 78j(b). They contend that the complaint against Sandia American Corporation should have been dismissed for want of in personam jurisdiction, and that the lower court erred both in finding a violation of the regulation or statute and in calculating the resultant damages.
2
The United States Marshal served copies of the summons and complaint upon the individual defendant, but made a return of "not found" as to the corporation.1 An answer filed in behalf of all defendants set forth the defense of lack of service as to the corporation. At a hearing on this issue, the court ordered additional time in which to perfect service on the corporate defendant, but the plaintiffs did not attempt a second service. Instead they rested on the contention that service on the individual defendant, Nathan Wechsler, also constituted valid service on the corporation. They emphasized that although Wechsler was not an officer or director of the corporation, he was a controlling stockholder, and that the written agreement covering the transactions which generated the present litigation listed Wechsler's office address as the place to which notices to the corporation should be sent:
3
Luke C. MooreUnited States Marshal.
4
By /s/ William H. BeckerDeputy.
5
Luke C. MooreUnited States Marshal.
6
By /s/ William H. BeckerDeputy.
7
Notices. All notices, requests, demands and other communications hereunder shall be in writing, and shall be deemed to have been duly given if delivered or mailed, * * * to the purchaser [Sandia American] at 1420 K St., N.W., Washington, 5, D.C.
8
At a second hearing on the motion to dismiss for insufficient service, the district court ruled that there had been valid service upon the corporation. It reasoned that service on Wechsler amounted to service on the corporation because (a) Wechsler had been the "negotiating agent for the defendant corporation" in the business transaction, (b) his address was the same as that specified in the agreement for sending notices to the corporation, and (c) "there were sufficient contacts on the part of the parties to this transaction to confer jurisdiction on this Court."
9
We disagree with this analysis and result. It is necessary to emphasize that the issue here is not one of constitutional due process, but one of compliance with the Federal Rules of Civil Procedure. Therefore, the question of "sufficient contacts" is simply not relevant. For the corporate service to be valid, it must qualify in theory and in fact under Rule 4(d) (3):
Service shall be made as follows:
10
Upon a domestic * * * corporation * * * by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process * * *.
11
Because Wechsler was not an officer or an agent authorized by appointment or by law to receive service of process, the plaintiffs had the burden of proving that his position was that of "managing or general agent."2
12
The determination whether an individual is "a managing or general agent" depends on a factual analysis of that person's authority within the organization. 2 Moore's Federal Practice p 4.22. One occuping this position typically will perform duties which are "sufficiently necessary" to the corporation's operations. Goldberg v. Mutual Readers League, Inc., 195 F.Supp. 778, 783 (E.D.Pa.1961). He should be "a responsible party in charge of any substantial phase" of the corporation's activity, Remington Rand, Inc. v. Knapp-Monarch Co., 139 F.Supp. 613, 621 (E.D.Pa.1956); Lone Star Package Car Co. v. Baltimore & Ohio R.R., 212 F.2d 147, 152 (5 Cir. 1954). In brief, it is reasonable to expect that such an agent will have broad executive responsibilities and that his relationship will reflect a degree of continuity. See Aquascutum of London, Inc. v. S. S. American Champion, 426 F.2d 205 (2 Cir. 1970); see also Young v. Albert Pick Hotels, 126 U.S.App.D.C. 155, 375 F.2d 331 (1967). Authority to act as agent sporadically or in a single transaction ordinarily does not satisfy this provision of the Rule. Zhemeck v. J. H. Winchester & Co., 23 F.R.D. 8 (E.D.Pa.1958). Holland v. Parry Navigation Co., 7 F.R.D. 471 (E.D.Pa.1947).
13
The district court characterized Wechsler as a "transactional agent" instead of the "managing or general agent," and our independent examination of the record does not persuade us that Wechsler was shown to occupy the status designated by Rule 4(d) (3). Indeed, plaintiffs offered no testimony to support the validity of the service. Thus, the record before us is limited to the pleadings which constituted the sole record before the district court at the time the issue was decided.3 Those pleadings show that the agreement between the parties was signed by the president and the secretary of Sandia American and not by Wechsler. The complaint did not aver that Wechsler was a managing or general agent, but simply "an agent for SANDIA and authorized by SANDIA to negotiate the acquisition of WORLD WIDE." The defendants' answer denied that Wechsler "was anything but tax counsel in negotiating the exchange of the stock."
14
The transfiguration of service on Wechsler into a valid service on the corporation is made even more difficult by the facts reported on the marshal's return. Wechsler was not served as an agent of the corporation, but as an individual defendant.4 Moreoever, the summons and complaint to be served on the corporation were returned "not found" by the marshal, even though an attempt to find an officer or agent was made at Wechsler's office. What the marshal reports as "not found," no court may, without evidentiary or legal support, "find."5
15
A duly organized business corporation enjoys an identity separate and apart from its stockholders, directors, and officers. Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727 (3d Cir. 1970). The law's recognition of this separate identity is the very concept which has stimulated and encouraged the development and proliferation of corporations in the business community. Historically, a corporation was held incapable of legal "existence" outside the state whose laws chartered it. The modern view is that a corporation "exists" anywhere it is doing business and that it may there be amendable to valid service.6 But to say that a corporation may be served wherever it is doing business is not to conclude that service on any corporate personnel is of itself valid service on the corporation. The applicable Federal Rule provides that valid corporate service can be effected only if certain designated personnel are served, viz, an officer or qualified agent thereof.
16
Moreover, the Rules distinguish between service of one in his individual capacity, Rule 4(d) (1), and service of one as a representative of a corporation 4(d) (3). An individual may be served "personally or by leaving copies [of the summons and complaint] at his dwelling house or usual place of abode with some person of suitable age and discretion then residing therein." But there is no provision under Rule 4(d) (3) for substituted service on the corporation's representative. Copies of the summons and complaint must be delivered to the officer or agent.7
17
To prove valid service, it was incumbent upon plaintiffs to show that Wechsler was a managing or general agent for the corporation and that he was served in a representative rather than individual capacity. They have failed on both counts in carrying their burden of proof. It appearing that the corporate appellant was not properly served, that it did not submit to the court's jurisdiction by an affirmative act of submission or by conduct, Fed.R.Civ.Pro. 12(h), and that it timely asserted a challenge to jurisdiction of the court over its person first by answer and then by motion under Fed.R.Civ.Pro. 12(b), we hold that the complaint against it should have been dismissed.
18
The correctness of the judgment against the individual appellant turns on the validity of the district court's finding of a violation of Section (b) of Rule 10b-5, 17 C.F.R. Sec. 240.10b-5:
19
It shall be unlawful for any person * * * (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. * * *
20
The court found a misstatement or omission of material fact in a December 31, 1961, consolidated financial statement of Sandia American Corporation. The corporation, principally through Wechsler, acquired assets of World Wide Corporation in exchange for Sandia American stock. Plaintiff-appellees, formerly stock and debenture holders of World Wide, alleged that Sandia American's execution of $784,000 in promissory notes to a third corporation was not reflected in the financial statement or otherwise communicated to them prior to consummation of the agreement, and that there was, therefore, a misrepresentation of the true value of the Sandia American's stock at the time they agreed to take it in exchange for their World Wide holdings.
21
The defense responded that this particular obligation was not Sandia American's, but that of subsidiary corporations. The short answer to this is that the December 31, 1961, statement purported to be a consolidated financial statement of the subsidiary as well as parent corporations.8 Because the combined assets were listed, it follows that combined liabilities should also have been disclosed.
22
The second prong of the defense argument is that there was no showing by plaintiffs that they relied on the financial statement. We find a sufficient nexus between the misstatement and the purchase to meet the statutory test of the Securities and Exchange Act, 15 U.S.C. Sec. 78j(b):
23
It shall be unlawful for any person * * * (b) to use or employ, in connection with the purchase or sale of any security * * * any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.9
24
The test is satisfied "whenever a device was employed 'of a sort that would cause reasonable investors to rely thereon, and, in connection therewith, so relying, cause them to purchase or sell a corporation's securities,' SEC v. Texas Gulf Sulphur Co. [401 F.2d 833, 860 (2 Cir. 1968)]." Heit v. Weitzen, 402 F.2d 909, 913 (2 Cir. 1968). See City National Bank of Fort Smith, Ark. v. Vanderboom, 422 F.2d 221, 229 (8 Cir. 1970); SEC v. North American Research & Development Corp., 424 F.2d 63, 82 (2 Cir. 1970); Royal Air Properties, Inc. v. Smith, 312 F.2d 210, 212 (9 Cir. 1962).
25
Moreover, liability is not limited to the corporation but extends also to any person associated with the corporation who withholds material information concerning the value of the corporation's stock. 15 U.S.C. Sec. 78j(b); 17 C.F.R. Sec. 240.10b-5. Appellant Wechsler was the negotiating agent for Sandia American in the transaction with the plaintiffs. He was the senior partner of the accounting firm which prepared the consolidated financial statement of Sandia American and subsidiary companies, the controlling stockholder of the parent corporation, and a partner in Star Associates, the operating company for Sandia American's subsidiaries. His actions clearly came within the pale of the regulation and the statute.
26
Both parties to this appeal object to the award of $50,000.00 damages. Because appellees did not lodge a cross-appeal, their argument as to insufficiency will not be considered. We have concluded that the district court gave full and proper consideration to the damage issue. Recognizing the complexity of this issue, the court appointed a special master who fashioned a formula of compensation. Although the question of proper damages is not free from difficulties, we believe that the court did not err. See J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964).
27
The judgment against Sandia American Corporation will be reversed and the complaint against it dismissed. The judgment against the individual appellant will be affirmed.
1
The returns of the marshal as to appellant Nathan Wechsler and the corporate defendant, Sandia American:
I hereby certify and return that I served the annexed Summons-Complaint(Writ) on the therein-named Nathan Wechsler(Individual, company, corporation, etc.) by handing to and leaving a true and correct copy there of with him(Individual or agent of company, corporation, etc.) personally at 1420 K. St-NW(Address-Street number, apartment number, rural route, etc.) at Washington, D.C. (City) (State) in the said District at 1:00 p.m. on the 12 day of Aug. 1963.
I hereby certify and return annexed Summons-Complaint(Writ) on the thereinnamed Sandia American Corp. (Individual, company, corporation, etc.) not to be found in my district-no agt or office at 1420 K. St-NW to serve(Individual or agent of company, corporation, etc.) at 1420 K. St-NW(Address-Street number, apartment number, rural route, etc.) at Washington, D.C. (City) (State) in the said District at 3:00 p.m., on the 6 day of Sept. 1963.
2
Wirtz v. Mercantile Stores Co., 271 F.Supp. 830 (E.D.Okl.1967); Dominguez v. National Airlines, Inc., 42 F.R.D. 35 (S.D.N.Y.1966). See Smeltzer v. Deere & Co., 252 F.Supp. 552 (W.D.Pa.1966); Rutter v. Louis Dreyfus Corp., 181 F.Supp. 531 (E.D.Pa.1960)
3
The service was held valid by a different member of the court than the judge who presided at trial
4
Significantly, plaintiffs have not challenged the integrity of the marshal's return on the theory that the marshal failed to follow directions to serve the corporation through its putative managing or general agent, Wechsler. Rather, they rely on the concept that service on Wechsler as an individual was also service on the corporation because he was, in fact, the corporate agent who negotiated their transaction
5
See Rutter v. Louis Dreyfus Corp., supra note 2: although a marshal's return is not conclusive on the question of service on an agent, it will stand in the absence of proof to the contrary. 181 F.Supp. at 533
6
Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945)
7
Service under this part of the rule cannot be made, as it may be made on individuals pursuant to Rule 4(d) (1), by leaving a copy of the summons and complaint at the officer's or agent's dwelling house or usual place of abode with a person residing therein. And, generally speaking, the process cannot be left with someone at the officer's or agent's office
4
Wright & Miller, Federal Practice and Procedure, Civil, Sec. 1101 at 384 (1969)
See Tyson v. Publishers Co., 223 F.Supp. 114, 115 (E.D.Pa.1963); Bard v. Bemidji Bottle Gas Co., 23 F.R.D. 299, 302 (D.Minn.1958); In re Eizen Furs, Inc., 10 F.R.D. 137 (E.D.Pa.1950).
8
Sandia American had entered into contractual obligations to purchase bowling centers from the third corporation on February 18 and March 15, 1961, wherein it obligated itself to substantial financial commitments. The agreement provided that Sandia American could set up subsidiaries which could execute promissory notes and that in case of default, the selling corporation would "hold Sandia harmless" and look only to the assets of the designated subsidiary. Sandia American set up a subsidiary in 1961 under the name Star Associates to purchase leaseholds for other subsidiaries of Sandia American and to assume obligations thereunder. As of December 31, 1961, the selling corporation had not accepted Star Associates on the notes executed pursuant to the February and March agreements, nor had it released Sandia American from liability under the agreements
9
Rule 10b-5, 17 C.F.R. Sec. 240.10b-5 provides:
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.
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26 Cal.App.3d 774 (1972)
103 Cal. Rptr. 275
ALBERT H. ALLEN et al., Plaintiffs and Appellants,
v.
HOUSTON I. FLOURNOY, as State Controller, Defendant and Respondent.
Docket No. 39117.
Court of Appeals of California, Second District, Division One.
July 18, 1972.
*777 COUNSEL
Allen, Fasman & Janger and Eugene J. Weiss for Plaintiffs and Appellants.
Myron Siedorf, Walter H. Miller and Edwin Rosenthal for Defendant and Respondent.
*778 OPINION
CLARK, J.
At the time of her death, Sadie Phelps was a joint tenant with Albert and Marian Allen (husband and wife) of bank accounts in the amount of $14,135.38. She also owned property valued at her death at $1,074.25 which she bequeathed to Mrs. Allen by will. Mrs. Allen, however, did not receive this bequest because claims against the estate consumed all but $300 of the probate estate and the $300 was applied by the executor (Mr. Allen)[1] to the inheritance tax which is in question in this proceeding.
Following customary procedures in the probate of a decedent's estate, an inheritance tax appraiser was appointed who filed a report. (1) Upon the death of a joint tenant to a bank account, there is a transfer subject to inheritance tax if the surviving joint tenant did not acquire his interest for "an adequate and full consideration in money or money's worth." (Rev. & Tax. Code, § 13671.) The inheritance tax appraiser, being then unaware of the claim now made by the Allens that they gave consideration for their joint tenancy interests, determined the funds in the bank accounts were subject to inheritance tax in the amount of $1,403.54.
Upon the filing of the inheritance tax report, the clerk of the superior court gave the notice prescribed by statute, i.e., "by causing a notice to be posted at the courthouse in the county where the court holds its sessions" and by mailing "a copy of the notice to each person chargeable with any tax in the report who has appeared in the probate proceeding." (Rev. & Tax. Code, § 14508.) Only Mr. Allen received a copy of the notice by mail. No objection having been filed within the time allowed by law, the court by order of 13 May 1969 confirmed the report and fixed the tax at $701.77 for Mr. Allen and $701.77 for Mrs. Allen. (Rev. & Tax. Code, § 14509.) (2) Such an order "has the force and effect of a judgment in a civil action." (Rev. & Tax. Code, § 14672.)
On 13 October 1970, when the order of 13 May 1969 was (if valid) no longer subject to attack in the probate proceeding, the Allens filed a complaint in the superior court, seeking a declaration that the order was invalid and requesting an opportunity to contest their liability for inheritance taxes. This appeal is taken from a judgment of dismissal after the Allens failed to amend their complaint when a second general demurrer thereto was sustained.
*779 (3) The amount of and liability for a tax is determined preliminarily by some agency of the government, but before the liability becomes final and irrevocable, the taxpayer must be given some opportunity to question his liability before a competent tribunal, judicial or quasi-judicial. (Nickey v. Mississippi (1934) 292 U.S. 393 [78 L.Ed. 1323, 54 S.Ct. 743]; People v. Skinner (1941) 18 Cal.2d 349 [115 P.2d 488, 149 A.L.R. 299].)
Defendant controller asserted below and asserts here that when the order became final, the Allens were precluded from questioning their liability for the taxes levied upon them. This is true, however, only, if, first, the probate court had the power to fix the tax and, secondly, if the Allens were afforded an opportunity before the order was made to urge their claim that they gave consideration for the joint tenancy interest.
(4a) As to Mr. Allen in his individual capacity, we conclude the court had no power to fix the tax. The appraiser is empowered by "the superior court having jurisdiction in probate of the estate of any decedent" to determine and report on the value of, and the tax on, property subject to inheritance tax where the transfer is "from the decedent to any person sharing in the estate, whether the property transferred is in the estate or not." (Rev. & Tax. Code, § 14501; italics added. See also Rev. & Tax. Code, § 14506 for similar language.) (5) Although "estate" is defined as the equivalent of "property" (Rev. & Tax. Code, § 13303), it is obvious that the word "estate" is not interchangeable with the word "property" in the language quoted from the statute and it is equally obvious that the word "estate" in the statute refers only to the property which is in the probate estate. (4b) Thus, if Mr. Allen had shared in the probate estate, which he did not, the tax on the non-probate transfer to him could have been determined in the probate proceeding. This is the way the Supreme Court read a predecessor statute when it said: "This provision of the statute refers to a situation such as that presented by the record in this case where the children all took property by virtue of the probate proceedings as well as by the [non-probate] transfer [in contemplation of death]." (Estate of Pauson (1921) 186 Cal. 358 [199 P. 331].)
(6) An "estate tax" is levied on the right to transmit property, while an "inheritance tax" is levied on the right to received property. (Estate of Hyde (1949) 92 Cal. App.2d 6 [206 P.2d 420].) The "transferee of the property in respect to the transfer of which the tax is imposed" is liable for payment of the tax. (Rev. & Tax. Code, § 14101.) To prevent situations from arising where transferees liable for inheritance taxes escape *780 payment, there are elaborate statutory provisions freezing transferred assets of the transferees in the hands of third persons until inheritance taxes are determined and paid. The joint tenancy bank accounts in this case, for example, were frozen at the death of the decedent (Rev. & Tax. Code, § 14345) and a lien was created on the money in the accounts (Rev. & Tax. Code, § 14301).
(7) Either the Controller (Rev. & Tax. Code, § 14531) or Mr. Allen (Rev. & Tax. Code, § 14551) could have petitioned the superior court to ascertain the latter's liability for the tax. This is the appropriate method for resolving the tax liability when the decedent, as here, "leaves an estate in which the property transferred is not included and the transferee does not share [in the estate]." (Rev. & Tax. Code, § 14652.) In the absence of such a petition, the court in the probate proceeding had jurisdiction to determine the inheritance tax only for a transfer "to any person sharing in the estate." (Rev. & Tax. Code, § 14651.) Mr. Allen could also have brought an action against the state (not the Controller) to "secure a determination that [the money in the bank accounts] is not subject to any lien for nor chargeable with any [inheritance] tax...." (Rev. & Tax. Code, § 14571.) Such an action is properly brought "in the superior court which has ... jurisdiction of the administration of the estate of the decedent who transferred the property." (Rev. & Tax. Code, § 14654.) This provision serves to further emphasize that not all inheritance tax liabilities are determinable in the probate proceedings.
(8) Mr. Allen's complaint contains the essence of allegations for an action under both section 14571 and section 14654 of the Revenue and Taxation Code, but in form it is neither a petition to the court nor an action against the state. Because neither the defendant nor the court below pointed out these deficiencies and because matters should, if possible, be determined on their merits, we reverse the judgment as to Mr. Allen to permit him to amend his complaint within 30 days of the filing of the remittitur in accordance with one or both of the statutory provisions referred to above.
As to Mrs. Allen, the court in the probate proceedings was empowered to fix the tax because she shared in the probate estate. Assuming, as we must, the truth of Mrs. Allen's allegation that she personally received no notice of the filing of the inheritance tax appraiser's report, the question is whether either service of notice on the executor or posting it in the courthouse was sufficient notice for the court to acquire jurisdiction over her.
(9) We think posted notice is clearly insufficient under Mullane v. *781 Central Hanover Tr. Co. (1950) 339 U.S. 306 [94 L.Ed. 865, 70 S.Ct. 652], at least when the whereabouts of the person sought to be made a party are as readily ascertainable as they were here. Whether such posted notice might be constitutionally adequate in some other situation we need not here decide.
Mrs. Allen's husband was both the executor of the will and the attorney for himself as executor. He received a mailed notice of the filing of the inheritance tax appraiser's report. We will assume, although we do not because we need not decide, that notice to him was constitutionally adequate.[2] We know of no principle of law under which notice to Mr. Allen (whether as husband, executor or attorney for the executor) may be construed as notice to Mrs. Allen as to her non-probate property, which was the only subject of the inheritance tax fixed by the order of the court in the probate proceeding.[3]
If constitutionally adequate notice were required by section 14508, but had been mistakenly omitted in this case, we could simply reverse as to Mrs. Allen and let matters rest there. On the other hand, if the statute fails to require notice to Mrs. Allen, an indispensable party to that portion of the proceedings in which inheritance taxes were fixed, then the statutory scheme permitting entry of judgment against her is unconstitutional and we must so declare.
(10) Clearly, section 14508 did not require notice to Mrs. Allen. It requires notice only to those persons chargeable with tax who have appeared in the probate proceeding. To appear in an action, one must answer, demur, file a notice of motion to strike or give written notice of appearance (Code Civ. Proc., § 1014), or perform some other act by which he intentionally submits himself to the jurisdiction of the court *782 for the purpose of obtaining a ruling or order which is to his benefit or to the detriment of another and which goes to the merits of the case. (Brown v. Douglas Aircraft Co. (1958) 166 Cal. App.2d 232 [333 P.2d 59]; Gulick v. Justice's Court (1929) 101 Cal. App. 619 [281 P. 1031].) While it is true that Mrs. Allen was initially appointed coexecutor, this did not constitute an appearance in the capacity of defendant any more than the appearance by an attorney on behalf of a client constitutes an appearance on his own behalf. Furthermore, Mrs. Allen had been dismissed from the proceeding prior to the filing of the appraiser's report and section 14508 cannot reasonably be read to require notice to one who has once appeared but who is no longer a party. The statutory plan under which the challenged tax was imposed on Mrs. Allen is therefore unconstitutional.[4]
The constitutional difficulty with which we are confronted here arises not from section 14508 alone, but from the combination of the jurisdictional provisions of sections 14501 and 14509 (permitting determination of and imposition of liability for taxes chargeable to all persons who share in the estate) and the notice provisions of section 14508 (requiring actual notice to only a portion of the class taxable under section 14501). However, while we are compelled to declare the statutory plan unconstitutional, we need only excise a portion of section 14508 to enable the plan to pass constitutional muster: "... and shall mail a copy of the notice to each person chargeable with any tax in the report who has appeared in the probate proceedings."
In the usual case, the mailing address of the person sought to be taxed will be available to the tax appraiser (or, as the statute now reads, the referee). When the address is not available, the rule of reasonableness recognized in Mullane v. Central Hanover Tr. Co., supra i.e., that constructive service is adequate as to persons "whose interests or whereabouts *783 could not with due diligence be ascertained" (339 U.S. at p. 317 [94 L.Ed. at p. 875]) will provide satisfactory guidance to the inheritance tax referee and to the clerk of the court.
(11) Each of the sections under which we have said Mr. Allen may litigate his tax liability (Rev. & Tax. Code, § 14551 or § 14571) requires that no other inheritance tax proceeding be pending in any court in the state. That requirement was clearly satisfied in Mr. Allen's case, as we have seen, and it is met with respect to Mrs. Allen as well. The order purporting to fix Mrs. Allen's tax liability constituted a civil judgment (Rev. & Tax. Code, § 14672) and was subject to the same rules on appeal as any other civil judgment (Rev. & Tax. Code, § 14671). When this action was filed, the inheritance tax portion of the probate proceeding was long concluded and the time for taking an appeal from the order purporting to impose tax liability on Mrs. Allen was long past. There was therefore no proceeding pending in which her tax liability could be determined, and she must be given the same opportunity to amend her complaint as Mr. Allen. The sufficiency shall be determined by the same standards applying to him.
We note finally that the alleged consideration given by the Allens (care for and attention to the decedent) ordinarily would not exempt the transfer from taxation (Rev. & Tax. Code, § 13645), but apparently with respect to a joint tenancy (Rev. & Tax. Code, § 13671) the rule inexplicably is different.
The judgment is reversed and the cause is remanded for further proceedings consistent with the views expressed herein. Each party shall bear his own costs.
Lillie, Acting P.J., and Thompson, J., concurred.
A petition for a rehearing was denied August 11, 1972, and respondent's petition for a hearing by the Supreme Court was denied September 13, 1972.
NOTES
[1] Mrs. Allen was initially appointed coexecutor but was dismissed from that capacity earlier in the proceeding by her request.
[2] The notice required by statute, and that given in many if not most counties, is simply that the inheritance tax appraiser has filed his report. (Rev. & Tax. Code, § 14508.) "As the [United States Supreme Court] stated, `[I]t is not what notice, uncalled for by the statute, the taxpayer may have received in a particular case, that is material, but the question is whether any notice is provided for by the statute.' Nor can extra official or casual notice, or a hearing granted as a matter of discretion, be deemed a substantial substitute for the due process that the Constitution requires...." (People v. Broad (1932) 216 Cal. 1 [12 P.2d 941].) Since "`the notice must apprise the party whose rights are to be affected, of what is required of him, and the consequences that may follow if he neglect[s] to [object to the report]'" (Pousson v. Superior Court (1958) 165 Cal. App.2d 750 [332 P.2d 766]), we question whether the statutory notice is constitutionally adequate in content.
[3] We question the validity of the holding in Lennefelt v. Cranston (1964) 231 Cal. App.2d 171 [41 Cal. Rptr. 598] that an executor is the agent with respect to inheritance tax questions for all those who are taxed on what they take by the will. See also Estate of Whelan (1969) 1 Cal. App.3d 517 [81 Cal. Rptr. 753]. But here Mrs. Allen was not taxed on what she took by the will and the cited cases are inapposite.
[4] It will also be noted that there is a possible construction of the statutory scheme which would avoid the constitutional difficulty. As already noted, sections 14501 and 14509 of the Revenue and Taxation Code permit the appraiser to appraise and the superior court to impose a tax on the basis of property transferred from a decedent to any person sharing in the estate, even when the property is not in the estate itself. But section 14508, although it speaks in terms of notice, may be interpreted as limiting the power of the court and the appraiser by permitting the imposition of tax only with respect to property passing to persons who have both shared in the estate and have appeared in the probate proceeding, since only they will receive adequate notice and only they will be subject to jurisdiction of the court. But we cannot accept this construction. In the first place, if the Legislature had intended to limit the jurisdiction of the court and the appraiser in the suggested manner, the limitation would more logically be stated in section 14501 rather than in section 14508. Secondly, such construction would render meaningless the statutory scheme for determining and imposing tax as a part of the probate proceeding, since the proportion of transferees who appear in probate proceedings is small.
|
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15‐3743
ALVERNEST KENNEDY,
Plaintiff‐Appellant,
v.
CHARLES A. HUIBREGTSE and KENNETH ADLER,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 2:13‐cv‐00004‐WCG — William C. Griesbach, Chief Judge.
____________________
ARGUED JULY 6, 2016 — DECIDED JULY 27, 2016
____________________
Before POSNER, SYKES, and HAMILTON, Circuit Judges.
POSNER, Circuit Judge. The plaintiff, an inmate of a Wis‐
consin state prison, filed this in forma pauperis suit against the
defendants, who are prison doctors, in federal district court.
The suit alleges deliberate indifference to the plaintiff’s med‐
ical needs, in violation of 42 U.S.C. § 1983, and also medical
malpractice in violation of Wisconsin law. A Latin phrase, in
forma pauperis means “in the character or manner of a pau‐
per” and entitles an indigent to sue without having to pay
2 No. 15‐3743
the full court fees or costs in advance, though if he is not ut‐
terly penniless he can be required to make partial payment.
28 U.S.C. §§ 1915(a), (b).
In the course of the district court proceedings the de‐
fendants learned that in seeking permission to litigate in for‐
ma pauperis the plaintiff had failed to disclose that he had
approximately $1400 in a trust account outside the prison.
On the basis of that information the defendants successfully
moved the district judge to dismiss the suit pursuant to
28 U.S.C. § 1915(e)(2)(A), which states that “the court shall
dismiss the case at any time if the court determines that …
the allegation of poverty is untrue.” The dismissal was with
prejudice, thus barring the plaintiff (if we affirm) from refil‐
ing, as he could do had the dismissal been without preju‐
dice, provided the statute of limitations had not run.
A curious feature of the appeal is that it does not chal‐
lenge the decision to dismiss the case with rather than with‐
out prejudice. At oral argument the appellant’s lawyer did
suggest that dismissal without prejudice would have been a
more appropriate sanction, but he did not develop the ar‐
gument and in any event it came too late, not having been
briefed. See, e.g., Veluchamy v. FDIC, 706 F.3d 810, 817 (7th
Cir. 2013). The reason for the bobble appears to have been
the lawyer’s erroneous belief (corrected too late) that a
three‐year statute of limitations governs the suit and that a
dismissal without prejudice would therefore “have the same
impact as a dismissal with prejudice, as the Wisconsin stat‐
ute of limitations for [the plaintiff’s] claims has expired.”
Only it hasn’t for one of his claims; the statute of limitations
for section 1983 claims in Wisconsin is six years, not three,
Reget v. City of La Crosse, 595 F.3d 691, 694 (7th Cir. 2010);
No. 15‐3743 3
Malone v. Corrections Corporation of America, 553 F.3d 540, 542
(7th Cir. 2009), and therefore a newly filed suit under section
1983 would be timely because the alleged malpractice oc‐
curred within the last six, though not the last three, years.
Wisconsin’s three‐year statute of limitations would, howev‐
er, bar the plaintiff’s other claim, the one for medical mal‐
practice. See Wis. Stat. § 893.55(1m).
We might forgive the lawyer’s error if we thought the
judge should have dismissed the plaintiff’s suit without
prejudice. But the decision to dismiss with prejudice was
proper. In seeking permission to appeal in forma pauperis the
plaintiff had had to fill out a form that asked him to “state
the total amount of cash and the average monthly balance in
all checking, savings, prison, or other accounts during the
last six months.” He stated: “approximately $10.00,” and ac‐
cordingly requested that the full amount of the filing fee be
deducted from his inmate “release savings account,” which
in Wisconsin is a prison account that contains funds general‐
ly available to the inmate only upon his release from prison.
Wis. Administrative Code DOC §§ 309.02(18), 309.466(2).
They can however be used to pay filing fees if a court so or‐
ders, State ex rel. Coleman v. Sullivan, 601 N.W.2d 335, 337–38
(Wis. App. 1999), and the federal district judges in Wisconsin
allow this for suits filed in their courts as well. See, e.g.,
Spence v. McCaughtry, 46 F. Supp. 2d 861, 863 (E.D. Wis.
1999).
The plaintiff had $726 in his release account. The district
judge allowed him to proceed in forma pauperis and assessed
an initial partial filing fee of $149 to be paid from the ac‐
count. See 28 U.S.C. § 1915(b)(1). The judge also recruited a
lawyer to assist the plaintiff with a discovery dispute, be‐
4 No. 15‐3743
cause if the plaintiff’s representation of his assets was correct
he could not afford to hire a lawyer.
But in the course of pretrial discovery the defendants
learned that about a year before filing suit the plaintiff had
begun recouping child‐support payments from his ex‐wife.
A lawyer friend of his named Joshua Levy had created and
managed a trust account for the plaintiff outside the prison
into which the recouped moneys were deposited. The ac‐
count had a balance of about $1400 when the plaintiff ap‐
plied for leave to proceed in forma pauperis—not the “approx‐
imately $10” that he had claimed was all the money he had
in “all checking, savings, prison, or other accounts.”
Although he claims that because he eventually paid the
full filing fee from his release fund his failure to disclose the
trust account was much ado about nothing, the district judge
disagreed. With the release fund generally available to an
inmate only upon his release from the prison, the plaintiff
had no right to use the account to pay his filing fee when his
trust account was ample to pay it. It’s true that even when
the amount of the money in his trust fund is added to the
money in his prison release fund and his general prison ac‐
count, the total amount of his assets was only slightly in ex‐
cess of $2000, a sum consistent with poverty. But this is mis‐
leading because the prison provides prisoners with food,
clothing, shelter, medical care, and protection (albeit often
spotty) against criminal assault, making the plaintiff’s entire
$2000+ available to finance his lawsuit. Of course a suit for
deliberate indifference and medical malpractice is bound to
require a much greater expense than that to be winnable, but
the plaintiff could (and did) ask the judge to recruit counsel
for him and the judge did so, even though he lacked a com‐
No. 15‐3743 5
plete picture of the plaintiff’s financial situation. The judge
could also have appointed a neutral expert witness under
rule 706 of the Federal Rules of Evidence, but the case was
dismissed before such an appointment was made. See
Dobbey v. Mitchell‐Lawshea, 806 F.3d 938, 941 (7th Cir. 2015);
Rowe v. Gibson, 798 F.3d 622, 631–32 (7th Cir. 2015).
Although the district judge might have granted the plain‐
tiff’s in forma pauperis petition even if he’d disclosed his sep‐
arate trust account, hiding assets is not a permissible alterna‐
tive to seeking the judge’s assistance. An applicant has to tell
the truth, then argue to the judge why seemingly adverse
facts (such as the trust fund in this case) are not dispositive.
A litigant can’t say, “I know how the judge should rule, so
I’m entitled to conceal material information from him.”
The appeal thus is doomed by 28 U.S.C. § 1915(e)(2)(A),
which provides that “notwithstanding any filing fee, or any
portion thereof, that may have been paid, the court shall
dismiss the case at any time if the court determines that …
the allegation of poverty is untrue.” That is an exact descrip‐
tion of this case; and even if, as some cases suggest, a plain‐
tiff can be excused if his misstatements were made in good
faith, Lee v. McDonald’s Corp., 231 F.3d 456, 459 (8th Cir.
2000); Matthews v. Gaither, 902 F.2d 877, 881 (11th Cir. 1990),
this is not such a case, involving as it does a deliberate, ma‐
terial lie. In Thomas v. General Motors Acceptance Corp., 288
F.3d 305, 306 (7th Cir. 2002), we remarked that “dismissal
with prejudice may have been the only feasible sanction for
this perjury designed to defraud the government. Dismissal
without prejudice would have been no sanction at all, unless
perchance the statute of limitations had run in the interim,
which it must not have done or the plaintiff would not be
6 No. 15‐3743
complaining about the fact that his suit was dismissed with
prejudice. And a monetary sanction would probably be dif‐
ficult to collect from a litigant assiduous in concealing as‐
sets.”
The plaintiff’s contentions that he did not know the bal‐
ance of his trust account and that $10 was his best guess are
implausible. A week before he filed his in forma pauperis peti‐
tion he had spent about $30 on postage and copying, and
two weeks after the filing he had spent $500 on Christmas
presents and $100 on clothing and books. He was, as the dis‐
trict court noted, “regularly dipping into his law firm trust
account for his own use in the months leading up to and the
weeks immediately following his [in forma pauperis] petition
filing … [and] fails to explain … why he felt comfortable
with spending hundreds of dollars from this account with‐
out knowing how much money was in it.”
The judge said that he had “considered alternative sanc‐
tions, including dismissal without prejudice. But anything
less than dismissal with prejudice would be inappropriate in
this case. Even supposing it is possible for this Court to only
fine Plaintiff, fines would not be a fitting remedy because
Plaintiff appears to now be impoverished, having long since
spent all the money in his law firm trust account. A verbal or
written warning would fail to do justice given Plaintiff’s per‐
sistent disregard for the truth in this case. Dismissal without
prejudice would seem little punishment at all as Plaintiff
could then simply refile with a new, meritorious, in forma
pauperis petition. If Plaintiff’s time for filing has passed, dis‐
missing without prejudice would be equivalent to dismiss‐
ing with prejudice. Dismissal with prejudice also sends a
strong message to all litigants, particularly to those within
No. 15‐3743 7
the prison population, that dishonesty to the court will not
be tolerated.”
One issue remains to be discussed, though it is collateral
to the merits of the dismissal. In response to the plaintiff’s
initial request that the district judge recruit a lawyer for him,
the judge asked a Wisconsin law firm to evaluate the case
and advise him whether it warranted the investment of time
and resources required to prosecute to judgment a claim for
medical malpractice and deliberate indifference. The firm
responded that there was no clear medical negligence in the
case and that it would not be willing to invest the time and
resources necessary to prosecute the case and that other,
similar law firms would probably react the same way since
the cost of an expert witness could easily exceed $100,000
through trial and the firm would have to spend hundreds of
hours on the case.
The law firm’s response induced the judge not to recruit
counsel for the plaintiff at that time—a decision of no conse‐
quence, however, in view of the plaintiff’s misconduct that
precipitated the dismissal of his suit with prejudice. But we
question the wisdom of a judge’s seeking advice about a case
from a law firm that is not representing any of the parties to
it, at least without first checking for conflicts of interest. (A
firm representing a party will of course “advise” the judge
without being asked.)
There is a risk of a conflict of interest in those circum‐
stances, as this case illustrates. From its response, the law
firm from which the district judge sought advice appears to
be active in malpractice litigation, which suggests that it may
have had a conflict of interest with the plaintiff in telling the
judge in effect that no reputable firm would take on such a
8 No. 15‐3743
case on behalf of this plaintiff; the firm may wish on behalf
of its clients to discourage such litigation. Indeed the judge
remarked that “based on the assessment of his case by a law
firm experienced in medical matters, it appears certain that
were it not for the fact he is a prisoner, Plaintiff would most
likely not have an attorney assisting him in the case.” More‐
over, a further and more direct conflict of interest may have
been created by the fact that the law firm had represented an
opponent of our plaintiff in a previous suit, a fact the district
judge seems to have been unaware of.
No matter. For the reasons set forth earlier in this opinion
the judgment of the district court must be, and so it is,
AFFIRMED.
|
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Order Michigan Supreme Court
Lansing, Michigan
October 24, 2011 Robert P. Young, Jr.,
Chief Justice
143195 Michael F. Cavanagh
Marilyn Kelly
Stephen J. Markman
Diane M. Hathaway
Mary Beth Kelly
PEOPLE OF THE STATE OF MICHIGAN, Brian K. Zahra,
Plaintiff-Appellee, Justices
v SC: 143195
COA: 295140
Wayne CC: 09-010799-FC
EDWARD DARWIN WINSTON,
Defendant-Appellant.
_________________________________________/
On order of the Court, the application for leave to appeal the April 12, 2011
judgment of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the questions presented should be reviewed by this Court.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
October 24, 2011 _________________________________________
t1017 Clerk
|
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IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA17-500
Filed: 3 July 2018
North Carolina Industrial Commission, I.C. No. 13-007190
LISA A. GARRETT, Employee, Plaintiff,
v.
THE GOODYEAR TIRE & RUBBER CO., Employer, LIBERTY MUTUAL
INSURANCE CO., Carrier, Defendants.
Appeals by Plaintiff and Defendants from an Opinion and Award filed 10
February 2017 by the Full North Carolina Industrial Commission. Heard in the
Court of Appeals 20 September 2017.
Law Offices of Kathleen G. Sumner, by Kathleen G. Sumner and David P.
Stewart, for plaintiff-appellant.
Hedrick Gardner Kincheloe & Garofalo, LLP, by M. Duane Jones and Matthew
J. Ledwith, for defendants-appellees.
MURPHY, Judge.
Lisa A. Garrett (“Plaintiff”) and The Goodyear Tire & Rubber Company
(“Goodyear”) and Liberty Mutual Insurance Company (“Liberty”) (collectively
“Defendants”) appeal from an Opinion and Award filed 10 February 2017 by the
North Carolina Industrial Commission. For the reasons discussed herein, we affirm
in part and remand in part.
BACKGROUND
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
Plaintiff is approximately 56 years old, has a high school diploma, and
previously served in the United States Navy. She first worked at the Goodyear plant
in Fayetteville beginning on 12 June 2000 until sometime in 2001 when she was laid
off. In 2007, Goodyear rehired Plaintiff, and on 15 June 2009, she started a new
position with the company as a Production Service Carcass Trucker (“Carcass
Trucker”). The Carcass Trucker position required Plaintiff to operate a stand-up,
three-wheeled motorized vehicle in an industrial and warehouse setting. The position
also included the following physical demands and frequencies:
One-Hand Pull with Right Hand – 15 pounds of force
Lift, Push, Pull to Change Battery – 30 pounds
Pick Up Fallen Tire – 25 pounds
After working approximately one year as a Carcass Trucker, Plaintiff
underwent two surgeries, a spinal fusion on 15 October 2010 and a right shoulder
surgery on 29 December 2011. On 29 November 2012, Plaintiff’s treating physician,
Dr. Musante of Triangle Orthopedic Associates, medically released her to return to
work, and she resumed employment as a Carcass Trucker with Goodyear
A year later, on 15 December 2013, another employee driving a stand-up
vehicle collided with Plaintiff’s vehicle. This is the workplace accident triggering
Plaintiff’s workers’ compensation claim and is the subject of this appeal. After the
accident, Plaintiff initially resumed working, but she soon started “feeling something
-2-
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
weird,” and a numbness in the back of her neck. Plaintiff then reported the accident
to her supervisor, received treatment at Goodyear, and went to the emergency room.
Goodyear completed Industrial Commission Form 19 (Employer’s Report of
Employee’s Injury) and stated it knew of the incident and that Plaintiff received
“[m]inor on-site remedies by employer medical staff.” Plaintiff then began to see
several health care providers for her symptoms.
On 18 December 2013, Plaintiff saw Dr. Perez-Montes, and complained of pain
in her neck and back. Dr. Perez-Montes imposed modified work (i.e. “light-duty”)
restrictions that included “no repetitive bending or twisting, as well as no pulling,
pushing, or lifting of more than 15 pounds.” Approximately two weeks after the
accident, Plaintiff returned to work as a Carcass Trucker, subject to these light-duty
restrictions.
Defendants assigned Plaintiff a nurse case manager, who scheduled a 9 April
2014 appointment with a pain management specialist, Dr. Kishbaugh. Dr.
Kishbaugh noted that Plaintiff was suffering from “low back and leg pain, cervical
and thoracic back pain, and pain in the shoulder region with numbness and tingling
involving the arms.” Dr. Kishbaugh referred Plaintiff for physical therapy to address
her low back pain and suggested she follow up with a neurosurgeon for her neck
complaints. On 21 April 2014, Plaintiff visited the office of Dr. David Musante, her
treating physician after her 2010 and 2011 surgeries and the doctor who released her
-3-
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
for work in November 2012. Plaintiff complained of neck pain to Dr. Musante’s
Physician’s Assistant. X-rays and an MRI scan of her neck and spinal areas were
ordered.
Goodyear initially accommodated Plaintiff’s light-duty work restrictions, and
Plaintiff continued working there as a Carcass Trucker while she received medical
treatment. However, on 12 May 2014, Goodyear notified Plaintiff that it would no
longer accommodate her work restrictions. Plaintiff then went on leave and began
receiving accident and sickness disability benefits through an employer-sponsored
plan.
While on leave, Plaintiff participated in a functional capacity evaluation
(“FCE”) with physical therapist Frank Murray on 29 October 2014. Two weeks later,
on 13 November 2014, Dr. Kishbaugh reviewed the FCE, which concluded that
Plaintiff “could perform the physical demands and essential functions of the …
Carcass Trucker position.” Dr. Kishbaugh determined that it was appropriate for
Plaintiff to return to work, consistent with the conclusions of the 29 October 2014
FCE. Four days after Dr. Kishbaugh’s determination that Plaintiff could return to
work, on 17 November 2014, Plaintiff sought and obtained a note from Dr. Musante
excusing her from driving the carcass truck. Dr. Musante provided the note due to
Plaintiff’s “treatment for degeneration of a cervical intervertebral disc.” Plaintiff
continued to remain out of work.
-4-
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
On 2 January 2015, Plaintiff filed a Form 18 with the Industrial Commission
giving notice of her workers’ compensation claim to Goodyear. On 29 January 2015,
Plaintiff underwent an independent medical evaluation (“IME”) with Dr. Jon Wilson
upon referral of Goodyear’s accident and sickness insurance carrier. Dr. Wilson
concluded that Plaintiff could not at the time drive a carcass truck safely, but that
she could work full time at a sedentary level. On 13 February 2015, Defendants filed
a Form 63 Notice to Employee of Payment of Medical Benefits Only Without
Prejudice.
Plaintiff then filed a Form 33 on 22 April 2015, requesting a hearing before the
Industrial Commission because “Defendants failed to file any forms” and “treated the
claims as compensable.” Almost three months later, on 16 July 2015, Goodyear made
an employment offer to Plaintiff for the Carcass Trucker position at her prior wages,
but Plaintiff refused the offer. Plaintiff later testified that she “did not want to return
to work as a [C]arcass [T]rucker because of the bouncing nature of the truck.”
Goodyear then filed a Form 61 on 18 August 2015, denying liability for the 15
December 2013 incident. This was the same day that the claim was assigned for
hearing before Deputy Commissioner Phillip Baddour.
Prior to the 18 August 2015 hearing before the Deputy Commissioner, the
parties stipulated that the issues to be heard were:
(a) Whether Plaintiff’s claims should be deemed admitted
based upon the actions of Defendants?
-5-
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
(b) If not deemed admitted, whether Plaintiff suffered
compensable injuries to her neck, low back, and bilateral
shoulders?
(c) If so, to what compensation, if any, is Plaintiff entitled?
(d) Whether Dr. Musante should be designated as
Plaintiff’s authorized treating physician for her neck and
low back conditions?
(e) Whether Plaintiff is entitled to attorney’s fees pursuant
to [N.C.G.S.] § 97-88.1?
Deputy Commissioner Baddour filed his Opinion and Award on 23 June 2016 and
concluded that both Plaintiff’s neck and low back conditions were causally related to
the work accident and that she was entitled to total disability compensation from “13
May 2014 to the present and continuing until she returns to work or compensation is
otherwise legally terminated.” Plaintiff’s bilateral shoulder condition was not
compensable and she was not entitled to attorney’s fees. The Deputy Commissioner’s
Opinion and Award also stated “[t]he Commission may not prohibit Defendants from
contesting compensability of Plaintiff’s claims as a sanction for Defendants’ failure to
timely admit or deny the claims.” Defendants then filed a notice of appeal to the Full
Commission.
On 10 February 2017, the Full Commission filed its Opinion and Award. The
Full Commission considered several evidentiary sources, including Dr. Musante’s
deposition testimony, the stipulated medical records of Dr. Kishbaugh and Dr. Perez-
Montes, as well as Plaintiff’s statements and testimony. The Full Commission
-6-
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
concluded that Plaintiff’s low back condition was not a compensable injury but her
neck condition was. Plaintiff was awarded total temporary disability compensation
for her neck injury from 13 May 2014 (the date Goodyear stopped accommodating her
light-duty work restrictions) to 16 July 2015 (the date Plaintiff refused Defendants’
offer to return to her previous position at the same wages). Plaintiff and Defendants
timely appealed this Opinion and Award. Each party alleges that the Full
Commission committed several errors, and we address Plaintiff’s and Defendants’
issues in turn.
STANDARD OF REVIEW
Our review of an Opinion and Award of the Industrial Commission “is limited
to consideration of whether competent evidence supports the Commission’s findings
of fact and whether the findings support the Commission’s conclusions of law. This
court’s duty goes no further than to determine whether the record contains any
evidence tending to support the finding.” Richardson v. Maxim Healthcare/Allegis
Grp., 362 N.C. 657, 660, 669 S.E.2d 582, 584 (2008) (citation and quotation marks
omitted).
PLAINTIFF-EMPLOYEE’S ISSUES ON APPEAL
Plaintiff’s appeal is addressed in three parts: (A) preservation of the estoppel
issue for review by the Full Commission; (B) causation of Plaintiff’s low back injury;
and, (C) Plaintiff’s determination of disability.
-7-
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
A. Issue Preservation
Plaintiff first argues that the Full Commission erred in failing to consider her
argument that Defendants were estopped from denying the compensability of her
claims through their actions. She contends that Defendants waived their right to
contest compensability of her claims because subsequent to her Form 18 Notice of
Claim filing, Defendants neither admitted liability, denied liability, nor did they file
a Form 63 Notice of Payment Without Prejudice regarding the claim within 30 days
as required by statute and Industrial Commission Rules. See N.C.G.S. § 97-18(j)
(2017); 04 NCAC 10A.0601 (2017) (titled Employer’s Obligations Upon Notice; Denial
of Liability; And Sanctions). Plaintiff also argues that after her Form 18 filing,
Defendants engaged in a course of conduct, including an allegedly improper use of
Form 63 designed “to direct and limit every aspect of [Plaintiff’s] medical care to her
medical and legal detriment” while “avoiding their legal obligation to admit or deny
her claim.” Without addressing the merits of Plaintiff’s substantive argument, we
conclude that the Full Commission erred by failing to address this issue of estoppel
because Plaintiff properly raised the issue before the Deputy Commissioner and the
Full Commission.
When this case was before the Deputy Commissioner, the parties’ pre-trial
agreement stipulated the issues to be heard. Stipulation 9 (B) of the pre-trial
agreement states that Plaintiff contends the issues to be heard are:
-8-
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
Whether [D]efendant’s accepted this claim pursuant to
[N.C.G.S.] § 97-18(d), when [D]efendants took a recorded
statement, provided medical treatment in the outsourced
medical clinic on premises, paid for the emergency room
visit, sent [Plaintiff] out for medical treatment and
diagnostic studies, and assigned a nurse case manager to
the file, and failed to file any Industrial Commission form
either accepting or denying this claim in a timely manner
and failed to send to the medical providers from whom
[D]efendants required [Plaintiff] to treat the mandatory
letter stating that they do not accept the claim?
The Deputy Commissioner’s Opinion and Award listed the five issues to be heard and
one was the issue of whether Goodyear was estopped from denying the
compensability of Plaintiff’s claims.
(a) Whether Plaintiff’s claims should be deemed admitted
based upon the actions of Defendants?
However, the Deputy Commissioner did not adjudicate this specific issue. Conclusion
of Law 1 of his Opinion and Award only states:
1. The Commission may not prohibit Defendants from
contesting compensability of Plaintiff’s claims as a sanction
for Defendants’ failure to timely admit or deny the claims.
[N.C.G.S.] § 97-18(j).
When the Full Commission heard this case, it invoked the “law of the case” doctrine
and determined that Plaintiff waived the issue because she did not appeal from the
Deputy Commissioner’s Opinion and Award. The 10 February 2017 Opinion and
Award of the Full Commission states:
-9-
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
Plaintiff did not appeal from the [Deputy Commissioner’s]
Opinion and Award of June 23, 2016 as to the issues of . .
. whether [D]efendants’ actions constitute an acceptance of
[P]laintiff’s claim . . . [.] Accordingly, the Findings of Fact
and Conclusions of Law issued by the Deputy
Commissioner in the June 23, 2016 Opinion and Award are
the law of the case as to those issues from which no appeal
was taken by [P]laintiff.
It is well-established that “[t]he law of estoppel does apply in workers’
compensation proceedings, and liability may be based upon estoppel to contravene an
insurance carrier’s subsequent attempt to avoid coverage of a work-related injury.”
See e.g., Carroll v. Daniels & Daniels Construction Co., 327 N.C. 616, 620, 398 S.E.2d
325, 328 (1990). “[E]stoppel requires proof that the party to be estopped must have
misled the party asserting the estoppel either by some words or some action or by
silence.” Id. at 621, 398 S.E.2d. at 328 (citation omitted). In a workers’ compensation
proceeding, “the burden is on the plaintiff to show that the [defendants] misled the
plaintiff by words, acts, or silence.” Id.
In Lewis v. Beachview Exxon Serv., we addressed a situation similar to the
present case. 174 N.C. App. 179, 182, 619 S.E.2d 881, 882 (2005), rev’d on other
grounds, 360 N.C. 469, 629 S.E.2d 152 (2006). The parties’ pre-trial agreement
“stipulated that the issues before both the deputy commissioner and the Full
Commission included ‘whether defendants are estopped from denying plaintiff’s
pulmonary condition.’” Lewis, 174 N.C. App. at 182, 619 S.E.2d. at 882-83. However,
the Opinion and Award included “no findings of fact or conclusions of law regarding
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Opinion of the Court
waiver or estoppel,” and we held that the “Commission failed to consider the
application of the doctrine of estoppel to the factual scenario at hand[]” and remanded
to the Commission to address the issue. Id. at 183, 619 S.E.2d. at 883 (citations
omitted).
Regarding the “law of the case doctrine,” our Supreme Court has stated:
[a]s a general rule, when an appellate court passes on
questions and remands the case for further proceedings to
the trial court, the questions therein actually presented
and necessarily involved in determining the case, and the
decision on those questions become the law of the case, both
in subsequent proceedings in the trial court and on a
subsequent appeal, provided the same facts and the same
questions, which were determined in the previous appeal,
are involved in the second appeal.
Tennessee-Carolina Transp., Inc. v. Strick Corp., 286 N.C. 235, 239, 210 S.E.2d 181,
183 (1974) (internal citations and quotation marks omitted). We have further
explained that the law of the case doctrine “provides that when a party fails to
appeal from a tribunal’s decision that is not interlocutory, the decision below
becomes the ‘law of the case’ and cannot be challenged in subsequent proceedings in
the same case.” Boje v. D.W.I.T., L.L.C., 195 N.C. App. 118, 122, 670 S.E.2d 910,
912 (2009). In Boje, the Deputy Commissioner’s Opinion and Award included a
finding of fact that the defendant did not have workers’ compensation coverage on
the date of the plaintiff’s accident. Id. There, the defendant did not appeal the
finding to the Full Commission, and we held that this finding was the law of the
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Opinion of the Court
case and the defendant was “barred from relitigating that issue in subsequent
proceedings.” Id.
However, “[t]he doctrine of the law of the case is not an inexorable command,
or a constitutional requirement, but is, rather, a flexible discretionary policy which
promotes the finality and efficiency of the judicial process.” Goetz v. N.C. Dep’t of
Health & Human Servs., 203 N.C. App. 421, 432, 692 S.E.2d 395, 403 (2010)
(quotation marks omitted). Moreover, the Full Commission “is not an appellate
court” and “[t]he Commission may not use its own rules to deprive a plaintiff of the
right to have his case fully determined.” Joyner v. Rocky Mount Mills, 92 N.C. App.
478, 482, 374 S.E.2d 610, 613 (1988). In Joyner, we observed:
[a]lthough it hardly need be repeated, that the “[F]ull
Commission” is not an appellate court in the sense that it
reviews decisions of a trial court. It is the duty and
responsibility of the [F]ull Commission to make detailed
findings of fact and conclusions of law with respect to every
aspect of the case before it.
Id.
In the case at bar, Defendants maintain that the issue of whether they should
be estopped from denying Plaintiff’s claims was not before the Full Commission
because Plaintiff did not appeal the Deputy Commissioner’s Opinion and Award.
However, since there were no findings or conclusions in the Deputy Commissioner’s
Opinion and Award that addressed the issue of estoppel, the issue was not
adjudicated, and there was nothing for Plaintiff to appeal to the Full Commission.
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Opinion of the Court
Although labeled as a “Conclusion of Law,” the Deputy Commissioner’s Conclusion of
Law 1 is not a legal conclusion because it is not the result of the application of legal
principles to evidentiary facts. See In re Helms, 127 N.C. App. 505, 510, 491 S.E.2d
672, 675 (1997) (“As a general rule, however, any determination requiring the
exercise of judgment, or the application of legal principles, is more properly classified
a conclusion of law.”). Rather, Conclusion of Law Number 1 merely paraphrases a
statutory provision with potential relevance to the issue of Plaintiff’s estoppel claim.
It reads:
1. The Commission may not prohibit Defendants from
contesting compensability of Plaintiff’s claims as a sanction
for Defendants’ failure to timely admit or deny the claims.
[N.C.G.S.] § 97-18(j).1
“While the Commission is not required to make findings as to each fact
presented by the evidence, it must find those crucial and specific facts upon which
the right to compensation depends.” Lewis, 174 N.C. App. at 182, 619 S.E.2d at 883
(citation omitted). More specifically, “the Commission must address the issue of
estoppel[]” when the issue is raised. Id. Here the issue of estoppel was raised before
the Deputy Commissioner via the pre-trial agreement and in Plaintiff’s brief to the
Full Commission. Nevertheless, the Full Commission “failed to consider the
1 Specifically, N.C.G.S. § 97-18(j) provides that the Commission may order reasonable
sanctions against an employer that does not, within 30 days following the notice of an employee’s claim
from the Commission either admit, deny, or initiate payments without prejudice and when such
sanctions are ordered, “shall not prohibit the employer or insurer from contesting the compensability
of or its liability for the claim.” N.C.G.S. § 97-18(j) (2017).
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Opinion of the Court
application of the doctrine of estoppel to the factual scenario at hand.” Id.
Additionally, by invoking the law of the case doctrine, the Full Commission avoided
its duty to “make detailed findings of fact and conclusions of law with respect to every
aspect of the case before it.” Joyner, 92 N.C. App. at 482, 374 S.E.2d at 613. This
deprived Plaintiff of her right to have her case fully and finally determined.2 We
remand this matter to the Industrial Commission to consider whether the facts of
this case support a conclusion that Defendants should be estopped from denying the
compensability of Plaintiff’s claims. Should the Full Commission determine that the
doctrine of estoppel applies, it should determine whether Defendants are liable for
the workers’ compensation benefits. The Full Commission should rely on the findings
of fact already made and may make any additional findings it deems necessary.
B. Causation of Plaintiff’s Low Back Injury
Plaintiff next contends that the Full Commission erred by concluding she failed
to prove that her low back condition was caused by the December 2013 workplace
accident. We disagree.
2 Defendants also argue that Plaintiff waived the issue of whether her claims should be deemed
admitted based upon the actions of Defendants because she did not submit a Form 44 Application for
Review to the Full Commission. See 04 NCAC 10A.0701(d) (April 2018). Since Plaintiff did not appeal
any finding or conclusion of the Deputy Commissioner to the Full Commission, from a procedural
standpoint, Plaintiff was the appellee before the Full Commission. The Industrial Commission rules
do not require an appellee to submit a Form 44, only the appellant. See 04 NCAC 10A.0701(e) (April
2018). The appellee is, however, required to submit a brief, and Plaintiff did submit a brief raising the
specific issue of whether Plaintiff’s claims should be deemed admitted based upon the actions of
Defendants.
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Opinion of the Court
“The claimant in a workers’ compensation case bears the burden of initially
proving each and every element of compensability, including a causal relationship
between the injury and his employment.” Adams v. Metals USA, 168 N.C. App. 469,
475, 608 S.E.2d 357, 361 (2005) (citations and internal quotation marks omitted).
“[W]here the exact nature and probable genesis of a particular type of injury involves
complicated medical questions far removed from the ordinary experience and
knowledge of laymen, only an expert can give competent opinion evidence as to the
cause of the injury.” Young v. Hickory Bus. Furniture, 353 N.C. 227, 230, 538 S.E.2d
912, 915 (2000) (citations omitted). However, “an expert is not competent to testify
as to a causal relation which rests upon mere speculation or possibility.” Id.
We have held that an expert medical opinion stating an accident “could,”
“might have” or “possibly” caused an injury is generally insufficient to prove medical
causation. See Carr v. Dep’t of Health & Human Servs., 218 N.C. App. 151, 155, 720
S.E.2d 869, 873 (2012) (citations omitted). However, “supplementing that opinion
with statements that something ‘more than likely’ caused an injury or that the
witness is satisfied to a ‘reasonable degree of medical certainty’ has been considered
sufficient” to establish causation under the Workers Compensation Act. Id. (citing
Young, 353 N.C. at 233, 538 S.E.2d at 916; Kelly v. Duke Univ., 190 N.C. App. 733,
740, 661 S.E.2d 745, 749 (2008)).
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Opinion of the Court
Here, the Full Commission concluded that Plaintiff “failed to present
competent medical expert opinion evidence, as required by our case law, to establish
a relationship between her low back condition and the December 15, 2013 workplace
accident.” Plaintiff contends that this conclusion was erroneous because the Full
Commission ignored the stipulated medical records of Dr. Perez-Montes and Dr.
Kishbaugh, and improperly discounted the medical opinion testimony of Dr.
Musante, and characterized it as “speculative.” As to both arguments, we disagree.
“It is reversible error for the Commission to fail to consider the testimony or
records of a treating physician.” Whitfield v. Laboratory Corp. of Am., 158 N.C. App.
341, 348, 581 S.E.2d 778, 784 (2003). In Whitfield, the appellant argued that the
Commission erred by wholly disregarding the stipulated medical records of the
plaintiff’s treating physicians. Id. at 348, 581 S.E.2d at 783. We disagreed, and
noted that the Commission made numerous findings concerning plaintiff’s visits to
these doctors. Id. at 349, 581 S.E.2d at 784. The Commission “simply accorded
greater weight” to the expert medical opinion of a doctor who provided sworn
deposition testimony, as it is entitled to do. Id. Similarly, here the Full Commission’s
Opinion and Award included several findings of fact that reference Plaintiff’s
stipulated medical records.3 Plaintiff is therefore unable to show that the Full
3 The Full Commission’s consideration of Dr. Perez-Montes and Dr. Kishbaugh’s medical
records is evinced by Findings of Fact 7, 8, 9, and 10. See I.C. No. 13-007190, N.C. Indus. Comm’n,
Opinion And Award, p. 8 (Feb. 10 2017) (“7. On December 18 2013, [P]laintiff presented to Dr. Marcelo
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Opinion of the Court
Commission failed to consider these medical records because a number of findings in
the Opinion and Award expressly reference these records, the physicians who
provided them, and the information contained therein.
Plaintiff also claims that the Full Commission did not give “proper weight” to
these stipulated medical records during their review. However, “[i]t is for the
Commission to determine . . . the weight to be given the evidence, and the inferences
to be drawn from it.” Rackley v. Coastal Painting, 153 N.C. App. 469, 472, 570 S.E.2d
121, 124 (2002). Moreover, when medical records are stipulated to, the only aspect of
the records the parties are stipulating to is their authenticity. In Hawley v. Wayne
Dale Const., we noted that “stipulating to the record’s authenticity is not the same as
stipulating to the accuracy of the diagnosis,” nor does such stipulation “preclude
taking a deposition, calling the author as a witness or introducing contrary evidence.”
Hawley v. Wayne Dale Const., 146 N.C. App. 423, 429, 552 S.E.2d 269, 273 (2001).
Although the medical records of Dr. Perez-Montes and Dr. Kishbaugh were
stipulated, nothing would have prohibited these physicians from providing a sworn
medical opinion regarding the cause of Plaintiff’s lower back condition. However,
R. Perez-Montes . . . for follow-up after her work incident of December 15, 2013. . . He diagnosed
musculoskeletal pain and cervical spasm”); Id. at 9 (“8. Dr. Perez-Montes ordered a lumbar spine
MRI[.]”); Id. (“9. . . . Dr. Perez Montes diagnosed degenerative disc disease/facet syndrome of the
lower spine and referred [P]laintiff to pain management treatment.”); Id. (“10. At Plaintiff’s initial
appointment on April 9, 2014, Dr. Kishbaugh noted low back and leg pain, cervical and thoracic back
pain, and pain in the shoulder region with numbness and tingling involving the arms.”).
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Opinion of the Court
neither doctor was deposed, and it was for the Full Commission to determine the
weight to be given to their records and the inferences to be drawn from them.
Plaintiff’s final argument regarding her low back condition is that the Full
Commission improperly characterized Dr. Musante’s medical opinion as “speculative”
because it was based upon a hypothetical. Finding of Fact 27 of the Full Commission
stated:
27. The Commission finds that Dr. Kishbaugh, having
treated [P]laintiff’s low back since April 2014, would have
been in the best position to provide an expert medical
opinion as to the cause of plaintiff’s low back condition.
However, neither party obtained deposition testimony or a
written opinion from Dr. Kishbaugh as to this issue, and
the Commission finds that Dr. Musante’s opinion as to the
cause of [P]laintiff’s low back condition is insufficient to
establish a causal relationship between [P]laintiff’s low
back condition and the work incident of December 15, 2013
given its speculative nature and the fact that Dr. Musante
has never evaluated or treated [P]laintiff’s low back.
This finding was based on Dr. Musante’s deposition testimony, which was in part
based on a hypothetical. Regarding Plaintiff’s back condition, Dr. Musante
testified:
I can only speculate about her back because I don’t have any
recollection of symptoms prior to, or knowledge of her back
prior to this accident. I would simply answer in terms of
what I’ve seen here and in a hypothetical. If she reported
to me she had no history of seeking medical attention for
her back and had no problems with her back prior to this
accident, and then began to have back and leg symptoms, I
would conclude that the accident caused or aggravated
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Opinion of the Court
most likely some previously asymptomatic lumbar
pathology.
While an expert medical opinion based on a hypothetical may be admissible as
competent evidence in workers’ compensation proceedings, it cannot be based on
conjecture and speculation. See Haponski v. Constructor’s, Inc., 87 N.C. App 95, 100-
03, 360 S.E.2d 109, 112-13 (1987). Additionally, a medical opinion that relies
exclusively on the maxim of “post hoc, ergo propter hoc” is speculative incompetent
evidence of causation. See Young, 353 N.C. at 232, 538 S.E.2d at 916; see also Pine v.
Wal-Mart Assocs. Inc., ___ N.C. App. ___, ___, 804 S.E.2d 769, 777 (2017) (“[E]xpert
medical testimony based solely on the maxim ‘post hoc, ergo propter hoc’—which
‘denotes the fallacy of ... confusing sequence with consequence’—does not rise to the
necessary level of competent evidence.”).
In Young, a medical expert was asked to provide an opinion on whether the
plaintiff’s fibromyalgia was causally related to a workplace accident. Young, 353 N.C.
at 232, 538 S.E.2d at 916. The expert testified:
I think that she does have fibromyalgia and I relate it to
the accident primarily because, as I noted, it was not there
before and she developed it afterwards. And that’s the only
piece of information that relates the two.
Id. (emphasis added). Our Supreme Court held that this opinion relied solely on the
maxim post hoc, ergo propter hoc, and was therefore “not competent evidence of
causation.” Id.
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Opinion of the Court
In the instant case, Plaintiff claimed that the December 2013 workplace
accident caused a neck injury and a low back injury. However, Dr. Musante only
treated Plaintiff for her neck, not for her back, and he had no knowledge of her back
condition prior to the December 2013 workplace accident. Although his opinion
regarding the cause of Plaintiff’s low back symptoms was based on a hypothetical,
which is not incompetent evidence per se, Dr. Mustante’s testimony demonstrated
that his opinion as to causation was based exclusively on the temporal relationship
between the date the claimant sought medical attention and the date of the workplace
accident. Therefore, Dr. Musante’s post hoc ergo proper hoc testimony was
insufficient to establish a causal relationship between Plaintiff’s low back condition
and the December 2013 workplace accident.
Based on the foregoing, the Full Commission did not err by concluding Plaintiff
failed to prove that her low back condition was caused by the 15 December 2013
workplace accident.
C. Determination of Plaintiff’s Disability
Plaintiff’s remaining issue contends that the Full Commission misapplied the
law in analyzing her disability claims. We disagree.
A determination of disability is a conclusion of law we review de novo. Pine,
___ N.C. App. at ___, 804 S.E.2d at 773. “When the Commission acts under a
misapprehension of the law, the award must be set aside and the case remanded for
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Opinion of the Court
a new determination using the correct legal standard.” Ballenger v. ITT Grinnell
Indus. Piping, Inc., 320 N.C. 155, 158, 357 S.E.2d 683, 685 (1987) (citation omitted);
see also Weaver v. Dedmon, ___ N.C. App. ___, ___, 801 S.E.2d 131, 133 (2017) (“A
decision by the North Carolina Industrial Commission that contains contradictory
factual findings and misapplies controlling law must be set aside and remanded to
the Commission[.]”). “Disability” is defined as an “incapacity because of injury to earn
the wages which the employee was receiving at the time of the injury in the same or
any other employment.” N.C.G.S. § 97-2(9) (2017). To support a conclusion of
disability, “the Commission must find: (1) that plaintiff was incapable after his injury
of earning the same wages he had earned before his injury in the same employment,
(2) that plaintiff was incapable after his injury of earning the same wages he had
earned before his injury in any other employment, and (3) that this individual’s
incapacity to earn was caused by plaintiff’s injury.” Hilliard v. Apex Cabinet Co., 305
N.C. 593, 595, 290 S.E.2d 682, 683 (1982) (citing N.C.G.S. § 97-2(9)). The plaintiff
bears the burden of proof to establish disability, but once the plaintiff has done so,
the burden shifts to the defendant “to show not only that suitable jobs are available,
but also that the plaintiff is capable of getting one, taking into account both physical
and vocational limitations.” Wilkes v. City of Greenville, 369 N.C. 730, 745, 799 S.E.2d
838, 849 (2017) (citations omitted). Additionally, under N.C.G.S. § 97-32, “[i]f an
injured employee refuses suitable employment . . . the employee shall not be entitled
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Opinion of the Court
to any compensation at any time during the continuance of such refusal, unless in the
opinion of the Industrial Commission such refusal was justified.” N.C.G.S. § 97-32
(2017).
Plaintiff does not challenge any specific findings made by the Full Commission
as unsupported by the evidence. Rather, Plaintiff argues that the Full Commission
erred in concluding she was only entitled to temporary disability for her neck injury
from 12 May 2014 (the date Goodyear no longer accommodated her “light-duty” work
restrictions imposed by Dr. Perez-Montes) to 16 July 2016 (the date Goodyear
extended an offer of employment for Plaintiff to return to her previous position as a
Carcass Trucker). Plaintiff advances several different theories, none we find
prevailing.
Plaintiff first argues that the Full Commission erred by affording greater
weight to the medical opinion of Mr. Murray (the licensed physical therapist who
conducted Plaintiff’s Functional Capacity Evaluation), than the medical opinion of
Dr. Wilson. We again note that it is for the Commission to determine the weight to
be given the evidence, and the inferences to be drawn from it. Rackley, 153 N.C. App.
at 472, 570 S.E.2d at 124. “We will not reweigh the evidence before the
Commission[.]” Beard v. WakeMed, 232 N.C. App. 187, 191, 753 S.E.2d 708, 711
(2014).
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Opinion of the Court
Second, Plaintiff contends that the Full Commission erred by “mechanically”
employing the disability methods set forth in Russell v. Lowes Product Distribution,
108 N.C. App. 762, 425 S.E.2d 454 (1993).4 Plaintiff is correct in that the Russell
methods “are neither statutory nor exhaustive” and “are not the only means of
proving disability.” Wilkes, 369 N.C. at 745, 799 S.E.2d at 849 (citing Medlin v.
Weaver Cooke Const., LLC, 367 N.C. 414, 422, 760 S.E.2d 732, 737 (2014)).
Nonetheless, the Full Commission’s findings and conclusions clearly indicate that it
understood that it is not limited to the Russell methods to determine if the ultimate
standard of disability set forth in Hilliard and N.C.G.S. § 97-2(9) is met.5 Moreover,
Plaintiff’s argument that the Full Commission was “too mechanical” in the
application of the Russell factors is, in essence, a request for us to reweigh the
evidence, which we will not do. Hall v. U.S. Xpress, Inc., ___ N.C. App. ___, ___, 808
S.E.2d 595, 605 (2017).
4 Under Russell, the employee may prove disability “in one of four ways: (1) the production of
medical evidence that he is physically or mentally, as a consequence of the work related injury,
incapable of work in any employment; (2) the production of evidence that he is capable of some work,
but that he has, after a reasonable effort on his part, been unsuccessful in his effort to obtain
employment; (3) the production of evidence that he is capable of some work but that it would be futile
because of preexisting conditions, i.e., age, inexperience, lack of education, to seek other employment;
or (4) the production of evidence that he has obtained other employment at a wage less than that
earned prior to the injury.” Russell, 108 N.C. App. at 765, 425 S.E.2d at 457 (internal citations
omitted).
5 Conclusion of Law 4 of in the Full Commission’s Opinion and Award states that the “Russell
factors are not exhaustive and do not preclude the Commission from considering other means of
satisfying the ultimate standard of disability set forth in Hilliard. See Medlin v. Weaver Cooke Const.,
LLC, 367 N.C. 414, 760 S.E.2d 732 (2014).”
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Opinion of the Court
Plaintiff also contends that the Full Commission erred by concluding that she
unjustifiably refused an offer of suitable employment by refusing to return to her
previous position as a Carcass Trucker on 16 July 2015. She challenges Conclusion
of Law 5 of the Full Commission’s Opinion and Award:
5. Plaintiff admittedly refused to return to her pre-injury
job, which defendant employer offered to her by letter of
July 16, 2015, despite being released to that job by Dr.
Kishbaugh and Dr. Musante based upon the valid and
reasonable FCE performed by Mr. Murray. Accordingly,
the Commission concludes that [P]laintiff unjustifiably
refused suitable employment as of July 16, 2015. [N.C.G.S.]
§ 97-2(22) (2016).
N.C.G.S. § 97-32 precludes compensation if an injured employee unjustifiably refuses
to accept an offer of “suitable employment.”
If an injured employee refuses suitable employment as
defined by [N.C.G.S. §] 97-2(22), the employee shall not be
entitled to any compensation at any time during the
continuance of such refusal, unless in the opinion of the
Industrial Commission such refusal was justified.
N.C.G.S § 97-32 (2017). N.C.G.S. § 97-2(22) defines “suitable employment” as:
employment offered to the employee or . . . employment
available to the employee that (i) prior to reaching
maximum medical improvement is within the employee’s
work restrictions, including rehabilitative or other
noncompetitive employment with the employer of injury
approved by the employee’s authorized health care
provider or (ii) after reaching maximum medical
improvement is employment that the employee is capable
of performing considering the employee’s preexisting and
injury-related physical and mental limitations, vocational
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Opinion of the Court
skills, education, and experience and is located within a
50-mile radius of the employee’s residence at the time of
injury or the employee’s current residence if the employee
had a legitimate reason to relocate since the date of injury.
No one factor shall be considered exclusively in
determining suitable employment.
N.C.G.S. § 97-2(22) (2017), amended by 2015 N.C. Sess. Laws 286. Accordingly, our
review of this argument is limited to determining whether the Full Commission’s
unchallenged findings of fact support the conclusion that Goodyear made Plaintiff
an offer of “suitable employment,” and that Plaintiff unjustifiably refused this offer.
By letter dated 16 July 2015, Goodyear offered Plaintiff her pre-injury position
as a Carcass Trucker. Plaintiff did not accept this offer. At the time Goodyear made
the offer, the unchallenged findings demonstrate that Plaintiff had already been
medically cleared by one of her doctors to perform the duties of a Carcass Trucker.
This clearance was based on the results of Plaintiff’s 29 October 2014 FCE.
Specifically, Finding of Fact 17 states:
17. Plaintiff returned to Dr. Kishbaugh on November 13,
2014, at which time he reviewed the FCE by Mr. Murray.
As noted by Dr. Kishbaugh, [P]laintiff expressed concern
that she would “hurt” after sitting or riding in a truck for a
full shift. However, [P]laintiff did not express concerns
about cervical rotation needed to drive the carcass truck.
Dr. Kishbaugh assessed [P]laintiff at maximum medical
improvement . . . and encouraged her to discuss retirement
versus return to work options with defendant-employer,
although it was appropriate for [P]laintiff to return to work
per the FCE conclusions.
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Opinion of the Court
Plaintiff maintains that assuming arguendo she was physically capable of returning
to her pre-injury employment as a Carcass Trucker, it was still error for the Full
Commission to conclude that her refusal to accept Goodyear’s 16 July 2015
employment offer was unjustifiable. Plaintiff asserts that her refusal to accept
Goodyear’s employment offer was not “unjustifiable” because she feared
she would suffer another injury while working in that position. Plaintiff principally
relies on Bowden v. Boling Co. to support her argument. Bowden v. Boling Co., 110
N.C. App. 226, 429 S.E.2d 394 (1993).
In Bowden, the employee worked in a furniture factory and was injured when
a machine malfunctioned and collapsed on his left arm, trapping him for forty-five
minutes. Id. at 228-29, 429 S.E.2d at 395-96. The accident caused third-degree
burns, as well as severe muscle and nerve damage, and the employee was diagnosed
as having a 100% disability of his left arm. Id. After the employee reached maximum
medical improvement, the defendant-employer offered him three jobs in the same
factory. Id. However, these jobs would have required the employee to use the same
kinds of machines that trapped, injured, and caused him to lose the ability to use his
left arm. The Full Commission concluded that the jobs offered by the employer to the
employee “were not suitable for his capacity” and that his refusal to accept them did
not preclude compensation. Id. at 231, 429 S.E.2d at 397. The employer appealed
and argued “that even if [a] plaintiff’s fear is reasonable, the fear of returning to work
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Opinion of the Court
after an injury does not render an employee totally disabled under the Workers’
Compensation Act.” Id. at 213, 429 S.E.2d. at 398. We disagreed and affirmed the
Full Commission, reasoning:
if a person’s fear of returning to work renders the job
unsafe for his performance then it is illogical to say that a
suitable position has been offered. Although plaintiff may
be able to perform work involving the use of his right arm,
the availability of positions for a person with one functional
arm does not in itself preclude the Commission from
making an award for total disability if it finds upon
supported evidence that plaintiff because of other
preexisting conditions is not qualified to perform the kind
of jobs that might be available in the marketplace. While
the positions offered to plaintiff by defendants may in fact
be performed by a person with only one functional arm, the
question is whether the jobs could be performed safely by
this plaintiff.
Id. at 232-33, 429 S.E.2d at 398 (citation omitted).
The instant case is distinguishable from Bowden because it involves a
drastically different set of factual circumstances. In Bowden, the injured employee
lost the ability to use his left arm after a “machine used to steam and bend pieces of
wood” collapsed on his arm and trapped him for 45 minutes. Id. at 228, 429 S.E.2d
at 396. This injury was so severe that it required treatment at the Burn Unit at
North Carolina Memorial Hospital. Here, Plaintiff was operating a low-speed
battery-powered utility vehicle (in essence, a forklift) when another Goodyear
employee operating a similar vehicle collided with Plaintiff’s vehicle. Unlike Bowden,
Plaintiff did not go to the ER immediately after the accident. In fact, after the
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Opinion of the Court
collision, she retained the mental and physical wherewithal to engage in a heated
verbal altercation with the employee who struck her vehicle,6 and resume her normal
work activity. After feeling “something weird,” and reporting “numbness” to
Goodyear’s in-house medical staff, Plaintiff went to urgent care, took two weeks off,
and came back to work. Then, for the next 15 months, Plaintiff continued to drive
the same work vehicle she was operating when the accident occurred. In light of
these differences between Bowden and the present case, we conclude that Bowden is
not determinative on this issue.
Plaintiff also contends the Full Commission’s Opinion and Award failed to
address her argument regarding her fear of driving the carcass truck. We reject this
contention and have previously held that:
The Full Commission must make definitive findings to
determine the critical issues raised by the evidence, and in
doing so must indicate in its findings that it has
“considered or weighed” all testimony with respect to the
critical issues in the case. It is not, however, necessary that
the Full Commission make exhaustive findings as to each
statement made by any given witness or make findings
rejecting specific evidence that may be contrary to the
evidence accepted by the Full Commission. . . . Such
“negative” findings are not required.
6 Plaintiff made a recorded statement at her home to a Liberty Mutual Insurance
representative, and recounted the altercation as follows: “[a]ll right, someone slammed into me . . . I
saw a flash of person flying by going up the main aisle[.] . . . he came flying back, jumped out of his
truck and came at me telling me ‘I was a cunt from hell, I was a bitch that needed to be put down’ and
I told him to ‘take your tiny dick and move on.’. . . We had a confrontation for some time.”
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
Boylan v. Verizon Wireless, 224 N.C. App. 436, 443, 736 S.E.2d 773, 778 (2012)
(citations omitted) (emphasis added). While it is true that the Full Commission did
not make any specific findings regarding any potential effect that Plaintiff’s alleged
“fear” of operating a carcass truck would have on her ability to safely perform the
duties of that job, it is clear that the Full Commission made those findings necessary
to support its conclusion that Plaintiff unjustifiably refused Goodyear’s offer of
suitable employment. Plaintiff’s contention that the Commission “failed to address”
her fear of driving argument is a request for us to require the Industrial Commission
to make “negative findings” to support its conclusion (i.e., Plaintiff was not afraid of
driving the carcass truck). See id. This is something we will not do.
As our review of this is limited to determining whether the Full Commission’s
findings support its conclusions, we hold that that Findings of Fact 17, 31, 32, 33, 34,
35, and 37 adequately support the conclusion that Goodyear made an offer of “suitable
employment” and Plaintiff unjustifiably refused this offer. Finding of Fact 17 states
that as of 13 November, 2014, Dr. Kishbaugh was of the opinion that “it was
appropriate for plaintiff to return to work per the FCE conclusions.” Finding of Fact
31 states that “[b]y letter dated July 16, 2015, . . . defendant-employer offered
[P]laintiff to return to work in her pre-injury position as a Production Service Carcass
Trucker.” Finding of Fact 32 states that “Plaintiff did not return to her pre-injury
position as offered.” Finding of Fact 33 states that “Dr. Musante testified that . . .
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
[P]laintiff would not suffer any harm in driving the truck required of her pre-injury
job” and though “driving the truck may cause [P]laintiff to suffer a flare in her
symptoms and hurt, doing so posed no risk of harm to [P]laintiff.” Dr. Musante also
testified that “it appeared that Plaintiff was trying to not do that job.” Findings of
Fact 34 and 35 also demonstrate that Plaintiff’s treating physicians believed she was
“capable of much more than sedentary-duty work,” and the work restrictions
recommended in her FCE, if implemented, would allow her to work “in her pre-injury
position as a Production Service Carcass Trucker.” These findings sufficiently
demonstrate that the job offered was “within the employee’s work restrictions,
including rehabilitative or other noncompetitive employment with the employer of
injury approved by the employee’s authorized health care provider.” See N.C.G.S. §
97-2(22) (defining suitable employment).
Furthermore, Finding of Fact 37 supports the conclusion that Plaintiff’s refusal
to accept Goodyear’s offer was unjustifiable. This finding states that Plaintiff “did
not want to return to work as a [C]arcass [T]rucker because of the bouncing nature
of the truck,” and that she testified that she “can’t be bounced around like that.”
Plaintiff’s own testimony counters any claim that her refusal was justified under the
rationale of Bowden, which stands for the proposition that “if a person’s fear of
returning to work renders the job unsafe for his performance then it is illogical to say
that a suitable position has been offered” and that the relevant question is whether
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
the jobs available are jobs that “could be performed safely by this plaintiff.” Bowden,
110 N.C. App. at 232-33, 429 S.E.2d at 398. Plaintiff’s testimony was that she was
“afraid of getting hit again,” “afraid of her disk getting worse” and she “can’t be
bounced around like that.” She argues that this evidence clearly establishes that her
refusal to return to work as a Carcass Trucker was justified. However, Plaintiff’s
interpretation of her own testimony is not the only reasonable interpretation, and
“[i]t is for the Commission to determine the credibility of the witnesses, the weight to
be given the evidence, and the inferences to be drawn from it.” Rackley, 153 N.C.
App. at 472, 570 S.E.2d at 124.
Accordingly, we affirm the Full Commission’s conclusion that Plaintiff
unjustifiably refused an offer of suitable employment on 16 July 2016, and was not
entitled to disability compensation for her neck injury after that date.
DEFENDANTS’ ISSUES ON APPEAL
Defendants raise two issues on appeal. They first argue that the Full
Commission erred in concluding that Plaintiff’s cervical neck condition is
compensable. Defendants also argue that the Full Commission erred by failing to
enter sufficient findings to support the conclusion that Plaintiff was disabled from 13
May 2014 to 16 July 2015.
A. Causation of Plaintiff’s Neck Injury
Regarding the compensability of Plaintiff’s neck injury, Conclusion of Law 3 of
the Full Commission’s Opinion and Award states:
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
3. Based on the expert medical opinion of Dr. Musante, the
Commission concludes that the workplace accident of
December 15, 2013 caused or contributed to [P]laintiff’s
current neck condition by materially aggravating her pre-
existing, asymptomatic neck condition, thereby rendering
it a compensable injury by accident.
Dr. Musante was Plaintiff’s treating physician for her cervical neck condition during
her 2011 and 2012 surgeries and also after the December 2013 workplace accident.
During his deposition, Dr. Musante testified that it was his opinion that the
workplace accident contributed to or aggravated the underlying pre-existing
asymptomatic condition in the neck:
Q. What is that opinion?
A. The–my opinion is that the accident contributed to or
aggravated an underlying preexisting minimally to
asymptomatic condition in the neck. . . I can only speculate
about her back[.]
...
Q. And is that medical opinion within a reasonable degree
of medical certainty?
A. Yes.
Dr. Musante based this opinion on his treatment history with Plaintiff and his clinical
evaluation of her neck injury:
Q. And is that medical opinion based upon your training,
your clinical evaluation, your education, your experience,
the medical literature and your familiarity since 2010 with
[Plaintiff] and her medical conditions?
A. Yes, for the neck.
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
....
A. So it would be – it was based – I was actually treating
her for her cervical spine in January. I made my conclusion
based upon the history that she provided and the imaging
that I had.
....
Q. Would you say that what takes you from the
incident could have been or is a possible cause of
her pain to saying more likely than not it is a cause
of her pain is solely the temporal nature of her
complaints?
Plaintiff’s Counsel: Objection
A. I would say that the temporal nature, the fact
that she wasn’t seeking attention from me prior to
the accident, and then began seeking attention[.]
Defendants argue that Dr. Musante’s deposition testimony was insufficient to
support the Full Commission’s conclusion that Plaintiff’s neck condition was a
compensable injury. Specifically, Defendants contend that Dr. Musante’s testimony
only went to whether Plaintiff’s “pain complaints” were related to the workplace
accident. Defendants also maintain that his testimony was “speculative” because it
relied on the temporal nature of Plaintiff’s complaint history before and after the
incident. As to both theories, we disagree.
Regarding Defendants’ theory that Dr. Musante’s testimony only went to
whether Plaintiff’s pain complaints were related to the workplace accident, we
initially note that “when treating pain patients, a physician’s diagnosis often depends
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
on the patient’s subjective complaints, and this does not render the physician’s
opinion incompetent as a matter of law.” Yingling v. Bank of Am., 225 N.C. App. 820,
836, 741 S.E.2d 395, 406 (2013) (citations, quotation marks, and alterations omitted).
Furthermore, it is well-established that an aggravation of a pre-existing condition
can be a compensable injury under the Workers’ Compensation Act. Morrison v.
Burlington Indus., 304 N.C. 1, 18, 282 S.E.2d 458, 470 (1981) (stating that “[a]n
employer takes the employee as he finds her with all her pre-existing infirmities and
weaknesses” and a workers’ compensation claimant can be compensated for the
“aggravation and acceleration of a pre-existing infirmity.”). Here, Dr. Musante’s
medical opinion was that the December 2013 accident “aggravated an underlying pre-
existing minimally to asymptomatic condition in the neck.” This is a compensable
injury under the Workers’ Compensation Act. Id. Moreover, his testimony did not
only address Plaintiff’s own reports of pain. Dr. Musante testified that his medical
opinion was also based on Plaintiff’s medical history, MRI images and X-rays.
Similarly, Defendants’ contention that Dr. Musante’s opinion regarding
Plaintiff’s neck injury was “speculative” incompetent evidence of causation because it
relied on the temporal nature of Plaintiff’s complaint history is also without merit.
Young, discussed in greater detail supra, held that “expert medical testimony based
solely on the maxim ‘post hoc, ergo propter hoc’—which ‘denotes the fallacy of ...
confusing sequence with consequence’—does not rise to the necessary level of
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
competent evidence.” See Pine, ___ N.C. App. at ___, 804 S.E.2d at 777 (citing Young,
353 N.C. at 232, 538 S.E.2d at 916). However, an expert is not always precluded from
relying on the temporal sequence of events (e.g. “post hoc, ergo propter hoc”) in
forming his or her opinion as to the cause of a claimant’s injury. For example, in Pine,
we distinguished that case from Young “[b]ecause a full review of [the expert’s]
testimony demonstrate[d] that his opinion was based on more than merely post hoc,
ergo propter hoc, and went beyond a ‘could’ or ‘might’ testimony[.]” Pine, ___ N.C.
App. at ___, 804 S.E.2d at 778 (emphasis added).
Here, Dr. Musante did consider the temporal relationship between the date of
Plaintiff’s workplace accident and the dates she sought medical attention. However,
the temporal sequence of events was not the only factor he considered. Unlike his
opinion regarding the cause of Plaintiff’s low back condition, Dr. Musante’s opinion
regarding the cause of Plaintiff’s neck injury was not based “solely” on post hoc, ergo
propter hoc reasoning. Dr. Musante was Plaintiff’s treating physician for her neck
condition and had been since 2010. He also conducted physical exams of Plaintiff and
reviewed MRI images. Relying on all of this information, in addition to the temporal
sequence of events surrounding the December 2013 workplace accident, Dr. Musante
testified that it was his medical opinion “within a reasonable degree of medical
certainty” that the workplace accident caused Plaintiff’s neck injury. This medical
opinion was based on more than mere speculation.
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
Our role is “limited to reviewing whether any competent evidence supports the
Commission’s findings of fact and whether the findings of fact support the
Commission’s conclusions of law.” Deese v. Champion Int’l Corp., 352 N.C. 109, 116,
530 S.E.2d 549, 553 (2000) (emphasis added). In light of this role, we conclude that
Dr. Musante’s testimony supported the conclusion that the aggravation of Plaintiff’s
pre-existing neck condition was caused by the December 2013 workplace accident and
was a compensable injury.
B. Temporary Disability Determination
The Full Commission concluded that Plaintiff was entitled to temporary total
disability compensation for the period of 13 May 2014 to 16 July 2015 for her neck
injury. Defendants argue that the Commission erred by failing to enter sufficient
findings to support the conclusion that Plaintiff was disabled from 13 May 2014 to 16
July 2015. We agree and conclude that the Commission failed to make sufficient
findings regarding the effect that Plaintiff’s compensable neck injury had on her
ability to earn wages between 13 May 2014 and 16 July 2015.
A determination of disability is a conclusion of law we review de novo, and “the
claimant has the burden of proving the existence of his disability and its extent.”
Hendrix v. Linn-Corriher Corp., 317 N.C. 179, 185, 345 S.E.2d 374, 378 (1986). In
addition to proving that a compensable injury occurred as the result of a workplace
accident, a plaintiff must also prove (1) she was “incapable after her injury of earning
the same wages earned prior to injury in the same employment,” (2) she was
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GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
“incapable after her injury of earning the same wages she earned prior to injury in
any other employment,” and (3) her “incapacity to earn wages was caused by [her]
injury.” Hilliard, 305 N.C. at 595, 290 S.E.2d at 683 (emphasis added). “After the
plaintiff meets her burden to establish disability, the burden shifts to the employer
to show not only that suitable jobs are available, but also that the [employee] is
capable of getting one, taking into account both physical and vocational limitations.”
Cross v. Falk Integrated Techs., Inc., 190 N.C. App. 274, 279, 661 S.E.2d 249, 253-54
(2008) (citations omitted). “An employer can overcome the presumption of disability
by providing evidence that: (1) suitable jobs are available for the employee; (2) that
the employee is capable of getting said job taking into account the employee’s physical
and vocational limitations; (3) and that the job would enable employee to earn some
wages.” Id. (emphasis added).
We have often stated that the Commission must make specific findings that
address the “crucial questions of fact upon which plaintiff’s right to compensation
depends.” Wilkes, 369 N.C. at 746, 799 S.E.2d at 850 (citing Guest v. Brenner Iron &
Metal Co., 241 N.C. 448, 451, 85 S.E.2d 596, 599 (1955)); see also Singleton v. Durham
Laundry Co., 213 N.C. 32, 34-35, 195 S.E. 34, 35 (1938) (“It is the duty of the
Commission to make such specific and definite findings upon the evidence reported
as will enable this Court to determine whether the general finding or conclusion
should stand, particularly when there are material facts at issue.”).
- 37 -
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
For example, in Carr, like the instant case, the Commission concluded that the
plaintiff was entitled to temporary total disability. Carr, 218 N.C. App. at 151, 720
S.E.2d at 869. We remanded because the Commission failed to make necessary
findings. Specifically, we held that before the Commission could conclude that the
claimant was entitled to temporary total disability compensation, it must make
findings as to “whether plaintiff has made a reasonable effort to obtain employment,
but been unsuccessful, or that it would be futile for plaintiff to seek work because of
preexisting conditions.” Id. at 158, 720 S.E.2d at 875. We reached this result because
the medical evidence did not show claimant was incapable of working in any
employment. Carr, 218 N.C. App. at 157, 720 S.E.2d at 875.
More recently, in Wilkes v. City of Greenville, our Supreme Court remanded a
decision of the Commission because the Commission did not make any findings
addressing how the plaintiff’s injury “may have affected his ability to engage in wage-
earning activities.” Wilkes, 369 N.C. at 747-48, 799 S.E.2d at 850. The plaintiff in
Wilkes was employed as a landscaper and was injured in a motor vehicle accident
during the course of employment. Id. at 732, 799 S.E.2d at 841. In concluding that
the plaintiff was disabled, the Commission found that he had suffered “severe
tinnitus” as the result of the accident. Id. at 732, 799 S.E.2d at 841. However, while
the Commission’s findings indicated that the plaintiff had “numerous pre-existing
limitations” that affected his ability to earn wages in other employment after the
- 38 -
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
workplace accident,7 “the Commission made no related findings on how the plaintiff’s
compensable tinnitus . . . affected his ability to engage in wage-earning activities.”
Id. Our Supreme Court remanded to the Commission to “take additional evidence if
necessary and to make specific findings addressing the plaintiff’s wage-earning
capacity, considering his compensable tinnitus in the context of all the pre-existing
and coexisting conditions bearing upon his wage-earning capacity.” Id.
In the present case, the Full Commission concluded that Plaintiff ’s neck injury
was compensable, and that she was entitled to temporary total disability for her neck
injury. The findings of the Commission support the conclusion that Plaintiff was
unable to earn the same wages in the “same employment” during the period of
temporary total disability because Goodyear no longer accommodated her light-duty
work restrictions after 13 May 2014. However, the Opinion and Award does not
sufficiently address how Plaintiff’s neck injury affected her ability to engage in all
wage-earning activities after 13 May 2014. The evidence before the Commission did
not show that Plaintiff was incapable of working in any employment between the
dates of 13 May 2014 and 16 July 2015. Plaintiff’s “light-duty” work restrictions only
required her to refrain from some, but not all work activities.8 Also, as of 29 January
2015, Plaintiff’s doctors believed she was capable of working full time in a sedentary
7 For example, the plaintiff in Wilkes was over the age of sixty, had an IQ under 70, and had a
limited education and work experience. Wilkes, 369 N.C. at 745, 799 S.E.2d at 849.
8 Plaintiff’s work restrictions required her to refrain from repetitive bending and twisting, and
the pulling, pushing, or lifting of more than 15 pounds.
- 39 -
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
position. Like Carr, the evidence here showed that Plaintiff was not incapable of
working in any employment. However, the Full Commission failed to make any
findings addressing whether after a reasonable effort on Plaintiff’s part, she had been
unsuccessful in her effort to obtain employment, or it would have been futile for her
to seek other employment. As such, there are no findings addressing whether
Plaintiff had any limitations that precluded her from obtaining “any other
employment” at the same wages. Hilliard, 305 N.C. at 595, 290 S.E.2d at 683
(emphasis added). As in Carr, we cannot determine what evidence Plaintiff
introduced to meet her burden to show that her inability to find equally lucrative
work in any other employment between the dates of 13 May 2014 and 16 July 2015
was caused by her compensable neck injury.
Based upon the record before us, we cannot affirm the award. Accordingly, we
remand this case to the Commission. On remand, the Commission shall make specific
findings addressing Plaintiff’s wage-earning capacity, considering her compensable
neck injury in the context of all the preexisting and coexisting conditions, as well as
all vocational limitations bearing upon her wage-earning capacity.
CONCLUSION
We affirm in part and remand in part. We affirm the Commission’s conclusions
that: (1) Plaintiff failed to prove that her low back condition was caused by the
December 2013 workplace accident; (2) Plaintiff met her burden to establish that her
- 40 -
GARRETT V. THE GOODYEAR TIRE & RUBBER CO.
Opinion of the Court
neck condition was caused by the December 2013 workplace accident; and (3) the Full
Commission did not err in concluding that Plaintiff’s refusal of Goodyear’s 16 July
2015 employment offer was unjustified. We remand this matter to the Industrial
Commission to: (1) to consider whether the facts of this case support a conclusion that
the employer or the insurance carrier should be estopped from denying coverage; and
(2) to make specific findings addressing Plaintiff’s wage-earning capacity between the
dates of 13 May 2014 and 16 July 2015.
AFFIRMED IN PART; REMANDED IN PART.
Judges CALABRIA and ZACHARY concur.
- 41 -
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139 F.3d 901
NOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit.Fabio A. DIAZ, Plaintiff-Appellant,v.Daniel R. MCBRIDE, Wait Moore, Brenda Koker, and E. Huff,Defendants-Appellees.
No. 96-2515.
United States Court of Appeals, Seventh Circuit.
Submitted Feb. 19, 19981.Decided Mar. 3, 1998.
Appeal from the United States District Court for the Northern District of Indiana, South Bend Division. No. 3:94cv1027 RM Robert L. Miller, Jr. Judge.
Before Hon. THOMAS E. FAIRCHILD, Hon. FRANK H. EASTERBROOK, Hon. DIANE P. WOOD, Circuit Judges.
ORDER
1
Fabio Diaz, then an Indiana inmate2, filed a civil rights action pursuant to 42 U.S.C. § 1983 against various prison officials, raising First, Eighth, and Fourteenth Amendment challenges to two prison disciplinary proceedings for violating a prison regulation prohibiting the possession of over $50, and attempting to mail money out of the prison, which charges he contends were brought against him in retaliation for his writing letters to government and prison officials complaining about prison employees' corruption and drug dealing. The district court granted summary judgment for defendants, and Diaz appeals.
2
In 1994, Diaz began a letter-writing campaign, accusing prison employees of drug dealing and corruption. Indiana Department of Corrections Director Walter Moore instructed him, "when you have something that can be verified please feel free to contact [prison staff] to make your information known." Diaz states that he then began "collecting" money used in drug deals as proof of the corruption.
3
On November 30, 1994, the prison mail room supervisor found $200 in Diaz's outgoing mail, included with a letter written in Spanish which stated, "Here is another 200 and I'm waiting till you call on Thursday and I hope that you received the other 100." Diaz later told investigators that $150 was meant for his daughter in college, and $50 was "going to a man in Indianapolis." A search was conducted of Diaz's cell, and an additional $125 was found in letters received from his wife and friends, and the letters and money were confiscated. Diaz was placed in administrative segregation pending an investigation and hearing. Diaz explained that he was conducting an investigation and collecting evidence of corruption, and asserted that only $45 was real money; the rest was counterfeit. Diaz also complained that there was other cash taken from him, but it was not reported by the guards.
4
After a hearing, Diaz was found guilty of possession of over $50, and was sentenced to the 13 days he had already served in segregation.3 Approximately one week later, following a hearing, Diaz was found guilty of attempting to mail money out of the prison. The disciplinary hearing committee's report indicates that he lost 90 days' earned credit time.
5
Under Edwards v. Balisok, 520 U.S. 641, ----, 117 S.Ct. 1584, 1587, 137 L.Ed.2d 906 (1997), before a civil rights action can be brought, the underlying disciplinary conviction must be invalidated or overturned if a judgment in the plaintiff's favor would necessarily imply the invalidity of the underlying disciplinary conviction and sentence. See also Heck v. Humphrey, 512 U.S. 497, 486-87 (1994); Stone-Bey v. Barnes, 120 F.3d 718, 721 (7th Cir.1997).
6
Diaz concedes that he has never filed a habeas corpus petition in regard to these disciplinary charges, but argues that Edwards and Heck do not apply because he has already "served the [segregation] time and seeks no release." It is not necessary for the application of the Edwards bar to seek the restoration of good time credits; it is enough to seek monetary damages. Walker v. Taylorville Correctional Center, 129 F.3d 410, 413 (7th Cir.1997); Lewis v. Richards, 107 F.3d 549, 555 (7th Cir.1997). Thus, the Edwards bar applies here to Diaz's procedural due process claims. These claims are not yet cognizable under § 1983 and should have been dismissed without prejudice.4 See Stone-Bey, 120 F.3d at 723.
7
Diaz also claims that the disciplinary charges were brought in retaliation for his letter-writing campaign against prison corruption. It is true that prison officials may not retaliate against an inmate for exercising his constitutional right to seek access to the courts or file grievances. Howland v. Kilquist, 833 F.2d 639, 644 (7th Cir.1987). Retaliation is typically shown by establishing a chronology of events from which retaliatory motive can be inferred. Black v. Lane, 22 F.3d 1395, 1399 (7th Cir.1994). Diaz, however, admits possession of the money, and admits attempting to mail money out of the prison. (In fact, he states that he had more money than was confiscated, but guards took it without making any report.) He explained that the possession of this money resulted from his investigation, notwithstanding the fact that the money was not seized by guards while Diaz was in the process of attempting to mail it to, or otherwise turn it over to, authorities. This evidence so seriously undermines his claim of retaliation that no verdict could stand in his favor.
8
Diaz next argues that he was deprived of property without due process of law in violation of the Fourteenth Amendment when guards confiscated letters from Diaz's wife and friends. A prisoner making claims of property loss has an adequate post-deprivation remedy in the state courts and therefore cannot use a federal § 1983 action to pursue that claim. Hudson v. Taylor, 468 U.S. 517, 531-36, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984), Parratt v. Taylor, 451 U.S. 527, 535-44, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981). Diaz states that he sought the return of his property in the Indiana state courts, but missed the statute of limitations deadline by one day. The state's two-year statute of limitation does not render it an inadequate remedy. See Albright v. Oliver, 510 U.S. 266, 285, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994) (Kennedy, J., concurring); Daniels v. Williams, 474 U.S. 327, 342 (1986) (Stevens, J., concurring); Williams v. St. Louis Co., 812 F.2d 1079, 1083 n. 5 (8th Cir.1987). He had two years to avail himself of an adequate post-deprivation remedy under the Indiana Tort Claims Act, Ind.Code § 34-4-16.5. Consequently, no relief can be granted under § 1983.
9
Diaz argues that his missing the statute of limitations deadline was caused by defendants' refusal to release him from segregation, and denying him access to legal materials and the prison law library. This brings us to Diaz's claim that his First Amendment right of access to the courts was violated when he was held in segregation for 13 days. See Bounds v. Smith, 430 U.S. 817, 97 S.Ct. 1491, 52 L.Ed.2d 72 (1977). This brief period of time was not the type of "direct, substantial, and continuous" limitation which would violate Diaz's right of access to courts. Jenkins v. Lane, 977 F.2d 266, 268-69 (7th Cir.1992).
10
Finally, Diaz raises an Eighth Amendment claim that during his time in administrative segregation he was denied recreation and exercise which caused his muscles to atrophy and worsened his heart condition, and defendants show "a total unconcern for my welfare in the face of serious risks." Diaz offers no evidence that comes even close to suggesting that during the 13 days in administrative segregation his health was seriously threatened, or that defendants were deliberately indifferent to his health. See Farmer v. Brennan, 511 U.S. 825, 114 S.Ct. 1970, 1977, 128 L.Ed.2d 811 (1994).
11
Accordingly, the judgment of the district court is MODIFIED to show dismissal of the procedural due process claims without prejudice, and as so modified is AFFIRMED in all other respects.
1
After an examination of the appellant's brief and the record, we have concluded that oral argument is unnecessary, and the appeal is submitted on the briefs and the record. See Fed. R.App. P. 34(a); Cir. R. 34(f)
2
Diaz has since been released from prison and deported
3
Diaz was in segregation from November 30 until December 13, 1994
4
Diaz's due process claims include insufficient notice that holding over $50 was prohibited; failure to review his segregation status every five days; failure to hold a disciplinary hearing within seven days; insufficient evidence that he had more than $45 in real money; placement in segregation pending an investigation and hearing; failure to produce the actual money at the hearing; and the guards' confiscating $200 without reporting it
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850 F.Supp. 984 (1994)
Carolyn SMITH & Karole Miele, Plaintiffs,
v.
UNITED STATES of America, Goodwill Industries-Suncoast, Inc., William Procknow, & Teddy Wilson, Defendants.
No. 93-0940-CIV-ORL-18.
United States District Court, M.D. Florida, Orlando Division.
April 28, 1994.
J. Edwin Mills, Law Office of J. Edwin Mills, Orlando, FL, for plaintiffs.
Kendell W. Wherry, U.S. Attorney's Office, M.D.Fla., Orlando, FL, James Robert Freeman, Scott Patrick Distasio, Shear, Newman, Hahn & Rosenkranz, P.A., Tampa, FL, for defendants.
Teddy Wilson, pro se.
ORDER
G. KENDALL SHARP, District Judge.
Plaintiffs bring this action alleging that defendants violated their constitutional rights to equal protection under the Fifth Amendment and freedom from cruel and unusual punishment under the Eighth Amendment. Defendants Goodwill Industries-Suncoast, Inc. (Goodwill) and William Procknow (Procknow) filed motions to dismiss based on qualified immunity and failure to state a claim on which relief may be granted. Plaintiffs responded in opposition to the motions. The court referred the motions to a magistrate judge for a report and recommendation. Based on a review of the case file and relevant law, the court adopts the magistrate judge's recommendation to deny Procknow's motion to dismiss and to grant Goodwill's motion to dismiss without prejudice. However, the court modifies the magistrate judge's *985 report and recommendation to hold that Goodwill can raise qualified immunity as a defense to plaintiffs' action.
I. Facts
According to the allegations in the complaint, the United States contracted with Goodwill to operate the Orange County Community Treatment Center. Goodwill hired Procknow to manage the day-to-day operation of the center. Plaintiffs were inmates at the center. A Goodwill employee, Teddy Wilson (Wilson), allegedly made sexual advances toward plaintiffs and other women, who were inmates at the center. In April, June and July 1993, Procknow, as Wilson's supervisor, received complaints about Wilson's inappropriate conduct. In August 1993, the United States and Goodwill investigated the allegations against Wilson and as a result of the investigation, terminated Wilson's employment.
In his report and recommendation, the magistrate judge found that although Procknow, as an individual defendant, could raise a qualified immunity defense, Procknow failed to show that he was entitled to qualified immunity. As to Goodwill, the magistrate judge found that qualified immunity was not available to Goodwill, as a private corporation. Nevertheless, the magistrate judge recommended granting Goodwill's motion to dismiss without prejudice based on his finding that plaintiffs failed to allege that their constitutional injuries resulted from Goodwill's official policy. In response to the report and recommendation, Goodwill filed an objection, in which it claims that private corporations can raise qualified immunity as a defense.
II. Legal Discussion
A. Eleventh Circuit Precedent.
The only issue before the court is whether Goodwill, as a private corporation, can raise qualified immunity as a defense to plaintiffs' action. Although plaintiffs sue defendants for their actions under the color of federal law, the court applies § 1983 concepts. See Morast v. Lance, 807 F.2d 926, 931 (11th Cir.1987) (applying § 1983 concepts of state action to a Bivens claim against federal actors). In its objection, Goodwill cites an Eleventh Circuit case, Howell v. Burden, 12 F.3d 190 (11th Cir.1994), for the proposition that qualified immunity applies to private corporations. See Howell, 12 F.3d at 191 (citing as background information an earlier appellate decision, Howell v. Evans, 922 F.2d 712 (11th Cir.), vacated as moot, 931 F.2d 711 (11th Cir.1991), reinstated by unpublished order as noted in 12 F.3d 190 (11th Cir.1994)). According to the more recent appellate decision, the Eleventh Circuit held in its earlier appellate decision that qualified immunity protected the attending physicians and the private corporation. Id. A review of the earlier appellate opinion reveals, however, that the Eleventh Circuit never reached the issue whether the private corporation was entitled to a qualified immunity defense because the court found insufficient evidence of a policy or custom to hold the private corporation liable under § 1983. Howell, 922 F.2d at 725, 726 n. 15. Therefore, the court finds that the Eleventh Circuit has not affirmatively ruled on the issue whether a private corporation can raise a qualified immunity defense.
In his report and recommendation, the magistrate judge rejected Goodwill's claim to qualified immunity based on Harvey v. Harvey, 949 F.2d 1127 (11th Cir.1992). In Harvey, the Eleventh Circuit analogized a private hospital, which the state had designated as an emergency receiving facility for involuntarily committed mental health patients, to a municipal corporation. Harvey, 949 F.2d at 1129-30. The Harvey court concluded that because municipal corporations are not subject to vicarious liability in § 1983 actions, the private hospital could not be held vicariously liable. Id. Based on the analogy in Harvey, the magistrate judge concluded that because qualified immunity is not available to a municipal corporation, qualified immunity is not available to Goodwill.
Although the Harvey court analogized a private corporation to a municipal corporation, the Harvey court intimated that a private corporation may have defenses in addition to the municipal corporation's defenses. Id. (citing Jones v. Preuit & Mauldin, 851 F.2d 1321 (11th Cir.1988) (en banc), vacated on other grounds, 489 U.S. 1002, 109 S.Ct. *986 1105, 103 L.Ed.2d 170 (1989), for the proposition that private defendants in § 1983 actions should have at a minimum the same defenses available to public defendants (emphasis added)). However, the Harvey court did not indicate whether qualified immunity was an additional defense that a private corporation could raise.
B. Policy Considerations.
The Supreme Court has applied qualified immunity to public officials sued in their individual capacity to limit the social costs of distracting officials from their governmental duties, inhibiting discretionary action, and deterring able people from public service. See Harlow v. Fitzgerald, 457 U.S. 800, 814-18, 102 S.Ct. 2727, 2736-38, 73 L.Ed.2d 396 (1982). The Supreme Court has refused, however, to extend qualified immunity to private defendants acting for their personal interests or to municipal corporations. See Wyatt v. Cole, ___ U.S. ___, ___, 112 S.Ct. 1827, 1834, 118 L.Ed.2d 504 (1992) (private defendant); Owen v. City of Independence, 445 U.S. 622, 657, 100 S.Ct. 1398, 1418, 63 L.Ed.2d 673 (1980) (municipal corporation).
In Wyatt, the Supreme Court concluded that the special concerns regarding government officials' personal liability are not applicable to private defendants because private defendants hold no office requiring the exercise of discretion, private defendants are not principally concerned with enhancing the public good, and a trial would not interfere with public service. Wyatt, ___ U.S. at ___ - ___, 112 S.Ct. at 1832-33. In Owen, the Supreme Court found that municipal liability is distinct from public officials' personal liability based, in part, on the following policy considerations: (1) the public at large enjoys the benefits of government activities and the public at large is ultimately responsible for its administration; therefore, it is more fair to allocate any resulting financial loss to the inevitable cost of government borne by all the taxpayers; and (2) although personal liability may inhibit individuals from seeking public office, consideration of the municipality's liability for constitutional violations is a proper concern of elected or appointed officials. See Owen, 445 U.S. at 654-56, 100 S.Ct. at 1417-18; Burrell v. Board of Trustees of Ga. Military College, 970 F.2d 785, 789 n. 10 (11th Cir.1992), cert. denied, ___ U.S. ___, 113 S.Ct. 1814, 123 L.Ed.2d 445 (1993).
Based on a review of the Supreme Court's policy considerations, the court finds that a private corporation under contract with the government to perform a public service is entitled to raise qualified immunity as a defense. Although a private contractor may be principally concerned with its private interests, a private contractor is distinct from the private defendants in Wyatt because a private contractor may be required to exercise discretion under the government contract and to perform a public service. Furthermore, the court finds that the policy considerations that weigh against applying qualified immunity to municipal corporations do not pertain to private corporations. Specifically, the court finds that unlike a municipal corporation, a private corporation is not expected to bear the cost of government and that the risk of liability would deter private corporations from contracting with the government. Accordingly, the court concludes that Goodwill's status as a private corporation under contract with the government to perform a public service is more analogous to a public official sued in his individual capacity, and thus, Goodwill is entitled to raise qualified immunity as a defense. See Sherman v. Four County Counseling Ctr., 987 F.2d 397, 405-06 (7th Cir.1993) (noting that the private corporation was fulfilling a public duty and applying qualified immunity to a private corporation to avoid discouraging public service); DeVargas v. Mason & Hanger-Silas Mason Co., 844 F.2d 714, 717 (10th Cir.1988) (applying qualified immunity to private contractors because damage suits distract contractors from their public duties and deter private contractors from entering into contracts with government bodies); see also Burrell, 970 F.2d at 795-96 (recognizing that Wyatt may allow application of qualified immunity to private individual defendants in non-attachment cases if the defendants are alleged to have simply fulfilled their duties under a government contract); Howell, 922 F.2d at 720-22 (applying qualified immunity to physicians who contracted with a private corporation to provide public services).
*987 III. Conclusion
Accordingly, the court MODIFIES the magistrate judge's report and recommendation to hold that Goodwill is entitled to raise qualified immunity as a defense. However, the court does not reach the issue whether qualified immunity protects Goodwill because the court GRANTS Goodwill's motion to dismiss without prejudice based on the magistrate judge's finding that plaintiffs fail to allege that their constitutional injuries resulted from Goodwill's custom or policy. (Docs. 15, 29.) Therefore, the court allows plaintiffs twenty (20) days from the date of this order to amend their complaint to properly state a claim against Goodwill. As to Procknow, the court ADOPTS the magistrate judge's recommendation and DENIES Procknow's motion to dismiss. (Docs. 14, 29.)
It is SO ORDERED.
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IN THE COURT OF APPEALS OF IOWA
No. 18-0188
Filed November 21, 2018
STATE OF IOWA,
Plaintiff-Appellee,
vs.
ELLIS CHARLES CARPENTER,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Scott County, Mark R. Fowler,
District Associate Judge.
Ellis Carpenter appeals after pleading guilty to domestic abuse assault.
AFFIRMED.
Thomas J. O’Flaherty of O’Flaherty Law Firm, Bettendorf, for appellant.
Thomas J. Miller, Attorney General, and Tyler J. Buller, Assistant Attorney
General, for appellee.
Considered by Danilson, C.J., and Potterfield and Doyle, JJ.
2
DOYLE, Judge.
Ellis Carpenter appeals the judgment and sentence entered after he pled
guilty to domestic abuse assault, in violation of Iowa Code section 708.2A(3)
(2017). Carpenter argues his counsel was ineffective by permitting him to plead
guilty without a factual basis. We reject Carpenter’s arguments and affirm the
district courts judgment and sentence.
The original trial information charged Carpenter with domestic abuse
assault with the intent to inflict a serious injury, second offense, in violation of
section 708.2A(3)(b), and as a habitual offender pursuant to sections 902.8 and
902.9. Subsequently, an amended and substituted trial information was filed
omitting the reference to “with intent to inflict a serious injury,” and instead referred
to the offense as “Domestic Abuse Assault Second Offense (Aggravated
Misdemeanor).” Also, the habitual offender sentencing enhancement was
dropped. Carpenter entered a written guilty plea to the amended charge of
domestic abuse assault second offense, an aggravated misdemeanor, and the
court entered an order accepting the plea. In a subsequent sentencing order, the
court again accepted Carpenter’s plea, convicted him of the crime of second-
offense domestic abuse assault in violation of sections 708.1 and 708.2A(3)(a),1
and sentenced him pursuant to the terms of the plea agreement.
1
We note that Carpenter was charged with and entered a written guilty plea to domestic
abuse assault second offense in violation of section 708.2A(3)(b), an aggravated
misdemeanor. The order accepting the plea referenced section “708.2A(3)(b) – Domestic
Abuse Assault – 2nd Offense.” According to the sentencing order, the court convicted
Carpenter of “2nd Offense Domestic Abuse Assault” in violation of sections 708.1 and
708.2A(3)(a). A violation of 708.2A(3)(a) is a serious misdemeanor. The prosecutor,
Carpenter, and his counsel were present at the sentencing hearing. Since Carpenter
“waived reporting and record of the Plea and Sentencing Hearing,” we are unable to
discern if the sentencing order’s reference to section 708.2A(3)(a) is a typographical error
3
The standard of review for guilty pleas resulting from counsel’s ineffective
assistance is de novo. See State v. Utter, 803 N.W.2d 647, 651 (Iowa 2011),
overruled on other grounds by Schmidt v. State, 909 N.W.2d 778, 789 (Iowa 2018).
“As with all ineffective-assistance-of-counsel claims, [the defendant] must
establish . . . counsel failed to perform an essential duty and prejudice resulted
from such failure.” Id. at 652 (citing Strickland v. Washington, 466 U.S. 668, 687
(1984)). Generally, we preserve claims of ineffective assistance of counsel for
postconviction-relief proceedings to allow the record to be developed. See State
v. Gomez Garcia, 904 N.W.2d 172, 186 (Iowa 2017); State v. Virgil, 895 N.W.2d
873, 879 (Iowa 2017). However, we may resolve the claim on direct appeal if the
record before us is adequate. See Virgil, 895 N.W.2d at 879. Here, we conclude
the record is adequate for review.
Courts are required to determine whether a factual basis exists before
accepting a plea. See Iowa R. Crim. P. 2.8(2)(b).
On a claim that a plea bargain is invalid because of a lack of
accuracy on the factual-basis issue, the entire record before the
district court may be examined. . . . Recourse to the entire record is
appropriate because . . . the relevant inquiry . . . involves an
examination of whether counsel performed poorly by allowing [the
defendant] to plead guilty to a crime for which there was no objective
factual basis in the record.
State v. Finney, 834 N.W.2d 46, 62 (Iowa 2013). “If an attorney allows a defendant
to plead guilty to an offense for which there is no factual basis and to waive the
right to file a motion in arrest of judgment, the attorney breaches an essential duty.”
or whether the State and Carpenter agreed at that time to have the charge reduced from
an aggravated misdemeanor to a serious misdemeanor.
4
State v. Philo, 697 N.W.2d 481, 485 (Iowa 2005). When this occurs, prejudice is
inherent. See State v. Schminkey, 597 N.W.2d 785, 788 (Iowa 1999).
Domestic abuse assault is an assault, as defined in section 708.1, which is
domestic abuse as defined in section 236.2(2)(a),(b),(c), or (d). See Iowa Code
§ 708.2A(1). As relevant here, a person commits an assault when, without
justification, the person does “[a]ny act which is intended to cause pain or injury to,
or which is intended to result in physical contact which will be insulting or offensive
to another, coupled with the apparent ability to execute the act.” Id. § 708.1(2)(a).
“Domestic abuse,” as is applicable to the offense of domestic abuse assault in this
case, is an assault as defined in section 708.1 between household members who
resided together at the time of the assault. Id. § 236.2(2)(a). Relevant here,
“household members” is defined as “persons cohabitating.” Id. § 236.2(4)(a).
Sexual relations between the parties while sharing the same living quarters is one
factor used to determine whether parties were cohabitating within the meaning of
the domestic abuse statute. Virgil, 895 N.W.2d at 880 (citing State v. Kellogg, 542
N.W.2d 514, 518 (Iowa 1996)).
Carpenter claims his counsel was ineffective by allowing him to plead guilty
to domestic abuse assault without a factual basis because there is no clear
evidence in the record showing that the assault occurred between household
members residing together at the time of the assault. We disagree. In an affidavit
attached to the original complaint, a police officer states “The defendant and the
victim are in an intimate relationship together.” The complaint form states the
relationship is between “family/household members who have lived together within
the last year.” In the field case report attached to the trial information, the officer’s
5
narrative states that Ellis and the woman he assaulted were “in an intimate
relationship[2] with each other and she stays with him in his camps around the city
of Davenport.” The minutes of evidence state that at the time of the incident, “[t]he
pair were in an intimate relationship and living together.” In his written guilty plea,
Carpenter admitted there is a factual basis for the charge and that he “had
intentional offensive contact with another, who would qualify as a domestic partner
under the law, such contact being an ‘assault.’” He also accepted the minutes of
evidence as substantially true as to the elements of the charge but did not admit
to “any type of felony element.”
Although Carpenter admitted the woman would qualify as a “domestic
partner,” he points out such term is not used or defined in the domestic-abuse
statute. In State v. Hodges, this court, relying on a dictionary definition of “domestic
partner,”3 concluded there was a sufficient factual basis in the record for Hodges’s
guilty plea to domestic abuse assault because the defendant characterized the
woman he assaulted4 as a “domestic partner” in his written guilty plea. Hodges,
2012 WL 470210, at *1-2. We see no reason to depart from Hodges and therefore
reject Carpenter’s argument on this point.
2
An “intimate relationship” may provide a basis for domestic abuse, see Iowa Code
§ 236.2(2)(e), but not domestic abuse assault, see id. § 708.2A(1), which only references
section 236.2(2)(a), (b), (c), or (d) but does not include 236.2(2)(e).
3
“The term ‘domestic partner,’ is defined as one member of an unmarried cohabiting
couple.” State v. Hodges, No. 11-0913, 2012 WL 470210, at *1 (Iowa Ct. App. Feb. 15,
2012), further review denied (April 10, 2012) (citing Merriam-Webster’s Collegiate
Dictionary 371 (11th ed. 2006)).
4
The record indicated the woman was Hodge’s fiancée and that they lived together.
Coupled with Hodges’s characteriztion of the fiancée as his “domestic partner,” the court
inferred that they “were household members who resided together.” Hodges, 2012 WL
470210, at *1.
6
Carpenter also argues his counsel was ineffective by allowing him to plead
guilty to domestic abuse assault without a factual basis because “there is no fact
to support that the ‘offensive conduct’ was done without justification, as required
in the charging statute, Iowa Code § 708.1(2).” The officer’s affidavit included in
the complaint states, “The defendant did knowingly and willingly, seriously injure
the victim by hitting her in the face repeatedly with an open hand and grabbed her
by her arms and threw her to the ground. The victim sustained serious injuries to
her face, arms, legs, ribs, and buttocks from the incident.” The field case report
indicates Carpenter got into a verbal argument with a woman, he “started to hit her
with an open hand in the face several times,” and he “then began to grab her by
her arms and threw her to the ground, where he continued to hit her with an open
hand.” The minutes of evidence provides a nearly identical recitation of the facts.
We see nothing in the record indicating the assault was justified. We therefore
reject Carpenter’s argument on this point.
Based on a review of the record before the plea court, we conclude there
was a sufficient factual basis for Carpenter’s plea. Therefore, his counsel was not
ineffective in allowing Carpenter to plead guilty. We affirm his judgment and
sentence.
AFFIRMED.
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243 B.R. 40 (1999)
In re Samuel O. & Lorraine B. STONE, Debtors.
Samuel O. & Lorraine B. Stone, Plaintiffs,
v.
Rubidell Resort Condominium, Defendant.
Bankruptcy No. 98-35482-7. Adversary No. 99-3090-7.
United States Bankruptcy Court, W.D. Wisconsin.
December 6, 1999.
Catherine J. Gloeckler, Janesville, WI, for plaintiffs.
JoAnne L. Krabbe, Stupar, Schuster & Cooper, S.C., Milwaukee, WI, for defendant.
MEMORANDUM DECISION
ROBERT D. MARTIN, Chief Judge.
The facts for this adversary proceeding are not in dispute. The parties have stipulated that: The debtors, Samuel and Lorraine Stone, filed a Chapter 7 petition on November 3, 1998. On February 10, 1999, the debtors were granted a discharge. The case was closed February 26, 1999, and reopened April 27, 1999, on the debtor's motion.
On May 25, 1986, the debtors entered into a land contract with Rubidell Recreation, Inc. to purchase a campsite described *41 as Unit 362 for $15,800. On October 29, 1991, Rubidell Recreation, Inc. assigned the land contract to Lantana Resorts, Inc. The debtors surrendered their interest in Unit 362 to Lantana Resorts, Inc. by quit claim deed on June 15, 1999.
The debtors' ownership and use of Unit 362 was pursuant to the Declaration of Condominium of Rubidell Resort Condominium under the Condominium Act, Chapter 703, Wis.Stats. The Bylaws, Article V of the Declaration at subparagraph B, provide for the ongoing assessment of condominium maintenance fees, the manner in which they are established and the rules for payment. Maintenance fees on the debtors' unit were $39.46 per month. When the debtors transferred the property to Lantana Resorts, the debtors owed $276.22 in post-petition maintenance fees and interest. The fees incurred pre-petition were discharged in the bankruptcy.
Unit 362 was not a dwelling unit. At the time of filing of the bankruptcy and subsequent to the bankruptcy, the debtors never physically occupied the unit. Furthermore, the debtors never rented Unit 362 to a tenant, either before or after filing bankruptcy.
On January 26, 1999, Rubidell's lawyer sent a letter to the debtors' lawyer, claiming nondischargeability of post-petition maintenance fees and suggested that debtors' counsel confer with her clients concerning the payment of future maintenance fees. This letter contained language required by the Fair Debt Collection Act, but did not specifically demand an amount to be paid or a date upon which payment of the post-petition fees would be due.
The debtors brought this adversary proceeding to determine that the post-petition maintenance fees are discharged. According to the debtors, the debt for post-petition condominium fees existed in an unliquidated, contingent form when the debtors filed their bankruptcy petition. The debtors also seek sanctions against Rubidell for violating the automatic stay by attempting to collect a debt against the debtors which arose before the commencement of the case. Rubidell defends by arguing that the debtors' post-petition maintenance fees are not dischargeable because the right to payment did not arise until post-petition, and that the letter from their lawyer to the debtors' lawyer was neither a demand for payment of a specific amount, nor an effort to collect a pre-petition debt.
First, we must determine whether the § 523(a)(16) exception to discharge applies to these facts. The parties seem to agree that it does not, and so do we. Section 523(a)(16) provides:
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 . . . for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor's interest in a dwelling unit that has condominium ownership or in a share of a cooperative housing corporation, but only if such fee or assessment is payable for a period during which . . . the debtor physically occupied a dwelling unit in the condominium or cooperative project; or . . . the debtor rented the dwelling unit to a tenant and received payments from the tenant for such period, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case. . . .
11 U.S.C. § 523(a)(16). In In re Lozada, 214 B.R. 558, 563 (Bankr.E.D.Va.1997, J. Mitchell) aff'd In re Lozada, 176 F.3d 475, 1999 WL 190279 (4th Cir.1999), the bankruptcy court discussed the scope of § 523(a)(16). Based on the U.S. Supreme Court holding in Patterson v. Shumate, the court stated that it was bound by the rule that "when a statute is clear and unambiguous on its face, the court must apply the plain meaning of the statute and enforce it according to its terms." Id. *42 citing Patterson v. Shumate, 504 U.S. 753, 757, 112 S.Ct. 2242, 119 L.Ed.2d 519 (1992). The court then determined that § 523(a)(16) was clear and unambiguous on its face:
Here, this court finds that § 523(a)(16) is clear and unambiguous on its face, and correspondingly, the court need not look behind the statute to consider legislative history. Congress in enacting § 523(a)(16) drafted a very precise and specific section. Had it intended to include homeowner's association assessments, it easily could have done so. But it did not . . . [I]t is not this court's dutyor province to rewrite Congress's enactments . . . Accordingly, this court holds that post-petition property owner's homeowner's assessments and fees do not fall within the provisions of § 523(a)(16).
Id.
Although our case does involve condominium fees, the debtors never physically occupied the unit, nor did they rent the unit or receive rent from the unit. Based on the stipulated facts, the clear and unambiguous language of § 523(a)(16) has not been met for three reasons: (1) the unit is not a dwelling unit; (2) the debtors never physically occupied the unit; and (3) the debtors never rented or received rent from the unit.
Thus, the post-petition condominium maintenance fees may only be discharged in the debtors' bankruptcy if this court finds that they arose pre-petition. The Seventh Circuit has held that postpetition assessments are dischargeable as pre-petition debt. In the Matter of Rosteck, 899 F.2d 694, 697 (7th Cir.1990). The court concluded that debt for future assessments based on a pre-petition contract to pay arose pre-petition, and was discharged in the debtors' Chapter 7 bankruptcy. Id. In reaching its decision, the Seventh Circuit relied on the definitions of "debt" and "claim" under the Bankruptcy Code:
The Code defines "debt" as a "liability on a claim." 11 U.S.C. § 101(11). The Code, in turn, defines a "claim" in pertinent part as a: (A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured. 11 U.S.C. § 101(4). . . . Under those broad definitions of claim and debt, the Rostecks had a debt for future condominium assessments when they filed their bankruptcy petition. It is true that the Rostecks did not actually owe money to Old Willow for assessments beyond those Old Willow had assessed before bankruptcy. But the condominium declaration is a contract . . . and by entering that contract the Rostecks agreed to pay Old Willow any assessments it might levy. Whether and now much the Rostecks would have to pay in the future were uncertain, depending upon, among other things, whether the Rostecks continued to own the condominium and whether Old Willow actually levied assessments. But, as we have seen, contingent, unmatured, unliquidated, and unfixed debts are still debts.
Id. at 696-697. This reasoning of the Seventh Circuit controls our analysis.
This reasoning was relied and elaborated upon by the bankruptcy court in In the Matter of Mattera, 203 B.R. 565, 571 (Bankr.D.N.J.1997, J. Wizmur) in a Chapter 13 context, which found that under a plain reading of the statutory definition of "claim," claim is defined in the broadest possible way. The court stated: "The Supreme Court has noted that Congress intended to adopt the `broadest possible' definition of a `claim', and that the Code `contemplates that all legal obligations of the debtor, [no matter how remote or contingent,] will be able to be dealt with in the bankruptcy case.'" The Mattera court further relied on the legislative history of § 523(a)(16) in determining that Rosteck was still good law:
*43 This section amends section 523(a) of the Bankruptcy Code to except from discharge those fees that become due to condominiums, cooperatives or similar membership associations after the filing of a petition, but only to the extent that the fee is payable for time during which the debtor either lived in or received rent for the condominium or cooperative unit. Except to the extent that the debt is nondischargeable under this section, obligations to pay such fees would be dischargeable. See Matter of Rosteck, 899 F.2d 694 (7th Cir.1990).
Id. at Footnote 9 citing H.R.Rep. 103-835, 103rd Cong., 2nd Sess. 41, U.S.Code & Admin.News 1994, pp. 3340, 3349-3350 (Oct. 4, 1994). Therefore, even though Congress subsequently amended the Bankruptcy Code, it indicated in the legislative history that In re Rosteck was still good law. In re Rosteck states the controlling law in the Seventh Circuit.
The defendants have argued that this court should not follow the Seventh Circuit, but rather should adopt the holding of the Fourth Circuit in In re Rosenfeld, 23 F.3d 833, 837 (4th Cir.1994). That may be a nice try, but this court is bound by the holdings of the Seventh Circuit when, as in this case, the facts are not distinguishable. The condominium maintenance fees that accrued post-petition were discharged in the debtors' Chapter 7 bankruptcy because under the contract, the debt was incurred pre-petition, although contingent and unliquidated at the time of filing.
The debtors urge us to sanction Rubidell under § 362(h). According to the debtors, the letter Rubidell's lawyer sent to debtors' lawyer was a willful violation of the automatic stay because it included an attempt to collect a debt for post-petition maintenance fees. Sanctions are not appropriate in this instance. "[A]s many courts have expressed, the widespread and legitimate disagreement among courts on the subject of the opportunity to discharge post-petition assessments precludes the imposition of sanctions." Mattera, 203 B.R. at 573. The defendants in this case made a strained but legitimate argument supported by case law that the debtors' post-petition assessments were nondischargeable. If Rubidell's counsel attempted to collect any debt from the debtors, they apparently did so in the good faith belief that the debt was nondischargeable and that the automatic stay did not apply.
ORDER
The court having this day entered its memorandum decision in the above-entitled matter,
IT IS HEREBY ORDERED that the plaintiffs' motion for summary judgment is GRANTED.
IT IS HEREBY FURTHER ORDERED that the plaintiffs' motion for sanctions is DENIED.
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--------------------------------------------------------------------------------
TENTH COURT OF APPEALS
Chief Justice
Tom Gray
Justice
Rex D. Davis
Al Scoggins
McLennan County Courthouse
501 Washington Avenue, Rm 415
Waco, Texas 76701-1373
Phone: (254) 757-5200 Fax: (254) 757-2822
Clerk
Sharri Roessler
December 21, 2016
In accordance with the enclosed Memorandum Opinion, below is the judgment in the numbered cause set out herein to be entered in the Minutes of this Court as of the 21[st] day of December, 2016.
10-14-00158-CV KAREN WEAVER AND STEPHEN WEAVER v. ERIC HRBACEK AND BRIDGET HRBACEK, INDIVIDUALLY AND AS REPRESENTATIVES AND SOLE HEIRS OF THE ESTATE OF LOUISE HRBACEK, DECEASED - ON APPEAL FROM THE COUNTY COURT AT LAW OF ELLIS COUNTY - TRIAL COURT NO. 11-C-3336 - SET ASIDE AND REMANDED - Memorandum Opinion by Justice Davis:
"This cause came on to be heard on the agreed motion to reverse and remand and the agreement of the parties, and the same being considered, because it is the opinion of the Court said agreement should be effectuated; it is therefore ordered, adjudged and decreed that the motion be and hereby is granted and the judgment of the court below be, and hereby is, set aside without regard to the merits and this cause is remanded to the County Court at Law of Ellis County, Texas, for entry of a judgment in accordance with the parties' settlement agreement. It is further ordered that costs are taxed against the party incurring same in accordance with the parties' agreement and that this decision be certi`fied below for observance."
|
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14 N.Y.3d 704 (2010)
MATTER OF KOWATCH
v.
JOHNSON.
Motion No. 2010-78
Court of Appeals of New York.
Decided March 25, 2010.
Motion for leave to appeal denied.
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#26680-rev & rem-DG
2014 S.D. 14
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
JONATHAN “JON” QUINN,
Individually and as Guardian
Ad Litem of H.Q., a Minor Child
and TAMMY FASCHING,
Individually, Separately
and Together, Plaintiffs and Appellants,
v.
FARMERS INSURANCE EXCHANGE,
a Member of FARMERS INSURANCE
GROUP OF COMPANIES; and TRUCK
INSURANCE EXCHANGE, a Member of
FARMERS INSURANCE GROUP OF
COMPANIES, Individually and
Together, Jointly and Severally, Defendants and Appellees.
****
APPEAL FROM THE CIRCUIT COURT OF
THE SEVENTH JUDICIAL CIRCUIT
PENNINGTON COUNTY, SOUTH DAKOTA
****
THE HONORABLE JEFF W. DAVIS
Judge
****
GEORGE J. NELSON
Rapid City, South Dakota Attorney for plaintiffs
and appellants.
THOMAS J. WELK
MICHAEL F. TOBIN
MEGHANN M. JOYCE
Boyce, Greenfield, Pashby &
Welk, LLP
Sioux Falls, South Dakota Attorneys for defendants
and appellees.
****
CONSIDERED ON BRIEFS
ON JANUARY 14, 2014
OPINION FILED 03/12/14
#26680
GILBERTSON, Chief Justice
[¶1.] Jonathan Quinn, individually and as guardian ad litem for H.Q., a
minor child, and Tammy Fasching, Appellants, appeal a circuit court order granting
summary judgment in favor of Appellees Truck Insurance Exchange and Farmers
Insurance Exchange. We reverse and remand.
Facts and Procedural History
[¶2.] Doug Hamilton owned over twenty commercial and residential
properties in Rapid City and Spearfish, South Dakota, through various property
companies, including Barker & Little, Incorporated (Barker & Little). Barker &
Little owned several multi-unit apartment buildings, including an apartment
building at 816 Saint Joseph Street in Rapid City. On January 12, 2004, Jonathan
Quinn and his family (Quinn) became residential tenants of Barker & Little in
Apartment #311 at 816 Saint Joseph Street.
[¶3.] In June of 2005, Quinn’s 31-month old daughter, H.Q., began to suffer
from hair loss, vomiting, inability to focus, and other health problems. Toxicity
tests revealed that H.Q.’s blood contained dangerously high levels of lead. Doctors
diagnosed H.Q. with lead poisoning and determined that H.Q. suffered permanent
brain and nervous system damage as a result of the lead poisoning. H.Q.’s doctor
instructed the family to leave their apartment and hospitalize H.Q. immediately. A
qualified inspector examined the apartment and informed Quinn that peeling and
flaking paint and paint dust in the apartment contained high concentrations of
lead.
-1-
#26680
[¶4.] In January of 2006, Barker & Little commenced a lawsuit in
Pennington County small claims court against Quinn for non-payment of rent. In
response, Quinn removed the small claims action to circuit court and filed a
counterclaim against Barker & Little for injuries H.Q. sustained as a result of high
concentrations of lead in the leased premises. Quinn alleged that Barker & Little
was negligent in failing to remove the peeling and flaking paint from the apartment
or warn Quinn and his family of the danger. Barker & Little tendered the claim to
Farmers Insurance Exchange (Farmers) and Truck Insurance Exchange (Truck) 1
through Dave Schmidt Insurance Agency. In a March 9, 2006 letter from George
Gnesda of Truck on behalf of Farmers, Farmers declined to defend Barker & Little.
[¶5.] The letter stated that Farmers would not provide defense or coverage
under the $1 million Commercial Apartment Policy it sold to Barker & Little.
Farmers asserted that an exclusion identified as “E6036,” entitled “Lead Poisoning
and Contamination Exclusion,” negated bodily injury coverage for lead-based paint
claims. The letter also indicated that the $5 million Umbrella Policy issued to
Barker & Little excluded coverage for lead-based paint claims by definitions or
language within the policy itself. The insurers made no appearance in the
underlying action.
[¶6.] Barker & Little retained counsel at its own expense and a jury trial
was set for August 12, 2009. In the midst of this action, Doug Hamilton’s business
ventures began to experience financial difficulties. By a letter dated August 3,
1. Both insurers are part of the Farmers Insurance Group of Companies.
Farmers provided Barker & Little’s Commercial General Liability Policy, and
Truck provided the Umbrella Policy.
-2-
#26680
2009, Doug Hamilton informed Farmers that Barker & Little intended on
confessing judgment. Farmers was once again invited to intervene and defend the
claims. On August 12, Farmers again declined to provide a defense for Barker &
Little in the action or to provide coverage for the injuries.
[¶7.] A confessed judgment was approved by the circuit court. The
judgment sum of $4,000,070.30 consisted of $1 million for damages owed to H.Q. for
her personal injuries, $1 million to each of H.Q.’s parents for their separate
personal damages, $1 million for H.Q.’s future medical care and loss of earning
capacity, and $70.30 for filing and court costs. Farmers and Truck did not formally
object to the judgment, otherwise seek to vacate or modify the judgment, or seek to
intervene.
[¶8.] Quinn asserted standing under SDCL 58-23-1 2 to bring all claims that
otherwise could have been brought by Barker & Little. Quinn brought an action for
execution upon the insurance contract against Farmers and Truck on June 1, 2011.
Quinn sought both a declaration that Farmers and Truck had a duty to defend and
indemnify Barker & Little in the action, and a judgment against Farmers and
2. SDCL 58-23-1 provides:
All liability insurance policies issued in this state shall provide
in substance that if an execution upon any final judgment in an
action brought by the injured or by another person claiming, by,
through, or under the injured, is returned unsatisfied, then an
action may be maintained by the injured, or by such other
person against the insurer under the terms of the policy for the
amount of any judgment recovered in such action, not exceeding
the amount of the policy, and every such policy shall be
construed to so provide, anything in such policy to the contrary
notwithstanding.
-3-
#26680
Truck for an amount equal to Quinn’s judgment against Barker & Little. Farmers
and Truck served their answer and counterclaim for declaratory judgment on
August 1, 2011. On December 7, 2012, Farmers and Truck moved for summary
judgment on the basis of exclusions in the applicable policies. Both parties filed the
appropriate affidavits and statements of disputed and undisputed facts.
[¶9.] After discovery, a hearing on the motion was held on December 21,
2012. At the hearing, counsel for Farmers and Truck requested a continuation on
the motion in order to submit a correct copy of the General Commercial Liability
Policy. Farmers explained that the version submitted to the court with the
accompanying affidavit on December 18, 2012 (December 18 Affidavit Policy) did
not include the Lead Poisoning and Contamination clause. Counsel for Farmers
apologized at the hearing, explaining that “it’s a long tangled web” and that there
was “obvious confusion” with his client.
[¶10.] Quinn objected to allowing Farmers and Truck more time to submit
another version of the policy, arguing that various inconsistent versions of the
policy had already been submitted to counsel and the court. The court allowed
Farmers and Truck until February 1 to provide another copy of the insurance policy
and scheduled another hearing on the motion for February 20, 2013. 3
[¶11.] The court issued an opinion letter on March 26, 2013, granting
Farmers and Truck’s motion for summary judgment. The letter opinion explained
that Quinn’s allegations in the underlying suit fell squarely within the Lead
Poisoning and Contamination Exclusion of the General Commercial Liability Policy,
3. This hearing was held telephonically and not transcribed.
-4-
#26680
as well as the Punitive or Exemplary Damages Exclusion Endorsement of the same
policy. Accordingly, the court held as a matter of law that Farmers had no duty to
defend or indemnify Barker & Little in the underlying action. The court stated that
it need not determine the applicability of the Total Pollution Exclusion, because the
action fell squarely within the language of the Lead Poisoning and Contamination
Exclusion.
[¶12.] Quinn appeals, arguing that the circuit court erred in granting
summary judgment, because Farmers failed to carry its burden of proving there
were no genuine issues of material fact and that Farmers was entitled to judgment
as a matter of law. We reverse and remand.
Standard of Review
[¶13.] Summary judgment shall be rendered “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.” SDCL 15-6-56(c). Accordingly,
this Court affirms a grant of summary judgment only if “there are no genuine issues
of material fact and the legal questions have been correctly decided.” Fix v. First
State Bank of Roscoe, 2011 S.D. 80, ¶ 18, 807 N.W.2d 612, 618 (citation omitted).
Analysis
[¶14.] 1. Whether the circuit court erred by granting Appellee’s motion for
summary judgment.
[¶15.] To make its summary judgment determination, the circuit court
analyzed specific language from “the General Commercial Liability Policy” and its
“attached exclusions,” including a specific “Lead Poisoning and Contamination
-5-
#26680
Exclusion.” Based on specific language from this document, the circuit court held
that the insurance contract clearly and unambiguously reflected the parties’
intention to exclude lead poisoning and punitive damages claims from coverage.
Because Quinn’s complaint fell squarely within these exclusions, the court held that
Farmers, as a matter of law, had no duty to defend or indemnify. Accordingly, the
circuit court granted summary judgment for Farmers. On appeal, Quinn asserts
that summary judgment based only on the final, unverified version of the alleged
insurance contract inappropriately foreclosed a genuine issue of material fact as to
the actual language used by the parties to the insurance agreement. We agree.
[¶16.] The central issue in this case was the scope of coverage of the general
commercial liability and umbrella policies issued to Barker & Little. “The scope of
coverage of an insurance policy is determined from the contractual intent and the
objectives of the parties as expressed in the contract.” Cole v. Wellmark of S.D., Inc.,
2009 S.D. 108, ¶ 14, 776 N.W.2d 240, 246 (emphasis added) (quoting St. Paul Fire
and Marine Ins. Co. v. Schilling, 520 N.W.2d 884, 887 (S.D. 1994)). As with other
contracts, there must be a meeting of the minds on all essential terms, which we
determine by “looking at the words and conduct of the parties.” Jacobson v.
Gulbransen, 2001 S.D. 33, ¶ 22, 623 N.W.2d 84, 90 (citation omitted). “[T]o find the
intentions of the parties, we rely on the contract language they actually used.”
Prunty Constr., Inc. v. City of Canistota, 2004 S.D. 78, ¶ 16, 682 N.W.2d 749, 756
(quoting Carstensen Contracting, Inc. v. Mid-Dakota Rural Water Sys., Inc., 2002
S.D. 136, ¶ 8, 653 N.W.2d 875, 877).
-6-
#26680
[¶17.] Despite the circuit court’s reliance on “the General Commercial
Liability Policy,” there was never one document stipulated to by both parties as the
true insurance policy in effect. During the course of this litigation, Farmers
submitted several documents to the court and opposing counsel, each of which
Farmers or Farmers’ counsel attested to as “exact duplications” or “true and correct”
copies of the General Commercial Liability Policy provided to Barker & Little. 4
These documents were not identical. Quinn points out that each version varied in
what forms and documents were attached or included, what coverage was provided,
and what premiums were charged. The circuit court apparently resolved this
inconsistency in the evidence by accepting the final version of the policy submitted
to the court as a true reflection of what was provided to Barker & Little as “the
insurance policy”. 5 The circuit court did not indicate why that specific version
should be relied on above any other.
[¶18.] The parties to this appeal did not agree on what coverage was intended
by the insurance contract between Barker & Little and Farmers. Farmers argued
that it was entitled to summary judgment because the parties’ intent, as reflected
4. The first document was accompanied by an affidavit from Mark Hamilton,
one of the custodians of record for Farmers and Truck. It was submitted to
the court on September 25, 2012. The second document was submitted with
an affidavit by counsel on December 18, 2012 (December 18 Affidavit Policy).
The third was submitted again with an affidavit by counsel on January 30,
2013 (January 30 Affidavit Policy). Additionally, the record includes portions
of another version, supplied by Barker & Little in the underlying action.
5. The circuit court only refers to “the Commercial General Liability Policy”
without actually indicating which version of the policy it was relying upon.
The parties seem to agree that the court relied on the January 30 Affidavit
Policy, submitted and sworn to by Farmers’ counsel, Michael Tobin.
-7-
#26680
by the January 30 Affidavit Policy, was to exclude coverage for lead poisoning.
However, this was not the only alleged memorialization of the parties’ intent before
the court. The circuit court appears to have rejected the earlier versions of the
policy submitted to the court and determined the intent of the parties based on the
January 30 Affidavit Policy. The court seemingly determined this version was the
true and correct version of the policy in effect. Because this process required the
circuit court to resolve the material factual dispute as to the actual language used
by the parties, the issue was not suitable for summary judgment. 6
[¶19.] Farmers argues on appeal that Quinn waived any argument regarding
the existence of a genuine issue of material fact because Quinn failed to raise this
issue below. Specifically, Farmers argues that if Quinn wanted to challenge the
circuit court’s use of the January 30 Affidavit Policy, Quinn should have produced
evidence that it was not the policy in effect during the relevant time period.
Alternatively, Farmers argues that Quinn should have prevented the court from
relying on that document by moving to strike it from evidence. By failing to take
these steps, Farmers argues that Quinn waived any argument as to the existence of
a material issue of fact. Farmers’ arguments are unconvincing.
6. As a Connecticut court stated, “The court cannot analyze what was meant by
the contract if it cannot determine from the evidence submitted what the
language of the contract was.” Bralite Holdings, LLC v. Dryfoos Envtl.
Consulting, LLC, No. HHDCV116022797S, 2012 WL 3869415, at *3 (Conn.
Super. Ct. Aug. 7, 2012) (citation omitted). “[A]bsent definitive contract
language, the determination of what the parties intended by their contractual
commitments cannot be decided as a matter of law on a motion for summary
judgment.” Id. (citation omitted).
-8-
#26680
[¶20.] To survive summary judgment, the nonmoving party “must present
specific facts showing that a genuine, material issue for trial exists.” Velocity Invs.,
LLC v. Dybvig Installations, Inc., 2013 S.D. 41, ¶ 10, 833 N.W.2d 41, 44 (citation
omitted). “[T]he party challenging summary judgment must substantiate his
allegations with sufficient probative evidence that would permit a finding in his
favor on more than mere speculation, conjecture, or fantasy.” Stern Oil Co. v.
Brown, 2012 S.D. 56, ¶ 8, 817 N.W.2d 395, 398 (citation omitted). Quinn resisted
summary judgment by arguing that there was a genuine dispute of material fact
surrounding what the parties understood and intended for the insurance policy to
cover. Quinn supported this argument by pointing to the inconsistencies in the
varying documents Farmers submitted as “the insurance policy.” 7 Quinn argued
that it depended on “what affidavit we’re looking at, what was submitted, and when
was it submitted” whether certain exclusions were attached to the policy at all.
Quinn offered further support by presenting correspondence from Farmers’ agent
outlining other exclusions applicable to the policy, but failing to mention any lead
poisoning exclusion. Quinn also presented statements from Farmers showing
confusion by Farmers as to what exclusions were actually included in the insurance
policy issued to Barker & Little. 8 These facts supported a finding, beyond mere
7. Farmers seems to argue that Quinn’s only objection to the court relying on
this final version was because the document was unverified. However, Quinn
objected to the court allowing Farmers time to submit this last version of the
insurance policy, not simply because it was unverified, but because of the
inconsistencies present in the various “exact copies” already submitted.
8. Quinn contends that Doug Hamilton could not be located to be deposed as to
his knowledge of the lead poisoning exclusion.
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#26680
speculation and conjecture, that the parties may not have had a meeting of the
minds about the lead poisoning exclusion.
[¶21.] Furthermore, Quinn was not required to move to strike the January 30
Affidavit Policy in order to argue on appeal that the circuit court’s reliance upon it
was misplaced. It is well settled that the court on a motion for summary judgment
is to view all the evidence in the case in the light most favorable to the nonmoving
party. Rumpza v. Larsen, 1996 S.D. 87, ¶ 9, 551 N.W.2d 810, 812. See also SDCL
15-6-56(c). The nonmoving party need not move to strike all evidence favorable to
the moving party in order to get the benefit of this rule.
[¶22.] The January 30 Affidavit Policy relied on by the court in granting
summary judgment was in conflict with other versions of the policy submitted to the
court. Applying the appropriate standard, the circuit court should have viewed the
different versions of the policy in a light most favorable to Quinn, the nonmoving
party. Had the circuit court done so, it would not have relied on specific language
from the Lead Poisoning and Contamination Exclusion clause, because that
language was not present in every version of the policy before the court.
[¶23.] A review of the record leaves significant doubt as to the actual content
of the insurance policy provided to Barker & Little. Even on appeal, Farmers’ brief
to this Court directs the Court to look at both the December 18 Affidavit Policy and
the January 30 Affidavit Policy in order to understand the insurance policy in effect
at the relevant time. Yet, each of these documents was separately submitted to the
court as a true copy of the insurance policy in effect. As asserted by Quinn, the
conflicting evidence of the actual language used by the parties to the insurance
-10-
#26680
agreement creates in this case a material question of fact. Accordingly, Farmers
failed to carry its burden of proving it was entitled summary judgment and the
circuit court erred in granting summary judgment.
Conclusion
[¶24.] The circuit court erred by granting summary judgment in this case.
Without resolving the factual inquiry as to which version of the policy before the
court accurately reflected the intent of the parties, the court could not determine as
a matter of law that the lead poisoning claim was excluded from coverage. It was
inappropriate for the circuit court to resolve this factual inquiry on motion for
summary judgment. Accordingly, we reverse and remand for proceedings consistent
with this opinion.
[¶25.] KONENKAMP, ZINTER, SEVERSON, and WILBUR, Justices, concur.
-11-
|
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312 B.R. 476 (2004)
In re Tawgih OLWAN, Debtor.
Citibank (South Dakota), N.A., Plaintiff,
v. Tawgih Olwan, Defendant.
Bankruptcy No. 03-23366-ess, Adversary No. 03-01695-ess.
United States Bankruptcy Court, E.D. New York.
July 12, 2004.
*479 Tawgih Olwan, Staten Island, NY, pro se.
MEMORANDUM DECISION DENYING THE MOTION OF CITIBANK (SOUTH DAKOTA), N.A. FOR DFAULT JUDGMENT
ELIZABETH S. STONG, Bankruptcy Judge.
Before the Court is the motion for default judgment (the "Motion") of Citibank (South Dakota), N.A. ("Citibank"), in the above-captioned adversary proceeding (the "Adversary Proceeding"). Citibank filed a complaint (the "Complaint") commencing this Adversary Proceeding against the debtor, Tawgih Olwan (the "Defendant") on December 17, 2003.[1] The Complaint seeks a finding that certain credit card debt owed to Citibank by the Defendant is nondischargeable, under Section 523(a)(2)(A) of the Bankruptcy Code, on grounds that the Defendant obtained the extension of credit through fraud, false pretenses, and false representations. Citibank also seeks a judgment in the amount of $1,857.47 plus interest to compensate it for its damages arising from the alleged fraud.
Pre-trial conferences in this Adversary Proceeding were held on February 24, 2004, and March 26, 2004. At the March 26, 2004, conference, the Court noted the Defendant's default on the record. Docket, Case No. 04-01695, March 26, 2004, Entry. On April 20, 2004, Citibank filed this Motion. A hearing was held on April 29, 2004 (the "Hearing"), at which counsel for Citibank appeared and was heard. *480 The Defendant did not appear at either pre-trial conference, serve an answer to the complaint, submit written opposition to the Motion, or appear at the Hearing to oppose the Motion. After consideration of the record and the relevant factors, the Motion is denied for the reasons set forth below.
I. JURISDICTION
The Court has jurisdiction to hear this adversary proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). The following constitutes the Court's findings of fact and conclusions of law.
II. BACKGROUND
The Defendant filed a petition (the "Petition") for relief under chapter 7 of title 11 (the "Bankruptcy Code") on October 14, 2003 (the "Petition Date"), and received a discharge on February 24, 2004. The Defendant's Petition lists monthly income of $1,500 and monthly expenses of $2,543. Petition, Schedules I and J. The Petition further shows that the Defendant had income of $20,754 in 2002, and income of $12,000 for the first nine months of 2003. Statement of Financial Affairs, Item 1. The Defendant lists $39,925 in unsecured nonpriority debt, and $19,725 of that amount is owed to Citibank arising from the credit account in question. Petition, Schedule F. The Complaint seeks a determination that $1,857.47 of this amount is nondischargeable, and a judgment in that amount plus interest. Complaint, ¶ 19.
Citibank alleges that, until May 2003, the Defendant regularly incurred charges and made payments on the account. Complaint, ¶ 7. Citibank asserts, and the record reflects, that the Defendant made two charges, on May 3, 2003, at EZ Tobacco in the amount of $267.47 and on May 11, 2003, at EZPass Prepaid Toll in the amount of $90, and took a $1,500 cash advance on June 10, 2003. Complaint, ¶ 7; see Motion, Exhibit (credit card statements for May 22, 2003, and June 24, 2003, closing dates). The record also reflects that during the May and June 2003 billing cycles, the Defendant did not make a minimum payment of $410, due on June 16, 2003. Complaint, ¶ 7. The record does not show that the Defendant failed to make any prior minimum payments on his account. See Motion, Exhibit (credit card statements for May 22, 2003, and June 24, 2003, closing dates).
Citibank asserts that these amounts are nondischargeable because "[t]he Defendant obtained the credit under false pretenses and false representations." Complaint, ¶ 8. Citibank argues that "[t]he use of the account by the [Defendant] is an express and implied representation that the [Defendant] has the intent and wherewithal to pay for the extended credit in accordance with the underlying credit terms." Complaint, ¶ 8. Citibank further states that several factors indicate that the Defendant had an intent to defraud, including:
a. The [Defendant] accessed the personal property over a short period.
b. No payment was made toward the charges.
c. Charges included luxury items and a large sum of cash.
d. The [Defendant] owns no real property and therefore no equity exists to access to pay creditors.
e. The [Defendant] has no personal property with value to liquidate to pay creditors.
f. The [Defendant] shows insufficient income on Schedule I to pay fixed expenses on Schedule J let alone credit debt of $40,000.
g. Although not filed until October 14, 2003, the [Defendant] spoke with the *481 Bank representatives on August 27, 2003 and advised [he] was filing bankruptcy. [He] provided [his] attorney name of Hanna & Vlahakis [sic]. Thus the bankruptcy and non payment intent is far closer to the advances than appears from the actual filing date.
Complaint, ¶ 8. For these reasons, Citibank argues that it is entitled to a finding that these three charges are not dischargeable, and a judgment in the amount of $1,857.47, plus interest.
III. DISCUSSION
A. The Standard for Default Judgment
In this Circuit, "a debtor named as defendant in an adversary proceeding in his own bankruptcy case is always deemed to have `appeared' in the adversary proceeding so as to require notice of a motion for a default judgment." Batstone v. Emmerling (In re Emmerling), 223 B.R. 860, 867 (2d Cir. BAP 1997). A default occurs if the defendant does not respond to the complaint within thirty days after the issuance of the summons. See Fed. R. Bankr.P. 7012(a) (requiring an answer within 30 days of the issuance of the summons). Here, the summons was issued on January 7, 2004, and no answer has been filed. Docket, Case No. 03-01695, Entry 2. Therefore, under Bankruptcy Rule 7055, Citibank may move for a default judgment. See Nicholas v. Boccio (In re Boccio), 281 B.R. 171, 174 (Bankr.E.D.N.Y.2002) (discussing the procedural requirements in adversary proceedings).
Bankruptcy Rule 7055 incorporates Federal Rule of Civil Procedure 55, which provides:
the party entitled to a judgment by default shall apply to the court therefor... If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary and proper.
Fed.R.Civ.P. 55(b)(2); see Fed. R. Bankr.P. 7055.
The Defendant's failure to answer the Complaint does not, standing alone, entitle Citibank to judgment. See In re Boccio, 281 B.R. at 174 (non-defaulting party not entitled to default judgment as a matter of right); American Express Centurion Bank v. Truong (In re Truong), 271 B.R. 738, 742 (Bankr.D.Conn.2002) (default is not granted as a matter of right). Indeed, "[a]s a general rule a ... court should grant a default judgment sparingly... when the defaulting party is appearing pro se." Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir.1993).
In determining whether a default judgment is appropriate, "the court should [accept] as true all of the factual allegations of the complaint, except those relating to damages." Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir.1981). The plaintiff is also "entitled to all reasonable inferences from the evidence offered." Id. Yet, the Court must still decide "`whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.'" Smith v. Household Fin. Realty Corp. of New York (In re Smith), 262 B.R. 594, 597 (Bankr.E.D.N.Y. 2001) (quoting C. Wright, A. Miller & M. Kane, FEDERAL PRACTICE & PROCEDURE: CIVil § 2688 at 280-81, 282 (1998)). And where the claim sounds in fraud, the court must evaluate the evidence presented to assure that the plaintiff has presented a prima facie case. In re Truong, 271 B.R. at 742. "[T]o satisfy the requirements of *482 the prima facie case the plaintiff must present evidence from which a factfinder could reasonably find every element that the plaintiff must ultimately prove to prevail in the action." Fisher v. Vassar College, 114 F.3d 1332, 1336 (2d Cir.1997) (en banc), cert denied, 522 U.S. 1075, 118 S.Ct. 851, 139 L.Ed.2d 752 (1998). Thus, the Court must consider whether the Complaint states a "legitimate cause of action," and whether Citibank has presented evidence to make out a prima facie showing of fraud under Section 523(a)(2)(A).
B. Establishing Nondischargeability Under Section 523(a)(2)(A)
Section 523 of the Bankruptcy Codes provides:
(a) A discharge under section 727 ... of this title does not discharge an individual debtor from any debt
...
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition.
11 U.S.C. § 523(a)(2)(A). At the outset, there can be no doubt that Citibank has stated a "legitimate cause of action" in contesting the dischargeability of the charges here. See 11 U.S.C. § 523(a)(2)(A); Universal Bank, N.A. v. Owen (In re Owen), 234 B.R. 857, 859 (Bankr.D.Conn.1999) (even where there has been a default, the court must consider whether the facts constitute a legitimate cause of action).
Exceptions to discharge under Section 523 are construed narrowly, and in favor of the debtor. Cazenovia College v. Renshaw (In re Renshaw), 222 F.3d 82, 86 (2d Cir.2000). See 4 COLLIER ON BANKRUPTcy ¶ 523.05 (15th ed. rev.2004) ("the statute should be strictly construed against the objecting creditor and liberally in favor of the debtor"). This rule of construction springs from a key objective of the Bankruptcy Codeto provide "the debtor `a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.'" In re Renshaw, 222 F.3d at 86 (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S.Ct. 695, 78 L.Ed. 1230 (1934)). This is because "[a] fundamental objective of bankruptcy law is to provide a fresh start for the honest but unfortunate debtor which is manifested by the general policy of discharge of a debtor's indebtedness." AT&T Universal Card Serv. Corp. v. Akdogan (In re Akdogan), 204 B.R. 90, 93 (Bankr.E.D.N.Y.1997). See Bank of Am. v. Jarczyk, 268 B.R. 17, 21 (W.D.N.Y.2001) ("exceptions to discharge under the Bankruptcy Code are narrowly construed against the creditor so as to fulfill bankruptcy's goal of giving the debtor a fresh start").
In seeking an exception to discharge, the creditor bears the burden of proof by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). The creditor must establish each of five elements: first, that the debtor made a false representation; second, that at the time it was made, the debtor knew it was false; third, that the debtor made the representation with the intent of deceiving the creditor; fourth, that the creditor justifiably relied on the representation; and finally, that the creditor sustained loss or damages that was proximately caused by the false representation. Chase Manhattan Bank, USA, N.A v. Giuffrida (In re Giuffrida), 302 B.R. 119, 123 (Bankr. E.D.N.Y.2003). Where, as here, the debtor *483 or has defaulted, the creditor must make out a prima facie case as to each of these elements in order to be entitled to relief, and a failure to make the necessary showing as to any element will prevent a default judgment from being entered. In re Truong, 271 B.R. at 742 (to obtain a default judgment, the factfinder must reasonably find that all necessary elements of the cause of action are satisfied based on the evidence presented). Accordingly, the Court will consider the elements in turn.
1. Whether the debtor made a false representation
The first element that must be addressed is whether the debtor made a false representation to the creditor. In re Giuffrida, 302 B.R. at 123. Citibank argues that the Defendant's use of a credit card, signature on a cash advance slip, or execution of a ready credit check constitutes a promise by the Defendant to pay the obligation incurred at some future time, and an implied representation that the Defendant has both the intent and the ability to repay.
This Court agrees with those courts in the Second Circuit, and the Fifth, Sixth, Eighth, and Ninth Circuits, that have found that "each time a cardholder uses his credit card, he impliedly represents to the issuing bank that he intends to repay the debt incurred." Jarczyk, 268 B.R. at 21 (citing cases). See In re Giuffrida, 302 B.R. at 125; Colonial Nat'l Bank USA v. Leventhal (In re Leventhal), 194 B.R. 26, 30 (Bankr.S.D.N.Y.1996); F.C.C. Nat'l Bank v. Cacciatore (In re Cacciatore), 1998 WL 412644, at *1 (E.D.N.Y.1998); Citicorp Nat'l Credit & Mortgage Serv. for Citibank, N.A. v. Welch (In re Welch), 208 B.R. 107, 110 (S.D.N.Y. 1997); AT&T Universal Card Serv. v. Mercer (In re Mercer), 246 F.3d 391, 404 (5th Cir.2001); Rembert v. AT & T Universal Card Serv. (In re Rembert), 141 F.3d 277, 280-81 (6th Cir.), cert. denied, 525 U.S. 978, 119 S.Ct. 438, 142 L.Ed.2d 357 (1998); Universal Bank, N.A. v. Grause (In re Grause), 245 B.R. 95, 99 (8th Cir. BAP 2000); Anastas v. American Savings Bank (In re Anastas), 94 F.3d 1280, 1284 (9th Cir.1996).
Different issues are raised, however, by Citibank's argument that, each time the Defendant accessed credit, he made an implied representation that he had the ability to repay the debt. While courts have reached different conclusions, this Court is persuaded that a debtor does not make an implied representation as to his or her present ability, as opposed to intent, to repay a debt when he or she makes a credit card charge or takes a cash advance. See In re Anastas, 94 F.3d at 1285 ("the representation made by the card holder in a credit card transaction is not that he has an ability to repay the debt"); In re Giuffrida, 302 B.R. at 125 ("Lack of ability to pay ... is not implied by credit card usage."); In re Jarczyk, 268 B.R. at 23 (use of a credit card carries no implied representation of an ability to pay); MBNA Am. v. Parkhurst (In re Parkhurst), 202 B.R. 816, 822 (Bankr.N.D.N.Y.1996) ("one should not imply any representation on the debtor's part concerning his/her ability to pay at the time the card was used."); In re Leventhal, 194 B.R. at 30 ("it is neither factually nor legally appropriate to imply or infer a representation of ability to repay"). But see First Card Serv., Inc. v. Flynn (In re Flynn), 184 B.R. 8, 9 (Bankr. E.D.N.Y.1995) ("Each time a credit card is used for payment, the cardholder represents that he has the ability and the intent to repay the debt.")
This conclusion is consistent with the circumstances under which many debtors may turn to consumer credit instruments such as credit cards and convenience *484 checks. As at least one court has pointed out, "an implication [of an ability to pay] is contrary to the notion of credit." Jarczyk, 268 B.R. at 23. In fact, "[o]ne of the principal reasons people rely on credit is a present lack of ability to pay." In re Murphy, 190 B.R. at 332. See In re Rembert, 141 F.3d at 281 ("To measure a debtor's intention to pay, without more, would be contrary to one of the main reasons consumers use credit cards: because they often lack the ability to pay in full at the time they desire credit."). Further, implying a representation of an ability to pay "has been criticized for improperly shifting the burden of proof, making the debtor a guarantor of her financial condition." In re Mercer, 246 F.3d at 404-05. And finally, such a representation "is not actionable under § 523(a)(2)(A) [because] it excludes from its scope `a statement respecting the debtor's ... financial condition.'" Id. at 405 (emphasis in original).
In sum, the record before the Court shows that Citibank has alleged facts sufficient to support a prima facie case that the Defendant made representations as to his intent to repay that proved to be false on May 3, 2003, when he charged $267.47 at EZ Tobacco, on May 11, 2003, when he charged $90 for EZPass Prepaid Tolls, and finally, on June 10, 2003, when he took a $1,500 cash advance. It does not, without more, support an inference that the Defendant made representations as to his ability to repay that proved to be false. Accordingly, the Court turns to the next factor, whether the Defendant knew that his representation concerning an intent to pay was false when made.
2. Whether the debtor knew the representation was false at the time it was made
The second element that must be established is that at the time the debtor made the implied representation of an intent to repay, the debtor knew the representation was false. In re Giuffrida, 302 B.R. at 123. "`A misrepresentation is fraudulent if the maker ... knows or believes... the matter is not as' represented, or `does not have the confidence in the accuracy of his representation' as stated or implied, or `knows ... he does not have the basis for his representation' as stated or implied." In re Mercer, 246 F.3d at 407 (emphasis in original) (quoting Restatement (Second) of Torts § 526). This is a critical element, as knowledge of falsity at the time that a statement is made marks the boundary between falsity and fraud.
Whether a debtor intended to defraud a creditor within the scope of Section 523 is measured by the debtor's "actual state of mind ... at the time the charges were incurred." See Field v. Mans, 516 U.S. 59, 70-72, 116 S.Ct. 437, 133 L.Ed.2d 351 (1995). Allegations of failure to perform are not a sufficient basis to infer a lack of intent to perform at the time the obligation was incurred. In re Leventhal, 194 B.R. at 31 (citing Chase Manhattan Bank v. Murphy (In re Murphy), 190 B.R. 327, 333-34 (Bankr.N.D.Ill. 1995)). Rather, the creditor "must set forth sufficient specific evidence of a misrepresentation by the Debtor upon which it relied." In re Akdogan, 204 B.R. at 95. The allegations must show that the "debtor knew full well that any professed intention to repay was false or was known by the debtor not to be well-grounded, and that he or she nonetheless deliberately used the card to obtain goods he or she knew were beyond his or her ability to pay." In re Parkkurst, 202 B.R. at 822. At the same time, "[b]ecause `few men will admit to a fraudulent intent, such intent must be established by circumstantial evidence.' " In re Giuffrida, 302 B.R. at 125-26 (quoting Manufacturers Hanover Trust *485 Co. v. Pannell (In re Pannell), 27 B.R. 298, 302 (Bankr.E.D.N.Y.1983)).
Courts consider many objective factors to discern the debtor's subjective intent, including circumstantial factors suggesting that a debtor did not intend to repay the debt at the time credit charges or cash advances were incurred. See In re Leventhal, 194 B.R. at 31. In Manufacturers Hanover Trust v. Dougherty (In re Dougherty), 143 B.R. 23 (Bankr.E.D.N.Y. 1992), the court identified several factors to consider, as follows:
1. The length of time between the charges and the filing of bankruptcy;
2. Whether an attorney has been consulted concerning the filing of bankruptcy before the charges were made;
3. The number of charges;
4. The amount of the charges;
5. The financial condition of the debtor when charges were made;
6. Whether the charges exceeded the credit limit of the account [ ];
7. Whether there were multiple charges on the same day;
8. Whether the debtor was employed;
9. The financial sophistication of the debtorf;]
10. Whether the debtor's spending habits suddenly changed; [and]
11. Whether the purchases were made for luxuries or necessities.
In re Dougherty, 143 B.R. at 25. Courts also consider whether the debtor had an objective ability to repay at the time the debt was incurred. See Jarczyk, 268 B.R. at 23 ("a complete lack of ability to repay is one factor that may be considered in determining the debtor's subjective state of mind at the time of credit card usage"); In re Dougherty, 143 B.R. at 25 (same); In re Giuffrida, 302 B.R. at 125 (same); In re Leventhal, 194 B.R. at 30 (same).
While these factors are neither exclusive nor dispositive, they provide useful guidance in considering whether Citibank has made out a prima facie case that the Defendant had the subjective intent to defraud Citibank at the time that the credit charges and cash advance were incurred. As described below, the Court concludes that Citibank has not made out a prima facie case that the Defendant knowingly made false representations concerning his intent to repay the charges at issue at the time the charges were made.
The length of time between the charges and the filing of bankruptcy
Evidence that a debtor accessed credit within a short period before filing for bankruptcy could support an inference that the debtor did not intend to repay those charges at the time they were made. See, e.g., 11 U.S.C. § 523(a)(2)(C). Here, the three charges at issue were made by the Defendant on May 3 and 11, and June 10, 2003, and the Defendant filed his bankruptcy petition on October 14, 2003. Complaint, ¶ 7. Citibank asserts that "the [Defendant] spoke with the Bank representatives on August 27, 2003 and advised [he] was filing bankruptcy.... Thus the bankruptcy and non payment intent is far closer to the advances than appears from the actual filing date." Complaint, ¶ 8. On this Motion, the Court accepts as true the well-pleaded factual allegations of the Complaint. See supra, p. 481. But even if, on August 27, 2003, the Defendant planned to file for bankruptcy, this does not support an inference that fifteen weeks earlier, when the credit card charges were made on May 3, 2003, and May 11, 2003, or eleven weeks earlier, when the cash advance was taken on June 10, 2003, the Defendant did not intend to *486 repay these debts. Accordingly, this factor does not support an inference of fraudulent intent.
Whether an attorney has been consulted concerning the filing of bankruptcy before the charges were made
Evidence that a debtor sought advice of counsel concerning bankruptcy, and then continued to access credit that would be discharged in bankruptcy, could lend persuasive support to an inference that the debtor did not intend to repay those charges at the time they were made. But here, Citibank has not alleged that the Defendant had consulted with an attorney about the possibility of filing for bankruptcy relief at the time the credit card charges and cash advance at issue were incurred. The record before the Court similarly does not show that the Defendant consulted with an attorney before the last transaction here at issue, which occurred on June 10, 2003. See Petition, Statement Pursuant to E.D.N.Y. LBR 2017-1 (indicating that the Debtor had his initial consultation with counsel on August 22, 2003). Accordingly, this factor does not support an inference of fraudulent intent.
The number and amount of the charges
Evidence that a debtor has made a large number of charges, or charges that are large and disproportionate in relation to the debtor's prior charges, could support an inference that the debtor did not intend to repay those charges at the time they were made. When such charges are made in close proximity to the debtor's bankruptcy filing, the inference would be even stronger. See, e.g., Jarczyk, 268 B.R. at 19-20 (summary judgment for debtor reversed where debtor charged over $7,000 in just over six months before filing for bankruptcy); In re Flynn, 184 B.R. at 9 (debt not dischargeable where, approximately three months before filing for bankruptcy, unemployed debtor took cash advances totaling $3,700 and entered into forty-two transactions for items including "china, toys, lingerie, and liquor," all in a period of less than five weeks).
Here, a total of just three charges, made over a period of five weeks, are at issue. Two are relatively modest in sizecredit card charges of $267.47 and $90and a third is a cash advance of $1,500, for a total of $1,857.47. This is a relatively small number of charges and total amount of charges, and these charges stand in contrast to the circumstances present in many successful challenges to dischargeability where debtors used their credit accounts freely and frequently in the period immediately preceding their bankruptcy filing. As a result, this factor does not support an inference of fraudulent intent at the time the charges were made.
The financial condition of the debtor when the charges were made
Evidence that the debtor's financial condition suffered a significant decline at or shortly before the time that credit was accessed, taken together with other evidence such as a failure to make any further payments to the creditor, could support an inference that the debtor resorted to credit to meet his or her expenses and did not intend to repay the charges when they were made. At the same time, evidence that the debtor had experienced a drop in income would not likely be sufficient to support an inference that the debtor did not intend to repay the charges when they were made, as this may well be one of the usual reasons that consumers maintain access to, and use, credit. See In re Murphy, 190 B.R. at 332 ("One of the principal reasons people rely on credit is a present lack of ability to pay."). See also, In re Rembert, 141 F.3d at 281 (the main reason debtors use credit cards is because, at the time they desire credit, they lack the ability to pay in full).
*487 Here, the record shows that the Defendant's income dropped from $20,754 in 2002 to $12,000 for January 2003 through the October 14, 2003, filing date. Statement of Financial Affairs, Item 1. Thus, while it is not clear when in 2003 the Defendant's change in income occurred, the Court may infer that the Defendant had suffered a significant decline in financial condition at the time the charges at issue were made.
The record also shows that, despite the Defendant's apparent drop in income, he continued to make payments on his account, and was current on his minimum payments, when each of the charges at issue was incurred. In particular, the record shows that the Defendant made a payment of $400 on his account on May 16, 2003shortly after the May 3 and May 11, 2003, charges were incurred. See Motion, Exhibit (credit card statements for May 22, 2003, and June 24, 2003, closing dates). The record further shows that a "Direct Access" payment of $275 was made to Citibank on May 7, 2003. See Motion, Exhibit (credit card statement for May 22, 2003, closing date). Finally, the record shows that the Defendant took the disputed cash advance on June 10, 2003, and did not miss a minimum payment on the account until June 16, 2003. See Motion, Exhibit (credit card statements for May 22, 2003, and June 24, 2003, closing dates). Where credit card debt is accumulated over a period of time in which a debtor makes his or her monthly payments, "such behavior is inconsistent with the intent to incur a debt without repaying it." In re Anastas, 94 F.3d at 1287. Thus, while the record supports an inference that the Defendant experienced a decline in his earnings at the time the disputed charges were made, that fact, viewed in the context of the payments on the account made by the Debtor in the same time period, does not support an inference of an intent to defraud.
Whether the charges exceeded the credit limit of the account
Evidence that the debtor's charges exceeded the credit limit of his or her account, particularly if the debtor had not previously exceeded the credit limit, could lend support to an inference that the debtor did not intend to comply with the other terms of the credit agreement at the time the charges were made. Here, the record before the Court shows that the Defendant had a credit limit of $19,500, and a cash advance limit of $3,300. See Motion, Exhibit (credit card statements for May 22, 2003, and June 24, 2003, closing dates). The record further shows that the Defendant's balance was within his credit limit after the May 3 and May 11, 2003, charges, but that his balance exceeded his credit limit by $221.13, or just over one percent, when he took the $1,500 cash advance on June 10, 2003. See Motion, Exhibit (statement for June 24, 2003, closing date). See Bethpage Fed.. Credit Union v. Michel (In re Michel), 164 B.R. 456, 462 (Bankr. E.D.N.Y.1994) (exceeding credit limit alone is not sufficient proof of fraud); Chittenden Trust Co. v. Griffis (In re Griffis), 29 B.R. 110, 111 (Bankr.D.Vt.1983) ("in order for a debt to be found nondischargeable, something more than exceeding a credit limit must be shown"). Compare In re Truong, 271 B.R. at 746 (where debtor's spending habits change drastically and the balance exceeds the credit limit for the first time during that period, it indicates an intent to deceive). As a result, this factor lends only slight support, if indeed it lends any at all, to an inference of fraudulent intent.
Whether there were multiple charges on the same day
Evidence that a debtor made multiple charges on the same day, like evidence *488 that the debtor made a large number of charges or charges that are large and disproportionate in relation to his or her prior charges, could support an inference that the debtor did not intend to repay those charges at the time they were made. And similarly, when multiple charges are made on the same day in close proximity to the debtor's bankruptcy filing, the inference would be stronger still. Cf. In re Truong, 271 B.R. at 746^7; In re Flynn, 184 B.R. at 9.
Here, the record shows that the charges at issue were not made on the same day. Rather, two were incurred just over a week apart, on May 3, 2003, and May 11, 2003. See Motion, Exhibit (credit card statement for May 22, 2003, closing date). And the third, a cash advance, was taken on June 10, 2003, nearly one month after the last credit charge. See Motion, Exhibit (credit card statement for June 24, 2003, closing date). Thus, this factor does not tend to support an inference of fraud.
Whether the debtor was employed
Evidence that the debtor was not employed at the time that credit was accessed, like evidence that the debtor's financial condition had suffered a significant decline, taken together with other evidence, could support an inference that the debtor did not have an intent to repay at the time that charges were made. But here too, this factor seems unlikely to form the basis for an inference that the debtor did not intend to repay the charges when they were made, because loss of a job may well be a trigger for the use of credit by debtors who have, at the time the credit is accessed, the intention to repay when they are able to return to regular employment.
Here, Citibank does not allege that the Defendant was unemployed when the charges at issue were made. In addition, the record shows that at the time the Debtor filed his bankruptcy petition, he had been self-employed for three years, with a monthly income of $1,500. See Petition, Schedule I. Further, the record shows that in 2002, the year before the Defendant filed his bankruptcy petition, his gross income was $20,754. Petition, Statement of Financial Affairs, Item 1. Accordingly, this factor does not support an inference of fraud.
The financial sophistication of the debtor
Evidence that the debtor was financially sophisticated, taken together with other evidence, could support an inference that the debtor did not have an intent to repay at the time that charges were made. But the financial sophistication of the debtor is not likely to be dispositive. Rather, the debtor's experience and sophistication in financial matters is likely to be the lens through which other factors, such as the proximity of the charges to the bankruptcy filing, whether an attorney was consulted before the charges were made, the number and amount of the charges and whether they were made on the same day, and whether they were for luxuries or necessities, are viewed.
Here, in all events, the record before the Court does not indicate that the Debtor is financially sophisticated. The Defendant does not list any financial investments such as annuities, stocks, bonds, or pension or profit-sharing plans, in his Petition. See Petition, Schedule B. Nor does the Petition show that the Defendant has any interest in real property. See Petition, Schedule A. As a result, the Defendant's level of financial sophistication does not lend support to an inference of fraud.
Whether the debtor's spending habits suddenly changed
Evidence that a debtor's spending habits suddenly changed and that, for example, he or she made an unusually large number of charges, charges in unusually large *489 amounts, or charges for unusual types of items, could support an inference that the debtor did not have an intent to repay at the time that charges were made. Here, the record does not show that the charges at issue were part of any such sudden change in the Defendant's spending habits. Nor does Citibank allege any sudden increase in the Defendant's use of his credit line in the period preceding his bankruptcy filing. While Citibank makes reference to the Defendant's use of his credit line as "regular" until May 2003, it does not explain how the charges at issue deviated from that pattern. See Complaint,¶ 7 ("the debtor accessed credit with regular usage and payments until May 2003"). And while the record does not show when the Defendant opened his Citibank account, the record shows that before the charges at issue were made, the Defendant had already accumulated a balance of more than $17,860 on his account, indicating that there had been significant usage in the past. Accordingly, this factor does not support an inference of an intent to defraud.
Whether the purchases were made for luxuries or necessities
Evidence that a debtor used credit to purchase luxury items, rather than necessities, could support an inference that the debtor did not have an intent to repay at the time that charges were made. Indeed, Section 523(a)(2)(C) of the Bankruptcy Code sets forth a presumption that debts owed to a single creditor aggregating more than $1,150 to purchase "luxury goods or services" in the sixty days before the order for relief in a bankruptcy case prior to filing a bankruptcy petition will not be dischargeable.
Here, it does not appear that the May 3, 2003, charge at EZ Tobacco, or the May 11, 2003, charge at EZPass Prepaid Toll, are charges for luxury items. As to the first, courts have been reluctant to treat expenses associated with tobacco use as luxury or extravagant items. See, e.g., Hamilton v. HEMAR Ins. Corp. of Am. (In re Hamilton), 2003 Bankr.LEXIS 1257, at *13 (Bankr.D.N.H.2003) (where debtor had attempted unsuccessfully to quit smoking, court would not take issue with amount of tobacco expense); In re Woodman, 287 B.R. 589, 592-93 (Bankr. D.Me.2003) (rejecting argument that tobacco expenses are unreasonable as a matter of law and finding that they must be viewed in light of the debtor's other expenses). As to the second, the record provides no reasonable basis to infer that the Defendant's EZPass Prepaid Toll charge was a luxury expense.
The Defendant's $1,500 cash advance on June 10, 2003, by contrast, raises different issues. Citibank asserts that the Defendant accessed a cash advance of $1,500 on June 10, 2003, and the Defendant has not interposed any opposition to these allegations. Complaint, ¶ 7. At the same time, the Defendant took the cash advance more than four months before filing for bankruptcy, and even if he had filed on the earlier date of August 27, 2003, when Citibank alleges that the Defendant advised "Bank representatives" that he would be filing for bankruptcy, the cash advance would still fall outside of the sixty-day statutory period for nondischargeability under Section 523(a)(2)(C). Accordingly, this factor lends some, but not great, support to the inference of an intent to defraud.
The debtor's ability to repay
Evidence that a debtor did not have an objective ability to repay his or her debts at the time that new charges were incurred could support an inference that the debtor did not have an intent to repay at the time the charges were made. As several courts have found, "a complete *490 lack of ability to repay is one factor that may be considered in determining the debtor's subjective state of mind at the time of credit card usage." Jarczyk, 268 B.R. at 23. See In re Dougherty, 143 B.R. at 25; In re Giuffrida, 302 B.R. at 125; In re Leventhal, 194 B.R. at 30.
At the same time, "[t]his factor alone cannot and should not be the sole basis for determining fraudulent intent." Jarczyk, 268 B.R. at 23. And "that the fact a debtor's credit card obligations may have exceeded his income at the time the charges were incurred does not per se sustain non-dischargeability." In re Parkhurst, 202 B.R. at 821-22. See In re Welch, 208 B.R. at 110-11. "If insolvency is to be used to draw such an inference, it must be hopeless insolvency sufficient to rebut any possibility of good faith." In re Dougherty, 143 B.R. at 26. Even where hopeless insolvency exists, a bankruptcy court is not required to infer fraudulent intent solely on such a finding. In re Mercer, 246 F.3d at 409. Indeed, the Ninth Circuit Court of Appeals admonished a bankruptcy court for improperly focusing on the fact that the debtor's living expenses exceeded his income, and using that as a basis for concluding that "[the debtor] could not have had any realistic hope of repaying his credit card debt." In re Anastas, 94 F.3d at 1286-87.
Citibank alleges that the fact that the Defendant "shows insufficient income on Schedule I to pay fixed expenses on Schedule J, let alone credit debt of $40,000" shows that he had an intent to defraud Citibank at the time the charges at issue were made. Complaint, ¶ 8. But the record does not show that the Defendant utterly lacked the ability to continue to make payments on his account, and indeed, the record shows that payments were made on the Defendant's account both shortly before and after the May credit card charges at issue were incurred. See Motion, Exhibit (credit card statement for May 22, 2003, closing date) (reflecting payments of $275.00 on May 7, 2003, and $400.00 on May 16, 2003).
Equally important, hindsight provides a deceptive perspective from which to consider whether a debtor had the ability to repay charges at the time they were incurred. This is because there is a risk that after a debtor files for bankruptcy, and with the benefit of hindsight, charges incurred by the debtor are much more likely to appear to have been beyond the debtor's ability to repay at the time they were made. Accordingly, only the strongest indications of an objective inability to repay at the time the debt was incurred should lend support to an inference of a subjective intent to defraud.
Here, the totality of the circumstances, including the relatively small size and number of the charges at issue, the payments on the Defendant's account, and the fact that the Defendant had income during the year in which the charges were made, do not rise to the level of a strong showing that, at the time the charges at issue were incurred, the Defendant lacked the objective ability to repay the charges. Accordingly, this factor does not support an inference of an intent to defraud.
IV. CONCLUSION
On a motion for a default judgment in an action under Section 523(a)(2)(A) of the Bankruptcy Code, the plaintiff must present a prima facie case from which "the factfinder could reasonably find every element that the plaintiff must ultimately prove to prevail in the action." Fisher, 114 F.3d at 1336. The Court should accept as time "all of the factual allegations of the complaint, except those relating to damages," and draw "all reasonable inferences from the evidence offered." Au Bon *491 Pain Corp., 653 F.2d at 65. Here, the undisputed allegations of the Complaint, and the reasonable inferences that they support, make out a prima facie case that the Defendant made false representations at the time that he accessed credit, by using a credit card and taking a cash advance. But those allegations and the reasonable inferences that they support do not support a conclusion that the Defendant knew that the representations were false at the time they were made. For those reasons, the Motion will be denied. An order in accordance with this Memorandum Decision shall be entered simultaneously herewith.
ORDER DENYING THE MOTION OF CITIBANK (SOUTH DAKOTA), NA. FOR DEFAULT JUDGMENT
Upon the filing of the motion for default judgment by Citibank (South Dakota), N.A. ("Citibank") on April 20, 2004, in this Adversary Proceeding commenced by Citibank on December 17, 2002, to determine the nondischargeability of a certain debt; and the Court having considered the arguments presented by the papers and the oral arguments of Citibank presented at the April 29, 2004, hearing; and for the reasons set forth in this Court's Memorandum Decision dated July 12, 2004; it is hereby
ORDERED, that the Debtor's motion for default judgment is denied.
NOTES
[1] When this Adversary Proceeding was commenced, the Defendant was represented by counsel, and Citibank served the Complaint on both the Defendant and his counsel. By motion dated February 6, 2004, the Defendant's counsel sought leave to withdraw as the Defendant's counsel. By memorandum decision and order dated April 6, 2004, the motion to withdraw was granted, on grounds, among others, that the Defendant refused to cooperate with counsel. See Docket, Case No. 03-23366, Entries 9 and 10 (Memorandum Decision and Order granting motion to withdraw).
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585 So.2d 1279 (1991)
BALDWIN COUNTY FEDERAL SAVINGS BANK
v.
CENTRAL BANK OF THE SOUTH, et al.
89-1457.
Supreme Court of Alabama.
June 28, 1991.
Rehearing Denied August 16, 1991.
*1280 Claude E. Bankester and Daniel T. Bankester of Wilkins, Bankester, Biles & Wynne, Bay Minette, for appellant.
Daniel G. Blackburn of Stone, Granade, Crosby & Blackburn, Bay Minette, for appellees.
PER CURIAM.
Baldwin County Federal Savings Bank ("BCFSB") appeals from a judgment in favor of the plaintiffs, Steve Odom, Diane Odom, and Central Bank of the South ("Central"), in a declaratory judgment action. The complaint was filed by Central and the Odoms to determine the status of two liens against undeveloped beachfront property in Baldwin County that is owned by the Odoms.[1]
On March 30, 1986, the Odoms bought the subject property from Gulf Sun Investments, Inc. ("Gulf Sun"). They did not immediately record their deed. On May 15, 1986, the Odoms mortgaged the property to Central. As with the Odoms' deed, the mortgage held by Central was not immediately recorded. On June 4, 1986, BCFSB, which had on May 22 obtained a judgment against Gulf Sun, recorded a certificate of that judgment. On July 16, 1986, the Odoms' deed and Central's mortgage were recorded.
After learning that BCFSB had filed its certificate of judgment against Gulf Sun, Central and the Odoms filed a complaint wherein they asked the court to declare that their separate interests in the property were superior to any rights BCFSB might have in the property by virtue of its judgment against Gulf Sun. After an ore tenus hearing, the trial court entered a judgment declaring that the Odoms' title to the property, as described in the deed from Gulf Sun, and Central's interest in the property, obtained through the mortgage from the Odoms, were "paramount and superior" to the rights of BCFSB and its successors and assigns. That judgment did not contain specific findings of fact. The court denied BCFSB's motion for a new trial, and BCFSB appeals.
BCFSB argues that, because it recorded its certificate of judgment before the recording of the Odoms' deed and Central's mortgage, its rights in the property are superior to those held by the Odoms and by Central.[2] Alternatively, it argues that the court's implicit finding that the Odoms' possession was such as to give it notice of the Odoms' unrecorded deed and Central's unrecorded mortgage before it filed the certificate of judgment is not supported by the evidence.
At the outset, we note that the scope of this Court's review regarding the resolution of fact questions in ore tenus cases is restricted:
"It is the law in Alabama that where evidence has been presented orally, a presumption of correctness attends the trial court's conclusion on issues of fact, if these conclusions were based totally or in part on oral testimony. This Court will not disturb the trial court's conclusions unless they are clearly erroneous and against the great weight of the evidence. Cougar Mining Co. v. Mineral Land & Mining Consultants, Inc., 392 So.2d 1177 (Ala.1981); Raidt v. Crane, 342 So.2d 358 (Ala. 1977); Adams Supply Co. v. United States Fidelity & Guaranty Co., 269 Ala. 171, 111 So.2d 906 (1959)."
First Alabama Bank v. Martin, 425 So.2d 415, 425 (Ala.1982). In addition, in cases such as this one, where the court did not make specific findings of fact, this Court will assume that the court made the findings necessary to support its judgment, unless such findings would be clearly erroneous *1281 and against the great weight and preponderance of the evidence. Hand v. Stanard, 392 So.2d 1157, 1159 (Ala.1980).
BCFSB's first argument concerns the provisions of Ala.Code 1975, § 35-4-90(a). It contends that, pursuant to that section, once a judgment creditor records its certificate of judgment, all subsequently recorded conveyances are void as to that judgment. It directs this Court's attention to Johnson v. Haleyville Mobile Home Supply, Inc., 477 So.2d 328 (Ala.1985), as support for its argument.
We do not agree. Section 35-4-90(a) gives judgment creditors, purchasers, and mortgagees priority over an earlier executed deed that has not been recorded only when the judgment creditor, purchaser, or mortgagee records its instrument without actual knowledge or constructive notice of the earlier conveyance. Therefore, simply winning the race to the courthouse and recording first is not enough to give a lienholder priority. It is also necessary that the judgment creditor, whose rights, if any, attach upon the act of recording, record its judgment without notice of the earlier deed. Smith v. Arrow Transp. Co., 571 So.2d 1003 (Ala. 1990); Department of Revenue v. Price-Williams, 545 So.2d 7 (Ala.1989); Gulf Oil Corp. v. Beck, 293 Ala. 158, 300 So.2d 822 (1974).
The language of § 35-4-90(a) indicates that it was drafted, at least in part, to prevent the result argued for by BCFSB:
"All conveyances of real property, deeds, mortgages, deeds of trust or instruments in the nature of mortgages to secure any debts are inoperative and void as to purchasers for a valuable consideration, mortgagees and judgment creditors without notice, unless the same have been recorded before the accrual of the right of such purchasers, mortgagees or judgment creditors."
Ala.Code 1975, § 35-4-90 (emphasis added).
The principle that recording first creates superior rights only when the recording party does not have actual knowledge or constructive notice of prior unrecorded conveyances is an equitable principle of long standing that has been consistently applied in cases involving judgment creditors. Smith v. Arrow Transp. Co., supra; Gulf Oil, supra; W.T. Rawleigh Co. v. Barnette, 253 Ala. 433, 44 So.2d 585 (1950); Burt v. Cassety, 12 Ala. 734 (1848). In Gulf Oil, this Court noted:
"`It results from this view, that as the judgment creditor had, by the possession of the complainant, constructive notice of her title, he acquired nolien upon the land, in virtue of his judgment.'"
293 Ala. at 160, 300 So.2d at 823 (quoting Burt, supra, at 739; emphasis in original).
The character or quality of possession that is sufficient to provide notice has been described as "whatever is sufficient to put a party on inquiry" concerning possible competing claims to the property. Gamble v. Black Warrior Coal Co., 172 Ala. 669, 672, 55 So. 190, 190 (1911); Jefferson County v. Mosley, 284 Ala. 593, 226 So.2d 652 (1969). Under § 35-4-90(a), judgment creditors and purchasers are "on the same footing." Gulf Oil, supra; Burt, supra; Therefore, the quantum of possession needed to put a judgment creditor on notice is no greater than that which is deemed sufficient to put a purchaser on notice. Id.
In addition, BCFSB's reliance on our opinion in Johnson, supra, is misplaced. The sole issue addressed in Johnson was whether a judgment creditor's rights had accrued upon the recording of the certificate of judgment even though the judgment debtor thereafter filed a motion for new trial. 477 So.2d at 328. That opinion mentioned only summarily that the judgment creditor did not have notice of the deed that had been executed before it recorded its certificate of judgment. Id., at 329-30. Thus, Johnson did not address the issue that is central to the instant case, i.e., whether the judgment creditor had notice of unrecorded conveyances before it recorded its certificate of judgment.
BCFSB also argues that the evidence does not support the trial court's implicit finding that there was sufficient *1282 evidence of the Odoms' possession of the property to put it on notice of the Odoms' deed and, by inference, the subsequent mortgage to Central.[3] The determination of whether BCFSB was chargeable with notice of the Odoms' possession was a question of fact within the equity jurisdiction of the court. Hodges v. Beardsley, 269 Ala. 280, 283-84, 112 So.2d 482, 484-85 (1959). Because the ore tenus rule applies to this case, the court's resolution of that question will not be reversed unless it is clearly erroneous or unsupported by credible evidence. May v. Campbell, 470 So.2d 1188 (Ala. 1985).
The most important evidence supporting the trial judge's decision showed that the Odoms had redeemed the property from a prior tax sale before BCFSB recorded its certificate of judgment. As a result, a certificate of redemption in the Odoms' names, dated May 19, 1986, was issued by the Baldwin County tax collector's office.[4] Documents that show the payment of such taxes have been held to be competent evidence of the payor's claim of title. Gantt v. Phillips, 262 Ala. 184, 77 So.2d 916 (1955). Mr. Odom testified that the property had been assessed in the Odoms' names from the time of the redemption. Thus, it appears that BCFSB had notice through the tax assessor's records that the Odoms claimed the property and had assessed it in their names.
There was also evidence of the Odoms' occupancy of the property that supports the trial court's determination that they "possessed" the property in a manner sufficient to put BCFSB on notice of their deed. An owner is not required to physically reside on property in order to establish possession. Instead, he need only make use of the property in a manner that is consistent with its nature. Hand, supra, at 1160; Turnham v. Potter, 289 Ala. 685, 271 So.2d 246 (1972). The subject property is undeveloped beachfront property. Steve Odom testified that, during the period between the date of the deed and the date that BCFSB recorded its certificate of judgment, he and his wife repeatedly visited the property and walked its boundaries. They had it surveyed and had the corners marked with stakes. They also visited the property with real estate agents to discuss how to develop it and used it for family outings, picnics, swimming, and sunbathing.
This Court has recognized "that it is difficult, if not impossible, to lay down any general rule as to what facts will in every case be sufficient to charge a party with notice or put him on inquiry." Jefferson County v. Mosley, 284 Ala. at 599, 226 So.2d at 656. However, in light of the evidence set out above, we cannot say that the trial judge's implicit finding that BCFSB had constructive notice of the Odoms' deed, and therefore also of Central's mortgage, Smith, supra, was clearly erroneous or not supported by credible evidence. Therefore, the judgment is due to be affirmed. Hand, supra.
AFFIRMED.
ALMON, SHORES, ADAMS and INGRAM, JJ., concur.
STEAGALL, J., concurs in the result.
MADDOX and KENNEDY, JJ., dissent.
HOUSTON, J., recused.
NOTES
[1] The complaint named an additional lienholder as a defendant. However, a default judgment was entered against that defendant and it has not appealed. Therefore, only the lien asserted by BCFSB will be discussed.
[2] There is no indication that BCFSB made any effort to have a lis pendens notice filed against this property during the pendency of its action against Gulf Sun, see Ala.Code 1975, § 35-4-131; neither has BCFSB made a claim or defense in this action that Gulf Sun's conveyance to the Odoms was made with intent to defraud creditors, see § 8-9-6.
[3] Where a third party is in possession of property, a purchaser of that property or a judgment creditor is charged with constructive notice of the nature of the third party's title. Smith, supra; Gamble, supra. Therefore, if BCFSB had notice of the Odoms' claims, it also had notice of the Odoms' mortgage to Central.
[4] Although there is nothing in the record on this point, we note that the redemption of property that had been sold at a tax sale is a matter within the jurisdiction of the judge of probate. Ala.Code 1975, § 40-10-120 et seq. Records concerning such redemptions are kept by the judge of probate. § 40-10-127.
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891 F.2d 294
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.Richard O. BURGESS, Plaintiff-Appellant,v.Hollie PIHL, the State of Oregon, Defendants-Appellees.
No. 89-35326.
United States Court of Appeals, Ninth Circuit.
Submitted Nov. 8, 1989.*Decided Dec. 4, 1989.
Before ALARCON, O'SCANNLAIN, and LEAVY, Circuit Judges.
1
MEMORANDUM**
2
Burgess filed this action under 42 U.S.C. § 1983 (1982) against Judge Hollie Pihl of the Oregon state circuit courts. The district court dismissed the action on the grounds that Judge Pihl possesses absolute immunity from damages for the actions complained of, pursuant to Stump v. Sparkman, 435 U.S. 349 (1978), and an action against the state of Oregon is barred by sovereign immunity, under Pennhurst State School & Hospital v. Halderman, 465 U.S. 89 (1984). We agree and affirm.
3
AFFIRMED.
*
The panel unanimously finds this case suitable for submission on the record and briefs and without oral argument. Fed.R.App.P. 34(a), Ninth Circuit Rule 34-4
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3
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508 So.2d 1014 (1987)
Fred R. De FRANCESCH
v.
RALPH PETERSON AND ASSOCIATES INSURANCE AGENCY and Comco Insurance Company.
No. 87-CA-145.
Court of Appeal of Louisiana, Fifth Circuit.
June 16, 1987.
Fred R. De Francesch, Laplace, in pro. per.
Peter M. Meisner, Porteous, Hainkel, Johnson & Sarpy, New Orleans, for defendant/appellee.
Before GAUDIN, WICKER and GOTHARD, JJ.
WICKER, Judge.
This appeal arises from a suit on behalf of Fred R. De Francesch (De Francesch), plaintiff/appellant, against Ralph Peterson and Associates (Peterson) and Comco Insurance Company (Comco), defendants,[1] in which De Francesch seeks damages for the alleged breach of an insurance policy issued to him by Comco, defendant/appellant, through its agent Peterson. Comco raised the peremptory exception of prescription. The trial judge sustained the exception and dismissed De Francesch's *1015 suit. On appeal, Comco's counsel raises an exception on behalf of Peterson styled "prescription and no right of action" for the first time. We affirm the trial court's dismissal of the suit insofar as it dismisses the demand against Comco, vacate and set aside the judgment as it relates to Peterson, and remand to the trial court for further proceedings.
On May 14, 1986 De Francesch filed suit against Comco and Peterson. Neither defendant answered the suit. Instead, Comco filed the exception of prescription asserting that since De Francesch's loss occurred on or about January 17, 1984, over one year prior to the filing of his suit, then L.S.A.-C.C. Arts. 3492 and 3493[2] necessarily mean that the action has prescribed for being over one year from the date of loss.
The trial judge sustained the exception and dismissed De Francesch's suit. De Francesch now appeals and specifies the following errors:
1. That the trial judge erred by concluding that Comco had to make a settlement offer, or admit liability for prescription to be interrupted;
2. That the trial court erred in finding that De Francesch was not lulled into a false sense of security and thus delayed by Comco in filing suit;
3. That the trial judge erred in failing to find fraud and deceit on behalf of Comco and the adjusters, and
4. That the trial court erred in concluding that the insurance contract had not been breached.
PRESCRIPTION AS IT RELATES TO COMCO
The testimony and evidence at the hearing on the exception of prescription set out the following: De Francesch reported a loss due to theft and vandalism to Comco, his insurer. Comco referred the claim to Allied General Adjusters, Inc. (Allied). Allied, through its adjuster, Penny Matthews (Matthews) sent requests for documentation and information about the loss to De Francesch.
On May 24, 1984 Matthews issued a report to Comco indicating that she was still awaiting documentation and that she had issued a 15-day notice to De Francesch stating that the file would be closed for failing to respond.
On July 10, 1984 Matthews reported to Comco that she was closing the file since she received no response from De Francesch to her 15-day letter. She indicated in her report that she would re-open the file should the information and documentation be forthcoming.
On January 17, 1985, exactly one year from the date of loss, Allied received the following documentation and information from De Francesch: Loss questionnaire; police report indicating a burglary and damage to property; an inventory, estimates and appraisals.
On March 27, 1985 Comco referred De Francesch's claim to a second adjuster, Crawford & Company. Judy Burris (Burris) was the Crawford claims adjuster. The claim was denied June 11, 1985. On May 14, 1986 De Francesch filed suit.
During oral argument on the hearing of the exception, Comco stated that the prescriptive period in the instant case was governed by statute and the policy which provide a period of one year from the date of the loss.[3]
*1016 At oral argument in the trial court, De Francesch agreed to the time limit for filing suit. However, he argued that an exception to that prescriptive period had been met. In particular he argued that he was given the impression that the insurance company would honor his claim.
De Francesch specifies as error the trial judge's conclusion that Comco had to make a settlement offer or admit liability for prescription to be interrupted. He argues[4] that other factors such as fraud, deceit or bad faith should have been considered by the trial judge.
The trial judge did not limit his consideration of whether an exception to prescription had been met by De Francesch solely on the grounds of whether the insurance company had promised to settle the claim or admitted liability. Instead, he considered the totality of the circumstances and specifically noted at the hearing that:
[t]he things that the Court was looking for was, did Comco or its agents admit liability in the case; did they make any settlement offers before or after the prescription period had run or any other factors which might have lulled the Plaintiff into a sense of security that his claim would be settled without needing an attorney and without having to file... The Court has considered the totality of all the things that happened and it has not been proven to my [sic] by a preponderance of the evidence that the prescriptive period was either waived, extended or that the Plaintiff was lulled into a sense of security that he should not file his suit. [Emphasis supplied.]
The trial judge heard De Francesch testify that he had several discussions with Matthews which led him to believe that his claim would be honored. De Francesch specifically testified that when Matthews told him to submit estimates he was led to believe that "as long as everything was in order the claim would be honored." He further related that "When I received the call from Ms. Burris it was my appreciation of the fact that she was calling me to say, your claim is still a valid claim and we're investigating it. You know, we really haven't made any decision on it yet and, you know, hey we're going to look at it. And that's the way I had approached it."
De Francesch argues that he was lulled into believing the claim would be paid; however, he did not testify that he was ever specifically promised by the insurer or their representatives or agents that the claim would in fact be honored. In addition, Burris testified that Crawford was simply investigating the claim.
In Canter v. Koehring Company, 283 So.2d 716 (La.1973) the Louisiana Supreme Court held that:
[w]hen there is evidence before the trier of fact which upon its reasonable evaluation of credibility, furnishes a reasonable factual basis for the trial court's finding, on review the appellate court should not disturb this factual finding in the absence of manifest error ... the reviewing court must give great weight to factual conclusions of the trier of fact; where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel that its own evaluation and inferences are as reasonable. The reason for this well-settled principle of review is based not only upon the trial court's better capacity to evaluate live witnesses (as compared with the appellate court's access only to a cold record), but also upon the proper allocation of trial and appellate functions between the respective courts. [Citations omitted] Id. at 724.
The trial judge had ample testimony upon which to base his conclusion that no exception to the prescriptive period existed. We find no fault with his conclusion that an extension, waiver or interruption of prescription[5]*1017 had not occurred or that the insurer had misled De Francesch into believing that the claim would be honored.
However, we have major difficulty in the judgment dismissing De Francesch's entire petition. Only Comco filed the exception of prescription at the trial court level. We have previously noted that:
The exception of prescription is a peremptory exception which must be specially pleaded by a party in order for it to be operative. This exception cannot be supplied by the court. C.C.P. Article 927; Lawyer's Title Services, Inc. v. Boyle, 308 So.2d 479, 481 (La.App. 4th Cir.1975); Bourgeois v. Ducos, 182 So.2d 539, 543 (La.App. 1st Cir.1966). Barnes v. Fireman's Fund Ins. Company, 399 So.2d 1318 (La.App. 4th Cir.1981) at 1319.
Comco's counsel filed an exception styled "prescription and no right of action" on behalf of Peterson for the first time on appeal, prior to oral argument. Although the exception is labeled that of prescription and no right of action, the ground for the exception is identical to the prescription exception urged by Comco at the trial court level. We therefore construe the exception to be one of prescription. L.S.A.-C.C.P. Art. 5051; Moore v. Shell Oil Co., 228 So.2d 205 (La.App. 3rd Cir.1969), writ refused (result is correct) 255 La. 278, 230 So.2d 587 (1970).
L.S.A.-C.C.P. Art. 2163 provides that:
[t]he appellate court may consider the peremptory exception filed for the first time in that court, if pleaded prior to a submission of the case for a decision, and if proof of the ground of the exception appears of record.
If the ground for the peremptory exception pleaded in the appellate court is prescription, the plaintiff may demand that the case be remanded to the trial court for trial of the exception. [Emphasis supplied.]
L.S.A.-C.C.P. Art. 2163 contemplates De Francesch's right to an evidentiary hearing on the exception of prescription. Fiorello v. Knecht, 334 So.2d 761 (La.App. 4th Cir. 1976), writ denied, 338 So.2d 300 (La.1976).
In his opposition to the appellate exception, De Francesch states that Peterson "has never been served," "did not know a suit was filed", and "never retained anyone to represent him." He indicates that the district court is the appropriate forum for "tie[ing] up any loose ends."
Although De Francesch has not made a formal demand seeking a remand, we believe that the thrust of his opposition brief is that the exception of prescription as it relates to Peterson be remanded to the trial court. Since there has been no evidentiary hearing on a prescription exception as it relates to Peterson and since De Francesch seeks a remand, we remand the exception to the trial court. See McKeithen v. LeBlanc, 491 So.2d 807 (La.App. 3rd Cir.1986).
Accordingly, the judgment of the trial court is affirmed insofar as it dismisses the demand of De Francesch against Comco, but the judgment is vacated and set aside as it relates to the other named defendant, Ralph Peterson and Associates Insurance Company, and this matter is remanded to the trial court for further proceedings. Appellant, De Francesch, is to bear all costs of this appeal. Assessment of other costs to await the final decision in this case.
AFFIRMED IN PART, VACATED AND SET ASIDE IN PART AND REMANDED IN PART.
NOTES
[1] The record does not indicate that Peterson was ever served with the suit. Peterson never filed an answer or any other pleading in the trial court. Comco and De Francesch are the only parties on appeal from the judgment of the trial court.
[2] L.S.A.-C.C. Art. 3492 provides that "[d]elictual actions are subject to a liberative prescription of one year. This prescription commences to run from the day injury or damage is sustained."
L.S.A.-C.C. Art. 3493 provides that "[w]hen damage is caused to immovable property, the one year prescription commences to run from the day the owner of the immovable acquired, or should have acquired, knowledge of the damage."
[3] The legislature mandates that the following language be written into the standard fire policy: "No suit or action on this policy for the recovery of any claim shall be sustainable in any court ... unless commenced within 12 months next after the inception of the loss." L.S.A.-R.S. 22:691. In addition, the Louisiana Supreme Court has relied on this one-year prescriptive period under the basic homeowners policy when made part of the standard fire policy. Grice v. Aetna Casualty Insurance Company, 359 So.2d 1288 (La.1978). See also Frederick v. Aetna Life & Cas. Co., 467 So.2d 600 (La.App. 3rd Cir.1985).
[4] He asserts that since he had filed his proof of claim on the one-year anniversary date that it constituted proof of a valid claim for which the insurance company must pay. In effect, he argues that the police report is sufficient to be deemed unrefuted evidence of liability. We do not address the merits of his claim.
[5] L.S.A.-C.C. Art. 3464 provides that "[p]rescription is interrupted when one acknowledges the right of the person against whom he had commenced to prescribe."
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NO. 07-04-0591-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL E
MARCH 1, 2006
______________________________
BOBBIE ADAMS HENSARLING, Individually and as Executrix of the
Estate of Charles Hensarling, CHERYL ANN JENNINGS, KEITH RANDALL HENSARLING, and CATHERINE BETH BRANSON,
APPELLANTS
v.
COVENANT HEALTH SYSTEM d/b/a COVENANT MEDICAL CENTER
and COLLIN LANGLITZ,
APPELLEES
_________________________________
FROM THE 99TH DISTRICT COURT OF LUBBOCK COUNTY;
NO. 2002-520,034; HON. MACKEY HANCOCK, PRESIDING
_______________________________
Before REAVIS and CAMPBELL, JJ., and BOYD, S.J. (1)
MEMORANDUM OPINION
Appellant Bobbie Adams Hensarling, individually and as executrix of the estate of
Charles Hensarling, Cheryl Ann Jennings, Keith Randall Hensarling, and Catherine Beth
Branson (collectively referred to as Hensarling) appeal from an order striking their medical
expert and granting summary judgment to appellees Covenant Health System d/b/a
Covenant Medical Center (Covenant) and Collin Langlitz (Langlitz) with respect to
Hensarling's claims for health care liability. The granting of summary judgment was
premised on the fact that without the testimony of Dr. Lawson Bernstein, Hensarling could
not raise a fact issue on the causation element of the claims. Therefore, the issue before
us is whether the trial court acted properly in striking Bernstein as an expert witness
because he was not qualified to testify on the element of causation. We affirm the
judgment of the trial court.
Background
Charles Hensarling was admitted to Covenant on August 8, 2000, with a
subarachnoid hemorrhage. Successful surgery was performed with respect to that
condition. However, Charles remained in the hospital for the next three weeks suffering
from complications such as pneumonia, respiratory failure, intermittent atrial fibrillation,
central line sepsis, deep vein thrombosis, and confusion. He was in intensive care until
September 1, at which time he was transferred to a regular room.
Around 11:45 that evening, Charles became agitated. Langlitz, the nurse on duty,
gave him a five mg. dose of Haldol intravenously pursuant to the order of Dr. Matthew
Wills. Shortly thereafter, Charles' oxygen saturation decreased to 60. Langlitz called Wills'
office and spoke to his nurse practitioner, who arrived at the hospital. Thereafter, Charles
was transferred back to intensive care and was intubated by Dr. Larry Warmoth. His
respiratory problems improved for a while but several hours later, his condition deteriorated
and he died around 6:30 a.m.
Hensarling sued the hospital, Langlitz, and Wills, alleging that Charles died as a
result of an adverse reaction to Haldol which Langlitz failed to recognize and treat. (2) In
support thereof, Hensarling submitted the expert report of Bernstein. The defendants
moved to dismiss the lawsuit, alleging Bernstein was not qualified to render the opinions
he gave in his report. The trial court initially denied the motions. However, the defendants
again moved to strike Bernstein as an expert and moved for summary judgment. The trial
court granted the motion on the basis that Bernstein was not qualified to render an opinion
on causation.
Standard of Review
A witness qualified as an expert by knowledge, skill, experience, training, or
education may testify in the form of an opinion. Tex. R. Evid. 702. However, a licensed
doctor is not automatically qualified to testify as an expert on every medical question.
Broders v. Heise, 924 S.W.2d 148, 152 (Tex. 1996); Cresthaven Nursing Residence v.
Freeman, 134 S.W.3d 214, 233 (Tex. App.--Amarillo 2003. no pet.). Nevertheless, an
expert may be qualified to testify even though he is not a specialist in the particular branch
of medicine for which the testimony is offered, Blan v. Ali, 7 S.W.3d 741, 745 (Tex. App.--Houston [14th Dist.] 1999, no pet.), as long as he has sufficient familiarity with the specific
subject matter. Broders v. Heise, 924 S.W.3d at 153. Thus, the trial court must measure
the doctor's expertise against the opinion being offered. SunBridge Healthcare Corp. v.
Penry, 160 S.W.3d 230, 237 (Tex. App.--Texarkana 2005, no pet.); Marvelli v. Alston, 100
S.W.3d 460, 474 (Tex. App.--Fort Worth 2003, pet. denied). The offering party has the
burden to establish that the witness is qualified, Gammill v. Jack Williams Chevrolet, Inc.,
972 S.W.2d 713, 718 (Tex. 1998), and we review the trial court's decision to strike the
testimony of an expert for abuse of discretion. Broders v. Heise, 924 S.W.2d at 151.
Analysis
Bernstein's curriculum vitae represents that he maintains a practice in "[f]orensic &
[n]europsychiatric consulting . . . with expertise in the assessment and treatment of closed
head injuries, stroke, toxic environmental exposure, chronic pain conditions and other
neurological/neuropsychiatric conditions." He testified at his deposition that he practices
"in the realm of neuropsychiatry, which is the practice of psychiatry when it's interfaced with
neurology, internal medicine and . . . neurotoxicology." The primary focus of his practice
is on the pharmacological management of those problems, which includes prescribing
drugs such as Haldol and the effects of those drugs. He did his residency in general
psychiatry and is board certified by the American Board of Psychiatry and Neurology in
psychiatry and by the American College of Forensic Medicine in forensic psychiatry. He
also teaches neuropsychiatry and trains neurosurgeons in identification and management
of drug and alcohol withdrawal and the identification and management of adverse
neurological sequelae from that condition, management of delirium, and informed consent
issues. The gist of his opinion on causation was that the Haldol caused a dystonic reaction,
the dystonic reaction caused respiratory distress, the respiratory distress caused a period
of hypoxia, the hypoxia produced ARDS (acute respiratory distress syndrome) and the
ARDS caused the death of Charles. However, Dr. Warmoth, who signed the death
certificate, determined the cause of death to be a pulmonary embolism. (3)
Bernstein testified that in terms of management of ARDS, he has provided
neuropsychiatric management for patients that have ARDS in the hospital but leaves the
management of the ARDS itself in the hands of specialists. He has had the opportunity to
diagnose ARDS on his own but rarely does so. Further, if he suspected that a patient had
a pulmonary embolus, he would bring it to the attention of the team of physicians he works
with but would not generally be the one to provide the treatment, although he has
diagnosed pulmonary embolus probably over a hundred times in his career. Bernstein
conceded that pulmonologists have more training than he does in matters related to the
lungs but contended that, under this unique set of circumstances, his experience and
training are equivalent to those of a pulmonologist. Generally in his practice, he is not
asked to determine the cause of death.
General experience in a specialized field is not sufficient to qualify a witness as an
expert. Reed v. Granbury Hosp. Corp., 117 S.W.3d 404, 410 (Tex. App.--Fort Worth 2003,
no pet.). It must be shown that the doctor possesses special knowledge as to the very
matter on which he proposes to give an opinion. Keo v. Vu, 76 S.W.3d 725, 731 (Tex.
App.-- Houston [1st Dist.] 2002, pet. denied). Bernstein's theory of causation involved a
sequential series of conditions stemming initially from a reaction to Haldol and ultimately
leading to his death. However, several steps in that sequential series involved the
development of specific pulmonary conditions which could develop without a reaction to
Haldol. While Bernstein had specific experience with the administration of Haldol and its
effects, the record shows he had general experience with both ARDS and pulmonary
embolus in terms of providing psychiatric assistance to patients suffering from those
problems. The trial court could have found that Bernstein did not have the specialized
knowledge necessary to establish the element of causation.
Hensarling relies heavily on our opinion in Cresthaven Nursing Residence v.
Freeman, 134 S.W.3d 214 (Tex. App.--Amarillo 2003, no pet.) for the proposition that "the
opinions of other doctors who agree with the expert in question are relevant to evaluating
the expert's qualifications and the reliability of his opinions." However, we noted the cause
of death offered by other doctors in that case only for the purpose of showing that the
opinions offered did not require an expertise peculiar to the fields of cardiology or urology
in determining that the trial court did not abuse it discretion in admitting the testimony. Id.
at 234. Whether or not we might have decided the matter differently from the trial court is
not the test. The propriety of the trial court's admission or exclusion of expert testimony is
tested against an abuse of discretion which means whether the court acted without
reference to guiding principles or rules. Daniels v. Vance, 175 S.W.3d 889, 894 (Tex. App.--Texarkana 2005, no pet.); Keo v. Vu, 76 S.W.3d at 730. We cannot find that it did so here.
Without the testimony of Bernstein on causation, Hensarling has failed to produce
more than a scintilla of evidence to defeat the no-evidence motion for summary judgment. (4)
See Crocker v. Paulyne's Nursing Home, Inc., 95 S.W.3d 416, 423 (Tex. App.--Dallas
1992, no writ). Accordingly, we must and do affirm the judgment of the trial court.
John T. Boyd
Senior Justice
1. John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment.
Tex. Gov't Code Ann. §75.002(a)(1) (Vernon Supp. 2005).
2. Wills was later dismissed from the lawsuit.
3. Without an autopsy, which the family apparently declined, this cause of death
cannot be confirmed.
4. The standard of review for a no-evidence motion for summary judgment is fully
discussed in Kimber v. Sideris, 8 S.W.3d 672, 674-75 (Tex. App.--Amarillo 1999, no pet.).
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NO. 07-10-0104-CR
IN THE
COURT OF APPEALS
FOR THE
SEVENTH DISTRICT OF TEXAS
AT
AMARILLO
PANEL B
JANUARY
12, 2011
_______________________________
OSCAR
HUERTA,
Appellant
v.
THE
STATE OF TEXAS,
Appellee
_______________________________
FROM THE
403RD DISTRICT COURT OF TRAVIS COUNTY;
NO.
D-1-DC-09-301111; HON. BRENDA KENNEDY, PRESIDING
_____________________________
Memorandum
Opinion
_____________________________
Before QUINN, C.J., and CAMPBELL and HANCOCK,
JJ.
Appellant, Oscar Huerta, appeals
from convictions for aggravated sexual assault of a child, indecency with a
child by contact and indecency with a child by exposure. Through a single
issue, he contends that his guilty plea was involuntary because the trial court
failed to admonish him about the possibility of his deportation and his
obligation to register as a sex offender. The State concedes the former
constitutes harmful and, therefore, reversible error but disputes the accuracy
of the latter issue. Given the States
concession and the evidence of record indicating that appellant was a Mexican
national when he pled guilty to the various counts, we reverse the judgment and
remand the cause. See VanNortick v. State, 227 S.W.3d 706, 714
(Tex. Crim. App. 2007) (holding reversal appropriate when the record showed that
the defendant was not a citizen at the time of his guilty plea). Our
disposition of the cause relieves us from having to address appellants
remaining argument.
Brian Quinn
Chief Justice
Do not publish.
|
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334 F.Supp.2d 462 (2004)
In re AMF BOWLING SECURITIES LITIGATION.
No. 99 Civ. 3023(PKC).
United States District Court, S.D. New York.
September 13, 2004.
*463 *464 Gandolfo V. DiBlasi, Robinson B. Lacy, Sullivan & Cromwell, New York City, for The Goldman Sachs Group, LP, Goldman, Sachs & Co., Morgan Stanley & Co., Cowen & Company.
Gandolfo V. DiBlasi, Robinson Burrell Lacy, Sullivan & Cromwell, LLP, New York City, for Schroder & Co., Inc.
Paul Vizcarrondo, Jr., Wachtell, Lipton, Rosen & Katz, New York City, for AMF Bowling, Inc., Richard A. Friedman.
Mark L. Weyman, Anderson, Kill, Olick & Oshinsky, PC, New York City, Michael J. Chepiga, Michael J. Chepiga, William Michael Regan, Simpson, Thacher & Bartlett, New York City, for Douglas J. Standard.
Bernard M. Gross, Deborah Gross, Law Office of Bernard M. Gross, PC, Philadelphia, PA, Todd S. Collins, Berger & Montague, PC, Philadelphia, PA, for Jacob Salzman, Hal Pugach.
MEMORANDUM AND ORDER
CASTEL, District Judge.
Presently before the Court are the motions of lead plaintiffs' counsel for final approval of two settlements and a plan of allocation and a motion on behalf of all plaintiffs' counsel for an award of attorneys' fees and reimbursement of expenses. In conducting the review mandated by Rule 23(e), Fed.R.Civ.P., I have a duty "to make a considered and detailed assessment of the reasonableness of proposed settlements...." Weinberger v. Kendrick, 698 F.2d 61, 82 (2d Cir.1982) (Friendly, J.), cert. denied, 464 U.S. 818, 104 S.Ct. 77, 78 L.Ed.2d 89 (1983). "The district court must consider many factors, including the complexity of the litigation, comparison of the proposed settlement with the likely result of litigation, experience of class counsel, scope of discovery preceding settlement, and the ability of the defendant to satisfy a greater judgment." In re Drexel Burnham Lambert Group, Inc., 960 F.2d 285 (2d Cir.1992) (citing Weinberger, 698 F.2d at 73-74 and City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir.1974)).
*465 Background Relevant to the Settlements and Plan of Allocation
This action was commenced on April 27, 1999 and arises out of an initial public offering ("IPO") of shares of AMF Bowling, Inc. ("AMF") in November 1997. On March 22, 2001, Judge Denny Chin denied a motion to dismiss the Second Amended Complaint, concluding that it stated claims under sections 11, 12 and 15 of the Securities Act of 1933 (the "1933 Act"). During the pendency of the action, AMF filed for bankruptcy.
By order of March 26, 2002, modified by order of May 21, 2002, Judge Chin certified a class pursuant to Rule 23(b)(3), Fed.R.Civ.P. The class consists of all persons, excluding the defendants, who purchased the common stock of AMF before February 26, 1999 pursuant to the Registration Statement for AMF's November 7, 1997 IPO or in the secondary market and traceable to the IPO.
Judge Chin approved the class notice by order of February 4, 2003. A total of 11,830 notices were either mailed directly to potential class members or were provided to nominees for distribution to their customers. A summary notice was published in the Wall Street Journal on February 28, 2003.
A Third Amended Complaint, the operative pleading, was filed on May 8, 2003. In the course of discovery, twenty fact depositions were conducted. Between the two sides, a total of ten experts were designated.
The case was reassigned to me on November 20, 2003. On November 21, I was advised that the individual defendants Richard A. Friedman and Douglas J. Stanard had reached an agreement-in-principle with counsel for the class. The agreement, I was advised, was achieved through the active assistance of the Honorable Nicholas Politan, a retired federal district judge who served as a privately-retained mediator. I express the Court's appreciation of Judge Politan's efforts to resolve this case.
At the November 21 conference, I set a schedule on the remaining defendants' proposed summary judgment motions and set a trial date, contingent upon the out-come of the motions, of July 6, 2004. The Goldman Sachs Group L.P., Goldman Sachs & Co., Morgan Stanley & Co., Cowen & Co., Schroder & Co., Inc., (the "Investment Banking Defendants") filed their motions for summary judgment and, per the November 21 schedule, oral argument was held on April 9, 2004.
In response to an inquiry from the Court following oral argument, the parties indicated a willingness to further discuss settlement before a Senior Judge of this Court. Judge Robert W. Sweet of this Court generously agreed to meet with the parties and, as a result of those discussions, a settlement-in-principle was reached between class counsel and the Investment Banking Defendants. I thank Judge Sweet for his willingness to serve and for the effective way in which he brought about the settlement. The participation of Judge Sweet and retired Judge Politan in the settlement process gives me confidence that they were conducted in an arms-length, non-collusive manner.
I preliminarily approved the Friedman and Stanard settlement on March 23 and set a final approval hearing for June 28 at 10 a.m. By order of June 17, 2004, I preliminarily approved the settlement with the Investment Banking Defendants and set the fairness hearing for September 9 at 10 a.m. I also rescheduled the Friedman and Stanard hearing for the same time and place.
Notice of the fairness hearing on the Friedman and Stanard settlement was *466 provided to the class as well as a separate notice of the settlement with the Investment Banking Defendants. Class members who had not exercised their right to opt out of the class when it was originally certified were afforded the opportunity of a back-end exclusion, i.e. the opportunity to exclude oneself from the class once the terms of a settlement are known. Rule 23(e)(3). I have examined the affidavit of Edward Sincavage and find that notice to the class has been provided in a reasonable and effective manner.
In total, there have been eleven requests for exclusion from the class. Eight of them appear to have been in response to the original class notice in February 2003. Two of them were in response to the Friedman and Stanard notice and one of them in response to the June notice of the settlement with the Investment Banking Defendants. The fact that so few class members have elected to opt out after knowing the terms of the settlements speaks well of their fairness.
Nor have class members who have elected to remain in the class objected to the settlements. Two statements of position have been received with respect to the fee application, which I will address. No class member appeared at the September 9 hearing.
I have examined the Friedman and Stanard settlement and the Investment Bank settlement separately and together in order to determine whether they are fair, reasonable and adequate to the members of the class. I know from my own experience with the case that the class plaintiffs faced serious difficulties in endeavoring to establish liability. For example,
. One of the central allegations of the lawsuit was that AMF had overstated the backlog of New Center Packages ("NCPs"), thereby creating the impression of stronger sales than was warranted by the facts. The Company had disclosed in the IPO Prospectus that the NCP number was 2,085 as of October 27, 1997. Subsequently, on February 19, 1998, the Company issued an earnings release disclosing that the then current NCP backlog number was 1,548. The reduction in such a short time span, the plaintiffs asserted, was suggestive of a misstatement of the October figure. But, despite the February 19 earnings release, the stock continued to trade above the IPO price until July 30, 1998. In the context of this litigation, these circumstances raised serious issues in terms of the materiality of the statements to investors and loss causation.
. Further, the defendants had advanced an argument that the February 19, 1998 earnings release put a reasonable investor on inquiry notice of an actionable misstatement and that the claims asserted by the class were time-barred.
. The class plaintiffs contended that the prospectus had misstated the state of the Asian markets and its likely effect on AMF's business. The defendants were prepared to mount a serious defense that the importance of the Asian markets had been properly disclosed to AMF investors and whatever was known of the Asian currency situation was known or knowable by the public, even if it was not disclosed in the prospectus.
I simply cite these examples to make the point that this would not have been an easy case for the plaintiffs. First, assuming some portion of their claims survived summary judgment, they would need to prevail at trial. If they had done so, they would have to survive post-verdict motions and an appeal. Although plaintiffs were *467 prepared to argue that damages ranged from $97-208 million, proof of loss causation and damages posed special problems for the plaintiffs.
I realize that the Investment Banking Defendants could have withstood a judgment greater than the amount of the settlement but this is of little significance in light of all other factors.
Considering the record as a whole, I find that the settlement with Friedman and Stanard of $8 million and the settlement with the Investment Banking Defendants of $12 million, a total of $20 million, to be fair, reasonable and adequate to members of the class. I find that the plan of allocation is simple and straightforward and treats all members of the class in an identical matter and is based upon input from plaintiffs' expert; it, too, is approved.
Attorneys' Fees
The Friedman and Stanard notice informed class members that counsel may seek up to 33 1/3% of the recovery as an attorneys' fee. The second settlement notice revised this percentage and indicated that counsel would seek 30% of the total aggregate settlement. The Los Angeles County Employees Retirement Association ("LACERA") urged the court to consider a "significantly lower fee award than 33 1/3%." It refers to the "growing trend of sub-25% fee requests". The New York State Teachers' Retirement System has joined in the statement of LACERA.
The Second Circuit has provided substantial guidance to the district courts on common fund fee applications in Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir.2000). Judge McLaughlin's opinion traces the evolution of judicial review of fee awards in class actions, from a percentage approach to a lodestar approach to a trend back in the direction of the percentage approach. Goldberger made plain that the district court has discretion to use either the lodestar or percentage in setting a fee award.
"In sum, we hold that both the lodestar and the percentage of the fund methods are available to district judges in calculating attorneys' fees in common fund cases. Of course, no matter which method is chosen, district courts should continue to be guided by the traditional criteria in determining a reasonable common fund fee".
Id. at 50.
Goldberger notes that "the lodestar remains useful as a baseline even if the percentage method is eventually chosen." It serves as "a `cross-check' on the reasonableness of the requested percentage." Id. "Of course, where used as a mere cross-check, the hours documented by counsel need not be exhaustively scrutinized by the district court.... Instead, the reasonableness of the claimed lodestar can be tested by the court's familiarity with the case (as well as encouraged by the strictures of Rule 11)." Id.
(1) The time and labor expended by counsel.
The first of the Grinnell factors "the traditional criteria in determining a reasonable common fund fee", id., requires consideration of the time and labor expended by counsel. I have examined the submissions of the two principal class counsel in this case, Berger & Montague, P.C. and Law Offices of Bernard Gross, P.C., and together the two firms have put in a total of 7,848.35 hours and a lodestar amount of $3,249,084; the highest billing rate for either of the two firms was $545 for Sherrie Savett and $545 for Bernard Gross. Most of the partner hours for the two firms were billed at $515 per hour or below, which I find to be reasonable. The fees of the following other counsel appear *468 reasonable and appropriate: Michael Etkin, bankruptcy counsel, with 256.70 hours at a top-billing rate of $525 per hour and a resulting lodestar of $109,876.50; Savett Frutkin Podell & Ryan with 41.8 hours at $495 per hour or less for a lodestar of $13,346; Klafter & Olsen with 28.75 hours at $495 per hour for a lodestar of $14,231.25; and the Law Office of Thomas Gettler with 268.90 hours at rates not exceeding $350 per hour for a lodestar of $94,115. The Law Offices of Donald B. Lewis reports 394.90 hours at a rate of $475 and a lodestar of $187,577 but the application fails, except in a perfunctory narrative devoid of dates or specifics, to describe the worked performed. With the possible exception of work on two subpoenae, Mr. Lewis' work appears to consist of conferrals with co-counsel and reviewing and offering editorial comments on the work of others. I do not consider a review by one set of class counsel of the work product of another set of class counsel to be recompensable, absent a particularized showing of the value that it added. A lodestar figure of $25,000 for this firm would appear to be generous. Deducting the amounts billed by this firm in excess of $25,000 would leave a modified total lodestar of $3,505,653.50. Because I will be awarding fees on a percentage basis, my lodestar calculation is solely for cross-check purposes.
(2) The magnitude and complexities of the litigation.
The next Grinnell factor focuses on the size and complexity of the case. All securities cases tend to be document intensive. This case was no different. It did center on one prospectus and two groups of defendants: (1) an officer of the issuer and (2) the investment bankers and one officer of one of the investment banks. I can identify no issue in the case of exceptional difficulty.
(3) The risk of the litigation.
There was a risk that summary judgment would have been granted in part. But, given the difficulty that a defendant faces in obtaining summary judgment, it is likely that some portion of a claim would have survived. As a section 11 case, plaintiff would not have needed to prove scienter on the part of the defendants. The Investment Banking Defendants would have put on a due diligence defense. As Goldberger points out, nearly all securities class actions settle. The risk of failure in this case was moderately low.
(4) The quality of representation.
There were quality and experienced counsel on both sides of this case. The arguments presented by both sides on the summary judgment motion were well prepared, well researched and cogently presented. From what I observed, the lawyers from Berger & Montague, P.C. and the Law Offices of Bernard Gross, P.C., particularly Mr. Collins and Ms. Gross, performed at a highly professional and competent level.
(5) The requested fee in relation to the settlement.
Plaintiffs' counsel seeks a fee on a percentage basis of 30% of the class recovery before deducting expenses, or a total of $6,000,000. Counsel points out that this is less than twice the lodestar. Claimed expenses are $905, 883.63 and thus the net recovery to the class would be $13,094,116.37.
(6) Public policy considerations.
Among the relevant public policy considerations is the need to encourage plaintiffs to undertake worthy cases that vindicate the rights of injured shareholders. I note *469 in this regard that the litigation has had a life of well over five years and class counsel is entitled to be well compensated for its diligent efforts.
While at least one other Circuit has viewed 25% of the recovery as a "benchmark", the Goldberger court noted that "we adhere to our prior practice that a fee award should be assessed based on scrutiny of the unique circumstances of each case", and "a jealous regard to the rights of those who are interested in the fund." Id. at 53 (citation omitted). Goldberger affirmed a fee award that amounted to 4% of the total recovery. Percentages of 11 to 19% have been awarded in cases with recoveries in the $50-75 million range. See Goldberger at 52. Judges of this court have approved fees of 20% of the recovery net of expenses, In re Independent Energy Holdings, 2003 WL 22244676 (S.D.N.Y. Sept 29, 2003), and 20% of the cash and stock, Varljen v. H.J. Meyers & Co., Inc., 2000 WL 1683656 (S.D.N.Y.2000). One court has approved a fee award of 8% of the total settlement amount. Klein v. Salvi, 2004 WL 596109 (S.D.N.Y. March 30, 2004). I recognize that there are judges of this court who have awarded higher percentages in other circumstances.
Here, taking account of the totality of circumstances outlined above, I have decided on a percentage of 25% of the gross settlement proceeds, which equals $5,000,000, plus expenses. This is 1.43 times the modified lodestar (or 1.36 times the unmodified lodestar). When the claimed expenses are included, attorneys' fees and expenses equal 29.5% of the total recovery. The amount awarded in relation to the overall settlement meets the standard in the Private Securities Litigation Reform Act of 1995 ("PSLRA") that the "[t]otal attorneys' fees and expenses awarded by the court to counsel for the plaintiff class shall not exceed a reasonable percentage of the amount of any damages actually paid to the class." 15 U.S.C. § 78u-4.
Expert Witnesses and Law Firm Expenses
Total counsel expenses of $905, 886.63 are sought in this case. Of this amount, $578,191.98 is for the fees paid to expert witnesses. The submissions presented to me aggregate all expert witness fees incurred by a law firm into a single line: $428,810.98 (Berger & Montague, P.C.) and $149,381 (Law Office of Bernard Gross, P.C.). This is wholly inadequate. I am directing that plaintiffs file with the court an affidavit with respect to the services of each expert as follows:
1. setting forth (a) a description of the services of the expert; and (b) the hours spent;
2. annexing any agreements with the expert and any billing statements rendered by the expert and stating whether the billing statements have been paid;
3. stating that the obligation of the law firm and/or its clients to compensate the expert in this case was not contingent upon the existence of a monetary recovery; and
4. setting forth in detail any instance in which the expert provided services to the law firm, its lawyers or clients without charging for the services, or, if the expert charged, any portion of the compensation that was not paid. (This will ensure that no payment in this case is a disguised payment for past services.)
I also find that the law firms' descriptions of their own expenses are inadequate. With respect to the expenses billed by each law firm, I will require the law firm to submit an affidavit making the disclosures that would be required to be *470 made to a client under ABA Formal Opinion 93-379 (1993) regarding charges other than professional fees. Specifically, the affidavit should recite whether any "general overhead" items, as defined in the Opinion, are included in the expenses, whether "disbursements" include any surcharge charged by the lawyer over the amount billed to the lawyer by the service provider and a statement that, in the case of "in-house services" provided by the law firm, no more than the direct cost associated with the service plus a reasonable allocation of overhead has been charged.
Expenses of Class Representatives
In connection with their services as lead plaintiffs, Jacob Salzman seeks $3,000 and Hal Pugach seeks $2,400. At the outset of this litigation, a lead plaintiff is required to certify, pursuant to the PSLRA, that he "will not accept any payment for serving as a representative party on behalf of a class beyond the plaintiff's pro rata share of any recovery, except as ordered or approved by the court in accordance with paragraph (4)." 15 U.S.C. § 78u-4(a)(2)(A)(vi). The referenced section of the PSLRA provides that the share of any final judgment "award to a class representative ... shall be equal, on a per share basis, to" the amount awarded to all other members of the class but goes on to state that "[n]othing in this paragraph shall be construed to limit the award of reasonable costs and expenses (including lost wages) directly related to the representation of the class to any representative party." 15 U.S.C. § 78u-4(a)(4). In the case of Mr. Pugach, there is only an affidavit of counsel stating that Mr. Pugach spent time in testifying as a witness and, in total, "spent at least 24 hours actively participating in this litigation." Counsel then asserts that Mr. Pugach's reasonable rate is $100 per hour. Mr. Salzman recites that the time he has spent sitting for his deposition and reading documents relating to the case and discussing them with counsel totals 30 hours for which he seeks compensation at $100 per hour.
Nothing presented to me places the time devoted to this case by the two class representatives into the category of a recoverable expense. Neither claims any out-of-pocket expense. There is no assertion that either lost time at work or gave up employer-granted vacation time. Neither cites to lost sales commissions nor missed business opportunities. While I am mindful of district courts in other districts permitting awards without such a showing, no circuit court precedent has been cited to me. The single case in this district that has been cited, Varljen v. H.J. Meyers & Co., 2000 WL 1683656 (S.D.N.Y. Nov. 8, 2000) stands for the straightforward proposition that "lost wages" may be recovered. Congress could have decided to allow class representatives to make fee applications based upon their time charges. But I find nothing in the statute to suggest that Congress intended to do so when it allowed class representatives to recover for their "reasonable costs and expenses (including lost wages)". Indeed, I submit that the better reading is that Congress did not want lead plaintiffs to gain a benefit in any respect, except as a member of the class they represented.
Conclusion
The settlements, totaling $20 million, and the plan of allocation are approved as fair, reasonable and adequate to the class. In the context of a litigation hard fought over five years, attorneys' fees are awarded in the amount of $5,000,000, representing 25% of the recovery and 1.43 times the modified lodestar. With respect to plaintiffs' counsel's expenses, counsel is directed to supplement the record with the affidavits described herein by September 15, *471 2004. If all of the requested expenses of counsel are ultimately allowed, fees and expenses will equal 29.5% of the class recovery. The application for "expenses" of lead plaintiffs Pugach and Salzman are denied.
SO ORDERED.
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
IVAN BRAZIER,
LINDANI MZEMBE, and
DEREK FIELDS,
Defendants-Appellants.
____________________
Appeals from the United States District Court for the
Northern District of Indiana, South Bend Division.
Nos. 15-cr-87-3, 15-cr-87-2, and 15-cr-87-1 — Robert L. Miller, Jr., Judge.
____________________
ARGUED APRIL 5, 2018 — DECIDED AUGUST 12, 2019
____________________
Before KANNE, ROVNER, and HAMILTON, Circuit Judges.
HAMILTON, Circuit Judge. In the early hours of September
8, 2015, in South Bend, Indiana, appellants Ivan Brazier, Derek
Fields, and Lindani Mzembe kidnapped, shot, and ruthlessly
beat Adrian Harris as he left his home. Charged with federal
kidnapping and firearms crimes, the three defendants were
tried and sentenced separately, but their appeals have been
2 Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
consolidated. The defendants do not challenge their convic-
tions for the underlying crimes of kidnapping or holding Har-
ris for ransom, and the two defendants convicted of being fel-
ons in possession of firearms do not challenge those convic-
tions. Defendants Fields and Mzembe were also convicted
and sentenced under 18 U.S.C. § 924(c) for using and dis-
charging firearms during a crime of violence. The district
court complied with circuit law applicable at the time of its
decisions. Later decisions by the Supreme Court and this
court, however, require us to reverse Fields’ and Mzembe’s
convictions and sentences under § 924(c). We also conclude
both of their cases should be remanded for resentencing.
Those defendants have raised other challenges to their sen-
tences that either are moot in light of our decision on the
§ 924(c) charges or fail to show any error or abuse of discre-
tion by the district court. We also affirm Brazier’s sentence.
I. Factual Background and Procedural History
A. Shooting, Kidnapping, and Ransom Demands
Around 3:30 a.m. on September 8, 2015, Ivan Brazier,
Derek Fields, and Lindani Mzembe attacked Adrian Harris as
he approached his car, which was parked in front of his home.
The defendants demanded money from Harris and beat him
with their guns. While picking Harris up from the ground,
one defendant accidentally shot him. The bullet broke apart
in Harris’s arm. Part of it went through his arm, and other bits
lodged in his elbow.
The defendants drove Harris and his car to Brazier’s house
where they used duct tape to bind, blindfold, and gag him. At
Brazier’s, the defendants continued to pistol-whip Harris and
demanded money. Nearly three hours into the kidnapping,
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269 3
the defendants forced Harris to call his sister and ask for a
ransom. He said, “I need some money, they got me.” His sis-
ter collected roughly $3,000 from friends and delivered it to a
house near Brazier’s. As two of the defendants went to get the
ransom, Brazier continued to beat Harris, kicking him, pour-
ing alcohol on his wounds, and twisting his injured arm.
When the other two returned, the defendants demanded
more money from Harris and continued to torture him. Harris
again called his sister, pleading, “Please, Sis. Hurry up. Hurry
up. I can’t take it anymore.”
After the second telephone call, Harris had trouble breath-
ing because of his broken nose and swollen mouth. One at-
tacker noticed Harris taking irregular breaths and became
concerned that he would die in the house. Hearing this, Har-
ris thought he might have a way out. He began “breathing
funny” on purpose, and one defendant said, “He can’t die in
here.” The defendants decided to drop him in an alley. They
cut the duct tape from his hands and feet but kept him blind-
folded. Harris asked a man on the street to help. Police were
dispatched at 8:53 a.m. They arrived, and an ambulance took
Harris to a hospital.
Less than one hour before the defendants released Harris,
a police officer had received a tip from a confidential inform-
ant that Fields had kidnapped someone. As police gathered
more information on the kidnapping, the officer who received
the tip saw a car drive in front of him with Fields and Mzembe
riding as passengers around 9:00 a.m. The officer stopped the
car and detained its passengers. The driver—not Fields or
Mzembe—agreed to allow the police to search the car. They
found a pair of bloody gloves, Harris’s car keys, and a black
4 Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
mask. The police also obtained a search warrant for Brazier’s
residence.
B. Trials and Sentencing
A federal grand jury indicted the defendants on charges of
kidnapping, making a ransom demand, possessing a firearm
in furtherance of a crime of violence, and being felons in pos-
session of firearms. See 18 U.S.C. § 875(a) (ransom demand);
§ 922(g)(1) (felon in possession of firearm); § 924(c)(1)(A)(iii)
(possessing firearm during and in furtherance of crime of vi-
olence); § 1201 (kidnapping). In three separate trials, juries
convicted Fields and Mzembe on all counts and convicted
Brazier on only the kidnapping and ransom charges.
Brazier was tried and sentenced first. One issue under the
Sentencing Guidelines was how to categorize Harris’s injuries
under U.S.S.G. §2A4.1(b)(2)(A), which adds four levels for
“permanent or life-threatening bodily injury,” two levels for
“serious bodily injury,” or three levels for something in be-
tween. Brazier argued that he should not receive a four-level
enhancement because the injury Harris suffered was not per-
manent or life-threatening. The court overruled the objection,
explaining that the defendants had denied Harris medical
care for his serious injuries and applying a four-level increase.
The court sentenced Brazier to a total of 444 months in prison,
with consecutive prison terms of 240 months for kidnapping
and 204 months for demanding a ransom.
The court sentenced Mzembe to a total of 528 months in
prison. The sentence included a combined 408 months for kid-
napping, demanding a ransom, and being a felon in posses-
sion of a firearm. The court then added a mandatory
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269 5
consecutive term of 120 months (ten years) under § 924(c) for
discharging a firearm in furtherance of a crime of violence.
The court sentenced Fields to a total of 656 months in
prison, with 536 months for the kidnapping, ransom, and
felon-in-possession charges, plus a mandatory consecutive
term of 120 months for his § 924(c) conviction. In imposing
the 536-month prison term, the court applied a two-level en-
hancement under § 2A4.1(b) because “a dangerous weapon
was used” in the crime.
The district court also ordered all three defendants to pay
more than $190,000 in restitution for Harris’s injuries.1 The
court held Fields, Mzembe, and Brazier jointly and severally
liable for that amount. Mzembe and Brazier objected to resti-
tution under the Mandatory Victim Restitution Act on the the-
ory that kidnapping is not a “crime of violence” subject to that
Act. The district court accepted this argument but decided to
order restitution under the Victim and Witness Protection
Act, 18 U.S.C. § 3663.
II. Analysis
The parties have briefed and argued a number of issues.
Developments since the district court’s sentencings and our
oral argument have reduced the number we must decide.
First, we reverse the § 924(c) convictions and sentences for
Mzembe and Fields because recent precedents establish that
the underlying offenses do not qualify categorically as crimes
of violence under that provision. We then reject two Sentenc-
ing Guideline challenges. Brazier alone argues that the district
1Of the total restitution amount, the court held that the first $61,491
should be paid to Harris himself, with any additional funds paid to insur-
ers who paid for his health care and related costs.
6 Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
court erred in applying the guideline enhancement for life-
threatening or permanent bodily injury. Fields’ challenge to
the guideline enhancement for possessing a firearm is under-
mined by our reversal of his § 924(c) sentence. Finally, we af-
firm the district court’s restitution orders against all three de-
fendants.
A. Section 924(c), Kidnapping, and Crimes of Violence
Fields and Mzembe challenge their convictions under
§ 924(c). That statute imposes a series of escalating mandatory
minimum sentences for “any person who, during and in rela-
tion to any crime of violence … uses or carries a firearm ….”
18 U.S.C. § 924(c)(1)(A). Section 924(c)(3) provides two alter-
native tests for a crime of violence:
For purposes of this subsection the term “crime
of violence” means an offense that is a felony
and—
(A) has as an element the use, attempted use, or
threatened use of physical force against the
person or property of another, or
(B) that by its nature, involves a substantial risk
that physical force against the person or
property of another may be used in the
course of committing the offense.
Subparagraphs (A) and (B) have become known more com-
monly as the “elements clause” and the “residual clause,” re-
spectively. Fields and Mzembe argue that they cannot be sen-
tenced under § 924(c) since their kidnapping and ransom of-
fenses do not categorically qualify as crimes of violence under
the elements clause and because the residual clause is uncon-
stitutional.
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269 7
Fields and Mzembe did not raise this argument at the time
of their trials, so we review for “plain error.” Plain-error re-
view requires the defendants to show (1) an error that has not
been intentionally waived; (2) that the error was “plain—that
is to say, clear or obvious;” (3) that the error “affected the de-
fendant’s substantial rights;” and (4) that the error “seriously
affects the fairness, integrity, or public reputation of judicial
proceedings.” Molina-Martinez v. United States, 136 S. Ct. 1338,
1343 (2016) (internal quotation marks omitted); United States
v. Olano, 507 U.S. 725, 73238 (1993).
The defendants did not intentionally waive this argument,
so we proceed to the second requirement that the error be
plain. That inquiry asks whether the error is plain at the time
of appellate consideration. Henderson v. United States, 568 U.S.
266, 279 (2013). In United States v. Davis, 139 S. Ct. 2319 (2019),
the Supreme Court resolved a circuit split and held that the
residual clause in the § 924(c) definition of a crime of violence
is unconstitutionally vague, so the defendants’ convictions
cannot be upheld on that basis. The other way to satisfy
§ 924(c) is the elements clause, but we explained in United
States v. Jenkins that kidnapping and holding a person for ran-
som does not categorically satisfy the elements clause. 849
F.3d 390, 393 (7th Cir. 2017). In short, kidnapping may be ac-
complished without force, by “inveigling” or “decoying” a
person without a threat of force, and by holding the person
simply by locking him or her in a room, again without threat
of violence. Id., quoting 18 U.S.C. § 1201(a).2
2 The 2017 decision in Jenkins was vacated by the Supreme Court and
remanded for further consideration of the residual clause issue in light of
Sessions v. Dimaya, 138 S. Ct. 1204 (2018). That issue was ultimately re-
solved by the Supreme Court in Davis, and these later developments do
8 Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
Under the categorical method of analysis that applies to
both the elements and residual clauses of the definition of
crimes of violence in 18 U.S.C. § 924(c), Mzembe’s and Fields’
convictions for kidnapping and demanding ransom cannot
support the mandatory consecutive sentences imposed under
§ 924(c). The categorical method focuses on the essential ele-
ments of the counts of conviction, requiring courts in essence
to focus on the least culpable conduct that could violate the
relevant statutes, without considering the actual facts of the
defendants’ conduct. In resentencing Mzembe and Fields on
the remaining charges, however, the district court will of
course be free to consider their actual conduct in exercising its
judgment and discretion under 18 U.S.C. § 3553(a).
Mzembe and Fields ask that we limit any remand to vacat-
ing only the sentences for the § 924(c) convictions, leaving in-
tact the sentences for the underlying offenses. That would ef-
fectively cut ten years from Mzembe’s and Fields’ sentences
without giving the district court the opportunity to reconsider
any other aspects of their cases. Sentences for multiple of-
fenses are generally treated as “packages,” so that when part
of the package is removed on appeal, the district court may
reconsider the overall sentencing package on remand. Pepper
v. United States, 562 U.S. 476, 507 (2011), quoting United States
v. White, 406 F.3d 827, 832 (7th Cir. 2005); see also United States
v. Barnes, 660 F.3d 1000, 1007 (7th Cir. 2011); United States v.
not cast any doubt on the Jenkins analysis of the elements clause as applied
to kidnapping and ransom offenses. See United States v. Jackson,—F.3d—,
2019 WL 3423363 (7th Cir. July 30, 2019) (deciding Jenkins’ appeal and re-
lated cases in wake of Supreme Court decision in Davis, ordering resen-
tencing without § 924(c) sentences). We have held these appeals for deci-
sion until the Supreme Court resolved the issue decided in Davis.
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269 9
Rivera, 327 F.3d 612, 614–15 (7th Cir. 2003); United States v.
Shue, 825 F.2d 1111, 1114 (7th Cir. 1987).
Mzembe and Fields argue that the general “package” rule
should not apply here because of another feature of circuit
law that has been overruled by the Supreme Court since they
were sentenced. Before 2017, our circuit precedent held that a
judge sentencing a defendant for a § 924(c) offense and other
related offenses was not permitted to take into account the
mandatory consecutive sentence under § 924(c) when decid-
ing the sentence on the other offenses. United States v. Rob-
erson, 474 F.3d 432, 437 (7th Cir. 2007) (prohibiting discounts
based on § 924(c) sentence in sentences for other convictions).
The district court said here that it was complying with that
rule when it sentenced Fields and Mzembe on the kidnap-
ping, ransom, and felon-in-possession convictions. In Dean v.
United States, however, the Supreme Court effectively abro-
gated our holding in Roberson and held that a sentencing court
is not prevented from considering a mandatory minimum
sentence under § 924(c) when deciding the sentence for un-
derlying offenses. 137 S. Ct. 1170, 1178 (2017). Dean held, in
essence, that § 924(c) does not prevent the sentencing judge
from considering multi-count sentences as a package.
Fields and Mzembe argue that because the district judge
complied with the now-abrogated Roberson rule, there is no
need for him to take a fresh look at their sentences on the un-
derlying offenses. The argument has logical force, to the effect
that two errors (each made by complying with controlling law
at the time) offset one another, so that a simple subtraction of
120 months from their total sentences will fix the problem en-
tirely. Complicating matters, though, reversal of the § 924(c)
convictions means that the two-level Sentencing Guideline
10 Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
enhancement under U.S.S.G. § 2A4.1(b)(3) for use of a danger-
ous weapon can properly apply to Fields and Mzembe. And
complicating matters still further, the district court did not ap-
ply that enhancement to Mzembe but did apply it to Fields.
At the time of sentencing, it was an error to apply it to Fields
in light of the § 924(c) conviction and sentence. Under U.S.S.G.
§ 2K2.4, cmt. n.4, courts should not impose a weapons en-
hancement on an underlying crime when the defendant has
also been convicted under § 924(c). Now that the § 924(c) con-
victions and sentences are being vacated, however, the dis-
crepancy is reversed: that enhancement will now apply to
both Fields and Mzembe. Looking at the situation in its en-
tirety, we conclude that there have been enough changes in
the legal sentencing frameworks that apply to both Fields and
Mzembe that complete resentencing for both defendants is
the appropriate course here.3
B. Sentencing Guideline Issues
1. Life-Threatening Injury Enhancement for Brazier
Next, we consider the district court’s application of two
guideline enhancements the district court applied to Brazier
and Fields at sentencing. In applying the Sentencing Guide-
line for kidnapping, the district judge applied a four-level sen-
tencing enhancement under U.S.S.G. § 2A4.1(b)(2)(A), finding
that Harris suffered a life-threatening bodily injury. Brazier
argues that he should have received only a two- or three-level
enhancement because Harris’s injuries were not actually life-
3Because the convictions under § 924(c) cannot stand in the wake of
Davis and Jenkins, we need not address defendants’ arguments that the
district court erred under Alleyne v. United States, 570 U.S. 99 (2013), and
Dean v. United States, 137 S. Ct. 1170 (2017).
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269 11
threatening. The judge’s characterization of those injuries as
life-threatening at sentencing was a factual finding that we re-
view for clear error. United States v. Snyder, 865 F.3d 490, 499
(7th Cir. 2017).
The district court did not clearly err in finding that Har-
ris’s injuries were life-threatening. The Guidelines define a
life-threatening injury in a way that focuses on the dangers
posed by kidnapping, and which was realized here:
“Permanent or life-threatening bodily injury”
means injury involving a substantial risk of
death; loss or substantial impairment of the
function of a bodily member, organ, or mental
faculty that is likely to be permanent; or an ob-
vious disfigurement that is likely to be perma-
nent. In the case of a kidnapping, for example, mal-
treatment to a life-threatening degree (e.g., by denial
of food or medical care) would constitute life-threat-
ening bodily injury.
U.S.S.G. 1B1.1, cmt. n.1(K) (2018) (emphasis added). Under
this definition, the enhancement in § 2A4.1(b)(2)(A) can apply
even if the injuries inflicted on the victim would not, if
properly treated, cause death on their own. The enhancement
can also apply when defendants have inflicted serious harm
and have exacerbated those injuries to create a risk of death
by denying a victim medical treatment for those injuries.
The facts in this case would not necessarily have required
the full four-level enhancement, but they provide sufficient
support for the district court’s factual finding that it should
apply. One defendant shot Harris in the arm. The defendants
then beat Harris on the head, repeatedly and with their guns,
12 Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
and kicked him as he lay helpless and bound on the floor.
They aggravated his gunshot wound by pouring alcohol on it
and yanking on his injured arm. After this abuse, Harris “got
to breathing funny,” and only after one of the defendants said,
“He can’t die in here” did they release him. Even though the
defendants thought Harris might be dying, they did not take
him to a hospital. Instead, they dumped him in an unfamiliar
alley. The person who called for emergency help for Harris
described his appearance: “He was drenched in blood. …
[H]is shirt was all covered and everything. … He was kind of
just walking around in a daze.” Harris’s blood was found in
Brazier’s kitchen on the floor, wall, and refrigerator.
Given the denial of medical care to the gunshot wound,
the beatings, Harris’s trouble breathing, and the blood found
covering his body as well as at several scenes and on items
found by investigators, the district court made the reasonable
determination that Harris sustained life-threatening injuries.4
Brazier contests none of these facts, but he argues in effect
that Harris’s injury could have been worse. He also cites cases
showing that the lines between the different-level enhance-
ments under similar guideline provisions for different levels
of injury are not sharp and that appellate courts stick to the
deferential review of such findings under the clear-error
standard. E.g., United States v. Eubanks, 593 F.3d 645, 651–52
(7th Cir. 2010) (affirming district court’s assessment of
4 On this record, the judge could have found in the alternative that
Harris suffered permanent injury, which the Guidelines treat the same as
a life-threatening injury. The defendants not only shot Harris, they also
aggravated the injury considerably. And at the time of Brazier’s trial, ten
months after the kidnapping, Harris still could not use or straighten his
arm.
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269 13
severity); United States v. Samuels, 521 F.3d 804, 816 (7th Cir.
2008) (same, collecting cases, all but one of which affirmed
district court findings). These cases do not show, as Brazier
argues, that Harris’s injuries must be characterized as serious
rather than life-threatening. If the district court had used a
two- or three-level enhancement, that might also have been a
reasonable application of the Guidelines, but the district court
did not clearly err in applying four levels, particularly in light
of the defendants’ denial of medical care to their kidnapping
victim. The court’s factual findings are sufficient to support
the enhancement, and those findings fall squarely in the prov-
ince of the district court.
2. Dangerous-Weapon Enhancement for Fields
As noted above, in sentencing Fields, the district court ap-
plied a two-level guideline enhancement because “a danger-
ous weapon was used” during the crime. U.S.S.G.
§ 2A4.1(b)(3). Fields challenges this enhancement because an
application note directs courts not to apply “any specific of-
fense characteristic for possession, brandishing, use, or dis-
charge of an explosive or firearm” when a sentence is imposed
under § 924(c). U.S.S.G. § 2K2.4, cmt. 4. Because Fields failed
to object to this enhancement at sentencing, we would review
for plain error. Rosales-Mireles v. United States, 138 S. Ct. 1897,
1904 (2018). Because Fields has prevailed in having his con-
viction and sentence under § 924(c) reversed, however, the in-
struction in comment 4 no longer applies and will not prohibit
application of the enhancement upon resentencing.
C. Order of Restitution
Finally, all three defendants challenge the judge’s decision
to order restitution because they are indigent. Brazier raises
14 Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
alone a separate issue, a challenge to the district court’s deci-
sion to hold the three defendants jointly and severally liable
for the entire amount of restitution. Brazier and Mzembe ob-
jected to the order in the district court, but Fields did not. We
review restitution imposed under 18 U.S.C. § 3663 for abuse
of discretion, but when a defendant like Fields has forfeited
an argument in district court, we review the district court’s
decision for plain error. United States v. Robers, 698 F.3d 937,
941 (7th Cir. 2012) (abuse of discretion standard); United States
v. Dokich, 614 F.3d 314, 318 (7th Cir. 2010) (plain error). We
need not dwell on the defendants’ different approaches in the
district court or the higher bar for plain-error review for this
issue. The district court did not act contrary to law or abuse
its discretion in imposing restitution, with joint and several
liability, on all three defendants.5
The defendants contend that the district court abused its
discretion by not adequately considering their “financial re-
sources,” “financial needs,” and “earning ability” as required
by § 3663(a)(1)(B) before imposing restitution. As defendants
acknowledge, however, the district court considered in depth
their financial resources. The court expressly recognized it is
unlikely they would pay the restitution in full. The court
chose to order restitution despite their poverty.
The decision to impose restitution despite the defendants’
likely inability to pay was within the district court’s discretion
under § 3663. The court noted that it was not “impossible that
5The government asks that we affirm the district court’s decision un-
der the Mandatory Victim Restitution Act, 18 U.S.C. § 3663A, which makes
restitution mandatory for crimes of violence. We do not reach this issue
because the judge did not abuse his discretion in ordering restitution un-
der § 3663.
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269 15
either might win the lottery” and that, in that case, each de-
fendant should “have to share that good fortune with the man
he shot, beat, bound and ransomed in 2015.” The defendants
point to several cases that discouraged imposing restitution
on indigent defendants. See, e.g., United States v. Jaroszenko, 92
F.3d 486 (7th Cir. 1996); United States v. Lampien, 89 F.3d 1316
(7th Cir. 1996). The problem with defendants’ reliance on
these cases is one we acknowledged in United States v. Day,
418 F.3d 746 (7th Cir. 2005): the Mandatory Victim Restitution
Act changed the calculus in these earlier cases because it
amended the Victim and Witness Protection Act provisions at
issue in this case. Section 3664(f)(1)(A) now orders courts im-
posing restitution to order restitution for “the full amount of
each victim’s losses as determined by the court and without
consideration of the economic circumstances of the defend-
ant.” We explained in Day that the amendment made clear
that “the law should be concerned first with the victim’s right
to full restitution and the defendant’s concomitant recogni-
tion of the duty to pay full restitution, albeit a largely sym-
bolic one.” 418 F.3d at 758.
Judge Miller took notice here of both the victim’s right to
restitution and the defendants’ financial circumstances, as re-
quired by § 3663. He also acknowledged the largely symbolic
nature of the restitution order. He then decided to award res-
titution “in the full amount of each victim’s losses as deter-
mined by the court and without consideration of the eco-
nomic circumstances of the defendant” as required by
§ 3664(f)(1)(A). We do not see in this record any indication
that the district judge abused his discretion in imposing a sub-
stantial but likely symbolic order of restitution against all de-
fendants.
16 Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269
Brazier alone challenges the district court’s decision to
hold all defendants jointly and severally liable for the full res-
titution amount. He argues that he should be on the hook for
only a percentage of the restitution amount that is propor-
tional to his culpability, which he calculates by comparing his
sentence duration to the length of his co-defendants’ sen-
tences. Section 3664(h) provides:
If the court finds that more than 1 defendant has
contributed to the loss of a victim, the court may
make each defendant liable for payment of the
full amount of restitution or may apportion lia-
bility among the defendants to reflect the level
of contribution to the victimʹs loss and economic
circumstances of each defendant.
The district court exercised its discretion under § 3664(h)
and chose to impose joint and several liability for all three de-
fendants. The law did not require the district court to accept
Brazier’s calculation of relative culpability based on compari-
sons of prison sentences. And in an interesting version of try-
ing to turn lemonade back into bitter lemons, Brazier com-
plains that his lighter prison sentence will be unfair to him
because he will probably have to start making monthly resti-
tution payments upon his release, years before Fields and
Mzembe will because of their longer prison terms.
The district court acknowledged Brazier’s arguments but
rejected them, finding that the facts that had led the court to
impose different prison sentences did not justify different res-
titution awards. We find no abuse of discretion here, particu-
larly since the focus of restitution, as distinct from prison
terms, is more on compensation for the victim than on precise
calibration of relative culpability among multiple defendants.
Nos. 16-4258, 17-1060, 17-1412, 17-2268 & 17-2269 17
Brazier was not convicted of a firearm offense like Mzembe
and Fields, but he played an integral part in kidnapping and
torturing Harris. He was present when Harris was shot. He
does not argue that he was unaware that Mzembe and Fields
carried guns, which might have rendered the accidental
shooting unforeseeable to him. And Brazier did nothing to
treat Harris’s wounds. In fact, he intensified Harris’s suffering
by continuing to beat and torture him after the gunshot, or by
at least aiding and abetting Harris’s beatings.
Finally, Fields points out that the district court made a fac-
tual error in setting his restitution amount about $3,000 above
the restitution amount for Mzembe and Brazier. The district
court itself recognized this mistake in ordering restitution for
Fields’ confederates. On remand, the court must adjust the
restitution amount for Fields.
Brazier’s conviction and sentence are AFFIRMED. The
§ 924(c) convictions of Fields and Mzembe are REVERSED.
Fields’ and Mzembe’s sentences are VACATED, and their
cases are REMANDED for resentencing consistent with this
opinion.
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145 F.Supp. 179 (1956)
INTERCHEMICAL CORPORATION, Plaintiff,
v.
Robert C. WATSON, Commissioner of Patents, Defendant.
Civ. A. No. 4434-53.
United States District Court District of Columbia.
August 24, 1956.
On Rehearing October 11, 1956.
*180 Wilmer & Broun, John H. Pickering, Washington, D. C., Byerly, Townsend & Watson, Ralph M. Watson, New York City, for plaintiff.
C. W. Moore, Sol., U. S. Patent Office, Washington, D. C., J. Schimmel, Washington, D. C., of counsel, for defendant.
WILKIN, District Judge (by designation).
In this action, brought under the provisions of Section 145 of Title 35 United States Code, the plaintiff, as assignee, seeks a judgment authorizing the defendant to grant plaintiff Letters Patent on claims 3, 4, 5, 9, 10, 13, 14 and 15 of the application of Arthur Booth, Serial No. 70,398, filed January 11, 1949.
The Booth application describes a printing paste for use in textile decoration, which comprises a pigmented dispersion of a substantially insoluble rubbery copolymer of acrylonitrile and butadiene, and a volatile, water-immiscible organic liquid. The purpose of the *181 composition was to avoid "crocking" (tendency to rub off), and improve color value, without creating an objectional "hand" (surface texture) to the finished fabric.
Plaintiff's brief says:
"In 1946-7, Arthur Booth perfected a formulation whereby pigmented oil-in-water emulsion printing pastes are protected against crocking. That development constitutes the invention forming the subject matter of the Booth application in suit. The applicant has discovered that the objectionable transfer of pigment from a cloth printed with an ordinary pigmented water-in-oil printing paste to the surface of another cloth rubbed against it can be overcome by dispersing in the oil phase of the paste a specific type of oil resistant rubbery material which is not soluble in the organic liquid of that oil phase. At the same time, the color value of the printing paste is enhanced (Application, pp. 1-3)."
The defendant refused to grant Letters Patent, and the grounds urged before this Court as justification for such refusal are:
(1) non-patentability of all the claims at issue because based upon new matter introduced into the disclosure by amendment, contrary to the express prohibition of Section 132 of Title 35 U.S.C.;
(2) non-patentability of all the claims because the subject matter thereof is described in the Lee patent (Def's Exh. No. 1-C);
(3) non-patentability of claim 3 because the subject matter thereof is described in the patent to Saunders, et al. (Def's Exh. No. 1-D);
(4) non-patentability of claims 4, 5, 9, 10 and 15 because the subject matter thereof would be obvious to one skilled in the art in the light of the teachings of the Kienle et al. and Gans patents (Def's Exh. No. 1-A, E);
(5) non-patentability of claims 13 and 14 because the subject matter thereof is described in the patent to Gans (Def's Exh. No. 1-E).
All the claims in the application specify that the composition contains a pigmented colloidal dispersion of an "unmasticated" rubbery copolymer. The principal issue in the case centers around the word "unmasticated," as a limitation upon the condition or character of copolymer. The original application did not contain the word "unmasticated." The claims as originally presented and prosecuted to a final rejection by the Examiner defined the composition as containing a colloidal dispersion of a rubbery copolymer.
After rejection, affidavits were submitted setting forth the results of tests made of the Saunders patent, which demonstrated that Saunders' composition contained a "Hycar" copolymer, which could not be used for textile printing. In order to differentiate, the application from the reference, it was first proposed to amend the claims to characterize the copolymer as "unmilled." When that term was objected to as confusing, the term "unmasticated" was then suggested in substitution. By order of the Commissioner, the term "unmasticated" was allowed as an amendment, and the claims were submitted in that form to the Board of Appeals.
In spite of the amendment, the Board of Appeals sustained the rejection order of the Examiner. The decision of the Board of Appeals was based upon a finding that the disclosure of the claims and specifications was inadequate, and that the amendment constituted new matter.
The plaintiff's contention before the Board was that in the practice of applicant's invention, as described in the specification "the use of an unmasticated rubbery copolymer is inherent." The applicant contended that the insertion into the claims, by way of amendment, of the adjective "unmasticated" was not new matter, and offered as evidence, in support of his contention, the affidavit of Doctor Zwicker (Pl. Exh. No. 1).
In presenting this issue in this Court, the defendant objected to the testimony *182 of Doctor Zwicker on the ground of incompetency. The deposition of Doctor Zwicker was received by this Court subject to the objection. This Court now rules that the Zwicker deposition is admissible because it tends to explain whether substances mentioned in the application were or were not masticated or milled.
The plaintiff offered only parts of the deposition, and the defendant then offered other parts of the deposition. The Court rules in that situation that the whole deposition is admissible. Federal Rules of Civil Procedure, rule 26(d) (4), 28 U.S.C.
On consideration of the whole deposition, and all the testimony, the Court finds that the plaintiff's evidence is unconvincing as to the sufficiency of the original specification. The law requires that inherency may not be established by possibilities or probabilities. The evidence must show that the inherency is necessary and inevitable. The plaintiff's case does not meet the requirements announced in Hansgirg v. Kemmer, 102 F.2d 212, 26 C.C.P.A., Patents, 937, and Forward Process Co. v. Coe, 73 App.D.C. 100, 116 F.2d 946.
The plaintiff's argument that "the use of an unmasticated rubbery copolymer is inherent" in the practice of applicant's invention, as it is described in the specification, seems to fall of its own weight. The argument and its assumptions are so extensive that it seems to justify the contention of the defendant that the specification was not sufficiently clear and explicit. The Court is constrained to find that the amendment did introduce new matter.
The determination of that issue in favor of the defendant sustains grounds for rejection (3), (4), and (5). The evidence, as to experiments conducted by the plaintiff, shows an improvement resulting from the plaintiff's composition over the references cited by the defendant, but improvement is not invention.
As to ground for dismissal of the complaint, No. (2), the Lee Patent (Def.'s Exh. No. 1-C), was not cited against the Booth application in the Patent Office. It was first cited as a reference in this Court. The Lee Patent was granted on June 26, 1951, which was subsequent to the filing date of the Booth application. The plaintiff contended in this court that Booth had made his invention before the Lee application was filed. The evidence was quite clear that Booth had done some work on a textile printing paste having dispersed in the oil phase an elastomer which was insoluble. But the defendant insisted that the evidence failed to show a reduction to practice by Booth prior to the filing date of the Lee application. The law is well settled that a party seeking to establish the date of invention at a time prior to the date of an anticipatory reference must establish the earlier date with certainty. Oliver Machinery Co. v. Gellman, 6 Cir., 104 F.2d 11; Thompson v. American Tobacco Co., 4 Cir., 174 F.2d 773.
Consideration of the evidence presented on this point by the plaintiff fails to sustain the burden resting upon plaintiff. The plaintiff's evidence also lacks the corroboration required by law. As stated in Miessner Inventions Inc. v. Hoschke, 76 U.S.App.D.C. 343, 131 F.2d 865, 866, "it requires more than the inventor's testimony to show reduction to practice."
As observed in the plaintiff's brief (page 17), the issues in this case relate to highly technical matter. They also involve the rules and practices of the Patent Office. The case comes, therefore, within the established presumption as to the propriety and correctness of the decisions of the Patent Office. Abbott v. Coe, 71 App.D.C. 195, 109 F.2d 449, and Esso Standard Oil Co. v. Sun Oil Co., 1956, 97 U.S.App.D.C., 154, 229 F.2d 37.
For the reasons stated, this Court is constrained to find that plaintiff is not entitled to a patent on any of the claims *183 set forth in the complaint. The complaint, therefore, must be dismissed at plaintiff's cost. Counsel for defendant may prepare findings of fact, conclusions of law, and a final order.
On Rehearing
The plaintiff's request for reconsideration, having been consented to by counsel for the defendant, was granted.
The reply brief of the plaintiff, filed September 15, 1956, has been carefully read and considered. Because the issues of this case relate to highly technical matter and involve the rules and practices of the Patent Office, the case comes peculiarly within the established presumption as to correctness of the decisions of the Patent Office. The evidence is not sufficient to convince the Court that the conclusions of the Patent Office tribunals were clearly erroneous.
The former opinion of this Court is, therefore, reaffirmed.
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856 So.2d 717 (2003)
Nellie Lou SMITH, Appellant,
v.
John William SMITH, Appellee.
No. 2002-CA-01657-COA.
Court of Appeals of Mississippi.
October 7, 2003.
*718 Deedy Boland, Tupelo, attorney for appellant.
C. Michael Malski, attorney for appellee.
EN BANC.
MYERS, J., for the Court:
¶ 1. Nellie Lou Smith was granted a divorce from her husband, John William Smith, on the ground of desertion. She disagrees with the chancellor's equitable distribution of marital property and his decision regarding alimony. She appeals to this Court, stating the following issues for our consideration:
I. WHETHER THE CHANCELLOR FAILED TO MAKE AN EQUITABLE DIVISION OF THE MARITAL ESTATE BY FAILING TO PROPERLY CLASSIFY CERTAIN ASSETS, FAILING TO PROPERLY VALUE CERTAIN ASSETS, AND FAILING TO MAKE SPECIFIC FINDINGS OF FACT AND CONCLUSIONS OF LAW RELATING TO APPLICABLE FERGUSON FACTORS.
II. WHETHER THE CHANCELLOR ERRED IN FAILING TO AWARD PERIODIC ALIMONY TO NELLIE SMITH.
III. WHETHER THE CHANCELLOR ERRED IN FAILING TO AWARD ATTORNEY'S FEES TO NELLIE SMITH.
Facts and Procedural History
¶ 2. John William Smith filed for divorce from Nellie Lou Smith on October 22, 1997. He cited grounds of habitual cruel and inhuman treatment and adultery, or in the alternative, irreconcilable differences. Nellie Smith filed a counterclaim for divorce based on habitual cruel and inhuman treatment, abandonment and adultery, or in the alternative, irreconcilable differences.
¶ 3. The chancellor found no basis for John to be granted a divorce for either habitual cruel and inhuman treatment or adultery. John's claim was denied. Nellie's divorce was granted on the ground of willful, continued, and obstinate abandonment for one year.
¶ 4. The chancellor listed the following items of property as in dispute: the marital home, several pieces of real estate, and several vehicles. Additionally, the Smiths had an IRA worth approximately $44,484, a thrift plan worth $20,646, a retirement plan that paid John $253.80 a month, and a credit union account worth $101.
¶ 5. Nellie was awarded the home and the 18.63 acres on which it sat, the 63/100 acre used to gain access to the homestead, a 55 acre tract, 2 acres purchased at a sheriff's sale, a 50% interest in the two retirement accounts, and a 1987 Toyota Supra. John received numerous items of personal property; 1990 Dodge truck, a 1990 Dodge van, a 1992 GMC truck, a 50% interest in the retirement plans, and the $253.80 he received a month from his retirement accounts.
¶ 6. The chancellor denied alimony to Nellie as well as attorney's fees.
I WHETHER THE CHANCELLOR FAILED TO MAKE AN EQUITABLE DIVISION OF THE MARITAL ESTATE BY FAILING TO PROPERLY CLASSIFY CERTAIN ASSETS, FAILING TO PROPERLY VALUE CERTAIN ASSETS, AND FAILING TO MAKE SPECIFIC FINDINGS OF FACT AND CONCLUSIONS OF LAW RELATING TO APPLICABLE FERGUSON FACTORS.
*719 ¶ 7. The standard of review of all the issues presented is abuse of discretion. The chancellor is granted wide discretion in deciding domestic relations matters and we will reverse his decision only when his decision is shown to be manifestly wrong, clearly erroneous, or that he applied an incorrect legal standard. Barton v. Barton, 790 So.2d 169, 175(¶ 17) (Miss.2001) (citing Cummings v. Benderman, 681 So.2d 97, 100 (Miss.1996)).
¶ 8. In dividing the property of the divorcing couple, the chancellor must first classify their assets and liabilities as belonging to the marriage, to the husband, or to the wife. Hemsley v. Hemsley, 639 So.2d 909, 914 (Miss.1994). Once this is done, the chancellor must look to the factors set out by the supreme court in Ferguson v. Ferguson, 639 So.2d 921 (Miss. 1994). The Ferguson factors are used to determine how to divide the marital assets between the divorcing couple.
¶ 9. The chancellor listed the assets of the Smiths according to who held legal title to them. He did not identify them as assets of the husband, of the wife, or of the marriage. The chancellor did then distribute the assets, assigning some that were titled in John's name, for example, to Nellie. However, without knowing what was marital property and what was the separate property of the spouses, we cannot fairly evaluate the equitable distribution. We therefore hold that the chancellor abused his discretion in classifying and distributing the assets of the marital estate.
II. WHETHER THE CHANCELLOR ERRED IN FAILING TO AWARD PERIODIC ALIMONY TO NELLIE SMITH.
¶ 10. The factors to be considered when deciding whether periodic alimony is appropriate are: (1) the income and expenses of the parties; (2) the health and earning capacities of the parties; (3) the needs of each party; (4) the obligations and assets of each party; (5) the length of the marriage; (6) the presence or absence of minor children in the home, which may require that one or both of the parties either pay, or personally provide, child care; (7) the age of the parties; (8) the standard of living of the parties, both during the marriage and at the time of the support determination; (9) the tax consequences of the spousal support order; (10) fault or misconduct; (11) wasteful dissipation of assets by either party; or (12) any other factor deemed by the court to be "just and equitable" in connection with the setting of spousal support. Armstrong v. Armstrong, 618 So.2d 1278, 1280 (Miss. 1993). These factors are used to determine whether alimony is proper in a case. The chancellor did not use these factors, but instead used the Hemsley factors, which are used to determine if alimony is reasonable. Hemsley, 639 So.2d at 912-13. Since he applied the wrong legal standard, the determination of alimony is reversed and remanded.
III. WHETHER THE CHANCELLOR ERRED IN FAILING TO AWARD ATTORNEY'S FEES TO NELLIE SMITH.
¶ 11. Since we have already reversed and remanded for the other two issues in this case, we also reverse and remand for a determination of the issue of attorney's fees. The distribution of marital property and receipt of alimony, if any, will have a role in the determination of whether Nellie should receive attorney's fees from John. Lauro v. Lauro, 847 So.2d 843, 850(¶ 18) (Miss.2003).
¶ 12. THE JUDGMENT OF THE CHANCERY COURT OF MONROE COUNTY IS AFFIRMED AS TO THE DIVORCE AND REVERSED AND REMANDED *720 AS TO ALIMONY, ATTORNEY'S FEES AND DISTRIBUTION OF MARITAL PROPERTY. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLEE.
KING, P.J., BRIDGES, THOMAS, LEE, AND CHANDLER, JJ., CONCUR.
SOUTHWICK, P.J., CONCURS WITH SEPARATE WRITTEN OPINION JOINED BY McMILLIN, C.J., BRIDGES, LEE, IRVING, AND GRIFFIS, JJ.
SOUTHWICK, P.J., Concurring:
¶ 13. The majority reverses the alimony award because the chancellor pulled from his file the wrong set of factors to use. It is clear that the chancellor applied factors identified by the Supreme Court for determining the amount of alimony, but it was not the latest iteration of those considerations. I do not believe that any error occurred, as there is too little difference in the lists.
¶ 14. The chancellor considered nine factors set out in a 1994 precedent for making alimony determinations. Hemsley v. Hemsley, 639 So.2d 909, 912 (Miss.1994). That case is better known for providing rules regarding marital property, but it also contains a list of considerations for the award of alimony. I do not understand the case to mean what the majority states, that Hemsley determines the reasonableness of the alimony award while the favored Armstrong case is for whether any alimony should be awarded at all. A chancellor determines both matters together, not in stages. Armstrong itself addresses the relationship between the cases, as I now explain.
¶ 15. The Supreme Court in Armstrong took the factors from a case that it decided the previous year. Armstrong v. Armstrong, 618 So.2d 1278, 1281 (Miss.1993), quoting Hammonds v. Hammonds, 597 So.2d 653, 655 (Miss.1992). The Armstrong court also cited the 1955 case from which Hemsley would take its nine factors. Armstrong, 618 So.2d at 1281, citing Brabham v. Brabham, 226 Miss. 165, 84 So.2d 147 (1955). In a footnote to the Brabham citation, the court in Armstrong discussed the relationship between the different lists of needed considerations.
Hammonds revised and added factors for consideration. See Gammage v. Gammage, 599 So.2d 569, 573 (Miss. 1992) and Cleveland v. Cleveland, 600 So.2d 193, 197 (Miss.1992), however, where the Brabham factors were again approved. Also see White v. White, 557 So.2d 480, 483 (Miss.1989) and Cheatham v. Cheatham, 537 So.2d 435, 438 (Miss.1988) for factors considered in awarding lump sum alimony.
Armstrong, 618 So.2d at 1281 n.1.
¶ 16. Hemsley was decided a year after Armstrong, and it referred to Brabham for its authority. Hemsley, 639 So.2d at 913. I accept that the twelve step program enumerated in Hammonds and Armstrong is now the recommended method for deciding alimony. Still, reversal should not flow solely from nine steps being used.
¶ 17. The majority quotes the twelve Hammonds-Armstrong considerations. I quote the nine Brabham-Hemsley ones: "(1) the health of the husband and his earning capacity; (2) the health of the wife and her earning capacity; (3) the entire sources of income of both parties; (4) the reasonable needs of the wife; (5) the reasonable needs of the child; (6) the necessary living expenses of the husband; (7) the estimated amount of income taxes the respective parties must pay on their incomes; (8) the fact that the wife has the free use of the home, furnishings and automobile, and (9) such other facts and circumstances *721 bearing on the subject that might be shown by the evidence." Hemsley, 639 So.2d at 912-13, quoting Brabham, 84 So.2d at 153 (line breaks removed).
¶ 18. I do not find a reversible error measure of difference between the lists. Both have a catch-all provision that other relevant facts should be considered. Neither list therefore is exclusive. These factors are intended to guide the chancellors in making decisions and assist appellate courts in their review function. Our holding is perilously close to making the determinations little more than rituals, with affirmance dependent on the correct chant being intoned by the trial judge. The Supreme Court through the factors for alimony and for other issues in divorce suits has sought to bring a formal system to the determinations. We should avoid, though, making the means dominate over the ends. The factors in each list are representative of what should be considered. This chancellor considered the proper broad issues, used a set of factors approved by the Supreme Court, and awarded a reasonable amount of alimony.
¶ 19. I nonetheless agree with setting the alimony determination aside since we are also, properly, setting aside the distribution of marital property. Changes in the allocation of property may alter the need for or the amount of alimony. Therefore even if the correct incantation had been performed, we should set the alimony award aside in order that all interrelated financial issues may be reconsidered.
McMILLIN, C.J., BRIDGES, LEE, IRVING AND GRIFFIS, JJ., JOIN THIS SEPARATE WRITTEN OPINION.
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Order Michigan Supreme Court
Lansing, Michigan
May 27, 2014 Robert P. Young, Jr.,
Chief Justice
Michael F. Cavanagh
Stephen J. Markman
148650 Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano,
PEOPLE OF THE STATE OF MICHIGAN, Justices
Plaintiff-Appellee,
v SC: 148650
COA: 311956
Kent CC: 11-010322-FC
KARL CORNELIUS COTTON, JR.,
Defendant-Appellant.
_________________________________________/
On order of the Court, the application for leave to appeal the December 19, 2013
judgment of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the questions presented should be reviewed by this Court.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
May 27, 2014
d0519
Clerk
|
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289 S.W.3d 143 (2008)
Tamara Kay WESLEY, Appellant,
v.
Carlos Deshaun HALL, Appellee.
No. CA 07-1293.
Court of Appeals of Arkansas.
November 5, 2008.
*144 Brenda Austin, Ltd., by: Brenda Austin, Fayetteville, AR, for appellant.
KAREN R. BAKER, Judge.
Appellant Tamara Kay Wesley challenges the trial court's order finding that appellee Carlos DeShaun Hall was not the biological father of her child, setting aside the prior order of paternity, and ordering that any unpaid child support under the previous orders be also set aside and vacated. The trial court in this case followed the provisions of Arkansas Code Annotated section 9-10-115 (Repl.2008) in its disposition of this case. The amendments of this statute were in effect at the time the trial court entered its order. Accordingly, we affirm.
Appellant gave birth to a son on November 16, 2002. Two days later both she and appellee signed the acknowledgment of paternity in Fort Smith, Arkansas, where the child was born. On January 21, 2005, and October 31, 2006, orders were entered in Tennessee, where appellee lived, that established paternity and support, an educational trust, and medical payments for the child. The two orders were registered as foreign orders on November 8, 2006, and May 2, 2007, respectively. Appellant filed a petition for contempt citation and modification on November 14, 2006. A hearing was set on January 8, 2007. Appellee filed an amended petition to determine paternity, visitation, and support on January 4, 2007. The test results established that appellee was not the biological father. The court set aside the previous order of paternity, the orders for child support, vacated the outstanding amounts, and ordered that there be no refund for amounts previously paid.
Appellant argues that the trial court erred in ordering the paternity testing and in ordering that any unpaid child support owed under the previous orders was set aside and vacated.[1] The trial court followed the provisions of section 9-10-115 in effect at the time the court entered the order. The statute provides in relevant part as follows:
(a) The circuit court may at any time enlarge, diminish, or vacate any order or judgment in the proceedings under this section except in regard to the issue of paternity as justice may require and on such notice to the defendant as the court may prescribe.
(b) The court shall not set aside, alter, or modify any final decree, order, or *145 judgment of paternity in which paternity blood testing, genetic testing, or other scientific evidence was used to determine the adjudicated father as the biological father.
....
(d)(1) Beyond the sixty-day period or other limitation set forth in subsection (c) of this section, a person may challenge a paternity establishment pursuant to a voluntary acknowledgment of paternity or an order based on an acknowledgment of paternity only upon an allegation of fraud, duress, or material mistake of fact.
(2) The burden of proof shall be upon the person challenging the establishment of paternity.
(e)(1)(A) When any man has been adjudicated to be the father of a child or is deemed to be the father of a child pursuant to an acknowledgment of paternity without the benefit of scientific testing for paternity and as a result was ordered to pay child support, he shall be entitled to one (1) paternity test, pursuant to § 9-10-108, at any time during the period of time that he is required to pay child support upon the filing of a motion challenging the adjudication or acknowledgment of paternity in a court of competent jurisdiction.
(B) If an acknowledgment of paternity was the basis for the order of support, the motion must comply with the requirements of subsection (d) of this section.
(2) The duty to pay child support and other legal obligations shall not be suspended while the motion is pending except for good cause shown, which shall be recited in the court's order. (f)(1) If the test administered under subdivision (e)(1)(A) of this section excludes the adjudicated father or man deemed to be the father pursuant to an acknowledgment of paternity as the biological father of the child and the court so finds, the court shall:
(A) Set aside the previous finding or establishment of paternity;
(B) Find that there is no future obligation of support;
(C) Order that any unpaid support owed under the previous order is vacated; and
(D) Order that any support previously paid is not subject to refund.
(2) If the name of the adjudicated father or man deemed to be the father pursuant to an acknowledgment of paternity appears on the birth certificate of the child, the court shall issue an order requiring the birth certificate to be amended to delete the name of the father.
(g) If the test administered under subdivision (e)(1)(A) of this section confirms that the adjudicated father or man deemed to be the father pursuant to an acknowledgment of paternity is the biological father of the child, the court shall enter an order adjudicating paternity and setting child support in accordance with § 9-10-109, the guidelines for child support, and the family support chart.
Ark.Code Ann. § 9-10-115.
The paternity test determined that appellee was not the father. Pursuant to that test result, the trial court entered an order in compliance with section 9-10-115. Appellant argues that the trial court should have applied Arkansas Code Annotated § 9-10-115 (Supp.2005) instead of the amended version that was in effect at the time the trial court entered its order filed for record on October 17, 2007. Appellant insists that because the petition for paternity testing was filed prior to the effective date of July 31, 2007, and that the *146 results of the paternity testing were filed of record prior to the effective date of the amendments, that the trial court had no authority to enter an order pursuant to the statutory provisions in effect at the time the order was entered. She urges us to apply the previous provision that allowed for only a prospective termination of support.
Her argument is unpersuasive. As Justice Brown explained:
There is continued confusion over the issue of child-support arrearages under § 9-10-115(f)(1) among the bench and bar, as evidenced by the case at hand. I urge the General Assembly, which is now in session, to clarify § 9-10-115(f)(1) once and for all on whether child-support arrearages must be paid by a non-biological father in all instances.
Office of Child Support Enforcement v. Parker, 368 Ark. 393, 400, 246 S.W.3d 851, 856 (2007) (Brown, J., concurring).
Our legislature was in session when Parker was published and our legislature amended the statute at issue here to clearly state its intention that a non-biological father be relieved of all child-support arrearages as well as all future child support. The trial court applied the statute in effect at the time the written order was filed. Accordingly, we find no error and affirm.
HART, BIRD, and HEFFLEY, JJ., agree.
PITTMAN, C.J., concurs.
HUNT, J., dissents.
JOHN MAUZY PITTMAN, Chief Judge, concurring.
Because the court declined to certify this case to the Arkansas Supreme Court, and I must therefore consider the merits of the arguments presented therein, I concur with the result stated in the majority opinion. I write separately to voice my opposition to this court's continued reluctance to certify significant cases such as this to the Arkansas Supreme Court. We are forced to choose between two potentially unjust results, and to do so we must determine the intent of the General Assembly on a matter that is less than clear. Furthermore, the issues decided herein will potentially affect many Arkansans, including a disproportionately large number of children. To my mind, this case requires construction of Arkansas statutes on an issue of significant public interest, both of which are expressly listed as grounds for certification in Ark. Sup.Ct. R. 1-2(b).
Refusing to certify cases such as this is simply a waste of resources. As often as not, after multiple panels of this court spend several weeks wrangling over the important issues that a case presents, our effort is rendered meaningless when the Arkansas Supreme Court subsequently accepts review of our decision. See, e.g., Barnett v. Monumental General Insurance Co., 81 Ark.App. 23, 97 S.W.3d 901 (2003), aff'd, 354 Ark. 692, 128 S.W.3d 803 (2003). This waste could often be avoided by the simple expedient of certification, which is in reality nothing more than asking the Supreme Court if it would like to decide the appeal in the first instance. To do so, it seems to me, is simply a matter of courtesy.
Furthermore, questions of such weight require a definitive and clear opinion. As I noted in my concurrence in Barnett v. Monumental General Insurance Co., supra, even judges of our own court often regard our decisions in such cases to be of dubious precedential value. When issues of significant public interest are involved, *147 the bench, bar, and public deserve an analysis that is authoritative and clear.
I respectfully concur.
EUGENE HUNT, Judge, dissenting.
I disagree with the majority's opinion. The opinion ignores the fact that Carlos Hall was not present and did not testify at the hearing wherein paternity testing was ordered. Carlos Hall filed his petition for paternity testing on December 27, 2006. In paragraph three of that petition, Hall stated: "That the Plaintiff and Defendant engaged in a relationship which led to the live birth of one (1) child, namely, Carlos Deshaun Hall, whose date of birth is November 16, 2002...." In paragraph six of the same petition, Hall stated: "That the Plaintiff prays for an order for paternity testing to determine if he is the biological father of the minor child, Carlos Deshaun Hall...." A hearing was held on May 3, 2007, and the parties were ordered to undergo paternity testing. Based on the abstract of the record, Carlos Hall was not present at this hearing.
Arkansas Code Annotated section 9-10-115(d), provides, inter alia, that:
(1) Beyond the sixty-day period or other limitation set forth in subsection (c) of this section, a person may challenge a paternity establishment pursuant to a voluntary acknowledgment of paternity or an order based on an acknowledgment of paternity only upon an allegation of fraud, duress, or material mistake of fact.
(2) The burden of proof shall be upon the person challenging the establishment of paternity.
Based on the plain language of the statute, the burden of proof was on Carlos Hall to prove that he was entitled to a paternity test. Hall was only required to testify that he initially believed that he was the father of the minor child but later decided his belief was erroneous. He did not do that. The trial court ordered the parties to submit to paternity testing although Carlos Hall was not present to offer any testimony in support of his petition that also contained a declaration that Carlos Hall was the father of Carlos Deshaun Hall. Carlos Hall was not entitled to a paternity test because he failed to meet the threshold requirement set forth in section 9-10-115(d)(2). The trial court committed error by ordering the paternity test. I respectfully dissent.
NOTES
[1] While appellant states briefly that the trial court should not have ordered paternity testing because appellee failed to state sufficient facts to support his conclusion that there was a material mistake of fact, appellee's petition specifically alleged that only after he executed the acknowledgment of paternity did he learn that appellant had engaged in sexual relations with other parties who could have fathered the child and that the child did not physically resemble appellee. Furthermore, even the prior version of the statute which appellant urges us to apply, allows a legal father to have an absolute right to a paternity test and have his child-support obligation terminated if it is determined that he is not the biological father. See Martin v. Pierce, 370 Ark. 53, 60, 257 S.W.3d 82, 88 (2007).
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365 F.Supp. 1355 (1973)
COMMUNITY ACTION PROGRAMS EXECUTIVE DIRECTORS ASSOCIATION OF NEW JERSEY, INC., a nonprofit corporation of the State of New Jersey, et al., Plaintiffs,
v.
Roy L. ASH, Director of Office of Management and Budget, et al., Defendants.
Civ. No. 899-73.
United States District Court, D. New Jersey.
August 28, 1973.
*1356 *1357 David H. Ben-Asher, Elliot M. Baumgard, East Orange, N. J., for plaintiffs.
George Mittelholzer, Mark Dembling, Asst. U. S. Attys., Newark, N. J., Laurie Streeter, Dept. of Labor, Washington, D. C., for defendants.
GARTH, District Judge:
This action was commenced on June 25, 1973 by the filing of a Verified Complaint and an Order to Show Cause. Asserting jurisdiction under 28 U.S.C. §§ 1331 and 1361, plaintiffs on behalf of themselves and all those similarly situated allege that defendants have violated a duty to obligate and spend $270.7 million in summer Neighborhood Youth Corps ("NYC") funds appropriated by Congress for Fiscal 1973.[1]
On June 28, 1973, the return date of the Order to Show Cause, plaintiffs moved for a preliminary injunction which would restrain the defendants from allowing the NYC funds to revert to the United States Treasury without having been spent.[2] Pursuant to 28 U.S. C. § 1361, plaintiffs further sought a writ of mandamus ordering defendants to comply with the Economic Opportunity Act of 1964 as amended ("EOA"), 42 U.S.C. § 2701 et seq., Pub.L. 88-452, with the First Supplemental Appropriations *1358 Act of 1973, Pub.L. 92-607, 86 Stat. 1498, and with Article II, section 3 of the United States Constitution.
On June 28 I conducted an evidentiary hearing and considered the affidavits, briefs and oral argument submitted by both sides. Because there were no material issues of fact, other than the precise amount of the alleged congressional appropriation (Tr. 10-13),[3] the trial on the merits was consolidated with the hearing on the injunction. Fed.R.Civ. P. 65(a)(2). I made preliminary findings of fact and rendered an oral opinion and order on June 28, but reserved the right (Tr. 132), which I now exercise, to issue a written opinion upon receipt of complete sets of findings of fact and conclusions of law from the parties.[4]
I. Standing
As a preliminary matter, defendants argue that none of the plaintiff Community Action Agencies[5] have requested funding of their summer 1973 NYC programs, so that no case or controversy exists. It is uncontested that no funding request has been submitted to the Department of Labor. However, defendants have presented no evidence that the failure to request funding was improper, and I find that prior practice with regard to the NYC program involved the Department's inviting applications from the Community Action Agencies, with the Agencies only then submitting formal applications. No such invitations were made by the Department in 1973 (Tr. 28-30). Therefore, the failure of the Community Action Agencies to have requested funding is not a bar to this action.
Defendants further argue that plaintiffs generally lack standing to maintain this action. The test to be applied in order to determine whether plaintiffs have standing under Article III of the Constitution is "whether the party has alleged such a `personal stake in the outcome of the controversy' . . . as to ensure that `the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution.'" Sierra Club v. Morton, 405 U.S. 727, 732, 92 S.Ct. 1361, 1364, 31 L.Ed. 2d 636 (1972); Flast v. Cohen, 392 U.S. 83, 101, 88 S.Ct. 1942, 20 L.Ed.2d 947, (1968); Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962).
The individual plaintiffs Maryann Weston and Yvette Young would be receiving salaries from the summer NYC were it not for the defendants' actions, since they had been tentatively accepted into the NYC program and would have been finally accepted once the funds became available (Tr. 128-29). This direct economic injury resulting from defendants' actions gives these plaintiffs personal stakes in the outcome of the controversy, and therefore confers standing upon them. Scripps-Howard Radio v. FCC, 316 U.S. 4, 62 S.Ct. 875, 86 L.Ed. 1229 (1942); FCC v. Sanders Bros. Radio Station, 309 U.S. 470, 60 S. Ct. 693, 84 L.Ed. 869 (1940).
The 22 plaintiffs who are the Executive Directors of Community Action Agencies of New Jersey designated to administer the summer NYC program,[6] are suing only in their official *1359 capacities. The Executive Directors have not alleged loss of their employment as a result of defendants' action. Compare American Federation of Gov't Employees v. Phillips, 358 F.Supp. 60 (D.D.C.1973). Indeed, since the United Community Corp. of Newark, the Paterson Task Force for Community Action and the Union County Anti-Poverty Council appear not to administer NYC funds (Exhibit 1 attached to Verified Complaint), their Directors are not adversely affected within the meaning of Sierra Club v. Morton, supra, 405 U.S. at 739, 92 S.Ct. 1361, and they do not have standing here. However, the remaining 19 are suing as Directors of agencies specifically established by the Executive Branch to administer funds appropriated by Congress for programs mandated by Congress. They have expended time and money fostering sponsorship of and encouraging applications for the NYC program. See Pennsylvania v. Lynn, 362 F.Supp. 1363 (D.D.C. 1973). As such, these 19 have more than a mere interest in the relief sought by this action and are within the zone of interests adversely affected by defendants' action. ICC v. SCRAP, 412 U.S. 669, 686, 93 S.Ct. 2405, 2415, 2416, 37 L.Ed.2d 254 (1973); Doe v. Bolton, 410 U.S. 179, 188, 93 S.Ct. 739, 745, 35 L.Ed.2d 201 (1973); Citizens Committee for Hudson Valley v. Volpe, 425 F.2d 97 (2d Cir. 1970); Scenic Hudson Preservation Conference v. FPC, 354 F.2d 608 (2d Cir. 1965). Cf. Sierra Club v. Morton, supra, 405 U.S. at 739, 92 S.Ct. 1361. These 19 Directors have standing.
The plaintiff Community Action Programs Executive Directors Association of New Jersey and the plaintiff NYC Directors Association are not organizations whose members are injured as individuals. Compare NAACP v. Button, 371 U.S. 415, 418, 83 S.Ct. 328, 9 L.Ed.2d 405 (1963); American Federation of Gov't Employees, supra. Nor are the organizations themselves adversely affected by defendants' action. They therefore lack standing to sue.
II. Class Action Certification
Pursuant to Fed.R.Civ.P. 23(b) (2), plaintiffs have established the prerequisites for two classes. One class consists of all individuals eligible, qualified and designated as participants in NYC programs for the summer of 1973. The other class comprises all Community Action Agencies established and qualified under the EOA, which sponsor summer NYC programs. For both of these classes joinder of all members is impractical, since Agencies in all 50 states sponsor programs which in 1972 employed over 600,000 youths. Questions of law and fact are common, and plaintiffs' claims are typical, since only one nation-wide program is involved. Plaintiffs will adequately protect the interests of the class, since the individual plaintiffs would be direct beneficiaries if they succeed here, and since the Agencies, in 1972, expended $3,398,227.46 for their own programs, and would spend a similar amount if they succeed here.[7] Defendants have refused to act on grounds generally applicable to the class, since all funds have been withheld throughout the entire nation.[8]
III. Justiciability
Defendants contend that the instant cause of action presents a political question or is otherwise not justiciable. Baker v. Carr, 369 U.S. 186, 217, 82 S. Ct. 691, 710, 7 L.Ed.2d 663 (1962), set *1360 forth the definition of a political question:
"Prominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question."
See also Powell v. McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969). The questions presented to this court are whether Congress has specifically appropriated funds for the summer NYC program, and if so, whether the Executive Branch is obligated to spend the funds. There is nothing in the Baker Court's definition that leads me to find a political question herein presented. As in actions challenging administrative agency determinations alleged to be beyond or in violation of Congressional mandates, there is herein involved a dispute between the Executive and the Legislative Branches, but "the judicial branch has the function of requiring the executive (or administrative) branch to stay within the limits prescribed by the legislative branch." Nat'l. Automatic Laundry & Cleaning Council v. Shultz, 143 U.S.App.D.C. 274, 443 F.2d 689, 695 (1971).
Whether a dispute is otherwise justiciable depends upon whether "[1] the duty asserted can be judicially identified and [2] its breach judicially determined, and [3] whether protection for the right asserted can be judicially molded." Baker v. Carr, supra, 369 U.S. at 198, 82 S.Ct. at 700.
Duty. First, I conclude that the duty asserted by plaintiffs the duty of the Executive Branch to obligate and expend funds appropriated by Congresscan be identified by examining Article II, section 3 of the Constitution, and the common law. Under Article II, section 3, the President "shall take Care that the Laws be faithfully executed . . .". The Executive Branch has no authority, even for motives such as the control of inflation, to decide for itself whether to obey a law after the President has signed a bill into law, or after Congress has overridden a Presidential veto. See, Nat'l. Council of Community Mental Health Centers v. Weinberger, 361 F. Supp. 897 (D.D.C.1973). In Kendall v. United States, 12 Pet. 524, 37 U.S. 524, 611, 9 L.Ed. 1181 (1838), the Supreme Court held that the Postmaster General could not refuse to pay a claim of an individual who had contracted to carry the mails once Congress had specifically directed payment. More recently, in Youngstown Sheet & Tube v. Sawyer, 343 U.S. 579, 587, 72 S.Ct. 863, 867, 96 L.Ed. 1153 (1952), the Court held unlawful an executive seizure of steel mills:
"In the framework of our Constitution, the President's power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute . . .. The Constitution does not subject this lawmaking power of Congress to presidential . . . supervision or control."
Finally, during the recent series of "impoundment cases," it was held that the Executive Branch, in order to control inflation, had no right to withhold a state's authority to obligate apportionments from the Highway Trust Fund, contrary to a specific congressional intent that the funds be spent. State *1361 Highway Com'n v. Volpe, 347 F.Supp. 950 (W.D.Mo.1972), aff'd, 479 F.2d 1099 (8th Cir. 1973). In American Fed. of Gov't Employees v. Phillips, supra, it was held in a context similar to the one herein involved:
"The Director of OEO has discretion in funding individual C[ommunity] A[ction] A[gencies] under section 221 itself, subject to conditions imposed by lawful regulations. The Director further must establish controls to insure the financial responsibility of CAA's 42 U.S.C. § 2835 (1970). But these provisions to insure the functional and fiscal integrity of an ongoing section 221 program do not give the Director the discretion to halt that section 221 program for reasons unrelated to the purposes of the Economic Opportunity Act."
See also City of New York v. Ruckelshaus, 358 F.Supp. 669 (D.D.C.1973); Campaign Clean Water v. Ruckelshaus, 361 F.Supp. 689 (E.D.Va.1973).
I conclude, therefore, that once Congress has appropriated funds for a specific program, the Executive Branch has a duty to spend them. It has no authority under the Constitution to refuse to spend those funds, and performs only a ministerial function.[9]See Wilbur v. Kadrie, 281 U.S. 206, 218, 50 S.Ct. 320, 74 L.Ed. 809 (1930); Pennsylvania v. Lynn, supra.
Breach. Having concluded that the Executive Branch must obligate and expend funds appropriated for specific programs by the Legislative Branch, determination of the breach requires this court to undertake two tasks. The first, which will be discussed below in conjunction with the merits, is determining whether Congress in fact appropriated funds for the summer 1973 NYC program. The second, which I have already determined, is that defendants have not obligated and expended the funds allegedly appropriated. Consequently, the second prong of the Baker test of justiciability presents no bar to this court's consideration of this action.
Protection. Assuming Congress to have appropriated the funds in question, protection of plaintiffs' rights requires only that this court issue the writ of mandamus, or grant the declaratory judgment, or issue the injunction requested by plaintiffs. Defendants contend, however, that this action is an unconsented-to suit against the sovereign, and that the doctrine of sovereign immunity requires the suit's dismissal.
The general rule is that "a suit is against the sovereign if `the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration' . . . or if the effect of the judgment would be `to restrain the government from acting, or to compel it to act.'" Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963). See also Hawaii v. Gordon, 373 U.S. 57, 83 S.Ct. 1052, 10 L.Ed.2d 191 (1963). For two reasons, this action is not "against the sovereign." First, it is asserted by plaintiffsand I so holdthat the Legislature appropriated funds and thereby compelled executive action. The judgment of this court will therefore not expend itself on the Treasury or compel action, City of New York, supra; American Federation of Gov't Employees, supra; Nat'l Council of Community Mental Health Centers, supra. Defendants cite Housing Authority v. HUD, 340 F.Supp. 654 (N.D.Calif. 1972), and Commonwealth v. Connor, 248 F.Supp. 656 (D.Mass.1966), which become apposite only if this court concludes as did those courts that the Congress had not required the Executive Branch to spend the disputed funds.
The second reason that this action is not "against the sovereign" is *1362 that the defendants here represent only the executive portion of the government. Only where executive officials act pursuant to valid congressional dictates i. e. only where the Executive and the Legislative Branches act jointly is the doctrine of sovereign immunity available as a defense.
Even if this action were a suit against the sovereign, there are two well-settled common law exceptions to any resulting immunity, Dugan v. Rank supra, 372 U.S. at 621, 83 S.Ct. at 1007. The exceptions are "action by officers beyond their statutory powers," and action within the scope of statutory powers for which "the powers themselves or the manner in which they are exercised are constitutionally void." See also Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 689, 69 S.Ct. 1457, 1461, 93 L.Ed. 1628 (1949). Assuming a congressional appropriation for the summer 1973 NYC program, this action would fall within both of Dugan's exceptions.[10]See also Pennsylvania v. Lynn, supra.
IV. Merits: Legislative History
42 U.S.C. § 2740(a) states that the "Director [of the Office of Economic Opportunity (`OEO')] may provide financial assistance in urban and rural areas for comprehensive work and training programs or components of such programs," including the NYC. However, after choosing which programs to fund, "all work and training component programs . . . shall be consolidated into the comprehensive work and training program, and financial assistance for such components shall be provided to the prime sponsor . . ." 42 U.S.C. § 2740(b). See also 1967 U.S. Code Cong. and Admin.News 2441. Congress extended the life of these Title I programs by amending 42 U.S.C. § 2771, Pub.L. 92-424, 86 Stat. 688, to substitute the word "eight" for "three:"
"The director [of OEO] shall carry out the programs under this Title during the fiscal year ending June 30, 1967, and the eight succeeding fiscal years. . . ."
At the same time, Congress expressed its intent to add to the Administration's funding requests for the NYC program. 1972 U.S.Code Cong. and Admin.News 3235. In addition, the First Supplemental Appropriations Act for Fiscal 1973, Pub.L. 92-607, 86 Stat. 1498, appropriated $829,862,000 plus reimbursements for all Title I programs, including the NYC.
Further evidence of the congressional intent that there be a summer NYC program, arises from the history of congressional action in 1973. After the Administration specifically requested that the summer 1973 NYC appropriation be rescinded, the House Committee on Appropriations on May 3, 1973 (in its report on the Second Supplemental Appropriations Bill for Fiscal 1973) declined to adopt the proposed rescission. On May 18, 1973, the Senate Committee on Appropriations acted likewise on the same Bill, reporting:
"The Committee is aware that, while awaiting Congressional action on the proposed rescission, the funds in question have not been released. The Committee expects that these funds will be released and obligated before the close of the Fiscal Year."
Conference Report H.R. 93-293 (PX-8).[11] On June 27, 1973 Congress passed the Bill without approving the requested NYC rescission. After a Presidential veto based upon a rider to the Bill pertaining to the bombing of Cambodia, the Bill was passed again in relevant part *1363 unaltered, but with the bombing proviso deleted, and then signed into law.
Congress therefore clearly intended to fund the summer NYC program for Fiscal 1973. However, three funding levels appear in the legislative history. Assistant Secretary of Labor Malcolm Lovell, addressing the House Appropriations Committee on April 12, 1972, testified that the Fiscal 1973 appropriation would be the same as the Fiscal 1972 appropriation, conceded by the defendants to have been $270.7 million (PX-10). Lovell made the same comment while testifying before the Senate Appropriations Committee in connection with the First Supplemental Appropriations Bill for Fiscal 1973 (PX-4). The identical sum also appears as a line item in Dept. of Labor Manpower AdministrationManpower Training Services Programs Available to Individuals by Age (PX-2).
A second sum, that of $256.5 million, was mentioned when Lovell addressed the House Appropriations Committee in connection with the same First Supplemental Appropriations Bill for Fiscal 1973 just referred to (PX-5). Senator Jacob Javits (R.N.Y.), the prime sponsor of the Appropriations Bill, then referred to this second sum on the Senate floor, in a letter to the President dated June 21, 1973 (which urged release of the funds) (PX-1), and also in Congressional Record entries of March 27 and May 29, 1973 (PX-9).
The third sum mentioned was $239,143,000. While requesting a rescission of the summer 1973 NYC funds, Associate Assistant Secretary of Labor Richard Miller testified during Senate hearings on March 14, 1973 to the Administration's understanding that Congress intended $239,143,000 to have been earmarked for the summer 1973 NYC program as a component of the lumpsum appropriation of $829,862,000 (for all labor-management programs) by the First Supplemental Appropriations Bill for Fiscal 1973 (PX-6). Defendant William Koleberg, Assistant Secretary of Labor, stated in an affidavit dated June 27, 1973 and filed in this action that $239,143,000 of the $829,862,000 had been appropriated for the summer 1973 NYC program.
I conclude that Congress appropriated at least $239,143,000 for the program in question. Apparently, the other two sums ($270.7 million and $256.5 million) represent mistakes by their proponents, or include funds from other Title I programs or from the overall NYC program, of which the summer program is but a part. If, however, either or both of the parties discover additional support for one of the larger sums, then a motion may be made to alter the order I will issue below.
V. Subject-Matter Jurisdiction
Jurisdiction is asserted pursuant to 28 U.S.C. §§ 1331 and 1361. Although this action arises from an Act of Congress and therefore presents a federal question, the two individual plaintiffs cannot allege the $10,000 amount in controversy needed to avail themselves of § 1331. The 19 Executive Directors with standing, however, each administer NYC funds well in excess of $10,000 and may therefore rely upon § 1331.
Under § 1361, no jurisdictional amount need be asserted, but that section does not authorize injunctive or declaratory relief. McQueary v. Laird, 449 F.2d 608 (10th Cir. 1971). Therefore, with respect to the individual plaintiffs and the class they represent, I have jurisdiction only to issue a writ of mandamus. In view of my decision on the merits of this action, any writ of mandamus I issue will not impermissibly direct the performance of discretionary acts by the defendants or their agents. See McQueary v. Laird, supra; Minnesota v. Weinberger, 359 F.Supp. 789 (D.Minn.1973).
VI. Conclusion
In view of my foregoing findings of fact and conclusions of law, I will sign an Order to the effect that the defendants shall no later than 10:00 A.M. on *1364 June 30, 1973 record as an obligation of the United States the funds appropriated by Congress for the summer 1973 NYC program. Defendants will be enjoined and restrained from taking any action which would permit these funds from reverting to the Treasury, and will be ordered to release the funds forthwith. Defendants will also be ordered to retain all such funds as an obligated balance against the congressional appropriation until further order of this court or until released and expended.
The parties will submit an appropriate written order.
NOTES
[1] Fiscal Year 1973 ended at midnight, June 30, 1973.
[2] If not "obligated" by the end of Fiscal 1973, the funds in question would have reverted to the Treasury. 31 U.S.C. § 701(a)(2); First Supplemental Appropriations Act, supra, Chapter XI, section 1101.
[3] Transcript references are to the hearing of June 28, 1973.
[4] In this opinion, the findings of fact have been consolidated with the conclusions of law.
[5] Community Action Agencies are designated under the Economic Opportunity Act of 1964, 42 U.S.C. § 2701 et seq., to act as the prime sponsors of NYC programs under Title I, Part B of the Act. 42 U.S.C. § 2737 et seq. Under Title I, the Agencies receive grants and contracts from the Department of Labor for the summer NYC program, which cannot function without those funds. The summer NYC program provides comprehensive work and training for youths from low-income families in the form of employment, on-the-job training and useful experience. 42 U.S.C. § 2740(a).
[6] New Jersey's Community Action Agencies expended $3,398,227.46 for the summer 1972 NYC program. The funds were distributed by the Department of Labor pursuant to a delegation agreement of April 12, 1968, entered into by the Department and the Office of Economic Opportunity. (Verified Complaint, Exhibit 1).
[7] See note 6 supra. During the summer of 1972, $270.7 million was distributed nationally to sponsoring agencies for the summer employment of 600,300 youths in the NYC program (Verified Complaint Exhibit 1).
[8] It was not contested that as of the final hearing in this matter on June 28, 1973, the defendants had not obligated, released or expended any funds for the summer 1973 NYC program, or that the defendants had no intention of releasing any portion thereof.
[9] Although the issue is not properly before me at this time, it would appear that the only discretion retained by the Executive Branch after a legislative appropriation is that over how and where to spend the funds. American Federation of Gov't Employees, supra.
[10] This action is similar to those brought under the Administrative Procedures Act, 5 U.S.C. § 701 et seq., which has been held to constitute a waiver of sovereign immunity. Scanwell Laboratories v. Shaffer, 137 U.S. App.D.C. 371, 424 F.2d 859, 873 (1970). See also Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L. Ed.2d 136 (1971). Plaintiffs, however, have not cited the Act to this court.
[11] "PX.." refers to numbered Plaintiffs' Exhibits.
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158 Ariz. 15 (1988)
760 P.2d 1064
STATE of Arizona, Appellee,
v.
James Alan ARNETT, Appellant.
No. CR-86-0349-PC.
Supreme Court of Arizona, In Banc.
July 19, 1988.
*16 Robert K. Corbin, Atty. Gen. by William J. Schafer, III, Diane M. Ramsey, Asst. Attys. Gen., Phoenix, for appellee.
John J. Trebon, Flagstaff, for appellant.
CAMERON, Justice.
I. JURISDICTION
We granted defendant, James Alan Arnett's, petition for review of the trial court's denial of his petition for post-conviction relief. Ariz.R.Crim.P. 32.4. We have jurisdiction pursuant to Ariz.Const.Art. 6, § 5(3), A.R.S. § 13-4239 and Ariz.R.Crim.P. 32.9(c).
II. ISSUES
We address the following issues on review:
A. Should defendant's conviction of first degree murder, if based on the commission of a robbery, be set aside because he was neither charged with killing in the commission of a robbery nor with robbery itself?
B. May a conviction for a single prior crime be used as two statutory aggravating factors?
C. Did the trial court's exclusion of psychiatric testimony on the question of premeditation deny defendant the right to present a defense in violation of the sixth and fourteenth amendments to the United States Constitution?
III. FACTS
During the first week of February, 1976, defendant was staying with Victor Tremblay at Tremblay's residence in Van Nuys, California. On the evening of 6 February 1976, Tremblay returned home, laid his wallet and keys on the kitchen table, and fell asleep in the living room. Sometime during the night, defendant took the wallet and keys and left the residence with Tremblay's car, a gray Ford Granada. Tremblay's rifle, a Universal .30 caliber M-1 carbine, was in the car. On 8 February, defendant abandoned the car in northwestern Arizona, took the carbine and some backpacking equipment, and began walking cross-country. On the evening of 9 February, defendant came upon a construction site located approximately 18 miles northwest of Lake Havasu City, Arizona, on *17 state highway 95. Waiting until workmen left for the day, he approached the site and looked for food. He spent the night there in an abandoned camper truck shell. Sometime after defendant settled into the camper shell, Elmer James Clary arrived at the construction site in his International pickup truck-camper. Clary also spent the night at the construction site in his camper.
Before daylight of the next morning, 10 February, defendant approached Clary and asked to buy some food. Clary replied that he had none to sell. Defendant then asked for a ride into any nearby town, and Clary said he did not have room for a passenger. Defendant then offered to trade jewelry for food, and Clary expressed interest in the trade. Defendant claimed that he then returned to a small shack where he had stored his backpack and the carbine. Defendant intended to get the carbine to help him "steal" Clary's truck. Unexpectedly, Clary followed appellant to the shack, and in defendant's words:
... I didn't know that he was going to do that and we came back to the shack and I was at my backpack, I pulled the rifle [carbine] out and there was a short pause and I just let it up and I started shooting and I later learned that I shot him five times.
Clary had been standing just outside the doorway of the shack at the time of the shooting, and defendant pulled him inside the shed from where he had fallen to the ground. Defendant went through Clary's pockets, looking for the pickup truck keys, but then he realized it was already running. Defendant then loaded the backpack and the carbine in Clary's pickup truck and drove to California.
Upon reaching Bakersfield, defendant abandoned the truck and traveled by bus to Oakland. On 18 February, he left Oakland and began traveling north on foot. He was apprehended in Richmond, California during that night and taken to jail at the Richmond Hall of Justice. Defendant was initially arrested for a local burglary, and then awaited extradition to Arizona on the murder charge. On 25 February while in the Richmond City Jail, defendant made a detailed confession to Detective Donald Collier of the Richmond City Police Department regarding the shooting of Elmer James Clary. In the confession, defendant stated:
Defendant: I helped him get his truck started because it was cold and he left it running and we were talking. So I offered to sell him some jewelry for some food, and he wanted to see the jewelry, so I went into my backpack and what I had intended on doing was taking the rifle and stealing his truck. (Emphasis added.)
A construction worker discovered Clary's body in the shack on the morning of 10 February. Officers of the Mohave County Sheriff's Department began arriving at the scene within 45 minutes and "roped it off" to preserve any possible evidence. Medical testimony established that the victim had received five gunshot wounds, any of which could have been fatal. Ballistics analysis revealed that three "bullets" or "bullet fragments" extracted from the body of the victim had been fired by the Universal carbine recovered from defendant when he was arrested. Expended "cartridge cases" found around Clary's body at the construction site also matched the carbine. Fingerprint analysis disclosed defendant's prints on several items within Clary's abandoned pickup truck in Bakersfield. Footprints discovered around the construction site on the morning of 10 February matched a pair of boots which had been worn by defendant at the time of his arrest.
Defendant was convicted of first degree murder and was sentenced to death on 10 September 1976. The trial court found aggravating circumstances as authorized by A.R.S. § 13-454(E)(1) (prior conviction punishable by life imprisonment) and § 13-454(E)(2) (prior conviction for crime of violence). This court affirmed the conviction and death sentence in State v. Arnett, 119 Ariz. 38, 579 P.2d 542 (1978) [Arnett I]. Defendant was resentenced to death following this court's decision in State v. Watson, 120 Ariz. 441, 586 P.2d 1253 (1978), cert. denied, 440 U.S. 924, 99 S.Ct. *18 1254, 59 L.Ed.2d 478 (1979). This court affirmed the resentencing in State v. Arnett, 125 Ariz. 201, 608 P.2d 778 (1980) [Arnett II].
IV. QUESTIONS PRESENTED
A. SHOULD DEFENDANTS CONVICTION FOR FIRST DEGREE MURDER, IF BASED ON THE COMMISSION OF A ROBBERY, BE SET ASIDE BECAUSE HE WAS NEITHER CHARGED WITH KILLING IN THE COMMISSION OF A ROBBERY NOR WITH ROBBERY ITSELF?
Defendant was charged with:
Count one: Murder in the first degree, a felony. On or about the 10th day of February, 1976, said defendant, JIM ALAN ARNETT, aka JIMMIE ALLEN ARNETT, aka JIM CLAY, aka JIM FARNER, committed murder in the first degree, to-wit: by shooting Elmer James Clary with a .30 calibre "Universal Carbine Serial # 321761" at or near Old West Town, milepost 197.5, Arizona Highway 95, in violation of Arizona Revised Statutes 13-451, 13-452, as amended and 13-453, as amended.
He was also charged in count two with grand theft auto. The trial court, however, dismissed this count after the jury was impaneled. Defendant was not charged with robbery.
Defendant claims that the indictment failed to provide him with notice that he would have to defend against a felony murder charge. We disagree.
At common law it was not necessary to charge in an indictment for murder that the murder was committed in the perpetration of another crime, in order to introduce proof showing that a felony was attempted in committing it; it was sufficient to charge murder in the common form, and then, upon proof that it was committed in the perpetration of a felony, malice, deliberation, and premeditation were implied.
Blake v. Morford, 563 F.2d 248, 251 n. 3 (6th Cir.1977), cert. denied, 434 U.S. 1038, 98 S.Ct. 775, 54 L.Ed.2d 787 (1978) (quoting Sullivan v. State, 173 Tenn. 475, 481-82, 121 S.W.2d 535, 537 (1938)).
Arizona law only requires that the indictment be a plain, concise statement of the facts sufficiently definite to inform the defendant of the offense charged. Ariz.R. Crim.P. 13.2. The indictment must state for each count the official or customary citation of the statute which the defendant is alleged to have violated. Ariz.R.Crim.P. 13.2. The indictment in this case satisfied these requirements. There is no requirement that the defendant receive notice of how the State will prove his responsibility for the alleged offense. State v. Tison, 129 Ariz. 526, 538, 633 P.2d 335, 347 (1981), cert. denied, 459 U.S. 882, 103 S.Ct. 180, 74 L.Ed.2d 147 (1982).
Other jurisdictions share this view. See Averhardt v. State, 470 N.E.2d 666, 693 (Ind. 1984), cert. denied, 471 U.S. 1030, 105 S.Ct. 2051, 85 L.Ed.2d 323 (1985) (defendant argued that the lack of an indictment for robbery as a separate offense indicated that the killing was not in the commission of a robbery, but the court held there was no need for the State to charge the underlying felony in order to prosecute for felony murder); Commonwealth v. Bastone, 466 Pa. 548, 553-54, 353 A.2d 827, 830 (1976) (State is not precluded from proving that the murder was committed during the perpetration of a robbery, even though the robbery is not mentioned in the indictment); Ross v. State, 308 Md. 377, 344, 519 A.2d 735, 738 (1987) (the charging document did not have to inform the accused of the specific theory on which the State would rely); State v. Johnson, 661 S.W.2d 854, 860 (Tenn. 1983), aff'd, 698 S.W.2d 631 (Tenn. 1985), cert. denied, 476 U.S. 1130, 106 S.Ct. 1998, 90 L.Ed.2d 679 (1986) (specification of felony in first degree murder indictment is unnecessary).
We note also regarding the issue of notice that, on the first day of trial, defense counsel presented a motion in limine to prevent the State from introducing any evidence that any robbery was committed of the victim.
*19 Mr. Bair [defense counsel]: Also, Your Honor, I would also make a motion in limine to prevent the State from introducing any evidence that any robbery was committed of the victim.
The Court: Gentlemen.
Mr. Birkemeier [prosecutor]: Okay. We have a statement of Arnett that he went through the pockets of the victim.
The Court: What's that to do with a felony murder, Mr. Bair?
Mr. Bair: The issue I'm concerned with here is, I don't know that the State intends at this point to show, that he committed first degree murder because it was premeditated, willful and deliberate, or that he claims he did it because it falls within the purview of first degree murder.
Now, the only possible one of any relevance, and I submit it wasn't charged and I don't want them now at this point trying to make a case by eliciting evidence that there may have been some type of robbery committed.
Mr. Birkemeier: It doesn't have to be charged, Your Honor, would be my response to the robbery.
Later, in soliciting oral argument from counsel regarding the motion in limine, the court asked:
The Court: ... As to the issue of evidence, a robbery in connection with the do you have any other argumentative cases you want to submit relative to that issue?
Mr. Crismon [prosecutor]: That's part of the crime, Your Honor. Anything to do with the commission of the crime is admissible at that time. The fact that he may have been robbing the victim or may have intended to rob the victim is certainly material and relevant for consideration by the jury. We do not have to disclose at this time or at any time the theory on which we are going. Murder, including the felony murder rule is included in the open charge of murder. I don't have that case, but I can obtain the case if the court is concerned with it. It's about three months old. Basically, that's all we have on it.
The Court: Mr. Bair, anything further?
The Motion in Limine regarding evidence of a robbery or related offense which might or may fit into the purview of the felony murder rule is denied. (Emphasis added).
We find that the evidence before the grand jury, the defendant's confession, and other matters disclosed to defendant made it apparent that robbery felony murder was a probable theory of prosecution in this case.
The defendant does not claim surprise or lack of adequate time for preparation for trial as a result of the failure to specifically designate which of the possible theories of first degree murder were being relied on. Defendant's motion in limine on the first day of trial confirms his awareness of evidence which could support the commission of robbery. After the court denied the motion in limine, defendant did not request a continuance of the trial to either obtain evidence to counter the robbery theory, or to change his theory of defense. Nor did defendant allege any prejudice as a result of the lack of notice, such as not being able to testify without jeopardizing his defense. See State v. Gray, 122 Ariz. 445, 449-450, 595 P.2d 990, 994-95 (1979) (Gordon J., dissenting). Moreover, defendant's counsel adequately rebutted the robbery allegation during closing arguments. In view of the evidence disclosing a possible robbery theory, and an absence of prejudice, we believe it was not error to refuse to require the State to elect which theory of first degree murder was being relied on under A.R.S. § 13-452.
There is only one crime of first degree murder. Felony murder is not a "lesser degree" of first degree murder. Felony murder and premeditated murder are merely two forms of the same crime: first degree murder. State v. Hallman, 137 Ariz. 31, 38, 668 P.2d 874, 881 (1983); State v. Encinas, 132 Ariz. 493, 496, 647 P.2d 624, 627 (1982). This protects the defendant against double jeopardy.
Because murder is a single offense, the State is ordinarily required to proceed *20 upon all available theories in a single prosecution, and it may not bring seriatim prosecutions for the same offense by alleging separate legal theories.
Ross, 308 Md. at 346, 519 A.2d at 739.
Admittedly, we do not know which of the three theories offered by the State the jury used to convict the defendant. The first theory was that the murder was premeditated and deliberate. The second was that the defendant had hid in the shed and was "lying in wait," and when the victim approached, he shot him. The third theory was that the defendant killed the victim in the course of robbery. It is not necessary to know which of the three theories the jury relied upon in reaching its decision nor whether the jury relied on only one or on more than one. The defendant is entitled to a unanimous jury verdict on whether murder has been committed. State v. Counterman, 8 Ariz. App. 526, 531, 448 P.2d 96, 101 (1968). The defendant is not, however, entitled to a unanimous verdict on the precise manner in which the act was committed. State v. Emery, 141 Ariz. 549, 552, 688 P.2d 175, 178 (1984); State v. Berndt, 138 Ariz. 41, 45, 672 P.2d 1311, 1315 (1983); State v. Gillies, 135 Ariz. 500, 510, 662 P.2d 1007, 1017 (1983), cert. denied, 470 U.S. 1059, 105 S.Ct. 1775, 84 L.Ed.2d 834 (1985); State v. Encinas, 132 Ariz. 493, 496, 647 P.2d 624, 627 (1982).
The jury could reasonably have found that the defendant was guilty of first degree murder on any one of the three theories offered by the State. Because the verdict need not specify under which theory the defendant was convicted, and because we find ample evidence to support each theory, we affirm defendant's conviction of first degree murder.
B. MAY A CONVICTION FOR A SINGLE PRIOR CRIME BE USED AS TWO STATUTORY AGGRAVATING FACTORS?
At the first sentencing hearing, aggravating and mitigating circumstances were considered. The trial court specifically found:
(1) appellant had been previously convicted of an offense for which under Arizona Law a sentence of life imprisonment or death was imposable and
(2) appellant had been previously convicted of a felony involving the use or threat of violence on another person, thus establishing the aggravating circumstances set forth in A.R.S. § 13-454(E)(1) and (2).[1]
Both of these findings by the trial judge were based on evidence of a prior California conviction for "the crime of lewd and lascivious acts upon a child under the age of 14 years".
Arnett I, 119 Ariz. 38, at 41, 579 P.2d 542, at 545 (1978).
The trial judge found no mitigating circumstances and sentenced defendant to death. On appeal, defendant claimed that the California crime was not within the purview of the type of violent crime to be used to substantiate the imposition of the death penalty.
We upheld the trial court's ruling in finding that this was the type of crime that could be considered as an aggravating circumstance in imposing the death penalty, and upheld the judgment and sentence of the trial court. Arnett I, 119 Ariz. at 51, 579 P.2d at 555.
Later, pursuant to Lockett v. Ohio, 438 U.S. 586, 98 S.Ct. 2954, 57 L.Ed.2d 973 (1978); Bell v. Ohio, 438 U.S. 637, 98 S.Ct. 2977, 57 L.Ed.2d 1010 (1978), and State v. Watson, 120 Ariz. 441, 586 P.2d 1253 (1978), cert. denied, 440 U.S. 924, 99 S.Ct. 1254, 59 L.Ed.2d 478 (1979), the defendant was resentenced, at which time he was allowed to present mitigating circumstances in addition to those in the statute.
At the resentencing, the court found:
I have considered the entire file and all matters which might weigh in your favor in mitigation. I incorporate all findings and conclusions made at your sentencing on September 10th, 1976 as they relate to aggravating circumstances, and I find *21 that A.R.S. 13-454(E)(1) and (2) are present; that you have been convicted of another offense in the United States for which, under Arizona law, a sentence of life imprisonment was imposable, and that you have been previously convicted of a felony in the United States involving the use of violence on another person.
On appeal from the resentencing, we reviewed the hearing to ensure that the trial court took into consideration every potential mitigating circumstance. We found:
It is apparent that the court considered all matters presented in mitigation and did not find them sufficiently substantial to call for leniency. Upon an independent review of the record, Richmond, supra, we agree with the sentence imposed.
Arnett II, 125 Ariz. at 204, 608 P.2d at 781. We then reaffirmed defendant's conviction on appeal.
Defendant now contends that using the one California conviction to establish two aggravating circumstances violates the eighth and fourteenth amendments to the United States Constitution. We have stated:
We hold that as a matter of law a robbery conviction constitutes an aggravating circumstance within the meaning of A.R.S. § 13-703(F)(2). On remand, the defendant's 1965 robbery conviction if proved by the state, may properly constitute two aggravating circumstances, A.R.S. §§ 13-703(F)(1) and (2). However, in its balancing of factors, the trial court may only weigh aggravating circumstances arising out of the 1965 robbery once so as to avoid any possibility of double punishment.
State v. Tittle, 147 Ariz. 339, 345, 710 P.2d 449, 455 (1985).
Even if, as the record indicates, the trial court found two aggravating circumstances arising out of a conviction for one crime, we need not set aside the death sentence. The trial court knew it was dealing with a single act when it found at least one aggravating circumstance. As we recently stated:
In Arizona, the trial court must impose a sentence of death if it finds the existence of one statutory aggravating factor and does not find the existence of any mitigating factor (or one or more mitigating circumstances substantial enough to call for leniency).
State v. Beaty, 158 Ariz. 232, 246-47, 762 P.2d 519, 533-34 (Ariz. 1988).
Defendant's single prior conviction is an aggravating circumstance. The death penalty was properly applied because both the trial court and this court can find no mitigating circumstances which would call for leniency. Tittle, 147 Ariz. at 343, 710 P.2d at 453. We find no error.
C. DID THE TRIAL COURT'S EXCLUSION OF PSYCHIATRIC TESTIMONY ON THE QUESTION OF PRE-MEDITATION DENY DEFENDANT THE RIGHT TO PRESENT A DEFENSE IN VIOLATION OF THE SIXTH AND FOURTEENTH AMENDMENTS TO THE UNITED STATES CONSTITUTION?
During defendant's offer of proof on the admissibility of the expert psychiatric testimony, Dr. Harrison Baker, a psychiatrist testified:
Q. [By Mr. Bair, defense counsel]: Did you then form any opinions in this case as to whether or not this crime had been committed by Mr. Arnett with premeditation?
A. [By Dr. Baker]: That's really a question I suppose I have to answer yes, but the following answer is going to be a "yes but", type of thing.
Q. That's all right. You did form an opinion?
A. Right.
Q. What was that opinion?
A. My opinion was, taking into account the basic personality pattern of Mr. Arnett and taking into account the way he described the incident to me, I concluded that there was relatively little time devoted to consideration and contemplation before the actual commission of the act, and if that qualifies as making it unpremeditated, *22 then that's what I came up with.
* * * * * *
Q. [By Mr. Crismon, prosecutor]: But he can form an intent, he can premeditate and deliberate before he commits an act such as an act of killing; is that correct?
A. [By Dr. Baker]: He is capable of that, yes.
Q. And that is not inconsistent with your other determinations of his personality characteristics?
A. No, it is not.
We have held that an expert witness may testify as to a defendant's personality, but not as to defendant's state of mind at the time of the crime.
Although personality traits may be established by expert opinion, we have held that the use of expert testimony to establish the trait of acting without reflection (e.g., panic reaction to stress) is limited. State v. Christensen, 129 Ariz. 32, 628 P.2d 580 (1981). In Christensen we ruled that "[a]n expert witness may not testify specifically as to whether a defendant was or was not acting reflectively at the time of a killing." Id. at 35-36, 628 P.2d at 583-84 (emphasis added). Instead, an expert witness can only testify as to the general tendency of the defendant to act without reflection, allowing the jury to determine the defendant's intent at the time of the alleged crime. See State v. Hallman, 137 Ariz. 31, 35, 668 P.2d 874, 878 (1983); State v. Christensen, 129 Ariz. at 35-36, 628 P.2d 583-84;[4][[2]] State v. Dickey, 125 Ariz. 163, 169, 608 P.2d 302, 307-08 (1980).
State v. Rivera, 152 Ariz. 507, 514, 733 P.2d 1090, 1097 (1987).
Defendant contends that the trial court erred in denying him an opportunity to present expert psychiatric testimony on the personality trait of impulsivity. Defendant claims that failing to admit such evidence denied him the fundamental right to present a defense in violation of the sixth and fourteenth amendments to the United States Constitution and Ariz. Const. Art. 2, §§ (4) and (24), as to whether the murder was premeditated. We disagree.
The admission of evidence is a matter for the trial court's discretion, which will not be overturned unless an abuse of that discretion is shown. State v. Williams, 132 Ariz. 153, 157, 644 P.2d 889, 893 (1982). In the instant case, the trial court found that the proposed testimony did not show a character trait of impulsivity, but instead was testimony of the defendant's probable state of mind at the time the offense occurred. The trial court properly excluded the proffered expert testimony. Rivera, 152 Ariz. at 514, 713 P.2d at 1097.
V. HOLDING
We have reviewed the record for fundamental error pursuant to A.R.S. § 13-4035, Anders v. California, 386 U.S. 738, 82 S.Ct. 1396, 18 L.Ed.2d 493 (1967) and State v. Leon, 104 Ariz. 297, 451 P.2d 878 (1969). We find none.
The conviction and judgment of death is affirmed.
GORDON, C.J., FELDMAN, V.C.J., and HOLOHAN and MOELLER, JJ., concur.
NOTES
[1] Prior to the 1978 Revised Criminal Code, Arizona's death penalty was found at A.R.S. § 13-454. Arizona's present death penalty is found at A.R.S. § 13-703 (Supp. 1983).
[2] Footnote [4] states:
4. In Christensen we stated that "[t]he establishment of the character trait of acting without reflection tends to establish that appellant acted impulsively. From such a fact, the jury could have concluded that he did not premeditate the homicide." 129 Ariz. at 35, 628 P.2d at 583.
|
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Opinion issued September 30, 2004
In The
Court of Appeals
For The
First District of Texas
NO. 01–04–00752–CV
NICOLE (COOPER) LAMBETH, Appellant
V.
YANCEY DEAN COOPER, Appellee
On Appeal from the 245th District Court
Harris County, Texas
Trial Court Cause No. 2001-48927
MEMORANDUM OPINIONAppellant Nicole (Cooper) Lambeth has neither established indigence, nor paid
all the required fees. See Tex. R. App. P. 5 (requiring payment of fees in civil cases
unless indigent), 20.1 (listing requirements for establishing indigence); see also Tex.
Gov’t Code Ann. §§ 51.207, 51.941(a), 101.041 (Vernon Supp. 2004) (listing fees
in court of appeals); Fees Civ. Cases B(1), (3) (listing fees in court of appeals).
After being notified that this appeal was subject to dismissal, appellant Nicole Cooper
Lambeth did not adequately respond. See Tex. R. App. P. 5 (allowing enforcement
of rule); 42.3(c) (allowing involuntary dismissal of case).
The appeal is dismissed for nonpayment of all required fees. All pending
motions are denied.
PER CURIAM
Panel consists of Justices Nuchia, Alcala, and Hanks.
|
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Order filed March 6, 2014.
In The
Fourteenth Court of Appeals
____________
NO. 14-14-00010-CV
____________
WENDY SCHREIBER, Appellant
V.
STATE FARM LLOYDS, Appellee
On Appeal from the 190th District Court
Harris County, Texas
Trial Court Cause No. 2012-03419
ORDER
The record in this appeal was due on or before January 21, 2014, but it has
not been filed. On January 22, 2014, the court issued a notice that the record was
past due. On January 29, 2014, appellant notified this court that payment had been
made for preparation of the reporter’s record. On February 12, 2014, the Harris
County District Clerk advised this court that appellant had not paid for preparation
of the clerk’s record. On February 12, 2014, the court notified appellant that the
appeal was subject to dismissal unless appellant provided proof of payment for the
clerk’s record by February 27, 2014. See Tex. R. App. P. 37.3(b). No response was
filed. Accordingly, we issue the following order.
Appellant is ordered to pay for preparation of the clerk’s record and provide
this court with proof of payment for the record on or before March 17, 2014. If
appellant fails to comply with this order, the court will dismiss the appeal for want
of prosecution. See Tex. R. App. P. 37.3(b).
PER CURIAM
2
|
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|
529 S.E.2d 375 (2000)
242 Ga. App. 241
BURRUSS
v.
The STATE.
No. A00A0252.
Court of Appeals of Georgia.
February 3, 2000.
*376 Barr, Warner, Lloyd & Pine, John V. Lloyd, Savannah, for appellant.
Frank P. Burruss, pro se.
Spencer Lawton, Jr., District Attorney, Michael K. Dennard, Assistant District Attorney, for appellee.
McMURRAY, Presiding Judge.
Defendant was indicted for one count of obtaining a controlled substance by fraud. By accusation, he was charged with driving after being declared a habitual violator, reckless driving, driving under the influence of alcohol to the extent that it was less safe for him to drive, operating a motor vehicle without proof of insurance, driving with an expired State tag, and driving on the wrong side of the road. Defendant entered into plea bargain negotiations as to the offenses charged. An agreement was reached whereby he agreed to enter an open-ended guilty plea to such offenses. In exchange, the State agreed to offer defendant's three prior felony convictions in aggravation of punishment only and waived prosecuting the defendant as a recidivist under OCGA § 17-10-7. A hearing was held wherein the superior court accepted the guilty pleas and, without objection from defendant, imposed an eight-year sentence without parole pursuant to OCGA § 17-10-7(c)[1] as to the charge of obtaining a controlled substance by fraud to run concurrent to its sentence on the traffic violations.[2] Thereafter, the trial court granted defendant's motion to reconsider its sentence as to the charge of obtaining a controlled substance by fraud and resentenced defendant therefor to serve five years, this time omitting the words "without parole" set out in its original order and again providing that its sentence, as reconsidered, be served concurrently with that imposed against defendant for his traffic offenses. In signing its final order resentencing defendant nunc pro tunc to the date of the original order on sentence, the superior court restored the language it omitted in granting defendant's motion for reconsideration of sentence, specifying that the sentence was to be served without parole. Defendant filed a timely notice of appeal and enumerates that: (1) the superior court impermissibly *377 enhanced his sentence by adding language to its final order on sentence providing that the sentence was without parole pursuant to OCGA § 17-10-7(c); and (2) the sentence upon accusation as to his traffic offenses was illegal since the State's attorney had not given defendant notice of his intent to prosecute him as a recidivist. Held:
1. The superior court did not err in resentencing defendant to confinement to be served without parole by its final order on resentence. Although in granting defendant's motion for reconsideration of sentence the superior court omitted the words "without parole" required under OCGA § 17-10-7(c), it validly resentenced the defendant upon entering its final order on resentence correcting such omission. See Conrad v. State, 217 Ga.App. 388, 390-391(3), 457 S.E.2d 592. "`[I]f the sentence imposed was a void sentence, then a new and valid sentence can be imposed ... at any time.' (Punctuation and citations omitted.) McCranie v. State, 157 Ga.App. 110, 111, 276 S.E.2d 263 (1981)." Gonzalez v. State, 201 Ga.App. 437, 438, 411 S.E.2d 345. The superior court did not err in doing so in the case sub judice.
2. Neither is there merit in defendant's claim that the superior court erred in sentencing him as a recidivist under OCGA § 17-10-7 for want of notice of the State attorney's intent to prosecute him as such under OCGA § 17-10-2(a). OCGA § 17-10-2(a) is not applicable to sentences imposed pursuant to a hearing on a guilty plea. Powell v. State, 229 Ga.App. 52(1), 494 S.E.2d 200. Further, defendant's complaint that he was not given appropriate notice notwithstanding, defendant's counsel offered no objection to the admission of his prior convictions. Thus, even had there been error attendant thereto (and we find none), it would have been waived. Howard v. State, 233 Ga.App. 724, 726(1)(a), 505 S.E.2d 768; Hatcher v. State, 224 Ga.App. 747, 750(2)(a), 482 S.E.2d 443.
Judgment affirmed.
JOHNSON, C.J., and PHIPPS, J., concur.
NOTES
[1] The superior court correctly noted in this regard that defendant's conviction of obtaining a controlled substance by fraud was defendant's fifth felony.
[2] On these the superior court sentenced defendant to five years to serve on Count 1 (habitual violator), twelve months to serve on Count 2 (reckless driving), twelve months to serve and a $1,000 fine on Count 3 (driving under the influence), six months to serve on Count 4 (driving without proof of insurance), a $50 fine on Count 5 (driving with an expired State tag), and twelve months to serve concurrent on Count 6 (driving on the wrong side of the road).
|
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In the Missouri Court of Appeals
Eastern District
SEPTEMBER 22, 2015
THE FOLLOWING CASES WERE AFFIRMED IN ACCORDANCE WITH RULE
84.16(b) OR RULE 30.25(b).
1. ED101702 HARLEY J. SMITH, APP V STATE OF MISSOURI, RES
2. ED102251 STATE OF MISSOURI, RES V KENNETH HURSE, APP
3. ED102267 AMY L. ALBRECHT, RES V DAVID J. ALBRECHT, APP
4. ED102366 KENNETH BUTLER, JR., APP V STATE OF MISSOURI, RES
5. ED102370 CHERI BOYD, APP V LAKE ADELLE PROPERTY OWNERS, RES
6. ED102407 AMERICAN MULTI-CINEMA, APP V JAKE ZIMMERMAN, RES
7. ED102446 JOHN W. WOLFNER RES V HERITAGE UNION LIFE INS APP
|
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UNITED STATES ARMY COURT OF CRIMINAL APPEALS
Before
YOB, KRAUSS, and BURTON
Appellate Military Judges
UNITED STATES, Appellee
v.
Private First Class TIMOTHY M. DABROWSKI
United States Army, Appellant
ARMY 20120012
Headquarters, 3d Infantry Division and Fort Stewart
Tiernan Dolan, Military Judge
Colonel Randall J. Bagwell, Staff Judge Advocate
For Appellant: Major Richard E. Gorini, JA; Captain Matthew M. Jones, JA.
For Appellee: Lieutenant Colonel Amber J. Roach, JA.
31 October 2012
----------------------------------
SUMMARY DISPOSITION
----------------------------------
YOB, Senior Judge:
A military judge, sitting as a general court-martial, convicted appellant,
pursuant to his pleas, of one specification of violating a lawful order of a superior
commissioned officer to remain on post because his pass privileges were revoked,
one specification of violating a lawful order of a noncommissioned officer not to
maintain a personally owned weapon or store ammunition in his barracks room, one
specification of wrongful manufacture of a controlled substance with the intent to
distribute, three specifications of wrongful use of a controlled substance, one
specification of wrongful distribution of a controlled substance, and one
specification of negligently discharging a firearm, in violation of Articles 90, 91,
112a, and 134, Uniform Code of Military Justice, 10 U.S.C. §§ 890, 891, 912a, 934
(2006) [hereinafter UCMJ]. The convening authority approved the adjudged
sentence of a dishonorable discharge, confinement for 28 months, and reduction to
the grade of E1. Appellant was credited with a total of 243 days of confinement
credit for pretrial confinement pursuant to United States v. Allen, 17 M.J. 126
(C.M.A. 1984), for unlawful pretrial punishment under Article 13, UCMJ, and for
punishment already imposed pursuant to United States v. Pierce, 27 M.J. 367
(C.M.A. 1989).
DABROWSKI—ARMY 20120012
This case is before the court for review under Article 66, UCMJ. Appellant
submitted the case on its merits. This court has considered the matters appellant
raised pursuant to United States v. Grostefon, 12 M.J. 431 (C.M.A. 1982), and
determined that they are without merit. However, pursuant to the ultimate offense
doctrine and in light of the fact that breaking restriction can no longer be considered
a lesser-included offense of willfully disobeying a superior commissioned officer,
we find a substantial basis in law and fact to reject appellant’s plea to Charge II and
its Specification.
Neither the stipulation of fact nor the providence inquiry develops or
establishes sufficient facts to support a plea of guilty to a violation of Article 90,
UCMJ, but merely establish the offense of breaking restriction in violation of Article
134, UCMJ. Absent admission or stipulation that the superior officer invested the
restriction, subject to charge here, “with the full authority of his office” to “lift [the
duty to remain within certain limits] above the common ruck,” United States v. Loos,
4 U.S.C.M.A. 478, 480–81, 16 C.M.R. 52, 54–55 (1954), the “ultimate offense” in
this case was breaking restriction. See United States v. Traxler, 39 M.J. 476
(C.M.A. 1994); United States v. Peaches, 25 M.J. 364 (C.M.A. 1987); United States
v. Bratcher, 18 U.S.C.M.A. 125, 39 C.M.R. 125 (1969). In addition, the offense of
breaking restriction can no longer be considered a lesser-included offense of
disobeying a superior commissioned officer so that this court is not free to substitute
the former for the latter. See generally United States v. Jones, 68 M.J. 465, 472
(C.A.A.F. 2010).
Therefore, we find a substantial basis in law and fact to reject appellant’s plea
of guilty to Charge II and its Specification and disapprove the finding of guilty. See
United States v. Inabinette, 66 M.J. 320 (C.A.A.F. 2008).
On consideration of the entire record, we disapprove the finding of guilty of
Charge II and its Specification and dismiss that charge and specification. The
remaining findings of guilty are correct in law and fact and are affirmed.
Reassessing the sentence on the basis of the error noted, the entire record, and in
accordance with the principles of United States v. Sales, 22 M.J. 305 (C.M.A. 1986),
and United States v. Moffeit, 63 M.J. 40 (C.A.A.F. 2006), to include the factors
identified by Judge Baker in his concurring opinion in Moffeit, the court affirms the
sentence as approved by the convening authority.
Judge KRAUSS and Judge BURTON concur.
FOR
FORTHE
THECOURT:
COURT:
MALCOLM
MALCOLMH. H.SQUIRES,
SQUIRES,JR.
JR.
Clerk of Court
Clerk of Court
2
DABROWSKI—ARMY 20120012
3
|
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586 So.2d 562 (1991)
Arthur RUIZ
v.
Suzanne M. LEWIS and State Farm Mutual Automobile Insurance Company.
No. 91-C-1654.
Supreme Court of Louisiana.
October 11, 1991.
Denied.
|
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|
561 P.2d 1252 (1977)
DENVER CLEANUP SERVICE, INC., a Colorado Corporation, Petitioner-Appellant,
v.
PUBLIC UTILITIES COMMISSION of the State of Colorado, et al., Respondents-Appellees.
No. 27059.
Supreme Court of Colorado, En Banc.
March 7, 1977.
Rehearing Denied April 18, 1977.
Holland & Hart, Jeffrey C. Pond, Denver, for petitioner-appellant.
J. D. MacFarlane, Atty. Gen., Jean E. Dubofsky, Deputy Atty. Gen., Edward G. Donovan, Sol. Gen., John E. Archibold, Special Asst. Atty. Gen., Denver, for The Public Utilities Commission of the State of Colorado and Howard S. Bjelland, Edwin R. Lumdborg and Henry E. Zarlengo, Commissioners.
John J. Conway, Denver, for amicus curiae The Contract Carriers' Conference.
GROVES, Justice.
Denver Cleanup Service, Inc., herein called the petitioner, applied to the Public Utilities Commission for an extension of its contract carrier's permit in order to provide contract carrier service for the transportation of ashes, trash and other refuse to four companies. The Commission followed the recommendation of its hearing examiner, granting the extension of service to one customer and denying it as to the other three. On appeal by the petitioner, the district court affirmed the Commission's action. We reverse.
There were several protestants before the Commission. Two of these, both certificated common carriers, appeared in the district court and here.
In making his recommended decision, the hearing examiner relied upon an administrative decision which did not become the subject of judicial review. In re Curnow Transportation Company, PUC Decision No. 76151 (1970). From Curnow, the hearing officer in this case stated four criteria which he regarded as necessary elements of proof. We refer to these as guidelines and paraphrase and quote them as follows:
1. Applicant must establish that the transportation to be performed is within the definition of "contract carrier by motor vehicle", C.R.S.1963, 115-11-1(h). This is proved in the following manner: There is a presumption that the proposed service constitutes common carriage, and the method of overcoming this presumption, as stated in Curnow, is to establish that the proposed service is so specialized *1253 and tailored to the particular shipper that it is beyond the capability of existing common carriers.
2. "Applicant must establish the existence of a present or future private or personal need for the proposed service."
3. "Applicant must establish either (1) inadequacy of the common carriers to handle the proposed service, or (2) that the proposed operation of the contract carrier will not impair the service of common carriers serving the same area."
4. "Applicant must establish that it is fit and able to perform the proposed service."[1]
We have concluded that the test set forth in guideline 1 is invalid. Before we reach our discussion of this invalidity, we make the following prefatory comments.
Curnow, supra, correctly set forth that one may look in vain in the statutes or in the rulings of the Commission and of this court for a clear definition of contract carriage or for an articulation of specific guidelines to be followed in the issuance of a contract carrier permit. Our statutes provide for authorization of (1) common carriers and (2) contract carriers. They state that a common carrier is one which must indiscriminately accept and carry passengers or property between fixed points or over established routes. The principal statutory distinction between the two is that a contract carrier is one which is not a common carrier. See sections 40-1-102(3), XX-XX-XXX(4), XX-XX-XXX(3) and XX-XX-XXX(9)(a) and (b), C.R.S.1973.
In Miller Bros v. P.U.C., 185 Colo. 414 at 435, 525 P.2d 443 at 454 (1974), we stated:
"We are tempted to announce a set of guidelines, extracted from the statutes and decisions of other jurisdictions. This, however, lies solely within the province of the Commission. To repeat, the Commission is here acting in a legislative capacity. It needs to apply guidelines, and it is within our jurisdiction on appeal to see that it does. Also, it is within our authority to declare standards and criteria as unconstitutional and arbitrary, capricious, unreasonable or vague."
Admittedly, one of the fundamental distinctions between a contract carrier and a common carrier is that a contract carrier has an obligation only to his contract-customers and has no obligation to others desiring carriage. In contrast, the common carrier must convey for all desiring its transportation. Ward Transport v. P.U.C., 151 Colo. 76, 376 P.2d 166 (1962). The petitioner would have us hold that, so long as it follows this rule, it is entitled to a permit. This argument we do not accept. If further guidelines were not established, the applicant would need only to present evidence that there was a customer or customers desiring service. This would be fatal to the continued economic viability of common carriers, and contrary to the obvious legislative purpose that there be both contract carriers and common carriers.
In guideline 1, the Commission has approached the opposite extreme by requiring that, to be considered a contract carrier, the proposed service must be beyond the capabilities of an authorized common carrier. In effect, this "specialization" standard of guideline 1 grants a monopoly to common carriers, eliminating the need for contract *1254 carriage except under too limited circumstances.[2]
Until Senate Bill 208 was adopted by Colo.Sess.Laws 1967, ch. 433, at 974, this state had a policy of "regulated monopoly" as to common carriers, established by pronouncements of the Commission and this court. This enactment, now in section 40-10-105, C.R.S.1973, changed the policy of this state from one of regulated monopoly to "regulated competition". For discussion of the subject, see Miller, supra, and Red Ball Motor Freight v. P.U.C., 185 Colo. 438, 525 P.2d 439 (1974). Prior to S.B. 208, in many decisions of the Commission and of this court involving protests by common carriers of private carrier authority, there was intertwined the doctrine of regulated monopoly. An example is P.U.C. v. Stanton Co., 153 Colo. 372, 386 P.2d 590 (1963). Here, the Commission is going even further than Stanton to protect the common carrier monopoly, whereas under the legislative policy of regulated competition our courts and the Commission should proceed somewhat in the other direction.
From the foregoing, if guideline 1 is contrary to legislative intent, it is apparent that the solution to the problem here presented lies between the extremes indicated on the one side by the petitioner and on the other by the Commission in guideline 1.
The Colorado and federal constitutions condition the exercise of governmental regulation for public health, safety and welfare by requiring that the intended goals shall be achieved through methods consistent with due process of law. See Nebbia v. New York, 291 U.S. 502, 525, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469 (1934); and Swisher v. Brown, 157 Colo. 378, 402 P.2d 621 (1965). The General Assembly established several types of motor vehicle transportation, including common and contract carriage. By doing so, without question it intended to protect the public health, safety, and general welfare by providing a framework for the better transportation of persons and property.
The test used by the Commission, however, discriminates unreasonably in favor of common carriers to the unnecessary detriment of contract carriers. The guidelines used by the Commission promote too strongly the demise of contract carriers. Since the legislative purpose negates a result that either class be obliterated by the Commission's fiat, it follows that the Commission's test violates legislative intent and purpose.
Inasmuch as we declare the Commission's test invalid, and as there is such a dearth of legislative and judicial particularity concerning guidelines, we have concluded to indicate some guidelines which may be considered by the Commission.[3]
We are favorably impressed by the federal rule which gives as a guideline that a shipper is entitled to have its distinct needs met and that a contract carrier may design its services to meet those distinct needs. 49 U.S.C. § 303(a)(15) and I.C.C. v. J. T. Transport Co., 368 U.S. 81, 82 S.Ct. 204, 7 L.Ed.2d 147 (1961). This suggests to us, and we in turn suggest to the Commission, that the portion of the test of a contract carrier as here involved is whether its service to a particular potential customer is distinctly different or superior to that of authorized common carriers.
There is no issue as to guideline 4 regarding fitness and ability. Guidelines 2 and 3 are intertwined with guideline 1. In the light of our disposition of and comments concerning the latter, the Commission should reconsider the first three guidelines.
We reverse the judgment of the district court and direct it to remand the cause to *1255 the Commission for reconsideration consonant with the views herein expressed.
KELLEY, J., does not participate.
NOTES
[1] The Commission derived guideline 1 from its view that one of the purposes of the contract carrier act is to protect common carriers from encroachment by contract carriers. See Public Utilities Commission v. Stanton Transportation Company, 153 Colo. 372, 386 P.2d 590 (1963).
Guideline 2 is also derived from the Commission's reasoning that the purpose of the contract carrier act is to protect common carriers, and from Ward Transport v. P.U.C., 151 Colo. 76, 376 P.2d 166 (1962), which affirmed a PUC decision issuing a private carrier's permit partially based upon a finding that there was a "present or future private or personal need for the proposed service."
Guideline 3 is derived from the provisions of Section 40-11-103(2), C.R.S.1973.
Guideline 4 has been used over the years by the Commission as an ultimate finding in both common and contract carrier orders. This criterion received tacit judicial approval in Ward Transport, supra.
[2] The "specialization doctrine" presents itself under a variety of tests and has had a complicated case history. It was first enunciated in Pregler Extension of Operations, 23 M.C.C. 691 (1940), and received approval in Doyle Transfer Company v. U.S., 45 F.Supp. 691 (D.D.C.1942). A discussion of the history of this test is found in Contract Steel Carriers v. U.S., 128 F.Supp. 25 (N.D.Ind.1955).
[3] We realize this is contra to our intention to remain silent as expressed two and one-half years ago in Miller, supra.
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09-5110-cv
Guzman v. United States of America
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
AMENDED SUMMARY ORDER
R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT . C ITATION TO A SUMMARY ORDER FILED ON OR AFTER J ANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ’ S L OCAL R ULE 32.1.1.
W HEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT , A PARTY MUST CITE EITHER THE F EDERAL A PPENDIX OR AN
ELECTRONIC DATABASE ( WITH THE NOTATION “ SUMMARY ORDER ”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL .
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of New
4 York, on the 1 st day of October, two thousand and ten.
5
6 PRESENT: JON O. NEWMAN,
7 GUIDO CALABRESI,
8 RICHARD C. WESLEY,
9 Circuit Judges.
10
11
12
13 ISABELLE GUZMAN,
14
15 Plaintiff-Appellant,
16
17 -v.- 09-5110-cv
18
19 WACKENHUT CORPORATION,
20
21 Defendant-Appellee,
22
23 UNITED STATES OF AMERICA, L-3 COMMUNICATIONS, SECURITY
24 DETECTION SYSTEMS CORPORATION,
25
26 Defendants. *
27
28
*
The Clerk of the Court is directed to amend the
official caption to conform with the caption above.
1 FOR APPELLANT: GREGORY R. PRESTON, Preston, Wilkins,
2 Martin & Rodriguez, PLLC, New York, NY.
3
4 FOR APPELLEE: BRENDAN T. FITZPATRICK, Ahmuty, Demers &
5 McManus, Albertson, NY.
6
7 Appeal from the United States District Court for the
8 Southern District of New York (Sweet, J.)
9
10 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
11 AND DECREED that the judgment of the district court be VACATED
12 and REMANDED.
13 Plaintiff-Appellant, Isabelle Guzman appeals from a
14 judgment of the United States District Court for the
15 Southern District of New York (Sweet, J.), which granted
16 summary judgment in favor of Defendant-Appellee Wackenhut
17 Corporation. We assume the parties’ familiarity with the
18 underlying facts, the procedural history, and the issues
19 presented for review. 1
20 Under New York Law, a plaintiff seeking recovery for
21 personal injuries under a negligence theory must show duty,
22 breach, actual and proximate causation, and damages.
23 Williams v. Utica College of Syracuse Univ., 453 F.3d 112,
1
Plaintiff, Guzman, sued the United States of America
as owner and operator of the Statue of Liberty and Liberty
Island thus invoking the district court’s jurisdiction. 28
U.S.C § 1346(b). Claims against other defendants, including
Wackenhut Corporation, were included pursuant to the
district court’s supplemental jurisdiction. 28 U.S.C §
1367. The United States is no longer party to this action.
Plaintiff’s remaining negligence action against Wackenhut is
a matter of New York State law. We review de novo a grant
of summary judgment. Huminski v. Corsones, 396 F.3d 53, 69
(2d Cir. 2005).
1
1 116 (2d Cir. 2006). An existence of a duty of care is
2 usually a question of law for the court. Palka v.
3 Servicemaster Mgmt. Serv. Corp., 83 N.Y.2d 579, 585 (1994).
4 It is for the fact-finder to determine whether the duty was
5 breached and, if so, whether the breach was the proximate
6 cause of plaintiff's injury. Id.
7 Wackenhut is an independent contractor, hired by the
8 National Park Service (“NPS”) to provide security services
9 at the Statue of Liberty. As the district court correctly
10 noted, a contractor generally does not owe an independent
11 tort duty of care to a non-contracting third party. Espinal
12 v. Melville Snow Contractors Inc., 98 N.Y.2d 136, 138—139
13 (2002); see also Church v. Callanan Indus., Inc., 99 N.Y.2d
14 104, 111 (2002).
15 However, there are three circumstances in which a duty
16 of care to non-contracting third parties may arise out of a
17 contractual obligation or the performance thereof: “(1)
18 where the contracting party, in failing to exercise
19 reasonable care in the performance of his duties, launche[s]
20 a force or instrument of harm,” Espinal, 98 N.Y.2d at 140,
21 or, stated differently, “negligently creates or exacerbates
22 a dangerous condition;” id. at 141—42; “(2) where the
23 plaintiff detrimentally relies on the continued performance
24 of the contracting party's duties; and (3) where the
2
1 contracting party has entirely displaced the other party's
2 duty to maintain the premises safely,” id. at 140 (internal
3 quotations and citations omitted); see also Church, 99
4 N.Y.2d at 111 (describing the first Espinal exception as
5 applying to circumstances “where the promisor, while engaged
6 affirmatively in discharging a contractual obligation,
7 creates an unreasonable risk of harm to others, or increases
8 that risk”).
9 We conclude that Guzman’s claim against Wackenhut for
10 the negligent operation and supervision of the x-ray machine
11 is viable under the first Espinal exception. Wackenhut was
12 employed, among other things, to operate the x-ray machines
13 at the Statue of Liberty. The protocol that NPS developed
14 to clean the machines required Fedcap employees, like
15 Guzman, to hold a rag on the x-ray machine’s conveyor belt
16 while the belt was moving. To facilitate this process,
17 Wackenhut employees, at the request of Fedcap employees,
18 would activate the conveyor belt and turn it off after
19 cleaning was completed. Guzman was injured while executing
20 this protocol. The Wackenhut employee started the conveyor
21 belt, running it in Guzman’s direction, and then left the
22 controls to retrieve a log book to mark down that the
23 machine was cleaned. At that moment, Guzman’s hand became
3
1 caught between the conveyor belt and the first metal roller.
2 While executing the cleaning protocol in cooperation
3 with Guzman, the Wackenhut employee controlled, and was
4 capable of launching, a potential instrument of harm.
5 Espinal, 98 N.Y.2d at 140. As the one responsible for
6 starting and stopping the machine while Guzman cleaned the
7 conveyor belt, the Wackenhut employee was in a position to
8 create or increase an unreasonable risk of harm to Guzman.
9 See Church, 99 N.Y.2d at 111. Under these circumstances,
10 Wackenhut owed a duty to Guzman to operate the conveyor belt
11 with reasonable care. Therefore, the district court’s grant
12 of summary judgment on the ground that Wackenhut owed Guzman
13 no duty of care was incorrect. 2
14 Moreover, we disagree with the district court to the
15 extent it suggested that there exist alternative grounds for
16 granting summary judgment, namely that there are no facts to
17 suggest that Wackenhut breached its duty of care or that
18 such breach caused Guzman’s injuries. Under New York law,
19 breach and proximate cause are questions for the finder of
20 fact. See Palka, 83 N.Y.2d at 585. Guzman’s expert raises
2
Wackenhut corporation is liable for any negligence of
its employee arising from acts committed within the scope of
the employee's employment. Brown v. Poritzky, 30 N.Y.2d
289, 292 (1972). There is no dispute that the Wackenhut
employee was acting within the scope of his employment.
4
1 issues of material fact as to whether, by turning the belt
2 on in her direction and/or by stepping away from the
3 controls while Guzman cleaned the belt, the Wackenhut
4 employee created an unreasonable risk of harm, thereby
5 breaching its duty of care, and whether those alleged
6 breaches caused Guzman’s injuries. The existence of these
7 issues of material fact render summary judgment improper.
8 See Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir.
9 2000). Accordingly, we remand to the district court for
10 further proceedings consistent with this Order.
11 For the foregoing reasons, the judgment of the district
12 court is hereby VACATED and REMANDED.
13
14 FOR THE COURT:
15 Catherine O’Hagan Wolfe, Clerk
16
17
5
|
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"pile_set_name": "FreeLaw"
}
|
118 Ariz. 582 (1978)
578 P.2d 1011
The STATE of Arizona, Appellee,
v.
James Ronald BAILES, and Darryl Scott Phillips, Appellants.
Nos. 2 CA-CR 1168, 2 CA-CR 1175.
Court of Appeals of Arizona, Division 2.
March 1, 1978.
Rehearings Denied April 5, 1978.
Reviews Denied May 2, 1978.
*584 Bruce E. Babbitt, Atty. Gen. by William J. Schafer, III, Georgia B. Ellexson, Asst. Attys. Gen., Phoenix, for appellee.
Harley D. Kurlander, Tucson, for appellant Bailes.
Jeffrey W. Hanes, Tucson, for appellant Phillips.
OPINION
RICHMOND, Chief Judge.
Appellants James Ronald Bailes and Darryl Scott Phillips were tried jointly by a jury on charges arising out of the kidnapping of a Tucson housewife from the El Con Shopping Center parking lot in December 1975. The victim was taken in her car into the desert and raped there by one of her two kidnappers, who then took her watch and ring before the two men drove away in her vehicle. Bailes was convicted of kidnapping for rape, rape, theft of a motor vehicle, and robbery. Phillips was convicted of kidnapping for rape, robbery, and theft of a motor vehicle with intent to temporarily deprive.
None of the various points raised on these consolidated appeals merits reversal in either case, for the reasons set forth below.
JAMES RONALD BAILES
Bailes challenges his convictions on seven grounds:
1. The witness Frances MacBride was his common-law wife under Georgia law and should not have been permitted to testify.
2. Impeachment of MacBride was improper.
3. A photograph of appellants seized in a warrantless search of a residence where Bailes had been staying should have been suppressed.
4. The trial court erred in refusing to appointed an investigator to locate two other suspects.
5. The trial court erred in refusing to instruct the jury on evidence that Bailes was not present at the time and place of the crime.
6. Pre-trial photographic identification should have been suppressed.
*585 7. The facts did not constitute the crime of robbery.
MacBride testified without objection at the preliminary hearing that within a few days after the date of the crimes Bailes had given her the victim's watch and ring as a Christmas present. She also testified that for a period of three years up until two months before the hearing she had lived with Bailes and held herself out as his wife in Florida, Georgia and Arizona. Prior to trial Bailes moved to preclude her from testifying under A.R.S. § 13-1802[1] on the grounds that they were married, according to Georgia law, which recognizes common-law marriages, see Georgia Code Annotated § 53-101, Brown v. Brown, 234 Ga. 300, 215 S.E.2d 671 (1975), and that marriages valid by the laws of the place where contracted are valid in Arizona. A.R.S. § 25-112 A
Essential to common-law marriage in Georgia are: (1) parties able to contract; (2) an actual contract; (3) consummation according to law. Georgia Code Annotated § 53-101. When the relationship between the parties begins as an illicit arrangement, the burden is on the party asserting the validity of the marriage to show that the illicit relationship ended and the parties did actually enter into a marriage. Brown v. Brown, supra. Here, according to MacBride's testimony at the hearing on the motion in limine, she and Bailes had lived together illicitly for about a year in Florida, where there are no common-law marriages, before going to Georgia in December 1974 or January 1975 "to get married * * * with a license and blood tests and all that." At that time they were unaware of either Florida or Georgia statutes with respect to common-law marriage. They returned to Florida without obtaining a license or going through any marriage ceremony and remained there until they came to Tucson in the summer of 1975. They again went to Georgia in April or May 1976 and remained there a few months before returning to Florida. In August or September 1976 they applied for a marriage license in Florida.
Although MacBride testified they regarded themselves as husband and wife throughout the three years they lived together, the admitted fact that they were ignorant of Georgia law regarding common-law marriages and intended "to get married" by more conventional means when they went to Georgia in 1974 or early 1975 establishes that they then regarded their relationship as illicit. It was their burden to show the end of that relationship and that they subsequently entered into a marriage contract. Brown v. Brown, supra. While MacBride had identified herself to friends and landlords as Mrs. Bailes, she used the name MacBride when applying for a job and on income tax returns. She also testified:
"Q. * * * Francie, do you remember talking to the police in September of 1976?
"A. Yes.
"Q. At that time you talked to them because you were concerned about Ronnie; is that right?
"A. yes.
"Q. Did you ever tell him you were his wife?
"A. No I don't guess I did.
"Q. Do you remember referring to him as your boyfriend?
"A. Yes."
The trial court found from the evidence that the parties were not married. It does not appear that its finding was clearly erroneous, In Re Estate of Trigg, 3 Ariz. App. 385, 414 P.2d 988 (1966), hence denial of the motion in limine was not error. See also Krisko v. John Hancock Mutual Life Insurance Co., 15 Ariz. App. 304, 488 P.2d 509 (1971).
On September 8, 1976, MacBride told detective John Martin that within a few days after the crimes she had seen Bailes with *586 clothing identified in photographs as clothes stolen from the victim's car. At the preliminary hearing she testified:
"Q. They showed you other pictures besides the watch, and the ring, and the shirt?
"A. They were all of clothes, I think.
"Q. Whole bunch of clothes?
"A. Two or three shirts and a jacket, pants, and the watch and ring.
"Q. Did you identify any of these shirts or this jacket, pair of pants or any other piece of clothing?
"A. Yes."
At trial, with respect to the clothes, she testified:
"Q. You never identified any of these other items?
"A. No. Ronnie never owned anything like that."
* * * * * *
"Q. Did you tell them you had never seen any of this clothing before?
* * * * * *
"THE WITNESS: I believe that I didn't say that I didn't identify them because I don't ever remember seeing them, but I know, you know, probably said I have never seen him in any clothes like that. He wouldn't wear something like that."
The prosecutor over timely objection then was allowed to impeach MacBride with the preliminary hearing transcript and the testimony of detective Martin. Bailes contends that mere denial of a prior statement was not prejudicial to the state's case and should not have subjected MacBride to impeachment by the party calling her. State v. LaBarr, 115 Ariz. 444, 565 P.2d 1305 (App. 1977). Her testimony went beyond such denial, however, in the volunteered exculpatory statement that she had never seen Bailes in any such clothing, and impeachment was properly allowed. State v. Skinner, 110 Ariz. 135, 515 P.2d 880 (1973).
Bailes also was a suspect in an unrelated homicide. Another suspect, Gerald Morse, told police that someone fitting Bailes's description was staying with him, and consented to a search of his residence. During the search an officer found two photographs, including one of Bailes and Phillips that was used in identifying them in the instant case. Bailes attacks the search on alternative grounds: first, that Morse was so highly intoxicated that he was unable to give valid consent, and second, that Morse's consent could not extend to Bailes's effects. Testimony at the hearing on a motion to suppress the photographs established that Morse was extremely intoxicated when he arrived at the police station. He was given coffee to drink and his interrogation was delayed while police talked with other witnesses. Consent to search his residence for another suspect (Bailes) and identification of the other suspect was obtained more than an hour after Morse's arrival. Although Bailes testified at the hearing that the photographs were kept in a closed box, the officer who seized them testified that he had found them lying in plain view on top of a dresser in one of the bedrooms, and it is not contended that Morse could not consent to the search of the room. Compare State v. Tucker, 118 Ariz. 76, 574 P.2d 1295 (filed January 30, 1978). Examining the evidence in the light most favorable to supporting the trial court's ruling on the motion to suppress, State v. Childs, 113 Ariz. 318, 553 P.2d 1192 (1976), we find no error.
Prior to trial, the court denied a motion for appointment of an investigator to locate two other individuals who had been eliminated as suspects after a photograph of one of them had been shown to the victim. In the absence of clear and convincing evidence that Bailes was prejudiced by the denial of the motion, and that the appointment was reasonably necessary to present an adequate defense, the ruling of the trial court will not be disturbed on appeal. Cf. State v. Knapp, 114 Ariz. 531, 562 P.2d 704 (1977). The instant case is clearly distinguishable from Bowen v. Eyman, 324 F. Supp. 339 (D.Ariz. 1970), relied on by Bailes. In Bowen, it was conceded that the requested blood test could have *587 negated the defendant's guilt. It was within the trial court's discretion here to determine whether finding the two men was reasonably necessary to Bailes's defense. Although one of them in some respects met the physical characteristics of the victim's assailant, she had eliminated him as a suspect after seeing his photograph. We find no abuse of discretion in refusing to appoint an investigator.
The trial court refused to give the following jury instruction offered by Bailes:
"The defendant has produced evidence that he was not present at the time and place the alleged crime was committed. If you have a reasonable doubt whether the defendant was present at the time and place the alleged crime was committed, you must find the defendant not guilty."
Other than his denial that he was present, there was no evidence of Bailes's whereabouts at the time of the crimes. The jury was properly and adequately instructed on the elements of the crimes charged and on reasonable doubt. It was not error to refuse the requested instruction. State v. Hess, 9 Ariz. App. 29, 449 P.2d 46 (1969).
Bailes was identified by the victim from a photographic lineup in September 1976, after he had been arrested on the unrelated homicide charge. The photograph had been made at the time of his arrest and showed him with two blackened eyes and a broken nose. He contends the lineup was unduly suggestive because he was the only one of eight subjects so disfigured. The trial court determined otherwise. Bailes contends the out-of-court identification should have been stricken under State v. Dessureault, 104 Ariz. 380, 453 P.2d 951 (1969), where the lineup was held unduly suggestive because the defendant was the only person who had a moustache and a beard. Here, however, there was no evidence that either of the victim's assailants had facial injuries at the time of the attack, whereas in Dessureault the person perpetrating the offense was described as having a moustache and a beard. The victim had looked at some 2,000 photographs between the date of the crimes and her identification of Bailes. Under the totality of the circumstances the identification was reliable. See State v. Ware, 113 Ariz. 340, 554 P.2d 1267 (1976). In any event, Bailes does not claim that the in-court identification was tainted by the previous identification, and there is ample evidence that the in-court identification was based on factors independent of the challenged procedure.
Finally, we reject Bailes's contention that there was insufficient evidence of force to support his conviction of robbery. The victim testified that Bailes kicked her while she was kneeling on the ground, pushed her face in the dirt, and removed her watch and ring. Bailes argues at most this constitutes grand theft from the victim's person. He does not explain how we are to disassociate the described force from the taking of the watch and ring, nor do we believe an explanation possible.
DARRYL SCOTT PHILLIPS
Phillips raises five issues on his appeal:
1. Adequacy of the jury instruction on aiding and abetting.
2. Sufficiency of the evidence to support his conviction of kidnapping for rape.
3. Sufficiency of the evidence to support his robbery conviction.
4. Denial of his motion to suppress identification.
5. Excessiveness of his sentences.
He argues that the court's instruction to the jury on aiding and abetting was reversibly defective in omitting the element of intent. The instructions as a whole, however, sufficiently informed the jury with respect to the various charges of the essential elements of both general and specific intent. Specifically, they were instructed:
"All persons concerned in the commission of a particular crime, whether they directly commit the act or aid and abet in its commission, are guilty of the crime as principals.
*588 "Aiding and abetting means simply to assist in the commission of an act either by active participation in it or in some manner advising or encouraging it. Aiding and abetting requires some positive act in aid of the commission of the offense and an active force, physical or moral, joined with that of the perpetrator in producing it. However, knowledge that a crime is being committed even when coupled with presence at the scene is not by itself enough to show that the person having such knowledge was part of the crime.
* * * * * *
"For most crimes such as rape and kidnapping this the State must prove that the defendant has done an act forbidden by law and that he intended to do it. It may be determined that the defendant intended to do the act if he did it voluntarily. The State does not have to prove that the defendant knew the act was forbidden by law.
"However, for certain crimes such as kidnapping for rape, theft of a motor vehicle, temporary theft of a motor vehicle, robbery and grand theft from the person, the State must prove that the defendant committed the act with a specific intent. Unless the State proves that the defendant acted with the specific intent required the crime has not been committed.
"Thus, in order to prove either the defendant [sic] guilty of the crime of kidnap for rape, the State must prove that the defendant specifically intended at the time of a kidnapping that the rape occur.
"For the crime of theft of a motor vehicle the State must prove that the defendant specifically intended that the owner be permanently deprived of his motor vehicle. For the crime of temporary theft of a motor vehicle the State must prove that the defendant specifically intended that the owner be temporarily deprived of his motor vehicle. For the crime of robbery the State must prove that the defendant specifically intended that there be a permanent taking of the victim's property. For the crime of grand theft from the person the State must prove that the defendant specifically intended that there be a permanent taking of the victim's property."
We find that the instructions given were comprehensive and fair to Phillips. See State v. Beard, 107 Ariz. 388, 489 P.2d 25 (1971).
The two questions on sufficiency of the evidence may be answered together. The manner in which Bailes and Phillips forcibly entered the victim's vehicle and the fact that she was then taken immediately to the isolated desert area where she was raped and robbed by Bailes are sufficient circumstantial evidence of Phillips's intent to support his convictions as an aider and abettor on the charges of kidnapping for rape and robbery.
The victim testified at the suppression hearing that she had tentatively identified Phillips from a group of 10 to 12 photographs but wanted to see him before making a positive identification. Ten days later she identified him positively from a lineup at the Pima County Sheriff's office. She had been able to see him clearly on the day of the crime as he entered her car and during the ride to the desert. Whether there has been an accurate in-court identification of the defendant, not tainted by prior identification procedures and whether such procedures are fair, are preliminary questions for the trial court, and its determination will not be overturned on appeal absent a clear and manifest error. State v. Lamb, 116 Ariz. 134, 568 P.2d 1032 (1977). The court's ruling was supported by the evidence, and we find no error.
Finally, Phillips attacks the length of his concurrent prison sentences of 20 to 50 years without possibility of parole for 20 years (kidnapping for rape) and 10 to 20 years (robbery). The extended record including the nature of his criminal acts and the pre-sentence report does not disclose a clear abuse of discretion. In the absence of such abuse, the sentences will not be altered on appeal. State v. O'Donnal, 110 Ariz. 552, 521 P.2d 984 (1974).
*589 The judgments and sentences are affirmed.
HOWARD and HATHAWAY, JJ., concur.
NOTES
[1] § 13-1802.
"A person shall not be examined as a witness in the following cases:
"1. A husband for or against his wife without her consent, nor a wife for or against her husband without his consent, ....
* * *"
|
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307 F.Supp.2d 474 (2004)
MAHL BROTHERS OIL CO., INC. Plaintiff,
v.
ST. PAUL FIRE & MARINE INS. CO., Defendant.
No. 02-CV-476-A.
United States District Court, W.D. New York.
February 19, 2004.
*475 *476 *477 Jaeckle, Fleischmann & Mugel (John T. Kolaga, of Counsel), Buffalo, NY, for Plaintiff.
Kenney, Kanaley, Shelton & Liptak, L.L.P. (Judith Treger Shelton, of Counsel), Buffalo, NY, Steptoe & Johnson LLP (John F. O'Connor and Virginia L. White-Mahffey, of Counsel), Washington, DC, for Defendant.
DECISION AND ORDER
ARCARA, District Judge.
On March 9, 1998, the State of New York Department of Environmental Conservation ("DEC") commenced a lawsuit in New York State Supreme Court against Mahl Brothers Oil Company ("Mahl Bros."), seeking reimbursement for costs the DEC incurred to clean up contamination on Mahl Bros.' property in Springville, New York. Since defendant St. Paul Fire & Marine Insurance Company ("St.Paul"), issued a general liability policy and an umbrella insurance policy covering the property from 1981 to 1983, Mahl. Bros. filed a third party complaint in the state court action naming St. Paul as a third party defendant and seeking defense and indemnification under the policies. Subsequently, St. Paul moved to sever the claims against it from the claims DEC asserts against Mahl Bros. After the motion to sever was granted in state court, St. Paul removed the action between it and Mahl Bros. to this Court pursuant to 28 U.S.C. § 1441.
On July 11, 2002, this matter was referred to the Honorable Leslie G. Foschio, United States Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1). On July 18, 2002, St. Paul filed a motion for summary judgment pursuant to Fed.R.Civ.P. 56. On August 2, 2002, Mahl Bros. filed a motion to remand this action to state court, and a motion pursuant to Fed.R.Civ.P. 56(f) seeking discovery necessary to defendant against St. Paul's summary judgment motion. On September 2, 2003, Magistrate Judge Foschio filed a joint Decision and Order and Report and Recommendation addressing all of the motions.
Magistrate Judge Foschio concluded that the motion to remand should be denied because this Court properly had subject matter jurisdiction over the matter. He next concluded that Mahl Bros.' Rule 56(f) motion for discovery should be denied because there was no indication that further discovery would lead to additional facts relevant to the defense of the motion. Finally, he concluded that St. Paul's motion for summary judgment should be granted because Mahl Bros. failed to timely notify St. Paul of the potential claim against the insurance policies.[1]
The parties filed objections to the Report and Recommendation on September 18, 2003. Mahl Bros. also objected to Magistrate Judge Foschio's Decision and Order with respect to the motion to remand. Responsive papers were filed by both parties on October 10, 2003. The Court heard oral argument on the objections on October 28, 2003.
For the reasons that follow, the Court adopts the primary conclusion in the Report and Recommendation, and grants St. Paul's motion for summary judgment.[2]*478 The Court also finds without merit Mahl Bros.' objection to Magistrate Judge Foschio's Decision and Order denying Mahl Bros.' motion to remand.
DISCUSSION
The Court reviews de novo portions of a Report and Recommendation to which objections have been filed. 28 U.S.C. § 636(b)(1)(B) and (C). When a Magistrate Judge issues a Decision and Order on a non-dispositive matter, a party may still object to the conclusions in the Decision and Order. However, the Magistrate Judge's Decision and Order will stand unless it is clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A).
Remand Motion
Magistrate Judge Foschio concluded in his Report and Recommendation that this action was properly removed by St. Paul and that the Court has diversity jurisdiction over the subject matter in this case. No party objects to that conclusion. Mahl Bros. argues, however, that judicial economy would best be served by remand of this action to state court.[3] Mahl Bros. states that if both cases are tried in state court, it will be spared duplicative discovery costs. Considering and rejecting this judicial economy argument in his Report and Recommendation, Magistrate Judge Foschio noted that the issues involved in Mahl Bros. action against St. Paul are completely different from the issues involved in the DEC litigation, and that Mahl Bros. will not necessarily incur duplicative discovery costs. In its objections to Magistrate Judge Foschio's Decision and Order, Mahl Bros. has provided no basis for this Court to conclude that Magistrate Judge Foschio's decision is clearly erroneous or contrary to law. Therefore, the objection is denied.
Summary Judgment Motion
Mahl Bros. objects to Magistrate Judge Foschio's conclusion that it failed to timely notify St. Paul of a potential claim against the insurance policies. Mahl Bros. argues that the issue of whether notice is timely is one for the trier of fact and that Mahl. Bros. has raised a genuine issue of material fact as to whether its proffered excuses for delaying notification to St. Paul are reasonable under all of the facts and circumstances of the case.
There are two insurance policies at issue in this case. The general liability policy required Mahl Bros. to notify St. Paul of an occurrence which may result in a claim against the policy "as soon as possible" after the occurrence of the event. The umbrella policy required Mahl Bros. to provide notice to St. Paul "as soon as practicable" after the occurrence. The issue on this motion is whether Mahl Bros. provided timely notice to St. Paul, and, if not, whether a genuine issue of material fact exists as to the merit of any proffered excuse.
Under New York law, an insured has a duty to notify its insurer "upon knowledge of facts sufficient to alert the insured to a reasonable possibility of the *479 existence of a potentially covered claim." TIG Insurance Co. v. Town of Cheektowaga, 142 F.Supp.2d 343, 368 (W.D.N.Y.2000). The insured's receipt of a potentially responsible party ("PRP") letter has been held to trigger the duty to notify the insurer. Id. When notice is delayed, the question of whether the delay is excusable is generally one of fact for the jury, unless no excuse for the delay is proffered or the excuse is meritless as a matter of law. Olin Corp. v. Insurance Co. of North America, 966 F.2d 718, 724 (2d Cir.1992).
It is undisputed that Mahl Bros. first received a PRP letter from the DEC on February 8, 1994. Therefore, Mahl Bros. duty to notify St. Paul was triggered on or about February 8, 1994. Although the matter is disputed, for purposes of this motion, the Court presumes that St. Paul received notice of the potential claim on June 3, 1996, the earliest date on which Mahl Bros. contends it provided notice.[4] As noted by Magistrate Judge Foschio, notice provided more than two years after receipt of the PRP letter is not timely, and Mahl Bros. has not provided any authority to the contrary. Therefore, the Court must consider whether there is a genuine issue of material fact regarding the merit of Mahl Bros.' proffered excuses for the delay.
Mahl Bros. contends that it reasonably believed that it was not liable for the cleanup costs because it was not a discharger as defined by New York Navigation Law and because the DEC allowed Mahl Bros. to negotiate with its tenant in order to effectuate a voluntary cleanup. Magistrate Judge Foschio concluded that the proffered excuse is meritless as a matter of law because New York Navigation Law imposes strict liability for cleanup costs on landowners. In support of that proposition, the Magistrate Judge cited the New York Court of Appeals case of State v. Green, 96 N.Y.2d 403, 729 N.Y.S.2d 420, 754 N.E.2d 179 (2001). Mahl Bros. now argues that Magistrate Judge Foschio's conclusion was erroneous, and its belief in nonliability was reasonable because landowners had not been held strictly liable when Mahl Bros. delayed notice to St. Paul.
Mahl Bros. is correct that the New York Court of Appeals had not definitively stated until 2001 in State v. Green, that landowners could be held strictly liable for contamination cleanup costs. However, as early as 1995, in White v. Long, 85 N.Y.2d 564, 626 N.Y.S.2d 989, 650 N.E.2d 836 (1995), the New York Court of Appeals acknowledged that strict liability for landowners was an undecided issue by that Court. The Court also recognized that lower New York courts had interpreted the Navigation Law to hold landowners liable for cleanup costs regardless of whether or not that owner caused or contributed to the discharge. Id. (citing Matter of White v. Regan, 171 A.D.2d 197, 575 N.Y.S.2d 375 (3d Dept. 1991)). Finally, in stating its holding that landowners could bring suit for indemnification from actual dischargers, the Court again acknowledged that landowners might be held liable under the Navigation Law. Id. ("A current owner may be liable for clean-up costs as against the Fund ... "). Therefore, at the time during which Mahl Bros. delayed providing notice to St. Paul, at best, there was a possibility that Mahl Bros. could be held liable for the cleanup costs incurred by the DEC, whether or not Mahl Bros. considered itself a discharger. Therefore, Mahl Bros. excuse for failure to notify St. Paul until June 1996, is meritless as a matter of law.
*480 Moreover, even if Mahl Bros. believed that, because it was negotiating a voluntary cleanup with its tenant, the DEC would not implement a cleanup or bring a claim for reimbursement of cleanup costs, the DEC's letter of December 26, 1995 provided a firm deadline of January 26, 1996 by which any agreement was to be made. Mahl Bros. knew that no agreement had been reached by January 26, thus, the likelihood of a claim against the policies was not only possible, but probable at that time. Any belief that the DEC would not seek reimbursement costs from Mahl Bros. was no longer reasonable after January 26, 1996. Therefore, Mahl Bros.' proffered excuse for its delay is unreasonable as a matter of law.
CONCLUSION
For the reasons stated above, Plaintiff's objections to Magistrate Judge Foschio's Decision and Order and Report and Recommendation are denied, and Mahl Bros. claims are dismissed. The Clerk of the Court should take all steps necessary to close the case.
IT IS SO ORDERED.
REPORT and RECOMMENDATION
FOSCHIO, United States Magistrate Judge.
JURISDICTION
This case was referred to the undersigned by Honorable Richard J. Arcara on July 11, 2002 for all pretrial matters. The matter is presently before the court on a motion filed by Defendant on July 18, 2002 for summary judgment (Doc. No. 6) and on motions filed by Plaintiff on August 2, 2002 to remand the action to New York Supreme Court (Doc. No. 16), and on August 26, 2002 for discovery pursuant to Federal Rule of Civil Procedure 56(f) (Doc. No. 18).[1]
BACKGROUND
Plaintiff Mahl Bros. Oil Co., Inc. ("Plaintiff" or "Mahl Bros.") commenced this insurance indemnification and defense action against Defendant St. Paul Fire and Marine Insurance Company ("Defendant" or "St. Paul") as a third-party action in New York Supreme Court, Erie County, on November 16, 2001. Mahl Bros. is a New York corporation and St. Paul is a Minnesota company. Plaintiff essentially seeks a court order directing Defendant to defend and indemnify Plaintiff with regard to an environmental action commenced by the State of New York ("the State") against Griffith Oil Co., Inc. ("Griffith Oil"), Sugar Creek Stores, Inc. ("Sugar Creek") and Mahl Bros., on March 9, 1998 in New York Supreme Court, Albany County, pursuant to New York Navigation Law ("N.Y.Navig.Law") Art. 12, § 192 (McKinney 1989)[2] in which the State seeks reimbursement of $ 180,962.43 expended for the removal, mitigation and future containment of petroleum *481 products discharged onto property owned by Plaintiff ("the underlying action"). A motion to change venue to Erie County, filed by Plaintiff on May 8, 1998, was granted on June 10, 1998 by New York Supreme Court Justice Bernard J. Malone. Defendant moved to sever the third-party coverage action from the underlying action and New York Supreme Court Justice Donna M. Siwek, by Order dated June 6, 2002 ("Justice Siwek June 6, 2002 Order"),[3] severed Plaintiff's cross claims against Defendant. Following the severance, Defendant, on July 3, 2002, removed the matter to this court on the basis of diversity jurisdiction.[4] Defendant's answer to the Complaint was filed in this court on July 18, 2002.
On July 18, 2002, Defendant filed a motion for summary judgment, accompanied by a Memorandum of Law (Doc. No. 7) ("Defendant's Memorandum"), the Affidavit of Denise L. Kleppinger (Doc. No. 8) ("Kleppinger Affidavit") with attached exhibits, and a Statement of Undisputed Material Facts (Doc. No. 9). On August 2, 2002, Plaintiff filed a motion to remand the action to New York Supreme Court, Erie County. Attached to the motion is the Affidavit of John T. Kolaga, Esq., in Support of Motion to Remand Action to New York State Supreme Court ("Kolaga Affidavit"), and exhibits. On August 26, 2002, Plaintiff filed a motion pursuant to Federal Rule of Civil Procedure 56(f) seeking discovery necessary to prepare its response to Defendant's pending summary judgment motion. Attached to the motion are the Affidavits of Matthew J. Mahl ("Mahl Affiavit") and John T. Kolaga, Esq. ("Kolaga Rule 56(f) Affidavit"), along with Exhibits A through F. Plaintiff also filed on August 26, 2002, a Response to Defendant's Statement Pursuant to Local Rule 56 (Doc. 19). On August 29, 2002, Plaintiff filed a Memorandum of Law in Opposition to Defendant's Motion for Summary Judgment and in Support of Cross-Motion for Rule 56(f) Relief (Doc. No. 22) ("Plaintiff's Memorandum"). Defendant, on September 5, 2002, filed a Memorandum of Law in Opposition to Plaintiff's Motion to Remand (Doc. No. 23) ("Defendant's Response Memorandum"). On September 23, 2002, Defendant filed a Reply Memorandum in Support of Summary Judgment (Doc. No. 24) ("Defendant's Reply Memorandum"). On September 16, 2002, Plaintiff filed a Reply Memorandum of Law in Further Support of Motion to Remand (Doc. No. 26) ("Plaintiff's Reply Memorandum").
Based on the following, Defendant's motion for summary judgment (Doc. No. 6) should be GRANTED; Plaintiff's motion to remand the matter to New York Supreme Court (Doc. No. 16) is DENIED and Plaintiff's cross motion for discovery pursuant to Rule 56(F) (Doc. No. 18) is DENIED.
FACTS[5]
This insurance indemnification and defense action concerns premises owned by Plaintiff Mahl Bros. Oil Co., Inc., located at the northeast corner of the intersection of Route 219 and Waverly Street in Springville, New York ("the Site"). Between 1879 and 1974, crude oil and refined petroleum products were transported from the Ashland Oil Company refinery in Tonawanda, New York through petroleum *482 product pipelines previously located beneath the Site. The underground pipelines' poor condition caused them to be abandoned in 1974. Surface commercialization of the Site commenced in 1972 when Plaintiff constructed facilities for wholesale storage and retail sale of petroleum fuel.
Defendant issued two insurance policies to Plaintiff. The first policy was primary policy 631NA5508 ("the primary policy") covering the period December 31, 1980 to December 31, 1983.[6] The second policy was an umbrella excess policy 531XA9489 ("the umbrella excess policy") covering the period December 31, 1981 to December 31, 1982.[7] Plaintiff is obligated under both the primary policy and the umbrella excess policy (collectively, "the insurance policies") to notify Defendant of any occurrence for which Plaintiff may seek coverage under the insurance policies. In particular, and as relevant to the instant action, the primary policy provides:
If there's an accident or incident covered under this policy, you [Plaintiff] must: 1. Tell us [Defendant] or our agent what happened as soon as possible. Include the time and place of the event and the names and addresses of any witnesses and injured people....
Primary Policy, Insuring Agreement at 1.
The umbrella excess policy provides:
(1) In the event of an occurrence, which appears likely to involve this Policy, written notice containing particulars sufficient to identify the Insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the Insured [Plaintiff] to the Company [Defendant] or any of its authorized agents as soon as practicable.
Umbrella Excess Policy at 9.
Both of the insurance policies also contain pollution exclusions barring coverage for liability attributable to the discharge of contaminants unless such discharge is both sudden and accidental. Specifically, the primary policy provides:
Pollution: We [Defendant] won't cover liability claims for injury or damage caused by the continuous or intentional discharge or release of pollutants such as: Smoke. Vapors. Soot. Fumes. Acids. Alkalis. Toxic chemicals, liquids or gases. Or waste materials. But we [Defendant] will cover sudden accidents involving these pollutants.
Primary Policy, Insuring Agreement at 3.
The umbrella excess policy provides:
[t]his policy shall not apply:
* * * * * *
(j) to personal injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acid, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental.
Umbrella Excess Policy at 6-7.
Beginning on January 1, 1986, Griffith Oil leased the wholesale fuel storage operation from Mahl Bros. Mahl Bros. continued to run the resale gasoline operation, purchasing its gasoline fuel from Griffith Oil, until 1992 when Griffith Oil began leasing the resale gasoline operation.
In January 1994, the New York State Department of Environmental Conservation *483 ("DEC") detected petroleum contamination at the Site while performing environmental testing in connection with a construction project on nearby property. By letter dated February 8, 1994 ("February 8, 1994 Letter"),[8] the DEC advised that Plaintiff, as the owner of the underground petroleum storage tanks at the Site, had been "identified as a potentially responsible party" and if Plaintiff were ultimately determined to be responsible for the contamination, Plaintiff would be liable for all costs incurred by the DEC in connection with the investigation and remediation of the Site.
In May 1994, the DEC authorized and funded a soil and groundwater investigation performed by Huntington/Empire Soil Investigations, Inc. ("Empire"), an environmental consulting firm retained by the DEC. Based on the results of Empire's investigation, the DEC, by letter dated July 12, 1994 ("July 12, 1994 Letter"),[9] advised Plaintiff with regard to the contamination at the Site that the DEC "consider both Mahl Bros. Inc. and Griffith Oil Company as potentially responsible parties for the contamination." Plaintiff suggested, and the DEC agreed, that additional data identifying more precisely the source of the contamination and the remediation area was needed.
An April 11, 1995 meeting between Mahl Bros. Vice President Matthew Mahl and DEC Assistant Engineering Geologist Timothy E. Dieffenbach ("Dieffenbach") at which responsibility for the contamination at the Site was discussed was memorialized in a letter dated April 17, 1995, from Mahl Bros. to the DEC ("April 17, 1995 Letter").[10] Although Matthew Mahl admitted that the DEC had requested Mahl Bros. "to accept responsibility for remediating the petroleum-hydrocarbons under a Stipulation Agreement," he also questioned whether Mahl Bros. was the source of such contamination, stating he would not sign any stipulation agreement without more information as to the contamination source. April 17, 1995 Letter at 1-2.
Mahl Bros. submitted a Site Investigation Work Plan dated May 26, 1995 ("the Work Plan") to the DEC. The DEC approved the Work Plan on May 30, 1995. On June 9, 1995, Conestoga-Rovers & Associates ("Conestoga-Rovers"), an environmental consulting firm retained by Mahl Bros. in connection with the Site contamination investigation, implemented the field activities specified in the Work Plan, completing the investigation on June 21, 1995. In its Site Investigation Report, dated August 1985 ("Site Investigation Report"),[11] Conestoga-Rovers concluded that the contamination at the Site resulted from a petroleum spill occurring at the Site after 1985. Site Investigation Report, ¶ 7.3.
Plaintiff cooperated with the DEC's investigation regarding the source of the Site's contamination. The DEC concluded that "off-site contamination originated within the site property boundaries and that contaminant source removal would allow for natural attenuation of off-site contaminants." Dieffenbach Letter Dated October 24, 1995.[12] Plaintiff concurred in the DEC's conclusion, but advised Dieffenbach that Plaintiff was financially unable to perform Site remediation activities as approved by the DEC without financial assistance from Griffith Oil, with whom Plaintiff was attempting to negotiate a financial agreement. Matthew Mahl Letter *484 Dated November 3, 1995.[13] By letter dated December 26, 1995, DEC Environmental Engineer Robert N. Leary ("Leary") recognized Plaintiff's participation in the investigation and design of a remedial system to address the contamination at the Site, and that Plaintiff was attempting to reach an agreement with Griffith Oil for financial assistance with the remediation. Leary nevertheless advised that if no such agreement was reached with Griffith Oil by January 26, 1996 with remediation by Spring 1996, the DEC would implement remediation and hold both Plaintiff and Griffith Oil responsible for all remediation costs incurred by the State. Id. When Plaintiff and Griffith Oil failed to reach any agreement, the State commenced remediation of the Site.
On March 9, 1998, the State filed the underlying action in New York Supreme Court, seeking reimbursement of $ 180,962.43 spent in remediating the Site, as well as future containment costs. By letter dated March 24, 1998 ("March 24, 1998 Letter"),[14] Plaintiff's attorney, Terry C. Burton, Esq. advised Defendant of the lawsuit. In the March 24, 1998 Letter, Plaintiff refers to a letter dated June 3, 1996 by Plaintiff's former attorney, Rick W. Kennedy, Esq., advising Defendant of the DEC's investigation into a petroleum product spill at the Site ("June 3, 1996 Letter"). Plaintiff also states
[y]ou were notified of this investigation in light of the fact that St. Paul Fire and Marine Insurance Co. provided comprehensive general liability and umbrella excess liability coverage with respect to this property under policy nos. 631NA5508 and 531XA9489.
March 24, 1998 Letter at 1.
Defendant denies ever having received the June 3, 1996 Letter. Kleppinger Affidavit, ¶ 3. In a letter dated April 7, 1998, Plaintiff provided Defendant with a copy of the June 3, 1996 Letter.[15]
Plaintiff's third-party insurance coverage action against Defendant was commenced on November 16, 2001. After Justice Siwek severed Plaintiff's claims against Defendant from the underlying action on June 6, 2002, Defendant, on July 3, 2002, removed the matter to this court on the basis of diversity jurisdiction.
DISCUSSION
1. Motion to Remand
Plaintiff urges the court to remand this case to New York Supreme Court, Erie County, arguing that removal was improper because removal is unduly prejudicial to Plaintiff, diversity of citizenship did not exist when the action was originally filed in state court as a third-party claim to the underlying action, and a remand to state court will promote judicial economy. Kolaga Affidavit ¶¶ 8-9; Plaintiff's Reply Memorandum at 2-3. Defendant argues in opposition to remand that diversity jurisdiction existed upon Justice Siwek's June 6, 2002, severing the third-party insurance coverage action from the underlying action, thereby enabling removal, and that removal is not prejudicial to Plaintiff. Defendant's Response Memorandum at 1-2.
Removal of a state court proceeding to federal court is provided for under 28 U.S.C. § 1441(a) which states in pertinent part:
any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United *485 States for the district and division embracing the place where such action is pending.
Further, whether an action is removable based on diversity jurisdiction is determined based on the pleadings as originally filed. Crucible Materials Corporation v. Coltec Industries, Inc., 986 F.Supp. 130 131-32 (N.D.N.Y.1997). Accordingly, 28 U.S.C. § 1441(a) permits removal of only those actions which originally could have been filed in federal district court.
The parties do not dispute that a lack of diversity rendered this court without original jurisdiction in this court over the instant insurance coverage action when it was initially filed as a third-party action to the underlying environmental action in New York Supreme Court. Complete diversity among the parties existed, however, upon Justice Siwek's June 6, 2002 Order severing the third-party insurance coverage action from the underlying action. Accordingly, Defendant removed the matter to this court, pursuant to 28 U.S.C. § 1446(b) which provides in relevant part
[i]f the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.
28 U.S.C. § 1446(b).
In particular, Defendant removed the instant action on July 3, 2002, within 30 days of Justice Siwek's June 6, 2002 Order severing the instant action from the underlying action. Plaintiff does not contend that such removal was untimely.
Because federal courts are courts of limited jurisdiction, and as removal of a case raises issues of federalism, removal statutes are narrowly construed and doubts are resolved against removal. Somlyo v. J. Lu-Rob Enterprises, Inc., 932 F.2d 1043, 1045-46 (2d Cir.1991). The removal statute is construed according to federal law. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Somlyo, supra, at 1047. Further, it is the removing party's burden to demonstrate the existence of federal jurisdiction. United Food & Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir.1994)("Where, as here, jurisdiction is asserted by a defendant in a removal petition, it follows that the defendant has the burden of establishing that removal is proper ....").
As stated, when Plaintiff initially filed its third-party insurance coverage action against Defendant, there was an absence of complete diversity of citizenship among the parties. However, with the third-party action severed from the underlying action, and given that Plaintiff is a New York corporation and Defendant is a Minnesota company, this court has jurisdiction over the action based on diversity of citizenship. Defendant maintains that the severance of the instant action from the underlying action created a new action that was properly subject to removal on the basis of diversity jurisdiction. Plaintiff nevertheless maintains that as severance of the instant action from the underlying action was precipitated by Defendant's motion, such severance was an involuntary change which, under the "voluntary-involuntary rule," does not create removability. Kolaga Affidavit ¶¶ 10-22; Plaintiff's Reply Memorandum at 1-3. Defendant asserts to the contrary that the "voluntary-involuntary *486 rule" has not been recognized by the Second Circuit and, moreover, draws an analogy between Plaintiff's commencement of the instant action as a third-party action in violation of prevailing New York law prohibiting litigation of an insurance coverage issue in the same action for which the insurance coverage is sought, and the improper joinder of a party to defeat diversity jurisdiction and avoid removal. Defendant's Response Memorandum at 6-12.
The so-called "voluntary-involuntary rule" refers to the principle accepted by some courts that the involuntary dismissal in state court of non-diverse parties does not render an action removable. See Quinn v. Aetna Life & Casualty Co., 616 F.2d 38, 40 n. 2 (2d Cir.1980) (citing cases and 14 Wright, Miller & Cooper, § 3723). "The purpose of this distinction is to protect against the possibility that a party might secure a reversal on appeal in state court of the non-diverse party's dismissal, producing renewed lack of complete diversity in the state court action, a result repugnant to the requirement in 28 U.S.C. § 1441 that an action, in order to be removable, be one which could have been brought in federal court in the first instance." Quinn, supra (internal citations omitted). In Quinn, however, the Second Circuit did not have the opportunity to discuss the applicability of the "voluntary-involuntary rule" as the plaintiff's time to appeal the involuntary dismissal of the non-diverse defendants had elapsed, negating the possibility of the inconsistencies the rule is designed to avoid. Id. Moreover, the Second Circuit stated that the "plaintiff's failure to take an appeal constituted the functional equivalent of a `voluntary dismissal.'" Id. The court's research reveals no other case in which the Second Circuit has considered the "voluntary-involuntary rule."
Similarly to Quinn, in the instant case, Plaintiff did not appeal Justice Siwek's June 6, 2002 Order severing the instant action from the underlying action. As such, the circumstances under which the case became removable on the basis of diversity jurisdiction constitute the functional equivalent of a voluntary act. Accordingly, Defendant's removal of the instant action to this court is not barred by the "voluntary-involuntary rule."
Plaintiff also asserts that Defendant's removal of the newly severed action on July 3, 2002 to this court was untimely as, although the case was removed within 30 days of Justice Siwek's June 6, 2002 Order, such removal did not occur within one year of the date the underlying action was filed as 28 U.S.C. s 1446(b)'s language that "a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action" requires. Plaintiff's Reply Memorandum at 4. In other words, Plaintiff measures the one year outer limit imposed by 28 U.S.C. § 1446(b) on the removal of a case that has become removable only because of a court order from the date the underlying action was filed, i.e., March 9, 1998, rather than the date Plaintiff's crossclaim was filed, i.e., November 16, 2001. Plaintiff, however, erroneously relies on Green Point Savings Bank v. Hidalgo, 910 F.Supp. 89 (E.D.N.Y.1995) and Bertrand v. Vingan, 899 F.Supp. 1198 (S.D.N.Y.1995) in support of this argument.
Specifically, Hidalgo, supra, did not involve a third-party action that became removable only after having been severed from the underlying action in state court. Rather, the defendant in Hidalgo filed a notice of removal more than 30 days after the date the relevant action was filed in state court. Hidalgo, supra, at 91. The court, in remanding the matter to state *487 court based on untimely removal, commented that insofar as the action, as originally filed in state court, was not removable, but later became so based on some unspecified event occurring afterward, the removal was still untimely under 28 U.S.C. § 1446(b) because more than one year had elapsed since the action was originally filed. Id. at 91 n. 2. Similarly, in Bertrand, supra, the court remanded an action to state court based on untimely removal because "no jurisdiction altering events occurred after the complaint was served," such that 28 U.S.C. § 1446(b)'s language imposing the one year outer limit was irrelevant to the timeliness of the removal. Here, the instant action was removed both within 30 days of the order severing the third-party action from the underlying action, and within one year of the date the third-party complaint was filed in state court, in accordance with 28 U.S.C. § 1446(b).
Nor is there any basis for Plaintiff's assertion that removal of this case is both prejudicial to Plaintiff and does not promote judicial economy given that the same unresolved facts are at issue in both the instant action and the underlying action. See Kolaga Affidavit ¶¶ 4-5, 8; Plaintiff's Reply Memorandum at 5-6. Rather, at issue in the underlying action in which the State seeks to recover from Plaintiff the cost of the remediation of the Site is whether the discharge that resulted in the contamination of the Site can be attributed to Plaintiff. However, the issues present in the instant action seeking a court order directing Defendant to provide a defense to the underlying action and indemnify Plaintiff should Plaintiff ultimately be found liable for the contamination at the Site, concern when Plaintiff was required to notify Defendant of the potential claim against Plaintiff, how such contamination occurred, and whether the contamination occurred during the period for which Plaintiff had insurance coverage through Defendant. Insofar as the same evidence may be necessary to litigate both actions, Plaintiff does not explain why the same evidence obtained through discovery in connection with one action cannot be used in connection with the other action, or why discovery in both actions cannot be conducted at the same time, thus avoiding duplicating discovery efforts. Significantly, even if the court were to remand the instant action to state court, Plaintiff's discovery in the instant action would necessarily be separate from its discovery in the underlying action as Defendant St. Paul is not a party to the underlying action.
Accordingly, Plaintiff's motion to remand the case to New York Supreme Court, Erie County, is DENIED.
2. Summary Judgment
Defendant seeks summary judgment dismissing the action in its entirety. Defendant argues in support of summary judgment that Defendant is not required to either indemnify or defend Plaintiff in connection with the underlying action as Plaintiff failed to notify Defendant in a timely manner of the occurrence of a covered event, the contamination at the Site qualifies as pollution for which coverage is expressly excluded under the insurance policies, and the Conestoga-Rovers Site Investigation Report concluded that the contamination at the Site resulted from a petroleum spill occurring after 1985, well after the period for which the insurance policies provided coverage.[16] In opposition to summary judgment Plaintiff essentially argues that its June 3, 1996 Letter to *488 Defendant provided timely notification of the State's potential environmental claim regarding the Site's contamination as Plaintiff had doubts as to the actual cause of such contamination. Plaintiff further maintains that summary judgment is precluded by unresolved issues of fact as to when discharge which caused the Site to become contaminated occurred and whether such discharge qualifies for the "sudden and accidental" exception to the insurance policies' pollution exclusion.
Summary judgment of a claim or defense will be granted when the moving party demonstrates that there are no genuine issues as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a) and (b); Celotex Corp. v. Catrett, 477 U.S. 317, 331, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Rattner v. Netburn, 930 F.2d 204, 209 (2d Cir.1991). The moving party for summary judgment bears the burden of establishing the nonexistence of any genuine issue of material fact. If there is any evidence in the record based upon any source from which a reasonable inference in the nonmoving party's favor may be drawn, the moving party cannot obtain a summary judgment. Catrett, supra, at 331, 106 S.Ct. 2548. The court is required to construe the evidence in the light most favorable to the non-moving party. Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir.1999) (citing Anderson, supra, at 255, 106 S.Ct. 2505).
Summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... show that there is no issue as to any material fact, and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson, supra, at 247-48, 106 S.Ct. 2505. Whether a fact is material depends on the substantive law of the claim and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. 2505.
[W]here the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the `pleadings, depositions, answers to interrogatories, and admissions on file.' Such a motion, whether or not accompanied by affidavits, will be `made and supported as provided in this rule [Fed.R.Civ.P. 56],' and Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'
Catrett, supra, at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56).
Thus, "as to issues on which the non-moving party bears the burden of proof, the moving party may simply point out the absence of evidence to support the non-moving party's case." Nora Beverages, Inc. v. Perrier Group of America, Inc., 164 F.3d 736, 742 (2d Cir.1998).
Once a party moving for summary judgment has made a properly supported showing as to the absence of any genuine issue as to all material facts, the nonmoving party must, to defeat summary judgment, come forward with evidence that would be sufficient to support a jury verdict in its favor. Goenaga v. March of Dimes Birth Defects Foundation, 51 F.3d 14, 18 (2d Cir.1995). In opposing a motion *489 for summary judgment a party "may not simply rely on conclusory statements or on contentions that the affidavits supporting the motion are not credible." Goenaga, supra, at 18 (citing cases).
As stated, this case is before the court pursuant to diversity jurisdiction. A district court sitting in diversity applied the substantive law of the forum state. Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Thrift Drug, Inc. v. Universal Prescription Administrators, 131 F.3d 95, 97 (2d Cir.1997). Here, the parties do not dispute that the substantive law of New York, the forum state, applies.
A. Rule 56(F) Discovery
Preliminarily, Plaintiff moves for discovery under Federal Rule of Civil Procedure 56(f) which provides:
[s]hould it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.
Fed.R.Civ.P. 56(f).
According to Plaintiff, the motion for summary judgment should be stayed as Plaintiff has not yet had "a full and fair opportunity to conduct discovery on the merits of the action" and its legal theories may change as the record is developed. Plaintiff's Response Memorandum at 22-23. Plaintiff specifically seeks to depose Defendant and to subpoena non-party witnesses to obtain evidence necessary to establish, "at the very least," questions of fact as to whether Plaintiff provided Defendant with timely notice under the insurance policies and whether the release of contaminants at the Site falls within the insurance policies' pollution exclusions. Id. at 24. Defendant urges the court to reject Plaintiff's request for Rule 56(f) discovery as a "stalling tactic" as the requested discovery is unnecessary. Defendant's Reply Memorandum at 8-9.
"Federal Rule of Civil Procedure 56(f) provides an opportunity to postpone consideration of a motion for summary judgment and to obtain additional discovery by describing: (i) the information sought and how it will be obtained; (ii) how it is reasonably expected to raise a genuine issue of material fact; (iii) prior efforts to obtain the information; and (iv) why those efforts were unsuccessful." Oneida Indian Nation of New York v. City of Sherrill, New York, 337 F.3d 139, 167 (2d Cir.2003) (citing Sage Realty Corp. v. Ins. Co. of N. Am., 34 F.3d 124, 128 (2d Cir.1994)). "Additionally, the discovery sought must be material to the opposition of the summary judgment motion." Sage Realty Corp., supra, at 128 (citing Hudson River Sloop Clearwater, Inc. v. Department of the Navy, 891 F.2d 414, 422 (2d Cir.1989)) ("even if plaintiffs had obtained what they stated would be uncovered [through Rule 56(f) discovery], the information would have been insufficient to defeat summary judgment."). Put another way, a litigant seeking Rule 56(f) relief "must show that the material sought is germane to the defense and that is it neither cumulative or speculative, and a bare assertion that the evidence supporting the plaintiff's allegation is in the hands of the defendant is insufficient to justify a denial of a motion for summary judgment under Rule 56(f)." Paddington Partners v. Bouchard, 34 F.3d 1132, 1138 (2d Cir.1994). See also Gray v. Town of Darien, 927 F.2d 69, 74 (2d Cir.) ("In a summary judgment context, an opposing party's mere hope that further evidence may develop prior to trial is an insufficient basis *490 upon which to justify the denial of a summary judgment motion.") (internal quotation and brackets omitted), cert. denied, 502 U.S. 856, 112 S.Ct. 170, 116 L.Ed.2d 133 (1991). Indeed, "[a] court can reject a request for discovery, even if properly and timely made through a Rule 56(f) affidavit, if it deems the request to be based on speculation as to what potentially could be discovered." Paddington Partners, supra, at 1138.
In the instant case, Plaintiff maintains it seeks discovery as to whether Defendant received Plaintiff's former attorney's letter of June 3, 1996, advising of the DEC's discovery of contamination at the Site approximately 21 months before the State filed the underlying suit against Plaintiff. Plaintiff's Response Memorandum at 24-25. Plaintiff also seeks discovery as to when the contamination at the Site occurred arguing that the Conestoga-Rovers Site Investigation Report indicates that the petroleum contamination at the Site includes pre-1985 gasolines and, as such, a question of fact exists as to whether any contamination occurred during the period for which the insurance policies provided coverage. Id. at 25.
As discussed more fully below, Discussion, infra, at 22-28, the discovery Plaintiff's seeks through its Rule 56(f) motion will not assist Plaintiff in defeating summary judgment as Plaintiff failed to provide Defendant with timely notice of the occurrence for which it now seeks indemnification and defense pursuant to the insurance policies. Even assuming, arguendo, that Defendant did in fact receive the June 3, 1996 Letter, such letter was sent almost 28 months after the DEC advised Plaintiff in the DEC's February 8, 1994 Letter that Plaintiff was considered a potentially responsible party with regard to the contamination at the site. Delays of this length have been held to constitute a failure to provide an insurer with timely notice of the occurrence on which the suit is based and that Plaintiff's subsequent provision of notice of the underlying action within two months of the date the underlying action was filed may be timely does not excuse Plaintiff's untimely notice as to the occurrence on which the underlying action is based. TIG Ins. Co. v. Town of Cheektowaga, 142 F.Supp.2d 343, 356 (W.D.N.Y.2000). Plaintiff's untimely notice of an occurrence also renders irrelevant whether a release of a contaminant at the Site is within the "sudden and accidental" exception to the insurance policies' pollution exclusion, the alternative basis on which Defendant has disclaimed coverage.
The evidence Plaintiff seeks through its Rule 56(f) discovery motion will not help Plaintiff to avoid dismissal of the instant action on the basis of Plaintiff's late notice to Defendant under the insurance policies. Accordingly, Plaintiff's motion for discovery pursuant to Rule 56(f) is DENIED.
B. Notification
As stated, the parties dispute whether Plaintiff provide Defendant with timely notice of the occurrence for which Plaintiff seeks coverage under the policies. Plaintiff maintains that it first notified Defendant of the occurrence in a letter dated June 3, 1996, written by Plaintiff's former attorney. Plaintiff maintains that such notice was timely as Plaintiff's doubts as to the cause of the Site contamination is a credible basis supporting Plaintiff's delay in notifying Defendant of the occurrence. Plaintiff's Response Memorandum at 10-12. Plaintiff further asserts that its belief that it would be able to reach an agreement with Griffith Oil regarding the cleanup of the Site which would shield Plaintiff from liability for the contamination justified Plaintiff's delay in notifying Defendant. Id. at 13-17.
*491 As stated, Plaintiff's notification to Defendant of an occurrence was required under the primary policy "as soon as possible" and under the umbrella excess policy "as soon as practicable." Defendant maintains that Plaintiff knew of the State's potential claims against it concerning the Site by February 8, 1994, when the DEC notified Plaintiff that as the owner of the underground petroleum storage tanks at the Site, Plaintiff had been "identified as a potentially responsible party" and if Plaintiff were ultimately determined to be responsible for the contamination, Plaintiff would be liable for all costs incurred by the DEC in connection with the investigation and remediation of the Site. February 8, 1994 Letter. Plaintiff, however, maintains that although it did not notify Defendant of the occurrence until June 3, 1996, such delay does not render the notice untimely given Plaintiff's good faith belief that Plaintiff was not responsible for the contamination at the Site.
In New York, "an insured's duty to notify an insurer of an occurrence is not solely triggered upon receipt of a formal PRP [potentially responsible party], or a summons and complaint, but accrues upon knowledge of facts sufficient to alert the insured to a reasonable possibility of the existence of a potentially covered claim." TIG Insurance Company v. Town of Cheektowaga, 142 F.Supp.2d 343, 368 (W.D.N.Y.2000). See also Ogden Corporation v. Travelers Indemnity Company, 924 F.2d 39, 43 (2d Cir.1991) (the insured's duty to notify does not accrue only upon receipt of a formal letter advising that the insured is a potentially responsible party ("a PRP letter") or a summons and complaint). See also F.N. Burt Co. v. Aetna Casualty & Surety Co., 91-CV-30A(F), slip op. at 20-22 (W.D.N.Y. March 14, 1995). Instead, the obligation to provide notice of an occurrence accrues when the facts known to the insured would have suggested to a reasonable person the possibility of a potentially covered claim. Commercial Union Insurance Company v. International Flavors & Fragrances, Inc., 822 F.2d 267, 272 (2d Cir.1987); Utica Mutual Insurance Company v. Fireman's Fund Insurance Companies, 748 F.2d 118, 122 (2d Cir.1984). Nevertheless, compliance with notice requirements is a condition precedent to an insurer's liability under the policy, International Flavors, supra, at 271, and failure to comply with the notice requirement relieves an insurer of its duty to defend and indemnify, even where there has been no showing by the insurer of prejudice to itself. Unigard Security Insurance Company, Inc. v. North River Insurance Company, 79 N.Y.2d 576, 584 N.Y.S.2d 290, 594 N.E.2d 571, 573 (1992); Security Mutual Ins. Co. v. Acker-Fitzsimons Corp., 31 N.Y.2d 436, 340 N.Y.S.2d 902, 293 N.E.2d 76, 78 (1972).
With respect to environmental contamination claims, an insured's receipt from the DEC of a PRP letter has consistently been held to trigger an insured's obligation to notify the insurer of the possibility of a potentially covered claim. See, e.g., TIG Insurance Company, supra, at 368 (receipt of DEC letter advising of insured's status as PRP triggered insured's duty to notify insurer of possibility of potentially covered claim) F.N. Burt Co. v. Aetna Casualty & Surety Co., 91-CV-30A(F), slip op. at 20-22 (W.D.N.Y. March 14, 1995) (same).[17]See also Ogden Corp., *492 supra, at 43 (letter from landowner to lessee seeking reimbursement for environmental cleanup of property and advising lessee contamination that "appeared" to have resulted from lessee's scrap yard operations held sufficient to trigger lessee's duty to notify lessee's insurer of the possibility of a claim); Burt Rigid Box, Inc. v. Travelers Property Casualty Corp., 126 F.Supp.2d 596, 628-30 (W.D.N.Y.2001) (insured's receipt of DEC letter advising insured had been identified as generator of wastes disposed of at landfill triggered insured's duty to notify its insurers of occurrence regarding landfill), aff'd in part, rev'd in part, 302 F.3d 83 (2d Cir.2002).
Accordingly, in the instant case; Plaintiff's receipt of the DEC's February 8, 1994 Letter advising Plaintiff of its PRP status with regard to the Site triggered Plaintiff's obligation to notify Defendant of Plaintiff's potential liability for the investigation and remediation of the contaminated Site. Plaintiff failed, however, to so notify Defendant of the occurrence until, at the earliest, June 3, 1996, the date of the letter which Plaintiff allegedly initially sent Defendant advising of the investigation at the Site and which Defendant denies ever receiving. Assuming, arguendo, that Plaintiff did indeed mail and Defendant did receive the June 3, 1996 Letter, such notice, provided almost 28 months after Plaintiff first learned of its PRP status with respect to the Site, was untimely. Indeed, shorter delays in notifying an insurer of an occurrence have been held unreasonable under New York law. See New York v. Blank, 27 F.3d 783, 795-96 (2d Cir.1994) (ten month delay unreasonable under New York law); City of Utica v. Genesee Management, Inc., 934 F.Supp. 510, 520-21 (N.D.N.Y.1996) (six months delay unreasonable); Goodwin Bowler Associates, Ltd. v. Eastern Mutual Insurance Company, 259 A.D.2d 381, 687 N.Y.S.2d 126, 126 (1st Dep't 1999) (two months delay unreasonable).
As stated, however, Plaintiff offers as excuses for its late notification to Defendant of an occurrence at the Site that it had a reasonable good faith belief that it was not liable for the Site's contamination but, rather, that the contamination occurred while Griffith Oil was in possession of the Site pursuant to a lease with Plaintiff and, as such, Griffith Oil was responsible for any contamination at the Site. The question of whether delayed notification of an occurrence to an insurer generally is excusable is a matter of fact for the jury unless no excuse for the delay is proffered or the excuse is meritless as a matter of law. Olin Corporation v. Insurance Company of North America, 966 F.2d 718, 724 (2d Cir.1992) (citing Public Service Mutual Insurance Company v. Levy, 87 Misc.2d 924, 387 N.Y.S.2d 962, 965 (1976), aff'd, 57 A.D.2d 794, 395 N.Y.S.2d 1 (1st Dep't 1977)). While a late notice of an occurrence may be excused based on a good faith belief of non-liability, Blank, supra, no such belief excuses late notice in the instant case as Plaintiff faces strict liability under New York's Oil Spill Act, N.Y. Navig. Law § 171 et seq. (McKinney 1993). As such, Plaintiff's belief that Griffith Oil, rather than Plaintiff, caused the Site's contamination is irrelevant to Plaintiff's potential for liability.
Specifically, Article 12 of New York Navigation Law, commonly referred to as the "Oil Spill Act", was enacted to provide for "swift, effective cleanup of petroleum spills that threaten the environment." State v. Green, 96 N.Y.2d 403, 729 N.Y.S.2d 420, 754 N.E.2d 179, 182 (2001) (citing N.Y. Navig. Law §§ 170, 171). In furtherance of this goal, New York has "established the `Environmental Protection and Spill Compensation Fund' ["the Fund"] which finances State cleanup efforts when the discharger is unknown, unwilling or unable to pay these costs." Green, supra, at 182 (citing N.Y. Navig. *493 Law § 179). Upon disbursing monies from the Fund for cleanup, New York then seeks reimbursement from a responsible party. Green, supra, at 182 (citing N.Y. Navig. Law §§ 187[1] and 188). "Any person who has discharged petroleum shall be strictly liable, without regard to fault, for all cleanup and removal costs and all direct and indirect damages, no matter by whom sustained." N.Y. Navig. Law § 181[1]. As relevant, a "discharge" is defined as "any intentional or unintentional action or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of petroleum into the waters of the state or onto lands from which it might flow or drain into said waters." N.Y. Navig. Law § 172[8]. In the instant case, Plaintiff qualifies under the New York Oil Spill Act as a discharger who may be held strictly liable for the petroleum contamination at the Site.
That the Oil Spill Act provides for strict liability for landowners renders irrelevant Plaintiff's proof of fault or knowledge of the contamination. Rather, Plaintiff's status as both owner and lessor of the Site to Griffith Oil establishes that Plaintiff retained the ability to control the potential sources of contamination on the Site. Green, supra, at 182 ("As the owner and lessor of the trailer park, [the lessor] had the ability to control potential sources of contamination on its property, including [the lessee's] maintenance of a 275-gallon kerosene tank."). Given that Plaintiff purchased fuel for the gasoline resale facility located on the Site from Griffith Oil, Plaintiff reasonably could have anticipated that Griffith Oil's operation, beginning in 1992, of the Site's gasoline resale facility, may result in a spill of a petroleum product that would contaminate the Site. Green, supra.
The New York Court of Appeals has held under circumstances similar to the instant case that to absolve a Plaintiff of any liability for the contamination would be contrary to the New York Legislature's intentions in enacting the Oil Spill Act. Green, supra, at 183. According to the Court of Appeals, absolving a landowner and lessor of property from any liability for contamination to the property resulting from the lessee's discharge of the contaminant onto the property would permit the landowner to receive "the benefit of the lease as well as the cleanup." Green, supra."Limiting liability to those who actually cause or contribute to the discharge ... would discourage landowners from promptly cleaning up their contaminated land, leaving the State to shoulder the entire cost of the cleanup while it searches for the party at fault," frustrating future cleanups and unnecessarily delaying and depleting the Fund. Id. The Court of Appeals further considered that "[t]he Fund's ability to file a lien on real property owned by dischargers further reflects a legislative policy of holding landowners, [ ], strictly liable for cleanup costs," as "[l]andowners benefit from the State's cleanup efforts and their property `very often is the only asset * * * which the Fund could go against." Id. (citing Sponsor's Mem. in Support, Bill Jacket, L.1991, ch. 488, at 6) (ellipses in original). The harshness of holding a landowner strictly liable under the Oil Spill Act for any discharge that contaminates the landowner's property is abated by N.Y. Navig. Law § 181(5) which "allows a faultless landowner to seek contribution from the actual discharger, even though the landowner itself is liable as a discharger under section 181(1)." Green, supra, at 183 (citing White v. Long, 85 N.Y.2d 564, 626 N.Y.S.2d 989, 650 N.E.2d 836, 838 (1995)). Significantly, Plaintiff makes no argument to the contrary. Accordingly, Plaintiff is, under N.Y. Navig. Law § 181(1), a discharger. As such, Defendant's motion for summary *494 judgment should, on this ground, be GRANTED.
C. Pollution Exclusion
Alternatively, Defendant also maintains that the claim for which Plaintiff seeks coverage "falls squarely" within the insurance policies' pollution exclusions. Defendant's Memorandum at 15. Plaintiff, however, asserts that unresolved factual issues as to whether any discharge of petroleum products at the Site was "sudden and accidental" trigger an exception to the insurance policies' pollution exclusion and obligate Defendant to provide coverage. Plaintiff's Response Memorandum at 17-19. According to Plaintiff, if the contamination resulted from "`[a]n accidental and unexpected leak from a subsurface pipe or tank that continued undetected for a period of time,'" it would qualify as an exception to the insurance policies' pollution exclusion. Plaintiff's Response Memorandum at 18 (quoting Petr-All Petroleum Corporation v. Fireman's Insurance Company of Newark, New Jersey, 188 A.D.2d 139, 593 N.Y.S.2d 693, 695 (4th Dep't 1993)).
When an exclusion clause is relied on to deny coverage, it is the insurer's burden to demonstrate the allegations of the underlying claims allege damages attributable to the specific conduct for which coverage has been excluded. Consolidated Edison Company of New York v. Allstate Insurance Company, 98 N.Y.2d 208, 746 N.Y.S.2d 622, 774 N.E.2d 687, 691-92 (2002); Northville Industries Corp. v. National Union Fire Insurance Co. of Pittsburgh, Pa., 89 N.Y.2d 621, 657 N.Y.S.2d 564, 679 N.E.2d 1044, 1048 (1997); Technicon Electronics Corporation v. American Home Assurance Company, 74 N.Y.2d 66, 544 N.Y.S.2d 531, 542 N.E.2d 1048, 1050 (1989). Once an insurer satisfies its burden of proof that the claims are within the pollution exclusion, the burden shifts to the insured to demonstrate, either through a reasonable interpretation of the underlying complaint or extrinsic evidence, that the discharge was in fact "sudden and accidental." Northville, supra, at 1048. "Shifting the burden to establish the exception conforms with an insured's general duty to establish coverage where it would otherwise not exist, provides the insured with an incentive to strive for early detection that it is releasing pollutants into the environment and appropriately places the burden of proof on the party having the better and earlier access to the actual facts and circumstances surrounding the discharge." Northville, supra, at 1049.
An insurer's duty to defend is derived from the allegations of the complaint and the terms of the policy. Technicon, supra, at 1050. "The duty of an insurer to defend its insured arises whenever the allegations within the four corners of the underlying complaint potentially give rise to a covered claim, or where the insurer `has actual knowledge of facts establishing a reasonable possibility of coverage.'" Frontier Insulation Contractors, Inc. v. Merchants Mutual Ins. Co., 91 N.Y.2d 169, 667 N.Y.S.2d 982, 690 N.E.2d 866, 868 (1997) (quoting Fitzpatrick v. American Honda Motor Co., 78 N.Y.2d 61, 571 N.Y.S.2d 672, 575 N.E.2d 90, 90 (1991)). Further, it is the initial discharge or dispersal of the waste into the environment, rather that the resulting contamination, which is considered in determining whether the claim is within the terms of the pollution exclusion. Powers Chemco, Inc. v. Federal Ins. Co., 74 N.Y.2d 910, 549 N.Y.S.2d 650, 548 N.E.2d 1301, 1302 (1989).
In the instant case, it is undisputed that the pollution exclusion applies to the claims in the underlying action to recover the cost of remediating the site and *495 neighboring property of petroleum contamination attributed to the underground petroleum storage and retail fuel facilities located at the Site. Accordingly, the burden shifts to Plaintiff, as the insured, to demonstrate that either a reasonable interpretation of the complaint or extrinsic evidence indicates such discharge was "sudden and accidental," thereby negating the pollution exclusion and requiring coverage. Northville, supra, at 1048.
"Sudden" and "accidental" have separate meanings and both must be established for the exception to apply. Northville, supra, at 1047; See Technicon, supra, at 1049 ("If the discharge is not both sudden and accidental, the exception in inapplicable and, therefore, the pollution exclusion from coverage provision is operative."). The term "accidental" as used in the pollution exclusion "includes not only an unintended event but also one `occurring unexpectedly or by chance.'" Northville, supra, at 1047 (quoting Webster's 9th New Collegiate Dictionary at 49). Here, the parties do not dispute that the petroleum product discharge was accidental.
The requirement that a discharge of a contaminant be "sudden" is a temporal element which is met only "by the discharge, abruptly or within a short timespan, of a significant quantity of the pollutant sufficient to have some potentially damaging environmental effect." Northville, supra, at 1048. As every dispersal of a contaminant begins with "the abrupt entry of molecules of the offending substance into the surrounding environment," the sudden discharge element is not established by demonstrating the specific time at which the discharge began, as such a construction of the exception would render its suddenness requirement meaningless. Northville, supra, at 1047 (quoting Northville Industries Corporation v. National Union Fire Insurance Company of Pittsburgh, 218 A.D.2d 19, 636 N.Y.S.2d 359, 366 (2d Dep't 1995)).
The facts of Northville, supra, are similar to the instant case insofar as the insured, an operator of petroleum storage distribution facilities, brought an action seeking a declaration that its insurers were obligated to provide a defense and indemnification as to an underlying action arising from petroleum leaks from the insured's underground pipelines and pumps. Although the Court of Appeals held that "the temporal aspect of the sudden discharge element would only be met by the discharge, abruptly or within a short timespan, of a significant quantity of the pollutant sufficient to have some potentially damaging environmental effect," the Court of Appeals also stated in dicta that "[c]overage, however, would not necessarily be negated entirely if such a discharge continued undetected for some period of time, even though at some point continued release could no longer be deemed sudden or accidental for purposes of the duty to indemnify." Northville, supra, at 1148 (citing cases). Nevertheless, "[i]n determining whether the underlying complaint can be read as even potentially bringing the claim within the sudden and accidental exception to the exclusion of pollution coverage, a court should not attempt to impose the duty to defend on an insurer through a strained, implausible reading of the complaint `that is linguistically conceivable but tortured and unreasonable.'" Northville, supra, at 1049 (quoting State of New York v. AMRO Realty Corp., 936 F.2d 1420, 1428 (2d Cir.1991)). The court thus rejected the assertion that any possible interpretation of the complaint as alleging the subject discharge was sudden and accidental, regardless of how groundless or baseless, defeats the pollution exclusion, given that the complaint contained allegations describing the petroleum leakages as having occurred continuously over *496 a period of years, suggesting that the discharge was not sudden. Northville, supra, at 1049. These allegations were supported by affidavits identifying the source of the leakage as a pinhole in an underground pipe which was not discovered by the insured for approximately ten years. Id. Accordingly, the Court of Appeals held that the sudden and accidental exception to the pollution exclusion did not apply. Id.
In contrast, courts have held that where an underlying claim does not specify how the relevant hazardous substance was discharged into the environment, such claim did not clearly negate an interpretation that such discharge was sudden and accidental. See State of New York v. Blank, 27 F.3d 783, 791 (2d Cir.1994); Avondale Industries, Inc. v. Travelers Indemnity Co., 887 F.2d 1200, 1205-06 (2d Cir.1989); and Employers Insurance of Wausau v. Trico Products Corp., 1997 Lexis 19684, *52-61 (W.D.N.Y. Feb. 25, 1997). In particular, the underlying actions in Blank, Avondale and Trico, for which the insureds sought coverage from the insurers, did not sufficiently and unambiguously specify how the contaminants were discharged into the environment as to render it implausible that the discharges were both "sudden and accidental" and thereby negate coverage.
Similarly, in the instant case the alleged initial discharge of petroleum pollutants in the underlying state court action is not specified in the complaint filed in the underlying action which merely alleges that "[o]n or before November 2, 1993, a discharge of petroleum product contaminated the groundwater and soil at and in the vicinity of a gasoline service station and wholesale petroleum facility." Underlying Complaint ¶ 5. As such, the complaint in the underlying action alleges a discharge that is within the sudden and accidental exception to the pollution exclusions, such that Defendant may not rely on the pollution exclusion to avoid defending and, if necessary, indemnifying Plaintiff with regard to the underlying action.
In sum, should the District Judge find that Plaintiff provided timely notice of an occurrence, then Defendant may not avoid providing Plaintiff with coverage under the insurance policies as to the underlying action and summary judgment as to this aspect of the motion should be DENIED.
D. Coverage Disclaimer
Plaintiff also argues that Defendant's disclaimer of coverage is void as untimely. In particular, Plaintiff maintains that although the June 3, 1996 Letter by Plaintiff's then attorney advised Defendant of the DEC's investigation into a petroleum product spill at the Site, and the March 24, 1998 Letter by Plaintiff's current attorney advised Defendant of the underlying action, Defendant did not disclaim coverage until July 20, 1999. Plaintiff's Response Memorandum at 19-21. Plaintiff maintains that at least a question of fact exists as to whether Defendant's disclaimer of coverage more than one year after being advised of the underlying action and more than three years after learning of the occurrence was untimely such that Defendant has waived the right to disclaim coverage based on late notice. Id. at 20-21. Defendant maintains that a delay in disclaiming coverage will result in waiver of such disclaimer only where the delay results in prejudice to the insured which Plaintiff has failed to establish. Defendant's Reply Memorandum at 5-6. The court assumes for purposes of this discussion that Defendant did receive the June 3, 1996 Letter advising Defendant of an occurrence for which Plaintiff potentially faced financial responsibility to the Fund.
For actions involving bodily injury or death, an insurer is required to provide *497 "written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant." N.Y. Ins. Law § 3420(d) (McKinney 1985) (" § 3420(d)"). Defendant's disclaimer of coverage on June 20, 1999 would generally be considered untimely under § 3420(d) and Defendant would be found to have waived its right to disclaim coverage based on Plaintiff's untimely notification of an occurrence. See, e.g., Burt Rigid Box, supra, at 627-29 (unjustified delay in notice of occurrence in excess of three years untimely as matter of law); Hartford Insurance Company v. County of Nassau, 46 N.Y.2d 1028, 416 N.Y.S.2d 539, 389 N.E.2d 1061, 1062-63 (N.Y.1979) (unjustified delay of two months untimely as a matter of law); Taradena v. Nationwide Mutual Ins. Co., 239 A.D.2d 876, 659 N.Y.S.2d 646, 648 (4th Dep't.1997) (unjustified delay of ten months untimely as matter of law). The instant case, however, does not involve bodily injury or death but rather is for environmental cleanup costs to which § 3420(d) is not applicable and a delay in disclaimer of a claim outside § 3420(d) must be shown to have resulted in prejudice to the insured in order to constitute a waiver by the insurer. Burt Rigid Box, supra, at 634 (insurer's delay of more than three years in disclaiming coverage based on insured's untimely notification of claim did not waive untimely notification as defense absent claim of death or bodily injury or resulting prejudice); Incorporated Village of Pleasantville v. Calvert Ins. Co., 204 A.D.2d 689, 612 N.Y.S.2d 441, 443 (2d Dep't 1994) (where § 3420(d) inapplicable to claim not involving death or bodily injury, insurer's untimely disclaimer effective absent insured's showing of prejudice resulting from insurer's unreasonable delay in disclaiming).
Plaintiff asserts that the Second Circuit has required that an insurer provide notice of disclaimer of coverage as soon as is reasonably possible after learning of the ground for disclaimer even in cases involving no bodily injury. Plaintiff's Response Memorandum at 19-20 (citing Bluestein & Sander v. Chicago Ins. Co., 276 F.3d 119 (2d Cir.2002)). Plaintiff's reading of Bluestein & Sander is, however, inapposite as in that case, the Second Circuit held that the defendant insurance company was estopped from asserting any defense to coverage as the insurer's delay in disclaiming coverage was unreasonable and the insured would have been prejudiced by the delayed disclaimer given that the insurer had already provided the insured with a defense for two years prior to disclaiming coverage based on late notice. Bluestein & Sander, supra, at 122 (citing cases). As such, that the defendant insurance company was required to provide the insured with a defense was based not on the insurance company's untimely disclaimer of coverage but, rather, on the fact that Plaintiff would suffer prejudice if the insurers' delay disclaimer to coverage were permitted.
Plaintiff maintains that as a result of Defendant's delay in disclaiming coverage, Plaintiff has suffered prejudice in that Plaintiff "has been forced to attempt to negotiate a settlement with the State, and not to defend a suit by the State against it without the benefit of the insurance coverage owed to it be Defendant." Plaintiff's Response Memorandum at 21. This argument, however, fails as a matter of law.
Specifically, in Albert J. Schiff, Associates, Inc. v. Flack, 51 N.Y.2d 692, 435 N.Y.S.2d 972, 417 N.E.2d 84 (1980), the New York Court of Appeals held that an insurer would be estopped from disclaiming coverage where the insurer, without asserting or reserving a particular disclaimer ground, undertakes the defense which it is not otherwise provided to provide under the policy and on which the insured relies, causing the insured to suffer *498 the loss of the right to control its own defense. Flack, supra, at 87. In the instant case, the parties do not dispute that Defendant has yet to provide Plaintiff with any defense as to the underlying action pursuant to the insurance policies. Moreover, Plaintiff has not asserted, as is its burden, that it has lost the right to control its own defense. See TIG Insurance Company, supra, at 369 (finding insured suffered no prejudice resulting from insurer's delayed disclaimer where insured was represented throughout the relevant action by counsel of its choosing other than the insurer). Cf. Bluestein & Sander, supra, at 122-23 (presuming prejudice to insured under New York law where insurer who is not obligated to provide defense under insurance policy nevertheless undertakes defense of case in reliance on which the insured suffers detriment of losing right to control its own defense (citing Flack, supra, at 87)).
Accordingly, Plaintiff has failed to demonstrate any prejudice resulting from Defendant's otherwise untimely disclaimer of coverage and, as such, Defendant is not required to defend or indemnify Plaintiff with regard to the underlying action. Defendant's motion should be GRANTED as to this basis for summary judgment.
CONCLUSION
Based on the foregoing, Defendant's motion for summary judgment (Doc. No. 6) should be GRANTED; Plaintiff's motion to remand the matter to New York Supreme Court (Doc. No. 16) is DENIED and Plaintiff's cross motion for discovery pursuant to Rule 56(F) (Doc. No. 18) is DENIED.
September 2, 2003.
Pursuant to 28 U.S.C. § 636(b)(1), it is hereby
ORDERED that this Report and Recommendation be filed with the Clerk of the Court.
ANY OBJECTIONS to this Report and Recommendation must be filed with the Clerk of the Court within ten (10) days of service of this Report and Recommendation in accordance with the above statute, Rules 72(b), 6(a) and 6(e) of the Federal Rules of Civil Procedure and Local Rule 72.3.
Failure to file objections within the specified time or to request an extension of such time waives the right to appeal the District Court's Order. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); Small v. Secretary of Health and Human Services, 892 F.2d 15 (2d Cir.1989); Wesolek v. Canadair Limited, 838 F.2d 55 (2d Cir.1988).
Let the Clerk send a copy of this Report and Recommendation to the attorneys for the Plaintiff and the Defendant.
SO ORDERED.
NOTES
[1] The Report and Recommendation also contained alternative recommendations for the Court's consideration in the event the Court disagrees with the primary conclusions in the Report and Recommendation.
[2] For that reason, the Court does not address Magistrate Judge Foschio's alternate conclusion denying summary judgment to St. Paul on the basis of the environmental exclusion clause. The Court also adopts Magistrate Judge Foschio's conclusion denying Mahl Bros.' motion for discovery pursuant to Fed.R.Civ.P. 56(f).
[3] In its initial motion papers, Mahl Bros. argued that jurisdiction was essentially manufactured by St. Paul's motion to sever its claims in the state court action. Had St. Paul's claims not been severed, the parties would not have been completely diverse, thus preventing St. Paul from removing the action to this Court based on diversity jurisdiction. Mahl Bros. appears to have abandoned this argument in its objections to the Report and Recommendation. Mahl Bros. objects to Magistrate Judge Foschio's denial of the motion to remand only on the basis that it would be more efficient if all of Mahl Bros.' claims were heard in state court. The Court construes Mahl Bros. to have abandoned its earlier position that jurisdiction was manufactured by St. Paul.
[4] St. Paul contends that it did not receive notice until March 24, 1998, after the DEC commenced the action against Mahl Bros.
[1] As the issues in the dispositive and nondispositive motions currently pending in this action are intertwined, the court addresses the motions together in the interests of clarity and judicial economy. Further, the undersigned considers a matter of remand as not dispositive since it implicates only the question of whether there is a proper basis for federal jurisdiction to support removal and neither reaches a determination of the merits of a plaintiff's claims nor of defendant's defenses or counterclaims. Following the decision on remand, the parties may prosecute such claims or defenses, including related dispositive motions, if any, in whichever court the decision may direct the action to proceed. Holt v. Tonawanda Coke Corp., 802 F.Supp. 866 (W.D.N.Y.1991); Acme Electric Corp. v. Sigma Instruments. Inc., 121 F.R.D. 26 (W.D.N.Y.1988). Should, however, the District Judge disagree, then the undersigned's finding regarding the motion to remand should be treated as a recommendation.
[2] Unless otherwise indicated, references to N.Y. Navig. Law are to McKinney 1989.
[3] Exh. 11 to Declaration of John F. O'Connor, Esq. (Docket No. 2).
[4] Justice Siwek granted the motion to sever the third-party action from the underlying action on the basis that New York law prohibits the joinder of an insurance coverage claim with the underlying action for which the insured seeks insurance coverage. Justice Siwek June 6, 2002 Order at 3-4.
[5] The fact statement is taken from the pleadings and motion papers filed in this action.
[6] Kleppinger Affidavit Exh. A.
[7] Kleppinger Affidavit Exh. B.
[8] Kleppinger Affidavit Exh. D.
[9] Kleppinger Affidavit Exh. E.
[10] Kleppinger Affidavit Exh. F.
[11] Kleppinger Affidavit Exh. H.
[12] Kleppinger Affidavit Exh. J.
[13] Kleppinger Affidavit Exh, K.
[14] Kleppinger Affidavit Exh. N.
[15] Kleppinger Affidavit Exhs. O and P.
[16] An insurer's duty to defend is broader than the duty to indemnify. EAD Metallurgical Inc. v. Aetna Casualty and Surety Co., 905 F.2d 8, 11 (2d Cir.1990). Separate analysis of Defendant's duties to defend and to indemnify is thus unnecessary. Id.
[17] See also Employers Insurance of Wausau v. Trico Products Corp., 1997 Lexis 19684, *22-25 (W.D.N.Y. February 24, 1997) (unreported and unadopted Report and Recommendation of Magistrate Judge Carol E. Heckman recommending that receipt of a DEC letter advising of insured's status as PRP triggered insured's duty to notify insurer of possibility of potentially covered claim).
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11 N.Y.3d 714 (2009)
PEOPLE EX REL. HAYDEN
v.
ERCOLE.
Court of Appeals of the State of New York.
Decided January 13, 2009.
Motion for leave to appeal denied[*].
NOTES
[*] Motion for poor person relief dismissed as academic or denied.
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367 F.2d 375
Frances C. KISSELL, Plaintiff, Appellant,v.WESTINGHOUSE ELECTRIC CORPORATION, ELEVATOR DIVISION,Defendant, Appellee.
No. 6748.
United States Court of Appeals First Circuit.
Oct. 18, 1966.
Paul A. M. Hunt, Quincy, Mass., for appellant.
Thomas H. Mahony, Boston, Mass., with whom Edward F. Mahony, Boston, Mass., was on brief, for appellee.
Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.
ALDRICH, Chief Judge.
1
Plaintiff appellant sued Westinghouse for damages for personal injuries suffered when an elevator door closed on her hand. At the close of the evidence the court submitted special interrogatories to the jury, along with the general issue. Interrogatory number 4 was, 'Was the plaintiff's own negligence a contributory cause of the accident?' After a period of deliberation the jury returned to ask whether, if the answer to question number 4 was 'yes,' they were compelled to return a verdict for the defendant. The court responded affirmatively and the jury thereafter returned a general verdict for the defendant, together with an answer of 'yes' to interrogatory 4. It did not answer the other interrogatories, which related to the alleged negligence of the defendant.
2
On this appeal plaintiff does not claim that contributory negligence was not a bar to her recovery, or that the evidence did not warrant such a finding. Rather, she complains of the procedure. Her first contention, that it was error for the trial court to accept the jury's verdict without obtaining a response to the other interrogatories, is without merit and illogical to a degress. No conceivable prejudice has been suggested. Skyway Aviation Corp. v. Minneapolis, N. & S. Ry., 8 Cir., 1964, 326 F.2d 701.
3
Plaintiff's second contention is that interrogatory 4 was, in any event, improperly phrased in that it called for a conclusion of law. Although it is sufficient answer that she made no objection to the question at the time, Mazer v. Lipschutz, 3 Cir., 1964, 327 F.2d 42, 51; Halprin v. Mora, 3 Cir., 1956, 231 F.2d 197, 200, the question was not improper. To the extent that Carpenter v. Baltimore & O. RR., 6 Cir., 1940, 109 F.2d 375, condemns a special inquiry addressed to contributory negligence, we disagree. Such questions are constantly put. See, e.g., in addition to the cases hitherto cited, Delpit v. Nocuba Shipping Co., 5 Cir., 1962, 302 F.2d 835, cert. den., 371 U.S. 915, 83 S.Ct. 262, 9 L.Ed.2d 173; McDonnell v. Timmerman, 8 Cir., 1959, 269 F.2d 54. It would be a purposeless restriction to say that special interrogatories cannot be mixed questions of law and fact, provided that the jury is properly instructed as to the law. The practice antedated Rule 49, Mills Woven Cartridge Belt Co. v. Malley, 1 Cir., 1923, 286 F. 841, and we cannot believe the rule was intended to be restrictive. Great American Ins. Co. v. Horab, 8 Cir., 1962, 309 F.2d 262.
4
Finally, plaintiff asserts that after the verdict she learned that one of the jurors had been cross-examined by her husband, an attorney, some two years previously in a contract action brought against the juror's employer. She appeals from the trial court's denial, without hearing, of her motion for a new trial on this ground. Such attacks on a verdict carry a heavy burden. The mere allegation of a remote connection between a juror and one of the parties, without a showing of significant facts from which prejudice can be inferred, cannot be sufficient to upset a verdict. The plaintiff is not entitled to a merely exploratory hearing. There is no indication here that the cross-examination by the husband was such as would be likely to raise personal hostility against him, let alone against the plaintiff, even assuming (although there is no basis for assuming) that the juror knew of the relationship.
5
It is true that each juror was asked on voir dire whether he knew the plaintiff 'or any member of her family.' In this inquiry plaintiff was referred to as 'Frances Kissell' and 'Mrs. Kissell', with no identifiction of her husband, then or later. She was obliged to go further, if she wanted certainty. Brown v. United States, 10 Cir., 1966, 356 F.2d 230. The husband was not a party to the action, and nothing occurred during the trial to bring his identity to the juror's attention. Whatever may be the consequences of a deliberately false answer, an unintentional mistake on the voir dire adds nothing to the plaintiff's case.
6
Affirmed.
|
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Case: 11-13551 Date Filed: 09/04/2012 Page: 1 of 4
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 11-13551
Non-Argument Calendar
________________________
D.C. Docket Nos. 2:10-cv-14228-JEM ; 2:10-cr-14020-JEM-1
ALVIN ROGER BELLEFLEUR,
Petitioner - Appellant,
versus
UNITED STATES OF AMERICA,
Respondent - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(September 4, 2012)
Before HULL, WILSON, and MARTIN, Circuit Judges.
PER CURIAM:
Alvin Roger Bellefleur, proceeding in forma pauperis, appeals the district
court’s dismissal of his 28 U.S.C. § 2255 motion. In December 2010, a magistrate
Case: 11-13551 Date Filed: 09/04/2012 Page: 2 of 4
judge recommended denial of the motion. Later that month, Bellefleur filed
objections to the magistrate judge’s report and recommendation along with a
motion to supplement the § 2255 motion pursuant to Rule 15(a) of the Federal
Rules of Civil Procedure. In April 2011, Bellefleur filed pro se a second motion to
supplement. The district court adopted the magistrate judge’s report and
recommendation in July 2011 and dismissed the § 2255 motion on the ground that
the claims brought therein were not supported by the record. The district court
denied all pending motions as moot, and in doing so denied the motions to amend
without explanation. On appeal, Bellefleur argues that the district court’s denial of
his motions to amend were an abuse of discretion.
We review a district court’s decision to deny a motion for leave to file an
amended complaint for an abuse of discretion. Baez v. Banc One Leasing Corp.,
348 F.3d 972, 973 (11th Cir. 2003) (per curiam). When amendment is not
permitted as of right, “the court should freely give leave [to amend] when justice
so requires.” Fed. R. Civ. P. 15(a); see also Farris v. United States, 333 F.3d
1211, 1215 (11th Cir. 2003) (per curiam) (applying Rule 15(a) in the context of
§ 2255). A court must give a reason for denial of a motion to amend absent “any
apparent or declared reason—such as such as undue delay, bad faith or dilatory
motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue
2
Case: 11-13551 Date Filed: 09/04/2012 Page: 3 of 4
of allowance of the amendment, futility of amendment, etc.” Foman v. Davis, 371
U.S. 178, 182, 83 S. Ct. 227, 230 (1962); see also id. (noting that the mandate to
freely grant motions to amend “is to be heeded”). “[O]utright refusal to grant the
leave [to amend] without any justifying reason appearing for the denial is not an
exercise of discretion; it is merely abuse of that discretion and inconsistent with the
spirit of the Federal Rules.” Id.; see also Baez, 348 F.3d at 974.
The district court abused its discretion when it denied Bellefleur’s motions
to amend his § 2255 motion without providing justification. The two motions to
supplement were filed after the magistrate judge filed his report and
recommendation, and when the district court adopted the magistrate judge’s
opinion, it made no mention of the motions to supplement. Contrary to the
government’s contention, the court’s statement that it “reviewed the entire file and
record” was not an adequate denial of a motion to amend in this case. See Foman,
371 U.S. at 182, 83 S. Ct. at 230.
We cannot affirm the district court’s order on the grounds that the motions to
supplement were futile or untimely. Bellefleur provided sufficient legal and
factual information in the motions to supplement to warrant a justifying reason
from the district court. The motions to supplement were not of a type such that
dismissal without discussion is permitted. See Foman, 371 U.S. at 182, 83 S. Ct. at
230.
3
Case: 11-13551 Date Filed: 09/04/2012 Page: 4 of 4
We therefore vacate the district court’s denial of Bellefleur’s § 2255 motion
without prejudice and remand for consideration of the motions to supplement. In
doing so, we express no opinion on the outcome of the underlying claim or the
motion to amend.
VACATED AND REMANDED.
4
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219 Ga. 680 (1964)
135 S.E.2d 270
CLARK
v.
THE STATE.
22323.
Supreme Court of Georgia.
Argued January 14, 1964.
Decided January 30, 1964.
Rehearing Denied February 11, 1964.
*681 B. Clarence Mayfield, E. H. Gadsden, for plaintiff in error.
Andrew J. Ryan, Jr., Solicitor, R. E. Barker, contra.
DUCKWORTH, Chief Justice.
1. The demurrer attacks the statute (Ga. L. 1960, p. 142; Code Ann. § 26-3005) upon the grounds that it denies the equal protection and due process guaranteed by the Fourteenth Amendment (Code § 1-815). This case is a striking illustration of the one-sided appeals constantly made to this Amendment. The heart of the Amendment everything it seeks to protect is found in its provision that there must be equal protection of the law and there must be no deprivation of "life, liberty or property" without due process of law. It places them all upon precisely the same level of inviolability. No judge can, with good conscience, give to either "Life" or "Liberty" or "Property" a priority or preferential protection over the other two. Indeed, any judge can harmonize all apparent conflicts in these rights by limiting each to the exact point where to extend it would invade the other. To illustrate, life can be forfeited by its criminal use in a manner that the law provides for its forfeiture because of the inhibited criminal act. Liberty stops where to extend it invades the liberty of another. Property is protected against unauthorized uses of life *682 or liberty. Not only do all judges know that the actual value of property is in its use or sale in harmony with law, Harris v. Duncan, 208 Ga. 561 (67 SE2d 692), but every layman knows this. Any invasion regardless of its degree of the owner's dominion over use or sale of his private property is interdicted by the Fourteenth Amendment as well as Art. I, Sec. I, Par. II of Georgia's Constitution (Code Ann. § 2-102). Therefore, this demurrant must abide by as well as rely upon the Fourteenth Amendment. Any intelligent court must hold that this liberty stops precisely where to extend it would trespass upon another's property. If one is granted the liberty to invade another's private property over the objection of the owner for any period of time, that same liberty would continue for all time, and the result is destruction of property without due process in direct violation of the Constitution. Therefore, one could find no constitutional process that would entitle him to commit the trespass forbidden by this statute, hence it denies him none. Compare Nash v. United States, 229 U. S. 373, 377 (33 SC 780, 57 LE 1232); International Harvester Co. v. Commonwealth of Kentucky, 234 U. S. 216 (34 SC 853, 58 LE 1284); Collins v. Commonwealth of Kentucky, 234 U. S. 634 (34 SC 924, 58 LE 1510); Connally v. General Const. Co., 269 U. S. 269 385 (46 SC 126, 70 LE 322); Lanzetta v. New Jersey, 306 U. S. 451 (59 SC 618, 83 LE 888); Lambert v. California, 355 U. S. 225 (78 SC 240, 2 LE2d 228).
As to equal protection, every owner, manager, or his agents, by the law, is empowered to request everyone, whomsover, to leave his private property, hence complete equal protection is insured. We do not dwell upon the portion of the demurrer, which is dehors the record and is undeniably speaking, since it states matters not shown by the statute or accusation because the uniform decisions of this court hold that such matters can not present any question for decision by a demurrer. Beckner v. Beckner, 104 Ga. 219 (30 SE 622); Teasley v. Bradley, 110 Ga. 497 (7), 507 (35 SE 782); Crowley v. Calhoun, 161 Ga. 354 (3) (130 SE 563); Phinizy v. Phinizy, 152 Ga. 694 (2) (111 SE 433); Interstate Bond Co. v. Cullars, 189 Ga. 283 (5 SE2d 756).
*683 Rules of pleading and practice adopted by this State have never been challenged by the Supreme Court when they were considered constitutional. We think they are the best, but those who differ with us will not violate them simply because they prefer others. It follows that the court did not err in overruling the demurrer.
This ruling accords with The Civil Rights Cases, 109 U. S. 3 (3 SC 18, 27 LE 835). So long as America thus preserves private property, which includes its possession, use and alienation, Communism can never rule this Nation, as private property is an insuperable barrier to the establishment of Communism. We trust that the Judiciary will always refuse to open the gate to Communism and will obey the constitutional command to protect private property.
2. The only other question sought to be raised is the sufficiency of the evidence. We are not happy with the condition of this record. But the attorneys display either a lack of knowledge of the law governing such records or a disrespect therefor. The unvarying rule as old as this court, and constantly stated in our decisions is that a brief of evidence must be approved by the trial judge. Massey v. Pitts, Cook & Company, 48 Ga. 124; Spencer v. Georgia R. & Bkg. Co., 55 Ga. 584; Harrison & Co. v. Hall Safe & Lock Co., 64 Ga. 558; Hardin v. Lovelace, 79 Ga. 209 (3) (5 SE 493); Perry v. Perry, 188 Ga. 477 (4 SE2d 184). And in the absence of such a brief all questions requiring a consideration of evidence will be resolved in favor of the judgment, and it will be affirmed. Hilton & Foster v. McAdams, 82 Ga. 577 (9 SE 426); Jones v. Gate City Lodge No. 54, 171 Ga. 844 (156 SE 672); Perry v. Perry, 188 Ga. 477, supra. Therefore, since no approved brief is in this record we are required to affirm the judgment overruling the motion for a new trial which contained only the general grounds and the motion to acquit which would also require consideration of the evidence.
The judge approved the bill of exceptions on September 27, 1963, which recited that a "tendered brief of the evidence" was a record necessary to decide the questions raised. Then on October 7, 1963, after he had lost jurisdiction by his certification, *684 he entered upon papers purporting to be the evidence the statement that it was tendered on that date. Jones v. State, 64 Ga. 697; Milton v. City of Savannah, 121 Ga. 89 (2) (48 SE 684); Kelley v. City of Atlanta, 141 Ga. 612 (81 SE 869); Boatright v. Boatright, 150 Ga. 68 (102 SE 424); Pryor v. Pryor, 162 Ga. 148 (132 SE 895). Counsel approved an entry in the record acknowledging that the trial judge gave them notice of errors and his objections to the bill of exceptions, and by their direction, the judge corrected it to "cause it to speak the truth, agreeably to the law." Such corrections struck a recital in the bill of exceptions that the brief had been approved and inserted that it had been tendered. They then bring to this court a document which appears to be the testimony but which has not been approved by the judge as the law plainly demands, and while it has no filing date it clearly shows that it was tendered to the trial judge on October 7, 1963, after the trial judge had lost jurisdiction on September 27, 1963. This court will not simply guess what the true evidence was nor sanction a plain failure to conform to the essential rules, nor violate well-established rules by which we are bound in order to render a judgment based upon an unapproved and hence unreliable record. This rule is essential to the orderly review of cases by this court, and it applies to all cases without exception.
For the reasons stated, all of the judgments and rulings complained of in the bill of exceptions must be affirmed.
Judgment affirmed. All the Justices concur.
|
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445 F.3d 1355
COMPUTERVISION CORPORATION, Plaintiff-Appellant,v.UNITED STATES, Defendant-Appellee.
No. 05-5014.
United States Court of Appeals, Federal Circuit.
April 20, 2006.
COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED John S. Brown, Bingham McCutchen LLP, of Boston, Massachusetts, argued for plaintiff-appellant. With him on the brief were George P. Mair, Donald-Bruce Abrams and Matthew D. Schnall.
Bruce R. Ellisen, Attorney, Tax Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Eileen J. O'Connor, Assistant Attorney General; Richard T. Morrison, Deputy Assistant Attorney General; and Gilbert S. Rothenberg and Francesca U. Tamami, Attorneys.
Before NEWMAN, RADER, and DYK, Circuit Judges.
DYK, Circuit Judge.
1
Computervision Corporation ("Computervision") appeals the decision of the United States Court of Federal Claims which held that Computervision is not entitled to a refund of deficiency interest assessed and paid with respect to its 1982 tax year. The court granted the United States' motion to dismiss on the ground that the statute of limitations barred an interest suspension claim because the plaintiff failed to file a claim with the Internal Revenue Service ("IRS") until more than 10 years after the expiration of the two year limitation period of 26 U.S.C. § 6511(a). The court also held that an interest netting claim failed to state a claim because the requirements of 26 U.S.C. § 6621(d) were not met under our decision in Federal National Mortgage Ass'n v. United States, 379 F.3d 1303 (Fed.Cir.2004). We affirm.
BACKGROUND
2
The facts of this case are not in dispute. On September 14, 1983, Computervision, a manufacturer of computer-aided manufacturing products, overpaid its tax liability shown on its 1982 return by $4,750,231, and elected to apply this overpayment to its 1983 tax year.1 On September 17, 1984, Computervision overpaid the amount of taxes shown on the 1983 return by $7,329,276, and again elected to apply this overpayment to the following year, the 1984 tax year. Finally, on July 2, 1985, Computervision filed a return for the 1984 tax year showing an overpayment of $7,166,031, and requested a refund of the entire amount. The IRS paid the refund, without interest, on August 2, 1985.
3
Following an audit, the IRS issued an "examination report" on January 7, 1986, in which it asserted that the taxpayer's 1982 return had understated its tax liability and proposed a deficiency of $6,224,982 for the 1982 tax year. A portion of this deficiency resulted from the IRS's determination that a subsidiary of Computervision, Computervision International, Inc. (CVI), did not qualify as a domestic international sales corporation, or DISC, during the 1983 tax year. See 26 U.S.C. § 992(a)(1) (1982).2 Another portion of the deficiency concerned what we refer to as non-DISC issues.
4
On April 11, 1986, Computervision submitted a protest regarding the IRS's position with respect to the 1982 tax year to the Boston Appeals Office of the IRS, disputing among other issues the determination that CVI was not a DISC. The non-DISC issues in the examination report were resolved by an agreement that the tax liability relating to the non-DISC issues was $2,215,952.3 The IRS proposed a total 1982 tax deficiency of $7,886,409. Of that amount, $5,670,457 was attributable to the DISC issue, and $2,215,952 to non-DISC issues.
5
A 1985 net operating loss carryback eliminated all of the proposed 1982 deficiency (except for a deficiency of $37,776 attributable to investment tax credit recapture). However, the carryback did not eliminate Computervision's liability for interest which had accrued on the 1982 deficiency. On June 3, 1988, the IRS assessed Computervision deficiency interest totaling $4,095,974.42, plus tax in the amount of $37,776. After corrections, the $4,095,974 interest assessment was revised to $4,063,073. Importantly for purposes of this appeal, the $4,063,073 interest assessment included (1) interest in the amount of $2,808,888 attributable to the still-disputed DISC qualification issue, and (2) interest in the amount of $1,254,186 attributable to the resolved non-DISC issues. The IRS computed the deficiency interest based on the entire 1982 deficiency amount, from the due date of the 1982 return to the due date of the 1985 return (when the NOL carryback offset the deficiency). Computervision paid the $37,776 tax deficiency on March 7, 1989. Computervision eventually also paid the deficiency interest claimed by the IRS, with the final payment of $4,045,011.64 occurring on April 28, 1989.
6
The statute bars suit for recovery of the deficiency interest unless "a claim for refund... has been duly filed with the [IRS]...." 26 U.S.C. § 7422(a) (2000). A claim is timely filed if filed "within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever... expires the later ...." 26 U.S.C. § 6511(a). Within two years of the final payment, on August 4, 1989, Computervision filed a refund claim with the IRS (the "original refund claim"), in which it claimed "that portion of the interest relating to the [DISC] disqualification issue" for the 1982 tax year. The refund claim specifically requested $2,808,888, the amount of interest assessed by the IRS on the DISC tax liability. The refund claim also included a boilerplate provision stating that:
7
Computervision claims as a basis for the refund of the interest paid with respect to its 1982 taxable year such other grounds as are shown to be appropriate by the tax returns, books and records and the Examination Report and related Protest of Computervision and [CVI] for their respective tax years ended December 31, 1982, and January 31, 1983.
8
J.A. at 1228.
9
Section 6532 allows the taxpayer to commence suit six months after filing a refund claim if the IRS fails to disallow the claim during that time. 26 U.S.C. § 6532(a). By April 4, 1990, the IRS had not acted on the matter, so Computervision filed a complaint in the Court of Federal Claims. The complaint alleged that "Computervision is aggrieved by the defendant's failure to refund the interest attributable to the purported disqualification of [CVI] as a DISC."
10
Meanwhile, on November 4, 1993, Computervision filed a petition in the United States Tax Court disputing deficiencies that were assessed for two different tax years, 1983 and 1984 — primarily on the theory that the IRS had improperly denied DISC treatment for those years. Proceedings in the Court of Federal Claims relating to the 1982 tax year interest assessment were stayed pending the resolution of the DISC issue by the Tax Court, apparently on the theory that the DISC determination for the 1983 and 1984 tax years would also resolve the issue for the 1982 tax year. On March 18, 1996, the Tax Court ruled in Computervision's favor on the DISC issue, holding that CVI qualified as a DISC. Computervision Int'l Corp. v. Comm'r, 71 T.C.M. (CCH) 2450 (1996). The Tax Court's decision on the DISC issue became final on May 25, 1998.4
11
Following the resolution of the DISC issue by the Tax Court, the Court of Federal Claims lifted its stay with respect to the 1982 tax year proceedings on June 22, 1998. Computervision and the Department of Justice ("DOJ") engaged in settlement negotiations relating to the 1982 DISC issue. On July 22, 1998, Congress enacted a new provision of 26 U.S.C. § 6621, requiring interest netting, that is, requiring the IRS to "apply a zero net interest rate to overlapping periods of mutual indebtedness between a taxpayer and the IRS." Fed. Nat. Mortgage Assn. v. United States, 379 F.3d 1303, 1306 (2004) (describing 26 U.S.C. § 6621(d)). In May 2, 2000, letters to both DOJ and the IRS, Computervision claimed the right to a refund of non-DISC interest based on the theory of interest netting under 6621(d). Computervision did not in these letters assert a claim for interest suspension. The IRS replied on August 17, 2000, treating the claim as including an interest suspension claim for 1982. Specifically, the IRS's August 17 letter stated "Revenue ruling 99-40 (Sequa) [interest suspension] is applied regarding the credit elect [from the 1982 tax year] to 1983. No claim is necessary." J.A. at 1405. The DOJ sent a letter on October 25, 2000, stating that the DOJ was "not in agreement [with the IRS computations suggesting] that an additional refund or overpayment can be allowed in the instant litigation — over and above that negotiated on the basis of the issues in suit — based upon Revenue Ruling 99-40 absent the filing of a timely claim for refund raising the issue." J.A. at 1428 (emphasis in original). In a March 14, 2002, letter, the DOJ reiterated its position and stated that "we do not believe that a timely claim for refund has been filed on [the interest suspension] issue." J.A. at 1430. Computervision filed a formal amendment with the IRS on April 4, 2002, in which it claimed non-DISC interest under the interest suspension theory.
12
On July 9, 2003, Computervision filed an amended complaint in the Court of Federal Claims, claiming $820,946.13 in deficiency interest relating to non-DISC issues on theories of interest suspension and interest netting.
13
The government contended that the interest suspension claim was barred by the statute of limitations. Unlike the DISC interest claim, which involved a challenge to the underlying tax liability, the claim for interest suspension did not involve any challenge to the underlying deficiencies asserted with respect to the non-DISC issues. Rather, the taxpayer contended that, even though the underlying tax liability had been properly determined with respect to non-DISC issues, interest was not owed. The taxpayer relied on the principle of interest suspension, which derives from 26 U.S.C. § 6601(a), and was formally set out in Revenue Ruling 99-40, published on October 4, 1999, more than three years earlier. 1999-2 C.B. 441. Section 6601(a) requires the payment of interest by the taxpayer with respect to "any amount of tax [that] ... is not paid on or before the last date prescribed for payment," and provides that "interest on such amount ... shall be paid for the period from such last date to the date paid." Revenue Ruling 99-40 addressed "the manner in which interest on a subsequently determined deficiency is computed under § 6601(a) when the taxpayer makes an election to apply an overpayment to the succeeding year's estimated taxes." Id.
14
Under Revenue Ruling 99-40, interest suspension applies when (a) a taxpayer elects to credit an overpayment reported on the return for year one [here 1982] to year two [here 1983]; (b) a deficiency is subsequently determined for year one [1982]; and (c) the credit elect to year two is not "needed" to satisfy the required payments of estimated tax for year two [1983]. Rev. Rul. 99-40. Under these circumstances, interest is suspended relating to the deficiency for year one [1982]. Here, in other words, the taxpayer asserted that deficiency interest was not owed for 1982 because the tax for that year had been overpaid, and that the credit-elect transferring that payment to the 1983 tax year should be ignored for purposes of computing interest. Similarly, taxpayer's credit elect from 1983 to 1984 was not needed to pay its 1984 liability, because the 1984 taxes had also been overpaid.5
15
As part of the 2003 amended complaint, the taxpayer asserted an alternative theory for recovery of the non-DISC interest based on a theory of interest netting. "Interest netting" is set forth in 26 U.S.C. § 6621(d), which provides that the IRS applies a net interest rate of zero to overlapping underpayments and overpayments of tax. With respect to interest netting there is a different limitations issue (described below), but there is no issue as to whether the claim itself was timely filed with the IRS because the statute provides for retroactive relief if the statutory conditions are satisfied. See 26 U.S.C. § 6621(d), Pub.L. No. 105-206, § 3301(c)(2), 112 Stat. 741 (1998), as amended. The parties agree that interest netting provides identical relief as interest suspension.
16
On September 9, 2004, the Court of Federal Claims rendered a final decision. Computervision Corp. v. United States, 62 Fed.Cl. 299 (2004). By agreement of the parties, the Court of Federal Claims awarded judgment in favor of the taxpayer in the amount of $2,997,761.42, representing the deficiency interest paid with respect to the DISC deficiency.6 Id. at 332. However, the Court of Federal Claims granted the government's motion to dismiss the taxpayer's claim for a refund of deficiency interest on the non-DISC deficiencies. It held that the interest suspension claim was barred by the statute of limitations because a claim was not filed with the IRS within two years of the date of payment as required by 26 U.S.C. § 6511(a). Id. at 328-29. It also held that Computervision failed to state a claim for interest-netting under section 6621(d). Id. at 332. Section 6621(d) only applies to overlapping periods when underpayment interest is "payable" and overpayment interest is "allowable." The court held that interest is not "allowable" on an overpayment credited to a succeeding year's estimated tax, nor on an overpayment refunded within 45 days. Computervision's 1982 and 1983 overpayments were credited to succeeding years, and its 1984 overpayment was refunded within 45 days, so it failed to meet the requirements of section 6621(d). See id. at 331-32.
17
The taxpayer timely appealed, and we have jurisdiction pursuant to 26 U.S.C. § 1295(a)(3).
DISCUSSION
18
* We first address the statute of limitations issue with respect to Computervision's interest suspension claim.
19
Statutes of limitations play an important role in tax administration, benefiting both the government and taxpayers. The government's authority to assess taxes is limited by 26 U.S.C. § 6501, under which taxes must be assessed within three years of the filing of the return. 26 U.S.C. § 6501 (2000). Similarly, the taxpayer must file its refund claim with the IRS "within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever ... expires the later. . . ." 26 U.S.C. § 6511(a).7 Here the taxpayer's original claim for refund was filed with the IRS within the limitations period because it was filed on August 4, 1989, within two years of the date of the last payment, April 28, 1989. However, that claim did not specifically include the interest suspension claim with respect to the non-DISC issues. A formal claim with the IRS was not filed until April 4, 2002, more than 10 years after the limitations period had expired. Nonetheless, the taxpayer claims that for a variety of reasons the claim was timely.
20
Understanding the taxpayer's contentions requires a description of the overall regulatory scheme. Section 7422(a) of the Internal Revenue Code bars a taxpayer from filing a suit for refund "until a claim for refund or credit has been duly filed with the Secretary, according to the provisions of law in that regard, and the regulations of the Secretary established in pursuance thereof." 26 U.S.C. § 7422(a) (2000). The Secretary by regulation requires that claims for refund "set forth in detail each ground upon which a credit or refund is claimed and facts sufficient to apprise the Commissioner of the exact basis thereof." 26 C.F.R § 301.6402-2(b)(1) (2005) (emphasis added). Earlier regulations contained similar provisions. See, e.g., United States v. Kales, 314 U.S. 186, 193, 62 S.Ct. 214, 86 L.Ed. 132 (1941) (citing Article 1306 of Treasury Regulation 65, promulgated under the 1924 Revenue Act); U.S. Pipe & Foundry, Co. v. United States, 140 Ct.Cl. 132, 155 F.Supp. 231, 232 (Ct.Cl. 1957) (citing Regs. 111, sec. 29.322-3).
21
The requirement for filing a proper refund claim "is designed both to prevent surprise and to give adequate notice to the Service of the nature of the claim and the specific facts upon which it is predicated, thereby permitting an administrative investigation and determination." Alexander Proudfoot Co. v. United States, 197 Ct.Cl. 219, 454 F.2d 1379, 1383 (Ct.Cl.1972) (quoting Union Pac. R. Co. v. United States, 182 Ct.Cl. 103, 389 F.2d 437, 442 (Ct.Cl.1968), cert denied, 395 U.S. 944, 89 S.Ct. 2017, 23 L.Ed.2d 462 (1969)). This requirement for claim specificity applies equally to claims for deficiency interest which are separate from claims for the underlying tax liability. John B. Lambert & Assocs., Inc. v. United States, 212 Ct.Cl. 71, 1986 WL 22198, at *10 (1976).
22
The Supreme Court has held that in some circumstances a taxpayer's claim is not barred by the statute of limitations even though the taxpayer did not timely file the formal, detailed claim required by the regulations. See, e.g., Kales, 314 U.S. at 196-97, 62 S.Ct. 214; United States v. Andrews, 302 U.S. 517, 524, 58 S.Ct. 315, 82 L.Ed. 398 (1938); United States v. Memphis Cotton Oil Co., 288 U.S. 62, 70-71, 53 S.Ct. 278, 77 L.Ed. 619 (1933); Tucker v. Alexander, 275 U.S. 228, 231, 48 S.Ct. 45, 72 L.Ed. 253 (1927). Unfortunately in implementing the Supreme Court's decisions the language used to describe these exceptions has not always been uniform in courts outside of this circuit.
23
In this circuit this aggregation of rules has come to be known as the substantial variance doctrine. See Lockheed Martin Corp. v. United States, 210 F.3d 1366, 1371 (Fed.Cir.2000); see also Western Co. of N. Am. v. United States, 323 F.3d 1024, 1034 (Fed.Cir.2003); Union Pac. R.R., 389 F.2d at 442-47; Armstrong Rubber Co. v. United States, 207 Ct.Cl. 1023, 1975 WL 3232, at *1 (1975). The doctrine permits consideration of a claim for refund despite failure to timely file detailed formal claims with the IRS when a substantial variance from the requirements of the regulation is not involved.8 But this doctrine applies only in four limited situations. Each of these has itself come to be identified as a separate doctrine.
24
* First, formal compliance with the statute and regulations is excused when the informal claim doctrine is applicable. Under the informal claim doctrine, a timely claim with purely formal defects is permissible if it fairly apprises the IRS of the basis for the claim within the limitations period.
25
The informal claim doctrine is best described in the Supreme Court's decision in Kales, 314 U.S. 186, 62 S.Ct. 214, 86 L.Ed. 132. There within the limitations period the taxpayer submitted an informal letter claiming a refund of tax. The letter did not comply with the IRS's regulations because it was not filed on the correct form. The taxpayer later filed an untimely amendment that complied with the regulations. The Supreme Court held that "a [timely] notice fairly advising the Commissioner of the nature of the taxpayer's claim... will nevertheless be treated as a[n effective] claim, where formal defects ... have been remedied by amendment filed after the lapse of the statutory period." Id. at 194, 62 S.Ct. 214.
26
The informal claim doctrine is well recognized in other circuits.9 We and our predecessor court, the Court of Claims, have specifically applied the doctrine. See, e.g., Arch Eng. Co., Inc. v. United States, 783 F.2d 190, 192 (Fed.Cir.1986); Barenfeld v. United States, 194 Ct.Cl. 903, 442 F.2d 371, 374 (Ct.Cl.1971); Stuart v. United States, 131 Ct.Cl. 174, 130 F.Supp. 386, 388-90 (Ct.Cl.1955); Am. Radiator & Standard Sanitary Corp. v. United States, 162 Ct.Cl. 106, 318 F.2d 915, 920-22 (Ct. Cl. 1963).
27
In American Radiator the Court of Claims held that "[i]nformal refund claims have long been held valid" when they "have a written component ... [and] adequately apprise the Internal Revenue Service that a refund is sought and for certain years." 318 F.2d at 920 (citing Kales, 314 U.S. 186, 62 S.Ct. 214, 86 L.Ed. 132). The Court of Claims found that the taxpayer filed an informal claim by writing "various notations and figures" on its timely filed income tax return. Id.; see also Newton v. United States, 143 Ct.Cl. 293, 163 F.Supp. 614, 619-20 (Ct.Cl.1958) (finding informal refund claim based on written protests prior to payment); Night Hawk Leasing Co. v. United States, 84 Ct.Cl. 596, 18 F.Supp. 938, 941-42 (Ct.Cl.1937) (finding informal refund claim based on objection on the back of a check paying the tax).
28
In Western Co. of North America v. United States, 323 F.3d 1024 (Fed.Cir. 2003), we recognized that the doctrine applies in circumstances in which the taxpayer's action involved a request for information. Western Co., 323 F.3d at 1035. The IRS mistakenly assessed the taxpayer a "failure-to-file" ("FTF") penalty. Id.; see also Western Co. of N. Am. v. United States, 52 Fed.Cl. 51, 54 (2002). The taxpayer, unaware of what had caused this penalty, repeatedly requested information about the basis for the penalty but did not file a formal claim for a refund. The IRS documented this request in writing. 323 F.3d at 1035. We held that the substantial variance doctrine did not bar the taxpayer's refund claim because, during the limitations period, Western had "repeated[ly] request[ed] ... information that would have allowed filing of an informed claim," and thereby "put the IRS on notice of its challenges to [the] false assessment." Id. at 1034-35.
29
The informal claim doctrine is of no assistance to the taxpayer here. Computervision's original complaint was formal, and contained no specific suggestion that non-DISC interest was in dispute. The complaint simply alleged that "Computervision is aggrieved by the defendant's failure to refund the interest attributable to the purported disqualification of [CVI] as a DISC." There was no further communication from Computervision to the IRS during the limitations period suggesting that Computervision was asserting a claim for non-DISC interest. As the Court of Federal Claims found, "the original claim could not reasonably provide notice to the IRS of [the interest suspension claims]." Computervision, 62 Fed.Cl. at 324. Thus, Computervision's refund claim was not a valid informal claim.
B
30
A second exception exists known as the waiver doctrine. If the taxpayer files a timely formal claim but fails to include the specific claim for relief, the claim may nonetheless be considered timely if the IRS considers that specific claim within the limitations period. The IRS's consideration of the specific claim is held to be a waiver of the requirement of the regulation that the refund claim "set forth in detail each ground upon which a credit or refund is claimed and facts sufficient to apprise the Commissioner of the exact basis thereof." 26 C.F.R. § 301.6402-2(b)(1).
31
The Supreme Court recognized the waiver doctrine in Memphis Cotton, 288 U.S. 62, 53 S.Ct. 278, 77 L.Ed. 619, and Angelus Milling Co. v. Commissioner, 325 U.S. 293, 65 S.Ct. 1162, 89 L.Ed. 1619 (1945). In Memphis Cotton, the Supreme Court found a waiver where (during investigation of the taxpayer's original claim and within the limitations period) the Commissioner discovered that the taxpayer was entitled to a refund on a specific ground, and notified the taxpayer that a refund would be made. 288 U.S. at 65, 73, 53 S.Ct. 278. After the limitations period expired, the Commissioner reversed its position and refused to grant the refund. The taxpayer then filed an amendment asserting its right to a refund. Id. at 65-66, 53 S.Ct. 278. The Court held that the amendment was timely because "[l]ong before the amendment the Commissioner had ascertained the facts and had even notified the taxpayer of the justice of its claims and of the ruling of the Bureau that adjustments would be made accordingly." Id. at 73, 53 S.Ct. 278.
32
In Angelus Milling, the Court held that the claim was untimely but stated that a waiver might be found where "[t]he evidence [is] clear that the Commissioner understood the specific claim that was made even though there was a departure from form in its submission," and "[t]he showing [is] unmistakable that the Commissioner has in fact seen fit to dispense with [the] formal requirements and to examine the merits of the claim." 325 U.S. at 297, 65 S.Ct. 1162; see, e.g., United States v. Garbutt Oil, 302 U.S. 528, 533, 58 S.Ct. 320, 82 L.Ed. 405 (1938) ("[W]hile the Commissioner might have enforced the regulation and rejected a claim for failure to comply with it in omitting to state with particularity the grounds on which the claim was based, he was not bound to do so, but might waive the requirement of the regulation and consider a general claim on its merits.").
33
Various other courts and authorities have also recognized the waiver doctrine.10 Our predecessor court also recognized the doctrine. In Consolidated Coppermines Corp. v. United States, 155 Ct.Cl. 731, 296 F.2d 743, 744 (Ct.Cl.1961), the Court of Claims held that a claim could be filed outside the limitations period if it raised a ground that the IRS had discovered, within the limitations period, during investigation of the original claim. The court found that "the amendment [filed outside the limitations period] merely made more definite the matters already within the knowledge of the Commissioner, which in the course of his investigation he actually did ascertain." 296 F.2d at 744 (Ct.Cl.1961) (internal quotations and citations omitted); see U.S. Pipe & Foundry, 140 Ct.Cl. 132, 155 F.Supp. 231, 232-34 (Ct.Cl.1957) ("[W]here the Commissioner determines and applies newly discovered or different grounds in computing the [taxpayer's liability]... [he] is precluded from thereafter denying the refund because the claim was incompatible with his regulations. . . ."); Nat'l Forge & Ordnance Co. v. United States, 139 Ct.Cl. 204, 151 F.Supp. 937, 941 (Ct.Cl.1957) (allowing taxpayer to assert a claim in court where "the claim for refund was sufficient to cause the Commissioner to consider the matters which are the basis of the present suit"); see also Union Pac. R.R., 389 F.2d at 442 (recognizing that "an item raised in litigation but not specifically adverted to in the [original] claim might be permitted if it is found that... the Commissioner considered that unspecified ground in reaching his decision on the items for which a refund was requested").
34
The central purpose of the waiver doctrine is "to prevent IRS agents from lulling taxpayers into missing the [limitations] deadline . . . ." BCS Fin., 118 F.3d at 526; PALA, 234 F.3d at 880 (quoting BCS Fin., 118 F.3d at 526). Where the taxpayer learns, within the limitations period, that the IRS has addressed the merits of a particular ground, and thus fails to file a timely formal claim raising that ground, the taxpayer's claim is not barred.
35
However, we agree with the Court of Federal Claims that the IRS cannot waive the requirements of its regulations by conduct outside of the limitations period. See Computervision, 62 Fed.Cl. at 327. In Garbutt Oil, the Commissioner considered the merits of a claim for a tax refund after the limitations period had expired. 302 U.S. at 533, 58 S.Ct. 320. The argument was that the Commissioner had waived the requirements of the regulation. The Court held that the claim was not timely, reasoning that "no officer of the government has power to waive the statute of limitations . . ." Id. at 534, 58 S.Ct. 320. This conclusion follows from the statute itself. Even the erroneous allowance of a refund that is barred by the statute of limitations cannot prevent the government from recovering that allowance. Section 7405 allows the government to bring suit to recover an "erroneous" refund. 26 U.S.C. § 7405(a) & (b). Section 6514 provides that a refund is "erroneous" if it is made after the expiration of the limitations period and no timely claim was filed. 26 U.S.C. § 6514(a)(1).
36
Our predecessor court has similarly held that a waiver may not occur after the limitations period expires. In Sicanoff Vegetable Oil Corp. v. United States, 149 Ct.Cl. 278, 181 F.Supp. 265 (Ct.Cl.1960), the Court of Claims refused to find a waiver where the taxpayer filed timely claim asserting one ground, the limitations period expired, and the Commissioner then by mistake considered a different second ground. The taxpayer filed an untimely amendment asserting the second ground. Id. at 268, 149 Ct.Cl. 278. The court held that the Commissioner "was not permitted by law to pay such a claim, and his consideration of it could not enlarge his legal authority." Id. at 268-69, 149 Ct.Cl. 278; see also Melchior v. United States, 136 Ct.Cl. 483, 145 F.Supp. 193, 194 (Ct.Cl. 1956).
37
The taxpayer relies on a few Excess Profits Tax cases decided in other jurisdictions for the proposition that the requirements of what is now 26 C.F.R § 301.6402-2(b)(1) may be waived after the statute of limitations has expired. See Dale Distributing Co. v. C.I.R., 269 F.2d 444 (2d Cir.1959); Eisenstadt Mfg. Co. v. Comm'r, 28 T.C. 221, 1957 WL 1036 (1957); Martin Weiner Corp. v. Comm'r, 26 T.C. 128, 1956 WL 626 (1956).11 Many of those cases involved special regulations under the Excess Profits provisions that imposed unusually detailed claim requirements. See Eisenstadt, 28 T.C. at 231-32; Dale, 269 F.2d at 445. Those decisions are not binding on this court, and are inconsistent with Garbutt Oil and Sicanoff if they are viewed as allowing a waiver after the limitations period. Moreover, as other circuits have recognized,12 expanding the scope of the waiver doctrine as the taxpayer urges would appear to be inconsistent with more recent Supreme Court authority holding that actions of regulatory authorities cannot either extend the statute of limitations under section 6511 by equitable tolling or create an estoppel against the government. See Brockamp, 519 U.S. 347, 352, 117 S.Ct. 849, 136 L.Ed.2d 818 (1997) (holding that equitable tolling does not apply to toll section 6511); Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 434, 110 S.Ct. 2465, 110 L.Ed.2d 387 (1990) (holding that conduct of a government agent could not estop the government from denying benefits not otherwise permitted by law). The taxpayer has not called our attention to any post-Brockamp or Richmond decisions in other jurisdictions that have applied the waiver doctrine to actions by the IRS taking place after the running of the limitations period.13
38
Here there is no contention that the IRS considered the taxpayer's claim for non-DISC interest within the limitations period. Rather Computervision contends that the IRS waived the specificity requirement nine years after the limitations period expired in an August 17, 2000, letter from the IRS to Computervision that included a set of interest computations applying interest suspension to the non-DISC interest. The letter also stated that "Revenue ruling 99-40 (Sequa) [interest suspension] is applied regarding the credit elect to 1983. No claim is necessary." J.A. at 1405. Computervision cannot benefit from the waiver doctrine because the IRS consideration occurred long after the expiration of the limitations period.
C
39
A third exception, which we refer to as the general claim doctrine, exists where (1) the taxpayer has filed a formal general claim within the limitations period; and (2) an amendment is filed outside the limitations period that makes the general claim more specific. The Supreme Court described this exception in United States v. Andrews, 302 U.S. 517, 524, 58 S.Ct. 315, 82 L.Ed. 398 (1938):
40
Where a claim which the Commissioner could have rejected as too general, and as omitting to specify the matters needing investigation, has not misled him but has been the basis of an investigation which disclosed facts necessary to his action in making a refund, an amendment which merely makes more definite the matters already within his knowledge, or which, in the course of his investigation, he would naturally have ascertained, is permissible.
41
The Supreme Court thus recognized that an amendment making a general claim more specific may be permissible even when filed outside the limitations period.
42
The Supreme Court applied the general claim doctrine in United States v. Factors' & Fin. Co., 288 U.S. 89, 53 S.Ct. 287, 77 L.Ed. 633 (1933). There the IRS performed an audit of the taxpayer, but the audit was incomplete when the statute of limitations expired. In order to preserve any claims resulting from the audit, the taxpayer filed a general claim before the limitations period expired requesting a refund of all the taxes it had paid. The claim did not set forth any specific ground, and explained that its purpose was "to permit the Commissioner to refund to deponent any excess paid over taxes actually found to be due." Id. at 91, 53 S.Ct. 287. The Court held that the taxpayer's subsequent amendment was not barred by the statute of limitations. Id. at 96, 53 S.Ct. 287. "[A] general claim for refund, not specifying grounds, is subject to amendment until final rejection irrespective of a limitation running in the interval." Id. at 93, 53 S.Ct. 287 (citing Memphis Cotton Oil, 288 U.S. 62, 53 S.Ct. 278, 77 L.Ed. 619). Similarly, in Memphis Cotton the Court held that an amendment to a general claim, filed outside the limitations period, was timely where the original claim merely stated the amount of the tax paid, the correct tax and the amount of overpayment, but did not specify the facts or reasons justifying a refund. 288 U.S. at 64-65, 71, 53 S.Ct. 278.
43
Our predecessor court recognized the general claim doctrine in at least one case, Cochran v. United States, 105 Ct.Cl. 628, 62 F.Supp. 872, 872 (Ct.Cl.1945), where the court permitted an untimely amendment to a general claim that requested refunds relating to "losses not claimed." The court held that the amendment "perfected and made specific" the original general ground. Id. at 875.
44
However, the general claim doctrine only applies when the original claim is general rather than specific. In United States v. Henry Prentiss & Co., 288 U.S. 73, 53 S.Ct. 283, 77 L.Ed. 626 (1933), the Supreme Court held that where the original timely claim asserted a specific ground, it could not be amended out of time to claim a new basis for relief unrelated to the original claim. Id. at 83, 53 S.Ct. 283. Likewise in Andrews the Court found that an amendment to a claim raising a specific ground was untimely because "[t]he very specification of the items of complaint would tend to confine the investigation to those items and there is no evidence that the examination was more extended." 302 U.S. at 525, 58 S.Ct. 315.
45
Here Computervision's original claim was not general but specific. It contained a specific request for DISC-related interest which claimed "the portion of the interest paid that is attributable to the [DISC disqualification issue]."14 J.A. at 1225.
46
To be sure the original 1989 claim included a secondary, general claim. The general claim was a boilerplate provision stating:
47
Computervision claims as a basis for the refund of the interest paid with respect to its 1982 taxable year such other grounds as are shown to be appropriate by the tax returns, books and records and the Examination Report and related Protest of Computervision and [CVI] for their respective tax years ended December 31, 1982, and January 31, 1983.
48
J.A. at 1228. In Andrews the Supreme Court rejected the argument that the general claim doctrine was applicable under such circumstances. As here, the taxpayer's claim in Andrews "not only called for redress of a specified grievance but demanded general relief as well." 302 U.S. at 525, 58 S.Ct. 315. The Court held that the taxpayer's amendment was barred by the statute of limitations, reasoning that "[t]he very specification of the items of complaint would tend to confine the investigation to those items and there is no evidence that the examination was more extended." Id. at 526, 58 S.Ct. 315. Thus Computervision's untimely claim for non-DISC interest does not meet the requirements of the general claim doctrine.15
D
49
Where the general claim doctrine is inapplicable because the original claim was not general but specific, a related doctrine, the germaneness doctrine, may allow relief. This fourth exception only applies where the taxpayer (1) files a formal claim within the limitations period making a specific claim; and (2) after the limitations period but, while the IRS still has jurisdiction over the claim, files a formal amendment raising a new legal theory — not specifically raised in the original claim — that is "germane" to the original claim, that is, it depends upon facts that the IRS examined or should have examined within the statutory period while determining the merits of the original claim. Unlike the waiver doctrine, the inquiry here is not whether the particular legal theory for recovery has been considered by the IRS during the limitations period but whether the underlying facts supporting that legal theory were discovered or should have been discovered by the IRS in considering the original claim during the limitations period.
50
The Supreme Court recognized this exception in Bemis Brothers Bag Co. v. United States 289 U.S. 28, 53 S.Ct. 454, 77 L.Ed. 1011 (1933). In Bemis, the taxpayer filed a timely claim for a refund with the Commissioner, arguing that the Commissioner should allow a so-called "special assessment" for determining "invested capital" for excess profits tax purposes because invested capital could not be calculated with precision. Id. at 31, 53 S.Ct. 454. To support this claim, the taxpayer urged that the precise values of certain items could not be ascertained. The Commissioner denied the claim. After the limitations period expired but before the refund suit was filed, the taxpayer filed an amendment specifically urging that the items should be included in invested capital because they could be calculated, and that the tax should be recalculated on that basis. Id. at 31-32, 53 S.Ct. 454. Thus, the taxpayer's amendment did not require inquiry into a new set of facts, but simply adapted the form of relief to the facts which would have to be examined during investigation of the original claim. The Court held that "the claim as amended does not differ in matter of substance from the claim as first presented," because "[i]f the [Commissioner] found that there had been omissions, but that he was able to his own satisfaction to identify and appraise them, he would learn in the process that there had been an undervaluation of invested capital, and that the assessment of the tax was correspondingly erroneous." Id. at 35, 53 S.Ct. 454.
51
This doctrine also was described in the Supreme Court's decision in Andrews. There, in addition to holding that the general claim was inadequate because it was accompanied by a specific claim, the court held the specific claim was inadequate because it was not "germane" to the later asserted ground. Andrews, 302 U.S. at 524, 58 S.Ct. 315.
52
Other circuits have also recognized this exception.16 Our predecessor court has also recognized this doctrine. In Addressograph, for example, the Court of Claims held that an amendment filed outside the limitations period was "proper and germane" because investigation of the merits of the original claim "would have necessarily involved a consideration of [the facts the amendment depended on]." Addressograph-Multigraph Corp. v. United States, 112 Ct.Cl. 201, 78 F.Supp. 111, 122-23 (Ct.Cl.1948). The amendment "merely made more definite the matters already within the knowledge of the Commissioner, which in the course of his investigation he actually did ascertain." Id. Similarly, in Consolidated Coppermines the court observed that "[w]here the amendment is inconsistent with the former claim, or has injected new and unrelated matter, we have not allowed it, but where it is germane to the original claim and sets up matter discovered in the course of the investigation of the original one, we have allowed it." 296 F.2d at 745.
53
Here Computervision's interest suspension claim as to non-DISC issues cannot benefit from the germaneness doctrine for two separate reasons. First, the amended claim was not in fact germane to the original claim. The original claim did not merely claim an identical amount under a different theory. It claimed a different amount under a different theory. Moreover, as the Court of Federal Claims concluded, "the interest suspension relief that plaintiff is seeking is not a necessary step in completing the interest computation that was explicitly placed at issue in the Original Refund Claim . . . ." Computervision, 62 Fed.Cl. at 319 (internal quotation marks omitted). The IRS did not discover the interest suspension claim as a result of its investigation of the original claim, but rather as a result of Computervision's May 2, 2000, letter raising the interest netting issue. Indeed, Computervision admitted that even as of late 1999, it was unaware that an interest suspension claim was available. The IRS consideration of the claim "was simply a mistake." Id. at 321 n.24. The determination of the interest attributable to the DISC deficiency did not require the IRS to compute non-DISC interest under the interest suspension theory. Even if the IRS possessed the facts necessary to make this computation, "it is not enough that somewhere under the Commissioner's roof is the information which might enable him to pass on a claim for refund." Angelus Milling, 325 U.S. at 299, 65 S.Ct. 1162 (rejecting argument that a taxpayer's refund claim, together with the refund claim of another taxpayer, supplied the IRS with the information needed to determine the merits of an untimely claim).17
54
Second, as the Court of Federal Claims held here, the formal amendment was itself filed too late. Computervision, 62 Fed.Cl. at 328-29. The formal amendment, if filed after the expiration of the limitations period, must be filed while the original claim is still being considered by the IRS. This requirement "is designed both to prevent surprise and to [permit]... an administrative investigation and determination." Union Pacific R.R., 389 F.2d at 442. Thus an amendment is ineffective if filed after the original claim has either been allowed or disallowed by the IRS. For example, in Union Pacific, the Court of Claims concluded that "[t]he disposition of a taxpayer's refund claim by allowance of the amount requested in full, however, precludes an amendment asserting an additional amount after the expiration of the statutory period for refund." Id. at 447 (emphasis added). So too in Allstate Insurance Co. v. United States, the Court of Claims held that "[i]t is a rule of long standing that once a refund claim has been disallowed, it is not subject to amendment." 213 Ct.Cl. 96, 550 F.2d 629, 633 (emphasis added); see also 15 Mertens Law of Federal Income Taxation § 58:38 ("Although amendments to a properly filed claim can be made even though the statutory period for filing a claim has expired, the amendment must be germane, and must be presented before the original claim is resolved."); Memphis Cotton, 288 U.S. at 72, 53 S.Ct. 278 (observing that if "at the time of [the] amendment the claim had been finally rejected," then "the proceeding [had] thereby ended" and the amendment "was too late").
55
The same rule necessarily applies where the taxpayer elects to terminate the IRS's jurisdiction by filing a suit for refund. While the taxpayer has the right to file a refund suit if the IRS has not acted on the claim for six months, the IRS's jurisdiction over the claim necessarily terminates on the date a refund suit is filed. See Exec. Order No. 6166, § 5 (June 10, 1933), reprinted in 5 U.S.C. § 901 (2000).18 The IRS no longer has the authority to resolve the claim, and therefore is without power to "allow" or "disallow" it.
56
We recognize that, as the taxpayer urges, two of our sister circuits have adopted a different rule, holding that an amendment is effective for purposes of the germaneness doctrine after the IRS has lost jurisdiction over the claim. Mutual Assurance Inc. v. United States, 56 F.3d 1353 (11th Cir.1995); St. Joseph Lead Co. v. United States, 299 F.2d 348 (2d Cir. 1962) (finding amendment filed after commencement of suit was timely). Thus, for example, the Eleventh Circuit in Mutual Assurance quoted the Court of Claims' decision in Union Pacific holding that the amendment could not be filed after the allowance of the original claim, but held that "[Union Pacific] is not binding precedent in this circuit." Mutual Assurance, 56 F.3d at 1357. Unlike the Eleventh Circuit we are, of course, bound by the precedent of the Court of Claims. S. Corp. v. United States, 690 F.2d 1368, 1369 (Fed.Cir.1982) (en banc) (the Federal Circuit is bound by decisions of the Court of Claims "announced before the close of business on September 30, 1982").
57
In any event it seems to us that the Court of Federal Claims was correct here in suggesting the rule adopted by our sister circuits in St. Joseph Lead and Mutual Assurance is untenable since it would allow amendments submitted after filing the refund suit to extend the limitations period indefinitely. Computervision, 62 Fed.Cl. at 328-29. Here Computervision filed its original refund suit in the Court of Federal Claims on April 4, 1990, and then filed an amendment with the IRS on April 4, 2002, in which it claimed non-DISC interest under the interest suspension theory. Computervision's amendment in 2002, 12 years after filing suit and after the IRS's jurisdiction had been terminated by the filing of the refund suit, came too late.
58
Thus this exception does not apply to Computervision's claim.
E
59
For the foregoing reasons, Computervision's interest suspension claim must fail. There was no informal claim, and the waiver, general claim and germaneness doctrines are also inapplicable.
II
60
The taxpayer also asserts that it was entitled to recovery of the non-DISC interest under the theory of interest netting.
61
Under section 6621(d), the IRS applies a net interest rate of zero to overlapping underpayments and overpayments of tax. Section 6621(d), enacted on July 22, 1998, provides:
62
Elimination of interest on overlapping periods of tax overpayments and underpayments. — To the extent that, for any period, interest is payable under subchapter A and allowable under subchapter B on equivalent underpayments and overpayments by the same taxpayer of tax imposed by this title, the net rate of interest under this section on such amounts shall be zero for such period.
63
26 U.S.C. § 6621(d) (2000). Computervision argues that its overpayment for the 1982 year, which arose on March 15, 1983, the due date of its 1982 return, should be netted against the subsequently determined underpayment for 1982. Although the 1982 overpayment was credited towards subsequent years, it was not needed to pay liability for those years. Thus, according to Computervision, the overpayment retained its status as a 1982 overpayment until August 2, 1985, when it was finally refunded.
64
The government does not claim that the taxpayer's failure to file the claim within the limitations period is a bar, because the interest netting statute provides for retroactive relief under certain circumstances. However, the government asserts that the doctrine is inapplicable for a number of reasons. We need to address only one because we agree with the government that under our decision in Federal National Mortgage Association v. United States, 379 F.3d 1303 (Fed.Cir.2004) ("FNMA"), the taxpayer has failed to satisfy the requirement for retroactive application of the statute.
65
The interest Computervision contests arose prior to the enactment of section 6621(d). Section 6621(d) applies retroactively only under certain circumstances.19 Specifically, section 6621(d) is "[s]ubject to any applicable statute of limitation not having expired with regard to either a tax underpayment or a tax overpayment" as of July 22, 1998. Pub.L. No. 105-277, § 4002(d), 112 Stat. 2681 (1998), amending Pub.L. No. 105-206, § 3301(c)(2), 112 Stat. 741 (1998). In FNMA, we interpreted this language to require that the statute of limitations must be open with respect to both the underpayment and the overpayment.
66
A claim for a refund of paid underpayment interest is barred if not filed within the later of three years from the date the return was filed or two years from the date the interest was paid. 26 U.S.C. § 6511. The underpayment interest in this case is the 1982 deficiency interest, which was paid on April 28, 1989. The limitations period for the underpayment closed two years later, on April 28, 1991 — several years before the July 22, 1998, date specified in section 3301(c)(2).
67
A claim for interest from overpayments must be filed within six years after the due date of the return that gave rise to the overpayment interest. See 28 U.S.C. § 2401 (2000). In Computervision's case, the overpayment limitations periods expired on March 15, 1989, for the 1982 tax year; March 15, 1990, for the 1983 tax year; and August 2, 1991, for the 1984 tax year. All these periods were closed as of the July 22, 1998, critical date specified in § 3301(c)(2). Computervision's argument that the limitations periods remained open indefinitely while its DISC claim was being litigated is without merit.
68
Thus, as of July 22, 1998, the statute of limitations was closed with respect to both underpayment and overpayment interest, and thus Computervision's claim for interest netting fails to satisfy the requirements for retroactive application of the statute.
CONCLUSION
69
For the foregoing reasons, the judgment of the Court of Federal Claims is AFFIRMED.
COSTS
70
No costs.
Notes:
1
Under 26 U.S.C. § 6402(b), the IRS permits a corporate taxpayer that has overpaid its liability in one year to claim a credit for the overpayment against its estimated taxes for the succeeding year. 26 U.S.C. § 6402(b) (2000)
2
The DISC provisions allow a domestic production company to establish a DISC to handle its export sales and leases. The DISC itself is not subject to tax on its earnings. 26 U.S.C. § 991 (2000). Instead, a portion of the DISC's earnings is taxed to the DISC's shareholders as a constructive dividend, 26 U.S.C. § 995(b)(1), and the remaining income is not taxed to the shareholders until distributed. 26 U.S.C. § 995;see Dow Corning Corp. v. United States, 984 F.2d 416, 417 (Fed.Cir. 1993).
3
Apparently, this amount was later revised by agreement to $2,102,421
4
The Tax Court proceeding remains pending with respect to certain computational issues
5
The interest suspension theory is described in our decision inMarsh & McLennan Cos., Inc. v. United States, 302 F.3d 1369, 1378 (Fed.Cir.2002).
6
There is a slight discrepancy between the award of $2,997,761.42 and Computervision's original claim of $2,808,888
7
The taxpayer may file suit for refund after "the expiration of 6 months from the date of filing the claim ... unless the Secretary renders a decision thereon within that time," and must file the suit within "2 years from the date of mailing ... to the taxpayer of a notice of the disallowance of the part of the claim to which the suit or proceeding relates." 26 U.S.C. § 6532(a)(1)
8
In many cases, the issue is whether there is a substantial variance from a timely filed claimSee Lockheed, 210 F.3d 1366, 1371 (Fed.Cir.2000) (holding that taxpayer may not "present[] claims in a tax refund suit that `substantially vary' the legal theories and factual bases set forth in the tax refund claim presented to the IRS").
9
See Kaffenberger v. United States, 314 F.3d 944, 954-957 (8th Cir.2003) (upholding jury verdict permitting untimely amendment to informal claim, where informal claim had been filed on "Automatic Extension Request" Form 4868, rather than Form 1040, and the IRS was on notice of claim because the "information held by the IRS described the refund sought with sufficient particularity to allow the IRS to investigate the claim"); PALA, Inc. v. United States, 234 F.3d 873, 877-79 (5th Cir.2000) (holding that "an informal claim is sufficient if it is filed within the statutory period, puts the IRS on notice that the taxpayer believes an erroneous tax has been assessed, and describes the tax and year with sufficient particularity to allow the IRS to undertake an investigation") (citing Kales, 314 U.S. at 194, 62 S.Ct. 214); BCS Fin. Corp. v. United States, 118 F.3d 522, 524-25 (7th Cir.1997) (citing Kales, 314 U.S. at 194, 62 S.Ct. 214); United States v. Commercial Nat'l Bank of Peoria, 874 F.2d 1165, 1170-76 (7th Cir.1989) (permitting untimely amendment where taxpayers' attorney wrote a letter to IRS within limitations period, contesting the IRS's calculations); see also generally Martin v. United States, 833 F.2d 655, 660, 662-63 (7th Cir.1987); Michael I. Saltzman, IRS Practice and Procedure ¶ 11.08[2] (2d student ed. 1991) ("IRS Prac. & Proc.").
10
See, e.g., BCS Fin., 118 F.3d at 525-26; Herrington v. United States, 416 F.2d 1029, 1032 (10th Cir.1969); IRS Prac. & Proc. ¶ 11.09[5]; Gerald A. Kafka & Rita A. Cavanagh, Litigation of Federal Civil Tax Controversies ¶ 16.02[1] (2d ed.1997 & supp.2005).
11
The taxpayer also relies onSchenley Indus., Inc. v. Comm'r, 42 T.C. 129, 1964 WL 545 (1964). There the Tax Court held that the IRS "waived" the specificity requirement by failing to timely raise the variance defense during litigation. Id. at 170; see also Tucker v. Alexander, 275 U.S. 228, 230-31, 48 S.Ct. 45, 72 L.Ed. 253 (1927). The issue in the present case is not whether the government can waive the variance defense through inaction during litigation, but rather whether it can waive the defense through administrative action.
12
See BCS Fin., 118 F.3d at 525 (noting that the exceptions are in tension with United States v. Brockamp, 519 U.S. 347, 117 S.Ct. 849, 136 L.Ed.2d 818 (1997), and other Supreme Court authority); PALA, 234 F.3d at 880 n.37 ("We share the Seventh Circuit's concern that the Supreme Court's decision in [Brockamp] calls into question the continuing viability of the waiver/estoppel strand of the informal claim doctrine.").
13
But cf. Kaffenberger, 314 F.3d 944, 953 (8th Cir.2003) (holding that explicit waiver authorized under § 6501 allows the IRS and the taxpayer to agree to extend the assessment period after statute of limitations expires).
14
Computervision's original claim also included an "alternative" claim regarding the computation of the so called "DISC Commission" paid by Computervision to CVI
15
In any event, as discussed immediately below, the amendment had to be filed while the IRS still had jurisdiction over the claim, and the IRS no longer had jurisdiction once the taxpayer filed the refund suit
16
See, e.g., United States v. Ideal Basic Indus., Inc., 404 F.2d 122, 124 (10th Cir.1968) (permitting amendment where "`facts upon which the amendment is based would necessarily have been ascertained by the commissioner in determining the merits of the original claim'") (quoting Pink v. United States, 105 F.2d 183, 187 (2d Cir.1939)); Pink, 105 F.2d 183, 187 (citing Bemis Bros. Bag, 289 U.S. 28, 53 S.Ct. 454, 77 L.Ed. 1011); see also United States v. Henderson Clay Prods., 324 F.2d 7, 18 (5th Cir.1963) (limitations requirement satisfied for refund claim based on erroneous computation of depletion deduction where amended claim "assert[ed] no other ground for recovery than its original" because "[b]oth are based upon 114(b)(4)(B), and the amended complaint merely takes account of a definitive construction of that subsection which was handed down between the date of the claims and the date of trial."); 113 Am. Law Reports 1291 sec. II(e) (1938 & Supp.2006); 15 Mertens Law of Federal Income Taxation § 58:38 (1991 & supp.2006).
17
See also Andrews, 302 U.S. at 524, 58 S.Ct. 315 ("[A] claim which demands relief upon one asserted fact situation, and asks an investigation of the elements appropriate to the requested relief, cannot be amended to discard that basis and invoke action requiring examination of other matters not germane to the first claim.").
18
Section 5 of Executive Order 6166 is entitled "Claims By or Against the United States," and reads as follows:
As to any case referred to the Department of Justice for prosecution or defense in the courts, the function of decision whether and in what manner to prosecute, or to defend, or to compromise, or to appeal, or to abandon prosecution or defense, now exercised by any agency or officer, is transferred to the Department of Justice.
Exec. Order No. 6166, § 5 (June 10, 1933), reprinted in 5 U.S.C. § 901 (2000); see also Computervision, 62 Fed.Cl. at 326 n.26 (citing Exec. Order No. 6166, § 5).
19
The requirements for retroactive application of interest netting are explained in Revenue Procedure 99-43. Rev. Proc. 99-43, 1999-2 C.B. 579
|
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212 Ga. App. 468 (1994)
442 S.E.2d 16
FLANAGAN
v.
THE STATE.
A94A0230.
Court of Appeals of Georgia.
Decided March 16, 1994.
*470 Albert A. Myers III, for appellant.
Cheryl F. Custer, District Attorney, James M. Miskell, Assistant District Attorney, for appellee.
JOHNSON, Judge.
Anthony Eugene Flanagan ran away from a bailiff as he was being escorted to a holding cell after being found in contempt of court and sentenced to serve ten days in jail. After a chase and scuffle, Flanagan was taken into custody. He was charged and convicted of obstruction of a law enforcement officer and escape.
1. Flanagan asserts that the trial court erred in denying his motion for a directed verdict of acquittal as to the escape charge, because the State failed to prove that he was in custody at the time of the incident, an essential element of the offense of escape.
We agree with the trial court that there was sufficient evidence presented by the State to submit that issue to the jury. Implicit in Flanagan's argument, however, is the question whether he was in custody at the time he fled as contemplated by OCGA § 16-10-52, the escape statute under which he was indicted and convicted. It is clear that the statute intends to create a separate offense for those attempting to elude custody. OCGA § 16-10-52 expressly limits the application of this escape provision to those in custody either prior to or after having been convicted of a felony, misdemeanor or violation of a municipal ordinance. It does not contemplate those in custody for contempt, either civil or criminal.[1]
It is well settled that we are bound to strictly construe criminal statutes. Cargile v. State, 194 Ga. 20, 23 (2) (20 SE2d 416) (1942). In this particular case, the authority to incarcerate for contempt is a power of the court authorized by OCGA § 15-10-2 (7). Even if we determined that the nature of Flanagan's contempt was criminal *469 rather than civil, resulting from his failure to obey an order of the court, his incarceration is not the result of the commission of a misdemeanor or a felony. See Banks v. Wells, 256 Ga. 164 (2), (3) (344 SE2d 652) (1986). While it is logical that a person in Flanagan's situation should be subject to prosecution for escape, the correction of defects or unforeseen gaps in statutory criminal law is for the legislature rather than the courts. The State did not and could not prove that Flanagan had been charged with or convicted of a criminal offense at the time he fled. Consequently, an essential element of the crime is not supported by any evidence, and the escape conviction must be reversed.
2. In his second and third enumerations of error, Flanagan objects to the "moral and reasonable certainty" charge given to the jury. "Our Supreme Court disapproved of that language in Vance v. State, 262 Ga. 236 (2) (416 SE2d 516) (1992), but held that because the trial court's charge repeatedly and accurately conveyed to the jury the concept of reasonable doubt and because there was overwhelming evidence of defendant's guilt, the use of that language was harmless error." McDonald v. State, 210 Ga. App. 689, 691 (5) (436 SE2d 811) (1993). Noting the lack of comfort with which this court applied Vance in McDonald, we nonetheless find that the evidence of Flanagan's guilt with respect to the obstruction of a law enforcement officer charge was overwhelming. The charge as given, when viewed as a whole, did not result in reversible error.
Judgment affirmed in part and reversed in part. Andrews, J., concurs. Beasley, P. J., concurs specially. BEASLEY, Presiding Judge, concurring specially.
I concur, but not with all that is in the second paragraph of Division 1.
Appellant's first enumeration is that the evidence is insufficient and the verdict is contrary to justice and equity. His argument, as set out in the brief, is two-fold: 1) the evidence did not show he was in custody as a matter of fact; that is, the evidence did not show he was "in custody"; and 2) the evidence did not show he was in custody as a matter of law; that is, even if he was "in custody" as a matter of fact, this is not the type of custody from which escape is prohibited.
The second question is not "implicit." It is the alternative support for his first enumeration.
In addition, the evidence was not sufficient to submit the issue to the jury, because as a matter of law, he was not in custody as contemplated by the criminal statute.
So I cannot agree with these two statements made in the majority opinion, page 468. Otherwise, I concur.
NOTES
[1] Other jurisdictions have avoided this pitfall. The Texas statute, for example, reads: "A person commits an offense if he escapes from custody when he is in custody pursuant to a lawful order of a court." V.T.C.A., Penal Code § 38.07 (a) (2).
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473 So.2d 355 (1985)
Carie Whitaker CARONNA, individually and as administratrix of the estate of her deceased husband, Joseph P. Caronna, Jr., and as natural tutrix of the estate of the two minor children, Jonathan Thomas Caronna and Candy Jo Caronna
v.
Barry J. CURRY and his liability insurance carrier, Western Preferred Insurance Co., Roland Hopkins, Southeastern Fidelity Insurance Co. and State of Louisiana Department of Transportation and Development, Office of Highways.
No. 85-CA-138
Court of Appeal of Louisiana, Fifth Circuit.
July 8, 1985.
*356 Robert R. Faucheux, Jr., for plaintiffs/appellants.
Leon C. Vial, III, Hahnville, Andrew P. Carter, Eugene G. Taggart, J. Wayne Anderson, Monroe & Leamann, New Orleans, for defendant/appellee.
Before KLIEBERT, BOWES and GAUDIN, JJ.
BOWES, Judge.
The issue before this court arises out of a wrongful death suit filed in connection with a traffic accident which took place about 7:20 p.m. on February 10, 1983, and in which a pedestrian, Joseph P. Caronna, Jr., was struck and killed by an automobile. The vehicle, which was north bound on Louisiana Hwy. 628 in St. Charles Parish, was driven by Barry J. Curry and owned by Roland Hopkins.
On March 24, 1983, suit was filed naming Barry J. Curry and Roland Hopkins as defendants, along with their insurers and the State of Louisiana, Department of Transportation and Development. Petitioners filed an amended petition on June 28, 1984, seeking to add as defendants, Louisiana Power and Light Co. (L.P. & L.) and St. Charles Parish, by adding the following paragraph numbered VI(A) to the original petition:
Petitioner further avers that a proximate cause of the above alleged accident was the negligence of the defendant, Louisiana Power and Light Company, [who] failed to provide the proper and appropriate lighting. That the defendant, St. Charles Parish, did not provide a sidewalk and/or improved area for walking along the highway.
All of which the aforesaid acts of negligence are in violation of the Ordinances of the Parish of St. Charles and the Laws of the State of Louisiana, which are pleaded herein as if copied in extensio.
L.P. & L. filed exceptions of prescription, no cause of action and no right of action. The trial judge, on December 6, 1984, after hearing argument of counsel, ruled that L.P. & L.'s exception of prescription was well-founded and maintained the exception. Having so ruled, he did not consider the other exceptions filed.
Plaintiffs appeal that ruling, arguing that their amending petition should relate back to the date of filing of the original petition. Appellants cite as authority for their claim L.S.A.-C.C. art. 3503 and Langlinais v. Guillotte, 407 So.2d 1215 (La. 1981).
Article 3503 provides that the interruption of prescription against one solidary obligor is effective against all solidary obligors. We have no argument with that rule. Likewise, we agree that a party pleading prescription bears the burden of proving it. City of New Orleans v. Century Management, Inc., 442 So.2d 831 (La. App. 4th Cir.1983); Thornell v. Payne and Keller, Inc., 442 So.2d 536 (La.App. 1st Cir.1983), Writ Denied. However, we also believe that a party seeking to avoid prescription by claiming solidary liability between two or more parties bears the burden of proving that solidary relationship. See Lowe v. Rivers, 448 So.2d 848 (La.App. 2nd Cir.1984).
The pleadings evidence that absent a solidary relationship between L.P. & L. and any of the original defendants prescription would have tolled. This was pointed out by L.P. & L. in their exception filed on August 28, 1984 and was sufficient to meet their burden of proof.
Plaintiffs, however, failed to meet their burden of proving solidarity. Their amending petition, in paragraph VI(A), does not even allege a solidary relationship between L.P. & L. and any other defendant. At the trial of the exceptions, appellants failed to introduce any evidence whatsoever. Their counsel, in argument, referred to two depositions which had been taken a short time before the amended petition was filed, but he failed to introduce even one of these documents. Our review of the record reveals nothing which would buttress appellant's claim of solidarity.
*357 We also find plaintiffs' reliance on Langlinais v. Guillotte, supra, completely misplaced and inappropriate to the facts of this case. The Langlinais case decided the following questions:
.....
[W]hether a timely filed tort suit against a person in his individual capacity as the owner and purported operator of a negligently driven vehicle, and against his insurer, interrupts prescription on a claim asserted by plaintiff in an amended petition against the same timely sued defendant for his vicarious liability, and against that same defendant as administrator of his minor daughter's estate, the amended petition asserting that the daughter, not the father, was in fact the driver of the vehicle. Langlinais v. Guillotte, supra, at 1215
The Supreme Court, holding that prescription had been interrupted, stated:
.....
[W]here there is only one suit, the same plaintiff, the same defendant (Richard Guillotte) although in different capacities, the same insurer, the same vehicle, and the same accident, we find that there was "sufficient factual connexity between the original and amended assertions, together with some identity of interest between the original and the supplemental party" such that the amendment to the original petition should have been allowed to relate back to the date the original petition was filed.
One can easily see that the situation in Langlinais is completely different from the present case where, by amended petition, the plaintiffs sought to add a defendant who had not been previously named or served, nor who had any reason to even know of the existence of plaintiffs' suit.
Accordingly, for the reasons stated above, the judgment of the trial court maintaining the exception of prescription and dismissing L.P. & L. from this suit is affirmed. All costs are to be paid by appellant.
Affirmed.
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STATE OF WEST VIRGINIA
FILED
SUPREME COURT OF APPEALS July 9, 2015
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
PHILIP B. TULLY, OF WEST VIRGINIA
Claimant Below, Petitioner
vs.) No. 14-0984 (BOR Appeal Nos. 2049280, 2049281)
(Claim No. 2013008121)
GINO’S,
Employer Below, Respondent
MEMORANDUM DECISION
Petitioner Philip B. Tully, by William C. Gallagher, his attorney, appeals the decision of
the West Virginia Workers’ Compensation Board of Review. Gino’s, by Steven K. Wellman, its
attorney, filed a timely response.
This appeal arises from the Board of Review’s Final Order dated August 29, 2014, in
which the Board reversed and vacated an April 30, 2014, Order of the Workers’ Compensation
Office of Judges. In its Order, the Office of Judges reversed the February 7, 2013, claims
administrator’s decision granting Mr. Tully a 0% permanent partial disability award and instead
remanded the claim for another evaluation after Mr. Tully reaches maximum medical
improvement. In its Order, the Board of Review also affirmed, in part, and reversed, in part, a
February 27, 2014, Office of Judges’ Order and reinstated the May 1, 2013, claims
administrator’s decision. In its February 27, 2014, Order, the Office of Judges affirmed October
11, 2012; January 7, 2013; and February 8, 2013, claims administrator’s decisions denying
temporary total disability benefits, denying an MPU Duplex Carotid and MRA of the head, and
closing the claim for temporary total disability benefits. The Office of Judges reversed a May 1,
2013, claims administrator’s decision denying a cervical MRI and follow-up appointments at
Holzer Clinic and instead authorized the MRI and at least one follow-up appointment. The Court
has carefully reviewed the records, written arguments, and appendices contained in the briefs,
and the case is mature for consideration.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
1
reasons, a memorandum decision is appropriate under Rule 21 of the Rules of Appellate
Procedure.
Mr. Tully, a delivery driver, was injured in the course of his employment on September
21, 2012, when he was in a motor vehicle accident. The claim was held compensable for neck
sprain, and he was released to return to work on modified duty. The claims administrator denied
a request for temporary total disability benefits on October 11, 2012. Mr. Tully was treated for
the injury by Nathaniel Majoris, D.C., who diagnosed neck sprain. He noted that Mr. Tully was
experiencing spasms, a buzzing sensation, and tunnel vision when he twisted his neck a certain
way. He requested an MPU Duplex Carotid and an MRA of the head to investigate a possible
carotid or vertebrobasilar artery pathology. The claims administrator denied the request on
January 7, 2013.
Marsha Bailey, M.D., performed an independent medical evaluation on December 10,
2012, in which Mr. Tully reported a history of back injury with chronic pain, mostly in the neck
and back of the head. She opined that he has diagnoses of highly unusual complaints such as
high pitched tones, nausea, and tunnel vision that are unrelated to his compensable injury. She
stated that his complaints are not the result of a cervical sprain/strain. She noted that Mr. Tully
denied lower back pain twice during the evaluation. She opined that he can return to work with
no restrictions and stated that he asserted during the evaluation that he believed he could return
to work. She further opined that Mr. Tully required no further treatment of any kind for the
compensable injury. She assessed 0% whole person impairment. Based on her evaluation, the
claims administrator granted Mr. Tully a 0% permanent partial disability award on February 7,
2013. The claims administrator also denied a request for a cervical MRI and follow-up
appointments at Holzer Clinic on May 1, 2013.
On March 13, 2013, Mr. Tully testified in a deposition that he was rear ended while
delivering pizzas. He stated that he went back to work after the accident but got progressively
stiffer as the day went by and left work early. He sought treatment the following day. At that
time, he was experiencing soreness between his shoulder blades and in his neck. He also
experienced nausea and a feeling of fainting when he turned his head too far. He testified that he
had a neck injury in 2009 when he fell approximately eight feet and landed on his head. Mr.
Tully testified that he attempted to return to work shortly after the injury but that his employer
took his name off of the schedule. He asserted that he turned in his uniform because the only
work Gino’s had for him involved him sitting at work and waiting to see if they had extra
deliveries. Kathy Veres, the direct supervisor at Gino’s asserted in an affidavit that three days
after the injury, Mr. Tully voluntarily removed himself from the work schedule and turned in his
uniform. Gino’s would have accommodated light duty work for him. She stated that he could
have driven the company car to make deliveries or done other work at the restaurant, and he
would have been paid while he was there.
On February 27, 2014, the Office of Judges affirmed the claims administrator’s decisions
denying temporary total disability benefits and closing the claim for temporary total disability
benefits. It found that Mr. Tully testified he was removed from the work schedule following his
compensable injury because his car was totaled. The Office of Judges determined that his
2
testimony was credible; however, it did not indicate that he was temporarily and totally disabled
from working. He had some restrictions from overhead lifting, but nothing that would affect his
ability to perform his job duties. The Office of Judges concluded that since he was not
temporarily and totally disabled, he was not entitled to temporary total disability benefits
regardless of the situation with his employer. The Office of Judges also affirmed the claims
administrator’s denial of an MPU Duplex Carotid and MRA of the head. The tests were
requested by Dr. Majoris, a chiropractor, to evaluate a possible carotid or vertebrobasilar artery
pathology. The Office of Judges found that Dr. Bailey opined in her independent medical
evaluation that Mr. Tully’s complaints were highly unusual and unrelated to the compensable car
wreck. She recommended a neurology consultation before the tests were performed; however,
she specified that the consultation should be conducted under his private insurance because the
tests were not necessary for the compensable injury. The Office of Judges determined that her
opinion was credible and reliable. It found that she is more qualified to speak on the matter as
she is a medical doctor and Dr. Majoris is a chiropractor. The Office of Judges concluded that if
Mr. Tully has artery problems, they would not be related to the compensable injury.
In its Order, the Office of Judges also reversed the claims administrator’s denial of a
cervical MRI and follow-up appointment. It found that the decision was based on Dr. Bailey’s
independent medical evaluation. Dr. Bailey found that Mr. Tully sustained a sprain/strain to his
cervical spine as a result of the injury. She noted that he had a prior neck injury in 2009, and the
Office of Judges stated that he had a history of neck problems dating to at least 2003, when an
MRI showed diffuse disc protrusions. The Office of Judges determined that the fact that he had
prior problems does not preclude him from appropriate treatment for neck symptoms arising
from the compensable injury. Even though Dr. Bailey opined that no further treatment was
necessary for the compensable injury, the Office of Judges found that her own findings could
reasonably support the need for a cervical MRI. Mr. Tully has continued neck complaints that
have not resolved. The Office of Judges stated that since he was in a fragile state in regard to his
neck prior to the accident, a persuasive case is made that it should be investigated whether the
accident did further damage or exacerbated his pre-existing condition. It therefore concluded that
an MRI and at least one follow-up visit were reasonable.
In its April 30, 2014, Order, the Office of Judges reversed the claims administrator’s
grant of a 0% permanent partial disability award and remanded the claim for an impairment
rating once Mr. Tully reached maximum medical improvement. It noted that on February 27,
2014, the Office of Judges authorized a cervical MRI in this claim. Therefore, while Dr. Bailey
found Mr. Tully was at maximum medical improvement, the ruling in the prior Order was
contrary to her opinion. Dr. Bailey examined him and found he qualifies for 4% impairment
under Table 75 Category II-B of the American Medical Association’s Guides to the Evaluation
of Permanent Impairment (4th ed. 1993). However, she placed him in Cervical Category I of
West Virginia Code of State Rules § 85-20-Table E (2006) and adjusted the rating to 0%
impairment. She also rated the thoracic spine, a non-compensable body part. The Office of
Judges noted that she found that it was reasonable to assume that Mr. Tully injured his neck in
the automobile accident. However, she did not sufficiently explain why she placed him in
Cervical Category I and assessed 0% impairment. She also did not explain why she rated the
thoracic spine. The Office of Judges determined that Dr. Bailey evaluated Mr. Tully less than
3
three months after the compensable injury. Given that his injury was superimposed upon prior
neck injuries, it found that it was reasonable to expect him to take longer than usual to fully
recover. The Office of Judges found that Dr. Bailey’s finding of maximum medical improvement
was undermined by the authorization of a cervical MRI following her report. The Office of
Judges therefore found that Dr. Bailey’s impairment rating was premature and that Mr. Tully
should be referred for another assessment following his MRI and further treatment as necessary.
On August 29, 2014, the Board of Review reversed the Office of Judges’ Order regarding
the authorization of a cervical MRI as well as a follow-up visit and the remanding of the case for
another impairment assessment. The Board of Review determined that the Office of Judges
substituted its own judgment for the opinion of the experts as there is no medical record that
recommends a cervical MRI. Based on Mr. Tully’s history, medical records, and the
preponderance of the evidence standard, the Board of Review found that a cervical MRI is not
necessary or reasonable for the compensable injury. The Board of Review further found that Dr.
Bailey’s report was relevant, credible, material, and reliable. The evidence was determined to
establish that Mr. Tully suffered no permanent impairment as a result of the compensable injury.
The remainder of the Office of Judges’ Order was affirmed.
On appeal, Mr. Tully argues that he had not reached maximum medical improvement
when Dr. Bailey evaluated him. He asserts that the Office of Judges correctly found that her
recommendation was not well explained. He further argues that the MRI results contradicted Dr.
Bailey’s finding. Gino’s asserts that Mr. Tully has a longstanding history of substantial cervical
spine problems. It argues that he presented no evidence showing that the requested MRI is
necessary for the compensable injury. It further asserts that the only evidence regarding
permanent partial disability was Dr. Bailey’s report in which she found he had reached
maximum medical improvement, required no further treatment for the compensable injury, and
had no permanent impairment.
After review, we agree with the reasoning of the Office of Judges and the conclusions of
the Board of Review. Mr. Tully had multiple pre-existing cervical problems. The actual request
for a cervical MRI was not submitted into the record. There is no physician of record that stated
that a cervical MRI was necessary for the compensable injury. It is therefore impossible to know
why the cervical MRI was requested so it was properly denied. The Office of Judges’ reversal of
the 0% permanent partial disability award was largely predicated on its authorization of the
cervical MRI, which was incorrect. The only evidence of record regarding permanent partial
disability was Dr. Bailey’s independent medical evaluation. Her report was thorough, and the
Board of Review was correct to rely on it.
For the foregoing reasons, we find that the decision of the Board of Review is not in clear
violation of any constitutional or statutory provision, nor is it clearly the result of erroneous
conclusions of law, nor is it based upon a material misstatement or mischaracterization of the
evidentiary record. Therefore, the decision of the Board of Review is affirmed.
4
Affirmed.
ISSUED: July 9, 2015
CONCURRED IN BY:
Chief Justice Margaret L. Workman
Justice Robin J. Davis
Justice Brent D. Benjamin
Justice Menis E. Ketchum
Justice Allen H. Loughry II
5
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728 A.2d 150 (1999)
1999 ME 63
Sewall MADDOCKS et al.
v.
Elbridge GILES d/b/a E.A. Giles & Sons.
Supreme Judicial Court of Maine.
Argued April 5, 1999.
Decided April 26, 1999.
*151 David J. Van Dyke, Paul F. Macri (orally), Berman & Simmons, P.A., Lewiston, for the plaintiffs.
Gerard O. Fournier (orally), Portland, for the defendant.
Before WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and CALKINS, JJ.
CALKINS, J.
[¶ 1] Sewall and Janice Maddocks appeal from the entry of judgment in the Superior Court (Lincoln County, Bradford, J.) after a jury verdict finding that Elbridge Giles' excavation activities on his land did not interfere with the flow of an underground watercourse benefitting the Maddockses' land. The Maddockses argue that the trial court erred by instructing the jury on the absolute dominion rule, and they urge us to adopt a new rule governing groundwater usage. We decline to adopt a new rule, and we affirm the judgment.
[¶ 2] The Maddockses own property adjacent to a gravel pit owned by Giles. The Maddockses do not live on this property; in fact, there is no house on the property. An underground spring that produced large quantities of water has historically flowed beneath the Maddockses' property. In 1994 the Maddockses filed a complaint alleging that Giles' excavation activities at the gravel pit caused the spring to run dry. Giles moved to dismiss on the ground that there is no cause of action for the diminution or exhaustion of a neighbor's spring by the lawful excavation of land through which underground water percolates. The motion was granted, but we vacated the dismissal in Maddocks v. Giles, 686 A.2d 1069 (Me.1996) [hereinafter Maddocks I]. We recognized the general rule that a person may use his land as he pleases for lawful purposes, but we noted that a landowner may not disrupt a watercourse to the injury of neighboring landowners. See id. at 1071. Because we concluded that the complaint sufficiently alleged that Giles' excavation activities disrupted a watercourse running beneath Giles' property to the Maddockses' spring, we remanded for further proceedings. See id.
[¶ 3] At trial, the Maddockses testified that Giles' excavation activities, including dewatering the gravel pit to allow ever-deeper digging, caused the spring to become exhausted. Their expert hydrogeologist conceded that the water underneath Giles' land flowing into the spring is presumed to be percolating,[1] but added that percolating water *152 can constitute a watercourse because there is a general flow and predictable course. Giles' expert hydrogeologist testified that the water feeding the spring was percolating water and that it could not constitute a watercourse because it has no sides or bed, as a surface watercourse does. He further testified that underground watercourses do not exist in Maine, as these appear primarily in areas of limestone deposits.
[¶ 4] The absolute dominion rule, which has been the law in this jurisdiction for a over a century, is reflected in the instructions given to the jury in this case.[2] The court gave the jury a verdict form that required it to make a preliminary determination of whether the water feeding the spring was a watercourse. The judge instructed the jury to go no further if it found the aquifer on Giles' land was not a watercourse. The jury returned a unanimous verdict that the source aquifer for the spring was not a watercourse, and judgment was granted to Giles.
[¶ 5] The sole issue presented on appeal is whether we should depart from the common law absolute dominion rule and adopt the groundwater use rules set forth in RESTATEMENT (SECOND) OF TORTS § 858 (1979).[3] The absolute dominion rule is based on the premise that groundwater is the absolute property of the owner of the land, just like the rocks and soil that compose it. See ROGER A. CUNNINGHAM, ET AL., THE LAW OF PROPERTY § 7.5 (1984). In Chase v. Silverstone, 62 Me. 175, 183-84 (1873), we held that a landowner who digs a well on his own property, thereby causing percolating water to a neighbor's spring to dry up, is not liable for damages. The rule was affirmed in Chesley v. King, 74 Me. 164, 170 (1882):
[O]ne may, for the convenience of himself or the improvement of his property, dig a well or make other excavations within his own bounds, and will be subject to no claim for damages although the effect may be to cut off and divert the water which finds its way through hidden veins which feed the well or spring of his neighbor.
[¶ 6] As we noted in Maddocks I, there is a limit to this rule of unfettered capture: a landowner cannot stop or divert the flow of a watercourse to the injury of his neighbor.[4]See Morrison v. Bucksport & Bangor R.R. Co., 67 Me. 353, 356 (1877). The scope of this exception, however, is limited by the narrow definition of a watercourse:
To constitute a water course, it must appear that the water usually flows in a particular direction; and by a regular channel, having a bed with banks and *153 sides; and (usually) discharging itself into some other body or stream of water. It may sometimes be dry. It need not flow continuously; but it must have a well defined and substantial existence.
Id.; see also Card v. Nickerson, 150 Me. 89, 91, 104 A.2d 427, 429 (1954); Johnson v. Whitten, 384 A.2d 698, 701 (Me.1978).
[¶ 7] The absolute dominion rule is now the minority rule in the United States. A few states in addition to Maine continue to recognize the rule. See Wiggins v. Brazil Coal & Clay Corp., 452 N.E.2d 958, 964 (Ind.1983); Gamer v. Town of Milton, 346 Mass. 617, 195 N.E.2d 65, 67 (1964); Friendswood Dev. Co. v. Smith-Southwest Indus., Inc., 576 S.W.2d 21, 27 (Tex.1978); White River Chair Co. v. Connecticut River Power Co. of N.H., 105 Vt. 24, 162 A. 859, 871 (1932).
[¶ 8] Most jurisdictions have adopted the reasonable use, or American, rule or some variation of it.[5]See CUNNINGHAM at § 7.5. A representative sample of these jurisdictions includes Adams v. Lang, 553 So.2d 89, 91 (Ala.1989); Bassett v. Salisbury Mfg. Co., 43 N.H. (6 Chandler) 569, 579 (1862); Rothrauff v. Sinking Spring Water Co., 339 Pa. 129, 14 A.2d 87, 90 (1940); Nashville C. & St. L. Ry. v. Rickert, 19 Tenn.App. 446, 89 S.W.2d 889, 896 (1935). The reasonable use rule requires that all uses of the water on the land from which it is extracted must be reasonable. See 6 THOMPSON ON REAL PROPERTY § 50.1 1(a) and (d) (David A. Thomas ed., 1994). The usual interpretation of reasonable simply prevents the landowner from wasting the water or from transporting it off of the land for use elsewhere. See CUNNINGHAM at § 7.5.
[¶ 9] The Restatement approach abandons the common law distinction between underground watercourses and percolating water. See RESTATEMENT (SECOND) OF TORTS § 845. It provides that a landowner who withdraws groundwater, whether in a watercourse or percolating, and "uses it for a beneficial purpose is not subject to liability for interference with the use of water by another." Id. § 858(1). If the withdrawal, however, unreasonably causes harm to a neighbor by lowering the water table, exceeds the owner's reasonable share, or has a direct effect on a watercourse and unreasonably causes harm to one entitled to that water, then the owner may be liable. See id. The Restatement rule is derived from principles of reasonable use, but it differs from its predecessors. The reasonable use rule, of which there are variations, usually only requires that water not be wasted, but the "Restatement balances the equities and hardships between competing users." Linda A. Malone, The Necessary Interrelationship Between Land Use and Preservation of Groundwater Resources, 9 UCLA J. ENVTL. L. & POL'Y 1, 11 (1990). Three states have adopted the Restatement approach. See Cline v. American Aggregates Corp., 15 Ohio St.3d 384, 474 N.E.2d 324, 328 (1984); Maerz v. United States Steel Corp., 116 Mich.App. 710, 323 N.W.2d 524, 530 (1982); State v. Michels Pipeline Constr., Inc., 63 Wis.2d 278, 217 N.W.2d 339, 345 (1974) (adopting now-altered RESTATEMENT (SECOND) OF TORTS, Tentative Draft No. 17, § 858 (1971)).
[¶ 10] The Maddockses argue that we should abandon the absolute dominion rule because it is based upon faulty science. It is generally accepted that the absolute dominion rule was established because courts did not understand how water flows underground. Instead, courts looked to established principles of property law that would allow them to resolve disputes without having to probe beneath the surface. See 1 WATERS AND WATER RIGHTS § 4.05(c) (Robert E. Beck ed., 1991). In rejecting the absolute dominion rule, several courts have given modern science as a basis for abandoning the old rule. See e.g., Cline, 474 N.E.2d at 328 (Holmes, J. concurring).
[¶ 11] We decline to abandon the absolute dominion rule. First, we are not convinced that the absolute dominion rule is the wrong rule for Maine. We recognize that we are not bound by the doctrine of stare decisis when the underpinnings of the *154 previous decisions are disproved and when the conditions of society have changed so that the prior law no longer fulfills a need and is counterproductive. See Myrick v. James, 444 A.2d 987, 998 (Me.1982). Although modern science has enlightened our knowledge of groundwater, this does not mean that the rule itself has interfered with water use or has caused the development of unwise water policy. The Maddockses did not present evidence or point to any studies showing that the absolute dominion rule has not functioned well in Maine. Furthermore, for over a century landowners in Maine have relied on the absolute dominion rule. See Friendswood Dev. Co., 576 S.W.2d at 29 (citing the reliance of landowners on the absolute dominion rule as a significant factor in upholding the old rule). In the absence of reliable information that the absolute dominion rule is counterproductive and a hindrance to achieving justice, we will not depart from our prior decisions.
[¶ 12] Second, we are not persuaded that we, as opposed to the Legislature, should be weighing the heavy policy considerations involved in this issue, not the least of which is the reliance of land owners on the present property laws. The Legislature can study the ramifications of a change in policy; it can call upon experts to give their opinions as to the best water policy for Maine; and it can survey Maine's water needs. We conclude that at this time the question of whether to depart from our common law on groundwater issues is best left to the Legislature.
[¶ 13] Finally, we are further constrained in making the requested change because the Legislature has taken action in this area by creating the Water Resources Management Board to do a comprehensive study of water law in Maine. See 5 M.R.S.A. § 6301 (Supp. 1989), repealed by 5 M.R.S.A. § 6306 (Supp. 1989). The Board reported to the Legislature and suggested that it adopt reasonable use principles. See Maine Water Resources Management Board, Board Findings and Recommendations 5 (Feb.1991). The Legislature chose to leave the common law as it currently stands.[6]
[¶ 14] Because the absolute dominion rule is the law in Maine governing the issue in this case and because the trial court correctly instructed the jury on the absolute dominion rule, we affirm the verdict.
The entry is
Judgment affirmed.
NOTES
[1] Most underground water gradually percolates through the various strata and is not flowing in a watercourse. See 3 WATERS AND WATER RIGHTS § 20.07(a)(4) (Robert E. Beck ed., 1991). This has led to a judicial presumption that underground water is percolating, and therefore the party asserting the existence of an underground stream has the burden of proof. See id. § 20.07(a)(2).
[2] The trial court instructed the jury that a property owner may use his land as he pleases for all lawful purposes but the owner may not interrupt or interfere with a watercourse benefitting another's land, whether that watercourse is above ground or below ground. The court further instructed the jury that a property owner could dig a well or make other excavations and not be subject to a claim for damages even though the effect of the excavation was to cut off and divert water which percolates through the ground or hidden veins to feed the neighbor's well or spring. The court defined a watercourse as a course of water flowing in a particular direction by a regular channel having a bed with banks and sides and usually discharging itself into some other body or stream of water. The court added that although it must have a well-defined and substantial existence, a watercourse need not flow continuously or never be dry.
[3] Section 858 of the Restatement (Second) of Torts states:
§ 858. Liability for Use of Ground Water.
(1) A proprietor of land or his grantee who withdraws ground water from the land and uses it for a beneficial purpose is not subject to liability for interference with the use of water by another, unless
(a) the withdrawal of ground water unreasonably causes harm to a proprietor of neighboring land through lowering the water table or reducing artesian pressure,
(b) the withdrawal of ground water exceeds the proprietor's reasonable share of the annual supply or total store of ground water, or
(c) the withdrawal of the ground water has a direct and substantial effect upon a watercourse or lake and unreasonably causes harm to a person entitled to the use of its water.
(2) The determination of liability under clauses (a), (b), and (c) of Subsection (1) is governed by the principles stated in §§ 850 to 857.
[4] An additional exception prevents a landowner from maliciously wasting water to the detriment of a neighbor. See Chesley, 74 Me. at 177.
[5] A few jurisdictions, notably California, have adopted a rule of correlative rights as a variant on reasonable use principles. See City of Pasadena v. City of Alhambra, 33 Cal.2d 908, 207 P.2d 17, 28-29 (1949); Jones v. Oz-Ark-Val Poultry Co., 228 Ark. 76, 306 S.W.2d 111, 115 (1957).
[6] The Legislature had earlier enacted another exception to the absolute dominion rule by creating liability when a person withdraws groundwater in excess of household purposes for a single-family home and the withdrawal interferes with the preexisting household use of groundwater. See 38 M.R.S.A. § 404(1) and (2) (1989). This statute is inapplicable to the Maddockses because they did not have a preexisting household use of the spring water, and it is their desire to make a commercial use of the spring water.
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 18-1590V
Filed: July 30, 2019
* * * * * * * * * * * * *
SCOTT BOWSHER and CANDY * UNPUBLISHED
BOWSHER, Natural Father and *
Mother, on behalf of MB, a Minor *
*
Petitioners, * Decision on Joint Stipulation;
* Myositis; Influenza (“Flu”)
v. * Vaccine
*
SECRETARY OF HEALTH *
AND HUMAN SERVICES, *
*
Respondent. *
* * * * * * * * * * * * *
Kathy Lee, Esq., Cline, Farrell, et al., Indianapolis, IN, for petitioners.
Julia Collison, Esq., US Department of Justice, Washington, DC, for respondent.
DECISION ON JOINT STIPULATION1
Roth, Special Master:
On October 15, 2018, Scott and Candy Bowsher [“petitioners”] filed a petition for
compensation under the National Vaccine Injury Compensation Program2 on behalf of their minor
child, M.B. Petitioners alleged that M.B. developed myositis after receiving an influenza (“flu”)
vaccination on October 27, 2015. Stipulation, filed July 30, 2019, at ¶¶ 1-4. Respondent denies
that the aforementioned immunizations caused M.B.’s alleged myositis or any other injury or his
current condition. Stipulation at ¶ 6.
1
Although this Decision has been formally designated “unpublished,” it will nevertheless be posted on the
Court of Federal Claims’s website, in accordance with the E-Government Act of 2002, Pub. L. No. 107-
347, 116 Stat. 2899, 2913 (codified as amended at 44 U.S.C. § 3501 note (2006)). This means the Decision
will be available to anyone with access to the internet. However, the parties may object to the 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.
2
National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755. Hereinafter, for ease
of citation, all “§” references to the Vaccine Act will be to the pertinent subparagraph of 42 U.S.C. § 300aa
(2012).
Nevertheless, the parties have agreed to settle the case. On July 30, 2019, the parties filed
a joint stipulation agreeing to settle this case and describing the settlement terms.
Respondent agrees to issue the following payment:
A lump sum of $165,000.00 in the form of a check payable to petitioners, as legal
guardian(s)/conservator(s) of the state of M.B. for the benefit of M.B. This amount
represents compensation for all damages that would be available under § 300aa-15(a).
I adopt the parties’ stipulation attached hereto, and award compensation in the amount and
on the terms set forth therein. The clerk of the court is directed to enter judgment in accordance
with this decision.3
IT IS SO ORDERED.
s/ Mindy Michaels Roth
Mindy Michaels Roth
Special Master
3
Pursuant to Vaccine Rule 11(a), entry of judgment can be expedited by each party filing a notice
renouncing the right to seek review.
2
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721 P.2d 894 (1986)
STATE of Utah, Plaintiff and Respondent,
v.
John Shepard DAVIS, Defendant and Appellant.
No. 20996.
Supreme Court of Utah.
June 27, 1986.
*895 John Shepard Davis, Provo, for defendant and appellant.
David L. Wilkinson, Atty. Gen., Dave B. Thompson, Asst. Atty. Gen., Salt Lake City, for plaintiff and respondent.
PER CURIAM:
This is an appeal from various post-conviction orders of the district court, including the denial of a motion for a new trial.
In 1982, defendant was found guilty of theft, a third degree felony, in violation of U.C.A., 1953, § 76-6-404. He appealed and argued, inter alia, that the trial court erroneously permitted part of a written deposition to be taken into the jury room. In State v. Davis, 689 P.2d 5 (Utah 1984), this Court affirmed the conviction and ruled that defendant was precluded from asserting the error on appeal in view of his failure to make a seasonable objection at trial.
After defendant's petition for rehearing was denied by this Court and the case was remitted to the district court, defendant filed an amended motion for a new trial based on the jury's access to the written deposition. The trial court denied this motion on the ground that it was not timely. Defendant appeals this ruling, alleging that he has now made a proper challenge to the error in district court. For the same reason that the issue was deemed waived on direct appeal (i.e., failure to make a proper and seasonable objection), the trial court properly denied defendant's motion for a new trial.
Defendant also requests that the sentencing orders be declared invalid and that the case be remanded for resentencing. However questionable the procedures employed in entering the formal order of sentence, the matter is now moot since defendant has served his sentence and has received a formal termination of probation. As stated in Spain v. Stewart, 639 P.2d 166, 168 (Utah 1981), "Where the requested judicial relief can no longer affect the rights of the litigants, the case is moot and a court will normally refrain from adjudicating it on the merits." The exception alluded to is where there is a continuing and recurring controversy but, because of the short time period for adjudication, appellate review of the issue is effectively denied. Wickham v. Fisher, 629 P.2d 896 (Utah 1981). That is not the situation in the instant case. Since all questions raised as to sentencing orders are now moot, we will not address the merits of defendant's arguments.
*896 As a separate point on appeal, defendant contends that the court's order of restitution was invalid due to irregularities before and during the restitution hearing. The record contains no formal order of restitution. The only record of that proceeding is an unsigned minute entry which is not appealable. South Salt Lake v. Burton, 33 Utah Adv.Rep. 27 (1986).
The issues raised in defendant's amended motion for a new trial were addressed in the direct appeal, and we affirm the trial court's denial of that motion. We decline to address any of the remaining issues (as to sentencing and restitution), since those issues are not properly before the Court.
So ordered.
|
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707 F.2d 510
Stutzmanv.State of Md.
83-8029
UNITED STATES COURT OF APPEALS Fourth Circuit
3/31/83
1
D.Md.
CPC DENIED--DISMISSED
|
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Filed 3/4/15 Trilogy at Glen Ivy Maintenance Assn. v. Shea Homes CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
TRILOGY AT GLEN IVY MAINTENANCE D066483
ASSOCIATION et al.,
Plaintiffs and Respondents,
(Super. Ct. No. RIC10025131)
v.
SHEA HOMES, INC. et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of Riverside County, Michael C.
Perantoni, Judge. Affirmed.
Connor, Fletcher & Hedenkamp, Matthew J. Fletcher and Douglas A. Hedenkamp
for Defendants and Appellants.
Epsten, Grinnell & Howell, Rian W. Jones and William S. Budd for Plaintiffs and
Respondents.
Plaintiff Trilogy at Glenn Ivy Maintenance Association (Association) and various
homeowners (together plaintiffs) filed this action against defendant Shea Homes, Inc.,
and others (together Shea) alleging, essentially, that Shea improperly diverted revenues
from a contract that should have been paid to Association. After Shea sought and
obtained judgment on the pleadings, plaintiffs filed an amended complaint, and Shea
responded by moving to dismiss the amended complaint pursuant to Code of Civil
Procedure1 section 425.16, commonly referred to as the anti-SLAPP (strategic lawsuit
against public participation) statute. (Equilon Enterprises v. Consumer Cause, Inc.
(2002) 29 Cal.4th 53, 57.) The trial court denied the motion and this appeal by Shea
followed.
I
FACTUAL AND PROCEDURAL BACKGROUND
A. Relevant Facts2
Shea developed and built a master planned community (the Trilogy Project) in
Corona, California. Association is the homeowners association that maintains, manages
and governs the Trilogy Project.3
In August 2001, when Shea was still the sole owner of the land (the Property) on
which the Trilogy Project was ultimately built, Shea entered into a contract (the Contract)
with AT&T Broadband (AT&T) to facilitate the provision of broadband communication
1 All statutory references are to the Code of Civil Procedure unless otherwise
specified.
2 We accept as true for purposes of our analysis the facts averred by plaintiffs
(Freeman v. Schack (2007) 154 Cal.App.4th 719, 733), and only consider Shea's
evidence to the extent it defeats as a matter of law the evidence submitted by plaintiffs.
(Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269.)
3 The remaining plaintiffs below, and respondents in this appeal, owned homes in
the Trilogy Project.
2
services to the residences and businesses within the Trilogy Project. Under the Contract,
Shea agreed to construct (and to grant AT&T a license to use) a conduit/duct system on
the property to install and maintain AT&T's cables and communications equipment, and
granted AT&T an easement over the Property to install and maintain the equipment. In
consideration for these and other covenants by Shea, AT&T agreed to pay Shea the
amounts specified in the Contract.
The recorded covenants, conditions and restrictions (CC&R's) governing the
Trilogy Project provided that the Board of Directors for the Association (the Board) had
the power to enter into exclusive telecommunications contracts. Shea and its
representatives served on and controlled the Board at the time the Contract was entered
into between Shea and AT&T, and Shea remained in control of the Board until mid-2006.
During this period, Shea and its representatives owed fiduciary obligations to the
Association.
Shea did not disclose, and plaintiffs did not know of, the Contract or the payments
Shea was to receive under the Contract until the spring of 2010. At that time,
Association's manager opened a letter addressed to "Trilogy at Glen Ivy." The envelope
contained a check from Time Warner Cable (AT&T's successor in interest under the
contract) in the amount of $175,000 made payable to Shea, and a cover letter that stated
the check was for the payment owed under the Contract. After receiving two more
checks for amounts due under the Contract, both of which were also made payable to
Shea, Association contacted Time Warner Cable and asked that the checks be reissued in
Association's name because it was Shea's transferee. Time Warner Cable ultimately
3
placed stop payment orders on the checks and declined to make further payments until
Shea and Association resolved the conflict over who was entitled to the payments.
Association corresponded with Shea and asserted it was entitled to the payments. Shea
did not respond and Association filed the present action.
B. Procedural History
Genesis of Plaintiffs' First Amended Complaint (FAC)
Association filed the present action alleging several common counts premised on
the contention that, because the Contract's benefits and obligations constituted an
agreement that ran with the Property and Association was the successor in interest to
Shea's interest in the Property, Association was entitled to the amounts received and to be
received under the Contract. Shea moved for judgment on the pleadings arguing that,
because Association was not a party to the Contract, nor as a matter of law did the
Contract constitute an agreement running with the land, Association had no rights in the
contract to be enforced and the complaint should be dismissed. Association opposed the
motion, asserting the complaint adequately stated facts under various theories that
supported the common counts. Association alternatively argued that, even were the court
to grant the motion, it should provide Association leave to amend because, in addition to
providing plaintiffs an opportunity to more fully articulate the theories supporting their
common counts, plaintiffs could state a claim for breach of fiduciary duty against Shea
under Raven's Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114
Cal.App.3d 783. Plaintiffs noted that Shea, when it controlled the Board, was subject to
fiduciary obligations under the Raven's Cove court's rationale and holding that, because
4
undivided loyalty is one of those duties, "a developer and his agents and employees who
also serve as directors of an association, like the instant one, may not make decisions for
the Association that benefit their own interests at the expense of the association and its
members." (Id. at p. 799.) Plaintiffs asserted a claim could be based on the allegations
that Shea, by entering into an undisclosed contract with a vendor that was solely for
Shea's benefit at the time it controlled the Board and that obligated the Association, had
breached its fiduciary duties.
The court granted judgment on the pleadings, but also granted plaintiffs leave to
amend the complaint. Plaintiff's FAC, the subject of the present anti-SLAPP motion,
alleged the same common counts but added claims for breach of fiduciary duties, unfair
business practices, breach of the implied covenant of good faith and fair dealing, and for
declaratory relief. The FAC alleged Shea and its agents were the original directors and
retained control over the Association until mid-2006 and, "[a]s such, [Shea] owed
fiduciary duties of utmost loyalty, trust, confidence and good faith to [Association]," and
alleged Shea breached its fiduciary duty to Association by (1) not disclosing the existence
of the Contract, (2) not causing the Contract to be recorded as a covenant running with
the land, (3) not disclosing its self-interest in the Contract under which it received
compensation, (4) "[r]epudiating the automatic transfer of [the Contract] to [Association]
pursuant to Section 2.11 of the CC&R's," (5) converting the compensation under the
Contract to Shea's own benefit, and (6) usurping the corporate opportunity for
Association to enter into contracts for telecommunications services.
5
The Anti-SLAPP Motion
Shea, focusing and seizing on the italicized word "repudiating," filed the instant
anti-SLAPP motion attacking the FAC. Shea's motion argued the first prong under the
anti-SLAPP statute was satisfied because a core component of the breach of fiduciary
duty claim, and indeed the raison d'être for the amendment, was that Shea had made the
claim (in its motion for judgment on the pleadings) the CC&R's entitled Shea
permanently to control and profit from telecommunications services, and it was this claim
that necessarily formed the basis for plaintiffs' allegation that Shea had "repudiated" its
obligations to plaintiffs. From this predicate, Shea argued protected conduct—i.e., Shea's
position in the current litigation—was an integral component of plaintiffs' claim for
breach of fiduciary duties, because Shea's "repudiation" could only have been manifested
by Shea's position in the current litigation, and Shea therefore asserted it had satisfied the
first prong under the anti-SLAPP statute and thereby shifted to plaintiffs the burden of
providing evidence demonstrating probable success on the merits.
Plaintiffs opposed the anti-SLAPP motion, asserting the complaint on its face
showed the claims asserted were based on Shea's acts and omissions occurring years
before litigation was even contemplated and therefore were not premised on litigation
activities. Plaintiffs contended Shea's pre-litigation actions made clear its position that it
intended to retain the revenues from the Contract in violation of its fiduciary obligations,
6
and the mere fact Shea reiterated its position during litigation did not mean a claim based
on Shea's pre-litigation repudiation became subject to the anti-SLAPP statute.4
The court found Shea had not met its burden of showing the claims asserted in the
FAC arose from protected activity as contemplated by the anti-SLAPP statute, and denied
Shea's motion. This appeal followed.
II
LEGAL STANDARDS
A. The Anti-SLAPP Statute
The anti-SLAPP law provides, in relevant part, that "[a] cause of action against a
person arising from any act of that person in furtherance of the person's right of petition
or free speech under the United States or California Constitution in connection with a
public issue shall be subject to a special motion to strike, unless the court determines that
the plaintiff has established that there is a probability that the plaintiff will prevail on the
claim." (§ 425.16, subd. (b)(1).) The purpose of the statute is to encourage participation
in matters of public significance by allowing a court to promptly dismiss unmeritorious
actions or claims brought to chill another's valid exercise of the constitutional rights of
freedom of speech and petition for the redress of grievances. (Id., subd. (a).)
The anti-SLAPP law involves a two-step process for determining whether a claim
is subject to being stricken. In the first step, the defendant bringing an anti-SLAPP
4 Plaintiffs also argued there was some evidence that, if credited, would support a
judgment in their favor and therefore they had satisfied the second prong of the anti-
SLAPP statute. Because we conclude Shea did not satisfy the first prong of the anti-
SLAPP statute, we do not address these claims.
7
motion must make a prima facie showing that the plaintiff's suit is subject to section
425.16 by showing the plaintiff's claims arise from conduct by the defendant taken in
furtherance of the defendant's constitutional rights of petition, or free speech in
connection with a public issue, as defined by the statute. (Jarrow Formulas, Inc. v.
LaMarche (2003) 31 Cal.4th 728, 733.) If the defendant does not demonstrate this initial
"arising from" prong, the court should deny the anti-SLAPP motion and need not address
the second step. (City of Riverside v. Stansbury (2007) 155 Cal.App.4th 1582, 1594;
Wang v. Wal-Mart Real Estate Business Trust (2007) 153 Cal.App.4th 790, 811.)
If the defendant satisfies the first step, the burden shifts to the plaintiff to
demonstrate there is a reasonably probability it will prevail on the merits at trial.
(§ 425.16, subd. (b)(1).) In this phase, the plaintiff must show both that his or her claim
is legally sufficient and there is admissible evidence that, if credited, would be sufficient
to sustain a favorable judgment. (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809,
823, disapproved on other grounds in Equilon Enterprises v. Consumer Cause, Inc.,
supra, 29 Cal.4th at p. 68, fn. 5; Robertson v. Rodriguez (1995) 36 Cal.App.4th 347,
358.) In making this assessment, the court must consider both the legal sufficiency of
and evidentiary support for the pleaded claims. (Traditional Cat Assn., Inc. v. Gilbreath
(2004) 118 Cal.App.4th 392, 398-399.) On appeal, we review de novo the trial court's
ruling on the motion to strike. (Bernardo v. Planned Parenthood Federation of America
(2004) 115 Cal.App.4th 322, 339.)
8
B. The Gravamen of the Claim Controls Application of the Anti-SLAPP Law
Our Supreme Court has recognized the anti-SLAPP statute should be broadly
construed (Equilon, supra, 29 Cal.4th at p. 60, fn. 3), and a plaintiff cannot avoid
operation of the anti-SLAPP statute by attempting, through artifices of pleading, to
characterize an action as a "garden variety" tort or contract claim when in fact the claim
is predicated on protected speech or conduct. (Navellier v. Sletten (2002) 29 Cal.4th 82,
90-92 (Navellier).) Accordingly, we disregard the labeling of the claim (Ramona Unified
School Dist. v. Tsiknas (2005) 135 Cal.App.4th 510, 522) and instead "examine the
principal thrust or gravamen of a plaintiff's cause of action to determine whether the anti-
SLAPP statute applies" and whether the trial court correctly ruled on the anti-SLAPP
motion. (Id. at pp. 519-522.) We assess the principal thrust by identifying "the allegedly
wrongful and injury-producing conduct . . . that provides the foundation for the claim."
(Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 189.) If the core
injury-causing conduct on which the plaintiff's claim is premised does not rest on
protected speech, collateral or incidental allusions to protected activity will not trigger
application of the anti-SLAPP statute. (Ibid.)
9
III
ANALYSIS
A. The "Arising From" Prong
Shea argues the court erred when it concluded the breach of fiduciary duty claim
did not arise, at least in part, from protected conduct.5 Shea's argument is that (1) the
FAC alleged Shea "repudiat[ed] the automatic transfer of [the Contract] to [Association]
pursuant to Section 2.11 of the CC&R's," (2) this "repudiation" must necessarily have
been based on Shea's unequivocal statements it would not perform, and therefore (3) the
"repudiation" must necessarily be premised on protected conduct because the only
unequivocal statements by Shea refusing to transfer the contract to plaintiffs occurred
during and as part of the present litigation. Shea concludes the first prong was satisfied
because the breach of fiduciary duty claim is rooted, at least in part, on protected conduct,
5 Shea acknowledges the only aspect of the breach of fiduciary duty claim that even
arguably arose from protected conduct was the alleged "repudiation" by Shea of its
obligations under the CC&R's. Shea asserts some courts have concluded that, even when
there are numerous allegations of otherwise unprotected conduct, any allegation of
protected conduct (unless it is "merely incidental" to the thrust of the claim, see Scott v.
Metabolife Internat., Inc. (2004) 115 Cal.App.4th 404, 419) is sufficient to satisfy the
first prong and (absent a showing of probable success as to the protected conduct) will
require striking the entire claim. (See Haight Ashbury Free Clinics, Inc v. Happening
House Ventures (2010) 184 Cal.App.4th 1539, 1550-1551.) However, other courts have
disagreed with the Haight Ashbury approach and concluded the anti-SLAPP statute's
procedures and remedies would only apply to the subset of allegations that arise from
protected conduct. (See, e.g., Cho v. Chang (2013) 219 Cal.App.4th 521, 526-527.)
Although it appears the latter approach is more consonant with the anti-SLAPP statute,
we need not determine definitively here which approach should be followed because we
conclude Shea has not satisfied the first prong even as to the "repudiation" allegation.
10
and therefore the trial court erred in finding the breach of fiduciary duty claim did not
arise from protected conduct.
We conclude the trial court correctly found the breach of fiduciary duty claim did
not arise from protected conduct, and we therefore reject Shea's claim of error. First, the
principal thrust or gravamen of the claim contained in the FAC is that Shea breached its
fiduciary duties to Association, and a necessary predicate to the claim is that Shea owed
fiduciary duties to Association that could have been breached. Because it appears Shea
could only have owed such duties while it controlled the Board (cf. Robinson v.
Grossman (1997) 57 Cal.App.4th 634, 646 [fiduciary obligations of real estate agent
terminate at end of agency]), and the FAC alleges Shea remained in control of the Board
and owed fiduciary obligations to the Association until mid-2006, any claim for breach of
such duties necessarily arose from conduct occurring well before the present litigation
commenced.6
Second, Shea's argument—that the "repudiation" allegation necessarily rests on
protected statements made during the instant litigation and therefore the anti-SLAPP law
was triggered—hinges entirely on the fact the FAC chose to employ the term
6 Shea, arguing on appeal against this construction of the FAC, asserts (1) such
construction would mean plaintiffs' claims were time-barred because the complaint was
not filed until more than four years after mid-2006, and (2) the FAC alleges Association
became entitled to automatic transfer of the Telecommunications Easement on the "Last
Close of Escrow," sometime between 2008 and 2011. Although these assertions may
reveal arguable deficiencies in the substance or viability of the breach of fiduciary duty
claims, the office of the anti-SLAPP statute is not to preempt litigation over all
unmeritorious lawsuits, but only to preempt litigation over unmeritorious lawsuits arising
from protected conduct. (See, e.g., Gerbosi v. Gaims, Weil, West & Epstein, LLP (2011)
193 Cal.App.4th 435, 443-445.)
11
"repudiation" as one of the specifications of how Shea allegedly breached the fiduciary
obligations it owed while in control of the Board, and Shea's gloss on the FAC that the
term "repudiation" was used in its technical rather than colloquial sense. Certainly, the
term "repudiation" has special significance in the arena of contract law: a contract
ordinarily cannot be breached before the time for performance has arrived, but there can
be a breach of contract "by 'anticipatory repudiation,' usually called anticipatory breach."
(1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 861, p. 948; accord,
Central Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501, 514.) The
consequences of an anticipatory repudiation is to give the injured party the right to elect
either to sue immediately for breach of the contract without performing or tendering
performance of his or her own obligations (Central Valley General Hospital v. Smith,
supra) or to wait until the performance is due and to then exercise his or her remedies for
actual breach of the contract. (1 Witkin, supra, § 862, at pp. 949-950.) Although Shea
cites cases correctly holding an anticipatory breach requires either an unequivocal
statement by the promisor of his or her refusal or inability to perform the contract (such
as Karson Industries, Inc. v. Superior Court (1969) 273 Cal.App.2d 7, 9) or actions by
the promisor making it impossible for him or her to perform the contract (such as Taylor
v. Johnston (1975) 15 Cal.3d 130, 139-140), Shea cites no law suggesting the rules
developed in contract law for anticipatory breach have any application or relevance to a
claim for breach of fiduciary duty as asserted by plaintiffs here. Shea's efforts to invoke
the anti-SLAPP statute, premised on the argument that Shea's only "unequivocal
statement" of its refusal to perform were its statements during the present litigation, is
12
based on the importation of contract law concepts that have no apparent application to the
pleaded claims.
Moreover, even to the extent we might construe the FAC's description of Shea's
"repudiated" obligation (i.e. the automatic transfer of the Contract to Association as
required by the CC&R's) as pleading some form of violation of Shea's contractual
obligations, the terminology of "repudiation" would still have no significance because the
FAC alleged the time for performance had already passed. (See, e.g., Gold Min. & Water
Co. v. Swinerton (1943) 23 Cal.2d 19, 29 ["By its very name an essential element of a
true anticipatory breach of a contract is that the repudiation by the promisor occur before
his performance is due under the contract."]; accord, Central Valley General Hospital v.
Smith, supra, 162 Cal.App.4th at p. 514.) The fact Shea may have engaged in protected
conduct when it reiterated its refusal at a later date does not convert a claim seeking
recovery on a fully accrued cause of action for Shea's earlier alleged misfeasance into a
claim "arising from" such later protected conduct. (See, e.g., Aguilar v. Goldstein (2012)
207 Cal.App.4th 1152, 1161 ["What the allegations of the complaint in this case . . .
make clear is that defendants' alleged liability arises from defendants' purported failure to
provide information to the shareholders that would have revealed their alleged conflict of
interest, their alleged misrepresentations and/or omissions regarding the Hospital's offer,
and their ending negotiations with the Hospital purportedly for their own self-interest.
The complaint does not allege that defendants' filing of the Hospital lawsuit gives rise to
any additional liability, but that the lawsuit evidenced defendants' termination of
negotiations. [¶] . . . [¶] . . . The allegations regarding the filing of the Hospital lawsuit
13
are only incidental to plaintiffs' claim that defendants breached their fiduciary duty by
putting their own interests ahead of the interests of the shareholders. Thus, the trial court
properly found that those allegations do not support defendants' motion to strike under
section 425.16."].)
Shea contends this case is controlled by Navellier, supra, 29 Cal.4th 82, arguing
Navellier held that when the repudiation of an obligation is communicated during
litigation, a cause of action based on that repudiation is subject to the anti-SLAPP statute.
Shea's contention is based on an overly broad reading of Navellier that, we conclude,
demonstrates why Shea's effort to bring this case within Navellier's analysis is misplaced.
In Navellier, the plaintiffs had sued the defendant (Sletten) in a federal court action
alleging Sletten had breached a fiduciary duty by, among other things, terminating
plaintiffs' contract to provide investment advisory services. A few months after plaintiffs
filed the federal action, Sletten entered into an agreement with plaintiffs that effectively
rehired plaintiffs as investment advisers and, as part of that agreement, signed a general
release that released all claims against plaintiffs except for indemnity and contribution
(id. at pp. 85-86), but the underlying federal action by plaintiffs was not dismissed as part
of the agreement. Instead, plaintiffs filed an amended complaint, and Sletten responded
by alleging a number of counterclaims that included two claims the federal court (after
rejecting Sletten's argument that the release was voidable as unconscionable and as the
product of economic coercion) held were barred by the general release. (Id. at pp. 86-
87.) Plaintiffs then filed the state court action against Sletten asserting claims for breach
of contract (asserting he breached the release by filing the federal counterclaims) and
14
fraud (alleging he had misrepresented his intention to be bound by the release), and
Sletten then filed the anti-SLAPP motion seeking dismissal of plaintiffs' state court
action. (Id. at p. 87.)
The Navellier court found the first prong of the anti-SLAPP statute was satisfied
because plaintiff's claims for breach of contract and fraud "arose from" protected
activities, reasoning:
"Examination of the relevant documents reveals that each of
Sletten's acts (or omissions) about which plaintiffs complain falls
squarely within the plain language of the anti-SLAPP statute. In
alleging fraud, . . . plaintiffs complain about Sletten's alleged
negotiation, execution, and repudiation of the Release. . . . Sletten's
negotiation and execution of the Release, therefore, involved
'statement[s] or writing[s] made in connection with an issue under
consideration or review by a . . . judicial body' (§ 425.16, subd.
(e)(2)), i.e., the federal district court, and his arguments respecting
the Release's validity were 'statement[s] or writing[s] made before a
. . . judicial proceeding' (id., subd. (e)(1)), i.e., the federal action.
"In alleging breach of contract, plaintiffs complain about Sletten's
having filed counterclaims in the federal action. Sletten, plaintiffs
argue, 'counterclaimed for damages to recover money for the very
claim he had agreed to release a year earlier' and 'was sued for that
act.' A claim for relief filed in federal district court indisputably is a
'statement or writing made before a . . . judicial proceeding'
(§ 425.16, subd. (e)(1)).
"The record thus establishes . . . that [plaintiffs' state court] action is
based on acts Sletten took 'in furtherance of [his] right of petition or
free speech under the United States or California Constitution in
connection with a public issue' (§ 425.16, subd. (b)(1)), as that
phrase is defined in the anti-SLAPP statute (see id., subd. (e)). . . .
Sletten is being sued because of the affirmative counterclaims he
filed in federal court. In fact, but for the federal lawsuit and Sletten's
alleged actions taken in connection with that litigation, plaintiffs'
present claims would have no basis. This action therefore falls
squarely within the ambit of the anti-SLAPP statute's 'arising from'
prong." (Navellier, supra, 29 Cal.4th at p. 90.)
15
The decision in Navellier concluded the anti-SLAPP statute applied because the
genesis of the underlying obligation was in furtherance of litigation activities (the
negotiation and execution of a release of litigated claims) and the alleged breach was
premised exclusively on actions taken in furtherance of litigation activities because, "but
for the federal lawsuit and Sletten's alleged actions taken in connection with that
litigation, plaintiffs' present claims would have no basis." (Navellier, supra, 29 Cal.4th at
p. 90.) In contrast, here the genesis of the underlying obligation sued on by plaintiffs was
the fiduciary obligations that arose and were allegedly breached before any litigation
activities were undertaken (see Moore v Shaw (2004) 116 Cal.App.4th 182, 197 [anti-
SLAPP statute inapplicable where alleged misconduct occurred years before litigation
initiated]), rendering Navellier inapposite.
B. The "Probable Success" Prong
Because Shea has not carried its burden of showing the claims asserted by
plaintiffs arose from protected activity, we need not and do not reach the secondary
inquiry of whether plaintiffs satisfied the burden of showing probable success on the
merits. (Moore v Shaw, supra, 116 Cal.App.4th at p. 197; Hylton v. Frank E.
Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1275.)
C. Conclusion
We conclude the trial court correctly found Shea had not satisfied its initial burden
of showing plaintiffs' claims arose from protected activity and therefore correctly denied
Shea's motion to strike the complaint under the anti-SLAPP law.
16
DISPOSITION
The order is affirmed. Plaintiffs are entitled to costs on appeal.
McDONALD, J.
WE CONCUR:
NARES, Acting P. J.
HALLER, J.
17
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TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-10-00711-CV
Rita Murdock, Appellant
v.
Trisun Healthcare, LLC d/b/a Park Place Health Center, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
NO. D-1-GN-07-003108, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING
MEMORANDUM OPINION
In this case, we must decide whether appellee Trisun Healthcare, LLC d/b/a Park
Place Health Center (“Trisun”), the defendant in the underlying proceeding, may compel its
employee appellant Rita Murdock (“Murdock”), plaintiff below, into arbitration based: (1) solely
on an acknowledgment of arbitration agreement form signed by Murdock without evidence of the
contents of the arbitration agreement; or in the alternative, (2) on an arbitration agreement between
Murdock and her former employer PM Texas Leasing Company, LLC (“PM Leasing”)—an alleged
affiliate of Trisun. The trial court found there was a binding arbitration agreement between
Murdock and Trisun and that Trisun was a party to the arbitration agreement. We reverse,
concluding that Trisun failed to meet its burden of proving a valid arbitration agreement covering
the claims at issue.
BACKGROUND
On April 21, 2003, PM Leasing hired Murdock to work as a nursing assistant at
Park Place Care Center located in Georgetown, Texas. PM Leasing employed all nonprofessional
staff employees for the facility, and another entity, Trisun,1 employed all professional and licensed
staff. As a condition of her employment, Murdock signed a binding arbitration agreement with
PM Leasing (“PM Leasing Agreement”).
Prior to an alleged workplace injury occurring on September 28, 2005, the parties
agree Murdock became a Trisun employee—although the exact date of her employment is not
revealed by the record. On August 17, 2005, approximately six weeks prior to her injury, Murdock
attended a meeting at which Trisun informed its employees that it had elected not to purchase
workers’ compensation insurance and was instead implementing the Trisun Healthcare Associate
Injury Protection Plan (“Plan”). Murdock signed an acknowledgment form (“Acknowledgment
Form”) acknowledging she attended the meeting and received personal copies of a summary plan
description book, highlights brochure, and arbitration agreement. Although the Acknowledgment
Form notes Murdock’s acceptance of the Plan’s arbitration agreement, the documents Murdock
acknowledges receiving at the announcement meeting—including the arbitration agreement,
summary plan description book, and highlights brochure—are not included in the record, and the
Acknowledgment Form itself does not summarize or provide the terms of the Plan’s arbitration
agreement, reference the prior PM Leasing Agreement, or provide the effective date for the Plan.
1
Trisun was formerly known as PM Texas Management Company, LLC.
2
On September 18, 2007, Murdock brought suit against Trisun for her workplace
injuries alleging negligence and vicarious liability for the negligence of Trisun employees. Trisun
filed a motion to compel arbitration with the trial court alleging it was entitled to enforce the
PM Leasing Agreement as a party or third-party beneficiary because it was an affiliate of
PM Leasing. Trisun also noted that it had presented Murdock with the Plan’s arbitration agreement
at the announcement meeting and attached the Acknowledgment Form to its motion to compel.
Trisun, however, conceded that Murdock had not signed the arbitration agreement and provided
no evidence of the agreement’s contents.
At the hearing on the motion to compel, neither party presented evidence nor
requested an evidentiary hearing. The trial court granted Trisun’s motion to compel, finding that the
“arbitration agreement” between Murdock and Trisun was “a binding agreement to arbitrate” and
that Trisun was “a party to the arbitration agreement.” Murdock appeals from the trial court’s
judgment confirming the arbitration award. On appeal, Murdock argues: (1) Trisun failed to prove
the existence of a direct arbitration agreement between Murdock and Trisun covering the claims at
issue, and (2) Trisun cannot enforce the PM Leasing Agreement as a party or third-party beneficiary.
We agree.
STANDARD OF REVIEW
The trial court’s order granting Trisun’s motion to compel arbitration does not specify
whether the trial court based its ruling on the PM Leasing Agreement or the Plan’s arbitration
agreement referenced in the Acknowledgment Form. Whether a valid and enforceable arbitration
agreement exists between Murdock and Trisun is a legal question subject to de novo review.
3
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003). “We will affirm the trial-court
judgment if it is proper on any basis supported by evidence.” Ely v. Briley, 959 S.W.2d 723, 726
(Tex. App.—Austin 1998, no pet.). Because Trisun attached both the Acknowledgment Form and
the PM Leasing Agreement to its motion to compel, we will review both to determine whether either
alleged arbitration agreement supports the judgment.
Under the Federal Arbitration Act (FAA),2 a party seeking to compel arbitration
must establish (1) there is a valid arbitration agreement, and (2) the claims in dispute fall within
the agreement’s scope. In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005). A
motion to compel arbitration is similar to a motion for partial summary judgment and subject to the
same evidentiary standards. In re Jebbia, 26 S.W.3d 753, 757 (Tex. App.—Houston [14th Dist.]
2000, orig. proceeding); see also Brozo v. Shearson Lehman Hutton, Inc., 865 S.W.2d 509, 511
(Tex. App.—Corpus Christi 1993, no writ) (“Our task, then, is to construe all evidence, reasonable
inferences, and doubt against the judgment of the trial court, which had construed every reasonable
presumption in favor of the arbitration award.”). To compel arbitration, the trial court must first
determine as a matter of law that the parties have agreed to arbitrate. Jebbia, 26 S.W.3d at 756–57
(citing Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 269 (Tex. 1992)).
The burden of establishing the existence of an arbitration agreement is generally
evidentiary. See, e.g., In re Koch Indus., Inc., 49 S.W.3d 439, 444 (Tex. App.—San Antonio 2001,
orig. proceeding) (“The party seeking arbitration has the initial burden to present evidence of an
2
Although Murdock opposes arbitration generally, she does not contest application of the
Federal Arbitration Act.
4
arbitration agreement.”). The party moving to compel arbitration “must present complete summary
proof of his case in chief” proving the existence of an arbitration agreement covering the claims at
issue. Jebbia, 26 S.W.3d at 757. If the movant’s summary proof “intrinsically raises issues about
the procedural enforceability of the agreement, the movant’s summary proof should include any
evidence that resolves those issues without creating an issue of material fact.” Id.; see also Weekley
Homes, Inc. v. Jennings, 936 S.W.2d 16, 18 (Tex. App.—San Antonio 1996, writ denied). No
presumption of arbitrability arises until after the court has found there is an enforceable arbitration
agreement. Jebbia, 26 S.W.3d at 757; J.M. Davison, Inc., 128 S.W.3d at 227. Instead, we apply state
contract law principles to determine whether a valid arbitration agreement exists. J.M. Davison, Inc.,
128 S.W.3d at 227.
If the party seeking arbitration carries its initial burden, the burden then shifts to the
party resisting arbitration to present evidence on its defenses to the arbitration agreement. Id. If the
movant has proven there is an arbitration agreement as a matter of law, a presumption arises that all
disputed issues between the parties must be arbitrated. Jebbia, 26 S.W.3d at 758. But, if the party
alleging an arbitration agreement cannot prove as a matter of law that an arbitration agreement
exists, “it must seek an evidentiary hearing to compel arbitration.” Id.; In re Bunzl USA, Inc., 155
S.W.3d 202, 211 (Tex. App.—El Paso 2004, orig. proceeding).
DISCUSSION
A. Does the Acknowledgment Form alone establish the existence of a valid arbitration
agreement between Murdock and Trisun covering the claims at issue?
To be entitled to compel arbitration under the FAA, Trisun had the initial burden of
establishing as a matter of law the existence of a valid arbitration agreement. In re FirstMerit Bank,
5
N.A., 52 S.W.3d 749, 753 (Tex. 2001); Jebbia, 26 S.W.3d at 757. For an employer—like Trisun—to
establish a valid arbitration agreement, it must prove that its employee: (1) received notice of the
employer’s arbitration policy and (2) accepted it. In re Dallas Peterbilt, Ltd., 196 S.W.3d 161, 162
(Tex. 2006). In order to establish notice, an employer “must prove that he unequivocally notified
the employee of definite changes in employment terms.” Hathaway v. General Mills, Inc., 711
S.W.2d 227, 299 (Tex. 1986). An employee has notice of an arbitration agreement if she has
knowledge of both the terms of the policy and the certainty of their imposition. Id. When determining
whether an employee received notice of an arbitration agreement, we are to consider all
communications between the employer and employee. Dallas Peterbilt, Ltd., 196 S.W.3d at 162.
If an employer proves that it has unequivocally notified the employee of the terms of the arbitration
policy, the employee’s continuing employment will constitute acceptance of the terms as a matter
of law. In re Halliburton, 80 S.W.3d 566, 568 (Tex. 2002).
Based on the record before us, we cannot conclude that Trisun unequivocally proved
as a matter of law that it provided Murdock with notice of the terms of the Plan’s arbitration
agreement and the certainty of their imposition. Because Trisun did not attach the Plan’s arbitration
agreement to its motion to compel, it had the burden of otherwise establishing that it provided
Murdock with notice of the terms of the agreement. Trisun argues the Acknowledgment Form alone
establishes a valid arbitration agreement between the parties covering the claims at issue. While we
recognize that an acknowledgment form may incorporate the terms of a referenced arbitration
agreement, the arbitration agreement referenced in the Acknowledgment Form is not in the record,
and as such, Trisun cannot rely on it to establish notice. Further, the Acknowledgment Form does
6
not reference or acknowledge the prior PM Leasing Agreement.3 As such, despite Trisun’s assertions
to the contrary, the terms of the PM Leasing Agreement are not incorporated into the Acknowledgment
Form and cannot establish notice.4
We further recognize that a summary of an arbitration policy may convey notice to
an employee when the policy’s material elements are included in the summary. See, e.g, Weekley
Homes, L.P. v. Rao, 336 S.W.3d 413, 418 (Tex. App.—Dallas 2011, pet. denied) (“Notice of an
agreement to arbitrate can be effectively conveyed to an employee by a document that only
summarizes a Dispute Resolution Problem, it is not necessary that the employee receive the
complete policy.”). But the Acknowledgment Form does not provide a summary of the material
elements of the policy. Indeed, the Acknowledgment Form does not notify Murdock of any of the
terms of the Plan’s arbitration agreement. Blatantly absent from the Acknowledgment Form is any
indication that arbitration is the exclusive method for resolving disputes, notice as to what claims
are covered by the agreement, or an effective date for the Plan. Cf. In re Dillard Dep’t Stores, Inc.,
198 S.W.3d 778, 780 (Tex. 2006) (acknowledgment of arbitration agreement form provided sufficient
notice when “acknowledgment form briefly explained Dillard’s arbitration policy, stated an effective
3
Trisun attached to its motion to compel an affidavit from a Trisun employee alleging Trisun
did not require Murdock to sign the Plan’s arbitration agreement because it was “substantially
similar” to the PM Leasing Agreement. Without further evidence specifying which terms in the
policies were identical or substantially similar, Trisun cannot rely on this general statement to
establish the terms of the Plan’s arbitration agreement.
4
Throughout its brief, Trisun mistakenly conflates the issues presented by the Plan’s arbitration
agreement referenced in the Acknowledgment Form and the PM Leasing Agreement. The
Acknowledgment Form does not in any way reference or acknowledge the PM Leasing Agreement
Murdock entered into with her prior employer. The issue of whether Trisun established a direct
arbitration agreement with Murdock based on the Plan’s arbitration agreement is distinct and wholly
separate from the issue of whether Trisun can enforce the PM Leasing Agreement.
7
date of August 1, 2000, and conspicuously warned that employees were deemed to accept the policy
by continuing their employment”); Halliburton, 80 S.W.3d at 568 (notice sufficient when it informed
employee that binding arbitration was designated as the exclusive method for resolving all disputes,
stated effective date, and informed employees they would accept arbitration provision by continuing
work after specified date); see also HSS Sys., L.L.C v. Lucan, No. 03-10-00761-CV, 2011 WL
2297716, at *4 (Tex. App.—Austin June 9, 2011, no pet.) (mem. op.) (concluding employer’s
brochure did not convey sufficient notice of arbitration when it did not “clearly communicate the
mandatory nature of the arbitration policy”).
The absence of these material terms raises issues about the existence of a mandatory
arbitration policy effective at the time of Murdock’s injury covering the claims at issue. Trisun’s
summary proof does not include any evidence that resolves those issues, such as evidence of
communications occurring at the Plan announcement meeting notifying Murdock of the material
terms of the Plan or other proof of the contents of the referenced summary plan description book,
highlights brochure, or arbitration agreement. Trisun failed to establish notice as a matter of law and
did not request an evidentiary hearing. See Bunzl USA, Inc., 155 S.W.3d at 211 (“If [the movant]
found itself unable to establish, as a matter of law, that the parties intended to be bound regardless
of whether the contract was signed, it should have requested an evidentiary hearing.”). As such, the
record was insufficient to compel arbitration based on the Acknowledgment Form.
Even if we were to conclude that Trisun established a valid arbitration agreement,
we cannot conclude it established that the Plan’s arbitration agreement covered the claims at issue.
Kellogg Brown & Root, Inc., 166 S.W.3d at 737. The Acknowledgment Form does not state what
8
claims are covered, and Trisun provided no evidence of what claims were covered by the Plan’s
arbitration agreement. Without such proof, we conclude—based on the Acknowledgment Form—
Trisun failed to establish as a matter of law a valid arbitration agreement covering the claims at issue.5
B. Can Trisun enforce the PM Leasing Agreement as a party or third-party beneficiary?
After concluding Trisun did not establish a direct arbitration agreement with Murdock
under the Acknowledgment Form, we must now determine whether Trisun—as an alleged affiliate
of Murdock’s former employer—can enforce the PM Leasing Agreement.6 It is undisputed that
Murdock’s claims fall within the scope of the PM Leasing Agreement. At issue is whether Trisun,
a party not expressly identified in the Agreement, may compel arbitration.
The initial burden of the party moving for arbitration to establish the existence of a
valid agreement includes “proving the entity seeking to enforce the arbitration agreement was a
5
Trisun additionally asserts that Murdock is estopped from denying the Plan’s arbitration
agreement because she received benefits under the Plan. Before the acceptance of benefits can be
said to trigger estoppel, it must be shown that the benefits were accepted with “knowledge of all
material facts.” Frazier v. Wynn, 472 S.W.2d 750, 753 (Tex. 1971) (“[T]here can be no ratification
or estoppel from acceptance of the benefits by a person who did not have knowledge of all material
facts.”). Trisun did not submit evidence showing Murdock received benefits under the Plan or that
the benefits were accepted with knowledge of all material facts—including the existence of a binding
arbitration agreement covering the claims at issue. As such, we overrule this issue.
6
Trisun contends we lack jurisdiction to determine this issue because it is reserved for the
arbitrator under the terms of the PM Leasing Agreement. The PM Leasing Agreement provides that
“[a]ny matter covered under this Agreement or concerning the legality or interpretation of this
Agreement shall be heard and decided under the provisions and authority of the Federal Arbitration
Act” (“FAA”). When the existence of an arbitration agreement is challenged under the FAA, it is
generally a matter for the court to decide and not the arbitrator. In re Weekley Homes, L.P., 180
S.W.3d 127, 130 (Tex. 2005). Whether a third party to an arbitration agreement, like Trisun, can
compel arbitration questions the existence of a valid arbitration agreement between specific parties
and is therefore a gateway matter for the court to decide. Id; In re Rubiola, 334 S.W.3d 220, 224
(Tex. 2011).
9
party to it or had the right to enforce the agreement notwithstanding.” Mohamed v. Auto Nation USA
Corp., 89 S.W.3d 830, 836–38 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (successor employer
did not meet initial burden of showing arbitration agreement it could enforce as non-signatory). In
determining who may enforce an arbitration agreement, we do not resolve doubts or indulge a
presumption in favor of arbitration “because the purpose of the FAA was to make arbitration
agreements as enforceable as other contracts, not more so.” Kellogg Brown & Root, Inc., 166 S.W.3d
at 738. Instead, we apply ordinary principles of state contract law to determine who may enforce an
arbitration agreement under the FAA. Id.; In re Rubiola, 334 S.W.3d 220, 224 (Tex. 2011). Under
state contract law, the question of who may enforce an agreement “is ultimately a function of
the intent of the parties, as expressed in the terms of the agreement.” Rubiola, 334 S.W.3d at 224
(quoting Bridas S.A.P.I.C. v. Government of Turkm., 345 F.3d 347, 362 (5th Cir. 2003)).
After careful review of the PM Leasing Agreement and application of state contract
law principles discussed below, we conclude that—under the unambiguous language of the
Agreement—Trisun did not establish as a matter of law that it was entitled to enforce the PM
Leasing Agreement. An arbitration agreement with one corporation—unless the parties expressly
intend otherwise—is generally not enforceable by any other corporate affiliates, and the parties to
the PM Leasing Agreement, Murdock and PM Leasing, did not express an intent to include Trisun
as a party or otherwise confer benefits on Trisun. As such, Trisun did not establish it was entitled
to enforce the PM Leasing Agreement.
Is Trisun a party to the PM Leasing Agreement?
First, we address Trisun’s claim that it is entitled to compel arbitration as a party to
the PM Leasing Agreement. Parties to a contract are presumed to be contracting for themselves
10
only, and an arbitration contract with one corporation is generally not enforceable by any other
corporate affiliates.7 See In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185, 191 (Tex. 2007) (“[A]
contract with one corporation—including a contract to arbitrate disputes—is generally not a contract
with any other corporate affiliates.”); In re Kaplan Higher Educ. Corp., 235 S.W.3d 206, 210 (Tex.
2007) (“We emphasize again today that arbitration clauses do not automatically cover all corporate
agents or affiliates.”). Parties to an arbitration agreement may, however, expressly grant corporate
affiliates the right to enforce their arbitration agreement as parties. Rubiola, 334 S.W.3d at 222.
With regard to the question of who may enforce the PM Leasing Agreement,
Murdock and PM Leasing expressed their intent as follows:
This Agreement to resolve claims by arbitration is mutually binding upon
both me [Murdock] and PM Texas Leasing, Co., LLC and Sulik Healthcare Services
Inc. (hereinafter referred to as the “Company”) and any entity owned or controlled
by Pete Sulik. The following contains the terms and conditions of the binding
Arbitration Agreement which I agree to entirely.
I agree to arbitrate and resolve any and all disputes between the Company,
affiliated entities and myself. I understand that the consideration for this Agreement
is my employment, or continued employment, with the Company and the different
benefits that go along with employment with the Company, including the promises
and commitment made in this Agreement. I understand that the purpose of this
Agreement is to provide both the Company and myself a way in which claims or
disputes must be resolved by binding arbitration rather than litigation.
In construing the PM Leasing Agreement, we must first determine whether it is
possible to enforce the contract as written, without resort to parol evidence. J.M. Davidson, Inc.,
7
Trisun does not argue that it is entitled to enforce the PM Leasing Agreement as a
successor-in-interest to PM Leasing or submit evidence of a corporate assignment. See Mohamed
v. Auto Nation USA Corp., 89 S.W.3d 830, 836–37 (Tex. App.—Houston [1st Dist.] 2002, no pet.).
11
128 S.W.3d at 229. “An unambiguous contract will be enforced as written, and parol evidence
will not be received for the purpose of creating an ambiguity or to give the contract a meaning
different from that which its language imports.” David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450
(Tex. 2008). Only where a contract is ambiguous may a court consider the parties’ interpretation
and admit extraneous evidence to determine the true meaning of the instrument. Id. A contract is
unambiguous if it can be given a definite or certain legal meaning and does not become ambiguous
simply because the parties advance conflicting interpretations. J.M. Davidson, Inc., 128 S.W.3d
at 229; Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996).
“Ultimately, courts must enforce contract terms as written and may not rewrite contracts or add
to their language under the guise of interpretation.” Weaver v. Jamar, 383 S.W.3d 805, 811 (Tex.
App.—Houston [14th Dist.] 2012, no pet.).
We conclude Trisun is not a party under the unambiguous language of the PM
Leasing Agreement. The first paragraph of the PM Leasing Agreement defines the parties to the
Agreement as: (1) Murdock, (2) PM Leasing, (3) Sulik Healthcare Services Inc., and (4) any entity
owned or controlled by Pete Sulik. As Trisun does not assert or present evidence that it is an entity
owned or controlled by Pete Sulik, it did not establish that it was a party. We recognize that parties
to an arbitration agreement may expressly provide that certain corporate affiliates are parties to
an agreement. Rubiola, 334 S.W.3d at 220. For example, if an agreement broadly defines the
term “parties” to include “affiliates of any party to the agreement,” then those designated affiliates
would be entitled to compel arbitration as parties. Id. at 223 (holding non-signatory officers and
representatives of signatory mortgage company entitled to compel arbitration when arbitration
12
agreement broadly defined “parties” to include “officers and representatives of any party”). But the
PM Leasing Agreement does not provide a broad definition of “parties” sufficient to encompass
Trisun or otherwise designate Trisun as a party to the Agreement.
Murdock’s agreement, in the second paragraph, to arbitrate disputes against “affiliated
entities” does not add additional parties to the Agreement. Rather, the second paragraph defines the
scope of the Agreement among the identified parties, and the term “affiliated entities” merely refers
to those affiliated entities defined in the first paragraph “as any entity owned or controlled by Pete
Sulik.” See J.M. Davidson, Inc., 128 S.W.3d at 229 (construing contract in its entirety to determine
true intention of parties); Western Reserve Life Ins. v. Meadows, 261 S.W.2d 554, 557 (Tex. 1953)
(noting terms in contracts are given plain, ordinary, and generally accepted meaning unless contract
itself shows particular definitions are used to replace that meaning). In the second paragraph, Murdock
agrees to arbitrate only with those parties previously identified in the first paragraph.
Trisun, however, argues the term “affiliated entities” in the second paragraph expresses
an intent by the parties to grant “any affiliated entities of PM Leasing” the right to enforce the
Agreement. Trisun’s argument construes the term “affiliated entities” in isolation from the rest of
the Agreement. A contract must be construed in its entirety to determine the true intention of the
parties. J.M. Davidson, Inc., 128 S.W.3d at 229. In attempting to ascertain the meaning of the
words used in a contract, it is not proper to rely only upon a single clause or paragraph. Id. Rather,
it is the duty of the Court to construe the contract as an entire instrument and “to consider each
part with every other part so that the effect and meaning of one part on any other part may be
determined.” Steeger v. Beard Drilling, Inc., 371 S.W.2d 684, 688 (Tex. 1963). This construction
“makes clear the intent of the parties and the extent to which they intended to be bound.” Id.
13
When the PM Leasing Agreement is construed in its entirety, it is clear Murdock
agreed to arbitrate with only those affiliates owned or controlled by Pete Sulik and not, as Trisun
asserts, any and all affiliates. In the first paragraph, Murdock agrees to enter into a binding arbitration
agreement with two named parties: PM Leasing and Sulik Healthcare Services, Inc. With regard
to unnamed parties, Murdock agrees in the first paragraph to enter an agreement only with those
unnamed parties “owned or controlled by Pete Sulik.” Any contrary construction requiring Murdock
to arbitrate with other unnamed parties that are not owned or controlled by Pete Sulik—such as
Trisun—renders the parties’ intent in the first paragraph nugatory. See Reilly v. Rangers Mgmt., Inc.,
727 S.W.2d 527, 529 (Tex. 1987) (contractual language should be given its plain meaning unless
it appears that the intention of the parties would thereby be defeated); R & P Enters. v. LaGuarta,
Gavrel & Kirk, Inc., 596 S.W.2d 517, 518–19 (Tex. 1980) (court should favor an interpretation that
gives effect to all provisions of the contract so that none will be rendered meaningless and the
primary purpose of the agreement and intent of the parties will be effectuated). Accordingly, the
PM Leasing Agreement can only be reasonably interpreted as granting only those unnamed entities
owned or controlled by Pete Sulik—not Trisun—the right to compel arbitration.
Trisun further argues that the parties did not define the term “affiliated entities” in
the Agreement, and the Court should look to Chapter 74 of the Texas Civil Practice & Remedies
Code (“Chapter 74”) to define the term. If a disagreement about the use and meaning of language
used in a contract arises, the court should consider how a reasonable person would have used and
understood the language, by pondering the circumstances surrounding the contract’s negotiation and
by considering the purposes which the parties intended to accomplish by entering into the contract.
See Manzo v. Ford, 731 S.W.2d 673, 676 (Tex. App.—Houston [14th Dist.] 1987, no writ).
14
We cannot conclude that a reasonable person entering the PM Leasing Agreement would have
understood the term “affiliated entities” to be defined under Chapter 74—a statute addressing
medical liability in tort—when such statutory provisions were not addressed in the Agreement nor
in effect at the time the contract was executed. See Tex. Civ. Prac. & Rem. Code Ann. § 74.001(a)(3)
(West 2011) (statute effective Sept. 1, 2003). As such, we decline to adopt Trisun’s proposed
definition for “affiliated entities” and cannot conclude Trisun is a party under the Agreement. See
also David J. Sacks, P.C., 266 S.W.3d at 450 (only where a contract is ambiguous may a court
consider the parties’ interpretation and admit extraneous evidence to determine the true meaning of
the instrument).
Is Trisun a third-party beneficiary to the PM Leasing Agreement?
We further conclude Murdock and PM Leasing did not express an intent to grant
Trisun the right to enforce the PM Leasing Agreement as a third-party beneficiary. A third-party
beneficiary may enforce an arbitration agreement to which it is not a party if the parties to the
contract “intended to secure a benefit to that third party and entered into the contract directly for
the third party’s benefit.” In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 677 (Tex. 2006). But
parties are presumed to be contracting for themselves only, and this presumption may be overcome
only if the intent to make someone a third-party beneficiary is “clearly written or evidenced in the
contract.” Bridas S.A.P.I.C., 345 F.3d at 362; see also South Tex. Water Auth. v. Lomas, 223 S.W.3d
304, 306 (Tex. 2007) (presumption against conferring third-party status on non-contracting parties).
There is no evidence in the PM Leasing Agreement that the parties intended to secure
a direct benefit for Trisun—an entity not mentioned or otherwise contemplated in the Agreement.
15
See MCI Telecomms. Corp. v. Texas Utils. Elec. Co., 995 S.W.2d 647, 651 (Tex. 1999) (“The
intention to contract or confer a direct benefit to a third party must be clearly and fully spelled out
or enforcement by the third party must be denied.”); Petula Assocs., Ltd. v. Dolco Packaging Corp.,
240 F.3d 499, 504 (5th Cir. 2001) (Under Texas law, courts “must enforce the unambiguous
language in a contract as written, and the applicable standard is the objective intent evidenced by the
language used, rather than the subjective intent of the parties.”). As such, we cannot conclude that
Trisun is a third-party beneficiary to the PM Leasing Agreement.
Under the unambiguous language of the PM Leasing Agreement, we conclude
Trisun is not entitled to compel arbitration as a party or third-party beneficiary. Accordingly, we
must enforce the contract terms as written and deny Trisun the right to compel arbitration.
CONCLUSION
Trisun failed to establish the existence of a binding arbitration agreement with
Murdock covering the claims at issue. For the foregoing reasons, we reverse the trial court’s judgment
confirming the arbitration award and remand for further proceedings consistent with this opinion.
__________________________________________
David Puryear, Justice
Before Justices Puryear, Rose, and Goodwin
Dissenting Opinion by Justice Rose
Reversed and Remanded
Filed: May 9, 2013
16
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534 F.2d 993
11 Fair Empl.Prac.Cas. 1450,11 Empl. Prac. Dec. P 10,633,12 Empl. Prac. Dec. P 11,091Boston M. CHANCE, and Louis C. Mercado, individually onbehalf of all others similarly situated,Plaintiffs-Appellees,v.The BOARD OF EXAMINERS AND the BOARD OF EDUCATION OF THECITY OF NEW YORK, et al., Defendants-Appellants,andCouncil of Supervisors and Administrators of the City of NewYork, Local 1, SASCO, AFL-CIO, Intervenor-Appellant.
Nos. 1112, 1251, Dockets 75-7161 to 75-7164.
United States Court of Appeals,Second Circuit.
Argued Aug. 11, 1975.Decided Jan. 19, 1976.On Rehearing May 17, 1976.
Kaye, Scholer, Fierman, Hays & Handler, New York City, for The Board of Examiners.
W. Bernard Richland, Corp. Counsel, New York City (L. Kevin Sheridan, Leonard Koerner, Leonard Bernikow, New York City, of counsel), for The Board of Education of the City of New York.
Max H. Frankle, Leonard Greenwald, New York City (Gretchen White Oberman, New York City, of counsel), for Council of Supervisors and Administrators of the City of New York, Local 1, SASCO, AFL-CIO.
Jack Greenberg, Deborah M. Greenberg, Elizabeth B. DuBois, Jeanne R. Silver, George Cooper, New York City, for plaintiffs-appellees.
Before OAKES, VAN GRAAFEILAND and MESKILL, Circuit Judges.
VAN GRAAFEILAND, Circuit Judge:
1
This is an appeal from an order of the United States District Court for the Southern District of New York which directed the Board of Education of the City of New York to "excess" supervisory personnel in accordance with a formula imposing racial quotas upon the excessing process. Excessing rules provide in brief that when a position in a school district is eliminated, the least senior person in the job classification used to fill that position shall be transferred, demoted or terminated. It is a system which recognizes the value of pedagogical experience and seniority, and its use is mandated by the New York Education Law1 and the Collective Bargaining Agreement between the Board of Education and the supervisors' union.2 We believe that the District Court erred in injecting into this plan a requirement for conformity to a racial quota formula, and we therefore reverse.
2
Fortunately for both reader and writer, we find it unnecessary to recount at length the history of this extended litigation. A summary of the proceedings which now bring the parties to our Court for the fourth time3 will suffice.
3
This civil rights class action was begun in 1970 for the purpose of correcting an underrepresentation of minorities in supervisory positions in the New York City school system. Employment qualification tests, one of the alleged causes of such disproportion, were thereafter invalidated by the District Court as not job-related; and an interim system of job assignment was created by court order, the details of which are spelled out in our 1974 decision. Because this interim plan provided in part that job assignment would precede licensing and that permanent appointment would follow on-the-job evaluation, it became necessary for the Board of Education to formulate new rules concerning date of appointment for excessing purposes. These rules, which were submitted to the District Court for approval, provided in substance that, in determining seniority for excessing purposes, supervisors would be considered appointed as of the date of their assignment.
4
As Judge Tyler graphically pointed out during one of the many arguments below, this lawsuit has been "like a conflagration that one puts out in one department and then suddenly a new fire breaks out somewhere else." It was not surprising, therefore, that this submission by the Board set new flames burning. Plaintiffs promptly opposed the use of any excessing rules on the ground that minority supervisors recently hired would have the least seniority. This prompted intervention by the Council of Supervisors and Administrators of the City of New York, Local 1, SASCO, AFL-CIO as the representative of all supervisory personnel, including those licensed and appointed prior to the court-ordered interim plan, those licensed and appointed pursuant to such plan and those assigned but not yet appointed. This Union opposed the use of racial quotas and supported the continued use of traditional excessing procedures. Amicus briefs were also filed by the New York City School Boards Association, Inc. whose interest lay in seeing that the powers and prerogatives of the thirty-two school districts within the New York system were not eroded by the court-created excessing plan.
5
Proposals and counterproposals followed closely upon each other until Judge Tyler handed down an order on November 22, 1974, adopting the racial quota concept. This order was amended on February 7, 1975, and it is the amended order which we are reviewing on this appeal. It provides in substance as follows:
6
1. All supervisors are to be divided into three groups: group A Blacks, group B Puerto Ricans and group C Others;
7
2. The percentage of supervisors making up each group is to be computed for each of the thirty-two districts and for the city-wide system;
8
3. Each district may place supervisors from group A or B on its intra-district excessing list only if the percentage of that group on the list does not exceed the percentage of that group in the district;
9
4. Each district may add excessed supervisors from group A or B to the city-wide, inter-district excessing list only if the percentage of that group on the list does not exceed the percentage of that group employed city-wide.
10
Although the order does not specifically so provide, the inevitable consequence of the foregoing provisions is that if racial quotas prevent the excessing of a Black or Puerto Rican, a white person with greater seniority must be excessed in his place.
11
Before the merits of the appeals taken by the Board of Education and the Council of Supervisors can be considered, several preliminary roadblocks raised by plaintiffs must first be removed. Plaintiffs contend that the appeals are not timely. They say that the order of February 7, 1975, merely clarified the order of November 22, 1974, and that therefore appeals should have been taken from the former, not the latter. We find no merit in this contention. Following the issuance of the November 22 order, the Board of Education requested a modification "concerning excessing." A hearing was held, and some modifications were made. We think that the Board's application, addressed sufficiently to the substance of the November order to require a contested rehearing, effectively transferred the mantle of finality from the November to the February order and that appeals from the latter order were therefore timely. Leishman v. Associated Electric Co., 318 U.S. 203, 63 S.Ct. 543, 87 L.Ed. 714 (1943); Sleek v. J. C. Penney Co., 292 F.2d 256 (3d Cir. 1961).
12
Plaintiffs also point out that the order appealed from will be in effect only until November 30, 1977, by which time "it is hoped" the situation regarding minority representation will have changed. Plaintiffs urge that we not concern ourselves, as an appellate court, with this short-term interim relief. In our 1974 decision, at page 825, we expressed concern about the length of time this litigation had remained in an unfinished state and the possibility that "the interim tail" would end up wagging the dog. Another year has passed; the lawsuit has not been terminated, and new orders continue to emerge. Those supervisors who may lose their jobs between now and November 30, 1977, will be little comforted by the knowledge that it was merely a temporary order that put them out of work. Where the basic rights of such innocent non-litigants are so substantially involved, we believe we should, as we have twice before, review what has been done.
13
We thus come to the main question on this appeal, viz.: does a facially neutral excessing plan, which operates on the concept of "last hired-first fired," discriminate against minorities who are disproportionately affected? We agree with the Courts of Appeals for the Third, Fifth and Seventh Circuits that the answer to this question must be "no." See Waters v. Wisconsin Steel Works of International Harvester Co., 502 F.2d 1309 (7th Cir. 1974), petition for cert. filed, 44 U.S.L.W. 3011 (Apr. 25, 1975); Jersey Central Power and Light Co. v. Local Union, 327, I.B.E.W., 508 F.2d 687 (3d Cir. 1975), petitions for cert. filed, 44 U.S.L.W. 3084 (Aug. 1, 1975), 44 U.S.L.W. 3207 (Sept. 24, 1975); Watkins v. Steel Workers Local No. 2369, 516 F.2d 41 (5th Cir. 1975).
14
Our brothers in the Third and Seventh Circuits have examined the legislative history of Title VII,4 and they are in accord that this Act was not intended to invalidate bona fide seniority systems. Waters, supra, 502 F.2d at 1318; Jersey Central, supra, 508 F.2d at 710. Our brothers in the Fifth Circuit say that "regardless of what that history may show as to Congressional intent concerning the validity of seniority systems as applied to persons who have themselves suffered from discrimination, there was an express intent to preserve contractual rights of seniority as between whites and persons who had not suffered any effects of discrimination." Watkins, supra, 516 F.2d at 48. All agree, as do we, that the non-remedial distortion of a seniority system through preferential treatment based solely upon race is a form of reverse discrimination specifically proscribed by Congress. Jersey Central, supra, 508 F.2d at 709; Waters, supra, 502 F.2d at 1319; Watkins, supra, 516 F.2d at 46. See also Local 189, United Papermakers v. United States, 416 F.2d 980, 994 (5th Cir. 1969), cert. denied, 397 U.S. 919, 90 S.Ct. 926, 25 L.Ed.2d 100 (1970).
15
That plaintiffs herein are proceeding under 42 U.S.C. §§ 1981,1983 does not render defendants' seniority system any more susceptible to attack. Congress has clearly placed its stamp of approval upon seniority systems in 42 U.S.C. § 2000e-2.5 Whether this section be considered a repeal by implication of any possible contrary construction of § 1981, or simply a statement of guiding legal principles, we agree with the court in Waters that "having passed scrutiny under the substantive requirements of Title VII, the employment seniority system . . . is not violative of 42 U.S.C. § 1981." Waters, supra, 502 F.2d at 1320, n. 4.
16
The relief fashioned by the court below was not designed to benefit only those affected by the employer's prior discriminatory conduct6 or to insure that the excessing program operated in a non-discriminatory manner. It was intended to insure that there would continue to be a specified quota of Blacks and Puerto Ricans employed in the New York City school system. Our limited approval of the use of racial hiring quotas in such cases as Bridgeport Guardians, Inc. v. Bridgeport Civil Service Commission, 482 F.2d 1333 (2d Cir. 1973), and Vulcan Society of the New York City Fire Department, Inc. v. Civil Service Commission, 490 F.2d 387 (2d Cir. 1973), is not authority for what the district court has done. We were concerned in those cases with discriminatory hiring practices, and the remedial relief which we approved concerned only hiring procedures. Because there is no claim that defendants' excessing practices are or have been discriminatory, we see no justification for changing them.
17
Moreover, the concern which we expressed in Kirkland v. New York State Department of Correctional Services, 520 F.2d 420 (2d Cir. 1975), about the "bumping" effect of a quota "upon a small number of readily identifiable" individuals finds equal cause for expression in the situation which now confronts us. We are advised that in some of the school districts employees will be excessed from groups containing as few as two or three persons. To require a senior, experienced white member of such a group to stand aside and forego the seniority benefits guaranteed him by the New York Education Law and his union contract, solely because a younger, less experienced member is Black or Puerto Rican is constitutionally forbidden reverse discrimination.7 Steele v. Louisville & Nashville R.R. Co., 323 U.S. 192, 209, 65 S.Ct. 226, 89 L.Ed. 173 (1944) (Murphy, J., concurring); Kirkland, supra, 520 F.2d at 429.
18
If a minority worker has been kept from his rightful place on the seniority list by his inability to pass a discriminatory examination, he may, in some instances, be entitled to preferential treatment not because he is Black, but because, and only to the extent that, he has been discriminated against. The "freedom now" and "rightful place" doctrines create constructive or fictional seniority to put minority employees in the approximate spot on the seniority list that they would have occupied had they not been the subject of discrimination. Local 189, United Papermakers v. United States, supra, 416 F.2d at 988. The former contemplates the displacement of white workers where necessary; the latter involves only the filling of vacancies. We have followed the "rightful place" doctrine to the extent of using plant seniority, instead of departmental seniority, where departmental discrimination has prevented or delayed the transfer of minority workers. United States v. Bethlehem Steel Corp., 446 F.2d 652 (2d Cir. 1971).8
19
There is disagreement among the Circuits as to how far these concepts should be carried in creating fictional dates of employment for minority workers. Cf. Franks v. Bowman Transportation Co., 495 F.2d 398 (5th Cir. 1974), cert. granted, 419 U.S. 1050, 95 S.Ct. 625, 42 L.Ed.2d 644 (1975), argued November 3, 1975, 44 U.S.L.W. 3273; Meadows v. Ford Motor Company, 510 F.2d 939 (6th Cir. 1975). Upon remand of this case, the District Court may find it unnecessary to await resolution of this dispute by the Supreme Court. The defendant Board of Education has indicated its willingness to accord constructive seniority to any minority supervisor who failed an examination since invalidated as discriminatory by giving him a date of appointment which is the mean appointment date of those who passed the examination. We believe this offer of compromise which appears to be acceptable to the intervening Union should have been adopted by the District Court.
20
A reversal of the order appealed from renders moot the controversy between the Board of Education and the community districts as to whether intra-district as well as inter-district racial quotas should be used and applied in the excessing process. We note that the New York Court of Appeals has specifically held that the Board of Education has the power to establish uniform City-wide excessing rules. Council of Supervisors and Administrators v. Board of Education, 35 N.Y.2d 861, 363 N.Y.S.2d 581, 322 N.E.2d 273 (1974) (mem.). Should the question of excessing authority vis-a-vis the community districts and the Board of Education again arise in this proceeding, we trust that the District Court will defer to the New York State courts' primary concern and expertise in this matter, in so far as it is feasible to do so.
21
Reversed and remanded for further proceedings in accordance with this opinion.
OAKES, Circuit Judge (dissenting):
22
To my mind the issues are both more simple and more complex than the majority states. They are more simple in that what we are here concerned with is the fashioning of equitable relief under 42 U.S.C. § 19811 as a remedy for past racially discriminatory practices. The relief ordered by the district court limits transfers and layoffs of black and Hispanic school supervisors who have only been hired or promoted to their jobs as supervisors since the abolition by court order of racially discriminatory qualifying examinations.2 This order seems to me to be one properly within the equitable power of the court as a device to protect the integrity of its remedial plan. It is true, however, that the percentage, or "quota," layoff limitation method of the district court was not the only permissible relief which could have been ordered. Were the only class involved that of persons, like the named plaintiff Chance, who were kept from their rightful place on the seniority list by their inability to pass the discriminatory examinations, I would agree with the majority that giving such persons "constructive seniority" effective as of the "mean appointment date" of those who passed the exam which the persons discriminated against had failed might very well be adequate and proper relief.3 But our case is more complex than this. There is a second class in the litigation before us which is composed of persons who like the named plaintiff Mercado, "have failed to apply for or take such supervisory examinations because they reasonably believed the supervisory examination system to be discriminatory and unrelated to job performance."4 These people, who comprise by far the largest portion of the plaintiffs in this case,5 are left wholly unprotected by the "constructive seniority" approach of the majority. Since I believe the district court has discretion to make a reasoned choice among those remedies which are available to effect relief for those who have been injured by the discriminatory exams, and since in the situation before us the use of layoff quotas by the district court was an attempt to do rough justice where perfect equity was not achievable, I must respectfully dissent.
23
This litigation was begun in September of 1970, challenging the examinations used to select principals and other supervisory personnel in the city school system on the basis that the examinations discriminated unconstitutionally against minority groups. It was brought under 42 U.S.C. §§ 1981, 1983, and not under Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq. But it is interesting to note that Section 703(h) of the latter, 42 U.S.C. § 2000e-2(h),6 by negative implication makes it an unlawful employment practice "for an employer to give and to act upon the results of" a "professionally developed ability test" where the test itself, its administration or action upon its results is "designed, intended or used to discriminate because of race. . . . " Assuming, as appellees argue, that even though Section 1981 and Title VII are independent, if overlapping, remedies, Johnson v. Railway Express Agency, 421 U.S. 454, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975), it is desirable nevertheless that the substantive law relating to what is discrimination be the same under both Section 1981 and Title VII. The provisions of Title VII are by no means inconsistent with, indeed they seem to compel, the original determination in this suit that the supervisory examinations were unconstitutionally discriminatory. Chance v. Board of Education (Chance I), 330 F.Supp. 203, 224 (S.D.N.Y.1971) (preliminary injunctive relief given), aff'd, 458 F.2d 1167 (2d Cir. 1972). Extensive negotiations and additional proceedings in the district court culminated in the entry on July 12, 1973, of a final judgment against the Board of Examiners. This order prohibited the continued implementation of the old discriminatory examination system, mandated the institution of an interim system for filling vacant positions and ordered the development of a permanent new selection system. These orders were again upheld by this court in Chance v. Board of Education (Chance II), 496 F.2d 820 (2d Cir. 1974).
24
Meanwhile, however, the Board of Education had directed community school boards to fill supervisory vacancies in accord with the "transfer list" provisions of the union contract. This resulted in giving priority to those supervisors who had acquired seniority with licenses obtained under the old discriminatory examination system. On December 27, 1973, Judge Mansfield, acting as district judge, held that "the transfer provisions of the (union) agreement, by giving a preference to senior supervisory personnel, violates our Orders." Recognizing that timing in the framing of equitable decrees seeking to remedy past discrimination is of the utmost importance, however, he was then extremely careful to say that
25
This interpretation should not be construed as permanently prohibiting the use of seniority as a basis for selection and appointment of applicants. Following the adoption of a permanent non-discriminatory system for the selection of supervisors in the New York City School System there will undoubtedly come a time when seniority among those selected under such a system can be appropriately recognized. To give preference to those appointed under a discriminatory testing system, however, which is the effect of the (union) agreement's transfer provisions, would be to reward the very discriminatory practices which we have outlawed.
26
No appeal was taken from this order and Judge Tyler, to whom the case was assigned, declined by order of February 25, 1974, to rescind or alter it. The union's appeal from Judge Tyler's February 25, 1974, order was dismissed as not appealable. Chance v. Board of Education (Chance III), 497 F.2d 919 (2d Cir. 1975).
27
In July, 1974, the Board of Education submitted proposed rules to govern "excessing" of supervisors. These would have required that persons whose positions are to be abolished, and those junior to them holding similar or lower positions, be relocated, demoted or terminated, as the case might be, in order of reverse seniority. Appellees opposed the rules on the basis that, like the transfer provisions of the union agreement, the proposed excessing rules would conflict with the remedial purposes of the orders affirmed in Chance II which had held the qualifying exam to be unlawful and had ordered development of a new selection system. After five hearings and assorted submissions Judge Tyler issued an order on November 22, 1974, which, in all material respects, is identical to the order of February 7, 1975, here under appeal. This order permits the use of seniority excessing rules only insofar as the proportion of blacks and Hispanics "excessed" does not exceed the proportion of black and Hispanic supervisors presently employed in each school district and the school system as a whole. His order was made effective retroactively to July 30, 1974, and prospectively until November 30, 1977.
28
On timely application of the Board of Education the order was modified in certain respects not material here on February 7, 1975. This appeal was brought from that order. I should add that I agree with the majority's view that the February order is final and appealable.
29
In evaluating the propriety of Judge Tyler's excessing quota order, it is necessary to consider three separate questions: first, whether the order is unconstitutional; second, whether the order is forbidden by statute under 42 U.S.C. § 2000e-2(h), see note 6 supra ; third, whether, if not prohibited by statutory or constitutional law, the order is within the equitable authority of the trial court. These issues will be discussed in order below.
30
I think the remedial relief afforded was constitutionally allowable for the reasons stated so well by my brother Mansfield, dissenting from the denial of rehearing en banc in Kirkland v. New York State Department of Correctional Services, Nos. 74-2116, 74-2258 (2d Cir. Dec. 10, 1975), slip op. 1003. I need add to his remarks only that it would have been constitutionally permissible, and I think also within the district court's powers, to base "excessing" on some principle other than racial percentage merit, constructive seniority, sharing of the available work or the like. Just as veterans' preferences permissibly reward those for service to their country, given hiring (or firing) preferences favoring those of a minority race (or I would add the female gender) who have been victimized by discrimination until a fair equality of treatment is achieved seem to me to be constitutionally proper. The purpose of the order is to protect, to a limited extent, the black or Hispanic teachers who have recently been made supervisors in retention of their employment, not because they are black or Hispanic but because they have previously been discriminated against by unconstitutional examinations. See Nickel, Preferential Policies in Hiring and Admissions: A Jurisprudential Approach, 75 Colum.L.Rev. 534, 555 (1975). See also Ely, The Constitutionality of Reverse Racial Discrimination, 41 U.Chi.L.Rev. 723, 727 (1974). But cf. Greenawalt, Judicial Scrutiny of "Benign" Racial Preference in Law School Admissions, 75 Colum.L.Rev. 559, 571-73 (1975). On the other side of the scale, the white supervisory personnel disadvantaged by the district court's order would not, it must be presumed from the decisions in Chance I and Chance II, supra, necessarily have gained their preferred place on the seniority ladder were it not for the fact that the qualifying examinations were discriminatory against nonwhites. Thus, they are not in the position, say, of a DeFunis whose superior qualifications are overlooked in favor of less qualified minority students; the white supervisory personnel whose seniority is entrenched by the majority (subject, perhaps, to constructive seniority for the Chance class) have been the very people who have benefited from the school system's prior discriminatory policies. The suggestion that bumping seniors is "constitutionally forbidden reverse discrimination" may find support in dictum in Kirkland v. New York State Department of Correctional Services, 520 F.2d 420, 428-29 (2d Cir. 1975). It may be that it can also find support elsewhere. See, e. g., DeFunis v. Odegaard, 416 U.S. 312, 333, 343-44, 94 S.Ct. 1704, 40 L.Ed.2d 164 (1974) (Douglas, J., dissenting). I find it a little ironic, however, that the Supreme Court authority cited by the majority is Mr. Justice Murphy's concurring opinion in Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192, 209, 65 S.Ct. 226, 235, 89 L.Ed. 173 (1944), where the Court construed the Railway Labor Act to require a railroad brotherhood to represent all members of the craft union and not to discriminate against a Negro member on account of his race. Justice Murphy's remark that "(t)he Constitution voices its disapproval whenever economic discriminatio n is applied under authority of law against any race, creed or color," id., is merely a statement of the protective nature of the shield provided to minorities by the Fourteenth Amendment it should not be applied out of context as a sword to prevent remedial relief, in the form of affirmative action, for those who have suffered the discrimination which the Amendment condemns. The powers of a court of equity to eliminate the effect of past discrimination are broad, Louisiana v. Black, 380 U.S. 145, 154, 85 S.Ct. 817, 13 L.Ed.2d 709 (1965), and seem clearly to encompass the affirmative, remedial action ordered here, as recognized in United States v. Montgomery County Board of Education, 395 U.S. 225, 236, 89 S.Ct. 1670, 23 L.Ed.2d 236 (1969), and Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1, 25, 91 S.Ct. 1267, 28 L.Ed.2d 554 (1971). See also Kirkland v. New York State Department of Correctional Services, Nos. 74-2116, 74-2258 (2d Cir. Dec. 10, 1975), slip op. at 1006-10 (Mansfield, J., dissenting from denial of rehearing en banc) (citing cases from our court and seven other circuits).
31
Complaints of reverse discrimination have to be evaluated constitutionally with careful regard to the facts of each case, since any affirmative action to correct past discriminatory practices may result in what seems to be unfairness to those who have benefited by those practices. The complaint of "reverse discrimination" should not be allowed to obscure the need for action to be taken to reverse, or negate, the effects of unlawful discrimination found to exist, as in this case. The focus of our concern should be upon whether there is an accurate method of redressing past discrimination in such a way as to benefit those who have been discriminated against only at the expense, if at all, of those who gained undue advantage by the discrimination. If an accurate method cannot be had, then we may examine whether some rougher form of relief, as for instance a percentage preference, achieves a measure of fair redress at no undue expense.
32
Before reaching these last two questions it is necessary here to respond to the majority's view that Judge Tyler's order was forbidden as a matter of law by Section 703(h) of Title VII of the Civil Rights Act, 42 U.S.C. § 2000e-2(h), note 6 supra. In this regard it may be conceded that the majority appears to be upon firmer ground than in its constitutional argument. The majority relies upon Waters v. Wisconsin Steel Works of International Harvester Co., 502 F.2d 1309 (7th Cir. 1974), petition for cert. filed, 43 U.S.L.W. 3505 (U.S. Mar. 18, 1975); Jersey Central Power & Light Co. v. Electrical Workers Local 327, 508 F.2d 687 (3d Cir. 1975), petition for cert. filed, 44 U.S.L.W. 3084 (U.S. Aug. 1, 1975), and Watkins v. Steel Workers Local 2369, 516 F.2d 41 (5th Cir. 1975). The Waters and Jersey Central courts have each read the legislative history of Title VII as indicating that layoffs made pursuant to plantwide seniority systems that operate in a facially neutral manner are pursuant to "bona fide" seniority plans and cannot, therefore, constitute unlawful employment practices under Title VII. See 42 U.S.C. § 2000e-2(h); note 6 supra. They reached this result even where the result of the seniority plans was to entrench the effect of prior discrimination against minority workers. See Jersey Central, supra, 508 F.2d at 710; Waters, supra, 502 F.2d at 1317; but see id. at 1320. Other courts and commentators have been more circumspect, however, regarding the fair implications of the legislative history of Title VII. Judge Van Dusen, concurring in Jersey Central only for the purpose of agreeing in the necessity of a remand for further findings, expressly disagreed with the Jersey Central majority's reading of Title VII. He found "persuasive the writers who contend that the legislative history indicates that Congress, in enacting Title VII, did not intend to preclude remedies altering plant seniority which perpetuates discrimination." 508 F.2d at 712 (emphasis added), citing, e. g., Cooper & Sobol, Seniority and Testing Under Fair Employment Law: A General Approach to Objective Criteria of Hiring and Promotion, 82 Harv.L.Rev. 1598, 1629 (1969); Comment, The Inevitable Interplay of Title VII and the National Labor Relations Act: A New Role for the NLRB, 123 U.Pa.L.Rev. 158, 163-64 (1974). See also Note, Last Hired, First Fired Layoffs and Title VII, 88 Harv.L.Rev. 1544, 1552 (1975) (legislative history of Title VII inconclusive as to scope of protection intended for "bona fide" seniority systems). This reading of Title VII is, in fact, suggested by the plain language of 42 U.S.C. § 2000e-2(h), which does no more than to declare that bona fide seniority systems, cannot, of themselves, constitute an unlawful employment practice. This provision stops far short of stating that where, as in the present case, unlawful employment practices other than bona fide seniority systems have been found to have resulted in discrimination against minority workers, courts may not, in the exercise of their remedial authority alter the effect such seniority plans may have in entrenching the results of the prior discrimination.7 The courts have already recognized this remedial-subst antive law distinction, at least by necessary implication. Where a facially neutral departmental seniority system has the effect of discriminating, in the layoff situation, against minority employees who have recently transferred into that department as a result of the employer's termination of prior unlawful practices, the courts have all recognized that giving constructive, or "plantwide," seniority as a means of protecting the transferred employees is a proper remedial order. See, e. g., Franks v. Bowman Transportation Co., 495 F.2d 398 (5th Cir. 1974), cert. granted, 420 U.S. 989, 95 S.Ct. 1421, 43 L.Ed.2d 669 (1975); United States v. Bethlehemtes v. Bethlehem Steel Corp., 446 F.2d 652 (2d Cir. 1971). Even the courts in Waters, supra, 502 F.2d at 1320, and Jersey Central, supra, 500 F.2d at 705 & n. 48, have acknowledged the propriety of the plantwide seniority remedy to prevent the entrenchment of past departmental discriminations. The third case cited by the majority, Watkins, is consistent, rather than conflicting, with the analysis which suggests that even though bona fide seniority systems are substantively lawful under 42 U.S.C. § 2000e-2(h), they may be disturbed as part of the remedy for other unlawful discriminatory practices. In the Watkins case the Fifth Circuit panel was most cautious in holding that the bona fide seniority system there challenged was only protected "where the individual employees who § uffer layoff under the system have not themselves been the subject of prior employment discrimination." 516 F.2d at 45. It is the absence of an identifiable independent discriminatory practice or substantive law violation, and that alone, which in Watkins, and one might add in Jersey Central as well, forecloses remedial interference with bona fide seniority systems.
33
Our present case is, of course, quite different from the Watkins, Waters and Jersey Central cases. We have before us the history of a discriminatory practice which has resulted in a prolonged failure to hire black and Hispanic supervisors into the New York school system. See note 7 supra. As part of the remedial effort to bring minority supervisor applicants who have suffered past discrimination into the New York schools, and to maintain them there, and as a remedy to offset the loss of unknown years of deserved seniority, I submit that it is permissible to alter the "bona fide" seniority system of the school system even if that seniority system does not itself independently constitute an unlawful employment practice. This conclusion, that remedial authority may require action to be taken which substantive law would not itself independently require, is by no means a novel concept in the jurisprudence of equal protection. See, e. g., Swann v. Charlotte-Mecklenburg Board of Education, supra, 402 U.S. at 17, 31, 91 S.Ct. 1267. In fact, in my view the majority opinion in this case has itself conceded this principle, at least implicitly, by directing the district court to consider the use of "constructive seniority" to afford relief to minority workers in the class of plaintiff Chance. Clearly the grant of such artificial seniority is but a construct for interfering with what the majority insists is a "bona fide" seniority system. That is to say, the majority's continued insistence upon the sanctity of the seniority system which it deems "bona fide" is inconsistent with a willingness to grant remedial interference with that system in the form of "constructive seniority."
34
Having crossed what I believe to be the misconceived hurdle of Title VII, and recognizing the continuing integrity of the remedial powers of the district court, we are still left with the difficult problem whether the particular remedy chosen by the district court is reasonably designed to help those who have suffered from discrimination without unduly harming others. At this level of consideration it is apparent that the district judge faced several choices. He could have followed the approach suggested by the majority, which would grant constructive seniority to those in Chance's class back to the mean appointment date of persons who took and passed the discriminatory exam which persons like Chance took but failed. Were Chance's class the only one involved in this litigation this remedy would appear to represent a sufficient conciliation of the interests of the previously discriminated and previously favored employees. But see note 3 supra. But the present suit involves another (and much larger) class, composed of persons like plaintiff Mercado who never took the discriminatory examinations but who were discouraged from taking them by knowledge of their discriminatory characteristics. The district court could well have considered that it was necessary to give constructive seniority to members of Mercado's class, as well as Chance's. See Note, Last, Hired, First Fired Layoffs and Title VII, supra, 88 Harv.L.Rev. at 1557-60. This seems especially likely in view of the fact that the members of Mercado's class far outnumber those in Chance's class, see note 5 supra, and that a remedy for the latter alone would therefore be quite inadequate for the litigation as a whole. But in many cases it would be difficult, if not impossible, fairly to compute constructive seniority for these persons who were discouraged from ever applying to take the discriminatory examination. The use of a few broad parameters for determining constructive seniority has been suggested in such a case. 88 Harv.L.Rev. at 1559. One approach might be to give members of Mercado's class seniority equal to the average seniority of nonminority workers of the same age. Id. Another possibility would be to assume that persons in Mercado's class were interested in becoming supervisors (which seems likely because they have now applied for these jobs) and would have applied to take a nondiscriminatory exam as soon as they were qualified, in terms of years of service as teachers, to do so. Assuming a person could take the exam after, say, four years of teaching experience, constructive seniority could be given to members of Mercado's class as of the mean appointment date for those who passed the first examination given after the class member had taught for four years. Had the district judge determined that some relief of this type was necessary to afford appropriate relief for the members of Mercado's class, the majority's arguments directed against quotas as such would be inapplicable. While the computation of such constructive seniority would provide only a rough measure of justice among the affected persons, this is a situation where perfect justice seems impossible to attain. A greater objection to the "constructive seniority" approach suggested here is that its administrative difficulties may be substantial, if not overwhelming. If pre-examination requirements include more than merely years of teaching experience,8 there may be no convenient criteria from which "constructive seniority" for members of Mercado's class could be computed.
35
A third possible remedy, the one chosen by the district court here, avoids the considerable administrative difficulties which may well exist under the constructive seniority method once, as seems necessary to me, the problem of Mercado's class, or persons mentioned in note 3 supra, is considered. Use of a quota for limiting the layoffs of minority supervisors is an easily implemented device which provides substantial protection for both of the discriminated classes in this suit. It is true that the measure of justice afforded by the quota technique may in some instances be considerably rougher than that obtained by the constructive seniority approach.9 Considering the situation as it lay before the district court, however, with the inability of the interested parties to agree on a fair remedy, with a multiplicity of diverse interests and problems of administering relief as well as difficulties in finely tuning other relief to suit exactly ascertainable equities, I cannot conclude that the quota is so broad and rough a measure of justice that it was beyond the discretion of the trial court. The appellants have forwarded no data suggesting that the quota sweeps in substantial numbers of persons not entitled to relief, and therefore I assume that this effect is not great in this case. And, while the quota technique may also hypothetically operate quite inexactly, it cannot be denied that the constructive seniority approach is rather artificial in its performance too. I cannot, then, conclude that the quota order appealed from was an abuse of the discretion of the district court, at least where as here it is dealing with an interim situation only. Rather, here I believe we should adhere to the guidance of the Supreme Court in International Salt Co. v. United States, 332 U.S. 392, 400, 68 S.Ct. 12, 17, 92 L.Ed. 20 (1947), which suggests that "(t)he framing of decrees should take place in the District rather than in Appellate Courts."
36
In summary, I believe that the three important questions before us in this case have been incorrectly decided by the majority. The use of quotas as a remedial limitation on the layoff of minority personnel hired as the result of court-ordered changes in discriminatory employment practices does not violate the Constitution. Nor do such quotas, when they are used as a remedy for past discriminatory practices, violate Section 703(h) of Title VII, 42 U.S.C. § 2000e-2(h). Finally, the quality of the justice obtained by the use of the quota is not so rough that, considering the imperfection of the alternative remedies and the administrative convenience of the quota, the order therefor was an abuse of discretion.
37
I therefore dissent.
ON REHEARING
PER CURIAM:
38
Following our original opinion in this case a petition for rehearing and suggestion for hearing en banc was timely filed by the plaintiffs-appellees. While such petition was under consideration by the court, another panel decided Acha v. Beame, 531 F.2d 648 (2d Cir. 1976), and the Supreme Court decided Franks v. Bowman Transportation Co., --- U.S. ----, 96 S.Ct. 1251, 47 L.Ed.2d 444, 44 U.S.L.W. 4356 (1976). Both these cases support the relief of constructive seniority afforded by this court to the plaintiffs in the Chance class, those who took and failed discriminatory supervisory examinations. They also bear on the relief to be afforded to the members of the Mercado class, so-called, those who "have failed to apply for or take such supervisory examinations because they reasonably believed the supervisory examination to be discriminatory and unrelated to job performance." Chance v. Board of Examiners, 70 Civ. 4141 (S.D.N.Y. May 21, 1973) (order of Mansfield, J.), at 7. Accordingly we modify so much of our prior decree as relates to the Mercado class and order that the case be remanded to the district court with directions to accord constructive seniority to the members thereof who have heretofore established or can establish by the usual preponderance of the evidence that they qualify as such.
1
Section 2585 of the Education Law (McKinney 1970) provides in pertinent part as follows:
2
If a board of education abolishes an office or position and creates another office or position for the performance of duties similar to those performed in the office or position abolished, the person filling such office or position at the time of its abolishment shall be appointed to the office or position thus created without reduction in salary or increment, provided the record of such person has been one of faithful, competent service in the office or position he has filled
3
Whenever a board of education abolishes a position under this chapter, the services of the teacher having the least seniority in the system within the tenure of the position abolished shall be discontinued
4
In a city having a population of one million or more, no member of the teaching or supervising staff who has been regularly appointed in accordance with merit and fitness, determined by competitive examination, shall be dismissed upon the abolishment of his position if:
a. The superintendent of schools, upon the recommendation of the board of examiners, certifies to the board of education that such member is competent to serve in any vacant position in the same rank or level or in a lower rank or level of service with such board; and
b. The superintendent of schools, upon direction of the board of education, assigns such member to any such vacant position, in which event such member so assigned shall serve in such position without reduction of salary.
5
If an office or position is abolished or if it is consolidated with another position without creating a new position, the person filling such position at the time of its abolishment or consolidation shall be placed upon a preferred eligible list of candidates for appointment to a vacancy that then exists or that may thereafter occur in an office or position similar to the one which such person filled without reduction in salary or increment, provided the record of such person has been one of faithful, competent service in the office or position he has filled. The persons on such preferred list shall be reinstated or appointed to such corresponding or similar positions in the order of their length of service in the system
2
The Collective Bargaining Agreement contains a set of detailed excessing rules. In addition, it provides that the "provisions of law" will be followed in all City-wide excessing situations
3
See Chance v. Board of Examiners, 458 F.2d 1167 (2d Cir. 1972); Chance v. Board of Examiners, 496 F.2d 820 (2d Cir. 1974). On May 15, 1974, this Court dismissed a third appeal without opinion. Chance v. Board of Examiners, 497 F.2d 919 (2d Cir. 1974)
4
42 U.S.C. § 2000e et seq
5
42 U.S.C. § 2000e-2(h) provides in pertinent part that "it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority . . . system, . . . provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin . . .."
6
Plaintiffs concede that only a small percentage of the minority supervisors appointed since the inception of this litigation failed the examinations found to be discriminatory, and there is no showing as to how many were even eligible to take such examinations
7
The discriminatory effects of such conduct would be even more apparent if the senior member were female and thus entitled to the same protection against discharge under § 2000e-2 as a Black. Indeed, if the quota system is proper, the day is not far away when women will seek its assistance in displacing minority workers
8
In Bethlehem Steel, we authorized the use of plant seniority only for the purpose of filling vacancies and not to "bump" white workers. We said, at 446 F.2d 661: "Both groups will bid against each other for vacancies on the basis of plant-wide seniority; an earlier hired white employee will have greater seniority than a later-hired black."
1
The equitable powers of the district court under 42 U.S.C. § 1981 are at least as great as those under Title VII, § 706(g), 42 U.S.C. § 2000e-5(g), which states in pertinent part:
If the court finds that the respondent has intentionally engaged in or is intentionally engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay (payable by the employer, employment agency, or labor organization, as the case may be, responsible for the unlawful employment practice), or any other equitable relief as the court deems appropriate. . . .
An example of a court's broad utilization of those powers in connection with a facially neutral departmental seniority plan which froze black employees "into a discriminatory caste" is found in Johnson v. Goodyear Tire & Rubber Co., 491 F.2d 1364, 1373 (5th Cir. 1974), where the court said: "The principle of the illegality of a facially neutral seniority system superimposed on a history of employment discrimination is so well settled that extended discussion is unnecessary." See generally Note, Last Hired, First Fired Layoffs and Title VII, 88 Harv.L.Rev. 1544 (1975).
2
See Chance v. Board of Education, 330 F.Supp. 203 (S.D.N.Y.1971), aff'd, 458 F.2d 1167 (2d Cir. 1972) (preliminary injunctive relief upheld); Chance v. Board of Education, 496 F.2d 820 (2d Cir. 1974) (permanent relief partially afforded)
3
Although it would not cover persons who were discouraged from taking the examinations for a period of years because of a reasonable belief that they were discriminatory but who subsequently took the examinations and failed
4
Chance v. Board of Examiners, 70 Civ. 4141 (75-7161), May 21, 1973, order of Mansfield, J., at p. 7:
(1) Finding that all of the conditions precedent prescribed by Rule 23(a) for maintenance of the action as a class suit are met, we grant plaintiffs' motion pursuant to Rule 23(b)(2) for an order allowing it to be so maintained. The class shall include all Blacks and persons of Puerto Rican origin or descent who (1) have failed examinations for supervisory positions in the New York City School System; or (2) have failed to apply for or take such supervisory examinations because they reasonably believed the supervisory examination system to be discriminatory and unrelated to job performance; or (3) have taken such supervisory examinations and have been or are in the process of being evaluated for eligibility lists to be promulgated; or (4) are eligible or will be eligible for supervisory examinations to be given in the future.
Although Judge Mansfield's order refers to Puerto Rican members of the discriminated class, I have followed the usage of the parties in their briefs and used the term "Hispanic" to refer to these persons.
5
Letter dated January 24, 1975, from Jeanne K. Silver, attorney for plaintiffs, to the Honorable Harold R. Tyler, then United States District Judge for the Southern District of New York
6
Section 703(h), 42 U.S.C. § 2000e-2(h), provides:
Notwithstanding any other provision of this subchapter, it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority or merit system, or a system which measures earnings by quantity or quality of production or to employees who work in different locations, provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin, nor shall it be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex or national origin. It shall not be an unlawful employment practice under this subchapter for any employer to differentiate upon the basis of sex in determining the amount of the wages or compensation paid or to be paid to employees of such employer if such differentiation is authorized by the provisions of section 206(d) of Title 29.
7
The opinion in Kirkland v. New York State Department of Correctional Services, 520 F.2d 420, 428 (2d Cir. 1975), pointedly distinguished Chance v. Board of Education, 330 F.Supp. 203 (S.D.N.Y.1971), on the basis that the Chance proof of past discrimination was much clearer. Kirkland, incidentally, also involved "permanent" quotas. 520 F.2d at 428
8
Discussion of other prerequisites to the supervisor's examination is shown in Chance v. Board of Examiners, 330 F.Supp. 203, 207 (S.D.N.Y.1971). One such prerequisite is "two years' experience of supervision in day schools under license and appointment, or . . . various alternative experience requirements." Id. Whether the district court could or should factor such considerations into a constructive seniority computation for members of Mercado's class cannot be determined at this appeal. These complications might well, however, weigh severely against use of the constructive seniority, method in this case. Judge Tyler was after all deciding a case involving human, not mathematical, equations
9
For example, a minority person who took and failed the discriminatory examination ten years ago may, under the quota system, be laid off before a white or minority supervisor appointed under the nondiscriminatory selection system if the former happened to have been appointed a supervisor after the other two. Also, a black or Hispanic supervisor is protected by the quota and may be laid off only after whites appointed before him have been, even if he passed the discriminatory examinations, or even if he became a supervisor after the discriminatory examinations were outlawed and had never failed or been discouraged from taking them. The majority is quite correct in pointing out that the quota method protects all minority supervisors, even those who were able to overcome the discrimination to achieve their position or who were never discriminated against. While this effect does not make the quota an unconstitutional form of "reverse discrimination," it can be argued to weigh against the reasonableness of the quota as a remedial device for use by the district court
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205 U.S. 236 (1907)
ROCHESTER RAILWAY COMPANY
v.
CITY OF ROCHESTER.
No. 156.
Supreme Court of United States.
Argued January 14, 15, 1907.
Decided March 25, 1907.
ERROR TO THE SUPREME COURT OF THE STATE OF NEW YORK.
*241 Mr. Charles J. Bissell, with whom Mr. William C. Trull and Mr. Joseph S. Clark were on the brief, for plaintiff in error.
Mr. William B. Webb and Mr. Benjamin B. Cunningham for defendant in error.
*245 MR. JUSTICE MOODY, after making the foregoing statement, delivered the opinion of the court.
By the judgment of the highest court of the State of New York, the city of Rochester was allowed to recover from the Rochester Railroad, a street surface railroad corporation, the cost of laying new pavements on the parts of two streets which lay between the tracks, the rails of the tracks and two feet outside of the tracks of the railroad. This recovery was had under a statute of New York, which required such railroads to keep that part of the street over which their tracks ran in permanent repair. The requirement of permanent repair includes the duty of laying new pavements. Conway v. Rochester, 157 N.Y. 33.
The Rochester Railroad, not denying its liability in ordinary cases to bear the expense of paving, asserts that, with respect to the two streets in question, it was exempted from that burden by contract with the State of New York, made with its predecessor in title, the Brighton Railroad, and transferred to it with the title to the property of that railroad. The contract relied upon is found in a law enacted in 1869, for the benefit of the Brighton Railroad, which relieved that road from the burden of pavement of any part of the streets in which its tracks were situated. The Rochester Railroad claims that the law of New York, so far as that law imposes upon it the cost of the pavement of the streets in question, was in violation of that provision of the Constitution of the United States which forbids a State to pass any law impairing the obligation of contracts.
The Brighton Railroad was incorporated in 1862, under the general law of 1850, which contained no provision with respect to the railroad's share of street repairs. Until the enactment of the law of 1884, under which the Rochester Railroad was subsequently incorporated, there was no general law regulating the apportionment between street railroads and municipalities of the expense of such repairs, and the *246 question was determined in individual cases either by agreement or a special law. Differences having arisen between the Brighton Railroad and the city of Rochester as to the share of the expense of street repair which ought to be borne by the railroad, they joined in a request for legislation which would settle this and other disagreements. In response to that request the law of 1869 was enacted. The fifth section of the law, after providing that the railroad should put and keep the surface and street inside of the rails of its tracks in repair, enacts that: "Whenever any of said streets are by ordinance or otherwise permanently improved said company shall not be required to make any part or portion of such improvement or bear any part of the expense thereof."
This law obviously, as held by the Court of Appeals, exempted the railroad from the expense of new pavements, which is the expense sought to be recovered in this action. This was the effect conceded to the statute by the city for the whole time during which the railroad property was owned and operated by the Brighton Railroad, and even after it parted with the property, and until the decision in Conway v. Rochester, 157 N.Y. 33, in 1898. Whether this statute was a contract between the State of New York and the Brighton Railroad inviolable by the Federal Constitution, and if so, whether its benefits have been waived or it has been lawfully modified or repealed by virtue of the powers reserved by the constitution or laws of New York, are questions which have been much argued at the bar. We do not deem it necessary in this case to decide those questions, and therefore put out of view many facts found in the record which were deemed by both parties to be relevant to them. We assume, for the purpose of our decision, that there was a contract exempting the Brighton Railroad from the expense of street pavements, and that the contract could not constitutionally be impaired by the State of New York, and that its benefits have not been waived.
It becomes therefore necessary to inquire whether the *247 contract has been transferred with the property of the Brighton Railroad to the Rochester Railroad, the plaintiff in error.
The Rochester Railroad was incorporated for the purpose of acquiring the property of the Brighton Railroad, which was accomplished by a lease of the property, franchises, rights and privileges of the Brighton Railroad, followed by the purchase of its capital stock. This was done under the authority of a statute, which provided that a railroad corporation, being the lessee of the property of another railroad corporation, might acquire the whole of the capital stock of the latter, and in such a case its "estate, property, rights, privileges, and franchises should vest in and be held and enjoyed by" the purchasing corporation. It is contended that the effect of the transfer under this law is to vest in the Rochester Railroad the exemption from the expense of street pavement which the Brighton Railroad enjoyed through the contract with the State of New York. This contention presents the question to be decided.
This court has frequently had occasion to decide whether an immunity from the exercise of governmental power which has been granted by contract to one, has by legislative authority been vested in or transferred to another, and in the decisions certain general principles, which control in the determination of the case at bar, have been established. Although the obligations of such a contract are protected by the Federal Constitution from impairment by the State, the contract itself is not property which, as such, can be transferred by the owner to another, because, being personal to him with whom it was made, it is incapable of assignment. The person with whom the contract is made by the State may continue to enjoy its benefits unmolested as long as he chooses, but there his rights end, and he cannot by any form of conveyance transmit the contract or its benefits, to a successor. Morgan v. Louisiana, 93 U.S. 217; Wilson v. Gaines, 103 U.S. 417; Louisville & Nashville R.R. Co. v. Palmes, 109 U.S. 244; Picard v. Tennessee &c., 130 U.S. 637; St. *248 Louis &c. Co. v. Gill, 156 U.S. 649; Norfolk & Western Railroad v. Pendleton, 156 U.S. 667. But the State, by virtue of the same power which created the original contract of exemption, may either by the same law, or by subsequent laws, authorize or direct the transfer of the exemption to a successor in title. In that case the exemption is taken not by reason of the inherent right of the original holder to assign it, but by the action of the State in authorizing or directing its transfer. As in determining whether a contract of exemption from a governmental power was granted, so in determining whether its transfer to another was authorized or directed every doubt is resolved in favor of the continuance of the governmental power and clear and unmistakable evidence of the intent to part with it is required.
Keeping these fundamental principles steadily in mind, we proceed to inquire whether the State of New York has authorized or directed the transfer from the Brighton Railroad to the Rochester Railroad of the contract of exemption. A legislative authorization of the transfer of "the property and franchises," Morgan v. Louisiana, ub. sup.; Picard v. Tennessee &c. Co., ub. sup.; of "the property," Wilson v. Gaines, ub. sup.; Louisville & Nashville R.R. ub. sup.; of "the charter and works," Memphis &c. Railroad Co. v. Commissioners, 112 U.S. 609; or of "the rights of franchise and property," Norfolk & Western Railroad Co. v. Pendleton, ub. sup., is not sufficient to include an exemption from the taxing or other power of the State, and it cannot be contended that the word "estate" has any larger meaning. It is, however, argued that the word "privileges" is sufficiently broad to embrace within its meaning such an exemption, and that when it is added to the other words the legislative intent to transfer the exemption is clearly manifested, and that the words of the law under consideration, "the estate, property, rights, privileges and franchises," indicate the purpose to vest in the purchasing corporation every asset of the selling corporation which is of conceivable value. There is authority *249 sustaining this position, which cannot be set aside without examination.
In the case of Humphrey v. Pegues, 16 Wall. 244, it appeared that the charter of the Northeastern Railroad Company granted by the State of South Carolina originally contained no exemption from taxation, but that by amendment to the charter some years later the real estate and stock of the company were exempted from all taxation during the continuance of its charter. Subsequently, the legislative granted the charter of the Cheraw and Darlington Railroad Company, and provided that "all the powers, rights and privileges granted by the charter of the Northeastern Railroad Company are hereby granted to the Cheraw and Darlington Railroad Company." The State of South Carolina attempted to tax the stock and property of the Cheraw and Darlington Railroad Company, and the validity of that taxation was the question in the case. The court held that the powers, rights and privileges granted to the Cheraw and Darlington Railroad Company were those contained in the amendment of the charter, as well as those contained in the original charter, and said, by Mr. Justice Hunt: "All the `privileges,' as well as the powers and rights, of the prior company were granted to the latter. A more important or more comprehensive privilege than a perpetual immunity from taxation can scarcely be imagined. It contains the essential idea of a peculiar benefit or advantage, of a special exemption from a burden falling upon others." Upon this reasoning it was held that the stock and real estate of the Cheraw and Darlington Railroad Company were exempt from taxation. See Gunter v. Atlantic Coast Line, 200 U.S. 273.
In Chesapeake & Ohio Railroad v. Virginia, 94 U.S. 718, it was said that an act conferring upon a railroad corporation "the benefits of the charter" of another corporation which had an immunity from taxation, and "the rights, privileges, franchises and property" of another corporation, which when formed would have the "rights, privileges and franchises *250 and property" of the corporation holding the immunity, was sufficient to transfer the immunity from taxation. But this expression of opinion was unnecessary to the decision of the case, which merely decided that where a railroad corporation acquired the property of another railroad corporation to which was attached an immunity from taxation, that immunity did not extend beyond the property thus acquired. In Southwestern Railroad Company v. Georgia, 92 U.S. 665, where a statute allowed the Muscogee Railroad to unite with the Southwestern Railroad into one company, under the charter of the latter, and it was provided that "all the rights, privileges and property [of the Muscogee Railroad Company] shall be part and parcel of the Southwestern Railroad," it was held that the immunity from taxation enjoyed by the Muscogee Railroad passed with its property to the Southwestern Railroad.
In Tennessee v. Whitworth, 117 U.S. 139, it was held that a statute conferring upon a railroad corporation "all the rights, powers and privileges" of another railroad corporation, and "all the powers and privileges" of a third railroad corporation included the immunities from taxation enjoyed respectively by the latter corporations, the ground of the decision being that an exemption from taxation is, in the common acceptation of the term, a privilege.
If the authority of these four cases, supported by some dicta which need not be cited, remained unimpaired, it would justify the opinion that a legislative transfer of the "privileges" of a corporation includes an exemption from the taxing or other governmental power granted by a contract with the State. But other and later cases have essentially modified the rule which may be deduced from them.
In the case of the Chesapeake & Ohio Railroad Company v. Miller, 114 U.S. 176, it was held that the foreclosure of a mortgage on railroad property under the provisions of a statute which authorized the purchaser under a foreclosure sale to become a corporation, and provided that it should *251 "succeed to all such franchises, rights and privileges" as were possessed by the mortgagor company, did not vest in the purchasing corporation an immunity from taxation.
In Picard v. East Tennessee, Virginia & Georgia Railroad Company, 130 U.S. 637, Mr. Justice Field, in delivering the opinion of the court, said:
"The later, and, we think, the better opinion, is that unless other provisions remove all doubt of the intention of the legislature to include the immunity in the term `privileges,' it will not be so construed. It can have its full force by confining it to other grants to the corporation."
In Wilmington & Weldon Railroad Company v. Alsbrook, 146 U.S. 279, Mr. Chief Justice Fuller, in delivering the opinion of the court, said on page 297: "We do not deny that exemption from taxation may be construed as included in the word `privileges,' if there are other provisions removing all doubt of the intention of the legislature in that respect."
In Keokuk & Western R.R. Co. v. Missouri, 152 U.S. 301, Mr. Justice Brown, in delivering the opinion of the court, said: "Whether under the name `franchises and privileges' an immunity from taxation would pass to the new company may admit of some doubt, in view of the decisions of this court, which, upon this point, are not easy to be reconciled."
These conflicting views were before the court in Phenix Fire & Marine Insurance Company v. Tennessee, 161 U.S. 174. The plaintiff in error in that case claimed to have an immunity from taxation by virtue of a provision in its charter granting it "all the rights and privileges" of the De Soto Insurance Company, which had an immunity from taxation by virtue of a provision in its charter granting it "all the rights, privileges and immunities" of the Bluff City Insurance Company, whose charter contained an expressed immunity from taxation. Mr. Justice Peckham, in delivering the opinion of the court, stated the question for decision in these words: "Is immunity from taxation granted to plaintiff in error under language which grants `all the rights and privileges' *252 of a company which has such immunity?" Much significance was given to the fact that the word "immunity," which clearly includes an exemption, was used in the charter of the De Soto company and not used in the charter of the plaintiff in error, granted seven years later. But the decision was not rested on this circumstance, although the omission was thought to cast a grave doubt upon the plaintiff's claim. The opinion reviews all the cases, cites the foregoing quotations from the opinions of Mr. Justice Brown, Mr. Justice Field and of the Chief Justice, and, after saying "There must be other language than the mere word `privilege' or other provisions in the statute removing all doubt as to the intention of the legislature before the exemption will be admitted," concludes that "If this were an original question we should have no hesitation in holding that the plaintiff in error did not acquire the exemption from taxation claimed by it, and we think at the present time the weight of authority, as well as the better opinion, is in favor of the same conclusion which we should otherwise reach."
In Gulf & Ship Island Railroad Company v. Hewes, 183 U.S. 66, Mr. Justice Brown, in delivering the opinion of the court, said, citing this case as authority: "The better opinion is that a subrogation to the `rights and privileges' of a former corporation does not include an immunity from taxation."
We think it is now the rule, notwithstanding earlier decisions and dicta to the contrary, that a statute authorizing or directing the grant or transfer of the "privileges" of a corporation, which enjoys immunity from taxation or regulation, should not be interpreted as including that immunity. We, therefore, conclude that the words "the estate, property, rights, privileges and franchises," did not embrace within their meaning the immunity from the burden of paving enjoyed by the Brighton Railroad Company. Nor is there anything in this, or any other statute, which tends to show that the legislature used the words with any larger meaning than they would have standing alone. The meaning is not *253 enlarged, as faintly suggested, by the expression in the statute that they are to be held by the successor "fully and entirely and without change and diminution," words of unnecessary emphasis, without which all included in "estate, property, rights, privileges and franchises" would pass, and with which nothing more could pass. On the contrary, it appears, as clearly as it did in the Phenix Fire Insurance Co. case, supra, that the legislature intended to use the words "rights, franchises and privileges" in the restricted sense. The law under which this transfer was made was enacted in 1867 and amended in 1879. In 1869 an act was passed authorizing the merger and consolidation of railroad corporations, chap. 917, Laws of 1869, which provided that upon the consolidation "all and singular the rights, privileges, exemptions and franchises should be transferred to the new corporation." In 1876 an act was passed, chap. 446, Laws of 1876, which authorized the purchasers of the rights, privileges and franchises of railroad corporations (except street railroad corporations) under a foreclosure sale to become a corporation, and thereupon have "all the franchises, rights, powers, privileges and immunities" of the corporation whose property was sold. The omission in the statute under consideration of the words "exemptions" or "immunities," either of which would be apt to transfer the immunity claimed, is significant, in view of the fact that each of these words was employed by the legislature about the same time in other statutes dealing with the transfer of corporate property, and raises a doubt of the intention of the legislature, which in cases of the interpretation of a statute claimed to divest the State of a governmental power is equivalent to a denial.
The conclusion that the exemption of the Brighton Railroad did not accompany the transfer of its property to the Rochester Railroad is reached by another and entirely independent course of reasoning, based upon a consideration of the law under which the Rochester Railroad was incorporated. That was the general incorporation law of 1884. Every corporation *254 incorporated under it was made "subject to all the liabilities imposed by the act," (§ 1) and directed to keep the street surface about and between its tracks "in permanent repair," (§ 9) which, as held by the state court, includes the duty of laying such pavement as is in controversy here. We follow the construction by that court of § 9, so far as it holds that that section applies to all tracks, whether constructed under this law or any other law, owned and operated by a corporation incorporated under it. Whether the section applies, or constitutionally can apply, to a corporation not deriving its powers from the act of 1884, in respect of tracks not constructed under its provisions, it is not necessary for us to consider. There may have been a saving of the rights of such corporations under § 18. That question would be presented if the Brighton Railroad, instead of a successor in title, were claiming an exemption. Here a corporation, deriving its right to exist under the act of 1884, is asserting an exemption from a duty imposed upon it by the law which created it. The authorities are numerous and conclusive that no corporation can receive by transfer from another an exemption from taxation or governmental regulation which is inconsistent with its own charter or with the constitution or laws of the State then applicable, and this is true, even though, under legislative authority, the exemption is transferred by words which clearly include it. Trask v. Maguire, 18 Wall. 391; Shields v. Ohio, 95 U.S. 319; Maine Central R.R. v. Maine, 96 U.S. 499; Railroad Co. v. Georgia, 98 U.S. 359; Louisville & Nashville R.R. Co. v. Palmes, 109 U.S. 244; Memphis &c. R.R. v. Commissioners, 112 U.S. 609; St. Louis &c. R.R. v. Berry, 113 U.S. 465; Keokuk &c. R.R. v. Missouri, 152 U.S. 301; Norfolk & Western R.R. v. Pendleton, 156 U.S. 667; Yazoo &c. R.R. v. Adams, 180 U.S. 1; Grand Rapids &c. R.R. v. Osborn, 193 U.S. 17; San Antonio Traction Co. v. Altgelt, 200 U.S. 304.
The principle governing these decisions, so plain that it needs no reasoning to support it, is that those who seek and *255 obtain the benefit of a charter of incorporation must take the benefit under the conditions and with the burdens prescribed by the laws then in force, whether written in the constitution, in general laws or in the charter itself. The Rochester Railroad, therefore, having accepted its charter under a law which imposed upon it the duty of laying pavements is bound to perform that duty, even in respect of tracks, which, while owned by a predecessor in title, would have been exempt.
The foregoing considerations would be conclusive of the case were it not that the plaintiff in error takes another position, which, if tenable, would avoid the result reached by either course of reasoning. It is insisted that this is not a case of transfer of an exemption; that the rules governing transfer are not applicable here; that the Brighton Railroad has not ceased to exist as a corporation; that it has been merely joined by merger with the Rochester Railroad, which controls it by stock holdings, and operates it by virtue of its franchises; and that, therefore, the Rochester Railroad may claim and enjoy the exemption of the Brighton Railroad in its behalf in respect of its property. In support of this view counsel cite Tomlinson v. Branch, 15 Wall. 460; Central Railroad v. Georgia, 92 U.S. 665; Tennessee v. Whitworth, ub. sup. These cases hold that where corporations are united in such manner that one continues to exist as a corporation, owning and operating its property, by virtue of its own charter, the corporation thus continuing to exist still holds its immunities and exemptions in respect of the property to which they apply. But the cases have no application here. It may well be that a proceeding for condemnation of property, begun by the Brighton Railroad, would not abate by reason of its consolidation with the Rochester Railroad, as held in 43 State Reporter, 651, affirmed 133 N.Y. 690. An examination, however, of the statute under which the union of the two corporations was made, and the transactions by which the union was accomplished, shows that the Brighton *256 Railroad has ceased to exist as a corporation. The Rochester Railroad first took a lease of the Brighton Railroad, apparently for the purpose of bringing itself within the provisions of the act of 1879. Then all the stock of the latter corporation was acquired by exchange of shares of stock of the former corporation. Then a certificate of the transfer of stock was filed with the Secretary of State. Thereupon, by operation of the law, the "estate, property, rights, privileges and franchises" of the Brighton Railroad vested in the Rochester Railroad, to be thereafter controlled by the Rochester Railroad in its own corporate name. The law does not expressly dissolve the selling corporation, but it leaves it without stock, officers, property or franchises. A corporation without shareholders, without officers to manage its business, without property with which to do business, and without the right lawfully to do business, is dissolved by the operation of the law which brings this condition into existence. Maine Central Railroad v. Maine, ub. sup.; Keokuk &c. Railroad v. Missouri, ub. sup.; Yazoo &c. Railroad, ub. sup.
The judgment of the Supreme Court of New York is, therefore,
Affirmed.
MR. JUSTICE WHITE concurs in the result.
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IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
RONALD PAK ZERN, NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
Appellant, DISPOSITION THEREOF IF FILED
v. CASE NO. 1D16-3058
STATE OF FLORIDA,
Appellee.
_____________________________/
Opinion filed April 4, 2017.
An appeal from the Circuit Court for Okaloosa County.
John T. Brown, Judge.
Andy Thomas, Public Defender, and Barbara J. Busharis, Assistant Public Defender,
Tallahassee, for Appellant.
Pamela Jo Bondi, Attorney General, and David Llanes, Assistant Attorney General,
Tallahassee, for Appellee.
PER CURIAM.
In Zern v. State, 191 So. 3d 962 (Fla. 1st DCA 2016), we reversed Appellant’s
judgment and sentence based on the trial court’s failure to hold a proper competency
hearing after receiving the appointed experts’ conflicting reports on Appellant’s
competency, and we remanded for a retroactive determination of Appellant’s
competency at the time of trial. On remand, the trial court held an evidentiary
hearing at which the experts’ reports were introduced and lay and expert testimony
was presented regarding Appellant’s competency. At the conclusion of the hearing,
the trial court orally found that Appellant “was competent on November 12,
2013,[1] and was competent to proceed at the time of trial” (emphasis added).
However, the order memorializing this ruling only stated that “on November 12,
2013, [Appellant] was competent to proceed to trial.” The court also re-entered
Appellant’s original judgment and sentence. See id. at 965 (“If the court finds that
Appellant was competent at the time of trial, it must enter a nunc pro tunc written
order memorializing this finding with no change in the judgment.”).
On appeal, Appellant argues that the trial court abused its discretion in finding
that he was competent at the time of trial because there was no evidence of his
competency at that time. We disagree. Although the experts’ reports significantly
pre-dated the trial and were insufficient on their own to establish Appellant’s
competency at the time of trial, see, e.g., Brockman v. State, 852 So. 2d 330, 333-
34 (Fla. 2d DCA 2003), the evidence presented at the evidentiary hearing on remand
also included conflicting testimony from the experts regarding their opinions of
Appellant’s competency at the time of their additional evaluations of him shortly
1
This was the date of the pre-trial competency hearing described in our prior opinion
that did not go forward after defense counsel stipulated that Appellant was
competent. See Zern, 191 So. 3d at 964.
2
before trial.2 This testimony was competent substantial evidence from which the
court could—and did—find that Appellant was competent at the time of
trial. See Huggins v. State, 161 So. 3d 335, 345 (Fla. 2014) (“[W]here there is
evidentiary support for the trial court’s resolution of conflicting expert testimony,
this court will not disturb the trial court’s competency determination.”).
Accordingly, we affirm the trial court’s retroactive competency determination
and Appellant’s re-entered judgment and sentence. However, we remand for the
trial court to conform the written order to its oral ruling that Appellant “was
competent . . . at the time of trial.” Appellant need not be present for this ministerial
act.
AFFIRMED and REMANDED with directions.
WETHERELL, BILBREY, and JAY, JJ., CONCUR.
2
Although the additional evaluations were focused on Appellant’s sanity at the time
of the offense, the experts specifically testified at the evidentiary hearing on remand
regarding their opinions of Appellant’s competency at the time of these evaluations.
3
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746 F.2d 865
241 U.S.App.D.C. 132, 53 USLW 2249
AMERICAN AIRWAYS CHARTERS, INC., Appellantv.Donald REGAN, Secretary of the Treasury, et al.
No. 83-1860.
United States Court of Appeals,District of Columbia Circuit.
Argued March 28, 1984.Decided Oct. 23, 1984.
Appeal from the United States District Court for the District of Columbia (Civil Action No. 82-03143).
David Rudovsky, Philadelphia, Pa., with whom James E. Drew, Washington, D.C., was on the brief, for appellant.
William H. Briggs, Jr., Asst. U.S. Atty., Washington, D.C., with whom Joseph E. diGenova, U.S. Atty., Royce C. Lamberth and R. Craig Lawrence, Asst. U.S. Attys., Washington, D.C., were on the brief, for appellees.
Before GINSBURG, Circuit Judge, MACKINNON, Senior Circuit Judge, and HAROLD H. GREENE,* United States District Judge for the District of Columbia.
Opinion for the Court filed by Circuit Judge GINSBURG.
Concurring opinion filed by District Judge GREENE.
Opinion dissenting in part and concurring in remand filed by Senior Circuit Judge MACKINNON.
GINSBURG, Circuit Judge:
This case concerns the right of a Florida corporation, specially designated a "Cuban national" pursuant to section 5(b) of the Trading with the Enemy Act, 50 U.S.C. app. Sec. 5(b) (1982) (TWEA or Act), to choose and retain counsel without obtaining in advance a government (Treasury Department, Office of Foreign Assets Control) license to do so. We hold that although government permission, in the form of an Office of Foreign Assets Control license, is required prior to the execution of any transaction reaching the assets of a designated Cuban national, the Office of Foreign Assets Control lacks authority to condition the bare formation of an attorney-client relationship on advance government approval.
The administrative authority asserted in this case has never been asserted on any prior occasion; the controlling legislation, were we to read it as contemplating a government license prior to obtaining counsel, would trench on a right of constitutional dimension. We therefore decide this appeal in a manner that both is consistent "with the policy of the legislation as a whole," Shapiro v. United States, 335 U.S. 1, 31, 68 S.Ct. 1375, 1391, 92 L.Ed. 1787 (1948) (quoting United States v. American Trucking Associations, 310 U.S. 534, 543, 60 S.Ct. 1059, 1063, 84 L.Ed. 1345 (1940)), and avoids a constitutional inquiry. See Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 346-48, 56 S.Ct. 466, 482-83, 80 L.Ed. 688 (1936) (Brandeis, J., concurring); Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 441, 5 L.Ed. 257 (1821).
I.
1
The named plaintiff-appellant, American Airways Charters, Inc. (AAC), is a closely-held corporation, incorporated under the laws of Florida on February 15, 1977. Joint Appendix (J.A.) 15. AAC formerly provided charter service for tourist flights between the United States and Cuba. On April 7, 1982, the Treasury Department's Office of Foreign Assets Control (OFAC), acting pursuant to section 5(b) of the Trading with the Enemy Act, 50 U.S.C. app. Sec. 5(b),1 specially designated AAC a Cuban national. This designation, under the Cuban Assets Control Regulations (CACR), 31 C.F.R. pt. 515 (1983),2 effectively froze or blocked all of AAC's assets.
2
At the time of the designation, and for over five months thereafter, AAC was represented by Allen L. Lear, a member of the bar of the District of Columbia. Lear advised AAC on OFAC's regulations, applied for licenses to carry out various transactions, and generally represented AAC in its dealings with OFAC. Lear held no OFAC license to represent AAC; he never requested OFAC's permission to represent AAC; he was never told by OFAC that his representation of AAC was contingent upon application for and receipt of a license. After April 7, 1982, however, he sought and obtained licenses authorizing payment for services he rendered to AAC. See J.A. 34-35 (Lear affidavit); Brief for Appellees at 7 (hereafter, OFAC Brief).
3
Lear ceased representing AAC on September 10, 1982, when he left his law firm to commence service as a Department of Justice trial attorney. To provide for continued representation of AAC upon Lear's withdrawal as counsel, AAC's then president, Fernando Fuentes, engaged Harold A. Mayerson of the New York bar, and his law firm, Mayerson & Smith, P.C., to represent the corporation. Fuentes authorized Mayerson, on or about September 8 or 9, 1982, to be AAC's legal advocate before OFAC and for all other purposes relating to AAC's corporate status. J.A. 27 (Mayerson affidavit); id. at 32-33 (Fuentes affidavit); see OFAC Brief at 7-8. Both Fuentes, by letter dated September 13, 1982, and Mayerson, by letter dated September 15, 1982, notified OFAC that Mayerson & Smith, P.C., had been retained as AAC's counsel. J.A. 18-19. In addition, on or about September 9, 1982, Mayerson called OFAC to schedule a meeting to discuss his substitution as counsel and the orderly transfer of AAC's legal work from Lear to Mayerson & Smith, P.C. J.A. 27 (Mayerson affidavit); see OFAC Brief at 8.
4
The meeting took place on September 16, 1982, at OFAC's offices. At the meeting, OFAC's director, Dennis M. O'Connell, told Mayerson that legal representation of a "designated national" required a specific license, and that the letter Mayerson had written to OFAC was inadequate to be deemed a license request. In the absence of a proper application for and grant of a specific license, O'Connell stated, Mayerson could not represent AAC. J.A. 28-29 (Mayerson affidavit); id. at 71 (O'Connell affidavit); see OFAC Brief at 8. OFAC did not supply to, or identify for, Mayerson the application form to which its director referred. Nor, in response to Mayerson's inquiries, did OFAC officers cite any prior instance in which OFAC had in fact conditioned counsel's mere representation of a "designated national" on an advance application for and grant of a government license. J.A. 28-29 (Mayerson affidavit).3
5
On September 17, 1982, the day following Mayerson's meeting with OFAC officials, OFAC's director notified Fuentes, by letter, that he was henceforth "prohibited from engaging in any transactions for, on behalf of, or with [AAC], without a specific license from this Office." J.A. 20. The letter stated that the prohibitions would "prevent [Fuentes] from functioning as the president and chief executive officer of AAC." Id. It further stated that the director ordered the prohibitions "in the interests of conserving and liquidating AAC's assets and the proper settlement of its accounts," and in view of the "a) control of AAC by Cuba or Cuban nationals while [Fuentes was] its president and chief executive officer, b) the transfer out of the U.S. of AAC assets on the day AAC was designated as a Cuban national, and c) [Fuentes'] indictment for violations of the Trading With the Enemy Act." Id.
6
Thereafter, OFAC chose to recognize and deal with Frank Masdeu, one of AAC's two then vice-presidents, as the sole individual authorized to act on behalf of AAC. See J.A. 31 (Fuentes affidavit); id. at 76 (O'Connell affidavit). OFAC has advised Masdeu that he has the right to select counsel for AAC and to apply for a license for the retention of such counsel. J.A. 68 (Masdeu affidavit); id. at 76 (O'Connell affidavit). There is no indication in the record that OFAC ever consulted Florida law when it determined that Masdeu, and no other person, may properly speak for AAC. Nor is there any indication that Masdeu, on OFAC's recommendation or on his own initiative, ever attempted to secure a Florida court determination that he is currently the proper spokesman for AAC.
7
The instant action, seeking injunctive and declaratory relief allowing Mayerson to represent AAC, was commenced on November 3, 1982. Both sides filed dispositive motions. On July 11, 1983, the district court dismissed the complaint for want of subject matter jurisdiction. American Airways Charters, Inc. v. Regan, Civ. No. 82-3143 (D.D.C. July 11, 1983), reprinted in J.A. 4-8. The district judge reasoned that on April 7, 1982, the day AAC was designated a foreign national, the corporation lost capacity to act; since that day, the court declared, AAC has "lack[ed] the capacity to retain counsel to bring this action in its own name." J.A. 5.4 OFAC, according to the district court, "has plenary authority to control [AAC's] operation." J.A. 7 n. 4. Thus, the district court apparently concluded, without OFAC's license, no attorney may prosecute this suit as AAC's agent.5 But cf. Dean Witter Reynolds, Inc. v. Fernandez, 741 F.2d 355 (11th Cir.1984) (Cuban national need not obtain a license prior to initiating an in personam lawsuit in a United States court).
8
We think the district court stumbled in attributing to OFAC more power than Congress conferred upon the Executive. AAC's assets are blocked, and may not be touched without OFAC's permission. But Congress has not authorized the Executive to seize the corporation, control all its internal operations, decide--with no regard to state law--who shall act as its president in lieu of the board-elected officer,6 and impose a prior license requirement before the corporation can designate an attorney to represent it.
9
Facts not in dispute reveal that in early September 1982, when Fuentes authorized Mayerson to represent AAC, Fuentes was AAC's president and chief executive officer. Nor is it seriously disputed that, absent a valid prior license requirement, AAC's president would have authority to obtain counsel for the corporation. Because we conclude that Congress did not commit to the Executive power to condition a designated Cuban national's bare representation by counsel upon advance government approval, we reverse the district court's judgment and remand the case with directions to enter appropriate relief for AAC.7
II.
10
Section 5(b) of TWEA confers upon the President authority to control, through any agency he designates, "transactions in foreign exchange"; "transfers of credit or payments between, by, through, or to any banking institution"; "the importing, exporting, hoarding, melting, or earmarking of gold or silver coin or bullion, currency or securities"; and finally "any ... transactions involving [ ] any property in which any foreign country or a national thereof has any interest." 50 U.S.C. app. Sec. 5(b)(1) (1982). The CACR prohibitions track this TWEA language. See 31 C.F.R. Sec. 515.201 (1983).
11
First enacted in 1917 as a wartime measure, TWEA "evince[d] the purpose to clothe the President with definitely restricted powers in respect of seizing property of those designated as enemies." Behn, Meyer & Co. v. Miller, 266 U.S. 457, 462, 45 S.Ct. 165, 165, 69 L.Ed. 374 (1925). The drafters of the original Act described it as designed
12
to mitigate the rules of law which prohibit all intercourse between the citizens of warring nations, and to permit, under careful safeguards and restrictions, certain kinds of business to be carried on. It also provides for the care and administration of the property and property rights of enemies and their allies in this country pending the war.
13
S.REP. NO. 113, 65th Cong., 1st Sess. 1 (1917), quoted in Markham v. Cabell, 326 U.S. 404, 414 n. 1, 66 S.Ct. 193, 198, n. 1, 90 L.Ed. 165 (1945) (Burton, J., concurring). The Act, as amended to extend to peacetime national emergencies, OFAC points out, serves three principal foreign policy purposes: It "prevent[s] [designated countries] from receiving any economic benefit from transactions with persons subject to the jurisdiction of the United States"; it "limit[s] the flow of currency to specified hostile nations"; and it "den[ies] [designated countries] outlet[s] for [their] goods in the United States market." OFAC Brief at 5-6 (quoting Malloy, Embargo Programs of the United States Treasury Department, 20 COLUM.J. TRANSNAT'L L. 485, 487-88 (1981)).8
14
In asserting authority to control a designated foreign national's formation of an attorney-client relationship, OFAC relies dominantly on the TWEA power, carried over into the CACR, to license transactions involving "property in which any foreign ... national ... has any interest." Fuentes' purported retention of Mayerson as counsel for AAC on or about September 9, 1982, OFAC maintains, can only be viewed as an attempt to contract for services. Any contract, as OFAC reads the CACR and TWEA, constitutes a "transfer" of AAC's "property," and therefore cannot be consummated absent OFAC's advance permission. See OFAC Brief at 25-26.
15
The Act's catch-all reference to "property," on which the agency relies, was added to TWEA when the statute was rewritten in 1941.9 The addition did not attract large attention, and congressional intent regarding its scope is less than crystalline.10 Congress recognized generally that the legislation enacted in 1941 concentrated "extraordinary" war powers in the President. See, e.g., 87 CONG.REC. 9858 (1941) (statement of Rep. Sumners, chairman, House Judiciary Committee). Certain aspects of the section 5(b) amendments--matters not in question here--occasioned substantial debate, most notably, whether section 5(b) could or should be read to impose government control over property owned by persons not "alien enemies." Id. at 9859; see id. at 9861 (concern of many Congress members that the Act clearly reflect "the intention of the [Judiciary] committee ... to deal only with foreign property"). It seems safe to say, however, that Congress, immediately concerned with other issues and more obvious forms of property, never explicitly contemplated the specific application of TWEA authority first announced by OFAC when OFAC told Mayerson that his substitution for Lear as AAC's counsel could not be accomplished without government license.
16
We have no occasion in this case to address the claim implicit in plaintiff's brief, see Brief for Appellant at 9, that the Act and regulations thereunder should never be read to cover the formation of executory contracts, absent any actual transfer of assets. Nor does the matter at hand involve any contest whether AAC was properly designated a "Cuban national," or whether its holdings are properly considered Cuban property. We limit our inquiry to the sole question properly before us for review: Does the bare formation of an attorney-client relationship lie outside the reach of the Act and its implementing regulations? In deciding that question in plaintiff's favor, we are guided by the reminder in Real v. Simon, 510 F.2d 557, 564 (5th Cir.1975), that interpretation of TWEA terms must "have the support of the congressional policies behind the Act," and by the due process concerns implicated in the asserted right to choose counsel without interference by officialdom.
17
It is doubtful whether any of the exclusively economic purposes, see generally Regan v. Wald, --- U.S. ----, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984), legitimately served by the Act would be advanced by upholding OFAC's novel position. If AAC is allowed to retain--although not to pay--counsel without government license, Cuba will not thereby receive economic benefit from transactions with persons subject to the jurisdiction of the United States; the goal of limiting the flow of currency to Cuba will remain unimpaired; and Cuba will not gain any outlet for its goods in the United States market. See supra p. 871. OFAC asserts an interest in preserving the blocked assets of AAC against improper disposition by Mayerson, or exorbitant claims asserted by him.11 But counsel for a designated national has no authority to dispose of the designated national's assets; and no fee can be paid counsel absent a separate, and express, authorization from OFAC. At one point in this litigation, OFAC indicated a desire to protect AAC from the baleful effects of a conflict of interest on Mayerson's part. See supra note 7. The disqualification of counsel for a conflict of interest, however, is a function generally entrusted to the judiciary,12 not to an executive agency that is, in significant respects, the adverse party. An interpretation of TWEA and the CACR with an eye to "the congressional policies behind the Act," in short, offers scant support for OFAC's newly-minted claim of authority to preview, and then permit or restrain, a designated national's choice of counsel.
18
The nature and purpose of the attorney-client relationship, moreover, impel us to review with special care any initiative by an administrative officer to expose to licensing the very creation of that relationship.13 We stress particularly that, in our complex, highly adversarial legal system, an individual or entity may in fact be denied the most fundamental elements of justice without prompt access to counsel. As this court observed in Martin v. Lauer, 686 F.2d 24 (D.C.Cir.1982): "[W]hile private parties must ordinarily pay their own legal fees, they have an undeniable right to retain counsel to ascertain their legal rights." Id. at 32 (emphasis added; footnote omitted).
19
The invalidity of a governmental attempt to deny counsel to a civil litigant was recognized in dictum over fifty years ago in Powell v. Alabama, 287 U.S. 45, 68-69, 53 S.Ct. 55, 64, 77 L.Ed. 158 (1932):
20
The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel.... If in any case, civil or criminal, a state or federal court were arbitrarily to refuse to hear a party by counsel, employed by and appearing for him, it reasonably may not be doubted that such a refusal would be a denial of a hearing, and, therefore, of due process in the constitutional sense.
21
More recent decisions have elaborated on the same basic theme. See, e.g., Goldberg v. Kelly, 397 U.S. 254, 270, 90 S.Ct. 1011, 1021, 25 L.Ed.2d 287 (1970) (AFDC recipient "must be allowed to retain an attorney [in benefits termination hearing] if he so desires"); Mosley v. St. Louis Southwestern Railway, 634 F.2d 942, 945 (5th Cir.) ("The right to the advice and assistance of retained counsel in civil litigation is implicit in the concept of due process, and extends to administrative, as well as courtroom, proceedings.") (citation omitted), cert. denied, 452 U.S. 906, 101 S.Ct. 3032, 69 L.Ed.2d 407 (1981); see also United Mine Workers, District 12 v. Illinois State Bar Association, 389 U.S. 217, 221-22, 88 S.Ct. 353, 355-56, 19 L.Ed.2d 426 (1967) (striking down, on first amendment grounds, state rule barring union from hiring attorney to assist its members in the assertion of their legal rights).14
22
We place against this backdrop OFAC's assertion of power to stop AAC from obtaining counsel unless and until the government licenses the corporation to do so. Even in the absence of a marked constitutional dimension to the problem, sensible construction of the Act would not encompass OFAC's current, unprecedented, reading of highly general clauses. The agency, we believe, has gone beyond mere interpretation. It has effectively legislated in an area in which our tradition indicates the lawmakers themselves--Congress--should speak with a clear voice in advance of administrative action.
23
When we add to our consideration the constitutional dimension plaintiff's access-to-counsel plea entails, we find the case against OFAC's position overwhelming. As OFAC would have it, once an entity, although incorporated in the United States, has been administratively designated a foreign national, and therefore placed under government control regarding commercial matters, the designated corporation can be subjected to the decision of a government office, bounded by no standards that have been presented to us, even as to the very question whether the corporation can meaningfully challenge the designation through counsel.15 We reject that bold view. Instead, we construe the Act and regulations thereunder "in a manner that not only upholds their constitutionality but also steers clear of uncertainty on that score." Kelsey v. Weinberger, 498 F.2d 701, 708 (D.C.Cir.1974) (footnote omitted); see also Tagle v. Regan, 643 F.2d 1058, 1067 (5th Cir.1981) (construing TWEA).16 See generally NLRB v. Catholic Bishop, 440 U.S. 490, 500-01, 99 S.Ct. 1313, 1318-19, 59 L.Ed.2d 533 (1979) (courts should prefer plausible construction of statute that avoids "serious constitutional questions" to agency's construction raising such questions, unless agency's position reflects "the affirmative intention of the Congress clearly expressed").17
III.
24
We thus conclude that Mayerson was properly retained by AAC as its counsel on or about September 9, 1982. No termination of that relationship by a person speaking for AAC is reflected in the materials supplied to us; the relationship thus continues in effect.18 At such time as a person with authority to speak for AAC terminates the relationship, it will come to an end.
25
To clarify and summarize our disposition, we add these closing remarks. TWEA, as implemented by the CACR, gives OFAC authority to control, in almost every respect, AAC's commercial relations with the outside world. AAC does not argue otherwise. See Brief for Appellant at 16. OFAC's power, however, extends only to the freezing or blocking of AAC's assets and the licensing of its transactions; OFAC has no authority to seize the corporation itself, to vest its assets,19 or--beyond the power it has over employment contracts entered into by AAC--to rearrange its internal affairs.20
26
OFAC has undisputed power to deny AAC permission to engage in specified commercial transactions. We caution here that nothing in our disposition is properly read as authorizing payment to counsel without the approval of OFAC. But OFAC may not, to give an extreme example, take a member of its own staff and, without regard to AAC's corporate structure, install that person as AAC's new chief executive officer, thereby controlling AAC's operations from the inside. If it could, then the entire CACR licensing scheme, predicated on external control, would be superfluous as applied to corporations.
27
State law, beyond question, is pre-empted when it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941). But OFAC has not demonstrated why it is insufficient to control, through licensing, all transactions reaching the assets of AAC, a Florida-chartered corporation now designated a Cuban national, or how taking the corporation over from the inside, incidentally eliminating any genuine possibility of judicial review at the corporation's behest, furthers the balancing of interests embodied in the congressional external control scheme. The internal structure of a designated national corporation remains properly governed by state law, not by agency fiat, in the absence of a concrete showing that state law in fact conflicts with federal purposes and objectives.
28
OFAC has repeatedly taken the position that it recognizes only Frank Masdeu as having any authority to speak for AAC, or to request any license on the company's behalf. We express no opinion as to whether Masdeu, or anyone else, may properly speak for the company. We emphasize, however, that questions of AAC's internal structure, and of who may speak for AAC when certain of its officers have been incapacitated by OFAC or by other federal action, are questions properly referred in the first instance to state law. Thus Florida law is the appropriate initial reference in determining who has authority to terminate the relationship between AAC and Mayerson or to hire other counsel.
IV.
29
In enforcing section 5(b) of TWEA, OFAC must seek resolution of "the paradox posed by the need for emergency power in a constitutional regime." Note, The International Emergency Economic Powers Act: A Congressional Attempt to Control Presidential Emergency Power, 96 HARV.L.REV. 1102, 1112 (1983). We are a constitutional regime in which even emergency power is subject to limitations under our highest law. OFAC's unprecedented action in this case has disturbing implications. The government agency charged with control over a corporation's external transactions, and the distribution of any of its assets, appears here to seek as well to stifle any voice the corporation might wish to raise before the courts in protest. We doubt that such an attempt is "worthy of our great government." Brandt v. Hickel, 427 F.2d 53, 57 (9th Cir.1970). We find no congressional authorization for it.
30
For the reasons stated, the judgment of the district court is reversed and the case is remanded for proceedings consistent with this opinion.
31
It is so ordered.
HAROLD H. GREENE, District Judge (concurring):
32
The Office of Foreign Assets Control (OFAC), a minor Treasury Department bureau, has decided that, because it had listed appellant as a Cuban national, it also had the authority to prevent that corporation from being represented by counsel. This decision, if upheld, would have the effect of precluding appellant, through counsel, from contesting OFAC's actions either administratively or in the courts, from litigating in the Florida courts OFAC's decision to recognize its chosen individual as the official head of the corporation, or from handling any other legal business. This assertion of authority is unprecedented in the annals of the Trading with the Enemy Act or any other law to which we have been referred.1 I agree entirely with Judge Ginsburg's analysis of the applicable law as not permitting such an exercise of power, and I also agree with her that, were OFAC's position sustained, the implications would be both far-reaching and dangerous. Whatever authority our society may have granted to government, it has always placed a high value on the ability of those at the receiving end of bureaucratic edicts to contest in the courts the legality of what was done to them.
33
The Catch-22 label from Joseph Heller's book of the same name has been applied so often to so many situations that it has by now acquired the status of a cliche. But it is difficult to imagine a situation where that label is more apt: a corporation is summarily designated by a governmental agency as a "Cuban national," but it is not allowed effectively to defend itself against that designation on the theory that, because it is a "Cuban national," the designating agency need not permit it to be represented by counsel to challenge the designation.2 If there are precedents in American law to such circular processes, they have not been pointed out to us.
34
Two basic points made in support of OFAC's position deserve further note.
35
First, OFAC has informed the Court that some of those involved in the management of the corporation were engaged in improper or even unlawful activities involving Cuba. But that is hardly a reason for depriving that corporation of the right to choose and retain counsel. We do not deny counsel to murderers or to rapists, to those accused or convicted of treason or espionage, or to those who sue the government to seek access to sensitive national security documents, to cite but a few examples, and I therefore see no basis for depriving this appellant of its retained counsel because some of its officers may be unsavory. Whatever the corporation and its officers may be, they surely do not represent such a menace to this country--in excess of the danger presented by those in the categories enumerated above--that the corporation must be so singled out. If the claims appellant may wish to assert before the administrative agency or in the courts are without validity, that will become apparent soon enough, whether or not counsel continues to represent it; if appellant does have valid claims, it should be allowed to present them in an effective manner, irrespective of the backgrounds or histories of its officers.
36
Second, OFAC contends that, if appellant is allowed to be represented by its previously retained counsel, the next step will be to require counsel to be paid, in violation of the freezing regulations. Insofar as I am concerned, there is nothing in our disposition of this case that would give counsel any claim to payment if such payment is prohibited by the appropriate regulations. Thus, I do not share OFAC's concern about appellant's lawyer or the issue of his payment. If that attorney wants to proceed with his representation on what may turn out to be a volunteer basis, well and good. But this Court has not by its decision created for him a means for securing a fee.
37
The dissent would return the case to the District Court3 to explore issues relating to Florida law4 and to the exhaustion of administrative remedies. But there are neither new facts nor Florida legal principles for the District Court to consider. Moreover, OFAC made it clear both initially and after our inquiry following oral argument that it had no intention of granting a license to appellant which would enable the corporation to continue to employ counsel.5 Whatever powers the Treasury may have--and I agree that they are extensive--they do not include the power to deny a designated individual or corporation the right to hire counsel, let alone the power to cut off an attorney-client relationship previously established.
38
With these additional observations, I concur fully in Judge Ginsburg's opinion for the Court and in the disposition of the appeal made by that opinion.
39
MACKINNON, Senior Circuit Judge (dissenting in part and concurring in remand):
40
In my opinion, this case should be remanded to the district court to determine whether or not a case or controversy exists. That court has not been allowed to evaluate the latest developments in the case, and should be permitted to consider, in the first instance, a variety of issues which are far from clear on this record and which undermine the majority's attempt to reach the merits of the case. I do not join the majority's opinion, which relies on a record that contains far more questions than answers and which signficantly impairs the ability of the Government to supervise and control the business activities of Cuban entities within the United States.
I.
41
First, some facts which are not noted in the majority's opinion place the actions of the Office of Foreign Assets Control (the "Control Office") in a more reasonable light than does the majority's opinion. This is not, as the majority implies, a case where some hapless corporation finds itself caught in the coils of a Kafkaesque bureaucracy that is systematically attempting to deprive it of its rights. It is, in fact, a case where the Government is questioning the continuing validity of an alleged employment contract under which an admittedly Cuban-controlled corporation may be charged $100 an hour in legal fees--for no specified corporate purpose--thus using up limited corporate assets that are needed to pay off the corporation's creditors.
42
It is undisputed at this point that Cuba controlled American Airways Charters, Inc. ("Airways"), a Florida corporation. That designation has never been challenged, and is not being challenged in this litigation. Airways' president and co-owner, Fernando Fuentes, already has been convicted of violating the Trading With the Enemy Act ("the Act"), for allowing assets of Airways to come into Cuban hands after it had been determined to be a Cuban national. His criminal conviction is not being challenged here. Fuentes' partner in Airways, Roger Dooley, was also indicted, and is now a fugitive from justice outside the United States. The present validity of an "open-ended" employment contract which it is claimed was entered into by Fuentes, after the corporation came under the jurisdiction of the Control Office, is an open question.
43
On April 7, 1982, Airways was designated by the Control Office as a "specially designated national" of Cuba (J.A. 15-16, 69).1 Thereafter, on the same day, Fuentes ordered one of Airways' planes to be flown on an unscheduled flight to Cuba. Affidavit of Dennis M. O'Connell, Director of Office of Foreign Assets Control (J.A. 72-74).2 The plane and other assets remaining in Cuba amount to about $375,000. That flight, made in defiance of American law, deprived the United States of a valuable asset that may be necessary to pay creditors of Airways. The Government, as the majority concedes, has a valid interest in preventing United States property from coming into Cuban hands.
44
The specific events leading to this section began on or about September 8, 1982, when Fuentes (according to his affidavit) informed a lawyer, Harold Mayerson, that he wanted him to represent Airways. This was five months after Airways had been designated as a Cuban national. At a subsequent conference with representatives of the Control Office on September 16, 1982, Mayerson presented two letters: one from Fuentes (dated September 13) and one from Mayerson (dated September 15). Both letters notified the Control Office that Mayerson had been retained to act as counsel to Airways. The Control Office advised Mayerson that a formal application was necessary under the Act and its implementing regulations. Mayerson refused to make formal application for a license. He later brought this action in Airways' name in the district court. The court dismissed the action for lack of a case or controversy. Mayerson appealed.
45
After argument on appeal, this court ordered Mayerson to apply for a license. He did so. The Control Office replied promptly by letter of April 12, 1984, as set forth in the margin.3 The Control Office's letter was in the form of a "conditional license," which conditioned Mayerson's employment on his furnishing additional information to the Control Office. Most of the additional information--including information regarding Mayerson's extensive contacts with other Cuban entities--has not been produced. Airways was subject to control under the Trading With the Enemy Act when it is claimed Mayerson was designated, and because he was hired by Fuentes (under whose presidency Airways was allowed to become a Cuban national) and because he seeks approval for his continuing employment as counsel, for no disclosed purpose,4 under a contract which he contends authorizes him to bill Airways $100 an hour for his services, the Control Office has continued in its refusal to license Mayerson, except on a conditional basis as heretofore noted. The inquiry by the Control Office to determine that Mayerson was properly authorized to represent the Corporation, that he was not actually intending to represent Fuentes, and that he had no conflict of interest that would disqualify him from representing Airways were all proper pre-license inquiries. So was the attempt to determine if Fuentes was trying to extend his authority and act as president of Airways after his disqualification.
II.
46
This case is simply not in the proper posture to permit resolution of the complex issues it contains. The district court ruled on the situation as it found it; the situation has now changed, and the case should be remanded for further proceedings.
47
At the time the district court rendered its decision in this case, Mayerson had not applied for a license to represent Airways. On appeal, it was clear that Mayerson had not exhausted his administrative remedies before bringing suit. The situation of this case was so muddled at oral argument that this court, to try to clear up some of the confusion, took the unusual step of ordering Mayerson to apply for a license. He did so. The Control Office responded by issuing a "conditional license" which demanded certain information and stated that the license would become effective only when someone currently authorized to act for Airways requested Mayerson's services. This "conditional license" marks the first time in this litigation that the agency has done anything beyond stating that it did not consider Mayerson to be Airways' lawyer. Thus, there is now--for the first time in this case --some concrete agency action for the trial court to review.
48
Moreover, it is entirely possible that there is still no case or controversy because when it was instituted the suit brought by Mayerson had not been properly authorized by responsible officers or directors of Airways. This lack of specific authority to institute the lawsuit when it was filed distinguishes this case from Dean Witter Reynolds, Inc. v. Fernandez, 741 F.2d 355 (11th Cir.1984). The majority's approach to this problem is to assert the bald conclusion that "facts not in dispute" demonstrate that the suit was properly authorized. See Maj. at n. 5. But on this record it is impossible to determine that Mayerson had adequate corporate authorization to bring this suit. The continuance of Mayerson's authority to act as a lawyer for Airways and to institute this specific suit at the time he did are, under the Trading With the Enemy Act, valid subjects for inquiry by the Control Office. The Control Office in making the inquiries posed by its conditions is exercising a specific duty imposed upon it by Congress and is not to be considered as a stranger to the situation.
49
Fuentes claims in an affidavit that, prior to his disqualification, he directed Mayerson "to take any and all actions necessary to represent [Airways'] rights and interests with respect to [the Control Office] or any other legal matter " (J.A. 32) (emphasis added). The delegation of such broad corporate authority is clearly ultra vires even a legal corporate president. A secret shareholders' meeting of Fuentes and Dooley in the Bahamas, that may or may not have been legal, apparently attempted to "ratify" Fuentes' action.5 Neither this shareholders' meeting, nor a subsequent directors' meeting, purported specifically to authorize the initiation of any lawsuit. The present suit was not specifically "ratified" by the shareholders. One issue is whether or not Fuentes' very broad statement, made long before this lawsuit was filed, and long before the subsequent attempted "ratification" of that statement, authorized the attorney to bring this specific lawsuit.
50
The majority relies for its position on this point on a section of a general treatise, which does not support its position. The treatise states:
51
The general rule that an attorney, who is clothed with no other authority than that arising from his employment in that capacity, has no power to compromise or settle or release and discharge his client's claim, applies equally to attorneys for corporations .... The general counsel of a corporation, in the absence of provision in the charter or bylaws, has no authority to institute and prosecute suits without the sanction of the directors or other proper officer.... But such an attorney may do all things incidental to the prosecution of the suit but which affect the remedy only and not the cause of action.
52
9 W. Fletcher, Cyclopedia of the Law of Private Corporations Sec. 483 (rev. perm. ed.1982) (emphasis added). The work goes on to state specifically that "[a]s a general rule the control of the conduct of litigation is the responsibility of the directors." 2 W. Fletcher, supra, Sec. 4119 (rev.perm.ed.1976) (emphasis added). Those provisions specifically apply to corporate general counsels; for outside retained attorneys like Mayerson, the rule is as follows:
53
They cannot themselves bring suits for the corporation, unless specially authorized, nor can they compromise or release a corporate claim; but they may do all things incidental to the prosecution of the suit, and which affect the remedy only and not the cause of action.
54
Id. Sec. 4220. Thus, even relying on the source cited by the majority, a lawyer cannot bring a lawsuit on behalf of a corporation unless, at the very least, he has been "specially authorized" to bring that particular suit. There is no "special" authorization for this suit in the present record, nor is any such authorization claimed. The district court has not passed upon whether Fuentes' claim of direction to "take any and all actions necessary to represent" Airways on "any legal matter" is adequate special authorization to bring this particular suit. On the contrary, it appears to be an attempt to delegate an overly wide discretion to institute law suits that is specifically vested by statute in the directors. This court on appeal cannot properly decide such a fact-based issue on the present record.
55
Moreover, the majority's reliance on an ambiguous paragraph from a general treatise for such an important point is curious. Clearly, the question of whether an agent has authority to bring a lawsuit is a matter of state law. In this case, as the majority frequently stresses, it is Florida law. Although the majority repeatedly chastises the Control Office--unjustly--for allegedly failing to determine Florida law,6 it does not attempt to determine Florida law on this issue.7 Either Florida law governs the internal workings of this corporation, or it does not. It cannot be followed on some issues and ignored on others.
56
The district court has not had the opportunity to determine Florida law on this point, or to evaluate the initial validity or subsequent continuance of the Fuentes-Mayerson relationship in light of that law. It is impossible on the present record to determine if this suit was properly authorized. That task is properly one for the trial court.
57
Despite their harsh condemnation of the Government, their claim to lofty principles of justice, and their high-sounding language, the majority and concurring opinions have merely gone a long way toward making this difficult case even more complicated. If the district court "stumbled" over the pitfalls of this case, see Maj. at 869, the majority, by contrast, has executed a half gainer onto the pavement. In its apparent eagerness to impugn the ethics and integrity of the Office of Foreign Assets Control, the majority has evaded all the jurisdictional problems and simply declared its own rule of law. Because the district court should pass on these questions in the first instance--especially in a case such as this where the factual record is in a highly unsatisfactory state for meaningful appellate review--I would remand to the district court to allow it to review the conditional license upon an adequate evidentiary record.8
III.
58
If it were necessary or proper to reach the merits of this case, as the majority has, I would have very serious doubts as to the majority's purported resolution of the issues. Most of those doubts revolve around the majority's attempt to either (1) ignore the fact that this case involves an employment contract, or (2) draw some kind of line between employment contracts for lawyers and those for accountants, consultants, and mechanics. Without attempting to decide the issues or provide detailed analysis, the following are my areas of disagreement with the majority and the concurring opinions.
A.
59
It is a basic principle that authority over the foreign affairs of the United States is constitutionally vested in the Executive Branch of our Government, subject to some legislation that must pass constitutional muster. The Judiciary necessarily has a limited role to play. As the Supreme Court recently noted, "Matters relating 'to the conduct of foreign relations ... are so exclusively entrusted to the political branches of government as to be largely immune from judicial inquiry or interference.' " Regan v. Wald, --- U.S. ---- at ----, 104 S.Ct. 3026, 3039, 82 L.Ed.2d 171 (1984) (quoting Harisiades v. Shaughnessy, 342 U.S. 580, 589, 72 S.Ct. 512, 519, 96 L.Ed. 586 (1952)).
60
The authority delegated by Congress to the President under the Trading With the Enemy Act is considerable. "[B]oth the legislative history and cases interpreting the [Act] fully sustain the broad authority of the Executive when acting under this Congressional grant of power." Dames & Moore v. Regan, 453 U.S. 654, 672, 101 S.Ct. 2972, 2983, 69 L.Ed.2d 918 (1981). The Supreme Court only recently refused to hold that the power originally granted to the President in the Act--and grandfathered as to Cuba under 1977 amendments to the Act--is to be narrowly construed. See Regan v. Wald, supra.
61
Examining the statute in light of the President's broad authority, it seems apparent that employment contracts of lawyers for countries or entities covered by the Trading With the Enemy Act would fall within the range of transactions for which the Control Office may require licenses. Section 5(b) of the Act provides that the Control Office, through "such rules and regulations as [it] may prescribe, by means of instructions, licenses, or otherwise," has the authority to
62
investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person ....
63
50 U.S.C.App. Sec. 5(b)(1)(B); 91 Stat. 1625 (emphasis added). Pursuant to this delegation of power, the Secretary of the Treasury promulgated Cuban Assets Control Regulation C.F.R. Sec. 515.201(b),9 which provides:
64
(b) All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury ... by means of regulations, rulings, instructions, licenses, or otherwise ...:
65
(1) All dealings in, including, without limitation, transfers, withdrawals, or exportations of, any property ....
66
The regulations specifically apply to "transfers of property" which is specifically defined in the Regulations as follows:
67
any actual or purported ... transaction ... the purpose, intent, or effect of which is to create ... any right, ... power, ... or interest with respect to any property and ... shall include the making of any power of attorney, ... contract, the appointment of any agent, or the exercise of any power of appointment ... or other power.
68
3 C.F.R. Sec. 515.310 (emphasis added). It thus appears that hiring a lawyer at $100 an hour "to take any and all actions necessary to represent [Airways'] rights and interests with respect to [the Control Office] or any other legal matter" (J.A. 32) constitutes "making a power of attorney," "making a contract," or "appointing an agent," and hence is a "transaction" subject to licensing by the Control Office. This authority brings attorney's contracts within the jurisdiction of the Trading With the Enemy Act in a manner similar to the way 11 U.S.C. Sec. 327(a) of the Bankruptcy Act brings the employment of attorneys within its jurisdiction:
69
Sec. 327. Employment of professional persons
70
(a) Except as otherwise provided in this section, the trustee, with the court's approval, may employ one or more attorneys, accountants, appraisers, auctioneers, or other professional persons, that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee's duties under this title.
71
(Emphasis added.) Under both Acts it is legitimate for the agency charged with carrying out the terms of the Act to inquire whether an attorney purporting to act for a subject corporation does "hold or represent an adverse interest to the estate [or corporation] ..." Id.
72
The majority cites some legislative history that it admits is "less than crystalline," but ignores one other indication of Congress' intent. Forty-one years ago, the court in Alexewicz v. General Aniline & Film Corp., 181 Misc. 181, 43 N.Y.S.2d 713 (Sup.Ct.1943), relying on essentially identical language, held:
73
[T]he Secretary of the Treasury, acting through his designated Treasury representative, had ample authority to condition the defendant's continuance in business upon a severance of relationships with those individuals whom the Government believed to be improper employees. Having the power to regulate or prohibit in toto the financial operations of the defendant, it had the implied authority to condition the continuance of the license to do business upon its approval of the employment practices of the corporation.
74
Id. at 724. The relevant provisions interpreted in the Alexewicz decision have continued substantially unchanged by Congress for these many years. This continuing Congressional acquiescence indicates that Congress did not consider such employment contracts to be beyond the reach of the Treasury.10
75
Indeed, the majority ultimately decides not to decide whether employment contracts as a class cannot be affected by the Control Office. But it seems clear that the majority would not have reached the same decision had the Office merely required a license for the hiring of an outside auditor. It is apparently the hiring of an attorney that makes the equation different. The majority tries to distinguish between the "bare formation of an attorney-client relationship," Maj. at 871, and the actual retention of counsel, which obviously implies payment.
B.
76
That an attorney--rather than a pipefitter--is involved in this case does not necessarily alter the legal situation. The majority justifies its narrow restriction of the Control Office's authority as necessary to avoid possible constitutional infirmities, i.e., infringement of the right to counsel. But this case does not involve a right to counsel under the Sixth Amendment (it is not a criminal case) or a right under the due process clause. The question is not whether the corporation had a right to appoint Mayerson as counsel, but whether the corporation properly authorized him to bring the suit.
77
I note, however, that the majority attempts to protect the right to counsel by drawing a theoretical line between issuing a license to a lawyer permitting him to enter into an employment contract, and issuing a license permitting him to be paid for performing under that contract. The majority apparently recognizes that the Control Office is free to refuse to allow Airways to pay Mayerson, but holds that it cannot forbid entry into the contractual relationship itself. In other words, the Office can bar performance of contracts for legal services, but not creation of such contracts. That is a very fine distinction, and hardly a practical one. It seems elementary that if one has a right to a lawyer it must include a right to pay the lawyer.11 An employment contract is generally considered to include both services and reasonable compensation.
78
Mayerson claims to have been hired as Airways' lawyer. He thus contends he has a contractual relationship with the corporation. He is not representing it on a pro bono basis; he fully intends to be paid his $100 an hour fee for whatever services he renders, and he intends to be paid out of the corporate assets that the Government is trying to preserve for Airways' creditors. To assert that the Control Office cannot forbid the creation of a contract to provide legal services at $100 an hour, but can forbid its performance, would exalt form over substance. On this point, the concurring opinion concurs with this opinion that Mayerson cannot be paid by the corporation unless authorized by the Control Office.
C.
79
Part III of the majority's opinion attempts to buttress its case by the use of a straw man: the majority characterizes the Control Office's position as authorizing it to "tak[e] the corporation over from the inside." The Government has never made such an argument. It simply claims the authority to regulate Airways' external relationships, including entry into a contract for legal services not properly authorized by the corporation or the Control Office.
The majority begins by asserting that
80
[the Control Office] has no authority to seize the corporation itself, to vest its assets, or--beyond the power it has over employment contracts entered into by [Airways]--to rearrange its internal affairs.
81
Maj. at 874. The Office, however, has made no attempt to "seize the corporation," or "vest its assets," or "rearrange its internal affairs." It has done only two things: (1) prohibit the president from acting for the corporation (which the majority acknowledges that it may do), and (2) prohibit the creation of an employment contract without a license from the Control Office.
The majority goes on to state:
82
But [the Control Office] may not, to give an extreme example, take a member of its own staff and, without regard to [Airways'] corporate structure, install that person as [Airways'] new chief executive officer, thereby controlling [Airways'] operations from the inside.
83
Maj. at 875. The Control Office has not, of course, done this. Should it attempt improperly to do this at some time in the future, it can properly be reprimanded. Since it has not, the majority is just building straw men.
84
Finally, the majority suggests that the Control Office has failed to show "how taking the corporation over from the inside ... furthers the balancing of interests embodied in the congressional external control scheme." Maj. at 875. The Office's failure to make that showing may be due to the fact that it has never attempted to take over the corporation.
85
All of this miscast argument leads up to part IV of the opinion, in which the Control Office's understandable reluctance to license the creation of an open contract obligating Airways to pay $100 an hour in legal fees is somehow found to be unworthy of the officers of our great Government. On the contrary, what evidence appears in this generally inadequate record supports an inference that the Control Office has acted in an intelligent, competent manner, and apparently within the scope of statutory and constitutional authority.
IV.
86
In sum, the majority's attempt to draw a line between creation and performance of contracts is unconvincing; its misapplication of the right to counsel concept overlooks the fact that the real question is whether counsel under the corporate articles and bylaws and the laws of Florida was properly authorized to bring this lawsuit; and its refusal to recognize the broad foreign affairs authority of the Executive when acting pursuant to additional authority from the Congress usurps the constitutional power vested in the President and the Congress.
87
Most importantly, however, it is entirely possible that there is no case or controversy, and the district court should be permitted to address that issue on remand. For that reason, I agree with the remand to the district court. As to the legal issues purportedly resolved in the majority and concurring opinions,12 I must respectfully dissent.
*
Sitting by designation pursuant to 28 U.S.C. Sec. 292(a)
1
Section 5(b), subject to certain exceptions, no longer applies when the nation is not at war; instead, during peacetime, the International Emergency Economic Powers Act, 50 U.S.C. Secs. 1701-1706 (1982), generally governs. See Act of Dec. 28, 1977, Pub.L. No. 95-223, Sec. 101(a), 91 Stat. 1625, 1625. The case before us, however, falls within one of the exceptions. Under id. Sec. 101(b), 91 Stat. at 1625,
the authorities conferred upon the President by section 5(b) of the Trading With the Enemy Act, which were being exercised with respect to a country on July 1, 1977, as a result of a national emergency declared by the President before such date, may continue to be exercised with respect to such country [if the President determines it to be in the national interest].
The Cuban Assets Control Regulations, 31 C.F.R. pt. 515 (1983), promulgated by OFAC pursuant to Sec. 5(b), remain in force under this grandfather clause. See generally Regan v. Wald, --- U.S. ----, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984).
OFAC does not rely in this litigation on any authority stemming from Sec. 620(a) of the Foreign Assistance Act of 1961, 22 U.S.C. Sec. 2370(a) (1982). Cf. Regan v. Wald, --- U.S. at ---- n. 1, 104 S.Ct. at 3030 n. 1.
2
31 C.F.R. Secs. 515.302, .305, .201(d) define the terms "[Cuban] national" and "designated national" to include any person who has been a Cuban citizen, and "any person who has been within [Cuba,] whether domiciled or resident therein or otherwise," at any time on or since July 8, 1963; any organization organized under Cuban law; any organization that on or since July 8, 1963, had or has had its principal place of business in Cuba; any organization that on or since July 8, 1963, has been controlled, directly or indirectly, by Cuba or Cuban nationals; any person to the extent that that person is or has been, since July 8, 1963, acting or purporting to act directly or indirectly for the benefit of or on behalf of any Cuban national; and "[a]ny other person who there is reasonable cause to believe is a [Cuban] 'national' as defined in this section." 31 C.F.R. Sec. 515.302(b) further provides: "The Secretary of the Treasury retains full power to determine that any person is or shall be deemed to be a 'national' within the meaning of this section ...."
31
C.F.R. Secs. 515.306, .305, .201(d) define the term "specially designated national" to include any person who, on or since July 8, 1963, has acted for or on behalf of the Cuban government; any organization that on or since July 8, 1963, has been owned or controlled directly or indirectly by the Cuban government or by any specially designated national; and "[a]ny person who is determined by the Secretary of the Treasury to be a specially designated national."
In this proceeding, AAC does not contest its status as a "specially designated national."
3
In an affidavit supporting defendants' motion for summary judgment in the district court, OFAC's director characterized as "gross overstatement" the plaintiff's contention "that this is the first time in which OFAC has ever sought to require a foreign national to obtain a license to retain counsel." J.A. 76; see also OFAC Brief at 27 (repeating the "overstatement" characterization)
Several members of the bar experienced in representing clients before OFAC presented affidavits to the district court fully consistent with the description of OFAC's position here as an unheralded, radical departure from prior practice. These affidavits inform that attorneys for designated nationals did obtain licenses for payment of legal fees, but had never known or heard of any case, prior to this one, in which OFAC conditioned mere representation of a designated national on an advance application for and grant of a license. See J.A. 29 (Mayerson affidavit); id. at 35 (Lear affidavit); id. at 36-37 (Rabinowitz affidavit); id. at 38-39 (Faulkner affidavit). OFAC, in face of these affidavits, did not call to the district court's attention any past occasion on which OFAC had announced or proposed that a designated national must seek and receive a license before obtaining legal representation. Nor has OFAC contended in this court that it has, at any time prior to the episode in suit, asserted that representation, without more, requires a license.
4
The district court compared AAC, once it was designated a Cuban national, to a principal incapacitated by death or insanity. J.A. 7
5
We note the Catch-22 quality of this reasoning: the named plaintiff's incapacity to "prosecut[e] ... this suit by counsel," J.A. 7, the district court essentially held, can be overcome only if the named defendants grant a license "authoriz[ing] the[ir] prosecution." Id. See also infra note 15 and accompanying text
In this court, OFAC has elaborated on the district court's terse disposition. OFAC asserts that no case or controversy exists because suit was not properly authorized by AAC. According to OFAC, neither AAC's authorization (through Fuentes) of Mayerson on or about Sept. 9 to "take any and all actions necessary to represent [AAC] and to protect [its] rights and interests with respect to OFAC or any other legal matter," J.A. 32-33, see OFAC Brief at 14, nor any actions that were or could have been taken at a subsequent meeting, styled a Special Meeting in lieu of Annual Meeting of Shareholders, of Fuentes and Roger Dooley (AAC's sole shareholders), constituted valid authorization for the litigation. OFAC points out that Frank Masdeu, the person it recognizes as sole "spokesman" for AAC, OFAC Brief at 20, did not request Mayerson to commence this civil proceeding. Masdeu is a vice-president of AAC but, unlike Fuentes and Dooley, he holds no shares in the company.
We need not address the particulars of OFAC's "no case or controversy" contention. This suit, given the facts not in dispute, see infra p. 870, received adequate and appropriate "sanction of the directors or other proper officer." 2 FLETCHER, CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS Sec. 483 (1982). Under Florida law, the president of a corporation has authority to engage the services of counsel and institute suits on the corporation's behalf. See Conlee Constr. Co. v. Cay Constr. Co., 221 So.2d 792, 795 (Fla.Dist.Ct.App.1969).
6
No contest has been raised in this proceeding concerning OFAC's decision prohibiting Fuentes, on and after September 17, 1982, from "engaging in any transactions for, on behalf of, or with [AAC], without a specific license from [OFAC]." J.A. 20
7
OFAC additionally maintained on brief and at oral argument that AAC's suit should be dismissed because the company had not exhausted its administrative remedies by filing a formal license request, or having one filed by Mayerson. That position is no longer tenable. Upon consideration of the representation of Dennis O'Connell, OFAC's director, that OFAC was "prepared to act quickly on any application AAC may wish to make to hire the counsel of its choice," and the indication of OFAC's counsel at oral argument that the agency would give prompt consideration to a filing by counsel relating to AAC's retention of Mayerson, we instructed Mayerson to file
a [formal] application with OFAC ... to confirm his representation of appellant American Airways Charters, Inc., pursuant to the September 1982 exchange of correspondence between Mr. Fuentes, Mr. Mayerson, and Mr. O'Connell ..., and to confirm his representation of appellant in the instant litigation for a declaration of appellant's right to retain counsel of its choice.
We further stated:
This instruction is without prejudice to the position advanced by Mr. Mayerson that the relevant federal law does not mandate, and the Constitution forbids, a requirement of OFAC licensing for the retention of counsel by a designated national.
American Airways Charters, Inc. v. Regan, No. 83-1860 (D.C.Cir. Mar. 29, 1984). Our order directed OFAC to act expeditiously on Mayerson's filing.
OFAC, in response to Mayerson's filing, issued him a document it styled a "conditional license." See Motion for Remand at 1. The license, OFAC informed Mayerson, would become effective only upon his submission to the agency of satisfactory evidence that Frank Masdeu, the person OFAC regards as sole "spokesman" for AAC, see supra p. 869 & note 5, had engaged his services on behalf of AAC. In addition, OFAC required Mayerson to answer a number of questions assertedly directed to whether representation of AAC by Mayerson might lead to a conflict of interest. OFAC subsequently informed Mayerson that "you have not met the conditions spelled out in the license" because "you have provided no indication that Mr. Masdeu seeks your services for AAC." Letter from Dennis M. O'Connell, Director of OFAC, to Harold A. Mayerson (May 7, 1984).
8
But see supra note 1
9
Prior to 1941, the Act extended to the President authority limited to
transactions in foreign exchange, transfers of credit between or payments by or to banking institutions ... and export, hoarding, melting, or earmarking of gold or silver coin or bullion or currency, and any transfer, withdrawal or exportation of, or dealing in, any evidences of indebtedness or evidences of ownership of property in which any foreign state or a national ... thereof ... has any interest.
See Act of May 7, 1940, ch. 185, Sec. 1, 54 Stat. 179, 179.
10
Some members of Congress stated that the Act as amended was intended to cover "all kinds of real and personal property belonging to aliens." 87 CONG.REC. 9861 (1941) (statement of Rep. Hancock); see also id. at 9863 (statement of Rep. Gwynne) ("this provision covers all property belonging to aliens that is within our jurisdiction"). That view, however, apparently was not deemed inconsistent with statements that "[s]ubsection (b) [in relevant part] is the same as the old law." Id. at 9865 (statement of Rep. Kefauver); see also id. at 9859. The old law's coverage, see supra note 9, did not on its face extend beyond foreign exchange transactions, banking transactions, and dealings in gold, silver, currency, and "evidences of indebtedness or evidences of ownership of property."
11
Cf. Real v. Simon, 510 F.2d at 563 (government asserted interest in "retain[ing] blocked funds for possible use or vesting to the United States should such a decision be made[,] and ... [in] us[ing] blocked funds for negotiation purposes in discussions with the Cuban government"; argument rejected, on ground that claimants to blocked fund were United States nationals and "it is not the intent of this country to use the property of one group of Americans to provide compensation to another group")
12
Cf. Groper v. Taff, 717 F.2d 1415, 1418 (D.C.Cir.1983) ("the district court bears responsibility for supervising the members of its bar [for conflict of interest] and its exercise of this supervisory duty is discretionary")
13
We would face a different case if Congress itself inaugurated the prior license requirement. We note that in 1938, Congress passed the Foreign Agents Registration Act, ch. 327, 52 Stat. 631 (1938) (codified as amended at 22 U.S.C. Secs. 611-621 (1982)), requiring agents of foreign principals to register with the Secretary of State. This Act requires registration only; it confers on the Secretary no authority to deny a registrant permission to act on behalf of the foreign principal. Initially, the legislation contained no explicit exemption for lawyers, and the Supreme Court refused to read such an exemption into the Act. Rabinowitz v. Kennedy, 376 U.S. 605, 84 S.Ct. 919, 11 L.Ed.2d 940 (1964) (attorneys representing Republic of Cuba required to register)
Although the Foreign Agents Registration Act serves only a notice, not a licensing function, Congress has indicated sensitivity to the lawyer's role. After the decision in Rabinowitz v. Kennedy, Congress amended the statute to exempt lawyers insofar as they engaged or agreed to engage in the legal representation of a disclosed foreign principal before a court of law or in the course of established agency proceedings. Act of July 4, 1966, Pub.L. No. 89-486, Sec. 3(b), 80 Stat. 244, 246 (codified at 22 U.S.C. Sec. 613(g) (1982)). Congress further amended a separate section of the Act to ensure that attorneys engaging in "routine ... advising and counseling [of] foreign clients" would be exempt. See H.R.REP. NO. 1470, 89th Cong., 2d Sess. 9-10, reprinted in 1966 U.S.Code Cong. & Ad.News 2397, 2405. This congressional action, when only registration was at stake, adds to our grave doubts that Congress ever entertained the notion that an executive officer might extract from highly general statutory language authority to initiate a prior license requirement governing an attorney's response to a client's request for representation.
14
It appears beyond sensible debate that corporations, in our society, do indeed enjoy the right to retain counsel. Corporations may not assert "purely personal" rights but, no less than natural persons, they are entitled to due process and the equal protection of the laws. Grosjean v. American Press Co., 297 U.S. 233, 244, 56 S.Ct. 444, 446, 80 L.Ed. 660 (1936). As our sister court observed, "the right to effective assistance of counsel is not so peculiarly applicable to individuals that corporations should not be entitled to it." United States v. Rad-O-Lite of Philadelphia, Inc., 612 F.2d 740, 743 (3d Cir.1979). In fact, denying a corporation the right to retain counsel may be tantamount to stripping the corporation of its right to defend itself in court, for "it is established that a corporation, which is an artificial entity that can only act through agents, cannot proceed pro se." Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20, 22 (2d Cir.1983). A human shareholder's right to representation, of course, does not obviate the need for counsel to the corporation. No shareholder--not even a sole shareholder--has standing in the usual case to bring suit in his individual capacity on a claim that belongs to the corporation. See, e.g., Sherman v. British Leyland Motors, Ltd., 601 F.2d 429, 439-40 (9th Cir.1979); see also, e.g., Blum v. Morgan Guar. Trust Co., 539 F.2d 1388, 1390 (5th Cir.1976) (individual shareholder will not be permitted to sue derivatively on the corporation's behalf if court concludes that conflict of interest prevents him from serving as an appropriate representative)
15
If OFAC is correct, AAC would also be precluded from litigating in the Florida courts any issues relating to its corporate existence, including the identity of its lawful spokesman
16
OFAC maintains that plaintiff's effort to implicate constitutional concerns is "no different," OFAC Brief at 25, from the first amendment argument rejected in Veterans & Reservists for Peace in Vietnam v. Regional Comm'r of Customs, 459 F.2d 676 (3d Cir.), cert. denied, 409 U.S. 933, 93 S.Ct. 232, 34 L.Ed.2d 188 (1972). In Veterans & Reservists, the Third Circuit upheld OFAC's requirement that plaintiff secure a license before receiving "Red Chinese literature," id. at 679, in the form of English-language newspapers mailed from North Vietnam. The court found the government's interest in regulating the flow of money to designated countries compelling, id. at 682, and indicated that requesters would be entitled to a license upon certifying that they did not intend to pay for the materials, either directly or indirectly. Id. at 683. The merits of the Veterans & Reservists decision are not before us. We note, however, that the government concern asserted in that case was the threat of transfer of currency to North Vietnam and (at the time of the seizure still subject to our embargo) the People's Republic of China, a concern at the heart of the Act. In this case, OFAC identifies no interest of comparable dimension that reasonably supports its actions
17
Even if OFAC's view of the law did not implicate constitutional concerns, the agency's insistence that we owe its construction deference would be dubious. Far from representing a consistent, longstanding agency interpretation, OFAC's current position apparently represents a sharp departure from prior practice, see supra note 3, first made public as a result of the events that precipitated this lawsuit, and explained, so far as the record shows, only in briefs and other papers generated by the litigation. See Tagle v. Regan, 643 F.2d at 1068 n. 13 ("[T]he Treasury's interpretation of its authority [under TWEA] is neither contemporaneous with the statute's enactment, nor consistent with its earlier views. These facts considerably reduce the deference paid to its current position ....")
18
Counsel for OFAC stated at oral argument that even if an attorney-client relationship was formed on September 9, it was extinguished one week later, when OFAC barred Fuentes from engaging in further transactions on behalf of AAC. The attorney-client relationship lapsed, counsel argued, when Fuentes became disabled
OFAC's portrayal of agency law is novel indeed. When OFAC barred Fuentes, his ability to serve as AAC's agent ended; but we do not comprehend how that act served as well to terminate the pre-existing, ongoing agency relationship between AAC and Mayerson. See generally RESTATEMENT (SECOND) OF AGENCY Sec. 121 comment c, illustration 2 (1957).
19
The war powers granted to the President under the 1941 amendments to the Act did include the power to "vest" assets of foreign nationals. See Silesian-American Corp. v. Clark, 332 U.S. 469, 474-77, 68 S.Ct. 179, 181-82, 92 L.Ed. 81 (1947) (upholding as constitutional, under war power, federal government's vesting under Sec. 5(b) of stock beneficially owned by German national). However, OFAC does not purport to exercise that power under the CACR
20
OFAC cites Alexewicz v. General Aniline & Film Corp., 181 Misc. 181, 43 N.Y.S.2d 713 (Sup.Ct. Broome Cnty.1943), as authority for the proposition that AAC's state-law-prescribed internal corporate structure must "g[i]ve way in the face of TWEA's broad grant of foreign policy powers." OFAC Brief at 20. The General Aniline court, however, held only that the Treasury Department had authority, during the Second World War when the executive power in question reached its height, to order the termination of an employment contract between a German national corporation and plaintiff, an industrial chemist. We do not touch that holding here. Nor do we wrench language from the General Aniline decision out of context and transpose it to the different time and regulatory setting of this case
Other cases relied on by OFAC for its pronouncement that "state corporate law cannot justify a result contrary to ... the federal policies and purposes served by [TWEA]," OFAC Brief at 20, are similarly unhelpful. In Nielsen v. Secretary of the Treasury, 424 F.2d 833 (D.C.Cir.1970), the court relied upon the formal corporate structure of the entity in question and refused to pierce the corporate veil on behalf of the plaintiff shareholders. Sardino v. Federal Reserve Bank, 361 F.2d 106 (2d Cir.), cert. denied, 385 U.S. 898, 87 S.Ct. 203, 17 L.Ed.2d 130 (1966), stands simply for the proposition that OFAC has power, pursuant to the CACR, to freeze the bank account of a Cuban national.
1
It may be--although this has not been shown--that equivalent authority was exercised during the period when the government had statutory power to "vest," that is to take over, German or other enemy assets during World War I and World War II--a power which OFAC itself does not claim to possess now. The one substantive decision relied upon in this regard by the dissent--Alexewicz v. General Aniline & Film Corp., 181 Misc. 181, 43 N.Y.S.2d 713 (Sup.Ct.1943)--was rendered at the height of World War II, when the vesting provisions were in effect. In any event, unlike the dissent (at p. 877), I have difficulty regarding congressional inaction in the face of a decision by a court in Broome County as acquiescence in its holding
2
There is here yet another Catch-22 bootstrap. OFAC first unilaterally selected appellant's vice president as the corporation's single authorized spokesman; OFAC then concluded that, inasmuch as this chosen instrument did not request legal representation, it was established that the corporation did not desire counsel
3
The District Court would be required to determine whether Florida law might not conceivably (1) regard appellant's vice president rather than its president as that body's proper spokesman, and (2) require ratification by the shareholders of the retention of counsel by appellant's president and of the instant lawsuit. Since appellant through its president retained counsel before OFAC imposed any license requirement on appellant and since Florida law permits the president of a corporation to retain counsel (see note 5 of Judge Ginsburg's opinion), there is no basis for inquiring into these negatives--certainly not at the behest of a stranger to the corporation such as OFAC
4
OFAC, however, regards Florida law as irrelevant, arguing that under the Trading with the Enemy Act and the Constitution's Supremacy Clause, its decisions override state law
5
As early as September 17, 1982, OFAC informed appellant that "[w]e have no plans to issue new specific licenses to you." J.A. 20
1
The effect of this designation was to block all of Airways' assets and prohibit any transactions in property without a license from the Control Office
2
These allegations, made in the O'Connell affidavit, are not refuted by the appellants
3
In response to your application of March 30, 1984 on behalf of American Airways Charters, Inc. ("AAC"), pursuant to the March 29, 1984 Order of the United States Court of Appeals for the District of Columbia Circuit, the following action is taken:
1
You are hereby authorized to represent AAC as counsel until April 12, 1985, effective ten days following the receipt by this Office of satisfactory evidence and information in accordance with the conditions set forth in paragraphs two and three. This Office will conduct a review of the information and notify you prior to the expiration of the ten-day period whether the conditions have been satisfied
2
You are required to present to this Office satisfactory evidence, including appropriate documentation, that a person currently authorized to act for AAC has retained your services on behalf of the corporation
3
You are required to present to this Office the following information:
a. Have you ever represented any person or persons identified in your response to paragraph two above in any matter or have you been retained by such a person? If so, please identify the time period and explain the nature of the representation in detail.
b. Whose instructions do you intend to follow with regard to your representation involving AAC matters?
c. What are the scope and nature of your anticipated activities for or on behalf of AAC as legal counsel to AAC?
d. What is the anticipated cost of your services and what is the anticipated source of funds for payment of fees?
e. What relationship do you have now and have you had with Marazul Tours, Inc., a New York travel agency and air carrier providing Cuban travel services to Cuba?
f. What contact or dealing, if any, do you have, or have you had, with Havanatur, a Cuban controlled firm that is AAC's largest debtor and creditor, since January 1, 1982? Please explain in detail.
g. Please explain why it would not be a conflict of interest for you to represent AAC in light of the fact that you now represent or have very recently represented Marazul, which is dependent on concessions from Cuba for its significant Cuban travel business, and the Cuban entity Havanatur is AAC's principal debtor and creditor.
4
You are hereby advised that this license authorizes only the representation described in paragraph one and does not authorize any further actions or transactions involving AAC or its assets, including debits to any AAC funds. Any such further transactions would require separate specific licensing action by this Office
5
Unless extended, this license expires 30 days from the date of issuance thereof if the conditions set forth herein have not been satisfied by that date
(Emphasis added.)
4
There is no indication in the record, which the concurrence seems to overlook (Conc.Op. p. 876), that Mayerson is seeking to bring a belated action to contest its designation as a "Cuban national."
5
A substantial question exists whether the shareholders' meeting in the Bahamas comported with Florida law. Florida requires that a "majority" of the outstanding shares constitutes a quorum for conducting business, unless otherwise provided in the bylaws. Fla.Stat. Sec. 607.094. There is no evidence in the record as to how much of Airways stock each co-owner had. The May 27, 1983, meeting was conducted nine months after Fuentes was barred from acting for the corporation by the Control Office on September 17, 1982. The question is whether Fuentes, who had been disqualified from acting for Airways, could nevertheless thereafter exert control through a shareholders' meeting. If not, it is entirely possible that there was not a valid quorum present at the secret meeting. Such a fact-based question is obviously one that is initially for the trial court
6
The majority repeatedly implies that the Control Office somehow failed to follow Florida law when it decided that Airways' vice president was the proper person to deal with when its president was incapacitated. There is nothing in the record to indicate that the Control Office erred in recognizing Vice President Masdeu as the legal spokesman for Airways. The majority itself, since it has not consulted Florida law, is not in a position to determine whether Masdeu is or is not the proper individual, yet it is willing to criticize implicitly the Office's actions
Actually, Florida law provides that "[a]ll corporate powers shall be exercised by or under the authority of ... a board of directors," although the articles of incorporation (which do not appear in this record) may provide otherwise. Fla.Stat. Sec. 607.111(1). Thus, this court does not know whether the directors or the officers have the power to exercise "all corporate powers." The only required officers of a corporation in Florida are (1) the president, (2) the secretary, and (3) the treasurer. Id. Sec. 607.151(1). And the law provides that:
All officers and agents, as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided in the bylaws or as may be determined by resolution of the board of directors not inconsistent with the bylaws.
Id. Sec. 607.151(2) (emphasis added). It thus is clear that the question of who can act for Airways is not determined wholly by the Florida statute. What is required, as is usual under corporate law, is an examination of Airways' bylaws and its corporate resolutions. As these bylaws are not conclusive and the other corporate records are not in the record, the majority is in no position to criticize the Control Office's decision.
Similarly, the majority dismisses the Control Office's argument that Mayerson's authority lapsed when Fuentes was barred from acting by stating that the Office "misperceives agency law." Maj. at 874 n. 17. Despite its insistance on the applicability of Florida law, the majority cites solely to the Restatement (Second) of Agency, as if there was some overriding federal common law of agency. The Restatement rule may or may not coincide with that adopted by the courts of Florida, but Florida law must be examined before summarily dismissing an argument.
7
The majority does cite a Florida decision, Conlee Construction Co. v. Cay Construction Co., 221 So.2d 792 (Fla.Dist.Ct.App.1969), for the uncontroversial principle that "the president of a corporation has authority to engage the services of counsel on the corporation's behalf." Maj. at n. 5. But the question is not whether Fuentes could hire Mayerson to advise the corporation, but whether Fuentes himself could authorize the bringing of a particular suit, and whether Fuentes' very general statement amounted to such authorization. In Conlee, the board of directors deadlocked over whether to give special authorization for a suit; the president, who was a stockholder and authorized in that capacity to sue on behalf of the corporation, instituted suit to benefit the corporation. The court recognized that the Florida statute provides that "[t]he business of every corporation shall be managed and its corporate powers exercised by a board of not less than three directors," see Fla.Stat. Sec. 609.09, but noted that if directors are hopelessly deadlocked, "the president as chief executive officer of a going concern may even in the face of a deadlock take steps to protect corporate interests where immediate and vital injury threatens." 221 So.2d at 796. Under those circumstances, the court held that the suit was authorized. The case asserts that "in the absence of internal conflict, the president ..." may hire attorneys and institute suits. 221 So.2d at 795. But, internal conflict did exist here and the sanctions imposed by law as a result of the determination by the Control Office also satisfy that standard. Conlee did not purport to decide whether in the absence of explicit authorization from the board of directors, an earlier general designation by a corporate officer of a lawyer for no specific corporate purpose permits the lawyer on his own authority to institute lawsuits in the name of the corporation
8
The majority states that the case is to be remanded for "appropriate" relief, but nowhere indicates what that relief might be. The district judge who must attempt to implement the court's decision has a difficult task
9
See 50 U.S.C.App. Sec. 5 for Extension of National Emergency Powers, Cuban Assets Control Regulations, 31 C.F.R. Part 515, and history of extensions from 1978 to 1984
10
The majority attempts to downplay, by using bits of legislative history, the effects of the changes made in the Act in 1941. In fact, Congress granted to the President the power to define the terms used in the Act on December 18, 1941--11 days after Pearl Harbor. It is difficult to believe that Congress, with the nation at war on two continents, intended a narrow power to carry out the country's war aims. As the Alexewicz court recognized, Congress intended the 1941 amendments to the Act to "confer upon the President or his representative the broadest possible authority over the property of foreign nationals, in order to forestall the possibility that such property might be utilized for purposes hostile to the common defense." 43 N.Y.S.2d at 720 (emphasis added). So long as such powers do not offend the Constitution, the courts are obligated to give them full scope
11
Would the Court in Goldberg v. Kelly, 397 U.S. 254 (1970), for example, have upheld a regulation that permitted a welfare recipient to hire an attorney, but prohibited him from paying one?
12
The record here, as yet, does not prove that the authorized officers of the corporation property exercised the "right to choose and obtain counsel" or properly authorized this lawsuit which so far as appears is a request for authority to bring any lawsuit that the lawyer decided to bring--without prior approval of the corporation. The entire analysis of the concurring opinion is misguided, misstates the actual facts and indulges in extreme exaggeration. It is true that any person charged with a crime has a right to counsel, in fact every litigant has a right to counsel; but the continuing authority of counsel appointed by an ousted corporate officer is open to serious question, especially where the directors did not approve the appointment or the instigation of specific litigation, and the corporation has come under the licensing jurisdiction of the Control Office administering the Trading With the Enemy Act
|
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558 So.2d 785 (1990)
STATE of Louisiana
v.
Antoine SANDERS.
No. 89-KA-726.
Court of Appeal of Louisiana, Fifth Circuit.
March 14, 1990.
Bruce G. Whittaker, Indigent Defender Bd., Gretna, for defendant.
John M. Mamoulides, Dist. Atty., Alan Green, Dorothy A. Pendergast, Asst. Dist. Attys., Gretna, for the State.
Before KLIEBERT, DUFRESNE and WICKER, JJ.
*786 WICKER, Judge.
Defendant Antoine Sanders (Sanders) was charged by bill of information with a violation of L.S.A.-R.S. 14:67 in that he did commit theft of merchandise of a value of $225.42 belonging to Schwegmann's. A six person jury found him guilty of theft of property having a value of $100.00 or more. He was sentenced to serve two years imprisonment at hard labor, with credit for time served. We affirm the conviction and sentence.
The testimony at trial set out the following: On September 25, 1986, Kenneth Milton (Milton), while employed as assistant chief of security at the Schwegmann's located on Veterans Boulevard, observed Sanders take two unopened boxes of J & B Scotch Whiskey from the liquor section. Milton, standing about 10-15 feet from Sanders, observed him place the two cases of liquor in his empty grocery basket, walk between two checkout stands that were closed, proceed to the front of the store and attempt to leave without paying for the whiskey.
Sanders was halfway out the exit door of Schwegmann's when Milton approached him, identified himself, and asked him to come back inside the store. Sanders was then read his rights and detained in the security office until a deputy from the Jefferson Parish Sheriff's Office arrived. Milton testified that the only thing he recalled Sanders saying was that he was taking the liquor to sell because he wanted to buy some more crack.
Sanders was subsequently arrested by Deputy Timothy Bateson of the Jefferson Parish Sheriff's Office and charged with theft.
In addition to the testimony of the witnesses, the State introduced a photograph of the two cases of stolen liquor and also a photograph of Sanders taken by Milton after the incident. Milton identified these photographs in court.
Sanders now assigns two errors:
1. That the evidence introduced at trial was insufficient to uphold a verdict of guilty as charged in that the evidence of value was inadequate to prove beyond a reasonable doubt that the subject of the alleged theft was more than $100.00.
2. Any and all errors patent.
Sufficiency of Evidence
The standard used by a reviewing court in evaluating a claim of insufficient evidence is whether, viewing the evidence in the light most favorable to the prosecution, a rational trier of fact could have found the defendant guilty of every element of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979); State v. Mussall, 523 So.2d 1305 (La.1988).
In the instant case, the jury, after hearing all of the evidence found Sanders guilty of theft of property having a value of $100.00 or more. The elements of this offense are set forth in L.S.A.-R.S. 14:67 which provides, in pertinent part, as follows:
Theft is the misappropriation or taking of anything of value which belongs to another, either without the consent of the other to the misappropriation or taking, or by means of fraudulent conduct, practices, or representations. An intent to deprive the other permanently of whatever may be the subject of the misappropriation or taking is essential.
. . . . .
When the misappropriation or taking amounts to a value of one hundred dollars or more, but less than a value of five hundred dollars, the offender shall be imprisoned, with or without hard labor, for not more than two years, or may be fined not more than two thousand dollars, or both.
Therefore, in order to sustain a conviction, the State must prove beyond a reasonable doubt: (1) that Sanders misappropriated or took; (2) a thing of value; (3) that belonged to another; and (4) that Sanders had the intent to deprive the owner permanently of that which was misappropriated or taken. The State must further prove the value of the stolen property, for upon this proof depends the determination of the severity of the theft, and the punishment *787 for the convicted offender. State v. Bourg, 470 So.2d 291 (La.App. 5th Cir. 1985), writ denied, 475 So.2d 354 (La.1985).
We think the evidence presented to the jury was sufficient, considered in the light most favorable to the prosecution, to conclude that Sanders was guilty of theft of property having a value of over $100.00. The testimony of Milton, the security officer at Schwegmann's, established that on September 25, 1986, Sanders took two cases of J & B Scotch Whiskey from the liquor section of Schwegmann's and proceeded to exit the store without attempting to pay for the items. The intent to permanently deprive may be inferred from the facts and circumstances of Sanders' actions in that he put the two unopened cases of liquor in an empty basket, proceeded through two closed checkout stands to the front of the store, and then proceeded to exit the store without paying for the liquor. This testimony sufficiently established that Sanders took a thing of value that belonged to another with the intent to deprive the owner permanently of that which was taken.
In addition, the testimony at trial established the value of the property taken. Milton testified that the approximate value of the two cases of liquor was $225.42. He testified that this value was determined because "I got with the liquor supervisor and we verified the prices by the case." Thus, the State proved beyond a reasonable doubt that Sanders committed theft of property having a value of over $100.00. Accordingly, this assignment lacks merit.
Errors Patent
Also assigned as error are any and all errors patent on the face of the record. L.S.A.-C.Cr.Proc. Art. 920 provides that "[t]he following matters and no others shall be considered on appeal: (1) An error designated in the assignment of errors; and (2) An error that is discoverable by a mere inspection of the pleadings and proceedings and without inspection of the evidence."
For the purpose of an error patent review the "record" in a criminal case includes the caption, the time and the place of holding court, the indictment or information and the endorsement thereon, the arraignment, the plea of the accused, the bill of particulars filed in connection with a short form indictment or information, the mentioning of the impaneling of the jury, the minute entry reflecting sequestration in a capital case, the verdict, and the judgment or sentence. See State v. Oliveaux, 312 So.2d 337 (La.1975) and State v. Schneider, 542 So.2d 620 (La.App. 5th Cir. 1989), writ denied 548 So.2d 1245 (La. 1989).
A review of the record reflects that there are no errors patent. Accordingly, this assignment lacks merit.
Therefore, for the reasons stated, Sanders' conviction and sentence are affirmed.
AFFIRMED.
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NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JAN 10 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ISHKHANOHI ZOHRABIAN, AKA No. 16-73810
Eshkhanuhi Zohrabiam; ASATOOR
MERZEKHENIAN, AKA Asatoor Agency Nos. A075-688-901
Mardirosian, A075-688-902
Petitioners, MEMORANDUM*
v.
WILLIAM P. BARR, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted December 11, 2019**
Pasadena, California
Before: BOGGS,*** BEA, and HURWITZ, Circuit Judges.
Petitioners Ishkhanohi Zohrabian, a.k.a. Eshkhanuhi Zohrabiam, and Asatoor
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Danny J. Boggs, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
Merzekhenian, a.k.a. Asatoor Mardirosian, allegedly a married couple and natives
and citizens of Iran, arrived in the United States without inspection and in 2000 filed
in California a joint application for asylum, withholding of removal, and relief under
the Convention Against Torture (“CAT”), claiming that, as they were Armenian
Christians, they feared persecution if returned to Iran. After being charged with
removability as aliens present without admission or parole in violation of 8 U.S.C.
§ 1182(a)(6)(A)(i), Petitioners, who already admitted to the allegations in their
Notices to Appear, filed in Colorado new applications for asylum, withholding of
removal, and relief under CAT.
In the Colorado applications, Petitioners alleged different facts regarding their
identities and past, such as different names, birth details, dates of entry, family status,
details of their lives in Iran, and of alleged persecution. After an Immigration Judge
(“IJ”) found the applicants not credible, the Board of Immigration Appeals (“BIA”)
remanded their case back to California, where another IJ made an adverse credibility
determination based on Petitioners’ multiple filings and inconsistent testimonies,
including their admission of filing counterfeit documents regarding their identities,
births, and religious affiliations. The evidence filed by the government also
contradicted some of Petitioners’ allegations; for example, Petitioners were shown
to have previously filed U.S. non-immigrant visa applications in Armenia. The IJ
found that Petitioners had knowingly filed frivolous asylum applications and denied
2 16-73810
the applications for asylum, withholding of removal, and CAT protection.
Petitioners then appealed to the BIA the denial of withholding of removal and
CAT protection, but not the finding of filing frivolous asylum applications. The BIA
remanded the proceedings for further fact-finding. On remand, the IJ found that
additional documentation provided by Petitioners carried little evidentiary value to
show their purported ethnicity and religion, while a new birth certificate further
contradicted the one already in the record. The IJ denied relief on October 1, 2015,
finding that Petitioners neither established their identity as Armenian Christians nor
that they would be more likely than not persecuted or tortured upon removal to Iran.
After the BIA affirmed the decision of the Immigration Judge on November 3, 2016,
Petitioners timely filed the present petition for review.
This court has jurisdiction under 8 U.S.C. § 1252 to review a timely appeal
from a final order of removal. Abdisalan v. Holder, 774 F.3d 517, 523 (9th Cir. 2014)
(en banc). Denials of withholding of removal and CAT relief are reviewed under the
substantial evidence standard. Reyes v. Lynch, 842 F.3d 1125, 1137, 1140 (9th Cir.
2016). “[F]indings of fact are conclusive unless any reasonable adjudicator would
be compelled to conclude to the contrary.” 8 U.S.C. § 1252(b)(4)(B). In order to
grant a petition for review, we “must determine ‘that the evidence not only supports
[a contrary] conclusion, but compels it—and also compels the further conclusion’
that the petitioner meets the requisite standard for obtaining relief.” Garcia-Milian
3 16-73810
v. Holder, 755 F.3d 1026, 1031 (9th Cir. 2014) (alteration in original) (quoting INS
v. Elias-Zacarias, 502 U.S. 478, 481 n.l (1992)).
Considering Petitioners’ contradictory statements, supporting documentation,
and multiple, inconsistent applications for asylum, substantial evidence supported
the IJ’s conclusion that Petitioners failed to establish they were Iranian Armenians
of Christian faith and thus would not be subject to persecution upon removal to Iran.
See Garcia-Milian v. Holder, 755 F.3d 1026, 1031 (9th Cir. 2014) (“We . . . will
uphold a denial supported by reasonable, substantial, and probative evidence on the
record considered as a whole.” (internal quotation marks omitted)). Petitioners did
not provide identification documents. The alleged birth certificates of Petitioner
Zohrabian contained contradictory information and unexplained inconsistencies,
such as different dates of baptism and different names of the officiating reverend
and of the godfather. A letter provided by a reverend in California was appropriately
given little weight because it was only two sentences long and provided no
information about the extent of Petitioners’ involvement in the church. The
declaration of an Iranian national in support of Petitioner Zohrabian’s identity did
not provide any information about her faith.
Substantial evidence also supports the IJ’s determination that Petitioners are
ineligible for CAT protection. The two reports submitted by Petitioners do not
4 16-73810
establish that it is more likely than not they will be tortured if removed to Iran, and
the evidence fails to compel a different result. See 8 C.F.R. § 1208.16(c)(2).
Thus, we DENY THE PETITION FOR REVIEW.
5 16-73810
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Order entered October 21, 2013
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-01023-CR
THE STATE OF TEXAS, Appellant
V.
ELI RODRIGUEZ, Appellee
On Appeal from the Criminal District Court No. 6
Dallas County, Texas
Trial Court Cause No. F11-36048-X
ORDER
The reporter’s record has been filed in this appeal, but the clerk’s record has not been
filed. Accordingly, the Court ORDERS the Dallas County District Clerk to file the clerk’s
record within TWENTY-ONE DAYS of the date of this order.
We DIRECT the Clerk to send copies of this order, by electronic transmission, to Gary
Fitzsimmons, Dallas County District Clerk; the Dallas County District Clerk’s Office, Criminal
Records Division; and to counsel for all parties.
/s/ DAVID EVANS
JUSTICE
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-6294
CLETON DAVIS,
Plaintiff – Appellant,
v.
HUGHES KENNEDY REVELEY, JR., Public Defender,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Liam O’Grady, District
Judge. (1:10-cv-01383-LO-TRJ)
Submitted: July 13, 2011 Decided: July 21, 2011
Before KEENAN and WYNN, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Cleton Davis, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Cleton Davis appeals the district court’s order
denying relief on his 42 U.S.C. § 1983 (2006) complaint alleging
that his court-appointed attorney failed to represent him
adequately at trial. Because a court-appointed defender “does
not act under color of state law when performing a lawyer’s
traditional functions as counsel to a defendant in a criminal
proceeding,” Davis’ former attorney cannot be sued under Section
1983. See Polk County v. Dodson, 454 U.S. 312, 317-19 (1981).
Accordingly, we find no reversible error and affirm for the
reasons stated by the district court. Davis v. Reveley, No.
1:10-cv-01383-LO-TRJ (E.D. Va. Feb. 7, 2011). We dispense with
oral argument because the facts and legal contentions are
adequately presented in the materials before the court and
argument would not aid the decisional process.
AFFIRMED
2
|
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|
993 So.2d 520 (2008)
MONROE
v.
STATE.
No. 1D07-5441.
District Court of Appeal of Florida, First District.
October 30, 2008.
Decision without published opinion. Affirmed.
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298 So.2d 352 (1974)
Fred O. DICKINSON, Jr., Appellant,
v.
The Honorable Ray B. BRADLEY, Etc., Appellee.
No. 44743.
Supreme Court of Florida.
July 31, 1974.
*353 Larry Levy, Gen. Counsel, Office of the Comptroller, Tallahassee, for appellant.
Fred W. Baggett, Tallahassee, and Michael Colodny, Miami, for appellee.
BOYD, Justice.
This cause is before us on appeal from the Circuit Court, Leon County. The trial court, in its final summary judgment, held that Appellant's attack on Chapter 71-468 as being unconstitutional was without merit, thereby giving this Court jurisdiction of the direct appeal.[1]
The facts of this case are as follows.
In 1962 Appellee, Plaintiff below, was elected to the office of Constable of the Second District of Dade County; he was re-elected to that office in 1964. In 1965 the Dade County Commission enacted an ordinance providing that all funds collected by Constables be remitted directly to the County and that Constables be paid solely through the County. Having been indicted on November 3, 1966, on a perjury charge by the Dade County grand jury, Appellee was suspended from office. On January 19, 1967, Appellee was removed from office, and on March 23, 1967, his replacement was appointed as Constable. Thereafter, Appellee was tried on the perjury charge and found guilty; however, on March 12, 1968, his conviction was reversed on appeal, and instead of seeking reinstatement to office, Appellee ran and was elected as Constable in November, 1968, taking office on January 7, 1969. In 1971 the Legislature enacted Chapter 71-468, Laws of Florida, which provided that the State reimburse Appellee $18,539.98 for compensation lost during his suspension from office. When Appellant-Comptroller refused to make payment pursuant to that statute on the ground, inter alia, that it is unconstitutional, Appellee sought a declaratory decree in the Leon County Circuit Court.
On the basis of these facts the trial court held as follows:
"7 ... This case is to be distinguished from the Dickinson case [Dickinson v. Board of Public Instruction of Dade County] [see Footnote[2]] ... in that here there is a recognition of liability of the state for the action of state *354 officers and bodies in the wrongful removal of plaintiff from office and thus depriving him of the emoluments of such office. In Dickinson, [supra] the act involved sought to direct the disbursal of Dade County funds for death resulting from negligence of the Dade County school system. Chap. 71-468 is not a special act in the sense of operating in a particular locality or single county even though the plaintiff was and is a county officer of Dade County. It may be reasoned that it is special in its restriction to a single person. However, any claim bill is restricted to less than the general public and its purpose is to discharge the state's moral obligation to any individual or other entity whom or which the legislature recognizes as being entitled to such. The purpose of requiring a notice of intention to be published in special legislation is to apprise the people in the locality to be peculiarly affected of such proposal so that those interested may take steps to oppose its enactment. Such is not the case here as this act does not appropriate the funds of any locality. The act is a valid claim bill, enacted as a general law and in full harmony with other statutory provisions relating to bills of this nature. The Dade County Charter is not involved in the slightest, nor are the other constitutional provisions which have been cited by the defendant. The statute of limitation (F.S. 95.37) does not prevent legislative action but only the presentation of a claim, and the defenses of laches and waiver do not inhibit appropriation of funds by the legislature. The legislature may enact a claim bill for what would be a tort if a private party was involved just as effectively as for what would constitute a contractual debt. However, it is the interference with plaintiff's contractual right to the emoluments of his office that is the subject of this act.
"8. The Court finds no impediment to the enactment of Chapter 74-428 [sic] by the legislature to compensate the plaintiff. However, the language that the `State of Florida' shall pay plaintiff the specified sum `out of general county funds' presents considerable difficulty in ascertaining what was intended. It is clear that it is the state and not a particular county which is to pay the sum. The plaintiff contends the payment is intended to be from funds derived from pari-mutual wagering and which is distributed to the counties pursuant to F.S. 550.13. The defendant seems to regard the language as restricting the source of funds for payment to be funds which would be distributed to Dade County. The description `general county funds' is not readily applicable to any statutory or administratively designated public monies. The pari-mutual wagering tax collections are very minutely committed for distribution to the several individual counties, and the Court will not construe a purpose to vary F.S. 550.13 by a claim bill unless such is clearly expressed. However, when the legislative intent is crystal clear, as here, that the state is to pay an individual for a debt the legislature finds is due and owing the effort will not be frustrated because of inartful draftsmanship or language that is not well chosen. The legislature has the power to appropriate general state tax revenues for any proper purpose including monies to be distributed to and administered by county officials. To that extent the general revenue funds of the state are available as general county funds subject to appropriation. Inasmuch as there is not ascertainable any designated general county funds' as such, but finding an unmistakable intent to compensate the plaintiff a sum certain by the state, it will be construed that the source of the funds is the general revenue fund of the state and that it is the duty of the defendant Comptroller and all other officials involved in the process to perform their respective functions toward carrying out and making effective the appropriation made."
We find that the trial judge, in paragraphs 7 and 8 of his summary judgment, *355 noted above, gave an able and accurate explanation of the law governing this case. We agree with his analysis therein.
Accordingly, the judgment of the trial court is affirmed.
It is so ordered.
ADKINS, C.J., and ROBERTS, ERVIN, McCAIN and OVERTON, JJ., concur.
NOTES
[1] Article V, Section 3(b)(1), Florida Constitution.
[2] 217 So.2d 553 (Fla. 1967).
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162 F.Supp. 684 (1958)
AIR LINE STEWARDS AND STEWARDESSES ASSOCIATION, INTERNATIONAL, Petitioner,
v.
NORTHWEST AIRLINES, Inc., Respondent.
Civ. No. 3-57-110.
United States District Court D. Minnesota, Third Division.
June 10, 1958.
Lee Loevinger, Minneapolis, Minn., Lee Leibik and Ruth Weyand, Chicago, Ill., by Lee Leibik, Chicago, Ill., for petitioner.
Dorsey, Owen, Barker, Scott & Barber, Minneapolis, Minn., by Henry Halladay, Minneapolis, Minn., for respondent.
DONOVAN, District Judge.
This case is before the court on petitioner's motion for summary judgment.[1] The motion is based upon the pleadings, exhibits and affidavits filed with the court. The parties will be referred to as petitioner and respondent.
The file reveals that respondent is a common carrier by air in interstate and foreign commerce, operating domestic and foreign routes under certificates of public convenience and necessity issued *685 by the Civil Aeronautics Board. It flies a foreign route from Seattle, Washington, to Anchorage, Alaska, or Shemya, Aleutian Islands, to Tokyo, Japan; and from Tokyo to Seoul, Korea; Okinawa; Manila, Philippine Islands; and Hong Kong, through intermediate points.
Petitioner has been duly authorized and designated by the National Mediation Board to represent the craft or class of Airline Flight Pursers, Flight Service Attendants and Stewardesses employed by respondent for the purposes of the Railway Labor Act,[2] hereinafter referred to as the Act.
The instant case stems from a dispute arising out of respondent's hiring foreign nationals as pursers and attendants on flights between Tokyo, Seoul, Manila, Hong Kong and intermediate points referred to by disputants as routes "south and west of Tokyo." The dispute was initiated by a group of respondent's employees filing a grievance with the petitioner's and respondent's System Board of Adjustment, charging that the criticized practice violated the governing employment agreement between the parties.
The employees were awarded a decision in the hearing on said grievance to the effect that the employment agreement had been violated by employment of foreign nationals on routes south and west of Tokyo. Respondent contended the award (known as the "Lindquist Award") was impossible of implementation. Extended negotiations between petitioner and respondent followed with a view to compromise. These culminated in a mediation agreement which provided that in the event further contemplated negotiations on the issues were unsuccessful, the respondent's proposals thereon shall be submitted to arbitration under the Act; the specific question to be as follows: "What, if any portion, of the Company's proposals for the use of foreign nationals shall be granted by the Arbitration Board?" This agreement also provided that respondent pay the sum of $10,000 as liquidated damages for any claim or claims arising under the Lindquist Award prior to settlement or arbitration award on the hiring issue, and that thereafter the Lindquist Award be without force and effect.
Failing to reach a settlement, the hiring issue was submitted to arbitration as provided by the mediation agreement. A third member (other than the two representing the disputants) not having been agreed upon, the National Mediation Board, pursuant to the mediation agreement and the Act, appointed the third or neutral member.[3]
Hearings were had, and determination made by the Arbitration Board. Two members of the Board joined in an award amending the employment agreement to read:
"Award
* * * * * *
"(a) In accordance with the certification (R-1747), made by the National Mediation Board on December 17, 1946, and as amended by the National Mediation Board on October 22, 1948 (R-2079), and June 20, 1950 (R-2295), the Company hereby recognizes the Air Line Stewards and Stewardesses Association, International, as the duly designated and authorized representative of the flight pursers, the flight service attendants, and the stewardesses in the employ of the Company for the purposes of the Railway Labor Act, as amended.
"(b) This Agreement covers all flight pursers, flight service attendants and stewardesses in the employ of the Company who are employed and assigned within the continental limits of the United States and its territories, and of employees in such positions when assigned to those segments of the Company's international passenger flights which originate or terminate in the United *686 States and its territories, and, also, of employees in such positions when assigned at the discretion of the Company on other international passenger flights except as specifically limited herein.
"(1) The Company shall have the right to assign foreign nationals to all cabin attendant positions on all international passenger flights operating over all international routes south and west of Japan including but not limited to the routes to and from Japan to points in Korea, Okinawa, Formosa, the Philippine Islands, Hong Kong, and to and from any other foreign station that the Company many [may] be certificated to serve, except that one employee covered by this agreement in a classification to be selected by the Company will be assigned to such passenger flights.
"(2) Foreign national cabin attendants assigned to flights under Paragraph (1) of this section will not come within the jurisdiction or scope of this agreement, nor shall any such foreign national employees be covered by nor subject to any provisions of this agreement. * * *"
This award was duly acknowledged and filed with the Clerk of this Court. Petitioner seasonably filed a petition to impeach said award on the ground that it plainly does not conform to the substantive requirements laid down by the Act for such awards.[4] Specifically, the petitioner alleges that the award is contrary to the provisions of Section 2, Fourth, Sixth, Seventh and Ninth of the Act[5], in that it:
(a) Deprives the majority of the craft or class of flight pursers, flight service attendants and stewardesses employed by respondent of the rights granted them by the Act to bargain collectively on behalf of all members of the craft or class, and to protect their wages, hours, seniority and other conditions of employment;
(b) Deprives all foreign nationals hired by respondent as members of the craft or class represented by petitioner of their rights under the Act and the Fifth Amendment to the Constitution to be represented nondiscriminately by the petitioner and to enjoy the same collectively bargained rates of pay, hours, seniority and conditions of employment applicable to all members of the craft or class;
(c) Requires the petitioner to violate its duty under the Act and the Fifth Amendment to represent all members of the craft or class fairly and without discrimination because of race, color, citizenship or national origin.[6]
The respondent's answer admits all the allegations of the petition except that it denies that portion of paragraph 4 which alleges that petitioner is certificated by the National Mediation Board to represent a system wide craft or class comprising all of the employees of respondent in the designated job classifications wherever they are stationed and *687 whatever their race, color, citizenship or national origin, and paragraphs 8, 9 and 10, in which petitioner sets forth its reasons why the award should be impeached. The answer alleges that insofar as this court should support petitioner's position, the petitioner is not the proper party to represent the foreign national employees of the respondent.
The issue is thus raised whether the Act applies to respondent and its employees with respect to its flights between points outside the continental United States and its territories. If, as petitioner contends, the Act applies to such flights, those portions of the award which permit respondent to bargain independently with foreign nationals employed by it as cabin attendants (hence within the craft or class which petitioner has been certificated to represent) would violate Section 2, Fourth, of the Act,[*] and the entire award would, by statutory command, be set aside.[7]
The question is not wholly one of first impression. In Air Line Dispatchers Ass'n v. National Mediation Board, 89 U.S.App.D.C. 24, 189 F.2d 685, certiorari denied 342 U.S. 849, 72 S.Ct. 77, 96 L. Ed. 641, the Court of Appeals for the District of Columbia concluded that the National Mediation Board had properly dismissed an application looking to certification under the Act. In 189 F.2d 690, 691, the court stated:
"Turning to the merits of the decision made by the Board, we agree that the Act does not extend to an air carrier and its employees located entirely outside the continental United States and its territories. The basic statute, the Railway Labor Act, defines the carriers to which it applies as `any * * * carrier by railroad, subject to chapter 1 of Title 49 [Interstate Commerce Act] * * *.' (45 U.S.C.A. § 151, First.) `Employee' is defined as a person in the service of a carrier who performs any work defined as that of an employee or subordinate official in the orders of the Interstate Commerce Commission. (Id., § 151, Fifth). The Interstate Commerce Act is limited in its application to common carriers engaged in interstate and foreign transportation `but only in so far as such transportation * * * takes place within the United States.' (49 U.S.C.A. §§ 1(1) (c), 1(2).) There is no question that as applied to railroads the Railway Labor Act does not extend beyond the United States. By Title II (45 U.S.C.A. §§ 181-188), approved April 10, 1936, the Act was extended, with certain exceptions not now material, to common carriers by air `engaged in interstate or foreign commerce' and their employees. (45 U.S.C.A. § 181.) But Section 202 of said Title II provides: `The duties, requirements, penalties, benefits, and privileges prescribed and established by the provisions of title I of this Act, except section 3 thereof, shall apply to said carriers by air and their employees in the same manner and to the same extent as though such carriers and their employees were specifically included within the definition of "carrier" and "employee", respectively, in section 1 thereof.' (45 U.S.C.A. § 182.)
"The Board therefore properly concluded that the territorial scope of the Act in its application to air transport was like that applicable to railroads. The legislative history, though somewhat ambiguous, confirms this view. * * * Legislation is ordinarily to be given only domestic application. Foley Bros. v. Filardo, 1949, 336 U.S. 281, 69 S.Ct. 575, 93 L.Ed. 680. Explicitness is to be expected from Congress if its intention is to extend the legislation extraterritorially. Ibid.
"The interwoven structure of the original Act and the amendments respecting air transportation do not *688 supply such explicitness. On the contrary, as said in the well reasoned Determination under review, `The Board fails to find any specific direction in the Act, as amended, permitting it to extend its jurisdiction beyond the continental limits of the United States and its territories."
Petitioner would distinguish the Air Line Dispatchers' case, supra, upon the grounds that the air carrier involved operated solely outside the United States and its territories and that the employees involved were not members of aircraft crews. Its reasoning is that no extraterritorial application of the Act is involved when the air carrier flies ships of United States registry and the employees are members of the crews of such aircraft. In effect, petitioner's position is that the doctrine of the "law of the flag", known to maritime commerce, applies to aircraft with the result that such aircraft are comprehended within the term, territories of the United States, to which the Act applies.
Parallels of commerce by air, with maritime, rail and similar older forms of transit, are instructive and appropriate in rationalizing when confronted with the problem here in issue, but as said by Mr. Justice Jackson (concerning the Civil Aeronautics Act, 49 U.S.C.A. § 401 et seq.):
"We find no indication that the Congress either entertained or fostered the narrow concept that airborne commerce is a mere outgrowth or overgrowth of surface-bound transport. Of course, air transportation, water transportation, rail transportation and motor transportation all have a kinship in that all are forms of transportation and their common features of public carriage for hire may be amenable to kindred regulations. But these resemblances must not blind us to the fact that legally, as well as literally, air commerce, whether at home or abroad, soared into a different realm than any that had gone before. * * *. However useful parallels with older forms of transit may be in adjudicating private rights, we see no reason why the efforts of the Congress to foster and regulate development of a revolutionary commerce that operates in three dimensions should be judicially circumscribed with analogies taken over from two-dimensional transit."[8]
An Act of Congress is intended to apply within the territorial jurisdiction of the United States, unless a contrary intent appears. The instant case has to do with regulating labor conditions beyond the bounds of the United States. The intention so to do cannot be attributed to Congress in the absence of a clearly expressed purpose.[9]
Our Supreme Court, with clarity and finality, treats air transportation as a type of commerce to be considered apart and distinguishable from foreign commerce by sea.[10] From this it may be inferred that it is not to be read into the Act as a concept of the law of the flag as contended for by petitioner. In other words, to absent the clearly expressed purpose to read into the Act the concept of the law of the flag as applied to commerce by sea would amount to judicial legislation, to which this court declines to resort.[11]
Petitioner's motion is denied.
It is so ordered.
An exception is allowed.
NOTES
[1] Rule 56(c), Federal Rules of Civil Procedure, 28 U.S.C.A.
[2] 45 U.S.C.A. §§ 151-188.
[3] Mr. Francis J. Robinson, of Washington, D. C.
[4] 45 U.S.C.A. § 159, Third (a). No claim is made that the mediation agreement did not comply with the provisions of 45 U.S.C.A. § 157, nor that the award here involved did not conform nor confine itself to the stipulations of the agreement, nor that it was arrived at by means of some wrongdoing on the part of the members of the Arbitration Board.
[5] 45 U.S.C.A. § 152, Fourth, Sixth, Seventh and Ninth.
[6] Petitioner relies on Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173, in support of its claim of constitutional duty. The claim is without merit. Respondent's foreign national employees are not residents of this country or its territories entitled to the benefit and protection of the Constitution. Further, it is clear from the Steele case that the constitutional duty is no broader than the duty imposed by the Act itself to represent without discrimination the members of the craft or class represented.
[*] 45 U.S.C.A. § 152, Fourth.
[7] 45 U.S.C.A. § 159, Fourth.
[8] Chicago & Southern Air Lines v. Waterman Corp., 333 U.S. 103, 107, 108, 68 S.Ct. 431, 434, 92 L.Ed. 568.
[9] Foley Bros. v. Filardo, 336 U.S. 281, 285, 286, 69 S.Ct. 575, 93 L.Ed. 680.
[10] Chicago & Southern Air Lines v. Waterman Corp., supra.
[11] The Pan American Convention on commercial aviation of 1928, 47 Stat. 1903, and the Chicago Convention on International Civil Aviation of 1944, 61 Stat. 1180, do not require an opposite result. Far from adopting the concept of aircraft as being a part of the territory of the country of registry, these treaties merely assign "nationality" to aircraft.
|
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39 Ill. App.3d 915 (1976)
350 N.E.2d 886
JUDITH STEFFA, Plaintiff-Appellant,
v.
ROGER STANLEY et al., Defendants-Appellees.
No. 75-375.
Illinois Appellate Court Second District (2nd Division).
Opinion filed July 1, 1976.
*916 Robert F. Canfield, of Rockford, for appellant.
Eugene Brassfield, of Maynard, Brassfield & Cowan, of Rockford, for appellees.
Judgment affirmed.
Mr. PRESIDING JUSTICE THOMAS J. MORAN delivered the opinion of the court:
While a passenger on a motorcycle driven by Roger Stanley, plaintiff was injured as the result of a collision between that cycle and an auto driven by Roger Steffa, who was, at that time, plaintiff's husband.[1] She filed suit against both Stanley and Steffa for injuries, and Steffa filed a motion for summary judgment alleging that the action in tort was barred by the interspousal tort immunity provision of section 1 of "An Act to revise the law in relation to husband and wife"[2] (Ill. Rev. Stat. 1973, ch. 68, par. 1).
Plaintiff appeals the granting of defendant Steffa's motion for summary judgment, contending that (1) article I, section 12, of the 1970 Illinois Constitution affords plaintiff a remedy and renders unconstitutional section 1 of the Act; (2) section 1 of that act denies plaintiff equal protection of the law guaranteed by article I, sections 2 and 18, of the 1970 Illinois Constitution; (3) section 1 of the Act is unconstitutional because *917 the section contains more than one subject and the purposes of the Act, relating to suits between spouses, is not expressed in the title; and (4) interspousal tort immunity is an attempt to perpetuate a vestigial concept based upon the abrogated common law rule that a married woman's rights and property belong to her husband.
Second 1 of the Act provides:
"A married woman may, in all cases, sue and be sued without joining her husband with her, to the same extent as if she were unmarried; provided, that neither husband nor wife may sue the other for a tort to the person committed during coverture." Ill. Rev. Stat. 1973, ch. 68, par. 1.
It is useful, here, to view the above enactment in its historical context. At common law, a married woman had no separate identity before the law. She was regarded as a chattel with neither property nor other rights which were enforceable against anyone. Her husband owned all her property and asserted all of her legal and equitable rights. It followed, therefore, that a husband was immune from suits by his wife, whether in tort or contract. (Brandt v. Keller, 413 Ill. 503, 505 (1953); Heckendorn v. First National Bank, 19 Ill.2d 190, 192 (1960), cert. denied, 364 U.S. 882.) In 1874, the rights of married women in Illinois were broadened by the Act, which originally provided only that a married woman could own property and sue in her own name. The interspousal immunity language was not an original provision. (Herget National Bank v. Berardi, 31 Ill. App.3d 608, 609 (1975).) In Brandt v. Keller, 413 Ill. 503, 513, the supreme court interpreted the 1874 act as reflecting a legislative intent to remove a married woman's common law disability with reference to suing and being sued, and refused to read into the statute the common law tort immunity. During its next session, the legislature amended the Act to include the provision that "neither husband nor wife may sue the other for a tort to the person committed during coverture." Heckendorn v. First National Bank, 19 Ill.2d 190, 193 (1960).
In upholding the constitutionality of the 1953 statute against an attack similar to that in the instant case, the court stated:
"As it was within the power of the legislature to determine public policy and grant such right [of a wife to sue her husband in tort] in 1874, it was also within its authority in 1953 to change this policy concept and to partially withdraw such right. This it did by a proviso which applies equally to husband and wife and is consonant with a widely held view of public policy as enunciated in a majority of decisions in this country." Heckendorn v. First National Bank, 19 Ill.2d 190, 195 (1960).
Article I, section 12, of the Constitution of 1970 provides that:
"Every person shall find a certain remedy in the laws for all *918 injuries and wrongs which he receives to his person, privacy, property or reputation. He shall obtain justice by law, freely, completely, and promptly."
Plaintiff maintains that this provision mandates she be provided a remedy against her former husband in the instant case. This section, however, does not mandate a specific form of remedy be provided plaintiff but only expresses the philosophy that some remedy be provided. (Sullivan v. Midlothian Park District, 51 Ill.2d 274, 277 (1972); Mier v. Staley, 28 Ill. App.3d 373, 381 (1975).) While true that courts have power to fashion remedies to alleviate injuries or wrongs (see People v. Warr, 54 Ill.2d 487, 493 (1973); People v. Brown, 27 Ill. App.3d 891, 896 (1975)), still this power is limited.
1 In response to a similar argument advanced in Heckendorn, the supreme court stated that section 19 of article II of the 1870 Illinois Constitution (now article I, section 12, of the 1970 Illinois Constitution) enunciated a basic policy of jurisprudence serving to preserve the rights recognized by the common law and to permit the fashioning of new remedies to meet changing conditions. This policy expression, however, does not authorize courts to create a cause of action unknown to the common law in the face of an express statutory prohibition. Heckendorn v. First National Bank, 19 Ill.2d 190, 194 (1960).
Plaintiff next argues that the statute in question denies her equal protection of the law as guaranteed by article I, sections 2 and 18, of the 1970 Illinois Constitution. Although the legislature may, in certain instances, classify persons for the purposes of legislative regulation or control (Youhas v. Ice, 56 Ill.2d 497, 500 (1974)), the Act does not present us with the question of whether the classification of married women is constitutionally permissible. Its purpose was not to control or otherwise abridge the rights of married women but, rather, to allow rights denied under the common law and elevate married women to a legal parity with married men.
2 As to section 18, the bar against tort actions between spouses during coverture applies equally to male and female and cannot therefore be said to discriminate by denying or abridging plaintiff's rights on the basis of sex.
3 Plaintiff, citing Heck v. Schupp, 394 Ill. (1946), contends that the Act is unconstitutional because the purpose is not expressed in the title, and the Act contains more than one subject. In Heck, the offending statute, entitled "An Act in relation to certain causes of action conducive to extortion and blackmail, and to declare illegal, contracts and acts made and done in pursuance thereof," prohibited suits based upon alienation of affections, criminal conversation, or breach of contract to marry. The court there concluded that the title of the Act did not fairly express the *919 purposes of the section at issue. The case at bar is distinguishable.[3] The title, "An Act to revise the law in relation to husband and wife," certainly apprises the reader of the general subject matter. The prohibition of suits against one category of persons (spouses) does not introduce another subject but rather is an amplication of the subject of the statute. We find plaintiff's attack on this point to be without substance.
However much we might agree with plaintiff that interspousal tort immunity is an outmoded concept based upon the common law fiction of unity between husband and wife, we are without authority to judicially amend the statute. Interpersonal tort immunity is an enactment of public policy within the province of the legislature. Heckendorn v. First National Bank, 19 Ill.2d 190, 195 (1960).
We therefore conclude that section 1 of the Act is constitutional and bars this action. The judgment of the trial court is affirmed.
Judgment affirmed.
RECHENMACHER and DIXON, JJ., concur.
NOTES
[1] By her amended complaint plaintiff alleged that she and Roger Steffa were divorced after the collision. This appeal does not involve defendant Roger Stanley.
[2] The parties herein have referred to the Act as it appears in the Illinois Revised Statutes "Rights of Married Women Act". Such title, however, was inserted by the publisher and is not the title prescribed by the legislature. In this opinion we have used the title designated by the legislature.
[3] It is questionable whether, pertinent to current legislation, Heck would be authority for a position such as that expressed in the first part of plaintiff's contention. (See People ex rel. Hanrahan v. Caliendo, 50 Ill.2d 72, 76-77 (1971).) Section 13 of article IV of the 1870 Illinois Constitution, in force at the time of the Heck decision, provided: "No act hereafter passed shall embrace more than one subject, and that shall be expressed in the title." Section 8(d) of article IV of the 1970 Illinois Constitution provides: "Bills * * * shall be confined to one subject." Consequently there presently is no constitutional mandate that requires the subject of the bill to be expressed in the title of the Act.
|
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ACCEPTED
01-15-00303-CR
FIRST COURT OF APPEALS
HOUSTON, TEXAS
11/30/2015 2:39:01 PM
CHRISTOPHER PRINE
CLERK
NO. 01-15-00303-CR
IN THE FIRST COURT OF APPEALS FILED IN
1st COURT OF APPEALS
HOUSTON, TEXAS
HOUSTON, TEXAS 11/30/2015 2:39:01 PM
CHRISTOPHER A. PRINE
Clerk
GARY LAVERN WYMORE AKA CALVIN MCCOLLUM,
APPELLANT
V.
THE STATE OF TEXAS, APPELLEE
BRIEF FOR THE STATE OF TEXAS
CAUSE NUMBER 14CR1334
IN THE 405th JUDICIAL DISTRICT COURT
OF GALVESTON COUNTY, TEXAS
ATTORNEYS FOR THE STATE OF TEXAS
REBECCA KLAREN ASSISTANT CRIMINAL DISTRICT ATTORNEY
STATE BAR NO. 24046225
JACK ROADY CRIMINAL DISTRICT ATTORNEY
600 59TH STREET, SUITE 1001
GALVESTON TX 77551
(409) 770-6004, FAX (409) 621-7952
[email protected]
ORAL ARGUMENT WAIVED
IDENTITY OF PARTIES AND COUNSEL
Presiding Judge Honorable Dibrell
Appellant Gary Lavern Wymore aka
Calvin McCollum
Appellee The State of Texas
Attorney for Appellant Calvin Parks
(Trial Only) Pearland, Texas
Attorney for Appellant Joseph Kyle Verret
(Appeal Only) Galveston, Texas
Attorney for State Christopher Henderson &
Matthew Shawhan
(Trial Only) Galveston, Texas
Attorney for State Rebecca Klaren
(Appeal Only) Galveston, Texas
ii
TABLE OF CONTENTS
SECTION PAGE
Identity of Parties and Counsel ii
Table of Contents iii
Index of Authorities iv
Summary of the Argument 2
Statement of Facts 2
Sole Issue 9
Viewing the evidence in the light most favorable to the jury’s
verdict, how’s the evidence insufficient to prove
Wymore/McCollum was intoxicated when it showed he drove
erratically, slurred his speech, had glassy bloodshot eyes,
smelled of alcohol, told an incoherent story, had a wet spot on
the front of his pants, swayed, had an unsteady gait, failed the
only SFST he performed, refused to give a breath sample, and
lied about his name?
Argument and Authorities 9
I. Sufficiency Standard Of Review 9
II. Driving While Intoxicated 10
III. The Evidence Overwhelming Proves Wymore/McCollum
Was Intoxicated 10
IV. Conclusion: The Evidence Was Legally Sufficient 13
Conclusion and Prayer 14
Certificate of Service 15
Certificate of Compliance 15
iii
INDEX OF AUTHORITIES
CASES
Annis v. State, 578 S.W.2d 406, 407 (Tex. Crim. App. 1979) .......................................12
Barraza v. State, 733 S.W.2d 379, 381 (Tex. App.---Corpus Christi 1987), aff’d, 790
S.W.2d 654 (Tex. Crim. App. 1990) ........................................................................12
Bartlett v. State, 270 S.W.3d 147, 153 (Tex. Crim. App. 2008) .....................................12
Clayton v. State, 235 S.W.3d 772, 778 (Tex. Crim. App. 2007). ....................................10
Cotton v. State, 686 S.W.2d 140, 142-43 & 142 n. 3 (Tex. Crim. App. 1985) ... 11, 12, 13
Felder v. State, 848 S.W.2d 85, 98 (Tex. Crim. App. 1992) ...........................................12
Gear v. State, 340 S.W.3d 743, 746 (Tex. Crim. App. 2011). ................................... 9, 10
Henderson v. State, 29 S.W.3d 616, 622 (Tex. App.---Houston [1st Dist.] 2000, pet.
ref’d).......................................................................................................................12
Hooper v. State, 214 S.W.3d 9, 13 (Tex. Crim. App. 2007) ...........................................10
Kiffe v. State, 361 S.W.3d 104, 108 (Tex. App.---Houston [1st Dist.] 2011, pet. ref’d) .10
Kirsch v. State, 306 S.W.3d 738, 745 (Tex. Crim. App. 2010) .......................................11
STATUTES
TEX. PENAL CODE ANN. § 49.01(2). ..........................................................................10
TEX. PENAL CODE ANN. § 49.04(a). ..........................................................................10
TEX. TRANSP. CODE §724.012 (b)(3). .........................................................................12
iv
NO. 01-15-00303-CR
IN THE
COURT OF APPEALS
FOR THE
FIRST DISTRICT OF TEXAS
HOUSTON, TEXAS
GARY LAVERN WYMORE AKA CALVIN MCCOLLUM, Appellant
V.
THE STATE OF TEXAS, Appellee
Appealed from the 405th Judicial District
Court of Galveston County, Texas
Cause No. 14CR1334
BRIEF FOR THE STATE OF TEXAS
TO THE HONORABLE COURT OF APPEALS:
Now comes Jack Roady, Criminal District Attorney for Galveston County, Texas,
and files this brief for the State of Texas.
The one-volume Clerk’s Record is referred to in the State’s Brief as “C.R. page”. The Reporter’s
Record is multiple volumes and is referred to as “R.R. volume number: page”.
SUMMARY OF THE ARGUMENT
In one issue, Gary Lavern Wymore also known as Calvin McCollum, argues the
evidence is insufficient to prove he was intoxicated when he was arrested for driving
while intoxicated. Viewing the evidence in the light most favorable to the jury’s verdict,
the evidence proves Wymore/McCollum changed lanes without signaling, abruptly
changed lanes again, lied about his name, slurred his speech, told an incoherent story,
was unsteady on his feet, swayed as he walked, smelled of alcohol, had bloodshot glassy
eyes, had a wet spot on the front of his pants in the groin area, failed the walk and turn
test, and refused a breath test. His van also smelled strongly of alcohol. The evidence
was more than sufficient to prove Wymore/McCollum was intoxicated.
STATEMENT OF FACTS
Sergeant White and Officer Santiago were dispatched to find an erratic reckless
driver.1 The caller described the erratically driving vehicle as a grey van with a tire
strapped on the top.2
Within 3 minutes of the dispatch, the officers saw the grey van.3 Officer Santiago
testified the driver swerved a little within his lane.4 The driver was going faster than the
1
R.R.II: 141, 199.
2
R.R.II: 199.
3
R.R.II: 199-200.
4
R.R.II: 142.
2
cars around him on a wet road.5 As soon as the officers got behind the van, the driver
changed lanes without signaling.6 Then, abruptly, turned on his signal and changed lanes
again.7 Sergeant White testified the driver’s maneuvers appeared to be an evasive move
away from being in front of the patrol car.8 The officers turned on their overhead lights.9
The driver pulled over.10
As soon as the driver pulled onto the shoulder of the road, he got out of his
van.11 He wasn’t told to get out by the officers.12 The driver stood close to the traffic
lane.13 He put his hands toward his waist.14 The officers testified it’s concerning when a
driver reaches towards his waist because the driver could be reaching for a weapon.15
Because of the driver’s behavior, the officers asked him to move away from the traffic,
towards the front of the patrol car.16 The officers also told the driver to keep his hands
in front of him.17
As the driver walked towards the back of his van and towards the front of the
5
R.R.II: 166.
6
R.R.II: 142, 200.
7
R.R.II: 142, 200-01.
8
R.R.II: 200-01.
9
R.R.II: 142-43.
10
R.R.II: 143-44.
11
R.R.II: 144.
12
R.R.II: 144.
13
R.R.II: 145, 202.
14
R.R.II: 201-02.
15
R.R.II: 145, 201-02.
16
R.R.II: 202.
17
R.R.II: 202.
3
patrol car, the officers noticed he was unsteady on his feet.18 They noted he took long
strides and swayed.19
Once the driver got to the front of the patrol car, the officers asked the driver to
identify himself.20 The driver gave the officers an expired Kentucky driver’s license with
the name of Gary Wymore.21 Officer Santiago ran the name Gary Wymore through the
police department’s communications.22 It returned a Texas driver’s license.23 The driver
did not tell the officers his real name is Calvin McCollum. This wasn’t discovered until
sometime after Wymore/McCollum was arrested.24
The officers smelt a strong odor of alcohol emitting from Wymore/McCollum’s
breath and body.25 Officer Santiago testified, that based on his experience, the odor
smelled like beer.26 The officers testified Wymore/McCollum’s speech was slurred.27 He
had a thick tongue.28 His eyes were glassy and bloodshot.29 The officers also saw that
Wymore/McCollum had a wet spot on the front of his pants that spread from his groin
to his thighs.30
18
R.R.II: 146, 203.
19
R.R.II: 146, 203.
20
R.R.II: 144, 202.
21
R.R.II: 144, 202.
22
R.R.II: 144.
23
R.R.II: 144.
24
R.R.II: 145.
25
R.R.II: 146, 203, 205.
26
R.R.II: 146.
27
R.R.II: 146.
28
R.R.II: 146.
29
R.R.II: 146.
30
R.R.II: 189, 194.
4
The officers asked Wymore/McCollum where he was going.31
Wymore/McCollum said he was going to Freeport because a friend had a stroke and
needed help.32 The officers testified Wymore/McCollum’s story was incoherent and
odd.33 The officers testified Wymore/McCollum was driving in the opposite direction
and wasn’t heading towards Freeport.34 The officers asked him if EMS was called for his
friend.35 Wymore/McCollum said no.36 The officers testified that Wymore/McCollum
repeated himself.37 Sergeant White testified he had to ask Wymore/McCollum several
questions to get any detail about his story.38 Wymore/McCollum didn’t give the officers
the name of his friend or the friend’s address.39 The officers testified they couldn’t
corroborate Wymore/McCollum’s story.40
Sergeant White testified he asked Wymore/McCollum to do several standard field
sobriety tests (SFSTs).41 Sergeant White asked Wymore/McCollum if he had any
medical issues.42 Wymore/McCollum said he didn’t.43
Sergeant White testified he didn’t do the horizontal gaze nystagmus because it
31
R.R.II: 203.
32
R.R.II: 203.
33
R.R.II: 150, 203-04.
34
R.R.II: 150, 203.
35
R.R.II: 150, 203-04.
36
R.R.II: 150, 203-04.
37
R.R.II: 205.
38
R.R.II: 205.
39
R.R.II: 151.
40
R.R.II: 204.
41
R.R.II: 210-11, 213-14.
42
R.R.II: 207.
43
R.R.II: 207.
5
was misting.44 He didn’t want a false reading in Wymore/McCollum’s eyes.45
Sergeant White explained and showed Wymore/McCollum how to do the walk
and turn test.46 Wymore/McCollum said he understood.47 Wymore/McCollum failed
the test.48 He stepped off the imaginary line.49 He used his arms for balance.50 And he
didn’t step heel to toe.51 Based on Wymore/McCollum’s performance on the test,
Sergeant White testified Wymore/McCollum was intoxicated.52
Sergeant White explained the one leg stand test to Wymore/McCollum.53 He said
he understood and attempted the test.54 Wymore/McCollum stopped the test and said
he had a bad back.55 Despite being directly asked before any of the tests if he had a
medical issue, this was the first time Wymore/McCollum claimed to have a medical
problem.56
Even though Wymore/McCollum failed the SFSTs and claimed he hadn’t drank
any alcohol, Sergeant White offered to let him blow into a portable breath test (PBT).57
The sergeant testified the PBT is a tool that shows whether a person has consumed
44
R.R.II: 208.
45
R.R.II: 208.
46
R.R.II: 212.
47
R.R.II: 212.
48
R.R.II: 212.
49
R.R.II: 213.
50
R.R.II: 213.
51
R.R.II: 213.
52
R.R.II: 213.
53
R.R.II: 213-14.
54
R.R.II: 214.
55
R.R.II: 214.
56
R.R.II: 214-15.
57
R.R.II: 215.
6
alcohol.58 Wymore/McCollum agreed to do the test.59 The sergeant held the PBT while
Wymore/McCollum blew.60 Sergeant White testified he could feel Wymore/McCollum
not blow hard enough.61 Wymore/McCollum also didn’t close his lips around the tube.62
Sergeant White testified he concluded Wymore/McCollum was intoxicated based
on the 4 walk and turn clues, that he couldn’t complete the one leg stand, that his story
didn’t add up, that he repeated himself, that his speech was slurred, that he spoke with a
thick tongue, he swayed while he walked, and smelled of alcohol.63 The officers arrested
Wymore/McCollum for driving while intoxicated.64
The officers explained that when a driver is arrested, his vehicle is inventoried.65
Officer Santiago testified when he attempted to inventory Wymore/McCollum’s van, he
found a small puppy sitting in the passenger seat.66 He also found the van was filthy.67
The officer testified he found a cup sitting in the front center console that smelled like
beer.68 He said he smelled an extremely strong odor of alcohol emitting from between
the center console and the driver’s seat, as if beer was just poured out into the van.69 He
58
R.R.II: 216.
59
R.R.II: 216.
60
R.R.II: 216-17.
61
R.R.II: 216-17.
62
R.R.II: 217.
63
R.R.II: 217-18.
64
R.R.II: 217-18.
65
R.R.II: 151.
66
R.R.II: 190.
67
R.R.II: 152.
68
R.R.II: 152.
69
R.R.II: 152.
7
also found several old cans of beer.70
The officers testified that after they arrested Wymore/McCollum, they brought
him to the police department and asked him to give a breath sample on the intoxilyzer
machine.71 He refused.72
The in-car video of the stop and arrest was admitted into evidence.73 The video of
Wymore/McCollum refusing to give a breath sample in the intoxlizyer room was also
admitted.74
At no point did Wymore/McCollum tell the officers his name wasn’t Wymore
and that his true name was McCollum. Sergeant White testified people lie about their
names to hide their criminal histories.75 The sergeant testified that at the time of
Wymore/McCollum’s arrest, if the driver had 2 DWI convictions, the police would
conduct a mandatory blood draw.76
At trial, Wymore/McCollum stipulated that he was twice convicted of DWI.77
The jury convicted him of felony DWI 3rd or more.78
Wymore/McCollum elected to have the Trial Court assess his punishment.
70
R.R.II: 190.
71
R.R.II: 155-56, 218-19.
72
R.R.II: 156, 218-19.
73
R.R.II: 153; State Exhibit 1.
74
R.R.II: 184; Defense Exhibit 1.
75
R.R.II: 207.
76
R.R.II: 206-07.
77
R.R.II: 256-57; State Exhibit 3.
78
R.R.III: 28.
8
During the punishment hearing, Wymore/McCollum pled true to both enhancements.79
The enhancements were for a 3rd DWI and for felony tampering with evidence.80 The
Trial Court sentenced Wymore/McCollum to 30 years confinement.81
This appeal followed.
SOLE ISSUE
Viewing the evidence in the light most favorable to the jury’s verdict,
how’s the evidence insufficient to prove Wymore/McCollum was
intoxicated when it showed he drove erratically, slurred his speech,
had glassy bloodshot eyes, smelled of alcohol, told an incoherent
story, had a wet spot on the front of his pants, swayed, had an
unsteady gait, failed the only SFST he performed, refused to give a
breath sample, and lied about his name?
ARGUMENT AND AUTHORITIES
I. Sufficiency Standard Of Review
Under a legal sufficiency standard of review, appellate courts review all the
evidence in the light most favorable to the verdict and determines, based on that
evidence and any reasonable inferences therefrom, whether any rational fact finder
could have found the elements of the offense beyond a reasonable doubt.82 This
standard gives full play to the responsibility of the trier of fact fairly to resolve
79
R.R.III: 32-33.
80
R.R.III: 32-33.
81
R.R.III: 37.
82
Gear v. State, 340 S.W.3d 743, 746 (Tex. Crim. App. 2011).
9
conflicts in the testimony, weigh the evidence, and draw reasonable inferences from
basic facts to ultimate facts.83 Appellate courts presume that conflicting inferences
were resolved in favor of the conviction and defer to that resolution.84 Circumstantial
evidence is as probative as direct evidence in establishing guilt.85 Each fact need not
point directly and independently to guilt, as long as the cumulative force of all
incriminating circumstances is sufficient to support the conviction.86
II. Driving While Intoxicated
A person commits DWI if he “is intoxicated while operating a motor vehicle in a
public place.”87
“Intoxicated” means “not having the normal use of mental or physical faculties
by reason of the introduction of alcohol ... into the body.”88
III. The Evidence Overwhelming Proves Wymore/McCollum
Was Intoxicated
Wymore/McCollum only challenges the sufficiency of the evidence that
establishes he was intoxicated. Consequently the State’s argument is limited to that
element.
83
Id.
84
Clayton v. State, 235 S.W.3d 772, 778 (Tex. Crim. App. 2007).
85
Hooper v. State, 214 S.W.3d 9, 13 (Tex. Crim. App. 2007); Kiffe v. State, 361 S.W.3d 104, 108 (Tex.
App.---Houston [1st Dist.] 2011, pet. ref’d).
86
Hooper, 214 S.W.3d at 13.
87
TEX. PENAL CODE ANN. § 49.04(a).
88
TEX. PENAL CODE ANN. § 49.01(2).
10
Viewing the evidence in the light most favorable to the jury’s verdict, the jury
could’ve found beyond a reasonable doubt that Wymore/McCollum was intoxicated
when stopped by the officers based on the following:
Wymore/McCollum was driving erratically. The officers saw Wymore/McCollum
change lanes without signaling, then abruptly change lanes again, and breaking
suddenly.
Wymore/McCollum got out of his van without being asked, he was unsteady on
his feet, he swayed, and used a large gait.89
Wymore/McCollum had a wet spot on his pants at his groin and thighs.
Wymore/McCollum’s story wasn’t coherent and he repeated himself. He was
driving in the opposite direction he claimed to be headed.
Wymore/McCollum’s speech was slurred.90 He spoke with a thick tongue. His
eyes were glassy and bloodshot.91
Wymore/McCollum’s breath and body smelled strongly of alcohol, his van
smelled strongly of beer recently poured from a cup, and there was cup in the
center console that smelled of alcohol.92
89
See Kirsch v. State, 306 S.W.3d 738, 745 (Tex. Crim. App. 2010) (recognizing evidence raising
inference of intoxication includes erratic driving, post-driving behavior such as stumbling, swaying,
slurring or mumbling words, and bloodshot eyes).
90
See id.
91
See Cotton v. State, 686 S.W.2d 140, 142-43 & 142 n. 3 (Tex. Crim. App. 1985) (identifying
characteristics that may constitute evidence of intoxication to include slurred speech, bloodshot
eyes, unsteady balance, and staggering gait).
92
See id. at 142 n. 3 (including the odor of alcohol on the person or his breath as characteristic that
11
Wymore/McCollum failed the walk and turn standard field sobriety test. He
refused to do the one leg stand test.93
Sergeant White testified that based on the above, he believed Wymore/
McCollum was intoxicated.94
Wymore/McCollum refused to submit to a breath test.95
Wymore/McCollum gave the officers a false name. This indicates a
consciousness of guilt.96 And it prevented the officers from obtaining
Wymore/McCollum’s criminal history. Had they had his criminal history, they
would’ve seen Wymore/McCollum had more than two DWI convictions. The
officers would’ve been obligated to obtain a mandatory blood draw from
Wymore/McCollum.97
may constitute evidence of intoxication).
93
See Barraza v. State, 733 S.W.2d 379, 381 (Tex. App.---Corpus Christi 1987), aff’d, 790 S.W.2d 654
(Tex. Crim. App. 1990) (holding there is no significant difference between refusal to take field-
sobriety test and refusal to perform breath test for evidentiary purposes).
94
See Annis v. State, 578 S.W.2d 406, 407 (Tex. Crim. App. 1979) (reasoning that an officer’s
testimony that a person was intoxicated provided sufficient evidence to establish the element of
intoxication); see also Henderson v. State, 29 S.W.3d 616, 622 (Tex. App.---Houston [1st Dist.] 2000,
pet. ref’d) (stating that the testimony of a police officer that an individual is intoxicated is probative
evidence of intoxication).
95
See Bartlett v. State, 270 S.W.3d 147, 153 (Tex. Crim. App. 2008) (recognizing defendant’s refusal to
submit to breath test is relevant to show consciousness of guilt).
96
See Felder v. State, 848 S.W.2d 85, 98 (Tex. Crim. App. 1992) (giving false identification to a police
officer indicates a consciousness of guilt).
97
See TEX. TRANSP. CODE §724.012 (b)(3).
12
IV. Conclusion: The Evidence Was Legally Sufficient
Evidence of intoxication may be proven by a combination of individual
symptoms of intoxication that when taken individually do not necessarily prove
intoxication.98 Here, the officers were confronted with overwhelming symptoms of
Wymore/McCollum’s intoxication---his driving behavior, slurred speech, glassy
bloodshot eyes, smell of alcohol, incoherent story, failed SFST, breath test refusal, and
false name. Viewing the evidence in the light most favorable to the jury’s verdict, the
evidence was more than sufficient.
98
See Cotton, 686 S.W.2d at 142 n. 3.
13
CONCLUSION AND PRAYER
WHEREFORE, PREMISES CONSIDERED, the State prays that the judgment
of the Trial Court be affirmed in all respects.
Respectfully submitted,
JACK ROADY
CRIMINAL DISTRICT ATTORNEY
GALVESTON COUNTY, TEXAS
/s/ Rebecca Klaren
REBECCA KLAREN
Assistant Criminal District Attorney
State Bar Number 24046225
600 59th Street, Suite 1001
Galveston, Texas 77551
Tel (409)770-6004/Fax (409)621-7952
[email protected]
14
CERTIFICATE OF SERVICE
The undersigned Attorney for the State certifies a copy of the foregoing brief was
sent via email, eFile service, or certified mail, return receipt requested, to Kyle Verret,
attorney for Gary Lavern Wymore aka Calvin McCollum, at [email protected] or
2029 Strand Suite 3, Galveston, Tx 77550, on November 30, 2015.
/s/ Rebecca Klaren
REBECCA KLAREN
Assistant Criminal District Attorney
Galveston County, Texas
CERTIFICATE OF COMPLIANCE
The undersigned Attorney for the State certifies this brief is computer generated,
and consists of 2,436 words.
/s/ Rebecca Klaren
REBECCA KLAREN
Assistant Criminal District Attorney
Galveston County, Texas
15
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{
"pile_set_name": "FreeLaw"
}
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