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536 U.S. 949
HILLv.UNITED STATES.
No. 01-10365.
Supreme Court of the United States.
June 24, 2002.
1
C. A. 4th Cir. Certiorari denied. Reported below: 31 Fed. Appx. 95.
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164 B.R. 378 (1994)
In re BARRIE REED BUICK-GMC, INC., Debtor.
Bankruptcy No. 89-32458-BKC-SHF.
United States Bankruptcy Court, S.D. Florida.
February 22, 1994.
*379 Geoffrey S. Aaronson, P.A., Miami, FL, for Barrie Reed Buick-GMC, Inc.
Daniel L. Bakst, pro se.
*380 ORDER ALLOWING FEES
STEVEN H. FRIEDMAN, Bankruptcy Judge.
AFTER NOTICE to all creditors, the Court has carefully reviewed the fee applications and has considered the criteria specified in 11 U.S.C. §§ 326 and 330 and the requirements of F.R.B.P. 2016, and makes the following findings:
The services rendered by Daniel Bakst, both as trustee and as attorney for trustee, were reasonable and necessary in the administration of this chapter 7 estate following the conversion of this case from a chapter 11 proceeding on January 9, 1990. Therefore, the Court awards Daniel Bakst, as trustee, fees in the amount of $5,535.62 plus expenses of $6.46. Further, the Court awards Daniel Bakst, as attorney for trustee, fees in the amount of $14,880.00.
In considering attorneys fees, courts of the Eleventh Circuit are required to consider the factors set forth in First Colonial Corp. of America, 544 F.2d 1291 (5th Cir.), cert. denied, 431 U.S. 904, 97 S.Ct. 1696, 52 L.Ed.2d 388 (1977) (The decisions of the Fifth Circuit before September 30, 1981, are binding precedent on the Courts of the Eleventh Circuit. Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir.1981)). The Court, having carefully reviewed the fee applications of Schantz, Schatzman and Aaronson, P.A., David Meisel, and Peterkin, Allen & Bailey, and having considered the factors delineated in First Colonial, deems it appropriate to reduce the aggregate fee requests of these three fee applicants by seventy-five (75%) percent. The factors set forth in First Colonial are: (1) the time and labor required, (2) the novelty and difficulty of the questions, (3) the skill requisite to perform the professional services properly, (4) the preclusion of other employment due to the acceptance of the case, (5) the customary fee, (6) the fixed or contingent nature of the fee request, (7) the time limitations imposed by the client and other circumstances, (8) the amounts involved and the results obtained, (9) the experience, reputation and ability of the professionals, (10) the undesirability of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases. The only factors that the Court finds to have an affect on the three applications are: the time and labor required, the customary fee, the amounts involved and results obtained, and awards in similar cases.
(1) Time and Labor Required:
Schantz, Schatzman & Aaronson, P.A. ("SSA"), as lead counsel for the debtor-in-possession, seeks compensation for 371.65 hours expended between the May 18, 1989, chapter 11 petition date and the January 11, 1990, chapter 7 conversion date. David Meisel, Esq. ("DM"), as co-counsel for the debtor-in-possession, seeks compensation for 87.30 hours expended during the referenced time period. Peterkin, Allen & Bailey ("PAB"), as accountant for the debtor-in-possession, seeks compensation for 487.20 hours expended during the referenced time period. As to all three chapter 11 administrative fee applicants, the Court finds the magnitude of time expended to be excessive.
At least 130 hours of the 371.65 hours for which SSA seeks compensation are devoted solely to telephone calls made by the four attorneys and one paralegal who worked on this file at various times. All such telephone calls were billed for a minimum of one-quarter hour, although, based upon the descriptions contained in the SSA fee application, most of the matters discussed appear to have been of short duration. In addition, there are several instances where more than one of the SSA attorneys/paralegal billed for like time entries in a single day.
It is apparent from the record that DM was the pre-petition non-bankruptcy counsel for the debtor and was retained in an advisory capacity, and not as an active participant in the administration of this estate. It does not appear that he made a single court appearance, and over 57 hours of the 87.3 hours for which DM seeks compensation represent billings for telephone conferences.
PAB's time entries are devoid of specific delineation as to the nature of the services rendered. It appears that PAB assisted the debtor in the preparation of the bankruptcy *381 schedules and periodic debtor-in-possession reports during the pendency of the chapter 11 proceeding, as well as participation in conferences relating to the status of the bankruptcy proceeding. It is difficult for the Court to understand why it would be necessary for the debtor-in-possession to utilize accounting services equivalent to having two accountants work full time during the pendency of the chapter 11 proceeding (80 hours per month), particularly in light of the dismal failure of this chapter 11 proceeding.
(2) The Customary Fee:
SSA seeks average hourly compensation at the rate of $151.97. DM seeks average hourly compensation at the rate of $243.81, and PAB seeks average hourly compensation at the rate of $95.81. Considering the customary fees charged by other attorneys and accountants retained by or on behalf of chapter 11 and chapter 7 debtors in the South Florida area, the Court finds the average hourly rate sought by SSA and PAB to be reasonable. However, the Court finds the average hourly rate sought by DM excessive, particularly because of the advisory nature of the services which he rendered on behalf of this chapter 11 debtor. The foregoing is particularly true because, as previously stated, DM failed to make even one court appearance on behalf of the debtor-in-possession. However, in light of this Court's consideration of the other First Colonial factors below, no specific downward adjustment to the hourly rate sought by DM is necessary.
(3) Amounts Involved and Results Obtained:
It is this First Colonial factor which constitutes the "Achilles' heel" of the three fee applications under consideration. After a thorough review of the record in this case, this Court is unable to discern any benefit achieved for any interested party of this proceeding, with the possible exception of the debtor and its principals. More significantly, during the eight month administration of this debtor in chapter 11, supposedly under the careful supervision of its counsel and accountants, this debtor incurred unpaid administrative claims exceeding $475,000.00. It is well-established that a debtor-in-possession is responsible for preserving the assets of the estate. In re Florida Airlines, Inc., 110 B.R. 570 (M.D.Fla.1990). As concisely stated in United Utensils Corp., 141 B.R. 306 (Bankr.W.D.Pa.1992):
An attorney for the Debtor has a fiduciary duty not only to the debtor, but a fiduciary obligation to act in the best interest of the entire estate, including creditors (citation omitted). If the debtor is not fulfilling its fiduciary obligation to the estate, it is the responsibility and duty of debtor's counsel to bring such matters to the attention of the court.
United Utensils, 141 B.R. at 309.
This Court cannot sanction the services rendered by the subject professionals when their failure to recognize the futility of the debtor's efforts to reorganize at least partially contributed to the extraordinary unpaid administrative expenses. In this respect, the services rendered by PAB as the accountant for the debtor-in-possession, are particularly suspect. Charged with the responsibility of preparing the debtor's tax reports and debtor-in-possession reports, it is incomprehensible that during the course of chapter 11, PAB could have been unaware that the debtor was incurring obligations for unpaid federal withholding taxes exceeding $268,000.00, and unpaid sales taxes due the State of Florida exceeding $72,000.00. Professionals employed by a debtor are entitled to compensation from the bankruptcy estate only if the services rendered were of a value to the administration of the estate or for its benefit. In re Sandra Cotton, Inc., 91 B.R. 657 (W.D.N.Y.1988). Fees should not be allowed for services that benefit the debtor, but not the debtor's estate. In re Latham, 131 B.R. 238 (Bankr.S.D.Fla.1991); In re Brandenburger, 145 B.R. 624 (D.S.D.1992). Based upon an examination of the record, this Court is unable to discern any benefit generated as a result of the services performed by the counsel and accountant for the debtor-in-possession benefitting the creditors of this estate.
(4) Awards in Similar Cases:
In light of the failure of the chapter 11 proceeding, the fees awarded herein are consistent with awards in similar cases. In re Kendavis Industries International, Inc., 91 B.R. 742 (Bankr.N.D.Tex.1988); In re Coastel *382 Equities, Inc., 39 B.R. 304 (Bankr. S.D.Cal.1984).
Based on the foregoing, the Court awards fees and costs to Schantz, Schatzman & Aaronson, P.A. in the amount of $7,684.70 ($17,220.00 fee award less $12,500.00 initial fee retainer, plus $2,964.70 cost reimbursement), David Meisel, Esq. in the amount of $5,901.20 ($5,321.25 fee award plus $579.95 cost reimbursement), and Peterkin, Allen & Bailey in the amount of $11,669.98. These fees shall be paid on a pro rata basis with other allowed chapter 11 administrative claims, pursuant to 11 U.S.C. § 726(b).
Specific findings and the considerations supporting the conclusions as to the fees awarded to Daniel Bakst, as trustee and as attorney for the trustee, will be prepared at the request of any party in interest if received by this Court within 10 days after the entry of this order.
DONE and ORDERED.
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898 F.2d 148Unpublished Disposition
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.Charles Leon CURTIS, Defendant-Appellant.
No. 89-5644.
United States Court of Appeals, Fourth Circuit.
Submitted: Feb. 7, 1990.Decided: March 5, 1990.
Appeal from the United States District Court for the Eastern District of Virginia, at Norfolk. J. Calvitt Clarke, Jr., District Judge. (CR-89-8)
Mary G. Commander, Goldblatt, Lipkin, Cohen, Anderson, Jenkins & Legum, P.C., Norfolk, Va., for appellant.
Henry E. Hudson, United States Attorney; Albert D. Alberi, Special Assistant United States Attorney; Robert J. Seidel, Jr., Assistant United States Attorney, Norfolk, Va., for appellee.
E.D.Va.
AFFIRMED.
Before WIDENER and MURNAGHAN, Circuit Judges, and BUTZNER, Senior Circuit Judge.
PER CURIAM:
1
Charles Leon Curtis entered a plea of guilty to conspiracy to distribute less than 500 grams of cocaine in violation of 21 U.S.C. Sec. 846. The district court entered a judgment of conviction and sentenced Curtis to a three-year term of imprisonment and ordered a $50 special assessment. Curtis appeals on the grounds that the length of the sentence was improper and the district court erred in denying his request to recommend that the federal sentence be served in a state prison where he was imprisoned for another crime.
2
Curtis's arguments are without merit. The plea agreement signed by Curtis clearly states that the sentence to be imposed is within the discretion of the sentencing judge. The three-year sentence was within the twenty-year maximum term for the offense. The court properly exercised its discretion not to recommend Curtis's request to serve his sentence in a state facility. Because Curtis's counsel states in her brief that she has found no error, we have searched the record for errors in compliance with Anders v. California, 386 U.S. 738 (1967). Finding none, we affirm the judgment of the district court.
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155 F.2d 592 (1946)
UNITED STATES
v.
BOZZA.
No. 9013.
Circuit Court of Appeals, Third Circuit.
Argued March 7, 1946.
Decided May 17, 1946.
*593 Harold Simandl, of Newark, N. J., for appellant.
Charles J. Tyne, of Newark, N. J. (Edgar H. Rossbach, U. S. Atty., of Newark, N. J., on the brief), for appellee.
Before BIGGS, GOODRICH, and O'CONNELL, Circuit Judges.
O'CONNELL, Circuit Judge.
Bozza and one Nicholas Chirichillo were tried and convicted under an indictment containing five counts charging offenses against the revenues of the United States. From judgment and sentence of the District Court for the District of New Jersey, Bozza appeals.
In a midnight raid on a dilapidated farmhouse at Woodbridge, New Jersey, state police officials discovered an illicit still, set up but not cooking. Though barren of normal house furnishings, the apparently deserted structure contained the usual paraphernalia essential to an illicit still enterprise. In addition to the distillation plant, the officials found bags of sugar, 600 gallons of fermenting sugar mash, and 2½ gallons of alcohol which were in the receiving tank.[1]
From the government's case, it is fairly apparent that Chirichillo was the dominant *594 member of the group which carried on the illicit enterprise. He leased the house. He brought raw materials there. With the help of Bozza and one other he operated the still. And, finally, Chirichillo transported the finished product, alcohol, to Newark for disposition there.
Because appellant challenges the sufficiency of the proof to sustain conviction on any count, the charges against him and the evidence in support thereof will be summarized.
The first count charges Bozza, Chirichillo, Ellen Vettor, and Peter Milito with the unlawful carrying on of the business of a distiller and the making and distilling of 2½ proof gallons of spirits with intent to defraud the United States of the tax thereon.[2] The second count charges the same parties with unlawfully having in their possession and custody and under their control a still set up for the unlawful production of distilled spirits for beverage and commercial purposes, which they failed to register as required by law.[3] The third count charges them with unlawfully making and fermenting 600 gallons of mash intended for distillation and production of spirits in a building not duly authorized as a distillery.[4] The fourth count charges them with the unlawful concealment of 2½ gallons of distilled spirits with intent to defraud the United States of the tax thereon.[5] The fifth count charges Bozza and Chirichillo with the unlawful transportation of 35 gallons of distilled spirits with intent to defraud the United States of the tax thereon.[6]
To sustain conviction of Bozza on any of the five counts, reliance must be placed on the testimony of Ellen Vettor. She testified that Chirichillo was the moving party throughout the enterprise. She identified Bozza as a man called "Jack" who "helped out" Chirichillo in the making of the alcohol inside the farmhouse. She swore that Bozza "wasn't there every day in the week" and that "he would just come around between two and three times a week he would appear there; he was not there steady." In response to a question of the court, "When he did come there what did he do?" she replied, "He would help, he would take instructions from Nick and help him around." The only other evidence she gave against Bozza was in describing how Chirichillo transported the alcohol from the farmhouse to Newark. She testified that the cans of alcohol were in Chirichillo's car, in which she rode, and that "sometimes we would follow Jack Bozza's car." She testified further that so far as she knew there never was any alcohol carried in Bozza's automobile.
The question for our determination is whether Vettor's testimony, relating to Bozza, as summarized above, is sufficient to sustain conviction on any of the counts. Section 332 of the Criminal Code[7] makes every person who "directly commits any act constituting an offense defined in any law of the United States, or aids, abets, counsels, commands, induces, or procures its commission" a "principal." Vettor's testimony justified a jury finding that Chirichillo directly committed and Bozza aided, abetted or counseled the commission of the offenses charged in the first three counts: Cf. United States v. Johnson, 1943, 319 U.S. 503, 514, 63 S.Ct. 1233, 87 L.Ed. 1546.
But, the concealment and transportation counts stand on a different footing. Mere evidence that Bozza "helped around" in the cooking of alcohol would not justify a finding that he directly concealed or that he aided or abetted in the concealment of the specific 2½ gallons of alcohol found in the still's receiving tank: Cf. Czarnecki v. United States, 3 Cir., 1938, 95 F.2d 32; United States v. Sall, 3 Cir., 1940, 116 F. 2d 745.
We reach a similar conclusion regarding *595 the conviction on the transportation count. Mere evidence that Chirichillo in transporting the alcohol sometimes followed Bozza's automobile would not warrant a finding that Bozza transported or aided or abetted in the illegal transportation of 35 gallons of alcohol.
Consequently, the convictions on the fourth and fifth counts cannot stand.
Appellant challenges the legality of the sentence on the first three counts. On the morning of July 23, 1945, following the return of the guilty verdict, the trial judge sentenced Bozza to two years' imprisonment on each of the first three counts and to two years' and six months' imprisonment on the fourth and fifth counts, all the sentences to run concurrently. That same day, about five hours later, Bozza was recalled and the court added certain minimum mandatory fines and penalties to the sentences.[8] In the interim, Bozza had been taken to a marshal's detention room in the same building in which the United States District Court is held and from there removed to the Hudson County Jail in Jersey City, a federal place of detention, where he awaited transportation to the place where his sentence was to be served. Appellant now contends that because he had begun service of his sentence (18 U.S.C.A. § 709a) the trial judge lacked the power to increase his punishment by adding the fines and penalties. It is true that a judge is powerless to add to a sentence, once validly imposed, after the prisoner has begun to serve it. This is "upon the ground that to increase the penalty is to subject the defendant to double punishment for the same offense in violation of the Fifth Amendment to the Constitution, which provides that no person shall `be subject for the same offense to be twice put in jeopardy of life or limb'": United States v. Benz, 1931, 282 U.S. 304, 307, 51 S.Ct. 113, 114, 75 L.Ed. 354. Cf. Roberts v. United States, 1943, 320 U.S. 264, 64 S.Ct. 113, 88 L.Ed. 41.
However, it is well established that imposition of a sentence at variance with the statutory requirements is a "void act". Such a sentence may be superseded by a new sentence in conformity to the provisions of the statute. It is no hindrance that the correction even when it entails a greater punishment occurs after sentence has been partially served or after the term of court has expired: See King v. United States, 1938, 69 App.D.C. 10, 98 F.2d 291, DeBenque v. United States, 1936, 66 App. D.C. 36, 85 F.2d 202, 106 A.L.R. 839, certiorari denied, 1936, 298 U.S. 681, 56 S.Ct. 960, 80 L.Ed. 1402, rehearing denied, 1936, 299 U.S. 620, 57 S.Ct. 6, 81 L.Ed. 457; Anderson v. Rives, 1936, 66 App.D.C. 174, 85 F.2d 673; Egan v. United States, 1923, 52 App.D.C. 384, 287 F. 958; Harman v. United States, C.C., 1892, 50 F. 921; D.C., 1895, 68 F. 472 (same case on resentence).[9] These authorities are dispositive of appellant's reliance on the double jeopardy clause of the Fifth Amendment unless they are distinguishable because, here, the trial judge corrected the erroneous sentence on his own initiative.
"Double jeopardy" is a plastic concept. Its application has never been immutably fixed, either at common law or *596 under the protective Bill of Rights. Palko v. Connecticut, 1937, 302 U.S. 319, 322, 58 S.Ct. 149, 82 L.Ed. 288. Uncorrected, the court's action was violative of congressional will: Ex parte United States, 1916, 242 U.S. 27, 37 S.Ct. 72, 61 L.Ed. 129, L.R.A. 1917E, 1178, Ann.Cas.1917B, 355. Corrected, it merely imposed upon the defendant a penalty fixed by Act of Congress. This is neither double jeopardy nor double punishment. We see no constitutional hindrance to the court's action: cf. United States v. Roberts, 320 U.S. 264, 276, 277, 64 S.Ct. 113, 88 L.Ed. 41 (dissent by Frankfurter, J.) We conclude that the sentence as amended by the court below is valid and operative: cf. Rowley v. Welch, 1940, 72 App.D.C. 351, 114 F.2d 499.
Appellant's final contention that the charge of the trial judge "took the form of animated argument and amounts to acts of advocacy in favor of the government" is without merit. Taking the charge in its entirety, we believe it to be a fair presentation of the case and without prejudice to the appellant.
Since we have concluded that the government's proof was insufficient to sustain a conviction on either the fourth or fifth counts, a reversal must follow. The question is whether we must remand for a new trial or whether it is proper to direct entry of judgment of acquittal. A directed verdict of acquittal requires action by a jury and it has been held, under common law criminal practice, that upon an erroneous refusal of a trial judge to direct a verdict of acquittal, the appellate court must remand for a new trial. Cf. Tatcher v. United States, 3 Cir., 1939, 107 F.2d 316 with United States v. Tatcher, 3 Cir., 1942, 131 F.2d 1002. But see Commonwealth v. Benz, 1935, 318 Pa. 465, 472, and 477, 178 A. 390.
By the Rules of Criminal Procedure for the District Courts of the United States, effective March 21, 1946, motions for directed verdict are abolished and in their place are substituted motions for judgment of acquittal. Rule 29(a).[10] And, Rule 29 (b) permits judgments non obstante veredicto.[11] In the Advisory Committee Note to Rule 29(b), it is stated that, "This rule is in substance similar to Rule 50(b) of the Federal Rules of Civil Procedure [28 U.S. C.A. following section 723c] and permits the court to render judgment for the defendant notwithstanding a verdict of guilty. Some Federal courts have recognized and approved the use of a judgment non obstante veredicto for the defendant in a criminal case, Ex parte United States, 7 Cir., 101 F.2d 870 [131 A.L.R. 176], affirmed by an equally divided court, United States v. Stone, 308 U.S. 519, 60 S.Ct. 177, 84 L.Ed. 441. The rule sanctions this practice."
Rule 59 provides that the Rules "govern all criminal proceedings" commenced after their effective date, "and so far as just and practicable all proceedings then pending." The present is a "pending" proceeding. It is both just and practicable to reverse and remand for entry of judgment of acquittal on the fourth and fifth counts because of insufficiency of proof to sustain such convictions.
Accordingly, judgment of the court below *597 is affirmed as to the conviction and sentence on the first three counts. It is reversed and remanded for entry of judgment of acquittal on the fourth and fifth counts.
NOTES
[1] This is a receptacle into which the alcohol drips in the process of distillation. Presence of rust and water gives rise to appellant's speculation that the 2½ gallons of alcohol thus found might easily have been the residue in the tank remaining after the operators thought they had emptied it.
[2] 26 I.R.C. Sec. 2833(a), 26 U.S.C.A. Int.Rev.Code, § 2833(a).
[3] 26 I.R.C. Sec. 2810(a), 26 U.S.C.A. Int.Rev.Code, § 2810(a).
[4] 26 I.R.C. Sec. 2834, 26 U.S.C.A. Int. Rev.Code, § 2834.
[5] 26 I.R.C. Sec. 3321(a), 26 U.S.C.A. Int.Rev.Code, § 3321(a).
[6] 26 I.R.C. Sec. 2803, 26 U.S.C.A. Int. Rev.Code, § 2803.
[7] 18 U.S.C.A. § 550.
[8] Thus, conviction on the first count carried a mandatory punishment of a fine of not less than $100 nor more than $5000 and imprisonment for not less than thirty days nor more than two years. Punishment for conviction on the second count is fixed by Act of Congress at a penalty of $500, fine of not less than $100 nor more than $1000 and imprisonment for not less than one month nor more than two years. Under count 4, conviction required a fine of not less than $500 nor more than $5000 and imprisonment for not less than six months nor more than two years. As to each count, on recalling the prisoner, the court added the minimum fine and penalty as required in order to bring the sentence into conformity with the Internal Revenue Code provisions cited in footnotes 2, 3, 4 supra.
[9] In these cases, the defendant attacked the original improperly imposed sentence. A resentence even to a greater punishment than that originally imposed would not violate the double jeopardy clause of the Fifth Amendment: Murphy v. Commonwealth of Massachusetts, 1900, 177 U.S. 155, 20 S.Ct. 639, 44 L.Ed. 711; cf. Kepner v. United States, 1904, 195 U.S. 100, 24 S.Ct. 797, 49 L.Ed. 114, 1 Ann.Cas. 655; Trono v. United States, 1905, 199 U.S. 521, 26 S.Ct. 121, 50 L.Ed. 292, 4 Ann.Cas. 773.
[10] Rule 29(a) provides as follows: "Motions for directed verdict are abolished and motions for judgment of acquittal shall be used in their place. The court on motion of a defendant or of its own motion shall order the entry of judgment of acquittal of one or more offenses charged in the indictment or information after the evidence on either side is closed if the evidence is insufficient to sustain a conviction of such offense or offenses. If a defendant's motion for judgment of acquittal at the close of the evidence offered by the government is not granted, the defendant may offer evidence without having reserved the right."
[11] Rule 29(b) provides as follows: "If a motion for judgment of acquittal is made at the close of all the evidence, the court may reserve decision on the motion, submit the case to the jury and decide the motion either before the jury returns a verdict or after it returns a verdict of guilty or is discharged without having returned a verdict. If the motion is denied and the case is submitted to the jury, the motion may be renewed within 5 days after the jury is discharged and may include in the alternative a motion for a new trial. If a verdict of guilty is returned the court may on such motion set aside the verdict and order a new trial or enter judgment of acquittal. If no verdict is returned the court may order a new trial or enter judgment of acquittal."
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60 B.R. 137 (1986)
In re Timothy M. SIGWORTH, Debtor(s).
Lora E. SIGWORTH, Plaintiff(s),
v.
Timothy M. SIGWORTH, Defendant(s).
Bankruptcy No. 85-0203, Related Case: 85-00681.
United States Bankruptcy Court, N.D. Ohio, W.D.
March 25, 1986.
David F. Wiley, Toledo, Ohio, for plaintiff.
Thomas Connolly, Toledo, Ohio, for defendant.
MEMORANDUM OPINION AND ORDER
RICHARD L. SPEER, Bankruptcy Judge.
This cause comes before the Court upon the Complaint To Determine Dischargeability filed by the Plaintiff in the above entitled adversary action. The parties have agreed that the issues raised by this Complaint are primarily issues of law, and that the Court may render a decision in this case based solely upon the written arguments of counsel. The parties have submitted such arguments and have had the opportunity to respond to the arguments made by opposing counsel. The Court has reviewed those arguments as well as the entire record in this case. Based upon that review and for the following reasons the Court finds that Judgment should be entered for the Plaintiff.
FACTS
The facts in this case do not appear to be in dispute. The Plaintiff and Defendant in this case were married on July 6, 1974. *138 They were subsequently divorced on November 28, 1984, by an Order of the Lucas County Court of Common Pleas, Domestic Relations Division. As a part of that decree, the Court Ordered that the Debtor-Husband 1) pay to the Plaintiff-Wife the sum of Two Hundred Fifty and no/100 Dollars ($250.00), 2) deliver certain furniture to the Plaintiff, and to 3) pay all outstanding debts which had accrued during the marriage. The Court also Ordered that the Plaintiff would have a Judgment against the Debtor for attorney fees in the amount of Seven Hundred Fifty and no/100 Dollars ($750.00). However, the Order provided that if the Debtor paid Five Hundred and no/100 Dollars ($500.00) to the Plaintiff's counsel on or before a date certain, that the Judgment would be considered satisfied. It is unclear whether or not the Debtor satisfied the obligation in sufficient time to avail himself of the lesser amount. However, the Debtor's schedules list an unsecured debt to the Plaintiff in the amount of Seven Hundred Fifty and no/100 Dollars ($750.00). It appears that this debt is the obligation in question.
The Debtor filed his voluntary Chapter 7 Petition with this Court on May 7, 1985. As indicated, he listed his former spouse as an unsecured creditor for the obligations imposed by the divorce decree. In response to the filing of the Petition, the Plaintiff filed this adversary action, wherein she seeks a determination as to the dischargeability of the obligation to pay attorney fees. She argues that the obligation is in the nature of alimony and support and is, therefore, nondischargeable. The Debtor summarily opposes the contentions made by the Plaintiff.
LAW
The provisions of 11 U.S.C. Section 523(a) state in pertinent part:
(a) A discharge under section 727, 1141, or 1328(b) of this title . . . does not discharge an individual debtor from any debt
(5) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree, or other order of a court of record or property settlement agreement, but not to the extent that
(B) such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support;
Under this section, any debt for alimony, support, and maintenance is not dischargeable in bankruptcy. However, the Bankruptcy Court is not required to accept as determinative the terms of a divorce decree which establish whether particular obligations are property settlements or alimony, maintenance and support. Conrad v. Conrad (In re Conrad), 33 B.R. 601 (Bkcy. N.D.Ohio 1983). The Bankruptcy Court may review the terms of a divorce decree and may determine whether any particular obligation is actually in the nature of a property settlement, or whether it is alimony, maintenance and support. Kline v. Kline (In re Kline), 42 B.R. 141 (Bkcy.N. D.Ohio 1984). In that regard, it is generally held that an obligation to pay attorney fees which is imposed by a divorce decree is alimony for purposes of nondischargeability under 11 U.S.C. Section 523(a)(5). While some distinctions have been drawn when the obligation may be paid directly to the attorney, this distinction is not supported in a majority of the jurisdictions. See, Conrad v. Conrad, supra. This Court is among the majority. See, Conrad v. Conrad, supra, Brace v. Moran (In re Brace), 13 B.R. 551 (Bkcy.N.D.Ohio 1981).
In the present case, the terms of the divorce decree clearly indicate that the Debtor is responsible for payment of the Plaintiff's attorney fees which accrued during the divorce proceedings. Although the decree also imposes other obligations on the Debtor, it appears that the attorney fee obligation was a part of the decree's scheme to insure the Plaintiff's future maintenance and support. The Court recognizes that there may be circumstances *139 where the alimony and support requirements of a divorce decree are sufficiently great so as to justify a finding that an award of attorney fees is in the nature of a property settlement. However, those circumstances must be determined on a case-by-case basis. A review of the facts in the present case finds that while the decree also provides that the Debtor is responsible for other obligations to the Plaintiff, these obligations are not sufficient in either quantity or character so as to justify a deviation from the Court's established position on this issue. Therefore, in the absence of other factors which would warrant the characterization of the debt for attorney fees as a property settlement, it must be concluded that the obligation, as set forth in the divorce decree, is non-dischargeable.
In reaching this conclusion the Court has considered all the evidence and arguments of counsel, regardless of whether or not they are specifically referred to in this Opinion.
It is ORDERED that Judgment be, and is hereby GRANTED to the Plaintiff.
It is FURTHER ORDERED that the debt to the Plaintiff for attorney fees be, and is hereby, found to be nondischargeable.
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516 S.W.2d 755 (1974)
Eunice Langley Martin PORTER, Appellant,
v.
C. L. THALMAN, Appellee.
No. 15349.
Court of Civil Appeals of Texas, San Antonio.
November 13, 1974.
Rehearing Denied December 18, 1974.
*756 Petry & Petry, Jeptha Tatum, III, Carrizo Springs, for appellant.
Mann, Castillon, Freed & Kazen, Laredo, for appellee.
BARROW, Chief Justice.
Appellant has perfected her appeal from a judgment entered after a jury trial whereby her deed, which conveyed forty acres of land in Dimmit County to appellee, was reformed so as to delete a mineral reservation by appellant of a one-half interest of the oil and mineral rights underlying said premises for a period of twenty-five years.
The deed was executed by appellant pursuant to an agreement entered into on September 3, 1969, by these parties in settlement of a pending suit which had been filed by appellant and her lessee against appellee and his father to enjoin the defendants from trespassing upon appellant's property or damaging same. The agreement provides in part:
"... Mr. Thalman, will exchange a forty acre tract of land, which he owns, and which appears to be Survey 84 in the portion of the county map, which is here in evidence as Joint Exhibit #1, which forty acre tract would then be adjoining Mrs. Porter's 321.85 acre tract; and Mrs. Porter will in consideration for said conveyance to her convey to Mr. Thalman her forty acre tract which abuts and adjoins the forty acre tract of Mr. Thalman, conditioned, however, that the mineral rights which the parties may convey to each other in this exchange of forty acre tracts is equal, not referring to value but equal in realty interest."
Some delay was encountered in exchanging deeds in that fee title was not actually in Thalman and he had to exchange and release certain liens. Mrs. Porter's deed was executed on December 16, 1969, and Thalman's deed was executed on March 18, 1970; however, they were held by the escrow agent, Andrew P. Johnson, Esq., until delivered on March 31, 1970. Thalman's deed to Mrs. Porter was subject to a reservation of one-half interest in the mineral estate for twenty-five years from August 22, 1969, as set out in the deed from Esther Carlson et al. to C. L. Thalman. Thus, he conveyed a one-half interest in the mineral estate to Mrs. Porter together with the remainder interest in the other one-half. Production was discovered in 1971 on the tract conveyed to Thalman by Mrs. Porter and when he did not receive any royalty payments, he made inquiry of *757 his attorney and of the lessee, Sun Oil Company. Thalman learned at this time that Mrs. Porter had not unequivocally conveyed one-half of the minerals to him.
Thalman filed his suit shortly thereafter on May 31, 1971, wherein he alleged that the parties had covenanted by the agreement of September 3, 1969, to convey to the other all of the surface and the minerals such grantor then possessed in the respective tracts. He sought specific performance to correct Mrs. Porter's deed so that it conveys the minerals owned by her at such time. Shortly before this case proceeded to trial, Thalman filed an amended petition wherein he abandoned his prayer for specific performance. Instead, he alleged that the conveyance from Mrs. Porter was not clear in the sense that the mineral reservation could possibly be construed as reserving all of the minerals under said tract to Mrs. Porter.[1] He prayed that the court order reformation of said deed so that it conveys to him one-half of the minerals underlying said tract and further that he recover the amount of royalties received by Mrs. Porter after September 3, 1969.
Mrs. Porter specially denied in her answer that the agreement was that each would convey all the minerals that they owned in their respective tracts. She alleged that on the contrary, the agreement was that conveyance of the mineral interests would be optional, but if they did choose to convey same, the exchanges would be equal in realty interest. She also affirmatively asserted the defenses of res judicata, waiver and estoppel.
Four issues were submitted to the jury and the answers thereto form the basis of the court's judgment. The jury found substantially as follows:
1. Thalman and Mrs. Porter DID agree in the settlement agreement that each would transfer to the other a certain 40-acre tract of land if each could also convey to the other an equal mineral interest under said 40-acre tract.
2. Thalman and Mrs. Porter DID intend that the deed from Mrs. Porter to Thalman dated December 16, 1969, convey one-half of the minerals underlying the 40-acre tract therein described.
3. The general warranty deed from Mrs. Porter to Thalman DID fail to express the real intention of the parties to convey one-half of the minerals underlying the 40-acre tract described as a result of mistake, misapprehension or inadvertence of the attorneys representing Thalman and Mrs. Porter.
4. The deed from Mrs. Porter to Thalman IS ambiguous in referring to the mineral reservations therein as it is doubtful and is capable of more than one construction.
(This issue was conditionally submitted and was answered in violation of the court's instruction.)
Appellant asserts eighteen assignments of error which we have grouped under several propositions. She urges by several points that the judgment should be reversed and a take-nothing judgment rendered. Appellant asserts that the order of dismissal in the prior suit is res judicata of the claim asserted herein or operated to release her from such claim. It is further urged that appellee waived his right to assert a claim for reformation or is estopped from asserting such claim in that he accepted appellant's deed without complaint. She urges under several assignments of error *758 that her deed is clear and unambiguous and there is no pleading or proof to justify reformation of the deed. Finally, it is urged that appellee is not entitled to equitable relief since he does not appear with clean hands.
There are other points which seek a reversal and remand because of procedural errors. She complains of the submission of Questions Nos. 2 and 4 because there was no proper pleading of mutual mistake. In this connection it is urged that the trial court erred in permitting appellee to plead mutual mistake by a trial amendment filed nine days after the verdict was received. Error is urged also in the submission of Question No. 1 in that it is a law question and not an ultimate issue. Appellant further urges that the court erred in refusing to submit two issues she requested. Complaint is made of the erroneous admission of parol testimony to explain the agreement of September 3, 1969, and Mrs. Porter's deed to Thalman. Finally, it urged that the jury finding of mutual mistake is so against the great weight and preponderance of the evidence as to be manifestly unjust.
We must first consider whether the claim asserted here by appellee is barred by the agreement and subsequent dismissal of the prior suit. It is true that appellant and appellee, along with two others, were adverse parties in the prior suit and that this claim arose out of the agreement executed in settlement of same. Nevertheless, the claims are not identical and the claim asserted here by appellee could not have been decided in the first suit. Therefore, the doctrine of res judicata is not applicable. State v. Standard, 414 S.W.2d 148 (Tex.1967). Nor was this claim for reformation of the deed released by the order of dismissal in the first suit.
The escrow agent delivered Mrs. Porter's deed on March 31, 1970, and it was placed of record on May 27, 1970. No complaint was made of same by Thalman until a short time before the suit was filed. Appellant urges that since appellee accepted the deed without complaint, he is estopped as a matter of law from now complaining of the mineral reservation, or, in any event, waived his right to reform the deed. The testimony of appellee and his attorney, Mr. Cabello, that neither realized that Mrs. Porter had not conveyed to Thalman any of the minerals until shortly before the suit was filed raises a fact issue at the very least and defeats appellant's claim to estoppel or waiver as a matter of law. Fireman's Fund Indemnity Co. v. Boyle General Tire Co., 392 S.W.2d 352 (Tex.1965).
Appellant also urges that she is entitled to judgment as a matter of law in that her deed clearly and unambiguously conveys to Thalman only a reversionary interest in one-half of the minerals and there is no basis for reformation of same. This proposition is largely based on the inadequacy of appellee's pleadings. Although Mr. Cabello testified that he is still of the opinion that Mrs. Porter's deed conveys one-half of the minerals to Thalman, it does not do so.[2] This construction was undoubtedly apparent to appellee in that, otherwise, he would have sued Sun Oil Company seeking recovery of his royalties. Thus, appellee's suit seeks a reformation of the deed, not to remove an ambiguity but rather to rewrite the reservation so as to carry out the agreement of the parties. This purpose is clearly seen in the judgment of the trial court which rewrote the mineral reservation almost completely.
This purpose could be achieved by a suit seeking specific performance of the agreement or by a suit seeking a reformation of the deed. Specific performance, although pleaded by appellee in his original petition, was abandoned and is not in the *759 case. Therefore, appellee's judgment must be based on reformation of the deed. Despite hardship, relief by reformation will be denied in the absence of proof of a definite agreement between the parties which has been misstated in the written memorandum because of a common mistake to both contracting parties. Champlin Oil & Refining Co. v. Chastain, 403 S.W.2d 376 (Tex.1965). See also McClung v. Lawrence, 430 S.W.2d 179 (Tex.1968); Miles v. Martin, 159 Tex. 336, 321 S.W.2d 62 (1959).
It is immaterial whether appellee's construction of the agreement of September 3, 1969, as found by the jury is upheld or not in that Mrs. Porter concedes that the mineral interest conveyed would be equal. The jury found that Mrs. Porter's deed to Thalman failed to express the real intention of the parties to convey one-half of the minerals underlying the 40-acre tract as a result of mistake, misapprehension or inadvertence of the attorneys representing Thalman and Mrs. Porter. The judgment is based on this finding of mutual mistake. Appellant urges that the judgment cannot stand since there was neither timely pleading nor proof of mutual mistake.
The amended petition on which Thalman went to trial does not allege a mutual mistake, but rather that the mineral reservation is not clear. Nevertheless, the charge inquired as to whether the deed failed to express the parties real intention "as a result of mistake, misapprehension or inadvertence of the attorneys representing" the parties. "Mistake" was defined by the court as "a misapprehension of the draftsman of the instrument in question and the recipient thereof, each of said parties operating under the same mistake as to the legal meaning and operation of the language employed in the writing. Mrs. Porter objected to this definition and also to the issue inquiring as to whether the language of the deed was a mutual mistake of the attorneys for the reason that there was no pleading of mutual mistake. The trial court verbally granted Thalman leave to amend his petition; however, the trial amendment was not filed until some nine days after the verdict was received. This amendment was purportedly filed by appellee under authority of Rule 67, Texas Rules of Civil Procedure (1967), over the objection of appellant.
Rule 67 provides in part that when issues not raised by the pleadings are tried by express or implied consent of the parties they shall be treated in all respects as if they had been raised in the pleadings. Amendment may be made to conform the pleadings to the evidence by leave of the court at any time up to the submission of the case to the jury; "provided that written pleadings, before the time of submission, shall be necessary to the submission of special issues; ...." (Emphasis ours.) It is urged by appellee that the issue of mutual mistake was tried by implied consent of the parties, and therefore, the trial court properly granted leave for the trial amendment.
There is substantial evidence from both Thalman and Mr. Cabello that appellee and his attorney were mistaken as to the mineral interest conveyed by Mrs. Porter. Mrs. Porter did not testify as she was ill and confined to a nursing home. There is no testimony whatsoever in the record regarding her construction of the deed. She was represented in the first suit by W. O. Murray, Jr., Esq., and although he did not testify, appellee urges that there is evidence through him that raised a fact issue of mistake on the part of Mrs. Porter and her attorney. Mr. Cabello testified, over timely objection by appellant, that when Thalman learned he was not receiving any royalty from the production under this tract, Mr. Cabello telephoned Mr. Murray. Mr. Cabello testified that Mr. Murray stated in response to his inquiry regarding Thalman's failure to receive any royalty payment: "There's no reason why Mr. Thalman should not be getting it.' It is thus urged that Mr. Murray mistakenly construed the deed of Mrs. Porter as conveying *760 one-half of the mineral interest to Thalman.
In civil cases, the admissions by an attorney in regard to matters as to which he is authorized to represent his client are receivable against the client. 2 McCormick & Ray, Texas Law of Evidence, Sec. 1169 (2nd ed. 1956). However, the statement of Mr. Murray does not come within this exception to the hearsay rule. The statement was purportedly made more than a year after the litigation had been concluded, wherein he had represented Mrs. Porter, and there is no showing that he represented Mrs. Porter at this latter time. Furthermore, such statement was in the nature of an opinion rather than a declaration of fact and thus not within the agency exception to the hearsay rule. Isaacs v. Plains Transport Co., 367 S.W.2d 152 (Tex.1963); Texas General Indemnity Co. v. Scott, 152 Tex. 1, 253 S.W.2d 651 (1952); Odom v. Lacy, 405 S.W.2d 718 (Tex.Civ.App.Eastland 1966, writ ref'd n. r. e.). The trial court erred in admitting this hearsay evidence and it is without probative force.
Nevertheless, we believe there is other evidence in the record to raise an issue that Mrs. Porter was mistaken as to the effect of her deed, and particularly the mineral reservation. She alleged that the September 3, 1969, agreement of the parties was that the conveyance of mineral interests would be optional, but if the parties did choose to convey minerals the exchanges would be equal in realty interest. There is nothing to show that she did not intend to carry out this agreement to convey an equal mineral interest. The uncontradicted evidence establishes that the deed signed by Thalman conveying his tract to Mrs. porter was actually prepared by Mr. Murray. It was thus known to him in his capacity as agent for Mrs. Porter prior to delivery of the deeds that a one-half mineral interest was to be conveyed. It is further seen that the mineral reservation retained by "grantor" in her deed is substantially similar to the reservation in Thalman's deed.[3]
We conclude from this record that the issue of mutual mistake by the attorneys for the parties was raised during the trial, thus it was within the trial court's discretion to grant appellee leave to plead such issue by trial amendment. Rules 66, 67, Tex.R.Civ.P. (1967); Rose v. Shearrer, 431 S.W.2d 939 (Tex.Civ.App.San Antonio 1968, no writ). Nevertheless, it is seen that appellee's trial amendment alleging mutual mistake was not filed before the submission of the case to the jury as required by the express language of Rule 67. See Arnold D. Kamen & Co. v. Young, 466 S.W.2d 381. (Tex.Civ.App. Dallas 1971, writ ref'd n. r. e.); Precision Motors v. Cornish, 413 S.W.2d 752 (Tex. Civ.App.Dallas 1967, writ ref'd n. r. e.); Tillery v. Tillery, 304 S.W.2d 156 (Tex.Civ. App.San Antonio 1957, no writ); 2 McDonald, Texas Civil Practice, Sec. 8.08 (1970). Nor was there a waiver by appellant in that she timely and clearly pointed out this deficiency by her objections to the charge of the court.
The trial court erred in overruling appellant objections to the submission of the issue of mutual mistake in the absence of a timely pleading of this issue. Since the judgment is based on the jury finding of mutual mistake, this error is such as to require a reversal of the judgment and a remand of the case. The other asserted procedural errors are unlikely to occur on a retrial and therefore it is unnecessary to consider same.
The judgment of the trial court is reversed and the cause remanded for a new trial.
NOTES
[1] The reservation in Mrs. Porter's deed to Thalman provides:
"This deed is made subject to the following mineral reservations towit:
One-half of all oil, gas and other minerals reserved in favor of W. H. Wilson by Deed recorded in Volume 99, Page 122-3 of the Deed Records of Dimmit County, Texas.
The above named grantor reserves a one-half interest of the oil and mineral rights in said premises for a period of twenty-five (25) years from the delivery date of this deed, but that at the end of said period such rights terminate and such rights shall then vest in the owners of said real estate as of that date."
[2] There is an apparent mistake as to the owner of the one-half reserved in Wilson deed under the rule of Duhig v. Peavy-Moore Lumber Co., 135 Tex. 503, 144 S.W.2d 878 (1940). This mistake or ambiguity does not enlarge the grant to appellee.
[3] Thalman's deed to Mrs. Porter contains the following reservation:
"The property is subject to a reservation of one-half interest in the mineral estate for twenty-five years from August 22, 1969, as set out in the deed from Ester Carlson, et vir., et al., to C. L. Thalman, dated August 22, 1969, recorded in Volume 121, Page 350, et seq., Deed Records, Dimmit County, Texas."
|
581 F.3d 1248 (2009)
Shelby MOSES, Plaintiff-Appellant,
v.
Chris HALSTEAD, Defendant, and
Allstate Insurance Company, Garnishee-Appellee.
Nos. 08-3088, 08-3199.
United States Court of Appeals, Tenth Circuit.
September 8, 2009.
*1250 William J. Pauzauskie of Topeka, KS, for Plaintiff-Appellant.
Barrett J. Vahle (Curtis E. Woods with him on the brief), of Sonnenschein Nath & Rosenthal LLP, Kansas City, KS, for Garnshiee-Appellee.
Before MURPHY, SEYMOUR, and TYMKOVICH, Circuit Judges.
SEYMOUR, Circuit Judge.
Shelby Moses brings this appeal, asserting that the district court erred in its choice-of-law and state-law determinations. Ms. Moses requested a garnishment order, in Kansas, against Allstate Insurance Company ("Allstate") for its alleged negligent or bad faith refusal to settle Ms. Moses' claim against Chris Halstead, Allstate's insured. The district court found for Allstate, concluding that Missouri law applies and requires an actual assignment to Ms. Moses by the insured of its claim against Allstate for its failure to settle, an assignment Ms. Moses does not have. Because we conclude that Kansas law applies to this dispute, we reverse and remand.
I.
In Missouri, on November 22, 1996, Chris Halstead wrecked a car given to Ms. Moses by her father and insured by Allstate. Allstate had issued the insurance policy in Kansas to Ms. Moses' father, a Kansas resident, covering liability for uninsured motorist benefits. Ms. Moses, a passenger in the car, was injured in the accident. Shortly thereafter her father reported the accident to Allstate, requesting coverage for his daughter's injuries. Allstate began an investigation.
A year later, Ms. Moses' counsel made an offer to Allstate to settle her claims against Mr. Halstead under the Allstate policy for the policy limit of $25,000. Allstate rejected Ms. Moses' offer. Both Ms. Moses' offer to settle and Allstate's rejection of it occurred in Kansas.
Ms. Moses then filed a tort action against Mr. Halstead in Missouri, the place of the accident. The jury awarded her $100,000 in actual damages. After the judgment was entered, Allstate paid Ms. Moses $25,000 in partial satisfaction of the judgment. Ms. Moses registered the judgment in Kansas state court and requested an Order of Garnishment against Allstate for its alleged negligent or bad faith refusal to settle with her on her claim against Mr. Halstead. Allstate removed the case to federal court.
Thereafter, Allstate filed a motion for summary judgement. The parties based their summary judgment arguments on Kansas law and the district court, without addressing any governing law issue, applied Kansas law in ruling on the motion. The court denied the motion, determining there were material issues of fact that if backed by evidence would prove Allstate's negligent or bad faith refusal to settle Ms. Moses' claims against Mr. Halstead.
At trial, Allstate changed course and contended that Missouri law should be applied. The district court took the issue under advisement, noting in the pretrial order that Allstate had asserted the applicability of Missouri law. After a bench *1251 trial, the court denied Allstate's motion for a judgment as a matter of law and held that Missouri law governs Ms. Moses' claim. The district court then found that, under Missouri law, Allstate had acted in bad faith in refusing to settle and entered judgment for Ms. Moses. Allstate filed a motion for reconsideration arguing that, among other things, Missouri law requires an assignment from the insured, in this case Mr. Halstead, before a judgment creditor can file an action against the insurance company for its bad faith refusal to settle. Mr. Halstead did not assign his claim against Allstate for bad faith refusal to settle to Ms. Moses. The district court granted Allstate's motion for judgment, rejecting Ms. Moses' argument that the court should have applied Kansas law, which does not require an assignment in these circumstances.
II.
We review the district court's choice-of-law and state-law determinations de novo. Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523, 1535 (10th Cir.1996) ("We review choice of law determinations de novo, and findings of fact underlying those determinations for clear error."); Woolard v. JLG Indus., Inc., 210 F.3d 1158, 1168 (10th Cir.2000) ("A federal district court's state-law determinations are entitled to no deference and are reviewed de novo."). On appeal, the parties focus on two main issues: (1) whether Missouri or Kansas law governs the negligent or bad faith refusal to settle claim; and (2) whether under the applicable law Ms. Moses can garnish Allstate for $75,000, an amount in excess of the policy limit, for negligent or bad faith refusal to settle.
A. The Governing Law
In Kansas, an insurance company can be held liable not only for acting in bad faith but also for acting negligently. See Spencer v. Aetna Life & Cas. Ins. Co., 227 Kan. 914, 611 P.2d 149, 155 (1980). In Missouri, however, to hold an insurance company liable for bad faith refusal to settle the plaintiff must provide proof that the insurer acted in bad faith. See Ganaway v. Shelter Mut. Ins. Co., 795 S.W.2d 554, 556 (Mo.Ct.App.1990). The district court, in this diversity case, was initially correct in applying Kansas law to determine whether Kansas or Missouri law should govern Ms. Moses' negligent or bad faith refusal to settle claim. See Mem'l Hosp. of Laramie County v. Healthcare Realty Trust, Inc., 509 F.3d 1225, 1229 (10th Cir.2007).
In Kansas, an insurer's duties are contractually based.[1]See Glenn v. Fleming, 247 Kan. 296, 799 P.2d 79, 90 (1990) (stating that "a wrongful failure to settle arises from the insurer's contractual obligation to defend" and "[a]n action to enforce that obligation is accordingly based on breach of contract."). Breach of this contractual duty, however, is determined by a tort standard of care. See id. Since 1957, Kansas courts "have used `negligence,' `due care,' and other tort expressions to describe the substance of what is a contract duty." Id. This contract-tort fusion has created confusion in defining the duty of good faith, and in describing situations involving negligent or bad faith breaches of duties to settle and defend. See id.
This case involves two issues regarding the district court's choice-of-law determination *1252 arising out of the insurance contract. First, whether the district court erred in applying Missouri law to determine whether Allstate had a contractual obligation to act in good faith to settle. Second, whether the district court was wrong in applying Missouri law to the question of Allstate's fulfillment of such obligation.
1. Law Governing the Existence of Allstate's Contractual Obligation to Act in Good Faith to Settle
Kansas courts follow the Restatement (First) of Conflict of Laws (1934) in addressing choice-of-law issues. See ARY Jewelers, L.L.C. v. Krigel, 277 Kan. 464, 85 P.3d 1151, 1161 (2004). The Restatement contains two general rules for contracts cases. See Restatement (First) of Conflict of Laws §§ 332 and 358 (1934).
When the question raised by the contractual dispute goes to the substance of the obligation, Kansas courts apply the primary rule contained in section 332, lex loci contractus, which calls for the application of the law of the state where the contract is made. See Layne Christensen Co. v. Zurich Canada, 30 Kan.App.2d 128, 38 P.3d 757, 766-67 (2002); Restatement (First) of Conflicts of Law § 358, Cmnt. b (1934); cf. In re K.M.H., 285 Kan. 53, 169 P.3d 1025, 1031-32 (2007) ("[T]o the extent this case is viewed as a contractual dispute, Kansas courts apply the Restatement (First) of Conflict of Laws § 332 (1934), and the doctrine of lex loci contractus, i.e., the law of the state where the contract is made governs."). It is only when the question goes to the manner and method of performance that the law of the place of performance applies. See Layne Christensen Co., 38 P.3d at 766-67; Restatement (First) of Conflicts of Law, § 358, Cmnt. b (1934).
Kansas courts have struggled in determining whether questions raised in cases before them are governed by the law of the place of performance or the place where the contract was made. See Layne Christensen Co., 38 P.3d at 766-67 (comparing Novak v. Mutual of Omaha Ins. Co., 29 Kan.App.2d 526, 28 P.3d 1033 (2001), applying lex loci contractus when determining validity of contract provision, and Aselco, Inc. v. Hartford Ins. Group, 28 Kan.App.2d 839, 21 P.3d 1011 (2001), applying performance rule on duty to defend issue and lex loci contractus to contract interpretation issue). The Restatement recognizes the difficulty in drawing a line between these concepts:
[T]here is no logical line which separates questions of the obligation of the contract, which is determined by the law of the place of contracting, from questions of performance, determined by the law of the place of performance. There is, however, a practical line which is drawn in every case by the particular circumstances thereof. When the application of the law of the place of contracting would extend to the determination of the minute details of the manner, method, time and sufficiency of performance so that it would be an unreasonable regulation of acts in the place of performance, the law of the place of contracting will cease to control and the law of the place of performance will be applied. On the other hand, when the application of the law of the place of performance would extend to a regulation of the substance of the obligation to which the parties purported to bind themselves so that it would unreasonably determine the effect of an agreement made in the place of contracting, the law of the place of performance will give way to the law of the place of contracting.
Restatement (First) of Conflicts of Law § 358, Cmnt. b (1934) (emphasis added).
*1253 Allstate relied on Aselco in arguing that the law of the place of performance of Allstate's duty to defend should apply, asserting that the Missouri tort action was where the duty to defend occurred. Ms. Moses, on the other hand, relied on Novak, which rejects Aselco's approach, to contend the law of the place of contracting should apply. The district court agreed with Allstate.
In Aselco, a panel of the Kansas Court of Appeals held that where an insurance company's performance of its duty to defend takes place in Kansas, Kansas law governs the determination of the existence of such duty. See Aselco, 21 P.3d at 1018. But Aselco neither cited to any Kansas cases nor offered any analysis for its holding. See id. Moreover, Aselco so held despite admitting that it was not required to reach the governing law issue because it was not raised in the trial court. See id.
A few months later in Novak, another panel of the Kansas Court of Appeals, including one of the judges on Aselco, declined to follow Aselco to apply the place of performance rule. 28 P.3d at 1039. The court held that the law of the place where the contract was made governed the validity of the one-year limitations provision in the contract. See id. The panel noted that "[a]lthough some Kansas conflicts cases have involved issues of performance, few cases have used the place of performance rule to resolve contract choice of law decisions." Id. at 1039 (citing cases).
Aselco and Novak each declared it was following the Restatement (First) of Conflicts of Law (1934). See Aselco, 21 P.3d at 1018; Novak, 28 P.3d at 1039. But neither case actually explained how its analysis comported with the Restatement. Aselco stated that "[b]ecause [the insurance company's] performance of its duty to defend would have taken place in Kansas, Kansas law governs the determination of the existence of the duty." Aselco, 21 P.3d at 1018. Novak relied on the fact that an overwhelming majority of Kansas Supreme Court and Court of Appeals cases have applied the law of place of contracting. See Novak, 28 P.3d at 1039. In Layne Christensen Co., however, a case decided a few months later by the same panel that decided Aselco, the court provided further guidance on what question to ask in applying the Restatement. See Layne Christensen Co., 38 P.3d at 766-67 (holding that the meaning of the coverage limit is governed by the law of place of contracting because it goes to the substance of obligation). In Layne Christensen Co., the court acknowledged the Novak and Aselco panels' struggles in applying the law of the place of performance versus the place of contracting. See id. at 766. It did not endorse either outcome. Instead, it followed Kansas Supreme Court precedent adopting the test set out in the Restatement and provided guidance based on section 358, Comment b. This test focuses on whether the question before the court goes to the substance of the obligation or the manner of performance. See Layne Christensen Co., 38 P.3d at 767 (citing Simms v. Metropolitan Life Ins. Co., 9 Kan.App.2d 640, 685 P.2d 321 (1984) and 4 Holmes' Appleman on Insurance 2d, Conflicts and Choice of Law, § 21.5 p. 274-75 (1998)). Unlike Layne Christensen Co., neither Novak nor Aselco analyzed whether the question before them went to the substance of the obligation or the manner of performance.
The Kansas Supreme Court has not directly addressed whether the law of place of contracting or performance governs the question whether an injured party may, under Kansas law, bring an action for negligent or bad faith refusal to settle against a tortfeasor's insurance company in a garnishment action. Therefore, we "must predict what the Kansas Supreme Court would do if faced with the issue." *1254 Westar Energy, Inc. v. Lake, 552 F.3d 1215, 1228 (10th Cir.2009).
Based on the foregoing analysis, we predict that the Kansas Supreme Court would agree with the reasoning of Layne Christensen Co. and hold that whether Ms. Moses has a cause of action for negligent or bad faith refusal to settle against Allstate goes to the substance of Allstate's contractual duties rather than the manner of performance under the insurance policy. Therefore, the issue is governed by the law of the place where the contract was made, in this case Kansas. Accordingly, we reverse the district court's decision applying Missouri law to this issue.
2. Law Governing Whether Allstate Fulfilled Its Contractual Obligation to Act in Good Faith in Response to Ms. Moses' Settlement Offer
Applying the Layne Christensen Co. test, we address the next issue before us: does determining whether Allstate fulfilled its contractual obligation to act in good faith to settle Ms. Moses' claim go to the substance of the obligation or the manner and method of performance? In general, fulfillment of a contractual obligation goes to the manner and method of performance by the party charged with the obligation. Therefore, the law of the place of performance determines whether Allstate fulfilled its contractual obligation to act in good faith to settle. The record shows that both Ms. Moses' offer to settle and Allstate's rejection of the offer took place in Kansas. Accordingly, Kansas is the place Allstate was required to perform its contractual obligation to consider Ms. Moses' settlement offer in good faith, and the district court should have applied Kansas law to determine whether Allstate fulfilled this contractual obligation.
B. Applying Kansas Law
The district court incorrectly applied Missouri law to Ms. Moses' claim for bad faith refusal to settle. As the court recognized, Missouri law requires the insured to assign its contractual claim against the insurance company for bad faith refusal to settle to its judgment creditor. See District Court Order, filed Oct. 23, 2007, citing cases. Ms. Moses contends that Kansas law does not require such an assignment of rights in order for her to proceed against Allstate by way of a garnishment action. Allstate relies on Benchmark Insurance Co. v. Atchison, 36 Kan. App.2d 373, 138 P.3d 1279 (2006), a case not on point, to argue that Kansas law requires an assignment in the circumstances here. In so doing, it disregards Kansas' long-standing garnishment law.
Under Kansas law, Ms. Moses, as a judgment creditor, has a right to proceed by garnishment against Allstate. Nichols v. Marshall, 491 F.2d 177, 184 (10th Cir.1974) (applying Kansas law) ("When judgment was duly entered in [plaintiff's] action against [defendant] ... Allstate's contractual duty became fixed, inuring to the benefit and use of [plaintiff], and became subject to garnishment."). "Under long standing garnishment law in Kansas, once judgment has entered, the judgment creditor then takes the place of the judgment debtor and may take that which the latter could enforce." Id. at 183 (citing Burlington & M.R.R. Co. v. Thompson, 31 Kan. 180, 1 P. 622 (1884)). Therefore, Ms. Moses, "a judgment creditor in a typical personal injury case where the tort-feasor is alive, and not deceased, may proceed by garnishment against the tort-feasor's insurer to satisfy within policy limits the judgment obtained against the tortfeasor."[2]Id.
*1255 The case on which Allstate relies is fully distinguishable. It involved an interpleader action by the insurance company, not a garnishment. See Benchmark Ins. Co., 138 P.3d at 1280. The case was brought before any judgment was rendered against the insured or the insurance company and the injured party was not a judgment creditor.[3]See id. at 1280-82. Thus, Benchmark addressed the requirement of an assignment for a non-judgment creditor in an interpleader actionnot an assignment to a judgment creditor in a garnishment action.
Allstate has not cited any Kansas case requiring the judgment creditor to obtain an assignment before it can bring a garnishment action against the insurance company for negligent or bad faith refusal to settle on behalf of the tortfeasor.[4] Moreover, contrary to Allstate's assertion, when dealing with whether an injured party has to obtain an assignment of rights from the insured in order to have standing to assert a damages claim in excess of the policy limit against the insured, the Kansas Court of Appeals has expressly stated:
Kansas law is settled that in a garnishment action, a garnishor is a third-party beneficiary of the underlying contract of insurance entitled to assert a claim arising from a breach of the insurance company's duty to exercise reasonable care and good faith in efforts to settle a claim against its insured. See Gilley v. Farmer, 207 Kan. 536, 543-44, 485 P.2d 1284 (1971); Farmco, Inc. v. Explosive Specialists, Inc., 9 Kan.App.2d 507, 515, 684 P.2d 436 (1984).
Johnson v. Westhoff Sand Co., 31 Kan. App.2d 259, 62 P.3d 685, 699 (2003). Accordingly, under Kansas law Ms. Moses did not need to obtain an assignment of rights from Mr. Halstead before she acquired the right, as his judgment creditor, to bring a claim against Allstate in excess of the policy limit for a negligent or bad faith refusal to settle.
With respect to the merits of the claim against Allstate, under Kansas law an insurance company has a "duty to exercise reasonable care and good faith in efforts to settle a claim against its insured." Id. To trigger this duty, the insured need only put the insurer on notice of the claim. Cf. Glickman, Inc. v. Home Ins. Co., 86 F.3d 997, 1001 (10th Cir.1996) (stating that based on "settled insurance contract law in this circuit and Kansas ... the duty to defend is triggered when there is a potential of liability."). Allstate's duty to act with reasonable care and good faith was thus triggered when Ms. Moses' father put the company on notice of the accident.
The district court applied Kansas law at the summary judgment stage and concluded that there were material issues of fact preventing the court from granting Allstate's *1256 motion. District Court Order, filed Feb. 28, 2007. At trial, the district court applied Missouri law and found that Allstate refused to settle the claims with Ms. Moses in bad faith. District Court Order, filed July 23, 2007. In so doing, the court relied on almost identical sets of facts to (1) deny Allstate's summary judgment motion (under Kansas law) and (2) find that Allstate refused to settle in bad faith at trial (under Missouri law). Compare District Court Orders, filed Feb. 28, 2007 and July 23, 2007. Nevertheless, because the district court has not had the opportunity to apply Kansas law to its findings of fact, we remand for it to do so in the first instance.
For the foregoing reasons, this case is REVERSED and REMANDED to the district court for further proceedings in accordance with this opinion.[5]
NOTES
[1] Kansas courts "see little distinction in principle between a garnishment proceeding to establish an indebtedness within policy limits and one to establish an indebtedness outside these limits arising from a breach of the insurer's duty to exercise reasonable care and good faith in settling a claim against the insured. In either case the action sounds in contract." Glenn v. Fleming, 247 Kan. 296, 799 P.2d 79, 89 (1990).
[2] Moreover, "Kansas courts have gone a step farther and have held that a judgment creditor may proceed by garnishment against a tort-feasor's insurer for the unpaid balance of the judgment which is in excess of the policy limits where the insurer refused to settle within policy limits by virtue of negligence or bad faith, the courts holding that such claim sounds in contract and is subject to garnishment even though unliquidated." Nichols, 491 F.2d at 183 (citing Gilley v. Farmer, 207 Kan. 536, 485 P.2d 1284 (1971) and Bollinger v. Nuss, 202 Kan. 326, 449 P.2d 502 (1969)).
[3] "[A]n insured's claim against an uninsured motorist carrier for failing to settle the claim in good faith does not accrue before the conclusion of the underlying litigation for the contractual uninsured motorist insurance benefits." Nungesser v. Bryant, 283 Kan. 550, 153 P.3d 1277, 1286 (2007) (quoting Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So.2d 1289, 1291 (Fla.1991)).
[4] The mere fact that in some cases an insured might decide to assign its contractual rights under the insurance policy, including the right to bring an action against its insurance company for negligent or bad faith refusal to settle, does not require the conclusion that such an assignment is a legal requirement under Kansas law. Cf. Glenn, 799 P.2d at 91.
[5] Because the case is being remanded, we need not address the parties' arguments regarding Ms. Moses' attorney fees.
|
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
Assigned On Brief November 13, 2000
JOSEPH HENRY, ET AL. v. BI-DISTRICT BOARD OF URBAN MINISTRY,
INC., ET AL.
Direct Appeal from the Circuit Court for Davidson County
No. 98C-1988 Hamilton V. Gayden, Jr., Judge
No. M2000-01128-COA-R3-CV - Filed February 23, 2001
This appeal arises from an action for negligence. Plaintiff was sleeping in a homeless day shelter
when he was struck in the head by Assailant, who was another guest of the shelter. Plaintiff brought
suit against Shelter and its controlling Board for failing to provide security. The trial court found
that neither Shelter nor Board owed a duty to Plaintiff because providing security would place an
onerous burden on the parties. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed; and
Remanded
DAVID R. FARMER , J., delivered the opinion of the court, in which W. FRANK CRAWFORD , P.J., W.S.,
and HOLLY K. LILLARD, J., joined.
Thomas F. Bloom, Nashville, Tennessee, for the appellant, Joseph Henry.
David M. Bullock, Nashville, Tennessee, for the appellees, Bi-District Board of Urban Ministry, Inc.
and Community Care Fellowship.
OPINION
Community Care Fellowship (CCF) operates a non-profit “day shelter”1 which provides
services for homeless people in Nashville, Tennessee. In 1997, Joseph Henry visited the shelter to
clean up and rest after a crack cocaine binge. While at the shelter, Mr. Henry went to sleep in a large
open room known as the shelter’s “great room.” While Mr. Henry was sleeping, an unknown man
entered the shelter to obtain food from the attendants. After receiving a loaf of bread, the man
1
The shelter is open from 9:00 a.m. to 4:00 p.m . and does no t provide overn ight accomm odations.
proceeded to the great room where he spied Mr. Henry asleep.2 The man thereafter left the shelter
and obtained a brick from the alley outside. Re-entering the shelter, the man proceeded to strike the
sleeping Mr. Henry in the head with the brick. The man then fled the scene.
Mr. Henry and his wife, Della Henry,3 brought suit against CCF, the Bi-District Board of
Urban Ministry, Inc. (Board),4 and the unknown assailant.5 CCF and Board filed a motion for
summary judgment on the basis that neither owed a duty to protect Mr. Henry from the criminal
actions of a third party. After a hearing on the matter, the trial court found that “a requirement that
the Board and CCF provide sufficient security to protect . . . its guests from all harm at the hands of
other such guests would impose an onerous burden” on the Defendants. As a result, the court
granted the Defendants’ motion for summary judgment. This appeal followed.
The issue, as we perceive it, is as follows:
Did the trial court err in granting the summary judgment motion through its findings
that the Defendants owed no duty to Mr. Henry to protect him from the criminal
actions of third parties?
With respect to a trial court’s legal conclusions, our review is de novo with no presumption of
correctness. See, e.g., Bell ex rel. Snyder v. Icard, Merrill, Cullis, Timm, Furen and Ginsburg,
P.A., 986 S.W.2d 550, 554 (Tenn. 1999); Tenn. R. App. P. 13(d). A summary judgment is
appropriate only if no genuine issues of material fact exist, and the defendant is entitled to a
judgment as a matter of law. Tenn. R. Civ. P. 56. A court must consider the evidence in a light most
favorable to the non-moving party and allow all reasonable inferences in its favor. See Byrd v. Hall,
847 S.W.2d 208 (Tenn. 1993).
Duty of Defendants
In a negligence claim, “a plaintiff [must] prove the following elements: (1) a duty of care
owed by the defendant to the plaintiff; (2) conduct by the defendant falling below the standard of
care amounting to a breach of the duty; (3) an injury or loss; (4) causation in fact; and (5) proximate
causation.” Rice v. Sabir, 979 S.W.2d 305, 308 (Tenn. 1998). If there is no duty owed by the
plaintiff, then there can be no action for negligence. See Doe v. Linder Constr. Co., 845 S.W.2d
173, 178 (Tenn. 1992). The existence of a duty is a question of law to be determined by the court.
See Carson v. Headrick, 900 S.W.2d 685, 690 (Tenn. 1995). It arises when “the foreseeable
probability and gravity of harm posed by defendant's conduct outweigh the burden upon defendant
2
It is not clear from the record if Mr. Henry was the only person sleeping in the great room at the time.
3
Ms. Henry’s action was for loss of consortium. This action was subsequently non-suited.
4
Board is the governing entity of CCF.
5
The claim brought against “John Doe” was later non-suited.
-2-
to engage in alternative conduct that would have prevented the harm.” McCall v. Wilder, 913
S.W.2d 150, 153 (Tenn. 1985).
The Supreme Court has set forth several factors to be considered in determining
whether a risk is unreasonable, including
the foreseeable probability of the harm or injury occurring; the
possible magnitude of the potential harm or injury; the importance or
social value of the activity engaged in by defendant; the usefulness of
the conduct to defendant; the feasibility of alternative, safer conduct
and the relative costs and burdens associated with that conduct; the
relative usefulness of the safer conduct; and the relative safety of
alternative conduct.
McCall v. Wilder, 913 S.W.2d 150, 153 (Tenn. 1995). After consideration of these
factors, we must then balance “the foreseeability and gravity of the potential harm
against the burden imposed in preventing that harm.”
Estes v. Peels, No. E1999-00582-COA-R3-CV, 2000 WL 1424808, at *3 (Tenn. Ct. App. Sept. 21,
2000) (quoting Coln v. City of Savannah, 966 S.W.2d 34, 39 (Tenn. 1998)). “In weighing the
magnitude of harm and the burden imposed upon defendant, the court must consider whether
imposing a duty to take reasonable measures to protect patrons from the consequences of criminal
acts of third persons would place an onerous burden – economic or otherwise – upon [the]
defendants.” McClung v. Delta Square Ltd. Partnership, 937 S.W.2d 891, 904 (Tenn. 1996). If
a court finds that the burden to protect the plaintiff would be onerous to the defendants, it should find
that the defendants had no duty to provide such protection. See Estes, 2000 WL 1424808, at *7.
In the case currently before this court, the trial court found that “a requirement that the Board
and CCF provide sufficient security to protect . . . its guests from all harm at the hands of other such
guests would impose an onerous burden” upon the Board and CCF. Among the trial court’s reasons
were that “Board and CCF do not derive income from their guests, are not in a position to distribute
the cost of providing a high level of security, and thus must absorb the entire cost, reducing the
resources available to provide services to the homeless community.” After our own de novo review
of the record, we note that the testimony is not refuted that CCF is a non-profit organization funded
primarily through contributions from individuals and churches. In addition, a director of CCF stated
in his deposition that CCF had no money within its budget to provide security at the shelter and that
the requirement to add security would have an effect on the shelter’s operations. As such, we find
that the trial court was correct in its ruling that neither Board nor CCF had any duty to provide
security to protect Mr. Henry from the harm that he suffered. The trial court properly granted the
motion to dismiss sought by Board and CCF, and we hereby affirm its ruling.
-3-
Conclusion
Based on the foregoing conclusions, we hereby affirm the trial court’s ruling. Cost on
appeal are assessed against the Appellant, Joseph Henry, and his surety, for which execution may
issue if necessary.
___________________________________
DAVID R. FARMER, JUDGE
-4-
|
Case: 18-50784 Document: 00515388946 Page: 1 Date Filed: 04/20/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
April 20, 2020
No. 18-50784 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
DAVID DAVALOS, SR.,
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 2:16-CR-1115-11
Before JOLLY, GRAVES, and HIGGINSON, Circuit Judges.
PER CURIAM:*
Defendant-Appellant David Davalos, Sr. (“Mr. Davalos”) challenges
several aspects of the criminal sentence imposed on him by the district court.
Having considered his arguments, we affirm in part, vacate in part, and
remand this case for further proceedings.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 18-50784 Document: 00515388946 Page: 2 Date Filed: 04/20/2020
No. 18-50784
I. BACKGROUND
In August 2016, a federal grand jury returned a nine-count indictment
against Mr. Davalos and 25 others. Mr. Davalos was specifically named in two
counts: Count Three, which charged him with conspiring to possess with intent
to distribute five or more kilograms of cocaine in violation of 21 U.S.C. §§ 846,
841(a)(1) and (b)(1)(A); and Count Five, which alleged that he opened, used,
and maintained a premise in Crystal City, Texas, for the purpose of
distributing cocaine in violation of 21 U.S.C. § 856(a)(1) and (b).
The indictment included both (1) a notice of demand for forfeiture of real
property; and (2) a money judgment with a provision regarding substitute
assets. In January 2017, the government filed a bill of particulars stating that
it sought the criminal forfeiture of both the property named in the indictment
and additional properties described in the bill.
In March 2017, Mr. Davalos pleaded guilty to Counts Three and Five of
the indictment without a plea agreement. The government offered a factual
basis supporting the plea, which Mr. Davalos admitted with two exceptions.
Specifically, Mr. Davalos (1) objected to the drug quantity and drug proceeds
in the factual basis, and (2) notified the court that he did not agree to the
government’s forfeiture provisions. The district court approved Mr. Davalos’s
plea, but deferred matters related to the forfeiture to the sentencing hearing.
In May 2018, the government filed an advisory regarding the items of
which it intended to seek forfeiture at the upcoming sentencing hearing. The
advisory noted that, with respect to Mr. Davalos, the government planned to
seek (1) “[a] sum of money equal to the proceeds obtained by [Mr. Davalos] from
the violations he has pled guilty to”; (2) real property located at 310 West
Zapata Street in Crystal City, Texas; (3) $4,118.00 in U.S. currency; and (4) a
2004 Cadillac Escalade.
2
Case: 18-50784 Document: 00515388946 Page: 3 Date Filed: 04/20/2020
No. 18-50784
Mr. Davalos’s sentencing hearing took place on August 29, 2018. During
the hearing, the court held a sealed bench conference to resolve issues
regarding drug quantity, role adjustments, and forfeiture. Following the bench
conference, the court determined that Mr. Davalos was subject to a guideline
sentence of 210–262 months for Count Three and 210–240 months for Count
Five. The district court found the advisory guideline sentencing ranges
“adequate” and imposed a concurrent 235-month term of imprisonment on each
count. The court also sentenced Mr. Davalos to supervised release.
The district court did not enter its written judgment until September 6,
2018. That judgment included an order of forfeiture and a forfeiture money
judgment. However, the government had not yet filed a motion for a
preliminary order of forfeiture or motion for entry of money judgment. It did
not do so until several weeks after entry of the district court’s written
judgment. The district court then entered a preliminary order of forfeiture and
an order of money judgment. Those orders were filed 83 and 97 days after Mr.
Davalos’s sentencing, respectively. Mr. Davalos filed his notice of appeal on
September 19, 2018.
On appeal, Mr. Davalos challenges (1) the district court’s entry of the
preliminary order of forfeiture and order of money judgment; and (2) his
within-guidelines sentence. He also seeks remand to conform the district
court’s oral pronouncement of sentence to its written judgment.
II. ORDER OF FORFEITURE AND MONEY JUDGMENT
Mr. Davalos advances two challenges to the forfeiture and money
judgment entered against him. We address each in turn.
A. Rule 32.2
Mr. Davalos contends that the district court exceeded its subject-matter
jurisdiction when it entered a preliminary order of forfeiture and order of
3
Case: 18-50784 Document: 00515388946 Page: 4 Date Filed: 04/20/2020
No. 18-50784
money judgment more than fourteen days after his sentencing and the entry
of judgment. Existing caselaw dictates otherwise.
The imposition of criminal forfeiture is governed by Federal Rule of
Criminal Procedure 32.2. That rule provides that the court, when forfeiture is
contested, must conduct a hearing after it finds the defendant guilty. Fed. R.
Crim. P. 32.2(b)(1)(B). If the court “finds that property is subject to forfeiture,
it must promptly enter a preliminary order of forfeiture setting forth the
amount of any money judgment, directing the forfeiture of specific property,
and directing the forfeiture of any substitute property if the government has
met the statutory criteria.” Fed. R. Crim. P. 32.2(b)(2)(A). Unless it is
“impractical” to do so, the court “must enter the preliminary order sufficiently
in advance of sentencing to allow the parties to suggest revisions or
modifications before the order becomes final as to the defendant under Rule
32.2.(b)(4).” Fed. R. Crim. P. 32.2(b)(2)(B). Rule 32.2(b)(4) provides that the
preliminary forfeiture order becomes final either “[a]t sentencing” or “at any
time before sentencing if the defendant consents.” Fed. R. Crim. P. 32.2(b)(4).
The district court must “include the forfeiture when orally announcing the
sentence or must otherwise ensure that the defendant knows of the forfeiture
at sentencing.” Fed. R. Crim. P. 32.2(b)(4)(B). The court must also include the
forfeiture order, either directly or by reference, in the judgment. Id.
Here, while the written judgment entered by the district court included
an order of forfeiture and a forfeiture money judgment, the government did not
actually move for a preliminary order of forfeiture or for entry of money
judgment until more than a month after sentencing. The preliminary order of
forfeiture was not issued until 83 days after sentencing, and the order of money
judgment was entered 97 days after sentencing.
Mr. Davalos therefore argues that the district court lacked subject
matter jurisdiction to enter either the preliminary order of forfeiture or the
4
Case: 18-50784 Document: 00515388946 Page: 5 Date Filed: 04/20/2020
No. 18-50784
order of money judgment. While subject matter jurisdiction is reviewed de novo
as a question of law, Gandy Nursery, Inc. v. United States, 318 F.3d 631, 636
(5th Cir. 2003), this court’s precedent makes clear that Mr. Davalos’s argument
is incorrect. The issue presented here is not jurisdictional, and plain error
review applies.
In United States v. Marquez, a $2 million money judgment was entered
against the defendant. 685 F.3d 501, 509 (5th Cir. 2012). Although the district
court included the money judgment in the defendant’s criminal judgment, it
failed to enter a preliminary order of forfeiture. See id. at 507, 510. On appeal,
the defendant argued that the money judgment was improperly issued because
the district court failed to comply with Rule 32.2’s requirements. Id. at 509.
The panel applied plain error review to the forfeiture issue because the
defendant did not object to the district court’s failure to enter the preliminary
order of forfeiture. See id. at 510. Applying plain error review, the panel
affirmed the district court because the defendant could not show that his
substantial rights were affected by the district court’s errors. Id. Although no
preliminary order was entered, this court allowed the money judgment to
stand.
The Marquez panel deemed the rules set forth in Rule 32.2 “procedural
requirements.” Id. at 509; see also id. at 510 (“Marquez has the burden of
showing that these procedural defects affected his substantial rights.”). And
“three-judge panels . . . abide by a prior Fifth Circuit decision until the decision
is overruled, expressly or implicitly, by either the United States Supreme
Court or by the Fifth Circuit sitting en banc.” Cent. Pines Land Co. v. United
States, 274 F.3d 881, 893 (5th Cir. 2001) (quoting United States v. Kirk, 528
F.2d 1057 (5th Cir.1976)). We therefore apply plain error review to the issue
at hand.
5
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No. 18-50784
On plain error review, this court may not correct an error in the district
court unless (1) there is error; (2) the error is plain; and (3) the error affects
substantial rights. United States v. Gomez, 905 F.3d 347, 353 (5th Cir. 2018).
Even when all three of those conditions are met, this court may only exercise
its discretion to notice a forfeited error if the error “seriously affects the
fairness, integrity, or public reputation of judicial proceedings.” Id.
With respect to the first two prongs of the plain error analysis, Mr.
Davalos has satisfied his burden. Rule 32.2’s mandates are clear, and the
district court’s deviation from those mandates is plainly erroneous. But Mr.
Davalos has not demonstrated that the district court’s failure to follow Rule
32.2 affected his substantial rights.
“As a general rule, an error affects a defendant’s substantial rights only
if the error was prejudicial.” United States v. Gonzalez-Rodriguez, 621 F.3d
354, 364 (5th Cir. 2010) (citing United States v. Olano, 507 U.S. 725, 734
(1993)). “Error is prejudicial if there is a reasonable probability that the result
of the proceedings would have been different but for the error.” Id. (citation
omitted). “The probability of a different result must be sufficient to undermine
confidence in the outcome of the proceedings.” Id. (citation omitted).
Mr. Davalos has not shown that there is a reasonable probability that
the result of his proceedings would have been any different had the district
court followed the appropriate procedures. See, e.g., Marquez, 685 F.3d at 510.
As such, he is not entitled to relief on this ground.
B. Honeycutt and 21 U.S.C. § 853
In addition to his argument regarding Rule 32.2, Mr. Davalos asserts
that the money judgment entered against him should be vacated in light of
Honeycutt, a recent Supreme Court decision addressing forfeiture from an
individual drug conspiracy defendant relating to the proceeds of a criminal
6
Case: 18-50784 Document: 00515388946 Page: 7 Date Filed: 04/20/2020
No. 18-50784
conspiracy. See Honeycutt v. United States, 137 S. Ct. 1626, 1630 (2017). We
agree.
21 U.S.C. § 853 governs forfeiture of property constituting or derived
from proceeds a defendant obtained as the result of certain drug crimes. Id.
Honeycutt concerned how Section 853 operates when two or more defendants
act as part of a conspiracy, id., as is the case here. The case established that,
under Section 853, a defendant may not be held jointly and severally liable for
property that his co-conspirator derived from the crime but that the defendant
himself did not acquire. Id. at 1635.
In this case, the government’s multi-party indictment was issued before
publication of Honeycutt. It sought a money judgment of $5,980,000.00 against
all defendants, for which they would be jointly and severally liable. At the
sentencing hearing, the district court initially found “that there is a money
judgment in the case of the amount alleged of [$]5,980,000, but that is joint
and several liability.” The government then alerted the district court to
Honeycutt, which was decided in the period between filing of the indictment
and the sentencing hearing. After the government indicated that it was only
seeking $1,794,000.00 because of Honeycutt, the following exchange occurred:
THE COURT: The total amount of the money judgment is
5,980,000, but that is everybody combined. Not just you alone. And
you said it was one what?
AUSA: 1.794 million.
THE COURT: Okay. Once – I don’t really know how to say this
now because the case law has gotten really strange about joint and
several liability.
AUSA: And he would just be liable, not jointly and severally, just
for him, for the 1.794.
THE COURT: Okay, you’re not – this is not joint and several
liability?
AUSA: No, Your Honor.
7
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No. 18-50784
THE COURT: All right. So your amount only, alone, would be
1.794 million, not the 5.98. Okay? Everybody else will be
responsible for the rest of it. Okay?
There was no more discussion regarding the money judgment.
Mr. Davalos argues that the district court erred by entering a money
judgment against him for $1.794 million without making any factual findings
about whether he actually acquired that amount or other substitute property
as a result of the crime. We review de novo. See United States v. Rasco, 123
F.3d 222, 226 (5th Cir. 1997).
The government contends only that the district court “did hold a lengthy
hearing where it was determined that the conspiracy was responsible for
proceeds in the amount of $5,980,000” and that its imposition of the $1,794,000
money judgment against Mr. Davalos was “procedurally and substantively
reasonable and should be affirmed.” It cites no law in support of that argument.
And the Supreme Court made clear in Honeycutt that the provisions of Section
853(a) “are in accord with the limitation of forfeiture to property the defendant
himself obtained.” Honeycutt, 137 S.Ct. at 1633.
Because the money judgment entered against Mr. Davalos is without
sufficient factual support, it should be vacated and this case remanded for the
purpose of making factual findings regarding the appropriate money
judgment.1
1 Given this finding, we do not address the parties’ dispute regarding whether the
district court should have required the government to make a showing under Section 853(p)
prior to entering the money judgment. We note, however, that even Section 853(p)—“the sole
provision of § 853 that permits the [g]overnment to confiscate property untainted by the
crime”—is limited to property “up to the value of the tainted property.” Honeycutt, 137 S.Ct.
at 1633–34 (internal quotation marks and citation omitted). As explained above, the district
court here made no factfinding regarding that value.
8
Case: 18-50784 Document: 00515388946 Page: 9 Date Filed: 04/20/2020
No. 18-50784
III. OTHER PROVISIONS OF SENTENCE
Mr. Davalos raises two additional challenges to his sentence, arguing
that (1) the district court committed reversible plain error because it misstated
the applicable standard in its Statement of Reasons; and (2) the case should be
remanded because the district court’s oral pronouncement of sentence conflicts
with its written judgment. While we find Mr. Davalos’s first argument
unpersuasive, we agree that this case should be remanded so that the district
court can amend the written judgment.
A. Statement of Reasons
When the spread of an applicable guideline sentencing range exceeds 24
months, federal law requires the district court to state—in open court and at
the time of sentencing—its “reason for imposing a sentence at a particular
point within the range.” 18 U.S.C. § 3553(c)(1). Here, the spreads of the
applicable guideline sentencing ranges were 52 months for Count Three and
30 months for Count Five.2 However, the district judge filed a Statement of
Reasons incorrectly stating that Mr. Davalos’s sentence was within an
advisory guideline range that “does not exceed 24 months.” Mr. Davalos
therefore argues that this court should vacate his sentence and remand for
resentencing.
Because Mr. Davalos did not raise an objection regarding this issue
below, this court’s review is for plain error. We therefore consider whether the
district court committed plain error that affected Mr. Davalos’s substantial
rights. See Gomez, 905 F.3d at 353. We conclude that it did not.
“While the sentencing court is required to state ‘the reasons for its
imposition of the particular sentence,’ a full explanation of the sentencing
2 The district court determined that Mr. Davalos was subject to a guideline sentence
of 210–262 months for Count Three and 210–240 months for Count Five.
9
Case: 18-50784 Document: 00515388946 Page: 10 Date Filed: 04/20/2020
No. 18-50784
factors is not required in every case.” United States v. Duke, 788 F.3d 392, 396
(5th Cir. 2015) (citing Rita v. United States, 551 U.S. 338, 356 (2007)). Indeed,
when the district court imposes a within-guidelines sentence, “‘little
explanation’ is required” to satisfy 18 U.S.C. § 3553(c). Id. (citing United States
v. Mares, 402 F.3d 511, 519 (5th Cir. 2005)). Rather, “[t]he sentencing judge
should set forth enough to satisfy the appellate court that [s]he has considered
the parties’ arguments and has a reasoned basis for exercising h[er] own legal
decisionmaking authority.” Id. (cleaned up).
Here, the district court’s oral statement of reasons for the imposition of
Mr. Davalos’s particular sentence was sufficient to meet the mandate of 18
U.S.C. § 3553(c). See, e.g., Rita, 551 U.S. at 359 (“Where a matter is as
conceptually simple as in the case at hand and the record makes clear that the
sentencing judge considered the evidence and arguments, we do not believe the
law requires the judge to write more extensively.”); Mares, 402 F.3d at 519
(“When the judge exercises her discretion to impose a sentence within the
Guideline range and states for the record that she is doing so, little explanation
is required.”). The district court made a statement immediately before
announcing Mr. Davalos’s particular sentence, noting that it was taking into
account “the advisory guidelines, as well as the policy statements of those
guidelines, together with other sentencing factors such as the nature and
circumstances of the offense, the seriousness of the offense, the history and
characteristics of the defendant, the need to promote respect for the law and to
provide just punishment for the offense, [and] the need to deter future criminal
conduct and to protect the public.” The court also advised that it was taking
into account “the allocution of the parties, as well as the factual information
contained within the presentence report.”
This court’s opinion in Ramos is a useful analogue. There, the district
court orally imposed a 144-month term of imprisonment and the written
10
Case: 18-50784 Document: 00515388946 Page: 11 Date Filed: 04/20/2020
No. 18-50784
judgment reflected the same 144-month term, but the Statement of Reasons
stated that the term of imprisonment was 135 months. United States v. Ramos,
33 F. App’x 704, *2 (5th Cir. 2002) (per curiam) (unpublished). A panel of this
court noted that the district court “stated orally the reasons for imposing the
particular sentence,” concluding that “[t]he only logical conclusion for the
discrepancy . . . is that the numeral ‘135’ in the ‘Statement of Reasons’ section
of the written judgment is merely a clerical error.” Id. The panel found that
“such a clerical error does not create doubts as to the period of incarceration
the district court intended to impose” and “did not affect [the defendant’s]
substantial rights.” Id.
Here, we conclude the same. Because the district court orally stated its
reasons for imposing the particular sentence it did, the dictates of 18 U.S.C.
§ 3553(c) were satisfied. The clerical error in the subsequent Statement of
Reasons did not affect Mr. Davalos’s substantive rights.
B. Written Judgment
Both parties acknowledge that, with respect to several special conditions
associated with Mr. Davalos’s term of supervised release, there is conflict
between the district court’s written judgment and oral pronouncement.
During the district court’s oral pronouncement of sentence, it said to Mr.
Davalos: “one of your standard conditions is that you’re not supposed to
associate with known felons.” But the district court went on to state that Mr.
Davalos had “the Court’s permission to associate with” his son, brothers, and
nephew, listing six individuals who were specifically exempted from the
condition. That amendment to the standard condition does not appear in the
written judgment.
There is additional conflict between the oral pronouncement and the
written judgment regarding where Mr. Davalos may live after his release from
prison. During sentencing, the district court said:
11
Case: 18-50784 Document: 00515388946 Page: 12 Date Filed: 04/20/2020
No. 18-50784
Now, this next condition, I’m – I’m imposing it right now in case
something goes haywire in terms of the – the valid place for Mr.
Davalos to live.
Mr. Davalos, I don’t know yet what’s going to happen with the
forfeiture on your house, so I’m imposing this out of an abundance
of caution. If, when you get out, you’ve got a place to live, probation
will file a motion with me, [and] I’ll remit this next condition.
Okay?
That the first six months of your term of supervised release or your
terms of supervised release, you shall reside at a residential
reentry center for a term of six months, and you shall follow the
rules and regulations of the center; that once employed, you shall
pay 25 percent of your weekly gross income, so long as that amount
does not exceed the daily contract rate.
While the written judgment reflects the imposition of a condition requiring Mr.
Davalos to reside in a residential reentry center for a term of six months, it
does not provide that this condition will be “remitted” if Mr. Davalos “has a
valid residence to go to” when he is released from prison.
If a written judgement “broadens the restrictions of requirements of
supervised release from an oral pronouncement,” the “appropriate remedy is
remand to the district court to amend the written judgment to conform to the
oral sentence.” United States v. Mireles, 471 F.3d 551, 558 (5th Cir. 2006). We
therefore conclude that this case should be remanded to the district court so
that, with respect to the two issues discussed in this section, it may conform
the written judgment to its oral pronouncement.
IV. CONCLUSION
For the reasons stated above, we VACATE the forfeiture money
judgment provision of Mr. Davalos’s sentence. We REMAND this case to the
district court so that it may (1) conduct factfinding regarding the appropriate
value of the money judgment in accordance with Honeycutt; and (2) conform
12
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No. 18-50784
the written judgment to its oral pronouncement of sentence. In all other
respects, we AFFIRM.
13
|
825 F.2d 411
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Kenneth B. SIMMONS, Plaintiff-Appellant,v.RUTHERFORD, CROCKETT AND DEMARCO, and Unknown Defendants,Defendants-Appellees.
No. 86-6292
United States Court of Appeals, Sixth Circuit.
July 31, 1987.
ORDER
1
Before KENNEDY and NELSON, Circuit Judges, and WEBER, District Judge.*
2
This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the record and the plaintiff's brief, this panel agrees unanimously that oral argument is not needed. Rule 34(a), Federal Rules of Appellate Procedure.
3
This pro se plaintiff who is an inmate at the Tennessee State Penitentiary appeals a district court order which dismissed his 42 U.S.C. Sec. 1983 complaint as frivolous under 42 U.S.C. Sec. 1915(d).
4
Plaintiff brought this action against the Nashville, Tennessee law firm of Rutherford, Crockett and DeMarco. Plaintiff's complaint alleges that the firm, which handled the estate of his father, failed to notify him of his father's death, thereby depriving him of the opportunity to attend the funeral. Plaintiff also contends that this lack of notification deprived him of the opportunity to possess personal knowledge of his inheritance rights. Plaintiff seeks $500,000 in punitive damages.
5
The district court properly dismissed this action as frivolous under Sec. 1915(d) in that plaintiff can prove no set of facts which would entitle him to relief under Sec. 1983. Malone v. Colyer, 710 F.2d 258, 261 (6th Cir. 1983).
6
Plaintiff improperly brought this action before the federal court because there exists no basis of federal jurisdiction. The district court properly held that this case presents no diversity of citizenship, no federal question and no violation of civil rights under state action. Therefore, it is a well-settled question that plaintiff's proper forum for redress is in the state courts.
7
For these reasons, the district court's judgment is affirmed. Rule 9(b)(5), Rules of the Sixth Circuit.
*
The Honorable Herman J. Weber, U.S. District Judge for the Southern District of Ohio, sitting by designation
|
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-04-00102-CR
Steven Jones, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF BASTROP COUNTY, 21ST JUDICIAL DISTRICT
NO. 10,745, HONORABLE TERRY FLENNIKEN, JUDGE PRESIDING
OPINION
Appellant Steven Jones was convicted by a jury of two counts of indecency with a
child by contact and sentenced to ninety-nine years imprisonment, enhanced by a 1987 conviction
for aggravated sexual assault. See Tex. Pen. Code Ann. § 21.11 (West 2003). In six issues, he
appeals, asserting that the evidence is legally and factually insufficient, the jury charge contained
reversible error, and the court erred in admitting his confession. We affirm the conviction.
Factual Summary
Appellant was indicted for touching the sexual organ of V.M., who was five or six
years old at the time of the offense (count one), and touching the sexual organ and anus of D.M., who
was three or four (count two); all of the inappropriate touching was alleged to have happened on the
same night.1 The victims are sisters, and appellant is their step-grandfather. Their parents are Victor
Gianna and Christina Rawls. Gianna and Rawls were not married at the time of the offense, but have
since married. Appellant is married to Mary Jones, who is Rawls’s mother, and the victims refer to
appellant as their grandfather.
Gianna testified as an outcry witness and said that in February 2003, appellant’s name
came up in conversation while V.M. was present, and V.M. started “just, like, panting and stayed
real quiet.” Gianna took V.M. aside and asked her if anything was wrong, saying he would not be
angry at V.M. if something had happened. At first, V.M.’s “eyes got big and she stayed quiet for a
while.” Gianna talked to her “about good touch/bad touch,” and asked “specifically what happened
to her, if anything happens to her when she goes to her grandmother’s house.” V.M. told Gianna that
appellant had touched her “in her private area.” She “pointed to her private area” and started crying.
Gianna then took D.M. aside to ask her the same question, and “she told [Gianna] the same thing.”
He asked her if her grandfather ever touched her in any way, and D.M. told him “[t]hat he would
touch her in her private area.” Rawls was with Gianna and D.M. during this conversation.2
1
The indictment alleged that the touching occurred “on or about the 1st day of March, A.D.
2002.” The State elicited testimony explaining that the victims’ outcries were made in March 2003,
but that V.M., who turned six years’ old in early February 2003, indicated in her interview with the
Child Advocacy Center that she was five years’ old when appellant touched her. In his interview
with the police on March 26, 2003, appellant admitted that he had touched V.M. about “a month and
a half” earlier, which would be early February 2003. The State used March 2002 as the “on or about
date” so as to account for any discrepancies in time, but the evidence shows that the inappropriate
touching made the subject of this prosecution occurred during one incident on one night.
2
Despite hearing the girls’s outcries, however, Gianna did not report appellant to the
authorities because he and Rawls were wanted by the police. At the time of trial, Gianna was in jail,
having been sentenced to five years’ imprisonment for burglary and engaging in organized crime.
2
Gianna denied having problems with appellant except that “he wasn’t supposed to
be around my kids, and he was always somehow around them.”3 Gianna testified that he did not like
it when the girls stayed with Mary Jones or with Jones’s mother, Mary Stockton, because “they let
[appellant] go over there and walk around freely and he would tell them he wanted to pick up the
kids and he would pick them up and drive off.”
Cynthia Ledesma, Christina Rawls’s cousin, lived with Stockton. Ledesma said
appellant frequently came over to see V.M. and D.M., but she never saw him behave inappropriately.
She said that in March 2003, while Gianna was hiding from the police and the children were being
cared for by relatives, he called and yelled at Stockton, telling her that he did not want the children
to be around appellant. After hearing that complaint, Ledesma talked to each girl individually. V.M.
told Ledesma that appellant “would touch her in her private area,” and D.M. “said the same thing.”
Ledesma took the girls to the Bastrop County Sheriff’s Office the next day.
V.M. was called to testify and, after some inconsistent answers early on, demonstrated
to the trial court’s satisfaction that she knew the difference between the truth and a lie. V.M.
testified that one night while she and D.M. were at appellant’s house watching cartoons and a
“[n]asty” movie, appellant touched her on “[t]he private,” which she also described as “[b]etween
your legs.” She testified that appellant touched her skin under her panties with his hand and that he
touched D.M. “[o]n the behind.” V.M. said that it was D.M. who turned off the “nasty movie.”
3
Gianna was not asked to explain why he did not want appellant to be around his daughters,
but during the punishment phase, it was shown that appellant had been convicted in 1987 of sexually
assaulting Rawls, appellant’s stepdaughter, Gianna’s wife, and the mother of the victims.
3
Lee Nusbaum, an investigator with the Bastrop County Sheriff’s Department, testified
that in March 2003, after his office received a report of V.M.’s outcry, he interviewed appellant, who
was already in police custody for parole violations. During the interview, Nusbaum showed
appellant a videotape of an interview with the girls, and appellant lowered his head and began to cry.
Appellant said he would not make a written statement but agreed to a videotaped statement.
Nusbaum read appellant his rights and had him sign a form acknowledging that he had been
informed of and understood his rights, and that he wished to waive them. Appellant told Nusbaum
that on the night in question, about a month and a half before the interview, he was lying on his
couch, watching pornographic movies with V.M. and D.M., and that he “reach[ed] down and
touch[ed] [V.M.] between her legs and—twice between her legs.” Appellant said he touched V.M.
under her pants but not inside her panties, but said it was “possible” that he touched V.M.’s skin.
Appellant said he was “[j]ust rubbing across her panties.” Asked whether he had touched D.M., he
said, “I don’t know. There’s a possibility that I could have, but not intentionally.” Appellant thought
D.M. turned off the pornographic movie.
Sufficiency of the Evidence
In his first two issues, appellant argues that the evidence is legally and factually
insufficient to support the jury’s verdict as to count two (the molestation of D.M.) because there was
insufficient evidence to show he touched D.M. on her sexual organ or anus.
In reviewing the legal sufficiency of the evidence, we view the evidence in the light
most favorable to the verdict and ask whether any rational trier of fact could have found the essential
elements of the offense beyond a reasonable doubt. Johnson v. State, 23 S.W.3d 1, 7 (Tex. Crim.
4
App. 2000). In reviewing the factual sufficiency, we view all of the evidence in a neutral light,
comparing the evidence in support of a disputed fact with evidence tending to disprove that fact. Id.
We will set aside a verdict for factual insufficiency only if the proof of guilt is so obviously weak
or so greatly outweighed by contrary proof as to undermine confidence in the verdict. Id. at 11. We
will reverse a fact-finder’s determination only if the record indicates manifest injustice; otherwise,
we will accord due deference to the determinations of fact, particularly those involving evaluations
of credibility. Id. at 8-9. The jury is the sole judge of the weight and credibility of witness
testimony. Barnes v. State, 62 S.W.3d 288, 298 (Tex. App.—Austin 2001, pet. ref’d). The jury may
accept or reject all or any of the evidence presented by either side, may draw reasonable inferences
from the evidence, and must reconcile any evidentiary conflicts. Id. We determine the sufficiency
of the evidence by viewing the cumulative effect of all of the evidence, not each fact in isolation.
Id. at 297.
A person commits indecency with a child by contact if he “engages in sexual contact
with the child.” Tex. Pen. Code Ann. § 21.11(a)(1). Sexual contact is “any touching by a person,
including touching through clothing, of the anus, breast, or any part of the genitals of a child.” Id.
§ 21.11(c)(1). The court of criminal appeals has stated that “we cannot expect the child victims of
violent crimes to testify with the same clarity and ability as is expected of mature and capable
adults.” Villalon v. State, 791 S.W.2d 130, 134 (Tex. Crim. App. 1990). A child need not testify
with precision as to where she was touched, and evidence that she was touched on her “privates” or
her “private area” or “between her legs” can support a finding that she was touched on her anus or
genitals. See, e.g., Gallegos v. State, 918 S.W.2d 50, 54 (Tex. App.—Corpus Christi 1996, pet.
5
ref’d) (seven-year-old victim told outcry witness that defendant kissed her, took off her clothes, and
put his “pee-pee” “in front of” and “in back of” her); O’Hara v. State, 837 S.W.2d 139, 141 (Tex.
App.—Austin 1992, pet. ref’d) (eleven-year-old victim testified that defendant touched victim’s
“privates” and put defendant’s “privates” “into my rear end”); Gottlich v. State, 822 S.W.2d 734, 741
(Tex. App.—Fort Worth 1992, pet. ref’d) (thirteen-year-old victim testified that defendant touched
her “private,” her “pee pee,” and “down there,” and that he put “his hand down my pants and
panties”), overruled in part on other grounds by Curry v. State, 861 S.W.2d 479, 482 n.2 (Tex.
App.—Fort Worth 1993, pet. ref’d); Guia v. State, 723 S.W.2d 763, 766 (Tex. App.—Dallas 1986,
pet. ref’d) (nine-year-old victim testified that defendant “touched her in her ‘private place’”); Bryant
v. State, 685 S.W.2d 472, 475 (Tex. App.—Fort Worth 1985, pet. ref’d) (five-year-old victim
testified that defendant touched her under her underpants and “down between [her] legs”).
In his statement to the police, appellant said that he might have touched D.M., but not
intentionally. Gianna testified that D.M. told him the same thing that V.M. had told him, which was
that appellant “touch[ed] her in her private area.” Ledesma also testified that she spoke to both girls
separately, that V.M. told her that appellant “touch[ed] her in her private area,” and that D.M. “said
the same thing.” Finally, V.M., who was six years’ old at the time she testified, said that she saw
appellant touch D.M. “[o]n the behind.” Viewed in the light most favorable to the jury’s verdict, a
reasonable jury could have found that this evidence established beyond a reasonable doubt that
appellant touched D.M. either on her genitals or her anus. See Johnson, 23 S.W.3d at 7. Even when
we view all of the evidence in a neutral light, there was no evidence presented that would dispute
the State’s evidence, which is not so obviously weak as to undermine confidence in the verdict. See
6
id. at 11. We hold that the evidence is legally and factually sufficient to support the jury’s verdict
as to count two. We overrule appellant’s first and second issues.
Misspelling of the Victims’ Last Name
In his third and fourth issues, appellant contends that the evidence is insufficient
because the indictment alleged that the victims’ last name was “Guana,” but the evidence showed
their name is “Gianna.” He argues that the two names are “incapable of being pronounced” alike.
The phrase “idem sonans” refers to names that, despite having different spellings,
sound sufficiently alike that a listener would have difficulty distinguishing them. Farris v. State, 819
S.W.2d 490, 496 (Tex. Crim. App. 1990), overruled on other grounds by Riley v. State, 889 S.W.2d
290, 301 (Tex. Crim. App. 1993) (op. on reh’g); Martin v. State, 541 S.W.2d 605, 606-07 (Tex.
Crim. App. 1976); see Dingler v. State, 705 S.W.2d 144, 145 (Tex. Crim. App. 1984) (“rule of ‘idem
sonans’ is that absolute accuracy in spelling a name is not required”; if misspelled name sounds
“practically identical with the correct name,” misspelling sufficiently identifies the person to whom
it refers). A variance between the spelling of a victim’s name in an indictment and the proper
spelling as proved at trial does not require reversal if the names sound alike, and whether two names
are idem sonans is a question left to the fact-finder. Farris, 819 S.W.2d at 496; see Martin, 541
S.W.2d at 607-08. Unless the two names are “patently incapable of being sounded alike,” a
defendant’s failure to ask that the fact-finder resolve the issue waives the complaint on appeal.
Farris, 819 S.W.2d at 496; see Martin, 541 S.W.2d at 608. Appellant never complained that the
victims’ last names were spelled incorrectly in the indictment and has not shown that the names are
incapable of sounding alike, and therefore he waived any error associated with the misspelling.
7
Furthermore, in 2001, the court of criminal appeals reaffirmed the fatal variance
doctrine, which provides that “when faced with a sufficiency of the evidence claim based upon a
variance between the indictment and the proof, only a ‘material’ variance will render the evidence
insufficient.” Gollihar v. State, 46 S.W.3d 243, 257 (Tex. Crim. App. 2001).4 A variance between
indictment and evidence is fatal only if it is material and prejudices the defendant’s substantial rights.
Id. (quoting United States v. Sprick, 233 F.3d 845, 853 (5th Cir. 2000)). That determination is made
by considering (1) whether the charging instrument sufficiently informed the defendant of the charge
so that he was able to prepare an adequate defense and (2) whether prosecution under the deficient
charging instrument might subject the defendant to the risk of a later prosecution for the same crime.
Id. (quoting Sprick, 233 F.3d at 853).
Appellant did not complain about the misspelling, seek to quash the indictment, or
argue that he was surprised by the State’s proof at trial. See Bowker v. State, 481 S.W.2d 141, 142
(Tex. Crim. App. 1972); Lopez v. State, 654 S.W.2d 521, 524 (Tex. App.—Corpus Christi 1983, pet.
ref’d). In fact, the misspelling was never noted in any way, and the record shows that appellant knew
the identity of the alleged victims from the beginning of the investigation, which started about three
4
We have been unable to find case law that discusses idem sonans in light of Gollihar other
than in passing. See Arellano v. State, 54 S.W.3d 391, 395 (Tex. App.—Waco 2001, pet. ref’d)
(citing Gollihar for proposition that variance between victim’s name in indictment and proof at trial
may be fatal, and stating that misspelling is not fatal if within idem sonans); see also Sanchez v.
State, No. 07-02-0287-CR, 2004 Tex. App. LEXIS 4440, at *5 (Tex. App.—Amarillo May 17, 2004,
no pet.) (not designated for publication) (discussing idem sonans and stating that consideration of
sufficiency of evidence must involve Gollihar inquiry into materiality of name variance). However,
the rule of idem sonans, that a misspelling is not fatal if it sounds like the correct name and thus
sufficiently identifies the victim so that the defendant is not misled to his prejudice, see Dingler v.
State, 705 S.W.2d 144, 145 (Tex. Crim. App. 1984), harmonizes with the holding of Gollihar that
a variance is not fatal unless if it is material and prejudices the defendant’s substantial rights.
8
months before the indictment was prepared. Further, because appellant may “avail himself of the
entire record and not merely the charging instrument,” there is no risk that he could be charged again
later for the same offense. See Santana v. State, 59 S.W.3d 187, 195 (Tex. Crim. App. 2001).
Appellant has not demonstrated surprise or prejudice with regard to any variance. See id.; Gollihar,
46 S.W.3d at 257. We overrule appellant’s third and fourth issues on appeal.
Was the Jury Charge Erroneous Under Ngo and Francis?
In his fifth issue, appellant argues that the jury was erroneously allowed to convict
him without requiring a unanimous verdict as to where she was touched.5
5
The State argues that appellant waived this issue when, asked whether there were any
objections to the jury charge, he answered, “None from the defense.” The State cites to Reyes v.
State, in which our sister court held that the defendant waived any charge error by “affirmatively
approv[ing] the charge as written.” 934 S.W.2d 819, 820 (Tex. App.—Houston [1st Dist.] 1996, pet.
ref’d) (statement that “defense has read both charges and is satisfied with them” waived any error).
The Reyes court distinguished between situations in which a defendant fails to request an instruction
or object to an omission and those in which a defendant “affirmatively approves the charge as
written, telling the trial judge that he sanctions the charge.” Id. We decline to follow Reyes in
holding that appellant waived any error by stating that he had no objection to the jury charge. See
Huizar v. State, 12 S.W.3d 479, 484 (Tex. Crim. App. 2000) (considering defendant’s issue related
to jury charge error despite failure to object or request proper charge); Almanza v. State, 686 S.W.2d
157, 171 (Tex. Crim. App. 1985) (op. on reh’g) (if defendant objected to charge error, conviction
will be reversed unless error is harmless; if no proper objection, conviction will be affirmed unless
“fundamental error” caused “egregious harm”); see also Ponce v. State, 89 S.W.3d 110, 117 (Tex.
App.—Corpus Christi 2002, no pet.) (“Based upon a reading of Almanza, and following the analysis
and holding of other sister courts, we find that an error in a jury charge cannot be waived by an
affirmative approval of the jury charge.” (footnote omitted)); Ward v. State, 72 S.W.3d 413, 417
(Tex. App.—Fort Worth 2002, no pet.) (“we reject the State’s argument . . . that Appellant has
forfeited his complaint of error in the jury charge” by stating he had “no problem” with charge);
Webber v. State, 29 S.W.3d 226, 232 (Tex. App.—Houston [14th Dist.] 2000, pet. ref’d) (“We are
unpersuaded by the state’s waiver by ‘affirmative approval’ argument for three reasons. First, it
cannot withstand a careful reading of Almanza. Second, the cases that have accepted this waiver
argument are not consistent with our reading of Almanza or, in the alternative, are distinguishable.
Third, we find the right at issue in this case either cannot be waived or must be expressly waived.”).
9
The Texas Constitution requires a unanimous verdict in felony criminal cases. Tex.
Const. art. V, § 13; Tex. Code Crim. Proc. Ann. art. 36.29(a) (West Supp. 2005). Allowing a jury
to choose from several separate acts, each of which is a violation of a specific statute, without
requiring the jury to agree on which act was committed violates the unanimity requirement. Ngo v.
State, 175 S.W.3d 738, 747-48 (Tex. Crim. App. 2005); Francis v. State, 36 S.W.3d 121, 124-25
(Tex. Crim. App. 2000). However, allowing a jury to choose between alternative theories of how
an offense was committed does not run afoul of the unanimous-verdict requirement.6 Martinez v.
State, 129 S.W.3d 101, 103 (Tex. Crim. App. 2004); Kitchens v. State, 823 S.W.2d 256, 258 (Tex.
Crim. App. 1991).
Count two of this indictment alleged that appellant, “on or about the 1st day of March,
A.D. 2002 . . . did then and there, with the intent to arouse or gratify the sexual desire of said
defendant, intentionally or knowingly engage in sexual contact with [D.M.] by touching the female
sexual organ and anus of” D.M. The jury charge instructed the jury to convict appellant on count
two if it found that “on or about 1st day of March, A.D. 2002 . . . [appellant] did then and there with
the intent to arouse or gratify the sexual desire of said defendant, intentionally or knowingly engage
in sexual contact with [D.M.] by touching the female sexual organ or anus of” D.M. Appellant
argues that the jury charge, by allowing the jury to convict him of indecency with D.M. if it believed
he touched her genitals or her anus, did not require agreement about where he touched her, and thus
6
If an indictment alleges differing means of committing an offense, a trial court does not err
by charging the jury in the disjunctive. Kitchens v. State, 823 S.W.2d 256, 258 (Tex. Crim. App.
1991); see Rosales v. State, 4 S.W.3d 228, 231 (Tex. Crim. App. 1999).
10
improperly allowed the jury to convict him without reaching a unanimous verdict as to the offense
committed. We disagree.
In Francis, the defendant was accused of indecency with a child, charged with
improperly touching the victim on four separate days; in two of the alleged incidents he was alleged
to have touched the victim’s breasts and in the other two he was alleged to have touched her genitals.
36 S.W.3d at 122. At trial, the State elected to seek one conviction, relying on one breast-touching
incident and one genital-touching incident, and the jury charge allowed a conviction on a finding that
the defendant touched the victim’s breasts or genitals, without requiring the jury to agree on which
incident they were voting to convict. Id. The court of criminal appeals held that the charge
improperly authorized the jury to convict the defendant of one count of indecency without reaching
agreement on which of the acts he committed, noting that “[t]here was never a single incident in
which the appellant touched both the breasts and the genitals of the victim.” Id. at 124-25. The
court held that the charge did not submit two alternate means of committing one offense, but instead
submitted two separate offenses in the disjunctive. Id. at 124 (“These incidents [on which the State
elected to proceed] constitute two separate offenses.”).
In Ngo, the defendant was charged with one count of credit card abuse through
allegations of “three statutorily different criminal acts”—stealing a credit card, receiving the stolen
credit card, or presenting the card for a purchase. 175 S.W.3d at 744. The court of criminal appeals
held that the three alleged acts were “all credit card abuse offenses, to be sure, but they are not the
same, specific credit card abuse criminal acts committed at the same time or with the same mens rea
and the same actus reus.” Id. at 745. The court noted that “[a] handy, though not definitive, rule of
11
thumb” to help determine whether a statute sets out different offenses versus listing possible manner
and means of committing an offense “is to look to the statutory verb defining the criminal act. That
verb—such as steal, receive, or present— . . . is generally the criminal act upon which all jurors must
unanimously agree.” Id. at 745-46 n.24. The court reiterated that a trial court must require a jury
to “reach a unanimous verdict on which single, specific criminal act the defendant committed.” Id.
at 748.
Here, appellant was charged with one count of indecency with D.M. occurring on one
day, the same day that V.M. was molested, and the State alleged and presented evidence of two
possible means by which appellant committed the offense. Because there was only one incident of
touching alleged, the analysis in Francis, which concerned four separate incidents of touching, does
not control our decision. See 36 S.W.3d at 124. Further, the statute under which appellant was
charged, indecency by contact, does not show the same kind of legislative intent described in Vick
v. State.7 See 991 S.W.2d 830, 833 (Tex. Crim. App. 1999). The conduct proscribed by the statute
is “engag[ing] in sexual contact with the child,” which is defined as touching a child’s anus, breast,
or genital area; where the child is touched is a manner and means element of the offense. See Tex.
7
Vick v. State concerned double-jeopardy issues. 991 S.W.2d 830, 831 (Tex. Crim. App.
1999). After Vick was acquitted of penetrating the victim’s sexual organ with his sexual organ, he
was again indicted for aggravated sexual assault for the same incident, alleged to have contacted the
victim’s sexual organ with his mouth and with his sexual organ, each of which is set out as an
offense under different subsections of the aggravated sexual assault statute. Id.; see Tex. Pen. Code
Ann. § 22.021 (West Supp. 2005). The court held that the structure of the statute demonstrated a
legislative “intent to separately and distinctly criminalize any act which constitutes the proscribed
conduct,” and that therefore double jeopardy did not protect the defendant from being separately
prosecuted for the other two alleged offenses. See Vick, 991 S.W.2d at 833.
12
Pen. Code Ann. § 21.11; see also Ex parte Chafin, No. 03-04-00210-CR, 2005 Tex. App. LEXIS
9678, at *5-6 (Tex. App.—Austin Nov. 17, 2005, no pet.) (“Like aggravated sexual assault,
indecency with a child is a conduct-oriented offense. At the relevant time, section 21.11
criminalized two distinct types of conduct requiring different acts to commit: (1) any touching of the
anus, breast, or any part of the genitals of a child; or (2) exposure of the defendant’s anus or genitals
knowing that a child is present. . . . The word ‘or’ was used by the legislature to distinguish and
separate the proscribed conducts. . . . We conclude that the legislature intended the two separately
described conducts to constitute separate statutory offenses.”). In other words, the statute provides
“differing methods of committing the offense” of indecency by contact, rather than several distinct
offenses, see Kitchens, 823 S.W.2d at 258, and the jury was required to reach a unanimous verdict
on whether appellant committed the criminal act of improperly touching D.M. See Francis, 36
S.W.3d at 128 (Johnson, J., concurring) (“The indictment against appellant contained one count of
indecency with a child, alleging two kinds of contact on the same date. The indictment was valid
on its face; if both types of contact occurred at the same time, they would comprise a single act.”
(emphasis added)); see also Ngo, 175 S.W.3d at 748 (requiring unanimity as to which “single,
specific criminal act” was committed). We therefore hold that the jury charge did not allow a non-
unanimous verdict as to what offense appellant committed. The jury was given two options to
determine the manner and means by which the single offense was committed on one single night,
and it reached a unanimous decision that appellant improperly touched D.M. We overrule
appellant’s fifth point of error.
13
Admission of Appellant’s Statement
In his sixth and final issue, appellant asserts that the trial court erred in admitting his
confession into evidence, arguing that the statutory warnings he was given were improper.
Before Nusbaum began his videotaped interview of appellant, he verbally told
appellant his statutory rights8 and then had appellant sign a written statement of those rights,
acknowledging that he both understood and waived his rights. The written waiver stated that
appellant had “the right to have a lawyer present to advise [him] prior to or during any questioning”
(emphasis added), but Nusbaum stated, “You have the right to have a lawyer present to advise you
prior to answering any questions.” (Emphasis added.) Nusbaum neglected to expand the verbal
warning to inform appellant that he had the right to an attorney’s advice during questioning. This
failing, appellant argues, rendered the admonition ineffective and requires reversal and the
suppression of the confession. We disagree.
Appellant filed a motion to suppress his statements, as well as any other tangible
evidence and any police testimony about appellant’s actions or statements while in custody. The
motion stated that his statements “were obtained in violation of [appellant’s] right under the Fourth,
Fifth, Sixth and Fourteenth Amendments to the United States Constitution, Article 1, §§ 9, 10, and
8
A defendant’s statement may only be used against him if he was informed of his right to
remain silent, the caution that anything he said could be used against him in court, the right to an
attorney and to have an attorney appointed, and the right to terminate the interview at any time. See
Tex. Code Crim. Proc. Ann. art. 38.22, § 2 (West 2005).
14
19 of the Constitution of the State of Texas, and Chapter 14 and Article 38.22 of the Texas Code of
Criminal Procedure,” but did not explain which rights were at issue or how they were violated.
The trial court held a pre-trial hearing on appellant’s motion to suppress. At that
hearing, Nusbaum testified about the appellant’s statement. Nusbaum testified that he read appellant
his statutory warnings and that appellant indicated that he understood his rights and signed the
written warning waiving his rights. At the hearing, appellant asked whether appellant was in police
custody or free to leave; Nusbaum testified that appellant was handcuffed and could not leave.
Nusbaum did not recall appellant saying that he could not read the written warning without his
glasses, and he testified that he had not altered the videotape of appellant’s statement in any way.
After a few more questions related mostly to the search of appellant’s house, appellant passed the
witness, and the trial court denied the motion to suppress. At no point during the hearing did
appellant point out that Nusbaum told him only that he was entitled to counsel before questioning,
nor did appellant’s motion raise this issue.
By his failure to make a clear objection at trial that comports with his argument on
appeal, appellant has waived any error in the admission of his confession. See Saldano v. State, 70
S.W.3d 873, 889 (Tex. Crim. App. 2002) (“We have consistently held that the failure to object in
a timely and specific manner during trial forfeits complaints about the admissibility of evidence.
This is true even though the error may concern a constitutional right of the defendant.” (footnote
omitted)); Ramirez v. State, 815 S.W.2d 636, 645 (Tex. Crim. App. 1991) (defendant was told, “‘I
have the right to remain silent’ instead of ‘you have the right,” but any error was waived by his
failure to object on that basis at trial). We overrule appellant’s final issue.
15
Conclusion
We have held that appellant’s confession was properly admitted, that the misspelling
of the victims’ name does not merit reversal, that the jury was properly charged, and that the
evidence is sufficient to support the jury’s verdict. Having overruled appellant’s issues on appeal,
we affirm the judgment of conviction.
__________________________________________
David Puryear, Justice
Before Chief Justice Law, Justices Patterson and Puryear
Affirmed
Filed: February 3, 2006
Publish
16
|
53 F.3d 1286
U.S.v.Escobar-Villanueva*
NO. 94-4269
United States Court of Appeals,Eleventh Circuit.
Apr 26, 1995
1
Appeal From: S.D.Fla., No. 93-00491-CR-DLG
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
|
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
MAXINE BLOCKER-BURNETTE, )
)
Plaintiff, )
)
v. ) Civil Action No. 09-1185 (PLF)
)
THE DISTRICT OF COLUMBIA, et al., )
)
Defendants. )
__________________________________________)
MEMORANDUM OPINION
This employment discrimination matter is before the Court on defendants’ motion
to dismiss for failure to state a claim or, in the alternative, for summary judgment. Pro se
plaintiff Maxine Blocker-Burnette was employed by the District of Columbia Department of
Health, Addiction Prevention and Recovery Administration at all times relevant to this lawsuit.
She was terminated from that job in 2007, and now alleges that the termination was the result of
discrimination on the basis of her age in violation of the Age Discrimination in Employment Act,
29 U.S.C. §§ 621 et seq., (“ADEA”) and on the basis of her family responsibilities in violation
of the District of Columbia Human Rights Act, D.C. Code §§ 2-1401.01 et seq., (“DCHRA”).
Upon review of the parties’ papers, it is clear to the Court that through the course
of briefing, the parties have resolved numerous of the issues raised in the defendants’ motion.
Specifically, plaintiff has agreed that the individually named defendants should be dismissed.
The District of Columbia has agreed with plaintiff that she adequately exhausted her ADEA
claim, and therefore withdrew its motion to dismiss that claim.1 It appears that the District has
also conceded its argument that plaintiff’s claim under the DCHRA is barred by the statute of
limitations. The only remaining issue for the Court therefore is whether plaintiff provided
adequate notice of her claim under DCHRA to the Mayor as required by Section 12-309 of
District of Columbia Code.
I. STANDARD OF REVIEW
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows dismissal of a
complaint if a plaintiff fails “to state a claim upon which relief can be granted.” FED . R. CIV . P.
12(b)(6).2 In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court noted
that “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the
claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of
what the . . . claim is and the grounds upon which it rests[.]’” Id. at 544 (quoting Conley v.
Gibson, 355 U.S. 41, 47 (1957)); see also Erickson v. Pardus, 551 U.S. 89, 93-94 (2007);
Aktieselskabet AF 21 v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir. 2008). Although “detailed
factual allegations” are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide
the “grounds” of “entitle[ment] to relief,” a plaintiff must furnish “more than labels and
1
Plaintiff has filed a motion to “maintain [her] complaint for age discrimination.”
In light of the defendants’ withdrawal of their motion to dismiss the ADEA claim, the Court will
deny plaintiff’s motion as moot.
2
A motion to dismiss pursuant to Rule 12(b)(6) rather than Rule 12(b)(1) of the
Federal Rules of Civil Procedure is appropriate because “Section 12-309 is not jurisdictional . . .
Unlike a jurisdictional bar, the Section 12-309 ground for dismissal of an action is simply a
‘penalty for noncompliance.’” Sanders v. District of Columbia, Civil Action No. 97-1238, 2002
U.S. Dist. LEXIS 6818 at *5 (Apr. 15, 2002) (quoting Brown v. United States, 742 F. 2d 1498,
1509 (D.C. Cir. 1984)).
2
conclusions” or “a formulaic recitation of the elements of a cause of action.” Bell Atlantic Corp.
v. Twombly, 550 U.S. at 555; see also Papasan v. Allain, 478 U.S. 265, 286 (1986). The Court
stated that there was no “probability requirement at the pleading stage,” Bell Atlantic Corp. v.
Twombly, 550 U.S. at 556, but “something beyond . . . mere possibility . . . must be alleged[.]”
Id. at 557 The facts alleged in the complaint “must be enough to raise a right to relief above the
speculative level,” id. at 555, because Rule 8(a)(2) requires a “showing,” rather than a “blanket
assertion,” of entitlement to relief, id. at 555 n.3. The complaint must be sufficient “to state a
claim for relief that is plausible on its face.” Id. at 570. The Court referred to this newly
clarified standard as “the plausibility standard.” Id. at 560 (abandoning the “no set of facts”
language from Conley v. Gibson).
II. DISCUSSION
The District of Columbia argues that plaintiff’s claim under the DCHRA should
be dismissed because plaintiff failed to provide notice of her claim to the District pursuant to
Section 12-309 of the District of Columbia Code. Section 12-309 provides:
An action may not be maintained against the District of Columbia
for unliquidated damages to person or property unless, within six
months after the injury or damage was sustained, the claimant, his
agent, or attorney has given notice in writing to the Mayor of the
District of Columbia of the approximate time, place, cause, and
circumstances of the injury or damage. A report in writing by the
Metropolitan Police Department, in regular course of duty, is a
sufficient notice under this section.
D.C. Code § 12-309. The notice requirement is a prerequisite to a suit against the District of
Columbia “because it represents a waiver of sovereign immunity.” Faison v. District of
Columbia, 664 F. Supp. 2d 59, 68 (D.D.C. 2009) (citing Johnson v. District of Columbia, 572 F.
3
Supp. 2d 94, 111 (D.D.C. 2008)). Compliance with the notice requirement is mandatory. See id.
“Courts should strictly construe Section 12-309's notice requirements.” Day v. District of
Columbia Dep't of Consumer & Regulatory Affairs, 191 F. Supp. 2d 154, 158 (D.D.C. 2002).
The District of Columbia Court of Appeals recently held, as have many judges of this Court, that
Section 12-309 applies to suits brought against the District of Columbia under the DCHRA. See
Owens v. District of Columbia, 993 A.2d 1085, 1087-88 (D.C. 2010) (collecting cases).
Plaintiff received her letter of termination on October 24, 2007. She sent a
complaint letter to the Department’s EEOC office on January 30, 2008. See Opp., Ex. 2 at 3
(January 30, 2008 letter from plaintiff to Bernadine Brown, EEOC Officer). She also submitted
a complaint to the District of Columbia Office of Human Rights (“OHR”) via the internet and
received both an online confirmation on February 25, 2007, see Opp., Ex. 5 at 2 (computer
screen shot showing that a complaint intake questionnaire was submitted), and a letter
confirming that the OHR received her complaint on March 4, 2008. See Opp., Ex. 5 at 3 (letter
from Alease Parsons to plaintiff acknowledging receipt of plaintiff’s complaint form and
scheduling an intake interview). It is undisputed, however, that plaintiff did not provide a written
notice directly to the Mayor.3
Plaintiff argues that her OHR complaint, filed in late February, constitutes
sufficient notice. Only two types of notice can satisfy the requirements of Section 12-309,
3
Although the District initially moved to dismiss the DCHRA claim based on the
statute of limitations, it appears to have abandoned the argument in its reply, presumably because
plaintiff filed exhibits establishing her participation in the administrative process. In any event,
the timely filing of a complaint with the OHR tolls the running of the statute of limitations while
the complaint is pending. See D.C. Code § 2-1403.16. Plaintiff received her right to sue letter
on March 31, 2009, see Opp., Ex. 7 (Notice of Right to Sue) and filed the lawsuit before the
Court on June 29, 2010. It appears, therefore, that her complaint was filed well within the one
year statute of limitations provided by D.C. Code § 2-1403.16.
4
however: (1) a written notice to the Mayor of the District of Columbia, or (2) a police report
prepared in the regular course of duty. See Brown v. District of Columbia, 251 F. Supp. 2d 152,
165 (D.D.C. 2003); Sanders v. District of Columbia, 2002 U.S. Dist. LEXIS 6818 at *2.
Because the notice requirement must be strictly construed, see Day v. D.C. Dep't of Consumer &
Regulatory Affairs, 191 F. Supp. 2d at 158, the Court cannot conclude that plaintiff’s filing with
the OHR substituted for written notice to the Mayor. Cf. Brown v. District of Columbia, 251 F.
Supp. 2d at 158 (police officer’s letter sent to the police chief, the District’s Attorney General,
and other government officials alleging intentional infliction of emotional distress and other torts
did not satisfy the requirements of Section 12-309.).
Plaintiff also argues that according to Mayor’s Order 2009-91, see Opp., Ex. 1 at
2 (Memorandum from D.C. Mayor Adrian M. Fenty discussing the designation of officers to
accept service of process on behalf of the Mayor), her DCHRA claim meets the mandatory notice
requirement because notice was given to OHR when she filed her complaint. Opp. at 5. The
plaintiff’s reliance on Mayor’s Order 2009-91 is incorrect. That Order deals with service of
process in cases where the Mayor or the District of Columbia has been sued. See Mayor’s Order
at 2. The Order does not address, either directly or indirectly, Section 12-309’s notice
requirement. In arguing that Mayor’s Order 2009-91 applies to this case, plaintiff has confused
Section 12-309’s mandatory notice requirements with the requirements for service of process on
the Mayor after a suit has been filed. Because the plaintiff did not comply with the statutory
requirements of Section 12-309, plaintiff’s claim for unliquidated damages is barred.
Plaintiff also argues, however, that even if the failure to give notice under Section
12-309 bars her from collecting unliquidated damages, it does not bar her claims for back pay
5
and injunctive relief. Plaintiff is correct on this point. Section 12-309 only requires notice for
damages that are “unliquidated.” D.C. Code § 12-309. Plaintiff’s claims for liquidated damages
may proceed regardless of whether notice was properly given. See Elzeneiny v. District of
Columbia, Civil Action No. 09-889, 2010 U.S. Dist. LEXIS 29726 at *8 (D.D.C. March 29,
2010); Chisholm v. District of Columbia, 533 F. Supp. 2d 175, 178-79 (D.D.C. 2008) (citing
Beeton v. District of Columbia, 779 A.2d 918) (D.C. 2001)).
The Court therefore must determine to what extent plaintiff is claiming damages
that may qualify as “liquidated.” As Judge Kollar-Kotelly recently explained in a very similar
case, under District of Columbia Law a debt is liquidated if “at the time it arose, it was an easily
ascertainable sum certain.” Elzeneiny v. District of Columbia, 2010 U.S. Dist. LEXIS 29726 at
*9 (quoting District of Columbia v. Campbell, 580 A.2d 1295, 1300 (D.C. 1990)). See also
Chisholm v. District of Columbia, 533 F. Supp. 2d at 179. Plaintiff seeks damages of “$500,000
with interest and costs; reinstatement to [her] job as supervisory Program Analyst without a
break in service with back pay and punitive damages, including an injunction restraining
Defendants and its agents from discriminating against [her] . . . .” Complaint at 4.
In general, back pay awards are easily ascertainable and therefore qualify as
liquidated damages. See Elzeneiny v. District of Columbia, 2010 U.S. Dist. LEXIS 29726 at *9
(citing Chisholm v. District of Columbia, 533 F. Supp. 2d 175, 179 (D.D.C. 2008); Beeton v.
District of Columbia, 779 A.2d 918, 925 (D.C. 2001)). Furthermore, in employment
discrimination cases, awards of back pay are considered to be equitable relief, which also is not
barred by Section 12-309. Elzeneiny v. District of Columbia, 2010 U.S. Dist. LEXIS 29726 at
*9-10 (citing Caudle v. District of Columbia, Civil Action No. 08-0205, 2008 WL 3523153 at *2
6
(D.D.C. Aug. 13, 2008)). Similarly, Section 12-309 does not bar plaintiff’s request for other
equitable relief, such as reinstatement to her job without a break in service and an injunction
restraining defendants and its agents from discriminating against her. See id. Finally, attorneys’
fees — to the extent plaintiff may seek them — are not generally considered damages at all under
District of Columbia law and thus are not encompassed by the phrase “unliquidated damages” in
Section 12-309. See id.
In her complaint, however, plaintiff also seeks, for unspecified reasons, “$500,000
with interest and costs . . . and punitive damages.” See Complaint at 4. Because these damages
were not easily ascertainable at the time they arose, they are considered unliquidated damages
and are barred by Section 12-309's notice requirement. See Elzeneiny v. District of Columbia,
2010 U.S. Dist. LEXIS 29726 at *10. The Court therefore will dismiss plaintiff’s DCHRA claim
insofar as it seeks any unliquidated damages, such as compensatory and punitive damages.
An appropriate Order to accompany this Memorandum Opinion will issue this
same day.
/s/________________________________
PAUL L. FRIEDMAN
United States District Judge
DATE: August 13, 2010
7
|
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted September 20, 2007*
Decided October 12, 2007
Before
Hon. ILANA DIAMOND ROVNER, Circuit Judge
Hon. DIANE P. WOOD, Circuit Judge
Hon. ANN CLAIRE WILLIAMS, Circuit Judge
No. 07-1057
MICHAEL V. WILKINS, SR., Appeal from the United States District
Petitioner-Appellant, Court for the Northern District of
Illinois, Eastern Division
v.
No. 01 C 7181
LISA MADIGAN, et al.,
Respondents-Appellees. Samuel Der-Yeghiayan,
Judge.
ORDER
Michael Wilkins challenges the requirement that his name remain on the
Illinois Sex Offender Registry. He contends that requiring him to remain registered as
a sex offender violates the Ex Post Facto clause of the Constitution. Wilkins also argues
that he was denied the effective assistance of counsel during the proceedings in the
district court. We dismiss the action for lack of jurisdiction.
*
After an examination of the briefs and the record, we have concluded that oral
argument is unnecessary. Thus the appeal is submitted on the briefs and the record.
See FED. R. APP. P. 34(a)(2).
No. 07-1057 Page 2
The present dispute has its origins in a sentence that Wilkins has now fully
served . In June 1991 Wilkins pleaded guilty to third-degree rape in Kentucky and was
sentenced to four months’ house arrest and two years’ probation. After he served his
sentence and moved to Illinois, Wilkins’s name was added to the Sex Offender
Registry. See 730 ILCS 150/7. His tenure on the registry would have expired in June
2001, but, by his own admission, Wilkins “was a few days late” in his “recent
registration”; the state accordingly extended his registration for an additional ten
years. See 730 ILCS 150/7 (“The Director of State Police, consistent with
administrative rules, shall extend for 10 years the registration period of any sex
offender, as defined in Section 2 of this Act, who fails to comply with the provisions of
this Article.”). In September 2001 Wilkins challenged the lengthened registration term
in what he labeled a petition for a writ of habeas corpus under 28 U.S.C. § 2241.
Wilkins also filed a motion for appointment of counsel. The district court granted that
motion in December 2001.
At that point, matters became confused in the district court. In June 2003, at a
time when Wilkins was not in prison, Wilkins’s appointed lawyer moved to withdraw
from the case. The district court granted that motion and stated that it would recruit
new counsel. In August 2003 the case was transferred to a different district judge. But
replacement counsel had not been appointed, and when the new judge held a status
hearing in May 2004, neither party appeared. The judge therefore dismissed the action
without prejudice for want of prosecution. See N.D. Ill. Loc. R. 41.1. In March 2005
Wilkins, who as of May 2004 was incarcerated on a separate charge, informed the court
in a written submission that he had been unaware of the dismissal. Evidently not
realizing that he was unrepresented at the time of the dismissal, Wilkins faulted his
attorney for failing to appear at the status hearing. He did not ask the judge to
reinstate the case, however, until November 2006, when he moved to reinstate his
lawsuit on the ground of his lawyer’s failings. The district court construed Wilkins’s
motion as one seeking relief from judgment under FED. R. CIV. P. 60(b)(6), but the court
noted that Wilkins provided no explanation for the eighteen-month delay in requesting
relief and no justification for reopening the judgment. The district court therefore
denied the motion. Wilkins timely filed his notice of appeal.
We first assess federal jurisdiction. Wilkins’s claim is that the state violated the
Ex Post Facto clause by extending his period for registering on the sex offender
registry. But the statute that Wilkins invokes, 28 U.S.C. § 2241, requires that a
petitioner be in custody under the sentence giving rise to his claimed injury at the time
he filed suit, in order for federal jurisdiction to exist. See Samirah v. O'Connell, 335
F.3d 545, 549 (7th Cir. 2003). Wilkins was not “in custody” under the rape charge
(which gives rise to the challenged registration requirement) when he filed this suit.
The district court therefore did not have jurisdiction and should promptly have
dismissed the action on that ground. See id.
No. 07-1057 Page 3
We recognize, as does the state, that Wilkins’s claim may be cognizable under
42 U.S.C. § 1983. But we will not on appeal convert his case into a civil rights action
because, as we have said before, such a conversion may lead to unfavorable
consequences for Wilkins. See generally Bunn v. Conley, 309 F.3d 1002, 1004-1007 (7th
Cir. 2002). If we decided that his complaint fails to state a claim upon which relief may
be granted, Wilkins would receive a strike under the Prison Litigation Reform Act, see
Lewis v. Sullivan, 279 F.3d 526, 527 (7th Cir. 2002). In addition, we would need to
consider issues that neither party has had reason to address, such as possible
exhaustion defenses, whether Wilkins named the correct defendant, and whether he
is prepared to pay the proper filing fee for a civil rights action (presently $350), as
opposed to the fee for a petition for a writ of habeas corpus($5).
We note, in closing, that there was an unfortunate slip-up in the district court
that may have contributed to the length of these proceedings. Once the first district
judge assured Wilkins that the court would recruit replacement counsel, the second
judge either should have followed through on that assurance or notified Wilkins that
it would not recruit another lawyer before dismissing the case for want of prosecution.
That did not happen, and as a result, Wilkins had no idea that he was unrepresented
for a substantial period of time.
The judgment of the district court is MODIFIED to be a dismissal for want of
jurisdiction.
|
532 S.E.2d 131 (2000)
243 Ga. App. 598
QUINN
v.
CITY OF CAVE SPRING.
No. A99A2326.
Court of Appeals of Georgia.
March 22, 2000.
Reconsideration Denied April 14, 2000.
Certiorari Denied October 20, 2000.
*132 James A. Satcher, Jr., Rome, for appellant.
Magruder & Sumner, J. Clinton Sumner, Jr., Rome, John A. Owens, Dahlonega, for appellee.
MILLER, Judge.
Lonnie Quinn sued the City of Cave Spring for personal injury and damage to his automobile caused by driving over an open manhole. The City moved for summary judgment, and Quinn appeals the court's grant of that motion. We affirm.
1. Quinn argues that the court improperly granted summary judgment to the City solely because he failed to comply with Uniform Superior Court Rule 6.5, which requires that the party opposing the motion for summary judgment respond by submitting to the court a concise statement of each material fact as to which he contends there exists a genuine issue to be tried.
The court's order states:
Defendant's Motion for Summary Judgment and accompanying Brief set forth with specificity the reasons why Defendant claims there are no genuine issues of material fact. Plaintiff's Response to the Motion for Summary Judgment does not comply with U.S.C.R. 6.5. That is, the Plaintiff does not list the material facts to which it is contended there are genuine *133 issues for trial. Absent such compliance, the court concludes there are no such issues.... Defendant's Motion for Summary Judgment is hereby GRANTED.
Even if Quinn failed to comply with USCR Rule 6.5, summary judgment cannot be granted by default. The failure of the nonmoving party to file pleadings as required by the Uniform Superior Court Rules does not entitle the moving party to the grant of summary judgment.[1]
Although it appears that the court may have granted the motion because Quinn did not comply with USCR 6.5, nevertheless on appeal from a grant of summary judgment we conduct a de novo review,[2] because such grant must be affirmed if it is right for any reason.[3]
2. Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law.[4] To prevail, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.[5]
A defendant may do this by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of plaintiff's case. If there is no evidence sufficient to create a genuine issue as to any essential element of plaintiff's claim, that claim tumbles like a house of cards. All of the other disputes of fact are rendered immaterial.[6]
Viewed in the light most favorable to Quinn, the evidence shows that as he was driving through the City, he noticed a large amount of water on the right side of the road. He then drove slightly to the left and hit what he later discovered was an uncovered manhole with water spewing out of it. The force of hitting the manhole blew his tires, sending one back tire down into the manhole, and caused his car to spin around, finally hitting a tree. Quinn suffered bruises to his face and torso. When City crews arrived to investigate, they discovered the manhole cover downhill about ten feet away and determined that the cause of the open manhole was a blockage in the sewer system forcing effluent up through the manhole.
In his complaint and brief in response to the City's motion for summary judgment, Quinn claimed that the City negligently maintained its sewer system. He also claimed that the City was negligent per se for violating the rules and regulations of the "Department of Public Health and the Environmental Protection Division."
3. Neither in his complaint nor in his response to the City's motion does Quinn specify which Code section, rule, or regulation he contends the City violated. Nor does he explain how such violations are negligence per se.
A defendant who will not bear the burden of proof at trial need not affirmatively disprove the nonmoving party's case; instead, the burden on the moving party may be discharged by pointing out ... that there is an absence of evidence to support the nonmoving party's case.[7]
In its brief in support of its motion for summary judgment and its USCR Rule 6.5 statement, the City has pointed out the lack of evidence that it violated rules and regulations of the "Department of Public Health and the Environmental Protection Division." *134 Quinn's response to the City's interrogatory requesting him to identify "all statutes, rules, regulations, ordinances, and code sections," is not part of the record on appeal. But the City, in its summary judgment brief, explains that Quinn's response was the "Environmental Protection Act and Regulations concerning run off water flow." The City further explains that it could only assume that Quinn was referring to the Clean Water Act. In pointing to the failure of Quinn to identify the Code section or regulation, the City has established a lack of evidence to support this claim and discharged its burden.
Quinn was then required to point to specific evidence giving rise to a triable issue, which he failed to do.[8] In response to the City's USCR Rule 6.5 statement, Quinn simply denied the averments without further explanation. Because Quinn again failed to specify the particular rule or regulation he contends the City violated, he has rested on his pleadings. Therefore, there is no specific issue presented for trial, and the City is entitled to summary judgment on this portion of Quinn's claim.
4. Quinn alleged the City was negligent for failing to place a warning device at the location of the open manhole, even though it was aware of the hazard that caused the manhole cover to become dislodged. The City claims (a) that it could not have anticipated that excess rain water would result in the sewer system becoming clogged and causing the manhole cover to be lifted from its retaining ring, and (b) that it had no notice that there was effluent escaping from the manhole. A public works employee testified that the first notice of the manhole cover lifting from its retaining ring was after Quinn's accident and that the occurrence was unanticipated. Under OCGA § 32-4-93(a),[9]
[a] municipality is relieved of any and all liability resulting from or occasioned by defects in the public roads of its municipal street system when it has not been negligent in constructing or maintaining the same or when it has no actual notice thereof or when such defect has not existed for a sufficient length of time for notice thereof to be inferred.[10]
If the defect existed only a short time so the municipality could not reasonably have had knowledge, then actual notice must be shown; if the defect existed for a sufficient length of time that by reasonable diligence in the performance of its duty, the defect ought to have been known by the City, then notice will be presumed.[11] "If a city has notice of a dangerous defect ..., it is its duty to exercise ordinary care in remedying the same or placing a safeguard about it."[12] "A further requirement in order for the city to be chargeable is that it had a reasonable opportunity to remedy the defect."[13]
Prior to a determination whether the City failed to provide warning of the hazard, the initial inquiry is whether the City had notice of the defect. The City employee testified that the City's wastewater plant had been under a consent order for exceeding its discharge limit and that the accident could have been avoided if one of the sewage lines had been renovated when others were. He further testified that although in the past he had seen other manhole covers float up and rest "in a cocked position," this was the first time he had seen a manhole cover lift off of its retaining rings.
But the fact that the City was aware of violations of its discharge limits does not put the City on notice of the defective condition created by this manhole cover completely dislodging from its base. First, there is no evidence that there were repairs on or problems with the system at or near the site of *135 Quinn's accident.[14] Second, although Quinn urges that the employee's testimony that he has seen water cause a manhole cover to move into a cocked position is evidence of notice, it is not evidence (a) that the current sewage problems had caused any effluent to overflow out of a manhole cover so as to cause one to float, or (b) that the City was on notice of the potential of this particular manhole cover or any manhole cover becoming completely dislodged. Third, nothing in the record shows a past occurrence of a manhole cover becoming dislodged on any of the City's streets or that a consent order involved any such occurrence. Because there is a lack of evidence that the City had actual or constructive knowledge of the defect created by the overflow resulting in the absence of the manhole cover, the issue of negligence becomes a matter of law.[15] The City's motion pierced the pleadings, putting the burden on Quinn to come forward with specific facts and present his case in full to show that genuine issues remained for jury resolution.[16] Quinn's negligence claim must fail as he did not produce evidence to controvert the City's evidence that it had no notice of the defect. Accordingly, we affirm the trial court's grant of summary judgment to the City.
Judgment affirmed.
POPE, P.J., and SMITH, J., concur.
NOTES
[1] See Pearson v. Small World Day Care Center, 234 Ga.App. 843, 844(2)(a), 508 S.E.2d 200 (1998); Robertson v. Wheeler, 208 Ga.App. 68, 69(1), 429 S.E.2d 714 (1993).
[2] Moore v. Food Assoc., 210 Ga.App. 780, 781, 437 S.E.2d 832 (1993).
[3] Stephens v. State Farm &c. Ins. Co., 236 Ga. App. 758, 759(1), 513 S.E.2d 508 (1999); Sharfuddin v. Drug Emporium, 230 Ga.App. 679, 681(2), 498 S.E.2d 748 (1998).
[4] Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991).
[5] Id.
[6] (Citation and emphasis omitted.) Id.
[7] Id.
[8] See id.
[9] "This Code section is an exception to the general rule that a city enjoys sovereign immunity from liability for negligent acts done in the exercise of a governmental function." City of Vidalia v. Brown, 237 Ga.App. 831, 832-833(1), 516 S.E.2d 851 (1999).
[10] See City of Atlanta v. Hightower, 177 Ga.App. 140, 338 S.E.2d 683 (1985).
[11] Andrews v. City of Macon, 191 Ga.App. 745, 747(2), 382 S.E.2d 739 (1989).
[12] (Citations and punctuation omitted.) Hightower, supra, 177 Ga.App. at 141, 338 S.E.2d 683.
[13] (Citations omitted.) Id. at 141, 338 S.E.2d 683.
[14] See Andrews, supra, 191 Ga.App. at 747(2), 382 S.E.2d 739.
[15] See id.
[16] See Alghita v. Universal Investment &c. Co., 167 Ga.App. 562, 566-567, 307 S.E.2d 99 (1983).
|
25 U.S. 582 (____)
12 Wheat. 582
M`CONNELL
against
THE TRUSTEES OF THE TOWN OF LEXINGTON.
Supreme Court of United States.
This cause was argued by Mr. Rowan for the plaintiff, and by Mr. Talbot for the defendant.
Mr. Chief Justice MARSHALL delivered the opinion of the Court.
This suit was brought in the Court of the United States for the Seventh Circuit and District of Kentucky, against the trustees of the town of Lexington, and others, to obtain a conveyance of in and out lots, No. 43, in that town, or of such other lots in lieu of them as might still remain to be conveyed, by the trustees. The whole of out lot No. 43, and a part of the in lot, had been conveyed to other persons who had been in possession for such a length of time as to bar the plaintiff's action. The bill was, therefore, dismissed by the plaintiff as against those defendants, and continued against the trustees.
The commonwealth of Virginia had, in 1773, by an act commonly called "the land law," reserved 640 acres of land for the benefit of those who had settled in a village or station, that it might be afterwards laid out into lots for a town, and divided among such settlers. The inhabitants of Lexington purchased 70 acres adjoining the reserve of 640 acres, and after laying the whole off in lots and streets, petitioned the assembly to establish a town. The legislature, in May, 1782, passed an act, vesting the whole 710 acres in trustees, who were empowered to make conveyances to those persons who had already settled on the said lots, as also to the purchasers of lots theretofore sold; and to lay off *583 such other parts of the said land as was not then laid off and settled into lots and streets, and to sell, or otherwise dispose of the same, for the benefit of the inhabitants.
James M`Connell was one of the settlers in Lexington, and was killed by the Indians in 1782. His brother and heir at law, Alexander M`Connell, filed this bill in 1815, and founds his claim on proof that he had in his lifetime erected a tannery on in lot No. 43, on which was a large spring; and on the following order of the board of trustees:
"At a meeting of the board of trustees for the town of Lexington, September 30th, 1782, No. 43 in and out lot granted to James M`Connell, to be appraised, and the valuation thereof redound to the heirs of said M`Connell, deceased."
The trustees, in their answer, insist that in lot No. 43 never was granted to James M`Connell, but a part of it has always been considered as reserved, on account of a spring upon it, for the use of the inhabitants. They are informed by the old settlers that the privilege of establishing a tannery on that lot was in the year 1781 granted to James M`Connell, who did establish one, and that the order of appraisement was intended to cause a valuation of the improvements and of the leather in the tannery, not of the lot itself; and that so much of the entry as applies to the lot itself is a mistake of the clerk. They say that other lots, not these, were granted to M`Connell. They also insist on the length of time which has elapsed, and on the statute of limitations.
Several certificates from the clerk, and extracts from the record books of the trustees, are filed as exhibits in the cause. From one of these certificates it appears, that, on the 20th of December, 1781, at the first arrangement of in and out lots of the town of Lexington, among the settlers, in lot No. 18, and out lot No. 37, were granted to James M`Connell as his donation lots. The out lot appears to have been transferred by John Clarke, whose connexion with M`Connell is not stated, to Robert Parker, to whose assignee a conveyance was made by the trustees in August, 1785.
An assignment by Alexander M`Connell, as heir at law of James, of his title to an out lot in the town of Lexington, made in May, 1795, is produced: but this assignment neither *584 mentions the number of the lot, nor the name of the assignee.
Another certificate from the clerk states, that in lot No. 18 was granted on the 26th of March, 1781, to William Stule, and afterward, on the 20th of December, 1781, to Benjamin Hayden. It was afterwards, on the 1st of July, 1783, awarded to James M`Connell, and afterwards, on the 8th of March, 1785, was forfeited. The cause of forfeiture is not mentioned. The presumption is, that it must have been on account of the non-performance of some condition on which the allotment was made.
The entries of the orders made by the trustees seem to be in great confusion. This may be well accounted for by the then situation of that country. Some time in the year 1784, or 1785, Robert Parker, then clerk of the board of trustees, was ordered to transcribe their old books. Many of their entries were made on small scraps of paper, and on backs of old letters. The book then made out is said to be lost. There is, however, a book of records.
The imperfect and confused state of the books has made it necessary to resort to the testimony of witnesses to supply facts which the books do not disclose.
It is very well ascertained, that the large spring, below which M`Connell's tan vats were sunk, was enclosed within the stockade, and was used by the inhabitants of the fort generally. It is also in proof that the settlers were each entitled to an in and out lot, and that the trustees frequently allowed those who were dissatisfied with the lots which they drew, to exchange them for others not previously granted.
William Stule, who was one of the original trustees, deposes, that the lot on which the tan vats were sunk in spring, 1782, was called M`Connell's lot, but he does not recollect any contract between M`Connell and the trustees, or any disposition made by them of the lot, until a part of it was given to Bradford, on which to erect a printing office.
Robert Patterson was also one of the original trustees, and was friend and relation of M`Connell. He deposes that M`Connell was a tanner; the trustees being desirous to attract tradesmen to the station, permitted M`Connell to erect a tan yard on the lot in contest about the fall, 1731. That the deponant was authorized by the trustees about the year *585 1783 or 1784, to clear out and wall up the public spring, for which he was paid by them. That it was called and used as the public spring from the first settlement of the town. He believes M`Connell was permitted to use part of the lot as a tannery for the people of the town, because it was more convenient, and under cover of the fort. While thus used, it was called M`Connell's tan yard. He does not know that the trustees intended to make any other grant of the lot than to suffer its use by M`Connell. They fixed a market house on the lot in 1790 or 1791, and then claimed it as their own property. They granted part of it in the year 1787 to John Bradford, on condition of his establishing a printing office on it, reserving the public spring and a considerable front on Main and Water streets, on which they erected buildings which were rented to Bradford. They reserved a number of lots for public use.
John Torrence, William Martin, Samuel Martin, Benjamin Hayden, Joseph Mitchell, Josiah Collins, and Hugh Thompson, were among the early settlers of Lexington, and were examined, some of them by the appellant, and some by the trustees. They all concur in the declarations, that the spring was public, for the use of the people of the fort generally; that it was called the public spring; some that it was called the public spring lot; that M`Connell sunk vats, and constructed a tan yard on it, after which it was called M`Connell's tan yard, and one witness is inclined to think M`Connell's lot. They all concur, however, in denying having ever heard that the lot was given to M`Connell, or to any other person. Some say, though they never heard him claim the lot, they have heard him claim the tan yard. Joseph Mitchell swears that M`Connell claimed a lot in a different square. Hugh Thomson says, that the records of the trustees, which are produced to him at the time his deposition is taken; plainly show that in lot No. 18, and out lot No. 38, were granted to James M`Connell. John Parker, and Alexander Parker, came to Lexington, the one in 1783, and the other in 1784. They were each of them members of the board of trustees, and depose to the universal understanding that the spring lot was reserved for public use, and had never been granted to any person, until a part of it was granted to *586 Bradford for a printing office. Alexander Parker says, that on looking into the record books, while a trustee, he saw, with surprise, the entry under which Alexander M`Connell claims; and on making inquiries from Col. Robert Patterson, also a trustee, was informed that the trustees had prevailed on James M`Connell to establish a tannery under cover of the fort, to tan buffaloe hides, and had, after his death, appointed appraisers to value his property. That the entry appears in its present form, is the mistake of the clerk who made it. He adds, that the records show, that in lot No. 18, and out lot No. 38, were granted to James M`Connell.
The entry under which the appellant claims lot No. 43, does not purport to grant him that lot, but directs a valuation in terms which import a former grant. No trace of that former grant is, however, found, and the testimony is very strong to prove it was never made. The reasonableness of reserving a public spring for public use; the concurrent opinion of all the settlers that it was so reserved; the universal admission of all, that it was never understood that the spring lot was drawn by any person; the early appropriation of it to public purposes; the fact that James M`Connell actually claimed a different lot, added to the length of time which has been permitted to elapse without any assertion of title to this lot, are, we think, decisive against the appellant. There was no error in dismissing the plaintiff's bill, and the decree is affirmed, with costs.
|
620 F.3d 856 (2010)
UNITED STATES of America, Plaintiff-Appellee,
v.
Robert BEALE, Defendant-Appellant.
United States of America, Plaintiff-Appellee,
v.
John Howard Pelton, Defendant-Appellant.
United States of America, Plaintiff-Appellee,
v.
Frederick Ogan Bond, Defendant-Appellant.
Nos. 09-1552, 09-1556, 09-1558.
United States Court of Appeals, Eighth Circuit.
Submitted: December 14, 2009.
Filed: September 2, 2010.
*858 Dean S. Grau, argued, Minneapolis, MN, for appellant Beale.
Frederick J. Goetz, argued, Minneapolis, MN, for appellant Pelton.
Kurt B. Glaser, argued, Minneapolis, MN, for appellant Bond.
William Anders Folk, AUSA, argued, Minneapolis, MN, for appellee.
Before BYE, BEAM, and COLLOTON, Circuit Judges.
BYE, Circuit Judge.
Robert Beale, John Pelton, and Frederick Bond were convicted of conspiracy to prevent by intimidation a judicial officer from discharging her official duties, in violation of 18 U.S.C. § 372, and obstruction of justice, in violation of 18 U.S.C. § 1503(a). On appeal, Beale, Pelton, and Bond argue the district court[1] erred in denying their motions for judgment of acquittal on both counts, claiming *859 the evidence was insufficient to sustain the convictions. They further argue the convictions cannot stand because their actions amounted to a peaceful protest protected under the First Amendment. In addition, Beale argues the district court erred in 1) denying his motion for new trial based on the denial of a requested jury instruction, 2) failing to obtain a knowing waiver of his right to counsel, and 3) imposing an unreasonable consecutive sentence. Bond contends the district court erred in denying his motion for new trial based on the government's failure to call Judge Ann Montgomery as a witness, in violation of his Sixth Amendment right to confront his accuser. We affirm.
I
In August 2006, Beale was scheduled to appear at trial before U.S. District Court Judge Ann D. Montgomery in the District of Minnesota. Beale did not appear; he was arrested in November 2007, and returned to Minnesota. A new trial date, with Judge Montgomery presiding, was set for April 21, 2008.
Pending his trial, Beale was held at the Sherburne County Jail. Inmates at Sherburne County jail have access to phones and are able to make calls to individuals outside of the facility. With the exception of calls to attorneys, all phone calls made by inmates are recorded, though not necessarily monitored. In February 2008, the U.S. Marshals Service requested recordings of phone calls made by Beale from the jail. From the end of February 2008 through April 2008, Sherburne County Investigator Mike Sieg monitored all of Beale's phone calls.
Throughout March 2008 and April 2008, Judge Montgomery and the U.S. District Court in Minnesota received a variety of documents relating to Beale and his pending trial, including documents from "Our one supreme court common-Law court for the de-jure Ramsey: the county: Minnesota: the land a superior court for the People, original jurisdiction under Almighty Yahweh exclusive superior jurisdiction in and for confederation-government United States of America" ("common-law court"). Documents from the common-law court included, among others, an Order to Dismiss, the Great Writ of Habeas Corpus, Contempt of Court, and a document entitled "Warrant for Arrest, Of the Bond for Ann D. Montgomery."
In addition to documents from the common-law court, on March 17, 2008, Judge Montgomery received notice of a lien filed with the Minnesota Secretary of State, and recorded in Brown County, Minnesota. Included with the lien documents was a cover page titled, "Due Presentment Under Notary Seal." The cover page stated "[d]ue presentment is hereby made of: Notice of lien against the bond of Judge Ann Montgomery." Robert Bonine Beale was listed as the party to whom the acknowledgment of the lien should be sent. The lien referenced Beale's criminal case scheduled for trial in front of Judge Montgomery on April 21, 2008. The documents attached to the lien included a confession judgment, signed by Beale.
Additionally, on March 27, 2008, a purported U.S. District Court criminal subpoena and a purported State of Minnesota subpoena, ordering Judge Montgomery to appear on April 3, 2008, at a location in Little Canada, Minnesota, were received by the U.S. District Courthouse in Minnesota. Each subpoena listed Beale's name and his federal criminal case number on the face of the subpoena.
On March 29, 2008, after Supervisory U.S. Marshals Deputy Steve Swenson finished reviewing documents sent to Judge Montgomery, the U.S. Marshals Service opened a protective investigation. The *860 Federal Bureau of investigation was also notified of the Marshals' investigation. Among other steps, the Marshals sought to determine whether Beale was in contact with anyone outside of jail who could assist him. Upon reviewing the jail's phone records, the Marshals determined Beale was in contact with several people, including his "common-law wife" Mun Suk Kim.
A joint investigation between the Marshals and FBI determined Beale recruited Angel Gessner and Norman Pool in February 2008, to work for him. Gessner agreed to do clerical work, including processing paperwork, and Pool agreed to similar work but on a more limited basis. Beale put Gessner in contact with others who could assist her, including Bond, Pelton, and Pool, all of whom communicated with one another by phone and email.
On February 22, 2008, John Howard, a/k/a Pelton, signed a subpoena for Beale to appear on March 3, 2008, at a meeting of the Ramsey county common-law court. The subpoena was served along with a series of other documents issued by the common-law court and signed by Pelton, Bond, and Pool. The other documents were sent to, among others, Judge Montgomery and included a "Great Writ of Habeas Corpus," commanding "hereby ... all named Respondents, jointly and severally, under this binding Writ of Habeas Corpus to produce and disclose the body corpus of Robert-Bonine: for the family Beale[.]" The "Great Writ of Habeas Corpus" was signed by John Howard, Pelton's alias.
Beale, of course, was not released and did not appear at the March 3, 2008, meeting of the common-law court. Instead, Bond appeared for him and represented to other members of the common-law court he had authority to sign documents for Beale. Bond further indicated Beale "[w]as fully expecting to be here. He had a feeling he wouldn't be, but he was planning on being here[.]" Pelton appeared at the meeting as the Chief Justice of the common law court and Pool attended as the Clerk of Court. During the course of the meeting, Pool explained the United States District Court is "prosecuting Robert Bonine Beale falsely for private corporation." He went on to explain Beale was being illegally held in the Sherburne County jail and announced: "So he's been kidnapped."
On March 4, 2008, Gessner filed a lien against the "bond" of Judge Montgomery. The lien was filed with the Minnesota Secretary of State on March 4, 2008, in Brown County, Minnesota, on March 10, 2008. After filing the lien, Gessner mailed a cover letter, the lien, and supporting documents to Judge Montgomery's chambers. Gessner testified she filed the lien at Beale's direction because he wanted Judge Montgomery to see the lien and the supporting documents and to know of the lien against her bond. Gessner stated she understood Beale desired to have Gessner file the lien because it would make Judge Montgomery unable to perform her duties as a judge and unable to sit on the case pending against Beale. Gessner explained: "Mr. Beale had stated that he wanted to intimidate the judge. And that was the purpose of sending out the liens a copy of the liens, make her think about it."
On March 24, 2008, Pelton signed additional documents which were sent to Judge Montgomery and the U.S. District Court. Pool explained the documents were forwarded to him by Bond, and were intended "to get the Judge to no longer beto work in her official position." When asked why the documents were sent to Judge Montgomery, Pool explained: "To intimidate her, to change her mind on Robert Beale's behalf."
On April 10, 2008, Bond brought a subpoena to the Hennepin County Sheriff's *861 Office. The subpoena sought Judge Montgomery's attendance at a location in Little Canada, Minnesota. It was addressed to Ann D. Montgomery and listed her home address as the location for service. Bond told Deputy Sheriff Brad Ericksen he wanted the subpoena served on Judge Montgomery. The document listed "ROBERT B BEALE, ENS LEGIS," as the defendant, and contained Beale's criminal case number. It was also signed by Pelton, among others. Because the Hennepin County Sheriff's office had been alerted that individuals may try to have civil process served on Judge Montgomery, the subpoena was not served.
On April 17, 2008, an uncharged co-conspirator brought an arrest warrant into the Hennepin County Sheriff's Office. The warrant was titled "Warrant for Arrest Failure to Appear." The warrant listed Judge Montgomery's full name and her home address as the location for service, and was signed by Pelton and Bond. Accompanying the arrest warrant, among other things, was a copy of the subpoena, previously provided to Sergeant Ericksen of the Hennepin County Sheriff's Office. The uncharged coconspirator asked Deputy Sheriff Daniel Antisdel questions about how long it would take the Sheriff's Office to arrest Judge Montgomery.
Throughout the course of the conspiracy, both prior to the March 3, 2008, meeting of the common-law court and until the defendants were arrested on April 19, 2008, the charged and uncharged co-conspirators remained in contact with one another through emails. For example, on March 15, 2008, Gessner wrote to Pool explaining she was working on "the 2nd Contempt Order." Additionally, she asked Pool for "a copy of Bob's signature[.]" On March 16, 2008, Pool and Bond responded to Gessner in separate emails offering assistance. On March 17, 2008, Gessner sent Pool an email with common-law court documents attached, seeking his assistance to update the documents. She told Pool "Fred (identified through Gessner's testimony as Bond) would like for you to bring the updated stuff with you to the meeting." Gessner explained she relayed this information to Pool at Bond's direction.
On March 23, 2008, Bond and Gessner discussed via email a subpoena to be directed to Judge Montgomery. In the email, Bond asked Gessner to talk to Beale, and "[a]x (sic) him about the subpoenas if Ann is the only one that gets it." On April 2, 2008, Bond sent Gessner an email with a file entitled "Criminal Complaint.doc" attached. Also attached were documents charging Judge Montgomery with a variety of violations of federal law. Later on April 2, 2008, in preparation for a meeting of the common-law court scheduled for April 3, 2008, Bond sent an email entitled "tomorrows showdown" (sic) to Pelton, with Gessner carbon-copied on the email. In the email, Bond discussed individuals attending the meeting, and the criminal complaint against Judge Montgomery.
On April 3, 2008, Bond sent Gessner an email with an attachment entitled "Warrant for Arrest Ann Home Address.doc." Attached to the email was an unsigned warrant for the arrest of Judge Montgomery, listing her home address on the document. This draft document appeared to be an unfinished version of the arrest warrant ultimately served on the Hennepin County Sheriff's Office on April 17, 2008. On April 8, 2008, Gessner sent an email to Bond titled, "I went over it with him and this is final." Attached were copies of multiple documents, including one entitled "Warrant for Arrest Failure to Appear" and listed Judge Ann Montgomery as the subject of the arrest warrant with her home address provided. The email was sent from Gessner to Bond because he was *862 going to present the arrest warrant for Judge Montgomery. Bond and Beale both told Gessner Bond was going to present the warrant for arrest to Judge Montgomery. Bond and Gessner discussed serving the subpoena and arrest warrant on Judge Montgomery but Bond told her he did not feel comfortable serving those documents. Eventually, Mark Fedor delivered the arrest warrant for Judge Montgomery to the Hennepin County Sheriff's Office. Fedor's name is listed on multiple common-law court documents as a notary and as a justice.
On April 9, 2008, Gessner responded to an email sent by Bond titled "please send me the latest Warrant for Arrest that you sent me last night." Gessner's response contained a document entitled "Warrant for Arrest Failure to Appear."
During the course of the conspiracy, Beale and various co-conspirators coordinated their activities through a series of phone calls. In a phone call on April 3, 2008, Beale discussed with Kim his plans for April 21, 2008. Beale told Kim: "Honey, if, if my plans work out on April 21st... it will be a tremendous blessing, tremendous blessing." Beale further stated: "[God] wanted me to destroy the Judge. He wanted to. He wanted `cause that Judge is evil and wanted me to get rid of her." Later the same day, Beale called Pelton and discussed the meeting scheduled for later that day. While discussing their plans for the meeting and their issues with the government, Pelton told Beale: "What we have to do is have teeth to bite `em with." Later in the conversation, after continuing to discuss the illegitimacy of the government and courts, Beale told Pelton: "We just wanna arrest `em for going outside their jurisdiction and kidnapping people." Pelton agreed, and then responded, "it's gonna take some. It's gonna take some doing to do that because you're, you're fighting the system."
Later on April 3, 2008, Beale called Kim again. During the call, Beale further explained the purpose for the meeting scheduled that evening. Beale told Kim "the Judge" was subpoenaed to attend the meeting, "[b]ut if she doesn't show up then they're gonna issue a warrant for her arrest." Later, Beale stated: "God has got me here. He wants me to take the Judge out. That's what he wants me to do."
On the evening of April 3, 2008, Beale called Pelton who informed him Judge Montgomery did not show up at the meeting. Beale and Pelton then discussed how to serve the arrest warrant on Judge Montgomery. Pelton told Beale he would meet with "Fred" the next morning, and the pair discussed who would draw up the warrant. Finally, Pelton and Beale discussed an upcoming meeting of the common-law court on April 16, and Beale's trial scheduled for April 21, 2008. Pelton assured Beale "there's gonna be a lot of us there," and "I told Fred, I said, we should have at least, you know, 30 or 40 people in the court that day." Beale responded: "That should be wonderful and everybody should have a, a, an arrest warrant in their hand so that, ah, `cause, you know, if I issue an order for arrest. And if they don't, ah, comply with it then I can say look, you know, we can make a citizen's arrest here and everybody can raise their hand, raise their paper in their hands." After a short back and forth with Pelton, Beale further stated: "And, and I'm gonna hold her in contempt. And issue a warrant for her bond. And then I'm gonna tell ... the Bailiff to kick her out of the room. And if he doesn't do it then I'm gonna say look it if you don't obey. If you don't, if you don't obey my orders then we're gonna. You know we're all here gonna arrest you."
Shortly after the phone call between Beale and Pelton, Beale called Gessner to *863 discuss the common-law court meeting and Judge Montgomery's failure to appear. Beale told Gessner to find Judge Montgomery's home address and explained various internet-based services used to locate an individual's home address. Gessner found Judge Montgomery's home address and provided it both to Bond and Beale. When Gessner provided Beale with Judge Montgomery's home address, Beale told her: "Well that's gonna be a big help `cause now we can serve her at home instead of in the office. She has too much protection around her." Beale then called Pelton and gave him Judge Montgomery's home address, stating: "So now we can send the Sheriff to her house and we can also send service to her house in the future which would be a lot easier."
During a phone call on April 16, 2008, Gessner and Beale discussed a recent common-law meeting and plans for the future. Gessner informed Beale that Bond told her Judge Montgomery did not show up before the common law court grand jury. Gessner explained "[Bond] said he's gonna take that warrant ... um ... to the Sheriff today though." Later, Beale and Bond discussed the arrest warrant and the grand jury meeting the night before. Beale told Bond, "First of all ... the arrest warrant's much more important ... than the Grand Jury. What I'd like you to do is ... call the sheriff and ask him if he served it. And then go down there, and give him the warrant. At least it's gotta be somethin' ... somethin' that, ah ... re ... well, the return of service on that is to bring the body." Bond asked for clarification and Beale responded: "[T]o bring the body, I said!" After further discussions concerning service of the arrest warrant, Beale stated: "But it's important that she sees [the warrant]. That's what I want her to do is see it. I want her to be intimidated. I hope she saw ... the subpoena. Now I want her to see the warrant." Towards the end of the phone call, after Beale thanks Bond for his efforts, Bond tells Beale, "I think there's a lotta people pullin' for ya, but I'm ... probably ... heaviest, I guess."
On April 19, 2008, Pelton, Bond, Gessner and Pool were arrested pursuant to arrest warrants and a complaint in federal court alleging violations of 18 U.S.C. § 372. On April 24, 2008, Pelton's vehicle was searched pursuant to a federal search warrant. Officers recovered a variety of documents tied to the conspiracy.
Beale, Pelton, and Bond were indicted and ultimately convicted as charged following three separate jury trials of conspiracy to prevent an official by force, intimidation or threat from discharging her duties, in violation of 18 U.S.C. § 372, and obstruction of the due administration of justice, in violation of 18 U.S.C. § 1503(a). On December 12, 2007, Beale waived his rights to counsel and elected to proceed pro se pursuant to Faretta v. California, 422 U.S. 806, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975). At a pretrial hearing, the district court found that Beale knowingly, voluntarily, unequivocally, and intelligently waived his right to counsel.[2] During trial, all three *864 defendants made motions for judgment of acquittal; all were denied. During trial, Beale proposed a jury instruction explaining the concept of freedom of religious belief.[3] The district court declined to issue the instruction. Relevant to this appeal, Beale was sentenced to 48 months' imprisonment.
Beale, Pelton, and Bond timely appealed.
II
Beale, Pelton, and Bond argue the evidence presented was legally insufficient to convict them of the crimes charged.
"We review the sufficiency of the evidence de novo, viewing evidence in the light most favorable to the government, resolving conflicts in the government's favor, and accepting all reasonable inferences that support the verdict." United States v. Van, 543 F.3d 963, 964 (8th Cir. 2008).
A
The conspiracy charge requires proof that each defendant "conspire[d] to prevent by force, intimidation or threat... [to] impede [any officer of the United States] in the discharge of [her] official duties." 18 U.S.C. § 372. Thus, in order to sustain a conviction, the government must submit sufficient evidence to prove that (1) a conspiracy existed, (2) the appellants voluntarily entered into the conspiracy, and (3) the members of the conspiracy conspired to prevent by force, intimidation or threat, an officer of the United States from discharging her duties.
The government's proof of the existence of a conspiracy which was joined by Beale, Pelton, and Bond is overwhelming. Without repeating all the evidence at length here, each appellant sent or received multiple emails or phone calls detailing plans to arrest Judge Montgomery as well as other court officers. Further, the evidence is sufficient to show Beale, Pelton, and Bond intended, by intimidation or threat, to prevent Judge Montgomery from presiding over Beale's trial. In the case of Beale, there was direct testimony that he intended to intimidate Judge Montgomery. With respect to Pelton, he *865 forwarded documents to Pool, documents which Pool later explained were created "[t]o intimidate [Judge Montgomery], to change her mind on Robert Beale's behalf." Bond signed the arrest warrant for Judge Montgomery, and also delivered a summons for Judge Montgomery to the Hennepin County Sheriff's Office. Pelton and Beale planned to gather thirty to forty people to make the arrest. We conclude the evidence was sufficient to convict Beale, Pelton, and Bond of conspiracy to prevent by force, intimidation or threat, an officer of the United States from discharging her duties.
B
In order to be convicted of obstruction of justice, the government was required to prove beyond a reasonable doubt that each appellant did
corruptly, or by threats or force, or by any threatening letter or communication, endeavor[] to influence, intimidate, or impede any ... officer in or of any court of the United States, ... or corruptly or by threats or force, or by any threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede the due administration of justice.
18 U.S.C. § 1503(a). In order to convict for obstruction of justice, the government must show that each defendant intended to "interfer[e] with the due administration of justice." United States v. Russell, 234 F.3d 404, 407 (8th Cir.2000) (quoting United States v. Aguilar, 515 U.S. 593, 599, 115 S.Ct. 2357, 132 L.Ed.2d 520 (1995)). A conviction under 1503(a) requires proof of a sufficient nexus between each defendant's actions and an intent to impede judicial proceedings. Russell, 234 F.3d at 407 (8th Cir.2000) (citing Aguilar 515 U.S. at 599, 115 S.Ct. 2357). "According to the `nexus' analysis, `the act must have a relationship in time, causation, or logic with the judicial proceedings.'" United States v. Joiner, 418 F.3d 863, 868 (8th Cir.2005).
The evidence to support Beale, Bond, and Pelton's convictions for obstructing justice overlaps significantly with the evidence supporting each appellant's conviction on count 1. Each coconspirator was involved in the creation, filing or distribution of the arrest warrant provided to law enforcement and the distribution of arrest warrants to members of the common law court. The phone calls and emails between the coconspirators and Gessner's testimony make clear that the creation and refinement of the arrest warrant ultimately served on the Hennepin County Sheriff's office was a joint effort, designed to stop the trial against Beale and remove Judge Montgomery from Beale's trial. Additionally, the arrest warrant (and the subpoena that accompanied the arrest warrant) was signed by both Bond and Pelton, who planned to gather as many as forty people to arrest Judge Montgomery. This evidence is sufficient for a reasonable jury to convict Beale, Bond, and Pelton of obstruction of justice.
III
Beale, Pelton, and Bond next argue their convictions unlawfully abridge their freedom of speech protected by the First Amendment. Our review of the First Amendment issue is de novo. Planned Parenthood v. Dempsey, 167 F.3d 458, 461 (8th Cir.1999).
The First Amendment does not protect a true threat, "a statement that a reasonable recipient would have interpreted as a serious expression of an intent to harm or cause injury to another." Doe v. Pulaski County Special Sch. Dist., 306 F.3d 616, 624 (8th Cir.2002) (en banc).
At Beale, Pelton, and Bond's request, the district court instructed the jury as follows:
*866 [F]ree expression is not an unlimited right. Violence or imminent threats of violence are not protected by the Constitution. Expression becomes unlawful if it presents a clear and present danger to the government or people within the government. It is your responsibility as jurors to make a distinction between constitutionally protected speech and criminal threats. If you find that the defendant was engaged in protected free expression, then the government has the burden of proving beyond a reasonable doubt that the defendant engaged in behavior which presented a clear and present danger to the government or people within the government.
After a review of the record, we conclude there is sufficient evidence of a serious expression on the part of Beale, Pelton, and Bond of an intent to harm or cause injury to another. In a phone call, Beale stated: "[God] wanted me to destroy the Judge. He wanted to. He wanted `cause that Judge is evil and wanted me to get rid of her." Further, all three appellants, as previously discussed, conspired to falsely arrestin other words, kidnapJudge Montgomery. Such a crime, if committed, causes harm or injury to the victim. See 18 U.S.C. §§ 1114, 1201(a) (authorizing punishment of up to life in prison for kidnaping "any officer or employee of the United States ... while such officer or employee is engaged in ... the performance of official duties"). Therefore, we conclude the First Amendment does not bar Beale, Pelton, or Bond's convictions because the conduct underlying the convictions was an unprotected true threat.
IV
Next, Beale argues the district court erred by denying his motion for new trial based on the denial of a requested jury instruction. The rejection of a proposed instruction is reviewed for abuse of discretion. United States v. Meads, 479 F.3d 598, 601 (8th Cir.2007) (citing United States v. Gladney, 474 F.3d 1027, 1032 (8th Cir.2007)).
A defendant is entitled to a theory of defense instruction if it is timely requested, it is supported by the evidence, and correctly states the law. Id. (citing United States v. Claxton, 276 F.3d 420, 423 (8th Cir.2002)). A defendant is not, however, entitled to a particularly worded instruction. Id. "`The district court has broad discretion in formulating the jury instructions.'" Id. (quoting United States v. Johnson, 278 F.3d 749, 751 (8th Cir. 2002)).
We find no abuse of discretion here. During Beale's case, the jury was never instructed to pass judgment on any of Beale's religious beliefs. The district court correctly advised the jury of the elements of the offenses in Counts 1 and 2, and correctly advised the jury of the burden of proof, as well as Beale's theory of his defense. The jury was also advised more than once about the protections afforded by the First Amendment. In sum, Beale's religious beliefs were never placed at issue at trial; the district court therefore did not abuse its discretion in declining to issue the instruction.
V
Beale contends the district court erred when it determined Beale knowingly and intelligently waived his right to counsel. We review de novo the district court's decision to allow the defendant to waive his right to counsel. United States v. Mahasin, 442 F.3d 687, 691 (8th Cir.2006).
We conclude Beale's waiver was knowing and voluntary. Beale was extensively advised of his right to counsel and then knowingly and voluntarily waived that right on the record in open court. At the *867 pretrial hearing, counsel advised the district court that Beale had already been fully advised of his rights, understood his rights and wished to waive them. Under these circumstances, the district court did not err when it concluded Beale's waiver was knowing and voluntary.
VI
In his last point, Beale argues the district court procedurally erred by not adequately explaining its reasons for its sentence, in violation of 18 U.S.C. § 3553(a).
After determining the appropriate guideline range in a case, a district court must consider the factors listed in 18 U.S.C. § 3553(a). United States v. Roberson, 517 F.3d 990, 994 (8th Cir.2008) (citation omitted). Further, at sentencing, the court must "state in open court the reasons for its imposition of the particular sentence." 18 U.S.C. § 3553(c). This does not require the district court to "issue a full opinion in every case, but `it should set forth enough to satisfy the appellate court that [it] has considered the parties' arguments and has a reasoned basis for exercising [its] own legal decision making authority.'" Roberson, 517 F.3d at 994 (quoting Rita v. United States, 551 U.S. 338, 339, 127 S.Ct. 2456, 168 L.Ed.2d 203 (2007)) (alteration in original).
We have reviewed the sentencing transcript and find Beale's argument to be without merit. Beale did not object to the calculation of the relevant sentencing range, and the district court considered all of Beale's arguments. We therefore conclude the district court did not procedurally err by failing to consider the relevant § 3553(a) factors at sentencing.
VII
Finally, Bond argues that his Sixth Amendment rights were violated when the government did not call Judge Montgomery as a witness at trial.
The Sixth Amendment provides in relevant part that "[i]n all criminal prosecutions, the accused shall enjoy the right ... to be confronted with the witnesses against him." U.S. Const. amend. VI. Thus, "[a] witnesses's testimony against a defendant is inadmissible unless the witness appears at trial or, if the witness is unavailable, the defendant had a prior opportunity for cross-examination." Melendez-Diaz v. Massachusetts, ___ U.S. ___, 129 S.Ct. 2527, 2531, 174 L.Ed.2d 314 (2009) (internal citations omitted).
The Sixth Amendment's right to confront witness does not include a mandate requiring the government to call particular witnesses. For example, we have held:
Absent unusual circumstances such as knowingly concealing evidence favorable to a defendant, the Government has a wide discretion with respect to the witnesses to be called to prove its case. The government is not ordinarily compelled to call all witnesses competent to testify including special agents or informers.
United States v. Mosby, 422 F.2d 72, 74 (8th Cir.1970) (citations omitted).
The government's failure to call Judge Montgomery as a witness for the prosecution did not implicate Bond's confrontation right.
VIII
Affirmed.
NOTES
[1] The Honorable Rodney S. Webb, now deceased, United States District Judge for the District of North Dakota.
[2] During the hearing, counsel for Beale stated as follows:
Your honor, Mr. Beale is aware from my past representation of my advice that it's a bad idea to represent one's self. In addition to that, he has given a [Faretta] waiver in this district previously on the record and has been advised, I believe, in some detail, that it's not a good idea to represent one's self. That even lawyers, when they're charged, hire lawyers. I believe that the Judge may have likened it to attempting to do surgery on one's self. And at the same time, Mr. Beale understands that he has both a Sixth Amendment right to be represented here, and that the Court will appoint counsel for him. But he also understand[s] that under that same Sixth Amendment right under [Faretta] v. California, he has the right of self-representation.
After the district court inquired if Beale's waiver of counsel was knowing and voluntary Beale responded "Your honor, I waive all rights, benefits, and privileges of the United States."
[3] The proposed instruction was as follows:
You are further instructed that the Constitution of the United States guarantees freedom of religion and religious expression. A defendant's religious beliefs, thoughts, and manner of worship alone cannot be held against a defendant. Men are allowed to believe that which they cannot prove.
A defendant's religious beliefs, thoughts, and manner of worship alone are not justification for an overt criminal act. But, if the religious views espoused by the defendants in some of the documents and discussion in evidence in this case might seem incredible, if not preposterous, to most people those may not be held against any defendant during your deliberations. The First Amendment does not select any one group or any one type of religion for preferred treatment and it stands squarely against allowing any possibility that a prosecution for alleged criminal activity might degenerate into religious persecution.
Religious liberty includes, as it must, the right to communicate religious experiences to others, and you must not attempt the task of judging the legitimacy of varied religious beliefs or experiences. Such beliefs could never be verified to the minds of those whose field of consciousness does not include the same religious insight. I therefore instruct you that the law withholds from your consideration any question of the truth of any religious doctrine mentioned in this case or any question about whether any defendant sincerely believed the religious claims he may have made in connection with this case.
|
United States Court of Appeals
for the Federal Circuit
______________________
ENERGY RECOVERY, INC.,
Plaintiff-Appellee,
v.
LEIF J. HAUGE,
Defendant-Appellant,
AND
ENERGY RECOVERY INTERNATIONAL, INC.,
Defendant.
______________________
2013-1515
______________________
Appeal from the United States District Court for the
Eastern District of Virginia in No. 00-CV-0431, Judge
Raymond Alvin Jackson.
______________________
Decided: March 20, 2014
______________________
STEPHEN E. NOONA, Kaufman & Canoles, P.C., of
Norfolk, Virginia, argued for plaintiff-appellee.
RICHARD A. STERBA, Fish & Richardson P.C., of
Washington, DC, argued for defendant-appellant. With
him on the brief was AHMED J. DAVIS.
ENERGY RECOVERY, INC. v. HAUGE 2
______________________
Before RADER, Chief Judge, REYNA, and WALLACH, Circuit
Judges.
WALLACH, Circuit Judge.
Leif J. Hauge appeals the district court’s decision
finding him in contempt of that court’s March 19, 2001,
Order (the “2001 Order”), which adopted Mr. Hauge and
Energy Recovery, Inc.’s (“ERI”) March 16, 2001,
Settlement Agreement (the “Agreement”). For the
reasons set forth below, this court reverses the contempt
finding and vacates the injunction.
BACKGROUND
The dispute between Mr. Hauge and his former
employer, ERI, began more than thirteen years ago over
ownership of intellectual property rights related to
“pressure exchangers,” a type of energy recovery device
used in reverse osmosis. On March 16, 2001, the parties
entered into the Agreement resolving the litigation.
Three days later, the district court adopted the
Agreement and issued the 2001 Order, stating that ERI
was to be the sole owner of three U.S. patents and one
pending U.S. patent application: U.S. Patent Nos.
4,887,942, 5,338,158, and 5,988,993, and U.S. Patent
Application No. 09/508,694, which later issued as U.S.
Patent No. 6,659,731. 1
The Agreement and subsequent Order obligated Mr.
Hauge to transfer ownership not only of the patents, but
1 The Agreement required Mr. Hauge to “cooperate
fully in executing any and all documents necessary to
prosecute, assign, record, perfect, and/or maintain the
Patents and/or Patent Applications in Energy Recovery’s
name or for Energy Recovery’s benefit in the United
States and throughout the world.” J.A. 17.
ENERGY RECOVERY, INC. v. HAUGE 3
also “all other intellectual property and other rights
relating to pressure exchanger technology” pre-dating the
Agreement and 2001 Order. J.A. 10, 16. The Agreement
states: “[t]his assignment and transfer of rights is not
intended to extend to inventions by Hauge . . . made after
the date of this Agreement.” J.A. 16. The Agreement also
contains a non-compete clause, prohibiting Mr. Hauge
from making or selling energy recovery devices for use in
reverse osmosis salt water desalination for two years from
the date of the Agreement. J.A. 18.
After the expiration of the non-compete clause, on
August 10, 2004, Mr. Hauge filed a provisional patent
application, titled “Pressure Exchanger,” and filed a
utility application one year later. U.S. Patent No.
7,306,437 (the “’437 patent”) issued on December 11,
2007. Its abstract describes “[a] pressure exchanger for
transferring pressure energy from a high-pressure fluid
stream to low-pressure fluid stream.” ’437 patent, at
[57]. 2
In 2009, Mr. Hauge arranged a meeting with ERI on
behalf of his new company, Isobaric Strategies, Inc.
(“Isobarix”). In subsequent correspondence, Mr. Hauge
wrote “the main topic under consideration was the
possibility of uniting all pressure exchanger technology
and [intellectual property] rights under the umbrella of
[ERI] and the potential benefits to those concerned.” J.A.
85. ERI ultimately declined to “get involved in [Mr.
Hauge’s] project” and wished him “success with current
and future endeavors.” J.A. 84. After ERI’s rejection of
Mr. Hauge’s proposal, Mr. Hauge, through Isobarix,
began selling a pressure exchanger based on the ’437
patent, called “XPR.” In 2010, Mr. Hauge created a
consulting agreement for two ERI employees, Tristan
2 The district court refers to this patent as both
“patent ’734” and “patent ’437.”
ENERGY RECOVERY, INC. v. HAUGE 4
Nillo and James Coyle, regarding services they could
provide to Isobarix; they ultimately contracted with
Isobarix.
On September 11, 2012, ERI filed a Motion for Order
to Show Cause, alleging Mr. Hauge was using ERI’s
proprietary technology in the manufacture of the XPR
pressure exchanger, in violation of the district court’s
2001 Order. ERI submitted the declaration of an expert
who testified that Mr. “Hauge and Isobarix are using
‘pressure exchanger technology’ from pre-March 19,
2001[,] in both the design and manufacture of the Isobarix
pressure exchanger,” which the expert opined is “virtually
identical to the ERI pressure exchanger” in terms of
operation. J.A. 237. At the hearing, Mr. Hauge’s counsel
argued that ERI had failed to show that the allegedly
proprietary technology was protectable as a trade secret,
and argued that Mr. Hauge was not prohibited from using
the technology because the Agreement related only to
transfer of ownership of the patents and proprietary
technology pre-dating the Agreement.
After holding a Show Cause Hearing on June 24,
2013, the court entered an order (the “Contempt Order”)
finding that allowing Mr. Hauge “to . . . develop new
products using the very technology he assigned to ERI
solely because those new inventions post-date the
Agreement would render the Settlement Agreement and
its assignment of ownership rights useless.” J.A. 4. The
court entered judgment that Mr. Hauge was in violation
of the 2001 Order, found him in contempt, and further
enjoined him and Isobarix “from manufacturing and
selling pressure exchangers and replacement parts for
ERI’s pressure exchangers.” J.A. 9. The court also
awarded ERI attorneys’ fees and ordered it to file a
request for damages and reasonable attorneys’ fees within
thirty days.
ENERGY RECOVERY, INC. v. HAUGE 5
In September 2013, Mr. Hauge filed a Motion for
Order to Stay the Permanent Injunction, which this court
granted, stating “[t]he district court’s June 25, 2013[,]
[O]rder, including the provision enjoining Hauge and
Isobarix from manufacturing and selling pressure
exchangers and replacement parts for [ERI]’s pressure
exchangers, is stayed pending appeal.” Ct. Order at 2,
Energy Recovery Inc. v. Hauge, No. 2013-1515 (Fed. Cir.
Sept. 13, 2013), (ECF No. 19) (order granting motion to
stay).
DISCUSSION
I. Jurisdiction
This court has jurisdiction over interlocutory orders
modifying an injunction. See 28 U.S.C. § 1292(c)(1)
(2012).
Even though no final disposition has been made
regarding the amount of contempt damages and
attorneys’ fees, the district court’s Contempt Order is
appealable under § 1292(c)(1) because it modified the
scope of the 2001 Order. In relevant part, the 2001 Order
declared ERI the sole owner of all “intellectual property
and other rights relating to pressure exchanger
technology predating this Order.” J.A. 5. In contrast, the
Contempt Order for the first time prohibits Mr. Hauge
from engaging in certain acts, and therefore modifies the
2001 Order. Specifically, the Contempt Order enjoins Mr.
Hauge “from manufacturing and selling pressure
exchangers and replacement parts for ERI’s pressure
exchangers.” J.A. 9. Accordingly, because it modifies the
substance of the 2001 Order, the Contempt Order is
appealable.
II. Standard of Review
“Regional circuit law governs contempt proceedings
that do not raise issues unique to patent law.” Schaefer
Fan Co., Inc. v. J & D Mfg., 265 F.3d 1282, 1289 (Fed. Cir.
ENERGY RECOVERY, INC. v. HAUGE 6
2001). In the Fourth Circuit, a district court’s grant or
denial of a civil contempt motion is reviewed for an abuse
of discretion. Ashcraft v. Conoco, Inc., 218 F.3d 288, 301
(4th Cir. 2000). “When a district court’s decision is based
on an interpretation of its own order, our review is even
more deferential because district courts are in the best
position to interpret their own orders.” JTH Tax, Inc. v.
H & R Block E. Tax Servs. Inc., 359 F.3d 699, 705 (4th
Cir. 2004) (citing Vaughns v. Bd. of Educ., 758 F.2d 983,
989 (4th Cir. 1985)). However, “[c]ontempt is a weighty
penalty and should not be casually imposed.” In re
Wilson, 199 F.3d 1329, 1999 WL 976491, at *2 (4th Cir.
1999); see also TiVo Inc. v. EchoStar Corp., 646 F.3d 869,
881–82 (Fed. Cir. 2011) (en banc) (Contempt “is a severe
remedy, and should not be resorted to where there is a
fair ground of doubt as to the wrongfulness of the
defendant’s conduct.”) (internal quotation marks and
citation omitted).
An abuse of discretion may be found when the district
court’s decision is “‘guided by erroneous legal principles’
or ‘rests upon a clearly erroneous factual finding.’” Brown
v. Nucor Corp., 576 F.3d 149, 161 (4th Cir. 2009) (quoting
Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261 (4th
Cir. 1999)).
III. The Contempt Finding
To establish civil contempt, clear and convincing
evidence must support each of the following elements:
(1) the existence of a valid decree of which the
alleged contemnor had actual or constructive
knowledge; (2) that the decree was in the
movant’s favor; (3) that the alleged contemnor by
its conduct violated the terms of the decree, and
had knowledge (at least constructive knowledge)
of such violations; and (4) that the movant
suffered harm as a result.
ENERGY RECOVERY, INC. v. HAUGE 7
Ashcraft, 218 F.3d at 301 (citation omitted). At issue in
this case is element (3): whether Mr. Hauge by his
conduct violated any terms of the district court’s 2001
Order.
Mr. Hauge argues he did not violate any provision of
the 2001 Order. He contends that in reaching the
Agreement the parties were both aware of the possibility
that he would eventually compete with ERI by selling
devices in the pressure exchanger industry. As support,
he claims (1) the Agreement only required transfer of his
ownership rights to the intellectual property pre-dating
the Agreement; (2) the non-compete clause had a limited
two-year duration; and (3) the Agreement explicitly
provided that the transfer of ownership rights did not
extend to inventions after the date of the Agreement. ERI
responds that Mr. Hauge is free to develop and
commercialize new technology relating to the energy
recovery field; he is not, however, able “to appropriate the
very pressure exchanger technology” that he explicitly
transferred to ERI in 2001. Appellee’s Br. 21.
ERI further emphasizes the “tremendous effort and
money” spent developing the allegedly proprietary
technology pre-dating the Agreement. Appellee’s Br. 8.
To ERI, Mr. Hauge is necessarily employing the same
proprietary technology he agreed to transfer. It relies on
evidence that Mr. Hauge hired two of ERI’s employees
who set up Isobarix’s facility, similar to that of ERI’s pre-
2001 facility, and that the Isobarix pressure exchanger is
made “out of essentially the same ceramic material” as
ERI’s, the manipulation of which requires special
techniques not known outside of ERI. Appellee’s Br. 18.
None of Mr. Hauge’s challenged conduct violates any
provision of the 2001 Order. Paragraph One of the
Agreement begins with the heading “ABSOLUTE
TRANSFER OF ALL RIGHTS IN PATENTS, PATENT
APPLICATIONS AND ALL RELATED INTELLECTUAL
ENERGY RECOVERY, INC. v. HAUGE 8
PROPERTY, TO ENERGY RECOVERY.” J.A. 16. The
remainder of the paragraph details that Mr. Hauge
“irrevocably and absolutely assign[s]” to ERI “all right,
title and interest along with any and all patent rights,”
J.A. 16, which Mr. Hauge had in “(i) the patents and
patent applications . . . ; (ii) any and all patent rights . . . ,
intellectual property rights, property rights . . . ; and (iv)
all other intellectual property and other rights relating to
pressure exchanger technology predating this Order.”
J.A. 10. Only clause (iv) is at issue. See J.A. 57 (ERI’s
counsel explained to the district court that “[t]he [issue]
that is in question . . . for this hearing, it’s not patents, it’s
not the applications for patents, but it is No. 4 in the
[O]rder, ‘[a]ll other intellectual property and other rights
relating to pressure exchanger technology predating this
[O]rder.’”).
The Agreement only required Mr. Hauge to transfer
ownership of the pre-Agreement pressure exchanger
intellectual property; “cooperate fully in executing any
and all documents necessary” to do so; refrain from
competing for two years; and announce in a press release
that ERI was the “sole source for Pressure Exchangers
built pursuant to such patents, patent applications, and
technology.” J.A. 17, 32. Nothing in the 2001 Order
expressly precludes Mr. Hauge from using any
manufacturing process.
Mr. Hauge’s manufacture of the XPR pressure
exchanger is not inconsistent with the 2001 Order’s
requirement that Mr. Hauge transfer all “intellectual
property and other rights relating to pressure exchanger
technology pre-dating this Agreement.” J.A. 16 (emphasis
added). Civil contempt is an appropriate sanction only if
the district court can point to an order of the court which
“sets forth in specific detail an unequivocal command
which a party has violated.” In re Gen. Motors Corp., 61
F.3d 256, 258 (4th Cir. 1995) (internal quotation marks
ENERGY RECOVERY, INC. v. HAUGE 9
and citation omitted). ERI cannot point to such a
command. Mr. Hauge is not claiming ownership of ERI’s
intellectual property. Nor did Mr. Hauge start selling
pressure exchanger products before the expiration of the
Agreement’s non-compete clause. Finally, if in fact Mr.
Hauge is using ERI’s manufacturing processes, he may be
in violation of the patent laws or state trade secret laws,
but he is not in violation of any “unequivocal command” in
the 2001 Order. See id. (civil contempt requires violation
of “an unequivocal command” in the underlying court
order).
To the extent the “sole source” language in the
Agreement puts an affirmative duty on Mr. Hauge not to
create pressure exchangers pursuant to ERI’s intellectual
property, an infringement analysis would be necessary to
determine whether such a violation occurred. As
recognized by the district court and conceded by both
parties, the instant contempt proceeding does not
implicate patent infringement. ERI’s counsel stated
“[n]ow, I don’t want to be quoted later as saying that [the
’437 patent] doesn’t violate our patents . . . . [T]here’s an
argument . . . that practicing the new patent violates an
earlier patent, but that’s for another day.” J.A. 59. Mr.
Hauge’s counsel agreed, responding, “Mr. Noona is correct
that if there is a patent infringement lawsuit, we can deal
with those issues on another day.” J.A. 64. The district
court explicitly declined to address infringement,
determining that a formal finding of infringement was
unnecessary because it was Mr. Hauge’s use of ERI’s
allegedly proprietary manufacturing processes that was
problematic, not the patented pressure exchanger
technology. The district court stated: “[A]lthough the
[c]ourt expresses no judgment as to the separate issue of
whether Defendant is actually infringing ERI’s patents,
[Mr. Hauge] does little to dispel any doubt that he is in
fact using ERI’s technology.” J.A. 7. Because ERI
ENERGY RECOVERY, INC. v. HAUGE 10
explicitly stated during the contempt hearing that it was
not alleging contempt on the basis that Mr. Hauge’s new
pressure exchanger, as described in the ’437 patent,
infringes any of ERI’s patents, see J.A. at 59, the district
court was not required to address patent infringement. 3
The district court was also concerned by Mr. Hauge’s
conduct in hiring two (then current) employees of ERI.
Mr. Hauge admitted hiring the ERI employees, explaining
they were “skilled trade persons . . . and of course no one
would hire at this cost and expect no benefit from past
work experience.” J.A. 7. Mr. Hauge’s professed
motivation for the hires was that when he was the
president of ERI, “we basically went through the complete
setup of commercial production. And what we were about
to do was pretty much all over again doing what I did in
[19]98.” J.A. 7. This conduct does not violate any
3 Additionally, because the 2001 Order contains no
injunction against infringement, Mr. Hauge is incorrect to
argue that the district court should have applied the
“colorable differences” test. See, e.g., Panduit Corp. v.
HellermannTyton Corp., 451 F.3d 819, 827 (Fed. Cir.
2006). Under this test, “[t]he primary question on
contempt should be whether the newly accused product is
so different from the product previously found to infringe
that it raises a fair ground of doubt as to the wrongfulness
of the defendant’s conduct.” TiVo, 646 F.3d at 882
(internal quotation marks and citation omitted). Because
Mr. Hauge was never found to have infringed any of ERI’s
patents in the underlying action, there is no adjudicated
infringing product to compare to Mr. Hauge’s new
pressure exchanger to determine whether their
differences are more than “colorable.” Accordingly, even if
ERI had argued during the contempt proceedings that Mr.
Hauge’s conduct constituted patent infringement, the
district court was not required to address the “colorable
differences” test to find contempt.
ENERGY RECOVERY, INC. v. HAUGE 11
provision of the 2001 Order, however. While it may
constitute trade secret misappropriation, that would not
justify a finding of contempt in this case. Notably, ERI’s
trade secret claim in California state court based on the
same conduct resulted in a unanimous jury verdict in
favor of Mr. Hauge. Appellant’s Notice of Supplemental
Authority at 1, Energy Recovery Inc. v. Hauge, No. 2013-
1515 (ECF No. 33) (Dec. 19, 2013) (quoting Attach. 1:
Special Verdict Format 8 (“26. Did Leif Hauge
misappropriate any trade secrets of Energy Recovery,
Inc.? NO.”)).
The district court found that Mr. Hauge had “violated
the letter and spirit of the [] Agreement.” J.A. 8.
However, the Supreme Court has explained that a
consent decree must be discerned within its four corners:
Consent decrees are entered into by parties to a
case after careful negotiation has produced
agreement on their precise terms. The parties
waive their right to litigate the issues involved in
the case and thus save themselves the time,
expense, and inevitable risk of litigation.
Naturally, the agreement reached normally
embodies a compromise; in exchange for the
saving of cost and elimination of risk, the parties
each give up something they might have won had
they proceeded with the litigation. Thus the
decree itself cannot be said to have a purpose;
rather the parties have purposes, generally
opposed to each other, and the resultant decree
embodies as much of those opposing purposes as
the respective parties have the bargaining power
and skill to achieve. For these reasons, the scope
of a consent decree must be discerned within its
four corners, and not by reference to what might
satisfy the purposes of one of the parties to it.
ENERGY RECOVERY, INC. v. HAUGE 12
United States v. Armour & Co., 402 U.S. 673, 681–82
(1971) (footnote omitted) (emphases added); see also
Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561,
574 (1984). Because Mr. Hauge did not violate any
provision of the 2001 Order, the district court abused its
discretion in holding Mr. Hauge in contempt. That
finding is accordingly reversed.
IV. The Injunction
A district court may fashion a remedy for civil
contempt to the extent it is necessary to enforce
compliance with its orders. See McComb v. Jacksonville
Paper Co., 336 U.S. 187, 193 (1949) (explaining “[w]e are
dealing here with the power of a court to grant the relief
that is necessary to effect compliance with its decree. The
measure of the court’s power in civil contempt proceedings
is determined by the requirements of full remedial
relief.”) Because the finding of contempt is reversed,
there is no remedy necessary; the injunction is therefore
vacated. 4
CONCLUSION
For the foregoing reasons, the district court’s finding
of civil contempt is reversed and its grant of the
injunction is vacated.
4 In any case, the injunction is also overbroad. “A
federal district court may not use its power of enforcing
consent decrees to enlarge or diminish the duties on
which the parties have agreed and which the court has
approved.” Johnson v. Robinson, 987 F.2d 1043, 1046
(4th Cir. 1993). The injunction prohibits Mr. Hauge from
selling any pressure exchanger, which is inconsistent with
the language in the Agreement that explicitly allows him
to compete with ERI after two years. It improperly
expands the scope of the consent decree, subjecting it to
vacation.
ENERGY RECOVERY, INC. v. HAUGE 13
REVERSED AND VACATED
|
KEN.PAXTON
ATTORNEY GENERAL OF TEXAS
May 11, 2017
The Honorable Marco A. Montemayor Opinion No. KP-0148
Webb County Attorney
1110 Washington Street, Suite 301 Re: Applicability of the International Energy
Laredo, Texas 78040 Conservation Code to new school district
building construction after November 1, 2016
(RQ-0141-KP)
Dear Mr. Montemayor:
Your question concerns.the applicability of the International Energy Conservation Code.
Specifically, you ask
[w]hether all new school district building construction begun after
November 1, 2016 require[s] adherence to the latest published
edition of the International Energy Conservation Code, which
applies to commercial buildings, as provided under Texas Health &
Safety Code § 388.003(b) and as promulgated by Texas
Administrative Rule under Title 34, Chapter 19, rule§ 19.53(b)[.] 1
Chapter 388 of the Health and Safety Code establishes Texas's building energy
performance standards .. See TEX. HEALTH & SAFETY CODE §§ 388.001-.012. It contains
legislative findings regarding the need for an effective building energy code to reduce pollutants
and to ensure reliable and affordable energy for residents and businesses in Texas's unique climate,
which typically requires more energy for cooling than for heating. See id. § 388.00l(a)-(b).
Subsection 388.003(a) expressly adopts specified energy efficiency provisions of the International
Residential Code for single-family residential construction. See id. § 388.003(a). Subsection
388.003(b), about which you ask, adopts the "International Energy Conservation Code as it existed
on May 1, 2001, ... as the energy code for use in this state for all other residential, commercial,
and industrial construction." Id. § 388.003(b). Subsection 388.003(b) also expressly grants the
State Energy Conservation Office ("SECO") authority to "adopt and substitute.for that energy code
the latest published edition of the International Energy Conservation Code" based on certain
findings. Id.; see also 34 TEX. ADMIN. CODE§ 19.53(b) (2017) (Comptroller of Pub. Accounts,
Tex. Bldg. Energy Performance Standards) (adopting, effective November 1, 2016, the 2015
version of the International Energy Conservation Code). In addition, chapter 388 authorizes
1
Letter from Honorable Marco A. Montemayor, Webb Cty. Att'y, to Honorable Ken Paxton, Tex. Att'y Gen.
at I (Nov. I 0, 2016), https://www.texasattomeygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").
The Honorable Marco A. Montemayor - Page 2 (KP-0148)
municipalities to adopt local amendments. TEX. HEALTH & SAFETY CODE§ 388.003(d); see also·
id. § 388.003(e) (limiting, in many instances, a municipality's adoption oflocal amendments that
"result in less stringent energy efficiency requirements" than provided by the International Energy
Conservation Code).
In light of potential differing governing codes in different municipalities, the rules of the
Texas Education Code regarding construction standards for school facilities provide direction to
school districts. See 19 TEX. ADMIN. CODE§ 61.1036(f)(l)-(f)(2) (2017) (Tex. Educ. Agency,
Comm'rs Rules Concerning Sch. Facilities); see also TEX. EDUC. CODE§ 46.008(a) (requiring the
Texas Education Commissioner to establish standards for the adequacy of school facilities). A
school district in an area that adopted a local construction code must comply with that code. 19
TEX. ADMIN. CODE§ 61.1036(f)(l) (2017). A school district in an area that has not adopted a local
construction code "shall adopt and use the building code and related ... energy conservation code
from the latest edition of the family of International Codes as published by the ICC."2 Id.
§ 61.1036(f)(2)(A). Thus, the specific code applying to a particular school district will depend on
the local adoption of restrictions, and we cannot provide a blanket answer that will apply to all
school districts. However, we can advise you about the 2015 International Energy Conservation
Code's applicability to school building construction in those jurisdictions that adopted the 2015
International Energy Conservation Code or where it governs by default. With respect to these
jurisdictions, you ask whether school buildings are "other residential, commercial, or industrial
buildings" within the scope of subsection 388.003(b). See Request Letter at 3.
You explain that school buildings are neither "other residential" construction nor
"industrial" construction and question whether the school buildings are "commercial"
construction. See id. at 3-4. As chapter 388 does not define the term "commercial," we look to
the common or particular meaning of that undefined term. See TEX. Gov'T CODE § 311.011 (b)
("Words and phrases that have acquired a technical or particular meaning, whether by legislative
definition or otherwise, shall be construed accordingly."). The term "commercial establishment"
and related terms such as "commercial" may have a broad or narrow meaning depending on the
context. See Tex. Att'y Gen. L0-90-16 (1990) at 2. Here, the relevant building code, the
International Energy Conservation Code, which the Legislature expressly adopted, contains a
particular definition of the term. The International Energy Conservation Code defines
"commercial building" to mean "all buildings that are not included in the definition of 'residential
building.'" Int'I Code Council, Int'I Energy Conservation Code 2015, § C202 ("General
Definitions");3 see also TEX. Loe. Gov'T CODE § 214.211(5)(A) (defining "commercial" in a
similar context to mean "a building for the use or occupation of people for: (A) a public
purpose .... "). Thus, because a public school building is not a residential building, it falls within
the scope of "commercial" construction for purposes of the International Energy Conservation
Code and likely also for purposes of chapter 388.
2
The ICC refers to the International Code Council. 19 TEX. ADMIN. CODE§ 61.1036(a)(14)(8) (2017).
3
Available at http://codes.iccsafe.org/I-Codes.html (last visited Mar. 29, 2017).
The Honorable Marco A. Montemayor - Page 3 (KP-0148)
Citing several sources of legislative history, you suggest this conclusion is contrary to the
Legislature's intent as represented by the statements of various legislators. See Request Letter at
4. You assert that the 2013 amendments to chapter 388 were "meant to address energy efficiency
standards in residential construction and not commercial construction." Id. The cardinal rule of
statutory construction is to ascertain the Legislature's intent, and the "truest manifestation of what
legislators intended is what lawmakers enacted, the literal text they voted on." Alex Sheshunoff
Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 651 (Tex. 2006). Texas courts recognize that
"[s]tatements made during the legislative process by individual legislators or even a unanimous
legislative chamber are not evidence of the collective intent of the majorities of both legislative
chambers that enacted a statute." Molinet v. Kimbrell, 356 S.W.3d 407, 414 (Tex. 2011). Wary
of isolated statements of legislators, the Texas Supreme Court acknowledges that the statute itself
"constitutes the law; it alone represents the Legislature's singular will, and it is perilous to equate
an isolated remark or opinion with an authoritative, watertight index of the collective wishes of
181 individual legislators, who may have 181 different motives and reasons for voting the way
they do." Klein v. Hernandez, 315 S.W.3d 1, 11 (Tex. 2010). Thus, a Texas court is unlikely to
rely on such statements to limit the applicability of the 2015 International Energy Conservation
Code to only residential construction contrary to the statute's plain language. See TEX. HEALTH
& SAFETY CODE§ 388.003(b); see also Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278,
284 (Tex. 1999) (stating that "legislative history cannot be used to alter or disregard the express
terms of a code provision").
The Honorable Marco A. Montemayor - Page 4 (KP-0148)
SUMMARY
A court would likely find that school buildings are
commercial construction within the scope of subsection 388.003(b)
of the Health and Safety Code.
Very truly yours,
KEN PAXTON
Attorney General of Texas
JEFFREY C. MATEER
First Assistant Attorney General
BRANTLEY STARR
Deputy First Assistant Attorney General
VIRGINIA K. HOELSCHER
Chair, Opinion Committee
CHARLOTTE M. HARPER
Assistant Attorney General, Opinion Committee
|
IN THE
TENTH COURT OF APPEALS
No. 10-12-00065-CV
MARK WALTERS,
Appellant
v.
BRAD LIVINGSTON AND TEXAS
DEPARTMENT OF CRIMINAL JUSTICE,
Appellees
From the 12th District Court
Walker County, Texas
Trial Court No. 25,548
MEMORANDUM OPINION
Mark Walters, a prison inmate, appeals from the trial court’s dismissal of his civil
lawsuit. Because we find the trial court did not abuse its discretion in dismissing
Walters’ suit with prejudice, the trial court’s judgment is affirmed.
BRAD LIVINGSTON
At the outset, we must determine whether Brad Livingston, the Director of the
Texas Department of Criminal Justice, is a party to this appeal.
Although styled against the Texas Department of Criminal Justice, Walters
initially brought suit against Brad Livingston, in both Livingston’s individual and
official capacity, for the elimination of Project Rio, a re-entry and re-integration
program for inmates. After the Attorney General filed a motion to dismiss Walters’
suit, Walters specifically dropped Livingston from the suit and, by an amended petition
Walters styled as a supplemental petition filed with the trial court clerk, substituted in
the Texas Department of Criminal Justice as the defendant. He explained to the trial
court, in a document in the clerk’s record which appears to be a cover letter to the
amended petition, that his action was deliberate and pursuant to the election of
remedies provision in section 101.106 of the Texas Civil Practice and Remedies Code.
TEX. CIV. PRAC. & REM. CODE ANN. § 101.106(f) (West 2011) (“On the employee's motion,
the suit against the employee shall be dismissed unless the plaintiff files amended
pleadings dismissing the employee and naming the governmental unit as defendant on
or before the 30th day after the date the motion is filed.”). The document signed by
Walters and addressed to the trial court states in relevant part:
I am filing a Second Supplimental [sic] Petition re: cause number 25,584,
as an appropriate response to the defendants [sic] motion to dismiss:
Amicus Curiae.
According to the Civil Practices [sic] and Remedies, Governmental
Liabilities § 101.106(f), I have 30 days after a motion to dismiss is filed to
Amend my pleadings dismissing an employee as defendant and naming
the governmental unit as defendant.
Walters v. Livingston Page 2
As my accompanying affidavit states, I did not receive the motion to
dismiss until June 1, 2011….
Walters’ accompanying affidavit provides in relevant part:
In support of the Amicus Curiae, the Plaintiff is filing a second
supplimental [sic] petition, in accordance with V. T. C. A. Civil Practices
[sic] and Remedies § 101.106(f) which states that within 30 days of a
defendants [sic] motion for dismissal, a plaintiff can file an amended
pleadings dismissing an employee and naming a governmental unit as
defendant.
Thus, as of June 3, 2011, pursuant to Walters’ “Second Supplimental Petition,”
Livingston was no longer a party to Walters’ suit.
Walters amended his lawsuit a third time but did not include Livingston as a
defendant, which would have been pointless given Walters’ earlier decision. The trial
court ultimately dismissed Walters’ suit against TDCJ. The order of dismissal made no
mention of Livingston because Livingston was no longer a party to the proceeding.
By his notice of appeal, Walters named only Livingston as the appellee or other
party to the appeal and did not identify or name TDCJ. Rule 25.1(b) of the Texas Rules
of Appellate Procedure provides that the filing of a notice of appeal invokes our
jurisdiction over all parties to the trial court’s judgment or order appealed from. TEX. R.
APP. P. 25.1(b). We have no order or judgment from the trial court regarding
Livingston. Thus, Livingston is not a party to the appeal, and we have no jurisdiction
over Livingston in this appeal. See TEX. R. APP. P. 25.1(b); Avila v. Lone Star Radiology,
183 S.W.3d 814, 818 (Tex. App. Waco 2005) (Gray, C.J., dissenting) (“A notice of appeal,
Walters v. Livingston Page 3
however, does not invoke our jurisdiction over persons who were not parties in the trial
court.”).
The Attorney General raised the issue regarding the proper party against whom
Walters brought his suit. Walters responded in his reply brief that naming TDCJ as the
defendant in his pleading was a misnomer. His response is contrary to the record and
to his election of remedies. Thus, because we have no jurisdiction over Livingston, an
appeal, if any, as to Livingston is dismissed. See TEX. R. APP. P. 42.3(a).
ISSUES ON APPEAL
In his first issue, Walters contends the trial court erred in dismissing Walters’ suit
because: 1) constitutional violations by Livingston allowed Walters to bring a cause of
action; 2) Livingston failed to list Project Rio as an encumbrance; 3) Livingston did not
adhere to the Texas Open Meetings Act; and 4) Livingston is not entitled to either
sovereign immunity or official immunity. This issue questions only the acts or omission
of Brad Livingston. As we have held, Livingston is not a party to this appeal; and any
appeal as to him has been dismissed. Because Livingston is not a party to the appeal,
Walters’ first issue is overruled.
In his second issue, Walters contends the trial court abused its discretion in
dismissing his suit as frivolous because 1) he was either not required to comply with the
grievance procedures or, alternatively, did comply with the procedures, and 2) his
claims had an arguable basis in law. We review the trial court's dismissal of an in forma
Walters v. Livingston Page 4
pauperis suit filed by an inmate under an abuse of discretion standard. Hickson v. Moya,
926 S.W.2d 397, 398 (Tex. App.—Waco 1996, no writ).
An inmate may not file a claim in state court regarding operative facts for which
the TDCJ grievance system provides the exclusive administrative remedy until the
inmate receives a written decision issued by the highest authority provided for in the
grievance system, or the 180th day after the date the grievance is filed, if the inmate has
not received a written decision. TEX. GOV'T CODE ANN. § 501.008(d) (West 2012). An
inmate who files a claim that is subject to the prison grievance system must also file an
affidavit or unsworn declaration stating the date the grievance was filed and the date
the written decision was received by the inmate and a copy of the written decision from
the grievance system. TEX. CIV. PRAC. & REM. CODE ANN. § 14.005(a) (West 2002). If an
inmate does not comply with § 14.005(a) or fails to file his claim within 31 days after the
date the inmate receives the written decision from the grievance system, the inmate’s
suit must be dismissed. See id. (b); Leachman v. Dretke, 261 S.W.3d 297, 311 (Tex. App.—
Fort Worth 2008, no pet.) (op’n on rhg). Exhaustion of these administrative remedies
requires the proper exhaustion of the remedies. Leachman, 261 S.W.3d at 311; see Retzlaff
v. Tex. Dep't of Crim. Justice, 94 S.W.3d 650, 654 (Tex. App.—Houston [14th Dist.] 2002,
pet. denied). Further, if an inmate has failed to exhaust his administrative remedies, his
claim has no arguable basis in law, and is, therefore, frivolous. TEX. CIV. PRAC. & REM.
CODE ANN. § 14.003 (West 2002); Retzlaff, 94 S.W.3d at 653.
Walters v. Livingston Page 5
Initially, Walters argues he was not required to comply with the grievance
procedures because Project Rio is a statute which was violated and which is “non-
grievable” under TDCJ policy. He bases this conclusion on language in TDCJ’s
Offender Orientation Handbook which provides an inmate may not "grieve" state or
federal court decisions, laws, or regulations. Offender Orientation Handbook at pg.53,
http://www.tdcj.state.tx.us/documents/Offender_Orientation_Handbook_English.pdf)
(emphasis added). But Walters is not complaining about a state law, that is, that the law
is invalid; he is complaining about the cessation of a state program. He contends the
cessation violates a state law. We do not believe that TDCJ intended this type of claim
made by Walters to be exempt from the grievance procedures under the provision cited
by Walters of the Offender Orientation Handbook. Raising such a claim in a grievance
procedure would give TDCJ an opportunity to correct a violation, if any, that it made in
the cessation of the program.1 See Leachman, 261 S.W.3d at 309 (citing Woodford v. Ngo,
548 U.S. 81, 83-84, 126 S. Ct. 2378, 2382, 165 L. Ed. 2d 368 (2006)) (discussing the
reasoning for the need for the exhaustion of administrative remedies prior to an inmate
filing suit); Whirty v. Grimes, Nos. 07-08-0394-CV & 07-09-0111-CR, 2009 Tex. App.
LEXIS 2535, *5 (Tex. App.—Amarillo Apr. 14, 2009, pet. denied) (mem. op.). Walters
cannot side step the grievance procedures by re-characterizing his claim as one not
covered by the procedures. See Whirty, 2009 Tex. App. LEXIS 2535, *9 (“Couching the
1 We do not hold that there was a violation in ceasing the program.
Walters v. Livingston Page 6
claim as one in tort for damages does not remove it from the exhaustion requirement of
chapter 14.”). Accordingly, we hold Walters was required to comply with TDCJ’s
grievance procedures.
Alternatively, Walters contends that if he was required to comply, he actually
complied with the grievance procedure and exhausted his administrative remedies. We
find he did not.
Walters attached Step 1 and Step 2 grievance forms to his original petition;
however, his complaints in those grievance forms do not comport with his claims in his
suit. In his grievance, Walters complains about not receiving a certificate of on-the-job-
training through Project Rio when he had qualified to receive one. Walters’ grievance
does not address the issues he brought in his civil suit; and, thus, we cannot say he
either sought or received a final administrative decision on those issues. See Wolf v. Tex.
Dep't of Crim. Justice, 182 S.W.3d 449, 451 (Tex. App.—Texarkana 2006, pet. denied);
Williams v. Ballard, No. 10-08-00378-CV, 2009 Tex. App. LEXIS 9246 (Tex. App.—Waco
Dec. 2, 2009). Further, Walters did not attach an affidavit or unsworn declaration
stating the date that the grievance was filed and the date the written decision was
received by him. TEX. CIV. PRAC. & REM. CODE ANN. § 14.005(a)(1) (West 2002). The
Step 2 grievance form does not show when he received this final decision. Thus,
Walters did not provide the trial court with the information required so it could
determine whether the lawsuit was timely filed; and, given that over two months had
Walters v. Livingston Page 7
elapsed between the time the Step 2 grievance form as signed by a TDCJ agent and the
time Walters filed his lawsuit, it is entirely reasonable for the trial court to conclude that
over thirty-one days had elapsed since Walters was informed of the final administrative
decision. See Wolf, 182 S.W.3d at 451.
Walters failed to properly exhaust his administrative remedies, and as such,
raising his claim by bringing suit against TDCJ had no arguable basis in law.
Accordingly, the trial court did not abuse its discretion in dismissing Walters’ suit as
frivolous. Walters’ second issue is overruled.
In his third issue, Walters contends the trial court abused its discretion in not
issuing findings of fact and conclusions of law. Pursuant to Rules 296 and 297 of the
Texas Rules of Civil Procedure, a trial judge must, when properly requested, prepare
findings of fact in cases tried in the district court or county court without a jury. See TEX.
R. CIV. P. 296, 297. Those rules, however, do not impose any duty on the trial court to
file findings of fact or conclusions of law where there has been no trial as in this case.
Kendrick v. Lynaugh, 804 S.W.2d 153, 156 (Tex. App.—Houston [14 Dist.] 1990, no pet.);
Smith v. Quada, No. 10-09-00414-CV, 2011 Tex. App. LEXIS 5122, *5-6 (Tex. App.—Waco
July 6, 2011, pet. denied) (mem. op.). Walters’ third issue is overruled.
In his fourth and last issue, Walters complains that the trial court abused its
discretion in dismissing Walters’ case with prejudice. A motion to dismiss that is
granted pursuant to section 14.003 for failure to establish an arguable basis in law is
Walters v. Livingston Page 8
appropriately dismissed with prejudice. Nabelek v. DA of Harris County, 290 S.W.3d 222,
233 (Tex. App.—Houston [14th Dist.] 2005, pet. denied); Williams v. Ballard, No. 10-08-
00378-CV, 2009 Tex. App. LEXIS 9246, *4 (Tex. App.—Waco Dec. 2, 2009, no pet.). We
have already determined Walters’ claims had no arguable basis in law. Thus, the trial
court did not abuse its discretion in dismissing Walters’ suit with prejudice. Walters’
fourth issue is overruled.
CONCLUSION
Having overruled each of Walters’ issues on appeal, we affirm the trial court’s
judgment.
TOM GRAY
Chief Justice
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
Appeal dismissed in part and affirmed in part
Opinion delivered and filed November 1, 2012
[CV06]
Walters v. Livingston Page 9
|
FILED
DEC. 8,2015
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
COURT OF APPEALS, STATE OF WASHINGTON DIVISION III
) No. 32765-5-111 cons. wI
In re Welfare of: ) No. 32776-1-111; No. 32777-9-111
)
Ca.R., ) ORDER WITHDRAWING
CI.R., ) OPINION
G.R., )
Minor(s). )
The Court on its own motion, does hereby withdraw the opinion filed with this
Court in the above-entitled case on October 27,2015.
PANEL: 3, Brown, Siddoway, Fearing
FOR THE COURT:
CHIEF JUDGE
FILED
DEC. 8,2015
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
In re the Welfare of: ) No. 32765-5-111 cons. wi
) No. 32776-1-111; No. 32777-9-111
Ca.R., )
CLR., )
G.R., )
)
) PUBLISHED OPINION
Minor(s). )
BROWN, J. - T.T. appeals a superior court judge's denial of her request to revise
a commissioner's ruling granting the Department of Social and Health Services'
(Department's) dependency petition for her daughters, Ca.R., CLR., and G.R. T.T.
contends the court erred in finding she was not capable of adequately caring for the
girls, ordering out-of-home placement, and ordering an Interstate Compact on the
Placement of Children investigation (ICPC) with Nevada before the children's placement
with her. We find no abuse of trial court discretion in the trial court's dependency and
placement decisions. We lack a record of Nevada's ICPC involvement. Thus, T.T.'s
ICPC concerns are both premature and ungrounded. Accordingly, we affirm.
FACTS
In 2011, the State of Nevada removed Ca.R. (born 1/19/02), CLR. (born 1/17/05),
and G.R. (born 1017/06) from T.T.'s care along with a younger stepbrother, A.G., who is
No. 32765-5-111 cons. wI 32776-1-111 and 32777-9-111
In re the Welfare of Ga.R., GI.R., and G.R.
not the subject of this appeal. Nevada then petitioned for dependency based on Ca.R.'s
allegations of sexual abuse by her mother's boyfriend, AG.'s father; domestic violence;
and T.T.'s drug use. Later, the three girls were placed with their father in Oregon after
an approved ICPC. The Nevada dependency was then dismissed as to the girls. The
girls moved to Spokane with their father in the summer of 2013.
In January 2014, Ca.R. alleged her father sexually abused her and the
Department petitioned for dependency. T.T. appeared through counsel. The girls had
not seen T.T. since leaving Nevada, but had frequent telephone conversations with her.
On March 26, 2014, the girls' father agreed to dependency. T.T. participated
telephonically in a family team decision meeting, unsuccessfully requesting placement
of the girls with her in Nevada as soon as possible, without having to wait for the results
of an ICPC request.
A fact-finding hearing was held in May. Ca.R. was then in her second
placement, while CI.R. and G.R. were still together in their first placement. The
Department moved Ca. R. to a receiving home from her first placement because she
had displayed disruptive behavior, including head banging and excessive attention-
seeking behavior and over-attachment to people. Ca.R. reports she is very angry and
has nightmares. Evidence showed T.T. suffers from post-traumatic stress disorder and
panic disorder with agoraphobia. G.R. and CI.R. struggle with being overly afraid of
bugs, the outdoors, and trees. T.T. related she lives with her significant other, AO., and
her two sons, AG., and Z.O.
2
No. 32765-5-111 cons. wI 32776-1-111 and 32777-9-111
In re the Welfare of Ca.R., CI.R., and G.R.
After fact-finding, the commissioner entered findings of fact noting the amount of
work T.T. had done to have her younger boys returned to her care, but found, "The
court is concerned that the services provided during mother's dependency in Nevada
were not directed at reunifying her with [Ca.R., CI.R., and G.R.]." Clerk's Papers (CP)
at 85. Specifically, the commissioner found, "The trauma that the children experienced
in the mother's home (mother's substance abuse and domestic violence as well as
[Ca.R.'s] disclosure of sexual abuse by mother's former partner) has not been
addressed." Id. Further, "[Ca.R.] has significant behavioral and emotional issues. She
is just now beginning to deal with these issues in counseling. Her behavior appears to
be parentified. If she were to be placed with her mother today she would suddenly have
new siblings and a new father figure as well as re-adjusting to living with her mother.
This could set the family up for failure." CP at 86. The commissioner found, "An ICPC
approval is needed so that the State of Nevada will provide oversight of the family if
[Ca.R.] is placed in the home." CP at 86 (Finding of Fact i).
The commissioner granted the, dependency petition, ruling "[T.T.] is currently not
capable of parenting [Ca.R., CI.R. or G.R.] due to the unresolved issues that led to the
dependency in Nevada. Specifically, T.T. needs to repair her relationship with the girls,
and to demonstrate that she can attend to their emotional needs including partiCipating
in any family counseling or other therapy needed. Mother also needs to continue her
commitment to sobriety." CP at 86.
3
No. 32765-5-111 cons. wI 32776-1-111 and 32777-9-111
In re the Welfare of Ca.R., CI.R., and G.R.
The commissioner then found "an ICPC approval is needed so that the State of
Nevada will provide oversight of the family if [Ca.R] is placed in the home." CP at 86.
The commissioner noted in her oral ruling she wanted "the ICPC ... process to get
started, not because it's required for a parent but because of the additional oversight
and it's clear that you have a very good relationship with your social worker and they
may be happy to supervise and give us the oversight there that we need." CP at 327.
T.T. moved to revise the commissioner's order, arguing she could provide
I ' counseling for the girls in Nevada through state agencies and insisting she was capable
of caring for all five children. The court denied her revisions request, adopting the
commissioner's findings of fact, and finding the dependency was based on "the
children's needs, to ensure their safety and that a move to their mother's home would
be done in an appropriate manner that meets their needs." CP at 385. The court found,
"It will be helpful to this family to have a social worker in Nevada, assigned through the
ICPC process, who will help to provide services and supports in reintroducing these
children to their mother's home." CP at 385. T.T. appealed.
ANALYSIS
A. Dependency Finding
The issue is whether the revision judge erred by abusing her discretion when
denying revision of the commissioner's dependency finding. T.T. contends substantial
evidence does not support the court's finding she is not capable of parenting Ca.R.,
CI.R, and G.R
4
No. 32765-5-111 cons. w/32776-1-1I1 and 32777-9-111
In re the Welfare of Ga.R., GI.R., and G.R.
"We review the superior court's ruling, not the commissioner's." State v. Ramer,
151 Wn.2d 106, 113,86 P.3d 132 (2004). "Commissioner rulings are subject to revision
by the superior court." RCW 2.24.050. On revision, the superior court reviews the
commissioner's findings of fact and conclusions of law de novo based on the evidence
and issues presented to the commissioner. In re Marriage of Moody, 137 Wn.2d 979,
992-93,976 P.2d 1240 (1999). We review a superior court's dependency placement
decision for abuse of discretion. In re Dependency of A.G., 74 Wn. App. 271, 275, 873
P.2d 535 (1994). A court abuses its discretion when it "applies the wrong legal
standard, or bases its ruling on an erroneous view of the law." Gildon v. Simon Prop.
Grp., Inc., 158 Wn.2d 483,494, 145 P.3d 1196 (2006).
Parents "have a fundamental liberty interest in the care and welfare of their minor
children" must be balanced with the State's "interest in protecting the physical, mental,
and emotional health of children." In re Dependency of Schermer, 161 Wn.2d 927,941,
169 P.3d 452 (2007). Unless a child's right to nurture, physical and/or mental health, or
safety is endangered, "the family unit should remain intact." RCW 13.34.020. But when
the rights of the child and the legal rights of the parents conflict, the child's rights prevail,
as the child's health and safety [are] the paramount concern. Id. Declaring a child
"dependent" transfers legal custody to the State. Schermer, 161 Wn.2d at 942. After
filing a dependency petition, a fact-finding hearing is held to decide if the allegations are
true. Id. The petitioner must show "by a preponderance of the evidence that the child
meets one of the statutory definitions of dependency." Id.
5
No. 32765-5-111 cons. wI 32776-1-111 and 32777-9-111
In re the Welfare of Ca.R., CI.R., and G.R.
Relevant here, Washington defines a "dependent child" as a child who "has no
parent ... capable of adequately caring for the child, such that the child is in
circumstances which constitute a danger of substantial damage to the child's
psychological or physical development." RCW 13.34.030(6)(c). Dependencies based
on RCW 13.34.030(6)(c) do not require a finding of parental unfitness; instead, they
"allow[ ] consideration of both a child's special needs and any limitations or other
circumstances which affect a parent's ability to respond to those needs." Schenner,
161 Wn.2d at 944. A child is not dependent if a capable parent exists. In re Walker, 43
Wn.2d 710,715,263 P.2d 956 (1953).
When evaluating evidence to determine whether a child is dependent, trial courts
have broad discretion and considerable flexibility to reach '''a decision that recognizes
both the welfare of the child and parental rights.'" Schenner, 161 Wn.2d at 952 (quoting
In re Welfare of Becker, 87 Wn.2d 470,478,553 P.2d 1339 (1976». A court has no
required factors to consider. Becker, 87 Wn.2d at 477 (interpreting predecessor
statute). Decisions to dismiss a dependency cannot "be based upon hunches or snap
judgments": all parties have a right to be heard, and children need a well-considered
decision. In re Dependency of R.H., 129 Wn. App. 83, 88, 117 P.3d 1179 (2005).
Our "appellate review is limited to whether substantial evidence supports the trial
court's findings and whether the findings support its conclusions of Jaw." Schenner, 161
Wn.2d at 940. "Substantial evidence exists if, when viewing the evidence in the light
most favorable to the prevailing party, a rational trier of fact could find the fact more
6
No. 32765-5-111 cons. wI 32776-1-111 and 32777-9-111
In re the Welfare of Ga.R., GI.R., and G.R.
likely than not to be true." In re Welfare of X. T., 174 Wn. App. 733, 737, 300 P.3d 824
(2013). Furthermore, we do not reweigh evidence or reassess witness credibility. Id.
Here, the girls had not seen their mother since they were removed from her
Nevada home three years earlier. They were removed based on allegations of sexual
and physical abuse, substance abuse, and exposure to domestic violence. A
dependency was started but dismissed without services to address the removal
problems because the girls relocated to their father's home in Oregon. The girls now
show concerning behaviors such as head banging, unhealthy attachments, unfounded
fears, anger, and nightmares. Nothing in this record indicates T.T. understands what
the girls would need from her to address the girls' difficult behaviors. Moreover, no plan
is in place for preventing interaction between A.G.'s father and the girls in Nevada.
Sending the girls to live with T.T. without an investigation and services in place would
subject them to extraordinary risk of additional trauma due to a lack of emotional and
behavioral support, as well as exposure to a former abuser. T.T. argues services are
available through a program she is currently involved in, but further investigation is
needed to make sure the girls qualify for these services and that the services are
tailored to their, and T.T.'s, specific needs.
T.T. next incorrectly argues the court was required to find her unfit. The
Department need not prove a parent is unfit to prove a dependency. Schermer, 161
Wn.2d at 944. A dependency based on RCW 13.34.030(6)(c) does not turn on parental
7
No. 32765-5-111 cons. wi 32776-1-111 and 32777-9-111
In re the Welfare of Ga.R., GI.R., and G.R.
"unfitness" but allows consideration of both a child's special needs and any limitations or
other circumstances which affect a parent's ability to respond to those needs. Id.
This case, like the Schermer case involves special needs and circumstances.
The girls have not lived with their mother since 2011 when they were removed from her
home and dependency proceedings started. No services were offered because the girls
relocated to Oregon to live with their father. The girls have been exposed to phYSical,
sexual, and substance abuse resulting in their present concerning behaviors. Here, it is
sufficient for the Department to prove T.T. is not capable of adequately caring for Ca.R.,
CI.R., and G.R., based on their special needs and the case circumstances. The
Department has met this burden. Placing the girls with T.T. would put the children in
circumstances which constitute a danger of substantial damage to their psychological or
physical development; thus, satisfying RCW 13.34.030(6)(c). Given all, we conclude
the court did not abuse its discretion in finding th~ girls dependent.
ANALYSIS
B. Placement and ICPC Involvement
Based on her rejected adequate-parent arguments, T.T. contends the trial court
erred in not placing the children with her. Thus, she incorrectly argues ICPC
involvement is an unnecessary delay to placing the girls with her.
Dependency hearings determine what course of action serves the child's best
interests. Schermer, 161 Wn.2d at 942. In dependency proceedings, discretionary
placement decisions are reviewed for an abuse of discretion. In re Dependency of AG.,
B
No. 32765-5-111 cons. wI 32776-1-111 and 32777-9-111
In re the Welfare of Ca.R., CI.R., and G.R.
74 Wn. App. 271, 276, 873 P.2d 535 (1994). "A trial court abuses its discretion when its
decision is manifestly unreasonable or based on untenable grounds." In re Marriage of
Kovacs, 121 Wn.2d 795,801,854 P.2d 629 (1993).
When placing a child, "the best interests of the child are the court's paramount
concern." In re DependencyofR.W, 143 Wn. App. 219, 223,177 P.3d 186 (2008).
Because each case is fact specific, no exact criteria exists for determining what the
child's best interests are. Id. Even though a child's interests are the paramount
concern, the parents' interests still have weight: courts are directed "to adopt a program
which will 'least interfere with family autonomy, provided that the services are adequate
to protect the child.'" In re DependencyofJ.B.S., 123 Wn.2d 1, 12,863 P.2d 1344
(1993) (quoting RG.W 13.34.130{1)(a». But, if it is not in the child's best interests, a
court is not required to reunite children with the parent who had custody at the time of
the dependency action. R.W., 143 Wn. App. at 223.
The girls were not living with T.T. when the Washington dependency proceedings
were initiated and had been previously removed from T.T.'s Nevada home for
dependency proceedings. Nothing shows the girls' special needs were remedied when
they were sent to Oregon to live with their father. These facts provide tenable grounds
for the court to deny in-home placement.
T.T. incorrectly argues the court erred by mandating ICPC proceedings before
making a placement determination. The superior court judge adopted the
commissioner's findings of fact. Finding of fact i states, "An ICPC approval is needed
9
No. 32765-5-111 cons. wI 32776-1-111 and 32777-9-111
In re the Welfare of Ca.R., CI.R., and G.R.
so that the State of Nevada will provide oversight of the family if [Ca.R.] is placed in the
home." CP at 86. The word "needed" is not used to connote a prerequisite.
"The ICPC was drafted in the 1950s by a group of state social service
administrators to address the problem of providing services to children placed across
state lines." In re Dependency of D.F.-M., 157 Wn. App. 179, 187,236 P.3d 961
(2010). Its purpose is to encourage cooperation and information sharing among
member states. Id. It is a tool for foster care placement or preliminary to an adoption.
Id. at 188. Division One of this court held, "the ICPC governs only the placement of
children in substitute arrangements for parental care." Id. at 191. The ICPC process
does not govern placement of children with parents. Placement decisions are made by
the courts. Our record does not disclose what, if any, response Nevada has made to
Washington's ICPC request. Thus, T.T.'s ICPC concerns are premature. Our case is
unlike D.F.-M. where the court dealt with an Oklahoma ICPC process that interfered
with Washington's placement decision. Here the goal remains to investigate placement
of the girls with T.T. with Nevada's ICPC assistance.
In sum, the commissioner correctly noted the ICPC process was "not ...
required for a parent." CP at 327. But this does not eliminate cooperation between the
two states as the parties work toward reunification. Rather, consistent with D.F.-M., it
leaves the decision of whether T.T. is capable of parenting the girls within the sound
discretion of the trial court rather than an administrative agency. See D.F.-M., 157 Wn.
App. at 192.
10
No. 32765-5-111 cons. wI 32776-1-111 and 32777-9-111
In re the Welfare of Ga.R., GI.R., and G.R.
Affirmed.
Brown, J.
1CONCUR:
11
No. 32765-5-111; consolidated with 32776-1-111; 32777-9-111
FEARING, J. (dissent) This appeal arises from consolidated dependency petitions
involving eight children all related by blood or cohabitation. The appeal concerns three
of the children identified in the majority opinion as Ca.R., born January 19, 2002; CLR.,
born January 17,2005; and G.R., born October 7, 2006. For ease in reading, I refer to the
three girls respectively and fictitiously as Karen, now age thirteen, Cathy, now age ten,
and Georgia, now age nine. The three girls are sisters and the biological daughters of
appellant T.T., who resides in Las Vegas. W.R. is the biological father of Karen and
Georgia and listed on the birth certificate of Cathy as Cathy's father, although another
gentleman is the biological father. The parties consider W.R. as the father of all three
girls.
In January 2014, when the State of Washington intervened in the lives of Karen,
Cathy, and Georgia, the three lived with their father \V.R. and his girlfriend, Alicia
Huante, in Spokane. Huante bore other children, who resided in the household, including
male twins born in December 2012. W.R. is the father of the twins. The State removed
Karen, Cathy and Georgia from their Spokane home because of allegations of sexual
No. 32765-5-III Cons. wi 32776-I-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
abuse by W.R .. The State of Washington also removed from the household the twins and
three Greenleaf children, two girls and one boy, whose mother is Alicia Huante.
The trial court declared Karen, Cathy and Georgia dependents of the State of
Washington based on a conclusion that neither T.T. nor W.R. are capable of parenting the
three within the meaning ofRCW 13.34.030(6)(c). The statute allows a dependency
when no parent is capable of adequately caring for a child, such that the child is in
circumstances which constitute a danger of substantial damage to the child's
psychological or physical development. The trial court did not find that T.T.'s care for
any of the three daughters would constitute a danger of substantial damage and the
evidence would not support such a finding. The State would not return the two younger
girls to T.T. because the girls have a fear of the outdoors, bugs, and trees. T.T. appeals
the dependency ruling and argues that substantial evidence does not support the
dependency finding. I agree. I would reverse the trial court and dismiss the dependency
petition.
The trial court ordered a placement study by Nevada authorities, under the
"Interstate Compact on Placement of Children" (ICPC) ch. 26.34 RCW. In addition to
determining whether to uphold the dependency, this court must also decide whether the
trial court had authority to order such a study. It did not.
2
No. 32765-5-111 Cons. wi 32776-1-111; 32777-9-111
In re the Welfare ofCa.R; CI.R and G.R.
FACTS
The case's facts derive from a one-day dependency trial before a court
commissioner. During the trial, the State's sole witness, social worker Amanda Plumb,
testified to the background ofT.T. Plumb's basis of knowledge for the background was
Nevada Child Protective Service (CPS) binders, but the State did not seek to introduce
the records in the binders as an exhibit. During her testimony, Plumb did not refer to the
records to confirm she testified consistently with the records. Plumb never met T.T. and
thus never observed her with children. Plumb only knew T.T. from what Plumb read,
including recent Nevada reports that establish that T.T. performs well as a mother.
T.T. is the mother of seven children, three of whom are the subject of this appeal.
In addition to Karen, Cathy, and Georgia, T.T. bore Faith, a daughter older than the three
girls, Terrance, who resides on an Indian reservation in North Dakota, Andrew, born in
2011, and Zeke, born in 2013. Andrew and Zeke are also ersatz monikers. The ages of
Faith and Terrance are unknown.
Physicians have diagnosed T.T. with posttraumatic stress disorder, panic disorder,
and agoraphobia. She has suffered domestic violence. T.T. now receives counseling for
her mental health disorders.
At trial, Amanda Plumb averred that a report in the binder commented that Faith
tried to drown a seven year old. According to one report, both Faith and T.T. bang each's
respective head against a wall.
3
No. 32765-5-111 Cons. wi 32776-1-111; 32777-9-111
In re the Welfare ofCa.R; CI.R and G.R.
Karen, Cathy and Georgia lived with their mother T.T. in Nevada until 2011. We
do not know when T.T. and W.R., the father of the three girls, separated. In 2011, the
State of Nevada removed Karen, Cathy, Georgia, and younger brother Andrew from
T.T.'s home in Las Vegas. Nevada filed a dependency and alleged sexual abuse of Karen
by T.T. 's former boyfriend and Andrew's father, Mark Gregory, domestic violence
against T.T. by Gregory, and T.T.'s drug use. Authorities later determined that Karen
fabricated the allegation of sexual abuse by Gregory.
Upon removal from their mother's Nevada home, Karen, Cathy, and Georgia lived
with their father, W.R., in Oregon. The State of Nevada then dismissed the dependency
proceeding with regard to the three girls. In 2013, the sisters moved to Spokane with
their father and his companion, Alicia Huante.
Amanda Plumb testified that children ofT.T. have been "removed, returned,
removed, and returned" by Nevada on multiple occasions, beginning in 2000. Clerk's
Papers (CP) at 162. Plumb gave scant details. As already written, the State of Nevada
removed Andrew, along with the three girls, in 2011. Nevada returned Andrew to T.T.
sometime in 2011. Nevada removed Andrew again on February 22, 2013.
T.T. has not had physical contact with Karen, Cathy and Georgia since their
removal from her Nevada home in 2011. Since removal, T.T. has regularly spoken on
the telephone with all three daughters, particularly with the oldest daughter, Karen. She
speaks with Karen at length every evening for up to an hour. She helps Karen with
4
No. 32765-5-II1 Cons. wi 32776-1-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
homework. The mother and daughter discuss school, grades, attitudinal problems,
positive ideals, and helping around the house. Karen initially expressed frustration to
T.T. about mistakes T.T. made in the latter's life. According to T.T., Karen has forgiven
her, in part, because T.T. unfailingly calls Karen and speaks consistently.
T.T. respectively speaks with Cathy and Georgia about once a week for five
minutes to a half hour. T.T. speaks to the younger girls about school and favorite things.
The foster mother of Cathy and Georgia taught them songs to sing to their mother
because they initially lacked subjects to discuss.
As a result of the 2011 Nevada dependency proceeding, T.T. underwent intensive
outpatient drug treatment for six months. Since April 2012, T.T. has successfully
completed random and frequent urinalyses. T.T. also underwent domestic violence
counseling for one year and still engages in mental health counseling. She took a
parenting class.
Upon the May 2013 birth ofZeke, T.T. remained under the specter ofa Nevada
dependency, so the State assigned Zeke to reside with his father, Anton Ort. Ort has no
CPS history. Ort and T.T. now cohabit, and Nevada returned Andrew to T.T. on July 1,
2013. Anton Ort helps raise both boys. Ort and T.T. plan to marry.
Anton Ort, T.T., Andrew, and Zeke live in a three bedroom, two bathroom
apartment obtained for them by Las Vegas' Women's Development Center. Random
urinalyses is a prerequisite to occupancy in the apartment complex. Women's
5
No. 32765-5-III Cons. wi 32776-1-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
Development Center could establish family counseling for T.T. and her three daughters.
T.T. has a support system through her church, Victory Outreach, and through other
families she met. A YMCA, providing recreation for the children, is a five minute walk.
In January 2014, Karen Rees and one of the Greenleaf daughters respectively
alleged that W.R. sexually abused her. Spokane authorities currently investigate the
allegations, but the State has filed no criminal charges against W.R .. Since some of the
purported abuse of Karen allegedly occurred in Oregon, Oregon authorities also currently
investigate the charges. As of the May 2014 trial in this dependency proceeding, Karen
lived in Spokane's Sally's Home and Cathy and Georgia resided together in foster care.
Amanda Plumb, the State social worker, testified at trial that Karen, Cathy, and
Georgia currently fare well. The three encounter no medical problems. According to
Plumb, Karen Rees is a very sweet, happy, and bright girl, who has overcome adversity.
Cathy and Georgia are also happy, and they perform well academically and
developmentally.
According to Amanda Plumb, Karen, despite her happiness, exhibits behavioral
issues. Plumb opined that Karen "may" have reactive attachment disorder in that she
attaches quickly to others. Karen occasionally expresses rage, and she bangs her head
against the wall. Plumb declared that Karen needs constant attention.
Amanda Plumb testified that Karen reports nightmares. Karen fears that her father
will kidnap and punish her for reporting sexual abuse. She is anxious when she rides on
6
No. 32765-5-II1 Cons. wI 32776-I-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
the Spokane street where she lived with her father and Alicia Huante. Plumb hinted that
Karen suffers from posttraumatic stress disorder, but Plumb did not provide any
background to qualify her for diagnosing the disorder. Plumb declared that a caretaker of
Cathy and Georgia reported that both lasses are afraid of "everything, bugs, outdoors,
trees, everything." CP at 169.
Amanda Plumb testified that T.T. has not agreed to engage in any services with
the State. Plumb did not identify what, if any, services the State offered to T.T. T.T.
called Plumb to inform her that Karen's glasses broke. T.T. advocated for new glasses
for her daughter.
During trial, Amanda Plumb recommended denial of placement at this time of
Karen, Cathy and Georgia with T.T. Plumb opined that raising older girls differs from
raising one and three year old boys. According to Plumb, the girls were repeatedly
traumatized in T.T.'s care. Plumb did not provide details of any of the purported trauma.
Remember that Nevada authorities concluded that Karen had not been sexually abused.
Amanda Plumb testified that the Rees daughters reported to her fear of Mark
Gregory, the purported sexual abuser of Karen. Plumb provided no testimony that Mark
would have contact with the girls ifplaced with T.T. Plumb declared: "from what I've
gathered [Andrew] has visits with him [Mark.]" CP at 165.
Amanda Plumb conveyed concern about T.T.'s ability to care for Karen when
Karen exhibits difficult behavior. Plumb declared:
7
No. 32765-5-III Cons. wi 32776-I-III; 32777-9-III
In re the Welfare ofCa.R; Cl.R and G.R.
my concern is does [T.T.] right now, currently have the ability and is
she suited to take care of those behaviors. I'm not saying she can't but I
wanna make sure before we just place [Karen] who has been traumatized
by several different people back into a situation into the same city ....
What's, what how is that PTSD gonna manifest in [T.T.'s] home and is
T.T. equipped to handle that.
CP at 169. Plumb wants "to make absolute sure with an ICPC [study] that these children
are gonna be moving back to a safe environment." CP at 213.
Amanda Plumb expressed concern to the trial court that placement of Karen,
Cathy and Georgia with T.T. would more than double T.T.'s household. Plumb has not
seen the facility in which T.T. resides. Plumb expressed concern about T.T. relapsing
into drug use. Plumb desires T.T. to undergo training geared toward parenting children
with behavioral issues and to engage in family therapy with the daughters.
Amanda Plumb recognized T. T. ' s recent improvements in parenting skills and the
potential of returning the three daughters to T.T. Nevertheless, Plumb wished Nevada to
perform an ICPC placement study and the family to engage in counseling before a return.
During her trial testimony on the telephone from Las Vegas, T.T. pledged to care
for her two young boys and her three daughters. She does not work outside the home.
Her fiance, Anton Ort, remains available to assist. T.T. noted that all but one of the
children is of school age, so she will receive daily breaks. T. T. wishes to engage the
children in church activities.
T.T. recognizes now that she earlier chose abusive partners, took controlled
8
No. 32765-5-II1 Cons. wi 32776-I-III; 32777-9-II1
In re the Welfare ofCa.R; CI.R and G.R.
substances, and placed her children in unsafe situations. She testified she will not repeat
these errors because of her support system, her drug treatment, and ongoing counseling.
T.T. is pleased with her life during the last two years.
The State ignores trial testimony from Melissa Blodgett, a family services
specialist with the Department of Family Services in Clark County, Nevada. Blodgett
serves as a caseworker who works with parents and children involved with CPS. She has
a bachelor's degree in human resources management and intensive training with the
Department of Family Services. Blodgett served as T.T.'s case worker from August 2013
until January 2014, when Nevada dismissed the dependency action concerning Andrew.
Upon assuming duties with T.T., Melissa Blodgett reviewed T.T. 's Nevada case file. The
file did not confirm a chronic history of drug abuse or neglect of children claimed by the
State of Washington.
According to Melissa Blodgett, T.T. completed intensive outpatient therapy
services. She also completed parenting and domestic violence counseling. T.T. passed
urinalyses during the entire dependency proceeding.
Melissa Blodgett observed T.T. during ten to twelve visits with her two young
boys. T.T. performed well as an attentive parent. Nevada returned the children to T.T.
because of T.T.' s performance and at the recommendation of service providers and
experts, including drug and alcohol treatment experts.
Melissa Blodgett testified that T.T.'s son Andrew has special needs and receives
9
No. 32765-5-II1 Cons. wi 32776-1-III; 32777-9-II1
In re the Welfare ofCa.R; CI.R and G.R.
speech therapy. T.T. diligently safeguards the therapy, and Andrew has progressed far
with his speech development. Despite the dependency ending, Blodgett saw Andrew in
April 2014, and Blodgett understood each word uttered by the boy. Andrew's mental and
physical development has progressed well.
According to Melissa Blodgett, Anton Ort, who lives with T.T. and the two young
boys, has no CPS history. The State of Nevada kept Zeke with Ort, upon Zeke's birth,
despite the dependency pending with T.T. Ort performed well as Zeke's father. He
could assist in parenting Karen, Cathy, and Georgia. Blodgett supports all five children
living in T.T.'s current physical residence. The home has three bedrooms and adequate
space for the children. The home is fully furnished.
According to Melissa Blodgett, Las Vegas' Women's Development Center
continues to provide services to T.T. The center assisted T.T. obtain the housing,
referred her to counseling, and assists her in safety planning, money management, and
daily living skills.
Melissa Blodgett observed that T.T. is motivated to be a parent and is capable of
caring for more than the two boys. Blodgett holds that T.T. could care for older children.
T.T. has shown exemplary parenting skills for her two sons. The two boys are well loved
and cared for. T.T. has a clear understanding of appropriate parenting and demonstrates
it through her behavior and interactions with her children. She continues to engage in
counseling and mental health services. Blodgett exudes confidence in T.T. despite
10
No. 32765-5-III Cons. wi 32776-1-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
Blodgett's knowledge ofT.T.'s CPS history. Blodgett credits the intensive outpatient
substance abuse treatment as changing T.T.
Melissa Blodgett testified that, ifT.T. needed assistance, she knows where to
obtain help. T.T. has been proactive in obtaining assistance for Andrew. T.T. remains in
contact with Blodgett, despite no requirement of contact. T.T. continues to ask Blodgett
for advice and updates Blodgett on the condition of the T.T.'s two young boys.
PROCEEDING
The State of Washington petitioned for a dependency of Karen, Cathy and
Georgia Rees, among others. W.R. agreed to the dependency with regard to his five
children that are the subject of the petition. T.T. requested that her three daughters be
returned to her in Nevada.
After a one-day trial, the court commissioner refused to return Karen, Cathy, and
Georgia to T.T. The commissioner concluded that all three daughters are dependent
within the meaning ofRCW 13.34.030(6)(c).
The court commissioner entered the following findings of fact:
a. Ms. T.T. has done an extraordinary amount of work during her
dependency in Nevada to obtain the return of two of her children, [Zeke]
Orton, age 1, and [Andrew] Gregory, age 3. She successfully completed
the following services: Intensive outpatient treatment, domestic violence
counselling, mental health counselling, parenting classes, and providing
clean UAs. Ms. T.T. has maintained stable housing and has regular contact
with her previously assigned social worker, Melissa Blodgett. Prior to the
Nevada Dependency, she had a significant history of concerning behavior,
including substance abuse and making poor choices in relationships.
11
No. 32765-5-111 Cons. wi 32776-1-111; 32777-9-111
In re the Welfare ofCa.R; Cl.R and G.R.
c. The children have experienced traumatic situations while placed
with their father. [Karen] has disclosed that she has suffered sexual abuse
by her father.
d. The court is concerned that the services provided during mother's
dependency in Nevada were not directed at reunifying her with [Karen,
Cathy, and Georgia] because they were already placed with their father.
Instead, the services were focused on returning the children's half siblings.
e. The trauma that the children experienced in the mother's home
(mother's substance abuse and domestic violence as well as [Karen's]
disclosure of sexual abuse by mother's former partner) has not been
addressed. The allegations of sexual abuse were investigated and did not
result in a founded finding by Nevada CPS. Service of counseling will
address this concern.
f. [Karen] has significant behavioral and emotional issues. She is
just now beginning to deal with these issues in counseling. Her behavior
appears to be parentified. If she were to be placed with her mother today
she would suddenly have new siblings and a new father figure as well as re
adjusting to living with her mother. This could set the family up for failure.
This case needs to progress slowly enough that it won't disrupt the family.
g. [Karen] needs individual and family counseling to process what
she has been through.
i. An ICPC approval is needed so that the State of Nevada will
provide oversight of the family if [Karen] is placed in the home.
j. The court finds that a "C" [RCW 13.34.030(b)(c)] dependency
has been established by a preponderance of the evidence. Ms. T.T. is
currently not capable of parenting [Karen, Cathy, or Georgia] due to the
unresolved issues that led to the dependency in Nevada. Specifically, Ms.
T.T. needs to repair her relationship with the girls, and to demonstrate that
she can attend to their emotional needs including participating in any
family counsel[ ling or other therapy needed. Mother also needs to
continue her commitment to sobriety.
CP at 393-94.
RCW 13 .34.030(6)( c) requires a finding, before entry of a dependency, that the
inability of the parent to care for the child creates circumstances which constitute a
12
No. 32765-5-III Cons. wi 32776-I-III; 32777-9-III
In re the Welfare ofCa.R; Cl.R and G.R.
danger of substantial damage to the child's psychological or physical development. The
court commissioner entered no finding of fact or conclusion of law that placement of any
or all of the three daughters with T.T. would create a danger of substantial harm.
T.T. asked a superior court judge to revise the commissioner's order. The court
denied her revision request. The court adopted the commissioner's findings of fact and
added the following finding:
2. A dependency is an appropriate vehicle to provide a family with
services do [to] remedy issues in the parent/child relationship and to ensure
a smooth transition when adding three additional children to the home. The
finding of dependency was based upon the children's needs, to ensure their
safety and that a move to their mother's home would be done in an
appropriate manner that meets their needs. It will be helpful to this family
to have a social worker in Nevada, assigned through the ICPC process, who
will help to provide services and supports in reintroducing these children to
their mother's home.
CP at 385.
LEGAL ANAL YSIS
Dependency Sufficiency of Evidence
T.T. argues a lack of evidence supports the declaration of her children as State
dependents. RCW 13.34.030(6) lists four conditions under which a court may declare a
child a dependent of the State of Washington. To declare a child dependent, the trial
court must find by a preponderance of evidence that the child meets one of the statutory
definitions. In re Welfare ofKey, 119 Wn.2d 600,612,836 P.2d 200 (1992); In re
13
No. 32765-5-111 Cons. wi 32776-1-111; 32777-9-111
In re the Welfare o/Ca.R; Cl.R and G.R.
Dependency o/CM, 118 Wn. App. 643, 648, 78 P.3d 191 (2003). The State relies on
the definition found in RCW 13.34.030(6)(c).
RCW 13.34.030(6)(c) defines "Dependent child," in part, as any child who:
(c) Has no parent, guardian, or custodian capable of adequately
caring for the child, such that the child is in circumstances which constitute
a danger of substantial damage to the child's psychological or physical
development. ...
The language ofRCW 13.34.030(6)(c) recognizes the inability to judge the capability or
incapability of a parent in the abstract. Simply finding a parent incapable is insufficient
for a dependency. Instead capability must be evaluated in the context of whether the
parenting constitutes a danger of substantial damage to the child's psychological or
physical development. The trial court made no such assessment.
T.T. argues that the State must show her an unfit parent in order to establish a
dependency over her children. Much law supports T.T.'s position. The due process
clause of the state and federal constitution may also demand such a conclusion.
A longstanding tenet of Washington law declares that a parent has the natural and
legal right to the custody and control of her children, unless so completely unfit for such
duties that the welfare of the children themselves imperatively demanded another
disposition of their custody. In re Dependency o/T.J.B., 115 Wn. App. 182, 187,62 P.3d
891 (2002), review granted, judgment rev'd sub nom., In re Dependency o/Brown, 149
Wn.2d 836, 72 P.3d 757 (2003). The legislature recognized this right in RCW 13.34.020,
14
No. 32765-5-III Cons. wi 32776-1-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
in which it declared that "the family unit should remain intact unless a child's right to
conditions of basic nurture, health, or safety is jeopardized."
Both the United States and Washington Constitutions recognize a parent's
fundamental liberty interest in care and custody of her children. U.S. CONST. amends. V,
XIV; WASH. CONST., art. I, § 3; Santosky v. Kramer, 455 U.S. 745,753,102 S. Ct. 1388,
71 L. Ed. 2d 599 (1982); In re Custody ofSmith, 137 Wn.2d 1,27,969 P.2d 21 (1998).
The fundamental liberty interest of natural parents in the care, custody, and management
of their child does not evaporate simply because they have not been model parents.
Santosky v. Kramer, 455 U.S. at 753. The concept that all children are wards of the state
and that the state and its agencies have an unhampered right to determine what is best for
the child belongs to a repudiated political and moral philosophy foreign and repugnant to
American institutions. In re Welfare of Warren, 40 Wn.2d 342,343,243 P.2d 632
(1952). Courts undertake a grave responsibility when they deprive parents of the care,
custody and control of their natural children. In re Welfare ofSego, 82 Wn.2d 736, 738,
513 P.2d 831 (1973).
In Dependency ofT.JB., this court agreed with the appellant that RCW
13.34.030(6)(c) (formerly RCW 13.34.030 (5)(c» requires a finding of current unfitness
as a prerequisite to a finding of dependency. 115 Wn. App. at 188. An existing ability or
capacity of parents to adequately and properly care for their children is inconsistent with
a status of dependency. 115 Wn. App. at 188. In re Dependency ofD.F.-M, 157 Wn.
15
No. 32765-5-III Cons. wi 32776-1-III; 32777-9-111
In re the Welfare 0/ Ca.R; CI.R and G.R.
App. 179, 236 P.3d 961 (2010) implies, but does not hold, that the child of a fit parent
cannot be declared a dependent of the State.
The State emphasizes that a child may be declared dependent despite a fit parent.
The State relies on In re Welfare o/Key, 119 Wn.2d 600,836 P.2d 200 (1992), for this
proposition. Nevertheless, in Key, the Supreme Court held that the fit mother impliedly
consented to the dependency. Upon wishing to return Kirsten home, the mother could
revoke her consent. Moreover, the mother could veto any placement decision made by
the State. More importantly, the trial court denied a dependency on the ground ofRCW
13.34.030(6)(c) because the mother was fit. The trial court granted the dependency on a
unique statutory provision covering developmentally disabled children, the former RCW
13.34.030(2)(d) (1987). Kirsten Key suffered from spastic quadriplegia, cerebral palsy,
respiratory distress, and osteoporosis. Key supports a conclusion that Karen, Cathy and
Georgia are not dependents under RCW 13.34.030(6)(c), because T.T. has not been
declared unfit and that T.T., as mother, holds the right to determine the placement of her
daughters.
The State also relies on In re Dependency o/Schermer, 161 Wn.2d 927, 169 P.3d
452 (2007). Schermer is a matchless decision because the State resisted a dependency,
while both the child and the parents sought the dependency. Henry Schermer suffered
severe mental health issues and engaged in deviant sexual activities. The parents could
not safely care for Henry at home and reasonably feared that Henry might kill them.
16
No. 32765-5-111 Cons. wi 32776-1-111; 32777-9-111
In re the Welfare ofCa.R; Cl.R and G.R.
They could not pay for his placement outside the home without selling their home. The
State argued that a dependency requires a showing of deficiencies in a parent, but not
unfitness. The Supreme Court agreed and noted that unfitness is not an absolute
prerequisite to dependency. Schermer could be read as standing for the proposition that,
except in cases of severe disabilities of the child, unfitness is required. Its holding that
the State must show deficiencies supports T.T. since the trial testimony established no
current deficiency.
Alas, this court need not decide whether the State must prove unfitness ofT.T. or
whether the evidence supports a parental deficiency. The trial court's failure to find
incapability creating a danger of substantial harm alone requires reversal.
In re Dependency of CM, 118 Wn. App. at 651 (2003) illustrates a case in which
a dependency under RCW 13.34.030(6)(c) was supported by sufficient evidence and
findings of fact. The trial court entered a finding of fact that "the child is in
circumstances which constitute a danger of substantial damage to his physical and
psychological development because these special needs are not being addressed and
met." The child's pediatrician testified that the child showed language development
delays and the three-year-old child's memory did not correlate to the average child's
memory at that age. The pediatrician testified that the father provided insufficient
stimulation from activities like talking to the child, reading to him, and other
developmental activities. A therapist testified the father's cognitive problems interfered
17
No. 32765-5-II1 Cons. wi 32776-1-III; 32777-9-II1
In re the Welfare o/Ca.R; CI.R and G.R.
with his ability to implement proper parenting techniques. The therapist echoed the
pediatrician's testimony that the child encountered significant cognitive delays. This
court wrote:
While the record shows that McCracken loves C.M. and does his
best to care for him, there remains substantial evidence that C.M. has
developmental delays that could result in significant psychological damage
if they remain unaddressed. And there is substantial evidence that
McCracken's own mental illness and poor judgment have affected his
ability to address these delays, despite his best intentions and his best
efforts.
In re Dependency o/CM, 118 Wn. App. at 654.
CM highlights what is missing in the present appeaL In addition to the absence
of a finding of substantial harm to any of the Rees daughters, this appeal lacks evidence
to support such a finding. No physician, therapist, or counselor testified to any particular
needs of any of the sisters, let alone the inability ofT.T: to care for the needs. Amanda
Plumb, the State's only witness, without any health care qualifications, speculated that
Karen suffers from posttraumatic stress disorder, but no medical testimony supported
such a diagnosis. Plumb mentioned trauma experienced by the girls in the Nevada home
ofT.T., but provided no details of the trauma, let alone its impact on the girls. Assuming
the purported trauma included sexual abuse of Karen by Mark Gregory, authorities
concluded that the abuse did not occur. Plumb speculated that Gregory may have access
to T.T.'s home, but provided no direct evidence of such. Plumb provided no testimony
that the current care givers for each of the girls could better handle the needs of the girls
18
No. 32765-5-111 Cons. wi 32776-1-111; 32777-9-111
In re the Welfare ofCa.R; Cl.R and G.R.
than their mother T.T. Plumb provided no testimony that T.T. would thwart the
development of her three daughters.
I recognize the need to defer to the trial court's factual decisions. To evaluate a
parent's claim of insufficient evidence of dependency, we determine whether substantial
evidence supports the court's findings of fact and whether the findings support the
conclusions oflaw. In re Dependency ofS.S., 61 Wn. App. 488,504, 814 P.2d 204
(1991). In a dependency proceeding, evidence is substantial if, when viewed in the light
most favorable to the party prevailing below, it is such that a rational trier of fact could
find the fact in question by a preponderance of the evidence. In re Dependency ofCB.,
61 Wn. App. 280,286,810 P.2d 518 (1991). This court is not to weigh the evidence or
the credibility of witnesses. In re Welfare ofSego, 82 Wn.2d 736, 739-40 (1973).
Nevertheless, the trial court below omitted a critical finding that any incapability ofT.T.
created circumstances constituting a danger of substantial damage to any child's mental
or physical development.
I also recognize that this court can imply a finding by the lower court. The
termination of parental rights must be based, in part, on an explicit or implicit finding of
current parental unfitness. In re Welfare ofA.B., 168 Wn.2d 908,920,232 P.3d 1104
(2010). If the finding is not explicit, the court may imply the finding if the record clearly
shows that the trial court found the parent currently unfit to parent. Welfare ofA.B., at
921; In re Welfare ofA.G., 160 Wn. App. 841, 843,248 P.3d 611 (2011). In Welfare of
19
No. 32765-5-II1 Cons. wi 32776-1-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
A.G., this court reversed a termination of parental rights. We refused to imply a finding
of parental unfitness despite evidence of domestic violence impacting the health of the
children and the parent's chemical dependency.
Implying a finding is particularly improper when the evidence does not support the
finding. The trial court omitted the finding for good reason. The trial testimony included
no evidence that T.T. 's care for Karen, Cathy and Georgia would lead to substantial
damage to their respective psychological or physical developments.
The trial evidence possesses other problems. When testifying about T.T., Amanda
Plumb based most testimony on Nevada CPS records. In short, the testimony was
hearsay and could have included multiple levels of hearsay. The rules of evidence apply
to a dependency hearing. RCW 13.34.110(1); ER 1101(c)(3); In re Dependency of
K.NJ, 171 Wn.2d 568, 579, 257 P.3d 522 (2011). The Nevada records are not even
available for this court's review to determine if Plumb accurately portrayed their
contents.
In In re Welfare ofXT., 174 Wn. App. 733, 300 P.3d 824 (2013), this court
reversed a finding of dependency on the ground that the Department of Social and Health
Services social worker's testimony was based on her review of the department's file.
This court observed that the trial court's discretion does not permit juvenile courts to
disregard evidence rules, especially when the deprivation of parental rights is involved.
The court held that parents should not be deprived of parental rights on hearsay, a form of
20
;
No. 32765-5-II1 Cons. wI 32776-I-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
unsworn testimony. A social worker may refer to a written report to show the basis of the
worker's opinion, but written reports are not substantive evidence.
T.T. objected to only details of alleged abuse when Amanda Plumb testified based
on hearsay. The trial court allowed the testimony and could allow all hearsay testimony
but only for the limited purpose of supporting Amanda Plumb's opinion. Nevertheless,
the testimony could not be used as substantive evidence and be the basis for the
dependency ruling. Stale hearsay is an unfortunate foundation to base a finding of
dependency.
The trial court is the judge of the credibility of witnesses. Nevertheless, the lower
court never discounted Melissa Blodgett as a witness, who, unlike Amanda Plumb, saw
T.T. and directly observed her parenting skills. Blodgett's unimpeached testimony
conclusively established the ability ofT.T. to capably parent Karen, Cathy and Georgia.
This court's majority pretends that Melissa Blodgett never testified.
The State emphasizes that Karen, Cathy and Georgia have special needs that T.T.
is not yet trained to meet. Nevertheless, the evidence only supports Karen holding
special needs and such evidence relies on hearsay. Amanda Plumb testified that Karen
"may" suffer from posttraumatic stress disorder. Plumb further opined that Karen "may"
have reactive attachment disorder in that she attaches quickly to others. Even if Plumb
was an expert who could diagnose a disorder, the testimony is worthless because the
opinion is based on a possibility not a probability. Once a court is satisfied with a
21
No. 32765-5-111 Cons. wi 32776-1-111; 32777-9-111
In re the Welfare ofCa.R; CI.R and G.R.
witness' expertise, the test for admissibility is whether the expert can express an opinion
based on reasonable probability rather than mere conjecture or speculation. Davidson v.
Mun. ofMetro. Seattle, 43 Wn. App. 569, 571,719 P.2d 569 (1986).
Trial evidence also fails to identify how a parent should treat Karen's needs, why
T.T. is deficient in meeting the needs, what training T.T. needs to meet the needs and the
length of the training, and whether someone else meets those needs now. Many parents
are initially unfit to meet the needs of special children, but those parents learn with
experience. The State does not remove children born with special needs from parents
until the parents have the opportunity, but fail, to learn to meet the needs.
The State mentions Cathy's and Georgia's fear of the outdoors, trees, and bugs.
The testimony comes from a statement made by a caretaker to Amanda Plumb. Thus the
testimony is also hearsay. Counsel and the trier of fact were unable to explore the precise
fears of the girls. Many children are frightened of bugs and swaying trees in the dark of
night. No evidence suggests that such a fear creates special needs.
Amanda Plumb expressed concern about the size ofT.T.'s Las Vegas home. In In
re Dependency ofD.F.-M, 157 Wn. App. at 193 (2010), a social worker complained that
the father's house had too few bedrooms. This court emphasized that courts, not
administrative agencies or individual social workers, are the ultimate evaluators of a
parent's ability to care for his child. The court noted that many children have been
happily raised without bedrooms of their own.
22
No. 32765-5-III Cons. wI 32776-1-III; 32777-9-III
In re the Welfare oICa.R,· CI.R and G.R.
Amanda Plumb registered alarm about Karen, Cathy and Georgia encountering
Mark Gregory at T.T.'s home. On appeal, the State characterizes the potential for the
girls seeing Gregory as the most alarming aspect to returning Karen, Cathy and Georgia
to their mother. The State even falsely claims that Gregory subjected all three girls to
sexual abuse. This testimony is based solely on hearsay. Only Karen alleged sexual
abuse and authorities concluded the allegation was false.
Plumb declared: "from what I've gathered, [Andrew] has visits with him [Mark.]"
CP at 165. Thus, this evidence of any encounter between Mark Gregory and Karen,
Cathy and Georgia is based on more hearsay. The testimony does not even establish the
possibility ofa visit between Andrew and his father at the T.T.'s home. Assuming any
visits, the visits could be at Gregory's home.
Even assuming an encounter between Mark Gregory and one or more of the Rees
daughters, such is not grounds for creating a dependency. In In re Dependency 01
MS.D., 144 Wn. App. 468, 182 P.3d 978 (2008), the trial court ordered a dependency
based on the State's concern that the mother failed to protect her daughter from her
boyfriend, Seth Poirer. Poirer had a ten-year-old conviction for assault and criminal
mistreatment of his two-month-old baby. The mother's brother also reported to police
that Poirer sexually abused M.S.D. Nevertheless, a physician, who examined M.S.D.,
ruled out sexual abuse. This court reversed the dependency, even after recognizing the
appellate principle that this court must affirm the trial court if substantial evidence
23
No. 32765-5-III Cons. wi 32776-I-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
supports the findings of fact. This court observed that a poor choice of a partner is not a
reason for the State to interfere in the life of a family. In this appeal, authorities
concluded that Mark Gregory did not abuse Karen.
In short, Amanda Plumb frets about an immediate return of Karen, Cathy and
Georgia to T.T., but her testimony lacked evidence ofTT. being an incapable parent or
that placement with T.T would cause substantial damage to any of the three daughters.
A social worker's worries should not control dependency law. Plumb declared that she
wants "to make absolute sure with an ICPC [study] that these children are gonna be
moving back to a safe environment." CP at 213. Other parents are not subjected to an
exacting standard of absolute certainty that the home is a safe environment. T.T. does not
deserve this standard applied to her.
The court commissioner and superior court judge failed to analyze the dependency
of the other daughters, Cathy and Georgia, separate from the dependency of Karen.
Scant, if any, evidence supported a conclusion that TT. is incapable of caring for her
daughter, Karen. Even less evidence supports a conclusion that T.T is incapable of
caring for the two younger girls, let alone care by T.T. would substantially damage the
girls' development.
Interstate Compact on Placement of Children
To excuse the denial ofT.T.'s rights to her children, the State, pursuant to the
Interstate Compact on Placement of Children, sought an order directing Nevada to
24
No. 32765-5-III Cons. wi 32776-1-III; 32777-9-II1
In re the Welfare ofCa.R,· CI.R and G.R.
investigate the home ofT.T. for later placement of Karen, Cathy and Georgia in the
home. Such an order violates the law because the order directs an investigation of a
parent's home contrary to the terms of the ICPC.
In In re Dependency ofD.F.-M, 157 Wn. App. at 190-91 (2010), this court
addressed whether the ICPC applies to parental placements. We held in the negative.
Alyce Fabian-Miller bore D.F.-M. Six months later a Washington court entered an order
declaring Rico Verner as D.F.-M.'s father. Three years later, the State took D.F.-M. into
protective custody because of neglect, domestic violence, and drug use by Fabian-Miller.
Thereafter, Verner learned of the dependency and demanded dismissal of the dependency
and placement of the child with him at his home in Oklahoma. The State conceded it
lacked evidence that Verner was an unfit parent. Nevertheless, the State did not wish to
allow placement ofD.F.-M. with Verner until Verner's home state agreed to placement
under the ICPC. The trial court ordered D.F.-M. placed with Verner and Fabian-Miller
appealed. The State joined with Fabian-Miller in arguing the provisions of the ICPC
should be fulfilled before placement with Verner. This court affirmed immediate
placement with Verner in part on the ground that the ICPC did not apply to investigating
the capability of a parent.
A group of state social service administrators drafted the Interstate Compact on
Placement of Children in the 1950s to address the problem of providing services to
children placed across state lines. The compact seeks to foster cooperation and
25
No. 32765-5-II1 Cons. wi 32776-I-III; 32777-9-II1
In re the Welfare ofCa.R; CI.R and G.R.
infonnation sharing among member states so as to ensure that children requiring
placement receive the maximum opportunity to be placed in a suitable environment with
a desirable degree and type of care. All fifty states, the District of Columbia, and the
United States Virgin Islands have adopted the ICPC. Washington enacted the compact in
1971. RCW 26.34.010.
Under article III of the ICPC, the scope of the compact is limited to placements in
foster care or preliminary to an adoption. Article III also sets out the requirements for a
valid placement. No sending agency shall send to another state any child for placement
in foster care or as a preliminary to a possible adoption unless the sending agency
complies with the ICPC, which requires the sending agency to notifY the receiving state
of the intended placement and to provide such documents as may be necessary to carry
out the ICPC's purposes. The placement may not occur until the receiving state notifies
the sending agency in writing that the proposed placement does not appear to be contrary
to the interests of the child.
The ICPC does not define "foster care." In D.F.-M, we noted that the plain,
ordinary meaning of the term is the placement of a child in a substitute home, one other
than that of the child's parents. Under article II(d) of the ICPC, "placement" means "the
arrangement for the care of a child in a family free or boarding home or in a child-caring
agency or institution ... and any hospital or other medical facility." In D.F.-M, we
further observed that, although "family free" or "boarding" homes are not defined in the
26
No. 32765-5-III Cons. wi 32776-I-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
compact, these terms refer to nonparental residential arrangements that provide children
with the care usually received from parents. Unlike a boarding home, the care provided
by a family free home is free of charge. Based on these observations, we held that the
provisions of the ICPC could not be employed to investigate a parent's home before
placement of a child with a parent. The compact applies only to foster care or placements
preliminary to possible adoption, neither of which is a parental placement. Because this
court ruled based on construction of the compact, we did not address Rico Verner's
alternative argument that application of the ICPC to parental placements violates the due
process clause.
The State seeks to distinguish D.F.-M on the ground that the Oklahoma father
actually saw the children, whereas T.T. has not seen her daughters for three years. No
reading of D.F.-M supports such a distinction being valid. We did not leave any door
open to permitting the use of the ICPC in parental placement under other circumstances.
The terms of the ICPC admit no exception to its limitation against applying to a parental
placement.
The majority writes that it lacks a record as to the State of Nevada's ICPC
involvement so T.T.'s objection to the application of the compact is premature. The
majority's comment fails to recognize that D.F.-M holds that Nevada is to have no ICPC
involvement. The extent or record of this involvement is immaterial. The trial court
ordered involvement contrary to the ICPC that does not apply to parental placements.
27
No. 32765-5-III Cons. wi 32776-I-III; 32777-9-III
In re the Welfare ofCa.R; CI.R and G.R.
The majority also writes that any prohibition of employing ICPC for a parental
placement does not eliminate cooperation between the two states as the parties work
toward reunification. The majority does not explain what cooperation is needed or
permissible and why two states would cooperate outside their authority to act. Again, the
trial court ordered an ICPC placement review in Nevada contrary to the interstate
compact, state statute, and this court's decision. A court's sanctioning of extralegal and
unauthorized conduct by a state agency against the will of the legislature creates a
dangerous precedence. Therefore, I respectfully dissent.
28
|
475 F.Supp.2d 1092 (2007)
Lorenzo E. RUBIO, as next friend for Z.R., a minor, Plaintiff,
v.
TURNER UNIFIED SCHOOL DISTRICT NO. 202 et al., Defendants.
Civil Action No. 05-2522-KHV.
United States District Court, D. Kansas.
February 9, 2007.
*1093 *1094 *1095 Chuck N. Chionuma, Lyra L. Johnson, Chionuma & Associates, P.C., Kansas City, MO, for Plaintiff.
Gregory P. Goheen, McAnany, Van Cleave & Phillips, P.A., Kansas City, KS, for Defendants.
MEMORANDUM AND ORDER
VRATIL, District Judge.
Lorenzo E. Rubio, as next friend and father of Z.R., a minor, filed suit against the Turner Unified School District No. 202, the district superintendent, the Turner Board of Education, its members, and the principal and several teachers at Endeavor Alternative School. Plaintiff alleges that by prohibiting students from speaking Spanish at Endeavor Alternative School, defendants violated Z.R.'s rights under 42 U.S.C. § 1983 and Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq.[1] On September 28, 2006, the Court sustained part of defendants' motion to dismiss, but granted plaintiff leave to amend his complaint on or before October 12, 2006. See Memorandum And Order (Doc. # 45). The Court held that in the amended complaint, plaintiff could assert (1) a claim for national origin discrimination against the District under Title VI, and (2) a claim for retaliation against the District under Title VI. See id. On October 12, 2006, plaintiff filed an amended complaint which asserted these two claims. See Amended Complaint (Doc. # 46). Before defendant answered or otherwise responded to that complaint, but after defendant notified plaintiff that the amended complaint continued to demand punitive damages which the Court had dismissed plaintiff filed a sixth complaint. See "Amended" Amended Complaint (Doc. *1096 # 48) filed October 26, 2006. In the sixth complaint, plaintiff asserted a claim for violation of Z.R.'s procedural due process rights under state law and included allegations which related to claims which the Court has dismissed. This matter is before the Court on Defendant's Motion To Strike And Dismiss (Doc. # 49) filed November 9, 2006. For reasons stated below, the Court sustains defendant's motion in part.
Factual Background
Plaintiffs amended complaint (Doc. # 48) alleges as follows:
Plaintiff is the father and next friend for Z.R., a minor who attends high school at Endeavor Alternative School ("Endeavor") in the Turner Unified School District No. 202 (the "District"). Bobby Allen is the district superintendent. Jennifer Watts is the principal and Susan Serzyski is a teacher at Endeavor.
During the 2005-06 school year, Watts and Serzyski prohibited Z.R. and others of Hispanic origin from speaking Spanish on school premises. See "Amended" Amended Complaint (Doc. # 48) 1129. During lunch hour, on November 28, 2005, Watts told Z.R. not to speak Spanish. See id., ¶ 33. One school period later, Serzyski ordered Z.R. not to speak Spanish in the hallway and told him to go to the principal's office. See id., ¶¶ 35-36. Serzyski pushed an intercom in front of other students and told Watts over the public address system that she was sending Z.R. to the office so that he could speak Spanish to her. See id., ¶ 38. Watts then told Z.R. that he was not in Mexico and that he should speak only English on the school premises. See id., ¶ 40. Watts immediately suspended Z.R. and did not inform him of his right to appeal the suspension under Kansas law. See id., ¶¶ 41-43. Watts had authority to end or change the "No Spanish" policy at Endeavor. See id., ¶¶ 44, 60.
Later that day, plaintiff called Watts who told him that "We speak English here. This is not Mexico." See id., ¶ Plaintiff asked Watts if her position on Spanish reflected a District policy and she stated that she could not speak for other buildings, but that in her building "we only speak English." Id., ¶ 50. Plaintiff asked Watts to state the school's position in writing and Watts gave him a document which stated that Z.R. could not speak Spanish on school premises and that he was suspended for doing so.[2]See id., ¶¶ 51-53.
The following morning, November 29, 2005, plaintiff went to the superintendent's office and left a copy of Watts' written statement that Z.R. was not to speak Spanish on the school premises. See id., ¶ 55. Allen later contacted plaintiff and asked whether he had retained a copy of Watts' written statement. See id., ¶¶ 56-57.
Since Z.R. returned to school, Watts and teachers have subjected his school work to razor thin scrutiny. See id., ¶ 59. Watts and teachers have also disciplined Z.R. because of this lawsuit. See id. On one occasion, four teachers took Z.R. into an empty room and threatened him. See id.
Watts had actual notice that Z.R. was subject to harassment and discrimination on the basis of race and national origin as a result of the "No Spanish" rule, but she failed to take immediate and appropriate corrective actions to end the harassment and discrimination.
On December 12, 2005, plaintiff filed suit against the District, Allen, Watts, Serzyski, the Turner Board of Education, the individual members of the Turner Board of Education, and Does 1 through 5, unknown teachers at Endeavor. On September 28, 2006, the Court sustained defendant's *1097 motion to dismiss in part and granted plaintiff leave to file an amended complaint on two specific claims: (1) a claim for national origin discrimination against the District under Title VI, and (2) a claim for retaliation against the District under Title VI. See Memorandum And Order (Doc. # 45) at 20. Defendant asks the Court to strike or dismiss plaintiff's amended complaint.[3]
Analysis
Defendant asks the Court to strike or dismiss plaintiff's amended complaint of October 26, 2006. Defendant assumes that plaintiff could file the amended complaint without leave of court. Rule 15(a), Fed.R.Civ.P., provides that "[a] party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served." (emphasis added). Because plaintiff had already amended his complaint on four prior occasions, he could not do so again without leave of court or defendant's written consent. Plaintiff offers no explanation why he did not seek leave to file a sixth complaint[4] Because plaintiff did not seek *1098 leave to file the amended complaint of October 26, 2006, the Court ordinarily would strike the entire complaint. Because the deadline to seek leave to file an amended complaint has passed, see Scheduling Order (Doc. # 51) filed November 29, 2006 (deadline for motions to amend January 10, 2007), the Court will liberally construe plaintiffs response to defendant's motion to strike and dismiss as a motion for leave to file the amended complaint of October 26, 2006. In addition, because defendant did not object to the fact that plaintiff filed the amended complaint on October 26, 2006, the Court will sustain plaintiffs motion to amend and consider on the merits defendant's motion to strike and dismiss.
I. Title VI Discrimination Claim (Count I)
Title VI is a general prohibition against discrimination by federally funded programs. See id. at 1302. The District argues that plaintiff does not state a claim under Title VI because he has not pled that a District official, other than Watts, had actual notice of the alleged discrimination.
Section 601 of Title VI provides that "[n]o person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance." 42 U.S.C. § 2000d. Private individuals may sue to enforce Section 601 of Title VI and obtain both injunctive relief and damages. Alexander v. Sandoval, 532 U.S. 275, 279, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). Title VI further states that no action shall be taken until the department or agency concerned has advised the "appropriate person" of the failure to comply with the requirement and has determined that compliance cannot be secured by voluntary means. 42 U.S.C. § 2000d-1. Under an identical provision in Title IX, the Supreme Court has held that unless an "appropriate person" has actual knowledge of the alleged discrimination and fails to adequately respond to such discrimination, a damage remedy will not lie. See Gebser v. Lago Vista Indep. Sch. Dist., 524 U.S. 274, 290, 118 S.Ct. 1989, 141 L.Ed.2d 277 (1998).[5]
Here, the District can be liable for the acts of teachers at Endeavor if Watts had actual notice of the conduct and did not take corrective action to end the alleged discrimination. As the Court explained in a prior order, Gebser implied that a school district can be liable where a principal knows of a teacher's misconduct. See Memorandum And Order (Doc. # 45) at 16-17; Gebser, 524 U.S. at 291, 118 S.Ct. 1989 (information insufficient to alert principal to possibility of teacher's sexual relationship with student). Plaintiff alleges that as principal, Watts had actual notice of the teachers' misconduct. See *1099 "Amended" Amended Complaint (Doc. # 48) ¶ 61. Because plaintiff alleges that Watts also had authority to take corrective action to end the alleged discrimination, see id., ¶¶ 44, 60, she qualifies as an "appropriate person" for purposes of liability on the District under Title VI. See Gebser, 524 U.S. at 291, 118 S.Ct. 1989; Bostic v. Smyrna Sch. Dist., 418 F.3d 355, 360 (3d Cir.2005) (school principal entrusted with responsibility and authority normally associated with that position ordinarily will be "appropriate person" under Title IX).
As to acts by Watts, however, plaintiff has not pled that an "appropriate person" other than Watts had actual notice of her conduct.[6] Title VI contains no reference to an institution's "agents" and therefore does not expressly call for application of agency principles. Gebser, 524 U.S. at 283, 118 S.Ct. 1989 (analyzing Title IX); cf. Salters v. Salt Lake County, 1 F.3d 1122, 1125 (10th Cir.1993) (under Title VII, employer may be liable for supervisor's conduct even absent knowledge of such conduct). Because a school district's liability under Title VI rests on actual notice principles, "the knowledge of the wrongdoer h[er]self is not pertinent to the analysis." Gebser, 524 U.S. at 291, 118 S.Ct. 1989 (citing Restatement (Second) of Agency § 280 (1957)); id. at 287-88, 118 S.Ct. 1989 (by accepting federal funds, school board agreed not to discriminate; unlikely that Congress envisioned liability where recipient unaware of discrimination) (citing Rosa H. v. San Elizario Indep. Sch. Dist., 106 F.3d 648, 654 (5th Cir.1997)). Plaintiff does not dispute that an alleged wrongdoer's knowledge of discrimination is insufficient to constitute actual notice to the District.[7]See id.; see also Davis v. Monroe County Bd. of Educ., 526 U.S. 629, 643, 119 S.Ct. 1661, 143 L.Ed.2d 839 (1999) (high standard imposed in Gebser sought to eliminate risk that recipient would be liable in damages not for its own official decision but for employee's independent actions) (citing Gebser, 524 U.S. at 290-91, 118 S.Ct. 1989); Gebser, 524 U.S. at 285, 118 S.Ct. 1989 (purposes of Title IX would be frustrated if damage remedy lies against school district for teacher's sexual harassment of student based upon principles of respondeat superior or constructive notice, i.e. absent actual notice to school *1100 district official). Because the amended complaint (Doc. # 48) only pleads notice of the alleged discrimination to Watts, the Court sustains defendant's motion to dismiss Count I to the extent that it is based on acts of discrimination by Watts.
II. Title VI Retaliation Claim (Count II)
As to plaintiff's retaliation claim under Title VI, the District again argues that plaintiff does not state a claim because he has not pled that a District official other than Watts had actual notice of the alleged retaliation. Plaintiff has stated a claim for the retaliatory acts by teachers at Endeavor by alleging that (1) Watts knew of the retaliatory conduct of teachers at Endeavor, (2) Watts had authority to institute corrective measures and (3) Watts acted intentionally or with deliberate indifference to the retaliation. See "Amended" Amended Complaint (Doc. # 48) ¶ 83. As to acts of retaliation by Watts, however, plaintiff has not pled actual notice to an "appropriate person." Accordingly, the Court sustains defendant's motion to dismiss Count II to the extent that it is based on acts of retaliation by Watts.
III. Denial Of Due Process Under Kansas Law (Count III)
Plaintiff alleges that the District did not advise Z.R. or his family of his right to appeal the suspension in violation of K.S.A. § 72-8902. Defendant argues that the Court should dismiss this claim because plaintiff has not pled compliance with the statutory conditions precedent for suit against a municipality under K.S.A. § 12-105b(d).[8] The notice requirements of K.S.A. § 12-105b(d) are a condition precedent to bringing a tort claim against a municipality and must be pled in compliance with Rule 9(c), Fed.R.Civ.P. See Tucking v. Bd. of Comm'rs of Jefferson County, Kan., 14 Kan.App.2d 442, 445, 796 P.2d 1055, 1057-58 (1990); Reindl v. City of Leavenworth, 361 F.Supp.2d 1294, 1301 (D.Kan.2005); Miller v. Brungardt, 904 F.Supp. 1215, 1217 (D.Kan.1995); Unified Sch. Dist. No. 457, Finney County, Kan. v. Phifer, 729 F.Supp. 1298, 1306 (D.Kan. 1990); see also Fed.R.Civ.P. 9(c) (in pleading performance or occurrence of conditions precedent, it is sufficient to aver generally that all conditions precedent have been performed or have occurred). K.S.A. § 12-105a(a) (1991) defines "municipality" to include school districts. See Miller, 904 F.Supp. at 1217. Because plaintiff has not pled compliance with the notice requirements of K.S.A. § 12-105b(d), the Court dismisses plaintiffs state law procedural due process claim (Count III).
IV. Extraneous References To Dismissed Claims
Defendant argues that the Court should strike all references in the amended complaint to the Constitution and Section 1983, because the Court has dismissed any such claims.[9]See "Amended" Amended Complaint (Doc. # 48), Overview at 1-2; ¶¶ 3, 7, 65, 68, 75, 84; at 16, ad damnum clause ¶ d. Rule 12(f) provides that "the court may order stricken from *1101 any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Striking material from a pleading is a generally disfavored remedy, Nwakpuda v. Falley's, Inc., 14 F.Supp.2d 1213, 1215 (D.Kan.1998), and the Court should decline to do so unless the allegations (1) have no possible relation to the controversy, and (2) may prejudice one of the parties, Sunlight Saunas, Inc. v. Sundance Sauna, Inc., 427 F.Supp.2d 1022, 1029 (D.Kan.2006). Any doubt as to the utility of the material to be stricken should be resolved against the motion to strike. Nwakpuda, 14 F.Supp.2d at 1215. The purpose of Rule 12(f) is to minimize delay, prejudice and confusion by narrowing the issues for discovery and trial. Stubbs v. McDonald's Corp., 224 F.R.D. 668, 676 (D.Kan.2004). Plaintiff has not specifically responded to defendant's motion to strike all references to claims under the Constitution and Section 1983 or all requests for a declaration that defendant did not adequately train, supervise and monitor employees about constitutional and civil rights. In addition, defendant's motion is well taken in this regard. Therefore the Court strikes portions of the "Amended" Amended Complaint (Doc. # 48) as follows:
1. the words "Constitution and" on page 1, line 10;
2. the words "Constitution and" on page 2, line 4;
3. the words "Constitution and" on page 2, line 11;
4. the words "Constitution and" on page 3, line 10;
5. Paragraphs 65 and 75 in their entirety;
6. the words "and Constitution" on page 11, line 2;
7. "and 42 U.S.C. § 1983" on page 13, line 2; and
8. Paragraph e on page 16.
V. Sanctions
As part of its motion to strike and dismiss, the District asks the Court to impose sanctions under Rule 11, Fed. R.Civ.P., because in light of the Court's prior rulings, plaintiff did not have a good faith basis to assert the claims in the amended complaint of October 26, 2006. Rule 11 sets forth certain procedural requirements for parties seeking sanctions. See Fed.R.Civ.P. 11(c)(1)(A). The moving party must submit the motion for sanctions separately from other motions or requests and specifically describe the conduct which allegedly violates Rule 11(b). See Fed.R.Civ.P. 11(c)(1)(A). The moving party must serve the motion on the opposing party. See id. If the offending party does not withdraw the challenged document or conduct after 21 days, the moving party may file its motion for sanctions with the court. See id. The plain language of the rule indicates that this notice and opportunity prior to filing is mandatory. AeroTech, Inc. v. Estes, 110 F.3d 1523, 1529 (10th Cir.1997) (citing Elliott v. Tilton, 64 F.3d 213, 216 (5th Cir.1995)). These provisions are intended to provide a "safe harbor" against Rule 11 motions, so that a party will not be subject to sanctions unless, after motion, it refuses to withdraw a frivolous position or acknowledge that it does not currently have evidence to support a specified allegation. Advisory Committee Notes to 1993 Amendments, Fed.R.Civ.P. 11. Because defendant did not file its motion for sanctions as a separate motion and has provided no evidence that it complied with the Rule 11 safe harbor provision,[10] the Court *1102 overrules defendant's request.[11]
IT IS THEREFORE ORDERED that Plaintiffs Suggestions In Opposition To Defendant's Motion To Strike And Dismiss (Doc. # 53) filed December 1, 2006, which the Court construes as a motion for leave to file the amended complaint (Doc. # 48) of October 24, 2006, be and hereby is SUSTAINED.
IT IS FURTHER ORDERED that Defendant's Motion To Strike And Dismiss (Doc. # 49) filed November 9, 2006 be and hereby is SUSTAINED in part. The Court dismisses Count I to the extent that it is based on acts of discrimination by Watts, Count II to the extent that it is based on retaliation by Watts; and Count III in its entirety. The Court strikes portions of the "Amended" Amended Complaint (Doc. # 48) as follows:
1. the words "Constitution and" on page 1, line 10;
2. the words "Constitution and" on page 2, line 4;
3. the words "Constitution and" on page 2, line 11;
4. the words "Constitution and" on page 3, line 10;
5. Paragraphs 65 and 75 in their entirety;
6. the words "and Constitution" on page 11, line 2;
7. "and 42 U.S.C. § 1983" on page 13, line 2; and
8. Paragraph e on page 16.
Defendant's motion is otherwise overruled.
NOTES
[1] In plaintiff's first three complaints (Docs. # 1, 3 and 5) filed December 12, 13 and 16, 2005, plaintiff also asserted claims for race and national origin discrimination under the Kansas Act Against Discrimination (Count III), civil conspiracy under Kansas common law (Count IV) and violation of Z.R.'s procedural due process rights under K.S.A. § 72-8902 (Count V). In response to defendants' motion to dismiss, plaintiff conceded that his state law claims were premature because he did not give notice of the claims under K.S.A. § 12-105(b). See Plaintiff's Memorandum In Opposition To Defendants' Motion To Dismiss (Doc. # 27) filed February 28, 2006 at 4-5. Accordingly, the Court sustained defendants' motion to dismiss Counts III, IV and V. See Memorandum And Order (Doc. # 45) filed September 28, 2006. Shortly after defendants filed that motion to dismiss, plaintiff filed a fourth complaint. See Amended Complaint (February 28, 2006) (Doc. # 29). The Court sustained defendants' motion to strike that complaint. See Memorandum And Order (Doc. # 45).
[2] The complaint does not specify the length of the suspension.
[3] Defendant again attempts to introduce facts beyond the complaint, including the District's equal opportunity and nondiscrimination policies and the fact that the District has no policy which prohibits students from speaking Spanish in schools. See Defendant's Memorandum in Support Of Motion To Strike And Dismiss (Doc. # 50) at 7 n. 2. Generally, a court may not look beyond the four corners of the complaint when deciding a Rule 12(b)(6) motion to dismiss. Dean Witter Reynolds, Inc. v. Howsam, 261 F.3d 956, 961 (10th Cir. 2001), rev'd on other grounds, 534 U.S. 1161, 122 S.Ct. 1171, 152 L.Ed.2d 115 (2002); Lassiter v. Topeka Unified Sch. Dist. No. 501, 347 F.Supp.2d 1033, 1040 (D.Kan.2004). When a movant presents matters outside the pleadings, the Court has discretion to convert a Rule 12(b)(6) motion into one for summary judgment. See Lybrook v. Members of the Farmington Mun. Sch. Bd. of Educ., 232 F.3d 1334, 1341-42 (10th Cir.2000). Because the parties have not completed discovery and defendant has not set forth the pertinent facts in compliance with D. Kan. Rule 56. 1, the Court declines to consider evidence outside the pleadings. Accordingly, the Court will treat defendant's motion as one to dismiss under Rule 12(b)(6).
Defendant argues that in deciding a motion to dismiss, the Court can take judicial notice of public records. See Reply In Support Of Defendants' Motion To Dismiss (Doc. # 42) filed March 23, 2006 at 2 (citing Stahl v. U.S. Dep't Of Agric., 327 F.3d 697 (8th Cir.2003)). On a motion to dismiss, the Court may consider (1) indisputably authentic copies of documents if plaintiff referred to them in the complaint and the documents are central to the claims; and (2) facts which are subject to judicial notice. See GFF Corp. v. Associated Wholesale Grocers, 130 F.3d 1381, 1384 (10th Cir.1997) (if document referred to in complaint but not attached to it, and is central to plaintiff's claim, defendant may submit indisputably authentic copy to be considered on motion to dismiss); Fed.R.Evid. 201(b) (judicially noticed fact must be one not subject to reasonable dispute in that it is either generally known within territorial jurisdiction of trial court or capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned). Defendant's extrinsic evidence does not fall into either category. Cf. Balfour v. Medicalodges, Inc., No. 05-2086 KHV, 2006 WL 314521, at *5 n. 4 (D.Kan. Feb.9, 2006) (judicial notice that 2004 was leap year); Jones v. Wildgen, 320 F.Supp.2d 1116 (D.Kan.2004) (judicial notice of portions of City Code in action challenging constitutionality of municipal ordinances); Grogan v. O'Neil, 292 F.Supp.2d 1282, 1292 (D.Kan.2003) (judicial notice of corporate exculpatory charter provision where defendant presented certified copy on file with secretary of state; articles of incorporation attached to defendants' motion to dismiss not considered).
[4] Plaintiff may have been misled by defense counsel's letter which erroneously suggested that under Rule 15(a), plaintiff could amend his amended complaint once without leave of court. See Exhibit C to Defendant's Motion To Strike And Dismiss (Doc. # 49). Nothing in Rule 15(a) suggests that a party can amend an amended pleading as a matter of course. See Fleming v. Rhymer, 79 F.3d 1150, 1996 WL 117018, at *1 (7th Cir.1996) (having already amended his complaint, plaintiff could amend again only by leave of court or written consent of adverse party); Glaros v. Perse, 628 F.2d 679, 686 (1 st Cir.1980) (even though all defendants had not filed responsive pleadings, plaintiff could not amend his complaint again). In addition, defense counsel's letter was not "written consent" to the amended complaint because defendant agreed only to delete the reference to punitive damages. See Exhibit C to Defendant's Motion To Strike And Dismiss (Doc. # 49).
[5] Gebser noted that Title IX was modeled after Title VI which is "parallel to Title IX except that it prohibits race discrimination, not sex discrimination, and applies in all programs receiving federal funds, not only in education programs." Id. at 286, 118 S.Ct. 1989. "The two statutes operate in the same manner conditioning an offer of federal funding on a promise by the recipient not to discriminate, in what amounts essentially to a contract between the Government and the recipient of funds." Id.
[6] Plaintiff alleges that he notified the superintendent the day after Watts suspended Z.R., but he does not allege that the superintendent failed to take corrective action to end the discrimination.
[7] In his response to defendant's motion to dismiss on this issue, plaintiff simply incorporates his response to defendant's prior motion to dismiss. See Plaintiff's Suggestions In Opposition To Defendant's Motion To Strike And Dismiss (Doc. # 53) filed December 1, 2006 at 2 (citing Plaintiff's Memorandum In Opposition To Defendants' Motion To Dismiss (Doc. # 27) filed February 28, 2006). In plaintiff's response to defendant's earlier motion, plaintiff did not specifically address the District's liability for conduct by Watts. Plaintiff also suggests that in its order on defendant's first motion to dismiss, the Court rejected defendant's argument on this issue. See id. In the prior order, however, the Court did not specifically distinguish the acts of Watts and Serzyski in light of Gebser's holding that the knowledge of the wrongdoer does not constitute notice to the school district. See Memorandum And Order (Doc. # 45) at 16-17. In Gebser, the Supreme Court did not specifically address whether the knowledge of a school principal, who is also the wrongdoer, constitutes sufficient notice to a school district. See Gebser, 524 U.S. at 291, 118 S.Ct. 1989. The Court's prior order addressed the conduct of Watts and Serzyski together, and therefore implied that a principal could qualify as an "appropriate person" even where the principal was the wrongdoer. See Memorandum And Order (Doc. # 45) at 16-17. On review, and after separately analyzing the conduct of Watts and Serzyski, the Court finds that a principal cannot qualify as an "appropriate person" where the principal is the wrongdoer.
[8] Defendant also argues that the Court did not give plaintiff leave to re-assert the claim and that the claim is subject to dismissal for several additional reasons asserted in its prior motion to dismiss, which it incorporates by reference. See Defendant's Memorandum in Support Of Motion To Strike And Dismiss (Doc. # 50) filed November 9, 2006 at 5 n. 4. Because the issue of notice is dispositive under K.S.A. § 12-105b(d), the Court need not reach defendant's alternative arguments.
[9] Defendant also seeks to strike all references to plaintiff's claim for violation of Z.R.'s procedural due process rights under state law. Because the Court dismisses that claim, defendant's motion to strike references to the claim is moot.
[10] Defendant apparently complied with the safe harbor provision as to plaintiff's request for punitive damages, see Exhibit A to Defendant's Memorandum in Support Of Motion To Strike And Dismiss (Doc. # 50), but plaintiff did not include a request for punitive damages in his amended complaint of October 26, 2006.
[11] Not to be outdone, plaintiff seeks sanctions because defendant filed a second motion to dismiss instead of an answer to the "Amended" Amended Complaint (Doc. # 48). See Plaintiff's Suggestions In Opposition To Defendant's Motion To Strike And Dismiss (Doc. # 53) at 4. Assuming that plaintiff seeks such sanctions under Rule 11, the Court overrules the request because plaintiff did not file his request as a separate motion and has not provided evidence that he complied with the safe harbor provision. In any event, sanctions against defendant for filing a second motion to dismiss are not warranted because the motion in substantial part is well taken.
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94 F.3d 649
NOTICE: Eighth Circuit Rule 28A(k) governs citation of unpublished opinions and provides that they are not precedent and generally should not be cited unless relevant to establishing the doctrines of res judicata, collateral estoppel, the law of the case, or if the opinion has persuasive value on a material issue and no published opinion would serve as well.
UNITED STATES of America, Plaintiff-Appellee,v.ONE PARCEL OF REAL PROPERTY LOCATED AT 2130 WEST HARBORDRIVE, Bismarck, North Dakota, with Buildings, Appurtenancesand Improvements, Known as Lot Six (6), Block One (1), MillsSecond Subdivision, Burleigh County, North Dakota; Defendant,Mark A. Doll, Claimant-Appellant.UNITED STATES of America, Plaintiff-Appellee,v.ONE PARCEL OF REAL PROPERTY LOCATED AT 2130 WEST HARBORDRIVE, Bismarck, North Dakota, with Buildings, Appurtenancesand Improvements, Known as Lot Six (6), Block One (1), MillsSecond Subdivision, Burleigh County, North Dakota; Defendant,Mark A. Doll, Claimant-Appellant.UNITEd STATES of America, Defendant-Appellee,v.ONE PARCEL OF REAL PROPERTY LOCATED AT 2130 AND 2132 NORTHWASHINGTON, Bismarck, North Dakota, with Buildings,Appurtenances and Improvements, Known as Lot Three (3),Block Two (2), Marian Park Second, Burleigh County, NorthDakota; Defendant,Mark A. Doll, Claimant-Appellant.
Nos. 96-1017, 96-1019.
United States Court of Appeals, Eighth Circuit.
Submitted July 12, 1996.Decided Aug. 8, 1996.
Before FAGG, LAY, and HEANEY, Circuit Judges.
PER CURIAM.
1
Mark A. Doll appeals the district court's orders denying Doll's requests for attorney's fees and expenses. The parties' briefs thoroughly discuss the merits of the underlying civil forfeiture proceedings, and we need not repeat what they have said to decide whether there was substantial justification for the Government's position. Having considered the record and the parties' briefs, we conclude the Government's position was substantially justified within the meaning of the Equal Access to Justice Act, 28 U.S.C. § 2412(d). We thus affirm the district court.
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818 F.2d 464
UNITED STATES of America, Plaintiff-Appellee,v.Frank Joseph FLOWERS a/k/a Yusuf Abdir Rashid, Defendant-Appellant.
No. 85-1783.
United States Court of Appeals,Sixth Circuit.
Argued Jan. 26, 1987.Decided Feb. 19, 1987.As Amended May 4, 1987.
Gerald Skoch, argued, Lakewood, Ohio, for defendant-appellant.
Wayne F. Pratt, argued, Detroit, Mich., for plaintiff-appellee.
Before KEITH and KENNEDY, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.
CORNELIA G. KENNEDY, Circuit Judge.
1
Defendant-appellant Frank Joseph Flowers, also known as Yusuf Abdir Rashid ("defendant"), was convicted of conspiracy to distribute and attempt to distribute controlled substances by false prescriptions in violation of sections 841(a)(1) and 846 of the Controlled Substances Act, 21 U.S.C. Secs. 801-966 (1982) ("Act"). He raises five issues on appeal: (1) that the District Court erred in not dismissing the conspiracy count where it had dismissed another count that charged defendant with the distribution of false prescriptions; (2) that the evidence was insufficient to support a conviction; (3) that the indictment failed to apprise defendant of the charges against him; (4) that the District Court erred in failing to consider a lesser included offense; and (5) that the District Court judge should have recused himself from deciding the case because he had heard defendant's withdrawn guilty plea, and read a pre-sentence report.
2
The testimony at trial established that defendant, who is not a licensed physician, obtained blank prescriptions from a printer. These prescriptions bore the name and address of a legitimate clinic, but the printed telephone number was the home telephone number of defendant. Defendant and co-defendant Beck employed several women to write out false prescriptions for controlled substances on these printed prescriptions. The forged prescriptions were either sold or used by members of the conspiracy to purchase controlled substances which in turn were sold. These forged prescriptions were filled at various pharmacies in the Detroit area. When a pharmacist would call to verify the prescription, the telephone would ring at defendant's apartment. Defendant or a co-conspirator would assure the pharmacist that the prescription was legitimate.1
3
In November, 1983, the false prescription scheme expanded. Defendant rented a storefront and had new prescription pads printed. These pads contained the name of an illegitimate medical clinic, with the correct telephone number and address for the storefront. Several women were also employed to answer telephones, verify prescriptions, and forge prescriptions on the new paper. These prescriptions were also filled at various pharmacies in the Detroit area.
4
Defendant was charged in two counts of a seven-count indictment. Count one charged defendant and two others with conspiracy to distribute controlled substances by false prescriptions in violation of sections 841(a)(1)2 and 846.3 Count six charged defendant with the distribution of false percodan prescriptions and with aiding and abetting in the attempted distribution of percodan in violation of section 841(a)(1).
5
On October 2, 1984, defendant pled guilty to count one. On January 10, 1985, the District Court granted defense counsel's motion to withdraw as counsel for defendant. New counsel was appointed and assisted defendant in filing a motion to withdraw his guilty plea. After an evidentiary hearing, the court granted this motion. After two days of jury selection, defendant requested that he be allowed to represent himself with the assistance of standby counsel, and that he be allowed to waive a jury trial. The court granted defendant's requests.
6
After a bench trial, defendant was found guilty under count one. The court dismissed count six concluding that section 841(a)(1) did not proscribe the distribution of false percodan prescriptions, the essence of the sixth count.
7
Defendant raises several issues in his first argument that the conspiracy count should have been dismissed. Initially, he contends that because the court dismissed count six charging the distribution of false prescriptions, he cannot be convicted under count one for conspiring to distribute false prescriptions. He asserts that because the court dismissed the sixth count, the distribution of false prescriptions is legal. Defendant's argument is misplaced for two reasons. First, the court dismissed count six because it concluded that the basis of the count was the distribution of false percodan prescriptions in violation of 21 C.F.R. Sec. 1306.04, a regulation promulgated under section 841(a)(1). The court concluded that this regulation was not intended to apply to persons other than licensed physicians or pharmacists. Second, defendant misreads the plain language of count one. It states that defendant "did knowingly, intentionally, and unlawfully combine, conspire, confederate, and agree with various other persons ... to distribute and attempt to distribute controlled substances, by false prescriptions, all outside the course of legitimate medical practice or purpose...." Count one further provided: "It was part of said unlawful conspiracy that in order to obtain controlled substances for distribution, the various co-conspirators and defendants herein would arrange for the printing, signing, distribution, filling, and verifying of forged prescriptions...." See Joint Appendix at 17-18. Thus, defendant was indicted and convicted under sections 841(a)(1) and 846 of conspiring to distribute and attempting to distribute controlled substances by the use or means of false prescriptions. He was not convicted under count one for conspiring to distribute false prescriptions.4
8
Defendant also contends that insufficient evidence existed to support his conviction of this offense. According to defendant, the only evidence at trial concerning the distribution of controlled substances came from an unindicted co-conspirator in the case. That evidence was sufficient for a finding of distribution. Defendant fails to recognize, moreover, that it is the illegal agreement that is the essence of the crime of conspiracy and that the evidence is overwhelming that the conspirators entered into their agreement in order to achieve the dispensing and distribution of controlled substances.
9
Even if the conspiracy is limited to the forged prescriptions, the writing of the illegal prescriptions completes all the elements of the offense prohibited by section 841(a)(1). Section 802(10) defines the term "dispense" as delivery of a controlled substance to an ultimate user. The term "delivery" is defined in section 802(8) as the "actual, constructive, or attempted transfer of a controlled substance...." As the Third Circuit concluded in United States v. Tighe, 551 F.2d 18 (3d Cir.), cert. denied, 434 U.S. 823, 98 S.Ct. 68, 54 L.Ed.2d 80 (1977), a prescription for a controlled substance "cannot be regarded as less than the constructive or attempted transfer of the substance itself, since a prescription is the written representation of the drug and enables its possessor to claim physical custody and control over the drug prescribed." 551 F.2d at 20. Thus, we conclude that Congress intended that a person could violate section 841(a)(1) without actually distributing the controlled substances, but only by writing a prescription for their distribution.5
10
A number of other circuits have reached this conclusion. In United States v. Stump, 735 F.2d 273 (7th Cir.), cert. denied, 469 U.S. 864, 105 S.Ct. 203, 83 L.Ed.2d 134 (1984), defendant, a licensed physician, was convicted on twenty-five counts of illegally prescribing controlled substances in violation of section 841(a)(1). Defendant argued, inter alia, that insufficient evidence existed establishing that he knowingly prescribed controlled substances in an unlawful manner. The court concluded that improperly issuing a prescription is sufficient to warrant a conviction under the Act even though defendant did not actually distribute the drugs. 735 F.2d at 275-76.
11
Similarly, in United States v. Davis, 564 F.2d 840 (9th Cir.1977), cert. denied, 434 U.S. 1015, 98 S.Ct. 733, 54 L.Ed.2d 760 (1978), defendant, a licensed physician, was convicted of unlawfully prescribing controlled substances in violation of section 841(a)(1). He contended, inter alia, that he could not have been found to have participated in an essential element of section 841, namely the ultimate distribution of a controlled substance. The court disagreed. Relying on the definition of distribute and deliver, the court concluded, "by creating the means by which controlled substances can be transferred, a doctor 'distributes' within the meaning of [section 841(a) ] by the act of writing a prescription outside the usual course of professional practice and not for a legitimate medical purpose." 564 F.2d at 845. See also United States v. Green, 511 F.2d 1062, 1072 (7th Cir.), cert. denied, 423 U.S. 1031, 96 S.Ct. 561, 46 L.Ed.2d 404 (1975), United States v. Bartee, 479 F.2d 484, 488 (10th Cir.1973) (writing the prescription completes all the elements of the crime in a section 841(a)(1) case).
12
Defendant's additional contention that the indictment failed to apprise him of the charge of conspiring to distribute, attempting to distribute, and distributing controlled substances is meritless. Count one of the indictment states that defendant "did knowingly, intentionally, and unlawfully combine, conspire, confederate, and agree ... to distribute and attempt to distribute controlled substances, by false prescriptions ... contrary to the provisions of section 841(a)(1)...." It does not, as defendant argues, charge him with conspiring to distribute false prescriptions; it charges him with conspiracy to distribute controlled substances. Thus, because the indictment contains the elements of the offense charged, fairly informs defendant of the charge against him, and enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense, it is sufficient. See United States v. Seelig, 622 F.2d 207, 211 (6th Cir.), cert. denied, 449 U.S. 869, 101 S.Ct. 206, 66 L.Ed.2d 89 (1980) (citing Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 2907, 41 L.Ed.2d 590 (1974)).
13
Defendant next contends that the District Court erred in not considering whether defendant was guilty of a lesser included offense, conspiracy to violate sections 353 and 331(k) of the Food, Drug and Cosmetic Act, 21 U.S.C. Secs. 301-392 (1982). We conclude that these offenses are not lesser included offenses of section 841, the basis of the charge in the indictment. Section 353(b) applies to all prescription drugs, which may or may not be controlled substances. Section 841(a)(1) applies to all controlled substances, which may or may not be prescription drugs. Furthermore, sections 353(b) and 331 require that the drug in question be misbranded while section 841 contains no such requirement.
14
Finally, defendant contends that the District Court judge erred in failing to recuse himself from the non-jury trial because he ruled on motions, admission of evidence, and had personal knowledge of the facts of the case. This contention is also without merit. First, 28 U.S.C. Sec. 144 (1982) requires the party challenging the judge's impartiality to submit an affidavit alleging partiality to the judge before whom the matter is pending. Defendant in the present case failed to satisfy this requirement. Second, Canon 3(C) of the Code of Judicial Conduct provides that judges should disqualify themselves when they have personal knowledge of disputed evidentiary facts. The judge in the present case, however, did not acquire these facts from an extra-judicial source. Cf. United States v. Story, 716 F.2d 1088, 1091 (6th Cir.1983). Third, although 28 U.S.C. Sec. 455 requires judges to disqualify themselves for personal bias in the absence of a party complaint, defendant in the present case fails to establish such personal bias. As stated above, all the information the judge acquired about the case arose from his association with the proceeding. As this Court stated in Story, this is insufficient to support a finding of partiality. Id. at 1090-91. Defendant waived his right to a jury trial after the guilty plea had been set aside. The Assistant United States Attorney questioned defendant about his decision to waive a jury trial, pointing out that the judge deciding the facts would be the same judge who heard his guilty plea and reviewed the pre-sentence report. Defendant responded that if he felt that the judge would be prejudiced, he would prefer another judge. Judge Freeman told defendant that he would not be prejudiced by the information he had learned, and neither defendant nor his counsel challenged this assertion or requested another judge. Additionally, defendant persisted in his request to have the case decided by Judge Freeman after a noon recess, the afternoon following the questioning.
15
Accordingly, the decision of the District Court is AFFIRMED.
1
Defendant and his co-conspirators occasionally sold forged prescriptions directly to individuals, including an undercover FBI agent
2
Section 841(a)(1) at the time of the offense provided in pertinent part:
[I]t shall be unlawful for any person knowingly or intentionally--
(1) to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance....
3
Section 846 provides in pertinent part:
Any person who attempts or conspires to commit any offense defined in this subchapter is punishable by imprisonment or fine or both....
4
The District Court concluded: "this Court finds [defendant] guilty beyond a reasonable doubt under Count One of the indictment of conspiring with Beck, LeFlore, Spates, and Carson to distribute percodan and desoxyn in violation of 21 U.S.C. Secs. 846 and 841(a)(1)." See Joint Appendix at 111-12
5
The Supreme Court in United States v. Moore, 423 U.S. 122, 96 S.Ct. 335, 46 L.Ed.2d 333 (1975), and this Circuit in United States v. Kirk, 584 F.2d 773 (6th Cir.), cert. denied, 439 U.S. 1048, 99 S.Ct. 726, 58 L.Ed.2d 708 (1978), upheld the convictions of physicians who had been found in violation of section 841(a)(1) by virtue of selling prescriptions for controlled substances outside the usual course of professional practice. Although the issue of whether selling prescriptions can alone constitute a crime under section 841(a)(1) was not specifically addressed by either Court, both decisions implicitly support the proposition that a nonphysician issuing prescriptions can be convicted under section 841(a)(1)
|
10 F.3d 723
In re David L. SMITH.
No. 93-631.
United States Court of Appeals,Tenth Circuit.
Nov. 29, 1993.
Before: SEYMOUR, BALDOCK and BRORBY, Circuit Judges.
ORDER
PER CURIAM.
1
Respondent was ordered to show cause why he should not be fined, disbarred or otherwise disciplined for filing frivolous appeals in numbers 93-1070 and 93-1139, Deherrera v. Denver, 7 F.3d 1044 (10th Cir.1993) after the entry of this court's orders in Sandlin v. Canady (In re Canady), 993 F.2d 1551 (10th Cir.1993) and Dunkin v. Louisiana-Pacific Corp., Nos. 92-1230 & 92-1381 (10th Cir. February 11, 1993), cert. denied, --- U.S. ----, 114 S.Ct. 87, 126 L.Ed.2d 54 (1993) and for filing a frivolous appeal in Casillan v. Regional Transportation District, 986 F.2d 1426 (10th Cir.1993). Respondent maintains the appeals were not frivolous. We disagree.
2
The appeals were found to be frivolous by the panels who decided them. We cannot overrule the judgment of another panel of this court. We are bound by the precedent of prior panels absent en banc reconsideration or a superseding contrary decision by the Supreme Court. United States v. Killion, 7 F.3d 927 (10th Cir.1993); United States v. Spedalieri, 910 F.2d 707, 710 n. 3 (10th Cir.1990) (a three-judge panel cannot overrule circuit precedent); United States v. Berryhill, 880 F.2d 275, 277 (10th Cir.1989), cert. denied, 493 U.S. 1049, 110 S.Ct. 853, 107 L.Ed.2d 846 (1990).
3
Respondent filed a petition for certiorari in Dunkin. The question presented for review was,
4
"Whether an order sanctioning counsel currently of record is immediately appealable under the collateral order exception rule established by this Court in Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).
5
Whether sanctions may be imposed against counsel for filing appeals warranted by existing law or by a good faith argument for the extension, modification or reversal of existing law."
6
Petition for certiorari, attached to appellant's motion to recall and stay the mandate filed July 12, 1993, in Dunkin v. Louisiana-Pacific Corp., Nos. 92-1230 & 92-1381 (10th Cir. February 11, 1993). Certiorari was denied without comment. Dunkin and Smith v. Louisiana-Pacific Corp., --- U.S. ----, 114 S.Ct. 87, 126 L.Ed.2d 54 (1993).
7
At oral argument, respondent admitted that he has not paid any of the sanctions that have been imposed on him by this court or the district court. David L. Smith is suspended from the practice of law before this court until all sanctions are paid. He may apply for reinstatement to our bar when he can demonstrate that each sanction order of this court or the district court has been satisfied.
8
The clerk shall provide a copy of this order to all courts before which Mr. Smith has been admitted to practice.
|
433 S.W.2d 259 (1968)
Ronald B. MILLER and Carol M. Miller, Husband and Wife, and Alonzo W. Durham and Mildred F. Durham, Husband and Wife, Respondents,
v.
Leland F. WARNER and Joyce E. Warner, Husband and Wife, Appellants.
No. 53627.
Supreme Court of Missouri, Division No. 1.
November 12, 1968.
*260 Clerk & Ochsner, Melville A. Ochsner, St. Louis, for appellants.
McQuie & Deiter, Montgomery City, for respondents.
HIGGINS, Commissioner.
Action to establish and quiet title to real estate by adverse possession under Section 516.010, V.A.M.S.
Respondents, in a petition filed November 3, 1966, alleged adverse, open, exclusive, continuous, hostile, and notorious possession since May 4, 1940, of the disputed strip of land, and prayed that title to the strip be quieted in them. Appellants, in answer and counterclaim, denied the petition, alleged a fee simple ownership of the disputed land, and prayed for ejectment of respondents from the land and for damages for wrongful detention. Respondents' reply denied the counterclaim, and they counterclaimed alternatively for compensation for improvements made in good faith prior to notice of appellants' claim. See Rules 89.16 to 89.21, V.A.M.R. (Sections 524.160 to 524.210, V.A.M.S.) Appellants' reply denied the alternative counterclaim.
The judgment found all issues for respondents and quieted title to the disputed premises in respondents.
On August 23, 1939, Amelia Bolliger, by warranty deed from the Hagemeier heirs, acquired title to land in Warren County, Missouri, described as all that part of the Southeast Quarter and all that part of the Northeast Quarter of Section 19, Township 47 North, Range 1 West, lying south of the railroad right of way except about 32 acres previously deeded to the railroad.
*261 On May 4, 1940, Amelia Bolliger deeded the north part of her above property to Oscar W. and Marjorie W. Loddeke by deed which described the land conveyed as the Northeast Quarter of the Southeast Quarter and all that part of the Southeast Quarter of the Northeast Quarter lying south of the railroad, all in Section 19, Township 47, Range 1 West, containing 50 acres more or less.
On December 29, 1951, through subsequent conveyances, respondents Alonzo W. and Mildred F. Durham acquired title to the north tract; and on April 14, 1962, they conveyed to respondents Ronald B. and Carol M. Miller a part of the tract described as one acre in the Southeast corner of the Northeast Quarter of the Southeast Quarter of Section 19, Township 47 North, Range 1 West, and more particularly described by metes and bounds. The Millers are the son-in-law and daughter of the Durhams. In 1963 they began construction of a dwelling house on the 1-acre tract and, in April, 1964, they moved into their new home. Respondents thought the dwelling was being erected on land conveyed to the Millers by the Durhams but it is on the disputed strip of land.
On August 18, 1942, Amelia Bolliger deeded the south part of her property, acquired from the Hagemeier heirs, to Huston J. and Gladys Martin by deed which described the land conveyed as the South half of the Southeast Quarter of Section 19, Township 47, Range 1 West, containing 80 acres more or less.
On August 19, 1961, through subsequent conveyances, including passage through A. L. and Gertrude Goddard, appellants acquired title to the south tract. Appellants subsequently conveyed 61.40 acres in the south part of their tract, but retained the land immediately south of that held by respondents, and respondents' south line is a common boundary with the north line of appellants' remaining property.
At all times since the Hagemeier ownership of the combined tracts there was an east-west fence consisting of woven wire and two or three strands of barbed wire supported by wooden posts. The fence still exists at its original location and extends from Route H on the east to the west line of respondents' property. It is straight except for a "jog" 14 feet to the north at a point 908.90 feet west of Route H and is the south line of the disputed area which is bordered on the east by Route H and on the west by a north-south fence enclosing a railroad lake. There are no physical monuments at the north line of the disputed area, but the area is established to be 143 feet wide, north and south, at the east line and 110 feet wide on the west.
The Durhams never suspected that their deed of December 29, 1951, did not convey title to them to all property north of the fence, and all respondents' first knowledge of appellants' claim followed survey work begun for appellants in 1966, prior to this lawsuit. (The survey was not completed until May, 1967.) Respondents believed that they had title to all land north of the fence. They did not, therefore, tell anyone of their claim but, since 1951, they claimed the disputed area. "We had possession of it and we claimed it as ours."
Approximately the east 300 feet of the disputed strip has been cleared since 1951. West of that 300 feet, the strip, in 1951 and until October, 1957, contained "weed trees and sassafras and elms and a couple of sycamores and a couple of cedars and things like that. There were no trees that had any value to them." The growth was irregular on its north line and varied in width from 100 feet, north and south, at some points, to 25 feet at others. There were some open spaces in the growth but the area was not open for cultivation beyond the north line of growth until the area was finally cleared in October, 1957.
Since the May 4, 1940, conveyance by Amelia Bolliger to the Loddekes, respondents' predecessors in title used and occupied the land north of the fence; none of the owners of the south tract used or occupied *262 any land north of the fence except as tenants of respondents or their predecessors.
Soon after their purchase in December, 1951, the Durhams began clearing the disputed area of its brush and growth. They worked first by hand and, later, from 1954 until 1957, with a tractor. In October, 1957, they hired a bulldozer and operator to complete the clearing. Between 1952 and 1957 respondents worked at clearing the strip "practically every week." The timber and brush was not sold or used for logs, bolts, or firewood. It had no value; "* * * just used the poles to put in ditches to help stop them up."
In 1952, the Durhams sold an alfalfa hay crop on the east 300 feet of the disputed strip to Frank Stuermann. In 1952, Mr. Stuermann, for cash rental paid to the Durhams, pastured cattle on the westernmost part of the disputed area. The pasture included land extending north along and east of the west fence and down to the south fence. From 1954 through 1961, Mr. Stuermann farmed portions of the disputed area under sharecrop agreements with the Durhams. Prior to 1958, the east 300 feet was clear and was cultivated as close as possible to the brush and timber north of the south fence. Beginning in 1958, after the clearing was completed, the entire area was cultivated as close to the fence as possible by Mr. Stuermann under sharecrop agreements with the Durhams. In 1962, appellant Warner "put in a bean crop on shares" on the disputed land north of the fence.
Clearing and cultivating of the disputed area were done in open view of persons passing on the roadway adjacent to the area and to those farming land south of the fence. Mr. Goddard, owner of the land south of the fence from 1945 to 1961, talked to Mr. Durham across the fence on at least one occasion when Mr. Durham was engaged in clearing the disputed area.
Although the Durhams were on their farm every week since their purchase in 1951, they did not live there. Their farmhouse was occupied only on some weekends. The Millers have lived at all times on their premises since construction of their home in 1964.
Appellants contend that respondents' evidence failed to prove the elements of an adverse possession of the disputed property; that "pasturing of cattle or cutting of timber under the circumstances * * * are not sufficient to establish adverse possession"; that the 10-year statute of limitations could not have started to run until October 3, 1957, and thus the suit filed November 3, 1966, was premature; that "exercise of control over the east 300 feet would not have been an exercise of control on the remaining acreage to the west."
To accomplish an effective adverse possession, the possession must be hostile and under claim of right, actual, open and notorious, exclusive, and continuous; and the burden of proving these five elements and their concurrent existence for ten years prior to commencement of the action to perfect title is on the party claiming title by adverse possession. Moss v. James, Mo., 411 S.W.2d 104, 106 [1, 2]; Section 516.010, V.A.M.S. See also Horton v. Gentry, 357 Mo. 694, 210 S.W.2d 72, 75 [2]; Brown v. Chapman, Mo., 163 S.W.2d 920, 922 [3]; 2 C.J.S. Adverse Possession § 8. "The term, adverse possession, designates `a possession in opposition to the true title and real owner, and it implies that it commenced in wrong, by ouster or disseisin, and is maintained against right. The law, on the contrary, presumes that every possession is rightful, and consistent with, not in opposition or "adverse" to, title and ownership. A party, therefore, who relies upon "adverse possession," in order to rebut this presumption of possession consistent with the title of the real owner, must prove his possession to be "adverse" to the title set up * * *; that is, he must show the actual knowledge of the real owner that he claims in opposition and defiance of his title, or he must show such an occupancy and user, so open and notorious and inconsistent with, as *263 well as injurious to, the rights of the true owner, that the law will authorize, from such facts, the presumption of such knowledge by the true owner. It is not the mere occupancy or possession which must be known to the true owner to prejudice his rights, but its "adverse" character.'" Hilgert v. Werner, 346 Mo. 1171, 145 S.W.2d 359, 361 [3, 4].
Was respondents' claim hostile under claim of right?
Tillman v. Hutcherson, 348 Mo. 473, 154 S.W.2d 104, 109 [9, 10], considered this element of adverse possession: "* * * if either owner claimed to the fence unconditionally his possession was adverse, regardless of his reason, so long as it was actual, open, notorious, exclusive, continuous and under hostile claim of ownership, not necessarily claim of right in the sense of moral right, or even prior legal right. In fact the term `adverse possession' implies a commencement in wrong against right by ouster. * * * Even a tortious possession by trespass may ripen into a title by adverse possession. The claim of ownership may be only `pretended' or `asserted.' * * * Neither was it necessary that * * * claim be `independent of the fence.' Color of title is not necessary under the ten-year statute of limitations." Under this authority, in absence of record title and without knowledge prior to 1966 that their deed did not describe all the land north of the east-west fence, respondents' unconditional claim of ownership of land to the fence as evidenced by occupation, clearing, farming, pasturing, and erecting improvements on the disputed area constitutes hostile possession under claim of right in the sense of "pretended" or "asserted" ownership.
State ex rel. Edie v. Shain, 348 Mo. 119, 152 S.W.2d 174, presented the same question. Defendants' predecessor had erected a building which encroached on plaintiff's property for more than ten years prior to plaintiff's suit in ejectment. Defendants did not know of the encroachment until just before suit was filed and evidence showed that had defendants' predecessor known of the encroachment he would have paid for the land occupied. The defense was adverse possession. The question: Where one landowner occupies land of an adjoining owner in ignorance that he is so doing and in ignorance of the boundary line, can his possession be considered hostile and adverse? The answer: "If the possessor occupies the land in question intending to occupy that particular piece as his own, his occupancy is adverse. It is not necessary that he intend to take away from the true owner something which he knows belongs to another, or even that he be indifferent as to the facts of the legal title. It is the intent to possess, and not the intent to take irrespective of his right, which governs." 152 S.W.2d 1. c. 176 [5-8]. Respondents' "intent to possess" in this context is demonstrated by the evidence in the statement and by additional testimony. When Mr. Durham hired the bulldozer to finish clearing the timber from the disputed strip he felt that he owned the land because he had possession of it; and during her cross-examination Mrs. Durham testified that they were on the disputed land through the years under assumption they owned it. "We had possession of it and we claimed it as ours. * * * We didn't think anyone else owned it but us."
Was respondents' claim actual and for more than ten years?
"Possession is a legal concept. It involves two things: A present or, in the case of constructive possession, a past ability to control the thing possessed plus an intent to exclude others from such control," State v. Shain, supra, 152 S.W. 2d 1. c. 177 [5-8], and "Actuality of possession, and the intent with which dominion over land is exercised, may be shown by an almost endless combination of circumstances * * *. Ordinarily each case must be ruled on its own facts, * * *." Tillman v. Hutcherson, supra, 154 S.W.2d 106 [1, 2]. The disputed land claimed by adverse possession by respondents is the *264 south portion of an enclosed 50-acre tract. No monuments or physical barriers mark or divide the disputed strip from the remainder of respondents' land to the north but the fence does separate it from appellants' land south of the fence. The disputed strip is not distinguished from the remainder of respondents' enclosure, a situation existent since the commencement of respondents' occupation in 1951. Portions of the strip have been farmed by respondents or by tenants, including appellants, under them. As early as 1952, respondents sold hay from the disputed area and accepted rent for pasturage. From 1952 until 1957, respondents worked at clearing the area, first by hand, then by tractor, and, finally, by bulldozer. None of this was contradicted and, under the circumstances, warranted a finding of 10-years' actual possession. True, pasturing cattle or cutting timber do not in themselves establish adverse possession, Horton v. Gentry, supra, 210 S.W. 2d 1. c. 75 [3], Pharis v. Jones, 122 Mo. 125, 26 S.W. 1032, 1034 [3], Crider v. Meatte, 320 Mo. 474, 7 S.W.2d 691, 695 [14-16], but they do tend to show claim of ownership, Horton v. Gentry, supra, and, in these circumstances, combine with others to support the court's finding. Nor are these circumstances the "occasional trespass" for purposes of taking firewood or rock held not to constitute possession in Herbst v. Merrifield, 133 Mo. 267, 34 S.W. 571, 572, and Conran v. Girvin, Mo., 341 S.W.2d 75, 90 [17].
Appellants' kindred contention that respondents' suit and claim were premature and could not encompass more than the east 300 feet is bottomed on an argument that Mr. Durham could not have possessed "up to the fence" on that part of the disputed area west of the east 300 feet prior to October 3, 1957, because it was only then that the fence line was finally cleared. This argument overlooks the uncontradicted evidence of respondents' intent to possess all within their enclosure, and their possession of the east 300 feet of the strip coupled with the continuously recurring acts of clearing, farming, renting, and cultivation as far as machinery could go, all of which gave ample support to a finding of their possession to the fence. For similar cases sustaining occupancy of a part as possession of all of a claimed tract, see Landers v. Thompson, 356 Mo. 1169, 205 S.W.2d 544; Lossing v. Shull, 351 Mo. 342, 173 S.W.2d 1; Moss v. James, supra. See also Barker v. Allen, Mo., 273 S.W.2d 191, 194-195 [4, 5]; Mooney v. Canter, Mo., 311 S.W.2d 1, 5 [1].
Was the claim open and notorious? Uncontradicted evidence showed that respondents' efforts to clear the disputed area and their tenants' (including Mr. Warner) farming of the area took place in daylight in open view of travelers on the adjacent state highway and to those farming the tract south of the fence. This was sufficient to support the finding in favor of respondents on this issue.
Was the possession exclusive? Again, uncontradicted evidence places respondents in exclusive possession of the strip since 1951. No other person occupied the strip except with respondents' permission and no possessor from south of the fence ever used or occupied land north of the fence except Mr. Warner who did so only as a share-tenant of respondents in a bean crop.
Was possession continuous? Following their purchase in 1951 respondents were on their land every week. They stayed there some weekends. Their acts of ownership, farming, clearing, selling hay, renting pasturage, were continuously recurring acts. They in no way interrupted or abandoned their occupancy and no evidence was shown to contradict their continuous possession of their enclosure.
Under this evidence the court's finding in favor of respondents on each of the issues was reasonable. Landers v. Thompson, supra, 205 S.W.2d 1. c. 546 [4-6].
Judgment affirmed.
*265 HOUSER, C., not participating.
WELBORN, C., concurs.
PER CURIAM:
The foregoing opinion by HIGGINS, C., is adopted as the opinion of the court.
All of the Judges concur.
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433 F.3d 496
Ralph NADER; Peter Miguel Camejo; Ralph Nader for President 2004; Reform Party of the United States of America, by and through its National Chair Shawn O'Hara; Shawn O'Hara, in his individual capacity as Chair of the Reform Party of the United States of America, Plaintiffs-Appellants,v.Terri Lynn LAND, Michigan Secretary of State; Matthew Crehan, Defendants-Appellees.
No. 04-2428.
United States Court of Appeals, Sixth Circuit.
Argued: December 1, 2005.
Decided and Filed: January 10, 2006.
ARGUED: Bruce I. Afran, Princeton, New Jersey, for Appellants. Heather S. Meingast, Michigan Department of Attorney General, Lansing, Michigan, Michael J. Hodge, Miller, Canfield, Paddock & Stone, Lansing, Michigan, for Appellees. ON BRIEF: Bruce I. Afran, Princeton, New Jersey, Ralph J. Sirlin, Reosti, James & Sirlin, Pleasant Ridge, Michigan, Bruce T. Wick, Westlake, Ohio, for Appellants. Heather S. Meingast, Patrick J. O'Brien, Michigan Department of Attorney General, Lansing, Michigan, for Appellees.
Before: KENNEDY and GIBBONS, Circuit Judges; DONALD, District Judge.*
OPINION
KENNEDY, Circuit Judge.
1
Plaintiffs brought this declaratory action requesting that the court find that during the Presidential Election in 2004, the Michigan Secretary of State had a duty to certify one faction of the Reform Party's candidates for President. The district court dismissed Plaintiffs' case under Federal Rule of Civil Procedure 41(b) for failure to prosecute and because Plaintiff Nader elected to appear on the ballot as an independent candidate. For the following reasons, we AFFIRM the dismissal of election claims 1-5 and REVERSE the dismissal of causes of action 6 and 7.
BACKGROUND
2
Plaintiffs, Nader, Camejo, Ralph Nader for President 2004, the Reform Party of the United States and Chairman O'Hara, filed the instant declaratory judgment action after the Michigan Secretary of State refused to certify Nader and Camejo as the Reform Party's nominees for President and Vice President of the United States. As the history of disagreement within the Reform Party of Michigan is critical to our decision, a brief overview of past elections is necessary.
The 2000 Election Cycle
3
The first disagreements between the members of the Reform Party of Michigan came to light during the 2000 election when the Secretary of State of Michigan, Secretary Land, received two certifications from the Reform Party of Michigan. The first certification named Mark Forton as chairperson and Tracy DeNise as secretary and certified Patrick Buchanan as the nominee for President and Ezola Foster as the party's nominee for Vice President. The second certification named Diane McKelvey as the chairperson, Eleanor Renfrew as the secretary and nominated John Hagelin for President and Nat Goldhaber for Vice President.
4
Prior to this confusion, Perry Spence was unquestionably the Reform Party of Michigan's chairperson until July 14, 2000, at which point he resigned. McKelvey was the vice-chairperson at this time and was selected chairperson on July 28, 2000, at a board meeting. However, on August 5, 2000, Forton arranged a meeting where those present purported to recall four individuals from the executive board of the Reform Party of Michigan and then fill those vacancies. The "new" members of the board then elected Forton as chairperson and DeNise as secretary. Thus, the two factions of the Reform Party of Michigan were created, leading to Secretary Land's receipt of two requests for certification.
5
Pursuant to Michigan Election Law, the Secretary of State is required to certify the candidates for the offices of President and Vice President of the United States who have been named by the chairperson and secretary of the state party committees. MCL § 168.686. However, in light of this dispute, the Secretary of State refused to certify nominees from either faction. Buchanan, Foster and Forton subsequently filed suit in state court requesting a writ of mandamus compelling the Secretary to place the Buchanan faction of nominees on the ballot. The Ingham County Circuit Court ruled that because a substantial factual dispute regarding who led the Reform party existed, the Secretary of State had no clear legal duty to place those names on the Michigan Presidential ballot.1 Thus, the 2000 election litigation ended without a resolution as to which faction should be recognized.
2002 Election Cycle
6
In May 2002, Forton informed the Bureau of Elections that the Reform Party of Michigan voted to disaffiliate from the Reform Party of the United State of America, the national organization. Then on July 27, 2002, the Reform Party of Michigan convened and nominated candidates for several offices in the 2002 general election. The Secretary of State accepted those nominations as it appeared the conflict had been resolved and there was no objection from any other faction of the Reform Party of Michigan. Thus, those candidates were listed on the ballot without any objection and it appeared the Buchanan faction, with Forton acting as chairperson, led the Reform Party of Michigan. Notably, under MCL § 168.685(6), if the Reform Party of Michigan had not nominated candidates for the 2002 election cycle, it would have lost its ballot access for the 2004 cycle.
2004 Election Cycle
7
On June 25, 2004, the Bureau of Elections received a certification of nomination from the Reform Party of Michigan (from Muntz as chairperson, and Renfrew, as secretary), listing Ralph Nader for President and Peter Camejo for Vice President. On July 6, 2004, however, Defendant Crehan told the Bureau of Elections that the certification of Nader/Camejo was "fraudulent" as he, Crehan, was the elected chairperson of the Reform Party of Michigan and that Muntz/Renfrew were actually officers of the Independence Party of Michigan, a group attempting to become qualified as a political party.
8
On or about July 8, 2004, Plaintiff O'Hara, as undisputed chairperson of the Reform Party of the United States of America, addressed a letter to the Bureau of Elections, asserting that the national party recognized Muntz and Renfrew as the chairperson and secretary of the Reform Party of Michigan.
9
On July 9, 2004, the Secretary of State informed Crehan and Muntz that she was unable to accept the certification of Nader/Camejo as nominees of a qualified political party as "it is apparent that two individuals claim to be Chairperson of the Reform Party of Michigan and two individuals claim to be Secretary of the Reform Party of Michigan." Since this dispute arose earlier in the election cycle than it had in 2000, the Secretary of State urged the two factions to resolve their differences.
10
The two factions did not work out their differences and on July 26, 2004, the Bureau of Elections received a letter from Crehan as chairperson and Charlene Truskzkowski as secretary, of the Reform Party of Michigan. The Crehan/Truskzkowski faction did not nominate anyone for the offices of President and Vice-President, but they did nominate candidates for other positions. The Muntz/Renfrew faction, also as alleged chairperson and secretary of the Reform Party of Michigan, submitted nominations for Nader/Camejo for President and Vice-President as well as candidates for other state offices. The Secretary of State refused to certify the nominations from either faction.
11
However, Nader/Camejo did eventually appear on the Michigan ballot as candidates for President and Vice-President. Under Michigan Election Law, a person seeking office without a political party (as the Secretary never certified them) may file a "qualifying petition" to appear on a ballot as an independent candidate if they gather the requisite number of signatures from registered voters throughout the state. MCL § 168.590b(1). On July 15, 2004, the Michigan Republican Party filed an estimated 45,040 elector signatures on behalf of Plaintiff Nader to run as an independent candidate and Nader filed 5,463 elector signatures. The Bureau of Elections accepted the qualifying petition and the signatures submitted by the Republicans and Nader.2 Notably, Plaintiff Nader did not withdraw the qualifying petition within three days of filing, as he was permitted under MCL § 168.590c(3). Thus, Nader ran as an independent candidate in 2004.
Procedural History
12
After the filing of this action on August 23, 2004, Plaintiffs moved in the district court by order to show cause for a declaratory judgment and injunction directing the Secretary of State to place Nader/Camejo on the ballot as the presidential and vice-presidential candidates of the Reform Party. The district court entered a bench opinion denying the requested relief as there was an unresolved dispute as to who controlled the Reform Party of Michigan and thus, the Secretary had no clear duty under Michigan law to accept certification from either faction. The court also held that since Nader/Camejo failed to withdraw from a separate, non-Reform party independent ballot position, Nader was precluded from maintaining a claim to the Reform Party nomination. The basis for this ruling was that Michigan law prohibits a candidate from seeking nomination on both independent and party columns. On September 10, 2004, Plaintiffs filed a Notice and Claim of Appeal with this Court from the district court's order asking this court to hear the appeal as an order denying a motion to show cause is not final, but interlocutory. Plaintiffs did not move for a stay in the district court and when the Plaintiffs failed to appear at a scheduled pre-trial conference, the district court dismissed Plaintiffs' complaint for lack of prosecution and entered judgment in favor of Defendants. We denied Plaintiffs' Motion to Expedite the Appeal as untimely as no relief could be granted with respect to the November General Election ballot.
13
Plaintiffs appeal both the Order denying the show-cause motion and the Order of involuntary dismissal.
I. Mootness
14
Under the "case or controversy" requirement in Article III of the United States Constitution, federal courts only have jurisdiction to decide cases that affect the rights of litigants. Southwest Williamson County Cmty Assoc. v. Slater, 243 F.3d 270, 276 (6th Cir.2001). Thus, as a preliminary matter we must first determine whether, as Defendants allege, this case is moot. The Supreme Court has held that when considering the potential mootness of a claim for declaratory relief, "the question is `whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.'" Super Tire Eng'g Co. v. McCorkle, 416 U.S. 115, 122, 94 S.Ct. 1694, 40 L.Ed.2d 1 (1974) (quoting Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941)). "[I]f an event occurs while a case is pending on appeal that makes it impossible for the court to grant any effectual relief whatever to a prevailing party, the appeal must be dismissed." Church of Scientology of California v. United States, 506 U.S. 9, 12, 113 S.Ct. 447, 121 L.Ed.2d 313 (1992) (quotation omitted).
15
Defendants argue that this case is moot for two reasons: first, relief can no longer be granted because the 2004 election is over and, second, because Nader/Camejo appeared on the ballot as independents and under Michigan Election law a candidate cannot run as both an independent and as a candidate of a political party. Plaintiffs counter by arguing that this case fits under the "capable of repetition yet evading review" exception to the mootness doctrine, under which matters are to be reviewed on appeal even after the conclusion of the event for which relief is sought. Plaintiffs note that elections, because of their ephemeral nature are particularly suited for this doctrine.
16
Without reaching Defendants' first argument, we find Defendants' second argument persuasive.3 Under MCL § 168.590g(1), a "person who files a qualifying petition . . . shall not be nominated as a candidate . . . by a political party convention. . . ." (emphasis added). A qualifying petition was filed on behalf of Nader and Camejo and they never sought to withdraw that petition under MCL § 168.590c(3) (a candidate who "files a qualifying petition shall not be permitted to withdraw his . . . candidacy unless a written notice of withdrawal is filed with the filing officer who received the petition. The notice shall be filed not later than 4 p.m. of the third day after the last day of filing a qualifying petition.").
17
Thus, because a candidate cannot run as both an independent and with a party under Michigan Election Law, the Plaintiffs voluntarily and willingly gave up their claim to run on the ballot under the Reform Party ticket by submitting and by not withdrawing a qualifying petition. MCL § 168.590g(1). As we are unable to grant Plaintiffs "any effectual relief" and declare Nader/Camejo as the 2004 nominees of the Reform Party of Michigan, we find Plaintiffs' claim that the Secretary of State was under a duty to certify a particular faction of Reform Party candidates moot. See Church of Scientology of California, 506 U.S. at 12, 113 S.Ct. 447.
18
II. Involuntary Dismissal of Plaintiffs' Complaint
19
Plaintiffs also contend the district court abused its discretion by dismissing Plaintiffs' complaint, with prejudice, pursuant to Fed.R.Civ.P. 41(b) for failure to prosecute because the Plaintiffs did not appear for the scheduled pre-trial conference on September 30, 2004. Plaintiffs admit that the Nader Plaintiffs did not wish to pursue their claims because the issues with which they were concerned are matters addressed on the order to show cause; however, the Reform Party of the United States argues that the Sixth and Seventh Causes of action concern factual questions as to control of the state party that still require resolution in a fact-finding forum, either federal or state. The Reform Party of the United States does not plan on proceeding with these claims at this time; however, it points out that the district court's order was a dismissal with prejudice which would prevent them from adjudicating these claims in the future.
20
In this circuit we often have reversed a district court's decision to dismiss a complaint because litigants failed to appear, especially absent bad faith, or absent notice to the Plaintiffs that the court is contemplating involuntary dismissal. See Harris v. Callwood, 844 F.2d 1254, 1256 (6th Cir.1988) (extracting the principle from similar cases that "in the absence of notice that dismissal is contemplated by a district court should impose a penalty short of dismissal unless the derelict party has engaged in `bad faith or contumacious conduct'"); see Carter v. City of Memphis, 636 F.2d 159, 161 (6th Cir.1980) (courts should dismiss only in "extreme situations" of deliberate delay or "contumacious conduct"); Holt v. Pitts, 619 F.2d 558, 562 (6th Cir.1980) (same); Patterson v. Township of Grand Blanc, 760 F.2d 686, 688 (1985) (same); Bishop v. Cross, 790 F.2d 38, 39 (6th Cir.1986) (dismissal requires a "degree of willfulness, bad faith or contumacious conduct").
21
Thus, as it appears no notice was given to the Plaintiffs that the district court was considering involuntary dismissal and as the Plaintiffs only missed one appearance, we find the district court abused its discretion by dismissing this complaint with prejudice.
CONCLUSION
22
For the foregoing reasons we AFFIRM the district court's order dismissing Plaintiffs' case. We REVERSE the district court's dismissal, with prejudice, of counts 6 and 7 of the Plaintiffs' complaint and REMAND to the district court with instructions to grant appellant's request that claims 6 and 7 be voluntarily dismissed without prejudice under Fed.R.Civ.P. 41(a).
Notes:
*
The Honorable Bernice Bouie Donald, United States District Judge for the Western District of Tennessee, sitting by designation
1
Additionally, two members of the Buchanan faction, Watson and Robinson, filed a Complaint for Declaratory and Injunctive Relief and a Motion for Preliminary Injunction in the United States District Court for the Eastern District of Michigan, arguing that the Secretary of State's failure to certify Buchanan and Foster as the Reform Party's nominees violated their rights under the First and Fourteenth Amendments of the United States ConstitutionWatson v. Secretary of State, USDC, Eastern Dist., S. Div., Case No. 00-40336. The district court denied their motion and concluded the plaintiffs were essentially seeking a writ of mandamus, which the Michigan courts had already denied to Buchanan and Foster, and that the plaintiffs were unlikely to succeed on the merits of the claim. Watson and Robinson then filed an Emergency Motion for Immediate Consideration and Request for Injunction Pending Appeal in this court which was denied. They then filed an Emergency Application for Injunction Pending Appeal with the United States Supreme Court that was denied. Finally they stipulated to dismiss the appeal to this court and dismissed the case pending in the district court.
2
Some dispute existed as to whether the signatures were sufficient and whether Nader should appear on the ballot; however, inDeleeuw v. State Bd. of Canvassers, 263 Mich.App. 497, 688 N.W.2d 847 (2004), the Michigan Court of Appeals issued an opinion concluding that the signatures were valid and ordered the qualifying petition be certified.
3
We note that while the district court did not decide the case under the mootness doctrine, the court did base part of its decision on the fact that because Nader and Camejo ran as independent candidates, they were prevented under Michigan law from also running as Reform Party candidates
|
Filed 4/23/14 P. v. Singleton CA1/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
THE PEOPLE,
Plaintiff and Respondent,
A137105
v.
JANELLE SINGLETON, (Contra Costa County
Super. Ct. No. 51207596)
Defendant and Appellant.
I. INTRODUCTION
Janelle Singleton was charged with second degree robbery (Pen. Code, §§ 211,
212.5, subd. (c)) and second degree burglary (Pen. Code, §§ 459, 460, subd. (b)) based on
an incident that occurred at the Sun Valley Mall in Concord. At her jury trial, Singleton
conceded she committed burglary by stealing two pairs of jeans from a store in the mall,
but she disputed the robbery charge. The jury found Singleton guilty on both counts and
the trial court sentenced her to three years probation with the condition that she serve 90
days in jail.
The issues on appeal pertain only to Singleton’s robbery conviction. She contends
the trial court erred by (1) giving an irrelevant and misleading jury instruction regarding
the duration of a robbery; (2) failing to give a unanimity instruction; and (3) failing to
properly answer a jury question regarding the force or fear requirement of robbery. In
addition, Singleton contends that the prosecutor committed misconduct during closing
1
argument by mischaracterizing the People’s burden of proving the force or fear
requirement of robbery. We reject these contentions and affirm the judgment.
II. STATEMENT OF FACTS
A. The Prosecution Case
On November 4, 2011, Singleton was in a store called “Buckle” in the Sun Valley
Mall. Edmund Zimmer was the store manager that day. Zimmer saw Singleton take two
pairs of jeans from a store table, put them in a large bag that looked like a “beach bag,”
and leave the store without paying for them.
When Singleton exited the store, she set off a loud alarm. She was about 15 feet
outside the store, when Zimmer called out to her and went after her. As he caught up to
Singleton, Zimmer identified himself as the store manager and asked her to stop and let
him check the contents of her bag, or otherwise return to the store with him. Singleton
looked Zimmer in the eyes, then turned and began to walk away. Zimmer grabbed the
large bag she was carrying and tried to take it from her.
As Zimmer pulled on the bag, Singleton held on to it and fell to the ground, “on
her rear end,” with her feet up in the air. She then leaned back and kicked Zimmer
several times in his groin, ankles and legs. Zimmer let go of the bag, and Singleton got
up and began to run to an exit from the mall about 100 feet away. Zimmer followed her
out of the mall, telling her to stop, speaking loudly and trying to draw attention to himself
and what he was doing.
When they were both outside the mall, Singleton threw her bag under a parked car
and continued to walk away. Zimmer was going to stop for the bag until he saw that
Singleton was trying to put something down the front of her pants. Thinking the item had
been stolen from Buckle, Zimmer continued to follow Singleton, again telling her to stop.
When he caught up to her, Zimmer asked for the item, but she refused to give it to him.
Zimmer, who was directly behind Singleton, reached over her shoulder to take the item,
saw that it was a wallet and thought Singleton had stolen it from Buckle. Singleton
grabbed his arm, bit him several times (causing him to bleed) and also pulled his hair.
2
Zimmer then yanked his arm away, grabbed Singleton by her shoulders and placed her on
the ground. Shortly thereafter, the police arrived and arrested Singleton.
An off-duty police officer named Joshua Evans was shopping in the mall at the
time of this incident. He and a mall security officer heard and saw some of these events
and followed Zimmer and Singleton out of the mall into the parking lot. When Singleton
saw them she began to run away. Evans heard Zimmer identify himself to Singleton as
store security and yell for her to stop. He and the mall security officer also yelled at her
to stop, but she did not. Zimmer caught up with Singleton first and, when Evans reached
both of them, Singleton was standing, but she sat down when Evans asked her to do so.
Evans testified that Singleton had no visible injuries. While Evans waited for the police
to arrive, Zimmer went back to look for Singleton’s bag.
When Concord Police Officer Juan Piceno arrived at the scene, Singleton
identified a large black purse as hers. The purse contained a medium sized bag that was
lined with foil. Piceno recognized that medium sized bag as a “booster bag” which is
commonly used to prevent alarms from sounding when clothing still containing sensors is
taken out of the store. Singleton’s “booster bag” contained a set of wire cutters, and the
large purse itself contained another pair of wire cutters and two pairs of jeans with the
store’s price tags and sensors still on them.
Singleton was arrested and transported to the Concord jail where she waived her
Miranda1 rights and agreed to speak with Officer Piceno. She told him she went to
Buckle because she heard they had nice clothes; she took two pairs of jeans and walked
out of the store, causing the alarm to sound; Zimmer approached her and asked if he
could see inside her purse, and she told him no. At that point, Singleton reported,
Zimmer grabbed for her purse and then she “kicked” at him but did not make “actual
contact” because her leg went between his legs. Nevertheless, her kicks caused Zimmer
to let go of the bag, which enabled her to exit the mall. But Zimmer caught up to her in
the parking lot, pushed her on the ground and took her wallet. Singleton admitted to the
1
Miranda v. Arizona (1966) 384 U.S. 436.
3
officer that she had pulled Zimmer’s hair and “scraped her teeth against his arm” during
the altercation in the parking lot. She also told Piceno that she thought the foil bag would
prevent the store alarm from going off.
B. The Defense Case
Singleton was the only defense witness at trial. She admitted that she went to the
Buckle store to steal some jeans, and that she had constructed the foil-lined bag. She
testified that Zimmer caught up with her outside the store, and that she denied his request
to look into her bag and just kept walking. Singleton knew Zimmer was a Buckle
employee and that he was not trying to steal anything from her but just wanted to retrieve
the jeans she had stolen. Nevertheless, she refused his request and decided not to drop
the bag because she wanted the jeans.
Singleton testified that when she started to walk away from Zimmer he grabbed
her shoulder with one hand and a strap of her purse with the other, pulled with both hands
and was “trying to yank me down.” When Zimmer pulled on her bag, she pulled “right
back” because she was trying to get away. She started to lose her balance, but did not
actually fall down. Instead, she kicked her foot down as she attempted to stand back up
and get away. As Singleton explained, “I attempted—because my balance was thrown
off, I attempted to stand back up and try to, you know, get away from this guy, so I
kicked down.” Singleton denied that she attempted to kick Zimmer between the legs; she
claimed she was simply kicking off the ground in order to get herself back standing
upright. Singleton also denied ever telling Officer Piceno that she had tried to kick
Zimmer.
Singleton told the jury that Zimmer let go of her bag because another Buckle
employee yelled at him to just let Singleton go. For no other reason, Singleton testified,
Zimmer simply let her go, but then he followed her as she tried to exit the mall.
Singleton testified that at that point she was just trying to “get away from him because I
didn’t want the stuff anymore, like, I just wanted him to get off of me.” However, she
did not drop the bag because she wanted to “ditch the stuff outside of the mall.”
4
As Singleton headed toward her car in the parking lot, she was “freaked out”
because she knew she was going to get caught. She wanted to “ditch” the bag so she
would not get caught holding the stolen jeans. She knew Zimmer was following her but
she just kept “speed walking,” and she did not drop the bag because she wanted to get her
wallet out first. During her account of the events, Singleton never testified that she
actually ditched the bag or what she was thinking when she threw it under a parked car.
However, she did tell the jury that her plan was to get out of the mall so she could ditch
the bag where Zimmer would not see it so that if she got arrested “they wouldn’t find it.”
Singleton’s testimony about the second physical altercation between herself and
Zimmer, the fight in the parking lot, was very brief. She told the jury: “I had my wallet,
and I was trying to hide my wallet. That’s when he wrestled me for my wallet and
pushed me down to the ground.” Singleton testified that by that point in the incident, her
only concern was to get away without getting in trouble or being identified.
C. Robbery Jury Instructions
1. CALCRIM No. 1600
The trial court used a modified version of CALCRIM No. 1600 to instruct the jury
regarding the elements of robbery. That instruction stated:
“The defendant is charged in Count One with robbery in violation of Penal Code
section 211. [¶] To prove that the defendant is guilty of this crime, the People must prove
that: [¶] 1. The defendant took property that was not her own; [¶] 2. The property was
taken from another person’s possession and immediate presence; [¶] 3. The property was
taken against that person’s will; [¶] 4. The defendant used force or fear to take the
property or to prevent the person from resisting; [¶] AND [¶] 5. When the defendant used
force or fear to take the property, she intended to deprive the owner of it permanently.
“The defendant’s intent to take the property must have been formed before or
during the time she used force or fear. If the defendant did not form this required intent
until after using the force or fear, then she did not commit robbery.
“A person takes something when he or she gains possession of it and moves it
some distance. The distance moved may be short.
5
“The property taken can be of any value, however slight.
“A person does not have to actually hold or touch something to possess it. It is
enough if the person has control over it or the right to control it, either personally or
through another person. A store employee who is on duty has possession of the store
owner’s property.
“Any force or fear caused by the Defendant after she has dispossessed property
that she is accused of stealing cannot by itself satisfy the requirement of taking the
property by force or fear but can be considered as evidence as to any of her prior actions
if the jury deems that appropriate. (Italics added.)
“Property is within a person’s immediate presence if it is sufficiently within his or
her physical control that he or she could keep possession of it if not prevented by force or
fear.
“An act is done against a person’s will if that person does not consent to the act.
In order to consent, a person must act freely and voluntarily and know the nature of the
act.
“If you find the defendant guilty of robbery, it is robbery of the second degree.”
2. The Special Instruction About the Second Altercation
In the instruction which we have quoted above, we italicized a paragraph that is
not part of the pattern instruction. That italicized paragraph is a special pinpoint
instruction that the trial court added to the text of CALCRIM No. 1600 in response to a
request by the defense that the jury be explicitly instructed that the second altercation
between Singleton and Zimmer that occurred in the mall parking lot could not be used to
establish an element of the robbery charge, although the incident could be considered for
some other purpose.
The content of this special instruction was not discussed during the hearing on jury
instructions and we find nothing in this record to suggest that there was any dispute about
it. The instruction is supported by the legal principle that a defendant who uses force
only after he or she has abandoned the victim’s property may be guilty of theft but not of
robbery. (People v. Pham (1993) 15 Cal.App.4th 61, 68.) This principle was also the
6
basis for an in limine order that the court made at the jury instruction hearing. That order
precluded the parties from arguing to the jury that the second physical altercation
between Singleton and Zimmer established the force or fear element of the robbery
charge.
As with the special jury instruction, there was no objection to the in limine order.
Instead, in light of the special instruction and the in limine order, the trial court,
prosecutor and defense counsel all agreed that a unanimity jury instruction was not
required.
3. The Escape Rule
At the request of the prosecutor, the trial court used CALCRIM No. 3261, which
is titled “the Escape Rule,” to instruct the jury about the duration of a robbery.
The court’s version of CALCRIM No. 3261 stated: “Now, the crime of robbery, if
it exists, continues until the perpetrator has actually reached a temporary place of safety.
A perpetrator has reached a temporary place of safety if he or she has successfully
escaped from the scene, and he or she no longer is being chased, and he or she has
unchallenged possession of the property. [¶] Notwithstanding the foregoing, the People
have the burden of proving each element of the crime of robbery as set forth in my
previous instruction.” (Italics added.)
The text we have italicized in this quoted instruction is not standard language in
CALCRIM No. 3261, but was added by the trial court for this case. The defense did not
object to the escape rule instruction, either when the prosecutor requested it or when the
court asked the parties to review the language of the instruction itself.
D. Jury Deliberations
During deliberations, the jury submitted a set of four questions about the robbery
charge. It asked:
1. “In depth explanation for #4 in Robbery—‘who is the person that is
resisting[?]’ ”
2. “What is definition of ‘force or fear’[?]”
3. “If ‘force’ is added for any reason to theft, is that robbery?”
7
4. “Does the ‘intent’ of force make a difference?”
The trial court discussed these questions with trial counsel off the record outside
the presence of the jury. Then, the court provided the jury with a typewritten response to
its questions which stated:
“1. The alleged ‘victim’ is the person resisting in the provision of element ‘4.’
The ‘resisting’ means resisting the loss of his or her property.
“2. There is no ‘legal’ definition for ‘force’ or ‘fear’. The jury should apply the
‘ever[y] day meaning’ to those terms.
“3. The ‘reason’ that is to be established must be one of those set forth in element
‘4’: ‘to take the property’ or ‘to prevent the person from resisting’ (as indicated above).
“4. The ‘intent’ required is set forth in element ‘5.’ ”
After the jury received these answers and deliberated a while longer, it asked to
review specific excerpts of trial testimony from three witnesses, Singleton, Zimmer and
Evans. The requested testimony, which the court provided, pertained only to events that
occurred inside the mall, i.e., before Singleton went into the parking lot where the second
physical altercation with Zimmer occurred.
After deliberating for less than a full day, the jury returned a verdict finding
Singleton guilty of second degree robbery and second degree burglary.
III. DISCUSSION
A. The Escape Rule Jury Instruction
Singleton’s primary contention on appeal is that the trial court committed
prejudicial error by using the escape rule to instruct the jury about the duration of a
robbery.
1. Issues Presented and Standard of Review
As reflected in our factual summary, the escape rule instruction told the jury that
the crime of robbery continues until the perpetrator reaches a “temporary place of safety,”
but that this rule did not alter the People’s burden of proving each of the elements of the
robbery charge which were set forth in the court’s previous instruction.
8
On appeal, Singleton does not contend that either the escape rule itself or the
specific instruction that the trial used in this case was an incorrect statement of the law.
Instead, her theory is that the escape rule was irrelevant and that instructing the jury about
that rule led them to misapply the law.2
“It is error for a court to give an ‘abstract’ instruction, i.e., ‘one which is correct in
law but irrelevant[.]’ [Citation.]” (People v. Rowland (1992) 4 Cal.4th 238, 282.) The
giving of an irrelevant instruction “is usually harmless, having little or no effect ‘other
than to add to the bulk of the charge.’ [Citation.] There is ground for concern only when
an abstract or irrelevant instruction creates a substantial risk of misleading the jury to the
defendant’s prejudice.” (People v. Rollo (1977) 20 Cal.3d 109, 123, questioned on
another ground in People v. Edwards (2013) 57 Cal.4th 658, 723.)
To evaluate this claim we examine jury instructions as a whole to determine
whether there is a “ ‘ “reasonable likelihood” ’ ” the jury misunderstood the instructions
in the manner suggested by Singleton. (People v. Huggins (2006) 38 Cal.4th 175, 192;
People v. Clair (1992) 2 Cal.4th 629, 662-663.) We presume jurors are intelligent people
capable of understanding instructions and applying them to the facts of the case. (People
v. Carey (2007) 41 Cal.4th 109, 130.)
2. The Instruction Was Relevant
Singleton’s first contention is that the escape rule instruction was irrelevant to the
robbery charge in this case. We disagree.
Robbery is “the felonious taking of personal property in the possession of another,
from his person or immediate presence, and against his will, accomplished by means of
force or fear.” (Pen. Code, § 211.) “ ‘The taking element of robbery has two necessary
elements, gaining possession of the victim’s property and asporting or carrying away the
loot.’ [Citation.]” (People v. Hill (1988) 17 Cal.4th 800, 852.) The duration of the
2
Singleton acknowledges that her trial counsel did not object to this instruction,
but she maintains the issue is not waived because it affects a fundamental due process
right and presents a pure question of law. Singleton also contends that if an objection
was required, her trial counsel rendered ineffective assistance by failing to do so.
9
robbery continues so long as the loot is being carried away to a place of temporary safety
although the commission of a robbery does not require that the robber actually escape to
a place of temporary safety. (People v. Pham, supra, 15 Cal.App.4th at p. 68.)
In this case, the duration of the charged robbery was a relevant issue for the jury
because Singleton did not use any force when she took the jeans and carried them out of
the Buckle store, but the prosecution produced evidence that she did use force while
attempting to escape with the goods when she resisted Zimmer’s efforts to retrieve the
stolen jeans from her while she was still in the mall.
“A defendant who does not use force or fear in the initial taking of the property
may nonetheless be guilty of robbery if he uses force or fear to retain it or carry it away
in the victim’s presence. [Citations.]’ [Citation.] That is, ‘[a] robbery is not completed
at the moment the robber obtains possession of the stolen property. The crime of robbery
includes the element of asportation, the robber’s escape with the loot being considered as
important in the commission of the crime as gaining possession of the property. . . . [A]
robbery occurs when defendant uses force or fear in resisting attempts to regain the
property or in attempting to remove the property from the owner’s immediate presence
regardless of the means by which defendant originally acquired the property.’
[Citation.]” (People v. McKinnon (2011) 52 Cal.4th 610, 686-687.)
When viewed in light of the trial evidence, these rules demonstrate that the escape
rule instruction was relevant to the jury’s inquiry because it clarified that the force
element of robbery could be established by evidence that Singleton used force after she
left the store with the stolen property when she used force to resist Zimmer’s efforts to
retrieve the stolen jeans. Singleton’s argument that the escape rule instruction was not
relevant ignores the actual facts of this case; she never acknowledges that the evidence
she used force to commit robbery pertained to her conduct during asportation rather than
her initial taking of the stolen goods.
Instead, Singleton takes the position that the escape rule instruction applies in only
one discrete situation, cases in which the defendant is separately charged with an
“ancillary consequence” of a crime. The rule does often come into play in that situation.
10
(See, e.g., People v. Wilkins (2013) 56 Cal.4th 333 [escape rule instruction should be
given in felony-murder case based on theory that victim killed during commission of
burglary].) But Singleton does not cite any case which precludes instruction on the
escape rule in a case like this when the jury is asked to determine whether the defendant
used force while attempting to escape with the stolen goods.
Singleton directs our attention to the Bench Note for the pattern escape rule
instruction, CALCRIM No. 3261, which states: “Give this instruction whenever the
evidence raises an issue over the duration of the felony and another instruction given to
the jury has required some act ‘during the commission or attempted commission’ of the
felony.” (CALCRIM No. 3261, Bench Notes, quoting People v. Cavitt (2004) 33 Cal.4th
187, 208.) This Note supports our conclusion that the escape rule is relevant here. First,
the evidence in this case did “raise[] an issue over the duration of the felony” because it
showed that the defendant used force against the victim in order to retain possession of
the stolen goods while she was trying to escape. Second, “another instruction,” here
CALCRIM No. 1600, required an act of force or fear “during the commission . . . of the
felony.” (Ibid.)
Furthermore, to the extent Bench Notes are pertinent, Singleton overlooks the
Bench Note for CALCRIM No. 1600, which states that “[i]f there is an issue as to
whether the defendant used force or fear during the commission of the robbery, the court
may need to instruct on this point,” and then directs the user’s attention to CALCRIM
No. 3261, the escape rule instruction. This Bench Note also references People v. Estes
(1983) 147 Cal.App.3d 23, 28 (Estes).
Although Estes, supra, 147 Cal.App.3d 23, did not involve a challenge to a jury
instruction, this case reinforces our conclusions here. The Estes defendant was convicted
of robbery of items he took from a Sears department store based on evidence that he
“forceably resisted the security guard’s efforts to retake the [stolen] property and used
that force to remove the items from the guard’s immediate presence.” (Id. at p. 27.) On
appeal, the defendant argued that he did not commit robbery because his assaultive
11
behavior was not contemporaneous with the taking of the items from the store. Rejecting
this claim, the court summarized the relevant law:
“The crime of robbery is a continuing offense that begins from the time of the
original taking until the robber reaches a place of relative safety. It is sufficient to
support the conviction that appellant used force to prevent the guard from retaking the
property and to facilitate his escape. The crime is not divisible into a series of separate
acts. Defendant’s guilt is not to be weighed at each step of the robbery as it unfolds. The
events constituting the crime of robbery, although they may extend over large distances
and take some time to complete, are linked by a single-mindedness of purpose.
[Citation.] Whether defendant used force to gain original possession of the property or to
resist attempts to retake the stolen property, force was applied against the guard in
furtherance of the robbery and can properly be used to sustain the conviction.” (Estes,
supra, 147 Cal.App.3d at p. 28.)
These same principles apply to the evidence in this case and they undermine
Singleton’s contention that the escape rule instruction was irrelevant.
3. The Instruction Was Not Misleading
Turning to the second prong of Singleton’s error analysis, she insists the escape
rule instruction was prejudicially misleading. But again, she ignores the relevant
evidence pertaining to the first altercation inside the mall. Instead, Singleton focuses
exclusively on the second altercation between herself and Zimmer which took place in
the parking lot. Her theory is that the escape rule instruction was misleading because it
invited the jury to convict her based on her use of force during the “second scuffle,” and
that second scuffle could not satisfy the force element of robbery because it occurred
after Singleton had abandoned the stolen jeans.
For purposes of this appeal, we accept Singleton’s contention that her conduct
during her second altercation with Zimmer did not constitute force for purposes of
proving the robbery charge because she abandoned the stolen property before that event
occurred. (See People v. Pham, supra, 15 Cal.App.4th at p. 68.) Although we question
whether the evidence conclusively establishes that Singleton truly abandoned the stolen
12
property before that second altercation, it appears that fact was established prior to trial.
As noted in our factual summary, the trial court made an in limine order which precluded
the parties from characterizing Singleton’s conduct during the second altercation as the
force required to commit robbery and it also gave a special jury instruction to that same
effect. Furthermore, in their appellate brief the People concede that Singleton abandoned
the stolen property before the second altercation occurred.
Thus, the question is whether it is reasonably likely that the jury misunderstood
the escape rule instruction as authorizing them to find that Singleton used force to
commit robbery by biting and hitting Zimmer during the second altercation in the parking
lot. (People v. Clair, supra, 2 Cal.4th at pp. 662-663.) Several factors indicate that the
jury was not misled in this way.
First, when read in context, the escape rule instruction did not authorize the jury to
base the robbery conviction on the second scuffle. To the contrary, the court modified
CALCRIM No. 3261 to explicitly clarify that the escape rule was not an alternative basis
for proving Singleton used force, but that it applied only in conjunction with CALCRIM
No. 1600, the previous instruction the court gave which set forth the elements of robbery
and the prosecutor’s burden of proving those elements. CALCRIM No. 1600 told the
jury that it had to find that Singleton used force or fear when she took the property or
prevented another person from resisting her efforts to retain the property. That
instruction also required the jury to find that Singleton intended to permanently deprive
the owner of his property when she used force or fear to either take or retain possession
of the property from the victim. In addition, the trial court modified CALCRIM NO.
1600 by adding a paragraph which instructed the jury: “Any force or fear caused by the
Defendant after she has dispossessed property that she is accused of stealing cannot by
itself satisfy the requirement of taking the property by force or fear but can be considered
as evidence as to any of her prior actions if the jury deems that appropriate.”
Singleton contends that this special pinpoint instruction was insufficient if not
counterproductive because it did not explicitly tell the jury not to consider the evidence
she used force during the second altercation. However, in advancing this argument,
13
Singleton overlooks a fact that her trial counsel implicitly acknowledged. 3 Her conduct
during the second altercation was relevant to the jury’s analysis of the force element of
the robbery charge even though it did not constitute the force required to commit robbery.
Evidence that Singleton used force during the second altercation and then lied to the
police about the gravity and nature of the injuries she inflicted on Zimmer supported the
prosecutor’s theory that Singleton was lying when she testified that she did not kick or
even try to kick Zimmer during the first altercation in the mall. The language in the
court’s special instruction reflects this fact while at the same time making it clear that the
force used during the second altercation outside the mall was not enough by itself to
satisfy the force element of the robbery charge.
The arguments of counsel are another factor supporting the conclusion that it is
not reasonably likely this jury was misled. Both trial counsel focused their arguments on
the question whether Singleton used force during the first altercation inside the mall.
Indeed, as noted in our factual summary, the trial court made an in limine order
precluding counsel from arguing that the second altercation satisfied the force or fear
requirement of the robbery charge. On appeal, Singleton does not contend that the
prosecutor ever violated this in limine order. In fact, she does not even acknowledge that
the order was made.
Singleton does take the position, however, that “[t]he prosecution argued that the
bite marks appellant left on the manager were evidence of her guilt.” To support this
contention, Singleton relies on a part of the prosecutor’s closing argument which
challenged the credibility of Singleton’s trial testimony. The prosecutor pointed out that
Singleton had told the police that she only scraped her teeth against Zimmer’s hand when
in fact she bit him so hard she broke the skin. The prosecutor then argued that
Singleton’s attempt to diminish the damage she inflicted during the second incident
suggested that she was also being dishonest about whether she actually kicked Zimmer
3
Not only did Singleton’s trial counsel request this special instruction, he
expressly approved the language the trial court used.
14
during the first incident. However, the prosecutor never suggested that the biting itself
satisfied the force element of the robbery charge.
A third indication that the jury was not misled came from the jury itself. As
reflected in our factual summary, the jury asked four questions about the robbery charge.
One of those questions asked whether the “reason” for the force was relevant to the
robbery charge. The court responded that the reason had to be one of those set forth in
CALCRIM NO. 1600, either to “ ‘take the property’ ” or “ ‘to prevent the person from
resisting.’ ” This exchange and the other related questions and answers foreclosed the
possibility that the jury was misled by the escape rule. Indeed, after these questions were
answered, the jury asked to review specific testimony from the percipient witnesses
which pertained only to the events that happened inside the mall—i.e., during the period
that Singleton retained possession of the stolen property and was attempting to escape
with it by resisting Zimmer’s efforts to reclaim it.
4. People v. Hodges
On appeal, Singleton relies heavily on People v. Hodges (2013) 213 Cal.App.4th
531 (Hodges). She claims this case holds that the escape rule comes into play only if the
defendant is separately charged with an ancillary consequence of the robbery and that it
also illustrates that giving an escape rule instruction outside that discrete context is
prejudicially misleading.
In Hodges, supra, 213 Cal.App.4th 531, a Safeway store security guard saw
defendant take items from the store and then followed him outside to the parking lot. The
guard confronted the defendant while he was sitting in his car but refused to take the
goods back and let the defendant leave. When defendant started his car, the guard
blocked his passage. Then the defendant got out of his car and tossed the items, hitting a
second security guard who had come to assist. When the defendant got back in his car
and tried to leave, the second guard reached inside the car and attempted to take the keys.
As he did so, the defendant moved the car into reverse causing the open door to strike the
guard, propelling him up and over the door onto the ground. (Id. at p. 536.)
15
While the Hodges jury was deliberating whether the defendant committed a
robbery, it asked a question about the force or fear element of the charge. (Hodges,
supra, 213 Cal.App.4th at p. 538.) Specifically, the jury stated that the evidence showed
that the defendant used force after he had surrendered the goods and then it asked
whether the “ ‘timing/sequence of [the] events’ ” was relevant, whether it mattered if the
theft occurred first and then the force/fear. (Ibid.) Over a defense objection, the trial
court gave the jury this answer: “ ‘With regard to Count 1, Penal Code 211, the theft is
deemed to be continuing until the defendant has reached a point in which he is no longer
being confronted by the security guards.’ ” (Ibid.) Shortly thereafter, the jury returned a
guilty verdict on the robbery charge. (Ibid.)
The Hodges court reversed the robbery conviction, finding that the trial court
abused its discretion by giving the jury an irrelevant, incomplete and misleading answer
to its question.4 (Hodges, supra, 213 Cal.App.4th at pp. 541-543.) The trial court’s
response was irrelevant because “the jury’s question did not pertain to the duration of the
theft in relation to ancillary consequences.” (Id. at p. 543.) It was incomplete because it
“failed to address the crux of the jury’s inquiry,” and it was “misleading because it
allowed the jury to conclude defendant was guilty of robbery without regard to whether
defendant intended to permanently deprive the owner of the property at the time the force
or resistance occurred.” (Ibid.)
In this case, Singleton contends that the escape rule instruction had the same
impermissible effect as the trial court’s answer to the jury’s question in Hodges. We
disagree. First, in Hodges, supra, 213 Cal.App.4th at page 543, the trial court’s statement
4
In reaching its conclusion, the Hodges appellate court observed that the trial
court’s answer was based on the escape rule, which “ ‘defines the duration of the
underlying felony, in the context of certain ancillary consequences of the felony
[citation], by deeming the felony to continue until the felon has reached a place of
temporary safety. [Citation.]’ ” (Hodges, supra, 213 Cal.App.4th at p. at 542.) But,
contrary to Singleton’s contention in this case, the Hodges court did not hold that the
escape rule applies only if the defendant is separately charged with an ancillary
consequence of a crime.
16
was irrelevant because it was not responsive to the jury’s question and because there was
no evidence in that case that the defendant used force to retain possession of the stolen
goods while he was trying to escape with them. By contrast, the escape rule instruction
that was given to the jury in this case was just one part of a set of CALCRIM instructions
pertaining to the robbery charge, it was an accurate statement of the law given without
objection, and it was relevant to the evidence that Singleton used force to resist the
victim’s effort to reclaim the stolen goods.
Second, in Hodges, the trial court’s answer was misleading because it allowed the
jury to find the defendant guilty whether or not he intended to permanently deprive the
owner of property when the force was used. (Hodges, supra, 213 Cal.App.4th at p. 543.)
Here, by contrast, the challenged instruction did not have that effect because (1) the
instruction itself was modified by the trial court to clarify that the escape rule did not alter
in any way, the prosecutor’s burden of proving each element of the robbery charge as
outlined in the prior instruction which contained a clear an accurate explanation of both
the force or fear requirement and the intent element of the robbery charge; (2) the trial
court also gave an additional pinpoint instruction which told the jury that the force or fear
requirement was not satisfied by force that Singleton used after she was dispossessed of
the stolen property; and (3) the parties were precluded by court order from ever arguing
that Singleton’s use of force during the second incident was part of the robbery.
Perhaps because this case is so different from the facts of Hodges, Singleton relies
on a hypothetical scenario that was addressed in a footnote in the Hodges decision.
There, the court stated: “Consider the following hypothetical: A person leaves a store
without paying for goods, drops the goods when confronted by a security guard, and
flees; the guard gives chase and at some point during the pursuit, the person uses force to
resist the pursuing guard’s attempt to detain him. Under this hypothetical, the escape
rule, concerning the duration of the offense, is not in play because no robbery was
committed, there being no evidence that the person intended to deprive the owner of the
property at the time force was used.” (Hodges, supra, 213 Cal.App.4th at p. 543, fn. 4.)
17
This hypothetical does not assist Singleton because it does not describe the facts of
this case. As demonstrated by our analysis above, the escape rule did “come into play” in
this case because there was substantial evidence that Singleton used force after she took
the jeans while she was trying to escape when Zimmer confronted her in the mall, and
that she used that force with the intention of permanently depriving the owner of the
property she had stolen. In addition, the escape rule instruction that was used here was
neither misleading nor incomplete for the many reasons we have outlined above.
B. Jury Unanimity
Singleton contends the trial court violated its sua sponte duty to instruct the jury
that it had to unanimously agree on the act that constituted force or fear.5
A trial court has a sua sponte duty to instruct on jury unanimity “when the
circumstances so warrant.” (People v. Davis (2005) 36 Cal.4th 510, 561 (Davis); see also
Cal. Const., art. I. § 16.) Here, Singleton argues that the circumstances warranted a
unanimity instruction because the jury heard evidence of three “separate acts” that
potentially satisfied the force element of robbery: First, there was evidence that she
exerted force during the first altercation in the mall when Zimmer tried to pull her purse
away and she held on as she fell down to the ground. Second, there was evidence that
Singleton kicked Zimmer in the groin during the first altercation. Third, there was
evidence that Singleton bit Zimmer’s hand in the parking lot.
As a factual matter, we reject the contention that the jury could have convicted
Singleton of robbery based on her use of force in the parking lot. For all the reasons
outlined above, that did not happen. Furthermore, Singleton’s attempt to create a
unanimity problem by parsing her conduct during the first altercation into separate acts of
force is legally erroneous.
5
Without separate argument, Singleton also contends that the trial court “refused”
a defense request to give a unanimity instruction. For the record, we reject that
contention. As reflected in our factual summary, the trial court and both counsel
expressly agreed on the record that a unanimity instruction was not required in light of
the court’s special instruction and in limine order regarding the limited use of the
evidence pertaining to the second altercation in the parking lot.
18
“For decades now, California law has conditioned the duty to give a unanimity
instruction on whether the evidence at trial indicates that the defendant committed more
than one ‘ “discrete criminal event.” ’ [Citation.] Where the evidence suggests that the
defendant might have committed more than one crime, the court must instruct the jury
that it must agree on which of the acts—and, hence, which of the crimes—the defendant
committed. [Citations.] Otherwise, a guilty verdict might not reflect that all 12 jurors
agreed that the defendant committed the same crime. [Citation.]” (People v. Quiroz
(2013) 215 Cal.App.4th 65, 73.)
Here, Singleton’s unanimity argument is not based on evidence that she committed
more than one discrete criminal offense, but rather on evidence that more than one of her
acts could have constituted an element of the charged offense. Where “the evidence
suggests that a defendant committed only one discrete criminal event—but may have
done so in one of several different ways—no unanimity instruction is required.
[Citations.] Unanimity is not required in this situation even if the jurors might conclude
that the defendant is guilty based on different facts, or on different findings about the acts
the defendant committed or his mental state. [Citations.] That is because, in this
situation, the jury’s guilty verdict will still reflect unanimous agreement that the
defendant committed a single crime.” (People v. Quiroz, supra, 215 Cal.App.4th at pp.
73-74.)
Singleton relies on People v. Davis, supra, 36 Cal.4th 510, without considering its
facts. In that case, a defendant charged with robbery was entitled to a unanimity
instruction because the “evidence disclosed two distinct takings,” and the “prosecutor
argued that the jury could rely on either theory to convict defendant” of the single
robbery that was charged. (Id. at pp. 561-562.) The omission of the unanimity
instruction was prejudicial because the reviewing court could not determine from the
record whether some jurors found the defendant guilty of robbery based on the first
taking while others relied solely on defendant’s second taking. (Ibid.)
Davis and other authority Singleton cites recognizes that a unanimity instruction is
necessary “to prevent the jury from amalgamating evidence of multiple offenses, no one
19
of which has been proved beyond a reasonable doubt, in order to conclude beyond a
reasonable doubt that a defendant must have done something sufficient to convict on one
count.” (People v. Deletto (1983) 147 Cal.App.3d 458, 472.) But this line of authority is
inapposite because the present case does not involve evidence of more than one robbery.
Here, there was only a single taking of property from the Buckle store in the mall. Thus,
we reject Singleton’s contention that the trial court had a sua sponte duty to give a
unanimity instruction.
C. The Trial Court’s Answer to the Jury’s Question
As noted in our factual summary, the jury asked four related questions about the
robbery charge. One of those questions was: “What is [the] definition of ‘force or
fear’?” The trial court answered: “There is no ‘legal’ definition for ‘force’ or ‘fear.’ The
jury should apply the ‘ever[y] day meaning’ to those terms.”
On appeal, Singleton contends that the trial court had an obligation under Penal
Code section 1138 (section 1138) to provide the jury with a better answer to this question
by fashioning substantive definitions of the terms force or fear.6
The appellate record reflects that the trial court and counsel discussed the jury’s
questions before the court answered them. However, there is no notation in the clerk’s
transcript or any other part of the record which even suggests that Singleton’s defense
counsel objected to any of part of the typewritten response that was provided to the jury.
If Singleton did not waive this claim of error by failing to object in the trial court, it fails
on the merits.
“ ‘When a jury asks a question after retiring for deliberation, “[s]ection 1138
imposes upon the court a duty to provide the jury with information the jury desires on
points of law.” [Citation.]’ [Citation] ‘This does not mean the court must always
6
Section 1138 states: “After the jury have retired for deliberation, if there be any
disagreement between them as to the testimony, or if they desire to be informed on any
point of law arising in the case, they must require the officer to conduct them into court.
Upon being brought into court, the information required must be given in the presence of,
or after notice to, the prosecuting attorney, and the defendant or his counsel, or after they
have been called.”
20
elaborate on the standard instructions. Where the original instructions are themselves full
and complete, the court has discretion under section 1138 to determine what additional
explanations are sufficient to satisfy the jury’s request for information. . . . But a court
must do more than figuratively throw up its hands and tell the jury it cannot help. . . . It
should decide as to each jury question whether further explanation is desirable, or
whether it should merely reiterate the instructions already given.’ [Citation.] ‘We review
for an abuse of discretion any error under section 1138. [Citation.]’ [Citation.]”
(Hodges, supra, 213 Cal.App.4th at p. 539.)
Applying these rules here, the trial court did not abuse its discretion. “The terms
‘force’ and ‘fear’ as used in the definition of the crime of robbery have no technical
meaning peculiar to the law and must be presumed to be within the understanding of
jurors.” (People v. Anderson (1966) 64 Cal.2d 633, 640.) Furthermore, “ ‘force,’ ” the
only term that was pertinent in this case, “is a factual question to be determined by the
jury using its own common sense.” (People v. Mungia, (1991) 234 Cal.App.3d 1703,
1709.)
Thus, the original instructions regarding this element of the robbery charge were
full and complete and the trial court had discretion to decide whether further explanation
was desirable. When the court’s answers to the four jury questions are read together, as
they clearly were meant to be, they demonstrate that the court made the reasonable
decision to refer the jury to the relevant portions of the instructions that had already be
given. As thoroughly discussed above, the court and parties were careful to tailor those
original instructions to account for the unique facts of this case and to ensure that the jury
would not misuse the evidence regarding Singleton’s use of force after she abandoned the
stolen property.
On appeal, Singleton contends that any presumption that this jury had some
common-sense understanding of the meaning of force was rebutted because the jury
made it clear by their question that they did not understand what the term means. We
disagree. We read the jury’s question as asking whether the law assigns some special
technical meaning to these terms. The trial court did answer that question by telling the
21
jury to employ an every-day meaning. (See, e.g., People v. Mungia, supra, 234
Cal.App.3d at p. 1709.)
Finally, Singleton argues that a legal definition of force can be fashioned from
language in published California decisions that discuss the quantum of force necessary to
prove robbery. (See, e.g., People v. Anderson (2011) 51 Cal.4th 989, 995 [“The law does
require that the perpetrator exert some quantum of force in excess of that ‘necessary to
accomplish the mere seizing of the property’ ”]; People v. Lescallett (1981) 123
Cal.App.3d 487, 491 [“ ‘The degree of force used is immaterial. All the force that is
required to make the offense a robbery is such force as is actually sufficient to overcome
the victim’s resistance . . . .’ ”].)
Again Singleton cites these cases without discussing them. They do not purport to
establish a universally applicable definition of the force element of robbery. Nor do they
have anything do with the trial court’s discretion to answer questions from a jury. Thus,
they do not alter our conclusion. The trial court did not abuse its discretion by answering
the jury’s questions the way that it did.
D. The Prosecutor’s Closing Argument
Finally, Singleton contends the prosecutor committed misconduct during closing
argument by misstating the law regarding the People’s burden of proving the elements of
the robbery charge.
1. Issue Presented
“A prosecutor’s conduct violates the Fourteenth Amendment to the federal
Constitution when it infects the trial with such unfairness as to make the conviction a
denial of due process. Conduct by a prosecutor that does not render a criminal trial
fundamentally unfair is prosecutorial misconduct under state law only if it involves the
use of deceptive or reprehensible methods to attempt to persuade either the trial court or
the jury.” (People v. Morales (2001) 25 Cal.4th 34, 44; see also People v. Wilson (2005)
36 Cal.4th 309, 337; People v. Farnam (2002) 28 Cal.4th 107, 167.)
Here, Singleton contends that her federal due process rights were violated because
the prosecutor misstated the law regarding the People’s burden of proof during her
22
closing argument to the jury. “ ‘To prevail on a claim of prosecutorial misconduct based
on remarks to the jury, the defendant must show a reasonable likelihood the jury
understood or applied the complained-of comments in an improper or erroneous manner.’
[Citation.] ‘Prosecutors have wide latitude to discuss and draw inferences from the
evidence at trial. [Citation.] Whether the inferences the prosecutor draws are reasonable
is for the jury to decide. [Citation.]’ [Citation.]” (People v. Wilson, supra, 36 Cal.4th at
p. 337.)
2. Background
During her closing argument, the prosecutor made these remarks: “With regard to
the kicking of the groin, you believe Mr. Zimmer[], you believe that the officer’s
statement, she was trying to kick him. She said she didn’t at that point because she’s
minimizing. Or you believe Miss Singleton’s completely different version now on the
stand. ‘Oh, I’m stomping my foot because I’m trying to keep my balance.’ [¶] They’re
kind of mutually exclusive. You believe him or you believe her with regard to that. You
decide. You have the witness instruction. You have the instruction about bias. You
have the fact that everyone else’s story . . . .”
Defense counsel interrupted this argument by lodging an objection that the
prosecutor was misstating the law. The trial court overruled the objection, stating: “They
have to make a credibility decision.” The prosecutor then completed this part of her
argument, stating: “It’s an issue of credibility. They
can’t both be right.”
3. Analysis
Singleton contends that the prosecutor’s argument was misconduct because she
misstated the law regarding the reasonable doubt standard of proof. Singleton reasons
that the effect of the prosecutor’s “either/or” argument about the trustworthiness of
Zimmer’s account and her own account of the incident was to reduce the People’s burden
to a preponderance of the evidence standard of proof. In other words, Singleton
contends, the prosecutor told the jury to convict on the robbery charge if Zimmer’s
account was “ ‘more likely to be true than not true.’ ” Without any independent analysis,
23
Singleton also contends that this argument mischaracterized the presumption of
innocence.
“ ‘[I]t is improper for the prosecutor to misstate the law generally [citation], and
particularly to attempt to absolve the prosecution from its prima facie obligation to
overcome reasonable doubt on all elements. [Citation.]’ [Citation.]” (People v. Hill,
supra, 17 Cal.4th at pp. 829-830.) However, “[a]t closing argument a party is entitled
both to discuss the evidence and to comment on reasonable inferences that may be drawn
therefrom. [Citations.]” (People v. Morales, supra, 25 Cal.4th at p. 44.) Furthermore, a
“ ‘prosecutor is entitled to comment on the credibility of witnesses based on the evidence
adduced at trial.’ [Citation.]” (People v. Young (2005) 34 Cal.4th 1149, 1191-1192.)
Applying these rules here, we find that it is not reasonably likely that the jury
interpreted the prosecutor’s comments in the way Singleton contends. The prosecutor’s
comments pertained to a factual conflict in the evidence: Zimmer testified that Singleton
kicked him in the groin and Singleton testified that she never kicked or even attempted to
kick Zimmer. The prosecutor’s observation that these two pieces of evidence cannot both
be true was an accurate statement about the evidence. Furthermore, her argument had
nothing to do with the legal standard of proof beyond a reasonable doubt. Instead, she
simply made the factual argument that Zimmer’s account of the incident was more
credible than Singleton’s, an argument that was based on evidence adduced at trial.
Therefore we reject Singleton’s contention that this aspect of the prosecutor’s argument
was misconduct.
24
IV. DISPOSITION
The judgment is affirmed.
_________________________
Haerle, J.
We concur:
_________________________
Kline, P.J.
_________________________
Richman, J.
25
|
11 Cal.App.2d 691 (1936)
FRANK BRYSON, as Administrator, etc., Appellant,
v.
KATHARINE L. MANHART et al., Respondents.
Civ. No. 10759.
California Court of Appeals. Second Appellate District, Division Two.
February 11, 1936.
W. C. Dalzell and Robert R. Stentz for Appellant.
Derthick, Cusack & Ganahl for Respondents.
Wood, J.
By this action the public administrator seeks to recover for the estate of George Channing Lawrence the proceeds of certain insurance policies collected and held by the defendants and to set aside the alleged fraudulent transfers of certain property made by decedent in his lifetime. Judgment was entered in favor of defendant, the trial court having found that there was no intention on the part of the decedent and defendants to hinder, delay or defraud creditors. This finding is attacked by plaintiff and a review of the evidence is necessary for a proper understanding of the problem before us.
The transactions involved covered the period from September 15, 1919, to July 4, 1928. At various intervals from the first-mentioned date to November 17, 1926, Lucy W. Whipple, aunt of decedent and a resident of Boston, on behalf of herself and as trustee for her sisters, one of whom was the mother of decedent, entrusted to decedent the sum of $271,489.02 to be invested and reinvested in their behalf. Decedent was a lawyer living in Pasadena during most of the time in which he handled the trust funds. He and defendants, husband and wife, moved to Pasadena or the vicinity of Pasadena in the year 1922. He did not maintain an office or engage in the practice of law, and so far as can be learned from the record, he did not engage in any gainful occupation. He did, however, hold in his name several pieces of real estate of comparatively small value and over a period of years bought and sold securities on the stock exchange. The total purchases in this line of activity amounted to approximately $391,000, and his sales amounted to approximately $383,000. Including purchases his total losses were approximately $35,000. No accounting was ever made between Lucy W. Whipple and decedent. She presented a claim to the public administrator based upon the trust fund she had delivered to him. This claim was approved by the public administrator and the court in the *694 sum of $196,489.02. Other debts were left by decedent amounting to approximately $25,000.
Before Mrs. Whipple entrusted funds to decedent, he carried but one insurance policy the value of which was only $4,000. While decedent was handling his aunt's funds he increased the amount of his insurance to approximately $200,000. Except in the case of one policy for a short period, which is of no consequence in this discussion, the wife of decedent, Violet Lawrence, was named beneficiary in the thirteen policies which he carried. Violet Lawrence died February 18, 1928. Thereupon the estate of George Channing Lawrence became beneficiary. On March 16, 1928, or shortly thereafter, at the request of decedent, defendant Katharine L. Manhart, his sister, was made beneficiary in each of the policies. George Channing Lawrence committed suicide on July 4, 1928. During the period in which decedent received funds from his aunt he had no difficulty in paying insurance premiums, but thereafter his financial troubles began. In December, 1926, he borrowed on two policies and borrowed $5,000 from each of two friends. During the following year he borrowed on several policies and allowed others to lapse. During his wife's illness in February, 1928, he was unable to pay for nurses and expenses immediately following her death. Between March 1, 1928, and March 16, 1928, he renewed his activities on the stock market and lost $2,512.50. Between March 16, 1928, and April 5, 1928, decedent, in addition to making Katharine L. Manhart beneficiary in all of his insurance policies, delivered to her a bill of sale of all his personal property, deeded to her all of his real property except three cemetery lots, and delivered to her his will in which she was named sole legatee and made executrix without bond. At this time some of the policies had a small cash surrender value. About April 10, 1928, decedent borrowed an automobile from a dealer friend saying he could not pay for it, and on May 8th sent the friend a note to pay for the car, enclosing a letter saying: "If I should not be on hand at its maturity ... Katharine L. Manhart, 941 South Norton Street, Los Angeles will take care of it when due." Later in May, 1928, he borrowed $1500 from the same friend. Between June 1 and June 20, 1928, he obtained $1850 by cashing checks drawn by his mother-in-law at his request, although she did not *695 owe him anything. Between June 20 and July 4, 1928, he cashed checks of the value of about $1800 drawn on a Boston bank, which were dishonored by the bank. At the time of the death of Violet Lawrence defendant Katharine L. Manhart was aware of decedent's impoverished condition. She assisted him in making the funeral arrangements. She herself loaned him $5,00 before the death of his wife, which had not been repaid.
Between July 14 and August 8, 1928, defendants received from the insurance companies the total amounts due on the policies, the sum of $191,801.55, and deposited it in five different banks in Los Angeles under fictitious names. It is claimed by defendants that the money was placed under the control of defendant Clair King Manhart as custodian only for the use and benefit of his wife. Shortly thereafter defendants paid the amounts due the friends of decedent who had loaned him money and made good the worthless checks. Defendant Clair King Manhart then went east and settled all claims against decedent except that of Lucy W. Whipple, paying out a sum total in excess of $25,000.
Defendant Katharine L. Manhart was appointed administratix with the will annexed of the estate of Violet Lawrence. Upon closing the estate there was distributed to the estate of George Channing Lawrence the sum of $5.91. Katharine L. Manhart was appointed executrix of the will of George Channing Lawrence in November, 1928. She published notice to creditors but nothing more was done in the administration until a petition for her removal was filed on June 6, 1929. She filed an inventory on June 27, 1929, showing that the assets of the estate were: A post mortem dividend on insurance of $181.08; note for $5,000 payable to decedent's mother-in-law endorsed in blank, dated March 20, 1928, due September 20, 1928, marked in the inventory "doubtful value"; loans of $1100 not evidence by any writing; and the inheritance of the estate of Violet Lawrence. Katharine L. Manhart was removed from her office as executrix and the public administrator appointed in her stead.
The trial court did not determine the value of the assets of the decedent at the time of the transfers complained of or at the time of the changes of beneficiary. The evidence of the value of the assets is contained in the testimony of defendants. Among the items claimed by them as assets is a strange "fee" *696 asserted as due from Lucy W. Whipple for handling her affairs in the sum of $70,000. Giving all of the claimed assets their highest possible value, including the "fee" of $70,000, and taking several doubtful debts due decedent's at their face value, the sum total of the decedent's estate was far less than sufficient to pay the single claim of Lucy W. Whipple.
[1] A review of the evidence leads unerringly to the conclusion that at the time of the transfers of property and changes of beneficiary the decedent was hoplessly insolvent and that the trial court's findings that the transfers and changes of beneficiary were not made to defraud creditors are not supported by the evidence. This conclusion must be reached upon a consideration of the evidence in a light most favorable to defendants.
Among the findings appears the following: "The court also finds there were certain other assets of George Channing Lawrence, deceased, which were transferred to defendant Katharine L. Manhart, but during the course of trial, plaintiff herein abandoned all right he might have in and to the assets." We find nothing in the record to justify this finding. Plaintiff is entitled to pursue the property fraudulently transferred and to force an accounting thereof from defendants.
[2] The findings are silent on the question whether decedent died by his own hand and defendants now contend that it was not established that decedent took his own life. Many circumstances were shown in evidence indicating suicide. A certificate from the registrar of vital statistics was presented certifying to the coroner's certificate of death in which the cause of death is given as follows: "Gun shot wound of brain, suicidal." The certificate was evidence of the facts therein stated. (Stats. 1915, p. 575; Estate of Lenci, 106 Cal.App. 171 [288 P. 841]; Robinson v. Western States Gas & Elec. Co., 184 Cal. 401 [194 P. 39].) No contrary showing was made.
[3] Defendants contend that the claim of Lucy Whipple was not filed within the time allowed by law and therefore it should not have been received in evidence. An unverified claim was presented well within the legal time and thereafter a verified amended claim was filed bearing and endorsement that it had been approved by the public administrator. The date of its presentation to the public administrator was not shown. The code required the claimant either to file her claim *697 with the clerk or to present it to the administrator. After its approval by the public administrator the claim was approved by the court. It will not now be presumed that it was presented to the public administrator beyond the legal time limit. Moreover, the allowance of the claim is not subject to attack in this action.
[4] In view of the facts as set forth above it is clear that the transfers of the real estate and personal property are void. The transactions are covered by section 3439 of the Civil Code: "Every transfer of property or charge thereon made, every obligation incurred, and every judicial proceeding taken, with intent to delay or defraud any creditor or other person of his demands, is void against all creditors of the debtor, and their successors in interest, and against any person upon whom the estate of the debtor devolves in trust for the benefit of others than the debtor."
The contention of plaintiff, that creditors may recover proceeds of insurance policies paid as the result of fraudulent changes of beneficiary by the insured while insolvent, must be upheld. Counsel have not called to our attention any California case involving a fraudulent change of beneficiary under circumstances similar to those of our case. The rule sought to be applied has been sustained in a number of other jurisdictions. In Pope v. Carter, 210 Ala. 533 [98 So. 726] the court said: "Life insurance, taken out, and premiums paid by the insured, and payable to his estate, is property subject to the payment of his debts. A voluntary conveyance or transfer of such policies of insurance is constructively fraudulent and void, as against the existing creditors of the insured. Proceeds of policies so carried by the husband, payable to his estate, and transferred to his wife by a change of the beneficiary named in the policies made after the husband has become insolvent, without valuable consideration, are subject to the claims of the husband's creditors existing at the time of such transfer. Such transaction is subject to all the rules governing fraudulent conveyances." In Continental Nat. Bank v. Moore et al., 84 App. Div. 419 [82 N.Y. Supp. 302], the insured was a bank teller who while insolvent was arrested for embezzlement. His insurance had been payable to his estate. A creditor obtained judgment setting aside the assignment of the insurance policy to his wife and directing payment of the proceeds to the creditors. In affirming the judgment the court *698 said: "Pending the examination of the criminal charges against him, he ordered the change of beneficiaries and took his own life. These events occurred in such rapid succession that in the absence of any other explanation they fairly justify the inference that the decedent, contemplating the act which he shortly thereafter committed, knew that if the policies remained payable to his estate the insurance would go to his creditors, and for the purpose of averting that, and leaving them without redress, he directed the change of beneficiary." In Navassa Guano Co. v. Cockfield, 253 Fed. 883 [6 A.L.R. 1168], the insured held a policy payable at his death to his legal representative, with no surrender value. Being informed that he would soon die he substituted his brother as beneficiary. In holding the transaction fraudulent as to creditors the court said: "The insured knew that he was about to die; he had been told so by his brother. He therefore knew, or at least supposed, that presently, and long before another premium would be payable, the full amount of his policy, less the small note secured thereby, would some into the hands of his executors and be subject to the claims of creditors. The only reasonable inference is that in these circumstances he undertook to turn over to his brother, to whom it was a pure donation, the insurance money which otherwise would go to the payment of his debts. This being so, we think it cannot be said that the transferred policy was valueless. On the contrary, as it seems to us, the fact of impending death, the practical certainty that the life of the insured would end within a few days, operated to remove the element of contingency, and gave to the policy at the time of its transfer an actual pecuniary value closely approximating its face amount. The terms of the policy relating to surrender value may be controlling, when the insured entertains the ordinary expectation of life; but they should not be permitted to shield a gratuitous transfer to the prejudice of creditors, when he knows that death is an early certainty. Nor can the transfer in question be defended on the ground of difference between conscious and constructive fraud, for it is familiar doctrine that every man must be presumed to intend the natural consequences of his acts. The insurance procured by Cockfield was by his direction made payable to his legal representatives, and it thereby became, whatever its value, an asset of his estate. When he sought to change the beneficiary, he knew that *699 death was near, and that the proceeds of the policy, if not transferred, would soon be paid to his executors; and he was therefore chargeable with the results of his action, even if he lacked the intention of defrauding his creditors. In short, we are convinced that the transaction under review was fraudulent as to creditors and must be so adjudged." (See, also, Gould v. Fleitmann, 230 N.Y. 569 [130 N.E. 897]; Bailey v. Wood et al., 202 Mass. 562 [89 N.E. 149]; Iden v. Huber et al., 259 Mich. 3 [242 N.W. 818]; Ionia County Sav. Bank v. McLean, 84 Mich. 625 [48 N.W. 159]; In re McKown's Estate, 198 Pa. 96 [54 Atl. 1111].)
Defendants have cited the case of North British etc. Ins. Co. v. Ingalls, 109 Cal.App. 147 [292 P. 678]. That case, however, does not aid in the solution of our problem, since a change of beneficiary was not involved and the trial court found, the appeal being upon the judgment roll, that the insured was not insolvent at the time of his death.
[5] By the provisions of section 956a of the Code of Civil Procedure the reviewing court may in proper cases make findings contrary to those made by the trial court based on evidence adduced before the trial court. Under any reasonable view of the evidence the allegations of the complaint must be upheld. This court therefore finds all of the allegations of the complaint to be true.
The judgment is reversed and the cause remanded to the superior court with directions to enter judgment vacating and setting aside the transfers and assignments referred to in the complaint and to grant plaintiff relief in accordance with the prayer of the complaint.
Crail, P. J., and McComb, J., pro tem., concurred.
|
26 F.3d 122
1994 A.M.C. 2704
Interpool Limited, Iccu Containers, S.P.A.v.M/V Tyson Lykes, f/k/a Delaware Bay, M/V Tillie Lykes, f/k/aM/V Chesapeake Bay, their Engines, Boilers, TackleAppurtenances, Freights, Subfreights,Interpool Limited
NO. 93-5447
United States Court of Appeals,Third Circuit.
Apr 01, 1994
Appeal From: D.N.J.,
Sarokin, J.
1
AFFIRMED.
|
721 P.2d 1236 (1986)
Paul CARRIER and Kuniyuki & Chang, a Hawaii general partnership, Plaintiffs-Appellants,
v.
HAWAII INSURANCE GUARANTY ASSOCIATION, an unincorporated association, Defendant-Appellee.
No. 11020.
Supreme Court of Hawaii.
July 18, 1986.
Glenn M. Nagata, Kuniyuki & Chang (Ken T. Kuniyuki, with him on the briefs), Honolulu, for plaintiffs-appellants.
Gene K. Lau, Rice, Lee & Wong (Larry C.Y. Lee, with him on the brief), Honolulu, for defendant-appellee.
Before LUM, C.J., and NAKAMURA, PADGETT, HAYASHI and WAKATSUKI, JJ.
LUM, Chief Justice.
This case involves interpretation of the Hawaii Insurance Guaranty Association Act found in Hawaii Revised Statutes (HRS) Chapter 431D. The issue is whether the Hawaiian Insurance Guaranty Association (HIGA) must pay for a claimant's attorney's fees where the claimant's insurance company has become insolvent and the claimant has received insurance compensation up to the policy limit. In this situation, for the reasons stated below, we find that HIGA is in fact obligated to pay the insured's attorney's fees.
*1237 I.
On May 3, 1983, Appellant Paul Carrier purchased and received a six-month no-fault automobile insurance policy pursuant to HRS Chapter 294 from the Financial Security Insurance Company (FSIC) which provided $50,000 in personal injury protection. On May 28, 1983, Carrier was involved in an automobile accident. He made a claim for no-fault benefits, but FSIC refused to honor his claim. Carrier was forced to file suit against FSIC through the law firm of Kuniyuki & Chang (K & C). The circuit court granted summary judgment and awarded him no-fault benefits plus interest. The order also awarded K & C its attorney's fees. FSIC issued two drafts to K & C, but each was dishonored.
On October 5, 1984, FSIC was declared insolvent. Appellee HIGA undertook FSIC's obligations as provided in HRS Chapter 431D.[1] HIGA picked up payments that FSIC had been making for Carrier's medical expenses and lost wages. When the total amount of benefits Carrier received reached $50,000, HIGA ceased further payments. K & C made several requests for the payment of its fees, but HIGA denied the requests claiming that Carrier's attorney's fees were not part of its obligations and that in any event it was not required to pay anything beyond the $50,000.
Appellants Carrier and K & C then initiated this suit against HIGA on the issue of attorney's fees. The circuit court granted HIGA's motion for summary judgment finding that as a matter of law HIGA did not have to pay the fees.
II.
Carrier's automobile insurance policy expressly included attorney's fees as part of its coverage. It stated in relevant part:
No-Fault benefits shall consist of and be defined as:
....
(G) Attorney Fees and Costs. Reasonable attorney fees based upon actual time expended and costs of settlement or suit, necessary to effect payment of any or all No-Fault benefits found due under this coverage.
Clearly then, had FSIC been solvent, it would have been liable for Carrier's attorney's fees.
FSIC, however, was declared insolvent and under HRS § 431D-8(a), HIGA was essentially placed in the shoes of FSIC to the extent of "covered claims." HRS § 431D-5(3) (1985) defines "covered claim" as follows:
"Covered claim" means an unpaid claim... which arises out of and is within the coverage and not in excess of the applicable limits of [the] insurance policy....
In the present case, Carrier's claim arose from his need for legal representation after FSIC refused to honor its policy. The claim is clearly "within the coverage" because HRS § 294-2(10)(D)(iii) (1985) and the policy itself expressly include attorney's fees as part of a claimant's no-fault benefits.[2] The remaining issue in determining whether the claim for attorney's fees is a "covered claim" is whether it *1238 exceeds the "applicable limits of [the] insurance policy."
HIGA contends that the $50,000 policy "limit" expressed the maximum amount of FSIC's obligation to Carrier. Since the cumulative payments by FSIC and HIGA reached $50,000, HIGA argues that under HRS §§ 431D-5(3) and 431D-8(a), it has no further duty to pay. We will not construe Chapter 431D as Appellant contends. To do so would negate the clear and unambiguous language of Chapter 294. In the absence of clear statutory language to that effect, we hold that Chapter 294 is controlling.
HRS Chapter 294, which sets out Hawaii's no-fault auto insurance laws, unambiguously imposes financial obligations on the insurer beyond the policy's stated limit. HRS § 294-4(5) (1985) mandates that "[t]he insurer shall pay, subject to section 294-30, in addition to no-fault benefits due, all attorney's fees and costs of settlement or suits, necessary to effect the payment of any or all no-fault benefits found due under the contract." (Emphasis added). In addition, HRS § 294-30 (1985) requires that attorney's fees be treated separately from the claim of no-fault benefits and should be paid directly by the insurer to the attorney.[3] Thus, assuming FSIC was still solvent, it not only would have been required to pay for Carrier's medical expenses and lost wages up to the $50,000 limit, it also would have had to pay to Carrier's attorney's fees regardless of the $50,000 policy limit.
HIGA cites the case of Sands v. Pennsylvania Insurance Guaranty Association, 283 Pa.Super. 217, 423 A.2d 1224 (1980), to support its argument. In Sands, claimant was denied interest payment beyond his policy limit under the Pennsylvania Insurance Guaranty Association Act which is virtually identical to Hawaii's insurance guaranty laws.
HIGA contends that under Sands, it is not obligated to pay more than the policy's stated limit. Sands involved interest payment, an item which was not included in the insurance policy or the Pennsylvania no-fault statutes. Consequently, we distinguish Sands from the case at hand and remain unpersuaded by its holding.
HIGA's final argument stems from its interpretation of HRS § 294-4(5) which states:
No part of no-fault benefits paid shall be applied in any manner as attorney's fees in the case of injury or death for which the benefits are paid. The insurer shall pay, subject to section 294-30, in addition to the no-fault benefits due, all attorney's fees and costs of settlement or suit, necessary to effect the payment of any or all no-fault benefits found due under the contract. Any contract in violation of this provision shall be illegal and unenforceable, and it shall constitute an unlawful and unethical act for any attorney to solicit, enter into, or knowingly accept benefits under any such contract.
HIGA argues that in the present case, Carrier's insurance policy provision which includes attorney's fees as part of no-fault benefits violates the above statute and so is illegal and unenforceable.
We find no merit to HIGA's argument. In order to prevent the perceived evil of attorneys extracting their fee from the insurance benefits meant for the claimant, HRS §§ 294-4(5) and 294-30 treat attorney's fees separately from other no-fault benefits and require the insurer to pay them directly to the attorney. Hse.Conf. *1239 Comm.Rep. No. 39, in 1977 House Journal, at 1263; Hse.Conf.Comm.Rep. No. 13, in 1973 House Journal, at 1221. In this context, HRS § 294-4(5) is intended to prohibit contracts between an insured person and an attorney which would allow attorney's fees to be paid from the claimant's insurance award.
We reverse and remand this case and order the lower court to grant judgment in favor of Appellants.
NOTES
[1] HRS § 431D-8(a) (1985), which establishes the powers and duties of HIGA, states in relevant part:
The association [HIGA] shall:
(1) Be obligated to the extent of the covered claims existing prior to the determination of insolvency.... In no event shall [HIGA] be obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises.
(2) Be deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent. (Emphasis added).
[2] HRS § 294-2(10)(D)(iii) states in relevant part:
"No-fault benefits" ... means ... [a]ll appropriate and reasonable expenses necessarily incurred as a result of such accidental harm, including ... attorney's fees and costs to the extent provided in section 294-30(a).
[3] HRS § 294-30(a) states:
A person making a claim for no-fault benefits may be allowed an award of a reasonable sum for attorney's fees, and reasonable costs of suit in an action brought by or against an insurer who denies all or part of a claim for benefits under the policy, unless the court or the commissioner, upon judicial or administrative proceedings, respectively, determines that the claim was fraudulent, excessive, or frivolous. Reasonable attorney's fees, based upon actual time expended, shall be treated separately from the claim and be paid directly by the insurer to the attorney.
|
478 S.E.2d 418 (1996)
223 Ga. App. 578
O'DELL et al.
v.
ST. PAUL FIRE & MARINE INSURANCE COMPANY et al.
No. A96A1243.
Court of Appeals of Georgia.
November 18, 1996.
*419 James E. Goodman, Atlanta, for appellants.
Tittsworth, Grabbe & Spillers, Jennie E. Rogers, Atlanta, Stokes, Lazarus & Carmichael, William K. Carmichael, Michael J. Ernst, Atlanta, for appellees.
SMITH, Judge.
This declaratory judgment action was filed by Daniel Lee O'Dell and two companies owned by him, DRACS Consulting Group, Inc. (DRACS) and Direct Recruiting Associates (DRA), against St. Paul Fire & Marine Insurance Company and Tracey Gilleland. O'Dell and his companies appeal from the trial court's grant of St. Paul's motion for summary judgment and its denial of their motion for summary judgment.
It is necessary to relate the pertinent facts regarding the underlying tort action from which this action arose. On September 16, 1994, Gilleland filed a complaint against O'Dell, DRACS, and DRA. She alleged that O'Dell sexually taunted and harassed her, with the knowledge of DRACS and DRA, during her employment as office manager by DRACS and DRA from October 1991 to March 26, 1993. The complaint described numerous crude sexual comments and lascivious gestures made by O'Dell specifically to and about Gilleland. For example, Gilleland alleged that O'Dell called her a "whore" and a "slut" and that when she "would walk into a room in front of O'Dell, he would say to the others present, `I could have that if I wanted it.'" Another allegation was that O'Dell used a stick to lift up Gilleland's skirt and would hit the tops of her feet with the stick "in order to humiliate [her], in front of several employees." He also allegedly entered Gilleland's office on several occasions and made gestures as if he wished her to perform oral sodomy. When she protested and cried, he allegedly laughed. In fact, Gilleland alleged that "[o]ne of ... O'Dell's favorite pastimes was to do whatever mean or harassing thing to [Gilleland] that he could think of in order to cause [her] to cry in her office and in front of people." Based on these as well as several other factual allegations of outrageously crude and lascivious conduct, Gilleland sought damages for claims of assault, battery, intentional infliction of emotional distress, sexual harassment, and negligent retention of employment.
O'Dell sought coverage from St. Paul, the insurer who had issued commercial general liability coverage to O'Dell's companies, under three successive policies. St. Paul refused to defend the lawsuit on the grounds that the damages sought by Gilleland were not covered and that certain exclusions precluded coverage. O'Dell filed this declaratory judgment action to determine the obligations of the parties with respect to the policies. O'Dell appeals the trial court's ruling that St. Paul was not obligated to defend the lawsuit.
"An insurer's duty to defend is determined by the insurance contract; and since the contract obligates the insurer to defend claims asserting liability under the policy, even if groundless, the allegations of the complaint are looked to to determine whether a liability covered by the policy is asserted." (Citations and punctuation omitted.) Brayman v. Allstate Ins. Co., 212 Ga.App. 96(1), 441 S.E.2d 285 (1994). See also Al Who Enterprises v. Capitol Indem. Corp., 217 Ga.App. 423, 426(1), 457 S.E.2d 696 (1995). The critical issue is "whether the suit alleges a claim that is covered by the policy. [Cit.]" Cantrell v. Allstate Ins. Co., 202 Ga.App. 859, 860, 415 S.E.2d 711 (1992). We therefore must compare the terms of the insurance contract to the allegations in the complaint to determine whether the Gilleland lawsuit seeks damages for covered claims.
St. Paul's duty to defend is described in the policies as follows: "Right and duty to defend. We'll have the right and duty to defend any claim or suit for covered injury or damage made or brought against any protected person." The policies recite that they cover four types of injuries: (1) bodily injury; (2) property damage; (3) personal injury; and (4) advertising injury. It appears to be undisputed that the claims for which O'Dell seeks coverage are Gilleland's claims for bodily and personal injury.
*420 1. Bodily injury. In the policies effective from March 15, 1991 through March 15, 1993, bodily injury is defined as "physical harm, including sickness or disease, to the health of others. It also includes death resulting at any time from such harm." The successor policy, in effect eight days before Gilleland's termination, defined bodily injury as "any physical harm, including sickness or disease, to the physical health of other persons. It includes any of the following that result at any time from such physical harm, sickness or disease: mental anguish injury or illness; emotional distress; care, loss of services, or death."
In Georgia, "used in an insurance policy, the term `bodily injury' means just that`bodily injury.' It pertains to physical injury to the body. It does not include non-physical, emotional or mental harm. And it cannot be equated with a broader term `personal injury.'" (Citations and punctuation omitted.) Brayman, supra, 212 Ga.App. at 96-97(1), 441 S.E.2d 285. Although Gilleland alleged emotional distress in her lawsuit, she did not allege that such distress resulted from physical harm or injury. Consequently, those allegations do not constitute bodily injury as defined by the policies. See Brayman, supra; Wilmington Island Constr. Co. v. Cincinnati Ins. Co., 179 Ga.App. 477, 479(2), 347 S.E.2d 308 (1986).
Moreover, even assuming that Gilleland's complaint alleged bodily injury as contemplated by the policies, all policies recite that coverage applies if bodily injury arises out of an "event." They define event as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (Emphasis supplied.) Although the policies do not define accident, "in Georgia an accident is defined as an event which takes place without one's foresight or expectation or design. An accident refers to an unexpected happening rather than one occurring through intention or design. Acts could not be unexpected unless they were accidental." (Citations and punctuation omitted.) Southern Guaranty Ins. Co. v. Phillips, 220 Ga.App. 461, 462(1), 469 S.E.2d 227 (1996). See also Brayman, supra at 97(1), 441 S.E.2d 285. Given the allegations that O'Dell committed sexual harassment and assault and battery, which are by their nature intentional, we cannot conclude that bodily injury, if any, was caused by an accident. See id.; Presidential Hotel v. Canal Ins. Co., 188 Ga.App. 609, 611, 373 S.E.2d 671 (1988). Consequently, the allegations of bodily injury do not fall within the policies' definitions of "events" and are not covered.
O'Dell also claims that St. Paul must defend the lawsuit on behalf of DRACS and DRA because Gilleland alleged facts on which a cause of action for negligent retention of O'Dell could be based. We note initially that the policy does not recite that it covers losses due to negligent retention. But even if this were true, the complaint does not allege that Gilleland suffered bodily injuries, and even assuming she did suffer bodily injuries, she did not allege that those injuries were caused by an accident and thus were brought about by an "event."
2. Personal injury. The policies all recite that St. Paul will provide coverage for the following specific personal injuries that result from business activities: "false arrest, detention, or imprisonment; malicious prosecution; wrongful entry or wrongful eviction; libel or slander; written or spoken material made public which belittles the products or work of others; written or spoken material made public which violates an individual's right of privacy."[1] Although Gilleland did not specifically make a claim that O'Dell committed any of these offenses, O'Dell argues that the lawsuit nevertheless alleged facts on which a cause of action for slander (which is a covered personal injury) could be based. According to O'Dell, "recovery [for slander] could have been possible under an unstated cause of action based on the facts that were alleged."
*421 We do not reach here the issue of whether an insurer is obligated to defend an as yet "unstated cause of action." Even assuming that the complaint somehow provided notice to St. Paul that Gilleland raised a slander claim, Gilleland's lawsuit was filed more than one year after her employment was terminated on March 23, 1993. An action for slander was therefore barred by the one year statute of limitation pursuant to OCGA § 9-3-33.
O'Dell argues that a statute of limitation defense is an affirmative defense and is waived if not raised in an answer. The defense is indeed affirmative in nature, OCGA § 9-11-8(c), but St. Paul has not waived it. "The purpose of the requirement that affirmative defenses be pleaded is to prevent surprise and to give the opposing party fair notice of what he must meet as a defense. If it is not pleaded it is generally held that the defense is waived, but if it is raised by motion, or by special plea in connection with the answer or by motion for summary judgment there is no waiver." (Citations and punctuation omitted; emphasis supplied.) Brown v. Moseley, 175 Ga.App. 282, 283(1), 333 S.E.2d 162 (1985). See also Fortier v. Ramsey, 136 Ga.App. 203, 206(2), 220 S.E.2d 753 (1975) (statute of limitation can be raised in opposition to motion for summary judgment). St. Paul raised the statute of limitation defense at the first practical opportunity_____in its response to O'Dell's motion for summary judgment, in which O'Dell raised the issue that facts appeared in the Gilleland lawsuit supporting an action for slander.[2] The slander issue was first actually raised by O'Dell in connection with the parties' respective motions for summary judgment. Since St. Paul immediately responded to that issue after it was raised by O'Dell, O'Dell cannot claim that he was surprised, and the purpose behind the rule that affirmative defenses be pled was met. The lawsuit was filed after the statute of limitation ran on any slander claim, and St. Paul has no duty to defend against Gilleland's lawsuit. Accordingly, the trial court did not err in granting St. Paul's motion for summary judgment and denying O'Dell's motion for summary judgment.
Judgment affirmed.
POPE, P.J., and ANDREWS, J., concur.
NOTES
[1] In the third policy, personal injury offenses are almost identically defined, except for the language describing the last two enumerated offenses. The third policy recites that personal injuries include "making known to any person or organization written or spoken material that belittles the products, work or completed work of others [and] making known to any person or organization written or spoken material that violates an individual's right of privacy."
[2] We note that in connection with this action for declaratory judgment, O'Dell requested that Gilleland's lawsuit be enjoined. The trial court honored that request by enjoining Gilleland from further action in her lawsuit by order dated February 17, 1995.
|
STATE OF MICHIGAN
COURT OF APPEALS
ZOLTAN A. LANCZY, UNPUBLISHED
October 16, 2014
Plaintiff-Appellee,
v No. 317356
Baraga Circuit Court
Family Division
KATHY L. LANCZY, LC No. 2012-006286-DO
Defendant-Appellant.
Before: MURPHY, C.J., and SAWYER and M. J. KELLY, JJ.
PER CURIAM.
Defendant, Kathy L. Lanczy, appeals by right the trial court’s judgment of divorce.
Specifically, she contends the trial court’s division of the marital estate was inequitable and
argues the trial court should have ordered plaintiff, Zoltan A. Lanczy, to pay more spousal
support for a longer period of time. Because we conclude there were no errors warranting relief,
we affirm.
I. BASIC FACTS
The parties married in 2001. During the marriage, Zoltan Lanczy, who holds a degree in
engineering, worked as a self-employed auto mechanic and later as a carpenter. In June 2010,
Zoltan Lanczy travelled to Bagdad, Iraq, where he worked as a groundskeeper at a prison, an
incinerator operator at a landfill, and eventually as a carpenter. His income significantly
increased as a result of this employment. After leaving for Iraq, Zoltan Lanczy expressed his
desire for a divorce.
Zoltan Lanczy suffered a severe injury—including a brain injury—after falling from a
ladder while working in Iraq in February 2012. He received workers’ compensation benefits.
By the time of trial, he had recovered sufficiently to be able to work again and had found a job in
Grand Rapids, which paid $40,000 to $44,000 per year. Kathy Lanczy suffers from fibromyalgia
and severe arthritis. Her only independent source of income is social security disability.
Zoltan Lanczy inherited approximately 25 acres of land before the marriage. While still
single, he gifted a five-acre parcel of the land to Kathy Lanczy in order to enable her to get a
construction loan. The marital home, which was titled only in Kathy Lanczy’s name, was built
on the five-acre parcel. Testimony established that there was $67,000 still owed on the home.
-1-
Zoltan Lanczy retained the remaining 20 acres. He also owned a number of cars, motorcycles,
and other vehicles, which were scattered across both parcels.
Zoltan Lanczy sued Kathy Lanczy for a divorce in May 2012. In August 2012, the trial
court entered an order compelling Zoltan Lanczy to pay Kathy Lanczy $1,500 each month in
temporary spousal support.
Following a bench trial, the court awarded Kathy Lanczy the marital home and the five
acres of land on which it sits, and provided that Zoltan Lanczy would keep the 20 acres of
adjacent land. The trial court awarded both parties the personal property found within the
boundaries of their respective parcels, including “the vehicles that remain on their real property
in whatever condition they may be in.” The court also ordered Zoltan Lanczy to pay $3,700 to
Kathy Lanczy to equalize the value of their banking and retirement accounts. The court awarded
Zoltan Lanczy the four vehicles that he acquired post-separation, which included the only
functioning vehicle in the parties’ possession, a Dodge Intrepid. The trial court provided that
each party would also be responsible for his or her personal debts and Kathy Lanczy would be
responsible for the debt on the marital home.
Regarding spousal support, the trial court found that Zoltan Lanczy had a job offer for a
job paying $40,000 to $44,000 per year in addition to a workers’ compensation award, while
Kathy Lanczy was receiving $6,588 in annual Social Security benefits. The court found that the
standard of living of the parties had only recently risen due to Zoltan Lanczy’s overseas
employment. The court found that he had abandoned the marriage soon after finding more
lucrative employment, and that Kathy Lanczy “will need a period of time to adjust to the change
in life circumstances.” The court further stated that Kathy Lanczy had greater need because she
was responsible for the debt on the marital home. Accordingly, the court ordered Zoltan Lanczy
to pay “modifiable spousal support in the amount of $1,500.00 per month . . . for a period of 60
months, commencing December 1, 2012.” The court also ordered him to pay $1,000 of Kathy
Lanczy’s attorney fees because she was unable to bear the expense.
Thereafter, Kathy Lanczy moved for reconsideration. She argued that the court made a
palpable error in failing to fully take account of the parties’ circumstances, particularly her
financial need, lack of transportation, disability, and Zoltan Lanczy’s superior financial position
and fault in causing the divorce. She asked the trial court to order Zoltan Lanczy to pay one half
of the debt on the home, to clean up his real property, and to pay one half of all outstanding
debts. She also asked the trial court to award her a vehicle in working condition and to extend
the spousal support to at least the length of the marriage.
The trial court denied the motion and Kathy Lanczy now appeals in this Court on her own
behalf.
II. DIVISION OF THE MARITAL ESTATE
Kathy Lanczy argues that the trial court’s ruling on the division of debt was unfair
because she was left with the entire responsibility for the debt on the marital home. She asserts
that the debt division should have been “50/50.” On review, we consider “the trial court’s
findings of fact under the clearly erroneous standard. If the findings of fact are upheld, [we]
-2-
must decide whether the dispositive ruling was fair and equitable in light of those facts.” Sparks
v Sparks, 440 Mich 141, 151-152; 485 NW2d 893 (1992). The trial court’s dispositional ruling
will be upheld, unless we are “left with the firm conviction that the division was inequitable.”
Id. at 152.
On the basis of the testimony and exhibits, the trial court found that Zoltan Lanczy had a
total of $15,690 in personal debts, Kathy Lanczy had a total of $8,999 in personal debts other
than the debt on the marital home, and they had $514 in joint debts. These totals accurately
reflect the amounts shown on the parties credit reports that were admitted into evidence at trial.
Because the trial court’s findings are based on the evidence in the record, and no argument has
been offered to show that the evidence is inaccurate or incomplete, the trial court’s findings of
fact were not clearly erroneous.
Moreover, the court’s dispositional ruling was equitable. See Sands v Sands, 442 Mich
30, 35; 497 NW2d 493 (1993). Kathy Lanczy was the sole owner of the marital home before the
marriage and was awarded sole ownership in the divorce. It was not inequitable, under the
circumstances, for the trial court to require her to continue to be solely responsible for the debt
on the property she owns. Further, the trial court did account for her increased obligations when
it considered whether and to what extent it should order spousal support. The trial court also
ordered Zoltan Lanczy to pay Kathy Lanczy $3,700 to equalize the value of the parties’ accounts
and ordered him to pay $1,000 in attorney fees on Kathy Lanczy’s behalf. Under the
circumstances, we conclude that the court crafted an equitable division of property and assets.
It was likewise, not an inequitable result to award Zoltan Lanczy the vehicles he acquired
after the parties’ separation. Kathy Lanczy asked the trial court to order Zoltan Lanczy to turn
over one of his vehicles after putting it into working order, but the trial court declined to do so.
Given that the trial court attempted to make the division of assets roughly equal, and awarded
Kathy Lanczy spousal support, the fact that the trial court did not award her a vehicle in working
condition does not render the property division inequitable.
On the record before us, we are not left with the firm conviction that the division was
inequitable. Sparks, 440 Mich at 152.
III. SPOUSAL SUPPORT
Kathy Lanczy also argues that the trial court should have provided her with more
generous spousal support. We review the court’s decision to award spousal support for an abuse
of discretion, but review the factual findings underlying its decision for clear error. Loutts v
Loutts, 298 Mich App 21, 25-26; 826 NW2d 152 (2012). A trial court abuses its discretion when
its “decision falls outside the range of reasonable and principled outcomes.” Id. at 25.
Upon entry of a judgment of divorce or separate maintenance, if the estate
and effects awarded to either party are insufficient for the suitable support and
maintenance of either party . . . the court may also award to either party the part of
the real and personal estate of either party and spousal support out of the real and
personal estate, to be paid to either party in gross or otherwise as the court
considers just and reasonable, after considering the ability of either party to pay
-3-
and the character and situation of the parties, and all the other circumstances of
the case. [MCL 552.23(1).]
“The object in awarding spousal support is to balance the incomes and needs of the
parties so that neither will be impoverished; spousal support is to be based on what is just and
reasonable under the circumstances of the case.” Loutts, 298 Mich App at 26 (quotation marks
and citation omitted). In deciding whether to award spousal support, the trial court should
consider several factors, including
(1) the past relations and conduct of the parties, (2) the length of the marriage, (3)
the abilities of the parties to work, (4) the source and amount of property awarded
to the parties, (5) the parties’ ages, (6) the abilities of the parties to pay alimony,
(7) the present situation of the parties, (8) the needs of the parties, (9) the parties’
health, (10) the prior standard of living of the parties and whether either is
responsible for the support of others, (11) contributions of the parties to the joint
estate, (12) a party’s fault in causing the divorce, (13) the effect of cohabitation on
a party’s financial status, and (14) general principles of equity. [Id. at 31
(quotation marks and citations omitted).]
The trial court considered and discussed each of these factors. It found that Zoltan
Lanczy had a greater ability to work and pay support. The trial court also found that Kathy
Lanczy had the need for spousal support because her only income is from Social Security and
she is responsible for the debt on the marital home. The court determined that equity weighed in
favor of awarding spousal support because Zoltan Lanczy abandoned the marriage and was now
in a superior financial position.
Kathy Lanczy has not challenged the trial court’s factual findings, but argues that the
court’s award of $1,500 per month for 60 months is inadequate. She asserted in her motion for
reconsideration that the trial court “did not fully take into account the fact” that Zoltan Lanczy
effectively lived off her “until she became disabled and unable to work at which point he
promptly left her to pursue a lucrative career on his own.” It is clear from the record that the trial
court did take these facts into account. Although the trial court did not comment on whether
Kathy Lanczy supported Zoltan Lanczy during the marriage, it did find that he “abandoned the
marriage and is in a superior financial position to support himself.” Kathy Lanczy may have
wanted to weigh these circumstances more heavily in her favor, but she failed to show how the
court erred in not doing so.
She has also not demonstrated that the trial court’s decision to order spousal support of
$1,500 per month for 60 months fell outside the range of reasonable and principled outcomes.
She testified that at the time of the trial she was paying $506 per month for the mortgage, and
that she had previously been paying $801.61 per month. The trial court took into account that
neither party had a very high standard of living to begin with. Moreover, the award of spousal
support was made subject to modification “upon a change of circumstances.” Thus, if the
circumstances have changed since the entry of judgment, she may petition the trial court to
modify the original order. MCL 552.28.
-4-
IV. OTHER RELIEF
Finally, Kathy Lanczy argues that the trial court should have ordered Zoltan Lanczy to
clean up the 20-acre parcel because it is depressing the value of her property and constitutes a
nuisance. She cites no authority for the proposition that a trial court has the authority to order a
party to a divorce to abate an alleged nuisance on real property awarded in the divorce judgment.
Therefore, she has abandoned this claim of error on appeal. See Mitcham v Detroit, 355 Mich
182, 203; 94 NW2d 388 (1959).
There were no errors warranting relief.
Affirmed.
/s/ William B. Murphy
/s/ David H. Sawyer
/s/ Michael J. Kelly
-5-
|
FILED
NOT FOR PUBLICATION
APR 05 2017
MOLLY C. DWYER, CL
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEA
FOR THE NINTH CIRCUIT 1
UNITED STATES OF AMERICA, No. 15-50437
Plaintiff-Appellee, D.C. No.
5:12-cr-00065-VAP-11
v.
MEMORANDUM *
ALBERT DIROBERTO, aka Al Diro,
aka Albert Robert DiRoberto,
Defendant-Appellant.
UNITED STATES OF AMERICA, No. 15-50438
Plaintiff-Appellee, D.C. No.
5:12-cr-00065-VAP-4
v.
CRYSTAL TAIWANA BUCK,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Virginia A. Phillips, District Judge, Presiding
Argued and Submitted February 7, 2017
Pasadena, California
1
Before: THOMAS, Chief Judge, NGUYEN, Circuit Judge, and AMON,
District Judge.**
Crystal Buck was convicted after a jury trial of wire fraud charges under 18
U.S.C. § 1343 in connection with 21st Century's telemarketing scheme that
targeted distressed homeowners. Albert DiRoberto was convicted of both mail and
wire fraud charges under 18 U.S.C. §§ 1341 and 1343 in the same scheme. Both
argue that the government’s evidence was insufficient to establish their intent to
defraud, a necessary element of the charges of which they were convicted.
DiRoberto additionally challenges two of the district court’s jury instructions, a
number of evidentiary rulings, the calculation of the sentencing guidelines, and the
district court’s order of restitution. Because we find no error in the district court’s
rulings, we affirm.
I. Sufficiency of the Evidence. We review a district court’s denial of a
motion made pursuant to Rule 29 of the Federal Rules of Criminal Procedure de
novo. United States v. Wiggan, 700 F.3d 1204, 1210 (9th Cir. 2012). In
evaluating sufficiency of the evidence claims, we must determine whether, after
viewing the evidence “in the light most favorable to the prosecution, any rational
trier of fact could have found the essential elements of the crime beyond a
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Circuit Rule 36-3.
**
The Honorable Carol Bagley Amon, District Judge, United States District
Court for the Eastern District of New York, sitting by designation.
2
reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979). That standard
is easily met here.
“Fraudulent intent may be, and often must be, proven by circumstantial
evidence.” United States v. Rasheed, 663 F.2d 843, 848 (9th Cir. 1981). “Intent
may be inferred from misrepresentations made by the defendant[], and the scheme
itself may be probative circumstantial evidence of an intent to defraud.” United
States v. Sullivan, 522 F.3d 967, 974 (9th Cir. 2008) (citation omitted). Intent also
may be proven by acts that were subsequent to the actions at issue. See Benchwick
v. United States, 297 F.2d 330, 336 (9th Cir. 1961).
The evidence at trial established that Buck knowingly made false statements
to the victim to induce her to pay fees to 21st Century to obtain a modification of
her loan payments. Those included claims that Buck had obtained a loan
modification for her own parents; that the victim would receive a full refund of her
fees if she did not obtain a successful modification; that 21st Century was
operating under a government program implemented by President Obama; and that
it would take ninety days to obtain the loan modification. Buck made similar
misrepresentations to other 21st Century customers. The evidence further
established that after Buck was expressly warned by 21st Century in April 2009
that certain representations she had been making were false, she continued to make
false promises and misrepresentations to customers.
3
Evidence as to DiRoberto was similar. He falsely told one victim that he
was an attorney and the owner of 21st Century; that he worked with other attorneys
at the company; that the victim was prequalified to obtain a loan modification; and
that the victim would receive a full refund of her fees if 21st Century did not secure
her modification. DiRoberto made similar false promises to other victims, and as
21st Century’s marketing director, he disseminated false information among
employees and on the internet. The circumstances were such that he would have
had to have known that the representations he was making were false, particularly
in light of his knowledge that 21st Century was a disorganized and understaffed
operation.
II. Jury Instructions. DiRoberto challenges on appeal two jury
instructions that he stipulated to below. The government makes a compelling
argument that he waived any challenge to those instructions. We need not resolve
that issue here since his challenges in any event do not survive plain error review.
1. Knowledge of Illegality. If a criminal statute penalizes “willful” conduct,
proof will ordinarily be required that a defendant acted with knowledge that his
conduct was illegal. See Bryan v. United States, 524 U.S. 184, 191–92 (1998).
Unless the text of a statute dictates a different result, “knowingly” merely requires
proof of a knowledge of the facts that constitute the offense rather than proof of
knowledge that the acts were illegal. See id. at 192–93. The mail and wire fraud
4
statutes do not require proof of willfulness. 18 U.S.C. §§ 1341, 1343.
Accordingly, the district court’s instruction that DiRoberto did not need to know
his actions were illegal was not erroneous.
2. Deliberate Ignorance. The district court also did not err in charging on
deliberate ignorance, referred to as a Jewell instruction. United States v. Jewell,
532 F.2d 697 (9th Cir. 1976) (en banc). DiRoberto argues that the instruction was
inappropriate, because “[n]o evidence showed . . . DiRoberto suspected his
statements were false and intentionally refused to determine their truth,” and “the
government’s theory was that . . . DiRoberto actually knew his statements were
false.” The government acknowledges that its theory at trial was that DiRoberto
knew that he was engaging in fraud. However, the government’s failure to present
a deliberate ignorance theory is not an automatic bar to a Jewell instruction. The
district court retains the discretion to include the charge. See United States v.
Heredia, 483 F.3d 913, 921–22 (9th Cir. 2007) (en banc). “In deciding whether to
give a willful blindness instruction, in addition to an actual knowledge instruction,
the district court must determine whether the jury could rationally find willful
blindness even though it has rejected the government’s evidence of actual
knowledge.” Id. at 922.
Deliberately acting to avoid learning the truth includes a “failure to
investigate” where a defendant is aware of a “high probability” of the underlying
5
fact. Id. at 920 & n.10. Abundant evidence was presented upon which a
reasonable juror could have concluded that even if DiRoberto did not know for
certain that 21st Century was a fraudulent operation, he failed to investigate while
being aware of a high probability that representations he made about the company
were false. For example, DiRoberto distributed marketing materials and responded
to negative publicity based, in part, on information provided to him from others,
without determining whether that information was true. He knew that 21st Century
only had “hologram” attorneys and that 21st Century was hiring “street thugs.” He
knew that there was a “huge void” in customer service; that there was no customer
service department; that there was no process in place for responding to
complaints; and that customer complaints went unattended because they were
routed to “closers” who had an incentive to ignore the complaints because they
were paid solely by commissions. He also knew that the company was under
investigation by multiple attorneys general. Deliberate ignorance could be inferred
from this evidence.
6
III. Evidentiary Rulings. We review the district court’s non-constitutional
evidentiary rulings for abuse of discretion, and reversal is appropriate only if the
error “more likely than not affected the verdict.” See United States v. Decoud, 456
F.3d 996, 1010 (9th Cir. 2006) (citations omitted). We also review the propriety of
a sanction for violating Rule 16 of the Federal Rules of Criminal Procedure for an
abuse of discretion. United States v. Aceves-Rosales, 832 F.2d 1155, 1156 (9th
Cir. 1987).
1. Exclusion of Documentary Evidence. To support his claim that he
believed 21st Century to be a legitimate operation, DiRoberto sought to admit into
evidence two exhibits, which he claimed were given to him by his superior and
which purported to show that 21st Century had successfully obtained loan
modifications for customers. The district court excluded the exhibits because the
defendant had failed to provide them to the government in discovery.
“Exclusion of [evidence] as a sanction for a violation of a discovery rule in a
criminal trial is generally appropriate only in cases involving ‘willful and blatant’
violations.” United States v. Verduzco, 373 F.3d 1022, 1033 (9th Cir. 2004)
(quotation marks omitted). Here, that standard was met. The first time the
government was shown these exhibits was when DiRoberto’s counsel sought to
introduce them into evidence at trial. This is despite the fact that the documents in
the exhibits had been in DiRoberto’s counsel’s possession at least one or two days
7
prior to that time and had been in DiRoberto’s possession for much longer. The
failure to provide the documents to the government was not inadvertent.
DiRoberto’s counsel admitted that he made a tactical choice to not disclose the
documents to the government earlier because “if [he] didn’t call [his] client, [he]
wasn’t going to use [them].” That uncertainty does not excuse a belated
production. For these reasons, exclusion of the evidence was proper. See Aceves-
Rosales, 832 F.2d at 1156–57 (finding that the district court did not abuse its
discretion in excluding defendant’s proposed medical record exhibit when defense
counsel had acquired the record a day before trial and waited until after the
prosecution rested to disclose its existence).
Moreover, any error in excluding these documents was harmless. DiRoberto
was permitted to testify that he was shown and relied on these documents, and the
government never challenged this aspect of his testimony.
2. Precluding Evidence of Bank Misconduct. In ruling on the
government’s in limine motion, the district court precluded “inquiry or argument”
about the role of lending institutions in creating an increase in the number of
homeowners facing foreclosures and the causes for the failures of these institutions
to fund or approve loan modifications. DiRoberto argues that this ruling
precluded him from offering evidence of the banks’ misconduct to support a
purported “good faith” defense. This argument fails for two reasons. First,
8
DiRoberto never proffered to the district court the evidence he wished to offer to
support this defense. Indeed, he fails even on appeal to identify such evidence.
Second, the district court did not abuse its discretion in determining that evidence
on these issues was largely irrelevant to the charges DiRoberto faced. The causes
for lending institutions to deny loan modification applications were not relevant to
whether DiRoberto lied when he promised customers that their loan modifications
would be secured and certainly not relevant to misrepresentations that he was an
attorney and working as part of a government program, or to his false claim that his
customers were pre-approved to obtain their modifications. Furthermore,
DiRoberto incorrectly asserts that he was precluded from presenting evidence to
explain “the low number of modifications” or that an “outside force” prevented
21st Century from obtaining loan modifications. However, DiRoberto
acknowledges, as he must, that the district court permitted evidence of the lending
institutions’ delays in processing loan modification applications. Accordingly, for
all of these reasons, the district court’s ruling was not erroneous.
3. Evidence of Victims’ Losses of Their Homes. We also conclude that the
district court did not abuse its discretion in admitting evidence that four victims of
21st Century’s fraudulent scheme lost their homes. The evidence was relevant to
show that the representations made by DiRoberto to victims that they were
prequalified for loan modifications and that they were guaranteed specific
9
modification terms were both false and material. The victims accepted and
believed these misrepresentations because they were desperate to prevent the loss
of their homes, which ultimately came to pass. See Farrell v. United States, 321
F.2d 409, 419 (9th Cir. 1963) (“[T]he effect of the solicitations upon the recipients
is a highly pertinent fact in determining whether the solicitations are of the nature
charged. The tendency of the form to mislead is shown by testimony that it did
mislead.” (citations omitted)). Moreover, the limited nature of the testimony and
the sparse references made to it in closing argument undermine any concern that its
“probative value” was “substantially outweighed by a danger of unfair prejudice”
under Federal Rule of Evidence 403.1
IV. Sentencing. Claims of procedural error in sentencing decisions are
reviewed for abuse of discretion. United States v. Valencia-Barragan, 608 F.3d
1103, 1108 (9th Cir. 2010). Factual findings underlying the district court’s
determination are reviewed for clear error. United States v. Montano, 250 F.3d
709, 712 (9th Cir. 2001).
1. Loss Calculation. In applying U.S.S.G. § 1B1.3(a)(1)(A), the district
court properly held DiRoberto accountable for the full loss amount to all the
victims of 21st Century’s fraudulent scheme during DiRoberto’s tenure. Under
that guideline, defendants are held responsible at sentencing for all “acts and
1
Because the district court committed no evidentiary errors, DiRoberto’s claim that
“cumulative error infected the trial” is moot.
10
omissions” that they “aided.” U.S.S.G. § 1B1.3(a)(1)(A). When the offenses
involve “a jointly undertaken criminal activity,” defendants are held responsible for
“all acts and omissions of others that were . . . in furtherance of . . . and reasonably
foreseeable in connection with that criminal activity.” U.S.S.G. § 1B1.3(a)(1)(B).
DiRoberto’s acquittal on the conspiracy charge does not alter this result. It is well-
settled that in making this determination, “a sentencing court may consider conduct
of which a defendant has been acquitted.” United States v. Watts, 519 U.S. 148,
154 (1997). “[A]cquittal on criminal charges does not prove that the defendant is
innocent; it merely proves the existence of a reasonable doubt as to his guilt.”
United States v. One Assortment of 89 Firearms, 465 U.S. 354, 361 (1984).
At the sentencing hearing, the district court found that the “most compelling
thing about [DiRoberto’s] role in the company [was] his work on the marketing
materials.” The court noted that the marketing materials contained falsehoods, that
DiRoberto developed scripts that employees used when they were responding to
the complaints from customers whose files were not being processed and nothing
was being done, and that DiRoberto had “a pretty deep awareness of the problems
and the fraud that was being perpetrated.” All of these findings of the district court
were supported by the evidence presented at trial. For these reasons, the district
court correctly found that the actions of other employees that directly led to the
losses of all of the victims of 21st Century during DiRoberto’s tenure at the
11
company constituted acts and omissions that were “reasonably foreseeable in
connection with [jointly undertaken] criminal activity.” U.S.S.G. § 1B1.3(a)(1)(B).
2. Enhancement under Section 2B1.1(b)(9)(A). We also find that the
district court did not err in applying a 2-level enhancement under U.S.S.G.
§ 2B1.1(b)(9)(A). Section 2B1.1(b)(9)(A) states, in relevant part, “If the offense
involved . . . a misrepresentation that the defendant was acting on behalf of a
charitable, educational, religious, or political organization, or a government agency
. . . increase by 2 levels.” Simply alluding to a relationship with government
agencies and offices can be sufficient. Cf. United States v. Treadwell, 593 F.3d
990, 1005–08 (9th Cir. 2010). The district court explicitly found that “[t]he
evidence at trial, including the marketing materials that [DiRoberto] developed,”
belied the claim “that . . . DiRoberto never represented that he was acting on behalf
of a government agency,” and that DiRoberto himself made such
misrepresentations. These findings were supported by the record.
V. Restitution. The district court did not err in ordering DiRoberto to pay
restitution of $3,501,381, the full amount of losses of victims of 21st Century
during his tenure. The Mandatory Victim Restitution Act (“MVRA”), 18 U.S.C.
§ 3663A, requires courts to order restitution to all identifiable victims of applicable
crimes who have suffered pecuniary loss. A “victim” is defined as “a person
directly and proximately harmed as a result of the commission of an offense for
12
which restitution may be ordered.” 18 U.S.C. § 3663A(a)(2). For scheme offenses
such as mail fraud, this includes “any person directly harmed by the defendant’s
criminal conduct in the course of the scheme.” Id. “Section 3663 . . . provides that
if the offense of conviction involves a scheme, . . . restitution may include all
losses caused during the course of that scheme.” United States v. Thomsen, 830
F.3d 1049, 1064 (9th Cir. 2016) (quoting United States v. Gamma Tech Indus.,
Inc., 265 F.3d 917, 927 n.10 (9th Cir. 2001)). DiRoberto’s counts of conviction
involved a scheme. It was thus proper for the district court to order restitution
based on the harm to all victims of the 21st Century “scheme,” not just the victims
of DiRoberto’s counts of conviction.
The district court did not err in finding that every 21st Century customer
during DiRoberto’s tenure was a “victim” and that their losses were proximately
caused by DiRoberto’s conduct. At trial, the evidence showed that the
misrepresentations that 21st Century employees made to customers were both
systematic and pervasive at the company. No evidence was presented at sentencing
that anyone paid money to 21st Century based on honest representations. The
district court drew a reasonable conclusion based on the evidence that every person
who sent money to 21st Century during DiRoberto’s tenure was a “victim.”
Moreover, for the same reasons the district court found DiRoberto responsible for
the losses to all victims of 21st Century due to his actions as its marketing director,
13
it was proper for the district court to find a “causal connection” between
DiRoberto’s conduct and the victims’ losses for purposes of restitution.
AFFIRMED.
14
|
116 F.3d 479
U.S.v.Dovalina*
NO. 96-10480
United States Court of Appeals,Fifth Circuit.
Apr 25, 1997
Appeal From: N.D.Tex. ,No.4:95CR58Y
1
Affirmed.
*
Fed.R.App.P. 34(a); 5th Cir.R. 24.2
|
978 F.2d 1255
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.James Thomas HOLLEY, Plaintiff-Appellant,v.Dr. ROSTAFINSKY; Virginia Department of Corrections,Defendants-Appellees.
No. 92-6939.
United States Court of Appeals,Fourth Circuit.
Submitted: October 26, 1992Decided: November 13, 1992
Appeal from the United States District Court for the Western District of Virginia, at Roanoke. Jackson L. Kiser, District Judge. (CA-92-42)
James Thomas Holley, Appellant Pro Se.
Brewster Stone Rawls, William Rittenhouse Culbreth, Rilee, Cantor & Russell, Richmond, Virginia, for Appellees.
W.D.Va.
Affirmed.
Before ERVIN, Chief Judge, and RUSSELL and WIDENER, Circuit Judges.
PER CURIAM:
OPINION
1
James Thomas Holley appeals from the district court's order denying relief under 42 U.S.C. § 1983 (1988). Our review of the record and the district court's opinion discloses that this appeal is without merit. Accordingly, we affirm on the reasoning of the district court. Holley v. Rostafinsky, No. CA-92-42 (W.D. Va. July 31, 1992). 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
|
[Cite as State v. Plastow, 2011-Ohio-3557.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
STATE OF OHIO JUDGES:
Hon. W. Scott Gwin, P. J.
Plaintiff-Appellee Hon. Sheila G. Farmer, J.
Hon. John W. Wise, J.
-vs-
Case No. 2011 CA 00083
RICHARD ALBERT PLASTOW
Defendant-Appellant OPINION
CHARACTER OF PROCEEDING: Criminal Appeal from the Court of Common
Pleas, Case No. 2010 CR 01897
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: July 18, 2011
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellant
JOHN D. FERRERO JAMES P. TYACK
PROSECUTING ATTORNEY 536 South High Street
KATHLEEN O. TATARSKY Columbus, Ohio 43215
ASSISTANT PROSECUTOR
110 Central Plaza South, Suite 510
Canton, Ohio 44702-1413
Stark County, Case No. 2011 CA 00083 2
Wise, J.
{¶1} Appellant Richard Albert Plastow appeals the February 23, 2011, decision
of the Stark County Common Pleas Court denying his motion to suppress.
{¶2} Appellee is the State of Ohio.
{¶3} This case comes to us on the accelerated calendar. App.R. 11.1, which
governs accelerated calendar cases, provides, in pertinent part:
{¶4} “(E) Determination and judgment on appeal. The appeal will be
determined as provided by App.R. 11.1. It shall be sufficient compliance with App.R.
12(A) for the statement of the reason for the court’s decision as to each error to be in
brief and conclusionary form. The decision may be by judgment entry in which case it
will not be published in any form.”
{¶5} This appeal shall be considered in accordance with the aforementioned
rule.
STATEMENT OF THE FACTS AND CASE
{¶6} In 2004, Appellant was indicted and pled guilty to gross sexual imposition
involving a four year old child. He was sentenced to three (3) years in prison. (Stark
County Common Pleas Court Case No. 2004 CR 0064). While the sentencing entry in
Appellant’s case did include notification of post release control, the trial court failed to
notify Appellant of same at the sentencing hearing. The State concedes that Appellant
was not properly notified as to his post release control requirements. Further, the trial
court, by Entry dated May 10, 2010, terminated Appellant’s post release control
requirements, holding that such portion of his sentence is void.
Stark County, Case No. 2010 CA 00083 3
{¶7} However, back in 2007, prior to such termination, in advance of
Appellant’s release from prison, post release control officer Rick Polinori was assigned
so supervise Appellant during his post release control ( PRC), which was to continue for
five (5) years. (T. at 25, 50). In January, 2007, Polinori conducted a placement
interview with Appellant’s parents in anticipation of Appellant taking up residence with
them at their home in Louisville, Ohio. During such interview, Polinori advised
Appellant’s parents that there was a warrantless search policy which would allow either
him or law enforcement to conduct a search of the residence in relation to Appellant.1
(T. at 27-28, 59). Polinori stated that the parents agreed to this condition of Appellant’s
supervision. Id.
{¶8} As further conditions of his PRC, Appellant was required to agree to not
possess or use any computer, computer modem, or flash drive without the knowledge
and permission of the Adult Parole Authority (APA). Appellant was only permitted to use
one computer which had a monitoring program installed on it called “Covenant Eyes”
which would send reports to the APA as to what content and websites Appellant was
viewing.
{¶9} In May, 2010, Appellant requested permission to leave the county to visit
his girlfriend in Cincinnati. Consequently, Polinori telephoned the girlfriend’s parents to
obtain permission for Appellant to stay with them at their house. During such
conversation, the girlfriend’s mother expressed some concerns she had about
Appellant, including time he spent viewing of pornography on his computer. (T. at 34-
35).
1 Pursuant to R.C. §2967.131 the APA may conduct warrantless searches of offenders
on PRC.
Stark County, Case No. 2010 CA 00083 4
{¶10} On June 10, 2010, Polinori had a meeting with Appellant to address these
allegations. At that time, Appellant admitted that he had been looking at adult
pornography and images of young girls modeling on a computer which he built himself.
Based on these admissions, Appellant was arrested.
{¶11} That same afternoon, Polinori and another APA officer went to Appellant’s
parents’ house to further investigate. Appellant’s mother permitted them to enter and
directed them to the basement where Appellant was staying. As a result of their search,
they seized a laptop computer and a tower personal computer in addition to a number of
thumb drives. These items were delivered to the Stark County Crime Lab for further
investigation. (T. at 36).
{¶12} On June 15, 2010, Appellant was released from the Stark County Jail with
a written sanction for violating his PRC rules and was placed under GPS tracking and
house arrest. (T. at 38).
{¶13} The crime lab subsequently finished investigating Appellant’s computers
and discovered pornography on both computers which included adults, children
modeling and nude images of children. (T. at 44).
{¶14} As a result, Appellant was arrested.
{¶15} On December 27, 2010, the Stark County Grand Jury indicted Appellant
on four (4) counts of pandering obscenity involving a minor, in violation of R.C.
§2907.321(A)(5), a fourth degree felony.
{¶16} On February 15, 2011, Appellant filed a motion to suppress the evidence
seized from his computers. Appellant argued that his PRC was improper, that the
search was conducted without a warrant and therefore was unconstitutional.
Stark County, Case No. 2010 CA 00083 5
{¶17} On February 22, 2011, the trial court held a hearing on Appellant’s motion.
At said hearing, the State presented the testimony of Officer Polinori, as set forth above.
{¶18} The trial court overruled Appellant’s motion to suppress finding that
Polinori had both consent to search the residence and further had a good faith basis for
believing that Appellant was properly under post release control and the associated
supervising requirements and conditions which allowed a warrantless search.
{¶19} On March 14, 2011, Appellant entered a no contest plea to the charges as
set forth in the indictment. Upon finding Appellant guilty, the trial court merged two of
the four counts and sentenced Appellant to an aggregate term of imprisonment of thirty-
six (36) months. Appellant was also designated a Tier II sex offender and was notified
of his duties to register upon release from prison.
{¶20} Appellant now appeals, assigning the following error for review:
ASSIGNMENT OF ERROR
{¶21} “I. THE TRIAL COURT ERRED IN OVERRULING APPELLANT’S
MOTION TO SUPPRESS ALL EVIDENCE ARISING OUT OF OR RESULTING FROM
THE RELATIONSHIP WITH P.R.C. OFFICER POLINORI AND THE SEARCH OF
APPELLANT’S RESIDENCE.”
I.
{¶22} In his first assignment of error, Appellant claims that the trial court erred in
overruling his motion to suppress. We disagree.
{¶23} There are three methods of challenging on appeal a trial court's ruling on
a motion to suppress. First, an appellant may challenge the trial court's finding of fact.
Second, an appellant may argue the trial court failed to apply the appropriate test or
Stark County, Case No. 2010 CA 00083 6
correct law to the findings of fact. Finally, an appellant may argue the trial court has
incorrectly decided the ultimate or final issue raised in the motion to suppress. When
reviewing this type of claim, an appellate court must independently determine, without
deference to the trial court's conclusion, whether the facts meet the appropriate legal
standard in the given case. State v. Curry (1994), 95 Ohio App.3d 93, 96, 641 N.E.2d
1172; State v. Claytor (1993), 85 Ohio App.3d 623, 627, 620 N.E.2d 906; State v.
Guysinger (1993), 86 Ohio App.3d 592, 621 N.E.2d 726. As the United States Supreme
Court held in Ornelas v. U.S. (1996), 517 U.S. 690, 116 S.Ct. 1657, 1663, 134 L.Ed.2d
911, “. . . as a general matter determinations of reasonable suspicion and probable
cause should be reviewed de novo on appeal.”
{¶24} When ruling on a motion to suppress, the trial court assumes the role of
trier of fact and is in the best position to resolve questions of fact and to evaluate
witness credibility. See State v. Dunlap (1995), 73 Ohio St.3d 308, 314, 652 N.E.2d
988; State v. Fanning (1982), 1 Ohio St.3d 19, 20, 437 N.E.2d 583. Accordingly, a
reviewing court must defer to the trial court's factual findings if competent, credible
evidence exists to support those findings. See, Dunlap, supra; State v. Long (1998), 127
Ohio App.3d 328, 332, 713 N.E.2d 1; State v. Medcalf (1996), 111 Ohio App.3d 142,
675 N.E.2d 1268. The reviewing court then must independently determine, without
deference to the trial court, whether the trial court properly applied the substantive law
to the facts of the case. See, State v. Fields (Nov. 29, 1999), Hocking App. No. 99 CA
11. See, generally, United States v. Arvizu (2002), 534 U.S. 266, 122 S.Ct. 744, 151
L.Ed.2d 740; Ornelas v. United States (1996), 517 U.S. 690, 116 S.Ct. 1657, 134
L.Ed.2d 911.
Stark County, Case No. 2010 CA 00083 7
{¶25} Appellant herein argues that because his PRC from his 2004 conviction
was void, the warrantless search of his residence was unconstitutional.
{¶26} In a recent 2010 case, Hunt v. United States, U.S.D.C., S.D. Ohio, No.
2:09-CV-419, the United States Supreme Court was presented with a case where a
defendant argued that he was improperly placed on post release control under the Ohio
Supreme Court's decision in State v. Singleton (2009), 124 Ohio St.3d 173, 920 N.E.2d
958, and the Ohio Adult Parole Authority and parole officer therefore illegally searched
his residence, leading to the federal firearm charge upon which he was convicted.
{¶27} The Hunt court rejected this argument, finding that the principles set forth
in United States v. Leon, 468 U.S. 897 (1984) were applicable, therein stating:
{¶28} “In Leon, the Supreme Court held that the fruits of a search which violates
the Fourth Amendment need not be suppressed unless the searching officers either
“were dishonest or reckless in preparing their affidavit or could not have harbored an
objectively reasonable belief in the existence of probable cause.” Id. at 926. Although
Leon involved a search conducted pursuant to a warrant, the Supreme Court has held
that its principles are equally applicable to searches conducted pursuant to a statute
which authorizes warrantless searches and which is later held to be unconstitutional. In
Illinois v. Krull, 480 U.S. 340, 349, 107 S.Ct. 1160, 94 L.Ed.2d 364 (1987), the Court
concluded that if an officer's reliance on such a statute is “objectively reasonable,” the
fruits of the search will not be suppressed.”
{¶29} In the case before this Court, we find that Officer Polinori’s beliefs that his
actions were authorized pursuant to R.C. §2967.131 were objectively reasonable under
Leon, supra. He testified that he even sent Appellant’s 2004 sentencing entry to the
Stark County, Case No. 2010 CA 00083 8
APA in Columbus to review after the Ohio Supreme Court ruled in State v. Fischer, 128
Ohio St.3d 92, 2010-Ohio-6238, that when a trial court fails to notify a defendant of his
post release control both at the sentencing hearing and in the judgment entry of
sentence that portion of the sentence is void. He stated that the APA advised him that
the sentencing entry was valid and that he made a notation as to such validity of
Appellant’s PRC notification on his computer. (T. at 32, 46). He further stated that he
never received anything from the APA or the trial court advising him that Appellant’s
PRC was void, or anything other than valid. (T. at 52).
{¶30} Accordingly, we find that the trial court did not err in overruling Appellant’s
motion to suppress.
{¶31} Appellant’s sole assignment of error is overruled.
{¶32} For the foregoing reasons, the judgment of the Court of Common Pleas of
Stark County , Ohio, is affirmed.
By: Wise, J.
Gwin, P. J., and
Farmer, J., concur.
___________________________________
___________________________________
___________________________________
JUDGES
JWW/d 0711
Stark County, Case No. 2011 CA 00083 9
IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
STATE OF OHIO :
:
Plaintiff-Appellee :
:
-vs- : JUDGMENT ENTRY
:
RICHARD ALBERT PLASTOW :
:
Defendant-Appellant : Case No. 2011 CA 00083
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Stark County, Ohio, is affirmed.
Costs assessed to Appellant.
___________________________________
___________________________________
___________________________________
JUDGES
|
121 Cal.App.2d 870 (1953)
264 P.2d 229
UNITED STATES CREDIT BUREAU, INC., Respondent,
v.
ROBERT LEON POWELL, Appellant.
Docket No. 10.
Court of Appeals of California, Appellate Department, Superior Court, Kern.
November 27, 1953.
Deadrich, Gill & Bates, for Appellant.
Hayes, Bletz & Lawson for Respondent.
LAMBERT, P.J.
The plaintiff-respondent here brought suit on a written contract for the purchase price of a piano. The complaint alleged the execution of the contract by defendant and Jayne's Piano and Accordion Company, the assignment of the contract to the Bank of America and the reassignment by the Bank of America to Jayne's Piano and *871 Accordion Company and the assignment from Jayne's Piano and Accordion Company to the plaintiff. No demurrer to the answer was filed and no objection raised as to the pleadings by the plaintiff. The evidence presented to the trial court established without conflict that the written contract was signed by the defendant and that no payments had been made and that the contract was repurchased by Jayne's Piano and Accordion Company from the Bank of America and then assigned to plaintiff. Also the record shows that the piano was still in the possession of the defendant when the suit was filed, although he had offered to return it promptly to the plaintiff's assignor. Over the objection of the defendant, oral testimony was received that the contract had been assigned by written assignment to plaintiff, and the defendant's motion to strike said testimony was denied. After plaintiff had rested its case the defendant sought to introduce evidence to show a breach of implied warranty in support of the affirmative defense set forth in defendant's answer. The plaintiff objected to admission of this evidence and the court sustained the objection. Appellant relies on two grounds for reversal: First, that the assignment to the plaintiff-respondent here having been in writing, a written assignment should have been produced. The second contention is that it was prejudicial error for the court to exclude all the evidence relating to the proof of an implied warranty.
So far as the first assignment of error here is concerned, we do not consider it of any importance for there appears to be a written assignment, and it could be filed in this court, and that would dispose of the case. [1] However, we have concluded that the refusal to hear any evidence in an attempt to prove a breach of an implied warranty was prejudicial error. The contract upon which suit was brought provided, among other things, "This contract constitutes the entire agreement, no waivers or modifications shall be valid unless written upon or attached hereto." While this provision would exclude any parol evidence to change the contract in this case or prove an express warranty, we are of an opinion that it would not exclude an implied warranty, assuming that the plaintiff could prove facts sufficient to show an implied warranty, because section 1735 of the Civil Code provides for an implied warranty under certain conditions, and, the statutory provision is a part of every contract, and unless there is something in the contract specifically excluding the provisions of the statute, it remains a part of the contract. While *872 there is not too much case law on the subject the weight of authority seems to be that in a case like this an implied warranty may be shown. And in Kuitems v. Covell, 104 Cal. App.2d 482 [231 P.2d 552], the court in that case made this observation, "Obviously, the statement in the written contract that it contains the entire agreement of the parties cannot furnish the appellants an avenue of escape from the entirely reasonable obligation implied in all contracts to the effect that the work performed `shall be fit and proper for its said intended use.'" While the facts in this case are, of course, not identical with the facts in that case, the principle is exactly the same.
The rule admitting evidence to show an implied warranty should not be confused with the rule excluding parol evidence to vary or add to or take from a contract as set forth in the sections in the Civil Code. The affirmative answer in this case was in the words and figures following, to wit:
"FOR A COUNTER CLAIM AND OFF SET TO PLAINTIFF'S COMPLAINT, DEFENDANT ALLEGES:
"1. That at all times mentioned in said complaint, and for sometime prior thereto, plaintiff's assignor was engaged in the business of selling pianos and musical instruments to the general public in the City of Bakersfield, County of Kern, State of California.
"2. That at the time of the execution of the said contract, plaintiff's said assignor, being then engaged in the business of selling pianos, and knowing that defendant desired to purchase a piano reasonably fit for use as a piano in defendant's home and of merchantable quality, then and there warranted to defendant that the said piano described in the written sale contract was in all respects reasonably fit for such purpose, and that the same was of merchantable quality.
"3. That defendant relied upon such warranties and in reliance thereon, executed the said written contract of sale set forth in plaintiff's Complaint; that defendant attempted to use said piano for the purpose aforesaid, but said piano was wholly unfit for such purpose and was not of merchantable quality, in that the foot pedals thereof were unworkable, the piano keys would not operate and the piano mechanism was generally worn, depreciated and unusable.
"4. That as soon as said unfitness and unmerchantable quality was ascertained, defendant notified plaintiff's assignor thereof, and offered to return the said piano, but that plaintiff's said assignor refused and still refuses to accept the same.
*873 "5. That said piano is of the reasonable value of $10.00; that defendant has been at all times and now is ready and willing to return the said piano to plaintiff's assignor."
The offer of proof made by the defendant was as follows:
"a. In purchasing the piano, defendant advised Jayne's of the particular purpose for which the piano was required.
"b. The purpose for which the piano was required was the use of the piano by defendant's children in taking piano lessons.
"c. Defendant relied upon the skill and judgment of Jayne's in the selection of the piano and in entering into the sales contract.
"d. Within three days after delivery of the piano, defendants discovered that the piano was not in playable condition, the foot pedals were disconnected, several hammers were broken and the notes would not play, and the piano was not fit nor suitable for use in his home for the purpose desired.
"e. Prompt notice of the defects and breach of warranty was given to Jayne's.
"f. The piano was not of a value in excess of $10.00."
The provisions in part of section 1735 of the Civil Code provide that where "1. the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, and the buyer relies on the seller's skill and judgment (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such purpose." Therefore, we think that the pleading together with the offer of proof were sufficient. Pleadings are to be liberally construed. (Code Civ. Proc., § 452.)
[2] The respondent seeks to uphold the judgment on the ground that the pleading was not sufficient to show that the defendant was relying on an implied warranty, and while this argument was not advanced in the trial court, we think that even if there was anything to the point, it is waived. (See French v. Smith Booth Usher Co., 56 Cal. App.2d 23 [131 P.2d 863].) [3] The respondent also raises a point that the piano was sold by a trade name. This likewise was raised for the first time on appeal, and there does not seem to be any merit to the contention. The case of Drumar Mining Co., Ltd. v. Morris Ravine Mining Co., 33 Cal. App.2d 492 [92 P.2d 424], cited by appellant holds otherwise. This case discusses various propositions and holds among other things that where the selection of the article is made by the seller *874 and the buyer relies on the skill and judgment of the seller, there is an implied warranty of fitness and that the trade name rule does not apply, and, of course, that is a matter for the trial court to determine, not this court, as the evidence relating to the implied warranty was excluded.
There are no other points that we deem necessary to discuss. The judgment is reversed, and the case is remanded to the Municipal Court of the City of Bakersfield for a retrial of the issues in accordance with the views expressed in this opinion.
Bradshaw, J., and Main, J., concurred.
|
(Slip Opinion)
Designating an Acting Director of National Intelligence
In designating an Acting Director of National Intelligence, the President could choose
anyone who is eligible under the Federal Vacancies Reform Act of 1998, even though
50 U.S.C. § 3026(a)(6) specifies that the Principal Deputy DNI “shall act for” the DNI
during a vacancy.
The President could designate the Senate-confirmed Director of the National Counter-
terrorism Center as the Acting DNI, but that person could not perform the duties of the
NCTC Director during his time as the Acting DNI because no person may “simultane-
ously serve” as NCTC Director and “in any other capacity in the executive branch,”
50 U.S.C. § 3056(b)(2).
Because the incumbent NCTC Director was rendered unable to perform the duties of that
office while serving as Acting DNI, the NCTC Director’s first assistant would, in the
absence of an alternative presidential designation, automatically serve as Acting
NCTC Director under the Vacancies Reform Act.
November 15, 2019
MEMORANDUM FOR THE LEGAL ADVISOR
TO THE NATIONAL SECURITY COUNCIL
On July 28, 2019, Daniel R. Coats submitted his resignation as the
Director of National Intelligence (“DNI”), effective August 15, 2019. On
August 8, 2019, Susan M. Gordon, the Principal Deputy DNI, announced
that she would resign at the same time as the DNI. In connection with
these impending vacancies, you asked whether the President could invoke
the Federal Vacancies Reform Act of 1998, 5 U.S.C. §§ 3345–3349d, to
authorize Joseph Maguire, the Director of the National Counterterrorism
Center (“NCTC Director”), to serve as Acting DNI and whether someone
else might then serve as Acting NCTC Director. We advised that the
President could designate the NCTC Director as the Acting DNI, but
because no person may “simultaneously serve” as NCTC Director and “in
any other capacity in the executive branch,” 50 U.S.C. § 3056(b)(2), Mr.
Maguire could not perform the duties of the NCTC Director during his
time as the Acting DNI. We further advised that, because Mr. Maguire
would be legally disabled from serving as NCTC Director during that
period, the Vacancies Reform Act would authorize someone else to serve
as Acting NCTC Director.
This memorandum memorializes the reasoning underlying our advice.
In reaching our conclusions, we considered the interaction between the
1
Opinions of the Office of Legal Counsel in Volume 43
Vacancies Reform Act and the provisions of the Intelligence Reform and
Terrorism Prevention Act of 2004 (“IRTPA”), 50 U.S.C. § 3003 et seq.,
that establish the offices of the DNI and the NCTC Director. First, con-
sistent with our prior opinions, we concluded that the Vacancies Reform
Act would remain an available means for designating an Acting DNI,
even though IRTPA specifies that the Principal Deputy DNI “shall act
for” the DNI during a vacancy, id. § 3026(a)(6). Second, upon the Princi-
pal Deputy DNI’s resignation, no officer would automatically become the
Acting DNI under either IRTPA or the Vacancies Reform Act, and that
would remain true even if someone else became the Acting Principal
Deputy DNI, because the statutes do not allow a “double acting” ar-
rangement. Third, the first person named in the operative order of succes-
sion, established by a 2013 presidential memorandum, could not serve as
Acting DNI because she was on detail to the Office of the Director of
National Intelligence (“ODNI”) and was not otherwise eligible under
5 U.S.C. § 3345(a)(3). Fourth, the second person on the order of succes-
sion, the NCTC Director, was available to serve as Acting DNI, but, as
contemplated in IRTPA and the 2013 presidential memorandum, could
not perform the duties of the NCTC Director while serving as Acting
DNI. Finally, because an incumbent NCTC Director is, by statute, ren-
dered unable to perform the duties of that office while serving as Acting
DNI, this was an unusual instance in which someone else could act in an
already-encumbered position—here, become the Acting NCTC Director—
while the incumbent served elsewhere in an acting capacity.
I.
In 2004, Congress enacted IRTPA, which established the position of
the DNI to serve as the “head of the intelligence community” and “princi-
pal adviser to the President” and others on “intelligence matters related to
. . . national security.” 50 U.S.C. § 3023(a), (b) (codifying Pub. L. No.
108-458, sec. 1011(a), § 102(a), (b), 118 Stat. 3638, 3644). The DNI
is appointed by the President with the advice and consent of the Senate.
50 U.S.C. § 3023(a)(1).
IRTPA also established the ODNI to assist the DNI in carrying out
his duties. Id. § 3025(a), (b). Congress created several offices within
the ODNI and authorized the DNI to establish additional offices and to
hire staff members. Id. § 3025(c), (d). In practice, many of those on the
2
Designating an Acting DNI
ODNI’s staff are detailed from other agencies in the intelligence commu-
nity. See id. § 3024(l )(1)–(2) (authorizing the DNI to prescribe mecha-
nisms to encourage such details); ODNI, Who We Are, www.dni.gov/
index.php/who-we-are/organizations (last visited Nov. 15, 2019) (noting
that “[t]he ODNI is staffed by officers from across the [intelligence com-
munity]”).
One of the ODNI’s statutory officers is the Principal Deputy DNI,
50 U.S.C. § 3025(c)(2), who is appointed by the President with the advice
and consent of the Senate, id. § 3026(a)(1). The Principal Deputy DNI
“assist[s] the [DNI] in carrying out the duties and responsibilities of the
[DNI].” Id. § 3026(a)(5). The statute further provides that the Principal
Deputy DNI “shall act for, and exercise the powers of, the [DNI] . . .
during a vacancy in the position of [DNI].” Id. § 3026(a)(6).
Another of the ODNI’s statutory officers is the NCTC Director, id.
§ 3025(c)(11), who is also appointed by the President with the advice and
consent of the Senate, id. § 3056(b)(1). The NCTC Director serves as
the “principal adviser” to the DNI on “intelligence operations relating
to counterterrorism” and has “primary responsibility within the United
States Government for conducting net assessments of terrorist threats.” Id.
§ 3056(f )(1). The NCTC Director “may not simultaneously serve in any
other capacity in the executive branch.” Id. § 3056(b)(2).
II.
We first explain who was eligible to serve as Acting DNI upon the
resignations of both the DNI and the Principal Deputy DNI on August 15,
2019. We advised not only that the President could designate the NCTC
Director as the Acting DNI, but also that he would become the Acting
DNI by operation of the current order of succession, which was issued in
2013 as an advance exercise of the President’s authority under the Vacan-
cies Reform Act.
A.
Throughout the Executive Branch, the Vacancies Reform Act generally
applies when a Senate-confirmed officer, such as the DNI or NCTC
Director, “dies, resigns, or is otherwise unable to perform the functions
and duties of the office.” 5 U.S.C. § 3345(a). By default, anyone serving
3
Opinions of the Office of Legal Counsel in Volume 43
as “the first assistant” to the vacant office “shall” become the acting
officer. Id. § 3345(a)(1). But the President “may” instead choose to desig-
nate, as the acting officer, someone who already holds an “office for
which appointment is required to be made by the President, by and with
the advice and consent of the Senate,” id. § 3345(a)(2), or an “officer
or employee” of the same agency who has served in a position with a
sufficiently high level of compensation “for not less than 90 days” of the
“365-day period preceding” the vacancy, id. § 3345(a)(3).
IRTPA states that the Principal Deputy DNI “shall act for” and “exer-
cise the powers of ” the DNI “during a vacancy in the position of ” the
DNI, 50 U.S.C. § 3026(a)(6), but IRTPA does not otherwise make the
Vacancies Reform Act inapplicable to the position of DNI. In a series of
opinions dating back to 2003, this Office has consistently explained that
the Vacancies Reform Act remains available to the President as a means
for designating an acting official even when an office-specific statute
provides that someone else “shall” serve in that role. See Designating an
Acting Director of the Federal Housing Finance Agency, 43 Op. O.L.C.
__, at *4–10 (Mar. 18, 2019) (“Acting Director of FHFA”); Designating
an Acting Attorney General, 42 Op. O.L.C. __, at *3–8 (Nov. 14, 2018);
Designating an Acting Director of the Bureau of Consumer Financial
Protection, 41 Op. O.L.C. __, at *4–11 (Nov. 25, 2017); Authority of
the President to Name an Acting Attorney General, 31 Op. O.L.C. 208,
208–11 (2007); Designation of Acting Director of the Office of Manage-
ment and Budget, 27 Op. O.L.C. 121, 121 & n.1 (2003). When another
statute does so, we have explained, the Vacancies Reform Act ceases to
provide the exclusive means of filling vacancies on an acting basis, but,
without something more to displace the Vacancies Reform Act, it remains
an available alternative to the other statute. See Acting Director of FHFA,
43 Op. O.L.C. __, at *4–6. Every court to address this question has agreed
with our reasoning. 1 And we think that the same conclusion applies to the
1 See United States v. Castillo, 772 F. App’x 11, 13 (3d Cir. 2019) (noting that district
“courts have been asked to address the validity of [Matthew Whitaker’s] designation
[as the Acting Attorney General] and have, thus far, uniformly concluded that it was
proper”); Hooks v. Kitsap Tenant Support Servs., Inc., 816 F.3d 550, 556 (9th Cir. 2016)
(addressing designation of Acting General Counsel of the NLRB; “neither the [Vacancies
Reform Act] nor the [National Labor Relations Act] is the exclusive means of appointing
an Acting General Counsel”; “the President is permitted to elect between these two
statutory alternatives to designate an Acting General Counsel”); United States v. Patara,
4
Designating an Acting DNI
DNI. Notwithstanding section 3026(a)(6)’s provision that the Principal
Deputy DNI “shall act for” the DNI during a vacancy, the President may
choose to designate as Acting DNI a different official who qualifies under
the Vacancies Reform Act.
No other provision of IRTPA counsels a different result. In 2012,
IRTPA was amended to authorize the President to fill vacancies in some
ODNI offices with non-Senate-confirmed individuals drawn from other
agencies in the intelligence community. See Intelligence Authorization
Act for Fiscal Year 2012, Pub. L. No. 112-87, sec. 405(2), § 103(e), 125
Stat. 1876, 1889 (codified at 50 U.S.C. § 3025(e)). Congress achieved
that result by expanding the third category of officials made eligible
to serve as acting officials by the Vacancies Reform Act. See 5 U.S.C.
§ 3345(a)(3). As it applies to other agencies, section 3345(a)(3) limits the
available pool to certain officials in the “Executive agency” where the
vacancy occurs. Id. For the ODNI, however, section 3025(e) expands
that pool to include officials within the entire “intelligence community.”
50 U.S.C. § 3025(e). That expansion applies to all vacancies “within the
Office of the Director of National Intelligence (other than that of the
Director of National Intelligence).” Id.
Although Congress precluded resort to the expanded section 3345(a)(3)
pool when selecting an Acting DNI, we cannot read that parenthetical
as making the Vacancies Reform Act itself inapplicable to that position.
To the contrary, by excepting the DNI from its tailored expansion of
section 3345(a)(3), section 3025(e) implies that section 3345(a)(3) applies
to the DNI in its non-expanded form, which means that the President may
365 F. Supp. 3d 1085, 1088–91 (S.D. Cal. 2019) (sustaining designation of Acting
Attorney General); Guedes v. Bureau of Alcohol, Tobacco, Firearms, & Explosives,
356 F. Supp. 3d 109, 139, 153–54 (D.D.C. 2019) (same), aff ’d on other grounds, 920
F.3d 1 (D.C. Cir. 2019), petition for cert. filed, No. 19-296 (U.S. Aug. 29, 2019); United
States v. Santos-Caporal, No. 18-cr-171, 2019 WL 468795, at *6–7 (E.D. Mo. Jan. 9,
2019) (same), report and recommendation adopted by 2019 WL 460563, at *1 (E.D. Mo.
Feb. 6, 2019); United States v. Smith, No. 18-cr-115, 2018 WL 6834712, at *2 (W.D.N.C.
Dec. 28, 2018) (same); United States v. Peters, No. 17-cr-55, 2018 WL 6313534, at *2−5
(E.D. Ky. Dec. 3, 2018) (same); United States v. Valencia, No. 17-cr-882, 2018 WL
6182755, at *2−4 (W.D. Tex. Nov. 27, 2018) (same), appeal dismissed, 940 F.3d 181 (5th
Cir. 2019); English v. Trump, 279 F. Supp. 3d 307, 319−31 (D.D.C. 2018) (sustaining
designation of Acting Director of the Bureau of Consumer Financial Protection), appeal
dismissed upon appellant’s motion, No. 18-5007, 2018 WL 3526296 (D.C. Cir. July 13,
2018).
5
Opinions of the Office of Legal Counsel in Volume 43
select an Acting DNI from certain senior ODNI officers and employees.
And section 3025(e) says nothing to alter the applicability of section
3345(a)(2), which enables the President to choose a Senate-confirmed
officer to fill a vacancy when the Vacancies Reform Act is available. 2
Congress could have easily excluded the DNI from coverage under the
Vacancies Reform Act by, for instance, adding the DNI to the list of
excluded offices in 5 U.S.C. § 3349c or specifying that section 3026(a)(6)
applies notwithstanding the Vacancies Reform Act. Cf. 6 U.S.C. § 113(g)(1),
(2) (specifying who shall serve as Acting Secretary of Homeland Security
in certain circumstances “[n]otwithstanding chapter 33 of title 5”). But
Congress took no such course. As a result, IRTPA is not the exclusive
means of temporarily filling a vacancy in the position of DNI, regardless
of whether there is an incumbent Principal Deputy DNI. Consistent with
the opinions of this Office and the decisions of federal courts, the Presi-
dent would have discretion to designate as Acting DNI someone else who
is eligible under the Vacancies Reform Act—either as an official in a
Senate-confirmed position or as a senior ODNI official who satisfies the
statute’s pay and tenure requirements.
B.
The Principal Deputy DNI is the first assistant to the DNI. See 50
U.S.C. § 3026(a)(5), (6); Designation of Acting Associate Attorney Gen-
eral, 25 Op. O.L.C. 177, 179 (2001) (“[T]he phrase [‘first assistant’] is a
term of art that refers to the top deputy,” and, “[u]nder this interpretation,
the Principal Deputy would generally qualify as the ‘first assistant.’”).
Yet, because that position became vacant at the same time as the DNI, no
one automatically became the Acting DNI under either IRTPA (50 U.S.C.
§ 3026(a)(6)) or the first-assistant provision of the Vacancies Reform Act
(5 U.S.C. § 3345(a)(1)). Moreover, because an Acting Principal Deputy
DNI does not satisfy either of those statutory provisions, nobody will be
2 The legislative history of section 3025(e) does not indicate that Congress believed the
exclusion of the DNI from the tailored expansion of section 3345(a)(3) would prevent the
President from using the Vacancies Reform Act. A section-by-section analysis stated that
the DNI would be excepted from the new authority and that, under section 3026(a)(6),
“the Principal Deputy DNI is next in line.” 157 Cong. Rec. 20160 (Dec. 14, 2011). The
analysis noted that the amendment would not “modif [y] or preclude[] the utilization of
sections 3345(a)(1) or (2) of title 5 to fill vacancies.” Id.
6
Designating an Acting DNI
eligible under them until a new Principal Deputy DNI is appointed by the
President.
An Acting Principal Deputy DNI’s ineligibility, by virtue of acting in
that position, to become the Acting DNI is consistent with this Office’s
long-standing approach. More than forty years ago, we recognized “as a
general rule of interpretation” that “a statute providing that a deputy shall
perform the duties of the principal officer in case of a vacancy . . . should
be construed as referring to an actual and not an acting deputy.” Memo-
randum for John W. Dean III, Counsel to the President, from Leon Ul-
man, Deputy Assistant Attorney General, Office of Legal Counsel, Re:
Acting Deputy Public Printer at 2 (Jan. 26, 1973). In 1984, we explained
that the “Office has consistently taken the position that statutes providing
that a deputy shall perform the duties of his principal during absence or
disability or in case of a vacancy refer to an actual and not to an acting
deputy.” Memorandum for D. Lowell Jensen, Associate Attorney General,
from Theodore B. Olson, Assistant Attorney General, Office of Legal
Counsel, Re: Service of John C. Lawn as Acting Deputy Administrator of
the Drug Enforcement Administration at 3 (July 31, 1984). We have
therefore “cautioned against a ‘double acting’ arrangement.” Id.
Our rationale for continuing to disapprove double-acting arrangements
is grounded in statutory text, executive practice, and common sense. In
the Vacancies Reform Act, the reference in section 3345(a)(1) to “the first
assistant to the [vacant] office” is best understood as a reference to
an individual who has actually been appointed to—and is thus encumber-
ing, for personnel-law purposes—the position of first assistant. In other
words, only an individual encumbering the position of first assistant is the
first assistant; the term does not include someone who holds another
position but is temporarily performing the duties of the first assistant.
That is consistent with the venerable principle that an office remains
vacant even when someone has been assigned to perform its duties on a
temporary basis. See, e.g., District Attorney—Temporary Appointment,
16 Op. Att’y Gen. 538, 540 (1880) (“The office in no respects ceases to
be vacant . . . for the reason that the [assignment] itself contemplates only
a temporary mode of having the duties of the office performed.”). And
we construe analogous provisions similarly. Thus, for purposes of 50
U.S.C. § 3026(a)(6), only an individual appointed as, and encumbering
the position of, Principal Deputy DNI is the Principal Deputy DNI.
7
Opinions of the Office of Legal Counsel in Volume 43
Consistent with that view, when Presidents issue orders of succession
as an advance exercise of their authority to name acting officials under the
Vacancies Reform Act, they often specify that “[n]o individual who is
serving in an office . . . in an acting capacity, by virtue of so serving, shall
act as [the agency head] pursuant to this order.” 3 In fact, such a proviso
has been included in all four of the presidential memoranda that have
established orders of succession for the DNI, going back to 2005. 4
That practice is strongly supported by common sense. When a line
of succession for one office lists several officials, we look for the first
available official on the list. In doing so, we pay no heed to any under-
lying lines of succession that may exist for each of the listed officials.
Thus, Congress has included fifteen Cabinet officials in the statutory
line of succession to be Acting President when the offices of President
and Vice President are vacant. See U.S. Const. art. II, § 1, cl. 6; 3 U.S.C.
§ 19(d)(1). Although Congress has specified that only officers appointed
with the Senate’s advice and consent will count as Cabinet officials for
succession purposes, see 3 U.S.C. § 19(e), the line of succession for each
Cabinet official typically includes multiple Senate-confirmed officers. For
example, the order of succession for the office of Secretary of State in-
cludes literally hundreds of Senate-confirmed officers, from the Deputy
Secretary of State to every Under Secretary, every Assistant Secretary,
3 E.g., Providing an Order of Succession Within the Department of Justice, Exec.
Order No. 13787, § 2(a) (Mar. 31, 2017), 82 Fed. Reg. 16723, 16723 (Apr. 5, 2017);
Providing an Order of Succession Within the Department of the Treasury, Exec. Order
No. 13735, § 3(a) (Aug. 12, 2016), 81 Fed. Reg. 54709, 54709 (Aug. 17, 2016); Providing
an Order of Succession in the Environmental Protection Agency and Amending Certain
Orders on Succession, Exec. Order No. 13261, §§ 3(a), 4(a)–(i) (Mar. 19, 2002), 67 Fed.
Reg. 13243, 13243–44 (Mar. 21, 2002).
4 See Presidential Memorandum for the Director of National Intelligence, Designation
of Officers of the Office of the Director of National Intelligence to Act as Director of
National Intelligence § 3(a) (Sept. 20, 2013), 78 Fed. Reg. 59159, 59159 (Sept. 25, 2013);
Presidential Memorandum for the Director of National Intelligence, Designation of
Officers of the Office of the Director of National Intelligence to Act as Director of
National Intelligence § 4(a) (Mar. 8, 2011), 76 Fed. Reg. 13499, 13499 (Mar. 11, 2011);
Presidential Memorandum for the Director of National Intelligence, Designation of
Officers of the Office of the Director of National Intelligence to Act as Director of
National Intelligence § 3(a) (Oct. 3, 2008), 73 Fed. Reg. 58869, 58869 (Oct. 8, 2008);
Presidential Memorandum for the Director of National Intelligence, Designation of
Officers of the Office of the Director of National Intelligence to Act as Director of
National Intelligence § 4(a) (Dec. 20, 2005), 70 Fed. Reg. 76375, 76375 (Dec. 23, 2005).
8
Designating an Acting DNI
and eventually every “Chief [] of Mission, in the order in which they shall
have taken the oath of office.” Providing an Order of Succession Within
the Department of State, Exec. Order No. 13251, § 2(a)–(m) (Dec. 28,
2001), 67 Fed. Reg. 1599, 1599–60 (Jan. 11, 2002). But, whenever any of
those officers is the Acting Secretary of State, the presidential line of
succession skips that person and passes on to the Secretary of the Treas-
ury. See 3 U.S.C. § 19(d)(1); Operation of the Twenty-Fifth Amendment
Respecting Presidential Succession, 9 Op. O.L.C. 65, 69 (1985) (noting
that “the acting heads of departments . . . are not Presidential succes-
sors”).
Similarly, within the Department of Justice, if the President does not
invoke the Vacancies Reform Act, the statutory order of succession for
the office of Attorney General includes the Deputy Attorney General, the
Associate Attorney General, the Solicitor General, and several Assistant
Attorneys General. See 28 U.S.C. § 508(a), (b). Each of those offices has
its own principal deputy who is the first assistant to that office for purpos-
es of the Vacancies Reform Act. See 28 C.F.R. § 0.137(b). Yet, when
there is only an Acting Deputy Attorney General, the first available person
in the line for Acting Attorney General is the Associate Attorney General;
when there is also only an Acting Associate, the next available person in
the line is the Solicitor General; and so on. 5
The bar on double-acting arrangements finds inferential support in ju-
dicial decisions. When the Attorney General and Deputy Attorney Gen-
eral both resigned on October 20, 1973, the Solicitor General became
Acting Attorney General. The district court in United States v. Halmo,
386 F. Supp. 593 (E.D. Wis. 1974), recognized that the Solicitor General
had become Acting Attorney General not by virtue of being Acting Depu-
ty Attorney General—i.e., by acting as the “first assistant” mentioned in
the then-applicable versions of 5 U.S.C. § 3345 and 28 U.S.C. § 508(a)—
but rather as Solicitor General under 28 U.S.C. § 508(b). See 386 F. Supp.
at 595. And a 2009 court-of-appeals decision implicitly applied the bar on
5 Thus, our 2007 opinion explained that “when the positions of Deputy Attorney Gen-
eral and Associate Attorney General are vacant—as they are now”—“[t]he Solicitor
General is first in line” to “act as Attorney General.” Authority of the President to Name
an Acting Attorney General, 31 Op. O.L.C. at 208. The opinion did not mention that, at
the time, the Department had both an Acting Deputy Attorney General and an Acting
Associate Attorney General.
9
Opinions of the Office of Legal Counsel in Volume 43
double-acting arrangements by declining to treat an Acting Principal
Deputy Assistant Secretary in the Department of the Interior as an Acting
Assistant Secretary under section 3345(a)(1). See Schaghticoke Tribal
Nation v. Kempthorne, 587 F.3d 132, 135 (2d Cir. 2009). 6
C.
The Principal Deputy DNI’s resignation alongside the DNI meant that
neither section 3026(a)(6) nor section 3345(a)(1) was available for auto-
matic accession to the role of Acting DNI. As a result, no one would have
become the Acting DNI in the absence of presidential action under the
Vacancies Reform Act. Since 2005, however, Presidents have exercised
their authority under the Vacancies Reform Act to prescribe, in advance,
an order of succession that would apply to the DNI.
The current order of succession specifies, when the DNI and the Princi-
pal Deputy DNI are both vacant, a line of four officials to serve as Acting
DNI, unless the President chooses to depart from that list. See Presidential
Memorandum for the Director of National Intelligence, Designation of
Officers of the Office of the Director of National Intelligence to Act as
Director of National Intelligence §§ 1, 3(c) (Sept. 20, 2013), 78 Fed. Reg.
59159, 59159 (Sept. 25, 2013) (“DNI Order of Succession”). The first
position on the list is the Deputy DNI for Mission Integration. Id. § 1(a). 7
But the person who was serving in that position when the vacancies
6 In Schaghticoke Tribal Nation, the appellant contended that the Associate Deputy
Secretary of the Interior had violated the Vacancies Reform Act by performing a function
that regulations assigned to the Assistant Secretary of the Interior for Indian Affairs. 587
F.3d at 134–35. At the time, the position of the Assistant Secretary was vacant, and the
duties of Principal Deputy Assistant Secretary for Indian Affairs—the first assistant to the
Assistant Secretary—were being performed by another official. See Brief for Defendants-
Appellees (2d Cir. May 6, 2009) (No. 08-4735), 2009 WL 8189661, at *79. The appellant
argued that the Acting Principal Deputy Assistant Secretary was functioning as the Acting
Assistant Secretary under 5 U.S.C. § 3345(a)(1)—effectively urging the court to recog-
nize a double-acting arrangement. See Reply Brief for Plaintiff-Appellant (2d Cir. June 8,
2009) (No. 08-4735), 2009 WL 8189664, at *35–36. The Second Circuit declined to do
so. Instead, it concluded that the “Principal Deputy position was vacant” and that there
was no Acting Assistant Secretary for Indian Affairs under section 3345(a)(1). 587 F.3d
at 135.
7 The 2013 order refers to the Deputy DNI for “Intelligence Integration,” but in a re-
structuring completed in July 2018, that position was redesignated as the Deputy DNI for
“Mission Integration.”
10
Designating an Acting DNI
occurred was ineligible to serve as Acting DNI because she was on detail
to the ODNI from another agency and did not have a separate appoint-
ment from the DNI as a Deputy DNI.
The Vacancies Reform Act generally permits the President to designate
certain senior agency officials to act in a vacant office; when a Senate-
confirmed officer “of an Executive agency . . . dies, resigns, or is other-
wise unable to perform the functions and duties of the office . . . the
President . . . may direct an officer or employee of such Executive agency
to perform the functions and duties of the vacant office temporarily in an
acting capacity.” 5 U.S.C. § 3345(a)(3) (emphasis added). Because the
statute requires the official to be an officer or employee “of such Execu-
tive agency,” it excludes someone who has merely been detailed to that
agency from somewhere else and does not have any independent claim to
be an officer or employee of the agency receiving the detail. That conclu-
sion is consistent with how details generally work in the Executive
Branch. See, e.g., 5 C.F.R. § 317.903(a) (explaining that, for details of
Senior Executive Service employees, there is an “expectation that the
employee will return to the official position of record upon expiration of
the detail” and “[f ]or purposes of pay and benefits, the employee contin-
ues to encumber the position from which detailed”). It is also consistent
with our conclusion in 1986 that, if the Army assigned lawyers from the
Judge Advocate General Corps to the Department of Justice, they would
need formal appointments from the Attorney General before they could
represent the United States in litigation, because 28 U.S.C. § 516 reserves
the conduct of litigation on behalf of the United States to “officers of
the Department of Justice.” Assignment of Army Lawyers to the Depart-
ment of Justice, 10 Op. O.L.C. 115, 117 & n.2 (1986). Moreover, our
conclusion is consistent with Congress’s tailored expansion of section
3345(a)(3) for purposes of most ODNI positions covered by the Vacan-
cies Reform Act, which reflected the fact that so many ODNI staff mem-
bers are, in practice, detailees from other intelligence-community ele-
ments, thus shrinking the pool of senior agency officials who would
otherwise be eligible under section 3345(a)(3). See 157 Cong. Rec. 20160
(Dec. 14, 2011) (section-by-section analysis of 2012 amendment, noting
“the relatively small size of the ODNI” and “the fact that a significant
number” of its personnel “are on detail to the office”).
To be eligible to serve as Acting DNI under section 3345(a)(3), or un-
der the order of succession invoking that provision, a detailee at the ODNI
11
Opinions of the Office of Legal Counsel in Volume 43
must have held a separate appointment within that “agency” for at least
90 days in the year preceding the vacancy. 5 U.S.C. § 3345(a)(3); see 50
U.S.C. § 3025(e) (modifying this aspect of section 3345(a)(3) only for
vacancies in the ODNI “other than that of the [DNI]”); see also 50 U.S.C.
§ 3025(c)(14) (authorizing the DNI to “establish” additional “offices and
officials” in the ODNI). 8 Because the Deputy DNI for Mission Integration
did not satisfy this requirement, she was ineligible to serve as Acting DNI
under section 3345(a)(3).
D.
The next officer on the current order of succession is the NCTC Direc-
tor. See DNI Order of Succession § 1(b), 78 Fed. Reg. at 59159. Because
the NCTC Director was appointed by the President with the advice and
consent of the Senate, 50 U.S.C. § 3056(b)(1), he was eligible to serve as
Acting DNI under 5 U.S.C. § 3345(a)(2).
The NCTC Director’s service as Acting DNI does involve one statutory
wrinkle. IRTPA provides that the NCTC Director “may not simultane-
ously serve in any other capacity in the executive branch.” 50 U.S.C.
§ 3056(b)(2). We do not, however, read this provision as categorically
forbidding the NCTC Director from serving as Acting DNI. Instead,
section 3056(b)(2) permits the Director of NCTC to serve as Acting DNI,
and to continue to hold the office of NCTC Director, so long as he does
not, while Acting DNI, also perform the functions and duties of the NCTC
Director. That conclusion follows from the way section 3056(b)(2) is
phrased—as a restriction on simultaneously serving in any other capacity.
It comports with the apparent purpose of the provision: to ensure that the
person performing the functions and duties of the Director of NCTC does
so with a degree of independence and without competing obligations. And
it is consistent with the orders of succession for the DNI issued by Presi-
dents George W. Bush and Barack Obama. In his 2011 and 2013 memo-
randa, President Obama expressly accounted for section 3056(b)(2) by
specifying: “In the event that the Director of the National Counterterror-
8 The rate of pay for the ODNI position to which the detailee is separately appointed
would also need to be “equal to or greater than the minimum rate of pay payable for
a position at GS–15 of the General Schedule,” 5 U.S.C. § 3345(a)(3)(B), even though, as
a practical matter, the detailee could draw that salary only from the home agency, see id.
§§ 5533, 5535.
12
Designating an Acting DNI
ism Center acts as and performs the functions and duties of the DNI . . . ,
that individual shall not simultaneously serve as Director of the National
Counterterrorism Center during that time, in accordance with 50 U.S.C.
3056.” DNI Order of Succession § 3(d), 78 Fed. Reg. at 59159; Presiden-
tial Memorandum for the Director of National Intelligence, Designation of
Officers of the Office of the Director of National Intelligence to Act as
Director of National Intelligence § 4(d) (Mar. 8, 2011), 76 Fed. Reg.
13499, 13499 (Mar. 11, 2011). Although President Bush did not expressly
acknowledge the prohibition on simultaneous service, he also included the
NCTC Director in his 2008 order of succession. See Presidential Memo-
randum for the Director of National Intelligence, Designation of Officers
of the Office of the Director of National Intelligence to Act as Director of
National Intelligence § 1(e) (Oct. 3, 2008), 73 Fed. Reg. 58869, 58869
(Oct. 8, 2008).
IRTPA elsewhere contemplates a conceptually similar arrangement,
whereby an officer may continue to hold another office but is legally
disabled from exercising some of the duties of that office during service
within the ODNI. Under the statute, a commissioned officer of the Armed
Forces may serve as DNI or Principal Deputy DNI and continue to receive
military pay and allowances but may not, while so “serving,” be super-
vised or controlled by, or exercise supervision or control over, any officer
or employee of the Department of Defense. 50 U.S.C. § 3026(c)(4), (6). In
that instance, the commissioned officer will retain his military office but
will be disabled from exercising certain duties or responsibilities of that
office while serving at the ODNI. We think the same thing is true with
respect to the restriction on dual service by the NCTC Director. Section
3056(b)(2) permits the NCTC Director to continue occupying that office,
even while disabling him from performing his normal duties during any
period in which he serves as Acting DNI.
In support of this conclusion, we again find instructive the 1986 opin-
ion concerning the assignment of Army lawyers to the Department of
Justice. In that opinion, then–Deputy Assistant Attorney General Samuel
Alito concluded that the Posse Comitatus Act, which generally precludes
“any part of the Army” from being used for law enforcement, 18 U.S.C.
§ 1385, “would not be implicated” if military personnel “were detailed on
a full-time basis” to the Department of Justice and they then “functioned
on a day-to-day basis in an entirely civilian capacity under the supervision
of civilian personnel.” Assignment of Army Lawyers to the Department of
13
Opinions of the Office of Legal Counsel in Volume 43
Justice, 10 Op. O.L.C. at 121. The opinion distinguished that situation
from one in which military lawyers would be “assigned on a part-time
basis to perform civilian law enforcement functions along with their
regularly assigned military duties”—a situation that would raise “serious
questions” under the Posse Comitatus Act. Id. For similar reasons, we
believe that the prohibition on “simultaneous[] serv[ice]” in section
3056(b)(2) is not implicated when the President designates the NCTC
Director to serve as Acting DNI, so long as, while so serving, the NCTC
Director does not perform the functions and duties of that office.
Accordingly, we advised that, upon the resignations of the DNI and
Principal Deputy DNI, the NCTC Director would become the Acting DNI
without the need for further action by the President, as contemplated by
the 2013 order of succession, which was promulgated as an advance
exercise of the President’s authority under the Vacancies Reform Act.
Under section 3056(b)(2), however, he would be unable to exercise the
functions and duties of the NCTC Director while serving as Acting DNI.
III.
We further considered whether anyone could serve as Acting NCTC
Director while the incumbent served as Acting DNI. Because the NCTC
Director is legally disabled by section 3056(b)(2) from performing the
functions and duties of his own office while serving as Acting DNI, this
presents an unusual situation in which the Vacancies Reform Act may be
used to designate an Acting NCTC Director while there is still an incum-
bent in that office. We have generally advised that when one official
serves in an acting capacity under the Vacancies Reform Act, another
official may not be designated under that statute to act in the encumbered
position. In other words, the agency may not “backfill” the position. In
such cases, the incumbent officeholder will continue to occupy both
positions, absent some legal restriction on joint service. That rationale,
however, does not apply when, as with the NCTC Director, the incumbent
is legally precluded from serving in both capacities at once.
Prior to the Vacancies Reform Act, we had recognized the general ex-
pectation that an acting officer will continue to occupy his own office and
perform its duties even while he is temporarily acting in another office.
See, e.g., Legality of Designation of Certain Acting Officials by the Secre-
tary of Energy, 2 Op. O.L.C. 113, 115 (1978) (noting the practical diffi-
14
Designating an Acting DNI
culties that may arise when an acting official can effectively perform
the additional duties only “on a part-time basis”). Congress has long
prescribed that someone “performing the duties of a vacant office” gener-
ally “may not receive pay in addition to the pay for his regular office.”
5 U.S.C. § 5535(a).
The 1998 enactment of the Vacancies Reform Act did not alter that un-
derstanding. As we have recognized, “duties arising under the Vacancies
Reform Act can be regarded as part and parcel” of the underlying office
that makes one eligible to be an acting officer. Designation of Acting
Director of the Office of Management and Budget, 27 Op. O.L.C. at 122
n.3. That is especially true when someone is a first assistant or other
deputy to the vacant office, where day-to-day tasks often involve delegat-
ed functions of the principal and an important duty of the lower position is
to be ready to stand in for the principal when needed. Thus, we have
continued to read section 3345(a) as resting on the premise that an acting
officer will ordinarily perform the duties of both his office and the vacant
office. Otherwise, each application of the statute could begin a cascade of
acting arrangements within an agency, as one official after another tempo-
rarily moves into a different position. We have also reasoned that, because
almost all officials may delegate a significant portion of their duties, they
can typically accommodate, at least for temporary periods, the need to
carry out the duties of two positions. Put simply, an acting official re-
mains able to perform the most important duties of each position, and he
may be expected to delegate the exercise of the more mundane duties
under his supervision. In such circumstances, the acting official may well
be busier during the period of joint service, but he still encumbers (and
receives the pay of ) only the underlying position, which is not vacant.
By contrast, in this instance, the NCTC Director is temporarily pre-
cluded from performing the duties of that office, whether or not those
duties are delegable. The Vacancies Reform Act applies when a Senate-
confirmed officer of an Executive agency “dies, resigns, or is otherwise
unable to perform the functions and duties of the office.” 5 U.S.C.
§ 3345(a) (emphasis added). While serving as Acting DNI, the NCTC
Director is “unable to perform the functions and duties of [his] office”—
not because he is merely preoccupied or away from his usual desk, but
because section 3056(b)(2) forbids him from doing so. The statutory
prohibition thus resembles an ethical constraint that necessitates an
across-the-board, but temporary, recusal. When an official must recuse,
15
Opinions of the Office of Legal Counsel in Volume 43
someone else is typically able to act in his place with respect to the matter
concerned. 9 Here, there is no ethical constraint, but a statute mandates
something functionally equivalent to a recusal, as a result of which some-
one else must perform the NCTC Director’s duties.
Accordingly, when the NCTC Director became the Acting DNI, the
Vacancies Reform Act permitted the designation of someone else as
Acting NCTC Director. The President could have selected anyone who
was eligible under section 3345(a)(2) or the expanded form of section
3345(a)(3) that applies to most ODNI offices under 50 U.S.C. § 3025(e).
Instead, the President allowed the default under the Vacancies Reform
Act to take effect. Russell Travers, the incumbent Deputy Director of the
National Counterterrorism Center, who was the first assistant to the
NCTC Director, became the Acting NCTC Director—just as he had in the
period before Mr. Maguire was appointed as NCTC Director. See ODNI,
Acting Director, National Counterterrorism Center, www.dni.gov/index.
php/nctc-who-we-are/deputy-director-nctc (last visited Nov. 15, 2019).
When Mr. Maguire ceases to serve as Acting DNI, he will be able to
resume his duties as the NCTC Director (the position he still encumbers
and for which he is being paid), at which time Mr. Travers will cease to
be the Acting NCTC Director.
IV.
For the reasons set forth above, we concluded that, in designating an
Acting DNI, the President could choose anyone who is eligible under the
Vacancies Reform Act. See 5 U.S.C. § 3345(a)(2), (3). The President
could therefore select the Senate-confirmed NCTC Director, who may
serve as Acting DNI subject to the time limits of the Vacancies Reform
Act. See id. § 3346. The President could in turn invoke the Vacancies
Reform Act to authorize someone to serve as Acting NCTC Director
because, while serving as Acting DNI, the NCTC Director is rendered
9 See, e.g., In re Grand Jury Investigation, 916 F.3d 1047, 1056 (D.C. Cir. 2019) (con-
cluding that the Deputy Attorney General had become “the Acting Attorney General”
under 28 U.S.C. § 508(a) when “the Attorney General’s single-issue recusal . . . created a
vacancy that the Deputy Attorney General was eligible to fill”); Muffley ex rel. NLRB v.
Spartan Mining Co., 570 F.3d 534, 539 & n.1 (4th Cir. 2009) (affirming district court’s
conclusion that, when the General Counsel was recused from a case, a Deputy General
Counsel properly carried out the General Counsel’s functions under 5 U.S.C. § 3345(a)(1)).
16
Designating an Acting DNI
“unable to perform the functions and duties of ” NCTC Director. Id.
§ 3345(a); see 50 U.S.C. § 3056(b)(2). Here, in the absence of an alterna-
tive presidential designation, the NCTC Director’s first assistant would
automatically serve in that role. See 5 U.S.C. § 3345(a)(1).
CURTIS E. GANNON
Principal Deputy Assistant Attorney General
Office of Legal Counsel
17
|
396 F.2d 746
Stewart L. UDALL, Secretary of the Interior, State of Alaska, Appellants,v.Andrew J. KALERAK, Jr., Armand C. Spielman, Ronald L. Thiel, Ray McCubbins, Lawrence McCubbins, Carl B. Fiscus, C. H. Trombley, Arvil Gary Taylor, Pearl Gingerich, Appellees.
No. 21629.
United States Court of Appeals Ninth Circuit.
June 19, 1968.
Rehearing Denied September 23, 1968.
Edgar Paul Boyko (argued), Atty. Gen., Douglas B. Baily, Asst. Atty. Gen., Juneau, Alaska, for appellant State of Alaska.
William M. Cohen (argued), Roger P. Marquis, Edwin L. Weisl, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., Richard L. McVeigh, U. S. Atty., Gerald J. Van Hoomissen, Asst. U. S. Atty., Anchorage, Alaska, for Stewart L. Udall.
Murphy Clark (argued) of Hughes, Thorsness & Lowe, Anchorage, Alaska, for appellees.
Before HAMLEY and DUNIWAY, Circuit Judges, and BYRNE,* District Judge.
HAMLEY, Circuit Judge:
1
Andrew J. Kalerak, Jr. and eight other individuals brought this action in the district court to set aside a decision of the Secretary of the Interior rejecting their individual applications for certain tracts of land in the federal public domain in Alaska. Stewart L. Udall, Secretary of the Interior (Secretary) was named defendant, and the State of Alaska was thereafter permitted to intervene as an additional defendant. The facts are not in dispute. Both sides moved for summary judgment. The district court granted plaintiffs' motion and defendants appeal.
2
Under section 6(b) of the Alaska Statehood Act of July 7, 1958 (Act), 72 Stat. 339, 48 U.S.C. ch. 2, § 6(b), (1964), Alaska is permitted to select over a twenty-five year period after its admission into the Union, up to 102,550,000 acres from the public lands of the United States in Alaska which are vacant, unappropriated, and unreserved at the time of their selection. This litigation concerns a conflict between Alaska's claim to certain of these public lands, sought to be selected pursuant to section 6(b), and plaintiffs' claims to the same lands based upon their respective notices of location of settlement or occupancy for homestead purposes.
3
On March 29, 1949, by Public Land Order 576, 14 F.R. 1614, the United States withdrew the lands in question from appropriation. On January 8, 1963, while the lands were still withdrawn from appropriation, and therefore not available for selection by the state under section 6(b), Alaska filed with the local land office of the Federal Bureau of Land Management (land office), its application No. A-058566 for the selection of 26,880 acres of land as part of its section 6(b) allotment, such selection including the lands in question. The selection was posted in the appropriate land and status records.
4
On April 8, 1963, by Public Land Order 3022, 28 F.R. 3661, the Secretary revoked the withdrawal of the land and released it for appropriation. Pursuant to section 6(g) of the Act, this order provided that Alaska be given a ninety-day preference period (to July 8, 1963) to claim the land. During the ninety-day period Alaska did not file a new application for the selecting of the 26,880 acres of land (including those here in question) which were described in its application of January 8, 1963.
5
Within that period, however, Alaska filed with the land office two letters requesting that its original application No. A-058566 be amended to embrace certain described lands, none of which were described in the original application. These letters were filed on April 8 and May 24, 1963. After the expiration of that ninety-day period, Alaska filed in the same office two more letters (March 16 and 17, 1964), making similar requests with respect to other lands not described in any of the previous applications.
6
On October 8, 1964, the land office directed that Alaska publish a notice of its application in an Anchorage newspaper for five consecutive weeks. The publication was carried out within the time allowed and described all lands applied for, including those described in the original application.
7
Between May 27 and June 17, 1965, Kalerak and the other plaintiffs sought to file with the land office their Notice of Location of Settlement or Occupancy Claim. The land office refused to accept plaintiffs' notices for recordation. The Bureau of Land Management, on appeal, reversed the decision of the land office. The Secretary, in an appeal by Alaska, reversed the decision of the Bureau of Land Management, thereby restoring the decision of the land office that the tendered notices of the plaintiffs should not be filed. The district court judgment here under review, in turn, reversed the decision of the Secretary, thereby holding that plaintiffs' claims to the lands in question should prevail over Alaska's claim.
8
In connection with the problem arising from the fact that Alaska's original application for selection was filed at a time when the lands were withdrawn from selection, the Secretary held, alternatively:
9
(1) Whether or not Alaska's original selection was defective because made with reference to lands which were then withdrawn, it nevertheless accomplished a segregation of those lands such that they were not subject to applications and appropriations under the public land laws, the result being that plaintiffs' claims for settlement or location, made while such segregation was in effect, were invalid; and
10
(2) Alaska's four amendments of its original application for selection, made after the withdrawal of the lands had been revoked, amounted to a re-application for selection of the lands described in the original application, the result being that plaintiffs' claims, subsequently tendered for filing, were properly rejected.
11
The district court declined to accept either of these rulings by the Secretary.
12
In our opinion the district court erred in failing to accept the second of these rulings. While Alaska's four amendments of the original application did not include the land descriptions set out in the original application, the state intended such amendments as a reassertion of the original land descriptions as well as applications for the selection of additional lands. This is indicated by the facts that: (1) the new lands were brought in by amendment of the original application (referring thereto by number), rather than by new applications, (2) the amendments referred to "additional open lands," indicating Alaska's view that it wished to select the lands described in the original application, and add thereto, and (3) the notice published after the four amendments had been filed, and before any of the plaintiffs tendered their claims for filing, named all lands described in the original application as well as the four amendments.
13
In view of Alaska's intent in this regard, and the lack of prejudice to plaintiffs inasmuch as they had notice of Alaska's claim to all such lands before they tendered their claims, the Secretary did not abuse his discretion in accepting the amendments as a timely reassertion of Alaska's original application.1
14
Apart from plaintiffs' challenge to Alaska's claim based on the circumstance that the lands were withdrawn at the time of the original application, plaintiffs argue that since Alaska sought the lands in question to assist the City of Anchorage in protecting its water supply, its selection was invalid because in violation of the alienation prohibition of section 6(g) of the Act and in derogation of the Equal Protection Clause of the Fourteenth Amendment.
15
On March 8, 1962, the City of Anchorage made a request of the land office that the lands in question be withdrawn for watershed purposes. In a letter dated September 28, 1962, addressed to the State Division of Lands, the state office of the Bureau of Land Management stated that the city was not a proper applicant. In this letter it was also suggested that the state might file a blanket selection for the withdrawn lands with an assurance that the selected lands would be classified for watershed purposes. Responsive to this suggestion the state filed its application of January 8, 1963, for the selection of 26,880 acres of public land.
16
In arguing that, under these circumstances, Alaska's selection of these lands is in violation of section 6(g), plaintiffs call attention to the provision of that section that:
17
"The authority to make selections shall never be alienated or bargained away, in whole or in part, by the State of Alaska."
18
The Secretary rejected this contention, holding that there was no evidence to support the charge that Alaska had, or intended to, alienate or bargain away its section 6(b) power to select public lands. The district court expressed no view on this point.
19
We are in agreement with the Secretary. The selection was made by Alaska in its own name and, insofar as the record shows, not subject to any contract, conveyance or other transaction with the City of Anchorage. The lands in question were initially subject to Public Land Order No. 576, 13 F.R. 1614, for the protection of the water supply of the Anchorage area. The steps thereafter taken by Alaska, as described above, were designed and intended to fulfill this intent. The fact that the interests of the state and of its political subdivision, the City of Anchorage, coincide, is without legal significance and, on this record, in no sense evidences a violation of the prohibition against alienation contained in section 6(g).
20
With regard to its equal protection argument, plaintiffs note that, under section 6(a), Alaska is permitted to select some 800,000 acres of land for the purpose of furthering the development and expansion of its communities. In view of this provision, and of the limitation upon the number of acres Alaska is entitled to select under section 6(b), plaintiffs contend that Alaska's intent to use the lands here in question to protect Anchorage's water supply discriminates against the rest of the state and the citizens thereof.
21
Neither the Secretary nor the district court discussed this argument. We conclude that it is without merit. The purpose of the land grants under the Act is to serve Alaska's overall economic and social well-being. Some of the lands so selected will probably be used to protect mineral deposits. Others will safeguard wildlife. Still others will be used to protect domestic water supplies. The lands in question fall in the latter category and are designed to serve the most populous area of the state. No deprivation of the equal protection of the laws is remotely involved.
22
Reversed.
Notes:
*
The Honorable William M. Byrne, Senior United States District Judge for the Central District of California, sitting by designation
1
We need not decide whether the district court erred in declining to accept the Secretary's alternative ruling that Alaska's original application, even if defective, accomplished a segregation of lands which prevented plaintiffs from acquiring rights therein while the segregation remained in effect
|
79 Ariz. 325 (1955)
289 P.2d 406
Application of Don Parley SKOUSEN for reinstatement to membership in the State Bar of Arizona.
No. 6162.
Supreme Court of Arizona.
November 3, 1955.
*326 Dix W. Price, Phoenix, for applicant.
John E. Madden, Phoenix, representing State Bar of Arizona.
PER CURIAM.
The matter before the court is the application of Don Parley Skousen for reinstatement to membership in the State Bar of Arizona, he having heretofore been disbarred.
The applicant, on November 25, 1925, was admitted by this court, as an attorney and counselor-at-law in all the courts of this state, upon his written representation that he was a citizen of the United States. United States citizenship is and was one of the prerequisites for admission to practice law in this state. Section 263, C.C. 1913. On January 11, 1947, an order of disbarment was entered against petitioner upon the ground that he had been adjudged guilty of a felony in the United States District Court for the District of Arizona. The record before us on applicant's petition for reinstatement discloses that at the time of applicant's original admission he was not a citizen of the United States. This fact forces the conclusion that this court was without authority in the first instance to admit petitioner to practice law, and that its order admitting petitioner to practice law in this state was and is null and void. The applicant cannot be reinstated to a status that never has legally existed.
It is hereby ordered that the license heretofore issued to Don Parley Skousen to practice as an attorney and counselor in the courts of this state be and the same is hereby cancelled and revoked, and the Clerk of this court is directed and ordered to strike his name from the roll of attorneys of this state.
LA PRADE, C.J., and UDALL, WINDES, PHELPS and STRUCKMEYER, JJ., concur.
|
318 F.2d 472
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.TEX-TAN, INC., Respondent.
No. 19715.
United States Court of Appeals Fifth Circuit.
May 24, 1963.
COPYRIGHT MATERIAL OMITTED Marcel Mallet-Prevost, Asst. Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, A. Brummel, Atty., N.L.R.B., Washington, D. C., Stuart Rothman, Gen. Counsel, James C. Paras, Atty., N.L.R.B., for petitioner.
Theo F. Weiss, San Antonio, Tex., L. Bruce Fryburger, San Antonio, Tex., Clemens, Knight, Weiss & Spencer, San Antonio, Tex., of counsel, for respondent and cross-petitioner.
Before RIVES, JONES, and BROWN, Circuit Judges.
JOHN R. BROWN, Circuit Judge.
1
The Board seeks enforcement of its Order holding the Employer guilty of violating § 8(a) (1) for threatened reprisals against employees by reason of union membership and a § 8(a) (5) failure to bargain in good faith. 29 U.S.C.A. § 158 (a) (1) and (5). The latter covers charges of improperly declining to furnish information concerning the Employer's age classification scheme, unilateral increases of wages during negotiations, and an effort upon the part of the Employer to bypass the Union representatives in order to conduct bargaining directly with the employees. Except as to the charge of unilateral wage increases as to which the case is reversed and remanded for a retrial, we deny enforcement.
§ 8(a)(1) Threats
2
The § 8(a)(1) finding rests on separate episodes concerning two employees. One involves a remark made by a management representative to credit supervisor Orsak that Orsak's wife was seen wearing a Union button and this might prejudice Orsak's career. This was made shortly before the election resulting in the certification of the Union. The Board supplied what the Examiner omitted, that in all probability the husband communicated this to his wife so that it was "manifestly intended to interfere with her continued support of the Union." The other involves a warning by a foreman to the employee Schaefer that unless she were to "ditch the union [she] would be the first one * * laid off." The brief in support of the Board's Order asserts that these two incidents (with the § 8(a)(5) violations) "constituted part of a clear pattern of conduct forbidden by the Act."
3
But the total record is convincing that the foreman's statement was neither meant nor understood to be a threat.1 Nor as to Orsak is there any indication at all that he communicated the supposed threat either to his wife or to others. In a 1900-page record these are two isolated incidents which in the context of this particular setting did not reasonably warrant the inference that the distinct actions were discriminatorily motivated with a view of discouraging Union adherence or support in the forthcoming certification election.2
§ 8(a) (5) Disparagement of Bargaining Agent
4
The Board's Conclusion that the Employer's actions were an effort to by-pass the Union as the authorized bargaining representative has little foundation. The charges rest on a letter sent by management to all employees on May 12, 1959, and a later suggestion that representatives of management and the Union's contract committee meet without "outsiders" to determine what were the real stumbling blocks to consummating an agreement.
5
The letter of May 12, 1959, had no discernible effect. Negotiations went on for a year later at least until June 8, 1960. All the letter did was to bring to the attention of each of the employees the Employer's views and contentions as to some of the bargaining proposals.3 Neither by its terms, its implications, or the context in which it was sent or received did this communication contain any "threat of reprisal or force or promise of benefit." It was a permissible expression of views and opinions held by management. 29 U.S.C.A. § 158(c). N.L.R.B. v. Exchange Parts Co., 5 Cir., 1962, 304 F.2d 368; N.L.R.B. v. Superior Fireproof Door & Sash Co., 2 Cir., 1961, 289 F.2d 713.
6
That there should even be a complaint, much less a holding, of a § 8(a) (5) violation as to the direct contact between management and the local bargaining committee is not a little surprising. By undisputed evidence it was motivated (and accepted) out of a mutual desire to achieve the law's end — industrial peace through contracts voluntarily entered into. This took place in March 1960. Beginning in April 1959, a total of 29 bargaining sessions were held between then and June 8, 1960. After 16 sessions in 1959 a contract was agreed on between the Employer and the International Vice President Twedell. Unfortunately, the membership, as required by the Union constitution, declined to approve it. Further bargaining resumed with sessions on January 28 and February 23. Prior to the March 9 bargaining session, the industrial relations manager of the Employer approached Neusser, an employee member of the bargaining committee, to ask whether the employee bargaining committee would meet with Employer's officials, without any outside representatives — that is, non-employee Union representatives or the Employer's counsel and chief negotiator — being present.4
7
But up to this point it was a request and nothing more. Presumably the employees' bargaining committee thought well of the idea for Neusser made an effort to obtain permission from Horton, the local business agent. No meeting was held until Horton himself authorized it. Later meetings were held without again seeking express permission as all thought, and the Examiner found, that the Union had consented to it. It was clearly understood by all that the meetings were to exchange views and no commitments could or were to be made.
8
The Examiner was hard pressed to find anything wrong with this. It, like the May 12, 1959, letter was characterized as "likewise having a tendency to disparage and undermine the Union's bargaining position." But of the Employer's "invitation to the employee members of the bargaining committee * * * to meet * * * without the presence of outside union or company representatives, for the purpose of discussing subjects about which the parties had been unable to agree," the Examiner with much wisdom remarked: "It is not that the latter idea should be criticized." Indeed, the Examiner continued, "the Union itself, in * * * giving its consent to such meetings, apparently welcomed this approach as a possible way of settling the differences." Then in a complete non sequitur what was good, wholesome and thought by all to be a means of resolving controversy suddenly became the "vice in [the Employer's] action." This vice, the Examiner stated, was the Employer's "failure first to ask the designated bargaining representatives' permission to try such an approach." But under § 7, 29 U.S.C.A. § 157, the right accorded to employees is "to bargain collectively through representatives of their own choosing." These representatives included the members of the employees collective bargaining committee and the Business Agent Horton. Apart from his status as the chosen representative of the employees, Parr had no such standing as to be able to veto every proposal which originated with some other person. In the approach seeking permission to have the discussions or in the discussions themselves there is not the slightest inkling of a purpose to undermine the Union to subvert its employee members or to disparage its negotiations. No one reasonably in this context could have concluded that such was either its purpose or its probable effect. N.L.R.B. v. W. L. Rives Co., 5 Cir., 1961, 288 F.2d 511.
§ 8(a)(5) Refusal to Furnish Wage Information
9
The Examiner, and later the Board by overruling vigorous exceptions by the charging Union (and in part the General Counsel) held that the Employer was not guilty of a § 8(a) (5) failure to bargain in good faith in not furnishing information as to wage standards. Notwithstanding this, each held that there was such a failure to supply information as to job rate classifications and the classification rate changes made in March-April 1960. While there is a technical distinction between "standards" and "classification" in the Employer's wage structure, the record, in our judgment, does not support a finding that there was a failure to furnish information as to one, but not the other.5
10
The Employer is a manufacturer of leather goods in six production factories — the Belt, Billfold, Saddle, Moccasin, Tannery, and Tree Factories. For the various operations, its labor force is paid on (a) piecework or (b) time rate, or occasionally both. Most of the work in the production factories was on the incentive piecework wage plan. The "Standard Hour incentive wage plan" has two factors, (1) the standards6 and (2) classification.7
11
There were also time-rated jobs (in whole or in part) by which time rates were divided into six groups.8
12
The Examiner's Report discusses in great detail the intricate structure of the Standard Hours.9 The Examiner traced the actions of the Union representatives and that of the Employer in the request for data and that furnished. Beginning in April 1959 and running through the end of negotiations, the Employer supplied a considerable body of figures, papers, copies of Standards, etc., and it made an unqualified offer to the Union for its representatives to see and copy any of its records and obtain whatever other information it desired. An event of considerable importance was an inspection in the plant by a technically trained time-study engineer on the staff of the International Union. He and the star negotiator were received with lavish cordiality and full cooperation. They stayed as long as they wished, saw what they desired, and asked all of the questions they had. In the meantime, however, the Union continued to demand that the information had to be furnished in an organized fashion — largely for the very reason that it was so intricate, complex, and voluminous.
13
The Examiner10 expressed this categorical conclusion. "I find no basis on the record before me for concluding that [the Employer] has refused to * * *" make reasonable arrangements for union examination of such records.11 This was made doubly plain by this critical legal finding. "* * * I find that the General Counsel and Union have not established that [the Employer] refused to bargain in good faith by failing to furnish the detailed standards information requested."
14
But then, oddly enough, the Examiner found that the Employer had failed to furnish "all of the job rate classification information requested." This requested information concerned "the points assigned to each factor considered in placing jobs under their respective classifications." (See note 7, supra) After first stating that these points were not too voluminous, and did not involve the intricacies of the Standard Hours records, the Examiner theorized that "apparently" the Employer's "only explanation for not supplying the information was that its point evaluation system was scientifically set up and that the union representatives probably would not be able to understand it."
15
We could agree with the conclusion immediately thereafter expressed by the Examiner that "I do not regard this explanation as a valid excuse for [the Employer's] failure even to attempt to present and explain its system," if that were really sustained by the record. But a reading of this entire record with its hundreds of pages of questions and answers, shows two things when the record is considered, as it must be, as a whole. 5 U.S.C.A. § 1006. First, all were aware that in take-home pay to the individual employee, all of the proposals required a consideration both of Standard Hours and the classification. In seeking comparative information of the present and preceding year or months, all of it was inexorably bound up together. The unqualified offer which the Examiner credited as to Standard Hour information encompassed this as well. Second, and perhaps even more important, with unlimited access to all of the Company's records,12 there is not yet the slightest indication that there exists any separate records, papers, or documents which reflect the judgment factors which led representatives of the Employer to put one particular job in one, rather than in another, classification. True, reference was occasionally made to it being "scientific" and perhaps too difficult for the Union people to understand. But it is plain from the whole record that these so-called point values covering factors such as skill, etc., were just subtle factors of management judgment. How and to what extent any one or all of such factors resulted in the classification of an operation in one, rather than in another class, were matters primarily residing in the minds of management personnel responsible for these decisions.13 The Union's time engineer had access to all records and all ears of the Employer. While statements of various witnesses here and there might literally indicate that such information requested was not furnished, it is inconceivable on the record as a whole that the Employer would, as the Examiner and the Board credits, unqualifiedly extend every piece of its most intricate and complex information to Union representatives and yet keep from them that which is much simpler in nature and structure.14
§ 8(a)(5) Unilateral Wage Changes March-April 1960
16
In assaying this aspect of the case, several things must be borne in mind. First, the formal written complaint (with formal bill of particulars furnished by the General Counsel) attacked changes in standards, classification, piece to time work, and vice versa, which were unilaterally made in 1959 shortly after certification of the Union. In view of the contentions of the Regional Director's office that such changes were illegal, the Employer froze all wage changes, and none of any kind were thereafter made up to March 7, 1960. The Examiner expressly sustained the propriety of the 1959 changes and held that in view of the intricacies of standards, classifications, etc., the Employer was not required to freeze its wage structure. Over vigorous exception of the General Counsel and the Union, the Board sustained these holdings. Second, the Examiner allowed an oral amendment charging § 8(a) (5) failure to bargain for alleged unilateral changes in March-April 1960. To this charge the Employer made, in effect, a dual answer: (1) all such changes were first discussed in negotiations with the Union before being instituted; and (2) when instituted, an impasse existed. As to these, the Examiner (and Board), after apparently rejecting the defense of impasse,15 held that changes had been illegally made in March-April 1960. Third, and probably most important, when the Examiner's Report and the particular changes made are carefully analyzed in the light of the record, it is clear that the finding is very restricted. It shows that, at most, such changes are confined to increases in "the number of stations" applicable to "time-workers" thereby "creating more opportunities for progressive rate increases." (See note 6, supra).
17
The Report itself reflects that most of the changes were held to be permissible. The Report states, "On March 7 and April 11, 1960, [the Employer] put into effect the reclassifications of both its piecework and time-rated employees which it had theretofore offered the Union in contract proposals, thereby effecting wage increase of 3 cents or more for its employees." (Emphasis added) As the Board found, most of these were the wage rates contained in the Twedell contract as to which there had been not only negotiation, but momentary, tentative agreement. Many others were part of the contract proposals of February 23.16 While the Report finds that on February 23 two types of operations covering some 270 different jobs were excluded, this is of no final consequence.17 In the first place the record, properly considered, shows that all jobs were covered by a universal 3¢ per hour proposed increase. Next, and more important, it is uncontradicted that prior to the institution of the changes, there was submitted to the Union proposed new classifications which included the increases made in April for the categories "machine edge and edge point" and "notch and stamp."
18
Except for the creation of additional job stations as to certain time-rated employees which we shall shortly discuss, all of the changes actually instituted in March-April 1960 had been the subject of prior extensive negotiations and discussions in the bargaining sessions. As to such wage changes, the Board's conclusion of § 8(a) (5) violation necessarily rests upon a finding that while the Employer did discuss these proposed increases it did not advise the Union of the time the proposed rates were to be instituted.18 To be sure the record does not reveal a specific time which the Employer fixed as the target date. But, as the Report finds, it is undenied that in the session on February 23, 1960, the Employer's chief negotiator discussed at length the "chaotic condition" brought about by the Union-imposed freeze and the necessity for the Employer to institute new standards "at the earliest possible moment." The Report undertakes again to rely on the erroneous distinction between changes of "standards" and "classifications." But the record as a whole is convincing that the two were intertwined, and the Union was informed that in the immediate future the Employer would institute changes as a matter of economic necessity.
19
Except then as to the added stations for time-workers, the Employer had discussed both the nature and kind of wage changes and the general proposed timing of its actions. As to these proposals, the record does not permit, and the report of the Board does not find, that there were any improper conditions attached or ultimatums laid down. It was in no sense a "take-it-or-leave-it" proposition. It was, rather, a plain statement that the Employer for economic reasons had to make changes and that these specific changes were going to be made. In these circumstances, the Employer was not required as a matter of law to await either the formal rejection or acceptance of the proposals by the Union.19
20
Of course, before instituting wage changes of a kind which constitute a subject of mandatory bargaining, there is the statutory duty to first "meet * * and confer in good faith * * *." § 8(d). But it is a mistake to assume that where there has been such discussion and fair notice of the employer's intended actions, it is a violation of the law to institute such changes without securing the agreement of the Union. In N. L. R. B. v. Crompton-Highland Mills, 1949, 337 U.S. 217, 224, 69 S.Ct. 960, 963, 93 L.Ed. 1320, the Court early recognized that "a unilateral grant of an increase in pay made by an employer after the same proposal has been made by the employer in the course of collective bargaining * * left unaccepted or even rejected in those negotiations * * * might well carry no disparagement of the collective bargaining proceedings. Instead of being regarded as an unfair labor practice, it might be welcomed by the bargaining representative, without prejudice to the rest of the negotiations. * * *" We expressed it in these terms. "Nothing prevented the employer at any time from changing for the future the wages he would pay. * * * The pendency of a negotiation for a collective contract would not destroy the employer's right in this regard." N. L. R. B. v. Whittier Mills Co., 5 Cir., 1940, 111 F.2d 474, 478. And more recently in N. L. R. B. v. Katz, 1962, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed. 230, by the frequent reference to the fact that the employer "without first notifying or consulting the union, [had] announced changes in the plan" for sick leave and "without having advised or consulted with the union, the company announced a new system of automatic wage increases * * *," the Court recognizes that an employer may "unilaterally" grant increases no greater than those previously offered. In expressing this negatively,20 the Court in note 1221 took notice of the Bradley Washfountain case in which the Seventh Circuit held that a wage increase which was less than the union's demand could be granted legally during negotiations.
21
That leaves, then, the few changes as to some time-work jobs in which added stations were created.22 The Employer insists that the record shows that in all of its contract proposals, it was reserving the right to grant merit increases and that the stations were merely guides for use by supervisors in such increase system. On this approach, the Employer merely did what it had long said it would do. The Board, on the other hand, simply approached it as though the prior "offers" had to relate to specific job categories. We do not think that the present record affords an adequate basis for sustaining either contention. As to this limited phase, it is therefore necessary that the case be reversed and remanded to the Board for a new hearing.
Rulings on Evidence
22
This disposition requires that we discuss very briefly some of the procedural errors asserted by the Employer. Intertwined in this question of the creation of added time-work stations will be the question of impasse.23 That means that there is a likelihood that the evidence problem encountered on the first trial will reoccur.
23
We think that the Examiner committed a basic harmful error in the rulings made on admissibility of evidence relating to impasse. Sustaining objections urged by the General Counsel and the Union, the Examiner excluded evidence proffered by the Employer showing or tending to show that there was an actual impasse in the negotiations on matters other than those things which were the subject of the formal complaint.24 Although the Examiner permitted the Employer to offer evidence tending to show an impasse on the company's piece-work incentive wage system,25 seniority, and wages, it was prevented from offering testimony indicating a likely impasse on other issues or by reason of other conditions. These included the grievance machinery, arbitration clauses, vacations, holidays, and insurance, group hospital and life insurance, profit sharing plan, and the like.
24
The existence of an "impasse" may be an important fact. Developed as it is largely by judicial action in recognition of practical considerations, it is a necessary response to a state of facts in which the parties, despite the best of faith, are simply deadlocked. The law does not force the two parties finally to agree. Indeed, the statute specifically states that the "obligation [to bargain collectively] does not compel either party to agree to a proposal or require the making of a concession." 29 U.S.C.A. § 158(d) Since it does not, once the parties are in a position of deadlock, there is a considerable latitude for so-called unilateral action. It is the fact of deadlock in good faith negotiations, not the cause of it, which is significant. Parties might, for example, hang up on a management clause,26 or a union shop,27 or over grievance procedures and management prerogatives.28
25
We are completely unable to fathom the theory behind the objections or the Examiner's ruling which limited evidence of impasse to those activities which were the subject of unfair labor practice charges. On neither considerations of relevance nor procedural ones of keeping the hearing within some reasonable bounds can the ruling be sustained. Indeed, as to some of the charges, particularly the so-called unilateral increase in wages, changes in classification, rates, etc., existence of an impasse would under certain circumstances be a complete justification. If there is a genuine deadlock which cannot fairly be attributed to bad faith in bargaining, the employer is not helpless. Of course, his self-help must still be circumscribed, cf. N. L. R. B. v. Katz, supra. But he need not await union consent or approval. The existence of the deadlock, not its cause, is the important thing. Of necessity, considerable latitude must be allowed in offering evidence pro and con on this issue. It will encompass all of the issues or contentions as to which it is claimed there was a basic and irreconcilable difference. And since this examines into both subjective and objective intent, motive, good faith, etc., a similar latitude must be afforded as to events before and after the wage changes. Cf. Shreve v. United States, 9 Cir., 1939, 103 F.2d 796, cert. denied, 308 U.S. 570, 60 S.Ct. 84, 84 L.Ed. 479; Benchwick v. United States, 9 Cir., 1961, 297 F.2d 330; United States v. Prince, 3 Cir., 1959, 264 F.2d 850; Waller v. United States, 9 Cir., 1949, 177 F.2d 171. Since this evidence was repeatedly excluded and may well have tipped the balance,29 there must be a new hearing.
26
As there must be a new trial concerning these March-April added stations in time-work jobs in order to determine the questions of (a) impasse, or (b) prior consultation with the Union as to them, it is also necessary to make brief comments about another procedural action which, likely as it is to recur, is vigorously asserted as a substantial error. Both as to these matters and as to those constituting the specific subject of the complaint (see note 24, supra), the Employer offered in evidence (a) detailed summaries of the bargaining sessions, (b) a court reporter's stenographic report of one of them, and (c) a tape recording of at least the last one. The Examiner over objection of the Union counsel excluded them.
27
The detailed summaries were prepared by the Employer's chief negotiator within a day or two after the completion of each session from notes kept in his own handwriting. As a witness then and there subject to cross examination, he swore that each was true and correct at the time it was made. He likewise swore that he had examined the court reporter's transcript and that it was an accurate statement of what had occurred. The same was true as to the tape recording.
28
Without undertaking at this time to blueprint the exact manner in which these materials are to be handled or received on the retrial, we are of the firm view that too rigid a position was maintained by the Examiner. These rulings were the response to an enticing, but superficial, logical dilemma urged by the Union counsel. It went like this. Since the chief negotiator as a witness affirmed that on reading them, they "revived his memory," the papers could not be used and his testimony had to come from a recollection stimulated by the paper, but not then read by him. On the other hand, his memory having been revived through the papers, they would not qualify as a record of a past recollection even though he presently swore they were true at the time prepared and signed.
29
Several factors persuaded us that in this situation such an approach is too inflexible and artificial. At the outset, there is no real basis for claiming this to be hearsay. The evidence being offered — an affirmation of the correctness of written statements — was given by a person then and there under oath and subject to cross examination. More important, as to most of these written statements, it is not hearsay at all. In passing upon what transpires in the process of collective bargaining negotiations, physical (non-verbal) actions as such are, of course, occasionally pertinent.30 But primarily negotiations are established by proof of the words that were spoken by the protagonists. Proof of the words spoken is made, not to establish the truth of the things stated, but the fact that the words as such were spoken. Anyone overhearing such words, whether a spokesman or not, is therefore a direct witness to a fact known by him and as to which he may be cross examined. Such verbal or operative facts are in no sense hearsay.31 And clearly, for this purpose, there could hardly be better proof of words spoken than an electronic tape recording properly identified and authenticated.32 Even more important, in this difficult area of determining whether bargaining has gone on in good faith, both the Board and the reviewing Court should have the benefit of the most reliable proof obtainable. In the search for truth, it is not ordinarily the simple dichotomy of "either or." A paper may refresh one's recollection and at the same time the subject matter may be such that the recollection, refreshed as it is, is incapable of reciting all of the details which were recorded shortly after the event under circumstances which attest to the reliability, trustworthiness and truthfulness of the record.33 Consistent with adequate safeguards committed largely to the considered judicial discretion of the presiding Judge or Examiner, the principle followed in the federal system is to apply the rule which favors admissibility. See F.R.Civ.P. 43(a); Dallas County v. Commercial Union Assur. Co., 5 Cir., 1961, 286 F.2d 388.
30
Nothing said or unsaid by us is an intimation, one way or the other, concerning what the outcome should be on these limited issues now remanded for a new hearing. That, as well as all questions concerning the nature, form or extent of any final order, see N. L. R. B. v. R. L. Zeigler, Inc., 5 Cir., 1962, 298 F.2d 671, 673, must await the outcome of the retrial.
31
Enforcement denied in part; order reversed and remanded in part for a new hearing.
Notes:
1
The employee concerned was not discharged, and the reference, as the employee knew, was to her own recent experience in which because of her relative abilities, she had been retained while a person senior to her was laid off. No one disputes the accuracy of the foreman's prediction that if the Union were certified, lay offs would be in accord with strict seniority
2
N. L. R. B. v. W. L. Rives Co., 5 Cir., 1961, 288 F.2d 511, 516; N. L. R. B. v. Dalton Brick & Tile Corp, 5 Cir., 1962, 301 F.2d 886, 898; N. L. R. B. v. Armour & Co., 5 Cir., 1954, 213 F.2d 625, 628; N. L. R. B. v. Grunwald-Marx, Inc., 9 Cir., 1961, 290 F.2d 210
3
The letter stated that "Many provisions * * * would make it very difficult or impossible for the Company to carry on its business in a competitive and efficient manner." It referred to a 10-week old strike going on in San Antonio (in an unidentified business), and it expressed the hope that "the same situation * * * will not be the case in Yoakum." With no disparagement of the Union, threats expressed or implied, it ended with the laudible assurance that the "Company is still interested in you and your family" and invited any employee "to talk to any of us about these matters at any time * * *."
4
It was not intended to supplant negotiations as "the whole idea was an attempt to get together to find out what the problems were between management * * * and the Union to see what were the stumbling blocks between them." Union representatives had previously demanded that the Employer's counsel and chief negotiator be kept out. And if the Union negotiator Parr's actions during bargaining is similar to his conduct as a witness, it is easy to understand how the Employer might feel that his presence was a hindrance to successful peaceful bargaining
5
We recognize that the duty to bargain in good faith encompasses the duty to furnish information. N. L. R. B. v. Item Co., 5 Cir., 1955, 220 F.2d 956; Sinclair Refining Co. v. N. L. R. B., 5 Cir., 1962, 306 F.2d 569, 571, n. 3
6
The Examiner, crediting an Employer's bulletin, describes the Standard Hour as a "unit for measuring human labor" which "represents the standard amount of effective effort which is reasonable to expect from a worker during one hour by a normal operator working at a normal rate of speed under normal working conditions. This includes an allowance for fatigue and personal needs." It is expressed in terms of decimal hours of so many Standard Hours per 100 units, or per 10 units in case of saddles. Time and motion studies are made of each operation (called "elements") as to the steps or movements in any operation. Thus for 100 units, e. g., belts, the Standard might prescribe 2.110 hours
7
In order to determine how much money is due for the time prescribed by the Standard Hours per 100 units, the base hourly rate of pay for the particular job must be prescribed. This is covered by the so-calledclassification. There were 8 classes running through Class 1 to 8. Class 1 base rate was $1.03 per hour; Class 8 $1.20 per hour. Class 9 and 10 were added by the wage increases of March-April 1960 discussed infra.
The Employer in determining classification for a particular job used a so-called point system in which it assigned point values for factors such as skill, time needed to acquire the skill, difficulty of the job, fatigue, heaviness of the work, finger dexterity, etc.
8
Classes A through F with each class in turn having a number of stations. These "stations" were for advances within a class, some were automatic after a period of service, others on merit based upon the Employer's judgment as to the value to be assigned to such factors as experience, mental effort, physical effort, etc
9
With 300 to 350 new items a year, totaling some 1800 items in production, the Employer had over 4500 standards in existence and over 1500 to 2000 were in operation each week. Every change in style or method of performing an operation or suboperation brought on changes or revision in Standard Hours. As constructed each Standard might have 4 to 15 separate sheets of paper
10
The Report first points out that the General Counsel by his brief disclaimed "any contention that [Employer] has a duty to photostat or otherwise duplicate the standards information requested by the Union" so long as it makes "reasonable arrangements with the Union so that it may be made available for them for intelligent examination or duplication by them." To this note 32 added "Cf. Southern States Equipment Corp., 124 NLRB 833; George Mick, d/b/a Yakima Frozen Foods, 130 NLRB No. 128."
11
The Report went on to state that the Examiner found on basis "for concluding" that the Employer "if requested, would have refused to make this information available for inspection in an organized fashion or * * * would have refused to explain any of its records which might on their face be unintelligible to a union representative."
12
This included some 49 cartons of records produced in the hearing for unlimited examination by the Examiner and all of the counsel
13
This is borne out by works manager Welhausen's testimony at J.A. 311, 332; and general manager Welhausen's at J.A. 547, 554
14
Within a month of the certification, the Union insisted, and the Employer acquiesced in, a "freeze" of any further changes in the Standard Hours system on the ground, as the Examiner described it, that the "Standard Hour system and its application were important subjects of collective bargaining." Of course, as described above, this system had two parts, (a) standards and (b) classification. But it was all one system, not two
15
In the structure of the Examiner's Report under "8. Analysis and conclusions with respect to the refusal issues," this matter was dealt with in "c. Requests for information as to job rate classifications and the rate changes effected by Respondent in 1960." The Examiner lumped together the failure to furnish information "as to the points assigned" to classifications which we have held unsupported and the changes of March 7 and April 11 in the wage rates. After finding the Employer guilty on these blended charges, the Examiner makes this ambiguous statement:
"In concluding that [the Employer's] conduct described above is inconsistent with the requirements of good faith bargaining, I am aware of the fact that the Union's continued insistence upon being furnished with voluminous standards data, and its failure to take advantage of [the Employer's] offer at the March 9 bargaining conference to make all its standards data available to the Union at [the Employer's] offices, may well have precluded agreement being reached anyway. Nevertheless, I do not believe that such possibility or probability should relieve [the Employer] of its obligation to satisfy the requirements of good faith bargaining in other respects."
16
The Examiner previously found that at the February 23 meeting, the Employer "offered to change its previous contract proposal that a pieceworker could receive 95 percent of his base rate if he achieved less than 90 percent of his standard; it proposed, instead, to make the base rate the guaranteed minimum rate." At the same meeting, it submitted a 35-page document which, the Report continued, "listed the old and new style number of each operation, its code number, the proposed new Standard Hour * * * and the proposed new classification. The list included 823 proposed new or changed standards."
17
The Report continued (see note 16, supra), "On the first page of the document it was explained * * * that all but two of the seven types of operations listed would carry an increased base rate19" Note 19 stated the "excepted operations were `machine edge and edge point' riding equipment and `notch and stamp' riding equipment."
18
For example, see the Report: "In the meantime, on March 7, [the Employer] without any notice to the Union of its intention to do so, put into effect many of the base rate classification changes for piecework operations whichhad been proposed in prior contract offers." (Emphasis supplied).
Later on the Report, after describing the action of March 7 and April 11, 1960, stated: "It took these steps without any prior notice to the Union of its intention to do so."
19
Besides the strong expression of doubt that the proposals would have been accepted because of the wrangle over unfounded demand for production of information (see note 15, supra), the record also shows that the Union early expressed the wish that wage increases be instituted without awaiting final, total contract agreement
20
"But even after an impasse is reached he [the employer] has no license to grant wage increases greater than any he has ever offered the union at the bargaining table, for such action is necessarily inconsistent with a sincere desire to conclude an agreement with the union." 369 U.S. 736, 745, 82 S.Ct. 1107, 1113
21
To the text (see note 20, supra) the Court's note 12 stated: "Of course, there is no resemblance between this situation and one wherein an employer, after notice and consultation, `unilaterally' institutes a wage increase identical with one which the union has rejected as too low. See Labor Board [N. L. R. B.] v. Bradley Washfountain Co. [C.A.7] 192 F. 2d 144, 150-152; Labor Board [N. L. R. B.] v. Landis Tool Co., (C.A.3) 193 F. 2d 279."
22
The term "station" refers to stepped up increases in an hourly rate. Stations 1 and 2 were in most cases automatic on the basis of time, e. g., one year, two year, etc. Stations 3 and 4, etc. were merit increases with management evaluation of skills, etc
23
Cf. May Department Stores Co. v. N. L. R. B., 1945, 326 U.S. 376, 66 S.Ct. 203, 90 L.Ed. 145; N. L. R. B. v. Crompton-Highland Mills, Inc., 1949, 337 U.S. 217, 69 S.Ct. 960, 93 L.Ed. 1320; Medo Photo Supply Corp. v. N. L. R. B., 1944, 321 U.S. 678, 64 S.Ct. 830, 88 L.Ed. 1007; cf. Armstrong Cork Co. v. N. L. R. B., 5 Cir., 1954, 211 F.2d 843, 847-848
24
The amended complaint (as orally amended) charged failure to bargain in good faith for (a) changing of production quotas, (b) announcing new piecework rates, (c) changing from piecework to time work, (d) changing job description, (e) failure to furnish standards and classification data, (f) refusal to furnish data, (g) soliciting employees to bargain directly, and (h) demanding acceptance of proposals to frustrate collective bargaining; and § 8(a) (1) threats of reprisals
25
The Report almost accepts this. See note 15, supra
26
N. L. R. B. v. American National Ins. Co., 1952, 343 U.S. 395, 72 S.Ct. 824, 96 L.Ed. 1027; N. L. R. B. v. Intracoastal Terminal, Inc., 5 Cir., 1961, 286 F.2d 954
27
N. L. R. B. v. Cambria Clay Products Co., 6 Cir., 1954, 215 F.2d 48
28
White v. N. L. R. B., 5 Cir., 1958, 255 F.2d 564, 567
29
Accepting the Examiner's words, it would not have taken much more. See note 15, supra
30
This might be, for example, true as to the incident of the last meeting which, the Employer contends, is reflected by the tape recording. According to the Employer this episode includes the loud, obnoxious language and mannerisms used by Union representatives showing that the parties were hopelessly deadlocked. The climax was reached when a Union negotiator, in an outburst of temper, threw the recording microphone to the floor where it landed with a loud crash
31
Huff v. United States, 5 Cir., 1962, 301 F.2d 760; Ward v. United States, 5 Cir., 1961, 296 F.2d 898; Safeway Stores, Inc. v. Combs, 5 Cir., 1960, 273 F.2d 295
32
Cf. N.L.R.B. v. Walton Mfg. Co., 5 Cir., 1961, 286 F.2d 16. Recordings are admissible in a criminal case, see Cape v. United States, 9 Cir., 1960, 283 F.2d 430. See also 58 A.L.R.2d 1028; Conrad, Magnetic Recordings in Courts, 40 Va.L. Rev. 23; Simpbaum, Evidence — Admissibility of Partially Inaudible Recordings, 34 N.C.L.Rev. 233
The Employer, citing these cases, asserts that it is the Board's "policy" to exclude tape recordings. Walton Manufacturing Co., 124 NLRB No. 181, 45 LRRM 1007 (1959); California Lingerie, Inc., 129 NLRB No. 108, 47 LRRM 1091 (1960); Duro Fittings Co., 130 NLRB No. 71, 47 LRRM 1363 (1961); American Aggregate Co., Inc. and Feathertite Corp., 130 NLRB No. 144, 47 LRRM 1517 (1961).
33
The factors are discussed in McCormick, Evidence, §§ 276 to 280, Records of Past Recollection, especially §§ 277-8 and also § 9 Refreshing Recollection, especially at p. 18
|
FILED
NOT FOR PUBLICATION JUN 17 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RICKY PICKETT, a current parolee, on No. 11-55746
behalf of himself and a class of similarly
situated persons, D.C. No. 2:08-cv-03955-JST-E
Plaintiff - Appellant,
MEMORANDUM*
v.
KENNETH ALLEN, Deputy
Commissioner of the California BPH;
ARTHUR ALMAZON, CDCR, in his
individual capacity; JUAN PEREZ, Parole
Agent, CDCR,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Josephine Staton Tucker, District Judge, Presiding
Argued and Submitted June 4, 2013
Pasadena, California
Before: TROTT and W. FLETCHER, Circuit Judges, and STEIN, District Judge.**
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Sidney H. Stein, District Judge for the U.S. District
Court for the Southern District of New York, sitting by designation.
Plaintiff Ricky Pickett appeals the district court’s judgment dismissing his
42 U.S.C. § 1983 claims that the Defendant parole officials violated his right to
due process by enforcing an unconstitutional parole condition and by subjecting
him to unconstitutional parole revocation proceedings. Because the parties are
familiar with the facts, we repeat them only as necessary to illuminate our decision.
Reviewing de novo, see Marsh v. Cnty. of San Diego, 680 F.3d 1148, 1152 (9th
Cir. 2012), we affirm.
Assuming without deciding that the Defendants violated Pickett’s
constitutional rights, they are entitled to qualified immunity because, at the time of
the events giving rise to Pickett’s claims, it would not have been “clear to a
reasonable [official] that his conduct was unlawful in the situation he confronted.”
Saucier v. Katz, 533 U.S. 194, 202 (2001), modified by Pearson v. Callahan, 555
U.S. 223 (2009).
Pickett challenges the enforcement of a parole condition that prohibits him
from associating with persons he knows or reasonably should know are gang
members or gang associates. Ninth Circuit law regarding such conditions is
relatively recent, see United States v. Vega, 545 F.3d 743, 750 (9th Cir. 2008);
United States v. Soltero, 510 F.3d 858, 867 n.9 (9th Cir. 2007). At the time
Plaintiff was charged with the parole violation, the mens rea requirement for a non-
2
association condition was unresolved. See People v. Lopez, 66 Cal. App. 4th 615,
634 (1998); People ex rel. Gallo v. Acuna, 14 Cal. 4th 1090, 1117-18 (1997).
Thus, the state of the law “did not put the [Defendants] on notice that [their]
conduct would be clearly unlawful.” Saucier, 533 U.S. at 202.
Pickett also claims he was denied a timely and adequate probable cause
hearing on the parole violation charge in violation of Morrissey v. Brewer, 408
U.S. 471, 484-85 (1972), and Gagnon v. Scarpelli, 411 U.S. 778, 786 (1973).
Pickett’s probable cause hearing was held 18 calendar days after his arrest. This
delay was shorter than that in Pierre v. Washington State Bd. of Prison Terms &
Paroles, in which we stated that a delay of 21 days between suspension of parole
and a final revocation hearing did not violate due process because the hearing “was
prompt enough to qualify as the preliminary probable cause determination required
by Morrissey.” 699 F.2d 471, 473 (9th Cir. 1983). Reasonable parole officials
could have relied on Pierre in concluding that an 18-day delay was constitutionally
permissible.
Reasonable officials could also have believed that the hearing was
sufficiently adequate to satisfy due process concerns. Although counsel for
Defendants acknowledged that a parolee’s request for live witnesses to testify at
the probable cause hearing would have probably been denied, there is nothing in
3
the record to suggest that Pickett ever made such a request. The documents to
which he points would not have been construed by a reasonable official as requests
for a witness at the probable cause hearing. Moreover, Pickett did not attempt to
obtain any witness’s affidavit -- which undoubtedly could have been submitted to
the hearing officer pursuant to state policy. And at the probable cause hearing,
neither Pickett (nor his counsel at the time) objected to the introduction of the
police officers’ reports of the incident resulting in Pickett’s arrest.
For the foregoing reasons, the Defendants are entitled to qualified immunity
from Pickett’s damages claims.1
AFFIRMED.
1
By a separate order, we reject Pickett’s counsel’s five letters dated
June 10, 2013, which were purportedly filed pursuant to Rule 28(j). The content of
the letters is not pertinent, and counsel did not have sufficient reason for their
submission.
4
|
166 F.Supp.2d 1110 (2001)
Perry Richard BREAKIRON, ID # 09528, Plaintiff,
v.
Curtis NEAL, et al., Defendants.
No. 3:00-CV-2155-H.
United States District Court, N.D. Texas, Dallas Division.
May 8, 2001.
*1111 Perry Richard Breakiron, Greenville, TX, pro se.
ORDER
SANDERS, District Judge.
After reviewing the objections to the Findings, Conclusions, and Recommendation of the United States Magistrate Judge and conducting a de novo review of those parts of the Findings and Conclusions to which objections have been made, I am of the opinion that the Findings and Conclusions of the Magistrate Judge are correct and they are accepted as the Findings and Conclusions of the Court.
FINDINGS, CONCLUSIONS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
BOYLE, United States Magistrate Judge.
Pursuant to the provisions of 28 U.S.C. § 636(b) and an Order of the Court in implementation thereof, subject cause has previously been referred to the United States Magistrate Judge. The findings, conclusions, and recommendation of the Magistrate Judge, as evidenced by her signature hereto, are as follows:
FINDINGS AND CONCLUSIONS
I. Background
Nature of the Case: This is a civil rights complaint pursuant to 42 U.S.C. § 1983.
Parties: Plaintiff is an inmate incarcerated in the Hunt County Jail (the jail). He names Jail Supervisor Curtis Neal (Neal); Transport Officer Mary Bruner (Bruner);[1] and Medical Officer Lynn Brannon (Brannon)[2] as defendants in this action. No process has been issued in this case.
Statement of the Case: In his complaint, plaintiff alleges that he was injured on September 15, 2000, when a metal door closed on him at the jail. (Compl. at 4.) He seeks damages for pain, anguish, and mental stress. (Id.) On November 17, 2000, the Court sent a Magistrate Judge's Questionnaire to flesh out his complaint. On November 27, 2000, plaintiff answered questions two through five. For some unknown reason, question one was not sent. Consequently, on December 1, 2000, the Court sent a Second Magistrate Judge's Questionnaire that contained the omitted question. On December 7, 2000, plaintiff answered that question. For ease of reference, the Court will cite to the answers by their number without referring to the specific questionnaire that contained the question, i.e. Answer 1, Answer 2, etc.
*1112 Plaintiff suffered significant physical injuries, when the metal door closed on him at the Hunt County Jail. (Answer 1.) He seeks damages for the door closing on him and for an alleged intentional or deliberate deprivation of medical care. (Answer 2.) He asserts that Neal and Bruner deprived him of medical care for ninety minutes, as they tried to discourage the seeking of medical treatment. (Id.) He seeks no damages for any other deprivation of medical care.[3] (See id.) He claims Neal was responsible for the door closing on him, because Neal failed to maintain proper jail procedure. (Id.) He contends Neal violated his civil rights by such failure and "by acting like it was no big deal once I notified him I had been physically hurt by this door closing on me and taking his time to actually act by taking me to the hospital to seek medical help." (Answer 3.) He contends Bruner violated his civil rights by delaying medical treatment by ninety minutes, while she tried to "bribe" him to forego treatment and while she shook down his cell. (Answer 4.) He contends Brannon violated his civil rights by dispensing his medication without a medical license and by charging "for medical treatment I received from jailor neglect." (Answer 5.) He further suggests that she violated his civil rights by misplacing medical paperwork. (Compl. at 3; Answer 5.)
II. Screening for Frivolity
The Court has permitted plaintiff to proceed in forma pauperis. His complaint is thus subject to sua sponte dismissal under 28 U.S.C. § 1915(e)(2). As a prisoner seeking redress from an officer or employee of a governmental entity, plaintiff's complaint is also subject to preliminary screening pursuant to 28 U.S.C. § 1915A regardless of whether he proceeds in forma pauperis. See Martin v. Scott, 156 F.3d 578, 579-80 (5th Cir.1998), cert. denied, 527 U.S. 1041, 119 S.Ct. 2405, 144 L.Ed.2d 803 (1999). Both § 1915(e)(2)(B) and § 1915A(b) provide for sua sponte dismissal, if the Court finds the complaint "frivolous" or if it "fails to state a claim upon which relief may be granted." A claim is frivolous, if it "lacks an arguable basis either in law or in fact." Neitzke v. Williams, 490 U.S. 319, 325, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). A complaint fails to state a claim upon which relief may be granted when it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Smith v. Winter, 782 F.2d 508, 511-12 (5th Cir.1986); Henrise v. Horvath, 94 F.Supp.2d 768, 769 (N.D.Tex.2000).
Plaintiff brings his claim under 42 U.S.C. § 1983. That statute "provides a federal cause of action for the deprivation, under color of law, of a citizen's `rights, privileges, or immunities secured by the Constitution and laws' of the United States." Livadas v. Bradshaw, 512 U.S. 107, 132, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994). It "afford[s] redress for violations of federal statutes, as well as of constitutional norms." Id.
A. Negligence
To the extent plaintiff seeks damages for the door closing on him or for misplaced medical paperwork, his complaint sounds in negligence. "Section 1983 imposes liability for violation of rights protected by the Constitution, [however,] not for violations of duties of care arising out *1113 of [state] tort law." Baker v. McCollan, 443 U.S. 137, 146, 99 S.Ct. 2689, 61 L.Ed.2d 433 (1979). Mere negligence is not actionable under § 1983. Daniels v. Williams, 474 U.S. 327, 328, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986) (concluding that "the Due Process Clause is simply not implicated by a negligent act of an official causing unintended loss of or injury to life, liberty, or property"); Davidson v. Cannon, 474 U.S. 344, 347-48, 106 S.Ct. 668, 88 L.Ed.2d 677 (1986) (stating that "[r]espondents' lack of due care ... simply does not approach the sort of abusive government conduct that the Due Process Clause was designed to prevent"); Lemoine v. New Horizons Ranch & Ctr., Inc., 174 F.3d 629, 635 (5th Cir. 1999) (stating that "negligence on the part of state officials does not suffice to make out any due process violation under the Fourteenth Amendment"). Accordingly, plaintiff's claims of negligence fail.
B. Denial of Medical Care
Plaintiff suggests that defendants Neal and Bruner denied him medical care by delaying such care by ninety minutes. (Answer 2.) In Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976), the United States Supreme Court held that deliberate indifference to the serious medical needs of prisoners violates the Eighth Amendment prohibition against cruel and unusual punishment. 429 U.S. at 106. It concluded that
deliberate indifference to serious medical needs of prisoners constitutes the "unnecessary and wanton infliction of pain" proscribed by the Eighth Amendment. This is true whether the indifference is manifested by prison doctors in their response to the prisoner's needs or by prison guards in intentionally denying or delaying access to medical care or intentionally interfering with the treatment once prescribed. Regardless of how evidenced, deliberate indifference to a prisoner's serious illness or injury states a cause of action under § 1983.
Id. at 104-05 (citation and footnotes omitted); see also, Harris v. Hegmann, 198 F.3d 153, 159 (5th Cir.1999) (citing Estelle for same proposition). To establish an Eighth Amendment claim for denial of medical care, the inmate must show deliberate indifference to "serious" medical needs, "[b]ecause society does not expect that prisoners will have unqualified access to health care." Hudson v. McMillian, 503 U.S. 1, 9, 112 S.Ct. 995, 117 L.Ed.2d 156 (1992). Constitutionally adequate care does not, however, ensure that an inmate will agree with every treatment decision. Estelle, 429 U.S. at 107-08.
To succeed on his claims of denial of medical care, petitioner must show (1) deliberate indifference (2) to a serious medical need. Plaintiff undoubtedly had a serious medical need. The question is thus whether he has shown deliberate indifference to that need. He alleges that defendants Neal and Bruner were deliberately indifferent when they delayed medical treatment by ninety minutes. He has not shown, however, that such delay constitutes deliberate indifference. The record reflects that, on the day of his injury Neal transported him to the emergency room of the Presbyterian Hospital of Greenville, where doctors prescribed pain medication and crutches. (Answers 1 and 4.) As directed by the emergency room physician, plaintiff visited an orthopedic surgeon the next day who prescribed additional pain medication and a leg immobilizer and directed plaintiff to stay off his leg. (Answer 1.) As ordered by the orthopedic surgeon, plaintiff had a follow-up appointment on October 26, 2000. (Id.) At that appointment the doctor discontinued the leg immobilizer and ordered physical therapy. (Id.) Plaintiff's leg and knee were healing. (Answers 1 and 5.)
*1114 The ninety-minute delay does not appear to violate civilized standards or concepts of humanity and decency. See Estelle v. Gamble, 429 U.S. 97, 102-03, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976) (stating that the Eighth Amendment prohibits any punishment that violates civilized standards and concepts of humanity and decency). In addition, the alleged deprivation must be objectively "sufficiently serious." Wilson v. Seiter, 501 U.S. 294, 298, 111 S.Ct. 2321, 115 L.Ed.2d 271 (1991). Under the facts of this case, the ninety-minute delay does not appear sufficiently serious under this objective standard.
Although plaintiff complains about the ninety-minute delay in the receipt of treatment, he does not indicate that his physical condition during that time warranted prompter medical treatment or that it wholly debilitated him. He does not allege, furthermore, that the delay exasperated or aggravated his injuries or otherwise damaged him. All of his injuries appear solely attributed to the door closing on him, not on the ninety minutes it took to transport him to the emergency room. His injuries do not appear to be of a type that require more prompt medical treatment.
Under the "deliberate indifference" standard, moreover, a prison official is not liable for the denial of medical treatment "unless the official knows of and disregards an excessive risk to inmate health or safety". Stewart v. Murphy, 174 F.3d 530, 534 (5th Cir.1999) (quoting Estelle, 429 U.S. at 104). Plaintiff has not shown that anyone disregarded a known excessive risk to his health by delaying medical treatment by ninety minutes.
For these reasons, the Court finds no deliberate indifference from the alleged ninety-minute delay. Plaintiff's claimed denial of medical care is thus frivolous and does not survive summary dismissal.
C. Charging for Medical Treatment
Plaintiff suggests that defendant Brannon violated his civil rights by deducting payments from his prison trust account for medical services rendered. (Answer 5.) He does not specify the constitutional provision that such deductions violate. The claim could conceivably arise from the Cruel and Unusual Punishment Clause of the Eighth Amendment, as well as the Due Process and Equal Protection Clauses of the Fourteenth Amendment. See, e.g., Reynolds v. Wagner, 128 F.3d 166, 172-82 (3d Cir.1997); Hutchinson v. Belt, 957 F.Supp. 97, 99-100 (W.D.La.1996).
Prisoners have a property interest in the funds in their prison accounts. Campbell v. Miller, 787 F.2d 217, 222 (7th Cir.1986). Although plaintiff complains that defendant Brannon deducted payments from his inmate trust account for medical treatment, he makes no allegation that Brannon or anyone else deprived him of his funds without due process of law. "In procedural due process claims, the deprivation by state action of a constitutionally protected interest in `life, liberty, or property' is not in itself unconstitutional; what is unconstitutional is the deprivation of such an interest without due process of law." Zinermon v. Burch, 494 U.S. 113, 125, 110 S.Ct. 975, 108 L.Ed.2d 100 (1990). In the absence of an allegation that the deductions occurred without due process of law, plaintiff cannot succeed on a procedural due process claim.
The Due Process Clause of the Fourteenth Amendment also "contains a substantive component that bars certain arbitrary, wrongful government actions `regardless of the fairness of the procedures used to implement them.'" Id. (quoting Daniels v. Williams, 474 U.S. 327, 331, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986)). Although its opinion does not specifically mention substantive due process, *1115 the United States District Court for the Southern District of Texas has addressed the propriety of collecting payment for medical care in the prison context. See Bihms v. Klevenhagen, 928 F.Supp. 717, 718 (S.D.Tex.1996). Bihms provides the following relevant discussion:
If the inmate can pay for his medical care, then the state may require reimbursement. Texas has a law that adopts that policy. Tex.Code Crim. Pro. Ann. art. 104.002(d) (Supp.1996). No right described or adumbrated in the Constitution is implicated by a decision of the state to seek compensation for its actual, reasonable costs in maintaining the prisoner.
If the prisoner cannot pay, he must be maintained at state expense; it cannot deny minimal medical care to poor inmates. The prisoner makes no claim that he was denied care. Rather, he simply objects to being deprived of his liberty without the reverse "benefit" of cost-free maintenance from the state. As he was obliged to pay court costs, he may be obliged to pay his medical costs. Texas imprisoned him; it did not adopt him.
928 F.Supp. at 718 (case citations omitted). Deducting payments from a prisoner's inmate trust account for medical services rendered does not appear to be an arbitrary or wrongful government action. States may decide who should pay for the medical care of inmates. City of Revere v. Massachusetts Gen. Hosp., 463 U.S. 239, 244-45, 103 S.Ct. 2979, 77 L.Ed.2d 605 (1983). To the extent plaintiff claims the deductions by Brannon violate his substantive due process rights, the claim is frivolous.
A claim that the deductions somehow violate the Equal Protection Clause of the Fourteenth Amendment likewise fails. Nothing before the Court suggests an Equal Protection violation. Plaintiff, furthermore, has not alleged that he is a member of a suspect class. The Court would thus apply a "rational basis scrutiny" to any Equal Protection challenge by plaintiff. See Dudley v. Angel, 209 F.3d 460, 463 (5th Cir.2000). The Western District of Louisiana has found the Louisiana co-payment policy constitutional under the rational basis test. See Hutchinson v. Belt, 957 F.Supp. 97, 100 (W.D.La.1996).
The state has a legitimate interest in the efficient use of prison resources. The co-pay Policy accomplishes this goal by applying negative reinforcement to the human tendency to overuse health care services paid for by a third party. This is the very same, common sense reason that many health care systems in this country have implemented co-pay policies. Co-pay policies are designed to encourage universal, but efficient, access to medical care.
Id. The same rationale applies to the Texas co-payment policy. Consequently, to the extent plaintiff makes a claim under the Equal Protection Clause, the Court finds it frivolous.
Under the facts presented, the Cruel and Unusual Punishment Clause of the Eighth Amendment appears to be the most likely provision upon which plaintiff's claim rests. That Amendment, nevertheless, provides no basis for a claim against Brannon. Deducting payments from a prison trust account does not of itself violate the Eighth Amendment's prohibition against cruel and unusual punishment. "There is ... no general constitutional right to free health care." Reynolds v. Wagner, 128 F.3d 166, 174 (3d Cir.1997); see also, City of Revere v. Massachusetts Gen. Hosp., 463 U.S. 239, 244-45 & n. 7, 103 S.Ct. 2979, 77 L.Ed.2d 605 (1983) (recognizing that, although the state must provide inmates with basic medical care, the question of who must ulti- *1116 mately pay for such services is a matter of state law). Charging inmates for medical care, furthermore, is not per se unconstitutional. Reynolds, 128 F.3d at 174; Shapley v. Nevada Bd. of State Prison Comm'rs, 766 F.2d 404, 408 (9th Cir.1984).
To succeed on a claim of cruel and unusual punishment against Brannon, plaintiff must demonstrate that she was deliberately indifferent to his medical needs. Deducting payments from his inmate trust account does not of itself exhibit deliberate indifference by Brannon. Plaintiff, furthermore, has alleged no facts that reveal how the payments affected him. He has not alleged, moreover, that he was denied medical treatment because of any inability to pay for the medical treatment. He has not shown a violation of the Eighth Amendment.
D. Dispensing Medicine Without Medical License
Plaintiff suggests that defendant Brannon violated his civil rights by dispensing medicine without a medical license. (See Answer 5.) This claim is not cognizable under 42 U.S.C. § 1983. The statute only provides a cause of action for deprivations "secured by the Constitution and laws' of the United States." Livadas v. Bradshaw, 512 U.S. 107, 132, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994). Prisoners have no constitutional right to have their medication dispensed by a licensed medical practitioner. Federal law, furthermore, does not require that medication be dispensed solely by licensed practitioners. Officer Brannon violated no constitutional provision or federal statute when she dispensed medicine without a license.
RECOMMENDATION
For the foregoing reasons, it is recommended that the District Court DISMISS plaintiff's complaint as frivolous pursuant to 28 U.S.C. §§ 1915(e)(2)(B) and 1915A(b).
April 17, 2001.
NOTES
[1] Plaintiff amended the spelling of this defendant's name in an attachment to his answers to a Second Magistrate Judge's Questionnaire.
[2] In a document filed March 12, 2001, plaintiff requested that the Court correct the spelling of this defendant's name. The Court thus uses the spelling as corrected in the document filed March 12, 2001.
[3] Although plaintiff suggests that someone denied him the use of prescribed crutches, (Answer 1), he seeks no damages for such denial and has identified no person responsible for it (see Answer 2). Accordingly, such a claim fails. The Court need not address suggestions of constitutional deprivations made merely in passing without support.
|
_____________
No. 95-3356ND
_____________
United States of America, *
*
Appellee, * Appeal from the United States
* District Court for the District
v. * of North Dakota.
*
Floyd Wesley Shulze, * [UNPUBLISHED]
*
Appellant. *
_____________
Submitted: February 13, 1997
Filed: March 6, 1997
_____________
Before McMILLIAN, JOHN R. GIBSON, and FAGG, Circuit Judges.
_____________
PER CURIAM.
Floyd Wesley Shulze appeals his weapons-related convictions and
guidelines sentence. Relying on United States v. Lopez, 115 S. Ct. 1624
(1995), Shulze raises a Commerce Clause challenge to the constitutionality
of the interstate weapons charges. Because the provisions under which
Shulze was charged contain an interstate commerce requirement, Shulze’s
argument is foreclosed by our recent opinions. See United States v. Bates,
77 F.3d 1101, 1103-04 (8th Cir.), cert. denied, 117 S. Ct. 215 (1996);
United States v. Shelton, 66 F.3d 991, 992 (8th Cir. 1995) (per curiam),
cert. denied, 116 S. Ct. 1364 (1996). Shulze’s contention that the
district court improperly considered predicate felonies for which Shulze’s
civil rights had been restored is similarly foreclosed by our decision in
United States v. Dockter, 58 F.3d 1284, 1289-91 (8th Cir. 1995), cert.
denied sub nom., Shulze v. United States, 116 S. Ct. 932 (1996). We also
reject Shulze’s contention that the enhancement to his sentence for crimes
committed while he was on
bail violates double jeopardy. See United States v. Lincoln, 956 F.2d
1465, 1473 (8th Cir. 1992); United States v. Thomas, 930 F.2d 12, 13-14
(8th Cir. 1991). Finally, Shulze challenges the sufficiency of the
evidence to support his conviction for bartering stolen weapons. Contrary
to Shulze’s view, there is overpowering evidence that Shulze bartered
stolen weapons for cocaine. See United States v. Koskela, 86 F.3d 122, 126
(8th Cir. 1996) (evidence against Shulze characterized as “overwhelming”).
The court declines to consider the supplemental citations raised in
Shulze’s correspondence with his counsel. This matter is best presented
in a motion under 28 U.S.C. § 2255. We thus affirm Shulze’s convictions
and sentence.
JOHN R. GIBSON, Circuit Judge, concurs in the result and in the judgment
in this case.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-2-
|
114 F.Supp. 599 (1953)
FOLTZ
v.
NEWS SYNDICATE CO., Inc.
United States District Court S. D. New York.
August 17, 1953.
*600 John J. Von Der Lieth, New York City, for plaintiff.
Townley, Updike & Carter, New York City, J. Howard Carter and Andrew L. Hughes, New York City, of counsel, for defendant.
WEINFELD, District Judge.
Plaintiff seeks to recover damages for an alleged libel based upon an editorial published in the November 7, 1951, issue of the defendant's newspaper, The Daily News. Jurisdiction rests upon diversity of citizenship.
Plaintiff moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A., with the amount of damages to be later assessed. The defendant cross-moves (1) to dismiss the action upon the ground that the complaint fails to state a claim against the defendant upon which relief can be granted; or, in the alternative, (2) for summary judgment in its favor.
*601 The editorial which gives rise to the present action commented upon a decision by the Supreme Court of the United States in a libel and slander action brought by the plaintiff against the Moore McCormack Lines, Inc. In that action plaintiff sued Moore McCormack Lines, Inc., his former employer, for maliciously giving to the Federal Bureau of Investigation false and derogatory statements which caused him to be discharged from a federal office to which he had been appointed. The defamatory matter complained of was both written and oral and charged the plaintiff with various acts of misconduct. There is no need to specify these charges other than to state they were entirely unrelated to Communistic or subversive activity or affiliation.[1] Plaintiff's amended complaint had been dismissed by the District Court on the ground that the complaint failed to state a claim upon which relief could be granted, but the Court of Appeals reversed, holding that statements made to the Federal Bureau of Investigation are not absolutely privileged and that if actuated by malice, the privilege is lost.[2] The Government assumed the defense of the action since it was liable to indemnify the Moore McCormack Lines, Inc. under the wartime general agency agreement between the latter and the War Shipping Administration.
Following the reversal by the Court of Appeals, the Solicitor-General filed a petition for a writ of certiorari. In support of the writ it was urged, at the instance of the Director of the FBI, that the administration of the Government employee and security programs, as well as other phases of law enforcement, would be seriously hampered unless communications by citizens to Government agencies and officials made in the course of official inquiry were protected by absolute privilege and the declarants held immune from libel actions. The Supreme Court, however, denied certiorari on November 5, 1951.[3] It was this denial which prompted the editorial complained of in the present action.
The editorial appears under the title "Mustn't Be Beastly to the Bolos". It comments upon two decisions of the Supreme Court handed down several days previously and relates these to the Communist menace in the United States. The first decision dealt with the question of bail in a prosecution against alleged Communist leaders on the West Coast under the Smith Act, wherein the Court concluded that proper criteria had not been applied in fixing bail.[4] The second decision referred to was the denial of certiorari in the plaintiff's case. Neither decision was referred to by title, nor were any names mentioned. The editorial, after first commenting upon the bail case, continued:
"The other `musn't be beastly to the bolos' decision had to do with people who buzz J. Edgar Hoover's Federal Bureau of Investigation about persons suspected of Communist activities.
"The FBI habitually covers up for such informers as best it can. But if a person thus informed on can catch up with the giver of the tip, the Supreme Court held Monday that he can bring suit for slander or libel, only provided he can show that the information was passed to the FBI with malice.
"We haven't yet met or heard of a genuine American who didn't feel malicious about the domestic Reds. You can't help entertaining some resentment against people who are conspiring to overthrow your Government by force and violence and turn you personally into a slave.
"But if you let your malice move you to tip off the FBI about the doings of some such person, you're laid open by this Supreme Court decision to a damage suit.
"It seems a certainty that the ruling will put a serious dent in Mr. Hoover's *602 pipelines, and thereby impair the splendid service the FBI renders in tracking down traitors.
"Apparently the Supreme Court doesn't yet realize what most of the rest of us have long knownthat the Communists mean business, intend to ruin this country, will use any and every means at their disposal to do so, and therefore cannot be effectively handled under all the rules of ordinary American fair dealing.
"Instead of playing into the Reds' hands, isn't it about time to revise some of the rules as regards this very special and dangerous mob?"
The complaint alleges that the foregoing was published "of and concerning the plaintiff", and by this editorial the defendant meant and intended to mean and was understood by the reading public to mean, that the plaintiff was a person suspected of Communistic activities who had been informed upon to the FBI and had sued the informant for maliciously giving the FBI information about said suspected Communist activities; and further that ordinary rules of American fair dealing should not be afforded by the Supreme Court to such a person as the plaintiff, because he is a member of a very special and dangerous mob, the domestic Reds.
The amended answer, besides denials, pleads that the editorial was fair comment upon matters of public interest and, therefore, privileged, and that it was based on reliable and trustworthy sources and was published in good faith and without malice.
The defendant's position is that the editorial does not name the plaintiff, makes no reference to the facts of the plaintiff's case, and fairly read cannot be deemed to refer to him. It argues that the editorial is nothing more than fair comment upon the Supreme Court decision denying certiorari and as such it is privileged. It also challenges the innuendos. Finally, it denies that the editorial is false and defamatory. The plaintiff naturally contends to the contrary. In support of his motion, the plaintiff has presented items from the New York Times and the New York Herald Tribune on November 6, 1951 (the day previous to the appearance of the editorial in defendant's newspaper) which mentioned Cecil E. Foltz, Jr. and Moore McCormack Lines by name as the parties in the action and gives the gist of the case and the Supreme Court's decision.
First, as to the defendant's denial that the editorial is "of and concerning the plaintiff." Ordinarily, whether a written defamatory statement refers to the plaintiff is a question of fact and may be proved by extrinsic evidence. The need for the introduction of extrinsic evidence for such a purpose does not convert a defamatory statement which would otherwise be actionable without proof of special damage into one actionable only on proof of special damage.[5]
The news items which had appeared in the New York Times and the New York Herald Tribune may be introduced to show the condition of the public mind to establish that readers of the editorial necessarily understood that it applied to the plaintiff alone.[6] Moreover, upon a trial it may be shown that persons, other than those who read the Times and Tribune news items followed the case through the courts and readily recognized that the editorial was intended to and did refer to the plaintiff. Whether the editorial complained of was "of and concerning plaintiff" is a question of fact to be determined by the jury.[7]
*603 So, too, whether the article is defamatory or susceptible to the innuendos as plaintiff alleges, presents issues of fact.[8] Though it may be conceded that the reference in the editorial to the Supreme Court decision as one having to do with "people who buzz J. Edgar Hoover's Federal Bureau of Investigation about persons suspected of Communist activities" does not, as a matter of law, identify the plaintiff as a person so suspected, certainly it would be within the competency of the jury to find that it did. The entire editorial is devoted to the Red danger in the United States. The jury may find that persons reading the editorial, particularly those who had seen plaintiff's name in the contemporary news reports of the case, understood that the information furnished to the FBI charged the plaintiff with suspicion of Communist activity and that his suit was against the informant for maliciously giving such information to the FBI. In point of fact, as already noted, the Supreme Court case wherein plaintiff sued Moore McCormack Lines, Inc. was entirely unrelated to any charge that he was suspected of Communistic activity or affiliation. A jury could properly find that the clause "the decision had to do with people who buzz J. Edgar Hoover's Federal Bureau of Investigation about persons suspected of Communist activities" purported to reflect the factual basis of plaintiff's suit, that plaintiff was a person suspected of Communist activities who had been informed upon to the FBI. This is in essence the innuendo set out in the complaint. That such a charge published in November, 1951, would tend to cause many to regard him with scorn and hostility, requires no extended discussion. It is enough to make the publication actionable without proof of special damage.[9]
The defendant next urges that the editorial is fair comment on a judicial proceeding and is absolutely privileged. However, the defense of fair comment requires that the facts be truly stated. A jury's findings that the editorial charged the plaintiff as one suspected of Communistic activities would of necessity imply that there was a misstatement or omission of material fact. As such, it is not within the privilege accorded to fair comment.[10]
In the light of the foregoing, it is clear that the motion of the defendant to dismiss the complaint for failure to state a claim cannot prevail.
The basis of defendant's motion for summary judgment is that plaintiff will be unable to establish any actual malice. Here the defendant contends that the allegations of the complaint that the editorial was published "in a reckless, wanton and careless manner" is refuted by the affidavit of the editorial writer. This issue is one of fact to be disposed of upon trial.[11] The defendant's cross-motion for summary judgment must likewise be denied.
As to plaintiff's motion for summary judgment, it is equally clear that the issues of fact as to (1) whether the publication referred to the plaintiff, and (2) whether it sustains the innuendos and could reasonably be understood to defame the plaintiff, or whether it was, as urged by the defendant, an impersonal comment on the principle of law involved in the Supreme Court decision and its possible future effect, require its denial.
Accordingly the plaintiff's motions and the defendant's motion are each denied.
Settle order on notice.
NOTES
[1] The action having been instituted in this Court, judicial notice is taken of the records. See Fletcher v. Evening Star Newspaper Co., 77 U.S.App.D.C. 99, 133 F.2d 395.
[2] Foltz v. Moore McCormack Lines, Inc., 2 Cir., 189 F.2d 537.
[3] 342 U.S. 871, 72 S.Ct. 106, 96 L.Ed. 655.
[4] Stack v. Boyle, 342 U.S. 1, 7, 72 S.Ct. 1, 96 L.Ed. 3.
[5] Brayton v. Crowell-Collier Publishing Co., 2d Cir., 205 F.2d 644; see also Gross v. Cantor, 270 N.Y. 93, 96, 200 N.E. 592; Balabanoff v. Hearst Consolidated Publications, Inc., 294 N.Y. 351, 354, 62 N.E.2d 599; Estill v. Hearst Publishing Co., Inc., 7 Cir., 186 F.2d 1017; Nunnally v. New Yorker Staats Zeitung, 111 App.Div. 482, 97 N.Y.S. 911.
[6] Van Ingen v. Mail & Express Pub. Co., 156 N.Y. 376, 50 N.E. 979.
[7] Van Ingen v. Mail & Express Pub. Co., 14 Misc. 326, 329, 35 N.Y.S. 838, 840; Stokes v. Morning Journal Ass'n, 66 App. Div. 569, 73 N.Y.S. 245; Nunnally v. New Yorker Staats Zeitung, 111 App.Div. 482, 97 N.Y.S. 911.
[8] Hartmann v. American News Co., 7 Cir., 171 F.2d 581, certiorari denied 337 U.S. 907, 69 S.Ct. 1049, 93 L.Ed. 1719; Mencher v. Chesley, 297 N.Y. 94, 100, 75 N.E.2d 257; Tracey v. Wm. J. Kline & Son, 274 App.Div. 149, 151, 81 N.Y.S.2d 1.
[9] Grant v. Readers Digest Ass'n, Inc., 2 Cir., 151 F.2d 733, certiorari denied 326 U.S. 797, 66 S.Ct. 492, 90 L.Ed. 485; Mencher v. Chesley, 297 N.Y. 94, 75 N.E. 2d 257; Levy v. Gelber, 175 Misc. 746, 25 N.Y.S.2d 148; Boudin v. Tishman, 264 App.Div. 842, 35 N.Y.S.2d 760.
[10] Bingham v. Gaynor, 203 N.Y. 27, 96 N.E. 84; Seelman, Law of Libel and Slander, p. 234.
[11] Cf. National Labor Relations Board v. Dinion Coil Co., 2 Cir., 201 F.2d 484, 487; Dyer v. MacDougall, 2 Cir., 201 F. 2d 265.
|
407 A.2d 168 (1979)
HILL-MARTIN CORPORATION
v.
Francis W. ALLING, II.
No. 112-78.
Supreme Court of Vermont.
September 17, 1979.
Abare, Donaghy & Nicholls, P. C., Barre, for plaintiff.
Pierson, Affolter & Wadhams, Burlington, for defendant.
Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.
PER CURIAM.
In a civil action tried to a jury the plaintiff sought to recover a balance due upon a promissory note that it claimed was signed by the defendant in his individual capacity. The defendant denied the claim made against him and introduced evidence tending to show that he executed the instrument as a representative of Alling Construction *169 Company, Inc. The jury found in favor of the defendant. Following entry of the verdict the plaintiff moved to set aside the verdict and for entry of judgment notwithstanding the verdict claiming that the verdict was unsupported by the evidence and was erroneous as a matter of law. The motion was denied.
The plaintiff's appeal seeks in effect the relief prayed for in the motion for judgment notwithstanding the verdict. It may be noted that at no time did the plaintiff move for a new trial. The record reveals that the plaintiff did not move for a directed verdict before the case was submitted to the jury. By failing to move for a directed verdict at any time during trial, plaintiff cannot raise on appeal as a question of law the sufficiency of the evidence, and it was even precluded from moving for judgment notwithstanding the verdict. Merrill v. Reville, 135 Vt. 517, 380 A.2d 96 (1977). The issue of sufficiency of the evidence to support the verdict remains unpresented to the trial court and is therefore not preserved for appellate review. Houghton v. Leinwohl, 135 Vt. 380, 376 A.2d 733 (1977); Palmisano v. Townsend, 136 Vt. 372, 392 A.2d 393 (1978).
In its brief the plaintiff contends that the trial court erred in instructing the jury to determine whether the defendant "intended to sign the note solely as a representative or agent or officer of the corporation." At most plaintiff's brief merely repeats its objection to the charge without the aid of argument or supporting authorities and presents no question for review. Sullivan v. Demas, 124 Vt. 397, 205 A.2d 818 (1964). This is insufficient briefing under V.R.A.P. 28(a)(4). We do not search the record for error not adequately briefed. Quazzo v. Quazzo, 136 Vt. 107, 111, 386 A.2d 638 (1978).
Judgment affirmed.
|
584 A.2d 643 (1990)
CASCO NORTHERN BANK, N.A.
v.
Robert C. PEARL and Cathryn M. Pearl.
Supreme Judicial Court of Maine.
Argued November 15, 1990.
Decided December 28, 1990.
*644 William Kayatta (orally), Jennie L. Clegg, Pierce, Atwood, Scribner, Allen, Smith & Lancaster, Portland, for plaintiff.
Graydon C. Stevens (orally), Kelly, Remmel & Zimmerman, Portland, for defendants.
Before ROBERTS, WATHEN, GLASSMAN, CLIFFORD and COLLINS, JJ.
GLASSMAN, Justice.
The defendants, Robert C. Pearl and Cathryn M. Pearl, appeal from the summary judgment entered by the Superior Court (Cumberland County, Alexander, J.) for the plaintiff, Casco Northern Bank, N.A. (the Bank), in its action to foreclose, pursuant to 14 M.R.S.A. §§ 6321-6325 (1980 & Supp.1990), on several mortgages it held on property owned by the Pearls. The Pearls contend that the court erred in granting the Bank's motion for a summary judgment because genuine issues of material fact remained on the Pearls' affirmative defense that the Bank had breached its fiduciary duty as trustee of Robert Pearl's trust account. Finding no error, we affirm the judgment.
The facts of this case are undisputed: the Bank served as the trustee, custodian, and investment manager of a trust account with assets of approximately $1.4 million, of which Robert Pearl was the sole beneficiary.[1] In November 1987, the Bank made two separate loans to the Pearls totaling $550,000, and took mortgages on the Pearls' residence and other property to secure these loans.[2] In January 1989, Robert asked the Bank to extend further credit in the amount of $2 million, and the Bank agreed on the condition that, as partial security for the new loans, Robert execute an agreement pledging the trust assets as collateral for all existing and future indebtedness. Robert signed this agreement. Three months later, the Bank agreed to extend Robert another $150,000 and Pearl executed a reaffirmation agreement, which expressly provided that "[t]o the extent of any inconsistency between the rights of the Bank under and pursuant to the Pledge Agreement, and the rights and duties of the Bank under and pursuant to the [trust] Agreement, the Debtor acknowledges and agrees that the rights of the Bank under the Pledge Agreement shall take precedence and supercede [sic]." Robert used the major part of these loans to invest in his own investment company. In December 1989, after Robert's business failed and the Pearls defaulted on the loan payments, the Bank instituted the current action for a foreclosure and sale on the four mortgages. In their answer to the Bank's complaint, the Pearls asserted as an affirmative defense that "Plaintiff's claim is *645 barred in that it has by its conduct waived any defaults by Defendants." The Bank filed a motion for a summary judgment on its claim. In an affidavit in opposition to the motion, Robert asserted that the Bank had breached its duty of reasonable care by failing to advise him of the degree of risk involved in the investment in his own business and its duty of loyalty by convincing him to use the trust assets as collateral for the loans, and that the Bank should be charged with any loss resulting from that breach. The Bank did not file any affidavits in response. After a hearing, the trial court entered a summary judgment for the Bank from which the Pearls appeal.
The Pearls contend that the trial court erred in granting the Bank's motion for a summary judgment because Robert's affidavit in opposition to the motion generated factual issues regarding the Bank's alleged breach of its fiduciary duty of reasonable care and its duty of loyalty. We will affirm a summary judgment if the record discloses that there is no genuine issue of material fact and that any party is entitled to a judgment as a matter of law. M.R.Civ.P. 56(c); see Saltonstall v. Cummings, 538 A.2d 289, 290 (Me.1988). It is proper to grant a summary judgment where the plaintiff has the burden of proof on an essential issue and it is apparent that the defendant would be entitled to a directed verdict if the plaintiff presented no more evidence than he generated at the motion hearing. See Bailey v. Gulliver, 583 A.2d 699 (Me.1990); Estes v. Smith, 521 A.2d 682, 683 (Me.1987); 2 Field, McKusick & Wroth, Maine Civil Practice § 56.2a, at 36 (2d ed. 1970).
First, the Pearls argue that a genuine issue of material fact remained on the issue of whether the Bank had breached its fiduciary duty of reasonable care by failing to investigate Robert's business and advise him of the investment risk involved. The record discloses that the Pearls failed to generate a factual dispute on the essential element of causation. The Pearls relied on the historical fact that Robert's business enterprise failed at some time after he signed the pledge agreements, but they produced no evidence that the business was a bad credit risk at the time he pledged the trust assets. Absent this evidence, there is nothing in the record to suggest that the Bank would have discovered any risk had it investigated Pearl's company at that time, and therefore no evidence that the Bank's failure to investigate was the proximate cause of the Pearls' loss. See Hines v. Ayotte, 135 Me. 103, 108, 189 A. 835, 838 (1937) (breach of trustee's duty of reasonable diligence not established where plaintiff-beneficiary failed to produce evidence that the bank in which the trust funds were deposited was not a safe investment at the time of deposit by trustee.)
Second, the Pearls contend that the Bank breached its fiduciary duty of loyalty by engaging in self-dealing when it convinced Robert to sign the pledge agreement to further the Bank's own commercial interests. It is well established that a trustee must meet a stringent standard before he may engage in any transaction that involves the trust assets and that inures to the trustee's own benefit. See 2 Scott on Trusts § 170, at 1298 (1967). We have held, however, that a beneficiary will be estopped from challenging the propriety of the transaction when the beneficiary is competent, acts with full knowledge of the material facts and of the effect on his rights, is not induced by the trustee's misrepresentations or coercion, and voluntarily consents to the transaction. See In re Marble, 136 Me. 52, 56-57, 1 A.2d 355, 357-58 (1938) (trustee did not breach duty by accepting compensation from trust assets for her services on behalf of plaintiff-beneficiary's child where plaintiff voluntarily agreed to such an arrangement).
The Pearls have not raised any factual issue regarding Robert's competence or his ability to understand the legal effect of the terms contained in the pledge agreement. The Bank produced written instruments signed by Pearl, consisting of the pledge agreement and the reaffirmation agreement, that clearly outline the material facts of the transaction and the consequences attending Robert's signature, including the risk of foreclosure. The Pearls do not contend *646 that the Bank made any false or misleading representations regarding the terms of these written instruments in order to obtain Robert's written consent. Because he was free to reject the terms at any time, Robert did not and could not characterize the Bank's conditions for advancing additional funds for his business as coercive. In these circumstances, where the beneficiary has voluntarily accepted the benefit of the challenged transaction, he will be equitably estopped from seeking a remedy for an alleged breach of a duty of loyalty. Id. at 59, 1 A.2d at 358-59 (quoting Martin v. Maine Cent. R.R., 83 Me. 100, 104, 21 A. 740, 741 (1890)). Because the Pearls failed to produce evidence to support their affirmative defense sufficient to withstand a motion for a directed verdict at trial, the court properly granted the Bank's motion for a summary judgment.
The entry is:
Judgment affirmed.
All concurring.
NOTES
[1] Any agreement between Pearl and the Bank relating to the opening of this account with the Bank was not included in the record before us.
[2] The second mortgage, the only one to which Cathryn Pearl was a party, was paid in full after commencement of the foreclosure action.
|
Fourth Court of Appeals
San Antonio, Texas
JUDGMENT
No. 04-13-00612-CV
Sage M. BARRERA and Jenesey Barrera,
Appellants
v.
Dean T. CHERER,
Appellee
From the County Court, Guadalupe County, Texas
Trial Court No. 2013-CV-0077
Honorable Charles Ramsay, Judge Presiding
BEFORE CHIEF JUSTICE STONE, JUSTICE MARION, AND JUSTICE MARTINEZ
In accordance with this court’s opinion of this date, the trial court’s judgment is
VACATED, and judgment is RENDERED dismissing appellee’s forcible detainer lawsuit. It is
ORDERED that appellants recover their costs of this appeal from appellee.
SIGNED April 30, 2014.
_____________________________
Sandee Bryan Marion, Justice
|
17 §§
No. 30323 y
IN THE SUPREME coURT oF THE sTATE oF HAWA:‘I
~*» ma
DAVlD KEANU SAl, PetitiOner,
VS.
THE HONORABLE CLYDE SUMlDA, JUDGE OF THE DISTRlCT
COURT OF THE FlRST ClRCUlT, STATE OF HAWAYl, Respondent.
ORlGINAL PROCEEDlNG
(Case No. lDTI-09-l67852)
ORDER
(By: Moon, C.J., Nakayama, Acoba, Duffy, and Recktenwald, JJ.)
Upon consideration of the petition for a writ of
prohibition filed by petitioner David Keanu Sai and the papers in
support, it appears that petitioner fails to demonstrate a clear
and indisputable right to relief. See Kema v. Gaddis, 91 Hawafi
200, 204, 982 P.2d 334, 338 (1999) (A writ of prohibition is an
extraordinary remedy that will not issue unless the petitioner
demonstrates a clear and indisputable right to relief and a lack
of alternative means to redress adequately the alleged wrong or
obtain the requested action.) Therefore,
IT IS HEREBY ORDERED that the petition for a writ of
prohibition is denied.
DATED: Honolulu, Hawafi, February 25, 2010.
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|
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________
)
LEE MEMORIAL HEALTH SYSTEM )
f/b/o LEE MEMORIAL HOSPITAL, )
et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 13-cv-643 (RMC)
)
SYLVIA M. BURWELL, Secretary of the )
U.S. Department of Health & Human )
Services )
)
Defendant. )
_________________________________ )
OPINION
In these consolidated cases, Plaintiff hospitals challenge the methods used by the
Department of Health & Human Services to calculate the “fixed-loss threshold,” a term integral
to reimbursement under the Medicare program. Because the Center for Medicare and Medicaid
Services, a constituent agency of HHS, followed the notice and comment rulemaking process
and is entitled to a highly deferential standard of review, the Court cannot say that it has acted
arbitrarily or capriciously. The regulations will stand.
I. FACTS
Plaintiffs, a group of non-profit organizations that own and operate acute care
hospitals participating in the Medicare program (Hospitals), 1 contend that the Center for
1
Plaintiffs are: Billings Clinic, Charleston Area Medical Center, Good Samaritan Hospital,
Sarasota Memorial Hospital, Valley View Hospital, West Virginia University Hospital, Lee
Memorial Health System, Banner Health, Halifax Community Health System, University of
Colorado Health at Memorial Hospital, Allina Health, Denver Health Medical Center, Billings
Clinic Hospital, Parkview Medical Center, Good Samaritan Hospital, and Boulder Community
Hospital.
1
Medicare and Medicaid Services (CMS), led by Secretary Sylvia Burwell (the Secretary), has
underpaid them for Medicare services provided during the fiscal years ending in 2008, 2009,
2010, and 2011. Plaintiffs challenge CMS’s administration of the outlier payment system, which
pays eligible hospitals a percentage of their costs above the typical threshold for treating a
Medicare patient. Plaintiffs challenge the “fixed loss threshold” rulemakings promulgated in
fiscal years 2008 through 2011, as well as the 2003 amendment to the outlier payment
regulations.
Presently before the Court are Defendant’s Motion to Dismiss or, in the
alternative, for Summary Judgment, Dkt. 73, and Plaintiffs’ Motion for Summary Judgment, Dkt.
74.
A. Statutory Background
Medicare is a federal program that provides health insurance to the elderly and the
disabled. See generally 42 U.S.C. §§ 1395 et seq. Generally speaking, hospitals provide care to
Medicare beneficiaries and then seek reimbursement from CMS.
Reimbursement is not a precise exercise. Instead of reimbursing the providers
dollar for dollar, CMS pays fixed rates through the Inpatient Prospective Payment System
(IPPS). 2 Under IPPS, inpatient services are divided into categories called “diagnosis related
groups” or “DRGs.” See 42 U.S.C. § 1395ww(d). Each DRG merits a standard payment rate,
intended to reflect the estimated average cost of treating the service(s) provided. See id.
2
The program originally reimbursed hospitals for the “reasonable costs” of services provided to
Medicare patients. Cnty. of L.A. v. Shalala, 192 F.3d 1005, 1008 (D.C. Cir. 1999). That system
deteriorated over time because it provided “little incentive for hospitals to keep costs down,”
since “[t]he more they spent, the more they were reimbursed.” Id. (internal quotations and
citations omitted).
2
Because these DRGs correspond to the given patient’s diagnosis upon discharge, the rates may
vary from the costs actually incurred by the provider.
In some cases, the rates may drastically understate a hospital’s costs. To
compensate providers for exceptionally costly cases, Congress established the “outlier” payment
system. See generally 42 U.S.C. § 1395ww(d)(5)(A). If the cost of health care in a given case
exceeds the DRG payment “plus a fixed dollar amount determined by the Secretary,” then the
hospital is eligible for an outlier payment. Id. § 1395ww(d)(5)(A)(ii). 3 Taken together, the DRG
plus the “fixed dollar amount determined by the Secretary” represents the “outlier threshold.” 42
U.S.C. § 1395ww(d)(5)(A)(ii); see also Cnty. of L.A., 192 F.3d at 1010. If a case qualifies, the
provider receives 80% of the costs that exceed the outlier threshold. 42 C.F.R. § 412.84(k). This
80% is called the “additional payment” or “outlier payment.” E.g., id. §§ 412.80(a)(3), (c). 4
3
The cost must also exceed “any amounts payable under subparagraphs (B) and (F).” 42 U.S.C.
§ 1395ww(d)(5)(A)(ii). Those subparagraphs generally cover additional payments to
compensate for indirect costs of medical education (often abbreviated as IME); and for serving a
significantly disproportionate number of low-income and urban populations (often abbreviated as
DSH). See generally 42 U.S.C. §§ 1395ww(d)(5)(B), (F). These provisions need not be parsed
for the purposes of this case; the questions presented here can be answered by considering the
outlier threshold as a combination of the DRG rate and the “fixed dollar amount.”
4
The D.C. Circuit has succinctly summarized this process in a hypothetical:
Assume that the Secretary sets the fixed loss threshold at $10,000.
Assume also that a hospital treats a Medicare patient for a broken
bone and that the DRG rate for the treatment is $3,000. The
Medicare patient required unusually extensive treatment which
caused the hospital to impose $23,000 in cost-adjusted charges. If
no other statutory factor is triggered, the hospital is eligible for an
outlier payment of $8,000, which is 80% of the difference between
its cost-adjusted charges ($23,000) and the outlier threshold
($13,000).
Dist. Hosp. Partners, L.P. v. Burwell, 786 F.3d 46, 50-51 (D.C. Cir. 2015).
3
The key phrase for present purposes is the “fixed dollar amount,” which is to be
“determined by the Secretary” and “specified by CMS.” 42 U.S.C. § 1395ww(d)(5)(A)(ii); 42
C.F.R. § 412.80(a)(3). The parties refer to this as the “fixed-loss threshold” or “FLT.” The
Fixed Loss Threshold functions as an “insurance deductible” of sorts. Boca Raton Cmty. Hosp.,
Inc. v. Tenet Health Care Corp., 582 F.3d 1227, 1229 (11th Cir. 2009). When the cost of care
exceeds the predetermined DRG payment, the provider must absorb the entire Fixed Loss
Threshold amount before it can recoup any outlier payments from CMS. The parties’ interests
are thus diametrically opposed: CMS benefits from a higher Fixed Loss Threshold and the
Hospitals benefit from a lower Fixed Loss Threshold.
Finally, the Medicare Act requires that in any fiscal year “[t]he total amount of
the [outlier] payments . . . may not be less than 5 percent nor more than 6 percent of the total
payments projected or estimated to be made based on DRG prospective payment rates for
discharges in that year.” 42 U.S.C. § 1395ww(d)(5)(A)(iv). Thus, although the Fixed Loss
Threshold is “determined by the Secretary,” she must set a Fixed Loss Threshold high enough to
ensure that projected outlier payments do not exceed 6% of the projected DRG payments, but not
so high that projected outlier payments are less than 5% of the projected DRG. 5 Although the
statute’s command is unequivocal, Fixed Loss Threshold rulemakings are predictive. Id.
(requiring outlier payments to be within 5-6 “percent of the total payments projected or
estimated to be made based on DRG prospective payment rates for discharges”) (emphasis
added); 42 C.F.R. § 412.80(c) (“CMS will issue threshold criteria for determining outlier
5
The numbers are inversely proportional. As the Fixed Loss Threshold rises, so does the outlier
threshold. The result is a decrease in an outlier payment, which is 80% of what exceeds the
outlier threshold. So as the Fixed Loss Threshold rises, outlier payments decrease, and vice
versa.
4
payment in the annual notice of the prospective payment rates published in accordance with
§ 412.8(b).”). As a result, there is no obvious way for CMS to guarantee that annually
prescribed rates and thresholds will yield outlier payments that are between 5% and 6% of total
DRG payments in the next federal fiscal year. Nor must it take corrective action if its predictions
fall short. See Cnty. of L.A., 192 F.3d at 1020. The D.C. Circuit has upheld this practice. See
Dist. Hosp. Partners, 786 F.3d at 51.
B. Regulatory Background
2003 was a watershed year for the outlier-payment system. The system had been
manipulated in the late 1990s by some hospitals which exploited certain regulatory
vulnerabilities, arising from “the time lag between the current charges on a submitted bill and the
cost-to-charge ratio taken from the most recent settled cost report,” which predated current
charges. Notice of Proposed Rulemaking, 68 Fed. Reg. 10,420, 10,423 (Mar. 5, 2003) (3/5/03
NPRM). The outlier payment system depends on calculating “charges, adjusted to cost,”
including overhead and capital costs. 42 U.S.C. § 1395ww(d)(5)(A)(ii) (emphasis added). That
adjustment is made using the “cost-to-charge ratio” (CCR) mentioned in the Notice of Proposed
Rulemaking. Because hospitals knew that CCRs were based on past cost reports, some hospitals
increased their charges for patient care between past cost reports and current reimbursement
requests, yielding a CCR that would “be too high” and thus “overestimate the hospital’s costs.”
3/5/2003 NPRM at 10,423. Some 123 hospitals were found to have increased their charges by
70 percent, while only decreasing their CCRs by two percent. Id. at 10,424. This became known
as “turbo-charging.” Dist. Hosp. Partners, 786 F.3d at 51 (describing turbochargers).
5
1. The February 2003 Draft Interim Final Rule
The Hospitals rely heavily on a Draft Interim Final Rule proposed in February
2003—before the Notice of Proposed Rulemaking cited above—and obtained by them through a
Freedom of Information Act (FOIA) request. Hosp. Mot. [Dkt. 74] at 11 (citing AR S3595-
S3659) (Draft); see also Joint Appendix, Ex. 4 [Dkt. 81-4] at 97-161 (same). The 63-page Draft
included a number of findings and proposed various solutions. 6 The Draft found that
turbocharging caused “nearly all of the increase in the FY 2003 threshold from FY 2002
($21,025 to $33,560).” AR S3610. It also described the effect of turbocharging on the Fixed
Loss Threshold: “Because the fixed-loss threshold is determined based on hospitals’ historical
charge data, hospitals that have been inappropriately maximizing their outlier payments have
caused the threshold to increase dramatically for FY 2003.” AR S3610.
To prevent future turbocharging, the Draft said that CMS “need[ed] to make
revisions to [its] outlier payment methodology,” primarily by “updating cost-to-charge ratios
[CCRs].” 3/5/2003 NPRM at 10,421, 10,423. See also generally AR S3612-15. More
specifically, the Draft proposed to amend CMS’s payment regulations so that “fiscal
intermediaries”—insurance companies who examine Medicare payment claims under contract
with CMS—could “use either the most recent settled or the most recent tentative settled cost
report, whichever is from the latest cost reporting period.” AR S3614. But reducing the lag time
alone would not be enough, because some hospitals could still “increase charges much faster
6
The Court will ascribe the findings and recommendations to “the Draft” and not to “CMS.”
While the Hospitals argue that the Draft was CMS’s “first official act” in the rulemaking process,
Hosp. Mot. at 11, a draft rule that is circulated internally and then abandoned does not constitute
anything but a discarded first effort. Although the Court previously ordered that the Draft be
added to the Administrative Record—a decision that was upheld by the D.C. Circuit in a related
appeal, Dist. Hosp. Partners, 786 F.3d at 55 n.3—the Draft never became an official proposal by
CMS. See generally id. at 58.
6
than costs during the time between the tentative settled cost report period and the time when the
claim is processed. . . . [T]here will still be a lag of 1 to 2 years.” AR S3614-15. To counter this
possibility, the Draft proposed a new regulatory provision that would allow CMS to increase a
hospital’s CCR if “more recent charge data indicate that a hospital’s charges have been
increasing at an excessive rate (relative to the rate of increase among other hospitals).” AR
S3615. The hospitals could also have requested a modified CCR if they presented substantial
evidence that the ratios were inaccurate. AR S3615.
Further, the Draft reconsidered CMS’s previous policy “that payment
determinations [were] made on the basis of the best information available at the time a claim is
processed and [were] not revised, upward or downward, based upon updated data.” AR S3620.
Acknowledging that “some hospitals have taken advantage of the current outlier policy,” AR
S3620, the Draft resolved to reconcile processed payments with hospital cost reports once they
were ultimately settled. AR S3621; see also AR 3626 (“[W]e believe the only way to eliminate
the potential for such overpayments is to provide a mechanism for final settlement of outlier
payments using actual cost-to-charge ratios from final, settled cost reports.”). That proposal
would trigger another problem, however: “in the event of a decline in the [CCR], some cases
would no longer qualify for any outlier payments while other cases would qualify for lower
outlier payments.” AR S3622 (emphasis added). In other words, the reconciliation might show
that an instance of patient treatment was never eligible for an outlier payment to begin with. And
because CMS must predict the “total amount” of outlier payments before the fiscal year begins to
comply with the 5-6% requirement, “the only way to accurately determine the net effect of a
decrease in [CCRs] on a hospital’s total outlier payments is to assess the impact on a claim-by-
7
claim basis.” Id. The Draft admitted candidly that CMS was “still assessing the procedural
changes necessary to implement this change.” Id.
The proposed amendments to the outlier payment scheme would have also made
it “necessary,” according to the Draft, to lower the Fixed Loss Threshold. AR S3629. After
excluding the 123 offending turbochargers from the CCR pool; applying actual CCRs (from
settled cost reports) to the hospitals that were previously assigned statewide averages;
extrapolating future CCRs from the national progression over the previous three years; and
reestimating charge inflation without the 123 turbochargers, the Draft recommended reducing the
Fixed Loss Threshold from $33,560 to $20,760. See AR S3629-33.
2. FY 2003 Proposed and Final Rules Amending Payment Regulation
The Draft was never published. Although the Hospitals suggest that CMS
“bow[ed] to pressure from [the Office of Management and Budget],” Hosp. Mot. at 11, that
proposition finds no support in the record and may be inconsequential since both agencies are in
the Executive Branch and headed by presidential appointees exercising their discretion.
Whatever the reason, the Draft was abandoned.
Instead, CMS on March 5, 2003 published a Notice of Proposed Rulemaking,
3/5/03 NPRM, 68 Fed. Reg. 10,420-29. The NPRM contained the same modifications listed
above to the outlier payment scheme, but did not propose a corresponding reduction in Fixed
Loss Threshold.
After comments, the Final Rule was largely unchanged. See Final Rule, 68 Fed.
Reg. 34,494 (June 9, 2003) (Final Rule). “Many commenters recommended that [CMS] lower
the outlier threshold.” Final Rule at 34,505. CMS acknowledged having “reestimated the fixed-
loss threshold reflecting the changes implemented in this final rule that will be in effect during a
8
portion of FY 2003.” Id. Specifically, CMS inflated charges in the FY 2002 Medical Provider
Analysis and Review (MedPAR) file 7 by the two-year average annual rate of change in charges.
Id. Had its analysis stopped there, the Fixed Loss Threshold would have been $42,300. Id.
“However, after accounting for the changes implemented in this final rule, we estimate the
threshold would be only slightly higher than the current threshold (by approximately $600).” Id.
(emphasis added). Nonetheless, despite concluding that the Fixed Loss Threshold should be
higher, CMS found it “appropriate not to change the FY 2003 outlier threshold at this time”
because “[c]hanging the threshold for the remaining few months of the fiscal year could disrupt
the hospitals’ budgeting plans and would be contrary to the overall prospectivity of the [inpatient
prospective payment system].” Id. at 34,506. The Fixed Loss Threshold stayed at $33,560 for
the remainder of FY 2003. Id.
3. The FY 2004 Regulations
By the time CMS set the Fixed Loss Threshold for FY 2004, the changes to the
outlier payment regulations were fully in effect. See generally Final Rule, 68 Fed. Reg. 45,346
(Aug. 1, 2003) (FY 2004 FLT Reg.). Extrapolating from 2002 MedPAR data, CMS applied “the
2-year average annual rate of change in charges per case,” as opposed to costs per case, “to
establish the FY 2004 threshold.” Id. at 45,476. CMS then took three steps to update the CCR:
[1] for each hospital, we matched charges-per-case to costs-per-case
from the most recent cost reporting year; [2] we then divided each
hospital’s costs by its charges to calculate the cost-to-charge ratio
for each hospital; and [3] we multiplied charges from each case in
7
The MedPAR file “contains data from claims for services provided to beneficiaries admitted to
Medicare certified inpatient hospitals and skilled nursing facilities.” CMS.gov, Medicare
Provider Analysis and Review (MEDPAR) File (Feb. 18, 2015 5:11 PM), https://www.cms.gov/
Research-Statistics-Data-and-Systems/Files-for-Order/IdentifiableDataFiles/MedicareProvider
AnalysisandReviewFile.html.
9
the FY 2002 MedPAR (inflated to FY 2004) by this cost-to-charge
ratio to calculate the cost per case.
Id.
The FY 2004 Fixed Loss Threshold regulation also reviewed and evaluated the
reconciliation process established by the 2003 amendment to the outlier payment threshold. 8 68
Fed. Reg. at 45,476-77. The novel reconciliation process had presented a roadblock. See id.
(“Without actual experience with the reconciliation process, it is difficult to predict the number
of hospitals that will be reconciled.”). CMS resolved to “assess the appropriate number of
hospitals to be reconciled” once “later data bec[a]me available.” Id. CMS did identify, however,
50 of the turbocharging hospitals as likely subjects of reconciliation. Id. at 45,476-77.
Based on all of this, CMS set an FY 2004 Fixed Loss Threshold of $31,000. Id.
at 45,477.
4. The FY 2005-2007 Fixed Loss Threshold Regulations
This pattern largely repeated itself until the years challenged in this case. See
generally 69 Fed. Reg. 48,916, 49,276, 49,278 (Aug. 11, 2004) (FY 2005 FLT Reg.) (lowering
the Fixed Loss Threshold to $25,800, after initially proposing $35,085, in response to comments
suggesting that CMS revise its methodology); 70 Fed. Reg. 47,278, 47,493-94 (Aug. 12, 2005)
(FY 2006 FLT Reg.) (lowering the Fixed Loss Threshold to $23,600, after initially proposing
$26,675, by using the same methodology but updated data); 71 Fed. Reg. 47,870, 48,151 (Aug.
18, 2006) (FY 2007 FLT Reg.) (raising the Fixed Loss Threshold to $24,475, after initially
8
The FY 2003 amendment to the Payment Regulations instituted a process to reconcile outlier
payments for hospitals that were overpaid due to the “time lag in updating their cost-to-charge
ratios.” 68 Fed. Reg. at 34,504. Outlier “[p]ayments will be processed throughout the year using
the appropriate historical . . . cost-to-charge ratios” and after “the cost report is settled,” outlier
payments can be reconciled using the cost-to-charge ratio determined at the time the report is
settled. Id.
10
proposing $25,530). To sum up: the Fixed Loss Threshold was set at $25,800 in FY 2005;
$23,600 in FY 2006; and $24,475 in FY 2007.
Throughout these rulemakings, commenters continually complained that the
Fixed Loss Thresholds were too high, both out of self-interest and a concern over statutory
compliance by CMS. E.g., FY 2005 FLT Reg. at 49,276 (“Some commenters explained that this
increase to the threshold would make it more difficult for hospitals to qualify for outlier
payments and put them at greater risk when treating high cost cases. . . . The commenters further
noted that, in the proposed rule, [CMS] estimated total outlier payments for FY 2004 to be 4.4
percent of all inpatient payments.”); FY 2006 FLT Reg. at 47,974; FY 2007 FLT Reg. at 48,149.
Commenters cited previous years’ outlier payments, which had not fallen within
the 5-6% statutory window. E.g., FY 2007 FLT Reg. at 48,149 (“The commenters noted that
total estimated outlier payments in FY 2004 and FY 2005 were well under the 5.1 percent
target.”). CMS conceded this as a factual matter. Id. at 48,150 (“As the commenters noted, the
outlier thresholds we have projected in the last several years have resulted in payments below the
5.1 percent target.”). CMS also noted that in earlier years, payments had been significantly
higher than 5.1% because of turbocharging. Id. (“[I]n the early years of th[e] decade, outlier
payments were significantly higher than the 5.1 percent target we projected.”).
More specifically, commenters decried CMS’s failure to (1) apply an adjustment
factor to the CCRs; or (2) account for the effect of reconciliation. E.g., FY 2006 FLT Reg. at
47,494 (“Several commenters suggested an alternative to the methodology we proposed”: CMS
“should adjust cost-to-charge ratios that will be used to calculate the FY 2006 outlier
threshold.”); FY 2005 FLT Reg. at 49,277 (“One of the commenters also noted that none of the
11
calculations above factored in the impact of reconciliation that would result in an even lower
outlier threshold.”).
On the first point, CMS eventually relented. See FY 2007 FLT Reg. at 48,150
(“[W]e now agree with the commenters that it is appropriate to apply an adjustment factor to the
CCRs so that the CCRs we are using in our simulation more closely reflect the CCRs that will be
used in FY 2007.”). CMS agreed to “apply only a one year adjustment factor” of 99.73%. Id.
The Hospitals refer to this as a “negative 0.27%.” Hosp. Mot. at 14.
On the second point, CMS held firm and did not account for the potential effect of
reconciliation when setting the outlier threshold. FY 2007 FLT Reg. at 48,149 (“As we did in
establishing the FY 2006 outlier threshold, in our projection of FY 2007 outlier payments, we
proposed not to make an adjustment for the possibility that hospitals’ CCRs and outlier
payments may be reconciled upon cost report settlement.”) (citation omitted).
5. The FY 2008-2011 Fixed Loss Threshold Regulations
We come now to the Fixed Loss Threshold regulations at issue in this case. Cf.
Hosp. Mot. at 15 (“In Each of FYs 2008-2011 Here at Issue . . . .”). The Hospitals allege
generally that CMS “continued to use the flawed FLT model that had resulted in substantial
underpayment in FY 2007.” Id. With the benefit of hindsight, CMS has reported that the total
outlier payments (as a percentage of total DRG payments) were 4.8% for FY 2008, see 74 Fed.
Reg. at 44,012 (AR 7084); 5.3% for FY 2009, see 75 Fed. Reg. 50,042, 50,431 (Aug. 16, 2010)
(AR 10187) 9; 4.7% for FY 2010, see 76 Fed. Reg. 51,476, 51,795-96 (Aug. 18, 2011); and
4.8% for FY 2011, see 77 Fed. Reg. 53,258, 53,697 (Aug. 31, 2012).
9
The Hospitals dispute this figure, claiming that commenters have since showed outlier
payments totaled only 4.9 %. Hosp. Mot. at 15 (citing AR 9473). The reference is to a June
2010 memorandum from the Federation of American Hospitals. See AR 9420-79 [Dkt. 81-3 at
12
a. FY 2008
For FY 2008, CMS used the same methodology as it had used for FY 2007 to
calculate the outlier threshold. See 72 Fed. Reg. 47,130, 47,417 (Aug. 22, 2007) (FY 2008 FLT
Reg.). The agency applied a one-year CCR adjustment factor (99.12%) to the CCRs in the
October 2006 update to the hospitals’ Provider Specific File, which is a file for each provider
that contains the unique information relevant to that provider that is used by CMS to compute
payments and repayments for services provided. CMS also artificially inflated (by 15.04%) the
2006 MedPAR claims by two years. Id. The result was a proposed Fixed Loss Threshold of
$23,015. Id. Several commenters thought that amount was too high. See generally id. at
47,417-18. These commenters noted that outlier payments had been only 4.63% of overall FY
2007 payments; faulted CMS for not using more recent CCR data; and suggested applying the
CCR adjustment factor over different periods of time (longer or shorter than one year). Id.
CMS did not budge. See id. at 47,418 (“Because we are not making any changes
to our methodology for this final rule with comment period, for FY 2008, we are using the same
methodology we proposed to calculate the outlier threshold.”). It did use more recent data,
however, which resulted in a lower final Fixed Loss Threshold of $22,635. Id. at 47,419. 10 One
commenter implored CMS to use even more recent data. Id. at 47,418 (“The commenter urged
CMS to use the June 2007 update [to the hospital CCRs] instead of the March 2007 update for
the final rule.”). CMS declined because the June CCR update would not be ready until the end
130-38]. The Federation cites an accompanying Vaida Health Data Consultants study that
concluded: “The actual FY 2009 outlier payment level was estimated at 4.9 percent; the CMS
estimate published in the Proposed Rule is 5.3 percent.” AR 9480.
10
A notable product of the updated data was the swing in CCR adjustment factor, from a
negative in the proposed rule (0.9912) to a positive in the final rule (1.0027). Id. at 47,418.
13
of July, “which is beyond the timetable necessary for us to compute the outlier threshold and
publish this final rule with comment period by August 1st.” Id.
b. FY 2009
The process was the same for FY 2009. See 73 Fed. Reg. 48,434, 48,763 (Aug.
19, 2008) (FY 2009 FLT Reg.) (“For FY 2009, we proposed to continue to use the same
methodology used for FY 2008 to calculate the outlier threshold.”) (citation omitted). CMS
again proposed a one-year CCR adjustment factor (99.2%) to CCRs calculated from the previous
December’s Provider Specific File update. Id. Once again, the previous year’s MedPAR data
were extrapolated out by two years. Id. The result was a proposed Fixed Loss Threshold of
$21,025. Id.
This proposal found a slightly more welcoming reception than its predecessors.
Id. at 48,764 (“The commenters commended CMS for making refinements such as applying an
adjustment factor to CCRs when computing the outlier threshold but noted that, because CMS is
still not reaching the 5.1 percent target, there is still room for improvement.”). Commenters
again called the CCR adjustment calculation “unnecessarily complicated”; again urged CMS to
use more recent, historical, and industry-wide rates of change; again asked CMS to vary the CCR
adjustment factor to more or less than one year; and again asked CMS to apply the June Provider
Specific File update instead of the March version. Id.
Once again, CMS was implacable. See generally id. (providing largely the same
reasons as in FY 2008). Applying the same methodology as in the proposed rule—but with more
recent data—CMS settled on a Fixed Loss Threshold of $20,185. Id. 11 As it had done
11
This was later revised, for unrelated reasons, to $20,045. See 73 Fed. Reg. 57,888, 57,891
(Oct. 3, 2008).
14
previously, CMS refused to make “any adjustments for the possibility that hospitals’ CCRs and
outlier payments may be reconciled upon cost report settlement.” Id. at 48,765.
c. FY 2010
“For FY 2010, [CMS] proposed to continue to use the same methodology used for
FY 2009 to calculate the outlier threshold.” 74 Fed. Reg. 43,754, 44,007 (Aug. 27, 2009) (FY
2010 FLT Reg.) (citation omitted). The previous year’s MedPAR files were used, and a one-
year CCR adjustment factor (98.4%) was applied to the CCRs as contained in the previous
December’s Provider Specific File update. See generally id. at 44,007-08. CMS proposed a
Fixed Loss Threshold of $24,240, which represented a 21% increase from the previous fiscal
year. Id. at 44,008.
The FY 2010 proposed increase spurred further protest. See generally id.
Commenters could not understand why—when CMS had met its target in FY 2009—there
should be any change. Id. at 44,009. Others accused CMS of purposefully erring on the low end
of the 5-6% target or below it altogether. Id. Another asked CMS to make a mid-year change to
the Fixed Loss Threshold if it appeared that the 5-6% target would not be met. Id. Still others
repeated the requests to use June data instead of March data in the Final Rule, to account for
reconciliation. Id. at 44,009-10.
CMS insisted in its response that it had “use[d] the most recent data available to
set the outlier threshold.” Id. at 44,009. A mid-year course correction was rejected. Id. (citing
70 Fed. Reg. at 47,495). All other suggestions were denied for the same reasons as in previous
years. See generally FY 2010 FLT Reg. at 44,010.
15
d. FY 2011
Fiscal year 2011—the last at issue in this case—proved to be no different. See 75
Fed. Reg. 50,042, 50,427 (FY 2011 FLT Reg.) (Aug. 16, 2010) (“For FY 2011, [CMS] proposed
to continue to use the same methodology used for FY 2009 to calculate the outlier threshold.”)
(citation omitted). CMS proposed a one-year CCR adjustment factor of 98.9% with a resulting
Fixed Loss Threshold of $24,165, a 4.5% increase from the previous year. Id. at 50,428.
Commenters again pointed out that the previous year had missed the mark (outlier
payments were merely 4.7% of total payments) and reiterated the previous years’ suggestions
about how to fix that. See generally id. at 50,428-29. Commenters also made several discrete
suggestions, addressed in the analysis below. See infra at 38-39.
CMS rejected each of the suggestions. FY 2011 FLT Reg. at 50,429 (“Because
we are not making any changes to our methodology for this final rule, for FY 2011, we are using
the same methodology we proposed to calculate the outlier threshold.”). Applying that
methodology to the updated data yielded a final Fixed Loss Threshold of $23,075. Id. at 50,430.
C. Procedural History
Hospitals can challenge the payments they receive as reimbursements for
Medicare services by appealing to the Medicare Provider Reimbursement Review Board
(PRRB). See 42 U.S. C. § 1395oo(a), (b) (allowing consolidated appeals by multiple hospitals).
When raising questions of law challenging the validity of a regulation, hospitals can request that
the PRRB authorize expedited judicial review in federal district court. Id. § 1395oo(f)(1).
During an appeal to the PRRB, Plaintiffs requested expedited judicial review of the following
question pertaining to the Threshold Regulations during FY 2008 through FY 2011 and the 2003
amendments to the Payment Regulations:
16
Whether the specific regulations governing Outlier Case Payments
as set forth in the two regulatory sources—the Outlier Payment
Regulations and the fixed loss threshold (“FLT”) Regulations
(collectively, the “Medicare Outlier Regulations”)—as promulgated
by the Secretary of Health and Human Services (“HHS” or the
“Secretary”) and the Centers for Medicare and Medicaid Services
(“CMS”), and in effect for the appealed years are contrary to the
Outlier Statute and/or are otherwise substantively or procedurally
invalid?
PRRB R 87 (Case No. 13-0593GC) [Dkt. 81-1]. The PRRB granted expedited review and
Plaintiffs filed this action on May 3, 2013. See Compl. [Dkt. 1].
On September 2, 2014, this case was consolidated with three others. See Order
Consolidating Cases [Dkt. 25] (consolidating this case with Allina Health v. Burwell, Case No.
13-cv-775; Allina Health v. Burwell, Case No. 13-cv-776; and Denver Health Medical Center v.
Burwell, Case No. 14-cv-553). Plaintiffs have since amended the operative complaint in Dkt. 65,
see Fourth Amended Complaint, [Dkt. 65], and the parties have filed cross motions for summary
judgment. Plaintiffs’ Mot. for Summary Judgment [Dkt. 74] (Hosp. Mot.); Gov’t Mot. for
Summary Judgment [Dkt. 73] (Gov’t Mot.). 12
II. LEGAL STANDARD
The Medicare statute incorporates the standards of the Administrative Procedure
Act, 5 U.S.C. §§ 551 et seq. (APA). See 42 U.S.C. § 1395oo(f)(1) (“Such action[s] . . . shall be
tried pursuant to the applicable provisions under chapter 7 of Title 5.”). “[W]hen a party seeks
review of agency action under the APA, the district judge sits as an appellate tribunal. The
‘entire case’ on review is a question of law.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077,
1083 (D.C. Cir. 2001). This Court will review CMS’s actions under the APA and decide
12
The Court also previously ruled on Plaintiffs’ Motion to Compel the Administrative Record,
Dkt. 51, granting in part and denying in part. See Lee Mem’l Hosp. v. Burwell, 109 F. Supp. 3d
40, 51 (D.D.C. 2015).
17
“whether as a matter of law the agency action is supported by the administrative record and is
otherwise consistent with the APA standard of review.” Se. Conference v. Vilsack, 684 F. Supp.
2d 135, 142 (D.D.C. 2010). This Court will uphold CMS’s actions unless they are “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. §
706(2)(A). “An agency decision is arbitrary and capricious if it ‘relied on factors which
Congress has not intended it to consider, entirely failed to consider an important aspect of the
problem, offered an explanation for its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to a difference in view or the product of
agency expertise.’” Cablevision Sys. Corp. v. Fed. Commc’ns Comm’n, 649 F.3d 695, 714 (D.C.
Cir. 2011) (quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 43 (1983)).
Under the APA, an agency must “examine the relevant data and articulate a
satisfactory explanation for its action including a rational connection between the facts found and
the choice made.” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43 (internal quotation and citation
omitted). “Moreover, an agency cannot ‘fail[] to consider an important aspect of the problem’ or
‘offer [] an explanation for its decision that runs counter to the evidence’ before it.” Dist. Hosp.
Partners, 786 F.3d at 57 (quoting Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43)). The Court’s
review is “narrow[,] as courts defer to the agency’s expertise,” Ctr. For Food Safety v. Salazar,
898 F. Supp. 2d 130, 138 (D.D.C. 2012) (quoting Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43)),
and the reviewing court must not “substitute its judgment for that of the agency.” Id. (quoting
Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43)). However, a court may uphold agency action that is
not fully explained “if the agency’s path may reasonably be discerned.” Bowman Transp., Inc. v.
Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974).
18
A. Motion to Dismiss for Lack of Subject Matter Jurisdiction
Federal Rule of Civil Procedure 12(b)(1) allows a defendant to move to dismiss a
complaint, or any portion thereof, for lack of subject matter jurisdiction. Fed. R. Civ. P.
12(b)(1). No action of the parties can confer subject matter jurisdiction on a federal court
because subject matter jurisdiction is both a statutory requirement and an Article III requirement.
Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003). The party claiming
subject matter jurisdiction bears the burden of demonstrating that such jurisdiction exists. Khadr
v. United States, 529 F.3d 1112, 1115 (D.C. Cir. 2008); see Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 377 (1994) (noting that federal courts are courts of limited jurisdiction and
“[i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of
establishing the contrary rests upon the party asserting jurisdiction”) (internal citations omitted).
When reviewing a motion to dismiss for lack of jurisdiction under Rule 12(b)(1),
a court must review the complaint liberally, granting the plaintiff the benefit of all inferences that
can be derived from the facts alleged. Barr v. Clinton, 370 F.3d 1196, 1199 (D.C. Cir. 2004).
Nevertheless, “the Court need not accept factual inferences drawn by plaintiffs if those
inferences are not supported by facts alleged in the complaint, nor must the Court accept
plaintiffs’ legal conclusions.” Speelman v. United States, 461 F. Supp. 2d 71, 73 (D.D.C. 2006).
A court may consider materials outside the pleadings to determine its jurisdiction. Settles v. U.S.
Parole Comm’n, 429 F.3d 1098, 1107 (D.C. Cir. 2005); Coal. for Underground Expansion v.
Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003). A court has “broad discretion to consider relevant
and competent evidence” to resolve factual issues raised by a Rule 12(b)(1) motion. Finca Santa
Elena, Inc. v. U.S. Army Corps of Eng’rs, 873 F. Supp. 2d 363, 368 (D.D.C. 2012) (citing 5B
Charles Wright & Arthur Miller, Fed. Prac. & Pro., Civil § 1350 (3d ed. 2004)); see also
19
Macharia v. United States, 238 F. Supp. 2d 13, 20 (D.D.C. 2002), aff’d, 334 F.3d 61 (2003) (in
reviewing a factual challenge to the truthfulness of the allegations in a complaint, a court may
examine testimony and affidavits). In these circumstances, consideration of documents outside
the pleadings does not convert the motion to dismiss into one for summary judgment. Al-Owhali
v. Ashcroft, 279 F. Supp. 2d 13, 21 (D.D.C. 2003).
B. Motions for Summary Judgment
Under Federal Rule of Civil Procedure 56, summary judgment is appropriate “if
the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247 (1986). Moreover, summary judgment is properly granted against a party who
“after adequate time for discovery and upon motion . . . fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In ruling
on a motion for summary judgment, the court must draw all justifiable inferences in the
nonmoving party’s favor and accept the nonmoving party’s evidence as true. Anderson, 477
U.S. at 255.
When evaluating cross-motions for summary judgment, each motion is reviewed
“separately on its own merits to determine whether [any] of the parties deserves judgment as a
matter of law.” Family Trust of Mass., Inc. v. United States, 892 F. Supp. 2d 149, 154 (D.D.C.
2012) (internal quotation and citation omitted). Neither party is deemed to “concede the factual
assertions of the opposing motion.” CEI Wash. Bureau, Inc. v. Dep’t of Justice, 469 F.3d 126,
129 (D.C. Cir. 2006) (citation omitted)). “[T]he court shall grant summary judgment only if one
of the moving parties is entitled to judgment as a matter of law upon material facts that are not
20
genuinely disputed.” GCI Health Care Centers, Inc. v. Thompson, 209 F. Supp. 2d 63, 67
(D.D.C. 2002). A genuine issue exists only where “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248.
III. ANALYSIS
The Hospitals cite “five flaws” in the Threshold Regulations described above for
FYs 2008 through 2011. Hosp. Mot. at 27. First, the Hospitals accuse CMS of employing
merely a “token CCR adjustment factor,” a miniscule amount compared to the true decline in
CCRs nationally. Id. Second, the Hospitals find it anomalous that CMS’s positive, substantial
inflation factors resulted in decreased Fixed Loss Thresholds. Third, the Hospitals impugn
CMS’s modeling of historical outlier payments, which were “represented as having been made in
prior FYs.” Id. Fourth, the Hospitals say it is “[c]ontrary to its established past practices” for
CMS to have ignored prior years’ underpayments. Id. And fifth, the Hospitals say that CMS
violated its own regulations and guidance when it failed to consider reconciliation when setting
the Fixed Loss Threshold and failed to respond to comments urging the same. With the
exception of the second argument, which is not advanced against the FY 2010 Threshold
Regulation, all five arguments apply to all four years at issue. The Court will therefore address
them categorically instead of taking each year in turn.
The Hospitals also argue that the Payment Regulations, amended in 2003, are
invalid both because they were promulgated in violation of the APA’s procedural requirements
(under 5 U.S.C. § 553) and because, as applied, they are arbitrary, capricious or otherwise not in
accordance with law (under 5 U.S.C. § 706).
21
A. Applicable Case Law
1. District Hospital Partners, L.P. v. Burwell (Dist. Hosp. Partners II)
This Court does not paint on a blank canvas. In District Hospital Partners, L.P. v.
Burwell, the D.C. Circuit recently rejected several challenges to rulemakings concerning Fixed
Loss Thresholds. 786 F.3d 46 (D.C. Cir. 2015) (Dist. Hosp. Partners II). In that case, 186
hospitals challenged the Fixed Loss Thresholds for FYs 2004, 2005, and 2006. Id. at 48.
The Circuit rejected the broad proposition “that the Secretary was obligated to use
the best available data in formulating the outlier thresholds,” id. at 56, because the court could
find no statute, regulation, or precedent to support it. See generally id. at 56-57; but see id. at 56
(“To be clear, agencies do not have free rein to use inaccurate data.”) (emphasis in original); id.
at 57 (“These requirements underscore that an agency cannot ignore new and better data.”)
(emphasis in original). The Circuit reviewed the data used and explanations given in each
rulemaking because “[w]hether an agency has arbitrarily used deficient data depends on the
specific facts of a particular case.” Id.
For each year—2004, 2005, and 2006—plaintiffs in Dist. Hosp. Partners argued
that CMS had “acted arbitrarily and capriciously by setting the outlier thresholds too high.” Id.
The Circuit reviewed each year individually because of the varying considerations addressed in
each rulemaking. The challenge to the FY 2004 rulemaking focused on CMS’s failure to
exclude data from the 123 turbocharging hospitals that were identified in the NPRM. Id. at 58.
The Dist. Hosp. Partners plaintiffs focused their argument on the variations between a draft rule,
which was never published for notice and comment, and the final rule. In the draft rule, CMS
had excluded data from the turbochargers, but in the final rule the data was included. The
plaintiffs argued that CMS was arbitrary and capricious because it did not explain the differences
22
between the internal draft and final rule. Id. The Circuit determined that federal courts are
empowered to review final action of an agency; since the FY 2004 draft was never part of the
final rule, it was not reviewable. “[T]he published regulations did not ‘repeal or modify’
anything because the draft ‘never became a binding rule requiring repeal or modification.’” Id.
at 58 (quoting Kennecott Utah Copper Corp. v. DOI, 88 F.3d 1191, 1208 (D.C. Cir. 1996)). The
Circuit found that CMS was not required to address an internal draft, as part of notice and
comment, because it was not part of formulating the proposed new rule. Id.
Although the Circuit found CMS was not arbitrary or capricious by failing to
comment on the FY 2004 draft rule, it found the 2004 rulemaking otherwise deficient because
CMS had failed to address all of the 123 turbocharging hospitals and had only accounted for 50
turbocharging hospitals. Id. at 58-59. The Circuit found this omission to be significant because
accounting for only 50 turbocharging hospitals decreased the FY 2004 outlier threshold
significantly, which presumably meant that factoring in all 123 hospitals would have further
decreased the threshold and resulted in more outlier payments to the plaintiffs. Id. at 59. Thus,
the Circuit held that CMS failed to “examine the relevant data and articulate a satisfactory
explanation for its action,” because the inconsistency between the 123 turbochargers identified in
the NPRM and 50 turbochargers identified in the outlier threshold rulemaking “went unresolved
in the 2004 rulemaking.” Id. The Circuit remanded to the Secretary to “explain why [it]
corrected for only 50 turbo-charging hospitals in the 2004 rulemaking rather than for the 123 [it]
had identified in the NPRM.” Id. at 60.
The Circuit rejected plaintiffs’ arguments that the Secretary also acted arbitrarily
and capriciously in the 2005 and 2006 rulemakings by “setting the outlier thresholds too high”
due to the effect of the turbo-charging hospitals. Id. at 57. The Circuit found that, in the FY
23
2005 and 2006 rulemakings, CMS used a new methodology for calculating the charge inflation
factor, which obviated the need to factor in any turbocharging hospitals, and avoided the issues
present in the 2004 rulemaking. Id. at 61. The Circuit held that CMS adequately explained its
new methodology and “used the most recent data that accounted for the outlier correction rule’s
effects.” Id. at 62.
2. District Hospital Partners, L.P. v. Sebelius
District Hospital Partners II was a partial appeal from the district court’s decision
in District Hospital Partners, L.P. v. Sebelius, 973 F. Supp. 2d 1 (D.D.C. 2014) (Dist. Hosp.
Partners I). The remaining holdings of the district court are instructive to the current case. The
Court considered a challenge to CMS’s cost-to-charge ratio in 3 ways: (1) its failure to account
for a continued trend of declining cost-to-charge ratios; (2) its removal of the “floor” with its
default to statewide average cost-to-charge ratios; and (3) its failure to account for the effects of
reconciliation on an individual hospital’s Fixed Loss Threshold. The district court found that
CMS had not been arbitrary or capricious by relying on actual historical data and not projecting
continuing declines in cost-to-charge ratios. Id. at 15-16.
The district court also found that CMS had adequately considered the effect of
terminating its practice of defaulting to statewide averages when a hospital’s cost-to-charge ratio
was lower than a predetermined threshold. Id. at 16. Plaintiffs argued that CMS “never
addressed . . . how [it] accounted for the change in policy regarding default to statewide
averages.” Id. The Court found, however, that despite CMS’s lack of a direct response, the
rulemaking “clearly accounted for the change in policy” and the Court would not substitute its
judgment for CMS’s decision “not to undertak[e] the task of modeling the undoubtedly complex
and attenuated effects of the [change in] policy on hospital behavior.” Id. at 16-17.
24
Finally, Plaintiffs argued that CMS “acted arbitrarily and capriciously by not
accounting for the effect of reconciliation on the fixed loss threshold calculation.” Id. at 17.
The Court again considered CMS’s findings and explanations and found that CMS did not ignore
the issue. CMS “explained that it was impossible to predict the full effects of reconciliation” and
attempted to project reconciled cost-to-charge ratios for those hospitals CMS anticipated would
face reconciliation. Id. at 17-18. In light of the new nature of the reconciliation procedure, the
Court found CMS’s action “reasonable and adequately responsive to plaintiffs’ [] concerns.” Id.
at 18.
3. Banner Health v. Burwell
In addition to the two District Hospital Partners cases, Banner Health v. Burwell,
126 F. Supp. 3d 28 (D.D.C. 2015) is relevant to this case. In Banner Health, 29 organizations
that owned or operated hospitals challenged the Fixed Loss Thresholds in FYs 1997 through
2007 and challenged the outlier payment regulations of 1988, 1994, and 2004. The Court
summarizes only the potentially relevant holdings.
First, Banner Health found it was reasonable for CMS to “adjust[ ] charges to cost
to determine whether those cost-adjusted charges were above the applicable [fixed loss]
threshold, and then ma[ke] a payment based on the amount by which the cost-adjusted charges
exceeded that threshold.” Id. at 75. Banner Health also found CMS did not violate the APA by
“failing to conduct reconciliation or to account for reconciliation in setting the fixed loss
thresholds for FY 2004 through FY 2007,” because “nowhere does the statute require the agency
to undertake reconciliation.” Id. at 78-79. The challenged regulations also did not require
reconciliation, but instead indicated that some payments could be “subject to adjustment.” Id. at
79. “Because reconciliation became simply an option rather than a requirement, it would be
25
irrational to conclude that the statute actually required the agency to account for reconciliation
explicitly in calculating the fixed loss threshold.” Id.
CMS’s outlier payment determinations were found to be reasonable in that CMS
“use[d] the actual cost-to-charge ratios in order to set the FY 2004 through FY 2006 fixed loss
threshold, rather than adjusting those ratios to account for possible continued declines” in the
cost-to-charge ratios. Id. The statute only required CMS to set the threshold as “tested against
historical data,” not considering current trends. Id.
The Banner Health plaintiffs had lodged separate challenges to the Fixed Loss
Threshold rulemakings in FYs 1998 through 2003 and FYs 2004 through 2007. For the earlier
years, they argued that CMS acted arbitrarily and capriciously by not reacting to its own
continued failure to meet the targeted amount of outlier payments. The district court concluded
that “[j]ust because the agency was aware that actual outlier payments exceeded the predicted
levels for these years [ ] does not mean that it was arbitrary or capricious to continue
implementing this model.” Id. at 90 (internal citation omitted).
Additionally, for FYs 2001 through 2003, the Banner Health plaintiffs challenged
what they called “fudge factors” used to set the Fixed Loss Threshold. The district court rejected
the argument, finding that the challenged factors were uncertain inflation factors used to project
outlier charges. “The agency explained why it used this factor, and it need not explain in any
further detail exactly how its analysis of the underlying data generated the [ ] figure.” Id. at 91
(citing Tex. Mun. Power v. EPA, 89 F.3d 858, 869-70 (D.C. Cir. 1996) (“[T]he failure of an
agency to identify every detail of a process before it is used does not automatically require
judicial interference in matters that must be thought to lie within the agency’s expertise.”)). The
district court also found that it was not arbitrary and capricious for CMS to move from a cost
26
inflation to a charge inflation methodology when setting the Fixed Loss Threshold. 13 Id. at 93.
Although CMS switched to the cost inflation methodology in 1994 and then back to the charge
inflation method in 2003, the district court determined that “the agency [had] adequately
explained its decision in both circumstances” so that it was not arbitrary and capricious. Id.
Finally, the Banner Health plaintiffs argued that the FYs 2005-2007 14 Fixed Loss
Threshold rulemakings were arbitrary and capricious because: (1) “the agency failed to adjust
the cost-to-charge ratios to account for continuing declines” and (2) “the agency failed to account
for reconciliation.” Id. at 96-97. The district court found that those plaintiffs impermissibly
relied on the Draft to challenge the cost-to-charge ratios; it ultimately held that CMS’s decision
to use historical data and not projection adjustments to calculate the cost-to-charge ratios was
reasonable. Id. at 98. The district court rejected the arguments concerning reconciliation
because CMS had adequately explained its reasons. Id. at 101.
13
The difference between the two methodologies was explained as follows:
Under the charge inflation methodology, which the agency
introduced for FY 2003, the agency calculated a measure of past
charge inflation based on historical data and used this measure to
inflate past charges in order to generate a dataset of projected
charges for the fiscal year in question; the agency then adjusted these
charges to projected future costs using cost-to-charge ratios. By
contrast, under the cost inflation methodology, which was used for
FY 1994 through FY 2002, the agency adjusted past charges by cost-
to-charge ratios to estimate past costs, and then used a cost inflation
factor derived from historical data to inflate the estimated costs and
generate projected future costs.
Banner Health, 126 F. Supp. 3d at 92.
14
Consistent with the Circuit’s holding in District Hospital Partners, the Banner Health court
remanded the 2004 rulemaking to CMS for more explanation regarding the effect of
turbocharging, but rejected each of the plaintiffs’ other arguments. 126 F. Supp. 3d at 98.
27
B. This Case: Challenges to the FY 2008 through 2011 Fixed Loss Threshold
Rulemakings
The Plaintiff Hospitals here cite “five flaws” in the FY 2008 through 2011
threshold regulations described above. Hosp. Mot. at 27. The Court will address them
categorically instead of taking each year in turn.
Before addressing the specific “flaws” raised, the Court considers the
jurisdictional argument advanced by CMS. CMS argues that some of Plaintiffs’ claims should
be dismissed for lack of subject matter jurisdiction because the issues were not approved by the
PRRB for judicial review and were not initially made during the relevant comment period. The
Court finds it has subject matter jurisdiction over all of the claims presented. The question
presented by Plaintiffs for judicial review was very broad:
Whether the specific regulations governing Outlier Case Payments
as set forth in the two regulatory sources—the Outlier Payment
Regulations and the fixed loss threshold (“FLT”) Regulations
(collectively, the “Medicare Outlier Regulations”)—as promulgated
by the Secretary of Health and Human Services (“HHS” or the
“Secretary”) and the Centers for Medicare and Medicaid Services
(“CMS”), and in effect for the appealed years are contrary to the
Outlier Statute and/or are otherwise substantively or procedurally
invalid?
PRRB R 87 (Case No. 13-0593GC). The PRRB certified this entire question.
In addition, Plaintiffs bring an as-applied challenge to the Medicare regulations,
questioning their validity. CMS argues Plaintiffs have waived their right to challenge the
consistency between inflation and the Fixed Loss Thresholds because they did not submit
relevant comments to each FYs rulemaking. CMS describes Plaintiffs’ challenges to the validity
of its rulemakings as “facial,” requiring explicit exhaustion during the administrative proceeding.
However, the Court finds that Plaintiffs properly challenged each rulemaking through challenges
to the application of the earlier rules. See Banner Health, 126 F. Supp. 3d at 68 (“The Secretary
28
has not pointed to any authority suggesting that, just because a plaintiff argues that a regulation
is invalid, such plaintiff has waived any arguments not raised in prior rulemaking proceeding.
To the contrary, a series of cases from the D.C. Circuit Court of Appeals indicate that a party
may challenge the very validity of a regulation when that regulation is applied without waiving
arguments that were not raised before the agency in the underlying rulemaking proceedings.”);
see also Weaver v. Fed. Motor Carrier Safety Admin., 744 F.3d 142, 145 (D.C. Cir. 2014);
National Res. Def. Council. v. EPA, 513 F.3d 257, 260 (D.C. Cir. 2008). Therefore, Plaintiffs’
claims are properly before this Court.
1. CCR adjustment factor
Plaintiffs argue CMS’s use of a “token” CCR adjustment factor was arbitrary and
capricious because CMS: (1) failed to use the best available data to calculate the adjustment
factor, that is, the historic rate of change of CCR; (2) elected to use a complex proxy to calculate
the year-over-year change in CCR, which was contrary to CMS’s earlier preference for using
historical data; and (3) failed to respond to comments regarding its method for calculating the
adjustment factor.
Plaintiffs argue CMS failed to use the best available data to calculate the yearly
CCR adjustment factor because it relied on a projection, rather than historical data. Defendant
responds that CMS “reasonably exercised [its] discretion in deciding on the data to use” and
agencies “have no generic obligation to use the best available data.” Gov’t Opp’n at 18-19.
Dist. Hosp. Partners II rejected the theory “that the Secretary was obligated to use the best
available data.” 786 F.3d at 56. Instead, the D.C. Circuit reviewed the data that was actually
used and CMS’s explanation to determine whether the agency “arbitrarily used deficient data.”
Id. at 57. This Court, therefore, rejects Plaintiffs’ argument that the regulation was arbitrary and
29
capricious for failing to use the best available data and will review the reasonableness of the data
used in this particular instance.
Plaintiffs also argue that the “token” adjustment factor was arbitrary and
capricious because CMS “concocted [it] from projected cost inflation.” Hosp. Mot. at 33.
Plaintiffs criticize the use of a projected factor in lieu of historical trends in CCRs.
CMS established its methodology to calculate the CCR adjustment factor during
the FY 2007 rulemaking, working with the Office of the Actuary. 72 Fed. Reg. at 47,417 (FY
2008 FLT Reg.). The method used in FYs 2008 through 2011 is the same as that established FY
2007. CMS calculated the CCR using estimated cost and charge inflation for the upcoming year.
Id. Potential cost inflation was measured using two sets of data: (1) the market basket rate-of-
increase and (2) the increase in the average cost per discharge from hospital cost reports. Id.
The charge inflation factor is simply the average change in charges. Id. In response to
comments urging CMS “to adopt a methodology that uses recent historical industry wide average
rate of change,” CMS explained the decision to use two alternative data sets to project cost
inflation:
[W]e believe this calculation of an adjustment to the CCRs is more
accurate and stable than the commenter’s methodology because it
takes into account the costs per discharge and the market basket
percentage increase when determining a cost adjustment factor.
There are times where the market basket and the cost per discharge
will be constant, while other times these values will differ from each
other, depending on the fiscal year. Therefore . . . , using the market
basket in conjunction with the cost per discharge uses two sources
that measure potential cost inflation and ensures a more accurate and
stable cost adjustment factor.
Id. at 47,418. CMS considered the option of using the historical average rate of change, but
determined that the projected calculation using the market basket and cost per discharge method
was superior. CMS is not required to use the best data, but “cannot ignore new or better data.”
30
Dist. Hosp. Partners, 786 F.3d at 57 (emphasis omitted). Here, CMS considered all available
data and explained its reasons for not using the historical average rate of change data. 15 CMS
“articulate[d] a satisfactory explanation for its action including ‘a rational connection between
the facts and the choice made.’” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43 (quoting Burlington
Truck Lines v. United States, 371 U.S. 156, 168 (1962)).
Finally, Plaintiffs argue CMS failed to respond adequately to comments regarding
the CCR adjustment factor. As CMS notes, an “agency’s response to public comments need
only ‘enable [the court] to see what major issues of policy were ventilated . . . and why the
agency reacted to them as it did.” Public Citizen, Inc. v. FAA, 988 F.2d 186, 197 (D.C. Cir.
1993) (quoting Auto. Parts & Accessories Ass’n v. Boyd, 407 F.2d 330, 335 (D.C. Cir. 1968)).
“The agency need only state the main reasons for its decision and indicate that it has considered
the most important objections.” Simpson v. Young, 854 F.2d 1429, 1435 (D.C. Cir. 1988).
Each year CMS received comments regarding the CCR adjustment factor and
each year CMS responded by indicating its reasons for not altering the adjustment factor
methodology. See 72 Fed. Reg. at 47, 418 (FY 2008 FLT Reg.); 73 Fed. Reg. at 48,764 (FY
2009 FLT Reg.); 74 Fed. Reg. at 44,010 (FY 2010 FLT Reg.); 75 Fed. Reg. at 50,429 (FY 2011
FLT Reg.). This Court finds CMS’s acknowledgement and consideration of the comments
reasonable. CMS’s responses identified the major issues raised by the commenters and stated
the main reasons for its decisions. Consequently, use of the CCR adjustment factor was not
arbitrary and capricious.
15
CMS also acted reasonably in continuing to use the 2007 methodology until multiple years of
data were available to assess its value. See Gov’t Opp’n at 17.
31
2. Inconsistent relationship between rising inflation factor and deflated
Fixed Loss Threshold
Plaintiffs argue the FY 2008, 2009, and 2011 Fixed Loss Threshold rulemakings
are arbitrary and capricious because of the inconsistencies between the CMS deflation of the
Fixed Loss Threshold and the increased inflation factor. Specifically, they argue that if CMS
were assuming a positive (upward) trend in hospital costs, it was inconsistent for the Fixed Loss
Threshold to be experiencing consistent deflation. Id. at 45. As discussed above, the Court finds
Plaintiffs’ argument is properly presented without comment during the rulemaking process.
Although Plaintiffs’ argument is proper, CMS adequately explained its calculation
of the Fixed Loss Threshold and the factors that it considers when setting the Threshold.
Admittedly, CMS failed to address specifically the inconsistency between the positive inflation
in hospital charges and costs and the deflation in Fixed Loss Threshold. However, CMS met its
burden of “examin[ing] the relevant data and articulat[ing] a satisfactory explanation for its
action including a rational connection between the facts found and the choices made.” Motor
Vehicle Mfrs. Ass’n, 463 U.S. at 43. Despite Plaintiffs’ arguments, there are no unexplained
inconsistencies in the Fixed Loss Threshold rulemakings. See also Dist. Hosp. Partners, 786
F.3d at 59 (“We have often declined to affirm an agency decision if there are unexplained
inconsistencies in the final rule.”).
CMS sets the Fixed Loss Threshold “in advance of each fiscal year” by projecting
what “aggregate outlier payments [will] total[] 5.1% of projected total DRG payments” and
setting the Fixed Loss Threshold at the level required to achieve those projected outlier
payments. Gov’t Opp’n at 6-7. The Fixed Loss Threshold is based on a projection of future
payments, not a previous year’s outlier payments. Plaintiffs argue that CMS fails to consider the
year-to-year inflation of hospital charges and costs. However, the inflation factor is simply one
32
of many factors evaluated and incorporated into simulations used to determine the aggregate
outlier payments that will total 5.1% of aggregate DRG payments in the forthcoming fiscal year.
Id. at 31. The simulated outlier payment calculations used to project the Fixed Loss Threshold
also incorporate additional inputs, including:
cost-to-charge ratios, an adjustment factor to project changes in
cost-to-charge ratios, the mix of DRGs and national standardized
amounts of labor and nonlabor set forth in tables published in the
Federal Register notices, and other hospital-specific information for
the upcoming fiscal year that is set forth in the annual impact file,
e.g., wage index, medical education, disproportionate share hospital
status.
Gov’t Opp’n at 31 (citing 68 Fed. Reg. at 34,495). Contrary to Plaintiffs’ arguments, CMS did
explain the inconsistency between the decreasing Fixed Loss Threshold and increasing inflation
rate: the Fixed Loss Threshold is a product of more than just the inflation of hospital costs and
charges.
Plaintiffs also critique the failure of CMS to provide the formulas it used to
calculate the Fixed Loss Threshold after this Court granted their motion to compel and
supplement the administrative record. Plaintiffs mischaracterize this Court’s holding, which
only required CMS to produce formulas “if such formulas exist.” Lee Mem’l Hosp., 109 F.
Supp. 3d at 51. CMS responded that no additional formulas existed, but that the process for
determining the Fixed Loss Threshold was incorporated in the original administrative record, see
Gov’t Opp’n at 32, and each year commenters were able to use that explanation to confirm the
accuracy of CMS’s calculations. See, e.g., 72 Fed. Reg. at 47,417-18 (FY 2008 FLT Reg.); 73
Fed. Reg. at 48,766 (FY 2009 FLT Reg.); 75 Fed. Reg. at 50,431 (FY 2011 FLT Reg.).
This Court finds that CMS has provided a “satisfactory explanation” of its process
and the factors considered when it projected the aggregate outlier payments and set the Fixed
Loss Threshold in each year.
33
3. Failure to consider past outlier payments
Plaintiffs also argue CMS acted arbitrarily and capriciously by not considering
past outlier payments, which “demonstrated the historical failure of [the CMS] model,” when
calculating the Fixed Loss Threshold for each year. Hosp. Mot. at 48. Specifically, because the
CMS estimate of outlier payments was consistently higher than the actual amount in these years,
CMS continually missed the statutory 5.1% target of outlier payments. Nevertheless, it
continued to employ the same methodology to set the Fixed Loss Threshold. Id. at 49.
Plaintiffs inaccurately interpret the CMS response to their motion to compel,
claiming that CMS, through a declarant, admits that it failed to consider past outlier payments
during the rulemaking for each following year. Actually, the Acting Director of CMS, Donald
Thompson, explained that in each FY’s rulemaking CMS included “an estimate of total outlier
payments as a percentage of total IPPS (or diagnosis related group (“DRG”)) payments made
during each of the prior two years.” Declaration of Donald Thompson [Dkt. 68-1] ¶ 13. The
declaration (and the rulemakings themselves) indicate that CMS reviewed estimates of the past
two years’ outlier payments during each year’s rulemaking process. See 72 Fed. Reg. at 47,420
(FY 2008 FLT Reg.) (“Our current estimate, using available FY 2006 bills, is that actual outlier
payments for FY 2006 were approximately 4.65 percent of actual total DRG payments. Thus,
the data indicate that, for FY 2006, the percentage of actual outlier payments relative to actual
total payments is lower than we projected before FY 2006.”); 73 Fed. Reg. at 48,766 (FY 2009
FLT Reg.) (“Our current estimate [ ] is that actual outlier payments for FY 2007 were
approximately 4.64 percent of actual total DRG payments.”); 74 Fed. Reg. at 44,012 (FY 2010
FLT Reg.) (“Our current estimate [ ] is that actual outlier payments for FY 2008 were
approximately 4.8 percent of actual total DRG payments.”); 75 Fed. Reg. at 50,431 (FY 2011
34
FLT Reg.) (“Our current estimate [ ] is that actual outlier payments for FY 2009 were
approximately 5.3 percent of actual total DRG payments.”). Plaintiffs are, therefore, incorrect
that CMS did not identify past outlier payments.
Plaintiffs’ argument that it is arbitrary and capricious for CMS to fail to adjust the
Fixed Loss Threshold based on the multi-year trend of it falling below the 5.1% mandated by
statute is also without merit. As CMS explains, it considers past outlier payments during each
year’s rulemaking, responds to comments regarding past payments, and, as it thinks appropriate,
adjusts the model to set the next Fixed Loss Threshold. See 71 Fed. Reg. at 48,150. During the
FY 2007 rulemaking, CMS proposed a change to the Fixed Loss Threshold model to account for
the trend in “payments below the 5.1 percent target.” Id. CMS stated:
As the commenters noted, the outlier thresholds we have projected
in the last several years have resulted in payments below the 5.1
percent target. However, we have been hesitant to change our model
because, in the early years of this decade, outlier payments were
significantly higher than the 5.1 percent target we projected because
the charging practices of some hospitals resulted in overestimation
of hospitals’ cost-per-case. However, now that data for later years
in which charging practices were stabilized are available, after
careful consideration, we agree that a refinement to the proposed
methodology to account for the rate of change in the relationship
between costs and charges would likely increase the precision of our
model and we believe this would be an appropriate refinement to
adopt in determining the FY 2007 outlier threshold.
Id. Based on CMS’s decision to adjust the model in the FY 2007 rulemaking and inclusion of
the estimates of prior payments in each year’s rulemaking, it is evident CMS has not disregarded
accurate and reliable information or adopted an estimate it knew at the time to be inaccurate. See
Guindon v. Pritzker, 31 F. Supp. 3d 169, 195-96 (D.D.C. 2014). CMS “was not required to
‘meet’ those targets.” Banner Health, 126 F. Supp. 3d at 90 (citing Cnty. of L.A., 192 F.3d at
1013). “Just because the agency was aware that actual outlier payments [did not meet] the
35
predicted levels for these years . . . does not mean that it was arbitrary or capricious to continue
implementing this model.” Id.
CMS has not, as Plaintiffs claim, turned a blind eye to a system that does not
work. Hosp. Mot. at 52-53. Instead, it adjusted the model in the FY 2007 rulemaking and has
since been monitoring the payouts and “consider[ing] and evaluat[ing] commenters comments on
modifying the outlier threshold methodology.” 73 Fed. Reg. at 48,766. It is not arbitrary and
capricious to continue with the newly revised model for FYs 2008 through 2011 to determine its
efficacy. Due to the complexity of the Medicare payment system and the data collection at issue,
it is not unreasonable for CMS to continue to use the model revised in 2007 during FYs 2008
through 2011, especially considering CMS reported that outlier payments in FY 2009 fell within
the 5-6% threshold. See 75 Fed. Reg. at 50,431 (FY 2009 outlier threshold calculated as 5.3%).
CMS’s continued identification of the outlier payments and consideration of possible revisions
and suggestions raised by commenters is reasonable.
For the foregoing reasons, the Court finds CMS acted reasonably and complied
with the requirements of the APA in considering past outlier payments.
4. Past outlier payment estimates
Plaintiffs also lodge three challenges to CMS’s estimate of total outlier payments
in each year: CMS (1) failed to provide sufficient notice about how prior outlier payments were
determined; (2) failed to respond adequately to comments in FYs 2008 through 2011 regarding
the estimated past outlier payments; and (3) failed to respond to a commenter’s recommendation
for an estimated adjustment factor in FY 2011.
Plaintiffs compare this case to Shands Jacksonville Med. Ctr. v. Burwell, 139 F.
Supp. 3d 240 (D.D.C. 2015), in which this Court found that CMS had failed to provide sufficient
36
notice of “actuarial assumptions and methodology,” due to CMS’s failure to provide its methods
for estimating total outlier payments made in prior years in violation of the APA. Id. at 261.
CMS argues that its rulemakings adequately described its methodology, announcing each year
that CMS used the same methodology to simulate outlier payments for upcoming fiscal years as
it used to estimate past outlier payments. The difference is in the data used. When determining
the upcoming Fixed Loss Threshold, CMS used projected payments, while it used the latest
available claims information, or bills, to estimate past payments. See, e.g., 72 Fed. Reg. at
47,420 (FY 2008 FLT Reg.) (indicating CMS used “the FY 2005 MedPAR file” to estimate the
2006 past outlier payments during the FY 2007 rulemaking and used the 2006 file to estimate the
same 2006 past outlier payments during the FY 2008 rulemaking).
In Shands, the Court considered CMS’s creation of an “across-the-board
reduction in payments to hospitals for inpatient services.” 139 F. Supp. 3d at 247. Shands found
that CMS “did not provide sufficient notice of the actuarial assumptions and methodology [it]
employed and that disclosure of this information was essential to communicate the basis for the
proposed adjustments and to permit meaningful public comment.” Id. at 261. “[A]n agency
cannot rest a rule on data that, [in] critical degree, is known only to the agency.” Time Warner
Entm’t Co., L.P. v. FCC, 240 F.3d 1126, 1140 (D.C. Cir. 2001) (internal quotation and citation
omitted). CMS only disclosed some of the necessary information in the final rule at issue in
Shands. See 139 F. Supp. 3d at 262. Disclosing the data sets used alone was insufficient; CMS
needed to “disclose what the actuaries did with that data.” Id. at 263.
Hospital Plaintiffs in this case similarly argue that CMS pointed to the data sets
used to calculate prior years’ outlier payments, but failed to identify how the estimates were
ultimately calculated. Despite Plaintiffs’ insistence, the CMS explanation of its outlier payment
37
methodology is available. Prior FY outlier payment estimates are calculated using the same
method as CMS uses to predict future payments. The only difference between past and future
estimates is the data sets used. See 68 Fed. Reg. at 34,495. Unlike Shands, CMS has provided
the data set and the formula used in each year. See id. The only information not provided was
the specific set of hospitals CMS used to do its simulations, but that alone does not render its
explanations or data inadequate. Plaintiffs had the “critical factual material” necessary to review
the agency’s method, Owner-Operator Indep. Drivers Ass’n Inc. v. Fed. Motor Carrier Safety
Admin., 494 F.3d 188, 199 (D.C. Cir. 2007), as evidenced by the ability of commenters to
replicate CMS’s calculations. See, e.g., 75 Fed. Reg. at 50,431 (FY 2011 FLT Reg.). The
rulemakings adequately explained the method used to estimate past outlier payments.
Second, Plaintiffs argue that CMS failed to respond to “relevant and significant
comments” from the Federation. Hosp. Mot. at 55. Defendant responds that CMS answered the
Federation comments with an explanation about the data used to calculate the outlier payments
and indicated that it had not used the data set recommended by the Federation. As explained
above, in each year, the estimated past outlier payments for the previous two years were included
in the rulemaking analysis. For example, in the FY 2008 rulemaking CMS included an estimate
of the 2007 outlier payments, which was calculated using FY 2006 data. 72 Fed. Reg. at 47,420.
Then in the FY 2009 rulemaking, CMS updated the estimate of 2007 payments using FY 2007
data. 73 Fed. Reg. at 48,766. Plaintiffs challenge the specific data sets used by CMS, arguing
they were not the most recent available data. But, CMS is not required to use the best available
data, see Dist. Hosp. Partners, 786 F.3d at 56, and CMS adequately explained why it chose to
use the earlier data. See 72 Fed. Reg. at 47,418.
38
CMS clearly responded to Federation comments, explaining the data sets used.
The requirement to respond to comments is “not particularly demanding.” Ass’n of Private
Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 441-42 (D.C. Cir. 2012) (internal quotation and
citation omitted). CMS’s responses to Federation comments in FYs 2008 through 2011
identified the reasons earlier data was selected, thereby demonstrating that CMS considered the
comments. Thus, the responses to the comments satisfied the APA requirements.
Third, Plaintiffs raise a second argument with respect to the 2011 Fixed Loss
Threshold regulation, asserting that CMS failed to respond to different comment from the
Federation that recommended an estimate adjustment factor to the outlier threshold. To the
contrary, CMS summarized and responded to the Federation’s comment in the 2011 Final
Rulemaking. See 75 Fed. Reg. at 50,428-29. CMS explained that it would not apply an estimate
adjustment factor—as requested by the Federation—because it believed the current model used
to predict the outlier threshold necessary to meet the target of 5.1% of DRG payments was
adequate. The Court finds that CMS adequately considered and responded to the comment, even
though it expressed no willingness to change its model.
5. Failure to account for reconciliation
Plaintiffs’ final challenge to the Fixed Loss Threshold rulemakings is that CMS
acted arbitrarily and capriciously in failing to factor the impact of reconciliation into the Fixed
Loss Threshold projections for FYs 2008-2011. Plaintiffs argue that CMS failed to conduct any
reconciliations and did not adequately respond to comments submitted during the NPRMs for the
Fiscal Years at issue. Defendant argues that CMS adequately explained its reasons for not
factoring reconciliation into the projections for each year’s Fixed Loss Threshold.
39
Banner Health found that neither consideration of reconciliation, nor accounting
for reconciliation, was required by the 2003 Payment Regulation when setting the Fixed Loss
Threshold each year. See 126 F. Supp. 3d at 78-79. This holding was not appealed. The 2003
amendments to the Payment Regulations created a system for reconciling outlier payments that
were made using a “significantly inaccurate cost-to-charge ratio.” 68 Fed. Reg. at 34,502. The
2003 Payment Regulation created the reconciliation procedure by which outlier payments are
subject to reconciliation when hospitals’ cost reports are finalized. See id. at 34,501. The
Payment Regulation stated that “if [CMS] deem[s] it necessary as a result of a hospital-specific
data variance to reconcile outlier payments of an individual hospital, such action . . . would not
affect the predictability of the entire system.” Id. at 34,502. Nothing in the 2003 rulemaking
indicated that reconciliation was required.
Banner Health also found it was not arbitrary and capricious for CMS not to
consider the effects of reconciliation on the projections of the Fixed Loss Threshold for FY 2004
through 2006. 126 F. Supp. 3d at 99, 101, 103. Just as in those years, CMS explained in the
Fixed Loss Threshold rulemakings for FYs 2008 through 2011, at issue here, why it did not
account for reconciliation. Each year CMS has explained:
As we did in establishing the [previous year’s] outlier threshold, in
our projection of [the current year’s] outlier payments, we are not
making any adjustments for the possibility that hospitals’ CCRs and
outlier payments may be reconciled upon cost report settlement. We
continue to believe that, due to the policy implemented in the outlier
final rule, CCRs will no longer fluctuate significantly and, therefore,
few hospitals will actually have these ratios reconciled upon cost
report settlement.
72 Fed. Reg. at 47,419 (FY 2008 FLT Reg.); see also 73 Fed. Reg. at 48,763 (FY 2009 FLT
Reg.); 74 Fed. Reg. at 44,007-08 (FY 2010 FLT Reg.); 75 Fed. Reg. at 50,427 (FY 2011 FLT
Reg.).
40
Plaintiffs argue that the reasons given by CMS were not its real reasons: They
posit that CMS did not account for reconciliation in the Fixed Loss Threshold projections
because CMS never conducted any reconciliations. However, this Court cannot question the
legitimacy of the reasoning provided without evidence that CMS was acting in bad faith. See In
re Subpoena Duces Tecum Served on Office of the Comptroller of the Currency, 156 F.3d 1279,
1279-80 (D.C. Cir. 1998) (“[T]he actual subjective motivation of agency decisionmakers is
immaterial as a matter of law—unless there is a showing of bad faith or improper behavior.”).
Plaintiffs have provided no evidence of bad faith or improper behavior. Therefore, this Court
finds CMS has provided adequate reasoning for its decision not to account for reconciliation
when setting the outlier threshold.
Finally, Plaintiffs argue that in 2010 and 2011 CMS failed to respond to
comments requesting it to report the amount of money recovered through reconciliation. An
agency is not required to respond to every comment, but instead must “only ‘enable [the court] to
see what major issues of policy were ventilated . . . and why the agency reacted to them as it
did.’” Public Citizen, 988 F.2d at 197 (quoting Boyd, 407 F.2d at 335). In each rulemaking
CMS considered and responded to a host of other comments related to reconciliation, which
allows the Court to view the “major issues being ventilated” and the agency’s thinking. See 72
Fed. Reg. at 47,419 (FY 2008 FLT Reg.); 73 Fed. Reg. at 48,763 (FY 2009 FLT Reg.); 74 Fed.
Reg. at 44,007-08 (FY 2010 FLT Reg.); 75 Fed. Reg. at 50,427 (FY 2011 FLT Reg.). The lack
of response to the specific comment asking how much has been collected through reconciliation
does not render the rulemaking arbitrary and capricious.
41
C. The 2003 Payment Regulations
Plaintiffs also argue that the Payment Regulations, as amended in 2003, are
invalid because they were promulgated in violation of the APA’s procedural requirements (under
5 U.S.C. § 553) and because, as applied, they are arbitrary, capricious or otherwise not in
accordance with law (under 5 U.S.C. § 706).
1. APA procedural requirements
Plaintiffs argue that CMS failed to comply with the disclosure requirements of the
APA by failing to include the 2003 draft Interim Final Rule (Draft) in the NPRM and notice of
final amendments to the 2003 Payment Regulations. Plaintiffs rely on this Court’s holding
requiring the Draft to be included as part of the administrative record here, arguing that because
the Draft was missing from this record, it was also missing from the notice and comment
process. Id. at 67-68. Despite this Court’s inclusion of the Draft in the administrative record for
this proceeding, an agency is only required to identify in a NPRM the studies and other materials
on which the agency “actually relies.” 5 U.S.C. § 553. While it is “especially important for the
agency to identify and make available technical studies and data that it has employed,” see
Connecticut Light & Power Co. v. Nuclear Regulatory Comm’n, 673 F.2d 525, 530 (D.C. Cir.
1982), an agency is not required to disclose materials or drafts upon which it did not rely. See
Banner Health v. Burwell, 55 F. Supp. 3d 1, 9 (D.D.C. 2014).
This Court’s order to include the Draft in the administrative record followed prior
cases in this District regarding the same Draft. As in Banner Health, Plaintiffs met their burden
of showing the agency considered the Draft and that CMS had no legitimate deliberative process
argument for shielding the Draft from inclusion. Lee Mem’l Hosp., 109 F. Supp. 3d at 47-49; see
Banner Health v. Burwell, 945 F. Supp. 2d 1, 24-27 (D.D.C. 2013).
42
However, the Court in Banner Health later denied a motion to amend the
complaint because the claims, identical to the claim here, were against Circuit precedent. See id.
at 12. This Court agrees.
While the D.C. Circuit has repeatedly found agency NPRM’s lacking for failure
to disclose “critical material, on which [the agency] relies,” or redacting studies relied upon by
an agency, the Circuit’s rule is centered upon the principle that only those studies and materials
relied upon must be disclosed. See id. at 9 (emphasis in original) (citing Allina Health Servs. v.
Sebelius, 746 F.3d 1102, 1110 (D.C. Cir. 2014)). Plaintiffs’ attempt to equate this case to
Shands and American Radio Relay League, Inc. v. FCC, 524 F.3d 227 (D.C. Cir. 2008), is
unpersuasive. In both Shands and American Radio, it was apparent that the agency had relied on
the reports and data that were either not included or redacted. See Shands, 139 F. Supp. 3d at
263 (finding that “the Secretary’s failure to disclose the critical assumptions relied upon by the
HHS actuaries deprived Plaintiffs and other members of the public of a meaningful opportunity
to comment”) (emphasis added); American Radio, 524 F.3d at 239 (“[T]he Commission can
point to no authority allowing it to rely on the studies in a rulemaking but hide from the public
parts of the studies that may contain contrary evidence, inconvenient qualifications, or relevant
explanations of the methodology employed.”). Plaintiffs’ only basis for alleging that CMS relied
on the Draft is this Court’s order to include the Draft in the administrative record. That is not
enough.
With the benefit of a full record and briefing, it is now clear that CMS did not rely
on the Draft. Although this Court found CMS initially considered the Draft as an alternative to
the later Payment Regulations at issue here, that holding does not require a finding that CMS
relied on the Draft in these rulemakings. It is noteworthy that, Plaintiffs’ Fourth Amended
43
Complaint agrees. It makes no allegation that CMS relied on the Draft in the 2003 rulemaking,
but instead faults CMS for not disclosing the “alternatives” it “considered but rejected.” Fourth
Am. Compl. [Dkt. 65] at 27.
For the reasons stated above, the Court concludes that the 2003 Payment
Regulations were promulgated in a manner that was consistent with the procedural requirements
under 5 U.S.C. § 553.
2. APA substantive requirements
In addition to its procedural claims, Plaintiffs argue the 2003 rulemaking was
arbitrary and capricious because CMS failed to address the known data indicating 123 hospitals
were turbocharging. Plaintiffs’ argument relies on the Circuit’s finding in Dist. Hosp. Partners
that CMS’s FY 2004 Threshold Rulemaking was arbitrary and capricious for failure to account
for the 123 turbochargers.
Plaintiffs failed to adequately raise their substantive APA claims concerning the
2003 Outlier Payment Regulation in the Fourth Amended Complaint. Plaintiffs claim that a
single allegation stating “[w]hile . . . amending the Outlier Payment Regulations . . . the
Secretary had both the obligation and the opportunity to reset her [Fixed Loss Threshold], which
she had improperly inflated by more than 246%, but she did not” and the broad statement in the
request for relief that the Court find “the Outlier Statute and [CMS’s] application of same were,
for the FYs here at issue, . . . (B) arbitrary, capricious, and abuse of discretion, or otherwise not
in accordance with law” were sufficient to plead a substantive APA claim. Fourth Am. Compl.
¶ 50, Request for Relief ¶ 1. Neither statement sufficiently articulates a substantive APA claim.
Plaintiffs cannot rely on a conclusory and ambiguous allegation that CMS was supposed to act in
44
a certain manner “but [ ] did not” alert Defendant that a substantive APA claim was raised. 16 Id.
at ¶ 50. Plaintiffs’ argument that CMS gave express or implied consent by arguing against these
claims in its opposition is unpersuasive. Tellingly, CMS’s own motion to dismiss or for
summary judgment omits any discussion of a substantive APA claim regarding the 2003
Payment Regulations, indicating it was unaware of the claim.
Even if this Court found Plaintiffs had adequately raised a substantive APA claim
regarding the 2003 Payment Regulations, summary judgment would be entered for CMS. First,
Plaintiffs cannot rely on the Draft, which was never finalized or relied upon by CMS to impugn
subsequent rulemakings. See Dist. Hosp. Partners, 786 F.3d at 58; Banner Health, 126 F. Supp.
3d at 69, 94. Second, CMS clearly considered all 123 turbo-charging hospitals in the 2003
amendments to the Payment Regulations. See 68 Fed. Reg. at 34,496 (“We proposed these
changes in the payment methodology . . . in order to correct situations in which rapid increases in
charges by certain hospitals have resulted in their cost-to-charge ratios being set too high.”).
CMS not only considered all the turbochargers, but they were the basis for altering the Payment
Regulations in the first place. To the extent that Plaintiffs are also challenging the decision not
to make a mid-year adjustment to the Fixed Loss Threshold in 2003, this Court finds that CMS
was not required to make a mid-year adjustment and its explanation for “why it concluded that a
mid-year adjustment was not warranted” was adequate. 17 Banner Health, 126 F. Supp. 3d at 96.
16
“Judges are not expected to be mindreaders. Consequently, a litigant has an obligation to spell
out its arguments squarely and distinctly, or else forever hold its peace.” United States v.
Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (quoting Rivera-Gomez v. de Castro, 843 F.2d 631, 635
(1st Cir. 1988) (internal quotations omitted).
17
CMS explained:
We believe it is appropriate not to change the FY 2003 outlier
threshold at this time. Although our current empirical estimate of
the threshold indicates it could be slightly higher, there are other
45
IV. CONCLUSION
For the foregoing reasons, the Court will grant Defendant’s motion for summary
judgment and deny Plaintiffs’ motion for summary judgment. The Court will also enter
judgment in favor of the Secretary and the consolidated cases, Abbott Northwestern Hospital, et
al. v. Sebelius, Case No. 13-cv-775; Buffalo Hospital, et al. v. Sebelius, Case No. 13-cv-776; and
Denver Health Medical Center, et al. v. Sebelius, Case No. 14-cv-553, will be closed.
A memorializing Order accompanies this Opinion.
Date: September 7, 2016 /s/
ROSEMARY M. COLLYER
United States District Judge
considerations that lead us to conclude the threshold should remain
at $33,560. Increasing the threshold would result in lower outlier
payments for all hospitals, not just those that have been aggressively
maximizing their outlier payments. Changing the threshold for the
remaining few months of the fiscal year could disrupt hospitals’
budgeting plans and would be contrary to the overall prospectivity
of the [Prospective Payment System]. We do believe that we have
the authority to revise the threshold, given the extraordinary
circumstances that have occurred (in particular, the manipulation of
the policy by some hospitals). However, in light of the relatively
small difference between the current threshold and our revised
estimate, and the limited amount of time remaining in the fiscal year,
we have concluded it is more appropriate to maintain the threshold
at $33,560.
68 Fed. Reg. at 34,506.
46
|
933 F.2d 1011
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Kenneth W. WILLIAMSON, Plaintiff-Appellant,v.ASHLAND OIL, INC., Defendant-Appellee.
No. 91-5498.
United States Court of Appeals, Sixth Circuit.
May 21, 1991.
Before ALAN E. NORRIS and SUHRHEINRICH, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.
ORDER
1
The plaintiff appeals the order denying his motion under Rule 60(b), Fed.R.Civ.P., to vacate the prior summary judgment for defendant in this diversity action for benefits under a disability plan. The district court's order was filed and entered on March 11, 1991. The plaintiff's notice of appeal was filed on April 12, 1991.
2
The defendant now moves for dismissal of the appeal on grounds the notice of appeal was filed thirty-two (32) days after the judgment and therefore was untimely for purposes of Rule 4(a)(1), Fed.R.App.P. Additionally, the clerk of this court entered an order on April 29, 1991, directing the plaintiff to show cause why his appeal should not be dismissed for the same reasons. The plaintiff has failed to respond either to the motion to dismiss or the show cause order.
3
Compliance with the time limits of Rule 4(a)(1) is mandatory and jurisdictional. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 203 (1988). The plaintiff has not shown either that his notice of appeal was in fact timely filed or that he applied for and/or received an extension of time to file his notice of appeal under Rule 4(a)(5), Fed.R.App.P.
4
It therefore is ORDERED that this appeal is dismissed sua sponte for lack of appellate jurisdiction. Rule 9(a), Rules of the Sixth Circuit.
|
704 F.2d 829
GLOBAL VAN LINES, INC., Wheaton Van Lines, Inc. and AlliedVan Lines, Inc., Petitioners,v.INTERSTATE COMMERCE COMMISSION and United States of America,Respondents.
Nos. 82-4099, 82-4124 and 82-4158.
United States Court of Appeals,Fifth Circuit.
May 12, 1983.
Alan F. Wohlstetter, Stanley I. Goldman, Washington, D.C., for petitioners.
1
Jane Lind Downey, Arlington, Va., for American Movers Conf., intervenor.
2
Laurence H. Schecker, I.C.C., Washington, D.C., for I.C.C.
3
Robert B. Nicholson, William J. Roberts, Dept. of Justice, Washington, D.C., for U.S.
4
Ernest E. Gallego, Ronald L. Hartman, Glendale, Cal., for Bekins Van Lines, Co., intervenor.
5
Petitions for Review of Orders of the Interstate Commerce Commission.
6
Before RUBIN, GARZA and WILLIAMS, Circuit Judges.
ALVIN B. RUBIN, Circuit Judge:
7
Reduced administrative regulation of industry and the consequent creation of competition among those previously sheltered from price rivalry may damage those firms who had accommodated their business activities to the rigidity of regulation and the attendant benefit of protection from economic strife. Businesses who are thus forced into the competitive storm seek refuge in the argument that Congress did not intend to permit the administrative agency to go so far in relaxing governmental controls. Here, common motor carriers of household goods object to the Interstate Commerce Commission's sanction of contract carrier authority to competing household goods carriers, which will permit those competitors to give service and price concessions to large shippers. Concluding that the Commission acted within the scope of the authority given it by statute, we decline to vacate its orders.
I.
8
Congress changed the course of regulation of the motor carrier industry when, on July 1, 1980, it enacted the Motor Carrier Act of 1980, Pub.L. No. 96-296, 94 Stat. 793 (1980), 49 U.S.C.S. Sec. 10101 et seq. (Law.Coop.Supp.1982). The new legislation made substantial changes in the definition of contract carriers of property and in the Commission's criteria for determining contract carrier applications.1 As we noted in Alamo Express, Inc. v. ICC, 673 F.2d 852, 854 (5th Cir.1982), the Act was intended "to reduce unnecessary federal regulation and to remove regulatory inhibitions to market entry and carrier growth in the trucking industry" and "to promote competitive and efficient motor transportation services." In addition to other changes, the Motor Carrier Act lifts a number of the restrictions on the operations of motor contract carriers of property in an effort to make that segment of the industry more competitive. The Act defines a motor contract carrier as a person providing motor transportation under a continuing agreement that either assigns motor vehicles for a continuing period of time or is "designed to meet the distinct needs" of the shipper.2 Corollary to this expansion of contract carriage, the Act provides a means by which motor common carriers can challenge the bona fides of a contract carrier's operations. Shortly thereafter, Congress enacted the Household Goods Transportation Act of 1980, Pub.L. No. 96-454, 94 Stat. 2011 (1980), 49 U.S.C.S. Sec. 10101 et seq. (Law.Coop.Supp.1982). The House report on the final version of the Household Goods Act stated, "the provisions of the Motor Carrier Act of 1980 apply to the moving industry in these areas." H.R.Rep. No. 96-1372, 96th Cong., 2d Sess. 3 (1980), U.S.Code Cong. & Admin.News 1980, pp. 4271, 4273.
9
This consolidated proceeding seeks review of three decisions of the Commission--Bekins Van Lines Co., Extension--Babcock & Wilcox Company Contract Carriage (Sub-No. 71), Bekins Van Lines Co., Extension--Heublein, Inc., Contract Carriage (Sub-No. 77), and Bekins Van Lines Co., Extension--Household Goods (Sub-No. 84)--in which the Commission affirmed awards to Bekins of contract carrier authority to serve the three named shippers of household goods.
10
In each proceeding, Bekins seeks to perform contract carriage of household goods for a named industrial customer. The application to serve Babcock & Wilcox (Sub-No. 71) is typical. Babcock & Wilcox has a large number of employees and it frequently reassigns employees to new duty posts. Bekins recites in its application that the frequency and diversity of its employee and personnel moves invariably require on-the-spot service not presently available by common carrier, particularly during the seasonal peaks that are characteristic of the household goods carriage industry. Bekins proposes to guarantee "on-the-spot" servicing of Babcock & Wilcox's moves, including the transportation and incidental services connected with individual moves of employees, agents, and officers. Bekins also has a common carrier certificate. It proposes to commingle, for transportation to a common point, traffic transported under its common carrier certificate with traffic transported under the proposed contract carrier permit.
11
The Commission's Review Board Number 2 reviewed Babcock & Wilcox's "particularized service needs" and its general dissatisfaction with the available common carriers. The Board found that the proposal constitutes contract carriage within the meaning of 49 U.S.C. Sec. 10102(13)(B).3 It noted, "The volume and frequency of Babcock & Wilcox's service needs call for a carrier commitment beyond that of the on-time performance required of common carriers in general and guaranteed scheduled service of household goods carriers under 49 U.S.C. Sec. 10734(b)."4 It concluded that the Bekins proposal was in the public interest and should be granted. It reached similar decisions in Sub-No. 77, proposing contract service for Heublein, and in Sub-No. 84, proposing contract service for Northern Telecom.
12
In each proceeding, the Board found that Bekins does not propose to offer common carriage with preferential service features. It found the proposed service to be a premium service at a discount rate. The Commission explained in detail why, in its opinion, the proposals satisfy the distinct needs test of contract carriage under the statute. The only question before us is whether the Commission properly found that Bekins's service proposals meet the "distinct needs" test of contract carriage. The petitioners contend that the Commission's decisions are arbitrary and capricious, that the proposals are but a disguised form of common carriage, designed to give volume shippers preference in service at discounted rates, and that the shippers have no needs distinct from those of the general public.
13
The distinct needs test is not historical and fixed. It must be applied to changing transportation needs. The Commission explained that large corporate shippers, such as Babcock & Wilcox, have household goods transportation needs different from those of an individual shipper. It found that these large-volume shippers require responsive, on-time service adapted to meet the changing business demands of frequent and diverse moves of employees, agents, and officers, and that this constitutes a specialized service requirement. "On-the-spot" volume service, offering shippers favored status with regard to service quality, scheduling, and responsiveness, meets those needs. In addition, the Commission said, the Bekins proposal to provide lower rates for such shipments was one additional factor leading it to conclude that the service proposed is contract carriage, meeting the statutory test.
14
The evidence supporting the Commission's findings is not preponderant. Indeed, a skeptical evaluator might conclude that Bekins's proposals are difficult to distinguish from what the petitioners label them: contracts to provide preferential service at a reduced rate. But we are not charged with administration of the Act. Congress has delegated that function to the Commission. Our review of Commission decisions licensing motor contract carriers is narrowly confined. Alamo Express, Inc., 673 F.2d at 856; Benmar Transport & Leasing Corp. v. ICC, 623 F.2d 740, 743 (2d Cir.1980); International Detective Service, Inc. v. ICC, 613 F.2d 1067, 1073 & n. 13 (D.C.Cir.1979). The concepts underlying motor contract carriage--dedication of equipment, distinct needs, public interest, and service of the national transportation policy--are not defined by the statute. The Commission is given broad discretion to define these terms and "to draw its conclusions from the infinite variety of circumstances which may occur in specific instances." ICC v. Parker, 326 U.S. 60, 65, 65 S.Ct. 1490, 1493, 89 L.Ed.2d 2051, 2059 (1945). We determine only whether the agency's findings and conclusions are "arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with law," 5 U.S.C. Sec. 706(2)(A) (1976), or "unsupported by substantial evidence." 5 U.S.C. Sec. 706(2)(E) (1976). See Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 284, 95 S.Ct. 438, 441, 42 L.Ed.2d 447, 455 (1974); Alamo Express, Inc., 673 F.2d at 856.
15
The Commission decisions that the Bekins proposals are designed to meet the distinct needs of the shippers are not, on the record as a whole, either arbitrary or irrational. The argument that the needs of the three shippers are ordinary, common to household goods shippers in general, and not different, more select or more specialized needs, was considered. The Commission found that the shippers require responsive service with on-time performance to a greater degree than the general public. It found that they make frequent and diverse moves of their employees, officers, and agents. It found that they have a particular need for notification of shipments, careful handling, and exact scheduling of shipments. It has drawn fine lines, distinguishing what we would, perhaps, have considered similarities, but its function is to make precisely this kind of decision, and ours is limited to review for arbitrariness.
16
In ICC v. J-T Transport Co., 368 U.S. 81, 82 S.Ct. 204, 7 L.Ed.2d 147 (1961), the Supreme Court stated that the distinct needs test is satisfied if the applicant shows that a shipper requires "a different or a more select or a more specialized service" than the protesting carriers provide. Id. at 91, 82 S.Ct. at 210, 7 L.Ed.2d at 155. So long as the shipper's need is shown to be distinct in that sense and the applicant's service is designed to satisfy the need, it is irrelevant whether petitioners' existing services are reasonably adequate. Id.; International Detective Service, Inc., 613 F.2d at 1076.
17
In the face of Congress's directive to open up competition in the motor carrier industry, see Alamo Express, Inc., 673 F.2d at 854, the Commission was empowered to entertain new and innovative service proposals by all sorts of carriers. Prior to 1980, there were no household goods contract carriers, although some household goods common carriers did perform contract carriage of commodities other than household goods. However, Congress has made it clear that the relaxed entry provisions of the Motor Carrier Act apply to household goods carriers. H.R.Rep. No. 96-1372, 96th Cong., 2d Sess. 3 (1980), quoted supra, at 831. Thus, when Bekins, an established common carrier of household goods, sought contract carrier authority to transport household goods, the Commission was not restrained by statute from approving the new proposal.
18
The petitioners attempted to introduce into the Commission review proceedings copies of documents prepared by Bekins for distribution to its district managers concerning its proposed program for contract carriage of household goods. The Commission refused to consider these documents on the ground that they were not relevant to its determination. The petitioners argue that these documents show that Bekins does not propose to offer specialized service contracts, but only open-ended volume discounts. They contend that the Commission abused its discretion by refusing to admit the proffered evidence, and they urge us not to repeat that mistake. The Commission responds that its proceedings are not intended to evaluate Bekins's contracts for compliance with statutory and administrative requirements,5 so the documents were not pertinent to its inquiry. Bekins denies that the documents foretell the contents of its contracts; it intends to tailor its contracts to the needs of each shipper. We agree with the Commission that these proceedings to determine whether Bekins's applications should be granted ought not to be turned into a prospective review of Bekins's adherence to the requirements of contract carriage. See International Detective Service, Inc., 613 F.2d at 1076 (permit proceeding is not to be turned into full-fledged rate proceeding).
19
Should the operations under these proposals prove to be but common carriage in faint disguise, affording preferential treatment or rates to only a few shippers, they may be challenged. Pursuant to 49 U.S.C.S. Sec. 10925(e) (Law.Coop.Supp.1982),6 enacted as part of the Motor Carrier Act, a competing common carrier can file a complaint with the Commission alleging that a contract carrier's operations "do not conform with the operations of a motor contract carrier of property ... and ... are those of a motor common carrier of property." This complaint proceeding is separate from the application proceeding for contract carrier authority, and is the proper method by which household goods common carriers can assert that a contract carrier is not actually operating as a contract carrier. A competing common carrier also has the option of filing a complaint with the Commission pursuant to 49 U.S.C. Sec. 11701(b) (Supp.III 1979)7, an older provision of the Interstate Commerce Act, for a contract carrier's violation of the Motor Carrier Act or the Household Goods Transportation Act when providing transportation or service subject to the Commission's jurisdiction.
20
In such a proceeding, the actual contracts between Bekins and the contracting shippers can be introduced into evidence, and the petitioners can address whether Bekins's contracts comply with the requirements of 49 C.F.R. Sec. 1053.1 (1981).8 The petitioners have expressed doubt that they would be able to acquire copies of Bekins's contracts if they challenged Bekins's operations as a contract carrier. They point out that motor carrier contracts are not required to be filed with the Commission, and that the Commission may choose not to make them publicly available. In addition, the Commission may choose not to authorize discovery of the contracts in any administrative proceedings. The Commission responds that it will allow such discovery, should future proceedings be instituted, and acknowledges that it will be bound by this concession. That is enough to assure the petitioners that, should need arise, the documents can be discovered.
II.
21
For these reasons, the petitions for review are DENIED.
1
Prior to the Motor Carrier Act of 1980, motor contract carriers of property had to demonstrate that they would dedicate their equipment to the exclusive use of the supporting shippers or that their proposed service was designed to meet the shippers' distinct needs. The Commission considered whether the grant of authority was consistent with the national transportation policy, 49 U.S.C.S. Sec. 10101 (Law.Coop.Supp.1982), by evaluating (1) the number of shippers to be served by the carrier, (2) the nature of the proposed transportation, (3) the effect that a grant of authority would have on the protesting carriers, (4) the effect that a denial of authority would have on the applicant or the supporting shipper(s), and (5) the changing character of the supporting shipper's transportation requirements. For many years the Commission interpreted the "number of shippers" criterion to mean that a contract carrier could not serve more than eight shippers. This interpretation was eliminated in Ex Parte No. MC-119, Policy Statement Regarding the "Rule of Eight" In Contract Carrier Application, 44 Fed.Reg. 2470 (1979), petition for review denied sub nom., Regular Common Carrier Conference v. United States, 628 F.2d 248 (D.C.Cir.1980), in which the Commission stated that it would no longer apply rigid numerical tests in evaluating contract carrier applications
2
49 U.S.C.S. Sec. 10102(13)(B) (Law.Coop.Supp.1982) provides:
(13) "motor contract carrier" means--
* * *
(B) a person providing motor vehicle transportation of property for compensation under continuing agreements with one or more persons--
(i) by assigning motor vehicles for a continuing period of time for the exclusive use of each such person; or
(ii) designed to meet the distinct needs of each such person.
3
See supra note 2 for the text of this provision
4
49 U.S.C.S. Sec. 10734(b) (Law.Coop.Supp.1982) reads:
(b)(1) Subject to the provisions of paragraph (2) of this subsection, a motor common carrier providing transportation of household goods subject to the jurisdiction of the Commission under subchapter II of chapter 105 of this title [49 USC Secs. 10521 et seq.] may, subject to the provisions of this chapter (including the general tariff requirements of section 10762 of this title [49 USC Sec. 10762], establish rates for the transportation of household goods which guarantee that the carrier will pick up and deliver such household goods at the times specified in the contract for such services and provide a penalty or per diem payment in the event the carrier fails to pick up or deliver such household goods at the specified time. The charges, if any, for such guarantee and penalty provision may vary to reflect one or more options available to meet a particular shipper's needs but must be contained in the tariff the carrier publishes for such services under this title [49 USC Secs. 1 et seq.].
(2) Before a carrier may establish a rate for any service under paragraph of this subsection, the Commission may require such carrier to have in effect and keep in effect, during any period such rate is in effect under such paragraph, a rate for such service which does not guarantee the pick up and delivery of household goods at the times specified in the contract for such services and which does not provide a penalty or per diem payment in the event the carrier fails to pick up or deliver household goods at the specified time.
5
The petitioners assert particularly that the documents show that Bekins will not fulfill the requirements of 49 C.F.R. Sec. 1053.1 (1981). That regulation reads:
No contract carrier by motor vehicle, as defined in 49 U.S.C. 10102(12) shall transport property for hire in interstate or foreign commerce except under special and individual contracts or agreements which shall be in writing, shall provide for transportation for a particular shipper or shippers, shall be bilateral and impose specific obligations upon both carrier and shipper or shippers, shall cover a series of shipments during a stated period of time in contrast to contracts of carriage governing individual shipments, and copies of which contracts or agreements shall be preserved by the carriers parties thereto so long as such contracts or agreements are in force and for at least one year thereafter.
6
49 U.S.C.S. Sec. 10925(e) (Law.Coop.Supp.1982) provides:
On application of a motor contract carrier of property who holds a permit issue under section 10923 of this title [49 USC Sec. 10923], or on complaint of a competing motor common carrier of property who holds a certificate under section 10922(b) of this title [49 USC Sec. 10922(b) ], or on its own initiative, if the Commission, after notice and an opportunity for a proceeding, determines that the operations under the permit or any part thereof--
(A) do not conform with the operations of a motor contract carrier of property; and
(B) are those of a motor common carrier of property;
the Commission may amend or revoke such permit or part thereof to conform the operations under such permit or part thereof to the operations of a motor contract carrier of property.
(2) The Commission may issue in place of any permit or part thereof revoked under this subsection a certificate under section 10922(b) of this title [49 USC Sec. 10922(b) ] which authorizes the holder of such certificate to provide transportation as a motor common carrier of property of the same property between the same points or within the same territory as authorized in the permit or part thereof.
7
49 U.S.C. Sec. 11701(b) (Supp.III 1979) provides:
A person including a governmental authority, may file with the Commission a complaint about a violation of this subtitle by a carrier providing, or broker for, transportation or service subject to the jurisdiction of the Commission under this subtitle. The complaint must state the facts that are the subject of the violation .... The Commission may dismiss a complaint it determines does not state reasonable grounds for investigation and action.
8
See supra note 5
|
354 Mich. 303 (1958)
92 N.W.2d 305
PEOPLE
v.
DORRIKAS.
Docket No. 51, Calendar No. 47,295.
Supreme Court of Michigan.
Decided October 13, 1958.
Paul L. Adams, Attorney General, Samuel J. Torina, Solicitor General, Edmond F. DeVine, Prosecuting Attorney, Eugene B. Calder, Assistant Prosecuting Attorney, for the people.
Conlin, Conlin & Parker, for defendant.
CARR, J. (dissenting).
The defendant in this case was engaged, on May 10, 1953, and for some time prior thereto, in the operation of a restaurant located at 29 North Huron street in the city of Ypsilanti. The building was not owned by defendant but was leased or rented by him. Between 10 and 11 o'clock in the late evening of the date mentioned fire was discovered in the place of business. When the fire department arrived the blaze was apparently confined to the basement, but shortly thereafter the first floor of the restaurant collapsed in part. The damage from actual burning was limited to the basement, and to the first floor of the restaurant.
In connection with the removal of debris from the premises an investigation was conducted by 2 members of the Michigan State police who had training and experience in the investigation of fires suspected as incendiary. Defendant was prosecuted on *306 a charge of arson, the case being tried before a jury. During the progress of the trial a motion for a directed verdict was made on behalf of defendant on the ground that the proofs introduced by the people were insufficient to permit submission of the case to the jury. The motion was denied. Following the completion of the proofs, the arguments of counsel, and the charge of the court, the jury returned a verdict of guilty, and sentence was imposed. A motion for a new trial was submitted and denied. Defendant has appealed.
On behalf of appellant it is contended that the evidence in the case was insufficient to establish the corpus delicti, and, also, that the prosecution failed to establish with the requisite degree of certainty that defendant was guilty of the offense of arson, if such offense had been committed. These claims require a consideration of the testimony on which the cause was submitted to the jury. The police officers who made the investigation testified that they found in the basement, which apparently was used in connection with the restaurant, a mattress filled with kapok, which had been folded over from one end. In the fold was discovered a small amount of excelsior and corrugated paper. It was the claim of the people, in substance, that the fire had been started with the paper and excelsior and had spread to the mattress. The proofs established that the contents of said mattress would burn slowly, giving off an intense heat in so doing. The witnesses claimed further that the floor of the restaurant at the time of the examination indicated that the place of greatest damage from fire was immediately above the mattress.
Defendant was questioned concerning the mattress, stating, according to the testimony, that it belonged to him and that he had kept it for some time in a closet in the basement. The police officers referred *307 to further stated that the electric wiring in the basement was examined by them for the purpose of discovering whether a short circuit, possibly responsible for the fire, had occurred therein. They found no indication of such situation. Testimony was also offered indicating that the contents of the mattress were of a character that precluded the possibility of spontaneous combustion.
It was shown by the prosecution that prior to a date preceding the fire by some weeks defendant had carried fire insurance in the sum of $10,000, that the carrier of such insurance declined to renew the policy, and that defendant procured insurance elsewhere in the total sum of $22,000, together with a policy for $6,500 against loss sustained by business interruption, and a further policy for $1,500 covering property of defendant located on the third floor of the building. It was also shown by uncontradicted testimony that shortly before the fire occurred defendant procured for the occupant of an apartment on the second floor of the building a policy of insurance covering her property. Defendant suggested such action, and delivered the policy to the insured named therein. Further evidence was offered indicating that defendant's income from the restaurant had been declining for some time prior to the fire. On the basis of the testimony introduced it was the claim of the prosecution that a motive was established on the part of defendant for the commission of the crime charged.
The mere fact that a fire has occurred affords no proper basis for an inference that it was wrongfully set. Under such circumstances it may be assumed that it was the result of accident or some natural cause. People v. Lee, 231 Mich 607, 612. In the case at bar, however, proofs were offered from which the jury might properly have concluded that the fire in defendant's restaurant did not result from any *308 natural or providential cause. The testimony of the officers tended to eliminate the possibility of defective wiring and, also, spontaneous combustion. The presence of the excelsior and charred paper in the fold of the mattress suggests that such combustible materials were placed there by human agency. That defendant might have gone to the basement prior to his leaving the restaurant at approximately 7 o'clock in the evening is not open to question. Materials used in connection with the operation of the business were stored in the basement, as appeared from the testimony of defendant's employee who was working there on May 10, 1953. As proprietor of the restaurant business defendant had right of access to the premises at all times.
The testimony with reference to the decline in earnings of the restaurant and the taking out of the insurance policies, above mentioned, clearly suggest a motive on defendant's part. Without discussing the evidence in further detail, we conclude that the trial judge was not in error in denying the motion for a directed verdict, or in submitting the cause to the jury. No claim is made that there was any error in the charge as to the law governing the case. The verdict returned may not be said to have been unsupported by sufficient proofs.
On the trial counsel for defendant sought to introduce the testimony of a witness with reference to an offer claimed to have been made to rent the restaurant business and the equipment therein The purpose of such testimony was, as stated by counsel, to establish the value of defendant's interest. There was no showing, however, that the party making the offer was familiar with the rental value of such businesses, that he was experienced in the operation of restaurants, or that he had knowledge as to the earnings of the restaurant in question. Objection was interposed on behalf of the people and sustained *309 by the trial judge on the ground that no proper foundation had been laid. The ruling was correct. No showing was made that the witness was qualified to testify as to the value of the business.
Defendant did not testify in his own behalf. His counsel called, among other witnesses, one who had known defendant for 11 years and testified to satisfactory business relations with him. In answer to the question as to the reputation of defendant "for honesty and integrity" in the community in which he lived and carried on his business, he said that such reputation was good. On cross-examination the character witness was asked if he had ever heard of defendant having been involved in various offenses in Illinois, in Wisconsin, and in Indiana. No objection was made to any of such questions, 6 in number, the witness answering in the negative in each instance. At the conclusion of the cross-examination defendant rested. On behalf of appellant it is now claimed that the asking of the questions of the character witness constituted prejudicial and reversible error. On behalf of the people it is argued that the cross-examination was proper as bearing on the extent of the knowledge of the witness in testifying to good reputation, and also on his credibility.
Defendant was ably represented on the trial by competent and experienced counsel. If the questions were deemed objectionable no reason is advanced why an objection was not interposed. There was no motion to strike the testimony nor does it appear from the record that there was any specific request to the court to instruct the jury with reference to it. It is quite possible that had reports or rumors of the prior difficulties with the law, referred to in the questions to the character witness, been circulated in Ypsilanti to the knowledge of the witness, his opinion as to defendant's reputation might have been other than as expressed. Rumors and reports of *310 violations of the law committed by defendant elsewhere, if circulated in the city of Ypsilanti, might well have affected his reputation therein.
The general rule seems to be well established that a character witness who has testified to the good reputation of the defendant in a criminal case may be asked on cross-examination, for the purpose of testing his credibility and indicating the weight to be given to his testimony, whether he has heard reports of prior conduct on the part of defendant tending to affect his reputation for honesty and integrity. The general rule is summarized in 58 Am Jur, Witnesses, § 658, p 363, as follows:
"A witness as to character may, on cross-examination, be interrogated as to what he has heard in the community respecting the character of the party inquired about. While there is some authority to the contrary, it is generally held that a character witness may be cross-examined as to the existence of reports of particular acts and vices or associations of the person concerning whom he testified which are inconsistent with the reputation attributed to him by the witness not to establish the truth of the facts, but to test the credibility of the witness, and to ascertain what weight or value is to be given his testimony. Such testimony tends to show either that the witness is unfamiliar with the reputation concerning which he has testified, or that his standards of what constitutes good repute are unsound."
A comprehensive note on the general subject of the cross-examination of character witnesses is found in 71 ALR 1504. In the course of the discussion, it is there said (pp 1505, 1514):
"According to the overwhelming weight of authority, a witness testifying to the good reputation or character of a defendant in a criminal prosecution may be interrogated on cross-examination with respect to rumors or reports of particular acts imputed *311 to the defendant, and as to what the witness has heard of specific charges of misconduct made against the defendant. * * *
"The purpose of the cross-examination of the defendant's character witness with reference to particular acts of the defendant is not to establish such acts as facts, or to prove the truth of the rumors or charges inquired about, but merely to show the circulation of rumors of such acts, and to test the credibility of the character witness, by ascertaining his good faith, information, and accuracy."
The above statements are supported in the annotation by extensive citations.
In Michelson v. United States, 335 US 469 (69 S Ct 213, 93 L ed 168), in discussing at some length the basis of so-called character testimony and practical incidents pertaining thereto, it was said, in part (pp 479, 482, 483):
"The price a defendant must pay for attempting to prove his good name is to throw open the entire subject which the law has kept closed for his benefit and to make himself vulnerable where the law otherwise shields him. The prosecution may pursue the inquiry with contradictory witnesses to show that damaging rumors, whether or not well-grounded, were afloat for it is not the man that he is, but the name that he has which is put in issue. Another hazard is that his own witness is subject to cross-examination as to the contents and extent of the hearsay on which he bases his conclusions, and he may be required to disclose rumors and reports that are current even if they do not affect his own conclusion. It may test the sufficiency of his knowledge by asking what stories were circulating concerning events, such as one's arrest, about which people normally comment and speculate. Thus, while the law gives defendant the option to show as a fact that his reputation reflects a life and habit incompatible with commission of the offense charged, it subjects his proof to tests of credibility designed to prevent him from *312 profiting by a mere parade of partisans. * * *
"Since the whole inquiry, as we have pointed out, is calculated to ascertain the general talk of people about defendant, rather than the witness' own knowledge of him, the form of inquiry, `Have you heard?' has general approval, and `Do you know?' is not allowed.
"A character witness may be cross-examined as to an arrest whether or not it culminated in a conviction, according to the overwhelming weight of authority. This rule is sometimes confused with that which prohibits cross-examination to credibility by asking a witness whether he himself has been arrested.
"Arrest without more does not, in law any more than in reason, impeach the integrity or impair the credibility of a witness. It happens to the innocent as well as the guilty. Only a conviction, therefore, may be inquired about to undermine the trustworthiness of a witness.
"Arrest without more may nevertheless impair or cloud one's reputation. False arrest may do that. Even to be acquitted may damage one's good name if the community receives the verdict with a wink and chooses to remember defendant as one who ought to have been convicted. A conviction, on the other hand, may be accepted as a misfortune or an injustice, and even enhance the standing of one who mends his ways and lives it down. Reputation is the net balance of so many debits and credits that the law does not attach the finality to a conviction, when the issue is reputation, that is given to it when the issue is the credibility of the convict.
"The inquiry as to an arrest is permissible also because the prosecution has a right to test the qualifications of the witness to bespeak the community opinion. If one never heard the speculations and rumors in which even one's friends indulge upon his arrest, the jury may doubt whether he is capable of giving any very reliable conclusions as to his reputation."
*313 Prior decisions of this Court are in accord with the general rule as above indicated. Thus in People v. Huff, 173 Mich 620, 624, it was said:
"It is well settled that, when a witness is called to attack or defend character, he can only be asked, on his examination in chief, as to the general character of the person in question; and he will not be allowed to testify as to particular facts, either favorable or unfavorable to such person; but, upon cross-examination, he may then be asked, with a view to test the value of his testimony, as to particular facts. 1 Taylor on Evidence, § 352; 3 Rice on Criminal Evidence, § 375; State v. Merriman, 34 SC 16 (12 SE 619)."
Likewise, in People v. Hill, 258 Mich 79, the Court, in discussing the scope of cross-examination of a character witness in a criminal case, said (p 85):
"There is a difference in the rules governing the introduction of rebuttal testimony and governing cross-examination. A witness who testifies to another's good reputation may be cross-examined to test his knowledge and candor (22 CJ, p 483); for that purpose it has been held he may be asked if he has heard of specific cases of misconduct. He may be asked these questions only to test his credibility and ascertain the weight to be given to his testimony. Rex v. Martin, 6 Car & P 562 (172 Eng Rep 1364); Leonard v. Allen, 11 Cush (65 Mass) 241; Commonwealth v. O'Brien, 119 Mass 342 (20 Am Rep 325)."
Of like import is People v. Rosa, 268 Mich 462, 465.
We are not dealing in the instant case with the cross-examination of a defendant in which questions have been propounded for the purpose of establishing that the accused has committed crimes other than the one for which he is on trial, but of which he has not been convicted. A typical illustration of such a case is afforded by People v. Kelsey, 303 Mich 715, to which counsel for appellant have referred in *314 their brief. Said decision and others of like nature, including People v. Wright, 294 Mich 20, are not in point with reference to the scope of the cross-examination of character witnesses. Testimony as to a defendant's reputation for citizenship, or for "honesty and integrity," is based, as has been repeatedly pointed out in decisions dealing therewith, on hearsay. Such fact naturally has a bearing on the right of the cross-examiner to test the knowledge and credibility of the character witness by inquiries as to whether he has heard of prior acts of misconduct on the part of such defendant.
We find no error in the case, and the verdict and sentence should be affirmed.
DETHMERS, C.J., and KELLY, J., concurred with CARR, J.
KAVANAGH, J.
The defendant in this case was convicted of the crime of arson by a jury in the Washtenaw county circuit court.
The facts with reference to the case have been presented in detail in the opinion of Mr. Justice CARR.
Appellant makes several claims of error, which he feels justify the granting of a new trial, all of which have been answered by Justice CARR in his opinion. I respectfully disagree with only one of his conclusions.
At the trial of the cause defendant did not take the stand on his own behalf. He did, however, in defense, present a character witness who was a professor of sociology and criminology at Michigan State Normal College (now Eastern Michigan College), who testified that he had been connected with the college for 27 years; that he had known the defendant, Mr. Dorrikas, for 11 years, and had business relations with him during that whole period. *315 He further testified that defendant's reputation for honesty and integrity in the area of the city of Ypsilanti in which defendant lived and carried on his business was good. The following cross-examination was carried on by the prosecuting attorney:
"Q. Dr. Thompson, you say you are a professor of sociology and criminology at the Michigan State Normal College?
"A. Yes, sir.
"Q. And for how long a period has that been?
"A. Twenty-seven years.
"Q. And you have testified, that Mr. Dorrikas' reputation for honesty and integrity is good? Is that right?
"A. Yes, sir.
"Q. Now, it has been good during the time that you have known him, is that correct?
"A. Yes.
"Q. Now, Dr. Thompson, have you ever heard that James Dorrikas was arrested and convicted in Peoria, Illinois, of the crime of disorderly conduct?
"A. No, sir.
"Q. Have you ever heard, sir, that in Peoria or in, yes, in Peoria, Illinois, James Dorrikas was arrested for robbery?
"A. No, sir.
"Q. Have you ever heard that in Milwaukee, Wisconsin, James Dorrikas was arrested for vagrancy?
"A. No, sir.
"Q. Have you ever heard that he has been arrested for violation of the liquor laws?
"A. No, sir.
"Q. Have you ever heard that he was arrested in the State of Indiana, and convicted of the crime of bank robbery?
"A. No, sir.
"Q. Have you ever heard, sir, that in Peoria, Illinois, James Dorrikas was arrestd for contributing to the delinquency of a minor child for rape?
"A. No, sir.
*316 "Mr. Calder: That is all, sir.
"Mr. De Otte: That is all.
"The Court: The defense rests?
"Mr. De Otte: That is right."
No objection was made to the cross-examination by defendant's attorney, and no instruction was given the jury by the trial judge as to the purpose of such cross-examination and the limited consideration that they could give to it.
Defendant in his motion for new trial, and on appeal here, contends that this cross-examination and the failure of the trial court to properly instruct the jury were prejudicial to his rights.
Ordinarily where no timely objection was made to the introduction of such testimony and no request to charge was made, this Court would not examine the points relied upon for reversal, and except under unusual circumstances we have no disposition to relax this rule. Nevertheless, as in a number of previous cases, this Court, in the exercise of supervisory control over all litigation, has often asserted the right to consider manifest and serious errors although objection was not made by the party who appeals. The inherent power of this Court to prevent fundamental injustice is not limited by what appellant is entitled to as a matter of right. People v. Steeneck, 247 Mich 583; People v. Holmes, 292 Mich 212; People v. Kelsey, 303 Mich 715.
While it is admitted that the general rule seems to be well established that a character witness who has testified to the good reputation of the defendant in a criminal case may be asked on cross-examination, for the purpose of testing his credibility and indicating the weight to be given to his testimony, whether he has heard reports of prior conduct on the part of defendant tending to affect his reputation for honesty and integrity, it is equally well established *317 that such cross-examination shall be limited as to time and, in some instances, place. The admissibility of cross-examination of this type and its effect has been the subject of comment on the part of textbook writers and other students of the law for a number of years. The number of decisions of appellate courts, both in the State of Michigan and other States of the union as well as the United States supreme court, indicates to even the casual observer that this particular field of the law has been a very controversial one. This undoubtedly has resulted from trying to write fair and just rules for the conduct of criminal cases, which would preserve the presumption of innocence surrounding a defendant in a criminal case and preserve from prejudice the constitutional rights of a defendant who does not take the stand, while at the same time making it possible for the authorities whose duty and responsibility it is to prosecute those, thought to be guilty of crime, to have a fair opportunity to learn whether or not witnesses who testify as to the character and reputation of a defendant have adequate knowledge of this reputation, and to test their credibility as witnesses so that a jury may arrive at the proper weight to be given to their testimony.
It seems to us that appellate courts ordinarily have very wisely left this responsibility with the trial judge and have allowed him considerable discretion in determining whether or not particular questions may be asked of such a witness, and have wisely relied upon the trial judge to properly instruct the jury in this regard. Ordinarily we would not believe in an appellate court substituting its judgment on this question for that of the trial court. However, as in this case, where no instruction has been given the jury, and where there is nothing in the record to show whether the trial court was informed as to when, if at all, these alleged acts took *318 place, where so far as the record is concerned, it might well be only a figment of the imagination of the prosecuting attorney, used for the definite purpose of prejudicing the minds of the jurors, we cannot refuse to act.
It would seem that the trial judge failed to use proper care to protect the defendant's rights.
Justice Jackson, speaking for the United States supreme court in Michelson v. United States, 335 US 469 (69 S Ct 213, 93 L ed 168), with reference to limiting cross-examination of character witnesses in regard to hearsay testimony, said (p 480):
"Wide discretion is accompanied by heavy responsibility on trial courts to protect the practice from any misuse."
Justice CARR quotes at considerable length from the Michelson Case in support of his opinion. However, in order to properly understand the decision in that case, it seems to me that greater discussion is needed. In this case Justice Jackson delivered the opinion of the court. Mr. Justice Frankfurter wrote a concurring opinion, in which he said (p 487):
"Despite the fact that my feelings run in the general direction of the views expressed by Mr. Justice Rutledge in his dissent, I join the court's opinion."
Justice Frankfurter felt that great leeway should be given to the trial judge. Justice Rutledge was joined by Justice Murphy in the dissenting opinion in which he wrote to establish what he called the only fair rule to foreclose the entire line of inquiry concerning specific incidents in the defendant's past, both on cross-examination and on new evidence in rebuttal.
Justice Jackson, in the Michelson Case, said (pp 471, 472):
*319 "Defendant called 5 witnesses to prove that he enjoyed a good reputation. Two of them testified that their acquaintance with him extended over a period of about 30 years and the others said they had known him at least half that long. A typical examination in chief was as follows:
"`Q. Do you know the defendant Michelson?
"`A. Yes.
"`Q. How long do you know Mr. Michelson?
"`A. About 30 years.
"`Q. Do you know other people who know him?
"`A. Yes.
"`Q. Have you had occasion to discuss his reputation for honesty and truthfulness and for being a law-abiding citizen?
"`A. It is very good.
"`Q. You have talked to others?
"`A. Yes.
"`Q. And what is his reputation?
"`A. Very good.'
"These are representative of answers by 3 witnesses; 2 others replied, in substance, that they never had heard anything against Michelson.
"On cross-examination. 4 of the witnesses were asked, in substance, this question: `Did you ever hear that Mr. Michelson on March 4, 1927, was convicted of a violation of the trade-mark law in New York City in regard to watches?' This referred to the 20-year-old conviction about which defendant himself had testified on direct examination. Two of them had heard of it and 2 had not.
"To 4 of these witnesses the prosecution also addressed the question the allowance of which, over defendant's objection, is claimed to be reversible error:
"`Did you ever hear that on October 11, 1920, the defendant, Solomon Michelson, was arrested for receiving stolen goods?'
"None of the witnesses appears to have heard of this.
*320 "The trial court asked counsel for the prosecution. out of presence of the jury, `Is it a fact according to the best information in your possession, that Michelson was arrested for receiving stolen goods?' Counsel replied that it was, and to support his good faith exhibited a paper record which defendant's counsel did not challenge.
"The judge also on 3 occasions warned the jury, in terms that are not criticized, of the limited purpose for which this evidence was received.[3]" (Emphasis supplied.)
In footnote 3, Justice Jackson said (pp 472, 473);
"In ruling on the objection when the question was first asked, the court said:
"`I instruct the jury that what is happening now is this: the defendant has called character witnesses, and the basis for the evidence given by those character witnesses is the reputation of the defendant in the community, and since the defendant tenders the issue of his reputation the prosecution may ask the witness if she has heard of various incidents in his career. I say to you that regardless of her answer you are not to assume that the incidents asked about actually took place. All that is happening is that this witness' standard of opinion of the reputation of the defendant is being tested. Is that clear?'
"In overruling the second objection to the question the court said:
"`Again I say to the jury there is no proof that Mr. Michelson was arrested for receiving stolen goods in 1920, there isn't any such proof. All this witness has been asked is whether he had heard of that. There is nothing before you on that issue. Now would you base your decision on the case fairly in spite of the fact that that question has been asked? You would? All right.'
"The charge included the following:
"`In connection with the character evidence in the case I permitted a question whether or not the witness knew that in 1920 this defendant had been *321 arrested for receiving stolen goods. I tried to give you the instruction then that that question was permitted only to test the standards of character evidence that these character witnesses seemed to have. There isn't any proof in the case that could be produced before you legally within the rules of evidence that this defendant was arrested in 1920 for receiving stolen goods, and that fact you are not to hold against him; nor are you to assume what the consequences of that arrest were. You just drive it from your mind so far as he is concerned, and take it into consideration only in weighing the evidence of the character witnesses.'"
Justice Jackson further said (p 481):
"The trial judge was scrupulous to so guard it in the case before us. He took pains to ascertain, out of presence of the jury, that the target of the question was an actual event, which would probably result in some comment among acquaintances if not injury to defendant's reputation. He satisfied himself that counsel was not merely taking a random shot at a reputation imprudently exposed or asking a groundless question to waft an unwarranted innuendo into the jury box."
Subsequently, in the opinion dealing with the amount of time that had elapsed since the commission of the previous acts witness was asked about, the Court indicated that the trial judge was allowed a good deal of discretion and indicated that a trial judge, in his discretion, may well exclude inquiry about rumors of an event so remote, unless recent misconduct revived them. Justice Jackson said (p 484) that events a generation old are likely to be lived down and dropped from the present thought and talk of the community and to be absent from the knowledge of younger or more recent acquaintances.
*322 It might also be said our system proposes to give a criminal an opportunity to reform, and if he does reform, in all fairness he should not be subjected to embarrassment for previous mistakes.
In the instant case, if these acts happened at all, they must have happened more than 11 years prior to the trial when defendant was living away from his present community.
The majority opinion in the Michelson Case pointed out that 2 of the witnesses dated their acquaintance with the defendant as commencing 30 years before the trial. Defendant, on direct examination voluntarily called attention to his conviction 20 years before. The court under these circumstances could not say that the admission into evidence of this past conviction was an abuse of discretion. Under these safeguards, above set forth, Justice Jackson affirmed the judgment of the lower court.
It is to be noted that the Michelson Case was decided December 20, 1948. Since that time 2 cases have been decided by courts of appeal, one in October, 1956, the case of Roberson v. United States (CCA), 237 F2d 536. Judge Rives there said (p 540):
"The district court and this court are, of course, bound by the majority opinion of the supreme court, but a careful reading of that opinion persuades us to the view that it marks out the extreme limits of permissible cross-examination. Further, the supreme court itself implied essential safeguards which have not been observed in the present case. For example, the court made repeated note of the fact that the trial court had ascertained out of the presence of the jury that the arrest or conviction had actually occurred. 335 US 472, 481 (69 S Ct 216, 221, 93 L ed 171, 172, 176), and footnote 18 on the latter page."
*323 Further on in the opinion Judge Rives quotes the words of Judge Harlan, now Mr. Justice Harlan, in regard to government counsel conducting the prosecution (p 541):
"`We may also add that it is incumbent on prosecuting attorneys to be scrupulous in not stepping out of bounds on this sort of cross-examination.' United States v. H. Wool & Sons (CCA), 215 F2d 95, 99."
Concluding his opinion, Judge Rives said (pp 541, 542):
"In his final charge to the jury, the learned district judge ably and correctly instructed them. We apprehend, however, that it was then too late to cure the repeated errors. Before we can accord entire verity to a verdict of guilty, that verdict must result from a trial fairly conducted in every material respect in accordance with the rules of law, and, inadvertently this trial was not so conducted."
The court reversed the conviction and remanded the case for a new trial.
Also, in the case of United States v. Phillips (CCA), 217 F2d 435, decided December 2, 1954, in which the court reversed a conviction and remanded for new trial on other grounds, the court had this to say in the opinion of Judge Major (pp 443, 444):
"We perhaps should not conclude without mention of another matter which under the circumstances would be difficult to excuse as nonprejudicial error. The defendant called 8 character witnesses who testified as to his good reputation among his friends and associates for honesty, integrity and fair dealing. On cross-examination of 1 of such witnesses, a Mr. Gallagher, the following questions were asked by the government:
"`Did you hear that in the year 1934, well, specifically, that in January of 1934, in September of 1934, and in October of 1934, Mr. Phillips was arrested *324 for issuing checks to defraud. Did you ever hear of that? * * *
"`Did you hear that in July of 1934 and in September of 1934, Mr. Phillips had been arrested for obtaining money under false pretenses? * * * These are 2 additional. Did you ever hear of that?'
"Defendant objected to these questions on the basis that they were highly prejudicial, which objection was overruled by the court. To each question the witness answered. `No,' that is, that he had never heard of the charges implied by the questions. At the time these questions were thus propounded and answered, no instruction was given to the jury as to their relevancy or as to the purpose for which they could be considered. The record is entirely devoid of any showing as to whether the defendant had in fact been arrested, as implied by the questions. Neither does the record disclose except by vague inference that the court was at any time advised that the government was prepared to prove such arrests. The most that is shown is that after the conclusion of the trial, in a colloquy between the court and counsel on defendant's motion for a new trial, the court in response to an inquiry by government's counsel stated that he recalled that there was submitted to him during the trial the Michelson Case, Michelson v. United States, 335 US 469 (69 S Ct 213, 93 L ed 168).
"More than that, the final charge to the jury made no reference to the cross-examination of this character witness or the purpose for which it was permitted. It is true that the government tendered an instruction (No. 11-A) purporting to state the reason for and purpose of the cross-examination. The instruction as proposed was objected to by the defendant on the basis that it assumed a number of matters which were not in proof, including the assumption that the defendant had actually been arrested, as implied by the questions. The court refused to give the instruction and in doing so stated, `There is not any proof in the case that could be produced *325 that defendant was arrested.' It is now argued by the government that the court's refusal to give the instruction under the circumstances forecloses the defendant from claim of error on appeal. With this we do not agree. In the first place, it is doubtful if any instruction could have been given at that late time which would have dissipated the harmful effect of the cross-examination. In the second place, when the instruction was refused by the court because of its form, the duty devolved upon the government to tender a proper instruction. Upon its failure to do so, we think it was the duty of the court of its own volition to instruct the jury as to the purpose for which the cross-examination was permitted, as well as the extent to which it could be considered by the jury.
"Both sides rely upon the Michelson Case in support of their positions on the cross-examination under discussion. It is true the court in that case approved a similar cross-examination under the facts and circumstances before it. There, however, the trial court at the time of the occurrence twice instructed the jury as to the limited purpose for which the examination could be utilized and again so instructed the jury in its final charge, see footnote to Michelson, supra, 335 US at pages 472, 473 (69 S Ct at pages 216, 217, 93 L ed at page 172). The supreme court, referring to the precautionary means employed by the trial court, stated 335 US at pages 480, 481 (69 S Ct at page 221, 93 L ed at page 176).
"`Wide discretion is accompanied by heavy responsibility on trial courts to protect the practice from any misuse. The trial judge was scrupulous to so guard it in the case before us. He took pains to ascertain, out of presence of the jury, that the target of the question was an actual event, which would probably result in some comment among acquaintances if not injury to defendant's reputation. He satisfied himself that counsel was not merely taking a random shot at a reputation imprudently exposed *326 or asking a groundless question to waft an unwarranted innuendo into the jury box.'
"In the instant case no such precautionary measures were taken. In fact, there were no precautionary measures of any kind. For aught that is disclosed by the record, the jury was at liberty to consider the damaging implication inherent in the government's cross-examination for any and all purposes."
It is apparent from a reading of these cases that the appellate courts mentioned believe the United States supreme court would not permit the type of cross-examination carried on in the instant case without (1) the trial judge determining, in the absence of the jury, whether or not the criminal acts actually took place, the time of their commission, and a determination as to whether they were relevant to the issue being tried, and (2) the trial judge making a careful instruction to the jury as to the reasons testimony as to the criminal acts is being admitted.
We need not extend this opinion for further discussion of the questions and facts involved. With due respect to the learned circuit judge who presided at this trial, it is to be pointed out that he was somewhat handicapped by failure of counsel to make objections to the questions. Regardless of all other questions and considerations, however, it is the heavy responsibility of a reviewing court to ascertain if a defendant has had a fair and impartial trial, a trial free from prejudicial errors. In the instant case, it is our considered judgment that the defendant did not have such a trial. Since the record discloses the trial judge's failure to make inquiry out of the presence of the jury as to whether such acts were actually committed and as to the time and place of the acts, and the trial judge's failure to properly instruct the jury as to the purpose of such testimony and the limitations upon the use they might make of *327 it, defendant was deprived of a fair trial.
The conviction appealed from is reversed and the cause is remanded for new trial.
SMITH, BLACK, EDWARDS, and VOELKER, JJ., concurred with KAVANAGH, J.
|
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 11-1625
___________
Dale Brent Adams, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Western District of Arkansas.
Tyson Foods, Inc., *
* [UNPUBLISHED]
Appellee. *
___________
Submitted: October 4, 2011
Filed: October 7, 2011
___________
Before MURPHY, ARNOLD, and BENTON, Circuit Judges.
___________
PER CURIAM.
Dale Adams appeals the district court’s1 adverse grant of summary judgment
in his employment-discrimination action against his former employer, Tyson Foods.
Upon careful de novo review, we conclude that the district court properly granted
Tyson Foods summary judgment, because Adams failed to present a trialworthy issue
as to whether Tyson’s legitimate, non-discriminatory reason for his termination was
a pretext for unlawful discrimination. See Tusing v. Des Moines Indep. Cmty. Sch.
Dist., 639 F.3d 507, 514-18 (8th Cir. 2011) (standard of review; burden-shifting
1
The Honorable Jimm Larry Hendren, United States District Judge for the
Western District of Arkansas.
analysis); Manning v. American Republic Ins. Co., 604 F.3d 1030, 1044 (8th Cir.)
(absenteeism constitutes legitimate, non-discriminatory reason for termination), cert.
denied, 131 S. Ct. 648 (2010); Bloom v. Metro Heart Grp. of St. Louis, Inc., 440 F.3d
1025, 1028-29 (8th Cir. 2006) (conclusory allegations and speculation are insufficient
to defeat summary judgment).
Accordingly, we affirm. See 8th Cir. R. 47B. We also deny Adams’s pending
motions for an injunction and sanctions.
______________________________
-2-
|
39 So.3d 323 (2010)
JOSEPH
v.
STATE.
No. 1D10-1357.
District Court of Appeal of Florida, First District.
July 12, 2010.
Decision Without Published Opinion Affirmed.
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
WORLDCOM, INCORPORATED,
Plaintiff-Appellee,
v. No. 02-1479
KEVIN BOYNE,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Gerald Bruce Lee, District Judge.
(CA-01-193-A)
Argued: May 6, 2003
Decided: June 25, 2003
Before WILKINSON, NIEMEYER, and TRAXLER,
Circuit Judges.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Stephen Michael Sayers, HUNTON & WILLIAMS,
McLean, Virginia, for Appellant. Emmett Francis McGee, Jr., PIPER,
MARBURY, RUDNICK & WOLFE, L.L.P., Baltimore, Maryland,
for Appellee. ON BRIEF: Robert J. Mathias, PIPER, MARBURY,
RUDNICK & WOLFE, L.L.P., Baltimore, Maryland, for Appellee.
2 WORLDCOM v. BOYNE
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Plaintiff WorldCom, Inc. brought this unjust enrichment action
against Kevin Boyne after Boyne breached a commitment to remain
employed with the company for two years, and then refused to repay
the bonus he had received in exchange for that commitment. In his
defense, Boyne alleged that his retention of the benefit was justified
by WorldCom’s own misconduct. Boyne also brought counterclaims
against WorldCom alleging that WorldCom’s actions caused him to
forego thousands of dollars in profits from the sale of company stock.
The district court rejected Boyne’s defense and counterclaims, and we
affirm its judgment.
I.
Plaintiff WorldCom, Inc. ("WorldCom") is a telecommunications
company that provides local, long-distance, and Internet services.
WorldCom owns over 500 subsidiary companies, including UUNET
Technologies, Inc. ("UUNET"). On March 20, 1995, UUNET hired
defendant Kevin Boyne as UUNET’s Manager of Engineering, and
promoted him to Chief Operations Officer of Internet Technology on
June 15, 2000. As Chief Operations Officer, Boyne received an
annual salary of $230,000.00.
During the spring of 2000, the technology sector was still thriving.
As a result, Internet-oriented companies such as WorldCom faced
fierce competition in hiring and retaining top industry executives. In
order to retain its own top executives, WorldCom decided to imple-
ment a formal "Retention Program." Under the Program, certain exec-
utives would receive a cash bonus and stock options in return for the
executive’s commitment to remain with the company through July
2002.
WORLDCOM v. BOYNE 3
On May 15, 2000, Bernard Ebbers, Chief Executive Officer and
President of WorldCom, met with Boyne and approximately 100
other executives of WorldCom subsidiaries to discuss the Retention
Program. Ebbers testified that he told these executives that they
would be "receiving an envelope containing a retention bonus and
stock options, and that the bonuses were conditioned upon the recipi-
ents remaining with the company through July 2002." WorldCom,
Inc. v. Boyne, No. 01-193-A (E.D. Va. Mar. 5, 2002). Ebbers further
testified that he emphasized the fact that any executive who resigned
prior to July 2002 would have to return the cash bonus.
Against the advice of WorldCom’s legal counsel, Ebbers did not
require the executives to sign a legal document memorializing this
understanding. However each individual retention package envelope
contained a memorandum that made this commitment clear. The
memorandum read, in part: "Cash award in the amount of __ . . . . In
return, I ask for your personal commitment to WorldCom through
July 2002. In accepting this package, you commit to the company
your continued employment through this date." Several of the execu-
tives testified at trial that when they left the meeting, they had a clear
understanding of their repayment obligation.
At the conclusion of the meeting, Ebbers handed each executive an
envelope containing his or her individual retention package. Boyne’s
envelope contained a check for $900,000, as well as the memorandum
stating that Boyne was being offered $900,000 and certain WorldCom
stock options in exchange for his commitment to remain with the
company through July 2002. Boyne cashed the check a few days later.
Shortly thereafter, several executives who had also cashed their
checks resigned, and Boyne helped the company secure return of their
retention bonuses.
In June 2000, shortly after Boyne accepted the retention package,
WorldCom realigned some of UUNET’s operations and promoted
Boyne to Chief Operations Officer. Rumors were circulating around
UUNET at the time that WorldCom also planned to fully integrate
UUNET into WorldCom. However Ronald Beaumont, WorldCom’s
President and CEO of Operations Technology, assured several senior
UUNET management team members that WorldCom did not plan to
4 WORLDCOM v. BOYNE
integrate UUNET. In addition, Ebbers sent a company wide e-mail
expressing the same sentiment.
By the end of the summer, WorldCom’s intentions began to
change. Beaumont testified that it became evident that UUNET’s
organizational structure was causing inefficiencies that did not make
sound business sense. WorldCom thus decided that it would be in
WorldCom’s best interests to integrate UUNET. On October 27,
2000, Beaumont informed Boyne of this decision. Believing that the
integration would not be good for his career, Boyne submitted his res-
ignation on November 20, 2000, effective December 15, 2000, less
than seven months into his two-year commitment.
Because Boyne did not fulfill his commitment to the company,
WorldCom demanded that he return the $900,000 bonus, but he
refused. On December 13, to offset the $900,000 WorldCom believed
Boyne owed it, WorldCom suspended Boyne’s right to exercise
75,000 vested stock options. Several days later, WorldCom also
rescinded Boyne’s final paycheck.
On February 5, 2001, WorldCom filed a complaint against Boyne
in Virginia federal district court. The complaint alleged causes of
action for breach of contract, unjust enrichment, and conversion, all
based on Boyne’s failure to repay the cash award. On March 22, the
court dismissed the conversion claim against Boyne. Boyne then filed
a five-count counterclaim against WorldCom alleging actual fraud,
constructive fraud, conversion, tortious interference in contractual
relations, and breach of contract. These claims were based on allega-
tions that WorldCom deceived Boyne into accepting his retention
package and then illegally withheld his benefits and compensation
when he resigned.
The parties filed cross-motions for summary judgment. The court
granted summary judgment in favor of Boyne on WorldCom’s breach
of contract claim, and in favor of WorldCom on Boyne’s counter-
claims for fraud, conversion, and tortious interference with contrac-
tual relations.
After a five-day bench trial on WorldCom’s unjust enrichment
claim and Boyne’s breach of contract claim, the district court issued
WORLDCOM v. BOYNE 5
an opinion rendering both findings of fact and conclusions of law.
First, the court held that Boyne had been unjustly enriched by failing
to return the cash bonus. The court rejected Boyne’s argument that
WorldCom’s unclean hands barred it from equitable relief because
Boyne failed to prove that WorldCom’s allegedly inequitable conduct
bore an "immediate and necessary relation" to its unjust enrichment
claim. The court thus ordered Boyne to repay the full amount of the
retention bonus. As to Boyne’s breach of contract counterclaim, the
court ordered WorldCom to pay Boyne his final paycheck and to
compensate Boyne for his unused vacation time. However, the court
held that Boyne could not recover the value of his "frozen" stock
options because he failed to sufficiently prove damages. Boyne now
appeals.
II.
Boyne argues initially that WorldCom’s claim for unjust enrich-
ment is barred by the doctrine of unclean hands.1 The doctrine of
unclean hands prevents a plaintiff from obtaining equitable relief if
the plaintiff has been "guilty of any inequitable or wrongful conduct
with respect to the transaction or subject matter sued on." Richards
v. Musselman, 267 S.E.2d 164, 166 n.1 (Va. 1980) (quoting W.
deFuniak, Handbook of Modern Equity § 24 (2d ed. 1956)). A show-
ing that the plaintiff engaged in inequitable conduct does not automat-
ically bar equitable relief. Rather, a defendant raising an unclean
hands defense must demonstrate "a close nexus between a party’s
unethical conduct and the transactions on which that party seeks
relief." In re Uwimana, 274 F.3d 806, 810 (4th Cir. 2001).
Boyne argues that three separate acts by WorldCom support his
unclean hands defense: 1) WorldCom’s representations that it did not
intend to integrate UUNET; 2) the freezing of Boyne’s 75,000 vested
stock options; and 3) the withdrawal of Boyne’s final paycheck. In
order for this defense to succeed, Boyne must link at least one of the
predicate acts to the event WorldCom complains about: Boyne’s
1
Boyne also argues that WorldCom did not have standing to sue for
unjust enrichment because the account on which the retention bonus
check was drawn was held in the name of a WorldCom subsidiary. We
find this argument without merit.
6 WORLDCOM v. BOYNE
refusal to repay the $900,000 retention bonus after he voluntarily left
the company prior to July 2002. We agree with the district court that
Boyne has failed to establish such a connection.
Boyne argues that WorldCom knew that it was going to integrate
UUNET long before the integration was announced, and therefore
that its representations to the contrary were false. Boyne further con-
tends that he would not have accepted the retention bonus if not for
WorldCom’s false representations. The district court, however, found
that "WorldCom made no explicit promises to . . . Boyne, prior to
[his] negotiation of the cash award[ ], that WorldCom would not inte-
grate UUNET into WorldCom." WorldCom, No. 01-193-A, at 21. "In
deference to the unchallenged superiority of the district court’s fact-
finding ability," we cannot set aside a district court’s factual findings
unless they are clearly erroneous. Salve Regina College v. Russell,
499 U.S. 225, 233 (1991); Fed. R. Civ. P. 52(a). The district court did
not clearly err in finding that Boyne’s acceptance of the retention
bonus was not secured by any WorldCom statements about integra-
tion.
Moreover, any integration-related statements that WorldCom made
after Boyne accepted the bonus are irrelevant, because they do not
bear an "immediate and necessary" relation to Boyne’s acceptance of
and subsequent refusal to repay the bonus. Boyne argues that the post-
acceptance misstatements are important because WorldCom’s deci-
sion to integrate caused him to resign, which in turn gave rise to
WorldCom’s unjust enrichment claim. However Boyne concedes that
it was entirely within WorldCom’s right to integrate UUNET into
WorldCom. And more importantly, WorldCom’s decision to integrate
was in no way related to the Retention Program. Nothing in Boyne’s
retention package suggested that the commitment hinged on non-
integration. Thus the fact that Boyne resigned in response to the inte-
gration is irrelevant to WorldCom’s unjust enrichment claim, and
WorldCom’s post-acceptance statements about integration cannot
support an unclean hands defense.
As to the remaining two predicate acts, the frozen stock options
and the salary reversal, the district court found that WorldCom took
these actions in good faith. Specifically, the district court found that
WorldCom’s actions amounted to an attempt to set off the amount it
WORLDCOM v. BOYNE 7
believed Boyne owed to it, and "[i]t is not an unconscionable act for
an entity to withhold money when it has a good faith belief that one
owes it money." WorldCom, No. 01-193-A, at 20 n.7. This finding of
good faith is also entitled to deference and therefore these acts also
cannot support an unclean hands defense.
The balance of equities in this case must relate to the $900,000.
Boyne received a cash bonus amounting to more than three times his
yearly salary in exchange for a commitment to remain with the com-
pany for two years. Boyne went back on that commitment, but argues
that he should still retain its benefits because WorldCom made a valid
business decision with which Boyne did not agree. The balance of
equities here obviously weighs in WorldCom’s favor. We therefore
affirm the district court’s judgment ordering Boyne to repay the
award in full.2
III.
Boyne next asserts three counterclaims: 1) breach of contract; 2)
fraud; and 3) conversion. We address each counterclaim in turn.
A.
First, Boyne argues that the district court erred in rejecting his
breach of contract counterclaim for failure to prove damages. Boyne
argues that he need not prove the full extent of damages because his
failure to prove damages is a direct result of WorldCom’s wrongdo-
ing. Boyne contends that this court can calculate sufficiently precise
damages based on the price of the frozen shares on December 13,
2000, because he would have exercised his options and sold the
shares on that day had they not been frozen.
2
We reject Boyne’s argument that he should only be required to pay
the net amount of the retention bonus. WorldCom paid out $900,000.00
in exchange for Boyne’s commitment to remain with the company.
Boyne breached that commitment. Equity thus requires that Boyne repay
the full amount in order to put the parties in the same position they would
have been if the exchange had not occurred.
8 WORLDCOM v. BOYNE
A plaintiff is not required to prove damages with "mathematical
precision," but he must at least prove the "elements of [his] damage
with reasonable certainty." Gwaltney v. Reed, 84 S.E.2d 501, 502 (Va.
1954). In other words, a plaintiff must "furnish evidence of sufficient
facts or circumstances to permit at least an intelligent and probable
estimate thereof." Id. The district court properly held that Boyne has
failed to make such a showing here.
Boyne’s vested stock options gave him the option to purchase stock
at a set price ("strike price"). In order to profit from the purchase of
those options, Boyne would not only have to exercise the options, but
also to then sell them at a higher price. Therefore in order to prove
damages, Boyne must demonstrate that he would have exercised the
frozen options and that he would have sold them at a price higher than
the strike price. Boyne’s evidence is insufficient to make this show-
ing.
Boyne’s key evidence of damages is a stipulation between the par-
ties. The stipulation indicates the strike price of the options as well
as the opening and closing price of the stock on December 13. The
parties stipulated that had Boyne both exercised and sold the options
on December 13, he would have made $64,057 profit. The stipulation
is irrelevant to Boyne’s showing of damages, however, unless Boyne
can adduce some evidence demonstrating that he would have both
exercised the options and sold the stock on December 13.
Boyne testified at trial that he instructed his broker to call him
when it made sense to exercise the options. Boyne’s broker called on
December 13, the day the options were frozen. However, the evidence
is ambiguous at best as to whether Boyne’s broker called to notify
him that the options had been frozen or to tell him to exercise his
options. After hearing the testimony and weighing the evidence, the
district court concluded that the broker had called simply to alert
Boyne to the frozen options, and we must defer to that finding.
Absent any evidence that Boyne had any intention of exercising the
options or that he would have sold the stock at a profit, we hold that
Boyne has failed to prove sufficiently precise damages to support his
breach of contract claim.
WORLDCOM v. BOYNE 9
B.
Next, Boyne argues that the district court improperly granted sum-
mary judgment in favor of WorldCom on Boyne’s fraud and construc-
tive fraud claims. The district court held that Boyne failed to prove
that he suffered damages caused by WorldCom’s misrepresentations.
Boyne contends that if not for WorldCom’s misrepresentations
regarding integration, he would have quit his job immediately, exer-
cised his vested stock options, and sold all of his WorldCom stock for
a significant profit. The causal connection between WorldCom’s
actions and Boyne’s claim for damages is too speculative to support
his claim.
To sustain a claim for actual fraud, a plaintiff must demonstrate by
clear and convincing evidence: 1) a false representation of material
fact; 2) intentionally and knowingly made with the intent to mislead;
3) reliance by the misled party; and 4) damages resulting from such
reliance. Winn v. Aleda Constr. Co., 315 S.E.2d 193, 195 (Va. 1984).
To sustain a claim for constructive fraud, a plaintiff must demonstrate
the same elements, except that the false representation can be made
innocently or negligently. Howarth v. Rockingham Publ’g Co., 20 F.
Supp. 2d 959, 970 (W.D. Va. 1998).
Assuming arguendo that Boyne can satisfy the first three elements
of his fraud claims, his claims still fail because he cannot prove that
WorldCom’s misrepresentations caused him damage. Boyne’s only
evidence that but for WorldCom’s representations he would have
immediately sold all of his WorldCom stock is his own testimony.
Like the district court, we find such speculation alone insufficient to
demonstrate Boyne’s reliance on the representations or damages suf-
fered as a result of such reliance. We therefore affirm the district
court’s dismissal of Boyne’s fraud claims.
C.
Finally, we turn to Boyne’s counterclaim for the tort of conversion,
which he based on WorldCom’s act of freezing his stock options.
"Conversion is the wrongful assumption or exercise of the right of
ownership over goods or chattles belonging to another in denial of or
inconsistent with the owner’s rights." Economopoulos v. Kolaitis, 528
10 WORLDCOM v. BOYNE
S.E.2d 714, 719 (Va. 2000). A plaintiff cannot bring a claim for con-
version unless he has a property interest in and is entitled to immedi-
ate possession of the converted item. Id. Moreover, in order to recover
on a tort, "the duty tortiously or negligently breached must be a com-
mon law duty, not one existing between the parties solely by virtue
of [a] contract." Richmond Metro. Auth. v. McDevitt St. Bovis, Inc.,
507 S.E.2d 344, 347 (Va. 1998) (quoting Foreign Mission Bd. v.
Wade, 409 S.E.2d 144, 148 (Va. 1991)).
The duty underlying Boyne’s conversion claim arises from World-
Com’s contractual duties under its Stock Option Agreements. Upon
the vesting of Boyne’s stock options, WorldCom was contractually
obligated to deliver shares of stock at a specified price upon exercise
by Boyne. Boyne essentially alleges that WorldCom breached that
obligation by blocking him from exercising his options at the strike
price, despite the fact that they had vested according to schedule.
Because this duty exists solely by nature of WorldCom’s obligations
under the Stock Option Agreements, however, these allegations
amount to a breach of contract claim. Therefore Boyne’s conversion
claim must be dismissed.
IV.
Boyne entered into an agreement with WorldCom from which he
obtained a substantial financial benefit. Because he breached that
agreement, it would be unjust to allow him to retain its benefits.
Boyne also attempts to recover a significant amount of damages by
speculating that if not for WorldCom’s statements about non-
integration and its freezing of his unexercised stock options, he would
have sold his WorldCom stock for a considerable profit. Such specu-
lation is not sufficient to support his claims for damages. We there-
fore affirm the judgment of the district court.
AFFIRMED
|
284 S.W.3d 653 (2009)
Nedzib KORKUTOVIC, Respondent,
v.
GAMEL COMPANY, Appellant, and
Division of Employment Security, Respondent.
No. ED 91420.
Missouri Court of Appeals, Eastern District, Division One.
March 10, 2009.
Motion for Rehearing and/or Transfer to Supreme Court Denied June 15, 2009.
*654 Frank J. Niesen, III, Saint Louis, MO, for Respondent Nedzib Korkutovic.
Karie E. Casey, Saint Louis, MO, for Appellant.
Larry R. Ruhmann, Jefferson City, MO, for Respondent Division of Employment Security.
OPINION
GLENN A. NORTON, Judge.
Gamel Company ("Employer") appeals the decision of the Labor and Industrial Relations Commission awarding Nedzib Korkutovic ("Claimant") unemployment benefits. We affirm.
I. BACKGROUND
Claimant began working for Employer in 2003 as a janitor. Claimant's job duties *655 included moving tables and desks and climbing ladders to dust and clean.
In February 2007, Claimant had surgery to correct non-work-related problems he was having with arteries in his legs. Claimant returned to work in May 2007 without work restrictions. He continued working, with occasional complaints, through October 2007. At some point during the month of October 2007, Claimant talked to his supervisor, Aladin Kovacevic ("Supervisor"), about the physical problems he was experiencing because of his job duties. Supervisor asked Claimant to either write down his complaints or provide Employer with medical documentation. On October 29, 2007, Claimant provided Supervisor with doctor's notes stating that Claimant had the following work restrictions: (1) he could not lift more than forty pounds; (2) he could not climb ladders; and (3) he should sit down for five minutes every hour.
The next day, on October 30, 2007, Claimant reported to work at his regular shift time. Before he could begin his duties, Supervisor informed Claimant that he no longer had a job. Employer would not allow Claimant to work unless he provided a statement from his doctor removing Claimant's work restrictions. Employer was worried about the safety of Claimant and those around him.
One week later, on November 6, 2007, Employer's president, James Gamel, and Supervisor met with Claimant to explore whether Employer could reasonably accommodate Claimant's work restrictions. The parties could not find a way for Employer to do so. Claimant suggested that he keep working and ignore his doctor's restrictions. Employer would not accept this proposal, and insisted that Claimant could not work without having his restrictions removed. Claimant did not return to work after November 6, 2007.
Subsequently, Claimant filed a claim for unemployment benefits. Employer filed a protest to the claim. A deputy with the Missouri Division of Employment Security determined that Claimant was disqualified from receiving unemployment benefits because he left work voluntarily without good cause attributable to his work or Employer. Claimant appealed the deputy's decision to the Division's appeals tribunal. The appeals tribunal held a hearing. At the hearing, Claimant testified that he believed he was fired. Gamel testified that it was his understanding that Claimant quit work for personal reasons due to his health, and Supervisor testified that he believed Claimant was no longer working for Employer because of his medical restrictions. Subsequently, the appeals tribunal affirmed the result reached by the deputy. The appeals tribunal found that: (1) Claimant left work voluntarily because he could not perform the essential functions of his job; and (2) Claimant left work for "personal reasons, his health .... which is not good cause attributable to the work or to the employer."
Claimant then filed an application for review to the Commission. The Commission reversed the decision of the appeals tribunal and awarded Claimant unemployment benefits. The Commission concluded that: (1) Claimant did not leave his job voluntarily but was discharged by Employer; and (2) Employer failed to satisfy its burden of proving that Claimant was discharged for misconduct connected with work. Employer appeals.
II. DISCUSSION
A. Standard of Review
On appeal from a decision in an unemployment benefits proceeding, this Court may modify, reverse, remand for rehearing, or set aside the award upon finding *656 that: (1) the Commission acted without or in excess of its powers; (2) the award was procured by fraud; (3) the facts found by the Commission do not support the award; or (4) there was not sufficient competent evidence in the record to warrant the making of the award. Section 288.210 RSMo 2000.[1]
Our review "is limited to deciding whether the Commission's decision is supported by competent substantial evidence and authorized by law." Ewing v. SSM Health Care, 265 S.W.3d 882, 886 (Mo.App. E.D.2008) (internal quotation omitted). Viewing the evidence and the reasonable inferences drawn therefrom in the light most favorable to the Commission's decision, we will affirm the Commission's decision if, in light of the whole record, we find that the Commission could have reasonably made its findings and reached its result. Id. Although this Court defers to the Commission's factual findings, we are not bound by the Commission's conclusions of law or its application of the law to the facts. Difatta-Wheaton v. Dolphin Capital Corporation, 271 S.W.3d 594, 595 (Mo. banc 2008); Ewing, 265 S.W.3d at 886.
B. Claimant is not Disqualified from Receiving Unemployment Benefits
In its sole point on appeal, Employer argues that the Commission erred in concluding that: (1) Claimant did not leave work voluntarily but was discharged; and (2) Employer failed to satisfy its burden of proving that Claimant was discharged for misconduct connected with work. Employer maintains that the facts found by the Commission do not support the award of unemployment benefits, that there was not sufficient competent evidence in the record to warrant the making of the award, and that the Commission misapplied the law. We disagree.
The issue in this case is whether Claimant, who became unemployed because documented medical restrictions did not allow him to perform his job, is disqualified from receiving unemployment benefits. Under section 288.050 RSMo Supp.2007,[2] a claimant is disqualified from receiving unemployment benefits if a deputy finds: (1) "[t]hat the claimant has left work voluntarily without good cause attributable to such work or to the claimant's employer"; or (2) "that a claimant has been discharged for misconduct connected with the claimant's work." Section 288.050.1(1); Section 288.050.2.
1. Claimant Left Work Involuntarily
Employer's position that the Commission erred in finding that Claimant did not leave work voluntarily but was discharged is untenable in light of the recent Missouri Supreme Court case Difatta-Wheaton.[3]
*657 a. Difatta-Wheaton
In Difatta-Wheaton, the employer granted the claimant leave for medical problems related to ovarian cancer, and claimant was due to return to work on May 29, 2006. 271 S.W.3d at 595. The claimant did not return to work as expected because she suffered a medical emergency related to her ovarian cancer. Id. The claimant left a message with her supervisor on May 29 before the beginning of her shift that advised him she was unable to come to work due to cancer complications. Id. The message also stated that the claimant would fax over a statement from her doctor. Id. The claimant's doctor faxed a statement to the employer on May 29. Id. Additionally, a friend of the claimant delivered a copy of the doctor's statement to claimant's employer. Id. On June 5, 2006, the employer sent claimant a letter stating that claimant had voluntarily resigned because of unexcused absences between May 29 and June 5. Id.
The issue before the Missouri Supreme Court in Difatta-Wheaton was whether the claimant's absence from work established that she left work voluntarily under section 288.050.1(1). Id. at 595-96. Section 288.050.1(1) provides that a claimant is disqualified from receiving benefits if a deputy finds "[t]hat the claimant has left work voluntarily without good cause attributable to such work or to the claimant's employer." The statute does not define the term "voluntarily." Difatta-Wheaton, 271 S.W.3d at 596.
The Supreme Court examined prior Missouri cases that applied section 288.050.1(1) to a situation where a claimant was unable to work due to a personal illness in light of the general public policy of Missouri's employment security law, chapter 288. Id. at 596-98. The general purpose of chapter 288, as codified in section 288.020, is to provide unemployment compensation "for the benefit of persons unemployed through no fault of their own." Id. at 598 (quoting section 288.020.1) (emphasis by the Supreme Court). Moreover, chapter 288 "shall be liberally construed to accomplish its purpose." Id. (quoting section 288.020.2). Based upon this public policy, the Supreme Court held that "[t]o the extent [previous cases] suggest that non-work-related illness is a per se disqualification, they should no longer be followed." Id. at 598. The Court also held that "those who leave work involuntarily are never disqualified from eligibility under [section 288.050.1(1)]...." Id.
Applying the public policy of chapter 288 and the plain language of the term "voluntarily" (which means, "proceeding from the will: produced in or by an act of choice") to the particular facts of that case, the Supreme Court determined that claimant's absence from work was not voluntary. Id. at 598-99 (quoting Webster's Third New International Dictionary 2564 (Unabridged, 1993)). In making its determination, the Court noted that: (1) the claimant notified her employer before she was scheduled to return to work that she would not be returning due to her medical emergency; (2) the claimant was in compliance with the company's written policy regarding *658 absences; and (3) the claimant took the steps necessary to preserve her employment. Id.
b. Applying Difatta-Wheaton and the Law Contained therein to the Facts of this Case
In applying Difatta-Wheaton and the law contained therein to the facts of this case, we give deference to the Commission's factual findings, which are as follows. At some point during the month of October 2007, Claimant talked to Supervisor about the physical problems he was experiencing because of his job duties. Supervisor asked Claimant to either write down his complaints or provide Employer with medical documentation. On October 29, 2007, Claimant provided Supervisor with doctor's notes stating that Claimant had the following work restrictions: (1) he could not lift more than forty pounds; (2) he could not climb ladders; and (3) he should sit down for five minutes every hour. The next day, Supervisor told Claimant that he no longer had a job. Employer would not allow Claimant to work unless he provided a statement from his doctor removing Claimant's work restrictions. Thereafter, the parties could not find a way for Employer to reasonably accommodate Claimant's work restrictions. Claimant suggested that he keep working and ignore his doctor's restrictions. Employer would not accept this proposal, and insisted that Claimant could not work without having his restrictions removed.
The Commission's factual findings demonstrate that Claimant became unemployed because documented medical restrictions did not allow him to perform his job. Unemployment compensation is designed for the benefit of persons who, like Claimant, are "unemployed through no fault of their own." Section 288.020.1. Claimant did not leave work "voluntarily" within the plain meaning of the word, i.e. "proceeding from the will: produced in or by an act of choice." Webster's Third New International Dictionary at 2564. Claimant notified Employer of his medical problems and, upon Employer's request, timely provided medical documentation evidencing his work restrictions. After being informed that he no longer had a job, Claimant took steps to work again by meeting with Employer to discuss the possibility of reasonable accommodations. Claimant did not choose to be unemployed; rather, he wanted to be employed so badly that he was even willing to ignore his doctor's restrictions. Like the claimant in Difatta-Wheaton, it cannot be said that Claimant made a choice or was otherwise responsible for his medical problems and their consequences. See 271 S.W.3d at 599. Because Claimant left work involuntarily, he is not disqualified from receiving unemployment benefits under section 288.050.1(1). See id. at 598 (holding that "those who leave work involuntarily are never disqualified from eligibility under [section 288.050.1(1)] ....") (emphasis added). The Commission did not err in concluding that Claimant did not voluntarily leave work but was discharged.
2. Claimant's Physical Inability to do his Job does not Constitute Misconduct
We now turn to whether the Commission's conclusion that Employer failed to satisfy its burden of proving that Claimant was discharged for misconduct connected with work is supported by competent substantial evidence and is authorized by law. Whether a claimant's actions constitute misconduct connected with work is a question of law that we review de novo. Berwin v. Lindenwood Female College, 205 S.W.3d 291, 294 (Mo.App. E.D. 2006).
*659 Section 288.050.2 provides that "[i]f a deputy finds that a claimant has been discharged for misconduct connected with the claimant's work, such claimant shall be disqualified for waiting week credit and benefits." The definition of "misconduct" is set out in section 288.030.1(23) RSMo Supp.2007:
[A]n act of wanton or willful disregard of the employer's interest, a deliberate violation of the employer's rules, a disregard of standards of behavior which the employer has the right to expect of his or her employee, or negligence in such degree or recurrence as to manifest culpability, wrongful intent or evil design, or show an intentional and substantial disregard of the employer's interest or of the employee's duties and obligations to the employer....
Generally, a claimant bears the burden of demonstrating that he or she is entitled to unemployment benefits. Berwin, 205 S.W.3d at 294-95. However, when the employer claims that the employee was discharged for misconduct, the burden shifts to the employer to prove its claim of misconduct connected with work. Id. at 295. The employer has the burden of proving by a preponderance of the evidence that the claimant willfully violated the employer's rules or standards. Id.
Employer has not met its burden in the instant case. Claimant became unemployed because documented medical restrictions did not allow him to perform his job. There is a vast distinction between whether an employer would be justified in discharging an employee and whether he may prevent the employee from receiving unemployment benefits. Berwin, 205 S.W.3d at 295. Claimant's physical inability to do his job does not disqualify him from receiving unemployment benefits on the basis of misconduct under section 288.050.2. See id. The Commission did not err in concluding that Employer failed to satisfy its burden of proving that Claimant was discharged for misconduct connected with work.
3. Conclusion
The Commission's decision that Claimant is not disqualified from receiving unemployment benefits is supported by competent substantial evidence and is authorized by law. Point denied.
III. CONCLUSION
We affirm the Commission's decision awarding Claimant unemployment benefits.
KURT S. ODENWALD, P.J., and PATRICIA L. COHEN, J., concur.
NOTES
[1] All statutory references are to RSMo 2000 unless otherwise indicated.
[2] All references to section 288.050 are to RSMo Supp.2007.
[3] In support of its claim that Claimant voluntarily left work and was not discharged, Employer cites Wheeler v. Poor Boy Tree Service, Inc., 252 S.W.3d 253 (Mo.App. S.D.2008). In Wheeler, the employer suspended claimant from work until he provided a medical report indicating that he was presently capable of performing his duties after the employer became aware that the claimant failed to disclose medical restrictions. Id. at 255. The claimant refused to provide a medical report to his employer, and subsequently applied for unemployment benefits. Id. The Commission found that the claimant was disqualified from receiving unemployment benefits because he left work voluntarily without good cause attributable to his work or his employer. Id. The Southern District affirmed the Commission's finding that Claimant left work voluntarily because, inter alia, "the Commission concluded that claimant was unwilling to seek any report" and this refusal "was the direct and immediate cause of claimant's unemployment." Id. at 256-57 (emphasis in original). We find that Wheeler does not apply to the instant case for two reasons. First, Wheeler is factually distinguishable from the instant case because: (1) the record reveals that Claimant timely provided medical documentation when requested by his Supervisor; (2) the Commission in this case did not find that Claimant was unwilling to seek any medical documentation; and (3) Claimant became unemployed because documented medical restrictions did not allow him to perform his job. Secondly, unlike Difatta-Wheaton, 271 S.W.3d 594, Wheeler is not binding precedent on this Court. This opinion takes no position on whether Wheeler is still good law in light of Difatta-Wheaton.
|
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-12-00371-CR
NO. 02-12-00372-CR
NO. 02-12-00373-CR
NO. 02-12-00374-CR
NO. 02-12-00375-CR
NO. 02-12-00376-CR
NO. 02-12-00377-CR
NO. 02-12-00378-CR
NO. 02-12-00379-CR
NO. 02-12-00380-CR
PABLO GARCIA APPELLANT
V.
THE STATE OF TEXAS STATE
----------
FROM CRIMINAL DISTRICT COURT NO. 4 OF TARRANT COUNTY
----------
MEMORANDUM OPINION 1
----------
1
See Tex. R. App. P. 47.4.
Appellant Pablo Garcia appeals his convictions for burglary of a habitation
and nine counts of aggravated robbery with a deadly weapon. Appellant’s court-
appointed counsel has filed a motion to withdraw and an Anders brief in support
stating that after diligently reviewing the record, he believes that any appeal by
Appellant would be frivolous. See Anders v. California, 386 U.S. 738, 87 S. Ct.
1396 (1967). Although given notice and an opportunity to file a pro se brief,
Appellant did not do so. We affirm.
Background Facts
On October 30, 2010, Appellant and three other men dressed in costumes,
drove to a house in Pantego, Texas, and robbed the occupants at gunpoint.
Appellant admitted that he, as well as two of the other men, used a real gun. The
men stole purses, cameras, phones, and wallets. Appellant testified that he had
held his gun to a woman, whose wedding ring he took, and a thirteen-year-old
boy, whose wallet contained $2 that Appellant took.
Appellant was charged with burglary of a habitation and nine counts of
aggravated robbery with a deadly weapon. Appellant pleaded guilty to all counts.
Appellant stated in the trial court that he understood the indictments, the
consequences of his plea, and that he was freely and voluntarily pleading guilty.
The trial court sentenced him to twenty years in the Institutional Division of
the Texas Department of Criminal Justice for burglary of a habitation and to forty-
five years in the Institutional Division for each count of aggravated robbery with a
deadly weapon to run concurrently. Appellant then filed this appeal.
2
Discussion
In Appellant’s counsel’s motion and brief, he averred that he has
conducted a professional evaluation of the record, and after a thorough review of
the applicable law, has reached the conclusion that there are no arguable
grounds to be advanced to support an appeal of this cause and that the appeal is
frivolous. Counsel’s brief and motion meet the requirements of Anders by
presenting a professional evaluation of the record demonstrating why there are
no reversible grounds on appeal and referencing any grounds that might
arguably support the appeal. See 386 U.S. at 741, 87 S. Ct. at 1398; Mays v.
State, 904 S.W.2d 920, 922–23 (Tex. App.—Fort Worth 1995, no pet.).
Appellant was given the opportunity to file a pro se brief on his own behalf, but he
did not do so. The State did not respond to Appellant’s counsel’s motion.
In our duties as a reviewing court, we must conduct an independent
evaluation of the record to determine whether counsel is correct in determining
that the appeal is frivolous. See Stafford v. State, 813 S.W.2d 503, 511 (Tex.
Crim. App. 1991); Mays, 904 S.W.2d at 923. Only then may we grant counsel’s
motion to withdraw. See Penson v. Ohio, 488 U.S. 75, 82–83, 109 S. Ct. 346,
351 (1988). We have carefully reviewed the appellate record and Appellant’s
appellate counsel’s brief. We agree with his appellate counsel that the appeal is
wholly frivolous and without merit. We find nothing in the record that might
arguably support the appeal. See In re J.T., No. 02-10-00284-CV, 2011 WL
856927, at *1 (Tex. App.—Fort Worth, Mar. 10, 2011, no pet.) (mem. op.) (citing
3
Bledsoe v. State, 178 S.W.3d 824, 827 (Tex. Crim. App. 2005)). Therefore, we
grant Appellant’s appellate counsel’s motion to withdraw and affirm the trial
court’s judgments.
Conclusion
Having granted the motion to withdraw by Appellant’s counsel, we affirm
the trial court’s judgments.
LEE GABRIEL
JUSTICE
PANEL: LIVINGSTON, C.J.; DAUPHINOT and GABRIEL, JJ.
DO NOT PUBLISH
Tex. R. App. P. 47.2(b)
DELIVERED: November 7, 2013
4
|
147 F.3d 460
79 Fair Empl.Prac.Cas. (BNA) 37, 74 Empl.Prac. Dec. P 45,578Carolyn S. WATTS, Plaintiff-Appellant,v.The KROGER COMPANY; Arthur Bullington, Defendants,The Kroger Company, Defendant-Appellee.
No. 97-60077.
United States Court of Appeals,Fifth Circuit.
Aug. 4, 1998.
Jim D. Waide, III, Victor Israel Fleitas, Waide & Chandler, Grant Moncrief Fox, Fox & Fox, Tupelo, MS, for Watts.
William T. Siler, Jr., Aubry Matt Pesnell, Phelps Dunbar, Jackson, MS, for Defendant-Appellees.
Barbara L. Sloan, Washington, DC, for Equal Employment Opportunity Commission, Amicus Curiae.
Appeal from the United States District Court for the Northern District of Mississippi.
Before HIGGINBOTHAM and STEWART, Circuit Judges, and WALTER,* District Judge.
STEWART, Circuit Judge:
1
Carolyn Watts appeals the district court's grant of the Kroger Co.'s ("Kroger's") Motion for Summary Judgment as well as its partial grant of Kroger's Motion to Strike. Watts filed suit in district court alleging sexual harassment and retaliation against Kroger and Arthur Bullington, her supervisor, individually. Watts appeals the district court's decision, urging that there are genuine issues of material fact which merit a trial in the matter. Finding no error, we AFFIRM.
I.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
2
Carolyn Watts began her employment with the Kroger Co. ("Kroger") in February 1990 as a part-time employee in the flower shop of the company's Southaven, Mississippi grocery store. Sometime thereafter, she moved to the produce department where she continued to work on a part-time basis. Beginning in March 1994, Watts began working as a full-time produce clerk. Watts' supervisors in the produce department were John Moore, Glen Rice, and Arthur Bullington, respectively.
3
Watts claims that upon Bullington's arrival at the store in 1993, he subjected her to "an invidious campaign of sexual harassment." Specifically, Watts alleges that Bullington made inappropriate jokes both to and about her, continually made sexual innuendos to her, and that he once grabbed her buttocks as well as touched her on several other occasions.
4
Watts insists that Bullington's harassment intensified in the spring of 1994. She claims that Bullington began following her through the store calling her a "homewrecker" and saying that she was "homeless" in front of other employees, vendors and customers.1 Bullington admits to making such comments.
5
In response to the increased harassment, Watts met with Kroger Store Manager Ricky Hayles to complain about Bullington on July 7, 1994. Watts was crying and was otherwise visibly upset during the meeting. She told Hayles that Bullington was making comments about her personal life and that she wanted the conduct stopped. Hayles allegedly spoke to Bullington that same day and told him to stop. Kroger claims that after this meeting, Bullington never again made any sexual comments to Watts and that Watts was never again subjected to any sexual advances.
6
Watts claims that though Hayles spoke to Bullington, Hayles did not notify the Human Resources Department about the situation. Watts suggests that within a week of her complaint to Hayles about Bullington, her work schedule was altered. She and Bullington had arranged her schedule to allow Watts to work a second job at Federal Express. Watts claims that her schedule was altered to such an extent that she was forced to give up her position at Federal Express.
7
On July 19, 1994, Watts filed a union grievance alleging sexual harassment. She insists that the store manager was immediately provided a copy of the grievance and understood that human resources would have known about her allegations. Still, Humbles claims not to remember whether he was notified of the grievance promptly. He appears not to have begun an investigation into such matter until at least September 1994. Kroger investigated the complaint, but determined that Watts had not substantiated her claim of sexual harassment. Despite this finding, Kroger verbally reprimanded defendant Bullington and offered to transfer him or Watts to another store. Kroger also offered to transfer the plaintiff to another department within the Southaven store. Watts filed a complaint with the Equal Employment Opportunity Commission ("EEOC") on November 2, 1994 alleging that Bullington sexually harassed her by subjecting her to a hostile work environment. In addition, she claimed Bullington and Kroger management retaliated against her in violation of Title VII. Watts then filed suit in federal court making those same allegations along with claims under state law.
II.
KROGER'S MOTION TO STRIKE
8
We first address Watt's challenge that the district court erred in granting Kroger's Motion to Strike several unsworn statements submitted by Watts. Watts attached to her Motion in Opposition to Summary Judgment several handwritten statements that she had collected from her co-workers. The statements were signed, but were not sworn, notarized, or in the form of affidavits. The district court held that the statements were not competent summary judgment evidence for the purposes of Fed.R.Civ.P. 56(e), and that the statements did not comply with federal requirements for unsworn declarations.
9
The district court relied on the decision in Duplantis v. Shell Offshore, Inc., 948 F.2d 187 (5th Cir.1991) to reject the statements Watts presented. In Duplantis, this court noted "that a plaintiff must respond to an adequate motion for summary judgment with admissible evidence." Id. at 191. Watts argues that if the touchstone for consideration is the ultimate admissibility of the evidence, the district court erred by not considering the statements at all. Offering no support from the Federal Rules of Evidence or relevant case law, she suggests that the documents were authenticated through her affidavit and properly relate admissions made by Bullington and others. She further argues that to ignore such evidence would amount to a "grave injustice" on the part of this court.
10
This court reviews the district court's decision to strike lay opinion testimony under an abuse of discretion standard. Pedraza v. Jones, 71 F.3d 194, 197 (5th Cir.1995). We hold that the district court did not abuse its discretion in striking the statements. Because the statements were unsworn and were not presented to the court in a form required by Rule 56 we cannot say that the district court acted outside of its boundaries. Though Watt's argument that such a conclusion elevates form over substance may be intellectually compelling, it is of no practical merit to this court. Rule 56 clearly prescribes the manner in which such documents must be presented to the court. Without support for her argument that the statements are nonetheless admissible, we find Watts' contention groundless.
III.
11
ACTUAL AND CONSTRUCTIVE NOTICE OF SEXUAL HARASSMENT
12
Noting at the outset that a district court's grant of a summary judgment motion is reviewed de novo, Hirras v. National R.R. Passenger Corp., 95 F.3d 396, 399 (5th Cir.1996), we now turn to the remainder of Watts' claims.
13
Watts first challenges the district court's finding that she failed to produce evidence that Kroger had actual notice of Bullington's alleged harassment prior to July 19, 1997the date that she made a formal sexual harassment complaint to her union. Watts suggests that Kroger received actual notice of the alleged harassment from two people. First, Watts argues that in her opposition to summary judgment, she offered a statement from a coworker, Patricia Rippee, which indicated that on two occasions prior to July 7, 1994, Rippee informed Hayles of the verbal abuse and harassment directed by Bullington towards Watts. Second, Watts argues that "[i]t is undisputed that Bullington was Mrs. Watts' immediate supervisor and exercised control over the conditions of her employment." She concludes that as such, Bullington's knowledge of his own harassing conduct can be imputed to Kroger. The district court found that no genuine issue of material fact existed as to Kroger's actual notice because Watts had failed to produce any admissible evidence of actual notice of harassment by Watts to Kroger.
This court has held that:
14
To maintain a workplace sexual harassment claim, the claimant must show that (1) she belongs to a protected class; (2) she was subject to unwelcome sexual harassment; (3) the harassment was based on sex; (4) the harassment affected a term, condition, or privilege of employment (i.e., that the harassment was sufficiently pervasive or severe to create an abusive work environment); and (5) the employer knew or should have known of the harassment and failed to take prompt remedial action.
15
Hirras, 95 F.3d at 399 (citing Jones v. Flagship Int'l, 793 F.2d 714, 719-20 (5th Cir.1986), cert. denied, 479 U.S. 1065, 107 S.Ct. 952, 93 L.Ed.2d 1001 (1987)). Watts' argument focuses on the fifth essential element of the claim.
16
With respect to Rippee's unsworn statement, we find that it is not competent summary judgment evidence and cannot be used to create a genuine issue of material fact. Thus, we hold that the district court properly refused to consider it. In response to Watt's argument that Bullington's knowledge of his own harassing conduct can be imputed to Kroger, we find that Watts has waived this argument because she did not present it to the district court. In Nissho-Iwai Co., Ltd. v. Occidental Crude Sales, Inc., 729 F.2d 1530, 1549 (5th Cir.1984), this court held that an issue raised for the first time on appeal should only be considered if: (1) it involves a purely legal question, and the failure to consider the issue would result in a miscarriage of justice. The Nissho-Iwai court held that if an argument would have involved factual issues if raised at trial, the court should decline to address the contention on appeal. Id. Because an imputed knowledge determination would turn upon whether Bullington was Kroger's agent for Title VII purposes, we conclude that it is necessarily a factual determination which should have been made before the trial court.
17
Watts also argues that Kroger had constructive notice of sexual harassment because the harassment was so pervasive. This court has held that liability may be imposed upon an employer for the discriminatory acts of an employee only if the employer knew or should have known of the employee's offensive conduct and failed to take prompt remedial action. Nash v. Electrospace Sys., Inc., 9 F.3d 401, 404 (5th Cir.1993). The district court concluded that the alleged harassment was not pervasive and that the competent summary judgment evidence presented to the court indicated that no one in a position of authority (other than Bullington himself) had any knowledge of the alleged sexual harassment prior to July 7, 1994. The district court therefore determined that there was no admissible evidence by which a reasonable juror could conclude that Kroger knew or should have known of the alleged harassment before July 7, 1994.
18
Watts invites us to look to our decision in Farpella-Crosby v. Horizon Health Care, 97 F.3d 803 (5th Cir.1996) for guidance in our analysis of her claim. In Farpella-Crosby, this court held that relevant to a determination of whether an employer has constructive knowledge of harassment is whether the conduct "took place in public, under the eye of co-workers and supervisors." Id. at 807 n. 5 (quoting Nash, 9 F.3d at 404). Watts insists that the evidence before the district court demonstrated that Bullington indeed harassed Watts in the presence of Kroger employees, vendors and customers. She maintains that: (1) Bullington called Watts a homewrecker as he followed her around the store; (2) Bullington made jokes to Watts' co-workers about "eating her pie" and having "some meat" for her; and (3) co-workers confirmed that Bullington asked Watts to "check [him], please" (meaning that he wanted Watts to touch his penis). Watts thus insists that there is a genuine issue of material fact regarding whether Kroger had constructive knowledge of Bullington's alleged harassment.
19
Our review of the record reveals that no reasonable juror could conclude that Kroger knew or should have known of the alleged harassment prior to July 7, 1994. Most of the allegedly harassing comments to which Watts' referred are supported only by her own affidavit which claims that Bullington made such comments to her. The only record evidence of allegedly harassing conduct that took place in public is Bullington's comments to Watts about being a homewrecker and homeless. We find, and Watts concedes, that such comments were not sexual in nature. Sex-neutral hostile conduct cannot be used to support a hostile environment claim. Title VII does not protect employees from hostile conduct that is not based on their protected status. Farpella-Crosby, 97 F.3d at 806, n. 2.
IV
PROMPT REMEDIAL ACTION
20
Watts suggests that the district court erred in holding that Kroger took prompt remedial action in response to the alleged harassment after it received Watts' complaint on July 7, 1994. She also argues that Kroger's investigation and subsequent reprimand of Bullington was insufficient to insulate it from liability for hostile work environment sexual harassment. Specifically, she contends that Kroger's investigation was not conducted promptly, nor was its reprimand of Bullington sufficiently severe.
21
While conceding that Kroger did take action against Bullington in response to her complaint, Watts maintains that such action was not harsh enough, and therefore was not remedial in nature. The record indicates that in response to Watts' July 7, 1994 complaint, Hayles spoke to Bullington regarding his alleged actions toward Watts. The record further demonstrates that Watts was never again subjected to any conduct which she considered to be sexual in nature and Bullington never made any further comments of a sexual nature to her. Watts admits that this is correct. We therefore find that Kroger took prompt remedial action to remedy the situation.
22
We have held that prompt remedial action in responding to a hostile work environment claim protects employers from liability for the sexually harassing conduct. Waymire v. Harris County, 86 F.3d 424, 428 (5th Cir.1996). Watts' argument that the remedial measures were not severe enough is unpersuasive. "[T]he effectiveness of the remedial steps is not measured by the extent to which the employer disciplines or punished the alleged harasser ... [but] corrective steps are effective if they stop the alleged harassment." Maher v. Associated Services for the Blind, 929 F.Supp. 809 (E.D.Pa.1996), aff'd 107 F.3d 862 (3d Cir.1997); see also Waymire, 86 F.3d at 429 ("Title VII does not require that the employer use the most serious sanction available to punish an offender, particularly where, as here, this was the first documented offense by [the] individual employee."). That no other, more severe action was taken against Bullington does not defeat the prompt remedial steps that Kroger took in addressing Watts' complaint. When an employer discovers that sexual harassment may have occurred, the employer's remedial action must include appropriate corrective action; that is, the employer must do whatever is necessary to end the harassment and prevent the misconduct from recurring. Dornhecker v. Malibu Grand Prix Corp., 828 F.2d 307, 309 (5th Cir.1987).
23
A review of the record also reveals that once Watts made a complaint alleging sexual harassment on July 19, 1994, Kroger also took prompt remedial action. Watts made this complaint in the form of a union grievance. In response, Kroger Human Resources Manger, Mike Humbles set up a meeting with the union representative and Watts. At that meeting Humbles listened to Watts' complaints. He subsequently conducted an investigation of Watts' sexual harassment allegations which included interviews of other Kroger employees. At the termination of the investigation, Humbles was able to independently verify only that Bullington called Watts homeless and a homewrecker. While Humbles found such comments to be inappropriate and unprofessional, he determined that they did not constitute sexual harassment. Still, Humbles offered to transfer either Bullington or Watts to another store, but both refused to be transferred.
24
Because the record illustrates that Kroger took prompt action to ensure that Watts' concerns were addressed, we find no error by the district court in dismissing Watts' sexual harassment claims.
V
RETALIATION CLAIM
25
Lastly, we consider the district court's dismissal of Watts' retaliation claim. Watts argues that the district court erred when it held that she did not engage in activity protected by Title VII until July 19, 1994. Watts insists that her informal complaints to Bullington about his alleged harassment prior to her meeting with Hayles on July 7, 1994 amounted to protected activity. She further maintains that her July 7, 1994 complaint constituted protected activity. Finally, she argues that Bullington's knowledge of her complaints to him should be imputed to Kroger.
26
For the first time on appeal, Watts argues that her complaints to Bullington prior to July 7, 1994 constituted actions protected by Title VII. Because Watts did not raise this argument in opposition to Kroger's Motion for Summary Judgment, the issue is not properly before us now. Tel-Phonic Services, Inc. v. TBS Int'l, Inc., 975 F.2d 1134, 1142 n. 8 (5th Cir.1992). As for her July 7, 1994 complaint to Hayles, we find that it did not constitute protected activity pursuant to Title VII. Watts herself admits that in her July 7, 1994 complaint, she did not report any sexual harassment and that she did not make any such allegation prior to July 19, 1994. Because the record confirms this fact, the district court was correct in holding that no reasonable juror could find that she was engaged in protected activity prior to July 19, 1994.
27
Watts argues that the district court erred in holding that the alleged actions about which she complained did not rise to the level of adverse employment actions. She suggests that following her July 7, 1994 meeting with Hayles, she was subjected to retaliation. Specifically, she brings to our attention the fact that Bullington changed her work schedule and asked her to perform tasks which she had not previously been asked to perform. She avers that she need not suffer an ultimate employment decision to state a claim for retaliation under Title VII.
28
The district court was correct in its determination that Watts' allegations do not rise to the level of an adverse employment action. Mattern v. Eastman Kodak Co., et al., 104 F.3d 702 (5th Cir.1997). In Mattern, we held that "Title VII was designed to address ultimate employment decisions, not to address every decision made by employers that arguably might have some tangential effect upon these ultimate decisions." Id. at 707. In explaining that the actions Watts complained of did not constitute adverse employment actions, the district court in the instant matter properly defined such acts as including " 'hiring, granting leave, discharging, promoting, and compensating.' " Id. (internal quotation omitted).
29
Watts concedes that neither the change in her schedule nor the new tasks which she was given affected her pay. We have held, along with many of our sister circuits, that employment actions are not adverse where pay, benefits, and level of responsibility remain the same. Id. at 708-10. Thus, our circuit law forecloses Watts' arguments that changes to her job assignments and other alleged acts by Bullington rose to the level of adverse employment decisions.
30
The district court properly focused on an important defect in Watts' retaliation claim: the lack of evidence on the causation element. At the time Kroger allegedly began retaliating against Watts, Kroger did not know Watts had engaged in any protected activity. The district court correctly held that Kroger could not retaliate against Watts for making sexual harassment complaints, because it did not know she had engaged in protected activity. Long v. Eastfield College, 88 F.3d 300, 305 n. 4 (5th Cir.1996). The record bears out that Watts' schedule was changed for the first time on July 17, 1994. She concedes that she did not complain of any alleged sexual harassment until July 19, 1994. Watts' speculation that the such action constituted retaliatory conduct is not sufficient to rebut Kroger's proffered non-discriminatory reason for changing her schedule.
VI
CONCLUSION
31
For the foregoing reasons, we AFFIRM the district court's grant of Kroger's Motion for Summary Judgment.
*
District Judge of the Western District of Louisiana, sitting by designation
1
These comments concern the fact that Watts was allegedly involved in an extramarital affair with Glen Rice--Watt's supervisor from 1990 to 1993, who Bullington replaced as Produce Manager. The "homeless" comment concerns the fact that in May 1994, Watts allegedly moved out of her home and left her husband and children for a period of time
|
J-A28033-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
EDMUND L. HAENIG
Appellant No. 2269 EDA 2013
Appeal from the Order July 15, 2013
In the Court of Common Pleas of Lehigh County
Criminal Division at No(s): CP-39-CR-0000743-1996
BEFORE: GANTMAN, P.J., WECHT, J., and JENKINS, J.
MEMORANDUM BY JENKINS, J.: FILED NOVEMBER 07, 2014
This is an appeal from an order denying Edmund Haenig’s motion to
declare certain provisions of the Sexual Offender Registration and
Notification Act (“SORNA”)1 unconstitutional. Although Haenig’s
circumstances are unfortunate, we are constrained to affirm.
In August 1996, Haenig pled guilty to two counts of corrupting the
morals of a minor (“corruption of minors”)2, a first degree misdemeanor, and
one count of indecent assault without consent3, a second degree
misdemeanor, based on crimes that he committed on December 31, 1993.
The court imposed consecutive sentences of 1½-5 years’ imprisonment on
____________________________________________
1
42 Pa.C.S. § 9799 et seq.
2
18 Pa.C.S.A. 6301(a).
3
18 Pa.C.S.A. 3126(a)(1).
J-A28033-14
each count of corruption of minors plus a consecutive term of 6 months–2
years’ imprisonment for indecent assault, a total of 3½-12 years’
imprisonment. At the time Haenig pled guilty, there was no sexual offender
registration requirement for corruption of minors or indecent assault4.
In May 2007, Haenig pled nolo contendere in Florida to a misdemeanor
charge of disorderly conduct and was sentenced to 60 days of incarceration.
Due to this conviction, on August 30, 2007, the Pennsylvania Board of
Probation and Parole found him in violation of parole in his 1996 case and
sentenced him to nine months’ imprisonment. He was subsequently
released, but his maximum parole date was extended to August 25, 2016.
In December 2011, the legislature enacted SORNA, which became
effective in December 2012. Pursuant to SORNA, certain individuals under
the Parole Board’s supervision must register as sexual offenders. 42 Pa.C.S.
§ 9799.13(2). Moreover, SORNA provides that individuals convicted of, inter
alia, indecent assault and one form of corruption of minors 5 must register as
sexual offenders. 42 Pa.C.S. 9799.14.
____________________________________________
4
See 42 Pa.C.S. § 9793 (enacted October 24, 1995 and repealed effective
July 9, 2000).
5
An individual convicted of corruption of minors under 18 Pa.C.S. §
6301(a)(1)(ii) must register as a sexual offender. 42 Pa.C.S. § 9799.14.
Individuals convicted under other subsections of section 6301 are not
required to register. Id. Haenig asserts that SORNA does not apply to his
convictions under section 6301. Neither the trial court nor the
(Footnote Continued Next Page)
-2-
J-A28033-14
Near the end of 2012, sixteen years after sentencing, Haenig’s parole
officer informed him that SORNA required him to register as a sex offender.
Haenig filed a motion to declare SORNA unconstitutional, which the court
denied after oral argument. Haenig filed a timely appeal and timely
Pa.R.A.P. 1925(b) statement contending that SORNA is unconstitutional
under (1) the Ex Post Facto Clause of the Pennsylvania Constitution 6, (2) the
Due Process Clause of the United States Constitution, and (3) the separation
of powers doctrine embodied in the Pennsylvania Constitution. These
arguments involve questions of law for which our standard of review is
plenary. Commonwealth v. Orie, 88 A.3d 983, 1020 (Pa.Super.2014).
Building upon this Court’s recent decision in Commonwealth v.
Perez, 97 A.3d 747 (Pa.Super.2014), as well as decisions cited in Perez, we
find no merit in Haenig’s ex post facto argument.
In Perez, as in the present case, the defendant committed the offense
of indecent assault prior to SORNA’s enactment. At the time of his offense,
the version of Megan’s Law then in effect required him to register as a sex
offender for 10 years. Under SORNA, which went into effect several months
_______________________
(Footnote Continued)
Commonwealth disputes this assertion; nor is it germane to the issues of
constitutionality raised in this appeal. Therefore, we will assume, without
deciding, that Haenig’s convictions under section 6301 are not subject to
SORNA.
6
Haenig does not contend that SORNA is unconstitutional under the Ex Post
Facto Clause of the United States Constitution.
-3-
J-A28033-14
before he plead guilty to indecent assault, his registration period increased
to 25 years. The defendant filed a motion to declare SORNA unconstitutional
on the ground that the Ex Post Facto Clauses in the federal and state
constitutions prohibited retroactive application of the 25-year registration
requirement to him. The trial court denied his motion and ordered him to
register as a sex offender for the next 25 years. Perez, 97 A.3d at 749.
This Court affirmed. We held, after extensive analysis, that SORNA
does not constitute “punishment” under the multi-factor test articulated in
Kennedy v. Mendoza–Martinez, 372 U.S. 144, 83 S.Ct. 554, 9 L.Ed.2d
644 (1963), and therefore was valid under the Ex Post Facto Clause of the
United States Constitution. Id. at 750-59. Most of the Kennedy factors,
we reasoned, weighed against finding SORNA punitive. We stated: (1)
registration requirements historically are not regarded as punishment,
because individuals subject to SORNA could live and work where they
wished, without supervision; (2) SORNA did not come into play only on a
finding of scienter; (3) although SORNA carries some element of retribution
for past conduct, it primarily is regulatory, in that its goal is to reduce future
misconduct (recidivism); (4) SORNA was rationally related to an alternative
purpose other than punishment, namely the Commonwealth's interest in
preventing crimes of a sexual nature; and (5) it is reasonable to impose
particular regulatory consequences to individuals convicted of specified
crimes. Id. On the other hand, we acknowledged that one factor weighed
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in favor of finding SORNA punitive: it imposed an affirmative restraint by
requiring the defendant to appear 50 times over the next 25 years for in-
person verifications of his personal information. Id. at 752-54. This single
factor, however, did not render SORNA punitive, since
the restraint is relatively minor when balanced
against the remaining factors. . .[T]he greater
restraints imposed by sex offender registration stem
from the public's benefit of said registration and the
consequences that flow therefrom. . .[T]hose effects,
while not insignificant, are merely secondary and
collateral to the requirements themselves.
Id. at 758-59.
Next, Perez rejected the defendant’s ex post facto claim under the
Pennsylvania Constitution:
Article I, Section 17 of the Pennsylvania Constitution
states that ‘[n]o ex post facto law, nor any law
impairing the obligation of contracts, or making
irrevocable any grant of special privileges or
immunities, shall be passed.’ Pa. Const. Art. I, § 17.
This Court has recently held that ‘the standards
applied to determine an ex post facto violation under
the Pennsylvania Constitution and the United States
Constitution are comparable.’ Commonwealth v.
Rose, 81 A.3d 123, 127 (Pa.Super.2013) (en banc).
Our Supreme Court has previously declined to hold
that the Ex Post Facto Clause of the Pennsylvania
Constitution imposes greater protections than Article
I, Section 10 of the Federal Constitution. See
Commonwealth v. Gaffney, 557 Pa. 327, 733 A.2d
616, 622 (1999) (stating that Gaffney ‘failed to
present any compelling reason for our departure
from the standards appropriate for determining
whether an ex post facto violation pursuant to the
federal constitution has occurred and we find no
independent reasons for doing so[ ]’).
-5-
J-A28033-14
It is axiomatic that when presenting a claim for
higher protections under the Pennsylvania
Constitution, the Appellant must discuss the
following four factors:
1) text of the Pennsylvania constitutional provision;
2) history of the provision, including Pennsylvania
case-law;
3) related case-law from other states;
4) policy considerations, including unique issues of
state and local concern, and applicability within
modern Pennsylvania jurisprudence.
Commonwealth v. Edmunds, 526 Pa. 374, 586
A.2d 887, 895 (1991). The Edmunds analysis is
mandatory and a failure to provide it precludes the
consideration of a state constitutional claim
independent of its federal counterpart. See, e.g.,
Commonwealth v. Baker, 621 Pa. 401, 78 A.3d
1044, 1048 (2013) (concluding that Baker's failure
to provide an Edmunds analysis precluded
considering whether Article I, Section 13 of the
Pennsylvania Constitution provided higher
protections that the Eighth Amendment of the
Federal Constitution on cruel and unusual
punishments). . .Here, Appellant's brief does not
include the required Edmunds analysis to consider
whether under this specific statute, the Pennsylvania
Constitution would provide higher ex post facto
protections than Article I, Section 10 of the Federal
Constitution. . .Because we have already resolved his
federal ex post facto claim using framework
promulgated by the United States Supreme Court,
and Appellant does not argue that the Pennsylvania
Constitution provides higher protection, his claim
under the Pennsylvania Constitution likewise fails.
Id. at 759-60.
Since the appellant in Perez failed to provide the required Edmunds
analysis, Perez did not reach the issue of whether SORNA is unconstitutional
-6-
J-A28033-14
under an Edmunds analysis. In this case, Haenig’s brief is rather loosely
organized, but he does manage to address all four parts of the Edmunds
test. Therefore, we reach the merits of Haenig’s argument that SORNA is
unconstitutional under Pennsylvania’s Ex Post Facto Clause.
Edmunds’ first two steps require analysis of the relevant language of
the Pennsylvania Constitution and the history of this text. In Rose, supra,
this Court analyzed the language and history of Pennsylvania’s Ex Post Facto
Clause as follows:
Article I, Section 17 of the Pennsylvania Constitution
is Pennsylvania's ex post facto clause. The
prohibition against ex post facto laws has been part
of Pennsylvania's Constitution since 1790. The clause
reads, ‘No ex post facto law, nor any law impairing
the obligation of contracts, or making irrevocable
any grant of special privileges or immunities, shall be
passed.’ Pa. Const. Art. I, § 17. Similarly, the federal
constitution provides that ‘No State shall ... pass any
Bill of Attainder, ex post facto Law, or Law impairing
the obligation of contracts....’ U.S. Const. Article I, §
10. Our Supreme Court has opined that the ‘same
pre-revolutionary-war concerns shaped the ex post
facto provision of the constitutions of Pennsylvania
and the United States.’ Commonwealth v.
Gaffney, 557 Pa. 327, 733 A.2d 616, 621 (1999).
Accordingly, ‘the standards applied to determine an
ex post facto violation under the Pennsylvania
Constitution and the United States Constitution are
comparable.’ Commonwealth v. Young, 536 Pa.
57, 637 A.2d 1313, 1317 n. 7 (1993);
Commonwealth v. Allshouse, 614 Pa. 229, 36
A.3d 163, 184 (2012).
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J-A28033-14
Id., 81 A.3d at 127. Since the text and history of Pennsylvania’s Ex Post
Facto Clause is much the same as the federal Ex Post Facto Clause, these
factors do not counsel in favor of providing greater protection to defendants
under Pennsylvania’s Ex Post Facto Clause.
The third Edmunds prong requires us to address ex post facto
decisions from other states. We recognize, as did Perez, that several other
jurisdictions have held that retroactive application of their own SORNA
statutes violates the federal and/or state Ex Post Facto Clauses. See Doe v.
State, 189 P.3d 999, 1018 (Alaska 2008); Wallace v. State, 905 N.E.2d
371, 384 (Ind.2009); State v. Letalien, 985 A.2d 4, 24 (Me.2009); Doe v.
Dep't of Pub. Safety and Corr. Servs., 430 Md. 535, 62 A.3d 123, 139
(2013); State v. Williams, 129 Ohio St.3d 344, 952 N.E.2d 1108, 1113
(2011); Starkey v. Dep't of Corr., 305 P.3d 1004, 1030 (Okla.2013).
These courts, however, applied the Kennedy factors to their own SORNA
statutes in a vastly different manner than Perez applied them to
Pennsylvania’s version of SORNA. See, e.g., Wallace, supra (concluding
that six of seven Kennedy factors weighed in favor of finding Indiana’s
SORNA statute punitive). Since we are bound by Perez’s analysis of the
Kennedy factors, the opinions from other jurisdictions on this subject are
only of academic interest.
The fourth and final Edmunds prong requires assessment of policy
considerations that bear upon the question of SORNA’s constitutionality.
-8-
J-A28033-14
Haenig’s discussion of policy considerations boils down to editorial remarks
about the Kennedy factors that fly in the face of this Court’s conclusions in
Perez. For example, Haenig argues that SORNA’s effects are “retribution
and deterrence”. Brief For Appellant, p. 24. Perez, however, holds that
SORNA’s primary purpose is regulatory. Perez, 97 A.3d at 756. At another
point, while acknowledging that SORNA has a rational purpose of protecting
citizens from repeat sexual offenders, Haenig argues that SORNA is overly
punitive because of its tendency to shame sexual offenders by placing their
names on the Internet and to ruin their employment and residency
prospects. Brief For Appellant, p. 25. Perez holds, however, that SORNA is
not overly punitive, because it is “rationally connected to the
Commonwealth's compelling interest in seeking to prevent crimes of a
sexual nature.” Perez, 97 A.3d at 757. Finally, Haenig argues that
SORNA’s measures are “excessive”, Brief For Appellant, p. 26, but Perez
holds that SORNA is not excessive in effectuating its non-punitive objective
of reducing recidivism. Perez, 97 A.3d at 757-58. In short, we do not find
Haenig’s discussion of policy considerations persuasive, since Haenig
repeatedly contradicts Perez’s analysis of the Kennedy factors.
Having reviewed all four Edmunds factors, we conclude that none of
them weigh in favor of finding SORNA unconstitutional under Pennsylvania’s
Ex Post Facto Clause. Thus, Haenig’s first argument on appeal is devoid of
merit.
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J-A28033-14
Haenig’s second argument in this appeal is that SORNA violates his
procedural due process rights. We disagree.
Haenig admits that his procedural due process claim rises or falls on
whether SORNA is primarily punitive in nature. Brief For Appellant, pp. 36-
37. Since Perez clearly holds that SORNA is non-punitive, Haenig’s due
process argument collapses7.
In his third and final argument, Haenig contends that SORNA violates
the separation of powers doctrine embodied in the Pennsylvania
Constitution, because the legislature interfered in SORNA with the judiciary’s
power to sentence defendants. As Perez suggests, SORNA is not a
condition of sentence but is a non-punitive measure that is collateral to the
____________________________________________
7
Haenig’s due process argument refers to Commonwealth v.
Hainesworth, 82 A.3d 444 (Pa.Super.2013) (en banc). Hainesworth held
that the defendant is not required to register as a sex offender when the
Commonwealth makes an explicit promise in a plea agreement that the
defendant need not register. Hainesworth does not apply if there is no
mention in the plea agreement as to whether Megan’s Law requirements
apply. The certified record does not include the notes of testimony from
Haenig’s guilty plea or sentencing hearings, so we cannot tell what, if
anything, was said about Megan’s Law. Consequently, Haenig has waived
his Hainesworth argument. Commonwealth v. Hallock, 722 A.2d 180,
182 (Pa.Super.1999) (it was defendant's responsibility to supply Superior
Court with complete record for purposes of defendant's appeal, and court
could not consider any information which was not contained in certified
record); see generally Pa.R.A.P. 1911, 1921, 1922 (requirements for
composition of record on appeal and inclusion of transcripts in record).
Furthermore, we doubt that anyone mentioned Megan’s Law during Haenig’s
guilty plea or sentencing hearings, since Megan’s Law did not apply to
indecent assault or corruption of minors in 1996.
- 10 -
J-A28033-14
defendant’s sentence. Thus, SORNA does not impede the judiciary’s power
of sentencing.
We understand Haenig’s chagrin at having to register as a sex offender
even though sixteen years elapsed between the date of sentencing and the
date he received notice of his requirement to register. Nevertheless, we find
that the trial court’s order denying his constitutional challenges is correct
under the law.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/7/2014
- 11 -
|
375 F.Supp. 825 (1974)
UNITED STATES of America and Hubert J. Goodrich, Special Agent, Internal Revenue Service, Petitioners,
v.
Thomas F. ZACK, as President, et al., Respondents.
Civ. No. LV-2162 RDF.
United States District Court, D. Nevada.
April 30, 1974.
*826 V. DeVoe Heaton, U. S. Atty., Las Vegas, Nev., for petitioners.
Goodman, Snyder & Gang, Las Vegas, Nev., for respondents.
ORDER DENYING PETITION TO ENFORCE INTERNAL REVENUE SUMMONS
FACTS
ROGER D. FOLEY, Chief Judge.
This is a proceeding under the Internal Revenue Code of 1954, sections 7402(b) and 7604(a) (26 U.S.C. §§ 7402(b) and 7604(a)), to judicially enforce an Internal Revenue Service (IRS) administrative summons of books, records and documents for IRS examination (26 U.S.C. § 7602).
On March 7, 1973, an administrative summons, Treasury Form 2039, was served on Thomas F. Zack, DDS Chartered, and Thomas F. Zack, an individual, *827 as President of the corporation. Both entities are named as respondents in the instant petition. Respondents appeared pursuant to the summons on March 23, 1973, but refused to produce the books or records demanded or to testify fully. The IRS seeks an order directing respondents to testify and produce the data as is required and called for by the terms of the summons. The IRS petition alleges that Special Agent Hubert J. Goodrich, the officer issuing the summons, is participating in an investigation for the purpose of ascertaining the correct federal tax liabilities of the respondent corporation for the years 1970 and 1971.
This alleged civil investigation began after an informant contacted the IRS and conveyed information which was immediately relayed to Special Agent Goodrich, who in turn immediately began an investigation into possible criminal violations of the tax laws by Dr. Zack. After corroborating the fact that a double set of books was maintained in Dr. Zack's office, one for cash payments by patients and one for payments by check, and the possibility that only the check records were used to report taxable income, Special Agent Goodrich obtained a search warrant on March 1, 1973, on the basis that there was probable cause to believe that a violation of 26 U.S.C. § 7201 (attempt to evade or defeat the tax laws) was and had been occurring. On that same day, the records identified in the warrant were seized during a search of Dr. Zack's office by three IRS agents.
Exactly one week after the search warrant had been carried out, Special Agent Goodrich issued the administrative summons. This summons specified that:
"3. Records previously seized on the search warrant on March 1, 1973 need not be produced."
The factual circumstances thus clearly show that the administrative summons is part of, and merely a continuation of, the investigation for which the search warrant was issued.
ISSUE
Under the particular facts of this case, should this Court refuse to enforce the IRS administrative summons?
CONCLUSION
Yes. As discussed below, this Court finds that the facts of this case, and the sequence in which they occurred, indicate that the civil investigative tool of an administrative summons is here sought to be improperly used for the sole purpose of obtaining information in a criminal investigation. It will not, therefore, be judicially enforced.
DISCUSSION
The area of administrative summonses, as utilized by the IRS, has seen extensive litigation and appellant discussion, but this Court has been unable to find, and has not been referred to, any case law dealing with the enforceability of such a summons when it is issued on the heels of a prior search pursuant to a search warrant. To ascertain whether the IRS summons presented should be civilly enforced, then, the Court must delineate not only any relevant considerations that have heretofore been judicially expressed, but also the manner in which the accommodation of concerns for administrative effectiveness of the tax laws and protection of legal safeguards for the individual can most soundly be achieved under the unusual circumstances of this case.
The relatively recent history of the law of administrative summonses or subpoenas embodies a significant shift in judicial approaches to enforcement of such process. Prior to the 1940's, the Supreme Court was firmly against the use of subpoenas for investigations not related to law enforcement. See, e. g., Harriman v. ICC, 211 U.S. 407, 29 S.Ct. 115, 53 L.Ed. 253 (1908); FTC v. Baltimore Grain Co., 267 U.S. 586, 45 S.Ct. 461, 69 L.Ed. 800 (1924); Jones v. SEC, 298 U.S. 1, 56 S.Ct. 654, 80 L.Ed. 1015 (1936). The shift which then occurred is perhaps best seen in a dictum found in Oklahoma Press Pub. Co. v. Walling, *828 327 U.S. 186, 208-209, 66 S.Ct. 494, 505, 90 L.Ed. 614 (1946):
". . . It is not necessary, as in the case of a warrant, that a specific charge or complaint of violation of law be pending or that the order be made pursuant to one. It is enough that the investigation be for a lawfully authorized purpose, within the power of Congress to command."
Thus,
"(f)ormer law that subpoenas were unenforceable unless they related to adjudication or to probable violations of law is now completely superseded; all that is now required is that the investigation be for a lawfully authorized purpose . . ."
(1 Davis, Administrative Law Treatise, § 3.14, p. 230 (West 1958).)
This latter approach is applicable to cases involving an IRS administrative summons. In Reisman v. Caplin, 375 U.S. 440, 449, 84 S.Ct. 508, 513, 11 L.Ed.2d 459 (1964), the Supreme Court stated in dictum that:
". . . the witness may challenge the summons on any appropriate ground. This would include, as the circuits have held, the defenses that the material is sought for the improper purpose of obtaining evidence for use in a criminal prosecution, Boren v. Tucker, 9 Cir., 239 F.2d 767, 772-773 . . . ."
It is interesting to note the full reversal that is evidenced by the above dictum: not only is exercise of the summons power no longer required to be in furtherance of a criminal investigation, but a criminal investigative purpose is considered improper. The broad language of Reisman, however, was quickly narrowed by the interpretations given it in the circuit courts. For example, in Wild v. United States, 362 F.2d 206, 208-209 (9th Cir. 1966), the Ninth Circuit stated:
". . . If the sole objective of an (IRS) investigation is to obtain evidence for use in a criminal prosecution, the purpose is not legitimate and enforcement should be denied. (Citation omitted.)
"If, however, the objective of the investigation is to obtain information which may be utilized in determining whether there is civil liability for a tax or a tax plus penalty, then the summons may be enforced notwithstanding the fact that the information might also be used in a criminal prosecution."
A narrow reading of Reisman was specifically approved by the Supreme Court in Donaldson v. United States, 400 U.S. 517, 533, 91 S.Ct. 534, 545, 27 L.Ed.2d 580 (1971):
"(The Reisman dictum is applicable to the situation) where the sole object of the investigation is to gather data for criminal prosecution . . . This is evident from the fact that the dictum itself embraces the citation of Boren v. Tucker, 239 F.2d 767, 772-773 (CA 9 1956), an opinion in which, at the pages cited, the Ninth Circuit very carefully distinguished United States v. O'Connor, 118 F.Supp. 248 (Mass.1953), a case where the taxpayer already was under indictment. The Reisman dictum is to be read in the light of its citation of Boren, and of Boren's own citation of O'Connor; when so read, the dictum comes into proper focus as applicable to the situation of a pending criminal charge or, at most, of an investigation solely for criminal purposes."
To successfully challenge an IRS summons on the ground that it was issued for an improper purpose, then, a Court must be satisfied that the only purpose of the summons is to further a criminal tax investigation; for it is no defense to an enforcement proceeding that a duality of purposes exists, only one of which is improper. United States v. Bell, 448 F.2d 40, 41-42 (9th Cir. 1971); United States v. Egenberg, 443 F.2d 512, 516 (3rd Cir. 1971); United States v. Held, 435 F.2d 1361, 1364 (6th Cir. 1970); United States v. Stamp, 147 U.S.App.D. *829 C. 340, 458 F.2d 759 (1971), cert. denied, 406 U.S. 975, 92 S.Ct. 2424, 32 L. Ed.2d 675 (1971).
The burden is upon a challenger to prove that there is no proper civil purpose for the summons. See United States v. Ferrone, 438 F.2d 381 (3rd Cir. 1971), cert. denied, 402 U.S. 1008, 91 S.Ct. 2188, 29 L.Ed.2d 430 (1971); United States v. Salter, 432 F.2d 697, 700-701 (1st Cir. 1970); United States v. Vey, 324 F.Supp. 552 (D.Pa.1971); contra, United States v. Rabinovitz, 305 F.Supp. 1218 (D.Wis.1969); United States v. Mothe, 303 F.Supp. 1366 (D. La.1969). This may well be an impossible burden to meet. The IRS is initially aided by the presumption that it is complying with its public duty, "and it cannot be assumed that (IRS agents) will abuse their authority in carrying out the examination (pursuant to an administrative summons)." United States v. First Nat. Bank of Mobile, 67 F.Supp. 616 (D.Ala.1946). And there is a general policy against judicial intervention in the investigative stage of tax matters because of the danger of undue delay in the collection of the revenues. DeMasters v. Arend, 313 F.2d 79, 87 (9th Cir. 1963), cert. denied, 375 U.S. 936, 84 S.Ct. 341, 11 L.Ed.2d 269 (1963). The IRS need give no assurance that records demanded in an administrative summons are unconnected with any criminal investigation, since the IRS may use such a summons if its investigation has both civil and criminal ramifications. United States v. Michigan Bell Telephone Co., 415 F.2d 1284 (6th Cir. 1969). Further, if the summons is issued by an IRS Special Agent, and it is conceded that such an agent principallyif not totallyis assigned to investigate possible criminal violations of the tax laws (see United States v. Mothe, supra, 303 F.Supp. at 1368; Wild v. United States, supra, 362 F.2d at 209), "(i)t is now undisputed that a special agent is authorized . . . to issue an (IRS) summons in aid of a tax investigation with civil and possible criminal consequences." Couch v. United States, 409 U.S. 322, 326, 93 S.Ct. 611, 614, 34 L.Ed.2d 548 (1973). See also United States v. Stribling, 437 F.2d 765, 773 (6th Cir. 1971), cert. denied, 402 U.S. 973, 91 S.Ct. 1661, 29 L.Ed.2d 137 (1971). Finally, even if the burden of showing a proper purpose is imposed upon the Government (see United States v. Powell, 379 U.S. 48, 57, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964); Wild v. United States, supra, 362 F.2d at 208), the Court is confronted with the anomalous general rule that the Government is under no affirmative duty to disclose the nature or extent of its tax investigation (Hoffa v. United States, 385 U.S. 293, 303, 87 S.Ct. 408, 17 L.Ed.2d 374 (1966); Lewis v. United States, 385 U. S. 206, 209, 87 S.Ct. 424, 17 L.Ed.2d 312 (1966); United States v. Stribling, 437 F.2d 765, 773 (6th Cir. 1971)) and the challenger is confronted with circumstances and a body of tax law which allow for almost uncontrovertible assertions by the IRS that a proper civil purpose will be furthered by enforcement of the summons, an assertion that at the very least shifts the burden of showing no proper burden exists onto the challenger.
Implicitly recognizing that administrative agencies have, in conjunction with their increasingly broad discretionary powers, an ever present opportunity for abuse of power, especially where an agency, such as the IRS, combines both investigative and prosecutorial powers, the Courts have been unwilling to construe the heavy burden placed upon one contesting an IRS summons as simply a way of giving carte blanche endorsement to the agency. The Courts have, and vigilantly guard, the power to determine whether an IRS investigation pursuant to a summons is being made in good faith and for one of the authorized purposes, and the power to relieve against oppressive procedures. See, e. g., United States v. Ryan, 320 F.2d 500 (6th Cir. 1963), aff'd, 379 U.S. 61, 85 S.Ct. 232, 13 L.Ed.2d 122 (1964); United States v. Monsey, 429 F.2d 1348, 1351 (7th Cir. 1970); and see Jaffe, The Judicial *830 Enforcement of Administrative Orders, 76 Harv.L.Rev. 865 (1963). The line between a civil and a criminal investigation is of no small import. Because of the potentiality of abuse of power and the substantially more drastic consequences which might ensue, a criminal investigation is subject to constitutional and judicially imposed limits, such as the general requirement of a search warrant which is specific and based upon probable cause, before the privacy and freedom of the individual may be intruded upon. Cf. Donaldson v. United States, supra, 400 U.S. at 536-541 (Douglas, J., concurring). In a civil investigation, however, the needs of the populace as a whole and the reduced threat of encroachment on basic liberties allow for the use of such tools as an administrative summons, which requires minimal particularity, only reasonable relevancy to the investigation, and no showing of probable cause. See United States v. Morton Salt Co., 338 U.S. 632, 651-652, 70 S.Ct. 357, 94 L.Ed. 401 (1950); Falsone v. United States, 205 F.2d 734 (5th Cir. 1953), cert. denied, 346 U.S. 864, 74 S.Ct. 103, 98 L.Ed. 375 (1953). Where a duality of purposes truly exists, one civil and the other criminal, concern for administrative effectiveness and judicial reluctance to interfere with valid investigative pursuits have militated against foreclosure of an agency's use of the administrative summons. See, e. g., Wild v. United States, supra, 362 F.2d 206. Nevertheless, mere assertion by the agency that a proper purpose exists cannot be controlling.
". . . Enforcement enlists judicial powers of compulsion which are not automatically invocable . . . The court may not permit its process to be abused . . . Inquiry into circumstances surrounding the original issuance of the summonses may reveal improper purposes which judicial enforcement should not sanction through assistance."
(United States v. Monsey, supra, 429 F.2d at 1351.) (Citations omitted.)
Isolation of a workable criteria with which a meaningful analysis of the circumstances surrounding the issuance of the summons can be made so as to determine whether that issuance was solely to further an improper purpose is in itself formidable. The Courts have refrained from any test which looks to subjective motivations of the agency.
". . . Even were such an intent discoverable, it would be irrelevant, since it is the Justice Department which makes the decision to prosecute the Intelligence Division only makes recommendations and then it is only when such recommendations are `warranted,' after attempting `to encourage and achieve the highest possible degree of voluntary compliance with the internal revenue laws.'"
(United States v. Rutland Hospital, Inc., 320 F.Supp. 583, 585 (D.Vt. 1970).)
Rather, the Courts have sought objective criteria to aid in this inquiry.
The objective approach which has emerged requires the Court to scrutinize the facts for the presence of some action on the part of the agency, or some legal procedure initiated, which is a clear hallmark or signpost of an investigation which in all probability is solely criminal in nature. Thus far, the cases have delineated two such circumstances: (1) criminal indictment and pending criminal prosecution (see, e. g., United States v. Ruggeiro, 425 F.2d 1069, 1070 (9th Cir. 1970), cert. denied, 401 U.S. 922, 91 S.Ct. 868, 27 L.Ed.2d 826 (1971)), and (2) recommendation for criminal prosecution made by a representative of the agency (see Donaldson v. United States, supra, 400 U.S. at 536; United States v. Billingsley, 331 F.Supp. 1091 (N.D.Okla.1971); United States v. Kyriaco, 326 F.Supp. 1184 (C.D.Cal. 1971)). A factor of like significance is present in the instant case. While the procuring of, and carrying out of, a search warrant is not the commencement of a prosecution (Bevington v. United States, 35 F.2d 584 (8th Cir. 1929), cert. *831 denied, 281 U.S. 721, 50 S.Ct. 237, 74 L. Ed. 1140), a search warrant:
". . . may be invoked only in furtherance of public prosecutions. Statutes providing for their issuance and execution are sustained, under constitutional provisions forbidding unreasonable search and seizure, only as a necessary means in the suppression of crime and the detection and punishment of criminals. Search warrants have no relation to civil process or trials and are not available to individuals in the course of civil proceedings, nor for the maintenance of any mere private right . . ."
(4 Wharton's Criminal Law and Procedure, § 1525, p. 125 (1957).)
See also 79 C.J.S. Searches and Seizures, § 63, p. 825. In the present case, the investigation appears wholly criminal in nature. Only an IRS Special Agent has been involved, and his investigation has proceeded from an informant's tip to a personal inquiry for corroboration, to the obtaining of a search warrant based on probable cause to believe that a crime was being committed. Although the investigation by a Special Agent is not sufficient basis for concluding that the sole purpose of the issuance of a summons is improper, it does tend to indicate such a possibility. See Donaldson v. United States, supra, 400 U.S. at 537 (Douglas, J., concurring); United States v. Weingarden, 333 F.Supp. 474 (E.D.Mich.1971). The obtaining of the search warrant, however, provides a clear indication of the purpose of the investigation, for the use of this police weapon is only allowed, like the use of the Grand Jury, in solely criminal investigations. Cf. United States v. Doe, 341 F.Supp. 1350, 1352 (S.D.N.Y.1972) (in discussing an attempted use of the Grand Jury in a civil investigation, the Court stated that even though most areas of law enforcement involve the prospects of both civil and criminal proceedings, "this is no justification for allowing the intentional use of a strictly criminal weapon . . . for the combined purposes.") Special Agent Goodrich illuminated the sole purpose of this investigation, by seeking, obtaining and carrying out a search warrant, no less brightly than if he had recommended criminal prosecution.
It is true that an administrative summons and the information gained thereby may properly be used to obtain a subsequent search warrant if, at the time the summons was enforced, it was in furtherance of at least a dual civil and criminal investigation. See United States v. Ferrone, 438 F.2d 381, 387-388 (3rd Cir. 1971); DiPiazza v. United States, 415 F.2d 99 (6th Cir. 1969), cert. denied, 402 U.S. 949, 91 S.Ct. 1606, 29 L.Ed.2d 119, rehearing denied, 403 U.S. 924, 91 S.Ct. 2221, 29 L.Ed.2d 702. But such are not the circumstances of this case. The summons here presented was issued one week after a search warrant was executed against respondents' premises and records. The summons itself, as noted above, shows the intimate relationship between the warrant and the investigation sought to be pursued via the summons. Enforcement of the summons under these circumstances would be an abuse of judicial process and administrative power.
"To encourage the use of administrative subpoenas as a device for compulsory disclosure of testimony to be used in presentments of criminal cases would diminish one of the fundamental guarantees of liberty. Moreover, it would sanction perversion of a statutory power."
(United States v. O'Connor, 118 F. Supp. 248, 251 (D.Mass.1953).)
Because the IRS administrative summons is sought to be used solely for the improper purpose of furthering a criminal investigation, and therefore its enforcement must be denied, this Court need not reach the remaining issues presented by respondents.
The Government's petition is hereby denied.
|
478 F.Supp.2d 164 (2007)
In re PHARMACEUTICAL INDUSTRY AVERAGE WHOLESALE PRICE LITIGATION.
This document relates to: State of California, ex rel. Ven-A-Care of the Florida Keys, Inc., Plaintiff,
v.
Abbott Laboratories, Inc., et al., Defendants.
MDL No. 1456, Civil Action No. 03-11226-PBS, Master File No. 01-12257-PBS.
United States District Court, D. Massachusetts.
March 22, 2007.
*165 *166 Julie B. Brennan, Manchel & Brennan, P.C., Newton, MA, for United Healthcare, Inc. & United HealthCare Insurance Company.
Charles Barnhill, Miner, Barnhill & Galland, Madison, WI, for Commonwealth of Kentucky, and State of Illinois.
Steven E. Bizar, Buchanan Ingersoll, P.C., Philadelphia, PA, for Amerisource-Bergen Corporation.
Jeffrey B. Aaronson, Bell, Boyd & Lloyd, Anthony J. Anscombe, Sedgwick Detert Moran & Arnold, Violeta I. Balan, Mayer, Brown, Rowe & Maw LLP, Melanie Matison Brown, Sedgwick Detert Moran & Arnold, Chicago, IL, Marc E. Ackerman, Harris Beach LLP, Kevin N. Ainsworth, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Melissa Aoyagi, Davis Polk & Wardwell, Jennifer Aurora, Sedgwick, Detert, Moran & Arnold LLP, Edwin Baum, Proskauer, Rose Law Firm, Sheila L. Birnbaum, Skadden, Arps, Slate, Meagher & Flom, Elise M. Bloom, Proskauer, Rose Law Firm, William P. Campos, Sedgwick, Detert, Moran & Arnold LLP, William F. Cavanaugh, Jr., Patterson, Belknap, Webb & Tyler LLP, New York, NY, Joseph G. Adams, Snell & Wilmer *167 LLP, Neil Alden, Bowman and Brooke LLP, Martin A. Aronson, Morrill & Aronson, Curtis Bergen, Bowman and Brooke LLP, Donald Wayne Bivens, Meyer Hendricks & Bivens PA, Phoenix, AZ, Pamela Zorn Adams, Sherin and Lodgen LLP, Christopher K. Barry-Smith, Office of the Attorney General, Jessica Vincent Barnett, Foley Hoag LLP, Brandon L. Bigelow, Bingham McCutchen LLP, Scott A. Birnbaum, Birnbaum & Godkin, LLP, Robert P. Blood, Goodwin Procter LLP, Michael P Boudett, Foley Hoag LLP, Douglas S. Brooks, Kelly, Libby & Hoopes, PC, Brett R. Budzinski, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA, Kenneth W. Africano, Harter, Secrest Law firm, Mitchell J. Banas, Jr., Jaeckle Fleischmann & Mugel LLP, Elizabeth M Bergen, Gibson, McAskill Law Firm, Ann M. Campbell, Brown & Tarantino, Marco Cercone, Rupp, Baase, Pfalzgraf & Cunningham, Buffalo, NY, Justin S. Antonipillai, Arnold & Porter, Pamela J. Auerbach, Kirkland & Ellis LLP, N.W. Washington, DC, Scott A. Barbour, McName, Lochner, Titus & Williams, Albany, NY, Steven F. Barley, Hogan & Hartson, LLP, Baltimore, MD, S. Paul Battaglia, Bond, Schoeneck & King PLLC, Syracuse, NY, Jon Steven Baughman, Ropes & Gray LLP, Stacy D. Belf, Ropes & Gray LLP, Jason Bruno, Dickstein Shapiro Morin & Oshinsky LLP, JonMarc P. Buffa, Sonnenschein Nath & Rosenthal LLP, Michelle L. Butler, Hyman Phelps & McNamara PC, Thomas C. Chabanis, Shook, Hardy & Bacon L.L.P., Washington, DC, P. Ryan Beckett, Butler, Snow, O'Mara, Stevens & Cannada, Neville H. Boschert, Watkins, Ludlam, Winter & Stennis, P.A., Felix Lee Bowie, III, Davidson, Bowie & Sims, PLLC, Roy D. Campbell, III, Bradley, Arant, Rose & White, LLP, Jackson, MS, Lawrence D. Berger, Ballard, Spahr, Andrews & Ingersoll, LLP, Philadelphia, PA, Mark A. Berman, Hartmann Doherty Rosa & Berman, LLC, Hackensack, NJ, Sam B. Blair, Jr., Baker, Donelson, Bearman, Caldwell, & Berkowitz, P.C., Memphis, TN, Lynn M. Blake, Freidman, Hirschen Law Firm, Albany, NY, Jack B. Blumenfeld, Morris, Nichols, Arsht, & Tunnell, Wilmington, DE, George Ian Brandon, Sr., Squire Sanders & Dempsey, LLP, Phoenix, AR, Raymond L. Brown, Brown, Buchanan & Sessoms, PA, Pascagoula, MS, Daniel Jerome Buckley, Vorys Sater Seymour & Pease, James Eugene Burke, Keating Muething & Klekamp, Cincinnati, OH, Richard O. Burson, Ferris, Burson & Entrekin, PLLC, Laurel, MS, Kathleen T. Carter, Ward, Norris, Heller & Reidy, Rochester, NY, Tod S. Cashin, Buchanan Ingersoll, PC, Princeton, NJ, Brent Caslin, Kirkland & Ellis LLP, Los Angeles, CA, for Defendants/Consolidated Defendants.
C. Jarrett Anderson, Austin, TX, Gary L. Azorsky, Berger & Montague, PC, Terrianne Benedetto, Susan Aaronson, Kline & Specter, P.C., Anthony Bolognese, Bolognese & Associates, Philadelphia, PA, Rebecca Bedwell-Coll, Mascone, Emblidge & Quadra, San Francisco, CA, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Jeniphr Breckenridge, Hagens Berman Sobol Shapiro, LLP, Seattle, WA, David J. Bershad, Milberg Weiss Bershad, Hynes & Lerach LLP, Michael M. Buchman, Milbert, Weiss, Bershad, Hynes & Lerach, LLP, Chris Chapman, Weitz & Luxenberg, James P. Carroll, Jr., Kirby McInerney & Squire, New York, NY, Ali Bovingdon, Helena, MT, James J. Breen, The Breen Law Firm, P.A., Alpharetta, GA, Thomas W. Breidenstein, Barrett & Weber, Stanley M. Chesley, Waite, Schneider, Bayless & Chesley Co., LPA, Stanley Morris Chesley, Waite, Schneider, Bayless & Chesley, Cincinnati, OH, Charlie Bridgmon, McCutchen, Balnton, *168 Rhodes & Johnson, Susan F Campbell, McCutchen Blanton Johnson and Barnette, Columbia, SC, John Anthony Bruegger, Simmons Cooper, Alton, IL, Nicole Y. Brumsted, Lieff Cabraser Heimann & Bernstein, LLP, Boston, MA, William F. Burns, Glassman Edwards Wade & Wyatt, PC, Memphis, TN, Robert B. Carey, Hagens Berman Sobol Shapiro PLLC, Phoenix, AR, Clinton C. Carter, Beasley Allen Crow Methvin Portis & Miles PC, Montgomery, AL, for Plaintiffs/Consolidated Plaintiffs.
Susan Hughes Banning, Hemenway & Barnes, Boston, MA, for Movant.
MEMORANDUM AND ORDER
SARIS, District Judge.
I. INTRODUCTION
This case involves a qui tam action brought by relator-plaintiff Ven-A-Care of the Florida Keys, Inc., a pharmacy licensed to dispense prescriptions drugs and pharmaceutical products, on behalf of the State of California against thirty-nine defendant pharmaceutical companies,[1] alleging that these defendants violated the California False Claims Act, Cal. Gov't Code § 12650 et seq. (2006).
Collectively, the defendants have moved to dismiss every claim in the First Amended Complaint-in-Intervention pursuant to Fed.R.Civ.P. 12(b)(6) and Fed.R.Civ.P. 9(b). In addition, several defendants have moved separately to dismiss the claims as they specifically relate to them; only one of these motions is addressed in this opinion. After oral argument on these motions, this Court ALLOWS, in part, and DENIES, in part, the joint motion to dismiss the First Amended Complaint-In-Intervention ("FAC"). Abbott Laboratories' separate motion to dismiss is DENIED.
II. BACKGROUND
A. Medi-Cal and Drug Pricing
Medi-Cal is California's version of Medicaid, a joint federal-state health benefits program for the poor, needy, elderly, and disabled. The Medi-Cal program serves as the main source of health insurance for about 6.5 million Californians, draws nearly $19 billion in federal funds into the state's health care system, and accounted for fourteen percent of California's General Fund spending in fiscal year 2005-2006. Medi-Cal is the largest state-run Medicaid program in terms of people served, the second largest in terms of dollars spent, and the primary source of health coverage for one in six Californians under 65, one in four of the state's children, and the majority of Californians living with HIV/AIDS.
California administers Medi-Cal through two systems: a fee-for-service plan and a managed care plan. See Cal. *169 Wel. & Inst.Code § 14016.5 (2006). Under the traditional, fee-for service program, California reimburses providers a certain amount for each service they perform. In an attempt to control Medi-Cal expenditures, California requires certain Medi-Cal beneficiaries to enroll in a managed care program. See Cal. Wel. & Inst.Code § 14200 et seq. (2006). California contracts with private third parties to administer these managed care plans. These third-party managed care plans establish their own drug formulary and set their own drug reimbursement formulae. Id. Accordingly, the allegations in the FAC apply only to the fee-for-service program.
As part of the coverage provided to Medi-Cal recipients, California offers prescription drug coverage. Included in this coverage are payments for drug products, including single-source drugs and multisource drugs. In 2002 alone, Medi-Cal spent more than $3.4 billion for drugs on behalf of over 2.65 million Medi-Cal beneficiaries.
The federal Medicaid program, requires state Medicaid programs that provide a prescription drug benefit to beneficiaries, such as Medi-Cal, to reimburse drug providers for their prescription products at the Cost of the Drug Product ("CDP"). CDP is defined as equal to the lower of the Estimated Acquisition Cost ("EAC"), the Federal Allowable Cost, the Maximum Allowable Ingredient Cost ("MAIC") for the standard package size, or the amount billed by the provider. See Cal.Code Regs. Tit. 22, § 51513 et seq. (2006) (discussing how Medi-Cal reimburses drug providers).
For purposes of determining CDP, the EAC for a drug product is set at the Direct Price ("DP") or the Average Wholesale Price ("AWP"), less a fixed percentage.[2] Cal. Wel. & Inst.Code § 14105.45. Beginning in 2004, AWP and DP were defined by statute as:
(2) "Average wholesale price" means the price for a drug product listed in the department's primary price reference source.
(3) "Direct price" means the price for a drug product purchased by a pharmacy directly from a drug manufacturer listed in the department's primary reference source.
Cal. Wel. & Inst.Code § 14105.45(a). AWP was also the pricing benchmark in the federal Medicare statute. 42 U.S.C. § 1995u(0) (West 1998). The definition of "DP," which is unique to California, was governed by Cal.Code Regs. tit. 22, § 51513, which required that California reimburse the dispensing and administration of certain manufacturers' drugs on the basis of DP. Over that period, the text of this regulation provided:
The estimated acquisition cost of all of the drug products manufactured or distributed by a pharmaceutical company listed in paragraph (b) shall be the direct price for a standard package in the Department's primary reference source; or for products not listed in the Department's primary reference source, the direct price listed in the secondary price source; or, if not listed in the secondary price source, the principal labeler's catalogue.
Cal.Code Regs. tit. 22, § 51513.5 (emphasis added). This DP was to be in line with *170 "the price generally and currently paid by providers for a standard package." Cal. Code Regs. tit. 22, § 51513.5(a)(6).
According to federal regulation, EAC represents the government's "best estimate of the price generally and currently paid by providers for a drug marketed or sold by a particular manufacturer or labeler in the package size of drug most frequently purchased by providers." 42 C.F.R. § 447.301 (2006).
The California term Federal Allowable Cost means the price established for a generic drug by the Centers for Medicare & Medicaid Services ("CMS") formerly the Health Care Financing Administration ("HCFA") of the Federal Department of Health and Human Services. Cal. Wel. & Inst.Code § 14105.45(a)(5). The price for generic drugs established by CMS is known generally as the Federal Upper Limit ("FUL"). CMS establishes the FUL, and consequently the Federal Allowable Cost, for some generic drugs based on the lowest price reported by a manufacturer to price reporting services for a particular drug type. Id. As the Federal Allowable Cost and FUL are mathematical equivalents, this memorandum will refer to these terms interchangeably.
The AWP, DP, and FUL are published in various price reporting services, known as compendia, such as First DataBank, a publishing division of the Hearst Corporation. Medi-Cal utilizes First DataBank's publication to determine its reimbursement prices. In order to compile its pricing compendium, First DataBank receives drug pricing information from the manufacturers of the various drugs, and then bases its published pricing data on this information. Thus, the FAC alleges that the drug manufacturers control the prices that are reported by First DataBank. As a result, drug makers can effectively fix the AWP and DP of their own drugs.
In particular, this pricing scheme allows drug manufacturers to set reimbursement prices to levels well above the providers' acquisition costs. The difference between the CDP of a prescription drug and the drug's actual acquisition cost, is referred to as the drug's "spread." By inflating the prices provided to First DataBank, and thus pumping up the CDP of the drug, pharmaceutical manufacturers increase a drug's spread. Plaintiff alleges that this increase in spread consequently magnifies a drug's profitability to the financial benefit of the drug providers, like pharmacies and doctors who prescribe and administer these drugs.
B. Procedural History
Relator-plaintiff filed the instant suit under seal in July 1998 under the qui tam provisions of California's False Claims Act. See Cal. Gov't Code § 12652(c). On August 13, 2002, while the action was still under seal, Ven-A-Care filed an amended complaint, which alleged that pharmaceutical companies caused Medi-Cal to overpay for drugs. On January 3, 2003, the Attorney General filed a notice of partial intervention against three defendants, Abbott Laboratories, Wyeth, Inc., and one of Wyeth's corporate affiliates, which removed the action to the United States District Court for the Central District of California. In June 2003, while a motion to remand the case to California's state court was pending, the Judicial Panel on Multidistrict Litigation transferred the action to this Court as part of this Court's ongoing MDL. On September 18, 2003, this Court denied the motion for remand and advised California that it had six months to decide whether to intervene on the still-sealed portions of the complaint.
On August 25, 2005, California filed the FAC against thirty-nine defendants, alleging five counts: that the defendants knowingly *171 caused providers to submit false claims to Medi-Cal, in violation of Cal. Gov't Code § 12651(a)(1) (Count I); that defendants knowingly caused false records or statements to be used by Medi-Cal to pay false claims submitted by. providers, in violation of Cal. Gov't Code § 12651(a)(2) (Count II); that defendants were beneficiaries of submissions of false claims to Medi-Cal; subsequently discovered the falsity of the claims, yet failed to disclose the false claims to California within a reasonable time, in violation of Cal. Gov't Code § 12651(a)(8) (Count III); that defendants violated the California anti-kickback statute, Cal. Welf. & Inst.Code § 14107.2, which, in turn, caused providers to submit false claims, in violation of Cal. Gov't Code § 12651(a)(1) (Count IV); and that defendants violated the California anti-kickback statute, which, in turn, caused false records or false statements to be used by Medi-Cal to pay false claims submitted by providers, in violation of Cal. Gov't Code § 12651(a)(2) (Count V).
III. DISCUSSION
A. Rule 9(b) Specificity
The defendants argue that the entire FAC does not adequately plead the circumstances of fraud with specificity pursuant to Fed.R.Civ.P. 9(b), which mandates that "in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." The underlying purpose of this specificity requirement is:
(1) to place defendants on notice and enable them to prepare meaningful responses to charges of fraud brought against them; (2) to provide defendants with adequate notice of the basis of the claims brought against them, thereby protecting them from unfair surprise; (3) to provide some ground for believing that the suit is not simply a "strike suit"; and (4) to protect defendants from groundless charges which might damage their reputation.
Kuney Int'l, S.A. v. Dilanni, 746 F.Supp. 234, 237 (D.Mass.1990) (citing New England Data Servs., Inc. v. Becher, 829 F.2d 286, 289 (1st Cir.1987)).
Qui tam actions under the federal False Claims Act must comply with Fed. R.Civ.P. 9(b). See United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 232 (1st Cir.2004) ("underlying schemes and other wrongful activities that result in the submission of fraudulent claims are included in the `circumstances constituting fraud or mistake' that must be pled with particularity pursuant to Rule 9(b)."). Rule 9(b) requirements are also applicable to diversity actions brought under California's False Claims Act. See County of Santa Clara v. Astra U.S., Inc., 428 F.Supp.2d 1029, 1036 (N.D.Cal.2006) (applying Fed.R.Civ.P. 9(b) to California False Claims Act claim). As a result, the courts have held that "such pleadings invariably are inadequate unless they are linked to allegations, stated with particularity, of the actual false claims submitted to the government that constitute the essential element of [a False Claims Act] qui tam action." Karvelas, 360 F.3d at 232. The heightened pleading standard of Rule 9(b) "means that a relator must provide details that identify particular false claims for payment that were submitted to the government." Id. The plaintiff must, at a minimum, set forth the "who, what, when, where, and how" of the fraud. United States ex rel. Walsh v. Eastman Kodak Co., 98 F.Supp.2d 141, 147 (D.Mass.2000) (quoting United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir.1997)).
Strict application of the requirements of Rule 9(b) may be relaxed in some *172 circumstances. For instance, an alleged scheme of fraud may involve numerous transactions that occur over a long period of time, and pleading the precise specifics with regard to every instance of fraudulent conduct may be impractical. See Corley v. Rosewood Care Ctr., Inc., 142 F.3d 1041, 1050 (7th Cir.1998) (applying relaxed standard to allegations of fraud in plaintiffs racketeering complaint); see also United States ex rel. Johnson v. Shell Oil Co., 183 F.R.D. 204, 206-07 (E.D.Tex.1998) (collecting cases that apply relaxed standard). Given the sheer volume of drug reimbursements involved in this case, Rule 9(b) will be satisfied if the complaint alleges the basic framework, procedures, and the nature of fraudulent scheme that give rise to California's belief that false claims have been submitted. See United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 20 F.Supp.2d 1017, 1049 (S.D.Tex. 1998) (holding relator satisfied Rule 9(b) by alleging the "basic framework, procedures, the nature of fraudulent scheme, and the financial arrangements and inducements among the parties and physicians that give rise to Relator's belief that fraud has occurred"); see also United States v. Kensington Hosp., 760 F.Supp. 1120, 1125 (E.D.Pa.1991) (requiring government in FCA action to plead only the time-frame, the clinics involved, and the types of kickbacks involved).
The plaintiff has complied with this Court's prior opinion requiring a plaintiff to state the specific drugs sold by each defendant by alleging the fraudulent scheme, specifying the alleged fraudulent AWP figures for each drug, and attaching exhibits to the complaint to demonstrate the spread for each drug. See In re Pharm. Indus. Average Wholesale Price Litig., 321 F.Supp.2d 187, 207 (D.Mass. 2004).
B. Falsity and False Claims
California's False Claims Act, in relevant part, imposes a civil penalty on any party who:
(1) Knowingly presents or causes to be presented `to an officer or employee of the state or of any political subdivision thereof, a false claim for payment or approval.
(2) Knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the state or by any political subdivision. . . .
(8) Is a beneficiary of an inadvertent submission of a false claim to the state or a political subdivision, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the state or the political subdivision within a reasonable time after discovery of the false claim.
Cal. Gov't Code § 12651(a)(1-2, 8) (2006) (emphasis added).
Because the California False Claims Act is modeled after the federal counterpart, California courts have recognized that federal decisions are persuasive as to the meaning of California's law. Am. Contract Servs. v. Allied Mold & Die, Inc., 94 Cal. App.4th 854, 860, 114 Cal.Rptr.2d 773 (Cal. Ct.App.2001) (citing Etcheverry v. Tri-Ag Service, Inc., 22 Cal.4th 316, 320, 93 Cal. Rptr.2d 36, 993 P.2d 366 (2000)).
Not surprisingly, a "false claim" is a required element of a False Claims Act suit. See Am. Contract Servs., 94 Cal. App.4th at 864, 114 Cal.Rptr.2d 773 (affirming a dismissal of a qui tam action for want of a false claim). However, under California law, "the claim itself need not be false but only be underpinned by fraud." City of Pomona v. Superior Court, 89 Cal.App.4th 793, 802, 107 Cal.Rptr.2d 710 (Cal.Ct.App.2001). See also United States *173 v. Rivera, 55 F.3d 703, 709 (1st Cir.1995) (stating that the Federal False Claims Act covers "a false statement made with the purpose and effect of inducing the Government immediately to part with money") (quoting United States v. Neifert-White, 390 U.S. 228, 230, 88 S.Ct. 959, 19 L.Ed.2d 1061 (1968)).
Defendants assert that the claims submitted to the government by providers do not contain any false pricing information because the allegedly inflated AWPs or DPs for defendants' drugs are not included on the claim form submitted to Medi-Cal. Although it is true that the claim form that the providers submit to the state does not require the provider to insert a price for the drug, this fact does not require dismissal of a claim under § 12651(a). Plaintiffs theory is that the drug manufacturers report false prices for a particular drug to MediCal via the publishing compendium knowing full well that the provider will be reimbursed based on that inflated price when he submits his claim to Medi-Cal for a particular drug. (See, e.g., FAC ¶ 36 ("The Defendants reported or caused to be reported false or misleading prices to Medi-Cal by providing false or misleading price information . . . with knowledge that they in turn would utilize such false and misleading price information in determining the AWPs and DPs that were reported to Medi-Cal."); FAC ¶ 42 ("Medi-Cal, through its fiscal agents, approved and paid claims to providers based on the false and inflated representations of prices knowingly reported or caused to be reported by Defendants.")) Thus, although the claim itself may not contain a fraudulent price, it is predicated on an underlying fraudulent pricing scheme. As such, under California law, the allegation that the claim is underpinned by fraud is sufficient.
Next, the defendants argue that AWP and DP are not false because they are defined by state law as the price reported in the drug pricing compendia. Under this view, no matter what price defendants report as the AWP or DP, it cannot be false. As the defendants' emphasize, Cal. Wel. & Inst.Code § 14105.45(a)(2) recites that "Average Wholesale Price" is "the price for a drug product listed in the department's primary price reference source [the compendia]." Likewise, California regulations describe "Direct Price" as the direct price for a standard package in the Department's primary reference source, such as a pricing compendium. Based upon these definitions, the defendants contend that "an AWP or DP listed in the pricing compendia could never be `false' as a matter of law because AWP and DP are defined as what is listed in the pricing compendia." (Def.'s Mem. Supp. Mot. Dismiss 19.)
Plaintiff argues that its reliance on the compendia to determine reimbursement figures does not give the pharmaceutical companies free rein to falsify those numbers. Rather, the state argues the evident purpose of the law is that the state would be directed to rely on this compendium because it would provide "the best estimate of the price generally and currently paid by providers." Cal.Code Regs. tit. 22, § 51513(a).
Plaintiff has the better argument. Defendants' interpretation that they have carte blanche to publish sky-high prices unmoored from the acquisition costs of providers leads to absurd results. Dep't of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd., 128 Cal. App.4th 1195, 1209, 27 Cal.Rptr.3d 766 (2005) (deciding that courts should eschew a narrow or literal reading of a law where such an interpretation would lead to an absurd result); see In re Pharm. Indus. *174 Average Wholesale Price Litig., 460 F.Supp.2d 277, 287 (D.Mass.2006) (holding that "the term `average wholesale price' in the Medicare statute is not a term of art for any price the pharmaceutical industry places in the industry publication and will be construed under the plain language doctrine of statutory construction"); see also Kelly v. United States, 924 F.2d 355, (1st Cir.1991) (stating that "unreasonableness of the result produced by one among alternative possible interpretations of a statute is reason for rejecting that interpretation in favor of another which would produce a reasonable result").
As a fallback, defendants argue that the terms AWP and DP are ambiguous. However, ambiguity does not necessarily foreclose a finding of falsity under the FCA. See United States ex rel. Walker v. R & F Props., 433 F.3d 1349, 1356-57 (11th Cir. 2005) (explaining that ambiguity in the term "incident to the services as a physician" did not necessarily preclude liability). The drug prices alleged by plaintiff cross any reasonably drawn line between estimates which reasonably reflect prices paid by providers and estimates which are so grossly inflated when compared to actual acquisition costs that they are by their very nature fraudulent. See United States v. White, 765 F.2d 1469, 1481 (11th Cir. 1985).
Lastly, the defendants argue that California cannot now successfully recover because it possessed knowledge of the fraud and approved of the defendants' actions. In support of this position, defendants ask this Court to take judicial notice of selected public documents, in particular, a 1996 audit by the United States Department of Health and Human Services Office of Inspector General ("OIG"), which concluded that pharmacies were purchasing drugs at substantial discounts off AWP. Moreover, they show that in 1998, Ven-A-Care filed its complaint under seal disclosing to the state its actual acquisition costs, and yet the state continued to approve claims.
This argument presents a difficult legal question. In some circumstances, the government's "knowledge [of a fraud] effectively negates the fraud or falsity required by the FCA." Am. Contract Servs., 94 Cal.App.4th at 864, 114 Cal.Rptr.2d 773. Some courts have held that governmental knowledge will vitiate a possible FCA claim where "the government knows and approves of the particulars of a claim for payment before that claim is presented." United States ex rel. Durcholz v. FKW Inc., 189 F.3d 542, 545 (7th Cir.1999) (emphasis added). In these instances, "the presenter cannot be said to have knowingly presented a fraudulent or false claim." Id. Thus, there may be "occasions when the government's knowledge of or cooperation with a contractor's actions is so extensive that the contractor could not as a matter of law possess the requisite state of mind to be liable under the FCA." Id.; see also United States ex rel. Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1421 (9th Cir.1991) (holding that knowledge by federal officials may "show that the defendant did not submit its claim in deliberate ignorance or reckless disregard of the truth"). However, government knowledge is not an automatic bar to suit under the FCA. United States ex rel Butler v. Hughes, 71 F.3d 321, 327 (9th Cir. 1995); Shaw v. AAA Eng'g & Drafting, Inc., 213 F.3d 519, 534-535 (10th Cir.2000).
As California alleges it did not know the extent of false drug prices; or approve them, dismissal is inappropriate. See also United States v. Hoyts Cinemas Corp., 380 F.3d 558, 570 (1st Cir.2004) (quoting Lussier v. Runyon, 50 F.3d 1103, 1114 (1st Cir.1995)) ("Rule 201 is applied with some stringency, because accepting disputed factual *175 propositions about a case `not tested in the crucible of trial is a sharp departure from standard practice.'").
C. Presenting a False Claim
The defendants argue that medical providers not the manufacturers submitted the allegedly false claims to the state, and therefore the manufacturers are not liable under the FCA. Counts I and IV of the FAC allege violations of Cal. Gov't Code § 12651(a)(1), which bars an individual or organization from:
(1) Knowingly present[ing] or caus[ing] to be presented to an officer or employee of the state or of any political subdivision thereof, a false claim for payment or approval.
Cal. Gov't Code § 12651(a)(1) (2006) (emphasis added).
Interpreting this provision, California courts have established that the False Claims Act's "reach extends to `any person who knowingly assisted in causing the government to pay claims which were grounded in fraud.'" Pomona, 89 Cal.App.4th at 802, 107 Cal.Rptr.2d 710 (quoting United States ex rel. Marcus v. Hess, 317 U.S. 537, 544, 63 S.Ct. 379, 87 L.Ed. 443 (1943)). In order to state a claim for relief under this law, a plaintiff must allege a causal nexus between the defendants' actions and the resulting harm to the government. For purposes of the FCA, the actions of medical professionals in presenting a claim as part of a drug pricing scheme do not necessarily sever a causal chain. See United States ex rel. Franklin v. Parke-Davis, 147 F.Supp.2d 39, 52 (D.Mass.2001); cf. United States ex rel. Cantekin v. Univ. of Pittsburgh, 192 F.3d 402, 416 (3d Cir. 1999) (applying intervening cause analysis to claim under the FCA). See generally Rodriguez-Cirilo v. Garcia, 115 F.3d 50, 54 (1st Cir.1997) (Campbell, J., concurring) (distinguishing between causation in fact or actual causation and proximate or legal causation).
As alleged, the participation of doctors and pharmacists in the submission of Medi-Cal claims was not only a foreseeable and substantial factor in California's loss, but indeed it was "an intended consequence of the alleged scheme of fraud." Parke-Davis, 147 F.Supp.2d. at 53. As the defendants knew that MediCal calculated its payments based upon prices reported to First DataBank, it is reasonable and foreseeable that an overpayment by the state would necessarily result from such false reporting by doctors. Therefore, the FAC makes sufficient allegations of causation.
D. Beneficiary Claim
The third Count of the FAC alleges a violation of Cal. Gov't.Code § 12651(a)(8), which imposes civil liability on any party who:
(8) Is a beneficiary of an inadvertent submission of a false claim to the state or a political subdivision, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the state or the political subdivision within a reasonable time after discovery of the false claim.
Cal. Gov't.Code § 12651(a)(8) (2006) (emphasis added). Under California case law, the beneficiary can be any individual or organization that receives benefits or money from the state. See Pomona, 89 Cal. App.4th at 802-03, 107 Cal.Rptr.2d 710 (stating that the False Claims Act can create liability even if the defendant is not the immediate recipient of a false claim benefit).
Plaintiff argues that even though the drug manufacturers did not directly receive money from the state coffers, they should be deemed beneficiaries because *176 they financially benefitted when they received a higher market share by promoting their products with the spread. The defendants, the FAC alleges, "understood that a higher spread in their product meant customers would make more money using their product," and they further recognized that "their product would sell over their competitors' whenever their product as compared to competitors offered a higher spread." (FAC ¶ 53.) This pricing scheme, therefore, allowed each defendant to "seize market share and thereby . . . fraudulently increase [its] profits." (FAC ¶ 1.) The question is whether this increased market share resulting from the false price reporting makes a drug manufacturer a "beneficiary of an inadvertent submission of a false claim."
Defendants argue that a beneficiary is the actual recipient of government funds like the Medi-Cal provider, or perhaps the person on whose behalf the payment was made. Under any reasonable interpretation, defendants contend, a "beneficiary" cannot be read as anyone who indirectly benefits from a government payment. The defendants assert that the defendant drug manufacturers are not "beneficiaries" of inadvertent submissions, who "discovered" false claims made to the state.
Plaintiff responds that the False Claims Act should be more broadly read. The False Claims Act is "obviously designed to prevent fraud on the public treasury." S. California Rapid Transit Dist. v. Superior Court, 30 Cal.App.4th 713, 725, 36 Cal. Rptr.2d 665 (1994). As such, this statute "plainly should be given the broadest possible construction consistent with that purpose." Id. Stated otherwise, the False Claims Act "must be construed broadly so as to give the widest possible coverage and effect to the prohibitions and remedies it provides." LeVine v. Weis, 68 Cal.App.4th 758, 764, 80 Cal.Rptr.2d 439 (1998); see also Neifert-White Co., 390 U.S. at 232, 88 S.Ct. 959 (stating that the Federal False Claims Act, upon which the California act is based, is "intended to reach all types of fraud, without qualification, that might result in financial loss to the Government").
While the FCA should be liberally read, plaintiffs claim is a round peg in a square hole. The alleged fraud is that the manufacturers intentionally induced doctors and other providers to submit false claims to get inflated reimbursements. Thus, even if drug manufacturers are considered beneficiaries in a broad sense because they profit from increased market share, these manufacturers cannot be said to be beneficiaries of an inadvertent submission of a false claim they "subsequently discovered." The count is dismissed.
E. Facts Supporting Anti-Kickback Claims (Counts IV and V)
The FAC alleges violations of California's Anti-Kickback statute, which provides that
(b) Any person who offers or pays any remuneration, including, but not restricted to, any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in valuable consideration of any kind either:
(1) To refer any individual to a person for the furnishing or arranging for furnishing of any service or merchandise for which payment may be made, in whole or in part, under [the Medi-Cal program]; or
(2) To purchase, lease, order, or arrange for or recommend the purchasing, leasing or ordering of any goods, facility, service or merchandise for which payment may be made in whole or in part under [the Medi-Cal program],
is punishable upon a first conviction by imprisonment in the county jail for not *177 longer than one year or state prison, or by a fine not exceeding ten thousand dollars ($10,000), or by both the imprisonment and fine. A second or subsequent conviction shall be punishable by imprisonment in the state prison.
Cal. Welf. & Inst.Code § 14107.2(b) (2006).
Under the statute, a "kickback" is defined as "a rebate or anything of value or advantage, with a corrupt intent to unlawfully influence the person to whom it is given in actions undertaken by that person in his or her public, professional, or official capacity." Cal. Welf. & Inst.Code § 14107.2(d) (2006).
Plaintiff alleges that defendants' violations of California's anti-kickback laws constitute violations of the California False Claims Act. Such claims have been permitted under federal law. See McNutt v. Haleyville Med. Supplies, Inc., 423 F.3d 1256, 1257 (11th Cir.2005) ("Because it is undisputed that a violator of the [federal] Anti-Kickback Statute is disqualified from participating in a Medicare program, the government [could] state[ ] a claim, under the False Claims Act, when it alleged that the [defendants] had submitted claims for Medicare reimbursement with knowledge that they were ineligible for that reimbursement.").
The defendants assert that reporting inflated drug prices to the compendia does not constitute an "offer" or "payment" of remuneration to purchasers of pharmaceuticals from defendants. While that assertion may be true, the state also alleges that drug manufacturers emphasized the spread between AWP and acquisition cost by giving doctors direct and indirect covert rebates and discounts in order to induce them to prescribe their drugs. For instance, the FAC alleges generally that "Defendants gave providers contract terms that decreased the price of prescription drugs, such as discounts, rebates, off-in-voice pricing, free goods, charge backs, volume discounts, credit memos, `consulting' fees, debt forgiveness, educational and promotional grants, and other financial incentives given to providers." (FAC ¶ 45.) These special incentives to drug providers were designed, according to the FAC, to augment brand loyalty and boost sales. (FAC ¶ 45.) Typically, these rebates and other special incentives, if paid with corrupt intent, would be paradigm instances of behavior prohibited by anti-kickback legislation. See California v. Duz-Mor Diagnostic Laboratory, Inc., 68 Cal. App.4th 654, 659-660, 80 Cal.Rptr.2d 419 (Cal.Ct.App.1998) (finding that direct payment of commissions to a marketing contractor violates state anti-kickback law); see also Black's Law Dictionary 886 (8th ed.2004) (defining kickback as "a return of a portion of a monetary sum received, esp. as a result of coercion or a secret agreement"). Because the allegations suffice under the FCA, the Court need not address the closer question of whether merely reporting a fraudulent AWP and then marketing the spread without the concomitant offer of rebates would violate the antikickback statute. See Duz-Mor, 68 Cal. App.4th at 664, 80 Cal.Rptr.2d 419 (finding no violation of state Anti-Kickback statute where medical providers offered discounted lab tests to certain groups of patients in order to obtain more patients or to solicit Medi-Cal business because the providers were not actually suffering a loss or offering consideration).
F. Anti-Kickback Preemption
Defendants next move to dismiss Counts IV and V of the FAC, arguing that the federal Anti-Kickback Statute preempts the state law because the federal statute, unlike its California counterpart, contains a "knowing and willful" mens rea requirement and a "safe harbor" provision. *178 Although the plaintiff agrees that the federal Anti-Kickback Statute differs from the California law, the state argues that the defendants cannot establish that federal law has preempted state law through implication.
The federal Medicare Anti-Kickback Statute sanctions any party who
knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person (A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or services . . . or (B) to purchase, lease, order or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item.
42 U.S.C. § 1320a-7b (2006) (emphasis added). In order to establish federal liability under this statute, the government must establish that the individual acted knowingly and willfully. See Duz-Mor, 68 Cal.App.4th at 669, 80 Cal.Rptr.2d 419. In order to establish a willful violation of a statute, the government must prove that the defendant acted with knowledge that his conduct was unlawful. Bryan v. United States, 524 U.S. 184, 192, 118 S.Ct. 1939, 141 L.Ed.2d 197 (1998). Moreover, federal law provides certain `safe harbor' provisions that exclude certain types of payments from being considered illegal remuneration. See 42 U.S.C. § 1320a-7b(b)(3).
Under the Supremacy Clause, a federal law may expressly or impliedly preempt state law. U.S. Const. art. VI, cl. 2 (stating that federal law "shall be the supreme law of the Land"). Only implied preemption is at issue here. This Court must consequently determine if "compliance with both state and federal regulations is impossible" or if "state law interposes an obstacle to the achievement of Congress's discernable objectives." Grant's Dairy-Me., LLC v. Comm'r of Me. Dep't of Agric., Food & Rural Res., 232 F.3d 8, 15 (1st Cir.2000) (citing Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 98, 112 S.Ct. 2374, 120 L.Ed.2d 73 (1992)).
In determining whether California's law has been preempted, this Court assumes "that the historic police powers of the States [are] not to be superceded by . . . Federal Act unless that [is] the clear and manifest purpose of Congress." Id. at 14-15 (citations omitted). This Court also "recognize[s] that federal preemption of a state law is `strong medicine,' and is `not casually to be dispensed.'" Pharm. Research & Mfrs. of Am. v. Concannon, 249 F.3d 66, 75 (1st Cir.2001) (quoting Grant's Dairy, 232 F.3d at 18). This presumption is "especially true when the federal statute creates a program, such as Medicaid, that utilizes `cooperative federalism': `Where coordinated state and federal efforts exist within a complementary administrative framework, and in the pursuit of common purposes, the case for federal preemption becomes a less persuasive one.'" Id. (quoting Wash. Dep't of Soc. & Health Servs. v. Bowen, 815 F.2d 549, 557 (9th Cir.1987)). Indeed, Congress requires states, as part of the federalist Medicaid and Medicare programs, to actively combat fraud. See, e.g., Deficit Reduction Omnibus Reconciliation Act of 2005, Pub.L. No. 109-171, § 6023 (2005) (encouraging the enactment of state false claims acts to combat Medicare fraud).
With this caselaw in mind, this Court turns to the ultimate question of whether California's law interposes an obstacle to the achievement of Congress's discernable objectives. Defendants must show that there manifestly and clearly is an "actual conflict" between the state claims and the federal statute, Concannon, 249 F.3d at *179 76, and that any impediment is "severe," not merely "modest." Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 123 S.Ct. 1855, 1868, 1870, 155 L.Ed.2d 889 (2003).
Plaintiff argues that California's statute does not severely conflict with the federal law. Several California courts have noted that "the California Legislature, when it enacted Welfare and Institutions Code section 14107.2 [the Anti-Kickback Statute], was adopting the federal statutes." California v. Palma, 40 Cal.App.4th 1559, 1566, 48 Cal.Rptr.2d 334 (Cal.Ct.App.1995). However, the statutes are not the same. The federal statute includes a requirement that the conduct be "knowing and willful," but the California statute does not require a specific intent to violate the law. Under the California statute, where the forbidden remuneration takes the form of a kickback, a "corrupt intent to unlawfully influence the person to whom [the remuneration] is given is required." Duz-Mor, 68 Cal. App.4th at 669, 80 Cal.Rptr.2d 419 (citing Cal. Welf. & Inst.Code, § 14107.2, sub. (d)) (emphasis added).
Defendants contend that this different scienter threshold is an actual conflict that requires a finding of preemption. The resolution of this debate is uncertain because California law has different scienter requirements in its anti-kickback law depending on the kind of remuneration. While California has a "corrupt intent" requirement for kickbacks, it does not otherwise require the government to prove a specific intent to violate the law with respect to other kinds of remuneration. Nonetheless, the statute does require the government to prove that the purpose of the payment was primarily for inducement to purchase goods and services. Id.; Cf. United States v. Bay State Ambulance & Hosp. Rental Serv., Inc., 874 F.2d 20, 33 (1st Cir.1989) (holding that the requirement that an amount be paid `to induce' another, found in the Medicare fraud statute, "imposes a second and stronger scienter requirement" than the knowing and willful requirement). It is unclear whether the differing scienter arguments will create an undue impediment to federal objectives.
Defendants point to only one state where the courts have held that conflict between state and federal anti-kickback statutes required preemption. See Flori da v. Harden, 873 So.2d 352, 355 (Fla.App. 2004) (holding that "enforcement of the Florida anti-kickback statute would stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress"). Still, this holding by a Florida state court, which involved a state statute that is somewhat different than the California statute, has been limited by a subsequent decision by the same court. See Florida v. Wolland, 902 So.2d 278, 286 (Fla.App.2005) ("We conclude that notwithstanding the failure of that subsection to contain the term `willfully,' the federal and state enactments regarding false claims are in harmony in purpose and effect, and the charges at issue should not have been dismissed as preempted by federal law."). Another Florida court seems to disagree with Wolland. See Florida v. Rubio, 917 So.2d 383 (Fla.App.2005) (finding the Florida Medicare anti-kickback statute is preempted because its scienter requirement conflicts with the federal scienter requirement). Thus, the law in Florida on the question of preemption is still evolving.
Based on the allegations of actual kickbacks, the Court concludes that no severe conflict exists between scienter requirements in these statutes. As such, California's law has not been preempted at least with respect to this alleged remuneration.[3]*180 On a fuller record, when plaintiff specifies the specific theory of remuneration for each defendant after discovery, the Court reserves the right to revisit the issue.
G. Non-AWP and Non-DP Drug Reimbursement
The defendants contend that the plaintiff has not alleged the necessary causal link with respect to drugs reimbursed on the basis of MAIC or FUL because there is no relationship between these pricing standards and AWP and DP.
CMS determines FULs for certain multiple-source drugs whenever the price compendia indicate there are at least three suppliers of the same therapeutically equivalent drugs. CMS establishes the FUL based on the lowest price reported by the manufacturer to the price reporting services for the particular drug type. (FAC ¶ 31). More specifically, by federal regulation, CMS's FUL price "is based on all listings contained in current editions of published compendia of cost information for drugs available for sale nationally." 42 C.F.R. § 447.332, subd. (a)(1)(ii). Plaintiffs allege that the FUL is formulaically set based on wholesale acquisition cost (WAC), AWP, Direct Price, or other published prices. (FAC ¶ 32). Defendant claims the FUL has nothing to do with a generic drug's AWP or Direct Price; however, they concede that FUL is based on WAC. Plaintiff has adequately specified a spread between the FUL and the actual provider acquisition costs. Thus, the complaint adequately alleges a nexus between the alleged fraudulent reporting of prices to the compendia and the establishment of the FUL.
Defendants argue that the plaintiff has not alleged or established a link between the alleged wrongdoing and the Maximum Allowable Ingredient Cost (MAIC) figure for drug reimbursement. Until September 2002, California law provided that "[DHS] shall base a MAIC on a reference drug brand which is generically equivalent to the innovator brand, and which is manufactured by a company with production capability to meet the statewide needs of the Medi-Cal program for that drug." Cal. Welf. & Inst.Code § 14105.45(b)(1) (2001). Absent any further reimbursement formulae for determining a MAIC, California reimbursed based on AWP less 5 percent for the few drugs classified for reimbursement as MAIC, in accordance with Title 22 of the California Code of Regulations, § 51513. Plaintiff has failed to allege which of the 174 drugs in the exhibits were reimbursed based on AWP.
After 2002, when MAIC was reset at the "mean of the wholesale selling prices of drugs generically equivalent to the particular innovator drug that are available in California from wholesale drug distributors selected by the department," Cal. Welf. & Inst.Code § 14105.45(b)(3)(A) (2003), plaintiff admits that MAIC pricing ceased to be based on prices falsely reported by defendants because California obtained the prices it used to determine the MAIC directly from wholesalers. Consequently, the causal link between the defendants' actions and MAIC was broken in September 2002.
The Court dismisses the FAC as it relates to the drugs reimbursed on a MAIC methodology.
*181 IV. Abbott Laboratories' Individual Motion to Dismiss
Abbott argues that it never made any misrepresentation that "direct price" is anything other than an undiscounted price. Plaintiff responds that the term "direct price" should be construed to mean the price "generally paid by providers."
Prior to 2002, the EAC was set at AWP or "such other price as the Department determines to be the price generally paid by providers for a standard package." Cal.Code Regs. tit. 22, § 51513(a)(6) (emphasis added). In turn, the state's Medi-Cal regulations also provided EAC could be the DP listed for a standard package in the Department's primary price reference source. See Cal.Code Regs. tit. 22, § 51513.5(a).
California alleges that "Defendant ABBOTT knowingly used or caused the use of false statements about the prices of its drug products resulting in Medi-Cal paying grossly excessive, unreasonable and unlawful amounts for Defendant's drugs." (FAC ¶ 50). It offers a massive list of Abbott's drugs, which contrasts the DPs paid by the state to the prices paid by the market participants. (Id. at Ex. A.) For instance, plaintiff alleges that "in 1999 California paid $0.1177 cents per unit of Sodium Chloride of 0.9% solution (NDC XXXXXXXXXXX). The contract price or price at which this product was sold to a Group Purchasing Organization (GPO) was $0.0119 cents per unit. Medi-Cal paid 9.89 times more for this product than did a GPO acting on behalf of its member doctors and/or pharmacists. The reported DP for this product at the time was $0.1177 cents per unit." (Id. at ¶ 52.) As with other Abbott products, the price difference exhibited with this saline solution "demonstrates significant spreads of its drugs." (Id.)
While DP is not a defined term, the Court needs a better record to determine how regulators construed the term and how the industry defined it. See Chevron U.S.A. Inc., v. Natural Res. Def. Council, 467 U.S. 837, 844, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ("considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer"). Again, Abbott's argument that DP should be defined as any price published by Abbott regardless of the true prices actually charged most providers would lead to absurd results.
Next, Abbott contends that California's attempt to regulate the term DP contravenes the dormant commerce clause of the Constitution. California argues that it is exempt from Commerce Clause restrictions because it was acting as a "market participant." See South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 93, 104 S.Ct. 2237, 81 L.Ed.2d 71 (1984) (plurality opinion) ("if a State is acting as a market participant, rather than as a market regulator, the dormant Commerce Clause places no limitation on its activities"); see also Nat'l Foreign Trade Council v. Natsios, 181 F.3d 38, 62-65 (1st Cir.1999) (discussing market participant exception).
The Supreme Court first recognized the domestic market participant exception in Hughes v. Alexandria Scrap Corp., which upheld a state law that imposed extra documentation requirements on out-of-state metal processors seeking to receive bounties from the state for junking cars. 426 U.S. 794, 800-01, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976). The Court reasserted this exception in Reeves, Inc. v. Stake, where the Court upheld South Dakota's decision to sell cement from a state-owned plant only to state residents during a materials shortage. *182 447 U.S. 429, 432-34, 100 S.Ct. 2271, 65 L.Ed.2d 244 (1980).
Nevertheless, "the Supreme Court held that the domestic market participant doctrine has limits." Natsios, 181 F.3d at 63. This market participant exception "is not carte blanche to impose any conditions that the State has the economic power to dictate, and does not validate any requirement merely because the State imposes it upon someone with whom it is in contractual privity." South-Central Timber, 467 U.S. at 97, 104 S.Ct. 2237. The First Circuit has held that a state was not acting as a market participant when it tried to control the price paid for prescription drugs by non-Medicare recipients. Concannon, 249 F.3d at 80 ("Maine is not a market buyer of prescription drugs, except as required by the Medicaid statute. Its citizens will continue to directly purchase prescription drugs as needed. Nothing in the Act makes Maine a market participant."). Here, California is establishing a pricing benchmark for drugs it directly pays for. Because California is acting as a market participant and not a market regulator, the state's actions could not violate the Dormant Commerce Clause.
V. ORDER
The joint motion to dismiss [Docket No. 2047] is ALLOWED as it relates to all drugs for which California paid based on MAIC. The motion to dismiss Count III is also ALLOWED. The remainder of the defendants' joint motion to dismiss is DENIED. Abbott Laboratories's motion to dismiss [Docket No. 2049] is DENIED.
NOTES
[1] Abbott Laboratories, Inc.; Amgen, Inc.; Armour Pharmaceutical Co.; Aventis Behring, L.L.C.; Aventis Pharmaceuticals, Inc.; B. Braun Medical, Inc.; B. Braun of America, Inc.; Baxter Healthcare Corp.; Bedford Laboratories; Ben Venue Laboratories, Inc.; Boehringer Ingelheim Corp.; Boehringer Ingelheim Pharmaceuticals Inc.; Briston-Myers Squibb Company a/k/a Bristol-Myers. Oncology Division/HIV Products; C.H. Boehringer Sohn Grundstucksverwaltung GMBH & Co. KG; Dey, Inc.; Dey, L.P.; EMD, INC.; Geneva Pharmaceuticals Inc.; Gensia Inc.; Gensia Sicor, Inc.; Glaxo Wellcome INC. f/k/a Burroughs Wellcome Co.; GlaxoSmithKline PLC; Hoechst Marion Roussel, Inc.; Immunex Corp.; Lipha, S.A.; McGaw, Inc.; Merck KGaA; Mylan Laboratories, Inc.; Mylan Pharmaceuticals, Inc.; Novartis AG; Pharma Investment, Ltd.; Roxane Laboratories, Inc.; Sandoz, Inc.; Schering-Plough Corp.; Sicor, Inc. f/k/a Gensia Pharmaceuticals, Inc.; Smithkline Beecham Corporation d/b/a GlaxoSmithKline; Teva Pharmaceutical Industries, Ltd.; Warrick Pharmaceuticals Corp.; ZLB Behring.
[2] This memorandum assumes familiarity with the basic concepts underlying AWP and other drug pricing methodologies. For a detailed discussion of these methods of pricing and an overview of the structure of the pharmaceutical industry, see In re Pharm. Indus. Average Wholesale Price Litig., 263 F.Supp.2d 172 (D.Mass.2003); see also In re Pharm. Indus. Average Wholesale Price Litig., 307 F..Supp.2d 196 (D.Mass.2004).
[3] The briefing on the different safe harbor provisions in the federal and state laws was inadequate. The parties dispute, without providing any citation, the content of the California safe harbor provisions. As such, this Court declines to resolve whether the differences between the federal and state safe harbors create a preemption problem for plaintiff.
|
UNPUBLISHED ORDER
Not to be cited per Circuit Rule 53
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
January 13, 2006
Before
Hon. RICHARD D. CUDAHY, Circuit Judge
Hon. DIANE P. WOOD, Circuit Judge
Hon. DIANE S. SYKES, Circuit Judge
No. 04-2662
UNITED STATES OF AMERICA, Appeal from the United States District
Plaintiff-Appellee, Court for the Western District of
Wisconsin
v.
No.03-CR-110-C
TEK NGO,
Defendant-Appellant Barbara B. Crabb,
Chief Judge
ORDER
After the Supreme Court held that the sentencing guidelines are to be
applied only in an advisory fashion, United States v. Booker, 125 S. Ct. 738 (2005),
we ordered a limited remand to determine whether the district court would have
sentenced Ngo differently had it known that it was not bound by the guidelines.
See United States v. Paladino, 401 F.3d 471, 481 (7th Cir. 2005). The district judge
replied that she would have imposed an identical sentence even under advisory
guidelines. We invited the parties to file arguments concerning the reasonableness
of Ngo’s sentence, and after considering both responses, we affirm.
The district court, after determining that Ngo is a career offender, imposed a
sentence of 210 months—the low end of the range of 210 to 240 months. Ngo makes
no argument as to why this sentence might be unreasonable. Instead he argues
No. 04-2662 Page 2
that the “only appropriate remedy for the Booker violation in this case is a remand
for resentencing” and that the sentencing error was plain “regardless of the district
court’s speculation as to what it might have done.” In short, he challenges the
procedure outlined by Paladino. But he has not rebutted the presumption of
reasonableness that applies to a sentence within the properly calculated guideline
range. See United States v. Mykytiuk, 415 F.3d 606, 608 (7th Cir. 2005).
The district court acknowledged, in accordance with our May 3 opinion, that
whether Ngo should be considered a career offender under the guidelines is a close
question in light of the relatedness of the predicate crimes. Upon reconsideration
the district judge has decided that it was indeed appropriate to sentence Ngo as a
career offender. We cannot say that its conclusion is unreasonable given the
advisory nature of the guidelines and, more importantly, Ngo’s failure to offer any
argument on the subject. The district court considered the factors set forth in 18
U.S.C. § 3553(a) and found that the sentence imposed was appropriate in light of
the interests in holding Ngo accountable for the severity of his crimes and
protecting the community from further criminal conduct. We therefore AFFIRM
the judgment of the district court.
|
846 F.2d 753
Ortonv.Dugger*
NO. 87-3674
United States Court of Appeals,Eleventh Circuit.
MAY 03, 1988
Appeal From: M.D.Fla.
VACATED AND REMANDED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 23
|
721 N.W.2d 762 (2006)
Arthur YATES, Beverly Yates, and Yates Kennel, Inc., Appellees,
v.
IOWA WEST RACING ASSOCIATION d/b/a Bluffs Run Casino, and Harvey's Bluffs Run Management Company, Inc., Appellants.
No. 04-0434.
Supreme Court of Iowa.
September 15, 2006.
*764 Donald J. Pavelka, Jr., and Thomas M. Locher of Locher Pavelka Dostal Braddy & Hammers, LLC, Omaha, Nebraska, for appellants.
Jerry Crawford and Jim Quilty of Crawford Law Firm, Des Moines, for appellees.
*763 LAVORATO, Chief Justice.
This action arises out of the defendants' alleged slanderous statements about a greyhound kennel and the defendants' alleged negligence in maintaining its track that allegedly resulted in injuries to the kennel's racing dogs. The defendants appealed from an adverse jury verdict on both claims. The kennel cross appealed, contending that the district court erred in not submitting punitive damages on its negligence claim.
We transferred the case to the court of appeals, which reversed on the appeal, concluding that the district court erred in overruling the defendants' motion for directed verdict on both the slander and *765 negligence claims. Because of its decision on the negligence claim, the court of appeals did not address the cross-appeal.
The kennel filed an application for further review, which we granted. We affirm the court of appeals decision, reverse the district court judgment, and remand the case with directions.
I. Background Facts.
Arthur and Beverly Yates are the owners of Yates Kennel, Inc., an Iowa corporation. Yates Kennel is a greyhound racing dog kennel that operated at Bluffs Run Casino (BRC) in Council Bluffs, Iowa. Iowa West Racing Association (IWRA) is a non-profit corporation and an Iowa statutory dog track licensee. IWRA is the owner of the license to operate Bluffs Run Casino. Harveys BR Management Company, Inc. (Harveys), a Nevada corporation, manages Bluffs Run pursuant to a management agreement with IWRA.
In 1998, 1999, and 2000, Yates Kennel obtained booking contracts with Harveys to have its greyhound dogs participate in greyhound racing meets at Bluffs Run. In 1999 and 2000, there was an increase in the number of injuries and deaths of greyhounds while racing at Bluffs Run. A number of those casualties were to Yates Kennel dogs. Kennel owners, including the Yates, thought the injuries and deaths resulted from the track being too hard in some spots and too soft in other spots.
In 2000 the Yates heard rumors that its kennel would not receive a booking contract for 2001. On November 16, 2000, the Iowa Racing and Gaming Commission (Commission), a state agency that regulates racing in Iowa, held a meeting. Jerry Crawford, an attorney for the Iowa Greyhound Association (IGA), an organization of kennel owners and operators, spoke at that meeting. At the time, Beverly Yates was a director of IGA. In relevant part regarding injuries to the racing greyhounds, the minutes of that meeting reflect the following:
Chair Hansen called on the Iowa Greyhound Association (IGA). Jerry Crawford, legal counsel for the IGA, advised they requested the opportunity to appear before the Commission to discuss the contractual ramifications of the track condition at Bluffs Run Casino (BRC), and more specifically, the contracts between BRC and the kennel owners/operators. He stated that some individuals would consider this to be a private matter between the track as a business and third parties, but feels that thought process ignores the Commission's responsibility as BRC is a regulated business entity. He pointed out that the Commission determines the amount of money BRC is required to pay in purses to the third party kennel operators. Additionally, the Commission is responsible for monitoring the safety of the track conditions at the facility. Mr. Crawford stated that the track condition has been better on some occasions than others, but that it is not necessary to go back any further than the Commission meeting in Clinton when Verne Welch, BRC's general manager, stated that two track records had been set in a one-week period. He indicated the Commission should be concerned as that means the track surface is like asphalt, making it very dangerous for the greyhounds. If the track surface is endangering the safety of the greyhounds, it is creating enormous financial and practical problems for the kennel owners and operators. Mr. Crawford stated that greyhounds are very expensive, and it is difficult for the owners/operators to maintain an active list when they are injuring dogs at a record rate. They are also faced with the economic hardship of replacing those dogs.
*766 As the minutes reflect, Crawford then got into the question of kennel contracts for the year 2001:
At this point, all IGA knows is that some BRC kennel operators have not received a contract for the coming year. Mr. Crawford informed the Commission that the Arthur and Beverly Yates Kennel is one of the operators that has not received a contract offer for 2001. He noted that the Yates kennel has experienced 20 broken legs so far in 2000, and has had between 10-15 additional greyhounds removed from racing due to other race-ending injuries. In terms of dollars won, they are second from the bottom. This year money won in stakes' races were not included in kennel standings, which is a variation from previous years. Mr. Crawford stated that the Yates Kennel did very well in stake races, noting that they had two dogs in the final Iowa Breeders Championship Race. He noted that one of the owners is an officer of the IGA, and BRC has indicated they are critical of them on the topic of the track condition.
Crawford then requested the Commission to
establish a timetable in order to review this matter to determine fairness due to the various issues faced by the kennel operators at BRC. He stressed to the Commissioners that it is the members of IGA, the kennel owners/operators, breeders and trainers, who have suffered the entire financial consequence of what has happened at BRC this year. He questioned whether the Commission should allow these small Iowa-based businesses to suffer the additional financial consequence of being put out of business at BRC.
Crawford asked the Commission to stop the execution of contracts so that "a fair and equitable dismissal clause" that ensures competent performance could be worked out. He also asked that the Commission "not allow BRC to do whatever it chooses to do with regard to kennel contracts."
The Commission then allowed individuals with an opposing view an opportunity to speak. Lyle Ditmars, legal counsel for BRC, responded to the various issues Crawford raised. On one of those issues, timing of the kennel contracts, the minutes reflect that Ditmars stated the following:
Mr. Ditmars stated the timing is the same as last year. BRC established a committee that reviewed several criteria in determining who would be offered contracts: ranking of the kennel by number of wins; win percentage; compliance with contract requirements regarding the active list; compliance with contract requirements regarding the number of active greyhounds classified as A and B; residency of the owner; and contracts with the state of Iowa. He noted there have been instances where the kennel operators resided in Iowa, but did not have any Iowa-bred greyhounds in the kennel. Other factors are the willingness of the operator to use Iowa-bred greyhounds; quality of greyhounds maintained throughout the year; participation by the kennel operator in activities and programs designed to promote, enhance and improve greyhound racing at BRC; whether the kennel operator participated in activities that are potentially harmful to the operation of racing at BRC or other kennel operators; and the kennel operator's compliance with other contract requirements.
Ditmars then made the following comments about the Yates Kennel:
Mr. Ditmars stated that that BRC does not discuss who will or will not get a kennel contract with other kennel operators. *767 Mr. Ditmars confirmed that the Yates Kennel was not offered a contract for 2001, and will not be offered one. In 1999 the kennel was in the bottom two or three kennels in terms of performance. They were given a six-month contract. At the end of that contract, even though they remained in the bottom five, they were given an additional six-month contract to give them an opportunity to correct the situation. At this time, the Yates Kennel is second from last in terms of wins and third from the bottom in terms of win percentage for the year. Mr. Ditmars stated that the decision was not arbitrarily made. He noted that Ms. Yates was on the board of directors of the IGA when they were offered their first kennel contract; Jason Hines was the president of IGA when he was offered a contract; and Bob Rider, who has had two six-month contracts and addressed the Commission regarding issues at BRC last year, was offered a new contract for 2001.
Additionally, in response to a commissioner's question, Ditmars reportedly stated that he denied that any of the criteria established to determine which kennels would be offered contracts for next year were based on retribution for voicing criticism regarding BRC. According to the minutes, Crawford made a number of comments in rebuttal to Mr. Ditmars comments. One such comment included the following: "Mr. Crawford questioned the reasons given for terminating the Yates Kennel when kennels ranked lower than them received contracts for 2001, and over half of the kennels consistently have less than the required number of greyhounds on the active list."
In response to this last comment, the minutes show that Ditmars stated the following: "Mr. Ditmars reiterated that the Yates Kennel is second from last in the kennel standings. The kennel in last place did not receive a six-month contract in the previous year, as did the Yates Kennel due to poor performance in 1999."
According to the minutes, the Commission took no action on Crawford's request. One commissioner "noted that the agenda stated it was to be a discussion of the contractual and financial ramifications of track conditions at BRC." Another commissioner stated that "BRC is a private commercial company contracting with other private commercial companies" and she "could not foresee the Commission getting involved unless something unsavory was taking place." Newspaper reporters present during the meeting wrote newspaper accounts containing some of Ditmars' statements about Yates Kennel.
II. Proceedings.
Six months later, the Yates and Yates Kennel (hereinafter collectively referred to as plaintiffs) sued IWRA and BRC (hereinafter collectively referred to as defendants), alleging a number of theories for recovery, only two of which are relevant to this appeal: slander per se and negligence. As to both theories, the plaintiffs sought compensatory and punitive damages. The plaintiffs alleged that Ditmars' statements before the Commission were slanderous per se. The plaintiffs also alleged that the defendants' negligence in maintaining the dog track caused injuries to its dogs for which it suffered damages.
The parties tried the case to a jury, and the district court submitted for the jury's consideration the slander and negligence claims as well as punitive damages on the slander claim. The court refused to submit punitive damages on the negligence claim. On the slander claim, the jury awarded no compensatory damages but did award punitive damages.
On the negligence claim, the jury found the plaintiffs thirty-three percent at fault *768 and the defendants sixty-seven percent at fault. The jury awarded damages for loss of income, lost value of injured greyhounds, and veterinary expenses.
The defendants appealed both the slander and negligence verdicts. The plaintiffs cross-appealed, contending the district court erred in not submitting punitive damages on their negligence claim. We transferred the case to the court of appeals. The court of appeals reversed on the appeal. Because the court of appeals reversed on the appeal, it did not address the cross-appeal.
We granted the plaintiffs' application for further review.
III. Issues.
Although a number of issues were raised on appeal, we determine that only the following issues require discussion: whether the district court erred in denying the defendants' motion for directed verdict in which the defendants asserted that (1) the alleged slanderous statements in question were true as a matter of law and (2) there was insufficient evidence that the track conditions proximately caused injuries to the plaintiffs' dogs.
IV. Scope of Review.
We review the district court's rulings on motions for directed verdict for correction of errors at law. Estate of Pearson ex rel. Latta v. Interstate Power & Light Co., 700 N.W.2d 333, 340 (Iowa 2005). In reviewing such rulings, we view the evidence in the light most favorable to the nonmoving party to determine whether the evidence generated a fact question. Dettmann v. Kruckenberg, 613 N.W.2d 238, 250-51 (Iowa 2000). To overcome a motion for directed verdict, substantial evidence must exist to support each element of the claim or defense. Id. at 251. Substantial evidence exists if reasonable minds could accept the evidence to reach the same findings. Id.
V. The Defamation Claim: Truth as a Defense.
The first issue we address is whether the district court erred in overruling the defendants' motion for directed verdict on the ground that the alleged slanderous statements were true as a matter of law.
1. Applicable law. The law of defamation includes the twin torts of libel and slander. Schlegel v. The Ottumwa Courier, 585 N.W.2d 217, 221 (Iowa 1998). "Libel is generally a written publication of defamatory matter, and slander is generally an oral publication of such matter." Id. (citation omitted). As we noted in Schlegel,
"[t]he law of defamation embodies the public policy that individuals should be free to enjoy their reputation unimpaired by false and defamatory attacks. An action for defamation or slander is based upon a violation of this right.
The gravamen or gist of an action for defamation is damage to the plaintiff's reputation. It is reputation which is defamed, reputation which is injured, and reputation which is protected by the law of defamation.
Defamation is an impairment of a relational interest; it denigrates the opinion which others in the community have of the plaintiff and invades the plaintiff's interest in the [plaintiff's] reputation and good name."
Id. (quoting 50 Am.Jur.2d Libel and Slander § 2, at 338-39 (1995)).
In Hovey v. Iowa State Daily Publication Board, Inc., we adopted "the view espoused in Restatement (Second) of Torts, section 581A comment f that if an allegedly defamatory statement is substantially true, it provides an absolute defense *769 to an action for defamation." 372 N.W.2d 253, 256 (Iowa 1985). Comment f provides that
many charges are made in terms that are accepted by their recipients in a popular rather than a technical sense. . . . It is not necessary to establish the literal truth of the precise statement made. Slight inaccuracies of expression are immaterial provided the defamatory charge is true in substance.
Restatement (Second) of Torts § 581A cmt. f (1977).
Prior to Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990), as a matter of constitutional law, a statement of opinion was thought not to be defamatory. As the United States Supreme Court stated in Gertz v. Robert Welch, Inc.,
[u]nder the First Amendment there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas. But there is no constitutional value in false statements of fact. Neither the intentional lie nor the careless error materially advances society's interest in "uninhibited, robust, and wide-open debate" on the public issues. They belong to that category of utterances which "are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality."
418 U.S. 323, 339-40, 94 S.Ct. 2997, 3007, 41 L.Ed.2d 789, 805 (1974) (citations omitted); accord Jones v. Palmer Commc'ns, Inc., 440 N.W.2d 884, 891 (Iowa 1989) ("Opinion is absolutely protected under the first amendment."), overruled on other grounds by Schlegel, 585 N.W.2d at 224.
This statement in Gertz was dictum; however, a majority of the federal courts of appeal interpreted this dictum to mean that statements of fact can be actionable defamation but statements of opinion cannot. Guilford Transp. Indus., Inc. v. Wilner, 760 A.2d 580, 596 (D.C.2000). As one court observed,
[b]y this statement, Gertz elevated to constitutional principle the distinction between fact and opinion, which at common law had formed the basis of the doctrine of fair comment. Gertz's implicit command thus imposes upon state and federal courts the duty as a matter of constitutional adjudication to distinguish facts from opinions in order to provide opinions with the requisite, absolute First Amendment protection.
Ollman v. Evans, 750 F.2d 970, 975 (D.C.Cir.1984) (footnotes omitted). The framework of analysis was therefore to determine whether the alleged defamatory statement was fact or opinion.
Because the degree to which alleged defamatory statements have real factual content can vary greatly, the court in Ollman noted "that courts should analyze the totality of the circumstances in which [such] statements are made to decide whether they merit the absolute First Amendment protection enjoyed by opinion." Id. at 979. In evaluating the totality of the circumstances, the court considered four factors in assessing whether the average reader or listener, in contrast to the most skeptical or most credulous reader or listener, would view the statement as fact or opinion. Id. at 979 & n. 16. These factors, the court was convinced, would lead to "a proper accommodation between the competing interests in free expression of opinion and in an individual's reputation." Id. at 978.
*770 Following the lead of many other federal circuit courts of appeals, the eighth circuit adopted this four-factor test in Janklow v. Newsweek, Inc., 788 F.2d 1300, 1302 (8th Cir.), cert. denied, 479 U.S. 883, 107 S.Ct. 272, 93 L.Ed.2d 249 (1986). Relying on Janklow, we adopted the four-factor test in Palmer Communications, Inc., 440 N.W.2d at 891-92.
The first relevant factor is whether the alleged defamatory statement "has a precise core of meaning for which a consensus of understanding exists or, conversely, whether the statement is indefinite and ambiguous." Ollman, 750 F.2d at 979; see also Palmer Commc'ns, Inc., 440 N.W.2d at 891. We characterized this factor as "the precision and specificity of the disputed statement." Palmer Commc'ns, Inc., 440 N.W.2d at 892 (citation omitted).
The second relevant factor is "the degree to which the [alleged defamatory] statements are . . . objectively capable of proof or disproof []." Ollman, 750 F.2d at 981. We related this factor to the first factor and noted that "if a statement is precise and easy to verify, it is likely the statement is fact." Palmer Commc'ns Inc., 440 N.W.2d at 891. In this connection, one writer has defined a factual statement as one that relates to an event or state of affairs that existed in the past or exists at present and is capable of being known. See Ollman, 750 F.2d at 981 n. 22 (citation omitted). This verification factor "is, in actuality, merely one of many rules in tort that prevent the jury from rendering a verdict based on speculation." Id. at 981.
The third relevant factor is the context in which the alleged defamatory statement occurs. Id. "[T]he context to be considered is both narrowly linguistic and broadly social." Id. We characterized this factor as "the `literary context' in which the disputed statement [is] made." Palmer Commc'ns, Inc., 440 N.W.2d at 891. The degree to which a statement is laden with factual content or can be read to imply facts depends upon the article or column, see id., or in this case the whole discussion.
The last relevant factor is "the broader social context into which [the alleged defamatory] statement fits." Ollman, 750 F.2d at 983. Important here are the types of writing or speech in which the statement appears. Id. We likewise characterized this factor as "the social context," and noted that this factor "focuses on the category of publication, its style of writing and intended audience." Palmer Commc'ns Inc., 440 N.W.2d at 891-92 (citation omitted). We also noted that we consider the "`public context' or political arena in which the statements were made." Id. at 892 (citations omitted).
In 1990 the Court in Milkovich rejected this per se approach providing blanket First Amendment protection of all statements of opinion:
[W]e do not think this passage from Gertz [quoted above] was intended to create a wholesale defamation exemption for anything that might be labeled "opinion" . . . . Not only would such an interpretation be contrary to the tenor and context of the passage, but it would also ignore the fact that expressions of "opinion" may often imply an assertion of fact.
497 U.S. at 18, 110 S.Ct. at 2705, 111 L.Ed.2d at 17.
Noting that the Gertz dictum "ignored the fact that expressions of `opinion' may often imply an assertion of fact," the Court gave the following example to support this statement:
If a speaker says, "In my opinion John Jones is a liar," he implies a knowledge of facts which lead to the conclusion that Jones told an untruth. Even if the *771 speaker states the facts upon which he bases his opinion, if those facts are either incorrect or incomplete, or if his assessment of them is erroneous, the statement may still imply a false assertion of fact. Simply couching such statements in terms of opinion does not dispel these implications; and the statement, "In my opinion Jones is a liar," can cause as much damage to reputation as the statement, "Jones is a liar."
Id. at 18-19, 110 S.Ct. at 2705-06, 111 L.Ed.2d at 17-18.
Citing existing law, the Court clarified that only statements regarding matters of public concern that are not sufficiently factual to be capable of being proven true or false and statements that cannot reasonably be interpreted as stating actual facts are absolutely protected under the Constitution. In making this clarification, the Court rejected "the creation of an artificial dichotomy between `opinion' and fact." Id. at 19-20, 110 S.Ct. at 2705-06, 111 L.Ed.2d at 18. In rejecting this dichotomy, the court did not, however, abolish the constitutional protection for opinions. It merely narrowed that protection. Hunt v. Univ. of Minn., 465 N.W.2d 88, 94 (Minn.Ct.App.1991). Thus, the framework of analysis is no longer whether the alleged defamatory statement is fact or opinion. Rather the framework of analysis now is whether the alleged defamatory statement can reasonably be interpreted as stating actual facts and whether those facts are capable of being proven true or false. Under this analysis, "statements of opinion can be actionable if they imply a provable false fact, or rely upon stated facts that are provably false." Moldea v. New York Times Co., 22 F.3d 310, 313 (D.C.Cir.1994). The statement that the plaintiff must prove false is not the literal wording of the statement but what a reasonable reader or listener would have understood the author to have said. Milkovich, 497 U.S. at 16-17, 110 S.Ct. at 2704-05, 111 L.Ed.2d at 16.
Although the Court in Milkovich rejected the dichotomy between fact and opinion as the framework of analysis, we agree with the following:
The test used in Milkovich to identify protected opinions is very similar to the four-factor inquiry used by the circuit courts to distinguish fact from opinion. Specificity and variability are closely related to whether the statement is capable of being proven false. Whether a remark can be reasonably interpreted as stating actual facts must be inferred from the political, literary, and social context in which the statement was made. Given the similarity between the Supreme Court's definition of protected opinion and the circuit courts' fact/opinion analysis, decisions applying the Janklow test are still helpful under Milkovich.
Hunt, 465 N.W.2d at 94; see also Milkovich, 497 U.S. at 24-25, 110 S.Ct. at 2709, 111 L.Ed.2d at 21-22 (Brennan, J., dissenting) (agreeing with the majority's statement of the law but disagreeing with the majority's application of the law to the facts; also noting that among the circumstances a court is to consider in determining whether a statement purports to state or imply actual facts about an individual are the same four factors used to distinguish between statements of fact and statements of opinion first stated in Ollman and adopted in Janklow). We will therefore employ the four-factor test we adopted in Palmer Communications to identify protected opinion under the Milkovich framework of analysis.
A trial court's initial task in a defamation action is to decide whether the challenged statement is "capable of bearing a particular meaning, and whether that *772 meaning is defamatory." Restatement (Second) of Torts § 614(1) (1977); see also Levy v. Am. Mut. Liability Ins. Co., 196 A.2d 475, 476 (D.C.1964) ("It is only when the court can say that the publication is not reasonably capable of any defamatory meaning and cannot be reasonably understood in any defamatory sense that it can rule, as a matter of law, that it was not libelous."). In carrying out this task, a court should not, however,
indulge far-fetched interpretations of the challenged publication. The statements at issue "should . . . be construed as the average or common mind would naturally understand [them]." If the court determines that a statement is indeed capable of bearing a defamatory meaning, then whether that statement is in fact "defamatory and false [is a question] of fact to be resolved by the jury."
Guilford Transp. Indus., 760 A.2d at 594 (citations omitted).
2. The merits. As mentioned, minutes of the Commission meeting on November 16, 2000 reflect that attorney Crawford questioned the reasons given for terminating the Yates Kennel when kennels ranked lower than it received contracts for 2001, and over half of the kennels consistently had less than the required number of greyhounds on the active list. The minutes further reflect that in responding to this comment, attorney Ditmars stated the following: "Yates Kennel is second from last in the kennel standings. The kennel in last place did not receive a six-month contract in the previous year, as did the Yates Kennel due to poor performance in 1999."
Beverly Yates testified Ditmars' statement that "Yates Kennel is second from last in kennel standings" was true. She further testified over hearsay objections that she read newspaper accounts of the Commission meeting stating that Yates Kennel had a poor, noncompetive kennel.
David Ungs testified that he was president of the IGA at the times material to this action. Ungs further testified that in his capacity as president he met with Vern Welch, a representative of Bluffs Run management, some time before the commission meeting on November 16, 1999. In his conversation with Welch, Ungs stated he and Welch discussed the possibility of kennels losing their booking contracts. According to Ungs, Welch stated that Bluffs Run was one of the leading tracks in the country as far as payouts were concerned and that the kennels would need to be more competitive or they would be eliminated. Later at the Commission hearing on November 16, which Ungs attended, Ungs learned that the Yates Kennel's booking contract would not be renewed. He recalled that at the November 16 meeting Ditmars said that Yates Kennel did not receive a booking contract because they were a "substandard or lower kennel."
The plaintiffs contend that the references to Yates Kennel as "substandard and poor performers" as testified to by Beverly Yates and David Ungs were defamatory. For reasons that follow, we disagree.
The issue boils down to whether the Ditmars statement "substandard and poor performers," which is an opinion, implies a provably false fact, or relies upon stated facts that are provably false. Viewing this statement in context, we first note that Ditmars' statement was in response to Crawford's questioning of the reasons given for terminating the kennel's booking contract. Ditmars set out facts (the kennel's ranking compared to other kennels), which signaled to a reasonable listener that his statement "poor and substandard *773 performers" represented a characterization of those facts.
Moreover, "substandard and poor performers" do not have a precise and verifiable meaning and are therefore less likely to give rise to clear factual implications. But even if the words "substandard" and "poor performers" are verifiable, that assessment is supported by stated facts that are true. Cf. Moldea, 22 F.3d at 317 (Assuming statement, contained in review of book reporting on alleged gang connections with professional football, that author had engaged in "too much sloppy journalism," was capable of verification, statement was not defamatory because book review author had supported statement with illustrations from book itself). Ditmars' disclosure of the facts underlying his statement of "substandard and poor performers," facts that Beverly Yates conceded were true, makes this case different from Milkovich. A reasonable reader could conclude that Ditmars was giving his personal conclusion or opinion about those undisputed facts. The reader could further conclude that Ditmars' statement did not imply any provable false fact. See Phantom Touring, Inc. v. Affiliated Publ'ns, 953 F.2d 724, 731 & n. 13 (1st Cir.1992) (Newspaper articles that allegedly falsely accused touring company of deliberate effort to pass off its musical-comedy version as widely acclaimed Broadway show of same name did not constitute actionable defamation because assertion of deceit reasonably could have been understood not as a statement of fact but only as reporter's personal conclusion about information that was presented which was not challenged as false.)
A good example of a statement with a well-defined meaning is an accusation of a crime. See, e.g., Cianci v. New Times Publ'g Co., 639 F.2d 54, 63 (2d Cir.1980) (holding that an article that implied a mayor had committed rape and that charged him with paying the alleged victim not to bring charges was not protected opinion). Clearly, an accusation of a crime is laden with factual content and the facts are easily verifiable. Such was the case in Milkovich. In that case a high school wrestling coach argued that an Ohio newspaper libeled him by printing a column that alleged he had perjured himself in his testimony to a state court concerning his role in an altercation between his team and an opposing team at a wrestling match. The column stated that "Anyone who attended the meet . . . knows in his heart that Milkovich. . . lied at the hearing . . . ." Milkovich, 497 U.S. at 5, 110 S.Ct. at 2698, 111 L.Ed.2d at 9. The Court rejected the argument that an accusation of perjury was nonactionable merely because it was offered as the writer's opinion. Id. at 21, 110 S.Ct. at 2707, 111 L.Ed.2d at 19. The Court noted that "the connotation that the petitioner committed perjury is sufficiently factual to be susceptible of being proved true or false . . . . `Unlike a subjective assertion the averred defamatory language is an articulation of an objectively verifiable event.'" Id. at 21-22, 110 S.Ct. at 2707, 111 L.Ed.2d at 19 (citation omitted).
For all of these reasons, we conclude as a matter of law that the statement "substandard and poor performers" constituted nothing more than Ditmars' conclusion or opinion, which contained nothing that implied any provable false fact. Moreover the statement was based on facts that were true. As such the statement was not defamatory.
VI. The Negligence Claim: Sufficiency of the Evidence Regarding Causation.
The second issue we address is whether the district court erred in overruling the defendants' motion for directed verdict because there was insufficient evidence that the track conditions proximately caused *774 injuries to the plaintiffs' dogs. In their motion for directed verdict, the defendants contended the plaintiffs did not prove that the injuries to the dogs would not have occurred but for the defendants' maintenance of the track. In support of their contention, the defendants argued the plaintiffs did not produce testimony that a qualified veterinarian examined or treated any of the plaintiffs' dogs at the time they were allegedly injured and diagnosed them with injuries attributable to track conditions. At the close of all the evidence, the defendants renewed their motion. The defendants raised the same contention and arguments on appeal.
1. Applicable law. To sustain its negligence claim against the defendants, the plaintiffs had to prove that the defendants owed it a duty of care, they breached that duty, their breach was the actual and proximate cause of the injuries to its dogs, and the damages it suffered. Virden v. Betts & Beer Constr. Co., 656 N.W.2d 805, 807 (Iowa 2003).
As we explained in Berte v. Bode,
Causation has two components: "(1) the defendant's conduct must have in fact caused the plaintiff's damages (generally a factual inquiry) and (2) the policy of the law must require the defendant to be legally responsible for the injury (generally a legal question)." We apply a "but for" test to determine whether the defendant's conduct was a cause in fact of the plaintiff's harm. Under that test, "the defendant's conduct is a cause in fact of the plaintiff's harm, if, but-for the defendant's conduct, that harm would not have occurred. The but-for test also implies a negative. If the plaintiff would have suffered the same harm had the defendant not acted negligently, the defendant's conduct is not a cause in fact of the harm."
692 N.W.2d 368, 372 (Iowa 2005) (citations omitted). Proximate cause or legal cause, the second element of causation, determines the appropriate scope of a negligent defendant's liability. In applying proximate cause rules, courts attempt "to discern whether, in the particular case before the court, the harm that resulted from the defendant's negligence is so clearly outside the risks he created that it would be unjust or at least impractical to impose liability." Id. (citation omitted). Here, we are dealing with cause in fact.
This court has long been "committed to a liberal rule [that] allows opinion testimony if it is of a nature which will aid the jury and is based on special training, experience, or knowledge [as] to the issue in question." Iowa Power & Light Co. v. Stortenbecker, 334 N.W.2d 326, 330 (Iowa App.1983). However, medical testimony regarding whether an accident caused an injury is not within the knowledge and experience of ordinary laypersons. Bradshaw v. Iowa Methodist Hosp., 251 Iowa 375, 382-83, 101 N.W.2d 167, 171 (1960) (holding that in patient's action for personal injury allegedly resulting from a fall in defendant hospital, medical testimony that it was possible that plaintiff's subsequent physical condition was caused by the fall was insufficient, standing alone, to take the issue of causation to the jury). Such testimony is essentially within the domain of testimony from a medical expert. Id. at 383, 101 N.W.2d at 171. Before such testimony can be considered competent, there must be sufficient data upon which the expert judgment can be made. The facts must be sufficient to allow the expert to reach a conclusion that is "more than mere conjecture or speculation." Stortenbecker, 334 N.W.2d at 330-31. Without the medical testimony, a jury is left to resort to conjecture in determining causation. Chenoweth v. Flynn, 251 Iowa 11, 16, 99 N.W.2d 310, 313 (1959). *775 The rule is the same with respect to injuries to animals. See Winter v. Honeggers' & Co., 215 N.W.2d 316, 323 (Iowa 1974) (holding veterinarian testimony that the negligent design of a hog confinement facility possibly caused an illness to hogs coupled with testimony that the hogs were not affected with the illness before the use of the facility was sufficient on the question of causation); Miller v. Economy Hog & Cattle Powder Co., 228 Iowa 626, 636-37, 293 N.W. 4, 9 (1940) (holding that, in suit for damages for death of sheep allegedly caused by feeding a product purchased from defendant, testimony from several veterinarians who examined the sheep on various occasions and who also made a number of post mortem examinations was sufficient on causation).
As this court in Hildebrand & Son v. Black Hawk Oil Co. noted,
the plaintiff is bound, as a necessary element of its case, to show that the injuries which its hogs suffered were the direct result of the feeding of this preparation to them. There is no expert testimony introduced in this case, there seems to have been no post mortem of the dead hogs, and there is no testimony directed to the point that the injury to this herd of hogs was the result of the feeding of the preparation to them. It is also to be remembered in cases of this character that in the course of events all animals die; in other words death is inherent in all animal creation. Equally so all animal creation is subject to many ailments, ills, and diseases, resulting in death or injury to the animal. Therefore, in a case of this kind, proof that the animal died or was permanently injured does not establish a case for the plaintiff. In short, plaintiff alleges that these hogs died and injury to the balance of the herd was caused by the feeding of this preparation to them. Plaintiff is bound to prove this else it has not made out a case. The evidence is wholly wanting to connect the death of these hogs with the feeding of this preparation, and equally so as to their stunted growth.
205 Iowa 946, 947-48, 219 N.W. 40, 40-41(1928) (citation omitted).
2. Analysis. The plaintiffs produced three witnesses concerning the dogs' injuries. Lori Fortune, an assistant dog trainer, testified that her training included identifying injuries and the cause of injuries to the dogs. She further testified that her training indicated to her what may have caused the injuries. She explained that in her experience a track that has inconsistent surfaces, such as Bluffs Run had, varying between hard and soft spots, can injure dogs. Hard spots she said could cause broken bones and loose spots could cause muscle and ligament damage. Over defendants' objection that the witness was not qualified to testify concerning causation of the dogs' alleged injuries, the witness was allowed to give her opinion that the majority of the injuries to the plaintiffs' dogs came from poor track conditions.
Randy Schaben testified that he raised greyhounds. Like Fortune, Schaben described the Bluffs Run track in 2000 as having an inconsistent surfacethere were hard and soft spots on the surface of the track. He described the inconsistency this way: "The easiest way to probably explain it would be like running from a grassy lawn onto a sidewalk and then back into grass . . . . It's just inconsistent footing, so to speak." He further testified that in 2000 his dogs suffered a lot of injuries at the track.
James Lovely, a dog trainer who also raced greyhounds, testified that for a period of sixty and ninety days there were more dog injuries at Bluffs Run than there *776 should have been. Although he was not sure what was causing so many injuries, his personal opinion was that there was a hard pan directly under the surface of the track.
The plaintiffs also produced evidence from engineers who tested the soil on the track and who confirmed that the track conditions went from hard to soft, conditions that could be "aggressive on a dog's paws."
Beverly Yates, one of the owners of Yates Kennel, testified that the kennel was claiming damages for injuries to twenty-four dogs for the year 2000. A list of the dogs and their injuries is included in an exhibit in evidence. However, there was no medical testimony that attributed the cause of those injuries to race track conditions. This failure of proof was fatal to Yates Kennel's negligence claim. Fortune's testimony attributing the cause of a majority of the injuries to the track conditions was conjecture and therefore not sufficient to overcome this flaw.
We agree with the defendants that evidence of increased injuries to dogs for a period of time was anecdotal, at best. Moreover, Fortune admitted that many other factors can account for injuries to greyhounds. These factors, she admitted, include genetics, conditioning, accidents at the kennel or while the dogs are being transported, dogs bumping into each other during the races, dogs racing while already injured, and the natural effects of racing on the body of a dog. Fortune conceded that the exhibit listing the injuries had no reference to track conditions but did have references to dogs falling and making contact with other dogs. A veterinarian called by the defendants confirmed that there are numerous causal factors related to greyhound injuries including genetics, where and how the dog was reared, nutrition, physical conditioning, type of competition, and a dog racing without adequate rest or with injury.
VII. Disposition.
In sum, we conclude as a matter of law that the plaintiffs failed to produce sufficient evidence of their slander and negligence claims for submission of those claims to the jury. Accordingly, the district court erred in overruling the defendants' motion for directed verdict. We therefore affirm the court of appeals decision and reverse the judgment of the district court. We remand for entry of a judgment in favor of the defendants.
COURT OF APPEALS DECISION AFFIRMED; DISTRICT COURT JUDGMENT REVERSED AND CASE REMANDED WITH DIRECTIONS.
All justices concur except LARSON, J., who takes no part.
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485 F.3d 965
UNITED STATES of America, Plaintiff-Appellee,v.Raphael McGAUGHY, Defendant-Appellant.
No. 05-2234.
United States Court of Appeals, Seventh Circuit.
Argued February 16, 2007.
Decided May 11, 2007.
Maribel Fernandez-Harvath (argued), Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellee.
Franklin C. Cook (argued), Freeport, IL, for Defendant-Appellant.
Before FLAUM, RIPPLE and ROVNER, Circuit Judges.
RIPPLE, Circuit Judge.
1
Raphael McGaughy was convicted in the Northern District of Illinois of being a felon in possession of a firearm. See 18 U.S.C. § 922(g)(1). He was sentenced under the Armed Career Criminal Act, 18 U.S.C. § 924(e)(1), to fifteen years' imprisonment. He timely appeals his conviction and sentence, contending that the district court erred in denying his request for an evidentiary hearing on a motion to suppress the evidence obtained in a search of his residence and that his sentence violates Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000). For the reasons set forth in this opinion, we affirm the judgment of the district court.
2
* BACKGROUND
3
A. The Complaint for a Search Warrant and the Search
4
On July 12, 2004, Officer Patrick Cardwell executed a complaint for a search warrant that listed an apartment where Mr. McGaughy stayed as the premises to be searched. In the complaint, Officer Cardwell asserted that he had probable cause to believe that Mr. McGaughy kept a weapon in the residence in violation of law. The complaint rested principally on facts reported to Officer Cardwell by a confidential source, "Pat Doe." R.14, Ex.A at 2. Doe reportedly informed the police that "within the past seven days," Doe had been in Mr. McGaughy's residence and had seen Mr. McGaughy in possession of a rifle and a handgun. Id. According to the complaint, Doe stated that Mr. McGaughy had indicated that the weapons belonged to him and were used for his protection. Doe also stated that Doe had known Mr. McGaughy to be in possession of weapons on other occasions and that Doe knew Mr. McGaughy transported weapons in his car between the home and another area of the city. The complaint further attributed various innocent facts to Doe, such as a description of the exterior of the apartment building and the fact that Mr. McGaughy resided there with his girlfriend.
5
Officer Cardwell then made his own additional statements to show police corroboration of the facts attributed to Doe. He stated that he had observed the exterior of the building and that it matched Doe's description. He further stated that he had run a registration check on a car that he had observed parked behind the apartment building and the check confirmed that the vehicle was registered to Mr. McGaughy. Finally, Officer Cardwell noted that he had checked Illinois records and had confirmed both that Mr. McGaughy had an aggravated battery conviction from 1998 and that he did not possess a valid firearm owner identification card.
6
On July 12, 2004, both Officer Cardwell and Doe appeared before an Illinois circuit judge to attest to the validity of the statements in the complaint. The judge found that there was probable cause and issued the warrant.
7
In the early morning of July 14, 2004, police executed the warrant at the apartment of Mary Dotson, Mr. McGaughy's girlfriend, where he had been staying. Police found Mr. McGaughy and Dotson in bed and, after asking both to make their hands visible and leave the bed, found a gun under Mr. McGaughy's pillow. The officers also found a second gun in a laundry basket.
8
Following the search, Mr. McGaughy was arrested and eventually was charged by a federal grand jury with being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).
B. District Court Proceedings
9
Before trial, Mr. McGaughy filed a motion to suppress the evidence seized in the search; he contended that the informant's statements, which provided the substance of the complaint, did not establish probable cause as that standard is described in Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983). Specifically, he claimed that it was error to credit Doe's assertions without a basis in the complaint for determining Doe's reliability, veracity or the basis for Doe's knowledge. He also claimed that the information provided by Doe was stale, relating to possession of a gun up to 16 days prior to the execution of the complaint. Finally, he claimed that the Leon good-faith exception did not apply because the complaint was "so lacking in indicia of probable cause as to render official belief in its existence entirely unreasonable." R.14 at 10 (citing United States v. Leon, 468 U.S. 897, 918, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984)). He asked that the evidence be suppressed or, in the alternative, that an evidentiary hearing be granted "to resolve any evidentiary issues." Id. at 11. He did not endeavor to identify further any material factual dispute.
10
In reply, Mr. McGaughy contended that there were material omissions in the application that tainted its validity. Specifically, he noted again that the complaint contained no information about Doe, but also alleged that Officer Cardwell had omitted information about a "history" between Officer Cardwell and Mr. McGaughy. Mr. McGaughy contended that, at some point in the past, he had been charged with either resisting arrest or battery of a police officer in relation to an incident in which he allegedly had thrown a bottle at Officer Cardwell. R.18 at 6; Appellant's Br. at 6. Mr. McGaughy stated that the issuing judge "would certainly [have been] interested in knowing" of the "potential bias on the part of the complainant" before making the probable cause determination. R.18 at 6.1
11
The district court heard argument on the motion to suppress. Counsel for Mr. McGaughy focused on Mr. McGaughy's claim that the issuing judge had erred in determining that the facts of the complaint established probable cause, rather than on any contention that an outstanding factual dispute had to be resolved before the probable cause determination could be assessed.2 At one point, the Government noted, "in addition, your Honor — and I don't know if we need to address this or not — but the [G]overnment does not believe that a hearing is necessary. If you'd like me to address that, I can. Or we can jump off that bridge when we get to it." Tr. at 17-18 (Jan. 21, 2005) (emphasis added). When the court asked for Mr. McGaughy's reply, counsel did not contend specifically that there were disputed issues of fact requiring a hearing. Instead, she contended again that Officer Cardwell's corroboration was insufficient to overcome the absence of information about the informant's credibility and that the information was stale. She did not raise any issue regarding the allegations of bias of Officer Cardwell. She did not restate the request for an evidentiary hearing, but asked the court to "grant the motion and suppress the weapons." Id. at 23.
12
Following argument, the district court ruled that the issuing state judge had a substantial basis for concluding that the warrant was supported by probable cause. Id. at 23. The court stated that the officers took appropriate steps to corroborate as much information of the confidential informant as they could and that any delay in seeking the warrant was reasonable in light of these attempts to corroborate. The court found significant that the warrant specified that the confidential informant had observed personally the weapons in the apartment and, by virtue of the detail regarding the movement of the weapons, clearly "had some knowledge of the defendant and the circumstances under which he lived." Id. at 26. The court made no specific ruling on the issue of an evidentiary hearing.
13
Mr. McGaughy subsequently was convicted in a jury trial. The presentence report included information regarding his prior violent felony convictions; on the basis of those convictions, the trial court sentenced him to the minimum fifteen-year sentence prescribed by the Armed Career Criminal Act, 18 U.S.C. § 924(e)(1). Mr. McGaughy contended that Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), required the fact of his prior convictions that resulted in a recidivism enhancement to have been found by a jury beyond a reasonable doubt. The court rejected his argument.
II
DISCUSSION
A. Denial of an Evidentiary Hearing
14
Mr. McGaughy contends that the district court erred in denying an evidentiary hearing on his motion to suppress. In this court, Mr. McGaughy does not challenge directly the probable cause determination or the applicability of the good faith exception as he did in the district court; instead, he focuses on whether the motion should have been decided without first conducting an evidentiary hearing.
15
We review a district court's denial of an evidentiary hearing on a motion to suppress for an abuse of discretion. United States v. Juarez, 454 F.3d 717, 719 (7th Cir.2006). Evidentiary hearings are not required as a matter of course; a district court need conduct a hearing only
16
when the allegations and moving papers are sufficiently definite, specific, non-conjectural and detailed enough to conclude that a substantial claim is presented and that there are disputed issues of material fact which will affect the outcome of the motion.
17
United States v. Villegas, 388 F.3d 317, 324 (7th Cir.2004); see also Juarez, 454 F.3d at 720; United States v. Martin, 422 F.3d 597, 602-03 (7th Cir.2005), cert. denied, ___ U.S. ___, 126 S.Ct. 1181, 163 L.Ed.2d 1139 (2006). We have emphasized the necessity of materiality in any factual disputes that are presented to the district court as a predicate for an evidentiary hearing. Villegas, 388 F.3d at 324; Juarez, 454 F.3d at 720; United States v. Berkowitz, 927 F.2d 1376, 1385 (7th Cir. 1991).
18
Mr. McGaughy's briefing and argument on the motion to suppress do not identify any specific "material factual dispute" requiring resolution through an evidentiary hearing. In the district court, Mr. McGaughy did claim the information from Doe was up to two weeks old and therefore stale, and, on reply, added his claims that personal bias motivated the complaining officer in seeking the warrant. Mr. McGaughy did not make any serious effort to articulate what facts had to be adduced at an evidentiary hearing to inform the court's analysis; furthermore, Mr. McGaughy did not articulate in what manner the district court's ultimate determination of probable cause would have been different if his version of the facts were accepted. See Juarez, 454 F.3d at 720.
19
Our precedent places the onus on a defendant seeking an evidentiary hearing to "specifically . . . allege[ ] a definite disputed factual issue," Martin, 422 F.3d at 603 (emphasis added), and to demonstrate its materiality, Juarez, 454 F.3d at 720. We conclude that Mr. McGaughy has not met this burden.
20
With respect to the age of the information, the district court explicitly considered whether any delay caused Doe's information to become stale. The district court concluded that the complaint alleged possession of firearms, an ongoing criminal activity, that was likely to persist beyond the day the information was passed from Doe to the police. Indeed, the district court took the view that any delay demonstrated that the officer had taken the prudent course in attempting some corroboration before producing a complaint.
21
With respect to the question of potential bias, Mr. McGaughy's conclusory allegation that a history with the complaining officer should have been presented to the issuing judge also does not create a material issue of fact.3 Officer Cardwell's personal contributions to the factual statements in the complaint were simply that Mr. McGaughy was a felon without a valid firearm permit who parked his car outside a particular apartment building. Mr. McGaughy does not allege that bias tainted any of these facts. Moreover, it is nothing more than speculation to suggest that any bias on the part of Officer Cardwell tainted the factual statements attributed to Doe. Doe swore out an affidavit and attested to the veracity of those statements before an Illinois circuit judge. The issuing judge was in a position to assess the credibility and veracity of both persons and to make his probable cause determination with that additional evidence before him. See United States v. Koerth, 312 F.3d 862, 866 (7th Cir.2002) (noting that, whether "the informant personally appeared and presented an affidavit or testified before the magistrate, thus allowing the judge to evaluate the informant's knowledge, demeanor, and sincerity" is an important factor in determining whether probable cause is established on the basis of an informant's tip). Under these circumstances, the bald suggestion of bias is insufficient to establish a factual dispute that is material to the probable cause determination.
22
We perceive no abuse of discretion on the part of the district court in deciding the constitutionality of the search without first holding an evidentiary hearing. Accordingly, we deny relief to Mr. McGaughy on the basis of the only substantial claim placed before this court.
23
We note that Mr. McGaughy raises only the absence of an evidentiary hearing to this court. We therefore have no occasion to pass upon the validity of the warrant given the contentions actually pressed on appeal; we express no opinion on the merits of that claim.
24
B. Apprendi and the Armed Career Criminal Act
25
Finally, Mr. McGaughy submits that Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), requires a jury to have found the fact of his prior convictions, which serve as the predicate for a recidivism enhancement, beyond a reasonable doubt. Mr. McGaughy acknowledges that this court is without authority to decide this issue in his favor because the governing law of the Supreme Court, which this court is bound to follow, states that the fact of a prior conviction need not be found by a jury beyond a reasonable doubt. Almendarez-Torres v. United States, 523 U.S. 224, 246-47, 118 S.Ct. 1219, 140 L.Ed.2d 350 (1998). Apprendi specifically preserved Almendarez-Torres, see 530 U.S. at 488-90, 120 S.Ct. 2348 ("Other than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.") (emphasis added). Accordingly, given the governing precedent, we cannot accept Mr. McGaughy's claim that the failure to submit this issue to the jury constitutes reversible error.
Conclusion
26
Accordingly, the judgment of the district court is affirmed.
27
AFFIRMED.
Notes:
1
Although Mr. McGaughy did not raise his contention regarding the possible bias of Officer Cardwell in his opening brief before the district court, both parties address this argument on its merits in this appeal; the Government has not suggested that it is waived. We therefore shall address it in substance
2
Counsel for Mr. McGaughy specifically asserted that he raised two challenges to the probable cause determination, lack of corroboration of the informant and stalenessSee Tr. at 3, 8 (Jan. 21, 2005).
3
Neither on appeal nor before the district court did Mr. McGaughy claim that the omission of the history information raised aFranks issue. See Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978); United States v. Harris, 464 F.3d 733 (7th Cir.2006). Franks and its progeny entitle a defendant to a hearing on the veracity of an affidavit supporting a request for a search warrant when the defendant
makes a substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit, and if the allegedly false statement is necessary to the finding of probable cause. . . .
Franks, 438 U.S. at 155-56, 98 S.Ct. 2674; see also Zambrella v. United States, 327 F.3d 634, 638 (7th Cir.2003). We have acknowledged that the same rationale applies to substantiated allegations that the affidavit contains intentional or reckless omissions of facts, which, if included, would have rendered the affidavit lacking in probable cause. United States v. Williams, 737 F.2d 594, 604 & n. 6 (7th Cir.1984). This is not the claim Mr. McGaughy has made, nor the type of remedy he has requested.
|
43 So.3d 1249 (2009)
Cheryl Hickel SMITH
v.
Lex Burr SMITH.
2080387.
Court of Civil Appeals of Alabama.
June 19, 2009.
Certiorari Denied February 12, 2010. Alabama Supreme Court 1081298.[*]
*1250 Ritchie Tipton, Tuscaloosa, for appellant.
Thomas W. Powe, Jr., of Ray, Oliver & Ward, L.L.C., Tuscaloosa, for appellee.
*1251 MOORE, Judge.
Cheryl Hickel Smith ("the former wife") appeals from a summary judgment entered in favor of Lex Burr Smith ("the former husband") declaring that the former husband had a right of first refusal in relation to the sale of the former marital home. We affirm.
The following facts are not in dispute. The Tuscaloosa Circuit Court ("the trial court") entered a judgment divorcing the parties on November 21, 2003. That judgment incorporated by reference "the Separation Agreement heretofore entered into by the parties, a signed copy of which is on file in this cause." The record shows that, on the date the trial court entered the divorce judgment, two documents were filed with the trial court: (1) an "Agreement in Contemplation of Divorce" ("the agreement") executed by the former wife on November 19, 2003, and executed by the former husband on November 20, 2003, and (2) a letter dated November 19, 2003, signed by the former wife ("the letter"). The agreement provided that the former wife "shall be vested with full legal title in and to [the marital home] and the [former husband] hereby agrees to execute a statutory warranty deed in favor of the [former wife] on even date with execution of this agreement." The letter provided, in pertinent part:
"This letter is meant as a memorandum to the written settlement agreement that I signed earlier today. I agree that you have the first right of refusal to buy the [marital home in] Tuscaloosa at the sales price of $130,000, in the event that I decide to sell it."
On November 21, 2003, a statutory warranty deed executed by the former husband on November 20, 2003, was also filed with the Tuscaloosa Probate Court ("the probate court"). That statutory warranty deed conveyed the former husband's interest in the marital home to the former wife "subject to any and all easements, restrictions, covenants, or matters of record."
On October 6, 2004, the former husband filed a Chapter 7 voluntary bankruptcy petition in the United States Bankruptcy Court, Northern District of Alabama, Western Division ("the bankruptcy court"). In the petition, the former husband did not list any interest in the marital home in the schedules relating to real or personal property or in the schedule relating to executory contracts. The former husband also did not disclose in the petition that he had been involved in the 2003 divorce action. On January 13, 2005, after the bankruptcy trustee attested that its diligent inquiry did not locate any assets owned by the former husband beyond those the former husband had declared exempt, the bankruptcy court entered its final discharge judgment, relieving the former husband of $62,309.60 in debts.
In the fall of 2007, after learning that the former wife had listed the marital home for sale, the former husband contacted the former wife and informed the former wife that he wanted to purchase the marital home for $130,000 pursuant to the terms of the letter. The former wife refused to sell the former husband the marital home. On February 19, 2008, the former husband recorded the letter in the probate court. The former husband also filed a lis pendens regarding the marital home with the probate court. The former husband then filed a petition with the trial court seeking to enforce the terms of the letter.
Following a convoluted procedural history, on January 23, 2009, the trial court entered a summary judgment in favor of the former husband finding that the letter was part of the settlement agreement between the parties that had been incorporated into the November 21, 2003, divorce *1252 judgment. The trial court permanently enjoined the former wife from selling the marital home in a manner inconsistent with the letter, which granted the former husband a right of first refusal to purchase the marital home for $130,000 in the event the former wife decided to sell it. The former wife filed her notice of appeal to this court on January 27, 2009.
The former wife first argues that the trial court erred in denying her motion to strike the former husband's affidavit testimony filed in support of his motion for a summary judgment. In that affidavit, the former husband attested, in pertinent part:
"During the time that my former wife and I were negotiating a settlement in our original divorce case I did not want to give her the marital residence. The marital residence had belonged to my Mother and was the family home place. However, I also wanted my children to be able to remain in their home. My former wife and I agreed that I would convey the house to her if she would agree that I would have the right of first refusal to purchase the house from her if she decided to sell the house. We agreed that $130,000.00 would be a reasonable purchase price in the event that she decided to sell the house. My former wife wrote a letter confirming our agreement and the letter was filed with the Court along with [the agreement]. I signed a deed that had been prepared by my former wife's attorney and my former wife and I then exchanged all personal property required to be exchanged by the Divorce [Judgment] and the case was concluded until she decided to sell the property to a third party in violation of the [Judgment]."
At the trial-court level, the former wife argued that the former husband's affidavit testimony violates the parol-evidence rule. See Walton v. Beverly Enters.-Alabama, Inc., 4 So.3d 537, 542 (Ala.Civ.App.2008) (quoting Able v. Gunter, 174 Ala. 389, 393, 57 So. 464, 465 (1912)) ("`[P]arol evidence of prior or contemporaneous verbal agreements varying or adding to the written contract is not admissible.'").
The former wife also argues that the trial court erred in not excluding the letter from evidence. The record does not contain a motion denominated as a "motion to strike" the letter, which leads the former husband to argue that the former wife waived any issue on appeal as to the admissibility of the letter. See R.J.L. v. Lee County Dep't of Human Res., 976 So.2d 455 (Ala.Civ.App.2007). However, it is the substance of a motion, and not its denomination by a party, that governs the court's interpretation of that motion. See Evans v. Waddell, 689 So.2d 23, 26 (Ala.1997). The former wife consistently argued in her motions filed with the trial court that the letter should not be considered by the trial court based on the parol-evidence rule. The trial court ruled against the former wife by expressly considering the terms of the letter as part of the parties' settlement agreement. Therefore, we decline to hold that the former wife has waived the issue, and we consider the former wife's argument that the letter is inadmissible under the parol-evidence rule in tandem with her argument that the former husband's affidavit testimony violates the parol-evidence rule.
The former wife argues that the former husband did not reserve any right to the marital home in the four corners of the agreement. The agreement provides that the former wife shall obtain "full legal title" to the marital home and that the former husband shall execute a statutory warranty deed to the former wife. Paragraph 11 of the agreement further provides:
*1253 "Both parties accept these provisions in full and final settlement and satisfaction of all claims for property which one may have against the other. Furthermore, each party fully discharges the other from, all such property claims unless otherwise provided in this Agreement. Both parties acknowledge that the terms of this Agreement are fair, adequate, and satisfactory to them and that they have entered into this Agreement after due and deliberate consideration. Both parties accept these provisions in full and final settlement and satisfaction of all claims and demands of one against the other and fully discharge the other from all such claims and demands except as provided in this Agreement."
(Emphasis added.) The former wife argues that the affidavit testimony of the former husband and the terms of the letter vary or add to the terms of the agreement by granting the former husband a right of first refusal that, she asserts, is explicitly rejected in the agreement. Consequently, the former wife argues, the affidavit testimony and the letter should have been stricken as parol evidence.
The former husband argues that the undisputed evidence shows that the letter is an addendum to the agreement, as proven by his affidavit testimony and the timing of the filing of the agreement with the trial court. See Kortrecht v. Trabits, 549 So.2d 462, 463 (Ala.1989) ("The nature of an addendum is an addition to something already done. Therefore, when Kortrecht signed the addendum to the lease, it was the same thing, for all practical purposes, as signing the lease itself."). The former husband maintains that his affidavit testimony proves that, subsequent to the preparation of the agreement, but before the agreement was fully executed and submitted to the trial court, the parties agreed that the former husband would be entitled to the right of first refusal contained in the letter. The parties then filed both the agreement and the letter with the trial court within one minute of one another, with the letter actually being filed first. The former husband argues that his affidavit testimony proves that the letter is not extrinsic to the agreement but, rather, is actually part of the agreement, and, thus, he asserts, the trial court did not err in excluding his affidavit testimony or the letter.
Alabama law has long held that two seemingly inconsistent documents may be considered together as one contract so long as the two writings contain internal evidence of their identity and unity as constituting a single transaction. See Fidelity & Cas. Co. of New York v. Raborn, 27 Ala.App. 367, 173 So. 399 (1937).
"While, as a general rule, when the memorandum consists of two or more writings, parol evidence is inadmissible to connect them, if such evidence has the effect of changing the terms of either of the writings, yet parol evidence of contemporaneous facts, and of the circumstances in which the parties were when the writings were signed, will be received to show their connection. Kyle v. Jordan, 196 Ala. 509, 71 So. 417 [(1916)]; Jenkins v. Harrison, 66 Ala. 345 [(1880)]. When such evidence is adduced to the satisfaction of the jury, the two papers become the contract. 27 Corpus Juris, 384(477) gg."
Raborn, 27 Ala.App. at 370, 173 So. at 402.
In this case, the affidavit testimony of the former husband proves the connection between the letter and the agreement and further proves that the letter is part of the overall settlement agreement between the parties. As such, the affidavit testimony is not inadmissible under the parol-evidence rule as the former wife argues. Likewise, *1254 the letter is not inadmissible under the parol-evidence rule because it has been proven to be part of a single, continuous transaction between the parties. Therefore, the trial court did not err in denying the former wife's motion to strike the letter and the former husband's affidavit testimony explaining the origin of the letter and its connection to the agreement.
The former wife does not argue on appeal that she presented any conflicting evidence refuting the origin of the letter or its connection to the agreement. Hence, we must accept the facts as stated in the former husband's affidavit as true. The letter is part of the settlement agreement between the parties.
The former wife next argues that, by executing the statutory warranty deed, the former husband waived his right of first refusal. In Martin v. Martin, 659 So.2d 676 (Ala.Civ.App.1995), the Martins entered into a property settlement pursuant to which Mrs. Martin received the "`sole, exclusive, and absolute possession'" of the marital residence, but the marital residence "`remain[ed] jointly owned by and between the parties.'" 659 So.2d at 677. The property settlement further provided that "`[s]hould [Mrs. Martin] sell the residence or remarry, [Mr. Martin] shall be paid the sum of $7,500.00 for his equity in the residence.'" Id. Not long after the divorce judgment was entered, Mr. Martin executed a quitclaim deed to Mrs. Martin in order to have his name removed from the mortgage on the marital residence so that he could obtain a mortgage on his new home. Id. Mr. Martin did not reserve his equity interest in the marital residence in the quitclaim deed. Id. Mrs. Martin later sold the marital residence and refused to pay Mr. Martin the $7,500. Id. The trial court entered a judgment for Mrs. Martin, and, on appeal, this court affirmed the judgment, holding that Mr. Martin had released his equity interest in the marital residence in the quitclaim deed. 659 So.2d at 677-78.
The former wife argues that, under Martin and the doctrine of merger, the former husband released his right of first refusal by failing to reserve that right in the statutory warranty deed.
"Under the doctrine of `merger,' ordinarily, in the absence of fraud or mistake, when a contract to sell and convey real estate has been consummated by the execution and delivery of a deed, . . . the preliminary contract becomes functus officio, and the deed becomes a sole memorial of the agreement, and upon it the rights of the parties rest; but the doctrine may be inapplicable to cases in which stipulations of the preliminary contract, instead of becoming merged in the deed, are incorporated therein and thus survive to confer independent causes of action, and in such instances the intentions of the parties is of paramount importance."
Russell v. Mullis, 479 So.2d 727, 730 (Ala. 1985) (citing Alger-Sullivan Lumber Co. v. Union Trust Co., 207 Ala. 138, 92 So. 254 (1922), and Roberts v. Peoples Bank & Trust Co., 410 So.2d 393 (Ala.1982)).
The former husband points out that, in the statutory warranty deed, he conveyed all of his interest in the marital home to the former wife "subject to any and all easements, restrictions, covenants, or matters of record." The former husband argues that his right of first refusal is a "restriction" on the former wife's property interest because she cannot sell the marital home without first offering the home for sale to the former husband for $130,000. Thus, the former husband argues, the right of first refusal was not merged into the deed but, instead, was incorporated into it and survived to confer *1255 upon him an independent cause of action for its enforcement.
In Starr v. Wilson, 11 So.3d 846 (Ala. Civ.App.2008), this court held that "[a] preemptive right of first refusal . . . is properly viewed as an independent and collateral agreement" that is not merged into a deed. 11 So.3d at 855 (citing Stoneburner v. Fletcher, 408 N.E.2d 545, 549 (Ind.Ct.App.1980) (preemptive right to purchase adjoining lot survived conveyance of principal property); Landa v. Century 21 Simmons & Co., 237 Va. 374, 384, 377 S.E.2d 416, 421 (1989) (right of first refusal as to particular tract in contract to convey other tract "remained executory and survived the deed"); and Winberg v. Cimfel, 248 Neb. 71, 79, 532 N.W.2d 35, 40-41 (1995)). Hence, we need not decide whether the former husband's right of first refusal is a "restriction" within the meaning of the statutory warranty deed. Even if it is not a "restriction," under our holding in Starr, the right of first refusal survived the execution of the statutory warranty deed as an independent and collateral executory contractual right.
For the same reason, we find Martin inapplicable. In Martin, Mr. Martin retained his joint ownership of the marital residence as well as a $7,500 interest in the equity in the marital residence per the terms of the divorce judgment. However, he later quitclaimed all of his interest in the marital residence to Mrs. Martin. As both parties in this case correctly argue, all Mr. Martin's claims to the property merged into the quitclaim deed because they were not independent and collateral rights. Thus, by releasing all of his interest in the marital residence without reserving his equity interest, Mr. Martin necessarily released that interest. Unlike in Martin, the former husband in this case held an independent and collateral right of first refusal that did not merge into the statutory warranty deed. By executing the statutory warranty deed, the former husband did not impliedly sacrifice his right of first refusal.
The former wife last argues that the doctrine of judicial estoppel prevents the former husband from enforcing the right of first refusal. It is undisputed that the former husband did not list the right of first refusal on any of his property schedules when he filed for bankruptcy in 2004. The former husband attested in his affidavit:
"Approximately a year after the divorce was filed it became necessary for me to file Chapter 7 bankruptcy. I retained Eric Wilson of Bums & Wilson to represent me in the bankruptcy case. I met with Mr. Wilson and provided the information that he needed to fill out the paperwork. During my meeting with Mr. Wilson we discussed the divorce and the transfer of the house along with my right to buy it if my former wife decided to sell.
"After the Chapter 7 case was filed, I attended a meeting with the Trustee and others. During that meeting, the Trustee asked if I had sold, given away or transferred any real property in the past few years. I told him about the house and what happened with the divorce. The Trustee took down the information and we finished with the meeting. A couple of months later I received a Discharge Order from the Court."
The bankruptcy attorney for the former husband filed an affidavit in which he stated:
"In the [former husband's] case, as in all of my cases, I met with [the former husband] and obtained the information necessary to advise him and prepare the Bankruptcy Petition. During my meeting with [the former husband], I learned that he was divorced and that, pursuant *1256 to the divorce decree, [the former husband] had conveyed his interest in the marital residence to his former wife. I also learned that, pursuant to the divorce decree, [the former husband] was given the option to purchase the marital residence from his former wife for $130,000.00 if she decided to sell the house. In preparing the Bankruptcy Petition, I determined that [the former husband] did not, in fact, have an ownership interest in the property that had been conveyed to his former wife. I made that decision based on the fact that he had conveyed his interest in the property and that, at most, he had a right to buy the property back at an unspecified future date if [the former wife] decided to sell the property but that he did not have any right to force the sale of the property. I also determined that the right to purchase the property at some future, unspecified date if [the former wife] decided to sell the house did not have any current value. My decision was based on the fact that [the former husband] did not have the right to force the sale of the property and the fact that there was no definite date on which the property would be sold such as the date the youngest child reaches the age of majority. Because the right did not have any value, it was not necessary to list it as an asset in [the former husband's] Bankruptcy Schedules.
"I chose not to schedule the option as an executory contract for the simple reason that [the former husband] did not have the right to force [the former wife] to sell the property. While he had the right of first refusal, he could not require [the former wife] to sell the property if she chose not to sell. I did not list anything under the provision requiring the listing of alimony, maintenance, support and property settlement because all provisions of the Divorce Decree had been completed. All personal property had been transferred and [the former husband] had conveyed his interest in the marital residence to [the former wife]. Furthermore, the option to purchase had been put in place and there was no further division of property until and unless [the former wife] decided to sell the marital residence.
"During the Section 341 meeting of creditors, [the former husband] disclosed to the Bankruptcy Trustee and all others present the fact that he had conveyed his interest in the marital residence to his former wife pursuant to the divorce decree. Following the Section 341 meeting of creditors, the case proceeded as usual and [the former husband] subsequently received a discharge pursuant to 11 U.S.C,[.] § 727."
The former wife moved to strike the affidavits, but the trial court denied her motions. The former wife does not argue on appeal that the trial court erred in failing to strike the affidavits, so we consider them in full.
The affidavits do not alter the undisputed fact that the former husband did not list his right of first refusal in his bankruptcy schedules. At best, the affidavits merely explain why he did not. For our purposes, we need not consider whether the reasons given constitute legally sufficient grounds for not listing a right of first refusal on a bankruptcy property schedule. We need only consider whether that failure judicially estops the former husband from asserting his right in a postdivorce enforcement proceeding.
In Ex parte First Alabama Bank, 883 So.2d 1236 (Ala.2003), our supreme court held that judicial estoppel applies when: (1) a party takes a position in a later judicial proceeding that is clearly inconsistent *1257 with its earlier position; (2) the party was successful in the prior proceeding so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or second court was misled; and (3) the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped. 883 So.2d at 1244-45.
Assuming, without deciding, that the first and third elements of judicial estoppel have been met, we find that the summary judgment was appropriate because the former husband presented evidence negating the second element of the judicial-estoppel defense. See Ex parte General Motors Corp., 769 So.2d 903, 909 (Ala.1999) (holding that, when burden of proof is on nonmovant at trial, the movant may obtain a summary judgment by negating an essential element of the nonmovant's claim or by showing that the nonmovant's evidence is insufficient to establish an element of the nonmovant's claim). The former husband proved that, at the time of his bankruptcy proceeding, he held a right of first refusal that gave him the right to purchase the marital home for $130,000 should the former wife decide to sell it. The right of first refusal did not bestow upon the former husband the power to force a sale. At the time of the bankruptcy proceeding, the former wife had not decided to sell the marital home. That contingency did not occur until the fall of 2007, at which point the right of first refusal transformed into an option. See Gleason v. Norwest Mortgage, Inc., 243 F.3d 130, 139 (3d Cir.2001). An "option" is a contract by which the owner of property agrees with another that he shall have the right to buy the property at a fixed price within a certain time. See Hoik v. Snider, 294 Ala. 318, 321, 316 So.2d 675, 677 (1975). Although the option had monetary value as of the time of these proceedings, i.e., the difference between the market value of the marital home and $130,000, as the former husband's bankruptcy attorney testified without contradiction, at the time of the bankruptcy proceeding it did not. Because the right of first refusal had no monetary value, it could not have been liquidated and used to satisfy any creditor claims in the former husband's bankruptcy proceeding. Thus, by listing the right of first refusal in his bankruptcy schedules, the value of the property in the estate would not have changed and the bankruptcy discharge conditions would have been the same.
In her appellate briefs to this court, the former wife does not offer any evidence or argument as to how the bankruptcy court may have been misled because of the failure of the former husband to list the right of first refusal in his bankruptcy schedules. Consequently, we must consider the former husband's evidence and arguments on this point to be uncontradicted.
"Our standard of review in a summary judgment case is well settled. The summary judgment was proper if there was no genuine issue of material fact and [the movants] were entitled to a judgment as a matter of law. Rule 56, Ala. R. Civ. P. [The movants] had the burden to make a prima facie showing that no genuine issue of material fact existed and that they were entitled to a judgment as a matter of law. Long v. Jefferson Cty., 623 So.2d 1130, 1132 (Ala. 1993). If [the movants] made that showing, then the burden shifted to [the nonmovant] to present evidence creating a genuine issue of material fact so as to avoid the entry of a judgment against [the nonmovant]. Id. In deciding whether there was a genuine issue of material fact, we view the evidence in the light most favorable to the nonmovant and *1258 resolve all reasonable doubts against the movant. Id. The applicable standard of review is the `substantial evidence' rule. § 12-21-12, Ala.Code 1975. `Substantial evidence' is defined as `evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989)."
Duckett v. Wilson Hotel Mgmt. Co., 669 So.2d 977, 978 (Ala.Civ.App.1995). Based on the foregoing standard of review, we hold that the trial court did not err in entering a summary judgment in favor of the former husband. We therefore affirm the summary judgment.
AFFIRMED.
THOMPSON, P.J., and PITTMAN, BRYAN, and THOMAS, JJ., concur.
NOTES
[*] Note from the reporter of decisions: This decision was released by the Alabama Supreme Court under the date February 12, 2010. This decision was actually released to the public on February 16, 2010.
|
ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
The Boeing Company ) ASBCA No. 59858
)
Under Contract No. F33657-01-C-0047 )
APPEARANCES FOR THE APPELLANT: Andrew E. Shipley, Esq.
Seth H. Locke, Esq.
Perkins Coie LLP
Washington, DC
APPEARANCES FOR THE GOVERNMENT: E. Michael Chiaparas, Esq.
DCMA Chief Trial Attorney
Charles W. Goeke, Esq.
Senior Trial Attorney
Defense Contract Management Agency
Philadelphia, PA
ORDER OF DISMISSAL
The dispute has been settled. The appeal is dismissed with prejudice.
Dated: 24 November 2015
Administrative Judge
Acting Chairman
Armed Services Board
of Contract Appeals
I certify that the foregoing is a true copy of the Order of Dismissal of the Armed
Services Board of Contract Appeals in ASBCA No. 59858, Appeal of The Boeing
Company, rendered in conformance with the Board's Charter.
Dated:
JEFFREYD. GARDIN
Recorder, Armed Services
Board of Contract Appeals
|
52 Md. App. 281 (1982)
GINGER ROUNTREE
v.
LERNER DEVELOPMENT COMPANY ET AL.
No. 1552, September Term, 1981.
Court of Special Appeals of Maryland.
Decided July 20, 1982.
The cause was argued before MOYLAN and MOORE, JJ., and MORRIS TURK, Associate Judge of the Fifth Judicial Circuit, specially assigned.
Ronald M. Miller for appellant.
Alan R. Siciliano for appellees.
MOYLAN, J., delivered the opinion of the Court.
*282 On January 15, 1977, the appellant, Ginger Ruth Rountree, slipped and fell on a step covered with ice leading from her apartment in the University Square Garden Apartments in Greenbelt, Maryland. She sustained a fracture of her left shoulder and extensive damage to her right knee cartilage. As a result, she brought suit against the Lerner Corporation and the Lerner Development Company, the owner and operator, respectively, of the University Square Garden Apartments. The case was tried before a jury in the Circuit Court for Prince George's County, with Judge Samuel Meloy presiding. At the end of the appellant's case, Judge Meloy granted the defendant/appellees' motion for a directed verdict, ruling as a matter of law that the appellant had assumed the risk of her fall. On this appeal from the judgment entered against her, the appellant contends that the trial court erred in directing a verdict against her.
In assessing the correctness of the court's ruling, we proceed to examine the evidence in the light most favorable to the appellant. The appellant and her sister rented an apartment, described at 122 Westway Apartment Number 103, at the University Square Garden Apartments in June, 1975. The apartment complex is a large one with at least forty separate apartment buildings. It was owned by the appellee Lerner Corporation and managed by the appellee Lerner Development Company. Lerner Development Company was responsible for the exterior maintenance and upkeep of the apartments, including removal of ice and snow from the walkways and steps leading to the apartments.
During January, 1977, the metropolitan Washington area experienced heavy precipitation, including snow and ice. The day before the accident, January 14, 1977, the appellant left her place of employment at the Department of Justice around 6:00 p.m. and arrived at her apartment around 6:30 p.m. She thereafter went to Waldorf, Maryland, to a concert. There was a drizzling rain. She left the concert at approximately 10:00 p.m. and returned to her home in Greenbelt at approximately 12:30 a.m. The weather had become more severe. There was a freezing rain. Conditions *283 on the street were glassy and slick. She parked her car at the Jewish Community Center parking lot, which she testified was the only safe and available parking area that evening, and walked to her apartment building. The steps on which she fell the next day were wet but not covered with ice, and she had no trouble going down the steps leading from Westway to her apartment building.
On Saturday morning, the appellant awoke at 5:30 or 6:00 a.m. She was required to work overtime that day to prepare the Congressional budget charts. She went to her balcony, which faced the 124-126 Westway buildings, and noticed an accumulation of ice and snow. From her apartment, however, she could not see the steps on which she ultimately fell but only the buildings behind her apartment and the lower sidewalk leading to the rear parking lot. Although she normally started work at 9:00 a.m., because of the weather conditions she decided to leave her apartment late so that the streets and pathways could be cleared.
The appellant left her apartment building around 9:00 a.m. Seeing the snow and ice on the sidewalk, she proceeded with great caution. The sidewalk between her building and the four steps leading to a sidewalk directly adjacent to Westway was approximately 160 feet long. She walked alongside the sidewalk, where there was caked snow. When she reached the steps, she got back onto the sidewalk to go across a small drainage culvert and up the steps. She had to use the steps because there was a steep bank next to the steps on both sides which was impassable. She testified that when she reached the steps, "I knew it was slick and icy, so I would have to be very careful because these steps you take one or two steps per step and they are downhill; they slant back to you, so that it was going to be extremely difficult for me to get up these steps because of the way they slant." Additionally, there was no handrail or grip to aid her in ascending the stairs. The steps were wide and elongated. The appellant was able to traverse the first two steps. As she attempted to step from the third step onto the top step, however, her left foot slipped out from under her while she *284 was raising her right foot. She fell face forward, spread-eagle fashion. She was unable to get back on her feet for some time and kept sliding backwards on the downward-slanted icy steps. When she finally managed to get to the sidewalk, she looked down to her right to the next group of apartments and saw men clearing the sidewalks.
Taking that version of the facts most favorable to the appellant, we have no difficulty in concluding that there was at least a jury issue as to whether she was free of having assumed the risk. Both the appellant and the appellee seem obsessed with the question of whether the appellant did or did not have knowledge of the icy and dangerous condition of the walkways and steps. That is simply one of two limitations on the defense of assumption of risk, however. As Professor Prosser points out in his Law of Torts, (4th ed. 1971), at p. 447:
"The defense of assumption of risk is in fact quite narrowly confined and restricted by two requirements: first, that the plaintiff must know and understand the risk he is incurring, and second, that his choice to incur it must be entirely free and voluntary."
With respect to that second restriction on the availability of the defense, Prosser explains, at p. 450:
"The second important limitation upon the defense of assumption of risk is that the plaintiff is not barred from recovery unless his choice is a free and voluntary one. There must first of all, of course, be some manifestation of consent to relieve the defendant of the obligation of reasonable conduct. It is not every deliberate encountering of a known danger which is reasonably to be interpreted as evidence of such consent. The jaywalker who dashes into the street in the middle of the block, in the path of a stream of cars driven in excess of the speed limit, certainly does not manifest consent that they shall use no care and run him down. On the contrary, *285 he is insisting that they shall take immediate precautions for his safety; and while this is certainly contributory negligence, it is not assumption of risk."
On the facts of this case, there may have been clear and decisive evidence of a "deliberate encountering of a known danger" but that fact, even if assumed to be true, is not dispositive of the issue of assumption of risk. In this case, the tenant had a right to egress from her apartment. She had a right to assume that the landlord would take all appropriate steps to make safe egress possible. Whether the landlord did or did not is another issue and not the one upon which this case was decided. There was evidence that the appellant delayed her departure for work so that both the sun and the workmen would have additional time to ameliorate the icy conditions. There was evidence that there was no alternative route of egress from the appellant's apartment. Under the circumstances, the further exposition of Prosser is highly pertinent at p. 451:
"Even where the plaintiff does not protest, the risk is not assumed where the conduct of the defendant has left him no reasonable alternative. Where the defendant puts him to a choice of evils, there is a species of duress, which destroys all idea of freedom of election. Thus a shipper does not assume the risk of a defective car supplied him by a carrier where the only alternative to shipment in it is to let his cabbages rot in the field; and a tenant does not assume the risk of the landlord's negligence in maintaining a common passageway when it is the only exit to the street. In general, the plaintiff is not required to surrender a valuable legal right, such as the use of his own property as he sees fit, merely because the defendant's conduct has threatened him with harm if the right is exercised.... By placing him in the dilemma, the defendant has deprived him of his freedom of choice, *286 and so cannot be heard to say that he has voluntarily assumed the risk." (Emphasis supplied)
If there had been evidence in this case that there was a reasonable and safe alternative route of egress open to the appellant and that she deliberately chose the shorter but more dangerous route, that might well establish as a matter of law that she was guilty of having assumed the risk. She would have run afoul of Professor Prosser's admonition, at pp. 451-452:
"... [W]here there is a reasonably safe alternative open, the plaintiff's choice of the dangerous way is a free one, and may amount to both contributory negligence and assumption of risk."
In this case, however, there was no evidence of any "reasonably safe alternative open" and there was, at the very least, a jury issue with respect to the "voluntary assumption" restriction on the defense of assumption of risk.
Judgment reversed; case remanded for further proceedings; costs to be paid by appellees.
|
685 F.Supp. 107 (1988)
David C. BROOKS
v.
JOHNSON AND JOHNSON, INC., et al.
Civ. A. No. 88-2395.
United States District Court, E.D. Pennsylvania.
May 10, 1988.
David Brooks, pro se.
*108 MEMORANDUM
JOSEPH S. LORD, III, Senior District Judge.
Plaintiff's initial complaint was dismissed for lack of subject matter jurisdiction. For the reasons that follow, plaintiff's amended complaint will be dismissed in part.
Plaintiff alleges that he was given the medication Haldol by medical personnel. Haldol is allegedly manufactured by defendant McNeilab, allegedly a wholly owned subsidiary of defendant Johnson and Johnson. Plaintiff alleges that defendants deliberately "suppressed the fact that Haldol has ... approximately 350 ... serious and deadly side effects." Plaintiff alleges that defendants' actions violated the Mental Health Patient "Bill of Rights" as set forth at 42 U.S.C. § 10841.[1]
Section 10841 provides, in relevant part:
§ 10841. Restatement of Bill of Rights
It is the sense of the Congress that ... each State should review and revise, if necessary, its laws to ensure that mental health patients receive the protection and services they require, and that in making such review and revision, States should take into acount ... the following:
(1) A person admitted to a program or facility for the purpose of receiving mental health services should be accorded the following:
(A) The right to appropriate treatment and related services
. . . . .
(C) The right to ongoing participation, in a manner appropriate to such person's capabilities, in the planning of mental health services to be provided such person ... and, in connection with such participation, the right to be provided with a reasonable explanation, in terms and language appropriate to such person's condition and ability to understand, of
. . . . .
(iii) the nature and significant possible adverse effects of recommended treatments;
A threshold issue is whether § 10841 creates any enforceable rights or duties. See Student Coalition for Peace v. Lower Merion School, 776 F.2d 431, 438 (3d Cir.1985). It appears that this is an issue of first impression.[2] The statutory language, setting forth "the sense of Congress," and recommending that States "should" review their laws regarding mental health patients is plainly precatory. Also, the "rights" set forth are for the State's consideration when undertaking this review. Significantly, this section neither requires nor prohibits any action on the part of the states or any other party. In addition, the legislative history is consistent with Congress's use of precatory statutory language. The Senate Report declares that the Bill of Rights is a "statement of Congressional viewpoint," and emphasizes that this section "further encourages each state to review and revise its laws to insure that mentally ill persons receive the protection and service they require." S.Rep. at 9, reprinted in 1986 U.S.Code Cong. & Admin.News at 1369 (emphasis added). Finally, another section of the Act states that § 10841 "shall not be construed as establishing any new rights for mentally ill individuals." 42 U.S.C. § 10851.
Thus, § 10841 resembles the "Bill of Rights" provision in the Developmentally Disabled Assistance and Bill of Rights Act of 1975, 42 U.S.C. § 6010. Section 6010 sets forth certain Congressional "findings respecting the rights of persons with developmental disabilities." One such finding is *109 that developmentally disabled persons "have a right to appropriate treatment." 42 U.S.C. § 6010(1). Notwithstanding these "findings" setting forth enumerated rights, the Supreme Court held that § 6010 did not create enforceable rights and obligations. Pennhurst State School v. Halderman, 451 U.S. 1, 101 S.Ct. 1531, 67 L.Ed. 2d 694 (1981). The Pennhurst Court found that § 6010 speaks "merely in precatory terms," id. at 18, 101 S.Ct. at 1540, and thus "does no more than express a Congressional preference for certain kinds of treatment." Id. at 19, 101 S.Ct. at 1541.
The language of § 10841 is even more clearly precatory than that analyzed in Pennhurst. While § 6010 flatly declared that the developmentally disabled "have" certain enumerated rights, § 10841 merely encourages states to review their laws and, in making this review, to "take into account" the recommendation that mental health patients "should be accorded" the rights enumerated in § 10841(1). The statutory language and legislative history compel the conclusion that § 10841 does not create enforceable rights and duties.
Even if § 10841 did create judicially enforceable rights or duties, I find that the section does not provide a private right of action. The Act provides mental health patients no express private right of action to enforce § 10841. Thus, the relevant inquiry is whether the Act provides an implied right of action.
"[T]he touchstone for the existence of an implied remedy is `the intent of the legislature.'" United States v. FMC Corp., 717 F.2d 775, 780 (3d Cir.1983) (quoting Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n., 453 U.S. 1, 13, 101 S.Ct. 2615, 2622, 69 L.Ed.2d 435 (1981)). The inquiry into intent starts with "the statutory language, particularly [with] the provisions ... for enforcement and relief." Sea Clammers, 453 U.S. at 13, 101 S.Ct. at 2623. Subchapter 1 of the Act provides for an elaborate protection and advocacy system for mentally ill patients. It provides for the establishment of independent "systems" designed to "protect and advocate the rights of mentally ill patients." 42 U.S.C. § 10803(2)(A). These "systems" shall have access to both patient's records, 42 U.S.C. § 10805(a)(4), and State facilities, 42 U.S.C. § 10805(a)(3), and authority to "investigate incidents of abuse and neglect of mentally ill individuals." 42 U.S.C. § 10805(a)(1)(A). More importantly, the "systems" have authority to "pursue administrative, legal, and other appropriate remedies" on behalf of mentally ill individuals and to insure the protection of such individuals. 42 U.S.C. § 10805(a)(1)(B), (C).
The Supreme Court has emphasized the significance of the existence of alternative remedies: "It is an elementary canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it." Sea Clammers, 453 U.S. at 14-15, 101 S.Ct. at 1538 (quoting Trans-America Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 19, 100 S.Ct. 242, 246, 62 L.Ed.2d 146 (1980)). See also Touche Ross & Co. v. Redington, 442 U.S. 560, 571-74, 99 S.Ct. 2479, 2486-87, 61 L.Ed.2d 82 (1979); Cannon v. Univ. of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979); Student Coalition, 776 F.2d at 440. Indeed, in cases "where the Supreme Court has found no implied private cause of action, the legislation at issue has invariably contained other express remedies." Student Coalition, 776 F.2d at 440.
The legislative history supports my conclusion that Congress did not intend to authorize a private cause of action. The Senate approved a version of the Mental Health Systems Act that had a subsection providing that:
If a person demonstrates to the court that he or she has exhausted the grievance procedure to which he or she is entitled under Section 301(a)(12), or that exhaustion of such procedure cannot afford timely relief, he or she may bring a civil action for the violation of any of his or her rights under this part in an appropriate United States district court, without regard to the amount in controversy.
. . . . .
*110 Subsection (d) makes clear that only persons to whom the rights of Section 301(a) [the Bill of Rights] apply are given a cause of action under this part.
S.Rep. No. 712, 96th Cong., 2d Sess., at 122-23, reprinted in 1980 U.S.Code Cong. & Admin.News 3372, 3488. However, this provision was not part of the Act as originally enacted, or as reenacted as § 10841. Rather, Congress provided for the elaborate protection and advocacy system discussed above. The legislative history clearly reveals that Congress squarely considered, and rejected, the provision of a private right of action.
As in Sea Clammers, the
structure of the [Act] and [its] legislative history both lead [me] to conclude that Congress intended that private remedies in addition to those expressly provided should not be implied. Where, as here, Congress has made clear that implied private actions are not contemplated, the courts are not authorized to ignore this legislative judgment.
Sea Clammers, 453 U.S. at 18-19, 101 S.Ct. at 2625.
Although the Act does not afford plaintiff rights that may be enforced through a private cause of action, plaintiff also alleges that defendants are liable under theories of negligence and products liability. It appears from the complaint that plaintiff and defendant McNeilab are both citizens of Pennsylvania. However, from the allegations of the complaint, it appears that diversity jurisdiction is proper as to state law claims against defendant Johnson and Johnson. There is nothing in the complaint regarding the citizenship "Executive Officers (John Does)". Since the burden is on plaintiff to allege the grounds of subject matter jurisdiction, the suit cannot proceed against those anonymous individuals. For this reason, plaintiff's state law claims may proceed only against defendant Johnson and Johnson.
An appropriate order follows.
ORDER
AND NOW, this 10th day of May, 1988, it is ORDERED AS FOLLOWS:
1. Plaintiff's claims against all parties other than Johnson and Johnson, Inc. are DISMISSED as frivolous pursuant to 28 U.S.C. § 1915(d).
2. Plaintiff's claims under 42 U.S.C. § 9501, recodified at 42 U.S.C. § 10841, are DISMISSED as frivolous pursuant to 28 U.S.C. § 1915(d).
3. As for the remaining claims, the complaint is to be filed, the summons is to issue, service is to be made upon defendant, and a copy of this Memorandum and Order is to be directed to the plaintiff and defendant.
4. All original pleadings and other papers submitted for consideration to the Court in this case are to be filed with the Clerk of this Court, and shall be accompanied by proof that such documents have been served upon or mailed to counsel for the opposing party (or directly to any party acting pro se). The proof shall show the day and manner of service, i.e.:
"I, (name), do hereby certify that a true and correct copy of the foregoing (name of pleading or other paper) has been served upon the (name(s) of person(s) served) by placing the same in the U.S. Mail, properly addressed, this (date) day of (month), (year).
____________
(Signature)"
If any pleading or other paper submitted for filing does not include a certificate of service upon the opposing party or counsel for the opposing party, it may be disregarded by the Court.
5. Any request for court action shall be set forth in a motion, properly filed and served. The parties shall file copies of all motions and all papers relating to motions with the clerk of the court, including proof of service upon opposing parties. All other requirements of the Federal Rules of Civil Procedure and Local Rules are to be followed.
6. No direct communication is to take place with the district judge with regard to this case. All relevant information and papers are to be directed to the Clerk of the Court.
*111 7. In the event the summons is returned unexecuted it is plaintiff's responsibility to ask the Clerk of the Court to issue an alias summons and to provide the clerk with defendant's correct address, so that service can be made.
8. The parties should notify the clerk's office when there is an address change. Failure to do so could result in court orders or other information not being timely delivered, which could affect the parties' legal rights.
NOTES
[1] Plaintiff's complaint alleges violations of 42 U.S.C. § 9501. However, § 9501 was reenacted as part of the "Protection and Advocacy for Mentally Ill Individuals Act of 1986," P.L. 99-319, (the "Act") and is presently codified at 42 U.S.C. § 10841. See S.Rep. No. 109, 99th Cong., 2d. Sess. at 2, 3, 4, 9, reprinted in 1986 U.S.Code Cong. & Admin.News 1361 at 1362, 1363, 1364, 1369 (hereinafter cited as "S.Rep.").
[2] A Lexis search reveals that no reported federal case has even mentioned § 10841. Similarly, no reported federal case considered whether § 9501 afforded substantive rights or created a private right of action.
|
459 S.E.2d 520 (1995)
The STATE, Respondent,
v.
Henry H. HENDRIKS and John M. Hendriks, Appellants.
No. 2369.
Court of Appeals of South Carolina.
Submitted June 6, 1995.
Decided July 3, 1995.
*521 Brian S. Wade, Pawleys Island, for appellants.
Buford S. Mabry, Jr., and James A. Quinn, of South Carolina Dept. of Natural Resources, Charleston, for respondent.
GOOLSBY, Judge:
Henry H. Hendriks and John M. Hendriks were charged and convicted of violating state restrictions on the use of gill nets for shad fishing, set forth in S.C.Code Ann. § 50-17-422 (Supp.1994). The Hendrikses contend the statute under which they were convicted does not apply to the shad fishing technique they employed and ask this court to construe the meaning of the statute. We affirm.[1]
On March 18, 1993, a South Carolina Department of Natural Resources Enforcement Officer observed the Hendrikses shad fishing with a gill net. He noted the gill net was pulled taut and barely moving and the Hendrikses' boat was drifting approximately three times faster than the gill net. When the Hendrikses pulled the gill net into their boat to retrieve the catch, the officer saw a concrete block attached to the gill net. The officer arrested the Hendrikses for shad fishing with gill nets in violation of state law.
The statute at issue reads, pertinent part, as follows:
During the open season for taking American shad in state waters of the Atlantic Ocean, all gill nets having a stretch mesh size between four and one-half inches and ten inches stretched mesh must be drift fished and may not be staked, anchored, or otherwise set in a fixed position. For the purpose of this section, anchored includes the use of concrete blocks or any other weight which is not a part of the natural construction of the gill net.
S.C.Code Ann. § 50-17-422 (Supp.1994).
The Hendrikses argue this statute does not "prohibit the use of a gill net with a weight attached if the net is drift fished and not set in a fixed position." We disagree.
The primary rule of statutory construction is to ascertain and give effect to the legislature's intent or purpose as expressed in the statute. Green v. Thornton, 265 S.C. 436, 219 S.E.2d 827 (1975); Alton Newton Evangelistic Ass'n, Inc. v. South Carolina Employment Sec. Comm'n, 284 S.C. 302, 326 S.E.2d 165 (Ct.App.1985). Also, the legislature's intent should be ascertained primarily from the plain language of the statute. 82 C.J.S. Statutes § 322(b), at 571 (1953). Unless *522 a statute requires a different interpretation, the words used in the statute must be given their ordinary meaning. Hughes v. Edwards, 265 S.C. 529, 220 S.E.2d 231 (1975).
Here, the legislature included plain language in the statute that specifically defines "anchoring" gill nets, which is proscribed by the statute, to include attaching concrete blocks to the natural construction of gill nets. Because the Hendrikses were convicted for precisely this act, we affirm the conviction.
AFFIRMED.
HOWELL, C.J., and HEARN, J., concur.
NOTES
[1] Because oral argument would not aid the court in resolving the issues, we decide this case with-out oral argument.
|
CLD-089 NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 11-4235
___________
BAKARR BANGURA,
Appellant
v.
ELWYN, INC.
____________________________________
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 11-cv-02793)
District Judge: Honorable Lawrence F. Stengel
____________________________________
Submitted for Possible Summary Action
Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6
January 12, 2012
Before: RENDELL, HARDIMAN and ROTH, Circuit Judges
(Opinion filed: February 22, 2012)
_________
OPINION OF THE COURT
_________
PER CURIAM
Bakarr Bangura appeals from the District Court’s order dismissing his complaint
against Elwyn, Inc. (“Elwyn”). We will vacate and remand for further proceedings.
Bangura was employed by Elwyn until it terminated him following a workplace
incident on September 4, 2008. Bangura later filed suit pro se alleging that Elwyn
terminated him on the basis of his Senegalese national origin. Bangura used a form
employment discrimination complaint. The first page states that “This action is brought
for discrimination in employment pursuant to (check only those that apply). . . .” The
page then lists four options, including Title VII of the Civil Rights Act of 1964 and the
Pennsylvania Human Relations Act (“PHRA”), 43 Pa. Cons. Stat. §§ 951-963. Bangura
did not check the options for Title VII or any other federal statute. Instead, he checked
only the option for the PHRA.
Elwyn filed a Rule 12(b)(6) motion to dismiss Bangura’s complaint on the sole
ground that his PHRA claim is barred by his failure to file a charge with the Pennsylvania
Human Relations Commission within 180 days of the alleged discrimination. See 43 Pa.
Cons. Stat. § 959(h). By order entered November 4, 2011, the District Court granted the
motion and dismissed Bangura’s complaint on that sole ground. Neither the motion nor
the District Court’s order referred to any potential federal claim. Bangura appeals.
“This court has an obligation to inquire sua sponte . . . into the jurisdiction of the
District Court to enter the order on appeal.” United States v. Higgs, 504 F.3d 456, 457
(3d Cir. 2007). In this case, the District Court did not specify the basis for asserting
jurisdiction over Bangura’s complaint, and we are unable to discern any. The complaint
provides addresses for both Bangura and Elwyn in Pennsylvania, so there does not appear
to be any basis for diversity jurisdiction under 28 U.S.C. § 1332. Nor does the District
Court’s ruling suggest any basis for federal question jurisdiction under 28 U.S.C. § 1331.
2
Bangura did not expressly invoke Title VII or any other federal statute in his complaint,
and the District Court did not address any potential federal claim. Instead, the District
Court appears to have construed Bangura’s complaint to assert only a claim under the
PHRA. A claim under that state statute does not create a federal question. See, e.g.,
Kautz v. Met-Pro Corp., 412 F.3d 463, 466 (3d Cir. 2005) (noting that the Court had
supplemental jurisdiction over PHRA claim under 28 U.S.C. § 1367); Williams v. Phila.
Hous. Auth. Police Dep’t, 380 F.3d 751, 758 (3d Cir. 2004) (same). Thus, if Bangura’s
complaint is construed to include only a claim under the PHRA, then the District Court
appears to have lacked jurisdiction to address it on the merits.
For that reason, we will vacate and remand. On remand, the District Court should
consider the basis for its jurisdiction and conduct such further proceedings as may be
necessary in that regard. Given Bangura’s pro se status, the District Court should also
address whether his complaint asserts a Title VII claim. See Dluhos v. Strasberg, 321
F.3d 365, 369 (3d Cir. 2003) (noting that courts must liberally construe pro se filings and
“apply the applicable law, irrespective of whether the pro se litigant has mentioned it by
name”).1 In light of our disposition, we express no opinion on the merits of Bangura’s
complaint or on the District Court’s basis for dismissing his claim under the PHRA.
1
We do not suggest that the District Court has been insensitive to Bangura’s pro se
status. To the contrary, the District Court initially ordered him to file either a federal or
state right to sue letter before service of the complaint, but later directed service even
though he does not appear to have filed such a letter. (Dist. Ct. Docket Nos. 2 & 4.) The
District Court also granted his motion for counsel (id. 10), though he later withdrew his
request and decided to proceed pro se (id. 13).
3
|
Slip Op. 17-
UNITED STATES COURT OF INTERNATIONAL TRADE
KALLE USA, INC,
Plaintiff,
Before: Gary S. Katzmann, Judge
v.
Court No. 13-00003
UNITED STATES,
Defendant.
OPINION
[Plaintiff's motion for summary judgment is denied and defendant's cross-motion for summary
judgment is granted.]
Dated:1RYHPEHU
Frederick Van Arnan, Jr., Barnes, Richardson, & Colburn, LLP, of New York, argued for plaintiff.
Of counsel on the brief was Alan Goggins.
Hardeep K. Josan, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department
of Justice, of New York, NY, argued for defendant. With her on the brief were Joyce R. Branda,
Acting Assistant Attorney General, Amy M. Rubin, Assistant Director, and Lisa M. Gonzalo, as
Trial Attorney. Of counsel on the brief was Paula Smith, Office of the Assistant Chief Counsel
for International Trade Litigation, U.S. Department of Customs & Border Patrol of New York.
With them on the supplemental brief was Benjamin C. Mizer and on the Defendant’s Response to
Court Order was Chad A. Readler, Acting Assistant Attorney General of New York.
Katzmann, Judge: How should food casings composed of both textile and plastic be
classified for the purposes of determining what tariff rate should apply to their importation? In
this action, Plaintiff Kalle USA Inc. (“Kalle”) contests the denials of its administrative protests by
U.S. Customs and Border Protection (“Customs”) and disputes the tariff classification under the
Court No. 13-00003 Page 2
Harmonized Tariff Schedule of the United States (2010) (HTSUS) 1 which Customs determined
for two of its food casing products, NaloProtex G1 (“G1”) and NaloProtex G2 (“G2”).
Specifically, Kalle contends that the G1 and G2 products—which are used for encasing raw
sausage, scalded-emulsion sausage, cooked-meat emulsion sausage, ham and other processed meat
products, and cheese—should be classified as plastics, while the United States (“the Government”)
argues that Customs correctly classified the casings as made up textile products. Joint Statement
of Undisputed Facts ¶ 4, Sept. 19, 2014, ECF No. 23 (“JSUF”). Before the court is Kalle’s Motion
for Summary Judgment (“Pl.’s Br.”) and the Government’s Cross Motion for Summary Judgment
on behalf of Customs (“Def.’s Br.”). The court concludes that Customs correctly classified the G1
and G2 casings, and therefore denies Kalle’s Motion for Summary Judgment and grants the
Government’s Cross Motion for Summary Judgment.
BACKGROUND
1. The Merchandise at Issue
a. Facts Common to Both NaloProtex G1 and NaloProtex G2 Casings
The following facts are not in dispute. The merchandise at issue is known as NaloProtex
G1 and NaloProtex G2 casings (“G1 and G2 casings”). JSUF ¶ 2. These products are imported
into the United States from Germany by Kalle USA Inc. Id.; Oral Argument, ECF No. 68. The
G1 and G2 products are casings used for encasing raw sausage, scalded-emulsion sausage, cooked-
meat emulsion sausage, ham and other processed meat products, and can also be used for encasing
cheese. JSUF ¶ 4.
1
All references to section notes, chapter notes, headings or subheadings contained herein are to
2010 HTSUS.
Court No. 13-00003 Page 3
The starting material for both the G1 and G2 casings is a textile flat sheeting. Id. ¶ 5. The
textile fabric portion of the casings is coated in plastic on one side, the outer side. Id. ¶ 6. U.S.
Patent 8,147,933 B2, dated April 3, 2012, describes the Gl and G2 casings as “textile food casings”
consisting of a “textile envelope” with a “longitudinal seam,” and a plastic “coating applied in an
amount to allow said textile structure to be recognized within the coated casing.” Id. ¶ 7. The
inner textile fabric layer and the outer plastic coating layer together provide a casing that has
several desirable features, including the ability to absorb dyes and aroma substances and transfer
these substances into the encased product. Id. ¶ 8. The textile material gives the casings strength
and shape, and provides a matrix to hold the plastic coating. Id. ¶ 9. The textile material also
ensures the mechanical stability of the casings. Id. ¶ 10. The plastic coating material “only fills
the interstitial spaces between the textile fibers” and is applied in a thin enough layer that the textile
structure of the casing is still recognizable. Id. ¶¶ 11–13. The plastic coating serves to prevent
moisture transmission both into and out of the casings. Id. ¶ 14. During manufacture of the G1
and G2 casings, the coated textile sheeting is trimmed to the appropriate width, folded over on its
sides to form a tube, and then fixed with a seam by gluing. Id. ¶ 15. The casings are flexible. Id.
¶ 16. Both products are imported in rolls of flattened tubes which are wound around a cardboard
core. Id. ¶ 17. Both G1 and G2 casings are used for the same applications. Id. ¶ 18. The key
difference between the G1 and G2 casings is that the G2 casing is stronger and thinner than the
G1, giving the G2 better tear strength and better machineability. Id. ¶ 19. After importation, Kalle
cuts the G1 and G2 casings to lengths required by customers, impregnates the casings with flavors,
and then sells the casings to the processed meat industry. Id. ¶ 20. Kalle's customers stuff the
casings with cooked sausages, ham, or other processed meats to create finished products for end
users. Id. ¶ 21.
Court No. 13-00003 Page 4
b. Characteristics Particular to NaloProtex G1 Casings
The G1 casing was imported under one of the nine entries at issue, JJ8-0290211-I. Id. ¶
34. The commercial invoice describes NaloProtex G1 casings as “150-210-23 NaloProtex _ FP
Dia. 108 Flw. 165.0,” with or without other words, letters, or numbers of description. Id. ¶ 35.
The G1 product is described by Kalle in its marketing literature as a “textile barrier casing” with
transfer properties. Id. ¶ 36. Pursuant to U.S. Customs and Border Protection Laboratory Report
Number CH20090925, dated October 5, 2009 (“Lab Report”), the outer surface of the G1 casing
consists of a rubber/plastic material and an inner surface layer of woven fabric. Id. ¶ 37. The
woven fabric portion of the G1 casing is composed of 100%, by weight, man-made viscose rayon
and polyester fibers. Id. ¶ 38; Lab Report. The G1 casing is composed of approximately 63%
rubber/plastic and 37% woven fabric. JSUF ¶ 39; Lab Report. The rubber/plastic material is
composed of polyvinylidene chloride. JSUF ¶ 40; Lab Report. The woven fabric portion of the
G1 casing is a textile. JSUF ¶ 41. The textile and plastic portions of the G1 casings are both
measurable layers. Id. ¶ 42. The textile portion of the G1 casing has a thickness of l80 μm, a
weight of 60g/m2, and a cost of .64 Euro/165cm. Id. ¶ 43. The textile portion of the G1 casing is
coated in plastic on the outer surface. Id. ¶ 44. The plastic portion of the G1 casing has a thickness
of 30μm, a weight of 90g/m2, and a cost of 1.10 Euro/165cm. Id. ¶ 45. The thickness of the textile
fabric portion of the G1 casing is six times greater than the thickness of the plastic coating. Id. ¶
46. The G1 casing comes in a variety of widths and diameters, ranging from 58 mm wide (when
flat) and 37 mm in diameter to 245 mm wide and 156 mm in diameter. Id. ¶ 47. All sizes of the
NaloProtex G1 casings are imported in 500 m rolls. Id. ¶ 48 (as corrected). 2
2
During Oral Argument on October 11, 2017, the parties moved to correct errors in the record,
stating that the G1 and G2 casings come in rolls of 500 m (meters), rather than the 500 mm
indicated in the JSUF. ECF No. 68. The court granted their motion. Id.
Court No. 13-00003 Page 5
c. Characteristics Particular to NaloProtex G2 Casings
Eight of the nine entries at issue contain G2 casings, including entry numbers JJ8-0289660-
2, JJ8-0289688-3, JJ8-0289987-9, JJ8-0290123-8, JJ8-0290210-3, JJ8-0290213-7, JJ8-0290581-
7, and JJ8-0290584-1. Id. ¶ 22. The NaloProtex G2 casings are designated on the commercial
invoices as “NaloProtex G2” with or without other words, letters, or numbers of description. Id.
¶ 23. The G2 product is described by Kalle in its marketing literature as a “textile casing with
barrier and transfer properties.” Id. ¶ 24. The G2 casing consists of a high strength woven
polyester fabric with a plastic polymer coating that is part acrylic and part polyvinylidene chloride.
Id. ¶ 25. The woven fabric of the NaloProtex G2 product is a textile. Id. ¶ 26. The textile and
plastic portions of the G2 are both measurable layers. Id. ¶ 27. The textile fabric portion of the
G2 casing has a thickness of 140 μm, a weight of 67 g/m2, and a cost of .96 Euro/165cm. Id. ¶ 28.
The textile portion of the G2 casing is coated with plastic on the outer surface. Id. ¶ 29. The
SODVWLFSRUWLRQRIWKH*FDVLQJKDVDWKLFNQHVVRIȝPDZHLJKWRI g/m2, and a cost of .73
Euro/165 cm. Id. ¶ 30. The thickness of the textile portion of the G2 is seven times greater than
the thickness of the plastic coating. Id. ¶ 31. The G2 casings range in width (when flat) from 111
mm to 245 mm, and in diameter from 74 mm to 156 mm. Id. ¶ 32. All sizes of the G2 casings are
imported in 500 m rolls. Id. ¶ 33 (as corrected); see supra n.2.
2. Procedural History
Kalle was the importer of record of nine entries of casings (described above) made through
the port of Chicago, Illinois, between July 26, 2010 and August 11, 2010. Summons, Jan. 4, 2013,
ECF No. 1. The entries were liquidated between June 10, 2011 and June 24, 2011 subheading
6307.90.98 HTSUS “Other made up articles, including dress patterns: . . . Other . . . Other” subject
to duty at 7% ad valorem. Id.; Def.’s Br. at 1. Kalle—believing that the casings should have been
Court No. 13-00003 Page 6
classified under subheading 3917.39.0050, HTSUS “Plastics and Articles thereof . . . Tubes, pipes
and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics: . . .Other . . .
Other,” subject to duty at 3.1%—contested the liquidations by filing a protest on September 10,
2011. Summons; Pl.’s Br. at 1. Customs denied the protest on November 5, 2012, based on the
reasoning from its earlier classification decisions involving the same products. 3 Id.; see
HQ155323, Application for Further Review of protest No. 3901-10-100443: Naloprotex G-1
Sausage Casing (March 30, 2012), Def.’s Br. Ex. A (“HQ155323”); NY N086782, The tariff
classification of sausage casings from China (Dec. 10, 2009), Def.’s Br. Ex. B (“NY N086782”).
This action followed. Kalle moved for summary judgment on September 29, 2014. Pl.’s Br. The
Government cross-moved for summary judgment on November 24, 2014. Def.’s Br.
Oral argument was held on September 24, 2015, and the court requested supplemental
briefing on October 9, 2015. ECF No. 43. Both parties filed their supplemental briefs on
November 20, 2015 and their supplemental replies on December 23, 2015. Pl.’s Suppl. Br. 1, ECF
No. 47; Def.’s Suppl. Br. 1, ECF No. 48; Pl.’s Suppl. Reply 1, ECF No. 52; Def.’s Suppl. Reply
1, ECF No. 53. The court again ordered supplemental briefing on March 7, 2016, and both parties
filed their supplemental briefs in response to that order on April 22, 2016. Order, ECF No. 54;
Pl.’s Suppl. Br. 2, ECF No. 56; Def.’s Suppl. Br. 2, ECF No. 55. Kalle and the Government also
filed supplemental replies on May 20, 2016. Pl.’s Suppl. Reply 2, ECF No. 59; Def.’s Suppl.
Reply 2, ECF No. 60.
3
Both HQ155323 and NY 086782 address protests and classification inquiries that occurred
prior to Protest 3901-11-100951--at issue here--and the record does not contain a separate report
specifically addressing Protest 3901-11-100951. See HQ155323, NY N086782. But HQ155323
and NY 086782 involve the same G1 and G2 casings, and the Government states that these
earlier decisions contain the basis for Customs’ classifications. Def.’s Br. at 7 n.4.
Court No. 13-00003 Page 7
On August 10, 2017, the case was reassigned to a new judge, and oral argument was held
anew on October 11, 2017. Reassignment Order, ECF No. 62; Oral Argument, ECF No. 68.
APPLICABLE LAW
1. Jurisdiction and Standard of Review
The Court has jurisdiction over this action under 28 U.S.C. § 1581(a) (2012), according to
which the court has jurisdiction over an action brought under section 515 of the Tariff Act of 1930
as amended, 19 U.S.C. § 1515 (2012) to contest a denial of a protest by customs. 4
In a tariff classification case, the Court proceeds de novo. Park B. Smith, Ltd. v. United
States, 347 F.3d 922, 924 (Fed. Cir. 2003); see Customs Courts Act of 1980 § 301, 28 U.S.C. §
2640(a)(1)(2012) (directing the Court of International Trade to review classification rulings on
“the basis of the record made before the court”). The Court first considers whether “the
government’s classification is correct, both independently and in comparison with the importer’s
alternative.” Value Vinyls, Inc. v. United States, 568 F.3d 1374, 1377, 1380 (Fed. Cir. 2009);
Jarvis Clark Co. v. United States, 733 F.2d 873, 878 (Fed. Cir. 1984). The plaintiff has the burden
of showing the government’s determined classification to be incorrect. Park B. Smith, 347 F.3d
at 925; Jarvis, 733 F.2d at 876. If the plaintiff meets that burden, the Court has an independent
duty to arrive at “the correct result, by whatever procedure is best suited to the case at hand.”
Value Vinyls, 568 F.3d at 1377 (citing Jarvis, 733 F.2d at 878) (emphasis in original).
While the Court accords respect to Customs’ classification rulings relative to their “power
to persuade,” United States v. Mead Corp., 533 U.S. 218, 235 (2001) (citing Skidmore v. Swift &
Co., 323 U.S. 134, 140 (1944)), the Court also has “an independent responsibility to decide the
4
Further citations to the Tariff Act of 1930, as amended, are to the relevant provision of Title 19
of the U.S. Code, 2012 edition.
Court No. 13-00003 Page 8
legal issue of the proper meaning and scope of HTSUS terms.” Wilton Indus., Inc. v. United States,
741 F.3d 1263, 1265 (Fed. Cir. 2013) (citing Warner-Lambert Co. v. United States, 407 F.3d 1207,
1209 (Fed. Cir. 2005)).
2. Summary Judgment under Rule 56
The Court grants summary judgment “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” USCIT R. 56(a).
In a tariff classification action, summary judgment is appropriate when “the material facts of what
the merchandise is and what it does are not at issue.” Wilton Indus., 741 F.3d at 1266–67; Bausch
& Lomb, 148 F.3d 1363, 1365 (Fed. Cir. 1998). In ruling on a summary judgment motion, the
Court credits the non-moving party’s evidence and draws all inferences in that party’s favor. Hunt
v. Cromartie, 526 U.S. 541, 552 (1999) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986)). “Only disputes over facts that might affect the outcome of the suit under the governing
law will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248. The
issue here is whether either the Government or Kalle is entitled to summary judgment. The
analysis turns on the meaning and scope of the relevant tariff provisions. See Wilton Indus., 741
F.3d at 1266–67; Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1378 (Fed. Cir. 1999); Bausch
& Lomb, 148 F.3d at 1365–66.
3. Tariff Classification under the General Rules of Interpretation HTSUS
“In a classification case, the court construes the relevant (competing) classification
headings, a question of law; determines what the merchandise at issue is, a question of fact; and
then determines ‘the proper classification under which [the merchandise] falls, the ultimate
question in every classification case and one that has always been treated as a question of law.’”
Court No. 13-00003 Page 9
Bausch & Lomb, 148 F.3d at 1366; see Wilton Indus., 741 F.3d at 1266. When there is no factual
dispute regarding the merchandise, the resolution of the classification issue turns on the first step,
determining the proper meaning and scope of the relevant tariff provisions. See Wilton Indus.,
741 F.3d at 1266–67; Carl Zeiss, 195 F.3d at 1378; Bausch & Lomb, 148 F.3d at 1365–66.
“The HTSUS scheme is organized by headings, each of which has one or more
subheadings; the headings set forth general categories of merchandise, and the subheadings
provide a more particularized segregation of the goods within each category.” Alcan Food
Packaging (Shelbyville) v. United States, 773 F.3d 1364, 1366 (Fed. Cir. 2014) (quoting Wilton
Indus., 741 F.3d at 1266). The Court considers chapter and section notes of the HTSUS in
resolving classification disputes because they are statutory law, not interpretative rules. See Arko
Foods Intern., Inc. v. United States, 654 F.3d 1361, 1364 (Fed. Cir. 2011) (citations omitted). As
such, they are binding on the Court. See Park B. Smith, Ltd., 347 F.3d at 929.
Tariff classification is determined according to the General Rules of Interpretation
(“GRIs”), and, if applicable, the Additional U.S. Rules of Interpretation (“ARIs”). The “General
Rules of Interpretation govern classification of merchandise under the HTSUS, and are applied in
numerical order.” Honda of Am. Mfg. v. United States, 607 F.3d 771, 773 (Fed. Cir. 2010)
(internal quotations and citations omitted).
Under GRI 1, “classification shall be determined according to the terms of the headings
and any relative section or chapter notes.” 5 See Faus Grp., Inc. v. United States, 581 F.3d 1369,
5
GRI 1 provides that:
The table of contents, alphabetical index, and titles of sections, chapters and sub-
chapters are provided for ease of reference only; for legal purposes, classification
shall be determined according to the terms of the headings and any relative section
or chapter notes and, provided such headings or notes do not otherwise require,
according to the following [GRI] provisions.
Court No. 13-00003 Page 10
1372 (Fed. Cir. 2009) (citing Orlando Food Corp. v. United States, 140 F.3d 1437, 1440 (Fed. Cir.
1998)). Unless there is evidence of “contrary legislative intent, HTSUS terms are to be construed
according to their common and commercial meanings.” La Crosse Tech., Ltd. v. United States,
723 F.3d 1353, 1358 (Fed. Cir. 2013); Russell Stadelman & Co. v. United States, 242 F.3d 1044,
1048 (Fed. Cir. 2001). In ascertaining a term’s common meaning, the court may “consult
lexicographic and scientific authorities, dictionaries, and other reliable information” or may rely
on its “own understanding of the terms used.” Baxter Healthcare Corp. v. United States, 182 F.3d
1333, 1337–38 (Fed. Cir. 1999); see Millennium Lumber Distrib., Ltd. v. United States, 558 F.3d
1326, 1328–29 (Fed. Cir. 2009) (citation omitted); Carl Zeiss, 195 F.3d at 1379 (citation omitted).
“Where a tariff term has various definitions or meanings and has broad and narrow interpretations,
the court must determine which definition best expresses the congressional intent.” Richards Med.
Co. v. United States, 910 F.2d 828, 830 (Fed. Cir. 1990). Although not binding law, courts also
look to the Explanatory Notes (“ENs”) to the Harmonized Commodity Description and Coding
System, maintained by the World Customs Organization, as persuasive authority on how to
interpret and apply HTSUS provisions. See Home Depot, 491 F.3d at 1336 (“Although the
Explanatory Notes ‘do not constitute controlling legislative history,’ they are nonetheless intended
to offer guidance in clarifying the scope of HTSUS subheadings.” (citing Mita Copystar Am. v.
United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994))); Deckers Outdoor Corp. v. United States, 714
F.3d 1363, 1367 n.1 (Fed. Cir. 2013); see generally Alcan Food Packaging (Shelbyville) v. United
States, 37 CIT ___, 929 F. Supp. 2d 1338 (2013) (relying extensively on the guidance provided by
the ENs to resolve the case under GRI 1), aff'd, 771 F.3d 1364 (Fed. Cir. 2014).
“The HTSUS is designed so that most classification questions can be answered by GRI 1.”
Telebrands Corp. v. United States, 36 CIT___, ___, 865 F. Supp. 2d 1277, 1280 (2012), aff’d, 522
Court No. 13-00003 Page 11
Fed. App’x 915 (Fed. Cir. 2013). “What is clear from the legislative history of the World Customs
Organization and case law is that GRI 1 is paramount. . . . The HTSUS is designed so that most
classification questions can be answered by GRI 1, so that there would be no need to delve into
the less precise inquiries presented by GRI 3.” Id. 6 A product is classifiable under GRI 1 if it “is
described in whole by a single classification heading or subheading” of the HTSUS; however,
“[w]hen goods are in character or function something other than as described by a specific statutory
provision--either more limited or more diversified--and the difference is significant, then the goods
cannot be classified” pursuant to GRI 1. La Crosse Tech., 723 F.3d at 1358 (quoting CamelBak
Prods., LLC v. United States, 649 F.3d 1361, 1364 (Fed. Cir. 2011)).
DISCUSSION
Applying GRI 1, the court concludes that Customs correctly classified the G1 and G2
casings under heading 6307.90.98 (“Other made up articles, including dress patterns: . . . Other . .
. Other,” subject to duty at 7% ad valorem) rather than under heading 3917.39.0050 (“Plastics and
Articles thereof . . . Tubes, pipes and hoses and fittings therefor (for example, joints, elbows,
flanges), of plastics: . . .Other . . . Other,” subject to duty at 3.1%). Heading 6307 covers “made
up” articles of textiles. 6307; Chapter 63, Note 1. Given that G1 and G2 casings are composed of
a plastic-coated textile assembled into a casing by gluing, they meet the requirements of heading
6307. JSUF ¶¶ 5–6, 15. Kalle argues that the casings instead fall into heading 3917 because (1)
Section XI, Note 1(h) automatically excludes textile-plastic composites from Chapter 63; (2) even
if Note 1(h) does not exclude them, Chapter 59, Note 2 places them in Chapter 39; and (3) gluing
the ends of the textile-plastic sheeting together to make a tube does not meet the definition of
“made up” under Chapter 63. The court concludes that (1) Section XI, Note 1(h) does not
6
Regarding GRI 3 and sequential antecedent GRI 2, see infra n.7.
Court No. 13-00003 Page 12
automatically exclude the casings from Chapter 63; (2) none of the provisions in Chapter 59, Note
2 that place products in Chapter 39 apply to the casings; and (3) the gluing process does fit the
requirements for “made up” as defined by the HTSUS provisions and case law. Thus, the casings
were properly classified under 6307. Because this case can be resolved under GRI 1, resort to the
subsequent sequenced GRI provisions, to which the parties refer in their alternative arguments, is
unnecessary. 7
7
Kalle argued in the alternative that, should GRI 1 not resolve the case, the casings would be
classified under heading 3917 according to GRI 3(a). The Government, for its part, contended that
GRI 3(a) could not resolve the case and that the casings should be classified under heading 6307
according to GRI 3(b).
GRI 2(b) provides that principles of GRI 3 should be applied to classify composite products
like the G1 and G2 casings when GRI 1 does not resolve the issue. See GRI 2(b). GRI 3(a) states
that:
The heading which provides the most specific description shall be
preferred to headings providing a more general description.
However, when two or more headings each refer to part only of the
materials or substances contained in mixed or composite goods or
to part only of the items in a set put up for retail sale, those headings
are to be regarded as equally specific in relation to those goods, even
if one of them gives a more complete or precise description of the
goods.
Kalle argues that 3917 is more specific because, according to Chapter 39, Note 8,
heading 3917 explicitly includes sausage casings and other lay-flat tubing, while heading 6307
broadly covers “other made up articles.” Pl.’s Br. at 18–19. The Government contends that the
two provisions are equally specific because (1) only headings themselves, and not chapter notes,
are considered under GRI 3(a); (2) the G1 and G2 casings can be used for food products other
than sausage, and thus are not “sausage casings;” and (3) GRI 3(a) explicitly states that “when
two or more headings each refer to part only of the materials or substances contained in mixed or
composite goods or to part only of the items in a set put up for retail sale, those headings are to
be regarded as equally specific in relation to those goods, even if one of them gives a more
complete or precise description of the goods.” Def.’s Br. at 24–26.
The Government further argues that, because GRI 3(a) could not resolve the issue, the
casings should be classified under heading 6307 according to GRI 3(b), which states provides
that:
Mixtures, composite goods consisting of different materials or made
up of different components, and goods put up in sets for retail sale,
Court No. 13-00003 Page 13
1. Application of GRI 1
GRI 1 requires that the classification be determined “according to the terms of the headings
and any relative section or chapter notes.” The court thus first considers the headings identified
by the parties and any additional headings that might merit consideration. See Park B. Smith, 347
F.3d at 928; Gerson Co. v. United States, 41 CIT ___, Slip Op. 17-96 (Aug. 2, 2017) (citing GRI
1), appeal filed, No. 18-1011 (Fed. Cir. Oct. 4, 2017). Given that the casings are composed of
textile and plastic components, the court here considers provisions covering each type of material.
Kalle and the Government have identified 3917 and 6307, respectively, as the HTSUS headings
under which they believe the casings should be classified. Because the texts of headings 5407 and
5903 also appear to address materials contained in the casings and are relevant for analyzing the
applicability of 6307 (discussed infra), the court considers those headings in its analysis as well.
See Value Vinyls, 568 F.3d at 1377 (citing Jarvis, 733 F.2d at 878) (stating that the court has an
independent duty to arrive at “the correct result, by whatever procedure is best suited to the case
at hand” (emphasis in original)). These headings are listed in numerical order and with the heading
terms relevant to the classification issue presented by this case:
which cannot be classified by reference to 3(a), shall be classified as
if they consisted of the material or component which gives them
their essential character, insofar as this criterion is applicable.
The Government claims that the “essential character” of the casings is imparted by the
textile component because the textile performs the indispensable function of absorbing and
transferring dyes, aroma, and flavoring to encased food--which is marketed by Kalle as a primary
advantage of the G1 and G2 casings--and because the textile ensures mechanical stability. Def.’s
Br. at 27–28. Kalle, however, contends that the classification issue cannot be determined under
GRI 3(b), because both the textile’s transfer qualities and the plastic’s moisture control property
are equally indispensable to the casings’ function, and thus, equally essential aspects of its
character. Def.’s Reply Br. at 11.
As suggested by both parties and noted in the text supra, however, the court can resolve
this case according to GRI 1, and thus does not reach the parties’ arguments under GRI 2(b), 3(a),
and 3(c).
Court No. 13-00003 Page 14
3917 Tubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges),
of plastics.
5407 Woven fabrics of synthetic filament yarn, including woven fabrics obtained from
materials of heading 5404.
5903 Textile fabrics impregnated, coated, covered or laminated with plastics, other than
those of heading 5902.
6307 Other made up articles, including dress patterns.
Heading 3917 is part of Section VII of HTSUS, and headings 5407, 5903, and 6307 are within
Section XI. The court now turns to a consideration of the relevant section and chapter notes for
the headings.
a. Relevant Section, Chapter, and Explanatory Notes
The court finds the following notes to be particularly relevant to the candidate headings and to
the court’s analysis overall.
i. Chapter 39, Note 1
[In relevant part:]
“[t]he expression [plastics], however, does not apply to materials regarded as textile
materials of section XI.”
ii. Chapter 39, Note 2(p)
“2. This chapter does not cover:
(p) Goods of section XI (textiles and textile articles).”
iii. Chapter 39, Note 8
“For the purposes of heading 3917, the expression “tubes, pipes and hoses” means
hollow products, whether semimanufactures or finished products, of a kind
generally used for conveying, conducting or distributing gases or liquids (for
example, ribbed garden hose, perforated tubes). This expression also includes
sausage casings and other lay-flat tubing.”
iv. Chapter 39, Explanatory Notes
[In relevant part:]
Court No. 13-00003 Page 15
“Plastics and textile combinations
Wall or ceiling coverings which comply with Note 9 to this Chapter are classified
in heading 39.18. Otherwise, the classification of plastics and textile combinations
is essentially governed by Note 1 (h) to Section XI, Note 3 to Chapter 56 and Note
2 to Chapter 59.”
v. Section XI Note 1(h)
“This section does not cover:
(h) Woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated,
covered or laminated with plastics, or articles thereof, of chapter 39.”
vi. Section XI, Note 7(e)
“For the purposes of this section, the expression “made up” means:
(e) Assembled by sewing, gumming or otherwise (other than piece goods consisting
of two or more lengths of identical material joined end to end and piece goods
composed of two or more textiles assembled in layers, whether or not padded).”
vii. Section XI, Note 8
[In relevant part:]
“[f]or purposes of Chapters 50 to 60 . . . except where the context otherwise
requires, Chapters 56 to 59 do not apply to goods made up within the meaning of
[N]ote 7 above.”
viii. Chapter 54, Note 1
“Throughout the tariff schedule, the term "man-made fibers" means staple fibers
and filaments of organic polymers produced by manufacturing processes, either:
(a) By polymerization of organic monomers to produce polymers such as
polyamides, polyesters, polyolefins or polyurethanes, or by chemical
modification of polymers produced by this process (for example, poly(vinyl
alcohol) prepared by the hydrolysis of poly(vinyl acetate)); or
(b) By dissolution or chemical treatment of natural organic polymers (for
example, cellulose) to produce polymers such as cuprammonium rayon
(cupro) or viscose rayon, or by chemical modification of natural organic
polymers (for example, cellulose, casein and other proteins, or alginic acid),
to produce polymers such as cellulose acetate or alginates.”
ix. Chapter 59, Note 1
Court No. 13-00003 Page 16
“Except where the context otherwise requires, for the purposes of this chapter the
expression "textile fabrics" applies only to the woven fabrics of chapters 50 to 55
and headings 5803 and 5806, the braids and ornamental trimmings in the piece of
heading 5808 and the knitted or crocheted fabrics of headings 6002 to 6006.”
x. Chapter 59, Note 2
“Heading 5903 applies to:
(a) Textile fabrics, impregnated, coated, covered or laminated with plastics,
whatever the weight per square meter and whatever the nature of the plastic material
(compact or cellular), other than:
(3) Products in which the textile fabric is either completely embedded in
plastics or entirely coated or covered on both sides with such material,
provided that such coating or covering can be seen with the naked eye with
no account being taken of any resulting change of color (chapter 39);
(5) Plates, Sheets or strip of cellular plastics, combined with textile fabric,
where the textile is present merely for reinforcing purposes (chapter 39).”
xi. Chapter 63, Note 1
“Sub-Chapter I [63.01–63.07] applies only to made up articles, of any textile
fabric.”
xii. Chapter 63, Explanatory Notes
[In relevant part:]
“This Chapter [63] includes:
(1) Under headings 63.01 to 63.07 (sub-Chapter I) made up textile articles of any
textile fabric (woven or knitted fabric, felt, nonwovens, etc.) which are not more
specifically described in other Chapters of Section XI or elsewhere in the
Nomenclature. (The expression “made up textile articles” means articles made up
in the sense defined in Note 7 to Section XI).” (emphasis in original).
b. Analysis
The G1 and G2 casings are composite products of textile and plastic materials. JSUF ¶¶
5–6. Although a “GRI 3(b) analysis is often applied to resolve classification disputes involving
composite goods . . . here it is not necessary because both tariff provisions [3917 and 6307]
Court No. 13-00003 Page 17
contemplate goods that have been combined with other materials.” Alcan Food, 929 F. Supp. 2d
at 1348; see Chapter 39, ENs; Chapter 59, Note 2; Chapter 63, ENs.
The Government argues that Customs correctly classified the G1 and G2 casings under
heading 6307--“other made up articles” of textiles--because the casings are created by gluing the
ends of sheets partially composed of textiles together, as described supra. 6307; JSUF ¶ 15. Kalle
contends that the casings cannot be classified under heading 6307 for essentially three reasons.
First, Kalle argues that Section XI, Note 1(h) excludes the casings from any consideration under
Section XI because it states that Section XI does not include “fabrics…impregnated, coated,
covered or laminated with plastics, or articles thereof, of chapter 39.” Section XI, Note 1(h). Kalle
advances a theory that “a section note would trump the chapter note[,]” and cites Mita Copystar,
160 F.3d at 714, for support. Pl.’s Br. at 11–12. Second, Kalle contends that, even if Section XI,
Note 1(h) does not automatically exclude them, the casings fall within one of the exclusions to
heading 5903 and therefore are properly classified in Chapter 39. Finally, Kalle submits that the
casings are not “made up” and therefore cannot be covered by 6307.
The court concludes that the G1 and G2 casings are made up articles composed of a textile
fabric under the HTSUS, and therefore are properly classified under heading 6307, for the reasons
stated below.
i. Section Notes Are Not Entitled to Greater Weight than Chapter Notes
The court is not persuaded by Kalle’s assertion that section notes always trump chapter
notes in a classification case. The court does not read Mita Copystar as standing for that
proposition, although the Court of Appeals for the Federal Circuit happened to analyze Note 2 of
section VI before analyzing Note 2(b) of Chapter 90 in that case. 160 F.3d at 711–14.
Additionally, such an assertion is unsupported by the text of GRI 1, which does not state that a
Court No. 13-00003 Page 18
section note trumps a chapter note, or indicate any preferential treatment for section notes over
chapter notes. Instead, GRI 1 requires that the court apply “any relative section or chapter notes.”
(emphasis added). Further, Chapter 59, Note 2 8 and Chapter 56, Note 3 9--which address chapters
contained within Section XI--distinguish, in detail, between products that belong in Chapter 39
and in Chapters 56 or 59. If Section XI, Note 1(h) excluded all such textile-plastic composite
products, as Kalle suggests, then these provisions detailing how to determine which textile-plastic
composites are excluded from chapters within Section XI would serve no purpose. Adopting
Kalle’s interpretation would thus render these provisions surplusage. Finally, the ENs to Chapter
39 instruct that, for products such as the sausage casings which are combinations of plastics and
8
Chapter 59, Note 2 is set forth supra at pp.15–16.
9
Chapter 56, Note 3 provides:
“Headings 5602 and 5603 cover respectively felt and nonwovens,
impregnated, coated, covered or laminated with plastics or rubber
whatever the nature of these materials (compact or cellular).
Heading 5603 also includes nonwovens in which plastics or rubber
forms the bonding substance.
Headings 5602 and 5603 do not, however, cover:
(a) Felt impregnated, coated, covered or laminated with
plastics or rubber, containing 50 percent or less by weight
of textile material or felt completely embedded in plastics
or rubber (chapter 39 or 40);
(b) Nonwovens, either completely embedded in plastics or
rubber, or entirely coated or covered on both sides with
such materials, provided that such coating or covering can
be seen with the naked eye with no account being taken of
any resulting change of color (chapter 39 or 40); or
(c) Plates, sheets or strip of cellular plastics or cellular rubber
combined with felt or nonwovens, where the textile
material is present merely for reinforcing purposes (chapter
39 or 40).
Court No. 13-00003 Page 19
textiles, “the classification of plastics and textile combinations is essentially governed by Note l(h)
to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59,” indicating that these three notes
should be considered together when Customs, or this Court, is making a classification
determination. See ENs to Chapter 39. In sum, the court finds Kalle’s section note primacy
argument unavailing.
Assuming arguendo that section notes had priority over chapter notes, however, Section
XI, Note 1(h) would not automatically preclude the casings from being classified in Chapter 63.
Note 1(h) only states that Section XI does not include “fabrics… impregnated, coated, covered or
laminated with plastics, or articles thereof, of chapter 39,” not that all such products are excluded.
Section XI, Note 1(h) (emphasis added). Thus, a product which is not classifiable under Chapter
39 would not be excluded from Section XI under Note 1(h).
The question remains: do the casings fall under Chapter 39? Kalle’s argument seems to
presume that, because heading 3917 covers “tubes, pipes and hoses…of plastic,” including
“sausage casings and other lay-flat tubing” and the casings here are flattened, hollow tubes
partially made of plastic, they must be classified under 3917 and are therefore excluded from
Section XI by Note 1(h). Pl.’s Br. at 8; see 3917; Chapter 39, Note 8; JSUF ¶ 17. However, not
all such plastic tubes are classified under Chapter 39; in fact, Chapter 39, Notes 1 and 2(p) state
explicitly that Chapter 39 excludes goods covered by Section XI, indicating that some textile-
plastic composite products are classifiable under Section XI and not categorically excluded by
Section XI, Note 1(h). Chapter 39, Note 1; Chapter 39, Note 2(p). Further, as noted, supra, the
Chapter 39 ENs indicate that the court should look to not just Section XI, Note 1(h), but to Chapter
56, Note 3 and Chapter 59, Note 2 as well to distinguish between goods of Chapter 39 and Section
XI. Indeed, based on an analysis of these provisions, the court concludes that the casings do not
Court No. 13-00003 Page 20
belong in Chapter 39, but rather, under the Government’s proffered heading 6307. As required for
a product to be classified under 6307, the casings are (1) of any textile fabric and (2) made up, as
discussed below. Chapter 63, Note 1; ENs, Chapter 63.
ii. The Plastic and Textile Sheeting is a “Textile Fabric”
According to the undisputed facts, the woven portions of the G1 and G2 casings are textiles
created from, respectively, man-made viscose rayon and polyester fibers and a polyester fabric
that is part acrylic and part polyvinylidene chloride. JSUF ¶¶ 25, 26, 38, 41. The G1 and G2
casings are also coated in plastic. JSUF ¶ 6. Heading 5903 contains “textile fabrics impregnated,
coated, covered or laminated with plastics,” including “the woven fabrics of chapters 50 to 55.”
5903; Chapter 59, Note 1. Heading 5407 contains “woven fabrics of synthetic filament yarn,
including woven fabrics obtained from materials of heading 5404.” 5407. Further, woven textiles
composed of the man-made materials such as those contained in the woven portion of the G1 and
G2 casings are considered textile fabrics under Chapter 54, as explicitly stated in Chapter 54, Note
1:
Throughout the tariff schedule, the term "man-made fibers" means
staple fibers and filaments of organic polymers produced by
manufacturing processes, either:
(a) By polymerization of organic monomers to produce
polymers such as polyamides, polyesters, polyolefins or
polyurethanes, or by chemical modification of polymers
produced by this process (for example, poly(vinyl alcohol)
prepared by the hydrolysis of poly(vinyl acetate)); or
(b) By dissolution or chemical treatment of natural organic
polymers (for example, cellulose) to produce polymers such
as cuprammonium rayon (cupro) or viscose rayon, or by
chemical modification of natural organic polymers (for
example, cellulose, casein and other proteins, or alginic
acid), to produce polymers such as cellulose acetate or
alginates.
Court No. 13-00003 Page 21
Chapter 54, Note 1 (emphasis added). Thus, the textile component in the G1 and G2 casings
appears to fall under heading 5903.
Heading 5903 does not contain all textile fabrics coated in plastic, however, as Section XI,
Note 1(h), and Chapter 59, Note 2, make clear. Note 1(h) states that woven fabrics coated with
plastic and articles thereof that belong in Chapter 39 are excluded from all of Section XI, which
includes 5903. Section XI, Note 1(h). Chapter 59, Note 2(a) provides the exclusions relevant to
5903, two of which could potentially apply to the textile and plastic sheeting at issue here:
(3) Products in which the textile fabric is either completely
embedded in plastics or entirely coated or covered on both sides with
such material, provided that such coating or covering can be seen
with the naked eye with no account being taken of any resulting
change of color (chapter 39);
(5) Plates, Sheets or strip of cellular plastics, combined with textile
fabric, where the textile is present merely for reinforcing purposes
(chapter 39).
Chapter 59, Note 2(a).
The court turns first to Note 2(a)(3). Under this provision, products must be (1) completely
embedded in plastics or (2) entirely coated or covered on both sides with plastic. As has been
noted, courts give all terms “their common commercial meaning,” relying on their own
understanding of the terms used, lexicographic and scientific authorities, dictionaries, and other
reliable information sources. Millennium Lumber Distrib., 558 F.3d at 1328–29 (citation omitted);
Carl Zeiss, 195 F.3d at 1379 (citation omitted).
Webster’s New World Dictionary defines “embedded” as “set or fix[ed] firmly in a
surrounding mass” and “completely” as “full[y], whole [ly], entire[ly].” Webster's New World
Dictionary, Third College Edition 285, 442–443 (1988). Thus, for a textile to be completely
Court No. 13-00003 Page 22
embedded in plastic, it must be entirely firmly fixed in the plastic. Here, it is undisputed that the
G1 and G2 casings are only coated on one side and that the coating material only fills the interstitial
spaces between the textile fibers. JSUF ¶¶ 6, 13. Thus, the textile is not embedded in the plastic
for the purposes of 2(a)(3).
Kalle, citing the McGaw-Hill Dictionary of Scientific and Technical Terms (Fifth Ed.
1994) and the Shorter Oxford English Dictionary, vol 1, A-M (Fifth Ed. 2002), provides a slightly
different definitions of “embed”--“[t]o enclose in a matrix; to surround” and “to fix firmly in a
surrounding mass of solids or semi-solid materials,” respectively--and argues that the casing’s one-
sided coating fits these definitions. Pl.’s Suppl. Br. 1 at 8–9. However, as the Government points
out:
to “surround” means “to form an enclosure around; encompass” or
“to be present on all or nearly all sides of; encircle.” Webster’s New
World Dictionary (Third College Ed. 1988) (emphasis added). Here,
it is undisputed that the textile fabric of the casings is coated with a
thin layer of plastic on only one side. JSUF at ¶¶ 6, 12; see also Kalle
Supp. Br. at 1, 9. Thus, the textile fabric is not “completely
embedded” in plastics – i.e., fully fixed on all sides in a surrounding
mass of plastics.
Def.’s Suppl. Reply Br. 1 at 6 (emphasis original).
“Coated” means having “a layer of some substance, as paint, over a surface,” while
“covered” means “to place something on, over, or in front of, so as to conceal, protect, or close.”
Webster's New World Dictionary at 267, 320. So, for a textile to be “entirely coated or covered
on both sides” with plastic, it must be completely coated or covered with the plastic material on
each side.
Although Kalle provides very similar definitions of “coated” and “entirely,” it suggests
that because “the plastic completely and entirely coats one side of the textile fabric,” it is “coated”
for purposes of 5903, Note 2(a)(3), and therefore should be properly classified in Chapter 39. Pl.’s
Court No. 13-00003 Page 23
Suppl. Br. 1 at 10–11. But products must be coated on both sides, not just one, as shown by reading
the plain text of the provision: “(3) Products in which the textile fabric is either completely
embedded in plastics or entirely coated or covered on both sides with such material.” Chapter 59,
Note 2 (emphasis added); see Bradford Indus., Inc. v. United States, 21 CIT 665, 668, 968 F. Supp.
732, 733, 736 (1997), aff'd, 152 F.3d 1339 (Fed. Cir. 1998) (finding, when addressing the related
provision for nonwoven fabrics, that “Plaintiff failed to demonstrate that the nonwoven component
of the subject merchandise is ‘completely embedded’ or ‘entirely coated or covered’” because only
one side of the fabric was coated or covered in plastic). Here, it is undisputed that the G1 and G2
casings are only coated on one side and that the coating material only fills the interstitial spaces
between the textile fibers. JSUF ¶¶ 6, 13. So, the casings are neither embedded nor covered or
coated on both sides, and therefore do not fall within the Note 2(a)(3) exclusion.
Turning to Chapter 59, Note 2(a)(5), the court must interpret the meaning of “merely for
reinforcing purposes.” Something “reinforcing” is “designed to provide additional strength (as in
a weak area).” Webster's Third New International Dictionary (unabridged) at 1915 (1993).
“Merely” means “no more than: barely, only, simply, solely.” Id. at 1413. Taken together, the
phrase means that the textile must have no other purpose beyond strengthening the plastic.
The court finds that the textile component serves purposes beyond merely reinforcing the
plastic. Here, it is undisputed that the textile also serves to “absorb dyes and aroma substances
and transfer these substances to the encased [food] product.” JSUF ¶ 8. According to the G1
patent, the textile “directly stores the dyes, aroma substances and/or flavorings and can release
them to a food situated therein. In contrast to [previous casings], the textile material
simultaneously ensures the mechanical stability of the casing.” Patent 1. The absorption and
transfer properties conferred by the textile material are discussed extensively in the patent and
Court No. 13-00003 Page 24
Kalle’s advertising materials as one of the most important features of the product. Patent; Pl.’s Br.
Ex. E, Kalle Marketing Literature Pertaining to the NaloProtex G1; Pl.’s Br. Ex. D, Kalle
Marketing Literature Pertaining to the NaloProtex G2. Thus, since the casings serve more than a
reinforcing purpose, the casings also do not fall within the 2(a)(5) exclusion.
The Bradford case further supports the court’s interpretation of these provisions. The court
in Bradford interpreted the nearly identical HTSUS provisions and notes regarding nonwoven
textile fabrics coated in plastic, and came to the same conclusions regarding the meaning of the
terms. 10 Bradford Indus., Inc. v. United States, 152 F.3d 1339 (Fed. Cir. 1998). In addition, that
court classified the products at issue there--imitation leather articles composed of a nonwoven
textile component and polyurethane on one side--under the textile provision. Id. at 1342.
For these reasons, the casings are composed of a textile fabric, as required for classification
under 6307. 11
iii. The Casings Are “Made Up”
The second requirement for classification under 6307 is that the article is “made up.”
Section XI, Note 7(e) defines “made up” for the purposes of Chapter 63 as “[a]ssembled by sewing,
gumming or otherwise.” Section XI, Note 7(e); ENs, Chapter 63.
According to Kalle, “[t]he gluing of one edge of the sausage casing to the other edge to
form a tube is not an assembly, as that term involves two or more components being joined
together, and does not apply to operations involving only one component.” Pl.’s Br. at 8. Kalle
10
Heading 5603 covers nonwoven textiles coated in plastic. The exclusions contained in
Chapter 56, Note 3--which is interpreted by the court in Bradford--are nearly identical to those in
Chapter 59, Note 2, at issue here. See supra n.9.
11
Chapter 59 does not include “made up” articles. Because the court finds that the casings are
made up, see infra, they cannot be classified under 5903. Section XI, Note 8.
Court No. 13-00003 Page 25
cites The American Heritage Dictionary of The English Language, 110 (3rd Ed. 1992) (defining
assemble as “[t]o fit together the parts or pieces of”) and ABB, Inc. v. United States, 421 F.3d
1274, 1276 (Fed. Cir. 2005) for support. ABB states that:
[b]ecause the term “assemble” is not defined in the HTSUS, “its
common or dictionary meaning” governs. Rohm & Haas Co. v.
United States, 727 F.2d 1095, 1097 (Fed. Cir. 1984). According to
Webster's Third New International Dictionary 131 (1993),
‘assemble’ means “to fit together various parts of [sic] so as to make
into an operative whole.” (Emphasis in original).
ABB, 421 F.3d at 1276.
Kalle also claims that L 'Eggs Products, Inc. v. United States, 13 CIT 40, 704 F. Supp.
1127 (1989) and Peg Bandage, Inc. v. United States, 17 CIT 1337 (1993) (not reported in the
Federal Supplement) buttress its argument concerning the definition of assembled, because both
cases, in addition to ABB, use the same definition. Pl.’s Reply at 7–8.
The court is not persuaded by Kalle’s argument that the casings are not
“made up,” and therefore cannot be covered by 6307. Pl.’s Br. at 8. Here, the tubes are
manufactured using two components: the textile-plastic sheeting and glue. Kalle’s argument based
on L’Eggs and Peg Bandage is unavailing: the court instead finds that those cases support the
conclusion that the casings are “made up.” In those cases, thread used to sew together a stocking
leg and a cloth bandage, respectively, was considered a second component for purposes of
assembly under 6307. L’Eggs, 13 CIT at 49–50; Peg Bandage, 17 CIT at 1348–49. The court
does not see how this principle is any different when considering the glue and the textile/plastic
sheet in this case.
Further, the court is not persuaded that “assembly,” which is not defined by the HTSUS or
legislative history, requires the joining of two separate components. Although Kalle does rely on
Court No. 13-00003 Page 26
one dictionary definition of assembly, Kalle ignores other definitions which make no mention of
two different parts. See, e.g., Webster’s Third New International Dictionary, 131 (2002) (defining
“assemble” as “2: to bring together: as a: to put or join together, usu. in an orderly way with logical
selection or sequence”); The Random House Dictionary of the English Language, 89 (1969)
(defining “assemble” as “2. to put or fit together”). Additionally, the Federal Circuit in ABB
focused its definition of “assembl[ed]” on the creation of an “operative whole:” a “distinct and
separate commercial entity” that, regardless of the number of parts, is “complete in itself” and
capable of performing its function. ABB, 421 F.3d at 1276–77. Here, as the patent and undisputed
record establish, one of the casings’ purposes is to encase food. See Patent; JSUF ¶ 4. As defined
by The Oxford English Dictionary Online, available at
http://www.oed.com/view/Entry/61610?redirectedFrom=encase#eid (last visited Oct. 30, 2017),
something is encased if it is “put into or enclose[d] within a case or receptacle” or “overla[id],
surround[ed], or hem[med] in as with a case.” The textile-plastic composite material cannot do
that until it is transformed from a flat sheet into a tube--a receptacle capable of surrounding or
enclosing the food products--by the gluing process. Thus, the textile-composite sheeting can only
function as a casing--as an “operative whole”--once its sides are glued together. Therefore, the
casings fall within the definition of “assembled” and “made up” under Section XI, Note 7(e).
CONCLUSION
Given that the casings are made up articles of textile fabric, they are properly classified
under heading 6307. Further, since goods of Section XI--which includes heading 6307--are
excluded from Chapter 39, they cannot be classified under heading 3917. Accordingly, the court
denies Kalle’s motion for summary judgment and grants the Government’s cross motion for
summary judgment.
Court No. 13-00003 Page 27
So Ordered.
/s/ Gary S. Katzmann
Gary S. Katzmann, Judge
Dated: 1RYHPEHU
New York, New York
|
NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS AUG 27 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JUAN CARLOS MUNOZ-MORENO, AKA No. 16-72617
Juan Munoz Moreno Sousa, AKA Juan
Carlos Munoz, Agency No. A205-158-244
Petitioner,
MEMORANDUM*
v.
WILLIAM P. BARR, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted August 7, 2019**
Before: THOMAS, Chief Judge, HAWKINS and McKEOWN, Circuit Judges.
Juan Carlos Munoz-Moreno, a native and citizen of Mexico, petitions for
review of the Board of Immigration Appeals’ (“BIA”) order dismissing his appeal
from an immigration judge’s (“IJ”) decision denying his application for asylum,
withholding of removal, and relief under the Convention Against Torture (“CAT”).
*
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).
Our jurisdiction is governed by 8 U.S.C. § 1252. We review de novo
questions of law, Cerezo v. Mukasey, 512 F.3d 1163, 1166 (9th Cir. 2008), except
to the extent that deference is owed to the BIA’s interpretation of the governing
statutes and regulations, Simeonov v. Ashcroft, 371 F.3d 532, 535 (9th Cir. 2004).
We review for substantial evidence the agency’s factual findings. Zehatye v.
Gonzales, 453 F.3d 1182, 1184-85 (9th Cir. 2006). We deny in part and dismiss in
part the petition.
Even if Munoz-Moreno’s asylum claim is not time-barred, see 8 U.S.C.
§ 1158(a)(2)(B), substantial evidence supports the BIA’s conclusion that it would
fail on its merits. Munoz-Moreno claims he fears he will be persecuted on account
of his membership in three social groups: (1) “the Munoz family”; (2) “person[s]
with tattoos who could be confused as being a gang member by the police”; and (3)
“people who grew up in the United States after leaving Mexico as a child.”
Although Munoz-Moreno raised the first social group, “the Munoz family,” before
the IJ, he did not appeal it to the BIA, so we have no jurisdiction to consider it.
See Barron v. Ashcroft, 358 F.3d 674, 677–78 (9th Cir. 2004) (court lacks
jurisdiction to review claims not presented to the agency). The BIA did not err in
finding that Munoz-Moreno failed to establish membership in a cognizable social
group. See Reyes v. Lynch, 842 F.3d 1125, 1131 (9th Cir. 2016) (in order to
demonstrate membership in a particular group, “[t]he applicant must ‘establish that
2
the group is (1) composed of members who share a common immutable
characteristic, (2) defined with particularity, and (3) socially distinct within the
society in question’” (quoting Matter of M-E-V-G-, 26 I. & N. Dec. 227, 237 (BIA
2014))).
Additionally, substantial evidence supports the BIA’s conclusion that any
persecution Munoz-Moreno might suffer because his tattoos are mistaken for gang
tattoos would bear no nexus to any protected ground. See Zetino v. Holder, 622
F.3d 1007, 1016 (9th Cir. 2010). Our conclusion is not affected by the differing
nexus standards applicable to asylum and withholding of removal claims. Cf.
Barajas-Romero v. Lynch, 846 F.3d 351, 360 (9th Cir. 2017) (discussing Zetino v.
Holder having drawn no distinction between the standards where there was no
nexus at all to a protected ground). Thus, Munoz-Moreno’s asylum and
withholding of removal claims fails.
Substantial evidence supports the agency’s denial of CAT relief because
Munoz-Moreno failed to show it is more likely than not he will be tortured by or
with the consent or acquiescence of the government if returned to Mexico. See
Aden v. Holder, 589 F.3d 1040, 1047 (9th Cir. 2009).
PETITION FOR REVIEW DENIED in part; DISMISSED in part.
3
|
749 F.2d 732
1985 A.M.C. 834
Braunv.Carnival Cruise Lines*
NO. 84-5313
United States Court of Appeals,eleventh Circuit.
NOV 30, 1984
1
Appeal From: S.D.Fla.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 23
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 18-4604
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
TANYATORN GHANJANASAK,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern District of North Carolina, at
Raleigh. James C. Dever III, District Judge. (5:17-cr-00299-D-1)
Submitted: September 26, 2019 Decided: October 10, 2019
Before THACKER, HARRIS, and RICHARDSON, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Raymond C. Tarlton, TARLTON POLK PLLC, Raleigh, North Carolina, for Appellant.
Robert J. Higdon, Jr., United States Attorney, Jennifer P. May-Parker, Assistant United
States Attorney, Phillip A. Rubin, Assistant United States Attorney, OFFICE OF THE
UNITED STATES ATTORNEY, Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Tanyatorn Ghanjanasak pled guilty, pursuant to a plea agreement, to transmitting a
threat to injure in interstate commerce, in violation of 18 U.S.C. § 375(c) (2012). The
district court imposed a downward variant sentence of 12 months and 1 day of
imprisonment. On appeal, Ghanjanasak argues that her guilty plea was not knowing and
voluntary because the court failed to fully explain the nature of the charge and to ensure
that there was a sufficient factual basis for the plea. See Fed. R. Crim. P. 11(b)(1)(G), (3).
We affirm.
Because Ghanjanasak did not move to withdraw her guilty plea in the district court,
we review her challenges to the plea colloquy for plain error. United States v. McCoy, 895
F.3d 358, 364 (4th Cir.), cert. denied, 139 S. Ct. 494 (2018). To prevail under this standard,
Ghanjanasak “must demonstrate not only that the district court plainly erred, but also that
this error affected [her] substantial rights.” United States v. Sanya, 774 F.3d 812, 816 (4th
Cir. 2014). This “means that [she] must demonstrate a reasonable probability that, but for
the error, [s]he would not have pleaded guilty.” Id. (internal quotation marks omitted).
Even if this test is satisfied, “we will not correct any error unless we are convinced that a
refusal to do so would seriously affect the fairness, integrity or public reputation of judicial
proceedings.” Id. (internal quotation marks omitted).
When explaining the nature of the charge to a defendant during a Rule 11 colloquy,
the district “court must take into account both the complexity of the charge and the
sophistication of the defendant.” United States v. DeFusco, 949 F.2d 114, 117 (4th Cir.
1991). Generally, the “court is given a wide degree of discretion in deciding the best
2
method to inform and ensure the defendant’s understanding.” Id. “Although the defendant
must receive notice of the true nature of the charge rather than a rote recitation of the
elements of the offense, the defendant need not receive this information at the plea hearing
itself.” Id. (citation and internal quotation marks omitted). Instead, “a guilty plea may be
knowingly and intelligently made on the basis of detailed information received on
occasions before the plea hearing.” Id. (internal quotation marks omitted). We have,
therefore, not “require[d] the district courts to recite the elements of the offense in every
circumstance.” United States v. Wilson, 81 F.3d 1300, 1307 (4th Cir. 1996). We review a
district court’s finding that the defendant understood the nature of the charge for abuse of
discretion. See DeFusco, 949 F.2d at 117.
Although the district court did not recite the elements of the offense during the Rule
11 hearing or explain the meaning of those elements, the plea agreement clearly outlined
the elements of the offense. By signing the plea agreement, Ghanjanasak represented that
she understood and admitted those elements. And, during the Rule 11 colloquy,
Ghanjanasak confirmed under oath that she had reviewed the plea agreement with counsel
and understood all of its terms. She also stated under oath that she understood the charge
and was in fact guilty of the offense. Ghanjanasak, who is highly educated, has failed to
identify any “extraordinary circumstances” that would overcome the general rule that “[a]
defendant’s solemn declarations in open court affirming a plea agreement carry a strong
presumption of verity.” United States v. Lemaster, 403 F.3d 216, 221 (4th Cir. 2005)
(alterations and internal quotation marks omitted)). We therefore conclude that the district
3
court did not err, plainly or otherwise, in finding that Ghanjanasak understood the nature
of the charge to which she pled guilty.
The requirement that the district court find a factual basis for the plea “ensures that
the court make clear exactly what a defendant admits to, and whether those admissions are
factually sufficient to constitute the alleged crime.” DeFusco, 949 F.2d at 120. “The
requirement . . . is designed to protect a defendant who is in the position of pleading
voluntarily with an understanding of the nature of the charge but without realizing that
[her] conduct does not actually fall within the charge.” United States v. Mastrapa, 509
F.3d 652, 660 (4th Cir. 2007) (internal quotation marks omitted). “The district court
possesses wide discretion in finding a factual basis, and it need only be subjectively
satisfied that there is a sufficient factual basis for a conclusion that the defendant committed
all of the elements of the offense.” United States v. Stitz, 877 F.3d 533, 536 (4th Cir. 2017)
(internal quotation marks omitted). The “court is not required to replicate the trial that the
parties sought to avoid, or to rely only on the Rule 11 plea colloquy. Rather, the district
court may conclude that a factual basis exists from anything that appears on the record.”
United States v. Ketchum, 550 F.3d 363, 366-67 (4th Cir. 2008) (citations and internal
quotation marks omitted). “We review the district court’s finding of a factual basis for
abuse of discretion, and we will not find an abuse of discretion so long as the district court
could reasonably have determined that there was a sufficient factual basis based on the
record before it.” Id. at 367 (internal quotation marks omitted).
The evidence in the record clearly supports the conclusion that Ghanjanasak sent
the relevant text message for the purpose of issuing a threat, knowing that it would be
4
viewed as a threat, and that a reasonable recipient familiar with the context would interpret
it as a threat. See United States v. White, 810 F.3d 212, 220-21 (4th Cir. 2016).
Accordingly, we conclude that the district court did not err, plainly or otherwise, in finding
that there was a sufficient factual basis for the plea.
We affirm the district court’s judgment but decline the Government’s request to find
that Ghanjanasak breached her plea agreement by filing this appeal. We dispense with oral
argument because the facts and legal contentions are adequately presented in the materials
before this court and argument would not aid the decisional process.
AFFIRMED
5
|
38 Cal.3d 301 (1985)
696 P.2d 111
211 Cal. Rptr. 719
THE PEOPLE, Plaintiff and Respondent,
v.
MARIA J. CASTRO, Defendant and Appellant.
Docket No. Crim. 23605.
Supreme Court of California.
March 11, 1985.
*304 COUNSEL
Richard A. Lieberman, under appointment by the Supreme Court, Howard J. Berman and Berman & Glenn for Defendant and Appellant.
*305 Quin Denvir, State Public Defender, and Jonathan B. Steiner, Chief Assistant State Public Defender, as Amici Curiae on behalf of Defendant and Appellant.
John K. Van de Kamp, Attorney General, Eugene W. Kaster, Clifford K. Thompson, Jr. and David D. Salmon, Deputy Attorneys General, for Plaintiff and Respondent.
Christopher N. Heard as Amicus Curiae on behalf of Plaintiff and Respondent.
OPINION
KAUS, J.
A jury convicted defendant Maria Castro of receiving stolen property (Pen. Code, § 496). Before trial, the court denied a motion to bar impeachment with then unspecified priors, should defendant choose to testify. The court based its ruling on article I, section 28, subdivision (f) of the California Constitution,[1] concluding that it was more specific than subdivision (d)[2] and, therefore, controlled.[3] The issues on appeal are (1) whether the court erred in ruling that defendant could be impeached with what proved to be prior convictions of possession of heroin and possession of heroin for sale, and (2) whether the error, if any, was prejudicial.
(1a) Defendant contends that article I, section 28, subdivision (f) of the Constitution enacted in 1982 as part of the so-called Victims' Bill of Rights (Proposition 8) did not eliminate Evidence Code section 352 as a basis for *306 excluding evidence of prior convictions. She also claims that to apply the subdivision to erase the trial court's authority to exclude evidence of priors in criminal proceedings denies equal protection. As amicus curiae, the State Public Defender argues that the automatic admission of all prior felony convictions for impeachment under subdivision (f) is a denial of due process.
The Attorney General responds that the voters intended subdivision (f) to abolish all judicial discretion to restrict admission of prior convictions for impeachment and to require the admission of all such evidence subject only to federal constitutional restraints. It is also urged that admission of defendant's prior convictions did not deny due process or equal protection.
The legislative and judicial history of sections 352 and 788, the circumstances under which article I, section 28, was enacted, the language of the enactment concededly ambiguous as well as certain policy considerations convince us that section 28 was not intended to abrogate the traditional and inherent power of the trial court to control the admission of evidence by the exercise of discretion to exclude marginally relevant but prejudicial matter as, indeed, is provided by Evidence Code section 352.[4]
(2a) A further issue tendered by the nature of defendant's convictions and subdivision (d)'s recognition that only relevant evidence is admissible is the nature of the prior convictions which may be used for impeachment of witnesses in criminal cases. We shall hold that always subject to the trial court's discretion under section 352 subdivision (f) authorizes the use of any felony conviction which necessarily involves moral turpitude, even if the immoral trait is one other than dishonesty. On the other hand, subdivision (d), as well as due process, forbids the use of convictions of felonies which do not necessarily involve moral turpitude.
(1b) One vital point which must be made at the outset is this: Although the majority of decisions examining the use of prior convictions for impeachment of witnesses in criminal cases has involved situations in which the defendant himself was the witness, subdivision (f) is by no means confined to that situation, but applies to all witnesses the prosecution's, the defense's, as well as the court's own.
I
The history of section 352 compels the conclusion that at least until the adoption of section 28, section 352 was intended to apply across the board, *307 excluding no relevant and otherwise admissible evidence from judicial weighing of prejudice against probative value. (For a review of the genesis of § 352, see People v. House (1970) 12 Cal. App.3d 756 [90 Cal. Rptr. 831], conc. opn., pp. 769-771.) Early decisions of the Courts of Appeal, however, did not recognize the full import of section 352 and, in a series of cases later disapproved in People v. Beagle (1972) 6 Cal.3d 441 [99 Cal. Rptr. 313, 492 P.2d 1], held that section 788 of the Evidence Code was immune to the exercise of discretion under section 352.[5] In Beagle we confirmed that section 352 did, indeed, apply to all relevant evidence and that the general rule that a judge may exclude evidence when its probative value is outweighed by the risk of undue prejudice, codified in section 352, was applicable to evidence of prior convictions to impeach: "We find nothing in the statutory language to exempt section 788 from the general evidentiary provisions applicable to all rules of admissibility, and conclude that when sections 788 and 352 are read together they clearly provide discretion to the trial judge to exclude evidence of prior felony convictions when their probative value on credibility is outweighed by the risk of undue prejudice." (Id., 6 Cal.3d at pp. 452-453; italics added.)
Although Beagle made it clear that we did not intend to establish rigid standards to govern the exercise of discretion, the opinion did rely on Gordon v. United States (D.C. Cir.1967) 383 F.2d 936, 940-941, for certain suggested factors to be considered in the exercise of discretion namely, (1) whether the prior conviction reflects on honesty and integrity; (2) whether it is near or remote in time; (3) whether it was suffered for the same or substantially similar conduct for which the witness-accused is on trial; and, (4) finally, what effect admission would have on the defendant's decision to testify. We expressly recognized that the trial court's decision was dependent on "sound" judicial discretion and, in fact, affirmed Beagle's conviction, holding that the trial court had not erred in admitting a prior conviction to impeach.
Thereafter, in recognition of the fact that no discretion is so unbounded that it cannot be abused (e.g., People v. Malloy (1974) 41 Cal. App.3d 944, 952 [116 Cal. Rptr. 592]), we handed down a series of decisions delineating the boundaries of permissible discretion.
In People v. Antick (1975) 15 Cal.3d 79 [123 Cal. Rptr. 475, 539 P.2d 43], the first case to apply the Beagle "guidelines," we found an abuse of discretion in the admission of prior convictions because of their remoteness.
*308 In People v. Rist (1976) 16 Cal.3d 211, 218-223 [127 Cal. Rptr. 457, 545 P.2d 833], a robbery prosecution, we found an abuse of discretion in the admission of a prior robbery conviction suffered by defendant five months before trial, where two other dissimilar priors were available one a two-year-old conviction of credit card forgery.
In People v. Rollo (1977) 20 Cal.3d 109 [141 Cal. Rptr. 177, 569 P.2d 771], we found error where, in a prosecution for receiving stolen goods, the court admitted only the fact of the prior, leaving to defendant the option of disclosing its nature (solicitation of murder).
In People v. Woodard (1979) 23 Cal.3d 329 [152 Cal. Rptr. 536, 590 P.2d 391], our first and so far only case involving a nonparty witness' priors, we held that the court should have exercised its discretion under section 352; further, since neither prior (voluntary manslaughter and felon in possession of firearm) had any bearing on truthfulness, they should have been excluded.
In People v. Fries (1979) 24 Cal.3d 222 [155 Cal. Rptr. 194, 594 P.2d 19], we found an abuse of discretion where a robbery prior was admitted to impeach a defendant accused of robbery.
In People v. Spearman (1979) 25 Cal.3d 107 [157 Cal. Rptr. 883, 599 P.2d 74], we found an abuse of discretion in the admission of an identical narcotic prior which was not relevant to credibility.
And, lastly, in People v. Barrick (1982) 33 Cal.3d 115 [187 Cal. Rptr. 716, 654 P.2d 1243], we held that in a case charging auto theft, the trial court erred in "sanitizing" a prior auto theft conviction by calling it a "felony involving theft."
In each of the cases, a dissenting opinion disputed the result on the issue of the trial court's abuse of discretion. More important, however, the dissents expressed a minority view that the guidelines of Beagle had, in fact, become rigid limitations on the discretion of the trial court.
It was against the backdrop of the controversies raised by the Antick line of cases (excepting Barrick, decided in Dec. 1982) that article I, section 28 was framed. Whether or not we were correct in our interpretation of section 788 and in limiting the discretion of the trial court, there seems to be little doubt that the drafters of section 28 wanted a change and that the voters legislated it.
The question is, did they intend to throw out the baby with the bath? Assuming that the framers and voters were attempting to revitalize section *309 788 to counter the effect of the Antick line of cases, as decried by the dissenters, is there hard evidence that they intended to go further to abrogate entirely the discretion of the trial court under section 352, a traditional, inherent and, in truth, indispensable tool of the law of evidence? (Smith v. Lewis (1975) 13 Cal.3d 349, 364 [118 Cal. Rptr. 621, 530 P.2d 589, 78 A.L.R.3d 231]; Adkins v. Brett (1920) 184 Cal. 252, 258-259 [193 P. 251]; People ex rel. Dep. Pub. Wks. v. Princess Park Estates, Inc. (1969) 270 Cal. App.2d 876, 885 [76 Cal. Rptr. 120].)
It must be reemphasized that subdivision (f) applies to all witnesses in criminal cases. Did the drafters really intend that all persons who choose or are compelled to testify, either for the defense or the prosecution, will inevitably be impeachable by prior convictions? Did they really intend that an elderly victim of a mugging cannot avoid being impeached by a conviction for conspiracy to disturb the peace (Pen. Code, §§ 182, 415) suffered in her youth? Did the framers really intend that a witness to a crime who, as a good citizen, comes forward to aid the police, must anticipate that any felony conviction suffered years before will be used against him if he testifies at a criminal trial? (3) The prosecutor, of course, must disclose the prior criminal record of prosecution witnesses (In re Ferguson (1971) 5 Cal.3d 525 [96 Cal. Rptr. 594, 487 P.2d 1234]). If the framers intended that the trial court was to have no discretion to prevent impeachment with ancient offenses, have they not to switch metaphors cut off their noses to spite their faces? Even convicted felons may make a contribution to the search for truth.
These considerations are disturbing, but putting them aside for a moment we examine the enactment itself to determine whether the drafters intended to abolish the trial court's power under section 352 or merely to revert to the rule that, subject to trial court discretion, priors are admissible to impeach. On its face, section 28 contains two subdivisions which need reconciling. Subdivision (d) states that "relevant evidence shall not be excluded in any criminal proceeding ..." but that "[n]othing in this section shall affect any existing statutory rule of evidence relating to privilege or hearsay, or Evidence Code, Sections 352, 782 or 1103." (Our italics.) Subdivision (f) provides in pertinent part: "any prior felony conviction of any person in any criminal proceeding ... shall subsequently be used without limitation for purposes of impeachment or enhancement of sentence in any criminal proceeding." (Our italics.)
(4) For resolution of the conflict we invoke settled principles of statutory construction. We are directed first to the "words themselves" (People v. Black (1982) 32 Cal.3d 1, 5 [184 Cal. Rptr. 454, 648 P.2d 104]) and cautioned *310 to give to them their ordinary and generally accepted meaning. (In re Quinn (1973) 35 Cal. App.3d 473 [110 Cal. Rptr. 881].)
(1c) As the People note, subdivision (f) seems clear and absolute in its language "any" means "any" and "without limitation" means "without limitation," leaving no room for an interpretation which would preserve judicial discretion. On the other hand the Evidence Code is full of positive rules of admissibility, all of which are subject to section 352. (People v. House, supra, 12 Cal. App.3d 756, 771-772 (conc. opn.).) Most important of all, however, is the precise wording of the relevant passage in subdivision (d) relating to the preservation of section 352: "Nothing in this section shall affect ... Evidence Code Sections 352, 782 or 1103." (Our italics.) Of course, "this section" includes all of section 28 of article I, particularly, for present purposes, subdivision (f). The People attempt to escape from this plainest of meanings, by claiming to put it bluntly poor draftsmanship. While we may grant that in some instances the word "section" as used in Proposition 8 may mean "subdivision," in other instances such an interpretation would be absurd.[6]
So much for the words of section 28. We look next to the extrinsic evidence. "[W]hen, as here, the enactment follows voter approval, the ballot summary and arguments and analysis presented to the electorate in connection with a particular measure may be helpful in determining the probable meaning of uncertain language." (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 245-246 [149 Cal. Rptr. 239, 583 P.2d 1281].) The voter's pamphlet provides little aid in the determination whether the enactment was intended to abrogate or preserve the trial court's discretion under section 352. The preamble (§ 28, subd. (a)) states that the goal of "highest importance" was that "persons who commit felonious acts causing injury to innocent victims will be appropriately detained in custody, tried by the courts, and sufficiently punished so that the public safety is protected and encouraged," and to accomplish the goal "broad reforms in the procedural treatment of accused persons and the disposition and sentencing of convicted persons are necessary and proper as deterrents to criminal behavior...."
According to the legislative analysis found in the pamphlet, "The measure would amend the State Constitution to require that information about prior *311 felony convictions be used without limitation to discredit the testimony of a witness, including that of a defendant. Under current law, such information may be used only under limited circumstances." (Analysis by the Legis. Analyst, Ballot Pamp., Proposed Amend. to Cal. Const., Primary Elec. (June 8, 1982) p. 54; italics added.)
In our view, the last sentence is a clear reference to the Antick line of cases, not to Evidence Code section 352. The arguments of the proponents and opponents in the voter's pamphlet make no specific reference to the matter which concerns us here. One of the proponents suggested that "higher courts" had created additional rights for criminals and restricted law enforcement officers. (Id. at p. 34.) It was also argued that the initiative would "result in more criminal convictions" and thereby reverse the perceived trend that "our courts and professional politicians in Sacramento have demonstrated more concern with the rights of criminals than with the rights of innocent victims." (Id. at p. 34.) We get no clue as to the framers' or voters' intention to abrogate or preserve section 352 discretion in the trial court or, as we suggest, their intention to revitalize section 788 to reestablish the general rule that priors are to be admitted for impeachment purposes.
The People and some Courts of Appeal, attempting to resolve the apparent conflict between subdivisions (d) and (f), have considered certain extrinsic evidence which we consider inappropriate. One of the aids to statutory interpretation is what has been called "legislative-administrative" construction. (Amador Valley Joint Union, supra, 22 Cal.3d at p. 246.) When an ambiguous statute or other enactment is implemented by the Legislature or construed by an administrative agency by the adoption of extensive regulations, the courts have traditionally accorded great weight to the legislative and administrative implementations in construing the enactment. (Amador Valley Joint Union, supra, 22 Cal.3d at p. 246; State of South Dakota v. Brown (1978) 20 Cal.3d 765, 777 [144 Cal. Rptr. 758, 576 P.2d 473].) The pronouncements relied on here do not fall into this category. In one instance, they are the opinion of the Attorney General that "section 352 cannot limit the constitutional mandate of subdivision (f) that priors may be used for impeachment without limitation." (Attorney General's Guide to Proposition 8 (June 9, 1982), reprinted in Cont.Ed.Bar Program Material, Criminal Practice After Proposition 8 (July 1982) at pp. 245-248.) Distributed after the election of June 8, 1982, there is no indication whatever that the voters were cognizant of the Attorney General's opinion.
Other opinions which the People and the courts have relied on to determine the intent of the framers and voters are the majority and minority reports issued by the Assembly Committee on Criminal Justice. (Assem. *312 Com. on Crim. J., Analysis of Proposition 8, The Criminal Justice Initiative (Mar. 24, 1982).) The majority report explained: "The purpose of the initiative proposition is to require use of prior felony convictions against a criminal defendant if he chooses to testify.... The initiative requires use of prior felony convictions no matter how remote, whether or not the crime is related to truthfulness and regardless of whether the offense has since been decriminalized or reduced to a misdemeanor." (Id., at p. 30.) The report added that "[t]he initiative would require the use of prior felony convictions for impeachment purposes even though the probative value is outweighed by the danger of substantial prejudice." (Id., at p. 31.) The minority members of the committee issued a publication in response stating that subdivision (f) "`will end the abuse of justice associated with the prohibition against presenting to the jury felony records of witnesses....' (In Defense of the Victims of Crime, An Analysis of Proposition 8, The Criminal Justice Initiative (Mar. 24, 1982) p. 18.)"
The reports represent the opinions or understandings of individuals who happen to be legislators but who were not drafters of the proposed initiative. These opinions, of themselves, do not provide aid in determining the intent of the electorate. (See California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 699-700 [170 Cal. Rptr. 817, 621 P.2d 856].) None of the opinions was distributed to the electorate by way of the voter's pamphlet, and we can only speculate on the extent to which the voters were cognizant of them.
The fact is that there is no indication from the extrinsic evidence that the drafters were aware of, or that the electorate was tuned to, the apparent conflict in the language of subdivisions (d) and (f). It remains for us to harmonize or reconcile, if possible, the two subdivisions without repealing one or the other.
The intention of the drafters of the initiative was to restore trial court discretion as visualized by the Evidence Code and to reject the rigid, black letter rules of exclusion which we had grafted onto the code by the Antick line of decisions. Our conclusion is based on the historical context of subdivisions (d) and (f) of section 28. The dissatisfaction of the proponents with the appellate courts was expressed in the literature that supported the initiative. It was also expressed in the mandatory nature of the language of the subdivisions ("relevant evidence shall not be excluded" in subd. (d) and prior convictions "shall... be used" in subd. (f)). Nevertheless, the initiative itself expressed continued trust in the discretion of the trial courts; despite the mandatory admonitions, that discretion under section 352 was expressly retained.
*313 Our resolution accords with policy considerations described earlier which suggest that the trial court should not be stripped of all discretion in ruling on the admissibility of evidence, and, most importantly, our resolution eliminates the conflict between subdivision (d) and subdivision (f), gives meaning to both, and, besides, "steers clear of constitutional obstacles." (Carlos v. Superior Court (1983) 35 Cal.3d 131, 152 [197 Cal. Rptr. 79, 672 P.2d 862]; see also People v. Smith (1983) 34 Cal.3d 251, 259 [193 Cal. Rptr. 692, 667 P.2d 149] and In re Jacqueline H. (1978) 21 Cal.3d 170, 178 [145 Cal. Rptr. 548, 577 P.2d 683].)
II
A.
(2b) Having determined that subdivision (f) did not abolish trial court discretion with respect to felony-impeachment, we turn to the next question: Subject to such discretion, what felonies are admissible to affect the credit of a witness?
The answer given by subdivision (f) is simple enough: "Any prior felony conviction ... shall ... be used without limitation for purposes of impeachment...." Since we are dealing with a state constitutional mandate, we can safely ignore section 350 of the Evidence Code to the effect that "[n]o evidence is admissible except relevant evidence." What we cannot ignore, however, is the due process clause of the Fourteenth Amendment which, as interpreted by the United States Supreme Court, demands that even inferences not just presumptions be based on a rational connection between the fact proved and the fact to be inferred. (Ulster County Court v. Allen (1979) 442 U.S. 140, 157 [60 L.Ed.2d 777, 792, 99 S.Ct. 2213]; Barnes v. United States (1973) 412 U.S. 837, 844-845 [37 L.Ed.2d 380, 387, 93 S.Ct. 2357]; Leary v. United States (1969) 395 U.S. 6, 46 [23 L.Ed.2d 57, 87, 89 S.Ct. 1532]; cf. People v. Roder (1983) 33 Cal.3d 491, 497-498 [189 Cal. Rptr. 501, 658 P.2d 1302].) In Barnes, supra, 412 U.S. 837, the court reiterated that "[c]ommon-law inferences, like their statutory counterparts, must satisfy due process standards in light of present-day experience." (Id. at pp. 844-845 [37 L.Ed.2d at p. 387].) Paraphrasing the question to be asked as formulated in Leary, supra, 395 U.S. 6 we must ask with respect to any particular felony conviction which is offered for impeachment: "Can it be said with substantial assurance that the credibility of a witness is adversely affected by his having suffered this conviction?" (5) If the answer is "no," impeachment is prohibited by due process: "An important element of a fair trial is that a jury consider only relevant and competent evidence bearing on the issue of guilt or innocence." *314 (Bruton v. United States (1968) 391 U.S. 123, 131, fn. 6 [20 L.Ed.2d 476, 482, 88 S.Ct. 1620].)
(2c) Thus, while the historical basis for felony impeachment may well be the common law rule that a person convicted of any felony was totally incompetent as a witness (McCormick on Evidence (3d ed. 1984) § 43, p. 93), the modern justification for the practice must be that prior felony convictions may, somehow, be relevant to the witness' veracity. It is, therefore, appropriate that we remind ourselves of the precise progression of inferences which may lead a trier of fact to conclude that proof of a felony conviction may affect the credibility of a witness. The classic statement of the rationale for felony impeachment is that of Justice Holmes, written when he was still a member of the Supreme Judicial Court of Massachusetts: "[W]hen it is proved that a witness has been convicted of crime, the only ground for disbelieving him which such proof affords is the general readiness to do evil which the conviction may be supposed to show. It is from that general disposition alone that the jury is asked to infer a readiness to lie in a particular case, and thence that he has lied in fact. The evidence has no tendency to prove that he was mistaken, but only that he has perjured himself, and it reaches that conclusion solely through the general proposition that he is of bad character and unworthy of credit." (Gertz v. Fitchburg Railroad (1884) 137 Mass. 77, 78; italics added.)
The People point to no other rational justification for felony impeachment. It follows, therefore, that if the felony of which the witness has been convicted does not show a "readiness to do evil," the fact of conviction simply will not support an inference of readiness to lie. We make no attempt to list or even further define such felonies. At this point it is enough to note that the codes are littered with them, if only because in this state it is a felony to conspire to commit a misdemeanor. (Pen. Code, § 182.)[7]
Since impeachment with felony convictions which do not involve "readiness to do evil" moral turpitude, if you will bears no rational relation to the witness' readiness to lie, the due process clause of the Fourteenth Amendment necessarily cuts into the "without limitation" language of subdivision (f).[8]
*315 Far more controversial than the elimination of felony convictions which do not denote moral turpitude of any kind is the use of convictions of crimes which involve moral depravity other than dishonesty: child molestation, crimes of violence, torture, brutality and so on.
While the case in which Justice Holmes explained the rational basis for felony impeachment did involve a prior conviction of a crime which implied dishonesty "falsely personating" a United States revenue officer Holmes' reasoning does not depend on dishonesty being an element of the felony. Obviously it is easier to infer that a witness is lying if the felony of which he has been convicted involves dishonesty as a necessary element than when it merely indicates a "bad character" and "general readiness to do evil." Nevertheless, it is undeniable that a witness' moral depravity of any kind has some "tendency in reason" (Evid. Code, § 210) to shake one's confidence in his honesty. We ourselves recognized this in People v. Rist, supra, where we said that "convictions which are assaultive in nature do not weigh as heavily in the balance favoring admissibility as those convictions which are based on dishonesty or some other lack of integrity." (16 Cal.3d at p. 222.) "Not as heavily" does not, of course, mean "not at all."
There is then some basis however tenuous for inferring that a person who has committed a crime which involves moral turpitude other than dishonesty is more likely to be dishonest than a witness about whom no such thing is known.[9] Certainly the inference is not so irrational that it is beyond the power of the people to decree that in a proper case the jury must be permitted to draw it, if it wishes, and the "no limitation" language of subdivision (f) makes it abundantly clear that the people so decreed.[10]
*316 There is, of course, a practical problem: since, as we have seen (Barnes v. United States, supra, 412 U.S. 837; Bruton v. United States, supra, 391 U.S. 123) the constitutional imperative of relevance prohibits impeachment with felonies which do not connote moral laxity of any kind, it will be necessary to determine with respect to each felony conviction offered for impeachment difficult though this may prove to be whether it does or does not involve moral turpitude.[11] If it does not, that is the end of it. If it does, it is prima facie admissible, subject to the exercise of trial court discretion. Naturally, the more tenuous the court finds the connection between the moral defect shown by the conviction and the only defect directly relevant dishonesty the more likely it is to disallow impeachment.
B
The next problem is familiar to us from other contexts. (See People v. Crowson (1983) 33 Cal.3d 623, 633-635 [190 Cal. Rptr. 165, 660 P.2d 389]; In re Finley (1968) 68 Cal.2d 389, 392-393 [66 Cal. Rptr. 733, 438 P.2d 381].) (6) In order to determine the presence of moral turpitude, does the trial court look only to the elements of the offense of which the witness was previously convicted, or may it go behind the fact of the conviction and receive evidence on the underlying facts? To decide this issue, we must return to basics.
Wigmore points out that the reasons of auxiliary policy avoidance of unfair surprise and confusion of issues which generally prohibit impeachment of a witness with extrinsic proof of particular acts of misconduct, do not apply where the misconduct has ripened into a conviction. (3A Wigmore, Evidence (Chadbourn rev. ed. 1970) §§ 879, 880.) A witness ought to know what convictions he has suffered and their proof should not entail *317 complicated factual questions. Obviously, however, if the conviction is only admissible if it evinces moral turpitude and such turpitude can only be established through extrinsic evidence, confusion of issues becomes inevitable and unfair surprise more than probable. Therefore, as in the Finley-Crowson line of cases, a witness' prior conviction should only be admissible for impeachment if the least adjudicated elements of the conviction necessarily involve moral turpitude. We reemphasize that even such admissibility is subject to trial court discretion under section 352.
III
(7) Defendant also challenges subdivision (f) on due process and equal protection grounds. The due process challenge proceeds on the assumption that the subdivision will be interpreted to deprive the court of discretion to prevent impeachment with irrelevant convictions. Since we have held that the court has discretion even with respect to relevant priors, the point falls away.
The equal protection challenge is based on the premise that the Constitution demands that the rules of evidence in criminal cases be the same as those which apply in civil litigation. No authority for such a proposition is cited and we know of none.[12] In any event, as we have interpreted subdivision (f) the differences between civil and criminal cases are nonexistent. Finally, even if there is an equal protection problem, it is not explained why subdivision (f) part of the California Constitution should take a backseat to the Evidence Code.
IV
(8) Applying these precepts to the facts of this case, we hold that while simple possession of heroin does not necessarily involve moral turpitude (see In re Higbie (1972) 6 Cal.3d 562, 572 [99 Cal. Rptr. 865, 493 P.2d 97] and In re Fahey (1973) 8 Cal.3d 842, 849-850 [106 Cal. Rptr. 313, 505 P.2d 1369, 63 A.L.R.3d 465]), possession for sale does though the trait involved is not dishonesty but, rather, the intent to corrupt others.[13] Defendant should, therefore, not have been impeached with the conviction for simple possession at all, and the trial court erred in stating it had no discretion with respect to either conviction.
*318 Were the errors prejudicial? The People's case was strong: On June 14, 1982, silverware and other items, including two white pillowcases, were taken in a residential burglary. On June 18, 1982, defendant's son, Richard, and his passenger, Gabriel, were stopped for a traffic violation. The officer saw a pillowcase under the driver's seat and, with Richard's consent, inspected the contents and found silver items wrapped in newspaper. The young men told the officer that the silver belonged to defendant. The three went to defendant's home where, in response to the officer's inquiries, defendant stated that she owned silverware, that she did not know that her son had it, and that it was missing from the place where she kept it. She described her silverware as a tea service, spoons and forks, wrapped in newspaper and contained in a pillowcase. When the officer brought the pillowcase and its contents into the house, defendant identified the silverware as hers. The items were subsequently identified as those stolen in the residential burglary of June 14.
As her first witness and over the People's vigorous objection, defendant called William Huth, her parole officer. Huth testified that at defendant's parole revocation hearing both Richard and Gabriel had testified that the silver belonged to Gabriel, that Gabriel tried to sell the silver to Richard, and that he did not inform Richard that the silver was stolen until after the police stopped Richard's car. A defense investigator testified that Richard's girlfriend told him that she had asked defendant to admit the silver was hers to protect Richard.
Defendant testified that she had identified the silver as hers because she did not have her glasses on and could not see well; she did own some silver, but it was packed away and, when the police were at her home, she did not feel like looking for it; she thought her son had taken the silver to pawn it, not to steal it. Defendant produced her "silver" at trial. It was pewter and stainless steel. On cross-examination, defendant testified that she had had more silver but it was stolen when she was incarcerated in CRC. She stated she had been in CRC and CIW and she admitted the two 1981 priors for possession of heroin and possession of heroin for sale. The jury was instructed to consider the priors only for the purpose of determining the credibility of the witness.
The defense, of necessity, had to explain defendant's admissions regarding the silver. The defense also had valuable evidence which served to exculpate defendant although, unfortunately for defendant, it consisted of testimony that others had given at her parole revocation hearing. Thus, well before the prosecution disclosed the priors for impeachment purposes, the jury knew that defendant had a criminal past. Defendant herself volunteered that she had been incarcerated at CRC and the woman's prison before any *319 attempt was made to impeach her with the priors. As the Attorney General points out, identifying the nature of the prior felonies may well have operated to lessen the prejudice in their introduction, for the jury otherwise was free to speculate why defendant was on parole. (See People v. Rollo, supra, 20 Cal.3d at p. 119.) Further, the instructions restricting the use of priors for impeachment only may have prevented the jury from giving unwarranted significance to defendant's parole status on the question of her guilt.
After a review of the entire record we are of the opinion that it is not reasonably probable that a result more favorable to defendant would have occurred in the absence of error. (Cal. Const., art. VI, § 13; People v. Watson (1956) 46 Cal.2d 818, 836 [299 P.2d 243].)
Affirmed.
Mosk, J., and Broussard, J., concurred.
GRODIN, J., Concurring and Dissenting.
With all respect, I find the majority's reading of subdivision (f) unpersuasive. As the majority concede (ante, p. 310), the language of subdivision (f) does not on its face suffer from any lack of clarity or directness. Indeed, if the electorate wished to assure categorically that any prior felony conviction of any person in any criminal proceeding is to be used for purposes of impeachment or enhancement of sentence in any criminal proceeding "without limitation," it is difficult to conceive how they could have found better language, appropriate for a Constitution, to express that purpose.
My colleagues, however, find a conflict between the unequivocal language of subdivision (f) and that portion of subdivision (d) which refers to Evidence Code section 352, and on the basis of accommodation to that asserted conflict, they conclude that the electorate had a much narrower intent. According to this view, the phrase "without limitation" refers only to "the rigid, black letter rules of exclusion which we had grafted onto the [Evidence] [C]ode by the Antick [15 Cal.3d 79 (123 Cal. Rptr. 475, 539 P.2d 43)] line of decisions" (ante, p. 312), and in no way precludes trial courts from excluding evidence of a prior conviction on the basis that its relevance is outweighed by its potential prejudice.
I find the majority's argument unpersuasive for several related reasons. First, any inconsistency between subdivisions (f) and (d) would be subject to the statutory rule of construction that "when a general and particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a general one that is inconsistent with it." (Code Civ. Proc., § 1859.) This rule, like other canons of statutory construction, *320 applies to initiative measures and constitutional provisions as well as statutes, since it is directed to ascertaining and implementing the intent of the body which adopted the measure under consideration. (Winchester v. Mabury (1898) 122 Cal. 522, 527 [55 P. 393]; Legislature v. Deukmejian (1983) 34 Cal.3d 658 [194 Cal. Rptr. 781, 669 P.2d 17]; Perry v. Jordan (1949) 34 Cal.2d 87, 93 [207 P.2d 47].) Subdivision (f) is here the specific provision, evidencing a clear and unambiguous intent that there be no limitation upon the admissibility of certain evidence. That intent should be given effect over the more general policies reflected in subdivision (d).
Second, any inconsistency between the two subdivisions can readily be avoided by reading the word "section" in subdivision (d) to mean "subdivision." As the majority recognize, the drafters of Proposition 8 used the word "section" at other times when they must have meant "subdivision," just as they used the word "subdivision" at times when they meant "section." It seems quite apparent that is what happened here. The savings clause in subdivision (d) must be read in the context in which it appears. It is, in its totality, a qualification of the general proposition in subdivision (d) that "relevant evidence shall not be excluded in any criminal proceeding...." The other cited provisions of the Evidence Code (§§ 782 & 1103) and the other rules of evidence to which the savings clause refers ("any existing statutory rule of evidence relating to privilege or hearsay") have bearing only upon that proposition. It thus seems to me far more plausible to read the savings clause as a limitation upon subdivision (d) only, than to read one part of it as a qualification to the otherwise absolute language of subdivision (f).
Finally, reading the section 352 reference in subdivision (d) as a qualification of the "without limitation" language in subdivision (f) leaves the latter with a meaning which I doubt the electorate intended. Trial courts will be free to exclude evidence of prior convictions without appellate review. On the other hand, if a trial court decides to admit such evidence, I assume that its decision will remain reviewable on appeal by the defendant from any conviction, since "no discretion is so unbounded that it cannot be abused" (ante, p. 307). And, I assume that the trial court in exercising its discretion, and the appellate court in reviewing its exercise, are both to be guided by the four factors enunciated in Beagle [6 Cal.3d 441 (99 Cal. Rptr. 313, 492 P.2d 1)]. (Ante, p. 307.) It thus seems inevitable that in some cases appellate courts will reverse trial courts for admitting evidence of a prior conviction for failure properly to weigh and consider those factors. The line between doing that and "delineating the boundaries of permissible discretion" (ante, p. 307) is subtle indeed.
In People v. Beagle (1972) 6 Cal.3d 441 [99 Cal. Rptr. 313, 492 P.2d 1] this court confronted the relationship between Evidence Code sections 352 *321 and 788. The latter section provides in part that "[f]or the purpose of attacking the credibility of a witness, it may be shown by the examination of the witness or by the record of the judgment that he has been convicted of a felony...." Relying upon the permissive word "may" rather than a mandatory word such as "shall," we concluded that "the choice of language leaves the trial court with discretion to exclude proof of prior felony convictions offered in impeachment." (6 Cal.3d at p. 452.) We found support for that construction in a decision of the United States Court of Appeals for the District of Columbia, Luck v. United States (D.C. Cir.1965) 348 F.2d 763, 767-768, which construed language in a similar statute to the same effect.
After the decision in Luck, supra, Congress amended the applicable statute to provide that the prior convictions of a witness, with certain specified exceptions, "shall be admitted if offered." (Act of July 29, 1970, Pub.L. No. 91-358, 84 Stat. 473.)[1] The District of Columbia Court of Appeals subsequently held that Congress, by the new language, had overruled the Luck doctrine, and that trial courts no longer had discretion to limit or prohibit impeachment of witnesses with their prior convictions. (Taylor v. United States (D.C. 1971) 280 A.2d 79, 81.) Whether we like it or not, it seems to me that Proposition 8 was intended to have similar effect in this state.
I will deal briefly with the constitutional issue posed by my interpretation. A good argument can be made indeed, has been made by the State Public Defender as amicus curiae that unlimited use of prior convictions may deprive a defendant of his federal constitutional right to due process of law. This argument is based, principally, upon language in Spencer v. Texas (1967) 385 U.S. 554, 561 [17 L.Ed.2d 606, 612, 87 S.Ct. 648], to the effect that when a criminal defendant's prior convictions are introduced for one of several accepted purposes, his interests are protected both by limiting instructions and by "the discretion residing with the trial judge to limit or forbid the admission of particularly prejudicial evidence even though admissible under an accepted rule of evidence." Remove that discretion, amicus argues, and you have removed a constitutionally essential condition to introduction of prior convictions in evidence.
*322 This argument was considered and rejected, however, by the very court which decided Luck, after Congress reversed that decision by statute, and the United States Supreme Court denied certiorari. (Dixon v. United States, supra, 287 A.2d 89, 92-96.) Subsequently, the United States Court of Appeals for the District of Columbia Circuit, sitting en banc, reached the same conclusion in an opinion written by Judge McGowan, who had been the author of Luck. (United States v. Belt (D.C. Cir.1975) 514 F.2d 837.) Judge McGowan's opinion observed that the unsuccessful petition for certiorari in Dixon "emphasized strongly the significance of the language about judicial discretion" in Spencer, and that "Dixon was a case which on its facts raised a very serious question indeed about prejudicial effect." (Id., at p. 848, fn. 18.) "What Spencer does appear to contemplate," the opinion concluded, "is that a legislature may, without impingement upon the Constitution, conclude that the public interest in getting before the jury this evidence bearing upon the credibility of the defendant-witness outweighs its inescapably prejudicial effect. A belief that such constitutional latitude exists is reflected in the fact that [in] many states, as in a few federal circuits ..., the admissibility of prior convictions for impeachment purposes is treated as a mandatory matter." (Id., at p. 849.) In light of this history, it seems quite clear that the argument of amicus will not fly.
I agree with the majority, however, that evidence so potentially prejudicial must at least meet a threshold constitutional standard of "relevance," and in the absence of legislative guidance I accept the "moral turpitude" test which the majority proposes. I suspect, though, that both the moral turpitude test and the standards by which appellate courts are to review the exercise of that discretion which the majority concludes trial courts retain will give rise to difficult problems of judicial administration; and I suggest that the optimum solution may lie in action by the Legislature enumerating or defining the offenses which it believes to have sufficient relevance to veracity to be admissible for purposes of impeachment.
I agree with the majority that admission into evidence of the conviction for possession of heroin was harmless error, and so concur in the result.
LUCAS, J.
I concur in the judgment affirming defendant's conviction. I dissent, however, to the majority's analysis in two major respects.
First, for the reasons set forth in the concurring and dissenting opinion of Justice Grodin, I am convinced that new article I, section 28, subdivision (f), of the state Constitution was intended to abrogate all judicially created restrictions upon the admissibility of prior felony convictions, and to preclude the exercise of discretion to exclude certain prior convictions pursuant to section 352 of the Evidence Code. Both the language of the new provision *323 and the history leading up to its enactment by the voters conclusively demonstrate the flaws in the majority's contrary position.
Second (and unlike Justice Grodin), I cannot join in the majority's creation of a "moral turpitude" exception to the general rule of admissibility. Section 28, subdivision (f), means what it says: "Any prior felony conviction ... shall subsequently be used without limitation for purposes of impeachment or enhancement of sentence...." (Italics added.) Any prior felony conviction shall be used, not only those convictions which some court may characterize as morally reprehensible. True, there may exist some federal due process restriction upon the kinds of prior convictions deemed relevant for impeachment purposes. I am unaware of any such restrictions, however, and the majority cites no cases imposing any. Rather than burden our trial courts with the confusing and uncertain "moral turpitude" standard,[1] I would, in the absence of any restrictions imposed by the federal courts, allow admission of all prior felonies on the theory that the commission of a felony offense necessarily bears on one's credibility regardless of the nature of that offense.
BIRD, C.J., Concurring and Dissenting.
(1d) I concur in the majority's holding that trial courts retain discretion under Evidence Code section 352 to exclude evidence of prior felony convictions when their probative value is outweighed by the risk of undue prejudice. I also agree that the suggested factors set forth in People v. Beagle (1972) 6 Cal.3d 441 [99 Cal. Rptr. 313, 492 P.2d 1] (see ante, at p. 307) should continue to guide the trial courts in their exercise of that discretion. However, I cannot join the majority's conclusion that moral turpitude is a proper or a workable standard for determining the admissibility of prior felony convictions.
I.
Prior felony convictions are admissible to impeach a witness if they are relevant to a witness's credibility. Justice Work's persuasive opinion for a unanimous court in People v. Hoffman (Cal. App.) is herewith adopted as my own:[*]
[U]nder the Constitution and laws of California, only those prior felony convictions relevant to [[a]] witness's credibility may be used to impeach testimonial credibility.
*324 Relevancy is the engine of the judicial search for truth. As Thayer stated: "There is a principle not so much a rule of evidence as a presupposition involved in the very conception of a rational system of evidence ... which forbids receiving anything irrelevant, not logically probative...." (Thayer, Preliminary Treatise on Evidence (1898) p. 264, quoted in McCormick on Evidence (2d ed. 1972) p. 433.) Wigmore states this basic axiom of evidence indirectly affects "the rules directed to prevent the jury from substituting passion and prejudice, instead of reasoning, as the foundation of its conclusion and the doctrine that even the legislature cannot establish a rule of decision that will deprive the judiciary of its power to investigate the facts by rational methods." (1 Wigmore, Evidence (Tillers rev. ed. 1983) § 9, p. 665.)
In California, Evidence Code[2] sections 210 and 350 [[set forth]] these principles. Section 210 states: "`Relevant evidence' means evidence, including evidence relevant to the credibility of a witness ... having any tendency in reason to prove or disprove any disputed fact that is of consequence to the determination of the action." Section 350 provides: "No evidence is admissible except relevant evidence." The impeaching relevance of prior felony convictions has most recently been controlled by section 788[3] as construed by Beagle and its progeny. (People v. Barrick (1982) 33 Cal.3d 115 [187 Cal. Rptr. 716, 654 P.2d 1243]; People v. Spearman (1979) 25 Cal.3d 107 [157 Cal. Rptr. 883, 599 P.2d 74]; People v. Fries (1979) 24 Cal.3d 222 [155 Cal. Rptr. 194, 594 P.2d 19]; People v. Woodard (1979) 23 Cal.3d 329 [152 Cal. Rptr. 536, 590 P.2d 391]; People v. Rollo (1977) 20 Cal.3d 109 [141 Cal. Rptr. 177, 569 P.2d 771]; People v. Rist (1976) 16 Cal.3d 211 [127 Cal. Rptr. 457, 545 P.2d 833]; People v. Antick (1975) 15 Cal.3d 79 [123 Cal. Rptr. 475, 539 P.2d 43].)
While Beagle affirms the trial court's discretion to weigh the probative value of prior felonies against potential prejudice to the defendant (§ 352), *325 the threshold question to this balancing and the fundamental issue in all challenges to admissibility is whether the proffered evidence is probative of the issue to be resolved. The Legislature has established the sole trait relevant to impeaching credibility is truthfulness; that is, "[e]vidence of traits of his character other than honesty or veracity, or their opposites, is inadmissible to attack or support the credibility of a witness." (§ 786.) "Since section 788 authorizes the use of [prior felony convictions] only `[f]or the purpose of attacking the credibility of a witness,' the first factor which the trial court must evaluate is whether the prior felony conviction reflects adversely upon credibility. Although the commission of any felony is sometimes said to reflect upon the character of the individual convicted, such a belief would not justify the use of every type of felony conviction to impeach credibility. `Character is only an abstract group-term; what actually exists is a number of virtually separate traits, e.g., honesty, violence, benevolence, etc.' (Wigmore, Science of Judicial Proof (1937) p. 106; original italics.)" (People v. Woodard, supra, 23 Cal.3d 329, 335.)
In defining the limits of relevance for impeachment, our Supreme Court has examined the elements of the prior offense. "`Only a conviction which has as a necessary element an intent to deceive, defraud, lie, steal, etc., impacts on the credibility of a witness.' [Citation.] It is not sufficient that the prior offense shows a `disrespect for law' or a `character trait of willingness to do anything.' [Citation.]" (People v. Barrick, supra, 33 Cal.3d 115, 123-124.) Thus, the nature of the act, and not the nature of the actor, is the dimension on which the court has scaled the probative value of prior felony convictions.
Violent or assaultive crimes have little or no bearing on one's honesty or veracity. (People v. Beagle, supra, 6 Cal.3d 441, 453.) In People v. Rist, supra, 16 Cal.3d 211, the Supreme Court expressly disapproved the holding in People v. Delgado (1973) 32 Cal. App.3d 242 [108 Cal. Rptr. 399], which held prior convictions for assault with intent to rape and attempted forcible rape involved elements of "stealth" and bore "some rational relationship to dishonesty." (Id., at p. 250.) The Court of Appeal in People v. Nelson (1976) 63 Cal. App.3d 11 [133 Cal. Rptr. 552], determined prior rape convictions were irrelevant to credibility. (Id., at p. 22.) []
The People argue article I, section 28, subdivision (f) of the state Constitution prohibits us from reaching this conclusion. To the contrary, our holding does violence neither to the intent nor construction of this section. We briefly review the evolution of impeachment by prior conviction.
At common law in the 17th century, a person convicted of an "infamous" crime was incompetent to be a witness. (2 Wigmore, Evidence (Chadbourn *326 rev. ed. 1979) §§ 519-520, pp. 725-730.) Though difficult to specify, the usual and more broadly accepted infamous crimes included treason, felonies, and crimes involving falsehood. Such exclusions worked a further punishment for infamy and precluded the presumedly untrustworthy from presenting unreliable evidence. The rationale underlying the latter consequence was supported by a common belief of the times: Since "all treasons, and almost all felonies, were punishable with death, it was very natural that crimes, deemed of so grave a character as to render the offender unworthy to live, should be considered as rendering him unworthy of belief in a court of justice. [Fn. omitted.]" (1 Greenleaf, Evidence (16th ed. 1899) § 373, p. 514, quoted in Note, Constitutional Problems Inherent in the Admissibility of Prior Record Conviction Evidence for the Purpose of Impeaching the Credibility of the Defendant Witness (1968) 37 U.Cin.L.Rev. 168, 169.) "Nevertheless, in whatever degree the disqualification may have been thought of as a part of the punishment of the offender himself, it was obvious that this theory could not of itself justify the incidental punishment of innocent persons who might need the convict's testimony; and hence the justification had ultimately to be founded on some more acceptable reason. Hence, as soon as the rule begins to be reasoned about, we find it placed upon the more plausible theory of actual moral turpitude, i.e., the person is to be excluded because from such a moral nature it is useless to expect the truth...." (2 Wigmore, op. cit. supra, at p. 726.) However, even this rationale was roundly criticized, and by the 19th century, exclusion of infamous criminals as witnesses was all but abolished from Anglo-American law in favor of decisional and statutory modifications allowing the infamous criminal to testify while permitting the conviction to be entered into evidence to affect the weight of his testimony. Typical of these changes was a New York statute which provided: "A person who has been convicted of a crime is a competent witness; but the conviction may be proved, for the purpose of affecting the weight of his testimony...." (N.Y. Civ. Prac. Law, § 4513 (McKinney 1963).)
The modern evolution of these impeachment principles has resulted in considerable diversity in state practice. Nonetheless, the relevance of the prior conviction to credibility remains the primary, and in some jurisdictions exclusive, factor in admitting proffered impeachment evidence. (See 81 Am.Jur.2d, Witnesses, §§ 569-572, pp. 574-578; Annot. (1920) 6 A.L.R. 1608, supplemented by (1923) 25 A.L.R. 339, (1936) 103 A.L.R. 350, and (1946) 161 A.L.R. 233; 3A Wigmore, Evidence (Chadbourn rev. ed. 1970) § 987, fn. 1, pp. 862-911 and § 987 (1984 pocket supp.) pp. 22-38; Note, Other Crimes Evidence at Trial: Of Balancing and Other Matters (1961) 70 Yale L.J. 763, 774-778.)
As mentioned, relevance is the threshold test for the admission of prior felony convictions for impeachment. Whether relevance has been abandoned *327 as a criterion under article I, section 28, subdivision (f) of the California Constitution depends on a proper construction of that section.
Section 28, subdivision (f) was added to the California Constitution in June 1982 with the passage of the Proposition 8 initiative. Under its terms, "[a]ny prior felony conviction ... shall subsequently be used without limitation for purposes of impeachment...." The People argue the prior felony convictions are free from any restraint on their admission for impeachment. However, a constitutional amendment must be plainly and naturally construed, relying on the ordinary and accepted meaning of its words. (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 245 [149 Cal. Rptr. 239, 583 P.2d 1281].) And such a construction must reach all the words. Thus, while the words "without limitation" undoubtedly unshackle some admissibility restraints, they do not eliminate the fact that the prior felonies are still being admitted "for purposes of impeachment." Since 1965, section 780 has stated the general rule regarding impeachment: "[T]he court or jury may consider in determining the credibility of a witness any matter that has any tendency in reason to prove or disprove the truthfulness of his testimony. ..."[4] (Italics added.) As can be seen, section 780 embodies the fundamental concept of relevance appearing in section 210. Further, section 786 explicitly refines the potential use of character evidence for impeachment by stating: "Evidence of traits of his character other than honesty or veracity, or their opposites, is inadmissible to attack or support the credibility of a witness." Thus, a plain reading of subdivision (f) in light of the long-accepted meaning of its words under the laws of California does not preclude the assessment of relevance in determining prior conviction evidence for impeachment.
A contrary interpretation proves too much. Any rational theory of impeachment by a prior felony conviction requires two inferential steps. First, the trier of fact must link the commission of the felony, i.e., conduct, to some propensity in the witness to lie, i.e., a character trait. From this propensity, the fact finder may then infer the witness is dishonest or untruthful. In the most obvious example, the fact finder hears evidence of the witness's past conduct of making false statements under oath from which he can infer the witness has a character trait for untruthfulness, from which he may further infer the present testimony is likely incredible.
The People's argument circumvents or totally eliminates the second inferential step. They argue the commission of any felony is itself probative *328 of credibility. Stated most simply, they maintain all former felons will lie under oath. But this conclusion is betrayed by the flaw in its underlying premise. Conduct is the manifestation of many human motivations, and not an unerring reflection of character. Indeed, the line from one's prior conduct to one's present truthfulness is rarely straightly drawn.[5] For example, one homicide may be a product of a premeditated and stealthily crafted scheme, effectuated by misrepresentations and false statements; another may be a spontaneous response to a foul and sinister provocation. While a conviction for either homicide would be a felony, it would be illogical to maintain each equally proves the witness's present truthfulness. To argue otherwise is to support a belief common in the 17th century which considers neither modern advances in jurisprudence nor in psychology. Further, the offer of past felonious conduct in this example may support other inferences regarding the witness's character, inferences not at issue in testing one's credibility. For instance, a jury might infer a fortiori that both felons have a propensity for violence. Mindful of the potential prejudice in such evidence, the Legislature provided: "[E]vidence of specific instances of his conduct relevant only as tending to prove a trait of his character is inadmissible to attack or support the credibility of a witness." (§ 787.) Thus, the second inferential step cannot logically, nor legally, be excluded. It functions much like a filter, sifting the witness's conduct to exclude logically irrelevant, and thereby potentially prejudicial, character evidence and to include assuredly relevant conduct demonstrating a propensity for truthfulness and honesty or the lack thereof. As Justice Jefferson states: "If the trait involved in the offense is that of dishonesty or untruthfulness, a felony conviction of such an offense has far greater probative value to impeach a witness than if the character trait is other than that of dishonesty or untruthfulness." (2 Jefferson, Cal. Evidence Benchbook (2d ed. 1982) Witnesses, § 28.8, p. 924.) Our Supreme Court assures such high probative value by requiring that "[u]nless the conviction contains an element reflecting on defendant's honesty, it may not be admitted." (People v. Barrick, supra, 33 Cal.3d 115, 123.)
The People, however, argue the framers of subdivision (f) intended to free impeaching prior conviction evidence from a relevancy requirement. To effectuate the purpose of a law, the court must construe its provisions consistent with the intent of the lawmakers. (Sand v. Superior Court (1983) 34 Cal.3d 567, 570 [194 Cal. Rptr. 480, 668 P.2d 787].) This fundamental principle of statutory construction applies with equal force to constitutional *329 amendments adopted by the initiative process. (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization, supra, 22 Cal.3d 208, 245.) "In construing an initiative measure, the California courts have often referred to the analysis and arguments in the voters' pamphlet as an aid to ascertaining the intention of the framers and the electorate. [Citations.]" (Carlos v. Superior Court (1983) 35 Cal.3d 131, 143 [197 Cal. Rptr. 79, 672 P.2d 862], fn. omitted.)
The analysis of subdivision (f) by the Legislative Analyst states: "Prior Convictions. The measure would amend the State Constitution to require that information about prior felony convictions be used without limitation to discredit the testimony of a witness, including that of a defendant. Under current law, such information may be used only under limited circumstances." (Ballot Pamp., Proposed Amends. to Cal. Const., with analysis by the Legislative Analyst, Primary Elec. (June 8, 1982) p. 54.) [] [R]elevancy is neither specifically excluded by, nor incompatible with, the amendment's analysis. Prior felony convictions are to be used to discredit the testimony of the witness, not to discredit the general character of the witness. Proof the witness is a "bad guy" is not evidence that he will lie under oath. Thus, the intended focus of impeachment is the credibility of the witness. The most logically consistent, assuredly accurate, and procedurally expedient way to challenge witness credibility is to present evidence discrediting the witness's truthfulness. Felony convictions unrelated to truthfulness can support only irrelevant inferences and cannot further the stated purpose revealed in the voters' pamphlet analysis.
Intent, however, can be best ascertained from the language of the constitutional amendment. (People v. Black (1982) 32 Cal.3d 1, 5 [184 Cal. Rptr. 454, 648 P.2d 104].) Courts must construe all provisions of a statute together, giving significance to every part in pursuance of the intended purpose. (Turner v. Board of Trustees (1976) 16 Cal.3d 818, 826 [129 Cal. Rptr. 443, 548 P.2d 1115].) In scrutinizing article I, section 28 in its entirety, we find the preamble, subdivision (a), promotes "a bill of rights for victims of crime" through "broad reforms in the procedural treatment of accused persons and the disposition and sentencing of convicted persons...." This subdivision does not suggest these goals are to be effected through unrestrained admission of irrelevant and misleading prior conviction evidence. Subdivision (d), however, does specifically provide for a "right to truth-in-evidence." It is highly significant that in ensuring this right, subdivision (d) provides, "relevant evidence shall not be excluded in any criminal proceeding, including pretrial and post conviction motions and hearings, or in any trial or hearing of a juvenile for a criminal offense, whether heard in juvenile or adult court." (Italics added.) Harmonizing subdivisions (d) and (f), as we must, we find it highly improbable an electorate *330 seeking truth-in-evidence would require such evidence be relevant to the disputed issue, but in seeking the reform of impeachment, would find relevance to be unwanted or undesirable. An harmonious construction of the specific language of section 28 supports the survival of relevancy as a prerequisite to admitting prior felony convictions for impeachment.
This construction also finds support in other state courts construing similar impeachment laws.[6] In People v. Montgomery (1971) 47 Ill.2d 510 [268 N.E.2d 695, 67 A.L.R.3d 816] the Illinois Supreme Court interpreted a statute stating: "`No person shall be disqualified as a witness in any criminal case or proceeding ... by reason of his having been convicted of any crime; but such ... conviction may be shown for the purpose of affecting his credibility....'" (Id., at p. 697; Ill. Rev. Stat., ch. 38, par. 155-1 (1967).) Although the prosecution argued the trial court had no discretion to exclude a 20-year-old robbery conviction, the court determined relevance was fundamental to the admission of evidence and cited Wigmore for the proposition, "`[n]one but facts having rational probative value are admissible.'" (People v. Montgomery, supra, at p. 697.) Similarly, the New Hampshire Supreme Court determined the trial court should exercise its discretionary powers and "should bear in mind that the use of prior convictions to show nothing more than a disposition to commit crime, or the crime currently charged, would violate the Due Process Clause of the Fourteenth Amendment" (State v. Cote (1967) 108 N.H. 290 [235 A.2d 111, 116], cert. den. Cote v. New Hampshire (1968) 390 U.S. 1025 [20 L.Ed.2d 282, 88 S.Ct. 1412]), even though the controlling statute provided: "`No person shall be incompetent to testify on account of his having been convicted of an infamous crime, but the record of such conviction may be used to affect his credit as a witness.'" (Id., at p. 115.) Even in State v. Driscoll (1972) 53 Wis.2d 699 [193 N.W.2d 851, 50 A.L.R.3d 554], a case cited for allowing impeachment by convictions not confined "to crimes having a relationship to the honesty or veracity of the witness" (81 Am.Jur.2d, Witnesses, § 571, p. 578), the Wisconsin Supreme Court mandated the balancing of relevancy against prejudice in admitting prior felony convictions for impeachment. (State v. Driscoll, supra, at pp. 857-858.)
Finally, we interpret subdivision (f) as we do to avoid conflict with the due process clause of the Fourteenth Amendment. Established principles of *331 judicial construction require California courts to adopt "an interpretation of a statutory provision which, `consistent with the statutory language and purpose, eliminates doubt as to the provision's constitutionality' [citation]." (People v. Amor (1974) 12 Cal.3d 20, 30 [114 Cal. Rptr. 765, 523 P.2d 1173].) In the present case, an interpretation of subdivision (f) allowing the unfettered admission of prior felony convictions for impeachment creates a significant constitutional problem.
Due process assures a criminal defendant a fundamentally fair trial. (Lisenba v. California (1941) 314 U.S. 219, 236 [86 L.Ed. 166, 179-180, 62 S.Ct. 280].) The control of evidence is central to this fairness. (Blackburn v. Alabama (1960) 361 U.S. 199, 206 [4 L.Ed.2d 242, 247-248, 80 S.Ct. 274].) In general, "[t]he function of legal process, as that concept is embodied in the Constitution, and in the realm of factfinding, is to minimize the risk of erroneous decisions. Because of the broad spectrum of concerns to which the term must apply, flexibility is necessary to gear the process to the particular need; the quantum and quality of the process due in a particular situation depend upon the need to serve the purpose of minimizing the risk of error." (Greenholtz v. Nebraska Penal Inmates (1979) 442 U.S. 1, 13 [60 L.Ed.2d 668, 679, 99 S.Ct. 2100].)
Although the United States Supreme Court has never determined the constitutionality of impeaching an accused with his prior felony convictions, the courts of California have found no due process infringements. (People v. Beagle, supra, 6 Cal.3d 441, 454; People v. Roberts (1966) 65 Cal.2d 514, 522 [55 Cal. Rptr. 412, 421 P.2d 420]; People v. Modesto (1965) 62 Cal.2d 436, 454 [42 Cal. Rptr. 417, 398 P.2d 753]; People v. Pike (1962) 58 Cal.2d 70, 93 [22 Cal. Rptr. 664, 372 P.2d 656]; People v. Harris (1971) 20 Cal. App.3d 534, 538 [97 Cal. Rptr. 883]; People v. House (1970) 12 Cal. App.3d 756, 763-764 [90 Cal. Rptr. 831], disapproved on other grounds in People v. Beagle, supra, 6 Cal.3d at pp. 451-452.) Early cases in this line addressed the potential and undue penalty suffered by a defendant testifying as a witness in his own behalf when prior felony convictions were introduced for impeachment. These courts found no violations under the Sixth and Fourteenth Amendments and generally held: "[t]he defendant must weigh the danger of impeachment by the introduction of prior convictions for every witness he calls for the defense. `The fact that the witness may also be the defendant makes the choice more difficult but a denial of due process does not emerge from the circumstances.' [Citation.]" (People v. Modesto, supra, 62 Cal.2d at p. 454.)
However, since 1967 the California courts have relied heavily on Spencer v. Texas (1967) 385 U.S. 554 [17 L.Ed.2d 606, 87 S.Ct. 648], for constitutional *332 analysis of impeachment questions. (See People v. House, supra, 12 Cal. App.3d 756, 763-764.) In Spencer, the Supreme Court faced the question of whether the use of prior felony convictions in a single-stage recidivist proceeding violated the due process clause. In finding the recidivist proceeding constitutionally firm, the Supreme Court analogized to the use of prior convictions for impeachment. The court suggested the potential prejudice of impeachment evidence is acceptable when it is "particularly probative" of a defendant's credibility and "[t]he defendant's interests are protected by limiting instructions [citation] and by the discretion residing with the trial judge to limit or forbid the admission of particularly prejudicial evidence even though admissible under an accepted rule of evidence." (Spencer v. Texas, supra, 385 U.S. at pp. 560-561 [17 L.Ed.2d at pp. 612-613], italics added.) Though dictum, the Supreme Court's statement reemphasizes the need to control evidence to assure a fundamentally fair trial.
The People's position also finds no support in a hypothetical application of the specific test in Spencer. In its holding, the court stated: "In the face of the legitimate state purpose and the long-standing and widespread use that attend the procedure under attack here, we find it impossible to say that because of the possibility of some collateral prejudice the Texas procedure is rendered unconstitutional under the Due Process Clause as it has been interpreted and applied in our past cases." (Spencer v. Texas, supra, 385 U.S. at p. 564 [17 L.Ed.2d at p. 614].) Although Spencer did not specify the particular state interest at issue (see id., at p. 570 [17 L.Ed.2d at pp. 617-618] (dis. opn. of Warren, C.J.)), we perceive of no legitimate state interest furthered by the uncontrolled admission of irrelevant and prejudicial prior felony convictions. (See generally, Mendez, California's New Law on Character Evidence: Evidence Code Section 352 and the Impact of Recent Psychological Studies (1984) 31 UCLA L.Rev. 1003.) To require prior convictions be relevant to credibility places no greater burden on impeachment evidence than any other type of evidence. Further, as stated by Chief Justice Warren in his dissent in Spencer: "While this Court has never held that the use of prior convictions to show nothing more than a disposition to commit crime would violate the Due Process Clause of the Fourteenth Amendment, our decisions exercising supervisory power over criminal trials in federal courts, as well as decisions by courts of appeals and of state courts, suggest that evidence of prior crimes introduced for no purpose other than to show criminal disposition would violate the Due Process Clause." (Spencer v. Texas, supra, 385 U.S. at pp. 572-574 [17 L.Ed.2d at pp. 619-620], fns. omitted.) [End of adopted quote from opn. by Work, J.]
II.
In adopting moral turpitude as the standard for determining which felonies are admissible to impeach the credibility of a witness, the majority create *333 enormous problems for our trial courts. Rather than providing clear guidance, the majority promulgate a rule which is guaranteed to have no certainty of application.
This court has recognized that "moral turpitude" is an "elusive concept incapable of precise general definition." (In re Higbie (1972) 6 Cal.3d 562, 569 [99 Cal. Rptr. 865, 493 P.2d 97].) That it is "elusive" is evident from its various judicial definitions.
"One dramatic exposition of the term was rendered by this court in 1938, and has since been consistently followed: `an act of baseness, vileness or depravity in the private and social duties which a man owes to his fellowmen, or to society in general, contrary to the accepted and customary rule of right and duty between man and man.' (In re Craig (1938) 12 Cal.2d 93, 97 [82 P.2d 442]; see also Yakov v. Board of Medical Examiners (1968) 68 Cal.2d 67, 73 [64 Cal. Rptr. 785, 435 P.2d 553]; In re Boyd (1957) 48 Cal.2d 69, 70 [307 P.2d 625].)" (In re Higbie, supra, 6 Cal.3d at p. 569.)
"Moral turpitude has also been described as any crime or misconduct committed without excuse (In re Hallinan (1954) 43 Cal.2d 243, 251 [272 P.2d 768]; In re Rothrock (1940) 16 Cal.2d 449, 453 [106 P.2d 907, 131 A.L.R. 226]), or as any `dishonest or immoral' act, not necessarily a crime. [Citation.]" (In re Higbie, supra, 6 Cal.3d at pp. 569-570.)
It has also been defined as "`everything done contrary to justice, honesty, modesty, or good morals.' [Citations.]" (In re McAllister (1939) 14 Cal.2d 602, 603 [95 P.2d 932]; In re Hatch (1937) 10 Cal.2d 147, 150 [73 P.2d 885].) In short, "`[t]here is no hard and fast rule as to what constitutes moral turpitude.'" (Id., at p. 151.)
It is clear from the various definitions that the term "moral turpitude" lacks legal precision. As one commentator stated, "[j]udicial definitions of moral turpitude are so imprecise that it is only a matter of conjecture whether a particular crime involves it." (Note, Entrance and Disciplinary Requirements for Occupational Licenses in California (1962) 14 Stan. L.Rev. 533, 542.) Other commentators and courts have also exposed and condemned the uncertainty of the phrase "moral turpitude."[1a] (Morrison v. *334 State Board of Education (1969) 1 Cal.3d 214, 231 [82 Cal. Rptr. 175, 461 P.2d 375].)
Such an imprecise standard will cause confusion among the trial courts. Moreover, trial judges will apply their own personal views as to the mores of the community[2a] in deciding whether an offense involves moral turpitude. (See United States v. Zimmerman, supra, 71 F. Supp. at p. 537.) This will inevitably lead to inconsistent results and will require the reversal of many convictions.
The experience of one of our sister states should be a lesson for this court. Although Connecticut employed the moral turpitude standard in this context for 45 years, that state eventually abandoned it because of the "uncertainty in the meaning and application of the phrase `moral turpitude'...." (Heating Acceptance Corporation v. Patterson (1965) 152 Conn. 467 [208 A.2d 341, 343-344].) The Connecticut court noted that the trial courts in that state had encountered considerable difficulty in ruling on the admissibility of prior convictions where the presence or absence of moral turpitude had to be determined. "[A] definite rule, of certain application, would eliminate problems and difficulties at the trial level, on the part of both court and counsel, which in turn lead to mistakes and costly appellate procedure, if not to actual injustice." (Id., at p. 343.)
By adopting the moral turpitude standard, the majority are incorporating into the criminal law, vast bodies of noncriminal law where different applications of the term have been made.[3a] In my view, the court has not considered the full implications of their actions. The following list of cases is a small sample[4a] of the vast case law that this court unwittingly is incorporating into the criminal law: Montag v. State Bar (1982) 32 Cal.3d 721 [186 Cal. Rptr. 894, 652 P.2d 1370] (attorney discipline); In re Schwartz (1982) 31 Cal.3d 395 [182 Cal. Rptr. 640, 644 P.2d 833, 26 A.L.R.4th 1077]; Ambrose v. State Bar (1982) 31 Cal.3d 184 [181 Cal. Rptr. 903, 643 P.2d 486]; In re Rohan (1978) 21 Cal.3d 195 [145 Cal. Rptr. 855, 578 P.2d 102]; *335 In re Calaway (1977) 20 Cal.3d 165 [141 Cal. Rptr. 805, 570 P.2d 1223]; In re Kristovich (1976) 18 Cal.3d 468 [134 Cal. Rptr. 409, 556 P.2d 771]; In re Hurwitz (1976) 17 Cal.3d 562 [131 Cal. Rptr. 402, 551 P.2d 1234]; In re Duggan (1976) 17 Cal.3d 416 [130 Cal. Rptr. 715, 551 P.2d 19]; In re Kirschke (1976) 16 Cal.3d 902 [129 Cal. Rptr. 780, 549 P.2d 548]; In re Honoroff (1975) 15 Cal.3d 755 [126 Cal. Rptr. 229, 543 P.2d 597]; In re Waisbren (1975) 15 Cal.3d 553 [125 Cal. Rptr. 479, 542 P.2d 639]; In re Lyons (1975) 15 Cal.3d 322 [124 Cal. Rptr. 171, 540 P.2d 11]; In re Kreamer (1975) 14 Cal.3d 524 [121 Cal. Rptr. 600, 535 P.2d 728]; In re Silverton (1975) 14 Cal.3d 517 [121 Cal. Rptr. 596, 535 P.2d 724]; In re Distefano (1975) 13 Cal.3d 476 [119 Cal. Rptr. 105, 531 P.2d 417]; In re Hanley (1975) 13 Cal.3d 448 [119 Cal. Rptr. 5, 530 P.2d 1381]; In re Cohen (1974) 11 Cal.3d 416 [113 Cal. Rptr. 485, 521 P.2d 477]; In re Wright (1973) 10 Cal.3d 374 [110 Cal. Rptr. 348, 515 P.2d 292]; In re Bogart (1973) 9 Cal.3d 743 [108 Cal. Rptr. 815, 511 P.2d 1167]; In re Fahey, supra, 8 Cal.3d 842; In re Higbie, supra, 6 Cal.3d 562; In re Plotner (1971) 5 Cal.3d 714 [97 Cal. Rptr. 193, 488 P.2d 385]; In re Jones (1971) 5 Cal.3d 390 [96 Cal. Rptr. 448, 487 P.2d 1016]; In re Langford (1966) 64 Cal.2d 489 [50 Cal. Rptr. 661, 413 P.2d 437]; In re Boyd (1957) 48 Cal.2d 69 [307 P.2d 625]; In re Hallinan (1957) 48 Cal.2d 52 [307 P.2d 1]; In re Hallinan (1954) 43 Cal.2d 243 [272 P.2d 768]; In re Rothrock (1940) 16 Cal.2d 449 [106 P.2d 907, 131 A.L.R. 226]; Stanford v. The State Bar of California (1940) 15 Cal.2d 721 [104 P.2d 635]; In re McAllister, supra, 14 Cal.2d 602; In re Craig (1938) 12 Cal.2d 93 [82 P.2d 442]; In re Hatch, supra, 10 Cal.2d 147; Jacobs v. The State Bar (1933) 219 Cal. 59 [25 P.2d 401]; Cartwright v. Board of Chiropractic Examiners (1976) 16 Cal.3d 762 [129 Cal. Rptr. 462, 548 P.2d 1134] (revocation of chiropractor's license); Hartman v. Board of Chiropractic, etc. (1937) 20 Cal. App.2d 76 [66 P.2d 705]; Morrison v. State Board of Education, supra, 1 Cal.3d 214 (revocation of teacher's certificates); Board of Trustees v. Judge (1975) 50 Cal. App.3d 920 [123 Cal. Rptr. 830]; Yakov v. Board of Medical Examiners (1968) 68 Cal.2d 67 [64 Cal. Rptr. 785, 435 P.2d 553] (revocation of medical doctor's license); Matanky v. Board of Medical Examiners (1978) 79 Cal. App.3d 293 [144 Cal. Rptr. 826]; Cadilla v. Board of Medical Examiners (1972) 26 Cal. App.3d 961 [103 Cal. Rptr. 455]; Morris v. Board of Medical Examiners (1964) 230 Cal. App.2d 704 [41 Cal. Rptr. 351, 12 A.L.R.3d 1301]; Bernstein v. Board of Medical Examiners (1962) 204 Cal. App.2d 378 [22 Cal. Rptr. 419]; Hollingsworth v. Board of Medical Examiners (1961) 188 Cal. App.2d 172 [10 Cal. Rptr. 343]; Hallinan v. Committee of Bar Examiners (1966) 65 Cal.2d 447 [55 Cal. Rptr. 228, 421 P.2d 76] (certification of bar admittee); Thorpe v. Board of Examiners (1980) 104 Cal. App.3d 111 [163 Cal. Rptr. 382, 8 A.L.R.4th 216] (revocation of license to practice veterinary medicine); Golde v. Fox (1979) 98 Cal. App.3d 167 [159 Cal. Rptr. 864] (revocation of real estate broker's license); Jennings v. *336 Karpe (1974) 36 Cal. App.3d 709 [111 Cal. Rptr. 776]; Ring v. Smith (1970) 5 Cal. App.3d 197 [85 Cal. Rptr. 227]; Watkins v. Real Estate Commissioner (1960) 182 Cal. App.2d 397 [6 Cal. Rptr. 191]; Otash v. Bureau of Private Investigators (1964) 230 Cal. App.2d 568 [41 Cal. Rptr. 263] (revocation of private investigator's license); Rice v. Alcoholic Beverage etc. Appeals Bd. (1979) 89 Cal. App.3d 30 [152 Cal. Rptr. 285] (revocation of on-sale general liquor license).
The trial courts need clear guidance as to which felonies are admissible to impeach the credibility of a witness. Today's decision not only lacks that clarity but is an open-ended invitation to judicial chaos.
Reynoso, J., concurred.
Respondent's petition for a rehearing was denied April 18, 1985. Bird, C.J., and Lucas, J., were of the opinion that the petition should be granted.
NOTES
[1] Section 28, subdivision (f) provides: "Any prior felony conviction of any person in any criminal proceeding, whether adult or juvenile, shall subsequently be used without limitation for purposes of impeachment or enhancement of sentence in any criminal proceeding. When a prior felony conviction is an element of any felony offense, it shall be proven to the trier of fact in open court."
[2] Subdivision (d) provides: "Except as provided by statute hereafter enacted by a two-thirds vote of the membership in each house of the Legislature, relevant evidence shall not be excluded in any criminal proceeding, including pretrial and post conviction motions and hearings, or in any trial or hearing of a juvenile for a criminal offense, whether heard in juvenile or adult court. Nothing in this section shall affect any existing statutory rule of evidence relating to privilege or hearsay, or Evidence Code, Sections 352, 782 or 1103. Nothing in this section shall affect any existing statutory or constitutional right of the press." (Italics added.)
[3] The trial court commented: "I'm going to deny the motion, and I'll explain why ... Subsection (f) says that prior convictions are admissible, notwithstanding any other limitations of law. Subsection (d) says ... that Section 352 applies to everything within the section. I believe that it is very poorly written, and either (d) controls (f), or (f) controls (d), and since (f) is more specific and refers only to the prior conviction issue, I'm going to hold that prior convictions are admissible. However, I hope and I'm sure that it will happen that the Court of Appeals will resolve this discrepancy in the law."
[4] Section 352 reads: "The court in its discretion may exclude evidence if its probative value is substantially outweighed by the probability that its admission will (a) necessitate undue consumption of time or (b) create substantial danger of undue prejudice, of confusing the issues, or of misleading the jury."
[5] Section 788 provides in pertinent part: "For the purpose of attacking the credibility of a witness, it may be shown by the examination of the witness or by the record of the judgment that he has been convicted of a felony...." What the Courts of Appeal failed to consider was that section 788 was enacted merely as an exception to the rule of exclusion in section 787 which prohibits evidence of specific instances of conduct to impeach or rehabilitate a witness.
[6] Obviously the word "section" as used in subdivisions (b) and (e) of section 667 of the Penal Code also part of Proposition 8 can only mean "section." On the other hand, in subdivision (b) of section 28 dealing with restitution it is provided that "The Legislature shall adopt provisions to implement this section during the calendar year following adoption of this section." Apparently the first "section" in that sentence should read "subdivision." There is, however, no rule of statutory construction to the effect that one instance of sloppy draftsmanship compels courts to presume a habit.
[7] What moral turpitude follows from a conviction of conspiracy to tattoo a person under 18? (Pen. Code, § 653.)
[8] A frequently cited case for the proposition that any felony conviction is impeaching is that of the Supreme Court of Washington in State v. Ruzicka (1977) 89 Wn.2d 217 [570 P.2d 1208, 1212]. There the court held that the Legislature could reasonably determine that there was a nexus between a person having committed crimes and that person's propensity to lie. To the extent that this statement encompasses crimes not involving moral turpitude of any kind, we must disagree on due process grounds.
[9] Compare the definition of "relevance" in rule 401 of the Federal Rules of Evidence (28 U.S.C.): "`Relevant evidence' means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would have been without the evidence."
[10] This was evidently also the view of the 1965 Legislature which enacted the Evidence Code. Section 788 as submitted by the Law Revision Commission would have restricted felony-impeachment to felonies with respect to which "an essential element ... is dishonesty or false statement." (7 Cal. Law Revision Com. Rep. p. 142.) The commission commented: "Subdivision (a) modifies existing law, for under existing law any felony conviction may be used for impeachment purposes even though the crime involved has no bearing on the witness' honesty or veracity. See Code Civ. Proc., § 2051. Section 788 substitutes for this undiscriminating treatment of felony convictions the requirement that the convictions be relevant to the purpose for which they are admitted, i.e., that the convictions tend to prove the witness' dishonesty or lack of veracity. [¶] `Dishonesty' as used in Section 788 means `any breach of honesty or trust, as lying, deceiving, cheating, stealing, or defrauding.' Merriam-Webster, New International Dictionary (3d ed. 1961). `[T]he measure of [the] meaning [of dishonesty] is ... an infirmity of purpose so opprobrious or furtive as to be fairly characterized as dishonest in the common speech of men.' Cardozo, C.J., in World Exchange Bank v. Commercial Casualty Ins. Co., 255 N.Y. 1, 173 N.E. 902, 903 (1930). Thus, convictions of felonies involving fraud, deception, and lying may, of course, be shown under Section 788. Cf. Hogg v. Real Estate Commissioner, 54 Cal. App.2d 712, 129 P.2d 709 (1942). All forms of larceny may also be shown. Cf. Brecheen v. Riley, 187 Cal. 121, 200 Pac. 1042 (1921). Similarly, other crimes involving the wrongful deprivation of another of his property and furtive, stealthy crimes (such as burglary) may be shown. [¶] On the other hand, such crimes as felony drunk driving, manslaughter, arson (except for fraudulent purposes), assault, and possession of a deadly weapon do not involve dishonesty or false statement and may not be shown under Section 788." The draft did not find favor, and section 788 became one of the few sections which were amended by the Legislature. (See People v. House, supra, 12 Cal. App.3d 756, 771, fn. 8 (conc. opn.).)
[11] Permitting impeachment with crimes involving moral turpitude is not a new concept, though administratively it has proved awkward. It was adopted by Connecticut in Drazen v. New Haven Taxicab Co. (1920) 95 Conn. 500 [111 A. 861, 863-864], but abandoned 45 years later in Heating Acceptance Corporation v. Patterson (1965) 152 Conn. 467 [208 A.2d 341, 343-344].
Some of the problems may be ameliorated by the fact that, in connection with other statutes, considerable bodies of law concerning the characterization of felonies as involving or not involving moral turpitude have developed. (See for example, 1 Witkin, Cal. Procedure (2d ed. 1970) Attorneys, § 195; Annot., What Constitutes "Crime Involving Moral Turpitude" Within Meaning of §§ 212(a)(9) and 241(a)(4) of Immigration and Nationality Act (8 USCS §§ 1182(a)(9), 1251(a)(4)), and Similar Predecessor Statutes Providing for Exclusion or Deportation of Aliens Convicted of Such Crime (1975) 23 A.L.R.Fed. 480.)
[12] If defendant is correct, would it follow that the exclusionary rule is applicable in civil cases and that the right to confront witnesses affects the hearsay rule even in such litigation?
[13] We note that possession of heroin for sale was the precise felony involved in People v. Spearman, supra, 25 Cal.3d 107. The inquiry there was whether the crime involved dishonesty. The majority's answer was in the negative. The question here is, of course, somewhat broader: does possession of heroin for sale necessarily evince any character trait which can reasonably be characterized as "immoral."
[1] The new statute, which is set forth in an appendix to the court's opinion in Dixon v. United States (D.C. 1972) 287 A.2d 89, certiorari denied, 407 U.S. 926 [32 L.Ed.2d 813, 92 S.Ct. 2474], provided for admission into evidence of any criminal offense which "(A) was punishable by death or imprisonment in excess of one year under the law under which [the defendant] was convicted, or (B) involved dishonesty or false statement (regardless of punishment)...." (Id., at p. 100.) Exceptions were made for a conviction more than 10 years old, and convictions which had been the subject of pardon, annulment, or certificate of rehabilitation.
[1] As Justice Tobriner once observed, "Terms such as `immoral or unprofessional conduct' or `moral turpitude' stretch over so wide a range that they embrace an unlimited area of conduct." (Morrison v. State Board of Education (1969) 1 Cal.3d 214, 224-225 [82 Cal. Rptr. 175, 461 P.2d 375].)
[*] Brackets together, in this manner [], are used to indicate deletions from the opinion of the Court of Appeal; double brackets enclosing material are used to denote additions. (See Conservatorship of Early (1983) 35 Cal.3d 244, 247 [197 Cal. Rptr. 539, 673 P.2d 209].)
[2] All statutory references are to the Evidence Code unless otherwise specified.
[3] Section 788 states: "For the purpose of attacking the credibility of a witness, it may be shown by the examination of the witness or by the record of the judgment that he has been convicted of a felony unless:
"(a) A pardon based on his innocence has been granted to the witness by the jurisdiction in which he was convicted.
"(b) A certificate of rehabilitation and pardon has been granted to the witness under the provisions of Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code.
"(c) The accusatory pleading against the witness has been dismissed under the provisions of Penal Code Section 1203.4, but this exception does not apply to any criminal trial where the witness is being prosecuted for a subsequent offense.
"(d) The conviction was under the laws of another jurisdiction and the witness has been relieved of the penalties and disabilities arising from the conviction pursuant to a procedure substantially equivalent to that referred to in subdivision (b) or (c)."
[4] The standard dictionary definition of "impeach" also comports with the language of section 780. Illustrative is the entry in Webster's New World Dictionary (2d college ed. 1982) at page 703: "1. to challenge or discredit ... 2. to challenge the practices or honesty of...." (Italics added.)
[5] As Wigmore eloquently states: "From the point of view of modern psychology, the moral disposition which tends for or against falsehood is an elusive quality. Its intermittent operation in connection with other tendencies, and the difficulty of ascertaining its quality and force, make it by no means a feature peculiarly reliable in the diagnosis of testimonial credit." (3A Wigmore, Evidence (Chadbourn rev. ed. 1970) § 922, p. 725, fn. omitted.)
[6] The Federal Rules of Evidence expressly incorporate relevancy as a threshold test in admitting prior convictions to impeach. Rule 609(a) [(28 U.S.C.)] provides: "For the purpose of attacking the credibility of a witness, evidence that he has been convicted of a crime shall be admitted if elicited from him or established by public record during cross-examination but only if the crime (1) was punishable by death or imprisonment in excess of one year under the law under which he was convicted, and the court determines that the probative value of admitting this evidence outweighs its prejudicial effect to the defendant, or (2) involved dishonesty or false statement, regardless of the punishment."
[1a] United States v. Zimmerman (E.D.Pa. 1947) 71 F. Supp. 534, 537 (The term moral turpitude "has never been clearly or certainly defined" and is "lacking in legal precision."); Jordan v. De George (1951) 341 U.S. 223, 235 [95 L.Ed. 886, 894, 71 S.Ct. 703, 710] (dis. opn. of Jackson, J.) ("[T]here appears to be universal recognition that [moral turpitude is] an undefined and undefinable standard."); Note, Administrative Law: Professional and Occupational Licensing: Standard of Conduct for Administrative License Revocation (1956) 44 Cal.L.Rev. 403, 406 (Moral turpitude is "so ill-defined as to be almost devoid of any predictability as to what is or is not moral turpitude."); Bradway, Moral Turpitude as the Criterion of Offenses that Justify Disbarment (1935) 24 Cal.L.Rev. 9, 19 (The term moral turpitude has a "vague, nebulous, discretionary meaning."); Note, supra, 14 Stan. L.Rev. at page 542 (The moral turpitude standard is "uninformative and vague."); see also Shapiro, Morals and the Courts: The Reluctant Crusaders (1961) 45 Minn. L.Rev. 897, 936-938.
[2a] It is well established that "`"[t]he concept of moral turpitude depends upon the state of public morals, and may vary according to the community or the times...."'" (In re Higbie, supra, 6 Cal.3d at p. 570; In re Fahey (1973) 8 Cal.3d 842, 849 [106 Cal. Rptr. 313, 505 P.2d 1369, 63 A.L.R.3d 465].)
[3a] The term moral turpitude "constitute[s] only [a] lingual abstraction[] until applied to a specific occupation and given content by reference to fitness for the performance of that vocation." (Morrison v. State Board of Education, supra, 1 Cal.3d at p. 239.) Since the meaning of that term depends upon, and thus relates to, the occupation involved (id., at p. 227), different applications result.
[4a] A Lexis search of the term "moral turpitude" reveals over 550 cases.
|
631 F.Supp.2d 32 (2009)
John E. DRAIM, Plaintiff,
v.
VIRTUAL GEOSATELLITE HOLDINGS, INC., et al., Defendants.
Civil Action No. 01-2690 (JMF).
United States District Court, District of Columbia.
July 1, 2009.
*33 Mary Catherine Zinsner, Troutman Sanders LLP, McLean, VA, for Plaintiff.
*34 Montgomery Blair Sibley, Montgomery Blair Sibley, Thomas E. Patton, Tighe, Patton, Armstrong, Teasdale PLLC, David Jerome Taylor, Spriggs & Hollingsworth, Washington, DC, Thomas Joseph Mitchell, Laurel, MD, for Defendants.
FINDINGS OF FACT, SUMMARY CONCLUSIONS OF LAW, AND MEMORANDUM OPINION
JOHN M. FACCIOLA, United States Magistrate Judge.
FINDINGS OF FACT 1992-1997
1. On November 1, 1992, Draim was hired as a consultant by Mobile Communications Holdings, Incorporated ("MCHI") pursuant to a written consulting agreement dated November 1, 1992. Trial Transcript ("Tr.") at 14.
2. Draim worked for MCHI as a consultant through June 30, 1997. Tr. at 16. He was paid by the hour. Tr. at 15.
3. The consulting agreement provided that Draim would receive $2,000 for each patent application filed and $10,000 for the successful issuance of a patent. Tr. at 16.
4. On July 1, 1997, Draim became a full-time employee of MCHI. Tr. at 17-18.
5. The parties never entered into a written agreement pertaining to Draim's status as an employee. Tr. at 17. They did, however, orally agree that Draim would receive a yearly salary of $72,000. Tr. at 17.
6. In addition, the parties continued to operate under two of the terms of the earlier consulting agreement: that Draim's inventions would be assigned to Virtual Geo and that Draim would be paid $2,000 for each patent application filed and $10,000 for the successful issuance of a patent. Tr. at 17.
7. At some point after Draim became a full-time employee of MCHI, the bonus for filing a patent application increased from $2,000 to $2,500, and the bonus for issuance of a patent increased from $10,000 to $12,500. Tr. at 93, 94-95.
8. There was never any discussion between the parties as to whether those obligations imposed on Draim by the written consulting agreement, particularly the obligations imposed by paragraphs 8 and 9, were to continue with the same force and effect once Draim became an employee. Tr. at 32.
Interfering Application
9. In February 2000, while still employed by Dr. Castiel's company, Draim and Dr. Castiel jointly filed a provisional patent for the 168 slot application.
10. Like all the patents Draim worked on while employed by the Castiel companies, the patent application was assigned pursuant to the agreement between Castiel and Draim to Castiel's company, Virtual Geo. Tr. at 38.
11. After Draim's resignation from Castiel's companies, he went to work for an entity called Satellite Resources of America ("SRA") (formerly VGS). Tr. at 34.
12. Virtual Geo and SRA were competitors to the extent of developing and using virtual geosynchronous *35 stationary orbital technology. Tr. at 43.
13. A purported merger between Virtual Geo and VGS was undone by the Delaware Chancery Court. Tr. at 34.
14. In October 2000, after the merger was undone and Draim was working for SRA, he was directed by a fellow SRA employee to file a patent on the 168 patent for the purpose of creating an interference with the Virtual Geo patent. Tr. at 39.
15. In a letter to SRA's patent counsel, Draim stated that he had created a portion of the interfering patent application and that "most of the rest of the write-up [was] just extraneous stuff drawn from the prior Virtual Geo patents." Tr. at 40-41.
16. Therefore, in November 2000, Draim processed and filed as sole inventor a patent that he had assigned to SRA that he intended to interfere with the patent that he and Dr. Castiel had co-invented when he was working for Castiel's companies. Tr. at 42.
17. The "extraneous stuff" to which Draim referred in his letter to counsel was drawn from prior Virtual Geo patents that were already in the public domain. Tr. at 50, 58.
18. A patent applicant has one year from the filing of a provisional application to the filing of a final application. Tr. at 59.
19. If two applications are interfering with each other, the United States Patent & Trademark Office must decide who actually owns the technology described in the patent. Tr. at 60.
20. SRA, Draim's new employer, was required to abandon its interfering patent application because of the findings and orders of the Delaware Chancery Court when it undid the purported merger. Tr. at 61.
21. Under that Court's order, Castiel's companies got the 168 slot patent and Castiel removed Draim's name from it. Tr. at 61.
Computer Theft
22. Draim had no Virtual Geo proprietary information on his computer at home. Tr. at 51-52.
23. A woman named Ms. Lincoln testified in a deposition that she took a laptop, software, giveaways for a conference in Geneva, hard drives, financial files, and marketing presentations from Virtual Geo and that she took these materials to VGA. Tr. at 100.
24. Ellipso, a Castiel company, bought STK software for $48,000 and loaded it on the stolen computer. Tr. at 101.
25. Draim was aware that a computer that was reportedly taken was subsequently returned to Dr. Castiel. Tr. at 54.
Assignment of 168 Slot Information to SRA
26. In a marketing document created after Draim had left the employ of Dr. Castiel's companies, SRA claimed that it owned the 168 patent that had been jointly filed by Castiel and Draim in February of 2000. Tr. at 45-46.
27. Draim had no knowledge of the page of the document where that representation was made. Tr. at *36 46. He inputted material about Cobra technology, invented after he had left Dr. Castiel's employ, into this document. Tr. at 47.
28. In drafting that material, Draim used a published study that had been commissioned and paid for by one of Dr. Castiel's companies. Tr. at 50.
Failure to Cooperate with Patent Counsel
29. After he left Dr. Castiel's employ, Draim did not cooperate with Dr. Castiel's patent counsel in the prosecution of certain patents in which Draim and Dr. Castiel were inventors. Tr. at 99.
SUMMARY CONCLUSIONS OF LAW
30. Draim and Dr. Castiel never entered into a written agreement pertaining to Draim's employment after Draim ceased to be a consultant and became an employee.
31. Their minds never met on any of the terms of such an agreement, but they had an oral mutual understanding as to Draim's salary and bonuses.
32. Once the consulting agreement ended, Draim became an employee at will. In such an employment relationship, neither party is deemed to have entered into a covenant of good faith and fair dealing.
33. As an employee and an agent, Draim nevertheless owed his employer a duty of loyalty.
34. While employed by Dr. Castiel's companies, Draim never engaged in conduct that violated any such duty.
35. Draim and Dr. Castiel never reached an agreement as to any aspect of Draim's behavior after the end of their relationship.
36. Specifically, the parties never agreed that the provisions of the 1992 consulting agreement pertaining to preserving trade secrets and avoiding conflicting activities would continue to operate after Draim left Dr. Castiel's employ.
37. Under District of Columbia law, and in the absence of a contract to the contrary, Draim was free to engage in competing activities once he left Dr. Castiel's employ.
38. District of Columbia law is silent as to whether an employee at will who has resigned is obliged to preserve his former employer's trade secrets inviolate.
39. Assuming he is, there was no evidence whatsoever that Draim breached the confidentiality of any information he learned during his employment in his post-employment activities as an employee of Dr. Castiel's competitor.
40. Draim did not steal a computer from Dr. Castiel's company nor did he ever use any software on such a stolen computer.
41. Draim did not make nor cause to be made any false statement about the ownership of the 168 slot application.
42. Draim used a published study and not a trade secret in the one instance claimed by Dr. Castiel to involve the use of a trade secret.
43. While Draim, having left Dr. Castiel's employ, purposefully filed the interfering application described above and failed to cooperate with patent counsel, his actions and dereliction did not violate any contractual *37 duty he had to Dr. Castiel that survived his resignation.
44. Assuming, however, that they did, there is no evidence that either his conduct as to the interfering application or his failure to cooperate with patent counsel was a material breach of any contractual or agency duty Dr. Castiel could claim.
45. Draim is entitled to the compensation he claims.
MEMORANDUM OPINION
This case is before me for all purposes. Currently pending and ready for resolution are the issues set forth in the Court of Appeals' decision of April 8, 2008.
The Remand
The Court of Appeals has remanded this case to me to consider the claim by Dr. Castiel that Draim breached their employment agreement and therefore is not entitled to the compensation he seeks. Draim v. Virtual Geosatellite Holdings, Inc., 522 F.3d 452 (D.C.Cir.2008).
The 1992 Agreement
At trial, Dr. Castiel testified that the 1992 consulting agreement was not one of employment and that the only limitations or restrictions in the consulting agreement were the prohibitions on using "trade secrets[1] and engaging in conflicting activities."[2] These provisions did not restrict Draim's ability to work for another company after he left defendants' employment. Tr. at 106.
He also conceded that Draim became an employee of his companies in July of 1997 and that there was no written employment agreement pertaining to any aspect of Draim's employment. Id. According to Dr. Castiel, creating such an agreement "fell between the cracks," although he and Draim may have intended to have such an agreement. Id. Thus, Dr. Castiel conceded that the 1992 consulting agreement ended when Draim went from being a consultant to being an employee and that a *38 written agreement as to Draim's employment never replaced it. Draim agreed. See Tr. at 107 (when consulting agreement ended on June 30, 1997 and he became an employee on July 1, 1997, Draim and Dr. Castiel never entered into a written agreement pertaining to his employment from that point on).
In the findings of fact that accompany this opinion, I have therefore concluded that the 1992 written consulting agreement that contained provisions obliging Draim to preserve the confidentiality of Dr. Castiel's trade secrets and to refrain from engaging in conflicting activities expired by its own terms on June 30, 1997, and from that point on Draim was an employee. He and Dr. Castiel never executed a written agreement as to that employment.
In my initial opinion I stated: "the parties continued to operate under the understanding articulated in the contract and neither party disputes this finding on appeal." Draim v. Virtual Geosatellite Holdings, Inc., 433 F.Supp.2d 99, 101 (D.D.C.2006). That statement is incorrect insofar as it suggested that the provisions in the 1992 consulting agreement as to protecting trade secrets and refraining from conflicting activities survived the end of the consulting agreement in 1997. I should have said more carefully: "Once the consulting arrangement between Draim and MCHI, generated by the November 1, 1992 agreement, ended with Draim's becoming a full-time employee, there was no written agreement between Draim and his now-employer as to either his compensation or his payment of bonuses. Instead, Draim's employer paid him $72,000 and Draim continued to receive the bonuses that he had received under the consulting agreement, albeit with an increase in the size of the bonuses."
Additionally, there was no testimony that the parties jointly intended to incorporate the provisions of the 1992 consulting agreement, particularly the provisions as to conflicting activities, preservation of trade secrets, and the requirement of giving 30 days notice of a desire to terminate the agreement, into their oral understanding as to Draim's post-1997 employment. Nevertheless, Castiel stated that he believed that the conflict of interest provision that originally appeared in the 1992 consulting agreement was restricted to that agreement itself[3] but that he believed that the trade secrets provision continued even after the termination of the 1992 consulting agreement. As Dr. Castiel put it: "But I guess I understood your question about the term and I understand this [the trade secrets provision] applies beyond the term. It does not mean that if the agreement is terminated he can take our secrets and give them to everybody he knows." Id.
Thus, as Dr. Castiel saw their relationship following the conclusion of the consulting agreement, he and Draim had an understanding as to Draim's salary and bonuses as well as an understanding that Draim would preserve the trade secrets he learned during his entire relationship with Castiel's companies, including his time as a consultant, as an employee, and then in perpetuity after he left Castiel's employ.
On the other hand, Draim argues that there was no evidence that either party intended that the obligations imposed by the 1992 consulting agreement would pertain to Draim's employment once that agreement expired and he became an employee. Plaintiff's Proposed Findings of Fact and Conclusions of Law at 7-11.
*39 Thus, while the parties had an employment agreement and agreed on compensation in the form of salary and bonuses, they were mutually silent as to any other terms. The court must therefore look to the law of the District of Columbia to ascertain the nature of the employment contract and whether certain terms (if any) will be imputed to the parties or implied to fulfill the employment agreement the parties agreed to, including the obligation not to divulge trade secrets.
The Law of the District of Columbia
Under the law of the District of Columbia, the mutual promise to employ and serve creates a contract terminable at the will of either party. Unless the parties agree to enter into a contract for a fixed duration or a written contract for permanent employment, the employment will be regarded as terminable at will. Sullivan v. Heritage Found., 399 A.2d 856, 860 (D.C.1979) applied as the law of the District of Columbia in Shankle v. DRG Fin. Corp., 729 F.Supp. 122, 124 (D.D.C.1989). Accord Willoughby v. Potomac Elec. Power Co., 100 F.3d 999, 1001 (D.C.Cir.1996) (applying DC law, employment relationship is presumed to be terminable at will by either employer or employee), cert. denied, 520 U.S. 1197, 117 S.Ct. 1553, 137 L.Ed.2d 701 (1997); Turner v. Fed. Ex, 539 F.Supp.2d 404, 410 (D.D.C.2008) (applying DC law, "[t]he presumption of at-will employment is rebutted only where the parties clearly state an intention to place limits on the employer's right to terminate"); Daisley v. Riggs Bank, 372 F.Supp.2d 61, 67-68 (D.D.C.2005) (applying DC law, presumption in favor of an at-will employment is overcome only by clear expression of an intention to limit employer's right to terminate). See Wright v. District of Columbia Dept. of Employment Services, 560 A.2d 509, 512 (D.C.App. 1989).[4]
Under District of Columbia law, every contract is deemed to contain an implied covenant of good faith and fair dealing that means that neither party shall do anything that would have the effect of destroying or injuring the right of the other party to receive the fruits of the contract. Paul v. Howard Univ., 754 A.2d 297, 310 (D.C.2000). Unfortunately for Dr. Castiel, any claim by him that Draim had obligations that flowed to him from this implied covenant founders on the equally well-settled principle that a claim for a breach of this duty cannot be made by the parties to an employment contract that is terminable at will. Id. at 310 n. 28 ("[S]uch a claim [for breach of covenant of good faith and fair dealing] cannot be made by an at-will employee because there is no contract to provide a basis for the covenant."). Accord Clampitt v. Am. Univ., 957 A.2d 23, 39 (D.C.2008); Kerrigan v. Britches of Georgetowne, Inc., 705 A.2d 624, 627 (D.C.1997); Brug v. Nat'l Coal. for the Homeless, 45 F.Supp.2d 33, 43 (D.D.C.1999). Thus, Dr. Castiel cannot proceed against Draim on the basis that any of his conduct, regardless of its nature, breached this covenant.
Dr. Castiel could, however, proceed upon the theory that even in the absence of a written contract and even in an employment agreement that is at will, an employee must, as a matter of agency law, act solely for the benefit of her principal in all matters concerning her agency. Gross v. Akin, Gump, Strauss, Hauer & Feld, 599 F.Supp.2d 23, 32 (D.D.C.2009) (relying *40 on RESTATEMENT (SECOND) OF THE LAW OF AGENCY § 387). But, Dr. Castiel conceded that the obligation of the 1992 agreement not to engage in conflicting activities did not survive the term of that agreement. This would mean that (1) during the term of the consulting agreement, 1992-1997, Draim owed Dr. Castiel the contractual duties defined in paragraphs 8 and 9 of the consulting agreement; (2) during the 1997-2000 period, Draim owed Dr. Castiel the fiduciary duty to act solely in Dr. Castiel's benefit in all matters concerning his employment by Dr. Castiel; and (3) Draim owed Dr. Castiel neither a contractual nor an agency, fiduciary duty upon the termination of his employment.
Moreover, conceded or not, an employee, upon termination of her employment, may compete against her former employer. RESTATEMENT (SECOND) OF THE LAW OF AGENCY § 396(a) (1958) ("Unless otherwise agreed, after the termination of the agency, the agent: (a) has no duty not to compete with the principal").[5] This is the law of the District of Columbia. United States Travel Agency, Inc. v. World-Wide Travel Service Corp., 235 A.2d 788, 789 (D.C.1967) ("An agent after termination of his employment, in the absence of an agreement to the contrary, may compete with his former principal. . ."). Accord Group Assoc. Plans, Inc. v. Colquhoun, 466 F.2d 469, 474 (D.C.Cir. 1972) (acknowledging "common law doctrine that permits an employee to compete with his former employer absent an express contractual provision to the contrary.") See Mercer Mgmt. Consulting Inc. v. Wilde, 920 F.Supp. 219, 233 (D.D.C.1996) (even while employed, an employee may make arrangements to compete with his principal provided no unfair acts are committed or injury done his principal); Riggs Inv. Mgmt. Corp. v. Columbia Partners, LLC, 966 F.Supp. 1250, 1265 (D.D.C.1997) (same). Draim's post-termination activities therefore cannot serve as the basis for any claim of breach of an agent's fiduciary duty to his principal because Draim went to work for a competitor and in fact competed against Dr. Castiel.
While the same section of the RESTATEMENT imposes on Draim a post-termination obligation to maintain the confidentiality of the trade secrets he learned while employed, RESTATEMENT (SECOND) OF THE LAW OF AGENCY § 396(b) (1958), I have found no evidence whatsoever that, either while employed or thereafter, Draim converted to his own use or to the use of any of Dr. Castiel's competitors trade secret information. I therefore have specifically found as a fact that he did not breach in that manner any fiduciary obligation he may have had in this respect.
While it does not deal with secrecy, I must say that I am much more concerned about Draim's admitted failure, after he left Dr. Castiel's employ, to cooperate with patent counsel in perfecting the patents he had worked on and his purposefully filing an interfering application. It is in my view not worthy of a man who is obviously honorable. Nevertheless, there is no authority I can find that would impose upon Draim a duty, expressed in the law of the agency or a contractual duty that survived the termination of his at-will employment, that would have obliged him to cooperate with Dr. Castiel and not to compete against him. As to the latter and as I have just pointed out, Draim could legitimately compete against Dr. Castiel *41 once their relationship ended if one views the matter from the perspective of the law of agency. As to the law of contracts, District of Columbia law does not derive a covenant of good faith and fair dealing from an at-will employment and, even if it did, that duty ended when he left Dr. Castiel's companies.
Furthermore, any contractual breach must be material as the court of appeals defined that term in this case:
If Draim engaged in conduct that constituted a material breach of his employment contract, then he is not entitled to payment of bonuses under the contract. "A total breach may be . . . by such a material failure of performance when due as to go to the essence and frustrate substantially the purpose for which the contract was agreed to by the injured party." Keefe Co. v. Americable Int'l, Inc., 755 A.2d 469, 475 (D.C.2000) (quoting San Carlos Irrigation & Drainage Dist. v. United States, 23 Cl.Ct. 276, 280 (1991)) (internal quotation marks omitted); see also 23 WILLISTON ON CONTRACTS § 63.3 (4th ed.).
Draim, 522 F.3d at 454-55.
The only assertion of materiality as to Draim's conduct is that his doing so caused "confusion in the marketplace of the ownership of the patents." Defendants' Proposed Findings of Fact and Conclusions of Law at 8. There was, however, no evidence whatsoever at trial of any such confusion. In fact, the statements in the trial transcript cited in support of this assertion (Tr. at 118) deal only with the dates of certain patent applications. At no point did defendants offer any evidence that Draim's not cooperating with patent counsel and filing the interfering application caused them any practical harm. There was no evidence of lost sales, no evidence that potential buyers of the technologies at issue were confused to defendants' actual detriment, and no evidence of money or time that defendants had to spend to undo the harm that Draim's activities might have caused their competitive position. Indeed, as to the interfering application, Dr. Castiel eventually secured the 168 patent and Draim's name was stricken from it.
In the absence of any such evidence, I cannot possibly conclude that there was a material breach of any contractual obligation Draim had, even if I were to assume that Draim had such obligations. By the same token, I cannot find that any breach of any duty Draim owed Dr. Castiel as his former agent (assuming a former agent has any such duty) caused Dr. Castiel such substantial harm that I should in justice and fairness deny Draim the compensation he is otherwise due.
Finally, I appreciate that Dr. Castiel also accused Draim of (1) being involved in the theft of a computer and the proprietary software on it; (2) stating in a marketing document that his new employer owned the 168 slot application patent when Draim knew the new employer did not and using a study that had been commissioned and paid for by Dr. Castiel; and (3) engaging in a conspiracy to destroy the entities owned by Dr. Castiel. I have found, however, that Draim was not involved in the theft of the computer and did not use the proprietary software on it. I also credit Draim's testimony that he was not aware of the statement about the 168 slot application in the marketing document and that his sole contribution to that document was to input the description of the Cobra technology that was not owned by Dr. Castiel. Finally, the Court of Appeals' remand and my second review of the trial transcript and the exhibits offered into evidence gives me no reason to revisit my earlier finding "that I do not find that it is more likely than not that Draim participated in a conspiracy to destroy or steal from the Castiel *42 entities." Findings of Fact, Conclusions of Law and Order ¶ 16.
NOTES
[1] Paragraph 9 of the consulting agreement states:
Consultant shall treat as proprietary any information belonging to Client, its affiliated companies, or any third parties, disclosed to Consultant in the course of Consultant's services. Consultant assigns and agrees to assign to Client or its nominee all rights in inventions or other proprietary information conceived by Consultant during the term of this Agreement with respect to any work which Consultant performs, and is financially compensated for by Client or the Corporation, under this Agreement. In addition, the Corporation will pay Consultant an amount not to exceed $2,000 as a bonus upon the completion of successful filing for any one patent. The actual amount will be determined in inverse proportion to the number of co-inventors listed in the patent application(s). If Consultant is the sole inventor, the full $2,000 will be paid. Likewise, upon successful issuance of any one patent, the Corporation will pay Consultant an additional bonus not to exceed $10,000, the actual amount of the bonus being determined in inverse proportion to the number of co-inventors listed in the patent(s).
Draim, 522 F.3d at 455 n. 4.
[2] Paragraph 8 of the agreement states:
During the time of this Agreement, Consultant shall not enter into any activity, employment, or business arrangement which conflicts with Client's interest or Consultant's obligations under this Agreement. In view of the sensitive nature of Consultant's status, Client shall have the option of terminating this Agreement at any time if, in its sole judgment, a conflict of interest exists or is imminent. . . . Consultant shall advise Client of its position with respect to any activity, employment, or business arrangement contemplated by Consultant which may be relevant to this Paragraph. For this purpose Consultant agrees to disclose any such plans to Client prior to implementation.
Id. at 456 n. 5.
[3] Note how the provision pertaining to not entering into conflicting activities is limited to "the time of this Agreement." Draim, 522 F.3d at 456 n. 8.
[4] Note that Draim could not possibly have breached his employment agreement by leaving Dr. Castiel's employ whether or not he gave the 30 days notice that he would have had to give under the 1992 consulting agreement before he left because under District of Columbia law, either party could terminate the employment relationship at will.
[5] In the RESTATEMENT (THIRD) OF THE LAW OF AGENCY (2006), this principle appears as Comment C to § 8.04.
|
114 B.R. 711 (1990)
In re Marshall FARLEY, Debtor.
Bankruptcy No. 89-05445-H13.
United States Bankruptcy Court, S.D. California.
April 17, 1990.
Alonzo L. Stevens, for debtor.
*712 David Skelton, Harry Heid, Chapter 13 Trustee.
John C. Edwards, for plaintiffs.
ORDER ON CONFIRMATION
PETER W. BOWIE, Bankruptcy Judge.
Debtor filed his Chapter 13 petition on July 17, 1989. In his Statement he listed no secured obligations to be paid through the plan, and $46,952 in unsecured debt. Of that amount, $34,200 represented judgments arising from injuries and property damage from a vehicle accident while debtor was under the influence of alcohol. Debtor proposed to pay the trustee $150 per month with a dividend to unsecured creditors of 11%. The judgment creditors objected to confirmation of the debtor's plan, asserting it was not filed in good faith and that there was disposable income not committed to fund the plan.
This Court has jurisdiction under 28 U.S.C. § 1334 and General Order No. 312-D of the United States District Court for the Southern District of California. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(L).
Debtor's original budget listed net income of $1,700 and expenses of $1,520. Among those expenses, debtor listed $330 for transportation (including auto insurance), $100 for miscellaneous, $40 for recreation, and $30 excess per month over the proposed plan payment. Debtor subsequently amended his budget to show his current actual income and expenses. His net income was reduced to $1,532, and his expenses were reduced to $1,379, with no allowance for recreation or miscellaneous, and $3 excess per month. There is no evidence to establish that the debtor's figures are in error. This Court is compelled to conclude that debtor has committed all disposable income to fund his plan, which he has since interlineated to increase the dividend to unsecured creditors to 15%.
The central issue is whether debtor's plan is filed in good faith inasmuch as debtor seeks to pay only 15% to unsecured creditors and to discharge the balance of $34,200 in judgments which would not be dischargeable in a case brought under Chapter 7. The judgment creditors argue that the plan is not offered in legal good faith because over 70% of the unsecured debt provided for in the plan would be nondischargeable in a Chapter 7. Yet, they argue, debtor seeks the "superdischarge" of a Chapter 13 while only paying a nominal amount, 15%, which amounts to just over $7,000 on debt in excess of $46,000.
Judgment creditors cite In re Warren, 89 B.R. 87 (9th Cir. BAP 1988) to support their position. Warren held that "good faith" is a separate test from "best effort." In Warren, the debtor initially filed under Chapter 7 and listed a judgment owed to his employer from an alleged embezzlement. The employer filed an adversary proceeding objecting to the dischargeability of the debt, and the debtor converted his case to one under Chapter 13. Debtor in that case listed approximately $3,500 in priority debt and almost $45,000 in unsecured debt, approximately $41,000 of which was the judgment. Warren proposed to pay the priority debt in full over 36 months, plus a dividend of about 2% to unsecured creditors, for a total distribution of about $5,400, including administrative expenses. By way of comparison, in the instant case Farley has no secured or priority debt to be paid through the plan, but would pay administrative expenses and just over $7,000 to unsecured creditors. Farley's plan would run approximately 55 months.
Warren holds that "the debtor has the burden to establish good faith, which has been characterized as `especially heavy' when a `superdischarge' is sought." 89 B.R. at 93. If an objection to confirmation is filed, the debtor must do more than simply present a plan for payment. A debtor must present "meaningful testimony relative to his good faith." 89 B.R. at 91.
Drawing on other decisions, Warren counsels courts concerning their role in making "a considered assessment of the debtor's good faith." 89 B.R. at 90.
*713 "The determination with which the bankruptcy court is entrusted under § 1325(a)(3) is not a ministerial one. Like any judicial determination which a bankruptcy court is called on to make during the course of a proceeding, it calls for the exercise of the Court's informed and independent judgment."
Id. Similarly, the court observed:
"It should be noted here that Chapter 13 provides that the bankruptcy judge shall preside over confirmation proceedings. If confirmation depended entirely upon arithmetical computations or the absence of illegal activity in the case, there would be no need for a judge. Confirmation of a Chapter 13 plan requires the exercise of judicial discretion and assessment of evidence by a bankruptcy judge. The good faith requirement is one of the central, perhaps the most important confirmation finding to be made by the court in any Chapter 13 case. Each case must be judged on its own facts."
Id. The difficulty for debtors and courts alike, however, is to define what facts are sufficient to establish good faith. Without some definition, an exercise of discretion could be arbitrary and an abuse. The Warren court has listed some factors which courts have considered "as guidelines for determining good faith on a case-by-case basis. . . ." They are:
1) The amount of the proposed payments and the amounts of the debtor's surplus;
2) The debtor's employment history, ability to earn, and likelihood of future increases in income;
3) The probable or expected duration of the plan;
4) The accuracy of the plan's statements of the debts, expenses and percentage of repayment of unsecured debt, and whether any inaccuracies are an attempt to mislead the court;
5) The extent of preferential treatment between classes of creditors;
6) The extent to which secured claims are modified;
7) The type of debt sought to be discharged, and whether any such debt is nondischargeable in Chapter 7;
8) The existence of special circumstances such as inordinate medical expenses;
9) The frequency with which the debtor has sought relief under the Bankruptcy Reform Act;
10) The motivation and sincerity of the debtor in seeking Chapter 13 relief; and
11) The burden which the plan's administration would place upon the trustee.
89 B.R. at 93. Looking at each of the factors listed, this Court concludes that debtor has satisfied 1, 3, 4, 5, 6, 9 and 11. Debtor has failed to offer evidence on 2 and 10. There are no special circumstances favoring the plan, such as inordinate medical expenses, and it is a given that the bulk of the debt to be discharged upon satisfactory performance of the plan is debt which would not be dischargeable under Chapter 7. Therein lies the core of the problem.
Section 1325 of Title 11, United States Code, sets out the requirements which a plan must meet to be confirmed under Chapter 13. Separate from the good faith requirement in 1325(a)(3) is a requirement that:
(4) the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date;. . . .
Section 1325(a)(4). While, of course, it is true that in a liquidation of Farley's estate these judgment creditors would receive nothing because Farley has no assets which are non-exempt, they would still have a full judgment which had not been discharged and on which they could seek collection from Farley's post-petition income. Under Chapter 13, however, the debt could be discharged after payment of little or nothing, for § 1328(a) excepts from discharge only long term debt and alimony or support obligations. Nevertheless, courts have routinely rejected the argument *714 that creditors owed obligations which are non-dischargeable under Chapter 7 must be paid through a Chapter 13 plan at least what they could collect after a Chapter 7 discharge. In re Klein, 57 B.R. 818, 820 (9th Cir. BAP 1985); In re Rimgale, 669 F.2d 426, 430 (7th Cir.1982); In re Vratanina, 22 B.R. 453 (Bankr.N.D.Ill. 1982); Matter of Marlow, 3 B.R. 305, 307 (Bankr.N.D.Ill.1980).
As the Warren court noted:
Chapter 13 was designed and enacted as a vehicle for voluntary repayment with future income through composition and/or extension of debts. (Citations omitted.)
89 B.R. at 91. The court continued:
With reference to the broader discharge recommended in Chapter 13 as opposed to Chapter 7, the Commission noted:
If the debtor wants to pay his debts pursuant to a plan, and if creditors are willing to go along, he should be allowed to do so. The fact that a discharge would not be available in a liquidation case should furnish a greater incentive for the debtor to perform under the plan.
89 B.R. at 91-92. Quoting from Chapter 13 legislative history, the Warren court reiterated:
From the perspective of the House of Representatives, Chapter 13 was designed to accomplish the following:
The purpose of Chapter 13 is to enable an individual, under court supervision and protection, to develop and perform under a plan for the repayment of his debts over an extended period. . . . The benefit to the debtor of developing a plan of repayment under Chapter 13, rather than opting for liquidation under Chapter 7, is that it permits the debtor to protect his assets. In a liquidation case, the debtor must surrender his nonexempt assets for liquidation and sale by the trustee. Under Chapter 13, the debtor may retain his property by agreeing to repay his creditors. Chapter 13 also protects a debtor's credit standing far better than a straight bankruptcy, because he is viewed by the credit industry as a better risk. In addition, it satisfies many debtors' desire to avoid the stigma attached to straight bankruptcy and to retain the pride attendant on being able to meet one's obligations. The benefit to creditors is self-evident: their losses will be significantly less than if their debtors opt for straight bankruptcy.
89 B.R. at 92.
It is hard for this Court to fathom how any of the above-quoted congressionally designed purposes of Chapter 13 are advanced by allowing a debtor to discharge in Chapter 13 with little or no payment debts he could not discharge in Chapter 7. There is no benefit to those creditors; the debtor has not met his obligations to his creditors so does not have that fact as a basis for retaining his pride. Moreover, this debtor has no non-exempt assets to preserve, so lacks that incentive, as well. This Court has not been shown any evidence that in current times Chapter 13 debtors who perform under low percentage plans are viewed as better credit risks. Indeed, this Court suspects that the credit industry is more interested in the six year bar from refiling in such a case. 11 U.S.C. § 727(a)(9).
A pressing question is why did the Congress not address the conflict between the avowed purposes of Chapter 13 and the possible result that creditors with obligations not dischargeable under Chapter 7 could have those debts discharged under Chapter 13 for little or no payment. Perhaps the Congress did not have such creditors in mind when it considered that "`partial repayment' of unsecured debts under Chapter 13 is preferable to almost certain nonpayment of those debts in `straight bankruptcy' where `both the debtor and his creditors are the losers.'" 89 B.R. at 91. However, it has been pointed out that the Congress was aware that treatment of debts nondischargeable under Chapter 7 would be different under Chapter 13. In re Webre, 88 B.R. 242, 246 (9th Cir. BAP 1988).
*715 For all the foregoing reasons, it is extremely tempting to conclude that the Congress did not intend that otherwise non-dischargeable debts should be discharged through a Chapter 13 plan that pays to those creditors substantially less than all of those obligations. Such a result does not satisfy the avowed purposes of Chapter 13. Even more importantly, such a result is directly contrary to the clearly expressed congressional intent embodied in 11 U.S.C. § 523(a), which establishes the non-dischargeability of those debts under Chapter 7.
Indeed, this Court would conclude that Chapter 13 does not permit the discharge of otherwise nondischargeable debts unless the debtor's plan provides for payment of those debts, except that this Court believes the current state of the law compels otherwise. Specifically, the Congress knew how to provide for the nondischargeability of certain debts under Chapter 13 because it did so provide in § 1328(a). The debt in the instant case is neither long term debt nor alimony or support. The canons of statutory construction require the conclusion that the inclusion of those debts as excepted from a Chapter 13 discharge means that other debts nondischargeable under Chapter 7 are dischargeable under Chapter 13. Similarly, the Congress could have provided a priority status to this group of creditors. See, e.g., 11 U.S.C. § 1322(a). Also, the Congress expressly provided that debts non-dischargeable in Chapter 7 are also not discharged in a hardship discharge under Chapter 13. 11 U.S.C. § 1328(b). As much as this Court believes that debts nondischargeable under Chapter 7 should be discharged under Chapter 13 only if paid through the plan, that is for the Congress to provide, not the judiciary.
What remains then, is resolution of the good faith analysis required by Warren and § 1325(a)(3). As noted, debtor has failed to offer evidence on his employment history, his ability to earn, and the "likelihood of future increases in income." Similarly, he has not offered evidence on his motivation or sincerity in seeking Chapter 13 relief, although those can be inferred. The fact remains the debtor seeks to do what the law appears to permit him to do. He has not manipulated the Bankruptcy Code and he is making his best effort under the proposed plan. In this Court's view, a finding of a lack of legal good faith has to be grounded on something different than the fact that the Court does not believe the result is fair to creditors who will receive substantially less under Chapter 13 than they would have had the potential of collecting after a Chapter 7 discharge.
Nor is the Court aided by the concept advanced by some courts that confirmation of a Chapter 13 plan should be denied when it is nothing more than a "thinly veiled Chapter 7." It is hard to imagine a Chapter 13 more "thinly veiled" than one that proposes to pay unsecured creditors 0%, or 1%. Yet, in this circuit, a Chapter 13 plan may so provide. In re Goeb, 675 F.2d 1386 (9th Cir.1982). While "substantial repayment" was an important factor in earlier cases, e.g., In re Burrell, 6 B.R. 360 (N.D. Cal.1980), its significance was diminished in the Ninth Circuit in In re Goeb, 675 F.2d 1386 (9th Cir.1982). As recently reiterated by the Bankruptcy Appellate Panel, "there is no substantial repayment requirement in the Ninth Circuit." In re Porter, 102 B.R. 773, 776 (9th Cir. BAP 1989).
In summary, and for the reasons set out above, this Court believes that debtors should not be able to discharge through Chapter 13 debts which they could not discharge pursuant to Chapter 7, unless those debts are paid. It is a glaringly contradictory proposition that creditors owed obligations nondischargeable under Chapter 7 can be forced to take less under Chapter 13 while the theoretical premise remains that the debtor receives the benefit of the "superdischarge" because he is paying something he would not pay under Chapter 7 (a premise which itself is fallacious in the face of a 0% plan). Indeed, it is a cruel irony that creditors favored over other unsecured creditors by § 523(a) because the debts owed them are not dischargeable under Chapter 7 are relegated to taking much less in Chapter 13 while the less favored other unsecured creditors may receive something they would not receive in a *716 Chapter 7 proceeding. There may be an argument that classifying debts nondischargeable in a Chapter 7 with other unsecured debts is discriminatory because of the statutory preference accorded those debts under § 523(a). See, e.g., In re Rimgale, 669 F.2d 426, 433 at n. 22 (7th Cir. 1982). But see In re Vratanina, 22 B.R. 453, 456 (Bankr.N.D.Ill.1982). If so, that argument has not been raised in the instant proceedings.
Notwithstanding the convictions of this Court about the inequitable result which obtains in a case such as this, this Court is compelled to conclude that the plan as proposed should be confirmed. Debtor has met most of the factors enumerated in Warren. This Court's dissatisfaction with the result is not a sufficient ground to support a conclusion that the debtor's plan is not proposed in good faith. It is for the Congress to redress what this Court perceives as a flaw in the statutory scheme of Chapter 13.
Accordingly, it is hereby ordered that debtor's proposed plan, as interlineated, shall be, and hereby is, confirmed, subject to the conditions that debtor shall, commencing on or before May 15, 1990 and each and every six (6) months thereafter throughout the duration of the plan, file with the Court and serve on the Chapter 13 Trustee and on counsel for the judgment creditors a declaration of the debtor, made under penalty of perjury, which states the name, address and phone number of each employer of the debtor during the preceding six (6) months, the duration of each period of employment, and the reason(s) for any employment terminating, or including less than forty (40) work hours per 5 day week. The debtor shall attach to each such declaration every pay statement for pay received during the preceding six (6) months. The pay statement shall reflect all gross pay, including overtime, and shall show all deductions taken from gross pay, all allotments or other monies withheld or transferred, including insurance premiums or retirement or savings contributions, the number of exemptions claimed for federal and state tax purposes, and shall show net pay. To the extent pay statements provided by the employer do not include the information required hereby, the debtor shall provide that information in the body of his declaration. The information thus provided may serve as a basis for a motion to modify the debtor's plan brought either by creditors or the Chapter 13 Trustee to the extent the information establishes changed circumstances which would support a modification pursuant to 11 U.S.C. § 1329. Failure to timely file and serve the required declaration and attachments may constitute a basis for dismissal of this proceeding for failure to comply with this order.
IT IS SO ORDERED.
|
102 B.R. 220 (1989)
In re Johnny Stephon SANDOVAL, SS# XXX-XX-XXXX and Dawne Sue Sandoval, SS# XXX-XX-XXXX, Debtors.
D & L REPAIR, INC., Plaintiff,
v.
Johnny Stephon SANDOVAL and Dawne Sue Sandoval, Defendants.
Bankruptcy No. 7-85-01691 MF, Adv. No. 89-0067 M.
United States Bankruptcy Court, D. New Mexico.
July 14, 1989.
*221 R. Thomas Dailey, Farmington, N.M., for plaintiff.
James C. Jacobsen, Albuquerque, N.M., for defendants.
ORDER
MARK B. McFEELEY, Bankruptcy Judge.
This matter came before the Court on cross-motions for summary judgment. For the reasons stated herein, the defendants' motion will be granted and the plaintiff's motion will be denied.
Defendants filed their bankruptcy petition on December 9, 1985, and the § 341 meeting of creditors was held on February 6, 1986. The case was noticed as an asset case and the deadline for filing claims was fixed as 90 days after the § 341 meeting. Plaintiff was not listed as a creditor and received no notice from the Court as to the above deadline. While defendants allege (and the plaintiff disputes) that plaintiff had actual knowledge of the bankruptcy in January of 1986, a determination of that fact is not necessary to this Court's determination of the issue herein. It is admitted by plaintiff that it became aware of the filing of the petition and filed a proof of claim on October 20, 1986. The record further reveals that the trustee filed a report of no distribution on November 12, 1986 and that the case was closed on January 26, 1987.
Thereafter, in August of 1988, plaintiff filed a complaint for money owed on open account against the defendants in the District Court for San Juan County, New Mexico for charges incurred prior to September 6, 1985, plus monthly service charges thereafter.
The defendants sought to reopen their bankruptcy case to add plaintiff as a creditor and the Court ordered such reopening on October 28, 1988. The instant adversary proceeding was then commenced by plaintiff for a determination that the debt was not discharged pursuant to 11 U.S.C. Section 523(a)(3)(A) which provides:
11 USCS § 523. Exceptions to discharge
(a) A discharge under section 727, 1141, 1228[a], 1228(b), or 1328(b) of this title [11 USCS § 724, 1141, 1228(a), 1228(b), or 1328(b)] does not discharge an individual debtor from any debt
. . . . .
3) neither listed nor scheduled under section 521(1) of this title [11 USCS § 521(1)], with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit
(A) if such debt is not of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of *222 claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing . . .
I agree with the view expressed by the Seventh Circuit in Matter of Stark, 717 F.2d 322 (7th Cir.1983) that the Bankruptcy Code should not be mechanically applied, but rather that the Bankruptcy Court should exercise its equitable powers to see that substantial justice is done. Stark, is the leading case for the proposition that a debtor should be allowed to reopen a bankruptcy case to add an omitted creditor if the case is a no asset case and if there are no allegations of fraud or intentional design in originally omitting the creditor. It is this Court's view that the reopening and listing of an additional creditor should always be allowed, and the determination of fraud or intentional design left to the determination of whether the debt has been discharged pursuant to Section 523(a)(3)(A) and (a)(3)(B), if such an adversary proceeding is brought. Many Courts have followed Stark, in holding that, in a no asset case, an amendment should be allowed and the omitted debt discharged. In re Rosinski, 759 F.2d 539 (6th Cir.1985); In re Baitcher, 781 F.2d 1529 (11th Cir.1986); In re Hendricks, 87 B.R. 114 (Bkrtcy.C.D.Calif.1988); In re Anderson, 72 B.R. 783 (Bkrtcy.D.Minn. 1987); In re Beshensky, 68 B.R. 452 (Bkrtcy.E.D.Wisc.1987), and cases cited therein; In re SCISM, 41 B.R. 384 (Bkrtcy. W.D.Okla.1984), In re Maddox, 62 B.R. 510 (Bkrtcy.E.D.N.Y.1986).
This determination, these courts say, results from the language of the statute which states that the debt is not discharged if not listed in time for the claimant to timely file a proof of claim, and the notice in no asset chapter 7s which provides that if it is necessary to file proofs of claim the creditors will be thereafter notified. Thus, these courts reason, the creditor has been listed in time to file a timely proof of claim and the debt should be considered discharged.
Courts have a little more trouble coming to the same conclusion when an asset notice has been sent fixing a time for filing claims, even if the case is later determined to be a no asset case. See In re Laczko, 37 B.R. 676 (BAP 9th Cir.1984), aff'd., 772 F.2d 912 (9th Cir.1985); In re Iannacone, 21 B.R. 153 (Bkrtcy.Mass.1982).
It is my opinion that the statute requires that in order for the debt to be determined to be non-dischargeable, the creditor must show that as a practical matter, a timely proof of claim could not have been filed.
11 U.S.C. Section 726(a)(2)(C) provides that a creditor can share in a distribution from the estate even if the creditor's claim is filed after the expiration of the claims filing period if the creditor did not have notice or actual knowledge of the case in time to timely file a proof of claim and the claim is filed in time for it to share in a distribution. In the instant case, the creditor alleges that it filed a proof of claim immediately upon being informed of the bankruptcy. As a practical matter, the claim was filed in time to share in any distribution by the trustee had there been one, or if the trustee discovers assets and reopens the case as an asset case in the future. While in an appropriate case the creditor who files suit because no notice of the petition was ever given should have costs and attorney fees incurred in filing the state action declared non-dischargeable, in this case the creditor was aware of the bankruptcy prior to filing suit and no such consideration will be given. In re Beshensky, 68 B.R. 452 (Bkrtcy.E.D.Wis.1987); In re Butt, 68 B.R. 1001 (Bkrtcy.C.D.Ill.1987). See also In re Columbia Ribbon and Carbon Mfg. Co., Inc., 54 B.R. 714 (Bkrtcy.S.D. N.Y.1985); In re Burruss, 65 B.R. 407 (Bkrtcy.D.Md.1986); In re Sitzberger, 65 B.R. 256 (Bkrtcy.S.D.Cal.1986).
There is no allegation here that the debt is one of the kind specified to be nondischargeable pursuant to 11 U.S.C. Section 523(a)(3)(B). Plaintiff's debt is therefore discharged by this bankruptcy proceeding.
IT IS ORDERED that counsel for defendants prepare a judgment in conformity with this order within 10 days.
|
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-08-00589-CR
Garland Scroggins, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 331ST JUDICIAL DISTRICT
NO. 3012305, HONORABLE BOB PERKINS, JUDGE PRESIDING
MEMORANDUM OPINION
This is an attempted appeal from the denial of appellant’s “Motion for Nunc Pro Tunc
Order to Correct Invalid Affirmative Finding of a Deadly Weapon.” The denial of a motion for a
nunc pro tunc judgment is not an appealable order. Everett v. State, 82 S.W.3d 735, 735
(Tex. App.—Waco 2002, pet dism’d). Because this appeal does not fall within the exceptions to the
general rule that appeal may be taken only from a final judgment of conviction, we have no
jurisdiction. Accordingly, we dismiss the appeal.
__________________________________________
Diane M. Henson, Justice
Before Justices Patterson, Waldrop and Henson
Dismissed for Want of Jurisdiction
Filed: October 30, 2008
Do Not Publish
|
300 S.C. 43 (1989)
386 S.E.2d 290
SALUDA MOTOR LINES, INC., Appellant
v.
Jean E. CROUCH, Respondent.
1409
Court of Appeals of South Carolina.
Heard October 11, 1989.
Decided November 6, 1989.
Wyatt Saunders, Laurens, for appellant,
Malissa M. Burnette, Columbia, and C. David Sawyer, Jr., Saluda, for respondent.
Heard Oct. 11, 1989.
Decided Nov. 6, 1989.
LITTLEJOHN, Judge:
Saluda Motor Lines, Inc., Plaintiff-Appellant (Motor Lines) commenced this action against Jean E. Crouch, Defendant-Respondent (Crouch) charging Crouch with trespassing on land over which Motor Lines alleges it has a right-of-way for the purpose of operating a railroad. Crouch answered the complaint alleging that the easement for railroad purpose had been abandoned. The trial judge granted Crouch a summary judgment holding that such easement as the railroad company and Motor Lines claim had been abandoned. *44 In so ruling the judge held as permitted under Rule 56 of the South Carolina Rules of Civil Procedure that there was no genuine issue of fact to be determined in a trial. Motor Lines appeals; we affirm.
The basic issue upon which this appeal must be determined is whether a genuine issue of material fact bearing upon the question of Motor Lines' abandonment was submitted to the court. The other contention of error relates to an evidentiary matter which is not relevant to the prime issue.
In 1912 Augusta Northern Railway procured a right-of-way one hundred feet wide from Saluda to Ward, South Carolina, and built a railroad some twelve miles long. In 1941 the railroad company ceased to operate and the tracks were removed from the easement properties. In 1942 the railway company conveyed to Saluda Motor Lines, Inc. several assets including its right-of-way over lands between Saluda and Ward, including that owned by Crouch today. Crouch owns an uncontested fee simple interest in the land subject only to the claimed easement of Motor Lines.
Saluda Motor Lines, Inc. is a corporation whose stock is owned by Louise Blackwell and James Blackwell. It is a private corporation with no authority to build, maintain or operate a railroad. It is beyond contest that no railroad activity has been conducted along the easement property since 1941. Harvestable timber has grown up on the right-of-way.
There were before the judge several affidavits together with the oral testimony of Louise Blackwell and Jean E. Crouch.
Over the years Motor Lines has been selling such right-of-way easement as it owned. The trial judge's findings relative thereto is not challenged. We quote:
A series of seventeen (17) deeds was presented which indicates the Plaintiff [Motor Lines] no longer owns a continuous right-of-way, if ever it did, between Saluda and Ward, South Carolina. These deeds are dated from October 26, 1976 through July 27, 1984. They convey strips of land being 100 feet in width with a total distance of 25,182.87 feet to various Grantees. All of the deeds recite a consideration and Saluda Motor Lines, Inc. is the common Grantor. The deeds carry a total
*45 consideration of Fourteen Thousand Six Hundred Sixty Eight and 73/100 ($14,668.73) Dollars. This distance conveyed totals 4.769 miles of former right-of-way that has been sold to various parties by the Plaintiff.
Summary judgment may only be properly granted if there is no genuine issue of fact to be determined upon a trial. The relief granted by way of summary judgment is similar to that granted by a directed verdict at the end of evidence presented at a trial on the merits. In each instance the moving party prevails as a matter of law. Summary judgment speaks in terms of "genuine issue of fact" while a directed verdict speaks in terms of "the only reasonable inference." It is not sufficient that a mere inference be created as relates to either motion. The issue as relates to a summary judgment must be genuine, and as relates to a directed verdict must be reasonable. It is not sufficient that evidence create a farfetched inference.
Either motion should be granted or denied based on the whole of the evidence, and in making the determination the judge should not select any one morsel of testimony and attach significance to it unless it be genuine or reasonable. Witt v. Poole, 182 S.C. 110, 188 S.E. 496 (1937).
To deny the motion under the facts of this case, the judge would have been required to attach unusual significance to the self-serving speculations of Louise Blackwell, one of the two owners of the corporate stock of Motor Lines. Her testimony approaches the frivolous in the light of the lapse of time, non-user, cessation of railroad operations and sale of land necessary to build a railroad. While she denied intent to abandon, she testified as follows:
Q. But you have no intention today, Saluda Motor Lines has no intention today of putting railroad tracks between Saluda and Ward?
A. I have a thought in my mind that, if this materializes, that a railroad line could go through this particular property for recreational purposes.
* * * * * *
THE COURT: Do you also know that the right of way does not grant a right to have a caboose or any other *46 permanent structure affixed to the land for the purpose of entertainment making it available to the public who might want to go there and have entertainment?
MRS. BLACKWELL: Would it restrict the type of railroad? Could it not be a railroad kind of like the Tootsie Railroad in the mountains? It didn't say specifically what kind, that it had to be a commercial railroad.
The conduct of the Motor Lines has been utterly inconsistent with intent to use the property involved for railroad purposes. Mrs. Blackwell, one of the stockholders of Motor Lines, may not, under the circumstances of this case, bootstrap herself into a genuine issue of material fact.
In so holding, we are not unmindful of the fact that upon a motion for summary judgment the court may not judge the credibility of the witnesses nor are we unmindful of the fact that lapse of time and nonuser alone is not sufficient to establish abandonment. These are, however, elements to be considered. Southern Silica Mining & Manufacturing Co. v. Hoefer, 215 S.C. 480, 56 S.E. (2d) 321 (1949); Billings v. McDaniel, 217 S.C. 261, 60 S.E. (2d) 592 (1950).
We are mindful of the rule as stated in 73 Am. Jur. (2d) Summary Judgment § 27:
To justify departure from the course of the trial of an issue of fact and the award of summary judgment, the court must be convinced that the issue is not genuine but feigned and that there is in truth nothing to be tried. The rule authorizing summary judgment would serve no useful purpose if frivolous proofs were held to create a triable issue. The question on a motion for summary judgment is whether there is anything of substance to be tried. Therefore, it is incumbent upon the court to search the proof as proffered by affidavits or otherwise, to ascertain whether it discloses a real issue, rather than a formal, perfunctory, or shadowy one. The fact that there is a factual dispute is not enough to preclude a summary judgment. The issue must be one which the defendant is entitled to litigate....
*47 In order to use the right-of-way here involved, Motor Lines would have to form a railroad corporation, procure the right to operate a railroad, and reacquire seventeen parcels of real estate already sold. In this day when it is common knowledge that railroads are being abandoned and not built, the contention of Motor Lines is farfetched, and we hold that the trial judge properly granted summary judgment.
Motor Lines excepts to the admission of testimony relative to payment of taxes. With or without this evidence, the result would be the same.
Affirmed.
GARDNER and GOOLSBY, JJ., concur.
|
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
July 11, 2001 Session
JOHN DAVID FLOYD v. CAROLYN FLOYD
A Direct Appeal from the Chancery Court for Rutherford County
No. 97DR-1002 The Honorable Royce Taylor, Judge
No. M2000-02344-COA-R3-CV - Filed August 31, 2001
When husband and wife divorced, they signed a marital dissolution agreement which was
incorporated into the Final Decree of Divorce providing, inter alia, that husband would have
visitation rights with wife’s daughter by a previous marriage and husband would in turn pay college
tuition and expenses for the child and would leave to the child by Will one-fourth of his estate. A
dispute arose as to the extent of visitation, and husband filed a petition to establish visitation rights.
Wife filed a petition to require husband to continue his obligations expressed in the marital
dissolution agreement. The trial court felt that there was no meeting of the minds between the
parties with regard to the visitation issue; therefore, there was no valid contract. Husband appeals.
We reverse and remand.
Tenn.R.App.P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed and
Remanded
W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,
J. and DAVID R. FARMER , J., joined.
Darrell L. Scarlett, Murfreesboro, For Appellant, John David Floyd
James L. Weatherly, Jr.; Joseph T. Howell, Nashville, For Appellee, Carolyn Floyd
OPINION
John David Floyd (“Husband”) and Carolyn Floyd (“Wife”) were married in 1994. At the
time of the marriage, Ms. Floyd had one minor daughter, Katie Armstrong, age 3, born of a previous
marriage. Ms. Floyd had sole custody of Katie. Mr. Floyd also had one minor daughter from a
previous marriage, Stephanie. On July 24, 1997, Mr. Floyd filed a petition for divorce, however the
parties’ separation was not final until June of 1999. On August 18, 1999, a Final Decree of Divorce
was entered incorporating a Marital Dissolution Agreement (“MDA”), which states in pertinent part:
8. Husband shall continue to visit, and be allowed to visit, wife’s
child Katie Armstrong and, further, Husband shall pay the said Katie
Armstrong’s college expenses for a period of four (4) years, said
expenses to be housing, food, books, tuition and Husband shall
provide the said Katie Armstrong with an automobile. In order to
secure future payment of the Six Thousand Dollars ($6,000.00) per
month referenced herein above, Husband shall obtain a life insurance
policy in the amount of One Million Dollars ($1,000,000.00) with
Wife being designated as beneficiary in the amount of Five Hundred
Thousand Dollars ($500,000.00) and Katie Armstrong being
designated as beneficiary for the remaining Five Hundred Thousand
($500,000.00). Said life insurance policy shall be maintained for a
period of one hundred and twenty (120) months from and after the
execution of this agreement and the granting of the divorce in this
cause.
* * *
12. Husband shall leave no less than twenty-five percent (25%) of his
estate, upon his death, to Katie Armstrong and the said Katie
Armstrong shall have a lien against the estate of Husband to the
extent of twenty-five percent (25%) of the same.
13. Husband shall provide health care insurance covering Katie
Armstrong until such time as the child graduates from college or until
she attains the age of twenty-three (23) years, whichever shall first
occur.
On May 3, 2000, Wife filed Petition to Enforce Final Decree of Divorce in which she averred
that a dispute had arisen between the parties concerning the scope of the right vested in Husband by
the provision of the Final Decree granting him the right “to visit” Katie Armstrong. Wife’s petition
contends that she offered to establish regular visits, Friday through Sunday one weekend per month,
and every Wednesday for dinner from 5:00 p.m. to 7:00 p.m., and has requested that Katie not be
removed from Rutherford County without her permission. Wife stated that she asked that Husband
refrain from the excessive consumption of alcohol when transporting Katie in an automobile. Wife
averred that Husband refused to agree to these proposals. Wife requested that the trial court order
visits between the Husband and Katie for the second weekend of each month from 6:00 p.m. on
Friday to 6:00 p.m. on Sunday, and each Wednesday from 5:00 p.m. until 7:00 p.m., and further that
the court order that Katie not be removed from Rutherford County without her permission. Wife
further requested that the trial court order Husband to refrain from the excessive consumption of
alcohol while in the presence of Katie or at any time that he is transporting Katie.
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Husband responded by filing Petition to Establish Specific Visitation. Husband’s petition
averred that Wife repeatedly interfered with his attempts to exercise visitation with Katie. Husband
requested that he be awarded specific visitation with Katie, that Wife be enjoined from making
derogatory comments about him to Katie, and that Wife be held in contempt of the trial court’s
previous order. Wife answered denying that Husband had any specific rights to visitation.
A hearing was held on July 19, 2000, and a subsequent order was entered on August 31, 2000
stating in part:
This cause came to be heard on the 19th day of July, 2000
upon the petition to enforce final decree of divorce, petition to
establish specific visitation, testimony of witnesses, statement of
counsel and the record as a whole from all of which the Court
determined there was no meeting of the minds with regard to the
visitation issues and the responsibilities set forth in the first sentence
of paragraph eight (8) and, as a result, no valid, binding contract was
achieved.
IT IS THEREFORE ORDERED:
1. The first sentence contained in paragraph number eight (8) of the
Marital Dissolution Agreement be, and hereby is, declared to be
unenforceable and be, and hereby is, deleted form the Marital
Dissolution Agreement. All other provisions of the Marital
Dissolution Agreement previously incorporated into the Final Decree
of Divorce be, and hereby are, ratified and approved.
Husband appeals the order raising two issues as stated in his brief:
1. Whether the evidence preponderates against the Trial Court’s
conclusion there was no meeting of the minds relative to the portions
of the Marital Dissolution Agreement dealing with visitation.
2. If there was no meeting of the minds relative to visitation, and if
husband is not awarded visitation with the minor child, whether
husband should be relieved of all obligations voluntarily assumed in
exchange for visitation privileges with wife’s child from a previous
marriage.
Since this case was tried by the trial court sitting without a jury, we review the case de novo
upon the record with a presumption of correctness of the findings of fact by the trial court. Unless
the evidence preponderates against the findings, we must affirm, absent error of law. T.R.A.P. 13(d).
-3-
In Husband’s first issue, he contends that the public policy of this state is to provide for the
welfare and betterment of children. He asserts that he contracted to provide substantial financial
support to Katie and that both he and Wife agreed that it would be in Katie’s best interest for him
to continue to have a relationship with her. Husband asserts that he is entitled to have the court
enforce the terms of the MDA with regard to visitation as they are subject to the continuing
jurisdiction of the court for the purposes of future modification. In addition, Husband contends that
both he and Wife understood that he would receive standard visitation of every other weekend, and
that he had visitation with Katie on that basis for 6 to 8 months following the execution of the
agreement.
“Tennessee law does not provide for any award of custody or visitation to a non-parent
except as may be otherwise provided by our legislature.” In re Thompson, 11 S.W. 3d 913, 919
(Tenn. Ct. App. 1999) (Emphasis in original) (citing T.C.A § 36-6-301 et seq.)1 A step-parent who
provides child support may be granted visitation rights by a court pursuant to T.C.A. § 36-6-303 (a),
and such an order of visitation remains under the control of the court. T.C.A § 36-6-303 (b).
Although it is apparent that Husband has provided and continues to provide for Katie, we are not
willing to apply this statute to support Husband’s right to visitation as he is not “contributing
towards the support of the child” in the manner contemplated by the Tennessee Child Support
Guidelines promulgated by the Department of Human Services (“child support guidelines”).
Therefore, absent a binding contract, Husband has no right protected by law to visit Katie.
In preparation for a divorce, a husband and wife often enter into a property settlement
agreement that is later incorporated into a final decree. Such agreements may contain terms as to
parties’ legal duties, as well as defining obligations outside the scope of the parties’ legal duties.
Where parties to a divorce contract with regard to terms that do not include a legal duty, the
agreement maintains its contractual nature after incorporation into a court order and may be enforced
as any other contract. Penland v. Penland, 521 S.W.2d 222, 224 (Tenn. 1975). Where parties
contract with respect to the legal duty of child support or alimony in futuro, upon approval by the
court, the agreement becomes merged into the divorce decree, losing its contractual nature. “[O]nly
that portion of a property settlement agreement between husband and wife dealing with the legal
duty of child support, or alimony over which the court has continuing statutory power to modify,
loses its contractual nature when merged into a decree for divorce.” Id. at 224.
In the instant case, parties have contracted regarding terms that do not include a legal duty,
but does, however, involve visitation of a minor child, which must stay under the authority of the
court to be changed or modified as circumstances indicate. Therefore, a sort of hybrid agreement
1
Tennessee cases have found that chancery courts have inherent jurisdiction, extending beyond their statutory
jurisdiction, to act in relation to prope rty and o ther interests o f minor s. In re, Thompson, 11 S.W.3d at 919 (citations
omitted). However, that jurisdiction has not been extended to empower courts to grant visitation to a th ird party. Id.
.
-4-
has been created: one that involves no legal duty, but one that should remain under the jurisdiction
of the court.
In interpreting the terms of a marital dissolution agreement incorporated into a final decree
of divorce this Court stated:
A divorce decree which incorporates a marital dissolution
agreement is to be construed like other written instruments, with the
court seeking to determine the apparent purposes in the minds of the
draftsmen and the trial court. See Livingston v. Livingston, 58
Tenn.App. 271, 429 S.W.2d 452 (Tenn.App.1967). The general rules
of evidence regarding the admission of parol evidence and the
construction of written instruments also apply to such decrees. Id.
As with other instruments, parol evidence is inadmissible to vary,
alter, or contradict such a decree where the decree is complete,
unambiguous, and valid, or where there is no fraud, accident or
mistake, or claim or allegation thereof with respect to the agreement
incorporated in the instrument. See Livingston, supra, at 457 and
C.J.S., Evidence § 51, pp. 214-215 (1981). As with the
interpretation and construction of contracts, however, the court
may admit evidence which will enable the court to place itself in the
situation of the parties at the time they entered into the marital
dissolution agreement which the decree incorporates. See
Nashville Life Ins. Co. v. Matthews, 76 Tenn. 499 (1881).
Barzizza v. Barzizza, No. 02A01-9110CV00246, 1992 WL 139862, *4 (Tenn. Ct. App. June
23,1992). (Emphasis added). Evidence of intent is found in the language used by the parties
considered in the light of their interest and other relevant circumstances at the time the contract was
executed, and in the practical construction given to the language by the parties “as disclosed by their
actions subsequent to its execution.” City of Columbia v. C.F.W. Const. Co., 557 S.W.2d 734, 739
(Tenn. 1977). According to the rule of practical construction, an interpretation given the contract
by the parties, as shown by their actions and declarations, will be adopted by the court. Hamblen
County v. City of Morristown, 656 S.W.2d 331, 335 (Tenn. 1983). Additionally, in interpreting the
terms of a contract under Tennessee law, a condition of reasonableness is implied, even where the
term “reasonable” is not used in the contract. Moore v. Moore, 603 S.W.2d 736, 739 (Tenn. Ct.
App. 1980). In Cagle v. Cagle, No. 02A01-9710-CH-00265, 1998 WL 802019 *3 (Tenn. Ct. App.
Nov. 18, 1998) the court held that a father’s agreement to pay his son’s college expenses was
subject to the implied condition of reasonableness. Because a contract contains terms of difficult
construction about which parties disagree, that does not allow parties to contend that they did not
have a meeting of the minds. Hawkins v. Hart, No. 01A01-9707-CV-00294, 1998 WL 272926
*4 (Tenn. Ct. App. May 29, 1998) (citing 17 Am.Jur.2d Contracts § 22, at 359). By signing the
agreement the parties bind themselves to the interpretation that a court may place on the language
of their agreement. Id.
-5-
The cardinal rule for interpretation of contracts is to ascertain the intention of the parties and
to give effect to that intention consistent with legal principles. Rainey v. Stansell, 836 S.W.2d 117
(Tenn. Ct. App. 1992). Courts are to interpret and enforce the contract as written, giving terms
their plain and usual meaning. Petty v. Sloan, 197 Tenn. 630, 277 S.W.2d 355, 358 (1955); Home
Beneficial Ass'n v. White, 180 Tenn. 585, 177 S.W.2d 545, 546 (1944). In construing a contract,
courts must look at the language of the agreement and to the parties’ intent and impose a
construction that is fair and reasonable. ACG, Inc. v. Southeast Elevator, Inc., 912 S.W.2d 163
(Tenn. Ct. App. 1995). Absent fraud or mistake, contracts will be enforced according to their terms,
even though they contain arguably unjust or harsh terms. Whaley v. Underwood, 922 S.W.2d 110
(Tenn. Ct. App. 1995).
In other jurisdictions, agreements by step-parents to support a child which are supported by
consideration have been held to be enforceable. The Court of Appeals of Maryland held that a
stepparent may create a contractual right to support a child, Brown v. Brown, 412 A.2d 396 (Md.
1980), but that the step-father could not be imprisoned for falling behind in his child support
payment as the agreement maintained its contractual nature. In Dewey v. Dewey, 886 P.2d 623
(Alaska 1994) the Supreme Court of Alaska enforced an agreement by a step-father to support his
stepchild finding that the step-father’s contractual obligation was supported by consideration
including his right to claim the stepchild as a dependant and to receive visitation rights. Our own
Eastern Section of the Court of Appeals upheld the denial of a petition for rehearing by a mother in
a case involving an agreement incorporated into a final decree of divorce which provided for
reasonable step-parent visitation where parties both acknowledged under oath that this was their
agreement. Mayfield v. Mayfield, No. 03A01-9803-CV-00112, 1998 WL 512973 (Tenn. Ct. App.
Aug. 19, 1998).
With that in mind, we proceed to Husband’s first issue, whether the trial court erred in
finding that there was no meeting of the minds with regard to the agreement that Husband would
be permitted “to visit” the child. Generally, in the absence of a specific visitation schedule in a
marital dissolution agreement and/or a final decree of divorce, the implied “reasonable” standard
should apply. The child support guidelines set out what is intended to be reasonable visitation. The
intention of the parties is paramount in considering the meaning of a contract. Additionally,
according to the rule of practical construction, we may look to the conduct and declarations of parties
to the agreement and their own interpretation of the same. Hamblen County v. City of Morristown,
656 S.W.2d 331, 335 (Tenn. 1983). The record indicates conduct by the parties which supports
interpretation of the term “to visit” as meaning the standard visitation as defined by the guidelines.
Husband claims that for six to eight months following the execution of the agreement, he had
visitation with Katie every other weekend. Wife does not deny this, and indicates that Katie was
with Husband at the times that he had standard visitation with his own daughter.
In addition, we must consider this contract as a whole in determining its meaning. Cookeville
Gynecology & Obstetrics, P.C. v. Southeastern Data Systems, Inc., 884 S.W.2d 458 (Tenn. Ct.
App. 1994). Considering the agreement of the parties as a whole with an implied term of
reasonableness, it is clear that the parties intended that the consideration for Wife’s allowing
Husband “to visit” Katie be that he provide Katie with college tuition plus books and living
-6-
expenses, a car, health insurance for her, that Katie is listed as a beneficiary on a policy of insurance
on Husband’s life, and that Katie inherit not less than one quarter of Husband’s estate.
Courts are charged with the duty of enforcing contracts as written. Winfree v. Educators
Credit Union, 900 S.W.2d 285 (Tenn. Ct. App. 1995). Therefore, we find that the parties have
contracted for Husband to visit Katie, and that the intended meaning of the term “to visit” should be
interpreted according to the child support guidelines’ description of standard visitation. See Tenn.
Comp. R. & Regs. 1240-2-4-.02(6) (1994) (describing standard visitation as every other weekend,
Friday through Sunday, two weeks in the summer, and two weeks during the holidays). Important
to our holding is the indication by both parties that they share a desire that Husband continue his
relationship with Katie, a mutual expression that the relationship between Husband and Katie is in
Katie’s best interest, and our conclusion that Husband’s continued contributions to Katie’s support
are in Katie’s best interest. We believe that this holding is consistent with our public policy that in
matters concerning child custody, support and visitation, the welfare of the child has always been
the paramount consideration. Luke v. Luke, 651 S.W.2d 219, 221 (Tenn. 1983). Having so held,
Husband’s second issue is moot.
Accordingly, we reverse the ruling of the trial court and remand the case. On remand the trial
court is to hold a hearing on the issue of visitation to consider evidence including Wife’s allegations
of excessive consumption of alcohol in the presence of Katie and Husband’s disregard of Wife’s
efforts to discipline Katie, as well as Husband’s contentions of Wife’s efforts to interfere with his
visitation. In absence of a finding that standard visitation would not be in Katie’s best interest,
visitation should be set as contracted by the parties and interpreted by this Court to indicate standard
visitation as set forth in the child support guidelines. Further, the trial court may in its discretion
limit the visitation if it deems such limitation to be in the best interest of the child. The order of
visitation shall stay within the jurisdiction of the trial court for future modification. Costs of the
appeal are taxed against the Appellee, Carolyn Floyd.
__________________________________________
W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.
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|
757 F.2d 1291
118 L.R.R.M. (BNA) 2575
Oscar Mayer Foods Corp.v.Beef Boners & Sausage Makers Union, Local 100
84-2966
United States Court of Appeals,Seventh Circuit.
2/7/85
1
N.D.Ill.
AFFIRMED
|
222 S.E.2d 392 (1976)
289 N.C. 343
Claude S. KIDD, Jr., et al.
v.
C. F. EARLY and wife, Bessie D. Early.
No. 69.
Supreme Court of North Carolina.
March 2, 1976.
*399 Clark, Tanner & Williams by David M. Clark and Eugene S. Tanner, Jr., Greensboro, for plaintiffs-appellants and plaintiffs-appellees.
Griffin, Post & Deaton by Hugh P. Griffin, Jr., and William F. Horsley, Reidsville, Sapp & Sapp by Armistead W. Sapp, Jr., and W. Samuel Shaffer II, Greensboro, for defendants-appellants.
SHARP, Chief Justice:
Defendants have consistently contended that they are entitled to summary judgment for the following reasons: (1) The description of the property contained in the option is insufficient to meet the requirements of the Statute of Frauds; (2) the purported option was void because the parties failed to agree on an essential element of the contract, that is, the method of payment, and specific performance is unavailable to enforce a contract unless there has been an actual "meeting of the minds" with regard to each element of the contract; and (3) the option could be exercised only by actual tender of cash which plaintiffs failed to do within the option period. If anyone of the foregoing contentions is valid, defendant will be entitled to summary judgment.
Upon motion a summary judgment must be entered "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 any party is entitled to a judgment as a matter of law." G.S. 1A-1, Rule 56(c). The party moving for summary judgment has the burden of establishing the lack of any triable issue of fact. His papers are carefully scrutinized and all inferences are resolved against him. Caldwell v. Deese, 288 N.C. 375, 218 S.E.2d 379 (1975); Railway Co. v. Werner Industries, 286 N.C. 89, 209 S.E.2d 734 (1974); Page v. Sloan, 281 N.C. 697, 190 S.E.2d 189 (1972). The court should never resolve an issue of fact. "However, summary judgments should be looked upon with favor where no genuine issue of material fact is presented." Kessing v. Mortgage Corp., 278 N.C. 523, 534, 180 S.E.2d 823, 830 (1971). With these principles in mind we consider the questions presented by defendants' appeal.
(1) Does the description contained in the option-contract which plaintiffs seek to enforce meet the requirements of the Statute of Frauds?
An option is not a contract to sell, but it is transformed into one upon acceptance by the optionee in accordance with its terms. Lawing v. Jaynes and Lawing v. McLean, 285 N.C. 418, 206 S.E.2d 162 (1974). It then becomes specifically enforceable as a contract to convey if it is otherwise a proper subject for equitable relief. Byrd v. Freeman, 252 N.C. 724, 114 S.E.2d 715 (1960); 81 C.J.S. Specific Performance § 47 (1953); 91 C.J.S. Vendor and Purchaser § 13 (1955).
To be specifically enforceable an option-contract must meet the requirements of the Statute of Frauds (G.S. 22-2), which *400 provides, in pertinent part, that all contracts to convey land "shall be void unless said contract, or some memorandum or note thereof, be put in writing and signed by the party to be charged therewith, or by some other person by him thereto lawfully authorized." A valid contract to convey land, therefore, must contain expressly or by necessary implication all the essential features of an agreement to sell, one of which is a description of the land, certain in itself or capable of being rendered certain by reference to an extrinsic source designated therein. See Lane v. Coe, 262 N.C. 8, 136 S.E.2d 269 (1964); Hollman v. Davis, 238 N.C. 386, 78 S.E.2d 143 (1953); Searcy v. Logan, 226 N.C. 562, 39 S.E.2d 593 (1946); Stewart v. Cary, 220 N.C. 214, 17 S.E.2d 29 (1941); Hodges v. Stewart, 218 N.C. 290, 10 S.E.2d 723 (1940); Smith v. Joyce, 214 N.C. 602, 200 S.E. 431 (1939); 4 Strong's N.C. Index 2d Frauds, Statute of § 2 (1968); J. Webster, Real Estate Law in North Carolina §§ 119, 121, 122; T. Christopher, Options to Purchase Real Property in North Carolina, 44 N.C.L.Rev. 63, 67 (1966).
When a description leaves the land "in a state of absolute uncertainty, and refer to nothing extrinsic by which it might possibly be identified with certainty," it is patently ambiguous and parol evidence is not admissible to aid the description. The deed or contract is void. Lane v. Coe, supra, 262 N.C. at 13, 136 S.E.2d at 273. Whether a description is patently ambiguous is a question of law. Carlton v. Anderson, 276 N.C. 564, 173 S.E.2d 783 (1970). "A description is . . . latently ambiguous if it is insufficient in itself to identify the property but refers to something extrinsic by which identification might possibly be made." Lane v. Coe, supra, 262 N.C. at 13, 136 S.E.2d at 273.
The description which we now construe reads: "a certain tract or parcel of land located in Monroe Township, Guilford County, North Carolina, and described as follows: 200 acres more or less of the C. F. Early farm. To be determined by a new survey furnished by sellers." The C. F. Early farm, according to Early, contains 250-260 acres. (The acreage specified in the deeds by which Early acquired the property is 252.94 acres.) Had the option merely described the land to be conveyed as "200 acres more or less of the C. F. Early Farm" there is no doubt that the description would have been patently ambiguous. A contract to convey a part of a tract of land, to be valid, must definitely identify the portion to be conveyed or designate the means or source by which it can be positively identified. See State v. Brooks, 279 N.C. 45, 52, 181 S.E.2d 553, 557 (1971); Hodges v. Stewart, supra; Beard v. Taylor, 157 N.C. 440, 73 S.E. 213 (1911); Cathey v. Lumber Co., 151 N.C. 592, 66 S.E. 580 (1909); Smith v. Proctor, 139 N.C. 314, 51 S.E. 889 (1905).
A contract to convey, excepting a part of the land described, is valid provided the land excepted can be identified. See 26 C.J.S. Deeds §§ 30e, 139c (1956). Such a contract was made and enforced in Byrd v. Freeman, 252 N.C. 724, 114 S.E.2d 715 (1960). In that case Freeman gave Byrd an option to purchase described lands (68 acres, more or less) except the Freeman dwelling and "`ten acres, more or less, on which same is located,' to be `run off by a surveyor and properly identified by courses and distances.'" On the same day the option was signed Byrd and Freeman went upon the land and identified the physical boundaries of the tract to be retained by Freeman. Thereafter each party employed a surveyor and directed him to "run off" the lines which he pointed out to him. Freeman's surveyor produced a map showing a tract containing 11.5 acres; Byrd's surveyor, a map showing 9.2 acres. Byrd, however, agreed to accept Freeman's survey and thereafter exercised his option in time and in accordance with its terms. Notwithstanding, Freeman refused to convey the property and Byrd sued for specific performance. Defendants defended on the sole ground that Byrd had not complied with the terms of the option. The jury answered that issue in favor of Byrd. Defendants *401 made no contention that the description in the option was patently ambiguous and the court enforced the contract without question. See also Redd v. Taylor, 270 N.C. 14, 153 S.E.2d 761 (1967).
Defendants' first contention presents the narrow question whether a contract to convey 200 acres of a larger described tract (the C. F. Early farm) is saved from patent ambiguity by the provision that the acreage is "to be determined by a new survey furnished by the sellers."
As stated in 72 Am.Jur.2d Statute of Frauds § 329 (1974), "There is a definite conflict in the results of cases determining the sufficiency under the Statute of Frauds of a description in a land contract which gives one of the parties the right to select the particular tract to be conveyed." The cases pro and con are collected in the footnotes to Section 329 and in Annot., 46 A.L. R.2d 894 (1956) and in the volumes of A.L. R.2d, Later Case Service. See also 49 Am. Jur. Statute of Frauds § 350 (1943).
In Calder v. Third Judicial Court, 2 Utah 2d 309, 273 P.2d 168 (1954), the Supreme Court of Utah considered a contract to convey 200 acres of land situated in Davis County, Utah. A part of this land was definitely described, but the larger portion was to be selected in one tract by the buyer (Merrill) within sixty days from a larger tract described in the contract and belonging to the sellers (Calder). In holding the contract valid and specifically enforceable the court noted that the tract from which the selection was to be made by Merrill was sufficiently described in the contract; that the contract specifically provided that Merrill was to select the land within a given time; and this provision, being for the benefit of the sellers, could be waived by them; and that nothing more had to be agreed upon between the parties. The court then adopted the rationale stated by the Supreme Court of Kansas in Peckham v. Lane, 81 Kan. 489, 106 P. 464, 466, 25 L.R.A., N.S., 967 (1910):
"* * * No reason is apparent why a person may not make a valid contract that he will sell to another one of several pieces of real estate of which he is the owner, to be selected by himself. When an agreement to that effect is written out and signed, it is a complete contract, all of the terms of which are expressed in writing. The owner agrees that he will first make the selection and then make the conveyance. If he refuses to do either, a court may compel him to do both. * * * But he cannot avoid the obligation to which he has committed himself in writing, merely by refusing to act at all. This seems so obvious that the citation of authorities is hardly necessary. The principle, however, is illustrated with more or less fullness in the following cases: Ellis v. Burden, 1 Ala. 458, 466; Carpenter v. Lockhart, 1 Ind. 434; Washburn et al. v. Fletcher, 42 Wis. 152; Fleishman v. Woods, 135 Cal. 256, 67 P. 276."
In Delaney v. Shellabarger, 76 Nev. 341, 353 P.2d 903 (1960), the Supreme Court of Nevada held valid and enforceable a seller's contract to convey to purchaser any 520-acre tract which purchaser might choose out of a total of 3,518.91 acres which vendor owned. Relying upon Peckham v. Lane, supra, Calder v. Third Judicial District Court, supra, and other cited cases, the court said: "The authorities are to the effect that a contract for the sale and purchase of a part of a larger parcel of land, which gives the purchaser the right to select the particular part, does not for this reason alone render the contract unenforcible." Id. at 344, 353 P.2d at 904.
In Peckham v. Lane and the other cases cited above in which the courts relied on Peckham, the parties had not defined even generally the boundaries of the land to be conveyed. Here, however, the vendor had pointed out to the purchaser the outlines of the tract he would retain. Thus the reasoning in Peckham v. Lane, supra, is even more persuasive here. The large tract, "the C. F. Early farm," out of which defendants agreed to convey the 200 acres, *402 more or less, was sufficiently described. Light Co. v. Waters, 260 N.C. 667, 133 S.E.2d 450 (1963); Dill v. Lumber Co., 183 N.C. 660, 112 S.E. 740 (1922); Pate v. Lumber Co., 165 N.C. 184, 187, 81 S.E. 132, 133 (1914). Further, the option-contract description also provided the method by which an exact description of the land to be conveyed was to be obtaineda survey furnished by the sellers. The inclusion of this provision in the option in suit distinguishes it from the descriptions found wanting in Manufacturing Company v. Hendricks, 106 N.C. 485, 11 S.E. 568 (1890); Carlton v. Anderson, supra, and State v. Brooks, supra, cases upon which defendants rely to support their contention that the description in question is insufficient to meet the requirements of the Statute of Frauds.
On 29 September 1972, the date plaintiffs notified defendants they were exercising the option of 1 September 1972, defendants had employed a surveyor and directed him to make the survey. Both parties had copies of the surveyor's map on 4 October 1972 and knew not only the boundaries of that portion of the C. F. Early farm which defendants were to retain but that the tract contained 40.52 acres. It is entirely inappropriate that defendants should now contend that the option is void because the description in the option was patently ambiguous.
It is not a ground for objection that the survey was prepared subsequently to the execution of the option. At that time the parties, of course, knew that no survey had been made. They recognized the necessity for one and obviously contemplated that it would be made sometime in the future. See 72 Am.Jur.2d Statute of Frauds § 378 (1974).
Once the lands to be retained by the sellers had been surveyed and the description of the property obtained, a conveyance of the C. F. Early farm, excepting the 40-52 acres by metes and bounds as shown by the survey, would operate as a conveyance of the remainder. 26 C.J.S. Deeds § 30e (1956). Here we note the statement in 26 C.J.S. Deeds § 140(7)c: "Excepted property is described with sufficient certainty if the exact location thereof is left to the election of the grantor or is capable of subsequent ascertainment otherwise."
We hold that the description in the option-contract in suit was sufficient to satisfy the Statute of Frauds and that the latent ambiguity it contained has now been removed.
(2) Is the option agreement void because the parties failed to agree upon two essential elements of any valid option, the method and time of payment? Defendants contend that it is. Plaintiffs contend that the agreement was complete when signed and that, where no terms of payment are stated, the law will imply a payment in cash. With respect to payment the option provided:
"We agree within the time specified [30 days from 9-1-72], to execute and deliver to Howard M. Coble & Claude S. Kidd or assignee, upon demand by him, a good and sufficient deed for the above described premises upon payment by him to us of the sum of Six Hundred per acre dollars ($600.00) under the following terms and conditions:" Between the preceding colon and the next sentence in the printed form, on which the option was written by filling in the blanks, is an inch of space which is entirely blank. The sentence immediately following the blank specifies that if the option is exercised the consideration paid for it shall be credited on the purchase price and "the purchasers may have reasonable additional time for title examination."
It is undoubtedly true that if an offer to sell "necessitates or contemplates a further agreement of the parties in essential matters, the option is invalid." Atkinson v. Atkinson, 225 N.C. 120, 130, 33 S.E.2d 666, 674 (1945). "The courts generally hold a contract, or offer to contract, leaving material portions open for future agreement is nugatory and void for indefiniteness." *403 Boyce v. McMahan, 285 N.C. 730, 734, 208 S.E.2d 692, 695 (1974). This does not mean, however, that the courts will not supply an essential term by implication under appropriate circumstances. For example, in Burkhead v. Farlow, 266 N.C. 595, 598, 146 S.E.2d 802, 805 (1966), we held that "[i]n any contract to convey land, unless the parties agree differently, the law implies an undertaking on the part of the vendor to convey a good or marketable title to the purchaser."
The following statements from 91 C.J.S. Vendor & Purchaser §§ 6 and 10 (1955) speak directly to the question we now consider: "The price to be paid for the property is an essential term [of an option agreement] and must be agreed on; but the option contract need not contain any expressions as to the manner and form of payment." Id. § 6. "Where an option does not specifically fix the time for payment of the purchaser price, the law construes the offer to be for cash on delivery and before title passes." Id. § 10.
There is an important distinction between cases in which the parties have purported to agree on a contractual provision and have done so in a vague and indefinite manner and cases in which they have remained silent as to a material term. In the latter case, the reasonable conclusion is that they understood the law would imply the omitted term. Since a sale on credit is never implied, absent a provision respecting the time of payment, a contract for the sale of realty will be construed as requiring payment in cash simultaneously with the tender or delivery of the deed. See J. Calamari & J. Perillo, Contracts, § 23 (1970); L. Simpson Contracts § 46 (2d Ed.1965); 91 C.J.S. Vendor and Purchaser § 99c. The foregoing rule was succinctly stated by the Supreme Court of Colorado in Eppich v. Clifford, 6 Colo. 493, 498 (1883):
"If the memorandum [with reference to a sale of realty] showed that the sale was upon a credit, but failed to state the terms of such credit, or if in the statement thereof it was indefinite or uncertain, specific performance would be refused; but the memorandum being entirely silent, a sale for cash will be presumed, in such actions, to have been intended." See Vezaldenos v. Keller, 254 Cal.App.2d 816, 62 Cal.Rptr. 808 (1967); Pearlstein v. Novitch, 239 Mass. 228, 131 N.E. 853 (1921); Duke v. Miller, 355 Mich. 540, 94 N.W.2d 819 (1959); Douglas v. Vorpahl, 167 Wis. 244, 166 N.W. 833 (1918).
That the foregoing rule has long been the law of this State we have no doubt. It is the view expressed by T. Christopher, Options to Purchase Real Property in North Carolina, 44 N.C.L.Rev. 63, 72: "The terms of payment need not be set out in great detail, but they should be clear. Where no terms are stated, it would seem that the contract should be interpreted to mean payment in cash since this would be in accord with common practice."
The fact that an unfilled blank on the printed form followed plaintiffs' agreement to deliver to Coble and Kidd or assignee, upon demand, a good and sufficient deed to the premises upon payment to defendants "the sum of Six Hundred per acre dollars ($600.00) under the following terms and conditions:" does not render the terms of the contract indefinite or indicate that the time and manner of payment were left open for further negotiation. (Only the words in italics are not a part of the printed form.) Bank v. Corbett, 271 N.C. 444, 156 S.E.2d 835 (1967).
In Bank v. Corbett, the defendant, wife of C, as an inducement to the plaintiff bank to extend credit to her husband, signed a "Guaranty" which contained the following provision: "The amount of principal at any one time outstanding for which the undersigned shall be liable as herein set forth shall not exceed the sum of $___." In disposing of the defendant's contention that the failure to insert in the guaranty a limitation of the guarantor's liability rendered the instrument void Justice Higgins, speaking for the Court, said: "The blank space and the antecedent wording provided the *404 guarantor opportunity to limit her liability for her husband's debts. She executed the agreement without inserting any limitation. She cannot, thereafter, ex parte, alter the terms of the agreement. . . . Its terms are clear, free of ambiguity. Consequently, there is nothing for the Court to construe. The meaning becomes a question of law." Id. at 447, 156 S.E.2d at 837. By the same token defendants in this case had the opportunity to require that the purchase price be paid in installments and to specify the time and manner of payment had they desired to do so. They executed the option without inserting any "terms and conditions." Thus, its terms are clear, free of ambiguity and its meaning becomes a question of law.
We hold that when an option to purchase real estate neither specifies the method of payment nor provides that terms are to be fixed by a later agreement, the law implies that the purchase price will be paid in cash. Thus, the option-contract in this case was not void because of a failure by the parties to agree upon the terms of payment. There being no stipulation as to the terms of payment in the option and no provision that they were open for future agreement by legal implication the purchase price was to be paid in cash.
Our conclusion that at the time of its execution the option met the requirements of the Statute of Frauds and bound defendants to convey the land if exercised in accordance with its terms, disposes of defendants' argument that subsequent negotiations between the partiesparticularly Dr. Kidd's letter of September 28th in which he offered to pay $33,250 cash and $95,750 in five annual installmentsamounted to a counter offer and a rejection of defendants' offer as contained in the option.
"`An option . . . is a contract by which the owner of property agrees with another that he shall have the right to purchase the same at a fixed price within a certain time. It is in legal effect an offer to sell, coupled with an agreement to hold the offer open for acceptance for the time specified, such agreement being supported by a valuable consideration, or, at common law, being under seal, so that it constitutes a binding and irrevocable contract to sell if the other party shall elect to purchase within the time specified.'" Ward v. Albertson, 165 N.C. 218, 221-22, 81 S.E. 168, 169 (1914). See Sandlin v. Weaver, 240 N.C. 703, 83 S.E.2d 806 (1954); T. Christopher, Options to Purchase Real Property in North Carolina, supra at 63.
Since an option is a binding contract, it is not revocable by the optionor within the stated option period, and subsequent negotiations which do not result in an agreement to vary the terms of the option, will not constitute a rejection of it. The optionee is not bound to accept the offer contained in the option, but his right of acceptance continues during the option period. See Trust Co. v. Frazelle, 226 N.C. 724, 40 S.E.2d 367 (1946); 7 Strong's N.C. Index 2d Vendor and Purchaser § 2 (1968); 91 C.J.S. Vendor and Purchaser § 4 (1955). To hold that an optionee invalidated his option by making a counter proposal would seriously undermine the value of option agreements.
In his work on contracts, with reference to an optionee's counter offer, Professor Corbin writes: "If the original offer is an irrevocable offer, creating in the offeree a `binding option,' the rule that a counter offer terminates the power of acceptance does not apply. Even if it is reasonable to hold that it terminates a revocable power, it should not be held to terminate rights and powers created by a contract. A `binding option' is such a contract (usually unilateral). . .. A counter offer by such an offeree, or other negotiation not resulting in a contract, does not terminate the power of acceptance." 1 A. Corbin Contracts § 91 (1963).
We hold that the subsequent negotiations between the parties including plaintiffs' September 28th "offer to purchase," did not amount to a rejection of the option offer.
*405 (3) Defendants' third contention is that, if the option be held valid, plaintiffs did not effectively exercise it and are therefore not entitled to specific performance. Defendants' argument is that if, by legal implication, the purchase price is to be paid in cash, plaintiffs could have exercised the option only by an actual tender of cash within 30 days from 1 September 1972, and this they did not do. If the option could only be exercised by an actual tender of cash it expired unexercised, for it is quite clear that plaintiffs have never tendered defendants the purchase price in cash.
Whether tender of the purchase price is necessary to exercise an option depends upon the agreement of the parties as expressed in the particular instrument. The acceptance must be in accordance with the terms of the contract. Where the option requires the payment of the purchase money or a part thereof to accompany the optionee's election to exercise the option, tender of the payment specified is a condition precedent to a formation of a contract to sell unless it is waived by the optionor. On the other hand, the option may merely require that notice be given of the exercise thereof during the term of the option. See Parks v. Jacobs, 259 N.C. 129, 129 S.E.2d 884 (1963) (per curiam); Kottler v. Martin, 241 N.C. 369, 85 S.E.2d 314 (1955); T. Christopher, Options to Purchase Real Property in North Carolina, supra at 82-84.
Optionors in this case agreed to convey to optionees, upon demand within 30 days from the date of the option, a deed to the described premises upon payment of $600 per acre (acreage to be determined by survey furnished by sellers), and optionees to be credited with the consideration paid for the option and to "have reasonable additional time for title examination."
Construing this option we hold that it required the optionees to exercise their rights under it within 30 days, but did not make payment of the purchase price a prerequisite to its exercise. In the first place, until defendants provided plaintiffs with the survey which they had agreed to furnish, plaintiffs could not know the acreage involved and therefore could not determine the full amount of the purchase price. See Wachovia Bank & Trust Co. v. United States, 98 F.2d 609, 611 (4th Cir. 1938). Secondly, we note this significant provision of the option: "In the event of the exercise of this option . . . the said purchasers may have a reasonable additional time for title examination." (Emphasis added.) Additional time for title examination before they are required to do what? The only sensible answer: Before they are required to tender the cash. The clear import of this language is that if plaintiffs exercised the option within the option period of 30 days, they would have a reasonable additional time for title examination before they would be required to pay for the land and that the purchase price would be paid in cash simultaneously with the delivery of the deed. See McAden v. Craig, 222 N.C. 497, 500, 24 S.E.2d 1, 3 (1943); Phelps v. Davenport, 151 N.C. 21, 65 S.E. 459 (1909). Any other construction would render the provision meaningless.
Defendants' contention that the conclusion we have reached is precluded by Trust Co. v. Medford, 258 N.C. 146, 128 S.E.2d 141 (1962) cannot be sustained. In Medford the option required the optionee to demand a deed within thirty days and to pay the purchase price in full at the end of thirty days. In the event of the exercise of the option, optionee was to have "reasonable additional time for title examination." Within the thirty days counsel for the optionee discovered a flaw in the title and "turned it down." Optionee employed another attorney who requested an extension of the option pending his further efforts to clear the title. The optionor declined to give the extension. By its terms the option expired on July 10th. It was not until September 2nd, fifty-three days after the option had expired, that the optionee gave notice of his election to exercise the option. In the meantime a building on the property had burned and the owner became entitled *406 to $45,000 insurance. The real controversy in the case was who would "pick up" the $45,000. In sustaining the trial court's judgment of compulsory nonsuit from which the plaintiffs had appealed, this Court held that the optionee, "within 30 days from the date of the option, was required to bind himself to go through with and complete the transaction provided the defendant could convey a good title. His binding obligation (conditioned upon a good title) was required within the 30 days life of the option in order to effect any extension of time for title examination." Id. at 149, 128 S.E.2d at 143-44. In Medford, the optionee failed to bind himself within thirty days; in this case the optionee exercised the option and became bound.
Since we conclude that plaintiffs exercised the option by written notification dated September 29, 1972, any question concerning actual tender is rendered academic by defendants' deposition. As set out in the preliminary statement of facts, in his deposition defendant testified that he had decided to sell the property in the way he would have to pay the government the least money, and he told Dr. Kidd during the last week of the option term that he had to wait until he had seen a CPA to know how to collect the purchase price. After doing so he instructed his broker to tell Dr. Kidd he would accept "not over 30% in cash, with five years to pay the rest at 7½%, with a first deed of trust." These terms, of course, bore no resemblance to the requirements of the option. In their brief, first filed in the Court of Appeals, defendants concede that they "would not accept all cash" and plaintiffs knew they would not do so.
What we said in Smithfield Oil Co. v. Furlonge, 257 N.C. 388, 393-94, 126 S.E.2d 167, 171 (1962) is applicable here. "Notice from defendants that they would not carry out the terms of the option made unnecessary a tender of payment by the plaintiff. Millikan v. Simmons, 244 N.C. 195, 93 S.E.2d 59; Penny v. Nowell, 231 N.C. 154, 56 S.E.2d 428. As the Court said with reference to a similar situation in the latter case, `such a tender would avail nothing according to the testimony of the record. The law does not require the doing of a vain thing. The disavowal was a waiver of the requirement.'" See also Trust Co. v. Frazelle, supra; Johnson v. Noles, 224 N.C. 542, 31 S.E.2d 637 (1944); T. Christopher, Options to Purchase Real Property in North Carolina, supra at 82-83.
The record leaves no doubt that the parties intended a valid option contract. Plaintiffs paid, and defendants accepted, $500 for the original option of 4 August 1972 and another $500 for the renewal option of 1 September 1972. When Dr. Kidd told Early a day or two before he notified him on 29 September 1972 that plaintiffs were exercising the option, Early's comment was, "Good." However, he also said, "As far as your money is concerned I want to wait until I can see a CPA to know how to collect this." It is also implicit in the record that this controversy grew out of defendants' belated consideration of the tax consequences of their sale of the property. Apparently it was only after they had signed the option that they became aware of the tax advantages of certain installment payments.
Finally, we consider whether plaintiffs are entitled to summary judgment. We note that the following facts are not in issue: (1) On 1 September 1972 defendants executed and delivered to Dr. Kidd the option in suit; (2) thereafter the parties made no agreement modifying the terms of the option although they negotiated with reference to the terms of payment; (3) plaintiffs sent and defendants received the letter of September 29th in which they stated that the option "is hereby exercised . . ..;" (4) defendants refused to convey for cash, both before and after receiving the letter, and have continued to refuse; and (5) defendants caused the survey called for in the option to be made and delivered to plaintiffs.
*407 On these uncontested facts we have held: (1) The option met the requirements of the Statute of Frauds and constituted an irrevocable offer of sale during the thirty days specified; (2) Dr. Kidd's letter of September 29th to defendants constituted an acceptance of the option and converted it into a contract to convey; and (3) the option required payment in cash upon tender of the deed.
Defendants allege no grounds for the cancellation or recision of the option; nor do they contest plaintiffs' right to specific performance on the ground that to decree it would be inequitable. The defenses upon which they rely are legal, that is, that the option was void or, if valid, that it had not been exercised in accordance with its terms. "`It is accepted doctrine that a binding contract to convey land, when there has been no fraud or mistake or undue influence or oppression, will be specifically enforced. (Cites omitted)'" Hutchins v. Honeycutt, 286 N.C. 314, 318, 210 S.E.2d 254, 256-57 (1974). Thus, it would appear that plaintiffs are entitled to summary judgment decreeing specific performance unless there is a genuine issue of fact as to whether plaintiffs were ready, willing and able at all times to perform their side of the bargain. See Johnson v. Noles, 224 N.C. 542, 31 S.E.2d 637 (1944); Ward v. Albertson, 165 N.C. 218, 81 S.E. 168 (1914); 81 C.J.S. Specific Performance § 91 (1953).
Rule 56(c) of the North Carolina Rules of Civil Procedure provides in pertinent part that, upon motion, summary judgment shall be rendered forthwith "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 any party is entitled to a judgment as a matter of law." As indicated, plaintiffs' readiness, willingness, and ability to pay the purchase price are material facts. If there exists a genuine issue as to them summary judgment would be impermissible, otherwise summary judgment for plaintiffs must be granted.
With regard to this issue the record shows the following: (1) Plaintiffs allege in their complaint that on 29 September 1972 they were ready, willing, and able to purchase the land described in the option. (2) In their answer defendants deny this allegation on information and belief. (3) Plaintiffs move for summary judgment supporting their motion (a) with their own affidavits, loan applications and financial statements, which showed their total net worth to have been $261,600 on September 29th and $346,494 in November 1973; and (b) with the affidavit of the president of the Federal Land Bank Association of Winston-Salem that he was and is prepared to issue plaintiffs a firm loan commitment of $100,000 "on security of the tract of land they propose to purchase" from defendants provided the title is good. (4) In opposition to the motion defendants failed to produce any counter affidavits or other evidentiary matter justifying their opposition as provided by G.S. 1A-1, Rule 56(e) and (f).
Rule 56(e) sets forth the content requirement for affidavits and provides, inter alia : "When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." (Emphasis added.)
Rule 56(f) provides: "Should it appear from the affidavits of a party opposing the motion that he cannot for reasons stated present by affidavit facts essential to justify his 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."
Since defendants failed to support their general denial of plaintiffs' readiness and *408 ability to pay and failed to utilize Rule 56(f) with regard to this issue, the question in this case is whether summary judgment for plaintiffs was appropriate. See First Federal Savings and Loan Assoc. v. Trust Co., 282 N.C. 44, 191 S.E.2d 683 (1972).
Plaintiffs, as the moving party, have the burden of establishing that no genuine issue as to any material facts exists. Savings and Loan Assoc. v. Trust Co., supra. They also have the burden of persuasion with regard to the issue here. It follows, therefore, that the motion must be denied if the opposing party submits affidavits or other supporting material which casts doubts upon the existence of a material fact or upon the credibility of a material witness, or if such doubts are raised by movant's own evidentiary material. 6 J. Moore, Federal Practice ¶ 56.15[4] (2d Ed. 1975) (hereinafter cited as Moore). However, not every failure of the opposing party to respond will require the entry of summary judgment. Savings and Loan Assoc. v. Trust Co., supra.
In an article by M. Louis, A Survey of Decisions Under the North Carolina Rules of Civil Procedures, 44 N.C.L.Rev. 729 (1972), it is pointed out that for summary judgment to be appropriate for the party with the burden of persuasion "he must still succeed on the strength of his own evidence" even though his affidavits and supporting material are not challenged as provided by sections (e) and (f) of Rule 56:
"Consequently the motion should ordinarily be denied even though the opposing party makes no response, if (1) the movant's supporting evidence is self contradictory or circumstantially suspicious or the credibility of a witness is inherently suspect either because he is interested in the outcome of the case and the facts are peculiarly within his knowledge or because he has testified as to matters of opinion involving a substantial margin for honest error, (2) there are significant gaps in the movant's evidence or it is circumstantial and reasonably allows inferences inconsistent with the existence of an essential element, or (3) although all the evidentiary or historical facts are established, reasonable minds may still differ over their application to some principle such as the prudent man standard for negligence cases." Id. at 738-739. See also 10 C. Wright & A. Miller, Federal Practice and Procedure § 2725 (1973) (hereinafter cited as Wright & Miller).
Of the foregoing standards Nos. (2) and (3) have no application here. As to No. (1), plaintiffs' affidavits, the affidavit of the bank president, and plaintiffs' financial conditions are not self-contradictory or circumstantially suspicious and, as stated, they allow no reasonable inferences inconsistent with the conclusion that plaintiffs were, at all times, ready, willing and able to perform. Plaintiffs' pleadings, affidavits, and financial statements show their net worth was more than sufficient to meet the purchase price of the land. They are, however, interested in the outcome of the case and the financial condition of each is a matter peculiarly within his knowledge. Further, the affidavit of the bank president, without plaintiffs' supporting affidavits, is insufficient to show that they were at all times ready, willing and able to perform. Plaintiffs, therefore, are relying on their own testimony to establish their ability to pay.
If plaintiffs' interest necessarily raises a question of their credibility, and their testimony cannot, under any circumstances, be accorded credibility as a matter of law, summary judgment would be inappropriate. To date this Court has not ruled on the question whether a party with the burden of proving a material fact is entitled to summary judgment when (1) he relies upon his own testimony, which is not inherently incredible and is neither self-contradictory nor susceptible to conflicting inferences, to establish that fact; and (2) the opposing party does not support the general denial of that fact in his pleadings by affidavits under Rule 56(e) or (f). This is the specific question which we must now answer.
*409 As all the commentators point out, "It is in the situation where the movant's facts, taken as true, would entitle him to summary judgment, and the opposing party has neither shown any facts contradicting movant's nor made any attack on the credibility of movant's witnesses, that there is special difficulty in determining whether an issue of credibility is present." 6 Moore ¶ 56.15[4].
In 10 Wright & Miller § 2726, the authors say: "Questions of credibility have given the courts considerable difficulty. Clearly, if the credibility of the movant's witnesses is challenged by the opposing party and specific bases for possible impeachment are shown, summary judgment should be denied and the case allowed to proceed to trial, inasmuch as this situation presents the type of dispute over a genuine issue of material fact that should be left to the trier of fact. A problem arises, however, when there only are latent doubts as to credibility, as when some of the evidence necessary to establish that no genuine issue exists is presented by an `interested' person or in affidavit form so that there has been no chance for the opposing party to cross-examine."
Noting that certain courts have taken a restrictive view of the summary judgment procedure, usually finding "a lurking issue" of credibility for the jury, especially when the evidence is based on affidavits, Wright & Miller say, "Fortunately . . . the general rule is that specific facts must be produced in order to put credibility in issue so as to preclude summary judgment." Id.
That courts are slow to grant summary judgment when a movant presents his own affidavit concerning facts which are peculiarly within his knowledge, and that movant's uncontradicted and unimpeached proofs do not import veracity merely because they are uncontradicted by the opposing party, is well established. "It is also clear that the opposing party is not entitled to have the motion denied on the mere hope that at trial he will be able to discredit movant's evidence; he must, at the hearing, be able to point out to the court something indicating the existence of a triable issue of material fact." 6 Moore ¶ 56.15[4].
From the foregoing discussion, it is quite clear that it would be futile to attempt to state a general rule which would determine whether a "genuine issue of fact" exists in a particular case. It is equally clear, however, that issues must be raised in the manner prescribed by the Rules of Civil Procedure, and G.S. 1A-1, Rule 56, prescribed the procedure applicable here.
In 1902 summary judgment procedure in actions on contracts in the District of Columbia was indistinguishable from that of our Rule 56. In disposing of the argument that it deprived the defendants of the right to a jury trial, the Supreme Court of the United States said:
"If it were true that the rule deprived the plaintiff in error of the right of trial by jury, we should pronounce it void without reference to cases. But it does not do so. It prescribes the means of making an issue. The issue made as prescribed, the right of trial by jury accrues. The purpose of the rule is to preserve the court from frivolous defenses, and to defeat attempts to use formal pleadings as means to delay the recovery of just demands.
"Certainly a salutary purpose, and hardly less essential to justice than the ultimate means of trial. . . ." Fidelity & Deposit Co. of Maryland v. United States, 187 U.S. 315, 320, 23 S.Ct. 120, 122, 47 L.Ed. 194, 197-198 (1902).
In equivalent language, in 1923, the Court of Appeals of New York sustained its summary judgment procedure ("rule 113") from a similar attack: "The rule in question is simply one regulating and prescribing procedure, whereby the court may summarily determine whether or not a bona fide issue exists between the parties to the action. A determination by the court that such issue is presented requires the denial of an application for summary judgment and trial of the issue by jury at the election *410 of either party. On the other hand, if the pleadings and affidavits of plaintiff disclose that no defense exists to the cause of action, and a defendant, as in the instant case, fails to controvert such evidence and establish by affidavit or proof that it has a real defense and should be permitted to defend, the court may determine that no issue triable by jury exists between the parties and grant a summary judgment." General Investment Co. v. Interborough Rapid Trans. Co., 235 N.Y. 133, 142-43, 139 N.E. 216, 220 (1923).
The foregoing analyses are, of course, "fully applicable to Rule 56," a fact which Wright & Miller noted in stating (1) that most courts have simply said, "The rule was not intended to deprive a party of a jury trial"; (2) that the federal courts take great care not to deny the non-moving party a full trial once it is shown that a genuine issue of fact exists or that the judgment ultimately might depend on the credibility of witnesses; and (3) that once the court determines that there are no disputed material facts, it does not deprive the opposing party of his right to jury trial by entering a judgment on the basis of a determination of the governing legal issues. 10 Wright & Miller § 2714. See 6 Moore ¶ 56.06[1].
Nothing in our State Constitution nor in our decisions precludes summary judgment in favor of a party with the burden of persuasion when the opposing party has failed to respond to the motion in the manner required by Rule 56(e) or (f) and no "genuine issue as to any material fact" arises out of movant's own evidence or the situation itself challenges credibility. Under these circumstances Rule 56(e) provides that summary judgment shall be entered.
Cutts v. Casey, 278 N.C. 390, 180 S.E.2d 297 (1971) does not control decision here. In that case, which involved a motion for a directed verdict upon conflicting evidence on a strenuously contested issue of fact, neither a directed verdict nor a motion for summary judgment could have been appropriate.
The purpose of Rule 56 is to prevent unnecessary trials when there are no genuine issues of fact and to identify and separate such issues if they are present. To this end the rule requires the party opposing a motion for summary judgmentnotwithstanding a general denial in his pleadingsto show that he has, or will have, evidence sufficient to raise an issue of fact. If he does not, "summary judgment, if appropriate, shall be entered against him." To hold that courts are not entitled to assign credibility as a matter of law to a moving party's affidavit when the opposing party has ignored the provisions of sections (e) and (f) would be to cripple Rule 56. See 10 Wright & Miller § 2740.
We hold that summary judgment may be granted for a party with the burden of proof on the basis of his own affidavits (1) when there are only latent doubts as to the affiant's credibility; (2) when the opposing party has failed to introduce any materials supporting his opposition, failed to point to specific areas of impeachment and contradiction, and failed to utilize Rule 56(f), and (3) when summary judgment is otherwise appropriate. This is not a holding that the trial court is required to assign credibility to a party's affidavits merely because they are uncontradicted. To be entitled to summary judgment the movant must still succeed on the basis of his own materials. He must show that there are no genuine issues of fact; that there are no gaps in his proof; that no inferences inconsistent with his recovery arise from his evidence; and that there is no standard that must be applied to the facts by the jury. Further, if the affidavits seem inherently incredible; if the circumstances themselves are suspect; or if the need for cross-examination appears, the court is free to deny the summary judgment motion. Needless to say, the party with the burden of proof, who moves for summary judgment supported only by his own affidavits, will ordinarily not be able to meet these requirements and thus will not be entitled to summary judgment.
*411 We now apply the foregoing principles to the facts of this case. As previously indicated, plaintiffs' affidavits and supporting materials, if true, establish the material fact that, upon tender of the deed, they were ready, willing, and able to pay defendants cash for the property. As to the credibility of these affidavits there are only latent doubts, that is doubts which stem from the fact that plaintiffs are interested parties. Defendants, however, have not produced any contradictory affidavits, have not pointed to any specific grounds for impeachment, and have not utilized Section (f) to show why they could not justify their opposition to plaintiffs' motion. Further, the affidavit of the disinterested bank president strongly corroborates plaintiffs' affidavits and financial statements and tends to show that plaintiffs were able to perform.
Here we again note that plaintiffs were not required to have the cash in hand on the day they exercised the option. By its terms they had a reasonable time thereafter to examine the title and that, of course, also gave them a reasonable time to close their approved loan. After defendants repudiated the contract plaintiffs were not required to liquidate their assets or to borrow money in order to keep cash on hand. "Thereafter, the tender of the balance of the purchase price and a demand for the deed was unnecessary. It is enough that plaintiff is ready, able and willing and offers to perform in his pleading." Johnson v. Noles, 224 N.C. 542, 547, 31 S.E.2d 637, 640 (1944). As long as their combined assets remained sufficient to enable them to raise the money within a reasonable time they could properly rely on the court's decree to give them a reasonable time to do so.
In any decree for specific performance of a contract to convey, the court will protect the rights of the vendor by requiring the vendee to comply with his part of the contract within a reasonable time, to be fixed by the court, before vendor parts with his deed. If the vendee fails to comply with the decree his right to specific performance will be denied and the action dismissed. Bateman v. Hopkins, 157 N.C. 470, 73 S.E. 133 (1911). For this reason, "the latent doubts" as to the credibility of plaintiffs' affidavits (raised by their interest in the action) have little, if any, significance. Further, the institution of this suit, was an objective indication of plaintiffs' readiness and willingness to perform.
The record does not indicate the grounds upon which the trial court granted defendants' motion for summary judgment but, on plaintiffs' showing, it could not have been on the ground that they were not ready, willing, and able to pay the purchase price in cash. Obviously the judge granted the motion on the theory that the option was invalid. Indeed, on appeal, defendants' only argument with reference to plaintiffs' cross-motion for summary judgment is that it was correctly denied because plaintiffs "have failed to show that the contract is complete or enforceable."
We hold, therefore, that plaintiffs' affidavits and supporting materials have shown their readiness, willingness, and ability to perform their part of the option-contract, and defendants having failed to respond thereto as provided by section (f) of Rule 56, under the circumstances of this case, summary judgment against defendants decreeing specific performance of the option-contract was appropriate, and the trial court erred in not entering it.
That portion of the decision of the Court of Appeals which sustained the trial judge's denial of plaintiffs' motion for summary judgment is reversed with directions that the case be remanded to the Superior Court for entry of the decree of specific performance in accordance with this opinion.
Affirmed in part; reversed in part.
|
26 N.J. 160 (1958)
138 A.2d 836
JAY ESCOETT, PLAINTIFF-RESPONDENT,
v.
ALDECRESS COUNTRY CLUB, A CORPORATION OF THE STATE OF NEW JERSEY, ET AL., DEFENDANTS-APPELLANTS.
The Supreme Court of New Jersey.
Argued January 6, 1958.
Decided February 17, 1958.
*162 Mr. Milton Rosenkranz argued the cause for the defendants-appellants, and appeared as attorney for the defendants-appellants Donald J. Flamm and Donmor Realty Corporation.
Mr. George F. Losche for the defendants-appellants Aldecress Country Club (Messrs. Losche and Losche, attorneys).
Mr. Max Eisenstein for the remaining defendants-appellants (Messrs. Eisenstein and Eisenstein, attorneys).
Mr. Arthur C. Gillette argued the cause for the plaintiff-respondent.
PER CURIAM.
This is an appeal by the defendants from a judgment of the Appellate Division, which by a divided court reversed a judgment of the Chancery Division, denying the plaintiff's request for an adjournment of the defendants' motion to dismiss to permit plaintiff to obtain counsel to oppose the motion, and granting the defendants' motion to dismiss plaintiff's action with prejudice for his failure to prosecute within the time limit specified in R.R. 4:42-2(a). The Appellate Division directed that the case be remanded in order that the plaintiff be allowed a reasonable time to obtain counsel to oppose the defendants' motion to dismiss. 46 N.J. Super. 345 (1957).
Due to the fact that this case has been pending since December 29, 1953, and that a remand for argument on the motion to dismiss would in all probability only result in even more delay in the final determination of the action, *163 we decided to exercise our original jurisdiction pursuant to R.R. 1:5-4 in order to expedite a final determination of the controversy. To that end we requested that the plaintiff submit an affidavit detailing his efforts to diligently prosecute his action; the reason for his failure to complete his discovery of the defendants' records; and his intention in regard to the completion of that discovery and the future prosecution of his action. The defendants were directed to file an answering affidavit. Upon consideration of the affidavits submitted, it is the opinion of this court that the judgment of the Appellate Division be affirmed, in accordance with the majority opinion, except that the case shall not be remanded for a hearing upon the defendants' motion to dismiss, but shall instead be remanded pursuant to the directions hereinafter set forth.
It appears from the plaintiff's affidavit that between July 9, 1956, when his original counsel notified him of their intended withdrawal, and February 21, 1957, when the action was dismissed with prejudice, he had consulted a number of attorneys in an effort to secure counsel to represent him. It further appears that the plaintiff has incurred an indebtedness to his accountants, engaged to audit the defendants' records, of $38,827.60, of which he has paid on account $27,531.36. It also appears that he has incurred an obligation to his original counsel in excess of $13,000, of which he alleges payment of $5,000. Whether the reason for the unwillingness of the attorneys consulted to represent the plaintiff was due to his financial involvement or the want of merit in his case does not appear. Dismissal of plaintiff's action for failure to prosecute his action within the time limit provided by R.R. 4:42-2(a), where he has made extensive but unsuccessful efforts to secure counsel, seems too drastic.
According to the affidavits submitted, plaintiff has not yet succeeded in retaining counsel to prosecute this cause of action, but he avers that if given the opportunity he will make every effort to secure counsel for that purpose. Plaintiff's present counsel was retained solely for this appeal.
*164 With respect to plaintiff's failure to complete the audit of the defendants' books, it appears that the accountants engaged refused to complete it until they were fully paid for the services already rendered. The audit was commenced over two and a half years ago and suspended on July 2, 1956, because of non-payment of the balance owed by the plaintiff. The plaintiff presently is indebted to his accountants for approximately $11,000. The plaintiff asserts that he intends to complete this audit and seeks our direction as to "the limits of any further auditing."
Without attempting to reprise the events which have resulted in a delay of over four years since the inception of this litigation, including a prior appeal to this court, 16 N.J. 438 (1954), it is sufficient to say that the plaintiff has been rather derelict in the prosecution of his action and that his conduct during this period may be characterized as less than commendable. But in view of his extensive, but unavailing efforts, to secure counsel and the large sums of money he has already expended and for which he is indebted, we think that he should not at this time be foreclosed by dismissal of his complaint.
However, the defendants cannot be required to await the plaintiff's convenience. This suit has been pending entirely too long and must be either diligently prosecuted or abandoned. While we agree that the plaintiff should be granted an opportunity to obtain counsel, if he is unable to do so within the time limits to be specified herein for the prosecution of his action, that reason will no longer be countenanced as an excuse for further postponement.
In regard to the audit, the plaintiff has had more than ample time to have completed it. If the plaintiff had advanced the necessary funds it would have in all probability been completed long before now. The future prosecution of this action cannot be made contingent upon plaintiff's payment of the balance due to his accountants. If the audit cannot be completed within the time to be specified any prejudice that may result will be attributable solely *165 to factors within the plaintiff's control. In fairness to the defendants, the plaintiff must either complete the audit within the time to be specified or abandon his reliance thereon.
Accordingly, we hold that the judgment of the Appellate Division be affirmed, except that in order to bring this action to a prompt conclusion, it be modified in accordance with the following directions:
(1) All discovery proceedings, including the audit, shall be concluded within 75 days from the date of the mandate to be issued pursuant to this opinion; at the end of that period the plaintiff shall deliver to the defendants a copy of the final report of the audit or inform them of his intention to abandon his reliance thereon.
(2) Within 20 days from the date of the mandate, the defendants shall file answers to the amended complaint in which the defendants may merely leave the plaintiff to his proof or the defendants may take any other action which they may deem appropriate.
(3) The pretrial conference shall be held at the conclusion of the said 75 day period or within one week thereafter. The defendants may enlarge upon their answer at that time. Any motions shall be disposed of at or before the pretrial conference.
(4) If the action is not finally disposed of on or before the pretrial conference, it shall be tried on its merits not later than 20 days from the date of the pretrial conference.
(5) If the plaintiff is unable to obtain counsel to prosecute his action, he must either abandon his action or proceed pro se. In any event, the terms above set forth must be strictly complied with. Failure of the plaintiff to comply with any of these terms shall subject his action to dismissal with prejudice.
(6) The foregoing timetable is for the protection of the defendants. The court may alter it upon the defendants' application for good cause shown.
The judgment is affirmed as modified. No costs.
*166 For affirmance Chief Justice WEINTRAUB, and Justices HEHER, WACHENFELD, BURLING, JACOBS, FRANCIS and PROCTOR 7.
For reversal None.
|
184 B.R. 834 (1995)
UNITED STATES of America, Appellant,
v.
Imre GARAMI d/b/a Tidy Maid, Appellee.
Nos. 94-1261-CIV-ORL-19, 94-1262-CIV-ORL-19.
United States District Court, M.D. Florida, Orlando Florida.
June 28, 1995.
*835 Robert Hunter Pflueger, Robert H. Pflueger, P.A., Altamonte Springs, FL, for Imre Garami.
Susan R. Waldron, U.S. Attorney's Office, M.D. Fla., Tampa, FL, for U.S.
FAWSETT, District Judge.
This is an appeal from two Bankruptcy Court Orders in Bankruptcy Case No. 94-00473-BKC-6B3. Appellant United States of America contests the Honorable Arthur B. Briskman's October 4, 1994, Order denying its motion for summary judgment, and the September 23, 1994, Order sustaining Debtor's objection to "Claim No. 5," filed by the Internal Revenue Service. Upon motion by Appellant, the appeals were consolidated.
Appellant's Brief is found at Docket Number 9[1] (filed December 13, 1994). The Debtor-Appellee has failed to file a brief pursuant to Fed. R. Bankr.P. 8009(a)(2), despite this Court's Order which extended the time for doing so until April 26, 1995. (Doc. No. 12) Although this failure may be prejudicial to the Debtor's position, Appellant is not entitled to automatic reversal of the order from which it appealed. In re Silk Plants, 100 B.R. 360, 363 (Bankr.M.D.Tenn. 1989).
BACKGROUND
Tidy Maid is a residential and commercial cleaning service run by the Debtor, Imre Garami. An office manager assists Mr. Garami with the administrative functions of the business, and Tidy Maid uses from twelve to eighteen cleaners. For economic reasons, the debtor Imre Garami d/b/a Tidy Maid began leasing his employees from Sunshine Staff Leasing, Inc. ("Sunshine") beginning in October of 1993. Under the lease agreement, Sunshine provides weekly payroll *836 checks to the commissioned Tidy Maid cleaners in exchange for a fee totaling 3% of the gross payroll. Sunshine is responsible for paying withholding taxes and FICA. This arrangement also enables Tidy Maid cleaners and the Debtor to obtain health insurance through Sunshine.
The Debtor and Tidy Maid's office manager are responsible for the day to day supervision of the cleaners. Tidy Maid hires, fires, trains, assigns and controls the cleaners and provides them with transportation to and from their work assignments, cleaning materials, and vacuum cleaners. Sunshine's role is limited. It pays the cleaners' commissions according to instructions given by Tidy Maid and arranges for an initial drug test.
Prior to the contract with Sunshine, Tidy Maid's taxes were done with the help of a firm of CPAs. The Debtor has no knowledge of whether Sunshine has paid tax liabilities as required under its contract with Tidy Maid.
This controversy arises out of the United States' claim that the Debtor owes unpaid FICA (Form 941) liabilities for the last quarter of 1993 which it alleges were generated with respect to the leased employees. The United States takes the position that Tidy Maid rather than Sunshine was the employer of the leased employees and that Tidy Maid rather than Sunshine is responsible for allegedly unpaid employment tax liabilities.[2] The Debtor takes the position that Sunshine is responsible.
Although Tidy Maid contends that all appropriate moneys have been sent to Sunshine, the government maintains that it has no proof that the taxes have been paid. Sunshine, who is not a party to the action at this time, pays the taxes for the leased employees under its own employer identification number. The government's position appears to be that unless it receives information from Sunshine breaking down Sunshine's lump payment by individual tax identification numbers or proof that taxes have been paid for all of the employees Sunshine leases, the government will hold the Debtor responsible for all of the taxes. The government contends that the federal tax obligation is that of the person who meets the qualifications of an employer, and that the Debtor, not Sunshine, is such person.
The United States filed a proof of claim dated March 3, 1994, which was not included in the record on appeal. This claim, designated as "Claim 5," asserted a secured claim in the amount of $23,459.08, an unsecured priority claim in the amount of $25,719.06, and an unsecured general claim of $1,984.18, for a total of $51,142.32. (Doc. No. 1, Exh. 6). The Debtor objected to the unsecured priority claim, contending that the tax returns for the period in question had been timely submitted and the amount owed was $2,109.00. (Doc. No. 1, Exh. 9). On September 9, 1994, the United States moved for summary judgment on the Debtor's objection to the claim. (Doc. No. 1, Exh. 14). The court held a hearing on September 13, 1994, at which it orally sustained the Debtor's objection and denied the motion for summary judgment without prejudice. (Doc. No. 1, Exh. 23). A written order sustaining the Debtor's objection and allowing the IRS claim in the amount of $23,459.08 as secured, $2,188.00 as unsecured priority, and $1,476.64 as general unsecured was entered on September 23, 1994. (Doc. No. 1, Exh. 15, signed September 23, 1994). A written order denying the motion for summary judgment without findings of fact or conclusions of law was entered on October 4, 1994. (Doc. No. 1, Exh. 16).
The Appellant United States of America appeals both of these decisions and frames the issues for this Court's review as follows:
1. Whether the bankruptcy court erred in determining that the proof of payment of withholding taxes is the responsibility of the third party leasing company rather than the debtor in this case.
2. Whether the bankruptcy court erred in sustaining the debtor's objection to the claim of the United States with regard to the employment taxes (Form 941) *837 for the period October 1, 1993 through December 31, 1993.
3. Whether the bankruptcy court exceeded its authority when it concluded that the burden of compliance with the statutory scheme should be borne by the United States rather than by the debtor.
The central question for this Court's determination is whether the Debtor, the third party leasing corporation, or the government has the burden of proving that the required taxes on these employees have or have not been paid under federal law.
CONCLUSIONS OF LAW
The bankruptcy court's conclusions of law are reviewed de novo on appeal. Haas v. Internal Revenue Service (In re Haas), 48 F.3d 1153, 1155 (11th Cir.1995).
The internal revenue code requires employers to deduct withholding taxes and pay FICA and FUTA taxes on employees' wages. 26 U.S.C. § 3402, § 3102, § 3301; In re Professional Security Services, 162 B.R. 901, 903 (Bankr.M.D.Fla.1993). An "employer" is defined as "the person for whom an individual performs or performed any service, of whatever nature, as the employee of such person except that (1) if the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services the term "employer" . . . means the person having control of the payment of such wages . . ." Title 26 U.S.C. § 3401(d) (Supp.1995). The determination of the employer-employee relationship involves an analysis of twenty common law factors which are as follows:
1. whether the worker must comply with other persons' instructions about when, where and how to work;
2. whether the worker is trained by the person for whom services are performed;
3. whether the worker's services are integrated into the business operations;
4. whether the services must be rendered personally by the worker;
5. whether the person for whom the services are performed hires, supervises, and pays assistants;
6. whether there is a continuing relationship between the worker and the person for whom the services are performed;
7. whether the person for whom the services are performed establishes set hours of work;
8. whether the worker must devote substantially full time to the business of the person or persons for whom the services are performed;
9. whether the work is performed on the premises of the person for whom the services are performed;
10. whether the person for whom services are performed retains the right to set the order or sequence of tasks;
11. whether the worker is required to submit oral or written reports;
12. whether payment is made by hour, week, or month rather than lump sum;
13. whether the workers' business and/or traveling expenses are paid;
14. whether the worker must supply tools, materials and other equipment;
15. whether the worker makes a significant investment in facilities used to perform services;
16. whether a worker can realize a profit or suffer a loss as a result of services;
17. whether a worker performs services for more than one firm at a time;
18. whether a worker makes services available to the general public;
19. whether the person for whom services are performed has the right to discharge a worker; and
20. whether a worker has the right to terminate the working relationship without incurring liability.
Rev. Rul. 87-41, 1987-1 C.B. 296. These criteria are ordinarily used to distinguish between an employee and an independent contractor but are equally applicable to determine by whom an individual is employed. Professional & Executive Leasing, Inc. v. Commissioner of Internal Revenue, 89 T.C. 225, 232 (1987) (citing Bartels v. Birmingham, 332 U.S. 126, 132, 67 S.Ct. 1547, 1550, 91 L.Ed. 1947 (1947)). No one factor is controlling, but a critical question is whether *838 the person for whom the work is performed has the right to control the activities of the individuals whose status is in issue, not only as to results but also as to the means and method to be used for accomplishing the result. Id. at 232-33 (citations omitted). A contract which purports to create an employer-employee relationship is not controlling where an analysis of the common law factors as applied to the facts of the particular situation establish that such a relationship does not exist. Id. at 233; Bartels, 332 U.S. 126, 67 S.Ct. 1547.
Whether or not two parties stand in an employer-employee relationship is a factual question. Burnetta v. Commissioner of Internal Revenue, 68 T.C. 387, 397 (1977) (citations omitted). In factually similar situations involving leasing corporations, courts have declined to find that workers were employees of the corporation from which they were leased. In re Professional Security Services, Inc., 162 B.R. 901 (Bankr.M.D.Fla. 1993); Burnetta v. Commissioner of Internal Revenue, 68 T.C. 387 (1977); Professional & Executive Leasing, Inc. v. Commissioner of Internal Revenue, 89 T.C. 225 (1987); cf. In re Critical Care Support Services, 138 B.R. 378 (Bankr.E.D.N.Y.1992) (lessor company responsible for taxes because it exercised significant control over workers). This Court finds that Tidy Maid's employees are no exception and that the Bankruptcy Court erred in its rulings to the contrary. The administrative acts performed by Sunshine of arranging for the initial drug testing, providing the cleaners with information about health insurance, and providing W-4 Forms do not supersede the economic reality of the employer-employee relationship which the cleaners have with Tidy Maid. Sunshine generates payroll checks based on the information supplied to it by Tidy Maid. There is no evidence to suggest that Sunshine would pay the cleaners and file the employment taxes regardless of whether Tidy Maid submits payment. See In re Critical Care, 138 B.R. 378.
Although Sunshine contractually agreed to pay the employment taxes of Tidy Maid's cleaners, such an agreement does not relieve the actual employer, Tidy Maid, of the obligation to pay those taxes. In re Professional Security Services, Inc., 162 B.R. 901, 903 (Bankr.M.D.Fla.1993). Because each taxpayer has a non-delegable duty to timely perform its federal income tax obligations, a contract with a third party does not relieve it of its duty to do so. Id. Therefore, in the instant case although the Debtor may have paid the appropriate taxes to Sunshine for forwarding to the United States, until payment is actually made to the government, the responsibility for such payment rests on the shoulders of the Debtor. The Court is aware of no authority to the contrary.
It appears that the Bankruptcy Court's ruling was influenced by the seeming unfairness of the burden this result places on a debtor who is making a good faith attempt to comply with the law.[3] In the instant case, the debtor may be able to secure proof of payment from Sunshine which would satisfy the government's demands. As problems such as those presented in the instant case become more widespread, it is up to Congress, not the courts, to fairly and affirmatively accommodate the peculiarities of staff leasing into this country's internal revenue system.
CONCLUSION
Based on the foregoing, the rulings of the bankruptcy court are REVERSED and REMANDED for proceedings consistent with this Order.
NOTES
[1] All Docket Number references refer to the lead case, 94-1261-CIV-ORL-19.
[2] The Government nonetheless stated that if the debtor could satisfactorily establish that the tax liabilities at issue were paid by Sunshine, it would credit debtor on a dollar for dollar basis with all payments made by Sunshine.
[3] At the September 13, 1994 hearing the Bankruptcy Court stated:
It seems to me the burden is switched unfairly in this particular case. It seems to me you don't have an answer on how to proceed because it's a bigger problem than just this case. It seems like you're putting this on the shoulders of this debtor [sic] thirty thousand employees and you're not sure if they're paying taxes on them.
(Doc. No. 1, Exh. 23).
|
14-3434 (L)
Singh v. Lynch
BIA
Nelson, IJ
A089 714 653
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
2 the Second Circuit, held at the Thurgood Marshall United States
3 Courthouse, 40 Foley Square, in the City of New York, on the
4 5th day of January, two thousand sixteen.
5
6 PRESENT:
7 GUIDO CALABRESI,
8 JOSÉ A. CABRANES,
9 RAYMOND J. LOHIER, JR.,
10 Circuit Judges.
11 _____________________________________
12
13 HARMESH SINGH,
14 Petitioner,
15
16 v. 14-3434(L),
17 15-507(Con)
18 NAC
19 LORETTA E. LYNCH, UNITED STATES
20 ATTORNEY GENERAL,
21 Respondent.
22 _____________________________________
23
24 FOR PETITIONER: Jaspreet Singh, Jackson Heights, New
25 York.
26
27 FOR RESPONDENT: Benjamin C. Mizer, Principal Deputy
28 Assistant Attorney General; John S.
29 Hogan, Assistant Director; Lindsay
30 Corliss, Trial Attorney, Office of
1 Immigration Litigation, United
2 States Department of Justice,
3 Washington, D.C.
4 UPON DUE CONSIDERATION of these petitions for review of two
5 Board of Immigration Appeals (“BIA”) decisions, it is hereby
6 ORDERED, ADJUDGED, AND DECREED that the petitions for review
7 are DENIED.
8 Petitioner Harmesh Singh, a native and citizen of India,
9 seeks review of an August 29, 2014, decision of the BIA affirming
10 a September 25, 2012, decision of an Immigration Judge (“IJ”)
11 denying Singh’s application for asylum, withholding of removal,
12 and relief under the Convention Against Torture (“CAT”). In
13 re Harmesh Singh, No. A089 714 653 (B.I.A. Aug. 29, 2014), aff’g
14 No. A089 714 653 (Immig. Ct. N.Y. City Sept. 25, 2012). He also
15 seeks review of the BIA’s January 23, 2015, denial of his motion
16 to reconsider or reopen. In re Harmesh Singh, No. A089 714 653
17 (B.I.A. Jan. 23, 2015). We assume the parties’ familiarity
18 with the underlying facts and procedural history in this case.
19 As to the denial of asylum and other relief, we have
20 reviewed the IJ’s decision, including the portions not
21 explicitly discussed by the BIA. Yun-Zui Guan v. Gonzales, 432
22 F.3d 391, 394 (2d Cir. 2005). The applicable standards of
2
1 review are well established. See 8 U.S.C. § 1252(b)(4)(B);
2 Yanqin Weng v. Holder, 562 F.3d 510, 513 (2d Cir. 2009).
3 For asylum applications, like Singh’s, governed by the REAL
4 ID Act, the agency may, “[c]onsidering the totality of the
5 circumstances,” base a credibility finding on inconsistencies
6 between the applicant’s statements and other evidence, “without
7 regard to whether” they go “to the heart of the applicant’s
8 claim.” 8 U.S.C. § 1158(b)(1)(B)(iii); Xiu Xia Lin v. Mukasey,
9 534 F.3d 162, 163-64 (2d Cir. 2008). “We defer . . . to an IJ’s
10 credibility determination unless, from the totality of the
11 circumstances, it is plain that no reasonable fact-finder could
12 make such an adverse credibility ruling.” Xiu Xia Lin, 534 F.3d
13 at 166.
14 Substantial evidence supports the adverse credibility
15 determination. The IJ reasonably relied on inconsistencies
16 between Singh’s testimony and his documentary evidence. The
17 letter Singh submitted, from a nursing home where he was treated
18 after his second alleged beating by police, stated that he was
19 comatose, but Singh did not mention any such severe injury.
20 This failure to discuss the serious nature of his injuries is
3
1 particularly damaging to his credibility. See Xian Tuan Ye v.
2 Dep’t of Homeland Sec., 446 F.3d 289, 295 (2d Cir. 2006).
3 Singh’s documentary evidence differed from his testimony
4 in other ways that further called into question whether he was
5 a political activist who had been targeted by the police and
6 the opposition party. His wife’s letter explained that she was
7 being harassed by police, but Singh testified that his wife and
8 children were safe in India. Further, his wife wrote that Singh
9 was arrested “so many times” in India, while Singh testified
10 that he was arrested only twice; the IJ found that “so many
11 times” meant more than twice, and a reasonable fact-finder would
12 not be compelled to accept Singh’s argument to the contrary.
13 Majidi v. Gonzales, 430 F.3d 77, 80-81 (2d Cir. 2005); Siewe
14 v. Gonzales, 480 F.3d 160, 167 (2d Cir. 2007).
15 The IJ also reasonably gave limited weight to Singh’s
16 additional documentary evidence, as the letters omitted
17 material information, were not properly authenticated, or were
18 prepared by parties unavailable for cross-examination. Xiao
19 Ji Chen v. U.S. Dep’t of Justice, 471 F.3d 315, 342 (2d Cir.
20 2006); Biao Yang v. Gonzales, 496 F.3d 268, 273 (2d Cir. 2007).
21 Accordingly, given that the inconsistencies call into question
4
1 the main allegations of past harm, substantial evidence
2 supports the agency’s adverse credibility determination, which
3 is dispositive of asylum, withholding of removal, and CAT
4 relief, because all three claims relied on the same factual
5 predicate. Paul v. Gonzales, 444 F.3d 148, 156-57 (2d Cir.
6 2006).
7 We also deny the second petition, reviewing the BIA’s
8 denial of reconsideration and reopening for abuse of
9 discretion. Nolasco v. Holder, 637 F.3d 159, 162 (2d Cir. 2011)
10 (reconsideration); Ali v. Gonzales, 448 F.3d 515, 517 (2d Cir.
11 2006) (reopening).
12 To the extent Singh requested reconsideration, he disputed
13 the IJ’s adverse credibility determination by arguing that the
14 IJ could have interpreted the record differently. As the BIA’s
15 review is limited to a determination of whether factual findings
16 are clearly erroneous, the BIA did not abuse its discretion by
17 denying reconsideration. It is not permitted to reweigh or
18 reinterpret the facts. See 8 C.F.R. § 1003.1(d)(3)(i).
19 To the extent that Singh’s motion requested reopening, he
20 asserted that the Bharitya Janata Party’s victory in the
21 national elections of 2014 established changed country
5
1 conditions, and resulted in increased police harassment of his
2 wife. However, Singh did not meaningfully rebut the underlying
3 adverse credibility determination, and accordingly the agency
4 did not abuse its discretion in refusing to reopen proceedings.
5 See Kaur v. BIA, 413 F.3d 232, 234 (2d Cir. 2005); Qin Wen Zheng
6 v. Gonzales, 500 F.3d 143, 147 (2d Cir. 2007).
7 For the foregoing reasons, the petitions for review are
8 DENIED. As we have completed our review, any stay of removal
9 that the Court previously granted in these petitions is VACATED,
10 and any pending motion for a stay of removal in these petitions
11 is DISMISSED as moot. Any pending request for oral argument
12 in these petitions is DENIED in accordance with Federal Rule
13 of Appellate Procedure 34(a)(2), and Second Circuit Local Rule
14 34.1(b).
15 FOR THE COURT:
16 Catherine O=Hagan Wolfe, Clerk
6
|
86 F.2d 585 (1936)
MUTUAL LIFE INS. CO. OF NEW YORK
v.
WELLS FARGO BANK & UNION TRUST CO.[*]
No. 7797.
Circuit Court of Appeals, Ninth Circuit.
November 30, 1936.
*586 Frederick L. Allen, of New York City, and F. Eldred Boland and Leo R. Friedman, both of San Francisco, Cal., for appellant.
Lloyd W. Dinkelspiel, F. Whitney Tenney, Richard E. Guggenhime, and Heller, Ehrman, White & McAuliffe, all of San Francisco, Cal., for appellee.
Before WILBUR, GARRECHT, and MATHEWS, Circuit Judges.
PER CURIAM.
In this case there was a former appeal in which the present appellee was the appellant. We reversed the judgment entered in favor of defendant upon a directed verdict and sent the case back to the District Court for a new trial upon the ground that the evidence was sufficient to justify submission of the case to the jury. Wells Fargo Bank & Union Trust Co. v. Mutual Life Ins. Co., 66 F.(2d) 890. At the second trial the plaintiff trust company prevailed and the insurance company now brings this case before us. Except that no testimony regarding the choke of the automobile was introduced, the evidence was otherwise practically identical with that presented at the first trial. Therefore, to save repetition, we refer to the previous decision, supra, for a detailed statement of the facts.
There are 10 assignments of error. Assignment 1 is that the trial court erred in denying appellant's motion for a directed verdict made at the close of all the evidence. The motion was that the court direct the jury to return a verdict in appellee's favor for the amount of the single indemnity ($15,000) provided for in the policy, less certain admitted deductions, the net amount of such single indemnity being $14,527.65. The ground of the motion was that the evidence was insufficient to warrant a finding that the death of the insured resulted from bodily injury effected solely through external, violent, and accidental means, and insufficient, therefore, to warrant a verdict for the double indemnity ($30,000) provided for in the policy. The evidence, as above stated, was not materially different from that given at the first trial of this case. That was held sufficient to justify submission of the case to a jury. Wells Fargo Bank & Union Trust Co. v. Mutual Life Ins. Co., supra. The appellant's motion was properly denied.
Assignment 2 is that the trial court erred in denying appellant's motion for a directed verdict made at the close of appellee's case. Appellant waived this alleged error by introducing evidence in *587 its own behalf. Sacramento Suburban Fruit Lands Co. v. Melin (C.C.A.9) 36 F.(2d) 907, 909.
Assignment 3 is: "That the evidence was and is insufficient to justify or support the verdict of the jury and/or the judgment." This is not a proper or sufficient assignment of error, nor is it separately or specifically urged in appellant's brief and therefore should not be considered. Dayton Rubber Mfg. Co. v. Sabra (C.C.A.9) 63 F.(2d) 865; Hecht v. Alfaro (C.C.A.9) 10 F.(2d) 464, 466.
Assignment 4 is that the trial court erred in denying appellant's motion to strike out certain testimony given by a witness for appellee. Assignment 5 is that the trial court erred in admitting, over appellant's objection, certain testimony given by a witness for appellee. These alleged errors are not specified in appellant's brief, as required by our rule 24, and should therefore be disregarded.
Assignment 6 is that the trial court erred in failing and refusing to give the jury six instructions said to have been requested by appellant. This assignment is invalid, in that it attempts to cover six alleged errors, thereby violating our rule 11, which provides that an assignment of errors "shall set out separately and particularly each error asserted and intended to be urged." E. R. Squibb & Sons v. Mallinckrodt Chemical Works (C.C.A.8) 69 F.(2d) 685, 687; Albany Perforated Wrapping-Paper Co. v. John Hoberg Co. (C.C.A.7) 109 F. 589; Sutherland v. Brace et al. (C.C.A.7) 71 F. 469; A., T. & S. F. R. Co. v. Mulligan (C.C.A.7) 67 F. 569.
For the same reason assignment 7, directed to the giving by the court of certain instructions, is unavailing.
But there is still another reason why such an assignment fails to properly present a question for review. The record shows that, following the giving of the instructions by the court to the jury, counsel for the defendant said: "At this time, for the purpose of the record, we desire to object and to note an exception to the action of the Court in its refusal to give defendant's requested instructions 5, 6, 7, 8, 10 and 11. Likewise we desire to note an exception to the Court's refusal to give defendant's requested instructions Nos. 20 and 21. We likewise desire to note an exception to the Court giving if the reference is sufficient plaintiff's proposed instructions 3, 6, 7 and 8. I may state that plaintiff's instruction 3 is to the effect of what particular inferences the jury will be permitted to draw. I think your Honor is conversant with that, as to the specification of those inferences and not as to the general language preceding it. Our objection to plaintiff's proposed instructions 6, 7 and 8 is on the ground of the burden of proof as to suicide in a case of this kind. Likewise we desire to note an exception to that portion of the Court's charge which deals with the subject of miscalculation as an unforeseen fortuitous circumstance."
The exceptions, quoted above, taken to the court's instructions, are insufficient to raise any point for consideration by this court on appeal. They fail to state the grounds upon which they are based, and such neglect is fatal. This court said in Royal Finance Co. of California v. Miller, 47 F.(2d) 24, 27: "The exception to this instruction does not state the ground of the exception as is required of a party in order to present such objections in this court. In Sacramento, etc., v. Loucks, 36 F.(2d) 921, in speaking of the specification of error as to instructions given by the trial court, we said: `These specifications of error cannot be considered, for the reason that the exceptions to the charge do not show the ground of the objection thereto.' See, also, Sacramento Suburban Fruit Lands Co. v. Johnson (C. C.A.) 36 F.(2d) 925."
Again, in First Nat. Pictures v. Robison, 72 F.(2d) 37, 39, we said: "We call attention to the fact that, although this and many other instructions to the jury were excepted to by the defendants' attorneys who tried the case in other respects with meticulous care, no ground for the exceptions were stated to the court, and, consequently, such exceptions cannot be considered." (Many cases cited.)
See, also, Pacific S. S. Co. v. Holt, 77 F.(2d) 192, 199 (C.C.A.9); State Life Ins. Co. v. Sullivan, 58 F.(2d) 741, 744 (C.C. A.9).
Assignment 8 is that the trial court erred in giving the jury certain instructions therein set forth. This alleged error is not specified in appellant's brief, as required by our rule 24, and should, therefore, be disregarded.
Assignment 9 is that the trial court erred in denying appellant's motion for a *588 new trial. Such a ruling is not assignable as error. Fairmount Glass Works v. Cub Fork Coal Co., 287 U.S. 474, 481, 53 S.Ct. 252, 77 L.Ed. 439.
Assignment 10 is that the trial court erred in denying appellant's motion to amend the judgment by disallowing interest on $14,527.65 thereof from October 4, 1932. Appellant's answer admitted that it owed appellee $14,527.65, but denied that it owed anything more. This amount, plus 1 per cent. thereof as clerk's fees (28 U.S.C.A. § 555), was deposited by appellant in the registry of the District Court on October 4, 1932, and thereafter "remained in the registry of said court, subject to the order of * * * [appellee] and subject to the right of * * * [appellee] to withdraw and receive said sum at any time," but appellant did not deposit or tender to appellee the other $15,000 which, it is now established, appellant owed appellee. In depositing the $14,527.65, appellant did not stipulate, or offer to stipulate, that appellee might accept this amount without prejudice to its right to demand the other $15,000. It was apparently intended that the smaller sum, if accepted at all, was to be in full settlement of appellee's claim. Having tendered less than was due, appellant cannot be relieved from paying interest on the amount tendered. Lilienthal v. McCormick (C.C.A.9) 117 F. 89, 96. Appellant's motion was properly denied.
Judgment affirmed.
NOTES
[*] Rehearing denied Feb. 23, 1937.
|
76 F.3d 383
NOTICE: Eighth Circuit Rule 28A(k) governs citation of unpublished opinions and provides that they are not precedent and generally should not be cited unless relevant to establishing the doctrines of res judicata, collateral estoppel, the law of the case, or if the opinion has persuasive value on a material issue and no published opinion would serve as well.Sabino ZUNIGA-LOPEZ, Petitioner,v.IMMIGRATION AND NATURALIZATION SERVICE, Respondent.
No. 95-2251.United States Court of Appeals, Eighth Circuit.
Submitted: February 6, 1996.Filed: February 9, 1996.
Before WOLLMAN, LOKEN, and HANSEN, Circuit Judges.
PER CURIAM.
1
Sabino Zuniga-Lopez filed this petition for review of a Board of Immigration Appeals (BIA) deportation order. We deny the petition.
2
Zuniga-Lopez, a Mexican citizen, obtained legal permanent resident status in the United States in September 1990. In November 1993, the Immigration and Naturalization Service issued Zuniga-Lopez an order to show cause why he should not be deported pursuant to Section 241(a)(2)(C) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1251(a)(2)(C) (concerning firearms convictions), on the basis of his state conviction for carrying weapons. An immigration judge ordered Zuniga-Lopez deported, concluding that he was deportable because he was convicted of a crime which constituted a firearms offense. The BIA rejected Zuniga-Lopez's appeal from the deportation order.
3
We review for abuse of discretion BIA denials of claims for relief from deportation. Immigration and Naturalization Serv. v. Doherty, 502 U.S. 314, 323-24 (1992). The BIA did not abuse its discretion in concluding that Zuniga-Lopez's conviction record provided clear, unequivocal, and convincing evidence of his deportability for a firearms offense under section 241(a)(2)(C). See 8 U.S.C. § 1251(a)(2)(C); Torabpour v. INS, 694 F.2d 1119, 1122 (8th Cir.1982) (BIA findings of fact conclusive if supported by reasonable, substantial, and probative evidence).
4
The BIA also did not abuse its discretion in determining that Zuniga-Lopez did not qualify for suspension of deportation under section 244(a)(2) of the INA, because he failed to meet the statutory requirement of ten years post-offense physical presence, having pleaded guilty to committing the firearms offense in May 1993. See 8 U.S.C. § 1254(a)(2). Nor did the BIA abuse its discretion in refusing Zuniga-Lopez an adjustment of status pursuant to section 245(a) of the INA, because he produced no evidence of the required adjustment application. See 8 U.S.C. § 1255(a)(1); Perwolf v. INS, 741 F.2d 1109, 1111 (8th Cir.1984). We will not consider new evidence, as our consideration of a petition for review is limited to the administrative record and findings of fact. See White v. INS, 6 F.3d 1312, 1315 (8th Cir.1993), cert. denied, 114 S.Ct. 2162 (1994).
5
Finally, we see no abuse of discretion in the BIA's denial of a section 212(c) waiver, because Zuniga-Lopez failed to establish the seven years of lawful domicile required by the INA, having not shown (or asserted) that he had lawful status before he became a permanent resident in 1990. See 8 U.S.C. § 1182(c); Raya-Ledesma v. INS, 55 F.3d 418, 419-20 (9th Cir.1994) (plaintiff not eligible for § 212(c) waiver of deportation because not lawful permanent resident for seven years).
6
Accordingly, Zuniga-Lopez's petition for review is denied.
|
209 F.Supp. 762 (1962)
UNITED STATES of America
v.
Walter David TATE.
Crim. A. No. 1324.
United States District Court D. Delaware.
October 22, 1962.
Stanley C. Lowicki, Asst. U. S. Atty., Wilmington, Del., for the United States.
Victor F. Battaglia (of Theisen & Lank), Wilmington, Del., for defendant.
LAYTON, District Judge.
The defendant was tried and convicted of the offense of possessing an altered *763 (sawed-off) shotgun on which the federal tax had not been paid as required by 26 U.S.C. § 5821. After verdict, a timely motion for judgment of acquittal was made upon the ground that conviction was based on evidence obtained as the result of an illegal search and seizure contrary to the provisions of the Fourth Amendment to the federal Constitution.[1]
The facts are these. A Delaware State Highway Trooper on routine patrol observed defendant speeding along the highway at night. The officer overtook defendant after a 100 mile an hour chase, arrested him for speeding, and informed him that he would not be permitted to drive his own car to the police station. This decision apparently infuriated defendant, who offered resistance, and the trooper was forced to subdue him physically which he did by handcuffing him, placing him on the front seat of the police car and shutting the door. The police officer, then feeling perfectly secure,[2] proceeded to search defendant's car. This search was, of course, conducted without a warrant. During the course of this search, the sawed-off shotgun forming the basis for this prosecution was discovered hidden under the front seat.
If it should be determined that it was unreasonable under the circumstances to search defendant's auto without a search warrant, the fruits of that search should have been excluded as evidence at the trial,[3] and the conviction must consequently fall.
Under certain conditions, a police search may take place without a warrant and still meet the standards of reasonableness imposed by the Fourth Amendment.[4]*764 One such circumstance is a search incident to a lawful arrest.
"The right without a search warrant contemporaneously to search persons lawfully arrested while committing crime and to search the place where the arrest is made in order to find and seize things connected with the crime as its fruits or as the means by which it was committed, as well as weapons and other things to effect an escape from custody, is not to be doubted." Agnello v. United States, 269 U.S. 20, 30, 46 S.Ct. 4, 70 L.Ed. 145 (1925).
The question presented here is the permissible extent and scope of a search, incident to a concededly lawful arrest, for the fruits of crime, the means of committing crime, or the weapons for possible escape from custody. The judicial guidelines are by no means clear. Indeed, the Supreme Court, speaking through Justice Frankfurter, said:
"We take as a starting point the cases in this Court dealing with the extent of the search which may properly be made without a warrant following a lawful arrest for crime. The several cases on this subject in this Court cannot be satisfactorily reconciled. This problem has, as is well-known, provoked strong and fluctuating differences of view on the Court. This is not the occasion to attempt to reconcile all the decisions, or to re-examine them. Compare Marron v. United States, 275 U.S. 192 [48 S.Ct. 74, 72 L.Ed. 231], with Go-Bart [Importing] Co. v. United States, 282 U.S. 344 [51 S.Ct. 153, 75 L.Ed. 374], and United States v. Lefkowitz, 285 U.S. 452 [52 S.Ct. 420, 76 L.Ed. 877]; compare Go-Bart, supra, and Lefkowitz, supra, with Harris v. United States, 331 U. S. 145 [67 S.Ct. 1098, 91 L.Ed. 1399], and United States v. Rabinowitz, 339 U.S. 56 [70 S.Ct. 430, 94 L.Ed. 653]; compare also Harris, supra, with Trupiano v. United States, 334 U.S. 699 [68 S.Ct. 1229, 92 L.Ed. 1663], and Trupiano with Rabinowitz, supra (overruling Trupiano). Of these cases, Harris and Rabinowitz set by far the most permissive limits upon searches incidental to lawful arrests." Abel v. United States, 362 U.S. 217, 80 S. Ct. 683, 4 L.Ed.2d 668 (1960).
In the Harris case, the defendant was lawfully arrested for mail fraud in the living-room of his four-room apartment. Harris was handcuffed and the officers, without a warrant, searched his entire apartment for two cancelled checks, the means by which the mail fraud was thought to have been accomplished. After five hours, an envelope containing Harris' personal papers was found in his bedroom bureau. This envelope contained altered draft cards and formed the basis of a conviction under the Selective Service Act. The Supreme Court held that a search which extends to areas under the "immediate control" of the person arrested is reasonable and thus constitutional. Harris v. United States, supra, 331 U.S. at 151, 67 S.Ct. 1098, 91 L.Ed. 1399. The entire apartment was considered to be under Harris' immediate control, even though he was confined to one room. Moreover, it was not considered significant that the draft cards which were seized were not related to the crime for which Harris was arrested or to the purpose of the search. Id. at 154, 67 S.Ct. 1098, 91 L.Ed. 1399.
"Immediate control" was, likewise, the constitutional test applied in Rabinowitz, supra, which upheld a search, without a warrant, of a one-room business office.
At first blush it would appear that Harris and Rabinowitz constitute authority to sustain the search that took place in the instant case. "Immediate *765 control" must mean some less degree of dominion than actual physical control of the object seized, because the person arrested in Harris was handcuffed in the living-room while his bedroom was searched. Nor can it be said that the defendant in the instant case had any less constructive control over his auto than Harris had over his bedroom. Furthermore, the five hour, five-man search of the defendant's living quarters upheld in Harris was certainly more offensive to the right of privacy embedded in the Fourth Amendment than was the rapid search of the defendant's auto here. However, there is a common thread running through all cases upholding a search without a warrant which is lacking here. The searcher must have in mind some reasonably specific thing he is looking for and reasonable grounds to believe it is in the place being searched.[5] General exploratory searches are not tolerated. Go-Bart Importing Co. v. United States, 282 U.S. 344, 357, 51 S.Ct. 153, 75 L. Ed. 374 (1931).
The record in this case lacks any indication of what the trooper was looking for in Tate's automobile. Quite obviously, he could not have been looking for the fruits of the crime for which Tate was arrested there are no fruits of speeding. He certainly could not have been searching under the car seat for the means by which the crime was committed the whole automobile itself was the means. He was not looking for forfeited property such as a sawed-off shotgun, which he had no means of knowing about, and the mere fact that such property unexpectedly turned up does not render the search valid. Byars v. United States, 273 U.S. 28, 29, 47 S.Ct. 248, 71 L.Ed. 520 (1927). There was no general police alarm being broadcast for a person of defendant's description, nor did the trooper upon arresting defendant recognize him as a person with a long criminal record.
The government contends that the search can be justified as a search for weapons of escape from custody. This argument is difficult to accept either factually or legally. There is no direct testimony in the record that the trooper was looking for a weapon, either legal or illegal, in Tate's auto, or that he even suspected the existence of one. Moreover, the surrounding circumstances do not lead me to infer that such was the purpose of the search. The trooper testified that he handcuffed and placed the defendant in the patrol car for his own (the trooper's) protection. Once this was done, he was positive he could not escape and get at any weapon or weapons concealed in his own automobile.[6] I can only conclude, therefore, that this search was for the purpose of a general exploration for whatever might turn up.
While it cannot be denied that a search for weapons which may be used to assault the arresting officer or to effect an escape may be necessary in many or most instances, and conceding that great deference should be paid to an officer's decision that a search for weapons is necessary, nevertheless, to consider all searches for weapons incidental to an arrest as reasonable per se would permit wholesale fishing expeditions whenever a legal arrest is made. Without drawing the legal limit of a search for weapons contemporaneous with an arrest, I hold that the facts of this case render the search unreasonable and unconstitutional, since the reasons supporting this exemption from obtaining a warrant seem to have been totally lacking. This is not to say, however, that the officer in question, not trained in the law, should necessarily be criticized for doing his duty as he saw it. In a close case such as this, it is perhaps better that the arresting *766 officer be overzealous and, in finding a deadly weapon, thus prevent some brutal intended crime such as murder, leaving it to trained prosecuting authorities to determine at leisure whether the facts warrant prosecution for the offense thus uncovered.
Motion for judgment of acquittal granted.
NOTES
[1] "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." U.S.Const., amend. IV.
[2] The trooper's own testimony is particularly positive and enlightening. By Mr. Battaglia:
"Q. I believe you testified that you had completely subdued the defendant?
"A. That is correct.
"Q. You had both hands cuffed?
"A. That is correct.
"Q. Did you then take him back and put him in your vehicle?
"A. That is correct.
"Q. Was there another officer with you at that time?
"A. No, there wasn't.
"Q. Did you connect him in any way with your car so he couldn't get away, or was he just handcuffed?
"A. I placed the defendant in my patrol car and shut the door. This was done to protect me personally. In other words, I would not begin to search that vehicle with him standing behind me even though he is handcuffed because police officers have lost their lives this way.
"Q. Yes.
"A. I placed the defendant in my patrol car, shut the door. Now, then, I began my search of that car. In order for him to get out of the car he has got to open the door. With his hands cuffed behind him, when I hear that door open I can be to that door of the car before he can be out of it.
"Q. Exactly. Let me ask you another question. I believe you had testified that you had decided at this point that it would not be safe to have him drive his vehicle again, had you not?
"A. At this point? Before this.
"Q. Prior to this?
"A. Prior to this time.
"Q. So it was your intention he should not enter that vehicle again, was it not?
"A. It was my intention he was not to drive that vehicle from there because I had fear, of course, that he would attempt to flee from me with the use of that car.
"Q. You had prevented that; you had taken effective steps to prevent that, had you not?
"A. Once I had him handcuffed I was positive he would not get away.
"Q. All right. You placed him under arrest at that time, did you not?
"A. I placed the defendant under arrest immediately after receiving his license and registration on the very first approach." (Emphasis added.)
[3] Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652 (1914).
[4] E. g., in Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925), a search of an automobile, without a warrant, survived constitutional attack where there was probable cause to believe it was carrying contraband alcohol.
[5] Carroll v. United States, supra note 4; Harris v. United States, supra 331 U.S. at 153, 67 S.Ct. 1098, 91 L.Ed. 1399; Brinegar v. United States, 338 U.S. 160, 69 S.Ct. 1302, 93 L.Ed. 1879 (1949); Rabinowitz v. United States, supra 339 U.S. at 62, 70 S.Ct. 430, 94 L.Ed. 653; Abel v. United States, supra 362 U.S. at 237, 80 S.Ct. 683, 4 L.Ed.2d 668.
[6] See the trooper's testimony, supra note 2.
|
[Cite as Keirns-Mollenkopf v. Schroeder, 2012-Ohio-3657.]
COURT OF APPEALS
RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
THE ESTATE OF: JUDGES:
Hon. William B. Hoffman, P.J.
HEATHER KEIRNS-MOLLENKOPF, Hon. Sheila G. Farmer, J.
ET AL. Hon. Julie A. Edwards, J.
Plaintiffs-Appellants
-vs- Case No. 12CA4
RODNEY J. SCHROEDER, ET AL.
Defendants-Appellees OPINION
CHARACTER OF PROCEEDING: Appeal from the Court of Common
Pleas, Case. Nos. 09CV1129 and
10CV1559
JUDGMENT: Reversed and Remanded
DATE OF JUDGMENT: August 10, 2012
APPEARANCES:
For Plaintiffs-Appellants For Defendants-Appellees
G. SCOTT MCBRIDE KENNETH R. BEDDOW
120 North Lane Street 24 West Third Street
Drawer 309 Suite 204
Bucyrus, OH 44820 Mansfield, OH 44902
Richland County, Case No. 12CA4 2
Farmer, J.
{¶1} On November 28, 2008, Rodney Schroeder was driving northbound on
Sturges Avenue in Mansfield, Ohio. His passenger was Heather Keirns-Mollenkopf. In
front of the Schroeder vehicle was a vehicle being operated by appellee, Jack Spreng.
As Mr. Schroeder attempted to pass appellee's vehicle on the left, it collided with
appellee's vehicle. The Schroeder vehicle lost control and hit a utility pole. As a result,
Ms. Keirns-Mollenkopf sustained serious injuries and died.
{¶2} Prior to the accident, both Mr. Schroeder and appellee were served
alcohol at a bar called "The Den" in Mansfield, Ohio.
{¶3} On July 30, 2009, appellant, Tyson Mollenkopf, husband of the deceased
and executor for the estate of Ms. Keirns-Mollenkopf, filed a complaint for negligence
and wrongful death against Mr. Schroeder (Case No. 09CV1129). An amended
complaint was filed on March 17, 2010 to include appellee.
{¶4} On November 23, 2010, appellant, together with his in-laws, Michael and
Melody Keirns, filed a complaint against Peebles Enterprises, Inc. dba Peebles Den,
Joseph Feeney, James Feeney, and David Brenneis (the three owners of The Den),
Ohio Mutual Insurance Group, and MetLife Auto & Home Insurance Agency, claiming
negligence and wrongful death and seeking damages and a declaratory judgment
(Case No. 10CV1559). All of these defendants were subsequently dismissed.
{¶5} On May 3, 2011, appellee filed a motion for summary judgment in Case
No. 09CV1129.
{¶6} On May 26, 2011, the trial court consolidated the two cases.
Richland County, Case No. 12CA4 3
{¶7} By judgment entry filed July 8, 2011, the trial court granted appellee's
motion for summary judgment.
{¶8} On September 28, 2011, appellant dismissed Mr. Schroeder as the claims
against him had been settled.
{¶9} By judgment entry filed December 13, 2011, the trial court indicated that
all claims against all parties have been fully disposed of in the matter.
{¶10} Appellant filed an appeal and this matter is now before this court for
consideration. Assignment of error is as follows:
I
{¶11} "THE TRIAL COURT COMMITTED REVERSIBLE ERROR, ABUSED ITS
DISCRETION AND ITS DECISION WAS AGAINST THE MANIFEST WEIGHT OF THE
EVIDENCE WHICH WAS PREJUDICIAL AGAINST THE PLAINTIFF/APPELLANT
WHEN THE TRIAL COURT GRANTED THE DEFENDANT/APPELLEE'S (JACK
SPRENG'S) MOTION FOR SUMMARY JUDGMENT FINDING THAT JACK SPRENG
WAS NOT NEGLIGENT AND HE DID NOT BREACH THE DUTY OF CARE THAT
PROXIMATELY CAUSED HEATHER KEIRNS MOLLENKOPH'S FATAL INJURIES."
{¶12} At the outset, we will discuss appellee's argument that this is not a timely
appeal because the trial court granted summary judgment on July 8, 2011 and the
appeal was perfected on January 9, 2012. It is appellee's position that the consolidation
of the two cases did not affect the appealability of the July 8, 2011 judgment entry, as
the decision terminated the causes of action against him in the first complaint (Case No.
09CV1129), and the remaining issues were separate and distinct from those causes of
action.
Richland County, Case No. 12CA4 4
{¶13} Pursuant to Loc.R. 7.01 of the Court of Common Pleas of Richland
County, General Division, consolidation merges two cases into one:
{¶14} "A motion for consolidation shall be decided by the judge assigned to the
case having the oldest case number, and if consolidation is granted, the cases shall be
consolidated into the case with the oldest case number under the judge assigned to that
case."
{¶15} We conclude the appeal was timely as the complaint against appellee,
Case No. 09CV1129, was the controlling case number and was not closed with the
granting of the summary judgment decision. As evidenced by the trial court's judgment
entry filed on December 13, 2011, all claims against all parties were not fully disposed
of until said date.
I
{¶16} Appellant claims the trial court erred in granting summary judgment to
appellee as genuine issues of material fact were presented to overcome appellee's
position that he was not negligent. We agree.
{¶17} Summary Judgment motions are to be resolved in light of the dictates of
Civ.R. 56. Said rule was reaffirmed by the Supreme Court of Ohio in State ex rel.
Zimmerman v. Tompkins, 75 Ohio St.3d 447, 448, 1996-Ohio-211:
{¶18} "Civ.R. 56(C) provides that before summary judgment may be granted, it
must be determined that (1) no genuine issue as to any material fact remains to be
litigated, (2) the moving party is entitled to judgment as a matter of law, and (3) it
appears from the evidence that reasonable minds can come to but one conclusion, and
viewing such evidence most strongly in favor of the nonmoving party, that conclusion is
Richland County, Case No. 12CA4 5
adverse to the party against whom the motion for summary judgment is made. State
ex. rel. Parsons v. Fleming (1994), 68 Ohio St.3d 509, 511, 628 N.E.2d 1377, 1379,
citing Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O3d 466, 472,
364 N.E.2d 267, 274."
{¶19} As an appellate court reviewing summary judgment motions, we must
stand in the shoes of the trial court and review summary judgments on the same
standard and evidence as the trial court. Smiddy v. The Wedding Party, Inc. (1987), 30
Ohio St.3d 35.
{¶20} In its judgment entry filed July 8, 2011, the trial court concluded there were
no genuine issues of material fact as to whether appellee had a duty to appellant:
{¶21} "Mr. Spreng had the same duty as other drivers to drive carefully for the
benefit of all users on the road. To prove an action for negligence against him,
however, plaintiff must also show that Mr. Spreng breached that duty of care and that
he directly and proximately caused Ms.Keirns-Mollenkopf's fatal injuries. For the
reasons stated above, the sworn evidence filed with the court is insufficient to create a
dispute of material fact on those issues. It is therefore ordered that summary judgment
is entered for defendant Jack Spreng on plaintiff's complaint."
{¶22} In his motion for summary judgment filed May 3, 2011, appellee argued he
was in his own lane of travel and he did not enter into the path of the speeding
Schroeder vehicle that was attempting to pass him on the left. In support of this
argument, appellee generally cited to his own deposition testimony. In reviewing
appellee's deposition, we find the following specific testimony to support his assertions:
{¶23} "Q. Tell me what happened next, you got in your car or truck?
Richland County, Case No. 12CA4 6
{¶24} "A. Got in my truck and went to the stoplight and it was a red light, and left
the red light and going down Sturges Avenue and I got right - - by the time I got down to
where I live, there was a passing gear that I heard, and I looked through my rearview
mirror and I seen lights flying, I don't know how many, and I now know they were
speeding. And I was getting up on my street to make a left-hand turn, and the car hit
my truck, ripped the mirror off my truck. I jammed the brakes on and threw the truck in
park, and by that time, his truck grabbed my bumper and pulled my truck, and I am
standing on the brake on my truck, and then it broke loose. When it broke loose from
my bumper of my truck, it shot over to the tree where that chair is sitting right there, and
the truck went flying like this to the right, and I mean, it was flying, and the next thing
that I know, he hit the brakes and started like sliding on the road, and next thing that I
knew it was wrapped around the pole.
{¶25} "Q. When you first heard this gear***and you looked in your rearview
mirror, you saw lights?
{¶26} "A. Yes.
{¶27} "Q. Bright lights or describe it for us?
{¶28} "A. Just headlights, it sounded like when you hear a police officer going in
pursuit, that is what the passing gear sounded like. I did not see red lights, and I looked
in my mirror and I was coming up on my street, and turned my signal on, and it took the
mirror off my truck and it was that fast, and I remember like it happened today.
{¶29} "***
{¶30} "Q. Go ahead, take me from this point forward and tell me what happened
next as you were driving?***
Richland County, Case No. 12CA4 7
{¶31} "A. Twenty miles an hour, I drive it every day. When you get down to your
street, I was down to a crawl, when I got here and seen these lights, I turned around
and looked to see if anything was coming in front of me and by the time I had my eyes
in the rearview mirror, he snipped the mirror on the truck." Spreng depo. at 22-23 and
27-28, respectively.
{¶32} Appellee opined that when he first noticed the speeding Schroeder
vehicle, it was twenty feet away. Id. at 26. Appellee stated at the time of the initial
impact, his vehicle was in its own lane of travel and was not across the center line. Id.
at 29.
{¶33} Appellee argues because he was lawfully in his own lane of travel at the
time of the impact, he was not negligent as he owed no extra duty to the speeding
Schroeder vehicle passing him on the left of a double center line. In support, appellee
cites the case of Swoboda v. Brown (1935), 129 Ohio St. 512, paragraph eight of the
syllabus, wherein the Supreme Court of Ohio held, "[o]ne may rightfully assume the
observance of the law and the exercise of ordinary care by others, and action by him in
accordance with such assumption, in the absence of notice or knowledge to the
contrary, is not negligence."
{¶34} In response, appellant argues appellee had a duty to maintain his vehicle
in his own lane of travel and not turn left until he could ascertain that such movement
could be made with safety:
{¶35} "(A) Whenever any roadway has been divided into two or more clearly
marked lanes for traffic, or wherever within municipal corporations traffic is lawfully
Richland County, Case No. 12CA4 8
moving in two or more substantially continuous lines in the same direction, the following
rules apply:
{¶36} "(1) A vehicle or trackless trolley shall be driven, as nearly as is
practicable, entirely within a single lane or line of traffic and shall not be moved from
such lane or line until the driver has first ascertained that such movement can be made
with safety." R.C. 4511.33(A)(1).
{¶37} In support of his arguments, appellant presented the trial testimony of the
investigating officer, Ohio State Highway Patrol Trooper Fred Cook. Trooper Cook
opined through his investigation of the airbag module, the measurements taken at the
crash site, the tire marks, and the location of the debris field, the point of impact was not
in appellee's lane, but was in the left lane for oncoming traffic; therefore, appellee's
vehicle was over the double center line. T. at 927-928, 952, 965-966.
{¶38} Appellant also presented the affidavit of an accident reconstructionist,
William Jackman, filed May 20, 2011. Mr. Jackman opined the following at ¶5:
{¶39} "1. The Spreng F-150 started across the painted centerline about 50 feet
south of the south edge of Walter Avenue.
{¶40} "2. The left corner of the F-150 (Defendant Spreng) was 3 to 4 feet left of
center, into the southbound travel lane of Sturges Avenue when it impacted with the
Schroeder Chevrolet Silverado.
{¶41} "3. With the engagement of the front bumper of the F-150 with the rear
bumper of the Silverado, the dynamics changed. The F-150 was suddenly accelerated
forward while the Silverado was instantly slowed. The Silverado started yawing to the
right as it pivoted about the point of engagement of the momentarily locked bumpers.
Richland County, Case No. 12CA4 9
{¶42} "4. The Silverado continued its yaw to the right as the bumpers
disengaged. Mr. Schroeder steered to the left, in an attempt to regain control of the
Silverado. His efforts were in vain and the pickup side-slid into a utility pole.
{¶43} "5. The initial impact between the two pickups, causing their bumpers to
engage and the subsequent impact with the utility pole by the Silverado, would not have
occurred but for the actions of Mr. Spreng. He started to make his intended left turn into
Walter when his vehicle was too far south of the intersection to properly execute the
turn.
{¶44} "6. Given Mr. Spreng's stated belief that the overtaking vehicle was a
police car, his proper course of action would have been to pull over to his right and stop
along the east curb-line of Sturges Avenue, yielding the right-of-way. Had he done that,
the Schroeder vehicle would have been able to pass on his left with some eight (8) feet,
plus or minus, separating the two pickup trucks."
{¶45} It is appellant's position that these observations and opinions overcome
appellee's assertion that he was proceeding lawfully in his own lane of travel. Appellant
argues appellee's action of a premature left hand turn was enough to establish that it
was one of the proximate causes of the accident.
{¶46} The primary consideration is whether appellee breached a duty to the
Schroeder vehicle by executing the left hand turn. Despite Mr. Jackman's assertion that
appellee could not have properly executed the turn as he was "too far south of the
intersection," this is not determinative of an affirmative duty. The true issue of fact in
determining whether a duty was breached is whether appellee had notice that he was
being passed and disregarding that notice, proceeded left of center. In construing the
Richland County, Case No. 12CA4 10
evidence in favor of appellant, we find sufficient issues of material fact have been raised
on this narrow issue.
{¶47} The sole assignment of error is granted.
{¶48} The judgment of the Court of Common Pleas of Richland County, Ohio is
hereby reversed, and the matter is remanded to said court for further proceedings.
By Farmer, J.
Hoffman, P.J. and
Edwards, J. concur.
_s/ Sheila G. Farmer______________
_s / William B. Hoffman___________
_s/ Julie A. Edwards_____________
JUDGES
SGF/sg 723
[Cite as Keirns-Mollenkopf v. Schroeder, 2012-Ohio-3657.]
IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
THE ESTATE OF: :
:
HEATHER KEIRNS-MOLLENKOPF, :
ET AL. :
:
Plaintiffs-Appellants :
:
-vs- : JUDGMENT ENTRY
:
RODNEY J. SCHROEDER, ET AL. :
:
Defendants-Appellees : CASE NO. 12CA4
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Richland County, Ohio is reversed, and the
matter is remanded to said court for further proceedings consistent with this opinion.
Costs to appellee Jack Spreng.
_s/ Sheila G. Farmer______________
_s / William B. Hoffman___________
_s/ Julie A. Edwards_____________
JUDGES
|
124 Ariz. 29 (1979)
601 P.2d 1065
Ralph F. BRANDT and Zona D. Brandt, his wife, Plaintiffs-Appellees,
v.
CITY OF YUMA, a municipal corporation, Defendant-Appellant.
No. 1 CA-CIV 4259.
Court of Appeals of Arizona, Division 1, Department C.
September 11, 1979.
Rehearing Denied October 19, 1979.
Review Denied October 30, 1979.
*30 Maureen R. George, City Atty. and Gust, Rosenfeld, Divelbess & Henderson, Yuma by Fred H. Rosenfeld and Joe R. Purcell, Phoenix, for defendant-appellant.
Ralph F. Brandt, Yuma, for plaintiffs-appellees.
OPINION
EUBANK, Presiding Judge.
This appeal is from a summary judgment entered in a quiet title action commenced by appellees against appellant to settle a dispute between them concerning a parcel of land located in the City of Yuma. The controversy arose as follows:
Appellees acquired apparent title to the parcel of land pursuant to A.R.S. §§ 42-455 to 458, by a Yuma County Treasurer's deed dated July 16, 1974, which was issued because of nonpayment of 1967 general taxes. The appellees had previously acquired a certificate of purchase of this property and had waited the five years prescribed by A.R.S. § 42-455. They then applied for and received the treasurer's deed because no redemption had been made.
At the time of execution and delivery of the treasurer's deed, appellant City claimed three special assessment "liens" by virtue of three public sales of the parcel for nonpayment of the special assessments held pursuant to A.R.S. § 9-700. These assessments became delinquent, and the City's interest in the premises arose at those times. There is no indication in the record that any notice was given to the City concerning appellees' application for the treasurer's deed, other than the constructive notice by publication referred to in the deed.
In the trial court, appellees moved for summary judgment, relying on several older Arizona cases, cited infra, which hold that a general tax lien is superior to one for special assessments. In its memorandum in response to the motion for summary judgment, appellant objected to the granting of the motion on the basis of insufficient notice. The trial court, nevertheless, granted summary judgment for the appellees, declaring that they were the owners of the premises free and clear of any claim of appellant City as of the date of the treasurer's deed.
On appeal, appellees rely primarily on the cases of Allied American Investment Co. v. Pettit, 65 Ariz. 283, 179 P.2d 437 (1947) and Town of Holbrook v. Koury, 50 Ariz. 526, 73 P.2d 698 (1937). Allied American is still good law, but its only aid to appellees is its dicta that "a valid sale for taxes clothes the grantee with a new and complete title under an independent grant from the sovereign ... free of ... all other liens and encumbrances upon the property, except liens and encumbrances held by the state." (Emphasis added.) 65 Ariz. at 286, 179 P.2d at 438. In that case the sale was held invalid, so the foregoing statement was unnecessary to the decision. It merely declares that a valid tax sale has the specified effect.
The Koury case did not consider the necessity of notice to the City, because the City was served and appeared. Koury was also decided before Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950); Schroeder v. City of New York, 371 U.S. 208, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962), and Laz v. Southwestern Land Co., 97 Ariz. 69, 397 P.2d 52 (1964), which in our opinion require reasonable notice to any person having an interest in the land at the time that the application for a treasurer's deed is made. The Koury case is therefore not controlling here.[1]
*31 Appellant attempts to avoid the above and other cases cited by appellees by suggesting that they be reconsidered, but that is not the function of this Court. Rather, it is the function of the Supreme Court or the Legislature. In any event, appellant's second argument, concerning the requirement of notice, is dispositive of this case.
Under the statutory tax sales scheme, when the time is ripe to issue the treasurer's deed, notice must be given to the owner of the premises by registered mail, return receipt requested, that a treasurer's deed has been applied for. A.R.S. § 42-456. Beyond this narrow statutory requirement, due process requires that any person having a substantial interest in the property which might be adversely affected by the issuance of the deed, and whose name and address are known or easily obtainable, be given actual notice (as opposed to mere published notice) of the proposed action. Schroeder v. City of New York, supra; Mullane v. Central Hanover Bank & Trust Co., supra; Laz v. Southwestern Land Co., supra.
In Mason v. Wilson, 116 Ariz. 255, 568 P.2d 1153 (App. 1977), we said in a somewhat analogous situation:
Whether notice was required to be given in spite of the statute is a matter of constitutional law. The U.S. Supreme Court has held that notice and opportunity to be heard are fundamental requisites of due process. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950). The general rule that emerges from Mullane is that notice by publication is not enough with respect to a person whose name and address are known or very easily ascertainable and whose legally protected interests are directly affected by the proceedings in question.... Appellants, ... by virtue of their respective interests in the property were directly affected by the proceedings and should have received actual notice. Laz v. Southwestern Land Company, 97 Ariz. 69, 397 P.2d 52 (1964).
116 Ariz. at 257-58, 568 P.2d at 1155-56.
The City of Yuma had an interest in the property sold by the treasurer's deed, either as technical "owner" thereof because the property had been "struck off" to it under the special assessment statute, A.R.S. § 9-700, or as a special assessment lienholder, in which capacity it occupies a position similar to that of a mortgagee. Maricopa County v. City of Phoenix, 55 Ariz. 62, 98 P.2d 469 (1940). In Laz v. Southwestern Land Co., supra, our Supreme Court held that a mortgagee or other party having an interest in the land which is recorded with the County Recorder is entitled to at least mailed notice of any proposed adverse action. We believe this rule extends to a city having a recorded special assessment sale in the office of the Superintendent of Streets. A.R.S. § 9-686(H).[2] In any event, the City had a substantial interest in the land, which was a matter of public record, entitling it to notice of the application for the treasurer's deed. When a party entitled to notice is not given the required notice, a treasurer's deed issued thereafter is invalid as to them. Olsen v. Goss, 26 Ariz. App. 172, 547 P.2d 24 (1976); Johnson v. Mock, 19 Ariz. App. 283, 506 P.2d 1068 (1973).
The record before us does not clearly indicate whether notice, other than by publication, was given to the appellant City. However, in its memorandum in opposition to the appellees' motion for summary judgment, appellant raised the issue of lack of sufficient notice, and appellees did not file any affidavit or other type of evidence establishing that the required notice was in fact given. In our opinion, appellant's memorandum therefore raised a genuine issue *32 as to a material fact concerning the sufficiency of the notice that it received. This issue could not properly be resolved on the basis of the record before the trial court. Appellees were therefore not entitled to judgment as a matter of law, and the granting of the summary judgment was error. Mason v. Wilson, supra.
The summary judgment granted by the trial court is therefore reversed, and the case is remanded for further proceedings not inconsistent with this decision.
HAIRE and WREN, JJ., concur.
NOTES
[1] As a matter of interest for the future, we note that Ch. 91, § 1, Laws 1978, changed the priority previously given to general taxes over special assessments to put them both on an equal footing as co-equal first liens. See A.R.S. § 9-700 as amended.
[2] A.R.S. § 9-686(H) provides:
The warrant and assessment shall be recorded in the office of the superintendent and one diagram shall be there filed. When so recorded, the several amounts assessed shall be a lien upon the lots assessed for two years thereafter, and such recording shall be notice to all persons interested of the contents of the record.
|
J-S13037-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
JOSEPH M. CASTRO
Appellant No. 1521 WDA 2014
Appeal from the PCRA Order entered July 9, 2014
In the Court of Common Pleas of Blair County
Criminal Division at Nos: CP-07-CR-0001585-2012;
CP-07-CR-0001594-2012
BEFORE: BENDER, P.J.E., MUNDY, and STABILE, JJ.
MEMORANDUM BY STABILE, J.: FILED JUNE 15, 2015
Appellant, Joseph M. Castro, appeals from the July 9, 2014 order
entered in the Court of Common Pleas of Blair County, denying his petition
for collateral relief filed pursuant to the Post Conviction Relief Act (PCRA), 42
§§ 9541-46. For the reasons that follow, we direct counsel for Appellant to
file directly with this Court either an advocate’s brief or a petition to
withdraw and a no-merit letter complaint with the Turner/Finley line of
cases.1
____________________________________________
1
Commonwealth v. Turner, 544 A.2d 927 (Pa. 1988); Commonwealth
v. Finley, 550 A.2d 213 (Pa. Super. 1988) (en banc). See also
Commonwealth v. Wrecks, 931 A.2d 717 (Pa. Super. 2007).
J-S13037-15
The record reflects that Appellant entered a guilty plea on November
30, 2012 to drug and gun-related charges. In accordance with the plea
agreement, he was sentenced to five to ten years in a State Correctional
Institution. Appellant filed a motion to modify sentence nunc pro tunc on
July 1, 2013. He also filed a PCRA petition alleging ineffectiveness of plea
counsel. By opinion and order entered July 9, 2014, the court denied and
dismissed the motion to modify sentence, explaining it no longer had
jurisdiction over the matter. Trial Court Opinion and Order, 7/9/14, at 3, 4.
The court also denied and dismissed the PCRA petition, noting the testimony
at the June 10, 2014 PCRA hearing did not support Appellant’s claim of
ineffectiveness. Id. at 3.
[T]he credible testimony, backed by Exhibits, revealed that
[Appellant] entered a knowing, voluntary, and intelligent guilty
plea based on negotiations by [plea counsel] that resulted in
[Appellant] receiving a sentence that was less than the District
Attorney wanted him to get. He was statutorily ineligible for
RRRI. [Appellant’s] complaint about [plea counsel] is that he
could not get him a good enough deal; [plea counsel] testified
credibly that he attempted to negotiate a sentence of 3 to 6
years but that the Commonwealth would not agree. The [c]ourt
cannot find any ineffectiveness of counsel based on the record.
Id.
On August 12, 2014, court-appointed counsel filed a petition to
reinstate Appellant’s appeal rights nunc pro tunc from the denial of his PCRA
petition. The motion was granted on August 13, 2014. On September 9,
2014, Appellant filed a timely notice of appeal in forma pauperis.
-2-
J-S13037-15
In the brief filed with this Court by court-appointed counsel, one issue
is identified for our review, “Whether the Trial Court erred in dismissing the
Appellant’s current PCRA Petition.” Appellant’s Brief at 2. Following the
statement of facts, counsel provided a summary of the argument that reads
simply, “Appellant maintains that the trial court erred in dismissing his
Petition and his Motion.” Id. at 3. In the argument section that follows,
counsel presents case law regarding PCRA claims of ineffectiveness generally
and, in particular, with respect to entry of guilty pleas. Id. Rather than
develop any argument relating to—or even referring to—Appellant’s case,
counsel simply jumps to the conclusion section of the brief, stating, “After a
review of the record, including the discovery relative to the underlying
charges, and after written consultations with Appellant, and after a review of
the Guilty Plea Hearing transcript and the hearing held on June 10, 2014,
the undersigned avers that this appeal is frivolous.” Id. at 4.
When counsel is appointed in PCRA proceedings, “the appointment of
counsel shall be effective throughout the post-conviction collateral
proceedings, including any appeal from disposition of the petition for post-
conviction collateral relief.” Pa.R.Crim.P. 904(F)(2); see also
Commonwealth v. Robinson, 970 A.2d 455, 457 (Pa. Super. 2009) (en
banc) (“[A] criminal defendant has a right to representation of counsel for
purposes of litigating a first PCRA petition through the entire appellate
process.”). However, “[w]hen, in the exercise of his professional judgment,
-3-
J-S13037-15
counsel determines that the issues raised under the [PCRA] are meritless,
and when the [PCRA] court concurs, counsel will be permitted to withdraw
and the petitioner may proceed pro se, or by privately retained counsel, or
not at all.” Turner, 544 A.2d at 928-29 (Pa. 1988) (addressing withdrawal
of counsel under the Post Conviction Hearing Act, precursor to the PCRA).
The issue of a PCRA litigant’s right to counsel generally arrives in this
Court in the wake of appointed counsel’s request to withdraw from
representation. In the context of a PCRA proceeding, we consider whether
counsel has followed the necessary steps to withdraw under the
Turner/Finley line of cases.
The Turner/Finley decisions provide the manner for post-
conviction counsel to withdraw from representation. The
holdings of those cases mandate an independent review of the
record by competent counsel before a PCRA court or appellate
court can authorize an attorney's withdrawal. The necessary
independent review requires counsel to file a “no-merit” letter
detailing the nature and extent of his review and list each issue
the petitioner wishes to have examined, explaining why those
issues are meritless. The PCRA court, or an appellate court if the
no-merit letter is filed before it, see Turner, supra, then must
conduct its own independent evaluation of the record and agree
with counsel that the petition is without merit. See
[Commonwealth v. Pitts, 981 A.2d 875, 876 n.1 (Pa. 2009)].
Commonwealth v. Rykard, 55 A.3d 1177, 1184 (Pa. Super. 2012).2
____________________________________________
2
We note counsel’s conclusory statement that this “appeal is frivolous.”
Appellant’s Brief at 5. As this Court recognized in Wrecks, “Anders counsel
is not permitted to withdraw unless the appeal is wholly frivolous, but
Turner/Finley counsel is permitted to do so if the case lacks merit, even if
(Footnote Continued Next Page)
-4-
J-S13037-15
Recognizing Appellant is entitled to representation throughout the
appeal from denial of his first PCRA petition, we conclude that the brief filed
by counsel does not constitute an advocate’s brief nor does it satisfy the
requirements for withdrawing from representation in accord with the
mandates of Turner/Finley. Therefore, we direct that, within 30 days of
the date of this Memorandum, counsel of record shall file directly with this
Court either a brief advancing the issue raised by Appellant or a petition to
withdraw and a no-merit letter compliant with Turner/Finley.3 The
Commonwealth will then have 30 days to file a responsive brief.
So ordered.
_______________________
(Footnote Continued)
it is not so anemic as to be deemed wholly frivolous.” Wrecks, 931 A.2d at
722.
3
See Commonwealth v. Brown, 836 A.2d 997, 999 n. 2 (Pa. Super.
2003) (quoting Commonwealth v. Quail, 729 A.2d 571, 573 (Pa. Super.
1999) (outlining options to ensure first-time PCRA petitioner is afforded
representation through the entire appellate process)).
-5-
|
192 So.2d 718 (1966)
Elma Still SHARP et al.
v.
ELLIOTSVILLE CUMBERLAND PRESBYTERIAN CHURCH.
7 Div. 737.
Supreme Court of Alabama.
December 8, 1966.
Coleman & Hancock, Birmingham, for appellants.
Karl C. Harrison, Columbiana, for appellee.
*719 COLEMAN, Justice.
Complainants appeal from a decree establishing a disputed boundary line as claimed by respondent in its cross bill.
Appellants have made eight assignments of error. The argument section of appellants' brief, including certificate of service, covers only five pages. No assignment is referred to in argument by number or substance. In the first paragraph of argument, appellants do refer to appellee's cross-bill and appellants' demurrer thereto, and we will take this first paragraph as intended to be an argument in support of assignment 1 which recites:
"1. The court erred in overruling the complainants' demurrer to the respondents and cross-complainants' cross bill (R. 12)."
On page 12 of the transcript, the only entry which purports to be, or to have reference to, any ruling on a demurrer recites as follows:
"6-25-65: Demurrers overruled by A. L. Hardegree, Judge."
Only a formal adjudication by the court will support an appeal or assignment of error. Cooper v. Mann, 269 Ala. 505, 114 So.2d 267; Birmingham Railway & Electric Co. v. Baker, 126 Ala. 135, 28 So. 87. When judged by the standards set out in the cases cited and the authorities referred to therein, the quoted entry from page 12 does not show a formal adjudication on the demurrer, and, therefore, assignment 1 is not sustained by the record and shows no ground for reversal.
The remainder of appellants' argument appears to be in support of assignment 8 and other assignments which assert the same error that is asserted in assignment 8, which recites:
"8. The court erred in entering a final decree in favor of respondents and cross-complainants and against the complainants in that there is no evidence to support said final decree (R 203-204)."
Appellants say in argument: "There is no evidence of any nature to substantiate the decree in this aspect"; and appellants "respectfully request that said decree be set aside and a boundary line decreed between appellants and appellees' property, based upon the record title and survey as alleged in the complainants' bill of complaint."
Assignment 8 is an assignment of "the insufficiency of the evidence to sustain the verdict or finding in fact or law." When such an assignment is made, then the statement of facts "shall contain a condensed recital of the evidence given by each witness in narrative form bearing on the points in issue so as to fully present the substance of the testimony of the witness clearly and concisely." Supreme Court Rule 9, Appendix, Title 7, 1958 Recompilation of Code 1940; 261 Ala. XXII.
In the instant case, the evidence covers one hundred and eighty-seven transcript pages. Eighteen witnesses testified. Appellants have mentioned in their brief the names of all eighteen witnesses, but it is not clear that appellants have set out in narrative form the entire, pertinent testimony of all the witnesses. The entire statement of facts covers not more than seven pages of appellants' brief.
We note the following excerpt from the statement of the testimony in appellants' brief:
"Mr. L. C. Walker, testified for appellees that he knew the property for 70 years and that the rail fence and big pine tree was the boundary line between the property. [T-94] and he had helped erect the wire fence later [T-97] but later said he put in the wire fence in 1915 [T-98, 99] and one brick column was on the corner [T-99].
"Mr. Cecil Ziederhook testified for appellees that the old rail fence was replaced by a wife fence and constituted the boundary as claimed by appellees. He further testified Mr. Young surveyed where the *720 first line was [T-111] and he helped him start the survey [T-112].
"Mr. Jimmy Roy, surveyor, testified for appellees that his drawing, not a survey, made the basis of appellees' contended line; Respondent's Exhibit 6B, [T-127], was not based on any deed, government line or corner [T-126]. Appellant notes here that this is the same description used by the court in its decree establishing the boundary line [T-203; 204].
"Mr. Tom Larrey added no difference in testimony than previously given and Mr. E. C. Acton testified for appellees, a wire fence was the boundary line and was nailed to a pine tree. Mrs. Justina Fulton Weaver testified for appellees that the rail fence ran from the pine tree to the road [T-142]. Mr. Robert Butler, testified for appellees, that the rail fence and wire fence was the boundary between appellants' and appellees' property [T-150]. Lavada Harper testified in substance similar to the other testimony of appellees * * *."
The foregoing quotation from appellants' brief is their entire narrative statement of the testimony of eight witnesses which covers eighty pages of the transcript.
The court decreed that the true line is determined by beginning in the center of a marble or limestone marker and running specified courses and distances
"* * * to a point where an old existing fence intersects said point and said point being the point of beginning of the line herein described between the Elliotsville Church property and the Still Estate; thence easterly along the said old existing fence a distance of 269.0 feet, more or less, to a big pine tree, recognized as being the corner of the church lot, being at the northeast corner of the Church lot. Said line is lying in the SW ¼ of NW ¼, Section 14, Township 21 South, Range 3 West, Shelby County, Alabama. * * *"
We are of opinion that we must affirm the decree for one or the other of two reasons. If appellants have not fully presented the substance of the pertinent testimony of all witnesses clearly and concisely, then appellants have not complied with Rule 9 and
"* * * By such noncompliance, appellant waived the assignments going to the insufficiency of the evidence to support the decree. Limbaugh v. Comer, 265 Ala. 202, 90 So.2d 246; Case v. Ward, 276 Ala. 242, 160 So.2d 859; Standard Oil Co. v. Johnson, 276 Ala. 578, 165 So.2d 361; Evergreen Heading Co. v. Skipper, 276 Ala. 623, 165 So.2d 705." Alabama Farm Bureau Mutual Casualty Ins. Co. v. Crestman, 277 Ala. 410, 411, 171 So.2d 119.
If, however, appellants have set out all pertinent evidence, then the statement which we have quoted from appellants' brief shows that there is evidence to support the court's finding that the true line is the line of the old fence. There may be evidence to the contrary, but it seems to us that the statement of facts in appellants' brief shows substantial evidence to support the decree.
The well established rule by which this court is to be guided in the instant case is that the finding of fact by the trial court will not here be disturbed unless we are persuaded that it is plainly and palpably wrong. Ex parte State ex rel. Grace, 224 Ala. 273, 139 So. 288.
This court will not disturb a decree of the trial court, where the witnesses testify orally before the court, unless we are satisfied that the decree is palpably wrong. Hale v. Hale, 259 Ala. 666, 68 So.2d 63.
Under the rule, the instant decree is due to be and is affirmed.
Affirmed.
LIVINGSTON, C. J., and LAWSON and GOODWYN, JJ., concur.
|
796 F.Supp. 872 (1992)
GLAXO INC. and Glaxo Group Ltd., Plaintiffs,
v.
GENPHARM PHARMACEUTICALS, INC., Defendant.
No. 91-222-CIV-5-BO.
United States District Court, E.D. North Carolina, Raleigh Division.
June 19, 1992.
Joseph W. Eason, Moore & Van Allen, Raleigh, N.C., for plaintiffs.
Robert W. Spearman, Stephen D. Coggins, Parker, Poe, Adams & Bernstein, Raleigh, N.C., for defendant.
ORDER
TERRENCE WILLIAM BOYLE, District Judge.
This matter is before the court on the following motions: (1) Glaxo's appeal of a *873 magistrate's order barring Glaxo's in-house patent counsel from reviewing confidential Genpharm documents obtained through discovery; (2) Genpharm's motion to dismiss for lack of personal jurisdiction, or in the alternative, to transfer to the District of Maryland; and (3) Glaxo's motion to consolidate this case with the case of Glaxo, Inc., et al. v. Novapharm Ltd., No. 91-759-CIV-5-BO (E.D.N.C.), also pending before this court.
For the reasons set forth below, the magistrate's discovery order is reversed, the motion to transfer to the District of Maryland is granted, and the motion to consolidate is denied as moot.
Background of the Case
This is a patent infringement action brought pursuant to 35 U.S.C. § 271(e)(2)(A), involving the widely-used anti-ulcer drug ranitidine hydrochloride, more popularly known by its tradename Zantac.[1]
Plaintiff Glaxo Group, Ltd., a United Kingdom corporation with its principal place of business in London, England, owns two patents on ranitidine hydrochloride. The first patent, U.S. Patent No. 4,128,658 (the '658 patent), expires on December 5, 1995, and is not at issue in this lawsuit. The second patent, U.S. Patent No. 4,521,431 (the '431 patent), the subject of this infringement action, expires on June 4, 2002.
Plaintiff Glaxo, Inc., a North Carolina corporation with its principal place of business in Zebulon, North Carolina, is a licensee of the '431 patent and the sole marketer of Zantac in the United States. The company, in fact, is the only holder of an FDA permit, known as an approved New Drug Application, to sell the drug in this country.[2]
Defendant Genpharm Pharmaceuticals, Inc., a Canadian corporation with its principal place of business in Ontario, Canada, seeks to market a generic version of Zantac as soon as the '658 patent expires in December 1995, in the belief that Glaxo's '431 patent is invalid. Accordingly, on February 4, 1991, pursuant to § 505(j) of the Food, Drug, and Cosmetic Act (the "Act"),[3] Genpharm filed an Abbreviated New Drug Application ("ANDA") with the Food and Drug Administration in Rockville, Maryland, seeking approval to engage in the commercial manufacture, use, or sale of ranitidine hydrochloride in the United States.
As required by the Act, Genpharm provided in its ANDA scientific data designed to show the equivalence of its drug with Glaxo's. In addition, since every ANDA must contain a "certification" concerning the status of patents which may cover the subject drug, see 21 U.S.C. § 355(j)(2)(A)(vii), Genpharm "certified" that Glaxo's '431 patent was invalid.
The Act also required Genpharm to send notice of its certification of invalidity to the patent owner Glaxo Group, Ltd. and to the holder of the FDA-approved New Drug Application for the marketing of ranitidine hydrochloride in the United States Glaxo, Inc. See 21 U.S.C. § 355(j)(2)(B)(i). Therefore, on March 19, 1991, Genpharm mailed the required notice to Glaxo Group and Glaxo, Inc., in the form of a written "Certification of Invalidity of U.S. Patent No. 4,521,431 for Aminoalkyl Furan Derivative." The Certification was received by Glaxo, Inc., in North Carolina on March 25, 1991, and by Glaxo Group in England on March 20, 1991.
In response to situations such as this one, Congress amended Title 35 of the United States Code in 1984 to provide an opportunity for litigating and determining patent issues before FDA approval of the ANDA is granted and marketing by the *874 applicant begins.[4] Under 35 U.S.C. § 271(e)(2)(A), it is a technical act of patent infringement to submit an ANDA seeking FDA approval to manufacture, use, or sell a drug prior to the expiration of a patent claiming this drug. Accordingly, after receiving Genpharm's Certification notice, Glaxo filed this suit against Genpharm on April 8, 1991, claiming infringement of the '431 patent.[5]
Genpharm filed its motion to dismiss for lack of personal jurisdiction on May 24, 1991, and the parties subsequently engaged in discovery concerning jurisdictional issues. During this discovery period, a magistrate denied Glaxo's in-house counsel access to confidential Genpharm documents obtained through discovery.
Conclusions of Law
A. The Magistrate Judge's Discovery Order
In an order dated March 11, 1992, the Honorable Alexander B. Denson, United States Magistrate Judge, denied Mr. Salvatore Conte, Glaxo's in-house patent counsel, access to confidential materials obtained from Genpharm through discovery. The magistrate judge held that the risk of improper use of these materials outweighed Glaxo's need for Mr. Conte's participation, on the grounds that (1) Mr. Conte was both a high level employee and a substantial investor in Glaxo; (2) Glaxo had retained three outside law firms as counsel which could adequately represent its interests; and (3) Genpharm had no in-house counsel. Glaxo appeals this ruling.
The Federal Circuit has held that in patent cases, in-house counsel cannot be barred from confidential materials solely because of their in-house status, as in-house counsel, like retained counsel, are officers of the court and are bound by the Code of Professional Responsibility. U.S. Steel Corporation v. United States, 730 F.2d 1465 (Fed.Cir.1984); see also Matsushita Electrical Industrial Co., Ltd. v. United States, 929 F.2d 1577 (Fed.Cir. 1991). The decisive factor in denying in-house counsel access is whether the in-house counsel is involved in "competitive decisionmaking." U.S. Steel, 730 F.2d at 1468. "Competitive decisionmaking" is defined as:
shorthand for a counsel's activities, association, and relationship with a client that are such as to involve counsel's advice and participation in any or all of the client's decisions (pricing, product design, etc.) made in light of similar or corresponding information about a competitor.
Id. at 1468 n. 3.
In the present case, Mr. Conte, a member of three different bars who has been an in-house patent counsel for over 28 years, attests in two uncontroverted affidavits that he has no involvement in and gives no advice to Glaxo about competitive decisions such as pricing, scientific research, sales or marketing. In addition, he states that he will no longer participate in any matter concerning ranitidine hydrochloride, except for this case or other lawsuits involving the validity or enforcement of Glaxo's ranitidine hydrochloride patents.
Accordingly, the court finds that Mr. Conte is not involved in competitive decisionmaking at Glaxo such that the risk of his using confidential information improperly outweighs his need for access to these materials. The magistrate judge's decision was in error, and is therefore REVERSED.
B. Personal Jurisdiction Over Genpharm
Genpharm moves to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, or in the alternative, seeks transfer of the case to the District of Maryland, contending that it does not have the necessary *875 "minimum contacts" with North Carolina.
The determination of whether personal jurisdiction exists here requires a two-step inquiry. First, since there is no provision within the patent laws authorizing nationwide service of process, the court must look to whether North Carolina's long-arm statute, N.C.Gen.Stat. § 1-75.4, confers jurisdiction. Fed.R.Civ.P. 4(e); Southern Case, Inc. v. Management Recruiters International, Inc., 544 F.Supp. 403, 405 (E.D.N.C.1982). Attention then turns to federal law for an analysis of whether the exercise of jurisdiction would violate due process of law. Id.
At oral argument, plaintiff asserted it was relying on N.C.Gen.Stat. § 1-75.4(1)(d) to invoke the court's jurisdiction over Genpharm. This section of the state long-arm statute allows jurisdiction over a person "engaged in substantial activity [in North Carolina], whether such activity is wholly interstate, intrastate, or otherwise."[6] This provision has been liberally construed by the North Carolina courts to permit the assertion of in personam jurisdiction over foreign corporations to the full extent allowed by due process under the United States Constitution. Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977); Southern Case, 544 F.Supp. at 405. Accordingly, the first step of the court's inquiry collapses into the second, and the court is faced with a single issue: whether the exercise of in personam jurisdiction over Genpharm would comport with the constitutional standards of due process.[7]
For a defendant to be subject to suit in a forum where it is not physically present, due process demands certain "minimum contacts" with the forum such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Specifically, the defendant's conduct and connection with the forum State must be such that "he should reasonably anticipate being haled into court there." World-Wide Volks-wagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). There must be some act by which the defendant "purposefully avails [him]self of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958). To find jurisdiction, the court must be satisfied that "an action of the defendant [is] purposefully directed toward the forum State." Asahi Metal v. Superior Court of California, 480 U.S. 102, 107 S.Ct. 1026, 1032, 94 L.Ed.2d 92 (1987).
Here, Genpharm's contacts with North Carolina are virtually non-existent. Defendant (1) does not regularly transact or solicit business in North Carolina; (2) has no office or agents in this state; (3) is not licensed to do business in North Carolina; (4) has never manufactured, sold, marketed, or distributed anything in North Carolina; (5) has never leased or owned any real property in North Carolina; and (6) has never had a North Carolina bank account, *876 mailing address or telephone number.
In fact, plaintiff points to only a single contact by Genpharm with North Carolina as a basis for jurisdiction, namely, Genpharm's mailing of the notice of certification of invalidity of the '431 patent to Glaxo, Inc., in North Carolina on March 19, 1991.[8]
The court finds that this contact is insufficient to support personal jurisdiction over the defendant. Genpharm's mailing of its certification of invalidity of the '431 patent to Glaxo, Inc., in North Carolina was not a purposeful act directed at North Carolina such that litigation in this forum could have been reasonably foreseen. Genpharm was simply complying with the federal statute, 21 U.S.C. § 355(j)(2)(B)(i), which required that the approved-NDA holder of ranitidine hydrochloride (who in this case is not even the patent owner) be notified; nothing in the statute or case law suggests that the defendant would be subject to an infringement suit wherever the notice to the approved-NDA holder is mailed. Mailing a statutorily-required notice is not akin to soliciting business, introducing products into the forum, or signing and performing a contract within the forum. See, e.g., Medeco Security Locks, Inc. v. Fichet-Bauche, 568 F.Supp. 405 (W.D.Va.1983) (defendant-patentee's mailing of letter to alleged infringer in Virginia pointing out similarities in the parties' products was not sufficient contact with Virginia to subject patentee to declaratory judgment action over the validity of the patent there).
Plaintiffs contend that Genpharm is subject to jurisdiction here because the mailing of the notice of certification was an integral part of the act of patent infringement by the defendant. Citing Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), plaintiffs assert that jurisdiction is justified because this infringement was a "purposeful, tortious activity" directed against Glaxo, Inc., in North Carolina, as Genpharm knew when it filed its ANDA with the FDA that it was threatening "to inflict substantial economic injury upon Glaxo within North Carolina."
The court finds that plaintiffs' reliance on Calder is inapt. Calder involved the intentional publication of a libelous newspaper article in the plaintiff's home state by an out-of-state defendant; here, Glaxo is trying to enforce its rights under the '431 patent, which was "infringed" in Maryland.[9] While it may be argued that Genpharm's ANDA filing has subsequent effects in North Carolina, the filing of the ANDA was not act by which the defendant purposefully availed itself of the privileges of conducting activities within North Carolina. Cf. Whistler Corp. v. Solar Electronics, Inc., 684 F.Supp. 1126 (D.Mass. 1988) (patentee's filing of infringement suit in Illinois against a Massachusetts corporation was not an act which could subject patentee to personal jurisdiction in Massachusetts). It is immaterial, in this context, that Genpharm knew when it filed its ANDA that it would cause apprehension *877 and possibly economic harm in North Carolina, since "the foreseeability of injury in a distant forum is not the touchstone of minimum contacts." Chung v. NANA Development Corp., 783 F.2d 1124, 1128 (4th Cir.1986), cert. denied, 479 U.S. 948, 107 S.Ct. 431, 93 L.Ed.2d 381 (1986).
Accordingly, the court finds that defendant's contacts with North Carolina are not sufficient to give this court personal jurisdiction over the defendant, consistent with the "traditional conception of fair play and substantial justice" embodied in due process.[10]
Plaintiff has the burden of proving jurisdiction by the preponderance of the evidence. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); Haynes v. James H. Carr, Inc., 427 F.2d 700, 704 (4th Cir.1970). This burden has not been met.
Rather than dismiss this case for lack of personal jurisdiction, however, the court finds that it is in the interest of justice to transfer the case to the District of Maryland, as that court will have proper jurisdiction and venue.
The court has the authority to effect this transfer pursuant to 28 U.S.C. 1406(a), as the District of Maryland is a district in which this case "could have been brought." See Goldlawr v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962); Porter v. Groat, 840 F.2d 255 (4th Cir.1988). Genpharm consents to personal jurisdiction in Maryland (where defendant maintains an agent). In addition, the act of infringement took place in Maryland, and many of the documents relevant to this case are stored in Maryland.
Accordingly, defendant's motion to transfer this case to the District of Maryland is GRANTED.
C. Plaintiff's Motion to Consolidate
Since the court has transferred this case to the District of Maryland, plaintiffs' motion to consolidate this case with Glaxo v. Novapharm, 91-759-CIV-5-BO (E.D.N.C.), is DENIED as moot.[11]
SO ORDERED.
NOTES
[1] Zantac is the largest selling drug in the United States.
[2] Glaxo Group, Ltd., and Glaxo, Inc., are closely related affiliates. Glaxo Group is the corporate parent of Glaxo Americas, Inc., of which Glaxo, Inc., is a subsidiary. The two plaintiff corporations will be referred to collectively in this order as "Glaxo."
[3] 21 U.S.C. § 355(j).
[4] See The Drug Price Competition and Patent Term Restoration Act of 1984 (the Waxman-Hatch Act).
[5] The complaint does not specify how Glaxo, Inc., as a mere licensee, has standing to sue for infringement. The court assumes for purposes of this motion that Glaxo Group Ltd. has authorized Glaxo, Inc., in its license to prosecute infringement.
[6] N.C.Gen.Stat. § 1-75.4(4), "Local Injury; Foreign Act," might also apply. This section provides for jurisdiction:
In any action ... claiming injury to person or property within this State arising out of an act or omission outside this State by the defendant, provided in addition that at or about the time of the injury: a. Solicitation or services activities were carried on within this State by or on behalf of the defendant; or b. Products, materials or thing processed, serviced or manufactured by the defendant were used or consumed within this State in the ordinary course of the trade.
Plaintiff, however, has presented no evidence satisfying (a) or (b) (see infra). The court finds that no other section of the long-arm statute is remotely applicable.
[7] Although this is a federal question case governed by the due process clause of the Fifth Amendment, and the North Carolina long-arm statute is to be construed to the limits of due process under the due process clause of the Fourteenth Amendment, the same factors are used under both clauses to determine if the assertion of in personam jurisdiction is constitutional. Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 293-296 (3rd Cir.1985), cert. denied, 474 U.S. 980, 106 S.Ct. 383, 88 L.Ed.2d 336 (1985).
[8] The parties have identified only two other contacts by Genpharm with North Carolina in addition to the mailing of the notice of the certification: (1) on April 16, 1991, Genpharm entered into a six-month contract with a North Carolina laboratory for analytical services concerning a drug unrelated to this case; and (2) in 1989, Genpharm communicated by telephone and once by letter with a North Carolina professor to obtain price information for the performance of services unrelated to this case (the professor was never hired).
Plaintiff makes no argument that these two isolated contacts support in personam jurisdiction. Clearly defendant did not engage in systematic and continuous activity in North Carolina such that its contacts could support jurisdiction with respect to a claim that does not arise from those contacts. See Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).
[9] 35 U.S.C. § 271(e)(2) provides in pertinent part:
It shall be an act of infringement to submit (A) an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act ... for a drug claimed in a patent ... if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug claimed in patent or the use of which is claimed in a patent before the expiration of such patent.
Under the clear language of the statute, Glaxo's '431 patent was "infringed" when Genpharm filed its ANDA with the FDA in Rockville, Maryland, not when it mailed notice to Glaxo, Inc. in North Carolina.
[10] The plaintiff posits an alternative theory upon which a finding of minimum contacts may be established, known as the "national contacts theory." Under this theory, jurisdiction can be determined on the basis of the alien corporation's aggregated contacts with the United States as a whole, regardless of whether the contacts with the state in which the district court sits would be sufficient if considered alone. The theory is based on two rationales: (1) that a federal court can assert nation-wide jurisdiction; and (2) an alien corporation might completely avoid suit in any state where sales in each state make up only a fraction of the nationwide market of the defendant's products.
The Fourth Circuit has never specifically addressed the validity of the national contacts theory. However, the majority of federal courts addressing the issue have held that in federal question cases, there must be a federal rule or statute authorizing nationwide service of process before the national contacts theory can be applied. In Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290 (3rd Cir.1985), cert. denied, 474 U.S. 980, 106 S.Ct. 383, 88 L.Ed.2d 336 (1985), for example, the Third Circuit found the national contacts theory inapplicable in a patent infringement case because there was no authority within the patent laws authorizing nationwide service of process.
The court adopts the reasoning of the Third Circuit in Daetwyler and declines to apply the national contacts theory to this case.
[11] Novapharm has consented to personal jurisdiction in this District and neither Glaxo nor Novapharm wants their lawsuit transferred to Maryland.
|
584 So.2d 141 (1991)
STATE of Florida, Appellant,
v.
Robert REISNER, Appellee.
No. 90-2355.
District Court of Appeal of Florida, Fifth District.
August 8, 1991.
*142 Robert A. Butterworth, Atty. Gen., Tallahassee, Anthony J. Golden and Paula C. Coffman, Asst. Attys. Gen., Daytona Beach, for appellant.
Stuart I. Hyman, of NeJame & Hyman, P.A., Orlando, for appellee.
ON MOTION FOR REHEARING, REHEARING EN BANC AND CERTIFICATION
W. SHARP, Judge.
Appellee moves for clarification and rehearing. Appellant moves for rehearing, rehearing en banc and certification. We deny appellant's motion for rehearing and rehearing en banc, but we grant appellee's motion for clarification. Accordingly, we withdraw our prior opinion and replace it with the following.
The county court for Orange County certified the following three questions to this court as involving matters of great public importance:[1]
I. IS FLORIDA ADMINISTRATIVE CODE RULE 10D-42.023 VOID FOR VAGUENESS, AND IF SO, DOES THIS PRECLUDE THE STATE'S USE OF BREATH TESTING INSTRUMENTS IN A CRIMINAL TRIAL?
II. DO THE CURRENT METHODS OF HRS' MONTHLY AND YEARLY MAINTENANCE ACCURACY CHECK COMPLY WITH THE REQUIREMENTS OF SECTION 316.1932(1)(f)(1), FLORIDA STATUTES, AND/OR THE FLORIDA ADMINISTRATIVE PROCEDURES ACT, SECTION 120.50, et seq., FLORIDA STATUTES, AND, IF NOT, DOES THIS PRECLUDE THE STATE'S USE OF BREATH TESTING INSTRUMENTS IN A CRIMINAL TRIAL?
III. MAY THE DEFENDANT RAISE THESE ISSUES IN THE CONTEXT OF A CRIMINAL PROSECUTION IN THE COUNTY COURT?
We answer the first question "yes"; the second "no and yes"; and the third "yes."
These issues arose in the context of the state's prosecution of Robert Reisner for D.U.I.[2] Just prior to the commencement of Reisner's jury trial, the court heard argument on Reisner's motion to suppress the *143 results of a breathalyzer test taken shortly after Reisner's arrest. The test results showed readings of .250 and .256; they had been made by using an Intoxilyzer 5000 Series machine. Rule 10D-42.023 requires that such test instruments be checked yearly for "accuracy" and "reproducibility" and rule 10D-42.024 requires a monthly test for "accuracy." The court found that rule 10D-42.024 governing the monthly checks on that machine was constitutionally valid because it incorporated a specified form[3] (the "original form") which further defined what was meant by "accuracy" and "reproducibility." However, the annual check rule incorporated no specified form. The machine involved in this case was checked pursuant to a revised version of that form,[4] (the "revised form") and the court found that this new form had not been promulgated as a rule or rule change by HRS. Accordingly, it treated Reisner's motion as a motion in limine, which it granted. It certified the questions recited above; and we elected to accept jurisdiction.[5]
The record in this case consists entirely of argument by counsel. No expert witnesses were presented to testify as to whether the original form is the same as, or substantially similar to, the revised form. The attorneys stipulated and agreed that the original form had in fact been promulgated as a rule by HRS but that the revised form had not been so promulgated or adopted.
Reisner's attorney argued that the revised form prescribed an acetone accuracy test, which was not included in the original form.[6] In addition, the original form appears to require the temperature equilibrium and carrier gas pressure to be checked, but the revised form does not. Finally, the original form does not provide for any deviation, while the revised form requires standard results to be within plus or minus 0.005 of standard. The state argues the revised form is more stringent than the original form; but that is not apparent from the record.
Initially, the state contends that Reisner should not be allowed to attack the validity of the rules adopted by HRS in this criminal proceeding; but that he should mount an administrative proceeding pursuant to chapter 120 to challenge them. We disagree. As our Florida Supreme Court has said in State v. Bender, 382 So.2d 697 (Fla. 1980), a defendant may attack the reliability of the testing procedures and the standards establishing the zones of intoxication levels in cases involving vehicle driver intoxication where the results of tests taken pursuant to the implied consent law (chapter 322) are sought to be proffered into evidence. Clearly, such a defendant has standing to raise such an issue in his own criminal case. State v. Flood, 523 So.2d 1180 (Fla. 5th DCA 1988). Further, in view of the vital role which the legal presumptions (.10 or .20) play in determining a defendant's guilt in a D.U.I. case, and the clear prejudice which would result if a test were wrongfully put into evidence, resolving the issue of admissibility in a pretrial proceeding appears to be an orderly method of resolving the admissibility vel non of the test,[7] although such a procedure need not necessarily be resolved on the basis of such a scanty record as the one before us in this case.
The implied consent law, with its suspension of license provisions, presumptions of intoxication, and blood alcohol tests (required in some cases and not in others), is a total package of interrelated provisions. Bender at 699. The test results are admissible into evidence in a D.U.I. case only if the state has complied with the statutes and the administrative rules enacted pursuant to the statutes.[8] If a defendant objects to the admission of a test *144 result because the testing procedures required by the rule were not substantially followed,[9] the state must carry the burden of proving that the test was made substantially in conformity with the laws and the rules.[10]
Section 316.1932(1)(f)1. provides that HRS shall write appropriate rules implementing the implied consent law:
The tests determining the weight of alcohol in the defendant's blood shall be administered at the request of a law enforcement officer substantially in accordance with rules and regulations which shall have been adopted by the Department of Health and Rehabilitative Services. Such rules and regulations shall be adopted after public hearing, shall specify precisely the test or tests which are approved by the Department of Health and Rehabilitative Services for reliability of result and facility of administration, and shall provide an approved method of administration which shall be followed in all such tests given under this section. (emphasis supplied)
Pursuant to this statutory authority, HRS promulgated rule 10D-42.023 and rule 10D-42.024, which require that the instruments used for testing blood alcohol levels pursuant to chapter 316 shall be checked both annually and monthly for "accuracy," and yearly for "reproducibility." However, the rules do not further define such terms. The state conceded that rule 10D-42.022(3)(b), which contains a very stringent definition of "accuracy," does not apply to the annual or monthly checks and that the checks made on the machine in this case came nowhere near that rule's requirements.[11]
This concession leaves this court with no alternative but to hold that the rule governing annual checks adopted by HRS is unconstitutionally vague and ambiguous. See State v. Cumming, 365 So.2d 153 (Fla. 1978). However, Reisner and the state both agree that HRS had fleshed out some meaningful context for the monthly check rule by promulgating, as part of the rule, the requirement that monthly tests of this machine be carried out pursuant to the original form.[12] The court found that the adoption of the original form as an official rule made its requirements of accuracy and reproducibility sufficiently specific. We agree, based on the record, since no scientific evidence or expert witness appeared to challenge the sufficiency of the original form.
However, the machine in this case was not tested using the original form. Both sides agreed the revised form was utilized here and that this form had never been promulgated as a formal rule, contrary to the express requirements of section 316.1932(1)(f)1. Since the rule itself is so vague and undefined, and cannot pass constitutional muster without the original form, the real issue here is whether the revised form can save the day.
We reject the state's argument that the revised form is also a "rule." Unpromulgated rules are not acceptable for this purpose. See State Board of Optometry v. Florida Society of Ophthalmology, 538 So.2d 878 (Fla. 1st DCA 1988), rev. denied, 542 So.2d 1333 (Fla. 1989); Department of Transportation v. Blackhawk Quarry Co. of Florida, Inc., 528 So.2d 447 (Fla. 5th DCA), rev. denied, 536 So.2d 243 (Fla. 1988); Balsam v. Department of Health and Rehabilitative Services, 452 So.2d 976 (Fla. 1st DCA 1984); McCarthy v. Department of Insurance and Treasurer, 479 So.2d 135 (Fla. 2d DCA 1985). One intent of the purpose for specifying the method *145 and means for such chemical tests[13] is to ensure that only reliable scientific evidence is used in court proceedings to protect rights of defendants facing the repercussions of statutory presumptions in their criminal trials. Bender. HRS must approve and specify the specific technology and methods for ensuring (among other things) the accuracy of the machines used. Bender at 699; Gargone at 423. It must do so by formally promulgating rules.
The state also argues that the revised form is substantially similar to the original form, proving substantial compliance with the formal rule as for monthly checks promulgated by HRS. See Flood; Ridgeway v. State, 514 So.2d 418 (Fla. 2d DCA 1987). In Ridgeway, the check on the periodic machine was some ten days (at most) overdue. There was no evidence that this was a critical time delay, and the court held that it did not constitute substantial deviation. In Flood, expert testimony was offered to show the machine had been substantially altered from its original certified state. The court upheld the lower court's determination that a substantial modification had occurred without recertification.
Here, the record only shows that a different form, requiring different procedures, was used for monthly checks. The state produced no expert to explain that any deviation in the procedure used by the two forms was insubstantial or unimportant. We cannot conclude it was, based on the state's mere assertion. Since the state had the burden of proof on this issue, we conclude it failed to prove its case. State v. Donaldson, 579 So.2d 728 (Fla. 1991). Further, the rule adopted for annual checks was unconstitutionally vague.
Accordingly, we affirm the county court's ruling excluding admission of the blood alcohol test and we answer the certified questions as indicated above.
AFFIRMED.
COBB and PETERSON, JJ., concur.
NOTES
[1] Fla.R.App.P. 9.030(b)(4)(A).
[2] § 316.193, Fla. Stat. (1989).
[3] Form 1514 (1982).
[4] Form 1514 (rev. 1986).
[5] Fla.R.App.P. 9.030(b)(4)(A) and 9.160; § 924.07(1)(h), Fla. Stat. (1989).
[6] It appears to be questionable, however, whether HRS ever approved a test for acetone accuracy.
[7] See State v. Tanner, 457 So.2d 1172 (La. 1984).
[8] State v. Bender, 382 So.2d 697 (Fla. 1980); Donaldson v. State, 561 So.2d 648 (Fla. 4th DCA 1990), approved, 579 So.2d 728 (Fla. 1991); Gargone v. State, 503 So.2d 421 (Fla. 3d DCA 1987); Gulley v. State, 501 So.2d 1388 (Fla. 4th DCA 1987); Beasley v. Mitel of Delaware, 449 So.2d 365 (Fla. 1st DCA 1984); State v. Potter, 438 So.2d 1085 (Fla. 2d DCA 1983). See also State v. Rowell, 517 So.2d 799 (La. 1988).
[9] State v. Flood, 523 So.2d 1180 (Fla. 5th DCA 1988).
[10] Donaldson v. State, 561 So.2d 648 (Fla. 4th DCA 1990); State v. Potter, 438 So.2d 1085 (Fla. 2d DCA 1983); Gillman v. State, 373 So.2d 935 (Fla. 2d DCA 1979), certified question answered, 390 So.2d 62 (Fla. 1980). See also State v. Tanner, 457 So.2d 1172 (La. 1984).
[11] That term applies to checks on machines which are required prior to their obtaining approval by HRS.
[12] Fla.R.Admin.C. 10d-42.024(11)(d); Form 1514 (1982).
[13] State v. Bender, 382 So.2d 697 (Fla. 1980) (discussing section 322.261, Florida Statutes (1977).
|
FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D18-5248
_____________________________
KARLA DAVIS,
Appellant,
v.
STATE OF FLORIDA,
Appellee.
_____________________________
On appeal from the Circuit Court for Duval County.
Angela M. Cox, Judge.
August 16, 2019
PER CURIAM.
AFFIRMED.
ROBERTS, ROWE, and KELSEY, JJ., concur.
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
Karla Davis, pro se, Appellant.
Ashley Moody, Attorney General, and Holly N. Simcox, Assistant
Attorney General, Tallahassee, for Appellee.
2
|
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