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9 So.3d 591 (2007)
KEITH BROWN
v.
STATE.
No. CR-06-1470.
Court of Criminal Appeals of Alabama.
June 11, 2007.
Decision of the Alabama Court of Criminal Appeal Without Opinion. Dismissed.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-6774
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
SOLOMON GLOVER, a/k/a Terry Tyreil Moore, a/k/a Box, a/k/a
Tyreil Moore, a/k/a Tyreil Morgan,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk. Arenda L. Wright Allen,
District Judge. (2:03-cr-00039-AWA-FBS-1; 2:13-cv-00203-AWA)
Submitted: September 26, 2013 Decided: October 3, 2013
Before MOTZ and KEENAN, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Dismissed by unpublished per curiam opinion.
Solomon Glover, Appellant Pro Se. William David Muhr, Assistant
United States Attorney, Norfolk, Virginia; Timothy Richard
Murphy, Special Assistant United States Attorney, Newport News,
Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Solomon Glover seeks to appeal the district court’s
order denying relief on his 28 U.S.C. § 2255 (2006) motion. The
order is not appealable unless a circuit justice or judge issues
a certificate of appealability. 28 U.S.C. § 2253(c)(1)(B)
(2006). A certificate of appealability will not issue absent “a
substantial showing of the denial of a constitutional right.”
28 U.S.C. § 2253(c)(2) (2006). When the district court denies
relief on the merits, a prisoner satisfies this standard by
demonstrating that reasonable jurists would find that the
district court’s assessment of the constitutional claims is
debatable or wrong. Slack v. McDaniel, 529 U.S. 473, 484
(2000); see Miller-El v. Cockrell, 537 U.S. 322, 336-38 (2003).
When the district court denies relief on procedural grounds, the
prisoner must demonstrate both that the dispositive procedural
ruling is debatable, and that the motion states a debatable
claim of the denial of a constitutional right. Slack, 529 U.S.
at 484-85.
We have independently reviewed the record and conclude
that Glover has not made the requisite showing. Accordingly, we
deny a certificate of appealability, deny his motion to proceed
in forma pauperis, and dismiss the appeal. We dispense with
oral argument because the facts and legal contentions are
2
adequately presented in the materials before this court and
argument would not aid the decisional process.
DISMISSED
3
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(2008)
James LIGHTFOOT, Plaintiff,
v.
DISTRICT OF COLUMBIA, et al., Defendants.
Civil Action No. 04-1280(RBW).
United States District Court, District of Columbia.
May 16, 2008.
MEMORANDUM OPINION
REGGIE B. WALTON, District Judge.
On July 30, 2004, the plaintiff, an employee of the District of Columbia Public Schools ("DCPS"), filed this action against defendants Robert Graves and the DCPS. The plaintiff asserted the following claims against them: (1) violation of the Federal Family and Medical Leave Act ("FMLA"), 29 U.S.C. § 2601, et seq. (2000); (2) violation of the District of Columbia Family and Medical Leave Act ("DCFMLA"), D.C.Code § 32-501, et seq. (2003); (3) breach of contract; and (4) intentional infliction of emotional distress. Complaint ("Compl") at 7-8. On August 5, 2005, the defendants requested judgment on the pleadings arguing that (1) the plaintiff failed to provide a timely and complete medical certification required by the FMLA, Defendants' Motion for Judgment on the Pleadings ("Defs.' Mot. for Judgment") at 4-7, (2) the plaintiff had not alleged sufficiently that he is suffering from a serious health condition, Id., (3) the plaintiffs DCFMLA claim is barred by the statute's one-year statute of limitations, Id. at 7, (4) this Court lacks subject matter jurisdiction over the plaintiffs breach of contract claims, id. at 7-8, and (5) the defendants have absolute governmental immunity as to his intentional infliction of emotional distress claim, and in any event, the plaintiff has alleged no facts in his complaint that satisfy the "outrageousness" requirement necessary to establish an intentional infliction of emotional distress claim, id. at 8-12. On January 10, 2006, 2006 WL 54430, this Court issued a Memorandum Opinion and Order granting the defendants' Motion for Judgment on the Pleadings. See Memorandum Opinion and Order dated January 10, 2006. Currently before the Court is the Plaintiffs Motion for Relief from Judgment ("Pl.'s Mot. for Relief') pursuant to Federal Rules of Civil Procedure 59 and 60, and local rule 7, and his Motion for Leave to Amend Plaintiffs Motion for Relief from Judgment.[1] Although the Court will permit the plaintiff to amend his motion as requested, for the reasons set forth below, his request for relief from the judgment will be denied.
I. Factual Background
The DCPS hired the plaintiff as an Assistant Principal for Spingarn Senior High School ("Spingarn") in August 2001. Compl. at ¶ 4. On March 12, 2003, the plaintiff submitted an "Application of Leave," which requested medical leave for 24 days commencing on March 13, 2003 and concluding on April 15, 2003, due to alleged "severe job related anxiety and stress." Id. ¶ 5. The plaintiffs application included a medical certification from his physician, Dr. Thomas Gay, recommending that the plaintiff not work for at least one month. Id. In response to the plaintiffs request, Robert Graves, the Principal at Spingarn, sent a letter to the plaintiff informing him that the proper procedure for requesting such leave was to complete an "Application for Leave of Absence Re: Extended Leave of Absence and the Family Leave Act," id. ¶ 6, and Mr. Graves included a copy of this document with his response. Id. In addition to being requested to complete the application, the plaintiff was also told by Mr. Graves that he was required to submit all necessary supporting documentation along with the application and comply with the requirements of both the "Family Leave Act and the Board [of Education] Rules." Id. Moreover, the letter from Mr. Graves noted that until the plaintiff completed the enclosed application and his request was approved, he would be placed on absent without leave status, which could lead to disciplinary actions. Id. After Mr. Grave's issued his response, one of the school's employees, a time keeper, notified the plaintiff that "she had not received his medical certification and [without it she] could not process [her] payroll." Id. ¶ 7. To address this deficiency, the plaintiff allegedly delivered the medical certification to the school. Id. Nonetheless, on April 3, 2003, the plaintiff received a letter from Mr. Graves stating that he was "no longer privileged to enter the premises or grounds of Spingarn...." Id. ¶¶ 7-8. This letter also notified the plaintiff that all further communications by him should be directed to the Assistant Superintendent for the DCPS. Id. ¶ 8.
Following receipt of the April 3 letter, the plaintiff initiated a formal grievance procedure by submitting a grievance statement to Assistant Superintendent Lynette Adams. Id. ¶¶ 9-13. However, before the grievance process commenced, the plaintiff was notified that he should return to work on May 5, 2003. Id. ¶ 15. In response, on May 4, 2003, the plaintiff sent a letter to Mr. Graves stating:
This letter is to notify you that pursuant to D.C.Code [§ ] 32-506 and District of Columbia Municipal Regulations Title 1600 the Family Medical Leave Act I will be away from my job as Assistant Principal at Spingarn High School for a period of sixteen (16) weeks or less depending upon the advise of my medical doctor. This is also to notify you that the original "Application for Leave" I submitted on March 14, 2003 is now being converted to absence under the Family and Medical Leave Act. Therefore, my Medical Leave remedies are retroactive to March 14, 2003. In accordance with the Act, I will be submitting to you a medical certificate issued by my health care provider as soon as practicable. I have an appointment with my doctor scheduled for Monday, May 5, 2003.
Id. ¶ 16.
In a letter dated May 7, 2003, the plaintiff was informed that his employment had been terminated. Id. ¶ 18. In a separate letter, the plaintiff was informed that he could continue to pursue his informal grievance through the Council of School Officers ("CSO"), as it is the exclusive representative of assistant principals. Id. Dissatisfied with the processing of his informal grievance, and believing that it had not been fully resolved, the plaintiff resubmitted his grievance to the Superintendent for the DCPS. Id. ¶ 19. When the plaintiff did not receive a response from the Superintendent, he filed an administrative complaint with the Equal Employment Opportunity Counsel ("EEOC") for the DCPS. Id. The EEOC failed to timely investigate the plaintiffs allegations within the required statutory time period, and, the plaintiff then filed a complaint with the District of Columbia Office of Human Rights. ("DCOHR"). Id. ¶¶ 21-22.
The parties thereafter attempted to resolve the dispute without success. Id. ¶¶ 23-24. Thus, the plaintiff withdrew the administrative complaint he had filed with the DCOHR and filed his judicial complaint with this Court. Id. ¶ 35. The plaintiff noted in his complaint filed with the Court that he received a "Certificate of Disability" from his physician on May 20, 2003, which stated that he could not return to work until June 15, 2003. Id. ¶ 17. However, the plaintiff acknowledged that he never submitted the certificate to his employer. Id.
As indicated, on January 10, 2006, this Court granted the Defendant's Motion for Judgment on the Pleadings. Lightfoot v. District of Columbia, No. 04-1280(RBW) ("Jan. 10, 2006 Mem. Op."). Currently before the Court is the Plaintiffs Motion for Relief from Judgment.[2] Included with the plaintiffs motion are two physician disability certificates, one dated March 14, 2003, which was referenced in the plaintiffs complaint, Compl. ¶ 5, and one dated April 15, 2003, which was not referenced in the complaint. And submitted with his Motion for Leave to Amend Plaintiffs Motion for Relief from Judgment are two additional physician disability certificates, one dated May 5, 2003, which was not referenced in the complaint, and one dated May 20, 2003, which was referenced in the complaint. Id. ¶ 17. However, the only physician disability certificate the plaintiff stated in his complaint was submitted to the DCPS was the March 14, 2003 certificate. Id. ¶ 5. It appears that the plaintiff is now seeking to amend his complaint by making all of the physician disability certificates part of the complaint, which in this amended posture the plaintiff seemingly contends would have precluded this Court from entering judgment for the defendants on the pleadings and therefore he is entitled to relief from the judgment.
II. Standard of Review
Motions for reconsideration are governed by either Federal Rule of Civil Procedure 59(e) or 60(b). See Anyanwutaku v. Moore, 151 F.3d 1053, 1057 (D.C.Cir. 1998). Rule 59(e) permits a party to file a motion to alter or amend a judgment within "10 days after entry of the judgment." Fed.R.Civ.P. 59(e). See Mashpee Wampanoag Tribal Council, Inc. v. Norton, 336 F.3d 1094, 1098 (D.C.Cir.2003) (stating that a Rule 59(e) motion "must be filed within 10 days of the challenged order, not including weekends, certain specified national holidays (including Christmas Day and New Year's Day), or `any other day appointed as a holiday by the President'"). This language is mandatory, and District Courts do not have discretion to enlarge Rule 59(e)'s timing requirement. Derrington-Bey v. D.C. Dep't of Corrections, 39 F.3d 1224, 1225 (D.C.Cir.1994). Rule 60(c), however, allows a party to seek relief from a final judgment pursuant to Rule 60(b) "within a reasonable time" after entry of the final judgment, but only for reasons specified in the Rule. Fed R. Civ. P. 60(c). And district judges "[are] vested with a large measure of discretion in deciding whether to grant a Rule 60(b) motion...." Twelve John Does v. District of Columbia, 841 F.2d 1133, 1138 (D.C.Cir. 1988).
III. Legal Analysis
The plaintiff contends that this Court should reconsider its judgment entered on January 10, 2006, because he was treated twice by his healthcare provider during the original period of incapacitation and these treatments trigger the protection provided by the FMLA. Pl.'s Mot. at 1-2. Specifically, the plaintiff asserts that the additional medical certificates submitted with his motion for relief from the Court's judgment present "previously undisclosed factfs] so central to the litigation that [they] show the initial judgment to have been manifestly unjust [and therefore] reconsideration under [R]ule 60(b) is proper even though the failure to present that information was inexcusable." Pl.'s Reply at 4-5. In opposition, the defendants respond that (1) the Court lacks jurisdiction to grant the relief requested by the plaintiff, Def.'s Opp'n at 2, (2) the Court should deny the motion because the plaintiff may not now amend his complaint, Id. at 2-3, and (3) Rule 60(b) does not authorize relief from the judgment under the circumstances of this case, Id. at 3-4. Upon review of the pleadings and supporting memoranda submitted by the parties, the Court finds that the plaintiffs motion for relief from the judgment must be denied for several reasons.
A. Plaintiffs Request for Relief Under Rule 59(e)
"Once a final judgment has been entered, a court cannot permit amendment of the complaint under Rule 15(a) of the Federal Rules of Civil Procedure unless the plaintiff `first satisfies Rule 59(e)'s more stringent standard for setting aside that judgment.'" Jung v. Ass'n of Am. Med. Colls., 226 F.R.D. 7, 9 (D.D.C.2005) (quoting Ciralsky v. CIA, 355 F.3d 661, 673 (D.C.Cir.2004)) (quoting Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C.Cir. 1996)). The viability of a plaintiffs post-judgment Rule 15(a) motion therefore initially depends on the sustainability of the Rule 59(e) motion. See Firestone, 76 F.3d at 1208 (stating that parties moving to amend their complaint after an adverse judgment has been rendered against them must first satisfy Rule 59(e) before the court can consider a Rule 15(a) motion to amend); see also Confederate Mem'l Ass'n, Inc. v. Hines, 995 F.2d 295, 299 (D.C.Cir.1993) (declaring that "[o]nce the district court granted [the] motion[] to dismiss, [the moving party] could amend the complaint `only by leave of court or by written consent of the adverse party' ... coupled with a motion under Rule 59(e) to alter or amend the judgment") (internal citation omitted). Here, by asking the Court to include as part of his complaint the previously omitted medical certificates dated April 15, 2003 and May 5, 2003, which collectively cover the alleged incapacitation period of March 13, 2003 to June 15, 2003, the plaintiff is asserting factual allegations that were not raised in his original complaint. As such, the relief requested by the plaintiff is synonymous with a request to amend his complaint.
As noted above, Rule 59(e) requires that a motion to alter or amend a judgment be "filed no later than 10 days after entry of the judgment." Fed.R.Civ.P. 59(e). In computing the time for filing a motion for reconsideration under Rule 59(e), the day the judgment was entered is excluded while the day the motion was filed is included in the calculation. Fed. R.Civ.P. 6(a)[3]; Mashpee Wampanoag Tribal Council, Inc. v. Norton, 336 F.3d 1094, 1098 (D.C.Cir.2003) (applying Rule 6(a) in calculating the time for filing a Rule 59(e) motion). Additionally, since the period prescribed by Rule 59(e) is less than 11 days, "intermediate Saturdays, Sundays, and legal holidays" shall be excluded in the computation. Fed.R.Civ.P. 6(a)(3). This Court's Memorandum Opinion, which awarded defendants judgment on the pleadings, was issued on January 10, 2006. Thus, the last day on which the plaintiff could file a motion to alter or amend the judgment under Rule 59(e) was January 25, 2006. The plaintiffs motion was not filed until March 22, 2006, well past the Rule 59(e) deadline. Accordingly, the plaintiffs motion for relief is untimely under Rule 59(e). Thus, the plaintiffs motion for relief under this Rule must be denied.
B. Plaintiff's Request for Relief Under Rule 60(b)
Having filed his motion for reconsideration more than ten days after entry of the judgment, the relief the plaintiff is seeking must be considered under Rule 60(b).[4]See Butler v. Pearson, 636 F.2d 526, 529 (D.C.Cir.1980) ("although a motion is made under Rule 59, if it is not timely so that it may not properly be considered thereunder, it may, nevertheless, be considered as a motion under Rule 60 when it states grounds for relief under this latter rule.") (citation omitted); McMillian v. District of Columbia, 233 F.R.D. 179, 180 n. 1 (D.D.C.2005) (holding that motions to reconsider filed within ten days of judgment are treated under Rule 59(e) and those filed after ten days are treated under Rule 60(b) (citations omitted)). Rule 60(b) provides several grounds upon which a motion to reconsider may be granted. Fed. R.Civ.P. 60(b)(1)-(6). Such motions may be granted only upon a showing of:
(1) [M]istake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or (6) any other reason that justifies relief.
Id. The only two subsections of Rule 60(b) that appear applicable in this situation are subsections (b)(2) and (b)(6).[5]
1 Rule 60(b)(2)
The plaintiff has failed to establish that under subsection (b)(2) the additional medical certificates submitted with his motion for relief from the judgment are "newly discovered evidence" that could not have been discovered through "reasonable diligence." Fed.R.Civ.P. 60(b)(2). In order to receive relief from a judgment under Rule 60(b)(2), the movant must demonstrate that "(1) the newly discovered evidence [is] of facts that existed at the time of trial or other dispositive proceeding, (2) the [party seeking relief] must have been justifiably ignorant of [the evidence] despite due diligence, (3) the evidence must be admissible and of such importance that it probably would have changed the outcome, and (4) the evidence must not be merely cumulative or impeaching." U.S. v. Int'l Bhd. of Teamsters, 247 F.3d 370, 392 (2d Cir.2001) (citations omitted); Mitchell v. Shalala, 48 F.3d 1039, 1041 (8th Cir.1995) (citations omitted); see also Manhattan Cent. Studios v. N.L.R.B., 452 F.3d 813, 817 n. 6 (D.C.Cir.2006) ("relief under Rule 60(b)(2) requires that the moving party show, among other requirements, that he was diligent in discovering the new evidence") (citing Jones v. Lincoln Elec. Co., 188 F.3d 709, 732-35 (7th Cir.1999)); In re Korean Air Lines Disaster of September 1, 1983, 156 F.R.D. 18, 22 (D.D.C.1994) (citing Goland v. CIA, 607 F.2d 339, 371 n. 12 (D.C.Cir.1978), cert, denied, 445 U.S. 927, 100 S.Ct. 1312, 63 L.Ed.2d 759 (1980)) (additional citations omitted). The plaintiff has failed to satisfy three of the four prongs of this test.
Under the first prong of this four part test, "evidence cannot be newly discovered if it was known to the party at the time of trial." Lans v. Gateway 2000, Inc., 110 F.Supp.2d 1, 5 (D.D.C.2000) (citing Parrilla-Lopez v. U.S., 841 F.2d 16, 19 (1st Cir.1988)). Additionally, "evidence in the possession of the party before the judgment was rendered ... is not newly discovered evidence that affords relief [under Rule 60(b)(2)]." Id. (citations omitted). Here, the plaintiff was not ignorant to the existence of the medical certificates he now wants made part of his complaint. In fact, in his motion for relief, although the plaintiff does not acknowledge possessing of the certificate of disability dated May 5, 2003, when his attorney was preparing his complaint, he does admit that he was in possession at that time of the second certificate of disability dated April 15, 2003, which covered the period of incapacitation from April 15, 2003 to April 22, 2003. Pl.'s Mot. at 2. Further, he remained in possession of the second certificate of disability throughout the duration of the litigation. Id. Therefore, since the plaintiff had knowledge or possession of these medical certificates prior to the judgment on the pleadings being entered, the medical certificates are not newly discovered evidence for purposes of Rule 60(b)(2).
Under the second prong of the Rule 60(b)(2) test, the plaintiff "must demonstrate to the Court that the failure to produce the [medical certificates] did not result from a lack of diligence on his part, and that the evidence could not by the exercise of [reasonable] diligence have been discovered in time to present it in the original proceeding." Lans, 110 F.Supp.2d at 5-6. The plaintiff has proffered no explanation for why he was unable to timely present the evidence, and only acknowledges that his untimely submission was due to inadvertence. Pl.'s Mot. at 2. Since the plaintiff was aware of the medical certificates and was in possession of at least one of them at all times throughout the litigation of this case, he cannot satisfy his burden of proving that he was justifiably ignorant of the certificates despite his due diligence.
The moving party must also show that the proffered evidence is "admissible and of such importance that it probably would have changed the outcome." Int'l Bind, of Teamsters, 247 F.3d at 392; In re Korean Air Lines, 156 F.R.D. at 22. However, even though the medical certificates could likely change the outcome of the original judgment, there is "no exception [to the requirement of due diligence] to Rule 60(b)(2) for `conclusive' evidence.'" See Cent. States S.E. & S.W. v. Cent. Cartage, 69 F.3d 1312, 1314-15 (7th Cir.1995); see also 12 JAMES WM. MOORE, MOORE'S FEDERAL PRACTICE § 60.42[10] (3d ed. 2007) (stating that "the requirement of reasonable diligence in discovering the evidence must still be satisfied in order to obtain relief [under Rule 60(b)(2) ], even when the newly discovered evidence might be considered `conclusive'").
Although there is a line of authority that appears to allow relief from a judgment based on newly discovered evidence in the absence of due diligence, the reasoning in these cases is inapplicable here, and in any event, is not a basis for granting the plaintiff relief under subsection 60(b)(2). In Ferrell v. Trailmobile, Inc., the Fifth Circuit granted a new trial where the evidence offered as grounds for relief appeared conclusive and proved that the basis for the underlying judgment had been previously satisfied. 223 F.2d 697, 698-99 (5th Cir.1955). Specifically, the question before the Fifth Circuit in Ferrell was whether a judgment of foreclosure should be vacated because the underlying debt had been paid. Id. at 698. The court found that conclusive evidence of the debt's payment would defeat foreclosure and warranted setting aside the judgment "even though proper diligence was not used to secure such evidence for use at the trial." Id. The Fifth Circuit subsequently held that its holding in Ferrell applies to Rule 60(b)(5) and not subsection (b)(2), which expressly requires due diligence. See Johnson Waste Materials v. Marshall, 611 F.2d 593, 599 (5th Cir.1980) (stating that "[u]nlike Fed.R.Civ.P. 60(b)(2), Rule 60(b)(5) on its face does not require that the evidence supporting the motion be `newly discovered' or that the movant have exercised `due diligence' to secure it ... nor have we been willing to read such requirements into 60(b)(5)...."). Other circuits also have limited Ferrell's holding to Rule 60(b)(5). See Central States, S.E. and S.W., 69 F.3d at 1314 (agreeing with Johnson's conclusion that a "litigant relying on new evidence as a reason to alter a judgment must demonstrate that the evidence could not have been obtained, in time, by diligent preparation," thus refusing to extend the Ferrell approach to Rule 60(b)(2) and "insisting that Rule 60(b)(2) be applied according to its text"); U.S. v. Philatelic Leasing, Ltd., 794 F.2d 781, 788 (2d Cir.1986) (refusing to substitute the Ferrell exception for the due diligence requirement of Rule 60(b)(2)); see generally, 12 JAMES WM. MOORE, MOORE'S FEDERAL PRACTICE § 60.42[10]. "[Application in this case [of the approach suggested in Ferrell] would require the Court to ignore the clear requirements of Rule 60(b)(2), and so the Court declines to undertake such an application." Lans, 110 F.Supp.2d at 7.
Finally, the medical certificates included with the plaintiffs motion are not cumulative or merely relevant for impeachment and therefore satisfy the final prong of the Rule 60(b)(2) test. However, the Court having found that the plaintiff has failed to satisfy the three other necessary elements required by Rule 60(b)(2), the plaintiff is not entitled to relief under this subsection of the Rule.
2. Rule 60(b)(6)
Rule 60(b)(6), the "catch-all provision" of Rule 60(b), "gives [this Court] broad latitude to relieve a party from a judgment for `any other reason justifying relief from the operation of a judgment'" not specified in the five preceding subsections. Richardson v. Nat'l R.R. Passenger Corp., 49 F.3d 760, 765 (D.C.Cir.1995); Fed.R.Civ.P. 60(b)(6). However, such latitude "should only be sparingly used." Good Luck Nursing Home v. Harris, 636 F.2d 572, 577 (D.C.Cir.1980). Relief under Rule 60(b)(6) should therefore be granted only in "extraordinary circumstances." Ackermann v. United States, 340 U.S. 193, 199-200, 71 S.Ct. 209, 95 L.Ed. 207 (1950). Extraordinary circumstances may exist "[w]hen a party timely presents a previously undisclosed fact so central to the litigation that it shows the initial judgment to have been manifestly unjust ... even though the original failure to present that information was inexcusable." Good Luck Nursing Home, 636 F.2d at 577. However, a party who "has not presented known facts helpful to its cause when it had the chance cannot ordinarily avail itself of [R]ule 60(b) after an adverse judgment has been handed down." Id. Moreover, the moving party must demonstrate that its case is "not the ordinary one" in order to obtain relief under 60(b)(6). Computer Professionals for Social Responsibility v. U.S. Secret Service, 72 F.3d 897, 903 (D.C.Cir.1996).
In Government Financial Services One Ltd. P'ship v. Peyton Place, Inc., 62 F.3d 767, 774 (5th Cir.1995), the Fifth Circuit followed its previous ruling in U.S. v. 329.73 Acres of Land, More or Less, 695 F.2d 922, 926 (5th Cir.1983) and held that "a district court's equitable powers under [Rule 60](b)(6) do not extend to considering evidence that could have been presented at trial." In Government Financial Services One Limited Partnership, the plaintiff-appellant, Peyton Place, Inc. ("Peyton Place"), appealed the district court's denial of its motion for a new trial pursuant to Federal Rule of Civil Procedure 59(a) and its motion for relief from judgment pursuant to Federal Rule of Civil Procedure 60(b). 62 F.3d at 770. Specifically, after the district court denied Peyton Place's request for injunctive relief, Peyton Place filed a Motion to Supplement, for New Trial and/or for Relief from Judgment, and an Ex Parte Motion to File Supplemental Memorandum and Memorandum in Support of its Motion for a New Trial and for Relief From Judgment in which it "informed the court that it had obtained a copy of a forbearance agreement between Peyton Place and Southern Savings, and that it had discovered that the first page of the condominium mortgage filed in the Jefferson Parish mortgage records is a photocopy," Id. at 769, which comported with its earlier position at trial that "the mortgage had been altered before it was filed," Id. Subsequently, Peyton Place filed an Ex Parte Motion to File Second Supplemental Memorandum in Support of Motion for New Trial and/or Relief from Judgment and Memorandum in Support in which it stated that "it had received a letter from Oster & Wegener, Southern Savings' attorneys, and that Oster & Wegener claimed in the letter that all of the documents in their possession concerning the relevant loans and mortgage had been seized by the [Resolution Trust Corporation] [(`RTC')] before the trial." Id. at 770. Accordingly, "Peyton Place argued that the RTC's failure to produce these documents at trial provided additional grounds for the court to reconsider its judgment." Id. Ultimately, "the district court denied Peyton Place's motion, concluding that it `amount[ed] to little more than an attempt to reargue its case....'" Id. Peyton Place appealed the district court's ruling contending that the "district court erroneously refused to exercise its equitable powers under Rule 60(b)(6) to consider `[t]he evidence obtained after the trial and judgment (the photocopied first page in the mortgage records, the RTC's seizure of the Oster & Wegener files, and the Assignment of Proceeds of Contract referring to the forbearance agreement).'" Id. at 774. The Fifth Circuit reiterated its earlier ruling that "Rule [60(b)(6) ] provides' a grand reservoir of equitable power to do justice in a particular case,' but that well is not tapped by a request to present evidence that could have been discovered and presented at trial through the exercise of due diligence." Id. at 774 (citing U.S. v. 329.73 Acres of Land, More or Less, 695 F.2d at 926). The Fifth Circuit further found that had "[Peyton Place] exercised due diligence, [it] could have discovered and presented at trial the photocopied first page in the mortgage records, the RTC's seizure of the Oster & Wegner files, and the assignment of proceeds of contract referring to the forbearance agreement." Id. at 774. Therefore, the Fifth Circuit held that the "district court did not abuse its discretion in refusing to grant Peyton Place's Rule 60(b)(6) motion." Id.
Here, the plaintiff has not demonstrated any extraordinary circumstances that bring this case within the scope of Rule 60(b)(6). This conclusion is called for because the plaintiff merely presents evidence that is conceivably helpful to his cause that he knew about when his complaint was filed and when this matter was before this Court on the defendant's motion for judgment on the pleadings. Since the plaintiff was aware of the existence of the medical certificates and was in possession of one of them throughout the course of this litigation, he is unable to demonstrate the extraordinary circumstances necessary to warrant relief under Rule 60(b)(6). Legal authority has made the fault/no fault distinction the controlling factor in determining whether extraordinary circumstances exist. 12 MOORE'S FEDERAL PRACTICE § 60.48[3][b] (3d ed. 2007) ("[C]ases seem to make [the] fault/no fault distinction the controlling factor in determining whether extraordinary circumstances will be found or not.") This is so because the "primary requirement" of Rule 60(b)(6) is a showing of "justification for relief from the judgment." Harjo v. Andrus, 581 F.2d 949, 953 (D.C.Cir.1978). "To justify relief under... [60(b) ](6), a party must show extraordinary circumstances suggesting that the party is faultless in the delay." Claremont Flock Corp. v. Alm, 281 F.3d 297, 299 (1st Cir.2002) (citing Pioneer Inv. Servs. Co. v. Brunswick Assoc., 507 U.S. 380, 393, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993)); see also Lewis v. Barnhart, 73 Fed.Appx. 715 (5th Cir.2003) (same); Dowell v. State Farm Fire & Cos. Auto. Ins. Co., 993 F.2d 46, 48 (4th Cir.1993) (holding that no relief is available under Rule 60(b)(6) for a deliberate decision); Taylor v. Chevrolet Motor Div. of General Motors Corp., No. Civ. A. 97-2988, 1998 WL 288434, at *3 (E.D.Pa. June 3, 1998) (to demonstrate the type of extraordinary circumstances required to justify relief under Rule 60(b)(6), it must generally appear that the movant is completely without fault of his predicament); Carrethers v. St. Louis-San Francisco Ry. Co., 264 F.Supp. 171 (W.D.Okla.1967) (inexcusable neglect which amounts to contributory fault by the plaintiff will not provide the necessary extraordinary circumstances to warrant the extraordinary relief afforded by Rule 60(b)(6)); 12 JAMES WM. MOORE, MOORE'S FEDERAL PRACTICE § 60.48[3][b] (3d ed. 2007) (discussing the Supreme Court's distinction between Klapprott v. United States, 335 U.S. 601, 604-09, 69 S.Ct. 384, 93 L.Ed. 266 (1949), where the Court found extraordinary circumstances in the absence of fault by the moving party, and Ackermann, 340 U.S. at 195-197, 71 S.Ct. 209, where the movant was at fault and the Court denied Rule 60 relief). In this case, the plaintiff has not demonstrated extraordinary circumstances, having failed to show that he was faultless in delaying the submission to the Court of the medical certificates. It was the plaintiff's own lack of due diligence that caused the exclusion of the medical certificates from the record before judgment was entered against him and not extraordinary circumstances beyond his control. Accordingly, the plaintiff's request for relief pursuant to Rule 60(b)(6) must be denied.
Conclusion
For the reasons set forth above, the plaintiff has failed to demonstrate that he is entitled to relief from this Court's January 10, 2006 judgment on the pleadings under either Rule 59(e) or 60(b) of the Federal Rules of Civil Procedure. Thus, the Court is compelled to conclude that the Plaintiffs Motion for Relief from Judgment must be DENIED.
SO ORDERED.
NOTES
[1] The following papers have been submitted to the Court in connection with the plaintiff's motions: (1) the Defendants Memorandum of Points and Authorities in Opposition to Plaintiff's Motion for Reconsideration ("Def.'s Opp'n"); and (2) the Plaintiff's Reply to Defendant's Opposition Motion ("Pl.'s Reply").
[2] The only claim pled in his complaint for which the plaintiff appears to be seeking relief is his FMLA claim, as this is the only claim addressed in his current motion.
[3] The filing date is not included in the last day for the filing of the motion if it was on a Saturday, Sunday, legal holiday or the clerk's office was inaccessible on that day due to inclement weather or other conditions. Id.
[4] On February 7, 2006, the plaintiff filed a Notice of Appeal indicating that he was appealing this Court's January 10, 2006 judgment. Subsequently, on March 22, 2006, the plaintiff filed his Motion for Relief from Judgment with this Court. In a situation like this, "the filing of a notice of appeal `confers jurisdiction on the court of appeals and divests the district court of control over those aspects of the case involved in the appeal.'" Piper v. U.S. Dep't. of Justice, 374 F.Supp.2d 73, 77 (D.D.C.2005) (citing U.S. v. DeFries, 129 F.3d 1293, 1302 (D.C.Cir.1997) (citation omitted)). Nonetheless, although this "court's hands are somewhat tied" because of the appeal, it "may outright deny, but cannot outright grant a Rule 60(b) motion [while the case is on appeal]." "If the court is inclined to grant a Rule 60(b) motion while appellate review is ongoing, `the [district [c]ourt may consider the 60(b) motion, and, if the [district [c]ourt indicates that it will grant relief, the appellant may move the appellate court for a remand in order that relief may be granted.'" Piper, 374 F.Supp.2d at 77 (citing LaRouche v. Dep't of Treasury, 112 F.Supp.2d 48, 52 (D.D.C. 2000) (citing Hoai v. Vo, 935 F.2d 308, 312 (D.C.Cir.1991)) (additional citations omitted)); see also Hoai, 935 F.2d at 312; see generally, 12 JAMES WM. MOORE, MOORE'S, FEDERAL PRACTICE § 60.67[2] (3d ed. 2007). Having concluded that the plaintiff is not entitled to relief under Rule 60(b), the Court will consider the merits of his motion.
[5] The plaintiff alludes to subsection 60(b)(1) as a basis for granting his requested relief, but fails to present anything that supports relief being granted under this provision of the Rule. See Pl.'s Mot. for Relief at 2. In any event, subsection (b)(1) has no applicability in this situation because the plaintiffs failure to give the medical certificates to his attorney does not qualify as "inadvertence" under Rule 60(b)(1). See Bershad v. McDonough, 469 F.2d 1333, 1337 (7th Cir.1972) (affirming that "neither ignorance nor carelessness on the part of a litigant or his attorney will provide grounds for rule 60(b)[(1)] relief") (citations omitted). Additionally, subsections (b)(3), (4), and (5) are not applicable to this case since the plaintiff does not allege fraud, that the judgment is void, or that the judgment has been satisfied, released, or discharged. Fed. R.Civ.P. 60(b)(3)-(5).
|
692 F.Supp.2d 322 (2010)
UNITED STATES of America,
v.
Juan ECHEVARRIA and Quirino Sanchez, Defendants.
No. 08 CR 868(LAP).
United States District Court, S.D. New York.
February 22, 2010.
*326 Telemachus Philip Kasulis, United States Attorney, New York, NY, for Plaintiff.
Glenn Andrew Garber, Glenn A. Garber, P.C., New York, NY, Anthony A. Capetola, Capetola & Doddato, Williston Park, NY, for Defendants.
MEMORANDUM AND ORDER
LORETTA A. PRESKA, Chief Judge.
By motion dated January 16, 2009, defendant Juan Echevarria ("Echevarria") moved to suppress certain physical evidence, and by letter dated July 7, 2009, defendant Quirino Sanchez ("Sanchez") joined in the motion. On September 23, 2009, a hearing was held on the motions. Two New York City Police Department ("NYPD") Officers and a Virginia State Trooper testified for the Government: Officers Michelle Diaz and Steven Irizarry testified about the July 16, 2008 arrest of Echevarria and Sanchez, and Trooper Christopher Murphy testified about the February 10, 2009 arrest of Echevarria. The defendants did not testify although each defendant submitted an affidavit in support of his motion. The only defense witness was Cindy Guivas, a paralegal in Echevarria's lawyer's office, who testified regarding her experience in communicating in English and Spanish with Echevarria.
For the reasons set out below, the motions to suppress are denied.[1]
A. The Government Case
1. The July 16, 2008 Arrests
Officers Diaz and Irizarry, who have been NYPD officers for four and five *327 years, respectively, were on routine patrol in the Bronx on July 16, 2008. According to the officers, at approximately 2:50 a.m., they responded to a 911 call reporting suspicious males unloading a commercial truck with a "Floral Beauty Express" logo on it, near 2548 Bailey Avenue, a dark and isolated area along the Major Deegan highway. (September 23, 2009 Hearing Transcript ("Tr.") 67, 69, 72, 121, 123-124.) Officers Diaz and Irizarry, who were in uniform, traveling in a marked police car driven by Officer Irizarry, arrived at 2548 Bailey Avenue several minutes after hearing the report of the 911 call. At the scene, they found a truck matching the description and in the location provided in the 911 call. The truck was parked facing southbound on Bailey Avenue. (Tr. 70, 123, 125.) Officers Diaz and Irizarry were the first to arrive at the scene; other police cars, both marked and unmarked, arrived at the scene shortly after Officers Diaz and Irizarry responded to the 911 call. (Tr. 70, 99, 123.)
After parking their police car near the front of the truck and leaving the headlights of their police car on, Officers Diaz and Irizarry got out of their car and began to conduct a sweep of the truck, Officer Diaz walking along the street-side of the truck and Officer Irizarry walking along the curb-side of the truck. (Tr. 74-75, 125-126.) As Officer Diaz walked toward the back of the truck, she observed Echevarria, who was standing near the back of the truck, throw an approximately threefoot long cardboard box to the ground. (Tr. 75-76.) At that time, other officers were approaching where Officer Diaz was at the back of the truck. (Tr. 100.)
After throwing the box, Echevarria began to walk "in a pretty fast manner" away from the truck, in the opposite direction from the direction the truck was facing. (Tr. 77, 126.) Officer Diaz followed Echevarria and told him to stop, after which she directed him, with her hand on his shoulder, to sit on the ground. (Tr. 77-78.)
Immediately thereafter, Officer Diaz took out her flashlight and shined it toward the cardboard box she had seen Echevarria throw on the ground. (Tr. 78.) Other officers, including Officer Irizarry, were looking at the box at the same time. (Tr. 80, 128.) Both Officer Irizarry and Officer Diaz observed that the box was partially open and, in the part of the box that was open, they saw what appeared to be marijuana contained in a clear plastic bag with a few flower stems on top of the plastic bag. (Tr. 80-81, 128-129.) Officer Irizarry also recognized the smell of marijuana coming from the box. (Tr. 128-129.) The box was then fully opened, and Officer Diaz saw several one-gallon plastic bags that appeared to contain marijuana. (Tr. 81.) Officers Diaz and Irizarry then proceeded to place Echevarria under arrest. (Tr. 82.)[2]
*328 Officer Irizarry next shined his flashlight in the trailer of the truck, which had one of its doors open, to see if anyone was inside the back of the truck. (Tr. 129.) Officer Irizarry then proceeded to the cabin of the truck, where he looked in the window and saw Sanchez, who appeared to be sleeping inside the truck. (Tr. 130.) Officer Irizarry went into the cabin of the truck and escorted Sanchez outside of the truck, after which he handcuffed Sanchez and conducted a quick "patdown search." (Tr. 82-83, 130, 160.) Officer Irizarry did not search the cabin of the truck. (Tr. 161.)
Officers Diaz and Irizarry then contacted their sergeant, who reported to the scene to verify the arrests. (Tr. 83, 131.) The defendants were subsequently transported to the NYPD's 52nd Precinct (the "Precinct"). (Tr. 82, 131.) No search of the trailer or the cabin of the truck was conducted prior to the defendants' being transported back to the Precinct. (Tr. 135.) Following the arrest, boxes in addition to the partially opened box that were outside the truck were placed in a police car and transported back to the Precinct at the same time the defendants were brought to the Precinct. (Tr. 82-83, 133.)[3]
Officers Diaz and Irizarry, who returned to the Precinct at around the same time the defendants arrived at the Precinct, next prepared paperwork to process the arrests, including beginning to inventory and voucher the contents of the boxes found at the scene. (Tr. 84, 131-133.)
At approximately 8 a.m., Officers Diaz and Irizarry returned to the scene, at which point other law enforcement agents searched the trailer of the truck. (Tr. 87-88, 133.) Officers Diaz and Irizarry did not participate in that search, and no other boxes of marijuana were found during the search. (Tr. 88, 135.)
At approximately noon, Officers Diaz and Irizarry returned to the Precinct to continue to voucher the marijuana found at the scene at the time the defendants were arrested. (Tr. 134-135.) The boxes had been secured at the Precinct during the time Officers Diaz and Irizarry had returned to the scene. (Tr. 88.) Prior to completing the voucher process, Officer Diaz met with Alcohol, Tobacco, Firearms and Explosives ("ATF") Agent Michael Zeppieri and told him she had seen Echevarria at the back of the truck toss a box to the ground and that the box was open and showed a clear plastic bag of marijuana. (Tr. 111, 115.)
Officers Diaz and Irizarry found over 40 one-gallon clear plastic bags of marijuana in the boxes they vouchered. (Tr. 88, 136; GX-6.) Officers Diaz and Irizarry then transported the marijuana to the police laboratory in Queens and completed their shift for the day. (Id.)
2. The February 10, 2009 Arrest
Trooper Christopher Murphy, a Virginia State Trooper who has been a law enforcement officer for approximately thirteen years and is the lead instructor for the Virginia State Police on criminal interdiction, testified for the Government regarding Echevarria's February 10, 2009 arrest. (Tr. 19.) According to Trooper Murphy, *329 at approximately 1:15 p.m. on February 10, 2009, while working on Interstate 95 in Greensville County, Virginia, he pulled over a commercial truck driven by Echevarria for traveling too closely behind another vehicle, in violation of Virginia Code Section 46.2-816, which requires that drivers maintain a "reasonable and prudent" distance behind other vehicles. (Tr. 25-26, 54.) Based on Trooper Murphy's training and experience, he testified that it would take approximately 300 feet for a commercial truck like the one Echevarria was driving to stop if it was going the speed limit of 65 miles per hour. (Tr. 26.) Trooper Murphy observed Echevarria's truck following approximately 15 feet behind another commercial vehicle that was hauling logs. (Tr. 25-26.) Trooper Murphy's attention was drawn to Echevarria's truck because the truck company, ANAM, was a company from which Trooper Murphy had made two previous seizures of contraband. (Tr. 26.) Trooper Murphy had spoken to an owner of the ANAM truck company, Oscar Alfonso, after the two previous seizures, who told Trooper Murphy that Mr. Alfonso "was very concerned about his drivers being involved in illegal activity" and that Trooper Murphy could "feel free to stop and search any ANAM truck that was owned or leased by ANAM." (Tr. 26-28.) However, Trooper Murphy did not believe he could pull over Echevarria's truck based on Mr. Alfonso's statements alone. (Tr. 27-28.)
When Trooper Murphy initiated the traffic stop, a video camera located near the rear view mirror in his police car was activated. (Tr. 31.) During the suppression hearing, the Government played the video recording (with audio), from the beginning of the video until the point that Echevarria provided oral consent to Trooper Murphy to search his truck. (Tr. 32-39; GX-1.) Based on what can be seen and heard in the video, and on Trooper Murphy's testimony, Trooper Murphy and
Echevarria engaged in a conversation in English for approximately fifteen minutes during which each appeared to understand what the other was saying based on both their words and their actions. At no time did Echevarria state that he did not understand what Trooper Murphy was saying. According to Trooper Murphy, he spoke to Echevarria in English because Echevarria responded to his questions in English and because he understood federal rules related to maintaining a commercial driver's license ("CDL") to require that CDL-holders be able to communicate effectively in English. (Tr. 34-35.)
At the beginning of the traffic stop, after Trooper Murphy signaled for Echevarria to remain in the truck for safety reasons, Trooper Murphy approached on the passenger side of the truck, and advised Echevarria, in English, of the traffic violation Echevarria had committed. (Tr. 33-34.) Echevarria acknowledged the violation verbally and by nodding his head. (Tr. 34.) Trooper Murphy reviewed Echevarria's documents, including his CDL and medical card, which Echevarria had given to Trooper Murphy in response to Trooper Murphy's verbal request. (Tr. 33.) Trooper Murphy told Echevarria that his medical card had expired and advised Echevarria that when they were finished with the traffic stop, Echevarria would not be able to drive until he updated his medical card. (Tr. 36.) Trooper Murphy then asked Echevarria to come back to Trooper Murphy's police car, which is a routine procedure for Virginia State Troopers, so that Trooper Murphy could review Echevarria's paperwork, including his log book, truck registration and insurance documents. (Tr. 37.) As they walked back to the police car, Echevarria and Trooper Murphy discussed, in English, a variety of topics including who Echevarria worked for, who owned the truck he was driving, his employment history, what kind of cargo *330 he and his co-driver were hauling, where they picked it up, where they were to deliver it, who loaded it in the truck, as well as Echevarria's relationship to and knowledge of his co-driver. (GX-1; Br. at 4.)
Trooper Murphy then spoke to Echevarria's co-driver briefly outside his police car and subsequently returned to the police car to speak further to Echevarria. (G1.) Trooper Murphy asked Echevarria if there was anything illegal in the truck and then specified the type of illegal items about which he was asking. (Tr. 38.) Trooper Murphy asked if there were any guns, to which Echevarria replied, "no." Trooper Murphy then advised Echevarria to tell him the truth, after which Echevarria repeated "no, no, no." Trooper Murphy next asked if there was marijuana; Echevarria said "no." Trooper Murphy asked about cocaine; Echevarria again said "no." When Trooper Murphy asked Echevarria if he was sure, Echevarria then said "I don't know." Trooper Murphy asked "What about him," referring to Echevarria's co-driver, and again Echevarria said "I don't know." Trooper Murphy then asked, "any money, mucho dinero?," to which Echevarria said "no, nothing, nothing." (GX-1; Tr. 38.)
Trooper Murphy asked Echevarria additional questions for a few more minutes and then told Echevarria to catch up his log book and advised Echevarria that neither he nor his co-driver could drive because Echevarria's medical card was expired and his co-driver had to sleep before driving again. (GX-1.) Trooper Murphy advised that they "shut down" for a period of time before continuing their trip. (Id.) Trooper Murphy next gave Echevarria back his CDL, his medical card and the rest of his paperwork, told Echevarria that they were "finished," that Trooper Murphy was not going to write Echevarria any tickets and that Echevarria was "free to go at any time." (GX-1; Tr. 38-39.) During the next ten seconds, the following occurred: First, Trooper Murphy said he would like to search the truck to make sure there were "no guns or anything on the truck," after which Echevarria stated, "no, no, nothing." Next, Trooper Murphy asked, "can I search it," and Echevarria said, "Yeah." Finally, Trooper Murphy said, "ok, you can get up," and gestured to Echevarria to get up. (GX-1; Tr. 64.) After they were out of the car, Trooper Murphy asked Echevarria if Echevarria could go with Trooper Murphy to get the keys, to which Echevarria replied, "yeah," and proceeded to the front of the truck with Trooper Murphy to give Trooper Murphy the keys to the truck. (GX-1; Tr. 39.)
Trooper Murphy and other troopers then searched the truck, in which they found two brown cardboard boxes hidden inside a pallet of white boxes.[4] (Tr. 39.) The two boxes contained 26 one-gallon clear plastic bags of marijuana. (GX-2, GX-3; Tr. 43-44, 46.) Echevarria and his co-driver were subsequently arrested, transported to the Virginia Commonwealth Attorney's Office and interviewed by other law enforcement officers. Later that day they were charged with Virginia narcotics offenses. (Tr. 45.)
B. The Defense Case
The defendants did not testify at the suppression hearing, but Echevarria and *331 Sanchez submitted factual affidavits in support of their motions. In both of his affidavits, Echevarria stated that he was in possession of the truck and the items therein that were searched and seized by the police. (January 15, 2009 Aff. ¶ 5 and August 14, 2009 Aff. ¶ 4.) Echevarria also called Cindy Guivas, a paralegal who works for his lawyer, Glenn Garber, who testified that she had spoken to Echevarria in Spanish on twenty to twenty-five occasions and that she had translated between Spanish and English for Mr. Garber when Mr. Garber had communicated with Echevarria. (Tr. 165.) Ms. Guivas also stated that Echevarria could understand English if spoken to slowly and with simple vocabulary but that he would not understand complex legal concepts. (Tr. 166.) Ms. Guivas is not certified as a translator and she was not present when Echevarria was arrested on July 16, 2008 or on February 10, 2009. (Id.)
Discussion
With regard to the July 16, 2008 arrests of both defendants, I credit the testimony of Officers Diaz and Irizarry, including the facts regarding (i) the initial brief detention of Echevarria after he tossed a box and began to walk quickly away in a deserted area of the Bronx in the middle of the night, (ii) the officers' observance of marijuana in plain view in a partially opened cardboard box, and (iii) the subsequent arrests of Echevarria and Sanchez. In addition, Officer Diaz testified credibly that she saw more than one box being put in another police car after the defendants were in custody. (Tr. 82.) Officer Irizarry further testified credibly that "everything that was at the scene outside" was brought back to the Precinct to be inventoried. (Tr. 133.) The marijuana in the boxes found at the scene at the time of the arrests was secured in a room at the Precinct when Officers Irizarry and Diaz returned to the scene later that morning. When Officers Irizarry and Diaz returned to the Precinct, they properly vouchered that marijuana and the boxes and later brought the marijuana to the NYPD laboratory for testing. Accordingly, I find that there was nothing improper about the arrests of Echevarria and Sanchez and thus there is no basis to support suppression of the marijuana or the boxes recovered. Each NYPD officer's testimony was internally consistent and consistent in all material ways with the other officer. Any perceived minor differences between the witnesses' testimonysuch as how much of the first box was opened-demonstrate that the officers did not coordinate their testimony. So, too, the officers' forthrightness about what they did not observe or recallsuch as Officer Diaz's admission that she could not identify which of the boxes was the one she had seen partially open at the scenedemonstrates their honesty. Again, I credit their testimony as to the July 16, 2008 arrests.
With regard to the February 10, 2009 arrest, the Court had the benefit of a video of Trooper Murphy's stop and subsequent arrest of Echevarria. Trooper Murphy presented on the video as professional and courteous. Moreover, it is apparent from the approximately fifteen minutes of conversation between Echevarria and Trooper Murphy on the video that Echevarria can speak and understand English. Echevarria's consent to search the truck was given voluntarily after he was explicitly told he was free to leave. With regard to the traffic stop itself, which is not on the video, I credit Trooper Murphy's testimony in which he provided a credible justification for the stop, providing significant detail regarding how closely Echevarria's truck was following behind another commercial vehicle and citing the specific statute giving Trooper Murphy authority to make the stop.
*332 A. Burden of Proof
"On a motion to suppress evidence in a criminal trial, once [the defendant] has established a basis for his motion, the burden rests on the Government to prove, by a preponderance of the evidence, the legality of the actions of its officers." United States v. Wyche, 307 F.Supp.2d 453, 457 (E.D.N.Y.2004). See also United States v. Matlock, 415 U.S. 164, 178 n. 14, 94 S.Ct. 988, 39 L.Ed.2d 242 (1974) ("[T]he controlling burden of proof at suppression hearings should impose no greater burden than proof by a preponderance of the evidence."); United States v. Calvente, 722 F.2d 1019, 1023 (2d Cir.1983); United States v. Joseph, 332 F.Supp.2d 571, 574 (S.D.N.Y.2004) ("[B]oth the Supreme Court and Second Circuit have held that there are situations where the burden of persuasion at a suppression hearing can shift to the Government to prove, by a preponderance of the evidence, that the proffered evidence is valid.") (citations omitted).
B. The July 16, 2008 Arrests
1. The Marijuana Seized From the Partially Opened Box Was In Plain View
The "plain view" exception to the warrant requirement requires that: (1) the agents have lawful access to the place from which the item can be plainly viewed; (2) the objects seized are in plain view at the time they are discovered; and (3) it is "immediately apparent" to law enforcement at the time of the discovery that the item constitutes evidence or fruit of a crime. Horton v. California, 496 U.S. 128, 136, 110 S.Ct. 2301, 110 L.Ed.2d 112 (1990). For an item's criminal nature to be "immediately apparent," a reasonable agent must conclude that there is "probable cause" to believe that the item constitutes evidence or fruit of a crime, without conducting some further search of the object. United States v. Grubczak, 793 F.2d 458, 461 (2d Cir.1986); United States v. Padilla, 986 F.Supp. 163, 169 (S.D.N.Y. 1997) (citing Minnesota v. Dickerson, 508 U.S. 366, 375, 113 S.Ct. 2130, 124 L.Ed.2d 334 (1993)). In making this determination, the court is to consider whether probable cause exists from the perspective of a law enforcement officer. United States v. Moreno, 897 F.2d 26, 33 (2d Cir.1990), abrogated on other grounds as recognized by Ruggiero v. Krzeminski, 928 F.2d 558 (2d Cir.1991).
Both Officer Irizarry and Officer Diaz testified credibly that the box they observed on the ground behind the truck was partially open, which makes sense because Echevarria had tossed the box on the ground as Officer Diaz approached. (Tr. 80-81, 128-129.) Officer Diaz testified that although it was dark, she was able to see Echevarria, aided in part by light coming from police car headlights. (Tr. 74, 76.) In the part of the box that was open, aided by the use of a flashlight, both officers saw what appeared to be marijuana contained in a clear plastic bag. (Id.) Officer Diaz also recognized the clear plastic bag as packaging she had seen in prior marijuana arrests, and Officer Irizarry recognized the smell of marijuana coming from the box. (Tr. 81, 128-129.) It was therefore immediately apparent to both officers, based on their training and experience, that what they were seeing was the illegal narcotic marijuana. Grubczak, 793 F.2d at 461.
2. Law Enforcement Had Reasonable Suspicion To Conduct A Brief Investigative Detention Of Echevarria
It is well settled law that a police officer may conduct a brief "investigative detention" by stopping a person to investigate possibly criminal behavior, so long as at the time the officer effects the stop, the *333 officer has "`reasonable suspicion' to believe that criminal activity has occurred or is about to occur." United States v. Tehrani, 49 F.3d 54, 58 (2d Cir.1995) (citing United States v. Glover, 957 F.2d 1004, 1008 (2d Cir.1992)); see also Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). "Reasonable suspicion" arises when law enforcement officers are "aware of specific facts, together with rational inferences from those facts, that reasonably warrant suspicion." United States v. Brignoni-Ponce, 422 U.S. 873, 884, 95 S.Ct. 2574, 45 L.Ed.2d 607 (1975); see also United States v. Jaramillo, 25 F.3d 1146, 1150-51 (2d Cir.1994) (law enforcement may conduct a Terry stop without infringing the Fourth Amendment so long as the circumstances "would warrant a man of reasonable caution in the belief that a brief investigative stop is appropriate") (internal quotation and citations omitted).
"Reasonable suspicion" is measured by an objective test, Glover, 957 F.2d at 1010, and by reviewing the circumstances as a whole, not as discrete and separate facts, United States v. Barlin, 686 F.2d 81, 86 (2d Cir.1982); see also United States v. Arvizu, 534 U.S. 266, 273, 122 S.Ct. 744, 151 L.Ed.2d 740 (2002). The test for reasonable suspicion is a "rather lenient" one, United States v. Santana, 485 F.2d 365, 368 (2d Cir.1973), which the Second Circuit has described as "not a difficult one to satisfy," United States v. Oates, 560 F.2d 45, 63 (2d Cir. 1977) see United States v. Lawes, 292 F.3d 123, 127 (2d Cir.2002) (reasonable suspicion "not a high threshold"). It requires "considerably less than proof of wrongdoing by a preponderance of the evidence." Tehrani, 49 F.3d at 58; accord Arvizu, 534 U.S. at 274, 122 S.Ct. 744. Courts have repeatedly emphasized that reasonable suspicion is measured from the perspective of a trained and experienced law enforcement officer. United States v. Cortez, 449 U.S. 411, 418, 101 S.Ct. 690, 66 L.Ed.2d 621 (1981); United States v. Forero-Rincon, 626 F.2d 218, 221-22 (2d Cir.1980). The process "does not deal with hard certainties, but with probabilities" and properly takes into account that trained law enforcement agents may make observations and draw conclusions that go beyond the capacity of a lay person. Cortez, 449 U.S. at 418, 101 S.Ct. 690; United States v. Villegas, 928 F.2d 512, 517 (2d Cir.1991).
When evaluating the reasonableness of suspicion predicated on anonymous information such as 911 calls, courts must examine the totality of the circumstances. See United States v. Bayless, 201 F.3d 116, 133 (2d Cir.2000). The independent corroboration by police officers of "significant aspects of a tip's predictions" weighs heavily in the courts' analysis of the totality of the circumstances. See United States v. Walker, 7 F.3d 26, 31 (2d Cir.1993) (where police corroborated several aspects of an anonymous tip regarding a suspect carrying a firearm, including the suspect's physical appearance and predicted route of travel, there was reasonable suspicion to seize the suspect). In fact, it is. settled law that anonymous tips of criminal activity accompanied by independent, corroborated observations of police officers may compel police to conduct a Terry stop. See, e.g., United States v. Simmons, 560 F.3d 98, 108 (2d Cir.2009) (where officers were responding to 911 report of assault in progress in a high-crime area late at night and encountered defendant walking with his hands in his pockets and he did not comply with first order of police to stop, totality of circumstances supported conclusion that officers had reasonable suspicion to stop defendant); United States v. Bold, 19 F.3d 99, 103 (2d Cir.1994) (police officers' independent corroboration of anonymous tip regarding the type of car reportedly containing a gun and the location *334 supported the reliability of the tip and a Terry stop).
The totality of circumstances here, including the desolate location in the Bronx, the late hour, the fact that several details from the 911 call were immediately corroborated and that Echevarria threw a cardboard box behind the truck and then walked quickly away from the truck and Officer Diaz, who was wearing her NYPD uniform, are sufficient for Officer Diaz to have had a reasonable suspicion to believe that criminal activity had occurred or was about to occur.[5]Simmons, 560 F.3d at 108.
3. Officers Diaz and Irizarry Had Probable Cause To Arrest the Defendants
Warrantless arrests such as the ones in this case are fully justified if there is "probable cause when the defendant is put under arrest to believe that an offense has been or is being committed." United States v. Cruz, 834 F.2d 47, 50 (2d Cir.1987). Probable cause exists "if the law enforcement official, on the basis of the totality of the circumstances, has sufficient knowledge or reasonably trustworthy information to justify a person of reasonable caution in believing that an offense has been or is being committed by the person to be arrested." United States v. Patrick, 899 F.2d 169, 171 (2d Cir.1990) (citing, inter alia, Brinegar v. United States, 338 U.S. 160, 175-76, 69 S.Ct. 1302, 93 L.Ed. 1879 (1949), and Illinois v. Gates, 462 U.S. 213, 230-32, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983)).
After seeing what appeared to be a large clear plastic bag full of marijuana in the partially opened box Echevarria had just tossed to the ground and then seeing several similar bags after the box had been opened, Officer Diaz proceeded to place Echevarria under arrest. (Tr. 81.) Officer Irizarry, having also seen the alleged marijuana, and recognizing it by its smell, subsequently placed Sanchez under arrest. (Tr. 82-83, 128-130, 160.) Both officers therefore had sufficient knowledge to justify a person of reasonable caution believing that Echevarria and Sanchez were engaged in marijuana distribution. Patrick, 899 F.2d at 171.
4. The Remaining Marijuana Is Not Suppressed Because It Was Seized And Searched Pursuant To A Lawful Inventory Search
"[I]nventory searches of items lawfully obtained by the police fall within a well-defined exception to the Fourth *335 Amendment's warrant requirements." United States v. Thompson, 29 F.3d 62, 65 (2d Cir.1994). Furthermore, "[i]t is well recognized in Supreme Court precedent that, when law enforcement officials take a vehicle into custody, they may search the vehicle and make an inventory of its contents without need for a search warrant and without regard to whether there is probable cause to suspect that the vehicle contains contraband or evidence of criminal conduct." United States v. Lopez, 547 F.3d 364, 369 (2d Cir.2008) (collecting cases). Several rationales form the basis for the exception, including to protect the owner's property while it is in police custody, to insure against claims of lost, stolen or damaged property and to guard the police from danger. Thompson, 29 F.3d at 65; see also United States v. Perea, 986 F.2d 633, 644 (2d Cir.1993) ("arresting officers may `impound the personal effects that are with [the arrestee] at the time to ensure the safety of those effects or remove nuisances from the area'"). To be lawful, the inventory search must be reasonable. Lopez, 547 F.3d at 370. The reasonableness of an inventory search is determined by whether the officials conducting the search "act[ed] in good faith pursuant to standardized criteria... or established routine." Id. (quoting Thompson, 29 F.3d at 65) (internal quotes and citation omitted). See also Florida v. Wells, 495 U.S. 1, 4, 110 S.Ct. 1632, 109 L.Ed.2d 1 (1990) (law enforcement officials may open closed containers as part of an inventory search so long as they act in good faith pursuant to "standardized criteria ... or established routine").
If an inventory search of a vehicle or other property is inevitable, a search of the property at the time of arrest is proper even if the vehicle or other property has not yet been taken into custody. United States v. Perea, 986 F.2d 633, 644 (2d Cir.1993.) "Thus, if there has been a lawful arrest and an immediately ensuing search is not justifiable as incident to the arrest, a motion to suppress the proceeds of the immediate search may nonetheless be denied if the contents would inevitably have been discovered in a permissible inventory search." Id. (citing United States v. Jenkins, 876 F.2d 1085, 1088-89 (2d Cir.1989); United States v. Gorski, 852 F.2d 692, 696-97 (2d Cir.1988)).
In his affidavit in support of his motion, Echevarria states that he was "in possession of the truck and the items therein and the boxes that were searched and seized by the police." (January 15, 2009 Aff. ¶ 5.) After Echevarria and Sanchez were arrested, the partially-opened box, as well as additional boxes, were transported to the Precinct and put in a secure room so that they could be inventoried. (Tr. 82, 88, 132-133.) The only boxes of marijuana searched by Officers Diaz and Irizarry, and subsequently marked as evidence in this case, are the boxes that were transported from the scene immediately subsequent to the defendant's arrest. (Tr. 84, 87-88, 135; GX-6.) One of these boxes had marijuana in plain view. The other boxes were in the defendants' possession and therefore were properly inventoried upon the defendants' arrests. Thompson, 29 F.3d at 65.
Even if, as defendants assert, some of the boxes came from inside the truck at a later point in the day, the NYPD was permitted to conduct an inventory search of the truck subsequent to the arrests because an inventory search of the vehicle was inevitable. Perea, 986 F.2d at 644. Accordingly, the motions to suppress the remaining boxes of marijuana are denied on that basis.
*336 C. The February 10, 2009 Arrest
1. Law Enforcement Had Probable Cause or Reasonable Suspicion To Initiate A Motor Vehicle Stop Upon Witnessing Echevarria's Traffic Violation
"An ordinary traffic stop constitutes a limited seizure within the meaning of the Fourth and Fourteenth Amendments." United States v. Scopo, 19 F.3d 777, 781 (2d Cir.1994) (footnote omitted) (quoting United States v. Hassan El, 5 F.3d 726, 729 (4th Cir.1993)). A violation of vehicle and traffic laws may give rise to a valid stop under the Fourth Amendment whenever the officers have probable cause or a reasonable suspicion, based on specific and articulable facts, of such an infraction. Scopo, 19 F.3d at 781. Even a minor traffic offense is sufficient to justify stopping the driver of a vehicle. Id. at 782 (quoting United States v. Cummins. 920 F.2d 498, 500 (8th Cir.1990)). "It does not matter whether the stop was on account of the traffic violation, because reasonableness is evaluated from an objective standard." Whren v. United States, 517 U.S. 806, 813, 116 S.Ct. 1769, 135 L.Ed.2d 89 (1996); Holeman, 425 F.3d at 190 n. 1; United States v. Dhinsa, 171 F.3d 721, 725 (2d Cir.1998) ("an observed traffic violation legitimates a stop even if the detectives do not rely on the traffic violation").
Here, as noted above, Trooper Murphy credibly testified that he observed a traffic violation. Accordingly, he was justified in stopping Echevarria's vehicle. Scopo, 19 F.3d at 782.
2. Echevarria Gave Valid Voluntary Consent to the Officers To Search His Truck
Although a warrant and probable cause are often necessary in order to render a search reasonable, "[i]t is ... well settled that one of the specifically established exceptions to the requirements of both a warrant and probable cause is a search that is conducted pursuant to consent." Schneckloth v. Bustamonte, 412 U.S. 218, 219, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973). See also Florida v. Jimeno, 500 U.S. 248, 250-51, 111 S.Ct. 1801, 114 L.Ed.2d 297 (1991) ("[W]e have long approved consensual searches because it is no doubt reasonable for the police to conduct a search once they have been permitted to do so.") (citing Schneckloth, 412 U.S. at 219, 93 S.Ct. 2041); Holeman v. City of New London, 425 F.3d 184, 191 (2d Cir. 2005) ("One such exception [to the Fourth Amendment's protection against warrantless searches] is consent by a party whose property or person is to be searched.") (citing United States v. Elliott, 50 F.3d 180, 185 (2d Cir.1995)).
There are no magic words that are needed to establish consent to a search. See, e.g., United States v. Mire, 51 F.3d 349, 351-52 (2d Cir.1995) (per curiam) (response of "take a look" constituted consent to search extending to containers within a bag). Rather, "the ultimate question presented is whether the officer had a reasonable basis for believing that there had been consent to the search." United States v. Garcia, 56 F.3d 418, 423 (2d Cir.1995) (internal quotation and citation omitted). In making that determination, courts ask "what would the typical reasonable person have understood by the exchange between the officer and the suspect?" Jimeno, 500 U.S. at 251, 111 S.Ct. 1801 (citations omitted).
Some of the factors that bear upon the voluntariness of the consent include "whether the defendant was in custody and in handcuffs, whether there was a show of force, whether the agents told the defendant that a search warrant would be obtained, whether the defendant had knowledge of the right to refuse consent, and whether the defendant previously had *337 refused to consent," United States v. Lavan, 10 F.Supp.2d 377, 384 (S.D.N.Y.1998) (citations omitted), as well as the length of detention and the nature of the questioning, see United States v. Arango-Correa, 851 F.2d 54, 57 (2d Cir.1988) (five-hour detention did not vitiate consent where defendant was well treated and "not subjected to the kind of intensive interrogation over many hours or days which would overwhelm the frightened prisoner"). No one factor is determinative. See United States v. Crespo, 834 F.2d 267, 271-72 (2d Cir.1987) (citing Schneckloth, 412 U.S. at 218, 93 S.Ct. 2041) (finding that defendant had validly consented to search even though defendant was under arrest and in custody, was handcuffed, and had not been told that he could refuse to consent).
As is plainly evident on the video, Trooper Murphy spoke to Echevarria for approximately fifteen minutes, in English, and Echevarria gave every indication that he understood, including that he provided answers in English to questions on a variety of topics that required more than a yes or no response. Echevarria points to the fact that he was not told he could refuse to consent to a search of the truck (Br. at 10), but Trooper Murphy was under no obligation so to instruct him. See Crespo, 834 F.2d at 271-72. Echevarria also claims that the "manner and nature of Murphy's questions created a coercive atmosphere." (Br. at 10.) Having had the benefit of watching the actual interactions between Echevarria and Trooper Murphy on tape, I find that Trooper Murphy in no way created a coercive atmosphere. In fact, Trooper Murphy took pains to point out to Echevarria how he would legally be able to continue his trip and how to avoid getting docked pay when the traffic stop was over. (Tr. 36-37.) With regard to the other officers to whom Echevarria refers in further arguing that the environment was coercive (Br. at 12), those officers were behind the police car and therefore out of view of Echevarria (and the video) prior to Echevarria's consent. (Tr. 63.)
Echevarria also points to two instances where he changed his answer when Trooper Murphy asked a question a second time, arguing that this shows Echevarria did not understand what Trooper Murphy was saying. (Br. at 4, 10.) In both of these instances Echevarria is speaking about an area of the truck where marijuana was ultimately found. Having reviewed the video, I ascribe Echevarria's changed answers to consciousness of guilt, not any inability to understand English. When asked equally complex questions, such as whom he worked for, what kind of cargo he was hauling, where he was to deliver it, and about his relationship with his codriver, Echevarria spoke entirely in English and did not equivocate. (GX-1; Br. at 4.) Finally, Echevarria claims that he did not understand that he could get up when informed verbally in English, so Trooper Murphy had to use a hand gesture to show him. (Br. at 11.) The entire interaction to which Echevarria refers took place over ten seconds and is therefore no indication of whether Echevarria understood the oral direction prior to the hand gesture confirming it. (GX-1.)
What is plain, however, is that in response to being asked by Trooper Murphy if Trooper Murphy can search Echevarria's truck, Echevarria clearly said "yeah." Trooper Murphy then asked Echevarria to come to the front of the truck to get the keys, and Echevarria complied. After a nearly fifteen-minute discussion in which Echevarria was responsive to all questions in English, where Echevarria was not in handcuffs and no show of force was made, and Trooper Murphy acted in a courteous manner toward Echevarria, Trooper Murphy had a reasonable basis for believing that there had been consent to the search. *338 Schneckloth, 412 U.S. at 219, 93 S.Ct. 2041; Lavan, 10 F.Supp.2d at 384; Arango-Correa, 851 F.2d at 57.[6]
Conclusion
For the reasons set out above, defendants' motions to suppress [dkt. nos. 30 and 36] are denied.
A pretrial conference shall be held on March 4, 2010 at 10:30 a.m. In order to permit defense counsel time to consult with defendants prior to the conference, time until the conference is excluded from calculation under the Speedy Trial Act in the interests of justice.
SO ORDERED.
NOTES
[1] In reviewing defendants' submissions, I note that the defendants have shifted the focus of their argument for suppression of the marijuana found at the scene on July 16, 2008. In Echevarria's initial memorandum of law in support of his motion, Echevarria "challenge[d] the government's allegation that any marijuana was ever in plain view." (Echevarria's January 16, 2009 brief at 14.) Echevarria now focuses instead on the timing of his arrest and determining which of the boxes found at the scene contained which of the one-gallon bags of marijuana. (letter brief dated October 5, 2009 ("Br.") at 6-9.)
[2] In his brief, Echevarria alleges that Officer Diaz handcuffed Echevarria at the time she directed him to sit on the ground. (Br. at 2.) Officer Diaz did not testify that she placed Echevarria in handcuffs at the time she sat him on the ground; she testified credibly that she and her partner "proceeded to place Echevarria under arrest" after observing marijuana in the box that Echevarria had thrown. (Tr. 81.) Officer Irizarry, who was on the opposite side of the truck from Officer Diaz, and was walking northbound towards the end of the truck when Officer Diaz stopped Echevarria past the end of the truck, testified that he did not know specifically how Officer Diaz got Echevarria to sit down on the ground and that he did not know at what point Echevarria was handcuffed, although his recollection was that Echevarria was handcuffed before he was seated on the ground. (Tr. 77, 127, 147-149.)
[3] In their reply, defendants raise certain questions about when the additional boxes containing marijuana were taken from the back of the truck, when they were inspected and the like. Because, as indicated below, the police were entitled to conduct an inventory search and thus discovery was inevitable, such details are not relevant.
[4] Trooper Murphy had called for back up, and, prior to Echevarria's giving consent to search the truck, other officers arrived near the scene and were in a car parked approximately 50 feet behind Trooper Murphy's police car. (Tr. 63.) The other officers were not visible or audible on the video until after Trooper Murphy and Echevarria left the police car to get the keys to the truck.
[5] Echevarria argues, relying solely on the testimony of Officer Irizarry, who was several feet away at the time (Tr. 148), that if Officer Diaz handcuffed Echevarria immediately upon stopping him, the handcuffs themselves transformed the stop from a Terry stop to an arrest. (Br. at 6.) Even if I found the facts as Echevarria describes them, the brief use of handcuffs during a Terry stop does not elevate a Terry stop to an arrest, nor is an officer prohibited from using handcuffs when faced with a Terry stop subject who indicates a desire to leave, and attempts to do so, before the officer has completed the stop, especially when the stop is of short duration. United States v. Vargas, 369 F.3d 98, 101 (2d Cir. 2004); Kennedy v. McKiernan, 04 CV 1367, 2009 WL 2514067, at *5 (D.Conn.2009). Moreover, the cases cited by Echevarria are inapposite as they involve situations in which defendants were detained for long periods of time and/or removed to alternate locations to be questioned. For example, in Dunaway v. New York, 442 U.S. 200, 99 S.Ct. 2248, 60 L.Ed.2d 824 (1979), the Supreme Court found that even though the defendant was not officially arrested, the officer's behavior amounted to an arrest because the defendant was taken from a neighbor's home to a police car, transported to a police station, and placed in an interrogation room where he was questioned. Here, almost immediately after putting Echevarria on the ground, Officer Diaz saw the marijuana in plain view and then had probable cause to arrest Echevarria.
[6] Notably, approximately five months before being stopped by Trooper Murphy, Echevarria sought and was granted a modification of his bail conditions to allow him to travel outside of New York and Florida on the condition that he "provide consent to the United States Attorney for the Southern District of New York and law enforcement agents to search any vehicle he is driving for his employer when traveling beyond the scope of his current travel restrictions." (Bail modification so ordered by Magistrate Judge Gabriel W. Gorenstein on August 28, 2008, emphasis added.) Warrantless searches relying on similar search conditions have been upheld in the analogous contexts of parole and probation. See generally Samson v. California, 547 U.S. 843, 126 S.Ct. 2193, 165 L.Ed.2d 250 (2006); United States v. Knights, 534 U.S. 112, 122 S.Ct. 587, 151 L.Ed.2d 497 (2001). Here, the recent bail modification lends further support to my conclusion that Echevarria understood and voluntarily consented to Trooper Murphy's request to search his truck.
|
359 F.3d 957
LITTLE ROCK SCHOOL DISTRICT, Appellee,v.Alexa ARMSTRONG; Karlos Armstrong; Khayyam Davis; Alvin Hudson, Tatia Hudson, Lorene Joshua; Leslie Joshua; Stacy Joshua; Wayne Joshua; Sarah Facen; Derrick Miles; Janice Miles; John M. Miles; NAACP; Joyce Person; Brian Taylor; Hilton Taylor; Parsha Taylor; Robert Willingham; and Tonya Willingham, Appellants.
No. 02-3867EA.
No. 03-1147EA.
United States Court of Appeals, Eighth Circuit.
Submitted: September 11, 2003.
Filed: March 2, 2004.
Robert Pressman, argued, Lexington, MA (John W. Walker, rebuttal, Little Rock, AR), for appellant.
Christopher J. Heller, argued, Little Rock, AR, for appellee.
Before WOLLMAN, HEANEY, and RICHARD S. ARNOLD, Circuit Judges.
RICHARD S. ARNOLD, Circuit Judge.
1
This case consolidates two appeals, both arising from the Little Rock School District's request for unitary status. First, the Joshua Intervenors1 appeal from the District Court's2 denial of their Motion for Recusal of District Judge and Vacating of Orders, Rulings, and Judgments. We review a district court's denial of recusal for abuse of discretion. See In re Hale, 980 F.2d 1176, 1178 (8th Cir.1992); United States v. Walker, 920 F.2d 513, 516 (8th Cir.1990). We conclude that Judge Wilson's representation of Judge Henry Woods at a much earlier stage of the case, and on far different issues, did not involve the same "matter in controversy" for purposes of 28 U.S.C. § 455(b)(2); thus, we affirm the denial of the Joshua Intervenors' Motion for Recusal.
2
The Joshua Intervenors also appeal from the District Court's judgment granting the Little Rock School District (LRSD) partial unitary status. The Joshua Intervenors assert: (1) that the District Court erred by not requiring and considering additional reports from the Office of Desegregation Monitoring (ODM); and (2) that the District Court's finding of substantial compliance with the Revised Desegregation and Education Plan was erroneous. We hold that the District Court did not err by failing to require new written reports from the ODM, and that the District Court's findings of fact are not clearly erroneous; thus, we affirm the grant of partial unitary status.
3
Because the facts relevant to each issue on appeal are different, we address them separately. In Part I, we address the issue of disqualification. In Part II, we address whether the District Court should have required new written reports from the ODM. Finally, in Part III, we address whether the District Court erred in finding that LRSD substantially complied with the Revised Plan in most respects.
I.
4
This litigation began in 1982 and has been in and out of this Court and the District Court several times — it is complex to say the least. We briefly highlight the events relevant to the issue of the disqualification of Judge Wilson.
5
In 1987, LRSD and the Joshua Intervenors sought to disqualify Judge Henry Woods,3 who was then presiding over the case. The parties asserted as grounds for disqualification that during Judge Woods's private law practice, one of his partners had represented parties who participated as amici curiae in a related case, and that Judge Woods's impartiality was called into question by his comments at a meeting with students. Judge Wilson, then in private practice, represented Judge Woods for the limited purpose of the mandamus proceedings, defending Judge Woods's decision not to recuse himself.4
6
In the current proceeding, begun by LRSD's motion that it be released from court supervision, the Joshua Intervenors sought the recusal of Judge Wilson under 28 U.S.C. § 455(b)(2), which requires a judge to disqualify himself "where in private practice he served as lawyer in the matter in controversy." After Judge Wilson entered an order on September 13, 2002, granting LRSD partial unitary status, the Intervenors filed a Motion for a Hearing Regarding the Relevance of 28 U.S.C. § 455 to the Present Proceedings. Judge Wilson denied this motion on October 29, 2002. Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, 2002 WL 31465311 (E.D.Ark.2002). Thereafter, on November 25, 2002, the Joshua Intervenors moved for disqualification of Judge Wilson. Judge Wilson denied this motion because, among other reasons, he had never served, in his view, as a lawyer in the "matter in controversy." Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, No. 4:82CV00866 (E.D.Ark. Dec. 20, 2002). The Joshua Intervenors appeal.
7
We must determine whether Judge Wilson's representation of Judge Woods in the mandamus proceeding in 1987 involved the same "matter in controversy" as the present questions before us for purposes of 28 U.S.C. § 455(b)(2). Because the mandamus proceeding did not touch upon the merits of the case, we conclude that it was not a part of the same "matter in controversy."
8
The Joshua Intervenors contend that Judge Wilson's participation was part of the same matter in controversy because it was part of a single case. The language chosen by Congress, "matter in controversy," is not defined by the statute. However, Congress easily could have substituted the word "case" for the words "matter in controversy," but did not do so. This deliberate choice by Congress demonstrates an intent that the words "matter in controversy" mean something other than what we commonly refer to as a "case." In fact, Congress used the words "proceeding," "case in controversy," and "subject matter in controversy" in various other subsections of § 455(b) to describe situations where a judge must disqualify himself. Thus, we must assume that Congress ascribed a particular meaning to the words "matter in controversy," and we must try to discern that meaning.
9
We note that Judge Wilson represented Judge Woods at the mandamus proceedings, which were given a separate docket number from the rest of the case in this Court. This circumstance, though relevant, is not enough in itself to enable us to conclude that the disqualification proceeding was not the same "matter in controversy" as the present appeal. As we have indicated, the phrase "matter in controversy" must mean something other than the word "case," and so we do not rely on this technical distinction. Instead, we look to the substance of the issues argued and decided in the two proceedings.
10
In Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, 839 F.2d 1296 (8th Cir.1988), we discussed, but did not decide, whether a matter in controversy could extend beyond a single case. Even if a matter in controversy could be more extensive than a single case, we concluded that the facts before us did not support such a conclusion because the cases involved, "to a large extent, different issues and different remedies." Id. at 1302. We think this reasoning is useful in determining whether a matter in controversy may be less extensive than a case.
11
Judge Wilson's representation of Judge Woods was restricted solely to the issue of recusal and did not go to the merits of the case. Judge Wilson was involved in the case solely for the mandamus proceedings and, in the course of his representation, never addressed the merits of the case or expressed any opinion about them. The issues before Judge Wilson in the present matter are wholly unrelated to his prior representation of Judge Woods.
12
Although the case law is slim in this area, we find support for our position in In re Apex Oil Co., 981 F.2d 302 (8th Cir.1992). In Apex Oil, Judge Loken found his recusal unnecessary where he and his former law firm were previously involved with plaintiffs' claim for damages from an oil spill and where, later, his law firm filed claims on behalf of plaintiffs in Apex Oil's bankruptcy proceedings. Id. at 304-05. The question was whether the plaintiffs' claim for damages constituted the same matter in controversy as the later claims in bankruptcy when both resulted from the same oil spill. Id. at 303. Although acknowledging that bankruptcy proceedings are atypical because they are conducted under an umbrella proceeding, Judge Loken concluded that the cases were not "sufficiently related" so as to constitute the same matter in controversy. Id. at 304. Applying this analysis to our situation, we conclude that there is not a sufficient relationship between the recusal proceedings with respect to Judge Woods and the issues now before us on the merits to make them the same "matter in controversy." Nor do we think that any impartial observer could reasonably think that Judge Wilson's impartiality should be called into question. Not only was his prior representation of Judge Woods wholly distinct; the issues before the Judge in the current proceeding involved the current version of the parties' agreement to settle the underlying case, an agreement that was never before Judge Woods, and that was not even in existence until long after he voluntarily relinquished the case.
II.
13
As we have noted, this appeal arises from an interdistrict desegregation case filed by LRSD in 1982. As part of that case, the parties agreed to a settlement plan in 1989. However, as time passed, portions of that plan proved unworkable, and the parties agreed to the Revised Desegregation and Education Plan. This plan was approved by the District Court and this Court.
14
On March 15, 2001, LRSD asked the District Court to declare it unitary under § 11 of the Revised Plan. On July 25, 2001, the Joshua Intervenors filed an opposition to this request. The opposition, App. of Appellants 185-86, made the following argument, among many others:
15
The Joshua Intervenors believe further that the Court must have before it a written response to the district's plan or other written analysis regarding that plan from the Court's Office of Desegregation Monitoring (ODM) before the Court can issue a final opinion regarding the matter. Otherwise, any assessment by the Court would be incomplete and not keeping with the expectations of the Eighth Circuit Court of Appeals when it required the establishment of the ODM to assist the Court in determining and effectuating desegregation compliance.
16
This opposition was filed while the case was still before Chief Judge Wright (who had taken the case after Judge Woods had removed himself from it). She then conducted five and one-half days of evidentiary hearings, ending on November 20, 2001. On January 3, 2002, Chief Judge Wright withdrew from the case, and it was reassigned to Judge Wilson. He held three additional days of evidentiary hearings on July 22, 23, and 24, 2002.
17
The Joshua Intervenors' second major argument on appeal is that the District Court erred in making findings and entering judgment without directing ODM to prepare additional monitoring reports on LRSD's compliance with the Revised Plan. The Joshua Intervenors point out that the ODM was created in the first place at the direction of this Court. See Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, 921 F.2d 1371, 1388 (8th Cir. 1990).
18
The District Court had before it some relevant materials from the ODM: a report on LRSD's preparations for implementation of the Revised Plan, filed August 11, 1999, and a report of disciplinary sanctions in the Little Rock School District, filed on June 14, 2000. As to the first report, the Court observed that it "indicated that, overall, LRSD was doing a satisfactory job of implementing the Revised Plan." Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, 237 F.Supp.2d 988, 1048 (E.D.Ark.2002). The District Court did not view the second report as having much value. The Joshua Intervenors argue that the District Court should have had the ODM prepare an additional report or reports before making any findings. They point out that "ODM had gained considerable expertise, preparing at least 49 reports." Brief for Appellants 39.
19
In response, LRSD argues that this point was not properly raised in the District Court. Certainly it is true that the Court never entered a written order expressly disposing of the request that additional monitoring reports be prepared. Before the case was transferred to Judge Wilson, however, Chief Judge Wright effectively denied the Intervenors' request, saying:
20
And of course, you are free, Mr. Walker, to call the Office of Desegregation Monitoring as witnesses, as well, I mean, those people as witnesses to the extent you think they have knowledge on the matters at issue. And furthermore, and I talked with Ms. Marshall [the head of ODM] about this, I don't mind Ms. Marshall telling you, sharing with you the information that she has, but if she does that I want her to share it with everyone else too.
21
Tr. of June 29, 2001, 27-28. The Joshua Intervenors, in response to this invitation or otherwise, did not call anybody from the ODM as a witness.
22
As we have noted, the request that additional monitoring reports be required was not the subject of a separate motion, but rather a matter mentioned, almost in passing, in a pleading filed by the Joshua Intervenors. App. of Appellants 185-86. As far as we can tell, the request was never renewed on the record, either in writing or in open Court, during the days of evidentiary hearings conducted by Judge Wilson, or in any other manner. We nevertheless assume for present purposes that the point is properly before us, and we hold that it is without merit. The ODM, as the Joshua Intervenors point out, was created at the direction of this Court, at the time of our initial approval of the settlement agreement, but the ODM was to be under the supervision of the District Court and to act as an arm of that Court in ensuring that the settlement agreement was followed. It was and remains the job of the District Court, in its discretion, to determine how the ODM should be used. A choice to rely on the existing materials prepared by the ODM, and to eschew the preparation of additional reports, is certainly not an abuse of discretion. Two further points are important. First, the Joshua Intervenors could have, but did not, call someone from the ODM to testify. Second, no offer of proof was made. We do not know what ODM's position would have been if it had been asked. In this situation, it is simply impossible to say that the decision not to request the production of additional papers had any effect on the outcome of this case.
III.
23
The Revised Plan "supersede[s] and extinguish[es] all prior agreements and orders" in the case, with limited exceptions. App. of Appellants 87. Unlike the previous settlement agreement, the Revised Plan contains a specific procedure by which LRSD can attain unitary status. Section 11 of the Revised Plan provides:
24
At the conclusion of the 2000-01 school year, the district court shall enter an order releasing LRSD from court supervision and finding the LRSD unitary with regard to all aspects of school operations provided that LRSD has substantially complied with its obligations set forth in this Revised Plan. In anticipation of release, LRSD shall issue a report on March 15, 2001 indicating the state of LRSD's compliance with the Revised Plan. Any party challenging LRSD's compliance bears the burden of proof. If no party challenges LRSD's compliance, the above-described order shall be entered without further proceedings.
25
App. of Appellants 110.
26
Although not required by § 11 of the Revised Plan, one year before the final report required by § 11 was due, LRSD filed an interim report to demonstrate its progress toward compliance. App. of Appellee 71. On March 15, 2001, as required by the Revised Plan, LRSD filed its final report, which supplemented and updated the information provided in the interim report. App. of Appellee 245. The Joshua Intervenors filed objections to this report on June 25, 2001, challenging LRSD's substantial compliance with various sections of the Revised Plan.App. of Appellants 185.
27
After holding evidentiary hearings on the Joshua Intervenors' objections, the District Court issued an order granting LRSD partial unitary status. See Little Rock Sch. Dist., 237 F.Supp.2d at 1086. The District Court denied LRSD unitary status under § 2.7.1 of the Revised Plan, requiring LRSD to assess annually the academic programs promulgated under § 2.7. Id. at 1081-82. LRSD has not cross-appealed the District Court's ruling on § 2.7.1, and it is not before us. This issue remains pending in the District Court.
28
On appeal, the Joshua Intervenors argue that the District Court erred in granting partial unitary status to LRSD. Specifically, the Joshua Intervenors challenge the District Court's finding of substantial compliance with the following sections: (1) § 2.1, Good Faith; (2) §§ 2.5-2.5.4, Student Discipline; (3) § 2.6, Extracurricular Activities; and (4) §§ 2.6-2.6.2, Advanced Placement Classes.
29
We review the District Court's findings of fact for clear error. See Nash Finch Co. v. Rubloff Hastings, L.L.C., 341 F.3d 846, 850 (8th Cir.2003). Thus, we must affirm unless the findings are, in our opinion, clearly erroneous, which means that we must have a "definite and firm conviction" that the District Court was mistaken. Ibid. If "there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Id. at 851 (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985)).
30
We also note that the Joshua Intervenors bear the burden of proof. Under § 11 of the Revised Plan, "[a]ny party who challenges the Little Rock School District's compliance bears the burden of proof." App. of Appellants 110. Section 11 of the Revised Plan also compelled the District Court to enter an order granting unitary status to LRSD unless the Joshua Intervenors met this burden. Ibid. We hold that the District Court did not clearly err in finding that the Joshua Intervenors had not met their burden with respect to the four subject-matter areas on appeal. Thus, we affirm.
A.
31
The Joshua Intervenors appeal from the District Court's judgment granting LRSD unitary status under § 2.1 of the Revised Plan, which provides:
32
LRSD shall in good faith exercise its best efforts to comply with the Constitution, to remedy the effects of past discrimination by LRSD against African-American students, to ensure that no person is discriminated against on the basis of race, color or ethnicity in the operation of the LRSD and to provide an equal educational opportunity for all students attending LRSD schools.
33
App. of Appellants 88. This section places an independent duty on LRSD to exercise its "best efforts" and to act in "good faith" in attempting to remedy the effects of discrimination.
34
The Joshua Intervenors argue that LRSD did not act in good faith. As evidence, they allege that Central High School is still functionally segregated, although the building itself has been integrated. See Brief for Appellants 44-46. Specifically, the Joshua Intervenors argue that the advanced-placement program segregates students into different classrooms, which are the functional equivalent of different schools. Ibid. Moreover, they assert that the teachers are assigned to advanced-placement courses in a racially segregated manner — white teachers teaching advanced-placement classes and African-American teachers teaching regular classes. Ibid. The Joshua Intervenors also suggest that segregation seeps outside of the classroom and into extracurricular activities. Ibid.
35
The obligation of good faith under § 2.1 of the Revised Plan is separate from, and independent of, other affirmative obligations undertaken by LRSD pursuant to § 2 of the Revised Plan. Thus, it is possible for LRSD to have acted in good faith, meeting its obligation under § 2.1, even though it did not meet other affirmative obligations imposed by the Revised Plan.
36
After the Revised Plan was adopted, the Little Rock School Board enacted fifteen different policies related to its obligation of good faith and took steps to ensure that all administrators and teachers were aware of these new policies. LRSD also hired Dr. Terrence Roberts, Tr. of July 24, 2002, at 615-16, and Dr. Steven Ross, Tr. of July 23, 2002, at 539, as desegregation experts. Dr. Roberts testified that he had been actively involved in reviewing policies and procedures. Tr. of July 24, 2002, at 619-20. He also testified that he had developed training programs for teachers and other staff members. Ibid. Dr. Roberts testified that he told the Board that LRSD had directed much energy and effort toward meeting all the criteria in the Revised Plan and that LRSD had the potential for being a model school district for the nation. Id. at 647. Dr. Roberts criticized LRSD for having a "compliance mentality" because some individuals were interested only in meeting the requirements of the Revised Plan. Id. at 630-31. However, as explained by the District Court, compliance was exactly the issue at hand. LRSD was under constant scrutiny and had to be very careful that it met its obligations. Little Rock Sch. Dist., 237 F.Supp.2d at 1045.
37
Under § 8.2 of the Revised Plan, a detailed procedure for addressing compliance issues was established whereby the parties would attempt to solve compliance issues before submitting them to the District Court for resolution. The Board paid the Joshua Intervenors to monitor LRSD's compliance with the Revised Plan. During the term of the Revised Plan, the Joshua Intervenors raised only five compliance issues, which were all resolved without resorting to the District Court. App. of Appellee 415. None of the issues raised in opposition to the final report was previously raised by the Joshua Intervenors. The District Court found that the purpose of the dispute mechanism under § 8.2 was to avoid any surprises when LRSD filed the final report, and that LRSD reasonably relied on the Joshua Intervenors to raise any problems in a timely fashion. Little Rock Sch. Dist., 237 F.Supp.2d at 1043. The District Court also found that the interim report placed the Joshua Intervenors on notice of all the problems, but they did not respond. Ibid. Although § 11 does not require that any objections be previously raised under § 8.2, the District Court found that Intervenors' failure to raise these issues was a factor to consider in deciding whether LRSD substantially complied with the Revised Plan. Id. at 1043-44.
38
For the reasons stated above, we find no clear error in the District Court's finding of substantial compliance with § 2.1 of the Revised Plan.
B.
39
The Joshua Intervenors also appeal from the District Court's judgment granting LRSD unitary status under §§ 2.5-2.5.4, relating to student discipline. Although §§ 2.5.1-2.5.4 impose specific obligations with regard to discipline, the Joshua Intervenors assert in particular that LRSD did not meet its obligation under § 2.5, which provides:
40
LRSD shall implement programs, policies and/or procedures designed to ensure that there is no racial discrimination with regard to student discipline.
41
App. of Appellants 90. This section requires LRSD to create and implement programs and policies designed to eliminate discriminatory practices from student discipline. It does not require, however, that LRSD in fact absolutely eliminate racial disparity from student discipline.
42
The Joshua Intervenors argue that the District Court improperly found that LRSD had substantially complied with § 2.5 because the Court misconstrued the meaning of the words "to ensure." Brief for Appellants 40. Interpretation of the Revised Plan is a question of law, which we review de novo, and we hold that the District Court did not err in construing the obligation imposed by § 2.5.
43
The Joshua Intervenors argue that "to ensure" means to make sure that racial discrimination does not occur. Ibid. If "to ensure" were the only operative phrase in the provision, the argument might be well taken. But § 2.5 does not require LRSD to ensure anything. It merely requires that LRSD "implement programs, policies, and/or procedures designed to ensure...." (Emphasis ours.) The thrust of the provision is that certain programs with the purpose of ensuring that there is no racial discrimination with regard to student discipline be instituted. This does not mean that the programs must be perfectly efficacious. In addition, the object is to eradicate discrimination, which is not necessarily the same thing as disparity. Racial disparity may exist without discrimination. Discrimination, of course, can cause disparity, but it is not the only possible cause.
44
Disparity in discipline is a nation-wide problem. The District Court cited something called "total suspension index." The total suspension index demonstrates disparity in discipline and is calculated by dividing the percentage of African-American students expelled or suspended by the percentage of African-American students in the population, and comparing this number with that for white students. The District Court found that LRSD's suspension index was between 1.25-1.31 for the years 1997-2001. Little Rock Sch. Dist., 237 F.Supp.2d at 1054. In other words, to take 1997 as an example, African-American students were 1.25 times as likely, so to speak, to be disciplined or suspended than white students. The national index for 1998 was 2.24, and the Arkansas index was 2.16. The District Court specifically found that the Joshua Intervenors did not meet their burden of proving that disproportionate discipline imposed on African-American students was the result of discrimination. Little Rock Sch. Dist., 237 F.Supp.2d at 1057. This finding is not clearly erroneous.
45
LRSD enacted several policies to implement its obligations regarding student discipline and created a Compliance Plan, which outlined how LRSD planned to implement the Revised Plan and who bore responsibility for such implementation. Under the Compliance Plan, Junious Babbs was responsible for monitoring student discipline. An ombudsman, James Washington, was appointed pursuant to § 2.5.3 to ensure that students were treated fairly throughout the discipline process. The ombudsman was charged with shepherding students through the discipline process, including making students aware of the rules, acting as an advocate for students involved in the disciplinary process, and investigating parental and student complaints of discrimination.
46
The interim and final reports issued by LRSD focused on the decrease in overall suspensions and expulsions, due in part to programs developed by LRSD, such as behavior modification programs and alternative learning centers. App. of Appellee 85-87, 273-74. Although the reduction in suspensions for African-American students was not so large as that of white students, the District Court found that the proportion of suspensions received by African-American students remained the same. Little Rock Sch. Dist., 237 F.Supp.2d at 1051. Neither the interim report nor the final report focused on the fact that racial disparity existed among the students who received suspensions or expulsions, and the District Court found that LRSD could have sorted the data in such a way as to give a more meaningful analysis. Id. at 1051-52. However, the District Court found that the Joshua Intervenors had access to the raw data and never raised the issue. Id. at 1052. More specifically, the District Court found that the reports did not mislead the Joshua Intervenors. Ibid.
47
The ODM produced a Report on Disciplinary Sanctions in LRSD, which showed that African-American students received a disproportionate number of suspensions and expulsions. However, the District Court specifically found that this report was not intended to address the effectiveness of any programs that were instituted to address fairness in discipline. Id. at 1052-53. The District Court also noted that the report suggested that factors outside of the schools might affect which students receive discipline, such as home environment, family values, and whether the home is a single-parent home. Id. at 1052. The report did not contain a specific analysis of the facts of each suspension or expulsion to help determine whether discrimination occurred. Id. at 1052-53. However, the report did conclude that the racial disparity meant that LRSD "has certainly not eliminated nor even abated racial discrimination in suspensions...." Id. at 1053 (quoting Report on Disciplinary Sanctions in LRSD, June 14, 2000). The District Court rejected this conclusion as speculative because it was based on raw statistics. Ibid.
48
Dr. Linda Watson, the Assistant Superintendent for Student Hearings, was responsible for monitoring compliance with the Student Handbook. She reviewed every long-term suspension or expulsion and all appeals from short-term suspensions. Tr. of Nov. 19, 2001, 36-37. If the procedures of the Student Handbook were not followed, Dr. Watson overturned the punishment and removed it from the records. Ibid. Although Dr. Watson acknowledged that African-American students were more frequently suspended than white students, she believed this was due to the fact that they more frequently engaged in conduct prohibited by the Student Handbook. Id. at 83-84. She also testified that she believed this was due primarily to socioeconomic factors. (Some of these factors may be caused by or related to racial discrimination, but they are not the fault of the present administration of LRSD.) The District Court specifically found that the testimony of all the administrators involved in the disciplinary process was credible. Little Rock Sch. Dist., 237 F.Supp.2d at 1050.
49
For these reasons, we find no clear error in the District Court's finding of substantial compliance with § 2.5 of the Revised Plan.
C.
50
The Joshua Intervenors also appeal from the District Court's judgment granting LRSD unitary status under §§ 2.6 and 2.6.3, relating to extracurricular activities. Although § 2.6.3 imposes a specific obligation with regard to transportation for extracurricular activities, the Joshua Intervenors assert that LRSD did not meet its obligation under § 2.6, which provides:
51
LRSD shall implement programs, policies and/or procedures designed to promote participation and to ensure that there are no barriers to participation by qualified African-Americans in extracurricular activities....
52
App. of Appellants 90-91.
53
The Joshua Intervenors argue that racial discrimination occurred in extracurricular activities, evidenced by the fact that many extracurricular activities did not have a proportionate share of African-American participants. Brief for Appellants 46. Certain activities' participants, such as tennis, swimming, quiz bowl, mock trial, and cheerleading, were predominantly white. The Joshua Intervenors also assert that there were barriers to participation, including costs of participation and lack of transportation.
54
The Joshua Intervenors argue that racial disparities in extracurricular activities are the result of discrimination. However, as noted by the District Court, nothing in § 2.6 of the Revised Plan required LRSD to impose quotas on extracurricular activities. Little Rock Sch. Dist., 237 F.Supp.2d at 1058. LRSD undertook to promote the participation of African-American students and to eliminate barriers to participation. As we noted above with respect to § 2.5, this provision does not make LRSD an insurer. It requires only that the District "implement programs, policies and/or procedures designed to promote participation and to ensure," et cetera. (Emphasis ours.)
55
The final report noted a marked increase in African-American students' participation in extracurricular activities following the enactment of the new policies. App. of Appellee 276-77. The final report also demonstrated that LRSD attempted to eliminate barriers to participation by having buses transport students to and from extracurricular activities. Id. at 278. Although the record does not establish which students took advantage of the extra buses, the final report stated that "no extracurricular activity transportation request made by an eligible student has been denied." Ibid. As noted by the District Court, the Joshua Intervenors bore the burden of proof on this issue, and they did not provide a single witness to testify that African-American students were unable to participate because of a lack of transportation. Little Rock Sch. Dist., 237 F.Supp.2d at 1059.
56
The Joshua Intervenors also assert that the costs of certain activities create a barrier to participation. Although there are costs associated with certain activities, Dr. Marian Lacey, Assistant Superintendent of Secondary Schools, testified that each school had a discretionary fund which could be used to help students pay the costs of extracurricular activities. Tr. of July 24, 2002, 775-76. The District Court also found that the Joshua Intervenors presented no testimony that any student was denied an opportunity to participate because of costs. Little Rock Sch. Dist., 237 F.Supp.2d at 1059-60.
57
The Joshua Intervenors asserted that certain schools, which were primarily African-American, did not have the same extracurricular activities as other schools, and that this violated LRSD's duty to promote participation. However, the District Court found that each school determined which extracurricular activities to offer on the basis of student interest, and if enough interest existed, each school offered a stipend to sponsors of those activities. Id. at 1060. The District Court concluded that certain activities were missing at certain schools not because of discrimination but instead because of lack of student interest. Ibid.
58
The Joshua Intervenors presented several students' testimony to support their assertion that African-American students were not encouraged to participate or were prevented from participating in extracurricular activities. The District Court did not find this testimony impressive. Id. at 1061. Questions of credibility and inferences to be drawn from facts must generally be left to the trial court.
59
The Joshua Intervenors bore the burden of proving that LRSD was not implementing programs, policies, or procedures designed to promote participation and ensure there were no barriers to participation by qualified African-Americans in extracurricular activities. We hold that the District Court did not err in determining that the Joshua Intervenors failed to meet this burden.
D.
60
The Joshua Intervenors also appeal from the District Court's order granting LRSD unitary status under §§ 2.6-2.6.2, relating to advanced-placement classes and honors programs. While §§ 2.6.1 and 2.6.2 impose specific duties on LRSD to provide training programs for teachers to identify and encourage qualified African-American students to participate in advanced-placement programs and to assist African-American students in being successful in advanced-placement programs, the Intervenors do not complain that these specific provisions were violated. Instead, they focus on § 2.6, which imposes a more general duty:
61
LRSD shall implement programs, policies and/or procedures designed to promote participation and to ensure there are no barriers to participation by qualified African-Americans in ... advanced placement courses, honors and enriched courses and the gifted and talented program.
62
App. of Appellants 90-91. The phraseology of this provision is similar to others discussed above.
63
The Joshua Intervenors assert that the District Court erred in finding no barriers to participation in advanced-placement courses. The low number of African-American teachers assigned to advanced-placement courses, they say, is a barrier to participation. Brief for Appellants 43-44. The Joshua Intervenors rely primarily on the testimony of Dr. Michael Faucette, an English teacher at Central High School. Dr. Faucette testified that although there were eight African-American teachers and eight white teachers in Central High's English Department, African-American teachers taught only a few of the advanced-placement sections. Tr. of July 22, 2002, 176-80. Dr. Faucette, an African-American teacher, did not teach any of the advanced-placement sections. Id. at 177.
64
The Little Rock School District Board created a regulation setting forth criteria to help teachers identify African-American students for participation in advanced-placement courses. Although this was one factor used in identifying students for participation in advanced-placement courses, enrollment was still open to any student who showed the proper level of motivation and commitment. App. of Appellee 279. Teachers were then required to monitor performance and behavior to ensure that students placed in those courses would remain there.
65
LRSD studied methods to increase enrollment in advanced-placement courses and determined that pre-advanced-placement courses were necessary to prepare students better and earlier. LRSD implemented pre-advanced-placement courses for sixth and seventh-grade students. These programs have been highly successful, and the District Court found that as a result of these programs, LRSD has added over 600 African-American students to its advanced-placement courses for juniors and seniors. Little Rock Sch. Dist., 237 F.Supp.2d at 1063.
66
LRSD has also implemented the SMART Program, a summer program designed to teach algebra to students to prepare them for algebra in the eighth grade. App. of Appellee 112. The District Court found that during the term of the Revised Plan, at least 95% of the students attending the SMART Program were African-American. Little Rock Sch. Dist., 237 F.Supp.2d at 1063. Evaluations of the SMART Program determined that it was a success. Tr. of July 24, 2002, 678.
67
LRSD also instituted a "Teachers of Color" program to increase the number of African-American advanced-placement teachers. Id. at 671. The principal at each middle school and high school determined who would be assigned to teach each class. However, the principals were constrained by the collective-bargaining agreement, which required consideration of a teacher's experience and seniority. Tr. of July 22, 2002, 90. An advanced-placement teacher also needed to be qualified through the state. Although Dr. Faucette testified about the racial composition of advanced-placement teachers in Central High School's English Department, he did not know about other advanced-placement sections at Central High School. Little Rock Sch. Dist., 237 F.Supp.2d at 1065. The District Court found Dr. Faucette's testimony unreliable. Ibid.
68
The Joshua Intervenors also point to racial disparity in the Hall High School University Studies program, a program developed in conjunction with the University of Arkansas at Little Rock that provided an opportunity for students to earn college credit for classes taken at Hall High School. Admission requirements were developed by the University of Arkansas. Tr. of July 24, 2002, 727-28. In order to receive college credit for the courses, students were required to pay tuition of approximately $150 per course. Tr. of July 22, 2002, 114. The Joshua Intervenors assert that the tuition payments created a barrier to participation for African-American students. Brief for Appellants 42-43.
69
The District Court found that during the 1999-2000 school year, 58% of the students participating in Hall High School's University Studies Program were African-American, while African-American students comprised 71% of all students at Hall High School. Little Rock Sch. Dist., 237 F.Supp.2d at 1066. During 2000-2001, only 35% of the students in the University Studies Program were African-American, while African-American students comprised 72% of all students at Hall High School. Ibid. However, the Court found that the Joshua Intervenors presented no evidence that any student was denied admission to the University Studies Program because of inability to pay. Ibid. Testimony also indicates that the school solicited a donation to cover the cost for at least one African-American student who wished to participate but was unable to pay. Tr. of July 24, 2002, 802.
70
For these reasons, we hold that the District Court did not err in finding that LRSD substantially complied with its obligations under § 2.6 of the Revised Plan.
71
* * * * * *
72
The judgment is affirmed. It goes without saying, but we say it anyway, that LRSD remains fully subject to the Constitution and all other applicable laws, and that these obligations are enforceable by appropriate legal action.
Notes:
1
This group of school children and parents are, as a practical matter, the plaintiffs in the case at its present juncture. The Little Rock School District, which actually initiated the case in 1982, is effectively the defendant for purposes of this appeal
2
The Honorable William R. Wilson, Jr., United States District Judge for the Eastern District of Arkansas
3
The Little Rock School District sought a writ of mandamus asking this Court to disqualify Judge Woods, and the Joshua Intervenors appealed a judgment entered by Judge Woods, asserting, among other things, that the judge should be disqualified
4
This Court found that Judge Woods was not disqualifiedLittle Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, 839 F.2d 1296 (8th Cir.1988); Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, 833 F.2d 112 (8th Cir.1987).
73
HEANEY, Circuit Judge, concurring.
74
I concur in every aspect of the majority's opinion except insofar as it holds that the LRSD has implemented "programs, policies and/or procedures designed to ensure that there is no racial discrimination with regard to student discipline," as required by section 2.5 of the Revised Plan. In my view, the LRSD has failed to meet this obligation.
75
It is true that the LRSD has implemented several programs with regard to student discipline: the LRSD provided every student, parent, teacher, and administrator with a copy of the Student Handbook; the LRSD trained students, teachers, and administrators on provisions in the Handbook; the LRSD created the position of Ombudsman to investigate student complaints of race-based mistreatment in student discipline; Dr. Linda Watson, the Assistant Superintendent who was responsible for implementing section 2.5 of the Revised Plan, reviewed every long-term suspension and expulsion, and any short-term suspensions that were appealed; Dr. Watson prepared and reviewed quarterly Discipline Management Reports from each school, used these reports to identify problems, and met with the schools' administrators to discuss solutions; the LRSD established alternative learning environments to allow students with behavioral problems to remain in school; the LRSD offered training in classroom management and effective discipline; and the LRSD followed a progressive discipline approach by imposing lesser sanctions before suspending students.
76
It is also true that the LRSD has reduced the total number of disciplinary sanctions of students during the time of the Revised Plan from 5,312 total sanctions in 1998, to 5,080 total sanctions in 2001.5 During that same period, however, the number of black students receiving disciplinary sanctions actually increased. During the 1998-99 school year, there were 4,470 disciplinary sanctions of black students compared to 842 disciplinary sanctions of white students. Put another way, in the first year of the Revised Plan, 65% of the student population in the LRSD was black, while 84% of the disciplinary sanctions were of black students. By 2001, the year the LRSD sought unitary status, the disparity was even greater. In the 2000-01 school year, there were 4,534 disciplinary sanctions of black students compared to 546 disciplinary sanctions of white students. In other words, black students consisted of 68% of the student population, but accounted for 89% of the disciplinary sanctions. Therefore, from 1998 to 2001, disciplinary sanctions of black students increased from 84% to 89%. It is undisputed that the programs instituted by the LRSD to address disciplinary issues have had no positive impact on the racial disparity of student discipline in the district.
77
If you compare the discipline statistics in the individual high schools for the same period they track in very similar ways with almost all of the schools experiencing an increase in disparity. It is worth noting, however, that Parkview High School, the most integrated high school in the district, has the lowest racial disparity in student discipline in the district. In 1998-99, Parkview's student population was 51% black and the percentage of disciplinary sanctions of black students was 49%. In 2000-01, Parkview's black student population was still 51%, but the percentage of disciplinary sanctions of black students rose to 66%. Even at 66%, however, Parkview still had the lowest disparity in student discipline in the district that year.
78
I agree that the Revised Plan does not require the LRSD to absolutely eliminate racial disparity from student discipline. The majority and the district court, however, rely heavily on the fact that section 2.5 requires the LRSD to implement programs "designed to ensure" that there is no racial discrimination in student discipline. The implication is that because the LRSD implemented programs which would effect student discipline, the actual impact of those programs does not matter. I disagree. It is not enough for the LRSD to list the programs it implemented to address the disparity in student discipline, when the result of those programs was an increase in the racial disparity in student discipline. The mere implementation of programs, no matter how many or how impressive sounding, that have virtually no impact on the racial disparity in student discipline is not enough to meet the district's obligations under the Revised Plan.
79
This lack of impact on the disparity in discipline is really no surprise when you review the testimony of Dr. Watson. Dr. Watson testified that: she was never instructed that there needed to be a reduction in the racial impact of suspensions in the district; she never prepared a monitoring report with regard to disparities in discipline; she did not prepare any reports which track whether certain teachers or administrators have a pattern of disciplinary actions based on race; nor did she recommend any programs to address the continued disparate impact of discipline. (Nov. 19, 2001, Unitary Status Hr'g Tr. at 25-163.) Dr. Watson also testified that the percentage of black students being suspended did not decrease, that disparate patterns of discipline still exist based on race, that there are no plans to reduce the disparate impact of student discipline in the district, and that the LRSD is not even looking at student discipline based on race. (Id.)
80
The majority, and the district court, seem to take solace in the fact that racial disparity in student discipline is a national problem. According to the district court, in 1998, the national "total suspension index" was 2.24 and the Arkansas "total suspension index" was 2.16, whereas the LRSD's "total suspension index" remained constant at 1.26 from 1997-2000. Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, 237 F.Supp.2d 988, 1054 (E.D.Ark.2002). The majority and the district court consider the fact that the LRSD's index is lower than that of the nation and the state significant, and the fact that the LRSD's index did not change over the period of the Revised Plan insignificant. I disagree. The Revised Plan said nothing about the LRSD's racial disparity in student discipline in comparison to the state or the nation. The Revised Plan did, however, require the LRSD to implement programs designed to ensure that the racial disparity in student discipline in the district would decrease. This, they failed to do.
81
The majority and the district court also assert that Joshua did not meet its burden in proving that the racial disparity in student discipline was the result of discrimination. This was not Joshua's burden. According to section 11 of the Revised Plan, Joshua bears the burden of proving that the LRSD failed to comply with its obligations as set forth in the plan. Joshua met this burden by showing that the programs the LRSD implemented to address the racial disparity in discipline were ineffective. As I read the Revised Plan, it was the LRSD's obligation to determine whether the continued disparity in discipline was the result of racial discrimination or merely socioeconomic factors as suggested by Dr. Watson. Here again, the LRSD failed to meet its obligation and rested merely on the fact that it implemented programs. Programs that, in the end, had no effect on the racial disparity in student discipline.
82
It is true that Joshua could have done more to raise concerns about the failure of the LRSD's programs earlier, but this does not remove all responsibility from the LRSD. The statistics compiled and reports filed by the LRSD lack valuable data. I have found no useful statistics on recidivism among students to determine how many students, and of what race, are receiving multiple disciplinary sanctions. The record does not contain statistics that separate offenses involving the discretionary judgment of staff from objective offenses. The record lacks any reports which show whether there is a correlation between the race of the teacher administering the discipline and the race of the student receiving it, or whether certain teachers have a higher rate of discipline than others. Dr. Watson testified that she was able to access some of this information and that she knew which schools had high rates of disciplinary sanctions and which teachers issued more suspensions than others, but I cannot agree that her personal, undocumented knowledge was sufficient to meet the court's mandate that the district implement programs, policies, and procedures designed to ensure that there is no racial discrimination with respect to student discipline.
83
Absent the necessary records, there is no way the district court, or this court, can reach an informed conclusion as to whether blacks are disciplined more frequently for legitimate reasons or because they are judged by different standards than white students, at least by some teachers. I would remand this case to the district court on the disciplinary issue, along with the issue of student achievement retained by the district court, to require the district to comply with our original mandate.
Notes:
5
All 1998 statistics are from the LRSD's 1998-1999 Annual Disciplinary Management Report (Ct.Ex. CX679) and the 2001 statistics are from the LRSD's 2000-2001 Annual Disciplinary Management Report (Ct. Ex. CX681)
|
180 F.Supp.2d 532 (2002)
Henry ESPINAL, Plaintiff,
v.
Glenn S. GOORD, Commissioner, Donald Selsky, Director of Special Housing Unit, Christopher Artuz, Superintendent for Security Services, George Schneider, Deputy Superintendent for Security Services, Lt. Quackenbush, Review Officer, Lt. Haubert, Review Officer, A. Pelc, Hearing Officer, Sgt. B. Schaller, D. Carey, Correctional Officer, C. Centanni, Correctional Officer, Sgt. R. Shanley, jointly, severally and individually, respectively, Defendants.
No. 01 CIV.6569 NRB.
United States District Court, S.D. New York.
January 17, 2002.
*533 *534 Henry Espinal, Malone, NY, Plaintiff, pro se.
Elliot Spitzer, Attorney General for the State of New York by Anthony Gould, Assistant Attorney General, New York City, for Defendants.
MEMORANDUM AND ORDER
BUCHWALD, District Judge.
Henry Espinal, an inmate in the custody of the New York State Department of Correctional Services ("DOCS") brings this § 1983 action against various prison officials asserting violations of his rights under the Eighth and Fourteenth Amendments. Espinal moves for a temporary restraining order or preliminary injunction that would require the defendants to release him from punitive segregation in the Special Housing Unit ("SHU") place him in the general prison population, with restoration of all rights and privileges, and expunge the disciplinary convictions that led to his punitive segregation. He also moves for the appointment of counsel. For the reasons that follow, both motions are denied.
BACKGROUND[1]
Espinal was convicted of murder and attempted assault, and sentenced to an indeterminate sentence of twenty-six years, six months to life, beginning on June 19, 1996. On June 30, 1998, a fight broke out in the yard area of the Green Haven Correctional Facility, where Espinal was then incarcerated. On July 2, 1998, Espinal was served with an Inmate Misbehavior Report ("IMR"), alleging that two prison officials saw Espinal "drop a weapon and run off into the crowd" during the fight. IMR dated June 30, 1998. Espinal was charged with violating a prison rule that prohibits the possession of weapons by prisoners.[2]
On July 6, 1998, a "Tier III" disciplinary hearing[3] was held before defendant George Schneider. Espinal pleaded not guilty, and testified that, while he was present in the area, he did not possess a weapon. On the testimony of the prison official witnesses, however, he was found guilty. Schneider imposed a penalty of twelve months confinement to SHU and a concurrent loss of privileges. Espinal filed an administrative appeal, but the decision was affirmed. He then instituted an Article 78 proceeding, which was dismissed.
On July 7, 1998, Espinal was served with a second IMR also stemming from the June 30, 1998 incident. This IMR, authored by defendant D. Carey, alleged that Espinal assaulted and cut a fellow inmate, in violation of prison rules.[4] The IMR *535 stated that Espinal had been identified as the perpetrator "through numerous interviews and confidential informants." IMR dated July 7, 1998. Defendant A. Pelc presided over a Tier III hearing on July 9, 1998 where Espinal pleaded not guilty. He again testified that he was in the area, but denied that he assaulted the victim. Fellow inmate L. Rivera (who was accused of assisting in the assault) testified and corroborated Espinal's story. Correction Officers Lopez and Bovair as well as defendants D. Carey and B. Schaller also testified.
Espinal requested that Pelc provide him with any part of the confidential information, and that he interview the confidential informants referred to in the IMR. Both requests were denied. On the basis of the documents provided by the correction officers as and the witness testimony, Pelc found Espinal guilty of the three charges and imposed a penalty of thirty six months confinement to SHU, loss of various privileges, and recommended a loss of good time credits. The confinement was to served consecutively with the twelve months already imposed. Espinal filed an administrative appeal, but the determination was affirmed. He then instituted an Article 78 proceeding, which was dismissed on February 15, 2000 on procedural grounds.
Several months later, Espinal was being escorted from his cell in SHU for a visit by defendants Shanley and Centanni. An incident occurred while they were in the elevator. According to Espinal, who had his hands behind his back in handcuffs, Centanni violently assaulted him without provocation, and Shanley did nothing to stop the attack. According to the subsequent IMR drafted by Centanni, on the other hand, what happened was that "Espinal raised his right foot into the corner wall area, pushing us both back and then dead butted me with the back of his head, hitting me in my upper right lip." IMR dated Sept. 16, 1998. Centanni asserts that any physical contact with Espinal was solely an attempt to restrain him. Id. As these events took place in the elevator, they were apparently captured on video tape.
On September 17, 1998, Espinal was served with a third IMR, which alleged two violations of prison rules.[5] A third Tier III hearing was held before Schneider on September 29, 1998. Espinal again pleaded not guilty and testified to his version of events. He requested that Schneider view the video tape of the events, which request was apparently granted. Based on the IMR, the video tape, and the testimony of Espinal, Centanni, Shanley and Correction Officer Tonasso, Schneider found Espinal guilty and imposed a penalty of an additional twelve months confinement in SHU to be served consecutively with the other two penalties. Espinal filed an administrative appeal, but the determination was affirmed.
As a result of the three Tier III hearings, Espinal has been held in SHU since June 30, 1998, and is scheduled to be released back to the general prison population on June 30, 2003. He has already spent about three and a half years in SHU, and has about one and a half years remaining in his term of confinement. Part of that time has been spent in the SHU at Green Haven, Upstate, and Great Meadow Correctional Facilities, but Espinal is presently housed in the SHU at Southport Correctional Facility.[6]
*536 ANALYSIS
A. Showing Required for a Preliminary Injunction
In the usual case, a party seeking a preliminary injunction
must establish that it will suffer irreparable harm in the absence of an injunction and demonstrate either (1) a likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor.
Jolly v. Coughlin, 76 F.3d 468, 473 (2d Cir.1996) (citations and quotation marks omitted). In certain circumstances, however, the movant is held to a more exacting standard. Thus, where a party "challenges government action taken in the public interest pursuant to a statutory or regulatory scheme, ... the moving party cannot resort to the `fair ground for litigation' standard, but is required to demonstrate irreparable harm and a likelihood of success on the merits." Id. (citations and some quotation marks omitted). Moreover, "where (1) the injunction sought will alter, rather than maintain, the status quo ... or (2) the injunction sought will provide the movant with substantially all the relief sought, and that relief cannot be undone even if the defendant prevails at a trial on the merits," the moving party must make a "clear or substantial showing of likelihood of success on the merits." Id. (citation and quotation marks omitted).
In the case at bar, it is clear that Espinal is challenging "government action taken in the public interest pursuant to a statutory or regulatory scheme" by petitioning this Court to release him to the general prison population. Id. The prison authorities and public have an interest in keeping prisons safe and secure, and Espinal was confined to SHU on the basis of a hearing held pursuant to a New York regulatory scheme intended to advance that interest. See N.Y. Comp.Codes R. & Regs. tit. 7, § 254 (Tier III hearing procedure). Furthermore, it is also clear that issuing the requested injunction would "alter, rather than maintain, the status quo" in that it would release Espinal from SHU confinement-where he has spent the last three and a half years and is expected to spend another one and a half years-to the general prison population. Jolly, 76 F.3d at 473. As in Jolly, "[a]n order mandating his release would require a dramatic shift in an established DOCS policy," and therefore, "the status quo should not lightly be overturned." Id. at 474.
Hence, for the requested injunction to issue, Espinal must demonstrate that he will suffer irreparable harm in the absence of the injunction, as well as make a clear or substantial showing of likelihood of success on the merits.
B. Substantial Likelihood of Success on the Merits[7]
1. Threshold Sandin Showing
In order to succeed on his claims that he was denied due process in the three Tier III hearings, Espinal must first *537 make a "threshold showing" that he was entitled to the procedural due process protections of the Fourteenth Amendment. Sims v. Artuz, 230 F.3d 14, 22 (2d Cir. 2000). This threshold showing Espinal must make is that his SHU confinement subjected him to "atypical and significant hardship [] in relation to the ordinary incidents of prison life." Sandin v. Conner, 515 U.S. 472, 484, 115 S.Ct. 2293, 132 L.Ed.2d 418 (1995). Upon consideration of the record before the court, as well as the applicable Second Circuit precedents, it is abundantly clear that Espinal has succeeded in making the required showing.[8]
As of this date, Espinal has already spent nearly 1,300 days in SHU confinement. The "longest confinement in normal SHU conditions that [the Second Circuit has] ruled was not shown to meet the Sandin standard was 101 days." Colon, 215 F.3d at 231. Furthermore, "wherever the durational line is ultimately drawn, 305 days [in normal SHU conditions] satisfies the [Sandin] standard."[9]Id. On this record,[10] we are convinced that Espinal has made the requisite showing under Sandin. He was entitled to procedural due process at the three Tier III hearings.
2. Due Process
While the "due process requirements for a prison disciplinary hearing are in many respects less demanding than those for criminal prosecutions," there are certain minimum rights that a prisoner must be afforded under the Fourteenth Amendment. Edwards v. Balisok, 520 U.S. 641, 647, 117 S.Ct. 1584, 137 L.Ed.2d 906 (1997); see Wolff v. McDonnell, 418 U.S. 539, 563-69, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974) (outlining the due process rights retained by prisoners). Specifically, with respect to a disciplinary hearing such as the Tier III hearings at issue here, the *538 Fourteenth Amendment requires that (1) the inmate receive at least twenty four hours written notice of the disciplinary charges against him; (2) the inmate be permitted to call witnesses and present evidence "when permitting him to do so would not be unduly hazardous to institutional safety or correctional goals," Wolff, 418 U.S. at 566, 94 S.Ct. 2963; (3) the inmate be judged by a fair and impartial hearing officer; (4) the disciplinary conviction be supported by some evidence; and (5) the inmate be provided with a written statement of fact findings that support the disposition as well as the reasons for the disciplinary action taken. See Wolff v. McDonnell, 418 U.S. at 563-69, 94 S.Ct. 2963; Kalwasinski, 201 F.3d at 108 (2d Cir.1999); McCann v. Coughlin, 698 F.2d 112, 121-22 (2d Cir.1983). Each will be discussed seriatim.
a. Notice
As discussed above, Espinal was served with a written IMR before each of the three Tier III hearings at issue. Each IMR included a statement of the prison rules he had allegedly violated as well as a factual description of the relevant incident. The first IMR was served on Espinal on July 2, 1998 notifying him of a hearing which was held on July 6, 1998, the second IMR was served on Espinal on July 7, 1998 notifying him of a hearing which was held on July 9, 1998, and the third IMR was served on Espinal on September 17, 1998 notifying him of a hearing which was held on September 29, 1998. Thus, in each case, he was given more than the required twenty four hours notice.
Espinal claims, however, that the second IMR did not provide him with adequate notice of the charges against him. Pl.'s Mem. at 16-17. He asserts that, due to a fundamental difference between fighting (mutual violence) and assault (unilateral violence), he should not have been charged with both, as the facts indicated that he was accused of assault. Id. at 16. This argument is meritless. It was reasonable of the officers who prepared the report to give notice of both charges, as further factfinding may have been necessary to determine whether the inmate who was assaulted by Espinal fought back against his assailant.
Espinal also claims that the notice was defective because the IMR failed to indicate the basis of knowledge or veracity of the confidential informants from whom the information was obtained. Id. at 17. This argument, too, is meritless because such information was not necessary to apprize Espinal of the nature of the charges against him. Accordingly, Espinal was provided with constitutionally sufficient notice.
b. Presentation of Evidence by Prisoner
Nowhere in his thirty two page memorandum in support of the instant motion does Espinal claim that he was prevented from submitting evidence or calling witnesses during the three Tier III hearings. Rather, he testified on his own behalf, called an inmate witness to testify, and persuaded the presiding officer to view a video tape of the events that were the subject of the third Tier III hearing. Accordingly, this aspect of due process was satisfied in the present case.
c. Fair and Impartial Hearing Officer
Espinal claims that defendant Schneider, the hearing officer who presided over his first and third Tier III hearings, was biased against him, thereby depriving him of his right to a "fair and impartial hearing officer." Kalwasinski, 201 F.3d at 108; see Pl.'s Mem. at 12-15, 25-27. Specifically, *539 Espinal argues that Schneider was insufficiently impartial because he "is the supervisor of the security staff who responded to the incident" at issue in the first Tier III hearing. Am. Compl. ¶ 18. He also claims that, during that hearing, Schneider "assumed the role of a quasi-prosecutor" by asking leading and suggestive questions to the officers and "ambiguous, misleading questions" to Espinal and his witnesses "in an effort to solicit inconsistent, contradictory testimonies from them thereby hindering any chance of a successful defense from the petitioner." Pl.'s Mem. at 13. Finally, Espinal claims that Schneider was also biased against him when he presided over the third Tier III hearing because he "was under obvious pressure to resolve the disciplinary dispute in favor of the officers under his command." Id. at 27.
It is well settled that "the degree of impartiality required of prison hearing officials does not rise to the level of that required of judges generally." Francis v. Coughlin, 891 F.2d 43, 46 (2d Cir.1989). Rather, due process requires only that the hearing officer not be "a hazard of arbitrary decisionmaking." Wolff, 418 U.S. at 571, 94 S.Ct. 2963.
Moreover, while the Second Circuit has hinted that a prison official who directly "participated in the investigation of acts complained of or who has been a witness to such acts" may be insufficiently impartial to preside over a prison disciplinary hearing, Powell v. Ward, 542 F.2d 101, 102-03 (2d Cir.1976), the mere fact that "a decision-maker has responsibilities to uphold standards of conduct does not inevitably mean that he is disqualified from adjudicating allegations that those standards have been breached." Id. at 103; see also Allen v. Cuomo, 100 F.3d 253, 259 (2d Cir.1996) ("the independent hearing officer need not come from outside the prison").
In the case at bar, Espinal argues that Schneider was "directly involved in and investigated the incident," thus disqualifying him under Powell v. Ward. Pl.'s Mem. at 13. This legal conclusion, however, is not supported by the undisputed facts. According to Espinal, Schneider was merely "notified of the incident [in question], is the supervisor of the security staff who responded to the incident and is directly responsible for giving direction to" the prison staff who witnessed and investigated the incident. Am. Compl. ¶ 18. As Schneider neither witnessed nor investigated the incident in question, he was sufficiently impartial under the legal standards laid down in Powell v. Ward.[11] Accordingly, Espinal fails to demonstrate that Schneider was so insufficiently fair and impartial as to constitute a violation of due process.
d. Evidence Supporting the Dispositions
To comport with due process, the decision to confine Espinal in the SHU must have been supported by "some evidence." Superintendent v. Hill, 472 U.S. 445, 455, 105 S.Ct. 2768, 86 L.Ed.2d 356 (1985). "Ascertaining whether this standard is satisfied does not require examination of the entire record, independent assessment of the credibility of witnesses, or weighing of the evidence. Instead, the relevant question is whether there is any evidence in the record that could support the conclusion reached by the disciplinary board." Id. at 455-56, 105 S.Ct. 2768.
*540 Espinal claims that the decision rendered in the second Tier III hearing was not based on sufficient evidence. Pl.'s Mem. at 17-22. The evidence adduced at that hearing included testimony by officers who had conducted interviews with confidential informants. The law in this Circuit is that "the `some evidence' standard may be met even where the only evidence was supplied by a confidential informant, `as long as there has been some examination of indicia relevant to [the informant's] credibility.'" Gaston v. Coughlin, 249 F.3d 156, 163 (2d Cir.2001) (quoting Giakoumelos v. Coughlin, 88 F.3d 56, 61 (2d Cir.1996)) (emphasis supplied).
Espinal claims that he had a due process right to have the hearing officer "make an independent assessment of the reliability of [the] confidential informants, and to create and preserve a record of that assessment." Pl.'s Mem. at 19. The Second Circuit has recently noted that whether the Fourteenth Amendment does, in fact, grant this specific right is an open question. Gaston, 249 F.3d at 163. The Second Circuit has, however, clearly stated that "even if due process does require a hearing officer to conduct an independent assessment of the informant's credibility, that `would not entail more than some examination of indicia relevant to credibility rather than wholesale reliance upon a third party's evaluation of that credibility,'" Id. (quoting Russell v. Scully, 15 F.3d 219, 223 (2d Cir.1993)). The record before us does not permit us to determine whether Pelc, the presiding officer at the second Tier III hearing, made the required examination of indicia relevant to the credibility of the confidential informants, whether by an independent assessment or otherwise. Accordingly, we cannot say, at this point, whether Espinal's punishment was supported by constitutionally sufficient evidence.
e. Statement of Fact Findings and Reasons for the Disposition
Espinal makes no claim that he was not provided with a written statement of fact findings and the reasons for the disposition in any of the Tier III hearings. He does, however, imply that such a statement exists for the second hearing at least by referring to "Pelc's Statement of Evidence" in his memorandum. Pl.'s Mem. at 21. Accordingly, we presume that a written statement was, in fact, provided to Espinal following each of the three Tier III hearings.
3. Improbability of Success
As the preceding discussion makes clear, it is very unlikely that Espinal will succeed on the merits of his due process claims. Accordingly, we deny his motion for a temporary restraining order or preliminary injunction on this basis.[12]
C. Motion for Appointment of Counsel
In a letter dated December 2001, Espinal moves for assignment of counsel, pursuant to 28 U.S.C. § 1915(d).[13] "The factors to be considered in ruling on a motion for pro bono counsel are well settled and include `the merits of plaintiff's case, the plaintiff's ability to pay for private counsel, [plaintiff's] efforts to obtain a lawyer, the availability of counsel, and the plaintiff's ability to gather the facts and deal with the issues if unassisted by counsel.'" Rangi v. St. Barnabas Hosp., 2001 *541 WL 1590542, at *1 (S.D.N.Y. Dec. 12, 2001) (quoting Cooper v. A. Sargenti Co., 877 F.2d 170, 172 (2d Cir.1989)). Of these factors, the most important is the merits of the case. The Second Circuit has made clear that "a threshold showing of some likelihood of merit" must be made before a court appoints counsel. Cooper, 877 F.2d at 174. Accordingly, we decline to appoint counsel to represent Espinal for the same reasons given above, namely, the absence of a "threshold showing of some likelihood of merit."[14]Id.
CONCLUSION
Because Espinal has failed to make a substantial showing of likelihood of success on the merits of his due process claims, we deny his motion for a temporary restraining order or preliminary injunction. For substantially the same reasons, we deny his motion for the appointment of counsel to represent him in this action. Furthermore, in light of the above discussion, the defendants' time answer or move is adjourned until February 22, 2002.[15]
IT IS SO ORDERED.
NOTES
[1] The facts elucidated herein are those presented by Espinal in his complaint, amended complaint, and moving papers. The defendants have not challenged Espinal's version of events.
[2] Prison Rule 113.10.
[3] "Tier III hearings are held for the most serious violations of institutional rules." Colon v. Howard, 215 F.3d 227 (2d Cir.2000) (quotation and citation omitted).
[4] Specifically, Espinal was accused of violating Prison Rules 104.11 (violent conduct), 100.10 (assault on inmate), and 100.13 (fighting).
[5] Prison Rules 100.11 (assault on staff) and 107.10 (interference with employee).
[6] In his Affidavit, Espinal states that he was confined in the Green Haven Correctional Facility SHU from June 30, 1998 to October 3, 1999, in the Upstate Correctional Facility SHU from October 4, 1998 to January of 1999, in the Great Meadow SHU from January of 1999 to March 9, 2001, and returned to the Upstate SHU on March 9, 2001. Espinal Aff. ¶ 57. A recent letter from Espinal to the Court included a return address and postmark from Southport Correctional Facility. Letter dated December 2001. Therefore, we assume that he is presently housed in the Southport SHU.
[7] As the preliminary injunction Espinal seeks is only relevant to his Fourteenth Amendment claim, we do not consider the merits of his Eighth Amendment claim here.
[8] Much ink has been spilled in this Circuit discussing whether and when SHU confinement meets the atypicality standard. See, e.g., Giano v. Selsky, 238 F.3d 223, 226 (2d Cir. 2001); Sims, 230 F.3d at 22-24; Colon, 215 F.3d at 230-34; Kalwasinski v. Morse, 201 F.3d 103, 106-108 (2d Cir.1999); Welch v. Bartlett, 196 F.3d 389, 393-95 (2d Cir.1999); Scott v. Albury, 156 F.3d 283, 286-88 (2d Cir.1998); Wright v. Coughlin, 132 F.3d 133, 136-37 (2d Cir.1998); Frazier v. Coughlin, 81 F.3d 313, 317-18 (2d Cir.1996). The Second Circuit has rejected a "bright-line rule that confinement in normal SHU conditions of more than 180 days meets the Sandin standard," Colon, 215 F.3d at 232, in favor of a "fact-intensive inquiry" into the duration and nature of a given SHU confinement. Sims, 230 F.3d at 22. Nevertheless, under any reading of Sandin, it is obvious that Espinal's SHU confinement qualifies as an "atypical and significant hardship [] in relation to the ordinary incidents of prison life." Sandin, 515 U.S. at 484, 115 S.Ct. 2293.
[9] Moreover, the conditions of Espinal's confinement are substantially identical to those discussed in Colon, and stand in stark contrast to the conditions of prisoners in the general population. 215 F.3d at 230. Compare Espinal Aff. ¶¶ 57-85 (describing the conditions he experiences in SHU, including the fact that he is confined to his cell twenty three hours a day, his property privileges are severely restricted, and he is permitted only two or three showers per week) with id. ¶¶ 5-56 (describing the conditions of the general prison population). Finally, we observe that Espinal is currently housed in the SHU-only Southport Correctional Facility, "where SHU conditions are harsher than in SHU facilities of other New York prisons." Colon, 215 F.3d at 234 n. 7; see Lee v. Coughlin, 26 F.Supp.2d 615, 624-33 (S.D.N.Y.1998) (describing conditions at Southport).
[10] The Second Circuit has instructed the district courts to "develop a detailed factual record" of the conditions of a given SHU confinement when the confinement duration is "within the 101-305 day range." Sims, 230 F.3d at 24. As the duration in the instant case is more than three times as long as the outside of that range, we do not feel that a more detailed factual record is necessary to determine whether Espinal's confinement satisfies the Sandin test.
[11] As to Espinal's claim that Schneider violated his due process rights by "assuming the role of a quasi-prosecutor" at the first Tier III hearing, Pl.'s Mem. at 13, he has introduced no evidence of improper or misleading questioning whatsoever.
[12] Hence, we need not and do not consider whether he will suffer irreparable harm in the absence of the requested relief.
[13] He also purports to move for the appointment of counsel under 18 U.S.C. § 3006. That section, however, only applies in a criminal case.
[14] We also note that Espinal has demonstrated an impressive ability to argue his case without the assistance of counsel. His memorandum in support of the instant motion, for example, is well-written and demonstrates a firm grasp of the issues that are at the heart of his case.
[15] It would be helpful if any motion for summary judgment on the due process claims be accompanied by a copy of the written dispositions and transcripts of each of the three Tier III hearings. It would also be helpful if any motion for summary judgment on the Eighth Amendment claim be accompanied by a copy of the videotape of the events of September 16, 1998 alluded to in Espinal's submissions.
|
534 F.Supp. 828 (1981)
INTERNATIONAL FASHIONS, a corporation, Plaintiff,
v.
Angela Marie BUCHANAN, Treasurer of the United States; Donald T. Regan, Secretary of the Treasury Department; William French Smith, Attorney General of the United States; William T. Archey, Acting Commissioner of Customs, United States Customs Service, Defendants.
Court No. 81-6-00744.
United States Court of International Trade.
December 29, 1981.
*829 Glad, White & Ferguson, Los Angeles, Cal. (Robert Glenn White, Los Angeles, Cal., at oral argument and on the brief), for plaintiff.
J. Paul McGrath, Asst. Atty. Gen., Washington, D. C. (David M. Cohen, Branch Director, Commercial Litigation Branch, New York City, at oral argument and on the brief, Joseph I. Liebman, Atty. in Charge, Commercial Litigation Branch, New York City, at oral argument), for defendants.
BOE, Judge:
The consideration of the above-entitled action initially requires a determination with respect to the subject matter encompassed therein. The plaintiff claiming jurisdiction of this court under 28 U.S.C. § 1581(i) seeks recovery of supplemental duties imposed by Presidential Proclamation 4074 on certain merchandise imported by the plaintiff into the United States between August 16, 1971 and December 20, 1971.[1] Plaintiff, however, predicates its cause of action with respect to the recovery of the said supplemental duties upon the provisions of § 9(a) of the Trading With the Enemy Act (50 U.S.C.App. § 9(a)).
Although plaintiff annexes to its complaint exhibits 1, 2 and 3 enumerating the specific entries imported by the plaintiff as well as the amount of the supplemental *830 duty imposed and paid in connection therewith, it appears from the records of this court that the majority of the entries set forth in the aforesaid schedules have been made a part of and are the subject of stipulations entered into between the plaintiff and the United States Government wherein it is agreed that the final determination of Alcan Sales, Div. of Alcan Aluminum Corp. v. United States, 528 F.Supp. 1159 shall be binding and conclusive upon the parties as to the surcharge issue therein.
It will be noted, therefore, that only 26 of the entries set forth in exhibit 1 annexed to plaintiff's complaint represent the subject matter of the instant action in which plaintiff seeks recovery.[2]
Issue having been joined herein, the defendant has moved the court to dismiss this civil action for lack of jurisdiction or, in the alternative, to grant summary judgment in its favor.
In support of its motion to dismiss the instant action for lack of jurisdiction, the defendants assert that a technical amendment to the Customs Courts Act of 1980, Pub.L. 96-542, 94 Stat. 3209, prevents this court from acquiring jurisdiction of the instant action under 28 U.S.C. § 1581(i). The technical amendment provides that § 1581(i) shall apply only with respect to civil actions commenced on or after the effective date of the Customs Courts Act of 1980November 1, 1980. With respect to the 26 entries constituting the subject matter of the instant action, this court finds that none of said entries had been a part of a civil action filed with this court prior to its effective date of November 1, 1980. The foregoing asserted basis of defendants' motion, accordingly, cannot be sustained.
As a further ground for its motion to dismiss the instant action for lack of jurisdiction the defendants assert the limitations relating to the commencement of civil actions contained in 28 U.S.C. § 2636(i) providing:
(i) A civil action of which the Court of International Trade has jurisdiction under section 1581 of this title, other than an action specified in subsections (a)-(h) of this section, is barred unless commenced in accordance with the rules of the court within two years after the cause of action first accrues.
The defendants contend that inasmuch as the surcharge duties were paid by plaintiff between August 16 and December 20, 1971, the respective causes of actions seeking recovery of such payments, necessarily, accrued at the time of payment in the year 197110 years prior to the commencement of the present actionand therefore barred by the foregoing statutory provision. Although it is recognized that some court decisions may sustain defendants' contention, this court is disposed to follow the interpretation by the Supreme Court of the United States with respect to statutes limiting the time of commencement of civil actions. The United States Supreme Court in the case of Sohn v. Waterson, 84 U.S. (17 Wall.) 596, 21 L.Ed. 737, 738 (1873) has stated:
But if an action accrued more than the limited time before the statute was passed a literal interpretation of the statute would have the effect of absolutely barring such action at once. It will be presumed that such was not the intent of the legislature. Such an intent would be unconstitutional. To avoid such a result, and to give the statute a construction that will enable it to stand, courts have given it a prospective operation.
Quoting from Chief Justice Taney, the Court continued:
`The question is,' ..., `from what time is this limitation to be calculated? Upon principle, it would seem to be clear, that it must commence when the cause of action is first subjected to the operation of the statute, unless the legislature has otherwise provided.'
See also United States v. St. Louis, etc. Ry. Co., 270 U.S. 1, 46 S.Ct. 182, 70 L.Ed. 435 (1925). This court, therefore, concludes that the absence of specific statutory intent to the contrary causes § 2636(i) to be construed *831 prospectively instead of retroactively. Accordingly, the two-year period of time permitted for the commencement of a civil action pursuant to § 2636(i) begins to run from the effective date of the statutory provisionNovember 1, 1980. The instant action having been commenced on June 11, 1981, by the filing of a summons and complaint, defendants' motion to dismiss the same must be found to be without substance and, accordingly, denied.
Plaintiff in its complaint, while asserting jurisdiction under § 1581(i), predicates its cause of action under § 9(a) of the Trading With the Enemy Act (TWEA). Section 1581(i) frequently has been characterized as a residual grant of jurisdiction to this court. Contrary to the conception that this statutory provision may have created an all-inclusive grant of jurisdiction relating to matters concerning importations and international trade, supplemental to and in addition to the jurisdictional grants expressly defined in § 1581(a)-(h), examination and careful reading of subsection (i) clearly indicates the intention of the Congress to specifically delineate the nature of the "exclusive" supplemental jurisdiction therein provided. In so doing, the Congress has extended the jurisdiction of this court only to
any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for
(1) revenue from imports or tonnage;
(2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;
(3) embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or
(4) administration and enforcement with respect to the matters referred to in paragraphs (1)-(3) of this subsection and subsections (a)-(h) of this section.
That the undisputed facts in the instant action fall within the subject matter jurisdictional grant of § 1581(i)(2) and (4) is patently established by the pleadings. The complaint of the plaintiff alleges the imposition of supplemental duties, pursuant to Presidential Proclamation 4074, on all dutiable merchandise imported into the United States. The complaint further acknowledges the payment of monies to the Treasurer of the United States amounting to 10% ad valorem on all dutiable merchandise imported by it into the United States between August 16, 1971 and December 20, 1971. Clearly, the subject matter before this court relates to duties on imports within the contemplation of § 1581(i)(2). Thus the real issue confronting this court is not one of jurisdiction of the subject matter but rather whether the cause of action on which the plaintiff predicates its present claim and prayer for relief is one upon which relief can be herein granted.
The plaintiff has not challenged the validity of the imposition of the surcharge imposed by Presidential Proclamation 4074 nor taken issue with the decisions of the Court of Customs and Patent Appeals in United States v. Yoshida International, Inc., 63 CCPA 15, 526 F.2d 560 (1975) and Alcan Sales v. United States, 63 CCPA 83, 534 F.2d 920 (1976), cert. denied, 429 U.S. 896, 97 S.Ct. 506, 50 L.Ed.2d 598 (1976), sustaining the power of the President to regulate imports by the imposition of duties pursuant to the authority granted by § 5(b) of the TWEA. The gravamen of plaintiff's cause of action is the alleged continued holding and retention of property by the Treasurer of the United States belonging to a United States resident, not an enemy or an ally of an enemy of the United States. Section 9(a) of the Act, upon which plaintiff predicates its claim, is a remedial statute of special purpose. It provides a judicial remedy only to
(a) Any person not an enemy or ally of enemy claiming any interest, right, or title in any money or other property which may have been conveyed, transferred, assigned, delivered, or paid to the Alien Property Custodian or seized by him hereunder and held by him or by the Treasurer of the United States, ...
As so clearly pointed out in the case of Societe Internationale, v. Rogers, 357 U.S. *832 197, 211, 78 S.Ct. 1087, 1095, 2 L.Ed.2d 1255 (1958), the United States Supreme Court stated:
Past decisions of this Court emphasize that this summary power to seize property which is believed to be enemy-owned is rescued from constitutional invalidity under the Due Process and Just Compensation Clauses of the Fifth Amendment only by those provisions of the Act which afford a nonenemy claimant a later judicial hearing as to the propriety of the seizure. (Citations omitted.)
A cause of action created by § 9(a) of the Trading With the Enemy Act relates solely to the recovery of property seized and/or vested pursuant to the TWEA and, accordingly, not only is inapplicable but fails to state a claim upon which relief can be granted to the plaintiff in the instant action.
In the case of Alcan Sales, Div. of Alcan Aluminum Corp. v. United States, 528 F.Supp. 1159, under even date herewith, this court, in considering a claim for the recovery of supplemental duties imposed pursuant to Presidential Proclamation 4074, held that § 9(a) of the TWEA, under which that cause of action was likewise predicated, was inapplicable to the determination of the issue therein. The court further found the surcharge in question imposed by Presidential Proclamation 4074 was a valid exercise of authority delegated to the President by § 5(b) of the TWEA to regulate importations at a time of a declared national emergency and for the specific purposes set forth with particularity in the Proclamation. The imposition of the surcharge in the instant action, as in the case of Alcan Sales, Div. of Alcan Aluminum Corp. v. United States, 528 F.Supp. 1159, did not constitute a "vesting" of property within the meaning of § 5(b) of the TWEA, nor a taking of property within the intendment of the Fifth Amendment to the Constitution of the United States. The reasoning of this court as more fully expressed in Alcan Sales, Div. of Alcan Aluminum Corp., 528 F.Supp. 1159, is deemed relevant and appropriate hereto without the need of further repetition.
This court concludes that the decisions of our appellate court in the cases of United States v. Yoshida International, Inc., supra, and Alcan Sales v. United States, 63 CCPA 83, 534 F.2d 920 (1976), cert. denied, 429 U.S. 896, 97 S.Ct. 506, 50 L.Ed.2d 598 (1976), are stare decisis of the issue herein.
Accordingly, the alternative motion of the defendant for summary judgment is granted.
Let judgment be entered accordingly.
SCHEDULE 1
ENTRY NO. ENTRY NO.
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
XX-XXXXXX XX-XXXXXX
NOTES
[1] For a more complete background of the surcharge issue reference is made to the related case of Alcan Sales, Div. of Alcan Aluminum Corp. v. The United States, 528 F.Supp. 1159, decided under even date herewith.
[2] The 26 entries above-referred to are set forth in Schedule 1 attached hereto.
|
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
September 4, 2007
No. 07-10310 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 06-02534-CV-TWT-1
ELIZABETH KANG,
Petitioner-Appellant,
versus
NORO-MOSELEY PARTNERS,
Respondent-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(September 4, 2007)
Before BLACK, MARCUS and WILSON, Circuit Judges.
PER CURIAM:
Elizabeth Kang appeals the district court’s grant of Noro-Moseley Partners’s
motion to quash subpoena. Kang sought discovery from Noro-Moseley Partners to
use in a civil proceeding in Germany pursuant to 28 U.S.C. § 1782. We review the
district court’s decision for an abuse of discretion. In re Clerici, 481 F.3d 1324,
1331 (11th Cir. 2007). Our review is extremely deferential and identical to the
standard for reviewing ordinary discovery rulings by the district court. Id.
However to the extent that the district court’s decision is based on an interpretation
of law our review is de novo. Id.
Section 1782 “authorizes, but does not require, a federal district court to
provide assistance to a complainant . . .” Intel Corp. v. Advanced Micro Devices,
Inc., 542 U.S. 241, 255, 124 S. Ct. 2466, 2478, 159 L. Ed. 2d. 355 (2004). Under
§ 1782(a), the district court can grant an application for judicial assistance when
the following statutory requirements are met: (1) the request must be made “by a
foreign or international tribunal,” or by “any interested person”; (2) the request
must seek evidence, whether it be the “testimony or statement” of a person or the
production of “a document or other thing”; (3) the evidence must be “for use in a
proceeding in a foreign or international tribunal”; and (4) the person from whom
discovery is sought must reside or be found in the district of the district court
ruling on the application for assistance. 28 U.S.C. § 1782(a). Once these prima
facie requirements are satisfied, the following factors must be considered by the
2
district court in exercising its discretion: (1) whether “the person from whom
discovery is sought is a participant in the foreign proceeding,” because “the need
for § 1782(a) aid generally is not as apparent as it ordinarily is when evidence is
sought from a nonparticipant”; (2) “the nature of the foreign tribunal, the character
of the proceedings underway abroad, and the receptivity of the foreign government
or the court or agency abroad to U.S. federal-court judicial assistance”; (3)
“whether the § 1782(a) request conceals an attempt to circumvent foreign
proof-gathering restrictions or other policies of a foreign country or the United
States”; and (4) whether the request is otherwise “unduly intrusive or
burdensome.” Intel, 542 U.S. at 264-65, 124 S. Ct. at 2483.
Here the district court correctly found that a prima facie case had been met.
It then considered the four Intel factors finding that the first factor weighed in
favor of denying the motion to quash. However, the court found that this factor
was outweighed by the irrelevance of the requested discovery to the nature of the
foreign proceedings. A district court can deny discovery where the information
sought is irrelevant to the causes of action. See Burger King Corp. v. Weaver, 169
F.3d 1310, 1320 (11th Cir. 1999). Given that the district court properly considered
the Intel factors in deciding whether to exercise its discretion and has not abused
his discretion in determining relevance, we can find no reversible error.
AFFIRMED.
3
|
501 F.Supp.2d 1179 (2007)
Elizabeth C. MARTIN, Plaintiff,
v.
Jo Anne B. BARNHART, Commissioner of Social Security, Defendant.
Civil Action No. 4:05-CV-0080AS.
United States District Court, N.D. Indiana, Hammond Division.
March 21, 2007.
*1180 Jennifer M. Hess, Petit Hess Petit & Slack, Carmel, IN, for Plaintiff.
Clifford D. Johnson, US Attorney's Office, South Bend, IN, for Defendant.
MEMORANDUM, ORDER, & OPINION
ALLEN SHARP, District Judge.
Plaintiff, Elizabeth C. Martin, seeks judicial review of the denial of her claim for benefits and a period of disability under Title II of the Social Security Act. The Commissioner of Social Security found Ms. Martin not entitled to a period of disability nor Disability Insurance Benefits (DIB) under Title II of the Social Security Act, 42 U.S.C. 416(I), 423. This Court has jurisdiction over this action pursuant to 42 U.S.C. 405(g).
Ms. Martin applied for DIB on June 19, 2000, claiming an alleged onset date of disability of January 24, 1999 (Tr. 70-2, 371). Her claim was denied, along with her request for reconsideration (Tr.66). Ms. Martin then requested a hearing before Administrative Law Judge (the ALJ) Albert J. Velasquez, which was conducted on August 30, 2002 (Tr. 13-22). During *1181 that hearing, the ALJ changed the onset date to March 9, 2000 (Tr. 14). The ALJ also denied her claim, and Ms. Martins request for review was also denied (Tr. 5-7). Ms. Martin filed a civil action in the Northern District of Indiana, which granted the Commissioners motion to remand to the Appeals Council for further proceedings (Tr. 451). The Appeals Council then remanded the case back to the ALJ (Tr. 458-9).
A hearing was held before the ALJ on January 25, 2005, wherein Ms. Martin appeared with counsel along with Michael Blankenship, a vocational expert hired by Ms. Martin (Tr.437). Stephanie Archer, another vocational expert, also testified (Tr. 430). The ALJ issued a decision on April 28, 2005, finding that Ms. Martin was not disabled because she was still able to perform a substantial amount of jobs within the national economy despite her physical and mental impairments (Tr. 380). Ms. Martins request for review was denied; upon that denial, the ALJs decision became the final decision of the Commissioner (Tr. 348-9).
I. Background
Statement of Facts
Ms. Martin was fifty-two years old at the time of the ALJs decision, had earned her GED, and had completed some college course work (Tr. 371). She had also been employed by the Bureau of Motor Vehicles, where she was a team leader and translator, as well as having past experience as an editor of two newspapers at one point in time (Tr. 371, 430).
Medical Evidence
Ms. Martin has been the victim of five car accidents in the past seven years (Tr. 405-7, 416). The accidents occurred in January and November of 1999, April of 2000 and 2002, and November of 2004. (Tr. 416). She began developing back pain after the first of the series of accidents, and her condition began to worsen with each succeeding catastrophe (Tr. 419). She complained mainly of back and neck pain, along with pain in her shoulders, elbows, knees, hips and tingling in her fingers and hands (Tr. 419).
An x-ray taken in March of 2000 of Ms. Martins cervical spine, pelvis and right knee was normal (Tr. 292). A magnetic resonance imaging (MRI) scan taken in May of 2000 showed no disc herniation (Tr. 178). Furthermore, a computerized tomography (CT) scan of Ms. Martins head was normal (Tr. 316-7). Examinations of Ms. Martin showed little decrease in range of cervical and lumbar motion, occasional numbness in hands and feet, multiple trigger points in shoulders, elbows, knees, and low back, no neurological, deficits or radicular signs, full muscle strength, and intact fine finger manipulative abilities (Tr.172-3, 175, 245, 263-4, 280, 287, 342-3, 345-6, 479, 525-6).
On November 11, 2000, clinical psychologist David G. Jarmon, Ph.D., evaluated Ms. Martin (Tr. 551). He stated that Ms. Martin had an adjustment disorder with mixed anxiety and depressed mood, depressive disorder, chronic pain in her neck, shoulders, and back, and a GAF of 50/75 (Tr. 554).
When Dr. Jarmon examined Ms. Martin again on June 29, 2001, he gave essentially the same diagnosis; however, he did note that her GAF had diminished to 50/50 (Tr. 558). He also administered an MMPI-2 test to Ms. Martin (Tr. 557). However, because the test was taking such an inordinate amount of time for Ms. Martin to complete, Dr. Jarmon allowed her to take it home and finish it (Tr. 557). Ms. Martin returned the test to Dr. Jarmon several days later (Tr. 557).
On February 18, 2002, Dr. El Khalili noted that Ms. Martin was totally unable to work due to her major depression (Tr. 331).
*1182 On June 20, 2002, in a letter addressed to Vocational Rehabilitation services, Carolyn Kochert, M.D., noted that Ms. Martins pain was largely myofascial in nature (Tr. 524). She recommended making several changes in Ms. Martins diet to facilitate a lessening of the pain (Tr. 524). She further opined that depression was playing a very large role in the pain sensations (Tr. 524).
On September 11, 2002, Dr. Kochert noted that Ms. Martin was very tearful and when she attempted to reason with Ms. Martin, there was little response (Tr. 526). Dr. Kocherts impressions were consistent with degenerative disk disease, depression and fibromyalgia and recommended that Ms. Martin continue taking pain medications as well as to seek counseling for the depression (Tr. 526).
On May 2, 2003, Michael Lockwood, M.D., noted that Ms. Martin had fibromyalgia and myofascial pain disorder (Tr. 476). He noted that the condition did not cause any deformity of the joints but that it was a chronic pain disorder that could affect sleep patterns and cause fatigue (Tr. 476). He recommended that Ms. Martin be restricted in her work environment, favoring a fifteen pound weight-lifting restriction as well as no swing or night shifts (Tr. 476). In concluding his diagnosis, he opined that he was concerned about [Ms. Martins] ability to function in the work environment, as she did seem significantly depressed (Tr. 477).
On May 21, 2003, Dr. Jarmon examined Ms. Martin for the third time, noting that she had an adjustment disorder with depressed mood, a depressive disorder not otherwise specified, pain disorder associated with both psychological factors and a general medical condition, fibromyalgia with chronic pain, and a GAF of 55/55 (Tr. 562).
On January 14, 2005, Michael Bohlin, M.D., noted in his statement on Ms. Martins condition that she was disabled based on objective medical findings (Tr. 515). He listed her diagnoses as myofascial pain disorder, fibromyalgia, depression, and gastritis (Tr. 514). He opined that Ms. Martin could sit for one hour, stand/walk for less than one hour, lift or carry one to five pounds occasionally, could never squat, crawl, climb a ladder, kneel, crouch, handle or finger pick/pinch, could occasionally bend, reach above shoulder level and reach, and that she should never work around unprotected heights, moving, machinery, marked changes in temperature, or around dust, fumes, and gases (Tr. 518). He concluded that Ms. Martin was totally incapable of working (Tr. 519).
On January 17, 2005, Dr. Lockwood noted in his statement that there were no objective medical criteria for establishing fibromyalgia and myofascial pain disorder and thus, in his answer to whether Ms. Martin was disabled according to objective medical evidence, he stated not applicable as to her disability (Tr. 580). However, he did note that if Ms. Martins subjective claims of intense pain were credited then she would be disabled (Tr. 580). He opined that she was able to sit for eight hours, stand/walk for two hours, and lift or carry up to twenty pounds occasionally (Tr. 581). Furthermore, he noted that she should never bend, squat, or crawl (Tr. 582).
However, Dr. Lockwood noted in a supplemental statement dated January 17, 2005 that Ms. Martins impairments equaled one of the listed impairments (Tr. 587). Furthermore, he stated that even if her impairments did not precisely equal one of the listed impairments then her ailments were medically equivalent to one of the listed impairments (Tr. 587).
Hearing Testimony
Ms. Martin noted that she was taking Mobic, Cymdalta, Wellbutrin, and Advair *1183 (Tr. 419). She complained of having excessive pain in her neck, shoulders, elbows, knee, lower back, hips, and her hand (Tr. 419), When she complained about her hand pain, the ALJ asked to see the hand so that he could examine it for himself (Tr. 421). Furthermore, she opined that she was always crying, along with being depressed for no apparent reason (Tr. 420). She noted that she had good days and bad days; the good days were ones where she could mop and do other household chores, while the bad days were ones where she could not even muster the fortitude to leave her bed (Tr. 421).
Stephanie Archer, a vocational expert, was asked to give a list of possible employment opportunities with what he believed to be Ms. Martins RFC (Tr. 431). The ALJ stated
Lets assume a hypothetical individual the claimants age, education and work experience, who's capable of work at the light and the sedentary exertion level. Provided that the work required no more than lifting and carrying up to 10 pounds, or standing or walking more than six hours in an eight hour day. Would require no more than occasional bending or squatting or climbing up stairs or ramps. With, no kneeling or crawling or climbing of ropes, ladders or scaffolds. The individual should avoid walking on uneven surfaces. Avoid work at unprotected heights. Around dangers moving machinery, or operating a motor vehicle, or being around open flames or large bodies of water. And the work should be simple and repetitive in nature with nor more than superficial interaction with the general public, coworkers or supervisors
(Tr. 431).
In response to the hypothetical put to her by the ALT, Ms. Archer stated that there would be over 18,500 jobs that Ms. Martin could capably perform (Tr. 431). When the attorney for Ms. Martin asked Ms. Archer about a hypothetical person with the RFC placed upon Ms. Martin by Dr. Bohlin, Ms. Archer stated that there would be no work in the national economy for that hypothetical person (Tr. 433).
Michael Blankenship, another vocational expert, stated that he had reviewed the record and interviewed Ms. Martin, placing a particular emphasis upon the opinions of Drs. Bohlin, Jarmon, and Kochert (Tr. 438). He opined that Ms. Martin was unable to obtain and retain substantial gainful employment according to his vision of the record (Tr. 438).
The ALJs Findings
The findings of the ALJ are as follows:
1. The claimant met the disability insured status requirements of the Act at all times relevant to this decision.
2 The claimant was engaged in substantial gainful activity until March 9, 2000.
3. The claimant has not engaged in substantial gainful activity since March 9, 2000.
4 The medical evidence establishes that the claimant has severe impairments consisting of fibromyalgia, myofascial pain syndrome, major depression (moderate to severe) without psychotic features, an adjustment disorder with mixed anxiety and depressed mood, a depressive disorder not otherwise specified, a pain disorder associated with psychological factors and a general medical condition, and a personality disorder not otherwise specified with paranoid features; but that she does not have an impairment or combination of impairments listed in, or medically equal to, one listed in Appendix *1184 1, Subpart P, Regulations No. 4.
5. The claimant retains the residual functional capacity to perform a range of light exertional work de fined as follows: lifting and/or carrying ten pounds frequently and twenty pounds occasionally; standing and/or walking, off and on, for six hours during and eight hour work day; intermittent sitting; using hands and arms for grasping, holding and turning objects; no more than occasional bending, squatting, or climbing of stairs or ramps; no kneeling, crawling, or climbing of ladders, ropes or scaffolds; avoid walking on uneven surfaces, work at unprotected heights, work around dangerous machinery, operating a motor vehicle, being around open flames and being around large bodies of water; the work should be simple and repetitive in nature; and no more than superficial interaction with the general public, coworkers and supervisors.
6. The claimants subjective complaints and allegations concerning the severity of her impairments are not reasonably consistent with the objective medical and other evidence of record.
7. The claimant is unable to perform her past relevant work as a team leader.
8. The claimant was a younger individual and is now closely approaching advanced age.
9. The claimant has a GED.
10. The claimant has no transferable skills.
11. Based on an exertional capacity for light work, and the claimants age, education and work experience, Medical-Vocational Rules 202.14 and 202.21 would direct a conclusion of not disabled.
12. Based on an exertional capacity for sedentary work, and the claimants age, education and work experience, Medical-Vocational Rules 201.14 and 202.14 would direct a conclusion of disabled and not disabled respectively.
13. Although the claimants restrictions and limitations do not allow her to perform the full range of light work, using Rules 201.14, 201.21, 202.14 and 202.21 as a framework for decisionmaking, there are a significant number of jobs in the State of Indiana which she could perform. Examples of such jobs at the light exertional level include clerk/cashier (12,000 jobs). Examples of such jobs at the sedentary exertional level include assembler (4200 jobs), packer (1100 jobs) and general office clerk (1200 jobs).
14. The claimants capacity for light work has not been significantly compromised by exertional and nonexertional restrictions and limitations. Accordingly, using Rules 202.14, 202.21, 202.14 and 202.21 as a framework for decisionmaking, she is not disabled.
15. The claimant has not been disabled, within the meaning of the Social Security Act, at any time relevant to this decision.
The ALJs Decision
Based upon the Title II application filed on June 19, 2000, the ALJ found that the claimant is not entitled to a period of disability or disability insurance benefits under sections 216(I) and 223, respectively, of the Social Security Act (Tr. 378-9).
*1185 II. Standard of Review
This courts review of the Commissioners decision is a limited one. Unless there is an error of law, the court will uphold the Commissioners" findings of fact if they are supported by substantial evidence. Schoenfeld v. Apfel, 237 F.3d 788, 792 (7th Cir.2001). Substantial evidence consists of such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Richardson v. Perales, 402 U.S. 389, 399-400, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971). In making a substantial evidence determination, the court will review the record as a whole, but will not reevaluate, the facts, re-weigh the evidence or substitute its own judgment for that of the Commissioner. Williams v. Apfel, 179 F.3d 1066, 1071-72 (7th Cir. 1999). That being said, the ALJ must build an accurate and logical bridge between the evidence and the result. Shramek v. Apfel, 226 F.3d 809, 811 (7th Cir. 2000). See also, Diaz v. Chater, 55 F.3d 300, 305 (7th Cir.1995).
With respect to credibility determinations, the ALJ is in the best position to observe the demeanor and veracity of the testifying witnesses. Clifford v. Apfel, 227 F.3d 863, 872 (7th Cir.2000). The court will not disturb the ALJs weighing of credibility so long as those determinations are based on some support in the record and are not patently wrong. Prochaska v. Barnhart, 454 F.3d 731, 738 (7th Cir.2006) (citing Carradine v. Barnhart, 360 F.3d 751, 753 (7th Cir.2004)). However, the district court is required to critically review the evidence and not simply rubber-stamp the Commissioners decision. Clifford, 227 F.3d at 869.
III. Discussion
Benefits are available only to those individuals who can establish disability under the terms of the Social Security Act. Estok v. Apfel, 152 F.3d 636, 638 (7th.Cir.1998). Under section 423(c)(1)(B)(1), it is well established that to receive benefits, a disability must have begun or had its inception during the period of insured status. Bolinger v. Barnhart, 446 F.Supp.2d 950, 954 (N.D.Ind. 2006) (citing Bastian v. Schweiker, 712 F.2d 1278, 1280 (8th Cir.1983)). A claimant has the burden of establishing that she is disabled within the meaning of the Social Security Act on or before the date her insured status expired. Estok, 152 F.3d at 640; Meredith v. Bowen, 833 F.2d 650 (7th Cir.1987); Owens v. Heckler, 770 F.2d 1276, 1280 (5th Cir.1985); Garner v. Heckler, 745 F.2d 383, 390 (6th Cir.1984); Jeralds v. Richardson, 445 F.2d 36, 39 (7th Cir.1971). "The law requires that a claimant demonstrate her disability within the proscribed period of eligibility not prior to or subsequent to the dates in question." Jeralds, 445 F.2d at 39. Therefore, "any condition that had its onset or became disabling after plaintiff's insured status expired may not be used as a basis for entitlement to disability benefits." Couch v. Schweiker, 555 F.Supp. 651, 654 (N.D.Ind.1982). Plaintiff bears the burden of showing through testimony and medical evidence supported by clinical data and laboratory diagnosis that she was disabled during the period in which she was insured. Reading v. Mathews, 542 F.2d 993, 997 (7th Cir.1976) (citing, Jeralds, 445 F.2d at 38-39).
The claimant must show that she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. 42 U.S.C. 423(d)(1)(A). The regulations to the Act create a five-step inquiry in determining whether a claimant is disabled. As previously discussed, the *1186 ALJ must consider the applicants claim in the following sequence:
(1) whether the claimant is currently employed; (2) whether she has a severe impairment; (3) whether her impairment meets or equals one listed by the Secretary; (4) whether the claimant can, perform his past work; and (5) whether the claimant is capable of performing any work in the national economy.
Dixon v. Massanari, 270 F.3d 1171, 1176 (7th Cir.2001) (citing 20 C.F.R. 404.1520). The initial burden in steps, one through four is on the plaintiff; only at step five does the burden shift to the Commissioner. Bolinger, 446 F.Supp.20 at 955.
Ms. Martins first allegation of error concerns the hypothetical posed by the ALJ to Ms. Archer, one of the vocational experts. Ms. Martin alleges that the hypothetical created by the ALI was not the same as the actual RFC that the ALJ found, making the determination at step five of the sequential analysis flawed. Pl. Br. at 6. However, though there might have been differences between the hypothetical and the actual RFC assessment, it does not necessarily mean that the difference is fatal. Indeed,_ as is noted by the Commissioner, the hypothetical was actually more restrictive concerning the weight limits than the RFC assessment. Def. Br. at 10.
However, there were several differences between the hypothetical and the RFC assessment. First, there was no mentioning of intermittent sitting in the hypothetical put to Ms. Archer. Pl. Br. at 7. However, in the span of an eight-hour work day, it is understood that sitting will be interspersed with standing and walking. Indeed, breaks are built into the day so that intermittent sitting becomes an inherent aspect of standing/walking. Second, Ms. Martin states that the hypothetical did not restrict standing and/or walking to off and on. Pl. Br. at 7. Again, this is easily dispensed with; the same logic that applies to intermittent sitting as innate to standing/walking during the average work day applies to the restriction of standing and/or walking. The last two differences alleged by Ms. Martin, that the ALJ did not place restrictions on gripping and handling and that he did not take into consideration the amount of days missed by the hypothetical employee, are not really differences at all. These were not mentioned in the RFC assessment; therefore, it is only natural that they should be absent from the hypothetical put to Ms. Archer.
Ms. Martins first volley being without merit, the court moves to her next argument. Ms. Martin alleges that the RFC findings made by the ALJ were wholly inconsistent with the record. Pl. Br. at 9. She notes that the opinions of Drs. Bohlin and Lockwood, while not being exactly identical as to particulars, both opined that Ms. Martin was disabled. Pl. Br. at 9-10. When addressing the statements of both Drs. Bohlin and Lockwood, along with Drs. El Khalili and Jarmon, the ALJ gave reasons for deeming them either incomplete or entirely invalid (Tr. 375-7).
As to Dr. Bohlin, the ALJ stated that the ability of Ms. Martin to complete the MMPI-2 test meant that she was more capable than Dr. Bohlin had supposed (Tr. 377). Furthermore, he stated that because there were no significant and persistent neurological deficits, restrictions and limitations other than the ones he mentioned in his RFC, the objective medical evidence did not support Dr. Bohlins assessment (Tr. 377).
As to Dr. Lockwood, the ALJ simply noted that the doctor had only seen Ms. Martin once, evidently disqualifying his opinion as deserving of consideration because of the small amount of contact between doctor and patient (Tr. 376). The ALJ also mentioned the MMPI-2 test and *1187 the lack of persistent neurological deficits in discounting Dr. Lockwoods opinion (Tr. 376).
As to Dr. El Khalilis assertion that Ms. Martin was completely incapable of working, the ALJ stated the doctor did not provide any specific restrictions or limitations (Tr. 377). Furthermore, he stated that any restrictions beyond what the ALJ had found were not supported by substantial evidence and thus, Dr. El Khalili was beyond the realm of where the evidence could take him when he made his assertion (Tr. 377).
As to Dr. Jarmon, the ALJ again focused on the MMPI-2 testing to show that Ms. Martin was capable of concentrat[ing] beyond what Dr. Jarmon surmises she can do (Tr. 377). Also, he noted that Dr. Jarmons statement that Ms. Martin could not work continuously for six hours was perfectly consistent with the ALJs RFC assessment because an employee would never work for six hours straight; there were breaks built into the day to forestall that possibility (Tr. 377).
It should be apparent from the review delineated above that the ALJ discounted every single medical expert, without exception, and embraced a somewhat etiolated view of the evidence. Indeed, it appears that the universe of factual data had been restricted, to the MMPI-2 test, which was essentially a take-home test for Ms. Martin, and to his own. RFC, which was a conclusion that was meant to be based on the objective evidence (Tr. 557).
The ALJ multiplied his bald assertions, stating several times that each doctors opinion was contrary to either the ALJs own RFC, the MMPI-2 test, or the lack of any persistent neurological deficits (Tr. 375-7). While this was `certainly a very efficient method of conclusion-seeking, it did not articulate at some minimal level [the ALJs] analysis of the evidence, simply because there was no analysis. Clifford, 227 F.3d at 872.
The ALJ is required to build an accurate and logical bridge between the evidence and the result. Shramek, 226 F.3d at 811. In this case, the ALJ merely made conclusory statements regarding the medical evidence presented by the chorus of doctors. Indeed, it seems that the ALJ purposely stopped his ears with his own RFC finding and the MMPI-2 test, not allowing himself to be swayed by the assertions of the medical experts. While his resolve is impressive, it is not resolve that his decision must be marked by, but substantial evidence.
However, the Commissioner argues in her brief that the ALJ carefully considered and discussed each of these opinions in the course of his opinion. Def. Br. at 15. Furthermore, the Commissioner warns against reversal, stating that a reviewing court should not disturb an ALJs credibility determination as long as there is some support in the record. Def. Br. at 15 (internal citation and quotations omitted).
As stated above, conclusory statements do not equal analysis and careful examination. As to disturbing an ALJs decision, while this court does not lightly overturn the decision of an ALJ, it also does not simply rubber-stamp the Commissioners decision. Clifford, 227 F.3d at 869. Therefore, because the ALJ ignored the doctors opinions without giving substantial evidence as to why he did so, his RFC determination was not supported by substantial evidence. Thus, Ms. Martins other arguments need not be considered.
IV. Conclusion
Thus, because the ALJ failed to support his findings with substantial evidence, his decision is REMANDED for further proceedings consistent with this opinion. Furthermore, the Court strongly recommends *1188 that the Commissioner assign a new ALJ to handle any additional proceedings, because this is the second chance that this ALJ has had to handle this particular matter. See Briscoe ex rel. Taylor v. Barnhart, 425 F.3d 345, 357 (7th Cir. 2005); Golembiewski v. Barnhart, 322 F.3d 912, 918 (7th Cir.2003).
SO ORDERED.
|
IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. WR-64,748-08
EX PARTE DONALD WAYNE COOKS, Applicant
ON APPLICATION FOR A WRIT OF HABEAS CORPUS
CAUSE NO. W04-00121-N(D) IN THE 195TH JUDICIAL DISTRICT COURT
FROM DALLAS COUNTY
Per curiam.
ORDER
Pursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the
clerk of the trial court transmitted to this Court this application for a writ of habeas corpus. Ex parte
Young, 418 S.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant was convicted of deadly conduct
and sentenced to imprisonment for forty years. The Fifth Court of Appeals affirmed Applicant’s
conviction. Cooks v. State, No. 05-04-00620-CR (Tex. App.—Dallas 2005)(not designated for
publication).
After a review of the record and the trial court’s findings, we find that Applicant’s claim in
ground one is without merit. Therefore, we deny relief. Applicant’s claims in grounds two and three
are dismissed as subsequent. TEX . CODE CRIM . PRO . Art. 11.07 §4(a)-(c).
Filed: May 18, 2016
Do not publish
|
333 F.Supp.2d 975 (2004)
TILLAMOOK COUNTRY SMOKER, INC., an Oregon corporation Plaintiff,
v.
TILLAMOOK COUNTY CREAMERY ASSOCIATION, an Oregon cooperative corporation, Defendant.
No. Civ. 02-1540-MO.
United States District Court, D. Oregon.
July 28, 2004.
*976 *977 Brenna Kristine Legaard, Charles D. McClung, J. Peter Staples, Chernoff Vilhauer McClung & Stenzel, LLP, Portland, OR, for Plaintiff.
James C. Edmonds, Clark Lindauer Fetherston Edmonds, Salem, OR, for Defendant.
OPINION
MOSMAN, District Judge.
In this trademark case, the court is asked to decide whether plaintiff Tillamook Country Smoker ("Smoker") may register certain trademarks with the Patent and Trademark Office ("PTO"). Defendant Tillamook County Creamery Association ("Creamery") argues that registration is inappropriate because the marks at issue present a likelihood of consumer confusion as to defendant's registered marks for the word "Tillamook." Smoker argues that it has full rights in the use of its marks and thus may formally register them. Both sides have moved for summary judgment. Because the court holds Creamery cannot prevent Smoker from registering the marks, defendant Creamery's motion for summary judgment is DENIED (doc. # 110), while plaintiff Smoker's motion is GRANTED (doc. # 117).
I. BACKGROUND
On April 1, 2004, the court issued an order in this case holding that laches barred Creamery from challenging Smoker's use of the phrase "Tillamook Country Smoker" to sell its smoked-meat products. See 311 F.Supp.2d 1023 (D.Or.2004). The court also held that Smoker could not use the mark "Tillamook Jerky," because such use would infringe Creamery's marks. The parties also raised issues related to Smoker's federal registration of the mark "Tillamook Country Smoker." The court ordered supplemental briefing on the registration issues and heard oral argument. Because familiarity with the court's prior order is presumed, the court sets out only those facts bearing on resolution of the registration issues.
As early as 1918, Creamery began using the word mark "Tillamook" in connection with dairy products. Tillamook is the name of the county where Creamery is based. The company obtained federal registration for marks using "Tillamook" in 1921 and then again in 1950. Using the mark "Tillamook," Creamery has spent countless millions promoting its products *978 and has grown to one of the nation's most successful dairy-food companies.
In 1975, Crawford Smith, then a member of Creamery, entered the smoked-meat business. He decided to give the new business the name "Tillamook Country Smoker." Concerned about Creamery's reaction to his use of that name, Smith approached Creamery's then-president, Beale Dixon, to discuss the issue. Dixon stated he had no objection to the new company's use of "Tillamook Country Smoker," as long as Smith did not "build a cheese plant." Dixon agreed he would steer clear of the cheese market and commenced using "Tillamook Country Smoker" to sell smoked meats.
In 1975, Smoker designed its first label which prominently featured the mark "Tillamook Country Smoker." While Smoker has used over twenty-five different labels since 1975, it consistently has featured the phrase "Tillamook Country Smoker" on those labels.
After having used the mark for about ten years, in a letter dated January 6, 1985, Smoker sought permission from Creamery to register with the PTO "Tillamook Country Smoker." Never having received a response from Creamery, Smoker initiated registration proceedings before the PTO, applying for registration of the mark in September 1985. A couple months later, the PTO denied Smoker's application for registration, citing Creamery's prior-registered marks for "Tillamook" in support of its conclusion that "Tillamook Country Smoker" would give rise to a likelihood of consumer confusion.
Despite the PTO's 1985 denial, Smoker continued to use the mark, without objection from Creamery. Millions of dollars and a decade later, Smoker, in 1995, tried again to register with the PTO "Tillamook Country Smoker." This time, Smoker coupled the word mark with a "design" element. Specifically, Smoker sought to register "Tillamook Country Smoker" in connection with a particular label design the parties refer to as the "ribbon design." That design prominently displays the word "Tillamook," in larger font size than the words "Country Smoker," and the words appear in connection with a "wrap-around ribbon" and a large number one. Smoker sought registration of the mark so it could use the mark to sell "processed meats sold refrigerated and unrefrigerated as snack foods."
On October 29, 1996, the PTO published the ribbon-design mark for opposition; no opposition was filed. The PTO thus eventually granted Smoker's application and registered the ribbon-design mark on January 21, 1997.
A couple years later, Smoker hired a brand expert to help it develop a more successful brand image. As part of that effort, Smoker redesigned its labels. Smoker created and began using what the parties call the "circle T design." The circle T is what it sounds like, a large T with a circle around it, like a cattle brand. The circle T is used in connection with the word mark "Tillamook Country Smoker." Although since 1997 the large majority of Smoker's products have been marketed under this circle T design, Smoker has continued to use the ribbon design for a small percentage of its sales.
In a demand letter dated September 1, 2000, Creamery for the first time expressly objected to Smoker's use of "Tillamook Country Smoker."[1] In addition, almost *979 four years after the PTO published for opposition the ribbon-design mark, Creamery, on September 20, 2000, initiated cancellation proceedings, asking the PTO to cancel the ribbon-design mark's registration. To this date, that mark has not been canceled.
Aside from the PTO proceedings involving the ribbon-design mark, separate registration proceedings also are at issue in this case. On September 21, 1999, Smoker filed another registration application with the PTO. As it did with respect to the 1995 application for registration, Smoker sought registration to use the mark "Tillamook Country Smoker" for "processed meats and refrigerated and unrefrigerated as snack foods." Smoker sought to register just the word mark "Tillamook Country Smoker," without any design element. That is, unlike the 1995 registration of "Tillamook Country Smoker" which was specifically in connection with the ribbon design, the 1999 application for registration excluded any particular design and listed only the words "Tillamook Country Smoker."
As part of its 1999 application for "Tillamook Country Smoker," Smoker's president, Mr. Smith, filed an affidavit averring he was unaware of any mark "in such near resemblance" to Smoker's mark as to cause a likelihood of consumer confusion. Smoker did not mention the PTO's 1985 refusal to register "Tillamook Country Smoker." The PTO examining attorney initially conditioned approval upon Smoker's dropping the geographic term "Tillamook." In response, Smoker argued that "Tillamook," as used in conjunction with "Country Smoker," had become distinctive of Smoker's meat products.
Eventually, the PTO examining attorney approved Smoker's application for the word mark "Tillamook Country Smoker." On June 18, 2002, the PTO published the mark for opposition. On July 16, 2002, Creamery filed objections with the PTO, arguing that registration of the word mark would cause consumer confusion in light of Creamery's long prior use of the word "Tillamook." To this date Smoker's word-only mark has not been registered.
Unable to resolve the dispute themselves, Smoker filed this lawsuit in September 2002. Among other things, Smoker sought a declaratory judgment protecting its right to register both the ribbon-design mark and the word-only mark.
As mentioned, Creamery moves for summary judgment against Smoker's registration-based claims. It argues that, as a matter of law, registration of the marks at issue will cause a likelihood of consumer confusion, thus making registration inappropriate.
Smoker also moved for summary judgment arguing that, as a matter of law, Creamery can neither successfully cancel the ribbon-design mark nor oppose registration of the word-only mark. Smoker argues that Creamery is precluded from challenging registration because Creamery has made representations in this litigation which directly contradict its arguments against registration. Smoker additionally relies on the doctrines of laches and acquiescence. In connection with these arguments in support of registration, Smoker invokes the trademark doctrine known as the "prior registration defense."
II. JURISDICTION
In the Lanham Act, Congress expressly gave courts authority over PTO registration issues involving trademarks:
In any action involving a registered mark the court may determine the right to registration, order the cancellation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the *980 registrations of any party to the action. Decrees and orders shall be certified by the court to the Commissioner, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby.
15 U.S.C. § 1119. The Act thus expressly allows the court to order cancellation of the ribbon-design mark, if appropriate under the particular circumstances presented. See, e.g., McCarthy on Trademarks § 30.109 ("a registration may be collaterally attacked in any civil action where validity of the mark is in issue.").
While the Act does not expressly allow a court to order registration of an unregistered mark, see In re Fortex Indus., Inc., 18 U.S.P.Q.2d 1224, 1226 (Comm'r Pat. & Trademarks 1991), courts generally presume that the statute confers such authority. See, e.g., Massa v. Jiffy Prods. Co., 240 F.2d 702, 707 (9th Cir.1957). Moreover, the court believes that, read as a whole, Section 1119 of the Lanham Act contemplates that courts may, in appropriate cases, order registration of a mark. Accordingly, in addition to having the authority to consider Creamery's request that the court cancel the registered mark for the ribbon design, the court also has authority to consider Smoker's request that the court order registered the word mark "Tillamook Country Smoker." In finding the latter authority, the court emphasizes that there do not appear to be any objecting non-parties whose rights would be affected by the registration of Smoker's mark, which the PTO previously published for public opposition. The court thus turns to the merits.
III. DISCUSSION
A. Use vs. Registration
For purposes of context, it is helpful to discuss briefly the differences between use of a mark and actual registration of that same mark. Nonregistration of a mark does not generally undermine one's state or federal rights in a mark; "it is use, not registration, that creates the underlying exclusive right to a mark." McCarthy on Trademarks § 19.3. At the same time, "trademark registration of itself does not create the underlying right to exclude." Gilbert/Robinson, Inc. v. Carrie Beverage-Mo., Inc., 989 F.2d 985, 991 (8th Cir.1993) (citation omitted) (emphasis in original); see also Volkswagenwerk Aktiengesellschaft v. Wheeler, 814 F.2d 812, 815 (1st Cir.1987) ("Trademark rights do not generally arise from registration."). In short, registration does not give a trademark holder unfettered license to expand use into new markets and create new trademark designs.
Registration, however, is qualitatively different from mere use. See National Cable Tel. Ass'n, Inc. v. American Cinema Editors, Inc., 937 F.2d 1572, 1580 (Fed.Cir.1991) ("It is true that a registration on the principal register is recognition of the registrant's right to use its mark, but it is substantially more than that." (citation omitted)). That is because registration of a trademark triggers certain substantive and procedural rights which do not exist by virtue of use alone.[2]
In addition to providing some context, understanding the difference between use and registration has a direct effect on the parties' arguments. Specifically, *981 Smoker argues it is entitled to registration under the doctrines of laches and acquiescence. In making this argument, Smoker measures the passage of time from Smoker's initial use of "Tillamook Country Smoker," which first occurred in 1975. As the court held in its prior order, the doctrine of laches prohibits Creamery from objecting to Smoker's use of the word mark. While Smoker suggests that a similar analysis applies when considering the registration issues, Creamery argues that the relevant time period must be measured not from use but from the date when Creamery first could have objected to federal registration.
The court agrees with Creamery. The Federal Circuit has considered this precise issue and held that laches must be treated differently for purposes of registration:
"Appellant was clearly under no duty to attack appellee's right to use the mark if it did not choose to do so, on penalty of being deprived of the right to oppose an application to register. It could not take the latter action, of course, until after appellee applied for registration and the application was published for the purpose of opposition."
National Cable Tel., 937 F.2d at 1580 (quoting Salem Commodities, Inc. v. Miami Margarine Co., 44 C.C.P.A. 932, 244 F.2d 729, 732 (Cust. & Pat.App.1957)); see also Lincoln Logs. Ltd. v. Lincoln Pre-Cut Log Homes, Inc., 971 F.2d 732, 734 (Fed.Cir.1992) ("As applied in trademark opposition or cancellation proceedings, these defenses [laches and estoppel] must be tied to a party's registration of a mark, not to a party's use of the mark." (emphasis in original)). Thus, contrary to Smoker's argument, for purposes of objecting to registration, the relevant time period did not begin to run until the marks were published for opposition, which, in this case, occurred in late 1996 and 2002. Given that Smoker's laches and acquiescence arguments are based on the time of its use of the marks, the court rejects its laches and acquiescence defenses.[3]
B. Creamery's "No Infringement" Position
Smoker argues it would be inequitable to permit Creamery to argue that registration of the marks would violate Creamery's trademark rights in light of the contradictory nature of one of Creamery's core arguments made throughout this litigation. Specifically, Creamery has consistently maintained that Smoker's use of "Tillamook Country Smoker" did not infringe until the late '90s, when Smoker began using the circle T packaging design. Smoker posits that Creamery was forced to take this position in an attempt to avoid application of laches, given Smoker's decades-long use of that mark. According to Smoker, Creamery's central argument that there was no violation of its rights until the late '90s sharply contradicts Creamery's arguments made in opposing registration that allowing registration of Smoker's "Tillamook Country Smoker" marks would be inappropriate because the marks give rise to a likelihood of consumer confusion.
*982 As a threshold matter, the court agrees that Creamery's arguments cannot be reconciled in a meaningful way. In making this assessment, it is important to bear in mind the standards which govern both an infringement action and a registration proceeding before the PTO. As is the case in most registration proceedings, the ultimate issue on the merits presented here is whether allowing registration of Smoker's marks likely will "cause confusion." See 15 U.S.C. § 1052. In seeking to cancel the ribbon-design mark and opposing registration of the word-only mark, Creamery does indeed argue that registration of those marks will likely cause confusion in light of Creamery's rights in "Tillamook." See, e.g., Creamery's (Second) Summary Judgment Brief at 2 ("[Smoker's] marks are likely to cause confusion with [Creamery's] senior registered marks, and as a result, they cannot be registered.").
An infringement action presents the same core issue as that presented in registration proceedings: "The core element of trademark infringement is the likelihood of confusion, i.e., whether the similarity of the marks is likely to confuse customers about the source of the products." E & J Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1290 (9th Cir.1992). In previously moving for summary judgment against Smoker, Creamery's core argument indeed was that Smoker's use of "`Tillamook' causes a likelihood of confusion," as a matter of law. See Creamery's (First) Summary Judgment Brief at 9. But, Creamery argued, Smoker's infringement did not occur until after 1997 when Smoker began direct selling to grocery stores and using the circle T design. According to Creamery's prior arguments, then, mere use of "Tillamook Country Smoker," as part of the ribbon design or otherwise, does not create a likelihood of confusion. Thus, on the one hand, Creamery argues in opposing registration that use of "Tillamook Country Smoker" in connection with meat snacks likely will cause confusion; but, on the other hand, in its prior opposition to application of laches, Creamery argued that mere use of "Tillamook Country Smoker" in connection with meat snacks did not create a risk of confusion.
In sum the court finds inconsistency between Creamery's prior arguments in seeking to avoid laches and its current arguments made in opposing registration. The more difficult issue is whether that inconsistency makes a difference to resolution of the issues before the court.
1. Effect of Court's Prior Ruling
Creamery essentially responds that its prior arguments, however one may characterize them, are irrelevant in light of the court's prior holding on laches. As mentioned, in an order dated April 1, 2004, the court held that, as a matter of law, the laches doctrine precludes Creamery from challenging Smoker's use of "Tillamook Country Smoker," in connection with Smoker's meat products. According to Creamery, the court's laches ruling necessarily found that Smoker's longstanding use of "Tillamook Country Smoker" infringes Creamery's marks. In other words, Creamery contends, there can be no laches finding without a threshold finding of likelihood of confusion. Accordingly, as the court construes Creamery's argument, it is now the "law of the case" that Smoker's use of its marks infringes Creamery's rights. Creamery, therefore, contends that the court effectively decided in its April 1 order that the marks at issue cannot be registered, because only marks which do not infringe existing marks may be registered with the PTO.
The law-of-the-case doctrine applies only if "the issue in question [was] `decided explicitly or by necessary implication' in the previous disposition." United States v. Lummi Indian Tribe, 235 F.3d *983 443, 452 (9th Cir.2000) (quoting Liberty Mut. Ins. Co. v. EEOC, 691 F.2d 438, 441 (9th Cir.1982)). Whether to apply the doctrine is within the trial court's discretion. Id.
The court rejects Creamery's argument. The court did not "by necessary implication" or otherwise decide that Smoker's use of "Tillamook Country Smoker" likely causes confusion. The court's laches ruling only went so far as to bar Creamery from claiming that use of the mark amounted to infringement. That is, Creamery's infringement argument was based on the use of "Tillamook Country Smoker." In applying laches in favor of Smoker, the court reasoned that the mark, in materially consistent form, had been in use since the mid-'70s. Creamery, therefore, was affirmatively claiming infringement based on a use which had not materially changed over the course of almost thirty years. As the court said once before, "a party cannot sue claiming conduct X is infringement when conduct X has been occurring for many years with the party's knowledge." 311 F.Supp.2d at 1032.[4] Of course, conduct X may, in effect, become conduct Y, due to a material change in use implicating progressive encroachment. But, as the court previously held, that is not the case here. Accordingly, at least under the circumstances of this case, where Creamery affirmatively claimed infringement, it was not necessary for the court to find a likelihood of confusion before applying laches. Cf., e.g., Hubbard Feeds, Inc. v. Animal Feed Supplement, 182 F.3d 598, 601-02 (8th Cir.1999) (applying laches against infringement claimant while also finding that there was insufficient evidence of consumer confusion); Prudential Ins. Co. of Am. v. Gibraltar Fin. Corp., 694 F.2d 1150, 1153-55 (9th Cir.1982) (applying laches against infringement claimant while also holding there was no support for finding consumer confusion). To accept Creamery's argument would allow a user to file a meritless infringement claim against a longstanding user and, in turn, rely on a laches holding to say the court found infringement, thereby producing ammunition for registration or other challenges.
The court thus rejects Creamery's argument that the prior ruling found confusion likely to occur. That is not to say that confusion is not likely to occur as a result of Smoker's use of "Tillamook Country Smoker," but just to say that the court did not, and need not, decide that issue in this litigation. The court, therefore, next considers Smoker's argument that registration is appropriate because, by Creamery's own admissions, mere use of "Tillamook Country Smoker" does not violate its trademark rights.
2. Creamery's Conclusive Admission
Smoker argues that Creamery's responses to Smoker's requests for admission conclusively establish that use of the marks at issue do not likely cause confusion. In making this argument, Smoker relies on the following discovery exchange:
Request for Admission No. 79: [Creamery] alleges that [Smoker's] activities between 1995 and 2000 violated [Creamery's] rights in TILLAMOOK.
Response: .... Defendant admits that [Smoker's] activities began violating *984 [Creamery's] rights in the word TILLAMOOK at some point in the latter part of the stated time period.
(Emphasis added). Based on this admission, Smoker argues that Creamery in effect admitted that Smoker did not infringe Creamery's trademark rights before the late '90s.
But, as Smoker is quick to point out, it began using the ribbon-design mark the subject of Creamery's cancellation request in 1988, relying almost exclusively on that mark from 1988 until 1996. In addition, Smoker has used the word mark "Tillamook Country Smoker" the subject of the second registration proceeding since the 1970s. It has used "Tillamook Country Smoker" on over twenty-five different labels. Creamery has never argued that any of Smoker's labels, aside from the use of the word "Tillamook," are otherwise similar to Creamery's labels.
With this background in mind, accepting Creamery's admission that Smoker's longstanding use of "Tillamook Country Smoker" did not violate Creamery's rights undercuts Creamery's burden to show that registration of "Tillamook Country Smoker" will likely cause confusion. The issue, then, is whether the court must accept Creamery's admission in deciding whether Smoker may register its marks.
The rule for decision is found in the Federal Rules of Civil Procedure. Rule 36, in pertinent part, provides:
(a) Request for Admission. A party may serve upon any other party a written response for the admission ... of the truth of any matters within the scope of Rule 26(b)(1) set forth in the request that relate to statements or opinions of fact or the application of law to fact....
(b) Effect of Admission. Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission....
Fed.R.Civ.P. 36 (emphasis added). Thus "Rule 36 allows litigants to request admissions as to a broad range of matters, including ultimate facts, as well as applications of law to fact." In re Carney, 258 F.3d 415, 419 (5th Cir.2001); see, e.g., 999 Corp. v. C.I.T. Corp., 776 F.2d 866, 868-69 (9th Cir.1985) (enforcing admission stating there was "an agreement" even though whether an agreement existed was an ultimate issue in case); Cereghino v. Boeing Co., 873 F.Supp. 398, 401 (D.Or.1994) (enforcing admission that contamination was not caused by defendant company even though determining causation in contamination cases "is often impracticable"). The plain purpose of the rule is to expedite resolution of litigation by "narrowing the range of issues" left for decision. Asea, Inc. v. Southern Pac. Transp. Co., 669 F.2d 1242, 1245 (9th Cir.1981). In light of the judicial efficiency this purpose seeks to serve, the court should not consider evidence "inconsistent with a Rule 36 admission." 999 Corp., 776 F.2d at 870; see also American Auto. Ass'n v. AAA Legal Clinic, 930 F.2d 1117, 1120 (5th Cir.1991) ("An admission that is not withdrawn or amended cannot be rebutted by contrary testimony or ignored by the district court simply because it finds the evidence presented by the party against whom the admission operates more credible."); Advisory Committee Notes, at 48 F.R.D. 487, 534 (1970) ("Unless the party securing an admission can depend on its binding effect, he cannot safely avoid the expense of preparing to prove the very matters on which he has secured an admission, and the purpose of the rule is defeated."). In addition, while a party may move to withdraw or amend a Rule 36 admission, district courts must be "cautious in exercising their discretion to permit withdrawal or amendment." 999 Corp., 776 F.2d at 869.
*985 In this case, Creamery has not asked the court to amend or withdraw the admission at issue. Indeed the admission comports with the theory of the case Creamery has advocated throughout these proceedings, namely, that Smoker did not infringe Creamery's trademark rights until after 1997.[5] As already indicated, the court concludes that this prior position which was taken in opposition to Smoker's laches defense is inconsistent with Creamery's current position that mere use of "Tillamook Country Smoker" causes consumer confusion and thus should not be registered. Based on Rule 36's clear mandate, Creamery is conclusively bound to its admission that use of "Tillamook Country Smoker" did not violate Creamery's rights until sometime in the late '90s, when Smoker began using the circle T design.
Given that admitted proposition, there plainly is no basis for denying registration of the ribbon-design mark. As early as 1988, Smoker used the ribbon design on most of its packaging. Thus, because Creamery's admission requires the court to conclude Smoker did not violate Creamery's rights until the late '90s, maintaining registration of the ribbon design does not violate the Lanham Act.
In addition, registration of the word-only mark "Tillamook Country Smoker" is appropriate, in light of Creamery's admission that mere use of that phrase does not violate Creamery's rights. Given Smoker's almost thirty-year use of that mark on its packaging, Creamery's infringement argument rested on Smoker's new circle T design and grocery-store marketing strategy. But, as the court ruled in its prior order, Smoker's marketing and packaging changes neither materially departed from its longstanding use of "Tillamook Country Smoker" nor made the mark more similar to Creamery's packaging. All that remains standing, therefore, is Creamery's current position that mere use of "Tillamook Country Smoker" will likely cause confusion. Creamery's discovery admission conclusively resolves that issue. See Fed.R.Civ.P. 36.[6] Accordingly, under the unique circumstances presented, the court concludes that it is appropriate to permit registration of Smoker's marks.
C. Prior-Registration Defense
Creamery suggests that its discovery admission, at the very least, should not be applied to preclude opposition to registration of the word-only mark. It argues that registration of the word-only mark is different from the ribbon-design mark in at least one important respect: the word-only mark is not limited by a specific design element. Thus, according to Creamery, applying its prior admission against it as to the word-only mark would be unfair.
Even were the court to accept Creamery's distinction and allow opposition to the word-only mark, the ribbon-design mark could not be canceled, given the previously quoted discovery admission which, as discussed infra, is obviously inconsistent with Creamery's current position *986 that use of the ribbon design likely will cause confusion. Because the ribbon-design mark cannot be canceled, Creamery cannot show any additional damage from the registration of the word-only mark, since Creamery's challenge to that mark, too, is based entirely on the use of the word "Tillamook." As discussed below, Creamery's opposition to the word-only mark, therefore, would be barred, in any event, by the prior-registration doctrine.
In 1969 the Court of Customs and Patent Appeals first gave life to the prior-registration doctrine. Morehouse Mfg. Corp. v. J. Strickland & Co., 56 C.C.P.A. 946, 407 F.2d 881, 884 (Cust. & Pat.App.1969). The doctrine is based on common-sense notions related to when one can show harm from a registration:
The prior registration or Morehouse defense is an equitable defense, to the effect that if the opposer can not be further injured because there already exists an injurious registration, the opposer can not object to an additional registration that does not add to the injury.
O-M Bread, Inc. v. United States Olympic Committee, 65 F.3d 933, 938 (Fed.Cir.1995). Thus if one opposing a mark "cannot procure the cancellation of [an] existing registration it cannot prevent the granting of [a] second registration" of effectively the same mark. Morehouse, 407 F.2d at 884. Given this underlying rationale, which essentially compels parties to act quickly to challenge registrations believed to be potentially harmful, the prior-registration or Morehouse doctrine has been described as "an equitable defense in the nature of laches or acquiescence." McCarthy on Trademarks § 20:38.[7]
The Morehouse doctrine is not broadly applied; one invoking it must satisfy the court of the existence of two conditions: (a) the two marks are "substantially identical," and (b) the marks are for "substantially identical" goods or services. Advance Stores Co. v. Refinishing Specialties, Inc., 948 F.Supp. 643, 654 (W.D.Ky.1996) (citing Morehouse, 407 F.2d at 884). Only the first element, whether the marks are substantially identical, is at issue in this case.[8]
1. Decisions Applying Prior-Registration Doctrine
Smoker argues that the fact two marks are technically different does not inherently preclude them from being "substantially identical" for purposes of the prior-registration doctrine. Smoker's argument finds support in case law. For instance, the Trademark Board allowed registration of the word-only mark "Continental" because the holder, Continental Connector Corp., had previously registered two marks consisting of the word "Continental" accompanied by specific design elements. Continental Specialties Corp. v. Continental Connector Corp., 192 U.S.P.Q. 449, 451-52, 1976 WL 21143 (Trademark Tr. & App. Bd.1976). The opposing party held rights to the phrase "Continental Specialties" and thus based its challenge to the registration of Continental Connector's three marks on the marks' use of the word "Continental." *987 The Trademark Board concluded that the challenged marks all created the "same commercial impact," even though the two previously registered marks had design elements. Id. Similarly, in the only federal court case involving the prior-registration doctrine cited by the parties, the court allowed registration of the word mark "Advance Auto Parts," because the mark's holder had rights in prior registrations for that word mark in conjunction with specific design elements. Advance Stores Co., 948 F.Supp. at 654. The district court reasoned:
Plaintiff uses "Advance Auto Parts" in all three of its registrations. The only difference between earlier and later marks is the design element. According to past cases, the mere stylization of a name, or the addition of a design element, is not enough to defeat the Morehouse defense. See, e.g., S & L Acquisition Co. v. Helene Arpele, Inc., 9 U.S.P.Q.2d 1221, 1225-26, 1987 WL 123899 (Trademark Tr. & App. Bd.1987).
Id.
In another case, the Trademark Board applied Morehouse and allowed registration of the word mark "Hollywood" in light of the holder's prior registration of the more specific mark "Hollywood Health Foods." National Bakers Services, Inc. v. Hain Pure Food, Inc., 207 U.S.P.Q. 701, 706-07, 1980 WL 30150 (Trademark Tr. & App. Bd. 1980). Phrasing the key question as "how would the purchasing public consider such marks," when used in connection with the same product, the Trademark Board concluded that consumers would perceive both marks as conveying simply the word "Hollywood." Id. at 707, 1980 WL 30150. That is, consumers would find marks "projecting the same image and symbolizing a single and continuing commercial impression." Id.
The court makes note of one other decision relied upon by Smoker, The Place for Vision, Inc. v. Pearle Vision Center, Inc., 218 U.S.P.Q. 1022, 1983 WL 51990 (Trademark Tr. & App. Bd. 1983). In Pearle Vision, unlike in the case at bar, a word-only mark "Vison Center" was the prior registered mark, and the subsequent, unregistered mark "Pearle Vision Center and Design" included a specific design element. Thus, as Creamery points out, Pearle Vision is distinguishable from the case at bar. But the Trademark Board's analysis in Pearle Vision is notable for its emphasis on the fact the opposer's challenge was based on the dominant feature shared by both marks, the words "Vision Center." Thus the difference between the two marks was immaterial for purposes of applying the prior-registration doctrine. See id. (applying prior-registration defense "because opposer's claim of damage relates only to the `Vision Center' portion of applicant's mark and not to the `Pearle' and design portions of the mark").
In summary, decisions applying the prior-registration doctrine indicate that whether two marks are "substantially identical" turns in part on whether consumers would find that each mark conveys the same commercial impression. Another relevant factor suggested by the decisions is whether the opposition to the two marks is based entirely on a dominant feature shared by the prior registered and currently opposed marks. When the differences between the registered and currently unregistered marks do not meaningfully contribute to the challenger's alleged harm, it makes little sense to allow the challenging party to defeat registration of the second mark. Focusing on marketplace impressions and the basis for the registration challenge makes sense in light of the primary reason underlying Morehouse: an opponent should not be allowed to challenge registration when it will not cause the opponent to suffer any additional harm.
*988 2. Application to This Case
As discussed, Creamery cannot now claim that the ribbon-design mark will likely cause confusion, in light of its previous inconsistent position taken in this lawsuit. As a result, assuming that Creamery's previous position does not preclude it from attacking registration of the word-only mark, the issue is whether that mark is substantially identical to the registered ribbon-design mark for purposes of the prior-registration doctrine. Under the circumstances of this case, the court concludes they are.
The ribbon design's dominant feature is the use of "Tillamook Country Smoker," and, of course, the only feature of the word-only mark is the identical phrase "Tillamook Country Smoker." Cf. O-M Bread, Inc., 65 F.3d at 938-39 (holding that word mark "Olympic" was not sufficiently similar to "Olympic Kids" for purposes of satisfying Morehouse). Consumers "encountering these marks in the marketplace used to identify the identical product" would find marks "projecting the same image and symbolizing a single and continuing commercial impression." National Bakers Servs., Inc., 207 U.S.P.Q. at 707. Most significant, Creamery's challenge from the outset has been based solely on the use of the word "Tillamook," a word prominently displayed on the ribbon-design packaging. Thus, confining registration to the ribbon-design mark serves only to limit unnecessarily Smoker's rights without also protecting Creamery in any way from the alleged source of its harm, the use of the word "Tillamook." Under these circumstances, the court is persuaded by Smoker's prior-registration defense.[9]
3. Unclean Hands
Creamery argues that, even assuming Smoker can satisfy the elements of an equitable defense such as the prior-registration defense, Smoker comes to the court with unclean hands and thus is barred from equity. Creamery's argument is based on the PTO's 1985 denial of Smoker's application to register "Tillamook Country Smoker." As mentioned, the PTO denied registration because it found a likelihood of confusion between Smoker's mark and Creamery's "Tillamook" marks. According to Creamery, because Smoker did not later disclose the 1985 denial to the PTO when applying for registration of the ribbon-design and word-only marks, in 1995 and 1999, Smoker is not an innocent user entitled to invoke equity.
Under the circumstances of this case, it would be inappropriate to bar Smoker from proceeding in equity. As more fully discussed in the court's prior opinion, Creamery over the years actively encouraged and benefited from Smoker's product sales, all of which were made under the mark "Tillamook Country Smoker." Indeed, in 1975, Creamery's president consented to Smoker's use of the mark. And, more directly relevant to Smoker's failure *989 to disclose the 1985 PTO denial, Smoker expressly asked for Creamery's permission to register "Tillamook Country Smoker." Creamery never responded. It was not until after another decade of joint marketing efforts had passed did Smoker again apply for registration of the ribbon-design mark. Creamery still had not objected when Smoker applied in 1999 for registration of the word-only mark. Based on the two companies' past cooperation and Creamery's silence, Smoker reasonably could have concluded that its mark was not violating Creamery's rights. This history at least neutralizes any questionable motives on the part of Smoker. The case upon which Creamery relies presents no similar circumstances. See National Customer Eng'g, Inc. v. Lockheed Martin Corp., 43 U.S.P.Q.2d 1036, 1997 WL 363970 (C.D.Cal.1997) (finding "bad faith" on part of registrant, thereby precluding equitable defenses, where registrant was denied registration by PTO on confusion grounds the year registrant first began using the mark and it then continued to use the mark without opposer's knowledge).
In short, given the particular facts presented, the court is not persuaded Smoker has engaged in any unconscionable conduct barring it from invoking equitable principles. Cf. Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 245, 54 S.Ct. 146, 78 L.Ed. 293 (1933) (discussing unclean-hands maxim in patent case and reasoning maxim should only be applied for "the advancement of right and justice" and when "some unconscionable act of one coming for relief has immediate and necessary relation to the equity" sought (emphasis added)).
D. Public Interest
On a final matter, the court acknowledges the PTO's gatekeeping role in ensuring marks are not registered which likely will cause consumer confusion. See 15 U.S.C. § 1052 (providing marks should not be registered if doing so likely will cause consumer confusion, mistakes, or deception). In light of this gatekeeping role, Creamery suggests that the court must consider the issue of whether consumer confusion likely will result, without regard for any defenses Smoker may otherwise have.
1. Smoker's "Legitimate" Rights
As an initial point, Creamery argues that, because Smoker's rights were acquired by laches, those rights are "illegitimate" in the eyes of the Lanham Act. Creamery, therefore, suggests that Smoker's rights to "Tillamook Country Smoker" are not worthy of registration under the Act. The court rejects that argument. When a junior user obtains the right to use a mark through the application of equitable principles such as laches, the junior user's marks "stand in parity" with the complaining senior party's marks. SunAmerica Corp. v. Sun Life Assurance Co. of Canada, 77 F.3d 1325, 1334 (11 th Cir.1996). Accordingly, when "a senior user delays in enforcing its rights, a junior user may acquire a valid trademark in a related field, enforceable against even the senior user." Patsy's Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 217 (2d Cir.2003) (emphasis added). In short, in relation to one another, Creamery may seek and defend registration of its marks, and Smoker may do so as to its marks. The only issue, therefore, is whether public interest considerations nevertheless compel a ruling in Creamery's favor.
2. Public Interest Considerations in This Case
It is well established that "equitable principles of laches, estoppel, and acquiescence may be considered and applied in all inter partes [PTO] proceedings." *990 McCarthy on Trademarks § 25:51; see also O-M Bread, 65 F.3d at 938 (observing that "[e]quitable principles are available when justice requires"). Thus, for purposes of determining what marks can be registered, considerations of public interest are not invariably limited to the issue of consumer confusion, contrary to Creamery's contention otherwise.
In this case, the court believes that public interest considerations do not weigh against, and indeed may affirmatively favor, allowing registration of Smoker's marks. As mentioned, the court previously held that Smoker may continue to use the mark "Tillamook Country Smoker," as long as it is consistent with Smoker's historical use of the mark. As a result, from the standpoint of consumers, no substantial purpose is served by preventing registration when use of the mark, and thus the allegedly potential consumer confusion, will exist anyway.
The Court of Customs and Patent Appeals acknowledged the limitations of using registration to guard against consumer confusion:
Refusal to register cannot prevent confusion. At most, it might discourage further use. Refusal can, under certain circumstances, encourage potential confusion. Absence of a registration of RALLY for auto cleansers in the present case may, for example, lead others to adopt and use that or a similar mark for auto cleansers. Granting a registration will not produce confusion. Use alone can do that and neither we nor the Patent Office can grant or deny a right to use.
In re DuPont DeNemours & Co., 476 F.2d 1357, 1364 (Cust. & Pat.App.1973) (emphasis in original). Moreover, as the Federal Circuit has observed, allowing use to follow registration may in some cases affirmatively serve the Lanham Act's policies: "One of the policies sought to be implemented by the Act was to encourage the presence on the register of trademarks of as many as possible of the marks in actual use so that they are available for search purposes." Bongrain Int'l (Am.) Corp. v. Delice de France, 811 F.2d 1479, 1485 (Fed.Cir.1987); see also In re E.I DuPont, 476 F.2d 1357, 1364 ("Although a naked right to use cannot always result in registration, the Act does intend ... that registration and use be coincident so far as possible."); Gilbert/Robinson, Inc., 989 F.2d at 990 ("one who has gained rights in a mark by its use in commerce is entitled to a fair, even liberal, construction of the registration provisions of federal law.").
In summary, the court determines that registration of Smoker's marks is appropriate. The court believes this conclusion is all the more appropriate in light of the longstanding coexistence of the parties' marks in the marketplace, a coexistence which Creamery, with its own profits in mind, consistently encouraged.
IV. CONCLUSION
For the foregoing reasons, the court denies Creamery's request to cancel registration of the ribbon-design mark and orders the PTO to register the word-only mark "Tillamook Country Smoker." The court, therefore, denies Creamery's motion for summary judgment (doc. # 110) and grants Smoker's motion for summary judgment (# 117).
IT IS SO ORDERED.
NOTES
[1] As the court discussed in its prior order, Creamery essentially proffers two reasons for why it waited until 2000 to object expressly about the use of "Tillamook Country Smoker": First, Smoker had only begun using the "circle T" packaging design in the late '90s. And, second, Smoker had begun during that time period to market its meat products more aggressively to main-line grocery stores.
[2] Some of the rights specially conferred on registered trademarks include the following: availability of treble damages and attorney fees; prima facie evidence of a mark's validity, the registrant's ownership and exclusive use of the mark; and constructive notice of registrant's ownership so as to defeat any claim of good faith asserted by other users. See generally McCarthy on Trademarks § 19:9.
[3] The court notes that Creamery waited almost four years before objecting to the ribbon-design application. Although such a delay might have been unreasonable in this case, cf., e.g., Turner v. Hops Grill & Bar, Inc., 52 U.S.P.Q.2d 1310 (Trademark Tr. & App. Bd. 1999) (finding unreasonable, for laches purposes, five-year delay from date of publication because delay in challenging registration was "clearly substantial"), the court does not decide whether Creamery unreasonably delayed before seeking cancellation. First, Smoker does not argue that the delay as measured from publication was unreasonable. Moreover, the issue need not be decided because Smoker has a right to register the marks for other reasons, as discussed in this order.
[4] In arguing that the court previously found infringement, Creamery relies on the following statement from the court's April 1 order: "the facts forming the crux of Creamery's infringement claim against Smoker have existed for almost thirty years." 311 F.Supp.2d at 1032 (emphasis added). That statement is entirely consistent with the idea that the laches analysis in this case should be judged according to the alleged "Conduct X" upon which Creamery relied to assert an affirmative claim of infringement.
[5] For example, Creamery made the following representations in this lawsuit:
. "The parties agree: prior to the use of the 1997 [circle T] design, [Smoker] committed no actionable infringement.... The uses prior to the ... Circle T did not infringe." See Creamery's Summary Judgment Response at 14, 18.
. "[Creamery] objected to [Smoker's] infringement of the federally registered mark Tillamook on September 1, 2000. [Creamery] had no legal obligation to object to mere use of Tillamook Country Smoker until there was infringement." See Creamery's Response to Smoker's Concise Statement of Facts.
[6] Because Rule 36 applies to preclude Creamery's arguments, the court need not discuss Smoker's judicial-estoppel argument.
[7] Because the prior-registration doctrine is considered one in the nature of laches or acquiescence, the court concludes that Smoker's answer, which mentions laches and acquiescence, encompasses the prior-registration doctrine. The court reaches this conclusion in large part because there is no real prejudice to Creamery here, because, as discussed infra, the prior-registration issue in this case can be decided as a matter of law, without need for any further fact finding. Moreover, Creamery has had ample opportunity to discuss the legal issues implicated by that doctrine.
[8] Both marks were for identical goods, "processed meats and refrigerated and unrefrigerated as snack foods."
[9] The court notes that the issue is whether the two marks, as they were presented to the PTO, are substantially identical. Thus Creamery does not argue that the ribbon-design mark should be compared to the circle T design adopted in 1997. Even assuming it would be appropriate for the court to consider facts external to the registrations, such as the use of the circle T design, the court's conclusion would be unaltered. As the court held in its April 1 order, Smoker's use of "Tillamook" has not changed in any material way. Nor has Creamery ever argued that any other feature of Smoker's circle T labeling, aside from the use of "Tillamook," gives rise to a likelihood of confusion. Indeed, regardless of the precise design of Smoker's some twenty-five different packages, Creamery's allegations of infringement consistently have been based only on the use of the word "Tillamook."
|
Qualls-C v. State
IN THE
TENTH COURT OF APPEALS
No. 10-96-226-CR
CHRISTOPHER QUALLS,
Appellant
v.
THE STATE OF TEXAS,
Appellee
From the 54th District Court
McLennan County, Texas
Trial Court # 95-816-C
O P I N I O N
Christopher Michael Qualls waived a jury and pled guilty to a charge of aggravated sexual
assault. Tex. Penal Code Ann. § 22.021 (Vernon 1994 & Supp. 1997). The court sentenced
him to forty years in the TDCJ-ID, but gave him permission to appeal. His points of error assert
that the evidence is legally or factually insufficient to support venue or, alternatively, legally
insufficient to support the conviction in its entirety.
Citing article 1.15 of the Code of Criminal Procedure, which provides that a person shall
not be convicted on a plea without sufficient evidence to support that plea, Qualls points out that
the record contains no statement from the victim. Tex. Code Crim. Proc. Ann. art. 1.15
(Vernon Supp. 1997). Thus, he contends, the hearsay statements by the victim’s mother and the
investigating officers are insufficient. He also asserts that all of the “evidence” is contained in the
“plea papers,” which cannot sustain the conviction.
The State points to Exhibits One, Two, and Three, which were admitted at the plea hearing
without an objection by Qualls. These exhibits, it says, contain evidence sufficient to withstand
both the legal and factual sufficiency attacks.
First, we note that Qualls cites Thornton v. State, 601 S.W.2d 340, 342 (Tex. Crim. App.
[Panel Op.] 1980), to support his claim that the exhibits in this case, being part of the plea papers,
cannot sustain the conviction. Thornton, appealing from a revocation of probation, attacked the
sufficiency of the evidence to support his original plea of guilty. The only evidence admitted at
the original plea hearing was Thornton’s judicial confession. Recognizing the right to collaterally
attack the sufficiency of the evidence in that situation, a panel of the Court observed:
[I]t appears that appellant was indicted for forgery by passing a writing, and he confessed
to forgery by making a writing. These are two separate offenses.
Id. On rehearing, the Court, en banc, noted that the decision of the panel as to the lack of
evidence of forgery by passing had not been challenged by the state. Id. at 344. Here, the plea
is supported by Qualls’ confession and by unobjected-to exhibits. Thus, because it arose in a
different context and involves different facts and legal theories, we find Thornton not on point.
Next, we ask whether unobjected-to hearsay can support a conviction. Our answer is that
it can, for two reasons. First, Rule 802 specifically endorses it:
Hearsay is not admissible except as provided by statute or these rules. Inadmissible
hearsay admitted without objection shall not be denied probative value merely because it
is hearsay.
Tex. R. Crim. Evid. 802. Second, the Court of Criminal Appeals has consistently held that
hearsay is not denied probative value in a sufficiency review, even when admitted over objection.
Fernandez v. State, 805 S.W.2d 451, 455-56 (Tex. Crim. App. 1991) (hearsay could be
considered by the trier of fact as probative evidence, to be assessed and weighed along with, and
equal to, the other evidence admitted at trial); Chambers v. State, 711 S.W.2d 240, 247 (Tex.
Crim. App. 1986) (treat inadmissible hearsay admitted without objection the same as all other
evidence in the sufficiency context, i.e., it is capable of sustaining a verdict).
Turning to the record, we find Exhibit One includes a case report of Officer DePriest of
the Mart Police Department.
The report, almost all hearsay, shows that the offense occurred at
808 East Navarro Street in Mart. After receiving a complaint about the offense from the victim’s
mother, the officer spoke with an assistant district attorney of McLennan County. The report
states that the victim lived in Mart on July 3, 1995, the date of the complaint that led to the
indictment. He had lived there with his mother and step-father, Qualls, since June 1, 1995. The
victim told a group consisting of his mother, the Mart Chief of Police, and a Child Protective
Services caseworker that just before June 18, 1995 (when he left Mart to visit his real father), as
he was getting ready for bed, Qualls came to his bedroom and sexually assaulted him. He said
that similar conduct had continued over a period of more than two years.
Exhibit One also contains an instrument entitled “Desire to Prosecute,” headed “State of
Texas, County of McLennan, City of Mart.” in which the victim’s mother states that the offense
“did occur in the City of Mart, McLennan County, Texas.”
Evidence will sustain a conviction if, viewing it in the light most favorable to the verdict,
any rational trier of fact could have found the essential elements of the crime beyond a reasonable
doubt. Matson v. State, 819 S.W.2d 839, 843 (Tex. Crim. App. 1991) (following standard of
Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S.Ct. 2781, 2788-89, 61 L.Ed.2d 560 (1979)).
In conducting a factual sufficiency review under Clewis, we consider all the evidence and
set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be
clearly wrong and unjust. Clewis v. State, 922 S.W.2d 126, 129 (Tex. Crim. App. 1996).
In criminal cases the State may prove venue by a preponderance of evidence, either direct
or circumstantial. Holdridge v. State, 707 S.W.2d 18, 22 n.4 (Tex. Crim. App. 1986) Evidence
as to venue is sufficient if the factfinder may reasonably conclude from it that the offense was
committed in the county alleged. Id. We find the evidence in this record legally and factually
sufficient to support a determination that the offense alleged in the indictment occurred in
McLennan County, Texas. Id.; Clewis, 922 S.W.2d at 129; Matson, 819 S.W.2d at 843. This
is particularly true in light of the mandate that we presume that venue was proven in the court
below. Tex. R. App. P. 80(d). We overrule point one.
The evidence we have recited is also legally sufficient to support Qualls’ conviction. Even
though the critical evidence is all hearsay, it is sufficient to allow a rational trier of fact to find
beyond a reasonable doubt that the allegations of the indictment are true. Matson, 819 S.W.2d
at 843; Fernandez, 805 S.W.2d at 455. We overrule point two.
We affirm the judgment.
BILL VANCE
Justice
Before Chief Justice Davis,
Justice Cummings, and
Justice Vance
Affirmed
Opinion delivered and filed May 21, 1997
Do not publish
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513 F.2d 227
UNITED STATES of America, Plaintiff-Appellee,v.Robert WILKINSON et al., Defendants-Appellants.
Nos. 74-1550, 74-1554 and 74-1555.
United States Court of Appeals,Seventh Circuit.
Argued Dec. 9, 1974.Decided March 31, 1975.Rehearing Denied April 17, 1975.
Jerome Feldman, Chicago, Ill., for appellant.
James R. Thompson, U. S. Atty., Gary L. Starkman, Michael G. Berland, Asst. U. S. Attys., Chicago, Ill., for appellee.
Before HASTINGS, Senior Circuit Judge, SWYGERT and STEVENS, Circuit Judges.
HASTINGS, Senior Circuit Judge.
1
Defendants-appellants Robert Wilkinson, Harold W. Bean and Robert A. Byron were charged in a one-count indictment with possession of stolen goods in violation of Title 18, U.S.C. § 659.1 After a trial by jury in the Northern District of Illinois,2 each of the three named defendants was convicted on the single count as charged.3 Judge McGarr imposed sentences of five years incarceration for Bean, three years for Byron and two years for Wilkinson. All sentences were made consecutive to unrelated sentences which defendants were then serving. Defendants have appealed their respective judgments of conviction and sentence.
2
The issues presented for review on this appeal are:
3
I. Whether the affidavit in support of the search warrant provided the magistrate with sufficient information to justify his finding of probable cause.
4
II. Whether the defendants were entitled to examine the grand jury minutes concerning their indictment to determine whether the indictment was based solely on hearsay, or, in the alternative, to have the trial court examine said minutes in camera.
5
III. Whether the trial court erred in admitting a statement of a defendant, made during the course of the offense, to prove motive for participation in the crime.
6
IV. Whether a joint venture instruction may be given where no conspiracy is charged.
7
V. Whether the sentences imposed within the statutory limits constituted cruel and unusual punishment where lesser sentences were given to other defendants in unrelated cases.
THE UNDERLYING EVENTS
8
A concise statement of the relevant facts, though not materially disputed, considered in the light most favorable to the government, seems necessary upon which to predicate a resolution of the issues at hand.
9
As disclosed in an affidavit provided to the magistrate as the basis for the issuance of a search warrant, more specifically hereinafter referred to, an REA Express trailer, number REXZ206205, was stolen on March 10, 1973, from REA's Oshkosh, Wisconsin, terminal. At that time the trailer was loaded with cartons bearing REA labels with the word "Wisconsin" on some of the labels. The cartons contained, among other things, the merchandise listed in the grand jury indictment hereinabove set out. The trailer, with only a few items remaining in it, was recovered in Roseland, Illinois, on March 11, 1973, one day after the theft. The stolen cartons were observed on the premises at 2847 South Kedzie, Chicago, Illinois, on March 12, 1973.
10
The evidence set out by the government in its brief, with transcript citations, clearly established beyond a reasonable doubt the following events:
11
Kenneth Formanek was self-employed with Kedzie Auto Body located at 2847 South Kedzie Avenue in Chicago. About noon on the first Monday in March 1973, defendants Bean and Wilkinson and one Falco entered the garage and all four men went to a tavern next door known as "Cavanaughs." Bean asked Formanek if he would be interested in making any money, and after receiving an affirmative reply told Formanek he would get back to him at a later date.
12
Bean next met with Formanek on the following Wednesday in the yard adjacent to the garage and asked Formanek if he could use his garage for a drop and how much it would cost. Formanek told Bean he would charge $1,000 and a percentage of the load. On the following Friday Bean and Wilkinson returned to Formanek's garage in the early evening. Bean told Formanek they might have a load that night and for him to be in the garage. Bean told Formanek he would let him know.
13
Formanek then told Zenon Szymanski, one of his employees, that a "hot" trailer would be dropped at the garage and that he was to be paid $1,000 and a percentage of the load. Formanek asked Szymanski if he would be interested in taking part for a split of the money. Later that night Bean called Formanek and said the deal was off for that night and he would get back to him the next day. On the following day, Saturday (March 10, 1973), about 7:00 p. m., Bean again telephoned Formanek and told him the load was on its way and would arrive in about three hours.
14
At about 5:00-6:00 a. m. Sunday (March 11, 1973), Wilkinson arrived with a truck. Formanek told him to back the truck up to the garage and pulled another truck in front of it to block the view from the street of the truck driven by Wilkinson. Formanek, Wilkinson and Szymanski then began to unload the trailer. They were joined in the unloading by Bean and Byron when they arrived at the garage.
15
Wilkinson, Byron, Bean, Formanek, Szymanski and another unidentified individual unloaded the trailer over a period of approximately two to three hours. The unloaded closed cartons were labeled, marked and contained merchandise generally as hereinabove described. The men all wore gloves while the trailer was being unloaded. Bean said they should get rid of the unloaded trailer. Wilkinson drove the trailer away followed by the unidentified individual who picked him up after the drop. Bean and Byron proceeded to look through some of the cartons that had been unloaded. Bean told Formanek there was supposed to be a shipment of liquid gold on the trailer.
16
The next day (Monday, March 12, 1973), about 10:30 a. m., Formanek and Falco went to Bean's apartment where Formanek asked Bean when he was going to get the stolen merchandise out of the garage and was told that Wilkinson was checking out a buyer. Formanek returned to Bean's apartment later that evening and met with Bean and Wilkinson. Formanek told Bean he believed the police were watching the garage. They agreed to meet at a restaurant the next day.
17
Formanek and Szymanski met Bean at the restaurant as agreed. Bean told Formanek he had gone to the garage and that a Chevrolet had pulled up behind him and it looked like the police. Bean asked Formanek what he was going to do. Formanek replied that he was going to leave town. He did so and went to Las Vegas, Nevada, where he was subsequently arrested.
18
Agent Terry Keiser of the Federal Bureau of Investigation, acting pursuant to a search warrant, entered the garage at 2847 South Kedzie on March 13, 1973. The garage was almost completely filled with cartons bearing REA shipping labels. Keiser and other agents loaded the cartons found in the garage into a trailer. The merchandise was later inventoried and all except that retained for use as evidence at trial was sent on to the consignees.
19
We have not attempted to discuss all of the activities of FBI Agents Ward, Hayes and Ahels, or of the employees of the REA Express Company and representatives of the respective merchandise suppliers. As above stated, Formanek and Szymanski were the principal government witnesses. Defendants Bean, Byron and Wilkinson testified and each denied any participation in the theft of the REA truck and further denied having possession of any of the items discovered in Formanek's garage.
THE SEARCH WARRANT
20
Defendants filed a "Motion to Quash Search Warrant and to Suppress Evidence Illegally Seized." They contend the search warrant was issued in violation of their Fourth Amendment rights in that the affidavit in support of the warrant was insufficient to establish probable cause for its issuance. The trial court held that there was probable cause. We agree.
21
Defendants contend the affidavit fails to come within the standards set out in Aguilar v. Texas, 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964); Spinelli v. United States, 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637 (1969); and United States v. Harris, 403 U.S. 573, 91 S.Ct. 2075, 29 L.Ed.2d 723 (1971).
22
A careful reading of the search warrant and the supporting affidavit of FBI Agent Frederick V. Ahels belies the adverse contentions of defendants. Affiant was advised by the REA Express Terminal Manager at Oshkosh, Wisconsin, as to information describing the REA trailer and its contents on the day it was stolen, and by an REA special agent of the recovery of the same trailer in Roseland, Illinois, the next day with all but a few small items of its contents missing. These informants had personal knowledge of the information given to affiant and were employees of REA.
23
Affiant was advised by another FBI Agent, John J. Oitzinger, that on March 12, 1973, Oitzinger received information from a confidential informant who had furnished reliable information in the past resulting in at least ten arrests and convictions and the recovery of over $50,000 worth of merchandise. Further, that this confidential informant saw various items of merchandise stored at the garage in question, with cartons, shipping labels and items of merchandise meeting the description given by others.
24
Affiant's own investigation determined the specific location of the auto repair shop in question. Affiant was advised by the REA Terminal Manager that the property stolen was valued at approximately $15,000. Affiant was further advised by FBI Agent Ward of the complete description of the premises located at 2847 South Kedzie, Chicago, based on Ward's personal knowledge and investigation.
25
The details in the supporting affidavit resulted in the issuance of the search warrant which appears to be a model of clarity and detailed specificity.
26
The decided cases are replete with recognition of the "two-pronged test of Aguilar," supra. Judge Swygert, writing for our court, succinctly stated it in United States v. Hood, 7 Cir., 422 F.2d 737, 739, cert. denied, 400 U.S. 820, 91 S.Ct. 38, 27 L.Ed.2d 48 (1970): "In Aguilar v. Texas, 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964), the Supreme Court set forth explicit standards by which to test the reliability of informant hearsay used to establish probable cause. The magistrate to whom the application for a search warrant is presented 'must be informed of some of the underlying circumstances from which the informant concluded' that contraband was present on the premises and 'some of the underlying circumstances from which the officer concluded that the informant * * * was "credible" or his information "reliable ",' 378 U.S. 108, 114, 84 S.Ct. 1509, 1514 . . . ."4
27
Our court recently had occasion on a rehearing en banc to deal with the question of the sufficiency of an affidavit in support of an arrest warrant to show probable cause for arrest. In a scholarly review of applicable law and the teaching of the two-pronged test in Aguilar, the court found support for the use of hearsay conveyed by a confidential informant which appears consistent with the holding in the case at bar. United States v. Carmichael, 7 Cir., 489 F.2d 983, 986-987 (1973). See also the en banc review in United States v. Wilson, 7 Cir., 479 F.2d 936 (1973).
28
In light of the foregoing and a common sense reading of the supporting affidavit as a whole, we have no difficulty in finding that both prongs of the test in Aguilar were satisfied. We hold that the affidavit in support of the search warrant provided the magistrate with sufficient information to justify his finding of probable cause. The trial court did not err in denying the motion to quash the search warrant and to suppress the evidence seized.
THE GRAND JURY MINUTES
29
Defendants sought access to the grand jury minutes on three occasions in order to determine whether the grand jury might have based its indictment on hearsay or, in the alternative, for an in camera inspection by the trial court for the same purpose. None of the witnesses before the grand jury testified at the trial so that the Jencks Act did not require any disclosure.
30
Defendants rely on the rule set forth in United States v. Estepa, 2 Cir., 471 F.2d 1132 (1972), as authority for such disclosure. The trial court denied such motions for inspection and this is asserted as error. Estepa held in substance that an indictment based on hearsay should be dismissed (1) where there was a high probability that with eyewitness testimony there would have been no indictment, or (2) if the grand jury was misled to believe it was receiving eyewitness testimony. Id. at 1137.5
31
In United States v. Annerino, 7 Cir., 495 F.2d 1159, 1162 (1974), we considered and distinguised Estepa on the ground that the facts in Annerino did not demonstrate either of the two circumstances which Estepa held would justify dismissal. Similarly, in the case at bar, there are no allegations that either of these two circumstances were present.
32
In Annerino, we held, inter alia, that indictments based on hearsay of the type used there, and similar in purport to that in the instant case, were not improper. Id. at 1161-1162. That this has become embedded into the law of our circuit is evidenced by prior holdings in United States v. Holmes, 7 Cir., 452 F.2d 249, 274 (1971), cert. denied, 405 U.S. 1016, 92 S.Ct. 1291, 31 L.Ed.2d 479 (1972); United States v. Aloisio, 7 Cir., 440 F.2d 705, 707, cert. denied, 404 U.S. 824, 92 S.Ct. 49, 30 L.Ed.2d 51 (1971); United States v. Daddano, 7 Cir., 432 F.2d 1119, 1125 (1970), cert. denied, 402 U.S. 905, 91 S.Ct. 1366, 28 L.Ed.2d 645 (1971); and United States v. Braico, 7 Cir., 422 F.2d 543, 545, cert. denied, 398 U.S. 912, 90 S.Ct. 1712, 26 L.Ed.2d 74 (1970). If more need be said, our cases have pointed out that in Costello v. United States, 350 U.S. 359, 76 S.Ct. 406, 100 L.Ed. 397 (1956), "the Supreme Court categorically refused to invalidate an indictment based upon hearsay evidence under either the Fifth Amendment or its supervisory powers over federal courts." Aloisio, supra, 440 F.2d at 707.
33
In light of these authorities, we hold that defendants were neither entitled to examine the grand jury minutes for the purpose stated, nor, in the alternative, to have the trial court examine the minutes in camera. To hold otherwise here would be an unwarranted invasion of the secrecy of grand jury deliberations. No authority has been cited even remotely suggesting any reason for requiring the trial court to engage in such a fishing expedition. There was no error in the trial court's denial of this procedure.
ADMISSION OF STATEMENT IN EVIDENCE
34
As above set out, Formanek testified that immediately after the stolen merchandise was unloaded from the REA trailer and in the presence of defendant Byron, Bean said there was supposed to be a shipment of "liquid gold" on the trailer.
35
On brief, defendants assert that at a pretrial conference the trial judge instructed government counsel not to introduce any evidence that the trailer had originally contained a shipment of liquid gold. We have examined the record and there is no support for this assertion. What the record does show is that, prior to Formanek's testimony, the judge was informed of this statement of Bean to Formanek and the circumstances surrounding the statement. The court concluded that "if the witness so testifies, I will allow that testimony over objection."
36
In any event, such testimony was relevant to establish defendants' motive and intent and was not likely to be prejudicial. We find no error in the admission of this statement in evidence. Even if it could be said to be error, it was certainly harmless.
JOINT VENTURE INSTRUCTION
37
Defendants claim that the government's tendered Instruction No. 31 on joint venture given by the court to the jury was error "in the absence of so charging them in the indictment." They rely upon the holding in Stirone v. United States, 361 U.S. 212, 80 S.Ct. 270, 4 L.Ed.2d 252 (1960), to the effect that a defendant may not be tried on charges not made in the indictment against him. We have examined this instruction and find it to be a form instruction, E. Devitt & C. Blackmar, Federal Jury Practice and Instructions § 71.14 (2d ed. 1970). It is a correct and quite proper instruction.
38
Defendants' contention is misplaced. In a well-considered opinion authored by the late District Judge Mercer, United States v. Bernard, 7 Cir., 287 F.2d 715, 719-721, cert. denied, 366 U.S. 961, 81 S.Ct. 1921, 6 L.Ed.2d 1253 (1961), our court held that a joint venture instruction merely raises a question concerning the admissibility of evidence; a theory of proof rather than an offense. Where two or more persons are engaged in a joint enterprise or preconcerted action in the commission of a crime, the evidence is admissible upon a theory of the vicarious responsibility of all joint venturers for all acts done and declarations made by each in furtherance of the joint undertaking. It is not upon any theory of amendment of the substantive charge in the indictment. The question whether a common plan or design was proved beyond a reasonable doubt was properly submitted to the jury.6 In Bernard, supra, we found no analogy between the ruling there and the case of Stirone v. United States, supra.
39
We find no error in the giving of this joint venture instruction.
SENTENCING
40
The transcript of the evidence of defendants on direct examination shows that prior to the trial of this case defendant Bean had been convicted of robbery, attempted burglary, deceptive practices, interstate transportation of forged securities and extortion, over a period of several years.
41
Defendant Byron was convicted of theft of interstate shipment and is now serving a term of five years in the Federal Penitentiary at Sandstone, Minnesota.
42
Defendant Wilkinson was convicted of attempted burglary in 1967 with Bean and is now serving time in an Illinois state penal institution. He also was given two years probation upon his plea of guilty to another charge.
43
Defendants contend that "in view of the existent and contemplated pardons of a variety of individuals in the so-called Watergate crimes, appellants' incarcerations and the length of their sentences constitute cruel and unusual punishment and violate their rights under the Fourteenth Amendment to the United States Constitution."
44
The relief which defendants request of this court on appeal is strange indeed and reads, "should this Court disagree with Appellants and deny them a reversal, Appellants would respectfully seek from this Court in harmony with prevailing conditions in the federal criminal justice system as described by them in their argument, relief in the nature of either a pardon or similar remedy within the power of this Court to grant, or, at the very least, a reduction of their respective sentences and an Order that such reduced sentences coincide with and be served concurrently with those already imposed in other matters."
45
Defendants were represented at trial and on this appeal by the same privately retained counsel. It should be evident that this court does not possess the power of pardon or the power to change the term or manner of service of sentence.
46
Here we need only state the general rule that "a sentence imposed by a federal district judge, if within statutory limits, is generally not subject to review." United States v. Tucker, 404 U.S. 443, 447, 92 S.Ct. 589, 591, 30 L.Ed.2d 592 (1972). Further, that a trial court's sentence within the statutory limit "will not be disturbed on appeal except on a plain showing of gross abuse." United States v. Willard, 7 Cir., 445 F.2d 814, 816 (1971). A host of other cases to the same effect from this circuit need not be cited.
47
Defendants' assertions to the contrary, it is frivolous to suggest that gross abuse of discretion by the trial court can be shown by comparing the sentences here to the treatment of those associated with Watergate.
48
Consistent with this over-extended opinion, the judgments of conviction and sentences of defendants Wilkinson, Bean and Byron are affirmed.
49
Affirmed.
1
The indictment charged in substance that on or about March 11, 12, and 13, 1973, at Chicago, Illinois, defendants "unlawfully, wilfully and knowingly did have in their possession certain goods and chattels with a value in excess of one hundred dollars ($100.00) that is, certain toilet seats, plastic wrap, toys, electronic parts, tools, stereo equipment, and air compressors . . ." It was further charged in substance that the goods had been unlawfully removed from a stolen REA Express trailer number REXZ206205; that the goods were moving as a part of an interstate shipment from various named shippers to various named consignees in 14 named states; and that defendants had the goods in their possession and knew them to be stolen
2
Honorable Frank J. McGarr, District Judge, presiding
3
The principal government witnesses, Kenneth Formanek and Zenon Szymanski, were charged in a separate indictment for their participation in the events underlying the instant case. Upon their pleas of guilty, Formanek was sentenced to three years incarceration and Szymanski received probation
4
United States v. Harris, 403 U.S. 573, 91 S.Ct. 2075, 29 L.Ed.2d 723 (1971), appears to lessen the strictures of Spinelli v. United States, 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637 (1969). See United States v. Unger, 7 Cir., 469 F.2d 1283, 1286 (1972), cert. denied, 411 U.S. 920, 93 S.Ct. 1546, 36 L.Ed.2d 313 (1973)
5
Access to grand jury minutes was not an issue in Estepa
6
Cf. Trigg v. United States, 7 Cir., 430 F.2d 372, 376, cert. denied, 400 U.S. 966, 91 S.Ct. 379, 27 L.Ed.2d 387 (1970); United States v. Lawler, 7 Cir., 413 F.2d 622, 627-628 (1969), cert. denied, 396 U.S. 1046, 90 S.Ct. 698, 24 L.Ed.2d 691 (1970)
|
986 So.2d 610 (2008)
STEPHENS
v.
STATE.
No. 2D07-2576.
District Court of Appeal of Florida, Second District.
July 9, 2008.
Decision without published opinion. Affirmed.
|
532 F.Supp. 1017 (1982)
Marina TOMAN, PPA., and Kurt Toman, Plaintiffs,
v.
UNDERWRITERS LABORATORIES, INC., Defendant and Third Party Plaintiff,
v.
MORRIS STRUHL, INC., Superior Electric Products, Inc., Kurt Toman and Ludmila Toman, Third-Party Defendants and Fourth-Party Plaintiffs,
v.
Marina TOMAN and Kurt Toman, Fourth-Party Defendants.
Civ. A. No. 78-1915-MC.
United States District Court, D. Massachusetts.
March 2, 1982.
*1018 Edward M. Swartz, Swartz & Swartz, Boston, Mass., for plaintiffs.
Peter D. Cole, Badger, Sullivan, Kelley & Cole, P. C., Boston, Mass., for Struhl.
Harvey Weiner, Peabody & Arnold, Boston, Mass., Francis J. Higgins, John J. Verscaj, Chicago, Ill., for defendant and third party plaintiff.
Peter L. Puciloski, Sugarman, Rogers, Barshak & Cohen, Boston, Mass., for Superior Elec. Products, Inc.
MEMORANDUM AND ORDER
McNAUGHT, District Judge.
In this action Marina Toman seeks to recover for injuries which she suffered on April 27, 1972, when a "Chic" hairdryer ignited her bedding and clothing. The hairdryer was manufactured by Superior Electric Products, Inc. (Superior), distributed by Morris Struhl, Inc. (Struhl) and allegedly tested and certified by Underwriters Laboratories, Inc. (UL).
The plaintiff sued Superior and Struhl for damages in the United States District Court. On May 23, 1978, during trial before Judge Skinner, those suits were settled by payment of $900,000 to Toman by Struhl and Superior. Toman gave a release to those two parties which discharged their liability to the plaintiff and which agreed to indemnify them against loss from any and all further claims "made or brought ... by the said Marina Toman or anyone on her behalf ...".
Plaintiff then brought this action against UL alleging negligence in the inspection, testing, and certification of the hairdryer in question. Plaintiff further alleges that UL negligently performed professional services and promulgated inadequate standards in connection with its testing of hairdryers.
UL brought a third-party complaint seeking indemnification from Struhl and Superior for any judgment which might be returned against UL. UL also brought a third-party complaint against Ludmila Toman, mother of Marina Toman, seeking indemnification from her alleging that the injuries suffered by Marina Toman were the result of her mother's carelessness or negligence.
Superior then brought a fourth-party complaint against Kurt and Marina Toman seeking indemnification based on the release given to Superior by the Tomans.
Hearing was held on (1) UL's motion for summary judgment, (2) Struhl's motion to dismiss, and (3) Superior's motion for summary judgment on Counts I and III of the third-party complaint.
UL's Motion for Summary Judgment
UL contends that the hairdryer which allegedly caused the plaintiff's injuries was not manufactured in accordance with UL requirements and was not eligible for nor did it have a UL listing. Plaintiffs, says UL, tried the first case before Judge Skinner on the theory that the hairdryer was not UL approved. They are now taking an inconsistent factual position, according to UL, in attempting to show that the hairdryer was approved by UL. In support of its contention, UL points to testimony of plaintiffs' expert witness at the first trial and to assertions of plaintiffs' counsel at that time to the effect that the hairdryer did not pass UL tests and did not have a UL label affixed to it.
*1019 UL seeks to invoke the doctrine of "judicial estoppel" which prohibits a party to litigation from assuming a position, usually as to facts, inconsistent with that taken in prior litigation. 1B J. Moore, Moore's Federal Practice, ¶ 0.405[8] (2d ed. 1980).
That rule has had varied application. See id. at 766-773. Absent the existence of a dispute between the same parties, or reliance or change of position by the party seeking to invoke judicial estoppel, the doctrine will not be applied. UL was not a party to the first suits. It has not given up anything to the plaintiffs, nor has it even argued that it relied upon the position taken by the plaintiffs in the previous suit. It does not appear that the plaintiffs are attempting to play "fast and loose" with this court, Scarano v. Central R. Co. of New Jersey, 203 F.2d 510, 513 (3rd Cir. 1953). I accept the representation of counsel for the plaintiffs that his earlier position was a sincere attempt to force the defendants in that case to prove the position they had taken in defense.
For those reasons, UL's motion for summary judgment must be denied.
Struhl's Motion to Dismiss and Superior's Motion for Summary Judgment
In its third-party complaint against Struhl and Superior, UL seeks indemnification under both the common law (Count I) and the Listing Agreements between UL and those defendants (Count III).[1]
The complaint of the plaintiffs in this action seeks recovery against UL only for UL's actions; it does not seek to impose liability upon UL for acts of either Struhl or Superior. My reading of the complaint, in particular Paragraph 9, is that UL is liable because it "negligently developed, established and promulgated safety standards and specifications"; "negligently inspected, tested and examined the hairdryer involved"; "negligently endorsed, certified and approved said product and negligently permitted their label and seal to be used on said hairdryer ... when the defendant knew or reasonably should have known that said hairdryer was inherently hazardous and unsafe"; and "negligently failed to perform and provide professional services in compliance with applicable professional standards". It is clear to me that UL can be held liable only for its own negligence, not vicariously for that of Struhl or Superior. For that reason UL does not meet the general rule that a party is entitled to indemnification from another party for damages awarded against the first party in a negligence action only if that party is entirely free from negligence and defends solely and exclusively the act of the indemnitor. Ford v. Flaherty, 364 Mass. 382, 305 N.E.2d 112 (1970); Stewart v. Roy Bros. Inc., 358 Mass. 446, 265 N.E.2d 357 (1970). Here, UL is called upon to defend only its own actions and not those of either Struhl or Superior.
The "actual/constructive" negligence exception to the general rule is not applicable to this action. That exception gives a right of indemnity to a party who incurs tort liability as a result of the tortious acts of another. Application of the exception has been limited. See Stewart v. Roy Bros. Inc., 358 Mass. 446, 265 N.E.2d 357 (1970). Indemnity, however, "is permitted only when one does not join in the negligent act but is exposed to derivative or vicarious liability for the wrongful act of another". Id. at 459, 265 N.E.2d at 365. Whatever liability UL may incur would have to be based on UL's own acts or omissions, not those attributable to Struhl or Superior. UL, therefore, is not entitled to common law indemnity.
Citing provisions of the Listing Agreements between UL and Superior and Struhl, UL contends it is entitled to indemnification from the third-party defendants. I am not at all sure that the Listing Agreements cited by UL are applicable to the hairdryer in question. Assuming, however, without so deciding, that the provisions cited *1020 by UL are applicable, UL is still not entitled to indemnification. The agreement states, in relevant part, "The Subscriber agrees to hold the Laboratories harmless and to defend and indemnify the Laboratories against any loss, expense, liability, or damage, including reasonable attorney's fees, arising out of any misuse by the Subscriber of the Listing Mark of the Laboratories or arising out of any violation by the Subscriber of the terms and conditions of this Agreement". (Emphasis added.) Under the agreement, then, on these facts, UL is not entitled to indemnification. If UL is liable for anything it will be for its own negligence only, in causing its label to be affixed to the hairdryer. If UL did not test and approve the hairdryer, or if UL's requirements were not negligently promulgated, or if UL did not negligently test and approve the hairdryer, it cannot be liable under the plaintiffs' complaint even if Struhl or Superior did affix the UL label.
Accordingly, UL's motion for summary judgment is denied. Struhl's motion to dismiss the third-party complaint is allowed, and Superior's motion for summary judgment on Counts I and III of the third-party complaint is allowed.
NOTES
[1] Count II, seeking contribution from Struhl and Superior, was withdrawn by UL prior to the hearing on these motions.
|
Case: 11-11185 Document: 00512026344 Page: 1 Date Filed: 10/19/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 19, 2012
No. 11-11185
Summary Calendar Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
JOSE RAMIREZ-MEDINA,
Defendant-Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:11-CR-106-1
Before SMITH, DeMOSS, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
Jose Ramirez-Medina pleaded guilty to one count of illegal reentry
following deportation. The district court imposed a sentence of 36 months of
imprisonment and one year of supervised release. Ramirez-Medina argues that
his sentence is unreasonable because the district court imposed an above-
guidelines sentence based on its personal opinion that such a sentence was
warranted.
*
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: 11-11185 Document: 00512026344 Page: 2 Date Filed: 10/19/2012
No. 11-11185
The 36-month sentence challenged by Ramirez-Medina was the result of
an upward variance from the Guidelines. See United States v. Brantley, 537
F.3d 347, 349 (5th Cir. 2008). Following United States v. Booker, 543 U.S. 220
(2005), our review of sentences is for reasonableness in light of the sentencing
factors set forth in 18 U.S.C. § 3553(a). United States v. Mares, 402 F.3d 511,
518-19 (5th Cir. 2005). The Government contends that Ramirez-Medina did not
preserve the specific argument he now raises on appeal and that plain error
review thus applies. See United States v. Mondragon-Santiago, 564 F.3d 357,
361 (5th Cir. 2009). We need not decide the appropriate standard of review
because, as explained below, the sentence is reasonable under either plain error
review or the abuse-of-discretion standard. See United States v. Rodriguez, 523
F.3d 519, 525 (5th Cir. 2008).
The record indicates that the district court properly considered the
§ 3553(a) factors. The 36-month sentence reflected the seriousness of Ramirez-
Medina’s offense, the need to promote respect for the law, the need to provide
just punishment, and the need to protect the public from future crimes. The
sentence imposed “was reasonable under the totality of the relevant statutory
factors.” Brantley, 537 F.3d at 349 (internal quotation marks and citation
omitted). Accordingly, the judgment of the district court is AFFIRMED. See
Gall v. United States, 552 U.S. 38, 51 (2007).
2
|
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-09-00186-CV
First-Citizens Bank & Trust Company, Appellant
v.
American Constructors, Inc., Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. D-1-GN-08-002044, HONORABLE SCOTT OZMUN, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N
First-Citizens Bank ("FCB") appeals a final summary judgment on claims it had
asserted against American Constructors, Inc. ("ACI"). FCB had sued ACI to recover amounts that
ACI allegedly had paid to one of ACI's subcontractors after the subcontractor had purported to
assign its rights to those payments to FCB. The principal issue on appeal is whether FCB presented
summary-judgment evidence raising a fact issue as to whether FCB had given ACI notice of the
assignment as required by section 9.406 of the business and commerce code. See Tex. Bus. & Com.
Code Ann. § 9.406(a) (West 2002 & Supp. 2009). We will affirm the judgment.
BACKGROUND
ACI, an Austin-based construction company, was hired to build an elementary school
for the Austin Independent School District. ACI subcontracted with Complete Communications
Services, Inc. d/b/a Co Com Cabling Systems ("CoCom") for installation of cabling systems. In
2006, CoCom entered into an "Accounts Receivable Purchase and Security Agreement" with FCB.
This agreement contemplated that CoCom would sell and transfer accounts receivable to FCB in
exchange for FCB's advancing funds to CoCom. CoCom later purported to sell and assign to FCB
its accounts receivable from its work under its subcontract with ACI.
Section 9.406 of the business and commerce code provides:
(a) [A]n account debtor on an account, chattel paper, or a payment intangible may
discharge its obligation by paying the assignor until, but not after, the account debtor
receives a notification, authenticated by the assignor or the assignee, that the amount
due or to become due has been assigned and that payment is to be made to the
assignee. After receipt of the notification, the account debtor may discharge its
obligation by paying the assignee and may not discharge the obligation by paying the
assignor.
. . . .
(c) [I]f requested by the account debtor, an assignee shall seasonably furnish
reasonable proof that the assignment has been made. Unless the assignee complies,
the account debtor may discharge its obligation by paying the assignor, even if the
account debtor has received a notification under Subsection (a).
Tex. Bus. & Com. Code Ann. § 9.406(a). On or about August 13, 2007, ACI received a letter from
a law firm acting on FCB's behalf advising it that CoCom had assigned to FCB its rights to payment
from ACI. The letter advised ACI that any future payments ACI owed to CoCom should be directed
to FCB. ACI temporarily withheld funds otherwise due to CoCom while ACI sought to confirm the
validity of the assignment from CoCom to FCB. CoCom never provided that confirmation; instead,
it filed for bankruptcy on August 24, 2007.
In June 2008, FCB sued ACI alleging that ACI had actually received notice of
the assignment in March 2007, yet had continued to make payments directly to CoCom between
May 24, 2007 through July 16, 2007. FCB sought recovery of what it alleged was the amount
of those payments, as well as attorney's fees. ACI answered and alleged affirmative defenses that
included FCB's failure to give notice as required by section 9.406 until August 13, 2007. (1)
ACI subsequently filed a motion for summary judgment relying on both traditional
and no-evidence grounds. ACI asserted that FCB had no evidence that it had sent the required
authenticated notice of the assignment to ACI prior to August 13, 2007, no evidence that ACI
had received any such notice before that date, and no evidence to support any elements of its cause of
action that ACI wrongly paid CoCom monies to which FCB was entitled. ACI further asserted
that the evidence conclusively established that ACI had not received the required notice of
the assignment before August 13, 2007, and that the assignment was barred under CoCom's
subcontract with ACI.
In support of its summary-judgment motion, ACI presented evidence that no one
with the company had received any written or oral communication from FCB informing it about
the assignment until the August 13, 2007 letter. ACI's chief financial officer, Tom Mistler, testified
by affidavit that he had investigated and determined, after receiving FCB's August 13, 2007 letter,
that ACI had not received any previous written or oral notice of the assignment. He added that if
ACI had received notice of the assignment in March 2007, "it would have immediately started
withholding funds otherwise due to CoCom pending confirmation of the validity of the assignment,
just as it did when it actually received notice in August 2007."
Mistler also addressed allegations by FCB that it had sent ACI the required
written notice by certified mail in March 2007 and received a signed "green card" in return. FCB
had attached to its petition a copy of a green card bearing the article number 7006 2760 0002 1426
5501. In the green card's box for "Article Addressed to" is typed "American Constructors Inc." and
ACI's address, a suite in an office building located on Austin's MoPac Expressway. A box is also
checked indicating that whatever item the green card had accompanied was sent by certified mail.
The portion of the green card to be completed on delivery is signed "Amer Cont" as agent for
(handwritten) "Amer Const," with a handwritten date of delivery indicated as "3/26/07." Mistler
testified that no ACI employee had signed for a certified letter from FCB in March 2007 and that the
signature appearing on the aforementioned green card was not that of any ACI employee or agent.
ACI presented similar affidavit testimony from its receptionist, Pamela Danzy. Danzy
averred that she is responsible for receiving and opening all mail ACI receives and forwarding it
to the appropriate ACI personnel. She explained that when receiving certified mail for ACI, "I
sign my signature to the certified mail receipt (also known as the 'green card'), attach the envelope
to the letter, and forward it to the appropriate person." Danzy denied that ACI had received any
correspondence from FCB regarding CoCom's assignment before August 2007, that she ever
received or signed for such a certified letter, that she had ever seen the aforementioned green card
before the litigation, or that the green card had ever been received by ACI. She added that "[t]he
signature notation of 'Amer Const.' on the 'green card' is not my signature, nor is it signed in
accordance with the practice of American Constructors for receipt of certified mail."
Along with Mistler's and Danzy's testimony, ACI presented an affidavit provided
by the mail carrier who serves the office building where ACI's offices are located, Mike Botelo.
Botelo acknowledged that before the summer of 2007, "my standard delivery practice for delivering
certified mail to the businesses within ACI's office building" was to "sign myself all certified mail
receipts for the various businesses located in the building and then deliver the mail to the various
mailboxes." Botelo admitted that the aforementioned green card "bears my signature."
ACI also challenged whether FCB had evidence that it had sent the required
authenticated notice to ACI in March 2007 or that ACI had received it. ACI relied on deposition
testimony from Brenda Brown, FCB's portfolio manager for the working capital group. Brown
testified that FCB did not have a copy of any signed notice letter purportedly sent to ACI in
March 2007 and that FCB does not keep copies of such letters, which are generated by computer.
ACI also emphasized the deposition testimony of Becky Brower, an operations supervisor for FCB
who oversees two employees in handling the bank's factoring operations. Brower explained that her
department's responsibilities included sending notice letters to account debtors whose account
creditors had assigned their rights to payment to FCB. Brower explained that FCB kept files on
computer for each client and subfiles for each client's account debtors. According to Brower, each
day the computer system automatically generates notice letters for each "new" account debtor that
had been added that day, and she or her staff prepare envelopes for the letters and certified-mail
sender's receipts (the small white document) with corresponding certified-mail return receipts
(green cards) to go on the envelopes. Once the envelopes are mailed, Brower indicated, her
department retains the white sender's receipts in a file. After FCB receives the returned green card
from the postal service, Brower explained, it is matched with the corresponding white sender's
receipt and placed in the file, and the date of delivery indicated on the green card is entered into the
computer system.
Brower indicated that FCB's computer entries concerning ACI were consistent with
a notice letter having been generated and sent by certified mail in March 2007. She added that a
green card--the same as that attached to FCB's petition--had been returned and placed in the file
and that the article number corresponded to that of the white sender's receipt that had been retained
in the file. Brower also testified concerning a screen print-out from the United States Postal Service
website that purported to indicate, based on the article number, that a letter had been delivered in the
same Austin, Texas ZIP code where ACI is located on March 26, 2007. However, Brower made a
number of admissions concerning her inability and that of other FCB personnel to testify to any
additional facts regarding whether FCB had sent or ACI had received a notice letter in March 2007:
Brower had no personal knowledge that any notice letter, in any form, was actually sent by
anyone at FCB to ACI. She added that she had no memory of signing such a letter (2) or even
seeing one, or of typing an envelope or certified-mail receipt for such a letter, and that she
had "no idea" as to anyone who did. While she insisted that "I know it went," Brower
indicated that her belief was based on "the green card I got back."
FCB does not retain hard copies of the notice letters it generates and sends out.
There was nothing at FCB that could tie the certified-mail receipt number to a particular
letter. For example, the text of notice letters are a form and do not include the certified-mail
number.
Neither Brower nor anyone else at FCB knows whether a notice letter or the green card were
ever actually delivered to ACI, who signed the green card, whether this person was actually
an agent of ACI, and whether the date of delivery was correct. Brower added that the only
information on the green card for which FCB personnel would have knowledge was the
typewritten address and the indication that certified mail was the method of service. She
further admitted that while FCB retained green cards as part of its regular business practices,
the recording of the delivery information on the cards was not FCB's activity, but occurred
outside the bank and beyond its control or knowledge.
Brower knew of no one from FCB who had spoken with ACI prior to August 2007.
In response to ACI's summary-judgment motion, FCB presented a copy of Brower's
deposition (which, unlike ACI's copy, included as exhibits the green card and white sender's
receipt about which she testified), as well as an affidavit from Brower. With Brower's affidavit were
exhibits that included the green card, white sender's receipt, USPS website printout, screen prints
from FCB's computer system reflecting that a letter was mailed to ACI on March 21, 2007, and what
Brower claimed was a "reprint" of the notice letter that FCB had sent to ACI, also dated March 21,
2007. Brower purported to prove up these documents (including "the American Constructors, Inc.
green card"), verified that the letter had been sent to ACI, and correlated the certified-mail
documents to the "reprinted" letter.
FCB also objected to Botelo's affidavit on the basis that it violated federal regulations
that shield postal-service employees from "demands for testimony" in certain legal proceedings. See
39 C.F.R. § 265.12 (2009). With this, FCB attempted to present two letters from a USPS paralegal
to the effect that the postal service had not authorized Botelo to provide his affidavit nor
authorized its use.
FCB argued that Brower's deposition and affidavit raised a fact issue as to whether
FCB had sent ACI a notice letter and that her affidavit--or even the green card alone--raised a
fact issue as to whether ACI had received the letter. ACI objected to the two postal-service letters
as hearsay and to several portions of the Brower affidavit and attachments based on hearsay, lack of
personal knowledge, and contradiction with her prior deposition testimony.
Following a hearing, the district court overruled FCB's objection to the Botelo
affidavit, sustained ACI's objections to the two letters, and sustained some but not all of ACI's
objections to Brower's affidavit and attachments. The court specifically granted ACI's "Traditional
Motion for Summary Judgment," but denied additional relief. This appeal followed.
ANALYSIS
FCB brings four issues on appeal. In its first issue, FCB complains of the
district court's admission of the Botelo affidavit and its exclusion of the two letters. In FCB's
second issue, it complains of the district court's rulings excluding portions of Brower's affidavit
and attachments. In its fourth issue, FCB contends that regardless of our disposition of its first
two issues, the summary-judgment evidence presents a fact issue as to whether ACI received notice
of the assignment as required by section 9.406. In its third and remaining issue, FCB challenges
whether ACI was entitled to summary judgment on the ground that CoCom was barred by ACI's
subcontract from assigning its receivables to FCB.
We review the district court's summary judgment de novo. Valence Operating Co.
v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life & Accident Ins. Co. v. Knott,
128 S.W.3d 211, 215 (Tex. 2003). Summary judgment is proper when there are no disputed issues
of material fact and the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c);
Knott, 128 S.W.3d at 215-16. In determining whether there is a disputed material fact issue
precluding summary judgment, we take as true proof favorable to the nonmovant, and we indulge
every reasonable inference and resolve any doubt in favor of the nonmovant. Randall's Food Mkts.,
Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995).
As a movant seeking summary judgment against claims of a nonmovant based on
affirmative defenses, ACI had the initial burden of establishing its entitlement to judgment as a
matter of law by conclusively establishing each element of at least one of those affirmative defenses.
See M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000) (per curiam)
(citing Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222-23 (Tex. 1999); Oram v. General Am.
Oil Co., 513 S.W.2d 533, 534 (Tex. 1974) (per curiam)). Assuming ACI met this burden, the burden
shifted to FCB to file a timely written response presenting grounds for denying summary judgment.
See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). Grounds that
FCB did not expressly present to the trial court by written response cannot be considered as
grounds for reversal on appeal. Tex. R. Civ. P. 166a(c); Clear Creek Basin Auth., 589 S.W.2d
at 678. ACI's motion must stand on its own merits, however, and thus FCB is not precluded
from contending on appeal that the grounds presented in ACI's motion were legally insufficient
to entitle it to summary judgment. Rhône-Poulenc, 997 S.W.2d at 223 (citing Clear Creek Basin
Auth., 589 S.W.2d at 678). Additionally, ACI bears the burden on appeal of showing that there is
no genuine issue of material fact and that it is entitled to judgment as a matter of law. See id.
We review the district court's rulings concerning the admission or exclusion
of summary-judgment evidence for an abuse of discretion. See, e.g., Fairfield Fin. Group, Inc.
v. Synnott, 200 S.W.3d 316, 319 (Tex. App.--Austin 2009, no pet.) (admission of summary-judgment evidence); Cruikshank v. Consumer Direct Mortgage, Inc., 138 S.W.3d 497, 499
(Tex. App.--Houston [14th Dist.] 2004, pet. denied) (exclusion of summary-judgment evidence).
An abuse of discretion exists only when the court's decision is made without reference to any
guiding rules and principles or is arbitrary or unreasonable. Downer v. Aquamarine Operators, Inc.,
701 S.W.2d 238, 241-42 (Tex. 1985). We must uphold the district court's evidentiary ruling if
there is any legitimate basis for it. See Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d
35,43 (Tex. 1998). Moreover, we will not reverse a judgment based on a claimed error in admitting
or excluding evidence unless the complaining party shows that the error probably resulted in
an improper judgment. Tex. R. App. P. 44.1; Malone, 972 S.W.2d at 43; City of Brownsville
v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995). A successful challenge to a trial court's evidentiary
rulings requires the complaining party to demonstrate that the judgment turns on the particular
evidence excluded or admitted. Texas Dep't of Transp. v. Able, 35 S.W.3d 608, 617 (Tex. 2000).
We need not reach FCB's first issue urging that Botelo's affidavit must be excluded
under 39 C.F.R. § 265.12. (3) Even if the Botelo affidavit is excluded, as FCB urges, we conclude
that ACI met its initial summary-judgment burden to conclusively establish that it did not receive
the required notice of the assignment before August 2007. We have previously summarized ACI's
summary-judgment evidence. The testimony of Mistler and Danzy that ACI personnel did not
receive a notice letter or any certified letter from FCB and did not receive or sign the green card on
which FCB relies was clear, positive, direct, free of inconsistencies, and capable of being readily
controverted. See Tex. R. Civ. P. 166a(c). The burden thus shifted to FCB to present competent
summary-judgment evidence raising a fact issue on that point.
To raise a fact issue, FCB relies on Brower's affidavit and attachments. In its second
issue on appeal, FCB complains of the district court's "exclusion" of the Brower "business records
affidavit . . . includ[ing] copies of the Green Card, the Certified Mail sender's receipt of the
assignment letter sent to ACI, [and] a printout of a United States Postal Service internet page
confirming delivery of the assignment letter." FCB recites the requirements for proving up business
records, asserts generally that Brower's testimony met these standards, and concludes that the
district court's "exclusion" of the Brower affidavit "constitutes reversible error and abuse of
discretion because the Green Card clearly creates a genuine issue of material fact."
FCB's arguments do not correspond to the ruling the district court actually made. The
court did not exclude the entire Brower affidavit, only certain portions of it. The following
statements were excluded:
"A true and correct copy of the American Constructors, Inc. green card is
included in Exhibit 'D-1.'"
"This letter [referring to the purported 'reprint'] was mailed to American
Constructors, Inc. certified/return-receipt requested and the receipt is
maintained in the file, according to our policies and procedures. When the
green card is return[ed], it is placed into the same file. As shown in Exhibit
'D-1,' the tracking number from the receipt and the green card match up."
"The reprint of the letter to American Constructors, Inc. shows that it was
mailed on or about March 21, 2006 [sic]."
Moreover, the district court admitted all of the affidavit's attachments, including the green card,
white sender's receipt, and USPS website printout, except for the purported "reprint" of the notice
letter, which was excluded.
The evidence excluded by the district court was flatly inconsistent with Brower's
prior deposition testimony. During her deposition, Brower admitted that neither she nor anyone
at FCB had personal knowledge whether any form of notice letter had been sent to ACI, whether a
notice letter or green card had ever actually been delivered to ACI, who had signed the green card,
or when. In her affidavit, by contrast, Brower averred that she had personal knowledge that
a specific notice letter--the "reprint" dated March 21, 2007--had been sent by certified mail to ACI
and that the green card was "[a] true and correct copy of the American Constructors, Inc.
green card." To be competent summary-judgment evidence, affidavits must be made on personal
knowledge, see Tex. R. Civ. P. 166a(f), and Brower's deposition testimony demonstrates that she
did not have personal knowledge of these facts. While Brower recites in her affidavit that her
testimony "is based on my personal knowledge and experience," she provides no basis for any
sudden claim to personal knowledge. FCB has not shown that the district court abused its
discretion in excluding this evidence. See Eslon Thermoplastics v. Dynamic Sys., Inc., 49 S.W.3d
891, 901 (Tex. App.--Austin 2001, no pet.) (discussing "sham" affidavits); Farroux v. Denny's
Rests., Inc., 962 S.W.2d 108, 111 (Tex. App.--Houston [1st Dist.] 1997, no pet.) ("Without an
explanation of the change in testimony, we assume the sole purpose of the affidavit was to avoid
summary judgment."). We overrule FCB's second issue.
As for the evidence that was admitted--the green card, white sender's receipt,
USPS web page printout, FCB computer records printout, and other testimony by Brower--it
demonstrates only that a document was sent by FCB via certified mail to ACI's address in
March 2007, that a green card signed "Amer Cont" by an unidentified person purporting to act as
an agent of ACI and indicating receipt on March 26, 2007 was returned to FCB, and that the postal-service website indicates that a certified letter bearing the tracking number corresponding to the
green card and white sender's receipt was delivered on that date somewhere in the same area code
where ACI's offices are located. This evidence falls short of controverting ACI's evidence that
it never received a certified letter or other document from FCB in March 2007 and that the "Amer
Cont" signature on the green card was not that of any ACI employee or agent. See Smith v. Holmes,
53 S.W3d 815, 817-18 (Tex. App.--Austin 2001, no pet.).
In a final alternative argument on the question of receipt, FCB urges that Botelo's
affidavit, if admitted, raises a fact issue as to whether he delivered the certified letter with the
green card to ACI. Botelo, as noted, admitted that his "standard delivery practice for delivering
certified mail to the businesses within ACI's office building" was to "sign myself all certified mail
receipts for the various businesses located in the building" and that he had been the person
who signed the green card "Amer Const." FCB did not present any evidence that Botelo had been
authorized to sign for certified mail on ACI's behalf; consequently, the affidavit, if admitted, would
be additional proof negating ACI's receipt of notice. See City of Houston v. Riner, 896 S.W.2d
317, 319-20 (Tex. App.--Houston [1st Dist.] 1995, writ denied) (holding notice ineffective when
security guard signed and accepted mail on behalf of building occupant without occupant's
authority); United Nat'l Bank v. Travel Music of San Antonio, Inc., 737 S.W.2d 30, 31-32
(Tex. App.--San Antonio 1987, writ ref'd n.r.e.) (holding notice ineffective when signed for by
someone other than the intended addressee). FCB emphasizes, however, that Botelo testified he
would, after signing the green cards, "then deliver the mail to the various mailboxes." FCB reasons
that Botelo's statement presents a fact issue as to whether he correctly deposited the notice letter
in ACI's mailbox. Without more, we cannot agree. At most, Botelo's statement might support the
inference that he deposited the certified letter in one of the building's mailboxes, but it does not
controvert ACI's evidence that the letter never made it to ACI. See Smith, 53 S.W.3d at 818.
Because FCB failed to present competent summary-judgment evidence raising a
fact issue as to whether ACI received the required notice of the assignment prior to August 2007,
the district court properly granted summary judgment on ACI's affirmative defense that FCB failed
to comply with business and commerce code section 9.406. We overrule FCB's fourth issue. We
need not reach FCB's third issue challenging the alternative summary-judgment ground that any
assignment by CoCom was invalid.
CONCLUSION
We affirm the district court's judgment.
_________________________________________
Bob Pemberton, Justice
Before Justices Patterson, Puryear and Pemberton
Affirmed
Filed: May 21, 2010
1. ACI also counterclaimed and asserted third-party claims in interpleader with respect to a
balance of approximately $90,000 remaining on the CoCom subcontract. Those claims are not at
issue on appeal. However, complaining that FCB persisted in bringing this appeal prematurely while
the interpleader claims were still pending and the summary judgment was not yet final, ACI moved
to dismiss the appeal and for an award of attorney's fees and costs incurred in preparing and
prosecuting its motion as sanctions. The jurisdictional defect has since been cured. We overrule
ACI's motion.
2. In fact, Brower indicated that FCB used her stamped signature on such letters.
3. We hold that the district court did not abuse its discretion in excluding the two letters from
the USPS paralegal as hearsay. FCB insists that it "did not offer the Letters into evidence to prove
the truth of the matters contained therein; rather, FCB offered the Letters to show that both FCB
and ACI had notice of their receipt and is thus an exception to hearsay under Tex. R. Evid. § 801."
But on appeal, as well as in its summary-judgment response, FCB relies on the contents of the letters
to support its argument that the Botelo affidavit should be excluded because ACI purportedly
obtained it in violation of 39 C.F.R. § 265.12.
|
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 05-11224 AUGUST 2, 2006
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 04-20486-CR-KMM
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
BOBBIE LANE KENDLE,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(August 2, 2006)
Before DUBINA and KRAVITCH, Circuit Judges, and MILLS,* District Judge.
KRAVITCH, Circuit Judge:
*
Honorable Richard Mills, United States District Judge for the Central District of Illinois,
sitting by designation.
Bobbie Lane Kendle appeals his conviction and the sentence imposed after a
jury found him guilty of one count of possession with intent to distribute crack
cocaine. Specifically, he raises a Batson claim, questions the sufficiency of the
evidence, and challenges his sentence. After oral argument and a thorough review
of the record, we affirm.
I.
A federal grand jury indicted Kendle and his co-defendant, Tinhangie Hunt,1
for (1) knowingly and intentionally possessing with intent to distribute 50 grams or
more of crack cocaine, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(A), and 18
U.S.C. § 2 (Count 1); (2) knowingly and intentionally possessing with intent to
distribute cocaine, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(C), and 18
U.S.C. § 2 (Count 2); and (3) knowingly and intentionally possessing with intent to
distribute marijuana, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(D), and 18
U.S.C. § 2 (Count 3). Kendle pleaded not guilty to all three counts and a jury trial
followed. Prior to trial, the government filed a notice of sentence enhancement
under 21 U.S.C. § 851, stating that Kendle had two prior felony drug convictions.
A. Jury Selection
During jury selection, potential jurors Frederica McDuffie, an African-
1
Tinhangie Hunt was indicted on two additional counts in the indictment and pleaded
guilty prior to trial.
2
American woman, Steve Padilla, and Gail Lenoble stated in response to questions
from the court regarding scheduling that they may have problems with childcare
depending on when the court recessed for the day. Specifically, McDuffie stated
that she had to pick up her grandson at 5:45 p.m., and she did not think there would
be enough time to pick him up. When the court asked if she would have enough
time if court recessed by 5:00 p.m., McDuffie replied that, because she had to use
public transportation, it would be “pushing it.” Padilla, whose race was not
apparent from the record, stated that he had “to pick up [his] children from school
by 5:00.” Lenoble, a white woman, stated that she needed to pick up her children
by 6:00 p.m. and agreed with McDuffie that it would be “pushing it” to get there if
the court recessed by 5:00 p.m., but she then added: “But I guess, you know, for a
couple of days we would have to do it.” Additionally, a juror who did not give his
name, but is identified later in the record as Vaxton Payne, an African-American,
advised the court that he had a misdemeanor marijuana conviction.
The government moved to excuse McDuffie for cause based on the childcare
issues she raised during voir dire. Kendle did not object, and the court excused
her. The government also used peremptory challenges to remove Donovin Kemp
and Payne, both African-Americans, from the jury panel. Of its four remaining
peremptory strikes, the government struck Josh Young, Mayra Marimon, and
3
Carlos Irias, whose ethnicities were not apparent from the record.
After the government struck Kemp, Kendle objected on Batson 2 grounds,
requesting that the government provide a race-neutral reason for the strike and
arguing that “there is no reason for the government to want to strike this person
other than the fact that [he] is a black man.” The court overruled the objection,
explaining that Kendle had not met his prima facie burden and also noting that an
African-American juror already had been seated.
When the district court came to Padilla, the government noted that he had
childcare issues and said “I don’t know if your honor wants to excuse him for
cause, but otherwise he is fine with us.” Kendle did not object, and the court
dismissed Padilla for cause. Later, when the district court arrived at Lenoble, the
government pointed out that she had raised childcare issues. The court noted that
Lenoble said she would be fine if court recessed by 5:00 p.m., and the government
did not move to dismiss her for cause. Kendle then moved to dismiss her for
cause, arguing that the court already excused McDuffie, an African-American, for
the same reason. The court asked Lenoble if she would have enough time with a
5:00 p.m. recess, she answered affirmatively, and the court denied Kendle’s
motion.
2
Batson v. Kentucky, 476 U.S. 79 (1986).
4
Finally, Kendle objected after the government struck Payne, who would
have been seated as an alternate, requesting that the government provide a race-
neutral reason for striking him. The court overruled the objection. Ultimately, two
African-American jurors were seated.
B. Trial Testimony
At trial, the government called Detective Thomas Mead of the Homestead
Police Department, the lead investigator in Kendle’s arrest. Mead testified that on
March 24, 2004, he watched an individual later identified as James Butts take
currency from an unknown individual, walk to the house at 867 Southwest 6th
Street in which Kendle was living, and conduct a hand-to-hand transaction with
Kendle in which Butts was given an unknown object. After Butts left Kendle’s
home, Mead and another officer pursued and detained Butts, who was found to
have cocaine and marijuana on his person. Mead and his partner then went to
Kendle’s house, and as they approached, Kendle ran into the house from the front
yard and locked the door behind him. Mead said that he attempted to speak with
Kendle through the door, but Kendle did not respond.
Mead then testified that the police department began to surveil the house,
and numerous individuals were seen there buying drugs, for which those
individuals were subsequently arrested. Mead stated that he had a confidential
5
informant (“CI”) conduct a controlled buy at Kendle’s house on May 10. Mead
watched Kendle go into the house earlier that day, prior to the CI’s arrival. A
woman at the house, later identified as Tinhangie Hunt, sold crack cocaine to the
CI. A second controlled buy was conducted the next day, May 11, in the same
manner as the May 10 buy.
Mead next testified that a search warrant was obtained from a state court
judge, which was executed on May 17. Kendle, Hunt, and another woman were
found in the house. After reading Kendle his rights, which Kendle indicated that
he understood, Mead asked Kendle if he would tell him the location of the drugs or
if they needed to search for them. Kendle responded verbally that they did not
need to search and he motioned with his chin to several locations in the room,
including (1) a shelf with a bag of marijuana, a false-bottomed container with two
pieces of crack cocaine, and a brown paper bag with cocaine; (2) a shoe box
containing packages of marijuana; and (3) a cigar box containing marijuana. The
officers also found approximately $1,100 under a carpet and on a shelf. Mead then
arrested Kendle and Hunt, and as they left the house, Mead locked the door to the
house with keys that Kendle gave him. Mead also testified that a vehicle was
seized as a result of the search and that the vehicle title corresponding to the seized
vehicle contained Kendle’s signature and listed his address as that of the house in
6
question. He further stated that prescription bottles taken from the house bore
Kendle’s name.
Next, Mead testified that on July 22, 2004, he went with federal officers to
the residence to re-arrest Kendle and Hunt. As they arrived, Mead looked through
a window and saw a plate resting on the arm of a sofa holding what Mead
suspected was crack cocaine. Kendle refused to open the door for the officers, and
while they waited to gain entrance, Mead watched Kendle carry the plate into
another part of the house. Mead stated that Kendle and Hunt were arrested, and the
plate was recovered and tested positive for drug residue.
On cross-examination, Mead said that Hunt was seen at the house every day,
her documents were found there, and some unknown person paid the rent. Mead
acknowledged that the house was not rented to Kendle and that on April 6, police
surveilled the house and witnessed three suspected drug sales. Mead admitted that
Kendle was not seen making any transactions that day and that Hunt made both the
May 10 and May 11 sales.
The government also called Detective Robert Salinas of the Homestead
Police Department, who testified that he was involved in the investigation on the
day of Kendle’s first arrest. Salinas testified that the police entered a house that
Kendle was known to reside at and described the locations within the house where
7
the police found the drugs, drug containers, and paraphernalia. Salinas stated that a
phone bill obtained from the house was addressed to Kendle at 867 Southwest 6th
Street, which was the street address of the residence where Kendle was arrested
and the drugs were found. Salinas testified that a scale and plastic bag sealer were
also found at the house.
Finally, the government called Ethan Jolly, a forensic chemist with the Drug
Enforcement Administration, who testified regarding the drug weights and types
that the government introduced into evidence. On cross-examination, when asked
how confident he was that the drugs in question belonged to Kendle, Jolly replied
that he was only responsible for analyzing the evidence and that he was not aware
of with whom the exhibit was associated.
Kendle rested without calling witnesses and moved for judgment of acquittal
at the close of the evidence on the basis that the government had failed to present a
prima facie case, which the district court denied. Kendle also renewed his Batson
objection, arguing that a prima facie case was shown “by pointing out that those
jurors were members of cognizable classes.” The district court again found that
Kendle could not establish a prima facie case and gave a lengthy explanation of its
reasoning. First, Kendle did not proffer any evidence that could be used to infer
that the government’s strikes were racially motivated except for the potential
8
jurors’ race. Second, the court noted that there was sufficient difference between
the two women with childcare issues to warrant excusing McDuffie for cause while
not excusing Lenoble because Lenoble was not relying on public transportation
and had more time to reach her destination. Third, Payne admitted to having a
misdemeanor marijuana conviction, which supported the government’s decision to
strike him. Fourth, the prosecution did not do or say anything during voir dire that
would allow an inference of discriminatory intent because the court conducted voir
dire. Fifth, the district court noted that African-American jurors were seated
roughly in proportion to their number in the venire: African-Americans made up
approximately 14% of the venire – out of 34 potential jurors, 5 were African-
American – and the 2 African-Americans who were seated accounted for
approximately 16% of the 12-person jury. Finally, the prosecution did not use all
of its peremptory challenges. After the jury was charged, Kendle renewed the
motion for acquittal and the Batson objection, both of which the district court
overruled.
During jury deliberations, the jury informed the judge that they were having
problems coming to a consensus on Counts 1 and 3. The government attorney
proposed a settlement to Kendle, under which he would plead guilty to Count 3
and serve ten years, but stated that the plea agreement would have to be approved
9
by someone in his office. The jury continued to deliberate and returned a verdict
before the government approved the plea agreement. The jury found Kendle guilty
of Count 1 for possession with intent to distribute 5 grams or more of crack
cocaine, as opposed to 50 grams or more, and it found him not guilty of Counts 2
and 3.
C. Sentencing
The probation officer prepared a presentence investigation report (“PSI”),
which assigned Kendle a base offense level of 32, under U.S.S.G. § 2D1.1(c)(4)
for 293.43 grams of marijuana, 2.5 grams of powder cocaine, and 78.37 grams of
crack. The probation officer applied a § 4B1.1 career-offender enhancement
because Kendle was 18 years old when he committed at least two prior crimes of
violence or drug-related crimes, which raised the total offense level to 37 because
the instant offense’s statutory maximum was life. The probation officer found that
Kendle had criminal history points that warranted a criminal history category of V,
but also noted that as a career offender, his category should be VI, pursuant to
§ 4B1.1. The probation officer further noted that the minimum statutory term of
imprisonment was ten years, and the maximum was life, pursuant to 21 U.S.C.
§§ 841(b)(1)(B), 851. Based on the total offense level of 37 and criminal history
category of VI, the probation officer calculated the guideline range to be 360
10
months to life.
Kendle objected to the § 4B1.1 career offender enhancement and 21 U.S.C.
§ 851 enhancement, arguing that Blakely3 and Apprendi4 allowed the use of prior
convictions but precluded the use of these enhancements because they were not
charged in the indictment, and a jury did not find beyond a reasonable doubt that
(1) Kendle was 18 years old when the offenses were committed, (2) the instant
crime was a crime involving violence or a controlled substance, and (3) Kendle had
two previous convictions for such crimes. Kendle also noted that the U.S.
Supreme Court recently stated that Almendarez-Torres v. United States, 523 U.S.
224 (1998), was problematic in nature, even though this court continues to apply it.
The district court explained that Booker5 held that the guidelines range
should be considered even if it was only advisory and stated that “with or without
the guidelines,” the guidelines range of 360 months to life seemed appropriate in
his case. The court noted that the guidelines range correctly identified Kendle as a
career offender. The court then continued sentencing to allow the parties to brief
the issue of whether application of Booker to Kendle constituted an ex post facto or
due process violation.
3
Blakely v. Washington, 542 U.S. 296 (2004).
4
Apprendi v. New Jersey, 530 U.S. 466 (2000).
5
United States v. Booker, 543 U.S. 220 (2005).
11
Kendle argued that if a more lenient interpretation of the guidelines is in
effect at the time a crime is committed, the defendant is entitled to that application
in order to prevent ex post facto violations. Kendle contended that Blakely was the
interpretation in effect when he committed his crime, and because Blakely holds
that the maximum sentence a judge may impose must be based on facts found by
the jury or admitted by the defendant, it is more lenient than the Booker version.
Kendle asserted that this would give him an offense level of 26 for the 5 grams or
more of crack that the jury found he possessed, and a criminal history category of
V, based solely on his criminal history, which would result in a guidelines range of
110 to 137 months. Kendle maintained that if the court treated the guidelines as
advisory and then enhanced his sentence with judicially found facts, his due
process rights would be violated through the ex post facto application of Booker.
At the continued sentencing hearing, Kendle reiterated his prior arguments
and contended that he should be sentenced under the guidelines range that would
have resulted from the jury’s verdict alone.
The government replied that sentencing with a career-offender or 21 U.S.C.
§ 851 enhancement without presenting the question to a jury was not precluded by
Booker, Blakely, or Apprendi, and even if the only amount of drugs attributed to
Kendle by the jury was five grams of crack, the statutory maximum still would be
12
life based on his relevant conduct and prior convictions. The government asserted
that Kendle was on notice at all times as to the statutory maximum that he faced,
regardless of the sentencing scheme in place.
The district court found that there was no need to have a jury determination
on the question of prior convictions or career-offender status and rejected Kendle’s
ex post facto argument. The district court sentenced Kendle to 360-months
imprisonment and 8-years supervised release. Kendle then timely filed this appeal.
II.
A. Batson Challenge
First, Kendle contends that the district court erred in rejecting his Batson
challenge. This court reviews “the resolution of a Batson challenge giv[ing] great
deference to a district court’s finding as to the existence of a prima facie case. De
novo review is inappropriate.” United States v. Ochoa-Vasquez, 428 F.3d 1015,
1039 (11th Cir. 2005).6 As the district court’s determination of the reason for a
juror’s dismissal is a finding of fact, we will not overturn it “unless it is clearly
erroneous or appears to have been guided by improper principles of law.” Id.
6
Kendle’s argument that the Supreme Court’s decision in Johnson v. California, 545 U.S.
162, 125 S. Ct. 2410 (2005), altered the standard of review is misplaced. In Johnson, the Court
rejected California’s use of a “more likely than not” standard in conducting the prima facie
inquiry required by Batson. 125 S. Ct. at 2416. The Court did not address the standard of
review.
13
(internal quotation marks omitted).
The Supreme Court has held that “[p]urposeful racial discrimination in
selection of the venire violates a defendant’s right to equal protection.” Batson v.
Kentucky, 476 U.S. 79, 86 (1986). “Batson established the now-familiar three-part
inquiry for evaluating whether a peremptory strike was motivated by racial or
ethnic discrimination.” Ochoa-Vasquez, 428 F.3d at 1038. “First, the defendant
must make out a prima facie case ‘by showing that the totality of the relevant facts
gives rise to an inference of discriminatory purpose.’” Johnson v. California, 545
U.S. 162, 125 S. Ct. 2410, 2416 (2005) (quoting Batson, 476 U.S. at 93-94). This
is not a heavy burden; it requires only that the defendant “produc[e] evidence
sufficient to permit the trial judge to draw an inference that discrimination has
occurred.” Id. at 2417. “[T]he establishment of a prima facie case is an absolute
precondition to further inquiry into the motivation behind the challenged strike.”
Cent. Ala. Fair Hous. Ctr., Inc. v. Lowder Realty Co., 236 F.3d 629, 636 (11th Cir.
2000). “If the objector makes a prima facie showing, the burden then shifts at step
two to the striker to articulate a race-neutral explanation for the challenged strike.”
Ochoa-Vasquez, 428 F.3d at 1038. “Third, ‘[i]f a race-neutral explanation is
tendered, the trial court must then decide . . . whether the opponent of the strike has
proved purposeful racial discrimination.’” Johnson, 125 S. Ct. at 2416 (quoting
14
Purkett v. Elem, 514 U.S. 765, 767 (1995) (per curiam)). The ultimate burden of
persuasion, however, lies with the opponent of the strike. Ochoa-Vasquez, 428
F.3d at 1038-39.
As an initial matter, to the extent that Kendle is challenging the for-cause
dismissal of McDuffie, Kendle’s challenge fails because “no authority suggests
Batson extends to the area of challenges for cause.” United States v. Blackman, 66
F.3d 1572, 1575 n.3 (11th Cir. 1995); see also United States v. Elliott, 89 F.3d
1360, 1364-65 (8th Cir. 1996); United States v. Bergodere, 40 F.3d 512, 515-16
(1st Cir. 1994).
In analyzing Kendle’s challenge to the government’s peremptory strikes of
Kemp and Payne, we are guided by the thorough and thoughtful legal analysis
performed by the district court and discussed earlier in this opinion, and we
conclude that the district court correctly found that Kendle failed to establish a
prima facie case under Batson. To begin, at trial, Kendle did not proffer any
evidence that could be used to infer that the government’s strikes were racially
motivated except for the potential jurors’ race. “[A] showing that a party used its
authorized peremptory strikes against jurors of one race does not, standing alone,
establish a prima facie case of discrimination.” Lowder Realty, 236 F.3d at 637.
The two arguments Kendle advances in his brief are similarly unavailing.
15
First, he argues that the government’s disparate treatment of McDuffie and
Lenoble allows an inference of discriminatory intent. Although the district court
did not excuse Lenoble for cause, as it had McDuffie, the government reminded
the district court that Lenoble mentioned that she had similar childcare issues. The
district court found that there was sufficient difference between the two women
because Lenoble did not need to use public transportation and she had more time to
reach her destination. Further, the court specifically asked Lenoble whether she
would have enough time to pick up her children and she answered affirmatively.
Additionally, the government also moved for the court to dismiss Padilla for cause
based on his childcare issues, which the district court did. Padilla’s race is not
apparent from the record, but Kendle did not object to his for-cause dismissal.
Second, Kendle argues that the district court ignored numerical evidence
showing that the government challenged the bulk of the available black members
of the jury venire. The government, however, only exercised peremptory
challenges against two of the five African-American members of the venire; the
third challenge (McDuffie) was for cause, and Kendle did not object. Moreover,
even if Kendle could show a statistical disparity, which he cannot, statistical
information can support an inference of discrimination only when placed in
context, which Kendle fails entirely to provide. See Ochoa-Vasquez, 428 F.3d at
16
1044. In fact, the context provided by the district court demonstrates that such an
inference is not plausible. Two African-Americans were seated on the jury without
a government challenge. Lowder Realty, 236 F.3d at 638 (“[T]he unchallenged
presence of jurors of a particular race on a jury substantially weakens the basis for
a prima facie case of discrimination in the peremptory striking of jurors of that
race.”). Next, the government did not use all of its allotted peremptory challenges
and could have used the remaining one against one of the two African-Americans
who were eventually empaneled. Ochoa-Vasquez, 428 F.3d at 1045. Finally, the
district court did conduct a numerical analysis, which Kendle ignores, and it
concluded that the percentage of African-American jurors seated was roughly
equivalent to the percentage in the venire.
B. Sufficiency of the Evidence
Second, Kendle argues that the evidence presented at trial was insufficient to
support the jury’s finding that he was guilty of possession with intent to distribute
5 grams or more of crack cocaine. We review de novo a challenge to the
sufficiency of the evidence. United States v. Gunn, 369 F.3d 1229, 1234 (11th
Cir.), cert. denied, 543 U.S. 937 (2004). “In assessing the sufficiency of the
evidence, this [c]ourt views the evidence in the light most favorable to the
government with all reasonable inferences and credibility choices made in the
17
prosecution’s favor.” United States v. Alaboud, 347 F.3d 1293, 1296 (11th Cir.
2003). “A jury’s verdict must be sustained against such a challenge if any rational
trier of fact could have found the essential elements of the crime beyond a
reasonable doubt.” Id. (internal quotations and citation omitted).
In order to sustain a conviction for possession of a controlled substance with
intent to distribute, “the government must prove beyond a reasonable doubt that the
defendant knowingly possessed the [controlled substance] and that he intended to
distribute it.” United States v. Mejia, 97 F.3d 1391, 1392 (11th Cir. 1996). These
elements can be proven by either direct or circumstantial evidence. United States
v. Poole, 878 F.2d 1389, 1391-92 (11th Cir. 1989). “Evidence of surrounding
circumstances can prove knowledge.” United States v. Alvarez, 837 F.2d 1024,
1027 (11th Cir. 1988). “Possession may be actual or constructive, and the latter
can be established by evidence showing ownership, dominion, or control over the
contraband itself or the premises on which it is concealed.” United States v.
Montes-Cardenas, 746 F.2d 771, 778 (11th Cir. 1984). “Constructive possession
may be shared with others, and can be established by circumstantial or direct
evidence.” Id.
The evidence, when viewed in the light most favorable to the government,
demonstrates that Kendle actually or constructively possessed the crack cocaine. A
18
jury could reasonably infer that Kendle lived in the house at 867 Southwest 6th
Street and exercised ownership, dominion, or control over the house in which the
drugs were concealed based on (1) the phone bill and car title that both listed his
address as that of the house in question; (2) his ownership of keys to the residence;
(3) the prescription bottles that bore his name that were found at the residence; and
(4) the fact that he was seen at the residence almost every day that police testified
to surveilling the house. Additionally, the jury heard testimony that Kendle
indicated to the police where to search for the drugs in the house and the police
found drugs in those locations, that Kendle was seen making what appeared to be a
drug sale on March 24, that he was nearly always at the house when drugs were
being sold, and that on the date of Kendle’s federal arrest Officer Mead saw
Kendle take a plate with what looked like a crack “cookie” into another part of the
house and the plate later tested positive for drug residue. Such evidence was
certainly enough for the jury to infer that Kendle knowingly possessed the crack
cocaine. Finally, Kendle’s intent to distribute could be inferred from the testimony
that (1) stashes of drugs were found individually packaged in small bags; (2) a
large amount of cash was seized from the residence; and (3) a scale and plastic bag
sealer were found at the house.
C. Sentencing Issues
19
Finally, Kendle argues that the retroactive application of the Booker
remedial holding violated due process as an ex post facto application of an
advisory sentencing scheme and that the legality of his sentence and the use of the
career-offender enhancement turns on the continued validity of Almendarez-Torres
v. United States, 523 U.S. 224 (1998). Because Kendle raised both Blakely and
Booker objections in the district court, we review his claims de novo, but reverse
only for harmful error. United States v. Paz, 405 F.3d 946, 948 (11th Cir. 2005).
“We review de novo a defendant’s claim that his sentence violated ex post facto
principles.” United States v. Thomas, 446 F.3d 1348, 1351 (11th Cir. 2006).
First, this court already has rejected Kendle’s ex post facto challenge.
Thomas, 446 F.3d at 1355; United States v. Martinez, 434 F.3d 1318, 1324 (11th
Cir. 2006); United States v. Duncan, 400 F.3d 1297, 1307-08 (11th Cir.), cert.
denied, — U.S. —, 126 S. Ct. 432 (2005). Kendle had “ample warning” that 360
months imprisonment, or even life imprisonment, was a potential consequence of
his actions because (1) life imprisonment was specified in the United States Code
as the statutory maximum for the crime, 21 U.S.C. § 841(b)(1)(B)(iii); and (2) the
guidelines in effect at the time he committed the crime and at the time he was
sentenced informed him that the sentencing judge could engage in factfinding and
could impose a possible life sentence. Thomas, 446 F.3d at 1355; Martinez, 434
20
F.3d at 1324; Duncan, 400 F.3d at 1307; see also Blakely, 542 U.S. at 305 n.9
(“The Federal Guidelines are not before us, and we express no opinion on them.”).
Second, as Kendle concedes, this court repeatedly has held that Apprendi,
Blakely, and Booker did not disturb the Supreme Court’s holding in Almendarez-
Torres that the government need not allege in its indictment nor prove beyond a
reasonable doubt that a defendant had prior convictions for a district court to use
those convictions for purposes of enhancing a sentence. United States v.
Camacho-Ibarquen, 410 F.3d 1307, 1315-16 (11th Cir. 2005). “Although recent
decisions, including Shepard v. United States, 544 U.S. 13, 125 S.Ct. 1254, 161
L.Ed.2d 205 (2005), may arguably cast doubt on the future prospects of
Almendarez-Torres’s holding regarding prior convictions, the Supreme Court has
not explicitly overruled Almendarez-Torres. As a result, we must follow
Almendarez-Torres.” Id. at 1316 n.3. The district court, therefore, did not err in
applying the career-offender enhancement.
III.
For the foregoing reasons, we AFFIRM the judgment of the district court.
AFFIRMED.
21
|
Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
5-11-2007
Edwards v. Govt of VI
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-4139
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 06-4139
GOVERNMENT OF THE VIRGIN ISLANDS
v.
ROGER EDWARDS,
Appellant
On Appeal from the District Court
of the Virgin Islands, Division of St. Thomas Appellate Division
(D.C. No. 01-cr-00247)
Appellate Judges: Hon. Raymond L. Finch, Chief Judge, District Court of the V.I.,
Hon. Curtis V. Gomez, Judge of the District Court of the V.I.,
and Hon. Maria M. Cabret, Judge of the Superior Court of the V.I.
Argued May 7, 2007
Before: SLOVITER, STAPLETON, and VAN ANTWERPEN, Circuit Judges
(Filed May 11, 2007 )
______
Leslie L. Payton (Argued)
Charlotte Amalie, St. Thomas
USVI 00803
Attorney for Appellant
Matthew C. Phelan (Argued)
Office of Attorney General of Virgin Islands
Department of Justice
Charlotte Amalie, St. Thomas
USVI 00802
Attorney for Appellee
______
OPINION
______
SLOVITER, Circuit Judge.
A Virgin Islands jury convicted appellant Roger Edwards of four counts of sexual
abuse of his minor daughter. Edwards filed a motion for a new trial which was denied by
the Territorial Court of the Virgin Islands.1 The Appellate Division affirmed, and
Edwards appeals to this court.
I.
As we write primarily for the parties who are familiar with the facts of this case,
we will not restate those facts except as necessary for our analysis. Edwards was charged
in an eleven-count information under the Virgin Islands Code with committing a variety
of sexual acts against his minor daughter, M.E. M.E., who alternated between living with
her aunt in St. Lucia and her father and an aunt in St. Thomas, testified that, during
periods when she lived with her father between the ages of seven and ten years old, he
subjected her to unlawful sexual conduct. The information contained counts charging
each such occasion, but the jury, following a two-day trial, convicted Edwards on four
counts, each involving an act of unlawful sexual contact that occurred between August 1,
1997 and December 31, 1997 when M.E. was seven and eight years old. The information
1
That court is now known as the Superior Court of the
Virgin Islands. See V.I. Code Ann. tit. 4, § 2.
2
charged violations of V.I. Code Ann. tit. 14, § 1708(2), which makes it a crime to have
sexual contact with a person under the age of thirteen.2
Edwards moved for a new trial under Rule 135 of the Rules of the Territorial Court
which that court denied in an opinion and order dated June 29, 2001. The Appellate
Division of the District Court of the Virgin Islands affirmed in an August 29, 2006
opinion and order,3 and Edwards now appeals to this court.
II.
The Appellate Division had jurisdiction pursuant to 48 U.S.C. § 1613a(a). This
court has jurisdiction under 28 U.S.C. § 1291 and 48 U.S.C. § 1613a(c). See Gov’t of the
V.I. v. Hodge, 359 F.3d 312, 318-19 (3d Cir. 2004). In reviewing the decision of the
Territorial Court, we apply the same standard of review as that used by the Appellate
2
Specifically, in Count III, Edwards was charged with
having his daughter rub his penis with her hand; in Count IV, with
putting his mouth on her vagina; in Count V, putting his penis in
her mouth; and, in Count VII, with touching her breast. M.E.
testified to each of these acts at trial.
3
We note that the Appellate Division appears to have used,
as the source of facts in its decision, a statement by a police
officer who interviewed M.E., rather than M.E.’s trial testimony.
Edwards v. Gov’t of the V.I., No. 2001/247, 2006 WL 2709634,
at *1 (D.V.I. Aug. 29, 2006). It is unclear why trial testimony
from the record was not used, particularly when the Appellate
Division’s discussion of the facts does not perfectly correspond
with M.E.’s trial testimony, and includes alleged events that
occurred when M .E. was five years old – events that she did not
testify to at trial, and that were uncharged in the Information. As
we do not rely on those facts, it is irrelevant for our purposes.
3
Division, exercising plenary review over issues of law and reviewing findings of fact for
clear error. BA Properties Inc. v. Gov’t of the V.I., 299 F.3d 207, 210 (3d Cir. 2002);
Gov’t of the V.I. v. Albert, 241 F.3d 344, 347 n.3 (3d Cir. 2001); Gov’t of the V.I. v.
Smith, 949 F.2d 677, 680 (3d Cir. 1991); Semper v. Santos, 845 F.2d 1233, 1235-36 (3d
Cir. 1988). “A motion for a new trial is addressed to the trial judge's discretion, and the
scope of appellate review is whether such discretion was abused.” Gov’t of the V.I. v.
Lima, 774 F.2d 1245, 1250 (3d Cir. 1985).4
III.
Alleged Juror Bias
Edwards notes that a juror, Veronica Powell, did not respond in the affirmative
during voir dire to the question of whether any family member had ever been the victim
of sexual assault. He argues that because Powell answered this question in the
affirmative in open court when asked during voir dire in another case the following
4
As an initial matter, we note a troubling lack of coherent
citations to the record on this appeal. See Fed. R. App. P.
28(a)(9)(A) (“[A]rgument . . . must contain[ ] appellant's
contentions and the reasons for them, with citations to the
authorities and parts of the record on which the appellant relies
[.]”); Doeblers' Pa. Hybrids, Inc. v. Doebler, 442 F.3d 812, 820 n.8
(3d Cir. 2006) (noting importance of proper appendix citation for
appellate review). Indeed, Edwards’ counsel has presented certain
arguments that appear to be openly contradicted by parts of the
record that have either gone uncited or do not appear in the
appendix prepared for this appeal. This lack of clear citation and
careful appendix preparation has thus unnecessarily complicated
our review of Edwards’ claims of error.
4
month, this shows that Powell was “biased and vindictive.” Appellant’s Br. at 14. We
have previously stated that “[t]o order a new trial[,] because of a juror's failure to disclose
information at voir dire, requires the complaining party to show that a juror failed to
answer honestly a material question on voir dire, and then further show that a correct
response would have provided a valid basis for challenge for cause.” United States v.
Richards, 241 F.3d 335, 344 (3d Cir. 2001) (internal quotation marks and citation
omitted). This rule is inapplicable here. As the Appellate Division observed, 2006 WL
2709634, at *4, the Territorial Court made clear in its ruling that “V.P. did disclose such
information” at a sidebar during which counsel for Edwards was present, “in more detail
during voir dire for this matter than the subsequent matter.” Our review of the transcript
of the jury selection on April 30, 2001 confirmed this assertion. Appellant has therefore
not demonstrated that V.P. “failed to answer honestly a material question on voir dire”
and, thus, the bias argument fails. See Richards, 241 F.3d at 344 (no abuse of discretion
in trial court’s failure to order new trial based upon juror’s failure to disclose information,
where it had “reviewed the transcript of the voir dire of the juror in question and
determined that the juror did not withhold any information”).
IV.
Alleged Victim Recantation
Second, Edwards argues that the trial court erred in failing to grant a new trial on
the basis of witness recantation. He asserts that, while the jury was deliberating, M.E.
5
“recanted” her trial testimony by approaching Edwards, his mother, and his stepmother in
the hallway of the court, apologizing, and offering that she still loves and missed
Edwards. According to the Territorial Court, this matter was “immediately” brought to
the attention of the Territorial Court, which directed the prosecution to “to get in touch
with the victim” for purposes of examining the alleged recantation. App. at II.37.5
A trial court “may grant a new trial on the basis of ‘newly discovered evidence’ if
five requirements are met: (a) the evidence must be in fact, newly discovered, i.e.,
discovered since the trial; (b) facts must be alleged from which the court may infer
diligence on the part of the movant; (c) the evidence relied on, must not be merely
cumulative or impeaching; (d) it must be material to the issues involved; and (e) it must
be such, and of such nature, as that, on a new trial, the newly discovered evidence would
probably produce an acquittal.” United States v. Cimera, 459 F.3d 452, 458 (3d Cir.
2006) (interpreting Rule 33 of the Federal Rules of Criminal Procedure) (internal
quotation marks and citation omitted). “Although the decision to grant or deny a motion
for a new trial lies within the discretion of the district court, the movant has a ‘heavy
burden’ of proving each of these requirements.” Id. (internal citation omitted).
Here, the record clearly shows that, at the June 21, 2001 hearing on Edwards’
5
According to the trial court’s written decision, this
discussion with the Court was conducted “on the record,” App. at
II.37, although the parties do not appear to have placed this
discussion in the appendix before us.
6
motion for a new trial, the prosecutor proffered that the witness denied recanting any of
her testimony and merely told her father she forgave him and still loves him. In his brief,
Edwards argues that M.E. admitted to a woman named Hillis Walters that she “perjured
herself.” In support of this argument, Edwards refers to a discussion at the hearing on his
motion for a new trial where his counsel told the court that Walters, a friend of appellant,
“would testify . . . that [M.E.] told her that [her father’s sexual abuse of her] was a
complete lie.” App. at I.151. A review of the record shows that the trial court ruled that
counsel’s proffer regarding Walters related to a recantation alleged to have occurred
before trial and that the alleged new evidence had been available to Edwards at the time
of trial. Edwards did not proffer any evidence to counteract the trial court’s ruling nor did
he offer to provide any other evidence of a recantation. The Appellate Division
concluded that “Edwards presented no evidence that M.E.'s trial testimony was
fabricated.” 2006 WL 2709634, at *3. There is no basis for a new trial on this ground.
V.
Sequestration of Rebuttal Witness
Third, Edwards objects to testimony by a prosecution rebuttal witness, Ariana
Watley,6 who testified following Edwards’ testimony in his own case. He asserts that
Watley was present in the courtroom during his testimony, that Watley was biased against
6
Alternate spellings, including “Whattley” and “Wattley,”
appear in the briefing, record, and rulings below.
7
Edwards because she had a paternity action pending against him, and that her presence
violated a sequestration order by the trial judge. The decision of whether or not to
sequester witnesses under Federal Rule of Evidence 615 7 is within the sound discretion of
the district court, and a reversal on appeal will be made only upon a showing of an abuse
of that discretion. See United States v. Agnes, 753 F.2d 293, 306 (3d Cir. 1985),
abrogated on other grounds by Smith v. Borough of Wilkinsburg, 147 F.3d 272 (3d Cir.
1998); Gov’t of the V.I. v. Edinborough, 625 F.2d 472, 474 (3d Cir. 1980) (“[T]he failure
to sequester witnesses is not, in itself, grounds for reversal unless defendant can show
prejudice resulting from the failure to sequester.”). Here, the trial court apparently
considered striking Watley’s testimony upon the defense’s objection,8 but concluded that,
as it had “personally observed this witness . . . and she was not present during [Edwards’
testimony,]” App. at I.167, there was no basis for doing so. The court observed that
Watley was present only during the testimony of Dr. Lloyd, the treating physician, and his
testimony was unrelated to Watley’s, as the Appellate Division noted, 2006 WL 2709634,
at *4. Thus, Edwards has not even demonstrated that Watley was present during his
testimony, let alone that any prejudice flowed from her presence. We see no abuse of
discretion here.
7
As the Appellate Division noted, V.I. Code Ann. tit. 5, §
738 is similar to the Federal Rule of Evidence on this point.
8
The parties have not placed the transcript of this initial
objection and ruling, referenced in the trial court’s decision, in the
appendix.
8
VI.
Use Immunity
Fourth, Edwards argues that the government and the Court violated his due process
rights by refusing to grant immunity to two defense witnesses, his girlfriend Deborah
Nibbs and friend Sheila Tatum,9 both of whom invoked the Fifth Amendment at trial.
According to the affidavit of an investigating officer, M.E. stated that she had told Nibbs,
Tatum, and M.E.’s mother that her father was sexually abusing her, but that none of the
women took any action. Edwards appears to argue that, because Nibbs and Tatum were
potentially criminally liable for failing to report the abuse,10 they were obliged to invoke
the Fifth Amendment at trial. Thus, Edwards continues, the failure to grant immunity
adversely affected his defense, as he presumes they would have testified that “when the
victim told them of the alleged molestation by the Defendant, the victim later said the
molestation was a lie and that she made up the story.” 11 Appellant’s Br. at 22.
9
Alternate spellings of these names appear in the record and
briefing.
10
V.I. Code Ann. tit. 5, § 2533 mandates that certain
professionals, such as those in the medical, child care, educational,
and law enforcement communities, immediately report suspected
child abuse. Apparently, Nibbs worked as a school aide and Tatum
worked for the Human Services Department.
11
Edwards has placed some of the pages from the colloquy
on the Nibbs/Tatum testimony before the trial court in the
Appendix. Nowhere is it profferred that Nibbs and Tatum would
have testified that M.E. eventually told them she had lied about the
abuse, although appellant’s counsel appears to have read a
9
“Use immunity prevents the prosecution from directly utilizing immunized
testimony” against a witness. United States. v. Smith, 452 F.3d 323, 336 (4th Cir. 2006).
We review a trial court’s refusal to immunize a possible defense witness for abuse of
discretion. United States v. Herman, 589 F.2d 1191, 1213-14 (3d Cir. 1978); see also
Gov’t of the V.I. v. Smith, 615 F.2d 964 (3d Cir. 1980). Ordinarily, “the decision to grant
immunity is reserved to the discretion of the executive branch.” United States v. Adams,
759 F.2d 1099, 1107-08 (3d Cir. 1985). However, “under certain circumstances due
process may require that the government afford use immunity for a defense witness.”
Smith, 615 F.2d at 968. Where the government has denied immunity as an act of
“deliberate misconduct,” made “with the deliberate intention of distorting the judicial
factfinding process,” the court may require that the government grant such use immunity.
Id. at 969. Even absent this type of prosecutorial misconduct, a court has inherent power
to grant use immunity “when it is found that a potential defense witness can offer
testimony which is clearly exculpatory and essential to the defense case and when the
government has no strong interest in withholding use immunity[.]” Id. at 972, 974
(noting “that opportunities for judicial use of this immunity power must be clearly
limited”); see also United States v. Santtini, 963 F.2d 585, 598 n.6 (3d Cir. 1992) (noting
the limited application of judicial immunity theory, and observing that “other courts of
statement from Nibbs to that effect at the June argument on the
Rule 135 motion for a new trial.
10
appeals to consider the possibility of a court's inherent authority to immunize a witness
have flatly rejected” such a result).
Here, Edwards has not demonstrated that any such circumstances warranting such
immunization are present. There has been no showing that there was any effort by the
government to distort the factfinding process, or even that the government has suggested
it intended to prosecute either or both of the prospective witnesses. Edwards argues that
the government threatened to prosecute the witnesses, thereby forcing them to rely on the
Fifth Amendment. At oral argument, it became clear that Edwards relies only on the
government’s failure to agree to provide the witnesses with use immunity. The
government had the right to decline use immunity; that does not constitute a threat of
prosecution.
Moreover, there has been no proffer as to the “essential” and “exculpatory” nature
of Nibbs’s and Tatum’s potential testimony.12 Indeed, the trial court offered to allow
defense counsel to introduce statements the two had made to officers, but Edwards’
counsel objected on hearsay grounds, and the trial court noted in its ruling that it is likely
that the two would not have testified to any exculpatory fact but to the fact that M.E. told
12
To the extent appellant relies on the apparent exculpatory
statement from Nibbs that M.E. confessed she had lied to her when
she reported the abuse to Nibbs – first raised, it appears, at the
June 2001 hearing on the Rule 135 motion – as grounds for a new
trial, such an argument would fail; this statement should have been
available to the defense prior to trial, and is, in any event, merely
impeaching.
11
them her father had “lay upon her.” App. at II.40. There is therefore no reason to disturb
the trial court’s ruling on the immunity point.13
VII.
Closing Remarks
Fifth, Edwards argues that statements made in the prosecutor’s closing argument
that referred to Edwards as a liar who used the victim as a “sex toy” and “sex slave”
warrant a new trial. He did not object at the time these statements were made. “[A]n
absence of any objection to the remarks at the time of their utterance weigh heavily in the
determination that they are not actually prejudicial.” United States v. Lawson, 337 F.2d
800, 807 n.4 (3d Cir. 1964).
13
The Appellate Division noted that “the appellant cannot
show that the testimony was ‘essential to the defense’ as the jury
returned a verdict of not guilty on all counts that involved the
time-frame when the appellant and his daughter had a relationship
with the witnesses in question[.]” 2006 WL 2709634, at *5. It is
true M E. testified that she told Tatum and Nibbs about the abuse
during the year she was in Ms. Reed’s class, 1998-1999, while
Edwards was convicted of acts he committed a year earlier,
between August and December 1997. However, this of course
does not necessarily indicate that Nibbs and Tatum’s unimmunized
testimony would have been irrelevant to the question of Edwards’
guilt on the 1997 charges; M.E. testified she told the women of the
fact her father “was laying on” her without limiting the abuse to
exclude that in 1997. Nevertheless, as observed above, relevancy
is not the standard by which judicial immunity rulings are assessed.
12
“[N]on-contemporaneous objections” to prosecutorial remarks “are subject to plain
error review. In order to demonstrate prosecutorial misconduct under a plain error
standard, the review must reveal egregious error or a manifest miscarriage of justice.”
United States v. Brennan, 326 F.3d 176, 182 (3d Cir. 2003) (internal quotation marks and
citations omitted). Plain error is that which is “clear” and “affect[s the] defendant's
‘substantial rights.’” United States v. Nappi, 243 F.3d 758, 762 (3d Cir. 2001). “The
prejudice, which may inure to a defendant as a result of allegedly improper comments
made during the government's closing argument, must be evaluated in light of that closing
argument as a whole.” Gov’t of the V.I. v. Joseph, 770 F.2d 343, 350 (3d Cir. 1985).
After reviewing the prosecutor’s comments in the context of the entire summation
and the proceedings as a whole, we find no error, plain or otherwise. The prosecutor’s
remarks were not an inappropriate characterization of the evidence before the jury.
VIII.
The May 7, 2004 Motion
Finally, Edwards asks this Court to direct the Superior Court to respond to his
post-trial motion of May 7, 2004 made under Federal Rule of Criminal Procedure
33(b)(1), which the Appellate Division noted was not before it. 2006 WL 2709634, at *1
n.2. Edwards contends in that motion that newly-discovered evidence – including
psychological counseling notes by Dr. Richard A. Gardner that suggested that M.E. made
a false accusation of sexual abuse against another individual in a separate criminal action
13
– warrant a new trial. Edwards’ counsel has included in the appendix here a copy of a
letter dated November 16, 2006 that he sent to the Superior Court inquiring on the status
of his motion. As Edwards notes, we have no appellate jurisdiction over this motion at
present.14
IX.
For all of the above reasons, we will affirm the rulings of the District Court in this
matter.
14
If Edwards wishes, this matter could be pursued via
mandamus.
14
|
172 F.Supp. 107 (1959)
UNITED STATES of America, Plaintiff,
v.
GUERLAIN, INC., Defendant.
UNITED STATES of America, Plaintiff,
v.
PARFUMS CORDAY, INC., Defendant.
UNITED STATES of America, Plaintiff,
v.
LANVIN PARFUMS, INC., Defendant.
United States District Court S. D. New York.
March 31, 1959.
Richard B. O'Donnell, New York City, by Joe F. Nowlin, New York City, for plaintiff.
Shearman, Sterling & Wright, New York City, by Charles C. Parlin, Jr., New York City, for Guerlain, Inc.
Rosenman, Goldmark, Colin & Kaye, New York City, by Gilbert S. Edelson, New York City, for Parfums Corday, Inc.
Paul, Weiss, Rifkind, Wharton & Garrison, New York City, by Simon H. Rifkind, New York City, for Lanvin Parfums, Inc.
EDELSTEIN, District Judge.
After a successful prosecution of these suits in the District Court, and before argument of the appeals in the Supreme Court, the Government moved in the Supreme Court to vacate the judgments in order that, on remand, it might move for dismissals. The basis for this unusual and perhaps unique procedure is said to be a policy decision, arrived at only during the pendency of the appeals, that the main problem involved was inappropriate for judicial resolution in antitrust litigation. It has been represented that previous disagreement within the Executive Branch has been reconciled, and that the public interest would be better served by an attempt to get a legislative resolution to the same effect as the decision of this Court.
The "main problem" referred to is the meaning of § 526 of the Tariff Act of 1930 (19 U.S.C.A. § 1526), the Government having contended that it did not make protection available against imports of trademarked goods, where the American concern seeking such protection is affiliated with the foreign company whose legitimately marked goods it seeks to exclude. There is certainly no doubt that the attempt to resolve this issue in antitrust litigation was clumsy, *108 particularly in view of the fact that the Government was, through the Collector of Customs, allowing the exclusion that it claimed, through the Antitrust Division, to be illegal. Further, there is certainly no doubt that this Court suggested the inappropriateness of such litigation. There is no doubt that the Government elected to proceed nevertheless, and it is hardly to be presumed without careful study and advisement, the complaints having been filed some two and a half years earlier. There is considerable doubt that anything new transpired to cause the singular and abrupt change of heart during the pendency of the appeals. At least counsel for the Government was unaware of any new factual information having come to light since the filing of the complaints. There is, finally, no doubt that the suits were prosecuted at length, with tenacity, talent and vigor. One may be forgiven a degree of perplexity in the circumstances.
The one thought that obviously suggests itself is that the Government has reconsidered the validity of the decisions. But it is not the position of the Solicitor General that the decisions were in error and the Government denies that it has employed a stratagem for the confession of error. There is, indeed, no reason at all why a straightforward confession of error could or should not be made if the Government believed itself and the Court to be in error.
It is the duty of the Department of Justice to enforce the antitrust laws and it is the duty of this Court to decide the issues properly presented to it for decision. If the Department of Justice in its discretion adopts a policy of enforcement, it is not within the judicial realm to interfere. The decision to abandon these suits is a decision of policy within the discretion of the Department of Justice. But the dockets of this Court are congested to the point of public expressions of concern by the Department of Justice and these proceedings have constituted an unfortunate aggravation of that condition.
The motion to dismiss will, of course, be granted. And inasmuch as the defendants will thereby be deprived of an opportunity to prevail on appeal (an opportunity they are eager to take advantage of), it is only fair that the dismissals be with prejudice, a decision to which the Government consents.
|
363 N.W.2d 209 (1985)
In the Matter of the GUARDIANSHIP OF Alice M. SASSE.
Nos. 14149, 14176 and 14547.
Supreme Court of South Dakota.
Considered on Briefs October 25, 1984.
Decided February 20, 1985.
*210 Ronald Clabaugh of Bangs, McCullen, Butler, Foye & Simmons, Rapid City, for appellant Lynn E. Sasse (in No. 14149).
Wm. Jason Groves, Rapid City, for appellants Stanley G. Sasse (in No. 14176) and Carl W. Sasse (in No. 14547).
WOLLMAN, Justice.
These are consolidated appeals. # 14149 and # 14176 are an appeal and a notice of review from a judgment entered against Lynn E. Sasse for losses suffered by the guardianship while he was guardian of the person and estate of Alice M. Sasse. # 14547 is an appeal from the judgment vacating the judgment entered in # 14149 and # 14176. We affirm appeal # 14547 and dismiss # 14149 and # 14176.
At all times material herein, Alice M. Sasse, an enrolled member of the Oglala Sioux Tribe, owned a ranch in Shannon County, South Dakota, consisting of approximately 7,600 acres of Indian trust land. On August 14, 1976, Alice M. Sasse filed a petition with the circuit court asking that her son, Lynn E. Sasse, be appointed as the guardian of her person and estate. An order so appointing Lynn E. Sasse was entered on September 13, 1976. Letters of guardianship were issued that day and on September 15, 1976, Lynn E. Sasse executed his oath as guardian.
Nothing was filed in the guardianship until May of 1980, when Lynn E. Sasse filed a petition requesting authority to use income from the guardianship property as security for a personal loan. Thereafter, Lynn E. Sasse filed several inventories with respect to the personal property belonging to the guardianship estate. On December 7, 1981, pursuant to an application submitted by Carl W. Sasse and Stanley G. Sasse, two of Alice M. Sasse's six children, an order to show cause was entered requiring, among other things, Lynn E. Sasse to show cause why his letters of guardianship should not be revoked. Following a hearing on December 10, 1981, an order was entered on December 16, 1981, revoking Lynn E. Sasse's letters of guardianship. On February 9, 1982, Stanley G. Sasse and one Ralph W. Barkley were appointed as successor joint guardians. Ralph W. Barkley resigned as guardian effective June 25, 1982. Thereafter, proceedings were had on Stanley G. Sasse's request that Lynn E. Sasse be surcharged for his alleged deficiencies during the time he acted as guardian. These proceedings ultimately resulted in the entry of judgment against Lynn E. Sasse on January 31, *211 1983, in the amount of $77,074.95. It is that judgment from which Lynn E. Sasse appealed in # 14149.
After the appeal was taken to this court from that judgment, Lynn E. Sasse filed a petition asking that the trial court vacate the judgment pursuant to SDCL 15-6-60(b)(4) on the ground that the trial court had no jurisdiction over the subject matter of the underlying action. Following our remand of the appeal, see Menno State Bank v. City of Menno, 297 N.W.2d 460 (S.D.1980), the trial court granted the petition for relief from judgment and the motion to dismiss for lack of jurisdiction and dismissed the action. It is from this order that the appeal was taken in # 14547.
Alice M. Sasse was an enrolled member of the Oglala Sioux Tribe. As indicated above, she owned some 7,600 acres of Indian trust land located in Shannon County, South Dakota, which is within the borders of the Pine Ridge Indian Reservation. She also owned some cattle. It was Lynn E. Sasse's alleged failure to make a full and complete accounting of these cattle, as well as of the proceeds of certain lease payments and government farm program payments, that gave rise to the request that he be surcharged.
Alice M. Sasse died on February 24, 1983. On March 3, 1983, Stanley G. Sasse was appointed by the circuit court as special administrator of Alice M. Sasse's estate. On August 6, 1983, Carl W. Sasse filed a petition for letters testamentary with the Oglala Sioux Tribal Court. On October 28, 1983, he received letters of administration with will annexed from the Oglala Sioux Tribal Court. Probate proceedings are being conducted in that court, and it is in his capacity as administrator of the Estate of Alice M. Sasse, deceased, that Carl W. Sasse has appealed in # 14547.
Simply put, the question before us is whether the circuit court was without jurisdiction to appoint a guardian of the person and estate of Alice M. Sasse and to thereafter supervise the guardianship. For the reasons stated below, we conclude that the trial court lacked such jurisdiction.
In O'Connell v. Hamm, 267 N.W.2d 839 (S.D.1978), we held that our state courts have no subject matter jurisdiction to hear and determine a civil action between enrolled members of an Indian tribe for the creation of a constructive trust, the corpus of which would consist of Indian trust lands. We based our decision upon our earlier holdings in Smith v. Temple, 82 S.D. 650, 152 N.W.2d 547 (1967), and Kain v. Wilson, 83 S.D. 482, 161 N.W.2d 704 (1968), as well as upon the seminal case of Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959).
We conclude that the same considerations that led to our decision in O'Connell v. Hamm are controlling here. As we pointed out in O'Connell, the jurisdictional test set forth by the United States Supreme Court in Williams v. Lee is whether the state court action infringes on the right of reservation Indians to make their own laws and be ruled by them. In utilizing this test and in reaching the conclusion that our state courts lacked subject matter jurisdiction, we applied the criteria set forth by the Supreme Court of New Mexico:
In considering this test it is helpful to summarize certain criteria to determine whether or not the application of state law would infringe upon the self-government of the Indians. These are the following: (1) whether the parties are Indians or non-Indians, (2) whether the cause of action arose within the Indian reservation, and (3) what is the nature of the interest to be protected.
O'Connell, supra, 267 N.W.2d at 841 (quoting Chino v. Chino, 90 N.M. 203, 206, 561 P.2d 476, 479 (1977)).
In the case before us, the parties are Indians. The cause of action seeking to surcharge Lynn E. Sasse for his alleged defalcations as guardian of his mother's estate arose within the Pine Ridge Indian Reservation and was largely based upon his actions in allegedly improperly accounting for the cattle owned by the guardianship estate and pastured on the Indian trust land. The nature of the interest to be *212 protected, i.e., the relationship between Indian and Indian, implicates the right of reservation Indians to make their own laws and to be ruled by them. The application of state law would perforce interfere with this right of reservation self-government. In short, "to allow the exercise of state jurisdiction here would undermine the authority of the tribal courts over Reservation affairs and hence would infringe on the right of the Indians to govern themselves." Williams v. Lee, supra, 358 U.S. at 223, 79 S.Ct. at 272, 3 L.Ed.2d at 255.
Granted, this case involves a cause of action broader in scope than that involved in O'Connell, supra, in that it is not strictly limited to matters involving title to Indian trust land. Cf. Lonewolf v. Lonewolf, 99 N.M. 300, 657 P.2d 627 (1982). We are not disposed to make fine jurisdictional calculations based upon that distinction, however, inasmuch as the Oglala Sioux Indian Tribe has a well-established tribal court that has jurisdiction over all matters that were presented to the circuit court in this instance. It would be presumptuous on our part to say that the parties to this action could not have effectively litigated their claims within the tribal court. Indeed, we have recently been advised by counsel for the parties that a hearing will be held in the Oglala Sioux Tribal Court on January 28, 1985, on the Estate's claim that Lynn E. Sasse's distributive share of the estate should be offset by the amount of the loss to the estate that resulted from his defalcations during the time he served as guardian.
In reaching our decision, we have not overlooked the argument that Lynn E. Sasse waived his right to contest state court jurisdiction or consented to the jurisdiction of the state court by entering a general appearance.
It has long been the rule in this state that "where the court has no jurisdiction of the subject-matter of the action, jurisdiction cannot be given to such court by any act of the parties, even by joint stipulation ...." People's Sec. Bank v. Sanderson, 24 S.D. 443, 448, 123 N.W. 873, 875 (1909). In Honomichl v. State, 333 N.W.2d 797, 799 (S.D.1983), we restated the general rule that "subject matter jurisdiction cannot be conferred by agreement, consent, or waiver."
A judgment which a court had no jurisdiction to pronounce is void and may be attacked at any time either directly or collaterally. Johnson v. Bruflat, 45 S.D. 200, 186 N.W. 877 (1922). See also Kromer v. Sullivan, 88 S.D. 567, 225 N.W.2d 591 (1975).
It follows, then, that Lynn E. Sasse was not precluded from filing the petition seeking to have the underlying judgment against him vacated on the ground that the trial court lacked subject matter jurisdiction.
The judgment in appeal # 14547 is affirmed. Appeal # 14149 and the notice of review in # 14176 are dismissed.
All the Justices concur.
WUEST, Circuit Judge, Acting as Supreme Court Justice, participating.
|
382 P.2d 181 (1963)
72 N.M. 184
Margaret Armijo JIMENEZ, Plaintiff-Appellant,
v.
SHOP RITE FOODS, INC., d/b/a Piggly Wiggly Stores, Defendant-Appellee.
No. 7216.
Supreme Court of New Mexico.
May 27, 1963.
*182 Lorenzo A. Chavez, Arturo G. Ortega, Melvin L. Robins, Albuquerque, for appellant.
Shaffer & Butt, Albuquerque, for appellee.
MOISE, Justice.
Plaintiff-appellant sought damages because of injuries suffered by her when she fell in the produce department of one of defendant's stores as a result of slipping on a grape which was on the floor.
Trial of the case before a jury resulted in a verdict for plaintiff. Judgment was entered thereon. Defendant moved for judgment notwithstanding the verdict, or in the alternative, for a new trial. The motion for judgment notwithstanding the verdict was sustained. In the order granting judgment n.o.v. the court found "that the court erroneously admitted testimony into evidence of a prior fall at defendant's store; that under any circumstances there was insufficient evidence of defendant's negligence to raise a question of fact for the jury * * *."
It is only necessary for us to consider whether the proof presented was sufficient to raise an issue of fact as to defendant's negligence. In so doing, we are bound to view the evidence in its best light to support the verdict of the jury in favor of plaintiff. Ortega v. Texas-New Mexico Ry. Co., 70 N.M. 58, 370 P.2d 201; Carpenter v. Yates, 58 N.M. 513, 273 P.2d 373.
Briefly stated, the pertinent evidence established that produce was displayed in racks about four feet high in such a manner that it is impossible to prevent some from occasionally falling to the floor. Defendant knew that when customers handled the produce some of it, such as trimmings from lettuce, would fall on the floor. In order to prevent accidents that might be caused by material which fell to the floor maintenance personnel were employed, whose duty it was to keep the floor clean. The floor had been swept about a half hour before plaintiff fell and, in addition, within five minutes of her fall an employee in the produce department passed through, picking up "trimmings" which had fallen to the floor.
Under the circumstances, even assuming without deciding that evidence of the fall, four and one-half months previously, was admissible, we agree with the trial court "that under any circumstances there was insufficient evidence of defendant's negligence." We consider this to be a clearer case of failure of proof of negligence than Barrans v. Hogan, 62 N.M. 79, 304 P.2d 880. That case supports the trial court's conclusion and requires its affirmance.
We would add a word about Mahoney v. J.C. Penney Co., 71 N.M. 244, 377 P.2d 663. We there concluded that under the facts of that case a question of fact for the jury was presented on the issue of defendant's negligence. However, we particularly noted that no change in the principles of law previously enunciated in slip and fall cases was intended, referring to several, including the Barrans case. We also stated that each case must be considered on its facts, and pointed out specifically that it was not intended thereby to establish a rule requiring a storekeeper to "follow each customer about his store, dustpan in hand, to gather up debris." To conclude that in the instant case the trial court had erred would certainly amount to a holding in effect that this is exactly what is required.
It is not necessary for us to consider or discuss the errors complained about in connection with the granting of a new trial. The court did not err in granting defendant *183 judgment n.o.v., and its order so doing should be affirmed.
It is so ordered.
COMPTON, C.J., and CARMODY, J., concur.
|
NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS OCT 31 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LANCE McDERMOTT, No. 16-35630
Plaintiff-Appellant, D.C. No. 2:16-cv-00377-JCC
v.
MEMORANDUM*
UNITED STATES POSTAL SERVICE,
also known as USPS; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
John C. Coughenour, District Judge, Presiding
Submitted October 23, 2017**
Before: McKEOWN, WATFORD, and FRIEDLAND, Circuit Judges.
Lance McDermott appeals pro se from the district court’s judgment
dismissing his action alleging various claims arising from his employment at the
United States Postal Service (“USPS”). We have jurisdiction under 28 U.S.C.
§ 1291. We review de novo the district court’s dismissal on the basis of claim
*
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).
preclusion. Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002). We
affirm.
The district court properly dismissed McDermott’s action because
McDermott’s claims were raised, or could have been raised, in prior actions
between the parties or those in privity with them, and those prior actions resulted in
final judgments on the merits. See id. (setting forth elements of claim preclusion);
see also Tahoe–Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 322
F.3d 1064, 1081 (9th Cir. 2003) (“Even when the parties are not identical, privity
may exist if there is substantial identity between parties, that is, when there is
sufficient commonality of interest.” (citation and internal quotation marks
omitted)).
To the extent that McDermott alleged a violation of the Hatch Act, the
district court properly dismissed the claim because McDermott failed to allege
facts sufficient to state a plausible claim. See Hebbe v. Pliler, 627 F.3d 338, 341-
42 (9th Cir. 2010) (although pro se pleadings are to be liberally construed, a
plaintiff must still present factual allegations sufficient to state a plausible claim
for relief).
The district court did not abuse its discretion in declaring McDermott a
vexatious litigant and imposing a pre-filing order against him because it gave
McDermott notice and an opportunity to be heard, developed an adequate record
2 16-35630
for review, made findings regarding his frivolous litigation history, and narrowly
tailored the restriction in the pre-filing order. See Molski v. Evergreen Dynasty
Corp., 500 F.3d 1047, 1057-58 (9th Cir. 2007) (setting forth standard of review
and factors a district court must consider before imposing a pre-filing restriction on
a vexatious litigant).
All requests set forth in McDermott’s reply brief, including his request for
appointment of counsel, are denied.
AFFIRMED.
3 16-35630
|
521 F.Supp. 350 (1981)
Arthur GOLDEN and Gladys Golden, Plaintiffs,
v.
Anthony GARAFALO, Defendant.
No. 81 Civ. 1987 (WCC).
United States District Court, S. D. New York.
August 31, 1981.
*351 Kass, Goodkind, Wechsler & Labaton, New York City, for plaintiffs; Edward Labaton, John H. Riley, Richard Rosenblum, New York City, of counsel.
Warshaw, Burstein, Cohen, Schlesinger & Kuh, New York City, for defendant; William B. Aronstein, Milton Waxenfeld, New York City, of counsel.
OPINION AND ORDER
CONNER, District Judge:
Before the Court is the motion of defendant to dismiss the complaint for lack of jurisdiction over the subject matter, pursuant to Rule 12(b)(1), F.R.Civ.P. The issue presented is whether, after the decision of the United States Supreme Court in United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 95 S.Ct. 2051, 44 L.Ed.2d 621 (1975), the transfer of total ownership and control of a privately owned and operated business, accomplished by a sale of 100% of the stock of the corporation from defendant to plaintiffs, involves the purchase of a "security" under the Securities Act of 1933 ("1933 Act") and the Securities Exchange Act of 1934 ("1934 Act"). For the reasons which follow, the Court concludes that, on the facts of this case, it does not, and accordingly grants defendant's motion.
Background
This dispute centers around the transfer from defendant to plaintiffs of Mackey's Inc. ("Mackey's"), a ticket brokerage business. Prior to the transfer defendant owned 100% of the outstanding stock of Mackey's and was its Chief Operating Officer. Plaintiffs are engaged in the ticket brokerage business, and in or about November 1980 reached agreement generally with defendant for the purchase of Mackey's. The attorneys for the parties the same attorneys who are appearing in this action then entered into discussions as to how to structure the transaction; e. g., as a sale of assets or a sale of stock. Because the lease of the premises where Mackey's conducts business placed restrictions on any assignment of or subletting under the lease, it was agreed that the transfer would be structured as a purchase and sale of the stock of Mackey's.
A written agreement was signed on December 31, 1980. In it the purchase price of the stock is defined as an amount equal to the "Net Assets" of Mackey's, as defined in the agreement, plus $108,296. The purchase price is payable in three installments, the last two evidenced by promissory notes. The agreement provides for the transfer to plaintiffs of the resignation of all existing officers and directors of Mackey's, as well as its books and records, lease and contracts. By the agreement, defendant is prohibited from directly or indirectly engaging in any capacity in the ticket brokerage business in the United States for a period of five years.
The parties simultaneously executed a consulting agreement, which recites that defendant has sold his interest in Mackey's and is no longer employed by Mackey's; that defendant agrees to provide consulting and advisory services to Mackey's upon reasonable request for a fee of $100 per day; and that defendant is an independent contractor and not an employee of Mackey's.
Finally, also on December 31, 1980, counsel for plaintiffs wrote to defendant's attorney, confirming the agreement that "the new owners will have full operational control of the business and may change currently existing practices and policies."
The Lawsuit
Plaintiffs claim that defendant has made material misstatements, both in the contract of sale and in negotiations preceding the contract, regarding Mackey's, including the volume and nature of Mackey's sales.
*352 The complaint is in five counts. The first count alleges violation of Section 17(a) of the 1933 Act, and Rule 10b-5, promulgated pursuant to Section 10(b) of the 1934 Act, and seeks rescission of the contract. Counts two through five are based upon the same factual allegations and plead claims of common law breach of contract, common law fraud, violation of a state securities statute and common law breach of the restrictive covenant agreement, respectively. Compensatory and punitive damages, as well as equitable relief, are sought. No diversity of citizenship exists, and thus jurisdiction over the latter four claims depends upon the application of principles of pendent jurisdiction.
The Motion
Defendant argues that the subject of the agreement between the parties was the outright sale of Mackey's, in which the purchase of stock was a mere indicium of ownership, and thus that the transaction did not involve the purchase of a "security" triggering application of the 1933 and 1934 Acts. Thus, argues defendant, there is no federal question presented and no basis for the exercise of pendent jurisdiction over the state law claims.
Forman
As indicated above, resolution of the issue in this case turns upon the proper interpretation to be given to the Supreme Court's decision in United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 95 S.Ct. 2051, 44 L.Ed.2d 621 (1975). In Forman, residents of a state subsidized and supervised nonprofit low-income housing cooperative were required to purchase shares of stock in order to acquire their apartments. The sole purpose of acquiring the stock was to enable the purchaser to occupy an apartment, the number of shares being proportionate to the number of rooms in an apartment. The stock could not be transferred to a nontenant pledged or encumbered. Each apartment owner was entitled to one vote, regardless of the number of shares held. Any tenant terminating his occupancy had to resell the stock back to the issuer at its initial selling price, or, under limited circumstances, sell to a qualifying replacement tenant at virtually the same price.
The question before the Court was whether the shares of stock held by the housing cooperative residents were "securities" under the 1933 and 1934 Acts. The definitional sections of the Acts[1] define a "security" as "any ... stock, ... [or] investment contract ...," "unless the context otherwise requires." The Court of Appeals had found the "stock" in Forman to be securities both because it was denominated "stock" and because it possessed the characteristics *353 of an investment contract. The Supreme Court reversed, holding that
"[w]ell-settled principles enunciated by this Court establish that the shares purchased by respondents do not represent any of the `countless and variable schemes devised by those who seek the use of the money of others on the promise of profits,' [SEC v. W. J. Howey Co., 328 U.S. 293, 299, 66 S.Ct. 1100, 1103, 90 L.Ed. 1244 (1946)], and therefore do not fall within the `ordinary concept of a security.'" Id. at 848, 95 S.Ct. at 2058.
The Court began its analysis by rejecting the proposition that the use of the term "stock" automatically qualified the shares as securities under the Acts. Quoting from its previous opinion in Tcherepnin v. Knight, 389 U.S. 332, 336, 88 S.Ct. 548, 553, 19 L.Ed.2d 564 (1977), the Court reiterated
"the basic principle that has guided all of the Court's decisions in this area:
`[I]n searching for the meaning and scope of the word "security" in the Act[s], form should be disregarded for substance and the emphasis should be on economic reality.'
"The primary purpose of the Acts of 1933 and 1934 was to eliminate serious abuses in a largely unregulated securities market. The focus of the Acts is on the capital market of the enterprise system: the sale of securities to raise capital for profit-making purposes, the exchanges on which securities are traded, and the need for regulation to prevent fraud and to protect the interest of investors. Because securities transactions are economic in character Congress intended the application of these statutes to turn on the economic realities underlying a transaction, and not on the name appended thereto. Thus, in construing these Acts against the background of their purpose, we are guided by a traditional canon of statutory construction:
`[A] thing may be within the letter of the statute and yet not within the statute, because not within its spirit, nor within the intention of its makers.' Church of the Holy Trinity v. United States, 143 U.S. 457, 459 [12 S.Ct. 511, 512, 36 L.Ed. 226] (1892)."
Forman, supra, at 848-49, 95 S.Ct. at 2058-59.
The Court did caution that
"[i]n holding that the name given to an instrument is not dispositive, we do not suggest that the name is wholly irrelevant to the decision whether it is a security. There may be occasions when the use of a traditional name such as `stocks' or `bonds' will lead a purchaser justifiably to assume that the federal securities laws apply. This would clearly be the case when the underlying transaction embodies some of the significant characteristics typically associated with the named instrument." Id. at 850-51, 95 S.Ct. at 2059-60.
However, the Court found no basis for any argument that the purchasers in Forman were misled by the use of the word "stock." The Court identified the following five "common features of stock" which the shares purchased by the cooperative tenants lacked
(1) the right to receive dividends contingent upon an apportionment of profits,
(2) negotiability,
(3) the ability to be pledged or hypothecated,
(4) voting rights in proportion to the number of shares owned, and
(5) the potential to appreciate in value and concluded that "[i]n short, the inducement to purchase was solely to acquire subsidized low-cost living space; it was not to invest for profit." Id. at 851, 95 S.Ct. at 2060.
The Court then turned its attention to the alternative ground of the Court of Appeals decision that the shares were securities; i. e., that they constituted an "investment contract." In Howey, supra, the Court had set down the following test for determining whether shares in an enterprise constitute an "investment contract":
"The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely *354 from the efforts of others." Id. 328 U.S. at 301, 66 S.Ct. at 1104.
In Howey, the Court had held that an interest in an enterprise which satisfies this test is an "investment contract" (and thus a "security"), "it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise." Id. at 299, 66 S.Ct. at 1103.
In Forman, the Court's application of the Howey test to the facts before it was previewed by the following discussion:
"We perceive no distinction, for present purposes, between an `investment contract' and an `instrument commonly known as a "security."' In either case, the basic test for distinguishing the transaction from other commercial dealings is [the Howey test]. This test, in shorthand form, embodies the essential attributes that run through all of the Court's decisions defining a security. The touchstone is the presence of an investment in a common venture premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others. By profits, the Court has meant either capital appreciation resulting from the development of the initial investment, as in Joiner, supra [320 U.S. 344, 64 S.Ct. 120, 88 L.Ed. 88] (sale of oil leases conditioned on promoters' agreement to drill exploratory well), or a participation in earnings resulting from the use of investors' funds, as in Tcherepnin v. Knight, supra (dividends on the investment based on savings and loan association's profits). In such cases the investor is `attracted solely by the prospects of a return' on his investment. Howey, supra [328 U.S.] at 300 [66 S.Ct. at 1103]. By contrast, when a purchaser is motivated by a desire to use or consume the item purchased `to occupy the land or to develop it themselves,' as the Howey Court put it, ibid. the securities laws do not apply." Id. 421 U.S. at 852-53, 95 S.Ct. at 2060-61.
The Court concluded that the purchase of the shares in Forman fell short of qualifying as a security, the sole purpose being a purchase of living quarters for personal use and not an investment in the hope of receiving profits from the efforts of others. Id. at 858, 95 S.Ct. at 2063.
Discussion
Defendant contends that, after Forman, inquiry into whether an interest is a security requires looking beyond the formal appearance of the interest and applying the "economic reality" test. Defendant argues also that the "economic reality" test is the three-part test originally set forth in Howey and utilized in Forman; i. e., a security is (1) an investment in a common venture (2) premised on a reasonable expectation of profits (3) to be derived from the entrepreneurial or managerial efforts of others. Here, contends defendant, plaintiffs purchased an entire business for their own control and operation, thus failing to satisfy the first and third elements of the test.
A number of post-Forman decisions have so ruled. In Chandler v. Kew, Inc., [1979] Fed.Sec.L.Rep. (CCH) ¶ 96,966 (10th Cir. 1977), the court, applying the Forman economic reality test, found that the transfer of stock merely as an indicium of ownership in the sale of a liquor store did not involve the sale of a security within the meaning of the federal Acts, which were designed to regulate stock exchanges and public investments, not the mere transfer of stock incidental to the sale of tangible goods.
Similarly, in Bula v. Mansfield, [1979] Fed.Sec.L.Rep. (CCH) ¶ 96,964 (D.Colo. 1977), the court dismissed federal securities laws claims by a purchaser of 100% of the stock of a restaurant, finding that (1) the economic reality was the purchase of a restaurant, and (2) since the purchaser was to assume managerial control over the restaurant, there was no reliance upon the efforts of others, the third aspect of the test set forth in Howey and Forman.
In Dueker v. Turner, [1979] Fed.Sec.L. Rep. (CCH) ¶ 97,386 (N.D.Ga.1979), the court, applying the Howey-Forman economic reality test, dismissed securities laws claims by purchasers of all of the stock of a *355 general contracting business, finding that the reality of the transaction was the acquisition of a business by the plaintiffs for their managerial control.
In Frederiksen v. Poloway, 637 F.2d 1147 (7th Cir.), cert. denied, ___ U.S. ___, 101 S.Ct. 3006, 69 L.Ed.2d 389 (1981), the plaintiff (an individual acting in his capacity as president of a corporation) purchased all of the assets and stock of a boat marina from the defendant. The plaintiff also contracted for the defendant's consulting services in the operation of the marina for five years, in exchange for an annual salary, a consulting fee and commissions on certain sales. A separate agreement vested authority to operate and manage the marina with the plaintiff. Finding that the transaction was for the commercial purpose of acquiring a business and not for the purpose of investment, the court rejected the plaintiff's claim that the acquisition of the stock constituted a purchase of a security. Since the plaintiff acquired complete ownership and control of the marina, the court found both the first and third elements of the Howey-Forman economic reality test lacking. The court found immaterial the employment contract with the defendant, since it was clear that the plaintiff had assumed managerial control over the marina.
In Barsy v. Verin, 508 F.Supp. 952 (N.D. Ill.1981), the parties were two operators of a printing business who, in combination, owned 92% of the stock of the business. They, along with the third stockholder, sold the business to a third party by means of a transfer of all of the stock. Following Frederiksen, the court rejected the federal securities laws claims, finding the economic reality of the sale to have been the wholesale transfer of a business and not an investment transaction. That defendant continued in the business as an employee did not alter the court's conclusion that it was the purchaser who assumed managerial control of the business.
In Anchor-Darling Industries, Inc. v. Suozzo, 510 F.Supp. 659 [Current] Fed.Sec. L.Rep. (CCH) ¶ 97,933 (E.D.Pa.1981), the plaintiff purchased the defendant's controlling stock of three closely held corporations and the remaining shares of these corporations from the defendant's daughters and certain employees of the corporations. The transaction was designed to effect the parties' agreement to transfer the defendant's business in its entirety to the plaintiff. The plaintiff thus assumed complete control over the operation of the corporations, although the defendant did enter into consulting agreements with the corporations. Applying the three-part "economic reality" test of Howey and Forman, the court dismissed the securities laws claim, finding the first and third components absent on the facts presented.
Finally, in Reprosystem, B. V. v. SCM Corp., ___ F.Supp. ___ [Current] Fed.Sec. L.Rep. ¶ 98,207 (S.D.N.Y.1981), Judge Sweet of this Court, following Frederiksen, refused to apply the federal securities laws to a purchase and sale of a business, even though that purchase and sale in part involved a transfer of ownership evidenced by stock.
Plaintiffs, with one exception not meriting discussion, make no attempt to distinguish the factual situations involved in these decisions from the circumstances here. Nor do they contest that their purchase of all of the stock of Mackey's fails to satisfy the first and third elements of the Howey-Forman test. Instead, plaintiffs argue that defendant's position and authorities are premised upon a misreading of Forman.
Relying upon the separate itemization of "stock" and "investment contract" within the Acts' definition of a security, plaintiffs argue that Forman should be read to have held:
(1) that the shares there were not "stock" because they lacked the five common features of stock identified above, and
(2) that the shares there were not "investment contracts" because they failed to satisfy the second, "investment for profit" element of the three-part test originally set forth in Howey. Thus, argue plaintiffs, Forman requires a two-step analysis, and the three-part "economic reality" test, which is applicable only to the definition of *356 an investment contract, is irrelevant where the interest in question meets the criteria of "stock" set forth in the first step of the Forman analysis. Since here, the argument continues, the shares in question undisputably possess the five common features of stock specified in Forman, they are "stock" within the Acts' definition of a security, and it is irrelevant that they are not also "investment contracts."
Plaintiffs rely upon four post-Forman decisions. In Bronstein v. Bronstein, 407 F.Supp. 925 (E.D.Pa.1976), the plaintiff and the defendant were brothers who along with their father, each held one-third of the stock of a corporation. The defendant handled all of the corporation's financial matters; the plaintiff was employed as a "field supervisor" in charge of construction activities, and relied completely upon the defendant for information concerning the corporation's financial status and the value of its assets. The claim arose following the plaintiff's sale of his stock to the defendant. In ruling that the stock sold by the plaintiff to the defendant was a security, the court reasoned (1) that since the shares possessed the common features of stock, this was a situation, alluded to in Forman, where the traditional label and form itself supported the finding of a security in order to protect the purchaser's or seller's reasonable expectations, and (2) Forman requires application of the test formulated in Howey only in determining whether an ownership interest is an investment contract, and not to an examination of whether such an interest is stock.
In Titsch Printing, Inc. v. Hastings, 456 F.Supp. 445 (D.Colo.1978), the plaintiff purchased all of the shares of two corporations from the defendants. In ruling that the shares were stock within the definition of a security, the court found (1) that the shares possessed the common features of stock, (2) that, distinguishing Chandler, supra, the shares were not a mere indicium of ownership but were rather the substance of the purchase itself, since the corporate structure was used to direct additional business enterprises, and (3) that Forman did not require application of the Howey test to stock.
In Coffin v. Polishing Machines, Inc., 596 F.2d 1202 (4th Cir.), cert. denied, 444 U.S. 868, 100 S.Ct. 142, 62 L.Ed.2d 92 (1979), the plaintiff purchased 50% of the shares of the defendant and became its executive vice president. The district court, relying on Forman, found that the transaction did not involve a security. Since the plaintiff was to contribute substantially to the management of the corporation, the transaction did not meet the third aspect of the test derived from Howey. The Court of Appeals reversed, reading Forman as requiring application of the Howey test only when the stock involved lacks the significant characteristics typically associated with the named instrument. The court also noted that the defendant sold the stock in order to finance corporate expansion, and thus the transaction a sale of securities to raise capital for profit-making purposes "appears to be the very sort of transfer with which the federal securities laws are most concerned." Id. at 1204.
And in Miflin Energy Sources, Inc. v. Brooks, 501 F.Supp. 334 (W.D.Pa.1980), the court ruled that the purchase of all of the shares of a corporation was the purchase of a security. Since the shares possessed the common features of stock, the court reasoned, Forman did not require application of the economic reality test. The court also distinguished Chandler, supra, Bula, supra, and Dueker, supra, as cases involving the purchase of a business to which the stock was a mere indicium of ownership; the court found the substance of the transaction before it to be the transfer of the stock, with the ownership of the business a byproduct of the stock transfer.
Plainly the post-Forman decisions relied upon by the parties differ markedly over the proper interpretation to be given Forman. The issue is whether Forman adopts the Howey test as a general "economic reality" test to be applied to all purported securities, or whether Forman requires that instruments labelled or characterized as "stock" need only possess certain features *357 commonly associated with stock instruments to come within the ambit of the federal Acts. In my view, the former reading of Forman is the correct one. Several considerations point in this direction.
First, the Forman Court strongly, if not unequivocally, indicated that the three-pronged Howey test was to be broadly utilized in determining whether any interest is a security. The Court capsulized its analysis by equating "the ordinary concept of a security" with the Howey formulation of "`schemes devised by those who seek the use of the money of others on the promise of profits.'" Forman, supra, 421 U.S. at 848, 95 S.Ct. at 2058, quoting from Howey, supra, 328 U.S. at 299, 66 S.Ct. at 1103. And later, in discussing the Howey test, the Court noted that there is no distinction between an "investment contract" and an "instrument commonly known as a security." Id. 421 U.S. at 852, 95 S.Ct. at 2060. Finally, the Court specifically stated that the Howey test, "in shorthand form, embodies the essential attributes that run through all of the Court's decisions defining a security .... [W]hen a purchaser is motivated by a desire to use or consume the item purchased ... the securities laws do not apply." Id. at 852-53, 95 S.Ct. at 2060-61.
Second, the emphasis which plaintiffs place upon the absence of common features of stock in the Forman shares is misplaced. The context of that discussion in Forman was as an exception to the economic reality approach; the Court merely cautioned that the form of an interest may be material where it would lead a purchaser or seller reasonably to believe the securities laws would apply. In Forman, the Court concluded that the tenants-purchasers could not have reasonably relied upon the coverage of the Acts because, as evidenced by the absence of the common features of stock, the purchases were solely to acquire housing and not to invest for profit. Id. at 851, 95 S.Ct. at 2060. Furthermore, the scenario in Forman was one of many apparently unsophisticated purchasers contemplating an acquisition of "stock," and it is in that context that the Court warned that shares having the common features of stock may lead purchasers reasonably to rely upon the applicability of the federal securities laws.
Here, by comparison, despite the presence of the common features of stock in the transferred shares, there was manifestly no reasonable reliance by plaintiffs upon coverage by the Acts. The undisputed facts indicate that the concern of the parties was the transfer of a business, not the sale and purchase of stock. That the deal took the form of a stock transfer was merely a technicality dictated by a provision in a lease. Plaintiffs were certainly not misled as to the reality of the transaction by the form which it took. Furthermore, plaintiffs were represented throughout by able counsel, and negotiated and executed the agreement after the Court's decision in Forman and after several lower federal courts had specifically ruled against plaintiffs' position here. In short, this is not a case where the economic reality approach should be compromised because of the reasonable expectations of the plaintiffs.
Third, the approach urged by plaintiffs is inconsistent with the entire thrust of Forman. Forman teaches the disregard of form for economic substance. Id. at 848, 95 S.Ct. at 2058. As applied to the facts of Forman, that principle impelled the rejection of coverage under the Acts of shares simply because they carried the name of "stock." Here, to read Forman as endorsing application of the Acts to every acquisition which possesses the common features of stock, without regard to the economic reality of the underlying transaction, would be to retreat from the Forman principle and merely to substitute an alternative formal test for the one rejected by the Forman Court. Forman mandates that courts look harder at purported securities transactions before extending the securities laws to cover such transactions. And while it is no doubt true, as plaintiffs suggest, that adherence to the economic reality test may be more difficult in practice than a formal approach which automatically confers the status of a security upon shares exhibiting the common features of stock, Forman may *358 be fairly regarded as having nevertheless struck the balance in favor of a more precise delineation of those transactions truly covered by the Acts.
Fourth, the Forman decision was plainly grounded upon an attempt to restrict application of the Acts to their intended scope; i. e., "the sale of securities to raise capital for profit-making purposes, the exchanges on which securities are traded, and the need for regulation to prevent fraud and to protect the interest of investors." Forman, supra at 849, 95 S.Ct. at 2059. That approach is consistent with the definitional sections of the Acts, which define a security as any stock "unless the context otherwise requires." Here, where the reality of the transaction was the sale of an entire small business to be operated by the purchaser, the protective purpose of the federal legislation is not implicated. Here there is no publicly traded security nor any passive investor entrusting his capital to another in hopes of profit. To apply the federal securities laws to such a transaction simply because of the incidental transfer of stock would bring within the ambit of the Acts the transfer of any conceivable item, as long as the deal was structured as the purchase and sale of the stock of a corporation holding that item as an asset, even if the corporation held no other assets. The federal securities laws were not designed to usurp the common law where the reality of the transaction is the transfer of a tangible item for the use of the purchaser. Forman, supra at 852-53, 95 S.Ct. at 2060-61.
Fifth, as applied to the facts in this case, the post-Forman decisions are uniformly in accord with the result reached here. In Chandler, supra, Bula, supra, Dueker, supra, Frederiksen, supra, Anchor-Darling, supra, and Reprosystem, supra, as here, the plaintiffs purchased 100% of the stock of, and assumed complete control over, a business, under circumstances unequivocally indicating that the essence of the transaction was the purchase of a business, with the transfer of stock a mere indicium of ownership. Under such circumstances, each court found lacking under the economic reality test the indicium of an investment as distinguished from a commercial acquisition; i. e., the anticipation of profits to be derived from the entrepreneurial or managerial efforts of others.
By contrast, the authorities relied upon by plaintiffs are inapposite. In both Bronstein, supra, and Coffin, supra, the plaintiff acquired neither complete ownership nor complete control of the business in question; in both cases the purchase arguably had the characteristics of an investment. And in both Titsch, supra, and Miflin, supra, the courts specifically distinguished this case and certain of the decisions relied upon by defendant by finding that the reality of the transactions was the purchase and sale of stock, with the acquisition of a business being incidental thereto. Thus, while each of these opinions suggests a reading of Forman at odds with the interpretation of this court and of defendant's authorities, the specific results in these four decisions are not necessarily inconsistent with either the decision here or with the general application of the economic reality test.
Accordingly, the Court concludes that the shares purchased by plaintiffs here were not securities within the ambit of the federal Acts. No federal claim being presented, the first count of the complaint must be dismissed. There is no diversity of citizenship between the parties, and the exercise of jurisdiction over the remaining state and common law claims would be inappropriate, Forman, supra at 860 n.27, 95 S.Ct. at 2064 n.27, and counts two through five must also be dismissed.
Conclusion
Defendant's motion to dismiss the complaint is granted.
SO ORDERED.
NOTES
[1] Section 2(1) of the 1933 Act defines a "security" as
"unless the context otherwise requires ... any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, or, in general, any interest or instrument commonly known as a `security,' or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing."
Section 3(a)(10) of the 1934 Act defines "security" as
"unless the context otherwise requires ... any note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit, for a security, or in general, any instrument commonly known as a `security'; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, draft, bill of exchange, or banker's acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited."
In Forman, the Court indicated that, "for present purposes the coverage of the two Acts may be considered the same." Id. 421 U.S. at 847 n.12, 95 S.Ct. at 2058 n.12.
|
Order Michigan Supreme Court
Lansing, Michigan
July 29, 2016 Robert P. Young, Jr.,
Chief Justice
Stephen J. Markman
150643(98) Brian K. Zahra
Bridget M. McCormack
David F. Viviano
Richard H. Bernstein
PEOPLE OF THE STATE OF MICHIGAN, Joan L. Larsen,
Justices
Plaintiff-Appellee,
SC: 150643
v COA: 313670
Wayne CC: 94-000424-FH
BOBAN TEMELKOSKI,
Defendant-Appellant.
________________________________________/
On order of the Chief Justice, the second motion of plaintiff-appellee to extend the
time for filing its brief on appeal is GRANTED. The brief will be accepted as timely
filed if submitted on or before August 15, 2016.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
July 29, 2016
|
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-05-00247-CV
Ava Vercher, Appellant
v.
Walter Mortgage Company, Appellee
FROM THE COUNTY COURT AT LAW OF BURNET COUNTY
NO. C2953, HONORABLE WILLIAM R. SAVAGE, JUDGE PRESIDING
O R D E R
Appellant Ava Vercher filed a notice of appeal on April 27, 2005. On June 16, 2005,
appellant filed a motion to review the trial court’s order of June 8, 2005, setting the amount of
supersedeas in appellant’s appeal from this judgment against her in a forcible entry and detainer suit.
See Tex. R. App. P. 24.4; Tex. Prop. Code Ann. § 24.007 (West 2000). She seeks to lower the
amount set in the order and also requests a temporary order from this Court to stay the trial court’s
order authorizing the issuance of a writ of possession to appellee Walter Mortgage Company on June
21, 2005, if she fails to post the required bond by June 20, 2005. See Tex. R. App. P. 24.2(c)
(appellate court may issue any temporary orders necessary to preserve parties’ rights).
We grant appellant’s motion for temporary relief. The trial court order of June 8,
2005, setting the amount of supersedeas and authorizing the issuance of writ of possession on June
21, 2005, is stayed pending our resolution of the motion to review the amount of supersedeas;
appellee Walter Mortgage Company is not entitled to a writ of possession pending our review of
appellant’s motion. Walter Mortgage Company is requested to file a response to the motion to
review the supersedeas by Tuesday, June 28, 2005.
It is ordered June 17, 2005.
W. Kenneth Law, Chief Justice
Before Chief Justice Law, Justices B. A. Smith and Puryear
Do Not Publish
|
983 F.Supp. 812 (1997)
Simone M. MARTIN, Plaintiff,
v.
Kenneth S. APFEL,[1] Commissioner of Social Security, Defendant.
Civil No. 3-96-CV-90192.
United States District Court, S.D. Iowa, Davenport Division.
October 7, 1997.
*813 John A. Bowman, Davenport, IA, for Plaintiff.
Christopher D. Hagen, Asst. U.S. Atty., Des Moines, IA, for Defendant.
MEMORANDUM OPINION AND ORDER
PRATT, District Judge.
Plaintiff, Simone M. Martin, filed a Complaint in this court on December 11, 1996, seeking review of the Commissioner's decision to deny her claim for Supplemental Security Income benefits under Title XVI of the Social Security Act, 42 U.S.C. § 1381 (1994). This Court may review a final decision by the Commissioner. 42 U.S.C. § 405(g). For the reasons set out herein, the Commissioner's decision is reversed.
BACKGROUND
Plaintiff filed an application for Supplemental Security Income benefits on November 14, 1994. Her application was denied initially and upon reconsideration. After a hearing, Administrative Law Judge Jean M. Ingrassia (ALJ) issued a decision on January 5, 1996, denying benefits. On November 8, 1996, the Appeals Council denied Plaintiff's request for review. Plaintiff filed this Complaint on December 11, 1996.
STANDARD OF REVIEW
"The Commissioner's decision is conclusive upon this court if it is supported by relevant evidence a reasonable person might accept as adequate to support the decision, i.e. `substantial evidence.' Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971)." Stanfield v. Chater, 970 F.Supp. 1440, 1455 (E.D.Mo.1997). In Gavin v. Heckler, 811 F.2d 1195, 1199 (8th Cir.1987), the Court wrote:
In the review of an administrative decision, "[t]he substantiality of evidence must take into account whatever in the record fairly detracts from its weight." Universal Camera Corp. v. National Labor Relations Bd., 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951). Thus, the court must also take into consideration the weight of the evidence in the record and apply a balancing test to evidence which is contradictory. See Steadman v. Securities and Exchange Commission, 450 U.S. 91, 99, 101 S.Ct. 999, 1006, 67 L.Ed.2d 69 (1981). It follows that the only way a reviewing court can determine if the entire record was taken into consideration is for the district court to evaluate in detail the evidence it used in making its decision and how any contradictory evidence balances out.
ALJ'S FINDINGS
The ALJ, following the sequential evaluation (20 C.F.R. § 404.1520), found Plaintiff has not engaged in substantial gainful activity since September 26, 1994, the date on which the application was protectively filed. At the second step, the ALJ found that Plaintiff has severe impairments: dysthymia and panic disorder. At the third step, the ALJ found that none of Plaintiff's impairments are severe enough to meet or equal any of the impairments listed in Appendix 1, *814 Subpart P, Regulations No. 4. (Tr. at 19.) The ALJ found:
The claimant has the following residual functional capacity: She is not significantly limited in her abilities to remember locations and work-like procedures, understand very short and simple as well as detailed instructions, and remember short and simple instructions. She may be moderately limited, however in her ability to remember detailed instructions. In the area of sustained concentration and persistence, the claimant is not significantly limited in her ability to carry out very short and simple instructions. She is not significantly limited in her ability to sustain an ordinary routine without special supervision, work in coordination or proximity to others without being distracted by them, and make simple work related decisions. She is able to ask simple questions or request assistance and can interact appropriately with the general public. She might, however, be moderately limited in her abilities to accept instructions and respond appropriately to criticism as well as maintain socially appropriate behavior. (20 CFR [§ ]416.945)
(Tr. at 19-20.) At the fourth step of the sequential evaluation, the ALJ found that Plaintiff is unable to do her past relevant work. At the fifth step, the ALJ found that there is a significant number of jobs in the national economy that Plaintiff can perform. (Tr. at 20.)
DISCUSSION
In making the residual functional capacity finding, set out above, it is obvious that the ALJ relied on a report from Plaintiff's treating psychiatrist, Steven C. Chang, M.D. Indeed, the ALJ wrote: "These functional limitations are drawn from Dr. Chang's report at Exhibit 12." (Tr. at 18.) Dr. Chang, however, included limitations that the ALJ neglected to put into her findings. For example, Dr. Chang wrote that Plaintiff would be moderately limited in her ability to complete a normal work day and work week without interruptions from psychologically based symptoms. (Tr. at 172.) Although this limitation was included in the hypothetical question, (Tr. at 82,) the vocational expert testified, in response to questions from the claimant's representative, that if panic attacks happened once a week, "the job would disappear". (Tr. at 88.) The vocational expert testified that an acceptable absentee rate would be approximately two days per month. (Tr. at 87.) Plaintiff testified: "A panic attack could last anywhere from three hours to three days. But if I have an actual flashback, that puts me under for a week or more." (Tr. at 67) Plaintiff said the last time she had a panic attack was the week before the October 1995 hearing. (Id.) In his report of March 13, 1995, Dr. Chang stated that on January 26, his clinic received a call from staff at the Community Services office who reported that Plaintiff was having "anxiety attacks" and hiding under the bed. (Tr. at 171.)
At the hearing, testimony was taken from Sherry Boatman, a case manager at Vera French Mental Health Center. Ms. Boatman testified that Plaintiff is in a program for chronically mentally ill patients, and that she had been referred to the program by Dr. Chang. (Tr. at 73.) Chronically mentally ill, according to Ms. Boatman, means that the patient has been in the mental health system for over a year. (Tr. at 74.) Ms. Boatman said that Plaintiff attends a structured community support program at least three days a week. This program includes independent living skills classes, recreation and groups. (Tr. at 77-78.)
In McCoy v. Schweiker, 683 F.2d 1138, 1147 (8th Cir.1982) (en banc), the Court held the residual functional capacity which must be found is the ability to work "day in and day out, in the sometimes competitive and stressful conditions in which real people work in the real world." In Rhines v. Harris, 634 F.2d 1076, 1079 (8th Cir.1980), the Court wrote: "Employers are concerned with substantial capacity, psychological stability, and steady attendance ... It is unrealistic to think that they would hire anyone with the impairments of this claimant." The Court continued: "The Secretary need not find a specific job for a claimant. However, it must be shown that claimant can realistically perform in existing employment. Brinker v. *815 Weinberger, 522 F.2d 13, 18 (8th Cir.1975). The Secretary has failed to do so in this case."
It is the holding of this Court that the testimony of the vocational expert, the testimony of Sherry Boatman, the reports of Dr. Chang, and the testimony of the claimant herself, are evidence which detract from the substantiality of evidence in support of the decision of the ALJ. Plaintiff met her burden of proving that she is unable to do her past relevant work. The burden, therefore, shifted to the Commissioner to prove that Plaintiff has a residual functional capacity for other work and that other work exists in significant number for such a person. McCoy v. Schweiker, 683 F.2d at 1147; O'Leary v. Schweiker, 710 F.2d 1334, 1338 (8th Cir.1983). The finding that Plaintiff has a residual functional capacity for other work is not supported by substantial evidence on the record as a whole. A remand to take additional testimony would only delay the receipt of the benefits to which Plaintiff is entitled. An award of benefits is, therefore, the appropriate remedy. Gavin v. Heckler, 811 F.2d at 1201.
Attached to Plaintiff's Brief are 51 pages of treatment notes from the Vera French Community Mental Health Center. Plaintiff's attorney claims these records were sent to the Appeals Council on October 16, 1996. The Appeals Council issued it's decision on November 8, 1996. The medical records do not appear in the record of the case provided to the Court. For that reason, the Court did not consider these medical records when making its decision. The Court, however, is quite disturbed that these records were not provided to the ALJ prior to her decision. Under the Administrative Procedures Act, the substantive law that ALJs must apply, as well as the substantial decisional law that they must apply, ALJs have a difficult, if not impossible, job. The ALJ is in the "peculiar position of acting as an adjudicator while also being charged with developing the facts." Landess v. Weinberger, 490 F.2d 1187, 1189 (8th Cir.1974). It is incumbent upon attorneys who represent the disabled that they understand ALJs should not have to secure evidence that is easily accessible to the lawyer and claimant.
At the hearing, the ALJ pointed out that she was under the impression Plaintiff had only seen her doctor on two occasions and was told by the Case Manager that Plaintiff sees the doctor on a regular basis. (Tr. at 75.) The Court does not understand why the ALJ did not, at that moment, instruct Plaintiff's representative to provide copies of the treatment records within a reasonable amount of time. An ALJ has the duty to fully and fairly develop the record, even if a claimant is represented by an attorney. Warner v. Heckler, 722 F.2d 428, 431 (8th Cir.1983). Neither is Plaintiff's counsel without blame. The Court takes notice that counsel represents numerous Social Security and Supplemental Security Income claimants. Surely, the most basic service a representative can perform is to provide medical records to the ALJ in a timely manner. Claimants desperately need the benefits for which they apply. They seek the services of attorneys who will assist them to prosecute their claims as effectively and expeditiously as possible. The practice of Social Security law is not a game of cat and mouse. Medical records should be provided to the agency as early as possible. It does no one any good not the claimant, not the ALJ, and not the Court for the attorney to fail to procure and submit records that will support the client's case. If an attorney has difficulty obtaining medical records from a particular provider, the ALJ and the staff at the Office of Hearings and Appeals can often provide the necessary incentive to the provider (and if necessary compel the production of documents) so that the record is complete at the time of a decision. For this system to work correctly, the ALJ and the attorney need to communicate, in a non-adversarial manner, so the best interest of the claimant is served. As the Court said in Battles v. Shalala, 36 F.3d 43, 44 (8th Cir.1994):
"... an administrative hearing is not an adversarial proceeding." Henrie v. Dept. of Health & Human Serv., 13 F.3d 359, 361 (10th Cir.1993). "[T]he goals of the Secretary and the advocates should be the same: that deserving claimants who apply *816 for benefits receive justice." Sears v. Bowen, 840 F.2d 394, 402 (7th Cir.1988).
The Iowa Code Of Professional Responsibility For Lawyers, Canon 7, EC 7-15 states:
The nature and purpose of proceedings before administrative agencies vary widely. The proceedings may be legislative or quasi-judicial or a combination of both. They may be ex parte in character, in which event they may originate either at the instance of the agency or upon motion of an interested party. The scope of an inquiry may be purely investigative or it may be truly adversary looking toward the adjudication of specific rights of a party or of classes of parties. The foregoing are but examples of some of the types of proceedings conducted by administrative agencies. A lawyer appearing before an administrative agency, regardless of the nature of the proceeding it is conducting, has the continuing duty to advance the cause of the lawyer's client within the bounds of the law. Where the applicable rules of the agency impose specific obligations upon a lawyer, it is the lawyer's duty to comply therewith, unless the lawyer has a legitimate basis for challenging the validity thereof.
(Emphasis added)
The decision of the ALJ, which became the final decision of the Commissioner, is reversed. The Commissioner is ordered to compute and pay Plaintiff the benefits to which she is entitled.
The judgment to be entered will trigger the running of the time in which to file an application for attorney's fees under 28 U.S.C. § 2412(d)(1)(B) (Equal Access to Justice Act). See Shalala v. Schaefer, 509 U.S. 292, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993).
NOTES
[1] President Clinton appointed Kenneth S. Apfel, to serve as Commissioner of Social Security, effective September 19, 1997, to succeed John J. Callahan, Ph.D. Pursuant to Rule 25(d)(1) of the Federal Rules of Civil Procedure, Kenneth S. Apfel is hereby substituted for John J. Callahan as defendant in this action.
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121 N.H. 130 (1981)
JOHN E. ARNOLD & a.
v.
GEORGE B. CHANDLER & a.
No. 79-221.
Supreme Court of New Hampshire.
March 11, 1981.
*131 Brown and Nixon, of Manchester (David W. Hess on the brief and orally), for the plaintiffs.
Stark & Peltonen, of Manchester (John E. Peltonen on the brief and orally), for the defendants E. Leo Kanteres and MacArthur, Inc.
BROCK, J.
The plaintiffs in this case appeal from the denial of their petition for equitable relief and an injunction to enforce certain land use restrictions which they claim apply to the residential subdivision in which they and the defendant Chandlers reside. Specifically, the Arnolds sought to enjoin their neighbors, the Chandlers, from conveying a fifty-foot right-of-way across their lot to the other defendants, who would use the right-of-way for an access road to five residential building lots which they wish to develop adjacent to, but outside, the subdivision. Trial, with a view, was held before a Master (Earl J. Dearborn, Esq.) and resulted in a recommendation that injunctive relief be denied. Randall, J., approved the master's recommendation and the plaintiffs appealed to this court. We affirm.
The Chandlers' property is located in a housing development known as the "Jamestown" subdivision in Bedford. The plaintiffs Arnold, Roy and Dieter own adjacent lots in the subdivision. According to the record, the area is a secluded, residential neighborhood, and the road on which the parties reside comes to a dead-end.
The Jamestown subdivision was originally owned and developed by Armand and Shirley Rivard. In 1970, the Rivards recorded a declaration of restrictions purporting to place restrictions on the use of land in the subdivision. Although the Rivards were the record owners of the land, the restrictions were recorded under the name of a corporation that they owned, Ardon Corporation. At the time when the Rivards intended to develop a lot, they would convey it to the corporation, which would build the home and sell it to the home buyer. Five lots were developed in this manner. Because *132 the declaration of restrictions was recorded before the corporation took title to any of the lots in the subdivision, the conveyancing procedures employed by the Rivards were, at best, questionable. Further complicating things, the Rivards also sold two lots directly to individual buyers before the restrictions had been recorded. In addition, even after the declaration of restrictions had been recorded, the Rivards sold another five lots directly to individuals desiring to build their own homes, without conveying them first to Ardon Corporation. Thus, as to at least twelve of the thirty-six lots in the Jamestown subdivision, serious questions arise as to the applicability of the declaration of restrictions recorded in the name of Ardon Corporation.
On June 5, 1973, the Rivards elected to employ a more practical procedure and recorded, under their own names, a second declaration of restrictions. This declaration specifically applied to all of their lots in the Jamestown subdivision which remained unsold on that date. Five months thereafter, the Rivards sold the lot that now belongs to the defendant Chandlers to Harold and Frances Mokler. The deed from the Rivards to the Moklers, however, made no reference to either the restrictions or any instrument that referred to them. This same lot was conveyed a number of times before the Chandlers acquired title to it in 1976, but none of the intervening deeds ever referred to the declaration of restrictions. In addition, the master found that the Chandlers never had actual notice of the restrictions.
The deeds by which the plaintiffs Roy, Arnold and Dieter acquired title to their respective lots, however, all refer to the declaration of restrictions recorded by the Rivards on June 5, 1973.
In 1978, the Chandlers decided that they would like to build a tennis court on their lot. In order to build the tennis court, it was necessary that they apply for a variance from the provisions of the Bedford zoning ordinance because their lot was undersized and their plan did not comply with side-lot requirements. The Chandlers applied for a variance but the abutting landowners, the plaintiffs Arnold, objected and the requested variance was denied.
Shortly thereafter, on December 20, 1978, the Chandlers entered into an agreement with the defendants, Leo Kanteres and MacArthur, Inc., who own approximately 190 acres of land adjoining the Chandlers and the Jamestown subdivision, to sell a fifty-foot right-of-way across their property in return for sufficient land to enable the Chandlers to build a tennis court without having to seek a variance. The Kanteres-MacArthur, Inc., land is not otherwise land-locked, *133 but the right-of-way would provide a much more economical means of access to part of their acreage than any other alternative.
Upon learning of this agreement, the plaintiffs brought this action, asserting that both of the recorded declarations of restrictions bar the proposed conveyance of the right-of-way.
[1] Because the first declaration of restrictions was recorded under the name of Ardon Corporation, which never had title to the Chandlers' land, we conclude that it is not relevant to the issues to be decided in this case.
[2] The declaration of restrictions recorded in the name of the Rivards in June 1973 is another matter. It was recorded at a time when the Rivards held title to the lot in question and the grantor's index clearly indicates that it is a declaration of restrictions applicable to the Jamestown subdivision. A title search would have revealed not only the existence of the restrictions, but also their application to the lot in question. See Frost v. Polhamus, 110 N.H. 491, 493, 272 A.2d 596, 597 (1970).
Reference to the declaration shows that its purpose "is to insure the use of the Jamestown subdivision ... for attractive private residential purposes only...." It applies to all of the lots in Jamestown not sold by the Rivards prior to June 5, 1973. Specific provisions prohibit the subdivision of existing lots but allow for adjacent lot owners to modify their common boundaries so long as the total area of the individual lots remains the same. Numerous other restrictions, not relevant to the case before us, are set forth in the declaration. In addition, the declaration purports to restrict the uses to which the lots may be put even if the deeds conveying them do not specifically refer to the declaration.
[3, 4] The plaintiffs argue that the restrictions are enforceable both as real covenants and as equitable servitudes. "Broadly speaking, a `covenant' is an agreement between two or more persons to do or permit the doing of a particular act. Strictly speaking, it is an agreement by deed to do or not to do some particular act." 7 G. THOMPSON ON REAL PROPERTY § 3150 (1962 Replacement) (emphasis added); see Hanslin v. Keith, 120 N.H. 361, 363, 415 A.2d 329, 330 (1980). Because no such agreement appears in any of the deeds conveying the land now owned by the defendants, we hold that the restrictions are not enforceable as restrictive or "real covenants" running with the land. See Traficante v. Pope, 115 N.H. 356, 358-59, *134 341 A.2d 782, 784 (1975). An equitable servitude, however, may arise when there is a "general scheme of development and binds an owner who acquired the land with notice of a restriction on it." Hanslin v. Keith, supra at 363, 415 A.2d at 330. See Traficante v. Pope, supra at 359, 341 A.2d at 784. Thus, even in the absence of an agreement by deed, the restrictions may still be enforced as an equitable servitude against the purchaser or subsequent purchasers if they "acquired the land with notice of the restrictions on it. [Citations omitted.]" Traficante v. Pope, supra at 359, 341 A.2d at 784.
Here, the Rivards recorded the "Jamestown" restrictions and later conveyed the lot to the Chandlers' predecessors in title, the Moklers. The deed made no reference to the restrictions, nor does the evidence presented establish that the Moklers and Rivards made a mutual promise concerning the restrictions. Indeed, the evidence before the trial judge did not compel a finding that the Moklers had actual notice of the restrictions, and the master made no such finding. However, because the restrictions related to a general scheme of development and we are dealing with a "subsequent taker who acquired the land with [constructive] notice of the restrictions on it ..." an equitable servitude is created. See Traficante v. Pope, supra at 359, 341 A.2d at 784.
[5] "Enforcement of such a right in equity is clearly permissible." Johnson v. Shaw, 101 N.H. 182, 187, 137 A.2d 399, 402 (1957). The decision to enforce an equitable servitude by granting injunctive relief, however, "is a matter within the sound discretion of the [trial court] exercised upon a consideration of all the circumstances of each case and controlled by established principles of equity." Varney v. Fletcher, 106 N.H. 464, 467-68, 213 A.2d 905, 908 (1965); see Johnson v. Shaw, supra at 188-89, 137 A.2d at 403-04 (1957). "Sound discretion means `a discretion in consonance with well established principles of law, one that is neither arbitrary, vague nor fanciful.'" Hanslin v. Keith, supra at 364, 415 A.2d at 331. We will uphold the master's decision unless it is apparent from the record that he abused his discretion.
[6, 7] In this case, after a view and hearing all the evidence, the master found that the proposed roadway, if limited to serve a maximum of five residential lots, would not "interfere with the carrying out of the general plan of the area and the purposes of the restrictions." He also found that an earlier plan of the development *135 showed a road would eventually be built in the same vicinity as the one now proposed. While these findings are sufficient to support the result reached by the master, there remains a flaw in his decision. The master ruled that the Chandlers' lot was not subject to an equitable servitude, and we have held otherwise herein. The determinative question in cases where a party seeks to enforce an equitable servitude is whether the injunctive relief requested "would be equitable in view of all the circumstances of the particular case." See Johnson v. Shaw, 101 N.H. 182, 184, 137 A.2d 399, 403-04 (1957), and the trial court did not expressly make such a finding here. It did, however, order that the proposed access road be limited to serve a maximum of five residential lots, concluding that a limited access road would not "interfere with the carrying out of the general plan of the area and the purposes of the restrictions." We regard this finding and order as being the equivalent of a determination by the trial court that its order was "equitable in view of all the circumstances" of the case. Based upon our review of the record, we can find no fault in such a determination. Accordingly, we affirm.
Affirmed.
KING, J., did not sit; the others concurred.
|
811 S.W.2d 319 (1991)
306 Ark. 353
STATE of Arkansas, Appellant,
v.
Jesse C. MARTINEZ, Jr. and Nadine C. Martinez, Appellees.
No. CR 91-75.
Supreme Court of Arkansas.
July 15, 1991.
*320 Jeff Vining, Asst. Atty. Gen., Little Rock, for appellant.
Jeffrey E. Levin, Clarksville, for appellees.
CORBIN, Justice.
The state brings this interlocutory appeal from an order of the Johnson Circuit Court granting appellees' pretrial motion to suppress evidence. Ark.R.Crim.P. 36.10. The sole issue presented in this appeal is whether the trial court erred in ruling the evidence seized be suppressed due to an invalid nighttime search warrant. We affirm.
In reviewing a trial court's decision to grant a defendant's motion to suppress evidence, we make an independent determination based on the totality of the circumstances and reverse the trial court's decision only if it is clearly against the preponderance of the evidence. State v. Blevins, 304 Ark. 388, 802 S.W.2d 465 (1991).
Our review of the evidence reveals that, on four different occasions during the month prior to the July 27, 1990 arrest of both appellees, Officer Hanes of the Fifth Judicial Drug Task Force purchased marijuana from appellee Jesse Martinez at the Martinez property, which consists of both the Martinez residence and a Martinezowned business entitled Marty's Gun Shop. On July 26, 1990, Jesse Martinez contacted Officer Hanes regarding the purchase of a quarter pound of marijuana. At this point, Officer Hanes initiated steps to obtain a search warrant. He planned to execute the above-referenced purchase and then search the Martinez property. On July 27, 1990, Officer Hanes met with Chief Deputy Dorney of the Johnson County Sheriff's Office and Judge Len Bradley to obtain the search warrant. Officer Hanes was sworn and signed the prepared affidavit. The search warrant was then issued at approximately 6:45 p.m. Because Ark.R.Crim.P. 13.1(b) requires the application for a search warrant be supported by one or more affidavits or recorded testimony, we do not consider any unrecorded oral testimony that may or may not have been given. Thus, we only consider the information contained in the affidavit.
The affidavit was dated July 27, 1990, and recited that arrangements had been made to purchase a controlled substance from Jesse Martinez on that day. The affidavit also stated that it was believed Martinez stored the controlled substance at his residence and that the proposed sale was expected to occur there.
The state argues the search warrant issued in this case contained the appropriate language that the warrant was to be executed "at any time of the day or night" and therefore, the trial court erred in granting the motion to suppress. With this argument we cannot agree.
It is well-settled that an affidavit must set out facts showing reasonable cause to believe that circumstances exist which justify a nighttime search. State v. Broadway, 269 Ark. 215, 599 S.W.2d 721 (1980); Harris v. State, 262 Ark. 506, 558 S.W.2d 143 (1977). Ark.R.Crim.P. 13.2(c) provides that:
(c) Except as hereafter provided, the search warrant shall provide that it be executed between the hours of six a.m. and eight p.m., and within a reasonable time, not to exceed sixty (60) days. Upon a finding by the issuing judicial officer of reasonable cause to believe that:
(i) the place to be searched is difficult of speedy access; or
(ii) the objects to be seized are in danger of imminent removal; or
(iii) the warrant can only be safely or successfully executed at nighttime or under circumstances the occurrence of which is difficult to predict with accuracy;
the issuing judicial officer may, by appropriate provision in the warrant, authorize its execution at any time, day or night, and within a reasonable time not to exceed sixty (60) days from the date of issuance.
*321 The affidavit in this case does not set out facts showing reasonable cause for Judge Bradley to have found that any of the three circumstances quoted above existed. The affidavit merely provides that four previous sales of marijuana had been made by Jesse Martinez to Officer Hanes, that controlled substances were believed to be stored at the Martinez residence, and that another purchase was scheduled to occur at the residence that day. The affidavit is silent with respect to anything regarding reasonable cause to believe the marijuana would be destroyed or removed before the next morning. Thus, we hold it was error for the nighttime search warrant to have been issued.
Our holding is consistent with Hall v. State, 302 Ark. 341, 789 S.W.2d 456 (1990), and State v. Broadway, supra. Both Hall and Broadway have facts similar to the facts in the present case. In Hall, supra, we held that an affidavit reciting simply that illegal drugs were at appellant's residence and that a confidential informant had purchased marijuana there within the last seventy-two hours did not state facts sufficient to support the issuance of a nighttime search warrant. The Hall case is controlling of the present case in all respects.
Although we hold the issuance of this search warrant was in violation of Ark.R.Crim.P. 13.2(c), a motion to suppress will not be granted unless the violation is "substantial." Ark.R.Crim.P. 16.2(e). "The nighttime intrusion into a private home is the violation of an important interest, and from the record before us there is nothing to indicate that the evidence would not still have been there the next morning." Hall, 302 Ark. at 344, 789 S.W.2d at 458. Consistent with Hall, we hold the intrusion into appellees' home, which began at approximately 9:00 p.m. and continued through 4:00 p.m. the next day, was a substantial violation of our rules.
The state urges us to apply the good faith exception to the warrant requirements which was first enunciated in United States v. Leon, 468 U.S. 897, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984). We have stated that we would apply this exception to violations of our state laws given the appropriate case. Hall, supra. However, as was also determined in Hall, this is not the appropriate case. See Hall, supra, 302 Ark. at 344, 789 S.W.2d at 458-59. In the case at bar, Chief Deputy Dorney testified he was somewhat familiar with our rules of criminal procedure regarding nighttime searches. There can be no doubt then that he knew the search which began at approximately 9:00 p.m. was conducted in violation of our rules. The search violated our rules in that it was conducted, almost one hour after the 8:00 p.m. time constraint, pursuant to an affidavit that did not specify any of the three conditions for issuing a nighttime warrant. Because the executing officers did indeed have knowledge of our rules, we need not address the issue of whether the issuing judicial officer remained neutral and detached and refrained from acting as a rubberstamp for the law enforcement officers. Id. Thus, we decline to apply the good faith exception to this violation of our rules of criminal procedure.
In summary, it was error to issue the nighttime search warrant. The good faith exception is not applicable to this case. Based on our review of the evidence, we cannot say the trial judge's decision to grant the motion to suppress was against the preponderance of the evidence. Hall, supra, is a case with strikingly similar facts to this case and we are bound by that decision. Accordingly, the trial court's suppression order is affirmed.
HOLT, C.J., and HAYS, J., dissent.
HAYS, Justice, dissenting.
It is, I believe, a mistake to decide this case from the standpoint of whether the search warrant meets the requirements of a nighttime search. The correct approach, I suggest, is to determine whether the manner and means by which the search warrant was executed constitutes a substantial violation of our rules governing search and seizure of evidence. Ark. R.Crim.P. 16.2. It is, after all, only unreasonable searches that are offensive to the *322 Fourth Amendment. Harris v. United States, 331 U.S. 145, 67 S.Ct. 1098, 91 L.Ed. 1399 (1947). In determining whether the violation was substantial we are obliged to consider all the circumstances, including the extent of deviation from lawful conduct by the officers, the extent to which the violation was willful, the importance of the particular interest violated, the extent to which privacy was invaded. Rule 16.2. When the circumstances of this case are examined, there is no basis for a conclusion that the officers acted improperly in any manner or that the search was in any sense unreasonable.
In the late morning of July 27, 1990, the day the warrant was issued, appellee Jesse Martinez called Officer Hanes, acting as an undercover agent, to say "I've got plenty of what you want" (referring to marijuana). Hanes asked if Martinez could handle a quarter pound and Martinez said "Yeah, that would be easy." Hanes began the steps to secure a search warrant, which was issued at 6:45 p.m., well within the 6:00 a.m. to 8:00 p.m. time frame of Ark. R.Crim.P. 13.2(c). It is evident the officers assumed the warrant would be executed during daytime hours, but when they called Martinez to arrange to come to his house, ostensibly to make the purchase, he put them off on the grounds that he had company. Martinez arranged to meet them near the Mulberry River Bridge on Highway 103, some distance from his home. By the time Martinez arrived it was 8:10 p.m. and so it was 8:48 before the officers could make the arrest and drive to Martinez's house to begin the search. It is clear the delay was attributable not to improper conduct by the officers, but to arrangements directed by the appellee and which the officers were powerless to countermand without arousing his suspicions.
Thus, the issue is simply whether under all the circumstances a delay of forty-eight minutes is a "substantial violation" of Rule 13.2(c). The majority rely on Hall v. State, 302 Ark. 341, 789 S.W.2d 456 (1990) and State v. Broadway, 269 Ark. 215, 599 S.W.2d 721 (1980). But the search in Hall was executed between 1:00 a.m. and 3:00 a.m., and Broadway was the product of a sharply divided court and the majority opinion does not tell us what time the warrant was executed, only that it was a nighttime search without the required grounds. But 8:48 on a July evening is hardly the equivalent of 1:00 a.m. It is still light, and there is no evidence these appellees had retired for the evening. In short, this case more nearly resembles Brothers v. State, 261 Ark. 64, 546 S.W.2d 715 (1977) and James v. State, 280 Ark. 359, 658 S.W.2d 382 (1983). In Brothers a search pursuant to a warrant began "about 8:00 p.m. and was completed as soon thereafter as possible." This court found that not to be a material violation of Rule 13.2(c):
In this particular case the failure to strictly comply with Rule 13.2(c) was not willful, no additional invasion of privacy occurred, and appellant suffered no prejudice. Therefore, suppression was not warranted.
In James the search commenced at 7:10 p.m. but was interrupted so that the warrant could be amended, which was not reissued until 9:12 p.m. Similarly, in United States v. Roller, 559 F.Supp. 539 (E.D. of Ark. 1983), the federal district court, applying Arkansas law in the interpretation of Rule 13.2(c), denied a motion to suppress where the warrant was signed at 7:55 p.m. and arrived at approximately 8:10 p.m. at the defendant's home. Citing the language quoted from Brothers, supra, the district judge wrote:
Any failure to strictly comply with Rule 13.2(c) did not violate the policy of prohibiting unexpected searches in the middle of the night, was only a matter of minutes, and did not cause a surprise intrusion into defendant's privacy. There was no substantial violation of Rule 13.2(c), of federal policy, or the United States Constitution.
Appellees have made no attempt to show prejudice [Pridgeon v. State, 262 Ark. 428, 559 S.W.2d 4 (1977) ] or that the relatively short delay in executing this warrant created any added intrusion into their privacy, or that the delay was attributable to anything other than the instructions interposed by the appellee Jesse Martinez. It is exactly *323 this sort of situation to which United States v. Leon, 468 U.S. 897, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984) was intended to apply.
HOLT, C.J., joins.
|
Filed 4/22/13 Cason v. Cason CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
GREGORY B.H. CASON, D059676
Plaintiff and Appellant,
v. (Super. Ct. No. ECU01642)
THERESA A.H. CASON et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Imperial County, Barrett J.
Foerster and Donal B. Donnelly, Judges. Affirmed.
Plaintiff Gregory B.H. Cason (Plaintiff) appeals a judgment apportioning attorney
fees and costs incurred in his partition action against defendants Theresa A.H. Cason,
also known as Theresa H. Schoneman, Donald S. Cason, David B.H. Cason and Diane
Cason, as trustees of the David Cason and Diane Cason 2000 Family Trust (together
Defendants). On appeal, Plaintiff contends the trial court abused its discretion by
apportioning attorney fees and costs incurred in the partition action for the common
benefit of the parties on an equitable basis of 50 percent to Plaintiff and 50 percent to
Defendants.
FACTUAL AND PROCEDURAL BACKGROUND
On October 30, 2003, Plaintiff filed a complaint requesting partition of certain real
property owned by Plaintiff and Defendants in cotenancy, commonly known as "Elder
Canal, Gates 9 & 10" and consisting of about 160 acres (Property). The complaint
alleged Plaintiff and each of the three Defendants owned an undivided one-fourth interest
in the Property. It sought partition by sale of the Property, alleging a sale would be more
equitable than division in kind because the Property is farm land and too small to be
divided into parcels that can be economically farmed. Defendants answered the
complaint, opposing partition by sale and, in the event the trial court ordered partition of
the Property, requesting that Plaintiff be allotted a parcel according to his one-fourth
interest and Defendants be allotted a parcel according to their collective three-fourths
interest.
On May 11, 2005, the trial court entered an interlocutory judgment directing
partition of the Property according to the parties' interests and ordering that a referee be
appointed to recommend division and partition the Property. The court further ordered
that "if a division of the [Property] is impracticable or that a sale of the [Property], or any
portion thereof, would be more equitable to the parties, the referee shall so state in the
report and set forth recommendations as to the sale of [the Property], or portion thereof,
and the Court shall enter such further orders as the Court may deem proper and
appropriate."
2
The appointed referee subsequently issued a report finding there were four
plausible methods to partition the Property: (1) sell the Property and distribute the
proceeds to the parties on a pro rata basis; (2) have those parties who do not want to sell
the Property purchase the interests of those parties who do want to sell it; (3) divide the
Property into one 120-acre parcel and one 40-acre parcel; and (4) divide the Property into
four 40-acre parcels. The referee recommended the fourth option as the best long-term
solution. After receiving the responses of the parties to the referee's report, the trial court
ordered the referee to conduct a further evaluation of the Property. In his second report,
the referee recommended that Plaintiff be awarded the southeast quarter of the Property
because of drop box and harvesting issues.
On November 21, 2006, the trial court issued an order directing the Property to be
partitioned in kind into four parcels of 40 acres each within one year and, if the partition
was not accomplished within one year, the Property was to be partitioned into one parcel
consisting of the southeast one-fourth and one parcel consisting of the remainder of the
Property. However, a subsequent survey apparently showed the Property consisted of
only about 159, and not 160, acres. Because zoning ordinances of Imperial County
(County) require farm land parcels to be at least 40 acres, County apparently rejected the
proposed division of the Property into four separate 40-acre parcels.
On April 3, 2008, based on counsel's representations that County rejected partition
of the Property into four separate parcels, the trial court issued an order directing division
of the Property into two parcels: (1) a southeast quarter consisting of 40 acres in
compliance with County's zoning ordinances; and (2) the remaining property (consisting
3
of about 119 acres). The 40-acre parcel was awarded to Plaintiff and the other parcel was
awarded to Defendants. The court reserved jurisdiction to consider a motion on the issue
of whether owelty should be awarded.
The parties stipulated to the appointment of an appraiser, Matt Ramsey, to report
on the amount of owelty Plaintiff may owe Defendants. The appraiser determined
Plaintiff's 40-acre parcel was worth $350,000 and Defendants' 119-acre parcel was worth
$680,000. Plaintiff objected to the appraisal and requested that owelty be determined
based instead on an appraisal made by William S. Smith. Smith's appraisal valued
Plaintiff's parcel at $5,200 per acre and Defendants' parcel at $5,000 per acre. Following
an evidentiary hearing, the trial court issued an order finding Plaintiff owed Defendants
owelty of $7,250, adopting the valuations in Smith's appraisal.
Pursuant to Code of Civil Procedure sections 874.010 and 874.040,1 Plaintiff filed
a motion for apportionment of attorney fees and costs incurred in the partition action.
Defendants filed a motion for apportionment of costs only and requested those costs be
apportioned evenly between Plaintiff (50 percent) and Defendants (50 percent).
Defendants opposed Plaintiff's motion for apportionment of attorney fees and costs
because they were not incurred for the common benefit of the parties.
On September 2, 2010, the trial court heard counsel's arguments on both motions.
The court granted Plaintiff's request for attorney fees and costs, which "shall be equitably
apportioned between the parties with Plaintiff being responsible for fifty percent thereof
1 All statutory references are to the Code of Civil Procedure.
4
and the remaining three defendants being responsible for the remaining fifty percent."
The Court found that "though all parties enjoyed a common benefit in the pursuit of the
partition action, that benefit was not equal between them. Only Plaintiff received a
complete partition of his interest. The remaining [D]efendants' interests in the subject
real property have not been individually partitioned." The court set a further hearing on
Defendants' motion for apportionment of attorney fees, if filed, and their motion for
apportionment of costs.
Defendants subsequently filed a motion for apportionment of attorney fees and
costs, requesting they be apportioned evenly between Plaintiff (50 percent) and
Defendants (50 percent). Plaintiff opposed their motion, arguing the motion was filed
late. On March 9, 2011, the court issued a written order apportioning attorney fees and
costs incurred by the parties in the partition action, to be apportioned 50 percent to
Plaintiff and 50 percent to Defendants. On May 9, 2011, the court entered a final
judgment partitioning the Property into two parcels as described above and apportioning
the parties' attorney fees and costs 50 percent to Plaintiff and 50 percent to Defendants. 2
Plaintiff timely filed a notice of appeal.
2 Because Plaintiff does not dispute the trial court's determination of the amounts of
attorney fees and costs incurred for the common benefit of the parties, we need not, and
do not, set forth the specific amounts apportioned by the court.
5
DISCUSSION
I
Standard of Review
"The standard of review on issues of attorney's fees and costs is abuse of
discretion. The trial court's decision will only be disturbed when there is no substantial
evidence to support the trial court's findings or when there has been a miscarriage of
justice. If the trial court has made no findings, the reviewing court will infer all findings
necessary to support the judgment and then examine the record to see if the findings are
based on substantial evidence." (Finney v. Gomez (2003) 111 Cal.App.4th 527, 545, fns.
omitted.)
When an appellant asserts there is insufficient evidence to support a factual
finding, we apply the substantial evidence standard of review, requiring two steps. "First,
one must resolve all explicit conflicts in the evidence in favor of the respondent and
presume in favor of the judgment all reasonable inferences. [Citation.] Second, one
must determine whether the evidence thus marshaled is substantial. While it is
commonly stated that our 'power' begins and ends with a determination that there is
substantial evidence [citation], this does not mean we must blindly seize any evidence in
support of the respondent in order to affirm the judgment. . . . [Citation.] '[I]f the word
"substantial" [is to mean] anything at all, it clearly implies that such evidence must be of
ponderable legal significance. Obviously the word cannot be deemed synonymous with
"any" evidence. It must be reasonable . . . , credible, and of solid value . . . .' [Citation.]
The ultimate determination is whether a reasonable trier of fact could have found for the
6
respondent based on the whole record." (Kuhn v. Department of General Services (1994)
22 Cal.App.4th 1627, 1632-1633, fns. omitted.) "[T]he power of an appellate court
begins and ends with the determination as to whether, on the entire record, there is
substantial evidence, contradicted or uncontradicted, which will support the
determination, and when two or more inferences can reasonably be deduced from the
facts, a reviewing court is without power to substitute its deductions for those of the trial
court. If such substantial evidence be found, it is of no consequence that the trial court
believing other evidence, or drawing other reasonable inferences, might have reached a
contrary conclusion." (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.)
II
Trial Court's Apportionment of Attorney Fees and Costs
Plaintiff contends the trial court abused its discretion by apportioning attorney fees
and costs incurred for the common benefit of the parties on an equitable basis 50 percent
to Plaintiff and 50 percent to Defendants rather than in proportion to the interests of the
parties in the property. He asserts there is insufficient evidence to support the court's
apportionment of attorney fees and costs.
A
Section 874.040 provides: "Except as otherwise provided in this article, the court
shall apportion the costs of partition among the parties in proportion to their interests or
make such other apportionment as may be equitable." The Law Revision Commission
Comment to section 874.040 states:
7
"Although normally the costs of partition are apportioned in
proportion to the interests of the parties, there may be cases in which
some other arrangement will be equitable. Where litigation for the
common benefit arises among only some of the parties, or where the
interests of the parties in all items, lots, or parcels of property are not
identical, the court may segregate the costs of partition to the extent
practicable and apportion a part among particular parties only."
(Cal. Law Revision Com. com., 17A West's Ann. Code Civ. Proc.
(1980 ed.) foll. § 874.040, p. 586.)
Section 874.010 provides in pertinent part: "The costs of partition include: [¶] (a)
[r]easonable attorney's fees incurred or paid by a party for the common benefit."
"[S]ection 874.040 broadly allows the trial court to 'make such other
apportionment as may be equitable.' " (Lin v. Jeng (2012) 203 Cal.App.4th 1008, 1024.)
"There is no ambiguity in the language of section 874.040. It simply states that the trial
court must apportion the costs incurred in a partition action based upon either the parties'
interests in the property, or equitable considerations. The statute's broad language does
not limit the trial court's equitable discretion . . . ." (Id. at p. 1025.)
B
After the trial court issued its partition and owelty orders, Plaintiff filed a motion
for apportionment of attorney fees and costs incurred in the partition action. Defendants
filed a motion for apportionment of costs only, arguing attorney fees were not incurred
for the common benefit of the parties as required for apportionment. Defendants
requested those costs be apportioned evenly between Plaintiff (50 percent) and
Defendants (50 percent). Defendants opposed Plaintiff's motion for apportionment of
attorney fees and costs, arguing they were not incurred for the common benefit of the
parties.
8
The trial court heard counsel's arguments on both motions. Plaintiff argued the
court should apportion attorney fees and costs in proportion to the parties' interests in the
Property. Defendants, in turn, argued the parties should bear their own attorney fees
because they were not incurred for the common benefit of the parties. The trial court
stated it was unable to find any reported case involving a partial partition as involved in
this case. It noted: "We have three co-tenants on one side who did not receive the same
benefit that [Plaintiff] received. They didn't get their interest[s] partitioned [primarily
because the County would not allow a three-way partition of the remaining 119-acre
parcel]." Nevertheless, Defendants "received a benefit [from the partition action] by
ridding themselves of the Plaintiff, but they didn't receive a full partition themselves."
Discussing Finney, the court stated that although Finney discussed two examples of
equitable apportionment described in the California Law Revision Commission's
comment to section 874.040, Finney did not state those were the only instances in which
equitable apportionment could be made under section 874.040. Plaintiff agreed. The
trial court concluded that in this case it had the power under section 874.040 to equitably
apportion attorney fees and costs. The court explained its reasoning for apportioning the
attorney fees and costs 50 percent to Plaintiff and 50 percent to Defendants, stating:
"As best as I can read the cases, I feel on the one hand that [section]
874.040 allows the Court to divide fees and costs on an equitable
basis where there has not been [a] completely equal partition among
all the parties. And in this case, that has not happened. Plaintiff got
his share out. The Defendants were left with 119 acres that could
not be divided in kind because of the acreage requirements by the
County of Imperial, 40 acreage minimum requirement. And so that,
coupled with the fact that the litigation itself has always been
between the Defendants as a group which represents in effect one
9
united interest, and the Plaintiff is the other interest. That this
mandates upon the court an apportionment not as to the interests, but
as to what is equitable. And I feel what is equitable in this case is
what has been proposed by the Defendants; that the fees and the
costs should be borne equally. In other words, 50 percent [to
Plaintiff and] 50 percent [to Defendants] . . . ."
The court's minute order granted Plaintiff's request for attorney fees and costs,
which "shall be equitably apportioned between the parties with Plaintiff being responsible
for fifty percent thereof and the remaining three defendants being responsible for the
remaining fifty percent." The court found that "though all parties enjoyed a common
benefit in the pursuit of the partition action, that benefit was not equal between them.
Only Plaintiff received a complete partition of his interest. The remaining [D]efendants'
interests in the subject real property have not been individually partitioned." The court
set a further hearing on Defendants' motion for apportionment of attorney fees, if filed,
and their motion for apportionment of costs. The court reserved the issue of whether
Defendants could, at that stage, file a motion for apportionment of attorney fees.
Defendants subsequently filed a motion for apportionment of attorney fees and
costs, requesting they be apportioned evenly between Plaintiff (50 percent) and
Defendants (50 percent). Plaintiff opposed their motion, arguing the motion was filed
late. At the beginning of the hearing on the motion, the trial court announced its tentative
ruling that it would confirm the prior trial judge's order equally apportioning attorney fees
and costs (i.e., "50-50") between Plaintiff and Defendants.3 Following counsel's
3 Imperial County Superior Court Judge Donal B. Donnelly heard the motion after
the case was reassigned to him on the death of Imperial County Superior Court Judge
Barrett J. Foerster, to whom the case was originally assigned. Although the record does
10
arguments, the trial court granted Defendants' motion for apportionment of attorney fees
and costs, apportioning them evenly between Plaintiff (50 percent) and Defendants (50
percent). The court issued a written order apportioning attorney fees and costs incurred
by the parties 50 percent to Plaintiff and 50 percent to Defendants. The court then
entered a final judgment partitioning the Property into two parcels as described above and
apportioning the parties' attorney fees and costs 50 percent to Plaintiff and 50 percent to
Defendants.
C
We conclude the trial court did not abuse its discretion in apportioning attorney
fees and costs because there is substantial evidence to support the trial court's finding that
Plaintiff and Defendants did not benefit equally from the partition action and therefore
the attorney fees and costs incurred in the partition action should be apportioned 50
percent to Plaintiff and 50 percent to Defendants, rather than in proportion to their
individual interests (i.e., 25 percent to Plaintiffs and 75 percent to Defendants). As noted
above, the court partitioned the Property by dividing the Property into two parcels: (1) a
southeast quarter consisting of 40 acres awarded to Plaintiff; and (2) the remaining 119
acres awarded to Defendants. Because the remaining 119-acre parcel could not be
divided into three parcels under County's zoning ordinances, the court could not, and did
not, award each of the three Defendants a separate parcel in proportion to their respective
not appear to contain any document reflecting that event, the parties represent Judge
Foerster passed away before the hearing on Defendants' motion for apportionment of
attorney fees and costs.
11
interests in the Property. Therefore, although Plaintiff received a separate 40-acre parcel
in the partition action, the three Defendants did not receive a separate parcel, but instead
each received a one-third cotenancy interest in the remaining 119-acre parcel. To
compensate for the difference in the per-acre value of the particular real property the
parties received, the court awarded Defendants owelty of $7,250.4
Despite that owelty, the trial court found the parties did not benefit equally from
the partition, finding, in effect, the value of the real property held by Defendants in
cotenancy that could not be divided into three parcels was less than the value of the real
property held by Plaintiff separately. Based on our review of the whole record, we
conclude there is substantial evidence to support that finding. The record shows County
rejected the court's initial proposal for an equal four-way division of the Property because
it consisted of only 159 acres and a minimum of 40 acres was required for farm land
parcels under its zoning ordinances. Therefore, the court adopted an alternative partition,
awarding Plaintiff his own 40-acre parcel and Defendants the remaining 119-acre parcel
in cotenancy. The court could reasonably infer from County's zoning ordinances and the
4 Contrary to Plaintiff's apparent assertion, the record does not show the trial court,
in awarding owelty, sought to equalize the value of the parties' interests in real property
after the partition by, for example, awarding Defendants additional owelty for the
reduced value of their postpartition cotenancy interests in a 119-acre parcel that could not
be divided into three parcels in the future. Instead, the record supports the conclusion
that the court's owelty calculation was based solely on the different intrinsic values of the
farm land in Plaintiff's 40-acre parcel (i.e., $5,200 per acre) and Defendants' 119-acre
parcel (i.e., $5,000 per acre). (The parties appear to concede the parenthetical $5,500 per
acre valuation in the court's final owelty order reflected either a typographical or
mathematical error. The court's order found the value of Defendants' 119-acre parcel was
$595,000, which equals $5,000 per acre.) The owelty award is not challenged in this
appeal.
12
nature of cotenancy that the value received by each of the three Defendants in the
partition action was not equal to, and was in fact less than, that received by Plaintiff.
First, the remaining 119-acre parcel could not be divided into three separate parcels in the
future. Rather, it could be divided into only two parcels in the future, which presumably
could cause difficulty in apportioning that parcel in the future among the three
Defendants. Second, any future partition action involving Defendants presumably would
result in significant attorney fees and costs, which Plaintiff would not suffer because he
already received a "full partition" of his interest in the Property. The court properly
found Plaintiff received, in effect, a "full partition" of his interest and Defendants
received, in effect, only a "partial partition" of their interests. The trial court could
reasonably find the parties' interests and benefits from the partition action were not
identical after the action. The trial court reasonably found that Plaintiff and Defendants
did not benefit equally from the instant partition action and therefore under section
874.040 the attorney fees and costs incurred in the partition action should be apportioned
equitably and not in proportion to the parties' interests in the Property.
Furthermore, based on the whole record in this case, we cannot conclude the trial
court abused its discretion by finding an equitable apportionment of attorney fees and
costs was 50 percent to Plaintiff, who received a significantly greater benefit, and 50
percent to Defendants, who received a significantly lesser benefit, from the partition
action. The court could also reasonably infer that because there were, in effect, two sides
represented in this partition action (i.e., Plaintiff on one side and Defendants on the
other), it would be equitable for each side to bear one-half of the attorney fees and costs
13
incurred in the action. Therefore, the court did not abuse its discretion by equitably
apportioning one-half of the attorney fees and costs to Plaintiff and one-half to
Defendants.5
Plaintiff does not cite any case showing the trial court abused its discretion by
apportioning the attorney fees and costs incurred in this case. Finney v. Gomez, cited by
Plaintiff, is not factually or legally apposite to this case. In that case, the trial court
ordered a property owned equally by two cotenants to be partitioned by sale with the net
proceeds (e.g., after reimbursement of the parties for expenses advanced beyond their
proportionate interests) to be divided in proportion to their interests in the property (i.e.,
equally). (Finney v. Gomez, supra, 111 Cal.App.4th at pp. 531-533.) However, the court
awarded the petitioning cotenant 100 percent of the attorney fees and costs incurred in the
partition action. (Id. at p. 533.) On appeal, Finney concluded that because there was no
substantial evidence to support an equitable apportionment of attorney fees and costs
awarding the petitioning cotenant all of his attorney fees and costs, the trial court abused
5 To the extent Plaintiff argues the trial court abused its discretion by not
considering certain facts, he waives that argument by not specifically citing to the record
or otherwise describing those purported overlooked facts and not presenting any
substantive analysis showing the court abused its discretion by not considering those
facts. (Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856; People v.
Ham (1970) 7 Cal.App.3d 768, 783, disapproved on another ground in People v.
Compton (1971) 6 Cal.3d 55, 60, fn. 3; Jones v. Superior Court (1994) 26 Cal.App.4th
92, 99; Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691, 699-700.) In
any event, because the trial court's judgment is presumed correct, we presume the court
considered all of the evidence in the record in making its decision. (Denham v. Superior
Court (1970) 2 Cal.3d 557, 564.) Plaintiff has not carried his burden on appeal to rebut
that presumption and affirmatively show the trial court erred. (Ibid.; Fundamental
Investment etc. Realty Fund v. Gradow (1994) 28 Cal.App.4th 966, 971.)
14
its discretion. (Id. at pp. 548-550.) The court stated: "Neither the evidence nor the
complaint suggested Gomez had any more of an interest in the property and it certainly
contained no evidence suggesting he had a 100 percent interest in the property." (Id. at
p. 548.) Finney concluded: "[T]here is no substantial basis for awarding fees and costs in
this case other than on the parties' proportion of interest in the property." (Id. at p. 550.)
Accordingly, it reversed the judgment and remanded the case for the trial court to
apportion the attorney fees and costs equally between the parties. (Id. at p. 551.)
Because, as discussed above, Plaintiff and Defendants did not receive the same
benefit from the partition action, Finney v. Gomez is inapposite to this case and does not
persuade us to reach a contrary conclusion. The trial court found Plaintiff received a "full
partition" and Defendants received only a "partial partition." Also, there were two sides
to this action (i.e., Plaintiff versus Defendants). Given the substantial evidence to support
the trial court's apportionment of attorney fees and costs in this case, we conclude Finney
is factually and legally inapposite. Plaintiff does not substantively address any other case
showing the trial court abused its discretion in this case.
Assuming arguendo, as Plaintiff apparently argues, there is a general preference
under section 874.040 for apportioning attorney fees and costs in proportion to the
parties' interests in the property, he does not show the trial court abused its discretion by
not applying that general preference in the circumstances in this case. Because there is
substantial evidence to support the court's equitable apportionment of attorney fees and
costs, the court was not bound to apply any such general preference. Section 874.040
expressly authorizes a trial court to apportion attorney fees and costs incurred in a
15
partition action as it considers equitable in its discretion. "[Section 874.040] simply
states that the trial court must apportion the costs incurred in a partition action based
upon either the parties' interests in the property, or equitable considerations. The statute's
broad language does not limit the trial court's equitable discretion . . . ." (Lin v. Jeng,
supra, 203 Cal.App.4th at p. 1025.) To the extent Plaintiff argues there is substantial
evidence to support a different apportionment or that the trial court should have made
different inferences or findings based on the equitable considerations in this case, he
misconstrues and/or misapplies the substantial evidence and abuse of discretion standards
of review that apply in this appeal.6
DISPOSITION
The judgment is affirmed. Defendants are entitled to their costs on appeal.
McDONALD, J.
WE CONCUR:
BENKE, Acting P. J.
O'ROURKE, J.
6 To the extent Plaintiff argues the trial court erred by considering Defendants' late-
filed motion for apportionment of attorney fees, he waives that argument because he does
not present any substantive argument or analysis showing the court abused its discretion
by considering that motion. (People v. Ham, supra, 7 Cal.App.3d at p. 783; Jones v.
Superior Court, supra, 26 Cal.App.4th at p. 99; Landry v. Berryessa Union School Dist.,
supra, 39 Cal.App.4th at pp. 699-700; Denham v. Superior Court, supra, 2 Cal.3d at
p. 564; Fundamental Investment etc. Realty Fund v. Gradow, supra, 28 Cal.App.4th at
p. 971.)
16
|
258 P.3d 685 (2011)
172 Wn.2d 1004
CITY OF AUBURN
v.
GAUNTT.
No. 85892-6.
Supreme Court of Washington, Special Department.
August 9, 2011.
Disposition of Petition for Review Granted.
|
294 F.2d 275
UNITED STATES of America, Plaintiff-Appellee,v.Edwin J. SCHLENVOGT, Defendant-Appellee, Capitol Indemnity Insurance Company, Surety, Defendant-Appellant.
No. 13333.
United States Court of Appeals Seventh Circuit.
September 21, 1961.
James D. Montgomery and Garland W. Watt, Chicago, Ill., Adams, Weston, & Montgomery, Chicago, Ill., Turner, Cousins, Gavin & Watt, Chicago, Ill., of counsel on the brief, for appellant.
James P. O'Brien, U. S. Atty., Thomas W. James and John Peter Lulinski, Asst. U. S. Attys., Chicago, Ill., of counsel, for appellees.
Before HASTINGS, Chief Judge, and DUFFY and CASTLE, Circuit Judges.
DUFFY, Circuit Judge.
1
This appeal challenges a judgment entered in the District Court in the sum of $2,000 against the defendant, Capitol Indemnity Insurance Company (Capitol).
2
It appears that Capitol was surety on an appearance bond filed in behalf of one Edwin J. Schlenvogt, as principal. After a plea of guilty to a criminal charge, Schlenvogt was scheduled to appear on December 17, 1956 before Honorable Julius J. Hoffman in the District Court for the Northern District of Illinois, Eastern Division. Schlenvogt did not appear.
3
Judge Hoffman announced from the bench, "There will be an order terminating his bail and a bench warrant issued. * * * " The clerk perpared a minute order reciting, "Enter bond forfeiture and bench warrant issue for failure to appear." For some unknown reason, no action was taken by the United States for over four years. Then, on January 24, 1961, the United States filed a motion for judgment of $2,000 against Capitol. Judgment for that sum was entered, and a motion to reconsider the judgment was denied.
4
The main contention made by Capitol is that Judge Hoffman did not forfeit the bail on December 17, 1956. Capitol points out that the judge stated that an order would be entered "terminating his bail." It would seem clear that the experienced district judge misspoke. There would be no reason for him to declare the bail bond terminated, and then to add immediately that a bench warrant would be issued. Furthermore, the minute clerk did make a correct entry that the bond had been forfeited.
5
Rule 46(f) (1), Federal Rules of Criminal Procedure, 18 U.S.C.A., requires that there be a forfeiture of bail when there is a breach of the conditions thereof. Furthermore, Rule 15(a) of the General Rules of the United States District Court for the Northern District of Illinois provides that "A memorandum of the determination of a motion, signed by the judge, or a notation made by the clerk at the direction of the judge, shall constitute the order * *." We must and do assume here that the order entered by the minute clerk was at the direction of the judge.
6
We find the contention of Capitol that there was not a forfeiture of the bail bond is without merit.
7
Relying on Rule 46(f) (2), Federal Rules of Criminal Procedure, Capitol also advanced the argument that the District Court abused or did not exercise its discretion in denying the petition to set aside the bond forfeiture or remitting it in full or in part. We also find this contention to be without merit.
8
The District Court was fully justified in entering the judgment from which this appeal is taken.
9
Affirmed.
|
FILED: November 7, 2018
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
___________________
No. 17-7594
(3:17-mc-00002-MHL)
___________________
VIRGINIA DEPARTMENT OF CORRECTIONS
Petitioner - Appellee
v.
RICHARD JORDAN; RICKY CHASE
Respondents - Appellants
___________________
ORDER
___________________
The parties are directed to file supplemental briefs addressing the following three
issues:
1. Whether this Court is required to address the issue of state sovereign immunity
in this case in light of Vermont Agency of Nat. Res. v. United States ex rel.
Stevens, 529 U.S. 765 (2000); Constantine v. Rectors & Visitors of George
Mason Univ., 411 F.3d 474 (4th Cir. 2005); and Strawser v. Atkins, 290 F.3d
720 (4th Cir. 2002).
2. Whether state sovereign immunity shields Virginia Department of Corrections
from this federal third-party subpoena.
3. Whether circumstances and/or principles limit the application of state
sovereign immunity to federal third-party subpoenas, and how those principles
apply in this case.
Appellee shall file its brief on these issues, not to exceed 20 pages of argument,
by November 29, 2018; Appellants shall file a response, not to exceed 20 pages of
argument, by December 21, 2018; and Appellee may file a reply, not to exceed 7 pages
of argument, no later than January 7, 2019.
The Court also invites the filing of amicus curiae briefs, not to exceed 20 pages
of argument, addressing these issues. Any amicus curiae supporting Appellee, or not
supporting either party, shall file its brief by December 6, 2018. Any amicus curiae
supporting Appellants shall file its brief by January 3, 2019.
For the Court
/s/ Patricia S. Connor, Clerk
|
191 So.2d 7 (1966)
Mary Margaret BUTLER et al.
v.
Melvin H. OLSHAN.
6 Div. 113.
Supreme Court of Alabama.
October 13, 1966.
*11 Dominick, Fletcher, Taylor & Yeilding, Birmingham, for appellants.
Sirote, Permutt, Friend & Friedman, Birmingham, for appellee.
COLEMAN, Justice.
Plaintiffs appeal from a judgment of voluntary non-suit induced by the action of the trial court sustaining demurrer to the complaint.
Plaintiffs seek to recover from defendant, Melvin H. Olshan, for loss of real estate allegedly caused by the wilful and intentional act of defendant in signing his name, as notary public, to a certificate of acknowledgment on a deed and thereby certifying that plaintiffs had acknowledged the execution of the deed when, in fact, plaintiffs had never acknowledged the execution before the defendant. Plaintiffs also seek damages for loss allegedly caused by defendant's false certification that plaintiffs did acknowledge to defendant that they had executed a mortgage on their homestead. As last amended, the complaint contains two counts.
One-B.
In Count One-B, plaintiffs allege that on October 12, 1949, plaintiffs acquired a tract of land which they have since occupied as their homestead, except for a small portion which was conveyed to Bette R. Cohen as hereinafter set out.
On May 19, 1960, plaintiffs made a contract with Seymour L. Cohen whereby he undertook to make certain improvements on a residence located on the property. The contract price for the improvements was stated as $7,550.00. A first mortgage was to be arranged for the unpaid balance.
On August 31, 1960, Cohen requested plaintiffs to execute a conveyance of part of their homestead for a reduction of the debt to be due in the amount of $1,800.00.
Plaintiffs aver that "Cohen, falsely and fraudulently represented to Plaintiffs" that the part of their homestead so conveyed would be reconveyed to plaintiffs by Cohen and his wife, Bette R. Cohen, "at any future time" upon payment of $1,800.00 to the Cohens by the plaintiffs, and that Cohen's representation was false, was made with no intention at the time "to carry out said representation," and was made intentionally to deceive and defraud plaintiffs and to induce them to execute the conveyance.
Relying on Cohen's representation, on August 31, 1960, plaintiffs signed the deed which bears that date. The grantee in the deed was Cohen's wife, Bette R. Cohen, who was named as grantee by Cohen for convenience, with no consideration passing from the wife to the husband.
Plaintiffs aver that the consideration for the deed was inadequate in that the property conveyed was worth more than $3,500.00.
Plaintiffs aver that defendant, Olshan, at some later time, signed his name as notary public on the deed and affixed his seal thereto, but he did not witness the signatures of plaintiffs, did not see or speak to plaintiffs at the time they signed the deed or at any subsequent time, and plaintiffs did not acknowledge to defendant the execution of the deed.
Plaintiffs aver that defendant's act of executing the certificate of acknowledgment was a wilful and intentional act in violation of defendant's duty as a notary public.
On November 28, 1960, plaintiffs discovered defendant's violation of his duty. On *12 that date, one Kirchler informed plaintiffs that he and one Hamner owned the property described in the deed of August 31, 1960, to Bette R. Cohen. Plaintiffs found that on September 9, 1960, Cohen and wife had conveyed the property to Jerome B. Davis for a recited consideration of $2,200.00 by deed recorded in office of the judge of probate; and Davis had conveyed the property to Kirchler and Hamner for a stated consideration of $3,500.00 as shown by recorded deeds dated October 8, 1960.
"Plaintiffs aver that the said Jerome B. Davis, Herman L. Kirchler and Walton Hamner have been judicially determined by the Circuit Court, Tenth Judicial Circuit of Alabama, in Equity, Case No. 121-359, to be bona fide purchasers for value without notice."
Plaintiffs aver that defendant's act proximately injured plaintiffs in that "it validated a deed which, but for the acknowledgement, could not have passed a merchantable title to the grantee thereof .... but for the said acknowledgement, Plaintiffs could have been able to resist any equitable action by the grantee to enforce" the deed and "could have successfully invoked a number of defenses including fraud as alleged herein or the doctrine of clean hands," and "these defenses were not, as a matter of law, available to Plaintiffs against bona fide purchasers for value without notice."
Plaintiffs aver that, as a proximate result of defendant's act, they have suffered the loss of their property described in the deed of August 31, 1960.
Two-B.
In Count Two-B, plaintiffs aver that they owned and have occupied their land, except the lot conveyed to Bette R. Cohen; that plaintiffs made a contract with Seymour L. Cohen for improvements; that Cohen agreed to arrange for financing the cost of improvements at an interest rate not to exceed six per cent per annum.
On August 31, 1960, Cohen presented to plaintiffs a note and mortgage covering plaintiffs' homestead for $8,500.00 with interest at eight per cent per annum. On that date, the improvements were about seventy-five per cent completed. Cohen represented to plaintiffs that the note and mortgage were only temporary and he would "secure" for them permanent financing at six per cent. Cohen's representation was false, made with no intention "to carry out said representation," to deceive and defraud plaintiffs, and to induce them to execute the note and mortgage, which they did, relying on Cohen's representation.
At some later time defendant signed his name and affixed his notarial seal to the mortgage. Defendant did not witness the signature of plaintiffs, was not in the place where plaintiffs signed the mortgage, and did not see or speak to plaintiffs at the time of their signing or subsequent thereto. Plaintiffs did not acknowledge execution of the mortgage to defendant.
Defendant's act in executing the certificate of acknowledgment was a "wilful and intentional act in violation of his legal duty as such officer."
On or about September 16, 1960, plaintiffs discovered that the note and mortgage had been transferred by Cohen to Olshan Realty Co., Inc., a corporation, and by the corporation to one Jack Talyor. The transfers were made on the same day on which plaintiffs signed the note and mortgage.
Plaintiffs aver that the improvements contracted for have not been completed and much of what was done was of poor workmanship.
Plaintiffs aver that Talyor is a holder in due course or bona fide purchaser for value without notice and the mortgage is a valid first mortgage on plaintiffs' homestead.
Plaintiffs aver that defendant's act damaged plaintiffs in that they were deprived of equitable relief against the mortgage in the hands of Talyor; that but for the acknowledgment, *13 plaintiffs would have been able to resist any equitable action to enforce the mortgage; that equitable defenses are not available to plaintiffs against bona fide purchasers or holders in due course; that plaintiffs have not been able to obtain financing at a lesser rate of interest; and plaintiffs will have to pay a sum in excess of the value of the work done by Cohen.
Ruling on One-B.
Grounds 23 and 24 of demurrer raise the defense against Count One-B that the final decree in Case No. 121-359 is res judicata of the issues tendered in Count One-B with reference to the deed to Bette R. Cohen dated August 31, 1960.
Defendant asserts that, because plaintiffs refer in Count One-B to Case No. 121-359, the trial court was bound to take judicial notice of the record of the prior case and that the record in the prior case shows that the prior decree is res judicata of the issues tendered by Count One-B with reference to the deed to Bette R. Cohen. Defendant says that the defense of res judicata may be raised by demurrer and was so raised here, and that the record of the prior case sustains the defense of res judicata. Defendant concludes, therefore, that the trial court cannot be put in error for sustaining the demurrer to Count One-B.
By the weight of authority, as is stated in 96 A.L.R. at page 945, where a judgment of the same court is pleaded as a bar or as conclusive on an issue, the existence and contents of the judgment must be proved by offering the record in evidence. In the same annotation at page 952, however, Alabama is shown as following the minority rule and holding that the trial court properly took judicial notice of a prior judgment in the same court where the prior judgment was referred to in the pleading. Such is the rule followed by this court as shown by the cases next referred to.
When a bill in equity, together with its exhibits, affirmatively shows on its face that the claim sought to be decided and enforced by the bill has already been adjudicated by a court which had jurisdiction of the same parties and same subject matter, the defense of res judicata is a complete answer to the bill and may be interposed by appropriate demurrer. Williams v. Williams, 202 Ala. 539, 81 So. 41; Cogburn v. Callier, 213 Ala. 38, 104 So. 328; Crowson v. Cody, 215 Ala. 150, 110 So. 46; United Baptist Church, etc. v. Gautney, 250 Ala. 216, 34 So.2d 1.
With respect to judicial notice by a court of its own records, the rule in Alabama is not that in all cases the court may notice the record of other proceedings therein, even between the same parties and involving the same subject matter; but, where a party refers to such other proceeding or judgment in his pleading for any purpose, the court, on demurrer by the other party, may and should take judicial notice of the entire proceeding in so far as it is relevant to the question of law presented. Cogburn v. Callier, supra; Crowson v. Cody, supra, 215 Ala. at page 156, 110 So. 46; Le Furgey v. Beck, 244 Ala. 281, 284, 13 So.2d 179; Griffin v. Proctor, 244 Ala. 537, 542, 14 So.2d 116; Peach v. Drennen, 253 Ala. 271, 274, 44 So.2d 257; Ex parte Lange, 268 Ala. 422, 108 So.2d 335; Taylor v. Taylor, 272 Ala. 234, 130 So.2d 387.
In several cases, however, this court has refused to apply the doctrine of Cogburn v. Callier, supra, and has refused to take notice of other proceedings. In Crossland v. First National Bank, 233 Ala. 432, 172 So. 255, on appeal from the circuit court, this court refused to take notice of its own record of an appeal previously taken from the probate court of the same county. This court's refusal to take notice of the previous appeal from the probate court appears to have been for the reason that the record of the case in the probate court was not a record of the circuit court and so was not a record which the circuit court *14 could judicially notice. This court seems to have laid down the rule that, for the supreme court to take notice of the record of the other proceeding, three conditions must exist. First, the pleading in the instant case must refer to the other proceeding; second, the other proceeding must be of record in the trial court whose decree or judgment is the basis for the instant appeal; and, third, the prior proceeding must be of record in the supreme court in another appeal here or be set out in the instant record.
This court also refused to take notice of other proceedings in Alexander v. Letson, 242 Ala. 488, 7 So.2d 33; Sellers v. Valenzuela, 249 Ala. 627, 32 So.2d 517; and Belyeu v. Boman, 252 Ala. 371, 41 So.2d 290.
In Brantley v. Brantley, 258 Ala. 367, 63 So.2d 29, this court refused to take notice of another proceeding in the trial court for the purpose of sustaining a bill against demurrer. It seems that this court refused to take notice of the other proceeding because the bill did not allege the matter which complainant sought to have this court notice and the record in the other case had not been brought to this court by appeal in any way.
In Williamson v. Burks, 262 Ala. 422, 79 So.2d 42, this court refused to take notice of prior proceedings where respondent sought to have this court take such notice in order to sustain a demurrer to the bill. This court said that the demurrer attempting to set up the defense of res judicata was a speaking demurrer and the reference, in the bill, to the previous proceeding was not sufficient to invoke the court's judicial knowledge of the same in ruling on the demurrer.
In the instant case, the plaintiffs did refer to Case No. 121-359 so as to satisfy the requirement of reference to the prior proceeding in the complaint and permit the defendant, by demurrer, to interpose the defense of res judicata and call on the trial court to take judicial notice of the prior Case No. 121-359. We may concede also that the record of Case No. 121-359 is a record of the same court whose judgment is the basis for the instant appeal and that the trial court's ruling, sustaining the demurrer to Count One-B in the instant case, rested on the grounds which take the point that the decree in Case No. 121-359 "is res judicata of the issues here tendered with reference to the deed" from plaintiffs to Bette R. Cohen referred to in Count One-B.
The third requirement, however, is lacking. The record in Case No. 121-359 is not before us in the record on a prior appeal or in the instant appeal, and for that reason we cannot judicially know whether the decree in Case No. 121-359 is or is not res judicata of the issues tendered in Count One-B.
Under the doctrine of Cogburn v. Callier, supra, however, we are of opinion that, with respect to Count One-B, the trial court was authorized and required to take judicial notice of the proceedings in Case No. 121-359. We may assume that the trial court did take such notice and we thus come to the question of deciding whether we can say the trial court erred in sustaining the grounds of demurrer which raise the defense of res judicata against Count One-B.
It is elementary that error will not be presumed. This court has said that where the trial court gives judgment upon the facts and law, its action will not be reversed unless the record affirmatively show all the facts upon which the court acted where any supposable state of facts would sustain the action of the court. Wise v. Ringer, 42 Ala. 488.
A party complaining of error in a judgment, must show it affirmatively upon the record, as otherwise the presumption will be that the decision is correct. Lyon v. Krebs, 9 Ala. 426.
Plaintiffs are the party who first made reference to the prior case. If, in truth, *15 the decree in Case No. 121-359 is not res judicata to plaintiffs' claim as set out in Count One-B, then plaintiffs ought to show that the prior decree is not res judicata by setting out the prior record in Count One-B.
We must presume that the trial court took notice of the record in Case No. 121-359. Plaintiffs have not brought that record before us. In absence of a contrary showing in the record before us, we must presume that the matter, which was before the trial court but is omitted from he record before us, was sufficient to sustain the ruling of the trial court. Plaintiffs assert error in sustaining the demurrer and have the burden of proving error but plaintiffs have not supported that burden. We must hold that demurrer to Count One-B was sustained without error.
Ruling on Two-B.
If any ground of a demurrer is well taken, the action of the trial court in sustaining the demurrer must be upheld. Prather v. Ray, 258 Ala. 106, 112, 61 So.2d 46; Ledbetter v. Frosty Morn Meats, 274 Ala. 491, 495, 150 So.2d 365.
By assigning for error that the court erred in sustaining the demurrer to Count Two-B, plaintiffs assert and, therefore, assume the burden of showing that all grounds of demurrer are bad, or, in other words, that no ground is a good ground. To support this burden, plaintiffs must argue each and every ground and demonstrate that each is bad. Plaintiffs have argued every ground. In original demurrer, defendant assigned twenty-six grounds, numbered 1 to 26, and added grounds S and B by amendment.
Ground S is that it affirmatively appears that defendant has breached no duty owing to plaintiffs. For reasons hereinafter stated, we think that Count Two-B does show that defendant breached a duty owed to plaintiffs and, therefore, that ground S is not well taken.
Ground B is that the complaint is vague and uncertain because plaintiffs have dismissed all defendants except appellee, but "this count" states a claim against the "Defendants." Without deciding whether such a ground is hypertechnical or whether such a discrepancy would be self-correcting, we think that ground B is not well taken because on careful examination of Count Two-B we have not found in it the plural word, "Defendants."
In brief and argument, plaintiffs divide the twenty-six original grounds into seven groups so that the grounds which raise the same point in different language are grouped and argued together. This arrangement, with slight modification, appears to present adequate argument to review the sufficiency of each and all of the twenty-six grounds.
Group A.
Grounds 1, 2, and 22 raise the point that "The Complaint fails to state a cause of action."
Such a ground is a general demurrer not authorized by § 236, Title 7, Code 1940, and error cannot be predicated on overruling a demurrer in so far as that claim is concerned. Sarber v. Hollon, 265 Ala. 323, 325, 91 So.2d 229. Such a ground has been abolished by statute in suits at law. Alabama Power Company v. Curry, 228 Ala. 444, 447, 153 So. 634. The trial court will not be put in error for overruling demurrer on the ground that the complaint is vague, indefinite, and uncertain; that it fails to state a cause of action; or that the averments are mere conclusions of the pleader. United States Health & Accident Ins. Co. v. Goin, 197 Ala. 584, 73 So. 117; but see Druid Homes, Inc. v. Cooper, 272 Ala. 415, 417, 131 So.2d 884.
On the other hand, when the complaint does not contain a substantial cause of action, there can be no recovery, although the complaint was not demurred to. St. Clair County v. Smith, 112 Ala. *16 347, 351, 20 So. 384. When a complaint does not state a cause of action, a general demurrer on that ground is sufficient to call attention to the defect since the court, of its own motion, should deny recovery thereon; and, on appeal, this court will set aside a judgment based on such a complaint, even though the objection was not made in the court below. McCarty v. Williams, 212 Ala. 232, 234, 102 So. 133.
In an action at law, we can see no reason why the trial court should not sustain a demurrer on the ground that the complaint fails to state a cause of action; and, if the complaint does not state a cause of action, we think the judgment sustaining the demurrer ought to be upheld on appeal. This court so held in Kelly v. Burke, 132 Ala. 235, 241, 31 So. 512. See Ala. Digest, Appeal and Error. So, in the instant case, if Count Two-B does not state a cause of action, we think we ought to affirm the judgment sustaining ground 1 of the demurrer to that count. If, however, Count Two-B does state a cause of action we must hold that ground 1 is not well taken and that the court erred in sustaining that ground of demurrer. We must, therefore, decide whether Count Two-B states a cause of action.
Every action in tort consists of three elements: (1) the existence of a legal duty owed by defendant to plaintiff; (2) defendant's breach of that duty; and (3) damage to plaintiff as the proximate result of defendant's breach of duty. City of Mobile v. McClure, 221 Ala. 51, 54, 127 So. 832.
What is the duty owed by a notary public to every other person? In § 207, Title 41, Code 1940, it is provided that any officer authorized to take acknowledgment of any conveyance of property, real or personal, who, with intent to injure or defraud, or to enable any other person so to do, wilfully certifies that any conveyance was duly proved or acknowledged when such acknowledgment was not in fact made, must, on conviction, be imprisoned in the penitentiary for not less than two nor more than ten years. In § 4, Title 40, Code 1940, it is provided that a notary must give bond "conditioned to faithfully discharge the duties of such office ...."
We are of opinion that the duty of a notary requires that he not wilfully and intentionally certify that a person has acknowledged the execution of a conveyance when such person has not acknowledged such execution before the notary.
".... Where a notary is called on to perform an act which he is authorized by law to perform, and he does so carelessly or fraudulently, he and his surety are liable for any loss proximately resulting therefrom. 20 R.C.L. § 17, p. 335. A notary public is not an insurer, but he is under a duty to his clients to act honestly, skillfully and with reasonable diligence ...." Aetna Cas. & Surety Co. v. Commonwealth, 233 Ky. 142, 146, 25 S.W.2d 51, 53.
"Where an officer, by wanton misconduct, starts on its way in the commercial world a false certificate upon which the public has the right to rely, he ought to be held responsible for all proximate consequences, not only to the person who takes immediately and directly under the instrument bearing the certificate, but to every one damaged as the proximate result of it." American Surety Co. of New York v. Boden, 243 Ky. 805, 811, 50 S.W.2d 10, 13.
See annotation: 61 A.L.R. 807. We are of opinion that the averments of Count Two-B show a duty owed by defendant to plaintiffs.
Plaintiffs alleged that they did not acknowledge to defendant the execution of the mortgage but that defendant did sign his name and affix his seal thereto, and that defendant's act was "a wilful and intentional act." A copy of the mortgage is made Exhibit G to the complaint. In Exhibit *17 G, we find defendant's certificate that plaintiffs "acknowledged before me on this day" that they executed the mortgage, but plaintiffs allege that they did not acknowledge such execution to defendant at the time of execution or at any time subsequent thereto. If the allegations of Count Two-B be taken as true, as they must be on demurrer, then defendant has wilfully and intentionally certified that plaintiffs did acknowledge before defendant the execution of an instrument when they did not do so and have never done so. We are of opinion that Count Two-B sufficiently shows defendant's breach of a duty he owed to plaintiffs.
To state a cause of action, Count Two-B must contain the third element of tort. The allegations must show that defendant's breach of duty was a proximate cause of plaintiffs' damage.
The exhibits to the complaint show that on the day of the date of the mortgage and of defendant's false certificate, the mortgage was transferred to Taylor and plaintiffs allege that he is a bona fide purchaser for value without notice, and, therefore, that plaintiffs have lost the right to interpose against Talyor's claim for the mortgage debt those defenses which plaintiffs could have interposed against the same claim in the hands of Cohen, who was the grantee named in the mortgage.
Examination of Exhibit G discloses that there is no witness to the signatures of plaintiffs on the mortgage. § 22, Title 47, Code 1940, provides that the execution of conveyances for alienation of lands "must be attested by one witness." Exhibit G does not comply with this requirement. § 24 of Title 47, provides, however, that the acknowledgment provided by statute operates as a compliance with the requisite of § 22 upon the subject of witnesses. So it is, then, that defendant's acknowledgment furnished compliance with the statutory requirement for conveyance of the title to the land.
Defendant argues that even without defendant's certificate, however, plaintiffs' signatures to the mortgage complied with the statute of frauds, and the mortgage would be enforceable in equity as a contract to convey. Rhodes v. Schofield, 263 Ala. 256, 264, 82 So.2d 236; Golden v. Golden, 256 Ala. 187, 54 So.2d 460. Defendant's argument on this point is probably correct, but in a suit by Cohen, in equity, to enforce the contract, would not plaintiffs have the right to interpose equitable defenses against enforcement of the contract? We are not advised to the contrary. From the averments of Count Two-B, the loss of the right to interpose such equities is the principal damage which plaintiffs have suffered.
Defendant says further that his act is not a proximate cause of plaintiffs' damage, that defendant's act is not even a concurring cause, and that the proximate cause is the fraud practiced on plaintiffs by Cohen.
If damage results from concurrent, wrongful acts of two or more tort-feasors, they may be sued jointly or severally and the act of each may be counted on as the proximate cause of the injury; and it is not necessary that a plaintiff aver or prove facts showing a common design, a concert of action, or knowledge by one tort-feasor of the acts of the other tort-feasor. Liberty National Life Ins. Co. v. Weldon, 267 Ala. 171, 189, 100 So.2d 696, 61 A.L.R.2d 1346.
Injury arising from the concurring negligence of joint tort-feasors, whether they act together or independently, may be redressed by joint or several action. Chambers v. Cox, 222 Ala. 1, 3, 130 So. 416. Where, as in the case at bar, the tort-feasors act wilfully and intentionally, their liability can be no less than it would be for acting negligently.
In Fogleman v. National Surety Co., 222 Ala. 265, 268, 132 So. 317, in a bill of complaint, it was alleged that the defendant, as a notary, had executed certificates of acknowledgment certifying that certain persons *18 had acknowledged the execution of certain mortgages when they had not done so and the mortgages were fictitious and forgeries. The mortgagee in some of the mortgages sued the notary. This court held that the bill of complaint was not demurrable and said:
"The bills of complaint allege such fraudulent official misconduct by representing the due acknowledgement of the mortgages, when that was false, and that complainants relied upon the representation and thereby sustained a loss....." (222 Ala. at page 269, 132 So. at page 320)
This court said also that: ".... the false certificate need not be the sole proximate cause of a loss to justify a recovery"; and further: "But we think that we can accept the theory that, if reliance on the false certificate is one of the proximate contributing causes, a recovery may be had without going the full length of some of the cases last cited ...."
We think the allegations of Count Two-B show that defendant's false certification of plaintiffs' acknowledgment was a concurring proximate cause of plaintiffs' loss.
Other courts have held notaries liable to the maker of an instrument for falsely certifying that the maker had acknowledged execution of the instrument. See: Brown v. Graves, 114 Kan. 602, 220 P. 247; Aetna Cas. & Surety Co. v. Commonwealth, 233 Ky. 142, 25 S.W.2d 51; American Surety Co. of New York v. Boden, 243 Ky. 805, 50 S.W.2d 10; Strother v. Shain, 322 Mass. 435, 78 N.E.2d 495; State ex rel. Payne v. Wilson (Mo.App.), 207 S.W.2d 785; Erie County United Bank v. Berk, 73 Ohio App. 314, 56 N.E.2d 285.
In Brown v. Graves, supra, the mortgagors sued a notary for falsely certifying that mortgagors had acknowledged before the notary the execution of the mortgage. Mortgagors had contracted to borrow $1,500.00. They executed and delivered to the mortgagee a note and mortgage but did not acknowledge it because the $1,500.00 was not immediately forthcoming. During the next three months, the mortgagee advanced $800.00 to the mortgagors. In some way, the notary signed and sealed her notarial certificate showing mortgagors' acknowledgment. The mortgage was recorded and the note and mortgage were sold to a purchaser who had no notice of the infirmities therein. Mortgagors sued the notary and contended that if she had not falsely signed and sealed her certificate on the mortgage, it could not have been recorded and sold to an innocent purchaser. The Supreme Court of Kansas, in reversing a judgment for the notary had this to say:
"It would seem that plaintiffs' pleadings and opening statement presented a cause of action. Bellport v. Harkins, 104 Kan. 543, 180 P. 220, and citations therein. It is true, of course, as argued by defendants, that the $1,500 note, being executed and left in Jones' custody, could have been negotiated by him to an innocent holder, and plaintiffs would have been liable thereon, although no mortgage had been executed, and regardless of the fact that it never was acknowledged, and plaintiffs' only recourse would have been an action against Jones. But without the false notarial acknowledgment, the mortgage could not have been recorded, and their homestead thereby irrevocably pledged to the payment of $1,500 at the suit of an innocent holder.
". . . . . .
"It may be that if the note had not been backed by a mortgage having an apparently regular acknowledgment, notarial certification, and registration, the Ranchmen's Trust Company, an innocent purchaser, would have bought the note and mortgage. But our concern is not with what might have happened, but with what did happen. The note was good between the parties for $800, and the mortgage was good for the same amount, without a notarial certification and without registration. But it was good for no more. *19 As the matter now stands, the mortgage binds plaintiffs' homestead for $1,500.
"The notary perpetrated an actionable wrong on plaintiffs, and she and her bondsman must respond in damages therefor. 1 C.J. 902, and notes; 1 R.C.L. 308, 311." (220 P. at page 248)
In Alabama, conveyances are not self-proving by reason of recording unless acknowledged or proved according to law. Redwine v. Jackson, 254 Ala. 564, 575, 49 So.2d 115. In the instant case, defendant's false certificate supplied an element which was lacking on the mortgage, made the mortgage more attractive, and, we think, contributed to the sale of the note and mortgage to an innocent purchaser.
We hold that Count Two-B sufficiently states a cause of action to support a judgment and withstand the general demurrer asserting failure to state a cause of action.
Group B.
Grounds 4, 5, 6, and 7 assert that the fraud on which plaintiffs rely is not alleged with sufficient certainty and is pleaded as a conclusion.
We have already undertaken to demonstrate why we think the averments of Count Two-B sufficiently show duty, its breach, and damages to plaintiffs as the proximate result of the breach. If the count charges fraud, it is constructive fraud and the facts to show it are sufficiently alleged. There is no charge of evil intent on defendant's part; there is merely a charge of wilful and intentional breach of duty sufficient to render defendant liable for damages proximately resulting from the breach. These grounds are not well taken.
Group C.
Grounds 8 and 9 assert that Count Two-B is bad for nonjoinder of a necessary party defendant, Cohen. We have already said that joint tort-feasors may be sued jointly or separately. These grounds are not well taken.
Groups D and E.
Grounds 10, 12, 14, 16, 18, and 20 do not apply to Count Two-B because they are based on the deed, Exhibit C, which is the foundation of Count One-B and, therefore, these grounds are not well taken with respect to Count Two-B.
Grounds 11, 13, 15, 17, 19, and 21 appear to say that plaintiffs are estopped from recovery because they voluntarily signed the mortgage and thus made it enforceable in equity as an agreement to convey. We have already pointed out, however, that as an agreement to convey, the mortgage would be subject to equitable defenses. Also, whatever might have happened without defendant's false certificate, the certificate is on the mortgage and did have a part in effecting the transfer of the note and mortgage to a purchaser for value without notice.
Defendant relies on MacBride v. Schoen, 121 Cal.App. 321, 8 P.2d 888, where the District Court of Appeals for the Fourth Appellate District said that "while the notary may have been guilty of negligence or fraud in attaching the certificate of acknowledgment, it would appear" that the act of the notary could not have occurred if grantor had not signed and delivered the instrument and the grantor's own negligence had a part in causing the loss.
MacBride is contrary to the holdings in the seven cases last cited above in the discussion under Group A. Moreover, in the case at bar, plaintiffs charge defendant with a wilful and intentional act, not a negligent act. Contributory negligence is no defense to a count seeking recovery for the wilful or wanton acts of defendant. Southern Ry. Co. v. Yancey, 141 Ala. 246, 249, 37 So. 341; cases cited in Ala.Digest, Negligence.
We hold, therefore, that grounds 11, 13, 15, 17, 19, and 21 are not well taken.
*20 Group F.
Grounds 23, 24, and 25 assert that Case No. 121-359 is res judicata of the issue here.
We have already decided that we would not reverse for sustaining these grounds to Count One-B because that count contained reference to Case No. 121-359, and that, since the record in that case is not before us, we would not presume that the absent record failed to sustain the defense of res judicata. In Count Two-B, however, we find no reference to Case No. 121-359.
".... Under our system of pleading the several counts of the complaint are considered separate and distinct, and to be tested for their sufficiency by the averments thereof without reference to any other count, unless so adopted by the language thereof...." Paterson & Edey Lumber Co. v. Carolina-Portland Cement Co., 215 Ala. 621, 626, 112 So. 245, 250.
As we understand the rule, each count of a complaint, when tested by demurrer, must stand alone on its own allegations, unassisted and unharmed by the allegations of any other count. Count Two-B does not adopt any part of Count One-B and is not helped or hurt by the averments of the other count. For that reason, the reference to the prior case in Count One-B has no effect on Count Two-B and the latter count is not subject to the grounds of demurrer which raise the defense of res judicata.
Group G.
Ground 26 and other grounds in this group take the point that the allegations of the complaint do not show that defendant's act is the proximate cause of plaintiffs' injury.
We have stated the reasons we think the allegations of Count Two-B do show that defendant's act was a concurring, proximate cause of plaintiffs' injury.
For error in sustaining the demurrer to Count Two-B, the judgment is reversed and the cause remanded.
Reversed and remanded.
LIVINGSTON, C. J., and GOODWYN and MERRILL, JJ., concur.
|
69 N.J. 123 (1976)
351 A.2d 349
BAK-A-LUM CORPORATION OF AMERICA, A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT AND CROSS-RESPONDENT,
v.
ALCOA BUILDING PRODUCTS, INC., A PENNSYLVANIA CORPORATION, DEFENDANT-RESPONDENT AND CROSS-APPELLANT.
The Supreme Court of New Jersey.
Argued October 20, 1975.
Decided January 28, 1976.
*126 Mr. Sheldon A. Weiss argued the cause for Plaintiff-Appellant and Cross-Respondent (Messrs. Diamond, Grossman, Pitman & Udine, attorneys; Messrs. Glauberman & Weiss, of counsel).
Mr. Walter F. Waldau argued the cause for Defendant-Respondent and Cross-Appellant (Messrs. Stryker, Tams & Dill, attorneys; Mr. Waldau and Mr. Richard R. Spencer, Jr., on the brief).
The opinion of the Court was delivered by CONFORD, P.J.A.D., Temporarily Assigned.
Plaintiff corporation ("BAL" hereinafter) sued defendant ("ALCOA" hereinafter) for an injunction and damages for alleged breach of an exclusive distributorship of aluminum siding and related products manufactured by ALCOA. It was denied an injunction but awarded damages for breach of contract; at the same time the trial court granted defendant judgment on a counterclaim for merchandise sold to plaintiff, together with interest thereon. Plaintiff appealed on the ground the damages awarded were inadequate; the defendant cross-appealed, asserting its conduct was not actionable. The Appellate Division affirmed. We granted plaintiff's petition for certification and defendant's cross-petition. 68 N.J. 138, 139 (1975). Plaintiff raises the additional issue that in the light of the nature of defendant's conduct plaintiff should not in equity be held for interest on its admitted debt to defendant.
We find the record to support the trial court's finding of fact that in or about 1962 or 1963 BAL entered into a verbal agreement with ALCOA whereby BAL would be exclusive distributor in Northern New Jersey for ALCOA's aluminum siding and certain related products. Although the agreement did not preclude BAL handling other lines of siding, the understanding was that it would maintain an adequate organization and exert its best efforts to promote the sales of the ALCOA products, and the evidence and *127 trial findings were that BAL produced to the satisfaction of ALCOA, even meeting fixed quotas of sales set by ALCOA during the latter phase of the relationship.
ALCOA terminated the "exclusive" in January 1970 by appointing four additional distributors to share the North Jersey territory with plaintiff, thereby precipitating the controversy that gave rise to this action. The trial court, although refusing a request for a preliminary injunction against the termination of the exclusive distributorship, held after trial that there was a binding agreement between the parties terminable only after a reasonable period of time and on reasonable notice. It found that a reasonable period of time had passed before termination but that a reasonable period of notice of termination would be seven months. It established plaintiff's damages at $5,000 per month and entered judgment in plaintiff's favor for $35,000 together with interest from September 1, 1970.
In addition to a complaint that it established losses in sales profits as a result of the termination of the exclusive at a rate of $10,000 per month rather than at the $5,000 rate determined by the court, plaintiff's major grievance is that in the Spring of 1969, at a time when defendant had already decided upon the termination of the distributorship but was secreting that plan from plaintiff, the latter undertook a major expansion of its warehouse facilities at substantial added operating expense. Plaintiff asserts that defendant knew of and encouraged this step, leading plaintiff to believe it was well warranted in view of the expected enlargement of the business of both of the contracting parties. On the basis of defendant's concealment of its intentions in the face of plaintiff's incurrence of a five year lease obligation for the new space, plaintiff asserts it is entitled to additional damages from defendant for the excess of its expense for the period of the lease over its operating expenses in its former headquarters a loss allegedly attributable directly to defendant's breach of contract.
*128 The trial court found that if ALCOA's decision, made in January or February of 1969, to enlarge the number of North Jersey distributors, had been promptly communicated to BAL's president, "it is unlikely that he would have signed the lease [for the new quarters] in April [1969] without first getting from [ALCOA] the assurance of continuance of the distributorship which he sought to get after the lease was signed". The court further found that all the circumstances surrounding the defendant's attitude to and treatment of plaintiff preceding and attending the disruption of the contractual arrangement "bespeak a certain hypocrisy as well as ruthlessness on the part of [ALCOA] toward its distributor of many years". The court further "surmised" that the reason defendant had concealed during the year 1969 its intention to terminate plaintiff's exclusive even though it had arrived at that intent before plaintiff entered into the new lease in 1969 was "that the men at [ALCOA] in charge of sales thought a period of secrecy ending with a sudden announcement to Mr. Diamond [plaintiff's president] of the accomplished fact of new distributors would avoid any risk of cooling plaintiff's interest in selling ALCOA products during the several months before the new distributors were named and made ready to go". Indeed, defendant's salesman induced plaintiff in January 1970, just before the announcement of the termination of the exclusive, to order $150,000 worth of merchandise a very heavy order for that time of year.
In fixing seven months as a reasonable period of notice of termination of the exclusive agreement the trial court stated that the criterion for such a period of notice is the amount of time the notified party needs to make adjustments and to plan and arrange for business activities to replace those which are to be eliminated. However the court apparently placed little if any weight on the circumstances of the new lease as an element going to the reasonableness of the period for notice of termination, although it stated that the lease was a "factor" for consideration. It pointed out that the *129 decision to undertake the lease was plaintiff's and that plaintiff was able to use the space to store merchandise other than that purchased from defendant as well as defendant's lines.
Our review of the record leads us to concur in the trial court's holding that there was a valid distributorship agreement terminable only on reasonable notice. See Annot., 19 A.L.R. 3rd 196 (1968), § 12 [a] at 292; 9 Williston, Contracts (3rd ed. 1967) § 1017A at 150-152; J.C. Millett Co. v. Park & Tilford Distillers Corp., 123 F. Supp. 484, 492 (N.D. Calif. 1954); California Wine Ass'n. v. Wisconsin Liquor Co., 20 Wis.2d 110, 121 N.W.2d 308, 316-317 (Sup. Ct. 1963); Cromwell v. Gruber, 7 Wash. App. 363, 499 P.2d 1285, 1288 (Ct. App. 1972); cf. Ass'n. Group Life, Inc. v. Catholic War Veterans, 120 N.J. Super. 85, 96 (App. Div. 1971), mod. 61 N.J. 150 (1972). Plaintiff's contention that the agreement was not terminable at all without "cause", based on the recent holding of this court in Shell Oil Co. v. Marinello, 63 N.J. 402 (1973), is without merit. The "franchise" agreement here is in no sense comparable with that which produced the holding of non-terminability in Shell.
However, we are constrained to differ with the trial court's assessment of seven months as an adequate period for notice of termination of this agreement. It may be true that defendant ordinarily would be under no strictly legal obligation to inform plaintiff that it was about to terminate its exclusive distributorship although it knew that in all probability plaintiff was enlarging its plant upon an assumption of the continuation of the business arrangement for the indefinite future. However, we have been at pains recently to point out that "[i]n every contract there is an implied covenant that `neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract; in other words, in every contract there exists an implied covenant of good *130 faith and fair dealing.'" Association Group Life, Inc. v. Catholic War Vets. of U.S., 61 N.J. 150, 153 (1972). See also Palisades Properties, Inc. v. Brunetti, 44 N.J. 117, 130 (1965). In the first cited case we distinguished between an absence of literal violation of a contract and the breach of the implied covenant of good faith therein which could give rise to the sanction of damages. 61 N.J. at 153-154.
So, too, here. While the contractual relation of manufacturer and exclusive territorial distributor continued between the parties an obligation of reciprocal good-faith dealing similarly persisted between them. In such circumstances defendant's selfish withholding from plaintiff of its intention seriously to impair its distributorship although knowing plaintiff was embarking on an investment substantially predicated upon its continuation consituted a breach of the implied covenant of dealing in good faith of which we have spoken. As such it must be given substantial weight in determining the reasonableness of a period of notice of termination of the distributorship.
We cannot, however, agree with plaintiff that the period should encompass the remaining 4 1/2 years of the lease as of the date of breach. The evidence justifies the conclusion that the prospects were fair for ultimate utilization to a substantial extent of the expanded warehouse space for new business plaintiff was able to obtain after defendant's breach or for other means of mitigating that phase of the damage attributable to defendant's conduct.
Exercising our original fact finding jurisdiction in order to bring this litigation to a close, it is our determination that a reasonable period of notice of termination of the distributorship, under all the circumstances, would have been 20 months.
Moreover, we find unwarranted the trial court's determination of plaintiff's monthly losses of profits of sales at $5,000 in the face of apparently unchallenged proofs by plaintiff, accepted by the court, that the damage figures were *131 about $10,000 monthly. The trial court cut the latter figure on the basis that plaintiff made no allowance (a) for substitute business it might have developed or (b) the sales plaintiff might have made as sole distributor to the new distributors at a lower mark-up. As to (a), there was no direct evidence that the ALCOA business which plaintiff lost was replaced in the sense that plaintiff could not have handled any new business along with the lost ALCOA business. As to (b), this factor was apparently specifically allowed for in plaintiff's witnesses' testimony. However, allowing for the trial court's feel for the credibility of the pertinent proofs, and taking into account what we have just said, we are led to fix the plaintiff's monthly losses at $7,500, or a total for the 20 months of $150,000, with interest from October 1, 1971 (20 months after breach).
The trial court awarded defendant prejudgment interest on its counterclaim for $463,884.55, except to the extent of $154,408.60, that being the amount of the orders placed by plaintiff immediately prior to the announcement of the termination. As to the latter sum, interest was not to begin until September 1, 1970.
We conclude that prejudgment interest should not have been awarded to defendant on its counterclaim at all. Interest does not run on liquidated claims as a matter of course, but "in accordance with principles of equity", Deerhurst Estates v. Meadow Homes, Inc., 64 N.J. Super. 134, 155 (App. Div. 1960), certif. den. 34 N.J. 66 (1961). Under all the circumstances here obtaining, and recounted above, the equities preclude allowance of interest to the defendant.
We have considered all other contentions urged on both the appeal and the cross-appeal, and find none requiring comment.
On defendant's appeal the judgment is affirmed, with costs. On plaintiff's appeal the judgment is modified in accordance with this opinion, with costs to plaintiff.
*132 For affirmance (defendant's appeal) and for modification (plaintiff's appeal) Chief Justice HUGHES, Justices MOUNTAIN, SULLIVAN, PASHMAN and CLIFFORD and Judge CONFORD 6.
For reversal None.
|
24 F.3d 244NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.
Jane Ellen BENSON, Petitioner-Appellant,v.CENTRAL CALIFORNIA WOMEN'S FACILITY, WARDEN, Respondent-Appellee.
No. 93-15524.
United States Court of Appeals, Ninth Circuit.
Submitted April 14, 1994.*Decided April 29, 1994.
Before: SCHROEDER, D.W. NELSON AND CANBY, Circuit Judges.
ORDER
1
We affirm the judgment of the district court and deny petitioner's motion to enlarge the record.
2
Petitioner may file another habeas corpus petition in the district court and may make a timely motion to enlarge the record at the district court. To prevail on a motion to enlarge the record, Petitioner will have to show cause and prejudice for failing to bring the newly discovered evidence forward earlier.
3
IT IS SO ORDERED.
*
The panel unanimously find this case suitable for decision without oral argument. Fed.R.App.P. 34(a) and Ninth Circuit Rule 34-4
|
56 F.3d 77
Jerry Lewis Brownv.Ronald Champion, Attorney General for State of Oklahoma
NO. 94-5171
United States Court of Appeals,Tenth Circuit.
June 05, 1995
1
Appeal From: N.D.Okl.
2
AFFIRMED.
|
NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 20 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
SALVADOR BENITEZ-SORIANO, No. 17-71675
Petitioner, Agency No. A200-978-341
v.
MEMORANDUM*
WILLIAM P. BARR, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Argued and Submitted December 13, 2019
Seattle, Washington
Before: HAWKINS and McKEOWN, Circuit Judges, and PRATT,** District
Judge.
Salvador Benitez-Soriano (“Benitez-Soriano”) petitions for review of the
Board of Immigration Appeals’ (“BIA”) order of removal and reversal of the
Immigration Judge’s (“IJ”) grant of administrative closure. The parties are
familiar with the facts, so we do not repeat them here. We have jurisdiction under
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Robert W. Pratt, United States District Judge for the
Southern District of Iowa, sitting by designation.
8 U.S.C. § 1252, and we deny the petition.
We review de novo an appeal of purely legal questions or due process claims
from a BIA decision. Lianhua Jiang v. Holder, 754 F.3d 733, 738 (9th Cir. 2014).
A denial or grant of administrative closure is reviewed for abuse of discretion. See
Gonzales-Caraveo v. Sessions, 882 F.3d 885, 890 (9th Cir. 2018) (“Like a motion
to reopen or a motion for a continuance, administrative closure is a tool that an IJ
or the BIA must be able to use, in appropriate circumstances, as part of their
delegated authority, independence and discretion.”).
The BIA did not violate Benitez-Soriano’s due process rights when it
ordered that he be removed to Mexico, rather than remand proceedings to the IJ to
make a new determination with respect to removal. “Where the IJ has previously
determined that the alien is removable but grants cancellation of removal, the
BIA’s decision to reverse the cancellation of removal reinstates the initial finding
of removability, which, under the statute, is effectively an order of removal.”
Lolong v. Gonzales, 484 F.3d 1173, 1178 (9th Cir. 2007). Here, after finding
“clear, convincing and unequivocal” evidence warranting removability, the IJ
granted administrative closure. When the BIA reversed that grant of
administrative closure, it properly relied upon the IJ’s clear determination that
Benitez-Soriano was removeable to Mexico.
The BIA also did not violate Benitez-Soriano’s due process rights when it
2
entered both a voluntary departure order and a removal order. The BIA reissued
the IJ’s grant of voluntary departure. This reissuance was pursuant to 8 C.F.R.
§ 1240.26(d), which states that where the IJ “grant[s] a request made for voluntary
departure either prior to the completion of proceedings or at the conclusion of
proceedings, the immigration judge shall also enter an alternate order of removal.”
The BIA’s decision to enter both an order granting voluntary departure and an
order of removal is entirely consistent with the regulatory language.
Finally, the BIA did not abuse its discretion by reversing the IJ’s grant of
administrative closure. The BIA looked to the factors outlined in Matter of
Avetisyan, 25 I&N Dec. 688 (BIA 2012), and Matter of W-Y-U, 27 I&N Dec. 17
(BIA 2017), to evaluate whether administrative closure was warranted. It found
that the Department of Homeland Security had provided a persuasive reason to
proceed with the case—administrative closure would not progress the immigration
proceedings at issue—which, under Matter of W-Y-U, is the primary consideration
before the IJ or BIA. Id. at 20. The BIA’s reliance on this factor was not an abuse
of discretion.
The petition for review is DENIED.
3
|
454 F.2d 197
4 Fair Empl.Prac.Cas. 205, 4 Empl. Prac. Dec. P 7634J. D. THORNTON et al., Plaintiffs-Appellants, EqualEmployment Opportunity Commission, Intervenor-Appellant,v.EAST TEXAS MOTOR FREIGHT, INC., et al., Defendants-Appellees.
No.71-1303.
United States Court of Appeals,Sixth Circuit.
Jan. 20, 1972.
Charles L. Reischel, Washington, D. C., for appellant; Stanley P. Hebert, Gen. Counsel, John de J. Pemberton, Jr., Deputy Gen. Counsel, Julia P. Cooper, Chief, Appellate Section, Martin Slate, Atty., E. E. O. C., Washington, D. C., on brief.
Charles L. Reischel, Atty., E. E. O. C., Washington, D. C., on brief as amicus curiae.
Richard C. Hotvedt, Washington, D. C., and L. N. D. Wells, Jr., Dallas, Tex., for appellees; James W. Watson, Memphis, Tenn., Richard C. Hotvedt, Harry A. Rissetto, Washington, D. C., on brief for East Texas Motor Freight, Inc.; Morgan, Lewis & Bockius, Washington, D. C., of counsel.
Mullinax, Wells, Mauzy & Collins, by L. N. D. Wells, Jr., Dallas, Tex., on brief for International Brotherhood of Teamsters, Southern Conference of Teamsters and Teamsters Local 667.
Before KENT, Circuit Judge, O'SULLIVAN, Senior Circuit Judge, and ROTH,* District Judge.
PER CURIAM.
1
The United States Equal Employment Opportunity Commission, employing Rule 24(b), F.R.Civ.P., sought to intervene in a cause pending between J. D. Thornton and others against East Texas Motor Freight and Local 667 of the Teamsters Union. The motion for intervention was denied by District Judge Harry W. Wellford of the United States District Court for the Western District of Tennessee.
2
Plaintiffs were employees of defendant East Texas Motor Freight, and members of the defendant union. The complaint charged the company and the union with unlawful and discriminatory practices condemned by Title VII of the Civil Rights Act of 1964-42 U.S.C. Sec. 2000e et seq. Similar complaints had been made to the Equal Employment Opportunity Commission (EEOC) which, after investigation and in conformity with the mentioned Civil Rights Act, advised plaintiffs of their right to institute a civil action. They did so and the EEOC asked to be allowed to intervene. In denying the motion, the District Judge said:
3
"The Court recognizes that under Rule 24(b) Federal Rules of Civil Procedure, certain governmental agencies 'upon timely application may be permitted to intervene'. The Court further notes that the Attorney General is authorized to intervene in civil actions under Section 2000(e)-5(e) if the case is of general public importance, but that there is no similar provision allowing the Equal Employment Opportunity Commission to intervene. The Court is of the opinion, therefore, that the Commission cannot intervene in its own right.
4
"The disposition of this cause, however, might be greatly aided by the Commission's expertise and research, since it appears to the Court that the discriminatory practices allegedly prevailing in the trucking industry present a significant public concern.
5
"It is, therefore, ORDERED that the Commission's motion to intervene on its own right be denied with leave, however, to intervene in conjunction with and through intervention by the Office of the Attorney General.
6
"It is further ORDERED that the Commission may, in the alternative in its discretion, participate in this cause as amicus curiae."
7
In seeking to intervene, the EEOC employed Rule 24(b) of the Rules of Civil Procedure. That rule bears the heading "Permissive Intervention," and its first sentence reads:
8
"Upon timely application anyone may be permitted to intervene in an action:"
9
A motion under this rule is addressed to the discretion of the judge. We read the order entered here as stating that EEOC was not entitled to intervene as a matter of right and the denial of the motion was an exercise of the District Judge's discretion. We find no abuse in his exercise of such discretion.
10
Affirmed.
*
United States District Judge, sitting by designation
|
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
CHRIS M. TEAGLE GREGORY F. ZOELLER
Muncie, Indiana Attorney General of Indiana
J.T. WHITEHEAD
Deputy Attorney General
Indianapolis, Indiana
Apr 10 2014, 9:20 am
IN THE
COURT OF APPEALS OF INDIANA
MONTERIUS D. SHARP, )
)
Appellant-Defendant, )
)
vs. ) No. 05A02-1306-CR-522
)
STATE OF INDIANA, )
)
Appellee-Plaintiff. )
APPEAL FROM THE BLACKFORD CIRCUIT COURT
The Honorable Dean A. Young, Judge
Cause No. 05C01-1208-FC-285
April 10, 2014
MEMORANDUM DECISION - NOT FOR PUBLICATION
CRONE, Judge
Case Summary
Monterius Sharp appeals his convictions for class C felony escape, class A
misdemeanor carrying a handgun without a license, and three counts of class D felony
intimidation, following a jury trial. Sharp also appeals the aggregate four-year sentence
imposed by the trial court. Sharp claims that: (1) the trial court abused its discretion when it
admitted certain evidence at trial; (2) the trial court committed fundamental error when it
failed to declare a mistrial sua sponte based upon the improper behavior of a witness; (3) the
State presented insufficient evidence to support his convictions; and (4) his four-year
sentence is inappropriate in light of the nature of the offenses and his character. Finding
neither an abuse of discretion nor reversible error, and further concluding that Sharp has not
met his burden to demonstrate that his sentence is inappropriate, we affirm.
Facts and Procedural History
The facts most favorable to the convictions indicate that on August 12, 2012, Sharp,
his girlfriend Brittani Kirk, his brother Mauricio, and his other brother Courtney’s fiancée,
Jennifer Townsend, were all at the apartment complex in Hartford City where Townsend and
Courtney lived. Neighbors heard the four individuals outside arguing and yelling. Heidi
Mort was taking out garbage when she observed the group and saw Sharp standing next to a
vehicle and waving a handgun around. All of a sudden, Sharp started firing the weapon.
Mort went inside to call 911. Another neighbor, Richard Brown, was outside with his
grandchildren when he heard gunshots. Brown also saw the four individuals arguing.
Brown, who knew Mauricio, noticed that Mauricio was on a cell phone while a different
2
male in the group was holding a gun. Brown went inside to retrieve a cell phone to call
police. While still arguing with the group, Mauricio also called 911.
When Mort returned outside with her husband, she and her husband saw Sharp go
around the corner of one of the apartment buildings. Brown also saw the man holding the
gun go behind the buildings. When Sharp returned from behind the buildings, he was no
longer holding the gun.
Hartford City Police Department Officer Mark McKissack was the first officer to
arrive at the scene in response to a dispatch identifying two of the Sharp brothers as being
involved in a domestic disturbance or altercation and a report that shots had been fired.
Upon his arrival, Officer McKissack recognized all four individuals involved in the reported
disturbance. Officer McKissack retrieved a rifle from his trunk and ordered the four
individuals to get to the ground on their stomachs. Mauricio, Townsend, and Kirk all
complied, but Sharp refused. Sharp remained standing and yelled at Officer McKissack.
Sharp eventually sat on the ground. Both Mauricio and Townsend declared that it was Sharp
who had the gun. After repeated orders from Officer McKissack, Sharp finally rolled over
to his stomach. Officer McKissack then handcuffed Sharp and conducted a patdown search
for weapons. No weapon was discovered.
As Officer McKissack was handcuffing Sharp, Hartford City Police Sergeant Erick
Hawk arrived at the scene. Sergeant Hawk also recognized all four individuals involved in
the disturbance. Mauricio stated to Sergeant Hawk that he had called 911 and that Sharp was
the individual with a gun. All four individuals continued to scream and yell at each other
3
and at the officers. As Sergeant Hawk tried to speak with the others, Officer McKissack
escorted Sharp to his police vehicle and placed him in the back seat. The window was
cracked open, and Sharp screamed and yelled at Mort that “she would be sorry” for calling
the police. Tr. at 83-84. Officer McKissack urged Sharp to calm down and told him that “he
wasn’t under arrest yet.” Id. Officer McKissack told Sharp to just “sit tight” and that
“[r]ight now you’re being detained for our investigation.” Id. at 271. After speaking briefly
with witnesses who corroborated that Sharp had been firing a gun, Officer McKissack
returned to the police vehicle, read Sharp his Miranda rights, and asked him where he had
put the gun. Sharp responded that there was no gun and then stated that he wanted to talk to
an attorney. Officer McKissack ceased his conversation with Sharp and walked away to
resume the investigation.
Shortly thereafter, the officers looked up when they heard the horn of a passing
vehicle and noticed that Sharp had exited the police vehicle and was running down the street
in handcuffs. Sergeant Hawk chased Sharp and was able to catch him when Sharp’s pants
fell down around his ankles. Sharp was belligerent as he was being returned to the police
vehicle, telling the officers that they didn’t know “who they were f***ing with.” Id. at 280.
As Officer McKissack transported Sharp to jail, Sharp continued to yell, scream, kick, and
make threats. Townsend gave officers five shell casings that she found at the scene that she
believed came from Sharp’s gun. Officers located a sixth shell casing behind the apartment
buildings. Despite continued searching, officers were unable to locate the gun fired by
Sharp.
4
The State charged Sharp with: Count I, class C felony criminal recklessness; Count II,
class C felony escape; Count III, class A misdemeanor carrying a handgun without a license;
Count IV, class D felony pointing a firearm; Count V, class D felony intimidation; Count VI,
class D felony intimidation; Count VII, class D felony intimidation; and Count VIII, class D
felony intimidation. Sharp filed a motion to suppress evidence and, following a hearing, the
trial court denied the motion. Sharp filed a second motion to suppress evidence which the
trial court also denied following a hearing. The State subsequently filed a motion to dismiss
one of the intimidation counts, which motion the trial court granted.
A jury trial was held on February 5 and 6, 2013. Following the State’s presentation of
evidence, the trial court entered a directed verdict on Count I. At the conclusion of the trial,
the jury found Sharp guilty of Counts II, III, V, VI, and VII and not guilty of Count IV. The
trial court entered judgments of conviction accordingly. Following a sentencing hearing, the
trial court sentenced Sharp to the advisory sentence on all counts, to be served concurrently,
for a total sentence of four years. This appeal ensued.
Discussion and Decision
Section 1 – Admission of Evidence
Sharp contends that the trial court erred when it denied his pretrial motions to
suppress evidence. However, we note that he now appeals following a jury trial. Therefore,
the issue before us is whether the trial court abused its discretion in admitting the evidence at
trial. Lindsey v. State, 916 N.E.2d 230, 238 (Ind. Ct. App. 2009), trans. denied (2010). A
trial court has broad discretion in ruling on the admission or exclusion of evidence. Palilonis
5
v. State, 970 N.E.2d 713, 726 (Ind. Ct. App. 2012), trans. denied. An abuse of discretion
occurs when the trial court’s ruling is clearly against the logic, facts, and circumstances
presented. Id. When reviewing the admissibility of evidence, we do not reweigh evidence,
and we consider conflicting evidence most favorable to the trial court’s ruling. Meredith v.
State, 906 N.E.2d 867, 869 (Ind. 2009). We also defer to the trial court’s factual
determinations unless clearly erroneous. Id. However, we consider “afresh any legal
question of the constitutionality of a search or seizure.” Id.
Section 1.1 – Stop vs. Arrest
Sharp first asserts that he was “illegally detained” by officers in violation of the
Fourth Amendment to the United States Constitution and that all evidence obtained
subsequent to his illegal detention was inadmissible. Appellant’s Br. at 16. Sharp likens his
detention by officers to an arrest requiring probable cause, while the State argues that his
detention was more akin to a brief investigative stop requiring only reasonable suspicion.
Regardless of how the detention is characterized, we find no Fourth Amendment violation.1
The Fourth Amendment reads in part: “The right of people to be secure in their
persons, houses, papers, and effects against unreasonable searches and seizures, shall not be
violated[.]” This protection against unreasonable seizures includes seizure of the person.
1
Although Sharp briefly mentions Article 1, Section 11 of the Indiana Constitution, his argument fails
to adequately address the three factors that we balance to determine the reasonableness of a search or seizure
under our state constitution. See Litchfield v. State, 824 N.E.2d 356, 361 (Ind. 2005) (in determining
reasonableness of search or seizure we balance: (1) the degree of concern, suspicion, or knowledge that a
violation has occurred; (2) the degree of intrusion the method of the seizure imposed on the citizen’s ordinary
activities; and (3) the extent of law enforcement needs). Failure to make a cogent argument pursuant to Article
1, Section 11, constitutes waiver of the issue on appeal. Polk v. State, 822 N.E.2d 239, 245 n.5 (Ind. Ct. App.
2005), trans. denied; Ind. Appellate Rule 46(A)(8).
6
California v. Hodari D., 499 U.S. 621, 624-26 (1991). Specifically, there are two levels of
police investigation that implicate the Fourth Amendment. Edmond v. State, 951 N.E.2d 585,
588 (Ind. Ct. App. 2011). First, an officer may stop and briefly detain “a person for
investigative purposes if the officer has reasonable suspicion supported by articulable facts
that criminal activity ‘may be afoot.’” Armfield v. State, 918 N.E.2d 316, 319 (Ind. 2009)
(quoting Terry v. Ohio, 392 U.S. 1, 21 (1968)). An investigatory stop pursuant to Terry
permits a police officer to “temporarily freeze the situation in order to make an investigative
inquiry.” Johnson v. State, 766 N.E.2d 426, 429 (Ind. Ct. App. 2002), trans. denied.
Second, an officer may arrest a person if he has probable cause, which is “knowledge of facts
and circumstances which would warrant a man of reasonable caution to believe that the
defendant committed the criminal act in question.” Collins v. State, 509 N.E.2d 827, 830
(Ind. 1987). As our supreme court recently noted, “[t]he line between a Terry stop and a full-
blown custodial arrest is blurred by the tensions and uncertainty inherent in such encounters.”
Kelly v. State, 997 N.E.2d 1045, 1051 (Ind. 2013).
Here, Officer McKissack was the first officer to arrive on the scene in response to a
dispatch specifically identifying the Sharp brothers as involved in a domestic disturbance and
a report that several gunshots had been fired. Officer McKissack arrived at the scene,
displayed a rifle, and ordered all four individuals present to get to the ground on their
stomachs. Officer McKissack was familiar with the four individuals, including Sharp and
Mauricio, as he had been dispatched to the apartment complex on prior occasions regarding
domestic disturbances and/or altercations involving the same individuals. All of the
7
individuals complied with Officer McKissack’s order to get on the ground except Sharp.
Officer McKissack again ordered Sharp to comply. Although Sharp then sat on the ground,
he refused to comply with commands to get on his stomach. After repeated commands,
Sharp eventually rolled over to his stomach. When Sergeant Hawk arrived to aid Officer
McKissack, the scene was extremely volatile, as all four individuals were screaming and
yelling at each other and at the officers. After Mauricio and another witness identified Sharp
as the individual who had the gun and had fired the shots, Officer McKissack handcuffed
Sharp and patted him down for weapons. Although his patdown search did not reveal a
weapon, Officer McKissack placed Sharp in the back seat of his police vehicle while he
further investigated the incident.
It is beyond dispute that “an officer who stops a suspect on reasonable suspicion of
[an inherently dangerous] offense may conduct a protective search.” Holbert v. State, 996
N.E.2d 396, 400 (Ind. Ct. App. 2013), trans. denied (2014). Indeed, “[t]his right of the
officer is ‘automatic whenever the suspect has been stopped upon the suspicion that he has
committed, was committing, or was about to commit a type of crime for which the offender
would likely be armed.” Id. (citation omitted). Sharp concedes that Officer McKissack had
reasonable suspicion to justify the initial stop and protective search for weapons based upon
the fact that he was responding to reports of gunfire. Sharp insists, however, that Officer
McKissack’s subsequent behavior converted what began as a Terry stop into an arrest
because he handcuffed Sharp and placed him in the police vehicle.
8
Although both an arrest and a Terry investigatory stop interrupt a suspect’s freedom
and liberty of movement, a Terry interruption is presumably much less intrusive and for a
shorter duration than an arrest. Reinhart v. State, 930 N.E.2d 42, 46 (Ind. Ct. App. 2010).
Specifically, “an investigative detention must be temporary and last no longer than is
necessary to effectuate the purpose of the stop.” Finger v. State, 799 N.E.2d 528, 534 (Ind.
2003) (quoting Florida v. Royer, 460 U.S. 491, 500 (1983)). “In assessing whether a
detention is too long in duration to be justified as an investigative stop, we consider it
appropriate to examine whether the police diligently pursued a means of investigation that
was likely to confirm or dispel their suspicions quickly, during which time it was necessary to
detain the defendant.” United States v. Sharpe, 470 U.S. 675, 686 (1985).
Contrary to Sharp’s implication, the mere use of handcuffs does not convert a Terry
stop into a full arrest. See Wright v. State, 766 N.E.2d 1223, 1232 (Ind. Ct. App. 2002).
Moreover, placing a defendant in a police vehicle does not necessarily equate to an arrest
when the police action can be justified as the “least restrictive means available” for effecting
the investigation. See Berry v. State, 574 N.E.2d 960, 965 (Ind. Ct. App. 1991) (citation
omitted), trans. denied. Instead, we must examine the totality of the circumstances to
determine how to classify the officer’s actions. Reinhart, 930 N.E.2d at 46.
The facts here establish that Officer McKissack’s detention of Sharp did not last too
long and was justified in order for officers to complete their investigation and confirm or
dispel their suspicions quickly, while also ensuring officer and civilian safety. The record
indicates that the two officers on the scene were faced with an incredibly dangerous and
9
volatile situation. Sharp was belligerent and uncooperative with Officer McKissack’s
commands, and he was identified by his brother and another witness as just having fired a
gun. The four individuals involved in the disturbance, including Sharp, were screaming and
yelling at each other and at the officers. The officers knew that there was a weapon, but had
not yet located it. Under these circumstances, Officer McKissack’s action of handcuffing
Sharp and temporarily removing him from the group by placing him in the squad car was
necessary in order to calm the environment and permit the officers to further investigate.
Sharp’s detention constituted an investigatory stop supported by reasonable suspicion and
was not an arrest.
Even were we to conclude, as Sharp insists, that his detention was converted into an
arrest when Officer McKissack handcuffed him and placed him into the squad car, we would
still find no Fourth Amendment violation. “[A] warrantless arrest by a law officer is
reasonable under the Fourth Amendment where there is probable cause to believe that a
criminal offense has been or is being committed.” Devenpeck v. Alford, 543 U.S. 146, 152
(2004). Probable cause exists where the facts and circumstances within the officers’
knowledge and of which they had reasonably trustworthy information are sufficient in
themselves to warrant a person of reasonable caution to believe that an offense has been or is
being committed. State v. Gilbert, 997 N.E.2d 414, 417 (Ind. Ct. App. 2013) (citation
omitted). The facts stated above, which were known to the officers at the time, were
sufficient in themselves to warrant a person of reasonable caution to believe that Sharp had
committed a crime. Sharp was involved in a domestic dispute during which shots were fired,
10
Sharp was uncooperative with police on the scene, and two of the individuals involved in the
dispute identified Sharp as the shooter. Based upon these facts, Officer McKissack had
probable cause to arrest Sharp. We find no Fourth Amendment violation. Accordingly, Sharp
has not demonstrated that the trial court abused its discretion when it admitted evidence
obtained after his detention.2
Section 1.2 – Miranda Warning and Right to Counsel
Sharp also contends that the trial court abused its discretion when it admitted into
evidence State’s Exhibit 9, which consisted of a statement made by him to police the day
after the incident occurred for which he was arrested.3 He argues that his statement was
admitted in violation of his Miranda rights under the Fifth Amendment to the United States
Constitution.
“The Fifth Amendment privilege against self-incrimination prohibits admitting
statements given by a suspect during ‘custodial interrogation’ without a prior [Miranda]
warning.” Ritchie v. State, 875 N.E.2d 706, 716 (Ind. 2007). “When a subject is in custody,
Miranda requires that he be informed of the right to the presence and advice of counsel
during custodial interrogation by the police, of the right to remain silent, and that any
2
We note that Sharp does not challenge the admission of any evidence obtained on his person or
incident to his eventual arrest, as no such evidence was recovered. Instead, he appears to challenge the
admission of any evidence recovered at the scene, which included only witness statements and six shell
casings, as fruit of the poisonous tree. See Clark v. State, 994 N.E.2d 252, 266 (Ind. 2013) (as general rule,
evidence obtained pursuant to unlawful seizure must be excluded under the fruit of the poisonous tree
doctrine). Because Sharp’s detention was lawful, the fruit of the poisonous tree doctrine is inapplicable.
3
Although Sharp also references the officers’ testimony regarding statements he made on the day of
the incident, he did not object to that testimony during trial. Accordingly, the issue is waived. See Kubsch v.
State, 784 N.E.2d 905, 923 (Ind. 2003) (failure to object at trial to admission of evidence results in waiver of
that issue on appeal).
11
statement he makes may be used as evidence against him.” Collins v. State, 873 N.E.2d 149,
155 (Ind. Ct. App. 2007). Moreover, if the accused requests counsel, the police must cease
questioning until an attorney has been made available or until the accused initiates further
conversation with the police. Sauerheber v. State, 698 N.E.2d 796, 801 (Ind. 1998) (citing
Edwards v. Arizona, 451 U.S. 477, 482 (1981)). If the accused “initiates ‘further
communication, exchanges, or conversations’ with law enforcement, then the individual may
be further interrogated without counsel present.” Hartman v. State, 988 N.E.2d 785, 788 (Ind.
2013) (quoting Edwards, 451 U.S. at 484-85).
First, contrary to Sharp’s assertion that he was not given Miranda warnings at any
time, Officer McKissack testified that he gave Sharp a Miranda warning on the day of the
incident when Sharp was in the back seat of the police vehicle. Indeed, during the hearing on
Sharp’s second motion to suppress, the parties stipulated that Sharp had been advised of his
Miranda rights and that, in response to Officer McKissack’s questioning regarding the
location of the gun, Sharp invoked his right to remain silent and requested an attorney.
Officer McKissack honored Sharp’s request and immediately ceased any questioning.
The evening after the incident, Officer McKissack and Sergeant Hawk responded to a
call to transport Sharp, who had gone to the hospital at some point after his arrest, from the
hospital back to the Blackford County Security Center. When the officers arrived at the
hospital and encountered Sharp, Sharp initiated an exchange with the officers by immediately
asking them, “How did you get probable cause?” State’s Ex. 9. Officer McKissack restated
the question to Sharp, apparently to determine if Sharp truly wanted a response. When Sharp
12
asked the question again, Officer McKissack responded that he went before a judge with the
evidence and that a judge signed the probable cause affidavit and set bond. Sharp then
exchanged questions and answers with the officers. During the conversation, the officers
asked Sharp where they might be able to find the handgun he had used during the incident.
Sharp referenced a few locations where a handgun might be found but essentially denied
committing any crimes.
It is clear from our review of State’s Exhibit 9 that Sharp, and not the officers,
initiated conversation when he began asking the officers specific questions about his case.
However, the initiation of further communication by a defendant, standing alone, is
insufficient to establish waiver of the previously asserted right to counsel. Osborne v. State,
754 N.E.2d 916, 922 (Ind. 2001). The inquiry turns on whether, under the totality of the
circumstances, there is a knowing and intelligent waiver of the right to counsel. Storey v.
State, 830 N.E.2d 1011, 1018 (Ind. Ct. App. 2005). This inquiry requires a review of the
record for evidence of inducement by the way of violence, threats, promises, or other
improper influences. Id.
Under the facts as presented here, we need not even reach such an inquiry.
Significantly, Sharp fails to direct us to any information regarding his offenses, inculpatory
or exculpatory, that he revealed during his initiated exchange with the officers. Moreover, it
is well settled that not every error in the admission of evidence requires reversal. Carr v.
State, 934 N.E.2d 1096, 1107 (Ind. 2010). Statements obtained in violation of the federal
constitution and improperly admitted are subject to harmless error analysis. Anderson v.
13
State, 961 N.E.2d 19, 28 (Ind. Ct. App. 2012), trans. denied. The reviewing court must be
satisfied that the error did not contribute to the verdict, that is, that the error was unimportant
in relation to everything else the jury considered on the issue in question. Morales v. State,
749 N.E.2d 1260, 1267 (Ind. Ct. App. 2001).
Sharp’s convictions are supported by substantial independent evidence of guilt such
that there was no substantial likelihood that his statements to police the day after his arrest
contributed to his convictions. First, Sharp’s statement bore no relation to his convictions for
escape or intimidation. Regarding his conviction for carrying a handgun without a license,
the lion’s share of the State’s evidence came from numerous witnesses who identified Sharp
as the individual who both possessed and fired a gun during the domestic disturbance.
Accordingly, any error in the admission of Sharp’s statement would have been harmless, as it
was unimportant in relation to the other evidence considered by the jury.
Section 2 – Witness’s Improper Behavior
Sharp next claims that one of the State’s key witnesses, his brother Mauricio,
“interrupted the proceedings” to such an extent that Sharp was entitled to a mistrial.
Appellant’s Br. at 28. The record indicates that Mauricio walked into the courtroom during
opening statements, and the trial court ordered him to leave. Thereafter, during defense
counsel’s cross-examination of Townsend, the court paused briefly for a bench discussion,
noting that Mauricio had “been at every single window and walking around and I hear
talking.” Tr. at 43. The court instructed an officer, “Can you get him back in that conference
room, shut the door and assign some officer to stay with him? He’s not to leave that room or
14
do anything until he’s brought in here.” Id. Finally, at the outset of his own testimony,
Mauricio attempted to answer a cell phone call and was behaving strangely. The trial court
dismissed the jury and, after a bizarre and comical exchange between Mauricio, the trial
court, and counsel for both parties, the court instructed Mauricio to behave appropriately and
complete his testimony. After the jury returned, Mauricio testified very briefly and was
released. 4
Sharp admits that he did not request a jury admonishment or move for a mistrial based
upon Mauricio’s behavior, and therefore has waived the issue on appeal. See Berkman v.
State, 976 N.E.2d 68, 74 (Ind. Ct. App. 2012) (when faced with a circumstance that
defendant believes might warrant mistrial, correct procedure is to request admonishment, and
if admonishment will not be sufficient to cure error, then move for mistrial; failure to request
admonishment or move for mistrial results in waiver on appeal), trans. denied (2013), cert.
denied. Thus, Sharp relies on the fundamental error doctrine. The fundamental error doctrine
is extremely narrow and applies only when the error constitutes a blatant violation of basic
principles, the harm or potential for harm is substantial, and the resulting error denies the
defendant fundamental due process. Delarosa v. State, 938 N.E.2d 690, 694 (Ind. 2010).
The fundamental error exception is available only in egregious circumstances. Id. Indeed,
“[f]undamental error must be of such magnitude to persuade the reviewing court that the
defendant could not possibly have received a fair trial or that the verdict is clearly wrong or
of such dubious validity that justice cannot permit it to stand.” Brown v. State, 799 N.E.2d
4
It appears that the State used Mauricio’s testimony solely to introduce his 911 call into evidence.
15
1064, 1067 n.3 (Ind. 2003) (quoting Guy v. State, 755 N.E.2d 248, 258 (Ind. Ct. App. 2001),
trans. denied, (2002)).
We disagree with Sharp’s assertion that, under the circumstances presented, the trial
court should have declared a mistrial sua sponte and that its failure to do so constituted
fundamental error. While Mauricio’s conduct during the proceedings was at times
unbefitting and disruptive, Sharp has failed to demonstrate that Mauricio’s conduct resulted
in an unfair trial. As noted by the State, Mauricio’s antics were treated reasonably and
appropriately by the trial court, which minimized any potential for harm. Mauricio’s
behavior and the trial court’s response to that behavior certainly did not rise to the level of
egregious circumstances contemplated by the fundamental error doctrine.5 We find no
reversible error.
Section 3 – Sufficiency of the Evidence
Sharp asserts that the State presented insufficient evidence to sustain his convictions
for escape, carrying a handgun without a license, and intimidation. When reviewing the
sufficiency of the evidence, we consider only the probative evidence and reasonable
inferences supporting the verdict. Boggs v. State, 928 N.E.2d 855, 864 (Ind. Ct. App. 2010),
trans. denied. We neither reweigh the evidence nor assess witness credibility. Id. It is not
5
Sharp maintains that Mauricio violated the trial court’s separation of witnesses order because one of
his interruptions occurred during Townsend’s testimony. Our review of the record does not reveal that
Mauricio heard any of Townsend’s testimony or that he was influenced by that testimony. See Harrington v.
State, 584 N.E.2d 558, 562 (Ind. 1992) (“The primary purpose for separation of witnesses is to prevent them
from gaining knowledge from the testimony of other witnesses and adjusting their testimony accordingly.”).
Even assuming arguendo that Mauricio improperly heard or gained knowledge from Townsend’s testimony, as
stated above, Sharp has failed to demonstrate that he was deprived of a fair trial as a result.
16
necessary that the evidence overcome every reasonable hypothesis of innocence, and we will
affirm the defendant’s conviction unless no reasonable factfinder could find the elements of
the crime proven beyond a reasonable doubt. Id. If there is substantial evidence of probative
value to support the conviction, it will not be set aside. Jones v. State, 783 N.E.2d 1132,
1139 (Ind. 2003).
Section 3.1 – Escape
Indiana Code Section 35-44.1-3-4(a) provides in relevant part that a person “who
intentionally flees from lawful detention commits escape, a Class C felony.” Sharp concedes
that the evidence demonstrated that he intentionally fled from law enforcement. His sole
argument is that his detention was in violation of the Fourth Amendment, and therefore the
State failed to establish that his detention was lawful. “Lawful detention” includes an
“arrest” as well as “any other detention for law enforcement purposes.” Ind. Code § 35-41-1-
18. Here, Sharp was clearly detained by officers for law enforcement purposes as they
briefly investigated the scene of a domestic disturbance involving gunfire and in which Sharp
had been identified as the shooter. As we concluded in Section 1, Sharp’s detention was not
in violation of the Fourth Amendment because his detention was supported by both
reasonable suspicion and probable cause. Accordingly, his detention was lawful. The State
presented sufficient evidence to support Sharp’s conviction for escape.
Section 3.2 – Carrying a Handgun Without a License
Indiana Code Section 35-47-2-1 provides that “a person shall not carry a handgun in
any vehicle or on or about the person’s body without being licensed … to carry a handgun.”
17
A person who violates this section commits a class A misdemeanor. Ind. Code § 35-47-2-
23(c). Sharp acknowledges that he did not have a license to carry a handgun. He maintains,
however, that the officers never recovered the weapon, and thus the State failed to prove that
he carried a handgun on his person.
A conviction for carrying a handgun without a license may rest on proof of actual or
constructive possession. Person v. State, 764 N.E.2d 743, 750 (Ind. Ct. App. 2002), trans.
denied. Witness Heidi Mort testified that, on the day of the domestic disturbance, she saw
several individuals arguing and Sharp “waving a gun around.” Tr. at 78. She stated that
Sharp then put his hand up and “started shooting” the “medium-sized pistol.” Id. at 78, 81.
Additionally, two of the individuals involved in the disturbance, Mauricio and Townsend,
informed officers that Sharp had a gun and had been firing it. Despite direct testimony
establishing his actual possession of a handgun, Sharp challenges witness credibility and asks
that we reassess it in his favor. Such a task is not within our prerogative on appeal. See
Boggs, 928 N.E.2d at 864. The State presented sufficient evidence to sustain Sharp’s
conviction for carrying a handgun without a license.
Section 3.3 – Intimidation of Officer McKissack and Sergeant Hawk6
To convict Sharp of two counts of class D felony intimidation regarding Officer
McKissack and Sergeant Hawk, the State was required to prove that Sharp communicated
threats to Officer McKissack and Sergeant Hawk that placed them in fear of retaliation for a
6
Sharp was also convicted of the intimidation of witness Heidi Mort. Although he claims that the
State also presented insufficient evidence to sustain that conviction, he fails to mention any evidence or
develop any argument regarding that conviction. Consequently, he has waived our review of the issue.
Whaley v. State, 843 N.E.2d 1, 18 n.15 (Ind. Ct. App. 2006), trans. denied.
18
prior lawful act. See Ind. Code § 35-45-2-1(a)(2). “Whether a communication is a threat is
an objective question for the trier of fact.” Ajabu v. State, 677 N.E.2d 1035, 1041 (Ind. Ct.
App. 1997), trans. denied.
Officer McKissack testified that as he and Sergeant Hawk were trying to get Sharp
back into the police vehicle after his escape, Sharp told the officers that “we didn’t know
who we were f***ing with.” Tr. at 280. While being transported to jail, Sharp told Officer
McKissack that he knew where both Officer McKissack and Sergeant Hawk lived. He stated
that he knew Sergeant Hawk’s wife by name and that “he knew people in Chicago and that
[the officers] didn’t know who we were screwing with.” Id. at 281. Sharp does not dispute
this testimony and merely asserts that the scene of the domestic disturbance was “chaotic”
and that it is unlikely that he could have clearly communicated any threats to the officers.
Again, Sharp merely invites us to reweigh the evidence, which we will not do. See Boggs,
928 N.E.2d at 864. The State presented sufficient evidence for the jury to find Sharp guilty
of the intimidation of Officer McKissack and Sergeant Hawk.
Section 4 – Inappropriate Sentence
Sharp requests that we reduce his sentence. Pursuant to Indiana Appellate Rule 7(B),
we may revise a sentence authorized by statute if, after due consideration of the trial court’s
decision, we find that the sentence “is inappropriate in light of the nature of the offense and
the character of the offender.” The defendant bears the burden to persuade this Court that his
or her sentence is inappropriate. Childress v. State, 848 N.E.2d 1073, 1080 (Ind. 2006).
“[W]hether we regard a sentence as appropriate at the end of the day turns on our sense of
19
culpability of the defendant, the severity of the crime, the damage done to others, and myriad
other factors that come to light in a given case.” Cardwell v. State, 895 N.E.2d 1219, 1224
(Ind. 2008).
When considering the nature of the offense, the advisory sentence is the starting point
to determine the appropriateness of a sentence. Anglemyer v. State, 868 N.E.2d 482, 494
(Ind. 2007), clarified on reh’g, 875 N.E.2d 218. Sharp was convicted of one class C felony,
three class D felonies, and one class A misdemeanor. The highest felony for which Sharp
was convicted, class C felony escape, has a sentencing range between two and eight years,
with the advisory sentence being four years. Ind. Code § 35-50-2-6. The trial court imposed
the advisory sentence for each of his convictions and ordered that his sentences be served
concurrently, for a total sentence of four years. Although Sharp points out that no person
was injured as a result of his crimes, he fails to explain how imposition of the advisory
sentence on each of his crimes was inappropriate based upon the nature of those offenses.
He brandished and fired a weapon in a crowded apartment complex, escaped from the police
who were summoned to help, and then threatened the officers and one of the witnesses.
Sharp has not demonstrated that the nature of these crimes warrants a reduction below the
advisory sentence.
Regarding his character, the record reveals that Sharp has two prior misdemeanor
convictions, one involving a handgun. While his criminal history is by no means extensive,
such history, which includes a prior conviction involving a handgun, does not reflect
favorably on his character. See Richardson v. State, 906 N.E.2d 241, 248 (Ind. Ct. App.
20
2009) (when reviewing criminal history, among other things, we look to any similarity or
dissimilarity to the present offense that might reflect on a defendant’s culpability). Sharp’s
sole argument regarding his character is essentially a request that we reconsider the
mitigating weight of his young age, lack of prior felony convictions, and his remorse, and
that we determine that the trial court should have imposed the minimum sentence on each
count rather than the advisory sentence.
To the extent that Sharp argues that the trial court assigned improper weight to
mitigating factors, such a claim is not available for appellate review. Lamar v. State, 915
N.E.2d 193, 196 (Ind. Ct. App. 2009). Moreover, we observe that an argument pursuant to
Appellate Rule 7(B), as Sharp’s argument is framed, involves an analysis distinct from that
of a claim that aggravators and mitigators were improperly recognized during sentencing.
King v. State, 894 N.E.2d 265, 267 (Ind. Ct. App. 2008). Because Sharp frames his argument
solely pursuant to Appellate Rule 7(B), we so confine our consideration. We remind him that
“the question under Appellate Rule 7(B) is not whether another sentence is more appropriate;
rather, the question is whether the sentence imposed is inappropriate.” Id. at 268. Sharp has
not met his burden to demonstrate that his four-year sentence is inappropriate. His
convictions and sentence are affirmed.
Affirmed.
BAKER, J., and NAJAM, J., concur.
21
|
477 F.2d 428
155 U.S.App.D.C. 259
UNITED STATES of America, Appellant,v.Lonnie GOODING, Appellee.UNITED STATES of America, Appellant,v.Leon F. BARNETT, Appellee.
Nos. 71-1669, 71-1945.
United States Court of Appeals,District of Columbia Circuit.
Argued Oct. 25, 1972.Decided March 26, 1973.Rehearing Denied May 11, 1973.
Guy H. Cunningham, III, Asst. U. S. Atty., with whom Thomas A. Flannery, U. S. Atty., at the time the brief was filed, John A. Terry and Gregory C. Brady, Asst. U. S. Attys., were on the brief, for appellant. Harold H. Titus, Jr., U. S. Atty., also entered an appearance for appellant. Kenneth Michael Robinson, Washington, D. C., entered an appearance for appellant in No. 71-1945.
Herbert A. Rosenthal, Jr., Washington D. C. (appointed by this Court), for appellee in No. 71-1669.
James A. Treanor, III, Washington, D. C., with whom Suzanne Meyer, Washington, D. C. (both appointed by this Court), was on the brief for appellee in No. 71-1945.
Before FAHY, Senior Circuit Judge, and ROBINSON and WILKEY, Circuit Judges.
WILKEY, Circuit Judge:
1
These cases arise on appeal by the United States from orders of the District Court suppressing certain evidence for use at trial on indictments for violations of the federal narcotics laws.1 The orders of the District Court rested on the view that the evidence was seized at night pursuant to warrants which failed to meet the statutory prerequisites for nighttime execution.2
I. The Applicable Statute
2
Just which statute's requirements were applicable has been a matter of some debate. We can sympathize with U. S. District Judge Gesell's feeling that "[t]he search warrant statutes of possible application to narcotics searches in this jurisdiction are a bramblebush of uncertainties and contradictions."3 Unfortunately, in its search for clarity, the District Court wandered into the briar patch and came to a result, in both cases, with which we cannot agree.
3
There are four potentially applicable standards which relate to the showing necessary before nighttime searches may be authorized. Two of these provisions deal with nighttime search as a general matter. The District of Columbia Court Reform and Criminal Procedure Act of 1970, 23 D.C.Code Secs. 521-523 (Supp. V, 1972)4 provides that a warrant may direct execution of the search at any time of the day or night on certain specified showings of need, which were admittedly not made in this case.5 Rule 41(c) of the Federal Rules of Criminal Procedure allowed authorization of service anytime "if the affidavits are positive that the property . . . is in the place to be searched." Since the magistrates found only probable cause, the requisite "positivity" was admittedly lacking in the cases at bar.
* * *
Two other provisions deal with nighttime search in the more limited area of offenses "involving controlled substances." Title 33 of the D.C.Code Sec. 414(h) (1967) as amended (Supp. V, 1972) provides that, when such offenses are involved, "the judge or commissioner shall insert a direction that it may be served at any time of the day or night." However, Sec. 414(c) arguably imposes an additional requirement that the complainant and any witnesses must be examined on oath before the warrant is issued. There is no showing that this requirement was met in these cases, so we will proceed on the assumption that Sec. 414 would not validate the search warrants challenged here.6
Finally, the federal narcotics search warrant provision, 21 U.S.C. Sec. 879(a), provides that
A search warrant relating to offenses involving controlled substances may be served at any time of the day or night if the judge or United States magistrate . . . is satisfied that there is probable cause to believe that grounds exist for the warrant and for its service at such time.
Since none of the other statutory standards were met, these search warrants can only be held valid if Sec. 879(a), the specific federal statute, is the applicable provision.7
Judge Gesell in Gooding held that the general nighttime search provisions in the D.C.Code govern and require a special showing of need to search at night even in narcotics cases. In Barnett Judge Corcoran agreed. The District Court's holding in Gooding was apparently based on the ground that a statute which is more specific and more recent should govern when conflict appears between such a statute and an older or more general law.8 While we agree with that general principle, we disagree with its application in this case.
Although, as the District Court noted, 23 D.C.Code Sections 521-523 are more specific in the sense that they apply only to the limited geographical area of the District of Columbia, 21 U.S.C. Sec. 879(a) is clearly the more specific or "special" provision as to subject matter-search in narcotics cases. Although Sec. 879(a) went into effect before Secs. 521-523, Sec. 879(a) was considered and passed after Secs. 521-523.9 Thus, the federal narcotics search statute-Sec. 879(a)-is in fact both the more specific and the more recent provision.10
Viewed in that light, the apparent inconsistency between the general local nighttime search statute and the special federal nighttime narcotics search statute disappears.11 Sections 521-523 of Title 23 of the D.C.Code were enacted because (1) there was no general D.C. provision relating to the time for execution of search warrants12 and (2) Congress desired to insert criteria of "need" which were felt superior to the "positivity" test found in the Federal Rules. There is no reason to believe that narcotics searches were to be affected because, in contrast, (1) there was already a specific federal provision relating to narcotics searches (18 U.S.C. Sec. 1405(1)), and (2) the "positivity" requirement needed no revision in regard to narcotics searches because it had not been applied in that context.13 When Congress later turned to the specific problem of standards governing the issuance of warrants by U.S. magistrates in narcotics cases, Sec. 879(a) was its response to this narrower problem and that section must govern in these cases.14
II. Application of the Statute
Since we conclude that Sec. 879(a) provides the relevant tests by which to judge the validity of these search warrants, the obvious next inquiry is whether those tests were met. Appellees contend that Sec. 879(a) requires a special showing of a need to search at night. They argue that the magistrate must be satisfied that there is probable cause to believe that grounds exist both "for the warrant" and "for its service at such time" (at any time of the day or night). The Government contends that no special showing of need is required and admit that, if it is, no such showing was made and the warrants were invalid.15
If appellees' interpretation of the words of the statute were the only possible reading, we would have to agree with their position. However, the requirement of probable cause to search at night does not necessarily call for a special showing of need for nighttime as opposed to daytime search. Rather, at least as natural an interpretation would imply that this added clause, "for its service at such time," requires only grounds for service at night in the sense that the narcotics sought will probably be present on the named property at night.16
Confronted with this ambiguity, we can gain guidance from the legislative history. Section 879(a) is a direct descendant of 18 U.S.C. Sec. 1405(1).17 Indeed, the House Report notes thatSubsection (a) of this section [21 U. S.C. Sec. 879] incorporates 18 U.S.C. Sec. 1405 and authorizes service of a search warrant at any time of the day or night if probable cause has been established to the satisfaction of the judge or U.S. Magistrate issuing the warrant.18
Section 1405(1) was uniformly interpreted to require only a showing of probable cause to search in order for a warrant relating to narcotics to be executed at night.19
Despite the clear legislative history reflecting congressional intent not to change the prior law in this area,20 appellees argue that the change in wording must be viewed as significant. We cannot agree. If the necessary "grounds . . . for service at such time" involve more than a showing that the narcotics will be present on the premises at any time of the day or night, then presumably the additional showing required would concern a need to search at night. Appellees argue as much by suggesting that Sec. 879(a) incorporates the standards set forth in the general D.C. nighttime search provision. However, the exact wording of Sec. 879(a) was proposed by the Justice Department. It is inconceivable that, confronted with a crescendoing nationwide drug abuse problem, the Department would recommend to Congress a statute making the obtaining of nighttime search warrants just as difficult for narcotics offenses as in any other case.21
If we accepted appellees' argument that the federal statute's requirements for nighttime search in narcotics cases are precisely coterminous with those of the local statute which applies in all types of cases, then whatever distinction Congress sought to establish by enacting a separate and special statute regarding federal narcotics offenses would be completely obliterated. And since we are construing a federal statute, that construction would be of uniform national application. On the other hand, if appellees concede that Sec. 879(a) does set up its own federal standard, and if the showing required is less than that set out in 23 D.C.Code Secs. 521-523, but more than mere probable cause to believe that the drugs will be found "at such time," then no source for the applicable standard appears.
Appellees are essentially arguing that great significance should be given to one possible reading of new language when an ambiguity is present, even when the legislative history suggests no intent to change the meaning of the section. Our refusal to follow that reasoning is fortified by the fact that the very same ambiguity was potentially present in the previous statute. Section 1405 provided that a search warrant could be served at any time if "there is probable cause to believe that grounds for the application exist." It is possible to read this statute to require a showing of need to search at night, since the "application" could be interpreted as seeking both (1) issuance of the warrant and (2) permission to search any time of the day or night, just as "probable cause to believe that grounds exist" (Sec. 879(a)) has been argued by appellees to require showings of "probable cause" and "grounds" both "for the warrant" and "for its service at such time."
The courts, of course, refused to read Sec. 1405 that way. They required only a showing of probable cause to believe that narcotics would be found.22 Judges and legislators thoroughly conversant with the special, almost unique, problems of narcotics law enforcement have long recognized that effective searches for narcotics reasonably require different methods and timing. This is basically the reason that both the U.S.Code and the D.C.Code contain two distinct provisions, one for general searches, the other for narcotics searches. Deferring to "a legislative judgment that . . . special facts existed in searches concerned with federal narcotics violations," one court noted that the "conclusory statements about the need for speed and surprise that [a statutory construction parallel to the one sought by appellees here] . . . would cause to appear on affidavits for search warrants would be pointless."23
There is absolutely no showing that this "legislative judgment" changed in any respect during the enactment of Sec. 879(a) to replace Sec. 1405.24 All the legislative history is to the contrary. Surely such a significant departure from prior policy would have drawn comment in the Senate and House Reports-especially in the context of a statutory scheme which had the overall purpose of much more stringent and effective suppression of narcotics trafficking. Since the new language cited by appellees does not even present a novel ambiguity, we must conclude that the previous meaning of the section "incorporated" in Sec. 879(a) remained intact.
It has been argued that a greater showing of grounds to search at night was intended because Sec. 879 applies in a comprehensive fashion to all offenses involving "controlled substances." In contrast, Sec. 1405 applied to only certain specified narcotics offenses. Appellees suggest (without, however, pointing to any concrete evidence of such congressional intent) that a tougher standard for nighttime search was established as the quid pro quo in a legislative compromise extending the availability of nighttime search authorizations to a larger number of offenses. This argument proves too much. Although the "probable cause" required to be shown by Sec. 879 could conceivably be characterized as ambiguous and potentially read to include probable cause to believe that special need exists to search at night, the one thing that is clearest about Sec. 879 is that it is meant to apply the same standard for nighttime search authorizations with respect to every type of controlled substance.
It is true that reading Sec. 879 to incorporate the showing previously required by Sec. 1405 does make obtaining nightime search warrants easier with regard to some categories of drugs. However, the alternative reading, espoused by appellees, suggests that the statute was intended to make nighttime searches more difficult in hard narcotics cases. As noted earlier, the Justice Department proposed the exact language of Sec. 879. This argument from expanded coverage necessarily suggests that the Department desired a retreat from the test of mere probable cause to search in hard narcotics cases, and that the Department accomplished this with no comment in the legislative history, in the context of a measure aimed at increasing the effectiveness of law enforcement with regard to drugs. The Justice Department's proposals have sometimes been the subject of inaccurate interpretation and speculation, but the suggestion that the Justice Department meant to make nighttime searches for heroin more difficult is indeed novel and patently off the mark.
Another attempt to suggest that the general legislative intent was compatible with a greater required showing of grounds to search at any time implies that such a showing would be quite easy in heroin cases and would thus not impede law enforcement. That argument proves too little. Since the showing required by the reading of Sec. 879 which appellees seek is a showing of grounds to search "at such time," it must be noted that the requirement is of grounds to search "at any time of the day or night." That is quite different from a requirement that there be grounds to search "at night."
The statute's actual phrasing implies that the real interest required to be demonstrated is the interest in speed and surprise-grounds for search as soon as tactical considerations warrant despite the fact that the earliest possible moment may be after dark. If this showing would be easy in heroin cases, we can see no reason why it would not be just as routine in any other case involving controlled substances. Speed and surprise are equally necessary to seize any type of drug which it is generally illegal to possess. Since all controlled substances can be the subject of abuse and may have to be ferreted out in "underground" markets, there is nothing about the nature of the drug sought which renders the need for speed and surprise any less likely or any less easily shown. Therefore the expanded applicability of Sec. 879 to a larger variety of controlled substances does not necessarily imply a departure from the standards of the previous "incorporated" section.
At worst, requiring a special showing of need to search "at any time of the day or night" would make nighttime search for narcotics more difficult. At best, and more probably, acceptance of appellees' arguments here would generate pointless and conclusory statements in future applications for warrants. Neither result would comport with the sound and clear legislative intent which was expressed when Sec. 879(a) was enacted.
We hold that the applicable statute, 21 U.S.C. Sec. 879(a), requires only a showing of probable cause to believe that the narcotics will be found on the premises at any time of the day or night. Since both search warrants clearly met this standard,25 the District Court's grant of the motions to suppress in these cases must be reversed and the cases are remanded for further proceedings consistent with this opinion.
So ordered.
FAHY, Senior Circuit Judge, concurring:
I concur in the result reached by Judge Wilkey. I also concur generally in his opinion. In reaching the same conclusion, however, I have followed the course now stated, which is similar to but somewhat different from that adopted by Judge Wilkey.
Rule 41(c) of the F.R.Crim.P., when each of the search warrants in these cases was issued, provided as follows with respect to issuance and contents:
The warrant shall direct that it be served in the daytime, but if the affidavits [establishing the grounds for issuing the warrant] are positive that the property is on the person or in the place to be searched, the warrant may direct that it may be served at any time . . . .
Subparagraph (g) of the Rule provided:
This rule does not modify any act, inconsistent with it, regulating search, seizure and the issuance and execution of search warrants in circumstances for which special provision is made. . . .
Special provision was made by former section 1405 of Title 18 of the United States Code1 for any case involving specified violations of the federal narcotics laws.2 United States v. Stallings, 413 F.2d 200 (7th Cir.), cert. denied, 396 U.S. 972, 90 S.Ct. 460, 24 L.Ed.2d 440 (1969); United States v. Tucker, 262 F.Supp. 305 (S.D.N.Y.1966). In such cases section 1405(1) provided:
a search warrant may be served at any time of the day or night if the judge or the United States Commissioner issuing the warrant is satisfied that there is probable cause to believe that the grounds for the application exist. . . .
The Managers on the part of the House, in referring to section 1405, stated that the restrictions governing the issuance of night search warrants are thus liberalized with respect to specified laws relating to narcotic drugs and marijuana, "so that a search warrant may be issued in any such case at any time of the day or night if the judge or the United States Commissioner is satisfied that there is probable cause to believe that the grounds for the application exist." Conference Rep.No.2546, 84th Cong., 2d Sess., 16 (1956), U.S.Code Cong. & Admin.News, p. 3320. The "positiveness" requirement of Rule 41(c) was referred to as inflexible and archaic, giving the peddler a distinct advantage over law enforcement forces and hampering efforts to deal with narcotics racketeering. S.Rep.No.1997, 84th Cong., 2d Sess., 8-9 (1956). The Report continues: "the element of 'positiveness' [of Rule 41] is no longer required and 'probable cause' alone is enough to obtain a night search warrant in narcotics cases . . . ." Id. at 9.
The "positiveness" previously required of the affidavits by Rule 41(c) was that "the property is on the person or in the place to be searched," as to which, under section 1405(1), the issuing judge or commissioner need have only "probable cause" to believe.
21 U.S.C. Sec. 879(a), has now superseded section 1405(1), It provides as follows:
A search warrant relating to offenses involving controlled substances may be served at any time of the day or night if the judge or United States magistrate issuing the warrant is satisfied that there is probable cause to believe that grounds exist for the warrant and for its service at such time.
This enactment I construe to be a restatement or interpretation of section 1405(1). It clarifies the meaning of that section, which had relieved search warrants for narcotics of the positivity requirement of Rule 41(c), substituting a probable cause requirement for a search at any time, thus giving the "flexibility" sought by Congress in narcotics cases. It does not seem to me that this interpretation is precluded by the fact that the controlled substances covered by section 879(a) are enlarged beyond those previously within the scope of section 1405.
From the foregoing history I conclude that the requirement of section 879(a) that the issuing magistrate be "satisfied that there is probable cause to believe that grounds exist . . . for its service at such time" means, when considered with Rule 41(c) as it then read, that there is probable cause to believe that, in the case of narcotics, the "property is on the person or in the place to be searched," in which event the warrant could direct that it be served at any time. Thus, in the case of narcotics, previously under section 1405(1) and later under section 879(a), if the judge was satisfied "that there is probable cause to believe" rather than "if the affidavits are positive" that the "property is on the person or in the place to be searched," the warrant could permit execution at any time. It is in this manner I interpret the House Report, relied upon by the Government, which states:
Subsection (a) of this section [21 U. S.C. Sec. 879] incorporates 18 U.S.C. 1405 and authorizes service of a search warrant at any time of the day or night if probable cause has been established to the satisfaction of the judge or U.S. magistrate issuing the warrant.3
Our question then, under section 879(a), is the factual one whether in each case the magistrate issuing the warrant, which authorized the search at any time of the day or night, was "satisfied that there is probable cause to believe that grounds exist for the warrant and for its service at such time," i. e., "that the property is on the person or in the place to be searched." In the Gooding case the magistrate, referring to the facts set forth in the affidavit accompanying and made a part of the warrant, states: "I am satisfied that there is probable cause to believe that the property so described is being concealed on the (premises) above described . . . ." The affidavit supports such a statement by the magistrate. The same is true of the situation in Barnett.
These search warrants accordingly have met the requirements of section 879(a).4 The question then arises whether the searches were nevertheless invalid for failure to meet the standards for a nighttime search contained in either Title 23 or Title 33 of the District of Columbia Code.
I consider first Title 23 in its relation to Title 33. The search warrant provisions of 23 D.C.Code Secs. 521-525 (Supp. V, 1972) do not refer specifically to controlled substances. They apply generally to search warrants in this jurisdiction. The warrants in the cases before us fail to meet these standards for a nighttime search, namely,
. . . That there is probable cause to believe that (A) it cannot be executed during the hours of daylight, (B) the property sought is likely to be removed or destroyed if not seized forthwith, or (C) the property sought is not likely to be found except at certain times or in certain circumstances . . . .
23
D.C.Code Sec. 522(c)(1) (Supp. V, 1972)
A strong argument is available that these provisions were intended by Congress to apply in this jurisdiction to controlled substances as well as generally, notwithstanding 33 D.C.Code Sec. 414, as amended (Supp. V, 1972), applies specifically to search warrants for narcotics, and subsection (h) of section 414 provides that the warrant shall direct that it be served at any time in the day or night. In United States v. Thomas, 294 A.2d 164, cert. denied, 409 U.S. 992, 93 S.Ct. 341, 34 L.Ed.2d 258 (1972) the Court of Appeals of the District of Columbia spoke upon this matter as follows:
We think it more in harmony with the obvious intent of Congress to give special treatment to narcotics law enforcement to view such provisions [relating to controlled substances] as the "special" ones (including D.C.Code 1967, Sec. 33-414(h)) not subject to qualification by the general search warrant provisions of the U.S. and D. C.Codes (Rule 41(c), Federal Rules of Criminal Procedure, and Sec. 23-522(c)(1)). The "special" area of legislation is narcotics law enforcement, not District of Columbia law enforcement . . . .
294
A.2d at 166-167
We need not inquire whether or not we are bound by this ruling; for, that aside, I am unable to give precedence to sections 521 to 525 of Title 23 over section 414 of Title 33, insofar as the search warrants now considered are concerned. True it is that Title 33 appears to have been overlooked in the legislative history of Title 23, see the Appendix to this opinion, but I think the court cannot overlook the fact that Title 33 was nevertheless reenacted at the same session that enacted the up-to-date general search warrant provisions of Title 23. I accordingly conclude that as between the two standards for a nighttime search for narcotics Title 33, section 414(h), prevails over Title 23, section 522(c)(1).
Finally, does Title 33, section 414(h), control over section 879(a)? If so, the warrants were inadequate, for section 414(c) of Title 33 was not complied with. But I am persuaded that in a search warrant for narcotics involved in an alleged violation of the federal narcotics laws, as here, section 879(a) controls, as held by the Court of Appeals of the District of Columbia in Thomas. I reach this conclusion, however, upon somewhat different reasoning. It is that Chapter 4 of Title 33 of our Code, of which section 414(h) is a part, entitled "Narcotic Drugs," is concerned only with violation of our local narcotics laws, that is, as section 414(a) states, "violation of the provisions of this chapter"-the District of Columbia Code chapter concerned with narcotics and defining related local crimes.
By reason of the foregoing, since the present warrants, explicitly issued in connection with the alleged violation of the federal narcotic laws, complied with section 879(a), I conclude they were valid and that the evidence seized thereunder should not have been suppressed. I reach this conclusion reluctantly. Congress recently, in providing in Title 23 of our local Code the standards generally applicable for a nighttime search in this jurisdiction, clearly differentiated between a nighttime and a daytime search. The legislative history of those provisions give strong evidence of an intention to include searches for controlled substances. Searches at night, especially of a home, present a potentially greater intrusion upon privacy. See Jones v. United States, 357 U.S. 493, 498, 78 S. Ct. 1253, 2 L.Ed.2d 1514 (1958). And no significant burden would be imposed on the magistrate or other officials by requiring special reasons for a search at night even for narcotics, particularly of a private home. These considerations have now found expression in Rule 41 itself as amended effective October 1, 1972, subsequently to the issuance of the Gooding and Barnett search warrants. The Rule now provides in its subparagraph (c) as follows:
The warrant shall be served in the daytime, unless the issuing authority, by appropriate provision in the warrant, and for reasonable cause shown, authorizes its execution at times other than daytime . . . .
This provision would not have helped appellees had it been in effect when the present warrants were issued, for it is coupled with another provision, in subparagraph (h) of the new Rule, which defines the term "daytime" to mean "the hours from 6 a. m. to 10 p. m. according to local time." The Gooding and Barnett warrants were each served before 10 p. m. local time.
The salutary effect of the modification of subparagraph (c) of the Rule remains for consideration with respect to search warrants issued after its effective date. The result I reach in the present cases I think follows from the statutory situation existing when the Gooding and Barnett warrants were issued, a situation which in my opinion did not go beyond what is permissible under the Fourth Amendment.
I accordingly concur in reversal.
APPENDIX
There is strong indication in the legislative history of 23 D.C.Code Secs. 521-525 that Congress intended to apply these provisions to narcotics searches in this jurisdiction.
In revising the provisions governing Criminal Procedure for the District of Columbia Congress was advised that other than the "inadequate" positivity rule of 41(c), F.R.Crim.P., the then existing D.C.Code had no provision dealing with nighttime searches. Mr. Donald E. Santarelli, Associate Deputy Attorney General of the United States stated:
Mr. Chairman, we have also proposed a change in the standard [41(c), F.R. Crim.P.] for nighttime search warrant. As you know, the District of Columbia Code presently contains no provision at all governing the time for execution of a search warrant . . . .
******
* * *
We have found that the positivity rule, positivity test, is inadequate. In fact, it is relatively unfair because of the greater potential intrusion on the privacy of persons from a nighttime search. There should be some justification for that search; not merely that you are positive that the evidence is there.
******
* * *
This is for the protection of civil liberties and greater improvement over the positivity.
Hearings on S.2869, S.2602, and S.2980, Before the Senate Comm. on the District of Columbia, 91st Cong., 1st Sess., Pt. 4 at 1389 (1969) (Hearings). See also, Statement of Mr. Thomas A. Flannery, U. S. Attorney for the District of Columbia, id. at 1416.
The new provisions governing nighttime search warrants, 23 D.C.Code Secs. 521-525, thus seem to have been enacted under the mistaken assumption that, notwithstanding Title 33 of the Code,
The District of Columbia Code presently contains no provision at all governing the time for execution of a search warrant.
H
R.Rep. No. 91-907, 91st Cong., 2d Sess. at 109 (1970) (H.R.Rep.). Moreover, the new provisions were intended to be comprehensive, S.Rep. No. 91-405, 91st Cong., 1st Sess. at 38-39 (1969), encompassing nighttime and no-knock searches for narcotics. See H.R.Rep., supra, at 109, including a statement of Mr. Charles T. Duncan, Corporation Counsel for the District of Columbia, that narcotics were a type of contraband, 23 D.C.Code Sec. 521(d)(2), which "may be removed or destroyed if not seized forthwith or . . . found only at nighttime." Hearings, supra, Statement of Mr. Santarelli, at 1404. See also the testimony of Mr. Santarelli, id., at 1389-1390; the statement of Mr. Flannery, id., at 1417; and the statement of Mrs. Patricia Wald of the Neighborhood Legal Services, id., at 1493
It would seem from the above that Congress may have intended the new search warrant nighttime provisions to apply in the case of narcotics. This interpretation is further supported by the reason stated by the District Court in Gooding:
Roughly sixty percent of the search warrants isued [sic] in the District of Columbia are related to violations of the narcotics laws. If Congress had intended to except federal narcotics search warrants from the requirements of 23 D.C.Code Sec. 523(b), one would certainly expect the intention to be expressed in the statute or at least in the legislative history, possibly by reference to the special narcotic search statute then applicable in the District for local offenses. The Government has not directed the Court's attention to any such indication and the Court has found none. (Footnote omitted.)
328
F.Supp. at 1007-1008
Yet we are faced with the reenactment of Title 33, with its section 414(h), authorizing search warrants for narcotics, executed at night, without compliance with such standards as Title 23 requires generally for searches at night.
SPOTTSWOOD W. ROBINSON, III, Circuit Judge, concurring in the result:
The thoughtful and excellently crafted opinions of my colleagues demonstrate convincingly that the orders appealed from cannot stand. I concur in reversal and in much of their supporting reasoning. I differ, however, with their conclusion that 21 U.S.C. Sec. 879(a) authorizes nighttime execution of search warrants in federal narcotic cases merely on a showing of probable cause to believe that a controlled substance is then present on the person or premises to be searched. I believe, too, that the affidavits underpinning the warrants issued in the cases at bar should be credited with a larger and more crucial role in the resolution of these cases than they have yet been assigned. To accommodate these two considerations, I record this separate position.
*
At the outset, I acknowledge agreement with my colleagues that Section 879(a) set the standard for nighttime execution of the warrants before us. The careful analysis and thorough treatment which they have given this aspect of the litigation certainly needs no effort toward further elaboration. The task left for me is simply to summarize the major propositions which have persuaded me
While the Controlled Substances Act,1 of which Section 879(a) is a part, is not expressly made operative in the District of Columbia, it is clear that Congress intended the new law to have nationwide effect, and thus to encompass federal narcotic offenses which occur in the District.2 I see no conflict between Section 879(a) and D.C.Code Sec. 33-414, which also is limited to execution of search warrants in narcotics cases, since the local provisions extend only to searches based on suspected transgressions of the District's own drug laws.3 Moreover, statutes which are specific as to subject matter normally prevail over those which are less particularized in their area of concern.4 Nothing sufficient to override that principle appearing here, it follows that the federal narcotic search warrant procedures of Section 879(a) must take precedence over the general search warrant provisions of D.C.Code Secs. 23-521 to 23-523 and, as well, the general service criteria set forth in Federal Criminal Rule 41(c).5
Our unanimous conclusion with respect to the applicability of Section 879(a) to the present cases is further buttressed by the canon that the more recent statute dominates the less recent6 for, as Judge Wilkey notes,7 Section 879(a) was considered and passed after enactment of Section 23-521 and its companion provisions. Additional support for our construction is derived from the requirement of the Controlled Substances Act that where one of its specifications so conflicts with a state law that the two cannot be read consistently, the federal regulation controls the field.8 I believe that such a conflict exists between Section 879(a) and the District provisions,9 and hence that effect must be given to the former as Congress has mandated.
II
In agreement with my colleagues up to this point, I now arrive at the place where our paths diverge. They hold that Section 879(a) works no change in its predecessor statute, 18 U.S.C. Sec. 1405(1), which permitted search warrants in federal narcotic investigations to be served at any time of the day or night so long as the authorizing magistrate or judge was satisfied as to the existence of probable cause for the search. On the basis of the language of Section 879(a), which I consider to be very plain, I am unable to accept that interpretation.
I
perceive no ambiguity in the wording of Section 879 (a) which would require a probe into its legislative history. As a comparison of that section with former Section 1405(1) readily reveals, the two provisions are not nearly identical10 Congress did not reenact the earlier in the later without significant alteration; it changed the language of Section 1405(1) importantly by addition of the final clause-"and for its service at such time." Reading that clause with the preceding part of the section and applying normal rules of English grammar, I can construe the whole to mean but one thing: for service of a search warrant at night, probable cause must be shown for the search itself and probable cause must be shown for service of the warrant "at such time." Indeed, as Judge Kelly stated in dissent in United States v. Thomas,11 to hold otherwise would be to render the added words meaningless.
In the face of an unambiguous statute, resort to legislative history serves no useful purpose.12 Here, although both of my colleagues resort to legislative comment on Section 879(a) to support their interpretation of that section, it seems to me that the comment introduces uncertainty not present in the section when examined alone. The House Report states that Section 879(a) "incorporates" former Section 1405 and authorizes anytime-service on "probable cause."13 But the report intimates nothing as to whether the probable cause which it says must be established to the satisfaction of the magistrate or judge for service at "any time" is simply probable cause to search or, rather, probable cause to search at a particular time. This amphibology in the legislative history offers no clarification of what is already obvious to me from Section 879(a) itself.
I
am convinced that Section 879(a) exacts more for a nighttime search than merely probable cause for a search. I cannot, however, accept appellees' argument that Section 879(a) embraces the criteria for nighttime searches which are contained in the general search warrant provisions of D.C.Code Secs. 23-521 to 23-52314 To require compliance with those standards in order to activate Section 879(a) would be to strain its wording beyond any perceptible intent of Congress in enacting special measures to control the drug traffic. Whatever may have been its purpose in selecting the language of Section 879(a), it could hardly have sought to limit nighttime searches for controlled drugs as strictly as nighttime searches in non-drug cases.15
Nor am I persuaded to my colleagues' view of that Section 879(a) countenances a direction for a nighttime search just on probable cause to believe that the sought-after drugs are then present on the person or the property to be subjected to the search. Unless there is a showing of probable cause to believe that the matter to be seized will be found by search of a designated person or place, a search warrant cannot issue at all.16 Consequently, my colleagues' construction of Section 879(a) would demand no more for a nighttime search than one in the daytime; in other words, no more than is prerequisite for any search. If, as I think, the last clause of Section 879(a) establishes a probable cause requirement for nighttime execution additional to probable cause to search,17 their construction reads that clause completely out of the section and would leave the door wide open to nighttime execution of any warrant licensing a search for controlled substances.
In my view, the probable cause which Section 879(a) exacts for searches at night can be supplied only by circumstances demonstrating reasonable cause for a search at that particular time.18 Section 879(a) calls for something above and beyond the showing that would support a daytime search, and that would require a degree of justification outweighing the potentially more serious intrusion on privacy inherent in any nighttime search. Not all searches for controlled substances possess the same degree of urgency, nor do all applications for nighttime search warrants induce the same conviction of need. Some probable cause is more probable than some other, and some ultimately turns out to be a false alarm. A standard of reasonable cause which enables a realistic evaluation of the competing public and private interests accommodates the myriad situations confronting magistrates and judges far better than any inexorable rule possibly could. And such a standard serves well the legislative objectives underlying Section 879(a) while maintaining an appropriate sensitivity to the concern for privacy shared by the citizenry at large.
The test of reasonable cause for nighttime execution does not demand a demonstration that drugs are positively on the premises at night, or that they could be found on the premises only at night, or that for some reason a search would be impossible in the daytime. It does summon some factual basis for a prudent conclusion that the greater intrusiveness of nighttime execution of the warrant is justified by the exigencies of the situation. The remaining question, then, is whether there was justification of that caliber in these cases.III
Consideration of this question marks the point at which I am able to rejoin my colleagues-in the disposition of these appeals. For while I do not subscribe to the probable cause standard they espouse for nighttime searches under Section 879(a), I am satisfied that the warrants and supporting affidavits in these cases afforded ample foundation for allowance of such searches under the test I have endeavored to articulate.
The affidavits in the two cases are quite similar, and they portray very similar situations. The affiant, a police officer, was told by an informant of proven reliability that a named individual -in each case, the appellant-was selling narcotic drugs on specified premises. The informant advised of a recent purchase which he had made, and stated that he could transact another for the edification of the officer. The information supplied by the informant was then verified by a transaction, at the place and with the person previously specified, under controlled conditions leaving no doubt as to a sale of narcotics.
In the recitals bearing vitally on the question at hand, the search warrants in both cases were identical. Each stated that the magistrate was "satisfied that there is probable cause to believe that" narcotics and narcotic paraphernalia "is being concealed on the" described premises. Each warrant proceeded to direct that it be served and that the search be made "at anytime in the day or night." The service and search occurred in the nighttime within one day in one instance, and within three days in the other instance, after the verified on-premises drug purchase was made.
Beyond cavil, the affidavit disclosed and the magistrate found reasonable cause for a nighttime search in each of these cases. The showing went beyond grounds for believing that narcotics were kept on the premises searched; it extended to ground for believing that a drug-peddling operation persisted there. Where, as here, it appears that a search is calculated not only to garner evidence of past crime but also to terminate a serious species of ongoing criminality, reasonable cause for a nocturnal intrusion is demonstrated. For this reason, I concur in the conclusion that there was an ample legal and factual basis for the searches, and in reversal of the orders suppressing their fruits.
1
Both Gooding and Barnett were charged with violating former 26 U.S.C. Sec. 4704(a) (1964), Act of 16 August 1954, ch. 736, Sec. 4704(a), 68 Stat. 550, repealed by Pub.L.No.91-513, Title III, Sec. 1101(b)(3) (A), 84 Stat. 1292 (1970). Gooding was also charged with violating former 21 U.S.C. Sec. 174 (1964), Act of 18 July 1956, ch. 629, Title I, Sec. 105, 70 Stat. 570, repealed by Pub.L.No.91-513, Title III, Sec. 1101(a)(2), 84 Stat. 1291 (1970)
2
Both warrants recited facts which were characterized as "in violation of Title 26 Section 4704(a) of the U.S.Code." Both warrants further stated:
[A]s I [the issuing magistrate] am satisfied that there is probable cause to believe that the property so described is being concealed on the (premises) above described and that the foregoing grounds for application for issuance of the search warrant exist.
You are hereby commanded to search forthwith the (place) named for the property specified, serving this warrant and making the search (at any time in the day or night1) . . .
1
The Federal Rules of Criminal Procedure provide: "The warrant shall direct that it be served in the daytime, but if the affidavits are positive that the property is on the person or in the place to be searched, the warrant may direct that it be served at any time." (Rule 41(c)
The warrant in Gooding was executed at 9:30 p. m. on 12 February 1971, the day after its issuance. The warrant in Barnett was executed at 8:08 p. m. on 11 February 1971, the day it was issued.
3
United States v. Gooding, 328 F.Supp. 1005, 1008 (D.D.C.1971)
4
These sections became effective as of 1 February 1971, prior to the issuance of these warrants
5
Section 521(f)(5) provides that the warrant shall contain a direction that it
be executed during the hours of daylight or, where the judicial officer has found cause therefor, including one of the grounds set forth in section 23-522 (c)(1), an authorization for execution at any time of day or night.
The grounds set forth in Section 23-522 (c)(1) for execution of the warrant at any time are
. . . that there is probable cause to believe that (A) it cannot be executed during the hours of daylight, (B) the property sought is likely to be removed or destroyed if not seized forthwith, or (C) the property sought is not likely to be found except at certain times or in certain circumstances . . . .
6
There is also an argument that 33 D.C. Code Sec. 414(h) was impliedly repealed since 23 D.C.Code Secs. 521-523 were intended to be comprehensive and were enacted under the (albeit incorrect) assumption that "[t]he District of Columbia Code presently contains no provision at all governing the time for execution of a search warrant. H.R.Rep.No.91-907, 91st Cong., 2d Sess. at 109 (1970)." Since our conclusions concerning these warrants do not rest on the application of 33 D.C.Code Sec. 414(h), we need not reach this issue. However, we should note that the District Court firmly rejected this argument of implied repeal in United States v. Green, 331 F.Supp. 44 (D.D.C.1971)
7
See Part II of this opinion for a discussion of the application of Sec. 879(a) to these warrants
8
328 F.Supp. 1005, 1008
9
The District of Columbia Court Reform and Criminal Procedure Act of 1970, which included 23 D.C.Code Secs. 521-523, was enacted on 29 July 1970 but did not become effective until 1 February 1971. The Controlled Substances Act, including 21 U.S.C. Sec. 879, was enacted on 27 October 1970 and became effective, at least as to the provisions of Sec. 879(a), immediately
10
The District of Columbia Court of Appeals came to the same conclusion in United States v. Thomas, 294 A.2d 164, 166-167 (D.C.C.A.), cert. denied, 409 U. S. 992, 93 S.Ct. 341, 34 L.Ed.2d 258 (1972):
We think it more in harmony with the obvious intent of Congress to give special treatment to narcotics law enforcement to view such provisions [as Sec. 879 (a)] as the "special" ones . . . not subject to qualification by the general search warrant provisions of the U.S. and D.C.Codes . . . . The "special" area of legislation is narcotics law enforcement, not District of Columbia law enforcement.
11
And the "bramblebush" of statutes appears less forbidding
12
The possibility that Congress thought there was no D.C. provision at all dealing with nighttime search warrants is discussed at note 6. That fact might relate to doubts about the continuing validity of 33 D.C.Code Sec. 414(h), although that issue does not need to be decided in this case. However, even congressional intent to enact a comprehensive nighttime search statute when it passed 23 D.C.Code Secs. 521-523 would not serve to negate its subsequent decision to reaffirm a specific and different rule for U. S. magistrates regarding narcotics nighttime searches in regard to federal violations-by passing 21 U.S.C. Sec. 879(a)
13
See United States v. Stallings, 413 F.2d 200 (7th Cir. 1969), cert. denied, 396 U.S. 972, 90 S.Ct. 460, 24 L.Ed.2d 440 (1969). See footnote 22, infra
14
We have noted that, if the special local statute (33 D.C.Code Sec. 414) is still valid, these warrants may not have met its requirement of examination under oath. However, Sec. 414 of Title 33 is concerned only with "violations of the provisions of this chapter" (i. e., Chapter 4, entitled "Narcotic Drugs"-the local narcotic laws). Thus the requirements of Sec. 414 (c), which were not demonstrated to have been met by the warrants in these cases, simply do not apply here because these warrants were issued for violations of federal law
15
Appellant's Reply Brief at p. 2, n. 5
16
Section 879(a) was given this reading by the District of Columbia Court of Appeals in United States v. Thomas, 294 A.2d 164 (D.C.C.A.), cert. denied, 409 U.S. 992, 93 S.Ct. 341, 34 L.Ed.2d 258 (1972)
17
Act of 18 July 1956, ch. 629, Title II, Sec. 201, 70 Stat. 573, repealed by Pub.L.No. 91-513, Title III, Sec. 1101(b)(1)(A), 84 Stat. 1292 (1970). This section provided, in pertinent part, that a "search warrant [relating to narcotics offenses] may be served at any time of the day or night if the judge of United States Commissioner issuing the warrant is satisfied that there is probable cause to believe that the grounds for the application exist."
18
H.R.Rep.No.91-1444 (Part I), 91st Cong., 2d Sess. 54 (1970) (emphasis added). See U.S.Code Cong.Adm.News, 91st Cong., 2d Sess., at pp. 4621-22 (1970). Exactly the same language is contained in the Senate Report. S.Rep.No.91-613, 91st Cong., 1st Sess. 30-31 (1969)
19
United States v. Stallings, 413 F.2d 200, 207 (7th Cir. 1969), cert. denied, 396 U.S. 972, 90 S.Ct. 460, 24 L.Ed.2d 440 (1969); United States v. Castle, 213 F.Supp. 52 (D.D.C.1962); United States v. Tucker, 262 F.Supp. 305 (S.D.N.Y.1966)
20
In Gooding, Judge Gesell conceded that "the legislative history [of 21 U.S.C. Sec. 879(a)] indicates that no change from the prior law was intended." 328 F.Supp. 1005, 1007
21
21 U.S.C. Sec. 879(a) is part of the Controlled Substances Act, "legislation designed to deal in a comprehensive fashion with the growing menace of drug abuse in the United States . . . through providing more effective means for law enforcement aspects of drug abuse prevention and control . . . ." H.R.Rep. No. 91-1444 (Part I), 91st Cong., 2d Sess. 1 (1970) U.S.Code Cong. & Admin. News, p. 4567
22
Section 1405(1) was intended to provide an exception to the inflexible and archaic requirement of "positivity" in Rule 41(c). See S.Rep.No.1997, 84th Cong., 2d Sess., 8-9 (1956). Rule 41(c)'s test required the affidavits to be "positive" about the fact that "the property is on the person or in the place to be searched." The new provision, Sec. 1405(1), merely changed the degree of certainty required as to that fact. Ignoring a potential ambiguity, the courts wisely consulted congressional intent and found, as we do here, no desire to establish an additional required showing of need when narcotics search was involved
23
United States v. Castle, 213 F.Supp. 52, 53-54 (D.D.C.1962)
24
The District Court in Gooding stated that "[t]here is no suggestion that . . the need for nighttime warrants [is] any greater where narcotics offenses are involved rather than other crimes." 328 F.Supp. 1005, 1008. That comment simply ignores the whole background and purpose of both 18 U.S.C. 1405(1) and 21 U.S.C. 879(a). See United States v. Castle, supra
25
Both search warrants found probable cause to believe that the narcotics were being "concealed" on the relevant premises. Both incorporated affidavits which alleged that the drugs were being "secreted." In the absence of any indication that such concealment was other than continuous, the natural inference would be that they could be found on the premises at any time of the day or night. In this context, any requirement of a more specific finding by the magistrate would be an absurd linguistic artificiality which the statute does not require
1
Act of July 18, 1956, ch. 629, Title II, Sec. 201, 70 Stat. 573, repealed by P.L. 91-513, Title III, Sec. 1101(b)(1)(A), 84 Stat. 1292 (1970)
2
Such provisions included former sections 174 and 184(a) of Title 21 of the United States Code, and related violations of the Internal Revenue Code
3
H.R.Rep.No.91-1444, 91st Cong., 2d Sess., Pt. 1 at 54 (1970) (hereinafter, H.R.Rep.No.91-1444), U.S.Code Cong. & Admin.News, p. 4621, and like language in the Senate Report, S.Rep.No.91-613, 91st Cong., 1st Sess., 30-31 (1969)
4
Some question may be raised about the applicability of section 879(a) in the District of Columbia in that Congress had failed specifically to include in the Act a special provision of applicability to the District of Columbia as it had done with respect to section 1405(2). I do not think the applicability of section 879(a) to this jurisdiction turns upon such a special provision, but upon the considerations advanced subsequently in this opinion
1
Pub.L. No. 91-513, tit. II, 84 Stat. 1236, 1242 (1970), 21 U.S.C. Sec. 801 et seq. (1970)
2
The national scope of the Act is apparent from 21 U.S.C. Sec. 801 (1970), in which congressional findings as to the interstate and intrastate aspects of traffic in narcotics are enunciated
3
Section 33-414(a) provides:
A search warrant may be issued by any judge of the Superior Court of the District of Columbia or by a United States commissioner for the District of Columbia when any narcotics drugs are manufactured, possessed, controlled, sold, prescribed, administered, dispensed, or compounded in violation of the provisions of this chapter, and any such narcotic drugs and any other property designed for use in connection with such unlawful manufacturing, possession, controlling, selling, prescribing, administering, dispensing, or compounding, may be seized thereunder, and shall be subject to such disposition as the court may make thereof and such narcotic drugs may be taken on the warrant from any house or other place in which they are concealed.
(emphasis supplied).
4
D. Ginsberg & Sons v. Popkin, 285 U.S. 204, 208, 52 S.Ct. 322, 76 L.Ed. 704 (1932); Kepner v. United States, 195 U.S. 100, 125, 24 S.Ct. 797, 49 L.Ed. 114 (1904). Compare Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 228-229, 77 S.Ct. 787, 1 L.Ed.2d 786 (1957)
5
Fed.R.Crim.P. 41(c). At the time the warrants in controversy were issued and executed, Rule 41(c) authorized a direction for nighttime service only where the affidavit supporting the warrant was positive that the property to be seized was on the person or in the place to be searched. The positivity requirement has since been deleted, and Rule 41(c) now permits such a direction for reasonable cause shown. See note 16, infra
6
Schick v. United States, 195 U.S. 65, 68-69, 24 S.Ct. 826, 49 L.Ed. 99 (1904); United States v. Hosmer, 76 U.S. (9 Wall.) 432, 435, 19 L.Ed. 662 (1869)
7
Ante p. 431
8
Section 903 of the Act provides:
No provision of this subchapter shall be construed as indicating any intent on the part of the Congress to occupy the field in which that provision operates, including criminal penalties, to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State, unless there is a positive conflict between that provision of this subchapter and that State law so that the two cannot consistently stand together.
21 U.S.C. Sec. 703 (1970). The District of Columbia falls within the Act's definition of "State". 21 U.S.C. Sec. 802(24) (1970).
9
As I later point out, text infra at notes 14-15, the local provisions for nighttime execution of search warrants are considerably more stringent than that of Sec. 879(a), and thereby conflict with the disposition of Congress to make federal narcotics searches at night less rather than more difficult than other types of searches
10
Section 879(a) reads:
A search warrant relating to offenses involving controlled substances may be served at any time of the day or night if the judge or United States magistrate issuing the warrant is satisfied that there is probable cause to believe that grounds exist for the warrant and for its service at such time.
11
294 A.2d 164 (D.C.App.), cert. denied, 409 U.S. 992, 93 S.Ct. 341, 34 L.Ed.2d 258 (1972). In Thomas, a majority of the court construed Sec. 879(a) as my colleagues do here. Id. at 166
12
United States v. Public Util. Comm'n of California, 345 U.S. 295, 315, 73 S.Ct. 706, 97 L.Ed. 1020 (1953); Ex parte Collett, 337 U.S. 55, 61, 69 S.Ct. 944, 93 L.Ed. 1207 (1949); See also United States v. Rice, 327 U.S. 742, 752-753, 66 S.Ct. 835, 90 L.Ed. 982 (1946)
13
"Subsection (a) of this section incorporates 18 U.S.C. 1405 and authorizes service of a search warrant at any time of the day or night if probable cause has been established to the satisfaction of the judge or U.S. magistrate issuing the warrant." H.R.Rep. No. 91-1444 (pt. I), 91st Cong., 2d Sess. 54 (1970) U.S.Code & Cong.News, p. 4621. Identical language is used in the Senate Report, S.Rep. No. 91-613, 91st Cong., 1st Sess. 30-31 (1969)
14
D.C.Code Sec. 23-522(c)(1) (Supp. V 1972) permits search warrants to be executed at any time of the day or night only upon probable cause to believe that
(A) it cannot be executed during the hours of daylight, (B) the property sought is likely to be removed or destroyed if not seized forthwith, or (C) the property sought is not likely to be found except at certain times or in certain circumstances. . . .
15
As the House Report states, the purpose of Congress in enacting the Controlled Substances Act was to deal with narcotic usage by more effective methods of law enforcement. See H.R.Rep. No. 91-1444 (pt. I), 91st Cong., 2d Sess. 1 (1970)
16
Sgro v. United States, 287 U.S. 206, 210-211, 53 S.Ct. 138, 77 L.Ed. 260 (1932); Schoeneman v. United States, 115 U.S.App.D.C. 110, 113, 317 F.2d 173, 176 (1963); Rosencranz v. United States, 356 F.2d 310, 315-318 (1st Cir. 1966); Durham v. United States, 403 F.2d 190, 193-194 (9th Cir. 1968). See also Jones v. United States, 362 U.S. 257, 270-271, 80 S.Ct. 725, 4 L.Ed.2d 697 (1960); United States v. Ramirez, 279 F.2d 712, 715 (2d Cir.), cert. denied, 364 U.S. 850, 81 S.Ct. 95, 5 L.Ed.2d 74 (1960)
17
See text supra at notes 10-11
18
The standard of "reasonable cause shown" has replaced the "positivity" requirement for nighttime searches under former Fed.R.Crim.P. 41(c). The Rule as amended reads in pertinent part:
The warrant shall be served in the daytime, unless the issuing authority, by appropriate provision in the warrant, and for reasonable cause shown, authorizes its execution at times other than daytime. It shall designate a federal magistrate to whom it shall be returned.
|
336 Mass. 54 (1957)
142 N.E.2d 389
ONORATO BROTHERS, INC.
vs.
MASSACHUSETTS TURNPIKE AUTHORITY.
Supreme Judicial Court of Massachusetts, Middlesex.
April 1, 1957.
May 8, 1957.
Present: WILKINS, C.J., RONAN, SPALDING, COUNIHAN, & CUTTER, JJ.
Arthur Sherman, for the petitioner.
Francis v. Matera, (Harold Katz with him,) for the respondent.
CUTTER, J.
The petitioner purchased in 1953 lots 61-67 and lot 80 in a section of Framingham. The respondent took (under St. 1952, c. 354) by eminent domain, by order dated March 24, 1955, part of lot 65 and the whole of lots 66, 67, and 80. Entry was made on March 30, 1955. Prior *55 to the taking the petitioner had built speculative houses on lots 61-64, and after these houses were completed, the respondent put a number of stakes on these lots for the purpose of making surveys and plans. Thereafter, but prior to March 24, 1955, the holder of the mortgage on lots 61-64 foreclosed that mortgage.
The petitioner filed on September 21, 1955, its petition under G.L. (Ter. Ed.) c. 79, § 14, for assessment of damages for the lots actually taken. It seeks to recover also for injury to lots 61-64 which it contends was caused by placing stakes on these lots. The case is here on the petitioner's bill of exceptions relating to rulings (described in detail later) of the trial judge excluding certain evidence. The pertinent provisions of St. 1952, c. 354,[1] and certain related provisions of G.L. (Ter. Ed.) c. 79,[2] are set out in the margin.
1. The petitioner asked two real estate experts and the president of the petitioner questions about the value of lots 61-64 before and after the placing of survey stakes on these *56 lots. When the questions were not allowed, offers of proof were made that the aggregate fair market value of lots 61-64 and the buildings thereon was $68,000 prior to the placing of survey stakes on these lots and $56,000 after the stakes had been placed. Exceptions were duly saved.
We assume that entry for preliminary surveys upon lots 61-64 could have been permitted without compensation and without violating any constitutional requirement. Winslow v. Gifford, 6 Cush. 327, 329-330. Lafontaine's Heirs v. Lafontaine's Heirs, 205 Md. 311, 320-321. See Restatement: Torts, § 211, comment c; Nichols, Eminent Domain (3d ed.) §§ 6.11, 26.22. Compare Hazen v. Boston & Maine Railroad, 2 Gray, 574, 581; Brigham v. Edmands, 7 Gray, 359, 362-363; Providence, Fall River & Newport Steamboat Co. v. Fall River, 183 Mass. 535, 540-541. However, the Legislature (see United States Gypsum Co. v. Mystic River Bridge Authority, 329 Mass. 130, 137) by St. 1952, c. 354, § 7 (see note 1, supra), expressly (a) has permitted the respondent to enter on the land of others to make surveys, and (b) has provided for reimbursement of "any actual damage resulting to such lands."[1a] Section 15, paragraph 5 (also quoted in note 1), permits any "person damaged in his property by the exercise of ... the powers granted by this act" to recover for such damage under G.L. (Ter. Ed.) c. 79. There is no indication in the record that the entry on lots 61-64 to make surveys was authorized by any formal vote or order of the respondent. Accordingly, we assume that G.L. (Ter. Ed.) c. 79, § 10 (quoted, supra, note 2) governs any recovery with respect to lots 61-64 in the present case. See United States Gypsum Co. v. Mystic River Bridge Authority, 329 Mass. 130, 140-141.
The petition in this proceeding refers only to lots 65-67 and lot 80 without making any mention of lots 61-64. All of these lots, both those not taken and those actually taken, were owned by the petitioner in 1953, and for a time thereafter *57 (subject to various mortgages). However, the foreclosure of the mortgage covering lots 61-64 took place between (a) the preliminary survey made on lots 61-64 and (b) the taking of the other land. Lots 61-64 thus were not owned by the petitioner at the time of the taking of the land actually taken, and do not constitute land of the petitioner remaining in its hands after a partial taking of the tract purchased in 1953. Accordingly, recovery for the damage caused to lots 61-64 by the taking cannot now be allowed on the basis referred to in Valentino v. Commonwealth, 329 Mass. 367, 368, and Kinney v. Commonwealth, 332 Mass. 568, 571. See Nichols, Eminent Domain (3d ed.) §§ 14.1-14.4; Orgel, Valuation under Eminent Domain (2d ed.) §§ 47-65.
The petitioner argues, however, that, on principles mentioned in Chandler v. Jamaica Pond Aqueduct Corp. 125 Mass. 544, 550-551, it is entitled, in connection with its recovery of damages for the taking of the land which it did own in March, 1955, to recover also under this petition for the injuries, if any, caused by the survey stakes to lots 61-64, which it owned at the time of the survey. Whether this contention has merit we need not decide, for the petitioner has not offered to prove any substantive facts relating to lots 61-64 which show that it is entitled to recover for any injury whatsoever to those lots caused by the survey.[1b]
On the present record, there is no indication of more than trivial physical injury to lots 61-64. The petitioner's theory of the damage (although not outlined in any evidence or offers of proof) appears to have been that the placing of the survey stakes on lots 61-64 scared away potential purchasers by creating doubts about the future of the land, thus reducing its market value.
Where a statute, such as St. 1952, c. 354, § 7, allows recovery for specified injury to land not taken, recovery is not necessarily limited to actual physical injuries to the property itself, if the injury is "special and direct as distinguished *58 from remote and consequential." See Wine v. Commonwealth, 301 Mass. 451, 458. On this record, however, there is no basis for contending that lots 61-64 suffered "special and direct" damage different from that suffered by the owners of other lots in the area. Apart from the insignificant physical damage, the only damage to lots 61-64 mentioned in argument as caused by the survey stakes rested upon the supposition, which proved to be unfounded (compare National Dock & Storage Warehouse Co. v. United States, 97 Fed. Sup. 706, 708-709 [Ct. Cl.]), that the execution of the turnpike project would involve a taking of some part of lots 61-64. This type of menace the petitioner shared generally with other landowners in the general area. The record suggests no greater uncertainty about the future of lots 61-64 than about other land along or near the general route which the turnpike was expected to follow while it was being surveyed. The record shows no preliminary action by the respondent toward actual condemnation of lots 61-64 themselves[1c] and no such action appears to have been contemplated. The only possible substantial injury arises from uninformed public misinterpretation of the presence of the survey stakes. Compare Meriden v. Zwalniski, 88 Conn. 427, 432-435; Nichols, Eminent Domain (3d ed.) § 14.241; Orgel, Valuation under Eminent Domain (2d ed.) §§ 61-62. The record shows no unreasonable postponement by the respondent of a decision about location causing special loss to the petitioner. Compare Connor v. Metropolitan District Water Supply Commission, 314 Mass. 33, 41-42.
We think any vague cloud upon the future of lots 61-64 caused by the presence of the survey stakes is at most a temporary, inchoate injury which does not give rise to recovery *59 on eminent domain principles. See National Dock & Storage Warehouse Co. v. United States, 97 Fed. Sup. 706, 708-709 (Ct. Cl.). It certainly is too indefinite, conjectural, and general to constitute "such injury as is special and peculiar" to land, not in fact condemned, for which recovery can be had in accordance with the second sentence of G.L. (Ter. Ed.) c. 79, § 12.[1d] See Putnam v. Boston & Providence Railroad, 182 Mass. 351, 353-354; Bailey v. Boston & Providence Railroad, 182 Mass. 537, 539-540; McSweeney v. Commonwealth, 185 Mass. 371, 373; Wine v. Commonwealth, 301 Mass. 451, 458. See also Whitney v. Lynn, 122 Mass. 338, 343; United States Gypsum Co. v. Mystic River Bridge Authority, 329 Mass. 130, 140; Nichols, Eminent Domain (3d ed.) § 6.11 at pages 242-245, § 6.42; Hanify, Elements of Damages in Eminent Domain, 34 B.U.L. Rev. 146, 158. Compare Lentell v. Boston & Worcester Street Railway, 202 Mass. 115, 117, 120-121. Compare also noncompensable injuries from the exercise of the police power, Barnes v. Springfield, 268 Mass. 497, 511, certiorari denied 281 U.S. 732; Franco-Italian Packing Co. v. United States, 128 Fed. Sup. 408, 414 (Ct. Cl.).
The evidence offered with respect to lots 61-64 was properly excluded on the record.
2. The petitioner offered evidence of the amount remaining due on a mortgage covering lots 65, 66, 67, and 80 as having a bearing on the loss sustained by the taking of these lots so far as actually taken. We do not need, however, to consider whether evidence of mortgage value is always to be excluded (see Peirson v. Boston Elevated Railway, 191 Mass. 223, 231-234) in eminent domain matters (compare Nichols, Eminent Domain [3d ed.] § 12.43 at pages 181-182) even if, in a particular case, proof of the amount of a mortgage may have real tendency to establish at least the minimum value of the mortgaged property. The present case, *60 in any event, has not been shown to be one for the admission of such testimony. There was no offer of proof on the following points: (1) how much of the amount due on the mortgage represented money originally lent and how much, if any, was arrears of interest; (2) the extent to which the security for the mortgage loan was furnished by lot 65 which was taken only in minor part; and (3) the change, or absence in change, in values of the mortgaged property between (a) 1953 when the mortgage was given as a purchase money mortgage in connection with the purchase of lots 61-67 and 80, and (b) the taking in 1955. The absence of a showing on these points, among others, made the evidence of the amount remaining due on the mortgage of little, if any, probative value in establishing the value of the land actually taken and the extent of the injury caused by its condemnation. The trial judge properly excluded this evidence.
Exceptions overruled.
NOTES
[1] Statute 1952, c. 354, § 7 (see fourth paragraph), reads in part: "... the Authority and its authorized agents and employees may enter upon any lands ... for the purpose of making surveys, soundings, drillings and examinations as they may deem necessary or convenient for the purposes of this act, and such entry shall not be deemed a trespass, nor shall an entry for such purposes be deemed an entry under any condemnation proceedings which may be then pending. The Authority shall make reimbursement for any actual damage resulting to such lands ... as a result of such activities" (emphasis supplied). Section 15 (see second and fifth paragraphs) reads in part: "All private property damaged or destroyed in carrying out the powers granted by this act shall be restored or repaired and placed in its original condition as nearly as practicable, or adequate compensation made therefor, out of funds provided under the authority of this act.... Any person damaged in his property by the exercise of any of the powers granted by this act may recover his damages from the Authority under chapter seventy-nine of the General Laws."
[2] General Laws (Ter. Ed.), c. 79, § 10, reads in part: "When real estate ... has been damaged by the construction ... of a public improvement or has been entered for a public purpose, but such ... entry or damage was not effected ... in accordance with a formal vote or order of the board of officers of a body politic or corporate duly authorized by law ... the damages therefor may be recovered under this chapter.... In case of a specific ... entry ... or other act causing ... damage or depriving the owner of the use of his property permanently or for a definite period of time the damages shall be assessed as of the date of such ... entry ... or other act and the right thereto shall vest on such date and a petition for an award of damages therefor under this section may be filed within one year thereafter...." Section 12 reads in part: "In determining the damages to a parcel of land injured when no part of it has been taken, regard shall be had only to such injury as is special and peculiar to such parcel...."
[1a] There thus is here no such want of statutory authority for payment of damages as was found to exist in Sullivan v. Commonwealth, 335 Mass. 619, if the damage which the petitioner seeks to prove is of a type for which recovery can be had.
[1b] For the same reason, we do not consider whether the failure of the petitioner to request that notice be served on the foreclosing mortgagee of lots 61-64 also presents a further barrier to recovery. See G.L. (Ter. Ed.) c. 79, §§ 22, 32.
[1c] We need not consider whether, if lots 61-64 had been owned by the petitioner at the time of the actual taking of part of lot 65 and all of lots 66, 67, and 80, damages for injury to lots 61-64 caused by the survey and the taking could have been recovered as for injury to remaining land caused by a partial taking. It is possible that they and the buildings upon them might have been regarded as distinct from the unimproved lots wholly or partly taken. See Nichols, Eminent Domain (3d ed.) § 14.3 et seq.; Orgel, Valuation under Eminent Domain (2d ed.) §§ 54-56.
[1d] No intimation is intended whether and to what extent any types of nonphysical damage, resulting from a survey, could form the basis of recovery upon a proper showing (a) that the survey had in fact directly given rise to injury; (b) that damage was susceptible of reasonable ascertainment; and (c) that it was "special and direct" injury to the land surveyed.,
|
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JAMES PATTON, No. 08-35177
Plaintiff-Appellee, DC No.
v. 03-CV-1722 BR
TARGET CORPORATION,
Defendant-Appellee, ORDER
CERTIFYING
v. QUESTION TO
THE SUPREME
STATE OF OREGON, COURT OF
Plaintiff-Intervenor-Appellant. OREGON
Appeal from the United States District Court
for the District of Oregon
Anna J. Brown, District Judge, Presiding
Argued and Submitted
July 6, 2009—Portland, Oregon
Submission Vacated and Question Certified:
September 2, 2009
Filed September 2, 2009
Before: Harry Pregerson, Pamela Ann Rymer, and
A. Wallace Tashima, Circuit Judges.
COUNSEL
Lori Irish Bauman, Ater Wynne LLP, Portland, Oregon, for
the plaintiff-appellee.
Michael A. Griffin, Jackson Lewis LLP, Seattle, Washington,
for the defendant-appellee.
12217
12218 PATTON v. TARGET CORPORATION
Rolf C. Moan, Supreme Court Coordinator, Office of Attor-
ney General, Salem, Oregon, for the plaintiff-intervenor-
appellant.
ORDER
Under Oregon’s split-recovery statute, OR. REV. STAT.
§ 31.735, the State of Oregon (the “State”) is entitled to 60
percent of any punitive damages awarded under Oregon law.
The statute applies to cases decided under Oregon law in fed-
eral court. DeMendoza v. Huffman, 51 P.3d 1232, 1235-37
(Or. 2002). In the case at bench, after the jury awarded a sub-
stantial amount of punitive damages, but before judgment was
entered on the award, plaintiff and defendant settled the case
for an undisclosed amount, without notice to or approval of
the State. The State contends that the district court erred in
approving the settlement and entering judgment in accordance
with the settlement because the State’s consent was required
for any settlement that would reduce or eliminate the State’s
share of the punitive damages awarded by the verdict.
Because the interpretation of this facet of the split-recovery
statute is an important and unanswered question of Oregon
law that is dispositive in this case, we respectfully certify a
question to the Supreme Court of Oregon.
BACKGROUND1
I. Factual and Procedural History
Plaintiff-Appellee James Patton (“Patton”) sued Defendant-
Appellee Target Corp. (“Target”) in federal district court for
asserted violations of the Uniformed Services Employment
1
This “Background” section constitutes our statement of the relevant
facts and explanation of the “nature of the controversy in which the ques-
tion[ ] arose.” OR. REV. STAT. § 28.210.
PATTON v. TARGET CORPORATION 12219
and Reemployment Rights Act (“USERRA”), 38 U.S.C.
§§ 4301-4335, and for wrongful discharge under Oregon law.
Patton alleged that Target demoted and later fired him
because of his service in the National Guard. The jury found
in Target’s favor on the USERRA claim, but found in Pat-
ton’s favor on the state law claim. It awarded Patton $17,950
in economic damages, $67,000 in noneconomic damages, and
$900,000 in punitive damages.
The district court indicated that it expected a substantial
post-verdict dispute between the parties regarding the validity
and amount of the punitive damages award. Shortly after the
verdict, however, Patton and Target reached a settlement and
jointly moved the court to approve a stipulated judgment dis-
missing the case. Neither the motion nor the stipulated judg-
ment disclosed how much Target had agreed to pay Patton in
exchange for the dismissal, nor was any provision for any
payment to the State included in the settlement.2
The State then moved to intervene in the case, arguing that,
under the split-recovery statute, it had obtained a vested inter-
est in 60 percent of the punitive damages award upon the
entry of the verdict. It further argued that the parties could not
settle the case without its consent. The district court allowed
the State to intervene, but ultimately approved the proposed
settlement and denied the State’s claim. The district court rea-
soned that the State could not have obtained a vested interest
in the punitive damages award prior to the entry of a judg-
ment and that the parties were therefore free to settle the case
without the State’s involvement or consent. The State filed a
motion for relief from the district court’s judgment on the
ground that the Oregon Court of Appeals’ newly-announced
decision in MAN Aktiengesellschaft v. DaimlerChrysler AG
2
The structure and amount of the settlement has not been entered into
the record and we are not privy to the actual terms of the settlement. But
the State’s position that it has been excluded from the settlement is uncon-
tested.
12220 PATTON v. TARGET CORPORATION
(“MAN AG“), 179 P.3d 675 (Or. Ct. App. 2008), undermined
the district court’s reasoning. Upon reconsideration, however,
the district court affirmed its decision denying the State’s
motion for relief from the judgment of dismissal. This appeal
followed.
II. The Split-Recovery Statute
Since 1987, Oregon has had a split-recovery statute enti-
tling the State to receive a portion of any punitive damages
awarded under Oregon law. As originally enacted, the statute
provided:
The punitive damage portion of an award shall be
distributed as follows:
(1) The attorney for the prevailing party
shall be paid the amount agreed upon
between the attorney and the prevailing
party.
(2) One-half of the remainder shall be paid
to the prevailing party.
(3) One-half of the remainder shall be paid
to [a state fund to compensate crime vic-
tims].
OR. REV. STAT. § 18.540 (1987). The weakness of the original
version of the statute was exposed in Eulrich v. Snap-On
Tools Corp., 798 P.2d 715 (Or. Ct. App. 1990). In that case,
the Oregon Court of Appeals held that the State had no inter-
est in an award of punitive damages until a fund capable of
distribution existed; thus, that the State could not state a claim
in intervention to ensure that the judgment provided for the
State’s share of an award. Id. at 716.
The Oregon Legislature responded in 1991 by amending
the statute to provide that, “[u]pon the entry of a judgment
PATTON v. TARGET CORPORATION 12221
including an award of punitive damages, the Department of
Justice shall become a judgment creditor as to the punitive
damages portion of the award to which the Criminal Injuries
Compensation Account is entitled.” OR. REV. STAT.
§ 18.540(1) (1991). The legislature soon came to believe,
however, that even this new version was insufficient to pro-
tect the State’s interest. According to the legislative history
cited in MAN AG, the legislature was concerned that the new
statute left a loophole between the time when a jury verdict
for punitive damages was entered, and the memorialization of
that verdict in a final judgment by the court. During this
period, clever litigants could settle their claims and deprive
the State of its share of the punitive damages award. See 179
P.3d at 680-81.
This case, in which the jury awarded the plaintiff $900,000
in punitive damages, is a good example of what the legislature
feared could happen.3 Here, the State would be entitled to 60
percent, or $540,000, of that award, while the plaintiff would
receive the remaining $360,000. Instead of allowing judgment
to be entered on these terms, the parties could, pursuant to a
confidential settlement, stipulate to the entry of a judgment
dismissing the case without an award of punitive damages.
Because no “judgment including an award of punitive dam-
ages” would be entered, the State would not become a judg-
ment creditor under the 1991 version of the statute and would
have no claim on any proceeds from the suit. A settlement for
any amount greater than $360,000 but less than $900,000
would allow the plaintiff to receive more, and the defendant
to pay less, than under the jury verdict.4 The State, of course,
would be left holding an empty bag.
3
In order to simplify the arithmetic, this example does not take into
account the jury’s award of about $84,950 in non-punitive damages, to
which the State has no claim under the split-recovery statute.
4
If the plaintiff believed that even $360,000 would not withstand judi-
cial scrutiny under BMW of North America v. Gore, 517 U.S. 559, 574-85
(1996), he presumably would settle for a lesser amount. See Parrott v.
Carr Chevrolet, Inc., 17 P.3d 473 (Or. 2001) (setting forth scope and
method of judicial review of punitive damages verdicts after Gore and OR.
REV. STAT. § 18. 537).
12222 PATTON v. TARGET CORPORATION
In the hope of preventing this type of situation, the legisla-
ture amended the statute yet again in 1995. Under this amend-
ment, the State would become a “judgment creditor,” not
upon the entry of a judgment, but “upon the entry of a verdict
including an award of punitive damages.” OR. REV. STAT.
§ 18.540(1) (1995) (emphasis added) (enacted as 1995 OR.
LAWS ch. 688 § 1). The statute, in its current form, provides:
Upon the entry of a verdict including an award of
punitive damages, the Department of Justice shall
become a judgment creditor as to the punitive dam-
ages portion of the award to which the Criminal
Injuries Compensation Account is entitled pursuant
to paragraph (b) of this subsection, and the punitive
damage portion of an award shall be allocated as fol-
lows:
(a) Forty percent shall be paid to the pre-
vailing party. . . .
(b) Sixty percent shall be paid to the Crimi-
nal Injuries Compensation Account of the
Department of Justice Crime Victims’
Assistance Section . . . .
OR. REV. STAT. § 31.735(1).5
But, if the basic intent of the legislature in amending the
statute was to prevent litigants from using post-verdict settle-
ments to deprive the State of its share of punitive damages, it
is not clear that the text of the statute embodies that intent. In
particular, it is not easy to see what it means for the State to
become a judgment creditor upon the entry of a verdict,
before a court has entered a final judgment in a case.
5
The statute was amended again in 1997 in ways not relevant to this
case. See 1997 OR. LAWS ch. 73 § 1. In 2003, the former OR. REV. STAT.
§ 18.540 was renumbered as § 31.735.
PATTON v. TARGET CORPORATION 12223
Although the Oregon Revised Statutes do not define “judg-
ment creditor,” the statutes refer to judgment creditors in sev-
eral provisions apart from the split-recovery statute and, in
each of these instances, the concept of “judgment creditor”
appears inseparable from the existence of a judgment. Thus,
a “judgment remedy” is the “ability of a judgment creditor to
enforce a judgment through execution.” OR. REV. STAT.
§ 18.005(11). In the section of the statute dealing with
enforcement of judgments, “[n]othing in [the relevant sections
of the statute] affects the ability of a judgment creditor to
enforce a judgment by means other than execution.” Id.
§ 18.252(4). The entire apparatus is built on the idea of judg-
ment creditors enforcing their rights, usually by means of exe-
cution, “upon the entry of the judgment.” Id. § 18.252(1).
This is in conformity with the generally accepted definition of
“judgment creditor.” See, e.g., Black’s Law Dictionary 921
(9th ed. 2009) (“A person having a legal right to enforce exe-
cution of a judgment for a specific sum of money.”).
Thus, under one reasonable interpretation of the statute, the
State cannot be a judgment creditor prior to the entry of a
judgment, as that term is normally understood. Even the State
concedes that, until a judgment is entered, the State lacks the
most basic power of a judgment creditor: it cannot enforce its
right to recovery by execution. To hold otherwise would
allow the State to short-circuit the judicial process and
attempt to recover money before a final judgment6 affirming
that it was entitled to the funds. Nevertheless, we cannot con-
clude, as did the district court, that the State does not obtain
any right as a judgment creditor under the statute prior to the
entry of a judgment. In so holding, the district court essen-
tially rendered the 1995 amendment meaningless. This vio-
lates one of the most basic principles of statutory
interpretation, which the Oregon legislature has codified:
6
The Oregon statute defines “judgment” as “the concluding decision of
a court on one or more requests for relief in one or more actions, as
reflected in the judgment document.” OR. REV. STAT. § 18.005(8).
12224 PATTON v. TARGET CORPORATION
[i]n the construction of a statute, the office of the
judge is simply to ascertain and declare what is, in
terms or in substance, contained therein, not to insert
what has been omitted, or to omit what has been
inserted; and where there are several provisions or
particulars such construction is, if possible, to be
adopted as will give effect to all.
OR. REV. STAT. § 174.010. The proper interpretation of the
statute requires a court to find some meaning in the legisla-
ture’s paradoxical decision to make the State a judgment cred-
itor without a judgment.
No Oregon case has interpreted this aspect of the statute.
The case that comes the closest, MAN AG, is of only limited
assistance in resolving this problem. In MAN AG, the trial
court entered a judgment including an award of punitive dam-
ages, but then approved a settlement between the parties and
entered a supplemental judgment that did away with the puni-
tive damages. 179 P.3d at 676. The State intervened, arguing
that the court could not approve a settlement that would
deprive the State of its portion of the punitive damages. Id.
The Oregon Court of Appeals did not reach the merits of the
State’s claim, but held that the State had standing to intervene
in the suit. Id. The court stated that, from the point “when the
court entered the jury’s verdict,” the State
had a vested right to 60 percent of the jury’s award
of punitive damages, subject to any legal challenges
to that award. It was not necessary for the state to
become a full party to the case in order to protect
that right; its status as a judgment creditor, which
gives it the ability to enforce the judgment, is suffi-
cient protection.
Id. at 681 (emphasis added).
The State contends that this “vested right” to the punitive
damages it obtained upon rendition of the jury’s verdict was
PATTON v. TARGET CORPORATION 12225
sufficient to give it veto power over any subsequent settle-
ment that would deprive it of its portion of the punitive dam-
ages. In the State’s view, it had a claim to the proceeds of a
judgment as strong as the plaintiff ’s, and it was therefore a
necessary party to any settlement.
We are not convinced that MAN AG extends as far as the
State suggests.7 In MAN AG, unlike the current case, the trial
court had memorialized the award of punitive damages in a
judgment before the parties reached a settlement. See id. at
676. Under Oregon law, a right to recovery becomes vested
only when it is final: “The first and essential quality of [ ] a
judgment or decree [which gives to it the effect of a vested
right] is that it be a final determination of the rights of the par-
ties.” State ex rel. Weingart v. Kiessenbeck, 114 P.2d 147, 149
(Or. 1941). This was the basis for the Oregon Supreme
Court’s holding in DeMendoza, 51 P.3d at 1245-46, that the
split-recovery statute did not represent an illegal taking:
because no plaintiff had a vested interest in a judgment whose
value was retroactively reduced by the statute, the implemen-
tation of the split-recovery statute did not effect an illegal tak-
ing. If the Oregon Legislature “intended the state to have a
vested interest in an award of punitive damages immediately
upon the entry of a verdict,” MAN AG, 179 P.3d at 680, the
nature of that interest was very different from that of the Ore-
gon Supreme Court’s definition of vested interest.
Indeed, although the MAN AG court stated that “when the
court entered the jury’s verdict,” the State gained “a vested
right to 60 percent of the jury’s award of punitive damages,”
7
In Engquist v. Oregon Department of Agriculture, 478 F.3d 985 (9th
Cir. 2007), aff’d, 128 S. Ct. 2146 (2008), we did observe that “[t]he stat-
ute’s express language, which invites the State to act only ‘[u]pon the
entry of a verdict including an award of punitive damages,’ belies any
inference that the State is required to become a party. . . . Therefore, we
conclude that Oregon is entitled to assert this substantive right without
becoming a party.” Id. at 1001 (quoting OR. REV. STAT. § 31.735) (second
brackets in the original).
12226 PATTON v. TARGET CORPORATION
the court clarified immediately afterward that the State’s “sta-
tus as a judgment creditor . . . gives it the ability to enforce
the judgment.” Id. at 681. Even in this formulation, it is only
the existence of a judgment that can give substance to the
State’s status as judgment creditor. MAN AG tells us very lit-
tle about what powers the State has prior to the entry of a
judgment.
The legislative history8 of the 1995 amendment is helpful
in determining the broad outlines of legislative intent, but it
is not very useful in interpreting the specific details at issue
here. The only legislative history that has been presented to
the court is in the form of two statements quoted in the MAN
AG opinion. One legislator stated:
I heard Attorney General Kulongoski describe that in
some situations after a verdict is reached that maybe
the parties go back and rework the settlement * * *.
The state’s interest in these awards sometimes is
defeated by some maneuvering that seems to enrich
and maybe even more than — windfall might be
kind of a gentle phrase to describe the activity but it
seems like maybe the plaintiff and their lawyer come
out a lot better than perhaps they should.
MAN AG, 179 P.3d at 680 (quoting Tape Recording, S. Judi-
ciary Subcomm. on Civil Process, S.B. 482, Tape 28, Side A
(Or. 1995) (Statement of Randy Miller)) (alteration in origi-
nal). A representative of the bill’s sponsor made a similar
statement:
8
A court in construing an Oregon statute may consider legislative his-
tory offered by one of the parties, and should “give the weight to the legis-
lative history that the court considers to be appropriate.” OR. REV. STAT.
§ 174.020(3). Under the Oregon Supreme Court’s recent decision in State
v. Gaines, 206 P.3d 1042, 1050-51 (Or. 2009), a court may consider legis-
lative history regardless of whether a statute is ambiguous.
PATTON v. TARGET CORPORATION 12227
The Attorney General’s right does not vest until after
the judgment is entered. And so if the parties are
smart and if there is a large punitive damages award
entered, the parties will sit down and construct a
* * * settlement which will provide that no final
judgment will be awarded or that they will stipulate
to a final judgment that will provide an award of
general damages of a certain amount. And parties do
that quite often, by the way, because they like to
avoid the expense of appeal potentially. But they can
under the present statute in essence cut out the Attor-
ney General from that portion of the award because
again, the Attorney General does not have the right
to intervene until the judgment is entered.
Id. at 680-81 (quoting Tape Recording, S. Judiciary Sub-
comm. on Civil Process, S.B. 482, Tape 28, Side A (Or. 1995)
(Statement of John DiLorenzo)) (alteration in original).
It is clear enough from these statements that legislators
were concerned with preventing parties from colluding to
deprive the State of its share of a punitive damages award.
But the two statements do not indicate what powers the State
would have to prevent collusive settlements which cut out the
State’s interest. Not all settlements that do away with
punitive-damages awards represent cynical attempts to carve
up the State’s portion of an award. A plaintiff may be willing
to give up most or all of a punitive damages award in a belief
that the court will never approve the full amount of the jury’s
verdict. In the current case, for example, if Patton believed
that the trial court might grant judgment as a matter of law in
favor of Target, or even a substantial remittitur, he might have
been willing to settle his claim for $84,950, and thus give up
his own claim to punitive damages along with the State’s, in
order to be sure of receiving the full value of the compensa-
tory damages without the delay and uncertainty involved in an
appeal.
12228 PATTON v. TARGET CORPORATION
The legislature might reasonably have believed that this
type of settlement was not as offensive as one in which the
parties divided up the State’s share of the punitive damages
for themselves. The legislature might also have concluded
that the State’s interests would be adequately protected as
long as it had an opportunity to intervene and state its objec-
tions, even if the court retained the power to approve a settle-
ment in spite of the objections. The legislative history
presented to the court is insufficient to rule out either of these
possibilities.
These questions are central and unavoidable in deciding the
current case. Yet any answers we might provide would be, at
best, only our gloss on the text of the statute and reflect only
our reading of the legislative history. If the district court’s
interpretation of the split-recovery statute — that the State
does not become a judgment creditor until the entry of a judg-
ment — violated a principle of statutory interpretation
because it ignored the 1995 amendment to the statute and
“omit[ted] what ha[d] been inserted,” it could be argued that
the State’s proposed interpretation violates the same principle
in the opposite way: it “insert[s] what has been omitted.” OR.
REV. STAT. § 174.010. In short, there are more than one rea-
sonable interpretations of the statute.
Rather than attempt to resolve this conundrum ourselves,
we believe it is the more prudent course to certify the question
to the Oregon Supreme Court. This case meets the statutory
criteria for certification because it involves a determinative
question of state law for which there is no controlling prece-
dent. See OR. REV. STAT. § 28.200. The Oregon Supreme
Court is also likely to find that the case meets the criteria the
court has established for exercising its discretionary power to
accept certified questions. See W. Helicopter Servs., Inc. v.
Rogerson Aircraft Corp., 811 P.2d 627, 631-34 (Or. 1991). In
particular, the Oregon Supreme Court suggested that it
believes the question presented here is important when it
granted review of the Oregon Court of Appeals’ decision on
PATTON v. TARGET CORPORATION 12229
a similar issue. See MAN Aktiengesellschaft v. DaimlerChrys-
ler AG, 189 P.3d 749 (Or. 2008). The parties there, however,
reached a settlement before the court rendered its decision.
See Brent Hunsberger, State Drops Old Dispute on Daimler
Judgment, THE OREGONIAN, Apr. 4, 2009, at B7.
Because this case turns on an open question of Oregon law,
our resolution would not be authoritative, and would represent
only a prediction of how the Oregon Supreme Court would
rule. See Chale v. Allstate Life Ins. Co., 353 F.3d 742, 745
(9th Cir. 2003). By certifying a question in this case, assum-
ing an affirmative response, we, as well as the Oregon Bar
and the lower courts, will have the benefit of an authoritative
decision on this issue.
CONCLUSION
For the reasons described above, we respectfully certify to
the Oregon Supreme Court the following question under Ore-
gon law:
When a jury has returned a verdict that includes
an award of punitive damages under Oregon law, is
the State of Oregon’s consent necessary before a
court may enter a judgment giving effect to any set-
tlement between the parties that would result in a
reduction or elimination of the punitive damages to
which the State would otherwise be entitled under
Oregon Revised Statutes § 31.735?
We respectfully ask the Oregon Supreme Court to exercise
its discretionary authority under Oregon’s Uniform Certifica-
tion of Questions of Law Act, OR. REV. STAT. §§ 28.200 -
.255, to accept and decide this question. Our phrasing of the
question should not restrict the court’s consideration of the
issues involved. We acknowledge that “[t]he court may refor-
mulate the relevant state law questions as it perceives them to
be, in light of the contentions of the parties,” Toner ex rel.
12230 PATTON v. TARGET CORPORATION
Toner v. Lederle Labs., 779 F.2d 1429, 1433 (9th Cir. 1986),
and “[w]e agree to abide by the decision of the Oregon
Supreme Court,” Doyle v. City of Medford, 565 F.3d 536, 544
(9th Cir. 2009). If the court decides that the question pre-
sented in this case is inappropriate for certification, or if it
declines the certification for any other reason, we will resolve
the question according to our best understanding of Oregon
law.
The Clerk will file a certified copy of this Order with the
Oregon Supreme Court under OR. REV. STAT. § 28.215. In the
meantime, this appeal is withdrawn from submission and will
be resubmitted for decision following receipt of the Oregon
Supreme Court’s Opinion on the question certified or its
rejection of the same. This panel retains jurisdiction over fur-
ther proceedings in this court. The parties will notify the
Clerk within ten days after the Oregon Supreme Court accepts
or rejects certification, and again within ten days after the
court renders its Opinion.
IT IS SO ORDERED.
HARRY PREGERSON
United States Circuit Judge, Presiding
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|
260 Cal.App.2d 179 (1968)
W. E. HALL COMPANY, Plaintiff and Respondent,
v.
FRANCHISE TAX BOARD, Defendant and Appellant.
Civ. No. 30432.
California Court of Appeals. Second Dist., Div. Four.
Mar. 18, 1968.
Thomas C. Lynch, Attorney General, Dan Kaufmann and Ernest P. Goodman, Assistant Attorneys General, Neal J. Gobar and Loren Miller, Jr., Deputy Attorneys General, for Defendant and Appellant.
Witter & Harpole and Myron E. Harpole for Plaintiff and Respondent.
FILES, P. J.
This action pursuant to Revenue and Taxation Code section 26102 was brought by plaintiff in the superior court for a refund of California franchise taxes allegedly overpaid for the income year of 1953. Judgment was rendered for plaintiff and defendant has appealed from that judgment.
The case was tried by the court without a jury on a written stipulation of facts and the testimony of one witness for the plaintiff. There is no conflict which can be regarded as factual. The issue is the application of the law to a transaction, the terms of which are clearly described.
In 1953 Pacific Steel Fiber Drums, a corporation (hereinafter called Pacific), was the wholly owned subsidiary of plaintiff, a California corporation (hereinafter called Hall). The two companies were managed by the same officers and the same boards of directors.
In April of 1953 Rheem Manufacturing Company (hereinafter called Rheem) expressed a desire to purchase the business of Pacific.
In the oral negotiations which followed, it was agreed that Rheem would pay $200,000 for the operating assets and the patents, and that it would pay book value for inventories on hand at the time of the transfer. Pacific would retain only its cash, accounts receivable, office equipment and passenger automobiles. Later Rheem, knowing that Pacific was to be *181 liquidated, requested that Hall, not Pacific, sell the assets to it because Rheem desired a financially responsible going concern to stand behind the seller's express and implied warranties in the transaction. This was agreeable to Hall.
On May 14, 1953, Pacific's board of directors adopted a resolution for the winding up of its business on June 30, 1953.
Under date of June 15, 1953, Hall and Rheem executed a written agreement describing the terms of the sale and setting a closing date of June 30, 1953.
On June 29, 1953, the boards of directors of Hall and Pacific adopted resolutions for the sale of the operating assets and patents from Pacific to Hall for a price of $200,000. On the same day the officers of Pacific executed a bill of sale of these assets to Hall, and the following day the officers of Hall executed a similar bill of sale to Rheem.
The journal and general ledger of Pacific recorded the sale of these assets to Hall on June 30, and the books of Hall recorded a sale to Rheem on July 1, 1953.
Pacific retained possession of its assets and continued its operation until the close of business on June 30. The next morning Rheem took over the assets, inventories, payroll and employees, and went ahead with the operation of the business.
On June 30 Hall drew a $100,000 check on one of its bank accounts (which actually had a balance in excess of that amount) payable to Pacific. Pacific set up on its books, on June 30, an account receivable from Hall in the amount of $100,000, reflecting the unpaid balance of the $200,000 sale price.
Rheem gave a check for $100,000 to Hall upon the closing date.
Between June 30 and July 16, 1953, all of Pacific's assets not required to satisfy its liabilities were transferred to Hall, completing the liquidation of Pacific. The $100,000 check drawn by Hall on June 30 was not deposited by Pacific, but was endorsed back to Hall in the course of the liquidation. Later the second $100,000 was paid by Rheem to Hall, and by Hall to Pacific, and then taken back by Hall in the liquidation. Pacific was dissolved on September 4, 1953.
There are three ways of viewing this transaction, as reflected in Hall's contentions, the Franchise Tax Board's contentions and the findings of the trial court.
Hall says Pacific sold its assets to Hall, for $200,000, who resold the same assets at the same price to Rheem. Viewing the transaction this way is beneficial to Hall both on its *182 federal and state tax computations. The difference between Pacific's basis for the assets and the sale price resulted in a gain of $156,865.43 by Pacific. On the federal return Pacific had a capital loss carry forward which would partially offset this gain. For state tax purposes Pacific owed no tax measured by its 1953 income because this was its final year. The distribution of Pacific's assets to Hall resulted in neither gain nor loss because it was a complete liquidation of a subsidiary corporation. (Rev. & Tax. Code, 25031f, since revised and renumbered 24502.) [fn. 1] The sale of assets from Hall to Rheem resulted in neither gain nor loss because Hall purchased and sold at the same price.
The Franchise Tax Board (hereinafter called the Board) contends that the transfer of the operating assets and patents from Pacific to Hall was in substance a distribution in complete liquidation of a subsidiary corporation, resulting in cancellation of the subsidiary's stock. Upon that theory the transfer of the assets from Pacific to Hall resulted in no recognizable gain, but Hall's basis was its subsidiary's basis. (Rev. & Tax. Code, 25071l, since revised and renumbered as 24504, subd. (b).) [fn. 2] Upon this hypothesis, when Hall sold to Rheem, Hall realized a taxable gain measured by the difference between Pacific's basis and the $200,000 price.
It was upon that theory that the Board did on July 11, 1962, demand that Hall pay an additional tax for the year 1953, plus interest. Hall made the payment demanded by the Board, and then filed a claim for refund. When the Board disallowed the refund, this action followed.
The trial court made findings of fact and conclusions of law in which it concluded that the sale by Pacific was not a distribution in liquidation, but was a sale from Pacific to Rheem, in which Hall acted only as a conduit, as a method of guaranteeing title to the assets as requested by Rheem. Upon the theory that the sale was in substance one between *183 Pacific and Rheem, the gain was realized by Pacific and not by Hall. Thus Hall had no taxable gain from the sale and was entitled to a refund of the tax which the Board had exacted.
[1] Inasmuch as the terms of the transaction are not in dispute, the case presents only a question of how the taxing statutes apply to these facts. This is a question of law which the reviewing court must decide for itself. (Pacific Pipeline Constr. Co. v. State Board of Equalization, 49 Cal.2d 729, 736 [321 P.2d 729].)
No reported case has interpreted the statutes as applied to this fact situation. Furthermore, although the United States Internal Revenue Code contains sections comparable to those which are applicable here, the parties have not found any federal case which decides the issue. This court is therefore required to make its own analysis of the transaction and the applicable tax law.
[2a] In interpreting the transaction the taxing authority is not necessarily bound by the language the taxpayer chose to describe it or by the bookkeeping entries chosen to record it.
In Commissioner of Int. Rev. v. Court Holding Co., 324 U.S. 331 [89 L.Ed. 981, 65 S.Ct. 70], where the issue was whether a sale of assets, which was substantially contemporaneous with a corporate liquidation, should be regarded as a sale by the corporation or a sale by the shareholders, the court said (at p. 334 [89 L.Ed. at p. 985]): "The incidence of taxation depends upon the substance of a transaction. The tax consequences which arise from gains from a sale of property are not finally to be determined solely by the means employed to transfer legal title. Rather, the transaction must be viewed as a whole, and each step, from the commencement of negotiations to the consummation of the sale, is relevant. A sale by one person cannot be transformed for tax purposes into a sale by another by using the latter as a conduit through which to pass title. [Fn. omitted.] To permit the true nature of a transaction to be disguised by mere formalisms, which exist solely to alter tax liabilities, would seriously impair the effective administration of the tax policies of Congress."
The sale of assets to Rheem and the liquidation of Pacific were, from a business point of view, one plan and one arrangement. Neither the sale nor the liquidation would have been undertaken independently of the other. The two were linked for reasons quite apart from taxes. In substance, Rheem gave *184 up cash and received assets, Hall gave up stock and received cash, and Pacific gave up assets and redeemed its capital stock.
Although the liquidation and sale were in reality an integrated transaction, the tax laws deal with parts of it separately. A liquidation has one tax consequence, a sale has another. If Pacific had sold its assets in a transaction preceding the liquidation and unrelated to it, the gain would be attributed to Pacific. But if the liquidation had occurred first, and Hall had thereafter sold in a wholly distinct and unrelated transaction, the gain would be taxable to Hall. The problem arises here because the taxpayer chose to combine the events which the law treats separately. It is against this background that the Board and the court must look for the "substance" of this transaction.
[3] One of the features of the sale to Rheem was that Hall would be the seller, so as to be liable upon the seller's warranties. Since Hall agreed to this for a business reason which it deemed sufficient, Hall is in no position to contend that this was a mere matter of form.
The decision in the Court Holding case, supra, does not support plaintiff's argument that "in substance, the transaction was a sale from Pacific to Rheem." In Court Holding the corporation first negotiated a sale of all of its assets and then, upon being advised that the sale by it would result in a large tax, it liquidated and turned over its assets to its shareholders in redemption of their stock. The shareholders thereafter, as individuals, sold the assets to the purchaser. The Supreme Court affirmed a decision of the Tax Court upholding a tax on the corporation upon the finding that "the executed sale was in substance the sale of the corporation."
Court Holding cannot be read as a decision that transactions such as this must be treated as sales by the liquidating corporation, despite the form chosen by the taxpayer. [2b] The taxpayer does not have the same freedom to disregard the form he has chosen, as does the government. (Moline Properties v. Commissioner of Int. Rev., 319 U.S. 436 [87 L.Ed. 1499, 63 S.Ct. 1132].) In the case at bench Hall chose to accept the benefits and burdens of becoming the seller to Rheem, and it is in no position to insist that the Franchise Tax Board disregard that fact.
The remaining question is whether the transfer from Pacific to Hall must be regarded as a sale, or as a liquidation, in exchange for stock. *185
[4] It has already been noted that the sale of Pacific's assets and the liquidation of Pacific were parts of a single plan. But not all elements of the plan appeared simultaneously.pacific's directors and stockholder formally declared their intention to dissolve Pacific on May 14, which was prior to the execution of any formal agreement with Rheem. The decision to pass the assets via Hall was made after Rheem learned of the impending dissolution, and because of it. The transfer of assets from Pacific to Hall was pursuant to a plan which included, as one of its elements, the immediate dissolution of Pacific; and the adoption of this form of transaction was made necessary, in a business sense, because Pacific was liquidating.
The one feature of the entire transaction which is most readily identified as "formalism" is the payment by Hall to Pacific for these assets. Although the $100,000 check was a perfectly good check drawn on a sufficient bank balance, there was no need for it to be, for no one ever expected Pacific to cash it.pacific had no use for the money. As between Hall and Pacific, the only business objective was to transfer the assets out of Pacific and cancel Pacific's stock. Casting the transfer from Pacific to Hall in the form of a sale, to be paid for by a check which would be handed back to the drawer a few days later, had no business purpose except to try to change the tax consequences. In this context the Franchise Tax Board can quite properly regard the transfer of tangible assets to Hall as a distribution in redemption of Pacific's stock, so that this property had the same basis in Hall's hands as in Pacific's; and thus Hall realized a taxable gain when it sold the property to Rheem for a price which was in excess of Pacific's basis.
The judgment is reversed with directions to enter judgment for defendant.
Jefferson, J., and Kingsley, J., concurred.
NOTES
[fn. 1] 1. Former section 25031f provided in pertinent part: "No gain or loss shall be recognized upon the receipt by a corporation of property distributed in complete liquidation of another corporation. For the purposes of this section a distribution shall be considered to be in complete liquidation only if: ... (3) The distribution is by such other corporation in complete cancellation or redemption of all its stock, and the transfer of all the property occurs within the income year; ..."
[fn. 2] 2. Section 25071l provided in pertinent part: "If the property was received by a corporation upon a distribution in complete liquidation of another corporation within the meaning of Sections 25031f or 25031f-1, then the basis shall be the same as it would be in the hands of the transferor."
|
[NOT FOR PUBLICATION]
United States Court of Appeals
For the First Circuit
No. 97-1818
RENEA E. WALIGORA,
Plaintiff, Appellant,
v.
THE PARISH OF CHRIST CHURCH ANDOVER
AND THE REVEREND JAMES A. DIAMOND,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Reginald C. Lindsay, U.S. District Judge]
Before
Torruella, Chief Judge,
Aldrich, Senior Circuit Judge,
and Boudin, Circuit Judge.
Betsy Ehrenberg, with whom Bryan Decker and Pyle, Rome &
Lichten, P.C., were on brief for appellant.
Susan Hughes Banning, with whom George H. Kidder and Hemenway
& Barnes, were on brief for appellees.
April 15, 1998
Per Curiam. After due consideration of the record, the
briefs, and the oral argument in this case, we affirm the order of
the district court.
Costs to be assessed against appellant.
Affirmed.
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 17-4480
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
BOB LEE JONES,
Defendant - Appellant.
Appeal from the United States District Court for the Western District of North Carolina, at
Asheville. Max O. Cogburn, Jr., District Judge. (1:16-cr-00094-MOC-DLH-1)
Submitted: June 11, 2018 Decided: July 18, 2018
Before NIEMEYER, TRAXLER, and KEENAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
James P. McLoughlin, MOORE & VAN ALLEN, PLLC, Charlotte, North Carolina, for
Appellant. R. Andrew Murray, United States Attorney, Amy E. Ray, Assistant United
States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Asheville, North
Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
After a jury trial, Bob Lee Jones was convicted of being a felon in possession of a
firearm and ammunition in violation of 18 U.S.C. §§ 922(g), 924(a)(2) (2012). On appeal,
Jones contends that the district court erred by not allowing hearsay evidence of an
inculpatory statement made by a third party, and by not instructing the jury on involuntary
intoxication as an affirmative defense. He also contends that the evidence was insufficient
to sustain the conviction and that the court had an obligation to investigate sua sponte the
reasons for the all-white jury venire. We affirm.
I
After a night of drinking at a local club in Asheville, North Carolina, Jones and
friends were in a nearby parking lot when shots were fired. Two Asheville police officers
were nearby in their patrol car and ran into the parking lot as people fled the scene. One
fleeing woman gave a brief description of the shooter to one of the officers. The officers
spotted Jones, who matched this description, near the back of the lot. The officers
approached Jones with their firearms drawn and saw an object that looked like a firearm in
Jones’ hand. The officers yelled at Jones to drop his weapon. Jones walked toward a wall
near the edge of the lot and dropped something, then turned, put his empty hands in the air,
and walked toward the officers. The officers forced Jones to the ground and handcuffed
him, and then retrieved the firearm, bullets, and spent shells. In the patrol car, Jones denied
shooting the firearm.
Defense counsel for Jones presented a witness who testified that she saw another
person in the parking lot shoot the firearm and then throw it away. Out of the presence of
2
the jury, Jones sought admission of hearsay through a man who managed the club where
Jones had been drinking prior to closing time. This witness testified that he was in front
of the club at closing time when a man came up to him and stated that he shot his pistol
into the air to break up a fight and then handed the pistol off. The district court refused to
allow the proffered testimony as to the third party’s statement.
“[T]he Constitution guarantees criminal defendants a meaningful opportunity to
present a complete defense.” Holmes v. South. Carolina, 547 U.S. 319, 324 (2006)
(internal quotation marks omitted). “This right includes, at a minimum, the right to put
before a jury evidence that might influence the determination of guilt.” United States v.
Lighty, 616 F.3d 321, 358 (4th Cir. 2010) (alteration and internal quotation marks omitted).
But “a defendant’s right to present a defense is not absolute: criminal defendants do not
have a right to present evidence that the district court, in its discretion, deems irrelevant or
immaterial.” United States v. Malloy, 568 F.3d 166, 177 (4th Cir. 2009). In presenting a
defense, the accused “must comply with established rules of procedure and evidence
designed to assure both fairness and reliability in the ascertainment of guilt and innocence.”
Chambers v. Mississippi, 410 U.S. 284, 302 (1973). When a court is charged with deciding
whether to admit evidence of an alternate perpetrator, the court must “balance two
evidentiary values: the admission of relevant evidence probative of defendant’s guilt or
innocence under [Fed. R. Evid.] 401 with the exclusion of prejudicial, misleading and
confusing evidence under [Fed. R. Evid.] 403.” Lighty, 616 F.3d at 358.
Further, the district court did not abuse its discretion in excluding hearsay testimony
about the inculpatory statement. Jones was able to present his defense that someone else
3
was responsible for the shooting in the parking lot. Moreover, the hearsay statement did
not exonerate Jones because he was charged with unlawful possession of the firearm, not
unlawful discharge.
Nor was the hearsay admissible as a present sense impression under Fed. R. Evid.
803(1) or a statement against interest under Fed. R. Evid. 804(b)(3). There was simply not
enough evidence to show that the hearsay was uttered contemporaneously or substantially
contemporaneously to the event. See United States v. Parker, 936 F.2d 950, 954 (7th Cir.
1991) (stating rationale for present sense impression exception to hearsay rule).
Furthermore, Jones failed to show that the declarant was unavailable, as is required to admit
a statement against interest when the declarant is not present. See United States v.
Alvarado, 816 F.3d 242, 250 (4th Cir. 2016) (stating elements for admissibility of statement
against interest).
II
We have reviewed the district court’s decision not to instruct the jury on the defense
of involuntary intoxication and conclude that there was no abuse of discretion. See United
States v. Savage, 885 F.3d 212, 222 (4th Cir. 2018) (stating standard of review). Under the
circumstances of this case, the proposed instruction was incorrect and unsupported by the
evidence. United States v. Lespier, 725 F.3d 437, 449 (4th Cir. 2013).
III
In assessing whether the evidence is sufficient to support a conviction, we must
determine “whether there is substantial evidence in the record, when viewed in the light
most favorable to the government, to support the conviction.” United States v. Palacios,
4
677 F.3d 234, 248 (4th Cir. 2012) (internal quotation marks omitted). “Substantial
evidence is evidence that a reasonable finder of fact could accept as adequate and sufficient
to support a conclusion of a defendant’s guilt beyond a reasonable doubt.” Id. (brackets
and internal quotation marks omitted). Furthermore, “[d]eterminations of credibility are
within the sole province of the jury and are not susceptible to judicial review.” Id. (internal
quotation marks omitted). If evidence supports different, reasonable interpretations, the
jury decides which interpretation to believe. United States v. Murphy, 35 F.3d 143, 148
(4th Cir. 1994). A defendant challenging the sufficiency of the evidence to support his
conviction bears a heavy burden, United States v. Robinson, 855 F.3d 265, 268 (4th Cir.
2017), and “[r]eversal for insufficient evidence is reserved for the rare case where the
prosecution’s failure is clear.” United States v. Ashley, 606 F.3d 135, 138 (4th Cir. 2010)
(internal quotation marks omitted).
“To show a § 922(g)(1) violation, the government must prove three elements:
(i) that the defendant was a convicted felon at the time of the offense; (ii) that he voluntarily
and intentionally possessed a firearm; and (iii) that the firearm traveled in interstate
commerce at some point.” United States v. Adams, 814 F.3d 178, 183 (4th Cir. 2016)
(internal quotation marks omitted). Jones stipulated that he was a convicted felon and that
the recovered firearm was manufactured outside North Carolina. The only disputed
element was whether Jones possessed the firearm. Possession can be actual, exclusive,
constructive, or joint. United States v. Gallimore, 247 F.3d 134, 136-37 (4th Cir. 2001).
“Possession, whether actual or constructive, can be extremely brief: a minute of possession
is as much an offense as a year of possession.” United States v. Torres-Colon, 790 F.3d
5
26, 32 (1st Cir. 2015) (internal quotation marks omitted). Viewing the evidence in the light
most favorable to the government, we conclude that sufficient evidence supports the
conviction.
IV
Finally, Jones contends the district court committed plain error by not sua sponte
investigating the all-white jury. Because Jones did not pursue and preserve this contention
in the district court, review is for plain error. United States v. Cohen, 888 F.3d 667, 678
(4th Cir. 2018). To demonstrate plain error, Jones must show (1) error, (2) that was plain,
and (3) that affected his substantial rights. United States v. Olano, 507 U.S. 725, 731-32
(1993). We will not exercise out discretion to recognize the error unless the “error seriously
affects the fairness, integrity[,] or public reputation of the judicial proceedings.” Id. at 732
(internal quotation marks omitted). We have reviewed the record and find no plain error.
Accordingly, we affirm the judgment of conviction. 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
6
|
828 F.Supp. 1002 (1993)
Charles C. JONES and Clara E. Jones, Plaintiffs,
v.
SEA TOW SERVICES FREEPORT NEW YORK, INC., Defendant.
No. CV-91-4669.
United States District Court, E.D. New York.
July 21, 1993.
*1003 Frederick A. Lovejoy, Bigham, Englar, Jones & Houston, New York City, for plaintiffs.
Richard P. O'Leary, McCarter & English, New York City, for defendant (Thomas F. Daly, McCarter & English, Newark, NJ, of counsel).
MEMORANDUM AND ORDER
GLASSER, District Judge:
Plaintiffs Charles and Clara Jones, joint owners of the yacht the MISS JADE II, filed the complaint in this declaratory judgment action on November 26, 1991 in response to defendant Sea Tow Services Freeport NY, Inc. ("Sea Tow") having commenced an arbitration proceeding in London, England.[1] Plaintiffs seek a declaration by this court of their rights and responsibilities under a Lloyd's Standard Form of Salvage Agreement ("Lloyd's Open Form" or "LOF") signed by the parties. Defendant counterclaims for outstanding salvage fees owed under the LOF. The parties agreed to stay the London arbitration pending resolution of this action.
Several motions are currently before this court. First, plaintiffs move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure arguing that no material issue of fact exists concerning either this court's power to compel foreign arbitration or the validity of the contract. Second, defendant cross-moves for leave to file a second amended answer stating an additional counterclaim against plaintiffs for breach of a settlement agreement between the parties. In response to the motion to amend, plaintiffs move for Rule 11 sanctions against defendant based on the assertion that the parties never actually entered into a finalized settlement agreement and that even if they did, defendant could have included this counterclaim through its first motion to amend. For the reasons provided below, this court finds that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards governs the LOF at issue; accordingly, this action is hereby stayed pending arbitration in London in accordance with the provisions of the contract between the parties.
FACTS
The MISS JADE II is a 33' pleasure craft registered and moored in New York State. At approximately 8:30 p.m. on the evening of August 20, 1991 during a voyage from Essex, Connecticut to the yacht's home port of Freeport, New York the MISS JADE II was struck by a wave. The boat rolled over, causing the Joneses to sustain some minor injuries. (Deposition of Charles C. Jones, dated July 14, 1992, at 41, 43, 116-17) [hereinafter CCJ Dep. at ___]. The vessel eventually came to rest on Atlantic Beach, Long Island, where a passerby assisted the plaintiffs in tying a line to one of the vessel's cleats to prevent her from drifting. Thereafter, the police were contacted, and an Officer Daly arrived to lend assistance.
Mr. Jones radioed for help from the United States Coast Guard who, in turn, requested that defendant Sea Tow, a professional salvage company, render aid to the stranded vessel. Captain Robert Raia, accompanied by Michael Marsh, arrived at Atlantic Beach in the Mobile I, a Sea Tow land vehicle. Marsh set the vessel's anchor as an additional measure to prevent the MISS JADE II from drifting (CCJ Dep. at 35), at which point Officer Daly left the scene and plaintiffs entered Captain Raia's vehicle. (CCJ Dep. at 143).
Once inside the Sea Tow Mobile I, plaintiffs were handed the Lloyd's Open Form agreement by Captain Raia. Appearing on the front page and throughout the LOF are statements that any disputes under the agreement are subject to arbitration in London, England.[2] The document also expressly states that the law of England, "including the *1004 English law of salvage," governs any proceedings. Furthermore, in large block letters on the front of the LOF appear the words "No Cure, No Pay," meaning that the salvor receives nothing for its risk and efforts if the salvage operation is unsuccessful. If the salvage operation is completed successfully, however, the salvor submits a claim for remuneration based on a number of factors including the vessel's value, the skill and effort necessitated by the salvage operation, and the level of success of that operation. See LOF Article 13; Trico Marine Operators, Inc. v. Dow Chemical Co., 809 F.Supp. 440, 441-43 (E.D.La.1992) (discussing criteria for salvage awards). Should the owner or insurer contest this claim, the disagreement is submitted to arbitration before the Lloyd's of London Arbitration Panel and either party to the agreement who wishes to be heard nominates a representative to proceed in the United Kingdom. Defendant contends that Lloyd's is an expert in the field of salvage awards.
The parties dispute the events that followed Captain Raia handing the LOF to Charles and Clara Jones. Plaintiffs claim that Captain Raia took advantage of their situation by misleading or failing to inform them about the nature of the contract they were signing and by requiring them to sign that contract under difficult and stressful conditions. More specifically, plaintiffs allege that poor lighting, loss of Mr. Jones's glasses, and a head injury sustained by Mrs. Jones prevented them from reading and understanding the LOF agreement. (Plaintiffs' 3(g) Statement ¶¶ 9-10; CCJ Dep. at 52, 66, 105, 112-13, 116-17, 119-20, 137-38; Deposition of Clara E. Jones, dated July 8, 1992, at 28, 34-36) [hereinafter CEJ Dep. at ___].[3] Plaintiffs also assert that Captain Raia induced them to sign the agreement by assuring them that Boat/U.S., their insurer, was familiar with LOFs, (CCJ Dep. at 52; CEJ Dep. at 38-39, 136-37), and by intimating that they would receive no help from Sea Tow if they refused to sign. (CCJ Dep. at 107-08; CEJ Dep. at 30-31, 107, 110). Plaintiffs also point out that Captain Raia did not give them a copy of the agreement to take home with them on the evening of the storm.
Plaintiffs do concede that Captain Raia spent between 30 and 45 minutes explaining something about the agreement to them, although they either disagree or cannot recall the specifies of that conversation. The following deposition testimony concerning the discussions inside the Mobile I is representative. First, Mr. Jones testified as follows:
Q: Looking at the document that has been marked D 1 for identification with today's date which is the Lloyd's salvage agreement, did your wife at that time that was signed in your name tell Capt. Raia that she objected to signing it?
* * * * * *
A: She signed under protest. You needed a lawyer to read these forms to see what it was all about, but at this point, he couldn't do anything unless we signed. That's where the signature comes in.
Q: Did your wife say to Capt. Raia "I am signing this under `protest'"?
A: Something to that effect. You couldn't read it, the lighting was poor.
Q: Precisely what do you recall your wife saying?
A: I don't recall exact words. We were trying to get something going. He kept trying to explain something about some law, but we didn't understand what he was talking about. At this point, we were upset, wet, cold and the only thing that I understood is that he couldn't do anything unless we signed something.
Q: How long did he try and explain it to you?
A: How long did it take him? I don't know.
Q: Your best estimate?
*1005 A: I don't recall. 45, 40 minutes, a half hour, I don't recall.
Q: Did your wife ever say to Capt. Raia "I don't want to sign this"?
A: Yes. Neither one of us wanted to sign, we don't sign anything without reading it but at that point we were just like over a barrel, we had to sign something otherwise there was a possibility of losing the boat drifting out to sea, something had to be done immediately.
Q: At the time the agreement was signed, Capt. Raia's assistant had already put the anchor out, hadn't he?
Mr. Lovejoy: Objection.
A: I don't recall whether it was done after or before.
(CCJ Dep. at 93-94). And Mrs. Jones testified:
Q: Now, you've testified, I believe, that you were in the four by four for about 40 to 45 minutes before the agreement was signed; is that correct?
A: It seemed to be that much. It seemed to be. I wasn't looking at a watch.
Q: During that period of time, did Captain Raia make an effort to explain the agreement to you?
A: Captain Raia said he deals with Boat/U.S. all the time, they were familiar with the forms and we wouldn't have a problem. It is a reputable company, right down the road"right down the canal from you"; this was 1, 2, 3, according to him.
He would not read that entire form for us. He did not explain that form to us properly. It was misleading what he said. And I will stand by that.
Q: Did he say anything else other than what you just said?
A: Yes. He says, "Don't worry about it. We're familiar with them, O.K. They deal with us all the time. They are familiar with the form."
I'm not familiar with the form. They are familiar with the form.
Q: Did he saying [sic] anything else?
A: Basically that's the way it went for a while, till he finally convinced us, you know, and he said he would not could not help us unless the form was signed, which I'm sure you will see.
(CEJ Dep. 136-37).
In stark contrast to plaintiffs' version of the above event, defendant asserts that Mrs. Jones actually read the LOF, that there was ample light to read the document, and that Mr. Jones had ample time to read it. (Defendant's 3(g) Statement ¶¶ 4, 12; Affidavit of Captain Robert Raia, dated September 16, 1992, at ¶¶ 5-6). In addition, defendant claims that Captain Raia read to plaintiffs portions of something called the Miranda Act for Salvors, (Deposition of Captain Robert Raia, dated July 8, 1992, at 76-77), and informed plaintiffs, prior to their signing, that the LOF was a salvage and not a towage agreement. (Raia Aff. ¶ 11 & Exhs. B-D). The following hand-written statement on the LOF corroborates this assertion:
I understand that this agreement is a salvage agreement, not a towerage agreement and that this agreement has been explained to me before I signed it.
Sea Tow does not claim that Mrs. Jones wrote this statement; rather, the words were xeroxed onto the page prior to her signing. Nevertheless, the statement appears in large, off-set writing and Mrs. Jones inscribed her husband's name immediately above and below the quoted language. Finally, Captain Raia admits not specifically discussing the London arbitration or choice-of-law provisions with plaintiffs. (Raia Dep. at 118-20).
The vessel was hauled to Mako Marina during the next high tide, which occurred at 8:30 a.m. on the morning following the wreck. Mako Marina is located in the same inlet as Yachtsman's Cove, some 400 yards away. The MISS JADE II remained at Mako for 27 days under circumstances which also are disputed by the parties. Plaintiffs contend that Sea Tow needlessly blocked the vessel at the nearby marina resulting in the Joneses being billed for additional unnecessary storage sums. (Plaintiffs' 3(g) Statement ¶¶ 21-23). Defendant argues that the delay was a consequence of a billing dispute between Mako Marina and plaintiffs' insurer and delays by plaintiffs' insurer in arranging for a survey of the vessel. (Defendant's 3(g) Statement ¶ 9-11).
*1006 Pursuant to provisions of the LOF, Sea Tow commenced a foreign arbitration proceeding against the Joneses in London, England on or about November 21, 1991. As mentioned above, that arbitration was stayed by agreement of the parties at approximately the same time that plaintiffs commenced this action. The depositions of Clara Jones, Charles Jones, and Captain Raia, all the principals in this action, have been taken.
In their complaint, plaintiffs contend that the LOF is a contract of adhesion, that it was signed by one of the plaintiffs while under mental and physical distress, that she was fraudulently induced into the signing, and that she entered into the contract because of mistake; based on these circumstances, plaintiffs urge this court to declare the LOF unenforceable. Plaintiffs also argue that this court may not compel foreign arbitration or confirm any resulting arbitration award because the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. § 201 et seq., prohibits the arbitration of disputes overseas when both of the parties are American citizens and the event occurred in United States waters. By way of relief, plaintiffs seek a stay of the arbitration proceedings already commenced in London and an off-set in any towage fee award to Sea Tow to account for the costs incurred in storing the vessel. In its answer, defendant argues that the arbitration provision in the LOF deprives this court of jurisdiction over the dispute and entitles Sea Tow to an Order compelling arbitration in accordance with the contract. Defendant also counterclaims for outstanding salvage costs and cross-moves to amend its answer to state a second counterclaim for breach of a settlement agreement between the parties.
DISCUSSION
As alluded to above, plaintiffs rest their motion for summary judgment primarily on two arguments. First, they argue that a court cannot enforce an agreement to arbitrate if the disputed agreement is "null and void, inoperative or incapable of being performed," 9 U.S.C. §§ 2, 202; more specifically, plaintiffs in this case claim that their agreement is invalid based on mistake, misrepresentation, duress, and the fact that the LOF is a contract of adhesion. Second, plaintiffs assert that the LOF fails to satisfy the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which they argue is the sole authority for a United States court to order arbitration in a foreign forum. Since the only connection between the parties' dispute and the arbitral forum is the agreement to arbitrate there, plaintiffs contend, this court should stay the London arbitration, declare the contract invalid, and decide the monies owed for the services performed by Sea Tow in August of 1991.
I. Enforceability of Arbitration Agreement
The first issue to be resolved in this case is whether the parties' agreement to arbitrate is enforceable. "[R]eversing centuries of judicial hostility to arbitration agreements, [Sections 1 through 9 of Title 9 of the United States Code, known as the Federal Arbitration Act (the "Act" or the "FAA")] was designed to allow parties to avoid `the costliness and delays of litigation,' and to place arbitration agreements `upon the same footing as other contracts.'" Scherk v. Alberto-Culver Co., 417 U.S. 506, 511-12, 94 S.Ct. 2449, 2453, 41 L.Ed.2d 270 (1974) (quoting H.R.Rep. No. 96, 68th Cong., 1st Sess., 1, 2 (1924)). Section 2 of the Act provides in pertinent part:
A written provision in any maritime transaction or contract evidencing a transaction in commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an exiting controversy arising out of such a contract, transaction or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
9 U.S.C. § 2 (emphasis added). Section 3 of the Act requires a court to stay its proceedings if it is satisfied that an issue before it is arbitrable under the agreement. 9 U.S.C. *1007 § 3;[4]Scherk, 417 U.S. at 511, 94 S.Ct. at 2453. And section 4 provides in relevant part as follows:
A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28 ... for an order directing that such arbitration proceed in the manner provided for in such agreement.... The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration ... is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. The hearing and proceeding shall be within the district in which the petition for an order directing such arbitration is filed.
9 U.S.C. § 4 (emphasis added). The question now presented is whether the "making of the agreement for arbitration" in this case is in issue.
The seminal Supreme Court case discussing this topic is Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967). The plaintiff in Prima Paint argued that it should not be bound by an arbitration clause in a contract signed by the parties because it had signed the contract as a direct result of defendant's false promises. Id. at 398-99, 87 S.Ct. at 1803-1804. The Supreme Court rejected this argument, stating that
if the claim is fraud in the inducement of the arbitration clause itself an issue which goes to the "making" of the agreement to arbitrate the federal court may proceed to adjudicate it. But the statutory language does not permit the federal court to consider claims of fraud in the inducement of the contract generally.
Id. at 403-04, 87 S.Ct. at 1806 (footnote omitted). In effect, the Court reasoned that the arbitration clause constituted a severable agreement apart from the contract in which it was contained. See Schacht v. Beacon Ins. Co., 742 F.2d 386, 389 (7th Cir.1984) ("[O]nly when the claimed contractual invalidity goes to the arbitration clause itself does the court determine the existence of a contractual provision: `Where the claim of invalidity goes to the entire contract containing the agreement to arbitrate, ... [t]he issue is for an arbitrator to decide.'") (quoting Matterhorn, Inc. v. NCR Corp., 727 F.2d 629, 630 n. 3 (7th Cir.1984)).
In raising a claim of fraudulent inducement of contract, a party must argue that its knowing assent to the terms of the contract followed from a false promise by the other side; thus, unless the specific arbitration provision itself was obtained via a false promise, the signatory has fairly agreed to submit disputes to arbitration. Where "fraud in the factum" is alleged, however, the Prima Paint notion of the severability of the arbitration clause has no application.[5] If no agreement ever existed, it makes no sense to apply Prima Paint's requirement of a specific attack on the making of the arbitration clause itself. The Eleventh Circuit explained this theory concisely in Cancanon v. Smith Barney, Harris, Upham & Co., 805 F.2d 998 (11th Cir.1986) (per curiam), a case in which the plaintiffs alleged that the defendant took *1008 advantage of their inability to read English and persuaded them to sign securities account agreements by misrepresenting the character of those documents:
Where misrepresentation of the character or essential terms of a proposed contract occurs, assent to the contract is impossible. In such a case there is no contract at all. Restatement (Second) of Contracts § 163, comment a (1977). In Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51, 54-55 (3d Cir.1980), the court stated "[t]he mere execution of a document ... does not negate a factual assertion that such signature was not intended to represent a contractual undertaking."
Id. at 1000; see also Chastain v. Robinson-Humphrey Co., 957 F.2d 851, 855 (11th Cir. 1992); Interocean Shipping Co. v. National Shipping and Trading Corp., 462 F.2d 673, 676 (2d Cir.1972) (reversing district court's dismissal of action pursuant to arbitration clause since plaintiffs contested ever assenting to material provisions in charter agreement thereby calling into question existence of contract), cert. denied, 423 U.S. 1054, 96 S.Ct. 785, 46 L.Ed.2d 643 (1976); Pollux Marine Agencies v. Louis Dreyfus Corp., 455 F.Supp. 211, 218 (S.D.N.Y.1978) ("The issue in Prima Paint ..., fraud in the inducement, differs from the issue in dispute here in that fraud in the inducement affects only the validity, legality or enforceability of a contract; it does not negate the existence of a contract and thereby raise a question as to the existence, validity, legality or enforceability of the arbitration clause therein.") (emphasis added); cf. C.B.S. Employees Fed. Credit Union v. Donaldson, Lufkin & Jenrette Secur. Corp., 912 F.2d 1563, 1566-68 (6th Cir. 1990) (apparently rejecting factum/inducement distinction in Prima Paint context but refusing to compel arbitration because "where a plaintiff's pleading attacks the contract in general, as well as the arbitration clause contained therein, the allegation of fraud as to the arbitration clause should be decided by the district court.").[6]
What the above-cited cases have in common is that they all posed the preliminary question of whether or not a contract existed at all. That is not the issue in this case. As an initial matter, although plaintiffs assert that Captain Raia did not specifically mention the arbitration provision to them, they do not claim that that provision itself was fraudulently procured apart from the remainder of the contract. With respect to the entire LOF, plaintiffs contend that it is voidable because it was procured by Sea Tow as a result of Captain Raia's fraud and the Joneses' duress. Irrespective of these allegations, all of which go to the issue of whether and to what extent the LOF is enforceable, it is clear that an agreement of some form exists between the parties. Testimony reveals that plaintiffs understood, when they signed the LOF, that it constituted a means by which Captain Raia on behalf of Sea Tow would move the MISS JADE II to a marina in return for compensation:
Q: How did you think [Captain Raia] was going to get paid?
A: Through our insurance company.
Q: So you knew
A: I'm looking for tow job whatever he have to do to get it out take it to a marina and then wewhoever had the boat, repair it.
Q: Did he say he was going to charge you for a tow?
A: He didn't tell me anything. I assume that's a towing company.
Q: Did he discuss with you the concept of signing an agreement?
* * * * * *
A: [Y]es, he said he couldn't touch the boat unless I signed some sort of agreement?
Q: Did that seem reasonable to you?
* * * * * *
A: I had no choice. Either that or leave the boat there.
*1009 Q: Did you think it was necessary to get the boat off that night or could you have left it until the next day.
A: I don't know.
(CCJ Dep. at 50-51, 69-70). And Mrs. Jones testified:
Q: Did you have an understanding at the time you signed the agreement that the agreement provided a method for Sea Tow to get paid for their services?
* * * * * *
A: I understood the agreement was providing payment. What method they used, I had no knowledge of. Okay? How they calculate the payments, I have no knowledge of. I know that it allowed the insurance company I assumed it allowed the insurance company to pay them for their services to us. Towing services to us. At that time it did not mention anything other to me, he did not mention anything other to me.
Q: Did you understand at the time you signed the agreement that somewhere within the four corners of that agreement, there was a proviso, provision for a manner in which Sea Tow would get paid?
* * * * * *
A: I knew that they were going to get paid. What method or how they calculate their payments was no concern of mine.
Q: And you understood that this document that would be marked D1 for identification where you signed your husband's name provided something about how they were going to get paid, you understood that, didn't you?
* * * * * *
A: I understood that this was going to allow payment. How they calculate it, what method they're going to use, is not my concern.
(CEJ Dep. at 43-46). Moreover, Mrs. Jones's explanation of why she signed her husband's name to the LOF confirms that plaintiffs knew they were entering into an agreement at that time, although they believed that the signature could eventually render the LOF voidable:
Q: Why did you sign his name.
A. [B]ecause I did not know I felt good about [Captain Raia] being there but when he put the pages and he said to us that he could not help us unless we signed first, it scared me. It really made me leery and I am in a four by four, the light is over him in the front, we're in the back and he gives this to my husband and my husband says listen I don't have my glasses, I can't see this. He gives it back and I said let me see it and I reach for it, okay and I still don't know what it was all about and he says you asked me a question, please let me answer it. He said to me well, Boat/US is familiar with this. We work for them all the time, you see us all over the place. I said yes, I do. I took them at good faith and I took him for his word however, he insists that we sign this before he do anything so I said I can't do anything for you.
At this time, the police is gone, nobody is there but him and us in the middle of nowhere. Yes, I signed it. And I told him I was going to sign my husband's name I said because I don't know how good this will be for you.
Q: Did you tell him that you signed your husband's name all the time?
A: No, I didn't. I didn't tell him I signed his name all the time, I told him I was going to sign his name to this paper. I could have signed my own name. I'm part owner.
Q: Did you tell him you were signing your husband's name to the paper because you thought that way the agreement would be unenforceable?
A: I said if it was something that was not supposed to be signed it would be something that would be looked at.
Q: So was your thought in your own mind was the thought that it wouldn't be enforceable?
A: Sure it was something I wasn't supposed to sign.
(CCJ Dep. at 118; see also CEJ Dep. at 28-29). In sum, this action falls under the rule of Prima Paint: where parties allege fraudulent inducement of the contract as a whole, the arbitration agreement is enforceable and *1010 the dispute is arbitrable. See, e.g., Bhatia v. Johnston, 818 F.2d 418, 421-22 (5th Cir.1987) (finding that plaintiff's claim of fraud related to entire agreement and not just arbitration clause when plaintiff, who did not read agreement, alleged that agreement was not explained to him, that he had no bargaining power, that it was a contract of adhesion, and that he relied on misrepresentations made to him).
Plaintiffs' reliance upon Black Gold Marine, Inc. v. Jackson Marine Co., 759 F.2d 466 (5th Cir.1985), does not undermine this conclusion since Black Gold, like the cases cited above, involved the question of whether a valid contract was formed in the first place. Faced with a declaratory judgment action seeking a determination of the validity of an LOF between a boat owner and a salvor, the Black Gold court proceeded directly to a bench trial on the issue of contract validity. Id. at 469-70. The district court found credible the Captain's testimony that the salvor had led him to believe that the LOF was solely "designed to limit [the salvor's] liability for any damage to the [boat] that resulted from the tow," id. at 468, and therefore held that the contract was void. The Fifth Circuit affirmed, determining that the lower court's findings of fact were not clearly erroneous. Id. at 470. In so doing, the appellate court explained in a footnote as follows:
In a lingering challenge to the fraudulent procurement issue, [the salvor] argues that the district court was not authorized to find fraud where [the Captain] admitted that he did not read all of the provisions of the contract. [This] argument places the cart before the horse. While it is true that ordinarily a party who intentionally signs a document is bound by its contents, regardless of whether he read the document, see Donovan v. Mercer, 747 F.2d 304, 408 n. 4 (5th Cir.1984); Quality Foods, Inc. v. U.S. Fire Ins. Co., 715 F.2d 539, 542 (11th Cir.1983), if the party who did not read the document was induced to sign the document through the defendant's fraud or misrepresentation, that party may nevertheless rescind the contract. Kennett-Murray Corp. v. Bone, 622 F.2d 887, 892 (5th Cir.1980). Notwithstanding [the Captain's] apparently meritorious contention that he diligently attempted to ascertain the meaning of the document, therefore, [the salvor's] fraudulent activities eliminated [the Captain's] need to carefully read the entire document.
Id. at 470 n. 1 (emphasis added). As detailed above, the facts of the case before this court differ materially from the facts in Black Gold: there is no question that the Joneses understood that they were forming a contract by which their insurer would compensate Sea Tow. Therefore, this case in contrast to Black Gold is subject to the rule of Prima Paint.[7]
*1011 In sum, because this court finds no fraud in the factum in connection with the contract or fraud in the inducement in connection with the arbitration clause, it consequently holds that enforcement of the arbitration provision in the LOF agreement accords with the parties' expectations and intentions. It also is consistent with recent Second Circuit authority demonstrating the continued vitality of the federal policy favoring arbitration. See, e.g., Progressive Casualty Insurance Co. v. C.A. Reaseguradora Nacional de Venezuela, 991 F.2d 42, 48 (2d Cir.1993) (reversing district court's refusal to stay arbitration). What remains to be determined, however, is whether the parties' choice of forum and procedure for this arbitration is enforceable. To that question, this court now turns.
II. Arbitration in a London Forum
A. The Convention
Sections 201 through 208 of Title 9 comprise the enabling legislation in this country for the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, June 10, 1958, 21 U.S.T. 2517, T.I.A.S. 6997, 330 U.N.T.S. 38 (1970) (the "Convention"). Section 202 defines the scope of the Convention:
An arbitration agreement or arbitral award arising out of a legal relationship, whether contractual or not, which is considered as commercial, including a transaction, contract, or agreement described in section 2 of this title, falls under the Convention. An agreement or award arising out of such a relationship which is entirely between citizens of the United States shall be deemed not to fall under the Convention unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states. For the purpose of this section a corporation is a citizen of the United States if it is incorporated or has its principal place of business in the United States.
9 U.S.C. § 202 (emphasis added). Section 206 grants a district court authority to compel arbitration in accordance with the agreement between the parties as follows:
A court having jurisdiction under this chapter may direct that arbitration be held in accordance with the agreement at any place therein provided for, whether that place is within or without the United States. Such court may also appoint arbitrators in accordance with the provisions of the agreement.
9 U.S.C. § 206. And Section 207 requires a United States court to confirm a foreign arbitral award if either party applies for confirmation within three years and if the court does not find Section 202 to bar recognition. 9 U.S.C. § 207.
In Sedco, Inc. v. Petroleos Mexicanos Mexican Nat. Oil Co. (Pemex), 767 F.2d 1140 (5th Cir.1985), the Fifth Circuit described the interplay between the Federal Arbitration Act Chapter One of Title 9 which is discussed above and the Convention Chapter Two of that Title as follows:
Both the Arbitration Act and the Convention provide that if a dispute in a pending lawsuit is subject to arbitration, the district court "shall on application of one of the parties stay the trial of the action until such arbitration has been had." Both provide that the district court "shall make an order directing the parties to proceed to arbitration" when the site for arbitration is within the district. But § 206 of the enabling legislation for the Convention also authorizes district courts to order parties to proceed with a Convention arbitration even outside the United States.
Id. at 1146 (footnotes omitted). The Sedco court also discussed the federal policy in favor of arbitration:
The Supreme Court leaves no doubt that: "The goal of the convention, and the principal purpose underlying American adoption and implementation of it, was to encourage the recognition and enforcement of commercial arbitration agreements and international *1012 contracts and to unify the standard by which the agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries."
Id. at 1147 (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15, 94 S.Ct. 2449, 2457 n. 15, 41 L.Ed.2d 270 (1974)); see generally Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 630, 105 S.Ct. 3346, 3355-3356, 87 L.Ed.2d 444 (1985) (strong federal policy favoring arbitration takes on even more importance in multinational commerce); Progressive Casualty, 991 F.2d 42 (construing Lloyd's of London arbitration clause broadly in light of strong federal policy favoring arbitration); Meadows Indemnity Co. v. Baccala & Shoop Insurance Services, Inc., 760 F.Supp. 1036, 1040-45 (E.D.N.Y.1991) (discussing subject matter capable of settlement by arbitration under Convention in light of strong arbitration policy).
B. Compelling Foreign Arbitration
Plaintiffs in this action assert that this court lacks power to compel arbitration in London under Section 206 because the agreement at issue does not meet the requirements of Section 202. Specifically, they argue that an agreement to arbitrate abroad does not fall within the Convention when that agreement is solely between United States citizens unless there is a reasonable relationship with the designated foreign state. For support, they quote at length from and rely primarily on Brier v. Northstar Marine, Inc., CV-91-597, 1992 WL 350292 (D.N.J. April 23, 1992), the first case to consider the precise question at issue.[8]
Citing the legislative history of the Convention and its enabling legislation, defendant responds by arguing that Congress intended the statute to encourage submissions of international commercial disputes to arbitral bodies and to ensure that any foreign arbitral awards would be enforceable in United States courts. See Andros Compania Maritima, S.A. v. Andre & C.I.E., S.A., 430 F.Supp. 88 (1977) (finding consistent "the Convention's design i.e., to encourage submissions of international commercial disputes to arbitral proceedings" and "the longstanding federal policy favoring resort to arbitration of disputes, whether or not entirely domestic"). Therefore, defendants assert, enforcing this arbitration provision which specifies London as the arbitral forum and therefore has some connection to a foreign state is consistent with the goals of the Convention and the FAA as well as with the parties' intentions.
The parties also express vastly divergent views of the policy considerations implicated by this contract. Plaintiffs argue that the LOF allows salvors to receive higher salvage awards and to coerce plaintiffs into settlement because of a reluctance to arbitrate abroad. Defendant, in contrast, argues that the Committee of Lloyd's is the only internationally recognized body dealing with marine salvage arbitrations and that Lloyd's "and salvage arbitration are virtually synonymous in the maritime world of maritime law." Defendant emphasizes that since no salvage fee is set prior to performing such contracts, uniformity is essential. Bearing these arguments in mind, this court turns to the question of whether the LOF at issue fulfills the requirements of Section 202.
As an initial matter, it is not clear that the distinction between the two sections that authorize orders to compel arbitration 9 U.S.C. §§ 4 and 206 is relevant to this case. Plaintiffs primarily seek a declaration that the LOF is void, and defendant, in response, requests that this court stay the action and allow the arbitration to proceed. Thus, there is no request to "compel" arbitration in London, the remedy to which Sections 4 and 206 are directed. Furthermore, it is entirely unclear that courts which have interpreted Section 4 to restrict the location of the arbitral forum to the physical boundaries of the district in which the court sits have correctly analyzed the language of the statute. See, e.g., Econo-Car Int'l v. Antilles Car Rentals, Inc., 499 F.2d 1391, 1394 (3d Cir.1974) (finding Section 4's directive that arbitration be *1013 conducted according to terms of agreement "implicit at best" and thus heeding "unambiguous statutory language limiting the district court's power to order arbitration outside of the district."). The two clauses of Section 4 are easily reconciled by a close reading of the statutory language: the court in the district in which the petition was filed must "hear" the parties concerning whether the "making of the agreement for arbitration" is at issue; once that "hearing" or "proceeding" takes place, the court must order arbitration "in accordance with the agreement." 9 U.S.C. § 4; cf. Snyder v. Smith, 736 F.2d 409, 418-20 & n. 7 (7th Cir.) (describing dilemma and holding that absent "compelling or countervailing" reason, district court must order arbitration as provided in contract even if forum is outside of district), cert. denied, 469 U.S. 1037, 105 S.Ct. 513, 83 L.Ed.2d 403 (1984).
Accepting that an agreement to arbitrate exists, the question presented to this court is not whether it should compel arbitration but rather whether it should adhere to the LOF and stay this action pending arbitration in London. As no court in this circuit has addressed this precise question, two considerations are relevant: the law governing forum-selection clauses; and the applicability of the Convention, which empowers this court to confirm any resulting arbitral award.
C. Forum-Selection Clauses
In Scherk v. Alberto-Culver, 417 U.S. at 518-19, 94 S.Ct. at 2456-57 the Supreme Court compared arbitration clauses to forum-selection clauses as follows:
Two Terms ago in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 [92 S.Ct. 1907, 32 L.Ed.2d 513] we rejected the doctrine that a forum-selection clause of a contract, although voluntarily adopted by the parties, will not be respected in a suit brought in the United States "`unless the selected state would provide a more convenient forum than the state in which suit is brought.'" Id. at 7 [92 S.Ct. at 1912]. Rather, we concluded that a "forum clause should control absent a strong showing that it should be set aside." Id. at 15 [92 S.Ct. at 1916]. We noted that "much uncertainty and possibly great inconvenience to both parties could arise if a suit could be maintained in any jurisdiction in which an accident might occur or if jurisdiction were left to any place [where personal or in rem jurisdiction might be established]. The elimination of all such uncertainties by agreeing in advance on a forum acceptable to both parties is an indispensable element in international trade, commerce, and contracting." Id. at 13-14 [92 S.Ct. at 1915].
An agreement to arbitrate before a specified tribunal is, in effect, a specialized kind of forum-selection clause that posits not only the situs of suit but also the procedure to be used in resolving the dispute. The invalidation of such an agreement in the case before us would not only allow the respondent to repudiate its solemn promise but would, as well, reflect a "parochial concept that all disputes must be resolved under our laws and in our courts.... We cannot have trade and commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in our courts." Id. at 9, 92 S.Ct. at 1913.
(Emphasis added) (footnotes omitted). As this language instructs, courts are to give substantial deference to the parties' choice of location and manner in which they agree to resolve their disputes. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, ___-___, 111 S.Ct. 1522, 1526-28, 113 L.Ed.2d 622 (1991) (refusing to adopt lower court's determination "that a non-negotiated forum-selection clause in a form ticket contract is not enforceable simply because it is not the subject of bargaining."); Roby v. Corporation of Lloyd's, 996 F.2d 1353, 1363 n. 2 (2d Cir.1993) (discussing presumptive validity of forum-selection and arbitration clauses and explaining that "contracts entered into freely generally should be enforced because the financial effect of forum selection and choice of law clauses likely will be reflected in the value of the contract as a whole."); Chasser v. Achille Lauro Lines, 844 F.2d 50, 54 (2d Cir.1988) (forum-selection clause "grants an important right that should be recognized unless the party resisting enforcement shows the clause to be unreasonable."); Avis Rent A Car System Inc. v. Garage Employees *1014 Union, Local 272, 791 F.2d 22, 26 (2d Cir. 1986) (reversing district court's refusal to enforce contract requiring arbitrators to be selected in certain way from among specific group because "analogous contractual forum selection clauses are ordinarily binding and enforceable unless the party resisting them shows them to be unreasonable").
While espousing this deferential policy, Supreme Court cases discussing forum-selection clauses also have made clear that when faced with "an agreement between two Americans to resolve their essentially local disputes in a remote alien forum ... the serious inconvenience of the contractual forum to one or both of the parties might carry greater weight in determining the reasonableness of the forum clause." The Bremen, 407 U.S. at 17, 92 S.Ct. at 1917 (emphasis added);[9]see also Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953, 957 (10th Cir.) (discussing forum-selection and choice-of-law clauses and explaining that "[w]hen an agreement is truly international, as here, and reflects numerous contacts with the foreign forum, the Supreme Court has quite clearly held that the parties' choice of law and forum-selection provisions will be given effect."), cert. denied, ___ U.S. ___, 113 S.Ct. 658, 121 L.Ed.2d 584 (1992). For the purposes of this case, Section 202 of Title 9 defines when a dispute is wholly domestic or instead is sufficiently connected to a foreign forum to justify enforcing a foreign arbitration clause. See Bergesen v. Joseph Muller Corp., 710 F.2d 928, 933 (2d Cir.1983) ("Inasmuch as it was apparently left to each state to define which awards were to be considered nondomestic, ... Congress spelled out its definition of that concept in section 202.").[10] Therefore, bearing in mind *1015 the deference given to forum and arbitration clauses, this court turns to the language and applicability of Section 202.
D. Applying the Convention
A United States court determining whether the Convention applies must resolve four questions: (1) whether there is an agreement in writing to arbitrate the subject of the dispute; (2) whether the agreement provides for arbitration in the territory of a signatory of the Convention; (3) whether the agreement arises out of a legal relationship, contractual or not, which is considered commercial; and (4) whether a party to the agreement is a foreign citizen or the relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation to one or more foreign states. See Ledee v. Ceramiche Ragno, 684 F.2d 184, 186-87 (1st Cir.1982); see also Cargill Int'l S.A. v. M/T Pav Dybenko, 991 F.2d 1012, 1018 (2d Cir.1993) ("[T]hree basic requirements must be met for a district court to find jurisdiction under the Convention: `the award (1) must arise out of a legal relationship (2) which is commercial in nature and (3) which is not entirely domestic in scope.'") (quoting Ministry of Defense of the Islamic Republic of Iran v. Gould, Inc., 887 F.2d 1357, 1362 (9th Cir.1989), cert. denied, 494 U.S. 1016, 110 S.Ct. 1319, 108 L.Ed.2d 494 (1990)); Corcoran v. Ardra Insurance Co., 657 F.Supp. 1223, 1227 (S.D.N.Y.1987) (describing above inquiry and policy behind adoption of Convention), appeal dismissed and mandamus denied, 842 F.2d 31 (2d Cir.1988). Should all these questions be answered affirmatively, a court must order arbitration unless it finds the agreement "null and void." Riley, 969 F.2d at 959; Ledee, 684 F.2d at 187; see also McCreary Tire & Rubber Co. v. CEAT S.P.A., 501 F.2d 1032, 1037 (3d Cir.1974) (holding that when claim falls within scope of arbitration clause enforceable under Convention, court must refer parties to arbitration).
Applying this four-part test, there is no question that a written agreement to arbitrate this dispute exists, that both the United States and the United Kingdom are signatories to the Convention, and that the parties' relationship is commercial. The question to be resolved then is whether the parties or the contract bears a "reasonable" relationship with a foreign nation so as to allow Section 202 to apply. See H.R.Rep. No. 91-1181, 91st Cong., 2d Sess. 2, reprinted in 1970 U.S.Code Cong. & Admin.News 3601, 3602 ("The second sentence of section 202 is intended to make it clear that an agreement or award arising out of a legal relationship exclusively between citizens of the United States is not enforceable under the Convention in U.S. courts unless it has a reasonable relationship with a foreign state."). Neither the Joneses nor Sea Tow is a foreign citizen, the property the MISS JADE II is located in New York, and the salvage, towing, and storage all occurred in New York. Therefore, this agreement falls within Section 202 of the Convention only if this court finds that the LOF's selection of English law and its designation of Lloyd's of London as arbitrator constitutes a reasonable commercial relationship with the United Kingdom or indicates that the parties envisaged enforcement abroad.
The two courts to address the enforceability of identical LOF arbitration provisions both concluded that the Convention was not applicable. See Reinholtz v. Retriever Marine Towing & Salvage, No. CV-92-14141 (S.D.Fla. May 21, 1993); Brier v. Northstar Marine, Inc., CV-91-597, 1992 WL 350292 *1016 (D.N.J. April 23, 1992). These cases, decided, respectively, by magistrate judges in the Southern District of Florida and the District of New Jersey, each involved vessels of United States origin and LOFs signed by the vessels' owners and the salvage companies, all of whom were United States citizens; thus, as in this case, the parties' and contracts' only connection with foreign states were the LOFs which, not surprisingly, contained identical arbitration and English law provisions. See also Bethlehem Steel Corp. v. Songer Corp., 1992 WL 110735, *1, 1992 U.S. Dist. LEXIS 6890, *2 (S.D.N.Y.1992) (finding no federal jurisdiction over action seeking stay of arbitration; Convention "was not intended to confer jurisdiction on the federal courts over disputes between United States citizens solely because that dispute may have some relation to a contract one of the parties has with a foreign corporation" so one party's responsibility for constructing and installing French furnaces under supervision of French government held insufficient). As this court finds that these cases gave too little recognition to the content of the LOFs and the precise language of Section 202, it disagrees with their rationale and holds the Convention applicable.
As an initial matter, the language of Section 202's requirements is clearly disjunctive: to be subject to the Convention, a contract may envisage performance abroad or may envisage enforcement abroad or may have some other reasonable relationship with a foreign nation. In this case, not only does the LOF designate London as the arbitral forum and Lloyd's an expert in the field of salvage as the arbitrator,[11] but also it designates English law as the applicable law for settling this dispute. Clearly, these designations indicate that the parties contemplated enforcement of this award in Great Britain. Cf. Wilson v. Lignotok U.S.A., 709 F.Supp. 797, 799 (E.D.Mich.1989) ("Since the employment contract dictates that U.S. law shall govern the enforcement of any arbitration award and further dictates that performance of plaintiff's contractual duties shall be within the United States, the Court finds no reasonable relation between the commercial relationship existing between the litigants and Zurich, Switzerland, the proposed cite [sic] of arbitration.").
In support of the argument that the LOF envisages enforcement abroad, defendants as did the defendants in Brier and Reinholtzrely on Fuller Co. v. Compagnie Des Bauxites De Guinee, 421 F.Supp. 938 (W.D.Pa.1976). Fuller presented the question of whether the Convention applied to an agreement between two United States corporations for manufacture of equipment in the United States that would be shipped to and used at a plant in the Republic of Guinea. 421 F.Supp. at 939-42. Bearing in mind the text and legislative history of 9 U.S.C. § 202, the court found a sufficient relationship with Guinea to sustain jurisdiction based on affidavits which indicated that plaintiff's personnel would provide "extensive technical services" abroad. Id. at 942-43. In addition to concluding that the parties therefore contemplated performance abroad, the Fuller court also found a number of other foreign contacts that created a "reasonable relationship with one or more foreign states," including that the agreement provided for arbitration in Switzerland and thus envisaged enforcement overseas. Id. at 944.
Magistrate Judge Rosen found the case before him "easily distinguishable" from Fuller for the following reasons:
While it is true that both parties were considered United States citizens in Fuller, the court in Fuller found the "reasonable relationship" to exist under the performance exception not the enforcement exception. In Fuller, the contract envisaged that plaintiff would provide extensive technical services in Guinea. An affidavit submitted to the court stated that the total cost of Fuller's technical representatives in Guinea was $269,562.08. Consequently, the court held that the case fell *1017 within the exception due to the "substantial amount of performance of this contract in Guinea." Id. at 944. As stated above ... the contract in dispute was performed solely in New Jersey.
In contrast, plaintiff asserts that the enforcement of this agreement bears no reasonable relation to London, England. The fact that the parties are currently before this court to determine the enforceability of the arbitration agreement is of itself significant. Moreover, plaintiff asserts that the vessel upon which the contractor claimed a maritime lien was located in New Jersey and therefore the security posted to obtain the release of the vessel would have remained in this district subject to enforcement of a subsequent arbitration award. I agree. Accordingly, I find this district to be the proper place to enforce an arbitral award, not London, England. Additionally, unlike the facts in Fuller, where the contract provided for the design, manufacture and sale of equipment to be used at the buyer's plant in Guinea and for extensive technical services to be provided in Guinea, in the instant case, the only visible tie with the foreign nation is found in the language of the LOF Agreement itself.
Brier, slip op. at 12-13 (emphasis added). As the above-quoted language shows, however, the magistrate addressed neither the Fuller court's reference to the enforcement prong nor the statute's disjunctive language.
Magistrate Judge Rosen also refused to find the provisions within the contract itself designating the foreign forum and law as sufficient to create the necessary "reasonable relationship" with England, explaining as follows:
If I were to agree with defendants' analysis that the reasonable relationship with the foreign forum is created by the document itself, I would be allowing "the exception to swallow the rule." The only avenue which would bring this particular issue before the court is where a document has been signed by the parties, compelling foreign arbitration, and all the parties are United States citizens. Consequently, following defendants' reasoning, in every case the parties would fall within the fourth jurisdictional exception, since the document itself would always name a foreign nation for arbitration.
I do not believe this is what Congress intended when they enacted this enabling legislation, especially in light of the Convention itself and the motivation of the United States in acceding to the Convention. The purpose of the Convention is to facilitate commercial arbitration arising out of international trade transactions.
Brier, slip op. at 13-14; see also Reinholtz, slip op. at 12-13 ("[L]ike the arbitration clause, the choice of law provision was created by the parties themselves, does not represent an independent connection with England, and simply does not infuse the parties' relationship with transactional elements of sufficient moment to invoke this Court's jurisdiction under the Convention."). Once again, however, these cases fail to recognize that the LOF specifies the applicable law in addition to the arbitral situs. See Wilson, 709 F.Supp. at 799 (finding no federal jurisdiction to compel arbitration under Convention after closely examining content of agreement between two American citizens to determine whether there existed any connection to Switzerland other than its designation as the contractual site of arbitration).
This court also finds that Brier and Reinholtz accord too little weight to the content of the contract between the parties. As already mentioned, the purpose underlying the LOF is to allow a salvage operation to proceed on a "No Cure, No Pay" basis while designating a predictable forum and body of law to govern any fee dispute that might arise after the operation is complete. While it is true that the parties in this dispute are both American citizens, a United States vessel was involved, and Sea Tow appears to function only in United States waters, the LOF establishes a purposeful connection to England by designating the Committee of Lloyd's as arbitrator and by specifying that the British law of salvage governs the dispute. See Bergesen, 710 F.2d at 932 ("We adopt the view that `awards not considered as domestic' denotes awards which are subject to the Convention not because made abroad, but because made *1018 within the legal framework of another country, e.g., pronounced in accordance with foreign law...."). In fact, London arbitration is just as inconvenient to Sea Tow a domestic company as it is to the Joneses and their insurer; it therefore is reasonable to conclude that Sea Tow did not stand to benefit from the forum-selection clause other than by the assurance that its dispute would be resolved in a consistent and expedient manner. Moreover, irrespective of whether there exist arbitral bodies in this country with analogous expertise in making salvage awards, the Joneses have failed to show that the parties' interest in having such determinations made by Lloyd's was "unreasonable." See Roby, 996 F.2d at 1363; Avis Rent A Car, 791 F.2d at 26.
In sum, based on the language of 9 U.S.C. § 202 and cases interpreting forum-selection clauses, and construing the Convention broadly so as to effectuate its purpose in furthering arbitration agreements on an international scale, see Cargill, 991 F.2d at 1018, this court finds that the Convention applies to the contract in dispute.
CONCLUSION
Plaintiffs' motion for summary judgment is denied insofar as it requests a declaration that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not apply to the LOF in this action. As this court finds the dispute encompassed by an express and broadly worded arbitration provision in the agreement between the parties, it hereby stays this action but retains jurisdiction to enforce any award eventually rendered. See Filanto, S.P.A. v. Chilewich International Corp., 984 F.2d 58, 61 (2d Cir. 1993) (district court may retain jurisdiction over action subject to Convention) (citing Borden Inc. v. Meiji Milk Products Co., 919 F.2d 822, 826 (2d Cir.1990)). All other issues now before this court including plaintiffs' substantive summary judgment motion, defendant's motion to amend its answer, and plaintiffs' corresponding request for sanctions will proceed in England in accordance with the parties' agreement. All discovery material produced to date shall be binding in future proceedings.
SO ORDERED.
NOTES
[1] Jurisdiction rests on the admiralty jurisdiction statute, 28 U.S.C. § 1333, and the parties have invoked the maritime procedures specified in Rule 9(h).
[2] For example, Provision 1(c) of the LOF states:
The Contractor's remuneration shall be fixed by Arbitration in London in the manner hereinafter prescribed and any other difference arising out of this Agreement or the operations thereunder shall be referred to Arbitration in the same way.
[3] While deposition testimony indicates that plaintiffs were concerned about their boat and their safety on that evening, (CCJ Dep. at 50-51, 69-70, 107-08, 125-29, 135-36; CEJ Dep. at 30-31, 107, 110), some portions of the depositions also indicate a level of rationality inconsistent with voiding contracts. (CCJ Dep. at 118; CEJ Dep. at 28-29). For example, Mrs. Jones testified that she signed her husband's rather than her own name to protect them from liability if the contract turned out to be unfavorable to them.
[4] That Section provides in full as follows:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.
(Emphasis added).
[5] The difference between fraud in the inducement and fraud in the factum was explained by Farnsworth as follows:
A distinction is drawn between misrepresentation that goes only to the "inducement" and misrepresentation that goes to the "factum" or the "execution".... In rare cases ... the misrepresentation is regarded as going to the very character of the proposed contract itself, as when one party induces the other to sign a document by falsely stating that it has no legal effect. Such a misrepresentation is said to go to the "factum" or the "execution."
E. Farnsworth, Contracts § 4.10 (2d ed. 1990).
[6] A party resisting arbitration on the ground that no agreement to arbitrate exists must submit sufficient evidentiary facts in support of that claim in order to precipitate the trial contemplated by 9 U.S.C. § 4. Manning v. Energy Conversion Devices, Inc., 833 F.2d 1096, 1103 (2d Cir. 1987).
[7] While plaintiffs also claim that they understood the LOF to be a contract for towage and not a contract for salvage, (CCJ Dep. at 59-60; CEJ Dep. at 47-51), this belief does not change the conclusion that the issues posed by this complaint are arbitrable. Either type of contract could contain an arbitration clause, readily discoverable upon reading. Furthermore, as already mentioned, plaintiffs were aware that the agreement they signed elicited the help of Captain Raia and Sea Tow in taking care of their boat. Finally, this court finds that no reasonable trier of fact could conclude that Mrs. Jones failed to notice the handwritten paragraph that appeared immediately above and below where she signed her husband's name.
If this court were to reach the questions of duress, fraud, and mistake, it nevertheless would have no difficulty holding on the basis of the sworn deposition testimony that there are no questions of fact with respect to these issues: plaintiffs clearly knew what they were doing when they signed the contract, as is demonstrated by Mr. Jones's dominant concern for getting his boat home safely and Mrs. Jones's decision to sign her husband's name; Captain Raia did not threaten to abandon them on the beach but rather required a signature before he could salvage the boat. Finally, with respect to the question of whether this contract is one of adhesion, this court agrees with observations made by Magistrate Judge Rosen in Brier v. Northstar Marine, Inc., CV-91-597, 1992 WL 350292 (D.N.J. April 23, 1992), a case discussed further in text. Faced with similar facts, the magistrate found as follows:
Plaintiff additionally asserts that the LOF Agreement is a contract of adhesion which plaintiff was forced to sign under duress. I have combed the record and there is no evidence to support a finding that plaintiff was compelled to sign the agreement. While it may be true that plaintiff was anxious to have his vessel freed from the sandbar, this alone is insufficient to hold that the agreement was one of adhesion.
Slip op. at 8. Similarly, although the Joneses were eager to have the MISS JADE II towed, the Sea Tow representatives had secured the vessel prior to the LOF negotiations. The fact that plaintiffs' insurer Boat/U.S. may not appreciate that its assureds enter into such contracts does not make the LOF a contract of adhesion; the proper course for dealing with objections to this type of contract is to warn boat owners about the LOF, as Boat/U.S. has begun to do.
[8] Plaintiffs recently brought to this court's attention a second case, Reinholtz v. Retriever Marine Towing & Salvage, No. 92-14141 (S.D.Fla. May 21, 1993), discussed below, which adheres to the Brier rationale.
[9] While The Bremen held that a forum-selection clause "should control absent a strong showing that it should be set aside," 407 U.S. at 15, 92 S.Ct. at 1916, the Court also discussed three circumstances where such clauses should not be enforced. First, a court should refuse to enforce a forum selection clause if the party opposing enforcement proves that a foreign trial "will be so manifestly and gravely inconvenient" that it will "effectively deprive" him of a meaningful day in court. Id. at 19, 92 S.Ct. 1918. The Joneses have not satisfied this burden: the contract itself provides for appointment of a representative in London; and this court has no doubt that Boat/U.S., the party primarily responsible for covering Sea Tow's claim, is capable of appointing such a representative. Second, a party may resist a foreign forum selection clause by showing that the contract resulted from "fraud, undue influence, or overweening bargaining power." Id. at 12, 92 S.Ct. at 1914; see discussion supra; see also Carnival Cruise Lines, 499 U.S. at ___, 111 S.Ct. at 1527 (discussing forum clause in cruise ticket as "contract of adhesion"); Scherk, 417 U.S. at 519 n. 14, 94 S.Ct. at 2456 n. 14 (discussing standard for fraud). Third, if "enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision" a court may refuse to enforce the clause. Id. 407 U.S. at 15, 92 S.Ct. at 1916.
[10] While Bergesen offers some guidance, defendant's reliance on dicta in that opinion to demonstrate what the Second Circuit finds "qualifies under § 202 as a foreign arbitration award" is not persuasive. Bergesen involved a commercial shipping contract between a Norwegian shipowner and a Swiss company; the contract contained an arbitration clause designating New York as the arbitration site. When disputes arose between the parties, arbitration took place in New York in accordance with the contract. Plaintiff unsuccessfully attempted to enforce the arbitration award in Switzerland and thereafter sought confirmation in the Southern District of New York. The question presented to the Second Circuit was whether the Convention applied to a commercial arbitration award that was rendered in the United States since the Convention by its terms does not apply to "domestic" arbitral awards.
The Bergesen court first examined what constituted a foreign arbitration award under the Convention and, in that context, wrote the language upon which defendants rely:
The Convention did not define nondomestic awards. The definition appears to have been left out deliberately in order to cover as wide a variety of eligible awards as possible, while permitting the enforcing authority to supply its own definition of "nondomestic" in conformity with its own national law.... We adopt the view that "awards not considered as domestic" denotes awards which are subject to the Convention not because made abroad, but because made within the legal framework of another country, e.g., pronounced in accordance with foreign law or involving parties domiciled or having their principal place of business outside the enforcing jurisdiction.
Id. at 932. However, in the subsequent sentence, the court went on to state:
We prefer this broader construction because it is more in line with the intended purpose of the treaty, which was entered into to encourage the recognition and enforcement of international arbitration awards, see Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15, 94 S.Ct. 2449, 2547 n. 15, 41 L.Ed.2d 270 (1974). Applying that purpose to this case involving two foreign entities leads to the conclusion that this award is not domestic.
Id. at 932. Finding that the Convention applied to this award, the Bergesen court proceeded to determine whether Section 202 of the implementing legislation the statutory section at issue in this case also applied to contracts between two foreign citizens arbitrated in New York; in so doing, the Second Circuit cited the legislative history of the Convention and explained that "Congress spelled out its definition of [nondomestic] in section 202. Had Congress desired to exclude arbitral awards involving two foreign parties rendered within the United States from enforcement by our courts it could readily have done so. It did not." Id. at 933. As this language indicates, Bergesen merely confirms that Section 202 governs arbitration agreements that have some relationship with a foreign state. See also In re Dworkin-Cosell Interair Courier Services, Inc., 728 F.Supp. 156, 158-59 (S.D.N.Y. 1989).
[11] The Brier court took judicial notice of the Committee of Lloyd's long and admirable history and tradition of being particularly suited to arbitrate the type of matters. For reasons provided in that opinion, this court likewise recognizes the expertise of that forum. See also The Bremen, 407 U.S. at 12, 92 S.Ct. at 1914 ("Plainly, the courts of England meet the standards of neutrality and long experience in admiralty litigation.").
|
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 00-3990
___________
Lawrence J. Mathieu, *
*
Plaintiff-Appellee, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota.
Gopher News Company, *
*
Defendant-Appellant. *
___________
Submitted: October 15, 2001
Filed: December 11, 2001
___________
Before WOLLMAN, Chief Judge, LAY and RILEY, Circuit Judges.
___________
LAY, Circuit Judge.
A jury found that Gopher News Company discriminated against Lawrence J.
Mathieu on the basis of disability. It awarded back pay and damages for emotional
harm and recommended front pay. The magistrate judge1 sitting by consent of the
parties entered judgment on the verdict and awarded the front pay recommended by
the jury. The magistrate judge multiplied the entire award by 1.5 pursuant to
Minnesota Human Rights Act (MHRA) § 363.071 subd. 2 and awarded Mathieu
1
The Honorable Franklin L. Noel, Chief United States Magistrate Judge,
District of Minnesota, presiding.
attorney’s fees. Gopher News asserts various errors of law. We affirm in part and
reverse in part.
Mathieu worked for Gopher News for thirty-four years, the last sixteen as
Manager of Customer Delivery Services. This job not only involved managerial and
administrative tasks, but also required Mathieu to be available to fill in for absent
route drivers. The latter duties could involve ten to twelve hour days on the road and
require lifting twenty to sixty pound “totes” out of a truck.
In January 1996, at the age of fifty-three, Mathieu was diagnosed with arterial
blockage. He underwent quintuple bypass surgery. In March of 1996, Mathieu
returned to work for Gopher News with six-hour shifts, three days per week. A few
weeks later, he returned full-time, subject to a forty pound lifting restriction. Gopher
News made reasonable accommodations for Mathieu’s limitations. Shortly after
returning full-time Mathieu’s doctors lifted all restrictions, and by the end of the year
he was again working fifty to seventy hour weeks.
During late December 1996, Mathieu again experienced chest pains. His
doctors explained that the pain was musculo-skeletal in origin; the lifting required by
his job was impeding healing of the surgical incision through his sternum. His
doctors reimposed restrictions, limiting Mathieu to a forty hour week and a forty
pound lifting maximum. Mathieu informed his employer. Four days later he was
terminated as Manager of Customer Delivery Services. Gopher News asserted at trial
that his position was eliminated. Mathieu alleged he was terminated due to age and
disability discrimination.
After a trial, the jury rejected the age discrimination claim but found for
Mathieu on the disability discrimination claim. It awarded back pay of $94,370;
recommended front pay of $288,466; and awarded damages for mental anguish in the
amount of $165,000. The magistrate judge denied all post-trial motions by Gopher
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News and added interest for back pay, reduced the front pay award to present value,
and multiplied the entire award by 1.5 pursuant to the MHRA. The court awarded
Mathieu attorney’s fees.
Gopher News asserts various issues on appeal. It argues Mathieu’s restrictions,
a forty hour week and a forty pound lifting limit, do not constitute a disability under
the Act. It asserts there was insufficient evidence for the jury to find Gopher News
regarded Mathieu as disabled. It asserts the magistrate judge erred by awarding front
pay rather than reinstatement and argues that all awards were excessive. It argues the
magistrate judge erroneously held that Mathieu reasonably mitigated his damages.
Gopher News argues the magistrate judge erred in its application of the MHRA
multiplier. Finally, Gopher News asserts the magistrate judge erred by not granting
a new trial.
I. Disability
Initially, Gopher News asserts that, as a matter of law, a forty hour week and
a forty pound lifting restriction do not substantially limit one’s ability to work and,
therefore, do not constitute a disability. 42 U.S.C. § 12102(2)(A). It also asserts
there is no evidence it ever regarded Mathieu as disabled. 42 U.S.C. § 12102(2)(C).
It urges that the magistrate judge erred as a matter of law in finding Mathieu disabled.
Mathieu engages these arguments on the merits but also asserts this court should not
consider the merits because Gopher News failed to preserve the questions by failing
to renew its motion under Federal Rules of Civil Procedure 50(b) at the close of the
evidence at trial. We agree with this latter contention.
Gopher News moved for a judgment as a matter of law at the close of
Mathieu’s case in chief. The motion came at the end of the second day of trial, so the
trial court reserved ruling until the parties could present arguments the following day.
The court heard arguments the next morning and denied Gopher News’ motion. The
-3-
trial thereafter continued; Gopher News presented its defense and Mathieu took the
stand in rebuttal. This testimony lasted between five and six hours. The plaintiff
rested his rebuttal at the end of the day. Gopher News did not renew its motion for
judgment as a matter of law at the close of all the evidence, and the court submitted
the case to the jury.
Gopher News asserts various grounds on which its failure to renew its motion
at the close of the evidence should be excused. It asserts Rule 50(b) does not apply
because the issues it presents involve purely questions of law, not implicating the
sufficiency of the evidence. Alternatively, it asserts an exception to the rule applies;
it asks the court to adopt an exception to the rule “where its purposes have been met.”
First, it is clear that Rule 50 applies. Judgment as a matter of law is appropriate
where “a party has been fully heard on an issue and there is no legally sufficient
evidentiary basis for a reasonable jury to find for that party on that issue . . . .” Fed.
R. Civ. P. 50(a). In Americans with Disabilities Act (ADA) cases, the question
presented is whether the particular individual, under the evidence presented, suffers
a substantial limitation on a major life activity and, thus, a disability. This court is
instructed to view the evidence for purposes of this individual inquiry. See, e.g.
Sutton v. United Airlines, Inc., 527 U.S. 471, 483 (1999) (“[D]isabilities [should] be
evaluated ‘with respect to an individual’ and be determined based on whether an
impairment substantially limits the ‘major life activities of such individual.’ Thus,
whether a person has a disability under the ADA is an individualized inquiry.”)
(internal citations omitted); Webner v. Titan Distribution, Inc., 267 F.3d 828, 834 (8th
Cir. 2001) (restriction of lifting up to fifty pounds “substantially limited [employee’s]
ability to work, to twist, to bend, and to stand, in addition to limiting his ability to
lift”); Kellogg v. Union Pacific R. Co., 233 F.3d 1083, 1087 (8th Cir. 2000) (“Given
the numerous factors a court must weigh, the determination of whether an individual
is substantially limited in the major life activity of working is made on a case by case
basis.”); Fjellestad v. Pizza Hut of America, Inc., 188 F.3d 944, 949 (8th Cir. 1999)
-4-
(“[T]he ADA is concerned with preventing substantial personal hardship in the form
of significant reduction in a person’s real work opportunities. A court must ask
‘whether the particular impairment constitutes for the particular person a significant
barrier to employment’ . . . .”) (citing Webb v. Garelick Mfg. Co., 94 F.3d 484, 488
(8th Cir. 1996)).
This case is no different. Gopher News asks this court to rule that a forty hour
week and a forty pound lifting restriction do not constitute a disability as a matter of
law. However, as stated, every case requires an individualized inquiry into the impact
of the plaintiff’s restrictions. Likewise, whether Mathieu is disabled required inquiry
into the sufficiency of the evidence presented at trial. The trial court considered the
evidence presented in drawing its conclusions on the disability issue. See Order
(Nov. 1, 2000) at 13-18. Consequently, we hold Rule 50 applies.
Rule 50(b) states:
If, for any reason, the court does not grant a motion for judgment as a
matter of law made at the close of all the evidence, the court is
considered to have submitted the action to the jury subject to the court’s
later deciding the legal questions raised by the motion. The movant may
renew its request for judgment as a matter of law by filing a motion no
later than 10 days after entry of judgment–and may alternatively request
a new trial or join a motion for a new trial under Rule 59. . . .
It is well established that judgment as a matter of law following a jury verdict
cannot be had by a party who fails to renew its motion, pursuant to Rule 50(b), at the
close of all the evidence. Interpretation of Rule 50(b) is set out by the Advisory
Committee. See Fed. R. Civ. P. 50(b) advisory committee’s note (1963 Amendment)
(“A motion for judgment notwithstanding the verdict will not lie unless it was
preceded by a motion for a directed verdict made at the close of all the evidence.”);
Fed. R. Civ. P. 50(b) advisory committee’s note (1991 Amendment) (“This provision
-5-
retains the concept of the former rule that the post-verdict motion is a renewal of an
earlier motion made at the close of the evidence.”). This interpretation is cited by
recognized authorities on federal practice and procedure. See 9 James Wm. Moore,
et al. Moore’s Federal Practice §§ 50.20[3], 50.40[1], 50.91[1] (3d ed. 2001). It is
unanimously approved by the courts, including this circuit. See, e.g. Jackson v. City
of St. Louis, 220 F.3d 894, 896 (8th Cir. 2000); Duckworth v. Ford, 83 F.3d 999,
1001 (8th Cir. 1996); Pulla v. Amoco Oil Co., 72 F.3d 648, 655 (8th Cir. 1995).
The rule also is supported by sound policy. The Seventh Amendment preserves
the right to a jury trial for civil litigants. U.S. Const. Amend. VII (“In Suits at
common law, where the value in controversy shall exceed twenty dollars, the right of
trial by jury shall be preserved, and no fact tried by a jury shall be otherwise re-
examined in any Court of the United States, than according to the rules of the
common law.”). One purpose of the rule requiring renewal of a motion for judgment
as a matter of law is to avoid any question arising under that amendment. Fed. R.
Civ. P. 50(b) advisory committee’s note (1991 Amendment) (citing Montgomery
Ward & Co. v. Duncan, 311 U.S. 243 (1940)). Specifically, “[t]he twin purposes of
the rule are to: (1) enable the trial court to examine all of the evidence before
submitting the question to the jury; and (2) alert the opposing party to any defect in
its case, thereby affording it an opportunity to cure any such defects.” Pulla, 72 F.3d
at 655 n.8 (citing Halsell v. Kimberly-Clark Corp., 683 F.2d 285, 294 (8th Cir. 1982),
cert. denied, 459 U.S. 1205 (1983); 5 Moore § 50.08 at 50-88).
Notwithstanding the venerable rule, Gopher News urges this court to make an
exception for its failure to renew its motion. It cites several sources for such an
exception, none of which we find persuasive.
First, Gopher News urges as an exception that “technical noncompliance with
Rule 50(b) may be excused [where] the purposes of the rule are satisfied.” Scottish
Heritable Trust, PLC v. Peat Marwick Main & Co., 81 F.3d 606, 610 (5th Cir. 1995).
-6-
This circuit has never recognized this exception. Moreover, even were we to adopt
it, Gopher News has not satisfied the exception’s requirements. For example, Gopher
News’ president testified after the defendant had moved for judgment as a matter of
law following plaintiff’s case. As the employer’s primary decision maker, his
testimony clearly weighed on the ultimate decision as to whether Gopher News
regarded Mathieu as disabled. Indeed, he expressly testified that he did not perceive
Mathieu as disabled, although he was aware of Mathieu’s restrictions. Mathieu
testified on rebuttal. Consequently, the trial court had no opportunity to examine all
of the evidence before submitting the question to the jury.
Similarly, Gopher News asserts an exception where
(1) the party files a Rule 50 motion at the close of the plaintiff’s case;
(2) the district court defers ruling on the motion; (3) no evidence related
to the claim is presented after the motion; and (4) very little time passes
between the original assertion and the close of defendant’s case.
Pulla, 72 F.3d at 656 (discussing the exception in dicta).2 This circuit has never
adopted this “broad exception” to Rule 50(b). We do not believe it would be proper
to adopt it here. The language and traditional application of Rule 50 are clear;
objections must be filed at the close of the evidence to preserve any post-trial
challenges to the verdict. This is the clearly established rule in this circuit. See BE
& K Constr. Co. v. United Bhd. of Carpenters & Joiners of Am., 90 F.3d 1318, 1325
2
In Pulla, a panel of this court recognized that we have previously assumed,
without deciding, that we would adopt this exception. See Myers v. Norfolk
Livestock Market, Inc., 696 F.2d 555, 558 (8th Cir. 1982). However, the Pulla court
also recognized authority which refused to adopt this “flexible approach.” See Pulla,
72 F.3d at 655 n.11 (citing DeMarines v. KLM Royal Dutch Airlines, 580 F.2d 1193,
1194 n.4 (3d Cir. 1978). We suggest the latter approach is the correct one; Rule 50’s
clear command should be strictly construed. Cf. Leatherman v. Tarrant County
Narcotics & Coordination Unit, 507 U.S. 163 (1993) (federal courts have no
discretion to ignore civil rules).
-7-
(8th Cir. 1996) (“If a party does not move for judgment as a matter of law at the close
of all the evidence, it normally cannot later argue that there was insufficient evidence
to support the verdict.”). Strict adherence to the rule comports with its underlying
policy of preventing questions concerning compliance with the Seventh Amendment.
See Fed. R. Civ. P. 50(b) advisory committee’s note (1991 Amendment) (citing
Montgomery Ward, 311 U.S. 243.
However, even if we were to adopt such an exception to Rule 50(b), Gopher
News would not satisfy its requirements. Gopher News moved for judgment as a
matter of law following the close of Mathieu’s case, satisfying the first requirement.
However, the court did not defer its ruling or otherwise suggest that Gopher News
need not renew the motion at the close of the evidence; it ruled immediately
following the parties’ arguments on the third day of trial. Moreover, evidence
concerning the issues of disability or perceived disability was presented after Gopher
News’ motion. As noted above, both Gopher News’ president and Mathieu testified
on the final day. Finally, more than “a very little time” passed between the court’s
ruling on the motion and the close of the evidence. Over five hours of testimony were
heard and at least four witnesses testified during that time. We hold that Gopher
News would fail to satisfy the requirements for the broad exception to Rule 50(b) it
suggests.
On the basis of the credible evidence presented, the jury found that Mathieu
was disabled, or at least Gopher News perceived him as disabled. We cannot find the
magistrate judge committed plain error by enforcing this verdict and affirm his
judgment refusing to grant Gopher News judgment as a matter of law.
-8-
II. Remedies
A. Reinstatement versus Front Pay
Gopher News asserts the magistrate judge erred by awarding Mathieu front pay
rather than reinstatement. Front pay is an exceptional remedy and should only be
awarded in lieu of reinstatement when extraordinary circumstances render
reinstatement “impractical or impossible.” Newhouse v. McCormick & Co., Inc., 110
F.3d 635, 641 (8th Cir. 1997) (citing Philipp v. ANR Freight Sys., Inc., 61 F.3d 669,
674 (8th Cir. 1995)). However, the cases are legion that “substantial hostility, above
that normally incident to litigation, is a sound basis for denying reinstatement.”
United Paperworkers Int’l Union Local 274 v. Champion Int’l Corp., 81 F.3d 798,
805 (8th Cir. 1996); see also Denesha v. Farmers Ins. Exchange, 161 F.3d 491, 501
(8th Cir. 1998) (holding that hostility justifying front pay should be such that “a
productive and amicable working relationship would be impossible”) (citing Brooks
v. Woodline Motor Freight, Inc., 852 F.2d 1061, 1065 (8th Cir. 1988)).
“In making a front pay award, the district court is not free to reject or contradict
findings by the jury on issues that were properly submitted to the jury,” although it
“‘retains its discretion to consider all the circumstances in th[e] case when it
determines what equitable relief may be appropriate.’” Newhouse, 110 F.3d at 641
(citing Gibson v. Mohawk Rubber Co., 695 F.2d 1093, 1101 (8th Cir. 1982)). A
judgment of the district court awarding front pay is reviewed for abuse of discretion.
See id.
Following trial, the jury found that Mathieu was disabled or had been perceived
as disabled by Gopher News.3 Because Gopher News did not preserve its motion for
3
On appeal, there is some confusion as to precisely what the jury found. The
relevant jury question, as presented by the court, read, “did the plaintiff have, or was
-9-
judgment as a matter of law, the court was bound by that finding. Turning to the
question of the appropriate equitable relief, the court found evidence of hostility
between Mathieu and Gopher News likely to preclude an amiable employment
relationship. The court noted Mathieu had been unfairly terminated after thirty-four
years of service. It found that Gopher News failed to offer reasonable
accommodations at the time of his discharge, and if Mathieu was reinstated,
additional disputes about reasonable accommodations for his ongoing limitations
would be inevitable. Perhaps most importantly, Gopher News’ president was the
person responsible for the discriminatory decisions and would be the person
ultimately responsible for overseeing any reinstatement of Mathieu. This court has
held a similar relationship to be sufficient evidence of hostility to preclude a finding
of abuse of discretion by the district court in awarding front pay. See Newhouse, 110
F.3d at 641. We hold that the magistrate judge did not abuse his discretion by
awarding front pay over reinstatement.
B. Amount of the Front Pay Award
Gopher News asserts the amount of front pay awarded by the magistrate judge
was clearly excessive. Following its deliberations, the jury recommended a front pay
award of $288,466. The magistrate judge recognized that the award was advisory in
nature, but awarded the full amount, discounting it to present value. Gopher News
believes this award should be reversed. The lower court’s award of front pay is
he perceived by defendant to have, a disability.” Trial Transcript at 750. Thus, the
general verdict makes it uncertain whether the jury found that Mathieu was actually
disabled under 42 U.S.C. § 12102(2)(A) or only perceived as disabled under 42
U.S.C. § 12102(2)(C) or both as long as there was substantial evidence to support
either finding. Fortunately, this uncertainty has no effect on our decision. An
affirmative answer to either one satisfies the disability requirement for liability. See
42 U.S.C. § 12102(2).
-10-
reviewed for abuse of discretion. Hukkanen v. Int’l Union of Operating Eng’rs Local
No. 101, 3 F.3d 281, 286 (8th Cir. 1993).
Gopher News asserts the amount of front pay awarded by the magistrate judge
represents eight years of front pay. Fifty-seven years old at the time the trial
concluded, an award of eight years front pay constitutes the remainder of Mathieu’s
working career, assuming retirement at age sixty-five. Gopher News argues the
magistrate judge failed to make specific factual findings why the amount awarded
was required to make Mathieu whole and, in any event, awarding front pay for the
remainder of Mathieu’s working life is inherently speculative. Because there is no
evidence that Mathieu, an employee at will, would have worked for Gopher News
until age sixty-five or that he will be unable to find comparable work within the next
eight years, Gopher News asserts that the magistrate judge abused his discretion by
awarding front pay for the entire period.
In United Paperworkers, 81 F.3d 798, the lower court awarded front pay for the
remainder of the plaintiff’s working life. That award amounted to front pay for
twenty-four years. We stated: “An award of front pay until retirement ignores the
plaintiff’s duty to mitigate damages and the district court’s corresponding obligation
to estimate the financial impact of future mitigation.” Id. at 805. We also noted that
plaintiff’s young age made mitigation sufficiently likely that the award of front pay
was an abuse of discretion. Id.
In Newhouse, the lower court also awarded front pay for the remainder of the
plaintiff’s working life. That plaintiff had been employed by the defendant for
twenty-three years. This court affirmed the award. See Newhouse, 110 F.3d at 641-
42 (“If a plaintiff is close to retirement, front pay may be the only practical
approach.”) (citing Duke v. Uniroyal, Inc., 928 F.2d 1413, 1424 (4th Cir.), cert.
denied, 502 U.S. 693 (1991)).
-11-
Likewise, Mathieu was near retirement by the close of the trial and, obviously,
is even closer now. At trial, Mathieu testified he had planned to work for Gopher
News until age sixty-five. He provided expert testimony that given his minimal
education, age, employment with one company for thirty-five years,* and disability
it was unlikely he would ever achieve the level of income and benefits he enjoyed in
his prior position There also was evidence that Mathieu’s attempts to mitigate his
damages had failed. There was evidence supporting the amount of front pay awarded
as the amount necessary to compensate Mathieu for his lost earnings. For this court
to speculate otherwise and simply lower the number of years of front pay would not
be based on any evidence. Under the circumstances, we hold the magistrate judge did
not abuse his discretion by relying upon this evidence and awarding front pay in the
amount recommended by the jury.
C. The Minnesota Human Rights Act Multiplier
Following calculation of the awards, the magistrate judge multiplied the entire
award by 1.5 to reach the total amount awarded to Mathieu. The magistrate judge
justified this action, stating it would serve to entice members of the bar to privately
enforce the MHRA. Gopher News asserts the magistrate judge’s application of the
MHRA multiplier was error because he did not consider whether application of the
multiplier was necessary to fully compensate Mathieu, and in any event, the size of
Mathieu’s award was sufficient to entice members of the bar to enforce the MHRA
without multiplication. Gopher News also asserts the multiplier should not be applied
to awards for front pay or emotional harm. Application of the MHRA multiplier is
vested in the trial courts’ discretion. See Phelps v. Commonwealth Land Title Ins.
Co., 537 N.W.2d 271, 274, 276 (Minn. 1995).
*
The record contains an agreement of both parties that Mathieu had worked
thirty-four years; the expert mistakenly stated that he had worked thirty-five years.
-12-
The argument that application of the multiplier must be tied to compensatory
purposes has been rejected by the Minnesota courts. In Phelps, the Minnesota
Supreme Court held that “[s]ubdivision 2 contains no guidelines as to when or under
what circumstances a trial court may multiply damages.” 537 N.W.2d at 274. The
court refused to manufacture its own guidelines, rather stating that “subdivision 2
unambiguously vests trial courts with the discretion to multiply damages.” Id. It
went on to hold that, “[Defendant’s] contention that a trial court must tie the
multiplication of damages to a finding of uncompensated damages is erroneous, and
to the extent that [prior Minnesota cases] support this contention, they too are
erroneous.” Id. at 275.
Likewise, the court’s determination to encourage private enforcement of the
MHRA is a valid justification for application of the multiplier. Not only is the court’s
discretion broad, but the Minnesota Supreme Court also noted in Phelps that
“[l]egislative history indicates that one objective the legislature sought to achieve
through enactment of subdivision 2 was the enticement of the private bar into
bringing claims based on violations of the MHRA.” 537 N.W.2d at 277 (citing
Hearing on S.F. 1762, S. Judiciary Comm. 73rd Minn. Leg., March 28, 1984
(comments of Sen. Reichgott)). That being the case, Gopher News’ argument that the
base award itself provided incentive for private enforcement fails for lack of common
sense. If encouraging private enforcement of the MHRA is a legitimate goal, a larger
award will provide greater incentive toward that end.
Gopher News’ arguments that the magistrate judge erred by multiplying the
jury’s awards for front pay and emotional harm have some partial merit. The MHRA
§ 363.071 subd. 2 states in pertinent part:
[If the court] finds that the respondent has engaged in an unfair
discriminatory practice the [court] shall order the respondent to pay
an aggrieved party, who has suffered discrimination, compensatory
-13-
damages in an amount up to three times the actual damages
sustained. In all cases, the [court] may also order the respondent
to pay an aggrieved party, who has suffered discrimination,
damages for mental anguish or suffering and reasonable attorney’s
fees, in addition to punitive damages in an amount not more than
$8,500.
The magistrate judge’s application of the multiplier to the emotional harm
award is a close question. As noted above, the multiplier is to be applied to actual
damage awards in order to determine total compensatory damages. See MHRA
§ 363.071 subd. 2. At first blush, the plain language of subdivision 2 appears to limit
the definition of actual damages for the purpose of that statute. The first sentence
states that actual damages may be multiplied. The second sentence states that the
district court may also award damages for mental anguish or suffering. One could
read this subdivision, paying particular attention to the order of the sentences and the
fact that damages for mental anguish are specifically set apart, to mean that damages
for emotional harm are to be calculated apart from those damages subject to
multiplication, whatever they may be. Indeed, such an interpretation of the statute
has been followed frequently, if implicitly, by the Minnesota courts. See, e.g. Todd
v. Ortho Biotech, Inc., 949 F. Supp. 724, 730 (D. Minn. 1996), rev’d on other grounds
138 F.3d 733 (8th Cir. 1998); Kriss v. Sprint Communications Co., 851 F. Supp.
1350, 1360-61 (D. Minn. 1994), rev’d on other grounds 58 F.3d 1276 (8th Cir. 1995);
Phelps, 537 N.W.2d at 273, 273 (noting trial court action); Bradley v. Hubbard
Broadcasting, Inc., 471 N.W.2d 670, 674 (Minn. Ct. App. 1991) (same); Melsha v.
Wickes Cos., Inc., 459 N.W.2d 707, 708-09 (Minn. Ct. App. 1990) (same). But see
Kohn v. City of Minneapolis Fire Dept., 583 N.W.2d 7, 10 (Minn. Ct. App. 1998)
(noting that the district court multiplied award for emotional harm).
However, as a general rule, actual damages include awards for emotional harm.
See Phelps, 537 N.W.2d at 275 & n.2 (noting that it is well settled that “actual
damages” are synonymous with “compensatory damages,” and compensatory
-14-
damages include both general and special damages) (citing Black’s Law Dictionary
390 (6th ed.)); Minneapolis Police Dept. v. Minneapolis Comm’n on Civil Rights,
402 N.W.2d 125, 132 (Minn. Ct. App. 1987), aff’d 425 N.W.2d 235, 238 (Minn.
1988) (“An actual compensable injury means physical injury, monetary expenses, lost
earnings, impairment of reputation, personal humiliation, or mental anguish.”).
Moreover, although apparently no Minnesota court has expressly addressed this issue
in a published opinion, the Minnesota Court of Appeals has done so in an
unpublished opinion. It held that damages for emotional distress were actual
damages subject to multiplication. Huffman v. Pepsi-Cola Bottling Co. of
Minneapolis & St. Paul, No. C7-94-2404, 1995 WL 434467 at *5 (July 25, 1995)
(unpublished opinion) (“Damages for emotional distress, however, are included as
part of actual damages. As such, those damages are subject to being [multiplied].”).
That opinion lacks precedential value, but it makes clear that the multiplier provision
is subject to multiple interpretations. We do not sit as final arbiters of questions of
state law. Consequently, we cannot say the magistrate judge abused his discretion by
adopting one plausible interpretation of the multiplier provision.
We do not arrive at the same conclusion when considering the use of the one
and one-half multiplier authorized by MHRA on the issue of front pay. Although,
traditionally, we have left questions of front pay to the discretion of the district court
and have seldom intervened in the award of front pay or in the amount of front pay,
there is no precedent or even dicta by any Minnesota court stating that the multiplier
should be used to increase awards of front pay. On the contrary, we find numerous
reasons why the MHRA’s authorization to multiply actual damages provides no basis
on which to multiply an award of front pay.
The MHRA authorizes multiplication of actual damages sustained. See MHRA
§ 363.071 subd. 2. Front pay is an equitable remedy, not legal damages. See
Newhouse, 110 F.3d at 641. Although the magistrate judge utilized an advisory jury
in deciding whether front pay or reinstatement should be awarded, it was the judge
-15-
who rejected reinstatement and ordered front pay from the time of Mathieu’s
termination to the date that he would turn sixty-five. Moreover, as we have noted in
several cases, front pay is the alternative to the preferred equitable remedy of
reinstatement. See, e.g. Kramer v. Logan County Sch. Dist. No. R-1, 157 F.3d 620,
626 (describing front pay as “not so much a monetary award for the salary that the
employee would have received but for the discrimination, but rather the monetary
equivalent of reinstatement, to be given in situations where reinstatement is
impracticable or impossible”). It should be obvious that the multiplier under the
Minnesota statutes would not be awarded on top of reinstatement; there is no
monetary award to be multiplied when reinstatement is determined proper. This
counsels against multiplying its equitable alternative.
An award of front pay also is inherently speculative in length of time and when
considering possible mitigation by reason of other employment. It is based on
probabilities rather than actualities. This easily distinguishes it from damages which
have been actually incurred. Indeed, the mere fact that a front pay damage award is
discretionary makes it distinguishable from the award of back pay, which can be
readily determined within a degree of reasonable certainty. See Albemarle Paper Co.
v. Moody, 422 U.S. 405, 416 (1975) (noting that courts’ discretion to award back pay
is severely limited by a congressionally imposed presumption in favor of back pay
awards in Title VII cases).
Although the decision to award front pay lies within the discretion of the
district court in order to make the plaintiff whole, our only real guidance as to what
the Minnesota courts might do under similar circumstances comes from the treatment
of front pay in the federal courts. As noted above, this circuit treats front pay as an
equitable remedy, not damages. In a related context, the Supreme Court has clearly
stated that front pay is not included in the measure of compensatory damages under
Title VII. See Pollard v. E.I. du Pont de Nemours & Co., 532 U.S. 843 (2001)
(“[W]hen § 1981a is read as a whole, the better interpretation is that front pay is not
-16-
within the meaning of compensatory damages . . . .”).4 Under these circumstances,
we find little justification for a judge to multiply this discretionary award under
Minnesota law without precedent or at least better guidance as to the nature of front
pay.
On this basis we remand the award of front pay and request the magistrate
judge to amend his judgment by eliminating the multiplier as to that element of the
judgment.
D. Remittitur of the Award for Emotional Harm
Gopher News argues the award of $165,000 for emotional distress is excessive
and lacks evidentiary support. Consequently, it argues the magistrate judge erred by
not remitting the award. We reject this argument.
The court reviews a denial of a remittitur for “a manifest abuse of discretion.”
Norton v. Caremark, Inc., 20 F.3d 330, 340 (8th Cir. 1994). The test for setting aside
a verdict as excessive is whether the amount of the damages “shocks the conscience.”
Verhel v. Indep. Sch. Dist. No. 709, 359 N.W.2d 579, 591 (Minn. 1984). On appeal,
the appellate court must “recogniz[e] that the trial court has heard the evidence and
knows the community’s standards.” Norton, 20 F.3d at 340 (citing Am. Bus.
Interiors, Inc. v. Haworth, Inc. 798 F.2d 1135, 1146 (8th Cir. 1986)).
Gopher News asserts the only evidence supporting an award for emotional
distress was Mathieu’s self-serving testimony. It notes there was no evidence from
any medical professional to the effect that Mathieu suffered mental anguish or that
he required treatment for such a condition. It urges this is insufficient evidence to
4
As noted, § 363.071 subd. 2 considers the multiplier to be used as a means to
award “compensatory damages.” See supra p.13.
-17-
support the jury’s award or, alternatively, that the award is excessive based on
Mathieu’s vague and ill-defined assertions.
Gopher News’ assertion that Mathieu was obliged to offer expert testimony to
justify an award for emotional distress misses the mark. In Kim v. Nash Finch Co.,
123 F.3d 1046 (8th Cir. 1997), we held that “[a] plaintiff’s own testimony, along with
the circumstances of a particular case, can suffice to sustain the plaintiff’s burden.”
Id. at 1065 (citing Turic v. Holland Hospitality, Inc., 85 F.3d 1211, 1215 (6th Cir.
1996)). As the magistrate judge recognized, the import of this holding is that the
testimony of a medical expert is not a prerequisite for recovery for emotional harm.
At trial, Mathieu’s testimony in this regard apparently was effective. The magistrate
judge noted that Mathieu lost his job of thirty four years, was forced to reduce his
standard of living, and had become depressed. The magistrate judge noted that those
facts, presented through Mathieu’s testimony, were “more than sufficient to support
the jury’s emotional distress award.” Order (Nov. 14, 2000) at 23. He further held
“the award was not simply for emotional distress, but was made for a combination of
factors including emotional pain, suffering, inconvenience, mental anguish, and loss
of enjoyment of life.” Id.
In short, we cannot say our consciences are shocked by this award. Certainly,
another jury may have come out with a lower figure, but yet another may have
awarded a higher amount. We cannot say that the magistrate judge committed a
manifest abuse of discretion by enforcing the damages this jury awarded. We affirm.
E. Remittitur of the Back Pay Award
Gopher News argues the jury’s award of back pay is excessive because
Mathieu refused to reasonably mitigate his damages. Consequently, it argues the
magistrate judge erred by not remitting the award. The court reviews a denial of a
remittitur for a manifest abuse of discretion. Norton, 20 F.3d at 340.
-18-
Gopher News asserts that, following elimination of Mathieu’s position, it
offered him three other positions and also asked him to name positions within the
company he thought he could handle. It argues these positions were “substantially
equivalent” to his former position, and the only reason Mathieu turned them down is
they were less highly compensated. Because lower pay alone is an insufficient reason
to turn down a substantially equivalent position, Gopher News argues Mathieu failed
to use reasonable diligence to mitigate his damages by turning them down.
A party harmed by a discriminatory employment decision is subject to an
affirmative duty to mitigate his damages by reasonably seeking and accepting other
suitable employment. Anderson v. Hunter, Keith, Marshall & Co., Inc., 417 N.W.2d
619, 627 (Minn. 1988). Finding suitable employment does not require a party to “go
into another line of work, accept a demotion, or take a demeaning position . . . .”
Ford Motor Co. v. EEOC, 458 U.S. 219, 231 (1982). A plaintiff’s duty is one of
reasonable diligence to seek out or not refuse a job that is substantially equivalent to
the one at issue. Parrish v. Immanuel Med. Ctr., 92 F.3d 727, 735 (8th Cir. 1996).
A plaintiff’s efforts to mitigate need not be successful but must represent an honest
effort to find substantially equivalent work. Brooks v. Woodline Motor Freight, Inc.,
852 F.2d 1061, 1065 (8th Cir. 1988).
The first question raised by Gopher News’ argument is whether the positions
it allegedly offered represent substantially equivalent work Mathieu was required to
accept. We believe the magistrate judge did not abuse his discretion by finding the
answer to be no. The magistrate judge found that none of the positions offered by
Gopher News offered a comparable salary and none offered Mathieu health benefits.
According to the magistrate judge, “[a]ccepting a job paying significantly less and not
offering the same benefits is tantamount to a demotion and is demeaning to the person
seeking job loss.” Order (Nov. 14, 2000) at 26. While this may overstate the case
somewhat, it is clear that the positions offered by Gopher News were lower within the
company’s hierarchy than his former position as Manager of Customer Delivery
-19-
Services. We believe any such position reasonably could be considered a demotion.
Moreover, as we noted above, the magistrate judge found that any return by Mathieu
to Gopher News would be marked by hostility sufficient to preclude reinstatement.
Clearly, employment marred by hostility is not substantially equivalent to an
otherwise similar position in an amiable environment. Therefore, we hold the
magistrate judge did not abuse his discretion by not considering the alternative
positions substantially equivalent.
Of course, the burden to mitigate damages rests with the plaintiff, not the
defendant. Even though Gopher News’ proposed positions were not substantially
equivalent, that fact does not relieve Mathieu of his burden to exercise reasonable
diligence to find suitable employment with another employer. However, the evidence
presented at trial tended to show that Mathieu applied with eight to ten employers
during the first three months after he left Gopher News. For three months after that
Mathieu devoted six to eight hours per week looking for work. Mathieu offered
expert testimony that his job search was “very good.” Certainly, a party in Mathieu’s
position might have exerted more effort looking for employment. We may have
demanded more in the magistrate’s position. However, on the evidence presented at
trial we cannot say the magistrate committed a manifest abuse of discretion by finding
that Mathieu made an honest effort and exercised reasonable diligence to mitigate his
damages.
F. New Trial
Finally, Gopher News asserts the jury’s verdict was irreparably tainted by
manifest passion and prejudice. It asserts, in light of the high award and lack of a
history of discriminatory acts, the jury must have been moved by passion and
prejudice rather than a careful weighing of the evidence. It urges a new trial is the
only effective remedy. We reject this argument as well.
-20-
A motion for a new trial should be granted only if the jury’s verdict was
“against the great weight of the evidence so as to constitute a miscarriage of justice.”
Denesha, 161 F.3d at 497 (citing Pulla, 72 F.3d at 656). As noted above, Gopher
News raises a number of close questions on appeal. Addressing several of those
questions, we noted that a reasonable mind could have come out differently.
However, the fact that reasonable minds could disagree on the proper verdict does not
show that the verdict the jury actually reached is against the great weight of the
evidence; indeed quite the contrary. Therefore, we cannot find the jury verdict to
constitute a miscarriage of justice.
The order of the district court is reversed to the extent it applied MHRA
§ 363.071 subd. 2 to multiply the jury’s award of front pay. For this purpose, the case
is remanded to the district court for further action consistent with this opinion. The
judgment of the district court is affirmed in all other respects.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-21-
|
No. 12723
I N T E SUPREME COURT O THE STATE O M N A A
H F F OTN
1974
D N L E. P G and KAY A. PEGG,
O AD EG
husband and w i f e ,
P l a i n t i f f s and Respondent,
-vs -
MID-STATE DEVELOPMENT CORPORATION,
a Montana Corporation,
Defendant and A p p e l l a n t ,
and
GAIL W. BURLEIGH and ZITA E. BURLEIGH,
Defendants,
and
MARGARET (HARVEY) BARBER,
Defendant and Respondent.
Appeal from: D i s t r i c t Court of t h e Tenth J u d i c i a l D i s t r i c t ,
Honorable LeRoy L. McKinnon, Judge p r e s i d i n g .
Counsel of Record:
F o r Appellant :
Kurth, Davidson & Calton, B i l l i n g s , Montana
David A. Veeder argued, B i l l i n g s , Montana
For Respondents :
Theodore P. Cowan argued, Lewistown, Montana
Donald E. Ronish, Lewistown, Montana
Submitted: June 14, 1974
Decided : J'Ji 4 1974
2
Filed : JUL 2 4 1974
Mr. Justice Wesley Castles delivered the Opinion of the Court,
This is an appeal from a judgment for plaintiffs permanently
enjoining defendant Mid-State Development Corporation from entry
onto lands under a timber purchase contract and from other orders
and judgments in regards thereto. The matter was tried to the
district court in Fergus County, sitting without a jury.
Plaintiffs, respondents here, are husband and wife and will
be referred to as Peggs. Defendant and appellant Mid-State Develop-
ment Corporation will be referred to as Mid-State,
On April 16, 1969, Don and Margaret Harvey, owners of certain
real property, entered into a "Timber Purchase Contract" with
Silver City Lumber, Inc. The contract was for cutting and removing
timber on certain lands owned by the Harveys. The contract ran
until April 30, 1974. The contract was assigned by Silver City to
Mid-State on October 12, 1972.
On April 3, 1970, Margaret Harvey, after on's death, sold the
land which was the subject of the timber purchase contract to Gail
and Zita Burleigh under a contract for deed. The Burleighs were
informed of the timber purchase contract. The contract for deed was
for a term of twenty years.
On June 1, 1973, the land which was subject to the timber
purchase contract was again sold on a c~ntractfor deed by Burleighs
to Peggs. Peggs were informed and had actual notice of the timber
purchase contract. This contract for deed was for a term of ten
years, and required the consent of Burleighs before the purchasers,
Peggs, could contract for the sale of timber, which consent was
given for the subject timber purchase contract,
In mid-September 1973, Peggs received notification from Mid-
State by telephone and by letter that Mid-State would go upon the
land to harvest the timber.
On September 24, 1973, Mid-State was restrained by a temporary
restraining order from such entry; and subsequently the restraining
order was made permanent. A motion to quash the temporary restraining
o r d e r was denied. Motions f o r summary judgment were made by each
party. The t r i a l judge granted summary judgnent t o Peggs. Appeal
i s taken from the order denying t h e motion t o quash and t h e judgment
entered on t h e motion f o r summary judgment.
The c o u r t made f i n d i n g s of f a c t and conclusions of law i n
which t h e t r i a l judge determined t h a t t h e timber purchase c o n t r a c t
amounted only t o a revocable l i c e n s e t o e n t e r Peggs' land which
l i c e n s e was revoked by Peggs. The judge f u r t h e r determined t h e
timber purchase c o n t r a c t was ambiguous by reason of i t s e s c a l a t o r
c l a u s e , and t h e r e f o r e i t was impossible t o determine t h e c o n s i d e r a t i o n
of t h e c o n t r a c t .
The i s s u e s here go, i n t h e main, t o the foregoing determinations.
Two b a s i c questions a r e : (1) Is t h e timber purchase c o n t r a c t a
valid contract? (2) I f v a l i d , may such a c o n t r a c t be revoked
u n i l a t e r a l l y by t h e purchaser under an executory c o n t r a c t f o r deed
where t h e purchaser had a c t u a l knowledge of t h e c o n t r a c t ?
The timber purchase c o n t r a c t provided:
"TIMBER PURCHASE C N R C
OTAT
"This Contract Made and entered i n t o t h i s 16 day of
A p r i l , 1969, by and between SILVER C I T Y LUMBER, I N C . , A
Montana Corporation, t h e p a r t y of t h e f i r s t p a r t , herein-
a f t e r r e f e r r e d t o a s t h e BUYER, and Don E and Margaret A
Harvey, of Lewistown, t h e p a r t y of t h e second p a r t , herein-
a f t e r r e f e r r e d t o a s t h e SELLER,
"THAT WHEREAS, t h e SELLER i s t h e owner of t h e
following described property s i t u a t e d i n Fergus County,
and more p a r t i c u l a r l y described a s follows:
"T 15 R 19
I1
sec. 24 S 112 of SE 114 sec. 25 N 112 of NW 114
S 114 of SW 114
E S 114 of NW 114
W
W 1 1 2 of NE 1 / 4
"AND WHEREAS, t h e BUYER i s d e s i r o u s of buying t h e
merchantable timber on s a i d land and t h e SELLER i s de-
s i r o u s of s e l l i n g s a i d timber;
"NOW THEREFORE, i n c o n s i d e r a t i o n of t h e premises and
and mutual covenants and agreement h e r e i n a f t e r set f o r t h ,
i t i s agreed by and between t h e p a r t i e s a s follows:
"TIMBER TO BE S L
OD
"1. The SELLER w i l l s e l l t o t h e BUYER a l l of t h e
merchantable timber on t h e above described lands. The
SELLER warrants t o BUYER t h a t he has l e g a l t i t l e t o s a i d
timber t h a t i t i s f r e e and c l e a r of a l l encumbrances and
t h a t he does hereby forever warrant and w i l l forever
defend t h e t i t l e t o t h e BUYER a g a i n s t any and a l l claims
of a l l persons whomsoever.
"PURCHASE PRICE
"1. The BUYER agrees t o pay t h e SELLER t h e sum of
n i n e d o l l a r s ($9.00) per thousand f e e t f o r a l l species.
"1. A l l logs s h a l l be scaled by t h e BUYER'S s c a l e r
when d e l i v e r e d t o BUYER'S s c a l i n g point. A l l logs s h a l l
be scaled with t h e Scribner Decimal C l o g r u l e . Saw logs
s h a l l n o t be considered merchantable u n l e s s they have a
n e t sound s c a l e of a t l e a s t 50% of t h e i r gross s c a l e . I f
t h e SELLER i s a t any time d i s s a t i s f i e d with t h e log s c a l i n g ,
t h e SELLER may a t h i s own expense h i r e h i s own l o g s c a l e r .
I n t h e event t h e BUYER and t h e SELLER'S log s c a l e r cannot
agree on t h e log s c a l i n g , t h e two s c a l e r s s h a l l h i r e a
t h i r d and independent s c a l e r who s h a l l be paid e q u a l l y by
t h e BUYER and SELLER. The d e c i s i o n of two out of t h r e e of
t h e s c a l e r s s h a l l i n such event be binding upon t h e p a r t i e s .
Timber w i l l be crused before c u t . M.H.
D.E.H.
"1. The BUYER w i l l pay t o t h e SELT.P& upon t h e signing
of t h i s agreement, t h e sum of $75.00 r e c e i p t of which i s
hereby acknowledged by t h e SELLER. This s m i s t o beu
t r e a t e d a s an advance payment on t h e i n i t i a l stumpage. The
BUYER w i l l pay t h e SELLER f o r a l l timber s o c u t and removed
between t h e f i r s t and f i f t e e n of t h e month by twentieth
of t h e month, and f o r a l l timber so c u t and removed between
t h e f i f t e e n t h and t h e end of t h e month by t h e f i f t h of t h e
following month.
$500.00 d e p o s i t paid before timber i s c u t . M.H.
D.E.H.
"SLASH DISPOSAL
" . The BUYER w i l l pay t h e S t a t e F o r e s t e r $1 per
1
thousand f o r s l a s h d i s p o s a l .
"TERM O AGREEMENT
F
"1. It i s hereby agreed and understood by t h e p a r t i e s
h e r e i n t h a t t h i s c o n t r a c t s h a l l continue i n e f f e c t u n t i l
A p r i l 30 1974.
"INGRESS AND EGRESS
"1. The BUYER s h a l l have t h e r i g h t over s a i d property
t o b u i l d a l l roads necessary f o r t h e removal of s a i d timber,
t o g e t h e r with t h e r i g h t s of i n g r e s s and egress over and
along s a i d roads and elsewhere over s a i d premises necessary
f o r c u t t i n g and removal of s a i d timber.
"BUYER TO HOLD SELLER HARMLESS
" . In all logging operations hereunder conducted
1
by the BUYER, the BUYER will at all times protect and
save harmless the SELLER and his property against claims
for labor, materials or supplies furnished and against
and from any and all liens and claims of liens therefore.
SELLER shall be reimbursed by the BUYER for any damage
done to the fences, gates, cattle guards or livestock
of the SELLER'S that is attributable to the acts of the
BUYER, his agents, servants, or employees.
Timber price will be esculated each year.
M.H.
D.E.H.
"1. In the event of any default under the terms
of this contract by the BUYER, the SELLER shall give
written notice stating the manner in which the BUYER
is in default on said contract. Upon the receipt of
such written notice of default all logging operations
on said land shall cease at once until the said default
has been corrected; and unless the BUYER can and does
correct said default within 30 days of the time of re-
ceipt of said notice, the SELLER may cancel and ter-
mintate this agreement.
"TIME OF ESSENCE
"1. Lastly, it is agreed that time is of the
essence of this contract and that all of the covenants
and agreements herein contained shall extend to and be
obligatory upon heirs, executors, successors and assigns
of the parties herein.
"IN WITNESS WHEREOF, the parties have hereunto set
their hands the date hereinabove first written.
"SELLER : S/ Don E. Harvey
Margaret A. Harvey
SILVER .CITY LUMBER,INC.
S/ By: Michael A. ~olmes"
Is the sale of standing timber under such a written contract
of sale a sale of goods subject to the Montana Uniform Commercial Code
or is it simply a sale of an interest in land, hence subject to
the laws of real property?
Peggs rely on Gullicksen v. Shadoan, 124 Mont. 56, 218 P.2d
714, for the proposition that an executory contract for sale and
removal of growing timber is a mere license revocable at the will
of the owner. This Court there held that title to the trees severed
passed until the license was revoked. In Gullicksen the purchaser
by deed was an innocent purchaser for value, unlike the instant case.
Mid-State urges the effect of the Montana Uniform Commercial
Code. This code was enacted by the Montana legislature in 1963
to become effective at midnight on January 1, 1965, and therefore
it applied to transactions entered into and events occurring after
that date and was the law in Montana at the time of the execution
of this timber purchase contract.
Under the code, Title 87A, goods are defined at section 87A-2-
105(1), R.C.M. 1947, as:
"* * * '~oods'also includes the unborn young of
animals and growing crops and other identified things
attached to realty as described in the section on
goods to be severed from realty (section 87A-2-107). I I
Mid-State dwells on the application of the Uniform Commercial
Code to such a contract. However, we believe the same result is
reached under the general contract law as it applies to realty.
No problem concerned with the statutesof fraud appears. No problem
with lack of knowledge appears. From the findings of the trial
court, the contract was found to be ambiguous because of the esca-
lator clause, "Timber price will be esculated each year. I I
It is evident from a reading of the contract that money was
to be paid in a minimum amount, $9.00 per M for the timber removed
with an additional amount to be paid as an escalator. As Montana
statutory law indicates in sections 13-506 through 13-509, R.C.M.
1947, the amount of such additional consideration may be determined
other than specifically in the contract. The additional considera-
tion amount here could be determined by the use of ~rescott's
testimony presented at a hearing on February 20, 1974. Prescott
testified that the Silver City Lumber, Inc. escalator clause dated
November 8, 1968, only a few months before this contract, would
have been intended by the parties. The only difference between
that clause and this was the minimum price was $8.00 per M, rather
than $ . 0 per M
90 .
The validity of escalator clauses is annotated in 63 ALR2d 1339.
There was testimony undisputed, that the term escalator has a posi-
tive and definite meaning in the Lewistown area.
The f a c t s show t h e c o n t r a c t t o have been i n w r i t i n g with a
good and v a l i d c o n s i d e r a t i o n and no ambiguity appears.
W r e t u r n now t o t h e Gullicksen case.
e I n 18 ALR2d 1152, t h i s
statement i s made:
"* * * one who purchases land with n o t i c e , a c t u a l
o r c o n s t r u c t i v e , of a p r i o r s a l e of t h e timber
thereon, o r a g r a n t of r i g h t s i n such timber, t o a
t h i r d person, i s g e n e r a l l y held t o take s u b j e c t t o
such r i g h t s i n r e s p c t of such timber a s might have
been a s s e r t e d by t h e l a t t e r a g a i n s t t h e vendor o r
g r a n t o r . 'I
The annotation c i t e s Gullicksen i n support and a t page 1153 of t h e
annotation i n 18 ALR2d, i t i s s a i d :
"* * * a c o n t r a c t f o r t h e s a l e of timber i s
enforceable a g a i n s t a subsequent vendee of t h e
land t o t h e e x t e n t , b u t only t o t h e e x t e n t ,
t h a t he has, o r i s chargeable w i t h , n o t i c e
thereof. "
W f i n d t h i s t o be t h e c o r r e c t view.
e In the i n s t a n t case the
t r i a l c o u r t found "there has been no proof of custom o r usage
i n t h e a r e a t h a t would give meaning t o t h e so-called ' e s c a l a t o r '
c l a u s e ; t h a t i n f a c t t h e c o n t r a c t put i n evidence f o r t h a t purpose
s e t out a method of a r r i v i n g a t t h e p r i c e i n t h a t c o n t r a c t a t any
11
given time, q u i t e c o n t r a r y t o t h e c l a u s e i n t h i s case. The evi-
dence does n o t bear t h i s out. This c a s e was determined on a motion
f o r summary judgment. A t most, i t can be s a i d t h a t t h e evidence may
have been c o n f l i c t i n g a s t o t h e i n t e n t of t h e p a r t i e s ; and by t h a t
statement i t i s evident t h a t t h e c a s e was n o t r i p e f o r summary
judgment. However, a s we read t h e testimony, i t was n o t c o n t r a d i c t e d
t h a t t h e e s c a l a t o r c l a u s e had a d e f i n i t e and fixed meaning i n t h e
a r e a and a s intended by t h e p a r t i e s .
I n Gullicksen statements of t h i s Court could be taken t o mean
t h a t n o t i c e of t h e timber c o n t r a c t i s n o t m a t e r i a l and would n o t
prevent a u n i l a t e r a l revocation of a l i c e n s e . However t h e f a c t was
t h e r e t h a t no n o t i c e was had and such an i n t e r p r e t a t i o n i s n o t
reasonable. To t h e e x t e n t t h a t t h e o b i t e r dictum appears i n
Gullicksen, c o n t r a r y t o what we hold h e r e , i t i s overruled.
Sorensen v. Jacobson, 125 Mont. 148, 232 P.2d 332, i s a l s o
c i t e d by Peggs. I n t h a t c a s e an o r a l c o n t r a c t f o r s a l e of growing
timber was found to be executory in nature and that title to
severed logs passed to the purchaser. It does not conflict with
anything we hold here.
The findings of the district court were not supported by the
evidence and we find that Mid-State had a valid contract. No valid
revocation of the timber purchase contract was shown. Because the
contract by its terms expired on April 30, 1974, and because the
Peggs caused the delay in harvesting the timber while Mid-State
was under the restraining order, Mid-State is entitled to an ex-
tension of an equal amount of time to complete the contract.
Accordingly, the order refusing to quash the temporary re-
straining order and the judgment granted to Peggs are reversed.
The cause is remanded to the district court for further proceedings
not inconsistent herewith.
We Concur:
Justices
"-
H g n , Thomas ~ i & n ,
District
sitting for Chief Justice
-1
T. Harrison.
|
256 U.S. 658
41 S.Ct. 604
65 L.Ed. 1151
KANSAS CITY SOUTHERN RY. CO. et al.v.
ROAD IMPROVEMENT DIST. NO. 6 OF LITTLE RIVER COUNTY, ARK.
No. 205.
Argued March 16 and 17, 1921.
Decided June 6, 1921.
Messrs. Samuel W. Moore, of New York City, and James B. McDonough, of Ft. Smith, Ark., for plaintiffs in error.
Messrs. John J. Du Laney, of Ashdown, Ark., and William H. Arnold, of Texarkana, Ark., for defendant in error.
Mr. Justice McREYNOLDS delivered the opinion of the Court.
1
Proceeding under Act 338, 1915 Session, Arkansas Legislature, the county court created and fixed the boundaries of 'road improvement district No. 6 of Little River county.' They include approximately 25,000 acres, and within them there are 9.7 miles of main track railroad owned and operated by petitioners, Kansas City Southern Railway Company and Texarkana & Ft. Smith Railway Company, together with the corresponding right of way, covering 130 acres, and requisite station buildings.
2
Little River county is distinctly agricultural, has an area of 546 square miles, and 16,000 inhabitants. The improvement district was created for the purpose of constructing 11.2 miles of gravel road through taxation upon real property, defined by the statute as 'land, improvements thereon, railroads, railroad right of way and improvements thereon, including public buildings, side tracks, etc., and tramroads.'
3
A duly appointed board assessed the benefits to plaintiff in error's property on account of the proposed road at $7,000 per mile of main track—$67,900. They divided the farming lands into five zones, determined by distance from the highway, and assessed uniform benefits upon all within the same zone without regard to improvements or market value—in the first $12 per acre, second $10, third $8, fourth $6, and fifth $4. Town lots were likewise assessed without reference to value or improvements at $10, $15, $20, and $25 each, according to location. A pipe line, telephone line, and telegraph line were severally assessed at $2,500, $300, and $300 per mile, without any designated basis.
4
Plaintiffs in error duly maintained that the assessment upon their property was unequal, arbitrary, unreasonable, and in violation of the due process and equal protection clauses of the Fourteenth Amendment. The state courts held to the contrary, and in effect declared the statute providing for the road improvement district authorized the action taken by the board, and that, so construed, it was a valid enactment. 139 Ark. 424, 215 S. W. 656, 217 S. W. 773. The validity of the statute having been adequately challenged, the cause is properly here upon writ of error, and the petition for certiorari will be denied.
5
The settled general rule is that a state Legislature 'may create taxing districts to meet the expense of local improvements and may fix the basis of taxation without encountering the Fourteenth Amendment unless its action is palpably arbitrary or a plain abuse.' Gast Realty Co. v. Schneider Granite Co., 240 U. S. 55, 36 Sup. Ct. 254, 60 L. Ed. 523; Houck v. Little River Drainage District, 239 U. S. 254, 262, 36 Sup. Ct. 58, 60 L. Ed. 266. Ordinarily the levy may be upon lands specially benefited according to value, position, area, or the front-foot rule. French v. Barber Asphalt Co., 181 U. S. 324, 342, 21 Sup. Ct. 625, 45 L. Ed. 879; Cass Farm Co. v. Detroit, 181 U. S. 396, 397, 398, 21 Sup. Ct. 644, 645, 45 L. Ed. 914, 916; Louisville & Nashville R. R. v. Barber Asphalt Co., 197 U. S. 430, 25 Sup. Ct. 466, 49 L. Ed. 819; Withnell v. Ruecking Construction Co., 249 U. S. 63, 39 Sup. Ct. 200, 63 L. Ed. 479; Hancock v. City of Muskogee, 250 U. S. 454, 39 Sup. Ct. 528, 63 L. Ed. 1081; Branson v. Bush, 251 U. S. 182, 40 Sup. Ct. 113, 64 L. Ed. 215.
6
If, however, the statute providing for the tax is 'of such a character that there is no reasonable presumption that substantial justice generally will be done, but the probability is that the parties will be taxed disproportionately to each other and to the benefit conferred the law cannot stand against the complaint of one so taxed in fact.' Gast Realty Co. v. Schneider Granite Co., supra.
7
The statute under consideration prescribes no definite standard for determining benefits from proposed improvements. The assessors made estimates as to farm lands and town lots according to area and position and wholly without regard to their value, improvements thereon, or their present or prospective use. On the other hand, disregarding both area and position, they undertook to estimate benefits to the property of plaintiffs in error without disclosing any basis therefor, but apparently according to some vague speculation as to present worth and possible future increased receipts from freight and passengers which would enhance its value, considered as a component part of the system.
8
Obviously the railroad companies have not been treated like individual owners, and we think the discrimination so palpable and arbitrary as to amount to a denial of the equal protection of the law. Benefits from local improvements must be estimated upon contiguous property according to some standard which will probably produce approximately correct general results. To say that 9.7 miles of railroad in a purely farming section, treated as an aliquot part of the whole system, will receive benefits amounting to $67,900 from the construction of 11.2 miles of gravel road, seems wholly improbable, if not impossible. Classification, of course, is permissible, but we can find no adequate reason for what has been attempted in the present case. Royster Guano Co. v. Virginia, 253 U. S. 412, 415, 40 Sup. Ct. 560, 64 L. Ed. 989. It is doubtful whether any very substantial appreciation in value of the railroad property within the district will result from the improvements; and very clearly it cannot be taxed upon some fanciful view of future earnings and distributed values, while all other property is assessed solely according to area and position. Railroad property may not be burdened for local improvements upon a basis so wholly different from that used for ascertaining the contribution demanded of individual owners as necessarily to produce manifest inequality. Equal protection of the law must be extended to all.
9
The judgment of the court below is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-6064
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
CHARLETTE DUFRAY JOHNSON, a/k/a Charlotte Johnson,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Wilmington. W. Earl Britt,
Senior District Judge. (7:10-cr-00093-BR-1)
Submitted: February 27, 2014 Decided: March 5, 2014
Before NIEMEYER, KING, and AGEE, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Charlette Dufray Johnson, Appellant Pro Se. Jason Harris Cowley,
Assistant United States Attorney, Susan Beth Menzer, OFFICE OF
THE UNITED STATES ATTORNEY, Raleigh, North Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Charlette Dufray Johnson seeks to appeal the district
court’s order denying without prejudice Johnson’s pro se motions
to vacate her sentence * and for a hearing on that motion. This
court may exercise jurisdiction only over final orders, 28
U.S.C. § 1291 (2012), and certain interlocutory and collateral
orders, 28 U.S.C. § 1292 (2012); Fed. R. Civ. P. 54(b); Cohen v.
Beneficial Indus. Loan Corp., 337 U.S. 541, 545-46 (1949).
“A judgment in a criminal case becomes final after
conviction and imposition of sentence.” United States v.
Hartwell, 448 F.3d 707, 712 (4th Cir. 2006). Although Johnson
previously was convicted and twice sentenced, this court
recently vacated her criminal judgment in part and remanded for
resentencing. Because the resentencing hearing has not yet
occurred, no final judgment has been entered in the district
court. We conclude the order Johnson seeks to appeal is neither
a final order nor an appealable interlocutory or collateral
order.
Accordingly, we dismiss the appeal for lack of
jurisdiction. We deny as moot Johnson’s motion to expedite. We
dispense with oral argument because the facts and legal
*
This motion was not brought pursuant to 28 U.S.C. § 2255
(2012).
2
contentions are adequately presented in the materials before
this court and argument would not aid the decisional process.
DISMISSED
3
|
In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 01-3867
ALONZO R. PERRY,
Petitioner-Appellant,
v.
GARY R. MCCAUGHTRY, WARDEN,
Respondent-Appellee.
____________
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 99 C 1495—Lynn Adelman, Judge.
____________
ARGUED APRIL 2, 2002—DECIDED SEPTEMBER 23, 2002
____________
Before POSNER, MANION, and KANNE, Circuit Judges.
MANION, Circuit Judge. Alonzo Perry was convicted in
a Wisconsin state court as a “party to a crime” on several
counts, including first degree intentional homicide, and
was sentenced to life imprisonment. After pursuing di-
rect appeals and post-conviction proceedings in the state
court system, Perry filed a petition for habeas corpus re-
lief in federal district court, arguing that the Wisconsin
Court of Appeals had unreasonably applied federal law
in violation of his Sixth Amendment right to effective
assistance of counsel and his Fourteenth Amendment
right to due process. The district court denied his petition,
and Perry appeals. We affirm.
2 No. 01-3867
I. Factual & Procedural Background
In the early morning hours of August 13, 1995, Harry
Roberts was killed and two other men, Michael Moore
and Walter Parker, were injured in an armed robbery
and shooting incident outside of C.C. Havana’s tavern
in Milwaukee, Wisconsin. Three persons, Alonzo Perry,
Joenathon Burnley and Leugene Hampton, were arrested
and tried for their involvement in the crime. All three of
the accused were clearly involved in the crime. There is
some dispute as to the degree of involvement and who
actually pulled the trigger during the assault.
At the trial of Alonzo Perry, the State presented testimony
by the two wounded men, by a witness, Howard Thomas,
and by police officers Walsh and July, who had arrived
at the scene as the incident was occurring. Immediately
following the incident, Parker told detectives that he
had seen three men with masks come out of a field and
then run back into it after the shooting. Thomas testified
that he saw three men running from the scene. Moore
testified that he was at the bar with Roberts and Parker
that evening, that the three of them left the bar at clos-
ing and went to Roberts’ car, and that Moore got into the
passenger side while Roberts got into the driver’s side.
Moore explained that he then heard multiple gun-
shots coming from the sidewalk, saw the barrel of a gun
sticking through the window and closed his eyes. He felt
that he had been shot in the arm and heard the person
with the gun say, “This is a jack.” Moore testified that a
second person with a gun was standing behind the per-
son talking to him, and that the second person’s gun was
not pointed at the car. Moore further testified that the
first person asked for money and reached into his front
shirt pocket and took twenty dollars. He stated that the
second person said, “This isn’t enough money, shoot him
No. 01-3867 3
anyway.” Moore testified that he told the first person he
had more money in his shoe, and that the first person
then removed his (Moore’s) sock and the two men then
left. Moore testified that the weapon the first man pointed
at him looked like a nine millimeter weapon. Moore
further testified that he had heard two guns going off in
rapid sequence, that he wasn’t sure if both guns were
fired into Roberts’ car, and that he did not know whether
the shots from the second gun came from the second
person standing outside his door or from somewhere
else. All of the bullet casings found near the scene of the
shooting, and all of the bullets found in Roberts’ car and
in the victims, came from a nine millimeter gun. A single
.45 caliber bullet was lodged inside the radio of a car
parked in front of Roberts’ car. The evidence indicated
that the bullet had entered that car through the rear win-
dow.
Perry and Hampton were apprehended and arrested
close to the scene, and Burnley was apprehended and
arrested later. When Perry was found, he was carrying
a fully-loaded magazine for a .45 caliber handgun and
he was missing a shoe. Police recovered his shoe in a
nearby yard and they found a .45 caliber handgun near
the shoe. The .45 handgun had the capacity to hold eight
rounds, seven in the magazine and one in the chamber.
When the gun was found, the magazine contained six
rounds and there was one unfired cartridge in the cham-
ber. The nine millimeter weapon itself was never found.
The next morning, however, a nine millimeter magazine
was found near the spot where Perry and Hampton had
been apprehended.
In the days following his arrest, Perry made two separate
statements to detectives which were also admitted at his
trial. In the first statement, he asserted that Burnley was
4 No. 01-3867
the primary actor in the shooting, that Burnley had the
nine millimeter weapon, that he had fired all the shots
into the car and into the victims and that his brother,
Hampton, who was present at the scene, was not in-
volved in the incident. In his second statement, he stated
that he and Burnley arrived at the bar around 1:45 a.m.
and that Burnley had Hampton’s nine millimeter handgun
and was taking it to Hampton, who was already at the
club. Perry also admitted that he was carrying his own .45
weapon. Perry further stated that, before going into the
bar, Burnley left the nine millimeter under the seat of the
car, as the tavern had a metal detector, but that Perry
kept his gun with him since he knew he could not get
into the bar since he was only nineteen. Perry explained
that he waited outside for Burnley and Hampton and
they came out around 2:08 a.m. He further stated that
the three of them walked to Burnley’s car and “got ready
to rob anyone that was walking down the street with
some gold on.” They got into the car, and all put on
masks or skull caps. Hampton then got the gun from un-
derneath the seat. While watching for victims, Hampton
pointed to three men walking toward a car parked be-
hind them and stated “Man, let’s get them. Let’s get them.”
In recounting the shooting this time, however, Perry now
stated that Hampton was the primary actor and that Hamp-
ton had the nine millimeter weapon and fired all of the
shots into the car. He also stated that Burnley was in-
volved as a searcher, but was unarmed. In both state-
ments, Perry admitted that he was present, was armed with
a .45 handgun, that he fired the gun once, into the air,
but not toward any car or person and that he did not
know that any actual shooting of persons was going to
take place.
On August 17, 1994, Perry was charged with one count
of first degree intentional homicide as a party to the
No. 01-3867 5
crime, under Wis. Stat. §§ 940.01(1) and 939.05; two
counts of attempt to commit first degree intentional homi-
cide as a party to the crime, under Wis. Stat. §§ 940.01(1),
939.32 and 939.05; and one count of armed robbery as a
party to the crime, under Wis. Stat. §§ 943.32(1)(a) and
939.05. The State’s theory at trial was that Perry agreed
to participate in an armed robbery and was therefore
guilty of each count as a “party to the crime,” because
under Wisconsin law a “party to a crime” is liable for the
“natural and probable consequences” of a crime, here
armed robbery. See Wis. Stat. §939.05(2)(c). Thus, the
State argued that the intentional murder of Roberts and
the attempted intentional murders of Moore and Parker
were the natural and probable consequences of an armed
robbery.
Perry’s defense theory was that intentional murder was
not the natural and probable consequence of armed rob-
bery, and thus at most he was guilty as a “party to a crime”
of felony murder, which in Wisconsin occurs where a
person causes the death of another during the commis-
sion of a felony, see Wis. Stat. 940.03. To support this
theory, Perry’s counsel argued that Perry did not have the
requisite intent to kill and had no advance knowledge
that anyone would be shot during the robbery. Based
on this theory, at the jury instruction conference, de-
fense counsel requested the court to instruct the jury on
felony murder, as well as on first and second degree
reckless homicide. The State objected to the latter instruc-
tions but did not object to a felony murder instruction,
and the court agreed to give the jury that instruction,
although it refused to give instructions on first or
second degree reckless homicide. It is at this point we
encounter the pivotal issue in this appeal. In requesting the
felony murder instruction, Perry’s counsel did not spe-
cifically discuss the need for the “party to a crime” in-
6 No. 01-3867
struction to reference the felony murder instruction, and,
as a result, the “party to a crime” instruction was only
given with reference to the intentional homicide charge,
and did not refer to the alternative, lesser included of-
fense of felony murder.
The end result was that the trial court instructed the
jury in the following manner: first, the instruction for the
substantive offense of first degree intentional homicide
and the lesser included offense of felony murder; second,
the instruction for attempted first degree intentional homi-
cide; third, the instruction for armed robbery; and last,
the “party to a crime” instruction, specifically referencing
1
the first degree intentional homicide charge.
On February 3, 1995, the jury convicted Perry of first
degree intentional homicide as a party to the crime, two
counts of attempt to commit first degree intentional homi-
cide as a party to the crime, and one count of armed rob-
bery as a party to the crime. On March 25, 1995, the
state court judge sentenced him to life imprisonment on
Count One, with eligibility for parole to occur in not
less than 45 years, to 20 years on Count Two, to be served
consecutively, and 20 years on Count Three to be served
concurrently. On Count IV, Perry was sentenced to 40
years to be served consecutively to the other counts, but
that sentence was stayed. Additionally, Perry received 15
years of probation consecutive to Counts One, Two and
Three.
Perry appealed his conviction in state court, raising
issues which are not part of this appeal. On September 10,
1996, the Wisconsin Court of Appeals affirmed his con-
1
The relevant parts of the jury instructions are attached as an
appendix to the opinion.
No. 01-3867 7
victions. The Wisconsin Supreme Court denied his peti-
tion for review on November 20, 1996. Perry then filed
for post-conviction relief in Wisconsin state circuit court,
raising several post-conviction claims, including (1) wheth-
er his trial counsel was ineffective for failing to ensure
that a jury instruction on “party to a crime” liability refer-
enced the felony murder charge; and (2) whether the
Wisconsin jury instruction on the “natural and probable
consequences” theory of “party to a crime” liability im-
permissibly removed the burden from the State of proving
the defendant’s intent to kill. As to his first argument,
Perry contended that, since the evidence was undis-
puted that he did not shoot Roberts, the jury could not
have found him guilty of felony murder according to
the jury instructions provided. The only choice left to the
jury, Perry argued, was to convict him of intentional homi-
cide as a “party to a crime.” However, if the jury had
been given a “party to a crime” instruction in relation to
the felony murder instruction, Perry believes that the
jury might have convicted him on that lesser charge in-
stead. As to his second argument, Perry argued that an
intentional murder was not a “natural and probable con-
sequence” of armed robbery, and that the “party to a
crime” jury instruction incorporating that theory relieved
the State of its burden to prove his intent.
The state court denied all of Perry’s claims, holding
that under State v. Escalona-Naranjo, 517 N.W.2d 157
(Wis. 1994), he could not raise constitutional issues for the
first time in post-conviction relief without demonstrat-
ing sufficient cause for not having raised the issues on
direct appeal. Id. at 164. Concluding that he had not dem-
onstrated such cause, the court held that he had proce-
durally defaulted those issues. Perry appealed, and the
Court of Appeals also denied his claims for relief. Perry
filed a timely petition for review to the Wisconsin Su-
8 No. 01-3867
preme Court, which denied his request on December 20,
1999.
Perry filed a petition for habeas relief under Section
2254(d) in federal district court, raising the same issues.
The district court concluded that Perry had proce-
durally defaulted the claim that the “natural and prob-
able consequences” jury instruction violated his right to
due process, and therefore denied him habeas relief on
that basis. Regarding Perry’s ineffective assistance of
counsel claim, the district court concluded that the State
had waived its argument that Perry procedurally defaulted
this claim by failing to address it in its brief, and there-
fore proceeded to address the merits. In doing so, the
district court concluded that the Court of Appeals had
not unreasonably applied Strickland v. Washington in
denying Perry relief, and therefore denied his claim
for habeas relief on this ground as well. The district court
noted that it would have been preferable for the “party
to a crime” instruction to specifically refer to felony mur-
der by stating that Perry could be guilty of felony murder
if he or another fired the fatal shot, but concluded that,
“in the context of the entire trial, including the evi-
dence presented, the arguments of both sides, and the
totality of the jury instructions, . . . counsel’s failure to
request a more precisely tailored instruction [did not
cause] prejudice to [Perry] as required by Strickland.”
Accordingly, the district court denied Perry habeas relief
2
on all grounds. Perry filed a motion for a certificate of
appealability, which the district court granted. Perry now
appeals.
2
Perry had also argued that his trial counsel was ineffective
for failing to object to allegedly prejudicial statements by the
prosecutor during closing argument. That argument is not part
of this appeal, and we need not address it.
No. 01-3867 9
II. Analysis
A. Applicable Standards
Perry argues that he is in custody in violation of the
Sixth and Fourteenth Amendments to the United States
Constitution. Specifically, he argues that he was denied
ineffective assistance of counsel under the Sixth Amend-
ment and Strickland v. Washington, 466 U.S. 668 (1984),
because his trial counsel failed to ensure that a jury in-
struction on “party to a crime” liability was integrated
with the jury instruction on the lesser included offense
of felony murder. Further, he argues that he was denied
due process under the Fourteenth Amendment, Sandstrom
v. Montana, 442 U.S. 510 (1979) and In re Winship, 397
U.S. 358 (1972) because the trial court used a jury instruc-
tion on the “natural and probable consequences” theory
of “party to a crime” liability, which he claims imper-
missibly shifted the burden of proof on intent to him.
In reviewing the district court’s decision to deny habeas
corpus relief, we review issues of law de novo and issues
of fact for clear error. See, e.g., Todd v. Schomig, 283 F.3d
842, 848 (7th Cir. 2002). A defendant may only obtain
habeas relief from a state court conviction where he estab-
lishes that the state court’s adjudication “(1) resulted in
a decision that was contrary to, or involved an unreason-
able application of, clearly established Federal law, as
determined by the Supreme Court of the United States;
or (2) resulted in a decision that was based upon an un-
reasonable determination of the facts in light of the evi-
dence presented in the State court proceeding.” See 28
U.S.C. §§ 2254(d).
Under the “unreasonable application” clause of Section
2254(d)(1), “a federal habeas court may not issue the writ
simply because that court concludes in its independent
10 No. 01-3867
judgment that the relevant state-court decision applied
clearly established federal law erroneously or incorrectly.
Rather, that application must also be unreasonable.”
Williams v. Taylor, ___ U.S. ___, 120 S.Ct. 1495, 1522 (2000)
(O’Connor, J. concurring, but writing for the court). Thus,
we will “defer to a reasonable state court decision.” Ander-
son v. Cowan, 227 F.3d 893, 897 (7th Cir. 2000).
Moreover, federal habeas relief is only available to a
person in custody in violation of the United States Consti-
tution or laws or treaties of the United States, see 28 U.S.C.
§§ 2254(a), and is unavailable to remedy errors of state
law. See Estelle v. McGuire, 502 U.S. 62, 67-68 (1991) (“it
is not the province of a federal habeas court to reexa-
mine state-court determinations on state-law questions”).
A federal court will also not review a question of federal
law decided by a state court if the decision of the state
court rests on a state procedural ground that is indepen-
dent of the federal question and adequate to support the
judgment. Stewart v. Smith, ___ U.S. ___, 122 S.Ct. 2578,
2580-81 (2002); Coleman v. Thompson, 501 U.S. 722, 729
(1991). Against this backdrop, we consider Perry’s claims.
B. Alleged Constitutional Violations
1) Sixth Amendment & Strickland
First, Perry argues that the Wisconsin Court of Appeals’
determination that he was not deprived of effective as-
sistance of counsel was unreasonable in light of Strickland
v. Washington, 466 U.S. 668 (1984). The rule set forth in
Strickland is “clearly established Federal law,” see 28 U.S.C.
§§ 2254(d)(1), and provides that Perry must establish that
(1) his attorney’s performance fell below an objective stan-
dard of reasonableness, and (2) the deficient performance
caused him prejudice. 466 U.S. at 687. Specifically, Perry
No. 01-3867 11
argues that his trial counsel was ineffective for failing
to ensure that the jury instruction on “party to a crime”
liability included a reference to the lesser included of-
fense of felony murder. As noted, the jury instruction
on “party to a crime” liability was only integrated with
the first degree intentional homicide charge, and not
with any of the others, including felony murder. This omis-
sion, Perry contends, was fatal because his defense
theory was that, at most, he was guilty of felony murder,
as a party to the crime, not of first degree intentional
homicide. However, since the “party to a crime” instruc-
tion did not reference the lesser included offense of fel-
ony murder, Perry argues that his theory was wasted on
the jury because, by not being properly instructed, it was
unable to find him guilty of the lesser offense, even
though they may not have been convinced beyond a
reasonable doubt that he was guilty of first degree inten-
tional homicide.
The Wisconsin Court of Appeals recited the appropri-
ate Strickland test and, in concluding that Perry’s counsel
had not been ineffective, reasoned that the jury instruc-
tions in their entirety properly set forth the law on “party
to a crime” liability. Perry, however, argues that this
is unreasonable because the mere fact that the “party to
a crime” liability instructions were given for the first de-
gree intentional murder charge cannot cure the defect
with respect to the felony murder charge. Because we
have concerns about the propriety of these instructions
(at a minimum, they were not clearly drafted), we will as-
sume for purposes of this decision that Perry’s counsel
was deficient in failing to object to them. However, that
does not end the inquiry. Rather, we must also deter-
mine whether the Court of Appeals was unreasonable
in concluding that the jury could have independently
determined that Perry was guilty of first degree inten-
12 No. 01-3867
tional homicide, and therefore that Perry was not prej-
udiced by the instructions.
Initially, Perry argues that the Court of Appeals, by
considering whether the jury could have independently
determined that Perry was guilty of first degree inten-
tional homicide, improperly applied a “sufficiency of the
evidence” standard, as opposed to the Strickland stan-
dard. We disagree. Under Strickland’s prejudice prong,
Perry must establish “that there is a reasonable probabil-
ity that, but for counsel’s unprofessional errors, the result
of the proceeding would have been different.” 466 U.S. at
694. By considering whether the jury could have indepen-
dently reached the verdict it did, the Court of Appeals
was merely reaching the conclusion that any error by
Perry’s counsel was not prejudicial. Therefore, it applied
the proper standard. We now consider whether its ap-
plication was unreasonable.
As noted above, under Strickland, to establish prejudice,
Perry must prove there is a reasonable probability that,
but for the counsel’s failure to object to the improper in-
struction, the result of the proceeding would have been
different. Perry argues that there is a reasonable probabil-
ity that the jury believed it could not impose felony mur-
der because of the improper instruction, but not wanting
to let him completely off the hook, found him guilty of
first degree intentional homicide. Given the instructions
in their entirety, the testimony presented to the jury,
the arguments of both the State and Perry’s counsel and
the overwhelming evidence of Perry’s guilt, we con-
clude that it is not reasonable to conclude that the instruc-
tion led the jury to believe that it could convict Perry of
felony murder only if he directly caused the death of the
victim. See Cupp v. Naughten, 414 U.S. 141, 146-47 (1973)
(courts must review instructions in the “context of the
No. 01-3867 13
overall charge” which includes “testimony of witnesses,
argument of counsel, receipt of exhibits in evidence, and
instruction of the jury by the judge”). The charges, the
attorneys’ arguments, Perry’s own statements offered into
evidence and the jury instructions as a whole all spoke in
terms of Perry’s culpability on each count as a party to the
crime. Thus, it was absolutely clear at trial that Perry was
3
being charged, on all counts, as a party to the crime.
Furthermore, the jury was specifically instructed not to
reach the felony murder charge if it found Perry guilty of
first degree intentional homicide. We presume that juries
follow instructions. See United States v. Miller, 276 F.3d 370,
375 (7th Cir. 2002). Thus, even assuming that the party to
a crime instruction should have referenced the felony mur-
der instruction, once the jury concluded that Perry was
guilty of first degree intentional homicide, as a party to
the crime, the jury never needed to reach the felony mur-
der instruction. Under these circumstances, there is no
reasonable probability that, but for counsel’s error in fail-
ing to object to the jury instruction, the result of the pro-
ceeding would have been different. See Strickland, 466 U.S.
at 694 (a “reasonable probability” is a “probability suffi-
cient to undermine confidence in the outcome”). For
these reasons, we conclude that the Court of Appeals
reasonably concluded that Perry did not suffer prejudice
because of the jury instructions.
3
We note that the jury also found Perry guilty of two counts
of attempt to commit intentional homicide even though there
were no “party to a crime” liability instructions given with re-
spect to those charges. However, interestingly, Perry has never
challenged his trial counsel’s failure to object to incorporat-
ing “party to a crime” instructions with the substantive charges
of attempt to commit intentional homicide.
14 No. 01-3867
2. Due Process Rights
Next, Perry argues that the Wisconsin Court of Appeals
erred because the trial court’s use of Wisconsin’s pattern
jury instruction on the “natural and probable consequences”
theory of “party to a crime” liability impermissibly shifted
the burden of proof to him in violation of his Fourteenth
Amendment due process rights as set forth in Sandstrom
v. Montana, 442 U.S. 510 (1979), and In re Winship, 397 U.S.
358 (1972).
As previously noted, we may not review a federal claim,
such as Perry’s due process claim, if the state court rests
its decision on a state procedural ground that is indepen-
dent of the federal question and adequate to support
the judgment. Stewart, 122 S.Ct. at 2581. Wisconsin has a
procedural rule that bars a criminal defendant from rais-
ing, in a postconviction motion, a constitutional issue
that could have been, but was not, raised on direct ap-
peal from his conviction, unless the defendant can offer a
sufficient reason for not asserting the issue on his direct
appeal. See Escalona-Naranjo, 517 N.W.2d at 184-85. Al-
though this court has recognized the Escalona-Naranjo rule
as an adequate state ground, that question is not at issue
here. See Liegakos v. Cooke, 106 F.3d 1381 (7th Cir. 1997). Per-
ry’s argument is that the Court of Appeals’ reliance on
this ground was not independent of the federal question.
In support of this position, Perry cites Harris v. Reed, 489
U.S. 255 (1989), wherein the Supreme Court held that
the “adequate and independent state ground” doctrine
does not bar habeas review of the federal claim unless
the state court actually relied on the procedural default as
an independent basis for its decision. 489 U.S. at 261-62.
To be an independent basis for the state court’s ruling,
“the state court therefore must have ‘clearly and expressly’
relied on procedural default as the basis of its ruling.” Braun
No. 01-3867 15
v. Powell, 227 F.3d 908, 912 (7th Cir. 2000). Perry claims
that the state Court of Appeals did not clearly and ex-
pressly deny his due process claim on procedural default
grounds, and therefore that basis cannot serve as an inde-
pendent and adequate state ground.
To understand his argument a little additional detail is
necessary. It is undisputed that Perry failed to raise his
due process claim on direct appeal; the first time he
raised it was in his motion for post-conviction relief in
Wisconsin state court. As previously noted, on Perry’s
petition for post-conviction relief, the Wisconsin state
court denied all of Perry’s claims, holding that he had
procedurally defaulted them under the Escalona-Naranjo
rule and that he had not demonstrated sufficient reason
for his failure to raise the issues on direct appeal. Nev-
ertheless, the state court went on to consider the merits
of Perry’s Sixth Amendment claim, reviewed the record,
and concluded that the claim lacked merit and that his
counsel’s performance was not deficient or prejudicial.
The state court did not reach the merits of Perry’s due
process claim. Perry appealed, and the Court of Appeals
also denied his claims for relief. The Court of Appeals
agreed with the state court that Perry had procedurally
defaulted his claims and that Perry offered only conclu-
sory allegations for his failure to raise the issues on
direct appeal. Reciting the Supreme Court’s test in Strick-
land v. Washington, 466 U.S. 668 (1984), the Court of Appeals
further held that Perry’s trial counsel was not ineffective
because the jury instructions, in their entirety, properly
set forth the law on “party to a crime” liability as it relates
to felony murder. Next, the Court of Appeals concluded
that, based on the evidence presented at trial, the jury
could have independently determined that Perry commit-
ted first degree intentional homicide as a party to a crime,
and therefore Perry had not been prejudiced. While af-
16 No. 01-3867
firming the trial court’s order in its entirety, the Court of
Appeals did not specifically address Perry’s argument
regarding a violation of his due process rights. In its
analysis, the district court reasoned that the Court of
Appeals had merely overlooked the due process claim,
and thus concluded that it was clear that Perry had pro-
cedurally defaulted the argument. Perry argues, however,
that the Court of Appeals did not actually rely, through
a clear and express statement, on the Escalona-Naranjo
procedural rule and that its silence on the due process
claim indicates that it did not rest its decision on an “in-
dependent and adequate” state procedural ground.
However, a close review of the Court of Appeals’ deci-
sion reveals that it did clearly and expressly rest its deci-
sion regarding Perry’s due process claim on procedural
default. After restating all of Perry’s arguments, includ-
ing his due process argument, the Court of Appeals stated
that the “circuit court denied [Perry’s postconviction]
motion without a hearing, finding that the claims were
barred by Escalona-Naranjo, and that the allegations in the
motion did not state a sufficient reason to overcome that
bar.” The court then recited the Escalona-Naranjo standard
and concluded “[w]e agree with the State that since Perry
has already had a direct appeal in this case, in order to
succeed here, he must show that postconviction counsel
was ineffective for failing to challenge the effectiveness
of trial counsel in either a postconviction motion on or di-
rect appeal.” The Court of Appeals then addressed the
merits of Perry’s ineffective assistance of counsel claim,
and in concluding that trial counsel did not err in failing
to object to the jury instructions, necessarily concluded
that Perry had not established that his postconviction coun-
sel was ineffective for failing to challenge the trial counsel’s
conduct. The Court of Appeals then held that, under the
Escalona-Naranjo rule, Perry had not established “suffi-
No. 01-3867 17
cient reason” for his procedural default. Thus, while the
Court of Appeals did not address Escalona-Naranjo’s im-
pact with specific reference to Perry’s due process argu-
ment, it is still clear from its decision that the court con-
sidered the argument to have been procedurally defaulted.
Therefore, while it is possible that the Wisconsin Court
of Appeals could have been more precise, we find that
its statements, when considered in context, are suffi-
ciently plain to constitute reliance on the independent
and adequate state law ground of procedural default.
III. Conclusion
For the reasons stated herein, we conclude that Perry did
not establish that the Wisconsin Court of Appeals unrea-
sonably applied the Strickland v. Washington test in deter-
mining that Perry’s Sixth Amendment right to counsel had
not been violated, and that Perry’s argument that the jury
instructions violated his due process rights under the
Fourteenth Amendment is barred by an independent and
adequate state ground, procedural default. Therefore, we
affirm the decision of the district court to deny Perry’s
petition for habeas corpus relief under 28 U.S.C. § 2254.
18 No. 01-3867
Appendix
The jury instructions provided, in relevant part:
The defendant in this case is charged with first degree
intentional homicide. You must first consider whether
the defendant is guilty of that offense. If you are not
satisfied that the defendant is guilty of first degree
intentional homicide, you must consider whether or
not the defendant is guilty of felony murder, which
is a less serious degree of criminal homicide.
***
Intentional homicide and felony murder require that
the defendant caused the death of the victim. First
degree intentional homicide requires the State to prove
the additional fact that the defendant acted with the
intent to kill. Felony murder requires the State to prove
that the defendant caused the death of Harry Roberts
while committing or attempting to commit the crime
of armed robbery.
The elements necessary to constitute each crime will
now be defined for you in greater detail.
[The court then gave the jury substantive instructions
on first degree intentional homicide, felony murder and
attempt to commit first degree intentional homicide. Each
instruction was phrased in terms of the defendant’s ac-
tions or intent.]
***
[The court then proceeded to give the “party to a crime”
instruction, as follows:]
The criminal code of Wisconsin provides that whoever
is concerned in the commission of a crime may be
charged with and convicted of the commission of a
crime although he did not directly commit it.
No. 01-3867 19
The State contends that the defendant was concerned
in the commission of the crime of armed robbery as a
member of [a] conspiracy or as an aider and abetter.
***
Before you may find the defendant guilty, you must
be satisfied beyond a reasonable doubt that the defen-
dant was a member of a conspiracy or aided and
abetted to commit the crime of armed robbery, that
first degree intentional homicide was committed in
pursuance of armed robbery, and that under the cir-
cumstances, first degree intentional homicide was a
natural and probable consequence of armed robbery.
First, consider whether the defendant was a member of
a conspiracy or aided and abetted to commit the crime
of armed robbery. . . .
Next consider whether the crime of first degree inten-
tional homicide was committed.
First degree intentional homicide, as defined in the
Criminal Code of Wisconsin, is committed by one who
causes the death of another human being with intent
to kill that person or another. The State must prove
by evidence which satisfies you beyond a reasonable
doubt that the following two elements were present.
First, that the defendant or someone he was working with
caused the death of Harry Roberts.
Second, that the defendant or someone he was working
with intended to kill Harry Roberts.
Mere presence at the scene of the crime and knowledge
that a crime is being committed are not sufficient to
establish that the defendant aided and abetted the
crime, unless you find a reasonable doubt that the
20 No. 01-3867
defendant was a participant and not merely a knowing
spectator.
***
If you are satisfied beyond a reasonable doubt that the
defendant is a member of a conspiracy or aided and
abetted the commission of armed robbery, that the
crime of first degree intentional homicide was commit-
ted, and that under the circumstances first degree
intentional homicide was a natural and probable
consequence of armed robbery, you should find the
defendant guilty.
(Emphasis added.)
No. 01-3867 21
POSNER, Circuit Judge, dissenting. Perry’s lawyer com-
mitted a fearful mistake at the trial, though not because
he told the jury in his closing argument that they should
convict his client of felony murder, which is second de-
gree in Wisconsin, rather than of first-degree murder. He
said this because the felony-murder charge was pat and
because if convicted only of felony murder and armed
robbery Perry would have been eligible for parole after 10
years, while if convicted of first-degree murder, as he was,
he would be sentenced to life in prison without possibil-
ity of parole; and so he was. But, fatally, his lawyer failed
to object to an instruction that, if taken seriously—and
we have no reason to doubt that it was—precluded the
jury from convicting Perry of felony murder and, in the
circumstances, foredoomed him to be convicted of first-
degree murder. For the felony-murder instruction re-
quired the jury to find, in order to convict Perry of felony
murder, that he had caused the murder victim’s death.
The evidence was uncontradicted that the victim was
killed by another of the robbers, not Perry. The entire
point of felony murder is that the felon who did not “cause”
a death, in the ordinary meaning of the word, neverthe-
less is guilty of (a form of) murder. Perry was charged
with and convicted of first-degree murder under Wis-
consin’s “party to a crime” statute, which makes an aider
and abettor or a conspirator liable not only for the
crimes that he agreed to assist with or participate in
but also for any other crime that was the “natural and
probable” consequence of the crime that he aided an
accomplice to commit or that he conspired to commit. Wis.
Stat. § 939.05(2)(c). The party-to-a-crime and felony-mur-
der instructions should have been integrated in the
sense of being presented to the jury with a clear indica-
tion of the difference between the two crimes: the differ-
ence is not, as the instruction stated, that only felony
22 No. 01-3867
murder requires proof that the defendant “caused” the
death of the victim. The causation requirements of the
two statutes are in fact the same. The difference is that
the party-to-a-crime statute requires that the death
have been a “natural and probable” consequence of the
crime that the defendant conspired to commit or aided
and abetted the commission of.
It is highly probable that the jury was confused by the
wording of Wisconsin’s felony-murder statute, the gist
of which was repeated in the instructions: “Whoever
causes the death of another human being while commit-
ting or attempting to commit a crime specified in [var-
ious statutes, including the statute criminalizing armed
robbery] may be imprisoned for not more than 20 years
in excess of the maximum period of imprisonment pro-
vided by law for that crime or attempt.” Wis. Stat. § 940.03
(emphasis added). A layperson would not without in-
struction understand that “causes” in the statute and in-
structions is a technical term, meaning only that the de-
fendant’s conduct “was a substantial factor in bringing
about the death,” so that, for example, a defendant can be
found guilty of felony murder even if the victim of the
felony fired the fatal shot, e.g., State v. Oimen, 516
N.W.2d 399, 404 (Wis. 1994); see also State v. Rivera, 516
N.W.2d 391, 392 (Wis. 1994), because, had it not been for the
felony, the occasion for the victim to defend himself would
not have arisen. This should have been but was not ex-
plained to the jury. The jury was left to assume that
“causes” was being used in its ordinary sense, the sense
in which Perry—who neither intended the victim’s death
nor did anything to bring it about—did not cause it.
Buried deep in the instructions was the statement that
“before the relation of cause and effect can be found to
exist, it must appear that the defendant’s act was a sub-
No. 01-3867 23
stantial factor in producing the death.” But “substantial
factor” was not explained; and, anyway, so deep was
the burial that neither the lawyers nor the judges involved
in this case have ever suggested that its inclusion would
have disabused the jury of the misconception that to find
Perry guilty of felony murder they would have had to find
that he pulled the trigger.
The decision by the Wisconsin court of appeals affirm-
ing Perry’s conviction discussed the adequacy of the in-
structions in only the most perfunctory manner. The dis-
trict judge did a little better, saying that the fact that the
defense lawyer argued in his closing argument without
objection that his client should be found guilty only of
felony murder, coupled with the fact that the judge did
instruct the jury on felony murder, showed that the jury
must have realized that it could acquit Perry of the party-to-
a-crime charge and convict him of felony murder. But
then the district judge contradicted himself, for after not-
ing that the trial judge had instructed the jury not to
consider the felony-murder charge unless it could not
unanimously agree that Perry was guilty of the more ser-
ious charge, he said that “there is a strong presumption
that juries follow the instructions they are given.” Had
the jury followed the instructions as they could be ex-
pected to be understood by laypersons, and so as they
undoubtedly were understood by the members of the jury,
it would not have thought itself free to convict Perry
of felony murder, because he was not the triggerman.
We should be realistic about the jurors. They knew from
the closing arguments that Perry’s lawyer wanted them
to convict Perry of felony murder. And it is entirely pos-
sible that in their initial discussion of the party-to-a-crime
charge they were not unanimously of the opinion that he
was guilty of it. But when they then in accordance with
24 No. 01-3867
the judge’s instruction on the sequence of their consider-
ation turned to the felony-murder charge and read the
instructions, they would have thought they could not
convict him of felony murder because he had not been
the “cause” of the victim’s death as they would have
understood “cause” to mean in the absence of explanation.
At that point their choice would have been between acquit-
ting Perry of all murder charges or convicting him of party-
to-a-crime first-degree murder, and faced with that choice
any initial doubters may well have swung around to
agreeing to convict him of that charge after all.
Had Perry’s lawyer not told the jury that they should
convict his client of felony murder, it would be arguable
that his failure to object to the felony-murder instruction
was tactical—that he was going for broke, hoping that the
jury, if forced to choose between convicting Perry of first-
degree murder and of armed robbery, would convict him
only of the latter. That is not always a reasonable strategy.
“The spectrum of counsel’s legitimate tactical choices
does not include abandoning a client’s only defense in
the hope that a jury’s sympathy will cause them to misap-
ply or ignore the law they have sworn to follow. By fail-
ing to tender instructions that would allow the jury to
consider Barnard’s justification and denying them the op-
tion of finding him guilty of a lesser offense, trial counsel
defaulted in his obligation to Barnard.” United States ex
rel. Barnard v. Lane, 819 F.2d 798, 805 (7th Cir. 1987). But
it might have been reasonable here. Perry didn’t pull
the trigger, or agree that anyone would be shot, and
so he was guilty of first-degree murder, we recall, only
if the jury found that the killing was the “natural and
probable” consequence of the armed robbery. Wis. Stat.
§ 939.05(2)(c); State v. Glenn, 545 N.W.2d 230, 235-36 (Wis.
1996); State v. Ivy, 350 N.W.2d 622, 626 (Wis. 1984) (“proof
of intent is not required for conviction of the differ-
No. 01-3867 25
ent offense if the offense was the natural and probable
consequence of the intended crime to which the defen-
dant was a party”); Piaskowski v. Bett, 256 F.3d 687, 694
(7th Cir. 2001) (“under Wisconsin law, a conspirator is
responsible for any crime committed as a natural and
probable consequence of the intended crime”). The jury
might not have found that the murder was a natural
and probable consequence of the armed robbery, and then
it would have had to acquit Perry if it also though errone-
ously believed that he could not be guilty of felony mur-
der because he had not “caused” the victim’s death. But
the lawyer did not adopt the go-for-broke strategy. He
must have believed that the jury wanted to assign some
responsibility to Perry for the death. That must have
been why he told the jury to convict Perry of felony mur-
der—but in doing this without objecting to the instruction
he was telling them to do the impossible.
The lawyer’s mistake in failing to object to an instruc-
tion that nullified the lesser-included instruction that he
himself thought might spare his client the maximum sen-
tence possible in Wisconsin (a state that does not have
capital punishment) was gross, palpable, and, once the
alternative characterization as a tactic is rejected, as it must
be—for all the lawyer did was shoot his client in the
foot—brought his representation of his client below the
minimum standard of competence required of a criminal
defendant’s lawyer. There is no argument that he re-
deemed himself by above-average advocacy in some other
part of the trial.
That leaves only the question whether the mistake was
prejudicial to Perry in the sense that it may well have
changed the outcome of the trial. The answer is yes. A jury
given a choice between finding Perry guilty of first-
degree murder and finding him guilty of felony murder
26 No. 01-3867
might well have chosen the latter course. Indeed, that
possibility is inherent in the judge’s decision to instruct
the jury on felony murder, since a defendant is not en-
titled to an instruction for which there is no support in
the evidence.
The judge might have been mistaken, however; and if
only a lawless jury would have acquitted Perry of first-
degree murder the mistake in the instruction on felony-
murder was not prejudicial in the relevant sense. Strickland
v. Washington, 466 U.S. 668, 694-95 (1984); Jones v. Jones, 163
F.3d 285, 306-07 (5th Cir. 1998); Flamer v. Delaware, 68 F.3d
710, 728 (3d Cir. 1995). But a finding that the death of the
victim was a natural and probable consequence of the
armed robbery, the finding required to condemn Perry of
first-degree murder, while likely, see State v. Balistreri,
317 N.W.2d 493, 501-03 (Wis. 1982); State v. Asfoor, 249
N.W.2d 529, 537-38 (Wis. 1977); State v. Cydzik, 211 N.W.2d
421, 429-30 (Wis. 1973), was not inevitable. It was for the
jury to decide what is “natural and probable.” State v. Ivy,
supra, 350 N.W.2d at 628. Only .26 of 1 percent of all rob-
beries result in a death (Enmund v. Florida, 458 U.S. 782, 799-
800 and nn. 23-24 (1982), says .43 of 1 percent, but was
based on the 1980 Uniform Crime Reports, and my figure
is based on the 2000 UCR), and since 60.6 percent of all
robberies are armed robberies (same source), even if all
deaths in robberies occur in armed robberies only .42 of 1
percent of such robberies (that is, 4 out of every 1,000)
result in the victim’s death. The percentage would rise to
.63 (6 per thousand) if all victim deaths occurred in armed
robberies in which a gun was used, which are 40.9 percent
of all robberies. But clearly that would be an exaggera-
tion, since armed robberies are defined as robberies com-
mitted with a dangerous weapon. Whether .525 of 1 per-
cent (the result of averaging .42 percent and .63 percent)—
No. 01-3867 27
5 in 1,000—is high enough to make death a natural and
probable consequence of armed robbery is a question
on which different juries might give different answers
without being thought lawless. “In order to determine
whether the death was a natural and probable conse-
quence of the robbery and whether it occurred during the
robbery, it was necessary to hear evidence concerning
the circumstances of the robbery.” Briggs v. State, 251
N.W.2d 12, 20 (Wis. 1977); cf. State v. Pierson, 530 N.W.2d
784, 789-90 and n. 3 (Minn. 1995).
One finds intimations in Wisconsin cases, and in cases
in our court interpreting the party-to-a-crime statute, that
the victim’s death is a natural and probable consequence
of armed robbery as a matter of law. State v. Oimen, supra,
516 N.W.2d at 406-07; Wilson v. State, 208 N.W.2d 134,
143 (Wis. 1973); Solles v. Israel, 868 F.2d 242, 251 (7th
Cir. 1989); Feela v. Israel, 727 F.2d 151, 158 (7th Cir. 1984).
But in Wilson the defendant was the triggerman and in
Solles the triggerman had said to the defendant “Should
I shoot him?” and the defendant had responded, “Only if
you have to.” 868 F.2d at 244. Oimen explains that the “nat-
ural and probable” formula was adopted as a substitute
for limiting felony murder to felonies that are “inherently
dangerous” (see also State v. Noren, 371 N.W.2d 381, 383-84
(Wis. App. 1985)), of which armed robbery is one. But
the court was just explaining why the Wisconsin legislature
had dropped from the felony-murder statute the “natural
and probable” formula in favor of an enumeration of
specific felonies, such as armed robbery, to which the stat-
ute would henceforth be limited. The court was not con-
sidering the party-to-a-crime statute. Only Feela among the
cases that might be cited against Perry’s appeal is really
on point, for it was a case much like this and we held
that the failure to give a “natural and probable” instruction
was harmless error. But Feela did not cite Briggs, which
28 No. 01-3867
stands as the governing statement of Wisconsin law. In-
stead it cited cases such as Balistreri and Asfoor which hold
merely that a jury is permitted—not required—to infer
that the murder of a robbery victim is a natural and proba-
ble consequence of an armed robbery.
A properly instructed jury might have so found here. But
as Perry had no foreknowledge that the robbery victim
would be killed, and did not contribute to the death in
any very obvious sense, the jury, consistent with Wis-
consin law as stated in Briggs, might have acquitted him
had it been given a real alternative of convicting him
of felony murder. Perry’s was in fact a classic case of
felony murder. The murder occurred in the course of his
felony but he did not intend or perpetrate the murder.
See State v. Rivera, supra; State v. Chambers, 515 N.W.2d
531, 534 and n. 4 (Wis. App. 1994); State v. Back, 341 N.W.2d
273, 276-77 (Minn. 1983); State v. Utley, 928 S.W.2d 448, 451-
52 (Tenn. Crim. App. 1995); Commonwealth v. DeVaughn,
292 A.2d 444, 447 (Pa. App. 1972). Felony murder and party-
to-a-crime liability overlap and jurors familiar with the
term “felony murder” from television or newspapers
may have thought that Wisconsin law defines it very
narrowly and that what they thought was felony murder
was intended to be covered by the mysterious reference
to “natural and probable” consequences in the party-to-a-
crime statute. The first-degree murder instruction in-
vited such a misunderstanding because it allowed the
jury to convict Perry if he “or someone else” intended the
death—while the instruction on felony murder contained
no such allowance.
We must in evaluating a state prisoner’s application for
federal habeas corpus defer to the state courts’ judgment
if reasonable. 28 U.S.C. § 2254(d)(1); Williams v. Taylor,
529 U.S. 362, 411 (2000); Dixon v. Snyder, 266 F.3d 693,
No. 01-3867 29
700 (7th Cir. 2001). The judgment that Perry received ef-
fective assistance of counsel was not reasonable, and so
Perry is entitled to a new trial.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-97-C-006—9-23-02
|
638 F.Supp. 1245 (1986)
UNITED STATES of America
v.
Frank WAXMAN.
Crim. No. 83-00101.
United States District Court, E.D. Pennsylvania.
July 15, 1986.
Linda Dale Hoffa, Asst. U.S. Atty., Philadelphia, Pa., for plaintiff.
John Rogers Carroll, Philadelphia, Pa., for defendant.
MEMORANDUM AND ORDER
DITTER, District Judge.
Dr. Frank Waxman was an art connoisseur and had what some considered to be an excellent private collection. Unfortunately, he had accumulated it by theft from various art dealers across America over a number of years. Eventually, he was caught, did time on state charges, and pleaded guilty before me to receipt of stolen property and interstate transportation. Largely because I believed his thefts may have stemmed from long standing psychiatric problems and use of prescription drugs, I placed Dr. Waxman on probation.
*1246 Among others, I imposed the following as a condition of probation:
He shall not profit financially or through the receipt of any property from the sale of any TV or radio scenario, nor shall he cooperate with any writer or author in the preparation of any such work if any member of his family or any friend might profit thereby. He is not to profit from the sale of any book or magazine article prepared about his life or experiences, nor shall he cooperate with any author if any member of his family, or any friend might profit thereby. The intention of this condition is to preclude the defendant from obtaining any profit or financial benefit or in any way capitalizing upon his art theft or subsequent treatment and this provision shall be construed broadly.
Dr. Waxman now seeks to have his sentence modified and that condition of probation set aside. He argues that it deprives him of rights guaranteed by the First and Fifth Amendments to the Constitution. He also contends that the probation condition is purely punitive in character because it neither fosters his rehabilitation nor protects the public. I disagree.
I am not impressed by Dr. Waxman's argument that I am depriving him of rights guaranteed by the First and Fifth Amendments to the Constitution. Dr. Waxman may speak to whom he wishes or write what he wants. The only restriction is that he not be paid for doing so. Dr. Waxman may have lost a property interest, but it was not without due process of law. Convicted felons frequently are deprived of property (and liberty) interests.
Neither am I persuaded that this condition is contrary to the purpose of probation. When satisfied that the ends of justice, the best interests of the public and the defendant, will be served by probation, the district court judge may suspend the imposition of sentence and place a defendant on probation, upon such terms and conditions as the court deems best. 18 U.S.C. § 3651. Probation conditions are valid so long as they are reasonably related to the ends of probation. United States v. Abushaar, 761 F.2d 954 (3d Cir.1985).
I imposed this restriction on Dr. Waxman, not to punish him, but to restrict his ability to profit from his own wrongdoing. Had I wanted to punish him, I could have sent him to prison for a long, long time. Certainly, it is in his own interest for Dr. Waxman to learn that society will neither tolerate criminal behavior nor permit the criminal to profit from it when he can be prevented from doing so. Secondly, it is also in the interest of other members of society to learn by example that not only may they have to pay the piper but that they cannot expect the piper to pay them for their memoirs. I do not understand how Dr. Waxman's profiting for his misdeeds will make other persons who hear of them more reluctant to take drugs and steal objects of art than if Dr. Waxman is unpaid. Moreover, one of the purposes of the Comprehensive Crime Control Act of 1984 was to reduce the profit motive for criminal behavior by permitting heavy fines, allowing forfeitures,[1] and calling for restitution.
There is another reason why I am refusing to grant Dr. Waxman's motion. The conditions of probation, including the one in question, and my feelings with regard to them, were discussed with Dr. Waxman's attorney on March 15, 1985, approximately six weeks prior to the time that Dr. Waxman was placed on probation and the condition imposed. Counsel was told to inform Dr. Waxman of what I contemplated *1247 doing. That would have been the time to raise any question with me about this condition. Nothing was said and I had no reason to believe that Dr. Waxman felt there was anything wrong with my announced intentions.
In short, I remain convinced that the sensational crime should not be glamorized by the inevitable book, the barnstorming trip from city to city, the press conferences and autograph sessions, the appearances on TV, the trumpet blast announcing the paperback edition, and finally, with any luck at all, a motion picture. Dr. Waxman profited immensely from what he did until he was caught. I see no reason why he should profit even more handsomely after he has been caught. Because I believe the probation-condition is rehabilitative in nature, deterrent in effect, and reasonable, I will refuse Dr. Waxman's petition to modify.
NOTES
[1] Two provisions of the Crime Control Act, while not authority for the condition I imposed, are at least suggestive of its merits. Where physical harm has resulted, a defendant may be required to forfeit the proceeds received from the depiction of the crime in a movie, book, magazines, etc. 18 U.S.C. § 3671. [Effective date 30 days after Oct. 12, 1984]
The second provision worth noting is found in 18 U.S.C. § 3563(b)(6). As a special condition of probation an individual can be required to refrain from engaging in a special occupation bearing a reasonably direct relationship to the conduct constituting the offense.
|
351 Mich. 177 (1958)
88 N.W.2d 518
BARTLETT
v.
MELZO.
Docket No. 30, Calendar No. 47,098.
Supreme Court of Michigan.
Decided March 4, 1958.
Harold J. Egloff, for plaintiff.
Stanton, MacKenzie, Cartwright & Walker (H. Monroe Stanton, of counsel), for defendants.
SMITH, J.
This case involves another pedestrian and another automobile. The pedestrian, Charles H. Bartlett, was 76 years of age. He was crossing Hess street (which runs east and west) at the Prescott street unmarked crosswalk in the city of Saginaw. He was under the dual protection of the Commandment, "Thou shalt not kill," and such vestiges of section 169 of the ordinance of the city of Saginaw as remained effective after our decision in Moldenhauer v. Smith, 311 Mich 265.
Mr. Bartlett almost made it. His foot was on the curb when he was struck and killed. The automobile involved was driven by defendant Theodore Melzo. It was engaged in a contest of sport, skill, and horsepower familiar to all of us. When the traffic light (at Robinwood street, a city block west of the Prescott street crosswalk) changed from red to green, defendant and an unidentified driver, both of whom had been waiting at the light, took off "like a couple of horses at the starting post." When they started, we are told, "it seemed to raise the front of their cars and the back of their cars seemed *179 lower (indicating with hand). They started off at quite a rate of speed." As they proceeded towards the decedent they were, it was testified, "going awfully fast from the start." Witness Eischer, who was behind defendant Melzo's car at the traffic light, testified that "by the time I was 1/2 way between Prescott and Robinwood streets this car (Mr. Melzo's car) had already hit Mr. Bartlett. I was going 20 to 25 miles per hour. The other 2 cars had gone twice the distance I had gone and had started up at the same time." As they proceeded towards the decedent they were "jockeying for position," back and forth. "Number 2 (Mr. Melzo's) car would get a short distance ahead and number I would catch up and so on down to the time of impact." During all of this time the decedent was in the crosswalk. (He had reached the center of Hess street when the traffic light a block away changed.) Three hundred feet from the light, only 50 feet from decedent, the outcome of the race was still in doubt, the cars then being "neck and neck." We cannot record the conclusion of this race in the manner traditional to sporting contests, naming the victor, acclaiming his skill, and hailing his triumph, for in this kind of race there is no victor. The loser, however, is clearly identified. He "had already reached the south curb with 1 foot when he was struck and he spun over and flopped down and that was it." Thus, flopping in the dirt in a public street, ended 76 years of life.
But, we are told, the jury's award of damages to the administratrix of the estate of the deceased must be reversed. He was, it is urged, guilty of contributory negligence as a matter of law. Do our decisions furnish support for this contention?
The appellant-defendants' position may best be stated in their own words:
*180 "It is conceded that plaintiff's decedent could proceed with safety to the center line of Hess street inasmuch as the testimony fails to establish that at the time he did so there was any traffic approaching from the east. There is testimony to the effect that such traffic did appear while plaintiff's decedent was at the center line of Hess street. It is the contention of the defendants that if the plaintiff's decedent made an observation upon reaching the center line of Hess street as to traffic approaching from the west, that such observation was improper, or that his subsequent actions in light of that observation were such as to make him guilty or contributory negligence as a matter of law. If it be shown that the observation was not made of eastbound traffic when plaintiff's decedent was at the center line, then defendants contend that such a failure would make plaintiff's decedent guilty of contributory negligence as a matter of law. If the plaintiff's decedent ventured into the southerly eastbound lane of Hess street, being unable to observe what traffic was approaching, then such action would also constitute negligence as a matter of law."
Specifically, in support of the above, appellants urge that the center line was a place of safety, and we are cited to Moldenhauer v. Smith, 311 Mich 265, 270, wherein it was held, as quoted by appellants: "Plaintiff was guilty of contributory negligence, as a matter of law, in leaving a place of safety and proceeding * * * in the path of a rapidly-approaching automobile."
Is the center of the street a place of safety? Assuming it is such, is it negligent for a pedestrian to leave this haven and make for the farther side of the street? The questions presented bring squarely before us a consideration of the relative rights and duties between a motorist and a pedestrian caught in the middle when a traffic signal changes. We are not dealing with the pedestrian who steps off the *181 sidewalk under conditions that prove immediately to be perilous. That situation has its own unique problems. Here the pedestrian is committed to the journey when the light changes. If he stays where he is, he is exposed to danger. The center of the street is no sanctuary. If he tries to return, his way may be blocked. He exposes himself, moreover, to the peculiar hazards attending any reverse movement. Can we say, as a matter of law, that the pedestrian who holds his course is proved guilty of negligence if he fails to make it, if he is struck down while still in the street?
At the common law, unaided by statute or ordinance, it was said that the rights of pedestrians and motorists at crossings were equal and that neither had a superior right over the other. Molda v. Clark, 236 Mich 277. This being the case, in order to avoid being negligent it was the duty of each to exercise due care, i.e., the care of a reasonably prudent person under the same or similar circumstances. The fact that the standard of care for each was the same does not mean, however, that the amount of care necessary to be exercised by each was the same. The absolute measures of care exercised by each party, the physical requirements of caution, are vastly different because of their differing capacities to injure. The amount of care exercised in attaining the due-care standard varies in proportion to the apparent risk. Here the parties are in positions of gross inequality. The motorist has under his control an instrumentality capable of inflicting great bodily harm upon relatively slight impact, and at slight risk to himself (Patterson v. Wagner, 204 Mich 593, 600). These are "circumstances" requiring the driver to exercise an extreme amount of care, for it is axiomatic that care must be exercised in direct proportion to one's capacity to injure. A messenger carrying a lead pencil through a crowded room is *182 subject to the same standard of care as one carrying an open razor; he who levels a loaded machine gun at a crowd conforms to precisely the same standard as one who levels a loaded water pistol. The standard for all is the same, the standard of due care under the circumstances. Yet just as there is an infinite variety of circumstances, so there is an infinite variety in the actual amount of care to be exercised by each lest he be held negligent.
This aspect of the law of negligence has not received the emphasis demanded, by its significance, in the motorist-pedestrian cases, and this is one reason why the common-law rule of reciprocal rights and duties has not sufficed to protect pedestrians from the hazards of ever-increasing automobile traffic. Despite occasional protests by jurists that a pedestrian crossing a street is not required to "continuously swivel his head from side to side" (Campbell v. Balis, 380 Pa 245, 248 [110 A2d 254]), that "`pedestrians have not yet become outlaws at street crossings'" (WIEST, J., quoting in Petersen v. Lundin, 236 Mich 590), the toll continues to mount. We look with horror upon ancient rites involving human sacrifice. We take pride in our progression from the sacrifice of the first-born son, to the lamb, then to the abolition of sacrifice entirely, yet historians of the future may well note that it was a common sight in our cities in this era to observe the citizens of the community running for their lives, literally, if caught in the center of the street by a changing traffic light. Those not so nimble as others perish in greater numbers. The decedent whose case is before us was 76 years of age. Whether he was able to run or not the record does not disclose. When asked if the decedent began to run when the traffic started moving, as he was leaving the center of the road, a witness replied that "the first couple of steps *183 he walked." The next question: "Did he run after that? A. He speeded it up." Not, certainly, enough.
The contest between motorist and pedestrian can have but one outcome and the toll of dead and injured in this unequal contest has become a national scandal. The "equal and reciprocal rights" doctrine of the common law, as it has been interpreted by the courts, obviously has not served to protect pedestrians. The legislative bodies have sought other solutions, imposing even more stringent duties upon motorists, these being, in the words of the Maryland court (Webb-Pepploe v. Cooper, 159 Md 426, 430, 431 [151 A 235]) "legislative recognition of the danger of vehicular traffic to pedestrians in passing across the streets of cities and towns, and an effort to diminish the number of injuries and fatalities from this source by giving the pedestrian the right-of-way at street crossings in towns and cities." One such ordinance we have before us in the case at bar. The city of Saginaw has provided as follows with respect to pedestrians and vehicles at crosswalks in that city:
"Pedestrians' right-of-way at crosswalks
"169.1. Where traffic control signals are not in place, or in operation, the driver of a vehicle shall yield the right-of-way, slowing down or stopping if need be, to so yield, to a pedestrian crossing the roadway within any marked crosswalk or within any unmarked crosswalk at an intersection, except as otherwise provided in this article.
"169.2. Whenever any vehicle is stopped at a marked crosswalk or at any unmarked crosswalk at an intersection to permit a pedestrian to cross the roadway, the driver of any other vehicle approaching from the rear shall not overtake and pass such stopped vehicle."
Ordinances similar to and exactly like that quoted have been before our Court in the past. The case of Moore v. Noorthoek, 280 Mich 431, involved a plaintiff *184 pedestrian injured on a crosswalk in the city of Grand Rapids. She is described as "a woman of mature years" who had (p 437) "made a dash to get away from the car but was hit." An ordinance in effect in the city of Grand Rapids at the time stated as follows (p 437):
"`The operator of a vehicle shall yield the right-of-way to a pedestrian crossing the roadway within any marked crosswalk or within any unmarked crosswalk at the end of a block, except at intersections where the movement of traffic is being regulated by police officers or traffic signals.'"
Verdict and judgment having been for plaintiff below, defendants appealed to this Court, alleging (in part) error in the court's instructions as follows (p 435):
"`If the defendant failed to bring his car under such control on approaching this intersection in question, that is, bring it under control where he could bring it to a stop within the assured clear distance ahead, if he failed to do that upon approaching this intersection, then that would constitute negligence on the part of this defendant. As I have already stated to you, it is the duty of one operating an automobile to operate it within the assured clear distance ahead at such speed that they can stop it within the assured clear distance ahead, so that they may avoid striking objects or persons upon the highway. * * *
"`I will say to you further, as a matter of law, that this plaintiff in crossing this intersection, after she had entered the intersection and proceeded across the center of the intersection, and was approaching the west half and about to cross the west half, that it was the duty of this defendant, traveling from the north and on the westerly side of this highway, to yield the right-of-way to this pedestrian; in other words, it was his duty to see her as she was crossing in the manner in which she claims understand he *185 claims she was not crossing there but if she was crossing as she claims, it was his duty to see her and to yield the right-of-way to her and avoid striking and running into her.'"
This Court, speaking through Mr. Justice SHARPE, held that (p 438):
"She had a right to assume that defendant would drive the car in compliance with the city ordinance which gave plaintiff the right-of-way at such crossings and whether plaintiff exercised reasonable care under the circumstances was a question of fact for the jury."
And, also, that (pp 439, 440):
"In the case at bar the defendant admits that there was nothing to obstruct his view of the crossing and if plaintiff was crossing from east to west as she claims, then it was defendant's duty to see what was plainly to be seen and to yield to her the right-of-way in conformity with the city ordinance relating thereto, moreover, under such circumstances it was the duty of defendant to avoid running into and striking plaintiff. We find no error in the charge of the trial court as applied to the facts in this case."
The above charge properly stated the law of this jurisdiction upon its facts. With this case, however, must be compared the later case of Moldenhauer v. Smith, 311 Mich 265. That case, like this, involved a pedestrian in the city of Saginaw. She was using a crosswalk at the intersection of East Genesee avenue and Park street. It was another of these jump and sprint cases. The opinion states (p 266) that, "As she was about to reach the northerly curb she observed the Smith car bearing down on her, attempted to run and jump out of the way, but was struck." The same ordinance was in effect as we have before us in the case at bar. A jury verdict having been returned to defendant, plaintiff *186 appealed, claiming, in part, error in instructions to the jury respecting the relationship between the ordinance and the common-law doctrine of contributory negligence. The trial court had charged, in part, that (p 268):
"`If you find that plaintiff took a chance in crossing in front of defendant's vehicle and was injured because of it, the plaintiff would be guilty of contributory negligence and your verdict should be of no cause of action in favor of the defendant.'"
We continue from our opinion (pp 268, 269):
"It is claimed that this portion of the charge made it impossible for plaintiff to recover under any circumstances, in that:
"`People take chances every day in practically everything they do and the crossing of a street in a downtown business district having heavy traffic is always taking a chance in the common usage of that word.'
"It is further urged that this portion of the charge held, in effect, that plaintiff was guilty of contributory negligence as a matter of law. Plaintiff claims support for her argument in this respect by the trial judge's statement in denying a motion for new trial, where, in recounting the facts pertaining to plaintiff's conduct, the trial judge said:
"`The court was not given the opportunity to determine the motion for directed verdict by defendant upon the question of contributory negligence, and the court feels that, under the decisions of our Supreme Court, from the facts in this case, where plaintiff continually watched the automobile approaching a distance of 92 feet, while she traveled a distance of 26 feet, the car traveling at the rate of 30 miles an hour, that the car and she reached the same point at the same time; and that, if plaintiff had been watching the automobile, as she definitely insists in her own testimony that she did, then she certainly should have seen her danger and avoided *187 it. Such conduct on the part of plaintiff is so clearly careless and in disregard of ordinary watchfulness in traffic that this court is convinced that she is guilty of contributory negligence, as a matter of law.'"
Our court concluded as follows (p 270):
"In the instant case the conclusion is inescapable that plaintiff was guilty of contributory negligence, as a matter of law, in leaving a place of safety and proceeding into a zone of danger in the path of a rapidly-approaching automobile. Since the trial judge would have been fully justified in directing a verdict for defendant as a matter of law, the claimed errors in the charge become inconsequential."
The above language stems from an erroneous interpretation of the ordinance and it is expressly disapproved. If the ordinance before us is to have any meaning at all it entitles the pedestrian to positive preferential treatment at crosswalks. The care required of the motorist, under the terms of the ordinance, goes beyond the common-law rule of ordinary care, for even without the ordinance the pedestrian is entitled to that. If, in the Moldenhauer Case, as the trial court stated, the plaintiff watched the automobile approaching for 92 feet, its driver also watched (or should have watched) her for the same 92 feet. Knowing she was in the crosswalk the ordinance required him to stop, "if need be," so as to yield the right-of-way to her. Yet he collided with her within the intersection and we said that, upon these facts, she could be held contributorily negligent as a matter of law. Why? Was not the driver under a positive mandate to stop, if necessary, before entering the intersection while she was there? Was she not entitled to rely upon his obedience to the law? Does such a holding give a pedestrian the right-of-way demanded by the ordinance? We say not.
*188 We do not sit to render nugatory the efforts of our people to protect their lives and limbs. The ordinance places upon the motorist certain affirmative duties: He must approach a crosswalk at such moderate speed as to be able to yield the right-of-way to a pedestrian crossing therein, and be able to bring his car to a complete stop, if necessary, to accord the pedestrian his right-of-way. This is not a mere "technical right-of-way" as the successful defendant in the Moldenhauer Case, supra, urged, which language (along with "this so-called right-of-way") the Moldenhauer trial court employed in its charge to the jury. On the contrary, these are mandatory requirements, designed to abate the ever-mounting slaughter and we shall so interpret them. It is conceivable, of course, that under extreme circumstances a pedestrian on a crosswalk even under this ordinance might be guilty of contributory negligence. Knowing something of the vagaries of human conduct we are not prepared to say that anything is impossible. Thus a pedestrian may court disaster under the influence of strong emotion, natural, or artificially induced. But, in its very nature, such a situation would have to be most unusual. Speaking in general and normal terms it ill becomes a motorist who has been forbidden to occupy the pedestrian's space at the instant of collision to turn upon the injured pedestrian with the reproach, "It was your negligence that caused this." If the motorist had obeyed the ordinance he would never have reached the crosswalk in the first place, would have had no opportunity to strike, and then to scold, his victim (cf., Bailey v. Geddes, [1938] 1 KB 156). Why? Because he was required to stop, if necessary, in order to yield the right-of-way.
Under the mandate of the ordinance now before us it is clear that decedent Bartlett was not guilty of contributory negligence as a matter of law. Moreover, *189 entirely apart from statute or ordinance, we are impelled to observe that the testimony, viewed in the light most favorable to plaintiff, does not justify a holding that the decedent was guilty of contributory negligence as a matter of law. Appellants argue to us certain allegations of fact, the accuracy of which, challenged by appellee, (i.e., decedent attempted at one time to regain the north curb, that he was hidden from view before crossing in front of the unidentified car) was settled by the jury's verdict. Under the favorable view it appears that (1) before the decedent left the curb he waited for 2 cars to pass and looked both ways; (2) he walked across in a straight line and when the light a block away changed he was in the middle of the street; (3) after the light change he continued to go south, turning his head to his right, or west, obviously deciding that it was safe to proceed. At this point he had the right to assume that oncoming automobiles would approach at a lawful rate of speed. (The defendant driver before us admitted that he was exceeding the speed limit.) (4) After decedent left the center line "he walked pretty fast," apparently aware of the oncoming traffic. He was then struck and killed. We cannot say there was contributory negligence as a matter of law in this situation.
Affirmed. Costs to appellee.
BLACK, EDWARDS, and VOELKER, JJ., concurred with SMITH, J.
DETHMERS, C.J., and CARR and KELLY, JJ., concurred in the result.
KAVANAGH, J., took no part in the decision of this case.
|
Order Michigan Supreme Court
Lansing, Michigan
June 24, 2014 Robert P. Young, Jr.,
Chief Justice
Michael F. Cavanagh
Stephen J. Markman
148842 Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
David F. Viviano,
PEOPLE OF THE STATE OF MICHIGAN, Justices
Plaintiff-Appellee,
v SC: 148842
COA: 305426
Saginaw CC: 10-035084-FC
DEVON SHIVERS,
Defendant-Appellant.
_________________________________________/
On order of the Court, the application for leave to appeal the January 28, 2014
judgment of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the questions presented should be reviewed by this Court.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
June 24, 2014
s0616
Clerk
|
11th Court of Appeals
Eastland, Texas
Opinion
Ramiro Rodriguez Cruz
Appellant
Vs. No. 11-03-00158-CR -- Appeal from Dallas County
State of Texas
Appellee
The trial court found Ramiro Rodriguez Cruz guilty of indecency with a child and sentenced
him to six years imprisonment. Appellant claims in two issues that the evidence was legally and
factually insufficient to show physical sexual contact and that the State failed to prove that appellant
intended to engage in sexual contact with the child. We affirm.
TEX. PENAL CODE ANN. § 21.11(a)(1) (Vernon 2003) provides that a person commits an
offense of indecency with a child if, with a child younger than 17 years, the person engages in sexual
contact with the child or causes the child to engage in sexual contact.
In reviewing claims of legal sufficiency, we review all of the evidence in the light most
favorable to the verdict to determine whether any rational trier of fact could have found the essential
elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307 (1979); Jackson
v. State, 17 S.W.3d 664 (Tex.Cr.App.2000). In order to determine if the evidence is factually
sufficient, we must review all of the evidence in a neutral light and determine whether the evidence
supporting guilt is so weak that the verdict is clearly wrong and manifestly unjust or whether the
evidence contrary to the verdict is so strong that the beyond-a-reasonable-doubt burden of proof
could not have been met. Zuniga v. State, No. 539-02, 2004 WL 840786 (Tex.Cr.App. April 21,
2004); Ross v. State, 133 S.W.3d 618 (Tex.Cr.App.2004); Vasquez v. State, 67 S.W.3d 229, 236
(Tex.Cr.App.2002); Cain v. State, 958 S.W.2d 404 (Tex.Cr.App.1997); Clewis v. State, 922 S.W.2d
126 (Tex.Cr.App.1996). Due deference must be given to the jury’s determination, particularly
concerning the weight and credibility of the evidence. Johnson v. State, 23 S.W.3d 1 (Tex.
Cr.App.2000). The jury is the exclusive judge of the witnesses’ credibility and of the testimony’s
weight. See Whitaker v. State, 977 S.W.2d 595, 598 (Tex.Cr.App.1998), cert. den’d, 525 U.S. 1108
(1999).
The loss prevention officer at Wal-Mart observed appellant and the victim rubbing each
other’s testicles and penises. The officer testified that the two were in adjoining stalls in the men’s
bathroom at Wal-Mart. The custom service manager of the Wal-Mart testified that he saw an erect
penis “coming out from underneath the stall” where appellant was. The 13-year-old victim testified
that appellant “grabbed” the victim’s genitals and told him to touch appellant’s genitals. The victim
testified that he touched appellant’s genitals for five minutes.
Despite the testimony of the two eyewitnesses and the victim, appellant argues that the victim
testified that he stayed on the toilet seat in his stall and, therefore, that sexual contact was impossible.
The victim testified that appellant’s kneeling made the sexual contact possible. The victim
demonstrated his position on the toilet and testified that he moved closer to appellant when appellant
told him to. The State introduced a diagram and numerous photographs of the restroom to expand
on this testimony. The victim did contradict his written statement describing his position in the stall,
but he did not contradict his testimony that he touched appellant’s genitals and that appellant touched
his genitals.
Appellant claims that sexual contact was impossible because of the victim’s position in the
bathroom stall and that the witnesses did not have a clear view of the offense. However, the jury is
the exclusive judge of the witnesses’ credibility and the testimony’s weight. See Whitaker v. State,
supra. Giving due deference to the jury’s determination concerning the weight and credibility of the
evidence, the evidence was legally and factually sufficient to support the conviction. See Johnson
v. State, supra. A rational trier of fact could have found the essential elements of child indecency
based on the testimony of the two Wal-Mart employees and the victim. Their testimony was not
outweighed by contrary evidence. Appellant’s second issue is overruled.
Regarding appellant’s other claim, the State is not required to show that appellant knew the
victim’s age to be under 17 years when the sexual contact occurred. See Johnson v. State, 967
S.W.2d 848, 850 (Tex.Cr.App.1998). Appellant’s first issue is overruled.
The judgment of the trial court is affirmed.
TERRY McCALL
JUSTICE
September 2, 2004
Do not publish. See TEX.R.APP.P. 47.2(b).
Panel consists of: Arnot, C.J., and
Wright, J., and McCall, J.
|
75 F.3d 304
ASSOCIATION OF COMMUNITY ORGANIZATIONS FOR REFORM NOW(ACORN), et al., Plaintiffs-Appellees,v.ILLINOIS STATE BOARD OF ELECTIONS, et al., Defendants-Appellants.
No. 95-3456.
United States Court of Appeals,Seventh Circuit.
Submitted Nov. 16, 1995.Decided Jan. 26, 1996.
Judson H. Miner, Jeffrey I. Cummings, Barack H. Obama, Davis, Miner, Barnhill & Galland, Chicago, IL, for Association of Community Organizations for Reform Now, Equip for Equality, Incorporated, Jacqueline Andrade, Gwendolyn Coleman, Chinetha Dixon, and Joey L. Wooden.
Thomas R. Meites, Joan H. Burger, Lynn S. Frackman, Paul W. Mollica, Meites, Frackman, Mulder & Burger, Chicago, IL, for League of Women Voters of Illinois, Catherine A. Calder, and Rene D. Luna.
Maria G. Valdez, Mexican American Legal Defense & Education Fund, Chicago, IL, Arthur Aram Baer, Puerto Rican Legal Defense and Education Fund, Inc., New York City, for League of United Latin American Citizens.
Michele M. Fox, Office of the United States Attorney, Civil Division, Appellate Section, Chicago, IL, Steven H. Rosenbaum, Samuel R. Bagenstos, Department of Justice, Civil Rights Division, Appellate Section, Washington, DC, Tricia A. Tingle, Barry H. Weinberg, Elizabeth Johnson, United States Department of Justice, Washington, DC, for U.S.
James R. Carroll, Roger Flahaven, Office of the Attorney General, Chicago, IL, Daniel N. Malato, Cara L. Smith, Office of the Attorney General, Civil Appeals Division, Chicago, IL, for defendants-appellants.
Before POSNER, Chief Judge, and EASTERBROOK and KANNE, Circuit Judges.
POSNER, Chief Judge.
1
The plaintiffs have moved to dismiss the defendants' appeal from an order of the district court on the ground that it is not an appealable order. The motion raises questions concerning federal appellate jurisdiction in the context of a major constitutional litigation. The plaintiffs had brought suit to enforce the federal "motor voter" law (National Voter Registration Act of 1993, 42 U.S.C. §§ 1973gg et seq.) against the governor and other officials of the State of Illinois, which had refused to comply with the law on the ground that it was unconstitutional. We upheld the constitutionality of the law and affirmed so much of the district court's injunction as commanded the defendants to obey it. Association of Community Organizations for Reform v. Edgar, 56 F.3d 791 (7th Cir.1995). That was last June. The district judge then scheduled monthly status hearings to monitor the defendants' compliance with the injunction. The state board of elections submitted a plan of compliance to which the plaintiffs raised three objections at the August status hearing. The judge directed the parties to brief these objections and after they did so he issued a "memorandum opinion and order" on September 6 addressing the issues. The first two objections were to regulations that the board of elections had promulgated concerning verification of the addresses of new registrants and challenged-voter forms; the third was to the plans' failure to provide for oral assistance in Spanish to prospective registrants. The judge held the regulations "invalid" as inconsistent with the motor-voter law, and with regard to the issue of oral assistance he directed the defendants "to come prepared to [address the issue] at the next status hearing." He did not, however, issue any order that purported to enjoin the regulations.
2
The defendants argue that the order is a final decision and therefore appealable under 28 U.S.C. § 1291. One of the plaintiffs, the United States, agrees that the order is appealable but believes that it is appealable not as a final decision but as an order modifying an injunction. 28 U.S.C. § 1292(a)(1). The order in fact seems to fall between two stools. It is not final in any ordinary sense of the word, since compliance proceedings continue before the district court with regard to Spanish-language assistance and no doubt other issues as well. And it does not purport to modify the injunction. It interprets the injunction, but interpretations of injunctions as distinct from modifications of them are not appealable, provided they really are interpretive, and do not change the meaning of--that is, modify--the original injunction. Motorola, Inc. v. Computer Displays Int'l, Inc., 739 F.2d 1149, 1155 (7th Cir.1984); In re Ingram Towing Co., 59 F.3d 513, 516 (5th Cir.1995); Mikel v. Gourley, 951 F.2d 166, 168-69 (8th Cir.1991). Yet there is a felt need, reflected in the submission by the United States, for prompt definitive resolution of legal disputes arising in what may be a protracted postjudgment proceeding to bring Illinois into compliance with the motor-voter law.
3
The position of the United States is untenable. To modify an injunction is to change it. The injunction has not been changed. It commanded Illinois to comply with the motor-voter law; it still commands that. An injunction that merely commands compliance with a statute (in order to attach the sanction of contempt to continued noncompliance) is as vague as the statute, and invites interpretation. Whether a requirement of verifying a new voter's address violates the statute and consequently the injunction as well is an archetypal issue of interpretation and the resolution of it clarifies, it does not modify, the injunction. Cf. Major v. Orthopedic Equipment Co., 561 F.2d 1112 (4th Cir.1977). A misinterpretation would be a modification, because it would change the meaning of the original injunction. Wilder v. Bernstein, 49 F.3d 69, 72 (2d Cir.1995). But in a case such as this, where the injunction is vague (though not so vague as to be unenforceable by contempt proceedings and thus a nullity), supplementary rulings particularizing its requirements are unlikely to be challengeable as misinterpretations.
4
Had the judge couched his rulings as supplementary injunctions, they would be appealable even if they did no more than make explicit what had been implicit in the original, vague injunction. Injunctions are appealable under section 1292(a)(1) whether they are primary or supplementary. Eli Lilly & Co. v. Medtronic, Inc., 915 F.2d 670, 673 (Fed.Cir.1990). The statute makes no distinction.
5
The defendants' position on appealability, as opposed to that of the United States, depends on the uncertain meaning of "final decision" in postjudgment proceedings. The injunction that we modified and affirmed in our previous decision was a final judgment--so when are subsequent orders "final"? The simplest and most sensible approach, one that we have expressly endorsed, most recently in Resolution Trust Corp. v. Ruggiero, 994 F.2d 1221, 1224-25 (7th Cir.1993), is to treat the postjudgment proceeding as a free-standing litigation, in effect treating the final judgment as the first rather than the last order in the case. Our decision last June kicked off a postjudgment proceeding that will end, unless the parties reach an agreement, with a judicial order setting forth the steps that Illinois must take to comply with the injunction that it obey the motor-voter law. That order will be appealable as a final decision under section 1291; interim orders will be appealable only if they meet the criteria for the appealability of interlocutory orders. The order issued by the district judge in September is clearly one of the interlocutory orders. It is not appealable, because it does not fit into the pigeonhole for orders modifying injunctions or into any of the other pigeonholes for interlocutory appeals. See Major v. Orthopedic Equipment Co., supra, 561 F.2d at 1115.
6
We do not want to be besieged by successive appeals in injunctive proceedings. The position of the defendants, if accepted, would make virtually all postjudgment orders immediately appealable. If the board of elections wants to stick to its guns, it can refuse to submit a compliance plan that omits the regulations that the district judge believes invalid. Although an order to submit a plan of compliance, like a discovery order, is not an injunction, Mercer v. Magnant, 40 F.3d 893, 896 (7th Cir.1994), the refusal to obey such an order might be punishable as a contempt, and if so the refuser could then obtain appellate review of the order by appealing from the judge's imposition of a sanction for contempt. Cobbledick v. United States, 309 U.S. 323, 328, 60 S.Ct. 540, 542-43, 84 L.Ed. 783 (1940); In re Establishment Inspection of Skil Corp., 846 F.2d 1127, 1129 (7th Cir.1988). Were there any doubt about the mandatory character of the judge's order, he could embody it in a mandatory injunction, which would be appealable without the interim steps of defiance and sanction. Such severe measures are unlikely here despite the judge's evident exasperation with what he regards as the state's foot-dragging. Comity has its claims. Far more likely would it be for the judge to devise his own plan of compliance and order the state to put it into effect. At that point there would be a final decision from which the state would be entitled to appeal.
7
The United States points out, sensibly as it seems to us, that the dispute over appealability would have been avoided had the district judge, instead of issuing "orders" invalidating state regulations, simply directed the state to submit a compliance plan and then rejected it as noncomplying in various particulars. There would be no basis for arguing that the rejection was an appealable order. But this is, from a practical standpoint, what the judge did; and the fact that he used inapt words ought not convert an unappealable ruling into an appealable order.
The appeal is therefore
8
DISMISSED.
|
825 F.2d 413
Magallanes (Jose Francisco)v.Perez Ranches, Inc., d/b/a P.R.I. Sales Co.
NO. 85-2920
United States Court of Appeals,Ninth Circuit.
AUG 05, 1987
1
Appeal From: D.Ariz.
2
REVERSED AND REMANDED.
|
144 U.S. 476 (1892)
CHATEAUGAY ORE AND IRON COMPANY
v.
BLAKE.
No. 189.
Supreme Court of United States.
Argued March 4, 7, 1892.
Decided April 11, 1892.
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.
*479 Mr. Edmund Wetmore and Mr. Frank E. Smith for plaintiff in error.
Mr. R.D. Mussey and Mr. L.E. Chittenden for defendant in error.
*482 MR. JUSTICE BREWER, after stating the case, delivered the opinion of the court.
The question in this case is whether or not the plaintiff fully performed his contract of March 26, 1886. The contract stipulated for payment of one-half of the price before, and of the other half when the machinery was completed and successfully running. Now, in addition to the full payment of the one-half, substantially three-fifths of the other was paid in three successive payments; the first within one and the last not until six weeks after the commencement of actual operations. There is significance in these latter payments. While not conclusive on the company, they indicate that in its judgment, for a while at least, the plant fully satisfied all the conditions of the contract, and are properly to be considered in determining the merits of the defence made to this action. *483 That defence is, that the plant was improperly and unskilfully constructed, of weak and defective parts, of material not adapted to the work which it was designed to perform, and that its actual working capacity did not exceed 350 tons a day. The answer, besides its defensive allegations, contained a counter-claim.
The first matter we notice is the alleged error in the testimony of Charles S. Brown, who, from certain account books which he presented, was permitted to testify as to the actual working of the plant between October 18 and November 7, giving in that testimony the actual hours the plant was working, the number of tons crushed, the hours of delay, and the causes therefor. This witness was sent by Mr. Blake to superintend the erection of the plant, to watch its workings when completed, and to make any needed repairs, improvements or changes. At his suggestion, after the plant commenced work, the defendant's superintendent directed the foremen of the mill to keep these books. The foremen, of whom there were four, generally made the entries on the books, though sometimes Brown did the writing at their dictation. The entries were made daily; at least, that was the intention and the general practice. The amount of ore crushed, as disclosed by these books, corresponded within a few tons with the amount testified to by the officers of the defendant company. Brown, himself, was present at the mill most of the time during the day, and had a general knowledge of the accuracy of these entries, so far as respects the work during that time. We think the testimony was competent. The books were kept by the direction of the defendant's superintendent, and the entries made by its foremen. They were intended to be, and in fact generally were, contemporaneous with the matters stated; and their substantial accuracy is corroborated by the personal knowledge of the witness, and the near coincidence of the general result with that vouched for by the defendant. They may not have been account books of the defendant, in the technical sense of the term, such as are generally admissible against a party, but they were memoranda made under the direction of the defendant for the purpose of preserving a *484 record of certain facts, and made under such circumstances as to be worthy of a measure of credence as against it.
A second matter is this: The general manager of the defendant was asked what, in his judgment, was the daily capacity of the mill. This question was objected to on the ground that the witness was not shown to be competent to testify as an expert, which objection was sustained. How much knowledge a witness must possess before a party is entitled to his opinion as an expert is a matter which, in the nature of things, must be left largely to the discretion of the trial court, and its ruling thereon will not be disturbed unless clearly erroneous. Stillwell & Bierce Mfg. Co. v. Phelps, 130 U.S. 520; Montana Railway Company v. Warren, 137 U.S. 348; Inland & Seaboard Coasting Co. v. Tolson, 139 U.S. 551. This witness testified that he had been general manager of the defendant company for six years; and that he was at the mill as often as twice a month, and usually went there once a week. He does not appear to have been a practical machinist, or to have had any special knowledge of mining or crushing machinery. He was not superintendent of the workings of the mine or of the machinery, and does not claim to have been there regularly, or, indeed, oftener than once a week, and, as general manager, was apparently more employed in the financial and outside business affairs of the company than in the details of the mining or the practical workings of the machinery. We think the ruling of the trial court in excluding his opinion was right; at any rate, it cannot be adjudged clearly erroneous.
Another matter is also complained of, and to a clear understanding of this question the course of the trial must be stated. The plaintiff opened by proving the construction of the mill, and, in a general way, that it had the capacity of 600 tons daily, and also the payments by the defendant. He then rested, and the defendant introduced testimony to show that the mill was not of the stipulated capacity, and explaining the circumstances of the subsequent payments. This included evidence of the actual workings of the mill from the 1st of October, 1886, to the 1st of January, 1888, the difficulties *485 that were encountered in its workings, the stoppages, what was done on such occasions, and the efforts to remedy supposed defects, as also the opinions of competent witnesses as to its capacity. In other words, it went fully into the matter of the actual workings of the mill, and its alleged incapacity to do the stipulated amount of crushing. In rebuttal, plaintiff called the witness Brown, who gave the testimony heretofore referred to from the memorandum books. It appeared from his testimony that the books had been kept from October 18 till he left, in March following. He had made out from them a statement of the facts respecting the workings of the mill from October 18 to the 7th of November, which he had forwarded to the plaintiff, and the details of that statement, as verified by the books, was the sum and substance of his testimony. After he had finished, and the plaintiff had rested in his rebuttal, the defendant called a witness named Hall, who testified that he had examined the books, and he was then asked what the average run per hour was for the months of November, December and January, separately, as shown by those books. This testimony was objected to and ruled out, and of this defendant now complains. We think the ruling of the court was right. If the defendant had a right after the plaintiff had closed his case in rebuttal to introduce any testimony at all, such right was limited to the new matters brought out in the rebuttal; and while the fact of the existence of these books, and that they were kept for several months was then disclosed for the first time, the only matters therefrom presented to the consideration of the jury were those transpiring between October 18 and November 7. As to those matters, the witness Hall was given full liberty of testifying, and that certainly was as far as the defendant's rights extended. These books were its own books; at least, made by its own employés under the direction of its superintendent. It did not offer them when it was making its defence, and the fact that certain portions of them are brought to the attention of the jury on plaintiff's rebuttal did not entitle it thereafter, and after the plaintiff had finally closed his testimony, to present the whole matter of these books in evidence.
*486 Still another matter is this: Defendant called as a witness Smith M. Weed, who testified that he was a lawyer, but not in actual practice, and had not been for eight or ten years; that he was one of the defendant's directors; that he was interested in mining iron ore; and that that had been his principal business and taken most of his time for the past twenty years. He was then asked this question: "What is understood by a day in the iron mining business?" the defendant's counsel saying that he offered to prove the independent fact that a day means two shifts of ten hours each in iron mining. This testimony was offered for the purpose of interpreting the stipulation in the contract guaranteeing a capacity of 600 tons daily. In other words, the defendant sought to prove by this that the contract was for a mill capable of crushing 600 tons in twenty hours, instead of twenty-four hours. This testimony was objected to, and the ruling of the court was stated in these words: "I do not think that it is admissible unless you propose to show that that local custom was known to both contracting parties." Evidently the court understood that a local and not a general custom was sought to be proved. It is true the question is general in its terms; but for some reason, not altogether apparent perhaps from the course of the testimony of this witness the court understood the question to be directed to a merely local usage, to wit, that obtaining in the mine of which the witness had been speaking. If it was such local usage, the court was right in holding that it could not affect the meaning of the terms used in the contract unless known to both parties. Of a custom prevailing generally there may be a presumption of knowledge; and the testimony might have been competent without anything directly bringing home knowledge of it to the plaintiff. If the court misunderstood the scope of the question, counsel should have corrected the misunderstanding at the time; but, simply noting an exception, they passed on to a further and different examination. They were notified that the court was ruling on an offer to prove a local custom. If that was not what they sought to prove, they should then have stated the fact. Saying nothing, it must be held that *487 the court properly interpreted the scope of the offer, and it will not do now to say that the language of the question is broad and comprehensive, and that the court ruled out evidence of a general custom and understanding in the mining business as to the meaning of a common word. When the general manager of the company was thereafter on the stand a substantially similar question was put to him by counsel, and an objection was sustained without any comments by the court. Of course, if that ruling stood by itself its correctness might have to be determined by all implied in the question; but in view of that which had previously passed we think it fair to hold that the court was simply continuing the ruling which it previously made, and not that it was passing upon a new and independent question.
We have been not a little embarrassed by this matter, and the question is not free from difficulty; but we think the interpretation we have given is the correct one; at all events, if not the only, it is a fair interpretation of the proceedings, and error is not to be presumed. The rulings of the trial judge are to be taken as stated by him, and not to be carried beyond his own statement unless clearly demanded by the circumstances of the case. It is worthy of note in this connection that, according to the testimony, defendant's mill during certain months worked twenty-two hours a day. And, further, that in a letter written by the general manager of the company to plaintiff, in 1881, preliminary to the contract under which the first crusher was furnished by plaintiff, the writer says: "What we want is appliances that will crush (without roasting) 200 tons of crude chunk ore in 24 hours, and stand the racket month in and month out without breakdowns and stoppages... . Now, if we can do the work we speak of (200 tons daily) and dispense with rolls it is a great desideratum." Evidently "daily" at that time was used in the ordinary significance of the term, and it would require very satisfactory testimony to show that in this later contract it was used in a different sense. We think it must be held that the court did not err in its rulings in this respect.
The final matter is concerning the instructions: To the *488 general charge no exceptions were taken. Eighteen special instructions were asked, and in respect to them the bill of exceptions states: "The court did not charge either of said requests except as he had charged. For the refusal of the court to charge in the specific language of said hereinbefore-recited requests, the defendant's counsel then and there duly excepted." In this way only is any exception taken to the matter of the instructions. But this wholesale exception is not sufficient. Connecticut Mutual Life Ins. Co. v. Union Trust Co., 112 U.S. 250; Burton v. West Jersey Ferry Co., 114 U.S. 474.
These are the only matters presented for our consideration. The judgment will be
Affirmed.
|
264 S.W.2d 250 (1953)
GENERAL DRIVERS, WAREHOUSEMEN AND HELPERS, LOCAL UNION NO. 89 et al.
v.
AMERICAN TOBACCO CO., Inc.
Court of Appeals of Kentucky.
June 2, 1953.
As Modified on Denial of Rehearing February 5, 1954.
Hardy & Logan and Robert Zollinger, Louisville, for appellants.
*251 Nelson Helm, Stites, Wood, Helm & Taylor, Louisville, for appellees.
STEWART, Justice.
Two questions are presented for determination on this appeal and cross-appeal:
1. Are the pickets around the property of the American Tobacco Company, herein referred to as "American," at 17th and Broadway Streets in Louisville, involved in primary or secondary picketing, since the strike is conducted at the same address against American Suppliers, Incorporated, herein called "Suppliers"?
2. May a driver of a common or contract carrier be compelled against his wishes by injunctive process to cross a picket line advertising a lawful strike, when the driver is a member of the same union that is conducting the strike but he is not on strike himself?
We have chosen to consider the cross-appeal, or question No. 1, first.
On March 30, 1952, Local Union No. 89 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America of the American Federation of Labor, hereinafter referred to as "Local 89" for the sake of brevity, called a strike against Suppliers and threw picket lines around four of its establishments in Louisville, viz.: A redrying plant at 9th and Magnolia Streets; an office with a small warehouse attached at 908 South 8th Street; a group of warehouses at 7th Street and Arcade Avenue; and a "stemmery" situated upon American's property at 17th and Broadway Streets. Suppliers is a subsidiary of American, but it is not a party to this appeal.
It is the picketing on all sides at the last mentioned location that is the bone of contention. The stemmery is situated on ground owned by American and is completely surrounded by American's cigarette factory, its auxiliary structures and its fences. American maintains that its main gates are on Broadway and that they are not and have never been used for ingress and egress of either personnel or materials of Suppliers except to some small extent. On the other hand it states that access can be had to Suppliers for all purposes from 17th Street. It is therefore perfectly practical, American argues, to set aside the entire side on Broadway for its exclusive use and thereby prevent it from becoming entangled in the labor dispute that exists only between Local 89 and Suppliers. Furthermore, American asserts it is engulfed in this controversy solely because of its corporate and geographical relations with Suppliers, but that there is not now and there has never been any affiliation between its employees and Local 89, so that it is being subjected to a secondary boycott by the conduct of the union, and that the sphere of picketing can and should be restricted to the disputants in such a manner as to relieve it from the damaging results that flow therefrom. Local 89 takes the position that the picketing is primary, proper and legal. The Chancellor adopted the view of Local 89, and American has cross-appealed from the judgment in this respect. Accordingly, we must search the record to resolve whether this finding has a reasonable basis in the evidence.
We have mentioned the physical layout of the stemmery. Aside from this, American and Suppliers have an economic interdependence; or, it might be said that Suppliers is the child of American, its parent, because the latter owns all the capital stock of the former. Suppliers buys raw tobacco and puts it through a certain process at the stemmery. The tobacco is then transported from the stemmery to American's cigarette factory by means of a conveyor belt which runs from one to the other. Suppliers sells all its tobacco to American. It was brought out that American owns not only the land but the improvements employed by Suppliers in the operation of the stemmery. There was testimony that Suppliers leased the ground and the plant and paid rent to American for the use of the same; however, the terms of the lease and the amount of the rent were unknown to the local officials of either corporation. A central power plant on the property supplies steam to the *252 facilities of both corporations, Suppliers paying for this service. The trucks of Suppliers display advertisements of "Lucky Strike," a well-known manufactured product of American. Over the entrance of another plant of Suppliers at 7th Street and Arcade Avenue, which is not immediately connected with this litigation, the name on the sign reads: "American Tobacco Company." At times employees of Suppliers work for American and the latter pays the former for such services. Employees of Suppliers also receive four packages of American-made cigarettes as a part of their weekly compensation. If an employee of Suppliers is badly injured or becomes seriously ill, that person is sent to American's hospital for treatment. To sum up, Suppliers and American operate as a unit, except that each is a corporate entity and each is under separate management locally.
In the light of the foregoing factual background, we are confronted with this question: Is American a neutral in the existent dispute between Suppliers and Local 89? The test to be applied in arriving at a proper conclusion on this point may be thus stated: "An important factor in determining whether the activities of a union against an employer other than the one with which the union has a labor dispute come within the purview of the secondary boycott provision is the relationship between the two employers. If the relationship is so close that one may be regarded as the `ally' of the other, picketing of one may be permissible during a labor dispute with the other." See 16 A.L.R.2d, paragraph 6, page 778.
In the recent case of Local No. 181, etc., v. Broadway & Fourth Avenue Realty Co., Ky., 248 S.W.2d 713, 715, a strike involved a corporation which owned and operated the Brown Hotel and the Kentucky Hotel and another corporation which owned and operated the Martin Brown Building, all located in Louisville. Both corporations were, except for qualifying shares, entirely owned by Mr. Graham Brown. In that case, in passing on a contempt proceeding, we not only treated the whole controversy as a single labor dispute but we considered Mr. Graham Brown and the two corporations as in reality one and the same. There we said:
"Supporting the conclusion that this is in the broad sense one labor dispute, is the fact that when the strike first commenced, picketing was begun at the Martin Brown Building, as well as the two hotels, although at that time there was no claim of a labor dispute affecting the employes of the Martin Brown Building.
"In the eyes of the public, this has been a strike against Mr. Graham Brown, and the acts of violence have been committed by persons having a labor dispute with Mr. Brown."
We think the industrial alliance between Suppliers and American is so close that both may be considered as one operation. From the standpoint of physical set-up the two are so enmeshed that they cannot be split apart without doing violence to both. To suggest that American has no interest in the dispute between Suppliers and Local 89 is to look at the form and remain blind to the substance. Nor can the naked claim of corporate separability be raised as a bar to picketing the primary employer at 17th and Broadway Streets. To remove the pickets from any side of this property would be to remove them from Suppliers at that location. It cannot, therefore, be said that American is a neutral under the circumstances and that the picketing amounts to a secondary boycott at the above address. We conclude that the Chancellor correctly disposed of this issue.
Local 89 seeks by its appeal to nullify so much of the injunction as requires a driver of a common or contract carrier to cross against his will a picket line where a strike is in progress. It so happens in this instance that the carrier employees are members of the same union as those conducting the strike against Suppliers. It should be emphasized, however, that they refuse to handle freight for American while remaining in the service of their employer.
*253 The rule of law that common carriers and their employees must serve all members of the public without discrimination is firmly established in Kentucky and, so far as we can find, in all the states. Its origin goes far back into the common law. Section 196 of the Constitution of Kentucky embodies the principle in this language: "Transportation of freight and passengers by railroad, steamboat or other common carrier, shall be so regulated, by general law, as to prevent unjust discrimination. No common carrier shall be permitted to contract for relief from its common law liability." Subsections 1 and 2 of KRS 281.685 read in part that no common or contract carrier shall "subject any person to any unreasonable discrimination." KRS 281.990 (1) stipulates that any person who "violates, or causes, aids or abets any violation of, any of the provisions of this chapter", which includes KRS 281.685 (1) and (2), "shall be fined not less than fifteen dollars nor more than two hundred dollars, or imprisoned for not more than thirty days or both."
See also 9 Am.Jur., Carriers, section 286, pp. 607-608, and 13 C.J.S., Carriers, § 27, pp. 61-62.
In Burlington Transp. Co. v. Hathaway, 1943, 234 Iowa 135, 12 N.W.2d 167, 169, 149 A.L.R. 1238, a suit was brought by certain common carriers as plaintiffs against the teamsters, chauffeurs, warehousemen and helpers union and its business agents as defendants to enjoin the latter from requiring employees of the union to refuse to handle the goods of John Blaul's Sons Company, a wholesale grocery company in Burlington, Iowa, which the union was attempting to organize. A picket line had been thrown around the grocery company and the employees of the union refused to transport freight for the grocery company. The Iowa statute as to non-discrimination by carriers is similar to Kentucky's. The substance of the court's decision is as follows:
"When the plaintiffs obtained their permits to operate as common carriers, they undertook the duty to transport the freight which the public tendered to them for transportation. The failure to carry out this duty to transport would not be excused by showing that its employees refused to obey the employers' order. See Chicago B. & Q. R. Co. v. Burlington, C. R. & N. Ry. Co., C. C., 34 F. 481, and Consolidated Freight Lines, Inc., v. Department of Public Service, 200 Wash. 659, 94 P.2d 484, 485. In the last cited case a strike of laundry workers at the Davenport Hotel in Spokane resulted in a picket line around that hotel. Certain common carrier truck lines, who had been serving the hotel in the capacity of picking up freight or baggage and delivering it anywhere in the State of Washington or in the channels of interstate commerce, refused to send their trucks through the picket line at the hotel because the local manager of the teamsters' union threatened to call a strike of the carriers' drivers if they were permitted to go through the picket line. The hotel filed a complaint with the Department of Public Service against the carriers for the cancellation of their permits as common carriers. This resulted in an order suspending temporarily the permits under which the carriers operated. Upon appeal the action of the Commission was affirmed, the Supreme Court of Washington stating: `The question then arises whether the appellants were excused by reason of the law. They being common carriers, it was their duty, under the facts and circumstances of this case, to send their trucks through the picket line. 13 C.J.S., Carriers, p. 407, § 202; Moore on Carriers, 2d Ed., Vol. 1, p. 124; Chicago, B. & Q. R. Co. v. Burlington, C. R. & N. Ry. Co., C. C., 34 F. 481; Burgess Bros. Co. v. Stewart, 112 Misc. 347, 184 N.Y.S. 199.'
* * * * * *
"From the above it is clear that if the plaintiffs were to do that which the union sought to compel them to do, namely, not handle the Blaul merchandise, *254 they would be doing an act prohibited by the common law and the statutory law of this state and an act that could subject them to criminal prosecution.
* * * * * *
"There was no labor dispute between plaintiffs and their employees or between plaintiffs and the defendant union. The union cannot concertedly exert, in aid of their labor dispute with Blaul, any economic pressure to compel these plaintiffs to do that which the law and public policy forbid. The injunction was rightly issued."
These cases support the rule laid down in the Hathaway case: Pacific Gamble Robinson Co. v. Minneapolis & St. Louis R. Co., D.C.Minn.1952, 105 F.Supp. 794; Northwestern Pacific R. Co. v. Lumber & Sawmill Workers Union, etc., 1948, 31 Cal. 2d 441, 189 P.2d 277; Turner v. Zanes, Tex. Civ.App. 1947, 206 S.W.2d 144.
Counsel for Local 89 admit that the Hathaway case correctly sets forth the law on the issue raised by the appeal as of the date it was decided, namely, in 1943, but they insist that the Labor-Management Relations Act of 1947, commonly called the Taft-Hartley Act, 61 Stat. 136 (1947), 29 U.S.C.A. § 151 et seq., makes the question under discussion one exclusively controlled by this enactment. To fortify this position, reliance is had upon this part of 29 U.S. C.A. § 158, also known as 8(b) (4) (D) of the Act, which is as follows: "* * * Provided, That nothing contained in this subsection shall be construed to make unlawful a refusal by any person to enter upon the premises of any employer (other than his own employer), if the employees of such employer are engaged in a strike ratified or approved by representative of such employees whom such employer is required to recognize under this subchapter."
The appeal involves the refusal of employees of common or contract carriers who are not on strike but who happen to belong to Local 89, the bargaining representative of Suppliers' employees, to transport the merchandise of American through the picket line at 17th and Broadway Streets, and this disobedience is not complained of as an unfair labor practice but as a violation of the common law, the statutory law and the Constitution of Kentucky. Aside from this, as we have shown, the illegal conduct of the employees could subject them to criminal prosecution. We find nothing in the provisions of the above Act nor in the decisions of the Supreme Court of the United States construing it that makes such conduct legal when from time immemorial the several states have branded it as illegal. Furthermore, the Supreme Court has taken the position that federal jurisdiction cannot be invoked to protect a course of action, such as that in this case, that would be in conflict with the declared public policy of a state. See Local Union No. 10 v. Graham, 344 U.S. 811, 73 S.Ct. 16, 97 L.Ed. 632, and the cases cited therein. It follows that the portion of the injunction requiring performance of the duty to carry American's goods in no way impairs the right to strike, the right to picket or any other right guaranteed by the federal law or the Constitution of the United States but that the order does, on the contrary, enforce obedience to the statutory law and the Constitution of the Commonwealth and, as a consequence, it was proper.
Finally, the employees of the carriers rely upon a provision of the agreement between themselves and their employers covering the period from February 1, 1952, to January 31, 1955, to the effect that it shall not be a violation of their contract or a cause for discharge to refuse to go through the picket line of a union or to refuse to handle unfair goods. They insist that this stipulation excuses them from serving American. The legal duty of a common carrier to handle the merchandise of a shipper without discrimination existed long before the contract came into being, and, by like token, employees of such carriers, as long as they voluntarily remain in the hire of their employers, do not have the lawful right to withhold their services from a particular customer who deals with *255 their employers. Here the common carriers and its employees seek by a contractual provision to avoid the responsibility imposed by a statute which implements a constitutional provision, and we hold that such a contractual stipulation is void.
The question of whether a contempt has been committed is left for the Chancellor's determination. Our reason for this ruling is that the contempt, if any, is continuous in its nature and should not be handled piecemeal. Besides, the Chancellor is on the ground, is familiar with the background of this suit and is in a better position to hear the evidence; therefore, this phase of the case can be more expeditiously handled for all concerned in the lower court.
It appears to us that an emergency exists in this case and a mandate shall issue forthwith without prejudice to the right to file a petition for a rehearing.
The judgment is affirmed on the appeal and on the cross-appeal.
|
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 10-4455
_____________
FREDERICK LIVINGSTON, an individual,
Appellant
v.
THE BOROUGH OF EDGEWOOD, a municipal corporation; DENNIS
HOCKENBERRY; TIMOTHY QUINN; MICHAEL CROW; KURT FERGUSON;
PAUL WOOD, individuals; EDGEWOOD BOROUGH POLICE OFFICERS
ASSOCIATION
_____________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(Civ. No. 2:08-00812)
Magistrate Judge: Hon. Lisa P. Lenihan
Submitted Under Third Circuit LAR 34.1(a)
May 11, 2011
Before: SMITH, CHAGARES, and VANASKIE, Circuit Judges.
(Filed June 2, 2011)
____________
OPINION
____________
Both parties consented to the exercise of jurisdiction by Magistrate Judge Lenihan
pursuant to 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73.
CHAGARES, Circuit Judge.
Plaintiff Frederick Livingston appeals the Magistrate Judge‟s grant of summary
judgment in favor of defendants Borough of Edgewood and several of its current and
former employees.1 For the reasons that follow, we will affirm.
I.
We write for the parties‟ benefit and recite only the facts essential to our
disposition.2 Livingston, who is African American, has been employed as a police officer
in the Borough of Edgewood since February 1996. In August 2005, Livingston was
arrested for rape, statutory sexual assault, sexual assault, incest, endangering the welfare
of children, aggravated indecent assault, indecent assault, and corruption of minors, based
upon allegations that he had sexually abused one of his daughters. The Borough of
Edgewood police department subsequently suspended Livingston, with pay, on August
1
Dennis Hockenberry, Timothy Quinn, and Michael Crow are current or former
Borough of Edgewood police officers. Kurt Ferguson is the former Edgewood Borough
Manager. Paul Wood is the former Edgewood chief of police.
2
Furthermore, we only cite to facts that are supported by evidence in the record. On
appeal, as before the Magistrate Judge, Livingston relies on unsupported factual
assertions. As the Magistrate Judge noted, Livingston “may not, at this stage of the
proceedings, continue to maintain claims on unsupported/conclusory allegations” or rely
on “hearsay or speculative assertions made without foundation.” Appendix 5 n.3.
2
16, 2005. In February 2006, following a Loudermill hearing,3 the Borough changed the
terms of Livingston‟s suspension to one without pay.
Livingston‟s criminal trial took place in September 2006. At that trial, several of
the individual defendants testified against Livingston regarding his reputation for
truthfulness. On September 19, 2006, the jury returned a verdict of acquittal.
Livingston‟s pay was reinstated the following day and he returned to active duty as a
police officer on November 11, 2006.4
Livingston compares his pre-suspension and post-suspension experience as an
Edgewood police officer as being in “separate continents.” Appendix (“App.”) 720. For
example, after returning from suspension, many of Livingston‟s extra responsibilities had
been reassigned, including his former position of “crime prevention officer” and his duty
of acting as the liaison for the library‟s annual Halloween party. Several of Livingston‟s
other pre-suspension responsibilities had simply been discontinued. He had formerly
acted as a Drug Abuse Resistance Education (DARE) officer, and had also been involved
in a bike rodeo program and the citizen‟s police academy program. All three of these
programs were terminated during Livingston‟s suspension.
3
This is the name given to a hearing for a public employee conducted pursuant to the
Supreme Court‟s decision in Cleveland Board of Education v. Loudermill, 470 U.S. 532
(1985).
4
Before Livingston returned to work, the Edgewood police department completed an
investigation regarding whether Livingston had violated any departmental rules or
regulations stemming from his criminal prosecution. The investigation concluded that no
violations had occurred.
3
In addition, Livingston complained of general mistreatment after his return,
including that: (1) fellow police officer (and defendant) Hockenberry did not assist him
when he was evacuating children during a potential fire emergency; (2) he was not
allowed to take a third week of vacation for his wedding; (3) unlike other officers, he was
not provided a new individually-fitted bullet-proof vest for more than two years
following his return; (4) he did not receive appropriate computer training; and (5) he was
unfairly reprimanded for minor infractions such as failing to turn in daily log sheets.
Livingston was also assigned to handle DUI case preparations and abandoned vehicles,
tasks that he deemed to be less desirable than his previous pre-suspension
responsibilities.
In January and March/April of 2007, Livingston complained to the chief of the
police department about a “hostile work environment.”5 On August 13, 2007, Livingston
filed a complaint with the Equal Employment Opportunity Commission (the “EEOC”),
alleging race discrimination and retaliation. See App. 943-50.6 In September 2007,
Livingston verbally complained to the chief of the police department, and contended that
5
The January 2007 complaint provided no specifics regarding this hostile work
environment. The March/April 2007 complaint pertained to fellow officer Hockenberry,
and mentioned, among other things, Hockenberry‟s failure to assist Livingston during the
potential fire emergency.
6
This August 2007 EEOC complaint is the first time that Livingston alleged racial
discrimination.
4
two additional African American employees had been discriminated against.7 In
September 2009, Livingston again complained to the chief of the police department, this
time regarding a dispute with defendant Timothy Quinn, a fellow police officer with less
seniority than Livingston. There is evidence in the record to suggest that Livingston and
Quinn had verbally threatened one another, and that during Livingston‟s suspension,
Quinn had created a computer image of Livingston behind bars and had used insensitive
racial language. After holding Loudermill hearings, the Borough suspended Quinn for
ten days and ordered both Livingston and Quinn to attend anger management classes.
Livingston initiated this case by filing a complaint on June 12, 2008.8 After the
completion of discovery, defendants moved for summary judgment. On November 1,
2010, the Magistrate Judge granted defendants‟ motion and entered summary judgment in
favor of defendants as to Livingston‟s claims for racial discrimination, hostile work
environment, and retaliation in violation of Title VII of the Civil Rights Act of 1964, 42
U.S.C. § 2000e et seq. (“Title VII”), Livingston‟s equal protection claim asserted
pursuant to 42 U.S.C § 1983, Livingston‟s federal conspiracy claim asserted pursuant to
7
The September 2007 complaint, like the March/April 2007 complaint, pertained to the
behavior of officer Hockenberry.
8
Livingston later filed a second civil action in Pennsylvania state court. That action was
removed to federal court and consolidated with the first action then proceeding before the
Magistrate Judge.
5
42 U.S.C § 1985(3), and Livingston‟s state-law claims for civil conspiracy and
defamation.9 This timely appeal followed.
II.
The District Court had jurisdiction pursuant to 28 U.S.C. § 1331 and 28 U.S.C. §
1367. We have appellate jurisdiction under 28 U.S.C. § 1291.
Our review of the Magistrate Judge‟s grant of summary judgment is plenary, and
we apply the same legal standard as the Magistrate Judge. Vitalo v. Cabot Corp., 399
F.3d 536, 542 (3d Cir. 2005). A party is entitled to 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.” Fed. R. Civ. P. 56(a). In conducting our analysis, we must
view the record in the light most favorable to Livingston, and must draw all reasonable
inferences in his favor. See Vitalo, 399 F.3d at 542. To defeat summary judgment,
Livingston must “produce admissible evidence containing „specific facts showing that
there is a genuine issue for trial.‟” Id. at 542 (quoting Fed. R. Civ. P. 56(e)).
III.
9
Defendants previously filed a motion to dismiss certain claims asserted by Livingston
in his original complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. The Magistrate Judge granted that motion and dismissed Livingston‟s claims
alleging violations of his First, Fifth, Sixth, and Fourteenth Amendment due process
rights, all asserted pursuant to 42 U.S.C § 1983, as well as his state-law claim for
intentional infliction of emotional distress. Livingston does not challenge these earlier
dismissals on appeal.
6
Livingston appeals the entry of summary judgment dismissing all of his claims.
We will assess each of Livingston‟s claims in turn, and will affirm for essentially the
same reasons articulated by the Magistrate Judge in her thorough and well-reasoned
opinion.
A.
We will first discuss Livingston‟s claims for racial discrimination, hostile work
environment, and retaliation brought pursuant to Title VII. In sum, we conclude that
while the evidence establishes that tensions arose between Livingston and certain of his
colleagues following Livingston‟s arrest based upon allegations that Livingston had
sexually abused one of his daughters, and that perhaps as a result, Livingston may have
been treated differently after returning to work following his arrest-related suspension,
there is insufficient evidence in the record to support a finding that Livingston suffered
intentional discrimination, a hostile work environment, or retaliation on account of his
race. We will therefore affirm the dismissal of Livingston‟s claims brought under Title
VII.
1.
Under Title VII, it is unlawful for an employer to “fail or refuse to hire or to
discharge any individual, or otherwise to discriminate against any individual with respect
to his compensation, terms, conditions, or privileges of employment, because of such
individual‟s race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2(a).
7
Livingston first claims that defendants discriminated against him on the basis of
his race. To maintain a prima facie case for racial discrimination, Livingston must show
that: (1) he is African American; (2) he was qualified for the position; (3) he was subject
to an adverse employment action; and (4) that similarly situated persons who are not
African American were treated more favorably or that the circumstances of the adverse
employment action give rise to an inference of discrimination. See Sarullo v. U.S. Postal
Serv., 352 F.3d 789, 797 (3d Cir. 2003); Jones v. Sch. Dist. Phila., 198 F.3d 403, 410-11
(3d Cir. 1999). In the absence of direct evidence of discrimination,10 Livingston may
satisfy this initial burden pursuant to the familiar burden-shifting framework set forth in
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Under McDonnell Douglas,
Livingston bears the initial burden of establishing a prima facie case of unlawful
discrimination by a “preponderance of the evidence.” Sarullo, 352 F.3d at 797. If
Livingston succeeds, the burden of production shifts to defendants to articulate a
legitimate, nondiscriminatory reason for the adverse employment action. Id. If
defendants meet this “relatively light burden,” the burden of production returns to
Livingston, who must show by a preponderance of the evidence that defendants‟
proffered reason is pretextual. Fuentes v. Perskie, 32 F.3d 759, 763 (3d Cir. 1994).
In this case, Livingston has failed to meet his initial burden to establish a prima
facie case of unlawful discrimination by a preponderance of the evidence in regard to the
10
Since Livingston offers no direct evidence, we will assess his claims under the burden-
shifting framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).
8
fourth element of his racial discrimination claim. As the Magistrate Judge held,
“[p]laintiff has proffered nothing more than his own speculation that his post-arrest and
post-reinstatement treatment would have been different were he not African American”
and there is “no evidence of reasonably similarly situated individuals (e.g., in
circumstances of comparable seriousness) treated differently.” App. 20. Accordingly,
we affirm the dismissal of Livingston‟s racial discrimination claim.
2.
For similar reasons, Livingston‟s hostile work environment claim also fails. To
establish a Title VII hostile work environment claim, Livingston must prove that: (1) he
suffered intentional discrimination because of his race; (2) the discrimination was
pervasive and regular; (3) the discrimination detrimentally affected him; (4) the
discrimination would detrimentally affect a reasonable person of the same sex in that
position; and (5) the existence of respondeat superior liability. See Huston v. Procter &
Gamble Paper Prods. Corp., 568 F.3d 100, 104 (3d Cir. 2009). For the reasons just
stated, there is insufficient evidence in the record from which a reasonable juror could
conclude that Livingston suffered intentional discrimination due to his race. Moreover,
there is also insufficient evidence to support a reasonable finding that any discrimination
was pervasive and regular. We therefore affirm the dismissal of Livingston‟s hostile
work environment claim.
3.
9
In order to prevail on a retaliation claim under Title VII, Livingston must show
that: (1) he engaged in activity protected by Title VII; (2) defendants took an adverse
employment action against him; and (3) there was a causal connection between the
protected activity and the adverse employment action. See Nelson v. Upsala Coll., 51
F.3d 383, 386 (3d Cir. 1995). Livingston‟s retaliation claim is limited to events occurring
on or after October 14, 2006, three-hundred days prior to the filing of his August 13,
2007 EEOC complaint. Cf. Nat‟l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 113-14
(2002). During that relevant time period, the only protected acts in which Livingston
engaged were his complaints to the chief of the police department in 2007, his August
2007 EEOC complaint, and his subsequent complaints regarding racial discrimination.
We agree with the Magistrate Judge that “there is simply insufficient evidence from
which the fact finder could reasonably infer a causal connection between any material
adverse action and retaliation for conduct protected under Title VII.” App. 27; see
LeBoon v. Lancaster Jewish Cmty. Ctr. Ass‟n, 503 F.3d 217, 232-33 (3d Cir. 2007).
Accordingly, we affirm the dismissal of Livingston‟s retaliation claim, and by so doing,
we affirm the dismissal of all of Livingston‟s claims brought pursuant to Title VII.
B.
Livingston also appeals the dismissal of his equal protection claim, asserted
pursuant to 42 U.S.C. § 1983. “To bring a successful claim under 42 U.S.C. § 1983 for a
denial of equal protection, plaintiffs must prove the existence of purposeful
discrimination.” Andrews v. City of Phila., 895 F.2d 1469, 1478 (3d Cir. 1990)
10
(emphasis added). A claim brought pursuant to 42 U.S.C. § 1983 also requires that
defendants “exercised power possessed by virtue of state law and made possible only
because the wrongdoer is clothed with the authority of state law.” Bonenberger v.
Plymouth Twp., 132 F.3d 20, 23 (3d Cir. 1997) (internal quotations omitted). Here,
Livingston has failed to adduce sufficient evidence that any of the defendants acted under
the authority of state law to discriminate purposefully against him on the basis of his race.
Furthermore, in order to maintain a § 1983 claim against the Borough of Edgewood, a
municipality, Livingston must prove that an official policy or custom caused him to be
denied a constitutional right pursuant to Monell v. Department of Social Services, 436
U.S. 658 (1978). There is no evidence in the record to suggest that any such policy or
custom existed. We thus affirm the dismissal of Livingston‟s equal protection claims.
C.
Livingston‟s federal conspiracy claim, asserted pursuant to 42 U.S.C. § 1985(3),
requires that he establish: “(1) a conspiracy; (2) motivated by a racial or class based
discriminatory animus designed to deprive, directly or indirectly, any person or class of
persons to the equal protection of the laws; (3) an act in furtherance of the conspiracy;
and (4) an injury to person or property or the deprivation of any right or privilege of a
citizen of the United States.” Lake v. Arnold, 112 F.3d 682, 685 (3d Cir. 1997).
Similarly, Livingston‟s Pennsylvania state-law claim for civil conspiracy requires: “(1) a
combination of two or more persons acting with a common purpose to do an unlawful act
or to do a lawful act by unlawful means or for an unlawful purpose; (2) an overt act done
11
in pursuance of the common purpose; and (3) actual legal damage.” Gen. Refractories
Co. v. Fireman‟s Fund Ins. Co., 337 F.3d 297, 313 (3d Cir. 2003) (quotation marks
omitted). For purposes relevant to both of these claims, in order “[t]o constitute a
conspiracy, there must be a meeting of the minds.” Startzell v. City of Phila., 533 F.3d
183, 205 (3d Cir. 2008) (quotation marks omitted).
The Magistrate Judge correctly concluded that there is insufficient evidence in the
record to establish the requisite “meeting of the minds,” and therefore, the existence of a
conspiracy, since Livingston has “proffered neither direct nor circumstantial evidence
sufficient to a reasonable finding of conspiratorial agreement or concerted efforts among
the [d]efendants.” App. 32; cf. Estate of Oliva ex rel. McHugh v. New Jersey, 604 F.3d
788, 802 (3d Cir. 2010) (“To survive a motion for summary judgment on [plaintiff‟s]
section 1985(3) claim, [the plaintiff] first was required to put forward facts that would
allow a reasonable factfinder to conclude that [the defendants] formed a conspiracy to
deprive him of his rights.”). We therefore affirm the dismissal of Livingston‟s federal
and state-law conspiracy claims.
D.
Finally, we affirm the dismissal of Livingston‟s state-law defamation claim. A
one-year statute of limitations applies to this claim, see 42 Pa. Cons. Stat. § 5523, and
Livingston has failed to adduce evidence of a single defamatory statement by any of the
12
defendants within one year of the filing of his first complaint on June 12, 2008.
Accordingly, Livingston‟s state law defamation claim is time-barred.11
IV.
For the reasons stated above, we will affirm.
11
Livingston also appeals the denial of his claim for punitive damages. See Livingston
Br. at 43-45. The Magistrate Judge did not address this issue in her opinion. In light of
our disposition affirming the Magistrate Judge‟s dismissal of all of Livingston‟s
substantive claims, we also hold that there is no need to determine whether punitive
damages would be appropriate in this case.
13
|
USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 95-1294
UNION BUILDERS, INC.,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.
____________________
DISTRICT COUNCIL 94, UNITED BROTHERHOOD OF
CARPENTERS AND JOINERS OF AMERICA, AFL-CIO,
Intervenor.
____________________
ON PETITION FOR REVIEW AND CROSS-APPLICATION
FOR ENFORCEMENT OF AN ORDER OF
THE NATIONAL LABOR RELATIONS BOARD
____________________
Before
Torruella, Chief Judge,
___________
Aldrich and Coffin, Senior Circuit Judges.
_____________________
_____________________
Andrew B. Prescott, with whom Donald P. Rothschild and
____________________ _____________________
Tillinghast Collins & Graham were on brief for petitioner.
____________________________
Joseph A. Oertel, Senior Litigation Attorney, National Labor
________________
Relations Board, with whom Frederick L. Feinstein, General
________________________
Counsel, Linda Sher, Acting Associate General Counsel, Aileen A.
__________ _________
Armstrong, Deputy Associate General Counsel, and Charles
_________ _______
Donnelly, Supervisory Attorney, National Labor Relations Board,
________
were on brief for respondent.
____________________
October 20, 1995
____________________
TORRUELLA, Chief Judge. The petitioner, Union
TORRUELLA, Chief Judge.
____________
Builders, Inc. ("UBI") seeks review of the decision of the
respondent, the National Labor Relations Board ("the Board" or
"the NLRB"), ordering UBI to supply requested information to
District Council 94, United Brotherhood of Carpenters and Joiners
of America, AFL-CIO (the "Union"). The NLRB cross-applies, under
10(e) of the National Labor Relations Act ("the Act"), 29
U.S.C. 160(e), for enforcement of its order against UBI. The
Board has ordered UBI to cease and desist from violating
8(a)(5) and (1) of the Act, 29 U.S.C. 158(a)(1) and (a)(5),
furnish the Union with the information it requested, and post
appropriate notices. For the following reasons, we affirm the
Board's Decision and Order.
I. BACKGROUND
I. BACKGROUND
In 1989, a Rhode Island company called O. Ahlborg &
Sons ("O. Ahlborg") executed a three-year collective bargaining
agreement ("CBA") with the Union. On or about March 24, 1992,
O. Ahlborg notified the Union that it planned to terminate the
agreement as of May 31, 1992, as was O. Ahlborg's contractual
right. As a result of collective bargaining with the Union's
then business manager (Herbert F. Holmes), O. Ahlborg reached an
agreement (the "Holmes-Ahlborg Agreement") with the Union
(confirmed by a letter dated May 29, 1992) whereby a new employer
entity, UBI, would be formed. Under the Holmes-Ahlborg
Agreement, UBI would enter into a collective bargaining agreement
(the "new CBA") with the Union and would continue all union
-2-
bargaining unit work performed at that time by O. Ahlborg. The
Board found that the Holmes-Ahlborg Agreement also provided that,
as between UBI and O. Ahlborg, UBI would be allotted all
prevailing rate jobs.
Additionally, under the Holmes-Ahlborg Agreement, UBI
would assume all employees currently performing union bargaining
unit work for O. Ahlborg, and there would be no interruption in
production, employment or wages of union members despite the
termination of the O. Ahlborg-Union CBA. Shortly thereafter, UBI
and the Union entered into the new CBA, which provided that
[UBI] will not subcontract any work
covered by the terms of this agreement
which is to be performed at the jobsite
except to a contractor who holds an
agreement with the United Brotherhood of
Carpenters and Joiners of America, or one
of its subordinate bodies, or, who
agrees, in writing, prior to or at the
time of the execution of the sub-
contract, to be bound by the terms of
this agreement.
The new CBA covered the period from June 1, 1992 to June 4, 1995.
On December 8, 1993, David F. Palmisciano, who had
replaced Holmes as union business representative, sent a letter
to UBI's chief executive Eric Ahlborg, expressing concern that
UBI was "operating a second company" as "an alter ego." The
letter also requested that Eric Ahlborg fill out and return an
enclosed questionnaire. Eric Ahlborg refused to reply to the
questionnaire.
Subsequently, the matter came before an administrative
law judge ("ALJ") on the NLRB General Counsel's complaint
-3-
alleging that UBI violated 8(a)(5) and 8(a)(1) of the Act by
refusing to furnish information that the Union alleged was
necessary for, and relevant to, the performance of its duties as
the exclusive collective-bargaining representative of unit
employees. Palmisciano testified before an ALJ that, during
three previous onsite inspections, he saw evidence that UBI had
violated his interpretation of the Holmes-Ahlborg Agreement: that
as between O. Ahlborg and UBI, UBI would garner all state,
Federal and other work with high wage rates, particularly
"prevailing rates," and that such work would all go to union
carpenters.
The ALJ concluded that the Union reasonably believed
that UBI was operating O. Ahlborg as an "alter ego" and
subcontracting in a manner that violated the Holmes-Ahlborg
Agreement's award of prevailing rate jobs to UBI and its union
member employees only.1 Thus, the ALJ concluded that the
Union's reasonable belief justified the request for information,
and ordered UBI to comply. The Board affirmed the ALJ's rulings,
findings and conclusions, and adopted his recommended Order. UBI
seeks review of the Board's decision, and the Board cross-applies
for enforcement of its order against UBI.
____________________
1 UBI was organized as a Rhode Island corporation on June 1,
1992, to engage in the business of building construction and
related activities. UBI's officers are related to, and overlap
substantially with, those of O. Ahlborg. For example, UBI's
chief executive, Eric Ahlborg, is the son of O. Ahlborg's chief
executive; UBI's vice president is the daughter of O. Ahlborg's
chief executive; and UBI's chief financial officer, who holds the
same position at O. Ahlborg, is another son of O. Ahlborg's chief
executive.
-4-
II. STANDARD OF REVIEW
II. STANDARD OF REVIEW
We will enforce a Board order if the Board correctly
applied the law and if substantial evidence on the record
supports the Board's factual findings. Penntech Papers, Inc. v.
_____________________
NLRB, 706 F.2d 18, 22-23 (1st Cir. 1983), cited in NLRB v. Acme
____ ________ ____ ____
Tile and Terrazo, Co., 984 F.2d 555, 556 (1st Cir. 1993). We
______________________
uphold the Board's findings of a violation as long as substantial
evidence on the record as a whole supports them, even if we would
have reached a different conclusion. 29 U.S.C. 160(e) and
(f); 3-E Co., Inc. v. NLRB, 26 F.3d 1,3 (1st Cir. 1994);
_______________ ____
Cumberland Farms, Inc. v. NLRB, 984 F.2d 556, 559 (1st Cir.
________________________ ____
1993).
III. DISCUSSION
III. DISCUSSION
As part of the 8(a)(5) duty to bargain, an employer
must furnish all information requested by a union that is
necessary to the union in order to fulfill its obligation as
representative of bargaining unit employees. NLRB v. Acme
____ ____
Industrial Co., 385 U.S. 432, 435-36 (1967); NLRB v. New England
_______________ ____ ___________
Newspapers, Inc., 856 F.2d 409, 413 (1st Cir. 1988). Thus, an
________________
employer must produce information that is "relevant to [the
bargaining representative's] duties," including information
necessary to police the CBA. New England Newspapers, Inc., 856
_____________________________
F.2d at 413. Because the duty to bargain "unquestionably extends
beyond the period of contract negotiations and applies to labor-
management relations during the term of an agreement," NLRB v.
____
Acme Industrial Co., 385 U.S. at 436, the Union could have
____________________
-5-
requested the information simply because of its relevance to its
ongoing agreement with UBI. In this regard, we note that the
Board may determine that the employer has a duty to provide
information if it finds even "a probability that the information
___________
is relevant and that it will be of use to the union in carrying
out its statutory duties." NLRB v. Pfizer, Inc., 763 F.2d 887,
____ ____________
889 (7th Cir. 1985) (emphasis added). See also General Electric
________ ________________
Co. v. NLRB, 916 F.2d 1163, 1168 (7th Cir. 1990) (relevance is
___ ____
most often viewed liberally to allow for broad disclosure of
information).
As an initial matter, we reject UBI's argument that,
via the Holmes-Ahlborg Agreement, the Union approved the
coexistence of O. Ahlborg and UBI, and thereby waived its right
to challenge O. Ahlborg as UBI's alter ego. UBI has cited
neither legal authority nor requisite factual evidence to support
its waiver argument. Furthermore, nothing in the Holmes-Ahlborg
Agreement shows an unequivocal waiver by the Union of its right
to investigate the alleged diversion to O. Ahlborg of prevailing
rate jobs. Communication Workers of America AFL-CIO, Local 1051
_____________________________________________________
v. NLRB, 644 F.2d 923, 927 (1st Cir. 1981) ("the union may
____
relinquish a statutory right only by 'clear and unmistakable'
waiver") (quoting NLRB v. Perkins Machine Co., 326 F.2d 488, 489
____ ___________________
(1st Cir. 1964)). Finally, the ALJ specifically rejected UBI's
waiver argument based on the facts presented.
The ALJ correctly distinguished the issue of whether
UBI must supply the requested information from the issue of
-6-
whether O. Ahlborg and UBI are in fact intertwined in an alter
ego relationship. We agree that only the information issue bears
on this case. With respect to this issue, we are persuaded that
we should apply a "discovery-type" standard so that the Union may
gather "'a broad range of potentially useful information . . .
for the purpose of effectuating the bargaining process'." NLRB
____
v. Illinois-American Water Co., 933 F.2d 1368, 1378 (7th Cir.
____________________________
1991) (quoting Procter & Gamble Manufacturing Co. v. NLRB, 603
___________________________________ ____
F.2d 1310, 1315 (8th Cir. 1979)). In particular, the Supreme
Court has stressed that the Board should apply a more liberal
standard of relevance to information requests under the duty to
bargain in good faith than would be appropriate at trial. NLRB
____
v. Acme Industrial Co., 385 U.S. 432, 437 & n.6 (1967). Thus,
____________________
the Union cannot be required to prove that UBI is in breach of
its CBA or that O. Ahlborg is UBI's alter ego before the Union
can receive information that could help prove such allegations.
In deciding to apply such a standard, the ALJ correctly noted
that such information does not only benefit unions. In fact,
requiring employers to divulge information of even merely
potential relevance improves the efficiency of the arbitration
system as a whole, since otherwise, unions might be forced "to
take grievances all the way through to arbitration without [] the
opportunity to evaluate the merits of the claim." Id. at 438.
__
As a policy matter, employers as a whole may also benefit, since
the information they supply may generally aid unions in filtering
out meritless cases. Id.
__
-7-
Substantial evidence on the record supports the ALJ's
conclusion, adopted by the NLRB, that the Union supplied
sufficient objective evidence to show that its belief in
requesting the information was reasonable. The record supports
the finding that Palmisciano reasonably believed that the purpose
of the Holmes-Ahlborg Agreement was to permit O. Ahlborg to bid
nonunion work and to award all "prevailing rate" jobs to UBI.
Furthermore, the Union had entered the new CBA with UBI. Thus,
the ALJ and the Board correctly concluded that the questionnaire,
with its inquiries into UBI's ownership, corporate directors,
suppliers and relationship to an alleged nonunion employer,
sought information necessary to Palmisciano's collective
bargaining duties.
The ALJ heard testimony from Palmisciano regarding the
latter's observations at three different job sites. Palmisciano
testified that at the three sites, all with O. Ahlborg as general
contractor and paying prevailing rates, he had seen Union member
UBI employees supervising nonunion employees doing unit work, and
he had seen both Union member UBI employees and nonunion workers
doing unit work for subcontractors. Additionally, the ALJ
questioned Palmisciano regarding the meaning of the Holmes-
Ahlborg Agreement, especially with respect to the allotment of
work between O. Ahlborg and UBI. Furthermore, the ALJ questioned
Palmisciano regarding O. Ahlborg's responses to Palmisciano's
demands that O. Ahlborg use union subcontractors on carpentry
work at the three job sites.
-8-
While UBI takes offense at the ALJ's refusal to hear
Eric Ahlborg's testimony to show that UBI and O. Ahlborg had a
different understanding of the Holmes-Ahlborg Agreement, the
issue before the ALJ was whether Palmisciano could supply
objective evidence supporting a reasonable belief that made his
information request relevant to his collective bargaining duties.
Naturally, the ALJ drew his conclusions primarily from the
testimony of Palmisciano, since the chief issue was whether or
not Palmisciano's beliefs were reasonable given objective facts.
UBI also argues that because objective facts show that
it is not operating an alter ego, Palmisciano could not have had
a reasonable belief that would render the requested information
relevant. The proposition that a union's information request may
be denied if the company in question can show that objective
facts render the union's concerns untenable appears logical.
See, e.g., San Diego Newspaper Guild v. NLRB, 548 F.2d 863, 867
___ ____ __________________________ ____
(9th Cir. 1977) ("If the information requested has no relevance
to any legitimate union collective bargaining need, a refusal to
furnish it could not be an unfair labor practice."). However, in
the instant case, the issue is moot, since even if this
proposition were settled law applicable here, UBI has not made
the required showing.
In the course of this argument, UBI relies on the fact
that the relationship between it and O. Ahlborg is not the
classic alter ego situation of "a disguised continuance of the
old employer." Therefore, runs the argument, because O. Ahlborg
-9-
is not UBI's alter ego, the Union cannot demonstrate reasonable
belief necessary to support its request for information.
However, this argument must fail for two reasons.
First, UBI argues that this Court has previously used
the existence of a motive to evade labor law responsibilities in
corporate organization as a factor in identifying an alter ego,
NLRB v. Hospital San Rafael, Inc., 42 F.3d 45, 50 (1st Cir.
____ ___________________________
1994), and that no "disguise" or motive existed here, since the
Union knew and agreed to the creation of UBI from O. Ahlborg.
However, in Hospital San Rafael, the Court also called cases that
___________________
involve formation of new entities with direct evasionary intent
only "the easiest example[s]" of alter egos. Id. Presumably
__
there are also harder examples, as the Union may show here.
Additionally, even if the issue before us here were
whether O. Ahlborg constituted UBI's alter ego, the paper
relationship between the two corporations would not be
dispositive, since the alter ego doctrine looks behind the
corporate form to determine whether nominally distinct
corporations are "in truth . . . but divisions or departments of
a 'single enterprise.'" NLRB v. Deena Artware, Inc., 361 US 398,
____ ___________________
402 (1960). Note that this Court has previously upheld the
Board's finding of an alter ego "where the companies were not
successors but rather parallel operations." C.E.K. Industrial
_________________
Mechanical Contractors, Inc. v. NLRB, 921 F.2d 350, 354-55 (1st
____________________________ ____
Cir. 1990) (denying enforcement of the Board's order on other
grounds). Thus, the fact that O. Ahlborg did not succeed UBI
-10-
does not, by itself, render the alter ego doctrine inapplicable
and Palmisciano's belief unreasonable.
Thus, the ALJ correctly avoided turning the hearing
into an inquiry into the agreement's ultimate meaning, since such
a decision was beyond the scope of the only issue before him:
whether or not to compel information disclosure. With respect to
testimony directed at this question, an ALJ's credibility
determinations are entitled to great weight because the ALJ saw
and heard the witnesses testify. Holyoke Visiting Nurses Ass'n
______________________________
v. NLRB, 11 F.3d 302, 308 (1st Cir. 1993), cited in 3-E Co., Inc.
____ ________ _____________
v. NLRB, 26 F.3d 1, 3 (1st Cir. 1994). We will set aside
____
findings only if we believe the ALJ overstepped the bounds of
reason. Id. Here, we find no such transgression.
__
IV. CONCLUSION
IV. CONCLUSION
The ALJ's findings, adopted by the Board, are supported
by substantial evidence on the record as a whole and stand
without error. UBI's request for review is denied, and the
Board's request for enforcement of its order is granted. Costs
to respondent.
-11-
|
10 N.J. Super. 140 (1950)
76 A.2d 830
CITY OF JERSEY CITY, APPELLANT,
v.
DEPARTMENT OF CIVIL SERVICE, STATE OF NEW JERSEY AND WILLIAM J. TIMNEY, JAMES F. MALONEY, EDWARD M. MALONE, JOHN J. MEEHAN, JOSEPH M. LEPIS AND FRANK A. VERGA, RESPONDENTS.
Superior Court of New Jersey, Appellate Division.
Argued October 16, 1950.
Decided November 14, 1950.
*143 Before Judges JACOBS, EASTWOOD and BIGELOW.
Mr. Mortimer Neuman argued the cause for the appellant (Mr. John B. Graf, Corporation Counsel, City of Jersey City, attorney).
Mr. Edward A. Markley argued the cause for the respondents (Messrs. Markley & Broadhurst, attorneys; Mr. James J. Langan, of counsel and on the brief).
The opinion of the court was delivered by EASTWOOD, J.A.D.
The City of Jersey City appeals from an order of the Department of Civil Service, State of New Jersey (hereafter referred to as "the Department"), directing that the respondents, William J. Timney, James F. Maloney, Edward M. Malone, John J. Meehan, Joseph M. Lepis and Frank A. Verga, be restored to their pay and positions as legal assistants, effective as of August 20, 1949, on the ground that they had been illegally and summarily dismissed without any charges being preferred against them and without a hearing. William J. Timney filed a cross-appeal asserting that the Department erroneously failed to direct his reinstatement to the position of municipal court clerk.
On the certification of the city to the Department, the plaintiffs were recorded as holding the title of legal assistant, *144 which, under R.S. 11:22-26 was in the exempt division of the classified civil service. Timney was appointed January 2, 1935, as acting clerk of the First Criminal Court of Jersey City; on February 1, 1936, as legal assistant in the law department; on January 1, 1949, as clerk of the Municipal Court, Part I, and chief clerk of all parts, which appointments were certified to the Department as permanent. James F. Maloney, Edward M. Malone, Joseph M. Lepis, John J. Meehan and Frank A. Verga were appointed legal assistants on July 1, 1937, December 1, 1938, November 16, 1942, November 19, 1934, and December 1, 1946, respectively, and their appointments were duly certified to the Department. During the ensuing years, the budget ordinances of Jersey City contained items in the appropriation reading "Assistants to Corporation Counsel" and "Court Clerks and other Employees" and appropriated sums of money therefor from which the respondents' salaries were paid. Timney was notified on August 16, 1949, that his services in the Municipal Court were no longer required and he was directed to report to John B. Graf, Corporation Counsel, for assignment. On August 16, 1949, he was advised by the corporation counsel that after August 20th his services as legal assistant would be required no longer and he would be dismissed from his position as of that date. The other legal assistants were similarly notified by the corporation counsel by letters dated August 16, 1949, that their services would be terminated on August 20th. While not affecting the issue here, the commission adopted an ordinance on October 18, 1949, creating a law department, under the authority of which several legal assistants were appointed to perform duties similar to those theretofore performed by the respondents. Under the authority of the law known as the Walsh Act, the City of Jersey City adopted the commission form of government in 1913, and has been since governed thereby. At the election in May, 1949, an entirely new board of commissioners was elected and thereafter assumed office. It was the action of the new regime that brought about the dismissal of the respondents and the *145 adoption of an ordinance creating the aforementioned law department. The respondents appealed from their dismissal to the Department. Following a hearing, the Department directed that the respondents be restored to their positions and pay as legal assistants, holding, inter alia:
"The records of the Civil Service Department show that appellants were recorded as holding the title of Legal Assistant. At the time their appointments were recorded, the position of Legal Assistant was in the exempt division of the classified civil service pursuant to R.S. 11:22-26. They are protected by R.S. 11:21-6 and cannot be dismissed, except by the procedures set forth in the law."
The City of Jersey City contends that the Department was in error in restoring respondents to their positions, on the ground that they had never been lawfully appointed, either originally or at any time thereafter; that their appointments were a nullity, having been made by resolution, and that they were only de facto employees and never did nor could they acquire the status of de jure employees. The Department refused to pass upon the validity of their appointments, holding that it had no such jurisdiction.
In the briefs of the respective parties, considerable discussion is devoted to the applicability of P.L. 1894, c. 258, p. 385, and P.L. 1911, c. 175, p. 261, R.S. 40:171-115 et seq. However, we deem it unnecessary to discuss these acts for the reason that, at the argument, respondents conceded that they were not applicable to the issue here and the appellant, City of Jersey City, contended that the 1911 act was repealed in toto by P.L. 1920, c. 65, p. 117, R.S. 40:171-112 et seq. We are in accord with the view that the 1894 and 1911 acts have no applicability to this issue. The act of 1920 (P.L. 1920, c. 65, p. 117), which we think is controlling, provides as follows:
"1. In each city of the first class in this State there shall be established a law department, which shall consist of a city or corporation counsel, appointed by the governing body of such city, a private secretary, appointed by the city or corporation counsel, and two assistant city or corporation counsels, and as many legal assistants, clerks and other employees as the city or corporation counsel, with the consent *146 of the governing body, shall appoint. Such assistant city or corporation counsels and private secretary shall be removable at the pleasure of the city or corporation counsel, but the legal assistants, clerks and other employees shall be deemed to be within purview of an act entitled `An act regulating the employment, tenure and discharge of certain officers and employees of this State, and of the various counties and municipalities thereof, and providing for a Civil Service Commission, and defining its powers and duties,' approved April tenth, one thousand nine hundred and eight, and the acts supplementary thereto and amendatory thereof, and shall not be removed except as in said act provided.
"2. The city or corporation counsel shall be chief law officer of the city, and attorney or solicitor of record in all court proceedings wherein the city or any of its officers, boards, bodies or commissions, by reason of any suits growing out of their official position, shall be a party. He shall advise all city officers and bodies of any matters relating to city government, when requested to do so, and shall supervise the preparation of all contracts deeds and other documents and all statutes, ordinances and resolutions referred to the law department for preparation. The other members of the law department shall perform such duties therein as may from time to time be assigned to them by the city or corporation counsel."
On July 25, 1921, the then corporation counsel notified the board of commissioners in writing that he had appointed the first and second assistant corporation counsel and four legal assistants, "subject to your approval and in accordance with c. 65, P.L. 1920." By resolution of the commission, the appointments and salaries were confirmed. The subsequent appointments of the legal assistants whose positions are involved in this litigation, were similarly made by the corporation counsel and their appointments and salaries were approved by resolution of the board of commissioners.
The City of Jersey City contends that the appointments in question never had any legal efficacy, having been accomplished by resolution of the board of commissioners; that it required the adoption of an ordinance to implement the statute; that notwithstanding the fact that the 1920 law is silent as to the method to be pursued in order to effectuate its objective, it was bound by the provisions of the Home Rule Act of 1917, R.S. 40:48-1; that the 1920 act in the respect is in pari materia with the Home Rule Act, and the latter act expressly provides that the creation of municipal offices or positions *147 and the fixing of salaries therefor shall be by ordinance. The respondents contend that the 1920 act, having been enacted subsequent to the Home Rule Act, is complete in every respect so far as the subject matter contained therein is concerned; that it created the law department without the necessity for any enabling municipal legislation; that where an act is silent as to the method to be followed by the governing body to effectuate the purpose of the statute, it may be accomplished by resolution or ordinance; that the appointments of the corporation counsel, the two assistants and the legal assistants made by the corporation counsel, approved by the board of commissioners, constituted the law department in conformity with the act in question; that the result thus achieved by resolutions of the board of commissioners was legally valid.
The City of Jersey City correctly contends that where an office or position is created by a municipality, it must be done by ordinance and it is invalid if it is accomplished by the adoption of a resolution by the governing body, citing Davaillon v. Elizabeth, 121 N.J.L. 380 (Sup. Ct. 1938); Handlon v. Town of Belleville, 4 N.J. 99 (Sup. Ct. 1950), and other cases in support thereof. Our review of these cases convinces us that they deal with positions not created by statute, but those within the discretionary authority delegated to the governing body either by the Home Rule Act or other statutes. The pertinent portion of the Home Rule Act (R.S. 40:48-1 (3)) respecting the creation of municipal offices and positions provides that the municipality:
"Prescribe and define, except as otherwise provided by law, the duties and terms of office or employment, of all officers and employees; and to provide for the employment and compensation of such officials and employees, in addition to those provided for by statute, as may be deemed necessary for the efficient conduct of the affairs of the municipality;".
"It is settled law that under R.S. 40:48-1, a municipal office or position, if not created by statute, can come into being only by ordinance of the local governing body. The sense of the *148 statute is that, because the creation of offices and positions involves an increase of the financial burden of local government, the power is exercisable only by ordinance, a deliberative process requiring notice to the public." Handlon v. Town of Belleville, supra. The Handlon case dealt with the appointment of a recorder and Mr. Justice Heher, speaking for the Supreme Court, said: "We do not perceive in these provisions (R.S. 2:225-1 and R.S. 2:16-4) a legislative direction for the appointment of a clerk of the local court, even though the post be deemed unnecessary. The need is a matter for the discretion of the local authority. We find in the cited act no suggestion of a legislative determination of the need without regard to local conditions." (Parenthesis ours.) The 1920 act not only creates the law department and the specific positions constituting same, but also describes the duties of the corporation counsel, delegates to him power to appoint the two assistant city or corporation counsel as well as a private secretary, the legal assistants, clerks and other employees "* * * as the city or corporation counsel, with the consent of the governing body, shall appoint." The act further provides that "Such assistant city or corporation counsels and private secretary shall be removable at the pleasure of the city or corporation counsel, but the legal assistants, clerks and other employees shall be deemed to be within purview of an act entitled `An act regulating the employment, tenure and discharge of certain officers and employees of this State, and of the various counties and municipalities thereof, and providing for a Civil Service Commission, and defining its powers and duties,' approved April tenth, one thousand nine hundred and eight, and the acts supplementary thereto and amendatory thereof, and shall not be removed except as in said act provided;" further, that "The other members of the law department shall perform such duties therein as may from time to time be assigned to them by the city or corporation counsel." It follows, therefore, as a corollary that the positions were created by the 1920 act.
*149 The appellant contends that the language of the 1920 act merely authorizes the city to set up the law department; that it is not mandatory; that the word "shall" in the act is to be construed as "permissive," citing the case of Orange v. Goldberg, 137 N.J.L. 73 (Sup. Ct. 1948). The Goldberg case is to be distinguished from the case at bar. In that case, it was held that Goldberg was not legally appointed originally, his appointment to the office having been made merely in writing by a then director of the public works in the municipality. There is nothing in the opinion to indicate that there was any action of the governing body, either by resolution or ordinance, appointing Goldberg to the position of assistant city counsel or that his position was created by statute. The appellant also relies upon the case of Brenner v. Bayonne, 132 N.J.L. 47 (Sup. Ct. 1944); affirmed, 132 N.J.L. 469 (E. & A. 1945). The Brenner case is also distinguishable from the case at bar, in that while the statute applicable there, R.S. 40:171-109, provided that all cities of the second class shall engage city counsel and fix the terms of their office at three years, the court held that it merely provided "* * * how offices in second class cities shall be filled and provides for the terms thereof. * * * It is significant that the statute did not prescribe the duties of the offices but simply provided that the officers so appointed `shall perform the same duties and receive the same emoluments as are now provided by existing laws.' It seems to us that this statute created no new offices but was for the purpose of replacing existing officers." Mr. Justice Trenchard, in Haythorn v. Van Keuren & Son, 79 N.J.L. 101 (Sup. Ct. 1909), states the settled rule, viz.:
"The presumption is that the word `shall' in a statute is used in an imperative and not in a directory sense. If a different interpretation is sought, it must rest upon something in the character of the legislation or in the context which will justify a different meaning. 25 Am. & Eng. Encycl. L. (2d Ed.) 633.
"There is nothing in the language of the section to indicate that the word `shall' was used in a permissive sense, * * *."
*150 Appellant concedes that the four sections of the 1920 act (including the repealer, section 4) constitute "a comprehensive, systematic, and self-contained charter, so to say, for the law departments of first class cities." We concur except insofar as it fails to fix salaries.
Appellant argues a further ground for reversal, viz.: that the positions of the respondents were invalid in that no ordinance fixing their salaries was ever adopted. The respondents argue that while the 1920 statute does not require a salary ordinance, during each of the years that they served as legal assistants, budget ordinances were enacted by the city appropriating the sums of money necessary to pay their salaries and, therefore, assuming arguendo that a salary ordinance was necessary, the budget ordinances satisfied the requirements of the Home Rule Act. Although we have concluded that the 1920 act created the positions in question, in order to make the appointments of the respondents legally effective, it was essential that another and further step be undertaken by the governing body, to wit: the adoption of an ordinance fixing the salaries for these positions. To constitute the respondents as de jure employees, they could not rely solely on the statutory creation of their positions under the 1920 act. The act in question made no provision for the fixing of salaries; therefore, the provisions of the Home Rule Act of 1917 became applicable. The 1920 act and the provisions of the Home Rule Act (R.S. 40:46-23; as amended, P.L. 1948, c. 282, p. 1188 and R.S. 40:48-1) are unquestionably in pari materia. R.S. 40:46-23, as amended, provides:
"The governing body may, by ordinance, notwithstanding any maximum or minimum limitation fixed by statute, fix and determine the salaries, wages or compensation to be paid to each officer and employee of the municipality who, by law, is entitled thereto, except the members of the governing body and mayor or other chief executive officer therein, * * *."
The salary of each of the respondents was fixed by resolution at the time of their respective appointments. The annual *151 budget ordinance, relied upon by respondents, could not in itself be characterized as a salary-fixing ordinance. The purpose of an annual municipal budget is to appropriate and provide the necessary monies for the payment of salaries and other administrative expenses during the year for which the budget is adopted. A reference to the annual budgets of Jersey City for the years in question disclose, inter alia, that appropriations in a lump sum were set up for the payment of salaries of those designated as "Assistants to the Corporation Counsel." No specific mention of the names of the respondents is made therein nor to the amount of salary to be paid them. The budget ordinance did not satisfy the statutory requirement. Van Brookhoven v. Kennedy, 125 N.J.L. 178 (Sup. Ct. 1940); affirmed on Supreme Court opinion, 125 N.J.L. 507 (E. & A. 1941). To give legal vitality to the positions in question, it was mandatory that the municipality, as an integral part of the action required to be undertaken by it, adopt a salary ordinance. Such an ordinance not having been adopted, the respondents are not entitled to the claimed positions. Toomey v. McCaffrey, 116 N.J.L. 364 (Sup. Ct. 1936); Davaillon v. Elizabeth, 121 N.J.L. 380 (Sup. Ct. 1938); Hale v. Town of Kearny, 99 N.J.L. 334 (Sup. Ct. 1924).
As to respondent Timney's cross-appeal, we find no merit therein. His appointment on January 1, 1949, as clerk of the Municipal Court, Part I, and chief clerk of all parts, was made pursuant to an ordinance adopted under the authority of P.L. 1948, c. 264, amended, P.L. 1948, c. 394 (R.S. 2:8A-1 et seq.). Under that act, the municipality was authorized (a) to provide for a clerk of the municipal court and to provide for compensation and (b) to designate any officer or employee of the municipality to serve as a clerk of the municipal court with or without additional compensation. Timney was "designated" to act as such clerk. Later, his designation was revoked and he was returned to his position as legal assistant. He had not resigned his position as legal assistant nor was that position terminated when he was *152 designated as clerk to the courts. Almost immediately after his designation as clerk had been terminated, he was dismissed as legal assistant. Under our determination, Mr. Timney is not entitled to restoration either to the position of court clerk or legal assistant.
The order of the Civil Service Department is reversed, without costs.
|
202 F.Supp. 212 (1962)
Application of Albert MYERS to Quash Summons Issued to Him by the Internal Revenue Service in Connection with the Tax Liability of Nathan Sherman and to Vacate the Service in Connection with the Tax Liability of Nathan Sherman and to Vacate the Service Thereof.
Misc. No. 2380.
United States District Court E. D. Pennsylvania.
February 28, 1962.
*213 Martin Heller, of Maximillian J. Klinger, Philadelphia, Pa., for applicant.
Carl Melone, Asst. U. S. Atty., Philadelphia, Pa., for the Government.
FREEDMAN, District Judge.
A Special Agent of the Internal Revenue Service of the United States Treasury Department summoned Albert Myers to appear before him at a hearing for the purpose of taking his testimony relating to an alleged tax liability of Nathan Sherman. The summons was issued by the Special Agent under Section 7602 of the Internal Revenue Code of 1954 (26 U.S. C.A. § 7602). The hearing was scheduled for February 28, 1962, at 10:00 A.M., in Room 1200, Gimbel Building, Philadelphia. By agreement of the parties the hearing was postponed to March 2, 1962, at 2:00 P.M.
Myers filed an Application to quash the summons and to vacate the service thereof to which he has now added an Amended Application. Since the Application to quash could not be heard and decided prior to the date of the hearing before the Special Agent, Myers has moved for a temporary stay of the Special Agent's hearing pending the decision on the Application to quash and vacate.
Notice has been given to the Government of the motion for a temporary stay and both sides have been heard.
It is clear that the purpose underlying the Special Agent's summons is to obtain information from Myers in aid of the Government's criminal trial of the indictment against Sherman, which is scheduled for Monday, March 5, 1962. Whatever action the Court will take now is likely for all practical purposes to constitute the ultimate decision. For if the motion is granted, it is unlikely that the Government will press for Myers' appearance after the trial of Sherman has been held; and if the motion is denied, the case will be moot when the time for final decision arrives.
In these circumstances we have carefully considered the motion as one which has the significance of finality rather than the simple maintenance of the status quo pending a future decision. We believe the Government's purpose, openly avowed, is contrary to our fundamental and deep-seated conceptions of fair play. See United States v. O'Connor, 118 F.Supp. 248 (D.C.Mass.1953). It aims to circumvent the policy of the Federal Rules of Criminal Procedure which deny the Government the advantage of pre-trial discovery. Surely the United States should set the example of law observance. It should not oppress a defendant who stands accused of a crime and whose liberty is at stake or his prospective witness by invoking in aid of a criminal charge the processes which Congress has authorized for the administration of the revenue laws. The Court will not permit evasion of the traditional procedure in criminal trials embodied in the Federal Rules of Criminal Procedure by resort to the great administrative powers in aid of the revenue laws which are granted by Section 7602 of the Internal Revenue Code of 1954 (26 U.S.C.A. § 7602). Such purpose of evasion clearly appears where, as here, the end sought is not the proper administration of the revenue laws but rather support for the charge against a defendant who is awaiting trial.
Accordingly we enter the following
*214 ORDER
AND NOW, February 28, 1962, the hearing pursuant to the summons issued by the Special Agent of the Internal Revenue Service of the United States Treasury Department directed to Albert Myers for the purpose of taking his testimony relating to the alleged tax liability of Nathan Sherman, is hereby preliminarily stayed and enjoined pending the final disposition of the Application, as amended, of Albert Myers to quash the summons and vacate the service thereof.
|
853 S.W.2d 749 (1993)
Russell Lee DANIELS, Appellant,
v.
The STATE of Texas, Appellee.
No. 01-92-00864-CR.
Court of Appeals of Texas, Houston (1st Dist.).
April 22, 1993.
*750 Leroy Chevalier, Houston, for appellant.
John B. Holmes, Jr., Scott A. Durfee, Chuck Stanfield, Houston, for appellee.
Before HEDGES, DUGGAN and O'CONNOR, JJ.
OPINION
HEDGES, Justice.
This case presents the question whether testimony that a quantity of cocaine residue was visible, without evidence that it was actually seen, suffices to establish that the appellant knew the substance he possessed was contraband. A jury convicted appellant, Russell Lee Daniels, of possession of a controlled substance weighing less than 28 milligrams. After appellant's pleas of true to two enhancement paragraphs, the trial court sentenced appellant to 40-years confinement. We affirm.
On October 30, 1991, Houston Police Department Officers Gary Young and Rolando Saenz stopped appellant because he fit the description of a burglary suspect. During a patdown search for weapons, Officer Saenz discovered a metal crack pipe in appellant's left hip pocket. Officer Young testified that he field-tested the pipe and that the pipe tested positive for cocaine residue. He did not remember whether he actually saw cocaine residue on the pipe. Officer Saenz testified that he did not remember giving the pipe to Officer Young to field-test, and that he was not present when the field test was performed.
Edna Nix, a chemist with the Houston Police Department Crime Laboratory, testified that she analyzed the contents of the pipe. Using the ultraviolet spectrophotometer, gas chromatography, and mass microcrystalline tests and spot tests, she calculated that the pipe contained 19.3 milligrams of pure cocaine. She did not remember whether she actually saw residue on the pipe. She testified that 19.3 milligrams of cocaine would be visible to the naked eye.
In one point of error, appellant asserts that the evidence was insufficient to show intentional possession of a controlled substance "because of the finite amount of the drug detected in the pipe recovered from appellant." We interpret his argument to be that because the State presented no testimony that cocaine residue was actually seen on the pipe, it failed to prove that appellant knowingly and intentionally possessed cocaine.
In reviewing the sufficiency of the evidence, this Court must view the evidence in the light most favorable to the verdict and consider whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); Villalon v. State, 791 S.W.2d 130, 132 (Tex.Crim.App.1990). To prove unlawful possession of a controlled substance, the State must prove that: (1) the accused exercised care, custody, control and management over the contraband; and (2) the accused knew the substance possessed was contraband. Mayes v. State, 831 S.W.2d 5, 6 (Tex.App.-Houston [1st Dist.] 1992, no pet.).
As authority for his argument, appellant relies solely on Campbell v. State, 822 S.W.2d 776 (Tex.App.-Houston [14th Dist.] 1992, pet. ref'd). In Campbell, police found a matchbox in the defendant's *751 pocket. A police chemist tested the box and found that it contained 0.6 milligrams of cocaine. The court of appeals held that if an amount of a controlled substance seized from a defendant can be seen and measured, it is sufficient to establish that the defendant knew it was a controlled substance. Id. at 777. The State has the burden to present evidence that "affirmatively links the accused to the contraband in such a manner and to such an extent that a reasonable inference may arise that the accused knew of the contraband's existence and that he or she exercised control of it." Id. The court found that because neither the arresting officer nor the chemist testified that the residue in the matchbox was visible to the naked eye, the State failed to carry its burden. Id.
This Court has similarly held that if the controlled substance can be seen and measured, the amount is sufficient to establish that a defendant knew it was a controlled substance. Mayes, 831 S.W.2d at 6; Jarrett v. State, 818 S.W.2d 847, 848 (Tex. App.-Houston [1st Dist.] 1991, no pet.); Thomas v. State, 807 S.W.2d 786, 789 (Tex. App.-Houston [1st Dist.] 1991, pet. ref'd). Much smaller quantities than that which appellant possessed have sufficed to uphold a conviction, so long as there was evidence of visibility: 9.5 milligrams, Simpson v. State, 668 S.W.2d 915, 918 (Tex.App.- Houston [1st Dist.] 1984, no pet.); 3.9 milligrams, Lavigne v. State, 782 S.W.2d 253, 255 (Tex.App.-Houston [1st Dist.], aff'd, 803 S.W.2d 302 (Tex.Crim.App.1990); 3.2 milligrams, Kent v. State, 562 S.W.2d 855, 856 (Tex.Crim.App.1978); 2.2 milligrams, Manuel v. State, 782 S.W.2d 335, 337 (Tex. App.-Houston [1st Dist.] 1989, pet. ref'd); 1.7 milligrams, Tomlin v. State, 338 S.W.2d 735, 737 (Tex.Crim.App.1960); 0.8 milligrams, Thomas v. State, 807 S.W.2d at 788; 0.3 milligrams, Alejandro v. State, 725 S.W.2d 510, 515 (Tex.App.-Houston [1st Dist.] 1987, no pet.).
In the case before us, the police chemist testified that she calculated the weight of the pipe residue to be 19.3 milligrams. Additionally, although neither the officers nor the chemist testified that they saw residue on the pipe, the chemist testified that 19.3 milligrams of cocaine would be visible to the naked eye. Thus, the amount of cocaine in the pipe found in appellant's left hip pocket could be seen and measured. Testimony of actual sighting is unnecessary in this case because the evidence of visibility is enough to convict.
Other factors support our conclusion that appellant intentionally possessed cocaine. The residue was found in a crack pipe, which is drug paraphernalia, and appellant concealed the pipe in his pocket. Both the apparatus and the conduct bolster the finding of knowing possession. See Jarrett, 818 S.W.2d at 848 (appellant's possession of cocaine inside crack pipe and his attempt to hide pipe from police indicate guilty knowledge); Chavez v. State, 768 S.W.2d 366, 368 (Tex.App.-Houston [14th Dist.] 1989, pet. ref'd) (baggie containing 0.5 milligrams of cocaine was type of bag commonly used to carry cocaine, and tended to prove defendant knowingly possessed cocaine); Alejandro, 725 S.W.2d at 515 (three syringes found on defendant tended to prove defendant knowingly possessed the 0.3 milligrams of cocaine found in the syringes).
Viewing the evidence in the light most favorable to the verdict, we find that the evidence was sufficient to support appellant's conviction. We overrule point of error one.
We affirm the judgment of the trial court.
|
United States Court of Appeals
For the Eighth Circuit
___________________________
No. 12-2719
___________________________
GoJet Airlines, LLC
lllllllllllllllllllllPetitioner
v.
Federal Aviation Administration
lllllllllllllllllllllRespondent
____________
Petition for Review of an Order of the
Federal Aviation Administration
____________
Submitted: September 24, 2013
Filed: March 4, 2014
____________
Before LOKEN, COLLOTON, and BENTON, Circuit Judges.
____________
LOKEN, Circuit Judge
Mechanics replaced a brake assembly on the main landing gear of a CRJ-700
airplane operated by GoJet Airlines, LLC. They installed gear pins to lock the
assembly in place during repairs, as the manufacturer’s Aircraft Maintenance Manual
instructed, but neglected to make an entry in the Flight Logbook that gear pins were
installed and should be removed before flight, as GoJet’s General Maintenance
Manual required. One of the gear pins was not removed. Consequently, after takeoff
on the plane’s next flight, a warning light alerted that the landing gear would not
retract, and the pilots returned to the departure airport.
GoJet immediately disclosed the gear pin error to the Federal Aviation
Administration (“FAA”), invoking the agency’s Voluntary Disclosure Reporting
Program (“VDRP”). Under the VDRP, the FAA will issue “a letter of correction in
lieu of civil penalty action” if an air carrier voluntarily discloses regulatory violations
and satisfies VDRP compliance requirements. One requirement is that the carrier
develop and execute a “comprehensive fix,” defined as “an action, or actions,
proposed by the [air carrier] and accepted by the [FAA] to preclude recurrence of the
apparent violation that has been voluntarily disclosed.” FAA Order No. 8900.1 CHG
0, at ¶¶ 11-4(B)(1), 11-5 (Sept. 13, 2007); FAA Advisory Circular No. 00-58A, at
¶¶ 4(b)(1), 6 (Sept. 8, 2006).1
The FAA accepted the VDRP notification, GoJet submitted a proposed
comprehensive fix, and FAA Inspector Gary Cooper rejected the proposal. When
GoJet did not meet Cooper’s deadline to propose an acceptable alternative, the FAA
commenced this civil penalty enforcement action. Cooper and GoJet’s chief
inspector, Jeffrey Craig, testified at the administrative hearing. The FAA Acting
Administrator ruled that GoJet violated FAA regulations when it failed to make the
logbook entry and to remove the gear pin. GoJet petitions for judicial review, arguing
it did not violate 14 C.F.R. §§ 91.13(a) and 121.153(a)(2) by carelessly or recklessly
operating an unairworthy airplane, and procedural error. We have jurisdiction to
review this final agency action. See 49 U.S.C. § 46110(a); 5 U.S.C. § 704.
1
These Orders have since been superseded by FAA Advisory Circular
No. 00-58B (Apr. 29, 2009), available at
http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgAdvisoryCircular.nsf/list/A
C%2000-58B/$FILE/AC%2000-58B.pdf; and by Order 8900.1, Vol. 11, Chap. 1,
CHG 57 (June 7, 2011), available at http://fsims .faa.gov/
PICDetail.aspx?docId=8900.1,Vol.11,Ch1,Sec1.
-2-
In reviewing the Administrator’s decision, we accept as conclusive findings of
fact that are supported by substantial evidence, that is, “such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.” King v. NTSB,
362 F.3d 439, 444 (8th Cir. 2004); see 49 U.S.C. § 46110(c). We overturn nonfactual
determinations only if they are “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); Edwards v. FAA, 367
F.3d 764, 767 (8th Cir. 2004). Agency action is arbitrary and capricious when the
agency “relied on factors which Congress has not intended it to consider, entirely
failed to consider an important aspect of the problem, [or] offered an explanation for
its decision that runs contrary 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.” Rochling v. Dep’t of Veterans Affairs, 725 F.3d 927, 937 (8th Cir. 2013).
Applying this deferential standard, we deny the petition for review.
I.
GoJet first argues that it did not commit violations of 14 C.F.R. § 121.153(a)(2),
which prohibits operating an unairworthy aircraft, and 14 C.F.R. § 91.13(a), which
prohibits “operat[ing] an aircraft in a careless or reckless manner so as to endanger the
life or property of another.”
A. The Alleged Airworthiness Violation. 14 C.F.R. § 121.153(a)(2) provides
that no air carrier “may operate an aircraft unless that aircraft . . . is in an airworthy
condition and meets the applicable airworthiness requirements of” 14 C.F.R., Ch. I.
The definition of an airworthy aircraft is well settled, a two-part test derived from the
statutory requirements for the airworthiness certificate now found in 49 U.S.C.
§ 44704(d): an airplane must conform to the type certificate approved for that model
-3-
aircraft and must be in a condition for safe operation. See 14 C.F.R. § 3.5(a); Copsey
v. NTSB, 993 F.2d 736, 738 n.1 (10th Cir. 1993).2
The type certificate issued for each aircraft model includes the aircraft’s original
design specifications and “terms required in the interest of safety,” including operating
restrictions. 49 U.S.C. § 44704(a)(2)(B); 14 C.F.R. § 21.41. As the CRJ-700 was
designed with retractable landing gear, the type design required all landing gear to be
operable. If a CRJ-700’s landing gear is inoperable, the airplane may not take off
unless the FAA has issued the carrier an approved special operating protocol known
as the Minimum Equipment List (“MEL”), which “constitutes an approved change to
the type design.” 14 C.F.R. § 121.628(a)(2).3 In this case, Craig admitted that GoJet
had neither used nor complied with the restrictions in an MEL. Cooper testified that
the failure to observe MEL restrictions meant the plane “would be flying not in the
configuration with the certificate that was issued [by the FAA] for that aircraft,”
making the plane “unairworthy.”
The Administrative Law Judge (“ALJ”), focusing on the second part of the
airworthiness definition, found that the risk of landing an overweight airplane when
the CRJ-700’s flight was aborted established that the airplane was not in a condition
for safe operation, and was therefore unairworthy. The Administrator rejected GoJet’s
administrative appeal on a different ground, concluding that the airplane was
2
49 U.S.C. § 44704 directs the FAA to issue a series of certificates to guarantee
the safety of aircraft such as the CRJ-700 operating in this country. The “type
certificate” approves its design specifications, the “production certificate” approves
production in accordance with the approved design, and an “airworthiness certificate”
approves each airplane produced. See United States v. S.A. Empresa de Viacao Aerea
Rio Grandense (Varig Airlines), 467 U.S. 797, 800-06 (1984).
3
For example, an MEL may allow an air carrier to defer repairs of an otherwise
inoperable airplane until it can be flown to a place where repair is more feasible.
-4-
unairworthy because, when flown with inoperable landing gear and without use of an
approved MEL, it did not conform to its type certificate.
In its petition for judicial review, citing testimony by Cooper and Craig that a
CRJ-700 can be flown safely when gear pins were not removed, GoJet argues that
substantial evidence does not support the ALJ’s finding that the airplane was not in
a condition for safe operation. This issue is not properly before us. We review only
the Administrator’s final agency action, not portions of the ALJ’s decision the
Administrator did not consider. See 49 U.S.C. § 46110(a); INS v. Orlando Ventura,
537 U.S. 12, 15 (2002); Simon v. Simmons Foods, Inc., 49 F.3d 386, 389-90 (8th Cir.
1995). The Administrator concluded that GoJet’s plane was unairworthy because it
did not conform to its type certificate, without reaching the ALJ’s alternative ground.
If we rejected the Administrator’s conclusion, our proper disposition would be to
remand for agency consideration of the ALJ’s alternative ground, not to address it
ourselves. Orlando Ventura, 537 U.S. at 16-18; Erickson v. U.S. Postal Serv., 571
F.3d 1364, 1371-72 (Fed. Cir. 2009). Thus, we do not consider this contention.
The Administrator’s ground for concluding that GoJet violated 14 C.F.R.
§ 121.153(a)(2) is not challenged on appeal. That should be the end of the matter, but
in any event we find no plain error on this administrative record. The Administrator’s
written decision, and the FAA’s brief to this court, take the position that any type-
certificate nonconformity warrants a finding that the air carrier violated 14 C.F.R.
§ 121.153(a)(2) by operating an unairworthy aircraft. That position finds support in
Morton v. Dow, 525 F.2d 1302, 1307 (10th Cir. 1975). But as the record does not
reveal all the conditions the FAA might consider type-certificate nonconformities, we
neither approve nor reject this interpretation of the regulation. Rather, we conclude
that the type-certificate nonconformity in this case -- inoperable landing gear -- was
so clearly related to safe operation of the airplane that a finding the airplane was not
airworthy was clearly warranted based solely on this nonconformity. GoJet’s
evidence that a CRJ-700 with fixed landing gear can be flown in compliance with its
-5-
type certificate through the use of approved MEL procedures is irrelevant because
those procedures were not used. Accordingly, the Administrator did not err in
determining that GoJet violated § 121.153(a)(2). “[A]irworthiness does not mean
flyability.” Copsey, 993 F.2d at 739.
B. The Alleged Residual Violation. GoJet next argues the Administrator erred
in ruling that GoJet carelessly or recklessly operated the aircraft in violation of 14
C.F.R. § 91.13(a). Like the ALJ, the Administrator concluded that careless or reckless
operation was a residual violation of GoJet operating an unairworthy aircraft: “Once
the agency shows that a respondent has operated an unairworthy aircraft,” the
Administrator ruled, “a violation of Section 91.13(a), follows as a residual violation,
unless extraordinary circumstances are present.”4 We upheld the finding of a
§ 91.13(a) violation predicated on violations of other regulations in Crawford v.
Engen, 823 F.2d 201, 203-04 (8th Cir. 1987). GoJet nonetheless argues that this case
presented extraordinary circumstances because the CRJ-700 could be safely flown
with fixed landing gear and thus posed no actual danger to anyone’s life or property.
The Administrator’s decision that GoJet failed to establish extraordinary
circumstances was not arbitrary or capricious. A violation of § 91.13(a) does not
require proof of actual danger to lives or property; the potential for danger is enough.
See Watkins v. NTSB, 178 F.3d 959, 962 (8th Cir. 1999), and cases cited. At the
hearing, FAA Inspector Cooper explained how the operation of a CRJ-700 with
inoperable landing gear posed potential danger, including the danger associated with
an overweight landing. The Administrator did not err in crediting this testimony and
finding that GoJet violated 14 C.F.R. § 91.13(a).
4
The agency imposed no additional civil penalty for the residual violation.
-6-
II.
GoJet argues the FAA erred procedurally when Inspector Cooper unilaterally
terminated the VDRP process and the agency commenced civil penalty proceedings.
The first question -- not addressed by either party -- is whether the FAA’s decision to
terminate the VDRP procedure in a particular case is judicially reviewable. The issue
is not free from doubt.5 The VDRP is an FAA policy, not a part of the agency’s
procedural rules and substantive regulations. Significantly, the policy “pertains to an
agency’s exercise of its enforcement discretion -- an area in which the courts have
traditionally been most reluctant to interfere.” Brock v. Cathedral Bluffs Shale Oil
Co., 796 F.2d 533, 538 (D.C. Cir. 1986) (Scalia, J.), citing Heckler v. Chaney, 470
U.S. 821 (1985), and other cases. Subject to Equal Protection Clause constraints, a
federal agency’s decision to commence a civil enforcement action is, like the charging
decision of a criminal prosecutor, normally deemed to be unreviewable because it is
an action “committed to agency discretion by law,” 5 U.S.C. § 701(a)(2).
This narrow “presumption of unreviewability” does not apply if “Congress has
provided us with ‘law to apply,’” Heckler, 470 U.S. at 834, or if the agency has made
clear its intent that a policy statement or set of enforcement guidelines impose binding
limitations on the exercise of its enforcement discretion. Compare South Dakota v.
Ubbelohde, 330 F.3d 1014, 1028-29 (8th Cir. 2003) (Corps of Engineers Master
Manual is a binding policy statement), cert. denied, 541 U.S. 987 (2004), with Sec’y
of Labor v. Twentymile Coal Co., 456 F.3d 151, 158-59 (D.C. Cir. 2006) (Mine Act
enforcement guidelines are not binding norms limiting agency discretion), and
Cathedral Bluffs, 796 F.2d at 537-38 (same). In applying this standard, it is relevant
whether the agency policy or procedural rule at issue is “intended primarily to confer
5
For an example of the potential complexity of such procedural issues, see
Ass’n of Irritated Residents v. EPA, 494 F.3d 1027 (D.C. Cir. 2007).
-7-
important procedural benefits upon individuals in the face of otherwise unfettered
discretion.” Rochling, 725 F.3d at 939 (quotation omitted).
Here, the stated purpose of the VDRP is to encourage voluntary disclosure and
compliance by advising certificate holders of circumstances in which the FAA will
refrain from commencing civil penalty actions. The VDRP prescribes how the agency
“will” proceed if it accepts a certificate holder’s initial notice of apparent violation,
language that implies the Program is intended to be binding. Ubbelohde, 330 F.3d at
1028. And the fact that the Administrator considered the merits of GoJet’s procedural
defense in this case, rather than rejecting it because the decision to commence a civil
penalty proceeding is an unreviewable exercise of enforcement discretion, is further
evidence the VDRP is meant to limit that discretion. In these circumstances, we
conclude the agency has provided us with sufficient “law to apply,” that is, the FAA
has made clear its intent that, when it accepts a certificate holder’s notice of voluntary
disclosure, the VDRP Program imposes binding limitations on how the agency will
thereafter exercise its enforcement discretion. Therefore, the Administrative
Procedure Act’s presumption that agency actions are subject to judicial review
applies, and we turn to the merits of GoJet’s procedural defense. See 5 U.S.C. § 702;
Ubbelohde, 330 F.3d at 1027. As the VDRP is a policy prescribing the agency’s
procedures, not its substantive standards for enforcing the regulations at issue, our
review is for abuse of discretion, deferentially bearing in mind that “administrative
agencies should be free to fashion their own rules of procedure and to pursue methods
of inquiry capable of permitting them to discharge their multitudinous duties.” Vt.
Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 543
(1978) (quotation omitted); cf. Oberstar v. FDIC, 987 F.2d 494, 504 (8th Cir. 1993).
GoJet argues (as it did to the Administrator) that after rejecting a proposed
comprehensive fix GoJet reasonably believed would resolve violations it voluntarily
disclosed, Inspector Cooper unilaterally terminated the VDRP process and initiated
-8-
this enforcement action, arbitrarily denying GoJet an opportunity to pursue a
discretionary administrative appeal the VDRP expressly authorizes:
When disputes occur regarding the acceptance of a proposed
comprehensive fix . . . the principal inspector and the pertinent regulated
entity may request that the issue be resolved at the next level of
management within the FAA. This procedure will provide for an
independent assessment of the areas in disagreement.
Order 8900.1 at ¶ 11-12; AC 00-58A at ¶ 13.
The hearing record reflects that GoJet’s proposed comprehensive fix was
simply to counsel the mechanic who had made inadvertent errors. By letter dated
January 25, 2008, to GoJet’s chief operating officer, Inspector Cooper responded that
GoJet’s proposal-
does not preclude recurrence of this violation. The mechanic involved
knew of the [General Maintenance Manual] requirement to make a
logbook entry stating the landing gear pin was installed prior to this
incident, and yet still forgot to make the entry. . . . The comprehensive
fix should prevent the same mechanic, or any other mechanic, from
forgetting to make the logbook entry and subsequently forgetting to
remove the gear pins following maintenance.
The letter advised GoJet that “[f]ailure to provide a comprehensive fix acceptable to
this office by the close of business on February 8, 2008 will result in the self-
disclosures being closed out of the web based VDRP system and processed as
enforcement[].”6 Cooper testified that he suggested to Craig that a pin-removal
checklist be added to the manual mechanics consult during brake replacements.
6
The administrative record conclusively refutes GoJet’s assertion that Inspector
Cooper unilaterally terminated the VDRP process -- his January 25 letter was
reviewed by two supervisors.
-9-
Unwilling to adopt this suggestion, GoJet offered no alternative for the FAA to
consider, and made no attempt to seek review of the comprehensive fix dispute at the
next level of FAA management.
In rejecting GoJet’s procedural defense, the Administrator noted the VDRP
expressly provides that a proposed comprehensive fix must be “satisfactory to the
FAA,” and must be “satisfactorily implemented and completed,” before the FAA will
close a VDRP case with no enforcement action. Order 8900.1 at ¶¶ 11-4(C), 11-11;
AC 00-58A at ¶¶ 4(c), 12.7 The Administrator rejected GoJet’s contention that
Cooper did not permit GoJet to elevate its comprehensive fix dispute to the next level
of FAA management because Cooper’s January 25, 2008, letter gave GoJet an
opportunity to elevate the dispute, but GoJet failed to ask Cooper or his supervisor for
review at the next level. We agree.
Cooper’s letter clearly stated his position and gave GoJet a deadline to submit
a satisfactory comprehensive fix or face enforcement action. When GoJet elected not
to accept Cooper’s suggested comprehensive fix, it knew the negotiations were
deadlocked and the time to seek elevation of the dispute was at hand. Once Cooper’s
deadline passed, the VDRP did not require further notice to GoJet before the FAA
commenced a civil penalty action. GoJet simply failed to pursue the VDRP’s informal
review procedure. In these circumstances, deferentially reviewing the FAA’s
adherence to VDRP procedures, we find no basis to conclude that the agency abused
7
It is hardly surprising that a policy declaring when the FAA will not exercise
its statutory discretion to commence enforcement proceedings requires that an
informal resolution of the disclosed violations be to the agency’s satisfaction.
-10-
its discretion in terminating this VDRP self-disclosure proceeding and commencing
a civil penalty action.
For the foregoing reasons, we deny the petition for review.
______________________________
-11-
|
642 F.3d 702 (2011)
PACIFIC INDEMNITY COMPANY, Plaintiff-Appellee,
v.
ATLAS VAN LINES, INC., Defendant-cross-defendant-Appellee,
v.
Pickens Kane Moving & Storage Company, a corporation, Defendant-cross-claimant-Appellant.
Pacific Indemnity Company, Plaintiff-Appellee, *703
Atlas Van Lines, Inc., Defendant-cross-defendant-Appellant,
v.
Pickens Kane Moving & Storage Company, a corporation, Defendant-cross-claimant-Appellee.
Nos. 09-17824, 10-16260.
United States Court of Appeals, Ninth Circuit.
Submitted March 17, 2011.[*]
Filed April 20, 2011.
*705 John T. Schriver, Duane Morris LLP, Chicago, IL, for Pickens Kane Moving & Storage.
Jeffrey R. Simmons, Julie E. Maurer, and Andrea G. Lisenbee, Ryley Carlock & Applewhite, Phoenix, AZ, for Atlas Van Lines.
Before: THOMAS M. REAVLEY, M. MARGARET McKEOWN, and RICHARD A. PAEZ, Circuit Judges.[**]
OPINION
REAVLEY, Circuit Judge:
Pacific Indemnity Co. ("Pacific") brought suit for carrier liability pursuant to 49 U.S.C. § 14706, the Carmack Amendment, against Atlas Van Lines, Inc. ("Atlas") and Pickens Kane Moving & Storage Co. ("Pickens") to recover $1 million in damages Pacific paid to its insureds, Ina and Murray Manaster, (the "Manasters") when the Manasters' shipment of household goods was destroyed by a fire while in transit from Chicago to Phoenix. Pickens was the receiving carrier, and the goods were destroyed in the custody of Atlas. Atlas and Pickens filed cross-claims against each other, also for carrier liability. On summary judgment, the district court held that Atlas was liable to both Pacific and Pickens for $52,500.00 or $5.00 per pound and that Pickens was liable to Pacific for $1 million. Additionally, the district court held that as to the cross-claims between Atlas and Pickens, Pickens was the prevailing party and, therefore, entitled to an award of the entirety of its expenses. Pickens appeals the district court's judgment that Atlas is responsible for anything less than the full replacement value of the goods. Atlas appeals the district court's judgment awarding costs to Pickens. We affirm.
Background
The facts of this case are relatively straight-forward and not in dispute. The Manasters desired to move their household goods, consisting mainly of fine arts and antiques, from Chicago to Phoenix. They requested a quote from Pickens. Pickens, in turn, requested a quote from nonparty TCIa freight broker. TCI then requested a quote from Atlas. Atlas provided TCI with a quote based on the minimum tariff of $.60 per pound. TCI then submitted the quote to Pickens with the notation that the quote did not include insurance. Pickens submitted a quote to the Manasters. The Manasters requested $1 million in insurance coverage and the rate was adjusted accordingly. Pickens contracted with TCI, who contracted with Atlas for the shipment at the per pound rate, but Pickens never informed TCI or Atlas of the $1 million valuation.
On November 2, 2006, Atlas picked up the Manasters' household goods from the Pickens warehouse. The Atlas bill of lading was signed by Pickens' representative as shipper and by Atlas' driver as carrier, and it listed the Manasters as the consignee. *706 The bill of lading had a valuation section on its first page as follows:
VALUATION: The released rates[1] for shipments moving under this bill of lading vary with the services provided under the tariff and Carrier's tariff is incorporated into this bill of lading for determination of which released rate applies. Shipper has released the entire shipment to a value not exceeding:
(TO BE COMPLETED BY THE SHIPPER SIGNING BELOW)
[] The maximum released rate set forth in the tariff for shipments on which specified services are being provided, which may be either $.60 per pound per article or $5.00 per pound. (This is not insurance but a limit on Carrier's Liability.)
[] The declared value for the property of $_______. If this amount exceeds the maximum released rate in the tariff, Carrier shall obtain insurance in the amount on Shipper's behalf for the charges set forth in the tariff.
IF NO DECLARATION IS MADE, THE SHIPMENT SHALL BE DEEMED RELEASED TO THE VALUE SET FORTH IN THE TARIFF.
Pickens' representative signed the bill of lading but did not choose either option and did not indicate a declared value for the property.
Pickens also had a bill of lading for warehouse labor. In the signature block of the bill of lading, Pickens' representative signed as the carrier and Atlas' driver signed as the shipper. The valuation section of the bill of lading read:
SHIPPER MUST COMPLETE THIS VALUATION DESIGNATION
Unless the shipper expressly releases the shipment to a value of $.30 per pound per article, the mover's maximum liability for loss of or damage to the shipment shall be an amount equal to $2.00 for each pound of weight in the shipment or the lump sum value declared by the shipper on this form, whichever is greater, subject to the valuation charges in the applicable tariff on file with the Illinois Commerce Commission.
If the shipper wishes to avoid these additional charges, the shipper must agree that if any articles are lost or damaged, the mover's liability will not exceed 30 cents per pound for the actual weight for any lost or damaged article or articles in the shipment.
The shipment shall move subject to the rules and conditions of the mover's tariff. Shipper hereby releases the entire shipment to a value not exceeding:
Again, the valuation section of the bill of lading was left blank.
The Manasters' property was destroyed by fire during transport while in the custody of Atlas. Pacific paid the Manasters' claim in full for $1 million and was subrogated to their interests. Pacific then filed suit in the District Court of Arizona for carrier liability under the Carmack Amendment against both Pickens and Atlas. Pickens and Atlas cross-claimed against each other also for carrier liability.[2] Pacific moved for summary judgment *707 against Pickens and Atlas. Pickens moved for summary judgment against Atlas. Atlas moved for partial summary judgment against Pacific and Pickens to limit its liability.
The district court held that Atlas was liable to both Pacific and Pickens for $52,500.00 or $5.00 per pound, and that Pickens was liable to Pacific for $1 million. Pickens moved for reconsideration, which the district court denied. Pickens also moved for reasonable expenses from Atlas. The district court granted that motion, holding that Pickens, as the prevailing party, was entitled to recover the entirety of its expenses from Atlas. Pickens appealed from the judgment, specifically the apportionment of damages. Atlas separately appealed the judgment, specifically the award of costs to Pickens. The appeals were consolidated and are now before the court.
Analysis
The Carmack Amendment is a part of the Interstate Commerce Act, which "provides the exclusive cause of action for interstate shipping contract claims." White v. Mayflower Transit, L.L.C., 543 F.3d 581, 584 (9th Cir.2008). Two sections of the Carmack Amendment are at issue in this case. The first is § 14706(f), entitled "Limiting liability of household goods carriers to declared value." The section reads:
(1) In general.A carrier or group of carriers subject to jurisdiction under subchapter I or III of chapter 135 may petition the Board to modify, eliminate, or establish rates for the transportation of household goods under which the liability of the carrier for that property is limited to a value established by written declaration of the shipper or by a written agreement.
(2) Full value protection obligation. Unless the carrier receives a waiver in writing under paragraph (3), a carrier's maximum liability for household goods that are lost, damaged, destroyed, or otherwise not delivered to the final destination is an amount equal to the replacement value of such goods, subject to a maximum amount equal to the declared value of the shipment and to rules issued by the Surface Transportation Board and applicable tariffs.
(3) Application of rates.The released rates established by the Board under paragraph (1) (commonly known as "released rates") shall not apply to the transportation of household goods by a carrier unless the liability of the carrier for the full value of such household goods under paragraph (2) is waived, in writing, by the shipper.
49 U.S.C. § 14706(f). In 2005, Congress added subsections (2) and (3), which form the basis of Pickens' argument. The interpretation of these subsections is a matter of first impression.[3]
The second provision of the Carmack Amendment at issue here is the cost apportionment provision which reads:
The carrier issuing the receipt or bill of lading under subsection (a) of this section or delivering the property for which the receipt or bill of lading was issued is entitled to recover from the carrier over whose line or route the loss or injury *708 occurred the amount required to be paid to the owners of the property, as evidenced by a receipt, judgment, or transcript, and the amount of its expenses reasonably incurred in defending a civil action brought by that person.
49 U.S.C. § 14706(b). We have not addressed the possible apportionment of costs among carriers. It is also a matter of first impression.
1. Replacement Value of Household Goods
On summary judgment, the district court held that Atlas was liable to both Pacific and Pickens for $52,500.00 or $5.00 per pound, and that Pickens was liable to Pacific for $1 million. Pickens does not appeal the assessment of liability itself, rather it argues that the apportionment of the damages was in error. "We review the grant of summary judgment de novo." Ventura Packers, Inc. v. F/V JEANINE KATHLEEN, 305 F.3d 913, 916 (9th Cir. 2002). The district court's interpretation of 49 U.S.C. § 14706 is a question of law, which we review de novo. Id. One reason that the district court apportioned the damages as it did was that it construed 49 U.S.C. §§ 14706(f)(2) and (3) to limit Atlas' liability to the tariff amount of $5.00 per pound in the absence of a declared value. We agree.
The Carmack Amendment allows carriers to limit their liability for shipments of household goods under certain circumstances. In particular, "[u]nless the carrier receives a waiver in writing under paragraph (3), a carrier's maximum liability for household goods that are lost, damaged, destroyed, or otherwise not delivered to the final destination is an amount equal to the replacement value of such goods[.]" 49 U.S.C. § 14706(f)(2). However, that subsection goes on to say that "the replacement value of such goods [is] subject to a maximum amount equal to the declared value of the shipment and to rules issued by the Surface Transportation Board and applicable tariffs." Id.
Here, Pickens failed to declare a value for the shipment. It argues that, in the absence of a written waiver, the failure entitles Pickens to the full replacement value of the shipment. And, it urges that the full replacement value in this case is $1 million. Pickens is partially correct; it is entitled to the replacement value, but that value is $52,500.00. Subsection (f)(2) states that the replacement value of the household goods is subject to or conditioned upon several possible factors. The first is the declared value of the property. Since there is no declared value in this case, that condition is not implicated.
Replacement value is also conditioned on the rule issued by the Surface Transportation Board (the "Board"). The Board has determined that "when a shipper elects the [full value protection] option but neglects to write a valuation figure on the bill of lading or contract" the carrier is liable for an assumed valuation "set at $5,000 or $4.00[4] times the actual total weight in pounds of the shipment, whichever is greater." Released Rates of Motor Common Carriers of Household Goods, Amendment No. 5 to Released Rates Decision No. MC-999, 2007 WL 1696990 (S.T.B. June 11, 2007) ("S.T.B. Amendment 5"). In other words, when a shipper does not a declare a value for a shipment, the replacement value is deemed to be $4.00 per pound or a minimum of $5,000.00. Id.
Congress gave the Board primary authority for enforcement of the Interstate *709 Commerce Act. Fulfillment Servs., Inc. v. United Parcel Serv., Inc., 528 F.3d 614, 616-17 (9th Cir.2008). "Where there is a challenge to the agency's interpretation of the statute that it administers, we apply the analytical framework set forth in Chevron[.]" DHX, Inc. v. Surface Transp. Bd., 501 F.3d 1080, 1086 (9th Cir.2007) (internal citation omitted). "`If the intent of Congress is clear... [we] must give effect to the unambiguously expressed intent of Congress.'" Id. (quoting Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-44, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984)). "If however, the meaning of the statute is ambiguous, `the question for the court is whether the agency's answer is based on a permissible construction of the statute.'" Id. (quoting Chevron, 467 U.S. at 843, 104 S.Ct. at 2782). "`[T]he court does not simply impose its own construction on the statute....'" Id. (quoting Chevron, 467 U.S. at 843, 104 S.Ct. at 2782). Since the statute itself is arguably ambiguous regarding shipments with no declared value, we must ask whether the Board's order was permissible. See id.
Reviewing § 14706 as a whole, it is evident that the Board's order regarding undeclared value is permissible. Subsection (f) is entitled "Limiting liability of household goods carriers to declared value." § 14706(f) (emphasis added). The Board's rule does just that. S.T.B. Amendment 5. It prevents carriers from being subjected to unlimited liability when cargo of undeclared value is destroyed. And, it also protects an unwary shipper from unscrupulous carriers by setting the replacement value at the higher tariff amount of $4.00 per pound,[5] instead of the released rate of $.60 per pound. We presume that Congress was aware of the Board's interpretation of the valuation of shipments with an undeclared value when it amended the Carmack Amendment in 2005. Traynor v. Turnage, 485 U.S. 535, 546, 108 S.Ct. 1372, 1380, 99 L.Ed.2d 618 (1988). Congress made no express provision for replacement values of undeclared shipments but instead chose to condition the replacement value on the Board's rules. § 14706(f)(2). The Board's rule is based on a permissible interpretation of subsections (f)(2) and (f)(3). Therefore, it must be accorded deference. DHX, 501 F.3d at 1086.
Last, the replacement value is conditioned on "applicable tariffs." § 14706(f)(2). The $4.00 per pound tariff was approved by the Board after full notice and comment rule-making. Released Rates of Motor Common Carriers of Household Goods, Amendment No. 4 to Released Rates Decision No. MC-999, 2001 WL 1637941 (S.T.B. Dec. 21, 2001). Atlas adjusts this tariff to $5.00 per pound in its exceptions to tariffs. The fact that this tariff was applicable to shipments with undeclared values was based on the Board's rule discussed above. The plain language of the statute and the Board's interpretation of the statute operate to limit Atlas' liability to the tariff amount on these facts.
Pickens argues that the published tariff of $4.00 per pound cannot apply here because subsection (f)(3) states that "[t]he released rates ... shall not apply to the transportation of household goods by a carrier unless the liability of the carrier for the full value of such household goods under paragraph (2) is waived, in writing, by the shipper." § 14706(f)(3). But again, *710 without a declared value for the goods, the replacement value is deemed to be the tariff of $4.00 per pound as described above. While Pickens did not waive its entitlement to the "full value of such household goods under paragraph (2)," because it failed to declare a value for the shipment, the full value is deemed to be the tariff of $4.00 per pound pursuant to paragraph (2) as described above. The district court correctly interpreted these subsections.
2. Apportionment of Costs
Atlas appeals the district court's judgment awarding Pickens all of its requested costs under § 14706(b), totaling $74,402.35. A district court's award of costs is reviewed for an abuse of discretion. Miles v. California, 320 F.3d 986, 988 (9th Cir.2003). "If an exercise of discretion is based on an erroneous interpretation of the law, the ruling should be overturned." Id.
On appeal, Atlas now makes three arguments. First, Atlas contends that because the district court held Pickens liable to Pacific for $1 million, Pickens is not an innocent party and therefore not entitled to shift its costs to Atlas. Citing no law for this proposition, Atlas contends that in order to recover expenses under § 14706(b), Pickens must be completely blameless. Although that interpretation could be plausible if the damage to the shipment occurred while in the custody of both Atlas and Pickens, on the facts of this case, the argument fails.
The Carmack Amendment imposes strict liability upon receiving carriers and delivering carriers in order to "relieve cargo owners `of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.'" Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., ___ U.S. ___, 130 S.Ct. 2433, 2441, 177 L.Ed.2d 424 (2010) (quoting Reider v. Thompson, 339 U.S. 113, 119, 70 S.Ct. 499, 502, 94 L.Ed. 698 (1950)); 49 U.S.C. § 14706(a). Section 14706(b) allows the carrier held initially liable to recover from the carrier in control of the shipment when it was damaged. § 14706(b); Mason & Dixon Intermodal, Inc. v. Lapmaster Int'l LLC, 632 F.3d 1056, 1062-64 (9th Cir.2011) (citing Georgia, Florida, & Alabama Ry. v. Blish Milling Co., 241 U.S. 190, 196, 36 S.Ct. 541, 544, 60 L.Ed. 948 (1916)). Atlas does not deny that the shipment was destroyed while in Atlas' care. If Pickens had properly declared the value of the shipment and paid the insurance fees to Atlas, Atlas would have owed the entire $1 million. Under the plain language of the statute, Pickens is entitled to its reasonable fees from the carrier over whose line or route the injury occurred here, Atlas. See § 14706(b).
Second, Atlas argues that the district court erred when it determined that Pickens was the prevailing party. Atlas argues that because Pickens recovered only $52,500 of the $1 million it sought, Pickens did not prevail. It is inappropriate to apply the prevailing party analysis here, because this statute entitling Pickens to recover its costs contains no prevailing party requirement. § 14706(b). This is unlike the language in the same statutory scheme awarding attorney's fees to shippers. Section 14708(d) states that "[i]n any court action to resolve a dispute between a shipper of household goods and a carrier providing transportation or service..., the shipper shall be awarded reasonable attorney's fees if ... the shipper prevails in such court action[.]" § 14708(d)(2). "[W]hen Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally *711 and purposely in the disparate inclusion or exclusion." Barnhart v. Sigmon Coal Co., 534 U.S. 438, 452, 122 S.Ct. 941, 951, 151 L.Ed.2d 908 (2002) (internal quotations omitted). Therefore, a prevailing party analysis is not necessary, nor even proper, under § 14706(b).
In its last point, Atlas argues that because the costs are awarded under a subsection entitled apportionment, Pickens should be entitled to only 5.25% of its costs, the same percentage of the total damages attributed to Atlas. Atlas is really challenging the reasonableness of the award. The statute provides a mechanism for unreasonable or disproportionate costs by allowing recovery of the amount of expenses "reasonably incurred." § 14706(b). At the district court level, Atlas did not contest the reasonableness of the fees, except in relation to the judgment. It has therefore waived its ability to raise the issue now. E.E.O.C. v. Farmer Bros. Co., 31 F.3d 891, 901 (9th Cir. 1994). However, even if Atlas had not waived the argument it is unavailing. As discussed above, Pickens was not the carrier in whose custody the shipment was destroyed and was therefore not liable for the damage in this case. If the actual damage had occurred in the custody of several carriers, then perhaps the costs would be apportioned among them. However, on the facts of this case. Atlas had custody of the shipment when it was destroyed and is liable to Pickens. Therefore, Pickens is entitled to its costs under § 14706(b).
The judgment of the district court is AFFIRMED.
NOTES
[*] The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R.App. P. 34(a)(2).
[**] The Honorable Thomas M. Reavley, Senior United States Circuit Judge for the Fifth Circuit, sitting by designation.
[1] "Released rates" are rates approved by the Surface Transportation Board which a carrier may use to limit its liability through the written declaration of the shipper. 49 U.S.C. § 14706(f)(1); Released Rates of Motor Common Carriers of Household Goods, Amendment No. 5 to Released Rates Decision No. MC-999, 2007 WL 1696990 (S.T.B. June 11, 2007).
[2] Pacific also amended its suit to add common law negligence claims. Those claims were dismissed as preempted by the Carmack Amendment. Pacific does not appeal the judgment of the district court.
[3] Aside from the district court in this case, the only other court to address these subsections is the United States District Court for the Eastern District of Virginia in an unpublished opinion. Boles v. Destination Movers, Inc., No. 1:09-cv-19, 2009 WL 1974459 (E.D.Va. Jul. 6, 2009).
[4] Atlas adjusted this amount to $5.00 per pound in its Exceptions to [Household Goods] Tariff 400 Series. Carriers are allowed to adjust the tariffs upwards in their exceptions.
[5] In 2001 the Board found that the average value for a shipment of household goods was $4.50 per pound. Released Rates of Motor Common Carriers of Household Goods, Amendment No. 4 to Released Rates Decision No. MC-999, 2001 WL 1637941, at *3 (S.T.B. Dec. 21, 2001).
|
770 S.W.2d 764 (1989)
BILL WALKER & ASSOCIATES, INC., Plaintiff/Appellee,
v.
Mark PARRISH, d/b/a Parco Enterprises, Inc., Defendant/Appellant.
Court of Appeals of Tennessee, Middle Section, at Nashville.
February 10, 1989.
Permission to Appeal Denied May 1, 1989.
*765 David M. Smythe, King & Ballow, Nashville, for plaintiff/appellee.
Steve North, Nashville, for defendant/appellant.
Permission to Appeal Denied by Supreme Court May 1, 1989.
OPINION
KOCH, Judge.
This appeal involves a dispute over a contract to advertise several country music concerts in Texas. The public relations agency that performed the services filed suit in the Chancery Court for Davidson County after the promoter refused to pay. Following a bench trial, the trial court found that the promoter was personally liable for the debt and awarded the agency $23,728.97. The promoter has appealed. We affirm the judgment but for reasons different from those relied upon by the trial court.
I.
Mark A. Parrish is an accountant and real estate broker who has been involved in various aspects of the entertainment industry in Nashville for many years. He staged and promoted concerts in 1960's and, more recently, owned and operated a hockey team called the Nashville Dixie Fliers.
In 1985, Mr. Parrish was approached by Xavier Cosse, a former employee, about promoting concerts again. Mr. Cosse had some prospects but no funds. Mr. Parrish agreed that he would provide the financial backing for the venture and that Mr. Cosse would look after the day-to-day operation of the business. Mr. Parrish formed Pioneer American Realty Co., Inc. ("Pioneer American") as the corporate vehicle for the venture. He and Mr. Cosse referred to the corporation as "PARCO" or "PARCO, Inc." because they had done business under this name before.
Mr. Parrish's and Mr. Cosse's first venture was a Perry Como concert in Nashville in September, 1985. As their next venture, they undertook to present a series of concerts between January 8 and 11, 1986, in *766 Texas starring the Mills Brothers, Boots Randolph, and Floyd Cramer.
In November, 1985, Mr. Cosse contracted with Bill Walker & Associates, Inc. ["BWA, Inc."], a Nashville public relations firm, to assist with the marketing and promotion of the Texas concerts. BWA, Inc. agreed to develop a publicity campaign for the concerts, to prepare press kits, and to prepare and place newspaper, television, and radio advertisements for the concerts in the proper markets.
BWA, Inc. began to develop the campaign and to prepare the advertising copy. In the latter part of November, 1985, it requested funds to be used to buy newspaper advertising space. Mr. Cosse told the agency that he would "get with Mr. Parrish and get the money." However, because the deadline for reserving newspaper space was quickly approaching, BWA, Inc. used its own funds to buy the space. Mr. Cosse agreed to pay for these costs.
BWA, Inc. also told Mr. Cosse that it wanted a signed contract. Mr. Cosse told the agency to send a contract to him and he would "get with Mr. Parrish and get it signed and get it back to [them]." BWA, Inc. prepared its standard, one-page agreement for Mr. Parrish's signature and gave it to Mr. Cosse on December 18, 1985, along with a statement for $11,838.85 for its media expenditures.
Mr. Parrish signed the contract on December 18, 1985, even though he questioned the meaning of some of its language. Mr. Cosse mailed the signed contract back to BWA, Inc. on December 20, 1985, and BWA, Inc.'s president signed it shortly thereafter.
The contract Mr. Parrish signed on December 18, 1985, states as follows:
*767
BWA, Inc. continued to perform in accordance with the agreement after the contract was signed. In late December, 1985, Mr. Parrish and Mr. Cosse cancelled the Lubbock concert, and BWA, Inc. was required to work over the New Year's holiday to cancel radio spots and newspaper advertising in order to obtain refunds of the advertising fees it had already paid.
In January, 1986, BWA, Inc. sent Mr. Cosse a bill for its services. It sent him a revised bill in March, 1986. Mr. Cosse agreed to all the charges in the revised bill *768 except for a $2,670 charge for the production of the advertising copy. BWA, Inc. hand delivered two "past due notices" to Mr. Parrish after he and Mr. Cosse declined to meet concerning the bill. Despite receiving these notices, Mr. Parrish refused to pay the bill or to acknowledge that he was responsible for its payment.
BWA, Inc. filed an action against Mr. Parrish personally in June, 1986. Mr. Parrish answered in July, 1986, asserting that he was not liable for the debt because he had signed the contract solely in his "representative capacity as President of Pioneer American Realty Company, Inc."
On August 25, 1986, Pioneer American filed a Chapter 7 petition in the United States Bankruptcy Court for the Middle District of Tennessee. Among the approximately $425,000 in debts it sought to discharge was its $17,089.92 unsecured debt to BWA, Inc. While the bankruptcy proceeding was pending, the trial court heard the evidence concerning BWA, Inc.'s claim against Mr. Parrish and, on May 17, 1988, entered an order awarding BWA, Inc. a $23,728.97 judgment against Mr. Parrish personally.
II.
We turn first to Mr. Parrish's argument that the trial court did not have "subject matter" jurisdiction over the lawsuit against him. Citing 28 U.S.C. § 1471 (repealed 1984),[1] he insists that once Pioneer American's bankruptcy petition was filed, the federal courts acquired "original and exclusive jurisdiction" over BWA, Inc.'s suit against him because BWA, Inc.'s claim had a "logical connection" with the corporate bankruptcy proceeding. We disagree. This argument is based upon a fundamental misunderstanding of the relationship between state courts and federal bankruptcy courts. The filing of a corporate bankruptcy petition does not automatically divest a state court of jurisdiction over state law claims against a corporate officer.
The federal courts have original and exclusive jurisdiction over Title 11 cases those cases seeking relief under the Bankruptcy Code. See 28 U.S.C. § 1334(a); 1 Collier on Bankruptcy ¶ 3.01[1][c][i] (15th ed. 1988). They also have jurisdiction to hear other civil cases "related to" Title 11 cases, but according to 28 U.S.C. § 1334(b), this jurisdiction is not exclusive. 1 Collier on Bankruptcy ¶ 3.01[1][c][iv] (15th ed. 1988). Nothing in 28 U.S.C. § 1334 prevents a state court from adjudicating a related state law claim unless the federal courts elect to assert their jurisdiction over it.
The record does not indicate that the federal courts were ever requested to take jurisdiction over BWA, Inc.'s claim against Mr. Parrish or that any attempt was made to invoke the Bankruptcy Code's automatic stay provisions. The absence of this proof is easily understood. Both avenues of relief were inapplicable to BWA, Inc.'s claim.
The Bankruptcy Code's automatic stay provisions apply only to state court proceedings seeking to obtain property that is part of the debtor's estate in bankruptcy. In re Nashville Album Prods., Inc., 33 B.R. 123, 124 (M.D.Tenn. 1983). BWA, Inc.'s action was not against the corporate debtor in the bankruptcy proceeding. It was against an officer of the debtor. It did not seek the corporate debtor's estate, but rather it sought a recovery from the officer's personal funds.
Similarly, the federal courts customarily decline to assert jurisdiction over a creditor's claims against a party other than the debtor when the claim will not have a significant impact on the bankruptcy proceeding. In re Rustic Mfg., Inc., 55 B.R. 25, 29-30 (W.D.Wis. 1985); In re Otero Mills, Inc., 21 B.R. 777, 778 (D.N.M. 1982).
The mandatory abstention provisions in 28 U.S.C. § 1334(c)(2) would result in the federal courts' declining to assert jurisdiction over BWA, Inc.'s claim against Mr. Parrish because (1) it is based on state law, (2) the suit had already been commenced *769 and could be resolved in state court, and (3) the claim could not provide the federal courts with an independent basis to assert jurisdiction. National Acceptance Co. of California v. Levin, 75 B.R. 457, 459 (D.Ariz. 1987).
The trial court's subject matter jurisdiction derives from state law and from the Tennessee Constitution. Brown v. Brown, 198 Tenn. 600, 618-19, 281 S.W.2d 492, 501 (1955); Fentress v. Fentress, 54 Tenn. (7 Heisk.) 428, 433 (1872). Tenn. Code Ann. § 16-11-102(a) (1980)[2] gives the trial court jurisdiction over breach of contract cases. In the absence of proof that the federal courts hearing Pioneer American's bankruptcy petition sought to exercise jurisdiction over BWA, Inc.'s claim against Mr. Parrish, we find that the trial court had jurisdiction over the suit against Mr. Parrish.
III.
The trial court found that Mr. Parrish was personally liable under the December 18, 1985 contract because the corporate entity named in the contract, "PARCO Enterprises, Inc.", did not exist. This reasoning is incorrect.
At all times relevant to the transaction between the parties, Tennessee law permitted corporations to use a fictitious or assumed name in addition to the name appearing on its corporate charter.[3]Life & Casualty Ins. Co. v. City of Nashville, 175 Tenn. 688, 693, 137 S.W.2d 287, 289 (1940); Precious Blood Soc'y v. Elsythe, 102 Tenn. 40, 45, 50 S.W. 759, 760 (1899); Louisville, N. & Great S.R.R. v. Reidmond, 79 Tenn. 205, 206 (1883); Bank of Tennessee v. Burke, 41 Tenn. (1 Cold.) 623, 625 (1860).
Accordingly, a corporation was permitted to enter into a contract using its assumed name without affecting the validity of the contract. The contract was enforceable by either contracting party, as long as the identity of the corporation could be established. See 6 W. Fletcher, Cyclopedia of the Law of Private Corporations § 2442.1 (rev. perm. ed. 1979); H. Ballentine, Ballentine on Corporations § 117 (rev. ed. 1946); 18A Am.Jur.2d Corporations § 284 (1985); 18 C.J.S. Corporations § 166 (1939).
There is little question that "PARCO", "PARCO Enterprises", and "PARCO ENTERPRISES, INC." were the assumed or fictitious names used to identify Pioneer American. Mr. Parrish, Mr. Cosse, and BWA, Inc.'s employees customarily referred to the corporation as "Parco." BWA, Inc. used the name "Parco" on its account records and in its standard agency contract.
By using the name "Parco" and its derivatives, the parties intended to bind Pioneer American. For the purposes of resolving the present dispute, no legal significance should be attached to the difference between the name Pioneer American used in its corporate charter and the name or names it used to transact its business with BWA, Inc. Thus, if Mr. Parrish is to be found personally liable under the December, 1985 contract, it must be for reasons different from those relied upon by the trial court.
IV.
Our task is to ascertain and to give effect to the contracting parties' intentions, Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc., 521 S.W.2d 578, 580 (Tenn. 1975), by considering the entire agreement without favoring either party. Cocke County Bd. of Highway Commrs. v. Newport Utils. Bd., 690 S.W.2d 231, 237 (Tenn. 1985); APAC-Tennessee, Inc. v. J.M. Humphries Constr. Co., 732 S.W.2d 601, *770 604 (Tenn. Ct. App. 1986); Taylor v. White Stores, Inc., 707 S.W.2d 514, 516 (Tenn. Ct. App. 1985).
The law imputes to contracting parties an intention corresponding to the reasonable meaning of their words and acts. Sutton v. First Nat'l Bank of Crossville, 620 S.W.2d 526, 530 (Tenn. Ct. App. 1981). Thus, we construe a contract's language using its ordinary and customary meaning. Evco Corp. v. Ross, 528 S.W.2d 20, 23 (Tenn. 1975).
We are not concerned with the parties' state of mind when they entered into the contract, Petty v. Sloan, 197 Tenn. 630, 642, 277 S.W.2d 355, 360-61 (1955), and, therefore, we do not consider their uncommunicated, subjective intentions. Malone & Hyde Food Servs. v. Parson, 642 S.W.2d 157, 159 (Tenn. Ct. App. 1982); Ward v. Berry & Assocs., Inc., 614 S.W.2d 372, 375 (Tenn. Ct. App. 1981). As noted by Judge Learned Hand:
A contract is an obligation attached by mere force of law to certain acts of the parties, usually words, which ordinarily accompany and represent a known intent. If, however, it were proved by twenty bishops that either party, when he used the words, intended something else than the usual meaning which the law imposes on them, he would still be held, unless there was some mutual mistake, or something else of the sort.
Hotchkiss v. National City Bank of New York, 200 F. 287, 293 (S.D.N.Y. 1911). See also Restatement (Second) of Contracts § 19 (1979).
Three portions of the December, 1985 agreement convey an intent to obligate Mr. Parrish in addition to Pioneer American. The designation of the client as "Mark Parrish/DBA PARCO Enterprises" indicates that a single entity, Mark Parrish, is doing business under the name of "PARCO Enterprises" and is agreeing to be bound by the contract.[4] The concluding paragraph of the agreement states that the client "contract[s] ... to guarantee acceptance both corporately and personally." Finally, Mr. Parrish's name precedes his signature, thereby implying that he signed the contract both as an individual and as a representative of his corporation.
A corporate officer's signature, preceded by the corporation's name and followed by words denoting the officer's representative capacity, binds only the corporation. Anderson v. Davis, 34 Tenn. App. 116, 120, 234 S.W.2d 368, 369-70 (1950); Wilson v. Fite, 46 S.W. 1056, 1057 (Tenn.Ch.App. 1897). See also Tenn. Code Ann. § 47-3-403(3) (1979). However, Mr. Parrish cannot take refuge behind this principle because his signature is preceded by his own name in addition to his corporation's assumed name.
The use of "MARK PARRISH/PARCO ENTERPRISES, INC." prior to his signature can be viewed as an indication that Mr. Parrish intended to sign the contract as an individual and as a representative of his corporation. Thus, the inclusion of his corporate title following his signature does not necessarily indicate that he signed the contract only in his representative capacity.
Whether a person signing a contract intended to do so as an individual or as the representative of another should, where possible, be determined from the contract's language. Lazarov v. Klyce, 195 Tenn. 27, 34, 255 S.W.2d 11, 14 (1953). The agreement before us shows that Mr. Parrish signed the contract both as an individual and as a representative of Pioneer American. This conclusion is consistent with Mr. Cosse's statement to BWA, Inc. that "you're looking at Mr. Parrish, he's the man with the pocketbook."
V.
Finally, Mr. Parrish makes the any-port-in-the-storm argument that there was no consideration for the contract. He insists that the contract obligated him to pay for only the services performed after he signed the agreement and that "[t]here was no evidence that anything done by plaintiff under this alleged contract after its execution." We disagree with Mr. Parrish's *771 view of the proof and with his interpretation of the contract.
A contract is simply an agreement between two parties, based on adequate consideration, to do or not to do a particular thing. Johnson v. Central Nat'l Ins. Co. of Omaha, 210 Tenn. 24, 34, 356 S.W.2d 277, 281 (1962). The agreement need not be in writing unless required by law, and mutual promises between the contracting parties are adequate consideration. Rodgers v. Southern Newspapers, Inc., 214 Tenn. 335, 342, 379 S.W.2d 797, 800 (1964).
The parties' contract consists of two bilateral agreements. The first agreement consists of BWA, Inc.'s promise to provide public relations services for the Texas tour in return for the promoters' promise to pay for the services. The second agreement consists of BWA, Inc.'s agreement to pay for the advertising space in return for the promoters' promise to reimburse them for these costs. The parties' mutual promises were adequate consideration when the agreements were made, and they also gave rise to the promoters' enforceable obligation to pay for the services once they were performed.
The agreement Mr. Parrish signed on December 18, 1985 merely embodied the agreement that had already been made in November, 1985. Notwithstanding Mr. Parrish's self-serving denials at trial, the proof points inescapably to the conclusion that Mr. Cosse was acting on behalf of both Pioneer American and Mr. Parrish when he promised to pay for BWA, Inc.'s services. There is an abundance of proof that BWA, Inc. performed services both before and after December 18, 1985. Thus, there is adequate consideration to support Mr. Parrish's contractual obligations.
VI.
The trial court's judgment is affirmed and the case is remanded for whatever further proceedings may be required. The costs of the appeal are taxed in equal proportions to Bill Walker & Associates, Inc. and to Mark Parrish and to their respective sureties for which execution, if necessary, may issue.
TODD, P.J., and CANTRELL, J., concur.
NOTES
[1] 28 U.S.C. § 1471 (1982) was repealed in 1984 and replaced by 28 U.S.C. § 1334 (Supp. III 1985).
[2] Tenn. Code Ann. § 16-11-102(a) provides, in part that "[t]he chancery court has concurrent jurisdiction, with the circuit court, of all civil causes of action, triable in the circuit court ..."
[3] The use of an assumed or fictitious trade name has always been subject to the laws regarding unfair competition and the protection of trade names. See Tenn. Code Ann. § 48-14-101(h) (1988); Tenn. Code Ann. § 48-1-207(d) (repealed 1988). Unlike the law prior to 1988, the new Tennessee Business Corporations Act requires that corporations must file an application for permission to use an assumed name. See Tenn. Code Ann. § 48-14-101(d).
[4] See Duval v. Midwest Auto City, Inc., 425 F. Supp. 1381, 1387 (D.Neb. 1977).
|
484 U.S. 904
108 S.Ct. 247
98 L.Ed.2d 204
Linda S. MOOREv.GEORGIA.
No. 86-6914
Supreme Court of the United States
October 13, 1987
On petition for writ of certiorari to the Court of Appeals of Georgia.
The petition for a writ of certiorari is denied.
Justice WHITE, dissenting.
1
In Scott v. Illinois, 440 U.S. 367, 99 S.Ct. 1158, 59 L.Ed.2d 383 (1979), this Court held that an uncounseled misdemeanor conviction is constitutionally valid if the offender is not incarcerated. The following Term, however, in Baldasar v. Illinois, 446 U.S. 222, 100 S.Ct. 1585, 64 L.Ed.2d 169 (1980) (per curiam ), this Court held that such a conviction may not be used under an enhanced penalty statute to convert a subsequent misdemeanor conviction into a felony with a prison term.
2
Here, petitioner was convicted and sentenced to a prison term under Ga.Code Ann. § 40-6-391(C) (Supp.1987) which imposes a mandatory minimum sentence on a person convicted of driving under the influence of alcohol, where such person has at least two prior convictions for the same offense. Petitioner argued that Baldasar prohibited her conviction under § 40-6-391(C), because this conviction relied upon her two prior, uncounseled convictions for driving under the influence. The Court of Appeals of Georgia rejected this contention, and determined that Baldasar was inapplicable here because § 40-6-391(C) merely imposes a minimum prison term based on petitioner's prior convictions, and does not "increas[e] the maximum confinement authorized [or] conver[t] a misdemeanor offense into a felony." 181 Ga.App. 548, 549, 352 S.E.2d 821, 822 (1987) (emphasis added).
3
Possibly because this Court was sharply divided in Baldasar, with no opinion for reversal gaining more than three votes, courts attempting to apply that decision have come to different conclusions concerning its meaning. See Schindler v. Clerk of Circuit Court, 715 F.2d 341, 344 (CA7 1983) ("In light of . . . the failure of the Baldasar majority to agree upon a rationale for its result, the scope of the decision remains unclear") cert. denied, 465 U.S. 1068, 104 S.Ct. 1419, 79 L.Ed.2d 745 (1984). Some courts have applied Baldasar as the Georgia court did here, and have allowed the use of prior, uncounseled convictions in cases quite similar to this one. E.g., Commonwealth v. Thomas, 510 Pa. 106, 112-114, 507 A.2d 57, 60-61 (1986); State v. Orr, 375 N.W.2d 171, 175-176 (N.D.1985). Others, however, have read Baldasar more broadly, and have disallowed the use of prior, uncounseled convictions in prosecutions akin to petitioner's. E.g., State v. Oehm, 9 Kan.App.2d 399, 401-403, 680 P.2d 309, 311-312 (1984); State v. Dowd, 478 A.2d 671, 677-678 (Me.1984).
4
Because the confusion over Baldasar's holding has led to uneven application of that case and conflicting decisions in the courts below, I would grant certiorari here to answer the outstanding questions concerning Baldasar's scope and proper application.
|
122 T.C. No. 12
UNITED STATES TAX COURT
DON WEBER II, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15169-03L. Filed March 22, 2004.
On Dec. 19, 2002, R mailed to P two notices of
determination concerning collection action. R issued
the first notice with respect to P’s liability for
unpaid income taxes; R issued the second notice with
respect to P’s liability for an unpaid civil penalty
under sec. 6682, I.R.C. R sent both notices to P by
certified mail addressed to him at his last known
address. The first notice was returned to R by the
U.S. Postal Service marked “unclaimed”. By letter
dated Aug. 4, 2003, R’s settlement officer sent P
courtesy copies of the notices of determination. On
Sept. 4, 2003, P filed a petition for lien or levy
action under sec. 6330(d), I.R.C. Thereafter, R filed
a motion to dismiss P’s petition for lack of
jurisdiction on the ground that it was not timely
filed. P opposes the granting of R’s motion,
contending that he did not receive either of the
notices of determination until August 2003, at which
time he promptly filed his petition with the Court.
- 2 -
Held: The income tax notice of determination that
was sent by certified mail to P at P’s last known
address was sufficient, notwithstanding the fact that P
did not receive such notice.
Held, further, the courtesy copy of the income tax
notice of determination that R’s officer sent P in
August 2003 was not a notice of determination under
sec. 6320, I.R.C., or sec. 6330, I.R.C., nor did the
sending of that copy serve to revive the statutory
filing period.
Held, further, because P did not timely file his
petition in respect of the income tax notice of
determination, this Court lacks jurisdiction to review
R’s determination to proceed with collection of P’s
liability for unpaid income taxes.
Held, further, this Court lacks jurisdiction to
review R’s determination to proceed with collection of
P’s liability for the unpaid civil penalty under sec.
6682, I.R.C., because it lacks jurisdiction over the
underlying liability.
Don Weber II, pro se.
James E. Cannon and Julie Jebe, for respondent.
OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Robert N. Armen, Jr., pursuant to the provisions of section
7443A(b)(4), and Rules 180, 181, and 182.1 The Court agrees with
and adopts the opinion of the Special Trial Judge, which is set
forth below.
1
All Rule references are to the Tax Court Rules of
Practice and Procedure, and all section references are to the
Internal Revenue Code, as amended.
- 3 -
OPINION OF THE SPECIAL TRIAL JUDGE
ARMEN, Special Trial Judge: This collection review case is
before the Court on respondent’s motion to dismiss for lack of
jurisdiction. Respondent contends that the Court lacks
jurisdiction on the ground the petition for lien or levy action
was not timely filed. As discussed in detail below, we shall
dismiss the petition for lack of jurisdiction.
Background
The record reflects and/or the parties do not dispute the
following facts:
On December 19, 2002, respondent mailed to petitioner a
Notice Of Determination Concerning Collection Action(s) informing
petitioner that respondent would proceed with the collection of
petitioner’s unpaid Federal income taxes for 1992, 1993, 1994,
and 1995 (the income tax notice). On December 19, 2002,
respondent also mailed to petitioner a Notice Of Determination
Concerning Collection Action(s) informing petitioner that
respondent would proceed with the collection of petitioner’s
unpaid liability for a civil penalty imposed under section 6682
for the taxable period ending December 31, 1997 (the civil
penalty notice).2
2
Sec. 6682(a) generally provides that an individual shall
be liable for a civil penalty if such individual is found to have
made a false statement regarding the correct amount of income tax
withholding on wages and/or backup withholding.
- 4 -
Respondent mailed the income tax notice and the civil
penalty notice to petitioner by certified mail addressed to him
at 3500 W. 95th St., No. 6638, Shawnee Msn., Kansas 66206-2052
(the Kansas address).3 On or about January 13, 2003, the
envelope bearing the income tax notice was returned to respondent
by the U.S. Postal Service marked “Unclaimed”.4 The envelope
included notations reflecting that the U.S. Postal Service
attempted to deliver the notice to petitioner on certain specific
dates.
On August 4, 2003, respondent mailed a letter to petitioner
at the Kansas address that stated in pertinent part as follows:
“Per our telephone conversation this morning, enclosed are copies
of the determination letters previously mailed to you in December
2002, when the letters were originally issued.”
On September 4, 2003, the Court received and filed a
petition for lien or levy action. No notice of determination was
attached to the petition, nor did the petition identify the
specific notice(s) in dispute. The petition arrived at the Court
in an envelope bearing a U.S. Postal Service postmark date of
3
Respondent proved the mailing of the notice of
determination through the introduction of a postmarked copy of a
certified mail list. Cf. Magazine v. Commissioner, 89 T.C. 321,
326-327 (1987) (holding that for purposes of sec. 6212, the
Commissioner must produce direct evidence to establish the fact
that a notice of deficiency was mailed).
4
The record does not reflect whether the civil penalty
notice was returned to respondent undelivered.
- 5 -
August 27, 2003. In the petition, petitioner listed the Kansas
address as his current address.
Respondent filed a motion to dismiss for lack of
jurisdiction on the ground the petition was not filed within the
30-day period prescribed in section 6330(d) or section 7502.
Petitioner filed an objection to respondent’s motion,
asserting that he did not receive either of the notices in
question until August 2003, at which time he promptly filed a
petition with the Court. Petitioner also questioned why the
copies of the notices that he received in August 2003 were
undated.
Respondent filed a response to petitioner’s objection
asserting that the copies of the notices that were forwarded to
petitioner in August 2003 were merely courtesy copies.
Respondent further explained that the copies sent to petitioner
were undated because petitioner’s case file was not immediately
available and the copies in question were retrieved from
respondent’s computer files.
This matter was called for hearing at the Court’s motions
session in Washington, D.C. Counsel for respondent appeared at
the hearing and offered argument in support of respondent’s
motion to dismiss. Although there was no appearance by or on
behalf of petitioner at the hearing, petitioner did file with the
Court a written statement pursuant to Rule 50(c).
- 6 -
Discussion
Sections 6320 (pertaining to Federal tax liens) and 6330
(pertaining to levies) establish procedures for administrative
and judicial review of certain collection actions. As an initial
matter, the Commissioner is required to provide a taxpayer with
written notice that a Federal tax lien has been filed and/or that
the Commissioner intends to levy; the Commissioner is also
required to explain to the taxpayer that such collection action
may be challenged on various grounds at an administrative
hearing. See Davis v. Commissioner, 115 T.C. 35, 37 (2000); Goza
v. Commissioner, 114 T.C. 176, 179 (2000). Sections 6320(a)(2)
and 6330(a)(2) provide that the written notice described above
shall be given in person, left at the person’s dwelling or usual
place of business, or sent by certified or registered mail to
such person’s last known address.
When the Appeals Office issues a Notice Of Determination
Concerning Collection Action(s) to a taxpayer following an
administrative hearing, section 6330(d)(1) provides that the
taxpayer has 30 days following the issuance of such notice to
file a petition for review with the Tax Court or, if the Tax
Court does not have jurisdiction over the underlying tax
liability, with a Federal District Court. See Offiler v.
Commissioner, 114 T.C. 492, 498 (2000). The procedure
established under section 6330(d)(1) is made applicable to a
- 7 -
proceeding regarding a Federal tax lien by way of the cross-
reference contained in section 6320(c).
We have held that this Court’s jurisdiction under sections
6320 and 6330 depends on the issuance of a valid notice of
determination and the filing of a timely petition for review.
See Sarrell v. Commissioner, 117 T.C. 122, 125 (2001); Moorhous
v. Commissioner, 116 T.C. 263, 269 (2001); Offiler v.
Commissioner, supra at 498; see also Rule 330(b).5
Although section 6330(d) does not specify the means by which
the Commissioner is required to give notice of a determination
made under sections 6320 and 6330, we conclude that the method
that Congress specifically authorized for sending notices of
deficiency in section 6212(a) and (b) certainly should suffice.
Accordingly, we hold that a notice of determination issued
pursuant to sections 6320 and/or 6330 is sufficient if such
notice is sent by certified or registered mail to a taxpayer at
the taxpayer’s last known address. Cf. sec. 6212(b)(1), (3).6
5
Petitioner did not raise any challenge to the validity of
either of the notices of determination in question.
6
Sec. 6212(b)(1) and (3) provides in pertinent part as
follows:
SEC. 6212. NOTICE OF DEFICIENCY.
* * * * * * *
(b) Address for notice of deficiency.--
(1) Income and gift taxes and certain excise
taxes.–-* * * notice of a deficiency * * * if
mailed to the taxpayer at his last known address,
(continued...)
- 8 -
It may be that such a notice of determination is also sufficient
if it is given in person or left at the taxpayer’s dwelling or
usual place of business. Cf. sec. 6330(a)(2). However, we need
not, and do not, decide this latter matter.
The Income Tax Notice
The notice of determination pertaining to petitioner’s
unpaid income tax liabilities was mailed by certified mail to the
same address that petitioner listed as his current address in the
petition for lien or levy action. Petitioner does not contend
that such notice was mailed to an incorrect address.
Consequently, we conclude that the income tax notice was mailed
to petitioner’s last known address, which is sufficient for
jurisdictional purposes. See, e.g., Sarrell v. Commissioner,
supra at 125.
Under the circumstances, the sole issue for decision with
regard to the income tax notice is whether the petition was
timely filed. The record reflects that the petition was not
filed within the 30-day period prescribed in section 6330(d)(1).
In particular, the record shows that respondent mailed the notice
6
(...continued)
shall be sufficient * * *.
* * * * * * *
(3)Estate tax.–-* * * notice of a
deficiency * * *, if addressed in the name of
the decedent or other person subject to
liability and mailed to his last known
address, shall be sufficient * * *.
- 9 -
of determination to petitioner on December 19, 2002. Taking into
account an intervening weekend and Federal holiday, the 30-day
filing period expired on Tuesday, January 21, 2003. See sec.
7503. However, the petition in this case was not mailed to the
Court until August 27, 2003, and was received and filed on
September 4, 2003–-more than 8 months after the income tax notice
was mailed. It follows that the petition was not timely filed
and we are obliged to dismiss this case for lack of jurisdiction.
See McCune v. Commissioner, 115 T.C. 114 (2000).
Petitioner’s assertion that his petition should be
considered timely filed because he did not actually receive the
income tax notice until August 2003 is misplaced. Like a notice
of deficiency issued pursuant to section 6213(a), a notice of
determination made pursuant to sections 6320 and/or section 6330
serves as a person’s “ticket” to the Tax Court. Offiler v.
Commissioner, supra at 498; see Frieling v. Commissioner, 81 T.C.
42, 52 (1983). In accordance with longstanding principles
governing the validity of a notice of deficiency under section
6213(a), and consistent with our conclusion that the income tax
notice was sufficient because it was properly mailed to
petitioner’s last known address by certified mail on December 19,
2002, we hold that it is immaterial that petitioner did not
receive the notice of determination before the expiration of the
30-day filing period. See King v. Commissioner, 857 F.2d 676,
- 10 -
679 (9th Cir. 1988), affg. 88 T.C. 1042 (1987); Teel v.
Commissioner, 248 F.2d 749, 751 (10th Cir. 1957), affg. 27 T.C.
375 (1956); Yusko v. Commissioner, 89 T.C. 806, 810 (1987);
Frieling v. Commissioner, supra at 52.
We further hold that the courtesy copy of the income tax
notice that respondent sent to petitioner on August 4, 2003, was
not a notice of determination under section 6320 or 6330;
therefore, it could not serve to revive the 30-day filing period.
See Teel v. Commissioner, supra; Lerer v. Commissioner, 52 T.C.
358, 362-366 (1969); Powell v. Commissioner, T.C. Memo. 1998-108;
Schoenfeld v. Commissioner, T.C. Memo. 1993-303, n.2.
Finally, we do not have the authority to extend our
jurisdiction in this case notwithstanding the fact that
petitioner did not receive the notice of determination within the
30-day filing period. The Court’s jurisdiction is statutorily
prescribed under sections 6320 and 6330, and we may not extend
the 30-day period for filing a petition for lien or levy action.
Axe v. Commissioner, 58 T.C. 256, 259 (1972); see Lamont v.
Commissioner, T.C. Memo. 1993-469.
Consistent with the preceding discussion, we shall grant
respondent’s motion to dismiss, in that we lack jurisdiction to
- 11 -
review the income tax notice on the ground the petition for lien
or levy action was not timely filed.
The Civil Penalty Notice
As previously mentioned, the Court’s jurisdiction under
sections 6320 and 6330 is limited to cases in which the
underlying tax liability is of a type over which the Court
normally has jurisdiction. Sec. 6330(d); Van Es v. Commissioner,
115 T.C. 324, 328-329 (2000) (case dismissed for lack of
jurisdiction on the ground the Court lacks jurisdiction to review
the frivolous return penalty imposed under section 6702); Moore
v. Commissioner, 114 T.C. 171, 175 (2000) (case dismissed for
lack of jurisdiction on the ground the Court lacks jurisdiction
to review the trust fund recovery penalty imposed under section
6672).
The record reflects that the civil penalty notice is based
on the assessment of a penalty against petitioner pursuant to
section 6682. It is well settled that this Court lacks
jurisdiction to redetermine such penalties. Sec. 6682(c);
Castillo v. Commissioner, 84 T.C. 405, 411 (1985); Fischer v.
Commissioner, T.C. Memo. 1994-586 n.3. Because we lack
jurisdiction over the tax liability underlying the civil penalty
notice, we are obliged to dismiss the matter for lack of
- 12 -
jurisdiction on that ground. See Barnhill v. Commissioner, T.C.
Memo. 2002-116; cf. Lunsford v. Commissioner, 117 T.C. 159
(2001).
To reflect the foregoing,
An order will be entered
dismissing this case for lack of
jurisdiction.
|
114 F.3d 1194
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.Ellen MATTHEWS, Plaintiff-Appellant,v.AEROSPACE CORPORATION LONG-TERM DISABILITY INCOME BENEFITSINSURANCE PLAN; the Prudential Insurance Companyof America, Defendants-Appellees.
No. 96-55278.
United States Court of Appeals, Ninth Circuit.
Submitted May 9, 1997.*Decided May 15, 1997.
Before: WALLACE, THOMPSON, and T.G. NELSON, Circuit Judges.
MEMORANDUM
1
Matthews appeals from the district court's judgment in favor of Aerospace Corporation Long-Term Disability Income Benefits Insurance Plan and Prudential Insurance Company of America (Prudential). The district court had jurisdiction pursuant to 29 U.S.C. § 1132(e)(1). We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291, and we affirm.
2
Matthews first contends that the district court erred in holding that Prudential did not abuse its discretion in determining that she was able to perform "sedentary or light duty work," and thus not eligible for continued benefit payments. We review Prudential's decision for an abuse of discretion. Snow v. Standard Insurance Co., 87 F.3d 327, 330 (9th Cir.1996).
3
The Aerospace Corporation Group Program (Program) defines "total disability" as follows:
4
"Total Disability" exists when Prudential determines that all of these conditions are met:
5
(1) Due to Sickness or accidental Injury, both of these are true:
6
(a) You are not able to perform, for wage or profit, the material and substantial duties of your occupation.
7
(b) After the Initial Duration of a period of Total Disability, you are not able to perform for wage or profit the material and substantial duties of any job for which you are reasonably fitted by your education, training or experience....
8
(2) You are not working at any job for wage or profit.
9
(3) You are under the regular care of a Doctor.
10
Several doctors who examined Matthews opined that she did not suffer from a serious or long-term disability. As a whole, they believed that her thigh injury was minor and should not have prevented her from returning to work. Goldfarb, the vocational counselor who reviewed the doctors' reports, concluded that Matthews could perform various types of "light duty work," including a gas meter reader, plumbing inspector, an order clerk for a plumbing supply company, and a quality control inspector. Based on this evidence, Prudential concluded that Matthews was not eligible for long-term disability coverage benefits under the Program. We agree with the district court that Prudential did not abuse its discretion in determining that Matthews was "able to perform for wage or profit the material and substantial duties of any job for which [she was] reasonably fitted by [her] education, training or experience."
11
Matthews next contends that her psychological impairments entitle her to long-term disability benefit payments under the Program. Under the Program, "if your Total Disability, as determined by Prudential, is caused at least in part by ... [a] mental, psychoneurotic or personality disorder ..., benefits are not payable for your Total Disability for more than 24 months." An exception, which does not apply here, extends coverage when the claimant is or becomes "Confined in a Hospital." Since Matthews received benefits for the first two years after the inception of her claimed disability, the Program does not entitle Matthews to any further long-term disability benefit payments. Though Matthews asserts that the Program's language is ambiguous, it is quite clear to us that the district court did not err on this issue.
12
In her opening brief, Matthews asks us to "sanction Prudential by striking the matters on which Prudential relied" but did not disclose to Matthews. In her reply brief, Matthews clarifies her requested relief by asking that we remand this case to the district court. Yet, it is unclear what this remand would achieve. The district court, like the Program administrator, had Goldfarb's report before it when it ruled on Matthews's claim. Remanding the case would not alter this result.
13
Even if Matthews could ask us for "sanctions" against Prudential, no remedy would exist. "Ordinarily, a claimant who suffers because of a fiduciary's failure to comply with ERISA's procedural requirements is entitled to no substantive remedy." Blau v. Del Monte Corp., 748 F.2d 1348, 1353 (9th Cir.), cert. denied, 474 U.S. 865 (1985). Since Matthews has failed to demonstrate how this alleged omission resulted in "substantial harm" to her, see McKenzie v. General Tel. Co., 41 F.3d 1310, 1315-16 (9th Cir.1994), cert. denied, 115 S.Ct. 1697 (1995), we could not sanction Prudential for its alleged omission. See also Parker v. BankAmerica Corp., 50 F.3d 757, 768-69 (9th Cir.1995).
14
AFFIRMED.
*
The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a) and Ninth Circuit Rule 34-4
|
64 Cal.App.2d 592 (1944)
THE PEOPLE, Respondent,
v.
GENE KRUPA, Appellant.
Crim. No. 2281.
California Court of Appeals. First Dist., Div. One.
May 29, 1944.
J. W. Ehrlich, Roy A. Sharff and Alfred M. Miller for Appellant.
Robert W. Kenny, Attorney General, David K. Lener, Deputy Attorney General, Matthew Brady, District Attorney, and Leslie C. Gillen, Assistant District Attorney, for Respondent.
PETERS, P. J.
[1] After a trial by jury, defendant was found guilty of a violation of section 11714 of the Health and Safety Code. From the judgment of conviction, and from the orders denying his motions for a new trial, in arrest of judgment, and to stay the pronouncement of judgment, *594 he prosecutes this appeal. The orders denying his motions in arrest of judgment and to stay pronouncement of judgment are not appealable, but are reviewable on the appeal from the judgment. For this reason the direct appeals from such orders must be dismissed. (People v. Williams, 184 Cal. 590 [194 P. 1019]; People v. Fitzgerald, 14 Cal.App.2d 180 [58 P.2d 718]; see cases collected 8 Cal.Jur. p. 492, 508.)
The information, as originally framed and as amended, contained two counts. The first count charged a violation of section 11714 of the Health and Safety Code, a felony. That section provides: "Every person who hires, employs, or uses a minor in unlawfully transporting, carrying, selling, preparing for sale, peddling or using any narcotic is guilty of a felony punishable by imprisonment in the State prison for not less than one year nor more than six years, and for each subsequent offense shall be imprisoned in the State prison for not less than six years." The second count charged a violation of section 702, Welfare and Institutions Code, that is, contributing to the delinquency of a minor, a misdemeanor.
When arraigned, defendant pleaded guilty to the misdemeanor charge and not guilty to the felony charge. He also interposed the plea, as to count one, that the judgment about to be entered upon his plea of guilty to count two, would be a conviction of the same offense charged in count one. The court, with full knowledge that defendant intended to rely on the judgment of conviction under count two, pronounced judgment on that count and sentenced appellant to ninety days' imprisonment and a fine of $500. The court then ruled that conviction of count two was not a bar to a prosecution of count one, and the case proceeded to trial on that count.
The evidence produced on the trial amply supports the judgment. It shows that on the night of January 18, 1943, Krupa instructed his valet and property man Pateakos, a minor of the age of twenty years, to go to his, Krupa's, hotel room and remove an envelope from his coat pocket; that Pateakos removed the envelope which contained thirty-seven marijuana cigarettes from Krupa's coat pocket; that he was attempting to leave the hotel with that envelope, and another containing two and one-half such cigarettes, removed by Pateakos from the desk in Krupa's room, when he, Pateakos, was arrested by two agents of the Federal Bureau of Narcotics. This evidence obviously supports the implied finding *595 of the jury that appellant employed or used "a minor in unlawfully transporting" or "carrying" a "narcotic" in violation of section 11714 of the Health and Safety Code.
On this appeal, no direct attack is made upon the sufficiency of the evidence. However, in addition to the main contention of double jeopardy, appellant does contend that several other serious, prejudicial, and reversible errors were committed at the trial. In view of the conclusion that we have come to on the question of jeopardy, it is not necessary to discuss these other alleged errors.
Count one of the amended information charged a violation of section 11714 of the Health and Safety Code in the following language: "The said Gene Krupa, on or about the 18th day of January, A.D. nineteen hundred and forty-three, at the City and County of San Francisco, did hire, employ and use one John Pateakos, a minor of the age of twenty years, in unlawfully transporting and carrying a quantity of cigarettes containing a narcotic, to-wit: marihuana, also known as cannabis indica and also as cannabis americana."
The second count, as set forth in the amended information, is as follows: "Gene Krupa is also accused by the District Attorney of the City and County of San Francisco, State of California, by this information, of the crime of misdemeanor, to-wit: Violation of Section 702 of the Welfare and Institutions Code of the State of California committed as follows: The said Gene Krupa on or about the 18th day of January A.D. nineteen hundred and forty-three at the City and County of San Francisco, State of California, did endeavor to induce and persuade and did induce and persuade one John Pateakos, a male minor of the age of twenty years, to go to the room of him, the said Gene Krupa and obtain and remove and transport therefrom from a pocket of a coat located therein an envelope containing a quantity of narcotic, to-wit: marihuana, also known as cannabis indica, and also known as cannabis americana, and said Gene Krupa did also then and there permit and allow said John Pateakos to handle and have in the possession of said John Pateakos cigarettes containing marihuana, the said John Pateakos being then and there in the employ of said Gene Krupa, all of which wilful and unlawful acts and course of conduct of said Gene Krupa as aforesaid did thereby, then and there, manifestly tend to, and did encourage, cause and contribute to the said John Pateakos becoming and remaining such a person as is described *596 in said Section 700 of said Welfare and Institutions Code, to-wit: A person under twenty-one years of age who violates any law of this State or any ordinance of any town, city, or county, of this State defining crime contrary to the form, force and effect of the Statute in such case made and provided, and against the peace and dignity of the People of the State of California."
It will be noted that the second count charges that the appellant violated section 702 of the Welfare and Institutions Code in that he induced the minor to do an act which tended to cause, and caused, the minor to become a law violator. The minor's violation of law, as alleged in the information, was to "obtain" marihuana from the pocket of a coat in appellant's room, and to "remove and transport" the marihuana thus obtained.
[2] The attorney-general, in his brief as originally filed in support of the judgment, argued that the two offenses were not necessarily identical because, consistently with the information, the marihuana referred to in count one may not have been the same marihuana referred to in count two. In a letter written after this brief was filed, however, he requested that this portion of his brief be stricken and disregarded. The attorney-general now concedes (and the concession is in accord with the facts) that both counts in the amended information relate to the same incident, that is, to the minor obtaining the marihuana from Krupa's coat pocket and carrying it on his person until he was apprehended. Among other things, the letter states: "Count Two as amended in our opinion is not substantially different than Count One. There is additional language used in Count Two as amended relating to possession which it would appear may be implied in the allegations of Count One." Thus it is now admitted that the only possession of marihuana by the minor involved in either count was the possession involved in the coat pocket incident described in detail in count two. This is of considerable importance. It has been held in prosecutions for violations of the liquor laws that where the only possession shown is that incident to transporting the liquor, and it does not appear that there was a prior or subsequent possession, the possession and transportation may not be treated as two separate offenses. (People v. Clemett, 208 Cal. 142 [280 P. 681]; In re Chaus, 92 Cal.App. 384 [268 P. 422]; People v. Buchanan, 106 Cal.App.Supp. 765 [288 P. *597 50]; Schroeder v. United States, 7 F.2d 60. See note 74 A.L.R. 411, citing also cases contra.) Since there admittedly was no possession here except that involved in the coat pocket incident, it cannot be held that count two is based in part on a different violation of law by the minor, that is, on a separate unlawful possession not incident to the unlawful transportation which is the basis of count one.
The statements of the law applicable to the doctrine of double jeopardy are by no means clear, and in some respects inconsistent. (See, generally, for traditional statements of the rule, 1 Bishop's Criminal Law (9th ed.) p. 776; 1 Wharton's Criminal Law (12th ed.) p. 535, 394; 2 Freeman on Judgments (5th ed.) p. 1370, 650; 7 Cal.Jur. p. 955, 97; 15 Am.Jur. p. 53, 380.) [3] As stated by the Supreme Court of this state, in its more recent decisions, the rule is that a defendant may be convicted of two offenses when they differ in their necessary elements and one is not necessarily included within the other. (People v. Craig, 17 Cal.2d 453 [110 P.2d 403]; People v. Warren, 16 Cal.2d 103 [104 P.2d 1024]; People v. Herbert, 6 Cal.2d 541 [58 P.2d 909]; People v. Coltrin, 5 Cal.2d 649 [55 P.2d 1161]; People v. Day, 199 Cal. 78 [248 P. 250].) That is, although offenses are not the same, if one is necessarily included in the other, the guaranty against double jeopardy applies. Under all tests, the doctrine of included offenses is recognized. Section 1023, Penal Code provides: "When the defendant is convicted or acquitted, or has been once placed in jeopardy upon an indictment of information, the conviction, acquittal, or jeopardy is a bar to another indictment or information for the offense charged in the former, or for an attempt to commit the same, or for an offense necessarily included therein, of which he might have been convicted under that indictment or information." (Italics ours.) Thus it is held that every battery includes an assault, as do mayhem, rape and robbery. (People v. McDaniels, 137 Cal. 192, 197 [69 P. 1006, 92 Am.St.Rep. 81, 59 L.R.A. 578]; People v. Defoor, 100 Cal. 150 [34 P. 642].) Murder includes manslaughter. (People v. Ny Sam Chung, 94 Cal. 304 [28 P. 642, 28 Am.St.Rep. 29].)
[4] Section 1023 in terms applies where the prosecution for the higher offense is first. But it is thoroughly settled that the same rule applies where the prosecution for the lesser offense comes first. (People v. McDaniels, supra; People v. *598 Ny Sam Chung, supra. Where prosecution for the included offense is first, and there is an acquittal, the defendant may not thereafter be tried for the greater, for if he is not guilty of the lesser included offense he cannot be guilty of the greater. A conviction of the lesser is held to be a bar to prosecution for the greater on the theory that to convict of the greater would be to convict twice of the lesser. These propositions are developed at length in People v. McDaniels and People v. Ny Sam Chung, supra.
It should also be noted that even where crimes arising from the same incident are distinct and noninclusive in the sense that each requires an element not essential to the other, an acquittal in one may bar prosecution for the other. Where offenses possess a common element, as well as distinct elements, an acquittal, where it can be shown to be a decision negating the existence of the required element, will be res judicata in those jurisdictions which recognize that doctrine as obtaining in criminal proceedings. (See 2 Freeman on Judgments (5th ed.) p. 1364, 648; 24 Minn.L.Rev. 558; 19 Minn.L.Rev. 476; 10 Wash.L.Rev. 198.)
[5] It is clear that where an offense cannot be accomplished without necessarily committing another offense, the latter is a necessarily included offense. If, in the commission of acts denounced by one statute, the offender must always violate another, the one offense is necessarily included in the other. In the case herein a violation of section 11714, Health and Safety Code, inevitably and necessarily involves a violation of section 702, Welfare and Institutions Code. It is impossible for a person to commit a violation of section 11714 of the Health and Safety Code without committing the misdemeanor denounced by section 702 of the Welfare and Institutions Code. The person who uses a minor unlawfully to transport a narcotic has necessarily induced the minor to do an act which renders the minor a person subject to section 700, Welfare and Institutions Code that is, a person who has violated a law of the state (Welf. & Inst. Code, 11160), and this constitutes an offense under section 702 on the part of the person who has thus induced the minor to violate the law.
To repeat, section 11714, Health and Safety Code, cannot be violated without also offending against section 702, Welfare and Institutions Code. Having regard for the incident upon which both counts are admittedly based, as set forth in *599 count two, exactly the same facts were required to prove an offense under count one as to establish a crime under count two. Every element of the felony charge was necessary and indispensable to a conviction of the misdemeanor charge.
While it is true that section 11714 cannot be violated without offending also against section 702, it is apparent, as respondent urges, that the converse is not true. A person may violate section 702, that is contribute to the delinquency of a minor, otherwise than by causing such minor to become a law violator, or by causing him to violate a law dealing with another subject than narcotics. If a violation of section 702 always involved a violation of section 11714 (as a violation of 11714 always involves a violation of 702) the offenses would be identical in the sense that neither would involve an element not necessary for the other. But, as we have said above, the cases are clear that the principle of double jeopardy applies where one offense is necessarily included in the other, as well as where they are identical. It is of the nature of included offenses that the included offense may be committed without accomplishing the inclusive offense.
In the instant case, the essence of both offenses charged against appellant was the commission of acts which contributed or tended to contribute to the delinquency of a minor. It is not necessary to establish an offense under section 702 that the minor should actually have been debauched or corrupted. (People v. Kinser, 99 Cal.App. 778 [279 P. 488].) Nor is such proof necessary to constitute the crime under section 11714. Under section 702 the offense of contributing to the delinquency of a minor is a misdemeanor. Likewise, some other violations of the code provisions dealing with narcotics are misdemeanors. (See Health and Saf. Code, 11710-11716.) But under section 11714 where a minor is used unlawfully to transport, carry, sell, etc. any narcotic, the person thus using the minor is guilty of a felony. Though not expressed, the apparent reason for increasing the grade of crime above that which prevails generally as to narcotic offenses is the tendency of the act denounced by section 11714 to contribute to the delinquency of the minor. [6] Viewed in relation to section 702, where contributing to the delinquency of a minor takes the form of using the minor unlawfully to transport narcotics, the offender is subject to prosecution under section 11714, which creates a felony carrying a heavier *600 penalty than section 702. However, the person accused should not also be subject to the misdemeanor penalty. He is liable to prosecution under either section, but a conviction or acquittal of an offense under one bars prosecution under the other. [7] Where the State instead of prosecuting first for the offense which carries the heavier penalty, prosecutes for the offense which carries the lighter penalty, or accepts a plea of guilty to that offense, it is without right thereafter to prosecute for the offense which carries the heavier penalty. This follows from the thoroughly settled principle that a conviction or acquittal of an included offense bars prosecution for the greater offense. (People v. McDaniels, supra.)
By way of illustration, robbery is of the first degree where perpetrated by torture or by a person armed with a dangerous or deadly weapon. (Pen. Code, 211a.) This does not mean that where the robbery is thus committed the defendant may be punished for both robbery of the first degree and for robbery of the second degree, the offense he would have committed had he acted otherwise than he did in fact, that is, if he had accomplished the crime without torture or use of such weapon. So in the present case the defendant may not be convicted of both a felony and a misdemeanor on the basis of the same incident because if he had contributed to the delinquency of the minor otherwise than he did in fact he could have been prosecuted for a misdemeanor only.
The principle of included offenses is recognized in the rule, referred to above, that every battery includes an assault, as do mayhem, rape and robbery. (People v. McDaniels, supra; People v. Defoor, supra.) We have heretofore referred to the cases arising under liquor laws in which it has been held that the possession involved in the transportation of liquor may not be prosecuted after conviction or acquittal on charges of transportation. (People v. Clemett, supra; In re Chaus, supra; People v. Buchanan, supra; Schroeder v. United States, supra.) In People v. Lopez, 46 Cal.App.2d 857 [117 P.2d 10], section 1159, Penal Code, was involved. It provides: "The jury may find the defendant guilty of any offense, the commission of which is necessarily included in that with which he is charged, or of an attempt to commit the offense." The defendant was charged with aiding and abetting her co-defendant in commission of statutory rape. She was found guilty of contributing to the delinquency of a *601 minor, that is, violation of section 702, Welfare and Institutions Code. She contended that the offense of which she was convicted was not necessarily included in the offense charged. The judgment against her was affirmed.
In the case of some included offenses, an additional element is required to establish the greater offense, as with assault and battery. In the present case it is not even required that additional facts be proved. The identical facts which are required to convict under count two constitute a violation of section 11714.
As already pointed out, it is the law that a defendant may be convicted of two offenses when they differ in their necessary elements and one is not necessarily included within the other. (People v. Craig, supra; People v. Warren, supra; People v. Herbert, supra; People v. Coltrin, supra.) Thus in People v. Coltrin, supra, it was held that two separate noninclusive offenses are committed where the victim dies of an illegal abortion. Neither offense necessarily involves the commission of the other. Abortion does not necessarily involve the death of the victim, and murder may be committed otherwise than in the perpetration of an illegal abortion. Moreover, where death results from an abortion the wrongdoer has accomplished two wrongs. He has put an end to the embryo, as well as to the victim of the illegal operation. But a violation of section 11714 necessarily constitutes a violation of section 702.
Statutory rape and incest arising out of the same act have been held to constitute separate noninclusive crimes. (People v. McCollum, 116 Cal.App. 55 [2 P.2d 432].) Each requires proof of an element not essential to the other, incest, the prohibited relationship, rape, want of consent, actual or constructive. Either may be committed without the other. Where the offender commits both offenses by means of a single act his conduct is doubly wrong. He should be punished for both crimes, although they arise from a single act. But a violation of section 11714 cannot be accomplished without violating section 702.
Death resulting from reckless driving affords another illustration of separate noninclusive offenses. (People v. Herbert, 6 Cal.2d 541 [58 P.2d 909].) Where death ensues from reckless driving the offense of manslaughter is complete. But manslaughter may arise otherwise than through automobile *602 injury and death. Conversely the offense of reckless driving is complete although there is no injury to person or property.
In People v. Day, 199 Cal. 78 [248 P. 250], the question decided was that assault by means or force likely to produce great bodily injury (Pen. Code, 245), and the crime denounced by section 244, Penal Code, were separate, noninclusive offenses. Section 244 provides: "Every person who willfully and maliciously places or throws, or causes to be placed or thrown, upon the person of another, any vitriol, corrosive acid, or caustic chemical of any nature, with the intent to injure the flesh or disfigure the body of such person, is punishable by imprisonment in the state prison not less than one nor more than fourteen years." It is apparent that an assault by means or force likely to produce great bodily injury could occur by other force or means than vitriol, corrosive acid, or caustic chemical. But to establish the separate, noninclusive character of the two offenses the opinion found it necessary to demonstrate that there could be a violation of section 244 without inevitably committing an assault by means or force likely to produce great bodily injury. This the court did by holding that the crime under section 244 would be accomplished although the vitriol, corrosive acid, or caustic chemical thrown was so small in quantity or weak in strength as to be incapable of producing great bodily injury. Illustrations could be multiplied indefinitely.
The decisions in People v. Stangler, 18 Cal.2d 688 [117 P.2d 321] and People v. Bevans, 19 Cal.App.2d 288 [65 P.2d 92], are not inconsistent with these conclusions. In the Stangler case the defendant was charged in separate counts with statutory rape and violation of section 288, Penal Code (lewd and lascivious acts upon the body of a child under 14), based upon the same incident. He was acquitted of violating section 288, but convicted of rape. He contended that the verdicts were inconsistent and that the acquittal of violation of section 288, was, therefore, an acquittal of rape. Statutory rape does not inevitably involve a violation of section 288, for the offense under that section must be committed upon the body of a child under the age of fourteen, whereas statutory rape is perpetrated where the female is under eighteen. Although there is some confusing language in this case, it is clear that the court did not purport to overthrow the law as set forth in extenso in such cases as People v. Coltrin, supra; People v. Herbert, supra, and People v. Day, *603 supra. (As to effect of inconsistent verdicts generally, see 43 Harv.L.Rev. 657; 28 Mich.L.Rev. 339; 14 Cal.L.Rev. 336; 10 So.Cal.L.Rev. 208.) It should also be pointed out that it appears from an examination of the record in People v. Stangler that, insofar as the information charged violation of section 288, it was not based on the rape proper, but on acts preceding it, which, it has been held, may constitute a separate offense. (People v. Jameson, 136 Cal.App. 10 [27 P.2d 935]; People v. McAfee, 82 Cal.App. 389, 405 [255 P. 839].)
In the Bevans case, supra, the defendant was convicted on two counts, one charging contributing to the delinquency of a minor, the other violation of section 288. The court pointed out that one act was proved which would not come under the provisions of section 288, Penal Code, as it was not "upon or with the body, or any part or member thereof" of the child, but which was clearly denounced by the juvenile court law.
It has been said that no rule of thumb is adequate to all cases; that any single test may reach absurd or unjust results in particular cases. (24 Minn.L.Rev. 556, 562; 22 C.J.S. 414.) Regard should be had to the type of offense, notions of fairness, and the purpose of the statute defining the crime involved, etc. (18 Cal.L.Rev. 171.) In the case herein it is obvious that fairness requires that the defendant should not be punished twice for what he did.
It is true that the effect of this holding is that defendant escapes punishment for the more serious offense, violation of section 11714, Health and Safety Code, a felony, and suffers only the lighter punishment prescribed for an offense under section 702, Welfare and Institutions Code, a misdemeanor. This result does not, necessarily, show a weakness in the law. The doctrine that no man shall be put in jeopardy twice for the same offense is based upon sound and fundamental principles, which are recognized by both the federal and state Constitutions. The fault in the present case, if any there be, lies in the procedure adopted. It was within the discretion of the law enforcement authorities to prosecute defendant for either the felony or the misdemeanor. They elected to frame an information charging the two identical offenses. This made it possible for the defendant to adopt the procedure he did.
It should also be pointed out that the record shows that the plea to both counts was made at the same time. Judgment *604 was not pronounced on the plea of guilty to the second count until after defendant had made his plea of not guilty and double jeopardy to the first counts. The court, therefore, pronounced judgment on count two knowing that defendant intended to rely on that judgment in bar of the felony charge. An examination of the pertinent code sections indicates that the trial court, instead of accepting the plea of guilty to count two, and pronouncing judgment thereon, had it desired to hold defendant for the higher offense, could very likely have dismissed the second count, even after plea, and have refused to enter judgment thereon. Section 1021 of the Penal Code provides: "If the defendant was formerly acquitted on the ground of variance between the indictment or information and the proof, or the indictment or information was dismissed upon an objection to its form or substance, or in order to hold the defendant for a higher offense, without a judgment of acquittal, it is not an acquittal of the same offense." (Italics added.)
The above section recognizes a right in the court to dismiss a charge in order to hold the defendant for a higher offense. It is not provided that the dismissal must be made before plea. It has been held that a dismissal made to hold for a higher offense after a jury has been impaneled and sworn, that is, after jeopardy has attached, will bar a subsequent prosecution for a higher offense in which the dismissed charge is included. (People v. Ny Sam Chung, 94 Cal. 304 [28 P. 642, 28 Am.St.Rep. 29]; People v. Hunckeler, 48 Cal. 331; 7 Cal.Jur. 944, 949, 953; see, also, People v. Horowitz, 131 Cal.App. Supp. 791 [19 P.2d 874].) But it does not follow that where the defendant has not submitted himself to trial, but has offered a plea of guilty to the count charging the lighter offense, that the court is without right to dismiss that count in order to hold the defendant for the higher offense.
There are also sections 1385 and 1387, Penal Code, Section 1385 provides: "The court may, either of its own motion or upon the application of the district attorney, and in furtherance of justice, order an action or indictment to be dismissed. The reasons of the dismissal must be set forth in an order entered upon the minutes." (Italics added.) By section 1387 it is provided that the order for dismissal is not a bar if the offense is a felony. (People v. Smith, 143 Cal. 597 [77 P. 449]; People v. Brown, 42 Cal.App. 462 [183 P. 829]; People v. Saenz, 50 Cal.App. 382 [195 P. 442].) *605
As to justices' courts there is a specific section, section 1429, Penal Code, which permits the judge to reject a plea to the lesser offense in order to hold the defendant for the greater. It provides in part as follows: "... If the defendant pleads guilty, the court may, before entering such plea or pronouncing judgment, examine witnesses to ascertain the gravity of the offense committed; and if it appear to the court that a higher offense has been committed than the offense charged in the complaint, the court may order the defendant to be committed or admitted to bail, to answer any indictment which may be found against him by the grand jury, or any information which may be filed by the district attorney."
If sections 1021, 1385 and 1387 of the Penal Code, referred to above, are not broad enough to enable the superior court to reject the plea of guilty to the lesser offense in order to hold the defendant for the greater, then the matter calls for legislative rectification.
The appeals from the orders denying the motions for arrest of judgment and to stay pronouncement of the judgment are dismissed. The judgment and order denying the motion for a new trial are reversed.
Ward, J., concurred.
KNIGHT, J.
I dissent upon the following grounds: First, the reversal of the conviction in my opinion is based not only on a misconstruction of material portions of the record, but also on legal theories which are out of line with the established law of this state as declared in numerous decisions dealing with the question of double jeopardy. Secondly, it will be noted that factually the reversal rests entirely upon the assumption that both counts of the amended information involved but one identical act and that this assumption is based upon the single sentence of a letter written by the attorney general and submitted to this court after the briefs were filed, which the majority opinion interprets to be a concession on the part of the People that both counts of the information involve only one identical act. But when this letter, consisting as it does of two pages, is read as a whole, in the light of the purpose for which it was written, it becomes apparent that the majority opinion has misinterpreted the purport of this single sentence. In any event, the record itself must *606 control in the determination of the appeal, and as will hereinafter be demonstrated, the factual assumption upon which the majority opinion is founded is not only clearly negatived by the allegations of the second count of the amended information, but it is directly contrary to the position taken by the prosecution throughout the trial of the case and in opposing appellant's motions for new trial and arrest of judgment; also contrary to the conclusion reached by the trial court in denying these motions. Moreover, it is directly contrary to the position taken by the appellant himself while testifying at the trial as a witness in his own behalf. Thirdly, section 1041 of the Penal Code declares that a plea of once in jeopardy raises an issue of fact. It becomes an issue of law only when the facts are undisputed. (People v. Wilkison, 30 Cal.App. 473 [158 P. 1067]; People v. Conson, 72 Cal.App. 509 [237 P. 799].) Here at the trial appellant himself treated the issue as a disputed issue of fact, and it was submitted to the determination of the jury as such pursuant to instructions proposed by appellant; the jury found against appellant on that contested issue, and as will hereinafter be shown, the testimony of the defendant himself supports the jury's conclusion. However, the majority opinion fails to give any consideration to this aspect of the case.
Turning to the record itself, the facts and circumstances leading up to the arrest of appellant as they are shown by the evidence of the prosecution, which in view of the verdict must be taken as true, are as follows: At the time of trial the appellant, Gene Krupa, was 34 years old, a musician, and the proprietor and leader of a band which played in night clubs and theatres. Appellant played the drums. Marijuana is a narcotic plant, the growing, possession, transporting, selling or giving away of which constitute separate criminal offenses. (See arts. I and IV, div. 10, chap. 7, Health & Saf. Code.) The plant is dried and smoked in the form of cigarettes, and when inhaled deeply, causes unpredictable results, one of its effects being to distort time. If used by a musician it will cause him to "play faster without feeling the effects of doing it." At the time of appellant's arrest, his band was filling an engagement at a theatre in San Francisco, and he was staying at one of the leading hotels. The adjoining room to his was occupied by his manager, there being a connecting door between the two *607 rooms. Prior to the opening of his engagement in San Francisco he filled one in Los Angeles, and while doing so hired a boy named John Pateakos as valet and property man, whose chief duty was to take care of appellant's clothing, particularly the suits he wore; and he brought the boy to San Francisco with him. On the night of January 18, 1943, three agents from the federal bureau of narcotics, named Guibbini, Grady and Polcuch, having been informed that appellant was in the possession of marijuana cigarettes, called at appellant's dressing room in the theatre in which he was playing, to interview him regarding the information they had received. Pateakos was present at the beginning of the interview, but the agents requested him to leave the room, which he did. After identifying themselves as federal narcotic agents, they asked appellant if he had any marijuana on his person or in his room, and he denied having any. They told him they had been informed that he did have a quantity of marijuana in his possession, and he replied that there was nothing to the information. They then asked him if they might search his dressing room, and he told them to "go ahead." While they were doing so Guibbini asked appellant if he had ever used marijuana, and appellant stated that he had at one time, about 10 years ago, but that lately he had had nothing to do with it. While the search was going on, appellant asked permission to leave the room to go out and wash. He was allowed to do so, but as soon as he left Guibbini followed him and he observed appellant about half way up the stairs leading to the second floor engaged in earnest conversation with Pateakos. Guibbini separated them, and brought appellant back to his dressing room, where he was further questioned. Guibbini thereupon went to a phone and instructed the room clerk at the hotel where appellant was staying to allow no one except appellant to enter the latter's room. Guibbini then proceeded to the hotel, leaving Polcuch with appellant. As Guibbini got out of the elevator at the hall leading to appellant's room he saw Pateakos waiting to enter the elevator. He brought Pateakos back to the room adjoining appellant's, occupied by the manager of the band, who was there present, and upon searching Pateakos found in his pocket two envelopes, one containing 37 marijuana cigarettes and the other containing two whole ones, and one-half of one partially smoked. Shortly thereafter, Polcuch and Grady arrived with appellant, and Polcuch and Guibbini took him *608 to his room, where the officers found some fragments of marijuana in a drawer of a writing desk. Appellant denied having anything to do with the marijuana cigarettes or the fragments found. He was then taken back to the adjoining room, and Pateakos was taken to appellant's room. Pateakos refused then to make a statement in explanation of his possession of the marijuana cigarettes. He admitted having them in his pocket, but he denied knowing anything about marijuana. He was then returned to the room where appellant was, and appellant stated if the boy had the marijuana cigarettes on him, it was his worry and not his (appellant's); that he did not have anything to do with it. The agents then took Pateakos to their office, where he made a statement, and appellant was placed under arrest the following day.
Pateakos appeared as a witness against appellant at the preliminary examination, but shortly afterwards disappeared, and was unavailable at the trial. The substance of the testimony given by him at the preliminary examination was as follows: He was 20 years of age, and his home was in New Bedford, Massachusetts. He had been employed at the Paladium at Hollywood, where appellant employed him as his valet and property man. Part of his duties were to "carry" all of appellant's "clothes along," and "assist him at his room." After leaving appellant's dressing room at the theatre at the time of the visit of the federal agents, appellant came out and overtook him about half way up the stairs; and appellant told him to go to his room and get an envelope in his coat pocket. In obedience to this request he ran to the hotel and went to the clerk's office to get the key to appellant's room, but was told they were not supposed to give out the key. He then went to a "bell hop" he knew, who let him into appellant's room, where he got the envelope from a pocket of appellant's coat. It was in the closet. The envelope was open, and contained marijuana cigarettes. After leaving the room he recalled that one day while in the room the drawer to the writing desk was open and he had noticed two and a half marijuana cigarettes in the drawer, so he told the bell boy he had forgotten something and returned to the room, where he took these two and a half cigarettes and placed them in an envelope and took them with him. At the elevator he met Guibbini, who took him to the band manager's room, searched him and found the two envelopes containing the marijuana cigarettes in the clothing he wore. *609
The bellboy corroborated Pateakos' testimony. He testified that he let Pateakos into the room at the time indicated and saw him remove the envelope from the clothes in the closet and put it in his pocket; that he let him into the room the second time when Pateakos stated in the hall he had forgotten something; that he saw Pateakos take another envelope from the writing desk; that when he let Pateakos in the room he was unaware of the instructions to the clerk to permit no one but appellant to enter his room.
Section 11712 of the Health and Safety Code deals with the possession of narcotics. It provides that any person convicted of having possession of any narcotic is punishable by imprisonment in the county jail or the state prison. Section 11713 of the same code deals with the act of transportation of narcotics. It provides that any person convicted of transporting, selling, or giving away any narcotics is punishable by imprisonment in the county jail or the state prison. The element of transportation is not included in the former section, nor is the element of possession included in the latter. They constitute separate offenses under the different sections. Section 11714 of said code declares that every person who hires, employs or uses a minor in unlawfully transporting or carrying any narcotic is punishable by imprisonment in the state prison. This section makes no mention of possession.
The juvenile law has been made a part of the Welfare and Institutions Code, and section 702 thereof provides among other things that any person who commits an act which causes or tends to cause or encourage a minor to come within the provisions of the juvenile law as specified in section 700 thereof is guilty of a misdemeanor, and among the acts specified in section 700 is the violation of any law of this state.
Under the authority of the provisions of the two statutes above mentioned and in view of the facts developed at the preliminary examination, the district attorney on February 2, 1943, filed an information against the appellant charging him in separate counts with having violated both the Health and Safety Code and the juvenile law. The first count charged appellant with having violated section 11714 of the Health and Safety Code, to wit, with having employed and used Pateakos "in unlawfully transporting and carrying a quantity of cigarettes containing a narcotic." By the second *610 count he was charged with having committed two acts in violation of the juvenile law: (1) by inducing Pateakos "to keep" a quantity of narcotics in his, Pateakos', room; and (2) by permitting and allowing Pateakos to "handle and have in the possession of said John Pateakos" cigarettes containing marijuana, all of which it was alleged did cause and contribute to the said Pateakos "becoming and remaining such a person as is described" in section 700 of the juvenile law, to wit, a person "who violates any law of this state." Appellant moved to dismiss the information and filed a demurrer thereto, but on April 19, 1943, before any ruling was made on his motion or demurrer, he entered a plea of guilty to the second count and asked for probation. The cause was then continued from time to time until May 17, 1943, on which date the district attorney filed an amended information. Count 1 as originally filed was not changed, but count 2 was. The charge made in the original count 2 that appellant induced Pateakos "to keep" narcotics in his room was omitted, and it was charged in the amended count 2 (1) that appellant induced and persuaded Pateakos to "obtain and remove and transport" from the pocket of appellant's coat an envelope containing a quantity of narcotics; and (2) that he permitted and allowed Pateakos "to handle and have in the possession" of Pateakos cigarettes containing marijuana, all of which did encourage and cause and contribute to Pateakos becoming a person such as is described in section 700 of the juvenile law, to wit, a minor who violates any law of this state. In other words, in count 2 as amended appellant was charged with having induced Pateakos to violate two separate sections of the Health and Safety Code, to wit, (1) possession of narcotics ( 11712); and (2) transporting narcotics ( 11713). On the day following the filing of the information appellant was again arraigned and the minutes of the court as originally entered recited the following: "Thereupon, the defendant, Gene Krupa, pleads that he is not guilty as charged in count one of the amended information, and not guilty by reason of a former holding; and guilty to count two of the amended information"; whereupon appellant interposed a motion for probation. (It should be here stated, however, that after the clerk's transcript was filed herein the trial court made a nunc pro tunc order correcting the minutes so that as corrected the plea of once in jeopardy was legally sufficient to meet the requirements of *611 Pen. Code, 1017, subd. 4.) On the same day that appellant asked for probation his motion was denied, and he was sentenced to imprisonment in the county jail for ninety days and fined $500; thereafter and on June 29, 1943, he was brought to trial before a jury on the second count.
On account of the disappearance of Pateakos the testimony given by him at the preliminary examination was read to the jury. Appellant became a witness in his own behalf, and in contradiction of the denials he had made to the federal agents on the night of January 18th he admitted that all of the marijuana cigarettes which had been taken from his clothes belonged to him. In this connection he testified that he brought them to San Francisco from Los Angeles in the clothing which Pateakos was required to take care of, and that he had smoked part of one of the cigarettes after coming to San Francisco. He further admitted that while in San Francisco the cigarettes were kept in the clothes Pateakos was required to take care of, and that Pateakos "handled the clothes every day in the week." He denied, however, that he had asked Pateakos on the night in question to remove them from the pockets of his clothes. He was asked why he pleaded guilty to count 2 wherein he had been charged with having done so, and in reply he went on to say that he was advised by his attorney that it was against the "rule" in California to have a minor around where there were marijuana cigarettes, and that Pateakos had taken care of his, appellant's, room, his laundry, and his clothes. In other words, the purport of his testimony was that he had pleaded guilty to that portion of the charge that he had allowed Pateakos to "handle" and have possession of the cigarettes, but that he was not guilty of the other act charged therein, to wit, that he had induced the boy to transport and carry the cigarettes. In that state of the record the issue of double jeopardy was submitted to the determination of the jury pursuant to two instructions, one of which was proposed by appellant, and was as follows: "It appears from the evidence in this case that Gene Krupa pleaded guilty on the 19th day of May, 1943, in this Superior Court to the charge of contributing to the delinquency of John Pateakos, a minor, committed by allowing said John Pateakos to have and handle the marijuana cigarettes involved in the prosecution now before you and by persuading said John Pateakos to obtain and *612 remove and transport said cigarettes from the pocket of a coat, and therefore, if you find the present information charges the same offense the defendant is twice in jeopardy and entitled to an acquittal." Upon the evidence before it the jury returned a verdict finding appellant guilty, which necessarily carried with it the implied finding that the act of allowing Pateakos to handle and have possession of the marijuana cigarettes was not the same act involved in the charge of inducing Pateakos to transport and carry the cigarettes, on which charge appellant was then on trial; and as stated, the testimony of appellant himself is legally sufficient to support the conclusion reached by the jury.
Even assuming, however, that this court, in the exercise of its reviewing powers, has the right to disregard the conclusion reached by the jury and the evidence supporting it, and may, contrary thereto and as a matter of law, hold that the handling, transportation, possession and carrying constituted one transaction, the judgment in my opinion should nevertheless be affirmed, for regardless of whatever may be the rule in other jurisdictions, it is the well settled law of this state "that a plea of once in jeopardy ... is not good unless the second prosecution is for the same offense, both in law and in fact, as that for which the first prosecution was instituted." (7 Cal.Jur. 955.) In other words, the established rule is that a defendant may be convicted on two or more separate offenses arising out of the same transaction where each is stated in a separate count and when the offenses differ in their elements and one is not included in the other. The real test is the identity of the offenses, as distinguished from the identity of the transaction from which they arise. (People v. Hoyt, 20 Cal.2d 306 [125 P.2d 29]; People v. Venable, 25 Cal.App.2d 73 [76 P.2d 523]; People v. Bevans, 19 Cal.App.2d 288 [65 P.2d 92]; People v. Coltrin, 5 Cal.2d 649 [55 P.2d 1161]; People v. Warren, 16 Cal.2d 103 [104 P.2d 1024]; People v. Zimmer, 23 Cal.App.2d 581 [73 P.2d 923].) The same doctrine is stated in 15 American Jurisprudence at page 63 as follows: "A single act may constitute two or more distinct and separate offenses, and a person charged therewith may be convicted and punished for both. Prosecutions of a person for separate offenses based upon the same transaction do not involve double jeopardy where there are distinct elements in one offense which are not included in the other. If a single transaction constitutes two or more offenses wherein *613 the lesser offense is not necessarily involved in the greater and the facts necessary to convict on the second prosecution would not necessarily have convicted on the first, then the first prosecution is not a bar to the second." Later on, in the same volume at page 65, it is said: "A putting in jeopardy for one act is no bar to a prosecution for a separate and distinct act merely because they are so closely connected in point of time that it is impossible to separate the evidence relating to them on the trial for the one of them first had. Consequently, a plea of former jeopardy will not be sustained where it appears that in one transaction two distinct crimes were committed." And again on page 67 it is stated: "A single act may be an offense against two statutes; and if one statute necessitates proof of a different circumstance or element from that which the other requires, an acquittal or conviction under either statute does not exempt the defendant from prosecution and punishment under the other. ... Undoubtedly, it is within the power of the legislature to create two or more offenses which may be committed by a single act, each of which is punishable by itself. A conviction or acquittal in such case under either statute would be no bar to a conviction under the other, for the accused would not be twice in jeopardy for one offense, but only once in jeopardy for each offense."
In applying the foregoing rules in this state it has been held that an acquittal on a charge of rape does not exclude a conviction for incest, since they were not identical offenses (People v. McCollum, 116 Cal.App. 55 [2 P.2d 432].) It has also been held that the conviction of misdemeanors consisting in the unlawful possession and manufacture of intoxicating liquor, does not constitute former jeopardy in a prosecution for possession of a still, notwithstanding the fact that all of the offenses were committed at the same time and place. (People v. Painetti, 210 Cal. 476 [292 P. 965].) In People v. Bevans, supra, the appellant was charged in separate counts with a violation of section 288 of the Penal Code and with violation of the juvenile court law, and he was convicted on both counts. He contended that the offenses were identical, but the court held otherwise, saying in part: "... the offenses charged, while identical in time, were not the same either in law or in fact. The conviction of the one would not be a bar to the conviction of the other." In People v. Moon, 7 Cal.App.2d 96 [45 P.2d 384], it was held that in a *614 prosecution for robbery and grand theft where the two offenses consisting of different elements but arising from the same acts were charged in two separate counts of the information, the dismissal of the count charging robbery did not bar a conviction upon the second count for grand theft. And in People v. Sheasbey, 82 Cal.App. 459 [255 P. 836], it was held that robbery and kidnapping do not possess the same elements and both may be punished although relating to the same transaction.
In the present case the elements of the two offenses denounced by the separate statutes which form the basis of the two counts were essentially different. In order to establish guilt under the second count, which was based on the juvenile court law, to which appellant pleaded guilty, all that was necessary to prove was that the minor violated section 11712 of the Health and Safety Code by having possession of narcotics, and that appellant contributed to such act of violation by the minor; whereas in order to establish guilt under the first count which was based on the Health and Safety Code, and upon which appellant was convicted by a jury, it was essential for the prosecution to prove more than mere possession of narcotics by the minor; it was required to establish the additional element that appellant induced the minor to transport and carry the narcotics.
It is my conclusion, therefore, that under the doctrine of the authorities above cited the conviction under the second count did not bar a conviction under the first, and that accordingly the judgment should be affirmed.
|
NUMBER 13-07-00641-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
______________________________________________________________
LAURA JANE McCUMBER, Appellant,
v.
BRUCE McCUMBER, Appellee.
____________________________________________________________
On appeal from the County Court
of Live Oak County, Texas.
______________________________________________________________
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Garza and Vela
Memorandum Opinion Per Curiam
Appellant, Laura Jane McCumber, pro se, appeals the trial court’s judgment in a
forcible detainer action. We affirm the judgment of the trial court.
Appellant's original brief in this matter was received by this Court on November 9,
2007. The Court notified appellant that her brief failed to comply with Texas Rule of
Appellate Procedure 38.1 and requested that she file an amended brief. See TEX . R. APP.
P. 38.1. Appellant's amended brief was received by this Court on March 26, 2008. The
amended brief failed generally to comply with Rules 9.4 and 38.1 of the Texas Rules of
Appellate Procedure. See generally id. 9.4, 38.1. Accordingly, we directed appellant to
file an amended brief that complied with these rules within ten days from the date of that
notice. We informed appellant that if she filed another non-compliant brief, the Court might
strike the brief, prohibit appellant from filing another, and proceed as if appellant had failed
to file a brief. See id. 38.9(a).
Appellant filed a motion for extension of time to file her second amended brief, and
the Court received appellant’s second amended brief on May 16, 2008. The Court grants
appellant’s motion for extension of time and allows the untimely filing thereof; however,
appellant’s second amended brief also fails to substantially comply with the appellate rules.
See id. Specifically, appellant’s redrawn brief fails to comply with Rule 38.1, which requires
that appellate briefs contain “argument for the contentions made, with appropriate citations
to authorities and to the record.” See id. 38.1(h). Accordingly, we strike the brief, prohibit
appellant from filing another, and proceed as if appellant had failed to file a brief. See id.
38.9(a).
The rules of procedure provide that if an appellant's brief is not timely filed but “an
appellee's brief is filed, the court may regard that brief as correctly presenting the case and
may affirm the trial court's judgment upon that brief without considering the record.” See
id. 38.8(a)(3). Appellee, Bruce McCumber, filed an appellee’s brief in this cause on
December 27, 2007. We regard that brief as correctly presenting the case. See id. We
2
affirm the trial court’s judgment upon that brief without the necessity of examining the
record. See id.; Cognata v. R. W. Johnson Constr. Co., No. 13-05-234-CR, 2006 Tex.
App. LEXIS 3037, *5-6 (Tex. App. Corpus Christi Apr. 13, 2006, pet. denied) (mem. op.).
The judgment of the trial court is affirmed.
PER CURIAM
Memorandum Opinion delivered
and filed this the 26th day of June, 2008.
3
|
423 F.3d 557
Michelle BAZZETTA, et al., Plaintiffs-Appellees,v.Kenneth McGINNIS, Director of Michigan Department of Corrections; Michigan Department of Corrections, Defendants-Appellants.
No. 04-1823.
United States Court of Appeals, Sixth Circuit.
Argued: June 8, 2005.
Decided and Filed: September 13, 2005.
1
ARGUED: Lisa C. Ward, Office of the Attorney General, Lansing, Michigan, for Appellants. Deborah A. LaBelle, Law Offices of Deborah LaBelle, Ann Arbor, Michigan, for Appellees. ON BRIEF: Lisa C. Ward, Leo H. Friedman, Office of the Attorney General, Lansing, Michigan, for Appellants. Deborah A. LaBelle, Patricia A. Streeter, Law Offices of Deborah LaBelle, Ann Arbor, Michigan, Michael J. Barnhart, Detroit, Michigan, for Appellees.
2
Before: CLAY and SUTTON, Circuit Judges; OBERDORFER, District Judge.*
3
OBERDORFER, District Judge.
4
This case marks another chapter in a ten-year controversy between incarcerated felons, their visitors, and the Michigan Department of Corrections ("MDOC"). In 1995, MDOC issued regulations affecting prisoners' visitation privileges, including a permanent ban on virtually all visitation for prisoners found guilty of two or more substance abuse violations. After a bench trial, the district court ruled that MDOC's visitation limitations, including the substance abuse regulation, violated the prisoners' constitutional rights under the First and Eighth Amendments and their Fourteenth Amendment substantive and procedural due process rights. A panel of this court affirmed the district court's judgment and the district court issued an order of compliance enjoining the MDOC from implementing the regulations. The Supreme Court granted the MDOC's petition for certiorari on the prisoners' First, Eighth and Fourteenth Amendment substantive due process claims and reversed this court's affirmance in Overton v. Bazzetta, 539 U.S. 126, 123 S.Ct. 2162, 156 L.Ed.2d 162 (2003). The Court did not grant certiorari with respect to the plaintiffs' Fourteenth Amendment procedural due process claim, nor otherwise address it directly. On remand, the district court declined to dissolve its injunctive order of compliance, ruling that its procedural due process holding was not disturbed by the Supreme Court's decision.
5
MDOC appeals the district court's refusal to dissolve the injunction, arguing that although the Supreme Court did not grant certiorari on this court's procedural due process holding, it implicitly foreclosed any facial procedural due process challenges to the substance abuse regulation. Thus, at issue is whether the district court abused its discretion in failing to dissolve its injunctive order in light of Overton. For the reasons stated below, we hold that the district court abused its discretion because its procedural due process ruling is inconsistent with Overton. Accordingly, we REVERSE the district court's opinion and order denying MDOC's motion for summary judgment and granting the plaintiffs' motion to enforce compliance. Our reversal is without prejudice to any claim by an individual prisoner that the regulation, as applied to that prisoner, imposes an "atypical and significant hardship," thus implicating a protected liberty interest.
I. BACKGROUND
6
In 1995, MDOC issued regulations limiting the visitation rights of prisoners, in part to control the widespread use of drugs and alcohol. Overton, 539 U.S. at 129-130, 123 S.Ct. 2162. Among other limitations, the regulations authorize the Director of the MDOC to restrict permanently all visits for a prisoner who is found guilty administratively of "[t]wo or more violations of the major misconduct charge of substance abuse," e.g. possession of narcotics, alcohol, unauthorized prescription drugs, or drug paraphernalia, or for failure to submit to a drug test. Bazzetta v. McGinnis, 286 F.3d 311, 321 & n. 2 (6th Cir.2002) (internal quotations omitted). According to the substance abuse regulation, prisoners whose visits have been permanently restricted nevertheless receive visits from "attorneys or [their] representative[s], [or] qualified clergy and staff from the Office of the Legislative Corrections Ombudsman. . . ." Bazzetta v. McGinnis, 148 F.Supp.2d 813, 833 (E.D.Mich.2001). Inmates may also request that the visitation ban be lifted after six months or two years, depending on the underlying infractions. Id. Reinstatement of visitation privileges is within the warden's discretion. Id.
7
In August 1995, the plaintiffs, a class of prisoners incarcerated by MDOC, and their prospective visitors, challenged the substance abuse regulation on its face.1 Id. at 815. They asserted that the permanent ban on visitors for two violations of the drug abuse policy: (1) infringed the prisoners' First Amendment right of intimate association and was not reasonably related to a valid penological objective; (2) constituted cruel and unusual punishment prohibited by the Eighth Amendment; and (3) violated the prisoners' Fourteenth Amendment procedural due process rights. Id. at 845-58. The case proceeded to a bench trial and, on April 19, 2001, the district court held that the regulations violated the prisoners' rights under the First, Eighth and Fourteenth Amendments. Id.
8
In addressing the plaintiffs' procedural due process claim, the court first asked whether Michigan prisoners have a liberty interest in visitation that had been infringed by the substance abuse regulation. Id. at 857. The court noted that a liberty interest arises from two distinct sources—from the implicit guarantees of the Due Process Clause itself, or as a result of state action. Id. The court addressed only whether the prisoners derive a liberty interest from the state-issued substance abuse regulation. Id. Accordingly, it analyzed the regulations under the formulation established by the Supreme Court in Sandin v. Conner, 515 U.S. 472, 115 S.Ct. 2293, 132 L.Ed.2d 418 (1995)—that a liberty interest arises where the state's regulations impose "freedom from restraint which, while not exceeding the sentence in such an unexpected manner as to give rise to protection by the Due Process Clause of its own force, nonetheless impose[][an] atypical and significant hardship on the inmate in relation to the ordinary incidents of prison life." Id. at 484, 115 S.Ct. 2293.
9
In determining that the substance abuse regulation imposes an "atypical and significant hardship," the court considered (1) the effect of the restraint on the length of prison confinement; (2) the extent to which the prisoners' confinement is altered from routine prison conditions; and (3) the duration of the restraint. Bazzetta, 148 F.Supp.2d at 857 (citing Jones v. Baker, 155 F.3d 810, 814 (6th Cir.1998) (Gilman, J., concurring)). It acknowledged that the regulations do not affect the length of confinement but found that they create "an unusually harsh and punitive environment for the prisoners restricted." Id. at 858. Further, it found significant that the restriction on visitation is permanent—"[a]lthough the regulations provide for the possibility of review after two years, there are many instances where no such review occurs, or where reinstatement of privileges after two years is denied." Id.
10
Recognizing a liberty interest in visitation that had been infringed by the permanent visitation ban, the court then asked " `whether the procedures attendant upon that deprivation were constitutionally sufficient.'" Id. at 857 (citing Hewitt v. Helms, 459 U.S. 460, 472, 103 S.Ct. 864, 74 L.Ed.2d 675 (1983)). It found many procedural problems with the implementation of the permanent visitation ban — notably that: (1) there are no written criteria to guide the Director of the MDOC's decision whether to impose the ban, resulting in inconsistent enforcement, id. at 836-37; (2) prisoners are not entitled to a hearing on the imposition of the permanent ban or an opportunity to challenge the ban based on unusual or extenuating circumstances, id. at 838, n. 39; and (3) there are no ascertainable criteria for the restoration of visiting privileges, without any apparent uniform standard being applied, id. at 839. The court thus determined that "[t]he inconsistency and uncertainty of enforcement, the absence of any criteria for reinstatement, and the failure to provide any opportunity to be heard are all procedural deprivations of constitutional dimension." Id. at 858.
11
On April 16, 2002, a panel of this court affirmed the district court judgment for the plaintiffs. Bazzetta v. McGinnis, 286 F.3d 311, 324 (6th Cir.2002). The district court subsequently issued an order of compliance on May 16, 2002, directing MDOC to comply with the terms of the court's judgment and enjoining the Department from enforcing the regulations "or any rule, policy, or procedure which bans, restricts, prevents or limits visitation based on prior or future misconducts for controlled substance violations." JA 75. In response to the district court's order, MDOC lifted the regulations on visitation privileges on all inmates subject to the permanent ban. JA 189.
12
MDOC filed and the Supreme Court granted a petition for certiorari. The Court limited its review, however, to "whether the regulations violate the substantive due process mandate of the Fourteenth Amendment, or the First or Eighth Amendments . . ." Overton, 539 U.S. at 128, 123 S.Ct. 2162. On the merits, the Court reversed, ruling that the regulations did not facially infringe the prisoners' First Amendment rights of intimate association or violate their Fourteenth Amendment substantive due process rights. Id. at 131-36, 123 S.Ct. 2162. In so holding, the Court stated that it was not implying that "any right to intimate association is altogether terminated by incarceration" but it noted that "[w]e must accord substantial deference to the professional judgment of prison administrators, who bear a significant responsibility for defining the legitimate goals of a corrections system and for determining the most appropriate means to accomplish them." Id. at 131-32, 123 S.Ct. 2162; see also id. at 134, 123 S.Ct. 2162 ("Withdrawing visitation privileges is a proper and even necessary management technique to induce compliance with the rules of inmate behavior, especially for high-security prisoners who have few other privileges to lose."). The Court also held that the withdrawal of visitation privileges did not "fall below the standards mandated by the Eighth Amendment." Id. at 137, 123 S.Ct. 2162.
13
The Overton Court did not grant certiorari on the issue of whether the regulations violated the prisoners' procedural due process rights under the Fourteenth Amendment. In the context of its Eighth Amendment discussion, however, the Court noted that the "withdrawal of visitation privileges for a limited period as a regular means of effecting prison discipline . . . . is not a dramatic departure from accepted standards for conditions of confinement. Cf. Sandin v. Conner, 515 U.S. 472, 485, 115 S.Ct. 2293, 132 L.Ed.2d 418 (1995)." Id. The Court admonished that "[i]f the withdrawal of all visitation privileges were permanent or for a much longer period, or if it were applied in an arbitrary manner to a particular inmate, the case would present different considerations." Id. at 137, 123 S.Ct. 2162. It concluded, however, that "[a]n individual claim based on indefinite withdrawal of visitation or denial of procedural safeguards . . .would not support [a] ruling . . . that the entire regulation is invalid." Id.
14
On August 26, 2003, MDOC moved for peremptory reversal of the district court's order of compliance and dismissal of the case. A panel of this court denied the motion so that the district court could consider the validity of the order in the first instance. Bazzetta v. McGinnis, 79 Fed.Appx. 161, 2003 WL 22434575, at * 1 (6th Cir. Oct.24, 2003). A separate panel of this court remanded the case to the district court "for further consideration in light of the Supreme Court opinion." Bazzetta v. McGinnis, 73 Fed.Appx. 842, 2003 WL 22071463, at * 1 (6th Cir. Aug.28, 2003). This panel specifically noted that the Supreme Court preserved "any argument that an individual claim based on indefinite withdrawal of visitation or denial of procedural safeguards would pass muster under the First and Eighth Amendments. . . ." Id. (internal quotations omitted).
15
Meanwhile, MDOC reinstated the regulation permitting permanent visitation restrictions for two major misconduct substance abuse violations, with a few minor revisions. JA 161-62. MDOC voluntarily chose not to reinstate the restrictions on individual prisoners that were removed due to the May 16, 2002 order of compliance. Id.
16
On October 15, 2003, MDOC moved for summary judgment in the district court on the plaintiffs' procedural due process claims. JA 53-77. The plaintiffs countered with a motion to enforce compliance. JA 78-91. On December 23, 2003, the district court denied MDOC's motion for summary judgment, granted the plaintiffs' motion to enforce compliance and confirmed MDOC's obligation to present a proposal to cure the procedural due process violations arising from the imposition of the substance abuse regulation. JA 185-198. The district court acknowledged that MDOC had revised the regulation but found that it failed to correct the significant procedural problems associated with the implementation of the permanent ban on visitation. Id. Further, the district court rejected MDOC's mootness claim, holding that "`[i]t is well settled that a defendant's voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice.'"2 Id. at 189 (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Serv., 528 U.S. 167, 189, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (internal quotations omitted)).
17
Despite the district court's December 23, 2003 order, MDOC continued to issue permanent bans on visitation to inmates committing two major misconduct substance abuse violations. On February 11, 2004, upon further motions, the district court issued a supplemental order confirming its December 23, 2003 ruling and denying MDOC's motion for an evidentiary hearing. JA 299-301. The court, however, certified the question of whether its order was fully consistent with the Supreme Court's decision in Overton for interlocutory appeal, in accordance with 28 U.S.C. § 1292(b). Id. at 301.
18
On February 20, 2004, MDOC petitioned for permission to appeal, representing that the district court had certified the question for review as "whether prisoners have a liberty interest in visitation." A panel of this court denied the petition as unnecessary, holding that MDOC, in reality, was seeking to appeal the district court's "order refusing to dissolve the injunctive relief previously ordered by the court [namely, the May 16, 2002 order of compliance] pursuant to its finding that the plaintiffs' procedural due process rights were violated." JA 328-29. Thus, the panel treated the petition as a notice of appeal pursuant to 28 U.S.C. § 1291(a)(1). Id. We now entertain that appeal.
II. ANALYSIS
19
A. Standard of Review for Procedural Due Process Claims
20
The Fourteenth Amendment protects an individual from deprivation of life, liberty or property, without due process of law. "[T]hose who seek to invoke its procedural protection must establish that one of these interests is at stake." Wilkinson v. Austin, ___ U.S. ___, ___, 125 S.Ct. 2384, 2393, 162 L.Ed.2d 174 (2005). Accordingly, a procedural due process analysis addresses two questions. "[T]he first asks whether there exists a liberty or property interest which has been interfered with by the State, the second examines whether the procedures attendant upon that deprivation were constitutionally sufficient." Kentucky Dep't of Corr. v. Thompson, 490 U.S. 454, 460, 109 S.Ct. 1904, 104 L.Ed.2d 506 (1989) (citations omitted).
21
In evaluating a claimed liberty interest by prison inmates, courts are mindful that imprisonment necessarily "carries with it the circumscription or loss of many significant rights." Hudson v. Palmer, 468 U.S. 517, 524, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984). The "curtailment of certain rights is necessary, as a practical matter, to accommodate a myriad of `institutional needs and objectives' of prison facilities, chief among which is internal security." Id. at 524, 104 S.Ct. 3194, (internal citations omitted). Accordingly, not every "action taken for a punitive reason encroaches upon a liberty interest under the Due Process Clause. . . ." Sandin, 515 U.S. at 484, 115 S.Ct. 2293.
22
Prisoners, however, retain a "residuum of constitutionally protected liberty," Thompson, 490 U.S. at 466, 109 S.Ct. 1904 (Marshall, J., dissenting); see Meachum v. Fano, 427 U.S. 215, 224, 96 S.Ct. 2532, 49 L.Ed.2d 451 (1976) ("Our cases hold that a convicted felon does not forfeit all constitutional protections by reason of his conviction and confinement in prison."), that emanates from two discrete sources: (1) state law can establish a protectible liberty interest, or (2) the Constitution can create a liberty interest when a condition or restraint is so egregious as to implicate the Due Process Clause itself. See Austin, 125 S.Ct. at 2393.
23
Here, MDOC argues that the Supreme Court's decision in Overton implicitly held that the substance abuse regulation neither creates a protectible liberty interest nor implicates the guarantees of the Due Process Clause itself. MDOC claims that because the Overton Court foreclosed finding a liberty interest on the face of the regulation, when it determined that it did not constitute a "dramatic departure from acceptable standards for conditions of confinement," Overton, 539 U.S. at 137, 123 S.Ct. 2162, the district court lacks authority to continue to enjoin its implementation of the substance abuse regulation, absent additional procedural safeguards. Accordingly, MDOC argues, the district court erred in refusing to dissolve its May 16, 2002 order of compliance.
24
The plaintiffs counter that the Supreme Court did not grant certiorari on the procedural due process issue and, thus, could not have overruled the holding of the district court that the substance abuse regulation established a liberty interest in visitation. In fact, the plaintiffs argue, the Overton Court expressly preserved their right to assert an "as applied" challenge to the regulation, such as the one sustained by the district court in this case. Moreover, they contend that even if the Supreme Court's decision foreclosed finding a state-created liberty interest arising from the substance abuse regulation, the prisoners' liberty interest in visitation is implicit in the Due Process Clause.
25
We review a district court's denial of a request to dissolve an injunction for abuse of discretion. See Pinette v. Capitol Square Review & Advisory Bd., 30 F.3d 675, 678 (6th Cir.1994), aff'd, 515 U.S. 753, 115 S.Ct. 2440, 132 L.Ed.2d 650 (1995). However, a district court's improper application of governing law constitutes an abuse of discretion. See United States v. Colahan, 635 F.2d 564, 566 (6th Cir.1980); see also Mascio v. Pub. Employees Ret. Sys. of Ohio, 160 F.3d 310, 311 (6th Cir.1998) (noting that a district court's decisions on injunctive relief are seldom disturbed unless it relied on clearly erroneous findings of fact, improperly applied governing law, or used an erroneous legal standard).
B. Overton 's Implicit Holding
26
Plaintiffs first argue that the district court did not improperly apply governing law, i.e. Overton, by refusing to dissolve its May 16, 2002 injunctive order because the Overton Court did not grant certiorari on the procedural due process issue. Further, they claim that nothing in the Court's decision indirectly undermined the district court's finding that the substance abuse regulation violated the prisoners' procedural due process rights. We agree that the Court did not grant certiorari or otherwise expressly address the procedural due process issue. Nonetheless, we find that the Court implicitly ruled on this issue, in a manner inconsistent with the holding of the district court.
27
In the context of analyzing the "unusual" component of the Eighth Amendment's prohibition against cruel and unusual punishment, the Overton Court held that the substance abuse regulation was a "regular means of effecting prison discipline" which did not constitute "a dramatic departure from accepted standards for conditions of confinement." This statement is antithetical to the district court's finding a liberty interest in prison visitation because the regulation imposes on prisoners an "atypical" hardship in comparison to the ordinary incidents of prison life. See supra.
28
Furthermore, the Overton Court cited Sandin in support of its statement that the regulation was not a "dramatic departure." In Sandin, the only issue was the prisoners' right to procedural due process protection before placement in segregated confinement for 30 days, imposed as discipline for disruptive behavior. The Sandin Court observed that it had previously employed a methodology for identifying state-created liberty interests that emphasized "the language of a particular [prison] regulation" instead of "the nature of the deprivation." 515 U.S. at 481, 115 S.Ct. 2293. The Court abandoned this methodology, significantly limiting the authority of courts to find liberty interests stemming from positive state law in the prison context. Instead, it stated that the relevant inquiry must focus on the nature of the deprivation imposed on a prisoner, holding that if the nature of the deprivation does not impose an "atypical and significant hardship . . . in relation to the ordinary incidents of prison life," prisoners will not have a liberty interest in avoiding the deprivation. "Applying this refined inquiry, Sandin found no liberty interest protecting against a 30-day assignment to segregated confinement because it did not present a dramatic departure from the basic contours of the conditions of [the inmate's] sentence." Austin, 125 S.Ct. at 2394 (internal quotations omitted).
29
We extrapolate from Overton and Sandin that the substance abuse regulation is neither a "dramatic departure," nor an "atypical and significant hardship" in relation to the ordinary incidents of prison life. Thus, although the issue was not directly before the Overton Court, Court precedent and dictum has signaled against our finding a liberty interest on the face of the substance abuse regulation.
30
C. "As Applied" Procedural Due Process Challenge
31
The plaintiffs claim, however, that the district court did not rule that the regulation on its face violated the prisoners' procedural due process rights. Instead, they assert, the district court found that the regulation, "as applied" to Michigan prisoners, triggered a state-created liberty interest. Citing the Overton Court's language that an individual prisoner could bring a "claim based on indefinite withdrawal of visitation or denial of procedural safeguards," and that "if faced with evidence that MDOC's regulation is treated as a de facto permanent ban on all visitation for certain inmates, we might reach a different conclusion in a challenge to a particular application of the regulation," the plaintiffs maintain that Overton expressly preserved their right to bring "as applied" claims.
32
In arguing that their challenge, as sustained by the district court, does not attack the substance of the regulation, but merely its implementation, the plaintiffs misconstrue both the nature of the district court's ruling and the difference between a facial and as applied procedural due process challenge. The district court held that the substance abuse regulation, on its face, created a liberty interest because it imposed an "atypical and significant hardship" on all prisoners subject to the restriction. See Bazzetta, 148 F.Supp.2d at 858. While the court cited examples of the treatment of particular inmates in its findings of fact to illustrate what it perceived as the general procedural deficiencies in the implementation of the regulation, id. at 836-43, it did not make factual findings as to the application of the regulation to any particular prisoner sufficient to support an as applied procedural due process claim.
33
As detailed above, the Overton Court subsequently foreclosed a facial procedural due process challenge under the standard set forth in Sandin. The Court's decision in Overton does not preclude individual prisoners from challenging a particular application of the substance abuse regulation on First Amendment, Eighth Amendment or Fourteenth Amendment grounds but such "[a]n individual claim based on indefinite withdrawal of visitation or denial of procedural safeguards, . . . [does] not support the ruling. . . that the entire regulation is invalid." Overton, 539 U.S. at 137, 123 S.Ct. 2162; see also Jones v. Baker, 155 F.3d at 816 (Gilman, J., concurring) (noting that Sandin's principal directive is that "courts should look to see if the particular inmate has been deprived of a state-created interest of `real substance'") (citing Sandin, 515 U.S. at 478, 115 S.Ct. 2293); McClary v. Kelly, 4 F.Supp.2d 195, 199 (W.D.N.Y.1998) ("At its core, Sandin instructs courts to look at the nature and extent of the particular deprivation in deciding whether a protected liberty interest is implicated.").
34
D. Implicit Guarantees of Due Process Clause
35
Finally, the plaintiffs argue that regardless of whether the substance abuse regulation creates a liberty interest, such an interest emanates from the Due Process Clause itself because the permanent ban on visitation impinges on the prisoners' constitutional right to intimate association.
36
In addition to state-created liberty interests, the Constitution itself can create protectible liberty interests, but only if corrections officials impose restraints upon the prisoner which "exceed [the prisoner's] sentence in such an unexpected manner as to give rise to protection by the Due Process Clause of its own force." Sandin, 515 U.S. at 484, 115 S.Ct. at 2300. In Vitek v. Jones, 445 U.S. 480, 100 S.Ct. 1254, 63 L.Ed.2d 552 (1980), for example, the Supreme Court held that a prisoner has a liberty interest in not being involuntarily committed to a mental hospital that is implicit in the Due Process Clause, thus triggering constitutional procedural protections. Id. at 489-90, 100 S.Ct. 1254; see also Washington v. Harper, 494 U.S. 210, 110 S.Ct. 1028, 108 L.Ed.2d 178 (1990) (concluding that a protectible liberty interest was implicated where a prisoner was involuntarily administered psychotropic drugs).
37
The "Due Process Clause does not protect every change in the conditions of confinement having a substantial adverse impact on the prisoner," though. Sandin, 515 U.S. at 478, 115 S.Ct. 2293. In fact, a prison inmate does not have a liberty interest in transfer from one prison to another "for whatever reason or for no reason at all," within the State or to another State, regardless of differing conditions in the prisons. Meachum v. Fano, 427 U.S. 215, 228, 96 S.Ct. 2532, 49 L.Ed.2d 451 (1976). Even a transfer to a maximum security facility with more burdensome conditions is "within the normal limits or range of custody which the conviction has authorized the State to impose." Id. at 225, 96 S.Ct. 2532. This is true even though such a transfer operates as a "real hardship" on the inmate who is "effectively separated by the transfer from his only contact with the world outside the prison." Montanye v. Haymes, 427 U.S. 236, 242, n. 4, 96 S.Ct. 2543, 49 L.Ed.2d 466 (1976) (internal quotations omitted). Analysis of "the nature of the interest involved . . . compels the conclusion" that such a transfer, even with its changed conditions of confinement, "does not deprive an inmate of any liberty interest protected by the Due Process Clause in and of itself." Olim v. Wakinekona, 461 U.S. 238, 248, 103 S.Ct. 1741, 75 L.Ed.2d 813 (1983).
38
This court has not addressed the issue of whether an incarcerated felon has a constitutionally protected liberty interest in prison visitation pursuant to the Due Process Clause.3 There is no question that inmates retain many of the protections of the First Amendment, such as rights to free expression, Thornburgh v. Abbott, 490 U.S. 401, 407, 109 S.Ct. 1874, 104 L.Ed.2d 459 (1989); to petition the government for the redress of grievances, Johnson v. Avery, 393 U.S. 483, 89 S.Ct. 747, 21 L.Ed.2d 718 (1969), and to free exercise of religion, O'Lone v. Estate of Shabazz, 482 U.S. 342, 348, 107 S.Ct. 2400, 96 L.Ed.2d 282 (1987). But even "[i]n the First Amendment context. . . some rights are inconsistent with the status of a prisoner," Shaw v. Murphy, 532 U.S. 223, 229, 121 S.Ct. 1475, 149 L.Ed.2d 420 (2001), and a prisoner retains only those rights "that are not inconsistent with his status as a prisoner or with the legitimate penological objectives of the corrections system." Pell v. Procunier, 417 U.S. 817, 822, 94 S.Ct. 2800, 41 L.Ed.2d 495 (1974).
39
We know of no circuit court that has found an implicit due process right to prison visitation. In fact, the Sandin decision perpetuated the Court's general resistance to directly reading the Due Process Clause without support from a positive source of law, absent evidence of a "grievous loss." Although the substance abuse regulation at issue here is "severe," see Overton, 539 U.S. 126, 134, 123 S.Ct. 2162, we decline to hold that, on its face, it rises to the level of egregious conduct necessary to implicate the implicit guarantees of the Due Process Clause.
III. CONCLUSION
40
For the foregoing reasons, we hold that the district court abused its discretion in refusing to dissolve its May 16, 2002 order of compliance in light of the decision of the Supreme Court in Overton. We REVERSE the district court's December 23, 2003 opinion and order denying MDOC's motion for summary judgment and granting the plaintiffs' motion to enforce compliance and REMAND for further proceedings consistent with this opinion. Our reversal is without prejudice to any claim by an individual prisoner that the regulation, as applied to that prisoner, imposes an "atypical and significant hardship," thus implicating a protected liberty interest.
Notes:
*
The Honorable Louis F. Oberdorfer, United States District Judge for the District of Columbia, sitting by designation
1
The Plaintiffs also challenged regulations that: (1) excluded, from family members with whom inmates were entitled to non-contact visits, any minor nieces and nephews and children as to whom parental rights had been terminated; (2) required all children visiting an inmate to be accompanied by a family member or legal guardian; and (3) prohibited former inmates from visiting inmates. These regulations are not the subject of the instant appeal
2
The court also held that the case was ripe for review because there is no factual development needed to discover how the regulation will be implemented, no indication that the MDOC will change its position regarding the enforcement of the regulation, and the hardship to the prisoners to wait until their visitation rights are revoked is great. JA 190-91
3
InThompson, the Supreme Court held that whatever rights may be retained by prisoners they do not have an implicit due process right to "unfettered visitation." 490 U.S. at 460, 109 S.Ct. 1904; see also Spear v. Sowders, 71 F.3d 626, 629-30 (6th Cir.1995) ("It is clear that a prisoner does not have a due process right to unfettered visitation. . . . A fortiori, a citizen simply does not have a right to unfettered visitation of a prisoner that rises to a constitutional dimension.") (citations omitted).
|
686 N.E.2d 176 (1997)
Herschel GULLEY, Appellant-Plaintiff,
v.
Frederick C. WINTER, Appellee-Defendant.
No. 55A01-9703-CV-76.
Court of Appeals of Indiana.
October 24, 1997.
*177 James R. Fisher, Judy S. Okenfuss, Ice Miller Donadio & Ryan, Indianapolis, for Appellant-Plaintiff.
Dennis N. Owens, Smith, Maley & Douglas, Indianapolis, for Appellee-Defendant.
OPINION
BAKER, Judge.
Appellant-plaintiff Herschel Gulley appeals the trial court's grant of summary judgment in favor of appellee-defendant Frederick C. Winter. Gulley presents several issues for our review, which we consolidate and restate as follows: (1) whether the trial court properly concluded that the Journey's Account Statute[1] did not require it to give effect to a federal court order allowing an amendment to a complaint when the federal action was subsequently dismissed for lack of subject matter jurisdiction; and (2) whether the trial court properly determined that the amendment to his complaint did not relate back, pursuant to Ind.Trial Rule 15(C), to the date the original complaint was filed.
FACTS
On December 29, 1991, Frederick Winter was driving his father's car south on State Road 431 when the car collided with another vehicle driven by Gregory Kiensley. Kiensley's vehicle then struck Gulley's car, causing Gulley serious injuries.
Although the police report listed Frederick as the driver of the vehicle, Gulley filed a complaint on December 23, 1993, against William P. Winter, Frederick's father, in the United States District Court for the Northern District of Illinois, alleging that "William" caused the collision by negligently operating his vehicle.[2] The summons and complaint were served on William on January 5, 1994. Within twenty-four hours of receiving the summons, William contacted Frederick and informed him about Gulley's complaint.
On January 28, 1994, the case was transferred to the United States District Court for the Southern District of Indiana. Shortly thereafter, William filed his answer to Gulley's complaint, arguing that he was not the driver of the vehicle and raising the court's lack of diversity jurisdiction as an affirmative defense. In response, on June 1, 1994, Gulley filed a motion to amend the complaint by interlineation, requesting permission to substitute Frederick as the driver identified in the complaint and asking that the amendment relate back to the date of the filing of the complaint. On June 2, 1994, the court granted Gulley's motion. The next day, however, the court dismissed the action due to a lack of diversity jurisdiction.
On August 9, 1994, Gulley refiled his complaint against Frederick in the Morgan County Superior Court. In his answer to the complaint, Frederick argued that Gulley's action was barred by the statute of limitations because it was not filed within two years from the date of the accident. Thereafter, both Gulley and Frederick moved for summary judgment on the statute of limitations *178 issue. Specifically, Gulley argued that Indiana's Journey's Account Statute extended the statute of limitations on his claim because the complaint was dismissed from federal court on jurisdictional grounds and did not constitute an adjudication on the merits of the claim.
Following a hearing on October 8, 1996, the trial court denied Gulley's motion and granted Frederick's motion for summary judgment. In particular, the court found that the federal court's order granting the motion to amend the complaint was invalid due to the court's lack of jurisdiction and, therefore, the Journey's Account Statute did not apply to extend the statute of limitations. Additionally, the court concluded that, pursuant to Ind.Trial Rule 15(C), Frederick had not received sufficient notice of the institution of the action prior to the running of the limitations period. Therefore, any amendment to the complaint would not relate back to the date of the original complaint. Gulley now appeals.
DISCUSSION AND DECISION
I. Standard of Review
In reviewing the propriety of the grant of summary judgment, we apply the same standard as the trial court and resolve any doubt as to any fact or inference to be drawn therefrom in favor of the party opposing summary judgment. Henshilwood v. Hendricks County, 653 N.E.2d 1062, 1065 (Ind. Ct.App.1995), trans. denied. Summary judgment is appropriate only if the designated evidentiary material shows that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Ind.Trial Rule 56(C). The party appealing the grant of summary judgment has the burden of persuading the court on appeal that the trial court's grant was erroneous. Jordan v. Deery, 609 N.E.2d 1104, 1107 (Ind.1993).
II. Journey's Account Statute
Gulley contends that the trial court erred by not giving effect to the federal court order allowing the amendment of his complaint. Specifically, he argues that the trial court was required to give effect to the federal court order, pursuant to Indiana's Journey's Account Statute, for the purpose of preserving his claim in state court.
The Journey's Account Statute provides, in pertinent part, as follows:
(a) This section applies if a plaintiff commences an action and the plaintiff fails in the action from any cause except:
(1) negligence in the prosecution of the action;
(2) the action abates or is defeated by the death of a party; or
(3) a judgment is arrested or reversed on appeal.
(b) If subsection (a) applies, a new action may be brought not later than the later of:
(1) three (3) years after the date of such determination under subsection (a); or
(2) the last date an action could have been commenced under the statute of limitations governing the original action;
and be considered a continuation of the original action commenced by the plaintiff.
IND.CODE § 34-1-2-8. As our supreme court recently explained, "[the statute's] typical use is to save an action filed in the wrong court by allowing the plaintiff enough time to refile the same claim in the correct forum." Cox v. American Aggregates Corp., 684 N.E.2d 193, 195 (Ind.1997). Pursuant to this statute, a plaintiff whose cause of action has been dismissed from another jurisdiction on technical grounds can refile the action within three years in an Indiana court. For example, an action dismissed for a lack of jurisdiction in one forum can be refiled in the proper forum despite the intervening running of the statute of limitations. Cox, 684 N.E.2d at 194-95. This "new" action will be considered a continuation of the original action for purposes of the statute of limitations.
According to Gulley, the Journey's Account Statute applies in the present case to require the trial court to give effect to the federal court's order allowing the amendment. In particular, he argues that the federal court properly determined that the *179 amendment naming Frederick as the defendant related back to the date of the original complaint under the Federal Rules of Civil Procedure. Because the complaint correctly named Frederick before the action was dismissed for lack of jurisdiction and was refiled in an Indiana court within three years from the date of dismissal, Gulley argues that, pursuant to the Journey's Account Statute, the federal court's order was valid and binding on the state court, making the action filed against Frederick in Indiana a mere continuation of the federal court action. Therefore, Gulley contends that his action is not barred by the statute of limitations.
In support of his argument, Gulley relies on this court's decision in Ware v. Waterman, 146 Ind.App. 237, 253 N.E.2d 708 (1969). In Ware, the plaintiff filed a complaint against the defendant for injuries suffered in an automobile accident. Id, 253 N.E.2d at 710. After the two year statute of limitations expired, however, the plaintiff discovered that the defendant had died and, therefore, moved to substitute the special administrator of the estate as the defendant. Id. The trial court granted the motion, noting that a special statute extended the statute of limitations on the action for eighteen months because of the death of the defendant and that the motion to substitute was made within this time period. Id. However, the trial court later discovered that the proper procedure to initiate an action against the special administrator was to file a new action, rather than substitute parties. Id. As a result, the trial court dismissed the action. Id. By the time the plaintiff filed a new complaint against the special administrator, however, the eighteen month statute of limitations had expired and the trial court granted summary judgment in favor of the special administrator on these grounds. Id. at 711. On appeal, we reversed, stating that the plaintiff's "amended" complaint was essentially the filing of an original action against the special administrator. Id. at 712-13. Because the amendment occurred prior to the expiration of the statute of limitations, we held that the plaintiff's cause of action fell within the purview of the Journey's Account Statute and, thus, was not barred by the statute of limitations. Id. Similarly, Gulley argues that the trial court should have given effect to the federal court's order allowing the amendment of his complaint, even if the court did not have jurisdiction over the case. We disagree.
Our conclusion in Ware was based on the fact that the plaintiff had taken steps to file the action against the proper party, within the statute of limitations, by attempting to amend the complaint. Here, unlike Ware, Gulley's attempt to amend the complaint did not occur until after the statute of limitations had expired. Further, although the Journey's Account Statute allows an individual to save an action that was filed in the wrong court, the statute was not designed to give effect to an order of another court in which the case was improperly filed. Here, it is undisputed that the federal district court was an improper forum because it did not have subject-matter jurisdiction over the present case. When a federal court lacks jurisdiction, its decisions, opinions and orders are void. Matter of Querner, 7 F.3d 1199, 1201 (5th Cir.1993); see also Federal Sav. and Loan Ins. Corp. v. PSL Realty Co., 630 F.2d 515, 521 (7th Cir.1980) ("It is equally well settled that where, as here, the court lacks jurisdiction to adjudicate the principal matter, its orders purporting to grant ancillary relief . . . are likewise beyond its jurisdiction and void ab initio."), cert. denied, 452 U.S. 961, 101 S.Ct. 3109, 69 L.Ed.2d 971 (1981). As a result, the court was without power to apply the federal rules and grant the relation back of the amended complaint. To uphold the federal court's order under the Journey's Account Statute, as Gulley urges us to do, would be to bind the parties to an order of a court which has no power over them.
Moreover, the federal court's determination regarding the relation back of Gulley's amended complaint was based on the Federal Rules of Civil Procedure. As noted, however, the federal court did not have jurisdiction over the case and, therefore, federal procedural rules do not apply. Instead, our rules of trial procedure govern whether Gulley's amended complaint relates back to the date the original complaint was filed. Under these circumstances, the trial court did not err by failing to give effect to the federal court's order.
*180 III. Relation Back of Amendment
Having concluded that the trial court properly determined that the federal court order was unenforceable and that the Federal Rules of Civil Procedure do not apply, we must still determine whether the amended complaint relates back under Indiana law. Ind.Trial Rule 15(C) governs the relation back of amendments and provides, in pertinent part, as follows:
Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment:
(1) Has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits; and
(2) Knew or should have known that but for a mistake concerning the identity of the proper party, the action would have been brought against him.
Under the express terms of the rule, therefore, the defendant must have notice of the institution of the action and the knowledge that a mistake must have occurred "within the period provided by law for commencing the action." Fifer v. Soretore-Dodds, 680 N.E.2d 889, 891 (Ind.Ct.App.1997). In this case, it is undisputed that Frederick did not receive Gulley's complaint until January 5, 1994, approximately seven days after the applicable statute of limitations had expired.
However, Gulley argues that, pursuant to our supreme court's decision in Waldron v. Wilson, 532 N.E.2d 1154 (Ind.1989), notice prior to the statute of limitations is not required under T.R. 15(C). In Waldron, the plaintiff brought a personal injury action against two individuals, alleging that he had been injured because the defendants negligently maintained a corn drying auger on their farm. Id. at 1155. After the statute of limitations had expired on his claim, however, the plaintiff discovered that the defendants' corporation owned the farm. Id. As a result, he amended his complaint to add the corporation as a defendant and requested that the amendment relate back to the date of the filing of the original complaint. Id. The trial court denied his motion. Id. On appeal, our supreme court held that the amendment related back to the date of the filing of the original complaint, even though the corporation did not receive notice of the complaint until after the statute of limitations expired. Id. at 1156. As Gulley notes, in reaching this decision, the court expressly stated that T.R. 15(C) "does not require process or that a summons be served before the statute of limitations has expired." Id.
However, Gulley fails to recognize that the Waldron court specifically noted that, although the corporation had not received a complaint or summons prior to the expiration of the statute of limitations, it had received notice of the impending action from its insurance carrier before the limitations period had run. Id. at 1156. As a result, the corporation had constructive notice of the institution of the action in a timely manner. Id. at 1157 (Dickson, J., concurring). Here, Gulley has not presented, and the record does not reveal, any evidence indicating that Frederick had notice of the lawsuit prior to the running of the statute of limitations. Although Frederick's father had learned about a possible claim from his insurance company prior to the expiration of the limitations period, he testified that he had not discussed any of these notices with Frederick. R. at 109-10. Further, Frederick testified that he was not aware that an action was commenced until he received the complaint. R. at 130. Under these circumstances, we must conclude that Frederick did not have actual notice, pursuant to T.R. 15(C), of the institution of Gulley's action.
Gulley also argues, however, that even if Frederick did not have actual notice, he should have known about the lawsuit because his father knew about the impending action before the statute of limitations ran. Citing Logan v. Schafer, 567 N.E.2d 855 (Ind.Ct. App.1991), he contends that this court has established a per se rule that an amended complaint relates back under T.R. 15(C) if the original complaint was served on a close *181 relative of the party who was improperly omitted from the complaint. We disagree.
In Logan, the plaintiff inadvertently omitted a second defendant from her original complaint. Id. at 856. When she discovered the omission, she moved to amend her complaint to include the second defendant. Id. The trial court denied her motion. Id. On appeal, we affirmed the trial court, noting that the second defendant had not received notice of the commencement of the action prior to the expiration of the statute of limitations. Id. In reaching this decision, however, we also stated that this was not a case "where there was some type of identity between the party named and the party omitted." Id.
Notwithstanding Gulley's contention to the contrary, this statement in no way establishes a per se rule that an amended complaint relates back under T.R. 15(C) if the original complaint was served on a close relative of the party omitted. In fact, the primary case cited as authority for this statement in Logan specifically indicates that an amendment does not relate back merely because the parties are closely related; rather, relation back is proper only when the second defendant is informed of the lawsuit before the statute of limitations runs. See Smith v. McFerron, 540 N.E.2d 1273, 1276 (Ind.Ct. App.1989) ("We note that we allow relation back here not because Neal and James are relatives. Rather, we hold this amended complaint relates back to the original because the facts fulfill all of the requirements of T.R. 15(C)"). As previously stated, nothing in the record indicates that Frederick knew or should have known of the lawsuit prior to the expiration of the statute of limitations. Thus, the requirements for relation back under T.R. 15(C) were not satisfied. The trial court properly concluded that the amendment did not relate back to the date of the filing of the original complaint.
Judgment affirmed.
ROBERTSON and FRIEDLANDER, JJ., concur.
NOTES
[1] IND.CODE § 34-1-2-8.
[2] Gulley's complaint also named Keinsley as a defendant. However, Keinsley is not a party to this appeal.
|
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
OCT 15, 2008
No. 08-11252 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 06-00428-CV-4-RH-WCS
BEVERLY BETANCUR,
Plaintiff-Appellant,
versus
STATE OF FLORIDA DEPARTMENT OF HEALTH,
TIMOTHY M. CERIO,
General Counsel,
DR. M. RONY FRANCOIS,
In his official capacity as Secretary of the
Department of Health,
WILLIAM N. MEGGS,
In his official capacity as State Attorney for the
State of Florida,
DOCTOR ANA M. VIAMONTE ROS,
In her official capacity as Secretary of the
Department of Health,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Florida
_________________________
(Octboer 15, 2008)
Before ANDERSON, HULL and PRYOR, Circuit Judges.
PER CURIAM:
Beverly Betancur appeals the dismissal of her complaint for failure to state a
claim regarding the denial of her application for a license to practice naturopathy.
We affirm.
I. BACKGROUND
Betancur applied to the Florida Department of Health in 2004 for a license to
practice naturopathy. After the Department of Health denied Betancur’s
application, Betancur founded the Naturopathic National Council in Connecticut.
The Council purported to be “a national licensing agency.”
Two years after incorporation, the Council registered its name as a
trademark. The Council issued a document stating that Betancur was “nationally
licensed” as a “Doctor of Naturopathy, N.D.” Betancur, as the Chief Executive
Officer of the Council, demanded that the Health and Human Services
Appropriations Committee of the Florida Senate “cease and desist” its use of the
2
title “Doctor of Naturopathy.” Betancur asserted “exclusive rights” to the titles
“Doctor of Naturopathic Medicine” and “Doctor of Naturopathy, N.D.” Betancur
also declared that the Council held the trademark to “Naturopathic National
Council, Inc.”
State health officials Rony Francois, Timothy Cerio, and Dr. Ana Viamonte
Ros told Betancur that Florida ceased the licensing of naturopaths in 1959, see Fla.
Stat. § 462.023, with the exception of seven individuals allowed to practice under a
grandfather statute, see id. § 462.2001, and the practice of naturopathy without a
state license is a third degree felony, see id. § 462.17(5). Betancur responded that
the Council had exclusive authority to license naturopaths; Florida could not
prevent a naturopath from practicing; and the naturopaths who practiced under the
grandfather statute held fraudulent licenses. The Council later purportedly licensed
several naturopaths, including Jose Canas, a Florida citizen.
Betancur filed a complaint against the Department of Health, Cerio, Dr.
Viamonte Ros, and State Attorney William Meggs. In her third amended
complaint, Betancur sought a declaratory judgment to determine “whether or not
under the Supremacy Clause . . . a federal trademark pre-empts an inconsistent
state statute or regulation.” Betancur alleged that Florida violated the Thirteenth
Amendment “by forcing [her] and traditional naturopaths . . . into involuntary
3
servitude by forcing them out of their profession.” Betancur also alleged that the
Florida officials “caused trade identity confusion” by using the “trademarked title
Doctor of Naturopathy, N.D. or its derivatives,” see 15 U.S.C. § 1125(a), and
violated her rights under the Tenth and Fourteenth Amendments by denying her a
license to practice naturopathy, see 42 U.S.C. § 1983.
The officials moved to dismiss the complaint, and the district court granted
the motion.
II. STANDARD OF REVIEW
We review de novo the dismissal of a complaint for failure to state a claim.
Phoenix of Broward, Inc. v. McDonald’s Corp., 489 F.3d 1156, 1161 (11th Cir.
2007). We accept the allegations in the complaint as true and construe them in the
light most favorable to the plaintiff. Id.
III. DISCUSSION
Betancur argues that, when the Council trademarked its name to “issue[]
occupational licenses to traditional naturopaths,” the Council acquired exclusive
rights to license naturopaths and to confer the title “Doctor of Naturopathy, N.D.”
She argues that her trademark preempts the authority of Florida to regulate the
practice of naturopathy and the continued licensing of several naturopaths violates
her trademark. Betancur also argues that Florida officials violated her civil rights.
4
These arguments fail.
States retain the police power to regulate professions, such as the practice of
medicine. Watson v. State of Maryland, 218 U.S. 173, 176, 30 S. Ct. 644, 646
(1910) (recognizing the authority of the states to regulate the practice of medicine).
Betancur offers no rational argument that her ownership of the mark “Naturopathic
National Council, Inc.” preempts the authority of Florida to regulate and license
the practice of naturopathy. Betancur’s complaint of trademark infringement,
which is based on her argument that the Council has the exclusive right to regulate
the practice of naturopathy, also is meritless.
Betancur’s complaint that Florida violated her civil rights also fails. The
licenses given to several individuals to practice naturopathy under a grandfather
clause, Fla. Stat. § 462.2001, is not an arbitrary or unreasonable regulation that
violated Betancur’s right to equal protection. See Watson, 218 U.S. at 173, 30 S.
Ct. at 646 (exemption for physicians who had six years of practice from
registration did not violate equal protection rights of less experienced physicians).
Betancur has no right under Florida law to be granted a license and has no liberty
or property interest protected by due process. See Grayden v. Rhodes, 345 F.3d
1225, 1232 (11th Cir. 2003). Betancur’s final argument that the refusal to license
naturopaths deprives her of the opportunity to pursue her livelihood does not, as
5
she contends, implicate the Thirteenth Amendment, which prohibits forced
servitude. United States v. Kozminski, 487 U.S. 931, 942, 108 S. Ct. 2751,
2760–61 (1988).
IV. CONCLUSION
The dismissal of Betancur’s complaint is AFFIRMED.
6
|
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-40933
Conference Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JAIME SALGADO-BUSTAMANTE,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Southern District of Texas
USDC No. M-00-CR-499-1
--------------------
August 20, 2002
Before HIGGINBOTHAM, DAVIS, and PARKER, Circuit Judges.
PER CURIAM:*
Jaime Salgado-Bustamante (“Salgado”) appeals the sentencing
following his guilty plea for possession with the intent to
distribute marijuana. Salgado argues that the district court
erred in denying application of the safety-valve provided in
U.S.S.G. § 5C1.2 because he timely provided to the Government
truthful information and evidence concerning the offense.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 01-40933
-2-
Under § 5C1.2, the district court may sentence a defendant
without regard to the statutory minimum sentence if it is
determined, inter alia, that the defendant truthfully provided
the Government with “all information and evidence the defendant
has concerning the offense[.]” § 5C1.2(5). The district court’s
decision whether to apply § 5C1.2 is reviewed for clear error.
United States v. Flanagan, 80 F.3d 143, 145 (5th Cir. 1996).
This court reviews the district court’s legal interpretation of
§ 5C1.2 de novo. See id.
The district court’s independent determination that
Salgado’s statement was not truthful is supported by the record
and, therefore, the district court did not err in finding that
Salgado was ineligible for the safety valve sentence adjustment.
See id.
Salgado’s sentence is AFFIRMED.
|
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Electronically Filed
Supreme Court
SCWC-XX-XXXXXXX
11-APR-2019
12:17 PM
SCWC-XX-XXXXXXX
IN THE SUPREME COURT OF THE STATE OF HAWAIʻI
________________________________________________________________
STATE OF HAWAIʻI,
Respondent/Plaintiff-Appellee,
vs.
RONALD S. FUJIYOSHI,
Petitioner/Defendant-Appellant.
________________________________________________________________
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-XX-XXXXXXX; 3DCW-XX-XXXXXXX)
SUMMARY DISPOSITION ORDER
(By: Recktenwald, C.J., Nakayama, McKenna, Pollack, and Wilson, JJ.)
I. Introduction
Petitioner/Defendant-Appellant Ronald S. Fujiyoshi
(“Fujiyoshi”) seeks review of the Intermediate Court of Appeals’
(“ICA”) September 28, 2018 Judgment on Appeal, entered pursuant
to its August 31, 2018 Memorandum Opinion, which affirmed the
District Court of the Third Circuit’s (“district court”)
Judgment and Notice of Entry of Judgment entered on November 5,
2015.1
1
The Honorable Barbara K. Takase presided.
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Fujiyoshi proceeded pro se before the district court.
The record on appeal does not indicate a valid waiver of
counsel. We therefore vacate the district court’s judgment and
remand for further proceedings consistent with this summary
disposition order.
II. Background
A. District Court Proceedings
On April 2, 2015, Fujiyoshi participated in a
demonstration on Mauna Kea Access Road with approximately fifty
to eighty other individuals who opposed construction of the
Thirty Meter Telescope. Respondent/Plaintiff-Appellee State of
Hawaiʻi (“State”) charged Fujiyoshi with obstructing a highway or
public passage in violation of Hawaiʻi Revised Statutes (“HRS”) §
711-1105(1)(a) and (5) (2014). 2
At Fujiyoshi’s May 7, 2015 plea hearing, the district
court conducted a gallery advisory. The court informed the
present defendants, including Fujiyoshi, of their constitutional
2
HRS § 711-1105 provides in relevant part:
(1) A person commits the offense of obstructing if,
whether alone or with others and having no legal privilege
to do so, the person knowingly or recklessly:
(a) Obstructs any highway or public passage; or
(b) Provides less than thirty-six inches of space
for passage on any paved public sidewalk.
. . . .
(5) Obstructing is a petty misdemeanor if the
person persists in the conduct specified in subsection (1)
after a warning by a law enforcement officer; otherwise it
is a violation.
2
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right to counsel and the general disadvantages of self-
representation:
THE COURT: Good morning, everyone.
Before we begin I just want to give you some
advisements and inform you of your rights. I believe
everyone who is left on the calendar will have the right to
have an attorney. If you cannot afford one I will appoint
one free of charge.
For those of you who want to waive your right to an
attorney that is also possible. If you do, I’m going to
give you a form to fill out waiving your right to an
attorney. Let me explain to you that if you choose to
represent yourself you understand the Court cannot help
yourself -- cannot help you in any way.
That if you cannot afford an attorney I will appoint
one free of charge so that you have a constitutional right
to have an attorney. You have the right also to hire your
own attorney to represent you.
In a trial, if you asked for a trial, the State is
required to prove every element of the offense beyond a
reasonable doubt. Proof beyond a reasonable doubt means
that you are presumed to be innocent of the charge unless
and until the State proves beyond a reasonable doubt that
you are guilty.
Reasonable doubt is a doubt in a person’s mind about
a defendant’s guilt which arises from the evidence
presented or from the lack of evidence and which is based
upon reason and common sense. This means that you cannot
be found guilty upon mere suspicion or upon evidence which
only shows that you are probably guilty.
If you represent yourself you will be expected to
understand and follow the Hawaii Rules of Evidence, the
Hawaii Rules of Penal Procedure, and the law, and that you
are going to be required to understand and follow those
rules. Trial proceedings are often complicated and legally
technical. Participating in a trial is often difficult
even for the most experienced lawyer.
Because you have no formal training in the law, if
you choose to represent yourself the task of representing
yourself will be extremely difficult. If you do not
effectively represent yourself you cannot later complain
that you didn’t have effective assistance of counsel. So
3
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if you choose to waive your right to an attorney I will ask
you if you understood those rights and I will ask you to
also fill out a waiver of right to an attorney.
Fujiyoshi signed a form waiving his right to counsel. The court
engaged in the following colloquy with Fujiyoshi later in the
morning:
THE COURT: Alright. Mr. Fujiyoshi, is your mind clear
this morning?
THE DEFENDANT: Yes.
THE COURT: Do you understand everything that’s going on in
court?
THE DEFENDANT: Yes, I am.
THE COURT: How many years of schooling have you had?
THE DEFENDANT: Um, 22.
THE COURT: Okay. And you understand all of those rights
that I previously explained to you?
THE DEFENDANT: Yes, I did.
THE COURT: Is it your choice to waive or give up your
right to an attorney?
THE DEFENDANT: It is my choice.
THE COURT: You understand this is a very serious decision?
THE DEFENDANT: Yes, I do.
THE COURT: Alright. Is anyone forcing you to give up this
right?
THE DEFENDANT: No.
THE COURT: Are you doing it knowingly, voluntarily, and
intelligently?
THE DEFENDANT: Yes.
THE COURT: Alright. Court’s going to find a knowing,
voluntary, intelligent waiver of right to counsel. And he
is going to acknowledge this a second time. Okay.
Fujiyoshi pled not guilty and the case was set for trial.
4
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At the conclusion of the bench trial held several
months later, the district court found Fujiyoshi guilty as
charged and sentenced him to five days in jail and six months of
probation with a special condition that prohibited Fujiyoshi
from visiting Mauna Kea Access Road for the duration of the
probation.3 The court entered judgment pursuant to its findings
on November 5, 2015.
B. Appeal to ICA
On appeal to the ICA, Fujiyoshi alleged: (1) the
evidence presented at trial is insufficient to sustain the
conviction; (2) the dismissal of cases of similarly-situated
defendants violates Fujiyoshi’s right to due process under the
Fourteenth Amendment to the United States Constitution; and (3)
the complaint is defective because it fails to allege an element
of the offense.
In its Memorandum Opinion, the ICA affirmed the
district court’s judgment, holding that the complaint was
sufficient, the conviction was supported by sufficient evidence,
and the arrest did not violate Fujiyoshi’s constitutional due
process rights. State v. Fujiyoshi, CAAP-XX-XXXXXXX (App. Aug.
31, 2018) (mem.).
3
The court credited Fujiyoshi with one day served and stayed the
remaining four days pending the successful completion of six months’
probation.
5
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III. Standard of Review
Hawaiʻi Rules of Penal Procedure Rule 52(b) states that
“[p]lain errors or defects affecting substantial rights may be
noticed although they were not brought to the attention of the
court.” Therefore, an appellate court “may recognize plain
error when the error committed affects substantial rights of the
defendant.” State v. Staley, 91 Hawaiʻi 275, 282, 982 P.2d 904,
911 (1999) (internal quotation marks omitted) (quoting State v.
Cullen, 86 Hawaiʻi 1, 8, 946 P.2d 955, 962 (1997)).
The appellate court “will apply the plain error
standard of review to correct errors which seriously affect the
fairness, integrity, or public reputation of judicial
proceedings, to serve the ends of justice, and to prevent the
denial of fundamental rights.” State v. Nichols, 111 Hawaiʻi
327, 334, 141 P.3d 974, 981 (2006) (quoting State v. Sawyer, 88
Hawaiʻi 325, 330, 966 P.2d 637, 642 (1998)).
IV. Discussion
On certiorari, Fujiyoshi argues that the ICA’s
affirmance of the district court’s judgment was erroneous
because: (1) the complaint was defective; (2) insufficient
evidence was introduced at trial to support the conviction; and
(3) his request for the ICA to take judicial notice of the cases
of similarly-situated defendants was valid.
6
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We review as plain error whether Fujiyoshi’s
constitutional right to counsel was validly waived. 4
A. Requirements for a Valid Waiver of Right to Counsel
The Sixth Amendment to the United States Constitution,
made applicable to the states through the Fourteenth Amendment,
and article I, section 14 of the Hawaiʻi Constitution guarantee
every person accused of a crime “the right to be represented by
counsel at every critical state of the prosecution.” State v.
Phua, 135 Hawaiʻi 504, 512, 353 P.3d 1046, 1054 (2015) (internal
quotation marks omitted) (quoting Reponte v. State, 57 Haw. 354,
361, 556 P.2d 577, 582 (1976)); see also State v. Dickson, 4
Haw. App. 614, 618, 673 P.2d 1036, 1041 (1983). A “critical
stage” is “any stage where potential substantial prejudice to
[a] defendant’s rights inheres,” such as trial. Phua, 135
Hawaiʻi at 512, 353 P.3d at 1054 (internal quotation marks and
citation omitted). If a defendant proceeds pro se during a
critical stage of the prosecution, (1) the defendant must make a
knowing and intelligent waiver of his or her right to counsel
and (2) the record must adequately reflect the defendant’s
waiver. Id.
In Phua, this court described the analytical framework
applied to ensure that a waiver is knowing and intelligent. Id.
4
We do not address Fujiyoshi’s arguments, except to note that
there was sufficient evidence adduced to support the conviction.
7
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at 512-13, 353 P.3d at 1054-55. We explained that the trial
court should focus its inquiry on three main factors: “(1) the
particular facts and circumstances relating to the defendant
that indicate the defendant’s level of comprehension; (2) the
defendant’s awareness of the risks of self-representation; and
(3) the defendant’s awareness of the disadvantages of self-
representation.” Id. at 512, 353 P.3d at 1054 (citing Dickson,
4 Haw. App. at 619-20, 673 P.2d at 1041-42). “The extent and
depth of the court’s inquiry and explanation of the second and
third factors should respond to the court’s perception of the
defendant’s level of understanding.” Id. at 514, 353 P.3d at
1056. “While courts are not required to strictly adhere to
[this] analytical framework, it provides an important tool to
ensure waivers are made knowingly and intelligently in addition
to establishing a complete record for appellate review.” Id. at
513, 353 P.3d at 1055.
B. There was No Valid Waiver of Counsel
In this case, we review Fujiyoshi’s written waiver of
counsel and the district court’s transcripts to ascertain
whether there was a valid waiver of counsel.
1. Background and Comprehension of the Defendant
The first prong of the framework in Phua suggests that
the court “explore facts and circumstances pertaining to the
defendant that will allow the court to determine the defendant’s
8
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level of comprehension. Such circumstances include age,
education, English language skills, mental capacity, employment
background, and prior experience with the criminal justice
system.” Id.
Here, the district court’s inquiry into Fujiyoshi’s
background was limited to one question—how many years he
attended school. The court did not inquire into Fujiyoshi’s
age, employment background, or experience with the criminal
justice system. These factors would have assisted in
determining Fujiyoshi’s level of comprehension and, accordingly,
his ability to waive his right to counsel intelligently and
knowingly. The district court erroneously discussed the risks
and disadvantages of self-representation before it perceived
Fujiyoshi’s level of understanding. Therefore, the district
court did not meet the first prong of the Phua analysis.
2. Defendant’s Awareness of the Risks of Self-
Representation
The second prong of Phua recommends that the court
“warn[] the defendant of the risks particular to the defendant
in proceeding without counsel[.]” Id. at 514, 353 P.3d at 1056.
An adequate warning informs the defendant “of the nature of the
charge, the elements of the offense, the pleas and defenses
available, the punishments which may be imposed, and all other
facts essential to a broad understanding of the whole matter.”
9
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Id. at 515, 353 P.3d at 1057 (internal quotation marks omitted)
(quoting Dickson, 4 Haw. App. at 620, 673 P.2d at 1041).
Furthermore, “[t]he judge’s warnings must reflect more than
vague, general admonishments, without reference to specific
risks or disadvantages.” Id. at 514, 353 P.3d at 1056 (internal
quotation marks and citation omitted).
Here, the court provided a cursory overview of self-
representation, noting that it would be “extremely difficult,”
that trials are “complicated and legally technical,” that
Fujiyoshi would be expected to understand and follow the
applicable rules, and that he would be precluded from arguing
ineffective assistance of counsel on appeal. The court did not
inform Fujiyoshi about possible pleas or defenses, or potential
punishments. It provided vague warnings that failed to identify
the risks specific to Fujiyoshi’s decision to proceed without
counsel, including the maximum penalty for the offense.
Although Fujiyoshi marked on his waiver form that he had been
advised of the nature and elements of the charge against him,
the possible results of a guilty verdict, including the maximum
penalty for the offense, and applicable defenses, it is clear
from the record that he received no such advisement.
In Phua, the trial court failed to inform the
defendant of the potential punishment that could be imposed.
Id. at 517, 353 P.3d at 1059. We held that this error, alone,
10
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was “sufficient grounds for vacating the sentence.” Id. Here,
the district court failed to warn Fujiyoshi of the range of
eligible punishment. Thus, the district court failed to satisfy
the second prong of Phua and this error, alone, is sufficient to
vacate the conviction.
3. Defendant’s Awareness of the Disadvantages of
Self-Representation
The third prong of the Phua analysis suggests that the
court “meaningfully inform” the defendant of the disadvantages
of self-representation before a waiver of the defendant’s right
to counsel is obtained. Id. at 515, 353 P.3d at 1057. This
information may be conveyed by asking:
Because of the seriousness of the offense and the serious
consequences of being found guilty, do you understand that
you have a Constitutional right to be represented by an
attorney at a sentencing hearing?
Do you understand that if you cannot afford an attorney,
you have the right to have free legal representation
through the public defender’s office or a court appointed
lawyer?
Id. (footnote omitted).
In this case, the district court conducted a gallery
advisory notifying all present defendants that they each had a
right to an attorney and an attorney would be appointed free of
charge if the defendant could not afford one, if a defendant
elects to proceed without an attorney, he or she is expected to
follow all applicable rules and the law, and a defendant that
waives his or her right to counsel is precluded from later
11
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claiming inadequate representation. As noted, pursuant to the
first two factors of the Phua analysis, it is apparent Fujiyoshi
did not make a knowing and intelligent waiver of his right to
counsel. Accordingly, it is unnecessary to consider under the
third factor whether the court “meaningfully inform[ed]”
Fujiyoshi of the disadvantages of self-representation. Id.
V. Conclusion
Based on the totality of the circumstances, Fujiyoshi
did not provide an intelligent and knowing waiver of his right
to counsel. We therefore vacate the ICA’s September 28, 2018
Judgment on Appeal and the district court’s November 5, 2015
Judgment and remand to the district court for further
proceedings consistent with this summary disposition order.
DATED: Honolulu, Hawaiʻi, April 11, 2019.
James M. Dombroski, /s/ Mark E. Recktenwald
Hayden Aluli
for Petitioner /s/ Paula A. Nakayama
/s/ Sabrina S. McKenna
Mitchell D. Roth,
E. Britt Bailey /s/ Richard W. Pollack
for Respondent
/s/ Michael D. Wilson
12
|
248 Minn. 44 (1956)
78 N.W. (2d) 340
L.C. McCULLER
v.
ARTHUR B. WORKSON, ALSO KNOWN AS ARTHUR B. WOKSON.
No. 36,865.
Supreme Court of Minnesota.
July 13, 1956.
*45 Haugland & Abdo, for appellant.
Iverson, Whaley & Coulter, for respondent.
MATSON, JUSTICE.
Appeal is from that part of the judgment which granted defendant's motion for summary judgment against plaintiff on the complaint.
Plaintiff commenced this action for damages arising out of the collision of his automobile with defendant's truck. In his complaint plaintiff alleged:
"I.
"That on August 31, 1951, the defendant negligently and in violation of law parked his motor vehicle on Washington Avenue South, near its intersection with 13th Avenue, Minneapolis, Minnesota, without leaving the rear lamp properly lighted.
"II.
"That as a result, plaintiff's automobile was caused to collide with defendant's automobile, * * *."
Defendant, in addition to his answer, counterclaimed against plaintiff for damages to his truck.
Subsequently, defendant requested of plaintiff certain admissions among which was a request to admit that on September 21, 1951, plaintiff made the following statement and signed it after reading it and acknowledging that it was true and correct:
"On the night of August 31, 1951, at 13th and Washington Avenue South, I had an accident with a truck parked at the curb. I had been driving my car toward the Loop on Washington Avenue. Two cars were approaching me going the opposite direction. The back car started to pass the first one. It got caught in the street car tracks and looked as though it was headed right for me. I swerved to my right and hit the truck. I have no claim whatsoever to make against the owner of the truck. There was no fault on his part for the accident." (Italics supplied.)
*46 In response to defendant's requests for admissions, plaintiff admitted that the statement was true except for the last two sentences which he stated were untrue and incorrect and had not been read to him by the investigator for defendant's insurer. In all other respects, plaintiff denied defendant's requests for admissions.
Subsequently, the defendant moved for summary judgment on all issues basing his motion on the record and on plaintiff's admissions on file. Upon this motion, on December 17, 1953, the trial court ordered summary judgment for the defendant upon plaintiff's complaint and further awarded defendant judgment upon his counterclaim on the issue of liability but left the issue of damages to be litigated. Thereafter plaintiff moved for the vacation of the order for summary judgment and for permission to amend his complaint. In passing upon plaintiff's motion, the trial court in effect affirmed its prior order for summary judgment for defendant on plaintiff's complaint but reversed itself by denying the defendant summary judgment in all respects on his counterclaim. Pursuant to this order, the summary judgment from which this appeal is taken was entered.
1. We need consider only whether this was a proper case for the entry of summary judgment.[1] In Sauter v. Sauter, 244 Minn. 482, 484, 70 N.W. (2d) 351, 353, we held:
"A motion for a summary judgment may be granted pursuant to Rule 56.03 only if, after taking the view of the evidence most favorable to the nonmoving party, the movant has clearly sustained his burden of showing that there is no genuine issue as to any material fact and that he is entitled to judgment as a matter of law. It is essential to bear in mind that the moving party has the burden of proof and that the nonmoving party has the benefit of that view of the evidence which is most favorable to him. The salutary purpose *47 and useful function of summary judgment proceedings as a means of securing the just, speedy, and inexpensive determination of the action (Rule 1) is well recognized, but resort to summary judgment was never intended to be used as a substitute for a court trial or for a trial by jury where any genuine issue of material fact exists. In other words a summary judgment is proper where there is no issue to be tried but is wholly erroneous where there is a genuine issue to try."
2. Upon a motion for summary judgment the court carefully scrutinizes the pleadings, depositions, admissions, and affidavits, if any, on file, not to decide any issue of fact which may be presented but solely to discover if any genuine issue exists. In this process all doubts and factual inferences must be resolved against the movant and in favor of the party opposing the motion.[2]
3-4. In the instant case it is significant to note that the trial court, in a memorandum attached to and made a part of its order pursuant to which the judgment from which this appeal is taken was entered, stated that it felt that the parking of defendant's truck was simply incidental to the accident and was not a proximate or direct cause thereof and that therefore defendant could not be liable for any alleged negligence. Whether a particular act of negligence is the proximate cause of the alleged harm is a fact issue for the determination of the jury when the facts are in dispute and are reasonably susceptible of more than one inference.[3] Since proximate cause is usually a question of fact for the jury, it can seldom be disposed of on a motion for summary judgment.[4] This principle is of long standing. In the much earlier case of Morey v. Shenango Furnace Co. 112 Minn. 528, 127 N.W. 1134, in which defendant *48 urged in support of his demurrer[5] that the complaint showed that his alleged negligence was not the proximate cause of plaintiff's injury, this court pointed out that proximate cause can best be determined when the actual facts which occurred have been developed upon trial.
Upon plaintiff's complaint and admissions we cannot say that he would not be able to show that the defendant by his conduct proximately caused plaintiff's injuries. In its memorandum the trial court stated that plaintiff's only charge of negligence against defendant, made in his argument in opposition to defendant's motion for summary judgment, was that defendant's car was parked a "short distance" from the curb and that it was parked without a taillight. We cannot determine from the record what was meant by a "short distance." Plaintiff claims that this distance was in excess of 12 inches which is contrary to M.S.A. 169.35 and Minneapolis City Charter and Ordinances (Perm. ed.) 9:1-1101.1 of the city of Minneapolis traffic ordinances, which require vehicles to be parked within 12 inches of the curb. Since all inferences must be drawn in favor of the plaintiff the party in opposition to the motion for summary judgment we must assume that defendant was parked in excess of 12 inches from the curb. If plaintiff can support this assumption with proof, it may be entirely proper for the jury to find that parking the truck an excessive distance from the curb was the proximate cause of the accident.[6]
In addition to the charge that the truck was parked too far from the curb, plaintiff in his complaint specifically charged defendant with parking without leaving the rear of the vehicle properly lighted. *49 This charge was apparently based on § 169.53, which requires lights to be displayed on parked vehicles in certain instances. Although it is doubtful that the condition at the locus of the accident was such as to require the display of lights as provided by § 169.53, it seems clear that neither this court nor the trial court may take judicial notice of those conditions and thereby declare without an admission or other showing that § 169.53 is inapplicable. Assuming, therefore, as we must, that defendant violated § 169.53, and was as a result guilty of negligence, a jury could reasonably find that such negligence proximately caused the accident in question.
In view of the foregoing principles, the judgment of the trial court is reversed.
Reversed.
NOTES
[1] Plaintiff contends that the trial court erred in denying his motion to amend the complaint. Under our view of the case, an amendment is unnecessary. As to the propriety of permitting the losing party to amend his pleadings after the granting of a summary judgment, see Carroll v. Pittsburgh Steel Co. (W.D. Pa.) 103 F. Supp. 788; 6 Moore, Federal Practice (2 ed.) par. 56.10, p. 2057.
[2] Sauter v. Sauter, supra; Walling v. Fairmont Creamery Co. (8 Cir.) 139 F. (2d) 318; Dulansky v. Iowa-Illinois Gas & Elec. Co. (8 Cir.) 191 F. (2d) 881; Weisser v. Mursam Shoe Corp. (2 Cir.) 127 F. (2d) 344, 145 A.L.R. 467; 6 Moore, Federal Practice (2 ed.) par. 56.15[3].
[3] Simon v. Carroll, 241 Minn. 211, 62 N.W. (2d) 822; Hall v. Minneapolis St. Ry. Co. 223 Minn. 243, 26 N.W. (2d) 178; Johnson v. Evanski, 221 Minn. 323, 22 N.W. (2d) 213; 13 Dunnell, Dig. (3 ed.) § 7011.
[4] Abresch v. Northwestern Bell Tel. Co. 246 Minn. 408, 75 N.W. (2d) 206.
[5] For a discussion of the "functional similarity" between a demurrer and a motion for summary judgment, see House v. Hanson, 245 Minn. 466, 72 N.W. (2d) 874.
[6] See, Damrow v. Zauner, 236 Minn. 447, 53 N.W. (2d) 139 (held: Violation of St. Paul city ordinance requiring parking within one foot of curb as proximate cause of collision was jury question); Bartley v. Fritz, 205 Minn. 192, 285 N.W. 484 (jury could infer that violation of Mason St. 1938 Supp. § 2720-220 [§ 169.35, subd. 1] caused injury to plaintiff who was a passenger in an auto which struck defendant's parked truck).
|
826 F.2d 129
264 U.S.App.D.C. 57
Williams (Adrian)v.Carlson (Norman A.)
NO. 86-5503
United States Court of Appeals,District of Columbia Circuit.
AUG 14, 1987
1
Appeal From: D.C.D.C.
2
AFFIRMED IN PART, VACATED AND REMANDED IN PART *.
|
STATE OF WEST VIRGINIA
FILED
SUPREME COURT OF APPEALS December 11, 2015
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
JEFFREY TENNANT, OF WEST VIRGINIA
Claimant Below, Petitioner
vs.) No. 15-0158 (BOR Appeal No. 2049648)
(Claim No. 2014022777)
FIRE SAFETY INVESTIGATIONS,
Employer Below, Respondent
MEMORANDUM DECISION
Petitioner Jeffrey Tennant, by James R. Fox, his attorney, appeals the decision of the
West Virginia Workers’ Compensation Board of Review. Fire Safety Investigations, by Maureen
Kowalski, its attorney, filed a timely response.
This appeal arises from the Board of Review’s Final Order dated January 26, 2015, in
which the Board affirmed a July 9, 2014, Order of the Workers’ Compensation Office of Judges.
In its Order, the Office of Judges modified the claims administrator’s February 14, 2014,
decision denying Mr. Tennant’s application for workers’ compensation benefits because he did
not cooperate with the investigation of the claim. The Office of Judges modified the claims
administrator’s decision to reflect that it denied Mr. Tennant’s application in accordance with
West Virginia Code § 23-4-2(a) (2005). The Court has carefully reviewed the records, written
arguments, and appendices contained in the briefs, and the case is mature for consideration.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision is appropriate under Rule 21 of the Rules of Appellate
Procedure.
Mr. Tennant worked as a Safety Consultant for Fire Safety Investigations. On October 1,
2013, Mr. Tennant was in a motor vehicle accident while on his way to take a drug test as
directed by his boss, Brent Harris. Mr. Harris had received reports of Mr. Tennant acting erratic
and strange earlier that day before the accident occurred and received a request to send a
1
replacement for Mr. Tennant. Edward Krenzolok, a board certified toxicologist, found that Mr.
Tennant tested positive for the presence of alpha-hydroxyalprazolam, known as Xanax, (a
metabolite of the benzodiazepine alprazolam) at a concentration of 7,100 mg/ml. Mr. Krenzolok
stated that benzodiazepine can cause cognitive disorders, confusion, slurred speech, memory
impairment, impaired reaction times, and sedation. Mr. Krenzolok found that the level of
benzodiazepines was inordinately high and is consistent with a large amount of alprazolam. Mr.
Krenzolok opined that the alprazolam impaired Mr. Tennant’s fine and gross motor skills as well
as his overall judgement and contributed to his inability to operate a motor vehicle safely. He
found this was a substantial contributing factor to the accident. Mr. Tennant had a valid
prescription for Xanax, and he submitted an application for workers’ compensation benefits for
his motor vehicle accident that occurred on October 1, 2013. The claims administrator denied
Mr. Tennant’s application.
The Office of Judges modified the claims administrator’s decision and found that the
claim is denied in accordance with West Virginia Code § 23-4-2(a). The Board of Review
affirmed the Order of the Office of Judges. On appeal, Mr. Tennant disagrees and asserts that the
motor vehicle accident happened during and in the course of his employment. Fire Safety
Investigations maintains that Mr. Tennant’s intoxication was the proximate cause of his injury.
The Office of Judges noted that the issues are whether Mr. Tennant was in the course of
his employment at the time of the accident and whether his intoxication due to the prescription
medication Xanax caused this accident. The Office of Judges found that Mr. Tennant was
directed by his boss to travel off the work site to West Virginia from Ohio in order to take a drug
test, and therefore, the Office of Judges concluded that at the time of the accident Mr. Tennant
was acting in the course of his employment.
The Office of Judges noted that it was more difficult to determine if the injury occurred
as a result of his employment or due to his intoxication from the prescription Xanax. West
Virginia Code § 23-4-2(a) states that notwithstanding anything contained in Chapter 24, a
claimant is not to receive workers’ compensation benefits if the injury was caused by the
intoxication of the claimant. The Office of Judges noted that there are witnesses who state that
Mr. Tennant was acting erratically. Mr. Harris, Mr. Tennant’s boss, was persuaded by Mr.
Tennant that he was alright to drive. Mr. Tennant was on a prescription of Xanax, and his doctor
had recently increased his dosage of Xanax due to some stressors. A toxicology report from the
hospital drug test showed that the amount of Xanax in Mr. Tennant’s bloodstream was 7,100
mg/ml. The report noted that the detectable amount of Xanax is 300 mg/ml, and therefore, Mr.
Tennant had more than twenty-three times the detectable level of Xanax in his blood stream at
the time he was tested after the accident occurred. Mr. Krenzolok, the toxicologist, noted that
this inordinately high level of Xanax would impair Mr. Tennant’s gross motor skills and his
overall judgement. Mr. Krenzolok opined that this extremely high dosage of the prescription
drug was a substantial contributing factor in the motor vehicle accident. Based on Mr. Tennant’s
erratic behavior, as witnessed by several individuals and the toxicology report, the Office of
Judges found that Mr. Tennant had exceeded the prescribed dosage of Xanax to a great extent
and that his intoxication based on the ingestion of the prescription drug was the main cause of
2
the motor vehicle accident. Therefore, the Office of Judges concluded that in accordance with
West Virginia Code § 23-4-2(a), Mr. Tennant cannot recover workers’ compensation benefits.
The Board of Review agreed with the findings and conclusions of the Office of Judges.
This Court agrees with the Board of Review. West Virginia Code § 23-4-2(a) does not allow a
claimant to recover workers’ compensation benefits if the injury was caused by an intoxication
of the claimant. The toxicology report from the hospital drug test showed that the amount of
Xanax in Mr. Tennant’s bloodstream was 7,100 mg/ml. Mr. Krenzolok, the toxicologist, found
this to be an inordinately high level of Xanax which would impair Mr. Tennant’s gross motor
skills and his overall judgement, and he opined that this extremely high dosage of the
prescription drug was a substantial contributing factor in the motor vehicle accident. Therefore,
the Board of Review and Office of Judges correctly denied Mr. Tennant’s application for
workers’ compensation benefits in reliance on West Virginia Code § 23-4-2(a).
For the foregoing reasons, we find that the decision of the Board of Review is not in clear
violation of any constitutional or statutory provision, nor is it clearly the result of erroneous
conclusions of law, nor is it based upon a material misstatement or mischaracterization of the
evidentiary record. Therefore, the decision of the Board of Review is affirmed.
Affirmed.
ISSUED: December 11, 2015
CONCURRED IN BY:
Chief Justice Margaret L. Workman
Justice Robin J. Davis
Justice Brent D. Benjamin
Justice Allen H. Loughry II
DISSENTING:
Justice Menis E. Ketchum
3
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-1345
LARRY L. KOGER,
Plaintiff - Appellee,
v.
NORFOLK SOUTHERN RAILWAY COMPANY,
Defendant - Appellant.
Appeal from the United States District Court for the Southern
District of West Virginia, at Bluefield. David A. Faber, Senior
District Judge. (1:08-cv-00909)
Submitted: December 10, 2010 Decided: January 3, 2011
Before WILKINSON, KING, and SHEDD, Circuit Judges.
Affirmed by unpublished per curiam opinion.
John H. Mahaney, II, J. Jarrod Jordan, HUDDLESTON BOLEN, LLP,
Huntington, West Virginia, for Appellant. James L. Farina,
Steven P. Garmisa, HOEY & FARINA, P.C., Chicago, Illinois, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Norfolk Southern Railway Company (“Norfolk Southern”)
appeals the district court’s judgment and $3,431,026 award to
Larry Koger, a former employee injured allegedly due to Norfolk
Southern’s negligence. Norfolk Southern argues that the
district court erred in its instructions to the jury and erred
by denying its motion for a new trial after Koger’s attorney
made allegedly improper remarks to the jury during closing
arguments. We affirm.
I. Jury Instructions
Koger, who sued Norfolk Southern under the Federal
Employers Liability Act (“FELA”), was a Norfolk Southern train
conductor who was injured when the locomotive he was riding in
derailed while leaving a Norfolk Southern train yard in West
Virginia. Prior to trial, the district court concluded that
Norfolk Southern was negligent as a matter of law, but allowed
Norfolk Southern to argue that Koger was contributorily
negligent.
The court’s “statement of the case” to the jury read
as follows:
Plaintiff Larry L. Koger claims damages under [FELA]
for personal injuries alleged to have been suffered as
a result of negligence by defendant Norfolk Southern
Railway Company.
2
Defendant Norfolk Southern Railway Company asserts
that plaintiff Larry L. Koger was not injured as a
result of any negligence by defendant.
. . .
Since a corporation can act only through its officers,
or employees, or other agents, any negligent act or
omission of an officer, or employee, or other agent of
a corporation, in the performance of that person’s
duties, is held in law to be the negligence of the
corporation.
Norfolk Southern claims that the jury could have misread the
final paragraph to allow them to impute Koger’s negligence, if
any, back to Norfolk Southern. We do not agree.
In determining whether the district court erred in
instructing the jury, we review the district court’s jury
instructions “in their entirety and as part of the whole trial
and focus on whether the district court adequately instructed
the jury regarding the elements” of the tort and the defendant’s
defenses. United States v. Wilson, 198 F.3d 467, 469
(4th Cir. 1999) (discussing criminal jury instructions)
(citation omitted). On review, jury instructions must be viewed
as a whole. Hardin v. Ski Venture, Inc., 50 F.3d 1291, 1294
(4th Cir. 1995). We review the instructions given by a district
court for abuse of discretion. United States v. Jeffers, 570
F.3d 557, 566 (4th Cir.), cert. denied, 130 S. Ct. 645 (2009).
Norfolk Southern claims that the court’s instructions
to the jury were incorrect as a matter of law, and highly
prejudicial to its defense. They cite to pattern jury
3
instructions that would have included a caveat that the
negligence of employees, other than the plaintiff, is to be
imputed to the employer. Reviewing the jury instructions as a
whole, though, we do not conclude that the court abused its
discretion. In other instructions, the court gave detailed
information to the jury related to calculating the respective
fault of the parties and how those calculations affected their
verdict. Accordingly, the court’s instructions were not
erroneous.
II. Improper Closing Statement
Koger’s theory of the case was apparently that Norfolk
Southern’s management employees falsified evidence and
misrepresented certain findings to the court. After discussing
this claim, in closing remarks, counsel for Koger told the jury
that they should “send a message” to Norfolk Southern. Norfolk
Southern objected before counsel could finish, and the court
sustained the objection. Norfolk Southern moved, following the
verdict, for a new trial in part based on this improper remark.
The district court denied the motion.
We review a district court’s denial of a motion for a
new trial for abuse of discretion. See United States v.
Fulcher, 250 F.3d 244, 249 (4th Cir. 2001). Norfolk Southern
claims that Koger’s statement that the jury must “send a
4
message” constituted a covert request for punitive damages,
which are not available in FELA actions. Koger argues that his
remarks were not improper, and that in any event, the district
court sustained an objection to the remarks.
We have reviewed the record, and we conclude that the
“send a message” comment was not a request for punitive damages,
and the district court did not abuse its discretion in denying
the motion for a new trial, especially in light of the fact that
an objection to the comments was sustained.
Accordingly, we affirm the district court’s judgment.
We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.
AFFIRMED
5
|
2019 IL App (3d) 160161
Opinion filed August 12, 2019
____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
2019
THE PEOPLE OF THE STATE OF ) Appeal from the Circuit Court
ILLINOIS, ) of the 14th Judicial Circuit,
) Rock Island County, Illinois.
Plaintiff-Appellee, )
) Appeal No. 3-16-0161
v. ) Circuit No. 12-DT-156
)
JUSTIN M. BLACKWOOD, ) Honorable
) William S. McNeal,
Defendant-Appellant. ) Judge, presiding.
____________________________________________________________________________
JUSTICE CARTER delivered the judgment of the court, with opinion.
Justices McDade and Wright concurred in the judgment and opinion.
____________________________________________________________________________
OPINION
¶1 Following a jury trial, defendant Justin M. Blackwood was found guilty of misdemeanor
driving under the influence of alcohol (DUI) (625 ILCS 5/11-501(a)(2) (West 2012)). The Rock
Island County circuit court sentenced defendant to 14 days in jail and 12 months of probation.
Defendant appealed, arguing that his attorney provided ineffective assistance of counsel for
failing to request Illinois Pattern Jury Instructions, Civil, No. 5.01 (2011) (hereinafter IPI Civil
(2011)), under which jurors would be instructed that an adverse inference may be drawn against
the State regarding defendant’s performance on field sobriety tests where the arresting officer
administered field sobriety testing to defendant outside of the view of the squad car’s operable
dashboard video camera. We affirm the judgment of the circuit court.
¶2 FACTS
¶3 Defendant was charged with DUI (625 ILCS 5/11-501(a)(2) (West 2012)) and possession
of cannabis (720 ILCS 550/4 (West 2012)). At defendant’s jury trial, Officer Nick Wade of the
City of Moline Police Department testified that at 3 a.m. on March 2, 2012, defendant drove by
him. Wade and defendant made eye contact as they passed each other, and then defendant
immediately made a left turn into a gas station. Wade thought defendant’s abrupt turn was “a
little suspicious,” so he stopped on the side of the road and waited for defendant to pull out of the
gas station. Defendant pulled out of the gas station and then made a right turn on 16th Avenue
without signaling. Wade followed defendant’s vehicle, intending to initiate a traffic stop because
defendant had failed to signal the turn. As Wade turned onto 16th Avenue, defendant abruptly
turned left into an alley without signaling and parked on a concrete pad that served as a private
driveway. Wade testified, “[i]t seemed like the turn was unplanned” and described the turn as a
“fast turn” as if defendant was not sure where he was going.
¶4 Wade initiated a traffic stop of defendant’s vehicle for failure to signal a turn and parked
behind defendant’s vehicle at a 45-degree angle to block in defendant’s vehicle. Wade was
approached by the resident of the home, who informed Wade that he did not know defendant’s
car or the reason that defendant had parked in his driveway. Wade smelled alcohol on
defendant’s breath immediately upon contact with defendant. There were three passengers in
defendant’s vehicle. Defendant had red, watery eyes and mumbled and slurred his speech.
Defendant had no explanation for parking in the driveway of a stranger. Defendant did not have
any trouble providing his driver’s license or getting out of his car. When Wade administered
-2-
field sobriety tests to defendant, defendant showed signs that he had been consuming alcohol.
Defendant’s three passengers also appeared intoxicated. Wade believed defendant was
intoxicated and unfit to drive because it was bar-closing time, defendant was driving a car full of
people, defendant had driven as if he did not know where he was going, defendant had appeared
to have attempted to avoid Wade’s police vehicle when he pulled into a random driveway with
no explanation for doing so, there was an odor of alcohol, defendant’s eyes were red and watery,
defendant’s speech was slurred, and defendant showed signs of impairment on the field sobriety
testing. Based on his training and experience, Wade opined that defendant was intoxicated and
unfit to drive. Wade placed defendant under arrest.
¶5 Wade transported defendant to the police department for further DUI processing. After a
20-minute observation period, defendant refused to take a breath test.
¶6 Wade’s police car was equipped with video recording equipment, and the traffic stop of
defendant’s vehicle had been recorded. Wade testified that the video showed him making the
traffic stop and showed him having defendant exit the car. The testing was not conducted in front
of Wade’s vehicle so that it could be captured on the video. Wade explained that the reason the
field sobriety tests were not conducted in front of the dashboard camera was because Wade had
parked his squad car in a way to block in defendant’s vehicle and Wade and defendant went off
camera to a “flat area” for the field sobriety testing.
¶7 On cross-examination, Wade testified that that he did not reposition his squad car in order
to capture the field sobriety testing on video camera because there were three other occupants in
the vehicle, “not all of which were being very cooperative with [the officers], and one of [whom]
ha[d] a very violent history with [police].” Wade wanted to keep defendant’s car blocked in “so
nobody could get in it and leave in it.” Wade indicated that the main reason he did not reposition
-3-
his vehicle was out of concern for “an officer-safety and a public safety issue.” In addition, the
alleyway was “tight” and other officers had arrived on scene. Wade testified that he would have
moved his squad car “if it was a reasonable thing to do.” On redirect, the prosecutor asked, “how
overwhelming was the smell of the alcoholic beverage?” Wade responded, “very strong.”
¶8 Officer Eric Wells testified that he arrived at the traffic stop to back up Wade. Two other
officers also arrived at the traffic stop. Wells began to speak with defendant’s passengers. Wells
testified that the passengers all “seemed very intoxicated.” The passengers had slurred speech,
smelled of alcohol, and staggered a little. After defendant was arrested, Wells conducted a tow
inventory search of defendant’s vehicle and found a plastic bag containing cannabis under the
driver’s seat.
¶9 In closing arguments, defendant’s attorney argued, in part:
“There is a video on the officer’s squad car. Now, that was not helpful in
any way because it did not show these field sobriety tests. Now, if that had been
provided, would that show you objectively what happened? Yes. We don’t have
that today.”
¶ 10 The jury found defendant guilty of driving under the influence of alcohol. The jury found
defendant not guilty of possession of cannabis.
¶ 11 Defendant filed a posttrial motion “for a verdict of not guilty” or in the alternative for a
new trial, arguing, in part, that the evidence was insufficient for the jury to find him guilty of
DUI beyond a reasonable doubt because Wade’s dashboard video camera, although working at
the time of the stop, “did not capture any images of the field sobriety tests.” At the hearing on the
motion, defendant’s attorney argued that, even though a video existed, the video camera was
-4-
“not utilized in the proper way,” so that “a shadow was cast over all of the State’s evidence.”
Defendant’s attorney stated:
“[W]e’re not talking about a discovery issue here, we’re not talking about
an admissibility issue, we’re talking about an argument that goes to the weight
and the thrust of the evidence rather than its admissibility. *** [Wade] didn’t
want to move his car because he was trying to keep the defendant’s car where it
was. However, Judge, if you recall the facts of the case, at this time [defendant]
had already been removed from the vehicle. There was no one in the driver’s seat,
and I believe that the other occupants of the car had already been removed as
well. It would have been easy for this officer to maneuver his car in a way that
permitted him to keep this car where it was while still being able to get video of
the field sobriety tests. And, Judge, that doesn’t even touch on whether that need
that this officer believed was even backed up by the facts. There was no one there
ready to get into the car. Judge, as I said, that casts a shadow over the entirety of
the State’s evidence presented in this case.”
¶ 12 In ruling on defendant’s posttrial motion, the trial court noted that, in addition to
defendant being out of the vehicle and Wade having an opportunity to reposition his squad car,
other officers were present and “could have taken the time and repositioned the squad car so that
the field sobriety tests could have been on video.” The trial court stated:
“They easily could have [repositioned the squad car]. They chose not to.
And I’m sure the jury took that into consideration in addition to the officer’s
explanation as to why he did not reposition his squad car. So it could have been
-5-
taken into consideration by the jury the fact that the officer could have but didn’t
reposition his squad car.”
¶ 13 The trial court denied defendant’s posttrial motion, noting that there was no basis to
overturn the jury’s verdict. The trial court sentenced defendant to 14 days in jail and 12 months
of probation. Defendant appealed.
¶ 14 ANALYSIS
¶ 15 On appeal, defendant argues that his trial counsel was ineffective for failing to request
that the jury be given an adverse inference jury instruction in accordance with IPI Civil (2011)
No. 5.01 because Officer Wade failed to record the field sobriety tests. Defendant argues that,
where a police encounter was negligently conducted so that no recording was created, the
practical effect is that the legislature’s intent behind passing a directive to police to record such
encounters is wholly frustrated by the missing recording and, therefore, a negative inference
instruction is appropriate. Defendant contends his counsel’s performance was deficient because
counsel failed to tender a jury instruction that would inform the jury that it could infer that a
video recording would have been adverse to the testimony of Officer Wade regarding
defendant’s performance on the field sobriety tests.
¶ 16 The State argues that defendant cannot establish that his trial counsel’s performance fell
below an objective standard of reasonableness. The State contends that there is no case law to
support defendant’s argument that the civil adverse inference jury instruction referenced by
defendant would have been proper in this case based on the officer’s failure to record the field
sobriety tests and that giving such an instruction in a criminal case may infringe upon a
defendant’s presumption of innocence and right not to present any evidence. The State also
-6-
argues that even if the instruction had been given there is not a reasonable probability that the
outcome of defendant’s jury trial would have been different.
¶ 17 In reply, defendant clarifies that he “is not arguing that counsel was ineffective for failing
to request discovery sanctions.” Rather, defendant’s sole contention is that “counsel should have
requested an adverse inference instruction where police officers had the ability to videotape field
sobriety tests, but failed to do so.” Defendant argues that the adverse inference instruction is
applicable in criminal cases. He also again argues that a negative inference instruction is
appropriate because the legislative intent for mandating the recording of police-citizen
encounters is thwarted when an officer fails to make such a recording.
¶ 18 Both the United States Constitution and the Illinois Constitution guarantee criminal
defendants the right to effective assistance of counsel. U.S. Const., amends. VI, XIV; Ill. Const.
1970, art. I, § 8. To prevail on a claim of ineffective assistance of trial counsel, a defendant must
satisfy the two-prong test set forth in Strickland v. Washington, 466 U.S. 668, 687 (1984), and
establish that (1) counsel’s performance fell below an objective standard of reasonableness and
(2) counsel’s deficient performance prejudiced defendant. See People v. Albanese, 104 Ill. 2d
504, 525-27 (1984) (adopting the Strickland standard). A defendant must demonstrate that
counsel’s performance was objectively unreasonable and there is a reasonable probability that,
but for counsel’s unprofessional errors, the outcome of the proceeding would have been
different. People v. Veach, 2017 IL 120649, ¶ 30. Both prongs must be established to support a
finding of ineffective assistance of counsel. Id. To establish the deficient performance prong,
defendant must overcome the presumption that counsel’s conduct was the result of trial strategy.
People v. Perry, 224 Ill. 2d 312, 341-42 (2007).
-7-
¶ 19 In this case, defendant argues his counsel’s performance was objectively unreasonable
because his counsel “failed to offer the jury any instruction on how it could weigh the officer’s
failure to record the incident against [the officer’s] testimony” and failed to request a jury
instruction “in accordance with Illinois Pattern Jury Instruction, Civil, 5.01.” Defendant argues
that IPI Civil (2011) No. 5.01 is “appropriate in criminal cases” and cites various cases in
support of this contention—People v. Moore, 2016 IL App (1st) 133814, ¶ 17; People v.
Aronson, 408 Ill. App. 3d 946, 953 (2011); In re Julio C., 386 Ill. App. 3d 46, 53 (2008); People
v. Camp, 352 Ill. App. 3d 257, 262 (2004); and People v. Danielly, 274 Ill. App. 3d 358, 368
(1995). Defendant acknowledges that an adverse inference instruction is typically given when
evidence has been destroyed but argues that “increasing importance has been placed on the
production and preservation of recordings made by squad car cameras during law enforcement
actions.” Defendant notes that, pursuant to section 30 of the State Police Act (20 ILCS 2610/30
(West 2018)), the legislature has indicated that Illinois State Police squad cars are to be equipped
with recording equipment that “shall record” activities outside a patrol vehicle whenever an
officer reasonably believes recording may assist with prosecution, may enhance safety, or for
any other lawful purpose.
¶ 20 Section 30 of the State Police Act provides, in pertinent part:
“(b) By June 1, 2009, the Department [of State Police] shall install in-car
video camera recording equipment in all patrol vehicles. Subject to appropriation,
all patrol vehicles shall be equipped with in-car video camera recording
equipment *** capable of recording for a period of 10 hours or more by June 1,
2011. ***
-8-
(c) *** [I]n-car video camera recording equipment *** incapable of
recording for a period of 10 hours or more shall record activities outside a patrol
vehicle whenever (i) an officer assigned a patrol vehicle is conducting an
enforcement stop; (ii) patrol vehicle emergency lights are activated or would
otherwise be activated if not for the need to conceal the presence of law
enforcement; or (iii) an officer reasonably believes recording may assist with
prosecution, enhance safety, or for any other lawful purpose. *** [I]n-car video
camera recording equipment *** incapable of recording for a period of 10 hours
or more shall record activities inside the vehicle when transporting an arrestee or
when an officer reasonably believes recording may assist with prosecution,
enhance safety, or for any other lawful purpose.
(1) Recording for an enforcement stop shall begin when the officer
determines an enforcement stop is necessary and shall continue until the
enforcement action has been completed and the subject of the enforcement
stop or the officer has left the scene.
(2) Recording shall begin when patrol vehicle emergency lights are
activated or when they would otherwise be activated if not for the need to
conceal the presence of law enforcement, and shall continue until the
reason for the activation ceases to exist, regardless of whether the
emergency lights are no longer activated.
(3) An officer may begin recording if the officer reasonably
believes recording may assist with prosecution, enhance safety, or for any
-9-
other lawful purpose; and shall continue until the reason for recording
ceases to exist.
(d) In-car video camera recording equipment with a recording medium
capable of recording for a period of 10 hours or more shall record activities
whenever a patrol vehicle is assigned to patrol duty.
(e) Any enforcement stop resulting from a suspected violation of the
Illinois Vehicle Code shall be video and audio recorded. Audio recording shall
terminate upon release of the violator and prior to initiating a separate criminal
investigation.
(f) Recordings made on in-car video camera recording medium shall be
retained by the Department for a storage period of at least 90 days. Under no
circumstances shall any recording made on in-car video camera recording
medium be altered or erased prior to the expiration of the designated storage
period. Upon completion of the storage period, the recording medium may be
erased and reissued for operational use unless otherwise ordered by the District
Commander or his or her designee or by a court, or if designated for evidentiary
or training purposes.
(g) Audio or video recordings made pursuant to this Section shall be
available under the applicable provisions of the Freedom of Information Act.
Only recorded portions of the audio recording or video recording medium
applicable to the request will be available for inspection or copying.
(h) The Department shall ensure proper care and maintenance of in-car
video camera recording equipment and recording medium. An officer operating a
- 10 -
patrol vehicle must immediately document and notify the District Commander or
his or her designee of any technical difficulties, failures, or problems with the in-
car video camera recording equipment or recording medium. Upon receiving
notice, the District Commander or his or her designee shall make every
reasonable effort to correct and repair any of the in-car video camera recording
equipment or recording medium and determine if it is in the public interest to
permit the use of the patrol vehicle.
(i) The Department may promulgate rules to implement this amendatory
Act of the 95th General Assembly only to the extent necessary to apply the
existing rules or applicable internal directives.” Id.
¶ 21 IPI Civil (2011) No. 5.01 provides, in pertinent part, that if a party fails to offer evidence
within its power to produce, jurors may infer that the evidence would be adverse to the party if
the jurors believe (1) the evidence was under the control of the party and could have been
produced by the exercise of reasonable diligence, (2) the evidence was not equally available to
an adverse party, (3) a reasonably prudent person under the same or similar circumstances would
have offered the evidence if he believed the evidence to be favorable to him, and (4) no
reasonable excuse for the failure has been shown. Notably, there is no comparable missing
evidence instruction in the criminal jury instructions. See generally Illinois Pattern Jury
Instructions, Criminal (approved July 18, 2014) (hereinafter IPI, Criminal). IPI Civil (2011) No.
5.01 is a civil jury instruction prepared for use in civil cases, and “its use in criminal cases could
result in plain error since it clearly could be interpreted to conflict with a defendant’s fifth
amendment right to remain silent.” People v. Hall, 235 Ill. App. 3d 418, 430 (1992). If IPI Civil
(2011) No. 5.01 is tendered in a criminal case, the comments on the missing evidence may
- 11 -
violate defendant’s presumption of innocence by the jury possibly imposing a burden of proof on
defendant to present evidence when the defense is under no obligation to present any evidence in
a criminal prosecution. People v. Clarke, 391 Ill. App. 3d 596, 617-18 (2009). Furthermore,
“ ‘[c]ourts are under a general obligation to avoid giving instructions which unduly emphasize
one part of the evidence in a case [citation] and are not required to give an instruction that would
provide the jury with no more guidance than that available to them by application of common
sense.’ ” See Illinois Pattern Jury Instructions Criminal, No. 3.00 (approved Oct. 17, 2014)
(quoting People v. McClellan, 62 Ill. App. 3d 590, 595 (1978)). We, therefore, disagree with
defendant’s general contention that IPI Civil (2011) No. 5.01 “is appropriate in criminal cases.”
¶ 22 Additionally, the cases cited by defendant do not support defendant’s contention that IPI
Civil (2011) No. 5.01 is “appropriate” in criminal cases where officers fail to record the field
sobriety tests despite having functioning equipment to do so. The cases cited by defendant
discuss giving an adverse inference jury instruction in the context of imposing discovery
sanctions against the State for its failure to produce evidence. See Aronson, 408 Ill. App. 3d at
952-53 (affirming the trial court’s grant of defendant’s petition to rescind the statutory summary
suspension of her driving privileges where the trial court denied defendant’s motion for
rescission as a discovery sanction for the State’s failure to produce the video of the field sobriety
tests and, instead, applied an inference that the video was favorable to defendant when weighing
the evidence at the rescission hearing); Julio C., 386 Ill. App. 3d at 53-54 (holding that the
State’s failure to provide notice of its intent to release a vehicle in its possession constituted a
discovery violation but reversing the sanction of a dismissal of the charges against juvenile
because the vehicle was not exculpatory evidence, with the reviewing court noting that on
remand the juvenile had a right to a jury trial and “the trial court could give a limiting instruction
- 12 -
based on Illinois Pattern Jury Instructions, Civil, No. 5.01”); Camp, 352 Ill. App. 3d at 262
(reversing the dismissal of DUI charges against defendant as too excessive a discovery sanction
against the State for its inadvertent loss of a video of defendant performing field sobriety tests
and noting the trial court on remand may consider a variety of “less drastic” options, including
“instructing the jury that the absence of the videotape requires an inference that the tape’s
contents are favorable to defendant”); Danielly, 274 Ill. App. 3d at 368 (holding that there was
no due process violation where police did not act in bad faith by returning the victim’s
underwear to the victim in defendant’s aggravated criminal sexual assault case and concluding
the nonpattern adverse inference jury instruction tendered by defendant was appropriate where
the underwear at the time of trial was not within the State’s power to produce). However,
defendant does not argue that a discovery violation occurred in this case and has indicated that he
is not arguing his counsel was ineffective for failing to seek a discovery sanction. Moreover,
Aronson is distinguishable because that case involved a civil summary suspension wherein
defendant had the burden of proof and giving IPI Civil (2011) No. 5.01 in that case does not
involve the same potential constitutional impingements as would be involved by giving the
instruction in a criminal case. See Hall, 235 Ill. App. 3d 418; Clarke, 391 Ill. App. 3d at 617-18.
¶ 23 Perhaps, arguably in light of the directive in section 30 of the State Police Act, a request
for a discovery sanction would be warranted where an officer fails to record field sobriety tests—
although notably the directive is to the Department of the State Police, and the officer in this case
was employed by the City of Moline Police Department. See 20 ILCS 2610/30 (West 2018);
People v. Moises, 2015 IL App (3d) 140577, ¶ 13 (opinion of Schmidt, J.) (indicating the trial
court erred by barring testimony about defendant’s field sobriety tests as a discovery sanction
where the police deputy (it is not clear whether he was a municipal or state police deputy)
- 13 -
directed defendant to perform field sobriety tests in an area off-camera and “[p]olice officers are
not required by law to conduct field sobriety tests within the view of a squad car camera”); id.
¶ 25 (Lytton, J., specially concurring) (finding remand was appropriate to determine why the
field sobriety tests were conducted off camera); id. ¶ 30 (Holdridge, J., dissenting) (finding
section 30 of the State Police Act, requiring state police to record traffic stops resulting from a
suspected violation of the Vehicle Code, is a mandatory directive so that it would not have been
an abuse of the trial court’s discretion to impose a discovery sanction based upon the deputy’s
failure to record the field sobriety tests). Nonetheless, as previously noted, defendant has
specifically indicated that he “is not arguing that counsel was ineffective for failing to request
discovery sanctions.” 1 Therefore, we need not determine whether Wade’s failure to record the
field sobriety tests constituted a discovery violation or whether the trial court would have acted
within its discretion by giving IPI Civil (2011) 5.01 as a discovery sanction had defense counsel
requested it. Consequently, the cases cited by defendant—Aronson, Julio C., Camp, and
Danielly—all of which dealt with discovery sanctions, have no bearing on the case at hand.
¶ 24 Also, the Moore case cited by defendant does not support his contention that his
counsel’s performance fell below an objective standard of reasonableness. See Moore, 2016 IL
App (1st) 133814, ¶¶ 32, 37-38, 41 (affirming the trial court’s denial of defendant’s motions to
bar testimony and dismiss the murder indictment as discovery sanctions against the State where
the State failed to preserve certain photo arrays). In Moore, prior to defendant’s murder trial,
defendant filed a motion for discovery sanctions because the State had failed to preserve four
1
A discovery violation can be analyzed two ways: (1) as a due process violation under which the
failure to preserve material exculpatory evidence is a discovery violation and the failure to preserve
evidence that is only potentially useful does not violate due process unless the defendant can show bad
faith by the State, or (2) as a violation under Illinois Supreme Court Rule 415(g)(i) (eff. Oct. 1, 1971),
under which a defendant is only required to show that a party “failed to comply with an applicable
discovery rule or an order issued pursuant thereto.” People v. Borys, 2013 IL App (1st) 111629, ¶ 17.
- 14 -
photo arrays from which witnesses either identified the codefendant as the shooter and the
defendant as also having a gun, or from which witnesses had made no identification at all. Id.
¶ 4. The trial court in Moore denied the motion for discovery sanctions but sua sponte
determined that defendant was entitled to “the standard instruction relating to lost evidence in the
care and custody of the police department allowing a negative inference to be drawn from the
missing evidence and [allowing] the opportunity for the Defense to argue that any reasonable
inference that can be drawn from the missing evidence.” Id. The trial court specifically indicated,
“ ‘I’m not really imposing a sanction’ ” and then, prior to jury deliberations, admonished the jury
with Illinois Pattern Jury Instructions, Civil, No. 5.01 (Supp. 2000)—that if a party had failed to
offer evidence within its power to produce then jurors could infer the evidence would be adverse
to that party if that evidence was under control of the party and could have been produced with
reasonable diligence, the evidence was not equally available to an adverse party, a reasonably
prudent person under the same or similar circumstance would have offered the evidence if he
believed it to be favorable to him, and there was no reasonable excuse for the failure had been
shown. Moore, 2016 IL App (1st) 133814, ¶¶ 4, 17. The jury found the defendant guilty. Id. ¶ 18.
On appeal, the Appellate Court, First District, affirmed, holding the trial court acted within its
discretion in deciding not to impose a discovery sanction. Id. ¶¶ 32, 38. In dicta, the Moore court
additionally stated that it was reasonable for the trial court to admonish jurors that they could
make a negative inference. See id. ¶ 38 (“[u]nder these circumstances, we find the court’s
decision not to impose a sanction but to instead admonish the jury that it was permitted to make a
negative inference was reasonable and not an abuse of discretion”). The issue of whether the trial
court had abused its discretion by sua sponte giving the adverse inference jury instruction,
however, was not an issue raised on appeal. See id. ¶ 1. Therefore, Moore does not support
- 15 -
defendant’s contention that his counsel was ineffective for failing to request an adverse inference
jury instruction in accordance with IPI Civil (2011) 5.01.
¶ 25 Consequently, defendant has failed to demonstrate his counsel’s performance fell below
an objective standard of reasonableness, and we therefore need not address the prejudice prong
of the Strickland test. We conclude defendant has failed to establish his counsel’s ineffectiveness
and, thus, affirm his conviction.
¶ 26 CONCLUSION
¶ 27 The judgment of the circuit court of Rock Island County is affirmed.
¶ 28 Affirmed.
- 16 -
No. 3-16-0161
Cite as: People v. Blackwood, 2019 IL App (3d) 160161
Decision Under Review: Appeal from the Circuit Court of Rock Island County, No. 12-
DT-156; the Hon. William S. McNeal, Judge, presiding.
Attorneys James E. Chadd, Peter A. Carusona, and Bryon Kohut, of State
for Appellate Defender’s Office, of Ottawa, for appellant.
Appellant:
Attorneys John L. McGehee, State’s Attorney, of Rock Island (Patrick
for Delfino, David J. Robinson, and Steven A. Rodgers, of State’s
Appellee: Attorneys Appellate Prosecutor’s Office, of counsel), for the
People.
- 17 -
|
588 S.E.2d 441 (2003)
263 Ga. App. 554
WALKER
v.
GWINNETT HOSPITAL SYSTEM, INC.
No. A03A1409.
Court of Appeals of Georgia.
September 18, 2003.
Reconsideration Denied October 7, 2003.
*442 Russell & Herrera, Decatur, Dorothea L. Russell, Dana C. Bryan, for appellant.
Hall, Booth, Smith & Slover, James H. Fisher II, Atlanta, Brittany L. Tuggle, for appellee.
MILLER, Judge.
Gwinnett Hospital System, Inc. (the hospital) sued Dr. Carol Walker to recover monies the hospital loaned to Dr. Walker while she was beginning her medical practice. Dr. Walker defended on the grounds that the six-year statute of limitation had run and that she was entitled to a set-off for the hospital's preventing her from hiring an associate physician, who would have increased her revenues and thereby assisted her in paying off the loan earlier. The trial court granted summary judgment to the hospital and entered judgment against Dr. Walker in the principal amount outstanding on the loan plus prejudgment interest. Dr. Walker appeals, contending that (i) the statute of limitation barred the hospital's action because she had breached the repayment terms of her contract with the hospital more than six years prior to the filing of this suit, (ii) disputed issues of fact concerning the set-off defense precluded summary judgment, and (iii) the hospital was not entitled to prejudgment interest. We hold that the undisputed facts showed that the first breach of the contract took place within six years of suit, that no set-off was justified, and that the court did not err in awarding the hospital prejudgment interest. Therefore, summary *443 judgment in favor of the hospital was appropriate, and we affirm.
"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. OCGA § 9-11-56(c)." Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997). We apply a de novo standard of review to an appeal from the grant of summary judgment, construing the evidence in the light most favorable to the nonmovant. Id.
So construed, the evidence showed that the hospital persuaded Dr. Walker to begin a medical practice near the hospital by promising to reimburse Dr. Walker for certain expenses and to loan Dr. Walker money interest-free to cover other expenses, including the salary cost of four full-time employees and a $20,000 monthly salary to Dr. Walker during her first year of practice. The parties executed a written agreement to this effect, which provided that Dr. Walker would begin repaying the loan when her monthly net income (after paying expenses, including Dr. Walker's $20,000 monthly salary) from the practice exceeded $3,000. Once that threshold was exceeded, Dr. Walker was obligated each month to pay the hospital all net income exceeding $3,000 for that month until the loan was fully paid. Although the agreement did not specify a certain date by which the loan was to be paid off, it did state: "It is the joint expectation of [the hospital] and `Physician' that `Physician' will have paid back in full the amount theretofore paid to `Physician' by [the hospital] within twelve (12) months beginning the payback."
Pursuant to the agreement, Dr. Walker in November 1992 began a medical practice near the hospital and over the next several months received loan proceeds from the hospital in the aggregate amount of $393,667.87. In June 1993, her net income (after paying all expenses, including her own salary) exceeded $3,000 and she paid the hospital the excess amount. Until April 1996, she paid the hospital on a monthly basis all net income exceeding the $3,000 amount. At that point, she ceased making the payments called for by the contract and instead made sporadic payments in amounts not set forth in the contract. She made her last payment in January 1998, which left a balance of $191,361.91.
In July 2001, the hospital sued Dr. Walker to recover the outstanding balance. Dr. Walker responded that the six-year statute of limitation barred recovery based on her argument that she had breached the contract when she failed to pay the loan off fully within twelve months of June 1993. She further claimed that she was entitled to a set-off for damages caused by the hospital's breaching the duty of good faith implied in the agreement. The set-off claim was based on a hospital official's having told Dr. Walker in 1995 that the contract, which only referred to four employees in Dr. Walker's practice, prohibited her from hiring a physician employee (who would have been a fifth employee and would have required the hiring of more support employees). The trial court granted summary judgment to the hospital, holding that neither defense survived under the undisputed facts. Dr. Walker appeals.
1. Dr. Walker contends that the provision of the agreementthat the parties' joint expectation was that the loan would be fully paid off within 12 months of the first repaymentobligated her to pay off the loan in full by June 1994, the 12-month anniversary of her first repayment. Accordingly, because Dr. Walker did not pay off the loan by that date, she argues that she breached the agreement as of June 1994 and that the applicable statute of limitation began to run on that date. Since suit was not filed until July 2001, she asserts that the six-year statute of limitation found in OCGA § 9-3-24 for written contracts barred recovery of the debt.
OCGA § 9-3-24 does require that an action upon a written contract be brought within six years after the contract becomes due and payable. Mobley v. Murray County, 178 Ga. 388(1), 173 S.E. 680 (1934), held that the statute begins to run when the plaintiff could first have maintained her action to a successful result, which would be the date of the contract's breach. See id. at 394-398, 173 S.E. 680. Thus, Baker v. Brannen/Goddard Co., 274 Ga. 745, 749-750(2), 559 S.E.2d 450 (2002), held that the six-year period started *444 when the first monthly installment payment of commissions was missed.
The question therefore is when Dr. Walker here first breached the contract, i.e., when she missed the first payment. Where the facts are undisputed, "the question of whether the case is within the bar of the statute is one of law for the court." (Citations omitted.) Curlee v. Mock Enterprises, 173 Ga.App. 594, 596(2), 327 S.E.2d 736 (1985). Furthermore, "the construction of a contract is a question of law for the court based on the intent of the parties as set forth in the contract...." (Footnote omitted.) Deep Six v. Abernathy, 246 Ga.App. 71, 73(2), 538 S.E.2d 886 (2000); see OCGA § 13-2-1. "Parol evidence is inadmissible to add to, take from, or vary a written contract." OCGA § 13-2-2(1).
Here the written contract, which provided that it was the entire agreement between the parties, defined the repayment obligations by stating that Dr. Walker "shall pay" the hospital the excess of her net income over $3,000 until the loan was "paid in full." The language added at the end of this repayment paragraph"It is the joint expectation of [the parties that Dr. Walker] will have paid back in full the amount theretofore paid to [Dr. Walker by the hospital] within twelve (12) months beginning the payback" did not accelerate the due date of the loan and obligate Dr. Walker to pay it off by the end of those first 12 months. "Expectation" simply refers to "[t]he act of looking forward" or "anticipation." Black's Law Dictionary, p. 598 (7th ed.1999). The word "`does not in itself amount to intention.'" (Citation omitted.) Id. Thus, it is compared to "general commendations or mere expressions of opinion, hope, expectation, and the like." (Citation and punctuation omitted.) Charter Med. Mgmt. Co. v. Ware Manor, Inc., 159 Ga.App. 378, 383(5), 283 S.E.2d 330 (1981). Indeed, "the party to whom it is made is not justified in relying upon it...." (Citation and punctuation omitted.) Id.
Accordingly, this aspirational statement was simply an expression of hope or anticipation that Dr. Walker would pay back the loan within those first 12 months. It was not couched in the mandatory language of a contractual obligation that the parties had used immediately preceding the statement. Had the parties intended to create an accelerated due date for the loan, they could have easily done so.
The undisputed facts (as conceded in Dr. Walker's appellate brief) showed that she "made payments when required by the income guarantee calculation from June 9, 1993 through March of 1996...." Thus, the contract was not breached until April 1996, when (as stated in Dr. Walker's appellate brief) she "began making sporadic payments to the [hospital] in violation of the repayment terms of the agreement.... She continued this until January 22, 1998," when she made her last payment. (Bold in original.)
These undisputed facts show that the first breach of a repayment obligation occurred in April 1996. See Baker, supra, 274 Ga. at 749-750(2), 559 S.E.2d 450. Since this was within six years of the July 2001 filing of the complaint, the court properly found the statute of limitation defense invalid as a matter of law.
2. Dr. Walker contends that her set-off defense precluded summary judgment. She claims that the hospital breached an implied duty of good faith and fair dealing when its official told her in 1995 that the contract did not allow her to hire a physician employee (in addition to the other four employees she had). Dr. Walker asserts that hiring the additional physician may have led to increased revenues that would have allowed her to pay off the loan earlier.
We hold that this set-off defense fails for two reasons. First, Dr. Walker presented no evidence whatsoever as to what net revenue, if any, an additional associate physician would have brought into her practice. There is nothing about what additional income or expenses would have resulted from such a hire. Indeed, undisputed evidence showed that hiring another physician may have required Dr. Walker to hire more support staff, thereby increasing salary expenses more than ever. Absent evidence of these amounts, summary judgment in favor of the hospital was appropriate.
*445 Second, nothing in the contract implicitly or otherwiserequired or made it necessary that the hospital allow Dr. Walker to hire an additional physician employee. The implied duty doctrine "requires both parties to a contract to perform their promises and provide such cooperation as is required for the other party's performance." (Punctuation and footnote omitted; emphasis supplied.) Physician Specialists in Anesthesia v. MacNeill, 246 Ga.App. 398, 407(5), 539 S.E.2d 216 (2000); see Southern Business Machines of Savannah v. Norwest Financial Leasing, 194 Ga.App. 253, 256(2), 390 S.E.2d 402 (1990) (duty of good faith and fair dealing implied "`whenever the co-operation of the promisee is necessary for the performance of the promise ... `") (citation omitted; emphasis supplied).
We discern no obligation, implied or otherwise, requiring the hospital to allow Dr. Walker to hire a physician employee in addition to her four office employees. The agreement provided that Dr. Walker's reimbursable expenses could only include four employees. Dr. Walker conceded in her testimony that the four-employee limit was the basis for the hospital's statement that she could not hire the physician employee. We fail to see any evidence that the hospital acted in bad faith when it refused to consent to Dr. Walker increasing her expenses when those expenses were defined in the agreement as including only four employees. See Robin v. BellSouth Advertising &c. Co., 221 Ga.App. 360, 361(2), 471 S.E.2d 294 (1996) ("There can be no breach of an implied covenant of good faith where a party to a contract has done what the provisions of the contract expressly give him the right to do.") (citations and punctuation omitted). The speculation that the additional physician would also have increased revenues did not obligate the hospital to approve this expense. Notably, Dr. Walker was meeting her repayment obligations during the time period in question (June 1993 through March 1996). Her personal desire to pay off the loan sooner did not imply a duty on the part of the hospital to consent to a fifth employee.
Since the set-off defense lacked merit as a matter of law, the trial court did not err in granting the hospital summary judgment for the outstanding balance on the loan. The balance was a liquidated amount, thus authorizing the court to award prejudgment interest under OCGA §§ 7-4-15 and 13-6-13.
Judgment affirmed.
SMITH, C.J., and RUFFIN, P.J., concur.
|
888 F.2d 657
64 A.F.T.R.2d 89-5950, 89-2 USTC P 13,821
ESTATE OF Francis L. BRUNING, Deceased, Ilse M. Bruning,Personal Representative, Petitioner-Appellee,v.COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant.
No. 88-2547.
United States Court of Appeals,Tenth Circuit.
Oct. 25, 1989.
James W. Buchanan, III, of Buchanan, Thomas & Johnson, P.C., Lakewood, Colo. (Rick Budd and Benjamin Spitzer of Budd and Spitzer, P.C., Denver, Colo., and Susan Buchanan of Buchanan, Thomas & Johnson, P.C., Lakewood, Colo., with him on the brief), for petitioner-appellee.
Nancy G. Morgan, Attorney, Tax Div., Dept. of Justice, Washington, D.C. (William S. Rose, Jr., Asst. Atty. Gen., Gary R. Allen, Richard Farber, and Raymond W. Hepper, Attorneys, Tax Div., Dept. of Justice, Washington, D.C., on the brief), for respondent-appellant.
Before LOGAN, SETH, and MOORE, Circuit Judges.
PER CURIAM.
1
Petitioner Ilse M. Bruning, the personal representative of the estate of Francis L. Bruning (decedent), brought this action against the Commissioner of Internal Revenue in the Tax Court seeking a redetermination of a deficiency in estate tax asserted by the Commissioner. Deciding the case on stipulated facts, the Tax Court held that petitioner is entitled to an unlimited marital estate tax deduction, because the trust established under the will of the decedent did not contain a maximum marital deduction formula clause within the meaning of Sec. 403(e)(3) of the Economic Recovery Tax Act of 1981 (ERTA), Pub.L. No. 97-34, 95 Stat. 172, 305. Estate of Bruning v. Commissioner, 54 T.C.M. (CCH) 1469 (1988). On appeal, the Commissioner argues petitioner should have been permitted to claim only a limited marital deduction. For the reasons set forth below, we affirm.
2
Decedent died testate on April 22, 1982. On March 2, 1981, he had executed his will, bequeathing the residue of his estate to a trust. Neither the trust nor the will were amended during decedent's lifetime. The trust contained the following provision:
3
"Section 1. Division of Trust. If Settlor's spouse survives Settlor, the Trustee shall divide the remaining trust property into two separate trusts. One such trust shall be designated as the Marital Trust and shall consist of the lesser of (1) an amount equal in value to the maximum marital deduction allowable in the federal estate tax proceeding relating to Settlor's estate, or (2) the amount which, after taking into account all credits, exemptions and deductions, other than the marital deduction, which are available to Settlor's estate for federal estate tax purposes, will result in the elimination of all federal estate tax in Settlor's estate; provided, however, the amount passing to the Marital Trust shall be reduced by the total value of any property or interest which qualifies for the marital deduction and which passes to Settlor's spouse other than under this Article. The balance of the trust property shall be allocated to a separate trust and shall be designated as the Family Trust."
4
At the time the will and trust were executed, 26 U.S.C. Sec. 2056(c) (1954) permitted a marital deduction of the greater of $250,000 or fifty percent of the adjusted gross estate. In 1981, Congress repealed this provision and in Sec. 403(a) of ERTA, Pub.L. 97-34, 95 Stat. 172, 301, permitted an unlimited marital deduction for estates of decedents dying after December 31, 1981. Congress, however, was concerned that because of the widespread use of maximum marital deduction formula clauses an unlimited marital deduction might cause more property to pass to the surviving spouse than the testator intended. S.Rep. No. 144, 97th Cong., 1st Sess. 2 reprinted in 1981 U.S.Code Cong. & Admin.News 105, 229. Therefore, Congress enacted a transitional rule limiting the marital deduction to the amount allowable under Sec. 2056 (1954) in certain circumstances. Section 403(e)(3) of ERTA, the transitional rule, provided in relevant part
5
"If--
6
(A) the decedent dies after December 31, 1981,
7
(B) by reason of the death of the decedent property passes from the decedent or is acquired from the decedent under a will executed before the date which is 30 days after the date of the enactment of this Act, or a trust created before such date, which contains a formula expressly providing that the spouse is to receive the maximum amount of property qualifying for the marital deduction allowable by Federal law,
8
(C) the formula referred to in subparagraph (B) was not amended to refer specifically to an unlimited marital deduction at any time after the date which is 30 days after the date of enactment of this Act, and before the death of the decedent, and
9
(D) the State does not enact a statute applicable to such estate which construes this type of formula as referring to the marital deduction allowable by Federal law as amended by subsection (a),1then the amendment made by subsection (a) shall not apply to the estate of such decedent."
10
95 Stat. at 305 (codified in note to 26 U.S.C. Sec. 2056 (1982)) (emphasis added).
11
Petitioner filed a federal estate tax return taking an unlimited marital deduction and indicating that no taxes were due. The Internal Revenue Service issued a notice of deficiency based upon its determination that the decedent's will contained a maximum marital deduction formula clause within the meaning of Sec. 403(e)(3) which had not been amended.
12
The issue before the Tax Court, and now before us, is whether Sec. 403(e)(3) precludes the estate from qualifying for an unlimited marital deduction. The marital deduction provisions in decedent's will provide that his surviving spouse is to receive "the lesser of (1) an amount equal in value to the maximum marital deduction allowable ... or (2) the amount which after taking into account all credits, exemptions and deductions, other than the marital deduction, ... will result in the elimination of all federal estate tax in Settlor's estate." Based on this language, the Tax Court determined that the decedent's intent was to minimize estate taxes, not maximize the marital deduction and, therefore, that Sec. 403(e)(3) does not limit the marital deduction. 54 T.C.M. (CCH) at 1470-71.
13
The purpose of Sec. 403(e)(3) is to preserve rather than defeat the testator's intent. Liberty Nat'l Bank & Trust Co. v. United States, 867 F.2d 302, 304 (6th Cir.1989). To determine whether the limitation of Sec. 403(e)(3) applies, the will and trust must be examined to determine decedent's intent at the time of execution of the will. Id. Intent is to be determined from the entire will. Wright v. Poudre Valley Nat'l Bank, 153 Colo. 255, 385 P.2d 412, 414 (1963). The intent of the decedent as clearly and unambiguously expressed in the will controls the disposition of the estate. In re Question Submitted by the United States Court of Appeals for the Tenth Circuit, 191 Colo. 406, 553 P.2d 382, 384 (1976); In re the Trust Under the Last Will & Testament of Killin, 703 P.2d 1323, 1325 (Colo.Ct.App.1985).
14
We conclude, as did the Tax Court, that the trust referred to in the will before us does not contain "a formula expressly providing that the spouse is to receive the maximum amount of property qualifying for the marital deduction allowable by Federal law" as specified in Sec. 403(e)(3)(B). Reading the disposition clause in its entirety convinces us that decedent's primary intent was to minimize the estate taxes rather than to limit the marital deduction to the amount that was the maximum (the greater of one-half of the adjusted gross estate or $250,000) permissible under the law in effect at the time he executed the will. Thus, to apply the limitation of Sec. 403(e)(3) would be contrary to decedent's intent and contrary to that section's purpose of preserving the intent of the testator.
15
The will provisions at issue in Estate of Neisen v. Commissioner, 89 T.C. 939 (1987), aff'd, 865 F.2d 162 (8th Cir.1988), relied on by the Tax Court, are closely analogous to those of the trust in the case at bar. In Neisen, the will provided that decedent's spouse was to receive the lesser of the maximum marital deduction or the minimum marital deduction which would "result in no federal estate tax." In construing this provision of the will, the Tax Court determined
16
"[t]he formula marital deduction provision in decedent's will is not, in the words of act section 403(e)(3)(B), 'a formula expressly providing that the spouse is to receive the maximum amount of property qualifying for the marital deduction allowable by Federal law'; rather, it is a formula expressly providing that the spouse is to receive the minimum amount necessary to ensure that decedent's estate pays the least amount of Federal estate tax."
17
Id. at 942. Recognizing that the purpose of Sec. 403(e)(3) was to preserve the intended effect of the testamentary provisions of the will, the court concluded that decedent's will qualified for an unlimited marital deduction.
18
Other cases finding a formula marital deduction clause within the contemplation of Sec. 403(e)(3) are distinguishable from this case. In each, the wills contained a standard marital deduction formula clause specifically indicating that the decedent's intent was that the spousal bequest be dependent upon the maximum marital deduction. See Liberty Nat'l Bank & Trust Co. v. United States, 867 F.2d 302; Estate of Christmas v. Commissioner, 91 T.C. 769 (1988); Estate of Bauersfeld v. Commissioner, 55 T.C.M. (CCH) 891 (1988); Estate of Blair v. Commissioner, 55 T.C.M. (CCH) 1246 (1988).
19
We disagree with the Commissioner's assertion that any formula clause is a maximum marital deduction formula clause for purposes of Sec. 403(e)(3). Congress desired to carry out a decedent's intent. If it can be discerned from the will that decedent would have desired the unlimited marital deduction permitted by ERTA, the limitation was not intended to apply. Because decedent here expressly bequeathed an amount to achieve a minimum payment of federal estate taxes, we conclude that decedent's intent was clearly expressed and the will does not contain a maximum marital deduction formula clause within the meaning of Sec. 403(e)(3).
20
AFFIRMED.
1
Colorado, decedent's domicile at death, has not passed legislation regarding maximum marital deduction formula clauses
|
239 F.2d 280
Elizabeth Kley CRISCUOLO, Plaintiff-Appellee,v.UNITED STATES of America, Defendant, and Audrey Schmuck ZochLinde, Defendant-Appellant.
No. 11771.
United States Court of Appeals Seventh Circuit.
Dec. 18, 1956.Rehearing Denied Jan. 14, 1957.
James E. Hastings, Michael A. Gerrard, Erving S. Sternberg, Chicago, Ill., for appellant.
Clarence Kammermann, Robert Tieken, U.S. Atty., Chicago, Ill., for appellee.
Before DUFFY, Chief Judge, and MAJOR and LINDLEY, Circuit Judges.
DUFFY, Chief Judge.
1
This is an action to recover under a National Service Life Insurance policy. Sergeant Irvin Henry Zoch was the deceased soldier. On February 9, 1948, while serving in the armed forces of the United States and stationed at Chanute Air Force Base, Illinois, Sergeant Zoch took out a $10,000.00 National Service Life Insurance policy on his life, naming his mother, the plaintiff herein, as beneficiary, and his half-sister as contingent beneficiary. On May 12, 1951 Sergeant Zoch and Audrey Schmuck were married. She survived her husband and her name is now Linde. By order of the Court, pursuant to Sections 455 and 817 of Title 38 U.S.C.A., Mrs. Linde was made an additional defendant, and in this action claims the proceeds of the policy as a substituted beneficiary.
2
The District Court held that the widow, Audrey Linde, had failed to establish, that a change in the beneficiary of Zoch's policy had been made, and judgment was entered in favor of the plaintiff. This appeal followed.
3
In this type of case the person who claims to be the substituted beneficiary of a National Service Life Insurance policy has the burden of proving an intention on the part of the insured to change the beneficiary, plus some affirmative act to carry out that change. Prose v. Davis, 7 Cir., 177 F.2d 478; Moths v. United States, 7 Cir., 179 F.2d 824.
4
All of the witnesses at the trial gave testimony which supported the claim of the widow, Audrey Linde. Why this testimony was not controlling we are not advised. In the trial court's memorandum it is stated: 'Witnesses were produced in support of the widow's claim but the evidence fell far short of establishing the fact that a change in the beneficiary had been made.' There is nothing in the findings of fact and conclusions of law or memorandum to indicate why none of the witnesses were entitled to belief.
5
Two of the witnesses were Audrey Linde and her mother, Ruth Schmuck. Among other things they testified that Audrey had known Zoch four and a half years before she married him on May 12, 1951 at the Mont Clare Congregational Church in Chicago. Zoch's mother had been strongly opposed to the marriage. Zoch told Audrey and her mother that his mother had evicted him. There was other testimony showing a hostile feeling between Zoch and his mother. Zoch stated on the Sunday before he went back to camp the last time, that he was going to make Audrey the beneficiary of his insurance policy, and that he would speak to Yelvington, the Company Clerk, about making the change.
6
This testimony, if credible, would prove an intent on the part of Zoch to change the beneficiary of his insurance policy. Of course, the widow and her mother were interested witnesses. If such testimony were not corroborated, such interest in the outcome of the trial might destroy or at least severely weaken their testimony.
7
Benita Scheneker was another witness. She had known Audrey for some years before Audrey married Zoch. She and the boy who became her husband, had doubledated with Zoch and Audrey. She testified that in April, 1951, Zoch spoke of the strained relations between his mother and him, and further that Zoch stated he was going to change the beneficiary of his insurance policy to Audrey.
8
The other witness was Leonard Yelvington who, at the time of the trial, was a student at Florida Southern College. He had been Chief Clerk of the Air Force Band, Chanute Air Force Base, Illinois, and Zoch was a member of that Company. It was part of Yelvington's duties to take care of personnel matters and to assist soldiers in his organization in making out various forms such as changes in beneficiaries in National Life Insurance policies. He was a close friend of Sergeant Zoch, but had met Audrey only once before the date of the trial, and that was after the date of Sergeant Zoch's death.
9
Yelvington testified that on the day before Zoch was stricken with the illness which caused his death about a week later, Zoch brought to him a piece of paper upon which Zoch had written the names of his wife and her mother, and stated that he desired to have them named as beneficiaries of his insurance policy. Yelvington told Zoch that he was quite busy at the moment, but he took the paper and thereafter typed up on the appropriate form a change in beneficiaries so that Audrey, the wife, would be the beneficiary and her mother the contingent beneficiary. He expected Zoch to be in to sign the form, and retained it in the out-box on his desk, but that evening Zoch was stricken and never recovered, and hence the form never was signed. Yelvington testified that later he sent the form in to the Veterans' Administration. From other evidence it was disclosed that the Veterans' Administration allowed the claim of Audrey Zoch Linde, but when the suit was started by the plaintiff herein, the Government disclosed the conflicting claims under this policy, and asked for a determination by the Court.
10
Ordinarily this Court is not concerned with the credibility of witnesses. That is the function of the trial court. In the case at bar, the trial court said nothing to indicate that it did not believe any of the four witnesses, but it is difficult to comprehend why it disallowed the claim of Audrey Zoch Linde unless for some reason undisclosed by the record the judge refused to believe any of the witnesses, two of whom were disinterested.
11
One clue to the determination of the Court may be the statement in the memorandum that 'the evidence fell far short of establishing the fact that a change in the beneficiary had been made.' If, by that statement, the Court was of the view that the change in beneficiary form had to be completed in order to affect such change, that might be an explanation of the decision, but it would be an incorrect application of pertinent law.
12
The applicable rule is stated in two previous decisions of this Court. In Prose v. Davis, 177 F.2d 478, at page 481, this Court said: 'Variously stated, many courts have adopted the rule that in cases involving change of beneficiary in military service insurance policies they will brush aside legal technicalities in order to effectuate the manifest intent of the insured, and if the insured has expressed an intention to change the beneficiary originally named in his policy and done an affirmative act to effectuate the change, leaving only ministerial acts to be performed by the insurer, they will treat as done that which should have been done and give effect to his intent.'
13
In Moths v. United States, 179 F.2d 824, at page 826, we said: 'Of course, a mere intent to change the beneficiary is not enough. A mere statement, oral or written, that such a change has been made is not sufficient unless followed by appropriate affirmative action, Butler v. Butler, 5 Cir., 177 F.2d 471, but it has been held that the intention, desire, and purpose of the soldier should, if it can reasonably be done, be given effect by the courts, and that substance, rather than form, should be the basis of their decisions. The clearly expressed intention and purpose of the soldier should control, and should not be thwarted by the fact that all the formalities for making this purpose effective may not have been complied with.'
14
A case quite similar to the case at bar is Zabor v. United States, D.C.W.D.N.Y., 113 F.Supp. 287, affirmed sub. nom. Zabor v. Siejak, 2 Cir., 212 F.2d 440. In that case, as here, there was testimony of a fellow soldier as to instructions to the proper authorities to change the beneficiary, and the forms were filled out and signed. In that case the forms were never found but the change in beneficiary was upheld.
15
While it is true that in the case at bar the form for change of beneficiary was not actually signed by the soldier, it is apparent that the only reason it was not signed was Zoch's sudden illness. After being stricken he was, apparently, in no condition to transact any business before the day of his death.
16
Yelvington's testimony clearly established that the names appearing in the unsigned form were given to him on a piece of scratch paper, which had been written out in Sergeant Zoch's handwriting. His testimony was 'He brought in to me a piece of scratch paper showing the beneficiaries he desired to have on his policy.' We think this case is even stronger than Prose v. Davis, 7 Cir., 177 F.2d 478, and there we reversed the decision of the trial court even though there was only indirect or circumstantial evidence of an affirmative act. Here we think the soldier's intention was clearly proved as well as the affirmative act which he took to make the change effective.
17
Judgment reversed and remanded for further proceedings not inconsistent with this opinion.
|
330 F.Supp. 741 (1971)
Fred L. GADDIS and Mary F. Gaddis, Plaintiffs,
v.
UNITED STATES of America, Defendant.
GADDIS BREEDER FARMS, INC., Plaintiff,
v.
UNITED STATES of America, Defendant.
Civ. A. Nos. 4420, 4421.
United States District Court, S. D. Mississippi, Jackson Division.
June 18, 1971.
*742 James P. Knight, Jr., Louis H. Watson, Jackson, Miss., for plaintiffs.
Jack Warren, Tax Division, Department of Justice, Washington, D. C., for defendant.
NIXON, District Judge.
MEMORANDUM OPINION
The above styled and numbered income tax recovery cases filed pursuant to Title 28 U.S.C. § 1346(a) were consolidated by this Court pursuant to the agreement of all parties hereto inasmuch as the parties plaintiff are related through stock ownership, all issues arise from examination of income tax returns of the corporate plaintiff in Civil Action No. 4421.
These cases were tried to the Court on May 17, 1971 at Jackson, Mississippi and pursuant to the pleadings filed herein, all evidence adduced, the contents of the agreed Pre-Trial Order submitted and filed herein and the memoranda of authorities filed by the parties, the *743 Court in this Memorandum Opinion makes its following Findings of Fact and reaches its Conclusions of Law as required by Rule 52(a), F.R.Civ.P.
Civil Action No. 4420 was instituted by Fred L. Gaddis and wife, Mary F. Gaddis, against the defendant, The United States of America, for the recovery of income taxes paid in the fiscal taxable years 1965 and 1966 in the total amount of $1,885.20 plus interest and costs. In Civil Action No. 4421 the corporate plaintiff, Gaddis Breeder Farms, Inc., sues for recovery of income taxes paid to the defendant for the fiscal year 1966-1967 in the amount of $132,243.16, plus interest and costs. All legal prerequisites to the institution of these actions have been complied with and these actions are, as a procedural matter, properly before this Court.
I.
The basis of the individual plaintiffs' refund claims in Civil Action No. 4420, is as follows: during 1965 and 1966, the plaintiff in Civil Action No. 4421, Gaddis Breeder Farms, Inc., whose sole and only stockholders were the plaintiffs in Civil Action No. 4420, Fred L. Gaddis and Mary F. Gaddis and trusts set up for their children, were the recipients or beneficiaries of the amounts of $280.20 and $1,605.00, respectively, which were paid by the corporation in the fiscal years ending April 30, 1965 and 1966, respectively, to liquidate personal debts of Mr. and Mrs. Gaddis, its principal stockholders. The Commissioner of Internal Revenue determined that these amounts represented personal expenses of Mr. and Mrs. Gaddis and were not deductible corporate expenses, which fact is not disputed; therefore, the Commissioner determined that such amounts represented informal dividends to Fred L. and Mary F. Gaddis, and as a result of this determination additional taxes were assessed and collected from them for 1965 and 1966 which they now seek to recover in view of the fact that on November 13, 1968, pursuant to the following resolution which had been adopted by the Board of Directors of Gaddis Breeder Farms, Inc. on June 8, 1959, the Gaddises repaid Gaddis Breeder Farms, Inc. the $1,885.20 which it had paid out to liquidate the above debts. The above resolution reads as follows:[1]
"It is hereby agreed between this corporation and its officers that in the event any expense made to or by any officer is declared to be a nondeductible item, then the officers shall repay the corporation from his or her personal funds."
The defendant maintains that the $1,885.20 payment constituted informal dividends to the individual plaintiffs and thus disallowed these items as capital expenses of the corporation and taxed them as income to the stockholders. The individual plaintiffs contend that these payments were not intended as and did not constitute dividends but were merely erroneous payments made by the corporation which the individual taxpayers were contractually obligated to repay pursuant to the above resolution which had been signed by them as President and Secretary of the corporation and which they repayed on November 19, 1968.
Thus, in Civil Action No. 4420 the only issue for decision is whether the amounts reclassified from corporate expense to dividends by the Internal Revenue Service constitute taxable income to the individual majority stockholders despite their obligation to repay these amounts pursuant to the above resolution adopted several years before.
This Court is of the opinion and finds that the resolved obligations to return or repay these funds was binding on the plaintiffs in Civil Action No. 4420 inasmuch as the stockholders signed the minutes in question as Directors of the corporation and therefore were in no position to deny the existence or validity thereof and which they did honor by reimbursing Gaddis Breeder Farms, Inc., *744 the plaintiff in Civil Action No. 4421, in the amount of its disallowed expense. Because of the fact that the corporation was quite large and growing and its activities were diversified and the financial interest of the individual plaintiffs were complicated, it was reasonably foreseeable either that inadvertent errors might be made in accounting for expenditures made by the above named various business entities, comprising "Gaddis Industries", or that judgmental factors might be questioned to the extent that income tax deductions might be subsequently disallowed.
In Healy v. Commissioner of Internal Revenue, 345 U.S. 278, 73 S.Ct. 671, 97 L.Ed. 1007 (1953), an individual taxpayer received a salary from a closely held corporation and reported it in full in his income tax return for the year in which it was received. In a subsequent year it was determined that the salary was excessive and the taxpayer was required as transferee to make payments on tax deficiencies of the corporation for prior years. The Supreme Court, in holding that the taxpayer's income tax for the year in which he received the excessive salary may not be recomputed so as to exclude from his income that year the part of his salary held to be excessive and which resulted in his transferee liability inasmuch as he received the salary under a "Claim of Right", and was required to report it as income and to pay a tax thereon, stated:
"One of the basic aspects of the federal income tax is that there be an annual accounting of income (cases cited in footnote 6). Each item of income must be reported in the year in which it is properly reportable and in no other. For a cash basis taxpayer, as these three are, the correct year is the year in which received (cases cited in footnote 7).
"Not infrequently, an adverse claimant will contest the right of the recipient to retain money or property, either in the year of receipt or subsequently. In North American Oil Consolidated v. Burnet, 1932, 286 U.S. 417, 52 S.Ct. 613, 76 L.Ed. 1197, we considered whether such uncertainty would result in an amount otherwise includible in income being deferred as reportable income beyond the annual period in which received. That decision established the claim of right doctrine `now deeply rooted in the feder tax system.' The usual statement of the rule is that by Mr. Justice Brandeis in the North American Oil opinion: `If a taxpayer receives earnings under a claim of right and without restriction as to its disposition, he has received income which he is required to return, even though it may still be claimed that he is not entitled to retain the money, and even though he may still be adjudged liable to restore its equivalent.' 286 U.S., at page 424, 52 S.Ct. at page 615.
"* * * There is a claim of right when funds are received and treated by a taxpayer as belonging to him. The fact that subsequently the claim is found to be invalid by a court does not change the fact that the claim did exist. A mistaken claim is nonetheless a claim, United States v. Lewis, 1951, 340 U.S. 590, 71 S.Ct. 522, 95 L.Ed. 560.
* * * * * *
"* * * The Government concedes that each of these taxpayers is entitled to a deduction for a loss in the year of repayment of the amount earlier included in income * * * Congress has enacted an annual accounting system under which income is counted up at the end of each year. It would be disruptive of an orderly collection of the revenue to rule that the accounting must be done over again to reflect events occurring after the year for which the accounting is made, and would violate the spirit of the annual accounting system. This basic principle cannot be changed simply because it is of advantage to a taxpayer or to the Government in a particular case that a different rule be followed." 345 U.S. 281-282, 284-285, 73 S.Ct. 673-674, 675.
*745 This "claim of right" doctrine has also been discussed by the United States Court of Appeals for the Ninth Circuit in Noble v. C. I. R., 368 F.2d 439 (C.A. 9, 1966), in which the Court affirmed the Tax Court which had disallowed as business expenses for income tax purposes certain payments made to the sole shareholders of a corporation which were found to be of a personal nature rather than a corporate expense. Subsequent to this determination the corporation passed a resolution requiring the shareholders to reimburse it for these admitted nondeductible payments. The Court stated:
"Dividends may be formally declared or they may be constructive. The fact that no dividends are formally declared does not foreclose the finding of a dividend-in-fact. (Cases cited are omitted).
* * * * * *
"Clearly, the payments in question here are of the type that would fall in the category of constructive dividends * * * The question then arises whether after a determination that payments to the sole stockholders were for personal expenses, a subsequent act of the petitioners can convert what would then have been a taxable dividend into a repayment of a prior valid or outstanding loan from the sole shareholders to the corporation.
"Intention of the parties is not controlling. The fact, as stipulated by the parties, that the corporation and the petitioners did not intend these payments to constitute dividends, is not decisive. We said in Clark v. C. I. R., supra, 266 F.2d [698] p. 711,
`To constitute a distribution taxable as a dividend, the benefit received by the shareholder need not be considered as a dividend either by the corporation or its shareholders, declared by the board of directors, nor other formalities of a dividend declaration need be observed, if on all the evidence there is a distribution of available earnings or profits under a claim of right or without any expectation of repayment.' Healy v. Commissioner [of Internal Revenue], supra; Biltmore Homes, Inc. v. C. I. R. [4 Cir., 288 F.2d 336], supra.
* * * * * *
"* * * Inasmuch as it is agreed that the expenses for which they were reimbursed were personal in nature, and not connected with the corporate business, the moneys they received were dividends and should have been included in their tax returns (cases cited are omitted).
* * * * * *
"The federal income tax program is based on a system of annual reporting. Burnet v. Sanford & Brooks Co., 282 U.S. 359, 51 S.Ct. 150, 75 L.Ed. 383. Under this system, an individual's income tax return is supposed to reflect all income activity of the one reporting year. If one year's income could be changed by events occurring in subsequent years, there would never be any finality in the system. United States v. Lewis, 340 U.S. 590, 71 S. Ct. 522, 95 L.Ed. 560, rehearing den. 341 U.S. 923, 71 S.Ct. 741, 95 L.Ed. 1356; United States v. Lesoine, 9 Cir., 203 F.2d 123; Phillips v. C. I. R., 9 Cir., 262 F.2d 668. Returns could be reopened and altered, to the confusion of fiscal policy and revenue collection. Thus, the present scheme of providing finality for each reporting period, would be violated were the taxpayers permitted to alter the effects of earlier income periods by their subsequent acts. (Cases cited are omitted). To permit otherwise would allow the taxpayer to `second-guess' the government in instances where more than one treatment of a transaction is possible, `And, it is not given to a taxpayer to lift the federal tax-hand from income, which he once received in absolute right, by an attempt thereafter to alter its legal status through modification of the agreement out of which *746 it arose.' Leicht v. Commissioner of Internal Revenue [8 Cir., 137 F.2d 433], supra, p. 435."
Based on the foregoing authority, this Court finds and is of the opinion that the payments by Gaddis Breeder Farms for the benefit of Fred L. Gaddis and Mary F. Gaddis in the amounts of $280.20 and $1,605.00 in the fiscal years ending April 30, 1965 and 1966 constituted constructive dividends which they received the benefit of under a "claim of right" and thus were properly taxable to them for those two years, despite the fact that they reimbursed the corporation during the fiscal year, 1968-1969 for which taxable year they are entitled to a deduction for the repayment of the $1,885.20.
II.
In Civil Action No. 4421, the three issues presented for this Court's determination are whether the corporate plaintiff, Gaddis Breeder Farms, Inc., is entitled to recover from the defendant, the United States, any or all of the additional income taxes assessed against it for the fiscal year 1966-1967, plus interest and costs, as a result of its payment of additional income taxes, penalty and interest which it contends were erroneously and illegally assessed and collected by the District Director of Internal Revenue after its filing of its corporate United States income tax return on July 15, 1967 for the fiscal year ending April 30, 1967. These taxes were subsequently paid and their following claim for refund was refused or disallowed: (1) on or about July 22, 1968 plaintiff was assessed additional income taxes in the amount of $39,174.47, penalty in the amount of $1,958.72 and interest in the amount of $1,847.57, all of which was paid on July 22, 1968; (2) the assessment on October 31, 1968 of additional income taxes in the amount of $109,668.92, penalty in the amount of $5,483.45, and interest in the amount of $8,531.64. Plaintiff alleges that the foregoing additional income taxes, penalty and interest were erroneously and illegally assessed and collected to the extent of $132,343.16 and has filed its suit herein for the recovery thereof, together with legal interest.
Specifically, the corporate plaintiff contends that: (1) the Internal Revenue Service improperly disallowed as expense $228,476.90 of the $247,132.50 which it actually paid during the fiscal year ending April 30, 1967 for feed used by its trade or business of production of marketable chickens and eggs, based on the fact that delivery of most of this feed was made in the following fiscal year; (2) that its purchase of watering troughs, valves, waterers, feed hoppers, nests and egg baskets, purchased and paid for in its fiscal year ending April 30, 1967, constituted expendable supplies rather than capital expenditures and therefore the amount of $11,236.97 (although the amount of $14,232.81 was sued for it was stipulated at trial that this amount was excessive by $2,995.84) paid therefor was deductible in the year of payment and improperly disallowed as corporate expense; and (3) that it did all that a reasonable and prudent person or entity could do to insure accuracy in recording and reporting its financial transactions, and therefore the imposition of a negligence penalty against it in the amount of $7,442.17 was not warranted.
On the other hand, the defendant contends that the payment for the chicken feed was not an ordinary or necessary expense but was merely a deposit or in the alternative, it constituted an unnecessary and unusual advance payment which the plaintiff was not required to make and through which it secured no economic, financial or other business benefit and thus did not constitute ordinary and necessary expense paid or incurred during the taxable year in carrying on any trade or business. The Government further contends that if these payments were allowed as a tax deduction for the fiscal year ending April 30, 1967, plaintiff's taxable income therein would be materially distorted. The defendant takes the position *747 that the amounts paid for the various items including the valves, troughs, nests, feed hoppers, and egg baskets did not constitute ordinary and necessary business expense paid or incurred during the taxable year in question in carrying on the plaintiff's trade or business and that the cost of these items was properly capitalized rather than be treated as expenses. Finally, the defendant Government urges that the plaintiff underpaid its federal income tax for its fiscal year ending April 30, 1967 and that at least a part of the underpayment was due to its negligence or intentional disregard of applicable rules and regulations, and thus the penalty was properly assessed.
Gaddis Breeder Farms, Inc. is a corporation organized and existing under Mississippi law with its principal place of business at Forrest, Scott County, Mississippi. Its business is farming, and more specifically, the production of marketable chickens and eggs. All of its capital stock issued and outstanding was owned during the taxable year in question by Fred L. Gaddis, his wife, Mary F. Gaddis, and trusts for the benefit of their children. This corporation consistently utilized the cash receipts and disbursement system of accounting and filed its United States income tax returns in accordance therewith for each fiscal year ending April 30. The issues involved herein arose from adjustments made by the Internal Revenue Service on plaintiff's income tax return which was timely filed for the fiscal year ending April 30, 1967. The plaintiff corporation, whose President is Fred L. Gaddis, the Mayor of Forrest, Mississippi, was organized in May of 1959 and its principal business is producing broilers and farm-related items. It owns and operates 32 farms as well as 11 leased farms and 27 contract farms. The company-operated farms comprise approximately 3,000 acres, and each year approximately 350 flocks of chickens are produced or grown, totalling approximately 12 to 13 million broilers per year. Normally, approximately 10 weeks is required to produce or raise a broiler to marketable size. The volume of sales of Gaddis Breeder Farms, Inc. during the fiscal year in question was $5,909,654.63. Its purchases for baby chicks and feed during that year approximated $4,830,507.44, the latter consisting principally of yellow corn and soybean oil meal in addition to vitamin packages, fishmeal, alfalfa meal and other ingredients. The plaintiff corporation obtained its feed for these chickens during the fiscal year ending April 30, 1967 from areas all over the United States and from some foreign countries, and obtained its corn and soybean oil meal from local distributors, brokers, Paymaster Oil Mills, Cargill, Inc. and other companies located primarily throughout the Southern part of the United States. Gaddis Feed Mill supplied the feed that was sold to the plaintiff corporation until it was purchased by the plaintiff on December 31, 1966 in order to make it an integral part of Gaddis Breeder Farms' operations. The plaintiff acquired the majority of the assets of Gaddis Feed Mill and assumed all of its liabilities, including those incurred in the purchase of feed, and including some of that in issue herein. Fred L. Gaddis' brother, Taylor Gaddis, administered and ran the feed mill and had authority to contract for and on behalf of both Gaddis Feed Mill and Gaddis Breeder Farms at all times in question herein. Both of these corporations as well as several other corporations and companies owned by the Gaddis family operated under the non-recorded trade name of "Gaddis Industries".
The first issue presented with reference to the refund claim of Gaddis Breeder Farms, Inc. is whether it was entitled to deduct payments made for chicken feed during the taxable fiscal year ending April 30, 1967, or whether it must defer these costs until the following fiscal year during which the feed was used.
On October 20, 1966, "Gaddis Industries" entered into a contract with the grain division of Cargill, Inc. (Cargill) for the purchase of 420,000 bushels of corn to be delivered to Gaddis Industries *748 at Forrest, Mississippi. Cargill issued to Gaddis Industries two documents entitled "Contract of Sale" relating to a total of 182,000 bushels of yellow corn to be delivered to and paid for by the plaintiff corporation. One "Contract of Sale" covered 122,000 bushels approximately half of which was to be delivered in April, 1967, and half in May, 1967 at a price of 5¾ cents above the price of May corn fixtures on the Chicago Board of Trade. The second "Contract of Sale" covered 60,000 bushels to be delivered in June, 1967 at a price of 6¼ cents over the July corn fixtures on the Chicago Board of Trade. On November 1, 1966, Cargill issued its "Confirmation of Pricing" with respect to the above sales contracts, stating a cash price of $1.52 5/8 cents for the 122,000 bushel lot. In all, Cargill issued four documents to "confirm sale" of the total of 420,000 bushels of corn to Gaddis Industries of Forrest, Mississippi and the contracts of sale bore the following respective numbers: R-15219, R-15220, R-15221 and R-15222. Substantially all of the corn referred to in these contracts was delivered to and paid for by the plaintiff, Gaddis Breeder Farms, Inc.
On November 1, 1966, Cargill issued its confirmation of pricing with respect to the corn referred to in Contracts Nos. R-15220 and R-15221 respectively reflecting a cash price of $1.52 5/8 cents for the 122,000 bushel lot and $1.54¾ cents for the 60,000 bushel lot.
On April 18, 1967, Cargill issued its Invoice No. G-30145 relating to 66,000 of the 122,000 bushel lot, the portion to be shipped in May of 1967. The total amount of this invoice was $100,732.50, and on April 26, 1967 the plaintiff corporation issued to Cargill its Check No. 9654 in the same amount to pay for the above 66,000 bushels of corn. Of the corn which the plaintiff corporation paid for with its $100,732.50 check, $18,655.60 worth was delivered prior to the close of the fiscal year, April 30, 1967. The remainder of the corn paid for was delivered during May, 1967.
On April 27, 1967 Cargill issued its Invoice No. G-30199 relating to 40,000 of the 60,000 bushels of corn which was the subject of Contract No. R-15221, and the plaintiff issued its Check No. 9677 to Cargill in the amount of $61,900 in payment of these 40,000 bushels. All of the corn paid for with Check No. 9677 was delivered to plaintiff in May and June of 1967.
On April 24, 1967, the Paymaster Oil Co., a division of Anderson, Clayton and Company (Paymaster) another feed supplier, issued its "Confirmation of Sale" No. 2015-J to the plaintiff corporation of 1,000 tons of soybean oil meal at a "provisional price" of $84.50 per ton, with payment to be made upon receipt of its invoice, shipments to be made in 250 ton lots during the first, second, third and fourth weeks of May, 1967. The "Confirmation of Sale" provided that the "price was to be set prior to each week's shipment with a net adjustment thereof to be made at the completion of the contract". On April 29, 1967, plaintiff issued to Paymaster its check in the amount of $84,500.00 in payment for the soybean oil meal referred to in the above "Confirmation of Sale", all of which was delivered in May and June of 1967.
In its Federal Income Tax Return filed for the fiscal year ending April 30, 1967, the plaintiff, Gaddis Breeder Farms, Inc. claimed as business expense deductions (through its purchases account) the $162,632.50 it paid for the corn which was the subject of Cargill Invoices Nos. G-30145 and G-30199 and the $84,500 it paid to Paymaster for the soybean oil meal which was the subject of Paymaster's Confirmation of Sale No. 2015-J. Upon an audit of this return, the Commissioner of Internal Revenue (Commissioner) disallowed these deductions except for $18,655.00 representing the cost of corn paid for and actually delivered within the April 30, 1967 fiscal year. The latter was part of the corn referred to in Cargill Invoice No. G-30145 and payment therefor was included in plaintiff's Check No. 9654 for *749 $100,732.50. Although the evidence shows that the above contracts were executed by "Gaddis Industries", this was a trade name used for many years by the conglomeration of Gaddis owned businesses, including the plaintiff, Gaddis Feed Mill was the only Gaddis entity or company operating under this trade name which at that time was purchasing feed.[2] As previously stated, Gaddis Feed Mill was purchased by plaintiff, Gaddis Breeder Farms, Inc. on December 31, 1966, at which time the plaintiff assumed all of the Feed Mill's obligations and liabilities, and in fact did comply with the terms and provisions of these two Cargill contracts.
The two Cargill contracts in question, R-15220 and R-15221, provided that "Title and risk of loss shall pass to the buyer at the time each shipment hereunder is directed to buyer or his Order or for his notification, or if in transit at the time this contract is made at the time shipment is so redirected." Exhibit D-7 evidences that shipments relating to Contract R-15220 had been made before the end of plaintiff's fiscal year, April 30, 1967 and thus performance was substantially completed, and that title to 68,223.36 of the 122,000 bushels of corn had passed to plaintiff at that time, at a price of $1.52 5/8 cents per bushel or $104,125.52.
The evidence is uncontradicted that all of the contracts in question were ultimately performed in full by the parties thereto and there was no attempt at any time to withdraw or seek a refund of any part of the payments made in advance of shipment. It is further undisputed that the plaintiff and its President, Fred Gaddis, at all time considered these contracts to be valid and binding. After these contracts were entered into, the plaintiff purchased corn at prices as low as $1.40 per bushel in May, 1967;[3] thus, if the Cargill contracts had not been binding and so considered by the plaintiff, it could, at an average difference of $.12 per bushel, have possibly saved over $21,000 on these 182,000 bushel transactions by cancelling and buying its corn locally.
It is therefore evident that title had passed to a material portion of the corn by April 30, 1967; that plaintiff and Cargill had in good faith entered into binding contracts of sale with reference to the remainder; and that the contracts were fully performed according to their terms. The payments made by the plaintiff to Cargill in the amounts of $100,732.50,[4] and $61,900[5] on April 26, 1967 and April 29, 1967, respectively, were not refundable deposits.
With reference to the soybean oil meal purchased by the plaintiff from Paymaster, the evidence is clear that a binding contract[6] was executed by the parties thereto on April 24, 1967, that payment of $84,500 was made by the plaintiff on April 29, 1967[7], and that delivery was subsequently made by Paymaster during May, 1967.[8] In the absence of contract provisions to the contrary, title passed upon execution of the Paymaster contract to plaintiff's pro rata share of the fungible mass in the storage bins of Paymaster.[9]
*750 All of the elements required to bind both parties are present in the above three bilateral contracts inasmuch as there was mutual assent of the parties. Initially there was a promise for a promise, but before the end of the fiscal year in question there had been payments by plaintiff which served as consideration, and there was a partial delivery of corn purchased under one of the contracts with Cargill prior to the end of the fiscal year. The parties had the legal capacity to contract, the agreement was in writing, the objects of the contract were lawful, and neither party was in a position to deny nor did deny the binding effect of the contracts, but rather, both performed in accordance therewith at a time when the plaintiff maintained its records on the cash receipts and disbursements method of accounting, which latter fact is neither contradicted nor denied by the defendant. Also the defendant agreed and stipulated in the record that the contracts in question were binding on the parties thereto.
The delivery of the corn and soybean oil meal was contracted for by the plaintiff well in advance of delivery and of the end of its April 30, 1967 fiscal year, and it was paid for in full by the plaintiff, which had consistently utilized the cash receipts and disbursement system of accounting, prior to the end of its 1967 fiscal year although a substantial amount of the feed was delivered within the first two months of its next fiscal year. It is undisputed in the record and the Court finds that plaintiff placed its Order through Mr. Gaddis well in advance primarily because of his reliance on various financial publications which forecast an imminent increase in the price of feed or grain and the probable shortage thereof, including the October, 1966 issue of The Farm Journal,[10] an accepted, reputable and usually reliable publication which projected the general farm outlook. These predictions caused the plaintiff concern because of the necessity for its providing adequate feed for its presently owned chickens and those which it planned to produce during the following year.
It is further undisputed that the total storage capacity of Gaddis Feed Mill was 25,000 bushels of corn and less than 100 tons of soybean oil meal, making it impossible for the plaintiff to accept delivery of and adequately and safely store the full amount of the feed it had contracted to purchase.
This Court finds that although Fred L. Gaddis, President of the plaintiff corporation, was aware of the fact that payment for the corn and soybean oil meal in April, 1967 would create a tax deduction in the amount so paid within that fiscal year, nevertheless this was not his purpose in the timing of the purchase and payment therefor. However, even if such were the case, the defendant's argument that payments in question cannot be considered "ordinary and necessary" because they were tax-motivated, rather than made to acquire an economic benefit, has been rejected by the United States Court of Appeals for the Tenth Circuit which reversed the Tax Court in Cravens v. Commissioner of Internal Revenue, 272 F.2d 895 (C.A.10, 1959) in which the Court observed that "Cravens concedes that the tax implications of the transaction influenced his conduct. Tax motive is unimportant if the taxpayer does that which the law permits."
As previously pointed out, the predictions made with reference to the feared increase in the price of corn proved to be unfounded inasmuch as its price decreased in May, 1967 from the price of $1.52 5/8 cents per bushel and $1.54¾ cents per bushel paid under the two Cargill contracts to $1.40 and $1.41 per bushel in May, 1967, at which price plaintiff purchased additional yellow corn. Therefore, had the contracts with Cargill been subject to cancellation, plaintiff could and probably would have attempted to do so to save more than *751 $21,000 by the purchase of corn on the open market.
The defendant contends that there was no binding contract between plaintiff and Paymaster with respect to the purchase of the soybean oil meal because the "Confirmation of Sale" called for a "provisional price" of $84.50 per ton with all shipments to be made during May, 1967, the first month of the ensuing fiscal year. It contends that pursuant to the terms of this agreement, the actual price was to be set prior to each week's shipment and a net adjustment on the price was to be made at the completion of the contract, "and thus it can be clearly seen that with respect to the transaction with Paymaster, the actual price of the feed was not to be set until the following fiscal year and plaintiff could be entitled to a refund from Paymaster during the later year". The Court rejects this contention of the Government inasmuch as it finds that as in the case of the two Cargill contracts for the purchase of corn, this was also a binding contract because the quantity of soybean oil meal which Paymaster was obligated to sell to plaintiff and plaintiff was obligated to purchase from Paymaster was specific and definite, a fixed price was established therefor which could be varied according to the agreement of the parties to reflect the prevailing market price at the time of the actual delivery and also in the event that the specified 50% protein content varied to any appreciable extent. This was a binding agreement between the parties and they were free to stipulate its terms and provisions within certain specified limits, which they did. This same argument of the Government was rejected by the Tenth Circuit in Cravens, supra, in the following language:
"Under the contract the dates of delivery were not fixed, the prices were to be those prevailing on the dates of delivery, the quantities could have been varied `to any reasonable extent; and if the advance payment had exceeded the ultimate cost, Cravens would have been entitled to a refund. These factors are urged as establishing that there was no firm contract of sale and purchase and, hence, no obligation to pay the $50,000 in 1953. The answer is that the contract was binding and carried out by the parties.
* * * * * *
"* * * In Ernst [32 T.C. 181] there was no condition such as the drought which confronted Cravens and no hazard of a distress liquidation. The fact that Cravens had the possibility of a refund if the cost of the 745 tons of feed was less than $50,000, an eventuality which did not occur, did not make his contractual obligation any less binding than that of Ernst. Cravens was bound to buy and did buy the agreed quantity. By his advance payment Cravens, unlike Ernst, secured the promise of preferred deliveries." 272 F.2d at 898, 900.
The adjustment of price provision in the Paymaster contract therefore was equivalent to the provision that "the prices would be those prevailing on the dates of delivery" which in Cravens was found to constitute a binding agreement. Unlike the situation in Cravens where "the quantities could have been varied to any reasonable extent", plaintiff herein was unconditionally obligated to accept 1,000 tons of soybean oil meal and therefore its contract with Paymaster, like its contracts with Cargill, was binding. Therefore, the amount paid was an expense, not a deposit, and the contracts contained the requisite specificity of quantity and quality of the feed found in the case of Estate of Frank Cohen v. Commissioner, T.C. Memo. 1970-272 (Sept. 24, 1970).
It is this Court's opinion that the disposition of plaintiff's claim for refund herein for the amounts paid for the feed in question is supported and controlled by the holdings of the Courts in all of the following and known reported cases on this question.
The issue of deduction of payments for chicken feed purchased in the fiscal *752 year ending April 30, 1967 is governed by § 162(a) of the Internal Revenue Code of 1964 which in part provides:
"Sec. 162 (1954 Code).
(a) In general.There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business including * * *"
The Commissioner of Internal Revenue has in fact provided in his Regulation 1.162-12 that:
"* * * The purchase of feed and other costs connected with raising livestock may be treated as expense deductions insofar as such costs represent actual outlay, but not including the value of farm produce grown upon the farm or the labor of the taxpayer. * * *"
In view of the foregoing, the only question for this Court is when the deduction is allowable. In arriving at this determination, it is important to note that the cash receipts and disbursement method of accounting employed by the plaintiff in maintaining its records and reporting its taxable income is expressly sanctioned by statute. Title 26 U.S.C. § 446(c). Sec. 461(a) of that same Title provides that:
"The amount of any deduction or credit allowed by this subtitle should be taken for the taxable year which is the proper taxable year under the method of accounting used in computing taxable income."
Under the cash receipts and disbursements method of accounting, expenditures are to be deducted in the year in which the payment is actually made. See Regulation 1.446-1(c) (1) (i).
Therefore, the foregoing authorities expressly authorize and sanction the deduction of the feed purchased in the year of payment, which is the fiscal year ending April 30, 1967, unless some exception exists. In this Court's opinion, the only possible exceptions which would defeat the plaintiff's refund claim would be (1) that the amounts paid were not ordinary and necessary business expenses of the plaintiff, (2) that the amounts paid constituted refundable deposits rather than payments made pursuant to binding sales contracts, or (3) that if the amounts of such payments were allowed as tax deductions for the plaintiff's fiscal year ending April 30, 1967, its taxable income for such year would be materially distorted. All three of these exceptions are urged by the defendant herein, and all are found to be without merit by this Court, because of the foregoing and following reasons based upon the facts and cited authorities.
This Court finds that the plaintiffs have proved not only by a preponderance of the evidence, but the overwhelming weight thereof that with respect to the corn purchased from Cargill that title had passed to a material portion thereof by April 30, 1967; that plaintiff and Cargill were subject to binding contracts of sale in respect to the remainder; that plaintiff actually paid the amount that it was obligated to pay under these contracts prior to the end of the fiscal year 1967; that the contracts were fully performed according to their terms; and that there was no refund of any kind made to the plaintiff by Cargill; and that there was no provision contained in any of the two contracts for services to be rendered. With reference to the purchase by plaintiff of the soybean oil meal from Paymaster, there was a binding contract (Exhibit P-9) executed by both parties on April 24, 1967 for the sale of a specified amount of meal pursuant to which plaintiff paid $84,500 on April 29, 1967 (Exhibit P-10). Delivery was subsequently made by Paymaster (Exhibit D-11), and in the absence of a contract provisions to the contrary, title passed on execution of the Paymaster contract to plaintiff's pro rata share of the fungible mass in the storage bins of Paymaster. All of the elements which this Court's Findings and Conclusions with reference to the Cargill transactions are equally applicable to the Paymaster transaction.
*753 This identical issue was considered and decided in the case of another poultry farmer in Ernst v. Commissioner, 32 T.C. 181 (1959). In that case the Commissioner attempted to disallow payments made in 1948 and 1949 in the amounts of $20,532.50 and $110,330.00, respectively, on the grounds that the payments were advances on executory or contingent contracts for future delivery. In that case there was no shortage nor predicted shortage of feed during the relevant years, as there was in the case sub judice; the purchases exceeded the monthly requirements of the petitioner therein; and there was no contractual provision for refund of any part of the payments. The Ernsts borrowed the money to make the payment on those contracts as did the plaintiff in the case sub judice, but unlike the plaintiff here, had adequate storage facilities for full delivery upon payment. Actual deliveries extended over a period of six months in Ernst compared to the period of approximately two months in the case sub judice. The Court in Ernst held the payments to be deductible in the year of payment stating:
"The payments were absolute and petitioner, who reported his income on a cash receipts and disbursement basis, was irretrievably out of pocket the amounts paid, which amounts were obviously expenses incident to `carrying on a trade or business.' In return for these payments, the grain dealer was unconditionally obligated to deliver to petitioner the quantity of feed which the amounts received would pay for at the prices in effect on the dates of delivery. There was no condition as to the obligation itself; the only condition was as to the quantum of the obligation. Similar payments for feed to be used in the spring months of the following year were made by petitioner in December of all years subsequent to the taxable years. This practice does not substantiate the statements of counsel for respondent that `[t]hese transactions have no commercial meaning or sense other than as a tax dodge' and `that to allow such deductions would materially distort petitioner's income.' Indeed, counsel for respondent frankly conceded that although the amounts disallowed in each of the taxable years had not been allowed in any other year, some such adjustments would have to be made in 1949 and the subsequent year in order to prevent the respondent's own action from distorting petitioner's income.
"These circumstances distinguish the instant case from Cravens, 30 T.C. 903.
"Regardless of whether taxpayers are on a cash or accrual basis, the general rule is that deductions are allowable in the year of payment.
"On the record before us, we conclude that the payments here involved were `ordinary and necessary expenses paid or incurred during the taxable year[s] in carrying on [a] trade or business' and were properly deductible by petitioner in the years of payment under section 23(a) (1) (A) of the Internal Revenue Code of 1939.
* * * * * *
"In our opinion the allowance of the deductions taken by petitioner in the taxable years would more clearly reflect his income than their disallowance, and no provision of section 43 of the Internal Revenue Code of 1939 justifies respondent in disallowing such deductions."
The Tenth Circuit, in reversing the Tax Court in the case of Cravens v. Commissioner of Internal Revenue, supra, discussed the same question and reached the same result as did the Court in Ernst. In Cravens the taxpayer paid $50,000 on a contract in 1953 for future delivery of cattle feed which was, in fact, delivered and used in the subsequent year. In reversing the Tax Court which had held the disbursement to be a deposit, rather than payment of an expense which would result in an allowable *754 deduction, the Court of Appeals said:
"Under the contract the dates of delivery were not fixed, the prices were to be those prevailing on the dates of delivery, the quantities could have been varied `to any reasonable extent,' and if the advance payment had exceeded the ultimate cost, Cravens would have been entitled to a refund. These factors are urged as establishing that there was no firm contract of sale and purchase and, hence, no obligation to pay the $50,000 in 1953. The answer is that the contract was binding and carried out by the parties.
* * * * * *
"In the case of farmers and cattle raisers the use of a transactional basis for the computation of income would bring confusion into the federal tax system. The treatment of the cost of seed, fertilizer, and feed purchased in one year for use in the next year is simple if the deduction is allowed when paid if the cash basis applies or when incurred if the accrual basis is used. If each transaction must be analyzed to determine whether a distortion of income will result from the allowance of a business expense deduction, § 43 is, in our opinion, given a meaning which Congress did not intend." 272 F.2d 898, 900.
See also Charles C. and Virginia Miller v. United States (D.C.N.D.Ala.1967).
In Estate of Frank Cohen v. Commissioner, supra, the petitioner had entered into two contracts with a commercial cattle producer under the terms of which he purchased cattle which he contracted to feed and sell. One of the contracts required him to purchase feed from the producer to the extent of $6,300 which he paid in advance, whereas the other contract contained no such provision. He was permitted to deduct the $6,300 paid under the former contract whereas he was disallowed such deduction under the latter. In permitting the $6,300 deduction the Court reasoned as follows:
"This brings us to respondent's second contention with regard to the cattle transactions, i. e., that the payments made for feed were in the nature of deposits and not payments and consequently were not deductible in 1960 but when the actual sale was consummated by delivery of the feed.
"For purposes of this contention, it is necessary to consider the two contracts involved separately. Contract 205 KA provides in paragraph 8 for the purchase of $6,300 worth of feed. Both the quantity and quality of the feed are specified in the contract and the amount charged does not include the performance of any services. There is no provision in the contract entitling Frank to a refund of the excess of the amount paid for the feed. He clearly purchased a given tonnage of feed and should any remain unused at the close of the transaction he had the option of selling it to Anderson or anyone else at the prevailing market value. This cannot be said to be the equivalent of a refund. That no portion of the payment was for services is made clear by the provision in the contract for the payment by the owner (Frank) of 8 cents per day per head for handling and service costs.
"These factors clearly distinguish this case from Lillie, 45 T.C. 54 (1965), affirmed per curiam 370 F.2d 562 (C.A.9, 1966). There, on similar facts, the deduction for feed expense was disallowed in the year the funds were delivered to the seller. In that case the Court put great stress on the fact that the payment included future services in the cost of the feed and the fact that sizeable refunds were received by petitioner. As pointed out above, neither of these crucial factors are present with respect to contract 205 KA, and for this reason Lillie is not controlling.
"We conclude that the specificity of the binding contract is sufficient to justify a holding that the $6,300 paid for the feed was exactly that and not *755 a refundable deposit on feed to be purchased in the future."
The defendant's reliance on Lucas, Commissioner of Internal Revenue v. North Texas Lumber Company, 281 U.S. 11, 50 S.Ct. 184, 74 L.Ed. 668 (1930), Shippy v. United States, 308 F.2d 743 (C.A.8, 1962), and Lillie, et ux v. Commissioner, 45 T.C. 54, affd. per curiam, 370 F.2d 562 (C.A.9, 1966), is misplaced.
In Lucas, the United States Supreme Court merely held that the title and right of possession with reference to timberlands did not pass until 1917, and thus the seller was not entitled to enter the purchase price as income for the year 1916 and to have tax computed on that basis inasmuch as only an executory contract of sale was created by an option given by the seller to the buyer in 1916 at which time the purchaser declared itself ready to close the transaction and pay the purchase price "as soon as the papers were prepared." They were not prepared or executed until 1917.
The Eighth Circuit in Shippy disallowed a claimed expense of the petitioner for the purchase of wet corn or other grain, holding that the partnership did not have a binding contract to purchase this grain, that it did not actually buy it, but only made an advance deposit which would have been refunded upon request; therefore, the disbursement was not an ordinary and necessary expense paid in the year 1957 in the carrying on of its trade or business.
In Lillie, supra, the Court, in disallowing a claimed refund distinguished the facts thereof from Cravens and Ernst, which the Court finds are the same facts distinguishing it from the case sub judice, stated:
"Moreover, while Cravens never received a refund, these petitioners did in essence receive what amounted to substantial refunds in 1961. And, finally, the petitioners' cost of `feed' included valuable and significant services rendered by both of the cattle-feeding companies. That portion of the cost was nothing more than a deposit for the payment of services to be supplied in the future. Such an amount is deductible only when the services are performed.
"The facts which distinguish this case from Ernst are: (1) Petitioners actually received in 1961 what we regard as a refund for feed not consumed; and (2) the price of `feed' here included the cost of valuable services to be rendered in the future."
As stated previously, even if it is assumed, for the sake of argument, which the Court finds not to be the case herein, that the sole motive of the plaintiff in timing the payments under the contracts in question was to obtain a tax deduction in the fiscal year ending April 30, 1967, such assumption or concession would not change the result herein, because it is a well settled and long established principle of law that it is the absolute right of any taxpayer to reduce or avoid taxes by legal means available to him. In Gregory v. Helvering, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935), the Supreme Court enunciated this principle:
"The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted. United States v. Isham, 17 Wall. 496, 506, 21 L.Ed. 728; Superior Oil Co. v. Mississippi, 280 U.S. 390, 395, 396, 50 S.Ct. 169, 74 L.Ed. 504; Jones v. Helvering, 63 App.D.C. 204, 71 F.2d 214, 217."
See also Commissioner v. Tower, 327 U.S. 280, 288, 66 S.Ct. 532, 539, 90 L.Ed. 670 (1946); Jones v. Grinnell, 179 F.2d 873 (C.A.10, 1950); Cravens v. Commissioner of Internal Revenue, supra.
Although the foregoing authorities sustain the position of the plaintiffs with reference to the issue of their right to refund for payment of the chicken feed, since the defendant strenuously urges that the feed purchased by the plaintiff corporation was not an "ordinary and necessary expense", this Court feels it necessary to discuss in more detail why it rejects this argument of the Government. *756 Plaintiff in its Supplementary Brief filed herein has cited two cases which in this Court's opinion amply and adequately deal with the meaning of the words "ordinary and necessary", namely, Welch v. Helvering, 290 U.S. 111, 54 S.Ct. 8, 78 L.Ed. 212 (1933) and Commissioner of Internal Revenue v. Tellier, et ux, 383 U.S. 687, 86 S.Ct. 1118, 16 L.Ed. 2d 185 (1966). In Welch, the United States Supreme Court discussed the words or terms in question in the following language:
"We may asume that the payments to creditors of the Welch Company were necessary for the development of the petitioner's business, at least in the sense that they were appropriate and helpful. McCulloch v. Maryland, 4 Wheat. 316, 4 L.Ed. 579. He certainly thought they were, and we should be slow to override his judgment. But the problem is not solved when the payments are characterized as necessary. Many necessary payments are charges upon capital. There is need to determine whether they are both necessary and ordinary. Now, what is ordinary, though there must always be a strain of constancy within it, is none the less a variable affected by time and place and circumstance. Ordinary in this context does not mean that the payments must be habitual or normal in the sense that the same taxpayer will have to make them often. A lawsuit affecting the safety of a business may happen once in a lifetime. The counsel fees may be so heavy that repetition is unlikely. None the less, the expense is an ordinary one because we know from experience that payments for such a purpose, whether the amount is large or small, are the common and accepted means of defense against attack. Cf. Kornhauser v. United States, 276 U.S. 145, 48 S.Ct. 219, 72 L.Ed. 505. The situation is unique in the life of the individual affected, but not in the life of the group, the community, of which he is a part. At such times there are norms of conduct that help to stabilize our judgment, and make it certain and objective. The instance is not erratic, but is brought within a known type."
In Tellier, supra, the Supreme Court once again dealt with and interpreted the required standard of "ordinary and necessary" as follows:
"The Commissioner also concedes that the respondent's legal expenses were `ordinary' and `necessary' expenses within the meaning of § 162 (a). Our decisions have consistently construed the term `necessary' as imposing only the minimal requirement that the expenses be `appropriate and helpful' for `the development of the [taxpayer's] business.' Welch v. Helvering, 290 U.S. 111, 113, 54 S.Ct. 8, 9, 78 L.Ed. 212; Cf. Kornhauser v. United States, supra, 276 U.S. at 152, 48 S.Ct., at 220; Lilly v. Commissioner [of Internal Revenue], 343 U.S. 90, 93-94, 72 S.Ct. 497, 499, 96 L.Ed. 769; Commissioner [of Internal Revenue] v. Heininger, 320 U.S. 467, 471, 64 S.Ct. 249, 252, 88 L.Ed. 171; McCullough v. State of Maryland, 4 Wheat. 316, 413-415, 4 L.Ed. 579. The principal function of the term `ordinary' in § 162(a) is to clarify the distinction, often difficult, between those expenses that are currently deductible and those that are in the nature of capital expenditures, which, if deductible at all, must be amortized over the useful life of the asset. Welch v. Helvering, supra, 290 U.S., at 113-116, 54 S.Ct., at 8-10. The legal expenses deducted by the respondent were not capital expenditures. They were incurred in his defense against charges of past criminal conduct, not in the acquisition of a capital asset. Our decisions establish that counsel fees comparable to those here involved are ordinary business expenses, even though a `lawsuit affecting the safety of a business may happen once in a lifetime.' Welch v. Helvering, supra, at 114, 54 S.Ct. at 9. Kornhauser v. United States, supra, 276 U.S., at 152-153, 48 S.Ct., at 220; *757 cf. Trust of Bingham v. Commissioner [of Internal Revenue], 325 U.S. 365, 376, 65 S.Ct. 1232, 1238, 89 L.Ed. 1970."
It would be ludicrous for this Court to doubt for one second that the purchase of the chicken feed ingredients by the plaintiff in its large chicken-producing and interrelated activities was not appropriate and helpful for the development of its business of raising and feeding large flocks of chickens for sale on the market. Certainly this was an ordinary as well as a necessary expense and this Court is not aware of any holding that a deduction has been or should be denied because payment was made for the purchase of such feed, and particularly under the circumstances existent herein, before it was required by contract. Certainly this purchase of feed was not in the nature of a capital expenditure but for the day-by-day supply of food without which the flocks of chickens would not and could not survive. This supply of feed was for only approximately one month in advance, whereas in Ernst, supra, the supply purchased and paid for was for six months in advance. In Cravens, supra, the Court effectively answered the contention of the Government that the allowance of the deduction would have the effect of distorting income in the following language:
"In the case of farmers and cattle raisers the use of a transactional basis for the computation of income would bring confusion in the federal tax system. The treatment of the cost of seed, fertilizer, and feed purchased in one year for use in the next year is simple if the deduction is allowed when paid if the cash basis applies or when incurred if the accrual basis is used. If each transaction must be analyzed to determine whether a distortion of income will result from the allowance of a business expense deduction, § 43, is, in our opinion, given a meaning which Congress did not intend."
In Cravens, supra, the Court stated the following in arriving at the conclusion that the argument of distortion of income urged by the defendant was without merit:
"In Security Flour Mills Co. v. Commissioner of Internal Revenue, 321 U.S. 281, 64 S.Ct. 596, 88 L.Ed. 725, the taxpayer, which was on an accrual basis, deducted certain processing taxes which it had impounded but not paid to the Collector and which were in litigation and later refunded to the taxpayer's customers. The Commissioner disallowed the deduction. The taxpayer contended that the disallowance resulted in a distortion of its income and that under § 43 the Commissioner was required to make an exception to the general rule of accounting periods if it would be unfair not to treat the transaction on the basis of the long-term result. The Court, after commenting on the history of the legislation which resulted in the adoption of the qualifying clause of § 43, said that `the purpose of inserting the qualifying clause was to take care of fixed liabilities payable in fixed installments over a series of years' and that the intent was not to upset the doctrine that cash receipts and cash payments `should not be taken out of the annual accounting system and, for the benefit of the Government or the taxpayer, treated on a basis which is neither a cash basis nor an accrual basis, because so to do would, in a given instance, work a supposedly more equitable result to the Government or to the taxpayer.'
"In the Security Mills case the taxpayer, which was on the accrual basis, had receipts which were offset by a liability which did not accrue until a later year. In the case at bar the taxpayer was on the cash basis and made a disbursement for supplies which were not delivered until a later year. The application of § 43 for the benefit of the taxpayer was denied in the Security Mills case. On the same reasoning, *758 the Commissioner is not entitled to the benefit of § 43 in this case."
In view of the foregoing cases and the testimony of John Ray Gipson, the certified public accountant who devised plaintiff corporation's bookkeeping system when it was organized in 1959 and who each month reconciles its bank statements posting from the journal to the ledger taking a trial balance and preparing working papers that would reflect profit in each particular month and who also files and analyzes its accounts and prepares its income tax returns each year, that if the plaintiff were required to charge expense of chicken feed as it were delivered or as the chickens consumed it, rather than as it was paid for, this would amount to a "real burdensome type of operation" and that it would not be possible to trace this feed through a perpetual inventory from the time it was purchased until it was delivered to the Breeder Farm and would be inconsistent with the cash method of accounting. This Court agrees with this testimony.
Therefore, the plaintiff's claim for refund for the taxes paid on the $228,476.90 expense disallowance for payment of chicken feed during the fiscal year ending April 30, 1967, together with legal interest thereon, is meritorious and will be granted.
The plaintiff, Gaddis Breeder Farms, Inc.'s, second claim for refund in Civil Action No. 4421 is based on its contention that the defendant erroneously refused to permit its deduction of the amount of $11,236.97 as expenses incurred from expenditures made for the purchase of various items or supplies from Shenandoah Equipment Co. of Harrisonburg, Virginia, during its taxable fiscal year ending April 30, 1967 which items are reflected on invoice dated June 4, 1966 and a ledger sheet dated June 15, 1966.[11] More specifically, the plaintiff contends that all of these items were erroneously capitalized by the Internal Revenue Service pursuant to the recommendation of its agent who examined the plaintiff's corporate income tax return for the fiscal year ending April 30, 1967 (although the amount of refund claimed by the plaintiff in its complaint is stated as $14,232.81, the parties stipulated at page 33 of the transcript that the Government is correct as to $2,995.84 of the $14,232.81 disallowed expenses leaving the contested amount of $11,236.97 which is the total of the above invoice and ledger sheet). Plaintiff contends that the items acquired constitute nothing more than supplies having a very short useful life and are therefore not capital expenditures; and also, in the alternative, if it be found that they are capital expenditures, the acquisition simply replaced similar items which had been abandoned after loss of usefulness and credit should be offset against such acquisitions by an abandonment of loss in an equal amount.
As previously stated, these items in question were purchased by Gaddis Feed Mill which was acquired by the plaintiff corporation on December 31, 1966 together with most of its assets and the assumption of all of its liabilities.
On direct examination[12] and cross examination,[13] of Fred L. Gaddis, President and controlling stockholder of plaintiff corporation, the following facts were established. At the times in question, the plaintiff operated 32 company-owned farms, 11 leased farms and 27 contract farms for an average of five cycles per farm per year on the broiler farms requiring the type of equipment in question to be picked up and put down and reassembled five times per year. It is undisputed in the record that with the exception of three incinerators which were purchased from Shenandoah that not one of the items or pieces of equipment purchased from Shenandoah cost more than $8.51 cents each, and according *759 to the undisputed testimony of Mr. Gipson, plaintiff's certified public accountant, who has practiced his profession since receiving his Bachelor and Masters degree from Mississippi State in accounting, it is not customary to capitalize any supply or repair item with a cost of less than $8.51 unless such items go into a major construction project. It was established that when and as the new farms were built by the plaintiff prior to the dates of the purchase of all of these items and when these type items had been placed into a new farm this type of equipment was capitalized, but as it was replaced thereafter it was charged as expenses for supplies. According to Mr. Gipson's undisputed testimony, these charged expenses "correctly reflect income".
The testimony of Fred L. Gaddis concerning the purchase of, utilization, and normal lifetime of each of these items in question is undisputed in this record, and therefore this Court finds in accordance with this undisputed testimony that each of these items constituted expendable supplies rather than capital expenditures.
The general rule is that the cost of items which have a useful life of one year or less are currently deductible, whereas items with a useful life or more than one year must be capitalized and the cost thereof recouped through annual depreciation deduction, all of which Mr. Gaddis admitted that he was aware of.[14] Section 263 of the Internal Revenue Title prohibits the deduction of amounts paid for new buildings, or for permanent improvements or betterments made to increase the value of any property or estate, and the taxpayer is permitted under § 167 of the same Title to recover the cost of such items through annual depreciation deductions.
The criteria for distinguishing between a deductible expense item and one which is capital in nature are set forth in Treasury Regulations 1.162-4 in the following language:
"The cost of incidental repairs which neither materially add to the value of the property nor appreciably prolong its life but keep it in an ordinarily efficient operating condition, may be deducted as an expense, provided the cost of acquisition or production or the gain or loss basis of the taxpayer's plant, equipment, or other property, as the case may be, is not increased by the amount of such expenditures. Repairs in the nature of replacements, to the extent that they arrest deterioration and appreciably prolong the life of the property, shall either be capitalized and depreciated in accordance with section 167 or charged against the depreciation reserve if such an account is kept."
None of these items purchased by the plaintiff from Shenandoah had the effect of arresting deterioration or appreciably prolonging the life of the property nor did they result in an increase in the value thereof. None of them were utilized to entirely refurbish any of the chicken houses in question nor were they used to equip any new chicken houses, but were merely placed or distributed throughout the various chicken houses to replace similar items which through wear and tear and normal usage had become no longer economically feasible or useful. The expenditures involved here did nothing more than maintain the property in its ordinary operating condition, and with the exception of the incinerator, each, including the watering troughs, hanging feeders, hoses, valves, egg baskets, piping, nests, accessory packs, etc., ranged in price from $1.60 to $8.50 and had a normal useful life not in excess of 12 months, and were therefore deductible as expenses.
In Libby & Blouin, Ltd. v. Comm., 4 B.T.A. 910 (1926), the Commissioner of Internal Revenue unsuccessfully attempted to require capitalization of *760 numerous small parts used as replacements for similar items in a locomotive. The Court held:
"When a building is erected the flooring, nails and other small supplies of course enter into the capital cost of the building, yet when a building is repaired, the cost of replacing planks in the floor, and the cost of nails in making repairs, while it might be a considerable item, is entirely different from the ordinary cost of such things when the building is being erected. As in the case of the locomotive involved in this appeal, expenditures to replace certain worn out parts, as worn out tubes, broken parts, wheels, etc., merely keep the machine in operating condition. The statute contemplates that assets used in a trade or business are to be kept in an efficient operating condition by repairs, and money expended in making such repairs is considered an expense and allowed as a deduction by the statute."
Therefore, based on the undisputed evidence in this record and the foregoing authority, this Court finds and is of the opinion that the plaintiff was entitled to treat the items purchased from Shenandoah as expendable supplies and the defendant erroneously and illegally considered them capital expenditures. Thus, the plaintiff is entitled to the claimed refund of taxes paid as a result of this disallowance.
The final issue to be decided is whether the Internal Revenue Service was justified in imposing upon the plaintiff the 5% negligence penalty in the amount of $7,442.17 for the fiscal year ending April 30, 1967 pursuant to the provisions of Title 26, U.S.C. § 6653, which permits the imposition of this penalty where the underpayment of income taxes is due to negligence or intentional disregard of rules and regulations, but without intent to defraud. The Commissioner determined that the corporate plaintiff underpaid its federal income tax for the fiscal year in question, and that at least a part of the underpayment was due to either negligence or intentional disregard of applicable rules and regulations.
Gaddis Breeder Farms was a large, growing corporation which as already stated operated 32 company-owned farms, 11 leased farms, and 27 contract farms, and which covered thousands of acres, producing 350 flocks of chickens per year, or a total of 12 to 13 million broilers per year. The volume of its sales during the fiscal year ending April 30, 1967 amounted to $5,909,654.63 and the volume of its purchase for that year was $4,830,507.44. It was one of several corporations which were being operated under the trade name of Gaddis Industries and although it was being managed by Taylor Gaddis, brother of Fred L. Gaddis, nevertheless Fred L. Gaddis was its President and controlling stockholder. This plaintiff corporation employed a large number of employees including a full-time bookkeeper who maintained a complete double entry set of records to account for its revenues and expenses. Its bookkeeping system was set up at the time that it was organized in 1959 by John Ray Gipson, who received his Bachelor and Masters degree from Mississippi State and has actively practiced as a certified public accountant since 1953. Each month Mr. Gipson visited the plaintiff's office, reconciled its bank statements and posted from its journal to its ledger. He would take a trial balance and from this trial balance prepare working papers that would reflect the profit for that particular month. At the end of each fiscal year he would analyze all of the accounts of the corporation that he deemed necessary and would then prepare its income tax returns. Gipson was the only one who had ever prepared a tax return for the plaintiff corporation, and to his knowledge, no information has ever been withheld from him by anyone, including Mr. Fred L. Gaddis who was neither an accountant nor a lawyer. It was his opinion that the correct income of the company was ascertainable from the books and records which were kept. No income has been *761 shown or alleged to have been omitted from the records thus maintained or from the tax return prepared by the certified public accountant on whose expertise the plaintiff through its president and controlling stockholder always relied.
In January, 1967, Mr. Louis Butler of the Internal Revenue Service audited plaintiff's books and records for the fiscal years 1964-1965 and 1965-1966 as well as its Federal Tax Returns for those two years. This audit was completed approximately three months prior to the end of the April 30, 1967 fiscal year which is the year in question. Several errors or omissions were called to the attention of Mr. Gipson by Mr. Butler with reference to the above fiscal years, and particularly certain large items which had been deducted as expenses which should properly have been capitalized. These items had been credited to purchases, including the purchase of some livestock. Also, a note receivable in the amount of $150,000 had been mistakenly entered as a purchase.
The R.A.R. (Revenue Agent's Report)[15] was reviewed by the certified public accountant, Gipson, who agreed with all adjustments made therein by Butler in January, 1967 some three months prior to the end of the April 30, 1967 fiscal year. After this discussion with Mr. Butler, Mr. Gipson contacted Mrs. Thompson, the plaintiff's regular bookkeeper, pointed out to her the mistakes that had been made and called to his attention by Mr. Butler, and in turn Gipson made suggestions to Mrs. Thompson with reference to more accurate bookkeeping at which time he and Mrs. Thompson went back into the corporation's books and checked them as best they possibly could, including the records for the fiscal year in question, pulling some expense items out which had been improperly entered as such.
Gipson's first contact with Mr. Frank Price of the Internal Revenue Service who audited the books and tax return of the plaintiff corporation for the fiscal year ending April 30, 1967, was in approximately January, 1968 when he agreed with several substantial adjustments made by Mr. Price in his R.A.R.[16] with the exception of the items now in question before this Court. Page 12 of Exhibit "A" to Exhibit D-5 shows above the double lines thereon the expenses which had been claimed and below the double lines their corrected entry as capitalized items, including cost of pipe fencing and labor, a large cattle purchase, expense of hauling cattle and some other labor expenses. Gipson did not set up a capital account for labor but just for equipment and buildings, and he has never audited the plaintiff's books but merely made the tax returns and performed the monthly services previously referred to. It was his job and prerogative to examine the classification of expenses as he wished and feels that he should have in order to correctly prepare the plaintiff's tax returns. No one connected with the plaintiff corporation has ever withheld any information from Gipson, and he has been given free access to all the books of the corporation, which system he initially set up in 1959 and over which he had monthly supervisory capacity as well as the duty of making tax returns each year subsequent to that time. He did testify that he did not have the time to, nor did he ever request to check every invoice of plaintiff's large and growing business. Mr. Gaddis and the other stockholders relied upon his expertise in the preparation of the plaintiff's tax returns, including the one in question for the fiscal year ending April 30, 1967.
In United States v. Miller, 315 F.2d 354 (C.A.10, 1963), cert. den. 375 U.S. 824, 84 S.Ct. 64, 11 L.Ed.2d 57 (1963), affg. 211 F.Supp. 758 (D.Wyo.1962), the Court, although primarily concerned with the delinquency and negligence penalties for failure to file a tax return, did state the determinative criteria to be the standard of ordinary business care *762 and prudence. In Miller, the Court recognized that the taxpayers were not indifferent to their obligations under the tax laws as shown by the consistency with which they referred all their income tax problems to qualified parties and noted that they employed and relied on the expert knowledge of a specialist in tax law for the preparation of their returns which was in itself evidence of their care and attention to their duties under the income tax laws.
In Woodbury v. Commissioner, 49 T.C. 180 (1967), the Tax Court also found that petitioners' reliance on attorneys or accountants for the preparation of their income tax returns indicated their good faith and evidenced due care for their obligations under the income tax laws and thus no part of the deficiencies in question was due their negligence or their intentional disregard for the rules and regulations. Additionally, in Woodbury the Court referred to Income Tax Regulations, Section 1.6001-1(b) in support of the proposition that farmers need not keep the complete records required of other taxpayers, but they are required to keep "such records as will enable the District Director to determine the correct amount of income subject to the tax."
Although more care could have been exercised by the plaintiff's bookkeeper and by its certified public accountant in maintaining the plaintiff's records and in checking and double checking each entry made, nevertheless the taxpayer employed a regular bookkeeper and certified public accountant, gave them all necessary data and records of financial transactions which were maintained, and no income was omitted from the tax returns. Furthermore, the plaintiff employed a certified public accountant to prepare its income tax returns each year. Under all the facts and circumstances of this case this Court finds that the evidence preponderates in favor of the plaintiff's position that it was not negligent nor did it intentionally disregard the rules and regulations within the meaning of § 6653(a).
Therefore, this Court finds and is of the opinion that the preponderance of the evidence shows that the plaintiff herein exercised reasonable care and was not guilty of negligence or intentional disregard of the rules and regulations and should not have been assessed this penalty. Therefore, it is entitled to a refund thereof.
Accordingly, separate Judgments conforming with the foregoing Findings of Fact based on a preponderance of the evidence and the Conclusions of Law shall be prepared by the plaintiffs in each of the above styled and numbered cases, be approved as to form by counsel for both sides, and be presented to the Court at Biloxi, Mississippi in the form and within the five days required by the Rules of this Court.
NOTES
[1] See Exhibit P-18.
[2] See 87 C.J.S. Trade-Marks, Trade-Names, and Unfair Competition § 178:
"* * * Apart from the law of corporations, the contract of a person doing business under a trade-name, although made in the trade-name, is his individual obligation, and the rule that an undisclosed principal cannot be sued on a contract does not apply where the principal contracts in a trade-name. In like manner, contracts entered into under a trade-name which are not otherwise invalid are enforceable by the one who employs such trade-name."
[3] See Exhibits P-11-15.
[4] See Exhibit P-5.
[5] See Exhibit P-8.
[6] Exhibit P-9.
[7] Exhibit P-10.
[8] See Exhibit D-11.
[9] Uniform Sales Act, § 6(2); Mississippi State Tax Commission v. Columbia Gulf Transmission Co., 249 Miss. 88, 161 So.2d 173, 178 (1964); United States v. Amalgamated Sugar Co., 72 F.2d 755, 758 (10 Cir. 1934); 77 C.J.S. Sales § 253.
[10] See Exhibit P-2.
[11] See Exhibits P-16 and P-17, respectively.
[12] Tr. pp. 31-35.
[13] Tr. pp. 62-71.
[14] Treasury Regulations on Income Tax (1954 Code), § 1.263(a).
[15] Exhibit D-4.
[16] Exhibit D-5.
|
786 N.W.2d 123 (2010)
2010 WI 85
STATE of Wisconsin, Plaintiff-Appellant,
v.
Michael A. LITTLEJOHN, Defendant-Respondent-Petitioner.
No. 2007AP900-CR.
Supreme Court of Wisconsin.
Argued April 13, 2010.
Decided July 15, 2010.
For the defendant-respondent-petitioner there were briefs and oral argument by William E. Schmaal, assistant state public defender.
For the plaintiff-appellant the cause was argued by Michael J. Losse, assistant attorney general, with whom on the brief was J.B. Van Hollen, attorney general.
¶ 1 MICHAEL J. GABLEMAN, J.
This is a review of a published decision of the court of appeals reversing the circuit court's grant of a motion to suppress evidence seized from a locked automobile. The issue in this case is identical to the issue in State v. Dearborn, 2010 WI 84, ___ Wis.2d ___, 786 N.W.2d 97, which we also decide today. The question presented is, when a search incident to arrest is conducted by law enforcement officers who act in objectively reasonable reliance on clear and settled precedent authorizing that search, but the search is later declared unconstitutional, should the remedy of exclusion apply to bar admission of the illegally obtained evidence?
¶ 2 The facts in this case are similar but unrelated to the events in Dearborn. More details can be found in the court of appeals opinion, State v. Littlejohn, 2008 WI App 45, 307 Wis.2d 477, 747 N.W.2d 712, but the relevant facts are as follows.
¶ 3 Littlejohn was arrested for driving with a revoked license. After officers placed him under arrest, handcuffed him, and placed him in a squad car, they searched Littlejohn's locked automobile. In the passenger compartment, officers found what appeared to be marijuana and cocaine. A search of the locked trunk revealed more marijuana, cocaine, and drug paraphernalia. Based on this evidence, the police obtained a warrant to search Littlejohn's residence, where they found additional incriminating evidence.
¶ 4 Littlejohn moved to suppress the evidence seized from his car and residence. The circuit court granted the motion because there were not "sufficient facts to raise an honest belief in a reasonable mind that any objects sought [we]re linked to the commission of a crime, and that they [would] be found in the [automobile]." The court of appeals reversed, holding that the search was valid, incident to Littlejohn's lawful arrest. 307 Wis.2d 477, ¶ 1, 747 N.W.2d 712.
¶ 5 For the reasons set forth in Dearborn, ___ Wis.2d ___, ¶¶ 14-49, we affirm the court of appeals. We hold that the good faith exception precludes application of the exclusionary rule where officers conduct a search in objectively reasonable reliance upon clear and settled Wisconsin precedent that is later deemed unconstitutional by the United States Supreme Court. Accordingly, we affirm the court of appeals and remand the cause for further proceedings.
The opinion of the court of appeals is affirmed and the cause remanded for further proceedings.
*124 ¶ 6 SHIRLEY S. ABRAHAMSON, Chief Justice (dissenting).
I dissent for the reasons set forth in my dissent in State v. Dearborn, 2010 WI 84, ___ Wis.2d ___, 786 N.W.2d 97, decided today.
¶ 7 I am authorized to state that Justice ANN WALSH BRADLEY joins this opinion.
|
842 A.2d 853 (2004)
367 N.J. Super. 314
The OWNERS OF THE MANOR HOMES OF WHITTINGHAM, Plaintiffs-Appellants,
v.
WHITTINGHAM HOMEOWNERS ASSOCIATION, INC., Members of the Trustees of the Whittingham Homeowners Association for 1996, 1997, 1998, 1999 and 2000, Defendants-Respondents.
Superior Court of New Jersey, Appellate Division.
Argued September 16, 2003.
Decided March 2, 2004.
*854 Lawrence S. Grossman, Morganville, argued the cause for appellant (Mr. Grossman, on the brief).
John E. Lamastra, Florham Park, argued the cause for respondents (Heim & McEnroe, attorneys; Mr. Lamastra, on the brief).
Before Judges STERN, A.A. RODRÍGUEZ and LEFELT.
The opinion of the court was delivered by A.A. RODRÍGUEZ, J.A.D.
The issue presented in this case is whether the Board of Trustees (Board) of a condominium homeowners association may change the method of calculating maintenance assessments several years after the condominium has been in operation. Based on the circumstances presented here and pursuant to the business judgment rule, we conclude that the Board has such authority.
The Whittingham Condominium community was developed in phases from 1985 until 1995. It consists of three different categories of dwellings: Townhouses, Single Detached Homes, and Manor Homes. The Manor Homes are apartment units which are clustered in groups of four in one structure. In each of the categories, there are models of varying sizes. The developer of Whittingham, Union Valley Corp., collected maintenance assessments from 1985 until 1995. In 1995, the ownership transition was completed and individual owners assumed control of the Whittingham Homeowners Association (Association).
The Declaration of Covenants, Conditions and Restrictions (Declaration) provides for the collection of maintenance assessments by the Association. The maintenance assessment includes fixed expenses and variable expenses components. The fixed expenses are allocated on an equal basis to all homes, "regardless of value, size, or type." However, variable expenses, typically exterior maintenance, repairs, ground's care, and insurance are calculated according to a formula based on the proportion of a unit's "square footage" to the aggregate "square footage" of all units for which a certificate of occupancy has been issued. Unfortunately, the term "square footage" is not defined in the Declaration, Master Deed or the By-laws. The interpretation of that term lies at the center of this dispute.
During the period of developer control, the variable expense assessment was allocated according to certain measurements of each unit (the developer measurements). It is not clear how the developer arrived at these measurements, which were used in the first year operating budget. These measurements differed from those found in the architectural drawings made by Stephen Mark Goldner Associates, which were attached to the Public Offering
*855 Statement. A third and different set of measurements were indicated in the developer's sales brochure. More importantly, although there are different models of varying sizes in each category, the same square foot measurement was used for all models in one category, i.e., Townhouse = 1619, Single Detached = 1488 and Manor Homes = 1034. It is suggested in this appeal that the developer measured the exterior wall of the foundations to arrive at these figures.
After the unit owners assumed control of the Association, its Board decided to remeasure all of the units. The Association commissioned Coral Construction Co. (Coral) to do this task. Coral submitted a report in September 1995 establishing the following square footages for the models in each category:
TOWNHOMES
Gramby 1729.96
Wellsley 1766.30
Stafford 1802.31
Haverhil 1918.26
SINGLE DETACHED
Duxbury 1160.39
Brattleboro 1304.74
MANOR HOMES
C-1 1327.60
C-2 1379.60
C-3 1250.36
C-4 1329.37
The Coral measurements reflect the interior square footage of each unit. According to the Association's brief, it instructed Coral to measure the interior living space of each unit because the Master Deed describes each condominium unit as:
the area bounded by the interior surface of the perimeter walls of the garage to which there is direct access from the interior of the remainder of said unit, and the floor and ceiling of said garage.
As a result of the Coral measurements, the variable expense maintenance assessment for each Manor Home increased. This caused a concomitant decrease in the variable maintenance assessment of Townhouse and Single Detached units. From November 1995 until the present, the maintenance assessment has been allocated according to the Coral measurements.
In July 1996, Louis Eisenberg, a Townhouse unit owner, wrote a letter to the Board questioning the change in measurements and resulting adjustment in the assessment allocation. Twenty-two other unit owners joined in the letter. The Board responded via a letter signed by the Board President, which explained the need for remeasuring. The letter stated:
Please also refer to the Architectural Plans submitted by [Stephen] Mark Goldner Associates and note they do not conform to the calculations for square footage on [Townhouses, Single Detached and Manor Homes] as cited in the Prospectus.
In addition, a Union Valley brochure listing square footage of models for sale in 1990 showed different numbers than those in the Prospectus. It was decided by the Board that in as much as Section II was undergoing transition it would be prudent for the Board to define square footage (heretofore underfined). The Board determined that square footage was living space within each model and hired Coral Construction to re-measure the units. The information was submitted to the Budget and Finance Committee and maintenance fees were approved by the Board.
The method of allocation was explained at several ensuing Homeowners Association meetings.
The Board's letter was followed by a legal opinion dated November 18, 1996, from E. Richard Kennedy, the Board's counsel. The Kennedy legal opinion indicates that the Board acted properly and within its authority pursuant to governing *856 documents when it recalculated maintenance fees based on the Coral measurements. In September 1999, Kennedy sent another legal opinion on the same subject in response to written inquiries from Eugene Sultan, another unit owner. This opinion also indicates that the Board acted properly when remeasuring the units and recalculating maintenance fees.
In October 2001, six years after the Board accepted the Coral measurements as the basis for calculating the variable expenses maintenance assessment, Eisenberg and others brought this action on behalf of the "Owners of the Manor Homes of Whittingham" (plaintiffs), against the Whittingham Homeowners Association, Inc., and members of the successive Boards of Trustees for the years from 1996 to 2000 (collectively "Association"). Plaintiffs sought a refund for the difference between the variable maintenance assessments calculation pursuant to the Coral measurements and those calculated in accordance with the developer measurements.
The Association answered and moved for summary judgment. In support of its motion, the Association submitted a certification by Jim Ungerleider, a member of the Board from 1995 until September 1996, and a Single Detached unit owner. The Ungerleider certification outlined the steps taken by the Association to remeasure the unit. It also indicates that the measurements used by the developer were "unclear and/or inaccurate." At oral argument, Judge Amy Piro Chambers requested additional briefs and materials, including a schedule of maintenance assessments from the date of the first operating budget to the present.
Judge Chambers granted the Association's motion for summary judgment finding that the adjustment in maintenance assessments based on the Coral measurements had been relatively small. The judge observed, based on a review of the schedule of assessments, "it appears there is generally stability, certainly for the [Manor House] units." The judge also noted that plaintiffs had taken a long time to bring a lawsuit, considering the change occurred in 1996. The judge concluded that the Board had the authority to order the measuring by Coral and to change maintenance assessments based on those measurements. The judge said:
the Board was confronted at the beginning of thewhen it began to take charge of the units [it] was confronted with the variety of measurements in the developer's documents. It had to have some uniform approach. It hired professionals, made measurements based on rational criteria, and it had the authority to do so.
On appeal, plaintiffs contend that: (1) there is a significant issue of facts based upon the items presented in the opposition to the motion of summary judgment; (2) the judge made a determination based upon laches, which is not pertinent in this matter; and (3) the affidavit of James Ungerleider is self-serving and incorrect. We disagree. Although some factual disputes exist, they are not material to the central issue in this case, i.e., whether the Board had the authority to order a remeasuring of square footage in order to calculate maintenance assessments. The judge made some observations regarding the lateness of the complaint and the relatively minor adjustment in assessments after the remeasuring. However, the basis of her opinion was not a finding of laches, but a legal conclusion that the Board had the authority to act and did so properly. We agree with this conclusion.
The Condominium Act, N.J.S.A. 46:8B-1 to -38, gives a condominium association the power and responsibility to *857 make common expense assessments. N.J.S.A. 46:8B-14(a). "Common expenses" means:
expenses for which the unit owners are proportionally liable, including but not limited to:
(i) all expenses of administration, maintenance, repair and replacement of the common elements;
(ii) expenses agreed upon as common by all unit owners; and
(iii) expenses declared common by provisions of this act or by the master deed or by the bylaws.
[N.J.S.A. 46:8B-3e].
The Condominium Act requires that common expenses, such as maintenance fees,
shall be charged to unit owners according to the percent of their respective undivided interest in the common elements as set forth in the Master Deed and amendments, thereto, or in such other proportions as may be provided in the master deed or by-laws.
[N.J.S.A. 46:8B-17.]
Here, we have not been provided with the portion of the Master Deed that sets out the percentage of common elements for each unit. However, we accept the statement by the Association that the Master Deed does not specify how the common expenses assessments should be allocated. Therefore, we look to the By-laws. These provide that:
[t]he amount of monies for Common Expenses deemed necessary by the Board and the manner of expenditure thereof, including but not limited to, the allocation thereof, shall be a matter for the sole discretion of the Board.
[By-laws, Article VI, Section 2.]
There is a similar provision in the Declaration.[1]
The Declaration also provides that "it shall be an affirmative obligation of the Homeowners Association and its Board to fix assessments in an amount sufficient to maintain the Lots and the exterior of all Homes...." The Declaration goes on to state that, "maintenance fees will include both fixed and variable costs and will be allocated by the Board in accordance with the variable services which a homeowner receives." The variable expenses component is to be determined as follows:
[t]he assessment ... shall be equal to that fraction of the total assessment for such purposes in the Community, the numerator of which is the square footage for the particular model of Home affected and the denominator of which is the aggregate of such square footage for all Homes within the Property for which a certificate of occupancy has been issued by the Township of Monroe as of the date the assessment is established.
[Declaration, Article IV, Section 3.]
Thus, the Whittingham governing documents provide an alternative method for calculating common expenses other than the percentage of ownership of common elements, which is permitted, indeed, contemplated by the appropriate section of the Condominium Act. N.J.S.A. 46:8B-17.
Plaintiffs allege that the developer measurement, "was the outside foundation walls while the new measurement [is] the inside measurement of the living space."
*858 Plaintiffs argue that the developer's measurements are "the correct calculation." The flaw in plaintiffs' argument is the assumption that there is only one correct measure for allocating common expenses. We find no authority that supports that principle. Instead, the statutory language strongly suggests a grant of discretion to the Association and its Board. If more than one method is suitable, the Board has a choice. However, such discretion is not to be exercised unreasonably or arbitrarily. The courts will intervene in the case of such an abuse.
Courts have used various standards to review condominium governance. See Thanasoulis v. Winston Towers 200 Ass'n, 110 N.J. 650, 666, 542 A.2d 900 (1988) (Garibaldi, J., dissenting). These standards include a constitutional approach, an administrative rulemaking approach, and a "business judgment rule." Ibid. For a discussion of these standards, see Note, Judicial Review of Condominium Rulemaking, 94 Harv. L.Rev. 647 (1981), and Thanasoulis v. Winston Tower 200 Ass'n, 214 N.J.Super. 408, 420, 519 A.2d 911 (App.Div.1986) (Cohen, J.A.D., dissenting), rev'd, 110 N.J. 650, 542 A.2d 900 (1988). The Supreme Court has adopted the business rule as the more appropriate analytical framework for judicial review of condominium rulemaking. Thanasoulis, supra, 110 N.J. at 666, 542 A.2d 900.
The business judgment rule established the following two-prong test to determine whether the association has breached its fiduciary duty in adopting the challenged by-law: (1) whether the Associations' actions were authorized by statute or by its own by-laws or master deed, and if so, (2) whether the action is fraudulent, self-dealing or unconscionable. Chin v. Coventry Square Condo., 270 N.J.Super. 323, 328-29, 637 A.2d 197 (App.Div.1994). See also Siller v. Hartz Mountain Assoc., 93 N.J. 370, 382, 461 A.2d 568, cert. denied, 464 U.S. 961, 104 S.Ct. 395, 78 L.Ed.2d 337 (1983); Papalexiou v. Tower West Condo., 167 N.J.Super. 516, 527, 401 A.2d 280 (Ch.Div.1979).
As to the first prong of the business rule, we have already discussed how the Condominium Act authorizes the Board's action. As to the second prong, we perceive nothing in the record that the assessments based on the Coral measurements were fraudulent or unreasonable. There is no allegation that the measurement of the interior space is inaccurate. Likewise, there has not been a substantial fluctuation in the pre- and post-Coral measurement assessments. Lastly, there is no indication that the Association or Board has benefited by the remeasuring. There is an indirect allegation that those Board members who are Townhouse or Single Detached unit owners have benefited because their assessment decreased slightly. However, there was an independent business reason for doing the remeasurement, i.e. the source of the developer measurements were unclear and contradicted by architectural drawings. Moreover, the timing was appropriate because it occurred when individual unit owners assumed control over the Association and a new phase of the condominium development was about to undergo an ownership transition. We do not perceive any self-dealing in the Board's action. Absent these circumstances, however, the Board's action in modifying the assessment allocation in "mid-stream" might be scrutinized for "self-dealing."
For future guidance, despite a Board's ample discretion, it should not alter the method for assessing common expenses, without a valid, objective reason for such modification. In fact, modifications in the method for calculating common *859 expenses should be the exception, rather than the rule. Such modification should not be dictated by a change in the composition of the board.
Affirmed.
NOTES
[1] The Declaration states:
The amount of monies for assessments deemed necessary by the Board to discharge the responsibility of the Board and the manner of expenditure thereof, including but not limited to, the allocation thereof, shall be a matter for the sole discretion of the Board.
[Declaration, Article IV, Section 3.]
|
44 F.Supp.2d 493 (1999)
Alvin BLYER, Regional Director of Region 29 of the National Labor Relations Board, for and on behalf of the NATIONAL LABOR RELATIONS BOARD, Petitioner,
v.
LOCAL UNION NO. 3, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL CIO, Respondent.
No. 99-CV-2077 (FB).
United States District Court, E.D. New York.
April 27, 1999.
Alvin Blyer, Regional Director, Region 29, National Labor Relations Board by *494 Sharon Chau, Board Agent, Brooklyn, NY, for petitioner.
Norman Rothfeld, New York City, for respondent.
MEMORANDUM AND ORDER
BLOCK, District Judge.
The petitioner brings this application for a preliminary injunction, pursuant to section 10(1) of the National Labor Relations Act ("Act"), 29 U.S.C. § 160(1), pending final disposition of the matter involved herein, for alleged recognitional or organizational picketing by respondent Local Union No. 3, International Brotherhood of Electrical Workers, AFL CIO ("Local Union No. 3"), in violation of section 158(b)(7)(A) of the Act.[1] An evidentiary hearing was held by this Court on April 21, 1999.
The facts in this case are relatively straightforward. The employer, Genmar Electrical Contracting ("Genmar"), is an electrical contractor whose approximately sixteen employees have recently obtained union representation from United Construction Trades & Industrial Employees International Union ("UCTIU"). Specifically, in late October of 1999, Genmar employees signed union authorization cards, and subsequently a collective bargaining agreement between Genmar and UCTIU went into effect on November 3, 1999. Since on or about March 31, 1999, Local Union No. 3 has had a few people picketing Genmar at the site of its current contracting work, with signs that read, in essence, "Join Local 3 for Better Working Conditions."
The Second Circuit has held that,
[i]t is beyond any question that the role of a district court in a Section 10(1) proceeding is not to adjudicate the merits of the alleged violation, but rather to decide whether the Regional Director had reasonable cause to believe that the respondent has violated the Act. Reasonable cause has been interpreted to mean that there must be a `reasonable possibility' that the Board will sustain the unfair labor practice charge. That the Court's function is so circumscribed has been held in a number of cases.
Kaynard v. Independent Routemen's Assoc., 479 F.2d 1070, 1072 (2d Cir.1973) (emphasis added) (internal citations omitted). In addition to "reasonable cause," the Court must also determine "whether the temporary injunctive relief [requested] would be just and proper in terms of general equitable principles." Danielson v. Int'l Bhd. of Electrical Workers, 509 F.2d 1371, 1375 (2d Cir.1975) (internal citations and quotations omitted).
The Court finds that there is reasonable cause to believe that the UCTIU has been duly certified, and recognized by Genmar as the lawful representative of its employees. See 29 U.S.C. § 158(b)(7)(A). Therefore, the key question here is whether an object of Local Union No. 3's picketing was one of "forcing or requiring an employer to recognize or bargain with [Local Union No. 3] as the representative of his employees, or forcing or requiring the employees ... to accept or select [Local Union No. 3] as their collective bargaining representative...." 29 U.S.C. § 158(b)(7). In defining "an object," the Second Circuit has held that "`[r]ecognition or organization need not be the sole or principal object *495 of the picketing; it is sufficient to make out a violation if one of the union's objects is within the statutory language.'" Don Davis Pontiac, Inc. v. NLRB, 594 F.2d 327, 332 (2d Cir.1979) (emphasis added) (citing NLRB v. Suffolk County District Council of Carpenters, AFL CIO, 387 F.2d 170, 173 (2d Cir.1967)). In defining "forcing or requiring," the Second Circuit has held that such language "refers to the intended effect of the picketing, not the manner in which the picketing is carried on...." NLRB v. Local 239, Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen and Helpers of America, 289 F.2d 41, 44 (2d Cir.1961).
Local Union No. 3 argues that the intended effect of their picketing is simply to recruit Genmar employees to work as electricians for Local Union No. 3 contractors. The argument is plainly disingenuous. In the first place, the Second Circuit has specifically recognized that picket signs exhorting employees to join a particular union for improved wages and working conditions can have "a clearly recognition-organizational purpose." NLRB v. Local 239, 289 F.2d at 43 ("Local 239 ... wants the employees of Stan-Jay ... to join them to gain union wages, job security and working conditions"). Such signs stand in contrast to permissible informational picketing signs. See, e.g., NLRB v. Local 239, Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, 340 F.2d 1020, 1021-23 (2d Cir. 1965) (picketer's sign, inter alia, "To the Public Please Be Advised Abbey Auto Parts is Non-Union," found to be "informational rather than coercive"); National Labor Relations Board v. Local 3, Int'l Bhd. of Electrical Workers, AFLCIO, 317 F.2d 193, 195-200 (2d Cir.1963) (picketer's sign, inter alia, "Electricians working for Picoult on this job receive sub-standard wages and inferior working conditions," (uppercase omitted) found to be potentially informational); McLeod v. Chefs, Cooks, Pastry Cooks and Assistants, Local 89, Hotel and Restaurant Employees and Bartenders Int'l Union, AFLCIO, 280 F.2d 760, 762, 764-65 (2d Cir.1960) (picketer's sign, inter alia, "To the Public The Stork Club does not have a Contract With Chefs, Cooks, Pasty Cooks & Asst's Union Local 89 AFLCIO," found to be informational).
Second, given the relatively small number of UCTIU members employed by Genmar, it would not take many defectors to create an unstable labor scenario. Moreover, the timing of the picketing has a retaliatory odor, coming shortly after Genmar recognized the newly formed UCTIU as the employees' bargaining representative and entered into its first collective bargaining agreement with the new union.
In light of the recognitional-organizational character of the picket signs, coupled with the particular realities of this case, it is "reasonably possible" to believe that the ultimate fact-finder will conclude that the intended effect of the picketing was to induce Genmar's employees to switch their union affiliation and, consequently, to require Genmar to recognize Local Union No. 3 as its employees' bargaining representative. Hence, there is "reasonable cause" to believe that Local Union No. 3 is engaging in an unfair labor practice.
Turning to the second determination that the Court must make, the Court concludes that temporarily enjoining Local Union No. 3's picketing would be just and proper. See Silverman v. Local 78, 958 F.Supp. 129, 134 (S.D.N.Y.1996) ("there are no bright line rules" regarding whether granting injunction would be just and proper); Seeler v. Int'l Union of Operating Engineers, Local 17(c), No. 86-CV-287E, 1986 WL 4683, at *3 (W.D.N.Y. April 18, 1986) (the Second Circuit has stressed the "equitable discretion" of the district courts in determining what is just and proper) (citing Danielson, 509 F.2d at 1375 (2d Cir.1975)). Not only does petitioner have reasonable cause to believe that the picketing is an unfair labor practice, but the picketing appears to be disrupting work at Genmar's current work site, insofar as it has been represented to the Court by Genmar's attorney, without *496 objection, that other trades have refused to cross the picket line.
Accordingly, it is hereby ordered that petitioners' request for a preliminary injunction is granted, in that Local Union No. 3's officers, agents, representatives, servants, employees, attorneys, and all members and persons acting in concert or participation with it, pending the final disposition of the matters involved herein before the NLRB, are enjoined from in any manner, or by any means picketing or causing to be picketed, or threatening to picket or cause to be picketed Genmar, where an object thereof, such as represented by the picketing in the present case, is forcing or requiring Genmar to recognize or to bargain with Local Union No. 3 as the representative of Genmar's employees, or forcing or requiring the Genmar's employees to accept or select Local Union No. 3 as their collective-bargaining representative, where Genmar has lawfully recognized in accordance with the Act, UCTIU, a labor organization, and a question concerning representation may not be raised under section 159(c) of this Act.
SO ORDERED.
NOTES
[1] Section 158(b)(7)(A) of the Act states, "It shall be an unfair labor practice for a labor organization or its agents
(7) to picket or cause to be picketed, or threaten to picket or cause to be picketed, any employer where an object thereof is forcing or requiring an employer to recognize or bargain with a labor organization as the representative of his employees, or forcing or requiring the employees of an employer to accept or select such labor organization as their collective bargaining representative, unless such labor organization is currently certified as the representative of such employees:
(A) where the employer has lawfully recognized in accordance with this subchapter any other labor organization and a question concerning representation may not appropriately be raised under 159(c) of this title."
|
SYLLABUS
This syllabus is not part of the Court’s opinion. It has been prepared by the Office of the
Clerk for the convenience of the reader. It has been neither reviewed nor approved by the
Court. In the interest of brevity, portions of an opinion may not have been summarized.
In the Matter of Ridgefield Park Board of Education (A-2-19) (083091)
Argued March 3, 2020 -- Decided August 17, 2020
Patterson, J., writing for the Court.
In this appeal, the Court reviews the Public Employment Relations
Commission’s (PERC) decision that the employees’ health insurance premium
contribution rates for the duration of the 2014-2018 collective negotiations
agreement (CNA) between the Ridgefield Park Board of Education (Board) and the
Ridgefield Park Education Association (Association) were non-negotiable because
those rates were preempted by L. 2011, c. 78 (Chapter 78).
Chapter 78 prescribed annual increases in health care contributions over four
years for those employed by a local board of education and required those
employees to achieve full implementation of the increased contributions (Tier 4) in
the fourth year after the statute’s effective date or, for employees already subject to
a CNA, in the fourth year after the expiration of that agreement. Chapter 78 also
provided that when an employer and its employees negotiated the next CNA after
the employees in a bargaining unit reached full implementation of the share of the
cost of health care premiums mandated by N.J.S.A. 52:14-17.28c, they would
negotiate employee health care contributions as if that premium share were part of
their previous CNA. N.J.S.A. 18A:16-17.2.
The Board and the Association negotiated a CNA covering 2011-2014 that
went into effect three days after the Legislature enacted Chapter 78. The 2011-2014
CNA expired before the employees achieved full implementation of the premium
share set forth in N.J.S.A. 52:14-17.28c (Tier 4). After the 2011-2014 CNA expired,
the Board and the Association negotiated a CNA covering 2014-2018, which, like its
predecessor, stated that employees shall contribute 1.5% of their salary towards
health insurance or the minimum set forth by statute, regulation, or code.
During the 2014-2015 school year, the employees contributed to the cost of
their health care at the full premium share required by N.J.S.A. 52:14-17.28c (Tier
4). The Board and the Association disputed Chapter 78’s impact on employee
contributions for the CNA’s remaining three years. The Board contended that
Chapter 78 preempted any negotiated term for those contributions and that the
1
Association’s members were required to contribute to their health benefits at the
Tier 4 level for the duration of the CNA. The Association contended that Chapter 78
did not preempt the 1.5% contribution rate set forth in the 2014-2018 CNA.
The Board and the Association petitioned PERC for a scope-of-negotiations
determination. PERC held that the health insurance premium contribution rate set
forth in the 2014-2018 CNA was preempted by Chapter 78 and granted the Board’s
request for a restraint of binding arbitration as to that issue. The Appellate Division
reversed, determining that adherence to Chapter 78’s plain language would bring
about an “absurd result” contravening legislative intent, and required the employees
to contribute only 1.5% of their salaries for the three contested years. 459 N.J.
Super. 57, 61, 70-72 (App. Div. 2019).
The Court granted the Board’s petition for certification. 239 N.J. 393 (2019).
HELD: The health insurance premium contribution rates paid by the Association’s
members were preempted by statute and therefore non-negotiable. PERC’s
construction of Chapter 78 comports with the statute’s language and the
Legislature’s stated objective to achieve a long-term solution to a fiscal crisis.
1. The determination of whether a subject is properly negotiable in negotiations
between public employers and their employees is governed by the three-part test set
forth in In re Local 195, 88 N.J. 393, 403-04 (1982). This case implicates the
preemption prong of that test. Thus, to review PERC’s decision that the rates in
question were non-negotiable, the Court considers whether the plain language of
N.J.S.A. 18A:16-17.2 evinces the Legislature’s intent to preempt any negotiated
provision in the parties’ 2014-2018 CNA regarding employee contributions to their
health care benefits. (pp. 20-23)
2. N.J.S.A. 18A:16-17.2’s first sentence addresses “public employer[s] and
employees who are in negotiations for the next collective negotiations agreement to
be executed after the employees in that unit have reached full implementation of the
premium share . . . .” (emphases added). And in its final sentence, N.J.S.A.
18A:16-17.2 provides that after “full implementation,” the employees’ contribution
levels “shall become part of the parties’ collective negotiations and shall then be
subject to collective negotiations in a manner similar to other negotiable items
between the parties.” Accordingly, during the negotiations for the next CNA after
full implementation is reached -- here, the negotiations for the agreement that would
succeed the 2014-2018 CNA -- the Tier 4 contribution levels would constitute the
status quo. The Legislature did not expressly discuss the scenario in this case, in
which the employees reached “full implementation” of the premium share with three
years remaining in the term of their current CNA. It implicitly addressed the setting
2
of this case, however, by making the Tier 4 contribution rate the status quo from
which a successor CNA would be negotiated. Moreover, nothing in the statute
authorizes an immediate reduction of employee health care contribution rates to their
pre-Chapter 78 levels. (pp. 23-26)
3. To the extent that N.J.S.A. 18A:16-17.2 leaves any ambiguity as to legislative
intent, the legislative history of Chapter 78 resolves that ambiguity. The Legislature
viewed public employee health care costs to present a fiscal crisis and acted to
provide a long-term solution to that crisis. The Legislature did not enact Chapter 78
to achieve only a transient increase in employees’ health insurance premium
contributions, followed by an immediate reversion to pre-statute contribution rates
as soon as employees had contributed at the Tier 4 level for a year. Instead, it
envisioned that Chapter 78 would increase employee health insurance premium
contributions over the long term. In short, the construction of N.J.S.A. 18A:16-17.2
urged by the Board and adopted by PERC is consonant with the Legislature’s intent,
as reflected by Chapter 78’s stated goals and legislative history. (pp. 26-30)
4. N.J.S.A. 18A:16-17.2’s impact on employee health benefit contributions based on
the timing of a given CNA is not an “absurd result” warranting a departure from the
statute’s terms. The Legislature clearly understood that school districts negotiate
contracts on different schedules, and that the statute’s impact would vary from
district to district. Nonetheless, the Legislature envisioned that the transition
between Tier 4 health insurance premium contribution rates set by Chapter 78 and
contribution rates negotiated by school boards and employees would take place in
the negotiations for the next CNA, not at some earlier stage. (pp. 30-32)
The judgment of the Appellate Division is REVERSED, and the matter is
REMANDED to PERC.
JUSTICE ALBIN, dissenting, expresses the view that the result reached by
the majority is mandated by neither the language nor the legislative history of
Chapter 78 and deprives the Association the benefit of its CNA with the Board. Had
the Association the prescience to foresee how the majority would interpret Chapter
78, Justice Albin writes, it undoubtedly would have entered a one-year contract with
the Board, during which Tier 4 would have been implemented, and begun
negotiations anew. Justice Albin concludes that the decision here, which strikes
down terms in a negotiated agreement, is unfair and unreasonable, and not consistent
with the Legislature’s probable intent in Chapter 78.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, FERNANDEZ-VINA,
SOLOMON, and TIMPONE join in JUSTICE PATTERSON’s opinion. JUSTICE
ALBIN filed a dissent.
3
SUPREME COURT OF NEW JERSEY
A-2 September Term 2019
083091
In the Matter of
Ridgefield Park Board of Education,
Respondent-Appellant,
and
Ridgefield Park Education Association,
Petitioner-Respondent.
On certification to the Superior Court,
Appellate Division, whose opinion is reported at
459 N.J. Super. 57 (App. Div. 2019).
Argued Decided
March 3, 2020 August 17, 2020
Kerri A. Wright argued the cause for appellant (Porzio,
Bromberg & Newman, attorneys; Kerri A. Wright, of
counsel and on the briefs, David L. Disler and Thomas J.
Reilly, on the briefs).
Steven R. Cohen argued the cause for respondent
(Selikoff & Cohen, attorneys; Steven R. Cohen, of
counsel and on the briefs, Keith Waldman and Hop T.
Wechsler, on the brief).
Kathleen Asher argued the cause for amicus curiae New
Jersey School Boards Association (New Jersey School
Boards Association, attorneys; Kathleen Asher and on the
brief).
1
Ira W. Mintz argued the cause on behalf of amicus curiae
Communications Workers of America, AFL-CIO
(Weissman & Mintz, attorneys; Ira W. Mintz, on the
brief).
JUSTICE PATTERSON delivered the opinion of the Court.
This appeal arises from a dispute between the Ridgefield Park Board of
Education (Board) and the Ridgefield Park Education Association
(Association) concerning Board employees’ obligations to contribute to the
cost of their health care benefits under L. 2011, c. 78 (Chapter 78).
Chapter 78 prescribed annual increases in health care contributions over
four years for those employed by a local board of education at the time of the
statute’s enactment. N.J.S.A. 18A:16-17.1(a); N.J.S.A. 52:14-17.28c. It
required those employees to achieve full implementation of the increased
contributions (Tier 4) in the fourth year after the statute’s effective date or, for
employees already subject to a collective negotiations agreement (CNA), in the
fourth year after the expiration of that agreement. N.J.S.A. 18A:16-17.1(c);
N.J.S.A. 52:14-17.28d(c). Chapter 78 also provided that when an employer
and its employees negotiated the next CNA after the employees in a bargaining
unit reached full implementation of the share of the cost of health care
premiums mandated by N.J.S.A. 52:14-17.28c, they would negotiate employee
2
health care contributions as if that premium share were part of their previous
CNA. N.J.S.A. 18A:16-17.2.
Here, the Board employees achieved the Tier 4 contribution levels, and
thus full implementation of the mandated premium share, at the end of the first
year of their 2014-2018 CNA. The Board and the Association agreed that
Chapter 78 preempted the parties’ CNA as it applies to employees’ premium
share for the 2014-2018 CNA’s first year but disputed the statute’s impact on
employee contributions for the CNA’s remaining three years. The Board
contended that Chapter 78 preempted any negotiated term for those
contributions; the Association countered that the parties agreed to a lower level
of contributions and that their CNA, not Chapter 78, determined the
employees’ obligations.
The Board and the Association petitioned the New Jersey Public
Employment Relations Commission (PERC) for a scope-of-negotiations
determination. PERC ruled in the Board’s favor. In re Ridgefield Park Bd. of
Educ., P.E.R.C. No. 2018-14, 44 N.J.P.E.R. ¶ 49 at ___ (slip op. 12), 2017 N.J.
PERC LEXIS 82 at *13-14 (2017).
The Appellate Division reversed PERC’s determination. In re
Ridgefield Park Bd. of Educ., 459 N.J. Super. 57, 72 (App. Div. 2019). It
recognized that Chapter 78’s plain language required the Association’s
3
members to contribute to their health care costs at the Tier 4 level for an
additional three years because they had achieved that level in the first year of a
four-year CNA. Id. at 70-71. It determined, however, that application of the
statute consistent with its plain language would bring about an “absurd result,”
contravening legislative intent. Id. at 61, 70-71. The Appellate Division
required the employees to contribute only 1.5% of their salaries for their health
care benefits for the three contested years. Id. at 72.
We recognize a legitimate argument that N.J.S.A. 18A:16-17.2 makes
clear that when employees reach the Tier 4 contribution level in the first year
of a CNA, they must continue to contribute at that level until they negotiate a
successor CNA providing for a lower rate of contribution, and that successor
CNA goes into effect. When the statutory language is considered in
conjunction with Chapter 78’s purpose and legislative history, that legislative
intent is plain. We view PERC’s construction of Chapter 78 to comport with
the statute’s language and the Legislature’s stated objective to achieve a long-
term solution to a fiscal crisis. We do not share the Appellate Division’s view
that PERC’s interpretation of the statute gives rise to an absurd result.
Accordingly, we reverse the Appellate Division’s judgment and remand
the matter to PERC for further proceedings.
4
I.
A.
When the Legislature enacted Chapter 78 on June 28, 2011, it amended
several statutes relating to public employee health benefits. See L. 2011, c. 78.
Among other provisions, Chapter 78 required that a public employee
contribute a specified percentage of the premiums charged for his or her health
care benefits based on his or her annual income. N.J.S.A. 52:14-17.28c.
As part of Chapter 78, the Legislature enacted two Title 18A provisions
that are relevant to this appeal. First, N.J.S.A. 18A:16-17.1(a) prescribes
contribution levels for current school board employees that increase annually
over four years:
Notwithstanding the provisions of any other law to the
contrary, public employees, as specified herein, of a
local board of education shall contribute, through the
withholding of the contribution from the pay, salary, or
other compensation, toward the cost of health care
benefits coverage for the employee and any dependent
provided pursuant to L. 1979, c. 391 ([N.J.S.A.]
18A:16-12 et seq.), unless the provisions of subsection
b. of this section apply, in an amount that shall be
determined in accordance with section 39 of L. 2011, c.
78 ([N.J.S.A.] 52:14-17.28c), except that, employees
employed on the date on which the contribution
commences, as specified in subsection c. of this
section, shall pay:
5
during the first year in which the contribution is
effective, one-fourth of the amount of contribution;
during the second year in which the contribution is
effective, one-half of the amount of contribution; and
during the third year in which the contribution is
effective, three-fourths of the amount of contribution,
as that amount is calculated in accordance with section
39 of L. 2011, c. 78 ([N.J.S.A.] 52:14-17.28c).
Pursuant to Chapter 78’s “sunset” provision, several sections of that
statute, including N.J.S.A. 18A:16-17.1, “shall expire four years after the
effective date.” L. 2011, c. 78, § 83.
Second, in N.J.S.A. 18A:16-17.2, the Legislature addressed the impact
of Chapter 78’s tiered health care contributions on CNAs that govern board of
education employees:
A public employer and employees who are in
negotiations for the next collective negotiations
agreement to be executed after the employees in that
unit have reached full implementation of the premium
share set forth in section 39 of L. 2011, c. 78 ([N.J.S.A.]
52:14-17.28c) shall conduct negotiations concerning
contributions for health care benefits as if the full
premium share was included in the prior contract. The
public employers and public employees shall remain
bound by the provisions of sections 39 and 41 of L.
2011, c. 78 ([N.J.S.A.] 52:14-17.28c and [N.J.S.A.]
18A:16-17.1), notwithstanding the expiration of those
sections, until the full amount of the contribution
6
required by section 39 has been implemented in
accordance with the schedule set forth in section 41.
Employees subject to any collective negotiations
agreement in effect on the effective date of L. 2011, c.
78, that has an expiration date on or after the expiration
of sections 39 through 44, inclusive, of L. 2011, c. 78
([N.J.S.A.] 52:14-17.28c et al.), shall be subject, upon
expiration of that collective negotiations agreement, to
sections 39 and 41 until the health care contribution
schedule set forth in section 41 is fully implemented.
After full implementation, those contribution levels
shall become part of the parties’ collective negotiations
and shall then be subject to collective negotiations in a
manner similar to other negotiable items between the
parties.
The import of N.J.S.A. 18A:16-17.2 is the central issue in this appeal.
B.
On June 28, 2011, when Chapter 78 became law, the Board and the
Association were governed by a CNA effective from July 1, 2008 to June 30,
2011 (2008-2011 CNA), which required the Board to “provide the health care
protection hereinafter set forth” in the CNA and to “pay the full premium for
each employee and, in cases where appropriate, for family insurance
coverage.” While the 2008-2011 CNA was in effect, the Legislature enacted a
statute requiring employees of local boards of education to pay 1.5% of base
salary for their health care benefits coverage. N.J.S.A. 18A:16-17(b).
7
After the 2008-2011 agreement expired, the Board and the Association
negotiated a successor CNA for the period between July 1, 2011 and June 30,
2014 (2011-2014 CNA). That CNA went into effect three days after the
Legislature enacted Chapter 78.
The 2011-2014 CNA, like its predecessor, stated that the Board “shall
pay the full premium for each employee and, in cases where appropriate, for
family insurance coverage,” but it also provided that “[e]mployees covered
under this Article shall contribute the following percentage of their salary
towards health insurance: 1.5% or the minimum set forth by statute,
regulation, or code. Contributions shall be made through payroll deduction.”
In accordance with N.J.S.A. 18A:16-17.1, the Board’s employees paid
one-fourth of the contribution required by N.J.S.A. 52:14-17.28c (Tier 1)
during the first year in which the mandated contribution was effective, the
2011-2012 school year. They paid half of the contribution required by
N.J.S.A. 52:14-17.28c (Tier 2) during the second year in which the mandated
contribution was effective, the 2012-2013 school year. The employees paid
three-fourths of the contribution required by N.J.S.A. 52:14-17.28c (Tier 3)
during the third year in which the mandated contribution was effective, the
2013-2014 school year. The 2011-2014 CNA expired before the employees
8
achieved full implementation of the premium share set forth in N.J.S.A. 52:14-
17.28c (Tier 4).
After the 2011-2014 CNA expired, the Board and the Association
negotiated a successor agreement to be effective from July 1, 2014 to June 30,
2018 (2014-2018 CNA). On June 11, 2014, they entered into a Memorandum
of Agreement (MOA) that stated that “[a]ll portions of the expired agreement
not modified by the terms of this Memorandum shall continue to be of full
force and effect and be incorporated into the successor agreement.” The MOA
identified agreed-upon changes to be incorporated into a successor agreement.
None related to employees’ contributions to the cost of their health care
benefits.
The 2014-2018 CNA, like its predecessor, stated that “[e]mployees
covered under this Article shall contribute the following percentage of their
salary towards health insurance: 1.5% or the minimum set forth by statute,
regulation or code. Contributions shall be made through payroll deduction.”
During the 2014-2015 school year, the first year in which the 2014-2018
CNA was in effect, the employees contributed to the cost of their health care at
the full premium share required by N.J.S.A. 52:14-17.28c (Tier 4). The Board
and the Association agreed that Chapter 78 required the Association’s
members to contribute at the Tier 4 level during that initial year of the 2014 -
9
2018 CNA. During the second year of the 2014-2018 CNA, however, the
Association’s members contributed only 1.5% of their salaries to the cost of
their health care.
On August 13, 2015, PERC decided Clementon Board of Education v.
Clementon Education Ass’n, P.E.R.C. No. 2016-10, 42 N.J.P.E.R. ¶ 34, 2015
N.J. PERC LEXIS 76 (2015). In Clementon, the Board of Education
petitioned for a scope-of-negotiations determination that the health benefits
provision of its CNA was preempted by N.J.S.A. 18A:16-17.2. Id. at 118.
PERC agreed with the Clementon Board of Education, and ruled that the
statute “expressly, specifically and comprehensively sets forth that health
benefit contribution levels become negotiable in the ‘next collective
negotiations agreement after . . . full implementation’ of the four-tiered level
of employee contributions is achieved.” Id. at 118-19 (ellipsis in original)
(emphasis added) (quoting N.J.S.A. 18A:16-17.2).
On December 21, 2015, the Board informed the Association that it
viewed the health insurance provision in the 2014-2018 CNA to violate
Chapter 78, as interpreted by PERC in Clementon. The Board asked the
Association to voluntarily “revise and reform” the CNA so that the
Association’s members would contribute to their health benefits at the Tier 4
10
level for the duration of the CNA, “to comply with the law.” The Association
disagreed and declined to amend the CNA.
The Board then reinstated payroll deductions reflecting employee
contributions to health care costs at the Tier 4 level. The Board took the
position that employee contributions would remain at the Tier 4 level for the
duration of the 2014-2018 CNA and announced that it would freeze employee
salaries until the employees had contributed amounts sufficient to satisfy their
obligations under Chapter 78.
C.
1.
The Association filed a grievance with respect to its members’ health
care contributions. The Board and Association agreed to hold the grievance in
abeyance pending the Appellate Division’s review of PERC’s decision in
Clementon.
The Appellate Division, however, did not decide the question raised in
the Clementon appeal. In the wake of PERC’s decision in that matter, the
parties in Clementon negotiated two new agreements to replace their four-year
CNA: a CNA to be in effect for only one year, during which the employees
would contribute to their health care costs at Tier 4 levels, and a three-year
CNA, under which the employees would contribute at a negotiated rate. Given
11
the parties’ resolution of the dispute in Clementon, the Appellate Division
dismissed the appeal in that case as moot.
After the Appellate Division dismissed the appeal in Clementon, the
Association reinstated its grievance in this matter. The Superintendent of
Schools denied the grievance, citing PERC’s decision in Clementon. The
Association advanced its grievance to the Board, which also denied it. At the
Association’s request, PERC referred the matter to arbitration and appointed
an arbitrator.
The Association filed with PERC a petition for a scope-of-negotiations
determination, requesting binding arbitration. The Association contended that
Chapter 78 did not preempt the 1.5% contribution rate set forth in the 2014 -
2018 CNA. The Board petitioned for a scope-of-negotiations determination in
which it sought to enjoin the binding arbitration requested by the Board.
PERC consolidated the two scope-of-negotiations petitions. Relying on
its decision in Clementon, PERC ruled in favor of the Board. In re Ridgefield
Park Bd. of Educ., 44 N.J.P.E.R. ¶ 49 at ___ (slip op.at 12).
PERC noted that “N.J.S.A. 18A:16-17.2 expressly, specifically and
comprehensively sets forth that health benefit contribution levels become
negotiable in the ‘next collective negotiations agreement after . . . full
implementation’ of the four-tiered level of employee contributions is
12
achieved.” Id. ¶ 49 at ___ (slip op. at 4-5) (quoting Clementon Bd. of Educ.,
42 N.J.P.E.R. ¶ 34 at 118-19). PERC reiterated its holding in Clementon that
“depending on the length of the successor agreement that the Board and
Association agree to,” the disputed health care costs provision of the parties’
CNA “may be preempted by N.J.S.A. 18A:16-17.2.” Id. ¶ 49 at ___ (slip op.
at 5) (quoting Clementon Bd. of Educ., 42 N.J.P.E.R. ¶ 34 at 118-19). It
restated the example it gave in the Clementon decision:
if the parties agree to a contract with a one-year term,
[the parties’ negotiated health care contribution
provision] would be preempted by N.J.S.A. 18A:16-
17.2 from July 1, 2014 to June 30, 2015, the final year
of employee contributions at Tier 4 levels. However, it
would not be preempted in the “next” agreement when
employee contribution levels would become
negotiable. Alternatively, if the parties agree to a
multi-year successor agreement, the express language
of N.J.S.A. 18A:16-17.2 would preempt [the parties’
negotiated health care contribution provision] for the
first year of the successor agreement as well as any
additional years in the agreement until the “next”
agreement when employee contribution levels would
become negotiable.
[Id. ¶ 49 at ___ (slip op. at 5) (quoting Clementon Bd.
of Educ., 42 N.J.P.E.R. ¶ 34 at 118-19).]
Addressing this matter, PERC reasoned that because “the tier four
contribution level was reached in the first year of the parties’ 2014-2018 CNA,
the ‘next collective negotiations’ agreement within the meaning of [N.J.S.A.
13
18A:16-17.2] will be the agreement that succeeds the 2014-2018 CNA.” Id. ¶
49 at ___ (slip op. at 10). PERC found “[n]othing in Chapter 78 pertaining to
employee health care contributions” to suggest a different construction of
N.J.S.A. 18A:16-17.2 and concluded that “any other interpretation fails to give
meaning to the specific terms” of the statute. Id. ¶ 49 at ___ (slip op. at 11).
Accordingly, PERC held that the health insurance premium contribution
rate set forth in the 2014-2018 CNA was preempted by Chapter 78 and granted
the Board’s request for a restraint of binding arbitration as to that issue. 1 Id. ¶
49 at ___ (slip op. at 11).
2.
The Association appealed. The Appellate Division granted amicus
curiae status to the New Jersey School Boards Association and the
Communications Workers of America, AFL-CIO.
The Appellate Division acknowledged that PERC’s determinations are
ordinarily afforded deference and will be disturbed only if they are “clearly
demonstrated to be arbitrary or capricious.” Ridgefield Park Bd. of Educ., 459
1
PERC noted that the record was unclear as to whether the Association had
requested negotiation of the amount and timing of any recoupment from
employees of underpaid amounts. Ridgefield Park Bd. of Educ., 44 N.J.P.E.R.
¶ 49 at ___ (slip op. at 11). It ordered that if the Association had not
previously sought negotiations on the amount and timing of recoupment, “the
Board shall meet and negotiate with the Association over those issues upon
request.” Id. ¶ 49 at ___ (slip op. at 12).
14
N.J. Super. at 69 (quoting City of Jersey City v. Jersey City Police Officers
Benevolent Ass’n, 154 N.J. 555, 568 (1998)). The court reasoned, however,
that it “‘owe[d] no particular deference to PERC’s interpretation of Chapter
[78],’ because despite ‘affect[ing] employer/employee relations, PERC is not
charged with administering’” that statute. Ibid. (third alteration in original)
(quoting In re New Brunswick Mun. Emps. Ass’n, 453 N.J. Super. 408, 413
(App. Div. 2018)). The court accordingly reviewed PERC’s interpretation of
Chapter 78 de novo. Ibid.
The Appellate Division recognized that “[t]he unambiguous language of
the first sentence of N.J.S.A. 18A:16-17.2 provides that Chapter 78 Tier 4
contribution rates shall be deemed the status quo in any negotiations after full
implementation of Chapter 78 rates,” and that, in this matter, it was not until
the end of the 2014-2015 school year that “full implementation” of those rates
occurred. Id. at 70. The court acknowledged that “when the parties were
negotiating the 2014-2018 CNA, they were not negotiating ‘the next collective
negotiations agreement to be executed after the employees in that unit have
reached full implementation of the premium share[,]’ and the terms on health
care contributions were not subject to collective negotiations.” Id. at 70-71
(quoting N.J.S.A. 18A:16-17.2).
15
The Appellate Division, however, found the parties’ actions to be
“telling,” in that the Board required the Association’s members to pay only
1.5% of their salaries as the 2014-2018 CNA provided until PERC decided
Clementon. Id. at 72. The court dismissed as “shortsighted” PERC’s
suggestion that the Association could have avoided a four-year period of Tier 4
contributions by entering into a one-year agreement followed by a three-year
agreement. Ibid. In the Appellate Division’s view, PERC’s interpretation of
Chapter 78 “create[d] an absurd result” by compelling employees to
“contribute at the Tier 4 level over the entirety of the 2014-2018 CNA” -- or to
adhere to the statutorily imposed rates for a total of seven years -- which
would be contrary to the Legislature’s “clear intent that public employees
make these statutorily imposed increases over the course of four years.” Id. at
71.
The Appellate Division therefore reversed PERC’s determination and
remanded for PERC to implement a remedy that would “refund Association
members for all of their health insurance contributions exceeding 1.5% of their
salaries for the pay periods covering July 1, 2015 through June 30, 2018.” Id.
at 72. It denied the Board’s motions for reconsideration of its decision and for
a stay of its judgment.
16
3.
We granted the Board’s petition for certification. 239 N.J. 393 (2019).
II.
A.
The Board contends that the only question before the Appellate Division
was whether Chapter 78 preempted the provision in the parties’ 2014-2018
CNA that set employee contributions for health care at “1.5% or the minimum
set forth by statute, regulation, or code.” In the Board’s view, the Appellate
Division agreed with the Board’s assertion that Chapter 78 preempted that
language in the parties’ CNA. The Board asserts that the Appellate Division’s
interpretation of the statute’s plain language should have ended the inquiry.
The Board argues that because N.J.A.C. 19:13-1.1 precludes the
resolution of factual issues during a scope-of-negotiations proceeding before
PERC, it did not submit evidence to PERC that would have demonstrated that
the parties never agreed to the 1.5% limitation found by the Appellate
Division. It contends that the Appellate Division improperly considered the
Association’s certification and engaged in factfinding to rule in favor of the
Association, thus usurping the role of PERC and the designated arbitrator.
17
B.
The Association disputes the Board’s contention that the Appellate
Division viewed Chapter 78 to preempt the 2014-2018 CNA. It states that the
Appellate Division declined to find preemption in order to avoid an absurd
result that would have contravened public policy, and that the court properly
construed the statute as the Legislature intended to achieve a rational outcome .
The Association argues that the Appellate Division did not engage in
improper factfinding in its scope-of-negotiations determination, and that the
court properly decided the appeal based on the facts stated in an uncontested
certification that it submitted to the court. It asserts that the remedy sought by
the Board would nullify a negotiated, executed, and implemented CNA
provision, merely because the parties agreed to a single CNA, not two separate
contracts, for the 2014-2018 period.
C.
PERC advised the Court that it took no position on the Board’s petition
for certification. PERC similarly takes no position on the merits of this
appeal.
D.
Amicus curiae New Jersey School Boards Association asserts that
Chapter 78 preempts collective negotiations with respect to employee health
18
benefit contributions for any CNA that is effective prior to the full
implementation of Tier 4 contributions that the statute requires. Amicus
contends that PERC’s decision, which may encourage parties to enter into
shorter-term contracts, does not contravene public policy or destabilize labor
relations.
E.
Amicus curiae Communications Workers of America, AFL-CIO concurs
with the Association that the Appellate Division properly held that PERC’s
decision gave rise to an absurd result. It contends that if the Legislature
intended that employees contribute to their health care costs at Tier 4 levels for
the four years of a CNA, Chapter 78 would have clearly mandated that
outcome.
III.
A.
“PERC has primary jurisdiction to determine in the first instance
whether a matter in dispute is within the scope of collective negotiations.”
New Brunswick Mun. Emps. Ass’n, 453 N.J. Super. at 413 (citing N.J.S.A.
34:13A-5.4(d)). As we have noted,
[t]he judicial role when reviewing an action of an
administrative agency is generally restricted to three
inquiries:
19
(1) whether the agency’s action violates express
or implied legislative policies, that is, did the
agency follow the law; (2) whether the record
contains substantial evidence to support the
findings on which the agency bases its action;
and (3) whether, in applying the legislative policy
to the facts, the agency erred in reaching a
conclusion that could not reasonably have been
made on a showing of the relevant factors.
[Jersey City Police Officers Benevolent Ass’n, 154 N.J.
at 567 (quoting In re Musick, 143 N.J. 206, 216
(1996)).]
Thus, “[i]n the absence of constitutional concerns or countervailing
expressions of legislative intent, we apply a deferential standard of review to
determinations made by PERC.” Ibid.
Nonetheless, “when an agency’s decision is based on the ‘agency’s
interpretation of a statute or its determination of a strictly legal issue,’ we are
not bound by the agency’s interpretation.” Saccone v. Bd. of Trs., PFRS, 219
N.J. 369, 380 (2014) (quoting Russo v. Bd. of Trs., PFRS, 206 N.J. 14, 27
(2011)). Instead, we review that determination de novo. Ibid.
B.
In this appeal, we review PERC’s decision that the employees’ health
insurance premium contribution rates for the duration of the parties’ 2014 -
2018 CNA were non-negotiable. See Ridgefield Park Bd. of Educ., 44
N.J.P.E.R. ¶ 49 at ___ (slip op. at 10-11).
20
PERC’s scope-of-negotiations determination is governed by a “time-
honored” standard. Robbinsville Twp. Bd. of Educ. v. Washington Twp.
Educ. Ass’n, 227 N.J. 192, 199 (2016). In negotiations between public
employers and their employees, a subject
is properly negotiable when it satisfies a three-part test:
“(1) the item intimately and directly affects the work
and welfare of public employees; (2) the subject has not
been fully or partially preempted by statute or
regulation; and (3) a negotiated agreement would not
significantly interfere with the determination of
governmental policy.”
[Ibid. (quoting In re Local 195, 88 N.J. 393, 403-04
(1982)).]
See also In re Cty. of Atl., 230 N.J. 237, 253 (2017) (same).
This case implicates the preemption prong of the Local 195 test. In the
preemption inquiry, “the mere existence of legislation relating to a given term
or condition of employment does not automatically preclude negotiations.”
Bethlehem Twp. Bd. of Educ. v. Bethlehem Twp. Educ. Ass’n, 91 N.J. 38, 44
(1982). Instead, “[n]egotiation is preempted only if the regulation fixes a term
and condition of employment ‘expressly, specifically and comprehensively.’ ”
Ibid. (quoting Council of N.J. State Coll. Locals, NJSFT-AFT/AFL-CIO v.
State Bd. of Higher Educ., 91 N.J. 18, 30 (1982)). Under the preemption
standard,
21
[t]he legislative provision must “speak in the
imperative and leave nothing to the discretion of the
public employer.” If the legislation, which
encompasses agency regulations, contemplates
discretionary limits or sets a minimum or maximum
term or condition, then negotiation will be confined
within these limits. Thus, the rule established is that
legislation “which expressly set[s] terms and conditions
of employment . . . for public employees may not be
contravened by negotiated agreement.”
[Ibid. (citations omitted).]
Thus, to review PERC’s decision that health insurance premium
contribution rates governing the Board’s employees were non-negotiable, we
determine whether the Legislature intended N.J.S.A. 18A:16-17.2 to preempt
the parties’ negotiations as to that issue during the relevant years.
C.
When a court construes a statute, its “paramount goal” is to discern the
Legislature’s intent. DiProspero v. Penn, 183 N.J. 477, 492 (2005). We “look
first to the statute’s actual language and ascribe to its words their ordinary
meaning.” Kean Fed’n of Teachers v. Morell, 233 N.J. 566, 583 (2018).
“‘[T]he best indicator of [the Legislature’s] intent is the statutory language,’
thus it is the first place we look.” Richardson v. Bd. of Trs., PFRS, 192 N.J.
189, 195 (2007) (first alteration in original) (quoting DiProspero, 183 N.J. at
22
492). “If the plain language leads to a clear and unambiguous result, then our
interpretive process is over.” Ibid.
Nonetheless, “not every statute is a model of clarity.” Wilson ex rel
Manzano v. City of Jersey City, 209 N.J. 558, 572 (2012). “Where the
statutory language is ambiguous, we may consider extrinsic materials such as
legislative history, committee reports, and other relevant sources.” Kean
Fed’n of Teachers, 233 N.J. at 583. “Where available, ‘[t]he official
legislative history and legislative statements serve as valuable interpretive
aid[s] in determining the Legislature’s intent.’” State v. Drury, 190 N.J. 197,
209 (2007) (alterations in original) (quoting State v. McQuaid, 147 N.J. 464,
480 (1997)).
D.
1.
Guided by those principles of statutory construction, we consider
whether the plain language of N.J.S.A. 18A:16-17.2 evinces the Legislature’s
intent to preempt any negotiated provision in the parties’ 2014-2018 CNA
regarding employee contributions to their health care benefits. 2
2
We do not concur with the Board that the Appellate Division conceded that
N.J.S.A. 18A:16-17.2 preempts the health care contribution terms of a
negotiated CNA. Invoking “[t]he unambiguous language of the first sentence
of N.J.S.A. 18A:16-17.2,” the Appellate Division acknowledged that the 2014-
2018 CNA was not the “‘next collective negotiations agreement to be executed
23
As the parties agree and the Appellate Division recognized, the
employees in this matter did not reach “full implementation” of the “premium
share set forth in [N.J.S.A. 52:14-17.28c]” until the 2014-2015 school year
concluded. See N.J.S.A. 18A:16-17.2; Ridgefield Park Bd. of Educ., 459 N.J.
Super. at 70 (noting that “full implementation of Chapter 78 did not occur until
the end of the 2014-2015 school year, which was the first year of the 2014-
2018 CNA”). Accordingly, the CNA in effect when the employees reached
“full implementation” of the premium share was the 2014-2018 CNA.
N.J.S.A. 18A:16-17.2’s first sentence addresses “public employer[s] and
employees who are in negotiations for the next collective negotiations
agreement to be executed after the employees in that unit have reached full
implementation of the premium share set forth in [N.J.S.A. 52:14-17.28c].”
(emphases added). Applied here, that statutory language refers not to the
after the employees in that unit have reached full implementation of the
premium share,’” and that under the statute, “the terms on health care
contributions were not subject to collective negotiations.” Ridgefield Park Bd.
of Educ., 459 N.J. Super. at 70-71 (quoting N.J.S.A. 18A:16-17.2). The
appellate court nonetheless declined to construe the statute to preempt the
parties’ CNA on the grounds that a literal interpretation of N.J.S.A. 18A:16-
17.2 would produce an “absurd result,” and would contravene “the clear intent
that public employees make these statutorily imposed increases over the course
of four years.” Id. at 61, 70-71. Having construed N.J.S.A. 18A:16-17.2 as
the Association urged, the Appellate Division held that the statute did not
preempt the 2014-2018 CNA’s health care contribution provisions. Id. at 71-
72.
24
parties’ negotiations for the 2014-2018 CNA, but to their negotiations for its
successor agreement. Thus, notwithstanding L. 2011, c. 78, § 83 -- Chapter
78’s “sunset” provision -- the Board argues that the statute indicates that the
employees’ health insurance premium contribution rate was not negotiable
until the Board and the Association negotiated a successor CNA.
In its final sentence, N.J.S.A. 18A:16-17.2 provides that after “full
implementation,” the employees’ contribution levels “shall become part of the
parties’ collective negotiations and shall then be subject to collective
negotiations in a manner similar to other negotiable items between the parties.”
The Legislature thus made the achieved Tier 4 contribution level the status quo
for purposes of negotiating contributions for the successor contract.
Accordingly, during the negotiations for the next CNA after full
implementation is reached -- here, the negotiations for the agreement that
would succeed the 2014-2018 CNA -- the Tier 4 contribution levels would
constitute the status quo.
In N.J.S.A. 18A:16-17.2, the Legislature did not expressly discuss the
scenario in this case, in which the employees reached “full implementation” of
the premium share with three years remaining in the term of their current
CNA. It implicitly addressed the setting of this case, however, by making the
Tier 4 contribution rate the status quo from which a successor CNA would be
25
negotiated. Moreover, nothing in the statute authorizes an immediate
reduction of employee health care contribution rates to their pre-Chapter 78
levels. To the contrary, the Board submits, N.J.S.A. 18A:16-17.2 provides that
once achieved, Tier 4 contribution levels are to remain in effect unless and
until the parties negotiate lower health insurance premium contribution rates in
the next CNA.
The Board has thus presented a legitimate argument that the plain
language of N.J.S.A. 18A:16-17.2 requires that the employees sustain their
health insurance premium contributions at Tier 4 levels for the entire span of
the 2014-2018 agreement, and that the statutory language resolves the parties’
dispute.
2.
To the extent that N.J.S.A. 18A:16-17.2 leaves any ambiguity as to
legislative intent, the legislative history of Chapter 78 resolves that ambiguity.
It demonstrates that the Legislature viewed public employee health care costs
to present a fiscal crisis and that it acted to provide a long-term solution to that
crisis. The legislative history bolsters the Board’s argument that the
Legislature intended that Tier 4 contribution rates would remain in effect for
the duration of the term of the CNA in effect when the employees reached
“full implementation.” N.J.S.A. 18A:16-17.2.
26
When the Legislature enacted Chapter 78, it addressed state and local
government contributions to employee health benefits that a succession of
governors and legislators viewed to be unsustainable. In his 2005 Executive
Order appointing the Benefits Review Task Force, Governor Richard J. Codey
stated that “continuing increases in employee benefits costs contribute to the
structural deficit that New Jersey faces every year,” and noted that employee
health care costs were expected to increase to twenty percent of the state
budget by 2010. Exec. Order No. 39 (May 25, 2005), 37 N.J.R. 2109(c) (June
20, 2005). In its Report issued later that year, Governor Codey’s Task Force
found that “[h]ealth care changes are the most difficult to address but in light
of the rapid increase in costs, changes are necessary,” and that “while wages
are known and increases prescribed, healthcare costs are unknown, not
prescribed, and annual increases often far exceed the rate of wage increases.”
Report of the Benefits Review Task Force to Acting Gov. Richard J. Codey 4,
27 (Dec. 1, 2005). The Task Force recommended “that all active and retired
employees share in the cost of health care,” with the State’s contribution fixed
at a specific amount. Id. at 27.
The following year, by concurrent resolution, the Legislature appointed
four joint legislative committees to identify methods of addressing “[t]his
State’s high property taxes,” viewed by the public “as regressive, inequitable,
27
burdensome, and a threat to the financial security of individuals and
communities.” Assemb. Con. Res. No. 3, 212th Leg. 2 (July 28, 2006). One
of the committees that the Legislature created, the Joint Legislative Committee
on Public Employee Benefit Reform, reported to the Legislature later that year
that its “investigation of health benefits issues revealed a system plagued by
the skyrocketing costs of health care that have dramatically increased the cost
of health benefits for both current and retired public employees.” Spec. Sess.
J. Leg. Comm., Pub. Emps. Benefits Reform Final Report 57 (2006). The
Joint Legislative Committee commented that “[w]hether some [of the
Committee’s recommendations] are achieved through collective bargaining
rather than through legislation is less significant than ensuring that they are, in
fact, achieved. Collective bargaining notwithstanding, it is clear that the
Legislature needs to attach permanency to a number of the recommended
reforms.” Id. at 2.
In testimony before the Senate Budget and Appropriations Committee in
support of Senate Bill 2937 -- the bill later enacted as Chapter 78 -- its
sponsor, Senate President Stephen M. Sweeney, stressed the need for greater
employee contributions to combat rising health care costs. See Darryl
Isherwood, Observer, Full Text of Sen. Steve Sweeney’s Testimony on
Pension and Benefit Reform (June 16, 2011), https://observer.com/2011/06/
28
full-text-of-sen-steve-sweeneys-testimony-on-pension-and-benefit-reform/.
Stating that “[p]ublic employees need to pay a greater share of their health
costs,” Senate President Sweeney commented that the Legislature “must be
fair to them and their families. But we must also be fair to the taxpayers who
are on the hook. Anyone in this day and age who thinks health care can come
practically free is simply not living in reality.” Ibid.
After Chapter 78 was enacted, Governor Christopher J. Christie issued a
statement that the health care benefit provisions in the statute “will
substantially lower health benefits costs for local governments, including those
at the county, school and municipal levels, representing another major step
forward in providing real, long-term property tax relief.” Press Release,
Office of the Governor, Governor Christie Signs into Law Bold, Bipartisan
Pension and Health Benefits Reform (June 28, 2011).
The gubernatorial and legislative initiatives that led to Chapter 78 and
the legislative history of the statute itself thus confirm the Legislature’s intent.
The Legislature clearly viewed the increasing cost of employee health care to
be among the State’s most serious fiscal challenges, destined to worsen absent
significant reform. The Legislature did not enact Chapter 78 to achieve only a
transient increase in employees’ health insurance premium contributions,
followed by an immediate reversion to pre-statute contribution rates as soon as
29
employees had contributed at the Tier 4 level for a year. Instead, it envisioned
that Chapter 78 would increase employee health insurance premium
contributions over the long term.
In short, the construction of N.J.S.A. 18A:16-17.2 urged by the Board
and adopted by PERC is consonant with the Legislature’s intent, as reflected
by Chapter 78’s stated goals and legislative history.
3.
Finally, we do not share the Appellate Division’s view that N.J.S.A.
18A:16-17.2 should be construed contrary to its plain language because the
statute would otherwise produce an “absurd result.” Ridgefield Park Bd. of
Educ., 459 N.J. Super. at 61, 70-71. To the Appellate Division, the absurd
result was that by virtue of the “timing and length of the successor contract,”
the Association’s members would be required to “contribute at the Tier 4 level
for three additional years,” thus suffering a financial hardship. Id. at 61.
It is clear that N.J.S.A. 18A:16-17.2’s financial impact on school district
employees varied from district to district. If a four-year CNA governing
employees in a particular district went into effect in 2011, the year that
Chapter 78 was enacted, those employees would achieve “full implementation”
in the last year of that contract and could immediately negotiate health
insurance premium contribution rates for the next CNA. N.J.S.A. 18A:16-
30
17.2. The timing was less favorable for employees of the Ridgefield Park
School District, who did not achieve “full implementation” for purposes of
N.J.S.A. 18A:16-17.2 until the first year of their 2014-2018 CNA. The
Association had the option to seek a one-year contract followed by a three-year
contract as did the employees in Clementon Board of Education, but if that
proved impossible, N.J.S.A. 18A:16-17.2 required the Board’s employees pay
at Tier 4 levels until the next CNA took effect.
N.J.S.A. 18A:16-17.2’s impact on employee health benefit contributions
based on the timing of a given CNA is not an “absurd result” warranting a
departure from the statute’s terms. The Legislature has the authority to make
judgments about how best to achieve its objectives, subject to constitutional
constraints. See Taxpayers Ass’n of Weymouth Twp. v. Weymouth Township,
80 N.J. 6, 40 (1976) (rejecting equal protection and due process challenges to a
zoning ordinance regarding senior housing because the disputed age restriction
was “a legislative judgment which ought not be disturbed by the judiciary
unless it exceeds the bounds of reasonable choice”); State League of
Municipalities v. State, 257 N.J. Super. 509, 519 (App. Div. 1992) (holding,
with respect to an equal protection challenge to a statute, that “[t]he
Legislature in addressing an issue must invariably draw lines and make
choices, thereby creating some inequity as to those included or excluded. As
31
long as ‘the bounds of reasonable choice,’ are not exceeded, the courts must
defer to the legislative judgment”) (quoting Taxpayers Ass’n of Weymouth
Twp., 80 N.J. at 40); Piscopo v. Lemi Excavating Co., 215 N.J. Super. 149,
152 (App. Div. 1986) (finding that the Legislature’s determination that age
eighteen marked the end of a child’s dependency did “not warrant [the
statute’s] invalidation” even though “the classification [was] in some respect
imperfect or result[ed] in some inequities in practice” because the decision did
not exceed “the bounds of reasonable choice” (quoting Taxpayers Ass’n of
Weymouth Twp., 80 N.J. at 40)).
Here, the Legislature intended to prescribe employee health insurance
contribution rates until the employees achieved full implementation of the
premium share and the parties negotiated a successor CNA. N.J.S.A. 18A:16-
17.2. It clearly understood that different school districts negotiate contracts on
different schedules, and that the statute’s impact would vary from district to
district. Nonetheless, the Legislature envisioned that the transition between
Tier 4 health insurance premium contribution rates set by Chapter 78 and
contribution rates negotiated by school boards and employees would take place
in the negotiations for the next CNA, not at some earlier stage. N.J.S.A.
18A:16-17.2. We do not view the Legislature’s determination to generate an
absurd result, and we decline to nullify its judgment.
32
E.
We concur with PERC’s determination that the health insurance
premium contribution rates paid by the Association’s members were
“preempted by statute” and therefore non-negotiable under the second factor of
the Local 195 test. See Local 195, 88 N.J. at 403-05. We conclude that PERC
properly granted the Board’s request for a restraint of binding arbitration as to
the health insurance premium contribution rates applicable to the Association’s
members.
IV.
The judgment of the Appellate Division is reversed, and the matter is
remanded to PERC for further proceedings in accordance with this decision.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA,
FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE
PATTERSON’s opinion. JUSTICE ALBIN filed a dissent.
33
In the Matter of
Ridgefield Park Board of Education,
Respondent-Appellant,
and
Ridgefield Park Education Association,
Petitioner-Respondent.
JUSTICE ALBIN, dissenting.
Neither the language nor the legislative history of L. 2011, c. 78
(Chapter 78) mandates the result reached today by the majority, a result that
denies the Ridgefield Park Education Association (Association) the benefit of
its collective negotiation agreement (CNA) with the Ridgefield Park Board of
Education (Board). The majority’s strained interpretation of Chapter 78 -- an
interpretation that the Appellate Division concluded “creates an absurd result”
-- means that teachers and other employees in the school district will see their
salaries substantially reduced to pay for health care costs in clear
contravention of the agreement they reached with the Board. See In re
Ridgefield Park Bd. of Educ., 459 N.J. Super. 57, 71 (App. Div. 2019).
1
Because, in my view, the majority has not read Chapter 78 in a way that
fulfills the probable legislative intent consistent with the bargained for
agreement between the Association and the Board, I respectfully dissent.
I.
The Legislature enacted Chapter 78 to address the fiscal crisis faced by
the State and local governments saddled with rising health care costs. The
objective of the legislation was to require greater health care contributions by
public employees -- a scheme to be implemented over a four-year period -- and
then to allow public employees and local governments to negotiate the level of
public-employee health care contributions with the starting point being the
fourth-year contribution rate under Chapter 78. See N.J.S.A. 18A:16-17.1 and
-17.2. Chapter 78’s sunset provision did not mandate that the fourth-year
contribution rate continue into a fifth, sixth, or seventh year, unless those were
the terms agreed to by an education association and a school board. See
L. 2011, c. 78, § 83.
We are hampered by a limited record, but this much we do know. The
Board and the Association signed a CNA effective July 1, 2011 to June 30,
2014 that required employees to contribute 1.5% of their salary or the statutory
minimum to health care costs for the duration of the agreement. Chapter 78
went into effect shortly before the start of the CNA.
2
By operation of law, Chapter 78 superseded the 2011-2014 CNA’s terms
on the subject of employees’ health care contributions. Over the next four
years, Chapter 78 imposed on public employees the obligation to contribute, in
each succeeding year, a greater percentage of their salaries to pay for health
care coverage. The Tier 1, 2, and 3 contribution rates covered the length of the
three-year 2011-2014 CNA.
As that agreement neared its end, the Board and the Association
negotiated a four-year CNA effective July 1, 2014 to June 30, 2018, requiring
the Board’s employees to contribute 1.5% of their salary or the statutory
minimum for their health care coverage. The Board and the Association knew
that the Tier 4 contribution rate applied to the first-year of the CNA, and the
appropriate deductions were made to the employees’ salaries in accordance
with Chapter 78.1 The Board and Association also knew that Chapter 78 had a
sunset provision and that, after the Tier 4 year, the parties could mutually
agree to health care contributions below the Tier 4 rate.
Had the Board and the Association intended the Tier 4 contribution rate
to govern the length of the four-year contract, the CNA’s language presumably
1
The record reflects that under Tier 4, employees earning from $50,000 to
over $95,000 would contribute anywhere between 20% and 35% of the cost of
their health care benefits for single coverage; between 12% and 30% for
family coverage; and between 15% and 30% of the cost of health care benefits
for member/spouse/partner or parent/children coverage.
3
would have said so. Surely, had the parties intended the Tier 4 contribution
rate, the CNA would not have included the language they put in the contract
-- that employees would contribute 1.5% of their salary or the statutory
minimum for their health care coverage. The best evidence of the
understanding of the parties’ intent is the Board’s actions. In the second year
of the new CNA, the Board deducted not the Tier 4 contribution rate, but the
1.5% of salary rate.
Not until the August 13, 2015 Public Employment Relations
Commission decision in Clementon Board of Education v. Clementon
Education Ass’n, P.E.R.C. No. 2016-10, 42 N.J.P.E.R. ¶ 34, 2015 N.J. PERC
LEXIS 76 (2015), did the Board have a change of heart and demand that its
employees pay the Tier 4 rates rather than the negotiated rates for the
remainder of the 2014-2018 CNA.
II.
The outcome of this appeal turns on the interpretation of N.J.S.A.
18A:16-17.2. The relevant portion of that statute provides:
A public employer and employees who are in
negotiations for the next collective negotiations
agreement to be executed after the employees in that
unit have reached full implementation of the premium
share set forth in section 39 of L. 2011, c. 78 ([N.J.S.A.]
52:14-17.28c) shall conduct negotiations concerning
contributions for health care benefits as if the full
premium share was included in the prior contract. The
4
public employers and public employees shall remain
bound by the provisions of sections 39 and 41 of L.
2011, c. 78 ([N.J.S.A.] 52:14-17.28c and
[N.J.S.A.]18:16-17.1), notwithstanding the expiration
of those sections, until the full amount of the
contribution required by section 39 has been
implemented in accordance with the schedule set forth
in section 41.
....
After full implementation, those contribution levels
shall become part of the parties’ collective negotiations
and shall then be subject to collective negotiations in a
manner similar to other negotiable items between the
parties.
[N.J.S.A. 18A:16-17.2 (emphasis added).]
For sure, the statute is not a model of clarity, and the Legislature likely
did not contemplate the contractual scenario before us.
One point is clear, however. The Board and the Association went into
their contractual negotiations understanding that Tier 4 had to be implemented
in the first year of the four-year contract and that after that first year the
employees would have “reached full implementation.”
One reasonable interpretation of the statute is that “the next collective
negotiations agreement” refers to the CNA that would begin on July 1, 2018.
But if that is the case, only then would the Tier 4 rate “become part of the
parties’ collective negotiations” and only then would the parties “conduct
negotiations concerning contributions for health care benefits as if the full
5
premium share was included in the prior contract.” See N.J.S.A. 18A:16-17.2.
If that interpretation is correct, nothing in Chapter 78 states that the parties
were not free to negotiate the 2014-2018 CNA without the Tier 4 level as the
starting point of the negotiations.
Nonetheless, we should not presume that the Tier 4 levels did not
“become part of the parties’ collective negotiations” when the Board and the
Association hammered out the terms of the 2014-2018 CNA. There is no
reason not to effectuate the intent of the parties according to the terms of the
CNA. Chapter 78 does not mandate nonnegotiable Tier 4 contribution rates
after employees reach full implementation. Nor does Chapter 78’s legislative
history suggest such an outcome.
Nowhere in Chapter 78 did the Legislature dictate that the negotiating
parties could not agree to a four-year CNA in which, after the employees met
their Tier 4 obligation in the first year of the contract, the employees would be
subject to lesser health care contributions in the three succeeding years. The
Legislature did not require an artificial construct -- compelling the parties to
enter a single-year contract covering the Tier 4 obligation and then negotiate a
new contract.
The majority reads Chapter 78 in a way to extinguish the expectations of
the negotiating parties and impose on the public employees the more onerous
6
Tier 4 obligations for an additional three years beyond the sunset provision.
The majority has construed Chapter 78 not to reach a logical but an inequitable
conclusion.
III.
Had the Association the prescience to foresee how the majority would
interpret Chapter 78, it undoubtedly would have entered a one-year contract
with the Board, during which Tier 4 would have been implemented, and begun
negotiations anew. The wholly unfair and unreasonable result reached in this
case, which strikes down terms in a negotiated agreement, is not consistent
with the Legislature’s probable intent in passing Chapter 78.
I therefore respectfully dissent.
7
|
562 F.Supp. 210 (1983)
Lawrence SCHMIDT, et al., Plaintiffs,
v.
NATIONAL ORGANIZATION FOR WOMEN, et al., Defendants.
No. TCA 82-1050.
United States District Court, N.D. Florida, Tallahassee Division.
April 1, 1983.
*211 *212 Gary J. Anton, Tallahassee, Fla., for plaintiffs.
Solaman G. Lippman, Ronald L. Castle, Washington, D.C., Harry O. Thomas, and Martha Barnett, Tallahassee, Fla., for defendant National Organization for Women.
Lindsey Gorman, Tallahassee, Fla., for defendant Intern. Alliance of Theatrical Stage Employees and Motion Picture Operators, Local 909.
Jerome Novey, Tallahassee, Fla., for defendant Kenneth Beattie, d/b/a Southern Sound and Lights of Tallahassee.
ORDER
PAUL, District Judge.
Before the court is the plaintiffs' motion for remand and for costs and attorneys' fees (Doc 8). The court heard argument on the motion on March 24, 1983 in Tallahassee, Florida. This action was originally filed in the Circuit Court of the Second Judicial Circuit of the State of Florida in and for Leon County, Florida, on June 28, 1982. The defendants in the action are the National Organization for Women, a foreign corporation; the International Alliance of Theatrical Stage Employees and Motion Picture Operators, Local 909, a domestic labor organization; John J. Holt, individually and in his official capacity as President of Local 909; and Kenneth Beattie, d/b/a Southern Sound and Lights of Tallahassee. The petition for removal in this action was filed on September 20, 1983 (Doc 4) with the consent and joinder of the other defendants.
Plaintiffs seek remand of this action to state court on the grounds that defendants' petition for removal was untimely filed. 28 U.S.C. § 1446(b) provides that the petition for removal of a civil action "shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading...." Where, as here, there are multiple defendants, the law is clear that all defendants who have been served, except purely nominal parties, must join the removal petition. Tri-Cities Newspapers, Inc. v. Tri-Cities Printing Pressman & Assistants' Local 349, 427 F.2d 325 (5th Cir. 1970); Friedrich v. Whittaker Corp., 467 F.Supp. 1012 (S.D.Tex.1979); Crawford v. Fargo Manufacturing Co., 341 F.Supp. 762 (M.D.Fla.1972); Transport Indemnity Co. v. Financial Trust Co., 339 F.Supp. 405 (C.D. Cal.1972). It is also generally agreed that where there are multiple defendants, the thirty day period commences to run upon the date of service on the first defendant served who is substantially entitled to petition for removal. Thus, if the defendant who was served first fails to remove within thirty days, a subsequently served defendant may not remove even with the first defendant's consent. See Quick Erectors, Inc. v. Seattle Bronze Corp., 524 F.Supp. 351 (E.D.Mo.1981); Friedrich v. Whittaker Corp., supra; Perrin v. Walker, 385 F.Supp. 945 (E.D.Ill.1974); Transport Indemnity Co. v. Financial Trust Co., supra; Crocker v. A.B. Chance Co., 270 F.Supp. 618 (S.D.Fla. 1967); Fugard v. Thierry, 265 F.Supp. 743 (N.D.Ill.1967).
In this action, the record reveals that defendant John J. Holt was served on July 12, 1982. Defendants Local 909, Kenneth Beattie and National Organization for Women [hereinafter "N.O.W."] were served on July 14, 1982, July 22, 1982, and August 23, 1982 respectively. It is clear that the thirty day time period for filing a petition for removal commenced as to all defendants on July 12, 1982, when defendant Holt was served. As a result, defendant NOW's petition *213 for removal filed on September 20, 1982, appears untimely filed.
Defendant NOW contends, however, that plaintiffs waived any right to object to removal because plaintiffs staggered the service on the defendants in such a manner as to foreclose NOW's right to remove before it had even been served with a copy of the complaint. At first blush, NOW's argument appears to have merit. However, it affirmatively appears from the record that the delay in service on defendant NOW was not due to any dilatory conduct or bad faith on the part of the plaintiffs. The court file reveals that summons for all defendants were received for execution by the Leon County Sheriff's Department on June 30, 1982. The summons for NOW was addressed to Edith George, who was listed by the defendant with the Florida Secretary of State, Division of Corporations, as the Treasurer and Director of NOW. The summons for NOW, however, was returned unexecuted as Ms. George was not at the address provided by NOW to the Secretary of State. Plaintiffs subsequently had an alias summons issued for NOW. This alias summons was to be served on Eileen K.W. Cudney, who was identified by NOW with the Secretary of State as NOW's registered agent for service of process in the State of Florida. The alias summons was also returned unexecuted on July 27, 1982 because Ms. Cudney was no longer residing at the given address. Section 48.091(1), Florida Statutes, requires every Florida corporation and every foreign corporation qualified to transact business in the State of Florida to designate with the Secretary of State a registered agent and registered office in the State. Thus, it is clear that the staggered service cannot be attributed to the plaintiffs. Had NOW complied with Florida law, service of process would most certainly have been effected concurrently with the other defendants and NOW could have filed a timely petition for removal.
28 U.S.C. § 1447(c) provides in part that "[i]f at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case...." A removal is improvident if there is not compliance with the thirty day filing requirement. London v. United States Fire Insurance Company, 531 F.2d 257 (5th Cir. 1976); Friedrich v. Whittaker Corp., supra. Because none of the defendants filed a petition for removal within thirty days of the first date of service on a defendant, this case should be remanded to state court unless some other rule of law requiring other treatment of the case exists. Friedrich, supra at 1014. For the reasons enumerated below, this court is of the opinion that no rule exists in this case which would prevent the remand of this action to the state court from which it originated.
Defendant NOW seeks to remove this action on the basis that Count V of the complaint can be characterized as stating a federal cause of action pursuant to Section 8(b)(4) of the Labor-Management Relations Act of 1947, 29 U.S.C. § 158(b)(4). Count V of the complaint is couched entirely in terms of a denial by all defendants of plaintiff's right to work as guaranteed by state law. It is well settled that the federal question which is the predicate for removal must be disclosed on the face of the complaint, unaided by the answer or the petition for removal. Gully v. First National Bank in Meridian, 299 U.S. 109, 113, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936). Schultz v. Coral Gables Federal Savings & Loan Ass'n., 505 F.Supp. 1003, 1008 (S.D.Fla. 1981); 1A Moore's Federal Practice ¶ 0.160 n. 12 (1981). "Nevertheless, the Court must carefully examine the complaint to determine if a federal claim is necessarily presented, even if the plaintiff has couched his pleadings exclusively in terms of state law". Drivers, Chauffeurs & Helpers Local Union No. 639 v. Seagram Sales Corp., 531 F.Supp. 364, 367 (D.C.C.1981); see In re Carter, 618 F.2d 1093, 1101 (5th Cir.1980), cert. denied, 450 U.S. 949, 101 S.Ct. 1410, 67 L.Ed.2d 378 (1981); Schultz v. Coral Gables Savings & Loan Ass'n, supra; Wright, Miller & Cooper, Federal Practice and Procedure, § 3722 nn. 37-39 (1976); 1A Moore's Federal Practice ¶ 10.160 n. 16 (1981).
*214 Federal question jurisdiction is properly invoked when a plaintiff pleads a claim that "arises under" federal law. 28 U.S.C. § 1331. A claim "arises under" federal law when federal law supplies an essential element of the claim. See Gully v. First National Bank in Meridian, supra. The face of plaintiff's complaint reveals an action for damages grounded upon the state right-to-work law. "Generally, a plaintiff is free to ignore a federal question and pitch his claim on a state ground, so long as no fraud is involved, thus defeating removal to the federal courts". Chappell v. SCA Services, Inc., 540 F.Supp. 1087, 1095 (C.D. Ill.1982); see Jones v. General Tire and Rubber Co., 541 F.2d 660, 664 (7th Cir.1976); 1A Moore's Federal Practice § 0.160 at 185 (2d ed. 1981). Here, defendants make no assertion that plaintiffs intentionally framed count V in state law terms in order to defeat removal to the federal courts; rather, in its answer, NOW asserts that any state law claim alleged in Count V is preempted by federal law. While there appears to be some conflict among the circuits as to whether a defendant's claim that federal law preempts the field supports removal jurisdiction, the more recent and better-reasoned cases hold that preemption is a defense which does not confer removal jurisdiction. See Chappell v. SCA Services, Inc., supra at 1095 and n. 3; see also Nalore v. San Diego Federal Savings & Loan Ass'n., 663 F.2d 841 (9th Cir.1981); Drivers, Chauffers & Helpers Local Union No. 639 v. Seagram Sales Corp., supra; Schultz v. Coral Gables Federal Savings and Loan Ass'n., supra; Freeman v. Colonial Liquors, Inc., 502 F.Supp. 367 (D.Md.1980); Smart v. First Federal Savings and Loan Ass'n of Detroit, 500 F.Supp. 1147, 1156 (E.D.Mich. 1980). Thus, defendants' assertion that the Labor-Management Relations Act preempts any state right to work laws is insufficient to support removal jurisdiction. This court therefore resolves the question of this court's jurisdiction against the defendants. Defendant's federal preemption claim may be raised in the state court. See Turner v. Bell Federal Savings and Loan Ass'n., 490 F.Supp. 104 (N.D.Ill.1980). This court's decision is supported by well established case law which holds that the removal statute is to be strictly construed against removal and in favor of remand. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1065 (9th Cir.1979); Green v. Mutual of Omaha, 550 F.Supp. 815, 819 (N.D.Cal.1982); Continental Resources and Mineral Corp., v. Continental Ins. Co., 546 F.Supp. 850 (S.D.W.Va. 1982). Any "doubts arising from defective, ambiguous and unartful pleadings should be resolved in favor of the retention of state court jurisdiction". Greenshields v. Warren Petroleum Corp., 248 F.2d 61, 65 (10th Cir.), cert. denied, 355 U.S. 907, 78 S.Ct. 334, 2 L.Ed.2d 262 (1957); see Butler v. Polk, 592 F.2d 1293 (5th Cir.1979). In this case, even if this court were to assume, arguendo, that federal question jurisdiction had been properly established as a basis for removal, this action must be remanded to the state court because it is untimely within the provisions of 28 U.S.C. § 1446(b). Accordingly, this court finds that this action was removed improvidently and without jurisdiction, and hereby orders that it be remanded to the Circuit Court in and for Leon County, Florida for further proceedings.
In seeking a remand of this action to the state court, plaintiffs have also requested this court to award attorney's fees incurred by the plaintiffs by reason of the improper removal of this case to federal court. Generally, absent an authorizing statute or enforceable contract, litigants are required to pay their own attorney's fees. Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 257-259, 95 S.Ct. 1612, 1622, 44 L.Ed.2d 141 (1975). The plaintiffs cite no statute or contract and presumably rely upon the limited exception to the general rule governing the award of attorney's fees where a party has "`acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'" Id.; see Macdiarmid v. Lawbar Petroleum, 456 F.Supp. 503, 505 (W.D.Tex. 1978); see also Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 1946, 36 L.Ed.2d 702 (1973) (quoting 6 Moore's Federal Practice ¶ 54.77[2] at 1709 (2d ed. 1972)). An award of attorneys' fees under the bad faith exception *215 to the general rule "is punitive, and the penalty can be imposed `only in exceptional cases and for dominating reasons of justice'". United States v. Standard Oil Co., 603 F.2d 100, 103 (9th Cir.1979) (quoting 6 Moore's Federal Practice ¶ 54.77[2] at 1709-10 (2d ed. 1972)); see Cornwall v. Robinson, 654 F.2d 685, 687 (10th Cir.1981). As a result, "[i]nvocation of the bad faith exception to the normal federal rule that attorney's fees may not be recovered requires more than a showing of a weak or legally inadequate case". Americana Industries, Inc. v. Wometco de Puerto Rico, Inc., 556 F.2d 625, 628 (1st Cir.1979). This court agrees with the Tenth Circuit Court of Appeals which recently noted that "[t]hese considerations highlight the narrowness of the exception.... The exception is not invoked by findings of negligence, frivolity, or improvidence". Cornwall v. Robinson, supra, at 687.
Plaintiffs urge this court to find that the untimeliness of defendants' petition for removal is indicative of "bad faith". This court has already found that the delay in service on defendant NOW was due to that defendant's failure to comply with the Florida statute requiring foreign corporations to designate with the Secretary of State a registered agent for service of process in the State of Florida. As a result of NOW's non-compliance with state law, NOW was not served until after the time for filing a petition for removal had run as to the other defendants. In reaching its decision to remand this case for untimeliness, this court adopted the rule espoused by a number of other district courts to the effect that where there are multiple defendants, the thirty day period commences to run upon the date of service on the first defendant served who is substantially entitled to petition for removal. Those courts have further found that if the defendant who was served first fails to remove within thirty days, a subsequently served defendant may not remove even with the first defendant's consent. As the defendant NOW correctly points out, however, this court has not previously been faced with this issue. Therefore, this court cannot now unequivocally find that NOW's decision to challenge this rule on equitable grounds constituted "bad faith". Accordingly, plaintiffs' request for attorney's fees is hereby DENIED.
Plaintiffs also seek an award of costs. 28 U.S.C. § 1447(c) allows an award of "just costs" if "it appears that the case was removed improvidently and without jurisdiction". As the Tenth Circuit noted in Cornwall v. Robinson, supra, at 687, "This statutory standard of `improvidence' is clearly less stringent that the `bad faith' standard that must be met in order for a court to award attorney's fees in cases of this nature". Because this court has already held that defendant's petition for removal was improvident and without jurisdiction, pursuant to 28 U.S.C. § 1447(c), plaintiffs are hereby awarded the costs of this action. The parties are reminded that under 28 U.S.C. § 1447(d), an order to remand a case to the state court from which it was removed is not reviewable by appeal or otherwise. See Gravitt v. Southwestern Bell Telephone Co., 430 U.S. 723, 97 S.Ct. 1439, 52 L.Ed.2d 1 (1977).
Accordingly, it is ORDERED:
1. The motion for remand is hereby GRANTED.
2. A certified copy of this Order to remand shall be mailed by the Clerk of this court to the Clerk of the Circuit Court in and for Leon County, Florida.
3. The defendants shall pay to the plaintiffs all costs of the proceedings before this Court.
4. The plaintiffs' request for attorney fees is hereby DENIED.
|
983 F.2d 1077
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.PRICE, RAFFEL & ASSOCIATES INCORPORATED; Manhattan NationalPension Services, Inc., Plaintiffs-Appellants,v.EAGLESON'S BIG & TALL, INC.; Ira A. Fulton, Defendants-Appelles
No. 91-56161.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Mar. 2, 1992.Decided Jan. 6, 1993.
Before HUG, PREGERSON and POOLE, Circuit Judges.
1
MEMORANDUM*
2
This is an appeal from a district court order dismissing for lack of subject matter jurisdiction a federal complaint that was filed under the Declaratory Judgment Act.
I.
3
Price, Raffel & Associates ("Price") is a pension plan consulting firm that provided accounting services to Eagleson's Big & Tall, Inc. and Fulton, an Eagleson's shareholder ("Eagleson's"). The accounting services provided by Price concerned the maintenance of Eagleson's two ERISA plans and included advice as to how the plans were affected by the ERISA top-heavy test. Price had advised Eagleson's that its ERISA plans were not top-heavy when, in fact, they were. As a consequence of the erroneous advice provided by Price, Eagleson's was forced to make extra payments to its ERISA plans in order to allocate assets to other participants and to avoid the penalties associated with top-heavy plans.
4
Eagleson's sued Price for damages resulting from the erroneous advice. The suit was originally filed in Los Angeles Superior Court ("the underlying suit"), alleging three state court causes of action: (1) breach of contract, (2) negligent misrepresentation, and (3) negligence. Eagleson's did not allege any violation of ERISA in the state court complaint.
5
After the original suit was filed, Price removed the case to federal court asserting federal question jurisdiction, and filed a counterclaim for declaratory and injunctive relief seeking a declaration of non-liability under ERISA. In addition, Price also filed a separate federal complaint seeking the identical declaratory and injunctive relief requested in the counterclaim. Eagleson's responded with a motion to remand its underlying lawsuit back to state court, and then filed a motion seeking to have Price's federal complaint dismissed for lack of subject matter jurisdiction. The district court granted both of Eagleson's motions. On April 17, 1991, the original state law claim was remanded to state court, and on July 3, 1991 the related federal complaint was dismissed for lack of subject matter jurisdiction. Price does not appeal the remand order, but rather only the dismissal of its separate federal complaint. In addition, Price has requested that we issue a stay of Eagleson's state court action, pending the outcome of its federal declaratory judgment action.
II.
6
The existence of subject matter jurisdiction is a question of law reviewed de novo. Kruso v. Inter. Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir.1989). "Although the decision to grant or deny declaratory relief ... is a matter initially committed to the discretion of the district court ..., on appeal we exercise our own sound discretion to determine the propriety of the district court's grant or denial of declaratory relief.... In effect, then, we review de novo." Fireman's Fund Ins. Co. v. Ignacio, 860 F.2d 353, 354 (9th Cir.1988); accord Guerra v. Sutton, 783 F.2d 1371, 1376 (9th Cir.1986).
7
Price filed its federal complaint under the Declaratory Judgment Act seeking a declaration of non-liability under ERISA. The Declaratory Judgment Act provides as follows:
8
In a case of actual controversy within its jurisdiction ... any court of the United States, upon a filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.
9
28 U.S.C. § 2201. Although the Declaratory Judgment Act could authorize the district court to issue the judgment Price seeks, the Act is not an independent source for federal question jurisdiction. See Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950) (if, but for the availability of the declaratory judgment procedure, the federal claim would arise only as a defense to a state created action, jurisdiction is lacking).
10
Viewed as an attempt to establish a preemption defense, Price's attempt to characterize this action as an ERISA action does not overcome the Skelly Oil test. Eagleson's alleges that Price was negligent, which is a state law claim, and Price wants to invoke federal question jurisdiction by claiming that ERISA was not violated. Price's ERISA claim is merely a defense to Eagleson's state law claim and, therefore, does not create federal question jurisdiction under Skelly Oil. "When a declaratory judgment plaintiff asserts a claim that is in the nature of a defense to a threatened or pending action, the character of the threatened or pending action determines whether federal question jurisdiction exists with regard to the declaratory judgment action." Levin Metals Corp. v. Parr-Richmond Terminal Co., 799 F.2d 1312, 1315 (9th Cir.1986), citing Public Serv. Comm'n of Utah v. Wycoff Co., Inc., 344 U.S. 237, 248 (1952).
11
Eagleson's elected to file a state law claim for negligence, not a federal claim under ERISA. Whether Eagleson's could have brought an action based on a claim under ERISA, it obviously has chosen not to do so, but to rely on its state claims.
12
Technically, the district court could exercise jurisdiction over a declaratory judgment action to adjudicate whether Eagleson's could bring an action under ERISA.
13
Although the district court did have jurisdiction over a declaratory judgment action to determine whether Eagleson's could bring a claim under ERISA, the district court had discretion to refuse to exercise that jurisdiction to grant declaratory relief. Fireman's Fund, 860 F.2d at 354. The declaratory relief sought was the adjudication of whether Eagleson's could bring a federal action under ERISA, which it obviously intends not to bring. In fact, Eagleson's has studiously avoided bringing such a federal action. Whether Price has a defense to the state count claims, because of ERISA preemption, is a matter that does not provide federal jurisdiction and is appropriate for consideration by the state court.
14
We interpret the district court's dismissal as a discretionary refusal to deny declaratory relief. It is a sound exercise of discretion and we affirm.
15
AFFIRMED.
*
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
|
961 F.2d 1573
Delgadillov.Lynaugh**
NO. 91-6358
United States Court of Appeals,Fifth Circuit.
Apr 23, 1992
1
Appeal From: S.D.Tex.
2
AFFIRMED.
**
Conference Calendar
|
19 F.3d 1446
Lowev.Bush Hog Div. of Bush Imp.**
NO. 93-6080
United States Court of Appeals,Eleventh Circuit.
Mar 22, 1994
1
Appeal From: S.D.Ala.
2
AFFIRMED.
**
Local Rule 36 case
|
790 F.Supp. 1023 (1991)
HISPANIC TACO VENDORS OF WASHINGTON, an unincorporated association; et al, Plaintiffs,
v.
CITY OF PASCO, a municipal corporation; et al, Defendants.
No. CS-91-237-FVS.
United States District Court, E.D. Washington.
August 21, 1991.
*1024 *1025 Antonio Salazar, Nicholas W. Marchi, Salazar Law Offices, Seattle, Wash., for plaintiffs.
Greg Rubstello, Pasco City Atty., Pasco, Wash., for defendants.
OPINION
VAN SICKLE, District Judge.
SUMMARY OF OPINION
The vending ordinance which was adopted by the Pasco City Council at a public meeting on June 17, 1991, is not unconstitutional.
The City of Pasco is granted broad authority to solve what it perceives to be social or economic problems. The City has demonstrated that its new ordinance is not irrational, that it gives fair warning of what Pasco requires of vendors, and that the ordinance is unlikely to be enforced in an arbitrary manner. Therefore, Pasco's vendor regulations do not deny due process of law.
The Court has carefully reviewed all of the evidence to determine whether the City Council passed the new ordinance as a means to discriminate against people of Mexican or Hispanic ancestry. There is nothing to indicate the Council was motivated by any discriminatory purpose. Consequently, the newly adopted vendor regulations do not deny equal protection of the law, nor do they violate federal laws prohibiting discrimination.
The new ordinance treats out-of-state vendors just the same as it does local vendors. There is no evidence the City of Pasco passed the ordinance to protect local businesses from competition. If the new regulations do place a burden on interstate commerce, it will be extremely indirect. As a result, the new requirements do not violate the Commerce Clause.
The Court respects the initiative and determination of the vendors. It is not as though their complaints are entirely unfounded. But it is not the function of a federal court to determine whether the City of Pasco has adopted the best solution to its perceived problems, or even a wise solution. A federal court asks only whether an ordinance is constitutional, and this one is.
A. Parties/Jurisdiction
This a civil rights action which has been brought by the Hispanic Taco Vendors of Washington, an unincorporated association, together with its constituent members (hereinafter "Vendors") against the City of Pasco, Washington (hereinafter "City"). The Court has jurisdiction over the subject matter and parties[1] of this action under 28 U.S.C. § 1343(a)(3) and 28 U.S.C. § 1331. Venue is proper under 28 U.S.C. § 1391.
B. Background
The Vendors are entrepreneurs of Mexican or Hispanic ancestry who sell Mexican food in Pasco from trucks or buses which have been modified for that purpose. Typically, a Vendor parks in a vacant lot or a parking lot, and sells to customers who come by car or on foot. If business is good, the Vendor may stay in one location for an extended period of time.
This lawsuit finds its genesis in a memorandum, written by Pasco's Director of Community Development, suggesting that *1026 the City revise its regulations regarding vending. The City Council considered the recommendation at its meeting of June 4, 1990, but declined to act. Instead, the Council directed the City Manager and his staff to study the matter and report back to the Council.
During the interim, the City's then-existing regulations remained in effect. Two separate chapters of the Pasco City Code governed vending. Chapter 5.10 regulated "itinerant merchants," who were defined as those who sold goods at locations outside of "permanent structures." Whereas Chapter 5.11 governed "mobile vendors," who were defined as those who sold merchandise (including food) from vehicles on public streets.
The question of vendor regulations did not come back before the Council until March 11, 1991, when two new ordinances were submitted to the Council by its staff. The proposals included a substantial increase in fees, and a limit on the number of months a person could be licensed to vend in Pasco. The City Council declined to approve either ordinance, and referred the matter back to its staff for further work.
Two weeks later, the staff presented its revisions to the City Council. The staff withdrew its recommendation regarding a limit on the number of months a person could be licensed, but continued to propose a substantial increase in fees. After considering the revisions, the Council decided it was not ready to act, and returned the matter to its staff for additional study.
On April 8, 1991, the City staff made yet another presentation, together with written documentation to justify its recommendations. After hearing testimony from those concerned, the City Council formed a special committee to discuss the issue. The committee included council members, food vendors (including at least one of the plaintiffs), and local business people. The Committee's purpose was to formulate regulations which would be acceptable to the competing factions. The committee met at least once, and appears to have reached agreement on at least some issues, including a proposal to ban all itinerant merchants other than food vendors.
The matter was next considered by the Council on May 13, 1991. The City staff submitted revised proposals, and the Council heard from the public. Most of those testifying chose to address the question of whether stationary food vendors should be required to locate on a site where a permanent business already existed. Again, the Council deferred making a decision.
The Council discussed the issue of vendor regulations at public meetings on both May 28, 1991, and June 10, 1991. By the conclusion of the latter meeting, the City Council decided to eliminate the provision which would have banned itinerant merchants other than food vendors. The Council also decided to prohibit stationary food vendors from operating on vacant lots.
On June 17, 1991, the City enacted[2] Ordinance No. 2826, which will be codified as Chapter 5.10A of the Pasco City Code. It combines the provisions of former Chapters 5.10 and 5.11 into a single chapter, making significant changes in the process.
Under the new regulatory scheme, itinerant vendors are divided into two categories: "stationary vendors" and "mobile vendors." According to new 5.10A.020(b), a stationary vendor is one who conducts business from a vehicle in a place other than a public street. The parties agree that the plaintiffs are stationary vendors within the meaning of the new ordinance.
By its terms, Ordinance No. 2826 requires any itinerant vendor, including a stationary vendor, to obtain a license from the City before selling goods in Pasco. A separate license is required for each location at which a vendor intends to transact business. See 5.10A.010. To obtain a license, a stationary vendor must pay an application fee of sixty dollars, and a license fee of forty-five dollars. See 5.10A.060(a). A license expires after thirty *1027 days, so a stationary vendor must renew the license every month. See 5.10A.070. Since it costs forty-five dollars for each renewal, a Vendor must pay six hundred dollars per year to keep a vehicle continuously licensed at a single site.
Before enactment of Ordinance No. 2826, a Vendor could park a truck on a vacant lot and sell from there. In fact, one Vendor had purchased a lot for that purpose, and another had negotiated a lease. Section 5.10A.100(b) prohibits that practice; a vendor must now associate with a "permanent business [which is] operating and licensed under Title 5."
C. Due Process
The Fourteenth Amendment provides "... nor shall any State deprive any person of life, liberty, or property, without due process of law; ...."
The Vendors contend Ordinance No. 2826 will drive them out of business, thereby depriving them of the "liberty" to pursue vending as an occupation, and the "property" which they acquire therefrom. That assertion may not be accepted uncritically. Before going any further, the Court must determine whether either of those terms can be properly understood to include a right to vend.
Had it decided to do so, the City might well have banned vendors from within its boundaries. See City of New Orleans v. Dukes, 427 U.S. 297, 303-06, 96 S.Ct. 2513, 2516-18, 49 L.Ed.2d 511 (1976) (per curiam); Chalmers v. City of Los Angeles, 762 F.2d 753, 757 (9th Cir.1985); Blue Sky Bar, Inc. v. Town of Stratford, 203 Conn. 14, 523 A.2d 467, 473-76 (1987). By choosing to allow vending to take place under some circumstances, the City conferred a property right upon vendors. Chalmers v. City of Los Angeles, 762 F.2d at 757 (citing Cleveland Board of Education v. Loudermill, 470 U.S. 532, 541, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494 (1985). That right may not be deprived without due process of law.
1. Substantive Due Process
It is within the City's police power to determine whether the practice of vending requires regulation. See, e.g., City of New Orleans v. Dukes, supra. And having decided that it does, the City is entitled to great deference in determining what problems it wishes to address, and how it wishes to address them. See New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 107, 99 S.Ct. 403, 410, 58 L.Ed.2d 361, 375 (1978). Since this is a matter of economic regulation, the Court asks only whether the solution proposed by the City is rationally related to the problem it seeks to solve. Boone v. Redevelopment Agency of City of San Jose, 841 F.2d 886, 892 (9th Cir.1988).
The degree of deference to which the City is entitled is illustrated by a review of federal cases where vending restrictions have been considered. In City of New Orleans v. Dukes, 427 U.S. 297, 303-06, 96 S.Ct. 2513, 2516-18, 49 L.Ed.2d 511 (1976) (per curiam), the Supreme Court rejected an equal protection challenge to an ordinance which banned all pushcart vendors from the French Quarter of New Orleans, except those who had operated there for "eight or more years." In Vaden v. Village of Maywood, Ill., 809 F.2d 361, 363-66 (7th Cir.1987), the Court denied substantive due process and equal protection challenges to an ordinance which prohibited mobile food dispensers[3] from selling on city streets between 8:00 a.m. and 4:00 p.m. during the school year, and required such vehicles to "move a minimum distance of one block every ten minutes." Finally, in Service Emp. Int. Union, Loc. 82 v. Dist. of Col., 608 F.Supp. 1434, 1440-447 (D.C.D.C.1985), the Court upheld a broad array of restrictions[4] on vendors in the *1028 face of a series of constitutional attacks.[5]
What these cases demonstrate is that "in the local economic sphere, it is only the invidious discrimination, the wholly arbitrary act, which cannot stand consistently with the Fourteenth Amendment." City of New Orleans v. Dukes, 427 U.S. at 303-04, 96 S.Ct. at 2516, (citation omitted). "[An] ordinance `need not be in every respect logically consistent with its aims to be constitutional. It is enough that there is an evil at hand for correction, and that it might be thought that the particular legislative measure was a rational way to correct it.'" Vaden v. Village of Maywood, Ill., 809 F.2d at 365 (quoting Williamson v. Lee Optical Co. of Oklahoma, Inc., 348 U.S. 483, 487-88, 75 S.Ct. 461, 464, 99 L.Ed. 563 (1954)). Thus, it is not for this Court to determine whether the City "acted wisely in regulating the business of its street vendors or whether it could have accomplished its goals more effectively" by some other means. Vaden v. Village of Maywood, Ill., 809 F.2d at 365. An equal protection or due process challenge to economic regulations will be sustained "only if the court is unable to postulate any conceivable rationale for the regulations." Service Emp. Int. Union, Loc. 82 v. Dist. of Col., 608 F.Supp. at 1441 (citing McDonald v. Board of Election Commissioners, 394 U.S. 802, 809, 89 S.Ct. 1404, 1408, 22 L.Ed.2d 739 (1969)). With these principles in mind, we turn to Ordinance No. 2826.
(a) Amount of Fees (5.10A.060)
A license fee must be a fair approximation of what it costs the City to process an application, and to monitor the licensee after the license has been issued. See Massachusetts v. United States, 435 U.S. 444, 463-64, 98 S.Ct. 1153, 1165-66, 55 L.Ed.2d 403 (1978). However, the fee need not be "precisely calibrated," nor must the City keep a record of its expenses to justify the fee. See United States v. Sperry Corp., 493 U.S. 52, 110 S.Ct. 387, 107 L.Ed.2d 290 (1989). Furthermore, a fee is not unconstitutional simply because it makes a business unprofitable. See City of Pittsburgh v. Alco Parking Corp., 417 U.S. 369, 373-374, 94 S.Ct. 2291, 2294-2295, 41 L.Ed.2d 132 (1974); Bayside Enterprises, Inc. v. Carson, 450 F.Supp. 696, 704 (M.D.Fla.1978).
Here, the City has estimated its administrative expenses, and has set its fees accordingly. There is nothing in the record to suggest that the City's calculations are wildly inaccurate. Consequently, the Court concludes the fees are not excessive.
The Vendors contend, however, that there is no rational basis for limiting the life of a license to thirty days, thereby requiring a Vendor to renew his or her license each month. The Court disagrees.
A prospective licensee must file a reasonably detailed application. See 5.10A.040. By investigating the information which must be provided, the City is able to determine (1) the manner in which waste will be disposed of, (2) where on a particular site the vehicle will be located, (3) whether the location of the vehicle on the site poses a risk to other structures, and (4) whether the location of the vehicle on the site will result in congestion or impede traffic. That information allows the City to make an informed judgment regarding the desirability of issuing a particular license.
It is not unreasonable for the City to conclude that conditions at a licensee's site may change significantly during the thirty days following issuance of a license. The possibility of such changes justifies careful monitoring of each licensee. The terms of Ordinance No. 2826 insure that conditions at the site are reviewed at least every thirty days, and that the licensee pays his or her fair share of the administrative costs.
(b) Association with Permanent Business
Section 5.10A.100(b) requires each stationary vendor to associate with a permanent business which is "operating and *1029 licensed under Title 5." That section was included in the new ordinance in order to halt the Vendors' practice of parking on vacant lots and selling food there.[6]
The issue proved to be very controversial, and generated much debate. However, by the conclusion of the meeting on June 10, 1991, the Council had decided to prohibit vending on vacant lots.
The Court concludes that the Council's decision was the result of its determination that the practice of selling food from a vehicle which is parked on a vacant lot is contrary to the City's long-term interests. Such a determination is within the City's legislative authority. See, e.g., New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. at 107, 99 S.Ct. at 410.
The more difficult question is whether the City's solution is rationally related to the problem it seeks to solve. The Vendors argue strenuously that section 5.10A.100(b) will create congestion by requiring two businesses to operate on a single site, and that the City could have accomplished its objectives through less onerous means. They may be right. Nevertheless, the Court cannot say that section 5.10A.100(b) is an irrational response to the problems created by the sale of food from a vehicle which is parked on a vacant lot. It is not so "completely, ludicrously arbitrary"[7] as to be unconstitutional.
Section 5.10A.100(b) should be analyzed in light of the process which led to its enactment, which is why the Court described the legislative history of the ordinance in some detail. When viewed in that context, section 5.10A.100(b) can be seen as the result of a vigorous debate[8] regarding the best solution to what the City believed to be a vexing problem.
The Council had to reconcile a number of competing considerations. On the one hand, it decided it could no longer continue to allow vending to occur on vacant lots. But on the other hand, the City did not want to ban stationary vending altogether. As the weeks of debate wore on, the Council may well have concluded that it could not formulate an ordinance which would address all aspects of the problem in a manner which pleased everyone. Given its options, the City Council may have decided that imposing the requirements of section 5.10A.100(b) was better than either doing nothing or banning vending. Such a response is not irrational. "A local ordinance aimed at remedying a problem need not entirely eliminate the problem. Instead, `reform may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind.'" Vaden v. Village of Maywood, Ill., 809 F.2d at 365 (quoting Williamson v. Lee Optical Co. of Oklahoma, Inc., 348 U.S. 483, 489, 75 S.Ct. 461, 465, 99 L.Ed. 563 (1955)). In view of the foregoing, the Court cannot say that section 5.10A.100(b) is so arbitrary as to be unconstitutional.
2. Procedural Due Process
In alleging a denial of procedural due process, the Vendors rely heavily upon the case of Chalmers v. City of Los Angeles, 762 F.2d 753 (9th Cir.1985). There, a Ms. Chalmers wanted to sell T-shirts outside of a museum in Los Angeles. Two ordinances regulated vending. One permitted pushcart vending with certain restrictions; the other banned vending altogether in the area where Ms. Chalmers wished to sell. Before beginning to sell, Ms. Chalmers inquired in the City Clerk's office about the conflict, and was told she could lawfully vend as long as she observed the restrictions of the ordinance which permitted some vending. When Ms. Chalmers attempted to do so, she was harassed by Los Angeles police officers and prevented *1030 from selling. 762 F.2d at 755-56. Citing Village of Hoffman Estates v. The Flip Side, Hoffman Estates, Inc., 455 U.S. 489, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982), the Court held that Ms. Chalmers had been denied due process of law. The Court ruled that the unresolvable conflict between the two ordinances denied Ms. Chalmers fair warning of the prohibited conduct, and led to arbitrary enforcement. 762 F.2d at 757-58.
The Vendors argue that the holding in Chalmers is applicable here.[9] They point to the following:
(a) Section 5.04.120 provides, "No annual license fee shall exceed two hundred twenty-five dollars per year." But section 5.10A.060(a) imposes fees which exceed that amount if a Vendor renews his or her license each month.
(b) Section 5.04.060 states that all licenses are to be issued for one year.[10] But under section 5.10A.070, a license is valid for thirty days.
(c) Section 22.68.020(1)(5) could be construed to allow the sale of food on a vacant lot as long as it is within two hundred feet of the premises of a business which is operated in an enclosed building. But section 5.10A.100(b) requires a stationary vendor to locate on a site where an established business is operating.
Assuming that the Vendors' interpretations of the various sections are correct, does a conflict exist which is comparable to that described in Chalmers? In analyzing a municipal ordinance, a federal court should "`take the statute as though it read precisely as the highest court of the State has interpreted it.'" Schwartzmiller v. Gardner, 752 F.2d 1341, 1348 (9th Cir.1984) (quoting Wainwright v. Stone, 414 U.S. 21, 22-23, 94 S.Ct. 190, 192, 38 L.Ed.2d 179 (1973)). The Ninth Circuit has said, "This court will follow a state supreme court's interpretation of its own statute in the absence of extraordinary circumstances." Dimidowich v. Bell & Howell, 803 F.2d 1473, 1482 (9th Cir.1986) (citations omitted). The Court then went on to say, "Where the state's highest court has not decided an issue, the task of the federal courts is to predict how the state high court would resolve it." Dimidowich, 803 F.2d at 1482 (citations omitted).
The Washington Supreme Court has established rules of statutory construction which allow this Court to resolve the alleged conflict between the different sections of the Pasco Municipal Code. When statutes "relate to the same thing or class, they are in pari materia and must be harmonized if possible." King County v. Taxpayers, 104 Wash.2d 1, 9, 700 P.2d 1143 (1985) (citing Snohomish Cy. PUD 1 v. Broadview Television Co., 91 Wash.2d 3, 8, 586 P.2d 851 (1978)). If it proves impossible to harmonize the statutes, then preference will be given to the more specific. Omega Nat'l Ins. Co. v. Marquardt, 115 Wash.2d 416, 425, 799 P.2d 235 (1990); Tacoma v. Taxpayers, 108 Wash.2d 679, 690, 743 P.2d 793 (1987).
Applying those rules of statutory construction to the facts of this case, the Court concludes that the Washington Supreme Court would give effect to the plain language of Ordinance No. 2826. To the extent harmonization proved impossible, the new ordinance would govern since it is the more specific. Consequently, there is no conflict in this case which is comparable to that in Chalmers. The City's regulatory scheme gives fair warning of what it requires, and it is not likely to lead to arbitrary or discriminatory enforcement.
D. Equal Protection / 42 U.S.C. § 1981
The Fourteenth Amendment says no state shall "... deny to any person within *1031 its jurisdiction the equal protection of the laws."
42 U.S.C. § 1981 states:
All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.
The Vendors assert that Ordinance No. 2826 has a racially disproportionate impact upon persons of Mexican or Hispanic ancestry. As a result, they contend the City should be required to demonstrate some compelling justification for its regulatory scheme.
On its face,[11] the ordinance makes no distinctions among racial groups. The plaintiffs argue, however, that they are the only persons[12] actively engaged in vending in Pasco, so that the entire burden of the new ordinance will be borne by business people of Mexican or Hispanic ancestry. This, they submit, demonstrates that the ordinance will have a racially disproportionate impact.[13]
In argument to the Court, counsel for the Vendors said, "[I]t is true that in this case there's no evidence of intentional discrimination." The Court agrees, and so finds.[14]
Counsel for the Vendors argues, nevertheless, that racially disproportionate impact is sufficient to require strict scrutiny of the new ordinance. Counsel's argument is clearly wrong. The Supreme Court has ruled on that precise point, and has held, "Proof of racially discriminatory intent or purpose is required to show a violation of the Equal Protection Clause." Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 265, 97 S.Ct. 555, 563, 50 L.Ed.2d 450 (1977) (reaffirming Washington v. Davis, 426 U.S. 229, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976)).
In that regard, the evidentiary requirements of 42 U.S.C. § 1981 are no different. There can be no violation of § 1981 without proof of "purposeful discrimination." General Building Contractors Assoc., Inc. v. Pennsylvania, 458 U.S. 375, 391, 102 S.Ct. 3141, 3150, 73 L.Ed.2d 835 (1981).
There being no evidence of intentional or purposeful discrimination against persons of Mexican or Hispanic ancestry, the Court concludes that Ordinance No. 2826 violates neither the Equal Protection Clause nor 42 U.S.C. § 1981.
E. Commerce Clause
"The Commerce Clause of the Constitution grants Congress the power `[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.' Art. I, § 8, cl. 3." Maine v. Taylor, 477 U.S. 131, 137, 106 S.Ct. 2440, 2446, 91 L.Ed.2d 110 (1985).
Ordinance No. 2826 is neutral on its face; an out-of-state vendor is treated no differently than a local vendor. Nevertheless, the Vendors argue the ordinance places an impermissible burden on interstate commerce. *1032 The Vendors assume the new ordinance will drive them out of business. Since many of the ingredients which the Vendors use come from out-of-state sources, they argue their suppliers will be deprived of this particular market for their products, and that persons in Pasco will be denied the opportunity to purchase food prepared from ingredients which arrive locally as a result of interstate commerce.[15]
When analyzing a Commerce Clause question, the Supreme Court makes a distinction between "statutes that burden interstate transactions only incidentally, and those that affirmatively discriminate against such transactions." Maine v. Taylor, 477 U.S. at 138, 106 S.Ct. at 2447. "[S]tatutes in the first group violate the Commerce Clause only if the burdens they impose on interstate trade are `clearly excessive in relation to the putative local benefits,' Pike v. Bruce Church, Inc., 397 U.S. 137, 142 [90 S.Ct. 844, 847, 25 L.Ed.2d 174] (1979)." 477 U.S. at 138, 106 S.Ct. at 2447.
Ordinance No. 2826 makes no distinction between local vendors and out-of-state vendors, and there is nothing in the record to suggest that the new ordinance was enacted to protect local business interests from competition. To the extent the ordinance places any burden on interstate commerce, it is incidental. Thus, the regulations are tested under the more deferential standard.
Furthermore, in those cases where vendor regulations comparable to those enacted by the City have been challenged under the Commerce Clause, the regulations have been upheld. See, e.g., Service Emp. Int. Union, Loc. 82 v. Dist. of Col., 608 F.Supp. 1434, 1436-38 (D.C.D.C.1985) (rejecting arguments that restrictions "inhibit the ability of street vendors to generate income, stifle competition between street vendors and `storefront vendors,' and discourage free trade among the states by reducing the amount of merchandise purchased"); Blue Sky Bar, Inc. v. Town of Stratford, 203 Conn. 14, 523 A.2d 467, 475-76 (1987) (rejecting argument that "prohibition on sales from motor vehicles constitutes an impermissible burden").
Here, the City's revised regulatory scheme will enable the City to restrict vending to those locations which are consistent with the City's long-term interests, and require a licensee to pay his or her fair share of the costs of licensing and monitoring. Those are substantial benefits to the City. By comparison, the burden on interstate commerce, if any, is slight. Ordinance No. 2826 does not violate the Commerce Clause.
IT IS HEREBY ORDERED:
1. The Vendors' request for injunctive relief is DENIED.
2. All of the Vendors' claims against the City of Pasco are DISMISSED WITH PREJUDICE.
The Clerk is hereby DIRECTED to file this Opinion, enter a Judgment in accordance hereto and furnish copies to counsel.
NOTES
[1] Hispanic Taco Vendors of Washington has yet to establish that it has standing to sue as an association. See New York State Club Assn. v. City of New York, 487 U.S. 1, 9, 108 S.Ct. 2225, 2231, 101 L.Ed.2d 1 (1988) (quoting Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 2441, 53 L.Ed.2d 383 (1987)). However, the individual plaintiffs do have standing.
[2] The City Council's authority to adopt ordinances of the type at issue in this case is derived from state statute. See RCW 35A.11.020; RCW 35A.63.100; and RCW 35A.21.160. The Vendors do not question the Council's police powers.
[3] "Mobile Food Dispenser Vehicles" were defined as those who sold goods from vehicles parked on public property. Vaden, 809 F.2d at 363. Such vehicles would be comparable to "Mobile Vendors" under Pasco's scheme. See 5.10A.020(c).
[4] The ordinance limited vending to sidewalks of a certain width; prohibited vending except during specified hours; banned overnight storage of equipment and merchandise on sidewalks; limited the design of carts; and restricted the types of merchandise which could be sold. 608 F.Supp. at 1436.
[5] Relying on the Commerce Clause, the Court did strike down that portion of the Ordinance which subjected out-of-state vendors to a different bonding requirement. 608 F.Supp. at 1438-440.
[6] Section 5.10A.100(b) appears to have originated as a recommendation to the Council from its staff. The staff's concerns are summarized in Agenda Report No. 21, pp. 1-2, which was prepared by the City Manager in anticipation of a Council meeting scheduled for May 28, 1991. See Defendant's Exhibit No. 101.
[7] Pontarelli Limousine, Inc. v. City of Chicago, 929 F.2d 339, 342 (7th Cir.1991).
[8] The Court notes that the argument over section 5.10A.100(b) was free, fair, and full. No voices were excluded; all points of view were heard.
[9] The Vendors are not making a vagueness challenge as it is traditionally understood. See, e.g., Village of Hoffman Estates v. The Flip Side, Hoffman Estates, Inc., 455 U.S. 489, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982). They are not arguing that Ordinance No. 2826 is vague on its face, or as applied to them. Rather, it is the apparent conflict between Ordinance No. 2826 and other sections of the municipal code which the Vendors claim denies them due process. See Chalmers, supra.
[10] Although it goes on to add, "unless otherwise provided herein; ...."
[11] The vendors cite Yick Wo v. Hopkins, 118 U.S. 356, 373-74, 6 S.Ct. 1064, 1072-73, 30 L.Ed. 220, 227-28 (1886), in which the Supreme Court found a denial of equal protection when an ordinance which was neutral on its face was administered in a discriminatory fashion. In this case, however, a temporary restraining order has prevented the City from ever enforcing the new ordinance.
[12] The record reflects that non-Hispanic persons have vended goods in the City in the past, and that their behavior did nothing to enhance the reputation of vendors. In fact, an advisory committee formed by the City Council to study this issue concluded that the City should ban all vendors other than food vendors. That recommendation was rejected when the City Attorney questioned its constitutionality.
[13] The Court assumes, without deciding, that the new ordinance will have a racially disproportionate impact.
[14] Notwithstanding counsel's concession, the Court makes this finding only after having conducted the "sensitive inquiry" into both direct and circumstantial evidence which is required by Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 266, 97 S.Ct. 555, 563, 50 L.Ed.2d 450 (1977).
[15] The Vendors have not established that they have standing to assert claims on behalf of either out-of-state suppliers or the customers who purchase their food. See Service Emp. Int. Union, Loc. 82 v. Dist. of Col., 608 F.Supp. 1434, 1437 n. 3 (D.C.D.C.1985).
|
357 F.Supp.2d 1180 (2005)
Patricia SHEPPARD, individually and as personal representative of the James Edward Sheppard Estate, Plaintiff,
v.
UNION PACIFIC RAILROAD CO., Defendant.
No. 4:03CV1340DDN.
United States District Court, E.D. Missouri, Eastern Division.
January 20, 2005.
*1182 Michael P. Bastian, St. Louis, MO, for Plaintiff.
Heath H. Hooks, Thomas E. Jones, Thompson Coburn, Belleville, IL, for Defendant.
MEMORANDUM AND ORDER
NOCE, United States Magistrate Judge.
This matter is before the court upon the motion of defendant Union Pacific Railroad Co. (Union Pacific) for summary judgment. (Doc. 19.) The parties have consented to the exercise of plenary authority by the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). A hearing was held on November 10, 2004.
I. BACKGROUND
Plaintiff commenced this action in the Circuit Court for the City of St. Louis. Defendant removed the action to this court on the basis of diversity of citizenship and the amount in controversy. In her state court petition seeking damages for wrongful death, plaintiff Patricia Sheppard alleges the following. On August 18, 2000, plaintiffs husband was driving a semi tractor-trailer in a westerly direction on Goldsmith Road in Green County, Arkansas, when he collided with a Union Pacific train operated by Union Pacific employees. Plaintiff alleges her husband died of injuries proximately caused by the negligence of the defendant and its agents, servants, and employees, singularly and in combination. Specifically, plaintiff alleges that defendant or its agents
a. failed to maintain the right of way to be free of obstruction in violation of Arkansas state law 23-12-20(a)(1) and federal regulation;
b. failed to maintain the right of way in violation of Arkansas state law XX-XX-XXX(2) despite a recent fatal collision at the same crossing;
c. issued speed orders to its employees which prohibited the avoidance of the collision;
d. accelerated the train locomotive until impact;
e. failed to stop or slow the train locomotive when a collision was imminent;
f. failed to keep a proper lookout;
g. failed to sound a horn, whistle, bell or flash lights, in a timely manner;
h. failed to exercise the highest degree of care under the circumstances;
i. failed to provide the operators of the train locomotive with a reasonably safe place to work, directly causing them to be inattentive and distracted;
j. failed to provide proper lighting and signaling and whistling devices to enable its operators to warn or see an approaching vehicle;
k. failed to properly maintain their grade crossing;
l. failed to provide adequate crossing protection devices;
m. failed to provide barriers and/or passive restraints at the grade crossing;
n. failed to instruct its train crew employees concerning safe operating practices over said crossing;
o. failed to conduct an evaluation of its crossing for the purpose of determining whether or not the crossing *1183 needed protection devices such as automatic flashers and/or gates;
p. failed to install automatic flashers and/or gates at said crossing;
q. failed to order a speed reduction of its trains at said crossing, even though it knew of other accidents and a recent fatal accident at said crossing;
r. required its operators to perform job duties and work with vibrating machinery/tools/ equipment;
s. failed to comply with government regulations;
t. failed to treat or remove the operator of the locomotive who suffered from cumulative trauma to the upper extremities including carpal tunnel syndrome and who was medically unfit to operate the locomotive; and
u. failed to provide the operator of the locomotive with equipment and provided the operator with equipment which defendant knew or should have known would cause carpal tunnel syndrome or other cumulative trauma injuries which caused him to be a dangerous operator of the locomotive.
(Doc. 1, Ex. A at 2-3.)
Plaintiff, individually and as the personal representative for the estate of James Edward Sheppard, her husband, seeks wrongful death damages in excess of $25,000 and punitive damages in the amount of $2,000,000. (Id. at 4.)
Defendant Union Pacific has moved for summary judgment on a number of grounds. Defendant maintains that plaintiffs allegations regarding the training of crew members or inadequate equipment, inadequacy of warning devices, or excessive train speed are all pre-empted by the Federal Railroad Safety Act (FRSA). Defendant also argues that undisputed evidence establishes that there were no problems with the train's whistle or lights on August 18, 2000, and that there is no evidence that defendant failed to properly maintain the grade crossing. Defendant argues that on those grounds, there are no genuine issues of material fact, and that they are entitled to judgment as a matter of law.
II. DISCUSSION
Summary judgment must be granted if the pleadings and showing of evidence demonstrate that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Initially, the moving party must demonstrate the absence of an issue for trial. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Once a motion is properly made and supported, the nonmoving party may not rest upon the allegations in its pleadings but must instead set forth specific facts showing that a genuine issue of materia] fact exists. Fed.R.Civ.P. 56(e); Krein v. DBA Corp., 327 F.3d 723, 726 (8th Cir.2003). The nonmoving party also "must ... provide evidence of `specific facts creating a triable controversy.'" Howard v. Columbia Pub. Sch. Dist, 363 F.3d 797, 800 (8th Cir.2004) (quoting Jaurequi v. Carter Mfg. Co., 173 F.3d 1076, 1085 (8th Cir.1999)).
Whether plaintiff has affirmative evidence supporting the claim of failure to provide proper lighting, signaling, and whistling devices
Regarding plaintiffs claims g and j, above, defendant argues that engineer Charles Payne has testified in a deposition that there were no problems with the whistle the day of the accident (Doc. 20, Ex. A at 54; Ex. B at 294), that he sounded the whistle properly (Id., Ex. A at 72; *1184 Ex. B at 290, 351-53), and that the train had working ditch lights and a headlight (Id., Ex. A at 55). (Doc. 20 at 6.) Based on this evidence, defendant claims summary judgment should be granted as to lighting, whistling, or signaling.
In her response, plaintiff argues that Mr. Payne made a variety of allegations against defendant in a separate proceeding regarding this accident, including an allegation that defendant failed "to provide proper lighting and signaling and whistling device to enable its occupants to warn or see an approaching vehicle." (Doc. 24 at 9-10, citing Ex. 7 at unnumbered 4.) In her response to defendant's statement of uncontroverted material facts, plaintiff admits that Mr. Payne testified in depositions as defendant states he did and that the train was equipped with a whistle. (Doc. 24 at unnumbered 18-19, paras. 5, 6, 11.) As to defendant's assertion that "[t]he locomotive was equipped with two sets of ditch lights and a head light that were working properly" (Doc. 20, Ex. J at 2, para. 13), plaintiff merely denies without presenting any evidence that they were not working at the time of the crash. Plaintiff denies defendant's assertion that "[t]here were no problems with the whistle on August 18, 2000" (Id. at 2, para. 12) and that Mr. Payne blew the whistle properly from the whistle post up to the crossing (Id. at 2, para. 19), offering the affidavit of Kristi Johnson. (Doc. 24, Ex. 8.)
In the relied upon affidavit, Kristi Johnson states that she crossed the grade crossing at Goldsmith Road on August 18, 2000, approximately 60-90 seconds before the collision, passed the decedent traveling in the opposite direction, and then heard the collision, but not the horn. (Doc. 27, Ex. 15.) It is fair to say that this is the entirety of the plaintiffs evidence regarding the issue of whether or not the whistle or horn of the train were audible. Arkansas law holds "that testimony of persons with good hearing who are in a position to hear a bell ringing or whistle blowing, that no such signal was heard, is positive rather than negative evidence." S. Lumber Co. v. Thompson, 133 F.Supp. 92, 97 (W.D.Ark. 1955). Defendant contends that Kristi Johnson was not in a position to hear the whistle when the collision occurred. (Doc. 25 at 6.)
On the facts as stated in the response to the motion to dismiss, the testimony of Kristi Johnson, as described in her affidavit, would be inadmissible. Brown v. Trans World Airlines, 746 F.2d 1354, 1358 (8th Cir.1984) (evidence presented along with a motion for summary judgment, or in response to such a motion, must be of a sort to be admissible at trial). There has been no foundation laid, beyond Ms. Johnson's conclusory assertion, that she was, some 60-90 seconds after passing the crossing, in a "position to hear a bell ringing or whistle blowing." Without such foundation evidence, Ms. Johnson's affidavit is legally insufficient to create a genuine issue of fact on whether the whistle blew. Summary judgment is warranted as to the lighting, signaling, and whistle blowing claims.
Whether plaintiff has affirmative evidence to support a claim of failure to maintain the grade crossing
On plaintiffs claims a, b, and k, defendant argues that there has been no proffer of admissible evidence to create a genuine issue of fact, citing Mr. Payne's testimony in deposition that his view was not obstructed in any way. (Doc. 20 at 7.) Plaintiff responds first by citing the relied upon Arkansas statute, XX-XX-XXX, which prescribes a duty to railroads to maintain a right of way at a crossing free of obstructions to the view "of pedestrians and vehicle operators using the public highways," without reference to the view of *1185 train personnel. (Doc. 24 at unnumbered z.) The logical extension of Mr. Payne's testimony is that, if he had a clear line of vision to the crossing, so a vehicle operator, looking from where Mr. Payne could see, would be able to see the train.
Defendant also argues that plaintiff does not present legally sufficient evidence regarding any obstruction. Plaintiff presents two affidavits of Wayford and Sarah Pence that the vegetation cutbacks at the right of way were not in compliance with the Arkansas statute. Sarah Pence testifies in her affidavit, "I measured ... to see if the railroad has complied with the Arkansas statute that requires vegetation to be cleared 100 yards down the tracks and 50 feet on either side .... the right-of-way is not cleared the required distance." (Doc. 24, Ex. 10.) Wayford Pence testifies in the same words. (Doc. 24, Ex. 9.) But the statute actually says that the cutback
shall be for a distance of fifty feet (50) on each side of the centerline between the rails for the maintenance width and for a distance of one hundred yards (100 yds) on each side of the centerline from the public road or highway for the maintenance length.
(Doc. 24 at unnumbered 11 (citing Ark. Code Ann. 23-12-201).) There is a substantial difference between a mandated distance of fifty feet from the centerline of the rails, and the greater distance measured fifty feet out from the rails themselves. It is possible for the affidavits to be accurate in setting out the dimensions of the cutbacks, and still not create a genuine issue of material fact under the Arkansas statute.
Defendant argues there are other problems with the affidavits. First, defendant argues that the affiants, Sarah and Wayford Pence, are the daughter and son-inlaw of the decedent. The issue of bias, suggested by this argument, is at this juncture irrelevant because the weighing of credibility of potential witnesses is a matter for trial, not for summary judgment. Oldham v. West, 47 F.3d 985, 988-89 (8th Cir.1995).
The critical weakness of the affidavits is that they are not probative of the conditions at the time of the collision. As defendant states,
the affidavits do not even state on what date the affiants measured the right of way. In addition, the affidavits do not even state what the actual measurements were. The conditions at the crossing, including the vegetative growth in the area, could have been completely different on the date of the measurements than they were on the date of the accident.
(Doc. 25 at 8.) Without these details establishing the procedure for the measurements or the conditions and dimensions of the cutbacks, the affidavits are merely "conclusive assertions of ultimate fact ... entitled to little weight when determining whether a nonmovant has shown a genuine issue of fact sufficient to overcome a summary judgment motion supported by complying affidavits." Miller v. Solem, 728 F.2d 1020, 1023-24 (8th Cir.1984). Summary judgment is warranted as to the failure to maintain the grade crossing claims.
Whether plaintiffs excessive speed allegations are preempted
Regarding plaintiffs claims c, d, e, and q, defendant argues that any and all excessive speed claims are federally preempted by the FRSA. Defendant further asserts that the undisputed evidence was that the train was traveling at approximately 46 miles per hour, well within the mandated maximum speed of 60 for that track. Because it is undisputed that the train was traveling within the federal speed limits at the time of the collision, *1186 defendant argues that FRSA preempts the speed-related claims.
Plaintiff argues that federal preemption should not be entertained for two reasons. First, plaintiff asserts that there was insufficient federal involvement in the grade crossing at Goldsmith Road. This argument confuses federal preemption as to speed regulation, which occurs merely upon the promulgation of the regulation, and federal preemption as to crossing devices, which is dependent on federal involvement and is discussed infra.
When it examined the speed regulation preemption in CSX Transp. v. Easterwood, the Supreme Court did not rely on federal involvement. Rather, the Court simply stated that, where there is a federal regulation as to speed, state and common law speed rules are displaced.
On their face, the provisions of § 213.9(a) address only the maximum speeds at which trains are permitted to travel given the nature of the track on which they operate. Nevertheless, related safety regulations adopted by the Secretary reveal that the limits were adopted only after the hazards posed by track conditions were taken into account. Understood in the context of the overall structure of the regulations, the speed limits must be read as not only establishing a ceiling, but also precluding additional state regulation of the sort that respondent seeks to impose on petitioner.
CSX Transp. v. Easterwood, 507 U.S. 658, 674, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993). If the train was traveling within the federal speed limit for that grade of track at the time of collision, any state or common law claim as to excessive or unreasonable speed would not stand.
This raises the second point of plaintiffs objection to federal speed preemption in this case, that Mr. Payne's testimony in deposition was not sufficiently precise regarding the speed limit. In its memorandum and statement of uncontroverted material facts, defendant cites the following testimony of Mr. Payne:
Q. And you said the speed limit on the track was
A. Sixty.
Q. Again, that's set by the federal FRA regulations?
A. Yes.
(Doc. 20, Ex. B at 288.) In her response to defendant's statement of controverted material facts, the plaintiff merely states, "[d]eny .... On Exh b, page 288 he states a speed limit of `sixty' on the track without indicating where along the track." (Doc. 24 at unnumbered 19.) This is not sufficient to rebut the defendant's argument regarding the federal speed limit. Plaintiff does not cite any federal regulations or manuals, or present contradicting testimony. Plaintiff fails to "set forth specific facts that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). Neither does plaintiff satisfy Local Rule 7-1.01(E), that "[a]ll matters set forth in the statement of the movant shall be deemed admitted for purposes of summary judgment unless specifically controverted by the opposing party." It is undisputed then, that the speed limit for the grade of track at the Goldsmith crossing was 60 miles per hour, and that as a matter of law under Easterwood, if the defendant's train was traveling within that limit, summary judgment should be granted for the defendant on all speed related claims.
The next question is whether the proffered evidence indicates that the train was traveling 60 miles per hour or less. Plaintiff submits two charts, which purport to display the speed of the train. One is a graphical representation of the train's speed. (Doc. 24, Ex. 4 at 10, 12, 13.) The other is a numerical chart. (Id. at z) Plaintiff characterizes the graphical representation *1187 as showing the "speed in excess of 60 mph and constantly increasing," with the numerical chart showing speed of "58 mph and increasing." (Doc. 24 at unnumbered 3.) Defendant argues in response that the train was traveling at roughly 47 miles per hour, with the readings on the numerical chart of 56 or 58 being erroneous. (Doc. 25 at 5.) Even if correct, defendant argues that 58 miles per hour is "still well within the 60 miles per hour federally mandated speed limit." (Id. at 9.) Defendant does not address the characterization of the graph by the plaintiff as showing train speeds in excess of 60 miles per hour at the time of the crash. The question of the train's actual speed at the time of the collision appears to be a genuine issue of material fact, necessary to be decided at trial in order to determine if federal speed preemption would apply.
Additionally, subparagraph 4(q) of the plaintiffs complaint alleges that the defendant "[f]ailed to order a speed reduction of its trains at said crossing, even though it knew of other accidents and a recent fatal accident at said crossing." (Doc. 1, Ex. A at 2,3.) In support of this allegation, plaintiff has attached a number of accident-incident reports to her response to defendant's motion for summary judgment. These reports, however, are inadmissible:
§ 409 withdraws the broad latitude of discretion ordinarily allowed judges in evidentiary matters and bars the reception of evidence as it states that the `reports, surveys, schedules, lists, or data' within the statute "shall not be admitted into evidence in Federal or State court or considered for other purposes in any action for damages arising from any occurrence at a location mentioned or addressed in such reports, surveys, schedules, lists, or data."
Harrison v. Burlington N. R.R. Co., 965 F.2d 155,159 (7th Cir.1992).
Summary judgment is warranted on plaintiffs claim q, for failure to present admissible affirmative evidence in support of this claim. However, summary judgment as to the remainder of the speed related claims is denied.
Whether plaintiff's inadequate crossing devices claim is preempted
Regarding plaintiffs claims i, m, o, and p, defendant argues that these claims of inadequate crossing protection and warnings are federally preempted under FRSA. Defendant asserts that, because the Goldsmith Street Crossing was the subject of a federally funded project, the question of the adequacy of warning devices is federally preempted in this case. To establish that the crossing was part of such a project, defendant offers a number of exhibits.
Plaintiff argues that defendant has the burden to show the crossing devices in question comply with the regulations or that a diagnostic team must have evaluated the particular crossing to determine that automatic gates are not appropriate. Defendant notes that the line of cases on which plaintiff relies have been effectively overruled by the Supreme Court in Norfolk v. Shanklin. Shanklin held that federal funding and not a particularized examination of the crossing determines preemption:
As a result, the FRSA pre-empts respondent's state tort claim that the advance warning signs and reflectorized crossbucks installed ... were inadequate. Because TDOT used federal funds for this signs' installation, [FRSA] governed the selection and installation of the devices.....Once the FWHA approved the project and the signs were installed using federal funds, the federal standard for adequacy displaced Tennessee statutory and common law addressing *1188 the same subject, thereby pre-empting respondent's claim.
Norfolk v. Shanklin, 529 U.S. 344, 358-59, 120 S.Ct. 1467,146 L.Ed.2d 374 (2000); see also Bock v. St. Louis Southwestern Ry. Co., 181 F.3d 920, 922 (8th Cir.1999) ("Since Easterwood, our court has been quite clear that if federal funds have been expended for warning devices at a grade crossing, state tort claims alleging negligence in the maintenance of the crossing are preempted."); St. Louis Southwestern Ry. Co. v. Malone Freight Lines, 39 F.3d 864, 866 (8th Cir.1994) ("To decide whether the ... claims are preempted under Easterwood, we must decide whether federal funds participated in the installation of a warning device.").
Plaintiff, when confronted with these affidavits and other documents purporting to demonstrate that the crossbucks installed at Goldsmith Street were part of a federally funded program, may not simply deny this fact and rest. Rather, Fed.R.Civ.P. 56(e) requires that the nonmoving party, in this case the plaintiff, "set forth specific facts showing that there is a genuine issue for trial." Plaintiffs legal arguments against preemption fail to do this, and plaintiff refrains from making any substantive factual argument. For these reasons, summary judgment as to inadequate crossing device claims is warranted.
Whether failure to train allegations are preempted
Last, defendant argues that plaintiffs claim n, failure to train, allegations are preempted by FRSA and controlling federal regulations, 49 CFR § 240.1. In response, plaintiff cites Mr. Payne's petition in his claim against defendant in other litigation, that "their failure to train him was the proximate cause of his injuries sustained in the collision." (Doc. 24 at unnumbered 15.) As stated by the court in Miller,
a party opposing a motion for summary judgment is not without obligations. Rule 56(e) states that "when a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest on mere allegations or denial of his pleadings, but his response, by affidavit or otherwise provided in this rule, must set forth specific facts that there is a genuine issue for trial."
Miller, 728 F.2d at 1023-24. If the party opposing a motion for summary judgment is not allowed to rely merely upon its own allegations or pleadings, then neither may she simply restate another party's mere allegations from other litigation. Plaintiff fails to proffer admissible evidence of specific facts through affidavit or otherwise which would support a claim of failure to train.
Furthermore, plaintiff repeatedly addresses Mr. Payne's allegations and testimony throughout her response, often noting that his credibility is in question, and particularly that Mr. Payne's testimony that defendant relies on in moving for summary judgment was made in a case to which the plaintiff was not a party:
The Defendant relies so heavily on the testimony of [Mr. Payne] that it overlooked all the conflicting things he said which implicate his negligence and the negligence of [defendant]. Genuine issues of material fact exist. The Defendant's motion rests on [Mr. Payne's] credibility and therefore, for that additional reason, this is a case for the jury.
(Doc. 24 at unnumbered 16.) As the Eighth Circuit wrote in Lundeen v. Cordner, "[t]he real gravamen of plaintiffs objection is not that there is conflicting evidence but rather that the summary judgment rests upon" the testimony of one witness, here, largely Mr. Payne. Lundeen v. Cordner, 354 F.2d *1189 401, 408 (8th Cir.1966) His testimony being so important, "it is asserted that the case should proceed to trial in order that the demeanor of the witness could be observed and his testimony subjected to the test of cross-examination." Id. The court noted in that case that a party opposing a motion for summary judgment cannot force a trial "merely in order to cross-examine" such a witness, "nor must the Court deny the motion for summary judgment on the basis of a vague supposition that something might turn up at the trial." Id.
Finally, while plaintiff cites Mr. Payne's allegations and argues as a matter of fact the issue of whether or not he was trained properly, she never addresses the legal issue of whether these "failure to train" allegations were, as defendant contends, preempted by FRSA. Once again, Local Rule 7-4.01(E) states that "[a]ll matters set forth in the statement of the movant shall be deemed admitted for purposes of summary judgment unless specifically controverted by the opposing party." In this instance, the federal preemption of failure to train claims is undisputed. The undisputed preemption of failure to train allegations, as well as the lack of positive evidence offered by the plaintiff beyond the pleadings of another litigant, warrants summary judgment as to the failure to train claims.
For these reasons,
IT IS HEREBY ORDERED that the motion of defendant for summary judgment (Doc. 19) is sustained as to plaintiffs claims g and j, regarding lighting, signaling, and whistling devices; claims a, b, k, regarding maintenance of the grade crossing; claim q, regarding speed reduction due to knowledge of previous accidents; claims 1, m, o, and p, regarding the inadequacy of crossing devices; and claiming on the failure to train.
IT IS FURTHER ORDERED that the motion for summary judgment is denied as to claims c, d, e, regarding the speed of the train, because there remains a genuine issue of material fact as to whether or not the train was traveling within the federally mandated speed limit. These claims remain for trial, along with claims h, i, r, s, t, and u.
|
299 So.2d 268 (1974)
The WATER WORKS BOARD OF the CITY OF LEEDS, a public corporation, et al.
v.
Charles O. HUFFSTUTLER et al.
SC 545.
Supreme Court of Alabama.
August 22, 1974.
*270 Charles L. Kerr, Leeds, Bibb Allen, Birmingham, for appellants.
Johnson North Haskell & Slaughter, Birmingham, for appellees.
JONES, Justice.
This appeal is from a decree of the Circuit Court of Jefferson County declaring invalid two ordinances adopted by the governing body of the City of Leeds (the "City") and permanently enjoining the defendants below from acting pursuant to or in reliance upon these ordinances. The first of the ordinances in question purported to effect an amendment to the charter of The Water Works Board of the City of Leeds (the "Board"), and the second purported to mandate the transfer of the water system owned by the Board to a newly created Board of Water and Sewer Commissioners under conditions which would have resulted in the diversion of a fixed percentage of the gross revenues from such water system to the City. We affirm the judgment of the Circuit Court in the belief that the first ordinance represents an unlawful assertion of power over the Board by the City and that the second attempts to fix conditions for the transfer of the water system which unconstitutionally disregard the contractual rights of the Board's bondholders.
Suit was brought in this case by Charles O. Huffstutler, Kenneth Huddleston, Charles Abel and Albert O. Turner against the Board, the City and Paul S. Blair and James McCraney. Huffstutler, Huddleston and Abel sued in their capacities as the incumbent directors of the Board at the time suit was brought and as citizens and taxpayers of the City. Turner sued in his capacity as a citizen and taxpayer of the City. Appellant City was made a party to this suit because the plaintiffs below sought to have the ordinances of the City here in question declared illegal, void and of no effect. Appellant Board was made a party in order that the transfer of its water system pursuant to one of these ordinances could be enjoined pending a determination of the validity of such ordinance. Appellants Blair and McCraney were made parties in order that they might be enjoined from serving as directors of the Board pending a determination of the right of the City to increase the number of positions on the board of directors of the Board.
The Board is a public corporation organized under the provisions of Tit. 37, §§ *271 394-402, inclusive, Code of Alabama 1940 (Recomp.1958), (said sections being herein together referred to as the "Water Board Statute"). The Board was incorporated by a charter filed for record in the office of the Judge of Probate of Jefferson County on May 14, 1943, and that charter has not been since amended except to the extent that amendments thereto may have by operation of law resulted from acts of the Legislature of Alabama mandating changes in the powers or organizational structure of corporations organized under the Water Board Statute. The charter now lawfully provides that the corporate powers of the Board shall be exercised by a board of directors consisting of three directors.
At a meeting held on January 29, 1973, the governing body of the City adopted the two ordinances which were challenged in this litigation. The first ordinance, Ordinance No. 378, proclaimed that the governing body of the City desired to increase from three to five the number of directors of the Board and then ordained that the Board's charter was ipso facto amended to provide for such increase. No action prior to the adoption of Ordinance No. 378 had been taken by the board of directors of the Board proposing such an amendment to its charter, and no action has since been taken by said board of directors ratifying or approving the amendment purportedly effected by such ordinance. At the same meeting as that at which Ordinance No. 378 was adopted, the governing body of the City elected Appellants Blair and McCraney to fill the two positions on the board of directors of the Board purportedly created by such amendment.
The second ordinance challenged in this litigation, Ordinance No. 379, authorized the incorporation of a Board of Water and Sewer Commissioners of the City of Leeds for the purpose of taking over the ownership and operation of both the Board's water system and the City's sanitary sewer system. The governing body of the City also sought by Ordinance No. 379 to prescribe the conditions upon which the transfer of the Board's water system was to be made to the Board of Water and Sewer Commissioners. As recognized in Ordinance No. 379, the transfer of the Board's water system could not take place unless agreed to by the Board [Tit. 37, § 402(33), Code of Alabama 1940 (Recomp.1958)], and from the record of this case, it is abundantly clear that the governing body of the City believed that the enlargement of the membership of the board of directors of the Board would make it possible to obtain the Board's agreement to the proposed transfer without having to wait two years, the period that would otherwise have to elapse in order for the governing body of the City to elect a majority of the three directors favorable to such transfer.
As a condition of the transfer of the Board's water system to the Board of Water and Sewer Commissioners, Ordinance No. 379 provided that the Board of Water and Sewer Commissioners should assume and perform all contractual obligations theretofore incurred by the Board in connection with its water system. Ordinance No. 379 further provided that the City was to be paid a fixed percentage of the gross revenues of the water system. The Board has outstanding two separate series of bonds which are secured by mortgages covering the water system and the revenues derived from it. To the extent that the payment to the City of a fixed percentage of the gross revenues of the water system would constitute a charge on such revenues prior to the uses for which the whole of them had been pledged under the mortgages, Ordinance No. 379 threatened an infringement of the rights of the bondholders secured by the mortgages, notwithstanding the provisions in this ordinance for the assumption and performance by the Board of Water and Sewer Commissioners of all obligations incurred by the Board in connection with its water system.
After the adoption of these ordinances and the taking of steps by the City for their implementation, the appellees (plaintiffs *272 below) brought suit against the appellants in order to determine the validity of Ordinance No. 378 and Ordinance No. 379, and pending that determination, to have Blair and McCraney enjoined from serving as directors of the Board and further to have the Board enjoined from transferring its water system to the newly created Board of Water and Sewer Commissioners pursuant to Ordinance No. 379. The preliminary injunctions requested by the appellees were granted and made permanent by the final decree of the Circuit Court. Without affecting the issues presented in this case, the governing body of the City subsequently amended and readopted both ordinances here in question, and it is with reference to the final versions of such ordinances adopted on March 20, 1973, that this case was decided by the Circuit Court.
Although making eighteen assignments of error, the appellants, both in their brief and in oral argument, argued only two assignments, which were that the Circuit Court erred in holding Ordinance No. 378 and Ordinance No. 379 to be illegal, void and of no effect. The only questions to be decided on this appeal are, therefore, whether the holdings of the Circuit Court with respect to these ordinances are correct.
The challenge to Ordinance No. 378 presents the question of whether the governing body of the City can, in violation of the Board's Charter, unilaterally increase the number of directors of the Board for the purpose of immediately gaining a majority of directors who will be responsive to the will of said governing body. The appellants contend that § 397 of the Water Board Statute gives the governing body of the City the right so to increase the number of directors of the Board. The appellees contend that the Water Board Statute, considered as a whole, does not empower the governing body of the City to increase the number of directors in disregard of the Board's charter or to amend the charter to provide for such an increase without following the statutory procedure under which amendments to the charter are first proposed by the board of directors of the Board and then approved by the governing body of the City.
We believe that Judge William C. Barber, the trial Court Judge, has rendered an opinion in this case which comprehensively and correctly analyzes the authorities and principles of law that require us to affirm his decree holding Ordinance No. 378 invalid. The following portions of that opinion are adopted as our opinion in this case:
"The central issue in this case concerns the independence of public corporations such as the water works board here involved and their right to manage their affairs free of control by the governing bodies of the cities they serve, except for such control as may be lawfully exercised through the regular and periodic election of directors by such governing bodies. An understanding of the origins of such public corporations and the cases which have delimited and protected their separate status is necessary to a determination and resolution of this central issue.
". . . .
"In order to make it possible for municipalities to finance utility systems without being blocked by the limitations contained in the Constitution of 1901 (particularly Sections 222 and 225 relating to the creation of debt by municipalities), a number of statutes permitting municipalities to issue revenue bonds were enacted in the early 1930's, varying in detail, but in general making such bonds payable out of the revenues of the utility to be constructed, expanded or improved with the proceeds of such bonds. The opinions of the Justices of the Supreme Court of Alabama on the constitutionality of such statutes were sought in several instances, e. g., Opinion of the Justices, 226 Ala. 18, 145 So. 481 (1933) (considering the Goodwyn Act, Act No. 265 adopted at the 1932 Extraordinary Session of the Legislature of Alabama (hereinafter called `the Legislature') ), Opinion of the Justices, 226 Ala. 570, 148 *273 So. 111 (1933) (considering the Kelley Act, Act No. 102 adopted at the 1933 Extraordinary Session of the Legislature), Opinion of the Justices, 228 Ala. 140, 152 So. 901 (1934) (considering the Carmichael Act, Act No. 107 adopted at the 1933 Extraordinary Session of the Legislature); and several leading test cases concerning such statutes were decided by the Supreme Court, Bankhead v. Town of Sulligent, 229 Ala. 45, 155 So. 869 (1934), Oppenheim v. City of Florence, 229 Ala. 50, 155 So. 859 (1934), Smith v. Town of Guin, 229 Ala. 61, 155 So. 865 (1934).
"A considerable body of law developed from the State's experimentation with the power of a municipality to issue its revenue bonds and to use the proceeds thereof to construct or improve a utility which it owned. Although such body of law did in a great number of instances permit desired financing arrangements, the issuance of revenue bonds by a municipality itself was, nevertheless, circumscribed by a fairly elaborate set of rules which could not always accommodate reasonable projects. See Town of Opp v. Donaldson, 230 Ala. 689, 163 So. 332 (1935).
"The ultimate solution to the complexity of financing municipal utility systems was achieved by legislation permitting the establishment of independent public corporations to own and operate the utility systems for the municipalities to be served by such system. Such public corporations derived their immense usefulness in this respect from their legal status as special political entities created by the Legislature which, so long as they maintained their corporate separation from the municipalities they served, were not subject to the constitutional limitations on such municipalities.
"The Water Board Statute under which respondent The Water Works Board of the City of Leeds was organized (Act No. 228 adopted at the 1936-1937 Extraordinary Session of the Legislature and codified as Sections 394-402, inclusive, of Title 37 of the Code of Alabama of 1940) was the first general law enacted by the Legislature to permit the financing of municipal utilities by a public corporation separate and independent from the municipality to be served by such utilities. In its initial form the Water Board Statute limited corporations organized thereunder to the financing and operation of water systems and sanitary sewer systems, but as the usefulness of such corporations was proved by experience, powers with respect to gas systems were added (Act No. 154 adopted at the 1947 Regular Session of the Legislature (unofficially codified as Section 402(2)-402(14), inclusive, of the 1958 Recompilation of the Code of Alabama of 1940)). The value of the State's experience with the Water Board Statute has been further confirmed by the subsequent enactment of similar statutes which, although varying in both scope and detail from the Water Board Statute, faithfully follow its concept. (See Act No. 775 adopted at the 1951 Regular Session of the Legislature (unofficially codified as Sections 402(28)-402(46), inclusive, of Title 37 of the 1958 Recompilation of the Code of Alabama of 1940) and Act No. 175 adopted at the 1951 Regular Session of the Legislature (unofficially codified as Sections 402(15)-402(27), inclusive, of Title 37 of the 1958 Recompilation of the Code of Alabama of 1940), said Acts No. 775 and 175 and sections thereof being hereinafter cited as sections in the 1958 Recompiled Code.)
"In a number of cases considering the status of boards organized under the Water Board Statute, the Supreme Court has emphasized the corporate independence of such boards, distinct and apart from the cities they serve, and has thereby preserved their usefulness in financing utility systems. The first case decided by the Supreme Court of Alabama involving a water board organized under the Water Board Statute was Smith v. Water Works Board of the City of Cullman, 234 Ala. 418, 175 So. 380 (1937). The Court held that a proposed revenue bond issue by the water *274 board in that case did not violate Sections 222 and 225 of the Constitution because the water board was a public corporation to which such constitutional provisions did not apply. Although the bonds considered in the Smith case were revenue bonds of a character that would not at any rate have constituted debt within the meaning of Sections 222 and 225, the Court did not rely on this point but based its decision on the independent corporate status of the water board. To the same effect is the Court's decision in Water Works Board of the City of Mobile v. City of Mobile, 253 Ala. 158, 43 So.2d 409 (1949).
"In Atkinson v. City of Gadsden, 238 Ala. 556, 192 So. 510 (1939), the Supreme Court considered the argument that the transfer of the water system of the City of Gadsden to a water board in conjunction with a bond issue to finance improvements to said system amounted to the granting of a franchise to the water board which was in excess of thirty years and therefore in violation of Section 228 of the Constitution. In accordance with the doctrine that water boards are independent corporations which do not derive their powers from the cities they serve, the Supreme Court held that the grant of the franchise to operate a water system was from the Legislature in the exercise of its soverign power and not from the city.
"In the case of Jackson v. Hubbard, 256 Ala. 114, 53 So.2d 723 (1951), the Supreme Court considered the effect on a water board of a change in the form of the governing body of a city from that of a mayor and council to a city commission. Prior to the change in the form of city government, the mayor and council had at the appropriate time elected directors of the water board for staggered terms of six years. The new city commissioners attempted to remove the incumbent directors of the water board and to appoint new directors on the theory that the terms of office of the incumbent directors had been terminated by the change in the form of city government. The city commissioners relied principally on the statutes governing a change to a commission form of government, among which was Section 45 of Title 37 which provides in pertinent part as follows:
"`The commissioners of such city, to be known as the board of commissioners of such city, shall have, possess and exercise all the powers and authority, legislative, executive, and judicial, possessed and exercised by the mayor and board of aldermen and board of police commissioners, and any and all other boards (except boards of education), commissions and officers of said city of any and every sort whatsoever; and all such boards, commissions and officers (except those provided for by this article) shall then and thereby be abolished and the terms of office of any and all such officers or officials shall then and thereby cease, except boards of education.' [Emphasis supplied.]
To the same effect is Section 96 of Title 37. Despite the clear statutory language of Sections 45 and 96, the Supreme Court held that it was the intent of the legislature in the subsequent enactment of the Water Board Statute to provide for the independence of such boards and the survival in office of the incumbent directors thereof when a change in the form of city government occurred.
"`We agree with counsel for appellants, respondents below, that the supplying of water to a city and its inhabitants is a municipal function and that the Water Works Board of the City of Auburn is in that sense an agency of the City. But we cannot agree that it was the legislative intent that the board of directors of a water works board be construed as that character of board which is abolished upon the adoption of a commission form of government.' 256 Ala. at 120, [53 So.2d 723.]
"The case of City of Mobile v. Cochran, 276 Ala. 530, 165 So.2d 81 (1964), considered the question of whether an officer of *275 the Board of Water and Sewer Commissioners of the City of Mobile was an employee or officer of the city itself within the meaning of the anti-conflict-of-interest statutes which prohibit the city from dealing with its own officers and employees (Sections 77, 108 and 414 of Title 37). Cochran was an agent for a fire insurance company, and while he was serving as an officer of the Board of Water and Sewer Commissioners, his company submitted a winning bid for fire insurance to cover a project owned by the city. Cochran would share in the premium paid for such insurance. The city declined to pay the premium because it was afraid that Cochran's status an an officer of the Board of Water and Sewer Commissioners made it illegal for the city to have any business dealings with him or his company. Because of its interest in having the legal question decided, the Water Works Board of the City of Mobile, a board organized (like the Leeds Board) under the Water Board Statute, intervened in the case.
"The Court held that Cochran was an officer of a corporation separate and distinct from the City of Mobile and that the payment of the premium to his company was not barred by the conflict of interest statutes applicable to municipalities.
"`Being distinct and separate corporations, the relationship of appellee Cochran as an officer of the Board does not necessarily clothe him with any official duties in connection with the City of Mobile, nor is he necessarily cast as an employee of said municipality by virtue of his official connections with said Board.
"`Although there may be some relationship in ultimate objectives of the two, and some kindred authority to engage in activities of a proprietary or governmental character for the benefit of the inhabitants of the City of Mobile, and in such respect the Board is an agency or arm of the City of Mobile, nevertheless, the two corporations are distinct, separate and independent corporations, each charged with respective separate and distinct duties and authority under the law. The legislature had defined and limited the functions of each corporation, and provided for its officers and prescribed their duties. There are no provisions for common or mutual control, nor do the same overlap. Each set of officers control in their own right with no cross-currents of authority.' 276 Ala. at 531, 532, [165 So.2d 81.]
"With respect to corporations organized under the Water Board Statute, the Court further said that:
"`What we have said above with reference to the distinctions and authority of the City of Mobile and the Board of Water and Sewer Commissioners apply with equal force to appellant, City of Mobile, and appellee, Water Works Board; and also to the authority and respective duties of the officers of each corporation. 276 Ala. at 532, [165 So.2d 81]'
"In a recent opinion dealing with boards organized under the Water Board Statute, the Supreme Court upheld the right of a water board to sell real estate to a private concern on credit. Coxe v. Water Works Board of the City of Birmingham, 288 Ala. 332, 261 So.2d 12 (1972). The argument made against the right of the Board to sell its property on credit was that such a transaction would violate Section 94 of the Constitution which provides that the legislature shall not have the power to authorize any county, city, town or other subdivision of this state to lend its credit or to grant public money or things of value in aid of, or to any individual, association or corporation. The Court concluded that the board was an independent entity and not a subdivision of either the City of Birmingham or the State of Alabama and, therefore, did not come within the limitations of Section 94.
"The cases considered establish that it is the law of this State that a public *276 corporation organized under the Water Board Statute, such as the Board in this case, is an entity separate and independent from the city which it serves and that the city can lawfully exercise only such power over such corporations as is conferred on the city by the charter of such corporation and the general laws of the State under which it is organized. If such corporation functioned as a mere arm or agency of the city, subject to the legislative power of the city, it could not, without making a mockery of the Constitution of this State, perform its intended function of financing and operating municipal utility systems.
"Relying on the language in one section of the Water Board Statute (Section 397 of Title 37, as amended) that `the governing body of any municipality which has heretofore or hereafter authorized the creation of a corporation as provided herein may, at its option, increase the board of directors from three to five members. . .,' the respondents argue that the governing body of the City has an absolute right to increase the number of directors of the Board without the necessity of first having a conflicting provision of the Board's Charter amended through use of the general amendatory procedure provided in the Water Board Statute. In effect, this argument asserts that, with respect to increasing the number of directors, the Legislature has created a special right in the City which must be recognized despite its inconsistency with the remainder of the Water Board Statute. The special right can be used to seize control of a water board organized under that Statute in violation of its corporate charter. To sustain this argument, the respondents must show that the Legislature intended to depart radically from the general structure of statutory and case law which has heretofore preserved the corporate integrity of water boards organized under the Water Board Statute.
"With respect to the question of legislative intent, the Court does not believe that logic favors the respondents' argument. In reaching its conclusion in Jackson v. Hubbard, supra, that the terms of office of the directors of a water board were not terminated by a change in the form of city government, the Supreme Court made the following observation about the staggered six-year terms for which water board directors are elected:
"`The change made by the legislature in 1943, providing for staggered terms, seems to us to indicate a clear legislative intent to make free from any doubt the permanency and independence of the status of the members of the board of directors.' 256 Ala. at 120, [53 So.2d 723.]
The effect of such staggered six-year terms is to impose upon any incoming city governing body a wait of at least two years before it will have an opportunity to elect a majority of the directors of the water board. It was obviously the policy of the Legislature to protect such boards, which have responsibilities both to bondholders and to users of their water systems, from the political shifts and machinations which often take place on the heels of a change in city government. The same is true if the number of directors has been increased to five, because the statute provides that the two additional directors shall also be elected for staggered six-year terms (Section 397 of Title 37, as amended).
"The present governing body of the City of Leeds, which took office in October, 1972, claims the special right to increase the number of directors in violation of the Board's Charter as a means of gaining immediate control of the Board. But what would be the City's position if the Board, with the consent of a prior governing body, had earlier amended the Charter to provide for five directors and all five positions were now filled? The City's governing body would then have no choice but to wait until, in the due course of exercising its right to elect directors, it achieved the change in the Board's directors which it desired.
*277 "In this perspective, the unilateral right claimed by the City's governing body to add two directors to the Board would reduce the statutory provision upon which this claim is based to nothing more than a one-shot opportunity for a city governing body to seize control of the water board. Once this one-shot opportunity has been exhausted, relations between the city and the water board would again be governed by the regular provisions of the Water Board Statute without possibility of further upset. The respondents' position gives a demeaning . . . interpretation to the intention of the Legislature in enacting the statutory provision which allows for an increase in the number of directors.
"When viewed in the context of the Water Board Statute as a whole, the purpose of such provision is obviously to allow an increase in the number of directors if the directors of the water board and the governing body of the city agree that more effective representation of the community interest will result from such an increase. Such an increase can then be authorized by a charter amendment made in accordance with the amendatory procedure provided in the Water Board Statute.
"If it had been the intention of the Legislature to dispense with the policy of safeguarding the independence of water boards. . ., it could have adopted a law making the directors of a water board serve at the pleasure of the city governing body. Surely it would not have adopted a one-shot takeover scheme, as contended by the respondents, which could not even have been used by succeeding governing bodies of the city.
"It is a well known rule of statutory construction that the word `may' when used in a statute conferring power on a public official or agency can properly be construed as mandatory when the rights of the public are involved, Fuller v. State, 31 Ala.App. 324, 16 So.2d 428 (1944). The Court is of the opinion that the phrase, `at its option,' following the word `may' in the sentence of Section 397 of Title 37 allowing an increase in the number of directors was intended to negate any implication that that statutory provision created a mandatory obligation on the part of the city and the water board to increase the number of directors to five. It was language intended to reinforce the permissive nature of the provision allowing such increase and should not be interpreted as conferring a special right on any city to override the charter of its water board in an effort to gain control thereof.
"The Court believes that its denial of the special right claimed be respondent City of Leeds to increase the number of directors of the Board is mandated by the case of Buffalow v. State ex rel. Inabinett, 281 Ala. 132, 199 So.2d 672 (1967), which is the principal authority concerning the effect of a water board charter and the procedure which must be followed for its lawful amendment. Before considering the facts of the case, it is important to understand the rather complicated legal framework in which it arose.
"Apparently believing that the cities of the State needed a new form of public corporation with greater powers than those organized under the Water Board Statute, the Legislature enacted Act No. 175 referred to . . . [earlier in this opinion]. In addition to providing for the incorporation of new boards with the power to finance, acquire and operate water, sewer, gas and electric systems, said Act No. 175 also included a provision (Section 402(27)) that water boards already incorporated under the Water Board Statute (Sections 394-402) could amend their charters so as to come under and be governed by all of the provisions of said Act No. 175. The Buffalow case involved the Water Works and Sewer Board of the City of Florala, which was a board originally incorporated in 1949 under the provisions of the Water Board Statute and which, after the enactment of said Act No. 175, amended its charter to come under that Act.
*278 "At its 1956 Second Special Session, the Legislature enacted two companion acts, Act No. 113 and Act No. 116, which amended respectively Section 397 of the Water Board Statute and Section 402(17) of said Act No. 175. Briefly summarized, both of these acts provided with respect to any public corporation to which they were separately applicable (1) that any officer of the municipality connected with such corporation was, contrary to prior law, now eligible for election as a director of such corporation, and (2) that the governing body of such municipality might increase the number of directors of such corporation from three to five. Section 402(17) was further amended (only Section 402(17) was amendedthe parallel provision of the Water Board Statute, Section 397, was not changed) in 1957 to provide that any officer of the municipality appointed to serve as a director should serve for the term for which he was appointed or during his tenure as a municipal officer, whichever expired first.
"Inabinett, as plaintiff in the Buffalow case, brought an action of quo warranto against Buffalow charging him with unlawfully holding the office of director of the Water Works and Sewer Board of the City of Florala. Plaintiff Inabinett had been appointed to said Water Works and Sewer Board during his term as a member of the City Council of the City of Florala. His term of office as a member of the City Council ended in October, 1964. He continued to attend and participate in meetings of the directors of said Water Works and Sewer Board until he was advised on January 28, 1964, that Buffalow had been appointed as a director of said Board to fill the unexpired portion of the term for which Inabinett had been originally appointed, but which, pursuant to the 1957 amendment referred to above, had been cut off by the ending of his term as a city councilman. Although, as previously mentioned, the charter of the Water Works and Sewer Board of the City of Florala had been amended to bring said Board under the provisions of said Act No. 175, that charter had not been further amended to remove the restriction against officers of the City serving as directors of said Board.
"The holding of the lower court was as follows:
"`It is the opinion of the Court that the general statutes of the State permitting members of the City governing bodys [sic] to serve as Directors of such Water Works and Sewer Boards is permissive only and is not directive or mandatory that they must serve on such boards, and the articles of incorporation of this particular board not having been amended to permit such serving by the members of the governing body, it is the opinion of the Court that the relator during his term as a member of the City Council of the City of Florala, and the respondent during his term as Mayor of the City of Florala have each been only de facto directors of said board and should be excluded therefrom.' 281 Ala. at 133, [199 So.2d 672.]
"The Supreme Court stated that it was in full agreement with the conclusion reached by the trial court and adopted the conclusions of that court as the basis of its own opinion. In support of its decision, it made the following instructive comments:
"`A careful reading of the statutes involved will clearly indicate that the legislature carefully avoided any implication that the new statutes [Act No. 175 and the 1956 amendments to Section 397 and Section 402(17)] adopted from time to time were mandatory on the municipalities involved. The new statutes defined the outside limits of the authority of the corporations formed under their provisions. It never indicated that the corporation was required to exercise all of the authority which the legislature permitted it to exercise. [The Water Works Board of] [t]he City of Florala was not required to amend its charter so as to come under the 1955 amendments [Act *279 No. 175 adopted in 1951there were no applicable amendments in 1955]. It was permitted to if it chose. It chose to do so. Further, it was not required to amend its charter to remove the restriction against municipal officers serving on the board of directors of its water works board. It was permitted to if it chose under the 1956 amendment. It did not see fit to remove this restriction and it remains in its articles of incorporation. There is nothing to indicate that the legislature attempted to require that the restriction be removed where it appeared in certificates of incorporation already on file, but rather simply allowed the removal of the prohibition if the board found it desirable.' 281 Ala. at 134, [199 So.2d 672.] [Explanatory material in brackets added.]
"While the excerpt from the opinion refers to the City of Florala at the beginning of the fourth sentence in the above quotation, it is obvious from the context that what is meant is the Water Works and Sewer Board of the City of Florala, because otherwise the use of the pronoun `it' throughout the quotation thereafter would not make sense. Only said Board, and not the City itself, had a charter or articles of incorporation which was the subject of the whole discussion.
"The Buffalow opinion is not clear as to the statute under which the Florala Water Board should have proceeded in order to remove the troublesome restrictions from its charterwhether it should have been Section 395, as amended, which arguably applied to said board because it was organized under the Water Board Statute or Section 402(16) added by said Act No. 175, which arguably applied because said board had earlier amended its charter to come under said Act No. 175. The holding of the Court would not be changed by the answer to this question, however, because both statutory provisions prescribed identical amendatory procedures, and having been adopted at the same time, both should be presumed to reflect the same legislative intent.
"Because of the parallel way in which the Court compared the charter amendment made to come under said Act No. 175 with the charter amendment which would have been necessary for the board to make the changes allowed by the 1956 acts, there can be no doubt that such changes, whether they involve the eligibility of municipal officials to serve as directors or an increase in the number of directors, can only be made pursuant to the amendatory procedures of Section 395 or Section 402(16). Where the procedure prescribed in Section 395 of `the Water Board Statute for amending the charter of a water board is functionally the same as the procedure prescribed in Section 394 of that Statute for creating the charter of such board, and where no other amendatory procedure is prescribed in said Statute, it is necessary and logical that the amendatory procedure of Section 395 be construed broadly, as the Supreme Court did in the Buffalow case, supra, to enable said Statute to be coherently applied to the whole gamut of problems pertaining to the creation and regulation of boards organized thereunder.
"The governing body of respondent City of Leeds has ignored the amendatory procedure provided by Section 395 on the grounds that this section does not apply to an increase in the number of directors of the Board. Under what law does said governing body then claim the power to amend the Board's Charter? It has only such powers over the Board as are given it by the Water Board Statute and the Board's Charter, and the amendatory procedure provided in that statute confers on the City only the power to approve or disapprove amendments initiated by the directors of the Board. In the absence of any applicable statutory provisions dealing with the amendment of the Board's Charter, the respondents simply argue that the governing body of the City has the right to declare *280 the Charter amended, and pursuant to such declaration, put into effect the desired change. They further argue that that is the only kind of amendment required by the Supreme Court's holding in Buffalow. Such an argument exalts the most trivial kind of form into substance, because it reduces the Buffalow holding to nothing more than requiring the City, as a prerequisite to exercising its power over the Board's Charter, to go through the meaningless act of first declaring in a phrase of art using the word `amend' that it intends to exercise its power.
"Unless one is prepared to say that the Supreme Court based its Buffalow decision on that gossamer matter of form, the only way the respondents can avoid the required amendment of the Board's Charter is to argue as the appellant in Buffalow did in his brief on rehearing by the Supreme Court. He argued that the city had the right to implement the provisions of the 1956 amendments to Section 402(17) and Section 397 because those amendments represented a mandatory amendment to the charters of public corporations to which they were respectively applicable. In his view, the Legislature had amended such corporations' charters and the City of Florala was thus entitled to avail itself of the option thereby incorporated in the water board's charter by the 1956 amendments. But the Supreme Court in its Buffalow opinion rejected this argument in a clear holding that the 1956 amendments were permissive and did not constitute a mandatory amendment of the board's charter. The effect of such a holding is to leave no way for said 1956 amendments to be implemented except by an amendment to the Board's Charter in conformity with a statutory procedure, and the only such procedure in the Water Board Statute is Section 395 which the respondents have failed to follow."
We also affirm the decree of the Circuit Court holding Ordinance No. 379 invalid on the grounds that the express conditions thereof do not conform to the requirements of Tit. 37, § 402(33), Code of Alabama 1940 (Recomp. 1958), and that this ordinance will, if implemented in accordance with its terms under readily foreseeable circumstances, constitute an unconstitutional infringement of the contractual rights of the present bondholders of the Board. We desire, however, that this holding be viewed in the light of the particular defects of Ordinance No. 379 and not be misinterpreted to limit the proper and lawful rights of cities and water boards under § 402(33) to transfer water and sewer systems to boards of water and sewer commissioners organized under Tit. 37, §§ 402(28)-402(46), inclusive, Code of Alabama 1940 (Recomp. 1958).
Ordinance No. 379 attempts to comply with § 402(33) by using the exact language thereof to describe the obligations of the Board which are to be assumed by the newly organized Board of Water and Sewer Commissioners of the City of Leeds. It fails, however, to comply with § 402(33) because of its specific provisions which require that a fixed percentage of the gross revenues of the Board's water system be paid to the City as a first charge or lien on such revenues. The gross revenues of the water system have been pledged for other purposes under the mortgages securing the bondholders of the Board, and there can be diverted to the City under the arrangement contemplated by Ordinance No. 379 only the surplus revenues remaining after all requirements of these mortgages have been met.
Finding no error in the Circuit Court's judgment and decree disposing of the issues here presented, we affirm.
Affirmed.
HARWOOD, BLOODWORTH and McCALL, JJ., concur.
COLEMAN, J., concurs in the result.
|
United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT May 4, 2004
Charles R. Fulbruge III
Clerk
No. 03-41175
Summary Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
TIMOTHY M. BLACKMON,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 1:02-CR-97-2
--------------------
Before DUHÉ, BENAVIDES, and STEWART, Circuit Judges.
PER CURIAM:1
Timothy M. Blackmon appeals the sentence he received after he
pleaded guilty to possession with intent to distribute cocaine in
violation of 21 U.S.C. § 841(a). Blackmon argues that the district
court erred when it denied him a two-level adjustment in his base
offense level pursuant to U.S.S.G. § 3E1.1 for acceptance of
responsibility. Given that Blackmon was not sufficiently
forthcoming in his first conversation with the probation officer,
the district court’s denial of the adjustment should not be
1
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
disturbed. United States v. Medina-Anicacio, 325 F.3d 628, 648
(5th Cir. 2003); United States v. Washington, 320 F.3d 322, 327
(5th Cir.), cert. denied, 124 S. Ct. 942 (2003).
AFFIRMED.
2
|
283 N.J. Super. 505 (1995)
662 A.2d 976
ROXBURY TOWNSHIP BOARD OF EDUCATION, PLAINTIFF-RESPONDENT,
v.
WEST MILFORD BOARD OF EDUCATION, DEFENDANT-APPELLANT, AND WALLINGTON BOARD OF EDUCATION, AND D.Y. AND S.K., AS THE PARENTS OF J.K., DEFENDANTS-RESPONDENTS.
Superior Court of New Jersey, Appellate Division.
Argued June 13, 1995.
Decided July 31, 1995.
*511 Before Judges STERN, KEEFE and HUMPHREYS.
James S. Rothschild argued the cause for appellant (Riker, Danzig, Scherer, Hyland & Perretti, attorneys).
Linda J. Robinson argued the cause for respondents D.Y. and S.K. (Herbert D. Hinkle, attorney).
David B. Rand argued the cause for respondent Roxbury Township Board of Education (Rand, Algeier, Tosti & Woodruff, attorneys; Deborah A. White, on the brief).
Walter M. Slomienski, Jr. argued the cause for respondent Wallington Board of Education.
Geraldine Callahan, Deputy Attorney General, argued the cause for Amicus Curiae Commissioner of Department of Education (Deborah Poritz, Attorney General of New Jersey, attorney).
The opinion of the court was delivered by KEEFE, J.A.D.
The West Milford Board of Education (West Milford) appeals from a final judgment entered by Judge Reginald Stanton providing, inter alia, that, as of January 1, 1993, West Milford was the district of residency of J.K., an autistic child, and as such, it was responsible for the cost of J.K.'s education at Heartspring Lifeskills Learning Center (Heartspring), the development of an Individualized Education Plan (IEP), and related determinations concerning J.K.'s appropriate educational placement pursuant to State and Federal law. West Milford also appeals from a subsequent judgment entered by Judge Stanton assessing counsel fees against it and in favor of J.K.'s parents in the amount of $15,717.20. In its original appellate brief West Milford presented the following issues for resolution:
*512 POINT I THE TRIAL COURT'S DECISION THAT WEST MILFORD IS THE DISTRICT OF FINANCIAL RESPONSIBILITY FOR J.K.'s EDUCATION AT HEARTSPRING IS ERRONEOUS
A. The Trial Court Failed To Apply Pertinent Statutes and Regulations In Determining J.K.'s School District For School Funding Purposes
B. Judge Stanton's Failure To Follow This Statutory Scheme Set Forth In N.J.S.A. 18A:7B-12 Resulted In Great Inequities To West Milford
C. The Office Of Administrative Law's Actions In This Matter Were Those Of A "State Agency"
D. The Trial Court's Determination Of J.K.'s Domicile In West Milford Township Was Counter To Existing Case Law
POINT II THE TRIAL COURT ERRONEOUSLY AWARDED ATTORNEY'S FEES TO J.K.'s PARENTS UNDER 20 U.S.C.A. § 1415(e)(4)(B)
A. The Trial Court Failed To "Balance the Equities" In Ordering That West Milford Pay J.K.'s Parents' Attorneys Fees
POINT III THE TRIAL COURT ERRED IN FAILING TO ORDER AN ACCOUNTING AND THE TURNOVER OF FUNDS AWARDED TO WALLINGTON TO WEST MILFORD
At initial oral argument before us on April 11, 1995, West Milford argued for the first time that the Law Division lacked subject matter jurisdiction to enter the judgments under review. In view of the well established principle that "jurisdiction over the subject matter cannot be waived or conferred by consent or lack of objection thereto[,]" McKeeby v. Arthur, 7 N.J. 174, 81 A.2d 1 (1951), we asked for supplemental briefs on the issue, and invited the participation of the Commissioner of Education (Commissioner) as an amicus curiae. For the reasons stated herein, we reject West Milford's contention that the Law Division lacked subject matter jurisdiction, and also affirm on the merits of the judgments under review.
The facts necessary to understand the issues advanced by the parties are essentially undisputed. In 1989, J.K., an autistic child, and his parents lived in Wallington, New Jersey. In August of that year an Administrative Law Judge (ALJ) determined that the appropriate placement for J.K. was at Heartspring. The proceedings before the ALJ were brought pursuant to the Education For All Handicapped Children Act of 1975, 20 U.S.C.A. § 1401-61, now known as the Individuals with Disabilities Education Act, and referred to herein as the IDEA. In accordance with the ALJ's *513 order, which was final pursuant to 20 U.S.C.A. § 1415(e), the Wallington Board of Education (Wallington) placed J.K. in Heartspring and assumed the costs for that placement, including the obligation to provide other benefits guaranteed J.K. by the IDEA.
In December 1990, J.K.'s parents divorced. In the divorce decree, his parents were granted joint custody. S.K., J.K.'s father, maintained physical custody and remained in Wallington until December 1992, when he moved to Roxbury Township. Meanwhile, J.K.'s mother, D.Y., remarried and moved to West Milford in 1991.
On December 21, 1992, S.K. executed a certification consenting to the transfer of J.K.'s physical custody to D.Y. On December 17, 1992, S.K. advised the Superintendent of Schools of West Milford that D.Y. had custody of J.K. and he now resided with her in West Milford. S.K. and D.Y. executed a Student Transfer Card indicating that J.K. was being transferred from Wallington to West Milford. The expressed reasons for the transfer of physical custody were that J.K.'s mother now had a home rather than an apartment; her marriage permitted her to remain home during the day; and J.K.'s father had a job with the potential for relocation outside the State of New Jersey. J.K.'s parents believed that the transfer would give stability to J.K. and was in his best interests.
In a letter dated January 4, 1993, Howard B. Heller, Director of Special Services for West Milford, wrote to D.Y. on behalf of West Milford expressing "sincere reservations as to [J.K.'s] domicile in West Milford[,]" and advised her that West Milford's position was that "the new resident district of the father" or DYFS had the responsibility for tuition payments. He further advised D.Y. that, as a result of a visit by the West Milford Child Study Team, "there exists some question on behalf of the West Milford School District as to the continued necessity for a residential school placement for [J.K.] in order to meet his educational needs. *514 Certainly, [J.K.'s] current residential school placement in Kansas is in question."
J.K.'s parents, through their attorney, advised the Department of Education (Department) that West Milford refused to accept responsibility for J.K.'s education and asked the Department either to enforce the ALJ's 1989 decision, or to act on an emergent basis because termination of J.K.'s educational placement was imminent. The Department advised the parents' attorney that the request for emergent relief was procedurally deficient because it was not accompanied by a certification. The procedural deficiency was corrected in a new application filed with the Department on February 22, 1993.
On February 23, 1993, the Department's due process mediator for the Division of Special Education forwarded the parents' request for emergent relief to the Office of Administrative Law (OAL) for a hearing. The emergent nature of the parents' application was withdrawn when, at the request of the ALJ (not the one who rendered the 1989 decision), the parents reached an agreement with Heartspring to withhold its demand for payment pending the outcome of the ALJ's decision. Wallington was joined as a party by consent, and a plenary hearing was conducted.
In his June 10, 1993, written decision, the ALJ concluded that Wallington's obligation to pay expired as of December 31, 1992, and that West Milford and Roxbury should share the cost for the remainder of the 1992-93 school year. In a footnote, the ALJ rejected West Milford's argument that the State Facilities Education Act, N.J.S.A. 18A:7-12(b), applied in this context. West Milford had contended that J.K. was placed at Heartspring by a State agency because the first ALJ had entered the order, and as such, the statute required the district of the parent with whom the child lived prior to his most recent placement (Wallington) to bear the cost of J.K.'s education.
The ALJ further ordered the parents to seek modification of the divorce decree so that a singular residence for J.K. could be *515 established. The ALJ's opinion reflected his belief that his jurisdiction was conferred by the provisions of the IDEA inasmuch as he concluded the decision with the following statement: "This decision is final pursuant to 20 U.S.C.A. § 1415(e) and 34 C.F.R. § 300.509 (1986) and is appealable for filing a complaint and bringing a civil action either in the Superior Court of New Jersey or in a District Court of the United States. 20 U.S.C.A. § 1415(e)2, 34 C.F.R. § 300.511."
Roxbury appealed the ALJ's decision by filing a complaint in the Law Division. Roxbury invoked the jurisdiction of the Law Division pursuant to the provisions of the IDEA, 20 U.S.C.A. § 1415(e)(2), and N.J.A.C. 1:6A-18.3(a). West Milford filed an answer, counterclaim and cross-claim. In its answer, it admitted the allegations under which Roxbury invoked the jurisdiction of the Law Division. The defense of subject matter jurisdiction was not asserted.
As noted at the outset of this opinion, after receiving briefs from the parties and entertaining oral argument, Judge Stanton held that West Milford was responsible for J.K.'s education and residential costs at Heartspring, as well as other responsibilities flowing from the IDEA. Subsequently, as a result of the motion brought by J.K.'s parents, Judge Stanton assessed counsel fees against West Milford in the amount of $15,000. This appeal followed.
I
The IDEA guarantees the parents of a child with disabilities the right to "present complaints with respect to any matter relating to the ... educational placement of the child, or the provision of a free appropriate education to such child." 20 U.S.C.A. § 1415(b)(1)(E); N.J.A.C. 6:28-2.7. Heller's letter to J.K.'s parents denied their request for payment of J.K.'s residential placement and also questioned the appropriateness of his placement. Clearly, a dispute within the context of the IDEA was thereby created. Our Supreme Court has stated that when such a *516 dispute arises "between the board and the parents, either party has the right to resolve the matter through an administrative proceeding known as an `impartial due process hearing.'" Lascari v. Board of Educ., 116 N.J. 30, 37, 560 A.2d 1180 (1989) (quoting 20 U.S.C.A. § 1415(b)(2)). That is exactly what J.K.'s parents did in this matter. Upon receipt of the parents' request for a due process hearing, the Department treated the matter procedurally as a contested case under the IDEA and relevant administrative regulations.
At oral argument before us, West Milford and the Commissioner conceded that the parents' initial application for relief invoked the jurisdiction of the IDEA, and the matter was referred to the OAL on that basis. However, much has been made of the fact that the parents subsequently withdrew their request for emergent relief, and, thereafter, participated in a plenary hearing before the ALJ on the issue of which board or boards was or were responsible for the payment of J.K.'s placement costs. The suggestion is that somehow the dispute was transformed from one within the purview of the IDEA into one simply arising "under the school laws" and, consequently, within the jurisdiction of the Commissioner to resolve. N.J.S.A. 18A:6-9. As we read the regulations pertinent to this matter, only the settlement of the dispute would have removed the matter from the ALJ's "due process" jurisdiction. See N.J.A.C. 1:6A-4.2.
However, there was no settlement of the matter. The parents withdrew their request for emergent relief only because Heartspring agreed not to discharge J.K. for non-payment pending the outcome of the OAL hearing. We see nothing in the record before the ALJ wherein West Milford agreed to pay J.K.'s placement costs if it lost, nor did it withdraw that portion of Heller's letter which questioned the appropriateness of J.K.'s placement. If West Milford desired to relieve J.K.'s parents of the financial burden of participating in the OAL hearing, it could have stipulated that J.K.'s placement costs would be paid, with the question of allocation between the boards to await the outcome of a *517 contested case hearing before the Commissioner, and it could have withdrawn that portion of its January 4, 1993, letter in which it questioned the appropriateness of J.K.'s residential placement. That was not done, and, thus, we find nothing in the record that relieved the parents of the challenge presented to them by West Milford's letter.
Even if the only issue remaining before the ALJ was the question of which board(s) was (were) financially responsible, that issue by itself is sufficient to invoke the jurisdiction of the IDEA. Rabinowitz v. New Jersey State Bd. of Educ., 550 F. Supp. 481 (D.N.J. 1982).[1] While the issue of domicile may be a relevant factor between competing school districts as to which district shall be obligated to expend the funds necessary to comply with the IDEA, that issue is a matter of local law, and should not impact on an otherwise qualified child from receiving the free education that the statute mandates. As Judge Sarokin aptly noted, "[n]owhere in the wording of these provisions is there any reference to a child's technical domicile, nor is there any reference to incorporating state law to determine a state's obligations under the Act.... To read a domicile requirement into the Act would be inconsistent with the statute's plain language." Id. at 486.
Thus, if, as West Milford and the Commissioner contend, no dispute existed as to J.K.'s entitlement to residential placement, payment should have been guaranteed at the outset, and *518 J.K.'s parents should have been relieved of the burden of litigating the issue of who pays. Just as the IDEA does not base its determination of a handicapped child's rights on domicile, the same child's rights do not hinge on arrangements with respect to custody or how such arrangements may impact on residence and domicile. Here J.K. was denied the fundamental right of a free education guaranteed by the IDEA, and his parents were compelled to litigate an issue all parties now seem to say the parents never should have been required to litigate. That realization comes after the fact, and much too late. The point to be made is that J.K.'s parents were not given the peace of mind the Federal statute intended them to have. Without such assurances, the IDEA mandates their access to the procedural forum designed to guarantee the vindication of those rights. Until Judge Stanton, pursuant to the jurisdiction conferred upon him by the IDEA, ordered West Milford to provide J.K. with funding and special education services, no school district provided him with the benefits conferred by the IDEA, notwithstanding the fact that neither Roxbury nor West Milford sought a stay of the ALJ's final decision.
The fact that Judge Stanton had to decide a State law issue, i.e. domicile, in order to resolve the contest concerning responsibility for payment is of no moment. We must assume that the manner in which New Jersey chooses to implement the IDEA does not violate federal law. As such, the actual burden of paying the costs of a disabled child's education under the IDEA is placed by State law on the individual school districts, who, in turn, receive funding from the State. While the intricacies of State law cannot interfere with a person's right to receive the benefits of the federal statute, id. at 489, in the context of this litigation it was imperative to resolve the domicile issue in order to vindicate the larger federally granted right of a free education. There is no justification for fractionalizing that issue by sending it to the Commissioner for disposition.
*519 We are also unpersuaded by the argument that somehow subject matter jurisdiction may have been lost because the ALJ failed to send the matter back to the Department for a conference after the request for emergent relief was withdrawn. "The purpose of the conference is to assist the parties in defining issues, identifying evidence, exchanging facts, stipulating facts and listing possible witnesses. Mediation will be available at the conference if both parties agree to participate." N.J.A.C. 6:28-2.7(d)4i. A conference may also result in settlement. However, if it is not settled, the matter will be transmitted to the OAL. Id. at iv and vi.
No party takes the position here that the matter would have been settled if it had been sent back to the Department for a conference. As indicated earlier, once the parents invoked the jurisdiction of the IDEA, no one could have deprived them of access to the forum guaranteed to them under the statute, short of a settlement in which J.K.'s full federally granted rights would have been guaranteed. As to the other expressed purposes of the conference, it is clear from the ALJ's opinion that the issue was agreed upon and was simple. The only disagreement was the application of the facts to the principles of law that governed the issue of domicile. The ALJ's error in not following the procedure established by the regulations is clear. However, it was not so egregious as to deprive him of subject matter jurisdiction. We assume the Department did not think so either, inasmuch as it raised no objection when it received a copy of the ALJ's opinion.
Even if we were to assume that no IDEA issue was implicated by the parties' dispute, we hold that the Law Division, nonetheless, had jurisdiction to decide the matter. "[E]xcept in those cases where the legislature vests exclusive primary jurisdiction in an agency, a plaintiff may seek relief in our trial courts." Abbott v. Burke, 100 N.J. 269, 297, 495 A.2d 376 (1985). The Legislature did not give the Commissioner of Education exclusive jurisdiction in "controversies and disputes under the school laws." N.J.S.A. 18A:6-9. Rather, as the Court observed in Abbott, "when *520 a controversy arises in the field of education, the cases tend to determine remedies by a procedural course set by N.J.S.A. 18A:6-9." Abbott, supra, 100 N.J. at 301, 495 A.2d 376. Therefore, the issue now presented, properly framed, is whether the parties should be required to exhaust their administrative remedy. Id. at 297, 495 A.2d 376.
Exhaustion of administrative remedies is not compelled in all cases involving disputes arising under school laws. Durgin v. Brown, 37 N.J. 189, 202-203, 180 A.2d 136 (1962). Generally speaking, cases involving only questions of law do not require the exhaustion of administrative remedies. Abbott, supra, 100 N.J. at 298, 495 A.2d 376. An exception to that rule occurs when the resolution of the legal or constitutional issues is particularly fact sensitive and may be facilitated through the use of agency expertise. Id. at 299-301, 495 A.2d 376. The question of where a person is domiciled is fact sensitive, but it is the kind of issue that courts have routinely resolved. See Citizens Bank & Trust Co. v. Glaser, 70 N.J. 72, 357 A.2d 753 (1976); Lea v. Lea, 18 N.J. 1, 112 A.2d 540 (1955); Mansfield Tp. Bd. of Educ. v. State Bd. of Educ., 101 N.J.L. 474, 480, 129 A. 765 (E & A 1925); Edwards v. Edwards, 8 N.J. Super. 547, 551, 73 A.2d 759 (Ch.Div. 1950). No agency expertise is required to make the appropriate analysis. Neither West Milford nor the Commissioner has been able to articulate any distinction between considerations for determining domicile under N.J.S.A. 18A:38-1, as opposed to those used in determining domicile for other purposes. Knowing the questions before us, the Commissioner had the opportunity both to suggest the disposition on the merits if we disagreed with his contention concerning subject matter jurisdiction, or to seek the opportunity to file a further brief on the merits if we disagreed with his jurisdictional contention. The Commissioner did neither. In any event, we do not believe the unique circumstances of this case will constitute such precedent so as to deprive the Commissioner of an opportunity to be heard in the future or to convince a court that we may have overlooked something significant in this case. If we *521 have, it is because none of the parties, including the Commissioner as amicus, have called it to our attention.
We do not disagree with the Commissioner's statement in his brief that he has both the jurisdiction and the responsibility to determine which school district has the responsibility to bear the expense of the free, appropriate education granted for disabled children. However, if he wishes to obtain primary jurisdiction, some mechanism must be adopted to assure the parents of otherwise qualified children that both payment and services under the IDEA will continue uninterrupted where the only question is who is ultimately responsible for payment. We doubt that such a remedy can be implemented on a case by case basis, and, thus, a remand to the Commissioner would accomplish nothing with respect of the funding issue. Metromedia, Inc. v. Director, Div. of Taxation, 97 N.J. 313, 328-337, 478 A.2d 742 (1984).
Other arguments advanced by West Milford and the Commissioner on the issue of the Law Division's jurisdiction do not warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).
II
In his bench opinion of January 10, 1994, Judge Stanton agreed with the ALJ that J.K. had not been placed in Heartspring by a State agency, thereby rejecting West Milford's argument that N.J.S.A. 18A:7B-12(b) placed the obligation of J.K.'s educational costs on Wallington, and, by analogy, his residential costs as well. However, Judge Stanton disagreed with the ALJ's resolution of the domicile issue. He held that the parents were perfectly capable of coming to an agreement as to J.K's physical custody without court approval. He also disagreed with the ALJ's conclusion that a person can have more than one domicile. See In re Gillmore's Estate, 101 N.J. Super. 77, 243 A.2d 263 (App.Div.), certif. denied, 52 N.J. 175, 244 A.2d 304 (1968). Judge Stanton held that a child of a divorced couple, such as J.K., is domiciled where the parent the child lives with is domiciled, in *522 this case his mother in West Milford. See Edwards, supra, 8 N.J. Super. at 550-551, 73 A.2d 759 (noting that child living with mother takes mother's domicile if parents are divorced or legally separated). Consequently, the responsibility for J.K.'s education, like that of any child who changes school districts during a school year, is placed with the district where the parent with whom the child resides moved. N.J.S.A. 18A:38-1(a); N.J.A.C. 6:20-1.2(e).
In order to prevent parents from randomly switching school districts in such situations, the judge held that divorced parents had to have a united intent to establish a district as their child's district, and their decision would be determinative if reasonable and based on good faith considerations. Given that criteria, Judge Stanton found that J.K.'s mother had established West Milford as her home; J.K. had his room and furniture there; J.K.'s parents intended West Milford to be his residence; and J.K.'s mother and her new husband intended J.K. to live in West Milford should he no longer require a residential placement. Judge Stanton determined that the parents' decision was reasonable and made in good faith, and concluded that J.K. was a resident and member of the West Milford School District from December 21, 1992, the date J.K.'s parents decided to transfer physical custody to the mother. Thus, Judge Stanton imposed upon West Milford the obligation to pay J.K.'s education and residential costs for the second half of the 1992-93 school term as well as a duty to fulfill the other obligations of the IDEA.
Subsequently, J.K.'s parents moved for attorney fees pursuant to the IDEA. While West Milford did not then raise the question of whether Judge Stanton had subject matter jurisdiction to decide the issue, it contended that the issue before the ALJ was essentially an education law issue concerning the child's domicile, and, as such, was resolved solely upon the application of State law principles without the need to invoke legal rights flowing from the IDEA. Judge Stanton concluded that, although domicile was a focal issue in the resolution of the case, the IDEA was fundamentally implicated because West Milford refused to fund J.K.'s *523 education costs attributable to his disability. It was the nature of J.K.'s disability and the tremendous costs associated with it that prompted West Milford's legal position.
[T]he whole question wouldn't have arisen if he, in the first place, weren't such an expensive child and in second place the nature of his disability was not such that he was physically present in a residential institution outside the geographical boundaries of the of the school district.
Because the proceedings before the ALJ were essentially rooted in the IDEA, Judge Stanton found that it was Congress' intent, expressed in 20 U.S.C.A. § 1415(e)(4)(B), to award counsel fees to parents who prevail in such litigation. See Barlow-Gresham Union High Sch. Dist. v. Mitchell, 940 F.2d 1280, 1286 (9th Cir.1991) (Attorneys fees meet goal of IDEA because they reward parents for using the procedural mechanisms that IDEA has established to ensure the rights of children with disabilities to a free, public education.). Consequently, he assessed counsel fees against West Milford in the amount of $15,717.20.
We have reviewed the record in light of the contentions presented and conclude that Judge Stanton's findings of fact are amply supported by the record, and that he applied correct principles of law to those facts in arriving at his judgment on the issue of domicile, and the parents' entitlement to counsel fees under the IDEA. Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 484, 323 A.2d 495 (1974). The issues presented on appeal concerning the merits of the judgments under review do not warrant discussion in a separate opinion. Thus, we affirm the judgments under review substantially for the reasons stated by Judge Stanton in his bench opinions of January 10, 1994, and March 18, 1994, respectively. R. 2:11-3(e)(1)(A), (E).
Affirmed.
NOTES
[1] To the extent that the dicta in A.A. on Behalf of A.A. v. Cooperman, 218 N.J. Super. 32, 38, 526 A.2d 1103 (App.Div. 1987) can be read to indicate that the ALJ is without jurisdiction under the IDEA to resolve a dispute where a school district declines to pay for a free education to which the disabled child is otherwise entitled, we respectfully disagree.
Likewise, L.P. v. Edison Bd. of Educ., 265 N.J. Super. 266, 626 A.2d 473 (Law Div. 1993) is factually distinguishable. In that case, the ALJ attempted to join State agencies as parties in a due process hearing who neither received funds under the IDEA nor were charged with the responsibility of providing a free and appropriate education to disabled children. The case does not stand for the proposition that IDEA jurisdiction is not invoked where the sole issue is the school district's responsibility to pay.
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