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https://www.courtlistener.com/api/rest/v3/opinions/5902533/ | OPINION OF THE COURT
Cohen, J.
In this action to recover damages for defamation, we are asked to determine whether the applicable statute of limitations bars the consideration of certain allegedly defamatory statements posted on a publicly accessible Internet weblog—or “blog”— dedicated to the local community issues of Wawayanda, New York, located in Orange County, and on the local newspaper’s website. We are also asked to determine, inter alia, whether the plaintiff was required to plead special damages regarding published accusations on these websites that he was responsible for dumping a severed horse head into the swimming pool at a residence belonging to a member of the Town Board of the Town of Wawayanda (hereinafter the Town Board).
For the reasons stated below, we disagree with the Supreme Court’s determination that, absent a particularized allegation of special damages, the third cause of action was not actionable, but otherwise agree with its conclusions with respect to the first, second, and fourth causes of action. Accordingly, we modify the order appealed from.
Factual and Procedural Background
The defendant Wayne Skinner, a former Town Supervisor of the Town of Wawayanda, and his wife, the defendant Karen Skinner (hereinafter together the Skinner defendants), were involved in a number of Town policy disagreements with the plaintiff, David LeBlanc. Wayne Skinner was elected to his position as a Democrat. The plaintiff, a Wawayanda businessman, attended numerous Town Board meetings, voicing his concerns *205over a variety of issues, including property taxes, and donated money to one of Wayne Skinner’s Republican political rivals.
Nonparty Gail Soro was one of Wayne Skinner’s colleagues, and a Wawayanda Town Board member. Soro likewise was an elected Democrat. In July 2006, Soro discovered a severed horse head in her swimming pool. It was never determined who was responsible for the incident. Nonetheless, as could be expected after any incident with such cinematic bravado,* public comment ensued. Of relevance here were a number of blog entries posted on a website allegedly dedicated to community issues and local government, and a number of comments on the local newspaper’s website. These blog entries and comments accused the plaintiff of being responsible for the horse head incident.
The plaintiff filed a summons and complaint on July 28, 2008, commencing this action against Michael Hawkins, also known as “wayguy,” as well as against “John Doe (‘johnnySOO’),” and “John Doe (‘wawayandafirst’),” referencing the relevant blog profiles or monikers used by the individuals who posted the allegedly defamatory comments. Neither of the Skinner defendants was specifically identified by name in the original complaint. However, on September 18, 2008, Wayne Skinner was served with copies of the original summons and complaint as “John Doe (‘johnny500’)” and “John Doe (‘wawayandafirst’).”
On October 20, 2008, the plaintiff filed an amended verified complaint. The amended verified complaint specifically identified Wayne Skinner as a defendant, and added Karen Skinner as a defendant. Copies of a supplemental summons and the amended verified complaint were served upon Karen Skinner on October 28, 2008.
In the amended complaint, the plaintiff alleged that, with the assistance of Hawkins, the Skinner defendants posted several defamatory statements on the Internet regarding the plaintiff. More specifically, the first and second causes of action in the amended verified complaint alleged that Hawkins, at the request and direction of the Skinner defendants, posted two allegedly *206defamatory statements regarding the plaintiff on August 29, 2007, and October 6, 2007, respectively, on the now-defunct website www.wawayandafirst.blogspot.com (hereinafter the Wawayandafirst blogspot). In the third cause of action, the plaintiff alleged that the defendants had posted the following comment on October 30, 2007, at www.forums.recordonline.com, a site run by the area newspaper (hereinafter the newspaper site): “We all know who was behind the Horse Head . . . there is only one man around town dumb enough, violent enough and with a vendetta to do that. . . Dave LeBlanc ... I hope all this negative publicity on him destroys his business.” The fourth cause of action alleged that the defendants posted the following comments on the newspaper site on October 30, 2007: “Dave LeBlanc is a terrorist” and “[w]ho was the one who threw the horse head in Gail’s pool? . . . check it out: . . . wawayandafirstblogspot.com.”
Hawkins served a verified answer, asserting, inter alia, a cross claim against the Skinner defendants, in which he alleged that he was the “agent and servant of the Skinner Defendants who performed actions” at their “request and direction.” The Skinner defendants together answered the complaint, asserting, inter alia, an affirmative defense based on the statute of limitations, and separately answered Hawkins’s cross claim, denying the allegations thereof. Discovery ensued, including party depositions. At his deposition, Hawkins testified that the Skinner defendants were his aunt and uncle, and that they directed the creation and maintenance of the relevant blog profiles on the Wawayandafirst blogspot and the newspaper site. Hawkins also testified that the Skinner defendants controlled the subject matter of the postings, and that the Skinner defendants “shared access” to these created profiles. During their own respective depositions, the Skinner defendants disputed the allegations made by Hawkins, and contended that he acted of his own accord.
The plaintiff moved for summary judgment, among other things, on the complaint and dismissing the Skinner defendants’ fourth affirmative defense, which asserted that the first and second causes of action were barred by the applicable one-year statute of limitations set forth in CPLR 215 (3). Hawkins opposed the motion. The Skinner defendants also opposed the motion, and cross-moved for summary judgment dismissing the complaint insofar as asserted against them, contending that all four causes of action insofar as asserted against them were *207time-barred. The Skinner defendants also contended that, since this is a defamation action, the plaintiff was required to allege special damages. They then submitted that the plaintiff had failed to allege special damages with particularity, and, thus, the defamation causes of action could not be sustained. The plaintiff opposed the cross motion, contending that the Skinner defendants were timely served with process. He further argued that the defamatory statements at issue were defamatory per se and, thus, the pleading of special damages was not required.
As relevant to the instant appeal, the Supreme Court, in an order dated January 28, 2011, determined that the third and fourth causes of action could not be sustained because the facts alleged therein did not constitute defamation per se, and the plaintiff failed to allege special damages with particularity. The plaintiff appeals from so much of the Supreme Court’s order as granted those branches of the Skinner defendants’ motion which were for summary judgment dismissing the third and fourth causes of action insofar as asserted against them.
The Supreme Court also denied those branches of the Skinner defendants’ cross motion which were for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against them. The Supreme Court found that copies of the summons and complaint had been timely served upon Wayne Skinner, as he was served with copies of the initial summons and complaint within 120 days of its timely filing. With regard to Karen Skinner, the court noted that it was undisputed that the first and second causes of action had not been timely interposed against her, but agreed with the plaintiff that Karen Skinner might be held vicariously liable for the publication of the subject statements by Hawkins and, therefore, had a unity of interest with him that was sufficient to avoid dismissal of the causes of action against her. The Skinner defendants cross-appeal from so much of the Supreme Court’s order as denied those branches of their motion which were for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against them.
Hawkins filed no brief with respect to the appeal or cross appeal.
The Statute of Limitations
The Skinner defendants contend that the Supreme Court erred in denying those branches of their motion which were for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against them.
*208At the outset, the Supreme Court properly concluded that the first and second causes of action were timely interposed against Wayne Skinner. The original complaint named, as defendants, “Michael Hawkins, also known as ‘wayguy’ (‘Way-guy’), along with John Doe ‘johnny500’ (‘Johnny500’) and John Doe ‘wawayandafirst’ (‘Wawayandafirst’).” The amended complaint, which named Wayne Skinner and Karen Skinner as defendants, noted that Hawkins was “also known as ‘Wayguy’ and ‘JohnnySOO.’ ” Accordingly, the remaining John Doe named by the original complaint—“John Doe ‘wawayandafirst’ (‘Wawayandafirst’)”—referred to Wayne Skinner, who was alleged in the complaint to be the individual responsible for issuing the Wawayandafirst blog posts. Under these circumstances, the original complaint was sufficient to have apprised Wayne Skinner that he was one of the intended defendants (see Bum-pus v New York City Tr. Auth., 66 AD3d 26, 30 [2009]; Rogers v Dunkirk Aviation Sales & Serv., Inc., 31 AD3d 1119, 1120 [2006]). Thus, the original complaint must be deemed to have identified Wayne Skinner as one of the defendants (see CPLR 1024; Rogers v Dunkirk Aviation Sales & Serv., Inc., 31 AD3d at 1120), and the action was timely commenced against him upon the filing of the summons and complaint (see CPLR 304 [a]). Moreover, copies of the summons and complaint were timely served upon Wayne Skinner within 120 days after the filing (see CPLR 306-b) and, thus, the Supreme Court properly denied that branch of the Skinner defendants’ motion which was for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against Wayne Skinner.
The Skinner defendants also moved for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against Karen Skinner. Clearly, at the time that Karen Skinner was served with copies of the supplemental summons and amended complaint on October 28, 2008, the defamation claims set forth in the first and second causes of action, which were premised on statements posted on August 29, 2007, and October 6, 2007, were in fact time-barred (see CPLR 215 [3]). Karen Skinner thus met her burden of establishing, prima facie, that the statute of limitations had expired prior to the commencement of the action against her, at which point the burden shifted to the plaintiff to establish the applicability of the relation-back doctrine (see Xavier v RY Mgt. Co., Inc., 45 AD3d 677, 678 [2007]).
*209In holding that the first and second causes of action were timely interposed against Karen Skinner, the Supreme Court, in effect, concluded that the relation-back doctrine was applicable (see CPLR 203 [b]). Under the relation-back doctrine, a plaintiff may interpose a cause of action against a person or entity after the statute of limitations has expired, provided that the plaintiff had timely commenced the action against another defendant, served process upon that other defendant within the applicable statutory period, and established that the defendant previously named and served was “united in interest” with the person or entity sought to be added as a defendant (CPLR 203 [b]). This Court has held that, in order to determine whether two defendants are united in interest—such that a plaintiff may invoke the relation-back doctrine to add a new defendant—it must be shown that
“(1) both claims arose out of the same conduct, transaction or occurrence, (2) the new party is ‘united in interest’ with the original defendant, and by reason of that relationship he can be charged with such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits and (3) the new party knew or should have known that, but for an excusable mistake by plaintiff as to the identity of the proper parties, the action would have been brought against him as well” (Brock v Bua, 83 AD2d 61, 69 [1981] [citations omitted]).
Subsequent to the issuance of this Court’s decision in Brock, the Court of Appeals held that a plaintiffs mistake need not be “excusable” for the relation-back doctrine to apply (see Buran v Coupal, 87 NY2d 173, 178-182 [1995]). In addition, whether parties are united in interest generally is a question of law, not a question of fact (see Connell v Hayden, 83 AD2d 30, 43 [1981]). However, if the nature of the jural relationship between the defendants is disputed, then a question of fact is presented (see id. at 44).
In the instant matter, the key to the application of the relation-back doctrine is the determination of whether Karen Skinner is united in interest with an original defendant, so that, by reason of that relationship, she can be “charged with such notice of the institution of the action that [she] will not be prejudiced in maintaining [her] defense on the merits” (Brock v Bua, 83 AD2d at 69). Here, the plaintiff contends that Karen *210Skinner and. her nephew Michael Hawkins shared the jural relationship of principal and agent.
Defendants are united in interest with one another only when their relationship with each other is such that their interest “in the subject-matter [of the action] is such that [the defendants] stand or fall together and that judgment against one will similarly affect the other” (Prudential Ins. Co. v Stone, 270 NY 154, 159 [1936]). “[T]he question of unity of interest is to be determined from an examination of (1) the jural relationship of the parties whose interests are said to be united and (2) the nature of the claim asserted against them by the plaintiff’ (Connell v Hayden, 83 AD2d at 42-43). However, defendants are not united in interest if there is the mere possibility that the new party could have a different defense than the original party (id. at 42, citing Stevens v Young, 272 App Div 784, 785 [1947]). Accordingly, joint tortfeasors are generally not united in interest, since they frequently have different defenses, in that one tortfeasor usually will seek to show that he or she is not at fault, but that it was the other tortfeasor who is liable (see Connell v Hayden, 83 AD2d at 45, citing Maguire v Yellow Taxicab Corp., 253 App Div 249, 251 [1938], affd 278 NY 576 [1938]). However, joint tortfeasors will be deemed to be united in interest where one is vicariously liable for the other (see Connell v Hayden, 83 AD2d at 45), such as where one tortfeasor is the agent of the other.
Accordingly, the parties are united in interest where there is a jural or legal relationship giving rise to potential vicarious liability. “Underlying the doctrine of vicarious liability ... is the notion of control. The person in a position to exercise some general authority or control over the wrongdoer must do so or bear the consequences” (Kavanaugh v Nussbaum, 71 NY2d 535, 546 [1988]). Agency is a jural relationship between a principal and an agent, “which results from the manifestation of consent of one person to allow another to act on his or her behalf and subject to his or her control, and consent by the other so to act” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [1993]). While here, the Skinner defendants and Hawkins are related, as Hawkins is the Skinner defendants’ nephew, it is not any such intrafamilial relationship that gives rise to a purported agency relationship (see Struebel v Fladd, 75 AD3d 1164, 1166 [2010]; Maurillo v Park Slope U-Haul, 194 AD2d at 146). However, the fact that Hawkins is related to the Skinner defendants does not ipso facto defeat the possibility of an agency relationship, as *211“members of a family may enter into a gratuitous agency relationship where there is no evidence of any payment incident to the agency relationship” (Maurillo v Park Slope U-Haul, 194 AD2d at 147).
Here, the plaintiff adduced sufficient facts which clearly raise a triable issue as to whether Hawkins was acting as an agent on behalf of the Skinner defendants. In his sworn testimony and averments, Hawkins explained that he “would post comments verbatim from Wayne or Karen Skinner” and that they asked him to post messages under the various pseudonyms set forth above. While Hawkins did “not recall posting the alleged defamatory statements,” he did not specifically deny posting them. Such an equivocal averment does not resolve the factual discrepancy as to whether Hawkins posted the alleged defamatory statements, and did so at the Skinner defendants’ request.
In a case such as this, where the jural relationship alleged is that of principal and agent, “unity of interest does not turn upon whether the actual wrongdoer or the person or entity sought to be charged vicariously was served first” (Matter of Parker v Port Auth. of N.Y. & N.J., 113 AD2d 763, 769 [1985] [internal quotation marks omitted]; see Connell v Hayden, 83 AD2d 30 [1981]). At trial, the plaintiff may be required to establish his right to recovery against Karen Skinner, or perhaps both of the Skinner defendants, upon a theory of vicarious liability and, thus, will be obligated to prove that the wrongdoing which forms the basis of the action was committed within the scope of the Skinner defendants’ “business.” The defendants will likely continue to point fingers at each other, and the Skinner defendants will likely continue to deny that they are vicariously liable for any action taken by Hawkins. However, a defense that Hawkins’s alleged conduct in posting the subject statements exceeded the scope of his alleged agency relationship with the Skinner defendants does not go to the merits of the plaintiff s defamation claims. Instead, it is a defense which “puts the jural relationship itself at issue,” and “the law defers its determination to the trial at which time the defendant asserting it will be discharged by the substantive defense rather than by the Statute of Limitations” (Matter of Parker v Port Auth. of N.Y.& N.J., 113 AD2d at 769 [citation and internal quotation marks omitted]).
On this summary judgment motion, we view the evidence in the light most favorable to the plaintiff, as the nonmoving party, *212and afford him the benefit of every favorable inference (see Ruiz v Griffin, 71 AD3d 1112, 1115 [2010]; Franklin v 2 Guys From Long Pond, Inc., 50 AD3d 846 [2008]). Moreover, a “motion for summary judgment ‘should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility’ ” (Ruiz v Griffin, 71 AD3d at 1115, quoting Scott v Long Is. Power Auth., 294 AD2d 348, 348 [2002]). “Resolving questions of credibility, determining the accuracy of witnesses, and reconciling the testimony of witnesses are for the trier of fact” (Gille v Long Beach City School Dist., 84 AD3d 1022, 1023 [2011]; see Republic Long Is., Inc. v Andrew J. Vanacore, Inc., 29 AD3d 665 [2006]; Harty v Kornish Distribs., 119 AD2d 729 [1986]).
Applying these principles here, we conclude that a triable issue of fact exists as to whether the first and second causes of action in the amended complaint “related back” to the date of the timely filing of the original complaint against Hawkins (see CPLR 203 [c]; 215 [3]; see also Mondello v New York Blood Ctr.—Greater N.Y. Blood Program, 80 NY2d 219 [1992]; Lancaster v Town of E. Hampton, 54 AD3d 906 [2008]; Brock v Bua, 83 AD2d 61 [1981]; Assad v City of New York, 238 AD2d 456, 457 [1997]; Sargent v City of New York, 128 AD2d 693 [1987]).
Accordingly, the Supreme Court properly denied those branches of the Skinner defendants’ motion which were for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against them.
Defamation Per Se
In each of the four causes of action, the plaintiff contended that the “[defendants libeled Plaintiff and committed an act of defamation per se.” The Supreme Court concluded that the defendants’ alleged conduct, as described in the third and fourth causes of action, did not constitute defamation per se and, thus, that the plaintiff’s failure to plead special damages with particularity required dismissal of those causes of action. The Supreme Court further concluded that certain epithets used to describe the plaintiff, as set forth in the fourth cause of action, were mere opinion and, hence, not actionable. The plaintiff appeals from that portion of the Supreme Court’s order which granted those branches of the Skinner defendants’ motion which were for summary judgment dismissing the third and fourth causes of action insofar as asserted against them, based on the plaintiffs failure to plead special damages with particularity or *213properly allege that certain statements were fact rather than opinion.
Contrary to the plaintiffs contention, the Supreme Court properly granted that branch of the Skinner defendants’ motion which was for summary judgment dismissing the fourth cause of action insofar as asserted against them. In the fourth cause of action, the plaintiff alleged that the defendants posted two separate comments on the newspaper site on the same date. The first comment was that “Dave LeBlanc is a terrorist.” The second comment asked, rhetorically, “Who was the one who threw the horse head in Gail’s pool? . . . check it out: . . . wawayandafirstblogspot.com. ’ ’
Internet forums are venues where citizens may participate and be heard in free debate involving civic concerns. It may be said that such forums are the newest form of the town meeting. We recognize that, although they are engaging in debate, persons posting to these sites assume aliases that conceal their identities or “blog profiles.” Nonetheless, falsity remains a necessary element in a defamation claim and, accordingly, “only statements alleging facts can properly be the subject of a defamation action” (600 W. 115th St. Corp. v Von Gutfeld, 80 NY2d 130, 139 [1992], cert denied 508 US 910; see Gross v New York Times Co., 82 NY2d 146, 153 [1993]). Within this ambit, the Supreme Court correctly determined that the accusation on the newspaper site that the plaintiff was a “terrorist” was not actionable. Such a statement was likely to be perceived as “rhetorical hyperbole, a vigorous epithet” (Greenbelt Cooperative Publishing Assn., Inc. v Bresler, 398 US 6, 14 [1970]; see Milkovich v Lorain Journal Co., 497 US 1 [1990]; Immuno AG. v Moor-Jankowski, 77 NY2d 235, 254 [1991], cert denied 500 US 954 [1991]). This conclusion is especially apt in the digital age, where it has been commented that readers give less credence to allegedly defamatory Internet communications than they would to statements made in other milieus (see Sandals Resorts Intl. Ltd. v Google, Inc., 86 AD3d 32, 43-44 [2011], quoting Jennifer O’Brien, Note, Putting a Face to a [Screen] Name: The First Amendment Implications of Compelling ISPS to Reveal the Identities of Anonymous Internet Speakers in Online Defamation Cases, 70 Fordham L Rev 2745, 2774-2775 [2002]). Accordingly, we conclude that this statement constituted an expression of opinion, and, as such, is nonactionable.
Turning to the other posting described in the fourth cause of action, it is not clear on the face of the posting whom the poster *214was accusing of dumping a horse head in Gail Soro’s pool, as the posting is essentially just a cross-reference to the Wawayandafirst blogspot. Since the statements contained on the Wawayandafirst blogspot form the basis of the first and second causes of action, the mere reference to those statements is duplicative of those causes of action (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 320 [1995]). Therefore, the Supreme Court correctly granted that branch of the Skinner defendants’ motion which was for summary judgment dismissing the fourth cause of action insofar as asserted against them.
However, the Supreme Court erred in granting that branch of the Skinner defendants’ motion which was for summary judgment dismissing the third cause of action insofar as asserted against them. While a plaintiff alleging defamation generally must plead and prove that he or she has sustained special damages (see Rufeh v Schwartz, 50 AD3d 1002, 1003 [2008]; Liberman v Gelstein, 80 NY2d 429, 434-435 [1992]), any written article is “actionable without alleging special damages if it tends to expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society” (Sydney v MacFadden Newspaper Publ. Corp., 242 NY 208, 211-212 [1926]; see Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369, 379 [1977], cert denied 434 US 969 [1977]; Donati v Queens Ledger Newspaper Group, 240 AD2d 696 [1997]). Our society has long recognized that when statements fall within one of these established categories of per se defamation, “the law presumes that damages will result, and they need not be alleged or proven” (Liberman v Gelstein, 80 NY2d 429, 435 [1992]). Indeed, important social values underlie the law of defamation, as “[s]ociety has a pervasive and strong interest in preventing and redressing attacks upon reputation” (Rosenblatt v Baer, 383 US 75, 86 [1966]). The published allegation that the plaintiff put a severed horse head in a Town Board member’s swimming pool constituted defamation per se under this standard and, therefore, did not require the plaintiff to plead special damages (see Donati v Queens Ledger Newspaper Group, 240 AD2d 696 [1997]). Moreover, the accusation that the plaintiff placed a horse head in a political rival’s pool, if true, describes conduct that would constitute serious crimes. A false published allegation that a person committed a serious crime is also a ground for asserting a cause of action to recover damages for defamation per se (see Geraci v Probst, 15 NY3d 336, 344 *215[2010]; Knutt v Metro Intl., S.A., 91 AD3d 915, 916 [2012]), thus relieving the plaintiff from pleading special damages.
Accordingly, the order is modified, on the law, by deleting the provision thereof granting that branch of the motion of the defendants Wayne Skinner and Karen Skinner which was for summary judgment dismissing the third cause of action insofar as asserted against them, and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from.
Dillon, J.P., Angiolillo and Florio, JJ., concur.
Ordered that the order is modified, on the law, by deleting the provision thereof granting that branch of the motion of the defendants Wayne Skinner and Karen Skinner which was for summary judgment dismissing the third cause of action insofar as asserted against them, and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.
While the discovery of any deliberately placed mutilated animal carcass in a family swimming pool would be shocking and noteworthy, the choice of a severed horse head immediately evokes to many the infamous scene from Mario Puzo’s novel, “The Godfather,” as immortalized in the film directed by Francis Ford Coppola. The scene, probably one of the most iconic in cinematic history, has come to exemplify an act of intimidation through violence, a reminder of power, and a warning that a request or “offer” from a Godfather or leader of an organized crime family should not be “refused.” | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/1888140/ | 46 B.R. 222 (1985)
In the Matter of MINTON GROUP, INC., Debtor.
Sidney TURNER, as Trustee of Minton Group, Inc., Appellant,
v.
David M. LEE and Paul Barrett, Appellees.
83 Civ. 1789-CSH.
United States District Court, S.D. New York.
January 29, 1985.
*223 Sidney Turner, White Plains, N.Y., for appellant.
Reich & Reich, White Plains, N.Y., for appellees.
MEMORANDUM OPINION AND ORDER
HAIGHT, District Judge.
This is an appeal from a February 14, 1983 order of Bankruptcy Judge Howard Schwartzberg, entered pursuant to a February 7, 1983 decision, which dismissed an adversary action brought by the trustee in bankruptcy of Minton Group, Inc. against David M. Lee and Paul Barrett. 27 B.R. 385. The action sought to avoid the perfection by Lee and Barrett of a mortgage on real property owned by a limited partnership called Rochelle Terrace Associates.
The facts are related in detail in Judge Schwartzberg's February 7 decision. Briefly, Minton Group, debtor in the bankruptcy proceedings, was the general partner in Rochelle Terrace Associates, owning a 25% equity interest. In late 1981, prior to Minton Group's bankruptcy, Rochelle Terrace acquired real property. As part of the purchase price Rochelle Terrace gave a mortgage to Lee and Barrett, who were principals of the corporate seller of the property. For reasons unexplained, neither Rochelle Terrace's deed to the property nor its mortgage to Lee and Barrett was recorded until late 1982, approximately one month after the initiation of these bankruptcy proceedings. Minton Group's trustee brought this adversary action to avoid perfection of the tardily recorded mortgage.
The trustee argued to the bankruptcy judge and argues here that it could avoid the recording of the mortgage under 11 U.S.C. §§ 544 and 549. Section 544 implements the so-called "strong arm powers" of the trustee by empowering the trustee to avoid various pre-filing transfers of debtor property and obligations incurred by the debtor. Section 549 permits avoidance of post-petition transfers of property of the debtor's estate. The trustee also argued and argues that 11 U.S.C. § 362, the "automatic stay" provision of the Bankruptcy Code, prohibited the perfection of the mortgage by staying the perfection of liens such as the mortgage against property of the debtor's estate.
All of these Code provisions authorize the trustee to act in connection with transfers or liens affecting property of the debtor or the debtor's estate.[1] Rochelle Terrace was the owner and mortgagor of the property in question. Minton Group, the debtor, was not. It was merely one partner, albeit the general partner, in Rochelle Terrace. Judge Schwartzberg ruled that for this reason, among others, Minton Group's trustee could not exercise § 544 strong-arm powers on behalf of the property. He also held that § 549 was inapplicable because, regardless of Minton Group's interest in the property, the transfer occurred long before the filing of the petition of bankruptcy, taking it outside the reach of a statute governing post-petition transfers. Judge Schwartzberg did not render a clear ruling on the applicability of § 362, *224 perhaps because the brief submitted to him by the trustee argued this point in very obscure terms. Indeed, I recognize the argument in that brief only because I have the benefit of the trustee's current, slightly more pointed papers. Nevertheless, the issue was raised clearly enough to preserve it for appeal.
Regarding the bankruptcy judge's ruling on the applicability of § 549, the trustee's argument on appeal consists of the unsupported, one-line contention that "[p]erfecting of a lien by recording of a mortgage is a transfer of estate property." Appellee's Brief, at 14. I do not consider mere contradiction of the judge's reasoned conclusion of law to be sufficient to set the matter at issue for purposes of appeal. I affirm this ruling as essentially unchallenged.
The initial questionwhich I find dispositive is whether a debtor's interest in real property owned by a limited partnership of which the debtor is the general partner is sufficient to qualify the property as "property of the debtor" for purposes of § 544 or "property of the estate" for purposes of § 362(a)(4). Analysis of this question reveals two separate issues: 1) the nature of the property interest of a general partner in the property of the partnership, and 2) whether this type of interest qualifies the property as "property of the debtor."
The trustee notes that the general partner's bankruptcy caused the dissolution of the partnership and argues that upon dissolution ownership of the partnership's property vested pro rata in the hands of the partners. Appellees do not disagree as to the fact of dissolution but do dispute its consequences. They argue that before and after dissolution the property was owned solely by the partnership. The partners, it is argued, had no interest in the property but only an interest in the partnership. Both views are incorrect.
New York partnership law dictates that upon the bankruptcy of any partner, a partnership dissolves. N.Y. Partnership L. § 62(5).[2] However, dissolution does not terminate the partnership; dissolution must be distinguished from "winding up," which, by settling the equities among partners, does extinguish the entity. N.Y. Partnership L. §§ 60, 61; Kraus v. Kraus, 250 N.Y. 63, 67, 164 N.E. 743 (1928). Therefore, dissolution does not immediately change the nature of the property interest of the partners in partnership property.
The interest of partners in "specific property" of the partnership, a category which includes the type of real property at issue here, is a statutorily-defined interest referred to as a tenancy in partnership. N.Y. Partnership L. § 51(1). Contrary to appellees' assertion, this is not equivalent to a tenancy in common, although the tenancy in partnership is converted to a tenancy in common once the partnership winds up. Kraus v. Kraus, supra, 250 N.Y. at 67, 164 N.E. 743; Ganiaris v. Gonzalez, 26 A.D.2d 534, 271 N.Y.S.2d 383 (1966). In contrast to the full possessory rights of a tenant in common, the rights of a tenant in partnership are quite limited. Without the consent of all partners, a partner has no right to possess partnership property for any purpose other than those of the partnership. N.Y. Partnership L. § 51(2)(a). Perhaps more important in this context, a partner's interest in partnership property is not subject to attachment or execution except to satisfy a claim against the partnership. Creditors of the partner cannot reach it. N.Y. Partnership L. § 51(2)(c); Smith v. Smith, 65 A.D.2d 757, 409 N.Y.S.2d 764, 765 (1978). Further, the interest may not be assigned by the partner individually. N.Y. Partnership L. § 51(2)(b). In other words, the interest grants no individually exercisable rights to the partner. Thus it is said that "a partner has no personal right in any specific partnership property ... and any real estate which the *225 partnership owns is considered personalty." La Russo v. Paladino, 109 N.Y.S.2d 627, 630 (Sup.Ct.1951), aff'd., 280 A.D. 988, 116 N.Y.S.2d 617 (1952).[3]
Thus it cannot be said that Minton Group had no property interest in the real estate of Rochelle Terrace. The issue on appeal, however, is whether this limited property interest is sufficient to qualify the property as "property of the debtor" or its "estate" for purposes of §§ 544 and 362. Under § 70(a)(5) of the former Bankruptcy Act, whether an interest in land was within the debtor's estate was determined by whether it was alienable and subject to levy by the debtor's creditors. See, Segal v. Rochelle, 382 U.S. 375, 379, 86 S. Ct. 511, 514, 15 L. Ed. 2d 428 (1966). Under this definition the interest at issue here would plainly not be property of the estate, for as noted above it was neither assignable nor subject to execution. The new Code, however, has thrown out these restrictions. See, In re Goff, 706 F.2d 574, 578 (5th Cir.1983); In re Ryerson, 739 F.2d 1423, 1425 (9th Cir. 1984). The debtor's estate now includes "all legal and equitable interests of the debtor in property." 11 U.S.C. § 541(a)(1). The interest in property at issue here would thus seem to be clearly within the estate of the debtor, for, however circumscribed, it is a legal interest in property.
This does not yet answer the question posed above. The determination that this particular interest in property is within the debtor's estate does not necessarily bring the real property itself within the estate. There is a distinction between owning an interest in land and owning the land itself. Useful in this regard is the distinction drawn in the Restatement of Property between an "interest" and "complete property." An "interest" is defined as a right, privilege, or power, or a group of such rights, privileges or powers, regarding land. Restatement of Property § 5 (1936). Plainly there are a large number of interests which may simultaneously be possessed with regard to any piece of land. "Complete property" is the totality of interests which it is legally possible to have in a given piece of land. Restatement, § 5e. "Ownership" of a thing is possession of complete property in it. Restatement, § 10b. With these concepts in mind, it can be seen that while Minton Group "owned" a particular, circumscribed interest in Rochelle Terrace's property, it did not own the property. Only the partnership as a whole exercised complete control over the property; only it "owned" the property. Because Minton Group exercised too few rights in regard to the land to qualify it as Minton Group's property, the trustee has no power to reach transactions involving the land, nor does the automatic stay reach it. In order to bring the land itself within the reach of either § 362 or § 544, the debtor must be able to exercise a greater degree of control over the land than is given by the limited power granted by a tenancy in partnershipsufficient control so that the land itself is "of" the debtor or its estate.[4]
In support of his contrary position, the trustee cites In re Imperial "400" National, Inc., 429 F.2d 671 (3d Cir.1970) and In re Elemar Associates, 3 B.D.C. 958 (Bankr.S.D.N.Y.1977). In "400", the Third Circuit considered whether a debtor partner's interest in the partnership (as opposed to the partnership's property) was "property" under § 70(a)(5), holding that it was. There are significant differences between that case and this. First, as indicated, the court was concerned with the whole of the partner's interest in the partnership, not just its interest in the partnership's *226 property. The debtor, of course, exercised complete control over its share in the partnership. Its interest was not limited. This is underscored by the fact that under the partnership agreement the partners held their interests in the partnership as tenants in common. 429 F.2d at 674. Thus, the debtor had "an unrestricted right to transfer its interest." 429 F.2d at 678. In contrast, a tenancy in partnership is not freely alienable. Unlike a tenant in common, a tenant in partnership may not call for partition and sale. Altman v. Altman, 271 A.D. 884, 67 N.Y.S.2d 119, 121 (1946), aff'd., 297 N.Y. 973, 80 N.E.2d 359 (1948). Because the property interest involved in "400" is significantly different from the one at issue here, "400" is not controlling.
In Elemar Associates, Judge Babitt considered whether the assets of a partner in a debtor partnership were so closely allied with the assets of the partnership as to prevent a joint creditor of the partner and the partnership from proceeding against assets of the partner to satisfy the joint debt. This case, too, is readily distinguishable. In Elemar, it was the partnership, not the partner, which was bankrupt. Because of the unlimited liability of the partner, his assets were potentially available to satisfy the partnership's debt. To permit a joint creditor of the partner and partnership to move against the partner's assets would in effect have permitted the creditor to circumvent the distribution of the debtor's assets undertaken in Bankruptcy Court, for that creditor would have unrestricted access to assets which were potentially available for distribution to all of the partnership's creditors. Here no such problem arises. Appellees are not creditors of the debtor but of Rochelle Terrace. Creditors of the debtor have no claim on the assets of Rochelle Terrace beyond their claim on Minton Group's partnership interest which is by definition calculated only after Rochelle Terrace has satisfied its debt to appellees. N.Y. Partnership L. § 52. Because appellees' claims to assets of Rochelle Terrace are necessarily "superior" to any claims of Minton Group's creditors, to permit them to record their mortgage against Rochelle Terrace's asset will give them no unfair advantage over creditors of the bankrupt. The concerns of Elemar do not arise.
The limited case law available supports Judge Schwartzberg's decision. Almost on point is In re Panitz & Co., 270 F. Supp. 448 (D.Md.), aff'd. sub nom. Hammerman v. Arlington Federal Savings & Loan Assoc., 385 F.2d 835 (4th Cir.1967). The district court there declared that the interest of a limited partner in property owned by the limited partnership is not "property" for purposes of § 70a(5) of the old Bankruptcy Act. In so holding the court noted that under Maryland law the limited partner could not transfer the underlying property. Nor was the property subject to seizure by the partner's creditors. 270 F. Supp. at 453. Because it applied the old Act, Panitz cannot be followed blindly. More recently, in In re Venture Properties, Inc., 37 B.R. 175 (Bankr.D.N.H.1984), it was held that a debtor general partner's interest in real property owned by the partnership was not "property of the estate" for purposes of § 541. The court noted that the debtor's general partner status gave it "reason to be concerned" about the property's disposition, "but this `interest' does not amount to a `legal or equitable interest in property' within the meaning of § 541...." 37 B.R. at 176. My reasoning leads me to a conclusion similar to those reached in Panitz and Venture Properties. The interest under New York law of a general partner in property of the partnership is not sufficient to cause the property to be classified as property of the debtor or its estate for purposes of 11 U.S.C. §§ 544 and 362. Thus the trustee had no power to avoid perfection of liens affecting the property under § 544, nor would the automatic stay of § 362 have affected the perfection.
Judge Schwartzberg's order is affirmed. The appeal is dismissed.
It is SO ORDERED.
NOTES
[1] The provision of § 544 on which the trustee relies permits him to avoid "any transfer of property of the debtor or any obligation incurred by the debtor...." 11 U.S.C. § 544(a). Because the debt here challenged was incurred by the transfer of property, the trustee's power to reach the debt extends no further than his power to reach the transfer of property. Both § 362(a)(4), which stays perfection of liens, and § 549 expressly apply only to, respectively, liens against and transfers of "property of the [debtor's] estate."
[2] As Judge Schwartzberg noted, New York partnership law applies to both limited and general partnerships. The two "... are identical forms of doing business except for distinctions between the rights and liabilities of limited and general partners." Executive House Realty v. Hagen, 108 Misc. 2d 986, 438 N.Y.S.2d 174, 179 (Sup.Ct.1981).
[3] It is conceivable that Minton Group's interest in the property could have been extended beyond these boundaries by the partnership agreement. Appellant, however, does not argue this to be the case, and I assume from his silence that the agreement did not alter the statutorily granted powers.
[4] As the Restatement itself noted, the bundle of rights possession of which will qualify an individual as an "owner" of land varies; it "is not a matter upon which any precise rule can be laid down." Restatement, § 10c. I do not intend by this holding to imply that § 362 and § 544 require possession of any specific rights. I simply hold that the rights possessed by Minton Group are not sufficient. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/5902534/ | In a proceeding pursuant to SCPA article 18 to recover moneys due on a promissory note, the claimant Owen J. Amerling appeals from so much of a decree of the Surrogate’s Court, Nassau County (Radigan, S.), dated August 12, 1986, as, after a hearing, disallowed his claim.
Ordered that the decree is affirmed insofar as appealed from, with costs payable by the appellant personally.
We find that the court properly held the subject claim to be barred by the six-year Statute of Limitations (see, CPLR 213 [2]). The cause of action accrued on August 9, 1978, the day after which the note became due (see, UCC 3-122 [1] [a]). Since the claimant failed to commence the instant proceeding on or before August 9, 1984, his claim was properly dismissed as untimely.
We have examined the claimant’s remaining contentions and find them to be without merit. Brown, J. P., Rubin, Fiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902536/ | OPINION OF THE COURT
Cohen, J.
In this action to recover damages for defamation, we are asked to determine whether the applicable statute of limitations bars the consideration of certain allegedly defamatory statements posted on a publicly accessible Internet weblog—or “blog”— dedicated to the local community issues of Wawayanda, New York, located in Orange County, and on the local newspaper’s website. We are also asked to determine, inter alia, whether the plaintiff was required to plead special damages regarding published accusations on these websites that he was responsible for dumping a severed horse head into the swimming pool at a residence belonging to a member of the Town Board of the Town of Wawayanda (hereinafter the Town Board).
For the reasons stated below, we disagree with the Supreme Court’s determination that, absent a particularized allegation of special damages, the third cause of action was not actionable, but otherwise agree with its conclusions with respect to the first, second, and fourth causes of action. Accordingly, we modify the order appealed from.
Factual and Procedural Background
The defendant Wayne Skinner, a former Town Supervisor of the Town of Wawayanda, and his wife, the defendant Karen Skinner (hereinafter together the Skinner defendants), were involved in a number of Town policy disagreements with the plaintiff, David LeBlanc. Wayne Skinner was elected to his position as a Democrat. The plaintiff, a Wawayanda businessman, attended numerous Town Board meetings, voicing his concerns *205over a variety of issues, including property taxes, and donated money to one of Wayne Skinner’s Republican political rivals.
Nonparty Gail Soro was one of Wayne Skinner’s colleagues, and a Wawayanda Town Board member. Soro likewise was an elected Democrat. In July 2006, Soro discovered a severed horse head in her swimming pool. It was never determined who was responsible for the incident. Nonetheless, as could be expected after any incident with such cinematic bravado,* public comment ensued. Of relevance here were a number of blog entries posted on a website allegedly dedicated to community issues and local government, and a number of comments on the local newspaper’s website. These blog entries and comments accused the plaintiff of being responsible for the horse head incident.
The plaintiff filed a summons and complaint on July 28, 2008, commencing this action against Michael Hawkins, also known as “wayguy,” as well as against “John Doe (‘johnnySOO’),” and “John Doe (‘wawayandafirst’),” referencing the relevant blog profiles or monikers used by the individuals who posted the allegedly defamatory comments. Neither of the Skinner defendants was specifically identified by name in the original complaint. However, on September 18, 2008, Wayne Skinner was served with copies of the original summons and complaint as “John Doe (‘johnny500’)” and “John Doe (‘wawayandafirst’).”
On October 20, 2008, the plaintiff filed an amended verified complaint. The amended verified complaint specifically identified Wayne Skinner as a defendant, and added Karen Skinner as a defendant. Copies of a supplemental summons and the amended verified complaint were served upon Karen Skinner on October 28, 2008.
In the amended complaint, the plaintiff alleged that, with the assistance of Hawkins, the Skinner defendants posted several defamatory statements on the Internet regarding the plaintiff. More specifically, the first and second causes of action in the amended verified complaint alleged that Hawkins, at the request and direction of the Skinner defendants, posted two allegedly *206defamatory statements regarding the plaintiff on August 29, 2007, and October 6, 2007, respectively, on the now-defunct website www.wawayandafirst.blogspot.com (hereinafter the Wawayandafirst blogspot). In the third cause of action, the plaintiff alleged that the defendants had posted the following comment on October 30, 2007, at www.forums.recordonline.com, a site run by the area newspaper (hereinafter the newspaper site): “We all know who was behind the Horse Head . . . there is only one man around town dumb enough, violent enough and with a vendetta to do that. . . Dave LeBlanc ... I hope all this negative publicity on him destroys his business.” The fourth cause of action alleged that the defendants posted the following comments on the newspaper site on October 30, 2007: “Dave LeBlanc is a terrorist” and “[w]ho was the one who threw the horse head in Gail’s pool? . . . check it out: . . . wawayandafirstblogspot.com.”
Hawkins served a verified answer, asserting, inter alia, a cross claim against the Skinner defendants, in which he alleged that he was the “agent and servant of the Skinner Defendants who performed actions” at their “request and direction.” The Skinner defendants together answered the complaint, asserting, inter alia, an affirmative defense based on the statute of limitations, and separately answered Hawkins’s cross claim, denying the allegations thereof. Discovery ensued, including party depositions. At his deposition, Hawkins testified that the Skinner defendants were his aunt and uncle, and that they directed the creation and maintenance of the relevant blog profiles on the Wawayandafirst blogspot and the newspaper site. Hawkins also testified that the Skinner defendants controlled the subject matter of the postings, and that the Skinner defendants “shared access” to these created profiles. During their own respective depositions, the Skinner defendants disputed the allegations made by Hawkins, and contended that he acted of his own accord.
The plaintiff moved for summary judgment, among other things, on the complaint and dismissing the Skinner defendants’ fourth affirmative defense, which asserted that the first and second causes of action were barred by the applicable one-year statute of limitations set forth in CPLR 215 (3). Hawkins opposed the motion. The Skinner defendants also opposed the motion, and cross-moved for summary judgment dismissing the complaint insofar as asserted against them, contending that all four causes of action insofar as asserted against them were *207time-barred. The Skinner defendants also contended that, since this is a defamation action, the plaintiff was required to allege special damages. They then submitted that the plaintiff had failed to allege special damages with particularity, and, thus, the defamation causes of action could not be sustained. The plaintiff opposed the cross motion, contending that the Skinner defendants were timely served with process. He further argued that the defamatory statements at issue were defamatory per se and, thus, the pleading of special damages was not required.
As relevant to the instant appeal, the Supreme Court, in an order dated January 28, 2011, determined that the third and fourth causes of action could not be sustained because the facts alleged therein did not constitute defamation per se, and the plaintiff failed to allege special damages with particularity. The plaintiff appeals from so much of the Supreme Court’s order as granted those branches of the Skinner defendants’ motion which were for summary judgment dismissing the third and fourth causes of action insofar as asserted against them.
The Supreme Court also denied those branches of the Skinner defendants’ cross motion which were for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against them. The Supreme Court found that copies of the summons and complaint had been timely served upon Wayne Skinner, as he was served with copies of the initial summons and complaint within 120 days of its timely filing. With regard to Karen Skinner, the court noted that it was undisputed that the first and second causes of action had not been timely interposed against her, but agreed with the plaintiff that Karen Skinner might be held vicariously liable for the publication of the subject statements by Hawkins and, therefore, had a unity of interest with him that was sufficient to avoid dismissal of the causes of action against her. The Skinner defendants cross-appeal from so much of the Supreme Court’s order as denied those branches of their motion which were for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against them.
Hawkins filed no brief with respect to the appeal or cross appeal.
The Statute of Limitations
The Skinner defendants contend that the Supreme Court erred in denying those branches of their motion which were for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against them.
*208At the outset, the Supreme Court properly concluded that the first and second causes of action were timely interposed against Wayne Skinner. The original complaint named, as defendants, “Michael Hawkins, also known as ‘wayguy’ (‘Way-guy’), along with John Doe ‘johnny500’ (‘Johnny500’) and John Doe ‘wawayandafirst’ (‘Wawayandafirst’).” The amended complaint, which named Wayne Skinner and Karen Skinner as defendants, noted that Hawkins was “also known as ‘Wayguy’ and ‘JohnnySOO.’ ” Accordingly, the remaining John Doe named by the original complaint—“John Doe ‘wawayandafirst’ (‘Wawayandafirst’)”—referred to Wayne Skinner, who was alleged in the complaint to be the individual responsible for issuing the Wawayandafirst blog posts. Under these circumstances, the original complaint was sufficient to have apprised Wayne Skinner that he was one of the intended defendants (see Bum-pus v New York City Tr. Auth., 66 AD3d 26, 30 [2009]; Rogers v Dunkirk Aviation Sales & Serv., Inc., 31 AD3d 1119, 1120 [2006]). Thus, the original complaint must be deemed to have identified Wayne Skinner as one of the defendants (see CPLR 1024; Rogers v Dunkirk Aviation Sales & Serv., Inc., 31 AD3d at 1120), and the action was timely commenced against him upon the filing of the summons and complaint (see CPLR 304 [a]). Moreover, copies of the summons and complaint were timely served upon Wayne Skinner within 120 days after the filing (see CPLR 306-b) and, thus, the Supreme Court properly denied that branch of the Skinner defendants’ motion which was for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against Wayne Skinner.
The Skinner defendants also moved for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against Karen Skinner. Clearly, at the time that Karen Skinner was served with copies of the supplemental summons and amended complaint on October 28, 2008, the defamation claims set forth in the first and second causes of action, which were premised on statements posted on August 29, 2007, and October 6, 2007, were in fact time-barred (see CPLR 215 [3]). Karen Skinner thus met her burden of establishing, prima facie, that the statute of limitations had expired prior to the commencement of the action against her, at which point the burden shifted to the plaintiff to establish the applicability of the relation-back doctrine (see Xavier v RY Mgt. Co., Inc., 45 AD3d 677, 678 [2007]).
*209In holding that the first and second causes of action were timely interposed against Karen Skinner, the Supreme Court, in effect, concluded that the relation-back doctrine was applicable (see CPLR 203 [b]). Under the relation-back doctrine, a plaintiff may interpose a cause of action against a person or entity after the statute of limitations has expired, provided that the plaintiff had timely commenced the action against another defendant, served process upon that other defendant within the applicable statutory period, and established that the defendant previously named and served was “united in interest” with the person or entity sought to be added as a defendant (CPLR 203 [b]). This Court has held that, in order to determine whether two defendants are united in interest—such that a plaintiff may invoke the relation-back doctrine to add a new defendant—it must be shown that
“(1) both claims arose out of the same conduct, transaction or occurrence, (2) the new party is ‘united in interest’ with the original defendant, and by reason of that relationship he can be charged with such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits and (3) the new party knew or should have known that, but for an excusable mistake by plaintiff as to the identity of the proper parties, the action would have been brought against him as well” (Brock v Bua, 83 AD2d 61, 69 [1981] [citations omitted]).
Subsequent to the issuance of this Court’s decision in Brock, the Court of Appeals held that a plaintiffs mistake need not be “excusable” for the relation-back doctrine to apply (see Buran v Coupal, 87 NY2d 173, 178-182 [1995]). In addition, whether parties are united in interest generally is a question of law, not a question of fact (see Connell v Hayden, 83 AD2d 30, 43 [1981]). However, if the nature of the jural relationship between the defendants is disputed, then a question of fact is presented (see id. at 44).
In the instant matter, the key to the application of the relation-back doctrine is the determination of whether Karen Skinner is united in interest with an original defendant, so that, by reason of that relationship, she can be “charged with such notice of the institution of the action that [she] will not be prejudiced in maintaining [her] defense on the merits” (Brock v Bua, 83 AD2d at 69). Here, the plaintiff contends that Karen *210Skinner and. her nephew Michael Hawkins shared the jural relationship of principal and agent.
Defendants are united in interest with one another only when their relationship with each other is such that their interest “in the subject-matter [of the action] is such that [the defendants] stand or fall together and that judgment against one will similarly affect the other” (Prudential Ins. Co. v Stone, 270 NY 154, 159 [1936]). “[T]he question of unity of interest is to be determined from an examination of (1) the jural relationship of the parties whose interests are said to be united and (2) the nature of the claim asserted against them by the plaintiff’ (Connell v Hayden, 83 AD2d at 42-43). However, defendants are not united in interest if there is the mere possibility that the new party could have a different defense than the original party (id. at 42, citing Stevens v Young, 272 App Div 784, 785 [1947]). Accordingly, joint tortfeasors are generally not united in interest, since they frequently have different defenses, in that one tortfeasor usually will seek to show that he or she is not at fault, but that it was the other tortfeasor who is liable (see Connell v Hayden, 83 AD2d at 45, citing Maguire v Yellow Taxicab Corp., 253 App Div 249, 251 [1938], affd 278 NY 576 [1938]). However, joint tortfeasors will be deemed to be united in interest where one is vicariously liable for the other (see Connell v Hayden, 83 AD2d at 45), such as where one tortfeasor is the agent of the other.
Accordingly, the parties are united in interest where there is a jural or legal relationship giving rise to potential vicarious liability. “Underlying the doctrine of vicarious liability ... is the notion of control. The person in a position to exercise some general authority or control over the wrongdoer must do so or bear the consequences” (Kavanaugh v Nussbaum, 71 NY2d 535, 546 [1988]). Agency is a jural relationship between a principal and an agent, “which results from the manifestation of consent of one person to allow another to act on his or her behalf and subject to his or her control, and consent by the other so to act” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [1993]). While here, the Skinner defendants and Hawkins are related, as Hawkins is the Skinner defendants’ nephew, it is not any such intrafamilial relationship that gives rise to a purported agency relationship (see Struebel v Fladd, 75 AD3d 1164, 1166 [2010]; Maurillo v Park Slope U-Haul, 194 AD2d at 146). However, the fact that Hawkins is related to the Skinner defendants does not ipso facto defeat the possibility of an agency relationship, as *211“members of a family may enter into a gratuitous agency relationship where there is no evidence of any payment incident to the agency relationship” (Maurillo v Park Slope U-Haul, 194 AD2d at 147).
Here, the plaintiff adduced sufficient facts which clearly raise a triable issue as to whether Hawkins was acting as an agent on behalf of the Skinner defendants. In his sworn testimony and averments, Hawkins explained that he “would post comments verbatim from Wayne or Karen Skinner” and that they asked him to post messages under the various pseudonyms set forth above. While Hawkins did “not recall posting the alleged defamatory statements,” he did not specifically deny posting them. Such an equivocal averment does not resolve the factual discrepancy as to whether Hawkins posted the alleged defamatory statements, and did so at the Skinner defendants’ request.
In a case such as this, where the jural relationship alleged is that of principal and agent, “unity of interest does not turn upon whether the actual wrongdoer or the person or entity sought to be charged vicariously was served first” (Matter of Parker v Port Auth. of N.Y. & N.J., 113 AD2d 763, 769 [1985] [internal quotation marks omitted]; see Connell v Hayden, 83 AD2d 30 [1981]). At trial, the plaintiff may be required to establish his right to recovery against Karen Skinner, or perhaps both of the Skinner defendants, upon a theory of vicarious liability and, thus, will be obligated to prove that the wrongdoing which forms the basis of the action was committed within the scope of the Skinner defendants’ “business.” The defendants will likely continue to point fingers at each other, and the Skinner defendants will likely continue to deny that they are vicariously liable for any action taken by Hawkins. However, a defense that Hawkins’s alleged conduct in posting the subject statements exceeded the scope of his alleged agency relationship with the Skinner defendants does not go to the merits of the plaintiff s defamation claims. Instead, it is a defense which “puts the jural relationship itself at issue,” and “the law defers its determination to the trial at which time the defendant asserting it will be discharged by the substantive defense rather than by the Statute of Limitations” (Matter of Parker v Port Auth. of N.Y.& N.J., 113 AD2d at 769 [citation and internal quotation marks omitted]).
On this summary judgment motion, we view the evidence in the light most favorable to the plaintiff, as the nonmoving party, *212and afford him the benefit of every favorable inference (see Ruiz v Griffin, 71 AD3d 1112, 1115 [2010]; Franklin v 2 Guys From Long Pond, Inc., 50 AD3d 846 [2008]). Moreover, a “motion for summary judgment ‘should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility’ ” (Ruiz v Griffin, 71 AD3d at 1115, quoting Scott v Long Is. Power Auth., 294 AD2d 348, 348 [2002]). “Resolving questions of credibility, determining the accuracy of witnesses, and reconciling the testimony of witnesses are for the trier of fact” (Gille v Long Beach City School Dist., 84 AD3d 1022, 1023 [2011]; see Republic Long Is., Inc. v Andrew J. Vanacore, Inc., 29 AD3d 665 [2006]; Harty v Kornish Distribs., 119 AD2d 729 [1986]).
Applying these principles here, we conclude that a triable issue of fact exists as to whether the first and second causes of action in the amended complaint “related back” to the date of the timely filing of the original complaint against Hawkins (see CPLR 203 [c]; 215 [3]; see also Mondello v New York Blood Ctr.—Greater N.Y. Blood Program, 80 NY2d 219 [1992]; Lancaster v Town of E. Hampton, 54 AD3d 906 [2008]; Brock v Bua, 83 AD2d 61 [1981]; Assad v City of New York, 238 AD2d 456, 457 [1997]; Sargent v City of New York, 128 AD2d 693 [1987]).
Accordingly, the Supreme Court properly denied those branches of the Skinner defendants’ motion which were for summary judgment dismissing, as time-barred, the first and second causes of action insofar as asserted against them.
Defamation Per Se
In each of the four causes of action, the plaintiff contended that the “[defendants libeled Plaintiff and committed an act of defamation per se.” The Supreme Court concluded that the defendants’ alleged conduct, as described in the third and fourth causes of action, did not constitute defamation per se and, thus, that the plaintiff’s failure to plead special damages with particularity required dismissal of those causes of action. The Supreme Court further concluded that certain epithets used to describe the plaintiff, as set forth in the fourth cause of action, were mere opinion and, hence, not actionable. The plaintiff appeals from that portion of the Supreme Court’s order which granted those branches of the Skinner defendants’ motion which were for summary judgment dismissing the third and fourth causes of action insofar as asserted against them, based on the plaintiffs failure to plead special damages with particularity or *213properly allege that certain statements were fact rather than opinion.
Contrary to the plaintiffs contention, the Supreme Court properly granted that branch of the Skinner defendants’ motion which was for summary judgment dismissing the fourth cause of action insofar as asserted against them. In the fourth cause of action, the plaintiff alleged that the defendants posted two separate comments on the newspaper site on the same date. The first comment was that “Dave LeBlanc is a terrorist.” The second comment asked, rhetorically, “Who was the one who threw the horse head in Gail’s pool? . . . check it out: . . . wawayandafirstblogspot.com. ’ ’
Internet forums are venues where citizens may participate and be heard in free debate involving civic concerns. It may be said that such forums are the newest form of the town meeting. We recognize that, although they are engaging in debate, persons posting to these sites assume aliases that conceal their identities or “blog profiles.” Nonetheless, falsity remains a necessary element in a defamation claim and, accordingly, “only statements alleging facts can properly be the subject of a defamation action” (600 W. 115th St. Corp. v Von Gutfeld, 80 NY2d 130, 139 [1992], cert denied 508 US 910; see Gross v New York Times Co., 82 NY2d 146, 153 [1993]). Within this ambit, the Supreme Court correctly determined that the accusation on the newspaper site that the plaintiff was a “terrorist” was not actionable. Such a statement was likely to be perceived as “rhetorical hyperbole, a vigorous epithet” (Greenbelt Cooperative Publishing Assn., Inc. v Bresler, 398 US 6, 14 [1970]; see Milkovich v Lorain Journal Co., 497 US 1 [1990]; Immuno AG. v Moor-Jankowski, 77 NY2d 235, 254 [1991], cert denied 500 US 954 [1991]). This conclusion is especially apt in the digital age, where it has been commented that readers give less credence to allegedly defamatory Internet communications than they would to statements made in other milieus (see Sandals Resorts Intl. Ltd. v Google, Inc., 86 AD3d 32, 43-44 [2011], quoting Jennifer O’Brien, Note, Putting a Face to a [Screen] Name: The First Amendment Implications of Compelling ISPS to Reveal the Identities of Anonymous Internet Speakers in Online Defamation Cases, 70 Fordham L Rev 2745, 2774-2775 [2002]). Accordingly, we conclude that this statement constituted an expression of opinion, and, as such, is nonactionable.
Turning to the other posting described in the fourth cause of action, it is not clear on the face of the posting whom the poster *214was accusing of dumping a horse head in Gail Soro’s pool, as the posting is essentially just a cross-reference to the Wawayandafirst blogspot. Since the statements contained on the Wawayandafirst blogspot form the basis of the first and second causes of action, the mere reference to those statements is duplicative of those causes of action (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 320 [1995]). Therefore, the Supreme Court correctly granted that branch of the Skinner defendants’ motion which was for summary judgment dismissing the fourth cause of action insofar as asserted against them.
However, the Supreme Court erred in granting that branch of the Skinner defendants’ motion which was for summary judgment dismissing the third cause of action insofar as asserted against them. While a plaintiff alleging defamation generally must plead and prove that he or she has sustained special damages (see Rufeh v Schwartz, 50 AD3d 1002, 1003 [2008]; Liberman v Gelstein, 80 NY2d 429, 434-435 [1992]), any written article is “actionable without alleging special damages if it tends to expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society” (Sydney v MacFadden Newspaper Publ. Corp., 242 NY 208, 211-212 [1926]; see Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369, 379 [1977], cert denied 434 US 969 [1977]; Donati v Queens Ledger Newspaper Group, 240 AD2d 696 [1997]). Our society has long recognized that when statements fall within one of these established categories of per se defamation, “the law presumes that damages will result, and they need not be alleged or proven” (Liberman v Gelstein, 80 NY2d 429, 435 [1992]). Indeed, important social values underlie the law of defamation, as “[s]ociety has a pervasive and strong interest in preventing and redressing attacks upon reputation” (Rosenblatt v Baer, 383 US 75, 86 [1966]). The published allegation that the plaintiff put a severed horse head in a Town Board member’s swimming pool constituted defamation per se under this standard and, therefore, did not require the plaintiff to plead special damages (see Donati v Queens Ledger Newspaper Group, 240 AD2d 696 [1997]). Moreover, the accusation that the plaintiff placed a horse head in a political rival’s pool, if true, describes conduct that would constitute serious crimes. A false published allegation that a person committed a serious crime is also a ground for asserting a cause of action to recover damages for defamation per se (see Geraci v Probst, 15 NY3d 336, 344 *215[2010]; Knutt v Metro Intl., S.A., 91 AD3d 915, 916 [2012]), thus relieving the plaintiff from pleading special damages.
Accordingly, the order is modified, on the law, by deleting the provision thereof granting that branch of the motion of the defendants Wayne Skinner and Karen Skinner which was for summary judgment dismissing the third cause of action insofar as asserted against them, and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from.
Dillon, J.P., Angiolillo and Florio, JJ., concur.
Ordered that the order is modified, on the law, by deleting the provision thereof granting that branch of the motion of the defendants Wayne Skinner and Karen Skinner which was for summary judgment dismissing the third cause of action insofar as asserted against them, and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements.
While the discovery of any deliberately placed mutilated animal carcass in a family swimming pool would be shocking and noteworthy, the choice of a severed horse head immediately evokes to many the infamous scene from Mario Puzo’s novel, “The Godfather,” as immortalized in the film directed by Francis Ford Coppola. The scene, probably one of the most iconic in cinematic history, has come to exemplify an act of intimidation through violence, a reminder of power, and a warning that a request or “offer” from a Godfather or leader of an organized crime family should not be “refused.” | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5903227/ | Appeal by the defendant, as limited by his brief, from a sentence of the County Court, Suffolk County (Namm, J.), rendered February 2, 1987.
Ordered that the sentence is affirmed (see, People v Ander*527son, 131 AD2d 490). Mangano, J. P., Kunzeman, Rubin, Hooper and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902537/ | a proceeding pursuant to Business Corporation Law § 1104-a for the judicial dissolution of a closely held corporation, converted to a proceeding to determine the fair value of the petitioner’s shares in the corporation upon the election to purchase the petitioner’s shares pursuant to Business Corporation Law § 1118, Elegant Concepts, Ltd., Norbert Nardone and William Terranova, Jr., separately appeal from a judgment of the Supreme Court, Suffolk County (Doyle, J.), dated July 16, 1986, which awarded the petitioner the principal sum of $422,525 representing the value of his shares in Elegant Concepts, Ltd., as of March 25, 1984.
*692Ordered that the judgment is modified, on agreement of the parties, (1) to reflect a correction in computations, by reducing the principal sum awarded to the petitioner from $422,525 to $350,975; and (2) by adding thereto a provision that upon full payment of the sum awarded in the judgment, the petitioner shall deliver satisfaction pieces to the appellants Nardone and Terranova, and the appellants shall serve upon the secretary of Elegant Concepts, Inc., copies of the respective satisfaction pieces, at which time the books of that corporation shall be amended to reflect the transfer of the petitioner’s shares to the appellants; as so modified, the judgment is affirmed, with one bill of costs to the respondent payable by the appellants appearing separately and filing separate briefs, for reasons stated by Justice Doyle in his memorandum decision dated February 18, 1986, and the matter is remitted to the Supreme Court, Suffolk County, for entry of an appropriate amended judgment. Lawrence, J. P., Kunzeman, Kooper and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902539/ | Order, Supreme Court, Bronx County (Laura Douglas, J.), entered April 15, 2011, which, inter alia, granted plaintiffs motion to strike the answer of defendant Ronny M. Arvelo, unanimously affirmed, without costs.
Plaintiff established that Arvelo’s repeated failure to appear for a deposition was willful and contumacious. Since defendants failed to meet their burden of demonstrating a reasonable excuse for the nonappearance, the court did not abuse its discretion in striking the pleading (see Touray v Munoz, 96 AD3d 623 [1st Dept 2012]). Defendants’ investigator had discovered that Arvelo was in school in the Dominican Republic and had no intent to return to New York. “The fact that defendant has disappeared or made himself unavailable provides no basis for denying a motion to strike his answer, particularly in the face of continued defaults in appearance for examination before trial” (Foti v Suero, 97 AD2d 748, 748 [2d Dept 1983]; see Reidel v Ryder TRS, Inc., 13 AD3d 170 [1st Dept 2004]). Concur— Gonzalez, P.J., Mazzarelli, Acosta and Moskowitz, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902540/ | In a proceeding pursuant to the Family Court Act article 4 for enforcement of a support order, the appeal is from an order of the Family Court, Orange County (Ludmerer, J), entered December 3, 1986, which, after a hearing, directed him to remain current in his support obligations pursuant to an order of the same court, granted an application to hold him in contempt, and committed him to jail for a term of 90 days with the sentence suspended on condition that arrears be paid within 18 days.
Ordered that the order is modified, on the facts and in the exercise of discretion, by deleting therefrom the finding of a willful violation and the provision committing the appellant to jail for 90 days; as so modified, the order is affirmed, without costs or disbursements, and the matter is remitted to the Family Court, Orange County, for further proceedings consistent herewith.
The record supports a finding of nonpayment of support and arrears pursuant to an outstanding order of the Family Court, Orange County (Slobod, J.), entered July 19, 1985. However, under the circumstances of this case, it does not satisfactorily appear that the appellant’s failure to pay was willful. It is well established that personal service of a certified copy of an order is not necessary to hold a party in contempt thereof if the party had actual knowledge of that order (Matter of McCormick v Axelrod, 59 NY2d 574, 583, amended 60 NY2d 652). The petitioner withdrew the initial violation petition *694upon discovering that no order of support had been signed or entered and promised to serve the appellant with a copy of the order of support after it was signed and entered. The record indicates, however, that the order which was entered on July 19, 1985 was not mailed to the appellant until June 1986 subsequent to the commencement of this proceeding, at which time he immediately commenced making support payments. Further, the record fails to indicate the appellant’s present ability to pay the accumulated arrears (see, Matter of Rogers v Rogers, 77 AD2d 818; Matter of Abbondola v Abbondola, 40 AD2d 976; Matter of Kelley v Kelley, 31 AD2d 825). Accordingly, the matter is remitted for further proceedings on the petition to enforce the order of support, including a determination of the appellant’s ability to pay the accumulated arrears. Thompson, J. P., Brown, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902541/ | a proceeding pursuant to Family Court Act article 3, the appeal is from an order of disposition of the Family Court, Suffolk County (Hurley, J.), dated May 23, 1986, which, upon a fact-finding order of the same court, dated May 12, 1986, made after a hearing, finding that the appellant had committed an act which, if committed by an adult, would have constituted the crime of aggravated harassment in the second degree, placed her in the custody of the New York State Division for Youth for placement in a Title III facility for a period of one year.
Ordered that the order of disposition is affirmed, without costs or disbursements.
The telephonic utterance of the appellant was sufficient to constitute a violation of Penal Law § 240.30. Brown, J. P., Rubin, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5903259/ | Appeal from a judgment of the Supreme Court, Queens County (Dunkin, J.), dated March 7, 1988.
Ordered that the judgment is affirmed, without costs or disbursements (see, Matter of Ford v D Apice, 133 AD2d 191). Mollen, P. J., Thompson, Lawrence and Weinstein, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/6826235/ | OPINION
MOODY R. TIDWELL, III, Judge:
This case involves a timber sale contract awarded by the United States acting through the United States Forest Service, Department of Agriculture. The trial concluded on October 4, 1984, and responsibility for the case was transferred to these chambers on March 30, 1988.
FACTS
On January 6, 1970, the Forest Service awarded a contract to Northern Timber Company for the harvest of timber located within Deerlodge National Forest, Montana. The contract was designated the “West Fork” sale and was to be completed by October 1, 1974. The estimated harvest after clear-cutting was 14,800,000 board feet (14.8 MBF). On May 4, 1974, Northern Timber Company assigned the contract with defendant’s approval to plaintiff. No terms or conditions of the original contract were changed by the act of assignment; plaintiff took over all rights, benefits and obligations that its predecessor in interest had under the original contract.
Plaintiff began its harvest of the West Fork sale during the 1974 operating season, the last year of the term of the original contract. On August 27, 1974, plaintiff formally requested a two-year extension of the contract from defendant in order to complete the harvest.1 One month later defendant rejected plaintiff’s request and stated that it would approve only a one-year extension with significantly modified terms and conditions. Plaintiff refused to accept the extension because of the costly modifications. The contract expired with the sale uncompleted under the terms of a short extension period on November 15, 1974. Thereafter, plaintiff filed suit, alleging in Count I that certain directives issued by the Forest Service constituted a breach or breaches of the contract. In Count II plaintiff alleged a breach of contract based upon defendant’s unreasonable refusal to extend the period of performance under the same general terms and conditions as the original contract. At a subsequent post trial conference held on April 19, 1988, the parties requested that the court address only the issue of liability under Count II.
At trial plaintiff attempted to prove that under Forest Service policy it should have received its requested two-year extension of time to perform the contract with, at most, relatively insignificant changes to the contractual terms and conditions. Plaintiff claimed that defendant’s response to its extension request would not lead to an extension of the original contract but was, rather, a transparent attempt by defendant to impose an entirely different contract upon plaintiff. Plaintiff based this assertion on three principal modifications identified by defendant in its one-year extension offer: (1) the elimination of eighty-eight percent of the remaining timber from the sale, (2) the requirement that plaintiff remove 1.9 MBF of pulpwood not required under the optional terms of the contract,2 *415and (3) the setting of new, more efficient, but costly, stream course protection requirements.
Defendant argued that its proposed changes as a condition of the extension were necessitated in great part by the National Environmental Policy Act, 42 U.S.C. § 4321 et seq. (1976), effective January 1, 1970, which required the Forest Service to become more sensitive to the environmental impacts of timber harvest contracts on Forest Service land. Defendant argued further that pre-NEPA Forest Service policy authorized the service to either reject, or agree to, significantly modified contract extensions to control environmental degradation. Defendant also argued that plaintiff had no “right” to an extension of its contract under its original terms and that extensions could not and would not be granted if the terms thereof would be “disadvantageous to the United States”; a factor to be considered in 1970 when Northern Timber entered into the original contract, at the time of assignment of the contract to plaintiff, and in 1974 when plaintiff requested the contract extension. Defendant introduced substantial testimony as well as documentary evidence to show that its decision to modify plaintiffs contract extension was necessary because of unacceptable damage to the environment caused by plaintiff’s logging practices.
DISCUSSION
This Opinion addresses the issue of whether defendant breached its contract with plaintiff by refusing to extend the time for performance for two years under similar or slightly modified terms and conditions as in the original contract.
Defendant correctly stated in its post-trial brief that “[t]he issue of what precisely constituted the Forest Services implied contractual commitment is a legal issue, not a question of fact.” (Emphasis in original). In this instance, however, the legal issue turns, more so than usual, on the facts, i.e., Forest Service policy and practice. The court finds it necessary to examine the fact intensive setting of this case to determine whether the Forest Service departed from its normal policy and practice when it refused plaintiffs extension request and, if so, whether that constituted a breach of contract.
The Forest Service, an agency of the United States Department of Agriculture, is authorized to regulate the national forests. Wilson v. Block, 708 F.2d 735, 741 (D.C.Cir.), cert. denied, 464 U.S. 956, 104 S.Ct. 371, 78 L.Ed.2d 330 (1983); National Wildlife Fed’n v. United States Forest Serv., 592 F.Supp. 931, 938 (D.Or.1984); 16 U.S.C. §§ 472, 475, 528-531 (1982). The Multiple-Use Sustained Yield Act of 1960 directs the Forest Service to “develop and administer the renewable surface resources of the national forests for multiple use and sustained yield of the several products therefrom.” 16 U.S.C. § 529 (1982). These products and services include outdoor recreation, range, timber, watershed, and wildlife. The definition of “multiple use” and “sustained yield” are set forth by statute:
(a) “Multiple use” means: The management of all the various renewable surface resources of the national forests so that they are utilized in the combination that will best meet the needs of the American people; making the most judicious use of the land for some or all of these resources or related services over areas large enough to provide sufficient latitude for periodic adjustments in use to conform to changing needs and conditions; that some land will be used for less than all of the resources; and harmonious and coordinated management of the various resources, each with the other, without impairment of the productivity of the land with consideration being given to the relative values of the various resources, and not necessarily the combination of uses that will give the greatest dollar return or the greatest unit output.
*416(b) “Sustained yield of the several products and services” means the achievement and maintenance in perpetuity of a high-level annual or regular periodic output of the various renewable resources of the national forests without impairment of the productivity of the land.
16 U.S.C. § 531 (1982).
Forest Service policy may be derived from the United States Code, by regulation, from the Forest Service Handbook or in express or implied contract terms. Everett Plywood Corp. v. United States, 206 Ct.Cl. 244, 256, 512 F.2d 1082, 1089 (1975); Wysinger v. United States, 621 F.Supp. 773, 775 (D.La.1985), aff'd, 784 F.2d 1252 (5th Cir.1986). Contractual duties may also be determined by established practice or custom. Everett Plywood, 206 Ct.Cl. at 256, 512 F.2d at 1089 (citing Stoekert v. United States, 183 Ct.Cl. 152, 165, 391 F.2d 639, 647 (1968)). Where well-established custom exists, it is assumed that the parties to the contract intended that practice to apply. Id. As the court in Cape Fox Corp. v. United States, 4 Cl.Ct. 223, 235 (1983), noted, “Forest Service policy applicable to an extension of a timber sale contract in existence at the time the contract was executed, is a part of the contract.”
The Forest Service has wide discretion in policy determinations involving the proper uses of any lands or resources within National Forests. Sierra Club v. Hardin, 325 F.Supp. 99, 123 (D. Alaska 1971). This discretion, however, is not absolute. The power to extend plaintiffs contract was within the discretion of the Forest Service, and as such the principal issue to be decided is whether defendant acted fairly and reasonably, and not arbitrarily and capriciously, when it refused to grant plaintiffs extension request. Everett Plywood, 206 Ct.Cl. at 256-57, 512 F.2d at 1090.
Plaintiffs argument of breach of contract under Count II of the complaint was based upon an alleged, long-standing, nationwide Forest Service policy of regularly granting timber sale contract extensions without requiring the purchaser to agree to extensive modifications or undertake significant new obligations. That policy was not expressly stated in the contract, but was arguably derived from custom and two sections of the Forest Service Manual; sections 2433.11 and 2433.12, both of which were in effect on the date of execution of the contract with Northern Timber Company.
FSM § 2433.12 (1970) stated: “Ordinarily, the timber sale contract is written on the basis that time is not of the essence.” That section noted further, “an extension of time may be granted ... unless [it would be] disadvantageous to the United States.” Section 2433.11 permitted the Forest Service to modify extended contracts as “necessary to bring the contract [terms and conditions] up to date with other comparable contracts being issued at the time of the extension.” FSM § 2433.11 (1970). Section 2433.11 also specified that to qualify for an extension the contractor must have harvested at least fifty percent of the timber and constructed necessary roads to reach at least sixty percent of the remaining timber. It is clear from the record that plaintiff and its predecessor in interest, Northern Timber Company, had not cut fifty percent of the timber nor had plaintiff constructed roads to reach sixty percent of the remaining timber. At trial, however, there emerged a consensus that the cutting and road construction percentage requirements were often ignored by the Forest Service in reaching its decision whether or not to grant a requested extension of time for contract completion.3 The court, therefore, does not consider plaintiffs failure to cut timber or construct roads as dispositive of the issue in dispute.
On June 30, 1971, the Forest Service issued a new contract timber sale extension policy statement which applied to all contracts awarded after that date. The new policy continued much of the pertinent elements of the old policy but provided that contracts would not be extended unless they could be clearly brought into compli-*417anee with the then new environmental standards. As pointedly argued by plaintiff, the new policy did not apply to it because it expressly exempted first logging contract extension requests made after July 1, 1971 if the contract had been awarded before that date. The old policy, however, never stated that timber sale contract extensions were automatic, though palpable evidence indicated that the Forest Service in the late 1960’s and 1970 was afraid that it might have inadvertently established an automatic extension policy by routinely extending some sales that should not have been extended. The new policy was promulgated to negate that concern.
Both parties cite Everett Plywood Corp. v. United States, 206 Ct.Cl. 244, 512 F.2d 1082 (1975), in support of their respective positions. Everett Plywood involved a government logging contract to which the Forest Service refused to grant an extension after having granted eight successive extensions of the same contract. The court held that defendant’s refusal constituted a breach of contract and awarded damages to plaintiff because the Forest Service applied the wrong standard in determining whether the extension should have been granted. Id. at 260, 512 F.2d at 1092. The Everett Plywood court described the Forest Service extension policy as very liberal. Id. at 255, 512 F.2d at 1089. It found that:
Extensions were regularly granted for a variety of reasons ranging from bad weather to poor economic conditions. Forest Service personnel testifying at trial could recall no specific instance where, prior to 1969 an extension had been denied. ... The fact is that Forest Service extensions of contracts were granted by the Forest Service with very little urging.
Id. at 250, 512 F.2d at 1086.4 Plaintiff argued that the automatic contractual extension proposition stated in Everett Plywood was reaffirmed in Cape Fox Corp. v. United States, 4 Cl.Ct. 223 (1983). In Cape Fox, the court found that:
Forest Service policy applicable to an extension of a timber sale contract in existence at the time the contract was issued, is a part of the contract. The Forest Service is liable for breach of the contract commitment if it erroneously refuses to extend a timber sale eligible for extension.
Id. at 235.
Everett Plywood, as interpreted by plaintiff, is inapplicable to the issues now before the court. In that case the Forest Service was found to have acted in an arbitrary and capricious manner because it failed to evaluate the extension request in accordance with the policy, practice and custom in effect at the time the contract was executed. That court found that defendant improperly used a more onerous “extraordinary conditions” standard instead of the “disadvantageous to the United States” standard and that the imposition of the “extraordinary conditions” standard constituted a breach of contract. Everett Plywood, 206 Ct.Cl. at 257-58, 512 F.2d at 1090. This court reads Everett Plywood to stand for the proposition that the Forest Service had the discretionary authority to refuse to extend any contract that would be disadvantageous to the United States. Everett Plywood, 206 Ct.Cl. at 256, 512 F.2d at 1089.5 The exercise of that discre*418tion had to be fair and reasonable, not arbitrary and capricious. Id. Forest Service policy, old and new, allowed an extension without significant changes from the terms of the original contract if the Service determined that the United States would not be disadvantaged, environmentally or otherwise. The converse is just as true.
The court, after a thorough review of the trial record, is not convinced that it was Forest Service policy to automatically grant timber contract extensions without regard to the manner in which the contractor performed under its original contract. The court gave great weight to the testimony of Mr. Magnus E. Chelstad, an experienced and knowledgeable official of the Forest Service, that the Forest Service could not extend a sale through extensions that in its judgment would have caused or furthered unacceptable environmental damage. The Forest Service’s basic charge is to protect the multiple use resources of natural forest lands taking into consideration, among other factors, recreation, water, fish and fish habitat, watershed, wildlife and wildlife habitat, minerals and soil, including soil stability, as well as obtaining fair market value for timber harvests. 16 U.S.C. §§ 529-30 (1982). Extending a contract that would permit or perpetuate the destruction of any of these resources would violate that basic charge.
In the case at bar the Forest Service exercised its discretion by determining that an extension of plaintiffs contract under the same or similar terms as the original contract would be “disadvantageous to the United States” because of harm to the environment and, thus, would accept only a significantly modified extension responsive to its concerns. The court finds that the Forest Service was reasonable and fair in making that determination. The modifications involved measures to protect wildlife and unstable soils, and required a change in plaintiff’s logging procedures; actions that were intended to protect National Forest land from further environmental degradation.
Defendant’s actions in this case were not without precedent. Logging contract extensions had been significantly modified in the past by the Forest Service to protect the environment and the forest resources. See Minnesota Pub. Interest Research Group v. Butz, 498 F.2d 1314, 1318 (D.Minn.1974); Cape Fox, 4 Cl.Ct. at 228. Under the policies in effect at the time of the award of the original contract to Northern Timber Company the Forest Service was obligated to impose environmental modifications on its logging contractors if the need existed. Id. at 228, 229. Most significantly, in Cape Fox Corp. v. United States, 4 Cl.Ct. 223 (1983), an example of the operation of the Forest Service’s pre-1971 policy, plaintiff accepted substantial environmentally-oriented modifications to the terms of its original 1969 contract in consideration for a first extension given in 1974. Those modifications, in part, included measures to protect wildlife and unstable soils and a change in plaintiff’s logging procedures. Id. Additional evidence introduced at trial established that extensions for pre-July 1971 contracts clearly were not automatic. Logging contracts had been modified and granted at the time of extensions, or rejected, based on environmental concerns. Such instances included: the Mullen Creek sale on the Medicine Bow National Forest in 1971, where a substantial reduction in sale volume..and changes in yarding methods and cutting size were required; the Medicine Lake Bench sale in the Deerlodge Forest in 1971, where an extension was executed with modifications including changes in cutting unit size, rate determinations, and the addition of specific harvesting method clauses; and the Comptroller General’s decision in the Bunker Creek sale which supported the modification of contract extensions for environmental reasons. Bunker Creek Sale, B-173551 Comp.Gen.Dec. (1971). Other instances included the Roaring Fork timber sale in 1972 where an extension was executed with environmental modifications including changes in the size of cutting units, road locations, cutting and cleanup methods; the Sand Basin II sale in the Deer-lodge Forest in 1972, where an extension was executed with environmental changes such as a deletion of cutting units, changes in the contract rate, and an addition of specific harvesting method clauses; and *419the Mosca Creek sale in the San Juan National Forest in 1973, in which an extension was executed with environmental modifications in the logging method and road system, and substantial reductions in sale volume. The court is satisfied that this evidence established that logging contract extensions were not automatically granted, and were most certainly not granted without consideration of environmental factors.
Additionally, FSM § 2433.11 (1970) specifically provided for modifications as preconditions to extensions “which are necessary to bring the contract up to date with other comparable contracts being issued at the time of the extension.” This was supported by the testimony of a Forest Service timber management officer in which he stated that if a pre-1971 sale was designed
under a concept that did not meet today’s standards, that had developed through land management, planning or discovery of new items during the timber sale such as essential wildlife habitat, unstable soils, and the contract could not be modified to recognize and correct those values, then it would be to the disadvantage of the government and the sale would be allowed to terminate.
This court finds that the identified modifications were within the Forest Service’s discretion under both the old and new policies, and that defendant did not act arbitrarily, capriciously, unfairly or unreasonably in refusing to allow plaintiff’s requested extension. The court’s conclusion is not only supported by defendant’s past policies and practice, but also by defendant’s duty to comply with NEPA and other relevant environmental and natural resource laws.6
Minnesota Pub. Interest Research Group v. Butz, 498 F.2d 1314 (D.Minn. 1974), was illustrative of the weight given environmental concerns by the Forest Service in granting contract extensions. In Minnesota, plaintiff, an “environmental” organization, sought temporary and permanent injunctions against logging operations in the Boundary Waters Canoe Area of Minnesota. The logging contracts involved eleven pre-NEPA Forest Service timber sales. On six of the sales the Forest Service granted extensions after January 1, 1970. The court stated, “there was no obligation on the part of the Forest Service to grant these extensions,” though it was routine practice to do so. Id. at 1318. The court noted further that, “[mjodifications ... were negotiated by the Forest Service in seven of the sales contracts and were made for environmental reasons.” Id.
Defendant in this case similarly considered the adverse environmental impacts of granting plaintiff’s extension request, and as a result determined that it would grant an extension only if plaintiff would accept the modified contractual terms. This court finds that defendant had an unquestionable mandate to evaluate the environmental effect of plaintiff’s logging practices when making the decision whether or not to extend and/or modify the contract. Defendant’s identified modifications, albeit major, to plaintiff’s contract were consistent with that mandate. As such, defendant acted properly when it informed plaintiff it would extend the contract for one year with the modifications.
CONCLUSION
The court finds, from a review of the entire voluminous record, that defendant’s identified modifications to plaintiff’s contract were prepared in response to a heightened sensitivity to environmental considerations, and to plaintiff’s poor log*420ging practices which caused extensive environmental damage both within and without the contract area. Defendant’s position was neither arbitrary nor capricious and was properly predicated upon law and policy in existence at the time the original contract was awarded to Northern Timber, the assignment of that contract to plaintiff, and the requested extension. Defendant did not depart from its normal policy and practice when it refused plaintiffs extension request notwithstanding the 1971 Forest Manual policy change. Defendant had the authority under the pre-1971 policy to evaluate and address plaintiffs logging practices vis-a-vis its environmental impact on Deerlodge National Forest and had exercised that authority to such an extent in other instances that this court cannot conclude that plaintiff had relinquished it by operation of law or as a matter of policy. The 1971 policy change did not preclude defendant from exercising its rights and duties to protect natural resources in contracts awarded prior to that date. Based on the foregoing, the court concludes that defendant did not breach plaintiffs contract by refusing to grant the extension as sought by plaintiff. Axiomatically, plaintiff is not entitled to damages on its claim under Count II for breach of contract. Count II of the complaint is dismissed. The Clerk is directed to act accordingly. No costs.
. Testimony established that most extensions granted were for one year, though some may have been for two years and others for thirty days or less. The time thought to be needed to complete the sale was a significant factor in determining the length of any extension.
. It appears from the record that plaintiff had previously informed the Forest Service that it *415would in any event have to remove the pulpwood in order to continue its logging operations. Plaintiffs subsequent argument that this proposed new contract requirement constituted a major modification to the contract carried little weight in this decision.
. The United States Claims Court in Cape Fox Corp. v. United States, 4 Cl.Ct. 223, 235 (1983), found the harvesting percentage requirement not to be an absolute requirement.
. Even though this court did not have the briefs or transcript on Everett Plywood, it is obvious from a review of the opinion that the United States Court of Claims did not have the benefit of testimony as did this court that significantly modified terms, including those addressing environmental matters, had been added to prior logging contract extensions as the price for the extension.
. At the status conference of April 19, 1988, plaintiff asserted that law of the case had been established during a status conference held February 29, 1988, during a discussion of whether the "disadvantageous to the United States” standard referred singularly to financial disadvantage only or to environmental disadvantage as well. Plaintiff errs in this conclusion. Law of the case pertains only to issues that have been fully decided. Gindes v. United States, 740 F.2d 947, 949 (Fed.Cir.), cert. denied 469 U.S. 1074, 105 S.Ct. 569, 83 L.Ed.2d 509 (1984) (citing Messinger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152 (1912)). The issue of what constitutes disadvantageous to the United States was not conclusively decided at the February 29, 1988 conference. In any event it cannot be said that plaintiff has been prejudiced in any manner.
. The court also notes that NEPA standards are applicable to pre-NEPA contracts. Minnesota Pub. Interest Research Group v. Butz, 498 F.2d 1314, 1320 (D.Minn.1974). NEPA requires a Federal Agency to. compile an environmental impact statement whenever a contract is considered to be a major federal action which may have a significant affect on the environment. Id. at 1319; C.E.Q. Guidelines, 36 Fed.Reg. 7724 (1971). Environmental factors are to be considered to the fullest extent possible. Minnesota, 489 F.2d at 1320; 42 U.S.C. § 4321 (1982).
The Council on Environmental Quality stated that:
[a]gencies have an obligation to reassess ongoing projects and programs in order to avoid or minimize adverse environmental effects. ... While the status of the work and the degree of completion may be considered in determining whether to proceed with the project, it is essential that the environmental impacts of proceeding are reassessed pursuant to the Act’s policies and procedures....
40 C.F.R. § 1500.13 (1974). | 01-03-2023 | 07-23-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902543/ | by the defendant from a judgment of the Supreme Court, Kings County (Broomer, J.), rendered December 11, 1985, convicting him of robbery in the first degree (two counts) and criminal possession of stolen property in the third degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
The defendant contends that a padlock held in the palm of an accomplice’s hand, with the shackle encircling the fingers *696like a brass knuckle, was not a dangerous instrument as a matter of law since it was never actually used to injure a victim, that the issue of whether or not it was a dangerous instrument should not have been submitted to the jury as a question of fact, and that the analogy to "brass knuckles” was prejudicial, since "brass knuckles” are defined as a "deadly weapon” in Penal Law § 10.00 (12). The defendant’s argument in this regard is without merit.
By their plain language, Penal Law § 160.15 (3) and § 10.00 (13) require only that a potentially "dangerous instrument” "readily capable of causing death or other serious physical injury” be "threatened to be used”—as the large metal padlock was in the instant case. A heavy padlock, brandished like a brass knuckle, is, on its face, distinguishable from items like a handkerchief used to choke a victim, in that the former’s potential for injury is immediately apparent, whereas the latter’s potential is only disclosed upon use. The padlock here was threatened to be used "in a manner which render[ed] it readily capable of causing serious physical injury” (People v Carter, 53 NY2d 113, 116 [emphasis supplied]). Since there was no objection to the use throughout the trial by the complainants, the prosecutor and the court of the analogy to brass knuckles, and no exception was taken to the court’s submission of the issue of whether the padlock was a "dangerous instrument” to the jury, these matters have not been preserved for appellate review (CPL 470.05 [2]; People v Medina, 53 NY2d 951). In any event, the jury was never instructed that metal knuckles are defined by Penal Law § 10.00 (12) as a "deadly weapon”, nor can it be assumed that the jury was independently aware of this statutory definition. The court quite properly submitted the issue of "dangerous instrument” to the jury as one of the questions of fact on which the People had the burden of proof.
The defendant next argues that since the two complainants were robbed in the course of a single criminal transaction, there was only one robbery, so that the second robbery count should be dismissed. This contention likewise lacks merit. Property was forcibly removed from two separate individuals, so that there were two distinct acts of robbery, regardless of their occurrence in the course of a single, or consolidated, criminal transaction (People v Brathwaite, 63 NY2d 839).
Finally, the sentence imposed was not unduly harsh (People v Suitte, 90 AD2d 80). Brown, J. P., Rubin, Fiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902544/ | Appeal by the defendant from a judgment of the County Court, Nassau County (Winick, J.), rendered March 30, 1987, convicting him of operating a motor vehicle while under the influence of alcohol and aggravated unlicensed operation of a motor vehicle in the first degree, upon his plea of guilty, and imposing sentence. The appeal brings up for review the denial, after a hearing, of that branch of the defendant’s omnibus motion which was to suppress an oral statement.
Ordered that the judgment is affirmed.
The defendant was stopped by a police officer who observed that his vehicle was weaving back and forth across the roadway. The defendant was asked to get out of his vehicle and to produce his license and registration. He staggered as he walked toward the officer, who commented that it smelled as if the defendant had been drinking. The defendant responded "I have to be honest with you; I had a few beers before”. After failing several field sobriety tests, the defendant was formally placed under arrest.
There is no merit to the defendant’s contention that he should have been given Miranda warnings (see, Miranda v Arizona, 384 US 436) at the outset of the stop and that, therefore, the hearing court erred when it denied the motion to suppress his statement. There is nothing in the record which suggests that, at the moment he responded to the officer’s comment, the defendant’s freedom of action was curtailed to a degree associated with a formal arrest (see, Berkemer v McCarty, 468 US 420). The record amply supports the hearing court’s determinations that the defendant was not in custody and that therefore Miranda warnings were not required (see, Berkemer v McCarty, supra; cf., People v Gardell, 59 AD2d 929). Mangano, J. P., Bracken, Spatt and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/4534623/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
05/15/2020 08:07 AM CDT
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Nebraska Supreme Court Advance Sheets
305 Nebraska Reports
STATE v. FERRIN
Cite as 305 Neb. 762
State of Nebraska, appellee, v.
Benjamin L. Ferrin, appellant.
___ N.W.2d ___
Filed May 8, 2020. No. S-19-594.
1. Criminal Law: Courts: Judgments: Appeal and Error. In an appeal
of a criminal case from the county court, the district court acts as an
intermediate court of appeals, and its review is limited to an examina-
tion of the record for error or abuse of discretion. Both the district court
and a higher appellate court generally review appeals from the county
court for error appearing on the record. When reviewing a judgment for
errors appearing on the record, an appellate court’s inquiry is whether
the decision conforms to the law, is supported by competent evidence,
and is neither arbitrary, capricious, nor unreasonable.
2. Statutes. Statutory interpretation presents a question of law.
3. Evidence: Records: Appeal and Error. A bill of exceptions is the
only vehicle for bringing evidence before an appellate court, and evi-
dence which is not made a part of the bill of exceptions may not be
considered.
4. Records: Appeal and Error. As a general proposition, it is incumbent
upon the appellant to present a record supporting the errors assigned;
absent such a record, an appellate court will affirm the lower court’s
decision regarding those errors.
5. Trial: Pretrial Procedure: Pleadings: Evidence: Juries: Appeal and
Error. A motion in limine is a procedural step to prevent prejudicial
evidence from reaching the jury. It is not the office of a motion in limine
to obtain a final ruling upon the ultimate admissibility of the evidence.
Therefore, when a court overrules a motion in limine to exclude evi-
dence, the movant must object when the particular evidence is offered
at trial in order to predicate error before an appellate court.
6. Pretrial Procedure: Pleadings: Appeal and Error. An appellant who
has assigned only that the trial court erred in denying a motion in limine
has not triggered appellate review of the evidentiary ruling at trial.
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STATE v. FERRIN
Cite as 305 Neb. 762
7. Motions to Dismiss: Directed Verdict: Waiver: Appeal and Error. A
defendant who moves for dismissal or a directed verdict at the close of
the evidence in the State’s case in chief in a criminal prosecution and
who, when the court overrules the dismissal or directed verdict motion,
proceeds with trial and introduces evidence, waives the appellate right
to challenge correctness in the trial court’s overruling the motion for
dismissal or a directed verdict but may still challenge the sufficiency of
the evidence.
8. Convictions: Evidence: Appeal and Error. When reviewing a crimi-
nal conviction for sufficiency of the evidence to sustain the conviction,
the relevant question for an appellate court is whether, after viewing
the evidence in the light most favorable to the prosecution, any ratio-
nal trier of fact could have found the essential elements of the crime
beyond a reasonable doubt. An appellate court does not resolve con-
flicts in the evidence, pass on credibility of witnesses, or reweigh the
evidence; such matters are for the finder of fact.
9. Criminal Law: Statutes. To determine the elements of a crime, courts
look to the text of the statute.
10. ____: ____. Penal statutes are considered in the context of the object
sought to be accomplished, the evils and mischiefs sought to be rem-
edied, and the purpose sought to be served.
11. ____: ____. Effect must be given, if possible, to all parts of a penal
statute; no sentence, clause, or word should be rejected as meaningless
or superfluous if it can be avoided.
12. Statutes. In the absence of anything indicating otherwise, statutory lan-
guage is to be given its plain and ordinary meaning.
13. Criminal Law: Police Officers and Sheriffs: Judges: Proof: Intent.
To show a violation of Neb. Rev. Stat. § 28-906(1) (Reissue 2016),
the State must prove that (1) the defendant intentionally obstructed,
impaired, or hindered either a peace officer, a judge, or a police animal
assisting a peace officer; (2) at the time the defendant did so, the peace
officer or judge was acting under color of his or her official authority to
enforce the penal law or preserve the peace; and (3) the defendant did
so by using or threatening to use either violence, force, physical interfer-
ence, or obstacle.
14. Criminal Law: Police Officers and Sheriffs: Intent. Neb. Rev. Stat.
§ 28-906(1) (Reissue 2016) does not proscribe all conduct that intention-
ally obstructs, impairs, or hinders officers who are acting under color
of their authority to either enforce the penal law or preserve the peace.
Instead, it proscribes only conduct that involves using or threatening to
use “violence, force, physical interference, or obstacle.”
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305 Nebraska Reports
STATE v. FERRIN
Cite as 305 Neb. 762
15. Police Officers and Sheriffs: Convictions: Evidence. Evidence show-
ing a defendant resisted handcuffing, struggled with an officer, and
continued to resist restraint is alone sufficient to sustain a conviction for
obstructing a peace officer under Neb. Rev. Stat. § 28-906(1) (Reissue
2016).
16. Criminal Law: Police Officers and Sheriffs. The act of running away
from police interposes a physical obstacle that can obstruct, impair, or
hinder an officer’s efforts to preserve the peace under Neb. Rev. Stat.
§ 28-906(1) (Reissue 2016).
17. Criminal Law: Police Officers and Sheriffs: Judges: Intent. The
proper inquiry under Neb. Rev. Stat. § 28-906(1) (Reissue 2016) is
not whether a defendant has engaged in “some sort of physical act,”
but, rather, whether a defendant’s conduct, however expressed, used or
threatened to use either violence, force, physical interference, or obsta-
cle to intentionally obstruct, impair, or hinder a peace officer or judge
who was acting to either enforce the penal law or preserve the peace
under color of his or her official authority.
18. Police Officers and Sheriffs: Investigative Stops: Motor Vehicles.
Officers making a traffic stop may order the driver and passengers to get
out of the vehicle pending completion of the stop.
19. Police Officers and Sheriffs: Investigative Stops: Motor Vehicles:
Evidence. Evidence that a defendant repeatedly refused to comply with
police orders to exit a vehicle during a traffic stop is sufficient to show
the use of either “physical interference” or “obstacle” under Neb. Rev.
Stat. § 28-906(1) (Reissue 2016).
Appeal from the District Court for Sarpy County, George
A. Thompson, Judge, on appeal thereto from the County Court
for Sarpy County, Robert C. Wester, Judge. Judgment of
District Court affirmed.
John H. Sohl for appellant.
Douglas J. Peterson, Attorney General, and Matthew Lewis
for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Stacy, J.
The district court for Sarpy County affirmed Benjamin L.
Ferrin’s conviction and sentence for the misdemeanor offense
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305 Nebraska Reports
STATE v. FERRIN
Cite as 305 Neb. 762
of obstructing a peace officer under Neb. Rev. Stat. § 28-906
(Reissue 2016), which provides in relevant part:
A person commits the offense of obstructing a peace
officer, when, by using or threatening to use violence,
force, physical interference, or obstacle, he or she inten-
tionally obstructs, impairs, or hinders (a) the enforce-
ment of the penal law or the preservation of the peace
by a peace officer or judge acting under color of his or
her official authority or (b) a police animal assisting a
peace officer acting pursuant to the peace officer’s offi-
cial authority.
The primary question on appeal is whether the evidence in
this case was sufficient to support Ferrin’s conviction. Finding
it was, we affirm.
I. BACKGROUND
On February 11, 2018, at 1:54 p.m., two Bellevue, Nebraska,
police officers were dispatched to a domestic disturbance call.
When they arrived, they spoke with M.H., who had called
police for assistance. M.H. told police she and her husband,
Ferrin, were having marital difficulties, and she reported
he had locked her out of their residence. M.H. spoke with
police outside the residence, and the conversation was video
recorded.
M.H. told police she had spoken with Ferrin by telephone
earlier that day and was concerned about his state of mind,
explaining “he just appeared to have snapped.” M.H. reported
that Ferrin had been verbally and physically abusive in the
past, and she told the officers Ferrin had sexually assaulted her
about 3 weeks earlier. M.H. told the officers that Ferrin owned
several guns and that he had been suicidal months before. She
warned officers that Ferrin may be uncooperative if they tried
to talk with him.
1. Traffic Stop
While police were interviewing M.H. outside her residence,
Ferrin drove past in his pickup truck. One of the officers got
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305 Nebraska Reports
STATE v. FERRIN
Cite as 305 Neb. 762
into his cruiser and followed Ferrin’s truck, activating his over-
head lights. The officer testified that the purpose of the traffic
stop was twofold: to investigate a possible crime against M.H.
and to check on Ferrin’s well-being.
Ferrin pulled his truck to the side of the road and stopped.
The first officer parked his cruiser behind Ferrin’s truck and
waited for the second officer to arrive and provide backup.
According to the first officer, he did not want to contact Ferrin
without backup, because he was concerned about Ferrin’s state
of mind and the possibility there were guns in his truck.
The second officer arrived at the traffic stop shortly there-
after, and the officers positioned themselves near the first offi-
cer’s cruiser and directed Ferrin to exit his pickup truck and
walk back to them. Ferrin, whose window was rolled down,
replied that he could not hear the officers. Using the public
address system in one of the cruisers, the officers again asked
Ferrin to open his pickup door, exit the pickup, and walk back
to where the officers were positioned. Ferrin responded, “‘No,
thank you.’”
At that point, the officers considered it a “high-risk” traffic
stop and drew their firearms. They again asked Ferrin to step
out of his truck and walk back to them. Ferrin responded that
he did not want to leave his truck, because he had a dog inside.
The officers suggested Ferrin roll up the window so that the
dog could not get out, and they again directed him to exit the
truck and walk back to them. Again Ferrin refused to comply.
The officers informed Ferrin that if he did not comply with
their request to get out of his truck, he could be charged with a
crime. Ferrin asked why he had been stopped, and the officers
told him they were “investigating a domestic incident.” Ferrin
replied that the officers had no reason to stop him, and he
remained inside the truck. The officers again instructed Ferrin
to get out of the truck and walk back to them so that they could
talk with him. Ferrin remained in the truck. The video shows
that the officers made approximately eight requests for Ferrin
to step out of the truck and that he complied with none.
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Nebraska Supreme Court Advance Sheets
305 Nebraska Reports
STATE v. FERRIN
Cite as 305 Neb. 762
After approximately 3 to 5 minutes of this back-and-forth
communication, the officers advised Ferrin he was under arrest
for obstructing a peace officer. Ferrin responded, “‘Fuck off.’”
He remained in his truck for a few more seconds, then opened
the door and got out. When the officers instructed Ferrin where
to put his hands, he again responded, “‘Fuck off.’” The officers
then instructed Ferrin to lift his shirt so that they could see his
waistband and to walk toward them until he was told to stop.
Ferrin complied with these requests. The officers then directed
Ferrin to get down on his knees. Ferrin initially refused that
request, but complied after further direction. At that point,
Ferrin was handcuffed, searched, and placed in the cruiser. The
entire stop and arrest was video recorded.
2. Criminal Proceedings
On March 7, 2018, the State filed a criminal complaint in
Sarpy County Court charging Ferrin with obstructing a peace
officer, in violation of § 28-906. Ferrin entered a plea of
not guilty.
(a) Motion to Suppress
Ferrin filed a motion to suppress, contending the traffic stop
and subsequent arrest were not supported by probable cause.
A suppression hearing was held, but that hearing was not
included in the record on appeal. In a written order, the county
court overruled the suppression motion in all respects. The
matter was set for a jury trial.
(b) Motion in Limine
Before trial, Ferrin filed a motion in limine seeking to
preclude the State from referring to, or offering evidence of,
M.H.’s statements to police before the traffic stop. Ferrin
argued that M.H.’s statements had no relevance to the charged
offense and would serve only to prejudice the jury. The State
responded that M.H.’s statements, which included allegations
of criminal conduct by Ferrin, formed the basis for the traffic
stop and were inextricably intertwined with evidence of the
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Nebraska Supreme Court Advance Sheets
305 Nebraska Reports
STATE v. FERRIN
Cite as 305 Neb. 762
obstruction crime with which Ferrin had been charged. The
court denied Ferrin’s motion in limine, but indicated it would
give a limiting instruction to the jury regarding the proper use
of M.H.’s statements.
(c) Jury Trial
At trial, both officers testified to the facts summarized
above. A video recording of the traffic stop, including M.H.’s
statements to the officers prior to the stop, was offered and
received over Ferrin’s relevancy and hearsay objections. The
court gave the jury a limiting instruction essentially admonish-
ing them to consider M.H.’s statements only for the purpose of
determining whether police were conducting a criminal inves-
tigation or preserving the peace. Similar admonishments were
repeated several times during the trial and were included in the
written jury instructions.
At the close of the State’s case in chief, Ferrin moved for
directed verdict, arguing the State had failed to prove the
material elements of the charged offense. Summarized, Ferrin
argued the evidence was insufficient as a matter of law to
prove a violation of § 28-906(1), because it showed merely
that he refused to cooperate with police. The court overruled
Ferrin’s motion, after which he testified in his own defense.
At the close of all the evidence, Ferrin renewed his motion
for a directed verdict without additional argument. The court
summarily overruled the motion and submitted the case to the
jury. The jury returned a guilty verdict, and the court sentenced
Ferrin to 7 days in the county jail, 1 month of probation, and a
$50 fine. Ferrin timely appealed his conviction and sentence to
the district court, sitting as an appellate court.
3. Appeal to District Court
Ferrin assigned four errors before the district court: (1)
There was insufficient evidence to convict him, (2) the county
court erred by overruling his motion to suppress, (3) the county
court erred by admitting evidence that had a prejudicial impact
on the jury, and (4) the sentence imposed was excessive.
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Nebraska Supreme Court Advance Sheets
305 Nebraska Reports
STATE v. FERRIN
Cite as 305 Neb. 762
The district court rejected all four assignments of error and
affirmed the trial court’s judgment. Ferrin timely appealed, and
we moved the case to our docket on our own motion.
II. ASSIGNMENTS OF ERROR
On appeal to this court, Ferrin assigns, restated and reor-
dered, that the district court erred in affirming the judgment of
the county court, because the county court erred in (1) overrul-
ing his motion to suppress, (2) overruling his motion in limine,
and (3) overruling his motions for directed verdict, because
there was insufficient evidence to prove the material elements
of the crime.
III. STANDARD OF REVIEW
[1] In an appeal of a criminal case from the county court,
the district court acts as an intermediate court of appeals, and
its review is limited to an examination of the record for error
or abuse of discretion. 1 Both the district court and a higher
appellate court generally review appeals from the county court
for error appearing on the record. 2 When reviewing a judgment
for errors appearing on the record, an appellate court’s inquiry
is whether the decision conforms to the law, is supported by
competent evidence, and is neither arbitrary, capricious, nor
unreasonable. 3
[2] Statutory interpretation presents a question of law. 4
IV. ANALYSIS
1. Motion to Suppress
Ferrin’s first assignment of error challenges the overruling
of his motion to suppress, but the bill of exceptions in this case
does not contain the suppression hearing.
1
State v. Becker, 304 Neb. 693, 936 N.W.2d 505 (2019).
2
Id.
3
Id.
4
State v. Brye, 304 Neb. 498, 935 N.W.2d 438 (2019).
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305 Nebraska Reports
STATE v. FERRIN
Cite as 305 Neb. 762
[3,4] A bill of exceptions is the only vehicle for bringing
evidence before an appellate court, and evidence which is
not made a part of the bill of exceptions may not be con-
sidered. 5 As a general proposition, it is incumbent upon the
appellant to present a record supporting the errors assigned;
absent such a record, an appellate court will affirm the lower
court’s decision regarding those errors. 6 Because our record
does not include the suppression hearing, we do not consider
Ferrin’s assignment of error regarding the ruling on his motion
to suppress.
2. Motion in Limine
[5] Ferrin’s second assignment of error challenges the
overruling of his motion in limine, which sought to preclude
admission of M.H.’s video-recorded statements to police. We
have repeatedly held that a motion in limine is a procedural
step to prevent prejudicial evidence from reaching the jury. 7 It
is not the office of a motion in limine to obtain a final ruling
upon the ultimate admissibility of the evidence. 8 Therefore,
when a court overrules a motion in limine to exclude evi-
dence, the movant must object when the particular evidence
is offered at trial in order to predicate error before an appel-
late court. 9
Ferrin’s brief notes that he objected at trial when the video
recording of M.H.’s statements was offered, but he has not
assigned error to the ruling during trial. To be considered by
an appellate court, an alleged error must be both specifically
5
Bohling v. Bohling, 304 Neb. 968, 937 N.W.2d 855 (2020).
6
D.I. v. Gibson, 295 Neb. 903, 890 N.W.2d 506 (2017).
7
Pantano v. American Blue Ribbon Holdings, 303 Neb. 156, 927 N.W.2d
357 (2019); Golnick v. Callender, 290 Neb. 395, 860 N.W.2d 180 (2015);
State v. Schreiner, 276 Neb. 393, 754 N.W.2d 742 (2008).
8
Pantano, supra note 7.
9
Id.
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STATE v. FERRIN
Cite as 305 Neb. 762
assigned and specifically argued in the brief of the party assert-
ing the error. 10
[6] An appellant who has assigned only that the trial
court erred in denying a motion in limine has not triggered
appellate review of the evidentiary ruling at trial. 11 Because
Ferrin’s second assignment of error challenges only the rul-
ing on the motion in limine, it presents nothing for appellate
review.
3. Motions for Directed Verdict/
Sufficiency of Evidence
Ferrin’s third assignment of error challenges the overruling
of his motions for directed verdict made at the close of the
State’s case and renewed at the conclusion of all the evidence.
Both motions asserted the evidence was insufficient to prove
the material elements of the charged offense.
[7] A defendant who moves for dismissal or a directed ver-
dict at the close of the evidence in the State’s case in chief
in a criminal prosecution and who, when the court overrules
the dismissal or directed verdict motion, proceeds with trial
and introduces evidence, waives the appellate right to chal-
lenge correctness in the trial court’s overruling the motion for
dismissal or a directed verdict but may still challenge the suf-
ficiency of the evidence. 12 We therefore consider Ferrin’s third
assignment of error as one challenging the sufficiency of the
evidence to prove the offense of obstructing a peace officer.
[8] When reviewing a criminal conviction for sufficiency of
the evidence to sustain the conviction, the relevant question for
an appellate court is whether, after viewing the evidence in the
light most favorable to the prosecution, any rational trier of fact
could have found the essential elements of the crime beyond
10
State v. Dady, 304 Neb. 649, 936 N.W.2d 486 (2019).
11
See Pantano, supra note 7.
12
State v. Briggs, 303 Neb. 352, 929 N.W.2d 65 (2019).
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STATE v. FERRIN
Cite as 305 Neb. 762
a reasonable doubt. 13 An appellate court does not resolve
conflicts in the evidence, pass on credibility of witnesses, or
reweigh the evidence; such matters are for the finder of fact. 14
(a) Obstructing Peace Officer
[9-12] We begin by identifying the material elements the
State must prove to show a violation of § 28-906(1). To
determine the elements of a crime, we look to the text of the
statute. 15 And when analyzing the text of a criminal statute,
we follow settled principles of statutory construction. Penal
statutes are considered in the context of the object sought to be
accomplished, the evils and mischiefs sought to be remedied,
and the purpose sought to be served. 16 Effect must be given,
if possible, to all parts of a penal statute; no sentence, clause,
or word should be rejected as meaningless or superfluous if it
can be avoided. 17 And in the absence of anything indicating
otherwise, statutory language is to be given its plain and ordi-
nary meaning. 18
[13] Under the plain language of the statute, to show a
violation of § 28-906(1), the State must prove that (1) the
defendant intentionally obstructed, impaired, or hindered either
a peace officer, a judge, or a police animal assisting a peace
officer; (2) at the time the defendant did so, the peace officer
or judge was acting under color of his or her official author-
ity to enforce the penal law or preserve the peace; and (3) the
defendant did so by using or threatening to use either violence,
force, physical interference, or obstacle.
On appeal, Ferrin does not argue there was insufficient
evidence to establish the first two of these elements. Rather,
13
State v. Olbricht, 294 Neb. 974, 885 N.W.2d 699 (2016).
14
Id.
15
State v. Mann, 302 Neb. 804, 925 N.W.2d 324 (2019).
16
Id.
17
Id.
18
State v. Stanko, 304 Neb. 675, 936 N.W.2d 353 (2019).
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Cite as 305 Neb. 762
his insufficiency argument is focused on the third element,
which addresses the proscribed conduct. We limit our analysis
accordingly.
(i) Proscribed Conduct
[14] Section 28-906(1) does not proscribe all conduct that
intentionally obstructs, impairs, or hinders officers who are
acting under color of their authority to either enforce the
penal law or preserve the peace. Instead, it proscribes only
conduct that involves using or threatening to use “violence,
force, physical interference, or obstacle.” We have rejected
the suggestion that these statutory terms are unconstitutionally
vague, finding instead that they are commonly used words
and are understandable by those of ordinary intelligence. 19
[15] We have consistently recognized that evidence show-
ing a defendant resisted handcuffing, struggled with an officer,
and continued to resist restraint is alone sufficient to sustain a
conviction for obstructing a peace officer. 20 But here, the State
generally concedes that Ferrin’s conduct during the traffic
stop did not involve using or threatening to use either violence
or force. We agree, and we confine our analysis to whether the
record contains sufficient evidence that Ferrin used or threat-
ened to use either “physical interference” or “obstacle” within
the meaning of § 28-906(1). Nebraska’s appellate courts have
considered these terms in several cases.
This court first considered the meaning of the phrase
“physical interference, or obstacle” as used in § 28-906(1)
in the 1987 case In re Interest of Richter. 21 In that case,
two uniformed officers responded to a domestic disturbance
call requesting police assistance in removing a disruptive
youth from a home. When officers arrived, the youth was
19
State v. Lynch, 223 Neb. 849, 394 N.W.2d 651 (1986).
20
State v. Campbell, 260 Neb. 1021, 620 N.W.2d 750 (2001); Lynch, supra
note 19.
21
In re Interest of Richter, 226 Neb. 874, 415 N.W.2d 476 (1987).
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arguing, cursing, and yelling, and officers told him he would
be taken to a youth shelter for the evening. While officers
were escorting the youth for transport, he ran away. They
pursued him on foot and eventually located him an hour later,
at which point he tried to run from the officers a second time.
Based on these events, the State alleged the youth was within
the jurisdiction of the juvenile court because he committed
an act which would constitute a violation of § 28-906(1). 22
In response, the youth argued that to prove a violation
of § 28-906(1), the State had to show he used or threat-
ened to use “some physical means to thwart the officers” 23
that involved more than simply running away from police.
We disagreed.
[16] We gave § 28-906(1) its plain and ordinary meaning,
and reasoned that even if the word “physical” modified both
“interference” and “obstacle,” the act of running away from
police interposed a physical obstacle that obstructed, impaired,
or hindered the officers’ efforts to preserve the peace. 24
Ten years later, we decided State v. Yeutter. 25 In that case,
city police discovered Edwin Yeutter’s dog running at large in
violation of a city ordinance, and an officer went to Yeutter’s
home to issue a citation. Yeutter refused to provide his iden-
tifying information, and the officer could not complete the
citation. When Yeutter was told that if he did not cooperate,
he would be arrested for obstructing an officer, he held out
his arms and said, “‘[G]o ahead and take me.’” 26 The officer
22
See, generally, Neb. Rev. Stat. § 43-247(1) (Reissue 2016).
23
In re Interest of Richter, supra note 21, 226 Neb. at 876, 415 N.W.2d at
478.
24
In re Interest of Richter, supra note 21. Accord U.S. v. Sledge, 460 F.3d
963 (8th Cir. 2006) (under Nebraska law, mere act of running away from
law enforcement officers constitutes physical interference or obstacle
within meaning of § 28-906(1)).
25
State v. Yeutter, 252 Neb. 857, 566 N.W.2d 387 (1997).
26
Id. at 859, 566 N.W.2d at 390.
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instructed him to put his hands on a nearby car, Yeutter
refused, and a physical struggle ensued. During the struggle,
Yeutter grabbed the officer’s baton, grabbed the officer’s
handcuffs, bit the officer’s finger, and generally resisted being
taken into custody and placed in the police cruiser.
Yeutter was convicted for assaulting an officer, resisting
arrest, and obstructing a peace officer. The Nebraska Court
of Appeals, in a memorandum opinion filed on December
18, 1996, in case No. A-96-255, reversed the conviction for
obstructing a peace officer and otherwise affirmed. We granted
Yeutter’s petition for further review to determine just one
question: whether he was entitled to a jury instruction on
self-defense.
But before we addressed that question, we described
Yeutter’s arrest for obstructing a peace officer as “an illegal
arrest,” 27 noting that at the time the officer attempted to place
him under arrest for obstruction, Yeutter had not “used or
threatened to use violence or force or physically interfered with
the officer.” 28 We then went on to state that “the mere verbal
refusal to provide information to an officer does not constitute
an obstacle to the enforcement of the penal laws as contem-
plated by § 28-906. There must be some sort of physical act in
order for a violation of this statute to occur.” 29 These proposi-
tions of law, while dicta, have been cited by both the Nebraska
Court of Appeals and the U.S. District Court for the District of
Nebraska. 30 We therefore conclude it is necessary to revisit our
statements in Yeutter to ensure they comport with the statutory
language of § 28-906(1).
27
Id. at 861, 566 N.W.2d at 391.
28
Id.
29
Id. at 862, 566 N.W.2d at 391.
30
See, Deezia v. City of Lincoln, 350 F. Supp. 3d 868 (D. Neb. 2018); State
v. Ellingson, 13 Neb. Ct. App. 931, 703 N.W.2d 273 (2005); State v. Owen, 7
Neb. Ct. App. 153, 580 N.W.2d 566 (1998).
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The plain language of § 28-906(1) makes it a crime not just
to use violence, force, physical interference, or obstacle, but
also to threaten to do so. Consequently, while Yeutter correctly
observed that “the mere verbal refusal to provide information
to an officer does not constitute an obstacle to the enforce-
ment of the penal laws as contemplated by § 28-906,” 31 our
opinion was imprecise when it went on to state that “some sort
of physical act” 32 is always required. Because threats can be
expressed verbally as well as through gestures and physical
acts, 33 our language in Yeutter was too restrictive, and it failed
to give effect to all of the statutory language the Legislature
included in § 28-906(1).
[17] We now clarify that the proper inquiry under § 28-906(1)
is not whether a defendant has engaged in “some sort of physi-
cal act,” but, rather, whether a defendant’s conduct, however
expressed, used or threatened to use either violence, force,
physical interference, or obstacle to intentionally obstruct,
impair, or hinder a peace officer or judge who was acting to
either enforce the penal law or preserve the peace under color
of his or her official authority.
(ii) Sufficient Evidence of
Proscribed Conduct
Ferrin argues the evidence at trial was insufficient to
show he used or threatened to use physical interference or
obstruction. He describes his conduct as “merely refus[ing]
to come back and talk to the officers” 34 when requested to
do so, and he equates such conduct with “the mere verbal
refusal to provide information to an officer,” which we stated
31
Yeutter, supra note 25, 252 Neb. at 862, 566 N.W.2d at 391.
32
Id.
33
See Owen, supra note 30 (holding no clear error in jury instruction stating
“obstacle” under § 28-906(1) could be either verbal or physical).
34
Brief for appellant at 19.
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in Yeutter was insufficient to constitute an “obstacle” under
§ 28-906.
The State argues Yeutter is inapplicable because Ferrin’s
conduct involved more than just a mere verbal refusal to
provide information. The State generally describes Ferrin’s
conduct as a series of defiant refusals to exit his vehicle
that presented an obstacle to the officers’ investigation under
§ 28-906(1).
[18,19] It is well settled that officers making a traffic stop
may order the driver and passengers to get out of the vehicle
pending completion of the stop. 35 Here, when officers ordered
Ferrin to get out of the truck, he repeatedly refused to comply
and instead defiantly remained inside the truck. This conduct
did not involve using violence or force. However, a reason-
able jury could find that evidence that a defendant repeatedly
refused to comply with police orders to exit a vehicle during
a traffic stop is sufficient to show the use of either “physical
interference” or “obstacle” under § 28-906(1).
The terms “interference” and “obstacle” have similar mean-
ings. Used in its common and ordinary sense, the word “inter-
ference” means “[t]he action or fact of interfering or inter-
meddling (with a person, etc., or in some action).” 36 Similarly,
“obstacle” means “[s]omething that stands in the way or
that obstructs progress (literal and figurative); a hindrance,
impediment, or obstruction.” 37 Given the commonly under-
stood meaning of these terms, a reasonable fact finder could
conclude that Ferrin’s conduct in repeatedly refusing to com-
ply with police orders to exit his truck during a traffic stop
35
See Maryland v. Wilson, 519 U.S. 408, 117 S. Ct. 882, 137 L. Ed. 2d 41
(1997).
36
“Interference,” Oxford English Dictionary Online, http://www.oed.com/
view/Entry/97762 (last visited Apr. 30, 2020).
37
“Obstacle,” Oxford English Dictionary Online, http://www.oed.com/view/
Entry/129940 (last visited Apr. 30, 2020).
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amounted to using either “physical interference, or obstacle”
under § 28-906(1). And although we are mindful that cases
from other jurisdictions apply different statutory language,
this holding is in accord with decisions from other state and
federal courts which hold that refusal to comply with an offi-
cer’s requests to exit the vehicle during a traffic stop can sup-
port an arrest or conviction for obstruction. 38
Here, the evidence showed the traffic stop was part of
an active police investigation of a reported domestic dis-
pute involving possible domestic violence and sexual assault
crimes. As part of that investigation, Ferrin was repeatedly
asked to step out of his truck so officers could question him,
and he repeatedly refused to comply with those requests,
even after being told the nature of the investigation and being
advised that he could be charged with a crime if he did not
comply. Viewed in the light most favorable to the prosecu-
tion, this evidence was sufficient for a rational trier of fact to
find that Ferrin used “physical interference, or obstacle” to
intentionally obstruct, impair, or hinder the officers in their
investigation.
38
See, e.g., Skube v. Koester, 120 F. Supp. 3d 825 (C.D. Ill. 2015) (prolonged
refusal to comply with police orders to exit vehicle can constitute crime
of obstruction); Taylor v. State, 326 Ga. App. 27, 755 S.E.2d 839 (2014)
(evidence sufficient to prove obstruction when, among other things,
defendant refused police orders to exit truck during investigation and
instead locked door); State v. Orr, 157 Idaho 206, 335 P.3d 51 (Idaho
App. 2014) (evidence sufficient to support conviction for obstruction
where suspect refused police requests to exit vehicle); People v. Synnott,
349 Ill. App. 3d 223, 811 N.E.2d 236, 284 Ill. Dec. 941 (2004) (defendant
knowingly obstructed police investigation by repeatedly refusing orders
to exit vehicle); Wilson v. Village of Los Lunas, 572 F. Appx. 635 (10th
Cir. 2014) (refusing officer’s requests to exit vehicle during traffic stop
provided probable cause to arrest for obstructing officer); United States
v. Thomas, No. 97-4827, 1998 WL 852951 (4th Cir. Dec. 10, 1998)
(unpublished disposition listed in table of “Decisions Without Published
Opinions” at 166 F.3d 336 (4th Cir. 1998)) (refusing orders to exit vehicle
constituted resisting, delaying, or obstructing officer).
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Finding sufficient evidence to support the jury’s verdict, we
reject Ferrin’s third assignment of error.
V. CONCLUSION
For the foregoing reasons, the district court correctly
affirmed the judgment of the county court, and we likewise
affirm the judgment of the district court.
Affirmed. | 01-03-2023 | 05-15-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/5902546/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Owens, J.), rendered May 22, 1986, convicting him of attempted robbery in the second degree, upon his plea of guilty, and imposing sentence.
Ordered that the judgment is affirmed, and the matter is remitted to the Supreme Court, Kings County, for further proceedings pursuant to CPL 460.50 (5).
*698The defendant contends that the court erroneously adjudicated and sentenced him as a second felony offender because his 1971 predicate felony conviction was obtained in violation of his constitutional right to a public trial. In the 1971 case, the trial court summarily closed the courtroom during the testimony of an undercover officer after a request from the prosecutor to take judicial notice of the jeopardy such agents are subjected to by reason of their occupation. On the defendant’s direct appeal from the 1971 judgment of conviction, that issue was raised and rejected, on the merits, by a majority of this court (see, People v Catalanotte, 41 AD2d 968) and by the Court of Appeals (see, People v Catalanotte, 36 NY2d 192). Subsequently, in People v Jones (47 NY2d 409, cert denied 444 US 946), the Court of Appeals held that it was reversible error to summarily close the courtroom merely because a witness was an undercover officer. In requiring a factual showing that an exception to the norm of a public trial was justified, the Court of Appeals declared a new constitutional rule of criminal procedure, i.e., "no closing can be tolerated that is not preceded by an inquiry careful enough to assure the court that the defendant’s right to a public trial is not being sacrificed for less than compelling reasons” (People v Jones, supra, at 414-415). Whether the sentencing court, in adjudicating the defendant a second felony offender, correctly concluded that the defendant was collaterally estopped from contending that his prior conviction was violative of his constitutional right to a public trial in a proceeding pursuant to CPL 400.21 (7) (b), is dependent upon the degree of retroactivity to be accorded the Jones rule.
"[T]he Constitution neither prohibits nor requires [that] retrospective effect” be given to any new constitutional rule (Linkletter v Walker, 381 US 618, 629; see, United States v Johnson, 457 US 537, 542). Under the historic common-law doctrine, "a case decided on direct appeal always received the benefit, or detriment, of any decisional law 'pronounced’ before its judgment became final * * * However, once a judgment had become final, it was not affected by law freshly 'pronounced’ thereafter” (People v Morales, 37 NY2d 262, 268; People ex rel. Julio v Walters, 88 AD2d 259, 263, appeal dismissed 58 NY2d 881). During the 1960’s, the United States Supreme Court, especially in cases involving deprivations of constitutional due process rights under the Fourteenth Amendment in criminal cases, began to employ retroactivity in expanded and varied forms. In some cases, it enlarged upon the traditional application to permit collateral attack on *699judgments of conviction which had long been final (i.e., complete retroactivity). In others, it adhered to the common-law rule of applicability only to judgments still pending on direct appeal, and in still others, the new rule was to apply prospectively only to cases as yet untried (see, People v Morales, supra, at 267-268).
When a decision of the court merely applies settled precedents to new and different factual situations, the decision is generally accorded retroactivity because it has not altered the rule of the earlier case in any material way. Conversely, when a new rule of criminal procedure is a "clear break with the past” (Desist v United States, 394 US 244, 248), courts almost invariably have found such a "newly minted principle nonretroactive”, unless full retroactivity is a necessary adjunct to a ruling that a trial court lacked authority to convict or punish a criminal defendant in the first place (United States v Johnson, supra, at 549). More recently, the United States Supreme Court rejected the "clear break with the past” exception for applying a new rule for the conduct of criminal prosecutions prospectively only, and held that a rule should apply retroactively to cases on direct review at the time it was announced (see, Griffith v Kentucky, 479 US 314, —, —, 107 S Ct 708, 716).
While the Court of Appeals in People v Jones (47 NY2d 409, supra) did not announce an entirely new and unanticipated principle of law (see, People v Boyd, 59 AD2d 558; People v Castro, 63 AD2d 891), it did resolve a previously unsettled point of law (see, e.g., People v Garcia, 51 AD2d 329, affd 41 NY2d 861) pertaining to "the methodology by which a court was to go about the business of determining whether the facts underlying the [closure] application fell within the standards enunciated in the cases [construing the right to a public trial]” (People v Jones, supra, at 414). Consequently, the Jones rule falls within the middle of two extreme categories; it is neither a decision which merely explicates settled precedents to new and different factual situations, nor is the decision a clear break with the past. Since the Jones rule falls within an intermediate position, retroactivity is more appropriately restricted to cases still on direct review at the time the change in the law occurred. A review of case law discloses that appellate courts have applied the common-law doctrine of retroactivity and have given the Jones rule retroactive application to all cases on direct review at the time Jones was decided (see, People v Brown, 79 AD2d 659; People v Gonzalez, 74 AD2d 928; People v Cousart, 74 AD2d 877; People v McNa*700mee, 71 AD2d 559). However, we cannot say that the Jones rule had such a fundamental impact on the integrity of the fact-finding process as to compel complete retroactivity. Absent manifest injustice, the defendant is not entitled to benefit from the change in the law (see, People v Pepper, 53 NY2d 213, cert denied 454 US 967). Accordingly, the sentencing court properly adjudicated and sentenced the defendant as a second felony offender (cf., Burgett v Texas, 389 US 109, 114). Mollen, P. J., Brown, Rubin and Kunzeman, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902547/ | Appeal by the defendant from a judgment of the Supreme Court, Queens County (Pitaro, J.), rendered March 18, 1985, convicting him of robbery in the first degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
The defendant claims that the jury verdict was repugnant, because he was convicted of robbery in the first degree but acquitted of criminal possession of a weapon in the second degree. In examining this question under the guidelines set forth in People v Tucker (55 NY2d 1, 4, rearg denied 55 NY2d 1039), we must determine if the verdict is "inherently inconsistent when viewed in light of the elements of each crime as charged to the jury”. Rather than reviewing the entire record in an effort to second-guess the jury, the review is limited to examination of the jury charge.
The charge in the case at bar accurately laid out the elements of the two crimes in question. One of the elements in the charge on robbery in the first degree was that the defendant displayed what appeared to be a pistol as testified to by the People’s witness. Among the elements of criminal possession of a weapon in the second degree were that the defendant possessed a certain object and this object was in fact a loaded firearm.
It is apparent from the jury charge and the subsequent verdict that the jury believed that the People had not proven that the defendant carried a loaded firearm, but that he carried something which appeared to be a pistol. The jury’s verdict is therefore not repugnant.
The defendant’s remaining claim of error deals with the adequacy of the court’s identification charge. The claim is, however, unpreserved. In any event, the claim is without merit since the charge complied, in all respects, with the dictates of People v Daniels (88 AD2d 392, 401, 402). Brown, J. P., Rubin, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902548/ | *402Order, Supreme Court, New York County (Carol R. Edmead, J.), entered March 4, 2011, which granted plaintiffs’ motion for summary judgment declaring that defendant Lincoln General Insurance Company has a duty to defend East 51st Street Development Company, LLC and to reimburse Illinois Union Insurance Company for past defense costs in the underlying crane collapse litigation from the date of the crane collapse (Mar. 15, 2008) to the date that Lincoln General exhausted its policy limits, and so declared; granted plaintiffs’ motion for summary judgment declaring that defendant AXIS Surplus Insurance Company has a duty to defend East 51st Street and to reimburse Illinois Union for past defense costs and to pay all future defense costs in the crane-collapse litigation, and so declared; granted Lincoln General’s motion for summary judgment declaring that its policy is excess to the AXIS policy and that AXIS owes a primary duty to pay all or a portion of East 51st Street’s defense costs, and so declared; granted Lincoln General’s motion for summary judgment declaring that defendant Interstate Fire and Casualty Company is obligated to provide primary coverage to East 51st Street and so declared; denied AXIS’s motion for summary judgment declaring that it has no duty to defend; and denied Interstate’s motion for summary judgment dismissing the complaint and Lincoln General’s cross claims against it, unanimously modified, on the law, to deny Lincoln General’s motions for summary judgment declaring that its policy is excess to the AXIS and Interstate policies, to vacate those declarations, and to declare that Lincoln General is obligated to provide primary coverage to East 51st Street, and that Interstate has no duty to defend or provide coverage in the litigation, and otherwise affirmed, without costs.
On March 15, 2008, a crane collapsed at a construction site on East 51st Street in Manhattan, causing the deaths of six construction workers and a pedestrian, injury to several other individuals, and extensive damage to property. Multiple claims for bodily injury and property damage were brought against plaintiff East 51st Street, the owner of the property on which the accident occurred, Reliance Construction Ltd., the construction manager on the project, and Joy Contractors, Inc., the superstructure subcontractor, whose employee was operating the crane at the time of the accident.
*403As is undisputed, the insurance policies issued by AXIS and Interstate to Reliance and the policy issued by Lincoln General to Joy were primary to the policy issued by Illinois Union to East 51st Street. AXIS, Interstate and Lincoln General therefore are obligated to reimburse Illinois Union for defense costs. Although Illinois Union had already taken up East 51st Street’s defense, its intent to seek contractual indemnification from Reliance and Joy created a potential conflict between East 51st Street and Lincoln General, giving East 51st Street the right to obtain independent counsel (see 69th St. & 2nd Ave. Garage Assoc, v Ticor Tit. Guar. Co., 207 AD2d 225, 227 [1st Dept 1995], lv denied 87 NY2d 802 [1995]).
The “Supplementary Payments” provision of the AXIS policy issued to Reliance states that “[w]e will pay, with respect to any claim we investigate or settle, or any ‘suit’ against an insured we defend[ ] . . . [a]ll expenses we incur,” and that “[t]hese payments will reduce the limits of insurance.” However, the amended insuring agreement of the policy provides that AXIS’s “duty to defend ends when [AXIS has] used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B [i.e., damages].” The ambiguity as to whether “expenses” includes defense costs that result from these conflicting provisions must be construed against AXIS (see 242-44 E. 77th St., LLC v Greater N.Y. Mut. Ins. Co., 31 AD3d 100, 105 [1st Dept 2006]). We therefore conclude that the policy does not provide for defense within limits, which undermines AXIS’s argument that the policy limits had been eroded, and that AXIS is obligated to share in the costs of the defense of East 51st Street, an “additional insured” on the policy (see Pecker Iron Works of N.Y. v Traveler’s Ins. Co., 99 NY2d 391, 393 [2003]).
Interstate’s contention that East 51st Street is not listed on the additional insured endorsement or the declarations page of the policy issued to Reliance does not avail it since it admitted in its answer that East 51st Street was an additional insured under that policy. Contrary to Interstate’s further contention, since East 51st Street never filed any claims against Interstate in the related federal action brought by Reliance’s excess liability carrier, and filed all its claims against Interstate in this state action, it did not engage in “claims splitting” (see Emery Roth & Sons v National Kinney Corp., 44 NY2d 912 [1978]; 67-25 Dartmouth St. Corp. v Syllman, 29 AD3d 888 [2d Dept 2006]).
However, Interstate has demonstrated that its policy was exhausted upon its July 2009 settlement with Reliance of the *404declaratory judgment action commenced in federal court which sought defense and indemnity for several lawsuits relating to the crane accident. The settlement agreement clearly states that Interstate’s payment of $1 million to Reliance was in settlement of all of Interstate’s indemnification and defense obligations under the policy and that the settlement “exhausts all potentially applicable Interstate Policy limits and all coverages.” The motion court found no indication that the settlement had been entered into as a means to inappropriately exhaust the policy and there is no basis, given the express terms of the settlement agreement, for the motion court’s conclusion that the $1 million constitutes reimbursement to Reliance of “Supplementary Payments” under the supplementary payments provision.
As we have concluded that Interstate’s policy was exhausted by the $1 million settlement, we need not reach the motion court’s determination that any failure by Reliance to comply with the conditional coverage endorsement affects Reliance, triggering the liability limitation of $200,000, but does not necessarily affect East 51st Street. Were we to reach this, we would find that the policy clearly provides that failure by the named insured to comply with conditions of that endorsement will reduce the limits of coverage for “all insureds” and, accordingly, any failure of Reliance to comply with the contractors’ conditional endorsement would reduce the coverage for Reliance as well as its additional insureds (see Robert Pitt Realty, LLC v 19-27 Orchard St., LLC, 101 AD3d 404, 405 [1st Dept 2012] [whether additional insured “is entitled to coverage will generally turn on whether (the named insured) is entitled to coverage”]; see also DRK, LLC v Burlington Ins. Co., 74 AD3d 693, 694 [1st Dept 2010], lv denied 16 NY3d 702 [2011] [separation of insureds provision “does not negate bargained-for exclusions, or otherwise expand, or limit, coverage”]).
We find that, pursuant to the “Other Insurance” provision in the AXIS, Lincoln General and Interstate policies, the insurance provided to East 51st Street, an additional insured on those policies, is primary (see Sport Rock Intl., Inc. v American Cas. Co. of Reading, Pa., 65 AD3d 12, 18 [1st Dept 2009]). Our conclusion is not altered by the “Additional Insured” endorsement in the AXIS policy, which provides that “such insurance as is afforded by this policy for the benefit of [East 51st Street] shall be primary insurance as respects any claim, loss or liability arising out of [Reliance’s] operations, and any other insurance maintained by [East 51st Street] shall be excess and non-contributory with the insurance provided hereunder.” A *405reasonable business person would understand the term “insurance maintained by” to refer to insurance actually procured by East 51st Street (the Illinois Union policy), rather than afforded it as an additional insured.
Although, as Interstate points out, a low premium suggests that a policy may not be primary, it is not conclusive (see State Farm Fire & Cas. Co. v LiMauro, 65 NY2d 369, 376 [1985]). The language of the Interstate policy does not establish the policy as a pure excess policy (compare Tishman Constr. Corp. of NY. v Great Am. Ins. Co., 53 AD3d 416, 420 [1st Dept 2008]). Concur—Friedman, J.P., DeGrasse, Freedman and AbdusSalaam, JJ.
The decision and order of this Court entered herein on April 3, 2012 (94 AD3d 420 [2012]) is hereby recalled and vacated (see 2013 NY Slip Op 63651[U] [decided simultaneously herewith]). | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902549/ | Appeal by the defendant from a judgment of the Supreme Court, Suffolk County (Mclnerney, J.), rendered July 17, 1985, convicting him of criminal sale of a controlled substance in the third degree, upon a jury verdict, and imposing sentence. The appeal brings up for review the denial, after a hearing, of those branches of the defendant’s omnibus motion which were to dismiss the indictment and to suppress identification testimony.
Ordered that the judgment is affirmed, and the matter is remitted to the Supreme Court, Suffolk County, for further proceedings pursuant to CPL 460.50 (5).
In June 1984, in response to numerous complaints from residents of Wyandanch, Long Island, that their community was becoming an open drug market, a Suffolk County police officer conducted an undercover operation and investigation during which he made numerous purchases of illegal drugs from people in the area with the aid of several confidential informants. The operation ended in January 1985 and resulted in 17 arrests, all made in early January 1985. One of those arrested was the defendant Richard Connor, a New York City Department of Correction officer assigned to C-95 on Rikers Island. On June 3, 1984, in the presence of a confidential informant, the defendant sold $25 worth of cocaine to an undercover officer outside of LaRosa’s Bar in Wyandanch.
After his arrest and indictment, the defendant moved to dismiss the charge on the ground that the seven-month delay between the crime and his arrest deprived him of his constitutional right to due process of law. He claimed that he had been severely prejudiced in his ability to defend himself due to the lapse of time and the fact that he and his alibi witnesses’ recollections of the night in question had faded. In addition, the defendant claimed that LaRosa’s Bar had closed making it tremendously difficult for him to locate any other potential witnesses. The defendant was granted a hearing pursuant to People v Townsend (38 AD2d 569).
At the hearing, the undercover officer testified that it was necessary to delay making arrests until his investigation was completed because in a small community such as Wyandanch, there was a likelihood that drug dealers and informants would be known to each other and the arrest of one person would risk revealing the operation and endangering the lives of the undercover officer and his informants. The defendant’s witness at the hearing was the former part owner of LaRosa’s Bar *702who testified that she had been unable to locate any potential witnesses for the defendant.
We agree with the hearing court’s conclusion that the seven-month delay between the crime and the defendant’s arrest was not unreasonably lengthy, and it was not undertaken for any improper purpose, but, rather, had a good-faith basis and did not result in any demonstrable prejudice to the defendant. In fact, at trial the defendant and his witnesses testified in detail about their activities on the date in question.
The defendant’s motion to suppress his in-court identification by the undercover officer as tainted by a prior suggestive precinct showup was properly denied. The officer’s prearraignment viewing of the defendant on the night of his arrest was not an identification procedure but merely a confirmation that the right man had been arrested (see, People v Morales, 37 NY2d 262; People v Rubio, 118 AD2d 879).
Contrary to the defendant’s contention, we find that the evidence was legally sufficient to support the guilty verdict (see, People v Contes, 60 NY2d 620), and further, upon the exercise of our factual review power, we are satisfied that the verdict was not against the weight of the evidence (CPL 470.15 [5]).
We find the defendant’s remaining contention that a portion of the courts’ charge was erroneous is unpreserved and, in any event is without merit. Lawrence, J. P., Kunzeman, Kooper and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902550/ | by the defendant from a judgment of the County Court, Nassau County (Goodman, J.), rendered December 3, 1984, convicting him of murder in the second degree and robbery in the first degree (two counts), upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
We find unpersuasive the defendant’s contention that the trial court should have admitted into evidence, as declarations against penal interest, several gratuitous hearsay statements made by one of his codefendants during a plea allocution and in a subsequently written document, which statements were of an exculpatory nature with regard to the defendant. Initially, we note that those statements which the defendant sought to introduce did not constitute an integral part of his codefendant’s plea allocution, nor was their content clearly opposed to the declarant’s interest (see, e.g., People v Brensic, 70 NY2d 9, 16; People v Maerling, 46 NY2d 289, 298-299; People v Thomp*703son, 129 AD2d 655; People v Nicholson, 108 AD2d 929). Moreover, the proffered statements were patently unreliable and were not supported by independent evidence of their trustworthiness so as to qualify as declarations against penal interest (see, e.g., People v Brensic, supra; People v Abdullah, 134 AD2d 503).
We further reject the defendant’s claim that the court erred in failing to properly instruct the jurors concerning the evaluation of accomplice testimony. A review of the language employed by the court in its instructions amply demonstrates that the finders of fact were apprised of the requirement that accomplice testimony must be corroborated by independent, nonaccomplice evidence tending to connect the defendant with the commission of the crime (see, CPL 60.22 [1]).
Viewing the evidence in the light most favorable to the prosecution (see, People v Contes, 60 NY2d 620), we find the evidence was legally sufficient to establish the defendant’s guilt. Moreover, upon the exercise of our factual review power, we are satisfied that the verdict was not against the weight of the evidence (CPL 470.15 [5]).
We have considered the defendant’s remaining contentions and find them to be without merit. Lawrence, J. P., Kunzeman, Kooper and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902687/ | Order, Family Court, Bronx County (Karen I. Lupuloff, J.), entered on or about June 28, 2011, which, insofar as appealed from, determined that respondent father’s consent was not required for the adoption of the subject child, unanimously affirmed, without costs.
The mother and the caseworker testified that the father did not provide any financial support for the child, although he was receiving Supplemental Security Income, and that he did not contact or communicate with the child at any time (see Domestic Relations Law § 111 [1] [d]; Matter of Phajja Jada S. [Toenor Ann S], 86 AD3d 438 [1st Dept 2011], lv denied 17 NY3d 716 [2011]). There exists no basis to disturb the court’s rejection of the father’s unsubstantiated accounts of the financial support he provided to the child’s caretakers (see Matter of Irene O., 38 NY2d 776 [1975]), and, even by the father’s own account, his contact with the child over a number of years was substantially nonexistent. Concur—Tom, J.E, Sweeny, Moskowitz, ManzanetDaniels and Gische, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902552/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Maraño, J.), rendered May 18, 1984, convicting him of criminal possession of a weapon in the third degree, upon his plea of guilty, and imposing sentence. The appeal brings up for review the denial, after a hearing, of that branch of the defendant’s omnibus motion which was to suppress narcotics and a gun.
Ordered that the judgment is affirmed.
The information supplied to the arresting officers by a reliable informant, coupled with the officers’ observations, gave them reasonable suspicion to believe that the defendant was engaged in criminal activity and allowed them to detain the defendant and ask for his license and registration (see, People v Sobotker, 43 NY2d 559; Pennsylvania v Mimms, 434 US 106; People v Russ, 61 NY2d 693, 694; People v Olsen, 93 AD2d 824). The officers then saw four aluminum packets, in plain view in the back of the car, which they knew from experience were commonly used as containers for illegal drugs. Since there was probable cause to arrest the defendant, *704the subsequent search of the car’s trunk, which resulted in the discovery of a gun, was proper (see, People v Vereb, 122 AD2d 897, 900; People v Brown, 116 AD2d 727). Mangano, J. P., Thompson, Bracken and Spatt, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902553/ | Appeal by the defendant from a judgment of the Supreme Court, Queens County (O’Dwyer, J.), rendered September 23, 1982, convicting him of attempted murder in the first degree (two counts), upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
On June 25, 1981, Police Officers Nunns and Hofelich received a radio transmission directing them to an address in Queens where a man was reported to be harassing two women with a gun. The uniformed officers proceeded to that address and knocked on the door. In response to an occupant’s query, the officers identified themselves as police officers. After a brief pause, the door of the apartment abruptly swung open revealing a man holding a shotgun which pointed towards the floor. Before the officers could draw their own weapons or take cover, the defendant raised the gun to shoulder level and aimed it at their heads. Officer Hofelich saw the defendant’s hands near the trigger housing of the gun and heard a sound he associated with the trigger being pulled on a gun that misfires. Although Officer Nunns’s eyes were transfixed on the barrel of the gun, he heard the familiar click of a trigger being pulled. The defendant’s female companion testified that she watched as the defendant jumped up and back while pulling the trigger with his right forefinger. She also heard the resultant metallic click. The shotgun, however, failed to fire. As the officers retreated in an attempt to protect themselves, the defendant escaped out of a rear window, taking the gun with him.
Contrary to the defendant’s contentions, the record discloses that there was more than legally sufficient evidence to sustain the jury’s verdict convicting the defendant of two counts of attempted murder in the first degree (see, Penal Law § 125.27 [1]; § 110.00; see also, People v Perez, 64 NY2d 868). The jury was entitled to find that the defendant intended to murder the uniformed police officers based on the testimony that he aimed the gun at their heads, pulled the trigger hard enough so that three eyewitnesses heard the resultant click, jumped up and back in anticipation of the force of the discharge, and fled when the gun failed to discharge. It is no defense to a *705prosecution for an attempt to murder a police officer that the crime was factually impossible because the gun malfunctioned (see, Penal Law § 110.10). Although the defendant may not have succeeded in his purpose, his conduct came " 'within dangerous proximity to the criminal end to be attained’ ” and was sufficient to support a conviction for attempted murder (People v Bracey, 41 NY2d 296, 300, rearg denied 41 NY2d 1010).
In addition, we find that the sanction imposed on the People by the trial court as a penalty for the inadvertent destruction of the gun constituted a proper exercise of discretion and minimized the prejudice, if any, to the defendant (see, People v Bay, 67 NY2d 787; People v Shapiro, 117 AD2d 688, 689, lv denied 67 NY2d 950). The suppression of the ballistics reports and the preclusion of expert testimony resulted in the dismissal of one count of the indictment and acquittal on another involving weapons possession. More importantly, the absence of the gun from the trial had no bearing on the question of the defendant’s innocence or guilt of attempted murder. Nor is there any evidence of bad faith on the part of the law enforcement officials. The defendant’s inaction in failing to inspect the gun prior to trial further negates any claim of prejudice since the gun was not an essential element in the preparation of the defendant’s trial strategy (see, People v Reed, 44 NY2d 799; People v Wagstaff, 107 AD2d 877, 879, appeal dismissed 66 NY2d 613). Under the circumstances of this case, the trial court did not abuse its discretion in declining to dismiss the indictment (see, People v Kelly, 62 NY2d 516; People v Shapiro, supra, at 689).
We further agree with the determination of the trial court that viewing the evidence in the light most favorable to the defendant, no reasonable view of the evidence warranted the submission of the defense of extreme emotional disturbance to the jury (see, Penal Law § 125.25 [1] [a]; § 25.00 [1]). There was no evidence of a loss of self-control or of a reasonable excuse for such an emotional state (cf., People v Moye, 66 NY2d 887; People v Casassa, 49 NY2d 668, 679, cert denied 449 US 842). The fact that the defendant and his female companion argued prior to the arrival of the police is insufficient to give substance to the defense that the defendant acted under extreme emotional disturbance. Nor does the fact that the defendant may have used drugs in the past and smelled of liquor at the time of the incident bear on the defense (see, People v Knights, 109 AD2d 910).
We have considered the defendant’s remaining contentions *706and find them to be without merit. Lawrence, J. P., Kunzeman, Kooper and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902554/ | *406Order and judgment (one paper), Supreme Court, New York County (Jane S. Solomon, J.), entered November 1, 2011, granting the petition to the extent it sought an order directing respondent, under the Freedom of Information Law (Public Officers Law § 84 et seq.) (FOIL), to provide an electronic copy of a database, as redacted, of names and addresses of New York City residents who have been granted handgun licenses, and a database, to be redacted, of hate crimes reported to respondent from January 1, 2005 to the present, and denying the petition to the extent it sought an order directing respondent to provide an electronic copy of its crime incident database, a declaration that respondent’s practices in responding to FOIL requests violate the statute, and an order directing respondent to cease these practices, unanimously modified, on the law, to deny the petition as to the databases of handgun licensees and hate crimes and to reinstate the petition with respect to the demand for the crime incident database, insofar as it seeks production of the electronic crime incident database produced in Floyd v City of New York (2008 WL 4179210, 2008 US Dist LEXIS 68798 [SD NY, Sept. 10, 2008, No. 08 Civ 01034 (SAS)]) (the Floyd database), and the matter remitted to Supreme Court for a determination of whether production of the Floyd database should be ordered, and, if so, to what extent and under what conditions, and otherwise affirmed, without costs.
The court correctly declined to declare that respondent’s responses to FOIL requests and rulings on administrative appeals are as a matter of practice untimely and to order respondent to cease this practice. The FOIL requester’s statutory remedy for an untimely response or ruling is to deem the response a denial and commence a CPLR article 78 proceeding “for review of such denial” (Public Officers Law § 89 [4] [a], [b]; Matter of Miller v New York State Dept, of Transp., 58 AD3d 981, 983 [3d Dept 2009], lv denied 12 NY3d 712 [2009]). Review of a FOIL determination does not provide for mandamus relief (see Matter of Harvey v Hynes, 174 Misc 2d 174, 177 [Sup Ct, Kings County 1997]).
We note that, contrary to the court’s interpretation, Public Officers Law § 89 (3) does not require either a grant or a denial of a FOIL request within 20 days of the five-day “acknowledg*407merit” notice. The 20-day period is triggered only when “[the] agency determines to grant a request in whole or in part, and [when] circumstances prevent disclosure . . . within twenty business days from the date of the acknowledgment of the receipt of the request” (id.). Indeed, Public Officers Law § 89 (3) mandates no time period for denying or granting a FOIL request, and rules and regulations purporting to establish an absolute time period have been held invalid on the ground that they were inconsistent with the statute (see e.g. Matter of Legal Aid Socy. v New York City Police Dept., 274 AD2d 207, 215 [1st Dept 2000], lv dismissed in part, denied in part 95 NY2d 956 [2000]).
Petitioners’ reliance on CPLR 3001 is similarly unavailing. If, as petitioners assert, “[n]othing about the declaratory and mandamus relief sought by [them] touches on the sole relief that the Petition sought in respect to the four individual [FOIL] requests,” then there is no “justiciable controversy” within the meaning of CPLR 3001. Moreover, to the extent petitioners seek hybrid FOIL and declaratory relief, they were required to serve a summons in addition to the notice of petition, and a combined petition/complaint (see Matter of Newton v Town of Middletown, 31 AD3d 1004, 1005 [3d Dept 2006]).
The court erred in ordering respondent to release the home addresses of handgun licensees in electronic form. The fact that Penal Law § 400.00 (5) makes the name and address of a handgun license holder “a public record” is not dispositive of whether respondent can assert the privacy and safety exemptions to FOIL disclosure, especially when petitioners seek the names and addresses in electronic form (see Matter of New York State Rifle & Pistol Assn., Inc. v Kelly, 55 AD3d 222, 226 [1st Dept 2008]). In addition, “[disclosing a person’s home address implicates a heightened privacy concern” (Matter of New York State United Teachers v Brighter Choice Charter School, 64 AD3d 1130, 1132 [3d Dept 2009], citing, inter alia, Public Officers Law § 89 [7], revd on other grounds 15 NY3d 560 [2010]).
Furthermore, respondent submitted a deputy inspector’s affidavit, which petitioners failed to controvert, detailing its privacy and safety concerns implicated by disclosure of the addresses in electronic form. At a minimum, the affidavit demonstrated “a possibility of endanger[ment]” sufficient to invoke the exemption set forth in Public Officers Law § 87 (2) (f) (see Matter of Ruberti, Girvin & Ferlazzo v New York State Div. of State Police, 218 AD2d 494, 499 [3d Dept 1996] [internal quotation marks omitted]).
Nor, since the zip codes of the license holders were disclosed, *408would the additional disclosure of their exact street addresses appear “to further the policies of FOIL, which are to assist the public in formulating intelligent, informed choices with respect to both the direction and scope of governmental activities” (New York State United Teachers, 15 NY3d at 564-565 [internal quotation marks omitted]).
Similarly, FOIL does not require disclosure of the home addresses of hate crime victims, even redacted as the court instructed (see Public Officers Law § 87 [2] [b]). Even the partial disclosure of an address can reveal the identity of a victim, if, for example, he or she resides in a single family house or is the only member of a particular minority group who resides in a small apartment building. Moreover, respondent’s expert’s testimony regarding the sensitivity of hate crime victims and their frequent desire to remain private about the incidents was not controverted.
The court erred when it declined to order respondent to produce to petitioners the Floyd database on the grounds that petitioners had not exhausted their administrative remedies with respect to those records and that the futility exception to the exhaustion of administrative remedies doctrine did not apply to FOIL.
Petitioners’ administrative remedies were exhausted when respondent constructively denied their timely internal appeal of the denial of their request for the crime incident database by failing to respond to the appeal within the statutorily mandated 10-day period (Public Officers Law § 89 [4] [a]; see also Council of Regulated Adult Liq. Licensees v City of N.Y. Police Dept., 300 AD2d 17, 18-19 [1st Dept 2002]). Petitioners then exercised their statutory remedy by bringing this proceeding for review of the denial under CPLR article 78, and, after learning of its existence, narrowed their request to the Floyd database, which contained 12 of the 16 data fields petitioners had originally requested (see Matter of Williams v Erie County Dist. Attorney, 255 AD2d 863, 864 [4th Dept 1998]).
Even if the request for the Floyd database is deemed a new request, certain exceptions exist by which a petitioner can bypass the available administrative remedies, such as where the administrative remedies would either be futile or cause irreparable injury (Watergate II Apts, v Buffalo Sewer Auth., 46 NY2d 52, 57 [1978]). Here, respondent made clear that it would not grant petitioners’ request for the Floyd database and any further attempt at internal administrative review would be futile (see Matter of Counties of Warren & Washington, Indus. Dev. Agency v Village of Hudson Falls Bd. of Health, 168 AD2d 847, 848 [3d Dept 1990]; Fileccia v City of New York, 2011 NY Slip *409Op 32156[U] [Sup Ct, NY County 2011]; Wasserman Grubin & Rogers, LLP v New York City Dept, of Educ., 2009 NY Slip Op 31797[U] [2009] [Sup Ct, New York County 2009]).
Citing Bankers Trust Corp. v New York City Dept, of Fin. (1 NY3d 315 [2003]), the court incorrectly held that the futility exception to the exhaustion of administrative remedies doctrine does not apply because FOIL establishes an exclusive remedy (Public Officers Law § 89 [4] [b]). In Bankers Trust, the plaintiff sought a declaratory judgment that it was entitled to a tax refund. The applicable statute was Administrative Code of City of NY § 11-681 (2), which provides: “2. Judicial review exclusive remedy. The review of a decision of the tax appeals tribunal provided by this section shall be the exclusive remedy available to any taxpayer for the judicial determination of the liability of the taxpayer for the taxes imposed by the named subchapters.”
The Court of Appeals held that because review of a decision of the Tax Appeals Tribunal was plaintiffs statutory exclusive remedy, the courts did not have jurisdiction to hear the bank’s declaratory judgment action. Unlike the tax statute at issue in Bankers Trust, FOIL does not contain an express provision that judicial review of a final administrative determination is a party’s “exclusive remedy” for an allegedly erroneous administrative rejection of a request for information under the statute. Accordingly, in the context of FOIL, a futility exception exists to “the judicially-created rule that administrative remedies must be exhausted” (Bankers Trust, 1 NY3d at 322) before judicial review may be obtained. Since, as previously discussed, petitioners have established that exhaustion of administrative remedies concerning their request for the Floyd database would be futile, petitioners’ failure to exhaust administrative remedies does not bar the petition to require production of the Floyd database pursuant to FOIL.
However, the Floyd database was produced in an unrelated federal action, governed by very different standards from those that govern public access to records under FOIL (see Svaigsen v City of New York, 203 AD2d 32 [1st Dept 1994]). Further, the database was produced pursuant to strict confidentiality requirements, which indicates that disclosure to the general public would, at a minimum, raise serious confidentiality and privacy concerns. Accordingly, we remand to Supreme Court to determine whether the Floyd database should be released, and if so, under what conditions. Concur—Andrias, J.E, Friedman, Moskowitz and Renwick, JJ. [Prior Case History: 2011 NY Slip Op 32857(U).] | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902555/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Lagaña, J.), rendered April 26, 1984, convicting him of robbery in the first degree (two counts), and robbery in the second degree (two counts), upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
It was error for the trial court to allow a police officer to testify that he arrested the defendant after a conversation with a codefendant who did not testify at trial (People v Felder, 108 AD2d 869, 870; People v Cruz, 100 AD2d 882, 883). However, the error was unpreserved for appellate review and, in any event, was harmless in light of the strong identification *707testimony by the two victims (People v Johnson, 57 NY2d 969, 970; People v Crimmins, 36 NY2d 230, 242).
The defendant failed to object to the jury charge at trial, and thus his claim regarding the reasonable doubt standard was also not preserved for appellate review (CPL 470.05 [2]; People v De Mauro, 48 NY2d 892, 893; People v Reed, 120 AD2d 552, 553). In any event, it is clear that the charge as a whole conveyed the proper standard to the jury (People v Fisher, 112 AD2d 378). Brown, J. P., Rubin, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902556/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Egitto, J.), rendered January 30, 1986, convicting him of murder in the second degree (five counts), attempted murder in the second degree (three counts), assault in the first degree (two counts), assault in the second degree, robbery in the first degree (four counts), criminal possession of a weapon in the second degree (four counts), and rape in the first degree, upon a jury verdict, and imposing sentence. The appeal brings up for review the denial, after a hearing, of that branch of the defendant’s omnibus motion which was to suppress identification testimony.
Ordered that the judgment is affirmed.
The hearing court did not err in denying that branch of the defendant’s omnibus motion which was to suppress identification testimony, as the evidence adduced established the reasonableness of the police conduct and the lack of suggestiveness of the identification procedures. Contrary to the defendant’s contention, there was no evidence adduced at the suppression hearing that certain wanted posters issued more than one month before the lineup were still posted in the area of the precinct where the witnesses waited, or that any witness actually saw a wanted poster before viewing the lineup.
We have considered the remaining contention raised by the defendant and find it to be without merit. Lawrence, J. P., Kunzeman, Kooper and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902557/ | Judgement Supreme Court, New York County (Carol Berkman, J.), rendered May 28, 2008, convicting defendant, upon his plea of guilty, of attempted criminal possession of a weapon in the third degree, and sentencing him, as a second violent felony offender, to a term of three years, unanimously reversed, on the law, the judgment vacated, and the indictment dismissed.
This Court previously held this appeal in abeyance pending a new suppression hearing (96 AD3d 580 [1st Dept 2012]). Supreme Court conducted the hearing and granted defendant’s motion to suppress the pistol that defendant is charged with possessing. There being no basis for disturbing that determination, we vacate the conviction and dismiss the indictment. Concur—Sweeny, J.P, Acosta, Freedman and Clark, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902558/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Egitto, J.), rendered January 30, 1986, convicting him of murder in the second degree (five counts), attempted murder in the second degree (two counts), assault in the second degree, robbery in the first degree (four counts), and criminal possession of a weapon in the second degree (four counts), upon a jury verdict, and imposing sentence. The appeal brings up for review the denial, after a hearing, of those branches of the defendant’s omnibus motion which were to suppress physical evidence and identification testimony.
Ordered that the judgment is modified, on the law, by vacating the sentences imposed on two charges of assault in the first degree; as so modified, the judgment is affirmed.
The hearing court properly found that the People met their heavy burden of establishing that the warrantless entry into the basement of 682 Eastern Parkway, where the defendant Terrell Eleby and his brother, the codefendant Vincent Eleby, resided, which resulted in the arrest of the Elebys, was not unlawful because it was consensual (see, People v Levan, 62 NY2d 139). The hearing court also properly determined that the warrantless search of that basement several days later was similarly justified by consent (see, People v Adams, 53 NY2d 1, cert denied 454 US 854). In any event, that search only encompassed the public area of the basement (see, People v Lewis, 108 AD2d 872).
Furthermore, the hearing court properly denied that branch of the defendant’s omnibus motion which was to suppress identification testimony, since, under the totality of the circumstances, the confrontations involved were not so unnecessarily suggestive and conducive to mistaken identification that the defendant was denied due process of law (see, People v Logan, 25 NY2d 184, cert denied 396 US 1020, rearg dismissed *70827 NY2d 733, 737). The fact that the photographic array shown the eyewitnesses was apparently lost some time after the trial does not give rise to an inference that the array was suggestive (cf., People v Lynch, 117 AD2d 823, lv denied 68 NY2d 670; People v Johnson, 106 AD2d 469), since the hearing court had the opportunity to view the array and determined that it was not suggestive. With respect to the lineup identifications, though the defendant was dressed differently than some of the fillers, they all appeared reasonably similar in their physical characteristics to the defendant, and there is nothing to suggest that the witnesses had any reason to perceive the clothing worn by the defendant was somehow significant (see, People v Mattocks, 133 AD2d 89, lv denied 70 NY2d 801; People v Rodriguez, 124 AD2d 611).
Turning to consideration of the issues raised regarding the conduct of the trial, we note that the error which occurred when Detective Hoffman was permitted to give hearsay testimony which inferentially bolstered the identification testimony of 1 of the 6 eyewitnesses has not been preserved for our review. In any event, given the clear and strong evidence of identification, this error, standing alone, would not be sufficient to require reversal (see, People v Holt, 67 NY2d 819; People v Mobley, 56 NY2d 584; People v Lee, 110 AD2d 913).
However, the sentencing court did err when it imposed sentence upon the defendant under two counts of assault in the first degree, upon which the defendant had been acquitted. Thus, the terms of imprisonment imposed under those two counts are vacated. Lawrence, J. P., Kunzeman, Kooper and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902559/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Egitto, J.), rendered January 30, 1986, convicting him of murder in the second degree (six counts), attempted murder in the second degree (three counts), assault in the first degree (two counts), assault in the second degree, robbery in the first degree (four counts), and criminal possession of a weapon in the second degree (four counts), upon a jury verdict, and imposing sentence. The appeal brings up for review the denial, after a hearing, of that branch of the defendant’s omnibus motion as was to suppress physical evidence.
Ordered that the judgment is affirmed.
The hearing court did not err in denying that branch of the defendant’s omnibus motion which was to suppress the physi*709cal evidence seized from his apartment shortly after his arrest (see, People v Eleby, 137 AD2d 707 [decided herewith]).
Further, the trial court did not abuse its discretion in denying the defendant’s application for a severance, as the defendant failed to show good cause why a joint trial would prejudice his substantial rights (see, People v McGee, 68 NY2d 328; People v Payne, 35 NY2d 22). Nor was the trial court’s decision to permit a ballistics expert to testify on behalf of the prosecution an abuse of discretion (see, People v Kelly, 62 NY2d 516), though the prosecutor did not make his report available to the defense counsel upon demand (see, CPL 240.20 [1] [c]). Where, as here, any potential prejudice arising from noncompliance with the continuing duty of disclosure under CPL 240.20 could be cured by the granting of a continuance, the drastic remedy of preclusion was not warranted (see, CPL 240.70; People v Rosario, 124 AD2d 683, lv denied 69 NY2d 833; People v Kehn, 109 AD2d 912; People v Benjamin R., 103 AD2d 663; People v Napierala, 90 AD2d 689).
In addition, the court correctly refused to charge the jury regarding voluntary intoxication, as the evidence of intoxication was so minimal that no reasonable person would have entertained a doubt as to the element of intent on the basis of intoxication (see, People v Perry, 61 NY2d 849; People v Carter, 115 AD2d 551).
Finally, the sentencing court did not err in providing that the sentences imposed upon the defendant for each of the three felony murder counts, each of the three attempted murder counts, and each of the assault counts shall run consecutively. Although the offenses may be said to have occurred in the course of a single extended transaction, no two or more of them were committed through a single act or omission, or through an act or omission which itself constituted one of the offenses and also was a material element of another (see, Penal Law § 70.25 [2]; People v Brathwaite, 63 NY2d 839; People v Santiago, 136 AD2d 660; People v Robbins, 118 AD2d 820, lv denied 67 NY2d 949).
We have considered the remaining contention raised by the defendant and find it to be without merit. Lawrence, J. P., Kunzeman, Kooper and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902560/ | Judgement Supreme Court, New York County (Carol Berkman, J.), rendered May 28, 2008, convicting defendant, upon his plea of guilty, of attempted criminal possession of a weapon in the third degree, and sentencing him, as a second violent felony offender, to a term of three years, unanimously reversed, on the law, the judgment vacated, and the indictment dismissed.
This Court previously held this appeal in abeyance pending a new suppression hearing (96 AD3d 580 [1st Dept 2012]). Supreme Court conducted the hearing and granted defendant’s motion to suppress the pistol that defendant is charged with possessing. There being no basis for disturbing that determination, we vacate the conviction and dismiss the indictment. Concur—Sweeny, J.P, Acosta, Freedman and Clark, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902788/ | Appeal from a judgment of the County Court of Albany County (Turner, Jr., J.), rendered March 31, 1987, convicting defendant upon his plea of guilty of the crime of burglary in the third degree.
Appeal dismissed (see, People v Lester, 137 AD2d 871 [decided herewith]; People v Harvey, 124 AD2d 943, 944, lv denied 69 NY2d 746). Mahoney, P. J., Kane, Casey, Weiss and Yesawich, Jr., JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902789/ | Weiss, J.
Appeal from two judgments of the Supreme Court (Duskas, J.), in favor of defendants, entered February 24, 1987 and May 26, 1987 in St. Lawrence County, upon a dismissal of the complaint at the close of plaintiff’s case.
Plaintiff is the subrogee of Anna P. Cousins, the former owner of the Massena Diner in the Town of Massena, St. Lawrence County, which was damaged by fire on July 23, 1982, having paid Cousins upon its policy of fire insurance covering the premises. Plaintiff commenced this action against defendants, Niagara Mohawk Power Corporation and the Town of Massena, seeking money damages for the fire loss. Prior to May 1981, the electrical distribution equipment in the town was owned and installed by Niagara Mohawk. Thereafter, the town acquired ownership, albeit without making any changes in the electrical service to the diner. At the close of plaintiff’s proof in a bifurcated jury trial, Supreme Court granted defendants’ motion to dismiss the complaint, finding that the fire originated from a short circuit in a disconnect box under the customer’s control and not from a breach of duty on defendants’ part. Plaintiff has appealed.
We affirm. It is well established that utility companies have an affirmative duty to exercise reasonable care in the operation and maintenance of power lines (Miner v Long Is. Light. Co., 40 NY2d 372, 378). Here, the record shows that the fire *878resulted from a short circuit within a distribution box owned and controlled by plaintiffs insured and not from any actual defect in the power line. The dispositive question on this appeal distills to whether defendants breached their duty of reasonable care by failing to place a fuse on the customer’s incoming service line, which plaintiffs witnesses testified would have alleviated the potential for a fire of this nature. Plaintiff maintains that a triable factual issue has been raised as to the reasonableness of defendants’ conduct in failing to install a line fuse.
We agree with plaintiffs assertion that custom and industry practice are relevant to the issue of due care, but not dispositive (supra, at 381; see, Richardson, Evidence § 187, at 158-159 [Prince 10th ed]). The fact that utilities within the State do not follow a practice of fusing service lines does not, ipso facto, vitiate plaintiffs claim. Nonetheless, the record confirms the absence of any statute, code, rule or regulation which mandated or even recommended the installation of line fuses as promoted by plaintiff. Nor did plaintiff successfully establish that such installation was conducted in other localities or would otherwise be required to fulfill a utility’s duty of reasonable care. On the evidence presented, we find that Supreme Court correctly determined as a matter of law that defendants were not required to install a safety fuse on the customer’s service line in order to fulfill their duty of reasonable care. It follows that defendants’ trial motion to dismiss was properly granted.
Judgment affirmed, with costs. Mahoney, P. J., Kane, Casey, Weiss and Levine, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902561/ | Appeal by the defendant from a judgment of the County Court, Suffolk County (Rohl, J.), rendered December 1, 1986, convicting her of grand larceny in the second degree, forgery in the second degree (five counts), *710and criminal possession of a forged instrument in the second degree (five counts), upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed and the matter is remitted to the County Court, Suffolk County, for further proceedings pursuant to CPL 460.50 (5).
The defendant contends that the trial court’s charge as to circumstantial evidence did not adequately convey the appropriate law to the jury. However, inasmuch as no objection was raised to this portion of the charge, the issue has not been preserved for appellate review (see, People v Thomas, 50 NY2d 467; People v Pinnero, 125 AD2d 421, lv denied 69 NY2d 884). In any event, the instruction in question apprised the jury of the correct standard to be applied in evaluating circumstantial evidence (see, People v Ford, 66 NY2d 428, 441-442; People v Sanchez, 61 NY2d 1022, 1024).
The defendant contends that the trial court abused its discretion in replacing a tardy juror with the first alternate (see, CPL 270.35). The matter has not been preserved for our review because of a failure to object at the time of replacement (see, People v Burns, 118 AD2d 864, 865; People v Pierce, 97 AD2d 904, 905).
We have examined the defendant’s remaining contentions, including her claim that the sentence imposed was unduly harsh and excessive, and conclude that they are without merit. Thompson, J. P., Brown, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902562/ | Motion by the People for reargument of an appeal from a judgment of the County Court, Suffolk County, rendered March 27, 1986, which was determined by decision and order (one paper) of this court, dated December 7, 1987 [135 AD2d 558].
Justice Kunzeman has been substituted for former Justice Niehoff (22 NYCRR 670.2 [c]).
Now on the papers filed in support of the motion and the papers filed in opposition thereto, it is
Ordered that the motion is granted, the decision and order of this court dated December 7, 1987 is recalled and vacated, and upon reargument, the following is substituted therefor.
Appeal by defendant from a judgment of the County Court, Suffolk County (Cacciabaudo, J.), rendered March 27, 1986, convicting him of burglary in the second degree (two counts), *711and criminal possession of a weapon in the third degree, after a nonjury trial, and imposing sentence. The appeal brings up for review the denial, after a hearing, of that branch of the defendant’s omnibus motion which was to suppress property seized from him on the ground that his arrest was illegal.
Ordered that the judgment is affirmed.
On Sunday, July 14, 1985, at about 10:15 p.m., Police Officers Bruce Klimecki and James Edmonds responded to a radio run reporting that a burglar alarm had been activated at a certain address in Brentwood. They were a block away and arrived at the location in less than 30 seconds, pulled in the driveway next to the location (a two-story building with a law office) and immediately saw the defendant in the driveway walking toward them and away from the building. The officers exited their car and asked the defendant who he was and why he was there but received no response. Officer Klimecki repeated the question and the defendant replied, "I am not going to say anything to you. I have nothing to say”. The defendant had bloodstains on his sweatshirt and as he reached his right hand back to his right rear pocket Klimecki noticed a bulge in that pocket about five inches long and one inch wide. Fearing that the defendant was reaching for a weapon, Klimecki grabbed his hand, felt the bulge which was a hard object, and removed a switchblade knife from the pocket. The defendant was arrested, searched and handcuffed. A flashlight was removed from his waistband, and jewelry, rolls of coins and a pen and pencil set were taken from his pockets.
Upon inspection of the law office, a broken window was discovered and drops of blood on the floor below. While the defendant sat in the back of the patrol car, Barbara and Donald LaBruno arrived on the scene to report that Mrs. LaBruno’s sister’s house around the corner had been burglarized, and Mrs. LaBruno recognized her sister’s jewelry among the property taken from the defendant.
We agree with the hearing court’s determination that the police officers’ actions were reasonable. The defendant’s presence near the scene of a reported crime with bloodstains on his clothing certainly justified an inquiry, and his gesture toward his pocket where the outline of a weapon was observed entitled the police officer to frisk the defendant in order to protect himself (CPL 140.50; People v De Bour, 40 NY2d 210, 222-223). Suppression of the property seized from the defendant was, therefore, properly denied.
The defendant pro se contends that, pursuant to CPL 300.30 *712(4), count two of the indictment, charging criminal possession of a weapon in the third degree (a switchblade knife) (Penal Law § 265.02 [1]), is an inclusory concurrent offense of count one of the indictment, burglary in the second degree, predicated on his being armed with the deadly weapon while in immediate flight from the scene of the burglary (Penal Law § 140.25 [1] [a]). This contention is without merit. The crime of criminal possession of a weapon in the third degree under Penal Law § 265.02 (1) is not an inclusory concurrent offense of burglary in the second degree because the former contains an element (the fact that the possessor of the weapon has been "previously convicted of any crime”) which is not an element of the latter.
As to both of the burglary charges, we find that the evidence was legally sufficient to support the defendant’s conviction (see, People v Malizia, 62 NY2d 755, cert denied 469 US 932), and, furthermore, upon the exercise of our factual review power, we are satisfied that the evidence established his guilt beyond a reasonable doubt and that the verdict was not against the weight of the evidence (see, CPL 470.15 [5]).
We are not persuaded of any sound reason to disturb the sentence imposed. Kunzeman, J. P., Weinstein, Eiber and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902564/ | Appeal by the defendant from a judgment of the Supreme Court, Queens County (Pitaro, J.), rendered January 17, 1985, convicting him of criminal possession of a controlled substance in the first degree, upon a jury verdict, and imposing sentence. The appeal brings up for *713review the denial (Cooperman, J.), after a hearing, of that branch of the defendant’s omnibus motion which was to suppress physical evidence.
Ordered that the judgment is reversed, on the law, that branch of the defendant’s omnibus motion which was to suppress physical evidence is granted, the indictment is dismissed, and the case is remitted to Supreme Court, Queens County, for the purpose of entering an order in its discretion pursuant to CPL 160.50.
Contrary to the findings of the hearing court, we conclude that the search of the apartment in which the defendant resided, which led to the recovery of two bags of cocaine, was unlawful (see, People v Grajales, 136 AD2d 564).
Based upon our disposition of the suppression issue, we need not reach the defendant’s remaining contention. Thompson, J. P., Brown, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902566/ | Appeal by the defendant from a judgment of the Supreme Court, Queens County (Groh, J.), rendered February 22, 1984, convicting him of robbery in the *714first degree, robbery in the second degree (two counts), and attempted robbery in the first degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
The defendant was convicted for offenses committed on August 27, August 28, and September 8, 1983. The victim of the attempted robbery on September 8 was asked on cross-examination whether he was engaged in illegal gambling at various times before and after the August 27th through September 8th period for which he had been granted transactional immunity. The victim invoked his 5th Amendment privilege against self-incrimination. No questioning or testimony had taken place on direct examination of the witness regarding gambling activity. The defendant moved to dismiss on the basis that the witness’s testimony was needed to establish the defense theory that the robberies were fabricated to cover gambling losses. The court denied the motion to dismiss but advised defense counsel to direct his inquiry to the immunity period. Thereafter, counsel made inquiry pertaining to the immunity period and elicited the information that people engaged in the gambling business were accountable to their bankers for losses. Thus, the defendant was able to present his defense through testimony and highlighted it on summation. Accordingly, this is not a case where the refusal to answer impaired the fact-finding process by preventing the defendant from testing direct examination testimony or by preventing him from impeaching the witness or establishing a defense (see, People v Chin, 67 NY2d 22). Therefore, the defendant was not prejudiced by invocation of the privilege.
We have considered those of the defendant’s additional contentions of error which have been preserved for review and find them either to be without merit or harmless in view of the overwhelming evidence of the defendant’s guilt. We decline to exercise our interest of justice jurisdiction to review those contentions which were unpreserved for appellate review (see, CPL 470.05 [2]). Mangano, J. P., Thompson, Bracken and Spatt, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/2476831/ | 729 F.Supp.2d 1024 (2010)
Jeff DEVINE and Devine Solutions, Inc., an Illinois corporation, Plaintiffs,
v.
Sabir KAPASI, Huseni Kapasi, Greg Carlo, and Manageserve Technology, Inc., an Illinois Corporation, Defendants.
No. 09 C 6164.
United States District Court, N.D. Illinois, Eastern Division.
June 7, 2010.
Douglas Michael Ramsey, John Carmen Sciaccotta, Barton James O'Brien, Shefsky & Froelich Ltd., Chicago, IL, for Plaintiffs.
Ariel Weissberg, Weissberg & Associates, Chicago, IL, for Defendants.
MEMORANDUM OPINION AND ORDER
DAVID H. COAR, District Judge.
Plaintiffs Jeff Devine and his company, Devine Solutions, Inc., have filed suit under *1025 the Stored Communications Act, 18 U.S.C. § 2701, the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and Illinois law, alleging that the defendants electronically trespassed upon the Devine Solutions computer network and tampered with electronic communications and other data stored there. The defendants have moved to dismiss the complaint for failure to state a claim. See Fed.R.Civ.P. 12(b)(6). For the reasons given below, the motion to dismiss is GRANTED in part and DENIED in part. Counts III-IV of the complaint are dismissed without prejudice.
FACTS
The relevant facts alleged in the complaint, which the court must take as true for present purposes, are as follows:
Prior to August 21, 2009, Jeff Devine and Sabir Kapasi each owned fifty percent of the common stock of a computer-services company called Geus Technology, Inc. Geus provided programming, configuration, and other technical support for clients who used a popular software application (created by a German software company, not by Geus) known as SAP. Geus's unique support model allowed it to manage and maintain its clients' SAP applications remotely, as well as on-site at its clients' locations throughout North America. Huseni Kapasi and Greg Carlo were employees of Geus.
On August 21, 2009, after several months of contentious and protracted negotiations, Geus (through Sabir Kapasi), Sabir Kapasi, and Devine executed a stock-redemption agreement, pursuant to which Geus redeemed Devine's fifty-percent ownership stake in the company. The parties agreed to an equitable division of Geus's assets, and as memorialized in Schedule 1.2 of their agreement, some of those assets were assigned and transferred to Devine. Among those assets was a server identified as "Server DL380-GEUS05" (the "GEUS05 Server"), which had been a component of Geus's computer network. Following the close of the stock redemption, Devine incorporated the GEUS05 Server into the network owned and operated by Devine Solutions, which comprises computers, servers, and remote access equipment secured by password-protected accounts.
As part of their ownership and/or employment with Geus, Defendants Sabir Kapasi, Huseni Kapasi, and Carlo utilized confidential passwords to access the Geus computer network, including the GEUS05 Server. Until the Geus-issued passwords were terminated, Defendants could access the Devine Solutions network through the GEUS05 Server. Within a couple of hours after the closing of the stock-redemption transaction, and continuing for several days, Defendants systematically and without authorization accessed the Devine Solutions network, including the GEUS05 Server, and further accessed, transferred and deleted electronic information and files stored on the GEUS05 Server. At 9:40 p.m. on Friday, August 21, 2009 (a few hours after the closing of the stock redemption), Carlo remotely accessed the GEUS05 Server from an unknown computer (with the assigned IPA 10.203.86.152) using the "gcarlo" account and password issued by Geus. Carlo's access was captured by a secure log maintained on the GEUS05 Server. Through the GEUS05 Server, Carlo logged into the Devine Solutions network's document-tracking system, known as the Owl Document Management System, which also logs access and user activity. On Saturday, August 22, 2009, according to the Owl log, Sabir Kapasi used the Geus-issued "sabirk" account and password and an unknown computer (with the assigned IPA 10.203.86.156) to log into the Devine Solutions network through the GEUS05 Server and access the Owl document system. *1026 Lastly, the Owl log indicates that on August 25, 2009, Huseni Kapasi used the Geus-issued "hkapasi" account and password and an unknown computer (with the assigned IPA 10.203.86.155) to remotely access the Devine Solutions network through the GEUS05 Server; however, he was denied access to Owl.
The Owl log shows that a substantial volume of electronic information and files were deleted from the Devine Solutions network after the closing of the stock-redemption transaction. Plaintiffs' investigation has revealed that, to date, more than 2000 files and 350 file folders containing electronically stored information and communications were deleted or otherwise transferred from the Devine Solutions networkbut not by Devine or anyone working under his direction.
LEGAL STANDARD
To survive a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), a complaint need only contain a "short and plain statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), that is, "a claim to relief that is plausible on its face." Bell Atlantic v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); see also Ashcroft v. Iqbal, ___ U.S. ____, 129 S.Ct. 1937, 167 L.Ed.2d 868 (2009) (Twombly applies to "all civil actions"). This requirement imposes two relatively low hurdles. First, a complaint "must describe the claim in sufficient detail to give the defendant `fair notice of what the claim is and the grounds upon which it rests.'" EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 127 S.Ct. at 1964). Second, the allegations "must plausibly suggest that the defendant has a right to relief, raising that possibility above a `speculative level.'" Concentra, 496 F.3d at 776. If the allegations do not suggest a right to reliefif for instance, a plaintiff relies merely on conclusions, labels, or formulaic recitations of the elements of a cause of actiona Rule 12(b)(6) motion should be granted. See Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
ANALYSIS
Counts I-II: Electronic Communications Privacy Act
In Counts I-II, Plaintiffs assert a cause of action under Title II of the Electronic Communications Privacy Act, also known as the Stored Communications Act ("SCA"). See 18 U.S.C. §§ 2701-2712. Congress enacted the relevant provision of the SCA, id. § 2701, to protect privacy interests in personal and proprietary information from the mounting threat of computer hackers "deliberately gaining access to, and sometimes tampering with, electronic or wire communications" by means of electronic trespass. See S.Rep. No. 99-541, at 3 (1986), reprinted in 1986 U.S.C.C.A.N. 3555, at 3557. Accordingly, any "aggrieved" party may bring a civil action against a defendant who "intentionally accesses without authorization" or "intentionally exceeds an authorizations to access" a "facility through which an electronic communication service is provided. . . and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system." 18 U.S.C. § 2701(a)(1)-(2); see § 2707(a) (providing private right of action). An "electronic communication service" is "any service which provides to users thereof the ability to send or receive wire or electronic communications," i.e., electronic signals that affect interstate commerce. Id. § 2510(15), (12); see § 2711 (applying definitions in § 2510 to SCA).
The complaint alleges that Defendants "accessed, obtained, altered, transferred, and deleted Plaintiffs' stored electronic information *1027 and communications" by gaining unauthorized access to the Devine Solutions network using Geus-issued user accounts and passwords. The complaint further alleges that the Devine Solutions network provides authorized users with the ability to transmit and receive electronic communications by on-site or remote access, through password protected accountsincluding, as the defendants acknowledge, the ability to send and receive e-mail. Nevertheless, Defendants contend that Plaintiffs do not and cannot adequately plead that they provide an electronic communication service within the meaning of the SCA. This conclusion, Defendants say, follows from the facts that Plaintiffs (1) "merely provides [sic] technological support for customers using the SAP software; as opposed to (2) "independently" providing internet services to their customers; and (3) must purchase their own internet access just like any other consumer. In effect, Defendants argue that § 2701 does not apply because Plaintiffs are not in the business of providing an electronic communication service to the public. But that is not what § 2701 requires.
To see why, it is instructive to consider Defendants' misplaced reliance on Andersen Consulting LLP v. UOP, 991 F.Supp. 1041 (N.D.Il.1998) (Bucklo, J.). UOP, a chemical company, hired Andersen to perform a systems-integration project and, to that end, gave Andersen's employees access to its internal e-mail system. Id. at 1042. During the course of the suit and countersuit that followed the collapse of this arrangement, UOP divulged (to the Wall Street Journal) the contents of e-mails that Andersen employees had sent through UOP's system. Id. Andersen brought a subsequent suit, claiming that UOP violated § 2702 of the SCA, which provides that "a person or entity providing an electronic communication service to the public shall not knowingly divulge to any person or entity the contents of a communication while in electronic storage by that service." 18 U.S.C. § 2702(a)(1) (emphases added). The court dismissed Andersen's complaint on the grounds that UOP did not "provide[] an electronic communication service to the public" or, what comes to that same, that UOP was not "in the business of providing electronic communication services." Andersen Consulting, 991 F.Supp. at 1043.
In their to-and-fro about Andersen Consulting, the parties completely lose sight of the language of § 2702 and its departure from the language of § 2701. Defendants attempt to wring from Andersen Consulting the purported holding that providing an electronic communication service to the public is a necessary condition of providing an electronic communication service tout court. Plaintiffs respond that Andersen Consulting is inapposite because § 2702 redresses the wrongful disclosure of electronic communications whereas § 2701 redresses wrongful accessinviting Defendants to wonder in their reply why `electronic communication service' should mean different things in these two contexts. Of course it does not; the point, however, is that the court was not merely interpreting the phrase `electronic communication service' when it found that UOP did not provide one to the public. Rather, it was addressing the elements of the applicable statute: § 2702 applies, by its terms, to persons and entities "providing an electronic communication service to the public." In contrast, § 2701 applies where someone has gained unauthorized access to "a facility through which an electronic communication service is provided." § 2701 simply does not say "to the public," and Andersen Consultingtethered as it is to the statutory elements of § 2702 provides no support for the proposition that a plaintiff that does not provide an *1028 electronic communications service to the public fails to state a claim under § 2701.[1]
To date, no court of appeals has held that § 2701 applies only where the plaintiff is "in the business" of providing an electronic communication service "to the public." Indeed, the only court of appeals to face the question, albeit obliquely, has concluded otherwise. See Fraser v. Nationwide Mutual Ins. Co., 352 F.3d 107, 115 (3d Cir.2003) (holding that § 2701(c)(1)'s exception for electronic communications accessed with authorization from "the person or entity providing a wire or electronic communication service" applied to insurance company sued by former employee for its allegedly unauthorized access to his e-mail account). To be sure, there is some disagreement within and between the district courts as to whether § 2701 can apply to a private employer that is not "in the business" of providing an electronic communication service "to the public."[2] In any event, this court concludes that it can: imposing a to-the-public requirement on § 2701 sloughs over a pointed difference between adjacent statutory provisions and renders the qualification added to § 2702 at best otiose, at worst utterly opaque. Where, as here, a plaintiff pleads that it stores electronic communications on its own systems, and that a defendant intentionally and without authorization got hold of those stored communications through the plaintiff's electronic facilities, the plaintiff states a claim under § 2701 of the SCA. See, e.g., Expert Janitorial, 2010 WL 908740, at *5, 2010 U.S. Dist. LEXIS 23080, at *14 (substantially similar allegations sufficed at motion-to-dismiss stage). Since Defendants raise no other challenges to the legal sufficiency of Counts I-II, there is no basis for dismissing them.
Counts III-IV: Computer Fraud and Abuse Act
In Counts III-IV, Plaintiffs assert a cause of action under the Computer Fraud and Abuse Act ("CFAA"), which punishes the conduct of anyone who, as relevant here: "intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains . . . information from any protected computer," 18 U.S.C. § 1030(a)(2)(C); or "knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer," id. § 1030(a)(5)(A); or "intentionally accesses a protected computer without authorization, and as a result of *1029 such conduct, recklessly causes damage," id. § 1030(a)(5)(B); or "intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage and loss," id. § 1030(a)(5)(C). The CFAA provides a private right of action, but only where the defendant's alleged conduct "involves 1 of the factors set forth in subclauses (I), (II), (III), (IV), or (V) of subsection (c)(4)(A)(i)." Id. § 1030(g). There is no dispute between the parties that only one of these five subclauses is even colorably implicated by the allegations in the complaint, namely, that Defendants' conduct must have "caused . . . loss to 1 or more persons during any 1-year period . . . aggregating at least $5,000 in value." Id. § 1030(c)(4)(A)(i)(I). Defendants contend, however, that Plaintiffs do not and cannot allege loss that meets the statutory threshold.
The complaint alleges merely that Defendants "caused damage" by wrongfully accessing the GEUS05 Server and transmitting commands that resulted in the loss of data, but it nowhere alleges that Defendants' alleged actions caused Plaintiffs to suffer at least $5,000 in damages during a 1-year period. Since the statute is clear that less than $5,000 in damages will not suffice, Plaintiffs have failed to adequately plead a cause of action under the CFAA. See Hayes v. Packard Bell Nec., Inc., 193 F.Supp.2d 910, 912 (E.D.Tex.2001) (dismissing claim under 18 U.S.C. § 1030 where plaintiff failed to allege at least $5,000 in losses).
What's more, Defendants say, Plaintiffs could not possibly have sustained at least $5,000 in losses as a result of the actions alleged in the complaint. That is because the CFAA limits compensable losses to "reasonable cost[s] to any victim. . . ." Id. § 1030(e)(11). Since Devine Solutions was a technology company, Defendants reason, it would have an information back-up system to ensure that the costs associated with any data loss remained minimalindeed, it would not be acting reasonably if it did not. Thus, $5,000 could not be a "reasonable cost."
Defendants' conclusion is premature. As it stands, the complaint is silent about the scope of Plaintiffs' losses, leaving the court with no way to gauge, at least at this juncture, whether Plaintiffs could properly allege the statutory-minimum loss. Compensable losses or "reasonable cost[s]" under the CFAA include "the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damage incurred because of interruption of service." Id. To conclude that Plaintiffs cannot properly allege at least $5,000 in losses, the court would have to speculate, for instance, about the possible extent of any revenue lost as a result of Defendants' alleged actions. A far better alternative is for Plaintiffs to amend their complaint, if they so choose, and attempt to cure the defects in their allegations of loss under the CFAA. Accordingly, they are granted leave to do so. Counts III-IV of the complaint are dismissed without prejudice.
Counts V-IX: State-Law Claims
In Counts V-IX, Plaintiffs assert various causes of action under Illinois law. Defendants argue that since Plaintiffs have failed to state any claim under federal law, this court lacks supplemental jurisdiction over the remaining state-law claims. But Plaintiffs have, at a minimum, stated a claim under 18 U.S.C. § 2701. Therefore, this court has supplemental jurisdiction over Plaintiffs' state-law claims. See 28 U.S.C. § 1367(a).
*1030 CONCLUSION
For the foregoing reasons, Defendants' motion to dismiss for failure to state a claim is GRANTED in part and DENIED in part. Counts III-IV of the complaint are dismissed without prejudice.
NOTES
[1] Defendants' formulations notwithstanding, § 2701 does not require a plaintiff to be an electronic service provider; it requires that a plaintiff's computers or workplace be a "facility through which an electronic communication service is provided." See Expert Janitorial, LLC v. Williams, 2010 WL 908740, at *5, 2010 U.S. Dist. LEXIS 23080, at *13-14 (E.D.Tenn. March 12, 2010); In re Intuit Privacy Litigation, 138 F.Supp.2d 1272, 1275 n. 3 (C.D.Cal.2001).
[2] Compare, e.g., Expert Janitorial, 2010 WL 908740, at *5, 2010 U.S. Dist. LEXIS 23080, at *14 (under § 2701, janitorial-services company may sue employee for unauthorized access to e-mails and other data stored on employer's password-protected system) and Cedar Hill Assocs., Inc. v. Paget, 2005 WL 3430562, at *2-3, 2005 U.S. Dist. LEXIS 32533, at *7-8 (N.D.Il. Dec. 9, 2005) (Anderson, J.) (under § 2701, wealth-management company may sue employee for unauthorized access to employer-provided e-mail accounts) with Steinbach v. Village of Forest Park, 2009 U.S. Dist. LEXIS 59907, at *6 (N.D.Il. July 14, 2009) (Zagel, J.) (in dicta, defendant municipality that gave plaintiff e-mail account but had to purchase internet access from third party did not provide electronic communication service for purposes of § 2701) and In re Jetblue Airways Corp. Privacy Litigation, 379 F.Supp.2d 299, 307-08 (E.D.N.Y.2005) (defendant airline's website was not an electronic communication service because defendant was not in the business of providing internet access). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/183851/ | NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 10-1032
_____________
GAYATRI GREWAL,
Appellant
v.
UNITED STATES CITIZENSHIP
AND IMMIGRATION SERVICES (USCIS)
_____________
On Appeal from the United States District Court
for the Western District of Pennsylvania
District Court No. 2-08-cv-01439
District Judge: The Honorable Gary L. Lancaster
_____________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
January 28, 2011
Before: McKEE, Chief Judge, and SMITH, Circuit Judges,
and STEARNS, District Judge*
(Filed: January 28, 2011 )
_____________________
OPINION
_____________________
*
The Honorable Richard G. Stearns, United States District Judge for the United States
District Court of Massachusetts, sitting by designation.
1
SMITH, Circuit Judge.
Gayatri Grewal, a native and citizen of India, entered the United States on
April 12, 2001 on a J-1 visa with an expiration date of January 31, 2004. A60; see
8 U.S.C. § 1101(a)(15)(J). As the expiration date of her J-1 visa approached,
Grewal filed an I-539 Application to Extend/Change Nonimmigrant Status from
that of a J-1 status to an F-1 status. A74. An F-1 visa is issued to an alien “for the
purpose of pursuing . . . a course of study” at, inter alia, a college or university. 8
U.S.C. § 1101(a)(15)(F). To obtain the I-539 Change of Status, Grewal had to
secure a SEVIS Form I-20 from the institution she planned to attend. 8 C.F.R. §
214.2(f)(1)(i)(A). Although Grewal submitted a SEVIS Form I-20 from Jefferson
College in Hillsboro, Missouri, indicating her intent to begin her studies no later
than August of 2003, A72, the College terminated the SEVIS because she failed to
enroll in classes. A87.
Despite the termination of her SEVIS, the United States Citizenship and
Immigration Services (USCIS) did not reject her I-539 application. While her I-
539 was still pending, Grewal submitted a second SEVIS I-20 from Jefferson
College dated February 23, 2004. A77. This SEVIS indicated that Grewal
planned to report for classes no later than August 23, 2004, and to complete her
studies by May 25, 2007. The College terminated this second SEVIS in October of
2004, again because of a failure to enroll in classes. A87.
2
Subsequently, in a decision dated May 19, 2005, USCIS denied Grewal’s I-
539 Application. A36. It explained that the SEVIS she had submitted had been
cancelled on October 23, 2004, and that this rendered her “statutorily ineligible”
for the F-1 student visa. A36. Although the decision noted that there was no
appeal available, it indicated that she could pursue a motion to reopen or to
reconsider under 8 C.F.R. § 103.5.
In response, Grewal obtained from Jefferson College a third SEVIS I-20
Form, which indicated that Grewal planned to report to school in August of 2005
and to complete her studies in August of 2008. A40. In addition, the College’s
International Student Advisor provided a letter “To Whom It May Concern”
indicating that she “requested reinstatement for [Grewal] on June 15, 2005.” A85.
Grewall submitted these documents to USCIS with a motion to reopen or to
reconsider. The following month, USCIS issued a decision dated July 25, 2005,
denying the first motion to reopen and to reconsider. The decision explained that
Grewal’s submissions neither provided new evidence regarding her eligibility at
the time her I-539 Application was under consideration nor demonstrated that the
denial was incorrect based on the evidence of record at that time. A86.
Grewal again contacted officials at Jefferson College, who provided another
letter. After reciting the factual history surrounding the first and second SEVIS,
this second letter stated that “[o]n June 15, 2005, we requested reinstatement for
3
Ms. Grewal for the fall 2005 semester. Unfortunately, we cancelled Ms. Grewal’s
[second] I-20 in October 2004 as opposed to deferring her program start date.”
A87. This letter, together with a third SEVIS I-20 from the College, accompanied
a second motion to reopen and to reconsider. A60. This second motion was
denied in a decision dated January 10, 2006, which again explained that the
additional submissions did not establish Grewal’s eligibility at the time her I-539
Application had been considered and it did not demonstrate that USCIS’s initial
denial of the I-539 was incorrect. A46.
Thereafter, Grewal filed a third motion to reopen or to reconsider. In a
decision dated March 28, 2006, USCIS denied this third motion as untimely. A89.
In addition, it pointed out that, like the first two motions to reopen and to
reconsider, this third motion did not demonstrate either her eligibility at the time
her I-539 was under consideration or that USCIS’s initial decision denying her I-
539 Application had been incorrect at the time the decision was rendered. A89-90.
Grewal filed an appeal to the Administrative Appeals Office. It was denied on the
basis that “[t]here is no appeal” from the denial of an I-539 application. A92.
More than two years later, on October 13, 2008, Grewal filed a complaint in
the United States District Court for the Western District of Pennsylvania. She
alleged, inter alia, that she was entitled to relief under the Administrative
Procedures Act. 5 U.S.C. § 701 et seq. She asserted that she had demonstrated her
4
eligibility for the F-1 student visa by showing that the cancellation of the second
SEVIS I-20 had been the result of “an inadvertent error committed by officials of
Jefferson College . . . and therefore did not reflect actual ineligibility” for the F-1
student visa. A28. USCIS filed a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), or in the alternative for summary judgment. The District
Court, adopting the report of a Magistrate Judge, granted USCIS’s 12(b)(6) motion
to dismiss. This timely appeal followed.1
Grewal’s complaint sought judicial review of the agency’s legal
determination that she was statutorily ineligible for an F-1 student visa. See Pinho
v. Gonzales, 432 F.3d 193, 203-04 (3d Cir. 2005). USCIS’s 12(b)(6) motion
asserted that her claim failed to state a basis for relief as she was statutorily
ineligible based on the documents appended to her complaint.
Under 8 U.S.C. § 1258(a), the “Secretary of Homeland Security may, under
such conditions as he may prescribe, authorize a change from any nonimmigrant
1
USCIS properly conceded, and the District Court correctly agreed, that the
District Court had jurisdiction under 28 U.S.C. § 1331 and 5 U.S.C. § 704 in light
of this Court’s decision in Pinho v. Gonzales, 432 F.3d 193, 200 (3d Cir. 2005).
We exercise appellate jurisdiction under 28 U.S.C. § 1291. Pinho, 432 F.3d at
204. Although the District Court considered numerous exhibits in resolving this
matter, it did not err because the documents it considered were appended to and
“explicitly relied upon in the complaint.” In re Rockefeller Ctr. Props., 184 F.3d
280, 287 (3d Cir. 1999) (italicized text, quotation marks and citation omitted). Our
review of a District Court’s order granting a motion to dismiss under Rule 12(b)(6)
is de novo. Mayer v. Belichick, 605 F.3d 223, 229 (3d Cir. 2010).
5
classification to any other nonimmigrant classification in the case of any alien
lawfully admitted to the United States[.]” A change to an F-1 status requires the
alien to be a “bona fide student qualified to pursue a full course of study . . . who
seeks to enter the United States temporarily and solely for the purpose of pursuing
such a course of study[.]” 8 U.S.C. § 1101(a)(15)(F)(i). The Immigration and
Nationality Act specifies that the approved “place of study shall have agreed to
report . . . the termination of attendance of each nonimmigrant student” or risk the
withdrawal of approval by the government of that place of study for foreign
students. Id. Regulation § 214.2 sets forth the requirements for an F-1 status and
specifies that the student must present “a SEVIS Form I-20 issued in his or her
own name by a school approved by the Service for attendance by F-1 foreign
students.” 8 C.F.R. § 214.2(f)(1)(i)(A). The F-1 status endures for the period of
“time during which an F-1 student is pursuing a full course of study at an
educational institution approved by the Service for attendance by foreign
students[.]” Id. § 214.2(f)(5)(i).
We agree with the District Court that Grewal was statutorily ineligible
during the period of time that her I-539 application was pending. Her ineligibility
stemmed from the fact that she did not have a valid SEVIS Form I-20 during the
pendency of her I-539 Application. The first two SEVIS Forms were cancelled
and therefore did not establish her eligibility for I-539 relief at any point in time
6
before the May 19, 2005 USCIS decision. The third SEVIS Form, though valid,
did not pertain to the period of time when her I-539 Application was pending.
We also agree with the District Court that the denial by USCIS of the three
motions to reopen and to reconsider was not error. As explained above, the third
SEVIS did not establish her eligibility for I-539 Change of Status because it did
not pertain to the period of time during which her Application was under
consideration. It is true that the letter from Jefferson College could be construed,
as Grewal urges, as an admission that the second SEVIS was cancelled in error by
the College. Nonetheless, the fact remains that the letter did not state that the
College had made a mistake in terminating the second SEVIS. Furthermore, the
letter confirmed that the second SEVIS was appropriately terminated under §
1101(a)(15)(F)(i) because Grewal had not enrolled in a course of study. Thus, the
College’s letter cannot be relied upon by Grewal as new evidence that she was
eligible for an F-1 visa while her I-539 Application was under consideration by
USCIS, or as evidence that USCIS’s initial decision was incorrect.
Accordingly, we will affirm the judgment of the District Court.
7 | 01-03-2023 | 01-28-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/4534680/ | IN THE SUPREME COURT OF IOWA
No. 19–1862
Filed May 15, 2020
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
JENNIFER L. MEYER,
Respondent.
On review of the report of the Iowa Supreme Court Grievance
Commission.
The Iowa Supreme Court Attorney Disciplinary Board brought a
complaint against attorney alleging she violated three rules of professional
conduct. LICENSE SUSPENDED.
Tara van Brederode and Wendell J. Harms, Des Moines, for
complainant.
Leon Spies of Spies & Pavelich, Iowa City, for respondent.
2
WATERMAN, Justice.
Attorney Jennifer Meyer entered an Alford plea to third-degree theft
and was ordered to pay $102,989.95 in restitution after a special
investigation by the state auditor found she billed the state public defender
(SPD) for services she did not provide and collected reimbursement for
expenses she did not incur. The Iowa Supreme Court Attorney
Disciplinary Board brought a complaint against Meyer, alleging she
violated three rules of professional conduct in connection with her Alford
plea: Iowa Rules of Professional Conduct 32:1.5(a) (unreasonable fees or
expenses), 32:8.4(b) (commission of a criminal act), and 32:8.4(c) (conduct
involving dishonesty, fraud, deceit, or misrepresentation). A division of
the Iowa Supreme Court Grievance Commission found Meyer violated
those rules and recommended a sixty-day suspension. On our de novo
review, we find Meyer violated all three rules and suspend her from the
practice of law for one year.
I. Background Facts and Proceedings.
We make the following findings based upon our de novo review of
the record. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Moran, 919 N.W.2d
754, 756 (Iowa 2018).
A. The SPD Contract and Audit. Meyer was hired as a contract
attorney with the SPD in October 2002. The SPD periodically renewed her
contract. The scope of Meyer’s representation expanded to include court-
appointed practice in seven Iowa counties and consisted primarily of
indigent criminal defense. She described her practice as “busy,”
estimating that she opened approximately 2100 files during 2010–2012.
The SPD contract required that Meyer claim fees only for “actual
time and expenses reasonably necessary to properly represent” her clients.
3
She was also required to follow SPD rules for mileage reimbursement. The
contract required that Meyer maintain records.
Contractor shall maintain books, records, documents, and
other evidence of accounting procedures and practices which
sufficiently and properly reflect the services performed and for
which payment was requested or which relate to the work
performed pursuant to this contract. . . . Contractor shall
retain all books, records, documents and other relevant
materials for five years after payment has been made under
this contract.
For each claim Meyer submitted to the SPD, she certified she was entitled
to the requested payment.
I, the undersigned attorney, certify that I have
completed my services under the appointment; that I have not
received nor have I entered into any agreement to receive
compensation for these services, direct or indirect, from any
source other than the State Public Defender; and that the
above information summarizes the services and expenses for
which I am entitled to payment. I further state that an
itemized statement of services and expenses is attached
hereto and a copy has been provided to my client.
SPD initially approved or disapproved Meyer’s submitted billings on a
case-by-case basis. During the autumn of 2013, however, the SPD
reviewed Meyer’s previously approved billings on a per-day basis rather
than a per-case basis.
In a letter to Meyer dated September 24, 2013, the state public
defender, Samuel Langholz, raised concerns about her billing practices
and mileage expenses. Langholz noted Meyer billed SPD more than 2591
hours in fiscal year 2010 and at least 2089 hours in fiscal year 2011.
When Langholz added up Meyer’s hours charged per day in multiple cases,
he noticed that Meyer had billed the SPD twenty-four hours or more in a
single day on nineteen different dates. Langholz and Meyer met on October
9 to discuss his concerns.
4
Six days later, Meyer wrote Langholz to report she was unable to
reconstruct her total billings by day. Meyer stated she dictated her billings
prepared by her secretary and then would often make handwritten edits
to the invoices, usually to correct time entries. Those changes were not
reentered in the billing software.
As we discussed at our [October 9] meeting, I reviewed
my billing on a case-by-case basis prior to submitting bills to
your office . . . . Following our meeting, I continued to review
the days in question, however, unfortunately because I
dictated almost all entries, reconstructing each day is not a
viable option. I take full responsibility for not tracking my
billable time in a way that allow[s] me to review the amount of
time billed for each day, not just the work done itself. . . . The
dictation was deleted by my secretary upon entry of the time
into the billing system.
Meyer stated that billing errors could occur when her secretary
billed on the days “the letter or document was actually mailed out to the
client,” rather than the actual days Meyer worked on the case. “Time may
have been entered from days or weeks prior, depending on when the
information was entered. . . .” According to Meyer, this explained how the
hours worked on one day could be entered on another, creating the
artificially high number of hours for a particular day. Meyer insisted all of
the time billed was for work she actually performed, even if the dates were
billed incorrectly.
The SPD renewed Meyer’s contract on November 2013, which was
set to expire on January 3, 2014. However, on December 30, 2013,
Langholz notified Meyer that the SPD would not renew the contract.
Langholz rejected Meyer’s explanation for the high billing days.
Your time records do not always reflect that the days
surrounding these highest-billing days were unusually low as
would be expected if these high billing days were merely the
result of secretarial date entry errors. And you did
occasionally bill time on the weekends further undermining
this explanation. Moreover, your total hours claimed during
5
these time periods casts further doubt on the accuracy of the
submissions. From July 1, 2009 to June 30, 2010 – the
period for which we have the highest volume of claims data
analyzed – you billed nearly 2,600 hours, which is a high
number of billable hours for any attorney, particularly within
Iowa. And in July 2009, you billed 353.8 hours – an amount
that is highly improbable for an individual to bill in a single
month, considering that it would require billing more than
eleven hours a day for thirty-one days straight, and keeping
in mind that such a monthly rate would result in annual
billable hours totaling 4,245.6.
The SPD review also revealed discrepancies with Meyer’s claims for
mileage reimbursement. Specifically, Meyer at times billed multiple clients
for the full mileage to the same location on the same day. Langholz
determined at least 2853 miles of reimbursement were improperly claimed.
Meyer paid the SPD $998.60 in an effort to resolve the contention that she
overbilled mileage.
It became apparent that improprieties with the SPD billing fees and
mileage expenses were not limited to Meyer. As a result, the state auditor
conducted a special investigation of the SPD. Meyer and thirteen other
attorneys were audited, leading to disciplinary charges. See Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Noel, 923 N.W.2d 575, 580, 591 (Iowa 2019)
(suspending an attorney’s license for one year in a disciplinary case that
arose from this SPD audit); Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Mathahs, 918 N.W.2d 487, 491, 500 (Iowa 2018) (suspending an attorney’s
license for sixty days in a disciplinary case that arose from this SPD audit).
The audit included an examination of Meyer’s fees and expenses from
August 2009 through August 2013. The auditor found thirty days on
which Meyer billed SPD twenty-four hours or more. And on 317 days,
Meyer billed SPD 12.1 hours or more for combined billings totaling
$101,220. For the same period, the auditor identified 147 trips in which
6
Meyer duplicated her mileage reimbursement, totaling $2768.55 for 7910
miles traveled.
B. The Criminal Proceedings. In June 2016, the Iowa attorney
general filed a two-count trial information against Meyer. Count I charged
Meyer with first-degree fraudulent practice, a class “C” felony, in violation
of Iowa Code sections 714.8(3), 714.9, and 714.14 (2016). Count II
charged Meyer with first-degree theft, a class “C” felony, in violation of
Iowa Code sections 714.1(1), 714.1(3), 714.2(1), and 714.3. The state
alleged Meyer “did knowingly tender false certificates given in support of
claims for compensation, where the total amount of money exceeds
$10,000” and “did take possession of property of the State of Iowa with the
intent to deprive thereof, or did obtain a transfer of possession of the
property . . . by deception, where the amount of money involved exceeds
$10,000” from 2009 to June 30, 2013.
Meyer entered a written Alford 1 plea to the lesser included offense of
third-degree theft, an aggravated misdemeanor, in violation of Iowa Code
sections 714.1(3) and 714.2(3). The statutory value of third-degree theft
is capped at property not exceeding $1000. Iowa Code § 714.2(3). Meyer’s
Alford plea stated,
I have read the Minutes of Testimony filed with the Trial
Information, and do not contest the accuracy of those minutes
except for: I am pleading guilty because I understand that a
reasonable jury could find me guilty beyond a reasonable
doubt, and enter this plea with the advice of counsel and to
take advantage of the plea agreement.
The parties jointly recommended probation for two years and that Meyer
pay restitution. The district court accepted the plea, finding there was
“strong evidence of [Meyer]’s guilt which substantially negate[d] [her] claim
1North Carolina v. Alford, 400 U.S. 25, 91 S. Ct. 160 (1970).
7
of innocence.” On April 26, 2018, the district court sentenced Meyer to
two-year’s probation, a deferred judgment, and a $625 civil penalty. Meyer
was ordered to pay restitution payments in an amount to be determined
at a later date.
The attorney general requested $102,989.95 in restitution,
comprised of $101,220 in excess billing fees and $2768.55 in improper
mileage expenses, less the $998.60 that Meyer previously paid the SPD.
Meyer agreed to the attorney general’s requested restitution provided that
the SPD filed a partial satisfaction for $53,808.82—the approved amount
of her pending, postaudit services that she provided under her contract
“other than for the events giving rise to this criminal prosecution.” In
accordance with this agreement, the district court ordered Meyer to pay
the full restitution amount of $102,989.95, and the SPD filed a partial
satisfaction in the amount of $53,808.82. Meyer then entered into a
payment plan requiring $250 each month until she paid the remaining
$49,181.13 in full.
C. The Disciplinary Proceedings. Meyer informed the Board of
her third-degree theft Alford plea. On May 31, 2019, the Board filed an
amended three-count complaint against Meyer, alleging she violated Iowa
Rule of Professional Conduct 32:1.5(a) (unreasonable fees or expenses),
32:8.4(b) (commission of a criminal act), and 32:8.4(c) (conduct involving
dishonesty, fraud, deceit, or misrepresentation). The Board alleged Meyer
(1) collected an unreasonable fee for billing the SPD for services she did
not provide; (2) collected an unreasonable amount for expenses billed to
SPD for miles she did not travel; (3) committed a criminal act, theft by
deception, that reflected adversely on her honesty, trustworthiness, or
fitness as a lawyer; and (4) engaged in conduct involving dishonesty, fraud,
deceit, or misrepresentation by billing SPD for fees she did not earn and
8
expenses she did not incur. According to the Board, the conduct at issue
was established by Meyer’s Alford plea to third-degree theft. Meyer
answered, admitting most of the allegations in the complaint, including
the preclusive effects of her Alford plea. Pursuant to Iowa Court Rule
36.17(4)(c), the Board provided Meyer with notice of its intent to invoke
issue preclusion “with regard to all matters resolved in a criminal
proceeding in the Iowa District Court for Polk County . . ., which resulted
in a finding of guilt.”
D. The Commission Hearing and Recommendation. The
commission held a multiday hearing beginning May 30. The Board’s case
focused on three events: the SPD’s internal investigation of Meyer’s
billings, the state auditor’s special investigation that included Meyer’s
billings, and the criminal case against Meyer that resulted in her Alford
plea to third-degree theft. Meyer consistently argued that “[s]he did the
work, she billed for the work, [and] she was entitled to be paid for the
work.” She acknowledged there were billing irregularities, which she
attributed to the way she and her staff billed the SPD. Meyer never denied
her responsibility for the billing irregularities.
On November 7, the commission determined Meyer’s Alford plea
demonstrated she violated rules 32:1.5(a), 32:8.4(b), and 32:8.4(c), finding
she “engaged in a criminal act that reflects adversely on her honesty or
trustworthiness[] and also engaged in conduct that involves dishonesty or
deceit.” The commission found the Board failed to prove that Meyer billed
for time not actually worked beyond the $1000 established by her Alford
plea. Accordingly, the commission determined a sixty-day suspension was
appropriate.
9
II. Standard of Review.
We review attorney disciplinary proceedings de novo. Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Rhinehart, 827 N.W.2d 169, 171 (Iowa 2013).
The Board must prove the rule violation by a convincing preponderance of
the evidence. Mathahs, 918 N.W.2d at 489. A convincing preponderance
of the evidence is more demanding than the civil preponderance-of-the-
evidence standard but less demanding than the criminal beyond-a-
reasonable-doubt standard. See Moran, 919 N.W.2d at 758. We
respectfully consider the commission’s findings, but we are not bound by
them. Noel, 923 N.W.2d at 582. “Upon proof of misconduct, we may
impose a greater or lesser sanction than the sanction recommended by the
commission.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Bauermeister, 927
N.W.2d 170, 173 (Iowa 2019) (quoting Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Templeton, 784 N.W.2d 761, 764 (Iowa 2010)).
III. Ethical Violations.
A. Prohibition Against Unreasonable Fees—Rule 32:1.5(a). This
rule provides, “A lawyer shall not make an agreement for, charge, or collect
an unreasonable fee or an unreasonable amount for expenses, or violate
any restrictions imposed by law.” Iowa R. Prof’l Conduct 32:1.5(a). We
have said that the fees under rule 32:1.5(a) “must be ‘reasonable under
the circumstances.’ ” Noel, 923 N.W.2d at 585 (quoting Iowa R. Prof’l
Conduct 32:1.5(a) cmt. [1]).
We give preclusive effect to Meyer’s Alford plea to third-degree theft
by deception in the amount of $1000. See Emp’rs Mut. Cas. Co. v.
Van Haaften, 815 N.W.2d 17, 28 (Iowa 2012) (holding the preclusive effect
of an Alford plea is limited to the elements of the offense, including the
upper limit on the dollar value). Based on issue preclusion, the
commission found Meyer violated rule 32:1.5(a) by charging an excessive
10
$1000. The commission, however, found the Board otherwise failed to
prove Meyer billed for work she did not perform and declined to consider
the six-figure criminal restitution judgment in calculating the amount
Meyer overcharged the SPD. We do not give the restitution award
preclusive effect here. Yet the fact that Meyer agreed to reimburse the SPD
$102,989.95 in the criminal proceeding undermines her claim in this
disciplinary proceeding that she overcharged the SPD by much less. We
need not determine the exact amount Meyer overcharged the SPD, but we
agree with the Board that the amount far exceeds the $1000 ceiling for
third-degree theft.
The state auditor discovered Meyer billed more than twenty-four
hours in a day on thirty different days. On thirty-eight different days, the
state auditor found Meyer billed between twenty and 23.9 hours per day.
In one month, July 2009, Meyer billed the SPD for 353.8 hours. That
would require Meyer to bill an average of eleven hours daily for thirty-one
straight days, an accomplishment Langholz aptly described as “highly
improbabl[e] for an individual to bill in a single month.” We agree.
Meyer testified she often worked beyond customary hours and
during weekends and blamed her office’s billing practices for inaccurately
entering the dates of work actually performed, thereby artificially inflating
the number of hours in multiple cases piled onto the same day. “[S]loppy
billing practices” do not excuse violations of rule 32:1.5(a). Noel, 923
N.W.2d at 586. And Langholz credibly noted Meyer’s pattern of billing did
not justify the high billing days. He determined the days surrounding the
high billing days were not as low as he expected, and when viewed in
weekly, monthly, or yearly blocks of time, he did not believe the billable
hours were legitimate. For example, in fiscal year 2010, Meyer claimed
more than $160,000 in fees, or more than 2660 billable hours.
11
In addition, Meyer acknowledged that she overbilled the SPD for
mileage expenses and indeed reimbursed the SPD $998.60 for excessive
expenses billed. The state auditor’s report identified 147 trips in which
Meyer duplicated her mileage reimbursement, totaling $2768.55 for 7910
miles traveled. Her excessive mileage reimbursement alone violates rule
32:1.5(a)’s prohibition against charging unreasonable expenses. See id.
We determine that the Board proved by a convincing preponderance
of the evidence that Meyer violated rule 32:1.5(a).
B. Conduct Reflecting Adversely on the Attorney’s Fitness to
Practice Law—Rule 32:8.4(b). Rule 32:8.4(b) states, “It is professional
misconduct for a lawyer to . . . commit a criminal act that reflects adversely
on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other
respects.” Iowa R. Prof’l Conduct 32:8.4(b). Again applying issue
preclusion, we find Meyer’s Alford plea establishes she committed a
criminal act. Not every criminal act reflects adversely on the attorney’s
fitness to practice law. See Templeton, 784 N.W.2d at 767. “There must
be some rational connection other than the criminality of the act between
the conduct and the actor’s fitness to practice law.” Noel, 923 N.W.2d at
587 (quoting Templeton, 784 N.W.2d at 767). We consider the attorney’s
mental state, the disrespect the act demonstrates for the law or law
enforcement, the presence or absence of a victim and the actual or
potential injury, and the existence of a pattern of criminal conduct. See
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Sears, 933 N.W.2d 214, 220
(Iowa 2019).
In Noel, we found that the misconduct of an SPD-contracted
attorney, who repeatedly billed for services he did not provide while
representing indigent clients, was “directly connected to his fitness to
practice law.” 923 N.W.2d at 587. We reiterated “an attorney’s conduct
12
‘that diminishes “public confidence in the legal profession” ’ is ‘conduct
that reflects adversely on a lawyer’s fitness to practice law.’ ” Id. (quoting
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wheeler, 824 N.W.2d 505, 510–
11 (Iowa 2012)). We reach the same conclusion as to Meyer’s criminal act.
We find Meyer’s conduct diminishes public confidence in the legal
system. Meyer disregarded her responsibility to avoid submitting billing
errors to the SPD for indigent defense work. See id. We agree with the
commission’s finding that Meyer violated rule 32:8.4(b).
C. Conduct Involving Dishonesty, Fraud, Deceit, or
Misrepresentation—Rule 32:8.4(c). Rule 32:8.4(c) provides, “It is
professional misconduct for a lawyer to . . . engage in conduct involving
dishonesty, fraud, deceit, or misrepresentation.” Iowa R. Prof’l
Conduct 32:8.4(c). To show a violation of rule 32:8.4(c), the Board must
prove “the attorney acted with ‘some level of scienter’ rather than mere
negligence.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Green, 888 N.W.2d
398, 403–04 (Iowa 2016) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd.
v. Haskovec, 869 N.W.2d 554, 560 (Iowa 2015)); see Rhinehart, 827 N.W.2d
at 182 (holding the Board did not prove a violation of rule 3:8.4(c) because
“there [was] no evidence that [the attorney] was dishonest, deceitful, or
that he committed fraud or made any misrepresentation”). “The
dispositive question ‘is whether the effect of the lawyer’s conduct is to
mislead rather than to inform.’ ” Noel, 923 N.W.2d at 588 (quoting Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Suarez-Quilty, 912 N.W.2d 150, 158
(Iowa 2018)).
The record must show Meyer “acted knowingly, intentionally, or with
the aim to mislead.” Id. (quoting Suarez-Quilty, 912 N.W.2d at 158). In
Wheeler, we found an attorney engaged in conduct involving
misrepresentation because he pled guilty to knowingly making a false
13
statement to a financial institution. 824 N.W.2d at 511. Here, Meyer
entered an Alford plea to third-degree theft. Meyer’s “guilty plea,
notwithstanding its Alford character, precludes [her] from contending that
[she is] not guilty of that offense.” Iowa Supreme Ct. Bd. of Prof’l Ethics &
Conduct v. Engelhardt, 630 N.W.2d 810, 814 (Iowa 2001). “A person
commits theft when the person . . . [o]btains the labor or services of
another, or a transfer of possession, control, or ownership of property of
another, or the beneficial use of property of another, by deception.” Iowa
Code § 714.1(3). The relevant definition of “[d]eception” means knowingly
“[c]reating or confirming another’s belief or impression as to the existence
or nonexistence of a fact or condition which is false and which the actor
does not believe to be true.” Id. § 702.9(1). By pleading guilty to theft by
deception, Meyer acknowledged that when she submitted her billings and
reimbursements, she “acted knowingly, intentionally, or with the aim to
mislead.” Suarez-Quilty, 912 N.W.2d at 158 (quoting Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Guthrie, 901 N.W.2d 493, 498 (Iowa 2017)).
We agree with the commission that Meyer violated rule 32:8.4(c).
IV. Sanction.
Meyer argues a thirty-day suspension of her license is sufficient,
while the Board seeks a one-year suspension. The commission
recommended a sixty-day suspension. To calibrate the appropriate
sanction, we consider
the nature of the violations, the attorney’s fitness to continue
in the practice of law, the protection of society from those unfit
to practice law, the need to uphold public confidence in the
justice system, deterrence, maintenance of the reputation of
the bar as a whole, and any aggravating or mitigating
circumstances.
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Boles, 808 N.W.2d 431, 441
(Iowa 2012) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Casey, 761
14
N.W.2d 53, 61 (Iowa 2009) (per curiam)). Prior cases are instructive, see
Mathahs, 918 N.W.2d at 494, but we “rarely encounter cases [with] the
exact same conduct,” Iowa Supreme Ct. Att’y Disciplinary Bd. v.
McGinness, 844 N.W.2d 456, 464 (Iowa 2014).
Last term, we suspended two lawyers who overcharged the SPD. We
imposed a sixty-day suspension in Mathahs, 918 N.W.2d at 500, and a
one-year suspension in Noel, 923 N.W.2d at 591. “Generally, our
sanctions for attorneys who charge and collect unreasonable fees range
from sixty days to two years.” Id. at 588–89 (collecting cases). In our view,
Meyer’s misconduct is comparable to Noel’s and worse than Mathahs’s.
In Mathahs, the attorney billed the SPD for excessive hours and
mileage, violating rules 32:1.5(a) (unreasonable fees) and 32:5.3(b) (failure
to supervise staff). 918 N.W.2d at 489–91. But the Board stipulated
Mathahs did not violate rules 32:8.4(b) and (c), and we found no
misrepresentation or deception. Id. at 497. We noted the attorney
general’s investigation closed without any criminal charges. Id. The
attorney general found Mathahs’s hours “were high but believable” and
“could not locate any billings for events or work that did not actually
occur,” while also concluding “the billing errors appeared much more like
accidental and less like intentional theft.” Id. Unlike Mathahs, Meyer was
convicted of theft by deception and violated rules 32:8.4(b) (criminal act)
and (c) (deceit). Meyer’s hours were high and unbelievable. That Meyer
“received a deferred judgment does not excuse [her] violation of [the]
disciplinary rule[s].” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carroll, 721
N.W.2d 788, 792 (Iowa 2006). A sixty-day suspension is insufficient for
Meyer.
In Noel, the auditor’s investigation “resulted in two criminal
convictions for fourth-degree theft, and Noel both admitted to and was
15
convicted of billing for events that he did not actually attend.” 923 N.W.2d
at 589. Noel was sentenced to probation for two years, fully suspended
jail sentences of thirty days and one year, mandatory minimum fines of
$315 each count, and ordered to pay $14,697.45 in restitution. Id. at 581.
We found “Noel engaged in repeated deception over a period of years.” Id.
at 590. Noel persisted in arguing his misconduct resulted from honest
mistakes, which we concluded “evidenc[ed] a lack of an actual appreciation
of [his] wrongful conduct.” Id. at 589 (alteration in original) (quoting Iowa
Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Tofflemire, 689 N.W.2d 83, 93
(Iowa 2004)). Noel admittedly discovered he was overbilling the SPD for
mileage yet made no effort to remedy the problem before Langholz informed
him his contract was in jeopardy. Id. at 590. Noel was a magistrate, such
that his misconduct further undermined public confidence in our
profession. Id. Noel’s partial reimbursement and previously unblemished
disciplinary record were insufficient to avoid our imposition of a one-year
suspension, the sanction recommended by the commission. Id. at 590–
91.
The commission recommended a sixty-day suspension for Meyer. In
our view, the commission underestimated the dollar amount Meyer
overcharged the SPD. Her court-ordered restitution, $102,989.95, is
larger than Noel’s $14,697.45, and she pled guilty to a more serious theft
offense. But mitigating factors cut against imposing a longer suspension
on Meyer than Noel. The SPD never questioned the quality of Meyer’s
representation of her clients or claimed any of her clients were harmed.
To the contrary, a retired district court judge stated in an affidavit that
Meyer was “always extremely well-prepared, on time[,] and a superior
professional, caring advocate for the children she represented.” He noted
foster care support groups had urged him to continue appointing Meyer
16
as guardian ad litem for children because of her diligence, responsiveness,
and “that she always went above and beyond what other
guardians ad litem did to help the children she served.” A district
associate judge also submitted an affidavit stating that Meyer was her
“first choice when appointing counsel” in juvenile court matters and
described her as a “superb advocate.” We consider their testimony in
mitigation. See Noel, 923 N.W.2d at 590.
Another mitigating factor is that aside from a private admonition,
Meyer has never previously been subject to professional discipline. Id. at
591 (considering an unblemished disciplinary record in mitigation). Yet
another mitigating factor is that Meyer has volunteered for pro bono cases
at the Iowa Veterans Home in Marshalltown and through the Polk County
and Iowa Legal Aid Volunteer Lawyer Projects. See Mathahs, 918 N.W.2d
at 498–99 (considering pro bono work in mitigation). Finally, we consider
Meyer’s partial payments and stipulation to pay the full remaining amount
of restitution ordered to make the SPD whole through monthly payments.
See id. at 499 (considering voluntary restitution and repayments in
mitigation). Meyer has already reimbursed the SPD over $53,000 and is
making monthly payments on the net amount due.
On balance, we determine that a one-year suspension is appropriate
in this case.
V. Disposition.
We suspend Meyer’s license to practice law in this state with no
possibility of reinstatement for one year. The suspension applies to all
facets of the practice of law, as provided in Iowa Court Rule 34.23(3), and
requires notification to clients, as provided by Iowa Court Rule 34.24. The
costs of this proceeding are assessed against Meyer pursuant to Iowa
Court Rule 36.24(1). To establish her eligibility for reinstatement, Meyer
17
must file an application pursuant to Iowa Court Rule 34.25 and must show
she has continued making the stipulated monthly payments in restitution.
See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Taylor, 887 N.W.2d 369, 383
(Iowa 2016) (requiring the attorney to “demonstrate she has made every
payment to federal and state tax authorities required of her under the
terms of any payment plans in effect” to establish eligibility for
reinstatement).
LICENSE SUSPENDED. | 01-03-2023 | 05-15-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/5902790/ | Mahoney, P. J.
Appeal from an order and judgment of the Supreme Court (Dier, J.), in favor of defendant, entered November 20, 1986 in Warren County, upon a dismissal of the complaint at the close of plaintiffs case.
On September 12, 1982, plaintiff and defendant, neighbors in the Town of Warrensburg, Warren County, were cutting logs into firewood with the use of chain saws. At some point, something caused plaintiffs chain saw to kick back. Plaintiff used his hand to shield his face from the chain saw and his hand was seriously injured.
Plaintiff commenced an action against defendant alleging ordinary negligence. Upon demand plaintiff served a verified bill of particulars alleging, inter alia, that defendant was negligent in using his chain saw on other logs in the vicinity *879of plaintiff. However, at trial plaintiff refuted this allegation and maintained that defendant had been using his saw on the same log that plaintiff was sawing. After this testimony was given, plaintiff’s counsel moved for leave to amend the pleadings to conform to the proof (CPLR 3025 [c]). Supreme Court denied the motion.
Additionally, Supreme Court refused to allow plaintiff to introduce expert testimony because of plaintiff’s failure to comply with the requirements of CPLR 3101 (d) (1), which provides that, upon a demand, a party must disclose the identity of expert witnesses and the substance of their testimony. At the close of plaintiff’s case, Supreme Court granted defendant’s motion to dismiss the complaint pursuant to CPLR 4401 on the ground that plaintiff had failed to prove a prima facie case of negligence. This appeal by plaintiff ensued.
Initially, we hold that Supreme Court properly denied plaintiff’s motion for leave to amend the pleadings to conform to the proof. While this statutory provision extends great latitude to a trial court and permits amendments to pleadings during trial in the absence of prejudice to the nonmoving party (see, Murray v City of New York, 43 NY2d 400, 405), a trial court may properly deny such relief where the party knew of the evidentiary variance well before the trial. We have stated that "[w]hile permission to amend a complaint should be freely given * * * a motion for that relief should be made promptly after discovery or awareness of the facts upon which such an amendment is predicated” (De Carlo v Economy Baler Div., 57 AD2d 1002). Here, plaintiff gave the same testimony at an examination before trial as he gave at trial and such was at variance with the facts alleged in the pleadings. Thus, even though defendant concedes that he would incur neither prejudice nor surprise if the amendment were allowed, Supreme Court still acted properly in denying the motion because it is clear that plaintiff could have made his motion at a much earlier point in time.
Next, we conclude that Supreme Court properly precluded plaintiff from introducing expert testimony under CPLR 3101 (d) (1). That provision essentially provides that upon request, parties must identify all persons whom they expect to call as experts at trial and must disclose the subject matter that the experts will discuss and the grounds for their opinion. The statute is applicable to all actions commenced on or after July 1, 1985 (L 1985, ch 294, § 25). Plaintiff commenced this action on June 6, 1985 and argues for the first time on appeal that the provision is inapplicable. Although the statute became *880effective after this action was commenced, plaintiff cannot successfully raise the issue of applicability of the statute for the first time on appeal (see, Nelson v Times Sq. Stores Corp., 110 AD2d 691, appeal dismissed 67 NY2d 645; Glielmi v Toys "R" Us, 94 AD2d 663, affd 62 NY2d 664; Matter of Van Wormer v Leversee, 87 AD2d 942). Accordingly, plaintiff has waived his contention based on the applicability of CPLR 3101 (d) (1).* Further, plaintiff argued at trial that his expert witness should be permitted to testify since he was located only several days before trial. This argument is unpersuasive. Given plaintiff’s own attempt to apply the statute, and the authority of case law, plaintiff cannot argue now that the statute does not apply.
Finally, we hold that Supreme Court properly granted defendant’s motion pursuant to CPLR 4401 to dismiss plaintiff’s complaint on the ground that he failed to establish a prima facie case. A motion under CPLR 4401 should only be granted if there is no rational view of the evidence which a fact finder could take which would support a finding for the nonmoving party. Here, the evidence produced by plaintiff was insufficient to establish a prima facie case of defendant’s liability (see, Sheehan v City of New York, 40 NY2d 496). While the proof clearly demonstrated that defendant owed plaintiff a duty of care, there was no proof to establish that defendant breached such duty.
Order and judgment affirmed, with costs. Mahoney, P. J., Kane, Casey, Weiss and Levine, JJ., concur.
Case law authorizing the raising of an issue for the first time on appeal is generally applicable only to respondents, not appellants (see, Sega v State of New York, 60 NY2d 183, 190, n 2). | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/6826238/ | CONTENTS
Issues Page
(1) I.R.C. § 51 Tax Surcharge 425
(2) I.R.C. § 421(b) Deduction 425
(3) Air Craft Leases 425
(4) I.R.C. §§ 921, 922 (WHTC) 425
(5) Bad Debt Deduction (SCORE) 425
(6) Investment Tax Credits for Films 425
(7) Computational Adjustments 426
(8) Title Plant Leases 426
Facts 427
Disposition 436
Conclusion 443
(9) Charitable Contributions 443
Facts 444
Property Involved 444
UA Business 448
American Film Institute 449
Library of Congress 450
University of Wisconsin 451
Negotiations for Conveyances 451
Gift Instruments 455
Valuations 458
Depreciation Recapture 463
Disposition 464
Final Positions 464
Library Property 467
Date of Conveyance 474
Conclusion 474
University Property 475
Ziv-TV Original 35mm Negatives 480
Date of Completion 480
Valuation of Witnesses 481
Valuation of Categories 484
Markets 486
Conclusions 489
Summary 491
(10) Order on All Claims 491
OPINION
HARKINS, Senior Judge:
Transamerica Corporation, plaintiff, a Delaware corporation with principal offices in San Francisco, California, in tax years 1968 and 1969 filed consolidated federal income tax returns as the common parent of an affiliated group of corporations. In 1968, the affiliated group consisted of plaintiff and 228 includable subsidiaries; in 1969, the affiliated group consisted of plaintiff and 258 includable subsidiaries.
On March 9,1979, plaintiff filed two complaints in the United States Court of Claims, relative to the taxable years ending December 31,1968, and December 31,1969, respectively. On September 28, 1979, the two cases were consolidated for all purposes, except computation and entry of *425judgment. Both complaints were amended in June 1980. As amended, each complaint challenged IRS determinations on eight substantive issues.
The cases initially were assigned to Judge Miller. During pretrial preparation, the issues were bifurcated, with the question of liability on each issue to be resolved first, and computation of damages on all issues to be deferred until entry of final judgment. Appeals of the various decisions on all liability and damages issues would follow final judgment on the entire case. On September 18, 1986, prior to determination of liability on two of the contested issues, the cases were reassigned to this court.
In a joint stipulation dated December 18, 1986, the parties agreed to waive their rights to retrial of the liability issues that had been resolved by Judge Miller. The stipulation applies to the following matters:
1. IRC § 51 Tax Surcharge Issue: On July 5, 1984, on cross-motions for summary judgment, defendant’s motion for partial summary judgment was allowed. See opinion in 5 Cl.Ct. 477 (1984).*
2. IRC § 421(b) Deduction (Stock Option Issue): Trial of this issue was held in January 1984 in San Francisco, California. On December 18, 1984, an opinion was filed that concluded plaintiff was not entitled to the deductions involved and that this claim would be dismissed. See opinion in 7 Cl.Ct. 119 (1984).
3. Aircraft Leases Issue: This issue concerns recapture of depreciation and investment credit on leases of certain aircraft. Trial of this issue was held in January 1984 in San Francisco, California. On February 22, 1985, an opinion was filed that concluded the leases in fact were conditional sale contracts and that plaintiff’s claims with respect to the aircraft leasing issue would be dismissed. See opinion in 7 Cl.Ct. 441 (1985).
4. IRC §§ 921, 922 — Western Hemisphere Trade Corporation (WHTC) Deduction: For years 1968 and 1969, plaintiff took certain deductions for members of the affiliated group that qualified as Western Hemisphere trade corporations. After plaintiff and the IRS agreed upon adjustments for each year, certain deductions claimed by plaintiff remained in dispute. On March 31, 1982, plaintiff filed a motion for partial summary judgment, and on April 7, 1983, defendant filed a response in which it did not contest the motion as to either year. By order dated June 14, 1983, plaintiff’s motion for partial summary judgment was allowed.
5. Bad Debt Deduction: In 1969, a subsidiary of plaintiff entered an agreement with stockholders of Scientific Commercial Research Services Limited (SCORE) to purchase shares of and lend money to SCORE. After a default settlement, debt remained outstanding and plaintiff deducted the outstanding notes as bad debt, which the IRS disallowed. This same issue, with respect to later years, was pending in Federal District Court for the Northern District of California. In a memorandum and order dated November 14, 1984, Judge Miller accepted the parties’ stipulation that the SCORE issue in this court would be bound by the decision of the District Court on the same issue. On January 24,1986, the parties to the District Court proceeding agreed to a settlement of the SCORE issue. In accordance with the November 14,1984, order, the stipulation of the parties in the District Court proceedings is binding in this court, and no further proceedings remain in this court on this issue, other than calculations pursuant to the terms of the settlement agreement.
6. Investment Tax Credits for Films: In its determination of allowable investment tax credits for films for tax years 1968 and 1969, the IRS did not account for certain carryover credits for the years 1962 through 1966, certain credits earned in 1968 and 1969, and certain carryover credits for 1967. Plaintiff's *426claims on these issues were settled by the parties’ agreement that the Government would withdraw its objections to the allowance of a claim for refund based on the restricted interest calculation attributable to investment tax credits for films, and that such investment tax credits plus interest could carry forward and associated net operating loss claimed in 1970 could carryback. This agreement was reported to Judge Miller at a pretrial conference on July 8, 1982. In the December 18, 1986, stipulation, which is accepted by the Court, the parties agree that the previous agreement is binding and that this issue is settled.
7. Certain computational issues, such as the propriety of and calculations for interest in assessed deficiency for tax year 1969, and carryback adjustments, remain. These remaining issues will be calculated and resolved by mutual agreement after final decisions on the underlying substantive issues.
The two remaining liablity questions that were transferred to this court on September 18, 1986, involved the IRS recharacteri-zation of certain title plant leases, and the IRS disallowance of deductions for claimed charitable contributions of film property to the Library of Congress and the University of Wisconsin. Liability as to the title plant leases was determined in an opinion filed on March 8, 1988. Trial of the charitable contributions issue was completed on June 22, 1987, and posttrial briefing was completed on December 18, 1987.
The March 8, 1988,. opinion on the title plant leases, which was not reported when filed, is included in this opinion. Resolution of the charitable contributions issue follows.
TITLE PLANT LEASES
Transamerica’s involvement in the title plant leases issue is a result of the acquisition of Title Guaranty Company (Title Guaranty), a Colorado corporation doing business in the Denver metropolitan area. The acquisition occurred during the period October 10, 1962, through December 20, 1962, by means of an exchange of common stock. By December 20, 1962, Trans-america had acquired 100 percent of the issued outstanding stock of Title Guaranty.
When it was acquired, Title Guaranty had lease arrangements that involved two title plants, one in Boulder County, and one in Mesa County, Colorado. The Boulder County lease, effective on January 1, 1961, had as parties the Boulder County Abstract of Title Company and members of the Hickman families. Title Guaranty, effective February 3, 1961, merged with the Boulder County Abstract of Title Company, with Title Guaranty as the surviving corporation. The lease transaction involving Mesa County was made December 28, 1961, effective January 1, 1962. The parties were Title Guaranty and a partnership composed of Richard B. Williams and G. Dale Williams doing business as the Mesa County Abstract Company.
In 1966, Transamerica transferred all of the stock of Title Guaranty to Trans-america Title Insurance Company, a California corporation that was a wholly owned subsidiary of Transamerica. In 1966, Title Guaranty changed its name to Trans-america Title Insurance Company of Colorado. On November 30, 1967, Trans-america Title Insurance Company of Colorado was liquidated into Transamerica Title Insurance Company. Transamerica Title Insurance Company succeeded to all of the rights and obligations of Transamerica Title Insurance Company of Colorado, including its rights and obligations under the Boulder and Mesa leases.
At all times material, Title Guaranty and its successors, for financial reporting purposes, treated the Boulder lease and the Mesa lease as leases. The title plants were not included as assets on its balance sheets, and rents paid were expensed on its income statements. For federal income tax purposes, the rents paid were deducted.
On its consolidated federal income tax returns, under IRC § 162(a)(3), plaintiff deducted $22,000 in payments in 1968 and 1969 on the Boulder lease. On the Mesa lease, the deduction was $6,600 for 1968 and $6,745 for 1969. On audit, the rental deductions were disallowed because the *427IRS recharacterized the leases as installment purchase contracts.
Trial of the title plant leases issue was held in Washington, D.C. on February 27-29, 1984. The parties have filed extensive stipulations of fact, proposed findings of fact, and posttrial briefs during the period December 2, 1983, and April 8, 1987.
The issue to be determined is whether defendant properly recharacterized, as conditional sales contracts rather than leases, the agreements under which Title Guaranty gained access to the Boulder County and Mesa County title plants.
FACTS
Most of the essential facts have been stipulated by the parties. The parties’ differences arise from the conclusions to be drawn from the undisputed facts, and the precedent applicable to those facts and conclusions.
The title plant leases issue involves (1) the business of preparing and selling abstracts of title, and (2) the title insurance business.
An abstract of title consists of a chronological list and description of all recorded documents affecting the title to a particular parcel of real property. In general, the title abstracting business consists of preparing abstracts of title for a fee. In the usual situation, such abstracts are requested by an attorney who has been engaged by a prospective vendee or mortgagee of property to render an opinion on the state of the vendor’s or mortgagor’s title. The attorney’s opinion is based largely on the facts disclosed in the abstract of title.
One of the principal assets of a title abstracting business is its “title plant.” A title plant consists of a specialized set of books, records, maps, charts, plats, indices, film and related materials (also referred to as “abstracting materials”) covering all transactions involving real property located within a particular county. Such transactions are indexed according to parcels of property. This is in contrast with the governmental indexing system maintained by the County Recorders in the various counties in Colorado (and most other states), which index real property transactions by the names of the grantor and the grantee, mortgagor and mortgagee, etc.
A title plant is established and maintained by employees of the title company making a record (or “abstract”) of every document filed with a county recorder on a daily basis, briefly noting the vital information involved (such as the particular parcel, the nature of the document, the persons involved, and other relevant information), which information is then transcribed onto the books maintained by the title company. Information is also gathered from other official sources, including but not limited to judgments and bankruptcy records that may affect title to real property and that are recorded by the clerks of various courts.
The “books” of a title plant consist of two types, tract books and abstract books. The tract books consist of the daily tract indices of recorded documents affecting real property. The abstract books consist of the transcribed abstracts of recorded title documents. The “maps” of a title plant are also of two types, subdivision maps and arbitrary maps. Subdivision maps are copies of recorded maps subdividing larger parcels of real property. Arbitrary maps are unofficial subdivision maps prepared by the title company for its own internal use in searching titles. “Plats” is an alternate term for official subdivision maps; “charts” is an'alternate term for arbitrary maps. The term “indices” is an alternate term for tract books. The term “records” refers to all of the records described above, plus miscellaneous records such as judgment and bankruptcy records and microfilm records.
A title plant may have an indefinite useful life because its records will always be useful to some extent unless, of course, they are somehow rendered obsolete by a change in the law or some advance in technology. It is good business practice in the title insurance industry and, especially, in the title abstracting business to maintain a complete title plant back to the date that patent was issued. Nevertheless, the actu*428al use and resulting value of older title plant records becomes less frequent because, each time an abstract or insurance policy is issued for a piece of property, the general practice is to review the title plant records only for transactions that have occurred since the issuance of the last abstract or insurance policy. The proportion of times requiring recourse to the older records would still be less overall even if the volume of real estate transactions increase as a given county prospers.
The title insurance business consists of selling policies of insurance guarantying a particular state of title with respect to a parcel of property. A title insurance policy is also based upon an abstract of title, usually prepared from the insurance company’s title plant records. From the title abstracting-insurance company’s viewpoint, the principal differences between title abstracting and title insurance are (i) the basis of the fee charged (the premium for a title insurance policy is based upon the insured value of the property whereas the fee charged for an abstract of title is based upon the number of documents in the chain of title since the last abstract was certified), (ii) the nature of the risk assumed by the company (errors and omissions in an abstract of title give rise to a cause of action, if any, based upon negligence, whereas an insurance company is absolutely liable for loss, up to the face amount of the policy, resulting from defects of title not excepted in the policy), and (iii) the elimination of the attorney’s opinion of title (although attorneys employed by the company examine the abstracts when necessary).
Title Guaranty
Title Guaranty’s primary business from 1911 until at least 1962 was preparing and selling abstracts of title with respect to real property. Until 1961, Title Guaranty’s title abstracting business was limited to the Denver, Colorado metropolitan area, consisting of Denver County, Adams County, Arapahoe County, and Jefferson County. From its inception, Title Guaranty had engaged in the title insurance business.
Before 1948, the title plant records were maintained in handwritten or typewritten form. Beginning in 1948, Title Guaranty and other title companies in Colorado began to make photographic copies on microfilm of the full text of recorded title documents and to make microfilm duplicates of their records. In some cases, Title Guaranty and its successors also made microfilm copies of all of their pre-1948 handwritten or typewritten records to an arbitrarily selected prior date. These duplicate records were created and have been maintained both for more efficient operation of abstracting titles and to provide security to the title company in the event that its primary abstracting materials are destroyed. These microfilm records are the “film” referred to as part of the abstracting materials of a title plant.
Colorado has for many years maintained a system of licensing title abstractors. Colorado Rev.Stat. § 12-1-101, et seq. Among the statutory requirements for obtaining a license are that the applicant own or have access to a reasonably complete title plant and, in a county already having a licensed abstractor, that another licensed abstractor is needed, based upon current or anticipated business.
Beginning in the mid-1950’s Title Guaranty was anxious to expand its title insurance business as rapidly and as extensively as circumstances permitted. Among the obstacles faced by Title Guaranty in the mid-1950’s to expanding its title insurance business throughout Colorado were a lack of staff and facilities in counties outside the four-county Denver area, a reluctance on the part of the community at large to accept title insurance as true insurance and in lieu of the traditional attorney’s opinion of title, and the fact that Title Guaranty would have to compete with local businessmen (including abstractors and attorneys) who were securely established in the title business in the various counties of Colorado.
As a first step to solving its lack of staff and facilities outside the four-county Denver area, Title Guaranty established agency relationships with the owners of indepen*429dent title abstracting businesses in other counties (although some agency relationships had been established as early as 1942). Through such independent agents, Title Guaranty was able to sell title insurance in counties where it had no staff or facilities.
Title Guaranty’s independent insurance agents were generally selected on the basis of their reputations as title abstractors. Most such agents were the only licensed abstractors and the owners of the only complete abstracting plants within their respective counties. In general, these persons were very prominent in the business communities of their respective counties and were regarded as the most important persons in such counties for purposes of securing title insurance business.
For many years prior to 1961, Title Guaranty’s major Colorado-based competitor in the title abstracting business in the four-county Denver area and for title insurance business throughout Colorado was Record Abstract and Title Insurance Company (Record Abstract). In the mid-1950’s, Title Guaranty’s competition for title insurance business from Record Abstract and larger non-Colorado-based national companies intensified. In the mid-1950’s four national title insurance companies formed a cooperative type company to establish a title plant in the four-county Denver area so that each could compete more effectively with Title Guaranty and Record Abstract for title insurance business in that area. Such competition also included attempts by Record Abstract and other companies to establish insurance agency relationships with the same persons with whom Title Guaranty had established agency relationships. In the late 1950’s and early 1960’s, Title Guaranty determined that it would be desirable to establish more permanent relationships with its independent agents in order that such agents would not be lost to Title Guaranty’s competitors.
In approximately 1959, the management of Record Abstract changed, and Lloyd Hughes (hereinafter referred to as Hughes) became President of and gained effective control over that company. Prior to 1959, Hughes and Donald Graham (an officer of Title Guaranty, hereinafter referred to as Graham) had informal discussions regarding a merger of Title Guaranty and Record Abstract. It was thought that a merger would be advantageous to both parties, and that they could compete more effectively with the larger non-Colorado based national title insurance companies.
Hughes was apprehensive of a simple merger of Record Abstract into Title Guaranty because Title Guaranty was a larger company and a consolidated board of directors would be dominated by former Title Guaranty directors. For this reason, and because Boulder County was a natural area of expansion for both companies (the City of Boulder being regarded in some respects as a suburb of the Denver metropolitan area), Hughes negotiated with Aksel Nielsen (hereinafter referred to as Nielsen), President of Title Guaranty, to make the Boulder Corporation a party to the proposed merger. Nielsen accepted Hughes’ demand that, as a condition to Record Abstract’s merger into Title Guaranty, the Boulder Corporation be made a party to the merger.
Boulder County
The Boulder County Abstract Company (hereinafter referred to as the Boulder Company) was formed in 1871. H.C. Hickman purchased an interest in the Boulder Company in 1922, increased his interest to a controlling interest in the Boulder Company in 1933, and soon thereafter became the sole owner of the Boulder Company. At all times material hereto, H.C. Hickman’s ownership interest in the Boulder Company was shared equally with his wife, Laurena 0. Hickman.
In approximately 1945, H.C. Hickman’s son, James 0. Hickman (hereinafter referred to as Hickman), began to work for the Boulder Company. In the early 1950’s, H.C. Hickman gave to Hickman a 50 percent ownership interest in the Boulder Company. At all times material hereto, Hickman’s ownership interest in the Boulder Company was shared equally with his wife, Patricia J. Hickman.
*430At or about the time of its formation in 1871, the Boulder Company established and began to maintain and update a complete title plant with respect to real property titles in Boulder County, Colorado. The Boulder Company’s title plant records date from 1865. Records predating 1876, at which time Colorado became a state, include geographically posted Territorial Commission records. The Boulder Company’s title plant contains approximately 660,-000 documents from the period 1876 through 1961. At all times material hereto, the Boulder Company’s title plant, as maintained and updated by its successors, has been the only complete title plant in Boulder County, Colorado.
From the time of its formation in 1871 until some time in the mid-1950’s, the principal business of the Boulder Company was preparing and selling abstracts of title with respect to real property located in Boulder County, Colorado. In the early 1940’s, the Boulder Company began to sell policies of title insurance with respect to property located in Boulder County, Colorado, in addition to conducting its title abstracting business. For this purpose, it entered into agreements with both Title Guaranty and with Record Abstract to act as an agent for selling policies of title insurance on behalf of such companies.
During the 1940’s, the Boulder Company’s title abstracting business constituted approximately 90 percent of its total business, and its title insurance business constituted approximately 10 percent. By 1962, title insurance business accounted for approximately 85 percent of the total business of the Boulder Company and its successor, and title abstracting business was only 15 percent of the total business.
For the period 1945 through approximately 1959, the Boulder Company was organized as a general partnership. The partners, after the early 1950’s, were H.C. Hickman, Laurena O. Hickman, Hickman, and Patricia J. Hickman. In approximately 1958, the members of the Hickman family decided to incorporate the Boulder Company. The Boulder County Abstract of Title Company (hereinafter referred to as the Boulder Corporation) was organized as a Colorado corporation in approximately 1959.
To implement its desire to limit exposure to liability, the only assets transferred by the Boulder Company to the Boulder Corporation consisted of accounts receivable, furniture and equipment, and goodwill (including its title abstracting and title insurance agency businesses), the book value of which, in the aggregate, was $20,000. The Boulder Company also arranged to have its errors and omission liability insurance coverage reissued in the name of the Boulder Corporation. Neither the Boulder Company’s title plant nor the building in which it conducted its business were transferred to the Boulder Corporation. At the time of the transfer of the business of the Boulder Company to the Boulder Corporation, there was no specific expectation or anticipation of a subsequent acquisition of the Corporation by Title Guaranty or by any other company.
The Boulder Company retained ownership of its title plant. The title plant was leased to the Boulder Corporation for rents determined by reference to the gross receipts of the Boulder Corporation.
The building in which the Boulder Company and subsequently the Boulder Corporation conducted its business was owned by The Hickman Company, a corporation all of the stock of which was owned by Hickman and Patricia J. Hickman. This building was also leased to the Boulder Corporation.
In July or August 1960, representatives of Title Guaranty approached Hickman with a proposal that the Boulder Corporation be merged into Title Guaranty at the same time as Record Abstract was to be merged, and the parties commenced negotiating the terms of the proposed merger at that time. The Hickmans did not consider selling the Boulder Company’s title plant to the Boulder Corporation. Rather, the Hickmans felt it was to their benefit to consider the package arrangement: (i) the lease; (ii) employment contract for Hickman, Sr. that ran for his life as well as his wife’s life; (iii) employment contract for *431Hickman, Jr.; and (iv) stock from Title Guaranty.
Title Guaranty did not have the funds to make an outright, lump-sum purchase of the abstracting materials owned by the Boulder Company. Even if it could have borrowed the money, it would then have been required to schedule the debt on its books and records and this, in turn, would have seriously impaired its ability to sell title insurance. Title Guaranty regarded this balance sheet distinction as important at a time when title insurance was not generally regarded as true insurance in Colorado and it, Title Guaranty, was attempting to enhance its image and expand its penetration into the business of title insurance.
In the course of the negotiations between representatives of Title Guaranty and the Boulder Corporation, it was understood that Title Guaranty would need to use the title plant then under lease to the Boulder Corporation. Graham, and subsequently Nielsen insisted that the title plant lease had to be renegotiated and a new agreement executed prior to approval of the merger because the rights and obligations of the Boulder Corporation with respect to the title plant lease (which was negotiated by the Hickmans in approximately 1959 between the Boulder Company and the Boulder Corporation) were to be assumed by Title Guaranty in the proposed merger. While technically the renegotiation was between the Boulder Corporation and the Boulder Company, in practical effect the negotiations for a new agreement covering the title plant were between the Hickman family interest, represented by Hickman, and Title Guaranty, represented by Nielsen.
On January 1, 1961, H.C. Hickman, Laurena 0. Hickman, Hickman, and Patricia J. Hickman, as partners, and the Boulder Corporation executed a Lease Agreement and Option (the Boulder Lease) to become effective on that date. In negotiating the amount to be paid under the new title plant agreement, Hickman insisted on setting forth minimum payments and Nielsen insisted upon setting forth maximum payments.
The Boulder Lease recited that, inter alia:
(a) The lessors were to lease to the Boulder Corporation all of their abstracting materials, including books, records, maps, charts, plats, indices, and film theretofore used by them in the conduct of their business of abstracting titles to real property in Boulder County for a period of 30 years beginning January 1, 1961, through January 1, 1991. The Boulder Corporation was to pay amounts designated as annual rent for the use of the abstracting materials as follows: $20,000 for the first 5-year period; $22,000 for the second 5-year period; $24,-000 for the third 5-year period; 5 percent of gross income but not less than $24,000 nor more than $40,000 for the fourth 5-year period; and 5 percent of gross income but not less than $24,000 nor more than $35,000 for the final 10-year period. No portion of the payments designated as rentals were designated as interest. One-half of each monthly payment was to be paid to H.C. Hickman and Laurena O. Hickman, and one-half of each monthly payment was to be paid to Hickman and Patricia J. Hickman.
(b) The Boulder Corporation was granted the right at the end of the Lease term to exercise an option to purchase the abstracting materials for $25,000. No payments designated as rentals were to be credited toward the option price.
(c) The abstracting materials were to remain the sole and exclusive property of the Lessors for the duration of the Lease, subject to the Boulder Corporation’s right to use such materials. All additions subsequent to January 1, 1961, to the abstracting materials were the sole and exclusive property of the Boulder Corporation.
(d) The Boulder Corporation was required to maintain fire and hazard insurance with respect to the abstracting materials of at least $100,000 and to maintain errors and omissions liability insurance in an amount not less than $100,000. If, during the period of the Lease, the abstracting materials were destroyed or substantially *432damaged, the Boulder Corporation was to replace all materials within a reasonable time at its own expense.
Negotiations between Hickman, Graham and Nielsen regarding the proposed merger of the Boulder Corporation into Title Guaranty also covered a new employment contract regarding H.C. Hickman. The employment agreement dated January 1,1961, between H.C. Hickman and the Boulder Corporation recited, inter alia, that H.C. Hickman would perform consulting services on an irregular basis for the Boulder Corporation. The Boulder Corporation was required to pay H.C. Hickman $10,000 per year from 1961 through August 15, 1967, and $5,000 per year thereafter for the remainder of H.C. Hickman’s life. In the event of H.C. Hickman’s death, the Boulder Corporation was required to pay $5,000 per year to Laurena O. Hickman for the remainder of her life.
The negotiations between Hickman and Nielsen regarding the proposed merger of the Boulder Corporation into Title Guaranty included a renegotiation of the building lease between The Hickman Company and the Boulder Corporation. On or about January 1, 1961, The Hickman Company as lessor and the Boulder Corporation as lessee entered into a lease agreement whereby, inter alia, The Hickman Company agreed to lease to the Boulder Corporation the building in which the Boulder Corporation conducted its abstract and guaranty title insurance business for a 5-year period commencing January 1, 1961, through January 1, 1966. The Boulder Corporation was required to pay rents in the amount of $800 per month. This building lease agreement was renewed on substantially identical terms for the period January 1, 1966, through January 1, 1971.
A final Plan of Merger for the merger of Record Abstract and the Boulder Corporation into Title Guaranty was approved by the Board of Directors of Title Guaranty on January 20, 1961, and by the shareholders of Title Guaranty on January 30, 1961. The Plan of Merger for the merger of Record Abstract and the Boulder Corporation into Title Guaranty recited, inter alia: Title Guaranty was designated as the surviving corporation. Upon the effective date of the merger, all rights, privileges, property, debts due, and all and every other interest of or belonging to Record Abstract and the Boulder Corporation became vested in Title Guaranty, and all rights of creditors, liens, debts, liabilities, and duties of Record Abstract and the Boulder Corporation became enforceable against Title Guaranty. Pursuant to this paragraph of the Plan of Merger, Title Guaranty succeeded to the rights and obligations of the Boulder Corporation regarding the Boulder lease, the building lease with The Hickman Company and the H.C. Hickman employment agreement. The Plan of Merger explicitly stated that the assets of the Boulder Corporation did not include the abstracting materials owned by the Boulder Company, nor the building owned by The Hickman Company, but that Title Guaranty would succeed to the Boulder Corporation’s Lease agreements with respect thereto. The merger of Record Abstract and the Boulder Corporation into Title Guaranty was effective on February 3, 1961.
Shortly after the effective date of the merger, and as negotiated among Nielsen, Hickman, Hughes, and two others, Title Guaranty entered into employment contracts with Nielsen, Hughes, Hickman, and two former Title Guaranty directors and employees, Fred Klein and Andrew Dyatt. Pursuant to these employment agreements, each of the aforementioned individuals was to be employed by Title Guaranty for 5 years at specified salaries, plus an annual bonus, each such person was to be a member of the Title Guaranty Board of Directors, and each such person was to be a member of the executive committee of such board. Hickman was actively employed by Title Guaranty and its successors from February 3,1961, until he left the company in 1971.
All amounts received from Title Guaranty and its successors under the Boulder Lease were reported as ordinary income by H.C. Hickman and Laurena O. Hickman on their joint federal income tax returns and by Hickman and Patricia J. Hickman on their joint federal income tax returns.
*433
Mesa County
The Williams family had established the Independent Abstract Company, a title abstracting business, in 1905. Richard B. Williams (Williams) entered into the title abstracting business in Grand Junction, Mesa County, Colorado, in June 1936. Williams purchased the Independent Abstract Company from his father before 1940, purchased in 1951 the only remaining title abstracting business in Mesa County, and operated his business under the name The Mesa County Abstract Company. In the mid-1950’s, Williams’ son, G. Dale Williams, began to work for him in the title abstracting business. Thereafter, Williams gave to G. Dale Williams a 30 percent share of the business. Williams and G. Dale Williams continued to operate the title abstracting business as a partnership, under the name The Mesa County Abstract Company (hereinafter referred to as the Mesa Company). In approximately 1956, Nielsen persuaded Williams to become a title insurance sales agent for Title Guaranty.
By 1940, Williams had acquired or established, and thereafter maintained and updated, a complete title plant with respect to real property titles in Mesa County, Colorado. The Mesa Company’s title plant records date from 1883, at which time Mesa County was partitioned out of Gunnison County. The Mesa Company’s title plant contains approximately 500,000 documents from the period 1883 through 1961. At all times material hereto, Williams was the only licensed title abstractor in Mesa County and the abstracting materials that were the subject of the Mesa Lease constituted the only complete title abstracting plant in Mesa County.
In 1961, Nielsen and Hickman approached Williams for the purpose of employing Williams and securing Mesa Company’s title plant by Title Guaranty. After approximately two months of discussions, Williams was persuaded to enter into an agreement. Williams was not in favor of what he termed an “outright” sale. Williams was interested in staying in the business, and in providing an employment opportunity for his son. He preferred that his payments be “spread over a period of time” rather than “getting any sizable amount of money at one time.” •
Title Guaranty did not have the funds to make an outright, lump-sum purchase of the abstracting materials owned by Williams and G. Dale Williams. Even if it could have borrowed the money, it would have then been required to schedule the debt on its books and records and this, in turn, would have seriously impaired its ability to sell title insurance. Title Guaranty regarded this balance sheet distinction as important at the time when title insurance was not generally regarded as true insurance in Colorado and it, Title Guaranty, was attempting to enhance its image and expand its penetration into the business of title insurance.
In the meetings on the negotiations underway with the Mesa Company for Title Guaranty to lease the abstracting materials of Mesa, there was no discussion regarding a lump-sum purchase of the Mesa Company’s abstracting materials. Nor were Title Guaranty’s officers authorized to negotiate or enter into such an agreement.
On December 28, 1961, Williams and G. Dale Williams and Title Guaranty executed a Lease Agreement and Option (the Mesa Lease), to become effective January 1, 1962. The Mesa Lease recited that, inter alia:
(a) The lessors were to lease to Title Guaranty all of their abstracting materials including charts, plants, indices, and film previously used by the lessors in the conduct of their title abstracting business for a 30-year period beginning January 1, 1962, through January 1,1992. Title Guaranty was required to pay amounts designated as annual rent for the use of the abstracting materials of the greater of $6,600 or 5 percent of Title Guaranty’s gross receipts with respect to title business in Mesa County. No portion of these payments was designated as interest. Seventy percent of each monthly payment was to be paid to Williams, and 30 percent of each monthly payment was to be paid to G. Dale Williams.
*434(b) Title Guaranty was granted the right at the end of 17-1/2 years or at any time thereafter during the lease term to exercise an option -to purchase the abstracting materials for $25,000. No payments designated as rentals were to be credited toward the option price.
(c) The abstracting materials were to remain the sole and exclusive property of the lessors for the duration of the Lease, subject to Title Guaranty’s right to use such materials. All subsequent additions to the abstracting materials were the sole and exclusive property of Title Guaranty.
(d) Title Guaranty would employ both Williams and G. Dale Williams and each agreed not to compete with Title Guaranty.
(e) Title Guaranty was required to maintain fire and hazard insurance with respect to the abstracting materials of at least $80,000 and to maintain errors and omissions liability insurance in an amount not less than $100,000. If, during the period of the Lease, the abstracting materials were destroyed or substantially damaged, Title Guaranty was to replace all materials within a reasonable time at its own expense without regard to the amount already paid.
By letter dated January 1, 1962, from Title Guaranty to Williams and signed and approved by Williams, Williams was employed by Title Guaranty at a salary of $500 per month. By letter dated January 1, 1962, from Title Guaranty to G. Dale Williams, approved and signed by G. Dale Williams, G. Dale Williams became an employee of Title Guaranty and manager of the Title Guaranty Mesa County Branch. G. Dale Williams’ salary was $7,500 per year plus 10 percent of yearly gross receipts in excess of $100,000.
On or shortly after January 22, 1962, Williams purchased 65 shares of previously unissued capital stock of Title Guaranty. On February 1, 1962, Title Guaranty entered into an agreement with G. Dale Williams whereby G. Dale Williams was granted an option to purchase 65 shares of unissued capital stock of Title Guaranty from Title Guaranty at an option price of $194 per share. The agreement recited that the stock option was to provide an incentive to G. Dale Williams to devote his best efforts in managing the Mesa County Branch and that the stock option was intended to qualify under Section 421 of the Internal Revenue Code of 1954. G. Dale Williams exercised such option at some time during 1962 or early 1963.
A lease agreement dated as of January 1, 1962, was executed by Williams and Title Guaranty which provided, inter alia, that Williams would lease to Title Guaranty the building he was using to conduct his abstract and guaranty title insurance business.
G. Dale Williams was employed by Title Guaranty as the manager of its Mesa County Branch under the direction of Williams. In May 1963 he terminated his employment for personal reasons. Williams was actively employed at the Mesa County Branch from January 1,1962, and became manager of that Branch upon the termination of G. Dale Williams. Williams continued as manager of the Mesa County Branch as an employee of Title Guaranty and its successors until September 1, 1976, at which time he retired. Before Williams’ retirement, Title Guaranty’s successor’s share of the market for title insurance business in Mesa County was approximately 85 percent; shortly after his retirement, its market share dropped to approximately 40 percent.
The Mesa Lease transaction provided for a minimum payment of $6,600 per annum for a 30-year period. The Mesa Lease transaction also provided Title Guaranty an option to purchase when any time after 17-1/2 years Title Guaranty could pay the $25,000 option price. In 1979, Trans-america, as Title Guaranty’s successor, did exercise its option to purchase the Mesa Company. Transamerica Title Insurance Company exercised its option to acquire legal title to the abstracting materials that were the subject of the Mesa Lease transaction on June 14, 1979, and has paid the $25,000 option price with respect thereto. Williams reported the rental payments received from Title Guaranty on the Lease Agreement as rental income on its income tax returns.
*435In the mid-1960's, G. Dale Williams sold his interest in the Lease Agreement between The Mesa County Abstract Company and Transamerica Title Insurance Company, successor to Title Guaranty, to his father. After graduating from law school in 1966, G. Dale Williams was employed as a trust officer with First National Bank in Grand Junction, Mesa County, Colorado. Two years later, G. Dale Williams left that position to practice law full-time in Grand Junction. G. Dale Williams tooks no part in the transaction between The Mesa County Abstract Company and Transamerica Title Insurance Company when the latter in 1979 exercised its option to purchase the title plant for Mesa County.
In November 1984, James L. Roffe (Roffe) representing Transamerica Title Insurance Company, approached G. Dale Williams about selling Transamerica’s interest in the title business in Mesa County. G. Dale Williams resolved to proceed and actively pursued negotiations to purchase the Mesa County title business. All of the negotiations were between G. Dale Williams and Roffe. G. Dale Williams entered into an Agreement of Sale with Roffe on December 31, 1984, to take effect on January 1, 1985. The sale price was $160,-000. Included were: (1) the complete title plant dating from 1883 to the present; (2) the physical assets of the business including furniture and fixtures; (3) “Work in Process”, comprised of Transamerica’s outstanding contracts; (4) two building leases, both to run through December 31, 1987; and (5) the goodwill of the existing business. Also as a part of the transaction, G. Dale Williams entered into an Agency Agreement with Transamerica Title Insurance Company on December 31, 1984, in which he agreed to act exclusively as its agent in Mesa County.
In making his purchase, G. Dale Williams was advised by James Grisier (Grisier), a certified public accountant in Grand Junction since 1972 who has represented a number of clients in buying and selling businesses and who has made many appraisals in conjunction with various transactions in Mesa County. Grisier has been G. Dale Williams’ and his father’s personal accountant since 1981.
On or about February 26, 1985, G. Dale Williams sent a letter to Transamerica Title Insurance Company’s Los Angeles office setting forth his final allocation of the purchase price for the Mesa County title business. The letter indicated that G. Dale Williams would conclude that the allocation was acceptable if he did not hear to the contrary. G. Dale Williams did not hear to the contrary, concluded that Transamerica Title Insurance Company accepted his allocation and so proceeded to use that allocation in both his financial records and tax returns.
The purchase price allocation as set forth in the February 26,1985, letter and G. Dale Williams’ and Grisier’s bases therefor are as follows:
Furniture and Fixtures $ 63,780.00
Title Records 46,485.00
Goodwill 15,494.00
Work in Process 19,503.00
Building Leases 14,738.00
TOTAL $160,000.00
The basis for the allocation as to title records and goodwill, was: After deducting the values allocated to the furniture and fixtures, the work in process, and the building leases from the total price paid for the business ($160,000), 75 percent of the remaining balance was allocated to the title records and 25 percent to goodwill. The value of the title plant itself, which included both the original 1883-1961 plant and the subsequent additions, was based on G. Dale Williams’ experience and knowledge and Grisier’s estimations of its future value. Accordingly, G. Dale Williams believed that the original, pre-1962 records had a value of less than 50 percent of the $46,485 for all title records.
G. Dale Williams is now President and General Manager of Abstract & Title Company of Mesa County, Inc., the privately held corporation he formed to purchase the title business. He personally oversees the company’s entire operations, spending approximately 80 percent of his time with the business. Both of G. Dale Williams’ sons *436are full-time employees and officers of the company.
DISPOSITION
Plaintiffs challenge to the IRS recharac-terization of the Boulder and Mesa leases rests on compliance with the requirements of section 162(a)(3) of the Internal Revenue Code of 1954. 26 U.S.C. § 162(a)(3) (1982). That section provides the ordinary and necessary expenses in carrying on a business are deductible if the payments are for the “continued use or possession” of property to which the “taxpayer has not taken or is not taking title or in which he has no equity.”
The parties disagree as to the analysis to be applied in the determination of whether the agreements properly may be characterized as leases or as conditional sales. Plaintiffs argument concentrates on the intent of the parties in entering the transactions. Business realities at the time, the terms and form of the agreements, and the conduct of the parties are emphasized as evidence of the intent to make and satisfy the traditional concepts of a leasehold transaction. Defendant emphasizes elements in the transactions that indicate an intent to acquire title to and to use “uniquely irreplaceable” assets for an indefinite future period. Defendant’s argument concentrates on the significance of the options, the expectation of the parties that the options would be exercised, and the characteristics of the option prices that bear upon the likelihood or guarantee they would be exercised.
Numerous cases have considered whether an agreement, which was in form a lease, was in substance a sale for purposes of determining whether income should be reported by a taxpayer as rental receipts or income from the sale of property. The burden is on the taxpayer to prove that the IRS characterization of the transaction as a conditional sale was erroneous. Lewis v. Reynolds, 284 U.S. 281, 52 S.Ct. 145, 76 L.Ed.2d 293 (1932); Dysart v. United States, 169 Ct.Cl. 276, 340 F.2d 624 (1965). The labels employed by the parties to a transaction are not controlling; the substance of the transaction, rather than its form, is determinative. Helvering v. Lazarus & Co., 308 U.S. 252, 60 S.Ct. 209, 84 L.Ed. 226 (1939). The focus is on the practical effect of the transaction, not its technical effect. Northwest Acceptance Corp. v. Commissioner, 58 T.C. 836 (1972), aff'd, 500 F.2d 1222 (9th Cir.1974). In determining whether a transaction is a lease or a purchase, its effect on both parties to the transaction must be analyzed and the business involved must be examined. Lockhart Leasing Co. v. Commissioner, 446 F.2d 269, 272 (10th Cir.1971). In Oesterreich v. Commissioner, 226 F.2d 798, 801-02 (9th Cir.1955), the court stated:
If the parties enter into a transaction which they honestly believe to be a lease but which in actuality has all the elements of a contract of sale, it is a contract of sale and not a lease no matter what they call it nor how they treat it on their books.
There is no single criterion that shows the essence of a commercial deal negotiated between businessmen with differing interests. All of the aspects of the arrangement must be examined to form a judgment as to whether the parties intent was to negotiate for the use of property or for the transfer of ownership.
In fact, since most transactions exhibit a variety of circumstances which point in opposite directions, the cases have been decided on the basis of all of the facts and circumstances there presented.
Kansas City So. Ry. Co. v. Commissioner, 76 T.C. 1067, 1094 (1981).
It is necessary to examine the economic nature of the payments. Rental is a payment merely for the use of property, and it contemplates return of the rented property at the termination of the lease. On the other hand, if payments, though denominated rental, are required to be made in amounts that actually cover the full economic value of the property, and ownership ultimately will be transferred, they are a payment for ownership. If the user of the property in fact acquires an economic equity in the property by virtue of the payments, and the property will be *437worth substantially more than the price to be paid upon exercise of the so-called option to purchase, then the user will have been building up a true economic interest in the property. Universal Drilling Co. v. United States, 412 F.Supp. 1231 (E.D.La.1976).
Plaintiff relies heavily on Frank Lyon Co. v. United States, 435 U.S. 561, 98 S.Ct. 1291, 55 L.Ed.2d 550 (1978) as a change in the law and a significant reordering of the factors to be considered. Plaintiff argues that the United States Supreme Court’s decision in Frank Lyon holds that where the transaction is the result of bonafide negotiations conducted at arms-length, and where the transaction form is encouraged or compelled by legitimate business or regulatory realities, the taxpayer will only have to' demonstrate that it has retained some of the traditional attributes of a lessor. Plaintiff articulates the change in the scope of examination that is to be made when a recharacterization of a lease has been challenged. As to intent, plaintiff argues: The determination of objective intent, however, is inextricably linked to the parties’ subjective intent. Where the facts and circumstances present at the time the transaction was consummated indicate that the lease was the product of economic realities and arms-length negotiations, the courts will more readily accept the parties’ agreement and will find a lease for tax purposes if only some of the attributes of the traditional lessor status are present.
Plaintiff relies upon the Supreme Court’s concluding paragraph in Frank Lyon:
In short, we hold that where, as here, there is a genuine multiple-party transaction with economic substance which is compelled or encouraged by business or regulatory realities, is imbued with tax-independent considerations, and is not shaped solely by tax-avoidance features that have meaningless labels attached, the Government should honor the allocation of rights and duties effectuated by the parties. Expressed another way, so long as the lessor retains significant and genuine attributes of the traditional lessor status, the form of the transaction adopted by the parties governs for tax purposes. What those attributes are in any particular case will necessarily depend upon its facts. It suffices to say that, as here, a sale-and-leaseback, in and of itself, does not necessarily operate to deny a taxpayer’s claim for deductions.
435 U.S. at 583-84, 98 S.Ct. at 1303-04.
Plaintiff's focus on the summation paragraph in Frank Lyon is misdirected, and plaintiff’s analysis is too broad as to the meaning and scope of that decision. In Frank Lyon, the Court was concerned with a sale-and-leaseback transaction, which is different in nature from the question of the proper characterization of a transaction as a lease or as a conditional sale. Frank Lyon, essentially, embraces the “traditional” substance over form analysis. The Court’s reasoning in Frank Lyon is a combing of all of the facts. Indeed, the Court states: “[tjhere is no simple device available to peel away the form of this transaction and to reveal its substance,” and then proceeds to examine the transaction fact by fact. 435 U.S. at 576, 98 S.Ct.. at 1299-1300.
The post-Frank Lyon precedent establishes that Frank Lyon is another gloss on the traditional analysis which long has been applied to the conditional sale versus lease issue. In Illinois Valley Paving Co. v. Commissioner, 42 T.C.M. (CCH) 909 (1981) (a conditional sale/lease situation where the lessee rented concrete paving equipment for a trial period), the court cited Frank Lyon and numerous other cases decided before Frank Lyon. The court held that the parties had entered into a bonafide lease with an option to purchase after a consideration of: (1) substance and form; (2) intent of the parties at the time the agreement was made as shown by the facts and circumstances and economic realities existing at that time; (3) the terms of the agreement; (4) the likelihood that the option would be exercised; and (5) the parties’ treatment of the transactions on their books.
In Swift Dodge v. Commissioner, 692 F.2d 651 (9th Cir.1982), the court found that the two party “leasing” arrangement *438was in fact a conditional sale. The court cited Frank Lyon and noted that the characterization of the transaction is controlled by the substantive provisions of the agreement and the parties’ conduct. Id. at 652. The court in Swift Dodge makes frequent reference to Frank Lyon. It is clear, however, that the court does not consider itself confronted by the narrow interpretation plaintiff asserts. Rather, the court, as did the court in Illinois Paving, incorporates Frank Lyon into an existing analytic framework. See also Kansas City So. Ry. Co. v. Commissioner, 76 T.C. 1067 (a transaction’s effect on both parties must be analyzed as well as the general business of the lessor and the manner in which it is conducted).
In sum, the post-Frank Lyon cases point out that Frank Lyon has left open the door to objective inquiry into substance over form, which necessitates a review of all the facts. Such a review requires examination of the facts and circumstances present at the time the transaction was entered, and a consideration of how those facts conform with a variety of relevant factors.
Defendant’s analysis rests on the decision made on February 22, 1985, in this case on the aircraft dispositions issue. Transamerica Corp. v. United States, 7 Cl.Ct. 441 (1985). The aircraft dispositions issue also involved a two-party lease versus a conditional sale recharacterization. Defendant contends the aircraft dispositions decision is dispositive on the title plant leases issue. Defendant, however, does not recognize that in the aircraft leases the facts in significant respects have a clarity that is not present in the title plant leases. The facts of the aircraft leases included: monthly payments by the lessor successively reduced pro rata the option price; when the agreements were made, any failure to exercise the option was remote; during the lease terms, the lessee was charged interest on the unpaid balance of the option prices; necessary spare parts for the aircraft were sold concurrently with execution of the leases; and, on their financial records, the parties treated the transactions differently.
Resolution of the title plant leases issue requires application of the analyses in both Frank Lyon and the aircraft dispositions decision. Frank Lyon offers two specific guidelines: (1) look at substance over form, and (2) look to see if the lessor has retained significant and genuine attributes of the traditional lessor status, and the lessee has not acquired an equity. These guidelines are supplemented by the methodology followed in the aircraft dispositions decision to examine the facts.
Isolation of the business purpose in the Boulder and the Mesa transactions that the IRS recharacterized is complicated by differences in the two transactions and by the chronology of events. The Boulder agreement was a product of Title Guaranty’s and Record Abstract’s expansion program. The Mesa agreement subsequently was consummated separately. The record is not clear whether the Mesa transaction was part of a program to expand Title Guaranty’s title abstract and insurance business, or whether it was part of a package put together to attract the subsequent acquisition of Title Guaranty by plaintiff.
In the negotiations of both the Boulder and Mesa agreements, the parties did not discuss during the negotiations the possible tax consequences of the transactions. The record is barren of documentation relative to any internal discussions or analysis either party may have undertaken independently. As prudent businessmen, however, the parties presumably were mindful of tax and other practical consequences. The record also is barren as to analysis or consideration, if any, plaintiff gave to tax consequences of the lease agreements when it acquired Title Guaranty.
The property that was the subject of the leases was the title plant materials that covered the period 1865-1961 for the Boulder Company, and the period 1883 through 1961 for the Mesa Company. At all times during the lease terms, the lessors retained legal title to the leased property. All additions to the title plant materials during the period of the leases were the sole and exclusive property of the lessees.
*439In form, the challenged transactions had the traditional attributes of leases: the instruments identified the parties as lessee and lessor, designated a fixed term, designated the money payments as rents, provided title to the pre-1961 abstracting materials remained exclusively in the lessor, gave lessor a right of inspection, obligated the lessee to preserve the property and return it in good condition, obligated lessee to replace damaged property with no abatement of rent for destruction or damage to the property, and obligated the lessee to pay for fire and hazard insurance, and for errors and omissions liability insurance. The option to purchase in the Boulder lease was provided separately from the rental obligations, and was subject to exercise after the term without adjustment for previous rental payments. The option to purchase in the Mesa lease was a part of the section on rents, and it could be exercised after 17-1/2 years into the 30-year term, without adjustment for previous rental payments.
Defendant contends that the economic substance of the transactions requires the form to be disregarded and the transactions to be deemed immediate sales on an installment basis. In a conditional sale, the seller retains legal title for security purposes. The buyer has possession with the right to use during the installment term, during which he accumulates equitable title through payments based upon full economic value of the property, plus an interest component to compensate for deferred payments during the installment term.
When Title Guaranty sought to enter into the Boulder and Mesa County markets, it recognized it would have to secure for extended periods the use of the only complete title plants in each county. The title plants were indispensable to Title Guaranty’s ability to conduct its title insurance business. This requirement could be satisfied by a long term lease, with or without an option to purchase, or by a conditional sale. Either type of transaction would secure for Title Guaranty the right to use the title plants.
In 1961 and 1962 there were no appraisal services available through which the parties could obtain a valuation of the Boulder and Mesa title plants. In 1962, it would have cost approximately $250,000 to recreate the Mesa title plant. Plaintiff estimates, since the Boulder plant was earning more than twice as much as the Mesa title plant, that the Boulder title plant in 1961 would have been worth approximately $500,000. Plaintiff presented no evidence that anyone involved in the transactions attempted to make estimates of the current or prospective values of the title plants separate from other features of the transactions.
The business objectives of the parties could be achieved through a lease with an option to purchase more readily than through the use of an installment sale. Title Guaranty wanted to maintain its balance sheet in a manner sufficiently conservative to assure potential title insurance customers of its ability to pay in the event of a loss. Title Guaranty did not have the funds to make an outright lump sum purchase of abstracting materials owned either by the Boulder Company or by Williams and G. Dale Williams. If Title Guaranty borrowed the money, it would have been required to schedule the debt on its books, and this in turn, would have impaired seriously its ability to sell title insurance. In 1961, long term lease obligations did not have to be capitalized. See Frank Lyon v. United States, 435 U.S. at 577, n. 14, 98 S.Ct. at 1300, n. 14 (until 1968 a long term lease did not impact a lessee’s balance sheet).
Title Guaranty’s expansion throughout Colorado depended upon its ability to identify itself with local leaders in the title insurance business. For a continuation of local contacts, Title Guaranty needed to establish a relationship that would encourage the Hickmans and the Williams to maintain an active interest in the title plants.
The Hickman family interests agreed to renegotiate the 1959 Boulder title plant lease in order to satisfy the merger conditions imposed by Title Guaranty and *440Record Abstract. During the negotiations, the Hickmans did not consider selling the Boulder Company’s title plant. The Hick-mans felt it was to their benefit to consider a package arrangement that included: (1) a lease; (2) a lifetime employment contract for Hickman, Sr., and payments for life to his wife; (3) an employment contract for Hickman, Jr.; and (4) stock from Title Guaranty.
In the Mesa transaction, Williams was not interested in a sale of the title plant. Williams wanted to stay in the business and to provide an employment opportunity for his son. Further he preferred that payments be spread over a period of time rather than getting any sizable amount of money at one time.
Other features of the transactions support the conclusion that the parties entered a lease relationship. The parties consistently treated the transactions as leases for both financial and tax reporting purposes. Where the parties execute a lease and treat the transaction as a lease on their books and records, this method of reporting is a factor that supports the conclusion that a lease actually was intended. See Benton v. Commissioner, 197 F.2d 745 (5th Cir.1952); Illinois Valley Paving Co. v. Commissioner, 42 T.C.M. (CCH) 909, 914 (1981); T Wayne Davis v. Commissioner, 37 T.C.M. (CCH) 1441, 1446 (1978).
In both transactions, the rental payments were based upon a percentage of gross receipts, and the rental payments had no direct connection with the amounts to be paid if the purchase options were exercised. In the Mesa transaction, Title Guaranty was obligated to pay rent in an amount equal to the greater of $6,600 per annum or 5 percent of its gross receipts. Between 1962 and 1972, under the Mesa lease the average rent per year was $7;264, the average gross income was $123,255, and the approximate average net profit before taxes was $43,957. Under the Mesa lease, Title Guaranty paid rentals that totaled $220,006 before it exercised its purchase option after 17-1/2 years.
The Boulder lease required annual rentals of from $20,000 to $24,000 during the period January 1, 1961 — December 31, 1975, and thereafter at 5 percent of the lessee’s gross income, but not less than $24,000 nor more than $40,000 during the period January 1, 1976 — December 31, 1980, and not less than $24,000 nor more than $35,000 during the period January 1, 1981 — January 1, 1991. Between 1961 and 1972, under the Boulder lease the average rent per year was $21,500. The average gross income for the years 1962 through 1972 was $370,144, and the approximate average net profit before taxes from 1962 through 1972 was $99,354. By 1979, payments made under the Boulder lease totaled $448,509.
A lease that has payments based upon a percentage of gross receipts makes the lessee’s liability open-ended. Such a provision is consistent with the concept that the lessee is paying for the use of the property involved. The provision also is inconsistent with a concept that a firm selling price had been established and agreed upon.
In both transactions, no portion of the amounts designated as rental payments or option prices was specifically designated by the parties to represent interest. The payment of interest normally is a factor in a sale to compensate the seller for deferred payment during the installment period.
In both transactions, the option price was $25,000. This sum is not nominal. See Oesterreich v. Commissioner, 226 F.2d 798 (9th Cir.1955) (purchase option $10— building worth $350,000); Watson v. Commissioner, 62 F.2d 35, 36 (9th Cir.1932) (additional sum of $1, a mere formality in a transaction involving $109,900). The payment of rentals did not build up an equity that was reflected in reductions in the option prices, nor did such payments amount to an equity in the pre-1961 title plant materials.
Defendant interprets the facts as showing arrangements where the Boulder and Mesa owners each effectively agreed to permanently dispose of their title plants. According to defendant, this was an instance where it was to everyone’s advantage to formulate an agreement under which Title Guaranty would buy out two *441family businesses, title plants included, through an installment plan. The annual installment payments, although they were denominated as rentals and the final installment was termed an option price, defendant argues that, in fact, the yearly payments were not meant to (and did not) represent fair rental values, and the last optional payment was not meant to (and did not) represent the properties’ anticipated fair market values.
Defendant emphasizes that the title plants were indispensable elements to Title Guaranty’s proposed expansion. Further, Title Guaranty expected to continue to operate indefinitely in Boulder and Mesa Counties and would have a continuous need to use the title plants.
Defendant’s view of the facts has support in the record. With respect to plaintiff’s contention that it was uncertain at the time the transactions were entered whether the options would be exercised, the testimony shows that at the time the leases were executed, Title Guaranty’s officials did not foresee any circumstances or conditions that might arise which would cause it not to exercise the purchase options. Mr. Fred Klein, a former Transamerica/Title Guaranty executive, testified that he believed the Mesa option was included in the transaction because he felt that Title Guaranty would exercise the option “everything remaining equal.” Mr. Klein also testified that he felt Title Guaranty had a moral obligation to exercise the options even though he recognized that there was no legal obligation to do so. Williams testified that he believed, at the time he entered the transaction, that Title Guaranty would exercise the option. Although he felt that Title Guaranty had a moral obligation to exercise the option, he did not feel that the moral obligation would be violated if the option were not exercised. Williams acknowledged that he did understand that, at the end of either 17-1/2 or 80 years, he could get his company back. Hickman, Jr. stated that at the time he entered the transaction he anticipated that Title Guaranty would exercise the option.
Defendant points to anomalies in the $25,000 option prices and contends that the option price could not have been intended to represent a true sales price based upon fair market values at the time the options were eligible to be exercised. Defendant emphasizes that no testimony or other evidence indicates that any attempt was made to estimate the future value of the title plants when the option prices were negotiated and established. Identical option prices for the two properties are said to be unreasonable in view of the difference in values at the beginning of the lease periods. Further, it seems strange to value the Mesa property at $25,000 in 17-1/2 years, while the Boulder property would take 30 years to decrease to the same value.
Defendant notes that under the Boulder lease agreement, the minimum annual payments increased to $24,000 per annum for the last 10 years of the contact, plus additional amounts payable based upon gross receipts. If the value of the property had fallen to the option price, defendant claims it would be unreasonable to pay $24,000 per year to rent a $25,000 asset. In the Mesa transaction, the option could be exercised after 17-1/2 years by making a single $25,000 payment. Defendant asks how could the value of the Mesa title plant drop to $25,000 in 17-1/2 years and have the same value at the end of the 30th year? Further, in the event the option was not exercised at the end of 17-1/2 years, the lessee would have to make annual payments for the next 12-1/2 years that would total at least $82,500. Defendant argues that this provision made it absolutely certain that Title Guaranty would exercise the option rather than remain liable for $82,-500. In fact, Title Guaranty in June 1979 exercised its option at the earliest possible date, and paid the $25,000.
Defendant’s analysis of the facts as establishing an installment sale has superficial appeal. In a balance of all factors, however, defendant’s analysis does not give effect to the substance and economic realities of the transactions.
*442In their arguments, both parties lost sight of the limitation on the title plant materials that actually were the subject of the leases. At the beginning of the leases in 1961, the materials that were leased comprised complete title plants. This condition of completeness would not exist at the end of the lease terms, and would not be the situation at any time during the lease period. All additions to the title plants became the property of the lessee; and the property to be returned in each lease would be only the pre-1961 materials. These materials covered roughly equivalent periods of time, and the allocation of equivalent values for these volumes of materials is not unreasonable. The trial testimony shows that the parties actually believed that $25,000 was a fair estimation of what the leased materials would be worth at the time the options could be subject to exercise.
The pre-1961 title plant materials have a useful life that may extend for indeterminate periods, unless supplanted by legislation that render such materials irrelevant. The value of the pre-1961 title plant materials would decline during the terms of the leases as new title plant materials were added by the lessees. As time went on, there would be fewer occasions when reference to the pre-1961 records would be necessary. At the end of the lease term, the lessors would have partial title plants, and would be faced with the substantial expense of updating the records. Both of these factors would contribute to a decline in value of the leased materials.
It was not a certainty in 1961 that the options ever would be exercised. Prudence required Title Guaranty to have an extended term to support its expansion into the new territories. This it accomplished in the leases. Whether the expansion would prosper, however, depended on events that were unforeseeable. The nature of business and human experience dictates a future that includes possibilities for technological advances that requires changes in old patterns. The fact that the parties expected the options to be exercised is not inconsistent with an intent to enter a lease transaction. Whether the options would be exercised, in the light of future vagaries, was a speculative matter in 1961.
Mesa Repurchase
On March 21, 1986, the parties filed a Joint Stipulation of Facts Based on Newly Discovered Evidence with Respect to the Title Plant Leases Issue. The new evidence establishes that on December 31, 1984, G. Dale Williams purchased Title Guaranty’s Mesa County business for $160,000. Afterwards, Williams allocated $46,485 of the lump-sum purchase to all the title plant records, and indicated that less than one-half of that amount was attributable to the pre-1962 records. Plaintiff argues that this allocation is evidence that the $25,000 option price reflects fair market value of the property in the Mesa lease, and that a similar deduction can be made about Boulder pre-1961 title plant materials. Plaintiff argues that the repurchase transaction provides “factual justification” for the option prices in the Mesa and Boulder transactions.
Defendant asserts that plaintiffs deduction from the repurchase transaction is based, on a false premise. Defendant points out that the ultimate question is not the fairness of the option price, but rather whether the $25,000 was meant to be a bonafide option price, and that there is no way to determine from plaintiffs “new evidence” what the 1984 fair market value of the Mesa title plant was, much less that of the Boulder title plant. Defendant summarizes its argument as follows: (1) G. Dale Williams did not actually value or appraise the title records; he only determined an amount allocable to them on the basis of what remained after valuing the other assets; (2) the aggregate value of the assets which G. Dale Williams received may well have been worth more than $160,000 since that amount represented book value, not fair market value; (3) it was in G. Dale Williams’ interest to allocate as much of the $160,000 to the assets he valued, and as little as possible to the title records and goodwill, because the cost of the former could be written off for tax purposes much faster than that for the latter.
*443Defendant’s argument is persuasive. The repurchase transaction is without probative value.
Jefferson County Transaction
On December 18,1986, the parties filed a Joint Stipulation to supplement the record with respect to the title plant leases issue. The stipulation, as to which defendant expressly reserved the right to object to admissibility of the facts stated, was concerned with a lease with the Jefferson County Abstract Company, Jefferson County, Colorado.
The Jefferson transaction involves an agreement between Title Guaranty and Jefferson County Abstract Company. The parties entered a 15-year lease, commencing March 15, 1951. The rental payments were $45,000 per year, plus 2 percent of the gross income. The option price was set at $20,000 which was exercised in 1966.
The IRS initially proposed to treat the agreement as a sale rather than a lease. Plaintiff protested and the Appellate Division of the IRS sustained the protest and allowed the rental deductions.
Plaintiff claims that the Jefferson County lease was identical to the Mesa and Boulder transactions in all pertinent aspects. However, plaintiff does not provide any of the facts or circumstances surrounding the Jefferson transaction. The Supreme Court, in Frank Lyon stated that a plaintiff must show that a lessor has retained significant and genuine attributes of the traditional lessor status. The Court went on to state that “what those attributes are in any particular case will necessarily depend upon its facts.” 435 U.S. at 584. Whether a transaction is a sale or a lease is essentially a factual issue. Northwest Acceptance Corp. v. Commissioner, 58 T.C. 836 (1972), aff'd, 500 F.2d 1222 (9th Cir.1974).
The Jefferson transaction was not tried in this case. This court therefore is without any knowledge as to the substance of the transaction. Judge Miller ruled testimony regarding the Jefferson transaction inadmissible. The parties’ arguments as to the correctness of the ruling, in the light of the lack of a complete record on the Jefferson transaction, are not relevant.
CONCLUSION
On the basis of the foregoing, it is concluded that the Boulder and Mesa transactions were in substance and in form leases with options to purchase. The transactions were not installment sales. Transamerica is therefore entitled to the rental deductions it has taken for tax years 1968 and 1969 pursuant to Section 162 since it has at no time acquired an equity interest in the Boulder or Mesa title plants as a result of its rental payments.
CHARITABLE CONTRIBUTIONS
Plaintiff’s involvement in the charitable contributions issue stems from its ownership in 1969 of United Artists Corporation (UA). In that year, UA conveyed certain film and motion picture property, described below, to the University of Wisconsin and to the Library of Congress.
UA was a distributor of independently produced motion pictures which had been organized in 1919 by Charlie Chaplin, Mary Pickford, D.W. Griffith and Douglas Fairbanks, Sr. In 1951 UA was in financial difficulties, and management was transferred to Arthur Krim, Robert Benjamin and Arnold Picker. In 1956, Arthur Krim and Robert Benjamin became owners of UA. In 1957, UA’s stock was publicly offered and listed on the New York Stock Exchange. In 1967, Transamerica acquired 87.5 percent of UA’s stock, and by 1970 it had become its sole stockholder. In 1981, Transamerica sold UA to Metro-Goldwyn-Mayer Film Company.
In its 1969 consolidated federal income tax return, plaintiff claimed charitable contributions in the aggregate amount of $27,-744,328 as the fair market value of certain motion picture property UA conveyed to the United States of America for inclusion in the collection of the Library of Congress (Library Property) and of different motion picture property conveyed to the University of Wisconsin (University Property) under IRC § 170(a). The entire deduction and carryforward relating to these conveyances *444were disallowed by the IRS. A statutory notice of deficiency reflecting an asserted underpayment of tax for the year 1969, based in part on the disallowance of deductions for plaintiffs claimed charitable contributions, was issued on January 31, 1978. The deficiency has been paid and a timely claim for a refund has been disallowed. In its March 9, 1979, complaints, plaintiff claimed charitable contributions in aggregate amount of $27,744,328. During these proceedings, plaintiff has modified its claim and now asserts the fair market value of the property conveyed amounts to $15,873,-431.
Trial of the charitable contributions issue was protracted, and required 36 trial days from commencement on June 25, 1984, to final session on May 19, 1987. Trial sessions were held in Madison, Wisconsin (4 days in 1984), New York, New York (3 days in 1984), Pasadena, California (5 days in 1986), and Washington, D.C. (13 days in 1984 and 11 days in 1987). Posttrial briefing was completed December 18, 1987.
FACTS
The parties are in agreement as to a majority of the facts essential to the charitable contributions issue. A stipulation filed on June 20, 1984, lists 128 separately numbered facts in 11 categories. An additional 15 facts were listed in a stipulation filed October 1,1984, and a stipulation filed April 14, 1987, added 11 more. The facts stipulated by the parties, although not duplicated in this opinion, are adopted as findings of the court. For purposes of continuity, some of the materials the parties have stipulated is repeated in the narrative that follows. Findings of fact in the narrative that supplement or add to the parties’ stipulations are based upon testimony and documentary evidence in the trial record.
Property Involved
The property conveyed to the Library of Congress and to the University of Wisconsin consisted of various items of tangible personal property that together constitute the basic physical structure for the commercial interests in the motion picture industry. Items of tangible personal property that were conveyed included preprint materials (original 35mm negatives or other 35mm preprint material, 35mm and 16mm printing intermediates), 16mm exhibition prints, photographs (still negatives and prints), scripts, press books and production files.
The production of a motion picture involves the manufacture of several categories of film materials in the course of several stages of film production, from the filming of the subject (and, in the case of sound productions, the recording of the sound), through the manufacture of viewable exhibition prints. At each stage subsequent to the initial filming and recording, the image embodied on the film material that had been produced in the previous stage is replicated on another piece of film material. Usually, if the image is in negative form on the film material that had been manufactured in the previous stage of production, it is transposed into a positive image, and vice versa. This sequence is altered somewhat in the Technicolor wet dye printing process and in the color reversal intermediate (CRI) process.
The categories of film material that are manufactured in the stages leading up to the striking of viewable exhibition prints are generally called “preprint material”. All preprint material, with the exception of protection prints, is on film stock having sharper resolution and different emulsion sensitivity characteristics than exhibition prints. Protection prints have the same physical characteristics as exhibition prints but can be considered preprint material because they are used in the manufacture of exhibition prints when other preprint material is unavailable. The type of preprint material that is produced at each stage of production depends on the manufacturing process used.
Film materials conveyed to the Library and the University consist of a clear strip of plastic, which is either nitrate-base film or acetate-base film. To this plastic base, a photo-sensitive emulsion is bonded chemically. This emulsion embodies either a positive or a negative image of the matter that was filmed or if sound, recorded.
*445With minor exceptions all original negatives and nearly all other film material manufactured before 1951 for professionally produced motion pictures was on nitrate-base film stock. Film material manufactured after 1951 is on acetate-base film stock.
Nitrate-base film stock is highly flammable, potentially explosive and subject to shrinkage, decomposition and ultimately to disintegration. Nitrate-base film decomposes with the passage of time and eventually will be unuseable and must be discarded. Unless the image is transferred to safety film or preserved in some other manner it will eventually be lost when the nitrate-base decomposes. Acetate-base film stock (safety film) is less flammable, not potentially explosive and more stable, but unless properly cared for is subject to shrinkage, fading and brittleness.
Among experts, it is generally believed that more than half of the motion pictures produced in the United States during the 20th Century have disappeared. The American Film Institute estimates that only about 50 percent of the 25,000 feature films produced in the United States between 1900 and 1950 survive in any form. Most films have disappeared due to deterioration of the nitrate. Even in the case of those that survive in some form, they are often of a poor quality print on which the images or sound may have been, altered, cut, or rearranged.
Motion picture companies, because they thought the films had no further commercial value, frequently made little or no effort to save nitrate-base films. Even among companies that continued to exploit their old motion pictures, it was often felt that the cost and dangers involved in keeping the nitrate film was too great to justify retention, and that commercial exploitation of the motion picture could continue using other safety stock preprint materials. Some companies were anxious to get rid of their nitrate film; some simply discarded their nitrate films. MGM informed an archive that it would destroy its nitrate films unless the archive took them off its hands. In the 1960’s, interested segments of the public, the film industry, and the United States Government became increasingly aware of the need to preserve as a historical and scholarly heritage those motion pictures recorded on nitrate film that still existed.
The film materials conveyed to the Library and the University were manufactured under one of four processes: (1) black and white motion picture films; (2) technicolor process for nonanimated color films; (3) technicolor process for animated color cartoons; and (4) Eastman color process, which in 1951 began to replace the Technicolor process.
The steps in the production of film materials for black-and-white motion pictures is illustrative of the complexities and the interdependent nature of film industry commercial practice. The first category of film material created is the “original negative”. For silent films in black-and-white, this consists of the “original picture negative” that was in the motion picture camera at the time of filming, as subsequently developed through a chemical process, cut and edited for release, and added to for titles, subtitles, credits and optical effects. With respect to sound films in black-and-white there is an original picture negative that is the same as the original negative for a silent film, as well as a separate “optical sound track negative” that was manufactured by mixing music, effects and dialogue. The original picture negative and, in the case of sound films, the corresponding optical sound track negative, are on 35mm film. Pre-1951 productions are on film with a nitrate base, post-1951 productions are on film with an acetate base.
The image on the original negative is copied onto 35mm duplicating fine-grain film stock (containing either a nitrate or an acetate base), thereby creating a “fine-grain master positive” of the motion picture film. In the case of sound films, this positive print combines onto one strip of film the images contained on the original picture negative and on the original sound track negative. It is therefore referred to as a “composite fine-grain master positive.”
*446The fine-grain master positive and the composite fine-grain master positive are used to manufacture one or more “duplicate negatives”. A duplicate negative is a 16mm or 35mm film on a nitrate or acetate base, in which the picture and sound are either combined or separated on separate strips of film. In either case the sound component consists of a re-recorded sound track negative.
“Exhibition prints” (also known as release prints), on either 16mm or 35mm film stock, are commonly manufactured from a duplicate negative, and are distributed for viewing by audiences and for broadcasting on television. “Protection prints”, which essentially are physically indistinguishable from exhibition prints, are also manufactured from a duplicate negative. They may be used to manufacture additional duplicate negatives if the original negative or a fine-grain master positive is unavailable, although the resulting duplicating negative is of inferior quality. It is also possible to manufacture exhibition and protection prints directly from the original negative, but this is rarely done because of the risk of damage to the original negative.
Except for original negatives and re-recorded sound track negatives and except for the original Technicolor imbibition process, the film materials are manufactured by putting the strip of film whose images are being copied through laboratory printing machines and then chemically developing the raw film stock that was printed. A contact printer is used to manufacture 35mm film material from 35mm film material and from 16mm film material from 16mm film material, and a laboratory reduction printer is used to manufacture 16mm film material from 35mm film material. If the film material that was manufactured is a picture negative (other than an original negative), it is standard practice to manufacture immediately from that picture negative a single positive print, called an “answer print”, to ascertain whether the negative was printed properly. A rerecorded sound track negative is manufactured in a sound studio by playing the positive through electronic means and rerecording the sound onto negative raw stock, which is then chemically developed.
A reel of 35mm motion picture film is generally approximately 1,000 feet in length and a reel of 16mm motion picture film is generally approximately 400 feet in length. Generally, at least 10 percent of each reel is not utilized. The running time of a 35mm film is 90 feet per minute, and of a 16mm film, 36 feet per minute. An exhibition print can be damaged in the course of its use. Even if properly handled and cared for, it will eventually wear out as it is used. A film negative can be damaged in the printing process, and it will eventually wear out if repeatedly used. Consequently, archives generally try to avoid using original negatives to make prints. While prints can be struck directly from the original picture negative or earliest available preprint material, this is not the usual practice in the industry and is rarely, if ever, done by UA.
Duplicate negatives are regularly and commonly used to manufacture exhibition prints. At the time UA conveyed the original negatives or earliest available preprint materials to the Library and the University, it possessed or believed it possessed one or more duplicate negatives for each of the motion pictures involved. UA generally owned at least one 16mm duplicate negative for each of its motion pictures that it expected to exploit commercially. Normally, it also possessed additional preprint material {e.g., fine-grain master positives) for such movies from which replacement duplicate negatives could be made. Because of the availability of these articles, recourse to any of its original 35mm nitrate negatives was rare, occurring in the aggregate approximately 10 to 12 times per year.
Nonfilm materials conveyed to the University were integral to the commercial structure of the motion picture industry. These nonfilm materials included:
—still photographs (stills): individual positive print photographs that are taken by a unit photographer, during the filming of a motion picture, of the key scenes, settings, background, cast and filming activity. Such photographs com*447monly provide materials for publicizing and promoting the motion picture following its completion.
—still negatives: a negative of a still photograph from which positive prints are prepared.
—still books: a bound book containing linen-backed copies of the still photographs with respect to a motion picture (also called a “linen book”).
—key books: a bound book, containing copies of the representative still photographs with respect to a motion picture, that is used for promotional purposes.
—starheads: still photographs of an individual actor or actress, taken in a studio or other photographic setting unrelated to any given motion picture film, that is ordinarily used for promotional purposes. Generally, the actor or actress photographed in the starhead was under a long term or multiple picture contract with the studio or the motion picture producer.
—pressbooks: books that are distributed to a prospective exhibitor of a motion picture film containing suggestions as to ways to promote the film, including forms of newspaper advertising, layouts, forms of press releases, synopses, and other promotional suggestions.
—production legal files: files customarily maintained with respect to each motion picture containing contracts for performers, contracts for rights to the story and to the screenplay, and any copyrights or permissions (as, for example, to a song used in the picture).
—production files: files that may include some or all of the following:
—story outline or synopsis: an outline of the basic plot element, usually fewer than 25 pages in length and not using cinematic terms.
—treatment: an early rendition of the motion picture that includes a longer outline of the plot, begins to break down the story into scenes, and may include dialogue and shot descriptions.
—screenplay: is a complete breakdown of the film into scenes and shots.
—shooting script (temporary, revised temporary, final, revised final): a script containing dialogue as well as a description of the scene and instructions for the actors and the cameramen. It is the script used in the filming of the film and may contain thereon notations of changes made during filming.
—dialogue (also “dialogue transcript” or “continuity”): a script containing the complete dialogue in the finished film, shot by shot, with the shots numbered consecutively and the separation from reel to reel being indicated, that is prepared after the film has been edited into its final version. It is used for foreign language dubbing purposes and to accommodate censorship cuts.
—title list (also “title sheet for superimposed version”): (a) complete cast and crew credits for each title, (b) a 1-2 page synopsis of each title, (c) shot numbers for each of the shots in the picture, sequentially and consecutively numbered, with beginning and ending footage and frame counts for each shot, and an inclusive total footage and frame count for each shot. The lines of dialogue provided here are not complete — they are intended merely as a sampling of dialogue appearing in the film.
—spotting sheet: (a) a complete breakdown of the finished film, (b) a brief description of each shot as it appears on the screen (but not the accompanying dialogue), (c) the footage of each shot, rounded off to feet (but no frame counts), and (d) a complete description of each title which appears in the film, including a description of the point in the film at which each of these titles appear and disappear. Additional information indicates whether each of the shots is an interior or exterior shot.
—trailer title list: a title list for a short preview film that is used to advertise the motion picture.
—music cue sheet: an index of music used in a film, indicating title, composer, copyright owner, type of use and duration of each musical composition.
*448Still photographs and starheads were created for promotion and advertising purposes with respect to films distributed by UA and its predecessors in title, and to that end, were provided without specific charge to persons to whom publication rights had been granted and were either provided without specific charge or sold to exhibitors (including television stations) to utilize for publicity purposes when related to a film being exhibited. Starheads were also sent to members of the public, usually without charge, upon request. Pressbooks were provided without specific charge to prospective exhibitors when related to a film being exhibited. Television stations were provided without specific charge music cue sheets for royalty purposes when related to a film being exhibited.
In the production of a film there are generally several generations of scripts. Early generations, such as synopses and treatments, are used in planning the film. Shooting scripts are used for the actual filming and later generations, such as continuities, are used in the post-filming production processes. It is customary in making a film to produce several copies of a script for the use of the actors and others in producing the film. Accordingly, before 1951, scripts were typically produced by the mimeograph or ditto processes. Some number of the early generation scripts conveyed by UA to the University are either typewritten or carbon copies. Most of the later generation scripts were either mimeographed or dittoed. Some number of the early and later generation scripts contain original handwritten notations reflecting changes made in the course of producing the film.
There are numerous businesses that deal in motion picture prints, still prints, scripts, and other film memorabilia. Those businesses dealing in still prints, scripts and other film memorabilia are sometimes referred to as “dealers”. Some such dealers operate retail stores.
Pressbooks of the type conveyed by UA to the University are bought and sold by private collectors and dealers. Some press-books are copyrighted and others are not. The market value of pressbooks is not affected, however, by whether they are or are not copyrighted. Scripts are generally copyrighted. Legally acquired scripts are uncommon, although dealers sometimes sell scripts.
UA Business
During the period 1919-50, UA directly engaged in distributing films produced by others. Generally the producers were independent of UA. Except for some TV production between 1960 and 1966 by ZIV-United Artists, Inc., UA has never engaged in the production of motion pictures in the United States. In the period-1936-41, it owned a 50 percent interest in Walter Wan-ger Productions, Inc., which produced 17 films, and owned a corporation that produced one film in 1941-42. Subsequent to 1951, UA has had subsidiaries that produced a limited number of motion pictures abroad.
In 1951, UA purchased the stock of Eagle Lion Classics, Inc., the company that was then distributing Eagle Lion and Film Classics feature motion picture films. In 1957 and 1960, UA acquired all of the assets of Associated Artists Production Corporation. These assets included Warner Bros.’ entire film library going back to 1913 when that studio first commenced the production of films. That library consisted of the following principal elements: 806 Warner Bros, sound features, 54 Warner Bros, silent features, 1,507 Warner Bros, short subjects, and 337 Warner Bros, cartoons. Associated Artists Production Corporation also owned a complete collection of 229 Popeye cartoons and 187 Monogram sound features.
In 1960, UA acquired the ZIV Television Library, consisting of over 2,200 television episodes comprising virtually the entire production of the ZIV Television Studio during the period of 1948 to 1960. At the same time, UA acquired domestic television rights to 707 feature motion picture films produced by RKO.
UA purchased the Warner Brothers, ZIV Television and RKO film libraries solely for the purpose of exploiting them commercially. At the time they were purchased, UA *449did not consider these libraries or the tangible materials contained therein to have any present or future non-commercial purpose or value. UA considered that when it acquired these libraries (and paid their respective purchase prices), it was acquiring the right to exploit the films in these libraries commercially and the tangible materials necessary for such exploitation. However, most of the tangible materials acquired by UA when it purchased these libraries (such as the original nitrate negatives and most of the non-film material) were not essential (notwithstanding their possible usefulness) for UA’s continuing commercial exploitation of the libraries, and the purchase price paid by UA for the libraries would not have been reduced had such non-essential tangible materials not been included in the sale. At the time of their acquisition, UA had no plans, nor did it expect, to market or otherwise convey any of the tangible materials contained in these libraries to archives, collectors or scholars.
UA acquired the Warner Brothers Library at what it considered to be an extremely favorable purchase price, which was well below what it considered to be the fair market value of the commercial rights to such film library. The amounts payable to UA under licensing contracts entered into by UA’s predecessor in title and to which UA succeeded when it acquired the Warner Brothers Library covered UA’s purchase price for such library, and UA expected to enter into many more additional contracts licensing the films in such library. For the purposes for which UA acquired and used the Warner Brothers and ZIY Television film libraries, copies of the original tangible materials included in such libraries would have been at least as useful to UA as the originals.
At the time of purchase, UA did not perceive any present or future artifactual, archival or scholarly use or value for any of the items of tangible material separate and apart from their utility in exploiting the libraries commercially so as to warrant the allocation of a portion of the purchase price to such items, either as nondeprecia-ble basis or as nondepreciable salvage value. In those years, neither UA nor the film industry in general evidenced any recognition of archival value or any intention or practice of marketing or otherwise disposing of any of the foregoing items of material to archives, collectors or scholars. For this reason, UA allocated substantially the entire cost of purchasing each film library to the right and ability to exploit the library commercially and none of the purchase price to archival, historical or scholarly values.
American Film Institute
In 1965, Congress enacted the National Foundation on the Arts and the Humanities Act of 1965 (Pub.L. No. 89-209, 79 Stat. 845). Pursuant to the Act, the National Council on the Arts was established. In 1967, the National Council on the Arts established the American Film Institute (AFI) as a non-profit private organization to preserve the heritage and advance the art of film and television in America. It received initially $1.3 million in funding from the National Council on the Arts, and an equal amount each from the Ford Foundation and the Motion Picture Association. Its subsequent support has been from the National Endowment for the Arts and from the private sector. Arnold Picker was a founding trustee of the AFI.
AFI’s basic purpose is the preservation and cataloguing of films. To this end, it attempts to bring attention to the necessity of preserving the nation’s film heritage, to serve as a focal point for coordination and leadership with organizations and archivists in the field, and to coordinate and stimulate the archival activities of regional and private institutions.
One of AFI’s earliest activities was an attempt to preserve American motion pictures that were on nitrate-base film. On June 13, 1968, the AFI entered into an agreement with the Library of Congress, under which the AFI undertook to arrange and provide funding for the acquisition of the best available copies of nitrate-base films that were in danger of decomposition. The films were to be acquired in the name of the Library and housed in the Library, *450which would assume the responsibility for their storage and maintenance as well as the provision of reference services.
In 1968, AFI began to solicit donations of nitrate film from both the film industry and private collectors for either donations of film prints and film negatives or the loan thereof so that a copy could be made and the original returned to the owner. The AFI solicitation stated in part:
Individuals and corporations donating nitrate film materials receive tax benefits, based on the physical value of the print or negative, while retaining all rights of reproduction and exhibition. The Library assumes transport and storage costs for films selected for the National Collection. An acetate preservation copy of the original nitrate material is made at the Library’s expense. The owner is thus relieved of the cost of transferral and nitrate storage and is assured that his film will be preserved by the best methods available.
Owners may also lend nitrate films to the Library. Acetate prints are made with AFI funds and the original material is returned to the owner. In this case, however, no tax benefits are available.
A copy of AFI’s solicitation was sent to UA. There is no documentary evidence that UA responded to this solicitation. On May 20,1968, at the suggestion of AFI, the Library wrote UA and requested a donation of a safety-stock preservation master for a single movie, The Third Degree (Warner Bros. 1927), that was on its special “Rescue List”. UA declined to make the gift. Instead, it would only agree to loan the original negative to the AFI so that the latter could make the requested safety master at its own expense for the Library and then return the negative to UA. Prior to its conveyances of property to the University and the Library, UA had never donated film to any public, charitable and/or educational institution.
By 1982, the AFI had solicited the acquisition of and had arranged for donations to the Library of some 17,000 films (sometimes referred to as “titles”). Material received by the Library through the efforts of AFI is referred to as the “AFI Collection”. More than 95 percent of the titles were made prior to 1951 and were on nitrate stock. Copyright owners who conveyed film material pursuant to the AFI-Library acquisition program retained all commercial rights to the films.
Library of Congress
Prior to 1965, the Library of Congress did not have an extensive collection of pre-1913 film materials. This was a result of the copyright deposit system that was in place prior to 1913. Under this system, the maker of a film deposited a paper strip negative, which constituted the entire movie at the time it copyrighted the moving picture. This method of copyright deposits stopped in 1913, and the Library had almost no film material between the period 1913 to 1942.
The Library began to collect nitrate film for preservation purposes in the early 1940’s. By 1965, the collection consisted of over 25,000 titles. The program was designed to preserve in perpetuity the motion picture that is initially recorded on nitrate film. The Library’s policy and practice is to gain access to the original nitrate negatives, or the best available later generation film, so that the motion picture can be copied and thereby converted to, and preserved on, safety (acetate) film. For safety and storage reasons, it has been the policy of the Library to destroy nitrate film once safety copies have been made. The Library considers its nitrate film to be a liability. To reduce the amount of nitrate film in storage and to thereby minimize the costs and hazards associated with its retention, the Library has consistently maintained the policy that such film is to be destroyed as soon after it is copied as is possible. Adequate space and staff to maintain its nitrate film has been a chronic problem for the Library. The Library staff’s practice is not to destroy nitrate negatives until necessary; where feasible, preservation of original nitrate negatives remains a priority to the Library staff.
It was the Library’s policy and practice to accept either gifts or deposits of nitrate film. The Library treats nitrate film the *451same way whether it is deposited or gifted. The number of film deposits accepted by the Library increased substantially beginning in the mid-1960’s. In late 1968 or early 1969, the Library received a large deposit of nitrate film of RKO movies. The receipt of this film absorbed all of the Library’s available storage space and caused it to search for additional vault facilities.
The Library’s permanent record of a motion picture is called its “preservation master”. It is made on acetate-base safety stock film and is typically a fine-grain composite master positive. The picture and sound quality of a fine-grain is almost as good as that recorded on the original negative. Movie companies generally regard a fine-grain as their “master” also. The Library treats its fine-grains as preservation masters and, therefore, they generally are not physically used but are instead held as archival objects. It eventually will cost the Library well over $1 million to make preservation masters for UA’s motion pictures. UA will pay nothing towards this cost, although it will have the right in perpetuity to use these articles.
University of Wisconsin
In 1960, the University established the Wisconsin Center of Film and Theater Research in conjunction with the State Historical Society of Wisconsin. The purpose of the Wisconsin Center was to acquire and preserve materials that document the performing arts in 20th century America, and make them available for research. Professor Agatino Balio became the Director of the Wisconsin Center in 1966 and expanded its focus to include motion picture materials.
In the late 1960’s, the University was one of just a few educational institutions that had a motion picture archive. Since it had no regular source of funds with which to make purchases, it relied almost exclusively on donations for additions to its archives. This situation generally applied to the other universities that also maintain film archives.
The University does not have an established fund from which to make purchases of films or related materials. However, in two instances, one in the late 1960's and the other in the late 1970’s, the University had purchased such items. In the first instance, the University paid $10,000 for various items of memorabilia from an estate; the articles acquired in the Daniel Blum Collection on stage and screen personalities included several hundred scrapbooks, and between 50,000 and 100,000 photographs, many of which were autographed. The second transaction involved payment by the University of $25,000 to a private film collector, David Shepard, for 16mm exhibition prints of various feature-length, documentary and cartoon motion pictures. Most of these films were in the public domain. Professor Balio testified that he “literally had to beg” for money to acquire motion pictures for the University and that “obtaining an appreciably larger sum in 1969 would have been impossible.”
Negotiations for Conveyances
In February 1968, Professor Balio wrote to UA’s president, Arthur Krim, soliciting a donation of his noncurrent personal papers to establish the Arthur Krim collection of manuscripts as a part of the Center’s archives. Mr. Krim referred the request to UA’s then Chief Operating Officer, Arnold Picker.
In April 1968, Mr. Picker and Professor Balio met to discuss the scope of the latter’s request. At this time the Professor proposed that the gift include UA’s corporate records for the period 1919 to 1951. During this period, UA had been under the control of its original owner-management team of Mary Pickford, Charlie Chaplin, Douglas Fairbanks, Sr., and D.W. Griffith. Professor Balio advised UA that if it would contribute its old corporate records, the University would catalog them and make them available to UA upon request.
Mr. Picker enlisted the aid of Robert Schwartz, U.A.’s Director of Administrative Services, and Herbert Sehottenfeld, Vice President of UA’s legal department, to deal with Professor Balio. Mr. Picker asked Mr. Sehottenfeld to determine whether the gift could create any legal problems, and he asked Mr. Schwartz to ascertain *452whether the proposed conveyance would impede UA’s continuing operations.
All of the pre-1951 corporate records which Professor Balio sought from UA were stored at the Long Island City warehouse. These records were no longer used for commercial operations, occupied too much space and UA was inclined to destroy them. Professor Balio first visited the warehouse in or about the summer of 1968. During the course of visits to the warehouse, Professor Balio noticed movie memorabilia and asked if still photographs, scripts, pressbooks, and other promotional materials could be included.
Professor Balio’s expression of interest in the acquisition of additional materials from UA stimulated consideration of including more than only the corporate records. For several months in 1969, Mr. Schottenfeld and Professor Balio discussed other materials to enhance the gift to the Center’s collection. The gift thus grew to include still photographs, still negatives, pressbooks, scripts and other materials.
For various reasons, including the huge volume of documents in the warehouse, consisting of literally millions of papers taking up 4,000 cubic feet of space, it was not feasible for Professor Balio to review the documents in the warehouse for purposes of selecting those which he wanted for the University’s collection. Accordingly, it was agreed that Professor Balio would designate all of the files that he thought possibly could be of any interest to the University, that these files would be shipped, at UA’s expense, to Madison, Wisconsin, where they would be examined, and that whatever was not wanted would either be returned to UA or destroyed.
In 1968, Professor Balio advised UA that an appraisal of its corporate records would be needed, and he suggested that UA contact Milton Luboviski for this purpose. UA contacted Mr. Luboviski in the summer 1968. At this time, UA did not believe its corporate records had any significant value and, therefore, expected that Mr. Lubovi-ski’s fee would be small. Before he examined the corporate records, Mr. Luboviski informed UA that he was prepared to value the materials at between $200,000 to $250,-000. After Mr. Luboviski had disclosed his preliminary valuation of the corporate records, UA began to consider the potential tax consequences of its donation. Mr. Picker consulted with UA’s in-house tax specialist.
After UA decided to include additional materials, it initiated a search of its warehouse and other facilities to determine what items might be suitable. In this effort, UA ascertained that much of the non-film materials for its old movies was seldom used or needed and that their inclusion would not interfere with its commercial operations.
Mr. Picker was the individual within the UA organization who made the final decisions on the conveyances both to the Library and the University. He believed that he did not have the authority to give away the company’s property where it could be used for commercial purposes. In deciding what articles to include, Mr. Picker made it clear from the outset that he would not authorize any conveyance which would in any way hamper UA’s ongoing operations. He was assured that, whatever property was involved, it would be well maintained.
In conveying the film to the Library and the University, UA’s personnel were confident that UA would have reasonable access at its own expense to the property conveyed (and/or their replacements) whenever the need arose, so long as such property existed, and that their physical relocation would pose no serious problems.
Mr. Picker believed that it made no difference, from a practical standpoint, where the negatives were stored as long as the company had access to them. Mr. Picker advised his subordinates that UA’s right to access was an important feature of any agreement. He testified that he approved the conveyances because he was convinced that the company’s commercial interests would not be impaired and that the transfers would not cause UA to lose any money or reduce the value of the company’s assets.
During the summer of 1969, Mr. Schot-tenfeld also conceived the idea of giving all *453of UA’s movie and television productions to the University. After consulting with other personnel at UA, Mr. Schottenfeld offered Professor Balio its 16mm positives and original 35mm negatives for both the movie and television titles. When Professor Balio learned that the negatives for the movies were all on nitrate film, he had to decline the offer because the University lacked the facilities and resources to store them. He eagerly accepted the negatives for the ZIV television productions, which were on acetate (safety) stock.
Warner sound features:
On August 22, 1969, Professor Balio forwarded to Mr. Schwartz at UA copies of the University’s model deed of gift and a copy of the section of the House Report on the Tax Reform Act of 1969, dealing with charitable contributions. The letter requested comments on the model deed of gift.
UA’s officials did not learn of the proposed changes to the tax laws regarding charitable contributions until the late summer or early fall of 1969. By this time, one change, the amendment to IRC § 1221(3), had become operative, and other restrictive provisions were scheduled to take effect as of January 1, 1970. UA had already determined to make the conveyances and Mr. Picker directed Mr. Schwartz and Mr. Schottenfeld to make every effort possible to complete the conveyances to the Library and the University before the end of the year. Many people in the organization devoted long hours to the project, giving it the highest priority.
On September 5, 1969, Mr. Schwartz wrote to Mr. Luboviski to recapitulate the material which to date had been turned over to the University and inventoried, and to identify additional material UA wanted to add to the depository. The new material was described as representative of United Artists Product prior to 1950 and as “one of a kind”. Mr. Schwartz noted the inventory of items enclosed was voluminous, and requested Mr. Luboviski to maintain the inventory in a permanent safe place until a determination is made “when and if we shall turn it over to the University.” The letter indicated there was a great urgency on UA’s knowing some approximate appraisal figures, and that UA “would appreciate your contacting me no later than Tuesday, September 9th”.
A memorandum to Mr. Picker, dated September 9, 1969, prepared by Mr. Schotten-feld for the “Archives Committee” summarized the present status of the corporate donation to the University. The memorandum included a preliminary appraisal received by telephone from Mr. Luboviski. The preliminary appraisal was said to represent the minimum values based upon a limited examination of the lists of the materials which UA had supplied. The memorandum included the following chart:
RANGE OF APPRAISED VALUATIONS (in thousands)
TYPE OF MATERIAL
Minimum Probable Value Value
United Artists Corp. (pre-1950 material) UA corporate business records (per formal written appraisal) CO ^ oo oo t-H
777 UA key stillbooks (including 560 pressbooks) to ^ o as
35,000 UA still negatives t>0 cn o o oo
130,000 Eagle Lion still negatives 05 cn o o lo
1,197 1,467 Total UAC pre-1950 material
United Artists Television, Inc. (UAA pre-1950 materials)
800 original picture negatives 2,500 o O O
400 shooting scripts 30 o CO
Production legal files 80 o o <N
*454(in thousands) TYPE OF MATERIAL RANGE OF APPRAISED VALUATIONS
Minimum Probable Value Value
$ 40 $ 50 10,500 still negatives
375 625 50 Warner silent features-negative material
750 1,125 1,500 Warner short subjects-original picture negatives
360 360 360 Warner cartoons-original picture negatives Monogram sound features:
162 original picture negatives CO CM 05 to
1,600 still negatives CO 00
200 Humphrey Bogart stills and still negatives CM to
Total UAA pre-150 materials 4,307 6,643
ZIV division of UAC (ZIV pre-1960 material) 2,000 episodes of TV series
—original picture negatives 1,000 1,200
—shooting scripts and stills 100 120
1,100 1,320
GRAND TOTAL OF ALL MATERIAL $6,604 $9,430
The memorandum noted that under the terms of the proposed donation, the University would be granted only the physical possession of the listed material, for the sole purpose of making the material available to scholars and for the pursuit of an active program of research under the Center. The memorandum included the following:
If only nitrate negatives are available on certain films, we will try to arrange to deliver them to the Library of Congress, and thereby achieve the same result. In such event, we will also consider the possibility of manufacturing safety-stock dupe negatives to give to the University of Wisconsin in lieu of the nitrate negatives. In such event, the evaluation of our gift will be increased by at least the amount of our out-of-pocket cost for the manufacture of the safety-stock dupe negatives.
We will retain ownership of all copyrights in the material (to the extent now owned by us, and as subsequently renewed by us), as well as all commercial exploitation rights in the material. In addition, we will retain rights of access to the material granted to the University (or the Library of Congress), in the event we require the duplication of any or all such material.
The valuation figures obtained by telephone from Mr. Luboviski, made it evident to UA’s management that a large portion of the total appraisal would be attributable to the nitrate negatives. When Mr. Schot-tenfeld was apprised that the University could not accept the nitrate film, he remembered that donations of these types of materials had previously been solicited by the AFI from all the motion picture companies. He contacted the AFI and it referred him to the Library.
Shortly thereafter, Messrs. Schottenfeld and Schwartz met with the Library’s General Counsel, John Kominski, and a Dr. Kuiper, who was then Chief of the Library’s Motion Picture Division. The UA representatives indicated that they were interested in giving the Library the company’s nitrate negatives.
Dr. Kuiper knew that UA had little need for nitrate film stock. He also understood that a collection as large as UA’s would be expensive to store and maintain. He recognized that it would be advantageous to a business in UA’s circumstances to relieve itself of those costs. Dr. Kuiper told the *455UA officials that while the Library was interested in the company’s proposal, it currently had insufficient space for UA’s negatives and was in the process of trying to secure additional facilities. The Library personnel did not represent that the Library had any commitment from Congress for the funds necessary to obtain and provide suitable facilities for the film. The UA representatives indicated that they were willing to hold the negatives as long as the Library wanted them and would delay their physical delivery until such time as the Library was in a position to accept them.
The Library, to allow the company to decide which form it preferred, sent to UA sample agreements for either a gift or a deposit. Since Mr. Schottenfeld wanted legal title to the negatives to pass the Library, he chose the gift format.
The Library prefers unconditional gifts of film, but it has granted access rights to donors where a specific request is made. The Library has found that servicing donors’ requests for certain film has proved burdensome and, therefore, in recent years it has began to make such provisions more limited. The access provisions that were included in the Library Agreement were added at UA’s behest. They were as broad as any that the Library has ever extended. The access privileges secured by UA were valuable rights. The Library’s General Counsel considered the grant of access rights to UA to be the “price” the Library had to pay for the rights it obtained in the Library Property.
Gift Instruments
By a document titled “Instrument of Gift”, dated November 20, 1969, and accepted for the United States by the Librarian of Congress, signed November 24, 1969, (Library Agreement) UA conveyed to the United States, for inclusion in the Library, the original 35mm nitrate motion picture negatives (or, where such negatives no longer existed, the earliest available later generation preprint material) relating to (i) substantially the entire sound motion picture output of Warner Brothers through 1951 and substantially the entire extant silent motion picture output of that studio; (ii) the entire motion picture output of “Popeye” cartoons produced by Paramount Pictures through 1957; (iii) sound feature film motion pictures made by Monogram Pictures prior to 1947; and (iv) the feature motion picture “Algiers”.
The conveyance by UA to the Library consisted of the following property (the Library Property):
“Algiers” — comprising 8,640 (35mm) feet of black-and-white film;
54 Warner Brothers silent feature films — comprising 345,575 (35mm) feet of black-and-white film;
806 Warner Brothers sound features— comprising 5,562,990 (35mm) feet of black-and-white film, and 223,110 (35mm) feet of color film;
1,507 Warner Brothers short subjects —comprising 1,315,380 (35mm) feet of black-and-white film, and 193,615 (35mm) feet of color film;
337 Warner Brothers cartoons — comprising 23,743 (35mm) feet of black-and-white film, and 203,985 (35mm) feet of color film;
229 Popeye cartoons — comprising 72,-960 (35mm) feet of black-and-white film and 71,110 (35mm) feet of color film;
187 Monogram features — comprising 1,074,150 (35mm) feet.
Under the terms of the Instrument of Gift, UA agreed to convey legal title to only the “physical property” scheduled in the agreement, with UA reserving all right, title and interest in all property described in the schedules of commercial exploitation, reproduction, publication, exhibition, television broadcasting, or transmission by any other existing or future means of transmission or exhibition, or any other intangible rights to which UA is or may be entitled. The agreement further provided that the preprint materials would remain in the possession of UA as a gratuitous bailee and would not be physically transferred to the Library until it obtained suitable storage facilities. The agreement also provided inter alia that:
(1) the Library was authorized to convert the image (and sound) recorded on the nitrate base film onto safety stock *456(acetate) film, which preservation copies would become the Library’s property;
(2) UA reserved and the University was provided the right of access upon demand, to direct the Library to process orders for positive safety prints to be made either from the nitrate negatives or preservation safety preprint materials and ship such articles to designated laboratories. UA or the University would reimburse the Library for whatever costs or expenses it might incur to process such orders;
(3) use of the collection would be limited to private study by researchers on the Library’s premises except that, with UA’s prior written consent not to be unreasonably withheld, the Library could transfer a limited number of the components of the collection to other institutions in exchange for their motion picture materials, but only if the other archive agreed in writing to all the terms and conditions imposed on the Library;
(4) the Library could not sell or otherwise commercially exploit the Library Property or any of the copies thereof that it was allowed to make; and
(5) upon physical delivery of the nitrate film to the Library, it was obliged to bear all expenses involved in storing, caring for, and maintaining such property.
The University property was conveyed by documents titled “Deed of Gift” and a contemporaneous “Supplemental Agreement” (University Agreement). The documents respectively were dated November 6 and 26, 1969. The acceptances by the University Regents were dated November 17 and December 12, 1969, respectively. The documents identified the materials conveyed by reference to 28 schedules. The documents conveyed the right to physical possession of the following:
(i)UA pre-1951 corporate records as selected by University representatives, including UA corporate and financial records and the files of the law firm O’Brien, Driscoll & Rafferty relating to its representation of UA.
(ii) such pressbooks, music cue sheets and negatives and positives of still photographs as UA possessed relating to pre-1951 motion pictures distributed by UA;
(iii) 16mm exhibition prints of the films conveyed to the Library;
(iv) such scripts, still photograph negatives, pressbooks and production legal files as UA possessed relating to the motion pictures described in (iii);
(v) such corporate files as it possessed relating to Eagle Lion Classics, Inc.;
(vi) such still photograph negatives as it possessed relating to films distributed by Eagle Lion and Film Classics;
(vii) original 35mm acetate negatives and 16mm exhibition prints of 2,229 motion picture television episodes produced by ZIV Television Programs, Inc.;
(viii) such still photograph negatives, prints and scripts as it possessed relating to the motion pictures described in (vii);
(ix) 16mm exhibition prints of 707 sound motion picture feature films produced by RKO and the right to show such films on the Madison, Wisconsin television station operated by the University; and
(x) the right to obtain replacements of the items included in (iii) and (ix) above, at cost, from the Library or UA.
In the University Agreement, UA agreed to transfer legal title to the physical materials and, as in the Library Agreement, retained all of the rights for commercial exploitation of such property. The University Agreement provided that the materials would be kept by UA as a “gratuitous bailee” until the University could obtain available space (which term was limited to one year), and that when the latter took possession of the property it would “maintain the materials in good condition at all times in fireproof, clean storage space, with temperature and humidity controls appropriate for the storage of such materials.” The University Agreement also provided inter alia that:
(1) The University could not copy (or allow anyone else to copy) any of the materials conveyed without UA’s written consent;
*457(2) Use of the materials would be limited to study on the University’s premises by researchers and students, except that the RKO motion picture prints co30d be broadcast for educational purposes on the University’s television station; and
(3) UA would have the perpetual rights of access to all the materials so as to permit it to duplicate such articles as its sole cost and expense.
The gift to the University ultimately included a 16mm positive print of each of the motion pictures of which the preprint material was given to the Library, the ZIV television library negatives, which were on an acetate rather than a nitrate base, 16mm prints of the ZIV television library, and 16mm prints of the RKO library with the exclusive, perpetual right to broadcast the RKO library on the University’s Madison, Wisconsin television station.
“Algiers” was the only pre-1951 motion picture owned by UA in 1951 and still owned by UA in 1969. UA considered it to be an example of the motion pictures that were the subject of the business covered by the UA corporate records and other non-film material donated to the University. UA decided to donate a 16mm print of “Algiers” to the University, and offered the original nitrate preprint material of “Algiers” to the Library. This offer was accepted by the Library.
UA paid for all costs of shipping the donated material to the University. UA also donated $150,000 to the University to help complete the inventorying and cata-loguing of the material that would be appropriate for an archival research center. Through 1980, the University spent $344,-500 to catalog the University Property. Of this amount, $122,900 was paid out of the UA grant and the balance, $221,600, came from University funds. A substantial part of these costs were for salaries for individuals who also performed services in connection with the operation of the film archive.
Delivery
Because the Library was unable to assume immediate physical possession of the donated materials, UA held the materials as gratuitous bailee of the Library until the Library was able to assume physical possession thereof. The materials conveyed by UA to the Library were physically transferred to the Library during the period February 10, 1970, through June 7, 1973, and in May 1978. The Library determined when such physical transfers were to take place and the approximate quantity of materials to be transferred on each occasion. The material relating to the 12 Monogram feature films that was physically transferred to the Library in May 1978 was sent by UA when the Library notified it that in the course of its inventorying of the material previously received by it, it could not locate material relating to those films.
A similar gratuitous bailee arrangement existed with respect to materials that were not in the possession of the University at the time of acceptance of the Deeds of Gift. The materials conveyed by UA to the University were physically received during the period August 27, 1968, through November 3, 1976. There were two shipments in 1968, 25 shipments in 1969,11 shipments in 1970, and one in each of the years 1971, 1972 and 1976. Such items were delivered either to the Wisconsin Center for Theater Research or the State Historical Society of Wisconsin, both of which are located in Madison, Wisconsin.
UA did not possess suitable exhibition prints for certain of the motion pictures listed in the schedules attached to the Deeds of the Gift to the University. Accordingly, to comply with the terms of the Deeds, in late 1969 and in 1970, it ordered 16mm prints for all 54 silent features (Schedule C-2), 53 episodes of television series (Schedule B-2), “Algiers” (Schedule A-6), 785 shorts (Schedule C-6), ten cartoon reels (Schedules C-8 and C-10), and 94 feature-length sound motion pictures (Schedules G-4, C-13 and D-l). The cost of making these prints and, in a number of instances, the manufacture of preprint material and additional 35mm prints that UA kept, totalled $120,063, which UA deducted as a miscellaneous business expense for federal income tax purposes for the year 1970. The deduction was reclassified as a charitable contribution deduction by the Internal Revenue Service and then was disallowed. The preprint material which was *458made in the course of the production of the prints was kept by UA.
The 16mm positive prints that were produced especially for delivery to the University were shipped to the University on various dates, primarily in February and March 1970, but also on later dates in 1970 and, in a few isolated instances, in 1971. Of the 16mm positive prints produced especially for delivery to the University, 688,636 feet of black-and-white and 8,244 feet of color film were shipped to the University on or before March 15, 1970, and 199,549 feet of black-and-white and 3,816 feet of color film were shipped between March 16 and December 31, 1970. All of these prints were delivered promptly after they were manufactured.
Valuations
1. Milton Luboviski
In summer 1968, UA retained Milton Lu-boviski to appraise corporate records. Subsequently, in summer and fall 1969, the assignment was enlarged to include the film materials and memorabilia included in the conveyances to both the Library and the University. Milton Luboviski’s appraisal of the fair market value of the Library Property was $11,038,850 at the time of the conveyance. His appraisal of the fair market value of the University Property was $16,705,478 at the time of the conveyances. These appraisals were in final form in November 1969. The combined appraised fair market values total $27,744,328.
(a) “Algiers” (Schedule A-5) $1.00/ft; $ 8,640
(b) 54 Warner Bros. Silent Features (Schedule C-l) $8,000/title; 432,000
(c) 828 Warner Bros. Sound Features (Schedule C-3) $1.00/ft; 6,259,680
(d) 1510 Warner Bros. Short Subjects (Schedule C-5) $.50/ft;
(a) 900 ft; (b) 1080 ft;
(c) 1620 ft 1003(a) 451,350
26(b) 14,040
481(c) 389,610
(e) 339 Warner Bros. Cartoons' (Schedule C-7) $.75/ft; 228,825
(f) 234 Popeye Cartoons (Schedule C-9) $.75/ft; 157,950
(g) 187 Monogram Sound Features (Schedule C-ll) $.50/ft. 546,975
TOTAL RECOMMENDED VALUATION $8,489,070
Mr. Luboviski received a fee from UA for his work in the amount of $163,000. This fee was fixed prior and without regard to Mr. Luboviski’s assessment of the fair market value of the property appraised by him.
2. Library of Congress
In 1969, at the time of UA's conveyance to the Library, the Library had in effect regulations entitled “Evaluations of Library Materials”, LCR-315, dated November 15, 1966, as revised. Pursuant to LCR-315, an Evaluations Committee of the Library undertook to evaluate UA’s conveyance and prepared a written evaluation dated November 24, 1969. The total amount of the evaluation for the Library Property was $8,489,070. Pursuant to LCR-315, the evaluation was approved by the Chief of the Exchange and Gift Division and by the Assistant Librarian of Congress. Because of the amount of the evaluation, it also was approved by the Librarian of Congress. The Library’s November 24,1969, evaluation was concerned with the same property that had been appraised by Mr. Luboviski at $11,038,850.
The Committee’s November 24, 1969, evaluation mainly was based on an average value per foot ranging from 50$ per foot to $1 per foot, with an average length of 7,560 feet per 84 minute feature. The per foot fair market value, and valuation per schedule, of the 35mm original nitrate negatives in the Library Property were as follows:
*459In March 1970, the Evaluations Committee of the Library undertook a review of its theory, methodology and practice in the valuation of films and promulgated a memorandum entitled “Review of Evaluation Method for Motion Picture Film”. The memorandum dated March 19, 1970, contains the following recommendation:
The Committee reviewed its present practices in the evaluation of film, the theories on which these practices are based, and their relationship to methods used with other forms of material. Alternative methods were explored. All members of the Committee agreed that, in the absence of an actual documented market, the method of evaluation combining both qualitative and quantitative elements cannot be avoided. * * * The method outlined below, while clearer in its logical structure and formulation, represents no departure from past practice as applied to manuscripts, recordings, prints and photographs, and other materials. The Committee further recommends that future evaluation memoranda more fully record the qualitative aspects of the evaluation process, describing in greater detail the relative significance of the film in terms of its physical characteristics, its place in cinema history, its possible contribution to sociological or other related research, its relationship to the film program of the Library of Congress, with full comparisons to other films previously evaluated.
After UA received the November 24, 1969, LOC evaluation report, it requested, on March 10, 1970, the Library to reconsider and to raise its appraisal because it believed the Library’s evaluation failed to give weight to certain relevant factors. On April 8,1970, the Evaluations Committee of the Library met and prepared a revised written evaluation, dated April 9, 1970, of UA’s gift, which placed the value of the property donated to the Library at $9,282,-415. By this revision to the evaluation, the Evaluations Committee accorded a 10 percent premium in value for completeness to the following schedules: the 54 Warner Bros, silent features (Sch. C — 1); the 806 Warner Bros, sound features (Sch. C — 3); the 1507 Warner Bros short subjects (Sch. C-5); the 337 Warner Bros, cartoons (Sch. C — 7); and the 229 Popeye cartoons (Sch. C-9). The revised evaluation was approved by the Chief of the Exchange and Gift Division, and by the Librarian of Congress.
The Library’s evaluation was based on assumed total footages in each category. Those footages were later determined to a greater degree of accuracy than was possible at the time of the Library’s evaluation. The parties stipulate the value, applying the Library’s method and conclusions to the more accurate footages in the various film categories, is $8,394,338.
3. Malcolm Willits
Malcolm Willits, a dealer since 1965 in movie memorabilia, operates the Collector’s Bookstore in Hollywood, California. Mr. Willits was retained by the IRS in 1973 to appraise all the non-film memorabilia given to the University by UA. For this appraisal he traveled to Madison, Wisconsin, and during the period April 23 to May 2, 1973, examined the donated materials. His report submitted to the IRS is dated June 22, 1973. The report states that the non-film memorabilia in the University Property had a total value of $63,027.60. The report contains the following descriptive comment:
The United Artists donation definitely has value; the question is, how much value. It is, of course, not a collection but an accumulation, an accumulation of what they happened to have left, plus what they have acquired, over the past fifty years. It is certainly not complete from a research point of view. For instance, with the exception of six small boxes of scripts filed with the corporate papers, there are no United Artists scripts in the donation. Nor are there any United Artists films. Since the scripts and films are the end-product and reason for the corporation’s existence, this is a serious deficiency. The Warner *460Brothers section of the donation is completely lacking in company records and still photographs, although it is excellent in films, scripts, and negatives. Much of value is missing, so any researcher must be content with using as source material whatever United Artists happened to have available for donation.
The Willits report valued the various schedules as follows:
Schedule C-18 Monogram 8x10 Still Negatives
6,203 negatives at 10$ each = $ 620.30
Schedule C-16 Warner Bros. Sound Pressbooks
772 pressbooks at $4.00 each = 3,088.00
Schedule A-l United Artists Corporate Papers
Unit appraisal value = 5,000.00.
Schedule G-19 Humphrey Bogart Still Negatives
895 still negatives, 8xl0’s & 4x5’s at 25$ each = 223.75
Schedule C-15 Warner Bros. Pressbooks — Silent Features 151 Warner Silent Pressbooks at $4.00 each = 604.00
Schedule C-13 Warner Bros. Production Files
829 files of Sound Scripts 8,145.00
582 files of Silent Scripts at $1.50 each = 873.00
731 files of Short Subjects Scripts at $1.00 each = 731.00
Schedule C-17 Monogram Sound Pressbooks
79 Monogram Sound Pressbooks at $2.50 each = 197.50
Schedule B-4 Television Still Negatives
39,247 Still Negatives at 5$ each = 1,912.35
Schedule C-22 Starhead Still Negatives
41,611 Starhead Negatives at 10$ each = 4,161.10
Schedule C-21 Starhead Still Negatives
9,474 Starhead Negatives at 15$ each = 1,421.10
Schedule A-3 United Artists Pre-1951 Still Negatives 48,854 United Artists negatives at 10$ each = 4,885.40
37,293 Eagle Lion negatives at 5$ each = 1,864.65
12,857 Film Classics negatives at 10$ each = 1,285.70
12,431 miscellaneous negatives at 10$ each = 1,243.10
Schedule A-7 Algiers Production File
Legal file and original shooting script = 65.00
Schedule A-8 Additional United Artists Pressbooks
20 pre-1951 pressbooks = 53.00
Schedule A-4 United Artists Music Cue Sheets
457 Music Cue Sheets at 25$ each = 114.25
Schedule C-20 John Wayne Still Negatives
16 negatives at $4.00 each = 64.00
Schedule A-2 United Artists Pressbooks and Stills
88,800 UA stills at 15$ each = 13,320.00
560 UA pressbooks at $6.00 each = 3,360.00
supplemental list (assuming 600 stills in the 6 stillbooks) = 246.00
Schedule C-14 Warner Bros. Still Negatives
18,456 negatives at 20$ each = 3,765.40
Schedule B-3 Television Shooting Scripts
1,928 scripts at $3.00 each title = 5,784.00
TOTAL $63,027.60
*4614. Raymond Fielding
Dr. Raymond Fielding was retained by UA to appraise the Library Property and the University Property. Dr. Fielding is Professor of Communications, and Director of the School of Communications, University of Houston, Texas. He has been associated with motion picture archives and libraries for more than 25 years and has had a distinguished academic career in the motion picture field. He has served as a trustee of the AFI, and of the University Film and Video Foundation. His experience includes 64 appraisals of film negatives, film prints, and other film materials. His appraisal of the Library Property and the University Property is considered as a single appraisal.
Dr. Fielding’s assessment of the fair market value of the UA collections in his report dated April 1981, as updated November 1984, is recapitulated as follows:
A. Nitrate Negatives at the Library of Congress
Schedule A-5: “Algiers” $ 10,714.00
Schedule C — 1: Silent Warner Bros, features 428,513.00
Schedule C-3: Sound Warner Bros, features 7,313,092.00
Schedule C-5: Warner Bros, short subjects 995,598.00
Schedule C-7: Warner Bros, cartoons 408,855.00
Schedule C-9: Popeye cartoons 222,735.00
Schedule C-ll: Monogram sound features 665,973.00
Sub-Total $10,045,480.00
B. Materials at the University of Wisconsin
Schedule A-l: United Artists corporate papers $ 215,792.00
Schedule A-2(B) & A-8: United Artists pressbooks 6,684.00
Schedule A-4: United Artists music cue sheets 2,285.00
Schedule A-7: Production file for “Algiers” 338.00
Schedule B-l: Television series 35mm negatives 3,036,915.00
Schedule B-2: Television series 16mm prints 122,457.00
Schedule B-3: Television series scripts and production files 71,566.00
Schedule C-13: Warner Bros, scripts and production files 484,688.00
Schedule C-15: Warner Bros, pressbooks/silent films 2,925.00
Schedule C-16: Warner Bros, pressbooks/sound films 10,984.00
Schedule C-17: Monogram features pressbooks 296.00
Series 5.2: United Artists feature scripts _1,440.00
Sub-Total: $ 3,956,370.00
At Library of Congress: $10,045,480.00
At University of Wisconsin: 3,956,370.00
$14,001,850.00
5. Erwin H. Ezzes
UA retained Erwin H. Ezzes to appraise the fair market value of a license to broadcast 16mm prints of 707 RKO sound feature motion pictures in the University Property (Schedule D-l). UA gave the University the right to broadcast the RKO features for educational purposes over the University’s television station.
Mr. Ezzes had 32 years experience in marketing motion pictures for television. He had been chairman and chief executive officer of United Artists Television, Inc. with responsibility for marketing feature films to television. After retirement, he was a consultant to Twentieth Century-Fox Film Corporation to appraise and market feature films in television markets.
In a report, dated March 22, 1982, Mr. Ezzes determined that in October 1969, Madison, Wisconsin, with 119,500 television homes, ranked 114th in market size among *462the total 204 markets in the United States. The report states that the 707 RKO feature motion pictures licensed for unlimited runs in perpetuity to any station in Madison, Wisconsin is appraised at $183,820.
6. David H. Shepard
David H. Shepard was retained by UA to appraise certain 16mm safety film prints of feature motion pictures included in the University Property. Mr. Shepard’s background includes many activities in the motion picture field. Since 1952, he has been a private collector of 16mm sound and silent features; he owns copyrights to 40 vintage films and actively licenses them; he has served on the faculties of U.C.L.A. and U.S.C., has been an archivist at AFI and a Special Projects Officer for the Directors Guild of America. In his report, dated May 31,1983, Mr. Shepard stated his assignment was to consider the following film subjects:
Schedule A-6 (.Algiers), Schedule C-2 (54 silent Warner Bros, features), Schedule C-4 (806 Warner Bros, sound features), Schedule C-6 (1507 Warner Bros. Vita-phone shorts), Schedule C-8 (337 Warner cartoons), Schedule C-10 (229 Popeye cartoons) and Schedule C-12 (187 Monogram features).
His appraisals were as follows:
Schedule A-6 Algiers $ 350.00
Schedule C-2 54 Warner Bros, silent features 16,870.00
Schedule C-4 806 Warner Bros, sound features 289,412.00
Schedule C-6 1,507 Warner Bros. Vitaphone shorts 50,155.00
Schedule C-8 337 Warner Bros, cartoons 9,530.00
Schedule C-10 229 Popeye cartoons 5,430.00
Schedule C-12 187 Monogram features 27,609.00
TOTAL $399,356.00
7. Robert Cushman
Robert Cushman was retained by UA to appraise the still photographic prints and the still film negatives included in the University Property. Mr. Cushman served as Photograph Curator and Coordinator of Photographic Services at the Herrick Library of the Academy of Motion Picture Arts and Sciences. He has served as consultant to the Directors Guild of America and as a research fellow with the AFI.
In his report dated July 27, 1983, Mr. Cushman stated that the UA collection of stills and negatives consisted of a total number of 139,994 still photographs and 212,954 still negatives, a total of 352,948 individual items. The report stated that probably less than one percent of the negatives are copy negatives and that at least 99 percent of the negatives were original negatives in fine condition.
His report contains the following summary of the appraisal of the fair market values of the still photographic material:
Schedule 1: 87,081 linen-backed still photograph prints from United Artists feature films (consisting of 472 individual production entries)
Appraised value.$ 363,954 (average $4.18 per item)
Schedule 2: 104,677 safety film still negatives from United Artists and other feature films (consisting of 756 individual production entries)
Appraised value.$ 485,509 (average $4.64 per item)
Schedule 3: 48,218 still photograph prints and 21,244 safety film still negatives from ZIV television production series episodes (consisting of 306 individual entries for 48 different TV series in stills, and 61 individual entries for 33 different TV series in negatives)
Appraised value.$ 162,092 (average $2.33 per item)
*463Schedule 4: 17,518 safety film still negatives from Warner Brothers feature films (consisting of 557 individual production entries) Appraised value.$ 98,586 (average $5.75 per item)
Schedule 5: 880 nitrate film still negatives from Warner Brothers feature films (consisting of 38 individual production entries) Appraised value.$ 5,699 (average $6.48 per item)
Schedule 6: 6,321 safety and nitrate film still negatives from Monogram feature films (consisting of 133 individual production entries) Appraised value.$ 25,284 a (average $4.00 per item)
Schedule 7: 895 safety film still negatives of Humphrey Bogart Appraised value.$ 8,950 (average $10.00 per item)
Schedule 8: 16 safety film still negatives of John Wayne Appraised value.$ 112 (average $7.00 per item)
Schedule 9: 7,742 safety film still negatives of Warner Brothers stars (consisting of 11 individual biography entries) Appraised value.$ 53,082 (average $6.86 per item)
Schedule 10: 41,611 safety film still negatives of Warner Brothers stars (consisting of 70 individual biography entries) Appraised value.$ 154,563 (average $3.71 per item)
Schedule 11: 161 safety and nitrate film still negatives from Warner Brothers animated cartoon shorts (consisting of 73 individual production entries and four individual biography entries) Appraised value.$ 805 (average $5.00 per item)
Schedule 12: 11,833 nitrate film still negatives and 416 safety film still negatives from United Artists and other feature films (consisting of 112 individual production entries) Appraised value.$ 73,479 (average $6.00 per item)
Schedule 13: 4,695 linen-backed still photographs prints of the United Artists stars (consisting of 62 individual biography entries). Appraised value.$ 18,868 (average $4.02 per item)
TOTAL VALUE OF ABOVE (352,948 Total Items) $1,450,983 (average $4.11 per item)
Depreciation Recapture
The parties have stipulated as to the amounts of depreciation that UA has been allowed during the years 1962-1969 that is subject to recapture pursuant to IRC § 170(e). The amounts of depreciation recapture are:
$ 326,666 Library Property
University Property
$ 46,392 ZIV still prints
31,642 ZIV still negatives
41,652 Warner Bros, still negatives
Warner Bros. Script Files and Pressbooks Music cue sheets Oh-* OO
Warner Bros. Library & Algiers to rH UO
ZIV scripts O CO cT i — l
*464ZIV production files $ 24,209
Orig. 35mm ZIV negatives 505,603
16mm ZIV prints 78,546
16mm prints — 707 RKO sound features 5,756
TOTAL DEPRECIATION RECAPTURE 804,813 $1,131,479
DISPOSITION
Final Positions
In the final statement of its claims, plaintiff uses Dr. Fielding’s valuation of $10,-045,480 for the Library Property. The claim for the University Property incorporates some of the elements in Dr. Fielding’s valuations, for a total of $3,793,882, and the balance of the $5,828,041 total claimed for University Property is made up of the valuations made by Messrs. Ezzes, Shepard and Cushman. Plaintiff’s final values for its claimed contributions, totaling $15,873,521, are summarized in the following table:
PLAINTIFF’S FINAL VALUATION OF CONTRIBUTIONS
$10,045,480 LIBRARY PROPERTY (Dr. Fielding) UNIVERSITY PROPERTY
Dr. Fielding’s valuations
$ 54,744 Schedule A-l Eagle Lion Corp. Files only
Schedule A-2(B) and A-8 Schedule C-15 547 UA and Eagle Lion Press-books 136 Warner Bros. Pressbooks ^ lO OOOJ co^oa zo oí
Schedule C-16 792 Warner Bros. Pressbooks
Schedule C-17 —sound features 75 Monogram Pressbooks ^ CD OO Oa oa_o3 o' T-t
Schedule A-4 UA Music Cue Sheets 2,285
Schedule A-7 “Algiers” Production File 338
Schedule 0-18 Warner Bros. Files OO OO 00
Schedule B-3 ZIV TV scripts ^ OO 03
50,182 ZIV contract and Production Files
3,036,915 Schedule B-l ZIV 35mm acetate negatives for 2,229 TV episodes
122,457 Schedule B-2 16mm positive projection print for each 2,229 TV episodes
$3,793,882 subtotal
183,820 Mr. Erwin Ezzes’ valuations
399,356 Mr. David Shepard’s valuations
1,450,983 Mr. Robert Cushman’s valuations
$ 5,828,041 Total
$15,873,521 TOTAL CLAIM
Plaintiff’s final claimed contributions are reduced by a total of $1,131,479 for depreciation recapture. Accordingly, plaintiff’s final claim is for a charitable contributions deduction in the amount of $14,742,042.
Defendant’s final position is that the conveyance of nitrate negatives to the Library was not a gift and that plaintiff is not entitled to a charitable contribution deduction for the Library Property. Defendant further contends that the physical property and the property rights conveyed to the Library, even if treated as a donation, has a fair market value that is less than the amount of the $326,666 depreciation recap*465ture that is allocable to the Library Property-
DEFENDANT’S FINAL POSITION
No Deduction LIBRARY PROPERTY UNIVERSITY PROPERTY
$99,918 16mm prints donated in 1969 Fair Market Value
57,172 less Depreciation Recapture
$42,746
4,394 Various still negatives Fair Market Value
Warner Bros. Library Script Files Fair Market Value i-d OO LQ OO
less Depreciation Recapture t*H OO ^ CO
5,100
3,796 Warner Bros. Library Pressbooks Fair Market Value
“Algiers” Production File
65 Fair Market Value
Eagle Lion Records
350 Fair Market Value
TOTAL ALLOWABLE DEDUCTION $56,451
The Internal Revenue Code allows as a deduction from taxable income any charitable contribution, as defined, payment of which is “made within the taxable year.” A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary of the Treasury. 26 U.S.C. § 170(a) (1982). The deduction is authorized to encourage contributions to charitable organizations, and to reward donors for their benevolence. As long as there is a bona fide gift, the taxpayer’s motivation essentially is immaterial. Even where the donation is made solely for the purpose of obtaining a tax benefit, the taxpayer is entitled to the deduction to the extent of the fair market value of the property given. Sheppard v. United States, 176 Ct.Cl. 244, 361 F.2d 972, 981-982 (1966).
No deduction is permissible, however, unless the contribution or gift is made with no expectation of a financial return commensurate with the amount of the gift. H.R.Rep. No. 1337, 83rd Cong., 2d Sess. 44, reprinted in 1954 U.S.Code Cong. & Admin.News 4017, 4180; S.Rep. No. 1622, 83rd Cong., 2d Sess. 196, reprinted in 1954 U.S.Code Cong. Admin. News 4621, 4830-4831. When a donation is made with an expectation of receiving something in return as a quid pro quo for the transfer, no charitable contribution is allowed. Not all benefit to the donor is disqualifying; it is only when the benefits are substantial enough to provide a quid pro quo for the transfer that the deduction is not allowed. Ottawa Silica Co. v. United States, 699 F.2d 1124, 1132 (Fed.Cir.1983); Singer Co. v. United States, 196 Ct.Cl. 90, 449 F.2d 413, 423 (1971).
For purposes of the deduction allowable by I.R.C. § 170(a), the term “ehari-*466table contribution” means a contribution or gift to the United States, if made exclusively for public purposes, and a contribution or gift to a qualified corporation, trust, or community chest fund or foundation. 26 U.S.C. § 170(c) (1982). There is no dispute that the Library qualifies as a donee under I.R.C. § 170. The parties have stipulated that the University is, and at the time of the conveyance was, an organization described in I.R.C. § 170(c)(2), and that the conveyances by UA to the University were for a purpose or function that constitutes the basis for exemption under I.R.C. § 501. During trial, defendant conceded that there was a gift to the University within the meaning of I.R.C. § 170.
*465Defendant contends that, after depreciation recapture, the charitable deduction allowable for the University Property amounts to a total of $56,451. Defendant’s allowances recognize only the 16mm prints that were delivered to the University in 1969, and five items of movie and TV memorabilia delivered in 1969, consisting of various still negatives, Warner Bros, library script files and pressbooks, the production file for “Algiers”, and the Eagle Lion records.
Defendant’s final statement of the allowable charitable contributions is summarized in the following table:
*466Treasury Regulations provide that any charitable contribution actually paid during the taxable year is allowable as a deduction. Under certain circumstances contributions by corporations may be deductible even if not paid during the taxable year. 26 C.F.R. § 1.170-l(a)(l) (1987). Ordinarily, a contribution is considered to have been made at the time delivery is effected. 26 C.F.R. § 1.170-l(b) (1987). If a contribution is made in property other than money, the amount of the deduction is determined by the fair market value of the property at the time of the contribution. The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having a reasonable knowledge of relevant facts. 26 C.F.R. § 1.170-l(c). Delivery occurs when title in the property vests in the donee so as to provide the donee with the power to exercise dominion and control.
In order for the gift to be complete, the delivery or terms of the gift must be such that the donor transfers all dominion and control over the property given. Dominion and control, the retention of which will render a gift incomplete for purposes of the tax deduction, is dominion and control exercisable against the donee: the retention by the donor of a power to direct the disposition or manner of enjoyment of the subject of the gift. Pauley v. United States, 459 F.2d 624, 627 (9th Cir.1972).
In appropriate circumstances, “delivery” can be made by means of a duly executed deed of gift, with physical possession of the property to be transferred subsequently. Where the instrument clearly and unmistakably announces a present transfer of the gift and places the property beyond the power of the donor so as to divest dominion and control over the property, delivery of the instrument can satisfy the “delivery” requirement. Greer v. Commissioner, 70 T.C. 294, 304 (1978), aff'd 634 F.2d 1044 (6th Cir.1980). The instruments involved in the Library Agreement and in the University Agreement were executed by persons authorized to so act. The terms and conditions contained in the instruments were binding on the parties.
I.R.C. § 170(e) provides in pertinent part that, as to any depreciable property that is donated to a qualified charity, the amount of the charitable contribution deduction must be reduced by the amount that would have represented “depreciation recapture” had the donated property been sold by the taxpayer. For donations made in the tax year 1969, the amount of the depreciation recapture is equal to the amount of the depreciation allowed or allowable after December 31, 1961, as long as it does not exceed the excess of the property’s fair market value over its adjusted basis. Some of the UA property is not subject to depreciation recapture because it was not depreciable, or because it was fully depreciated prior to 1962. The stipulations include in this category: Eagle Lion corporate records, Eagle Lion and Film Classics still negatives, original negative and production file for the film “Algiers,” and pressbooks, music cue sheets, still photographs and still negatives relating to pre-1951 films distributed by UA. The parties have stipulated the amounts recovered through depreciation deductions during the years 1962 through 1969 on the Library property ($326,666), and relevant items of University property ($804,813).
*467The Tax Reform Act of 1969, Pub.L. No. 91-172, 83 Stat. 487, amended I.R.C. § 1221(3). Section 1221 defines a capital asset for determining capital gains and losses under the Code. The purpose of I.R.C. § 1221(3) is to deny capital gain treatment to a seller of property described therein. Prior to the 1969 amendment, the section covered a copyright, a literary, musical, or artistic composition, or similar property. The 1969 Act added the phrase “letter, memorandum, or similar property” to assure that collections of papers, such as correspondence, personal and business records, and documents reflecting governmental deliberations, would not be treated as a capital asset if held by the person that created the property. See generally, Bittker, Federal Taxation of Income, Estates and Gifts, II 51.4 (1981). The 1969 amendment explicitly includes letters, memoran-da, and similar property created by or produced for the taxpayer. At the same time section 170(e) was amended to prevent a charitable deduction for the contribution of such items after July 25, 1969. 26 U.S.C. § 170(e)(3) (1982). The regulations provide that, in the case of sales and other dispositions occurring after July 25,1969, a letter, memorandum, or similar property is excluded from the term “capital asset” when held by a taxpayer (i) whose personal efforts created the property, (ii) for whom the property was prepared or produced, or (iii) in whose hands the basis of the property is determined by reference to the basis of such property in the hands of a previous owner described in (i) and (ii). 26 C.F.R. § l/1221-l(c)(2) (1987).
The I.R.S. specifically has recognized, and the legislative history of the 1969 Act makes clear, that the words “letter or memorandum or similar property” do not include “a copyright, a literary, musical, or artistic composition or similar property.” See Rev.Rul. 74-584, 1974-2 C.B. 81 (holding that because an “artistic composition” was not a “letter, memorandum, or property similar to a letter or memorandum,” the 1969 Act did not apply with respect to an artistic composition donated between July 26 and December 31, 1969, and so was deductible at fair market value); see also H.R.Rep. No. 91-413, reprinted in 1969 U.S.Code Cong. & Admin.News 1800; S.Rep. No. 91-552, reprinted in 1969 U.S. Code Cong. & Admin.News 2027, 2233-34.
Plaintiff has conceded that the UA corporate records constitute a letter or memorandum or similar property described in I.R.C. § 1221(3), and that no deduction is allowable for the donation of those documents.
LIBRARY PROPERTY
The deduction claimed for the Library Property, $10,045,480, is the major part of plaintiffs total claim. Defendant challenges this claim on the ground that plaintiff has not shown entitlement to any deduction for the Library Property. In addition, defendant challenges plaintiffs valuation methodology. Although the volume of tangible property given to the University vastly exceeds that given to the Library, and the time expended by UA in negotiations with the Library was a minor part of the total effort UA expended on its charitable contributions, it is appropriate to resolve the legal issues involved in the Library Property before addressing the valuation issues in the University Property.
The gift to the Library is unique in many respects. The physical property involved was limited to the preprint material of certain motion pictures described in schedules. For the most part, the Library Property was original negatives on nitrate-base plastic, to which was bonded a motion picture image and sound track by a photosensitive emulsion.
The Library in 1969, got only the legal title and a right to take possession in the future, with additional rights and obligations to take effect after delivery. Plaintiff emphasizes that UA made a gift of the physical property only, and retained all other rights associated with such property, including the rights of commercial exploitation and reproduction, and other intangible rights. In 1969, the Library was unable to assume immediate possession of the tangible property conveyed, and did not acquire physical control until the property was de*468livered during the period February 10, 1970, through June 7, 1973.
The issue is whether UA's donation of this tangible property qualifies for an income tax deduction under statutory and regulatory standards.
The sine qua non of a charitable contribution is a transfer of money or property without adequate consideration. At a minimum, UA must demonstrate that it purposely contributed property in excess of the value of any benefit it received in return. United States v. American Bar Endowment, 477 U.S. 105, 118, 106 S.Ct. 2426, 2434, 91 L.Ed.2d 89 (1985). Where the benefits clearly are unequal, a deduction may be in order for the excess of the gift over the market value of the benefit received in return. The I.R.S. has established a two-part test for determining when a deduction is permissible where a donor receives a benefit in return for a contribution. First, the contribution is deductible only if; and to the extent, it exceeds the market value of the benefit received. Second, the excess must be contributed with the intention of making a gift. Rev.Rul. 67-246, 1967-2 C.B. 104, 105. American Bar Endowment, 477 U.S. at 117, 106 S.Ct. at 2433-2434.
I.R.C. § 170(a) requires that the contribution to the Library be made exclusively for public purposes. A contribution made to a charity is not made exclusively for public purposes if the donor receives, or anticipates receiving, a substantial benefit in return. Singer Co. v. United States, 196 Ct.Cl. 90, 449 F.2d 413, 423 (1971); United States v. Transamerica Corp., 392 F.2d 522, 524 (9th Cir.1968). A substantial benefit is one that is greater than the benefit that inures to the general public from the transfer. Benefits that inure to the general public from a charitable contribution are incidental to the contribution, and the donor, as a member of the general public, may receive such incidental benefits without jeopardizing eligibility for the deduction. Where the donor in fact receives, or expects to receive, benefits that exceed the incidental benefits flowing to the general public, a quid pro quo for the transfer may exist that would defeat any claim for a charitable deduction. Ottawa Silica Co. v. United States, 699 F.2d at 1132; Singer Co. v. United States, 449 F.2d at 423. Accordingly, the benefits realized by the parties from the contribution of UA’s preprint materials must be examined.
The benefits the parties respectively realized, and the donative intent of UA are illuminated by examination of the sequence of events in UA’s consideration and decision to make charitable contributions in 1969. The decision to make a donation to the Library was an afterthought in the negotiations with the University, which had been under way since February 1968. UA’s gifts to charity originated from a request from the University for a donation of the personal papers of Arthur Krim, UA’s President. Negotiations and internal discussions caused the gift to grow to include UA’s corporate records, still photographs, still negatives, pressbooks, scripts, and other promotional materials. UA in 1969 offered to include the 16mm positives and original 35 negatives for its movie and television titles. In addition to the film property, the documentary materials alone involved a huge volume that consisted of literally millions of papers and required 4,000 cubic feet of storage space. The volume of property involved in the contributions was such that UA could not physically examine and appraise it prior to execution of the November 1969 documents.
When the University learned that the original 35mm negatives for the movie titles all were on nitrate film, it had to decline the offer because it had neither the facilities nor resources to store such material. At about that time, UA learned that the Tax Reform Act of 1969 scheduled restrictions on charitable contributions to take effect as of January 1, 1970. UA’s need for a donee that would be able to accept a gift of the film negatives was urgent. In its search for an eligible charitable donee, UA recalled AFI’s previous solicitation to all motion picture companies for nitrate film materials, UA contacted the AFI and was referred to the Library. UA’s first meeting with Library personnel, *469to express an interest in giving to the Library the nitrate negatives, did not occur until September 1969.
After UA determined that the documentary materials could be given to the University and that the nitrate film materials could be given to the Library, UA directed its personnel to make every effort possible to complete the conveyances before year-end. The project was given the highest priority. In its haste to complete the project, formal documents were executed before UA knew whether the materials listed on the schedules actually existed, and in what condition, and before either the Library or the University were in a position to accept physical delivery of the bulk of the property.
UA’s decision to make the 1969 contributions was in sharp contrast with its previous dealings with AFI and Library requests. UA had not responded to the 1968 AFI letter that solicited donations of nitrate film. Prior to its conveyances to the University and to the Library, UA had never donated film to any public, charitable, or educational institution. On May 20, 1968, at the suggestion of AFI, the Library had written UA and requested a donation of a safety stock preservation master of a movie that was on its special rescue list. UA declined to make a gift. At that time, UA would only agree to lend the original negative to the AFI. The latter then could make for the Library the requested safety preservation master at its own expense, and then return the negative to UA.
Nitrate-base film in the Library Property is highly flammable, potentially explosive, and, with the passage of time, decomposes. Ultimately, nitrate-base film self-destructs and ceases to exist.
In keeping with industry practice, after 1951 UA had the motion pictures recorded in its original nitrate negatives copied onto acetate-base safety stock film. By November 1969 UA possessed, or believed it possessed, one or more safety film duplicate negatives for each of the motion pictures involved in the Library Property. In addition, for movies UA expected to exploit commercially, it had fine-grain master positives, from which replacement duplicate negatives could be made. Because of the availability of these articles, recourse to any of UA’s original nitrate negatives was rare. Such use occurred, in the aggregate, approximately ten or twelve times per year.
During the period UA was acquiring the motion picture nitrate negatives, there was no concept in the industry that such film had value as an historical artifact or for archival or scholarly use. The negatives’ value and utility to UA was solely for commercial exploitation.
The UA officials responsible for the conveyances to the Library and the University would not have authorized any gift that in any way would hamper UA’s commercial operations. UA agreed to convey the physical property to the Library and to the University because its responsible officials were convinced that (1) the company’s commercial interests would not be impaired, (2) the transfers would not cause UA to lose any money, (3) the transfers would not reduce the value of UA’s assets, and (4) UA would continue to have access to the property it might need in its commercial operations.
In November 1969, UA could not have sold in a commercial market only the physical property in its nitrate film. Nor could the physical property in its nitrate film be sold for scholarly, archival, or artifact uses. In 1969, only three archives had even collected nitrate film for an extended period of time: The Museum of Modern Art (MOMA), the Eastman House, and the Library of Congress. Only the Eastman House and the Library made any purchases of nitrate film. In 1969 there was no charitable institution, archive, or museum that had vault facilities adequate to store and preserve the entire collection of UA’s original nitrate negatives conveyed to the Library. Further, no such institution had available funding that would have permitted a purchase of UA’s nitrate negatives. In November 1969, the Library Property, as a component of UA’s commercial operations, had no fair market value.
In structure, the Library agreement was more than a simple instrument of gift. It *470involved reciprocal undertakings. The agreement authorized the Library to convert the image and sound recorded on nitrate-base film onto safety stock to make preservation preprint material and prints, which preservation preprint material and prints would become the physical property of the Library. UA’s reservation of commercial exploitation, reproduction, and other intangible rights applied to the use of the safety stock preprint material and preservation prints that the Library converted from the nitrate negatives. Upon physical delivery of the nitrate film, the Library was obliged to store, care for and maintain the property at its sole expense. UA reserved, and the University was given, the right of access on demand to have the Library process orders for positive safety prints to be made from either the nitrate negatives or from the Library’s preservation safety preprint materials. With UA’s prior written consent, the Library could trade a limited number of the components of the collection to other institutions in exchange for other motion picture materials, but only if the other archive agreed in writing to assume all the terms and conditions imposed on the Library.
The access provisions incorporated in the Library agreement were negotiated at UA’s request and were as broad as any ever extended by the Library. During trial, Library officials explained that UA’s right of access was the “price” the Library had to pay for the rights it obtained in the Library Property, and that the concessions made to UA during the negotiations were part of the “give and take” between the parties and a “trade-off” of rights and obligations.
Plaintiff points out that the Instrument of Gift transferred title to the original negatives, that title unconditionally and irrevocably was vested, and that the Library legally was free to destroy the negatives at such times as it saw fit. The Instrument of Gift does not by its terms commit the Library to make preservation copies. The Library representatives testified, however, that the Library had an obligation to maintain the nitrate negatives until preservation copies were made. Any unnecessary destruction of the nitrate film prior to copying would have been contrary to the Library and AFI film acquisition programs and would have exposed the Library to the contention that UA had been misled. In practice, the Library has followed its original intent and has made preservation copies as soon as possible.
Each party created an analogy to illustrate its argument as to the extent of the legal relationship that arose from the Library Agreement. Plaintiff likens UA’s relationship to the Library to a situation where the owner of an oil painting, to obtain a charitable contribution deduction, donates the picture to a museum. In such event, dominion and control are shifted to the donee, and the donee becomes liable for the costs of storage and insurance. Such costs, however, are “merely incidental to the transfer” and are not “substantial enough to serve as a quid pro quo ” for the transfer. Defendant argues that more was involved than merely shifting insurance and storage costs, and suggests that the Library transaction is more comparable to a situation where a taxpayer gives a charity a suit of clothes that is used only on rainy days. The gift is made with a proviso that the charity store the suit, keep it clean, and lend it to the donor, and to no one else, whenever it storms, and with the further condition that, in the event the suit wears out and the charity replaces it, the new garment also must be made available to the donor.
The original picture negatives have characteristics that limit their utility. In addition to the physical properties that cause them ultimately to self-destruct, the original picture negatives, in and of themselves, do not represent a usable end-product. The production of the original picture negative itself involves a complicated sequence of mechanical and chemical technologies and personnel organization. Thereafter, before commercial exploitation, scholarly research, or archival use can be realized, additional processing, equipment, distribution, and exhibition facilities require an extended sequence of activities from numerous sources. For investment tax credit, a *471master negative has been likened to a machine which stamps out patented products for sale. Walt Disney Productions v. United States, 549 F.2d 576, 578 (9th Cir. 1976). In connection with its argument that the Library as an owner had a separate right to make safety prints, plaintiff noted that “a negative is unusable other than to strike a positive print therefrom.”
During the trial, plaintiffs witnesses sometimes would compare the Library Property to the Gutenberg Bible or a Rembrandt painting. These characterizations imply that the nitrate picture negatives themselves were end-products available for use in scholarly research. Even the simplest examination of a picture negative, however, requires some form of viewing or projection equipment. Original picture negatives by themselves cannot be viewed and analyzed by a scholar independently, as can a Rembrandt. They cannot be read and analyzed through the direct observation of the researcher, as can the Gutenberg Bible. The original picture negatives as source material for historical and scholarly research are not end-objects with independent significance. Alone, they are not artifacts which through archival preservation embody the cultural heritage. Their function and characteristics are more similar to the canvas, brushes, and paints of the artist and the ink, type, binding, and paper of the Gutenberg Bible.
It is clear that legal title to and physical possession of a nitrate film negative is of little utility until it is used in combination with other tangible and intangible property. UA retained all rights to commercial use. The Library acquired only a privilege of using the original nitrate negatives to make, at its own expense, a safety stock preservation negative.
The unique characteristics of the nitrate picture negatives have caused problems for the Library. Officials responsible for Library administration consider the nitrate film to be a liability, and, to reduce storage costs and minimize hazards inherent in its retention, consistently have maintained the policy that the nitrate-base film stock is to be destroyed as soon as possible after copying. Adequate space and staff to maintain the nitrate film has been a chronic administrative problem and expense.
In 1969, UA was able to have a 35mm fine-grain master positive manufactured at a cost of about 9 cents per foot. The Library’s cost, in 1969, is estimated to range from 17 cents to 25 cents per foot to make a fine-grain master positive. The full cost in 1969 of going from an original nitrate negative to an exhibition print, which entails the additional manufacture of an intermediate duplicate negative, amounted to 35 cents per foot. The Library’s additional cost was caused by its procedures, which were far more elaborate and were designed to produce the highest quality product.
It eventually will cost the Library well over $1,000,000 to make preservation masters for UA’s original nitrate picture negatives. UA will pay nothing towards this cost, although it will have a continuing right to have copies of the Library’s preservation masters.
In 1969 UA’s nitrate negatives were stored in 26.5 vaults in New Jersey and an undetermined number of vaults in New York City. Defendant assumes that the prevailing annual rental rate was $540 per vault and contends that the storage expense for the New Jersey vaults alone was at least $14,300 per year. Plaintiff contends that only four of the vaults were subject to this charge and that UA’s total cost was only $2,160 per annum. Resolution of this conflict is unnecessary. Direct storage costs, indirect costs imposed by film processing laboratories which stored the nitrate film without separate charge in return for the film processing business, property insurance costs, and liability insurance costs are part of the cost to store and maintain nitrate picture film. These costs clearly are substantial.
Library Appraisal
The Library’s ad hoc Evaluation Committee, on November 24, 1969, placed a value of $8,489,070 for the Library Property. At UA’s request this amount was reconsidered, and on April 8, 1970, the Evaluation Committee increased the value of the Li*472brary Property to $9,282,415. These initial valuations were made in the absence of a physical examination of the original negatives involved, and were based on assumed total footages in each category. Later the footages involved in the contribution were determined with a greater degree of accuracy and the parties have stipulated that the Library evaluations, applying the Library’s method and conclusions to the more accurate footages, is $8,394,338.
Neither party accepts the Library’s evaluation. Plaintiff, however, argues that the Library’s appraisal must serve as a floor in determining the value of the property donated to the Library. Defendant contends the Library’s evaluation literally was a figure picked out of the air, and that it should be given no weight whatever.
Plaintiff contends that the Library appraisal is an admission by the United States, citing Fed.R.Evid. 801(d)(2)(D) and Mauldin v. Commissioner, 60 T.C. 749 (1973). (Library’s appraisal was not a “casual statement by an unauthorized Government official” but was a “formal appraisal made by a duly authorized committee” that “may be considered as an admission on behalf of the Government and may be taken into account in making our Findings.” Mauldin, 60 T.C. at 762.) In Mauldin, the court reached its own independent conclusion as to the value of the property there involved on the basis of all of the evidence and assigned a higher value than that of the Library’s Evaluation Committee.
Fed.R.Evid. 801(d)(2)(D) excludes from the category of hearsay an admission by a party opponent that is a statement made by an agent or servant concerning a matter within the scope of the agency and made during the existence of the relationship. The definition in the Rule goes to the admissibility of the statement as substantive evidence. It reflects the theory that admissibility of the statement in evidence is a result of the adversary system rather than satisfaction of the conditions of the hearsay rule. No guaranty of trustworthiness is required in the case of an admission. Fed.R.Evid. 801, advisory committee note. In this case, the question of admissibility has no significance; the Library personnel involved in the appraisals testified at length and were cross-examined with vigor. Fed.R.Evid. 806 makes it clear that a statement defined in Rule 801(d)(2)(D) opens the declarant to attacks on his credibility.
The appraisal made by the Library Evaluation Committee was pursuant to an internal regulation promulgated by the Librarian of Congress, who is an officer of the United States, in charge of an agency of the United States. 2 U.S.C. § 136 (1982). The appraisal was within the scope of the authority granted to the Librarian by Congress. It may be taken into account and it is entitled to consideration on its merits in this case. No statute or decision, however, makes an appraisal of the fair market value of a charitable contribution by the Librarian of Congress legally binding on the I.R.S. or the Department of Justice in the discharge of their executive responsibilities, or on the Tax Court or on this Court in decisions that apply to the provisions of I.R.C. § 170.
The defendant in this tax refund case is the United States. There is only one United States for purposes of the Tucker Act. 28 U.S.C. § 1491(a)(1) (1982). The Federal Government, however, is composed of agencies that exercise various responsibilities as authorized by Congress. Contrary to plaintiff’s contention, the Librarian of Congress is not an agent of the Executive Branch. As an officer of the United States, in the administration of the Library of Congress, the Librarian performs functions which may be classified as executive, functions which may be classified in legislative, and even some functions comparable to those of a judicial officer. See Eltra Corp. v. Ringer, 579 F.2d 294, 301 (4th Cir.1978). The adoption by the Librarian of the Evaluation Committee’s recommended appraisal is not a determination that would preclude other administrative agencies from reaching different values or, in the exercise of those agencies’ separate responsibilities, from challenging the Evaluation Committee’s methodology.
*473Congress, in I.R.C. § 170, has authorized deductions to encourage contributions to Governmental and charitable agencies. The Librarian has promulgated rules to facilitate acquisitions of gifts and other contributions by the Library. Congress, however, has made the I.R.S. responsible for the collection of taxes and for determinations of fair market value as that term is used in the Treasury Regulations. 26 U.S. C. § 170(a) (1982), 26 C.F.R. § 1.170-l(c)(l) (1987). Congress has authorized the Attorney General to represent the I.R.S. in contests with taxpayers.
The Commissioner and the Librarian recognize there is a tension between their respective responsibilities on evaluations of materials contributed to charities. On October 17, 1966, the Commissioner and representatives of the I.R.S. met with the Librarian and Library representatives concerned with valuations pursuant to LOC Reg. 315. In this meeting, the Commissioner explained that competition between institutions for gifts of art, manuscripts, business archives, etc., had accelerated with the growing recognition that such gifts can have a value in the donation sense. The I.R.S. explained it had developed procedures which generally provided that institutions receiving donations do not evaluate them for tax deduction purposes; the donor, instead, was advised to get an outside appraisal. The outside appraisal helped to avoid the problem of competition between institutions for gifts. The Commissioner explained that it was difficult for the I.R.S. to ask other institutions not to appraise if a Government agency does appraise, and pointed to the difficult situation that confronted the I.R.S. if it discouraged all other institutions from giving evaluations and they come back with the statement that the Library of Congress makes evaluations and is in competition with them.
The Librarian, during the meeting, emphasized that the Library staff made a constant effort to be objective in appraisals, that the appraisals were only advisory and a guideline, that the Library did not attempt to appraise in advance of a gift, and that no element of competition was involved in a Library appraisal. The product of this meeting essentially was an exchange of views. The Commissioner was unable to convince the Librarian that the appropriate procedure for valuations was one in which only outside appraisals were obtained by donors. The Library continued to appraise materials for donors pursuant to LOC Reg. 315.
The Library’s evaluation of the Library Property is flawed in several respects. The Library apparently made its appraisal in advance of or concurrently with the gift. UA signed the Instrument of Gift on November 22, 1969, and the Librarian accepted on November 24, 1969. The Evaluation Committee met on November 12, 1969, and its report is dated November 24, 1969.
The valuation was made on the basis of descriptions on seven schedules. It was made without an examination of the property involved.
The appraisal does not purport to estimate the fair market value of the nitrate picture negatives. The Evaluation Committee believed there was no documented market that could give relative prices of materials analogous to original film negatives. It proceeded on the basis of a constructive price for acquisition of the next most desirable form of the film, an arehivally acceptable positive print.
The evaluation attempted to quantify, in terms of dollars, such characteristics as the film’s place in cinema history, its possible contribution to sociological and other related research, and its rarity. Values placed on these characteristics inherently are subjective and arbitrary.
The Library evaluation was based upon a variation of the cost method of appraisal. The Evaluation Committee made an estimate of the replacement cost of the original negatives, i.e., the cost of manufacturing fine-grain preservation master positive prints. This cost was estimated at 35 cents per foot, which was increased to 50 cents, per foot on the theory that a negative would be worth more than a print. An additional premium was added on the basis of rarity, historical significance, and artis*474tic quality, to produce calculations in values from 50 cents per foot to $1 per foot. These values were later increased by an additional 10 percent on the basis of completeness in some of the schedules. These additions to the actual costs to make a fine-grain preservation master were completely subjective and arbitrary.
It is clear that the Library evaluation did not appraise the fair market value of the property which UA transferred. The Library’s appraisal actually was an estimation of the worth to the Library of its permanent preservation copies. In this case, the deduction under I.R.C. § 170 is concerned with the fair market value of the nitrate negatives, not with the Evaluation Committee’s concept of the value of the Library’s preservation masters.
Date of Conveyance
Defendant argues that UA’s donation of the Library Property was not made in 1969, the tax year in suit, and in support contends delivery to the Library was conditioned on the availability of suitable storage facilities. Defendant misconstrues paragraph 4 of the Library Agreement.
The numbered paragraphs of the Library Agreement are preceded by the clause: “Use of said materials shall be subject to the conditions hereinafter enumerated:” The Library could not “use” the property until it was physically transferred. Paragraph 4 provides a time-frame for such transfer.
Paragraph 4 states the property shall be physically transferred from UA’s facilities as suitable space becomes available. It specifically provides that, until transferred to the Library facilities, the Library shall, nevertheless, be deemed to be the owner of the property, and that UA shall be deemed to be a gratuitous bailee. The provisions in paragraph 4 that permit transfer of property over a period of time were specifically requested by the Library negotiators.
The donation to the Library was not conditioned on the ability of the Library to obtain storage facilities suitable to UA. The term “gratuitous bailee” was specifically selected by counsel. It reflects the concept that title would shift to the Library in 1969, and the gift would be completed, at that time, with physical delivery to be delayed pending availability of storage facilities. On November 24,1969, on the Librarian’s execution of the Instrument of Gift, the Library became the owner of the property, subject to the bailment.
Conclusion
The tangible property involved in UA’s contribution to the Library was a strip of plastic and a photosensitive emulsion that contained the image and sound of a motion picture. The plastic strip and the chemicals in the emulsion are of minimal value. The value and utility of the nitrate negatives are in the intangible rights to the motion picture, not in the physical property of the gift.
UA reserved all of the intangible rights, “including, but not limited to, the rights of commercial exploitation.” Nothing that had a commercial value in the motion picture business was included in the gift. The gift to the Library was not made until UA’s management was convinced that it did not hamper UA’s ongoing operations, did not cause it to lose money, and did not reduce the value of its assets.
I.R.C. § 170(a) provides that a charitable contribution deduction may be allowed only if verified under regulations prescribed by the Secretary. The regulations provide that, when a contribution is made in property other than money, the amount of the deduction is the fair market value of the property at the time of the contribution. The term “fair market value” has significance only in the context of commercial activities. It is oriented to commercial markets. If the contribution consists of tangible property that has no recognized value in commercial markets, there can be no deduction under I.R.C. § 170 for its contribution. In November 1969, there was no commercial market in the motion picture business for the physical property, stripped of all intangible rights in the motion picture, in nitrate-stock motion picture negatives.
The term “fair market value” in the regulations does not apply to property *475in which the values cannot be identified with actual commercial market activity. Values which are not amenable to separate measurement in a commercial market, such as values for archival and historical uses and scholarly research, do not have a “fair market value” for the purpose of a charitable deduction. There was no market in November 1969 in which UA could have sold its nitrate picture negatives, stripped of all intangible rights in the motion picture, for scholarly or archival uses or as historical artifacts. Where no one is willing or able to pay anything for property, its fair market value is zero. Even though a number of archives, museums, or libraries may have prized the nitrate negatives as historical artifacts and for archival and scholarly uses, the Library Property had no fair market, value in November 1969.
UA cites case law to the effect that, where unique property is involved, the lack of a market does not bar a determination of value, and a fair market value can be established even in the absence of any comparable marketplace sales. Paul W. Adams, 50 T.C.M. (CCH) 48 (1985) (original prototype for Norden Bombsight World War II aviation equipment, donated to National Air and Space Museum—estimated cost method, related to actual market demand for collector’s items, used to value); Nord W. Krauskopf, 48 T.C.M. (CCH) 620 (1984) (reconditioned, record-holding 1969 Dodge Charger Daytona race car donated to National Motor Sports Hall of Fame—condition after restoration, related to actual transactions in market for collector and antique cars, major element in determination of value). Valuations may be made for unique property or when there is no market that contains comparable sales. The cases cited by UA, however, demonstrate that actual commercial market activity must be present with respect to the property related to the donation so as to permit a reasonable estimate of value. The Norden Bombsight prototype and the racing car were separate and distinct items of property, and were complete objects in themselves. Factually, the characteristics of these items are not analogous to the characteristics of the nitrate picture negatives transferred to the Library.
Of the archives, museums, universities, and libraries that possibly could be active in a market for preprint materials, only the Library and Eastman House purchased nitrate film. In November 1969, neither of these organizations had the facilities to store or the money to purchase the volume of nitrate film that was in UA’s inventories.
UA’s management made the contribution to the Library (1) with the intention of realizing a tax benefit for a charitable contribution, (2) with the intention that nothing be given that would impact on UA’s commercial exploitation of motion pictures, and (3) with the intention of retaining for the future the right of access to the negatives and to the Library’s preservation copies. There was no intention to transfer to the Library any physical property that had a value to UA in its commercial operations.
In the transfer of the Library property, the benefit received by the Library was the right to make preservation copies of the nitrate negatives. This benefit brought with it substantial expense to the Library for care and maintenance, and in the costs of copying. The benefits received by UA were (1) continued access for its commercial interests to both the physical property in the nitrate negatives given and access to the Library’s preservation copies, (2) relief from the costs and potential liability for the storage, maintenance, and care of nitrate negatives. Benefits to UA were substantial, and were sufficient to provide UA with a quid pro quo for the transfer. These benefits to UA, accordingly, effectively destroyed the charitable nature of the transfer.
UNIVERSITY PROPERTY
UA’s gift of the University Property was initiated and was well underway before the formal documents were completed. Negotiations with the University started in February 1968 and deliveries commenced on August 27,1968. By the time the University Regents formally accepted the Deeds of Gift, on December 12, 1969, the University *476had received eleven shipments that contained more than 864 cartons of materials.
The November 6, 1969, Deed of Gift conveyed title to materials described in 25 specified schedules. The November 26, 1969, Deed of Gift added materials described in three specified schedules. The schedules that were attached to the Deeds of Gift for the most part were not prepared by UA for the purposes of the conveyances. Such schedules had been prepared by UA, or a predecessor in title, in the regular course of UA’s business. The parties stipulate that all of the schedules respecting films basically were accurate except for Schedules C-5 and G-6 (Warner Brothers short subjects), and there inaccuracy primarily was attributable to changes in the names of short subjects after Warner Brothers had prepared its original inventory records. With respect to materials that were listed but not delivered, or delivered but not listed, UA and the University intended the Deeds of Gift would cover all materials that actually were delivered by UA.
The physical quantities involved in the various categories of materials conveyed to the University are exceedingly large. At the time the conveyances were executed, neither UA nor the University was aware of the exact quantities involved, and no item-by-item appraisal had been made, nor, in the time available, could be made.
The University Property consisted of materials from United Artists; Ziv Television Programs, Inc. (Ziv-TV); Associated Artists Productions Corp., consisting of Warner Brothers Film Library (WB), the Monogram Film Library, and the Popeye Cartoon Film Library; and RKO Radio Pictures, Inc., consisting of (1) television distribution rights in the RKO Library in the United States (excluding certain named markets), and (2) positive prints of the films in the RKO Library. The University Property, organized by source company, according to the stipulation of the parties which was based on the schedules attached to the Deeds of Gift and the University’s subsequent inventory, is set forth below.
United Artists
Schedule A-l:
Corporate and financial records of UA and Eagle Lion Classics, Inc., and legal files of the law firm of O’Brien, Driscoll & Rafferty, relating to its representation of UA from 1919-1950. The materials included records dealing with the financing, construction, copyright, production, distribution, and exhibition of 582 UA films and 164 Eagle Lion films; substantially complete financial records of all domestic and foreign gross and net receipts for individual films, and for particular years of UA operation, a set of UA financial journals and ledgers and consolidated balance sheets for the period 1919-1951. Approximately 9 percent of the materials consist of the records of the Eagle Lion company, and 36 percent consist of the legal files of O’Brien, Dris-coll & Rafferty. The 164 Eagle Lion films are approximately 22 percent of the total 746 films involved.
Schedule A-2(A):
Linen-backed still photographic prints relating to UA films — 87,081.
Linen-backed still photographic prints of UA stars (unscheduled) — 4,695.
Schedule A-2(B) and A-8:
Pressbooks of UA, Eagle Lion and Film Classics films — 547.
Schedule A-3:
Still negatives relating to UA films— 104,677; still photographic prints — 434; plus still negatives for UA and other feature films (unscheduled) — 12,249.
Schedule A-4:
Music cue sheets relating to UA feature films — 457.
Schedule A-6:
“Algiers” 16mm acetate print (black and white).
Schedule A-7:
“Algiers” production file.
(Unscheduled):
36 scripts and related materials for 33 feature film releases.
*477
Ziv-TV
Schedule B-l:
Original 35mm acetate negatives of 2,229 Ziv television series episodes.
Schedule B-2:
Positive prints on 16mm acetate film of 2,229 Ziv television series episodes.
Schedule B-3:
Scripts for approximately 3,300 Ziv television episodes, from 67 different series. Also scripts from unproduced episodes, outlines, and dialogues, and 23 boxes, containing approximately 300 separate files of contracts and production files for Ziv television episodes.
Schedule B-4:
Still photograph prints relating to Ziv television episodes — 48,218.
Still negatives relating to Ziv television episodes — 21,244.
Warner Brothers Film Library
Schedule C-2:
Exhibition prints on 16mm acetate film of 54 WB silent feature films.
Schedule C — 4:
Exhibition prints on 16mm acetate film of 806 WB sound feature films — 782 titles in black and white and 24 titles in color.
Schedule C-6:
Exhibition prints on 16mm acetate film of 1,507 WB short subjects — 603,598 feet in black and white and 5,086 feet in color.
Schedule C-8:
Exhibition prints on 16mm acetate film of 337 WB cartoons — 34 titles in black and white and 303 titles in color.
Schedule C-13:. Written materials relating to WB:
(i)Script material relating to 803 WB sound feature films, consisting of 194 novels, 168 plays, 1 playscript, 127 short stories, 63 comments, 51 plot summaries, 40 research items, 1 story idea, 155 story outlines, 612 treatments, 4 revised treatments, 651 screenplays, 653 temporary scripts, 301 revised temporary scripts, 781 final scripts, 294 revised final scripts, 32 reader synopses, and 15 post-production items.
(ii) 784 dialogues, 511 feature film title lists, 415 trailer title lists and 205 spotting sheets relating to 792 WB sound feature films.
(iii) 799 contracts as well as copyright records and related materials relating to 1,308 WB sound and silent feature films.
(iv) Script material relating to 327 WB short subjects, containing on average more than two items per title.
(v) 590 dialogues and 478 title lists relating to 611 WB short subjects, as included in University series 8.3.
(viii) Music licenses for features, short subjects, and cartoons in the Warner Brothers Library.
(ix) More than 800 folders of original, signed personal service contracts and related materials relating to WB short subjects.
Schedule C-14:
Still negatives re WB feature films — 18,-038.
Still negatives re WB cartoons (unscheduled) — 161.
Schedule C-15:
Publicity material re 271 WB silent feature films, including pressbooks for 136 films and miscellaneous material for 198 films.
Schedule C — 16:
Pressbooks for WB sound feature films —792.
Schedule C-19:
Still negatives of Humphrey Bogart— 895.
Schedule C-20:
Still negatives of John Wayne — 16. Schedule C — 21:
Still negatives of WB stars — 7,742. Schedule C-22:
Still negatives of WB stars — 41,611.
Popeye Cartoon Film Library
Schedule C-10:
*478Exhibition prints on 16mm acetate film of 229 Popeye cartoons — 29,076 feet in black and white and 28,444 feet in color. Schedule C-13(vii):
460 dialogues relating to WB and Popeye cartoons.
Monogram Film Library
Schedule C-12:
Exhibition prints on 16mm acetate film of 187 Monogram sound features — 429,-660 feet in black and white.
Schedule C-13(vi):
Dialogues relating to 149 Monogram feature films.
Schedule C-17:
Pressbooks re Monogram feature films— 75.
Schedule C-18:
Still negatives re Monogram feature films — 6,321.
RKO Library
Schedule D-l:
Exhibition prints on 16mm acetate film of 707 RKO sound feature films, with use limited to television broadcasting for educational purposes over the facilities of the University’s television station, WHA Channel 21, and to study on the University’s premises by researchers engaged in serious research.
Conveyance of the materials to the University did not deprive UA of any item useful in its commercial business. UA retained duplicates, microfilm copies, or the ability to duplicate all items. UA did not convey the original UA corporate minutes included in Schedule A-l; a microfilm was given to the University. UA retained (a) a microfilm copy of UA, Warner Brothers, and Monogram pressbooks (Schedules A-2(B), A-8, C-15, C-16, C-17), (b) a microfilm copy of the Warner Brothers production file (Schedule C-13), (c) a duplicate copy (if one existed) of certain Warner Brothers dialogue continuities and synopses (Schedule C-13), and (d) a duplicate copy (if one existed) of television series scripts (Schedule B-3).
As with the Library Property, UA’s management intended and believed that the conveyance of the University Property would not result in any material diminution of the value of the company’s assets or adversely affect UA’s contemplated future commercial exploitation of the motion pictures involved. Following the physical delivery of the University Property, UA continued to exploit commercially the motion pictures to which the property related, using retained preprinted material and retained or new prints for the same movies. UA’s subsequent parent (Metro-Goldwyn-Mayer Film Company) continued to exploit the commercial rights to the motion pictures.
The value of a charitable contribution made in property other than money is determined by its fair market value at the time of the contribution. The lack of value to the donor, or the value to the donee, is not determinative as to the deduction allowable. These values, however, are factors to be considered in the overall assessment when fair market values are illusive or inconclusive.
Plaintiff’s assessment of the University Property accords additional values based on completeness. The magnitude and diversity of the University Property makes it susceptible to division into smaller components, based on time intervals or subject matters. Dr. Fielding doubled the value of the Eagle Lion files over a “comparable” on the ground that they represented a full corporate picture of a motion picture company during a short three-year period in which it released 164 films. With respect to the 139,994 still prints (positive photographs) and the 212,954 still negatives included in the University Property, plaintiff supports a $1,450,893 valuation by its expert’s contention that the collection of still photographs is “one of the most complete and comprehensive collections known to exist,” and that its overall scope gives the collection “an integrity” matched by very few other corporate collections of motion picture studios. Similar arguments are made as to completeness of the WB sound feature pressbooks, scripts, and pro*479duction files. Plaintiff argues that a premium for completeness is justified because Dr. Fielding was not merely evaluating a large quantity, he was valuing a complete set.
A premium for completeness in the University Property fails to recognize the circumstances under which most of the materials were accumulated and the reasons they were stored and retained. Although the vastness of the body of material conceivably is a lode from which a number of collections integrated as to subject matter could be selected, such organization had not been done in November 1969, nor when plaintiffs experts made their appraisals.
All of the donated items constituted items that had been used in UA’s trade or business, or the trade or business of a predecessor in title. The preprint materials, promotional materials, legal files, scripts, music cue sheets, and other production records all were tools used to produce or promote exhibition prints. Once the exhibition print was completed, released, and exploitation exhausted, these working files were sent to storage. Further use was contingent on uncertain future needs. Storage conditions were those suitable for materials in which for commercial purposes little present or future value was perceived. In short, the University Property was made up of the residue that is the natural accumulation of items for which retention no longer has a business justification.
The Warner Brothers Library files were acquired in 1956. At that time they contained the preprint materials, production and legal files, scripts, pressbooks, stills, still negatives, and other nonfilm materials with respect to films that then remained in the possession of Warner Brothers. Between its acquisition in 1956 and the donation in 1969, materials in the Warner Brothers Film Library were subject to such transfer and cannibalization as the conduct of UA’s business found convenient. Inventory forms used in record keeping were subject to change. At the time of the donation, the inventory forms were inaccurate and incomplete. The inventories in the schedules attached to the deeds of gift did not accord with the property the University in fact received, and these deficiencies remained to be corrected after delivery was made to the University.
The University Property involved materials subject to haphazard storage from 1913 through 1969 by the variety of separate companies that UA acquired over the years. Different filing systems were used and the filing systems were subject to change over the course of years. As a result, in 1969, the schedules selected for the deeds of gift did not represent an itemization of materials that were preserved because they represented complete coverage of the subjects involved.
Any premium for completeness must be rejected. The University Property did not represent a collection of selected materials deliberately acquired and organized for the purpose of completeness, or for their historical value, importance as an artifact, or for scholarly research.
Plaintiff also contends that additional amounts should be allowed on the basis of “synergistic value.” This premium for “synergistic value” is different and separate from a premium for a complete collection. In his appraisal of the 16mm exhibition prints of Warner Brothers sound features, David Shephard, plaintiff’s expert did not add a value for completeness. He applied a value-added factor to give effect to an alleged extra value that accrued to each Warner sound feature at Wisconsin due to the availability of related documentation. This “synergistic value” was derived from the concept that the University possessed a unique resource in the availability of Warner Brothers sound films side by side with related treatments such as screenplay drafts, finished scripts, contracts, stills, and other documents. The value-added factors (2.21594 for classics and 1.33 for lessers) were derived from comparisons of catalogue prices of five producers of 16mm educational films. Two producers sold only a package of materials, one of which was a print; the three other producers only sold separate prints. The higher price for the package was con*480sidered to be measure of the synergistic value of the non-film materials in the package.
On the facts, application of a value-added factor for the WB sound films in the University Property is not reasonable. Any items in the University Property that might relate to the WB sound films were not donated or assembled as a package designed to provide an integrated study vehicle. Any such relationship is fortuitous and at best haphazard. Application of a value-added factor to the sound films for the related material, and at the same time to independently value the related items with a premium for completeness, results in an impermissible massaging of the numbers.
Ziv Original 35mm Negatives
Defendant concedes that there was a gift to the University within the meaning of I.R.C. § 170 as to all of the University Property, except the original 35mm acetate negatives of the 2,229 television episodes produced by Ziv-TV and listed in Schedule B-l. Defendant’s challenge to the gift character of these negatives is based upon UA’s retention of all rights for commercial exploitation of the films, together with the retained right of access to the negatives for printing purposes. Retention of these rights, when considered with the University’s obligation to store and maintain with appropriate temperature and humidity controls, and UA’s conclusion that their conveyance would not reduce the value of its assets or hamper future operations, is the basis for defendant’s conclusion there was no gift, but merely an agreement respecting use and disposition of the negatives.
The retention of rights for commercial exploitation and for access to the 16mm exhibition prints, scripts, still photographs, and the other items of the University Property were identical to the reservation applicable to the original 35mm negatives. As to the other items, however, defendant concedes that the reservations qualify as minimal restrictions within the standards of Lawrence v. United States, 75-1 U.S.T.C. (CCH) 119230 (1974). The television 35mm negatives have no characteristics that would distinguish them from other items of University Property in the application of the “minimal restrictions” standard.
The Ziv-TV original 35mm negatives, moreover, have qualities that enforce their eligibility as a gift. Unlike the nitrate negatives given to the Library, the television negatives were on acetate film, would not self-destruct over time, and did not require explosion-proof storage facilities. Properly stored, the physical film and the motion picture image thereon would last indefinitely. The University obtained materials that contributed to its establishment as a national archive in the entertainment field. For the foregoing reasons, defendant’s contention that there was no gift within the meaning of I.R.S. § 170 as to the Ziv original 35mm negatives is rejected. Plaintiff’s expert valued the Ziv 35mm negatives at $3,036,915. Defendant did not present an appraisal of these items. The parties agree that depreciation recapture on the Ziv 35mm negatives would be $505,603.
Date of Completion
When UA discovered in late 1969 and in 1970 that it did not possess suitable used copies for all of the 16mm exhibition prints of its movies that were listed in the schedules, it had new prints copied. Deliveries of the new prints were completed in 1970 and 1971. Defendant apparently concedes that the gift was completed in 1969 as to all other items of the University Property.
Deféndant contends, however, that the new copies of 16mm exhibition prints printed and shipped after 1969 were not part of the 1969 gift. Defendant views the making of copies as the manufacture of new property and argues that a taxpayer cannot be considered to have delivered a property, either constructively or actually, if the property did not even exist during the tax year. Defendant states that, in 1969, UA did not possess the actual property embodied in the new prints and that the gift must be claimed in the tax year in which the prints came into existence and the donation was actually made. Defendant also attacks, on both substantive and procedural grounds, plaintiff’s alternative contention *481that, under I.R.C. § 170(a)(2), it is entitled to a deduction for 16mm print footage actually delivered by March 15, 1970.
The parties have stipulated the items that were copied and shipped after December 31, 1969. There are no facts available, however, from which to determine which of the items were delivered by March 15, 1970, and which were delivered thereafter. Nor does the record specifically identify the titles for each of the 16mm prints that were copied after December 31, 1969. Defendant calculates that the fair market value of the 16mm prints that were delivered after 1969 was approximately $45,405.
Defendant’s objection ignores the facts. In the negotiations, and in the deeds of gift, UA and the University intended the gift to include 16mm exhibition prints of all of the movies in UA’s library (Schedules A-6, C-2, C-4, 0-6, C-8, C-10, and 0-12). In 1969 UA owned preprint material or prints for every motion picture included in the gift. All production had been completed years before 1969. The making of copies was not the manufacture of new prints that UA was not obligated to provide. The gift was completed, for purposes of I.R.C. § 170, on execution and acceptance of the Deeds of Gift. The instruments, by their terms, clearly and unmistakenly announce a present transfer of the materials that comprise the University Property, and were effective to give the University the rights to possession. Greer, supra.
The fact that the University, at the time the gift was completed, was unable to take possession in no way diminishes its right to possession, the transfer of title, or the completeness of the gift. UA held the materials that were shipped subsequently merely as a gratuitous bailee.
For purposes of determining eligibility for a charitable contribution deduction for the 16mm prints, the donation was completed in 1969 with the transfer of title of the 16mm prints to the University. The fact that UA had some on hand in print form and others only in preprint form during 1969 does not determine when the gift was completed. The controlling facts are that the product existed in 1969, that the gift was completed in 1969, and that in 1969 title had passed and UA was obligated to physically deliver prints as soon as the University wanted them. See Speelman v. Pascal, 10 N.Y.2d 313, 222 N.Y.S.2d 324, 178 N.E.2d 723 (1961).
VALUATION WITNESSES
Plaintiff’s evidence includes the reports and testimony of four experts in the motion picture field and the testimony of two experts on valuation generally. Defendant’s valuation evidence included the testimony of two experts, the report of one of these experts, and the testimony of two fact witnesses on the marketing of motion picture memorabilia.
Plaintiff’s motion picture experts had been associated with AFI or with UA. They were:
1. Dr. Raymond Fielding: Professor of Communication and Director of the School of Communication, University of Houston. His career includes Trustee, AFI; Trustee, University Film and Video Foundation; and principal organizer of the U.C.L.A. motion picture archive.
2. Robert Cushman: Career includes Photograph Curator and Coordinator of Photographic Services at Herrick Library of the Academy of Motion Picture Arts and Sciences, consultant to Directors Guild of America, research fellow at AFI.
3. David- Shephard: Career includes business experience in sale and rental of feature films and shorts with Contemporary Film and Brandon Films, and Vice President of Black Hawk Films, a distributor of vintage films to individual customers; academic experience on faculties of U.C. L.A. and U.S.C.; service as an archivist at AFI and Special Projects Officer for Directors Guild of America.
4. Erwin Ezzes: Formerly Chairman and CEO of United Artists Television, Inc.
Plaintiff’s experts on general valuation matters possessed well recognized qualifications. These experts were:
*4821. Roger J. Grabowski: National Director of Valuation Services, Price Waterhouse. He was recognized by the court as an expert on valuation procedures and evaluation of media and entertainment properties.
2. Patrick J. Rohan: Dean of St. John’s University School of Law. He was recognized by the court as an expert on valuation methodology, in condemnation procedures, and in the field of gifts and donative transfers.
Defendant’s experts each had long term associations with the I.R.S.:
1. Malcolm Willits: Business experience as a dealer in film memorabilia and partner in Collector’s Book Store, Inc., a retail store in Hollywood. He was retained by the I.R.S. to appraise all nonfilm materials in the University Property. Accepted as an expert appraiser in the field of motion picture memorabilia without voir dire.
2. Michael Weinberg: An experienced appraiser employed by the I.R.S. since 1976. He was recognized as an expert in the field of valuation methodology and in the valuation of motion picture film.
Defendant’s fact witnesses, in addition to the testimony of Malcolm Willits, were:
1. Edward Brandt: Dealer in motion picture memorabilia, operates Eddie Brandt’s Saturday Matinee, a small retail memorabilia store that has been active in North Hollywood, California, since 1968.
2. Jerry Ohlinger: Collector and since 1970 a dealer in motion picture memorabilia. President of Jerry Ohlinger’s Movie Materials Store, Inc., a small retail store in the Greenwich Village area of New York, New York, selling principally to collectors.
Each of defendant’s fact witnesses testified he had been engaged on a daily basis in- the process of buying and selling the same type of movie memorabilia that UA gave the University. Some materials, i.e., original still prints, scripts, and pressbooks, contained items that were identical to those in the University Property.
As is typical in litigation that involves battles by experts in analysis of complex matters, the information provided by the motion picture industry valuation witnesses of both parties was skewed to advance the objectives of their respective clients. Plaintiff’s expert witnesses resolved valuation issues so as to maximize the dollar value of the contribution; defendant’s witnesses, on the other hand, attempted to satisfy I.R.S. and Department of Justice interests to deny or at least minimize the allowable deduction. These recognized but seldom articulated characteristics repeatedly are made manifest in the record of this case.
Each party vigorously attacked the credibility of the opponent’s experts and their opinion analyses. Both have reasonable support for the challenges. As a result, although each of the valuation witnesses testified forthrightly and provided information and analysis well within the scope of discretionary bounds on valuation issues, their recommendations as to dollar values must be adjusted substantially to correct for pro-client bias.
Dr. Fielding initially was retained by UA to value all of the Library Property and all of the University Property. Information on market data was developed during the extended period the charitable contributions issue was in trial, however, that caused plaintiff to substitute and proffer appraisals of other experts as to the values of 16mm motion picture exhibition prints, still photograph positive prints, and still photograph negatives. These materials were deleted from Dr. Fielding’s appraisal report and his testimony was so limited.
Plaintiff proffered Dr. Fielding’s valuation for the following categories of University Property:
—Corporate and financial records and legal files (Schedule A-l)
—Pressbooks and promotional materials (Schedule A-2(B), A-8, C-15, C-16, C-17)
—UA music cue sheets (Schedule A-4)
—“Algiers” production file (Schedule A-7), Warner Brothers Library files *483(Schedule C-13), and Ziv-TV scripts (Schedule B-3)
—Ziv-TV original 35mm negatives and 16mm projection prints of television episodes (Schedules B-l and B-2).
Defendant points out that the valuation of the Ziv-TV 16mm prints was not an appraisal of fair market value by Dr. Fielding. Instead, the television prints were valued at one-half the fair market value that had been established by Mr. Shephard for Warner Brothers movie prints. Admittedly this procedure was done on instructions from plaintiff’s counsel.
Dr. Fielding used market information from catalogues of two retail dealers to appraise the script files of WB sound features, Larry Edmonds Bookshop (Los An-geles) and Cinemabilia Bookshop (New York, New York). Defendant criticizes the appraisal on the ground that Dr. Fielding “blindly relied on” asking prices rather than actual sales prices, and that he disregarded the fact that the WB script files contained drafts, treatments, and screenplays (of 3,302 scripts only 787 were final scripts) and were not comparable to the final scripts listed in the catalogues.
Defendant’s heaviest criticism is leveled at Dr. Fielding’s opinions, described as “the most fanciful,” on the value of nonscript materials in the WB files. These WB related records in the University Property consist primarily of story acquisition agreements, correspondence, and personal service contracts that came from WB’s story purchase department. They are preproduction records; they do not include any documents that relate to actual production of the motion pictures. The production files for the same WB motion pictures were donated to, and are located at, the University of Southern California (U.S.C.). The distribution records for the WB motion pictures were given to, and are located at, Princeton University. Research on production and distribution of old WB motion pictures must be done at U.S.C. and Princeton.
Dr. Fielding’s appraisal of the WB related records was an estimate projected from the purchase for $4,125 by the University of Iowa in 1966 of the Cohen Collection. The Cohen Collection consisted of a large group of materials that included: (1) pre-production records relating to story acquisitions and negotiations with talent for 27 Universal Studio motion pictures, (2) complete production files for each of these 27 motion pictures, (3) sets of scripts, final and draft, for each of the 27 motion pictures, (4) scripts for many additional motion pictures and television programs, plus additional story outlines and synopses, (5) still photographs, and (6) personal business correspondence. The contents of the Cohen Collection is listed in a 32-page inventory that is considered to be generally correct. It was prepared by the Iowa Library staff after Dr. Fielding left.
Dr. Fielding’s analysis for the value of records related to 1,308 script files for WB features was premised on the following: (a) the $4,125 purchase price of the Cohen Collection was allocable entirely to the production records for the 27 Universal Studio features, (b) the related records in each of the 1,308 script files for the WB features were comparable in quality and value to the content of each of the 27 production files in the Cohen Collection, and (c) since the 1,308 WB files were 48 times the 27 Cohen Collection files, the WB script-related files, adjusted for 1969 inflation over 1966, would be worth $218,976.
This analysis does not take into account, or assign any value to, materials in the Cohen Collection in addition to the 27 production files. More importantly, the related records in the WB files did not contain a counterpart to the 27 production files in the Cohen Collection. A research of that kind of information about the WB features could not be done at Madison, the researcher would have to go to U.S.C.
Plaintiff’s appraisal of the value of the still photograph prints and still negatives in the University Property was done by Robert Cushman. Defendant contends that Mr. Cushman demonstrated an “unbelievable lack of familiarity” with this property, *484and that “One can only wonder where in the world Mr. Cushman acquired his information” concerning the prevailing retail prices for still prints of a popular star. Mr. Cushman was instructed by plaintiffs attorneys not to consider any market transactions except sales in the retail market made to ultimate consumers. Mr. Cushman hypothesized a market in which UA still prints would be sold out of a retail store at a good location over a period of approximately three years. It is extremely doubtful that all of the 139,994 still prints in the University Property could be marketed at retail in three years.
Plaintiffs criticism of defendant’s valuation evidence is scathing. Plaintiff points out that Messrs. Brandt and Ohlinger were shopkeepers in the “lowest portion” of the 1969 market for stills, their wares were “junk stills,” and that all of defendant’s fact witnesses had great concern that they did not have “good legal title” to the stills, posters, scripts, and other material they acquired and resold. Plaintiff emphasizes that defendant never offered Messrs. Brandt and Ohlinger as expert witnesses, although defendant contends they have “specialized knowledge,” and that they were not recognized as qualified to render opinion evidence on values. Neither of these fact witnesses had ever examined any of the donated University Property.
Plaintiff requests that the report and testimony of defendant’s expert on nonfilm University Property, Malcolm Willits, be disregarded completely. First, it is alleged that Mr. Willits had a “predisposition to find low values” for the I.R.S. even before he examined the property, and that he has a “hostility” to charitable deductions that is documented and has caused other courts to refuse to follow his evaluations. Second, plaintiff contends Mr. Willits’ testimony reflects a “lack of candor” and was “demonstrably false” regarding an offering in 1971 of scripts to a number of universities. Plaintiff also points out that Mr. Willits gave incorrect or incomplete testimony regarding pornography offerings in his store, and he has specifically admitted he “in fact” is willing to find different fair market values on the same piece of property depending on the purpose of the appraisal — i.e., for insurance purposes or for tax benefits (ten times higher).
Defendant presented the testimony of Michael Weinberg, an appraiser employed by the I.R.S., to calculate the fair market value of the copies of 16mm exhibition prints included in the University Property. Mr. Weinberg’s testimony was based upon analysis of the report and deposition transcript of David H. Shephard, plaintiff’s expert, examination of the records of Dominant Pictures Corp. (Dominant), a UA subsidiary, and the transcripts of Stanley Stark, a UA employee at Dominant at deposition and trial. Mr. Shephard appraised the 16mm exhibition prints at $399,356; Mr. Weinberg appraised them at $145,323. Plaintiff contends that Mr. Weinberg’s appraisal “should be accorded no weight whatsoever.”
Plaintiff points out that Mr. Weinberg, in fact, did not actually perform an appraisal, but merely performed a mathematical analysis of a limited and flawed data base. Mr. Weinberg’s report was never reduced to coherent form and was not offered into evidence. Plaintiff further emphasizes that Mr. Weinberg has no personal experience in marketing motion picture prints, has no independent knowledge of the market, and did no independent investigation of the market. The Stark transactions on which Mr. Weinberg relied, according to plaintiff, included irregular and inconsistent price variations. Plaintiff points out that Mr. Stark was not authorized to set prices for film leases and that his primary function at Dominant was in accounting. Mr. Stark’s sale or lease of 16mm prints required less than one hour per day. The entire business involved in the Stark transactions had a gross income of less than $50,000 per year.
Valuation Categories
For valuation purposes, each party organized the University Property into categories that contained one or more of the schedules that had been attached to the Deeds of Gift. In their final presentations, neither provided a separate valuation for *485each schedule individually, and, in each, the categories of property were differently arranged. Plaintiff organized the appraised materials into eight categories, as follows:
(1) Corporate files and records (Schedule A-l).
(2) Still photographic prints and negatives (Schedules A-2(A), A-3, B-4, C-14, C-18, C-19, C-20, C-21, and C-22).
(3) Pressbooks and promotional materials (Schedules A-2(B), A-8, C-15, C-16, and C-17).
(4) UA music cue sheets (Schedule A-4).
(5) WB 16mm prints and “Algiers” 16mm print (Schedules A-6, C-2, C-4, C-6, C-8, C-10, and C-12).
(6) “Algiers” production file, WB Library files, and Ziv-TV scripts (Schedules A-l, C-13, and B-3).
(7) Ziv-TV original 35mm negatives and 16mm exhibition prints (Schedules B-l and B-2).
(8) Broadcast rights in Madison, Wisconsin, to 707 RKO sound feature films (Schedule D-l).
Defendant organized the appraised materials of the University Property into six categories, as follows:
(1) Ziv-TV original 35mm negatives (Schedule B-l).
(2) WB 16mm prints and “Algiers” 16mm print (Schedules A-6, C-2, C-4, C — 6, C — 8, C — 10, and C — 12).
(3) Ziv-TV 16mm exhibition prints (Schedule B-2).
(4) I.R.C. § 1221(3) property (Schedule A-l, A-2(A), A-2(B), A-3, A-4, and A-8).
(5) Nonfilm memorabilia:
(a) Still prints (Schedule A-2(A) and B-4).
(b) Still negatives (Schedules A-3, B-4, C — 14, C — 18, C — 19, C — 20, C — 21, and C— 22).
(c) Movie script materials and related records (Schedules A-l, B-3, and C-13).
(d) Television scripts and production files (Schedule B-3).
(e) Pressbooks (Schedule A-2(B), C-15, C-16, and C-17).
(f) Music cue sheets (Schedule A-4).
(g) Corporate records (Schedule A-l).
(6)Broadcast rights in Madison, Wisconsin, to 707 RKO sound feature films (Schedule D-l).
Defendant concluded that the fair market value of certain categories did not exceed the amount of depreciation recapture allowable to that property, and, for that reason, no deduction is allowable. On this basis, defendant would deny a deduction to the following:
(1) Ziv-TV 16mm exhibition prints.
(2) Ziv-TV still prints.
(3) Ziv-TV still negatives.
(4) Ziv-TV scripts.
(5) Ziv-TV production files.
The parties agree that UA’s corporate records and the legal files of O’Brien, Driscoll & Rafferty constitute property described in I.R.C. § 1221(3), and that no deduction for those items is allowed. The corporate files of Eagle Lion are not Section 1221(3) property, and the parties agree that the Eagle Lion records comprise approximately 9 percent of all of the records in Schedule A-l. Neither party separately appraised the Eagle Lion files. Dr. Fielding assigned a value of $252,096 to all of the records in Schedule A-l, and allocated 22 percent to the Eagle Lion films involved. An allocation on the basis of volume (9 percent) is more reasonable in view of the substantial questions as to the content and coverage of the files in Schedule A-l. Such an allocation produces a value of $22,-689 for the Eagle Lion files.
Defendant contends that some of the UA still photographs, both prints and negatives, UA pressbooks, and UA music cue sheets are disqualified because they are “self created” property. Defendant concedes that none of the scripts UA donated were produced by or for UA. Plaintiff argues that the still negatives, still positives, music cue sheets, and pressbooks are artistic compositions and, therefore, are eligible for deduction. Starheads and key books (scene photographs) are said to be artistic compositions in themselves, and *486pressbooks and music cue sheets are said to be compilations of artistic compositions.
Defendant acknowledges that some of the photographs qualify as artistic compositions. Defendant’s principal argument is that material regularly used to promote and advertise motion pictures, such as the pressbooks, or tools for effective exploitation, such as music cue sheets and key book pictures, are business records and are not artistic compositions. The use of artistic property for such purposes does not strip them of their artistic qualities. Accordingly, defendant’s contention as to the I.R.C. § 1221(3) property is rejected.
Markets
The major cause of the wide disparity between defendant’s total allowable deduction of $56,451 for the University Property, and plaintiff’s final claimed deduction (after allowing for depreciation recapture) of $5,023,228, is the market each party used to estimate the fair market value as of November 1969 of the scheduled materials. What the fair market value of property is at a given time is a question of fact to be resolved from a consideration of all of the relevant evidence in the record. Where there is a demonstrated market for an item, the proper market for valuation purposes is a question of fact. Anselmo v. Commissioner, 757 F.2d 1208, 1213 (11th Cir.1985). I.R.C. § 170 and the regulations thereunder are silent as to the market to be used to determine the value of donated property. Plaintiff contends that the relevant market for the University Property is retail sales to ultimate consumers. Defendant argues that the proper market for 16mm exhibition prints is found in sales by UA’s subsidiary, Dominant, and for non-film memorabilia in sales to dealers, some of whom operate retail stores.
Plaintiff cites federal estate and gift tax regulations for guidance to a definition of an appropriate market and relies upon the decision in Anselmo as support for its contention. As the court in Anselmo opined, the same classic standard for measuring fair market value applies in both estate and gift tax and the charitable contribution contexts — a price struck by a willing buyer and a willing seller, neither being under a compulsion to buy or to sell, and both having reasonable knowledge of relevant facts. Anselmo, 757 F.2d at 1214.
On its facts, Anselmo does not hold that the appropriate market for the items at issue there were retail sales to consumers. That case involved the donation of 461 large, low quality, unset Bolivian gems to the Smithsonian Institution. The taxpayer claimed a charitable contribution deduction based on a fair market value for finished pieces of jewelry sold in a retail jewelry store. The I.R.S. experts valued the gems on the assumption that the 461 gems would be sold together to a single jewelry manufacturer or retailer who would use them in the manufacture of finished pieces of jewelry. The Tax Court concluded that the I.R.S. experts were correct in assuming that the gems would be marketed to retailers and jewelers for further manufacture into finished pieces, and that the stones should be valued with reference to the price paid by jewelry manufacturers. The court rejected the contention that the gems would be sold as a group, at a substantial discount, rather than individually. The Eleventh Circuit affirmed.
With respect to the donor’s argument that the estate tax test that fair market value is to be determined in a market “in which such item is most commonly sold to the public,” the court stated {Anselmo, 757 F.2d at 1214):
... The major flaw in this argument, as the Tax Court pointed out, is that the “public” refers to the customary purchasers of an item. The most appropriate purchaser of an item is not invariably the individual consumer.
Anselmo does not support plaintiff’s contention that retail sales to ultimate consumers constitute the appropriate market for the University Property. As to the question in this case of whether the proper market would be sales of individual items, or package sales to dealers or institutions, Anselmo provides no guidance because the facts are substantially different. There is little comparison between sales of 461 low quality, unset gems, that require extensive *487further distribution and manufacture, and the sale of the multitude of 16mm motion picture prints, still photographs, and other records that have been retrieved from dead storage and make up the University Property.
In the motion picture industry, there are markets in which the film and nonfilm materials that constitute the University Property are bought and sold. Collections of motion pictures on 16mm film are assembled by private collectors through purchases from other collectors or from the retail outlets of dealers. Private collectors sell 16mm motion picture films to other collectors, to dealers, and to colleges or other institutions interested in motion picture history.
Until mid-1966, UA’s subsidiary, Dominant, leased, on unsolicited orders placed by the general public, used 16mm prints of its motion pictures for the “Life of Print” which meant that the recipient of the print could keep in indefinitely. UA also made new 16mm exhibition prints available to certain film distributors for the “Life of Print,” or on seven-year leases. The distributor was permitted to rent the print to noncommercial parties (schools, colleges, film societies) that did not charge for exhibition of the motion picture.
The standard price at Dominant of a used print of a feature length motion picture was $125. UA normally charged its distributors who rented to noncommercial parties from $225 to $500 for a black and white print, $540 to $800 for full length color features, and from $18 to $60 for cartoons (some in color).
Dominant on occasion also would accept unsolicited orders from the general public for new exhibition prints. The prices of these new exhibition prints ranged from $150 to $400 per feature length black and white print, and up to $500 for a feature length color print.
During the 1960’s, there were approximately 15 to 20 business organizations that dealt in nonfilm motion picture items like those in the University Property — still prints and negatives, scripts, screenplays, pressbooks, key books, music cue sheets, production files, and other documentary memorabilia. These dealers, some of whom operated retail stores and solicited business through catalogues, in the main were located in the New York or Los Ange-les areas. Many of these businesses typically were small in size and located in transitional, low-rent areas. Such dealers filled a niche in the motion picture business in which the major producers and studios were not interested.
Sales of individual items of 16mm prints and nonfilm memorabilia to ultimate consumers normally would be through the retail outlets of dealers. Some individual sales could occur in direct transactions between private collectors. In either case, the number of items involved in any particular transaction would be very small. Plaintiffs expert for appraisal of still photographs documented separate transactions with dealers in the magnitude of:
10 copy negatives of Greta Garbo,
8 original 8 X 10 negatives of scenes of Mary Pickford,
3 portrait negatives of Carol Lombard,
206 8 X 10 negatives of film stars.
Sales of motion picture materials comparable to the categories of the University Property in large quantities almost invariably would be dealers. A market also existed for small collections that had a particular subject matter focus or historical value in sales to colleges, archives, and other institutions interested in motion picture research or preservation.
The outstanding characteristic of all of these transactions, and the most significant factor in a determination of fair market value, is that markets for potential sellers were extremely thin. Potential purchasers of volumes of any magnitude of a particular item in the University Property are few in number. The dollar magnitude of any particular transaction in these markets typically is modest, and capital available to the small business operators was limited. Colleges and archives, in 1969, did not have funding that could be made available to purchase large segments of the University Property.
*488Plaintiff complains that defendant’s fact witnesses represented the “low end” of the market and scarcely a level ahead of fly-by-night operations. Plaintiff has not shown that operators in the “high end” of these markets are in any substantial numbers or are appreciably more heavily structured financially than defendant’s fact witnesses. There is little doubt that, in fact, no market existed in 1969 that could finance sales of the magnitude plaintiff projects for the University Property.
Another characteristic of sales in these markets is the limited number of actual transactions as to any particular item. There is no regular flow of similar transactions that would define a relatively stable price for any particular item.
In Anselmo, the court found that the fair market value was the price a buyer would have to pay the supplier who had sold the gemstones to the donor. See Anselmo 757 F.2d at 1213 and n. 5. UA asserts that the relevant market in this case cannot be ascertained by looking at the manner in which UA obtained the property it eventually donated. The property was acquired for commercial exploitation, and the rights to commercial exploitation were not donated. Further, UA states that the value of this donated property lies in its historical and archival significance, which were not recognized by UA when it first acquired the materials. Accordingly, plaintiff argues, the market in which the materials were acquired no longer exists. This contention, seemingly, would make purchases by colleges, archives, and other like institutions have greater significance in any market in which the University Property could be sold. In 1969, UA did not have direct access to markets in which sales were made to ultimate consumers of motion picture memorabilia.
The record contains information about sales of collections that contained items comparable to some of the items in the University Property. These transactions illustrate the limited size of actual market transactions in number of items and capital requirements:
1. Shephard collection: In the mid-1960’s, David Shephard accumulated a collection of more than 1,000 16mm motion picture prints. Most were of features made before 1950. Generally, Mr. Shephard paid less than $200 for each print. The collection was in fine condition, was diverse, and was quite rare. On November 3, 1976, he offered to sell his collection to the University, and sent an inventory that had hand-written prices to the left of the titles. These prices were not quotations but were given to provide an approximate indication of the value of each item and to permit a rough idea of the costs associated with various packages that might be selected. These prices generally represented Mr. She-phard’s costs. Following negotiations, the University selected approximately 180 prints, for which it paid $25,000. The prices agreed upon ranged from $125 to $300 for black and white prints and $500 to $650 for color prints. One title, “The Maltese Falcon,” was priced at $200 on the inventory. This same title was included in Mr. Shephard’s valuation as a Warner Brothers “classic” and, with a value-added factor of 2.21594, valued at $775.
2. Cohen collection: This collection is described supra. Its contents are listed in a 32-page inventory. It contained all significant records related to 27 Universal Studio motion pictures. The University of Iowa in 1966 purchased the collection for $4,125.
3. Ringold collection: In the early 1970’s, Malcolm Willits acquired this collection for $11,200. The collection consisted of approximately 250,000 still prints, 10,000 still negatives, several hundred pressbooks, scripts, posters, lobby cards, books, and magazines. Mr. Rin-gold was a collector of movie memorabilia and also operated a mail order business. His print collection covered a panoply of Hollywood history, the output of different studios and a variety of different stars.
4. Nelson collection: In 1969, Malcolm Willits attempted to sell the Nelson collection. It consisted of 33,262 still *489prints assembled by a private collector. It was offered to Mr. Willits at a price of approximately 15 cents per print. Mr. Willits prepared a brochure that described the collection in detail, which was circulated to a number of universities and libraries. The offering price was $8,750 (approximately 25 cents per still). No offers were received.
In determining fair market value, all factors bearing on value are relevant, including, when pertinent, the cost or selling price of the item, sales of comparable properties, cost of reproduction, expert-opinion evidence, and expert appraisals. Absence of a readily available market price does not preclude a valuation; uniqueness of the property does not preclude a valuation if the property can be identified with actual commercial market activity. See, Guggenheim v. Rasquin, 312 U.S. 254, 258, 61 S.Ct. 507, 509, 85 L.Ed. 813 (1941), Nord W. Krauskopf 48 T.C.M. (CCH) 620, 628 (1984). In this case, the experts’ reports, the testimony, and documentary evidence establish that the University Property had a fair market value in 1969 in some amount.
Plaintiffs expert, Mr. Cushman, assumed orderly marketing for sales to consumers reasonably would require a three-year period to move the still photographs he appraised. Defendant’s expert, Mr. Wil-lits, estimated that a reasonable period for retail sales disposition of pressbooks would be a five to ten-year period. In a purchase in 1969 of a package as large and diverse as the University Property, any dealer would be concerned about the period needed to recover costs and realize profit in relation to inventory maintenance expense. A five to ten-year period would be needed to provide an adequate incentive.
In order to dispose of the University Property, the materials would have to be identified and organized in a manner appropriate to extremely large scale transactions. Review of the record indicates that a grouping by source company would conform to industry practice. Accordingly, such an organization has been adopted for the valuations that follow.
Conclusions
All of the materials conveyed to the University qualified as a gift within the meaning of I.R.C. § 170. UA’s management made the contribution to the University (1) with the intention of realizing a tax benefit for a charitable contribution, (2) with the intention that nothing be given that would impact on UA’s commercial exploitation of motion pictures, and (3) with the intention, except for the right to broadcast the RKO films over the University’s television station for educational purposes, to make a gift of the physical property contained in the materials only. There was no intention to transfer to the University any physical property that had a value to UA in its commercial operations.
Commercial markets existed in 1969 which involved purchases and sales of items comparable to the materials in the University Property. The fair market value of the University Property is to be found in sales made to dealers of motion picture films and memorabilia, and in similar sales made to such organizations as universities, libraries, archives, or museums.
Transactions with dealers would have the following characteristics:
(1) Sale would be of a bulk package.
(2) The price of the package would reflect the following considerations:
(a) Some of the individual items in the package, over a period of time, reasonably could be expected to be sold to collectors or other ultimate consumers at such prices and in such quantities that the whole transaction would be commercially viable.
(b) Some of the items in the package were susceptible to reassembly into smaller packages that would qualify as an integrated collection of interest to universities, archives, libraries, or museums for historical preservation, research, or archival purposes. Such re-packaged sales would be at such prices and in such amounts that would be within the means of the institution and at the same time would be commercially viable.
*490Transactions with institutions that would acquire the University Property for historical preservation, research, or archival purposes would have the following characteristics:
(1) Sale would be of a bulk package.
(2) The price of the package would reflect the following considerations:
(a) Institutions interested in such a purchase have limited funding available for such purposes.
(b) Susceptibility of the package to reassembly for the purpose of creating collections of sufficient subject matter integrity and completeness to be useful for research, classroom educational needs, or historical preservation.
The conditions under which the University Property was developed and maintained were such that the schedules attached to the deeds of gift were inadequate to identify the quantity or condition of the items listed. The University Property in 1969 was an accumulation of the residue of prior commercial activities for which there was little present need and any future business use was problematic. It was not an integrated collection of materials selected and organized for sale either (1) to a dealer or to an ultimate consumer, nor (2) to an institution for historical preservation, research, or archival uses. The most reasonable package to offer for sale, either to dealers or to institutions, were packages identified and organized by source of the materials.
A dealer who purchased a package of University Property would allow for maintenance of the inventory for from five to ten years. During that period, some items would not be sold, but sales that did occur would be sufficient, from a commercial standpoint, to warrant and sustain the transaction.
The reports and opinion evidence of plaintiffs expert witnesses are not acceptable, in part, because the experts were artificially restricted by requirements from counsel to concentrate on markets limited to ultimate consumers. The reports and opinion evidence of all expert witnesses from the motion picture industry are distorted by client orientation. As a result, values recommended by plaintiffs expert witnesses must be downgraded, and values recommended by defendant’s expert witnesses are unacceptably low.
The fair market values in 1969 of the various items in the quantities that a dealer could be expected to resell during a five to ten-year period are:
16mm feature length motion picture print: — Used . $125.00
16mm feature length motion picture print: — New, black and white 200.00
16mm feature length motion picture print: — New, color 500.00
16mm shorts 50.00
16mm cartoons 25.00
Still photograph negatives 2.00
Still photograph negatives major stars 2.50
Still photograph prints 2.50-3.00
Pressbooks 2.00
Scripts 5.00-15.00
Final scripts 15.00-40.00
Shorts 3.00
Monogram Dialogues 2.50
Ziv-TV Scripts 3.00
Pressbooks, Warner Brothers 6.00
Pressbooks, Monogram 4.00
Music cue sheets 1.00
The fair market value of the University Property, in packages organized by source company, as described above, pp '93-97, on the basis of information in the record of this case and the foregoing conclusions, is:
1. United Artists: Schedules A-l, A-2(A), A-2(B), A-8, A-3, A-4, A-6, and A-7 $313,709.
2. Ziv-TV: Schedules B-l, B-2, B-3, B-4 508,731.
3. Warner Brothers Film Library: Schedules C — 1, C — 4, C — 6, C — 8, C-13, C-14, C-15, C-16, C-19, C-20, C-21, and C-22 990,423.
4. Popeye Cartoon Film Library: Schedules C-10 and C-13(vii) 110,837.
5. Monogram Film Library: Schedules C-12, C-13(vi), C-17, and C-18 ' 134,839.
Total $2,058,539.
No fair market value is found for the RKO Library package. In 1969, UA held television distribution rights in the United States in the RKO Library. UA gave the University 16mm exhibition prints of 707 RKO sound features, limited to educational uses in broadcasts over the University’s Madison, Wisconsin, station and study on the University’s premises. No evidence was presented as to the fair market value of the 707 exhibition prints as items separate from the television broadcast rights. The license to broadcast is not specifically *491stated to be exclusive or to be in perpetuity. The license clearly is less than UA’s entire interest in its license of distribution rights to the United States, including the Madison, Wisconsin, market. 26 U.S.C. § 170(f)(3)(A) (1982). The Madison market is less than one-quarter of one percent of UA’s total market. Mr. Ezzes testified that industry practice creates an exclusive market even though the license agreement does not contain the word “exclusive.” That may be accurate as to licenses in commercial television markets. It does not necessarily apply to the grant in a charitable gift context to an educational institution limited to educational uses. The circumstance that UA carried out its intent to make a gift and did not grant a license in, the Madison market to another does not resolve the issue of whether the gift in fact was exclusive and in perpetuity.
The fair market value of $2,058,539 for the University Property is subject to reduction for depreciation recapture. With an allowance of $5,756 for the 707 RKO prints, the total depreciation recapture applicable to the University Property is $799,-057. Accordingly, UA’s charitable contributions deduction for the University Property is $1,259,482.
Summary: Charitable Contributions issue:
Allowable
Deduction
Library Property None
University Property $1,259,482.
Total $1,259,482.
* * y « 6 * *
ORDER ON ALL CLAIMS
Liability on all claims in plaintiff’s complaints is determined as follows:
(1) I.R.C. § 51 Tax Surcharge Issue: No liability.
(2) I.R.C. § 421(b) Deduction (Stock Option Issue): No liability.
(3) Aircraft Leases Issue: No liability.
(4) I.R.C. §§ 921, 922 Western Hemisphere Trade Corporation Deduction: Plaintiff prevails on claim.
(5) Bad Debt Deduction (SCORE Issue): Stipulation of the parties in settlement of this claim is accepted.
(6) Investment Tax Credit for Films: Stipulation of the parties in settlement of this claim is accepted.
To be resolved mutually by parties after this decision on underlying substantive issues. (7) Computational Issues:
Plaintiff prevails and is entitled to rental deductions taken for tax years 1968 and 1969. 45(8) Title Plant Leases Issue:
Plaintiff prevails in part and is entitled to a charitable contribution deduction for 1969 in the amount of $1,259,-482. (9) Charitable Contributions Issue:
Counsel are directed to attempt to resolve by mutual agreement (1) all adjustments to plaintiff’s income tax for the tax years 1968 and 1969 that result from disposition of the liability issues herein ordered, and (2) the amount which plaintiff is entitled to receive on all claims in the complaints in the consolidated cases.
On the filing of a stipulation as to the amount plaintiff is entitled to recover on all claims, the clerk is directed to enter a final judgment without further order of the court. No costs. In the computation of the amount plaintiff is entitled to receive, if any matter arises that is not susceptible to resolution by mutual agreement, such matter shall be identified in a joint memorandum filed with the clerk on or before thirty days from the date of this opinion. Any such matter will be resolved in further proceedings before final judgment is entered.
It is so ORDERED.
Unless otherwise noted, all references to the I.R.C. are to the Internal Revenue Code of 1954, as amended, codified at 26 U.S.C.-(1982). | 01-03-2023 | 07-23-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/6826239/ | OPINION
MARGOLIS, Judge.
This action comes before the court on plaintiff’s application for attorney’s fees pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d).
BACKGROUND
On May 16, 1985, the court issued an opinion following trial in which the court made liability determinations adverse to the defendant on several of Esprit’s claims but concluded that because the plaintiff had failed to offer credible proof of damages, the plaintiff could not recover. On appeal, the U.S. Court of Appeals for the Federal Circuit vacated the opinion and remanded the case for further consideration of the quantum of damages. Esprit Corp. v. United States, 785 F.2d 326 (Fed.Cir.1985) (unpublished opinion).
On remand, the plaintiff was awarded $32,480.09 plus interest in damages for four of the eleven claims raised in the complaints. For two of these claims, because of the lack of credible testimony, the court was forced to use a “jury verdict” approach to establish damages. Esprit Corp. v. United States, Nos. 135-83C & 244-83C (Dec. 23, 1986) (unpublished opinion). This opinion was affirmed on appeal. Esprit Corp. v. United States, 831 F.2d 305 (Fed.Cir.1987) (unpublished opinion).
Plaintiff has filed an application for fees and expenses in the amount of $61,583.54, which plaintiff breaks down as follows: $39,531.19 in attorney’s fees and expenses; $18,746.93 in consultant fees; and $3,305.42 in miscellaneous expenses.
DISCUSSION
Enacted in 1980, the purpose of the EAJA was to ensure that certain individuals and small businesses would not be deterred from seeking review of, or defending against, unjustified government action because of the expense involved in securing vindication of their rights in civil actions and administrative proceedings. Eastern *493Marine, Inc. v. United States, 10 Cl.Ct. 184, 186 (1986). The EAJA provides:
[A] court shall award to a prevailing party ... fees and other expenses ... incurred by that party in any civil action ... brought by or against the United States ..., unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A). The EAJA further provides that fees and other expenses include “the reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test or project which is found by the court to be necessary for the preparation of the party’s case, and reasonable attorney fees.” 28 U.S.C. § 2412(d)(2)(A). The EAJA limits attorney fees to $75 per hour “unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee.” Id.
In Pierce v. Underwood, — U.S.-, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988), the Supreme Court interpreted the meaning of the phrase “substantially justified.” Id., 108 S.Ct. at 2549-51. The Court rejected the phrase as requiring the government’s position to be “ ‘clearly and convincingly justified’ ” and instead ruled that the proper test is one of reasonableness. Id. at 2551. Accordingly, to preclude the award of attorney’s fees, the government’s position must be “ ‘justified in substance or in the main’ — that is, justified to a degree that could satisfy a reasonable person.” Id. at 2550.
In its complaints, plaintiff raised eleven claims against the government. All eleven claims were thoroughly briefed, litigated at trial, and discussed in post-trial briefs. “[I]f some, but not all, of the Government’s defenses are not substantially justified, the prevailing party should be compensated [in a pro rata manner] for combating those that are not [substantially justified].” United Construction Co., Inc. v. United States, 12 Cl.Ct. 514, 517 (1987). Because the defendant prevailed in seven of the eleven claims raised by plaintiff, the government’s position in those claims is not amenable to the award of fees and expenses. See Cinciarelli v. Reagan, 729 F.2d 801, 810 (D.C.Cir.1984). Therefore, the court must determine whether the government’s position was substantially justified in the remaining four claims: the weatherstripping claim, the DEA claim, the transfer switch claim, and the indirect overhead claim.
After a careful review of the record, the court concludes that in three of these four claims, the government’s position was not reasonable, and hence, not substantially justified. In the decision on liability, the court determined that both the weatherstripping and the transfer switch claims involved defective specifications. The government was in a position to evaluate and remedy these two claims, but it did not. The government’s position in the indirect overhead claim was also unreasonable. Although plaintiff claimed it was entitled to indirect overhead costs for a total of 595 days, the plaintiff was clearly entitled to indirect overhead costs for at least the 167 day extension offered by the government. For the DEA claim, however, the government’s position was reasonable. There was an abundance of factual evidence that cast into doubt whether plaintiff suffered any damages as a result of the DEA’s failure to promptly vacate the premises. This absence of definitive evidence forced the court to use the “jury verdict” approach to determine damages.
Thus, the defendant’s position was not substantially justified in three of the plaintiff’s eleven claims. If the plaintiff had provided the court with sufficient documentation of the time spent on each claim, the court would attempt to award fees and expenses based on the amount spent on the three claims in which the government’s position was not substantially justified. Due to this failure, the court must attempt to properly allocate the appropriate amount of fees and expenses. In this case, with the material submitted by the plaintiff, the court concludes that the appropriate formula is to award the plaintiff fees and ex*494penses in the same proportion as the number of award justified claims bears to the total claims raised and argued. Thus, plaintiff should recover three elevenths (27.3%) of its reasonable fees and expenses.
Plaintiff claims that it is entitled to attorney’s fees calculated at $100 per hour because of the limited availability of qualified attorneys in plaintiff’s locale that specialize in federal procurement law and because of the complexities of plaintiff’s case. The court is not persuaded that the plaintiff has made a sufficient showing that fees in excess of $75 per hour are appropriate. In Pierce v. Underwood, 108 S.Ct. at 2553-54, the Supreme Court stated:
[T]he exception for “limited availability of qualified attorneys for the proceedings involved” must refer to attorneys “qualified for the proceedings” in some specialized sense, rather than just in their general legal competence. We think it refers to attorneys having some distinctive knowledge or specialized skill needful for the litigation in question.... Examples ... would be an identifiable practice specialty such as patent law, or knowledge of foreign law or language.
The court does not believe that the area of federal procurement law involved in this case constitutes the type of specialized skill that justifies an increase in attorney’s fees. To rule otherwise would serve to emasculate the effectiveness of the $75 cap as each practice group could argue that it possesses a “specialized skill.” Instead, the test seems to be whether the specialized skills are required to competently litigate the case. Such specialized skills were not required in this case. Therefore, the $75 per hour cap on attorney’s fees applies to this case.
Plaintiff also claims $18,746.93 in “agency fees-consultant fees.” While there is some doubt as to whether the EAJA covers “agency-consultant” fees, the court believes that such assistance in this case may be viewed as fees for analysis of the claim. At the same time, “[a] party who seeks payment must keep records in sufficient detail that a neutral judge can make a fair evaluation of the time expended, the nature and the need for the service, and the reasonable fee to be allowed.” Martin v. United States, 12 Cl.Ct. 223, 227 (1987). “Where supporting documentation is inadequate, the award may be reduced accordingly.” Id.
In this case, the plaintiff has provided the court with scant information on why the consultant, who assisted counsel throughout the litigation but never testified, was necessary to the litigation. As previously stated, this was not a very complex case, and it is not clear to the court why an expert or consultant was required.
Further, the plaintiff does not provide the court with information on the consultant’s qualifications, prior experience, or usual rates. Moreover, the record of hours billed by the consultant, although provided, is not sufficiently detailed so as to enable the court to ascertain what exactly the consultant did during the course of the litigation. For example, in several instances time is billed as “telephone call,” with no explanation whatsoever of what business was conducted during those calls. Accordingly, the court will allow $6,582, one third of what plaintiff seeks, for what the court believes is a maximum reasonable expenditure for consultant fees for this case.
Plaintiff also has included a list of miscellaneous expenses including photocopying, telephone calls, and travel expenses totaling $3,305, which are recoverable.
Modifying the claims accordingly, if plaintiff was entitled to recover all fees and expenses, it would recover $30,780 in attorney’s fees, $6,582 in consultant fees, and $3,305 in expenses, totaling $40,667. Plaintiff is entitled to recover 27.3% of this total, representing the percentage of claims in which the government’s position was not substantially justified. Therefore, plaintiff is entitled to recover $11,102.09 in attorney’s and consultant fees and expenses for this litigation.
CONCLUSION
For the reasons stated above, plaintiff’s application for attorney and consultant fees and expenses is granted in part. The Clerk *495will enter judgment in favor of the plaintiff for $11,102.09. Each party will bear its own costs. | 01-03-2023 | 07-23-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/6826240/ | OPINION
REGINALD W. GIBSON, Judge:
Introduction
Thomas Funding Corp. (hereinafter plaintiff or Thomas Funding), a New York corporation, filed a complaint in this court on June 21,1985, alleging, in essence, that the United States (defendant herein) wrongfully withheld payments due the plaintiff. Such payments, allegedly due, were the result of an assignment contract between plaintiff and a government contractor, i.e., Ferguson-Bryan & Associates, Inc. (FBA). The plaintiffs complaint seeks damages and a judgment in the amount of $287,-865.61, plus interest and costs etc., “and for such other and further relief as the [cjourt may deem just and proper.”
In opposition, the defendant filed a motion for summary judgment maintaining that the court lacks jurisdiction under the Contract Disputes Act, 41 U.S.C. §§ 601 et seq., and the Tucker Act, 28 U.S.C. § 1491; that the plaintiffs complaint is barred by the doctrine of res judicata; and, furthermore, that, should the plaintiff prevail on those issues, a tax lien duly filed by the Internal Revenue Service has priority over the plaintiffs rights under the assignment contract. Thus, concludes defendant, the plaintiff is not entitled to recover the amount prayed for in its complaint under any hypothesis.
Inasmuch as we find no genuine issues of material fact, as discussed infra, the court grants the defendant’s motion for summary judgment.
Facts
On December 10,1982, the United States Agency for International Development (USAID or defendant herein) entered into contract # NEB-0042-C-00-3006-00 with the Small Business Administration (SBA) for the purpose of assisting the Egyptian Ministry of Social Insurance in implementing a more efficient system of data processing. Shortly thereafter, SBA subcontracted said work to Ferguson-Bryan & Associates, Inc. on or about December 14, 1982. FBA is a corporation headquartered in Washington, D.C. Under this subcontract, FBA was to deal directly with USAID, and assume the status thereunder of “contractor.” Payment was to be made in installments upon the completion of specific portions of the job by FBA, which would then submit a voucher to USAID representing completion of such portion of the work and a demand for payment thereon.
On February 11, 1983, FBA assigned all of its rights to the proceeds under the contract with USAID to Thomas Funding Corp., a financial institution in the business of providing funds to government contractors.1 Notice of this assignment was received by USAID on February 17, 1983.
Subsequent to said assignment, and the submission and payment of certain invoices, USAID began an investigation into the validity and accuracy of various labor charges on vouchers # 12 and # 13, which *497allegedly indicated that FBA had purposely overcharged USAID. Payment on these two vouchers and on voucher # 14 was suspended and a stop work order was issued, which stood in effect for 90 days.
During the time the stop work order was in effect, FBA performed additional work under the contract and submitted voucher # 15 requesting payment for that work. USAID refused to make payment on that voucher as well.
Upon a further investigation into the alleged overcharges on the part of FBA, USAID determined that there had in fact been an intentional overcharge and terminated for default the prime contract in issue on March 5, 1984. Approximately one week after the termination of said contract, i.e., March 13, 1984, the Internal Revenue Service served upon USAID a Notice of Levy on all property, rights to property, money, credits, and bank deposits in USAID’s possession and belonging to FBA, who purportedly owed the IRS $527,878.62 in back taxes. On or after March 14,1984, plaintiff was advised of the service of the foregoing Notice of Levy. With respect to the delinquent taxes of FBA, the IRS had previously duly filed four tax liens with the District of Columbia Recorder of Deeds between April 20, 1982 and December 19, 1983. Three of these liens, totalling $578,-740.55, were filed in early 1982, long before FBA’s assignment (February 11, 1983) of the contract proceeds to the plaintiff, Thomas Funding. Also two of those liens were filed prior to plaintiff's filing its Form UCC-1 financing statement on or about July 23, 1982. Given the foregoing liens filed by the IRS, USAID made no further payments to plaintiff who, on or about March 20, 1984, by telegram, claimed that its Form UCC-1 perfected the first lien on all proceeds due FBA by USAID under the contract. On said basis, plaintiff demanded that no payments be made to any party other than plaintiff.
Following a review of FBA’s requests for payment on vouchers 12, 13, 14, and 15, USAID authorized payment on April 29, 1984, to the IRS in the amount of $77,-545.54, i.e., an amount representing the sum of payments due on vouchers 12, 13, and 14 minus an “outstanding local currency advance.” By a prior letter to USAID dated April 2, 1984, Thomas Funding demanded payment of the balance due under the contract and therein threatened legal action. However, the contracting officer did not respond to this demand.
On May 9, 1984, FBA through counsel filed an appeal with the Armed Services Board of Contract Appeals (ASBCA) of the contracting officer’s March 5,1984 decision to terminate the contract. After filing its appeal with said board, FBA motioned for voluntary dismissal due to an alleged lack of funds. Consequently, the claim for wrongful termination was dismissed with prejudice by the board. Thomas Funding made no effort to take part in the case before the ASBCA.
By letter dated October 5, 1984, Thomas Funding filed a claim with USAID, pursuant to 41 U.S.C. § 605, demanding $287,-865.61, which it claimed to be the balance of proceeds due under the contract. This claim was not certified. The letter contained a provision characterizing the document as a “contract claim” in compliance with the Contract Disputes Act, 41 U.S.C. § 605. USAID responded to this demand by letter dated December 19, 1984, and advised that Thomas Funding was not a party to the government contract in question, thus not a contractor, and, therefore, could not bring a claim under the Contract Disputes Act. Thomas Funding then filed a complaint in this court on June 21, 1985, alleging that FBA, the assignor, has performed work under the contract worth $287,865.61, and that USAID has wrongfully withheld payments due to Thomas Funding. The United States has now moved for summary judgment.
Contentions of the Parties
A. Defendant
The defendant has moved for summary judgment claiming, first, that the plaintiff lacks privity of contract necessary to bring an action under the Tucker Act. Privity is lacking, argues defendant, because plaintiff did not enter into a contract with the *498United States, but instead received an assignment of proceeds under a government contract in which the defendant was not a party. As a corollary argument, defendant also claims that the plaintiff, because it was not a party to a government contract, cannot assume the status of “contractor” as that term is statutorily defined under the Contract Disputes Act, 41 U.S.C. §§ 601 et seq.
Secondly, the defendant asserts that the doctrine of res judicata bars plaintiffs breach claim because the contractor (FBA) has already brought an action against defendant for wrongful termination of the contract and that action was later voluntarily dismissed by FBA with prejudice. Therefore, defendant maintains, plaintiff cannot show that the defendant has wrongfully withheld money due to either FBA or Thomas Funding as a result of work performed by the contractor.
Lastly, defendant includes three 1982 Notices of Federal Tax Liens and a 1984 Notice of Levy from the IRS in its supporting submissions, and points out that a portion of the money claimed by the plaintiff under the Assignment of Claims Act has already been properly paid to the IRS, which has priority over plaintiffs proceeds assignment, and that the remaining balance legally due IRS under such levy substantially exceeds the amount claimed by the plaintiff. The defendant concludes that, given the foregoing circumstances, the plaintiff, under any legal theory, is not entitled to any recovery in this action.
B. Plaintiff
Thomas Funding, Inc., the assignee of the government’s contract with FBA and plaintiff herein, in response to defendant’s motion for summary judgment, avers a plethora of bases allegedly justifying the action herein. First, plaintiff claims that the defendant is precluded from raising any objections to this court’s jurisdiction. The plaintiff rests its argument on a previous U.S. Claims Court denial of the government’s motion for summary judgment in a separate case involving a different contract and assignor.
Plaintiff further argues that here privity of contract is not necessary, to the extent that assignees have in the past been allowed to bring actions both in this court and its predecessor, the Court of Claims, against the United States to collect monies due.
In furtherance of the foregoing, plaintiff also makes two alternative arguments. First, it argues that privity of contract is unnecessary in this case because it (plaintiff) is an intended third-party beneficiary of the government’s contract with FBA. Secondly, says plaintiff, privity exists between itself and the United States through an implied-in-fact contract in which the latter’s acceptance of the assignment was in consideration of plaintiff’s offer to provide funds for the contractor. For all of these reasons, the plaintiff asserts jurisdiction under the Tucker Act. In addition, plaintiff argues that as a party to a government contract by virtue of a valid assignment, this court also has jurisdiction under the Contract Disputes Act of 1978, 41 U.S.C. §§ 601 et seq.
In response to the defendant’s argument that plaintiff’s claim is barred by res judi-cata, plaintiff, in its opposition brief, states that the doctrine is not applicable because the case by FBA against the United States was not “on the merits,” did not involve litigation of an identical issue, and was not between these same parties or their privies.
Lastly, as to the priority of the federal tax liens, the plaintiff argues that because the assignor did not have an interest in the proceeds from the contract at the time the federal tax liens were filed, i.e., the work had not yet been performed, plaintiffs assignment has priority over said tax liens. Additionally, plaintiff avers that defendant knew of the prior filed federal tax lien and, thus, had a duty to immediately advise plaintiff of the worthlessness of the collateral. By failing to so inform, plaintiff argues, defendant breached its duty and is liable to it notwithstanding the priority of the federal tax liens. Consequently, according to the plaintiff, the defendant is liable to it for the money paid to the IRS on the levy ($77,545.54).
*499
Scope of the Court’s Opinion
In deciding this motion for summary-judgment, the court must, therefore, determine three broad issues: (i) whether the plaintiff, as an assignee to a government contract under the Assignment of Claims Act, 31 U.S.C. § 3727, 41 U.S.C. § 15, has privity of contract with the United States for purposes of asserting a claim under the Tucker Act, 28 U.S.C. § 1491; (ii) whether such assignee to a government contract is a “contractor” as that term is defined under the Contract Disputes Act of 1978, 41 U.S.C. §§ 601 et seq., and, as such, entitled to bring a breach claim under that statute; and (iii) whether a federal tax lien on the assignor’s property has priority over the plaintiff’s assignment of the proceeds under the government contract and bars it from recovering under this claim where the IRS filed three tax liens, which far exceed the amount of damages claimed by plaintiff, prior to the assignment by the prime contractor to the plaintiff and the filing of Form UCC-1.
Discussion
I. Jurisdiction
We now address plaintiff’s contention that jurisdiction is conferred upon this court by the Tucker Act, 28 U.S.C. § 1491, and the Contract Disputes Act (CDA), 41 U.S.C. §§ 601 et seq. With respect to the foregoing, defendant avers that — (i) there is a want of privity; (ii) plaintiff is not a contractor under the CDA; and (iii) moreover, its letter filed with the contracting officer is not a claim within the contemplation of that statute.
A. The Tucker Act, 28 U.S.C. § 1491
Notwithstanding plaintiff’s nebulous averment that in a breach action, as it curiously asserts here, privity of contract is not required to be shown with the United States in order to recover, we hold that plaintiff may not maintain a breach action on these facts under 28 U.S.C. § 1491.2 As has long been recognized in government contract law, privity of contract is an indispensable prerequisite to the maintenance of a suit in this court against the government under the Tucker Act. See Erickson Air Crane Co. v. United States, 731 F.2d 810 (Fed.Cir.1984) (citing United States v. Johnson Controls, Inc., 713 F.2d 1541, 1550-52 (Fed.Cir.1983)). “The government consents to be sued only by those with whom it has privity of contract_” Erickson, 731 F.2d at 813. In both Erickson and Johnson Controls, a subcontractor was precluded from suing the government because it could not establish privity of contract, which the courts found to be dis-positive.
Although these cases both involve the issue of whether a subcontractor, as opposed to an assignee, has privity of contract with the government, the holding in each applies to the present situation equally well because the distinction is without a significant difference. See Produce Factors Corp. v. United States, 199 Ct.Cl. 572, 467 F.2d 1343 (1972). In Produce Factors, as in the present case, an assignee attempted to establish privity of contract, against the United States, through a valid *500assignment of proceeds arising from a government contract. The court rejected this argument, stating that an assignment “[cannot], and did not, create any contractual relationship between [the assignee] and the United States.” Id. at 581, 467 F.2d at 1348.
As an assignee under the Assignment of Claims Act, the plaintiff herein simply does not acquire privity of contract with the government in a separate contract with its assignor, which is necessary in order for it to maintain a breach action in this court under the Tucker Act. The plaintiff tortuously attempts to circumvent this fundamental requirement by arguing that privity of contract between it and the government was established through an implied-in-fact contract that was formed when the government acknowledged, or, as plaintiff would have it, “accepted” plaintiff’s “offer” to lend the prime contractor funds in exchange for the assignment of the proceeds. Yet, as Produce Factors makes clear:
[T]he plaintiff, whose relationship with the United States arose only because of its status as an assignee under the Assignment of Claims Act, as amended, did not have privity of contract or any contractual relationship [even . implied] with the Government. Therefore, its breach of contract action cannot be maintained. Plaintiff had only the rights of an assignee of Government contract proceeds under the assignment statute.
Produce Factors, 199 Ct.Cl. at 578, 467 F.2d at 1347 (emphasis added).
It is hornbook law that all the elements of an expressed contract must exist in order to create an implied-in-fact contract. For example, including but not limited to the requisite privity, a meeting of the minds and adequate consideration are the fundamental linchpins to such a contract. It is sufficient to say that plaintiffs implied-in-fact contract argument is entitled to short-shrift inasmuch as it totally fails to carry its burden in that regard. See Algonac Manufacturing Co. v. United States, 192 Ct.Cl. 649, 763, 428 F.2d 1241, 1255 (1970); and Diamond Manufacturing Co. v. United States, 3 Cl.Ct. 424, 426 (1983).
Plaintiff also makes an alternative argument, seeking to invoke Tucker Act jurisdiction, to the effect that it was an intended third-party beneficiary of the prime contract (NEB-0042-C-00-3006-00) between the government and plaintiff’s assignor (FBA), and it therefore has the right to bring an action against the government thereunder, which, it claims, is the promis- or. The plaintiff rests this conclusion on the fact that the defendant knew of the valid assignment to plaintiff in that it was served with a copy thereof on or about February 11, 1983, and also knew that the prime contractor (FBA), according to plaintiff, would not have been able to fulfill its obligations under the contract with the government absent the financing-assignment arrangement.
The foregoing averments hardly make the plaintiff an intended third-party beneficiary with enforceable breach rights against the United States. In order for one to have the recognized status of a third-party beneficiary of a government contract to which it is not a party, the contract with the government must evidence not only a clear intention to confer a benefit to that third party, but also an intention to give that third party the right to maintain an action against the government in order to protect the resulting benefit. See Baudier Marine Electronics v. United States, 6 Cl.Ct. 246 (1984) (citing German Alliance Insurance Co. v. Home Water Supply Co., 226 U.S. 220, 33 S.Ct. 32, 57 L.Ed. 195 (1912); Robo Wash, Inc. v. United States, 223 Ct.Cl. 693, 697-98 (1980); Orchards v. United States, 4 Cl.Ct. 601, 609-12 (1984)), aff'd, 765 F.2d 163 (Fed.Cir.1985).
In the case at bar, the plaintiff has not even alleged that the government knew of its existence at the time the prime contract was executed. The assignment occurred nearly three months after the execution of the prime contract, which contained no reference to the plaintiff whatsoever. While notice to the defendant of the assignment itself requires the defendant to make payments to the assignee, see 31 U.S.C. *501§ 3727, 41 U.S.C. § 15, this obligation arose from a statute coupled with an entirely separate contract to which the defendant was not a party in any sense. Simply stated, the plaintiff has neither alleged nor established the elements necessary to show that it is a third-party beneficiary, and we so find.
Pertinent to the overall privity issue, underlying plaintiff’s alternative implied-in-fact and third-party beneficiary contract contentions, the court in Produce Factors, 199 Ct.Cl. at 580, 467 F.2d at 1348, further states that:
While the assignee lending institution indirectly benefits the Government through financing the contractor’s performance, such indirect benefits do not serve to create privity of contract with the United States.
B. The Contract Disputes Act, 41 U.S.C. §§ 601 et seq.
Plaintiff also, in addition to the foregoing, asserts jurisdiction under the Contract Disputes Act, 41 U.S.C. §§ 601 et seq. We hold, however, that because the plaintiff is not a “contractor,” as discussed infra, it cannot maintain its action in this court under that statute.
Section 609 of Title 41 U.S.C. states that claims against the government can only be brought by a “contractor.” “See 41 U.S.C. § 609. A “contractor” is defined in section 601 as “a party to a government contract other than the government.” 41 U.S.C. § 601(4). The defendant urges that because the plaintiff was not a “party” to the contract in question, and that only the prime contractor and the government were, the plaintiff is clearly not a “contractor” for purposes of the CDA. Thus, defendant argues no breach claim for damages, on these facts, may be maintained in this court.
While this view somewhat oversimplifies the issue, it is essentially correct, for again the requirement of privity of contract must be shown for all parties attempting to maintain a suit as a contractor against the government under the Contract Disputes Act of 1978. See Erickson, 731 F.2d at 813; Johnson Controls, 713 F.2d at 1548-52. In short, the basic tenet of government contract law that the government consents to be sued only by those (i.e., a contractor) with whom it has privity of contract, although exceptions exist within very limited circumstances, is emphatically embodied in the Contract Disputes Act. See Erickson, 731 F.2d at 813. As discussed in the previous section, neither the prime contract nor the contract of assignment was a tripartite agreement. To the contrary, both were separate and distinct subject matter contracts. That is to say, plaintiff was not a party to the former contract, and the government was not a party to the latter. Thus, under no hypothesis can it be said that plaintiff herein was in privity with the United States under either contract.
To allow plaintiff, against this background, to maintain an action against the government under the CDA would disserve the policy considerations behind said Act: to provide a comprehensive, efficient system for adjudicating contract claims against the government, and to provide a single point of contact between the contracting officer and the contractor. See S.Rep. No. 1118, 95th Cong., 2d Sess. 16, reprinted in 1978 U.S.Code Cong. & Ad. News 5235, 5250. In subject case, the prime contractor (FBA) has already brought an action for breach against the government before the ASBCA, which, at the assignor’s motion, was dismissed by the board with prejudice on or about May 16, 1985. One can plainly see, on this record, that the policy of providing a single point of contact between the contractor and the government would be lost if the government, after successfully litigating a suit brought against it by a contractor, then had to face various breach claims brought by the contractor’s assignee.3 *502Therefore, because the plaintiff does not have the necessary privity of contract relationship with the defendant, ie., as a “contractor,” and because allowing it to proceed in place of the prime contractor would undermine the purpose of the Contract Disputes Act, we hold that this court does not have jurisdiction under that Act to entertain plaintiff’s complaint.
C. The Assignment of Claims Act, 31 U.S.C. § 3727, 41 U.S.C. § 15
As has long been recognized by this court and its predecessor, the Court of Claims, an assignee to the proceeds of a government contract under the Assignment of Claims Act is entitled to sue the government in order to recover payment for work performed by the contractor. See Merchants National Bank v. United States, 231 Ct.Cl. 563, 689 F.2d 181 (1982); Tuftco Corp. v. United States, 222 Ct.Cl. 277, 614 F.2d 740 (1980); First National City Bank v. United States, 210 Ct.Cl. 375, 537 F.2d 426, vacated, 212 Ct.Cl. 357, 548 F.2d 928 (1977); Florida National Bank v. United States, 4 Cl.Ct. 396 (1984); Maryland Small Business Development Financing Authority v. United States, 4 Cl.Ct. 76 (1983); Produce Factors Corp. v. United States, 199 Ct.Cl. 572, 467 F.2d 1343 (1972); Wyoming National Bank v. United States, 154 Ct.Cl. 590, 292 F.2d 511 (1961); Chelsea Factors, Inc. v. United States, 149 Ct.Cl. 202, 181 F.Supp. 685 (1960); Arlington Trust Co. v. United States, 121 Ct.Cl. 32, 100 F.Supp. 817 (1951). This is not to say, however, that the assignee may bring an action for breach of contract against the government when there is no privity of contract between the two parties. See Produce Factors, 199 Ct.Cl. at 580, 467 F.2d at 1348. Rather, an assignee under such circumstances may only bring a suit against the government for wrongful payment to a third party, and may not maintain an action for breach of contract in this court.
Under the Assignment of Claims Act, once notice of the assignment is duly given to the government, it has a duty to make payments directly to the assignee for work performed by the assignor. In this case, the government received notice of the assignment to Thomas Funding from FBA on February 17,1983, from which time it owed a duty to Thomas Funding to make payments directly thereto. As any failure to fulfill this duty is an actionable offense on the part of the government, this court has jurisdiction under the Assignment of Claims Act, 31 U.S.C. § 3727, 41 U.S.C. § 15, only for plaintiffs claim for wrongful payment. The Act did not give this court jurisdiction to entertain actions in breach of contract brought against the government by assignees.
In the instant case, Thomas Funding has in fact brought two different claims against the government: the first alleging non-payment of $210,330.07, and the second alleging wrongful payment of $77,545.54 to the Internal Revenue Service. We hold, therefore, that this court has jurisdiction under the Assignment of Claims Act, 31 U.S.C. § 3727, 41 U.S.C. § 15, only to the extent that Thomas Funding alleges wrongful payment to the IRS, ie., $77,-545.54; and this court does not have jurisdiction over the remaining claim of $210,-330.07, as that claim would necessarily involve the determination of whether the government’s termination of the prime contract was legally permissible — what the court in Produce Factors termed “performance aspects” of the contract and refused to hear. See Produce Factors, 199 Ct.Cl. at 580-81, 467 F.2d at 1348.
II. ■ Priority of the IRS Tax Liens
Notwithstanding the existence of jurisdiction in this court, supra, we are *503compelled, nevertheless, to grant defendant’s motion for summary judgment. This is so because the IRS has filed with the Recorder of Deeds for the District of Columbia four Notices of Federal Tax Liens, two of which (aggregating $465,464.36) were filed ■prior in point of time to plaintiff’s filing its Form UCC-1 financing statement. The following evidences the foregoing:
Stamped Filing Date Document Notice of Federal Amount Defendant's Appendix
4/21/82 Tax Lien $377,989.43 88
4/27/82 87,474.93 89
7/23/82 113,276.19 90
12/7/83 $ 13,497.55 91
(Pltf’s Ex. E, p. 54). Form UCC-1 contains a circled stamp thereon which is illegible and a scripted writing indicating — “Recorder of Deeds 7/23/82,” apparently denoting that it was filed thereat on said date. Given that date to be accurate, it means that plaintiff filed its UCC-1 financing statement approximately six and one-half (6V2) months prior to the date it entered into the assignment with FBA on February 11,1983 (Pltf’s Ex. A2, p. 31). Moreover, on or about March 13, 1984, defendant (USAID) received an IRS Notice of Levy (Deft’s App. 87) executing on any and all monies in its possession due to FBA. As a result of the duly filed liens and levy, supra, USAID released $77,545.54 to the IRS on or about March 29, 1984, which was the total amount then held and due to FBA under the contract, assigned to plaintiff on February 11, 1983 (Deft’s App. 97). In short, the foregoing establishes that the IRS liens and levy have priority over plaintiff’s subsequent Form UCC-1 financing statement and, as a consequence, plaintiff cannot prevail on this issue.
The 1954 Internal Revenue Code, section 6321, is clear on this point. Therein it provides that upon a taxpayer’s refusal to pay its taxes, a lien arises in favor of the United States “upon all property and rights to property, whether real or personal, belonging to such person.” I.R.C. § 6321. Thus, upon the filing of such a lien and levy, as here, with the proper county or, as in this case, the Recorder of Deeds in Washington, D.C., all creditors are put on constructive notice of the lien’s existence; and all subsequent creditors (as plaintiff herein) of the delinquent taxpayer take an interest in plaintiff’s property subject to the tax lien. See, e.g., Atlantic National Bank v. United States, 210 Ct.Cl. 340, 536 F.2d 1354 (1976).
Plaintiff does not dispute the broad general rule of first-in-time, first-in-right, but instead postures two arguments seeking to defeat defendant’s motion for summary judgment by averring that: (i) there are two genuine issues of material fact; and (ii) the plaintiff’s perfected security interest (i.e., the UCC-1) has priority over the federal tax liens notwithstanding the fact that the latter were filed prior in time to the former.
With respect to the existence of genuine issues of material fact, plaintiff argues first that there is a factual issue as to the total amount due by USAID, under the FBA contract, as assigned to plaintiff and such issue cannot be resolved by summary judgment. Presumably, plaintiff is attempting to subtlely raise breach issues, which it cannot; and further it is tacitly arguing that perhaps it is entitled to show that amounts are due by USAID under the assigned contract which exceeds the aggregate amounts of the perfected liens and levy.
It is hornbook law that in order for the non-movant to defeat a motion for summary judgment, it must show that there exists one or more “genuine issues of material fact.” Curtis v. United States, 144 Ct.Cl. 194, 199, 168 F.Supp. 213, 216 (1958), cert. denied, 361 U.S. 843, 80 S.Ct. 94, 4 L.Ed.2d 81 (1959). The postured issue must not only be material but also genuine. That is to say, both criteria must be met. A “material” fact, in this context, is customarily defined as one that will make a difference, or contribute to the collective evidence making that difference, in the results of the case.
The incontrovertible evidence regarding the amount due under the prime contract is as follows: (i) plaintiff’s contract of assignment shows that it advanced $115,865.40 to FBA, its assignor, and that $193,109.00 is *504the anticipated aggregate amount due or to become due under the prime contract (Deft’s App. 60); (ii) IRS liens perfected prior in time to plaintiff’s security interest aggregate $465,464.36 (Deft’s App. 88, 89, 90); (iii) the IRS levy served on USAID demanded all money etc., owing to FBA by USAID in the total amount of $527,878.62 (Deft’s App. 87); and (iv) plaintiff’s complaint prayed for only $287,865.61. The foregoing establishes, unequivocally, that the IRS liens, prior in time, exceed by at least $177,598.75 ($465,464.36 — $287,-865.61) any amount that plaintiff might arguably be entitled to from USAID under the assignment of proceeds of the prime contract. Against this background, we simply say that any fact regarding the amount due stemming from the prime contract is neither a genuine issue nor a material fact, for purposes of defendant’s motion for summary judgment, because the IRS liens and levy totally absorbed any amount otherwise due plaintiff pursuant to the assignment.
Next, and finally, plaintiff argues, in its effort to posture a genuine issue of material fact, that USAID visited a fraud on it when it failed to warn it (plaintiff), upon receipt of notice of the assignment of the proceeds on or about February 17, 1983, that plaintiff’s security interest was worthless inasmuch as USAID was then aware of the existing federal tax liens previously perfected in April 1982. Plaintiff argues that in view of defendant’s superior knowledge of the existence of said federal tax liens, it should have immediately advised plaintiff so as to permit it to protect itself by electing not to advance any additional funds under the assignment. In support of this position, plaintiff relies on certain dicta in Produce Factors, 199 Ct.Cl. at 582, 467 F.2d at 1349, cited in Atlantic National Bank v. United States, 210 Ct.Cl. 340, 348, 536 F.2d 1354, 1359 (1976), wherein the court states that:
If at the time it (Government) receives notification of an assignment, the Government knows that the assignee’s collateral is worthless, the Government must convey that information to the as-signee so that he will not advance funds on the strength of proceeds that will never come due.
Atlantic National Bank, 210 Ct.Cl. at 348, 536 F.2d at 1359, further teaches that to estop and hold the government liable on the foregoing rule, each of four separate elements must be present. One of these elements is that the party asserting estop-pel must be ignorant of the true facts. See id. (citing Emeco Industries, Inc. v. United States, 202 Ct.Cl. 1006, 1015, 485 F.2d 652, 657 (1973); United States v. Georgia-Pacific Co., 421 F.2d 92, 96 (9th Cir.1970)). Here, it is clear beyond cavil that plaintiff, as a matter of law, cannot set itself up as being ignorant of the IRS tax liens, when filed, for the simple reason that the cited authorities provide that it had constructive notice of each lien:
The purpose of the filing of a notice of Federal tax lien is to give constructive notice. A purchaser is charged with constructive notice of all a person of ordinary intelligence and diligence would have discovered by an examination of the index to Federal tax liens in the appropriate local office, [citation omitted.]
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Once it is established that plaintiff was chargeable with constructive notice, that notice has the same legal significance as actual notice.
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... and either constructive notice or actual notice is binding independently of the other.
Atlantic National Bank, 210 Ct.Cl. at 348-49, 536 F.2d at 1359.
Plaintiff herein is in the business of advancing finances for government contractors experiencing cash-flow problems to enable them to timely meet their contractual obligations. A person in such business exercising ordinary intelligence and diligence, and recognizing the substantial risks attending the conduct of business with such contractors, would certainly proceed with caution and check public records to notate any and all pre-existing viable liens. Had plaintiff utilized reasonable diligence (prior to executing the assignment agreement on *505or about February 11, 1983, by checking the recorder of deeds and/or other public records where federal tax liens are required to be filed), it would have had actual knowledge of the existing liens inasmuch as they were filed many months (ie., April and July 1982) prior to the time the assignment was executed. Plaintiff utilized uncanny diligence by filing its Form UCC-1 financing statement on or about July 23, 1982. Said filing occurred a little over six months prior to executing the assignment. Thus, we hasten to observe that it strains credulity that plaintiff failed to exercise equal diligence and checked for existing federal tax liens for the same reason it filed the Form UCC-1, ie., to protect its interest.
We are compelled, therefore, to charge plaintiff with constructive notice of the preexisting federal tax liens. So charged, we hold that plaintiff in effect had actual knowledge of the pre-existing federal tax liens, which, as a consequence, obviates any genuine issue of material fact regarding defendant’s alleged fraudulent failure to warn plaintiff of the worthlessness of its security interest.
Plaintiff’s last contention, which is apparently an afterthought, urges the position upon this court that its security interest (Form UCC-1 filed July 23, 1982) has priority over the two previously filed federal tax liens (ie., April 21 and 27, 1982). The tortuous scenario of plaintiff reasons as follows: (i) at the filing of the federal tax liens in April 1982, neither the primary contract between FBA and USAID (December 10, 1982) nor the assignment agreement (February 11, 1983) of the proceeds between Thomas Funding Corp. and FBA had been entered into; (ii) FBA had no interest in any monies under said contract or property interest therein in April 1982, thus in April 1982 there was no property in USAID’s possession belonging to FBA to which said lien could attach; (iii) since Thomas Funding filed its security financing statement, Form UCC-1, on July 23, 1982, a point prior in time to the execution of the prime contract (December 10, 1982), the in-place security interest gave Thomas Funding a preferred position over the federal tax lien although the latter was filed prior in time; and (iv) thus, when monies were earned, and due and payable by USAID under the assigned contract, they were instantaneously encumbered by plaintiff’s previously perfected security interest. Not surprisingly, no pointed authorities were cited to by plaintiff for this specious position.
Atlantic National Bank, 210 Ct.Cl. at 343, 536 F.2d at 1356 (citing Texas Oil and Gas Corp. v. United States, 466 F.2d 1040, 1052 (5th Cir.1972), cert. denied, 410 U.S. 929, 93 S.Ct. 1367, 35 L.Ed.2d 591 (1973)), teaches that “a federal tax lien attaches immediately to after-acquired property [of the taxpayer] without any further action required by the Government.” A case on all fours with the case at bar is Seaboard Surety Co. v. United States, 306 F.2d 855 (9th Cir.1962), cited in Atlantic National Bank, 210 Ct.Cl. at 344-45, 536 F.2d at 1357, which holds as follows:
[T]he taxpayer was awarded a Government contract on December 31, 1956. On March 2,1957, a trust agreement was executed assigning the proceeds of the contract to a bank. Prior to the date of the [assignment] ... the Government had a fully perfected tax lien on all property and rights to property of the taxpayer. The [Seaboard ] court stated at 859:
* * * These tax liens attached immediately to all rights of taxpayer under the government contract awarded December 31, 1956, including payments whenever earned. * * * [T]he [assignment] ... of March 2, 1957 could not displace the tax liens, which had already attached to taxpayer’s property rights in the contract.
The fact that taxpayer’s rights under the contract were dependent upon its performance did not affect the tax liens.
Given the foregoing, we hold that because plaintiff’s secured financing statement, Form UCC-1, was filed (July 23, 1982) after the federal tax liens (April 21 and 27, 1982), by some two months (one day after would be equally fatal), plaintiff cannot prevail on the priority issue.
*506
Conclusion
If the contractor/assignor (FBA) was entitled to monies from USAID under the contract, then Thomas Funding Corp., the assignee, would succeed to those rights. However, our situation at bar mirrors Wyoming National Bank v. United States, 154 Ct.Cl. 590, 594-95, 292 F.2d 511, 514 (1961), wherein our predecessor court held:
[I]nasmuch as the contractor owed the government in this respect much more than it had coming, clearly the contractor was entitled to nothing. Consequently, the assignee would also be entitled to nothing.
A fortiori, IT IS HEREBY ORDERED that — the plaintiff here at bar shall take nothing; the Clerk shall dismiss the complaint; and the plaintiff shall be assessed costs.
. "Sales and Assignment of Moneys Due or To Become Due.
I. The undersigned (hereinafter called the 'Assignor'), in consideration of the sum of $115,-865.40 paid by Thomas Funding Corp., a financing institution (hereinafter called the ‘Purchaser’) to the Assignor, hereby sells, assigns and transfers to Purchaser ... any and all amounts now and/or hereafter due or owing to the Assignor by the UNITED STATES OF AMERICA, or from any agency or department thereof ... under or pursuant to (i) the terms of that certain Contract ... [NEB-]0042-C-00-3006 heretofore entered into by the Assignor with the Government under date of 12/10/82-”
The assignment of contract proceeds was made pursuant to the Assignment of Claims Act, 31 U.S.C. § 3727, 41 U.S.C. § 15.
. The plaintiff, in its opposition brief, also argues that defendant is collaterally estopped from denying jurisdiction. A court, however, always has — "jurisdiction to determine its jurisdiction.” See Vecchione v. Wohlgemuth, 426 F.Supp. 1297, 1309 (E.D.Pa.), aff’d, 558 F.2d 150 (3rd Cir.), cert. denied, Beal v. Vecchione, 434 U.S. 943, 98 S.Ct. 439, 54 L.Ed.2d 304 (1977); RUSCC 12(h)(3) (holding that a court shall dismiss an action whenever it appears by suggestion of the parties that the court lacks jurisdiction). Furthermore, when the first court to decide the issue lacked subject matter jurisdiction, collateral estoppel will bar a plea of want of jurisdiction. See Cullen v. Margiotta, 811 F.2d 698, 732 (2d Cir. 1987). See generally Restatement (Second) of Judgments § 26(l)(c) (1982); United States v. Mendoza, 464 U.S. 154, 104 S.Ct. 568, 78 L.Ed.2d 379 (1983) (prohibiting the use of non-mutual, offensive collateral es-toppel against the government).
This court, therefore, cannot, and will not, permit plaintiff to use collateral estoppel as a free pass into a court that does not have subject matter jurisdiction over its claim. As stated in Vecchione, "a judgment that issues without subject matter jurisdiction is void, and the principle of [collateral estoppel] does not of its own force breathe vitality into the judgment.” 426 F.Supp. at 1309 n. 26.
. The defendant, as an additional ground for summary judgment, urges this court to bar the plaintiffs suit under the doctrine of res judicata. We choose not to do so on that ground because the defendant had notice of the assignment to the plaintiff, and could therefore have joined or *502interpleaded it in the first action. When the obligor (defendant in this case) has notice of an assignment by the assignor, and the assignee is not joined in a suit by the assignor against the obligor, a judgment for or against the obligor will not bar a later suit by the assignee. See In re Fine Paper Litigation State of Washington, 632 F.2d 1081 (3d Cir.1980); Restatement (Second) of Judgments § 55, Comment A (1980).
In this case, the defendant knew as of February 17, 1983, of FBA’s assignment of the proceeds to the plaintiff. When faced with the suit by FBA on May 9, 1984, it could have required that the present plaintiff, Thomas Funding, be made a party to the action through joinder or interpleader. In any event, it is unnecessary to address this issue inasmuch as this case may be appropriately resolved on another basis. | 01-03-2023 | 07-23-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902567/ | Appeal by the defendant from a judgment of the County Court, Nassau County (Thorp, J.), rendered July 2, 1986, convicting him of robbery in the second degree (three counts) and grand larceny in the third degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
The trial court did not err in failing to explicitly charge that the defendant’s mere presence at the scene of the crime was insufficient evidence of guilt. The court’s charge included a correct application of the Penal Law provision concerning accessorial liability (Penal Law § 20.00), as well as clear instructions on intent as an essential element of each crime and on circumstantial evidence, including the necessity to exclude beyond a reasonable doubt all hypotheses consistent with the defendant’s innocence (see, People v Compitiello, 118 AD2d 720, lv denied 67 NY2d 941). In addition, the evidence overwhelmingly supported the conclusion that the defendant was not merely present but was an active participant in the robbery.
We have considered the defendant’s remaining contentions and find them to be without merit. Mangano, J. P., Bracken, Spatt and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902568/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Shea, J.), rendered November 12, 1986, convicting him of criminal possession of a controlled substance in the third degree, petit larceny, and official misconduct, upon a jury verdict, and imposing sentence. The appeal brings up for review the denial, *715after a hearing, of those branches of the defendant’s omnibus motion which were to controvert a search warrant and to suppress physical evidence.
Ordered that the judgment is affirmed, and the case is remitted to the Supreme Court, Kings County, for further proceedings pursuant to CPL 460.50 (5).
At about 5:00 p.m. on October 24, 1985, three Brooklyn police officers responded pursuant to a radio transmission to a location where a burglary was reported to be in progress. There they found the defendant, then a New York City police officer assigned to the Brooklyn North Narcotics Division, who told them that while trying to assist someone who was being attacked, he himself was attacked by a group of people and had his gun stolen. The defendant was unable to describe his assailants except to state that two black males and one black female had been involved and that they had fled south towards Atlantic Avenue. The defendant was bleeding from his head and hands but declined medical assistance at the scene and instead chose to drive himself in his own automobile to the precinct. Upon his arrival, he told his fellow officers that he had been jumped by a group of people and that one of them had stolen his gun. He also added that during the course of the struggle, he had been hit over the head with a bottle. He was taken to a hospital by one of his fellow officers and received medical treatment for his wounds. He then returned to the precinct where he rested until 4:00 a.m. and then went home.
Following the attack the police apprehended one of the defendant’s assailants, Robin Baker, who admitted assaulting the defendant with a bottle but stated that she did so in an effort to recover drugs and money which the defendant had stolen from her. Ms. Baker stated that she attacked the defendant with a bottle only after he refused to give her back her drugs, threatened to arrest her if she did not leave him alone, and drew his gun in an effort to escape. Ms. Baker led the police to one Courtney Primo, who was also involved in the assault on the defendant, and Mr. Primo confirmed Baker’s story. The defendant’s gun was later recovered from the third person involved in the assault, C. L. Calhoun.
At this point, Sergeant Rosario, who had been assigned to investigate the assault on the defendant, conferred with an Assistant District Attorney and pursuant to his advice, applied for a search warrant for the defendant’s car. Sergeant Rosario informed the Judge about the defendant’s assault, related that various bloodstained objects had been observed on *716the front seat of the defendant’s car and obtained a warrant to search defendant’s car for "Human Blood items and items to which such Human Blood is attached”, and "Broken Glass or Glass Particles”. Sergeant Rosario, on the advice of the Assistant District Attorney, did not inform the issuing Magistrate of Baker and Primo’s allegations because Rosario did not think he had probable cause to believe that their money and/ or drugs would be found in the defendant’s car.
Upon executing the warrant, the police not only recovered bloodstained items from the passenger compartment of the defendant’s car, they also recovered a scale and a "coke user’s kit,” consisting of a razor blade, metal straw, and a mirror, from the glove compartment, and the defendant’s bloodstained jacket which contained vials of "crack” and envelopes of cocaine from the trunk. Both the scales and kit, when analyzed, showed traces of cocaine. The defendant was subsequently arrested and charged with, inter alia, robbery in the first degree, criminal possession of a controlled substance in the third degree, and official misconduct. Those branches of the defendant’s omnibus motion which were to controvert the search warrant and suppress physical evidence were denied.
At trial, the defendant maintained that the drugs which were recovered from the trunk of his car had been seized by him as evidence of crimes committed by Baker and Primo. In fact, the defendant stated that he was trying to effectuate their arrest when he was attacked by them and had his gun stolen. He claimed that his failure to report the attempted arrest or the seizure of narcotics and his failure to voucher the narcotics were attributable to the injuries he sustained as a result of the assault and his concern for the recovery of his gun. The defendant further testified that the "coke user’s kit” was actually a testing kit which he had found in a desk drawer at the precinct and put into his car in case he ever had a use for it as an undercover officer.
The defendant was convicted of criminal possession of a controlled substance in the third degree, petit larceny and official misconduct. Viewing the evidence in the light most favorable to the prosecution, we find that it was legally sufficient to establish the defendant’s guilt of the crimes charged (see, People v Contes, 60 NY2d 620). Moreover, upon the exercise of our factual review power, we are satisfied that the verdict of guilt was not against the weight of the evidence (CPL 470.15 [5]). Although the money which was stolen from Robin Baker and Courtney Primo was never recovered, there was ample circumstantial evidence from which the jury could *717reasonably infer that the defendant had stolen the money. In addition, the petit larceny conviction could alternatively have been premised on a finding that the defendant stole narcotics from Robin Baker and Courtney Primo. That it was unlawful for Baker and Primo to possess the narcotics is no defense to the defendant’s unlawful taking of them (see, People v Dragone, 96 Misc 2d 634; Hechtman, Practice Commentaries, McKinney’s Cons Laws of NY, Book 39, Penal Law § 155.00, at 104). We note that the "coke user’s kit” which was recovered from the glove compartment of the defendant’s car was properly admitted into evidence despite the fact that it constituted evidence of uncharged crimes since the defendant’s intent was not readily inferable from his acts and this evidence created an inference of guilty knowledge with respect to the crimes charged (see, People v Alvino, 70 NY2d 233). Furthermore, the court did not err in allowing the defendant to be questioned regarding his failure to report the attempted narcotics arrest and seizure of narcotics. While ordinarily the jury would be precluded from drawing adverse inferences from a defendant’s silence (see, People v Allen, 300 NY 222), here the defendant’s silence was properly used against him since such silence was patently inconsistent with the defense asserted and he was under an obligation to speak (People v Rothschild, 35 NY2d 355; see also, People v Conyers, 52 NY2d 454).
Furthermore, we find that the defendant’s motion to controvert the search warrant and suppress physical evidence was properly denied. The warrant, which was issued upon probable cause, gave the police the right to search every part of the defendant’s car that might contain the object of the search (United States v Ross, 456 US 798, 821). That the police believed that there was a possibility that narcotics might also be recovered did not render the narcotics inadmissible at trial. The information possessed by the police regarding the narcotics at the time the warrant was issued did not amount to probable cause and the narcotics, which were discovered in plain view, were discovered inadvertently and thus were admissible in evidence (see, Coolidge v New Hampshire, 403 US 443, reh denied 404 US 874; United States v Liherti, 616 F2d 34, cert denied 446 US 952; United States v Hare, 589 F2d 1291; People v Barber, 113 Misc 2d 365).
Lastly, we note that the defendant was not denied a fair trial on account of the negative press coverage given during his trial to the police in the 77th Precinct who were then being accused of "shaking down” drug dealers. When polled, each of the jurors stated that they would not allow the news *718reports which they had heard to influence their consideration of this case and each stated that he would base his determination of the defendant’s guilt or innocence strictly on the evidence before him. The jury was instructed to avoid listening to any reports of the scandal then unraveling in the 77th Precinct. The defendant has failed to show that any juror formed an opinion based on the negative publicity. Absent such a showing, the defendant’s argument must fail (see, People v Agron, 10 NY2d 130, 142, cert denied 368 US 922, rearg denied 27 NY2d 817; People v Lynch, 23 NY2d 262, 270-271). We additionally note that "the potential for prejudice from media publicity is most tenuous when it involves reports of similar crimes committed by other individuals, even where, as here, it involves groups associated with the defendant” (People v Moore, 42 NY2d 421, 433, cert denied 434 US 987; cf., People v Horney, 112 AD2d 841, lv denied 66 NY2d 615).
We have reviewed the defendant’s remaining contentions and found them to be unpreserved for appellate review or without merit. Mangano, J. P., Thompson, Bracken and Spatt, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902569/ | Appeal from order, Supreme Court, New York County (Fern A. Fisher, J.), entered on or about May 25, 2012, which denied respondent Seth Rubenstein’s motion to, among other things, vacate a prior order releasing certain records and papers to petitioner New York State Commission on Judicial Conduct, unanimously dismissed, without costs, as moot.
Respondent appeals an order releasing to the Commission records and papers, including transcripts, of a criminal matter in which he was acquitted on all counts after a jury trial. He contends that the order violated CPL 160.50 (1), which provides for sealing of records in a criminal proceeding following termination in favor of the person accused. The trial court ordered the release based on Judiciary Law § 42 (3), authorizing the Commission to request and receive data or information from any public authority that would enable it to carry out its function. Mr. Rubenstein was tried jointly with a judge, and the Commission sought the records in connection with its investigation of the judge.
The Commission now moves to dismiss the appeal, as the Commission no longer has any use for the records because the judge has agreed to a penalty, and thus any further proceeding by this Court would be purely academic. In other words, this appeal has been rendered moot. Mr. Rubenstein opposes dismissal as moot, in part because the Commission has published some documents which have been released and are on the Commission’s website, and because “of the importance of the questions involved, the possibility of recurrence, and the fact that orders of this nature . . . typically evade review.”
We find that the matter has been rendered moot and decline to pass on whether the release order was justified. However, we direct that all documents contained in the previously sealed records that were furnished to the Commission be returned forthwith to the court and be resealed for all purposes. Concur— Saxe, J.E, Moskowitz, Freedman and Richter, JJ.
Motion to dismiss appeal granted. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902572/ | Appeal from order, Supreme Court, New York County (Fern A. Fisher, J.), entered on or about May 25, 2012, which denied respondent Seth Rubenstein’s motion to, among other things, vacate a prior order releasing certain records and papers to petitioner New York State Commission on Judicial Conduct, unanimously dismissed, without costs, as moot.
Respondent appeals an order releasing to the Commission records and papers, including transcripts, of a criminal matter in which he was acquitted on all counts after a jury trial. He contends that the order violated CPL 160.50 (1), which provides for sealing of records in a criminal proceeding following termination in favor of the person accused. The trial court ordered the release based on Judiciary Law § 42 (3), authorizing the Commission to request and receive data or information from any public authority that would enable it to carry out its function. Mr. Rubenstein was tried jointly with a judge, and the Commission sought the records in connection with its investigation of the judge.
The Commission now moves to dismiss the appeal, as the Commission no longer has any use for the records because the judge has agreed to a penalty, and thus any further proceeding by this Court would be purely academic. In other words, this appeal has been rendered moot. Mr. Rubenstein opposes dismissal as moot, in part because the Commission has published some documents which have been released and are on the Commission’s website, and because “of the importance of the questions involved, the possibility of recurrence, and the fact that orders of this nature . . . typically evade review.”
We find that the matter has been rendered moot and decline to pass on whether the release order was justified. However, we direct that all documents contained in the previously sealed records that were furnished to the Commission be returned forthwith to the court and be resealed for all purposes. Concur— Saxe, J.E, Moskowitz, Freedman and Richter, JJ.
Motion to dismiss appeal granted. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/1362738/ | 261 P.2d 878 (1953)
MARTIN
v.
JACKSON et al.
No. 35070.
Supreme Court of Oklahoma.
May 12, 1953.
Rehearing Denied October 13, 1953.
*879 Roy F. Lewis, Oklahoma City, for plaintiffs in error.
Draper Grigsby and Hal McPherson, Oklahoma City, for defendants in error.
HALLEY, Chief Justice.
This action was filed in the District Court of Cleveland County by Bob Martin against Alvin R. Jackson and London and Lancashire Indemnity Company of New York to recover damages for alleged negligence of Dr. Jackson in treating an injured hand of the plaintiff, resulting in the loss of the use of his hand.
Plaintiff avers that he is a resident of Cleveland County and that Dr. Jackson resides in Oklahoma County and that the Indemnity Company is an insurance corporation organized under the laws of New York, but domesticated in Oklahoma. It is stated that Dr. Jackson is a physician and surgeon engaged in the practice in Oklahoma County.
Plaintiff sets up that he broke a bone in one of his hands and engaged Dr. Jackson to treat his hand; that the Doctor set the broken bone in such a negligent and unskillful manner that he lost the use of that hand; that in 1941 Dr. Jackson had entered into an indemnity contract with the Indemnity Company named whereby indemnity was obtained for the benefit of the plaintiff. A copy of the indemnity contract was not attached to the petition because it was alleged to be in the possession of the defendants.
No answer was filed, but separate motions were filed to quash the service of summons. Separate special appearances and motions challenging jurisdiction and venue were filed by each defendant alleging that Dr. Jackson was not a resident of Cleveland County, but a resident of Oklahoma County where this action was formerly filed by the plaintiff against the same defendants.
It was further alleged that in the action in Oklahoma County the Indemnity Company filed a general demurrer to plaintiff's petition which was sustained and the action dismissed as to the Indemnity Company; that no appeal was taken from that order and judgment which became final and estopped the plaintiff from maintaining the present action against the Indemnity Company. This left as the sole defendant, Dr. Jackson, a resident of Oklahoma County, who could not be sued alone in Cleveland County.
Defendants attached to their separate pleas to jurisdiction and venue a copy of the amended petition filed by plaintiff in Oklahoma County showing that the same cause of action was pleaded there as in the present case. There was also attached a copy of the order made in the Oklahoma County case sustaining the demurrer and dismissing the action as to the Indemnity Company, but overruling the demurrer as to the defendant, Alvin R. Jackson. It was alleged that certified copies of these instruments were attached to the petition as exhibits, but they are not shown to have been certified. It appears that they were filed in the District Court of Oklahoma County. The pleas of the defendants were duly verified.
The plaintiff elected to treat the defendants' special appearance and pleas to the jurisdiction of the court as answers and filed a reply thereto in which he denied the existence or rendition of the former judgment of the District Court of Oklahoma County. The replies were not verified. Thereafter, the plaintiff filed a motion to strike defendants' motions to quash in the present case, but these motions were overruled.
The defendants' pleas to the jurisdiction and venue were sustained. The plaintiff excepted and gave notice of appeal.
It is admitted that the plaintiff is a resident of Cleveland County; that Alvin R. Jackson is a resident of Oklahoma County and that the Indemnity Company is a foreign corporation which has domesticated in Oklahoma and could be sued in Cleveland County under the following circumstances: Sec. 426, 15 O.S. 1951, provides that:
"One who indemnifies another against an act to be done by the latter, *880 is liable jointly with the person indemnified, and separately to every person injured by such act."
Sec. 137, 12 O.S. 1951, provides, in part, as follows:
"* * * if such defendant be a foreign insurance company the action may be brought in any county where such cause of action, or any part thereof, arose, or where the plaintiff resides or where such company has an agent."
"A right of action may be brought under the provisions of this Act in any county of the State in which the plaintiff is a resident, or in any county of the State wherein a cause of action may arise." 36 O.S. 1951, § 113.
A copy of the amended petition of the plaintiff field in the Oklahoma County District Court in 1948 and to which defendants demurred, after alleging that the Indemnity Company was a New York corporation domesticated in Oklahoma, contains the following:
"That the defendant, Alvin R. Jackson, is a practicing physician and surgeon in the City of Oklahoma City and State of Oklahoma, and that heretofore the London and Lancashire Indemnity Company of New York made an indemnity insurance contract with the defendant, Alvin R. Jackson."
Judgment is prayed for against each defendant. There is no allegation in regard to the contract except that quoted above. It does not allege that the contract was in effect when plaintiff's hand was treated by the defendant, Jackson. There is no allegation as to the nature and terms of the indemnity contract and nothing to indicate that it was a contract insuring Dr. Jackson's patients against negligent acts by him or that the indemnity contract contained any provisions that would or did protect the plaintiff in any way against the alleged negligent acts of Dr. Jackson. Such was the petition before the District Court of Oklahoma County when it sustained the demurrer of the Indemnity Company.
The order sustaining the demurrer in favor of the Indemnity Company and dismissing the action as to that defendant was not appealed from and became final. That left only one defendant, Dr. Jackson, an admitted resident of Oklahoma County. The plaintiff voluntarily dismissed the action in Oklahoma County and re-filed it in Cleveland County making Dr. Jackson and the Indemnity Company defendants.
In the petition filed in Cleveland County the plaintiff alleged that in 1945 the Indemnity Company entered into a written contract with Dr. Jackson "for the benefit of this plaintiff" and that it was in force on the 15th day of October 1945 when plaintiff's injury occurred, but there were no such allegations in plaintiff's petition filed in Oklahoma County and to which the court sustained a demurrer in favor of the Indemnity Company.
In the present action in the District Court of Cleveland County each defendant filed a motion to quash and a special appearance and denial of jurisdiction of the court and venue, alleging that Dr. Jackson was not a resident of Cleveland County and that the action was formerly filed in Oklahoma County against the same defendants where they filed a general demurrer to the petition of the plaintiff which was sustained as to the Indemnity Company. It was alleged that certified copies of the petition and order of the court sustaining the demurrer and dismissing the action in the District Court of Cleveland County were being attached to the special pleas of the defendants and made a part of their pleadings.
The pleading was duly verified, but the exhibits attached thereto were not certified as true copies. The order sustaining the demurrer is signed "Lewis R. Morris, District Judge" and bears the notation "O.K. Roy N. Lewis, Attorney for Plaintiff", and "Draper Grigsby, Attorney for the Defendants".
The plaintiff treated the special appearances as answers and filed a reply thereto denying that the judgment pleaded by the defendants was ever rendered and then pleaded a general denial. Plaintiff then filed a motion to strike defendants' motions to quash. This motion was overruled, but defendants' special appearances and *881 denials of jurisdiction and venue were sustained and plaintiff excepted and gave notice of appeal. The minutes show that each party appeared by counsel and presented argument in support of their contentions. The date of these proceedings was January 3, 1951, and the journal entry was filed January 6, 1951.
The record shows that the plaintiff offered no evidence whatever to support his allegation that the District Court of Oklahoma County had never entered the order sustaining a demurrer and dismissing the action against the Indemnity Company. Plaintiff made no objection to the exhibits pleaded by the defendants because they were not certified to by the Clerk of the District Court of Oklahoma County. There is no record to show that any offer of evidence to prove these allegations was made by the plaintiff, although the journal entry recites that the court heard argument at the hearings.
In the absence of proof or offer of proof to support the statements made in the record, we do not deem it necessary to consider such contention. We do not find that the plaintiff was denied any constitutional rights by being deprived of property without due process of law.
The exhibits attached to the verified special appearances and objection to the jurisdiction filed by the Indemnity Company show that in the District Court of Oklahoma County a demurrer to the amended petition of plaintiff was sustained, and the case dismissed. The reply filed by the plaintiff was not verified and did not put in issue the allegations of the Indemnity Company to the effect that it could not be sued again on the same cause of action.
In Exendine v. Iron, 153 Okl. 177, 4 P.2d 1035, the rule is announced in the fifth syllabus as follows:
"An unverified general denial in an answer does not put in issue the execution of a journal entry of judgment of a county court properly pleaded in a petition, and, under the provisions of section 287, C.O.S. 1921 [12 O.S. 1951 § 286], the execution thereof shall be taken as true."
The question is as to whether or not the order of the District Court of Oklahoma County sustaining the general demurrer of the Indemnity Company and dismissing the case as to it, is such a judgment as may be set up by it to bar another suit against it on the same cause of action. This Court has held that an order sustaining a general demurrer and dismissing the action is such judgment as will be considered a judgment "on the merits". In the case of Christner v. Christner, 203 Okl. 581, 224 P.2d 594, 596, it was said in the body of the opinion.
"The effect of sustaining a demurrer to a petition and dismissing the action upon the refusal of plaintiff to replead is the same as if the case had been tried by a court and jury and issues found for defendant. Custer v. Kroeger, 313 Mo. 130, 280 S.W. 1035, 44 A.L.R. 1328. To the same effect are annotations following 13 A.L.R. 1104 and 106 A.L.R. 437. The Oklahoma cases are annotated in both the A.L.R. citations. We know of no authority to the contrary and none are cited."
See also Hutchings v. Zumbrunn, 86 Okl. 226, 208 P. 224.
In Stuckwish v. St. Louis-San Francisco Ry. Co., 177 Okl. 361, 59 P.2d 285, 286, it was said in the second syllabus:
"2. When a second suit is between the same parties or their privies, and upon the same cause of action as a prior suit, the judgment in the first is an adjudication not only as to every question, issue, and fact, which was, but also upon those which might have been, presented in the first suit."
In Kiniry v. Davis, 82 Okl. 211, 200 P. 439, it was said in the first syllabus:
"1. A judgment or decree, rendered on demurrer to a material pleading on the ground that the facts therein stated are insufficient in law, is as conclusive of the matters and things confessed by the demurrer as a verdict finding the same facts to be true; and such a judgment or decree, unappealed from, becomes a final judgment or decree upon the merits. Corrugated Culvert Co. *882 v. Simpson Tp., 51 Okl. 178, 151 P. 854, 4 A.L.R. 1170."
Since we have concluded that a judgment rendered sustaining a general demurrer and dismissing the action upon the election of the plaintiff to stand upon the petition is such a judgment as will bar a second suit upon the same cause of action, we find no error in the action of the District Court of Cleveland County in sustaining the special appearances of both defendants denying jurisdiction of that court and venue. Judgment affirmed.
CORN, ARNOLD, O'NEAL, WILLIAMS, JJ., concur.
WELCH and BLACKBIRD, JJ., dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/5902816/ | Weiss, J.
Appeal from a judgment in favor of the State, entered December 9, 1986, upon a decision of the Court of Claims (Hanifin, J.).
Claimant, with her father appearing as guardian ad litem, commenced this action against the State to recover for serious personal injuries sustained at approximately 11:00 a.m. on January 16, 1981, when the automobile in which she was a passenger collided with a tractor trailer on State Route 17 in the Town of Colchester, Delaware County. With a snowstorm in progress, the accident occurred on a declining straightaway in the westbound lane of Route 17, a four-lane highway maintained by the Department of Transportation (hereinafter DOT). At a bifurcated trial on the issue of liability, claimant essentially predicated her claim of liability on the State’s failure to warn of the icy conditions at the accident scene and to take appropriate maintenance measures. There was testimony presented that the driving lane was icy at the time of the accident, with an accumulation of approximately one inch of snow in the passing lane. The Court of Claims determined that the accident was not due to any negligence by the State and dismissed the claim. This appeal ensued.
As a general rule, the State is charged with the responsibility of maintaining its highways in a reasonably safe condition, but is not otherwise an insurer (see, Friedman v State of New *909York, 67 NY2d 271, 283; Kissinger v State of New York, 126 AD2d 139, 141). The presence of snow and ice on Route 17 and the fact that claimant’s vehicle skidded out of control do not alone establish negligence against the State (see, Valentino v State of New York, 62 AD2d 1086, 1087, appeal dismissed 46 NY2d 1072; La Tournerie v State of New York, 1 AD2d 734; Shaw v State of New York, 56 Misc 2d 857, 859). The pertinent inquiry is whether the State exercised reasonable diligence in maintaining Route 17 under the prevailing circumstances (see, Tromblee v State of New York, 52 AD2d 666, 667; Tetreault v State of New York, 50 Misc 2d 170, 177). In reviewing the underlying determination, our inquiry is not limited to whether the verdict is against the weight of the evidence, for we may factually assess whether the Court of Claims granted the judgment warranted by the evidence (see, Cordts v State of New York, 125 AD2d 746, 749-750; Arnold v State of New York, 108 AD2d 1021, 1023, appeal dismissed 65 NY2d 723). With these principles in mind, we agree with the determination of the Court of Claims that claimant failed to establish a prima facie case of negligence against the State.
Claimant maintains that the State should have anticipated the icy condition at the accident scene due to the area’s accident history and thus was negligent in failing to warn passing motorists by installing an "icy pavement zone” sign. Where the State has actual or constructive notice of a recurrent hazardous condition in a specific area, liability may result for a failure to correct or warn of the condition (see, Farrell v State of New York, 46 AD2d 697, 698; Citta v State of New York, 35 AD2d 288, 290). The record establishes that in 1978 or 1979, following an assessment of the site’s accident history, the State "grooved” a 0.8-mile segment of Route 17 encompassing the accident scene to essentially improve the traction on the highway surface. As the Court of Claims astutely observed, however, claimant failed to establish whether the highway was "grooved” prior to the accident history relied upon by claimant. Significantly, a further study completed in 1980 did not identify the relevant segment of Route 17 as an area of concern. As such, the court could reasonably deduce that the grooving was an appropriate response to any perceived problems in this area. Moreover, the State’s expert opined that the prevailing accident history did not demonstrate any need for an "icy pavement” sign in the westbound lane within the vicinity of the accident. Nor did claimant’s witnesses convincingly establish that the icy conditions in the subject area posed a recurrent problem (see, *910Quigley v State of New York 281 App Div 185, 189, affd 308 NY 846). On the evidence presented, the Court of Claims could readily conclude that a chronic icy condition did not exist at the accident site.
Claimant also maintains that the State was negligent in failing to sand the accident site despite a clear opportunity to do so. The record establishes that the site was not sanded prior to the accident. Nonetheless, we agree with the factual determination of the Court of Claims that the State’s maintenance procedures were reasonably conducted under the prevailing weather conditions. DOT maintained this section of Route 17 from its East Branch station, which was located approximately 11 miles west of the Sullivan County-Delaware County line and 10 miles west of the accident site. Two DOT trucks loaded with a combination of salt and cinders proceeded east on Route 17 at approximately 6:00 a.m. to a crossover near the county line and then west back to its East Branch station, completing the runs well before the accident. Both drivers employed a system of spot sanding, covering only the areas that appeared to be slippery. While a DOT operational guideline suggested that abrasives be applied to potential problem areas, DOT’S standard practice of sanding only where slippery conditions actually existed does not establish negligence (see, Boyd v State of New York, 103 AD2d 882, 883). At this juncture, only a light snow had fallen and both drivers indicated that spot spreading was employed on the icy areas. The Court of Claims could reasonably infer that the accident site was not icy at this time, particularly since the storm was not widespread and other witnesses testified that the storm intensified later in the morning. Thus, the initial decision to spot spread was a reasonable exercise of discretion (see, supra).
Claimant further attributes the State’s failure to timely sand the accident site to the breakdown of the loader at the East Branch station shortly after 6:00 a.m., and the failure to provide back-up equipment or employ a more effective contingency plan. After the loader breakdown, DOT drivers were directed to another DOT station in the Village of Hancock, which was located 12 miles west of the East Branch station. Claimant reasons that the delay occasioned by this extra distance prevented a timely sanding of the accident site. Again, we agree with the Court of Claims that the State’s response was not unreasonable. The loader was not shown to be improperly maintained and we perceive no obligation on the State’s part to retain back-up equipment on site. Further, the State is not obligated to employ a constant vigilance over *911its highway network, but only to pursue reasonably plausible measures (Shaw v State of New York, 56 Misc 2d 857, 859, supra; Tetreault v State of New York, 50 Misc 2d 170, 177, supra). The contingency option of utilizing the Hancock facility satisfied this standard. Nor, for that matter, did claimant establish that any dereliction on the part of the maintenance crew precluded a proper response to the storm. Considering the evidence in its entirety, we agree that the State acted with reasonable diligence in maintaining Route 17 under the prevailing weather conditions.
Moreover, as the Court of Claims observed, given the high rate of speed at which the vehicle in which claimant was a passenger was traveling, it is highly questionable whether sanding the accident site would have prevented this tragic accident (see, Boyd v State of New York, 103 AD2d 882, 883, supra; Desnoes v State of New York, 100 AD2d 712, 713). It must be emphasized that the sanding of highways during an ongoing storm is an emergency measure only (Porcaro v State of New York, 16 AD2d 1020, affd 13 NY2d 655). Motorists remain obligated to proceed with due caution when confronted with the hazards of winter driving. In the final analysis, given the weather situation, it is clear that the proximate cause of this accident was the speed and manner in which the vehicle in which claimant was a passenger was being driven.
Claimant’s remaining arguments are unavailing. Even assuming that claimant proved she suffered amnesia as a result of this accident and that a lesser burden of proof pertains (see, Schechter v Klanfer, 28 NY2d 228), claimant still failed to establish a prima facie case of negligence against the State (see, Sawyer u Dreis & Krump Mfg. Co., 67 NY2d 328, 333-334). Finally, we perceive no abuse of discretion in the exclusion by the Court of Claims of certain evidence pertaining to the program utilized in Sullivan County for maintaining Route 17 (see, Richardson, Evidence § 147, at 117 [Prince 10th ed]).
Judgment affirmed, without costs. Kane, J. P., Weiss, Yesawich, Jr., and Harvey, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902817/ | Casey, J.
Appeal from an order of the Supreme Court (Torraca, J.), entered March 5, 1987 in Ulster County, which, inter alia, partially granted a motion by defendant Vassar Brothers Hospital for a protective order and partially granted said defendant’s motion to preclude.
In this medical malpractice case, plaintiff seeks damages for injuries allegedly sustained to her left foot as a result of *912surgical procedures performed in June-July 1982 and in November 1983 by defendant Louis Nunez in defendant Vassar Brothers Hospital. The gist of the action against Nunez is that he performed the surgery negligently, was not properly qualified to perform it and violated the hospital’s rules and regulations in performing the surgery. Plaintiff’s action against the hospital is for negligence in permitting Nunez to perform surgery for which he was not qualified, in failing to properly supervise Nunez, in failing to comply with its own rules and regulations and in permitting Nunez to perform unnecessary surgery.
In response to the hospital’s demand, plaintiff provided a bill of particulars and, in turn, requested direct discovery of certain items. The hospital moved for a protective order with respect to each of plaintiff’s discovery demands and, by separate motion, sought to preclude plaintiff from offering proof in regard to such demands. Specifically, the hospital sought to preclude plaintiff from claiming in her bill of particulars that she "has a risk of amputation of her leg” and "may require someone to care for her”. The hospital further sought a protective order in regard to plaintiff’s request for, inter alia, (1) any statements that Nunez made to the hospital’s peer committee, (2) Nunez’s personnel folder, which was in the hospital’s possession, (3) any prior complaints against Nunez, and (4) a copy of the hospital’s rules and regulations. Supreme Court struck that portion of plaintiff’s bill of particulars which stated that plaintiff had a risk of amputation of her left leg and that plaintiff would require someone to care for her in the future. Supreme Court further directed that the hospital need not produce (1) statements made by Nunez to a hospital peer review committee, (2) the personnel folder of Nunez, and (3) any prior complaints against Nunez. Supreme Court denied that part of the hospital’s motion for a protective order with respect to production of the hospital’s rules and regulations.*
In our view, plaintiff is entitled to any statement made by Nunez at the hospital’s peer review committee proceedings regarding the subject matter of this action as an exception to the exemption provisions of Education Law § 6527 (3). If this discoverable material cannot be separated from undiscoverable material in the transcript or synopsis of such proceedings, *913the transcript or synopsis should be provided to Supreme Court for appropriate redaction (see, Carroll v St Luke's Hosp., 91 AD2d 674, 675). In addition, Supreme Court was correct in holding that plaintiff was entitled to a copy of the hospital’s rules and regulations which were in effect at the time of plaintiff’s surgery and treatment (see, Bowhall v Hanlon, 99 AD2d 857).
As to that part of plaintiff’s bill of particulars which alleges a risk of amputation of her leg and that she may require someone to take care of her, we believe that Supreme Court erred in granting the hospital’s motion to strike this from plaintiff’s bill of particulars. Such a factual allegation does not constitute proof. The admissibility of such evidence is for the trial court to determine at the time of trial upon a proper foundation (see, Sentowski v Boulevard Hosp., 109 AD2d 878; Morell v Saratoga Harness Racing, 44 AD2d 884).
Finally, we agree with Supreme Court that plaintiff is not entitled to possession of Nunez’s personnel folder or any other complaints that may have been made against him for performing unnecessary surgery or for performing surgery for which he was not qualified. No basis has been shown by plaintiff to permit discovery of such demands or to show that such demands are exemptions to the exemption provisions of Education Law § 6527 (3).
Order modified, on the law, without costs, by reversing so much thereof as granted defendant Vassar Brothers Hospital’s motions (1) for a protective order as to statements defendant Louis Nunez made to a hospital peer review committee, and (2) to strike a portion of plaintiff’s bill of particulars; deny those portions of said defendant’s motions; and, as so modified, affirmed. Mahoney, P. J., Kane, Casey, Weiss and Levine, JJ., concur.
The hospital in its brief to this court inaccurately states that Supreme Court deemed plaintiff’s request for the hospital’s rules and regulations to be moot. In fact, a reading of Supreme Court’s order and underlying decision indicates that the hospital’s request for a protective order regarding production of its rules and regulations was denied on the merits. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/6826241/ | OPINION
BRUGGINK, Judge.
Pending before the court is defendant’s Motion To Dismiss for lack of jurisdiction, propounded under RUSCC 12(b)(1).1 The pleadings and submissions have been considered, and for the reasons discussed below, the motion is denied.
BACKGROUND
Ruben S. Abundis and some 575 others who have filed their written consent to be party plaintiffs in accordance with 29 U.S. C. § 216(b) are or were employed by the United States Government in engineering, technical, or related job categories at various locations. This action seeks declaratory relief, backpay, liquidated damages, interest, and attorneys’ fees, pursuant to 5 U.S.C. § 5596 (1982), 28 U.S.C. §§ 1346(a)(2), 1491, 2201, 2202 (1982), and 29 U.S.C. § 216(b) (1982). The original complaint was filed on January 13, 1988. This was followed by the first-amended complaint on March 9, 1988, and the second-amended complaint on June 21, 1988. Discovery has been suspended pending the outcome of the present motion.
Plaintiffs allege that they have been unlawfully exempted from entitlement to overtime compensation under section 7(a) of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 207(a) (1982). The alleged denial of overtime pay resulted from plaintiffs’ employing agencies’ adherence to regulations promulgated by the Office of Personnel Management (“OPM”), the Government agency charged with administering the FLSA with respect to federal employees. See id. § 204(f).
Section 7(a) provides that an employer shall compensate its “non-exempt”2 employees at a rate not less than one and one-half times their regular rate of pay for each hour employed in excess of 40 hours per week. The 1974 Amendments to the FLSA, Pub.L. No. 93-259, 88 Stat. 55, changed the definition of “employer” to include a “public agency,” thus bringing the Government within the purview of the overtime requirements. 29 U.S.C. § 203(d) (1982).
On October 25, 1983, OPM published a notice of final rules and regulations which modified criteria for determining a Federal employee’s exemption status under the FLSA. 48 Fed.Reg. 49,494 (Oct. 25, 1983). The regulations purported to define those classes of employees who would be considered exempt from overtime eligibility. 5 C.F.R. pt. 551 (1986). The specific regulation relevant to the case at bar is 5 C.F.R. § 551.203(c). By its terms all employees classified at pay grades of GS-11 and above “shall be presumed to be exempt” from the overtime protections of the FLSA. Id. § 551.203(c) (“presumption regulation”). Agencies were permitted to request OPM to remove specific positions graded GS-11 or above from the exemption presumption. Id. § 551.207 (1984).
Implementation of these regulations was delayed, however, due primarily to riders on congressional appropriation bills that prevented OPM from using funds to issue the rules and due to litigation concerning these riders. See National Treasury Employees Union v. Devine, 733 F.2d 114, 115-116 (D.C.Cir.1984). On August 30, 1985, OPM republished the regulations for implementation and they became effective *508on November 1, 1985. 50 Fed.Reg. 35,529 (1985).
Soon after the regulations took effect, their legality was challenged. In American Fed’n of Gov’t Employees v. Office of Personnel Management, 821 F.2d 761 (D.C.Cir.1987) [hereinafter cited as AFGE], the U.S. Court of Appeals for the District of Columbia Circuit vacated and invalidated 5 C.F.R. § 551.203(c) along with various other OPM regulations. The court held that because the presumption regulation shifted the burden of proving exemption from the employer to the employee, it was inconsistent with the FLSA. AFGE, 821 F.2d at 771.
On September 18, 1987, OPM issued an Interagency Advisory Group Memorandum advising personnel directors of other federal agencies of its concurrence with the Department of Justice’s decision not to seek further review of the decision of the Court of Appeals. OPM instructed the agencies to apply the detailed exemption criteria that predated the presumption regulation in determining whether employees holding positions graded at GS-11 or above should be exempted from the overtime provisions of the FLSA. See FPM Letter 551-7 (July 1, 1975). By an interim rule published on January 22, 1988, 53 Fed.Reg. 1739, OPM confirmed its previous advice and formally withdrew the presumption regulation.
Plaintiffs allege that they were exempted from the overtime provisions of the FLSA after November 1985 solely by operation of the presumption regulation. Further, they allege that their non-exempt FLSA status which predated the invalid regulations has not been restored, nor have they been paid any FLSA compensation for the overtime hours they have worked since November 1985.
On March 10, 1988, defendant filed the present motion, which is premised on the application of 29 U.S.C. § 259 (1982). That section protects an employer from liability if its failure to pay overtime was due to good-faith reliance on a regulation promulgated by “the Administrator of the Wage and Hour Division of the Department of Labor,” even if the regulation is later invalidated. Defendant argues that plaintiffs’ employing agencies relied upon OPM’s regulations in denying FLSA overtime pay, and that therefore pursuant to section 259, plaintiffs are not entitled to retroactive FLSA overtime pay. Plaintiffs counter that neither the specific requirements set out in section 259, nor the general purposes of that section enable the Government, as an employer, to escape its duty to provide FLSA overtime benefits to its employees.
As an independent ground for its motion, defendant argues that this court lacks jurisdiction over the complaint because plaintiffs are seeking declaratory relief, which under these circumstances cannot be awarded by the court.
DISCUSSION
A. Jurisdiction
As a preliminary matter, the court rejects defendant’s argument that the entire claim should be dismissed as beyond the court’s jurisdiction. The primary relief requested in the instant case is retroactive overtime compensation, along with liquidated damages and attorney’s fees. There is no question that this court has jurisdiction over FLSA claims for overtime compensation. See Zumerling v. Devine, 769 F.2d 745 (Fed.Cir.1985). The subject matter of this dispute clearly falls within the Tucker Act. See 28 U.S.C. § 1491(a)(1) (1982); Parks v. United States, 15 Cl.Ct. 183, 188 (1988); see also United States v. Testan, 424 U.S. 392, 397-99, 96 S.Ct. 948, 952-53, 47 L.Ed.2d 114 (1976); United States v. King, 395 U.S. 1, 3-4, 89 S.Ct. 1501, 1502, 23 L.Ed.2d 52 (1969). The defendant is correct that the Claims Court does not have general jurisdiction to grant declaratory relief; however, the court in AFGE has rendered the essential declaratory relief needed by plaintiffs. What remains is a claim for the payment of money over which the court does have jurisdiction. The claim for back pay is thus properly before the court. Whether plaintiffs are entitled to any further declaratory relief is a question which does not have to be addressed on the present motion.
*509B. Application of Section 259
The primary issue before the court is whether section 259 can be utilized by the Government so as to bar liability when an employing agency relies upon an invalid OPM regulation. Section 259 provides:
(a) In any action or proceeding based on any act or omission on or after May 14, 1947, no employer shall be subject to any liability or punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938, ... if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any administrative regulation, order, ruling, approval, or interpretation, of the agency of the United States specified in subsection (b) of this section, or any administrative practice or enforcement policy of such agency with respect to the class of employers to which he belonged. Such a defense, if established, shall be a bar to the action or proceeding, notwithstanding that after such act or omission, such administrative regulation, order, ruling, approval, interpretation, practice, or enforcement policy is modified or rescinded or is determined by judicial authority to be invalid or of no legal effect.
(b) The agency referred to in subsection (a) of this section shall be—
(1) in the case of the Fair Labor Standards Act of 1938, as amended — the Administrator of the Wage and Hour Division of the Department of Labor; ....
Section 259 was enacted as Section 10 of the Portal-to-Portal Act of 1947, ch. 52, 61 Stat. 84. The Court of Appeals for the Second Circuit described the purpose of the statute as the shielding from liability of employers who took certain actions on the basis of an interpretation of the law by a government agency, even if the agency’s interpretation later turned out to be wrong. Equal Employment Opportunity Comm’n v. Home Ins. Co., 672 F.2d 252 (2d Cir.1982), on remand 553 F.Supp. 704 (1982). Moreover, the good faith reliance provision of section 259 was designed to insure that no employer who acted in good faith in accordance with a regulation or ruling propounded by the specified government agency would be held liable for his actions if the regulation or ruling was later invalidated. Martinez v. Phillips Petroleum Co., 283 F.Supp. 514 (E.D.Idaho 1968), aff'd, 424 F.2d 547 (9th Cir.1970); see also, Wheeler v. United States, 9 Cl.Ct. 579 (1986).3 When the FLSA was amended in 1974 to bring federal employees within the coverage of the law, section 259 was not amended to specifically name the Civil Service Commission (“CSC”).
In order for section 259 to apply, an employer must establish three things: (1) that its action was taken in reliance on a ruling of the Administrator, (2) that its action was in conformity with that ruling, and (3) that the action was taken in good faith. EEOC v. Home Ins. Co., 672 F.2d 252, 263 (2d Cir.1982). While plaintiffs do not question that defendant satisfies the second requirement, they do assert that the section is otherwise inapplicable. They argue that the regulations in question were not adopted by “the Administrator,” that application to the Government is inconsistent with Congress’ purpose in adopting section 259, and that circumstances attending adoption of the regulations establishes that the agencies involved did not act in good faith.
The court notes at the outset that the question of whether section 259 applies to defendant has not yet been squarely addressed in previous cases. While section 259 was discussed in Beebe v. United States, 226 Ct.Cl. 308, 640 F.2d 1283 (1981), the Court of Claims assumed, solely for the purposes of that decision, that section 259 was applicable to regulations issued by the CSC, but then rejected the defense on other *510grounds. Beebe v. United States, 226 Ct.Cl. at 325-27, 640 F.2d at 1293-94.4
The initial question which must be answered is whether the presumption regulation was promulgated by “the Administrator”. The statute is explicit in requiring that the regulation relied upon be one issued by the “Administrator of the Wage and Hour Division of the Department of Labor.” There is no question that did not occur in this case. The presumption regulation was issued by OPM, not by the Department of Labor. Defendant recognizes that OPM and the Administrator are separate and distinct entities, but argues that for purposes of section 259, they should be interchangeable. Defendant relies primarily on 29 U.S.C. § 204(f) which provides that “[OPM] is authorized to administer the provisions of [the FLSA] with respect to any individual employed by the United States.”
Defendant is certainly correct that the Civil Service Commission (“CSC”) possessed (and thus OPM now possesses) the authority to “administer” the FLSA with respect to the Federal Government. See Civilian Aircraft Pilots, B-203128, Jan. 4, 1982, 61 Comp.Gen. 191. The legislative history of the 1974 Amendment demonstrates Congress’ intention to give OPM a significant amount of authority to determine how the FLSA will be administered in the federal sector.5
It is also plain that OPM has authority to adopt regulations consistent with its substantive powers. 5 U.S.C. § 1103(a)(5) (1982); 5 C.F.R. § 5.1 (1988). Moreover, the agency’s interpretation of regulations has been upheld with respect to overtime wage calculations on several occasions. In Zumerling, 769 F.2d 745, the court held that OPM had been given the power to set forth guidelines and policies and had done so by promulgating FPM Letter 551-5. Additionally, the court in AFGE held it reasonable to conclude that “Congress contemplated OPM would exercise its administrative authority by engaging in the common agency practice of issuing substantive rules.” AFGE, 821 F.2d at 770; see also Beebe, 226 Ct.Cl. 308, 640 F.2d 1283; Wheeler, 9 Cl.Ct. 579. OPM’s adoption of the presumption regulation was thus a valid exercise of its authority and was binding on the agencies in question. See Hammond v. Lenfest, 398 F.2d 705, 715 (2d Cir.1968) (a validly promulgated regulation binds the government as much as the individuals subject to the regulation); see also Scarmato v. Northern Cal. Thrift Co., 184 F.Supp. 420 (N.D.Cal.1960); Bernick v. Coddon, 65 F.Supp. 89 (D.Minn.1946).
*511The flaw in defendant’s argument, however, lies in the fact that notwithstanding OPM’s authority to “administer” the FLSA with respect to federal agencies, it is still not “the Administrator of the Wage and Hour Division of the Department of Labor.” The exception created by section 259 is very precise. It is limited to circumstances in which regulations are adopted by “the Administrator,” the office created in 29 U.S.C. § 204(a). To apply the statute to a regulation issued by OPM, an agency not referred to, would be to extend the exception beyond its scope. It is fundamental in statutory interpretation that where the manner of a statute’s performance and the persons to which it refers are designated, omissions should generally be construed as exclusions. See Public Serv. Co. v. Federal Energy Regulatory Comm’n, 754 F.2d 1555, 1567 (10th Cir. 1985), cert. denied, 474 U.S. 1081, 106 S.Ct. 849, 88 L.Ed.2d 890 (1986); United States v. Jones, 567 F.2d 965, 967 (10th Cir.1977); see also Horner v. Andrzjewski, 811 F.2d 571 (Fed.Cir.), cert denied, — U.S.-, 108 S.Ct. 257, 98 L.Ed.2d 215 (1987). As the Court of Appeals for the Ninth Circuit held, “where a statute names the parties who come within its provisions, other unnamed parties are excluded.” Foxgord v. Hischemoeller, 820 F.2d 1030, 1035 (9th Cir.), cert. denied, — U.S.-, 108 S.Ct. 503, 98 L.Ed.2d 502 (1987); see also 2A Singer, Sutherland Statutory Construction § 47.23, at 194 (Sands 4th ed. 1984).
The Court of Appeals for the Federal Circuit has recently reemphasized that, when interpreting a statute, one must look first to the language of the statute itself. If the statutory language is unambiguous, the inquiry stops, unless there is a clearly expressed legislative intention contrary to the language of the statute itself. Simko Constr., Inc. v. United States, 852 F.2d 540, 542 (Fed. Cir.1988); see also Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981); LSI Computer Sys., Inc. v. United States Int’l Trade Comm’n, 832 F.2d 588 (Fed.Cir.1987). As the Court of Claims has held, “this court will not bend or strain the words of a statute to change its meaning unless there is a persuasive and clear showing that Congress did not intend for the letter of the statute to prevail.” Ocean Drilling and Exploration Co. v. United States, 600 F.2d 1343, 1348, 220 Ct.Cl. 395 (1979).
The Government’s reliance on the last sentence of 29 U.S.C. § 204(f) to show a contrary intent is unpersuasive. That section provides, in relevant part, as follows (emphasis added):
Notwithstanding any other provision of this chapter, or any other law, the Civil Service Commission is authorized to administer the provisions of this chapter with respect to any individual employed by the United States (other than an individual employed in the Library of Congress, United States Postal Service, Postal Rate Commission, or the Tennessee Valley Authority). Nothing in this subsection shall be construed to affect the right of an employee to bring an action for unpaid minimum wages, or unpaid overtime compensation, and liquidated damages under section 216(b) of this title.
Defendant focuses on the last sentence and argues that the defense contained in section 259 was therefore meant to apply to federal employers. The least strained reading of that sentence, however, particularly in light of the legislative discussion surrounding extension of the FLSA to federal employees,6 is that Congress had in mind protecting employees by that proviso, not limiting their rights. More importantly, however, defendant’s argument is faulty in that it assumes defendant’s ultimate conclusion — that section 259 is a limitation on the rights of federal employees. Defendant would have to first independently establish that from the language of the section itself, or clear legislative history. It has not done so.
*512Limiting the application of section 259 to regulations issued by the Administrator appears to be more consistent with the intended operation of section 259. Unlike the private sector, to which section 259 was drafted to apply, in the public sector there is no legal dichotomy between the regulator and the employer. When actions are brought in this court pursuant to 28 U.S.C. § 1491(a)(1), there is only one defendant— the Federal Government. RUSCC 10(a) (“the United States shall be designated as the defendant in every case”). Moreover, as this court held in another context, “OPM —the counterpart to the Department of Labor in federal sector cases — is part of the employing entity itself.” Hickman v. United States, 10 Cl.Ct. 550, 554 (1986). This required party configuration is inconsistent with section 259, which contemplates a separation between employer and regulator. When the Government is the employer, the regulations both originate from and apply to the same entity. As held in EEOC v. Home Ins. Co., 672 F.2d 252, “the Portal Act was not intended to allow an employer to insulate itself from liability for the consequences of its own improvident interpretation of the statute.” Id. at 266. Application of section 259 to public sector employers would effectively insulate the Government from all liability arising from faulty OPM regulations. OPM would have the power to adopt regulations which are subsequently found to be improper, and yet no liability would attach because the regulation was actually implemented by other agencies. The regulation, although improper, would have been effective nonetheless, albeit temporarily.7
Plaintiffs have alternatively asserted that assuming, arguendo, section 259 does apply to the government, defendant has failed to satisfy the third element of the defense — good faith. Because the court has concluded that the section 259 defense is not available, it is unnecessary to consider this contention. Nevertheless, this element further illustrates why the section 259 defense is inapplicable. It cannot be reconciled with the fact that in the case of a claim against the Federal Government, the same legal entity is both adopting the regulation and applying it. The test of an employer’s good faith in relying upon an administrative order or regulation is “whether he acted as a reasonably prudent man would have acted under similar circumstances.” Kam Koon Wan v. E.E. Black, Ltd., 188 F.2d 558, 562 (9th Cir.), cert. denied, 342 U.S. 826, 72 S.Ct. 49, 96 L.Ed. 625 (1951); 29 C.F.R. § 790.15 (1979). Application of this test clearly presumes some degree of discretion on the part of the employer in whether to apply the regulation. In the private sector, an employer has the option of disregarding a potentially invalid regulation if it is concerned that violations of the FLSA may result. As a practical matter, for a private employer, regulations of the Administrator set minimum requirements. If an employer chooses to pay overtime compensation to an employee despite a regulation declaring that the employee or some type .or amount of labor is exempt, it has discretion to do so. A federal agency has no choice, however, but to deny an employee overtime if directed to do so by OPM; it cannot ignore an OPM regulation. See discussion supra p. 510. Since the agencies had no choice but to adhere to the regulations, the concept of good faith is a nullity.8
*513Contrary to defendant’s argument, the term Administrator, as used in the context of section 259, is not ambiguous. It refers specifically to the office created in 29 U.S. C. § 204(a). That entity is not OPM. The court has not been referred to any clearly expressed legislative intention contrary to the specific language of the statute. The defendant therefore cannot rely on section 259 because the regulations were not issued by the Administrator.
CONCLUSION
The good-faith exception of 29 U.S.C. § 259 is unavailable to defendant in this action. Defendant’s Motion To Dismiss is denied. The stay of discovery is lifted. Defendant is directed to file its response to plaintiffs’ pending motion for partial summary judgment on or before October 12, 1988.
It is so ORDERED.
. Although one aspect of the motion relates to asserted jurisdictional defects (see p. 508 infra ), the bulk of the motion properly lies under RUSCC 12(b)(4), "failure to state a claim upon which relief can be granted,” and the court has considered the motion on that basis. The background facts are drawn primarily from the assertions of the second amended complaint, which defendant has accepted, and the court will treat, as true solely for the purposes of this motion. Statutory and regulatory materials submitted by defendant along with its motion do not require conversion of the motion to one for summary judgment.
. Any employee employed in a bona fide executive, administrative, or professional capacity is exempt from FLSA overtime coverage. 29 U.S. C. § 213(a) (1982).
. In Wheeler, the good faith defense under section 259 was not available to the Government where federal firefighters alleged that their regular and overtime rates of pay were erroneously computed. The court held that because the Government did not act in conformity with FPM Letter 551-5, Section 259 was not available as a defense. Wheeler v. United States, 9 Cl.Ct. at 585.
. The court held that because the defendant was aware of grievances filed by the union with respect to the regulation in question, and was aware that plaintiffs had appealed the issue to the Civil Service Commission, the defendant was put on notice to inquire whether its reliance on the regulation was justified. Since defendant applied the regulation without such inquiry, the good-faith element of the section 259 defense was not satisfied. Beebe, 226 Ct.Cl. at 326, 640 F.2d at 1294. To like effect is Wheeler v. United States, 9 Cl.Ct. 579, 585 (1986).
. 120 Cong. Rec. 7,335; see also AFGE, 821 F.2d at 770. Prior to 1974, federal employees' overtime entitlements were governed by statutes administered by the predecessor of OPM, the CSC. AFGE, 821 F.2d at 769. In 1974, Congress broadened the FLSA to include federal employees. Pub.L. No. 93-259, 88 Stat. 55 (pertinent part codified at 29 U.S.C. § 203(e)(2)(A) (1982)). This was done notwithstanding the CSC’s objection that existing civil service overtime laws were adequate, and thus FLSA coverage would confuse administration of the two separate overtime provisions. AFGE, 821 F.2d at 761. See Fair Labor Standards Amendments of 1974, H.R. Rep. 913, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin.News 2811 [hereinafter House Report].
Congress resolved this matter by specifically authorizing the CSC to "administer the provisions [of FLSA] with respect to any individual employed by the United States.” 29 U.S.C. § 204(f); see AFGE, 821 F.2d at 769. As further stated in the House Report:
It is the intent of the committee that the Commission will administer the provisions of the law in such a manner as to assure consistency with the meaning, scope and application established by the rulings, regulations, interpretations, and opinions of the Secretary of Labor which are applicable in other sectors of the economy. The provisions of the bill would leave the premium pay provisions of Title 5, United States Code, in effect to the extent they are not inconsistent with the Fair Labor Standards Act.
House Report, supra, reprinted in 1974 U.S.Code Cong. & Admin. News at 2837-38.
. See House Report, supra note 5, reprinted in 1974 U.S.Code Cong.-& Admin.News at 2812-13, 2837-38.
. During oral argument, defendant raised the point that consideration was given prior to adoption of the 1974 amendments to having the Department of Labor administer the FLSA in the federal sector. See supra note 5. The point being that if that had occurred, it would then be obvious that section 259 was applicable, despite the fact that both regulator and employing agency were part of the same Government. The short answer to defendant’s contention is that the Department of Labor was not given this role. The court today is faced with a statute that cannot be said to literally apply under the present circumstances. Moreover, the court’s discussion concerning the apparent inappropriateness of having the regulator take advantage of the defense is merely to aid in determining Congressional intent. Furthermore, the court notes that the role of OPM is, within the federal sector, distinctly managerial, unlike the Department of Labor.
. An agency’s ability to seek a presumption regulation exception from OPM for a particular job does not give meaning to the good faith concept. Defendant contends that the "employer" within the meaning of the section is the employing agency, and not the federal Government as a *513whole, and not OPM. Under defendant’s approach, if an issue arose at the agency level about the validity of a regulation, OPM’s refusal to create an exception would not prevent application of section 259. The employing agency's "good faith” would preclude an award of back pay. The net result is that the entity that has the real responsibility for deciding whether to enforce the regulation, OPM, would never be subject to evaluation of its good faith. | 01-03-2023 | 07-23-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902575/ | Order Supreme Court, New York County (Shirley Werner Kornreich, J.), entered December 21, 2011, which ordered plaintiff, pending arbitra*411tion, to pay the base rent that had been in effect during the first renewal term, plus escalation and real estate taxes, unanimously affirmed, with costs.
The parties’ lease states that the fair market rent for the second renewal term shall be determined by arbitration if the parties cannot agree. The parties could not agree on fair market rent, and plaintiff tenant commenced this action seeking, inter aha, a Yellowstone injunction and a declaration that it is not in default of the lease. Upon staying the action pending arbitration, the motion court appropriately ordered plaintiff to pay the base rent that was in effect during the previous lease term plus escalation and real estate taxes (see Andejo Corp. v South St. Seaport Ltd. Partnership, 35 AD3d 174 [1st Dept 2006]). Should plaintiff prevail in the arbitration, defendant shall be required to refund or offset any overcharge. Concur—Tom, J.P., Mazzarelli, Abdus-Salaam and Feinman, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/4390808/ | MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be
Apr 25 2019, 9:52 am
regarded as precedent or cited before any
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Alan K. Wilson Curtis T. Hill, Jr.
Public Defender Attorney General of Indiana
Muncie, Indiana
Marjorie Lawyer-Smith
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
In the Matter of J.L., III, a Child April 25, 2019
Alleged to be a Delinquent Court of Appeals Case No.
Child, 18A-JV-2529
Appellant-Respondent, Appeal from the Delaware Circuit
Court
v. The Honorable Amanda Yonally,
Magistrate
State of Indiana, Trial Court Cause No.
Appellee-Petitioner 18C02-1808-JD-99
Baker, Judge.
Court of Appeals of Indiana | Memorandum Decision 18A-JV-2529 | April 25, 2019 Page 1 of 5
[1] J.L., III, appeals his delinquency adjudications for acts that would have been
Class A Misdemeanor Battery Resulting in Bodily Injury1 and Class A
Misdemeanor Dangerous Possession of a Firearm 2 had they been committed by
an adult. He argues that the evidence is insufficient to support the
adjudications. Finding the evidence sufficient, we affirm.
Facts
[2] On August 5, 2018, Danielle Fleming went to a house in Muncie, not knowing
that her son, J.L., would be there. Fleming and J.L. had been fighting recently.
When she arrived at the house, Fleming approached J.L. and yelled that she
was tired of him being disrespectful to her. J.L. pushed her away from him
with his forearm and hit her in the chest. When he turned away from her, she
slapped him on the face. She bear hugged J.L., who grabbed her arms, leaving
a bruise. Family members then stepped in to separate them.
[3] J.L. “stormed” outside after the altercation, making statements indicating he
was still very angry with his mother. Tr. Vol. II p. 10, 28. He returned into the
house and pulled an object that appeared to be a black gun handle from the
pocket of his shorts. It was apparent that he had a gun based on the handle and
the way his shorts were sagging. Someone called the police and J.L. fled the
scene but was later apprehended.
1
Ind. Code § 35-42-2-1(d).
2
Ind. Code § 35-47-10-5(a).
Court of Appeals of Indiana | Memorandum Decision 18A-JV-2529 | April 25, 2019 Page 2 of 5
[4] On August 13, 2018, the State filed a petition alleging that J.L. was a
delinquent child for committing acts that would have been Level 6 felony
intimidation, Class A misdemeanor battery resulting in bodily injury, and Class
A misdemeanor dangerous possession of a firearm, had they been committed
by an adult.
[5] A factfinding hearing took place on August 28, 2018. At the close of the State’s
case in chief, J.L. moved for judgment on the evidence with respect to the
intimidation and battery counts. The State conceded with respect to the
intimidation count, so the juvenile court granted J.L.’s motion as to
intimidation but denied it as to battery. At the conclusion of the evidence, the
juvenile court adjudicated J.L. a delinquent for the battery and possession of a
firearm counts. At a September 24, 2018, dispositional hearing, the juvenile
court ordered that J.L. be committed to the Logansport Juvenile Intake
Diagnostic Facility for an indeterminate period of time. J.L. now appeals.
Discussion and Decision
[6] J.L. argues that the evidence is insufficient to support the delinquency
adjudications. When reviewing a challenge to the sufficiency of evidence
supporting a delinquency adjudication, we do not reweigh the evidence or judge
witness credibility and will consider only the evidence favorable to the
judgment and the reasonable inferences supporting it. J.S. v. State, 114 N.E.3d
518, 520 (Ind. Ct. App. 2018), trans. denied. We will affirm if there is substantial
evidence of probative value from which a reasonable factfinder could conclude
Court of Appeals of Indiana | Memorandum Decision 18A-JV-2529 | April 25, 2019 Page 3 of 5
beyond a reasonable doubt that the juvenile engaged in the unlawful conduct.
Id.
[7] To support its allegation of delinquency for Class A misdemeanor battery
causing bodily injury, the State was required to prove beyond a reasonable
doubt that J.L. knowingly or intentionally touched Fleming in a rude, insolent,
or angry manner, resulting in bodily injury. I.C. § 35-42-2-1(d).
[8] At the factfinding hearing, Fleming testified that J.L. grabbed her arms during
their fight and that she had bruises as a result. Another witness testified that
she had observed bruising to Fleming’s arm, and a third witness testified that
J.L. had grabbed Fleming by the arm. Indeed, J.L. even admitted during his
testimony that he had grabbed Fleming’s arms and caused bruising. J.L.,
however, claimed that he had acted in self-defense. The juvenile court
acknowledged that there was conflicting evidence, but after assessing the
evidence and the credibility of the witnesses, resolved the conflict against J.L.
We cannot second guess this assessment. Given that we may only consider the
evidence most favorable to the adjudication, we find that the evidence is
sufficient to support the finding that J.L. committed an act that would have
been Class A misdemeanor battery had it been committed by an adult.
[9] To support its allegation of delinquency for Class A misdemeanor dangerous
possession of a firearm, the State was required to prove beyond a reasonable
doubt that J.L. knowingly, intentionally, or recklessly possessed a firearm for a
purpose not exempted from the statute. I.C. § 35-47-10-5(a).
Court of Appeals of Indiana | Memorandum Decision 18A-JV-2529 | April 25, 2019 Page 4 of 5
[10] At the factfinding hearing, a witness testified that when J.L. returned to the
house after the altercation with Fleming, she saw him pull a black object out of
his pocket that appeared to be a gun. She was sure that it was a gun after seeing
the handle and the way his shorts were sagging. She is familiar with weapons
because of her grandfather. The juvenile court explicitly found that the
witness’s testimony “was credible, that she is familiar with a firearm, . . . and
that she . . . believed that the defendant had a firearm in his possession on that
day.” Tr. Vol. II p. 76. The juvenile court noted J.L.’s explanation that it was
a cell phone, not a gun, in his pocket, but ultimately found the witness’s
testimony to be more credible. Given our standard of review, we find the
evidence sufficient to support the finding that J.L. committed an act that would
have been Class A misdemeanor dangerous possession of a gun had it been
committed by an adult.
[11] The judgment of the juvenile court is affirmed.
Najam, J., and Robb, J., concur.
Court of Appeals of Indiana | Memorandum Decision 18A-JV-2529 | April 25, 2019 Page 5 of 5 | 01-03-2023 | 04-25-2019 |
https://www.courtlistener.com/api/rest/v3/opinions/5902576/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Feldman, J.), rendered November 14, 1984, convicting him of robbery in the first degree (two counts), upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
The robbery in this case was committed by five men, four of whom were arrested. Three of those arrested—the defendant, Alonzo Brown and Ivan Paris—were tried together. After his arrest, Paris made a statement to the police implicating himself and Brown. The trial court, over the defendant’s objection, redacted those portions of Paris’s statement naming the codefendant Brown and replaced his name with the words "another male”. Paris did not testify. The defendant contends that the holding of Bruton v United States (391 US 123) prohibited the introduction of Paris’s redacted statement in that the jury could have inferred that the defendant was the "other male”.
We find that the introduction of the redacted statement does not warrant reversal. It was not facially incriminating, and proper limiting instructions were given to the jury concerning the use of the codefendant’s statement as evidence against the other defendants (Richardson v Marsh, 481 US —, 107 S Ct 1702). Moreover, in this case, the phrase "another male” did not necessarily refer to the defendant. Even assuming that the jury disregarded the court’s instructions, they could have interpreted that phrase as referring to the codefendant Brown or to the unapprehended fifth robber. Nothing in the redacted statement pointed to the defendant rather than the others. Indeed, Paris’s statement was so filled with confusing references to "another male,” "two other males” and "two guys with guns” that it would have been difficult for the jury to make a connection between these phrases and any of the defendants. Thus, under the circumstances of this case and in light of the court’s clear and unequivocal instructions, it is unlikely that the jury v^suld have inferred that the phrase "another man” implicated the defendant. Accordingly, the defendant was not deprived of his right to confront and cross-examine a witness against him (see, Richardson v Marsh, supra, at —, at 1709; see also, People v Wise, 135 AD2d 593 [no prejudice resulted from the redaction of the defendant’s statement changing "they” to "I”]).
Furthermore, assuming that the redacted statement should *724not have been admitted, the error was harmless beyond a reasonable doubt (see, People v Hendrix, 44 NY2d 658; People v Macy, 92 AD2d 553, 554). The robbery victim, who had ample opportunity to view his assailants under good viewing conditions, identified the defendant as one of the robbers. The defendant was also fully implicated in this crime by the testimony of the coperpetrator, Payne. Much of Payne’s testimony was corroborated by the testimony of another eyewitness and of the victim’s brother who pursued some of the perpetrators after the crime. Because there is no reasonable possibility that the alleged error contributed to the defendant’s conviction, it was harmless and reversal is not warranted (see, People v Pelow, 24 NY2d 161, 167; People v Sheffield, 118 AD2d 882, 883, lv denied 68 NY2d 773).
Finally, because the statement was properly admitted into evidence, the prosecutor’s comments on summation referring to the statement were proper. The prosecutor’s comments did not have the effect of undermining the limiting instructions given to the jury (cf., Richardson v Marsh, supra, at —, at 1709).
We have reviewed the defendant’s remaining claims, including those raised in his pro se supplemental brief, and find them to be without merit. Kunzeman, J. P., Kooper, Spatt and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902577/ | Appeal by the defendant from three judgments of the County Court, Suffolk County (Mazzei, J.), all rendered May 25, 1983, convicting him of robbery in the second degree under indictment No. 2220/82, upon his plea of guilty, of robbery in the first degree under indictment No. 2390/82, upon his plea of guilty, and robbery in the first degree under indictment No. 2391/82, upon a jury verdict, and imposing sentences.
Ordered that the judgments are affirmed.
With regard to indictment No. 2391/82, the defendant contends that the testimony of the complaining witness, the sole witness to the robbery, and his iderffcification of the defendant as the perpetrator of the robbery were incredible and that the verdict was, therefore, against the weight of the evidence. We disagree.
The jury’s determination of credibility, as well as the weight to be accorded to the evidence presented should not be disturbed on appeal unless clearly unsupported by the record (see, People v Garafolo, 44 AD2d 86). A review of the record *725reveals that the jury properly accorded little weight to the minor discrepancies in the complaining witness’s testimony as brought out on cross-examination and chose to credit his testimony, including his identification of the defendant. Therefore, upon the exercise of our factual review power, we are satisfied that the verdict was not against the weight of the evidence (see, CPL 470.15 [5]).
We have examined the defendant’s remaining contention and find it to be without merit. Brown, J. P., Rubin, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902579/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Greenberg, J.), rendered December 16, 1986, convicting him of robbery in the first degree and attempted robbery in the first degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
Viewing the evidence in the light most favorable to the prosecution, we conclude that it was legally sufficient to establish the defendant’s guilt (see, People v Contes, 60 NY2d 620; People v Androvett, 135 AD2d 640). Moreover, upon the exercise of our factual review power, and recognizing the role of the jury in assessing the credibility and determining the weight to be afforded to a particular witness’s testimony, we are also satisfied that the jury’s verdict was not against the weight of the evidence (see, CPL 470.15 [5]).
The critical issue in this case turned on the credibility of the witnesses. By its verdict, the jury apparently credited the eyewitnesses’ testimony and accorded it great weight, while it rejected that of the defendant. Although the defendant emphasizes certain inconsistencies in the eyewitnesses’ testimony, the evidence in the record indicates that the witnesses unequivocally identified the defendant as one of the perpetrators of the crimes and each of them described him as armed with a rifle. Weighing the relative probative force of the conflicting testimony and the relative strength of the conflicting inferences that may be drawn, on this record we find no basis to set aside the verdict.
Additionally, although certain questions posed by the prosecutor during the cross-examination of the defendant were improper, we find, contrary to the defendant’s contentions, that he was not deprived of a fair trial as a result thereof. In this regard, we note that the defense counsel’s objections to the questions in issue were promptly sustained by the trial *726court, that the defendant, by virtue of the trial court’s rulings, never responded to the questions, and that immediate curative instructions were issued by the court which were later reiterated during the final charge to the jury (cf., People v Smalls, 94 AD2d 777).
Finally, we find no reason to disturb the court’s exercise of its discretion in imposing sentence against the defendant. Thompson, J. P., Brown, Fiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902617/ | Judgment, Supreme Court, New York County (Laura A. Ward, J.), rendered on or about September 13, 2010, unanimously affirmed.
Application by appellant’s counsel to withdraw as counsel is granted (see Anders v California, 386 US 738 [1967]; People v Saunders, 52 AD2d 833 [1976]). We have reviewed this record and agree with appellant’s assigned counsel that there are no non-frivolous points which could be raised on this appeal.
Pursuant to Criminal Procedure Law § 460.20, defendant may apply for leave to appeal to the Court of Appeals by making application to the Chief Judge of that Court and by submitting such application to the Clerk of that Court or to a Justice of the Appellate Division of the Supreme Court of this Department on reasonable notice to the respondent within 30 days after service of a copy of this order.
Denial of the application for permission to appeal by the judge or justice first applied to is final and no new application may thereafter be made to any other judge or justice. Concur— Friedman, J.P, DeGrasse, Richter, Abdus-Salaam and Feinman, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902580/ | Appeal by the defendant from a judgment of the Supreme Court, Westchester County (Dachenhausen, J.), rendered September 24, 1985, convicting him of criminal possession of a controlled substance in the third degree, upon his plea of guilty, and imposing sentence.
Ordered that the judgment is affirmed.
The defendant knowingly and voluntarily entered a plea of guilty prior to a court-ordered Huntley hearing on that branch of his omnibus motion which was to suppress statements he made to the police. Furthermore, the defendant expressly consented to the withdrawal of any undecided motions during the plea allocution. Consequently, the defendant has forfeited the right to appellate review of his contention that the statements he made to the police should have been suppressed as violative of his right to counsel (see, People v Fernandez, 67 NY2d 686; People v Thomas, 74 AD2d 317, affd 53 NY2d 338).
The defendant’s claim that he was not afforded the effective assistance of trial counsel is based largely on matters which are dehors the record, and, thus, that claim is not reviewable on direct appeal (see, People v Robinson, 122 AD2d 173, lv denied 68 NY2d 1003; People v Wolcott, 111 AD2d 943). The appropriate remedy is a postconviction motion pursuant to CPL 440.10, provided the statutory requirements are met (CPL 440.30; see, People v Brown, 45 NY2d 852; People v Wolcott, supra). Insofar as we are able to review his ineffective assistance claim, we find that defense counsel’s performance amply met the standard of meaningful representation. A tactical decision by defense counsel to forego pretrial motions to suppress statements made by the defendant at the time of arrest when an advantageous plea bargain has been struck, as here, may not be attacked on appeal and labeled ineffective assistance of counsel (see, People v Lewis, 116 AD2d 778, lv denied 67 NY2d 885).
Since the defendant was sentenced to the minimum permissible sentence as a second felony offender (Penal Law § 70.06 *727[b]; [4] [b]), the sentence imposed cannot be considered unduly harsh or excessive so as to constitute an abuse of discretion (see, People v Brown, 46 AD2d 255).
Lastly, we find defendant’s contention, asserted in his pro se supplemental brief, that he was deprived of the effective assistance of appellate counsel, to be without merit. Brown, J. P., Rubin, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902582/ | Order, Supreme Court, New York County (Richard D. Carruthers, J.), entered on or about March 2, 2011, which, inter alia, reduced a count charging criminal possession of a weapon in the second degree to criminal possession of a weapon in the third degree, unanimously reversed, on the law, and the charge of second-degree weapon possession is reinstated. Appeal from order, same court and Justice, entered on or about June 15, 2011, which effectively granted reargument and, upon reargument, adhered to its March 2, 2011 order, unanimously dismissed as academic. Appeal from order, same court and Justice, entered on or about March 10, 2011, unanimously dismissed as nonappealable.
*412The court erred in reducing the charge to third-degree weapon possession on the basis of the “home or place of business” exception (Penal Law § 265.03 [3]). The indictment properly charged defendant with second-degree possession, since Penal Law § 265.03 (3), by referencing Penal Law § 265.02 (1), criminalizes the possession of a loaded firearm, even in the home, where a defendant has previously been convicted of any crime (see People v Hughes, 83 AD3d 960 [2d Dept 2011], lv granted 19 NY3d 961 [2012]). The People properly charged the prior conviction by way of a special information (see CPL 200.60), and defendant’s arguments to the contrary are without merit. Concur—Friedman, J.P, DeGrasse, Richter, Abdus-Salaam and Feinman, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/4415112/ | Opinion issued July 9, 2019
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-18-00661-CV
———————————
COURTNEY SANDERS, INDIVIDUALLY, AND AS DEPENDENT
ADMINISTRATOR OF THE ESTATE OF WILLIAM PAUL BROWN,
Appellant
V.
CHARLOTTE HATHAWAY, Appellee
On Appeal from the 239th District Court
Brazoria County, Texas
Trial Court Case No. 87060-CV
MEMORANDUM OPINION
Appellant Courtney Sanders, Individually, and as Dependent Administrator
of the Estate of William Paul Brown, appeals from the trial court’s order granting
summary judgment in favor of appellee, Charlotte Hathaway, on Sanders’s causes
of action for common law fraud, fraudulent inducement, breach of fiduciary duty,
and to set aside contracts. In two issues, Sanders contends that the trial court erred
in granting summary judgment on her claims because (1) a fact issue exists with
regard to her claims of lack of mental capacity and undue influence and (2) the
discovery rule and fraudulent concealment doctrine tolled the accrual of her causes
of action. We affirm.
Background
Sanders and Hathaway are sisters and the daughters of William Paul Brown.
Brown died on September 10, 2010.
On June 10, 2016, Sanders filed suit against Hathaway asserting causes of
action for conversion, tortious interference with inheritance rights, fraudulent
inducement, common law fraud, breach of fiduciary duty. Sanders also sought to
set aside any distributions or transfers of, or change of beneficiary designations
regarding, real or personal property owned by Brown after January 2009 based on
Brown’s alleged lack of mental capacity to contract and undue influence exerted
over him by Hathaway. On November 16, 2016, Sanders filed her first amended
petition, omitting her conversion claim.
2
On November 3, 2017, Hathaway filed her first no-evidence motion for
summary judgment and second traditional motion for summary judgment.1 Sanders
filed her response to the motions on November 21, 2017. The summary judgment
evidence before the trial court, which included the transcripts of Sanders’s and
Hathaway’s depositions, Hathaway’s affidavit, certified copies of the deeds, and
Brown’s medical records, showed the following:
• Prior to his death, Brown lived alone in a trailer on his property.
Hathaway lived in a nearby mobile home on Brown’s property and
Sanders lived more than 300 miles away.
• Brown had a long history of heavy alcohol use and suffered from
jaundice and cirrhosis of the liver. In addition to taking the pain
medication, Darvon, Brown took Oxycontin during a two-week period
in April or May 2010. When the Oxycontin caused him to hallucinate,
Brown stopped taking the medication.
• On March 17, 2010, approximately six months before he died, Brown
changed the beneficiary designations on three of his four insurance
policies, naming Hathaway as sole beneficiary (“beneficiary changes”).
On his fourth policy, Sanders and Hathaway remained co-beneficiaries.
• On March 17, 2010, Brown also executed four warranty deeds
transferring his real property to Hathaway (“deeds”). The deeds, which
were signed and notarized, were recorded in the property records of
Brazoria County.
• Five days later, on March 22, 2010, Brown executed documents at his
financial institution, the Associated Credit Union, making his checking,
savings, and share certificates accounts payable on death to Hathaway
1
Hathaway previously filed a traditional motion for summary judgment which was
denied on January 24, 2017.
3
(“payable on death accounts”). The beneficiary changes, deeds, and
payable on death accounts disposed of all of Brown’s property except
for household furnishings and personal effects.
• Sanders typically visited Brown four times a year and, in 2010, visited
him twice. According to Sanders, Brown was able to care for himself,
including feeding and dressing himself.
• In 2010, Hathaway visited Brown every day for approximately two
hours, ensured that he took his medication, accompanied him to his
doctor visits, made sure he had groceries, and occasionally cooked for
him.
• When several of his friends passed away, Brown told Hathaway that he
wanted to get his legal affairs in order. Brown, who could not type, sat
next to Hathaway and gave her instructions while she created a
declaration of trust and durable power of attorney using a will maker
computer program. It is undisputed that the trust was never funded.
• On September 10, 2010, Brown died. On September 11, 2010,
Hathaway told Sanders that their father had passed away.
• On September 12, 2010, two days after Brown’s death, Hathaway told
Sanders that Brown did not have much when he passed away, and that
what little remained he left to Hathaway in a trust.
• Sanders knew that she and Hathaway were to receive $10,000 each in
life insurance proceeds but she did not know anything about Brown’s
financial situation. Sanders also knew prior to Brown’s death that he
had some property, but she did not know the nature and extent of it.
• In March 2014, Sanders learned from her uncle that Brown had assets
worth approximately $1,000,000 before he died.
• On June 6, 2014, Sander’s attorney sent a letter to Hathaway requesting
documentation concerning Brown’s deed transfers, beneficiary
designations on his life insurance policies, and bank accounts.
4
• On September 9, 2014, Sanders applied for the administration of
Brown’s estate.
Following a hearing, the trial court granted Hathaway’s no-evidence and
traditional summary judgment motions on June 26, 2018. On July 25, 2018, Sanders
filed a motion for new trial which was overruled by operation of law. This appeal
followed.
Discussion
On appeal, Sanders contends that the trial court erred in granting summary
judgment on her claims because (1) a fact issue exists with regard to her claims of
lack of mental capacity and undue influence, (2) the discovery rule and doctrine of
fraudulent concealment tolled the accrual of her causes of action, and (3) the
evidence is sufficient to create a fact issue on her claims of common law fraud and
breach of fiduciary duty.
A. Standard of Review
We review a trial court’s grant of summary judgment de novo. Travelers Ins.
Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). When reviewing a summary
judgment motion, we must (1) take as true all evidence favorable to the nonmovant
and (2) indulge every reasonable inference and resolve any doubts in the
nonmovant’s favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.
2005) (citing Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.
2003)). If a trial court grants summary judgment without specifying the grounds for
5
granting the motion, we must uphold the trial court’s judgment if any one of the
grounds in the motion is meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d
145, 148 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).
In a traditional summary judgment motion, the movant has the burden to show
that no genuine issue of material fact exists and that the trial court should grant
judgment as a matter of law. TEX. R. CIV. P. 166a(c); KPMG Peat Marwick v.
Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). A defendant
moving for traditional summary judgment must conclusively negate at least one
essential element of each of the plaintiff’s causes of action or conclusively establish
each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d
910, 911 (Tex. 1997).
In a no-evidence motion for summary judgment, the movant asserts that there
is no evidence to support an essential element of the nonmovant’s claim on which
the nonmovant would have the burden of proof at trial. See TEX. R. CIV. P. 166a(i);
Hahn v. Love, 321 S.W.3d 517, 523–24 (Tex. App.—Houston [1st Dist.] 2009, pet.
denied). The burden then shifts to the nonmovant to present evidence raising a
genuine issue of material fact as to each of the elements specified in the motion.
Hahn, 321 S.W.3d at 524; Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.
2006).
6
Where, as here, a trial court grants a summary judgment involving both
no-evidence and traditional grounds, we ordinarily address the no-evidence grounds
first. See PAS, Inc. v. Engel, 350 S.W.3d 602, 607 (Tex. App.—Houston [14th Dist.]
2011, no pet.). However, if we conclude that we must affirm the trial court’s
summary judgment ruling on traditional grounds, we need not review the
no-evidence grounds. Davis-Lynch, Inc. v. Asgard Techs., LLC, 472 S.W.3d 50, 59
(Tex. App.—Houston [14th Dist.] 2015, no pet.); Wilkinson v. USAA Fed. Sav. Bank
Trust Servs., No. 14–13–00111–CV, 2014 WL 3002400, at *5 (Tex. App.—Houston
[14th Dist.] July 1, 2014, pet. denied) (mem. op.) (affirming summary judgment on
traditional grounds, without considering alternative no-evidence grounds, where
evidence conclusively proved defendants were entitled to judgment as matter of
law).
“A defendant moving for summary judgment on the affirmative defense of
limitations bears the burden of conclusively establishing the elements of that
defense.” Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833–34 (Tex. 2018)
(citing KPMG Peat Marwick, 988 S.W.2d at 748). “This includes conclusively
establishing when the cause of action accrued.” Id. “In cases in which the plaintiff
pleads the discovery rule, the defendant moving for summary judgment on
limitations bears the additional burden of negating the rule.” Id. at 834; Childs v.
Haussecker, 974 S.W.2d 31, 44 (Tex. 1998). Defendants may do this by either
7
conclusively establishing that (1) the discovery rule does not apply, or (2) if the rule
applies, the summary judgment evidence negates it. KPMG Peat Marwick, 988
S.W.2d at 748; Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223–24 (Tex. 1999).
B. Sanders’s Claim to Set Aside the Documents
In her first amended petition, Sanders sought to set aside (1) the March 17,
2010 changes to the beneficiary designations on three of Brown’s four insurance
policies naming Hathaway as sole beneficiary; (2) the March 17, 2010 execution of
four warranty deeds transferring his real property to Hathaway; and (3) the March
22, 2010 execution of documents making Brown’s checking, savings, and share
certificates accounts payable on death to Hathaway. Sanders argues that these
documents are invalid because (1) Brown lacked mental capacity at the time he
executed the documents and (2) Hathaway exerted undue influence over Brown.
In her summary judgment motion, Hathaway argued that (1) there was no
evidence that Brown lacked the mental capacity to execute the documents, and that
the evidence conclusively established as a matter of law that he did not lack the
mental capacity to do so, and (2) there was no evidence that she exerted undue
influence over Brown at the time he executed the documents. Hathaway further
argued that Sanders’s claims of mental incapacity and undue influence were barred
by the applicable statute of limitations, and that neither the discovery rule nor a claim
of fraudulent concealment tolled limitations on her claim to set aside the contracts.
8
In her summary judgment response, Sanders argued that there is sufficient
evidence to create a fact issue regarding whether Brown lacked the mental capacity
to execute the documents and whether Hathaway exerted undue influence at the time
of execution. She also argued that her claim seeking to set aside the documents
based on lack of mental incapacity and undue influence is not barred by the statute
of limitations because the discovery rule and fraudulent concealment doctrine tolled
their accrual. We address the limitations argument first.
1. Statute of Limitations
“It is settled law in Texas that a contract executed by a person who lacks
mental capacity is voidable, not void.” Cole v. McWillie, 464 S.W.3d 896, 900 (Tex.
App.—Eastland 2015, pet. denied) (citing Williams v. Sapieha, 61 S.W. 115, 116
(1901)); see also Kinsel v. Lindsey, 526 S.W.3d 411, 419 (Tex. 2017) (“Documents
executed by one who lacks sufficient legal or mental capacity may be avoided.”). A
cause of action to void a contract is personal and belongs to the parties to a contract.
See Wells v. Dotson, 261 S.W.3d 275, 284 (Tex. App.—Tyler 2008, no pet.). The
right to disaffirm a contract survives the death of an incompetent person and
descends to his heirs or his personal representative. See McWillie, 464 S.W.3d at
899–900 (citing Bennett v. Romos, 252 S.W.2d 442, 448–49 (1952)).
The right to disaffirm is subject to a four-year statute of limitations. TEX. CIV.
PRAC. & REM. CODE § 16.051; McWillie, 464 S.W.3d at 900; Dyer v. Dyer, 616
9
S.W.2d 663, 665 (Tex. App.—Corpus Christi 1981, writ dism’d) (“[T]he four-year
statute of limitations governs voidable deeds.”). Texas Civil Practice and Remedies
Code section 16.062 suspends the running of an applicable limitations period for
twelve months after the death of a person against whom or in whose favor there may
be a cause of action. See TEX. CIV. PRAC. & REM. CODE § 16.062(a). Thus, Sanders
had to bring her cause of action to set aside the contracts executed by Brown no later
than five years from the date of their execution.
Here, even if the beneficiary designation changes, deed transfers, and
accounts payable on death were voidable because Brown lacked the mental capacity
to execute them or was subjected to undue influence, the right to disaffirm those
contracts ran on March 17, 2015 and March 22, 2015—five years from the March
17, 2010 and March 22, 2010 execution dates. Sanders did not file her lawsuit until
June 10, 2016.
2. Discovery Rule
Sanders argues that her claim to set aside the contracts is not barred because
the discovery rule applies and deferred accrual of her claim.
Ordinarily, a cause of action accrues when “a wrongful act causes a legal
injury, even if the fact of injury is not discovered until later, and even if all resulting
damages have not yet occurred.” Sw. Energy Prod. Co. v. Berry–Helfand, 491
S.W.3d 699, 721 (Tex. 2016). Absent some exception, injuries that arise or develop
10
after the legal injury are still deemed to have accrued on the same date as the legal
injury that caused them. See Pasko, 544 S.W.3d at 834.
The discovery rule is a very limited exception to statutes of limitations. See
Computer Assocs. Int’l Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996). If the
discovery rule applies, it only defers accrual of a cause of action until the plaintiff
knew or in the exercise of reasonable diligence should have known of the wrongful
act and resulting injury, not when the plaintiff knows the specific nature of each
wrongful act that may have caused the injury. Pasko, 544 S.W.3d at 834; KPMG
Peat Marwick, 988 S.W.2d at 749; see also ExxonMobil Corp. v. Lazy R Ranch, LP,
511 S.W.3d 538, 542–43 (Tex. 2017) (“[A] claim accrues when injury occurs, not
afterward when the full extent of the injury is known.”). A plaintiff need not need
to know that she has a cause of action; rather, she must only know “the facts giving
rise to the cause of action.” Computer Assocs. Int’l, 918 S.W.2d at 457.
The rule applies to classes of claims in which the alleged wrongful act and
resulting injury were both inherently undiscoverable at the time they occurred and
may be objectively verified. See S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996). An
injury is inherently undiscoverable if it is the type of injury that is not generally
discoverable by the exercise of reasonable diligence. HECI Expl. Co. v. Neel, 982
S.W.2d 881, 886 (Tex. 1998). That is, an injury is not inherently undiscoverable if
it could be discovered through the exercise of reasonable diligence. See BP Am.
11
Prod. Co. v. Marshall, 342 S.W.3d 59, 66 (Tex. 2011). To be objectively verifiable,
a claim must be subject to demonstration by direct, physical evidence. See S.V., 933
S.W.2d at 7.
In her summary judgment motion, Hathaway argued that Sanders, by her own
admission, knew all of the facts that gave rise to her cause of action to set aside the
beneficiary designation changes, deed transfers, and accounts made payable on death
by September 12, 2010. In support of her argument, Hathaway pointed to Sanders’s
testimony that she knew, prior to Brown’s death, that he owned some property, he
was sick, he was an alcoholic that drank every day, he was taking pain medication,
he had experienced hallucinations in the months before he died, and that Hathaway
was his primary caretaker in the year before he died. Sanders also testified that, two
days after Brown’s death, she learned from Hathaway that their father did not have
much when he passed away, and that other than fifty percent of one life insurance
policy, he left what remained of his assets to Hathaway.
In her summary judgment response and on appeal, Sanders admits that she
knew Brown had property but that she “had absolutely no idea of the nature and
extent of such property.” She argues that she “did not know and could not have
known exactly when the beneficiary designations and bank accounts were changed,
or when the property was transferred.” However, the summary judgment evidence
demonstrates that Sanders only began investigating the extent and nature of Brown’s
12
assets and later filed suit after she learned from an uncle that Brown had assets worth
approximately $1,000,000 before he died. Sanders knew of her alleged injury, i.e.,
that Brown gave almost all of his property to Hathaway and left her virtually nothing,
on September 12, 2010, two days after Brown died. It is the fact of the alleged
injury—that Hathaway kept property that Sanders may have been entitled to—that
started the running of the statute of limitations. See, e.g., Johnson v. Walker, 824
S.W.2d 184, 187 (Tex. App.—Fort Worth 1991, writ denied) (“The fact that a party
may not immediately be able to determine the total amount of damages it may suffer
does not toll the statute of limitations.”). Once Sanders knew of facts that might
constitute some injury, the statute of limitations began to run even if she did not yet
know “the specific cause of the injury; the party responsible for it; the full extent of
it; or the chances of avoiding it.” Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d
194, 207 (Tex. 2010). That Sanders did not know the extent of her alleged injury,
i.e., the dollar value of Brown’s assets, is irrelevant to determining when the statute
of limitations began to run. Yalamanchili v. Mousa, 316 S.W.3d 33, 38 (Tex. App.—
Houston [14th Dist.] 2010, pet. denied) (“[A]ccrual occurs upon notice of injury,
even if the claimant does not yet know the full extent of damages.”) (quoting
Schneider Nat’l Carriers, Inc. v. Bates, 147 S.W.3d 264, 270 (Tex. 2004)). Thus,
applying the discovery rule, the four-year statute of limitations (plus the additional
year due to Brown’s death) began to run from the date Sanders knew of her legal
13
injury, i.e. September 12, 2010. The statute of limitations ran by September 12,
2015, nine months before Sanders filed her suit on June 10, 2016.
3. Fraudulent Concealment
Sanders also argues the doctrine of fraudulent concealment tolled the statute
of limitations on her cause of action to set aside the documents.
The doctrine of fraudulent concealment is based on the doctrine of equitable
estoppel. Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex. 1981). Fraudulent
concealment estops a defendant from relying on the statute of limitations as an
affirmative defense when the defendant owes a duty to disclose but fraudulently
conceals the existence of a cause of action. Id. “A party asserting fraudulent
concealment must establish an underlying wrong, and that ‘the defendant actually
knew the plaintiff was in fact wronged, and concealed that fact to deceive the
plaintiff.’” BP Am. Prod. Co., 342 S.W.3d at 67 (quoting Earle v. Ratliff, 998
S.W.2d 882, 888 (Tex. 1999); Weaver v. Witt, 561 S.W.2d 792, 793 (Tex. 1977) (per
curiam)); see Lilly v. Tex. Dep’t of Crim. Justice, 472 S.W.3d 411, 420 (Tex. App.—
Houston [14th Dist.] 2015, no pet.) (“The elements of fraudulent concealment are:
(1) existence of an underlying tort; (2) the defendant’s knowledge of the tort; (3) the
defendant’s use of deception to conceal the tort; and (4) the plaintiff’s reasonable
reliance on the deception.”). A party asserting fraudulent concealment as an
affirmative defense to the statute of limitations bears the burden to raise it in
14
response to the summary judgment motion and to come forward with summary
judgment evidence raising a fact issue on each element of the defense. KPMG Peat
Marwick, 988 S.W.2d at 749.
“Fraudulent concealment only tolls the running of limitations until the fraud
is discovered or could have been discovered with reasonable diligence.” BP Am.
Prod., 342 S.W.3d at 67. If the fraudulent concealment is based on a fraudulent
representation by the defendant, the plaintiff must demonstrate that reliance on that
representation was reasonable. See id. at 68. Reliance on a fraudulent representation
“is not reasonable when information revealing the truth could have been discovered
within the limitations period.” Id.
In her summary judgment response, Sanders argued that there was sufficient
evidence of each element of fraudulent concealment because (1) Hathaway told her
facts that were not true two days after their father died, (2) when Sanders began
investigating a potential cause of action against Hathaway, Hathaway knowingly and
intentionally refused to provide any information, (3) and Hathaway did so with a
fixed purpose of concealing the wrongs she committed before their father’s death.
Taking Sanders’s factual allegations as true, see Valence Operating Co., 164 S.W.3d
at 661, they do not raise a fact issue as to the existence of an underlying wrong.
Sanders’s assertions that Hathaway told her facts that were not true, refused to
provide her with information, and did so with the purpose of concealing her alleged
15
wrongdoing might provide the element of deception, but they are not evidence of an
underlying wrong. See Lazy R Ranch, 511 S.W.3d at 544 (concluding fraudulent
concealment doctrine did not toll limitations period on ranch owners’ claim of
surface contamination against petroleum company where there was no evidence of,
among other things, misconduct on company’s part with respect to spills on property
or at abandoned sites).
In sum, Sanders’s cause of action to set aside Brown’s beneficiary designation
changes, deed transfers, and making of accounts payable on death ran on March 17,
2015 and March 22, 2015—five years from the March 17, 2010 and March 22, 2010
execution dates. Applying the discovery rule, Sanders’s claim began to run from the
date Sanders knew of her legal injury, i.e. September 12, 2010, and, under the
applicable four-year statute of limitations plus the additional year due to Brown’s
death, her claim ran by September 12, 2015. Finally, the doctrine of fraudulent
concealment did not toll limitations on Sanders’s claim because there is no evidence
in the record that Brown’s actions in transferring assets to Hathaway were the result
of wrongful conduct on Hathaway’s part. We conclude that the trial court did not
err in granting summary judgment on Sanders’s claim to set aside the documents.
C. Sanders’s Fraud Claim
Sanders contends that the trial court erred in granting summary judgment on
her claim of common law fraud because the evidence is sufficient to raise a fact issue
16
on all of the elements of her claim. Hathaway argues that Sanders has presented no
evidence to support her fraud claim.
To prove fraud, Sanders must establish that (1) a material misrepresentation
was made; (2) the representation was false; (3) when the representation was made,
the speaker either knew it was false or made the statement without knowledge of the
truth; (4) the speaker intended the representation to be acted upon; (5) the party acted
in reliance upon the representation; and (5) the party suffered injury. Zorrilla v.
Aypco Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015) (quoting Formosa Plastics
Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998)).
In her summary judgment response, Sanders argued that the evidence showed that
(1) Hathaway told Sanders that Brown had left his entire estate to Hathaway in a
trust but then failed and refused to disclose the trust documents to her; (2)
Hathaway’s representation was false because the purported trust was never funded;
(3) Hathaway intended Sanders to rely on the representation and not take action
regarding Brown’s estate; (4) Sanders justifiably relied on Hathaway’s
representation and did not take action until much later; and (5) Sanders suffered
injury because she did not obtain any part of her father’s estate to which she is justly
entitled.
A material representation is one which “a reasonable person would attach
importance to and would be induced to act on . . . in determining his choice of actions
17
in the transaction in question.” Italian Cowboy Partners, Ltd. v. Prudential Ins. Co.
of Am., 341 S.W.3d 323, 337 (Tex. 2011) (quoting Smith v. KNC Optical, Inc., 296
S.W.3d 807, 812 (Tex. App.—Dallas 2009, no pet.)); Samson Lone Star Ltd. P’ship
v. Hooks, 497 S.W.3d 1, 13–14 (Tex. App.—Houston [1st Dist.] 2016, pet. denied).
Hathaway’s representation to Sanders—that Brown conveyed his entire estate to
Hathaway through a trust rather than through beneficiary designations changes to
his insurance policy, deed transfers, and making his accounts payable on death—is
not a material misrepresentation. It is undisputed that Brown conveyed his property
to Hathaway—that he did so through beneficiary changes, deed transfers, and
making his accounts payable on death, rather than through the instrument of a trust,
is immaterial. Further, Sanders has not shown how she was injured as a result of the
representation. Her alleged injury, i.e., that she did not obtain any part of her father’s
estate to which she is justly entitled, was not caused by Hathaway’s representation
that Brown conveyed his estate to her through a trust. Rather, it is the fact that
Brown left his property to Hathaway in the first place that caused her injury, if any.
Because there is no evidence of a material representation or injury, we
conclude that the trial court did not err in granting summary judgment on Sanders’s
common law fraud claim.
18
D. Sanders’s Fraudulent Inducement Claim
In her brief, Sanders states that Hathaway did not challenge Sanders’s claim
for fraudulent inducement. In her summary judgment motion, Hathaway argued that
Sanders’s cause of action for fraudulent inducement failed as a matter of law because
Sanders and Hathaway did not enter into a contract together and no cause of action
exists for general fraudulent inducement.
Fraudulent inducement is a distinct category of common-law fraud that shares
the same elements but involves a promise of future performance made with no
intention of performing at the time it was made. Zorrilla, 469 S.W.3d at 153. To
prevail in a fraudulent inducement claim, the plaintiff not only must establish all of
the elements of a fraud claim, but must establish those elements “as they relate to an
agreement between the parties.” Haase v. Glazner, 62 S.W.3d 795, 798–99 (Tex.
2001). Because we conclude that Sanders did not establish all of the elements of her
fraud claim, much less as they relate to an agreement with Hathaway, the trial court
properly granted summary judgment on this claim.
E. Sanders’s Breach of Fiduciary Duty Claim
Sanders contends that the trial court erred in granting summary judgment on
her claim of breach of fiduciary duty because the evidence is sufficient to raise a fact
issue on the elements of her claim.
19
To prove breach of fiduciary duty, Sanders must establish that (1) a fiduciary
relationship existed between the plaintiff and the defendant; (2) the defendant
breached her fiduciary duty; and (3) the breach resulted in injury to the plaintiff or
benefit to the defendant. Lundy v. Masson, 260 S.W.3d 482, 501 (Tex. App.—
Houston [14th Dist.] 2008, pet. denied). In her summary judgment response,
Sanders argued that the evidence showed that (1) an informal fiduciary duty existed
between Brown and Hathaway; (2) Hathaway breached her fiduciary duty to Brown
by transferring the entirety of Brown’s estate to herself; and (3) Hathaway’s breach
was detrimental to Brown and Sanders.
Contrary to Sanders’s assertion, there is no evidence that Hathaway
“transferred the entirety of Brown’s estate to herself.” The evidence shows that, on
March 17, 2010, Brown changed the beneficiary designations on three of his four
insurance policies to Hathaway but left Sanders and Hathaway as co-beneficiaries
under one of his policies. That same day, Brown also executed four warranty deeds
transferring his real property to Hathaway, and the deeds were signed and notarized
before a notary public. Five days later, on March 22, 2010, Brown went to his credit
union and executed documents in front of credit union employees to make his
checking, savings, and share certificated accounts payable on death to Hathaway.
This evidence shows that Brown, not Hathaway, distributed his property to
Hathaway.
20
Because Sanders has not produced any evidence showing that Hathaway
breached a fiduciary duty to Brown, summary judgment on her breach of fiduciary
duty claim was proper. 2 Accordingly, we overrule Sanders’s first and second issues.
Conclusion
We affirm the trial court’s judgment.
Russell Lloyd
Justice
Panel consists of Justices Lloyd, Kelly, and Hightower.
2
The trial court granted summary judgment on Sanders’s claim of tortious
interference with inheritance. The Texas Supreme Court recently held that
“[b]ecause existing law affords adequate remedies for the wrongs [tortious
interference with inheritance] would redress, and because the tort would conflict
with Texas probate law, we hold that there is no cause of action in Texas for
intentional interference with inheritance.” Archer v. Anderson, 556 S.W.3d 228,
229 (Tex. 2018). Presumably in light of Archer, on appeal Sanders does not
challenge the trial court’s grant of summary judgment on her tortious interference
with inheritance claim.
21 | 01-03-2023 | 07-10-2019 |
https://www.courtlistener.com/api/rest/v3/opinions/5902583/ | Appeal by the defendant from a judgment of the County Court, Suffolk County (Namm, J.), rendered February 26, 1985, convicting him of murder in the second degree, upon a jury verdict, and imposing sentence. The appeal brings up for review the denial, after a hearing, of *730that branch of the defendant’s omnibus motion which was to suppress statements he made to the police.
Ordered that the judgment is affirmed.
The hearing court did not err in denying the defendant’s motion to suppress the statements made by him to the police. The defendant was represented by an attorney in a bankruptcy proceeding that was unrelated to the homicide that the police were investigating. The right to counsel based on an individual’s representation in a pending proceeding does not extend to unrelated proceedings of a wholly civil nature (see, People v Lucarano, 61 NY2d 138, 145).
Upon our examination of the record herein, we find that the evidence, viewed in the light most favorable to the prosecution (see, People v Contes, 60 NY2d 620), was legally sufficient to establish the defendant’s guilt beyond a reasonable doubt. Upon the exercise of our factual review power, we are satisfied that the verdict of guilt was not against the weight of the evidence (CPL 470.15 [5]).
We have considered the defendant’s remaining contentions and find them to be either unpreserved for appellate review or without merit. Thompson, J. P., Brown, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902584/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Goldberg, J.), rendered May 22, 1986, convicting him of robbery in the second degree and grand larceny in the third degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
Prior to commencement of the trial, the People moved to amend the indictment to change the date of the robbery with which the defendant was charged from April 23, 1985 to April 22, 1985. CPL 200.70 permits the court to amend an indictment to correct a defect in the date provided the amendment does not change the theory of the prosecution and does not prejudice the defendant. We agree with the trial court that the defendant was not prejudiced by the amendment, and the motion to amend was properly granted. This case is distinguishable from People v Covington (86 AD2d 877), in that the defendant here had not served an alibi notice, the amendment was sought prior to commencement of the trial and the defendant was offered an adjournment to prepare a defense to the new date before the trial commenced. We find that the lack of an alibi notice and the defendant’s refusal of the offer *731of an adjournment undercut his contention that he was prejudiced because he had relied on an irrelevant alibi defense (see, e.g., People v Robinson, 119 AD2d 598, lv denied 68 NY2d 816).
Viewing the evidence in the light most favorable to the People (see, People v Contes, 60 NY2d 620), we find that the evidence was legally sufficient to sustain the defendant’s conviction. Moreover, in the exercise of our factual review power, we find that the verdict was not against the weight of the evidence (see, CPL 470.15 [5]). The complainant’s testimony established that he had an ample opportunity to view his assailant’s face during the incident. The inconsistencies in the complainant’s statements and the discrepancies between some aspects of his description of the assailant and the defendant’s physical appearance were placed before the jury and were resolved in the People’s favor. We find no reason to disturb that determination.
The defendant contends also that the court impermissibly permitted the People to bolster the complainant’s testimony. The rule which prohibits the bolstering of a witness’s testimony through evidence of prior consistent statements (see, People v McClean, 69 NY2d 426; People v Davis, 44 NY2d 269) is not applicable to the situation here. Defense counsel sought to introduce only one sentence from the complainant’s statement to police officers as an inconsistent statement. However, the court properly ruled that, for the purposes of clarification, the entire statement had to be admitted (cf., People v Torre, 42 NY2d 1036; People v Richardson, 127 AD2d 617, lv denied 69 NY2d 954).
Finally, the defendant’s contention that he was deprived of a fair trial by the prosecutor’s misconduct is without merit. Brown, J. P., Rubin, Fiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902836/ | Harvey, J.
Appeal from a judgment of the County Court of Sullivan County (Hanofee, J.), rendered January 27, 1986, upon a verdict convicting defendant of the crimes of grand larceny in the third degree, criminal possession of a forged instrument in the second degree, offering a false instrument for filing in the first degree and falsifying business records in the second degree.
Defendant stands convicted of several crimes related to her alleged fraudulent procurement of various public assistance benefits. In September 1984, defendant applied for public assistance on behalf of herself and her two minor children from the Sullivan County Department of Social Services. As part of the application process, defendant was required to provide certain information. She stated that she had not had any contact with her husband for over a year and that she did not know where he was located. She stated that she had been renting a trailer in Narrowsburg, Town of Cochecton, from a "Robert Markowitz”. In compliance with the Department’s request, she produced a rent receipt which purportedly verified this information. She was determined to be eligible for benefits and received $1,114 in public assistance and $452 in *930food stamps over a three-month period. A routine check with the State Department of Social Services raised suspicions of fraud. An ensuing investigation revealed that defendant resided at the International School for Krishna Consciousness (hereinafter ISKCON) in Lake Huntington, Town of Cochecton. ISKCON provided her and her family with free room and board. It was determined that defendant was not eligible for the public assistance and food stamps which she had received.
Defendant was subsequently indicted for the crimes of grand larceny in the third degree, criminal possession of a false instrument in the second degree, offering a false instrument for filing in the first degree and falsifying business records in the second degree. At trial, there was evidence that defendant had resided with her husband during the relevant period. There was also testimony indicating that no one by the name of Robert Markowitz owned property in the Town of Cochecton, that there was not a trailer where defendant had said she was living, and that the road where the trailer was supposedly located did not exist. Defendant was convicted on all counts of the indictment. She was sentenced to five years’ probation. This appeal followed.
Defendant alleges that the People failed to prove beyond a reasonable doubt that she committed the charged crimes. On appeal from a conviction after a jury trial, the evidence is viewed in the light most favorable to the People (People v Malizia, 62 NY2d 755, cert denied 469 US 932). Thus, if any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt, the conviction should, in the absence of other reversible error, be affirmed (see, People v Contes, 60 NY2d 620, 621). Here, a review of the trial evidence reveals that the People met their burden. For example, an officer of ISKCON testified that defendant and her husband were living at ISKCON during the relevant time. Another resident of ISKCON testified to seeing defendant, her husband and children receiving free meals at ISKCON. The Town Clerk for the Town of Cochecton stated that no one by the name Robert Markowitz owned land in the town. A State Police officer familiar with the area stated that he knew of neither a trailer nor a road named "Club Road” where the trailer was purportedly located. Even defendant’s testimony as to the existence of Robert Markowitz and the location of the trailer was vague. Accordingly, we conclude that the People’s proof was sufficient.
Defendant also argues that the People failed to demonstrate the nonexistence of the house trailer before the Grand Jury *931and, thus, that the indictment was defective. An order denying a motion to dismiss an indictment on the ground of insufficiency of Grand Jury evidence is not reviewable upon an appeal from an ensuing judgment of conviction which is supported by legally sufficient trial evidence (CPL 210.30 [6]; People v Lewis, 125 AD2d 918, 919). Here, County Court denied defendant’s motion to dismiss the indictment based upon the sufficiency of the evidence before the Grand Jury and, as discussed above, the evidence at trial was legally sufficient to sustain the jury’s finding of guilt. Hence, this argument by defendant is precluded from appellate review.
Next, defendant contends that certain conduct by the prosecuting attorney deprived her of a fair trial. The prosecuting attorney may have overstepped his role in the questioning of defendant on cross-examination about the veracity of prosecution witnesses and his remarks, during summation, about the credibility of certain witnesses (see, People v Barnes, 109 AD2d 179, 186; People v Lum, 102 AD2d 992). However, where this conduct was objected to by defense counsel, the objections were generally sustained and curative instructions followed. Upon review of the record, we conclude that the cumulative effect of the complained-of misconduct was not so egregious as to deprive defendant of a fair trial. And it is, of course, a fair trial, not a perfect one, to which a defendant is constitutionally entitled (Bruton v United States, 391 US 123, 135).
Defendant’s remaining contentions have been considered and found unpersuasive.
Judgment affirmed. Kane, J. P., Yesawich, Jr., Levine and Harvey, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902837/ | Weiss, J.
Appeal from a judgment of the County Court of Chemung County (Castellino, J.), rendered July 11, 1986, upon a verdict convicting defendant of the crime of arson in the second degree.
Defendant was charged in a single-count indictment with arson in the second degree, relating to a fire at 115 College Avenue in the City of Elmira, Chemung County, on January 25, 1986. The record shows that defendant, who had escaped from Elmira Psychiatric Center, spent the preceding night in the second-floor apartment of Dennis Rounds. When Rounds discovered the fire in his kitchen the next morning, defendant had already vacated the premises. Later that day, defendant signed a written confession at the Elmira City Police Department. Defendant’s motion to suppress the statement was *932denied and he was convicted as charged following a jury trial. An indeterminate sentence of 8 Vs to 25 years’ imprisonment was imposed.
On this appeal, defendant principally maintains that the People failed to establish a knowing and intelligent waiver of his Miranda rights. Initially, we observe that in his brief defendant does not challenge the denial of his suppression motion, but urges that the trial evidence failed to sustain a viable waiver. In any event, County Court concluded that the People satisfied their burden of establishing a knowing and intelligent waiver beyond a reasonable doubt and we perceive no basis to disturb this ruling (see, People v Shields, 125 AD2d 863, lv denied 69 NY2d 955; People v Love, 85 AD2d 799, affd 57 NY2d 998). At trial the prosecution introduced testimony from the interrogating officer that defendant understood the Miranda warnings rendered, read the warnings out loud and voluntarily signed the written waiver form after first initialing each specific warning. The interrogation lasted approximately 30 minutes, with no hint of coercion. Defendant, nonetheless, maintains that he was mentally incapable of waiving his constitutional rights, and emphasizes the testimony of Dr. David McGeorge, a clinical psychologist, who opined that defendant was, in fact, incapable of understanding or waiving these rights. In rebuttal the People produced Dr. Donald Lynn, the admitting physician at Elmira Psychiatric Center when defendant entered that facility on December 19, 1985. Dr. Lynn testified that defendant was informed of and comprehended his rights as a patient at the time of admittance, but did not render an opinion as to defendant’s mental capacity to waive his Miranda rights.* Considering the foregoing, we find that the question of whether defendant was mentally capable of waiving his Miranda rights was one of fact for the jury to resolve, and they were charged accordingly (see, People v Krom, 91 AD2d 39, 43, affd 61 NY2d 187). The jury was free to accept or reject the expert testimony presented (see, People v Levan, 85 AD2d 779, 781; People v Bell, 64 AD2d 785). Viewed in total, we find ample basis for the jury’s evident conclusion that a viable waiver was established.
Finally, given the fact that defendant knew the apartment house was occupied and yet deliberately set the fire, we perceive no abuse of discretion in the maximum sentence imposed (see, Penal Law § 70.02 [3] [a]; [4]).
*933Judgment affirmed. Mahoney, P. J., Weiss, Yesawich, Jr., Levine and Harvey, JJ., concur.
Dr. Lynn did render an affirmative opinion at the suppression hearing, but was precluded from doing so at trial. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902585/ | Order, Supreme Court, New York County (Richard D. Carruthers, J.), entered on or about March 2, 2011, which, inter alia, reduced a count charging criminal possession of a weapon in the second degree to criminal possession of a weapon in the third degree, unanimously reversed, on the law, and the charge of second-degree weapon possession is reinstated. Appeal from order, same court and Justice, entered on or about June 15, 2011, which effectively granted reargument and, upon reargument, adhered to its March 2, 2011 order, unanimously dismissed as academic. Appeal from order, same court and Justice, entered on or about March 10, 2011, unanimously dismissed as nonappealable.
*412The court erred in reducing the charge to third-degree weapon possession on the basis of the “home or place of business” exception (Penal Law § 265.03 [3]). The indictment properly charged defendant with second-degree possession, since Penal Law § 265.03 (3), by referencing Penal Law § 265.02 (1), criminalizes the possession of a loaded firearm, even in the home, where a defendant has previously been convicted of any crime (see People v Hughes, 83 AD3d 960 [2d Dept 2011], lv granted 19 NY3d 961 [2012]). The People properly charged the prior conviction by way of a special information (see CPL 200.60), and defendant’s arguments to the contrary are without merit. Concur—Friedman, J.P, DeGrasse, Richter, Abdus-Salaam and Feinman, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902586/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (G. Aronin, J.), rendered October 16, 1984, convicting her of criminal possession of a controlled substance in the first degree and criminal sale of a controlled substance in the third degree (two counts), upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
Based upon our review of the record we find that the search warrant specifically authorized the search of apartment four and the search was, therefore, proper.
We conclude that the trial court properly exercised its discretion in refusing to order the production of the confiden*732tial informant in view of the fact that he did not witness the actual sale on the first occasion nor was he physically present at the subsequent sales (see, People v Goggins, 34 NY2d 163, 169, 173, cert denied 419 US 1012; People v Forte, 123 AD2d 641, lv denied 69 NY2d 827; People v Younger, 118 AD2d 673, lv denied 68 NY2d 673).
We have reviewed the defendant’s remaining contention and find it to be without merit. Mangano, J. P., Bracken, Spatt and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902587/ | Appeal by the defendant from a judgment of the Supreme Court, Nassau County (O’Shaughnessy, J.), rendered September 23, 1985, convicting him of *733robbery in the first degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
When viewed in the light most favorable to the People, the evidence is legally sufficient to establish the element of intent beyond a reasonable doubt (see, People v Contes, 60 NY2d 620). Moreover, upon the exercise of our factual review power, we are satisfied that the verdict was not against the weight of the evidence (CPL 470.15 [5]).
The defendant further claims that error occurred when the jury observed him in a public corridor in handcuffs. This point was not preserved for appellate review and in any event, this apparently brief, inadvertent observation by the jury, on a single occasion, of the defendant in handcuffs did not deprive him of a fair trial in light of the compelling evidence of his guilt (People v Dawson, 125 AD2d 860, lv denied 69 NY2d 879).
Finally, we find that the defendant’s sentence was not excessive (see, People v Suitte, 90 AD2d 80). Mangano, J. P., Bracken, Spatt and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902589/ | Appeal by the defendant from a judgment of the County Court, Suffolk County (Seidell, J.), rendered November 6, 1986, convicting him of robbery in the first degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is affirmed.
Contrary to the defendant’s contentions, the hearing court properly concluded that neither the photographic array nor the pretrial lineup conducted at bar was unduly suggestive (see, People v Middleton, 128 AD2d 554, lv denied 69 NY2d 1007). Moreover, even if the identification procedures were found to be improper, such finding would not require the suppression of the complainant’s in-court testimony (People v Thomas, 133 AD2d 867). At bar, the People have established by clear and convincing evidence that the complainant’s in-court identification was supported by an independent source (see, People v Tomilin, 131 AD2d 897, lv denied 70 NY2d 755; People v Smalls, 112 AD2d 173). The record reveals that the complainant had an ample opportunity to observe the defendant at close proximity prior to and during the commission of the robbery.
Similarly without merit is the defendant’s contention that the court’s Sandoval ruling was erroneous. At bar, the record establishes that the court conducted the requisite balancing of probative value and prejudicial effect in rendering its Sandoval ruling and we perceive no abuse of discretion in the court’s resolution of the issue (see, People v Giannini, 130 AD2d 506, lv denied 70 NY2d 646).
The defendant’s remaining contention is without merit. Lawrence, J. P., Kunzeman, Kooper and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902625/ | Appeal by the Village of Málveme from an order of the Supreme Court, Nassau County (Christ, J.), dated December 9, 1986.
Ordered that the order is affirmed, with costs, for reasons stated by Justice Christ at the Supreme Court, Nassau County. Thompson, J. P., Brown, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902838/ | Judgment, Supreme Court, New York County (Arlene D. Goldberg, J.), rendered April 29, 2010, convicting defendant, after a jury trial, of criminal possession of stolen property in the fourth degree, and sentencing him, as a second felony offender, to a term of two to four years, unanimously affirmed.
The court properly denied defendant’s suppression motion. The police acted on information provided by an informant during a face-to-face encounter, which permitted the officers to observe the informant’s agitated demeanor (see People v Colon, 95 AD3d 420 [1st Dept 2012], lv denied 19 NY3d 1025 [2012], citing People v Appice, 1 AD3d 244 [1st Dept 2003], lv denied 1 NY3d 594 [2004]). In a subway station, the informant told the police a man had just tampered with a MetroCard vending machine. The informant pointed to the machine, followed the police outside the station, and pointed out defendant. However, the informant left the scene without identifying himself. The circumstances of the interaction warranted the inference that the informant had personally observed defendant engaging in criminal mischief, thereby enhancing the statement’s reliability (see People v Wallace, 89 AD3d 559, 560 [1st Dept 2011], lv dismissed 18 NY3d 963 [2012]).
*447This information provided the officers with reasonable suspicion that justified stopping defendant. Furthermore, the limitation on defendant’s freedom of movement was minimal. The officers simply informed defendant of the accusation and requested or directed him to follow them back into the subway station. Even assuming this to be a seizure (but see People v Francois, 61 AD3d 524, 525 [1st Dept 2009], affd 14 NY3d 732 [2010]), it was justified by the information available to the police, regardless of whether the same information might have justified a more intrusive action, such as a gunpoint seizure or an immediate frisk.
The police observed that the MetroCard machine had been disabled by jamming something into it, which corroborated the informant’s accusation. The police now had probable cause to arrest defendant for criminal mischief. Although defendant asserts that there were innocent explanations for the condition of the machine, probable cause does not require proof beyond a reasonable doubt (see generally People v Bigelow, 66 NY2d 417, 423 [1985]). Accordingly, the police conducted a lawful search incident to the arrest, which produced a credit card not belonging to defendant.
The verdict was supported by legally sufficient evidence and was not against the weight of the evidence (see People v Danielson, 9 NY3d 342, 348-349 [2007]). The evidence established that the credit card at issue was not issued to defendant, and he was not authorized to possess or use it. There is no basis for disturbing the jury’s finding that defendant knowingly possessed stolen or lost property without taking reasonable measures to return it to the owner. This finding was supported by the evidence that approximately one hour before the credit card was found in defendant’s possession, someone had twice attempted to use the credit card at a MetroCard vending machine at the same station.
The card qualified as a credit card even though it was not fully activated, because “criminal liability with regard to credit cards can arise even with respect to non-activated, expired or canceled cards” (People v Thompson, 287 AD2d 399, 400 [1st Dept 2001], affd 99 NY2d 38 [2002]; see also People v McCloud, 50 AD3d 379, 380 [1st Dept 2008], lv denied 11 NY3d 738 [2008]; People v Radoncic, 259 AD2d 428, 429 [1st Dept 1999], lv denied 93 NY2d 1005 [1999]). We have considered and rejected defendant’s arguments to the contrary. Concur—Mazzarelli, J.P., Acosta, Saxe, Renwick and Clark, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902594/ | Order and judgment (one paper), Supreme Court, New York County (Eileen Bransten, J.), entered November 4, 2011, which, to the extent appealed from as limited by the briefs, granted petitioner’s motion to renew his petition challenging respondent’s denial of his application for a master plumber’s license, and, upon renewal, directed petitioner to submit to respondent, within 30 days, additional proof in support of his application, and adjudged that petitioner’s failure to do so “will deem the application denied,” unanimously affirmed, without costs.
Although this Court’s decision in Matter of Kreitzer v New York City Dept, of Bldgs. (24 AD3d 374 [1st Dept 2005], lv denied 6 NY3d 715 [2006]) did not change the law, it undermined the primary basis on which respondent had denied petitioner’s application for a master plumber’s license, i.e., that petitioner did not show that he had been directly employed by a master plumber. Thus, Supreme Court properly granted petitioner’s motion to renew (CPLR 2221 [e] [2]; see Mejia v Nanni, 307 AD2d 870, 871 [1st Dept 2003]).
Petitioner is correct that our review of respondent’s determination is limited to the grounds invoked by respondent (see Matter of Parkmed Assoc, v New York State Tax Commn., 60 NY2d 935 [1983]). However, it is not clear from the record that petitioner’s failure to show he had been directly employed by a master plumber was the sole basis for respondent’s determination. In any event, petitioner would not be entitled to the judgment he seeks directing respondent to grant his application, since, as Supreme Court correctly found, he failed to show the requisite qualifying experience (see Matter of Reingold v Koch, 111 AD2d 688 [1st Dept 1985], affd for the reasons stated 66 *413NY2d 994 [1985]). Concur—Friedman, J.P., DeGrasse, Richter, Abdus-Salaam and Feinman, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902595/ | In a habeas corpus proceeding, James Kimbrough appeals from a judgment of the Supreme Court, Dutchess County (Donovan, J.), dated May 2, 1986, which, after a hearing, dismissed the writ.
Ordered that the judgment is affirmed, without costs or disbursements.
*737We have reviewed the record and agree with the appellant’s assigned counsel that there are no meritorious issues which could be raised on appeal. Counsel’s application for leave to withdraw as counsel is granted (see, Anders v California, 386 US 738; People v Paige, 54 AD2d 631; cf., People v Gonzalez, 47 NY2d 606).
We have examined the appellant’s supplemental pro se brief, and find that it contains no meritorious arguments. Mangano, J. P., Bracken, Spatt and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902596/ | In an action to determine conflicting claims as to the proceeds of a group life insurance policy, the defendant appeals from a judgment of the Supreme Court, Orange County (Fitzer, J. H. O.), dated August 20, 1987, which, after a hearing, ordered the proceeds which had been held by the Commissioner of Finance of Orange County pursuant to an order of the Supreme Court, Bronx County (Shapiro, J.), dated September 13, 1985, to be paid to the plaintiff.
*738Ordered that the judgment dated August 20, 1987, is reversed, on the law and the facts, with costs, and the Commissioner of Finance of Orange County is directed to pay the proceeds, together with any interest which has accrued thereon, to the defendant.
When the decedent, a retired firefighter, died on October 25, 1984, his estate consisted of approximately $250,000, plus a $25,000 group life insurance policy issued by Prudential Insurance Company of America (hereinafter Prudential) and administered by the Uniform Firefighters’ Association of Greater New York, Local 94, International Firefighters Association AFL-CIO (hereinafter Uniform Firefighters’ Association). When the group insurance card was originally signed by the decedent on January 5, 1978, his wife, the plaintiff herein, was the designated beneficiary. At the time of his death, the defendant was listed as the designated beneficiary.
On July 29, 1987, a hearing was held before Judicial Hearing Officer Fitzer. This hearing was limited to the acts of the decedent to effect a change of beneficiary. George Leutz, an employee of the policyholder Uniform Firefighters’ Association, was in charge of the administration and maintenance of the Prudential insurance program. He testified that for the past 10 years the procedure to effect a change of beneficiary has been to have the participant come to the office and advise a clerk of the proposed change. The clerk would then remove the old beneficiary and insert the name of the new beneficiary. This procedure was followed many thousands of times. There was no requirement that the participant sign or initial the change, and Prudential always accepted the cards with these changes. Leutz testified that sometime in 1984 the decedent came to the office stating he wanted to change his beneficiary. Leutz directed the decedent to a clerk who made the written changes. Although Leutz was not present during the conversations between the clerk and the decedent, he recognized the clerk’s handwriting and testified she was no longer in the employ of the Uniform Firefighters’ Association. At that time, the decedent also had his address and telephone number changed, and it was conceded by the plaintiff’s attorney that the decedent had often expressed his intent to designate the defendant as his new beneficiary.
By decision dated July 29, 1987, Judicial Hearing Officer Fitzer acknowledged that the change of beneficiary was made upon the decedent’s direction, but opined that, pursuant to EPTL 13-3.2, the change had to be signed and this statutory mandate was not waivable by Prudential. In the judgment *739appealed from, the plaintiff was awarded the proceeds of the insurance policy.
Pursuant to EPTL 13-3.2 (d), "[a] designation of a beneficiary or payee to receive payment upon [the] death of the person making the designation or another must be made in writing and signed by the person making the designation”. The beneficiary card herein was signed by the decedent and the provisions written in. Thus, the statute was complied with. As the decedent followed all the procedures required by Uniform Firefighters’ Association and Prudential and a signature was not required to effectuate a change of beneficiary, the new designation became effective when the clerk whited out the plaintiff’s name and inserted the defendant’s name as the new beneficiary pursuant to the decedent’s direction.
With respect to the provision in the policy which stated that "[t]he new designation will take effect on the date the notice was signed”, it should be noted that that provision was for the benefit of Prudential and was waived when Prudential became a stakeholder and was removed from the action. As we held in Kane v Union Mut. Life Ins. Co. (84 AD2d 148, 154, quoting from Matter of Wolfe, 47 Misc 2d 124, 125), "[w]hen an insurer becomes a stakeholder, it waives its right to require compliance with the terms of the contract. The contest as to distribution remains solely between the interested claimants and 'the court will exercise equity and seek to do what the insured apparently intended and award the fund to the claimant having the strongest claim under existing conditions’ ” (see also, Cable v Prudential Ins. Co., 89 AD2d 636). In this case the decedent clearly demonstrated his intention to name the defendant as his beneficiary. His desire to exclude the plaintiff from his estate is bolstered by the fact that, despite leaving an estate valued at approximately one quarter of a million dollars, he executed a will leaving her a mere $100. Thompson, J. P., Brown, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902597/ | Motion by respondent, Stephen N. Strauss (originally admitted to practice by the Appellate Division of the Supreme Court, First Judicial Department, on Mar. 23, 1959) to amend or modify the order of this court dated February 1, 1988 [135 AD2d 71], which suspended the respondent for a period of one year, effective February 16, 1988, so as to grant him additional time before the suspension should take effect.
Upon the papers filed in support of the motion and no papers having been filed in opposition thereto, it is
Ordered that the motion is granted; and it is further,
Ordered that the order of the court dated February 1, 1988 is amended nunc pro tunc as of February 16, 1988, so as to show that the effective date of the respondent’s one-year suspension is April 18, 1988. Mollen, P. J., Mangano, Thompson, Brown and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/552649/ | 920 F.2d 933
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Melvin PULLIAM, also known as Melvin Parker, Petitioner-Appellant,v.John W. DUNCAN, Warden, Respondent-Appellee.
No. 90-5574.
United States Court of Appeals, Sixth Circuit.
Dec. 13, 1990.
Before BOYCE F. MARTIN, Jr. and DAVID A. NELSON, Circuit Judges, and JOHN W. PECK, Senior Circuit Judge.
ORDER
1
Melvin Pulliam a/k/a Melvin Parker appeals from the judgment of the district court denying his petition for a writ of habeas corpus filed pursuant to 28 U.S.C. Sec. 2254. This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the record and briefs, this panel unanimously agrees that oral argument is not needed. Fed.R.App.P. 34(a).
2
A jury found Pulliam guilty of first-degree assault, fourth-degree assault, and first-degree wanton endangerment upon the evidence that he walked into a crowded barroom with a loaded shotgun and opened fire. Before trial, Pulliam elected to dismiss his appointed counsel and to proceed pro se.
3
In his petition for habeas relief, he contends that he should not have been allowed to represent himself at trial with the assistance of standby counsel; that the trial court should have ordered a competency evaluation for him; that he was subjected to double jeopardy by being convicted of first-degree assault and first-degree wanton endangerment; and that he should have received a jury instruction on self-defense. The district court found no constitutional violation. Upon review, we find no error. The record clearly establishes that Pulliam was offered counsel but intelligently and understandingly rejected the offer. See Faretta v. California, 422 U.S. 806, 819 (1975). Similarly, the record provides no evidence whatever that Pulliam's competency to waive counsel was in question. See Williams v. Bordenkircher, 696 F.2d 464 (6th Cir.), cert. denied, 461 U.S. 916 (1983).
4
Pulliam's remaining arguments are likewise meritless. Accordingly, the judgment of the district court is hereby affirmed for the reasons set forth in the district court's memorandum opinion entered on March 30, 1990. Rule 9(b)(5), Rules of the Sixth Circuit. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/2451523/ | 674 S.W.2d 751 (1984)
DOUBLEDAY & COMPANY, INC. et al., Petitioners,
v.
Dr. N. Jay ROGERS, Respondent.
No. C-1793.
Supreme Court of Texas.
July 11, 1984.
Rehearing Denied September 19, 1984.
*752 Orgain, Bell & Tucker, John G. Tucker, Beaumont, Robert J. Hearon, Jr., Austin, Robert M. Callagy, New York City, Harvey Katz, Washington, D.C., for petitioners.
Mehaffy, Weber, Keith & Gonsoulin, Robert Q. Keith, Johnson City, Charles A. Wright, Austin, Carl A. Parker, Port Arthur, for respondent.
BARROW, Justice.
This is a libel suit brought by respondent, Dr. N. Jay Rogers, against petitioners, Harvey Katz and Doubleday & Co., Inc. Katz authored and Doubleday published a book entitled Shadow on the Alamo, which admittedly contained a libel regarding Dr. Rogers. The jury found that the statement inquired about was made with malice. The jury further found that Dr. Rogers had suffered no actual damage from the publication, but that exemplary damages of $2,500,000 should be assessed. The trial court, because of the "zero" actual damage finding, rendered a take-nothing judgment. The court of appeals reversed the trial court judgment and rendered judgment for Dr. Rogers against Katz and Doubleday jointly and severally for $2,500,000 in exemplary damages. 644 S.W.2d 833. We reverse the judgment of the court of appeals and affirm the trial court judgment.
In April of 1971, Katz, a journalist and licensed attorney, received a financial grant from the Fund for Investigative Journalism to go to Texas to investigate a bribery and stock scandal that allegedly involved the Sharpstown State Bank and several public officials. For several weeks during the sixty-second session of the Texas Legislature, Katz posed as a legislative aide of a state representative. During this period, Katz became closely associated with a group of representatives known as the "Dirty Thirty," which was waging a political fight against the leadership of the House of Representatives. As a result of these experiences, Katz determined to write a book about the alleged "corruption of high public officials in Texas" and the fight against it by the "Dirty Thirty." His agent persuaded an editor of Doubleday that the proposed book was publishable and salable. Doubleday's editorial committee *753 entered into a contract with Katz to publish the proposed book.
The book does not assert that Dr. Rogers or any of his brothers played any role whatsoever in the events surrounding the Sharpstown controversy or the legislative fight in the sixty-second session. Their names are simply "dropped" as purported business associates of strong supporters of two Texas political leaders. After reference to the Rogers brothers in this relationship, a footnote states:
Nate Rogers was appointed to the state Optometry Board by John Connally, despite Rogers' three indictments for practicing without a license.
It is conceded by petitioners that this statement is false. Although Nate Rogers, the respondent herein, has served on the Optometry Board, he has never been indicted for practicing without a license. Dr. Rogers' brother, Sol Rogers, has been so accused, but has never been appointed to the Optometry Board.
The proposed book was first submitted to Doubleday in manuscript form in two parts as it was written by Katz. Each part was submitted to Doubleday's editor in charge of this book, and, because of the critical nature of the work, it was in turn submitted to Doubleday's counsel for legal examination. At the time the original manuscript was turned over to Doubleday's attorney, the footnote referred to Sol Rogers rather than to Nate Rogers. Doubleday's lawyer recognized the potentially libelous nature of the assertion. He wrote Doubleday's editor in charge of the proposed book, in part, as follows: "The statements that Sol Rogers had been indicted three times for practicing without a license and has been appointed to the State Optometry Board should be substantiated. On this point the substantiation which is recommended throughout this letter is of prime importance."
At a subsequent meeting with Doubleday's editor and its legal counsel, Katz was instructed to confirm the footnote's allegations or drop the note. Katz cited as his source a report contained in a House Journal. The 1949 House Journal states that Sol Rogers had been three times charged with practicing optometry without a license. See H.J. of Tex., 51st Leg., Reg. Sess. 4200-02 (1949). Some months later Katz submitted his final manuscript to Doubleday. In this draft, he had changed the first name in the footnote from "Sol" to "Nate."
It was stipulated before trial that Dr. Nate Rogers is and, at the time the book was published, was a public official of the State of Texas. In addition to his service on the Optometry Board, Dr. Rogers has conducted other public activities. Most notably, the Rogers brothers led a long fight in the Texas Legislature and in the courts against the Texas Optometric Association. This struggle essentially was over who would be legally permitted to prescribe glasses and the right to advertise. The Rogers brothers prevailed and have been very successful professionally through the Texas State Optical Company.
Since it was stipulated that Dr. Rogers was a public official, all parties recognize that the correct rule for liability is stated in New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S. Ct. 710, 726, 11 L. Ed. 2d 686 (1964), as follows:
[The first amendment] prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with "actual malice" that is, with knowledge that it was false or with reckless disregard of whether it was false or not.
This case presents two broad issues for decision. First, assuming that the published statement is libelous, does Texas law permit recovery of exemplary damages when the jury finds that no actual harm resulted? Second, does the record contain clear and convincing evidence to support a finding that the statement in question was actuated by constitutional malice? We address these questions in order.
I. PUNITIVE DAMAGES
Under Texas law, punitive damages are not recoverable as a general rule in the *754 absence of actual damages. The rule was most recently reaffirmed by this court in City Products Corp. v. Berman, 610 S.W.2d 446, 450 (Tex.1980). See also Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 409 (1934); Girard v. Moore, 86 Tex. 675, 26 S.W. 945, 946 (1894); Garza v. San Antonio Light, 531 S.W.2d 926, 930 (Tex.Civ.App. Corpus Christi 1975, writ ref'd n.r.e.); Anderson v. Alcus, 42 S.W.2d 294, 296 (Tex.Civ.App. Beaumont 1931, no writ); Flournoy v. Story, 37 S.W.2d 272, 273 (Tex.Civ.App. Fort Worth 1930, no writ).
Dr. Rogers acknowledges the rule, but he urges that it should not prevent his recovery in the case at bar. He asserts that the correct rule is that the plaintiff does not have to be awarded actual damages to receive exemplary damages; rather, he must merely show himself entitled to recover actual damages. Dr. Rogers relies on Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 409 (1934). In a libel case, he contends, the plaintiff shows himself entitled to actual damages simply by proof that the defendant published a libel concerning the plaintiff. This, he says, is due to the conclusive presumption of general damages in a libel case. See Guisti v. Galveston Tribune, 105 Tex. 497, 150 S.W. 874, 876 (1912); Denton Publishing Co. v. Boyd, 448 S.W.2d 145, 147 (Tex.Civ.App. Fort Worth 1969), aff'd, 460 S.W.2d 881 (Tex.1970). Therefore, he urges that proof that Doubleday published a libel about him entitled Dr. Rogers to exemplary damages as found by the jury. Apparently, the court of appeals' decision was based upon this logic.
A reading of the Russell case reveals that it does not help Dr. Rogers. The rule announced was clearly intended to apply to the unique situation created by the statutory bar to recovery of actual damages from an employer covered by worker's compensation. Even in that situation, the plaintiff is required to prove the existence and amount of actual damages to support a recovery of exemplary damages. Indeed, the court, in the same paragraph that contains the rule relied on by Dr. Rogers, declared: "The rule in Texas is that exemplary damages cannot be recovered unless the plaintiff is shown to have sustained actual loss or injury. There can be no exemplary damages in the absence of a recovery of actual damages. A verdict of nominal damages is not sufficient." Russell, 123 Tex. 128, 70 S.W.2d at 409.
Far from showing actual loss or injury, Dr. Rogers was found to have suffered no injury. Dr. Rogers asserted a claim for actual damages based on his testimony as to his mental anguish and embarrassment over the libelous statement, and the trial court instructed the jury that it could presume damages without proof. There was no objection to this submission; nor has any complaint been made of the jury finding of no actual damage.
The Texas cases are unanimous in holding that recovery of actual damages is prerequisite to receipt of exemplary damages. However, Dr. Rogers advances a policy argument for creation of an exception in this case. He argues that otherwise, there will be no means of punishment available as a deterrent to libel in a situation in which the libeled plaintiff's reputation has not been perhaps could not have been damaged.
We do not find it desirable to carve out of the settled rule an exception for libel cases. We fully recognize and appreciate the concern over the broad protection granted the media by the New York Times Co. v. Sullivan test. However, in adopting this strict test for liability, the Supreme Court recognized "a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials." New York Times Co., 376 U.S. at 270, 84 S. Ct. at 721. The Court further reasoned that "[a] rule compelling the critic of official conduct to guarantee the truth of all his factual assertions and to do so on pain of libel judgments virtually *755 unlimited in amount leads to ... `self-censorship.'" Id. at 279, 84 S. Ct. at 725.
Surely the danger resulting from the claimed lowered deterrent to libel is no more acute than that resulting from the same restriction on an exemplary damage recovery for other torts. Moreover, it is a rare case in which there would be a finding of punitive damages in the absence of a finding of at least some actual damages. In light of the overwhelming policy considerations that bear on the law of defamation, it would be peculiarly inappropriate to adopt a rule that singled out libel defendants for a more harsh rule of exemplary damage recovery than avails in other tort cases. Instead, we follow existing Texas law and hold that Dr. Rogers cannot recover exemplary damages because the jury found he sustained no actual damages.
II. ACTUAL MALICE
The take-nothing judgment of the trial court is correct as to Doubleday for the additional reason that on review of the entire record we do not find clear and convincing evidence that Doubleday acted with actual malice in publishing the statement in question.[1]See Bose Corp. v. Consumers Union of the United States, Inc., ___ U.S. ___, 104 S. Ct. 1949, 80 L. Ed. 2d 502 (1984); New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964); Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974); Foster v. Upchurch, 624 S.W.2d 564 (Tex. 1981); Foster v. Laredo Newspapers, Inc., 541 S.W.2d 809 (Tex.1976); Dun & Bradstreet, Inc. v. O'Neil, 456 S.W.2d 896 (Tex. 1970); El Paso Times, Inc. v. Trexler, 447 S.W.2d 403 (Tex.1969).
The standard that is to govern our review of the actual malice finding received recent clarification. In Bose Corporation, the United States Supreme Court held that the first amendment requires the appellate court to independently review the evidence to determine whether actual malice is proven with convincing clarity. The Court said:
The requirement of independent appellate review reiterated in New York Times v. Sullivan is a rule of federal constitutional law. It emerged from the exigency of deciding concrete cases; it is law in its purest form under our common law heritage. It reflects a deeply held conviction that judges ... must exercise such review in order to preserve the precious liberties established and ordained by the Constitution. The question whether the evidence in the record in a defamation case is of the convincing clarity required to strip the utterance of First Amendment protection is not merely a question for the trier of fact. Judges, as expositors of the Constitution, must independently decide whether the evidence in the record is sufficient to cross the constitutional threshold that bars the entry of any judgment that is not supported by clear and convincing proof of "actual malice."
___ U.S. at ___, 104 S.Ct. at 1965.
Dr. Rogers does not contend, and the court of appeals did not hold, that this record contains evidence that Doubleday published the libel with knowledge of its falsity or with intent to cause him harm. Rather, he urges that Doubleday's actions were taken in reckless disregard of the truth. Dr. Rogers argues that reckless disregard is evidenced by the claimed inherent improbability of the footnote's assertion. He relies on St. Amant v. Thompson, 390 U.S. 727, 88 S. Ct. 1323, 20 L. Ed. 2d 262 (1968), for the rule that malice may be found when the published allegation is so inherently improbable that only a reckless person would circulate it. Id. at 732, 88 S. Ct. at 1326. The court of appeals found reckless disregard in Doubleday's failure to independently research and verify the accuracy of the charge it published.
Dr. Rogers' reliance on St. Amant is misplaced. St. Amant involved publication of a false charge of corruption by a public official made solely in reliance on the affidavit of one man, whose trustworthiness was unknown. The charge was published *756 without investigation and heedless of the consequences. Id. at 730, 88 S. Ct. at 1325. Nevertheless, the United States Supreme Court held that recklessness on the part of the defamer was not shown. Failure to investigate does not establish malice. Id. at 733, 88 S. Ct. at 1326. The Court made it clear that "reckless conduct is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing. There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication." Id. at 731, 88 S. Ct. at 1326.
In reaching this conclusion the United States Supreme Court recognized that the New York Times definition of actual malice "puts a premium on ignorance, encourages the irresponsible publisher not to inquire, and permits the issue to be determined by the defendants testimony that he published the statement in good faith and unaware of its probable falsity." Id. at 732, 88 S. Ct. at 1326. The Court saw this cost as justified, because "the stake of the people in public business and the conduct of public officials is so great that neither the defense of truth nor the standard of ordinary care would protect against self censorship and thus adequately implement First Amendment policies." Id. at 732-33, 88 S. Ct. at 1326.
These considerations underlie our prior decisions that are dispositive of the issue in the instant case. In El Paso Times, Inc. v. Trexler, 447 S.W.2d 403, this court held proof of an utter failure to investigate amounted to no evidence of malice. In Dun & Bradstreet, Inc. v. O'Neil, 456 S.W.2d 896, we held that failure of defendant to perform verification required by its own standards was no evidence of conscious doubt as to the truth of the statement circulated. Therefore, recklessness was not shown.
The libelous article considered in Foster v. Upchurch, 624 S.W.2d 564 (Tex.1981), contained internal contradictions as to who was guilty of the crimes charged. Yet we held that no evidence of recklessness was present. This court recognized that reckless statements are those made with a high degree of awareness of probable falsity. Id. at 566. We further acknowledged that a showing of reckless disregard meant proof that the defamer entertained serious doubts that his declaration was true. Id. Accordingly, we concluded that more subjective evidence was required. See Garrison v. Louisiana, 379 U.S. 64, 74, 85 S. Ct. 209, 215, 13 L. Ed. 2d 125 (1964).
A review of the record indicates that as a publisher Doubleday does not research or write its own books. Nor does it independently verify their accuracy, but relies on the authors to perform those tasks. The author of the book in this case, Katz, was an attorney and an award winning journalist. Nevertheless, because of the controversial nature of the book, Doubleday submitted it to outside legal counsel for review. Counsel, an experienced libel attorney, identified the footnote as potentially defamatory. In a subsequent meeting with Doubleday's editor and counsel, Katz stated his source for the assertion. However, Doubleday insisted that it be substantiated or taken out. Some months later Katz submitted to Doubleday a marked-up manuscript in which the name in the footnote had been changed from "Sol" to "Nate." Doubleday published the book with the footnote as it appeared after the substantiation process.
When the facts of this case are viewed in light of the holdings of this court and of the United States Supreme Court, the conclusion is inescapable. The record before us contains no evidence that Doubleday published the defamatory statement about Dr. Rogers with reckless disregard for its truth. Doubleday presented considerable evidence that it exercised that degree of care proper for a reasonable book publisher. There is not clear and convincing evidence in this record to support a finding of actual malice on the part of Doubleday.
We conclude that the trial court properly rendered a take-nothing judgment. The judgment of the court of appeals is reversed and the trial court is affirmed.
*757 KILGARLIN, J., concurs and dissents.
RAY, J., dissents.
KILGARLIN, Justice, concurring and dissenting.
I concur with the majority opinion that there is no clear and convincing evidence of actual malice on the part of Doubleday. This publisher may have been negligent in failing to demand verification from author Katz but nothing in the record can support a conclusion that Doubleday's actions reached the standard of conduct proscribed by New York Times v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964). I, therefore, join in reversing the judgment of the court of appeals and rendering judgment that Dr. Rogers take nothing from Doubleday and Co., Inc.
However, I agree with that part of the dissent of Justice Ray that in a libel case such as this, actual damages are presumed, and, thus, exemplary damages are recoverable. That Westbrook Pegler's printed diatribe about Quentin Reynolds was so outrageous and because by disbelief Reynolds' excellent reputation remained untarnished, thereby leading to an award of only one dollar in actual damages, does not mean that $100,000 exemplary damages should not have been assessed against Pegler as punishment and a warning to others in the profession of journalism. To permit otherwise would mean that a defamer, motivated by actual malice, becomes the beneficiary of the unassailable reputation of the one he has defamed. Reynolds v. Pegler, 123 F. Supp. 36 (S.D. N.Y. 1954), aff'd, 223 F.2d 429 (2d Cir. 1955), cert. denied, 350 U.S. 846, 76 S. Ct. 80, 100 L. Ed. 754 (1955).
Thus, I would affirm the court of appeals' rendition of judgment for Dr. Rogers against Harvey Katz.
RAY, Justice, dissenting.
I dissent. I believe there is sufficient evidence in the record for this Court to affirm the jury finding of actual malice on the part of Doubleday.[1] Moreover, I would follow the great weight of American authority and hold that in cases of libel per se, where actual damages are conclusively presumed as a matter of law, exemplary damages may be awarded even in the absence of a jury award of actual damages.
ACTUAL MALICE
The New York Times "actual malice" standard is deceptively simple: knowing falsity or reckless disregard of the truth or falsity of the defamatory statement. New York Times v. Sullivan, 376 U.S. 254, 280, 84 S. Ct. 710, 726, 11 L. Ed. 2d 686 (1964). "Reckless disregard" means that the publisher "in fact entertained serious doubts as to the truth of his publication," St. Amant v. Thompson, 390 U.S. 727, 731, 88 S. Ct. 1323, 1325, 20 L. Ed. 2d 262 (1968), or had a "subjective awareness of probable falsity." Gertz v. Robert Welch, Inc., 418 U.S. 323, 335 n.6, 94 S. Ct. 2997, 3004 n.6, 41 L. Ed. 2d 789 (1974). Although a publisher does not have an absolute duty to investigate, St. Amant v. Thompson, 390 U.S. at 733, 88 S. Ct. at 1326, a publisher cannot feign ignorance or profess good faith when there are clear indications present which bring into question the truth or falsity of defamatory statements. A publisher cannot
automatically insure a favorable verdict by testifying that he published with a belief that the statements were true. The finder of fact must determine whether the publication was indeed made in good faith. Professions of good faith will be unlikely to prove persuasive, ... when the publisher's allegations are so inherently improbable that only a reckless man would have put them in circulation. Likewise, recklessness may be found where there are obvious reasons to doubt the veracity of the informant or the accuracy of his reports. (Emphasis added.)
St. Amant v. Thompson, 390 U.S. 727, 732, 88 S. Ct. 1323, 1326, 20 L. Ed. 2d 262 (1968). See also, Herbert v. Lando, 441 U.S. 153, 156, 99 S. Ct. 1635, 1638, 60 L. Ed. 2d 115 *758 (1979) (subjective awareness of probable falsity can be found from "obvious reasons" to doubt accuracy of reports).
The evidence in this case should be, in my view, sufficient evidence from which the jury could infer actual malice on the part of Doubleday. Indeed, it is scarcely conceivable, even in this age, that a responsible publisher or author could believe in good faith that a person would be placed on a regulatory board by a nationally-prominent governor to enforce a statute under which he had been indicted three times. The evidence in the record shows that Doubleday's attorney, Robert M. Callagy, was aware of the libelous nature of much of Harvey Katz' manuscript. In an internal memo to a Doubleday business manager, Callagy wrote:
[T]his manuscript contains substantial problems in the area of libel .... The statements that Sol Rogers had been indicted three times for practicing without a license and had been appointed to the State Optometry Board should be substantiated.... On this point, the substantiation which is recommended throughout this letter is of prime importance.
The evidence shows that, despite this awareness of possible libel, Doubleday failed to make even a perfunctory investigation of the truth or falsity of the assertions in the footnote. Doubleday did not demand that Katz produce an indictment against Dr. Rogers; it did not demand that Katz produce a copy of the House Journal upon which he relied (which, in any case, conflicted with the assertions in the footnote); nor did it bother to contact Dr. Rogers by telephone.
No purpose whatsoever is achieved by granting a constitutional shield to such conduct. The First Amendment is not so fragile that it requires us to immunize this kind of reckless, destructive attack on a person's even a public official's reputation. The First Amendment is not a shelter for the character assassinator. As Justice Fortas noted in St. Amant v. Thompson, 390 U.S. 727, 88 S. Ct. 1323, 20 L. Ed. 2d 262 (1968):
The First Amendment does not require that we license shotgun attacks on public officials in virtually unlimited open season. The occupation of public officeholder does not forfeit one's membership in the human race. The public official should be subject to severe scrutiny and to free and open criticism. But if he is needlessly, heedlessly, falsely accused of crime, he should have a remedy in law. New York Times does not preclude this minimal standard of civilized living.
Id. at 734, 88 S. Ct. at 1327.
While it is generally true that a publisher is not under an absolute duty to investigate, I believe that the law should not countenance an inherently improbable statement that a public official had been indicted when there was not even a perfunctory effort at verification. "Freedom of the press under the First Amendment does not include absolute license to destroy lives or careers." Curtis Publishing Co. v. Butts, 388 U.S. 130, 170, 87 S. Ct. 1975, 1999, 18 L. Ed. 2d 1094 (1967) (Warren, C.J., concurring).
EXEMPLARY DAMAGES
Justice Powell stated in Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974) that the tort of defamation, of which libel is a subcategory, is unlike other torts:
The common law of defamation is an oddity in tort law, for it allows recovery of purportedly compensatory damages without evidence of actual loss. Under the traditional rules pertaining to actions for libel the existence of injury is presumed from the fact of publication.
Id. at 349, 94 S. Ct. at 3011. The salient point here is that in libel per se cases, actual damages are presumed by law.[2]*759 This has long been the rule in Texas and apparently throughout the United States. See First State Bank of Corpus Christi v. Ake, 606 S.W.2d 696 (Tex.Civ.App. Corpus Christi 1980, writ ref'd n.r.e.); Bayoud v. Sigler, 555 S.W.2d 913 (Tex.Civ.App. Beaumont 1977, writ dism'd w.o.j.). This presumption of actual damages in a libel per se case is conclusive as a matter of law. Galveston Tribune v. Johnson, 141 S.W. 302 (Tex.Civ.App. Galveston 1911, writ ref'd). Accord Mid-America Food Service v. ARA Service, Inc., 578 F.2d 691 (8th Cir.1978) (applying Kansas law); Greenmoss Builders, Inc. v. Dun & Bradstreet, 143 Vt. 66, 461 A.2d 414 (1983); see generally, Harper & James, Torts § 5.9 at 373 (1956).
My research reveals that, of the jurisdictions that have ruled on the question, the great majority have reached the conclusion that when the libel complained of is actionable per se, exemplary damages may be awarded even though actual damages are neither found nor shown, for in such a case the requirement of showing actual damages as a basis for awarding exemplary damages is satisfied by the presumption of injury which arises in a libel per se case.[3] The court in Mid-America Food Service v. ARA Services, Inc., 578 F.2d 691 (8th Cir.1978), explained that the very nature of defamation per se cases compelled it to reach this conclusion because
otherwise it would be difficult to fit the presumed damage aspect of defamation per se into the general framework of punitive damages in tort law. In most tort actions the jury determines both whether there have been actual damages, and if so, how much money is sufficient to compensate for the injury. These findings are reflected in the jury's award of actual damages. However, ... where defamation per se is implicated, the jury's function is, in effect, bifurcated and a part thereof assigned to the court. Assuming the jury finds that slanderous statements were made, the question of whether plaintiff has been damaged is resolved as a matter of law by the court if the statements are defamatory per se. The injury results from the fact that the statements were made. It is for the jury to determine only the compensatory amount. It follows that where, by awarding punitive damages, the jury has found a defendant to have made statements deemed defamatory per se, the jury's failure at the same time to award actual damages should not annul the award of punitive damages. Otherwise the conclusive presumption of damages arising from the jury's finding that the defendant made the statement is stillborn.
Id. at 699.
I agree with the reasoning of that court on this matter. To disallow punitive damages in defamation per se cases just because actual damages are not awarded would render meaningless the long-established Texas rule that in such cases actual *760 damages are conclusively presumed as a matter of law.
There is a further reason why punitive damages should be allowed in these cases. The main reason for punitive damages in actions for libel is to deter false, malicious, and provocative attacks upon a person's reputation. Punitive damages are intended to act as a deterrent upon the libelor so that he will not repeat the offense, and to serve as a warning to others. They are a sort of hybrid between a display of ethical indignation and the imposition of a criminal fine. Punitive damages are thus allowed on the ground of public policy and not because the plaintiff has suffered any monetary damages for which he is entitled to reimbursement; the award goes to him simply because it is assessed in his particular suit.
The need for such a deterrent is at least as great where the person libeled cannot show actual financial loss because of the false statement as where some measurable damage is provable by the plaintiff. To disallow punitive damages just because plaintiff cannot show financial loss "would mean that a defamer gains a measure of immunity no matter how venomous or malicious his attack simply because of the excellent reputation of the defamed; it would mean that the defamer, motivated by actual malice, becomes the beneficiary of that unassailable reputation and so escapes punishment." Reynolds v. Pegler, 123 F. Supp. 36, 38 (S.D.N.Y. 1954), aff'd, 223 F.2d 429 (2d Cir.1955), cert. denied, 350 U.S. 846, 76 S. Ct. 80, 100 L. Ed. 754 (1955). Accord, Loftsgaarden v. Reiling, 267 Minn. 181, 126 N.W.2d 154 (1964), cert. denied, 379 U.S. 845, 85 S. Ct. 31, 13 L. Ed. 2d 50 (1964); Toomey v. Farley, 2 N.Y.2d 71, 156 N.Y. S.2d 840, 138 N.E.2d 221 (1956); Kent v. City of Buffalo, 61 Misc. 2d 142, 304 N.Y. S.2d 949 (Sup.Ct.Eric County 1969), rev'd on other grounds, 29 N.Y.2d 818, 327 N.Y. S.2d 653, 277 N.E.2d 669 (1971).
Doubleday argues that punitive damages may not be allowed here because of the established Texas rule that punitive damages must bear a reasonable relationship to the amount of actual damages awarded. It argues in effect that "zero" multiplied by any number is still "zero." While it is true there is such a "reasonable relation rule" in this state, it is also true that this Court has never held that it acts to bar punitive damages in a defamation per se case such as we have before us. Given the unique nature of defamation per se cases, where actual damages are presumed by law, I believe there is simply no occasion to seek any particular relation between the actual damages and the punitive damages. However, the reasoning actually underlying the reasonable relation rule i.e., the notion that punitive damages must not be excessive does apply to defamation per se cases, as it does to all cases.[4]
I believe there is sufficient evidence in the record from which the jury could infer actual malice on the part of Doubleday and would therefore hold Doubleday accountable for its tortious conduct. Harvey Katz has not appealed the jury finding of actual malice against him, and thus that jury finding is binding as to him.
I would hold Doubleday and Katz accountable in exemplary damages to Dr. Rogers, because I am convinced that in libel per se cases exemplary damages may be awarded even in the absence of an award of actual damages. It is my belief that we should adopt the majority rule recognized by the other states which allows the recovery of exemplary damages in a libel per se case even though actual damages are neither found nor shown.
In these times of accountability, we hold others responsible for their mistakes, carelessness and malpractice. Publishers have an awesome duty to search for and find the truth. It is their highest calling. To do less is to be mediocre. None should be guilty of doing less than his best when the cause of free speech is so great to the freedom of this nation. To sacrifice truth for expediency is to abandon the responsibility *761 which is impliedly required by the First Amendment to the United States Constitution.
I respectfully dissent.
NOTES
[1] Katz does not complain in this court of the finding of actual malice against him.
[1] The author, Harvey Katz, has not appealed the jury finding of actual malice against him.
[2] Elements of actual damages which the law presumes from the publication of libelous per se statements include injury to reputation, humiliation, and mental anguish. West Texas Utilities Co. v. Wills, 164 S.W.2d 405, 412 (Tex.Civ.App. Austin 1942, no writ); Dorsaneo, Texas Litigation Guide §§ 333.04, 333.51 (1982).
However, under the Supreme Court's ruling in Gertz, presumed damages and/or punitive damages may be recovered against a media defendant only if "actual malice" is proved; i.e., defendant must be shown to have had knowledge of the falsity of the libelous statement or to have had reckless disregard for its veracity. This rule applies to all plaintiffs. See Carson v. Allied News Co., 529 F.2d 206 (7th Cir.1976).
[3] See, e.g., Mid-America Food Service v. ARA Services, Inc., 578 F.2d 691 (8th Cir.1978) (applying Kansas law); Porterfield v. Burger King Corp., 540 F.2d 398 (8th Cir.1976) (applying Missouri law); Johnson Publishing Co. v. Davis, 271 Ala. 474, 124 So. 2d 441 (1960). Contento v. Mitchell, 28 Cal. App. 3d 356, 104 Cal. Rptr. 591 (1972); Lundquist v. Alewine, 397 So. 2d 1148 (Fla.App.1981); Tunnell v. Edwardsville Intelligencer, Inc., 99 Ill.App.2d 1, 241 N.E.2d 28 (1968); Internat'l Brotherhood of Elec. Workers Local 1805, Etc. v. Mayo, 281 Md. 475, 379 A.2d 1223 (1977); National Recruiters, Inc. v. Cashman, 323 N.W.2d 736 (Minn.1982); Kent v. City of Buffalo, 61 Misc. 2d 142, 304 N.Y.S.2d 949 (Sup.Ct. Erie County 1969), rev'd on other grounds, 29 N.Y.2d 818, 327 N.Y.S.2d 653, 277 N.E.2d 669 (1971); Newspaper Publishing Corp. v. Burke, 216 Va. 800, 224 S.E.2d 132 (1976); See generally, 50 Am.Jur.2d, Libel and Slander § 352 at 873 (1970 ed. and 1983 supp.); Annot., 17 A.L.R. 2d 545.
[4] See Comment, Required Ratio of Actual to Exemplary Damages, 25 Baylor L.Rev. 127, 134 (1973); Dobbs, Remedies 211 (1973); Prosser, Torts 14 (4th ed. 1971). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/5902600/ | In an action, inter alia, for a judgment declaring that certain seasonal cottages in the Town of Cortlandt are "legal nonconforming structures” and further declaring that said structures may be lawfully converted to year-round use without violating the town code, the defendant Town of Cortlandt appeals from an order of the Supreme Court, Westchester County (Donovan, J.), dated November 24, 1986, which denied its motion to dismiss the complaint on the ground, inter alia, that the action is barred by the applicable Statute of Limitations.
Ordered that the order is reversed, on the law, with costs, the motion to dismiss is granted, and the complaint is dismissed.
In order to determine the Statute of Limitations applicable to a particular declaratory judgment action, the substance of the action must be examined to identify the relationship out of which the claim arises and the relief sought (see, Solnick v Whalen, 49 NY2d 224, 229). If it is determined that the underlying dispute can be or could have been resolved through a form of action or proceeding for which a specific limitation period is statutorily provided, that limitation period governs the declaratory judgment action rather than the catchall six-year limitation set forth in CPLR 213 (1) (see, Matter of Save the Pine Bush v City of Albany, 70 NY2d 193, 202).
In the instant case the plaintiff asked the Zoning Board of Appeals, inter alia, to hold that the conversion of certain summer cottages to year-round use would not be an unlawful expansion of a nonconforming use. The Zoning Board held that the conversion which the plaintiff wanted to undertake would, in fact, be an unlawful expansion of a nonconforming use. The plaintiff could have reviewed this determination by the Zoning Board of Appeals by bringing a CPLR article 78 *743proceeding within 30 days after a decision was filed in the office of the town clerk (Town Law § 267 [7]). Instead, almost one year later, the plaintiff commenced the instant declaratory judgment action against the Town of Cortlandt to declare, inter alia, that the subject structures may be lawfully converted to year-round use. Since the underlying dispute could have been resolved through a CPLR article 78 proceeding for which a specific 30-day limitation period is statutorily provided, that limitation period governs. Accordingly, the town’s motion to dismiss the instant action should have been granted since the action was not commenced within the 30-day time period. We note that even if the four-month limitation period set forth in CPLR 217 were applicable, the action would still not have been timely commenced. Mangano, J. P., Kunzeman, Rubin, Kooper and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902601/ | Order of disposition, Family Court, New York County (Mary E. Bednar, J.), entered on or about December 2, 2011, which adjudicated appellant a juvenile delinquent upon a fact-finding determination that he committed an act that, if committed by an adult, would constitute the crime of sexual abuse in the first degree, and placed him on probation for a period of 18 months, unanimously affirmed, without costs.
The court properly denied appellant’s suppression motion. Since the interrogating detective made a good faith effort to comply with Family Court Act § 305.2 and did not willfully or negligently disregard any of its requirements, we find no basis for suppression of appellant’s statements (see Matter of Emilio M., 37 NY2d 173, 177 [1975]).
The police notified both appellant’s mother and his stepfather that appellant was being taken into custody, and both parents accompanied the officers and their son to the Manhattan Child Abuse Unit. However, the detective only permitted one parent to enter the interview room. As a result, the mother was present for the interview, but the stepfather remained outside.
Family Court Act § 305.2 (3) provides that when a police officer takes a child into custody, the officer “shall immediately notify the parent or other person legally responsible for the child’s care, or if such legally responsible person is unavailable the person with whom the child resides, that the child has been taken into custody.” Family Court Act § 305.2 (7) provides that “[a] child shall not be questioned pursuant to this section unless he and a person required to be notified pursuant to subdivision three if present, have been advised [of the Miranda rights].”
It is plain that subdivision (3) is satisfied when the officer notifies one “parent or other person legally responsible” that their child has been taken into custody. Here the presence of appellant’s mother provided the core protection intended by the statute.
We reject appellant’s other claims of noncompliance with Family Court Act § 305.2. A child arrestee must be taken to court “unless the officer determines that it is necessary to question the child” (Family Ct Act § 305.2 [4] [b]). Contrary to appel*414lant’s argument, interrogation is not limited to exigent circumstances, and the record fails to support appellant’s claim that he was too tired to be questioned. Finally, while the questioning did not occur in a “designated juvenile room” (see Family Ct Act § 305.2 [4] [b]), the setting of the interview satisfied the requirement that the location be “substantially similar” to such a designated room (see Matter of Daniel H., 67 AD3d 527, 528 [1st Dept 2009], appeal dismissed 15 NY3d 883 [2010]; Matter of Luis N., 112 AD2d 86, 88 [1st Dept 1985]).
The court’s finding was based on legally sufficient evidence and was not against the weight of the evidence (see People v Danielson, 9 NY3d 342, 348-349 [2007]). There is no basis for disturbing the court’s credibility determinations.
Since we conclude that any error in excluding evidence of the victim’s allegedly bad reputation for truthfulness was harmless under the circumstances of the case (see People v Crimmins, 36 NY2d 230 [1975]), we find it unnecessary to decide whether a group of only four or five relatives can constitute a relevant community under People v Fernandez (17 NY3d 70 [2011]) for purposes of introducing reputation evidence. Concur—Friedman, J.E, DeGrasse, Richter and Abdus-Salaam, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902603/ | In an action for ejectment and to recover damages, the defendant appeals from so much of an order of the Supreme Court, Kings County (Golden, J.) dated October 9, 1987, as, upon reargument, adhered to the original determination in an order dated July 8, 1987, denying that branch of her motion which was to vacate a default judgment.
Ordered that the order is affirmed insofar as appealed from, with costs.
Initially we note that, contrary to the plaintiff’s assertion, an order granting reargument but adhering to the original determination is appealable (see, Dennis v Stout, 24 AD2d 461; Council Commerce Corp. v Paschalides, 92 AD2d 579).
A party attempting to vacate a default judgment on the ground of excusable default (CPLR 5015 [a] [1]) must establish both that there is a reasonable excuse for the default and that there exists a meritorious defense (see, Schultz v Ruggiero, 129 AD2d 573; Siegel, NY Prac § 108). The defendant contends that there was an excusable default, i.e., she never received the summons and complaint, and a meritorious defense, i.e., res judicata. However, the record shows that the defendant *744was personally served with the summons and complaint at the correctional institution where she is confined. Furthermore, with regard to the merits, the instant ejectment action was not barred under the doctrine of res judicata by the prior dismissal of the plaintiff’s summary holdover proceeding (see, Modell & Co. v Minister, Elders & Deacons of Refm. Prot. Dutch Church, 68 NY2d 456, rearg denied 69 NY2d 741; Walsh v Somerville, 75 AD2d 511; Health & Beauty Studios v Gray, 48 AD2d 632, appeal dismissed 36 NY2d 938; RPAPL 747 [2]). Mollen, P. J., Kunzeman, Rubin and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902604/ | Order of disposition, Family Court, New York County (Mary E. Bednar, J.), entered on or about December 2, 2011, which adjudicated appellant a juvenile delinquent upon a fact-finding determination that he committed an act that, if committed by an adult, would constitute the crime of sexual abuse in the first degree, and placed him on probation for a period of 18 months, unanimously affirmed, without costs.
The court properly denied appellant’s suppression motion. Since the interrogating detective made a good faith effort to comply with Family Court Act § 305.2 and did not willfully or negligently disregard any of its requirements, we find no basis for suppression of appellant’s statements (see Matter of Emilio M., 37 NY2d 173, 177 [1975]).
The police notified both appellant’s mother and his stepfather that appellant was being taken into custody, and both parents accompanied the officers and their son to the Manhattan Child Abuse Unit. However, the detective only permitted one parent to enter the interview room. As a result, the mother was present for the interview, but the stepfather remained outside.
Family Court Act § 305.2 (3) provides that when a police officer takes a child into custody, the officer “shall immediately notify the parent or other person legally responsible for the child’s care, or if such legally responsible person is unavailable the person with whom the child resides, that the child has been taken into custody.” Family Court Act § 305.2 (7) provides that “[a] child shall not be questioned pursuant to this section unless he and a person required to be notified pursuant to subdivision three if present, have been advised [of the Miranda rights].”
It is plain that subdivision (3) is satisfied when the officer notifies one “parent or other person legally responsible” that their child has been taken into custody. Here the presence of appellant’s mother provided the core protection intended by the statute.
We reject appellant’s other claims of noncompliance with Family Court Act § 305.2. A child arrestee must be taken to court “unless the officer determines that it is necessary to question the child” (Family Ct Act § 305.2 [4] [b]). Contrary to appel*414lant’s argument, interrogation is not limited to exigent circumstances, and the record fails to support appellant’s claim that he was too tired to be questioned. Finally, while the questioning did not occur in a “designated juvenile room” (see Family Ct Act § 305.2 [4] [b]), the setting of the interview satisfied the requirement that the location be “substantially similar” to such a designated room (see Matter of Daniel H., 67 AD3d 527, 528 [1st Dept 2009], appeal dismissed 15 NY3d 883 [2010]; Matter of Luis N., 112 AD2d 86, 88 [1st Dept 1985]).
The court’s finding was based on legally sufficient evidence and was not against the weight of the evidence (see People v Danielson, 9 NY3d 342, 348-349 [2007]). There is no basis for disturbing the court’s credibility determinations.
Since we conclude that any error in excluding evidence of the victim’s allegedly bad reputation for truthfulness was harmless under the circumstances of the case (see People v Crimmins, 36 NY2d 230 [1975]), we find it unnecessary to decide whether a group of only four or five relatives can constitute a relevant community under People v Fernandez (17 NY3d 70 [2011]) for purposes of introducing reputation evidence. Concur—Friedman, J.E, DeGrasse, Richter and Abdus-Salaam, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902605/ | In a negligence action to recover damages for personal injuries, etc., (1) the defendant Justin Resnick appeals, as limited by his brief, from so much of an order of the Supreme Court, Orange County (King, J.), dated June 26, 1986, as denied his motion for summary judgment dismissing the complaint insofar as it is asserted against him, (2) the plaintiffs cross appeal from the same order, and (3) the defendant Newburgh Bay Realty Corp. (hereinafter Newburgh) cross-appeals from so much of the same order as granted that branch of its cross motion which was to dismiss the complaint and the defendant Resnick’s cross claim insofar as it is asserted against it. The appeal by Resnick from the order dated June 26, 1986, brings up for review so much of an order of the same court, entered September 15, 1986, as, upon reargument, adhered to the original determination denying his motion for summary judgment (see, CPLR 5517).
Ordered that the appeal by the defendant Resnick from so much of the order dated June 26, 1986, as denied his motion for summary judgment is dismissed, without costs or disbursements, as that part of the order was superseded by so much of the order entered September 15, 1986, as, upon reargument, adhered to the original determination denying his motion; and it is further,
Ordered that the order entered September 15, 1986, is affirmed insofar as reviewed, without costs or disbursements; and it is further,
Ordered that the plaintiffs’ cross appeal is dismissed as abandoned, without costs or disbursements; and it is further,
Ordered that Newburgh’s cross appeal is dismissed, without costs or disbursements, on the ground that it is not aggrieved by the order cross-appealed from (see, CPLR 5511).
*745The plaintiff Emanuel DeFreece was injured while he was on the roof of a factory building owned by the defendant Newburgh, and under a contract of sale to the defendant Resnick. The contract vendee, Resnick, who already had possession and control of the building, entered into a contract with one Richard Rafos to repair various holes in the factory’s roof. The plaintiff, who was seeking employment and heard of the construction work to be done, visited the premises where Rafos authorized him to climb to the roof. After Rafos and the plaintiff agreed orally to employment to start in a few weeks, and, as the plaintiff was leaving, he fell into one of the holes in the roof.
The court correctly ruled that the defendant Resnick was an “owner” within the meaning of Labor Law § 241 (6). That section requires "owners and contractors and their agents” to comply with various safety requirements for “persons employed * * * or lawfully frequenting” areas in which construction, excavation or demolition work is being performed. 12 NYCRR 23-1.4 (b) (39) defines a person “lawfully frequenting” such places as "[a]ny person exercising a lawful right of presence or passage in any area, including persons on a public sidewalk, street or highway”. As the plaintiff was lawfully on the roof with the permission of the contractor, he is covered by this provision (see, Brennan v M. L. P. Bldrs. Corp., 262 NY 464).
The defendant Resnick was an “owner” within the meaning of this provision, even though legal title had not yet passed to him. As a contract vendee, he had a property interest, already had access to the premises, and was the party who had contracted to have the roof repair work performed (see, Copertino v Ward, 100 AD2d 565, 566; Celestine v City of New York, 86 AD2d 592, affd 59 NY2d 938; Sweeting v Board of Coop. Educ. Servs., 83 AD2d 103, 113, lv denied 56 NY2d 503; Allen v Cloutier Constr. Corp., 44 NY2d 290, 300-301, rearg denied 45 NY2d 776; see also, Real Property Law § 239-a). Bracken, J. P., Kunzeman, Eiber and Harwood, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902607/ | In an action for a divorce and ancillary relief, the defendant wife appeals from so much of an order of the Supreme Court, Westchester County (DiFede, J. H. O.), entered June 13, 1986, as (1) held that all of her claims arising from certain provisions of two prior judgments were "more than satisfied”; (2) ordered her not to receive or collect payments, other than support, on those portions of the prior judgments or "on any judgments subsequently entered” which embody the awards made in those portions of the prior judgments, (3) vacated all outstanding enforcement devices and directed the return of all moneys then held by any garnishee or the Sheriff to the plaintiff respondent Alfred J. Kahn and (4) vacated two other judgments entered by the Clerk of the County of Westchester.
Ordered that the order is reversed insofar as appealed from, without costs or disbursements, and those branches of the plaintiff’s motion which sought the entry of satisfactions of two prior judgments, vacatur of all judgments purportedly entered by the defendant without court direction or approval and leave to seek restitution of any sums paid to the defendant in excess of the amounts due on certain judgments are denied, and the matter is remitted to the Supreme Court, Westchester County, for further proceedings consistent herewith.
The plaintiff contends that he has satisfied certain judgments against him. However, this contention is unsupported *747by the record since there is insufficient evidence that the plaintiff fully satisfied either the judgment awarding the defendant one half of the parties’ joint bank account or the judgment awarding the defendant reimbursement for the costs of an earlier appeal to the Court of Appeals. Although the record shows that the plaintiff made payments against these judgments at various times under an income execution order, there is no proper calculation of interest due which takes into account when each payment was received by the Sheriff and how much of each payment the defendant received. Accordingly, it appears that the trial court did not properly determine that these judgments were satisfied. Similarly no proper calculation was made concerning the payment needed to satisfy the defendant’s claim for necessaries. We note that the claim for necessaries has not been reduced to judgment.
Accordingly, we remit the matter to the Supreme Court, Westchester County, for a determination of what total payment would satisfy each judgment and whether each was satisfied.
At the same time, the claim for necessaries should be determined and should be reduced to judgment if that claim has not been satisfied. Thompson, J. P., Brown, Eiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902636/ | An appeal having been taken to this Court by the above-named appellant from a judgment of the Supreme Court, New York County (Roger S. Hayes, J.), rendered on or about November 18, 2010, said appeal having been argued by counsel for the respective parties, due deliberation having been had thereon, and finding the sentence not excessive, it is unanimously ordered that the judgment so appealed from be and the same is hereby affirmed. Concur— Friedman, J.P., DeGrasse, Richter, Abdus-Salaam and Feinman, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902637/ | Appeal by the defendant from a judgment of the Supreme Court, Kings County (Meyerson, J.), rendered May 13, 1986, convicting him of rape in the first degree and burglary in the second degree, upon a jury verdict, and imposing sentence.
Ordered that the judgment is reversed, on the law and as a matter of discretion in the interest of justice, and a new trial is ordered.
We find that the Assistant District Attorney’s cross-examination of the defendant and her remarks during summation *762exceeded the bounds of proper advocacy and as a result, deprived the defendant of his right to a fair trial.
Throughout her summation, the Assistant District Attorney chose to appeal to the fears and emotions of the jurors rather than to focus on the evidence adduced at trial. At one point she improperly advised the jury that "The greatest injustice done in this case is for you to acquit that man because he chose to rape someone he knew. If that’s what you do, then you’re licensing people in this community to go out and rape people they know” (cf., People v Watson, 111 AD2d 888 [condemning "safe streets” argument]). She continued her emotional appeal by improperly referring to the jurors’ families as possible victims ("because if any one of your children or wives were raped by someone, you would not expect a jury to [acquit]”) (see, People v Calderon, 88 AD2d 604), and by improperly singling out two female members of the jury by name and specifically asking them, "does a woman have a right to say on that day to a man that she knew, that she didn’t want to have sex with him?”
Further, it was improper and prejudicial for the Assistant District Attorney in her summation to imply that the defendant had previously committed the crime of rape (see, People v Bannerman, 110 AD2d 706, 707) by stating that: "Ladies and gentlemen, it reminds me of [the man who kills his mother and father and asks for mercy from the court] because he chose someone he knew to rape and he raped her in the manner that he did, so that he could come to court and say 'Look there’s no force, there’s no weapon, there’s no injury’. Well what do you expect him to do? Grab somebody on the street, pull her into an alleyway with a knife? That’s not the way this guy rapes” (emphasis added). From the foregoing language, the jury could draw the inference that the defendant had committed other rapes.
Finally, the Assistant District Attorney improperly attempted to shift the burden of proof to the defendant in that (1) during her summation, she argued "Tell me, tell me why this woman would come into this courtroom and accuse the man of rape. Tell me why, ladies and gentlemen. Think about why. It is the thing that is not clearly established by the defense” (emphasis added; see, People v Kent, 125 AD2d 590), and (2) during her cross-examination of the defendant, she inquired about his need for, and preparation of, a defense.
Although some of the Assistant District Attorney’s remarks were not objected to, and the trial court did give curative *763instructions as to others, the cumulative effect of all the errors requires reversal of the conviction and a new trial, particularly in light of the less than overwhelming evidence of the defendant’s guilt. Thompson, J. P., Lawrence, Weinstein and Rubin, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902608/ | *415Judgment, Supreme Court, Bronx County (Kenneth L. Thompson, J.), entered June 21, 2011, after a jury trial, to the extent appealed from, apportioning fault 70% to defendants and 30% to plaintiff, unanimously reversed, on the law, without costs, and the matter remanded for a new trial on the issue of apportionment of fault.
The jury poll revealed that four out of the six jurors claimed that they did not vote for the apportionment percentages stated in the verdict sheet (see Duffy v Vogel, 12 NY3d 169, 174 [2009], citing Warner v New York Cent. R.R. Co., 52 NY 437, 442 [1873]). Thereafter, the trial court discharged the jury prior to resolving the contradiction between the verdict sheet read into the record and the results of the jury poll (see Matter of National Equip. Corp. v Ruiz, 19 AD3d 5, 12-13 [1st Dept 2005]). Accordingly, a new trial is required on the issue of apportionment of fault.
The trial court did not err in permitting the jury to hear evidence suggesting that the bus driver may have violated Transit Authority rules by not sounding his horn to alert plaintiff, a bicyclist, of the presence of the bus. This evidence is admissible since the subject rules do not impose a standard of care transcending that imposed by common law or the applicable provisions of the Vehicle and Traffic Law (see Lopez v New York City Tr. Auth., 60 AD3d 529, 531 [1st Dept 2009], lv denied 13 NY3d 717 [2010]; see also Vehicle and Traffic Law § 1146 [a]). Concur—Friedman, J.P, DeGrasse, Richter, Abdus-Salaam and Feinman, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/4158185/ | IN THE COURT OF APPEALS OF IOWA
No. 16-1653
Filed April 5, 2017
IN THE INTEREST OF L.H.,
Minor child,
S.M., Mother,
Petitioner-Appellee,
J.H., Father,
Respondent-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Robert J. Blink,
Judge.
Father appeals from an order terminating his parental rights pursuant to
Iowa Code chapter 600A (2015). AFFIRMED.
Jacob Van Cleaf of Van Cleaf & McCormack Law Firm, LLP, Des Moines,
for appellant father.
Ryan A. Genest of Culp, Doran & Genest, P.L.C., Des Moines, for
appellee mother.
Jesse A. Macro Jr. of Macro & Kozlowski, L.L.P., West Des Moines,
guardian ad litem for minor child.
Considered by Mullins, P.J., and Bower and McDonald, JJ.
2
MCDONALD, Judge.
This appeal arises out of a private action to terminate parental rights filed
pursuant to Iowa Code chapter 600A (2015). Sarah, the biological mother of
L.H., filed the action to terminate the parental rights of Johnathon, the biological
father of L.H. The district court granted the petition, finding and concluding the
father had abandoned the child within the meaning of Iowa Code section
600A.8(3). The father timely filed this appeal.
This court reviews de novo termination-of-parental-rights proceedings.
See In re C.A.V., 787 N.W.2d 96, 99 (Iowa Ct. App. 2010). “Although our review
is de novo, we do afford the decision of the district court deference for policy
reasons.” State v. Snow, No. 15-0929, 2016 WL 4801353, at *1 (Iowa Ct. App.
Sept. 14, 2016).
The petitioner must prove each element of her case by clear and
convincing evidence. See Iowa Code § 600A.8. The code provides a minor child
is abandoned when:
[A] parent, punitive father, custodian, or guardian rejects the duties
imposed by the parent-child relationship, guardianship, or
custodianship, which may be evinced by the person, while being
able to do so, making no provision or making only a marginal effort
to provide for the support of the child or to communicate with the
child.
Iowa Code § 600A.2(19). More specifically, because L.H. was older than six
months at the time of the termination hearing, section 600A.3(8)(b) provides:
If the child is six months of age or older when the termination
hearing is held, a parent is deemed to have abandoned the child
unless the parent maintains substantial and continuous or repeated
contact with the child as demonstrated by contribution toward
support of the child of a reasonable amount, according to the
parent’s means, and as demonstrated by any of the following:
3
(1) Visiting the child at least monthly when physically and
financially able to do so and when not prevented from doing so
by the person having lawful custody of the child.
(2) Regular communication with the child or with the person
having the care or custody of the child, when physically and
financially unable to visit the child or when prevented from
visiting the child by the person having lawful custody of the
child.
(3) Openly living with the child for a period of six months
within the one-year period immediately preceding the
termination of parental rights hearing and during that period
openly holding himself or herself out to be the parent of the
child.
The petitioner need not establish the respondent had the subjective intent to
abandon the child. See Iowa Code § 600A.8(3)(c). Instead, the petitioner can
establish objective intent by showing the respondent failed to partake in
“affirmative parenting to the extent it is practical and feasible in the
circumstances.” In re Goettsche, 311 N.W.2d 104, 106 (Iowa 1981);
The father first raises a procedural issue. He claims he was not provided
sufficient notice because the petition failed to identify the specific code provision
or provisions pursuant to which the mother sought termination of his parental
rights. The claim is without merit. The petition is captioned “Petition for
Termination of Parental Rights.” Paragraph four of the petition states that “[t]he
parent/child relationship now existing between the above-named child and her
biological father should be terminated.” Paragraph four, subparagraphs (a) and
(b) explicitly state termination was sought on the grounds of consent and
abandonment. The father was served with the petition. The petition was
sufficiently clear to provide the father with notice. See Smith v. Smith, 513
N.W.2d 728, 730 (Iowa 1994) (stating “petition must allege enough facts to give
defendant ‘fair notice’ of claim”).
4
The father’s procedural claim fails for an additional reason. He had actual
notice of the grounds upon which the mother sought to terminate his parental
rights. She sought to terminate his parental rights on the ground he abandoned
the child within the meaning of chapter 600A. On the eve of trial, the father filed
a trial brief arguing the evidence would not be sufficient to establish
abandonment within the meaning of chapter 600A. He cited and argued the
relevant code provisions. His actual knowledge of the grounds upon which
termination was sought defeats his claim of insufficient notice. See In re R.E.,
462 N.W.2d 723, 726 (Iowa Ct. App. 1990) (holding “notice to an attorney in
respect to a matter in which he is then acting for a client is notice to the client”).
On the merits, the father argues the mother failed to prove he abandoned
the child. We disagree. The parties began dating in February of 2012. L.H. was
born in May 2013. The parties cohabited for a period of time after L.H.’s birth.
During the time the parties cohabited, the father demonstrated little interest in the
child, preferring to play video games. The relationship deteriorated, and the
mother asked the father to move out. L.H. was fourteen or fifteen months old at
the time. After he moved out of the parties’ residence, the father initially provided
financial support for the child and exercised some visitation with the child. By
2015, however, the father discontinued substantial and continuous contact with
the child. The record reflects he stopped making any support payments in July
2015. The record also reflects the father had only three visits with the child
during 2015 and none after July 2015. Each of the three visits was of short
duration, lasting only minutes to an hour. The mother did admit she did not
permit the father to visit with the child on one occasion when he asked in
5
December 2015 due to her concern regarding the welfare of L.H. having
visitation with a virtual stranger. Like the district court, we find this single denial
of visitation does not overshadow the preceding year, a year in which the father
made little to no attempt to communicate or visit with L.H. We conclude there
was clear and convincing evidence the father abandoned the child due to the
father’s failure to visit the “child at least monthly when physically and financially
able to do so and when not prevented from doing so by the person having lawful
custody of the child.” Iowa Code § 600A.8(3)(b).
When the statutory ground or grounds authorizing the termination of
parental rights is satisfied, the petitioner must still prove termination of parental
rights is in the best interest of the child. See Iowa Code § 600A.1; In re R.K.B.,
572 N.W.2d 600, 602 (Iowa 1998). On de novo review, we conclude termination
of the father’s parental rights is in the best interest of the child. The father has
not demonstrated any sustained interest in the child. The child does not
recognize her father. The guardian ad litem concluded it was in L.H.’s best
interest to terminate the father’s parental rights to avoid a “yo-yo” effect based on
past performance. The father’s indifferent attitude toward the child is evidenced
by, among other things, the father’s failure to appear at the termination hearing.
The child is thriving in her present circumstances. The mother cohabits with her
fiancé, Michael. Michael has served as the child’s de facto father since the time
of the parties’ separation. Michael intends to adopt L.H. The child recognizes
Michael as her “dad or daddy.” The mother provided photographs of L.H. with
Michael partaking in bonding tasks such as pumpkin carving and assembling
puzzles together. The mother also provided photos of L.H. with her extended
6
family to demonstrate her network of support. It is in the best interest of the child
to terminate the father’s parental rights.
The father relies on In re K.W., No.14-2115, 2015 WL 6508910, at *4–5
(Iowa Ct. App. Oct. 28 2015), to support his contention that small gestures to
sustain a relationship with a child are enough to show that termination of parental
rights is not in the child’s best interests. We disagree with the proposition,
generally, that sending a few messages per year to the child is in the best
interest of the child. Regardless, the father’s relationship with L.H. is materially
different than the parental relationship in K.W. Unlike the child in that case, L.H.
is unaware of her father. We conclude K.W. is distinguishable from the present
case and does not militate in favor of preserving the parent-child relationship in
this case.
The mother requests appellate attorney fees. She does not identify the
statutory authority authorizing an award of appellate attorney fees in a private
termination proceeding. We deny her request for attorney fees. See In re A.F.,
No. 16-0650, 2016 WL 6652390, at *5 (Iowa Ct. App. Nov. 9, 2016) (denying
request for appellate attorney fees in private termination proceeding).
AFFIRMED. | 01-03-2023 | 04-05-2017 |
https://www.courtlistener.com/api/rest/v3/opinions/4158043/ | STATE OF MICHIGAN
COURT OF APPEALS
PEOPLE OF THE STATE OF MICHIGAN, UNPUBLISHED
April 4, 2017
Plaintiff-Appellee,
v No. 328341
Macomb Circuit Court
PAT RICHARD DOWDY, LC No. 2013-003792-FH
Defendant-Appellant.
Before: STEPHENS, P.J., and SERVITTO and SHAPIRO, JJ.
PER CURIAM.
Defendant appeals by delayed leave granted1 the fees and costs imposed by the trial court
when defendant pleaded guilty to violating the terms of his probation. The trial court revoked
defendant’s probation, sentenced him to 60 days’ jail time, and ordered him to pay $120 in court
costs and $120 in probation oversight fees, among other things. We affirm in part, but vacate a
portion of defendant’s judgment of sentence, and remand for the ministerial task of amending
defendant’s judgment of sentence.
On April 3, 2014, defendant pleaded guilty to false pretenses with the intent to defraud
$200 or more but less than $1,000, MCL 750.218(3)(a). After entering his guilty plea, defendant
was sentenced to 12 months’ probation, 40 hours of community service, and the completion of a
Class ‘A’ Life Decisions course. The trial court also ordered defendant to pay $53 in state
minimum cost, a $75 crime victim fee, $120 in court costs, $120 in probation oversight fees, and
$950 in additional defense costs. Defendant did not object to any of the costs imposed.
Defendant did not seek leave to appeal that judgment of sentence.
Defendant was arraigned before the trial court again on January 8, 2015, for violating his
probation. During this proceeding, defendant pleaded guilty to violating his probation in several
ways, including breaking into a high school. As a result, defendant’s probation was revoked, and
he was sentenced to 60 days’ jail time, with credit for one day served. In his January 22, 2015
judgment of sentence, the trial court ordered defendant to pay fees and costs almost identical to
1
People v Dowdy, unpublished order of the Court of Appeals, entered September 4, 2015
(Docket No. 328341).
-1-
those it imposed on defendant in his initial judgment of sentence, the only differences being that
it increased defendant’s additional defense costs to $955, and added a 20% late fee of $527.12
for defendant’s failure to pay the fees and costs previously imposed (except for his probation
oversight fees, which defendant had paid in full).
Defendant first argues that the trial court erred when it ordered him to pay a $120 county
oversight fee as part of his January 22, 2015 judgment of sentence. We agree.
A defendant must object to a trial court’s imposition of costs and fees to preserve the
issue on appeal. People v Konopka (On Remand), 309 Mich App 345, 356; 869 NW2d 651
(2015), citing People v Dunbar, 264 Mich App 240, 251; 690 NW2d 476 (2004), overruled on
other grounds by People v Jackson, 483 Mich 271, 290; 769 NW2d 630 (2009). Defendant
failed to object when the trial court ordered him to pay the $120 oversight fee, thus, this issue is
not preserved.
Because defendant’s challenge to the trial court’s imposition of an oversight fee was not
preserved, we review defendant’s challenge for plain error. Konopka, 309 Mich App at 356. To
avoid forfeiture under the plain error rule, the defendant must demonstrate that an error occurred,
the error was plain, and the plain error affected substantial rights. People v Buie, 285 Mich App
401, 407; 775 NW2d 817 (2009), citing People v Carines, 460 Mich 750, 763; 597 NW2d 130
(1999). “The third prong requires a showing of prejudice, which occurs when the error affected
the outcome of the lower court proceedings.” People v Putman, 309 Mich App 240, 243; 870
NW2d 593 (2015). This Court reviews questions of statutory interpretation de novo. Konopka,
309 Mich App at 356.
In general, the scope of a defendant’s appeal from a resentencing following the
revocation of probation is limited to only the issues the defendant could not have raised in an
appeal from their initial conviction. See People v Kaczmarek, 464 Mich 478, 482-483, 485; 628
NW2d 484 (2001). Defendant’s challenge relating to his probation oversight fees does fall
within the scope of this appeal because he challenges the trial court’s authority to impose a
probation oversight fee following the revocation of his probation, which is an issue defendant
could not have raised in an appeal from his original April 3, 2014 judgment of sentence.
The trial court ordered this probation oversight fee without explanation on the record, and
thus, it is unclear whether the trial court was reimposing the fee it ordered as part of defendant’s
April 3, 2014 judgment of sentence, or if it was imposing a new oversight fee. Although it
appears to be simply a reimposition of the original oversight fee; if that is the case, this was error
because defendant had paid the original fee in full by the time his probation was revoked. The
court acknowledged the same on the record. If the trial court were enacting a new probation
oversight fee, it was without authority to do so.
Despite being the focus of the briefing by the parties on this issue, MCL 769.1k(1)(b)(ii)
and MCL 769.1k(1)(b)(iii) have no bearing on defendant’s challenge to the trial court’s authority
to impose a probation oversight fee. Pursuant to MCL 769.1k(1)(b), “the court may impose any
or all” of the fees under MCL 769.1k(1)(b)(ii) and MCL 769.1k(1)(b)(iii). Thus, MCL
769.1k(1)(b)(ii) and MCL 769.1k(1)(b)(iii) grant trial courts the authority to impose certain
fines, costs, and assessments at their discretion. The relationship between these two provisions
-2-
was clarified in Konopka, where this Court held that MCL 769.1k(1)(b)(iii) “provides for an
award of certain costs that are not independently authorized by the statute for the sentencing
offense, in contrast to the amended version of MCL 769.1k(1)(b)(ii), which provides that a court
may impose ‘[a]ny cost authorized by the statute for a violation of which the defendant entered a
plea of guilty or nolo contendere or the court determined that the defendant was guilty.’ ”
Konopka, 309 Mich App at 357, quoting MCL 769.1k(1)(b)(ii) (alteration in original). In
addition, costs imposed under MCL 769.1k(1)(b)(iii) must be “reasonably related to the actual
costs incurred by the trial court . . . .”
A probation oversight fee is not a cost authorized by the statute defendant violated, MCL
750.218(3)(a), nor is it a cost that is reasonably related to the actual costs incurred by the trial
court in defendant’s revocation of probation proceeding. Thus, MCL 769.1k(1)(b)(ii) and MCL
769.1k(1)(b)(iii) are irrelevant here. The statute that authorizes the imposition of probation
oversight fees is MCL 771.3(1)(d), which requires probationers sentenced in circuit court to pay
a probation supervision fee. The trial court properly fulfilled this obligation when it ordered
defendant to pay a $120 probation oversight fee as part of his April 3, 2014 judgment of
sentence. The trial court erred however when, following the revocation of defendant’s probation,
it imposed a $120 probation oversight fee in defendant’s January 22, 2015 judgment sentence.
The trial court revoked defendant’s probation when he pleaded guilty to violating his
probation on January 8, 2015. Once defendant’s probation was revoked, the trial court was
authorized to sentence defendant “in the same manner and to the same penalty as the court might
have done if the probation order had never been made.” MCL 771.4. However, the trial court
could not impose a probation oversight fee on defendant pursuant to MCL 771.3(1)(d), because
defendant was no longer a probationer. See People v Krieger, 202 Mich App 245, 247-248; 507
NW2d 749 (1993) (holding that, once the defendant’s probation was revoked, the trial court
lacked the authority to retain the imposition of costs that were assessed as a condition of the
defendant’s probation), superseded by statute on other grounds as stated in People v Lloyd, 284
Mich App 703, 709-710; 774 NW2d 347 (2009).
Thus, the trial court plainly erred when it imposed a probation oversight fee as part of
defendant’s January 22, 2015 judgment of sentence because it lacked the authority to impose this
fee under any statute. The error prejudiced defendant because he would not have had this fee
imposed on him but for the trial court’s error. Finally, relief is justified in this case because the
error resulted in the imposition of a fee that was not authorized by law, and permitting such a fee
to stand would severely affect the fairness, integrity and public reputation of judicial
proceedings. Therefore, we vacate the portion of defendant’s January 22, 2015 judgment of
sentence which ordered the payment of the $120 probation oversight fee, and remand for the
ministerial task of amending defendant’s judgment of sentence.
Defendant’s second argument on appeal is that the trial court erred when it ordered him
to pay $120 in court costs because it did not articulate, on the record, its reasons for doing so.
The trial court imposed the same amount of court costs in defendant’s April 3, 2014 judgment of
sentence, and defendant failed to challenge the imposition of costs at that time. It appears that
the trial court was simply reimposing the same cost that defendant had failed to pay. To that
extent, defendant’s challenge to the trial court’s imposition of $120 in court costs is outside of
the scope of this appeal because defendant could have raised this issue in an appeal from his
-3-
April 3, 2014 judgment of sentence. See Kaczmarek, 464 Mich at 485. To the extent this is a
newly imposed cost, the trial court was authorized to impose any cost reasonably related to the
actual costs incurred by the trial court under MCL 769.1k(b)(iii). Defendant concedes that $68
was allowable under MCL 769.1 but that the trial court did not articulate a reason on the record
for the additional $52 in court costs. Defendant has not, however, provided any authority
indicating that the trial court must provide solid figures to support his assessment of costs. We
cannot objectively say that $52 would be unreasonable or unrelated to those costs allowed under
MCL 769.1k(b)(iii), which include salaries for court personnel and necessary expenses for the
operation of the court.
Defendant’s third argument on appeal is that, because he is indigent, he is entitled to an
ability-to-pay assessment in accordance with Jackson, 483 Mich at 292, concerning the
assessment of court-appointed attorney fees, or that this Court should vacate the portion of his
sentence ordering him to pay those fees. Defendant failed to object when the trial court ordered
him to pay attorney fees, thus, this issue is not preserved. Because defendant’s challenge to the
trial court’s order to pay attorney fees was not preserved, this Court reviews defendant’s
challenge for plain error. Konopka, 309 Mich App at 356. This Court reviews questions of
constitutional law de novo. Jackson, 483 Mich at 277.
Under MCL 769.1k(b)(iv), the trial court was authorized to order defendant to repay the
cost “of providing legal assistance to the defendant.” However, in Jackson, the Michigan
Supreme Court held that once a trial court attempts to enforce an imposition of court-appointed
attorney fees “the defendant must be advised of this enforcement action and be given an
opportunity to contest the enforcement on the basis of his indigency.” Jackson, 483 Mich at 292.
If the defendant makes a timely challenge in the trial court to the enforcement of the fee, then the
trial court is required to evaluate if a defendant “is indigent and unable to pay at that time or
whether forced payment would work a manifest hardship on the defendant at that time.” Id. at
292-293.
The trial court entered two orders requiring defendant to pay the costs of his appointed
counsel. Defendant’s January 22, 2015 judgment of sentence ordered him to pay $9552 in
“Additional Defense Costs,” and on January 29, 2015, the trial court ordered defendant to
reimburse Macomb County for the costs of his appellate defense.
Defendant has not challenged the enforcement of these fees before the trial court. In
accord with Jackson, defendant may challenge the trial court’s enforcement of the imposition of
attorney fees due to his current indigency, but he must first raise this in a timely challenge before
the trial court, where the trial court will consider his ability to pay at that time. Jackson, 483
2
We note that the trial court increased defendant’s “Additional Defense Costs” by $5 in his
January 22, 2015 judgment of sentence without explanation. Defendant does not challenge this
increase on appeal, despite the fact he represented himself during his probation revocation
hearing. Furthermore, a check of the trial court file following oral argument confirms that
defendant was assessed $955, total, for defense costs, and not $950 plus $955.
-4-
Mich at 292-293. Because defendant has failed to challenge the enforcement of the imposed fees
would be premature.
Additionally, even if we wished to consider the merits of defendant’s challenge, he has
made no showing that the trial court has actually attempted to enforce the collection of these
fees. Defendant has also failed to provide any proof of his present indigency. Thus, we would
be unable to exercise any meaningful review here even if we desired to do so.
Finally, defendant requests that this Court waive defendant’s late fee of $527.12 pursuant
to MCL 600.4803(1), through our authority to grant further or different relief as a case may
require under MCR 7.216(A)(7). Defendant did not raise this issue before the trial court, and
thus failed to preserve this issue for appeal. People v Dupree, 486 Mich 693, 703; 788 NW2d
399 (2010). We therefore review this claim for plain error. Konopka, 309 Mich App at 356.
In relevant part, MCL 600.4803(1) authorizes the imposition of a 20% late penalty on a
person who fails to pay court costs within 56 days of the day payment is due. The statute also
authorizes “the court” to modify the date payment is due, to establish installment payments, or to
waive the late penalty upon the request of the person subject to it. MCL 600.4803(1).
We decline to determine whether defendant’s late penalty should be waived because,
under MCL 600.4803(1), defendant is free to request that the trial court waive his late penalty,
and it is unclear why defendant has instead requested relief directly from this Court. There is no
evidence in the record that defendant has already requested that the trial court waive his late
penalty, and defendant fails to specifically articulate why this Court should directly grant him
relief. “An appellant may not merely announce his position and leave it to this Court to discover
and rationalize the basis for his claims, nor may he give only cursory treatment with little or no
citation of supporting authority.” People v Payne, 285 Mich App 181, 195; 774 NW2d 714
(2009), quoting People v Kelly, 231 Mich App 627, 640-641; 588 NW2d 480 (1998) (quotation
marks omitted).
We affirm in part, but vacate the portion of defendant’s judgment of sentence imposing a
$120 probation oversight fee, and remand for the ministerial task of amending defendant’s
judgment of sentence. We do not retain jurisdiction.
/s/ Cynthia Diane Stephens
/s/ Deborah A. Servitto
/s/ Douglas B. Shapiro
-5- | 01-03-2023 | 04-05-2017 |
https://www.courtlistener.com/api/rest/v3/opinions/4534800/ | IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
SAMUEL L. GUY, City Council )
Member at Large of the City of )
Wilmington, )
)
Petitioner, )
)
v. ) C.A. No.: N19C-11-064 AML
)
CITY OF WILMINGTON, a municipal )
corporation, )
)
Respondent. )
Submitted: February 13, 2020
Decided: May 15, 2020
Upon Respondent’s Motion to Dismiss: GRANTED
Upon Petitioner’s Motion for Partial Summary Judgment: MOOT
MEMORANDUM OPINION
Samuel L. Guy, Esquire, of The Law Office of Samuel L. Guy, Wilmington,
Delaware, Petitioner.
Daniel A. Griffith, Esquire, and Kaan Ekiner, Esquire, of WHITEFORD TAYLOR
PRESTON LLC, Wilmington, Delaware, Attorneys for Respondent.
LeGROW, J.
This dispute arises from contested votes on three resolutions that were
considered during a November 2019 Wilmington City Council meeting. Petitioner
is an elected member-at-large of the Wilmington City Council. A simple majority
of the City Council approved the resolutions, but the Council president declared the
resolutions defeated because they did not receive supermajority approval, which the
City Council president concluded was needed under the Council’s rules. The parties
disagree as to whether the relevant resolutions required (i) a simple majority vote of
all City Council members, or (ii) a two-thirds supermajority vote because the
resolutions were in derogation of a City Council member’s existing rights or
privileges.
The respondent’s motion to dismiss requires this Court to resolve three issues.
First, does the case present a justiciable controversy? Second, if justiciable, does the
rule requiring a supermajority vote contradict the city charter? Finally, if the
supermajority rule is valid, did it apply to the resolutions at issue? For the reasons
that follow, I conclude respondent’s motion to dismiss should be granted because,
although the case presents a justiciable controversy, the rule requiring a
supermajority vote to amend certain rules does not violate the city charter, and the
defeated resolutions fell within the rule requiring a supermajority vote.
FACTUAL AND PROCEDURAL BACKGROUND
Respondent, the City of Wilmington (the “City”), is a Delaware municipality
organized under the Wilmington City Charter (the “Charter”).1 The City’s
legislative functions are invested in the City Council (the “Council”), which consists
of 13 members: the Council President (the “President”), eight members elected from
separate geographical districts, and four members elected from the City at large.
Section 2-104 of the Charter empowers the Council to “determine its own
rules and order of business, provide for such committees as it deems necessary[,]”
and “employ and fix the salaries of such persons as may be necessary for a proper
discharge of its business.” On January 3, 2017, the Council adopted The Council of
the City of Wilmington Rules (the “Rules”),2 which govern the Council’s actions
while conducting business, including meeting procedures and voting processes.
Rule 8, which governs resolutions, provides that the “vote of a majority of the
members in attendance and voting shall prevail unless otherwise provided by these
rules or the provisions of the City Charter.” Rule 23 additionally provides that “[n]o
rule may be suspended or amended in derogation of an existing right or privilege of
any member, except by a two-thirds vote of all the members of Council.”
1
Wilmington City Charter (hereinafter “Charter”), https://library.municode.com/de/wilmington/
codes/code_of_ordinances?nodeId=ORCHBOWI.
2
Stipulated Facts, Ex. 9 Rules of Wilmington City Council (hereinafter “Rule”). This exhibit
reflects the most recent revised version dated Nov. 1, 2019.
2
The Council holds bi-monthly meetings. During the November 1, 2019
Council meeting, four resolutions were presented for the Council’s consideration.
Resolution 4727, which expanded the public comment period during Council
meetings, was voted on and adopted.3 The other three resolutions, however, were
voted upon but deemed defeated because they did not receive a supermajority of
votes (collectively, the “Defeated Resolutions”): (i) Resolution 4728, which would
allow the public to address the Council on any topic, not just those on the agenda,
during Committee of the Whole meetings; (ii) Resolution 4729, which would
establish a Personnel Committee to oversee personnel-related matters with the
Council and throughout the City at large; and (iii) Resolution 4730, which clarified
that the hiring, firing, change of pay rate, or discipline of a Council staff member
required Council approval.
The Defeated Resolutions each received seven “yea” votes.4 Petitioner,
Council Member-At-Large Samuel L. Guy, contends the Defeated Resolutions
received a sufficient majority of votes, seven Council members, to render the
Defeated Resolutions adopted, and that a two-thirds supermajority was not required.
3
Stipulated Facts, Ex. 3 Recorded Roll Call Votes of the Special City Council Meeting (Nov. 1,
2019). Resolution 4727 received seven “yea” votes and four “nay” votes with one abstention and
one “present.”
4
Id. Resolutions 4728 and 4730 received five “nay” votes with one abstention. Resolution 4729
received four “nay” votes with one abstention and one “present.”
3
The City contends Rule 23 applies to the Defeated Resolutions and therefore they
only could be adopted with a supermajority vote.
On November 7, 2019, Petitioner filed this action seeking a declaratory
judgment that Council members are authorized to amend the Rules through their
rights under the Charter, and that seven Council members constitute a sufficient
number of votes to adopt the Defeated Resolutions. Petitioner simultaneously filed
a motion for partial summary judgment reiterating the relief sought in the complaint.
The City then filed a motion to dismiss the complaint for non-justiciability and
failure to state a claim. The parties simultaneously briefed and argued those motions.
The City contends Petitioner’s claims are non-justiciable because the
complaint raises a political question and “seeks to entangle the judiciary in a purely
intra-legislative dispute.”5 The City also argues that, even if the claims are
justiciable, the complaint must be dismissed as a matter of law because the plain
language of the Rules and Charter show that the resolutions properly were defeated.
Petitioner, on the other hand, argues the claims are justiciable because the complaint
does not raise a political question, but simply asks the Court to determine the
applicable voting standard for Council resolutions. Petitioner contends he is entitled
to summary judgment on the merits of his claims because Rule 23 is in derogation
5
Def. City of Wilmington’s Opening Br. in Supp. of its Mot. to Dismiss Pl.’s Compl. (hereinafter
“Def.’s Mot.”) 3.
4
of Section 2-201 of the Charter and, under Section 2-201, the Defeated Resolutions
received a majority vote and therefore were approved.
Petitioner’s motion for summary judgment raises the same issues as the
motion to dismiss. For the reasons that follow, the City’s motion to dismiss is
granted because the complaint fails to state a claim. The Petitioner’s motion for
summary judgment therefore is moot.
ANALYSIS
The Court first must determine whether Petitioner’s complaint presents a
justiciable controversy because the Court’s jurisdiction is a threshold inquiry.6 If
the case is justiciable, the Court then may consider the merits of Petitioner’s claims.
I. The case presents a justiciable controversy.
Petitioner seeks a declaratory judgment that the Defeated Resolutions validly
were adopted because (1) the supermajority voting rule in Rule 23 contravenes the
Charter when applied to votes on Council resolutions, or (2) if Rule 23 applies to
resolutions, the Defeated Resolutions do not derogate a Council member’s existing
rights or privileges and therefore do not require a supermajority vote.
6
See Crescent/Mach I Partners L.P. v. Dr Pepper Bottling Co. of Texas, 962 A.2d 205, 208 (Del.
2008); see also Baier v. Upper New York Inv. Co. LLC, 2018 WL 1791996, at *5 (Del. Ch. Apr.
16, 2018); K&K Screw Prods., L.L.C. v. Emerick Capital Invs., Inc., 2011 WL 3505354, at *6
(Del. Ch. Aug. 9, 2011).
5
In Delaware, a justiciable controversy must exist before a court can address a
pending dispute.7 In recognition of the separation of powers between the three
branches of government and the need for each branch to operate independently
within their constitutionally conferred field of activity, courts generally consider
“political questions” to be non-justiciable. Cases that present “political questions”
bear at least one of the following attributes: (1) “a textually demonstrable
constitutional commitment of the issue to a coordinate political department; or a lack
of judicially discoverable and manageable standards for resolving it;” (2) “the
impossibility of deciding [the issue] without an initial policy determination of a kind
clearly for nonjudicial discretion;” (3) “the impossibility of a court’s undertaking
independent resolution without expressing lack of the respect due coordinate
branches of government;” or (4) “an unusual need for unquestioning adherence to a
political decision already made; or the potentiality of embarrassment from
multifarious pronouncements by various departments on one question.”8
The City contends the claims are non-justiciable because the complaint raises
a political question.9 The City argues the complaint does not “invoke any
constitutional protections or rights that have purportedly been violated” that would
7
Crescent, 962 A.2d at 208.
8
State, ex rel. Oberly v. Troise, 526 A.2d 898, 904 (Del. 1987); see Baker v. Carr, 369 U.S. 186,
217 (1962).
9
Def.’s Mot. 4.
6
“justify judicial involvement[,]” there is a “textually demonstrable commitment as
to the Council’s plenary authority not only to legislate, but also to determine its rules
and enforcement mechanisms[,]” and judicial intervention would have a “slippery
slope” effect due to the “lack of limitations for inclusion or exclusion for the remedy
sought” by Petitioner.10
In its argument, the City relies upon State, ex rel. Oberly v. Troise11 and
Pellegrino v. O’Neill.12 In Troise, the State Attorney General sought to test the
validity of the Governor’s full-term commissions issued without the consent of the
Senate after the Senate failed to act on the Governor’s nominations for a prolonged
period of time.13 The issue required the Court to interpret Article III, Section 9 of
the Delaware Constitution, which allows the Governor to appoint certain public
officials based on the majority consent of the Senate.14 The Delaware Supreme
Court ultimately opined the issue was justiciable because it turned on the meaning
of a constitutional provision.15 The Court ruled the commissions invalid because
Article III, Section 9’s plain language “clearly assign[ed] the confirmation power to
the Senate[.]”16
10
Id. at 6-9.
11
526 A.2d 898.
12
480 A.2d 476 (Conn. 1984).
13
526 A.2d at 899.
14
Id. (citing Del. Const. art. III, § 9).
15
Id. at 905.
16
Id.
7
In reaching its decision on justiciability, the Troise Court considered the
Connecticut Supreme Court’s decision in Pellegrino, a declaratory judgment action
that sought appointment of more civil trial judges “in order to implement the
constitutional right to justice without delay[.]” 17 The relief sought would have
required the judiciary to compel the legislature to create additional judgeships. The
Connecticut Supreme Court held the issue non-justiciable because of a textually
demonstrable commitment to the legislature in determining the number of and
appointment of judges. The Connecticut court concluded judicial involvement
would encroach upon the province of the legislature.18
Troise and Pellegrino generally stand for the proposition that when the
question at issue requires the Court to interpret a statute or rule, that question is not
a political question because the judicial branch’s function is to interpret the law.19
For example, in Smith v. Sussex County Council, the petitioner sought a judicial
determination that a challenged ordinance validly was adopted, and the Court
considered the issue because it required judicial interpretation of a statute.20
Additionally, in duPont v. Director of Div. of Revenue of Dept. of Finance, the Court
17
Pellegrino, 480 A.2d at 477.
18
Id. at 484 (“We have declared ourselves unable to respond to its demand in the present context
without exceeding our own constitutional authority. The answer must lie in the hearts and minds
of the legislators, who are sworn to support the state as well as the federal constitution and to
discharge their duties to the best of their abilities. More fundamentally, it must rest with the people
who elect them.”) (internal citations omitted).
19
Marbury v. Madison, 5 U.S. 137 (1803).
20
632 A.2d 1387 (Del. Ch. July 13, 1993).
8
stated “the power of the [legislature] . . . is subject to constitutional restrictions,
whether express or necessarily implied . . . , and, in an appropriate case, it is the duty
of the Court to define such restrictions.”21
The question of whether Rule 23’s supermajority vote requirement
contravenes the Charter is justiciable because it requires the Court to interpret the
Charter. This interpretation does not impermissibly intertwine the judiciary with the
legislative branch’s power. There is no textually demonstrable constitutional
commitment of this issue to another branch, and, unlike the questions before the
courts in Troise and Pellegrino, there are well-defined judicial standards by which
courts routinely interpret statutes and rules.
Petitioner’s second question presents a closer issue as to justiciability. The
Charter imbues the Council with the authority to adopt and enforce its own rules,22
and in order to enforce the Rules, the Council necessarily must interpret them.
Although Petitioner complains that without court intervention the President will
have unfettered authority to defeat any resolution under the guise of requiring a
supermajority vote, that argument ignores the separation of powers and the
principles of an electoral system of government. As the Troise Court cautioned,
courts must be careful not to insert themselves in resolving a political question that
21
347 A.2d 653, 657 (Del. 1975).
22
Charter § 2-104.
9
would “entangle the judiciary in a political thicket, and might ultimately indicate a
‘lack of the respect due coordinate branches of government.’”23 In the present case,
the mechanism for controlling the President ultimately lies with the electorate
through the democratic process. But, determining whether Rule 23 applies to the
Defeated Resolutions does not require the Court to resolve the dispute based on
standards that are not judicially manageable, nor does it require the Court to make
policy decisions, which necessarily are reserved for the other branches.
The Court need not, however, conclusively determine whether the second
question is justiciable because, even if it is justiciable, it is clear that the case should
be dismissed under Superior Court Rule 12(b)(6).
II. The complaint fails to state a claim for declaratory relief.
On a motion to dismiss, the Court must determine whether the plaintiff “may
recover under any reasonably conceivable set of circumstances susceptible of
proof[.]”24 A court may grant the motion if “it appears to a reasonable certainty that
under no state of facts which could be proved to support the claim asserted would
[the] plaintiff be entitled to relief.”25 When applying this standard, the Court will
23
526 A.2d at 905 (citing Baker, 369 U.S. at 217).
24
Holmes v. D’Elia, 2015 WL 8480150, at *2 (Del. Dec. 8, 2015) (quoting Spence v. Funk, 396
A.2d 967, 968 (Del. 1978)).
25
Fish Eng’g Corp. v. Hutchinson, 162 A.2d 722, 724 (Del. 1960).
10
accept as true all non-conclusory, well-pleaded allegations26 and must draw all
reasonable factual inferences in favor of the non-moving party.27
A. The supermajority vote required to amend certain rules does not violate
the Charter.
The interplay between Rule 23 and Section 2-201 of the Charter requires the
Court to construe both provisions. Delaware courts follow settled principles of
statutory interpretation, which require giving effect to the plain language of an
unambiguous rule or statute.28 When a statute is clear and unambiguous, statutory
interpretation is not needed as courts “have no authority to vary the terms . . . or
ignore mandatory provisions.”29 A statute only is ambiguous if “it is reasonably
susceptible to different interpretations, or if giving a literal interpretation to the
words of the statute would lead to an unreasonable or absurd result that could not
have been intended by the legislature.”30
Rule 23 states that “[n]o rule may be suspended or amended in derogation of
an existing right or privilege of any member, except by a two-thirds vote of all the
members of Council.” Petitioner argues that Rule 23 contradicts Section 2-201,
26
Pfeffer v. Redstone, 965 A.2d 676, 683 (Del. 2009).
27
Doe v. Cahill, 884 A.2d 451, 458 (Del. 2005) (citing Ramunno v. Cawley, 705 A.2d 1029, 1034
(Del. 1998)).
28
Ovens v. Danberg, 149 A.3d 1021, 1024 (Del. 2016).
29
Board of Adjustment of Sussex Cty. v. Verleysen, 36 A.3d 326, 331 (Del. 2012) (quotations and
citations omitted).
30
Evans v. State, 212 A.3d 308, 314 (Del. Super. 2019) (quoting Arnold v. State, 49 A.3d 1180,
1183 (Del. 2012)) (internal quotations omitted).
11
which only requires a simple majority vote of Council members. Section 2-201 of
the Charter, however, applies to the “consideration and passage of ordinances.” The
Charter expressly distinguishes between resolutions and ordinances.31 Although
Petitioner argues Section 2-201 applies to all Council votes, he offers no textual
support for that position, and there is no ambiguity in Section 2-201’s scope. The
Defeated Resolutions are not ordinances, and Rule 23’s requirement for a
supermajority vote for certain resolutions therefore does not conflict with Section 2-
201. By requiring a majority vote of all the members of the Council, including the
President, in order to adopt an ordinance, the Charter does not restrict the Council’s
ability to adopt rules requiring some greater or lesser vote in order for the Council
to act by resolution.
B. On their face, the Defeated Resolutions are in derogation of an existing
right or privilege of a Council member.
Finally, Petitioner argues that Rule 23’s supermajority provision did not apply
to the Defeated Resolutions. Petitioner’s argument, however, is unpersuasive.
Resolutions 4728, 4729, and 4730 each would restrict or alter an existing right or
privilege of a Council member. Resolution 4728 would have expanded the
permissible scope of public comment during Council meetings, allowing the public
31
Compare Charter § 2-304 (titled “Authentication, recording, codification and printing of
ordinances”), with id. § 2-403 (“the council by resolution may employ, or authorize the
employment by its committees”).
12
to comment on any topic without limitation. This resolution is contrary to the
President’s existing power under Rule 332 to establish and enforce rules for speakers
to ensure proper decorum. Robert’s Rules of Order, adopted in Rule 25,33 define
decorum as confining remarks to the issues at hand.34
Resolution 4729 sought to add a personnel committee to the standing
committee, name the Chair of the newly formed committee, and give the President
Pro Tem the authority to name members to that committee. Rule 12, however,
establishes that the President has the power to appoint special committees, and Rules
10 and 11 state the President has the authority to appoint committee chairs and vice
chairs and to oversee all committees. Resolution 4729’s adoption would change the
President’s existing rights and obligations, as it would require the President to
preside over an additional committee and remove the President’s right to name the
committee’s chair and the committee’s other members.
Finally, Resolution 4730, if adopted, would have established that the Council
can hire, fire, and change the pay rate for staff. That new resolution would
contravene Resolution 17-002,35 which establishes that the President has the sole
32
Rule 3 (“The President shall establish and enforce rules for speakers to ensure proper decorum
is maintained including, but not limited to, enforcing the three-minute time-limit for each speaker
and/or prohibiting the use of obscene or profane language.”).
33
Rule 25 (“All questions of parliamentary procedure not provided for in these rules shall be
decided in accordance with the latest edition of Robert’s Rules of Order.”).
34
Stipulated Facts, Ex. 11 Robert’s Rules of Order (11th ed.).
35
Stipulated Facts, Ex. 8 Resolution 17-002 (Jan. 3, 2017).
13
authority to fire staff. Accordingly, all three resolutions would have abridged the
President’s existing rights and therefore fell within Rule 23’s supermajority voting
requirement.
III. Petitioner’s partial motion for summary judgment is denied as moot.
Petitioner’s motion for partial summary judgment seeks judgment as a matter
of law that Rule 23’s supermajority voting requirement is invalid in light of Section
2-201 of the Charter, or that the Defeated Resolutions did not require a supermajority
vote. This Court’s decision granting the City’s motion to dismiss resolves both
issues in the City’s favor and therefore renders Petitioner’s partial motion for
summary judgment moot.
CONCLUSION
For the foregoing reasons, the City of Wilmington’s Motion to Dismiss is
GRANTED, and Samuel L. Guy’s Motion for Partial Summary Judgment is
DENIED AS MOOT. IT IS SO ORDERED.
14 | 01-03-2023 | 05-15-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/4534799/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 19-1869
AMANUEL TEREFE,
Plaintiff - Appellant,
v.
STANLEY BLACK & DECKER, INC.,
Defendant - Appellee.
Appeal from the United States District Court for the District of Maryland, at Greenbelt.
Peter J. Messitte, Senior District Judge. (8:18-cv-00419-PJM)
Submitted: April 6, 2020 Decided: May 15, 2020
Before DIAZ and FLOYD, Circuit Judges, and TRAXLER, Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
Elizabeth Christi Cunningham, HOWARD UNIVERSITY SCHOOL OF LAW,
Washington, D.C., for Appellant. Suzzanne W. Decker, MILES & STOCKBRIDGE, PC,
Baltimore, Maryland; Catharine Elizabeth Lubin, BALLARD SPAHR, LLP, Philadelphia,
Pennsylvania, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Amanuel Terefe sued Stanley Black & Decker, Inc. (“Black & Decker”), under Title
VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. §§ 2000e-2000e-17 (2018), 42
U.S.C. § 1981 (2018), and the Maryland Fair Employment Practices Act, Md. Code Ann.,
State Gov’t §§ 20-601 to 20-611 (2014 & Supp. 2019). Terefe, who worked for Black &
Decker as a test engineer, asserted that Black & Decker failed to promote him to senior
engineer because of his race and retaliatorily terminated him after he filed a discrimination
charge with the Equal Employment Opportunity Commission. Terefe now appeals the
district court’s order granting Black & Decker’s motion for summary judgment. We
affirm.
“We review a district court’s decision to grant summary judgment de novo, applying
the same legal standards as the district court, and viewing all facts and reasonable
inferences therefrom in the light most favorable to the nonmoving party.” Carter v.
Fleming, 879 F.3d 132, 139 (4th Cir. 2018) (internal quotation marks omitted). Summary
judgment is appropriate “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). “[T]he pertinent inquiry is whether there are any genuine factual issues that properly
can be resolved only by a finder of fact because they may reasonably be resolved in favor
of either party.” Variety Stores, Inc. v. Wal-Mart Stores, Inc., 888 F.3d 651, 659 (4th Cir.
2018) (internal quotation marks omitted).
“Title VII forbids (i) employment practices that discriminate against an employee
on the basis of race, color, religion, sex, or national origin . . . and (ii) retaliation against an
2
employee for opposing adverse actions that [he] reasonably suspects to be unlawful under
Title VII.” Strothers v. City of Laurel, 895 F.3d 317, 326-27 (4th Cir. 2018) (citations
omitted). Section 1981 provides that “[a]ll persons within the jurisdiction of the United
States shall have the same right . . . to make and enforce contracts . . . 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.” 42 U.S.C. § 1981(a). A plaintiff asserting claims for
discriminatory treatment under Title VII and § 1981 “may avoid summary judgment by
proceeding under the burden-shifting framework established in [McDonnell Douglas Corp.
v. Green, 411 U.S. 792 (1973)].” Haynes v. Waste Connections, Inc., 922 F.3d 219, 223
(4th Cir. 2019); see Guessous v. Fairview Prop. Invs., LLC, 828 F.3d 208, 216 (4th Cir.
2016). Maryland courts apply the McDonnell Douglas framework to such employment
discrimination claims under state law. See Dobkin v. Univ. of Balt. Sch. of Law, 63 A.3d
692, 699-701 (Md. Ct. Spec. App. 2013).
Under that framework, to establish a prima facie case of discriminatory failure to
promote, a plaintiff must show that: (1) he is a member of a protected group; (2) he applied
for a specific position; (3) he was qualified for that position; and (4) the defendant failed
to promote the plaintiff under circumstances that give rise to an inference of discrimination.
Williams v. Giant Food Inc., 370 F.3d 423, 430 (4th Cir. 2004). “A prima facie case of
retaliation requires proof that: (1) the plaintiff engaged in protected activity, (2) [h]e
suffered an adverse employment action, and (3) there was a causal connection between the
protected activity and the adverse action.” Ray v. Int’l Paper Co., 909 F.3d 661, 669 (4th
Cir. 2018). If the plaintiff establishes a prima facie case of discrimination or retaliation,
3
then the burden of production shifts to the employer to articulate a legitimate,
nondiscriminatory or nonretaliatory justification for its action. Haynes, 922 F.3d at 223.
If the employer satisfies this burden, then the plaintiff must prove by a preponderance of
the evidence that the employer’s purportedly neutral reasons were a pretext for
discrimination or retaliation. Id.
We have thoroughly reviewed the record and conclude that the district court did not
err in finding that Terefe failed to establish a prima facie case of discrimination or
retaliation, and that, even if he had established a prima facie case, he did not show that a
reasonable trier of fact could find that Black & Decker’s legitimate reasons for failing to
promote him and terminating his employment were pretextual. We therefore affirm the
district court’s judgment. We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before this court and argument would
not aid the decisional process.
AFFIRMED
4 | 01-03-2023 | 05-15-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/5902846/ | *449Order and judgment (one paper), Supreme Court, New York County (Barbara Jaffe, J.), entered October 27, 2011, which denied petitioners’ motion to vacate an arbitration award and granted respondents’ cross motion to confirm, unanimously affirmed, without costs.
The penalty imposed by an arbitrator should be affirmed, unless it shocks the conscience (Matter of Waldren v Town of Islip, 6 NY3d 735 [2005]). Here, the imposition of a one year suspension, rather than termination, where the employee accessed the personnel files of two coworkers does not “shock the conscience.” While it is true that an award can be overturned where it is directly contrary to a settled public policy (see Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, 80 [2003]), imposing a one year suspension, rather than termination, does not violate the policy of protecting confidential information. Nor does the imposition of a penalty short of termination render the award irrational, because there is a possibility that the employee will reoffend, especially where there has been no criminal conviction and there is a clear, substantial penalty imposed to deter such future conduct (cf. Matter of Social Servs. Empls. Union, Local 371 v City of N.Y., Dept, of Juvenile Justice, 82 AD3d 644, 645 [1st Dept 2011]). Finally, the employee’s lack of remorse, while relevant to the risk of recidivism, does not here rise to the level in the cases relied upon by the City (see Matter of Binghamton City School Dist. [Peacock], 46 AD3d 1042, 1044 [3d Dept 2007] [school teacher’s lack of remorse or understanding of moral aspect of inappropriate relationship with teen student required termination until counseling or other remedial steps taken]). Concur—Mazzarelli, J.P., Acosta, Saxe, Renwick and Clark, JJ. [Prior Case History: 2011 NY Slip Op 32865(U).] | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902847/ | Yesawich, Jr., J.
Appeal from a judgment of the Supreme Court (Intemann, Jr., J.), entered February 20, 1987 in Clinton County, which dismissed petitioner’s application, in a proceeding pursuant to CPLR article 78, to review a determination of respondent Commissioner of Correctional Services finding petitioner guilty of violating a prison disciplinary rule.
By this CPLR article 78 proceeding, petitioner, who at the time of his charged misbehavior was an inmate at Wallkill Correctional Facility, challenges a Tier III hearing disposition finding that petitioner violated prison disciplinary rule 100.10 (7 NYCRR 270.1 [b] [1] [i]) prohibiting assault. The chief reason for the Superintendent’s hearing disposition, upheld by respondent Commissioner of Correctional Services, was an admission by petitioner that, in the course of an argument, he became angry and assaulted another inmate.
Petitioner’s contention that the Commissioner perverted the administrative process by purportedly neglecting to issue a decision within 60 days of receipt of petitioner’s appeal, as required by 7 NYCRR 254.8, is not borne out by the record; the appeal was received August 21, 1986 and the decision was rendered October 15, 1986.
Nor is there merit to petitioner’s claim that disciplinary rule 100.10 is unconstitutionally broad or that he was denied due process. As to the former, we note that the challenge to the rule for vagueness or overbreadth is not preserved for appellate review since it was not raised before Supreme Court (see, 6 NY Jur 2d, Article, 78 and Related Proceedings, § 266, at 172). Even if we were to consider this argument in the interest of justice, it would still be unavailing. A disciplinary rule meets due process and statutory requirements if it gives inmates adequate notice of prohibited conduct tending to threaten the security and order of a correctional facility (Matter of Rabi v LeFevre, 120 AD2d 875, 876-877; see, Correction Law § 138 [3]). Disciplinary rule 100.10, which states that "Inmates shall not assault, inflict or attempt to inflict bodily harm upon themselves or to any person”, provides clear notice *941of justifiably forbidden conduct and thus is neither vague nor overbroad. And, petitioner’s contrary suggestion notwithstanding, a rule is not overbroad merely because certain conduct is proscribed by two disciplinary rules.
The intimation that petitioner was denied due process because the Hearing Officer, in determining the extent of the punishment, did not mention whether consideration was given to self-defense as justification for the assault, is not at all convincing. The Hearing Officer is not required to describe the weight, if any, accorded to mitigating factors (see, 7 NYCRR 254.7 [c]; Matter of Baker v Wilmot, 65 AD2d 884, 885, appeal dismissed 46 NY2d 939). Moreover, the lenient punishment prescribed, 30 days’ confinement to the special housing unit and one month loss of good time and related privileges, for an obviously violent transgression undermines petitioner’s allegation.
Finally, with respect to petitioner’s assertion that he was treated more harshly than other inmates who have engaged in similar conduct, in that most unarmed assaults and fights are dealt with in a Tier II hearing and result in less severe penalties, as Supreme Court noted, 7 NYCRR 270.1 (b) (1) provides that a charge of assault can be considered at either a Tier II or a Tier III hearing. That the more serious level was chosen in this instance undoubtedly reflects the vicious nature of the attack. A comparative analysis of penalties imposed in like cases, which petitioner would have us undertake, is ill adapted to evaluating the propriety of his punishment for it does not take into account the various aggravating and mitigating factors involved in each particular case. So long as the punishment is not disproportionate to the offense, due process has not been offended (see, Cooper v Morin, 49 NY2d 69, 82, cert denied 446 US 984).
Judgment affirmed, without costs. Mahoney, P. J., Weiss, Yesawich, Jr., Levine and Harvey, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8076478/ | PER CURIAM.
Judgment and order affirmed, with costs.
NASH, J., not sitting. | 01-03-2023 | 09-09-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902613/ | In a medical malpractice action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Orange County (Patsalos, J.), dated April 30, 1987, which denied their motion, inter alia, to restore the action to the Trial Calendar. The appeal brings up for review an order of the same court, dated June 24, 1987, which denied the plaintiffs’ motion to renew (see, CPLR 5517).
Ordered that the orders are affirmed, with one bill of costs.
Under the circumstances, we find no basis for disturbing the trial court’s refusal to restore this action to the Trial Calendar *750(see, Hoe & Co. v Crown Cork & Seal Co., 22 AD2d 861, affd 16 NY2d 574; Spodek v Lasser Stables, 89 AD2d 892). Mollen, P. J., Lawrence, Eiber, Sullivan and Balletta, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902615/ | In an action for a divorce and ancillary relief, the defendant husband appeals from so much of an order of the Supreme Court, Westchester County (Nastasi, J.), entered August 12, 1987, as (1) granted the plaintiffs supplemental motion for leave to serve an amended complaint, and (2) granted that branch of the plaintiffs motion which was for counsel fees pendente lite to the extent of awarding counsel fees of $3,000.
Ordered that the order is affirmed insofar as appealed from, with costs.
There was no abuse of discretion in allowing the service of an amended complaint and in the award of counsel fees pendente lite. Thompson, J. P., Bracken, Brown, Weinstein and Spatt, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902616/ | In a negligence action to recover damages for personal injuries, etc., the third-party defendant E. J. Brachs and Sons appeals from so much of an order of the Supreme Court, Rockland County (Kelly, J.), dated July 1, 1987, as granted the third-party plaintiffs leave to serve a further amended third-party complaint.
Ordered that the order is affirmed insofar as appealed from, with costs, and the third-party plaintiffs’ time to serve a further amended third-party complaint is extended until 20 days after service upon them of a copy of this decision and order, with notice of entry.
The Supreme Court, Rockland County, dismissed the amended third-party complaint for legal insufficiency without prejudice to service of a further amended third-party complaint. The appellant contends that the amended third-party complaint should have been dismissed in its entirety with prejudice. We find that leave to replead was properly granted. The determination whether to allow an amendment to the pleadings rests within the sound discretion of the Supreme Court and the exercise of such discretion should not lightly be set aside (see, Edenwald Contr. Co. v City of New York, 60 NY2d 957). Absent prejudice or surprise to the nonmoving party, leave to amend pleadings should be freely given (CPLR 3025 [b]; Edenwald Contr. Co. v City of New York, supra; McCaskey, Davies & Assocs. v New York City Health & Hosps. Corp., 59 NY2d 755). At bar, we find no prejudice or surprise would accrue to the appellant as the circumstances of the incident in question, the parties involved and the theory of liability are clearly set forth in the pleadings in the main action and the first amended third-party complaint. The court, therefore, properly exercised its discretion in permitting the further amendment of the third-party complaint. Thompson, J. P., Bracken, Brown, Weinstein and Spatt, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/2019543/ | 24 Ill. App.3d 883 (1974)
321 N.E.2d 731
THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee,
v.
DANNY YOCUM, Defendant-Appellant.
No. 73-321.
Illinois Appellate Court Third District.
December 30, 1974.
*884 *885 James G. Keis and Richard Steck, both of State Appellate Defender's Office, of Ottawa, for appellant.
Henry D. Sintzenich, State's Attorney, of Macomb (William Henderson, Assistant State's Attorney, of counsel), for the People.
Judgment affirmed.
Mr. JUSTICE DIXON delivered the opinion of the court:
Danny Yocum, the defendant, was charged with unlawful possession of less than 10 grams of cannabis. After a bench trial he was found guilty and sentenced by the Circuit Court of McDonough County to 1 year probation. He appeals contending that his arrest and search were unlawful.
One afternoon, Charlie Yocum, the defendant's 20-year-old uncle, was driving the defendant and his friend, David Price, around in his car. Both the defendant and Price were students at Macomb High School. Charlie, who had just been released from the county jail that morning or the day before, suggested that they all go to the jail to talk to the prisoners and to let them hear music from his tape player.
The three drove to the jail and parked in the adjacent parking lot, approximately 25 feet from the jail building. The defendant turned up the tape player and stood on the sidewalk in front of the car. Both Charlie and Price sat on the hood of the car. Charlie turned the tape player down at the defendant's request, and the defendant called to Wayne Campaign, an inmate of the jail. It was May and the jail window was open. The defendant and Wayne had a short conversation. At one point, the defendant stepped on the grass next to the sidewalk on which he stood, Charlie told him to get off, and he immediately did. After about 2 or 3 minutes of conversation with Wayne, the defendant saw *886 two police officers coming out of the building. He stopped talking and joined his friends on the hood of the car. Neither the defendant nor the other two boys ever got any closer to the jail than about 19 feet.
While inside Sheriff Bliven had heard boys talking out behind the jail. Although he could not recall what they were saying, he did hear someone call "Hey Danny," and did testify that persons were "yelling" at the prisoners. He did not mention hearing any music. Believing that these boys were talking to the prisoners, Bliven went out there with Deputy McClure. When he got outside he saw the defendant, Charlie and Price sitting on the hood of Charlie's car. Bliven grabbed Charlie by the arm and McClure grabbed the other two. As they took the boys into the jail, Bliven said to Charlie, "You was talking to prisoners wasn't you?" Charlie replied that he wasn't and McClure said "Yes you was." Bliven told Charlie that the charge was "disorderly conduct right now."
Bliven thought it was suspicious that Charlie would return to the jail so soon after his release. He did not see the boys do anything but sit on the car, but he wondered why they were there. If he had found hacksaw blades or knife blades on them, he would have charged them accordingly. He specifically stated that he did not have probable cause to believe the boys were planning anything, just suspicions. There were signs posted on the jail wall which said that talking to the prisoners was not allowed. Bliven promulgated this rule because talking through the jail windows creates problems and people often did it. "We just forbid it it is one of the jail rules we have." This rule is also suggested in the State jail-standards book.
Officer Bliven and McClure brought the youths inside the jail; they questioned and searched them. Charlie was released with a warning not to talk to the prisoners again. McClure told Price that the charge was trespassing and let him go after fingerprinting and searching him. McClure searched the defendant and found a small amount of cannabis. The defendant was booked and put in a cell.
The charge against the defendant of unlawful possession of cannabis was the only charge against any of the three stemming from this incident.
Defense counsel moved to suppress the evidence on the basis that it was a direct consequence of an illegal arrest. The trial judge denied defendant's motion finding that the police had "reasonable grounds to arrest the defendant for such disobedient conduct."
The only evidence on which this conviction is based was the small amount of cannabis that McClure found on the defendant when he searched him incident to the arrest based on the events in the jail parking lot.
1, 2 The basic question here is whether the arrest of the defendant *887 was lawful, and this is to be determined by whether the sheriff had reasonable grounds to believe the defendant was committing or had committed an offense viewed in light of the evidence presented at the hearing on defendant's motion to suppress. If the arrest is justified the accompanying search is also justified. Ill. Rev. Stat., ch. 38, par. 108-1; People v. Edge, 406 Ill. 490, 496.
3 Section 107-2(c) of the Code of Criminal Procedure authorizes a peace officer to arrest a person when "[h]e has reasonable grounds to believe that the person is committing or has committed an offense." This provision adopts the Federal rule and the former basis that "`an offense has in fact been committed'" is no longer applicable. (See Committee Comments, Ill. Ann. Stat., ch. 38, § 107-2 (Smith-Hurd 1970); and Aspen, Arrest and Arrest Alternatives: Recent Trends, 1966 U. Ill. L.F. 241, 244-246.)
4-6 The belief induced in the mind of an officer must be a reasonable belief and must appear on subsequent inquiry to have been founded on such facts as would, in the mind of a reasonable man, give rise to a suspicion that the prisoner is guilty of or implicated in a crime. A mere suspicion in the mind of an officer not so supported will not justify a search. Illinois Court has construed the reasonable grounds test of the Code quite liberally.
7, 8 The actions of the sheriff in making the arrest are to be judged by the factual considerations of everyday life, and any assessment of the reasonableness of the sheriff's conduct should take into consideration the sheriff's responsibility and duty to maintain order, prevent crime and to apprehend criminals along with the fact that he had to act on a quick appraisal of the information before him. (Brinegar v. United States, 338 U.S. 160; People v. Watkins, 19 Ill.2d 11; People v. Cain, 35 Ill.2d 184, 196; People v. Pruitt, 79 Ill. App.2d 209.) Reasonable grounds do not require the same quantum of evidence to support a conviction and may be founded on evidence that would not be admissible at the trial. Brinegar, supra.
9-13 Defendant in the instant case concedes that the sheriff has the right to make reasonable jail rules but contends that merely talking to a prisoner in violation of a rule is not a crime. When, as here, the officer hears "yelling" so loud that his attention had been attracted to it, he is justified in investigating the source; in fact, he has a duty to do so. The creation and maintenance of loud and raucous noises of all sorts has traditionally been regarded as disorderly. (See Committee Comments, S.H.A. ch. 38, § 26-1 (1970).) Refusal to obey the lawful order of police may form the basis of a disorderly conduct prosecution. (City of Chicago v. Jacobs, 46 Ill.2d 214.) Failure to obey directions of a police *888 officer, not exceeding his authority, may interfere with the public order and lead to a breach of the peace. People v. Galpern (1932), 259 N.Y. 279, 181 N.E. 572, 83 A.L.R. 785.
14, 15 We believe that the circumstances of this case presented the sheriff with reasonable grounds to believe that the defendant had committed an offense. Under the facts of this case, we think the trial judge properly denied defendant's motion to suppress. The judgment of the Circuit Court of McDonough County is affirmed.
Judgment affirmed.
ALLOY, J., concurs.
Mr. JUSTICE STOUDER, dissenting:
The issue, as stated by the majority, is whether the arrest of the defendant was lawful and this is dependent upon whether the sheriff had reasonable grounds to believe the defendant was committing or had committed an offense viewed in light of the evidence presented at the hearing on defendant's motion to suppress. It is my conclusion the police officers here lacked reasonable grounds to believe defendant had committed an offense. The testimony of the officers is crucial and contrary to the result reached by the majority. Sheriff Bliven testified he didn't see defendant and his two companions do anything except sit on the car, but he wondered why they were there. He specifically stated he didn't have probable cause to believe the three were planning anything, just suspicions.
The cases cited by the majority support the general principles concerning the legality of arrests but are not supportive of the result here due to the difference in factual situations. In People v. Watkins, 19 Ill.2d 11, 166 N.E.2d 433, the arresting officers were members of the gambling detail and knew defendant and defendant knew them. The officers watched defendant park his car and saw him go into the building, and defendant saw the officers. When defendant came out of the building 20 minutes later he ran back into the building as soon as he saw the officers were still there. In People v. Cain, 35 Ill.2d 184, 220 N.E.2d 195, the police officers with a warrant after knocking on the door heard defendant cry out "police" and saw him put the packet into his mouth. In People v. Pruitt, 79 Ill. App.2d 209, 223 N.E.2d 537, defendants, husband and wife, were arrested in a church at a time when services were not in session, and the building was locked except for one door which admitted persons into a corridor off which the church office and other rooms were located. Defendant husband was seen kneeling before the safe in the office. As can readily be seen, these cases cited by the majority *889 are distinguishable from the case at bar where the officers, responding to what they thought was yelling outside the jailhouse, went outside and observed only that defendant and two others were sitting on the hood of a car. The deputy asked one of them whether he was talking to the prisoners and was told that he was not.
It is also of some significance that none of the three were charged with disorderly conduct. One was released with a warning not to talk to the prisoners again. Another was told that the charge was trespassing and was released after being fingerprinted and searched. When defendant was searched a small amount of cannabis was found, and he was the only one booked and jailed and not for disorderly conduct.
The majority's hypothesis seems to be that defendant and the others could have been arrested for disorderly conduct, and yet none of the three were so charged. Although it is not necessary to bring subsequent charges to justify an otherwise valid arrest, in the case at bar there were no reasonable grounds for believing defendant and the others had committed an offense, and, accordingly, I believe the arrest was illegal, the search incident to this arrest improper, the evidence should have been suppressed and therefore the conviction should be reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/184161/ | NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 09-3880
___________
MARIA ANDERS; RICH ANDERS,
Appellants,
v.
PUERTO RICAN CARS, INC., d/b/a Hertz Rent A Car;
HERTZ CORPORATION, d/b/a Hertz Rent A Car;
TOYOTA MOTOR CORPORATION;
TOYOTA DE PUERTO RICO CORP.
___________
On Appeal from the District Court
of the Virgin Islands.
(D.C. Civ. No. 04-cv-00036)
District Judge: Hon. Lawrence F. Stengel
___________
Submitted Under Third Circuit L.A.R. 34.1(a)
on December 14, 2010
Before: FUENTES, SMITH, and FISHER, Circuit Judges.
(Opinion Filed: February 2, 2011)
OPINION OF THE COURT
1
FUENTES, Circuit Judge:
This matter arises from injuries incurred as a result of a May 23, 2003 car accident
involving Appellants Rich and Maria Anders (the “Anders”) while test-driving a used
two-door 2001 Toyota Echo. The Anders brought suit against Appellee Toyota Motor
Corporation (“Toyota”), the manufacturer of the car, alleging numerous product design
defects. They also brought suit against Appellees Puerto Rican Cars, Inc. (“Puerto Rican
Cars”) and Hertz Corporation (“Hertz”), the owners and operators of the rental facility
offering the car for sale. They alleged negligence against Puerto Rican Cars and Hertz
for failing to inspect, service, maintain and perform corrective work, and under a theory
of respondeat superior for their agent’s lack of care during the test drive. After a hearing,
the District Court found the Anders’ expert witness unreliable and excluded his testimony
pursuant to Rule 702 of the Federal Rules of Evidence. The District Court then granted
summary judgment in favor of each of the Appellees. We conclude that summary
judgment was appropriate and will affirm.1
I.
Because we write for the parties, we discuss the facts only to the extent necessary
for resolution of the issues raised on appeal. Plaintiffs Rich and Maria Anders, originally
from Austria, are husband and wife. They were living in St. Thomas, Virgin Islands on
May 23, 2003, when they test-drove a used two-door 2001 Toyota Echo. The Toyota
Echo was being offered for sale by Puerto Rican Cars, the operator of the Hertz car rental
1
The District Court had jurisdiction over this matter pursuant to 28 U.S.C. § 1332, and
we exercise jurisdiction pursuant to 28 U.S.C. § 1291.
2
facility on St. Thomas. Puerto Rican Cars is the indirect subsidiary of Hertz
International, Ltd., which in turn is a wholly-owned subsidiary of Hertz Corporation.
During the test drive, Rich was driving and Maria was in the passenger seat. Everett
Simmons, a mechanic from Hertz, was in the rear passenger seat and was not wearing his
seatbelt.
As the test drive began, Rich noticed that the car would pull to the left slightly, but
Simmons assured him it was a minor problem that could be fixed. At one point during
the test drive, Rich drove up a steep hill at Blackpoint Hill and then turned the car around
to return down the hill. He testified that he was driving between seven and ten miles per
hour on a flat, straight portion of the road when he stepped on the brake pedal. However,
he claims that instead of slowing, the car accelerated. In contrast, Simmons later told the
police that Rich was going too fast, that he asked Rich to slow down, and that he believed
Rich’s foot became caught between the brake and the gas pedal. Rich lost control of the
car, which traveled from the left lane – the proper lane in the U.S. Virgin Islands –
crossed into the right lane, struck a guard rail, and veered back into the left lane before
coming to a stop. All of the occupants were injured and required medical treatment.
In their most recent, Fourth Amended Complaint, the Anders allege four product
design defects against Toyota. First, they argue that the brakes failed on the hill. Second,
they allege that the car’s airbags did not deploy. Third, they contend that the driver’s
seatbelt “became disengaged.” And fourth, they claim that the front passenger seat
jerked forward when struck from behind by the unbelted Simmons. Further, against
Puerto Rican Cars and Hertz they allege negligence for (1) failing to service, maintain
3
and inspect the car, (2) failing to perform corrective work on the brakes, which they
claim had been the subject of a recall by Toyota, and (3) on a theory of respondeat
superior due to the actions of Simmons in failing to secure his seat belt, causing him to
fly forward into Maria’s passenger seat. To assist them in proving their case, the Anders
hired a long time friend and car mechanic, Edwin Stapleton.
II.
A.
The first issue raised on appeal is whether the District Court abused its discretion
in excluding the testimony of the Anders’ expert witness, Edwin Stapleton. See United
States v. Schiff, 602 F.3d 152, 161 (3d Cir. 2010) (trial court’s decision to exclude expert
witness testimony is reviewed for abuse of discretion). For the following reasons, as well
as the reasons set forth in the District Court’s thorough memorandum and order, we
conclude that the District Court did not abuse its discretion in excluding the testimony of
Stapleton.
The introduction of expert opinion testimony is governed by Federal Rule of
Evidence 702, under which the admissibility of expert testimony turns on (1) the
qualifications of the expert, (2) the sufficiency of the data underlying the expert’s
testimony, (3) the reliability of the expert’s methodology and (4) the expert’s application
of that methodology to the facts of the case. See Fed. R. Evid. 702.
Here, the District Court found that Stapleton had no university training, had never
previously testified as an expert, and had no specialized knowledge or training about air
bags, seat belt, or car seat systems. Further, the District Court noted that despite his
4
extensive knowledge of brakes and brake maintenance, Stapleton did not know what the
federal standard for the thickness of brake pads and rotors was for the Toyota Echo.
Stapleton also explained that in determining whether a brake part needed replacement, he
would just “eyeball it” rather than measuring it. Most critically for the reliability of his
testimony, Stapleton examined the Toyota Echo five years after the accident, at which
time the brake rotors had become covered with extensive rust. In light of his lack of
credentials, specialization, and expertise, as well as the fact that five years had passed
before Stapleton examined the car, the District Court did not abuse its discretion when it
excluded Stapleton’s expert testimony as to the four alleged product defects.
Additionally, the District Court was correct to exclude Stapleton’s testimony as a
lay witness, given that he performed a limited inspection of the car five years after the
accident. As a result, without the aid of “scientific, technical or other specialized
knowledge,” any relevant testimony could not be “rationally based on [his] perception.”
Fed. R. Evid. 701.
B.
“In the Virgin Islands, the various Restatements of law provide the rules of
decision in the absence of local laws to the contrary.” Gass v. Virgin Islands Telephone
Corp., 311 F.3d 237, 244-45 (3d Cir. 2002) (citing 1 Va. I. Code Ann. § 4). Causes of
action based on claims of product defect are thus analyzed under Section 402A of the
Restatement (Second) of Torts. See, e.g., Lionel v. Cincinnati, Inc., 917 F. Supp. 360,
361 (D.V.I. 1996); Mingolla v. Minnesota Min. and Mfg. Co., 893 F. Supp. 499, 505-06
(D.V.I. 1995). The relevant portion of Section 402A reads:
5
(1) One who sells any product in a defective condition unreasonably
dangerous to the user or consumer or to his property is subject to liability
for physical harm thereby caused to the ultimate user or consumer, or to his
property, if
(a) the seller engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial
change in the condition in which it is sold.
Accordingly, under Section 402A, a plaintiff must establish that (1) there was an
unreasonably dangerous design defect present at the time the car left the possession and
control of the manufacturer and (2) that the defect caused his or her injuries.
While generally under Section 402A a plaintiff need not provide expert testimony
to prove a manufacturing defect, Perez-Trujillo v. Volvo Car Corp. (Sweden), 137 F.3d
50, 55-56 (1st Cir. 1998) (collecting cases), in most jurisdictions, including the Virgin
Islands, a plaintiff is required to supply expert testimony in order to survive summary
judgment on a design defect claim, Belofsky v. General Elec. Co., 1 F. Supp. 2d 504, 507-
08 (D.V.I 1998), at least “when laymen would lack the necessary knowledge and
experience to render a just and proper decision,” Jones v. Toyota Motor Sales, USA,
Inc., 282 F. Supp. 2d 274, 276-77 (E.D.Pa. 2003) (requiring expert testimony to survive
summary judgment on a Section 402A design defect claim, because without an expert, “a
jury would be left to speculate over the . . . features of” an alternative design for the car’s
restraint system, “and whether such a restraint system would have lessened the injuries”
that the plaintiff suffered).
Because the Anders failed to establish their various design defect claims through
the testimony of an expert witness, the District Court’s grant of summary judgment in
favor of Toyota was appropriate.
6
C.
The District Court also found that the lack of admissible expert testimony
precluded the Anders from proving that Puerto Rican Cars and Hertz had failed to
service, maintain or inspect the car, or perform corrective work on the brakes. The Court
noted that the Appellees’ well-credentialed expert, Mr. Weckerling, inspected the car as
well as skid marks on the shoulder of the road shortly after the accident. From this
Weckerling concluded that the brake and steering systems did not reveal any defects or
malfunctions. Records from Toyota also indicated that there were no problems with the
brake system and that the car was regularly serviced. In the absence of evidence from the
Anders, the District Court was thus correct to grant summary judgment as a matter of law
on these claims.
Finally, the Anders have cited to no legal authority, either within or outside the
Virgin Islands, to support the existence of a duty of passengers to wear seat belts so as to
avoid harming others in the event of an accident. Indeed, with the lone exception of
Edwards v. McBreen, 849 A.2d 204, 208 (N.J. Super. Ct. App. Div. 2004) (declining to
decide whether “a rear seat passenger ha[s] a duty to exercise reasonable care to prevent
injury to a third person occupying the same vehicle by utilizing any available seatbelt”),
this Court has been unable to locate any jurisdiction that has addressed, let alone
answered this question. Although not determinative of whether a duty exists at common
law, we also note that the Virgin Islands Legislature does not require that back seat
passengers wear seat belts. 20 V.I.C. § 466(b) (“No person may operate a motor vehicle
unless the operator and any passenger in the front seat of the vehicle are restrained by a
7
lap and shoulder restraint . . .”)(emphasis added). Accordingly, in the absence of any
articulation of such a duty by the legislature or courts of the Virgin Islands, we decline to
create such a duty for the first time here. We thus affirm the District Court’s grant of
summary judgment on the Anders’ claim that Simmons was negligent for failing to wear
a seat belt.
III.
For the foregoing reasons, we will affirm the District Court’s order.
8 | 01-03-2023 | 02-03-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1544435/ | 68 B.R. 219 (1986)
In re REYNOLDS MANUFACTURING COMPANY, Debtor.
UNITED STATES DEPARTMENT OF ENERGY, Plaintiff,
v.
REYNOLDS MANUFACTURING COMPANY and the Union National Bank of Pittsburgh, Defendants.
Bankruptcy No. 85-1981, Adv. No. 86-221.
United States Bankruptcy Court, W.D. Pennsylvania.
December 4, 1986.
Terri Leigh Tribble, U.S. Dept. of Energy, Oak Ridge, Tenn., Barbara M. Carlin, Asst. U.S. Atty., Pittsburgh, Pa., for U.S. Dept. of Energy.
Joseph E. Ferens, Jr., Waggoner & Ferens, Uniontown, Pa., for debtor.
Gary Philip Nelson, Buchanan Ingersoll, P.C., Pittsburgh, Pa., for Union Nat. Bank.
David W. Lampl, Lampl, Sable, Makoroff & Libenson, Pittsburgh, Pa., for Unsecured Creditors' Committee.
MEMORANDUM OPINION
JOSEPH L. COSETTI, Bankruptcy Judge.
Before the Court is the Complaint for Declaratory Relief of the United States Department of Energy ("DOE" or "the Government") to determine the title to property in the possession of the Debtor, Reynolds Manufacturing Company ("Reynolds"). Reynolds obtained a Government *220 procurement subcontract ("the Subcontract") through a Government management contractor. The Subcontract contains a "title-vesting" clause that gives the Government title to all parts, materials, inventories, etc. ("the materials") acquired by Reynolds and chargeable to the Subcontract. Reynolds contends that it has title to the materials. The Union National Bank of Pittsburgh ("UNB") asserts that "the materials" are inventory subject to the perfected security interest of UNB. UNB argues that a title-vesting clause merely creates a lien. UNB argues that the priority of the Government's lien should be determined by a federal rule of decision that incorporates state law of priority under the Uniform Commercial Code.
This adversary raises the issue whether the rule of decision is based wholly on federal common law or incorporates the state Uniform Commercial Code. This Court believes that the unqualified holdings of the U.S. Supreme Court and the Courts of Appeals, including the Third Circuit, are that federal common law applies and that the title-vesting clause applies literally to vest the materials in the Government.
FINDINGS OF FACT
The United States Department of Energy owns two plants that enrich uranium for public and private customers. Some of the enriched uranium is used for national defense purposes. The two government-owned plants are operated by two management contractors, Martin Marietta Energy Systems, Inc. ("Energy Systems") and Goodyear Atomic Corporation ("GAT"). The plants are located in Paducah, Kentucky and Piketon, Ohio. Although DOE contracts for the management and operation of these plants, DOE is entirely responsible for funding the operation of these plants. Under DOE's managing and operating contract with Energy Systems dated March 30, 1984 (Contract No. DEAC05-84OR21400), Energy Systems is authorized to act as agent for DOE for the purchase of needed materials and services for these plants.
Pursuant to Energy Systems' contract with DOE, Energy Systems solicited bids for the production of 2,000 uranium hexaflouride cylinders for use at the plants. On August 24, 1984, Energy Systems awarded Subcontract No. 28G-08844V to Reynolds. Reynolds agreed to manufacture and deliver 2,000 cylinders to the two plants for the years 1984-1986 in consideration of $3,197,820.00. Under the Subcontract, the cylinders are consigned to DOE and Reynolds sends the cylinders to the plants. The Government is charged $1,603.91 or $1,583.91 per cylinder, depending on the point of delivery. The cylinders are used in the two plants for the storage of uranium "tails".
As Terms and Conditions, the Reynolds' Subcontract contains a federally required clause for fixed-price contracts under which the Government provides progress payments on costs. This clause is incorporated in the Subcontract in provisions entitled "Progress Payments for Small Business Concerns Total Costs (12-82)." See 48 C.F.R. § 52.232-16, Federal acquisition regulations for small business concerns receiving progress payments. Under the terms and conditions of these provisions, Reynolds receives 95% of its total costs incurred under the Subcontract. DOE is the source of payments to Reynolds and the Subcontract is clearly a Government procurement contract.
The title-vesting clause of the Progress Payments provisions reads:
Immediately, upon the date of this subcontract, title to all parts; materials; inventories; work in process . . . theretofore acquired or produced by the Seller [Reynolds] and allocable or properly chargeable to this subcontract under sound and generally accepted accounting principles and practices shall forthwith vest in the Government; and title to all like property thereafter acquired or produced by the Seller and allocable to properly chargeable to this subcontract as aforesaid shall forthwith vest in the Government upon said acquisition, production or allocation.
*221 The Subcontract also incorporates a document entitled, "Terms and Conditions L (6-81)." The "Title and Administration" clause of this document states:
It is understood and agreed that this subcontract is entered into by the Company [Energy Systems] for and on behalf of the Government [the United States, including DOE]; that title to all supplies furnished hereunder by the Seller [Reynolds] shall pass directly from the Seller to the Government as purchaser, at the point of delivery [acquisition by Reynolds]; that the Company [Energy Systems] is authorized to and will make payment hereunder from Government funds advanced and agreed to be advanced to it by DOE, and not from its own assets, and administer this subcontract in other respects for DOE, unless specifically provided for herein; that administration of this subcontract may be transferred from the Company to DOE or its designee, and in case of such transfer and notice thereof to the Seller, the Company shall have no further responsibilities hereunder; and that nothing herein shall preclude liability of the Government from any payment properly due hereunder if for any reason such payment is not made by the Company from such Government funds.
It is clear from the Subcontract and the transaction as a whole that "Government" refers to DOE. The Subcontract states in numerous places that it is certified for national defense use "with a priority of DO E2." The Government has filed an affidavit from a DOE assistant manager for uranium enriching operations. He states that the uranium hexaflouride cylinders are certified for national defense purposes under the Defense Production Act of 1950, as amended. 50 U.S.C.App. § 2061 et seq. See 50 U.S.C.App. § 2062 (purpose of Act is national defense preparedness). He further states that the plants "enrich uranium for customers in both the private and public sectors and for national defense purposes, to include production of nuclear weapons and naval reactors." The production of the cylinders has priority for national defense needs.
Under the Progress Payments clause of the Subcontract, Reynolds submitted a request for $789,777.75 on October 25, 1984, and submitted a request for $1,140,414.87 on November 25, 1984. Including other payments, Reynolds received a total of $2,452,968.13 drawn on a Government account by Energy Systems. The Government states that the 859 cylinders received by Energy Systems had a value of $1,351,292.20 while Reynolds claims these cylinders had a value of $1,814,201.31.
On September 5, 1986, Reynolds filed a Voluntary Petition for Relief under Chapter 11. Since that date, Reynolds has not delivered any cylinders under the Subcontract. A total of 1,141 cylinders remain to be delivered. DOE states that the total progress payments made to Reynolds exceed the value of the cylinders delivered by $1,106,675.91. This is disputed. Reynolds claims that the progress payments exceed the contract price of the delivered cylinders by $638,766.82. Reynolds has sufficient material in its possession to manufacture 208 cylinders. The Government has itemized these materials in Exhibit "C" to the Complaint. Reynolds lists these materials on its Schedule of Assets and Liabilities filed in its Bankruptcy Petition. The Government claims that the materials have an approximate value of $245,000.
In addition, the Government claims that Reynolds possesses 79 Government-owned and furnished valves worth $100 apiece. The valves will be incorporated into the cylinders.
On or about October 11, 1983, Reynolds granted Union National Bank of Pittsburgh a security interest in equipment, inventory, claims and accounts receivable. UNB made previous secured loans to Reynolds. UNB states the following: It has perfected its security interest in Reynolds' inventory by filing a financing statement with the Secretary of State of Pennsylvania and with the Prothonotary of Westmoreland County. Its security agreements and financing statements with Reynolds provide *222 it with a perfected UCC security interest in all of the materials which form the basis of the Government's Complaint. On July 27, 1984, Reynolds and UNB entered into a Demand Line of Credit Agreement under which Reynolds is obligated to UNB in an amount in excess of $300,000. UNB alleges that the Government had a junior interest, if any, in Reynolds' assets and inventory. UNB argues that when it loaned money to Reynolds, Reynolds was not a Government contractor or subcontractor. UNB asserts that it did not have notice of the Subcontract with Energy Systems when money was loaned to Reynolds. UNB argues that the Government has not recorded any security interest in the materials for the cylinders under the UCC procedures.
CONCLUSIONS OF LAW
The Government has filed a Motion for Summary Judgment. Under Bankruptcy Rule 7056, which incorporates Rule 56 F.R.Civ.P., summary judgment is granted in adversary proceedings when there is no genuine issue of material fact. On the basis of the Complaint, the attached Subcontract, Reynolds' Answer, and the DOE Affidavit, the Court concludes that there is no dispute of material facts. UNB argues that material facts are in dispute: specifically whether Government funds were used to purchase the materials in which the Government claims title, and whether the cylinders are essential to the national defense. Although Summary Judgment could be decided without determining these facts, the Court believes that the pleadings and the Subcontract answer these issues. The Supreme Court, Courts of Appeals including the Third Circuit, and other federal courts have decided the legal issues raised by UNB. The Court finds that the UNB arguments are without merit.
The Subcontract between Energy Systems and Reynolds contains a standard "title-vesting" clause in its "Progress Payment for Small Business Concerns" provisions. Federal agencies require this exact language in Government procurement contracts with small businesses. The Government has used similar clauses in procurement contracts for many years. Reynolds does not dispute that the source of these progress payments is the Federal Government and that the cylinders are used in federally-owned plants that enrich uranium for national defense. UNB appears to believe this latter fact is in dispute.
Federal rule of decision controls who has title to the material and the construction of the Subcontract. In United States v. Allegheny County, Pa., 322 U.S. 174, 64 S. Ct. 908, 88 L. Ed. 1209 (1944), the Supreme Court stated:
Procurement policies so settled under federal authority may not be defeated or limited by state law. The purpose of the supremacy clause was to avoid the introduction of disparities, confusions and conflicts which would follow if the Government's general authority were subject to local controls. The validity and construction of contracts through which the United States is exercising its constitutional functions, their consequences on the rights and obligations of the parties, the titles and liens which they create or permit, all present questions of federal law not controlled by the law of any state. 64 S.Ct. at 913-914.
See also Clearfield Trust Co. v. United States, 318 U.S. 363, 366, 63 S. Ct. 573, 575, 87 L. Ed. 838 (1943) (when the United States disburses funds, its rights are governed by federal law, not local law); In re Double H Products Corporation, 462 F.2d 52 (3d Cir. 1972).
The Government asserts that the title-vesting clause in the Subcontract clearly provides that title to all parts, materials, inventories, and work in process, which are chargeable to the Subcontract, vests in the Government when Reynolds acquires, produces, or allocates them. Under the title-vesting clause, title is not contingent upon the Government paying for the materials. The clause speaks of full title and not an equitable, beneficial or security interest. The clause does not imply the creation of any lien.
*223 Title-vesting clauses in U.S. Government contracts have been repeatedly upheld by the federal courts and are the law of the United States. Under these clauses, when a Government contractor receives subject material and property, title passes automatically to the United States. United States v. Ansonia Brass and Copper Co., 218 U.S. 452, 31 S. Ct. 49, 54 L. Ed. 1107 (1910); In re Double H Products, 462 F.2d 52 (3d Cir.1972); In re American Boiler Works, 220 F.2d 319 (3d Cir.1955); In re American Pouch Foods, Inc., 769 F.2d 1190 (7th Cir.1985), aff'g 30 B.R. 1015 (D.C. N.D.Ill.E.D.1983); In re Denalco Corp., 51 B.R. 77 (Bkrtcy.N.D.Ill.1985); In re Verco Industries, 27 B.R. 615 (9th Cir. BAP 1982); In re Economy Cab and Tool Co., Inc., 47 B.R. 708 (Bkrtcy.Minn.1985).
In Ansonia Brass, the Supreme Court held that under a title-vesting clause for possession of a dredge under construction, title vested in the Government as fast as it made payments. The contract provided that "the parts paid for under the system of partial payments above specified shall become thereby the sole property of the United States." The Court overruled materialman's claims for supply liens made under Virginia law.
The Court noted:
It would have been competent for the United States, if they wished to avoid the inconvenience or danger of delay arising from liens in favor of private persons, to make their contract in such form as to devest the builder of any title to the property in the vessel during the process of construction. . . . 281 U.S. at 470, 31 S.Ct. at 54.
More recently, the Court of Appeals for the Third Circuit upheld title-vesting clauses in two cases. In In re Double H Products Corporation, supra, a case almost directly dispositive of all issues in this case, the Third Circuit upheld the title-vesting clause against a bank that was perfected under the New Jersey Uniform Commercial Code. The Government contracted for the construction of missile stowage cradles, which were essential to national defense. UNB argues that the Government has to comply with state recording requirements to perfect any lien or security interest in the cylinders and materials. However, the Court of Appeals in Double H Products held that ". . . unless a federal statute requires recording with the State, the United States is not required to conform to State law in order to create a valid federal lien." 462 F.2d at 57. Also, in American Boiler Works, supra, the Court of Appeals for the Third Circuit stated that the Government, as sovereign, was not required to comply with state recording requirements. 220 F.2d at 321.
In the latter case, the Third Circuit upheld a title-vesting clause against a Trustee in bankruptcy for possession of seven tugs in construction and related materials. As in the instant case, title-passing was not contingent on receipt by the contractor of progress payments.
The Court of Appeals concluded:
The title, both to the vessels and to materials, vested in the government with no ifs, ands or buts. And without any mention of payment as a prerequisite thereto. Id.
UNB argues that title-vesting clauses can only create liens. The Court of Appeals has firmly rejected this in In re Double H Products:
Contentions such as these [that the "title vesting" clause creates a lien] have frequently been advanced over the years in attempts to escape the effect of the title-passing provisions of fixed-price Government contract partial [progress] payment clauses. "At least to the extent of the partial [progress] payments, the courts have, in a variety of situations, almost unanimously sustained the provision as effecting a full and complete passage of title or ownership, and as not creating only a lien or security interest." [citations omitted] 462 F.2d at 55.
Title to the materials passed to the Government when Reynolds acquired them. UNB's perfected security interest in inventory never attached to these materials.
*224 UNB argues that it is an innocent third party and that it has a legal right to be paid for its security interest. Title-passing clauses have been held effective against innocent third party creditors. The Third Circuit stated in In re American Boiler Works that:
Regardless of whether the reason back of the provision is beneficient or harsh, however, here we have the sovereign making a contract. In the absence of constitutional inhibitions the sovereign can make such contract as it pleases and no one can object. 220 F.2d at 321.
This Court believes that the title-vesting clause is to be literally applied to all property irrespective of whether it relates to the national security or whether the Government has paid for the cylinders and materials. However, when the goods acquired are for the national defense, then the purpose for a title-vesting clause for a literal application of its language is even clearer. The Subcontract describes the cylinders as for the national defense. Reynolds does not dispute this purpose. Reynolds admits that the cylinders are to be used at government plants that enrich uranium for national defense purposes including nuclear weapons and naval reactors. DOE's affidavit supports this conclusion. The Subcontract has a DO E2 priority rating under the Defense Production Act of 1950, as amended. 50 U.S.C.App. § 2061 et seq. Under the U.S. Department of Commerce regulations, suppliers must give rated contracts a priority in performance. 15 C.F.R. § 350.3. The purpose of the priority rating is to keep the national defense programs on schedule. 15 C.F.R. § 350.1.
UNB would allow the Government to receive possession of the 208 additional cylinders and the materials after it pays for them twice. UNB's brief at 12. The title-vesting clause was meant to prevent this result.
Reynolds and the Government dispute by what amount the progress payments exceed the value of the cylinders delivered. Reynolds' says that progress payments are $638,766.82 in excess of the contract price of the delivered cylinders. Two hundred eight cylinders remain to be manufactured and delivered. At a cost of $1,603.91 per cylinder (the lower unit cost is $1,583.91 per cylinder), 208 cylinders would cost $333,613.28. Thus, by using Reynolds' calculations, the Government has paid for all of the materials in Reynolds' possession. However, even if the Government did not make progress payments for the 208 cylinders, title would still automatically vest in the Government under the Subcontract. In re Economy Cab and Tool Co., Inc., 47 B.R. 708, 711 (Bkrtcy.Minn.1985).
UNB urges the Court to accept the conclusion of the Court of Claims in Marine Midland Bank v. United States, 687 F.2d 395, 231 Ct. Cl. 496 (1982), cert. denied, 460 U.S. 1037, 103 S. Ct. 1427, 75 L. Ed. 2d 788 (1983), that the title-vesting clause conferred a lien in favor of the Government and did not confer title. However, in this case, the Court of Claims declined to apply the state UCC as the federal rule of decision to govern priority. Instead, the Court chose the rule that the Government's security interest under its title-vesting clause is paramount to liens of general creditors. 687 F.2d at 404. This Court agrees with the Court of Appeals for the Seventh Circuit that Marine Midland was wrongly decided. In re American Pouch Foods, Inc., 769 F.2d 1190, 1196 (7th Cir.1985).
UNB argues that because the Government did not file a notice of its lien or tag the property, the Government is therefore estopped and waives any property interest. These doctrines have been rejected as defenses to actions by the United States for the recovery of property to which it is legally entitled. In re Double H Products Corp., supra, 462 F.2d at 58.
CONCLUSION
The plain language of the Subcontract governs the rights of the parties. The relevant provisions are to be literally applied. The Plaintiff possesses full and absolute title in the property covered by the title-vesting clause in the Subcontract, including the materials listed in Exhibit "C" *225 to the Complaint. Reynolds and UNB have no interest in this property.
An appropriate Order will issue. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/5902618/ | In two negligence actions to recover damages for personal *751injuries allegedly sustained in a motor vehicle accident, Larry N. Neuringer, a defendant in both actions, appeals, as limited by his brief, from so much of an order of the Supreme Court, Suffolk County (Goldstein, J.), dated February 19, 1987, as, upon directing that the actions be jointly tried, placed venue in New York County.
Ordered that the order is affirmed insofar as appealed from, with costs.
The general rule for determining the venue of actions which are joined or consolidated pursuant to CPLR 602, where the actions have been commenced in different counties, is that absent special circumstances, venue should be placed in the county where the first action was commenced (T T Enters. v Gralnick, 127 AD2d 651, 652). Such a determination, however, is addressed to the sound discretion of the court (Leung v Sell, 115 AD2d 929). At bar, although the first action was commenced in Suffolk County, the circumstances are such that the court’s determination to place venue in New York County where the second action was commenced was not an abuse of that discretion. The plaintiff in action No. 2 demonstrated that the convenience of at least one material nonparty eyewitness would be served by placing venue in New York County. There was no showing that any material nonparty witness would be inconvenienced by placing venue in New York County. Moreover, Robert Strasser, the plaintiff in action No. 1, who had selected Suffolk County as the venue in the first instance, expressly did not oppose the placing of venue in New York County. Thompson, J. P., Brown, Fiber and Sullivan, JJ., concur. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902620/ | Order, Supreme Court, Bronx County (Mark Friedlander, J.), entered January 17, 2012, which, to the extent appealed from, granted defendants’ motion for summary judgment dismissing the claims of serious injury under the permanent and significant limitation categories of Insurance Law § 5102 (d), unanimously affirmed, without costs.
Defendants established prima facie that the injuries that plaintiff allegedly sustained to her cervical and lumbar spine, shoulders, and knees were not caused by the motor vehicle accident. They submitted evidence that plaintiff suffered neck and lower back injuries in an earlier accident, and reports by a radi*416ologist and an orthopedist opining that the MRI films of the allegedly injured body parts revealed a chronic preexisting condition and no radiographic evidence of trauma or causally related injury (see Spencer v Golden Eagle, Inc., 82 AD3d 589, 590-591 [1st Dept 2011]).
Plaintiff failed to raise an issue of fact in opposition. The limitations found by her expert regarding plaintiffs left shoulder were too minor to be deemed “significant” within the meaning of Insurance Law § 5102 (d) (see Phillips v Tolnep Limo Inc., 99 AD3d 534 [1st Dept 2012]). Plaintiffs orthopedic expert noted that defendants’ expert found degeneration in her right shoulder on the MRI, which plaintiff’s radiologist confirmed, but failed to address these findings. Plaintiff submitted no recent quantifications of range-of-motion restrictions in her spine or knees (see Vega v MTA Bus Co., 96 AD3d 506 [1st Dept 2012]), and failed to address the evidence that her neck, back and knee injuries were preexisting conditions. Concur—Friedman, J.P, DeGrasse, Richter, Abdus-Salaam and Feinman, JJ. | 01-03-2023 | 01-13-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/5902621/ | In an action to recover upon a debt owed by the defendant corporation and guaranteed by the defendant Leonard, the defendants appeal from an order of the Supreme Court, Nassau County (Roberto, J.), entered July 16, 1986, disqualifying their attorney from representing them in the action.
Ordered that the order is affirmed, with costs.
The plaintiff herein, a 3310% stockholder in the defendant close corporation Beacon Factors Corp. (hereinafter Beacon), commenced this action against Beacon and against the defendant Leonard, who is also a 3310% stockholder in Beacon, to recover a claimed indebtedness of Beacon which was allegedly guaranteed by Leonard.
The defendants interposed several affirmative defenses, including one alleging that Leonard was entitled to compensation from Beacon "in excess of the sum claimed to be due by the plaintiff herein”. The answer also contained a counterclaim and third-party complaint against the plaintiff and George W. Benedict, the remaining 33Va% stockholder of Beacon, respectively, for corporate waste.
After joinder of issue, the plaintiff moved, inter alia, to dismiss Beacon’s answer and third-party complaint on the ground that the law firm representing Beacon was not authorized to appear on its behalf. The defendants Beacon and Leonard cross-moved for summary judgment dismissing the complaint on the merits.
By order dated July 9, 1984, the Supreme Court, Nassau County, held that the defendants’ cross motion for summary judgment had to be deferred until it could be determined whether the law firm representing Beacon had in fact been authorized to appear on Beacon’s behalf. The Supreme Court, *753Nassau County, held that the latter issue could only be determined after a hearing which would resolve the "factual dispute as to the nature of the resolution or resolutions adopted” at a special meeting of Beacon’s shareholders on April 12, 1983. The Supreme Court, Nassau County, in its order dated July 9, 1984, also cautioned counsel to observe the requirements of Code of Professional Responsibility DR 5-102 ("Withdrawal as Counsel When the Lawyer Becomes a Witness”), so as not to delay the hearing.
At the conclusion of the hearing conducted on May 30, 1986, the Supreme Court, Nassau County, by order entered July 16, 1986, disqualified the attorney representing the defendants due to a "conflict of interest”.
Initially, we note that the law firm representing the defendants should have withdrawn from representing the defendants prior to the hearing, since the record indicates that one of the partners of the firm, who was also the son of the other partner, was present at the April 12, 1983 special meeting of Beacon’s shareholders, and was going to be called as a witness concerning that meeting (see, Code of Professional Responsibility DR 5-102).
Over and above this particular problem, there was a sufficient basis for the Supreme Court to have disqualified the attorney representing Leonard and Beacon. It is clear from the pleadings that the interests of the defendant Leonard, a minority shareholder, are inimical to and at odds with the two other shareholders who together own a majority of the shares of the defendant Beacon. Insofar as is relevant herein, Code of Professional Responsibility DR 5-105 provides that: "(B) A lawyer shall not continue multiple employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by his representation of another client, or it would be likely to involve him in representing differing interests”. Mangano, J. P., Thompson, Bracken and Spatt, JJ., concur. | 01-03-2023 | 01-13-2022 |
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