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https://www.courtlistener.com/api/rest/v3/opinions/8493054/ | ORDER REGARDING TRUSTEE’S OBJECTION TO EXEMPTIONS
A. THOMAS SMALL, Bankruptcy Judge.
The matter before the court is the objection filed by the chapter 7 trustee, Richard D. Sparkman, to the exemptions claimed by the chapter 7 debtor, Robert Paul Romp. A hearing was held in Raleigh, North Carolina on June 8, 2000.
The trustee has objected to the debtor’s exemptions in the following property:
(1) All equity in residence (value in excess of liens is approximately $20,400) claimed pursuant to Article X, § 2(3) of the North Carolina Constitution.
(2) The cash value ($17,834) of a life insurance policy owned by the debtor and of which the debtor’s four adult non-dependent children are beneficiaries. This exemption is claimed pursuant to Article X, § 5 of the North Carolina Constitution and pursuant to North Carolina General Statute § 58-58-115.
(3) Life insurance proceeds ($6,000) received by the debtor from an insurance policy insuring the life of the debtor’s spouse. This exemption is claimed pursuant to North Carolina General Statute § 30-15.
(4) A 1993 Dodge Grand Caravan (value of $5,450) claimed pursuant to North Carolina General Statute § lC-1601(a)(3) ($1,500) and North Carolina General Statute § 30-15 ($3,950).
Equity in Residence. The debtor’s schedules list the debtor’s residence as having a value of $128,000 and being subject to two liens totaling $107,600. The debtor claims that the equity of $20,400 is exempt pursuant to Article X, 2(3) of the *855North Carolina Constitution which provides:
Exemptions for benefit of surviving spouse. If the owner of a homestead dies, leaving a surviving spouse but no minor children, the homestead shall be exempt from the debts of the owner, and the rents and profits thereof shall insure to the benefit of the surviving spouse until he or she remarries, unless the surviving spouse is the owner of a separate homestead.
N.C. Const., art. X § 2(3).
Article X, § 2(3) of the North Carolina Constitution protects property from claims against the deceased spouse but does not protect the property from claims against the debtor. In this case the debts appear to be joint debts, and the debtor cannot use Article X, § 2(3) of the North Carolina Constitution to protect the property from his creditors. Accordingly, the trustee’s objection with respect to the exemption claimed by the debtor under North Carolina Constitution Article X, § 2(3) is ALLOWED. See In re Sharik, 41 B.R. 388 (Bankr.E.D.N.C.1984); see also In re Ragan, 64 B.R. 384 (Bankr.E.D.N.C.1986). Clearly, Mr. Romp may claim an exemption in his residence pursuant to North Carolina General Statute § 1C-1601(a)(1), and his exemption is ALLOWED under that statute to the extent of $10,000.
Cash Value of Life Insurance. Mr. Romp is the owner of a life insurance policy which has a cash value of $17,834; the beneficiaries of the policy are Mr. Romp’s adult non-dependent children. The debtor claimed the cash value of the insurance policy as exempt pursuant to Article X, § 5 of the North Carolina Constitution, North Carolina General Statute § 1C-1601(a)(6) and North Carolina General Statute § 58-58-115, and the trustee objects on the grounds that the beneficiaries are not dependent on the debtor for support. Mr. Romp argues that the North Carolina Constitution does not require that the children be minor children nor does it require that the children be dependent upon the debtor for support. Article X, § 5 of the North Carolina Constitution (incorporated into the North Carolina exemption statute by North Carolina General Statute § lC-1601(a)(6)) provides:
A person may insure his or her own life for the sole use and benefit of his or her spouse or children or both, and upon his or her death the proceeds from the insurance shall be paid to or for the benefit of the spouse or children or both, or to a guardian, free from all claims of the representatives or creditors of the insured or his or her estate. Any insurance policy which insures the life of a person for the sole use and benefit of that person’s spouse or children or both shall not be subject to the claims of creditors of the insured during his or her lifetime, whether or not the policy reserves to the insured during his or her lifetime any or all rights provided for by the policy and whether or not the policy proceeds are payable to the estate of the insured in the event the beneficiary or beneficiaries predecease the insured.
N.C. Const., art. X, § 5. The court agrees with Mr. Romp that the North Carolina Constitution does not require the children to be minor children or to be dependent for support on the debtor. Accordingly, the trustee’s objection to the debtor’s claim of exemption in the cash value of life insurance is DENIED, and exemption in the cash value of life insurance is ALLOWED. As the property is exempt under Article X, § 5 of the North Carolina Constitution, the court need not address the effect of North Carolina General Statute § 58-58-115.
Life Insurance Proceeds. Mr. Romp received $6,000 from a life insurance policy that insured his wife’s life. Mr. Romp claims that the proceeds are exempt under North Carolina General Statute § 30-15. North Carolina General Statute § 30-15 provides:
Every surviving spouse of an intestate or of a testator, whether or not he has *856dissented from the will, shall, unless he has forfeited his right thereto as provided by law, be entitled, out of the personal property of the deceased spouse, to an allowance of the value of ten thousand dollars ($10,000) for his support for one year after the death of the deceased spouse. Such allowance shall be exempt from any lien, by judgment or execution, acquired against the property of the deceased spouse, and shall, in cases of testacy, be charged against the share of the surviving spouse.
N.C.GeN.Stat. § 30-15.
The trustee contends that Mr. Romp may not claim the exemption because the debtor may only claim exemptions pursuant to North Carolina General Statute § 1C-1601(a). The court has previously held that North Carolina debtors are not limited to the exemptions under North Carolina General Statute § 1C-1601(a). See In re Hare, 32 B.R. 16 (Bankr.E.D.N.C.1983). However, the court interprets North Carolina General Statute § 30-15 to protect assets of the deceased spouse only from claims of the deceased spouse’s creditors. The assets transferred to the surviving spouse are not free from the surviving spouse’s debts. Accordingly, the trustee’s objection to the debtor’s claim of exemption in the $6,000 insurance proceeds is ALLOWED.
1993 Dodge Caravan. The debtor claimed an exemption in a 1993 Dodge Grand Caravan automobile worth $5,450. The exemption was claimed pursuant to North Carolina General Statute § 30-15 ($3,950) and North Carolina General Statute § 1C-1601(a)(3) ($1,500). As previously stated, North Carolina General Statute § 30-15 protects assets of the deceased spouse from the deceased spouse’s creditors but does not protect the property from the creditors of the surviving spouse. Accordingly, the trustee’s objection to the debtor’s claim of exemption under North Carolina General Statute § 30-15 in the Dodge Grand Caravan is ALLOWED. The debtor may claim the Dodge Grand Caravan as an exemption under North Carolina General Statute § lC-1601(a)(3), but that exemption is limited to $1,500.
SO ORDERED. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493055/ | ORDER DENYING MOTIONS TO ALTER, AMEND OR VACATE ORDER DISMISSING COMPLAINT WITH PREJUDICE, MOTION FOR NEW TRIAL AND MOTION TO REVOKE AND/OR STRIKE DISCHARGE OF DEBTOR
JAMES F. SCHNEIDER, Bankruptcy Judge.
On remand from the U.S. District Court, the instant complaint to determine dis-chargeability was dismissed for a second time by memorandum opinion and order [PP. 54 and 55] dated March 31, 1998. The unsuccessful plaintiffs, Stephen M. Wright and Stephen M. Wright, CPA, P.A., filed motions to alter, amend or vacate the order dismissing complaint with prejudice, a motion for new trial and a motion to revoke and/or strike discharge of debtor. For the following reasons, the motions will be denied.
MOTIONS TO ALTER, AMEND OR VACATE ORDER DISMISSING COMPLAINT WITH PREJUDICE
The instant complaint to determine dis-chargeability of debt was dismissed by memorandum opinion and order [PP. 54 and 55] dated March 31, 1998. Although the complaint indicated on its face that it was brought pursuant to 11 U.S.C. § 523 to determine the dischargeability of a debt, *68the proof adduced in support of the complaint related to the complete denial of a discharge in bankruptcy pursuant to 11 U.S.C. § 727. Finding that it was past the deadline to bring a complaint objecting to discharge, and that the debtor had been properly granted a discharge pending the trial of the complaint to determine dis-chargeability of a single debt, the Court dismissed the plaintiffs case on remand. The most important determination made by the opinion was that the amendment of the complaint at trial was futile because of the long-expired deadline for filing complaints objecting to discharge and the fact that a discharge had been granted. The debtor/defendant would obviously be prejudiced by such an amendment, especially because he was without counsel. Although they were represented by counsel, the plaintiffs consistently failed to properly amend the complaint until it was too late to do so. Their undue delay in amending the complaint after trial could not be permitted. Because the plaintiffs’ motions to alter, amend or vacate the order dismissing complaint contain no relevant information to justify the granting of the requested relief that was not available or known to them at the time the complaint was dismissed, and because the Bankruptcy Code provides no basis to permit the plaintiff to amend the complaint to set forth a distinctly different cause of action which was time-barred by the date of trial, the motions will be DENIED.
MOTION FOR NEW TRIAL
The plaintiffs have set forth no reasonable grounds for granting them a new trial in this matter, consistent with the requirements of Federal Rule of Civil Procedure 60(b). Accordingly, the motion for new trial will be DENIED.
MOTION TO REVOKE AND/OR STRIKE DISCHARGE OF DEBTOR
Because the evidence produced by the plaintiffs related solely to the denial of discharge, as opposed to the determination of the dischargeability of the plaintiffs’ debts, the complaint was dismissed with prejudice. The granting of a discharge is incompatible with a pending complaint to completely deny a discharge. Therefore, a complaint objecting to discharge may not be maintained after a discharge has been granted, without first seeking to strike the discharge if the Code permits. 11 U.S.C. § 727(d).*
In this case, the Bankruptcy Code provides no basis for the plaintiff to strike the debtor’s discharge or to amend the complaint to set forth a distinctly different cause of action which was time-barred by the date of trial. Accordingly, the motion to strike discharge will be DENIED.
SO ORDERED.
See also Ross v. Mitchell (In re Dietz), 914 F.2d 161, 163 (9th Cir.1990)(Section 727(d) has been interpreted to require that the party requesting revocation of a debtor's discharge must have learned of the debtor's fraud after the discharge has been granted); England v. Stevens (In re Stevens), 107 B.R. 702, 706 (9th Cir. BAP 1989) (once a discharge is entered, a party may properly seek revocation of the debtor's discharge for conduct which occurred before the Rule 4004(a) period expired, and of which the party did not have knowledge in time to file a timely complaint, or for conduct occurring after the deadline set by Rule 4004(a)); In re Emery, 201 B.R. 37 (E.D.N.Y.1996)(the Bankruptcy Code allows the court to revoke a debtor's discharge if the following criteria have been satisfied: debtor obtained a discharge through fraud, the creditor had no knowledge of the fraud before the granting of the discharge; and the fraud, if known, would have resulted in a denial of the discharge), aff'd, In re Emery, 132 F.3d 892 (2nd Cir.1998); In re Staub, 208 B.R. 602 (Bankr.S.D.Ga.1997) (creditor's knowledge of debtor’s fraud before the bar date for filing complaints objecting to discharge would not be imputed to the U.S. Trustee so as to bar the U.S. Trustee from filing a complaint to revoke the debtor’s discharge); In re Ratka, 133 B.R. 480 (Bankr.N.D.Iowa 1991) (in addition to the statutory requirements for denying discharge, creditors were required to show fraud in procurement of the discharge and that grounds existed which would have prevented discharge had they known and presented in time). | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493056/ | ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
STEVEN H. FRIEDMAN, Bankruptcy Judge.
This matter came on for hearing on June 26, 2000, upon the Debtor’s Motion for Temporary Restraining Order and Preliminary Injunction (“Motion”) against the City of Waterbury, Connecticut (“Waterbury”). The Debtor seeks to restrict Waterbury from collecting, transferring, liquidating, disbursing, and using any and all funds held by Waterbury, pursuant to a contract entered into by the Debtor and Waterbury pre-petition. Having considered the motion and for the reasons set forth below, the Court denies the Debtor’s Motion.
The Debtor filed its voluntary chapter 11 petition on January 28, 2000. Prior to the petition date, Waterbury and the Debt- or entered into a Municipal Revenue Assurance and Management Services Agreement. The agreement allows the Debtor to purchase Waterbary’s tax liens at a discount and at the same time permits Waterbury to receive funds on account of its tax liens, notwithstanding events of taxpayer delinquency. On March 9, 2000, Waterbury filed a motion for stay relief to pursue an action in state court for the alleged breach of the agreement by the Debtor. In its April 5, 2000 Order Denying Motion to Change or Transfer Venue and Granting Motion for Stay Relief Filed by City of Waterbury, Connecticut (“Order Granting Stay Relief’), the Court granted Waterbury relief from the stay and upheld as valid a forum selection clause, found in Section 16.2(b) of the agreement, stating that the parties “... irrevocably agree that any action at law, suit, in equity, or other judicial proceeding for the enforcement of any provision of this Agreement shall be instituted only in the courts of the County of New Haven, Judicial District of Waterbury, State of Connecticut.” Thus, the Order Granting Stay Relief allowed Waterbury to seek adjudication of this contractual dispute in the Connecticut state court.
Contending that Waterbury has been withholding the funds it has collected *146from its taxpayers on behalf of the Debtor pursuant to the agreement, the Debtor filed the instant Motion on May 9, 2000. Through this Motion, the Debtor seeks to restrict Waterbury’s use of the funds allegedly owed to the Debtor under the contractual agreement. Any claim that the Debtor has to the funds held by Waterbury arises solely through the agreement between the Debtor and Waterbury.
In order to obtain a preliminary injunction, the Debtor is required to demonstrate that: (1) a substantial likelihood exists that the Debtor will succeed on the merits of its contractual dispute; (2) unless the relief sought is granted, the Debtor will suffer irreparable harm; (3) the harm to the Debtor outweighs the injury that the injunction would inflict upon Waterbury; and (4) the injunction would not be adverse to public interest. See Tefel v. Reno, 180 F.3d 1286, 1295 (11th Cir.1999); MediaOne of Del., Inc. v. E&A Beepers and Cellulars, 43 F.Supp.2d 1348, 1353 (S.D.Fla.1998); In re Regency Realty Assocs., 179 B.R. 717, 720 (Bankr.M.D.Fla.1995). Due to the extraordinary nature of the remedy sought, a temporary restraining order and preliminary injunction may only be granted if the Debtor has shown each of the above elements both clearly and convincingly. See Regency Realty Assocs., 179 B.R. at 720.
The Debtor’s Motion states that “the record is clear” in reference to the likelihood of success on the merits in its contractual dispute with Waterbury. The Court finds no such clarity. The Debtor’s evidence consists merely of conclusory statements without any factual support indicating a likelihood of success on the merits. Indeed, the Debtor’s sole witness, El-hot Burman, on cross-examination proved to be patently unfamiliar with the agreement and the litigation relating thereto. The Debtor simply has failed to meet the burden of adequately demonstrating a likelihood of success.
The Debtor also has failed to sufficiently show that, without the preliminary injunction, it will suffer irreparable injury. While the Debtor did assert that there is a potential for loss to the bankruptcy estate resulting in irreparable injury, the Debtor established no factual predicate to substantiate this assertion. A showing of a remote or speculative threat of harm is not enough to justify granting a preliminary injunction. See In re Prime Motor Inns, Inc., 131 B.R. 233, 236-37 (Bankr.S.D.Fla.1991).
Even though the Debtor’s failure to make the requisite showing as to a threat of irreparable injury is alone sufficient to deny the preliminary injunction, see Roberts v. Van Buren Public Schools, 731 F.2d 523, 526 (8th Cir.1984), the necessary demonstration (1) that the harm to the Debtor outweighs the potential for harm to Waterbury if the injunction is granted; and (2) that no adversity to the public interest would result from the granting of the injunction are also lacking. The Debtor did nothing more than state in its Motion that issuing the preliminary injunction serves the public interest and results in less harm to Waterbury than would result to the Debtor in the absence of the injunction. Without factual support to substantiate the Debtor’s conclusory statements, there are insufficient grounds to issue a preliminary injunction.
Even if the Debtor had demonstrated sufficient grounds for issuing the preliminary injunction, the Court is not authorized to do so. The power of the bankruptcy court to grant injunctive relief extends only to the property of the Debt- or’s estate, for the purpose of protection and fair distribution of estate assets. See In the Matter of Vitek, Inc., 51 F.3d 530, 536 (5th Cir.1995). The bankruptcy court lacks the authority to issue a preliminary injunction if the property in question is not property of the bankruptcy estate. While this Court has the power to determine what property is considered property of the estate, it is without authority to adjudi*147cate the contractual dispute between the Debtor and Waterbury due to the forum selection clause, which was held to be valid in this Court’s Order Granting Stay Relief. Until the contractual dispute between the Debtor and Waterbury is adjudicated in the Connecticut court, the Court can not determine whether the funds at issue constitute property of the bankruptcy estate and, as such, are within the reach of the bankruptcy court’s equitable powers.
For the foregoing reasons, it is hereby
ORDERED that the Motion For Temporary Restraining Order And Preliminary Injunction is denied. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493058/ | MEMORANDUM OPINION1
JUDITH K. FITZGERALD, Chief Judge.
The issue before the Court is the eligibility of Debtor, Joseph Slomnicki, for Chapter 13 relief. The issue arises because of judgments entered against the *532Debtor on or about October 16, 1996, in the aggregate amount of $675,000.00. The details of the judgments are explained in the statement of undisputed facts and procedural history in the Brief in Support of Motion to Dismiss and, Alternatively, Motion for Relief from Stay filed on behalf of the Movants at Docket No. 14.
Debtor received a discharge in Chapter 7 on July 14, 1999. ' However, the judgments at issue were the subject of an action to determine nondischargeability. Judge McCullough of this Court issued an opinion and order in Adversary Proceeding No. 97-2494 MBM, finding that the judgments were not dischargeable pursuant to 11 U.S.C. § 523(a)(6). The opinion was entered July 8, 1999. Debtor sought reconsideration, which Judge McCullough treated as a motion for relief under Federal Rule of Civil Procedure 60(b). On January 5, 2000, Judge McCullough denied the Rule 60(b) motion. On January 14, 2000, Debtor filed an appeal which has not yet been adjudicated.2
Debtor’s Chapter 7 case was closed on February 9, 2000. Debtor then filed this Chapter 13 on April 26, 2000. The judgment holders now. seek relief from stay or dismissal of the bankruptcy case. Part of the requested relief relies on the argument that Debtor is ineligible for Chapter 13 relief because his non-contingent, liquidated, unsecured debt exceeds the threshold amount provided by the statute, 11 U.S.C. § 109(e), which is $269,250.00 for purposes of this proceeding. In his Brief in Opposition to the Motion for Relief from Stay and Motion to Dismiss with Prejudice, at Docket No. 15, Debtor concedes that the liquidated debt of the judgment holders exceeds this jurisdictional limit. Nonetheless, Debtor argues that his Chapter 7 discharge permits him to pursue the relief that he requests in this Chapter 13 case.
The Court disagrees with the Debtor and finds in favor of the Movants. The jurisdictional limits of § 109(e) are exceeded in this case and Debtor is not eligible for Chapter 13. Debtor’s obligation to the Movants has been fixed by judgments that were appealed through the state court system and are now final. Thus, the obligation is liquidated and non-contingent. With interest accrued, the balance owed is approximately $825,000.00. In his bankruptcy petition, Debtor represented that he owned property valued at $45,000.00. to which this judgment would attach. In Debtor’s Chapter 7 case, the same property was valued at $140,000.00. There has been no explanation given to the Court, as of this writing, for the huge diminution in value. However, whether the property is valued at $140,000.00 or $45,000.00, the fact is that the judgment holder has an unsecured deficiency claim that exceeds the jurisdictional limits of § 109(e).
The Court accepts and adopts the position on this issue as stated by Edward Drudy and Albert Kirsch in Argument II.A. of their Brief in Support of the Motion to Dismiss and, Alternatively, Motion for Relief from Stay at Docket No. 14. See also, In re Nesbit, 2000 WL 294834 (Bankr.W.D.Pa.2000) (disputed, liquidated, noncontingent debts are included in the limitations of § 109(e)).3
. This Memorandum Opinion constitutes the Court's findings of fact and conclusions of law.
. Debtor relies upon the pendency of the appeal from the January 5, 2000, order that refused to reconsider the earlier final and unappealable order, which found hat the debt was not discharged in Chapter 7, as creating a dispute or contingency sufficient to exclude the judgments from the eligibility criteria of § 109(e). Such is not the law, as explained In re Nesbit, 2000 WL 294834 (Bankr.W.D.Pa.2000).
. The Court does not reach the other issue (bad faith filing) in light of this ruling. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493059/ | MEMORANDUM
JOAN L. COOPER, Bankruptcy Judge.
This matter is before the court on the debtor’s motion to avoid the lien of Welch Printing Company (“Welch”). The parties agree on the facts and have submitted briefs on the question of whether the debt- or’s homestead exemption is impaired by Welch’s judgment lien filed upon her interest in real estate owned, with her non-debtor husband, as tenants by the entirety. After a review of the authorities raised by the parties and a careful review of Kentucky law regarding the nature of tenancy by the entireties property, the Court finds that Welch’s judgment lien does not impair, to any extent, the homestead exemption claimed by Mrs. Brumbaugh, and therefore, as a matter of law, Mrs. Brum-baugh may not avoid Welch’s hen.
Factual Background
The debtor, Martha A. Brumbaugh, filed bankruptcy on September 15, 1999 and listed a house and 8 acres at 3654 Thru-ston-Dermont Road, valued at $160,000, owned jointly with her husband as tenants by the entirety. The debts against the home consist of two consensual mortgage liens with an aggregate balance of $151,000 and one judgment lien in the amount of $3,233.67, filed of record on May 17, 1999 by Welch. This judgment hen arose from a judgment rendered against Mrs. Brum-baugh and not against her husband. Mrs. Brumbaugh claimed a homestead exemption in the property pursuant to 11 U.S.C. § 522(b). As Kentucky is a jurisdiction which has opted out of the federal exemptions set forth in Section 522(b) of the Bankruptcy Code, Mrs. Brumbaugh claimed a homestead exemption in the amount of $4,500.00 pursuant to Kentucky Revised Statute 427.060.
Welch objected to Mrs. Brumbaugh’s motion stating that based on the information admitted in her Schedules, Welch’s hen did not impair her homestead exemption after applying the impairment test of Section 522(f)(2)(A). During the course of the briefing, Mrs. Brumbaugh raised the issue that because under Kentucky law a creditor may attach and sell under execution a debtor-spouse’s interest in property, Welch’s hen “impairs” her exemption and is therefore avoidable under Section 522(f).
Legal Analysis
The Bankruptcy Code permits an individual debtor to exempt from property of the estate property set forth in Section 522(d) or Section 522(b)(2)(A) and (B). See 11 U.S.C. § 522(b). Kentucky does not permit its domiciliaries to exempt from property of the bankruptcy estate the property specified under Section 522(d) of the Bankruptcy Code. See KRS 427.170. Therefore, debtors residing in Kentucky may claim an exemption in 1) property that is exempt under State or local law where they have been domiciled for 180 days preceding the petition, and 2) any *607interest in property in which the debtor had, immediately before the commencement of the case, an interest as a tenant by the entirety or joint tenant to the extent that such interest as a tenant by the entirety or joint tenant is exempt from process under applicable nonbankruptcy law (emphasis added). See 11 U.S.C. § 522(b)(2)(A) and (B).
The Bankruptcy Code further states that the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such hen impairs an exemption to which the debtor would have been entitled under Section 522(b). See 11 U.S.C. § 522(f)(1). In this case, according to her petition, Mrs. Brumbaugh was a Kentucky domiciliary for the 180 days immediately preceding her petition and therefore she may claim exemptions created and allowed under Kentucky law. She may also claim an exemption for her interest in property held as a tenant by the entirety to the extent this interest is exempt from process under applicable non-bankruptcy law. See 11 U.S.C. § 522(b)(2)(A) and (B).
When Congress amended Section 522(f) of the Bankruptcy Code in 1994, it provided a definition of “impairment” for the purposes of Section 522(f). The legislative history for the Section 522(f)(2) amendment is clear that Congress intended to provide courts with a “simple arithmetic test to determine whether a lien impairs an exemption ...” In Holland v. Star Bank, N.A., 151 F.3d 547, 550 (6th Cir.1998), the Court of Appeals for the Sixth Circuit stated “Congress’ enactment of the 1994 Bankruptcy Code amendments, however, has created a federal definition of impairment, 11 U.S.C. § 522(f)(2)(A), and, in light of this explicit language, we no longer look to state law to define impairment.” See also In re Falvo, 227 B.R. 662 (6th Cir. BAP 1998).
In applying the federal definition of impairment to the undisputed facts of this case, this Court finds that Welch’s lien does not impair Mrs. Brumbaugh’s homestead exemption. A lien is not considered to impair an exemption unless the sum of the lien, the other liens and the amount of the exemption the debtor could claim exceed the value of the debtor’s interest in the property in the absence of any liens. See Section 522(f)(2)(A).
Simple arithmetic in this case reflects that Welch’s lien in the amount of $3,354.92, the two consensual liens in the aggregate amount of $151,000, and Mrs. Brumbaugh's homestead exemption of $4,500 total $158,854.92. The fair market value of the property, $160,000, exceeds the total liens and exemption on the property by $1,145.00. This sum represents Mrs. Brumbaugh’s equity in the property, after she has preserved her homestead exemption. Even if Mrs. Brumbaugh were to amend her Schedule C to claim a $5,000 homestead exemption, Mrs. Brumbaugh would still have $645.08 of equity in the property after application of the impairment test. In sum, Mrs. Brumbaugh’s homestead exemption cannot be impaired where she will have preserved her homestead exemption and equity in the property after payment of Welch’s lien.
Apparently realizing her equity problem under the impairment test of Section 522(f)(2)(A), Mrs. Brumbaugh argues that since a creditor may foreclose on a debtor’s entirety interest under Kentucky law, Welch’s lien impairs her homestead exemption. This argument is apparently a throwback of arguments made before the 1994 amendments to the Bankruptcy Code, when “impairment” was determined on a case-by-case basis. This Court concludes that this argument is without merit.
First, the 1994 amendments to the Bankruptcy Code and Holland, supra, clearly reflect Congress’ intent to define for courts the standard for “impairment.” No other subsection of Section 522(f), or Section 522 as a whole, defines impairment. It is questionable, at best, whether “impairment” beyond that which is now set *608forth in Section 522(f)(2) even exists after the 1994 amendments. Under the federal test of impairment, Welch’s lien does not impair Mrs. Brumbaugh’s homestead exemption or the remaining equity she has in the property. Assuming there is merit to Mrs. Brumbaugh’s position that facts and law may exist to establish “impairment” outside of the application of the Section 522(f)(2) test, her argument still fails under Kentucky law.
Section 522(b)(2)(B) provides that Mrs. Brumbaugh may exempt from her estate any interest she had prior to the commencement of the case in property she held as a tenant by the entirety that is exempt from process under applicable non-bankruptcy law. Mrs. Brumbaugh’s interest in her property is not exempt from process under applicable nonbankruptcy law — in this case — Kentucky law.
In K.R.S. 426.190, Kentucky law provides:
Land to which the defendant has a legal or equitable title in fee, for life or for a term, whether in possession, reversion or remainder, or in which the defendant has a contingent interest or a contingent remainder or a defeasible fee, may be taken and sold under execution.
Under this statute, creditors of a debtor-spouse may attach and sell under execution a debtor’s contingent interest or expectancy of the fee in property held as tenants by the entirety. See In re Osbourne, 124 B.R. 726, 729 (Bankr.W.D.Ky.1989), citing Hoffmann v. Newell, 249 Ky. 270, 60 S.W.2d 607, 89 A.L.R. 489 (1932), a decision by the Kentucky Supreme Court interpreting K.R.S. 426.190. The “interest” which creditors may attach and sell, however, is the debtor-spouse’s right of survivorship, subject only to the possibility that the non-debtor spouse will outlive the debtor spouse, in which case the holder of the right of survivorship takes nothing. See Hoffmann, 60 S.W.2d at 613.
In Hayes v. Schaefer, 399 F.2d 300, 301-302 (6th Cir.1968), the Sixth Circuit Court of Appeals analyzed Kentucky law on en-tireties property. The Court of Appeals, in Hayes, determined:
In Kentucky, where a tenancy by the entireties exists, it creates an indivisible estate in both husband and wife which neither can destroy by a separate act. Alienation by either will not defeat the rights of the survivor, and the estate may not be severed by either without the assent of the other. The death of a co-tenant does not increase the interest of the other tenant since from the time the tenancy was created both tenants were seized for the whole.... [T]he surviving tenant of a tenancy by the entire-ties does not inherit from the co-tenant, but rather the surviving spouse takes by virtue of the deed, (citations omitted)
Hayes, supra, has further been cited in United States of America v. Real Property Located at 5205 Mount Howard Court Louisville, Kentucky, et al., 755 F.Supp. 169, 173 (W.D.Ky.1990) where the U.S. District Court, after a thorough examination of Kentucky law on entireties property, determined that an innocent spouse of a criminal defendant in entireties property had a vested right and title to exclusive ownership of the entire property during her lifetime and her interest could not be divested by the individual acts of her spouse. The Court reasoned that if the innocent spouse were to survive her husband, she would be vested with full title to the property in fee simple, free of the claims of her wrongdoing husband’s creditors. If the husband survived the innocent wife, the United States would receive title to the property in fee simple. See Mount Howard, 755 F.Supp. at 173.
Thus, under Kentucky law, property held by husband and wife as tenants by the entirety is subject to attachment and execution upon the debtor-spouse’s interest, but that interest is limited to his or her right of survivorship. See Hoffmann, 60 S.W.2d at 613. Kentucky law does not permit the sale of the debtor-spouse’s or innocent spouse’s present possessory inter*609est in the property or the right during the life of the non-debtor spouse to rents, issues, and profits of the whole of the property. See Hoffmann, 60 S.W.2d at 613. Pursuant to Section 522(b)(2)(B), only the debtor’s present possessory interest in the property is exempt under the applicable nonbankruptcy law.
Execution upon Mrs. Brumbaugh’s right of survivorship cannot, under Kentucky law, impair the right to a present possesso-ry interest held by either her or her non-debtor spouse. See Hoffmann, 60 S.W.2d at 613. In Arango v. Third National Bank in Nashville, 992 F.2d 611 (6th Cir.1993), an opinion rendered prior to the enactment of the 1994 amendments to Section 522(f)(2) of the Bankruptcy Code, the Court of Appeals concluded that under Tennessee law (which is similar if not identical to Kentucky law on entireties property), since the debtor’s present possessory interest in entireties property could not be attached, it was exempt from the estate. Further, since the sale of the right of survivorship could not deprive a debtor or innocent spouse of their present possesso-ry interest in the property, there was no impairment of their exemption. See Aran-go, 992 F.2d at 615.
It is unclear whether the 1994 amendments to Section 522 overruled Arango as the legislative history expressly overruled In re Dixon, 885 F.2d 327 (6th Cir.1989) and by inference, In re Moreland, 21 F.3d 102 (6th Cir.1994), cert. denied, 513 U.S. 956, 115 S.Ct. 378, 130 L.Ed.2d 328 (1994). Assuming Arango is still current law, Mrs. Brumbaugh’s claim of impairment and request for avoidance of Welch’s hen must be denied, because as in Arango, Welch’s lien, and the right to attach and sell upon execution Mrs. Brumbaugh’s right of survivor-ship, does not impair, for the purposes of Section 522(f), Mrs. Brumbaugh’s or her non-debtor husband’s present ability to use and enjoy the entireties property, which is exempt from process under applicable non-bankruptcy law.
We have entered an Order this same date incorporating the findings of this Memorandum. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493060/ | *758
FINDINGS OF FACT AND CONCLUSIONS OF LAW
GEORGE L. PROCTOR, Chief Judge.
This case came before the Court upon Order of Remand entered by the United States District Court for the Middle District of Florida, Jacksonville Division on March 21, 2000 to determine whether certain preference payments were made in *759the ordinary course of the Debtor’s business in accordance with 11 U.S.C. § 547(c)(2). After a status conference on April 6, 2000, the Court enters the following Findings of Fact and Conclusions of Law.
FINDINGS OF FACT
1
1. Defendant owns sixteen radio stations, one of which is WEJZ. WEJZ is located in Jacksonville, Florida. (Tr. November 26, 1996 at 9.) Debtor advertised with WEJZ from 1991 to 1996.
2. Larry Garrett (“Garrett”), general manager and vice-president of WEJZ from June 1991 through November 1996 testified that “[Debtor] has been a long term and strong advertising account on our radio station. In 199S, 199U, and 1995, as an account, [Debtor] 'would have been one of our top ten billing accounts on the radio station.” (Pl.’s Ex. 1A at 9.)
3. Although the payment terms of Defendant’s invoices to Debtor contained payment terms of “thirty days net,” Debtor consistently paid its invoices between 90 and 120 days. (Tr. November 26, 1996 at 9-10; Def.’s Ex. 1.) Garrett and Frank Weatherby (‘Weatherby”), general manager of WEJZ since December 1996, testified that Defendant’s other customers usually paid between sixty and ninety days, with other customers paying later than ninety days. (Tr. November 26, 1996 at 9; Tr. September 15,1998 at 17.)
L Garrett also testified that the “window” of payment, the point at which the station pays close attention to a past due account, is ninety days. (Pl.’s Ex. 1A at 16.)
5.Defendant introduced a Revenue Aging Report (“aging report”), a summary of Defendant’s accounts from July 1998, which reflects the following: In July, 1998 approximately 78% ofWEJZ’s advertising account receivables were still outstanding at thirty days, with approximately lp8% and 18% outstanding at sixty and ninety days respectively. During that same time approximately 66% of Defendant’s advertising account receivables from fourteen of its radio stations, including WEJZ, were still outstanding at thirty days, with approximately 87% and 20% outstanding at sixty and ninety days respectively2 (Def.’s Ex. 1A.)
6. In the spring of 1995, Debtor decided to increase its advertising on Defendant’s station, using a theme of liquidation. (Tr. November 26, 1996 at 10-11.) At Debtor’s suggestion, Defendant agreed to extend Debtor’s advertising credit, provided Debtor did not allow any of the invoices to become outstanding past ninety days. (Id. at 11-12.) This policy was reduced to writing on April 3, 1995. (Id. at 12, 24; Def.’s Ex. 2.)
7. Under the parties’ arrangement, Defendant’s business manager would telephone Debtor at the beginning of each month and relate the amount that was in the ninety-day aging category. Debtor, at its discretion, would then divide that amount into installments and issue a series of post-dated checks in like amounts. Defendant would pick up the checks and deposit them as they matured. (Tr. November 26, 1996 at 11-12.). Garrett testified that he had no other accounts in which the regular course of business was to pick up a series of post-dated checks. (Pi’s Ex. 1A at 18, lines 13-16.) Weatherby testified that he had not engaged in such a practice at WEJZ, but that on rare occasions in *760the past he had done so with a client with whom there was a lot of history. (Tr. September 15,1998 at 21-22.)
8. For four months following the agreement, Debtor carried outstanding invoices past 120 days. (Tr. November 26, 1996 at 19-20.) After August 1995 Debtor did not carry a balance past 120 days. (Id.; Def.’s Ex. 3.)
9. Following the implementation of this procedure, Debtor forwarded to Defendant multiple series of post-dated checks for past-due invoices. In June 1995, Defendant received two checks for $2,000 each, which were applied against invoice 9511 for February 1995 and invoice 9791 for April 1995. (Tr. November 26,1996 at 18.) In July 1995 Defendant received two checks for $3,900 each which were applied to April invoice 9791. (Id.) In August 1995 Defendant received one check for $2,478, and one check for $2,006.25, which were applied to invoices 10181 and 10129 for May 1995. (Id.) In September 1995 Defendant received two checks for $3,203.81, and one check for $3,203.83, which were applied to invoice 10339 for June 1995. In October 1995 Defendant received three checks of $3,327.18 each, which were applied to invoice 10535 of July 1995.
10. On February 23, 1996 Debtor filed for relief under Chapter 7 of the Bankruptcy Code, and Plaintiff was appointed as trustee. (Doc. 1.)
11. Plaintiff alleges that within ninety days prior to its bankruptcy fifing, Debtor transferred to Defendant the following series of checks, totaling $27,435:
Series A
Check No. Amount Date
28752 $3,600.00 11/28/95
28753 $3,600.00 12/05/95
28754 $3,600.00 12/06/95
28755 $3,675.50 12/18/95
Series B
Check No. Amount Date
29277 $3,240.00 01/10/96
Check No. Amount Date
29278 $3,240.00 01/16/96
29279 $3,240.00 01/22/96
29280 $3,240.00 01/30/96
(Doc. 1.)
12. The checks in Series A were applied to invoice 10713 of August 1995. (Tr. November 26, 1996 at 14.) The checks in Series B were applied to invoice 107359, 10884, and 10885 of September 1995. (Id. at 15.)
13. At trial, Defendant stipulated that all the elements required to establish a preference under 11 U.S.C. § 547(b) had been met, but argued that the transfers were protected from Plaintiffs avoidance powers by the ordinary course of business exception of 11 U.S.C. § 547(c)(2).
14. This Court held that the payments were protected under the ordinary course of business exception of § 547(c)(2) and entered Judgment for the Defendant on January 15, 1997. (Adv.Doc.16.) In so finding, the Court construed all sections of § 547(c)(2)' subjectively, focusing on the specific business relationship of the parties rather than industry practices.
15. . Plaintiff filed a Notice of Appeal from the Judgment and the proceeding eventually came before the Honorable Harvey E. Schlesinger, United States District Judge, Middle District of Florida, Jacksonville Division (Case No. 97-158-Civ-J-20).
16. Judge Schlesinger reversed and remanded the Judgment entered by this Court for reconsideration and further proceedings (as appropriate), in fight of the Eleventh Circuit’s decision in Miller v. Florida Mining and Materials (In re A.W. & Assoc., Inc.), 136 F.3d 1439 (11th Cir.1998). (Adv.Doc.21.) In AW. & Associates the court found that pursuant to § 547(c)(2)(C) bankruptcy courts are required to examine industry standards. Id. at 1442.
17. On September 15, 1998 the Court conducted a trial. The sole issue before the Court was whether Defendant met its *761burden of proof on ordinary business terms pursuant to § 547(c)(2)(C).
18. The Court held that the payments were protected under the ordinary course of business exception of § 547(c)(2) and entered Judgment for Defendant on December 21, 1998. (Adv.Doc.30.); Grant v. Renda Broadcasting Corp. (In re L. Bee Furniture Co., Inc.), 227 B.R. 902 (Bankr.M.D.Fla.1998). The Court found that the timing and method of payments made by Debtor to Defendant within the preference period were not consistent with industry standards. However, the Court concluded that the relationship between Debtor and Defendant was long standing and established well before Debtor’s slide into bankruptcy. Accordingly, the Court held that Defendant was allowed some leeway from the industry standard and that the timing and method of payment fell within the sliding scale window of industry standards pursuant to § 547(c)(2)(C). The payments were thus not avoidable by the trustee. (Adv.Doc.29.)
19. Plaintiff filed a Notice of Appeal from the Judgment and the proceeding again came before Judge Schlesinger (Case No. 99-53-CÍV-J-22).
20. Judge Schlesinger vacated and remanded the Judgment entered by the Court on December 21, 1998 because the accompanying Findings of Fact did not include the substantive evidence that was presented during the supplemental eviden-tiary hearing held on September 15, 1998. (Adv.Doc.36.)
CONCLUSIONS OF LAW
Plaintiff asserts that the procedure utilized by Debtor and Defendant to pay delinquent bills was so idiosyncratic as to exclude it from ordinary business terms. Plaintiff argues that not only the age of the debts paid, but the method of payment by post-dated checks was unusual for the industry. Plaintiff points out that this Court, in its prior Findings of Fact and Conclusions of Law, found the procedure to be “unique” and “unusual”.
Defendant asserts that the timing of the payments made by Debtor to Defendant was within the standards and practices in the radio advertising industry. Garrett and Weatherby testified that most of Defendant’s other customers usually paid between sixty and ninety days, with other customers paying later than ninety days. Defendant also argues that the method of payment (post-dated installment checks) was not “idiosyncratic”. Defendant asserts that the method of payment was cemented in long before the Debtor filed bankruptcy.
In A.W. & Associates the Eleventh Circuit Court of Appeals endorsed the reasoning of the Seventh Circuit Court of Appeals as set forth in In re Tolona Pizza Products Corp., 3 F.3d 1029 (7th Cir.1993):
'[O]rdinary business terms’ refers to the range of terms that encompasses the practices in which firms similar in some general way to the creditor in question engage, and that only dealings so idiosyncratic as to fall outside that broad range should be deemed extraordinary and therefore outside the scope of subsection C.
A.W. & Assoc., 136 F.3d at 1443.
Plaintiff argues that because this Court, in its previous Findings of Facts and Conclusions of Law, (Adv.Doc.15), found the situation between the Defendant and the Debtor to be “unique” and “unusual”, this Court must now find the relationship so idiosyncratic that it falls outside the scope of § 547(c)(2)(C).
The Court must attempt to glean a precise definition of industry standards from A.W. & Associates, which is unfortunately difficult to do in light of the short shrift given the issue in the opinion. However, the Court looks to the cases relied on by A.W. & Associates for guidance.
Not only does the Eleventh Circuit approve of the decision in Tolona, but it also cites approvingly to Fiber Lite Corp. v. Molded Acoustical Products, Inc., 18 F.3d *762217 (3d Cir.1994). A.W. & Associates paraphrases a holding in Molded Acoustical parenthetically, signifying its acceptance of the theory applied by the Third Circuit Court of Appeals. A.W. & Assoc., 136 F.3d at 1443 (“finding range of permissible deviation from industry standards determined by extent to which the relationship between the parties is ‘cemented’ ”). The court in Molded Acoustical had to determine whether the pattern of the debtor’s payments to its preference creditor had changed during the debtor’s period of insolvency. As here, the sole issue before the court was the interpretation of § 547(c)(2)(C). The court began its analysis by looking to the legislative history of § 547(c)(2), which revealed that “ ‘[t]he purpose of the exception is to leave undisturbed normal financing relations, because it does not detract from the general policy of the preference section to discourage unusual action by either the debtor or his creditors during the debtor’s slide into bankruptcy.’ ” Molded Acoustical, 18 F.3d at 223 (citing J.P. Fyfe, 891 F.2d at 70). The court noted its approval of the decision in Tolona, however, it embellished the Seventh Circuit’s “idiosyncratic” test. See id. at 220. The ultimate holding in Molded Acoustical evolved through the court’s analysis of the purpose of the preference provisions as well as the importance of encouraging creditors to extend credit to their long-term customers when those customers begin to have financial difficulties. See id. at 224-25. This analysis led the court to the following conclusion:
[T]he more cemented (as measured by its duration) the pre-insolvency relationship between the debtor and the creditor, the more the creditor will be allowed to vary its credit terms from the industry norm yet remain within the safe harbor of § 547(c)(2). The likelihood of unfair overreaching by a creditor (to the disadvantage of other creditors) is reduced if the parties sustained the same relationship for a substantial time frame prior to the debtor’s insolvency.
Id. at 225.
The court acknowledged that its approach in some ways resembled that of subsections (a) and (b) of § 547. See id. at 225. However, the court also made sure to point out that even where there is a longstanding relationship, the credit terms may so grossly depart from industry standards that they would be considered unusual. See id. at 226.
The United States Court of Appeals for the Fourth Circuit has also adopted Molded Acoustical’s embellished Tolona approach to § 547(c)(2)(C). See Advo-System, Inc. v. Maxway Corp., 37 F.3d 1044 (4th Cir.1994); Contra Lawson v. Ford Motor Co. (In re Roblin Indus., Inc.), 78 F.3d 30 (2d Cir.1996). In Advo-System the court characterized the Molded Acoustical interpretation of subsection (c) as a “sliding-scale window.” 37 F.3d at 1049. The court stressed the importance of the history between the debtor and the creditor prior to the preference period. See id. The importance of the lack of any long-term debtor-creditor relationship was also noted, the court finding that an established relationship at least creates a baseline to which the preference period credit terms can be compared. See id. The court ultimately concluded that it would follow the approach set forth in Tolona as further embellished by Molded Acoustical, and also agreed that a gross departure from the industry norm would not suffice even in the presence of an established relationship. See id. at 1050.
This Court agrees with the Third and Fourth Circuits that the more established the debtor’s relationship with a creditor, the more the parties will be permitted to deviate from industry standards. The Court finds that this approach will protect the unusual business relationship between a creditor and its established customers, as well as promote the purpose of the preference section. See Advo-System, 37 F.3d at 1050; Molded Acoustical, 18 *763F.3d at 225. Remaining creditors are not injured if the parties were simply continuing a long-standing practice of debt collection. Advo-System, 37 F.3d at 1050; Molded Acoustical, 18 F.3d at 225. In the absence of over-reaching by a creditor who has an established business relationship with the debtor, the purpose of the preference section, i.e. the equal treatment of creditors, is fulfilled. Tolona, 3 F.3d at 1032 (“stating [one] ... function of the subsection is to allay the concerns of creditors that one or more of their number may have worked out a special deal with the debtor, before the preference period, designed to put that creditor ahead of the other in the event of bankruptcy.”)
The Court must now determine whether the Debtor and Defendant’s practices fall within the sliding scale window of § 547(c)(2)(C) so as to be considered within industry standards. The Court must therefore answer the following questions:
1. What is the industry standard?
2. Does the practice between the parties meet that standard?
3. If so, § 547(c)(2)(C) has been satisfied;
4. If not, look to the history of the parties’ relationship and credit practices.
5. If the relationship and practice are not established, the practice falls outside industry standards and fails the test under § 547(c)(2)(C).
6. If the relationship and practice are long-standing and are not gross departures from the industry norm, § 547(c)(2)(C) has been satisfied.
Although Defendant’s invoices required payment in thirty days, Garrett’s and Weatherby’s testimony establish that most customers pay within sixty to ninety days, with other customers paying later than ninety days. Garrett also testified that the “window” of payment is ninety days. The Court finds this evidence sufficient to establish an industry norm of payment within the sixty to ninety-day time period.3
The practice between Debtor and Defendant obviously does not meet this standard. Debtor carried invoices up to and even past 120 days. Therefore the Court must now examine the history of the parties’ credit practices.
Debtor first began advertising with WEJZ in 1991 and was one of its top ten billing accounts in 1993, 1994, and 1995. Debtor began its practice of paying amounts within the ninety-day aging category by a series of post-dated checks in April 1995, some ten months prior to filing bankruptcy. The Court finds that Debtor and Defendant had a long-standing, established relationship long before the Debt- or’s “slide into bankruptcy”. Therefore, Defendant is allowed some leeway from the industry standard of payment within sixty to ninety days. The Court believes that given the relationship between the parties, the late payments made by Debtor to Defendant fall within the sliding scale window of industry standards pursuant to § 547(c)(2)(C). Debtor was one of Defendant’s valuable customers; long before Debtor filed for bankruptcy Defendant attempted to work with Debtor in order to help it stay in business. There was no overreaching here on behalf of Defendant, rather a legitimate attempt at maintaining a profitable relationship with a long-term customer.
The Court’s inquiry is not at an end, however. Not only did the Debtor *764pay its invoices untimely, but it used a series of post-dated checks to pay its debt in order to keep its invoices within the 120 day mark. ' Is this method of payment an industry norm?
Testimony from both Garrett and Weatherby established that this method of payment was not the norm. Garrett testified that he had no other accounts in which the regular course was to pick up a series of postdated checks. Weatherby testified that it did not happen on a regular basis and was not ordinary. He also testified that although he had done it in the past, it had been with a client with a lot of history.
The Court has previously determined that the parties had an established relationship as well as an established credit practice. Therefore, so long as the practice is not so idiosyncratic as to fall outside the broad range of industry standards, it falls within the sliding-scale window of the industry norm.
The Court holds that the practice between Debtor and Defendant of issuing a series of post-dated checks is not so idiosyncratic as to fall outside the broad range of industry standards. The relationship between the parties was cemented, therefore the range of permissible deviation from industry standards is much greater than it otherwise would be. See Molded Acoustical, 18 F.3d at 225.
The subject credit practices between Debtor and Defendant began 10 months prior to the filing date. This is not a case in which a Defendant approached a debtor in order to harass the debtor and to obtain more favorable terms than another creditor within the preference period. The Court concludes that Defendant legitimately attempted to cooperate with a longstanding customer. The purpose behind the preference section would therefore be defeated were the Court to find the transactions between Debtor and Defendant outside industry standards.
CONCLUSION
Defendant has proven beyond a preponderance of the evidence that the payments made by Debtor to Defendant within the preference period were made in accordance with industry standards. Defendant has therefore met its burden under each subsection of § 547(c)(2), and the Court holds that the preference period payments qualify as payments made within the ordinary course of business which may not be avoided by the trustee. A separate judgment will be entered in accordance with these Findings of Fact and Conclusions of Law.
. The Court adopts the Findings of Fact as enumerated in its initial decision in Grant v. Renda Broadcasting Corp. (In re L. Bee Furniture, Co., Inc.), 204 B.R. 804 (Bankr.M.D.Fla.1997). Additionally, the Court incorporates therein the evidence from the September 15, 1998 trial on remand (denoted by italics).
. Weatherby testified that approximately 68% of Defendant's accounts receivables were outstanding at thirty days and 49% were outstanding at sixty days. These figures, however, resulted from an incorrect reading of Defendant's Exhibit 1A and are instead the accounts receivables of KRXO, one of Defendant's stations.
. The July 1998 aging report provides that Defendant had 66% of its accounts receivables outstanding at the thirty day mark versus only 37% still outstanding at the sixty day mark. See supra ¶ 5 Findings of Fact. To the extent that the aging report establishes an industry standard, it establishes one of thirty to sixty days. However, the report was for July 1998, a period approximately three years after the period at issue. The Court is more convinced by the testimony of Garrett and Weatherby that most customers pay within sixty to ninety days as well as Garrett’s testimony as to the “window of payment.” Accordingly, the Court concludes the industry standard is sixty to ninety days. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493061/ | MEMORANDUM
JOHN C. MINAHAN, Jr., Bankruptcy Judge.
This case is before the Court to determine the priority, under Nebraska law, between a construction lien and future advances made under previously recorded deeds of trust. I conclude that the future advances have priority.
FACTS
The facts are not disputed:
1. On June 17, 1998, The Money Store Commercial Mortgage, Inc. (hereinafter “The Money Store”) recorded two deeds of trust and construction security agreements. Funds on these loans were disbursed from June 16, 1998 to December 11, 1998, for a total disbursement of $1,813,000 under the deeds of trust.
2. On June 17, 1998, ten minutes after The Money Store’s second deed of trust and security agreement were recorded, a Notice of Commencement under NEB. REV. STAT. ANN. § 52-145 (Michie 1995) was filed pertaining to DAPEC, Ine.’s construction project.
3. The Money Store made various future advances of funds under its previously recorded deeds of trust.
4. On January 22, 1999, DAPEC, Inc. (hereinafter “DAPEC”) recorded a construction lien under the Nebraska Construction Lien Act, NEB. REV. STAT. ANN. §§ 52-125 et seq. (Michie 1995).
*80DAPEC asserts that its construction lien has priority over the future advances made by The Money Store between the recording of the Notice of Commencement and the recording of the construction lien.
LAW
The applicable statutes are NEB. REV. STAT. ANN. § 52-137 (Michie 1995), regarding recording and attachment of construction liens, and NEB. REV. STAT. ANN. § 52-139 (Michie 1995), dealing with priority of construction liens as against other claims.
Section 52-137 provides in relevant part:
(2) If a lien is recorded while a notice of commencement is effective as to the improvement in connection with which the lien arises, the lien attaches as of the time the notice is recorded .... A notice of commencement is not effective until recording and,- after recording, is effective until its lapse.
Section 52-139 provides in relevant part:
(2) Except as provided in subsection (3) of this section, a construction lien has priority over subsequent advances made under a prior recorded security interest if the subsequent advances are made with knowledge that the lien has attached.
(3) Notwithstanding knowledge that the construction lien has attached, or the advance exceeds the maximum amount stated in the recorded security agreement and whether or not the advance is made pursuant to a commitment, a subsequent advance made under a security agreement recorded before the construction lien attached has priority over the lien if:
(a) The subsequent advance is made under a construction security agreement and is made in payment of the price of the agreed improvements;
(b) The subsequent advance is made or incurred for the reasonable protection of the security interest in the real estate, such as payment for real property taxes, hazard insurance premiums, or maintenance charges imposed under a condominium declaration or other covenant; or
(c)The subsequent advance was applied to the payment of any lien or encumbrance which was prior to the construction lien.
NEB. REV. STAT. ANN. (Michie 1995).
DISCUSSION
The Nebraska Construction Lien Act governs the priority of construction liens in relation to other real estate lien-holders. DAPEC asserts that under NEB. REV. STAT. ANN. § 52-139(2), its construction lien attached, on a retroactive basis, as of the date the Notice of Commencement was filed. Since the construction lien attached as of June 17, 1998, which is prior to dates of the future advances, DAPEC asserts that, as a matter of law, The Money Store made future advances with knowledge that DAPEC’s lien attached to the real estate. DAPEC then concludes that its construction lien has priority under § 52-139(2).
DAPEC’s syllogistic argument is without merit. At the time The Money Store actually made the future advances, it did not have actual knowledge that the construction lien had attached. At the time the future advances were made, DAPEC had not filed a notice of its construction lien, and the construction lien did not exist. The fact that the priority of the construction lien relates back and attaches as of the time the Notice of Commencement was filed does not support the conclusion that a subsequent filing of a construction lien retroactively imputes knowledge to intervening creditors. The fact is that The Money Store did not have the requisite knowledge at the time it made future advances, and it therefore has priority over the construction lien.
I conclude The Money Store’s loans have priority over DAPEC’s construction lien. At the time The Money Store made *81its disbursements it did not have actual knowledge of the construction lien filed by DAPEC. Furthermore, at the time the advances were made, the construction lien did not exist.
The Nebraska statutory scheme for construction liens differentiates between notice of commencement, attachment, and knowledge. NEB. REV. STAT. ANN. § 52-139 governs priority of construction liens versus other claims, and subpara-graph (2) allows priority for a lien over advances made under prior recorded security interests if the lender made the advances knowing the lien has attached. NEB. REV. STAT. ANN. § 52-137 covers attachment of construction liens, providing that liens recorded after a notice of commencement has been filed are deemed to relate back and attach as of the time the notice was recorded.
DAPEC’s position is premised on the statutory interpretation that when a hen is filed under a notice of commencement and the lien attachment date relates back to the date the notice of commencement was filed, knowledge of the construction lien in § 52-139(2) is retroactively imputed to The Money Store. Under DAPEC’s reading, constructive knowledge of DAPEC’s construction lien would mean the disbursements made by The Money Store after the notice of commencement was filed would be subject to the intervening priority of DAPEC’s construction lien.
The statutory scheme of the Construction Lien Act does not lend itself to this interpretation. The Money Store received knowledge of the construction lien when the construction lien was filed. While attachment relates back to the date a valid notice of commencement was filed, knowledge of a construction lien does not. If the Nebraska Unicameral had intended constructive knowledge of a construction lien to be imputed to the time a notice of commencement was filed, it would have so stated. In fact, a scheme containing such a relation-back provision would have simplified the priority structure of the Construction Lien Act.
Moreover, adoption of DAPEC’s interpretation of the Contraction Lien Act would be commercially unworkable. Construction lenders such as The Money Store would be under unduly burdensome requirements to acquire releases and information on those furnishing supplies and construction labor after a notice of commencement was filed. Under a more workable reading of the statute, the filing of a notice of commencement simply puts pre-existing lenders on notice that their future advances will be junior in priority to construction liens recorded before a future advance is made. Thus, such a lender may make future advances and be assured of priority under § 52-139 provided that no construction lien is recorded before a future advance is made.
DAPEC also suggests that if the advances are made for ancillary purposes, they lack priority. In other words, NEB. REV. STAT. ANN. § 52-139(3) provides that notwithstanding the lender’s knowledge of a construction lien’s attachment, an advance made pursuant to a security agreement recorded before the lien attached has priority if it is made (a) under a construction security agreement for payment of the price of the agreed improvements, or (b) for the reasonable protection of the security interest in the real estate, or (c) for the payment of any lien prior to the construction hen.
DAPEC asserts that some of the advances were used to pay legal fees, interest, and loan fees, among other, things. As such, DAPEC argues, the priority of these advances is not protected. That argument, however, does not apply in these circumstances. Rather, it applies only in those situations where the lender knows of the lien and advances money anyway. In that case, the lender would have priority only if the advances were made for the limited purposes outlined in § 52-139(3). Here, The Money Store had no knowledge *82that the lien attached, so all of its advances take priority over DAPEC’s lien.
IT IS THEREFORE ORDERED that the interest in the real estate, proceeds, and property of the estate that DAPEC asserts by virtue of its construction lien is junior in priority to any and all future advances made by The Money Store prior to the filing of the notice of commencement, as well as all advances made between the time of the filing of the notice of commencement and the filing of the notice of construction lien. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493062/ | MEMORANDUM
JOHN C. MINAHAN, Bankruptcy Judge.
This case is before the Court on .the debtor’s Emergency Motion to Authorize Disbursement of Proceeds of Real Estate. The specific issue before the Court is the determination of the priority, under Nebraska law, of the lien held by the City of Tecumseh for unpaid water and sewer charges. DAPEC,' Inc. objects to the City’s claim. Having considered the arguments and the evidence, and having found no statutory authority which otherwise governs the priority of liens for delinquent water and sewer charges, I conclude that under the general statutory scheme of Nebraska, the City’s lien is in the nature of a special tax or special assessment, and therefore has priority superior to all prior and subsequent liens and encumbrances on the property except for the real estate taxes due to Johnson County.
FACTS
The facts are not disputed:
1. The City of Tecumseh is owed $63,824.63 for sewer and water charges incurred by MBA Poultry, L.L.C., and due at the time the debtor’s bankruptcy was filed.
2. The City of Tecumseh is a Class II municipality under the Nebraska statutes, pursuant to NEB. REV. STAT.'ANN. § 17-Í01 et seq. (Mi-chie 1995 and Supp.1999).
3. The unpaid water and sewer charges are a lien upon the debtor’s real estate. Under NEB. REV. STAT. ANN. §§ 17-538 and 17-925.01, water rates and sewer charges are liens upon the .premises or real estate for which the water and sewer services were used or supplied.
4. The Tecumseh City Code provides that delinquent water charges are liens upon the real estate for which the water was supplied, and may be certified and collected as a special tax. The City Code .applies the same penalties and procedures to sewer use fees.
5. The City certified to the Johnson County Clerk on January 19, 2000, that MBA Poultry’s delinquent water and sewer bills totaled $53,073.89 at that time.
The City asserts that its statutory lien is superior to all liens held by non-governmental entities, and is lower in priority only to Johnson County’s claim for unpaid real estate taxes. Because the City certified the unpaid charges to the County in January 2000, it argues the charges became “special assessments” against the property, in essence a form of tax, and should be accorded priority over all encumbrances. and liens, except the first lien of general real estate taxes, pursuant to NEB. REV. STAT. ANN. § 77-209. DA-PEC objects to the City’s claim and asserts that the City’s lien is junior and subordinate to DAPEC’s construction lien *84under NEB. REV. STAT. ANN. §§ 52-125 to -159.
LAW
The statutes applicable to this matter are NEB. REV. STAT. ANN. § 17-588 (Michie 1995), regarding the automatic creation of a real estate lien for “water rates, taxes or rent;” NEB. REV. STAT. ANN. § 17-925.01 (Michie Supp.1999), which creates a similar lien for sewer charges; NEB. REV. STAT. ANN. § 18-503 (Michie 1999), authorizing any municipality to recover delinquent sewer service charges through civil action or certification to the tax assessor for collection in the same manner as other municipal taxes; and NEB. REV. STAT. ANN. § 77-209 (Michie 1995), giving priority to liens on real estate for “special assessments.”
Section 17-538 provides:
[Cities and villages of the second class] shall have the right and power to tax, assess, 'and collect from the inhabitants thereof such tax, rent or rates for the use and benefit of water used or supplied to them by such waterworks, mains, portion or extension of any system of waterworks or water supply as the council or board of trustees shall deem just or expedient; and all such water rates, taxes or rent shall be a lien upon the premises, or real estate, upon or for which the same is used or supplied; and such taxes, rents or rates shall be paid and collected and such lien enforced in such manner as the council or board of trustees shall by ordinance direct and provide.
Section 17-925.01 provides in relevant part:
... In lieu of the levy of [a tax for maintaining and repairing water and sewer facilities], the mayor and city council of any [city of the second class] or the board of trustees of any village may establish by ordinance such rates for such sewer service as may be deemed by them to be fair and reasonable, to be collected from either the owner or the person, firm, or corporation requesting the services at such times, either monthly, quarterly, or otherwise, as may be specified in the ordinance. All sewer charges shall be a lien upon the premises or real estate for which the same is used or supplied. Such lien shall be enforced in such manner as the local governing body provides by ordinance.
Section 18-503 is as follows:
The governing body of [any city or village in the state] may make all necessary rules and regulations governing the use, operation, and control [of the municipality’s sewage disposal plant or sewerage system]. The governing body may establish just and equitable rates or charges to be paid to it for the use of such disposal plant and sewerage system by each person, firm or corporation whose premises are served thereby. If the service charge so established is not paid when due, such sum may be recovered by the municipality in a civil action, or it may be certified to the tax assessor and assessed against the premises served, and collected or returned in the same manner as other municipal taxes are certified, assessed, collected and returned.
Section 77-209 provides:
All special assessments, regularly assessed and levied as provided by law, shall be a lien on the real estate on which assessed, and shall take priority over all other encumbrances and liens thereon except the first lien of general taxes under section 77-203.
The relevant Tecumseh city ordinances are as follows:
§ 3-121 MUNICIPAL WATER DEPARTMENT; LIEN. In addition to all other remedies, if a customer shall for any reason remain indebted to the Municipality for water service furnished, such amount due, together with any rents and charges in arrears, shall be considered a delinquent water rent *85which is hereby declared to be a lien upon the real estate for which the same was used. The Municipal Clerk shall notify in writing or cause to be notified in writing, all owners of premises or their agents whenever their tenants or lessees are sixty (60) days or more delinquent in the payment of water rent. It shall be the duty of the Public Works Commissioner on the first (1st) day of June of each year to report to the Governing Body a list of all unpaid accounts due for water together with a description of the premise upon which the same was used. The report shall be examined, and if approved by the Governing Body, shall be certified by the Municipal Clerk to the County Clerk to be collected as a special tax in the manner provided by law.
§ 3-212 MUNICIPAL SEWER DEPARTMENT; COLLECTION OF SEWER USE FEES. Sewer rental bills shall be due and payable at the same time and in the same manner as water bills are due and payable. All penalties and procedures concerning delinquent accounts with the Municipal Water Department shall also be applicable to delinquent accounts with the Municipal Sewer Department.
DISCUSSION
The threshold question to be addressed is whether DAPEC holds a valid construction lien on the real estate. I conclude that it does. A person who furnishes services or materials pursuant to a real estate improvement contract has a construction lien on the real estate to secure the payment of the contract price. NEB. REV. STAT. ANN. § 52-131. A real estate improvement contract is an agreement to perform services or to furnish materials for the purpose of producing a change in the physical condition of land or of a structure, including construction or installation on, above, or below the surface of land, and the preparation of plans or drawings, whether or not used, for any change in the physical condition of the real estate. NEB. REV. STAT. ANN. § 52-130.
This definitional statute is broadly drawn, and its list of covered activities is not all-inclusive. The fact that DAPEC did not supply goods which became fixtures, as determined in my order of July 17, 2000, regarding the so-called super-structüre (Fil.# 132), is irrelevant to whether or not the company holds a construction lien. I conclude that DAPEC does hold a construction lien in the real estate and the proceeds thereof. The priority of that construction lien in relation to the priority of the lien held by the City of Tecumseh for water and sewer charges is the issue before the Court.
The issue of the City’s lien priority is a question of Nebraska law. I have not found, nor has counsel directed me to, any statutory or decisional law on point. Based on a general reading of Nebraska statutory provisions and decisions regarding liens, I conclude that the Nebraska Supreme Court would hold the City’s lien superior in priority to all prior and subsequent liens except those for real estate taxes.
As noted above, § 17-538 of the Nebraska statutes establishes a lien upon real estate for charges for water usage. Section 17-925.01 establishes a similar lien for charges for sewer usage. Section 17-538 also authorizes cities to “tax, assess, and collect” charges for water used.
The Nebraska statutes give the cities and villages of the second class authority to enact ordinances determining how to enforce the liens created when a resident uses the municipality’s water and sewer systems. The key to understanding the issue before the Court lies in the recognition that local ordinances, rather than state statutes, govern the enforcement of the liens created under the water and sewer statutes. Neither the state statutes nor the Tecumseh city ordinances contain any provisions dealing with the priority of such *86a lien, or for recording or giving notice of such a lien.
The City of Tecumseh argues that its certification of the unpaid charges as special assessments gives it superior priority. The Nebraska statutory scheme provides that cities of the second class hold liens for delinquent water and sewer charges, and authorizes such cities to pass ordinances determining how to enforce such liens. In Tecumseh’s case, the city ordinances authorize the municipal clerk to certify the delinquent charges as a “special tax” upon the real estate for which it was used. The municipal clerk certifies it to the county clerk, who is authorized to act as tax assessor in some counties. See NEB. REV. STAT. ANN. § 23-3201.
State statutory law gives special assessments priority over all encumbrances and hens except liens for real estate taxes. NEB. REV. STAT. ANN. § 77-209. There is also case law holding that irrigation district levies, in the nature of assessments, have priority over existing contract hens. Flansburg v. Shumway, 117 Neb. 125, 219 N.W. 956 (1928).
Regardless of whether these unpaid charges are characterized as “special assessments” or “special taxes,” they are superior in priority under § 77-209 to all other hens on the real estate except the first hen of general real estate taxes under § 77-203. Even if the City’s hen arose after other hens attached, all persons are deemed to have notice that water and sewer hens arise pursuant to statute, and thus take subject to those hens.
In summary, I conclude that hens for water and sewer charges' arise when the services are provided, and take priority over all prior encumbrances on the real estate except for taxes.
DAPEC takes the position that the City’s hen arose only after it took steps to certify and enforce the hen pursuant to City ordinance. The ordinance, however, does not govern the priority issue. The hen is established by statute upon provision of the services. There is no requirement that the lien be recorded or noticed in some fashion to be effective. The legislature delegated enforcement and collection decisions to the cities, but the hen exists whether or not the city takes steps to enforce it. Furthermore, even if the City’s hen did not arise until after DA-PEC’s construction hen arose, and after the City took steps to certify and enforce the hen, it makes no difference because I conclude that the hen for sewer and water services is senior in priority to prior as well as subsequent hens, including DA-PEC’s hen.
I conclude that the Nebraska Supreme Court would find the City of Tecumseh’s hen for water and sewer charges is senior in priority to prior and subsequent hens and encumbrances on the real property, except for the lien for property taxes.
IT IS THEREFORE ORDERED that DAPEC’s objection to the claim of the City of Tecumseh is overruled. The City’s hen for water and sewer charges is superior to all claims other than the county’s claim for real estate taxes. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493063/ | OPINION
DONOVAN, Bankruptcy Judge.
OVERVIEW
The law firm of Roberts, Sheridan & Kotel, P.C. (RSK), special counsel for the Debtors, appeals the bankruptcy court’s order entered on October 1, 1999 denying RSK full compensation of its requested fees. We AFFIRM.
*105
STATEMENT OF FACTS
1. RSK’s employment
RSK submitted its application to be retained as special counsel for the Debtors on July 31, 1997. Prior to approval, the court expressed its reservations about RSK’s role in the case and held a hearing on August 25, 1997 to determine why it was necessary for three law firms to represent the Debtors: general bankruptcy counsel (Gibbons, Del Deo, Dolan, Griffinger & Vecchione (Gibbons)), local counsel (Shea & Carlyon (S & C)), and RSK as special counsel. In response, RSK urged that its employment was in the best interest of the estate because RSK had represented Mednet for a considerable time as its general counsel prior to bankruptcy. RSK assured the court that RSK’s special counsel work would be limited specifically to matters relating to the Debtors’ pre-petition litigation with Appellee Bergen Brunswig Drug Company (Bergen), the Debtors’ largest creditor and subsequently DIP lender, and the nine other pre-petition lawsuits RSK had been defending on the Debtors’ behalf. In addition, RSK specifically represented to the court that it would avoid duplicating the services of Debtors’ other counsel. The court approved RSK’s employment and ordered the firm to prepare a projected budget. Five months later RSK filed with the court a Fee and Cost Summary, a two-page document in the form of a table, generally identifying project categories and estimating hours to be billed in each category, but the summary provided no information concerning fee or cost breakdowns. The budget was not served on other counsel in the case, was not set for hearing, and RSK did not seek court approval of the summary.
2. Interim fee application
In early 1998, RSK and five other professionals approved by the court filed interim fee applications. RSK had received a retainer in the amount of $100,000 from Medi-Mail, Inc., immediately prior to the Debtors’ bankruptcy petitions from which RSK had “drawn down” $58,361.23 for payment of pre-petition expenses. RSK’s interim fee application sought an award of $194,856.50 in fees and $9,066.14 in expenses, for a total of $203,922.64 for the period of July 31, 1997 through December 31, 1997. Bergen objected generally to the aggregate amount of fees and asked the court to hold back 25% of all professional fees requested. In response to Bergen’s objections, three of the professionals, including RSK, agreed to a 20% hold back. On April 2, 1998, the court made an interim award to RSK representing 80% of its requested fees and 100% of its costs, for a total of $164,951.34. Including the fees earned with the retainer, up to the date of the interim award, RSK received a total of $223,312.57.
3. Expanded scope of employment
On March 30,1998, based on an ex parte application, the court entered an order expanding the scope of RSK’s employment to include the defense of a lawsuit against two officers of the Debtors, Messrs. Warren and Smith.
4. Final fee application
On September 11, 1998, RSK filed a final fee application covering services from the period of January 1, 1998 to August 25, 1998. This application sought award of an additional $398,155.83, consisting of $377,622 for fees and $20,533.83 for expenses. Bergen and the Official Committee of Unsecured Creditors (Committee) objected to RSK’s application. The hearing on all professionals’ fee applications was held on October 15, 1998. At that hearing, the court ruled on all other fee applications but took RSK’s fee application under advisement pending receipt of supplemental documentation. On April 23, 1999, the court heard further oral argument on RSK’s application. At the conclusion of the hearing, the court requested a supplemental affidavit from Gibbons, or the Debtor, or “from somebody that had the ability to give [RSK] authority to do *106[the work]” to establish whether it was indeed true that the Debtors had authorized RSK’s services. On May 28, 1999, RSK filed an affidavit of Robert Bagdasa-rian, former chief executive officer of the Debtors, stating that all of the work performed by RSK was authorized. On October 1, 1999, the court entered a 17-page order outlining its reasons for allowing RSK a total of $824,344 in final fees and costs for all of its work on the case and denying RSK a total of $277,784.02 of the $602,078.47 in fees and expenses requested.
ISSUES ON APPEAL
1. Whether the bankruptcy court applied the correct legal standard when it disallowed a portion of RSK’s fees and expenses as unauthorized, duplicative, unnecessary, or not reasonably likely at the time they were rendered or incurred to benefit the Debtors’ estate.
2. Whether the bankruptcy court abused its discretion when it disallowed RSK the full amount of compensation requested.
STANDARD OF REVIEW
A bankruptcy court’s findings of fact are reviewed for clear error, and its conclusions of law are reviewed de novo. In re Park-Helena Corp., 63 F.3d 877, 880 (9th Cir.1995). The court’s disallowance of attorney’s fees will not be disturbed on appeal absent an abuse of discretion. Id. The legal standard used by a bankruptcy court to determine the allowance of fees involves statutory interpretation and construction of 11 U.S.C. § 330(a)2 and is therefore reviewed de novo. In re Nucorp Energy, Inc., 764 F.2d 655, 657 (9th Cir.1985); In re Auto Parts Club, Inc., 211 B.R. 29, 32 (9th Cir. BAP 1997); In re CIC Inv. Corp., 192 B.R. 549, 551 (9th Cir. BAP 1996); In re Dutta, 175 B.R. 41, 43 (9th Cir. BAP 1994); In re Stewart, 157 B.R. 893, 895 (9th Cir. BAP 1993).
DISCUSSION
Section 330(a)(1) authorizes “reasonable compensation for actual, necessary services rendered” by a professional.3 Section 330(a)(2) authorizes a court to award compensation that is less than the amount of compensation requested. Section 330(a)(3)(A) outlines factors a court should consider when determining what is reasonable compensation for services rendered.4 In addition, § 330(a)(4)(A) outlines when compensation should not be allowed.5
*1071. Applicable standard
RSK appears to question the legal standard employed by the bankruptcy court in disallowing portions of RSK’s fees and expenses. In order to review whether a bankruptcy court has improperly denied a professional its claimed compensation, it is necessary to determine whether such services were reasonable, actual, and necessary. § 330(a)(1)(A). A reviewing court also must determine whether the bankruptcy court considered whether the services rendered were “reasonably likely to benefit the debtor’s estate.” § 330(a)(4)(A). We recognize that there is a split of authority as to what legal standard should be used to determine whether services are “necessary” or “beneficial” to the estate. Because this problem requires statutory interpretation, we review de novo whether the bankruptcy court applied the correct legal standard.
The divergent approaches to the application of § 330 are highlighted by decisions of the Second and Fifth Circuits.- The Second Circuit has held that the test for determining whether counsel is entitled to compensation is whether counsel’s services were reasonably likely to benefit the debt- or’s estate, not whether counsel is able to show actual benefit to the estate. In re Ames Dep’t Stores, Inc., 76 F.3d 66 (2nd Cir.1996). The court reásoned that in enacting § 330, Congress moved away from the doctrine of “economy of administration” and that with the 1994 amendments, Congress specifically moved further towards greater equity in estate management by providing that fees might be awarded when the services were “beneficial at the time ... rendered.” Id. at 71 (citing § 330(a)(3)(C)). The Second Circuit opined that this reasoning comports with “the statute’s aims that attorneys be reasonably compensated and that future attorneys not be deterred from taking bankruptcy cases due to a failure to pay adequate compensation.” Id. at 72 (citing In re UNR Indus., Inc., 986 F.2d 207, 210 (7th Cir.1993)).
The Fifth Circuit takes the opposite view. In In re Pro-Snax Distributors, Inc., 157 F.3d 414 (5th Cir.1998), the court held the test to determine whether attorneys’ services are compensable for work done as counsel for an involuntary debtor (in a case converted from a chapter 7 to a chapter 11 and then reconverted to chapter 7) before and after the appointment of a chapter 11 trustee is whether the work resulted in identifiable, tangible, and material benefit to the bankruptcy estate. Id. at 426. The Fifth Circuit was “disinclined to hold that any service performed ... need only be reasonable to be compensa-ble,” but held that such services must also be of a material benefit to the estate. Id.
The Ninth Circuit in In re Century Cleaning Services, Inc., 195 F.3d 1053 (9th Cir.1999), acknowledges the Ames and Pro-Snax decisions and concludes that a chapter 7 debtor’s attorney is entitled to compensation for work done after conversion of a chapter 11 case. The Ninth Circuit did not, however, address the issue of what test to apply when evaluating whether services should be compensated.
A Ninth Circuit BAP decision addresses this question. In In re Auto Parts Club, Inc., 211 B.R. 29 (9th Cir. BAP 1997), we approved the bankruptcy court’s ruling that the attorneys for the Committee were not entitled to compensation for work done to advance the debtor’s chapter 11 case after the decision was made to sell the debtor’s business. Id. at 34. The bankruptcy court had concluded that the attorneys’ failure to scale back their services was unreasonable; that the fee application was “grossly disproportionate to the benefit conferred on the estate”; and that the requested costs “reflected ‘overkill’ ” and were not “actually necessary.” Id. at 32. On appeal, the panel noted that the appellant was “correct in stating that the standard is an objective one as to whether the fees were reasonable and necessary at the time they were incurred.” Id. at 35. The panel vacated and remanded the case because the bankruptcy court had not made *108sufficient findings to support its fee decision. Id. at 36.
We believe that the Second Circuit analysis and the panel’s analysis in Auto Parts were correct and that the plain lanT guage of the statute is clear. We assume,’ absent sufficient indication to the contrary, that Congress intends the words in its enactments to carry “their ordinary, contemporary, common meaning.” Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. Partnership, 507 U.S. 380, 388, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993) (citing Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979)). Section 330(a)(3)(A)(C) clearly states that the question governing attorney compensation should be whether services were necessary or beneficial “at the time at which the service was rendered.”6 The Fifth Circuit reasoning that a professional’s services are only compensable if they result in a material benefit to the estate does not comport with a strict reading of the statute. Section 330 clearly states that (1) services are compensable if they were “necessary ... or beneficial at the time at which the service was rendered,” and (2) services should not be compensable if they were not “reasonably likely to benefit the debtor’s estate.” § 330(a)(3)(A)(C) and (a)(4)(A)(ii)(I). The statute does not require that the services result in a material benefit to the estate in order for the professional to be compensated; the applicant must demon-state only that the services were “reasonably likely” to benefit the estate at the time the services were rendered. The statute is clear and unambiguous. In our view, the Fifth Circuit’s reading of the statute does not comport with the clear meaning of the 1994 amendments, would unreasonably restrict legitimate professional efforts toward effective estate administration, and could well cause attorneys to shy away from work that might benefit the estate. . We therefore respectfully reject the Fifth Circuit’s view.
A bankruptcy court also must examine the circumstances and the manner in which services are performed and the results achieved in order to arrive at a determination of a reasonable fee allowance.
Such examination, in general, should include the following questions: First, were the services authorized? Second, were the services necessary or beneficial to the administration of the estate at the time they were rendered? Third, are the services adequately documented? Fourth, are the fees requested reasonable, taking into consideration the factors set forth in § 330(a)(3)? See Unsecured Creditors’ Comm. v. Puget Sound Plywood, Inc., 924 F.2d 955, 957-58 (9th Cir.1991). Finally, in making this determination, the court must take into consideration whether the professional exercised reasonable billing judgment.7 As stated in In re River*109side-Linden Investment Co., 925 F.2d 320, 321 (9th Cir.1991), “[w]hen a cost benefit analysis indicates that the only parties who will likely benefit from [a service] are the trustee and his professionals,” the service is unwarranted and a court does not abuse its discretion in denying fees for those services (citation and internal quotation marks omitted).
Based on our examination of the record, we conclude that the bankruptcy court employed the appropriate standard under § 330 in arriving at its determination of a proper fee allowance. We turn now to an examination of specific factual issues raised by RSK’s appeal.
2. Factual issues raised by RSK’s appeal
We begin by acknowledging that we should uphold a bankruptcy court’s factual findings regarding a professional’s fee application absent the conclusion that the bankruptcy court abused its discretion or applied an erroneous legal standard. In re Hanson, 172 B.R. 67, 69 (9th Cir. BAP 1994) (citing In re Reimers, 972 F.2d 1127, 1128 (9th Cir.1992)). The appellant contends that the bankruptcy court’s disallowance of 46% of RSK’s fees and expenses constitutes an abuse of discretion and is reversible error. RSK believes that (1) its services met the requirements of § 330(a) and (2) the court’s decision to reduce RSK’s fees was premised on mistakes of both fact and law. RSK challenges the bankruptcy court’s disallowance of compensation for much work that RSK believes benefited the estate. We will address each of RSK’s factual challenges in turn.
a. Preserving the NOLs
RSK challenges the court’s disallowance of RSK’s fees by describing the work it did to preserve the Debtors’ $65 million in net operating loss carry forwards (NOLs) which, RSK contends, would have been lost without RSK’s expertise. RSK contends that the court abused its discretion when it denied RSK fees for this work because RSK expended significant time and resources that were necessary to preserve the NOLs’ value. RSK stresses that both Bergen and the Committee repeatedly represented to the court that the NOLs were necessary to the administration of the estate and never objected to the work RSK did. While it is undisputed that it was in the best interest of the estate to preserve the NOLs, the issue here is whether the fees charged were inappropriate or excessive under the circumstances.
The bankruptcy court found that RSK’s interim fee application contained entries for pre-petition NOL work for which RSK already had been paid $20,000. The court also found that RSK’s work duplicated work performed by Bergen’s accountants, that the NOL legal authorities submitted by RSK were not particularly helpful to the court, and that in the process RSK charged attorneys’ rates for secretarial tasks. The court also noted its viewpoint that the NOL hearing during the later fee period did not entail very much work and that RSK failed to demonstrate that the work for which RSK sought compensation was reasonably likely to benefit the estate at the time it was performed. In its final analysis, the bankruptcy court concluded that RSK’s fees charged to this project were excessive. Professionals always must exercise proper billing judgment. In re Auto Parts Club, Inc., 211 B.R. at 33 (citing Puget Sound, 924 F.2d at 959). The court here reasonably found RSK had not done so.
b. Collecting receivables
The second category for which RSK contends it was improperly denied compensation was that of identifying and collecting receivables.' RSK urges that the court abused its discretion by denying RSK $74,952.50 in fees when RSK billed only $246,000 for (1) identifying $3.2 million in pre-petition receivables; (2) collecting $2.275 million; (3) commencing three adversaries to collect an additional $418,-*110761.38, which as of the time RSK prepared its final fee application it expected to settle for $310,000; and (4) working with the Debtors to locate records to commence three more adversary proceedings to recover another $210,131.21.
The bankruptcy court concluded, however, and the record supports, that the applications in connection with these fees contained little meaningful description of RSK’s work. The court also found specifically that information gathering could have been done by lower paid associates rather than partners and that for those entries that did offer an explanation of services rendered, an inordinate amount of time was charged. After a close look at RSK’s time entries, the court noted that RSK spent more time documenting negotiated settlements than it spent in settling the disputes.
In addition, the court concluded that an excessive amount of time was devoted to some of RSK’s receivables work. For example, in connection with the Metropolitan Water litigation, the court noted that RSK’s partner, Mr. Sullivan, had refused to participate in the preparation of a joint discovery plan. The court also observed that many of RSK’s litigation costs seemed to be attributable to what the court perceived to be Mr. Sullivan’s problem in “getting along well with others.”
In connection with the Detroit Board of Education litigation, the court felt that RSK billed extensively for drafting a motion for a default judgment that was never filed with the court. While RSK acknowledges the motion was prepared prior to receipt of all responses, the fact remains that all defendants answered the complaint. The court properly found the work on the motion to be unnecessary.
In the end, and after a detailed receivable by receivable analysis, the court found that a substantial amount of the time RSK spent was excessive, unreasonable, and unwarranted under the circumstances. We see no basis to conclude that the bankruptcy court abused its discretion in that regard.
c. The ValueRx litigation
The third category of work at issue is in connection with the ValueRx litigation. RSK contends that the court erred by disallowing all of the fees requested by RSK in the interim application. The court concluded that RSK spent an inordinate amount of time in connection with this litigation, researching bankruptcy issues that the court reasonably believed could have been addressed more economically by bankruptcy counsel. For example, the court concluded that issues regarding the effect of the stay, core and non-core jurisdiction, and statutes of limitations all could have been answered quickly by bankruptcy counsel and that RSK’s time devoted to such issues therefore was unnecessary. In addition, the court found that RSK spent many hours preparing a summary judgment motion that it had no authority to prepare and that was never filed. The court also was unconvinced by RSK’s assertion that this work was done in order to have “the ball ready to move forward.” RSK argues that the work was necessary and that bankruptcy counsel did not know the answers to the questions it was researching. These claims are unsupported by the record. It was therefore not unreasonable for the bankruptcy court to conclude -that bankruptcy counsel could and should have advised RSK on elementary bankruptcy issues, such as the effect of the automatic stay on pending litigation, at far less cost to the estate than that incurred by RSK.
d. The Kurtin & DeFay shareholder litigation
The fourth RSK challenge relates to the Kurtin & DeFay shareholder litigation. RSK argues that the court erred in not allowing it full compensation for these services because the court’s order entered March 30, 1998 expressly expanded the scope of RSK’s employment to allow RSK *111to defend two officers of the Debtors, Messrs. Warren and Smith. In addition, RSK argues that the court’s finding that the Debtors’ insurance carrier should have paid RSK for the work is simply not relevant because, RSK believes, it was specifically authorized by the court and its client to perform these services.
RSK overstates the scope of the court’s order. The order authorized representation of Messrs. Warren and Smith in connection with the Kurtin & DeFay litigation based on RSK’s assurance that such representation was necessary to protect the Debtors. RSK represented to the court that the Debtors owed these officers a pre-petition indemnification obligation and that the Debtors planned to employ these two officers post-confirmation.
Based on RSK’s representations, the court signed an order that specifically provided that RSK could represent these officers and other current officers or directors of the Debtor “to whom the Debtor owes a pre-petition indemnification obligation and whom the Debtor intends to employ post-confirmation (if any).” The plan and disclosure statement provided that, upon confirmation, a new board would be appointed by the holders of new common stock and officers of the reorganized Debtors would be appointed by the new board. These provisions would exclude the previous officers of the Debtors who were parties in the Kurtin & DeFay litigation and, if read in connection with the express language of the order, would preclude RSK’s employment. The disclosure statement and plan also provided that the Debtors’ officers and directors were to be indemnified only to the extent covered by insurance in excess of any applicable deductible. These provisions clearly limited the Debtors’ liability and support the court’s conclusion that RSK should be compensated, if at all, only by the Debtors’ insurance company.
Clearly, the court’s intent in allowing RSK to represent Messrs. Warren and Smith was to protect the interests of the Debtors. The court took great care to ensure in its authorization order that RSK’s representation would be limited. The record shows the bankruptcy court exercised its discretion reasonably when it denied compensation for unauthorized or unnecessary work.
e. The class action
The fifth category is the class action lawsuit. RSK contends, contrary to the court’s finding, that the March 30, 1998 order authorized the representation of Mr. Warren in this case and that the representation was reasonable or beneficial to the Debtors when it was undertaken. However, as discussed above, the authorization order was specifically limited to work done in connection with the Kurtin & DeFay matter. In fact, in that order, the term “shareholder action” is defined as the “Kurtin & DeFay” litigation. No order expanded RSK’s authority beyond that limited scope. Additionally, the court found that work for which RSK sought compensation was done before any court authorization.
RSK was denied other compensation for work performed after the disclosure statement was filed because the disclosure statement made clear that the officers in question would not continue in their positions and/or were not necessary to the Debtors’ reorganization, rendering RSK’s defense of those officers superfluous. The court also observed that it was unclear why the Debtors were asked to pay for RSK’s services when the Debtors’ insurance carrier was responsible to the Debtors for this expense. These problems support the reasonableness of the bankruptcy court’s exercise of its discretion in disallowing these portions of RSK’s request for compensation.
f. Miscellaneous
Finally, RSK challenges three miscellaneous disallowances. The first miscellaneous item is the court’s denial of $1,217 of RSK’s fees for the work performed after *112January 1, 1998 in connection with the collection of a receivable from Managing Underwriters, Inc. RSK asserts that the court abused its discretion when it disallowed these fees. The court order said that since the claim had been resolved during the interim fee period, the fees cited in the final fee application “must therefore be in error.” RSK contends, however, that during the interim fee period, it had only settled with one entity in the amount of $58,148.88 and that the final fee application covered services to collect the remaining $95,589.40 from a different entity.
As to the latter services, our examination of the record reveals that in its interim fee application, RSK sought compensation for reviewing the Debtors’ files and working with the Debtors’ staff in order “to collect the remaining receivable from Managing Underwriters in the amount of $95,589.40.” In its final fee application RSK, purportedly citing new work, states that after January 1, 1998, “in order to collect the remaining receivable from Managing Underwriters in the amount of $95,-589.40” it reviewed documents and worked with the Debtors’ officers and employees “to accumulate the back-up documentation needed to establish debtors’ claims. Applicant drafted a complaint and is preparing to commence an adversary proceeding.” The operative language RSK uses to describe the work it did, in the final fee application, is very similar to that used to describe the work it did in the interim fee application. The work descriptions for the two periods are substantially duplicative. We conclude that the court’s exercise of its discretion against allowance of the additional $1,217 requested for services during the latter period was not unreasonable under the circumstances.
RSK also contends the court erroneously denied RSK reimbursement for $8,691.47 in travel expenses. In support of its appeal, RSK claims that RSK’s airfare from New York to Las Vegas was less than the amount the court allowed Gibbons and Winthrop & Couchot (attorneys for the Committee). While the court found there was no apparent reason why out-of-state attorneys spent more than two days in Las Vegas for hearings that lasted less than two hours, RSK claims its attorneys attended to other business while in the area such as preparing witnesses, reviewing documents, and attending meetings. As evidence to support these assertions, RSK cites generally to RSK’s applications and to Gibbons’ and Winthrop & Couchot’s lengthy interim and final fee applications filed and ruled on many months before the ruling in question here. Such references are much too general to be helpful. Because RSK failed to point out specific evidence to support its challenge, there is no reasonable way for this panel to confirm RSK’s assertions or to conclude that the bankruptcy court abused its discretion in this regard.
The final issue RSK raises is the court’s disallowance of $8,000 of RSK’s fees in connection with the Debtors’ disclosure statement. RSK states that the court ignored the fact that RSK’s participation in the disclosure statement drafting process was undertaken at Gibbons’ request. This assertion is unsupported by the record. RSK simply cites as evidence its own final fee application and the very general daily task log included in the S & C and Gibbons joint final fee application containing general references to phone conversations with RSK. Absent more specific evidence to support RSK’s challenge, we cannot conclude that the bankruptcy court abused its discretion when it disallowed RSK $3,000 for this work.
CONCLUSION
There is no evidence in the record that suggests that Judge Riegle applied an incorrect standard in determining RSK’s final compensation. In her 17-page order, Judge Riegle painstakingly outlined her factual determinations to support her conclusions that the services for which she disallowed compensation were not “neces*113sary” or “reasonably likely to benefit the ... estate.” She also found that RSK’s billing practices were improper in many instances, RSK’s services often were unauthorized, unnecessary, not beneficial, or excessive, and RSK sought compensation for duplicative services, thereby violating RSK’s employment application, the court’s orders, and the provisions of § 330. For these reasons, we conclude that Judge Rie-gle did not err in her statutory analysis, and she did not abuse her discretion.
AFFIRMED.
. Unless otherwise indicated, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1330.
. Section 330(a)(1) provides in pertinent part:
[T]he court may award ...
(A) reasonable compensation for actual, necessary services rendered by the trustee, examiner, professional person, or attorney and by any paraprofessional person employed by any such person; and
(B) reimbursement for actual, necessary expenses.
. Section 330(a)(3)(A) provides:
(A) In determining the amount of reasonable compensation to be awarded, the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including—
(A) the time spent on such services;
(B) the rates charged for such services;
(C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title;
(D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed; and
(E) whether the compensation is reasonable based on the customaiy compensation charged by comparably skilled practitioners in cases other than cases under this title.
.Section 330(a)(4)(A) provides:
Except as provided in subparagraph (B), the court shall not allow compensation for—
(i) unnecessary duplication of services; or
(ii) services that were not—
(I) reasonably likely to benefit the debt- or’s estate; or
(II) necessary to the administration of the case.
. Section 330(a)(3)(A)(C) provides:
(A) In determining the amount of reasonable compensation to be awarded, the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including-—
(C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title....
. ’ In Puget Sound, the Ninth Circuit stated that in performing services, the professional is required to evaluate the following:
(a)Is the burden of the probable cost of legal services disproportionately large in relation to the size of. the estate and maximum probable recovery?
(b) To what extent will the estate suffer if the services are not rendered?
(c) To what extent may the estate benefit if the services are rendered and what is the likelihood of the disputed issues being resolved successfully?
Id. at 959. The Ninth Circuit concluded: "[The attorney] had an obligation to consider the potential for recovery and balance the effort required against the results that might be achieved. Absent unusual circumstances, an attorney must scale his or her fee at least to the reasonably expected recovery. ” Id. at 961. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484365/ | USCA11 Case: 22-11555 Date Filed: 11/16/2022 Page: 1 of 2
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-11555
Non-Argument Calendar
____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
SHONDRA VERNON,
a.k.a. Frenchie,
Defendant-Appellant.
____________________
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 1:21-cr-00411-LMM-1
____________________
USCA11 Case: 22-11555 Date Filed: 11/16/2022 Page: 2 of 2
2 Opinion of the Court 22-11555
Before NEWSOM, LAGOA, and BRASHER, Circuit Judges.
PER CURIAM:
The Government’s motion to dismiss this appeal pursuant
to the appeal waiver in Appellant’s plea agreement is GRANTED.
See United States v. Bushert, 997 F.2d 1343, 1350-51 (11th Cir. 1993)
(sentence appeal waiver will be enforced if it was made knowingly
and voluntarily); United States v. Bascomb, 451 F.3d 1292, 1297
(11th Cir. 2006) (appeal waiver “cannot be vitiated or altered by
comments the court makes during sentencing”); United States v.
Grinard-Henry, 399 F.3d 1294, 1296 (11th Cir. 2005) (waiver of the
right to appeal includes waiver of the right to appeal difficult or
debatable legal issues or even blatant error).
Although we dismiss this appeal, there is a clerical error in
the judgment. We may sua sponte raise the issue of clerical errors
in the judgment and remand with instructions to correct them.
United States v. Massey, 443 F.3d 814, 822 (11th Cir. 2006). In the
judgment, the district court described Shondra Vernon’s offense of
conviction as “ATTEMPT/CONSPIRACY – CONTROLLED
SUBSTANCE – IMPORT/EXPORT.” However, she pled guilty to
conspiring to import cocaine, not attempting to do so and not con-
spiring or attempting to export cocaine. Furthermore, the judg-
ment solely cited 21 U.S.C. § 963 and omitted the other sections
cited in the information. Thus, this case is REMANDED to the
district court with instructions to amend the judgment to correct
the clerical error. | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484371/ | NOTICE 2022 IL App (4th) 210748-U FILED
This Order was filed under November 16, 2022
Supreme Court Rule 23 and is NO. 4-21-0748 Carla Bender
not precedent except in the
4th District Appellate
limited circumstances allowed
under Rule 23(e)(1).
IN THE APPELLATE COURT Court, IL
OF ILLINOIS
FOURTH DISTRICT
THE PEOPLE OF THE STATE OF ILLINOIS, ) Appeal from the
Plaintiff-Appellee, ) Circuit Court of
v. ) Champaign County
DEVITO M. TAYLOR, ) No. 17CF462
Defendant-Appellant. )
) Honorable
) Roger B. Webber,
) Judge Presiding.
PRESIDING JUSTICE KNECHT delivered the judgment of the court.
Justices Turner and Cavanagh concurred in the judgment.
ORDER
¶1 Held: We grant the Office of the State Appellate Defender’s motion to withdraw as
appellate counsel and affirm the trial court’s judgment finding no meritorious
claims can be raised on appeal.
¶2 Defendant, Devito M. Taylor, appeals from the trial court’s summary dismissal of
his postconviction petition. On appeal, the Office of the State Appellate Defender (OSAD)
moves to withdraw as appellate counsel on the ground no issue of arguable merit can be raised.
We grant OSAD’s motion and affirm the trial court’s judgment.
¶3 I. BACKGROUND
¶4 In April 2017, the State charged defendant with two counts of unlawful
possession of a weapon by a felon (720 ILCS 5/24-1.1(a) (West 2016)) (counts II and VI) and
one count each of being an armed habitual criminal (id. § 24-1.7(a)) (count I), possession of a
stolen firearm (id. § 24-3.8(a)) (count III), manufacture or delivery of a controlled substance with
intent to deliver more than 15 grams but less than 100 grams of a substance containing cocaine
(720 ILCS 570/401(a)(2)(A) (West 2016)) (count IV), and unlawful possession of a controlled
substance with intent to deliver less than 50 grams of a substance containing hydrocodone (id.
§ 401(d)) (count V). The charges related to items discovered during the execution of a search
warrant at defendant’s residence.
¶5 Officer Jim Kerner of the Urbana Police Department was a member of the Street
Crimes Task Force and filed the complaint and affidavit for search warrant. In March 2017,
Kerner met with a confidential informant who informed investigators he had purchased cocaine
from a man he knew as “Vito” at Vito’s residence on Northwood Drive South in Champaign on
“over one hundred occasions.” Kerner matched the name Vito to defendant, whose residence was
at 1212 Northwood Drive South, and the confidential informant positively identified a
photograph of defendant as Vito. Kerner used the confidential informant in two separate
controlled buys with defendant. Kerner supplied the confidential informant with a “video-only
recording device.” Investigators surveilled the controlled buys, and the confidential informant
was inside defendant’s residence for approximately three minutes. The confidential informant
told investigators he only had contact with defendant when he purchased the substance, which
tested positive in a field test for cocaine. Kerner watched the video recorded by the confidential
informant’s camera during the purchases. During the second purchase, Kerner saw defendant
“holding a plastic bag containing suspected cocaine.”
¶6 Prior to trial, defendant filed a motion to compel supplemental discovery.
Defendant argued, in part, for the release of the identity of the confidential informant. Without
the confidential informant’s name and criminal history, counsel was “unable to assess whether
-2-
any motions would be appropriate regarding the validity of the Search Warrant and Complaint
and Affidavit for Search Warrant.”
¶7 During a hearing on the motion, counsel argued she could not “make a valid
assessment as to whether or not [she] would have potentially a motion to suppress” without the
confidential informant’s identity and other items related to the search warrant. The State argued
the request related to probable cause, not guilt or innocence, and it was not required todisclose
the identity of the confidential informant. The State confirmed it did not intend to call the
confidential informant as a witness.
¶8 The trial court denied defendant’s motion. The court found under Illinois Supreme
Court Rule 412(j)(ii) (eff. March 1, 2001), a confidential informant’s identity did not need to be
disclosed where the defendant’s constitutional rights were not infringed. Because the State did
not intend to call the confidential informant as a witness and the informant was solely involved
in the controlled buys for which defendant was not charged, disclosure was not required.
¶9 A. Jury Trial
¶ 10 In December 2017, defendant’s jury trial commenced. The State proceeded only
on counts I, IV, and VI.
¶ 11 Officer Kerner testified he participated in the search of defendant’s residence.
Defendant was the only person at home and was found “laying on his back on his bed in the
southeast bedroom.” Defendant confirmed he slept in the bedroom where police officers found
him. Kerner identified People’s Exhibit No. 1 as “36 smaller individually packaged bags”
containing suspected crack cocaine and People’s Exhibit No. 2 as a small “cylinder-shaped glass
container” of suspected cocaine, both recovered from defendant’s front right pants pocket.
Kerner testified he and Officer Corey Phenicie further searched defendant’s bedroom and found
-3-
a Beretta .25-caliber pistol under the mattress, five individually packaged bags of suspected
cocaine in the pocket of a blue bathrobe, eight individually packaged bags of suspected cocaine
in the pocket of a red bathrobe, and a larger bag of suspected cocaine behind the bedroom door,
which Kerner identified as People’s Exhibit Nos. 3, 4, 5, and 7, respectively. Kerner also
identified People’s Exhibit No. 6, which was a plastic bag containing a “sizable amount” of
suspected cocaine found in the hallway of the home. Based on his experience, Kerner believed
the bags containing the substances were packaged for sale and their total street value to be
approximately $7000.
¶ 12 Officer Matthew Ballinger testified he remained with defendant while other
officers secured the residence. Ballinger stated defendant attempted to initiate a conversation and
said “something in regards to, ‘You won’t find anything in here, it’s back there. I don’t keep it
everywhere, you know.’ ”
¶ 13 Defendant testified on his own behalf and indicated his wife and 15-year-old son
resided with him. Defendant also testified he and his wife occasionally slept in separate
bedrooms and stated he had fallen asleep in his wife’s bedroom on the day police executed the
search warrant. Defendant denied previously seeing any of the bags of suspected cocaine found
throughout the residence or the .25-caliber pistol seized by police. Defendant stated both
bathrobes in the bedroom belonged to his wife.
¶ 14 At the conclusion of the trial, the jury found defendant guilty of manufacture or
delivery of a controlled substance with intent to deliver 15 grams or more but less than 100
grams of a substance containing cocaine.
-4-
¶ 15 The trial court sentenced defendant to 30 years’ imprisonment. Defendant
appealed his conviction and sentence, and this court affirmed. See People v. Taylor, 2020 IL App
(4th) 180300-U.
¶ 16 B. Postconviction Petition
¶ 17 On August 21, 2021, defendant filed a petition for postconviction relief pursuant
to the Post-Conviction Hearing Act (Act) (725 ILCS 5/122-1 et seq. (West 2020)). In his
petition, defendant argued he received ineffective assistance of counsel where counsel did not
(1) challenge the search warrant for violating the eavesdropping statute (see 720 ILCS 5/14-5
(West 2016)), (2) argue the search warrant was the product of fraud, (3) raise an entrapment
defense at trial, and (4) successfully argue for the disclosure of the confidential informant’s
identity.
¶ 18 On November 15, 2021, the trial court entered a written order summarily
dismissing defendant’s petition as frivolous and patently without merit. The court imposed a $40
filing fee and directed the Department of Corrections to collect the money from defendant’s trust
fund account.
¶ 19 Defendant appealed the trial court’s summary dismissal of his postconviction
petition. The court appointed OSAD to represent defendant on appeal. In May 2022, OSAD
moved to withdraw as counsel on appeal. We granted defendant leave to file a response to
OSAD’s motion on or before June 14, 2022. Defendant has not done so.
¶ 20 II. ANALYSIS
¶ 21 OSAD contends no meritorious argument can be made the trial court erred in
summarily dismissing defendant’s postconviction petition. We agree.
-5-
¶ 22 The Act provides a mechanism for a criminal defendant to challenge his
conviction or sentence based on a substantial violation of federal or state constitutional rights.
People v. Morris, 236 Ill. 2d 345, 354, 925 N.E.2d 1069, 1074-75 (2010). Proceedings under the
Act are collateral in nature and not an appeal from the defendant’s conviction or sentence.
People v. English, 2013 IL 112890, ¶ 21, 987 N.E.2d 371. At the first stage of proceedings, the
trial court must, within 90 days and without seeking or relying on input from the State,
summarily dismiss the petition if it determines the petition is frivolous or patently without merit,
meaning “the petition has no arguable basis either in law or in fact.” People v. Hodges, 234 Ill.
2d 1, 11-12, 912 N.E.2d 1204, 1209 (2009); see also 725 ILCS 5/122-2.1(a)(2) (West 2020);
People v. Gaultney, 174 Ill. 2d 410, 419, 675 N.E.2d 102, 107 (1996). At the first stage of
proceedings under the Act, all well-pleaded allegations are to be taken as true unless those
allegations are positively rebutted by the record. People v. Brown, 236 Ill. 2d 175, 189, 923
N.E.2d 748, 757 (2010). We review the trial court’s summary dismissal of a postconviction
petition de novo. People v. Edwards, 197 Ill. 2d 239, 247, 757 N.E.2d 442, 447 (2001).
¶ 23 A. Substantive Error
¶ 24 OSAD asserts it can make no colorable argument the trial court substantively
erred in dismissing defendant’s postconviction petition where defendant’s contentions have no
merit. Defendant made several claims of ineffective assistance of counsel in his postconviction
petition, namely, he received ineffective assistance where counsel did not (1) challenge the
search warrant for violating the eavesdropping statute, (2) argue the search warrant was the
product of fraud, (3) raise an entrapment defense at trial, and (4) successfully argue for the
disclosure of the confidential informant’s identity. We agree with OSAD none of defendant’s
claims of ineffective assistance of counsel have merit.
-6-
¶ 25 1. Standard of Review
¶ 26 To demonstrate ineffective assistance of counsel, a defendant must show
(1) counsel’s performance fell below an objective standard of reasonableness and (2) the
deficient performance resulted in prejudice to the defendant such that, but for counsel’s errors,
the result of the proceeding would have been different. Strickland v. Washington, 466 U.S. 668,
688, 694 (1996). If a defendant fails to prove either prong of the Strickland test, his claim for
ineffective assistance of counsel must fail. People v. Sanchez, 169 Ill. 2d 472, 487, 662 N.E.2d
1199, 1208 (1996). In the context of postconviction proceedings, “a petition alleging ineffective
assistance may not be summarily dismissed if (i) it is arguable that counsel’s performance fell
below an objective standard of reasonableness and (ii) it is arguable that the defendant was
prejudiced.” Hodges, 234 Ill. 2d at 17.
¶ 27 2. The Eavesdropping Statute
¶ 28 Defendant claimed counsel provided ineffective assistance where she failed to
challenge the search warrant for violation of the eavesdropping statute.
¶ 29 Section 14-2(a) of the Criminal Code of 2012 (720 ILCS 5/14-2(a) (West 2016))
provides:
“A person commits eavesdropping when he or she knowingly and
intentionally *** [u]ses an eavesdropping device, in a surreptitious manner, for
the purpose of overhearing, transmitting, or recording all or any part of any
private conversation to which he or she is not a party unless he or she does so
with the consent of all of the parties to the private conversation.”
-7-
Section 14-2(b) provides affirmative defenses to eavesdropping where the person is “a law
enforcement officer acting pursuant to an order of interception.” Id. § 14-2(b)(1). Evidence
obtained through illegal eavesdropping is inadmissible. Id. § 14-5.
¶ 30 In this case, Officer Kerner’s affidavit and testimony concerning the controlled
purchase only refer to video recordings. In his affidavit, Officer Kerner describes the recording
device as a “video-only recording device.” Defendant provided no evidence of an audio
recording. Video recording alone is not eavesdropping under the definition of section 14-2(a). Id.
§ 14-2(a); see also People v. Davis, 2020 IL App (3d) 190272, ¶ 16, 157 N.E.3d 1076 (holding a
video recording was independent from a simultaneous illegal audio eavesdropping). As Officer
Kerner’s search warrant affidavit was based on the video-only recording and the statement of the
confidential informant, the search warrant was not derived from an illegal audio eavesdropping.
Therefore, any argument by counsel the search warrant was the product of eavesdropping would
be meritless. Defendant cannot demonstrate prejudice. See Hodges, 234 Ill. 2d at 17. Thus, the
trial court did not err in finding defendant’s claim to be frivolous and patently without merit.
¶ 31 3. Fraud
¶ 32 Next, defendant claimed counsel was ineffective for failing to argue the search
warrant was the product of fraud. Specifically, defendant argued Officer Kerner committed fraud
in the search warrant application affidavit by claiming to have “known [defendant] to be in
violation of Drug Laws” by viewing the video recording.
¶ 33 In Franks v. Delaware, 438 U.S. 154, 155-156 (1978), the Supreme Court
recognized a limited right to challenge the veracity of the affidavit supporting a search warrant.
In order to overcome the presumption of validity of a search warrant affidavit sufficient to
invoke a hearing pursuant to Franks, “a defendant must make a ‘substantial preliminary showing
-8-
that a false statement knowingly and intentionally, or with reckless disregard for the truth, was
included by the affiant in the warrant affidavit’ and that ‘the allegedly false statement is
necessary to the finding of probable cause.’ ” People v. Petrenko, 237 Ill. 2d 490, 499-500, 931
N.E.2d 1198, 1204 (2010) (quoting Franks, 438 U.S. at 155-56).
¶ 34 In this case, defendant cannot make a substantial preliminary showing as to the
alleged false statement because Officer Kerner did not make the statement defendant claims. The
search warrant affidavit does not claim Officer Kerner knew defendant was engaging in a drug
transaction. Officer Kerner rather stated he “watched the video footage” from the confidential
informant, the confidential informant entered defendant’s residence to purchase cocaine, and the
video showed defendant “holding a plastic bag containing suspected cocaine while inside the
premises.” The confidential informant stated defendant sold him cocaine and identified
defendant by photograph. Therefore, defendant’s claim Officer Kerner lied in the search warrant
affidavit by claiming to have “known [defendant] to be in violation of Drug Laws” is positively
rebutted by the record.
¶ 35 Because the claim is positively rebutted by the record, defendant cannot establish
prejudice from counsel’s failure to challenge the search warrant as a product of fraud. See
Hodges, 234 Ill. 2d at 17. As such, the trial court did not err in finding defendant’s claim was
frivolous and patently without merit.
¶ 36 4. Entrapment
¶ 37 Defendant asserted counsel was ineffective for failing to raise an entrapment
defense. Defendant claimed the confidential informant told Officer Kerner he could “convince”
defendant to sell him cocaine, thereby entrapping him.
-9-
¶ 38 “ ‘Entrapment requires that a defendant show both that the State improperly
induced him or her to commit a crime and that he or she was not otherwise predisposed to
commit the offense.’ ” People v. Bonner, 385 Ill. App. 3d 141, 145, 895 N.E.2d 99, 103 (2008)
(quoting People v. Glenn, 363 Ill. App. 3d 170, 173, 842 N.E.2d 773, 776 (2006)). “The
entrapment defense is unavailable where the State has merely provided the defendant an
opportunity to commit the crime.” People v. Arndt, 351 Ill. App. 3d 505, 516, 814 N.E.2d 980,
991 (2004).
¶ 39 In this case, defendant was not charged for the drug transaction involving the
confidential informant. Defendant was charged and convicted of manufacture and delivery of a
controlled substance with intent to deliver involving the cocaine recovered during the execution
of the search warrant. Nothing in the record demonstrates the confidential informant “induced”
defendant to possess the cocaine found in his residence. Entrapment is an affirmative defense to
an offense. See 720 ILCS 5/7-12 (West 2016). As defendant was not charged with an offense for
the transaction with the confidential informant, any entrapment argument based on the
confidential informant’s actions would be meritless. Defendant cannot show he was prejudiced
by counsel’s failure to raise a meritless defense. See Hodges, 234 Ill. 2d at 17. The trial court
properly denied defendant’s entrapment claim as frivolous and patently without merit.
¶ 40 5. Confidential Informant
¶ 41 Finally, defendant asserted he received ineffective assistance when counsel failed
to successfully argue for the disclosure of the identity of the confidential informant.
¶ 42 Illinois Supreme Court Rule 412(j)(ii) (eff. Mar. 1, 2001) provides, “Disclosure of
an informant’s identity shall not be required where his identity is a prosecution secret and a
failure to disclose will not infringe the constitutional rights of the accused.” See also People v.
- 10 -
Criss, 294 Ill. App. 3d 276, 280, 689 N.E.2d 645, 648 (1998) (noting “[t]he State may refuse to
disclose the identity of law enforcement informants, so long as the nondisclosure will not deny
an accused his constitutional rights”). “[T]he propriety of disclosing the informant’s identity
must be decided on a case-by-case basis, balancing the public interest in protecting informants
against the right of the accused to prepare a defense.” People v. Ofoma, 242 Ill. App. 3d 697,
704, 610 N.E.2d 738, 743 (1993). “[I]f ‘the issue is one of probable cause, and guilt or innocence
is not at stake, the nondisclosure of an informer’s identity is not error.’ ” People v. McBee, 228
Ill. App. 3d 769, 773, 593 N.E.2d 574, 576 (1992) (quoting McCray v. Illinois, 386 U.S. 300,
311 (1967)).
¶ 43 Trial counsel argued for the disclosure of the identity of the confidential
informant in order to assess the validity of the search warrant, which was primarily based on the
informant’s statement and activity. The trial court denied defendant’s motion for disclosure.
Disclosure of the informant’s identity was not relevant to the charges defendant was facing at
trial, as the confidential informant was not involved in the search and discovery of cocaine in
defendant’s residence. The confidential informant was not called as a witness at trial. Instead, the
confidential informant was only involved in establishing probable cause necessary for obtaining
a search warrant. Therefore, as the issue of the confidential informant’s identity is “one of
probable cause, and guilt or innocence [was] not at stake,” it was not error for the trial court to
deny the disclosure. See McBee, 228 Ill. App. 3d at 773. Defendant cannot demonstrate he was
prejudiced by counsel not arguing more vigorously for disclosure when there was no such viable
argument to be made. As defendant cannot establish prejudice, the trial court did not err in
finding his claim was frivolous and patently without merit.
¶ 44 B. Procedural Error
- 11 -
¶ 45 OSAD asserts it can make no colorable argument the trial court procedurally erred
in summarily dismissing defendant’s postconviction petition at the first stage. The trial court
entered its written order on November 15, 2021, 87 days after defendant filed his petition. The
court’s decision was within the 90-day period allotted by the Act and the State did not participate
in the first-stage review. Accordingly, we agree with OSAD it is not arguable the trial court
procedurally erred in dismissing defendant’s petition.
¶ 46 OSAD also asserts it can make no colorable argument the trial court erred by not
waiving defendant’s filing fees. Section 27.9(a) of the Clerks of Courts Act (705 ILCS
105/27.9(a) (West 2020)) provides:
“The fees of the clerks of the circuit court shall not be waived for a
petitioner who is a prisoner in an Illinois Department of Corrections facility who
files a pleading, motion, or other filing *** seeking post-conviction relief under
[The Act] *** and the defendant is the State ***, and the court makes a specific
finding that the pleading, motion, or other filing which purports to be a legal
document is frivolous.”
Similarly, section 105(a) of the Code of Civil Procedure (735 ILCS 5/22-105(a) (West 2020))
provides:
“If a prisoner confined in an Illinois Department of Corrections facility
files a pleading, motion, or other filing *** seeking post-conviction relief under
[the Act] *** against the State *** and the Court makes a specific finding that the
pleading, motion or other filing which purports to be a legal document filed by the
prisoner is frivolous, the prisoner is responsible for the full payment of filing fees
and actual court costs.”
- 12 -
As discussed above, defendant’s petition was frivolous and patently without merit. The court
made a specific finding in its written order finding defendant’s petition frivolous. Therefore, the
court did not err where the filing fees “shall not be waived.” (Emphasis added.) See 705 ILCS
105/27.9(a) (West 2020). In addition, the court is authorized by statute to collect filing fees from
a prisoner’s trust fund account. 735 ILCS 5/22-105(a) (West 2020). Accordingly, we agree with
OSAD it is not arguable the trial court erred in assessing and collecting defendant’s filing fees.
¶ 47 III. CONCLUSION
¶ 48 For the reasons stated, we agree no meritorious issue can be raised on appeal. We
grant counsel’s motion to withdraw as appellate counsel and affirm the trial court’s judgment.
¶ 49 Affirmed.
- 13 - | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484373/ | NOTICE 2022 IL App (4th) 210088-U FILED
This Order was filed under November 16, 2022
Supreme Court Rule 23 and is NO. 4-21-0088
Carla Bender
not precedent except in the
limited circumstances allowed IN THE APPELLATE COURT 4th District Appellate
under Rule 23(e)(1). Court, IL
OF ILLINOIS
FOURTH DISTRICT
THE PEOPLE OF THE STATE OF ILLINOIS, ) Appeal from the
Plaintiff-Appellee, ) Circuit Court of
v. ) Champaign County
PARIS J. BARKER, ) No. 17CF494
Defendant-Appellant. )
) Honorable
) Randall B. Rosenbaum,
) Judge Presiding.
JUSTICE CAVANAGH delivered the judgment of the court.
Justices Turner and Harris concurred in the judgment.
ORDER
¶1 Held: The appellate court affirmed, concluding the trial court did not abuse its discretion
when it resentenced defendant following the revocation of her probation to the
minimum term of three years in prison for the Class 2 felony offense of identity
theft.
¶2 Defendant, Paris J. Barker, appeals from the trial court’s judgment sentencing her
to three years in prison for the Class 2 felony offense of identity theft (720 ILCS 5/16-30(a)(1),
(e)(1)(A)(iii) (West 2016)). She argues the court abused its discretion when it resentenced her
based on her conduct while on drug court probation rather than on the underlying offense. The
State argues the court did not abuse its discretion and its sentence was proper. We affirm.
¶3 I. BACKGROUND
¶4 On April 18, 2017, the State charged defendant with three counts of identity theft—
of which two were Class 2 felonies and one was a Class 3 felony, depending on the value of the
property stolen. See id. §§ 16-30(a)(1), (e)(1)(A)(iii), (e)(1)(A)(ii). The State alleged defendant
knowingly used another person’s name, information, and credit card to obtain credit from various
third parties.
¶5 On January 11, 2018, defendant advised the trial court she wished to participate in
drug court probation. The court thoroughly explained the conditions of drug court and the
expectations of defendant. She agreed, indicated she had consulted with her attorney, and had no
questions regarding the program. Defendant pleaded guilty to one count—a Class 2 felony. The
court advised defendant the possible sentence for a Class 2 felony was “not less than three nor
more than seven years in the penitentiary.” Defendant stated she understood.
¶6 The State provided the following factual basis for defendant’s plea. On May 16,
2015, defendant used Perry Beal’s credit card without his permission to pay her bond in a pending
Champaign County traffic case. Defendant also made recorded jail calls to an unknown party
giving Beal’s name and credit card number. On May 19, 2015, Beal was informed by One Main
Financial that a $10,000 loan was opened by defendant in his name. Defendant also used Beal’s
information to pay a lease, a Verizon Wireless bill, and an Ameren Illinois bill, totaling $3331.07.
¶7 The court accepted defendant’s guilty plea and, pursuant to the plea agreement,
placed defendant on 48 months’ drug court probation.
¶8 On June 5, 2019, the trial court entered an order of imprisonment for 180 days after
defendant was found to have benzodiazepines in her system because of medication administered
while she was in the county jail. She admitted to telling jail personnel, when asked, that she was
“still taking medication.” Based on defendant’s intentional misrepresentation to jail personnel, the
court ordered her into custody and to write an essay. Defendant submitted a letter to the court
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admitting she had lied to jail personnel. Given defendant’s confession of deceit, the court allowed
her to be released from jail.
¶9 However, on August 17, 2020, the State filed a petition to revoke defendant’s
probation because she had violated multiple conditions. The State alleged defendant’s urinalysis
testing submitted on August 4, 2020, returned positive for tramadol and fentanyl. The State further
alleged defendant failed to submit specimens “as directed” on May 13, 2020, May 20, 2020, and
August 4, 2020. The State later advised the court it was proceeding only on defendant’s failure to
submit on May 13, 2020.
¶ 10 On September 9, 2020, the trial court conducted a hearing on the State’s petition.
Mark Dotson, the case manager for the drug court team at Rosecrance, testified defendant “did not
show for a drop nor did she call to inform us that she had any obstruction to making it on time for
the drop” on May 13, 2020.
¶ 11 Caren Cohen-Heath, an addiction counselor at Rosecrance, testified she performed
the urinalysis of defendant on August 4, 2020. Defendant tested positive for tramadol, fentanyl,
and opiates.
¶ 12 Zac Dawkins, the problem-solving court coordinator for Champaign County,
testified he determined who submitted to drug drops on any day. Dawkins testified defendant was
required to submit on May 13, 2020. His duties also included retrieving positive samples from
Rosecrance and delivering them to the probation department. He said he retrieved a positive
sample from defendant’s August 4, 2020, drop.
¶ 13 Heather Rumple, an officer with the Champaign County Probation and Court
Services Department, testified she performed confirmation of positive or borderline drug tests from
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Rosecrance. On August 6, 2020, she tested defendant’s sample submitted on August 4, 2020, and
confirmed, with two tests, the sample was positive for tramadol and fentanyl.
¶ 14 The trial court continued the hearing to allow defendant the opportunity to present
a witness from a private testing agency. On November 9, 2020, the hearing resumed. At the State’s
request, the court took judicial notice of “the court file in this case, the drug court order, and the
conditions of [defendant’s] drug court probation, as well as the fact that tramadol and fentanyl are
controlled substances.”
¶ 15 Defendant presented the testimony of Liaqat Ali Abbas, a stipulated expert with the
United States Drug Testing Laboratories, Inc. Dr. Abbas testified he was in possession of
defendant’s hair sample, taken on September 16, 2020, which was tested for “amphetamines,
barbiturates, benzodiazepines, cocaines, methadones, meperidine, opiates, phenylcyclohexyl
piperidine, oxycodone, proposyphene, cannabinoids, tramadol, fentanyl, and sufentanil.” The
sample was negative for all drugs except cannabinoids. The test was “presumptive positive” but
there was not enough of a sample to test for a confirmatory test. He said these drugs stay in the
hair for “up to about 90 days for this test” but would degrade more quickly with hair coloring or
the like. Abbas also testified the hair test was not ideal to prove a single use. That is, he said, a
urine test would be more accurate to determine whether a person consumed a particular drug on a
particular day. Abbas testified: “Again, a hair test would not pick up a single use” for any drug.
¶ 16 Defendant testified she had been clean from opiates since September 11, 2017.
When she was advised she had tested positive on August 4, 2020, she was glad to hear Rosecrance
would be sending the sample to Rumple because “they ha[d] the machine there to test it.” She
denied using any drugs except the one she was given in jail in May 2019 to help her sleep. She
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said: “I would never jeopardize anything I have going on for fentanyl or tramadol.” She also denied
getting any treatments done on her hair.
¶ 17 After considering the evidence and arguments of counsel, the trial court found the
State had proved by a preponderance of the evidence defendant had violated the terms of her
probation by not submitting to testing on May 13, 2020, and testing positive for controlled
substances on August 4, 2020.
¶ 18 On January 4, 2021, the trial court held the resentencing hearing and noted it had
received and reviewed the presentence report dated December 29, 2020. Defendant testified she
was 36 years old with five daughters between the ages of 11 and 18. She had been employed full
time at Dart Solo Cup since October 2018. She started drug court probation in January 2018 and
had been clean from opiates since October 2017. Defendant reiterated the circumstances relating
to her August 4, 2020, positive drug test, indicating she sought additional testing. She then
acknowledged she also had a tramadol- and fentanyl-positive drug test on December 3, 2020. She
traveled to Springfield for a re-test the next morning. Those results were negative. On December
8 or 9, 2020, defendant visited her physician for bloodwork. They did a rapid test which also came
back positive for tramadol and fentanyl. The physician sent the results to Aegis Laboratory and
the re-test results were negative. Defendant said she had “never taken tramadol or fentanyl in [her]
life.” Defendant testified at the time she first tested positive in August 2020, she was two months
from graduating.
¶ 19 The State asked the trial court to sentence defendant to five years in prison on her
identity theft conviction. Defense counsel asked for another chance in drug court or, in the
alternative, another community-based sentence.
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¶ 20 In allocution, defendant admitted to always being an addict but because of drug
court, she was doing so good. She was employed and took care of her five daughters. She was
doing well at work, was current on her rent, and was actively helping her daughters with online
schooling. She was “just confused” as to why she kept testing positive when she had not taken any
controlled substances. She was “trying to do [her] best by [her] kids, by drug court and by
everything.”
¶ 21 The trial court indicated it had considered the (1) factual basis for the plea,
(2) petition to revoke “as well as the factual basis of that,” (3) presentence report, (4) statutory
sentencing factors, and (5) arguments of counsel and defendant. The court made the following
observations. First, the court specifically noted defendant was not being sentenced “because of her
conduct on probation.” Rather, she would be sentenced on the underlying Class 2 felony offense
of identity theft. The court noted it was a probationable offense but also “carrie[d] anywhere from
three to seven years in prison.”
¶ 22 The trial court noted the relevant factors in mitigation included defendant’s guilty
plea, her employment, her dependent daughters, the fact her actions had not threatened harm to
anyone, and her ongoing medical conditions. The noted factors in aggravation included the need
for deterrence, defendant’s criminal history, and her recent criminal activity. Apparently, after
being placed in drug court in January 2018, defendant committed and was convicted of at least
three driving-related misdemeanors and one Class 4 felony retail theft.
¶ 23 The trial court indicated this was “a very difficult case for the court” due to
defendant’s status as a full-time reliable employee at her job and her status as a single parent to
five daughters. The court considered defense counsel’s “most powerful argument” that it was
“absolutely” possible defendant used fentanyl and tramadol “once in a while” but generally, those
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who use these “pretty darn addictive drug[s],” were unable “to hold down a full-time job and care
for their children.” The court also referenced the fact defendant was sanctioned in drug court for
being deceitful when she advised jail personnel she needed medication and accepted Xanax.
¶ 24 The trial court mentioned defendant’s positive drug drops in August and December
2020 and her failure to test in October 2018, March 2020, and May 2020. The court recalled
defendant’s issues with and challenges to the testing procedures, which, it noted, she had an
“absolute right to do.” However, the court, after considering the State’s evidence, had declared the
process and procedures were reliable and relevant, and, accordingly, found defendant “did, in fact,
use tramadol or fentanyl.”
¶ 25 The trial court stated the following:
“This is a very troubling case for the court because [defendant] has done
most everything she’s supposed to do on drug court. She has appeared in court all
the time. She missed drops four or five times, which oftentimes suggests to the team
that somebody may be going back into old habits and they didn’t want to take a
test, and now we have two drug tests that are positive, she contests them, which is
her right, that suggests that she has fallen back into old ways.
I’m not sure what, if anything, drug court has to offer her other than coming
to court every week and drug testing her. It’s a lot of resources that we provide to
her that could be used on other individuals who are in need of treatment and
counseling.
[The prosecutor] argues that this is not so much about drug use but about
honesty and I agree. This is a case where the original charge had to do with a crime
of deception, identity theft. She has a theft in 2016 as well. Since she’s been on
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probation, she committed a retail theft with a prior theft conviction. This is also not
just about honesty, it’s also about complying with court orders. *** Kind of boggles
my mind that there were not petitions to revoke filed based on all of these driving
while suspendeds [sic] and the retail theft. Not holding it against her was a decision
that was made by the team back then, but not now, but she continues to commit
offenses and she still even has a pending case now.
She has young children, which I’m very sympathetic for.
***
I don’t want to send [defendant] to prison. I really don’t. To a great extent,
she has done well in drug court. *** The truth of the matter is when the court finds
somebody has violated probation, tested positive, and then I look at the record and
see since she’s been on probation she has committed offenses after offenses,
including a felony offense, I think about what is her rehabilitative potential. There’s
really very little drug court can provide here for her that she already hasn’t received.
And the truth of the matter is, even if I didn’t give her drug court and I have her
straight probation, there has to be some consequence for the noncompliance
because I don’t think she can complete probation[.] [H]er rehabilitative potential
has been markedly reduced by the fact that she’s committed new offenses and
violating her probation[.] ***.
***
I think that having regard to the nature and circumstances of the offense and
to the history, character and rehabilitative potential of the defendant, the court does
find, based on the unique circumstances of [defendant]’s case, that a
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community[-]based sentence would deprecate the seriousness of her conduct and
be inconsistent with the ends of justice. The minimum period in prison is the
appropriate sentence. I hereby sentence her to three years in prison.”
¶ 26 On February 1, 2021, defendant filed a motion to reconsider sentence, arguing her
sentence was excessive considering her family situation and other factors. She claimed the trial
court put too much weight on her criminal history and testimony in aggravation and too little
weight on her potential for rehabilitation and lack of violent history. Defendant did not specifically
argue, like she does on appeal, that the trial court sentenced her based on her conduct on probation,
rather than on the underlying offense.
¶ 27 At a February 11, 2021, hearing, the trial court denied defendant’s motion to
reconsider.
¶ 28 This appeal followed.
¶ 29 II. ANALYSIS
¶ 30 Defendant argues the trial court abused its discretion in resentencing her to three
years in prison. She claims (1) the court’s sentence was excessive “under the circumstances,”
(2) the court erred by not imposing another term of drug court probation when she had, for the
most part, been successful, and (3) the court erroneously sentenced her for her conduct on
probation, not for the underlying offense. We disagree and affirm defendant’s sentence.
¶ 31 A. Plain Error
¶ 32 Initially, we note defendant concedes she failed to raise these specific issues in her
postsentencing motion and, as a result, has forfeited appellate review. However, she asks this court
to review her claims despite her forfeiture under either prong of the plain-error doctrine. Namely,
she claims first, the evidence at the sentencing hearing was so closely balanced the purported errors
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may have impacted the severity of the sentence, and/or second, the errors were so egregious she
was denied a fair sentencing hearing. See People v. Hillier, 237 Ill. 2d 539, 544-45 (2010). As the
State points out, the first step of a plain-error analysis is to determine whether a clear or obvious
error occurred. Id. at 545.
¶ 33 B. Standard of Review
¶ 34 After revoking a sentence of probation, the trial court may resentence a defendant
to any sentence that would have been appropriate for the original offense. People v. Young, 138
Ill. App. 3d 130, 134-35 (1985). See also 730 ILCS 5/5-6-4(e) (West 2020) (stating that upon a
finding of a violation of a condition of probation, the trial court may continue a defendant on the
existing sentence or impose any other sentence originally available). A sentencing court’s
decisions are entitled to great deference. People v. Pina, 2019 IL App (4th) 170614, ¶ 19. The
court’s decision must be based on the particular circumstances of each case, including the
defendant’s credibility, demeanor, general moral character, mentality, social environment, habits,
and age as well as the applicable statutory factors in mitigation and aggravation. Id.
¶ 35 A reviewing court will reverse a trial court’s sentencing decision only if it is found
to be an abuse of discretion. Id. Generally, a sentence within the statutory limits will not be deemed
an abuse of discretion unless it is “ ‘greatly at variance with the spirit and purpose of the law or
manifestly disproportionate to the nature of the offense.’ ” Id. (quoting People v. Fern, 189 Ill. 2d
48, 54 (1999) and People v. Alexander, 239 Ill. 2d 205, 212 (2010)). When considering the
propriety of a sentence, the reviewing court must proceed with great caution and must not
substitute its judgment for the trial court’s merely because it would have weighed the factors
differently. Fern, 189 Ill. 2d at 53.
¶ 36 C. Excessive Sentence
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¶ 37 In this case, defendant was convicted of identity theft, a Class 2 felony offense and,
as a result, was subject to a sentencing range of three to seven years in prison. See 720 ILCS
5/16-30(a)(1); (e)(1)(A)(iii) (West 2020); 730 ILCS 5/5-4.5-35(a) (West 2020). Originally, the
trial court sentenced defendant to 48 months’ drug court probation. Upon revocation of that
probation, at resentencing, the court sentenced her to three years in prison. Defendant claims the
court abused its discretion by refusing to sentence her to another term of drug court probation. She
claims a three-year prison term was excessive, given she was mostly successful during her latest
term of probation.
¶ 38 The imposition of the three-year sentence was the minimum allowable term of
imprisonment for a Class 2 felony. The State recommended a five-year term despite its
representation to the trial court that defendant “ha[d] not ever done anything particularly horrible.”
However, the prosecutor emphasized defendant’s “tradition” of deceit, which “stretche[d] back to
her first retail theft in 2014” and continued through her drug court probation.
¶ 39 The trial court noted it considered the following factors in mitigation. First,
defendant originally pleaded guilty to the underlying offense. Second, she was employed full time.
Third, she had children who are dependent upon her. Fourth, her actions had not threatened harm
to anyone. Fifth, she suffered from diabetes and other medical conditions.
¶ 40 The trial court also noted two factors in aggravation. First, the court considered the
need for deterrence. Second, defendant had a “history of criminality” and was “still committing
offenses while she’s on probation.”
¶ 41 The trial court stated “this is not so much about drug use but about honesty and I
agree [with the prosecutor]. This is a case where the original charge had to do with a crime of
deception, identity theft.” The court questioned defendant’s rehabilitative potential, given her
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history of continued offenses, even while on probation, stating defendant’s “rehabilitative potential
has been markedly reduced.” Due to “the nature and circumstances of the offense and to the
history, character[,] and rehabilitative potential of the defendant, the court [did] find, based on the
unique circumstances of [defendant]’s case, that a community[-]based sentence would deprecate
the seriousness of her conduct and be inconsistent with the ends of justice. The minimum period
in prison [was] the appropriate sentence.”
¶ 42 Here, the trial court acknowledged and carefully considered the factors in
mitigation and aggravation, specifically noting defendant’s failure to show rehabilitative potential.
That is, probation had not deterred defendant’s criminal behavior. The court’s comments reflect it
ultimately gave more weight to the aggravating factors on resentencing. Because the court’s
imposition of the minimum term of three years in prison and its refusal to impose another term of
probation was not greatly at variance with the spirit and purpose of the law or manifestly
disproportionate to the nature of the offense, we find the court did not abuse its discretion. Having
found no error, there can be no plain error and we must honor defendant’s procedural default.
¶ 43 D. Factors Considered at Resentencing
¶ 44 Defendant also claims the trial court improperly considered her conduct on
probation, rather than the underlying offense, as the primary basis for the imposition of a three-year
prison term. The court may consider at resentencing defendant’s conduct on probation in assessing
her rehabilitative potential. People v. Turner, 233 Ill. App. 3d 449, 456 (1992). That is, “it is
appropriate for a defendant who conducts [her]self poorly while on probation to receive a more
severe sentence than [s]he originally received.” People v. Palmer, 352 Ill. App. 3d 891, 895 (2004).
However, the court may not punish a defendant for conduct that was the basis for the revocation
of probation. People v. Young, 138 Ill. App. 3d 130, 142 (1985). “[A] sentence within the statutory
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range for the original offense will not be set aside on review unless the reviewing court is strongly
persuaded that the sentence imposed after revocation of probation was in fact imposed as a penalty
for the conduct which was the basis of revocation, and not for the original offense.” (Emphases in
original.) Id.
¶ 45 Based on our review of the record, we are not persuaded the trial court imposed the
minimum prison term on defendant as punishment for her conduct on probation. Contrary to
defendant’s claim in her brief, the court specifically indicated on at least two occasions during the
sentencing hearing it was imposing the sentence for the underlying offense, not for her conduct on
probation. At the beginning of the hearing, the court stated: “First, [defendant] is not being
sentenced because of her conduct on probation. This is a resentencing for the underlying offense
of the class 2 felony of identity theft.” (Emphasis added.) The court later stated: “I think that having
regard to the nature and circumstances of the offense[,] *** a community[-]based sentence would
deprecate the seriousness of her conduct and be inconsistent with the ends of justice. The minimum
period in prison is the appropriate sentence.” (Emphasis added.)
¶ 46 Given the trial court’s explicit indication and explanation for the basis of the
sentence and, given the sentence is the minimum term of the statutory range for the original
offense, we find no sentencing error. That is, we are not strongly persuaded the sentence imposed
after revocation of probation was in fact imposed as a penalty for the conduct which was the basis
for the revocation. Defendant has failed to establish the court considered her conduct on probation
for any purpose other than assessing her rehabilitative potential. Again, because we find no error,
there can be no plain error, and we must honor defendant’s procedural forfeiture.
¶ 47 III. CONCLUSION
¶ 48 For the reasons stated, we affirm the trial court’s judgment.
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¶ 49 Affirmed.
- 14 - | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484370/ | Filed 11/16/22 Singh v. Riverlakes Brokers CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not
certified for publication or ordered published, except as specified by rule 8.1115(a). This opinion has not
been certified for publication or ordered published for purposes of rule 8.1115(a).
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
GURPREET SINGH, B322624
Plaintiff and Appellant, Kern County
Super. Ct. No.
v. BCV-17-101599
RIVERLAKES BROKERS, INC.,
et. al.
Defendants and
Respondents.
APPEAL from the judgments of the Superior Court of Kern
County, Thomas S. Clark, Judge. Affirmed.
Law Offices of Forrest R. Miller and Forrest R. Miller for
Plaintiff and Appellant Gurpreet Singh.
Kaufman Dolowich Voluck, Barry Z. Brodsky and Jennifer
E. Newcomb for Defendants and Respondents Riverlakes
Brokers, Inc., and Sandy Garone.
Chuck & Tsoong, Stephen C. Chuck and Victoria J. Tsoong
for Defendants and Respondents Jack Wright and Andrea
Wright.
INTRODUCTION
Gurpreet Singh sued Riverlakes Brokers, Inc., Sandy
Garone, Jack Wright, Andrea Wright, Ramiro Minero, and
Emerita Minero,1 seeking relief for injuries allegedly stemming
from his unsuccessful effort to purchase an almond orchard from
the Mineros.2 Respondents successfully moved for summary
judgment on all of his claims. Separate judgments were entered
for the Riverlakes Defendants, the Wrights, and the Mineros.
On appeal, Singh contends the judgments must be reversed
because the trial court: (1) was personally biased against him;
and (2) abused its discretion by refusing to continue the hearing
on respondents’ motions for summary judgment after he
belatedly obtained new counsel. As discussed below, we conclude
both arguments are meritless. Accordingly, we affirm.
BACKGROUND3
Singh filed his operative complaint in May 2018. In July
2019, the Riverlakes Defendants, the Mineros, and the Wrights
each filed a motion for summary judgment of the respective
claims asserted against them. All three motions were to be heard
1 Throughout this opinion, we refer collectively to Riverlakes
Brokers, Inc., and Sandy Garone as “the Riverlakes Defendants.”
Further, we refer collectively to Ramiro Minero and Emerita
Minero as “the Mineros,” and refer collectively to Jack Wright
and Andrea Wright as “the Wrights.” Lastly, we refer collectively
to all these defendants as “respondents.”
2 The lawsuit was also brought on behalf of J.P. World, Inc.,
and against Carl Kanowsky. Neither is a party to this appeal.
3 We limit our discussion of the background to the facts
relevant to the issues presented on appeal.
2
in early October 2019. At the time, Singh was represented by
Michael D. Peterson, who was served with copies of the motions.
On September 3, 2019, Peterson filed a motion to be
relieved as Singh’s counsel under California Rules of Professional
Conduct rule 1.16(a)(3).4 The motion was set for hearing on
September 27, 2019.
In his declaration in support of the motion, Peterson stated:
“Despite my desire to zealously represent my client’s interests, he
has consistently insisted upon presenting this prosecution
according to his own understanding of the law and its timing. I
have provided legal advice that I believe would be beneficial to
my client, but he prefers not to follow that advice making this
case extremely difficult for me. This, in conjunction with a family
health crisis related to my mother’s severe health decline[,] is
contributing to my worsening health condition, and I must put
my health and wellbeing before my job.” Peterson also stated:
“My client has secured an attorney, Murray Travish, Esq., to
substitute into this [matter] . . . . This attorney will substitute
into this case once an extension is ordered by this court, so that
he may have time to come up to speed on the case details. [¶] MY
CLIENT HAS A[L]READY PICKED UP HIS FILES FROM MY
OFFICE.” Further, Peterson stated he provided Singh with a
copy of the motion by mail, and that Singh “has consented to [his]
withdrawal in order to bring in a new attorney.”
4 Peterson’s motion references “Rule 1.16(c)(3)” but
subsequently quotes from California Rules of Professional
Conduct rule 1.16(a)(3). Rule 1.16(a)(3) requires a lawyer to
withdraw from the representation of a client if “the lawyer’s
mental or physical condition renders it unreasonably difficult to
carry out the representation effectively[.]” (Rules of Prof.
Conduct, rule 1.16(a)(3).)
3
On September 16, 2019, Peterson filed an ex parte
application for an order shortening the time to hear his motion to
be relieved as counsel. In his supporting declaration, Peterson
stated, in relevant part: (1) his health was declining due to
extreme stress and anxiety relating to the underlying lawsuit; (2)
Singh has procured an attorney who advised Peterson he would
substitute into the action once a continuance or stay has been
granted; (3) Singh has refused to follow Peterson’s advice or
recommendations; (4) Singh demanded all of his files—both in
electronic and hard copy formats—be transferred to him; (5)
Peterson complied with Singh’s request on September 3, 2019;
and (6) Peterson has been informed by Singh’s prospective
counsel that he is now in possession of Singh’s files.
The trial court held a hearing on the ex parte application
the next day. There, Peterson informed the court that he verbally
notified Singh of his intention to withdraw in July 2019, and that
he notified Singh of his ex parte application by leaving him a
voicemail and sending an e-mail the day before. He then stated
he had not spoken to Singh since July, when Singh had stopped
paying him, other than to discuss Singh’s desire to have his files
returned to him. Concerned that Singh had not been afforded an
adequate opportunity to oppose Peterson’s motion, the trial court
denied Peterson’s ex parte application to shorten time and kept
his motion to be relieved as counsel on calendar for September
27, 2019. It then vacated the hearings on respondents’ motions
for summary judgment with the intention of resetting them on
new dates at the September 27 hearing.
At the September 27 hearing, Peterson reiterated he had
not had any meaningful communication with Singh since July,
which is when Singh had stopped paying him. He also stated he
4
notified Singh of his intention to withdraw and of the September
27 hearing, but received no response.
The trial court granted Peterson’s motion to be relieved as
counsel, effective upon service of its signed order on Singh. It set
respondents’ motions for summary judgment for hearing on
March 27, 2020, and ordered that the deadlines for filing
opposition and replies would run from that date. Further, the
trial court, “in an excess of caution[,]” directed respondents to
send Singh notice of the new hearing date at the address
provided in Peterson’s notice of his motion to be relieved as
counsel.
That same day, the Riverlakes Defendants served Singh by
mail with written notice of the new hearing date on their motion
for summary judgment. Three days later, the Wrights also served
Singh by mail with written notice of the new hearing date for
their motion for summary judgment. Both notices stated the
deadlines to file opposition and reply were based on the new date.
The record does not indicate whether the Mineros complied with
the court’s directive regarding their motion for summary
judgment.
On October 2, 2019, the trial court filed a written order
granting Peterson’s motion to be relieved as Singh’s counsel. In so
doing, it found Peterson personally served Singh with the papers
in support of the motion, and noted respondents’ motions for
summary judgment were set for hearing on March 27, 2020.
Although the record reflects Singh was served on September 28,
2019 with a copy of the proposed order granting Peterson’s
motion to be relieved as counsel, it does not indicate whether he
was served with the signed order granting the motion, which was
filed on October 2, 2019.
5
On March 18, 2020, the trial court continued the hearings
on respondents’ motions for summary judgment from March 27 to
April 28, 2020. The Certificate of Mailing attached to the court’s
order does not indicate that a copy of the order was sent to Singh.
Nor does the record reflect respondents served Singh with
written notice of this order.
On March 20, 2020, the Riverlakes Defendants filed a
notice of non-opposition to their motion for summary judgment.
The notice’s title page points out the hearing on their motion had
been continued from March 27 to April 28, 2020. In the notice
itself, the Riverlakes Defendants stated the deadline for Singh to
oppose their motion was March 13, 2020, but no opposition had
been filed or served upon counsel for the Riverlakes Defendants.
They served Singh with a copy of their notice by overnight
delivery.
On April 7, 2020, the trial court continued the hearings on
respondents’ motions for summary judgment from April 28 to
July 6, 2020. Two days later, the Riverlakes Defendants filed a
notice of the court’s continuance of the hearing. They served
Singh with copies of the notice and the trial court’s order by mail.
On June 26, 2020, the trial court continued the hearings on
respondents’ motions for summary judgment from July 6 to July
7, 2020. Three days later, the Riverlakes Defendants filed a
notice of the court’s continuance and served Singh with a copy the
notice by overnight delivery.
Travish never substituted in as counsel for Singh while the
underlying case was pending. However, on July 6, 2020, William
Edwards substituted in as Singh’s counsel.
At the hearing held the next day, Edwards appeared on
Singh’s behalf and informed the court that he had been retained
6
the day before. The trial court stated it was inclined to grant the
three unopposed motions for summary judgment and asked
Edwards to address its tentative ruling. In response, Edwards
argued Singh himself was never served with copies of
respondents’ motions, and therefore did not have a fair
opportunity to respond to them. The court disagreed, finding the
case file reflected that in July 2019, the motions were served on
Singh’s counsel of record at the time.
Edwards also attempted to challenge respondents’ motions
on the merits. The trial court declined to entertain his
contentions, stating: “Mr. Edwards, I’m going to cut you off.
Once notice has been received for [a] motion for summary
judgment, there’s a form and procedure, a timeline that is
required to oppose the motion. None of that has been complied
with. And . . . the moving parties are required to be given an
adequate notice of the response evidentiary form [sic] as well as
adequate notice of the legal arguments, none of which has been
complied with here.” Subsequently, it granted all three motions
for summary judgment and entered separate judgments for the
Wrights, the Riverlakes Defendants, and the Mineros.
DISCUSSION
Singh’s sole argument on appeal is the judgments must be
reversed because the trial court: (1) was biased against him; and
(2) abused its discretion by failing to continue the hearing on the
summary judgment motions. We address each contention in turn.
I. Judicial Bias
Singh contends the trial court’s comments at the hearing on
Peterson’s ex parte application to shorten time and respondents’
motions for summary judgment reflect it was personally biased
7
against him. He therefore argues the judgments must be reversed
because the trial court’s decision to grant respondents’ unopposed
motions for summary judgment was “not steeped in
jurisprudence, but rather expediency fueled by [its] loss of
impartiality and loss of patience.”
As an initial matter, we note Singh forfeited his judicial
bias claim because he did not file a motion for disqualification in
the trial court. (See Code Civ. Proc., § 170.3, subd. (c)(1) [a party
who believes a judge is required to disqualify himself or herself
must file a disqualification motion in the trial court “at the
earliest practicable opportunity after discovery of the facts
constituting the ground for disqualification”]; see also People v.
Farley (2009) 46 Cal.4th 1053, 1110 [defendant forfeited judicial
bias claim by failing to assert it below]; Moulton Niguel Water
Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1218 [appellants
“did not preserve their claim of judicial bias for review because
they did not object to the alleged improprieties and never asked
the judge to correct remarks made or recuse himself”].) In any
event, even if Singh’s contention had been properly preserved and
presented, it fails on the merits. As discussed below, the record
does not reflect the trial court was biased, or that it otherwise
engaged in any misconduct warranting reversal.
Arguments for reversal based on judicial bias generally are
grounded in the due process clause,5 “which sets an exceptionally
5 In support of his judicial bias argument, Singh cites
California Rules of Court, Standards of Judicial Administration,
rule 10.20(b). Under that rule, judicial officers “should refrain
from engaging in conduct . . . that exhibits bias[ ]” (Cal. Rules of
Court, rule 10.20(b)(1)), “should ensure that courtroom
interactions are conducted in a manner that is fair and impartial
to all persons[ ]” (id., rule 10.20(b)(2)), and “should ensure that
8
stringent standard.” (Schmidt. v Superior Court (2020) 44
Cal.App.5th 570, 589.) “It is ‘extraordinary’ for an appellate court
to find judicial bias amounting to a due process violation.
[Citation.] The appellate court’s role is not to examine whether
the trial judge’s behavior left something to be desired, or whether
some comments would have been better left unsaid, but to
determine whether the judge’s behavior was so prejudicial it
denied the party a fair, as opposed to a perfect, trial. [Citation.]
Mere expressions of opinion, based on observation of the
witnesses and evidence, do not demonstrate judicial bias.
[Citation.] Numerous and continuous rulings against a party are
not grounds for a finding of bias. [Citation.]” (Ibid.)
Singh asserts two remarks by the trial court at the hearing
on Peterson’s ex parte application to shorten time demonstrate it
was biased against him. The first remark was in response to an
argument by the Riverlakes Defendants’ counsel in opposition to
the application. Counsel stated: “I understand the position
[Peterson] is in. This counsel has been of record through all
discovery, all documentation. He’s up to speed. He knows what
the arguments are. The issue here is we have [p]laintiffs who are
very unscrupulous and who are taking advantage of the system.
all orders, rulings, and decisions are based on the sound exercise
of judicial discretion and the balancing of competing rights and
interests are not influenced by stereotypes or biases[ ]” (id., rule
10.20(b)(3)). Violation of this rule is grounds for filing a complaint
with the court or the Commission on Judicial Performance. (See
id., rule 10.20(d).) However, Singh does not cite—and we could
not locate—any authority for the proposition a judgment may be
reversed based on a violation of this rule. In any event, as
discussed below, we conclude no violation occurred in this case.
9
We’ve been here on many discovery motions . . . .” At that point,
the trial court interjected, stating, “I’m painfully aware of this.”
The second comment occurred moments later, and again
was in response to an argument by the Riverlakes Defendants’
counsel. Counsel expressed concern that, if Peterson was
permitted to withdraw, Singh could needlessly prolong the case
further, which had already been pending for two years. The trial
court responded: “I’m as familiar, I think, as you guys are with
this case. I mean, I recognized the name of the case out of 700
cases [and] that’s not a good sign.”
Neither of those comments demonstrate or even suggest the
court harbored personal bias against Singh. Indeed, the trial
court ultimately ruled in Singh’s favor at the hearing by denying
Peterson’s application, as it wanted to give Singh an adequate
opportunity to oppose Peterson’s motion to be relieved as counsel.
Similarly, the record does not—as Singh contends—show
the trial court’s decision to grant respondents’ motions for
summary judgment was based on bias and/or mere impatience.
As discussed above, at the hearing on the motions, the trial court
asked Singh’s newly-substituted counsel to address the court’s
tentative ruling. It then rejected counsel’s contention that Singh
lacked sufficient notice of the motions, finding the case file
demonstrated the motions were served on Singh’s counsel of
record at the time in July 2019. Then, the court declined to
entertain counsel’s oral arguments opposing the motions on their
merits, given his and Singh’s non-compliance with the procedural
requirements governing the summary judgment process.
Therefore, the record demonstrates that rather than being based
on bias or impatience, the trial court’s rulings were predicated on
the case file, and on Singh’s failure to comply with the stringent
10
requirements of Code of Civil Procedure, section 437c, subdivision
(b)(2) and (3), which govern the process for opposing a motion for
summary judgment.
In sum, for the reasons discussed above, we conclude Singh
has not shown the trial court exhibited bias. Consequently, Singh
has not come close to satisfying the “exceptionally stringent
standard[ ]” governing reversal based on judicial bias. (Schmidt
v. Superior Court, supra, 44 Cal.App.5th at p. 589; see also People
v. Freeman (2010) 47 Cal.4th 993, 996 [“[O]nly the most ‘extreme
facts’ . . . justify disqualification based on the due process
clause.”].)
II. Declining to Grant Continuance
Generally, there is no right to a continuance as a matter of
law, and the power to determine whether a continuance should
be granted is within the discretion of the trial court. (Lerma v.
County of Orange (2004) 120 Cal.App.4th 709, 714.) “[I]n the
absence of an affidavit that requires a continuance under [Code of
Civil Procedure] section 437c, subdivision (h), we review the trial
court’s denial of [a] request for a continuance for abuse of
discretion.” (Cooksey v. Alexakis (2004) 123 Cal.App.4th 246,
254.)
Although not entirely clear, Singh appears to contend the
trial court abused its discretion by declining to continue the
hearing on respondents’ motions for summary judgment because:
(1) he was not timely or appropriately notified of Peterson’s
motion to be relieved as his counsel; (2) due to the COVID-19
pandemic, he had difficulty retaining a new lawyer to represent
him following Peterson’s departure, and was unable to do so until
the day before the hearing; and (3) the record fails to
demonstrate he was timely notified that respondents’ motions for
11
summary judgment had been reset for hearing on March 27,
2020, and continued several times thereafter. As discussed below,
we conclude his contentions are meritless, as they are
unsupported by the record.
On Singh’s first point, Peterson told the trial court that he
verbally informed Singh of his intention to withdraw in July
2019. Further, as discussed above, Peterson’s declarations in
support of his motion to be relieved as counsel and his ex parte
application to shorten time reflect Singh consented to Peterson’s
withdrawal, that Singh asked Peterson to return all of his files to
him, that Peterson complied with his request on September 3,
2019, and that Peterson served Singh with a copy of his motion
by mail. This uncontradicted evidence demonstrates Singh was
aware of Peterson’s intention to withdraw before Peterson filed
his motion to do so, and Singh was aware of the motion itself.
With respect to his second point, Singh points to no
evidence in the record concerning his efforts to retain counsel
following Peterson’s departure. Nor does he identify any evidence
establishing he experienced difficulty in finding a lawyer to
represent him due to the COVID-19 pandemic. We were unable to
locate any such evidence in the record.
Lastly, with respect to his third point, the record reflects
that in September 2019, the Riverlakes Defendants and the
Wrights notified Singh in writing that the hearings on their
motions for summary judgment had been continued from October
2019 to March 27, 2020, and that the deadlines for filing
oppositions and replies would trail from that date. We note that,
as Singh points out, the record does not show he was served a
copy of the trial court’s March 18, 2020 order continuing the
hearing from March 27 to April 28, 2020. It does show, however,
12
that on March 20, 2020, Singh was served with the notice of non-
opposition filed by the Riverlakes Defendants, which stated the
hearing originally set for March 27 had been continued to April
28, 2020. Subsequently, on April 9, 2020, Singh was notified in
writing that the hearing on all three motions for summary
judgment had been continued from April 28 to July 6, 2020.
Finally, on June 29, 2020, Singh was notified in writing that the
hearing on respondents’ motions had been continued from July 6
to July 7, 2020. This uncontradicted evidence establishes Singh
was timely notified of the initial continuance of the hearings on
respondents’ motions for summary judgment, as well as the
subsequent continuances.
In sum, for the reasons discussed above, we conclude
Singh’s contentions underlying his assertion of reversible error
are not supported by the record. Accordingly, he has not shown
the trial court abused its discretion by declining to continue the
hearing on respondents’ motions for summary judgment.
13
DISPOSITION
The judgments are affirmed. Respondents shall recover
their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORT
CURREY, J.
We concur:
MANELLA, P.J.
STONE, J.
Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
14 | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484377/ | NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
16-NOV-2022
11:31 AM
Dkt. 80 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
LFG HOLDINGS, LLC, a Hawaii limited liability company
and MAXAM PROPERTIES, LLC, a Hawaii limited
liability company, Plaintiffs/Counterclaim
Defendants-Appellees, v. THOMAS F. SCHMIDT,
Defendant/Counterclaimant-Appellant, and
INTERNATIONAL BUSINESS BROKERS, LLC, a Hawaii
limited liability company, and LIFE OF THE LAND
PACIFIC, LLC, a Hawaii limited liability company,
Defendants/Counterclaimants-Appellees,
and
THOMAS F. SCHMIDT, Third-Party Plaintiff-Appellant, and
INTERNATIONAL BUSINESS BROKERS, LLC, a Hawaii
limited liability company, and LIFE OF THE LAND
PACIFIC, LLC, a Hawaii limited liability company,
Third-Party Plaintiffs-Appellees, v. JERRY
RUTHRUFF, LARRY WHITE, DAMON L. SCHMIDT, LINDA
LOUISE SIMON, CAREY SUTHERLAND, PATRICIA M. LOUIA,
MELCOLM K. PERREIRA, ALICIA A. PERREIRA, SIONA
FRUEAN, CARLEEN LEINA#ALA FRUEAN, RICHARD STEPHEN
WALL, SAMUEL BROWN, POMAIKA#I PROPERTIES, LLC, a
Hawaii limited liability company, COHO PROPERTIES,
LLC, a Hawaii limited liability company, FIDELITY
NATIONAL TITLE COMPANY, a California corporation,
Third-Party Defendants-Appellees, and JOHN DOES 1-
10, JANE DOES 1-10, DOE PARTNERSHIPS, CORPORATIONS
AND/OR OTHER ENTITIES 1-10, Third-Party Defendants
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 15-1-1337-07 VLC)
SUMMARY DISPOSITION ORDER
(By: Leonard, Presiding Judge, and Wadsworth and Nakasone, JJ.)
Defendant/Counterclaimant/Third-Party Plaintiff-
Appellant Thomas F. Schmidt (Schmidt), self-represented, appeals
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER
from the September 19, 2018 Judgment, entered pursuant to Hawai#i
Rules of Civil Procedure (HRCP) Rule 54(b), by the Circuit Court
of the First Circuit (Circuit Court).1/ The Judgment: (1)
dismissed the August 17, 2015 amended third-party complaint
(Third-Party Complaint) with prejudice; (2) expunged the
September 22, 2016 Notice of Pendency of Action "with respect to
Lots 79 A and 79 B"; and (3) was entered in favor of Third-Party
Defendants-Appellees Siona Fruean and Carleen Leina#ala Fruean
(the Frueans) and Melcolm K. Perreira and Alicia A. Perreira (the
Perreiras) (collectively, Third-Party Defendants), and against
Schmidt and Defendants/Counterclaimants/Third-Party Plaintiffs-
Appellees International Business Brokers, LLC, and Life of the
Land Pacific, LLC (collectively, Third-Party Plaintiffs). The
Judgment followed entry of the Circuit Court's July 17, 2017
"Order Granting Motion of Third-Party Defendants . . . for
Summary Judgment Against Third-Party Plaintiffs . . . and Motion
to Expunge Notice of Pendency of Action (Motion Filed November 9,
2016 and Substantive Joinder Filed November 17, 2016)" (MSJ
Order).
On appeal, Schmidt contends that the Circuit Court
erred in granting the Frueans' November 9, 2016 motion for
summary judgment as to the Third-Party Complaint and motion to
expunge the Notice of Pendency of Action (Motion for Summary
Judgment).2/
1/
The Honorable Virginia L. Crandall presided.
2/
In his opening brief, Schmidt does not challenge the MSJ Order to
the extent it granted the Perreiras' November 17, 2016 substantive joinder in
the Motion for Summary Judgment (Substantive Joinder). Any alleged error in
granting the Substantive Joinder is thus deemed waived. See Hawai #i Rules of
Appellate Procedure (HRAP) Rule 28(b)(4) and (7).
We further note that the opening brief fails to comply with HRAP
Rule 28(b) in numerous material respects. For example, the opening brief
generally fails to provide: (1) "record references supporting each statement
of fact or mention of court . . . proceedings" in the statement of the case,
as required by HRAP 28(b)(3); (2) for each point of error, a statement of
"where in the record the alleged error was objected to or the manner in which
the alleged error was brought to the attention of the court[,]" as required by
HRAP 28(b)(4); and (3) "citations to the . . . parts of the record relied on"
in the argument section, as required by HRAP 28(b)(7). In particular, Schmidt
makes several factual assertions without any citation to the record, and the
argument section is general and conclusory. Nevertheless, because we have
"consistently adhered to the policy of affording litigants the opportunity 'to
(continued...)
2
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After reviewing the record on appeal and the relevant
legal authorities, and giving due consideration to the issues
raised and the arguments advanced by the parties, we resolve
Schmidt's contentions as follows and affirm.
I.
As a threshold matter, we address Third-Party
Defendants' contention, made in their answering brief, that this
appeal should be dismissed because Schmidt "did not obtain the
leave of court required of a vexatious litigant in order to
maintain this litigation."3/ Third-Party Defendants rely on the
arguments made in their August 31, 2019 motion seeking, among
other things, dismissal of this appeal for lack of appellate
jurisdiction, because Schmidt did not obtain leave of court to
file his notice of appeal.
On October 18, 2019, this court entered an order
denying the August 31, 2019 motion as follows:
[It] appears that we have appellate jurisdiction over
Schmidt's appeal from the . . . [J]udgment . . . pursuant to
[HRS] § 641-1(a) (2016) and Rule 54(b) of the [HRCP]. It
further appears that [Third-Party Defendants'] argument that
Schmidt's third-party complaint should have been dismissed
based on a vexatious litigant order should have been
presented, in the first instance, in the court below and
then in conjunction with arguments presented on the merits
of this appeal or perhaps a cross-appeal.
Therefore, IT IS HEREBY ORDERED that [Third-Party
Defendants'] Motion is denied without prejudice to any
arguments or requests made in conjunction with the briefing
on the merits and without prejudice to any further action by
the merits panel.
In their answering brief, Third-Party Defendants make
no new arguments or requests based on the vexatious-litigant
2/
(...continued)
have their cases heard on the merits, where possible[,]'" we address Schmidt's
arguments to the extent they are discernible. Morgan v. Planning Dep't, Cnty.
of Kauai, 104 Hawai#i 173, 180-81, 86 P.3d 982, 989-90 (2004) (quoting
O'Connor v. Diocese of Honolulu, 77 Hawai#i 383, 386, 885 P.2d 361, 364
(1994)).
3/
We take judicial notice that on April 29, 2003, the Circuit Court
of the Third Circuit entered an order in a separate and unrelated case, Civil
No. 03-1-0037K, declaring that Schmidt is a vexatious litigant pursuant to
Hawaii Revised Statutes (HRS) § 634J-7 (1993) and prohibiting him from "filing
any new litigation" without first obtaining leave of the presiding judge of
the court where the litigation is proposed.
3
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order, and do not specify where in the record they brought the
vexatious-litigant issue to the attention of the Circuit Court.
Their argument is thus deemed waived for purposes of this appeal.
See Ass'n of Apartment Owners of Wailea Elua v. Wailea Resort
Co., Ltd, 100 Hawai#i 97, 107, 58 P.3d 608, 618 (2002)(arguments
not raised in the trial court are ordinarily deemed waived on
appeal).4/
II.
We review a trial court's grant or denial of summary
judgment de novo using the same standard applied by the trial
court. Nozawa v. Operating Eng'rs Local Union No. 3, 142 Hawai#i
331, 338, 418 P.3d 1187, 1194 (2018) (citing Adams v. CDM Media
USA, Inc., 135 Hawai#i 1, 12, 346 P.3d 70, 81 (2015)). "Summary
judgment is appropriate if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." Id. at 342, 418 P.3d at 1198 (brackets
omitted) (quoting Adams, 135 Hawai#i at 12, 346 P.3d at 81). "A
fact is material if proof of that fact would have the effect of
establishing or refuting one of the essential elements of a cause
of action or defense asserted by the parties." Id. (quoting
Adams, 135 Hawai#i at 12, 346 P.3d at 81).
The moving party has the burden to establish that
summary judgment is proper. Id. (citing French v. Haw. Pizza
Hut, Inc., 105 Hawai#i 462, 470, 99 P.3d 1046, 1054 (2004)).
"Once a summary judgment movant has satisfied its initial burden
of producing support for its claim that there is no genuine issue
of material fact, the party opposing summary judgment must
'demonstrate specific facts, as opposed to general allegations,
that present a genuine issue worthy of trial.'" Id. (brackets
omitted) (quoting Lales v. Wholesale Motors Co., 133 Hawai#i 332,
359, 328 P.3d 341, 368 (2014)). The evidence and the inferences
4/
We also note that Third-Party Defendants cite no authority that
would require Schmidt to seek leave from this court before filing a notice of
appeal in these circumstances.
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drawn from the evidence must be viewed in the light most
favorable to the non-moving party. Yoneda v. Tom, 110 Hawai#i
367, 384, 133 P.3d 796, 813 (2006) (citing Coon v. City & Cnty.
of Honolulu, 98 Hawai#i 233, 244-45, 47 P.3d 348, 359-60 (2002)).
Here, the Frueans sought summary judgment on the Third-
Party Complaint, by which Schmidt claimed to have an ownership
interest in various properties pursuant to an option agreement,
including properties in the Kaloko II subdivision in North Kona,
County of Hawai#i, subsequently acquired by the Perreiras and the
Frueans and referred to, respectively, as Lots 79 A and 79 B (the
Properties). The Frueans argued that they were entitled to
summary judgment on all claims asserted in the Third-Party
Complaint because: (1) the claims were barred by the doctrine of
"res judicata/claim preclusion"; (2) the Frueans had not entered
into any transactions with any of the Third-Party Plaintiffs and
had not done anything else that could give rise to a claim
against them; and (3) the claims were barred by the applicable
statute of limitations.
As to their claim preclusion defense, the Frueans
argued that the claims asserted in the Third-Party Complaint were
barred by a final judgment dismissing Schmidt's complaint in a
2004 lawsuit filed in the Circuit Court of the Third Circuit
(2004 Lawsuit) in which Schmidt had claimed, among other things,
that he had an ownership interest in various properties,
including Lot 79 B. Specifically, the Frueans argued that there
was a final judgment on the merits of the 2004 Lawsuit; the
parties to the Third-Party Complaint are the same or in privity
with the parties in the 2004 Lawsuit; and the claims asserted in
the Third-Party Complaint are identical to those decided in, or
to claims that could have been properly litigated in, the 2004
Lawsuit. In support of their argument, the Frueans submitted,
along with other evidence, copies of the deeds showing the chain
of title of Lot 79 B from 1999, when Schmidt and his wife
conveyed their interest in the property to Phoenix Investments,
Inc., to 2005, when the Frueans acquired title to the property.
Schmidt filed a memorandum in opposition to the Motion
for Summary Judgment, contending that: (1) res judicata did not
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apply to the claims in the Third-Party Complaint because the
Frueans were not parties to the 2004 Lawsuit and only later
acquired Lot 79 B; (2) Schmidt was not involved in any business
dealings or transactions with the Frueans or the Perreiras, but
they benefitted from a fraud committed by Third-Party Defendant-
Appellee Jerry A. Ruthruff (Ruthruff); and (3) if Schmidt's
claims were barred by the statute of limitations, the court
should grant him leave to file an amended complaint alleging
facts to support equitable tolling of the relevant limitations
period.5/ Although Schmidt submitted his own declaration in
support of his opposition, it appears that he did not submit any
admissible evidence supporting: (a) his contention that he had a
current ownership interest in Kaloko Lot 79B; (b) any claims
asserted against the Frueans; or (c) his request for leave to
allege facts supporting equitable tolling of the relevant
statutes of limitations.
Following a hearing, the Circuit Court granted the
Motion for Summary Judgment and the Substantive Joinder "for the
reasons set forth in the motions and replies." (Formatting
altered.)
On appeal, Schmidt contends that the Circuit Court
erred in granting the Motion for Summary Judgment, but makes no
argument that there were any genuine issues of material fact that
Schmidt raised below which precluded summary judgment on any of
the grounds presented in the motion. Schmidt simply asserts that
the Circuit Court "fail[ed] to consider" that: (1) Schmidt never
sold the Properties to anyone, including the Frueans, and "never
got any money for real properties that were never sold"; (2)
Plaintiffs-Counterclaim Defendants-Appellees LFG Holdings, LLC
and MAXAM Properties, LLC, "by and through . . . Ruthruff's
fraudulent sale to [the Frueans], never had clean, clear and good
title to the . . . [P]roperties . . ., which were and are owned
by . . . Schmidt"; and (3) the Properties are subject to state
tax liens of approximately half a million dollars. None of
5/
Schmidt made the same or similar contentions with respect to the
Perreiras' Substantive Joinder, but as noted above, Schmidt has not challenged
the MSJ Order to the extent it granted the Substantive Joinder.
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Schmidt's factual assertions is supported by any reference to the
record, and no argument is made as to how any of these factual
allegations relate to the issues raised in the Motion for Summary
Judgment. See HRAP Rule 28(b)(4) and (7). Nor does the record
show that the Circuit Court "failed to consider" any relevant and
admissible evidence that was actually submitted in connection
with the motion.
In short, Schmidt does not present any discernible
argument explaining how the Circuit Court erred in granting
summary judgment in the Frueans' favor. Schmidt's "failure to
comply with HRAP 28(b)(4) [and (7)] is alone sufficient to affirm
the [C]ircuit [C]ourt's judgment." Morgan, 104 Hawai#i at 180,
86 P.3d at 989; see Hawaii Ventures, LLC v. Otaka, Inc., 114
Hawai#i 438, 478, 164 P.3d 696, 736 (2007) (stating that "an
appellate court is not obliged to address matters for which the
appellant has failed to present discernible arguments" (citing
HRAP Rule 28(b)(7))).
In any event, based on our de novo review, we conclude
that the Circuit Court did not err in granting summary judgment
in favor of the Frueans as to the Third-Party Complaint. In
support of the Motion for Summary Judgment, the Frueans presented
evidence establishing that there was a final judgment on the
merits of the 2004 Lawsuit; the parties to the Third-Party
Complaint are the same or in privity with the parties in the 2004
Lawsuit; and the claims asserted in the Third-Party Complaint are
identical to those decided in, or to claims that could have been
properly litigated in, the 2004 lawsuit.6/ See E. Sav. Bank, FSB
v. Esteban, 129 Hawai#i 154, 159-60, 296 P.3d 1062, 1067-68
(2013); see also Greenwell v. Palani Ranch Co., No. CAAP-17-
0000704, 2021 WL 5541895, at * 6 (App. Nov. 26, 2021) (mem.)
6/
The Frueans presented a claim-by-claim comparison of the 2004
Lawsuit and the Third-Party Complaint and thereby demonstrated that each of
the ten claims asserted in the Third-Party Complaint was identical to a claim
asserted in the 2004 Lawsuit, or involved facts and circumstances alleged in
the 2004 lawsuit, such that the claim asserted in the Third-Party Complaint
could have been properly litigated in the 2004 Lawsuit. See E. Sav. Bank, 129
Hawai#i at 160-61, 296 P.3d at 1068-69. In addition, Schmidt conceded that
"the claims against the Frueans . . . would be derivative of the claims of
fraud made against Ruthruff, et al.," which fraud allegations were asserted in
the 2004 Lawsuit. (Formatting altered.)
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(recognizing that "a grantee is in privity with his grantor" for
purposes of claim preclusion (quoting Tibbetts v. Damon, 17 Haw.
203, 205 (Haw. Terr. 1905))). At minimum, the Furueans
established that the doctrine of claim preclusion barred the
claims asserted in the Third-Party Complaint. Thus, the Circuit
court did not err in concluding there was no genuine issue as to
any material fact and that the Frueans were entitled to judgment
as a matter of law as to the Third-Party Complaint.
Schmidt appears to make no discernible argument in
support of his contention that the Circuit Court erred in
granting that part of the Motion for Summary Judgment that sought
to expunge the Notice of Pendency of Action. See HRAP Rule
28(b)(7). In any event, on this record, we conclude that the
Circuit Court did not abuse its discretion in granting the motion
to expunge the Notice of Pendency of Action.
For the reasons discussed above, we affirm the
September 19, 2018 Judgment, entered in favor of Third-Party
Defendants-Appellees Siona Fruean, Carleen Leina#ala Fruean,
Melcolm K. Perreira, and Alicia A. Perreira by the Circuit Court
of the First Circuit.
DATED: Honolulu, Hawai#i, November 16, 2022.
On the briefs:
/s/ Katherine G. Leonard
Thomas F. Schmidt, Presiding Judge
Self represented Defendant/
Counterclaimant/Third-Party
Plaintiff-Appellant. /s/ Clyde J. Wadsworth
Associate Judge
Jerry A. Ruthruff,
for Third-Party Defendants-
Appellees Melcolm K. Perreira, /s/ Karen T. Nakasone
Alicia A. Perreira, Siona Associate Judge
Fruean, and Carleen Leina#ala
Fruean.
8 | 01-04-2023 | 11-16-2022 |
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FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT November 16, 2022
_________________________________
Christopher M. Wolpert
Clerk of Court
CHESTER CRELLER,
Petitioner - Appellant,
v. No. 22-6062
(D.C. No. 5:20-CV-01059-PRW)
SCOTT CROW, (W.D. Okla.)
Respondent - Appellee.
_________________________________
ORDER DENYING CERTIFICATE OF APPEALABILITY*
_________________________________
Before MORITZ, BRISCOE, and CARSON, Circuit Judges.
_________________________________
In 2020, Petitioner Chester Creller filed a pro se habeas petition challenging his
2001 convictions under 28 U.S.C. § 2254. The district court dismissed his petition as
time barred and denied his application for a certificate of appealability (COA). Petitioner
now requests a COA. Because no reasonable jurist would debate the district court’s
dismissal, we deny Petitioner’s application for a COA and dismiss his appeal.
*
This order is not binding precedent except under the doctrines of law of the case,
res judicata, and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Appellate Case: 22-6062 Document: 010110770310 Date Filed: 11/16/2022 Page: 2
I.
In May 2001, a jury convicted Petitioner of first-degree rape, forcible oral
sodomy, and incest.1 He unsuccessfully moved for post-conviction relief in state court
three times between 2003 and 2016. He then filed a federal habeas petition in 2020,
raising nine claims: that his state trial denied him (1) due process of law, the right to a
fair trial, and equal protection under the law by allegedly having a biased judge preside;
(2) due process of law, the right to a fair trial, equal protection under the law, and the
right against self-incrimination by admitting his confession into evidence that he claims
the state coerced him into making about other crimes that it later used to prove his guilt
for the charged crimes; (3) due process of law and the right to confront his accuser
because the judge allowed the state to set up a chalkboard in between Petitioner and the
victim during the victim’s testimony; (4) due process of law and equal protection under
the law because the prosecutor allegedly knowingly lied to the jury during the trial; (5)
due process of law, equal protection under the law, the right to a fair trial, and the right to
effective assistance of counsel because his trial counsel allegedly did not interview or call
witnesses and made statements to the jury implying his guilt; (6) due process of law and
equal protection under the law by having ineffective appellate counsel for his direct
appeal; and (7) due process of law and equal protection under the law from introducing
prejudicial evidence at trial that had no probative value. On top of all that, Petitioner
1
In 2004, the Oklahoma Court of Criminal Appeals reversed and remanded with
instructions to dismiss Petitioner’s incest conviction for violating double jeopardy in his
first direct appeal.
2
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argues he has been denied (8) due process of law because the trial court refused to
consider a letter allegedly written by the victim after the trial that proved his innocence
and (9) that all of this proves he is actually innocent.
The magistrate judge reviewed the petition and recommended the district court
dismiss it as time barred. Petitioner’s state court judgment became final on December 20,
2002, but he did not seek federal habeas relief until October 19, 2020—almost eighteen
years later. Because Petitioner failed to file his habeas petition within one year from the
time “the [state court] judgment became final by the conclusion of direct review or the
expiration of the time for seeking such review,” 28 U.S.C. § 2244(d)(1)(A), the
magistrate judge determined that his time to file a federal habeas petition had expired.
Thus, the magistrate judge noted, without statutory or equitable tolling, Petitioner sought
federal habeas relief too late.
The magistrate judge first determined that Petitioner was not entitled to any more
statutory tolling. Petitioner’s first state court appeal, filed in 2003, tolled his time to file a
habeas petition. See 28 U.S.C. § 2244(d)(2). But by 2004, his statute of limitations
period began to run again, and Petitioner soon missed his window to move for habeas
relief. So that left the magistrate judge to consider equitable tolling. To equitably toll his
limitations period, Petitioner needed to establish that he pursued his rights diligently, but
an extraordinary circumstance stood in his way and prevented timely filing. Pace v.
DiGuglielmo, 544 U.S. 408, 418 (2005). The magistrate judge determined that Petitioner
failed to allege that some circumstance prevented him from timely filing his petition.
The magistrate judge also acknowledged that actual innocence may provide an exception
3
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to the limitations period in rare instances. But it rejected Petitioner’s actual innocence
argument because Petitioner could only point to years-old evidence that could allegedly
prove his innocence (and only legal, not factual, innocence at that), making his 2020
petition still too late.2 The magistrate judge recommended, then, that the district court
decline to review the merits and dismiss the petition.
Petitioner objected to the magistrate judge’s report and recommendation. In his
objection, he raised a new argument: that limited law library access hindered his ability to
file a habeas petition. Petitioner claimed that he never stepped foot in a law library until
2012 because he had no access to one before then, and even once he did gain access, he
did not have enough legal understanding to piece together his petition until a legal
assistant began helping him in 2015. His access to the law library became limited again
when the COVID-19 lockdowns started in 2020. But, Petitioner insisted, he did not “sit
idle” during the times he could not access the law library. For example, he claimed that
he moved to produce documents about his convictions in preparation for challenging his
convictions with help from the Mid-Western Innocence Project (later his case was moved
to the Oklahoma Innocence Project). And even after he “split” with the innocence
project organizations, he still applied to receive DNA testing about his rape conviction.
He also claimed to have discovered new evidence on the law library computer in 2016
that he included in his post-conviction application.
2
We later clarified that “new evidence” for an actual innocence claim means
newly presented evidence, not newly discovered. See Fontenot v. Crow, 4 F.4th 982,
1032 (10th Cir. 2021). Thus, a lack of diligence is not fatal to an actual innocence claim.
See id.
4
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Besides explaining his untimely petition, Petitioner objected to the magistrate
judge’s consideration of the new evidence he presented. He accused the magistrate judge
of only considering one of the four pieces of new evidence he had presented in his
petition—a letter Petitioner received from the victim in 2012. According to Petitioner,
the magistrate judge ignored (1) a response from the state about a doctor who examined
the victim, attributing her injuries to an “in-home accident,” not sexual abuse; (2) an
affidavit from his youngest son who attested that he never witnessed the physical or
sexual abuse that the state accused Petitioner of committing; and (3) events during the
trial that proved the presiding judge harbored bias against him. Petitioner explained how
all four pieces of new evidence show that had the jury considered this evidence at trial, it
would not have convicted him and therefore the court’s unwillingness to consider the
merits of his petition would result in a miscarriage of justice.
The district court adopted the report and recommendation. It agreed with the
magistrate judge’s determination that Petitioner’s limitations period had run, and
Petitioner had not shown he diligently pursued his claims to warrant equitable tolling.
Nor had Petitioner demonstrated actual innocence. The district court did not consider
Petitioner’s explanation for why he could not timely file because he did not include the
explanation in his original petition. Plus, the district court noted, Petitioner failed to
adequately justify his delay anyway because he raised “primarily” the same claims in his
applications for post-conviction relief, “undercutting” his argument that lack of law
library access caused the delay. So the district court dismissed the habeas petition and
denied Petitioner a COA. Petitioner now asks us to grant him a COA.
5
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II.
We will issue a COA only if a petitioner has “made a substantial showing of the
denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). This means the petitioner “must
show that the district court’s resolution of the constitutional claim was either debatable or
wrong.” Laurson v. Leyba, 507 F.3d 1230, 1232 (10th Cir. 2007) (quotation omitted).
And when a district court dismisses on procedural grounds, the petitioner must also show
that a reasonable jurist could find the procedural dismissal debatable. Id. Thus, when a
district court dismisses on procedural grounds, an applicant faces a “double hurdle” to
relief. Id. In determining whether to grant a COA, courts should resolve procedural
issues first whenever possible. See Slack v. McDaniel, 529 U.S. 473, 485 (2000)
(citation omitted).
Petitioner did not object to the magistrate judge’s finding that the limitations
period expired in 2004, years before he filed his habeas petition in 2020. Petitioner
instead focused his objection on explaining why he untimely filed his petition, arguing he
is entitled to equitable tolling because newly discovered evidence shows he is actually
innocent but inadequate access to a law library delayed his ability to file a habeas
petition. Because Petitioner sought federal habeas relief too late, he must prove he is
entitled to equitable tolling or can show actual innocence to receive a COA. We address
each exception in turn.
A.
To equitably toll the limitations period to move for habeas relief, Petitioner must
establish that he pursued his rights diligently, but an extraordinary circumstance stood in
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his way and prevented timely filing. Pace, 544 U.S. at 418. Petitioner explained his
reasons for untimely filing his petition but did so for the first time when he objected to
the report and recommendation. So he waived arguments attempting to prove his
diligence and extraordinary circumstances not raised until his objections. See Marshall v.
Chater, 75 F.3d 1421, 1426 (10th Cir. 1996) (citations omitted) (“Issues raised for the
first time in objections to the magistrate judge’s recommendation are deemed waived.”).
Thus, we need not address the equitable tolling issue. Id. And because none of the
arguments we could address about this issue (because he raised them in his initial
petition) show his diligence or extraordinary circumstances that prevented him from
timely filing, a reasonable jurist would not debate whether Petitioner is entitled to
equitable tolling.
B.
Actual innocence can also serve as an exception to an expired limitations period.
Fontenot v. Crow, 4 F.4th 982, 1030 (10th Cir. 2021). “When used to overcome
procedural issues,” an actual innocence showing serves as a “gateway through which a
petitioner must pass to have his otherwise barred constitutional claim considered on the
merits.” Id. at 1029–30. But for a court to apply this exception, Petitioner must show
that “more likely than not[,] any reasonable juror would have reasonable doubt” about
Petitioner’s convictions considering the new evidence he has presented in his petition.
Id. at 1030 (quoting House v. Bell, 547 U.S. 518, 538 (2006)).
This is a demanding standard. Id. at 1031 (citation omitted). And this “new
evidence” must also be reliable evidence not introduced at trial, although the habeas court
7
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need not consider whether the evidence would be admissible at this gateway stage. Id. at
1031–32. The habeas court should consider this new evidence within the context of all
the evidence—old and new, incriminating and exculpatory. Id. The new evidence must
prove factual, not legal, innocence. Laurson, 507 F.3d at 1233 (citing Bousley v. United
States, 523 U.S. 614, 623 (1998)). While lack of diligence in developing the new
evidence does not disqualify that evidence from supporting an actual innocence claim,
the petitioner’s untimeliness factors into whether the petitioner has “reliably shown”
actual innocence. Fontenot, 4 F.4th at 1033 (citations omitted). Finally, because an
actual innocence claim requires us to consider the law and facts, we review it de novo.
Id. at 1034.
As the magistrate judge noted, Petitioner’s actual innocence argument—his ninth
claim for relief in his petition—did not specify any new evidence proving he is actually
innocent. Rather, this last claim for relief pointed to constitutional errors that allegedly
occurred during his trial, rendering his conviction unconstitutional, according to
Petitioner. Petitioner made a legal argument for his innocence, not a factual one,
defeating his ability to obtain relief under his ninth claim. See Laurson, 507 F.3d at 1233
(citing Bousley v. United States, 523 U.S. 614, 623 (1998)). But elsewhere in his
petition, Petitioner alleged four new pieces of evidence which he claims prove his actual
innocence, the same four he mentioned in his objection to the report and
recommendation. As a reminder, that evidence includes: (1) the recusal of his trial judge;
(2) a report from the doctor who examined the victim, attributing her injuries to an “in-
home accident,” not sexual abuse; (3) a letter Petitioner received from the victim—his
8
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daughter—in 2012; and (4) an affidavit from his youngest son who attested that he never
witnessed the physical or sexual abuse that the state accused Petitioner of committing.
The first one does not qualify as new evidence while the other three do not sufficiently
show actual innocence. Thus, the lack of new evidence showing actual innocence
precludes him from prevailing under this exception.
Petitioner asked the judge who presided over the 2001 trial to recuse himself from
hearing Petitioner’s application for DNA testing; that judge agreed to do so “due to
incidents that occurred at trial.” Petitioner argues the recusal, especially the reason for
recusing, proves the judge harbored a bias against him and counts this as one piece of
“newly discovered evidence” proving his innocence. But Petitioner admits the recusal
does not “deal with evidentiary issues,” and thus reserves that fact for another part of his
petition. Because the judge’s recusal does not prove factual innocence, as Petitioner
appears to concede, this piece of evidence cannot satisfy the demanding actual innocence
standard.
Petitioner’s next piece of evidence consists of a response he received about the
forensic evidence he claims the state used to convict him. In 2014, Petitioner applied for
forensic DNA testing of biological materials supporting his convictions. But the state
found no biological materials to test, determining that the jury convicted Petitioner
“based on his voluntary statement” and medical testimony, rather than forensic evidence.
While running through all his requests for DNA testing, the state noted that Petitioner
asked for DNA evidence from a hospital visit for the victim months before the state
accused Petitioner of sexually abusing her. The state found that it could not conduct a
9
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DNA forensic test from this hospital visit because the doctor treated her for an “in-home
accident,” not abuse, and thus law enforcement did not collect DNA during this visit. In
another part of his petition, Petitioner claims that the doctor who examined the victim
ended up testifying at trial that this hospital visit occurred from the victim suffering a
sexual assault. The record does not support that the doctor testified to this at trial, but the
record does support that a doctor later examined the victim for sexual abuse and found
“significant” physical features on her body suggesting she had suffered such abuse. The
state’s response to Petitioner confirmed that the doctor’s testimony spoke to a later
examination where he found evidence of her experiencing sexual abuse. Overall, this
response does not make it “more likely than not [that] any reasonable juror would have
reasonable doubt” about Petitioner’s convictions. Fontenot, 4 F.4th at 1030 (quotation
omitted). In fact, the state’s response reinforces Petitioner’s conviction because it points
both to his confession and the doctor’s examination confirming the victim’s physical
signs of sexual abuse.
Petitioner also claims a letter the victim—his daughter—sent him in 2012 proves
he is actually innocent of sexually abusing her. In the letter, the victim supposedly asked
Petitioner to admit to sexually abusing her in ways not addressed at trial. Petitioner
speculates that if she had made these allegations at trial, no juror would have found him
guilty beyond a reasonable doubt because he claims a physical exam disproved one of her
allegations, discrediting her testimony. To start, the letter Petitioner mentions in his
petition is not the same letter he attaches as an exhibit to his brief. Petitioner claims
someone else lost the letter with unsupported allegations against him. So Petitioner
10
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apparently expects us to take his word for it that the victim made false allegations that he
could disprove from medical exams. This does not meet the demanding actual innocence
standard. Plus, the letter was not an affidavit; the victim wrote this private letter so she
could “move on” from the trauma Petitioner caused her to suffer. So even if the victim
made allegations in that letter that the trial evidence did not corroborate, that does not
suggest that “more likely than not[,] any reasonable juror would have reasonable doubt”
about Petitioner’s conviction. Fontenot, 4 F.4th at 1030 (quotation omitted).
Last, Petitioner points to an affidavit his son submitted in 2016 attesting that
Petitioner never beat him or sexually abused his sister and generally corroborating
Petitioner’s version of events explaining his innocence. The affidavit is Petitioner’s
strongest piece of evidence, but still does not present “evidence of innocence so strong
that a court cannot have confidence in the outcome of the trial . . . .” Fontenot, 4 F.4th at
1031 (quotation omitted). Petitioner’s son submitted this affidavit seventeen years later,
recalling early childhood experiences. Although the untimeliness of this affidavit does
not defeat an actual innocence claim, a reasonable juror could question the affidavit’s
credibility given the passage of time. See Fontenot, 4 F.4th at 1033–1034 (quotation
omitted) (explaining that untimeliness “does bear on the credibility of evidence proffered
to show actual innocence”). Because other evidence at trial, such as Petitioner’s
confession and medical testimony, demonstrated Petitioner’s guilt, we cannot say that
“more likely than not[,] any reasonable juror would have reasonable doubt” about
Petitioner’s convictions after reading the affidavit. Id. at 1030 (quotation omitted).
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None of Petitioner’s new evidence meet the actual innocence standard. Nor did
Petitioner present evidence in his petition to warrant equitable tolling. Taken together,
these failures mean Petitioner cannot excuse the fact that he missed the one-year statutory
deadline to move for federal habeas relief. Thus, a reasonable jurist would not debate
whether the district court correctly dismissed the petition as time barred. Laurson, 507
F.3d at 1232 (citation omitted). We therefore deny Petitioner’s application for a COA
and dismiss the appeal.
DENIED and DISMISSED.
Entered for the Court
Joel M. Carson III
Circuit Judge
12 | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484378/ | 11/16/2022
IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs October 27, 2022
STATE OF TENNESSEE v. MARLON J. JOHNSON, JR.
Appeal from the Criminal Court for Sullivan County
No. S52180, S52241 James F. Goodwin, Jr., Judge
___________________________________
No. E2022-00098-CCA-R3-CD
___________________________________
The Defendant-Appellant, Marlon J. Johnson, Jr., appeals the revocation of his six-year
probationary sentence for two counts of aggravated burglary, domestic assault,
misdemeanor assault, misdemeanor theft, and misdemeanor false imprisonment. The
Defendant conceded the probation violation before the trial court and on appeal.
Accordingly, the sole issue presented for our review is whether the trial court erred in
ordering the Defendant to serve the balance of his sentence in confinement. Upon review,
we affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Criminal Court Affirmed
CAMILLE R. MCMULLEN, J., delivered the opinion of the court, in which JAMES CURWOOD
WITT, JR., P.J. and ROBERT W. WEDEMEYER, J., joined.
Andrew J. Gibbons, District Public Defender, Kendall Stivers Jones (on appeal), Wesley
Mink (at trial), and Leslie Hale (at trial) Assistant District Public Defenders, for the
Defendant-Appellant, Marlon J. Johnson, Jr.
Herbert H. Slatery III, Attorney General and Reporter; Courtney N. Orr, Assistant Attorney
General; H. Greely Well, Jr., District Attorney General; and Kaylin Redner-Hortenstein,
Assistant District Attorney General, for the appellee, State of Tennessee.
OPINION
On September 20, 2006, the Defendant entered a guilty plea in case number S52180
to aggravated burglary, misdemeanor assault, theft of property valued at $500 or less, and
misdemeanor false imprisonment. The Defendant also entered a guilty plea in case number
S52241 to aggravated burglary and domestic assault. For these offenses, he received a
total effective sentence of six years to be served on supervised probation. The judgment
forms also reflect that the Defendant’s effective six-year probationary sentence was to be
served consecutively to a previously imposed sentence in Virginia. The Defendant’s
Tennessee probationary period was not scheduled to begin until after completion of his
cases in Virginia. On July 7, 2021, a probation violation report was filed, and it provides
a detailed history of the Defendant’s supervision, which we find instructive. On April 9,
2013, a warrant was issued by the trial court in Tennessee because the Defendant had
absconded from probation in Virginia. The report characterized the Defendant’s Tennessee
case as a “tracking case” at the time of the warrant. Nevertheless, on August 3, 2017, the
Defendant’s Tennessee probation was “revoked/reinstated,” and he was ordered to “start
over” with an expiration date of August 3, 2023. The factual circumstances of the first
violation for absconding were not included in the report. On August 14, 2017, the
Defendant reported to the Tennessee probation authorities and was advised of the terms
and conditions of probation. On August 9, 2018, a transfer request to Pennsylvania was
submitted and subsequently approved on August 30, 2018. The Defendant had been under
the supervision of Pennsylvania Probation and Parole from August 30, 2018, to May 15,
2021.
Regarding the instant violation, the July 2021 probation violation report alleged that
the Defendant committed a technical violation by absconding from probation again. The
Defendant’s Pennsylvania probation officer reported that on May 6, 2021, the Defendant
absconded from GEO Scranton, a half-way house, and when he reported to his probation
officer the next day, the Defendant tested positive for cocaine. The probation officer
directed the Defendant to report to Just Believe, another in-patient drug treatment facility,
with instructions to successfully complete treatment, file the appropriate confidential
paperwork, and not “to pull those forms.” On May 15, 2021, the Defendant signed himself
out of Just Believe against staff advice and in violation of his probation officer’s
instructions. The probation officer also advised that the Defendant did not have an
approved residence, and his whereabouts were unknown at that time. Based on the
violation report, the trial court issued a warrant for the Defendant’s arrest on July 7, 2021,
alleging the following violations: (1) failure to inform his probation officer before changing
his residence or employment, (2) failure to allow his probation officer to visit his home or
employment site (3) failure to carry out all instructions of probation officer; and (4) failure
to report truthfully and fully to his probation officer. The arrest warrant also alleged that
the Defendant violated his probation by using legal intoxicants.
At the top of the January 11, 2022 sentencing hearing, the Defendant stipulated to
the facts asserted in the arrest warrant and entered a guilty plea to violating the terms of his
probation. In proceeding to determining the consequences for violating his probation, the
Defendant testified and explained that his Tennessee cases originated in 2006, but his
probation did not start in Tennessee until August of 2017, because it was consecutive to a
nine-year sentence he was serving in the Virginia State Prison. The Defendant testified
that he had a prior probation violation for “dirty urine” before starting the present probation
-2-
sentence. He told his probation officer that he “needed help,” and as a result, he was
recommended to attend ADAPPT1, a Department of Correction drug facility based in
Pennsylvania. The Defendant admitted that shortly after completing sixty days of inpatient
treatment at ADAPPT, he relapsed and used drugs again. A letter from ADAPPT was
introduced as an exhibit, confirming that the Defendant successfully completed treatment
from March 4, 2021, through May 3, 2021. The Defendant was placed in GEO Scranton
upon completion of the ADAPPT program.
The Defendant explained the circumstances of his second absconding violation as
follows. On May 6, 2021, the Defendant was ten to fifteen minutes late to report to the
probation office because he was “driving around trying to figure out … where I lived at,
where the halfway house was.” It was his understanding that if he was more than five
minutes late to report to probation, he was to return to his listed residence and report to
probation again the next day because being late was automatically considered absconding.
When the Defendant reported the next day, he was given a urinalysis test, and he tested
positive for cocaine. The Defendant asked his probation officer to allow him to attend Just
Believe, a different rehabilitation facility, and his probation officer approved the request.
The Defendant said that he reported to Just Believe, but he left shortly thereafter because
his roommate was “shootin up,” and he chose to leave rather than report the misconduct of
his roommate. The Defendant testified that he assumed he would be in trouble for leaving
and went home to talk to his family about it. He knew that the authorities would soon come
to his home and take him back to Tennessee to answer for the violation. The Defendant
was arrested in Pennsylvania in September of 2021. While the Defendant acknowledged
significant strides in his struggle against drug addiction, he agreed that he remained a drug
addict. He stated that he had approval from the director of ADAPPT to attend the inpatient
drug treatment program for another thirty-five-day period. The Defendant asserted that he
joined Miller Motte, an online college, to earn a bachelor’s degree in Business
Administration and that all his fines in the present case were paid. Ultimately, the
Defendant asked the court to place him back on probation with the stipulation that he go
back to the ADAPPT program.
On cross-examination, the Defendant admitted that he violated the terms of his
probation twice by using cocaine and both times he was given a break to attend a
rehabilitation drug facility. The Defendant stated that before he left Just Believe, he did not
tell anyone that his roommate was “shootin up” nor did he ask to have another roommate.
The Defendant explained that he was unable to contact his probation officer after leaving
Just Believe because they were on vacation. He did not go to the Probation Office because
1
The probation revocation hearing transcript refers to the program as “ADAPT,” but the program’s
proper spelling is ADAPPT, as this reflects the spelling indicated in Exhibit 1, a letter from the assistant
facility director of programs at GEO Reentry Services.
-3-
“they were not letting anybody come to the office due to Covid,” but he called and left a
message with the secretary.
In closing, defense counsel argued the Defendant should be placed back on
probation because (1) he had not been convicted of a crime since 2006, (2) he had a wife
and child to care for, (3) he had been accepted into a drug treatment facility, (4) he had
enrolled in an online school, and (5) he had made substantial payments on his court costs
and fees. The State argued that the Defendant should be required to serve the remainder of
his sentence in confinement because (1) the Defendant testified negatively about his prior
experiences in two different treatment programs, (2) based on his two “dirty” drug screens,
and (3) his prior violation for absconding. In ordering the Defendant to serve his sentence
in confinement, the trial court found that the Defendant had a prior violation for
absconding. The trial court acknowledged that the first violation for absconding was while
the Defendant was on Virginia probation; however, that violation also violated his
Tennessee probation even though the Tennessee case was not active. The trial court
expressed concern on the instant violation that the probation authorities had not had contact
with the Defendant in over five months or since May of 2021. The trial court stated, “[t]his
being the second warrant for absconding, [the Defendant has] displayed an inability, or
unwillingness to comply with release in the community.” The Defendant’s probation was
fully revoked, and he was ordered to serve the balance of his six-year sentence in
confinement. A probation revocation order was entered January 11, 2022, and the
Defendant timely filed a notice of appeal.
ANALYSIS
On appeal, the Defendant contends that the trial court abused its discretion in
revoking the Defendant’s probation in full because “it failed to make appropriate findings
as to the reasons justifying a full revocation and failed to consider Mr. Johnson’s
willingness to complete rehabilitative treatment and acceptance into a treatment program.”
The Defendant asserts that because the trial court placed insufficient findings on the record
relating to the consequence imposed, this Court should review the trial court’s decision de
novo, reversing and remanding for entry of judgment reflecting partial revocation and
reinstatement of probation with an order to complete a rehabilitative program.
Alternatively, under an abuse of discretion review, the Defendant maintains that the trial
court’s decision should be reversed because “full revocation was not a conscientious and
intelligent decision.” In response, the State contends that the trial court properly exercised
its discretion when it ordered the Defendant to serve the balance of his sentence in
confinement. The State submits that because the trial court placed sufficient findings on
the record, this court should review the issues for an abuse of discretion with a presumption
of reasonableness. Further, the State asserts that “the record supports the trial court’s
finding that the Defendant should serve the balance of his sentence in confinement because
-4-
he had repeatedly absconded from probation, displaying ‘an inability [or] unwillingness to
comply with release in the community.’” We agree with the State.
In Dagnan, the Tennessee Supreme Court clarified that a probation revocation
proceeding involves a two-step inquiry, both of which are distinct discretionary decisions
that must be reviewed and addressed on appeal. State v. Dagnan, 641 S.W.3d 751, 753,
757-58 (Tenn. 2022). “If the trial judge finds by a preponderance of the evidence that the
defendant has violated the conditions of probation and suspension of sentence, then the
court may revoke the defendant’s probation and suspension of sentence, in full or in part,
pursuant to § 40-35-310.” Tenn. Code Ann. § 40-35-311. Upon finding that a defendant
violated the terms of his or her probation, a trial court “must determine (1) whether to
revoke probation, and (2) the appropriate consequence to impose upon revocation.”
Dagnan, 641 S.W.3d at 753. Once the trial court decides to revoke a defendant’s probation,
it may (1) order confinement; (2) order the sentence into execution as initially entered; (3)
return the defendant to probation on modified conditions as necessary; or (4) extend the
probationary period by up to two years. See State v. Hunter, 1 S.W.3d 643, 646-47 (Tenn.
1999); Tenn. Code Ann. §§ 40-35-308, -310, -311.
If the trial court “places sufficient findings and the reasons for its decisions as to the
revocation and the consequence on the record,” the standard of review on appeal is abuse
of discretion with a presumption of reasonableness. Dagnan, 641 S.W.3d at 759. As it
relates to factual findings, ‘“appellate courts cannot properly review a sentence if the trial
court fails to articulate in the record its reasons for imposing the sentence.”’ Id. at 758
(quoting State v. Bise, 380 S.W.3d 682, 705 n.41 (Tenn. 2012)). “It is not necessary for
the trial court’s findings to be particularly lengthy or detailed but only sufficient for the
appellate court to conduct a meaningful review of the revocation decision.” Id. (citing
Bise, 380 S.W.3d at 705-06). The appellate court may conduct a de novo review if a trial
court fails to place sufficient reasoning for the probation revocation on the record and the
record is sufficient for the court to do so. Id. at 759 (citing State v. King, 432 S.W.3d 316,
327-28 (Tenn. 2014)). To establish an abuse of discretion, “there must be no substantial
evidence to support the conclusion of the trial court that a violation of the conditions of
probation has occurred.” State v. Shaffer, 45 S.W.3d 553, 554 (Tenn. 2001) (citing State
v. Harkins, 811 S.W.2d 79, 82 (Tenn. 1991)).
Upon our review, we conclude the trial court sufficiently recorded the facts that it
considered and its reasoning in fully revoking the Defendant’s sentence. The determination
of the trial court is therefore afforded a presumption of reasonableness and reviewed for an
abuse of discretion. Here, the Defendant entered a guilty plea to the probation violation
and stipulated to the facts as included in the probation violation warrant. The entry of the
guilty plea triggered the trial court’s statutory duty to determine the consequence for the
violations. With this in mind, the trial court conducted a hearing and considered the
-5-
testimony of the Defendant and argument of counsel. For his second probation violation
for absconding, the Defendant explained that he understood the policy concerning
reporting late to the probation office and reporting the next day. He acknowledged on this
occasion he had relapsed and used drugs again. The Defendant further acknowledged he
was given “a break” and allowed to check-in to a rehabilitation facility; however, he
checked himself out two weeks later on May 15, 2021, in direct violation of the instructions
from his probation officer. The Defendant then chose not to report to his probation officer
and chose to spend time with his family. He testified he chose to spend time with his family
because he knew he would have to answer for his conduct at some point, and he waited for
police to arrest him at his home. In imposing confinement, the trial court expressed its
concern that this was the Defendant’s second violation for absconding, explaining that the
Defendant showcased an “inability, or unwillingness to comply with release in the
community.” The trial court further noted that when the Defendant absconded from
probation in May of 2021, he was not picked up in Pennsylvania until September of 2021.
See e.g., State v. Tiffany Clegg, No. E2015-01134-CCA-R3-CD, 2016 WL 944919, at *2
(Tenn. Crim. App. Mar. 14, 2016) (affirming revocation of probation based on absconding
and noting seriousness of violation because an offender cannot be properly supervised
which prevents drug screens, employment verification, etc.).
On appeal, the Defendant argues his conduct was “not so egregious as to warrant a
full revocation.” In support, he acknowledges the instant violation as his second revocation
for absconding but emphasizes the fact that he has had no violations in the eight-year period
leading up to the instant violation and no criminal convictions since 2006. Based on this,
he insists extension of his probation by one year should have been the preferred recourse
when a probationer has had difficulty with recovery, even when he has “repeatedly and
intentionally failed to comply with court-ordered treatment programming.” Tenn. Code
Ann. §40-35-308(a). In essence, the Defendant argues the trial court failed to consider the
length of his successful probation period as grounds to extend his probationary period
rather than impose confinement for the remainder of his sentence. Finally, citing State v.
Mitchell, the Defendant argues that imposition of full confinement ignores whether
incarceration would best serve the Defendant’s and the public’s interests. See State v.
Mitchell, 810 S.W.2d 733, 736 (Tenn. Crim. App. 1991) (“We agree that a revocation
decision is best tested by whether such an action would serve the ends of justice and be in
the best interest of both the public and the defendant/appellant.”). In our view, the trial
court considered the length of the Defendant’s successful probation, which was largely a
function of his voluntary and knowing guilty plea. We also believe it significant to point
out that the Defendant had been given the opportunity to avail himself of drug treatment
but voluntarily withdrew from the program and made an intentional decision not to report
back to his probation officer. Accordingly, we are unable to agree that the Defendant’s
interest and the interest of the public were not properly considered by the trial court.
Because the Defendant has failed to establish that the trial court abused its discretion in
-6-
ordering him to serve the remainder of his sentence in confinement, he is not entitled to
relief.
CONCLUSION
Based on the foregoing, the judgment of the trial court is affirmed.
____________________________________
CAMILLE R. MCMULLEN, JUDGE
-7- | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484376/ | Filed 11/16/22 P. v. Vasquez CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
----
THE PEOPLE, C094256
Plaintiff and Respondent, (Super. Ct. No. 95F09680 )
v.
RICARDO VASQUEZ,
Defendant and Appellant.
Defendant Ricardo Vasquez appeals from the trial court’s March 2020 order
denying his petition for resentencing brought pursuant to Penal Code section 1172.6
(formerly section 1170.95).1 The court found defendant ineligible for relief as a matter of
1 Further undesignated statutory references are to the Penal Code.
Effective June 30, 2022, long after defendant filed his petition, the Legislature
renumbered section 1170.95 to section 1172.6 without substantive change. (Stats. 2022,
ch. 58, § 10.) We will refer to the section where possible by its new numbering.
1
law by virtue of the jury’s special circumstance finding, and alternatively, that this
court’s previous opinion established defendant was a major participant who acted with
reckless indifference to human life under the law as clarified in People v. Banks (2015)
61 Cal.4th 788 and People v. Clark (2016) 63 Cal.4th 522.
On appeal, the parties agree, as do we, that the trial court’s order cannot stand.2
We reverse and remand for further proceedings consistent with this opinion.
BACKGROUND
Defendant’s Convictions
On July 8, 1997, a jury found defendant guilty of first degree murder (§§ 187/189)
with a robbery special circumstance (§ 190, subd. (a)(17)), robbery (§ 211), assault with a
deadly weapon (§ 245, subd. (a)(1)), and attempted robbery (§§ 664/211). The jury also
found true that defendant had personally used a knife. (§ 12022, subd. (b).) As relevant
here, the jury was instructed on multiple theories of murder, including felony murder.
The murder verdict form did not require the jury to identify the theory on which it relied.
We upheld these convictions in an unpublished decision issued in 1998.
(People v. Vasquez (Oct. 16, 1998; C026759) [nonpub. opn.].)
Legal Background
Senate Bill No. 1437 (2017-2018 Reg. Sess.) (Senate Bill No. 1437), which
became effective on January 1, 2019, was enacted “to amend the felony murder rule and
the natural and probable consequences doctrine, as it relates to murder, to ensure that
murder liability is not imposed on a person who is not the actual killer, did not act with
the intent to kill, or was not a major participant in the underlying felony who acted with
reckless indifference to human life.” (Stats. 2018, ch. 1015, § 1, subd. (f).) The
2 We granted defendant’s request to file his notice of appeal under the constructive filing
doctrine on July 2, 2021.
2
legislation accomplished this by amending sections 188 and 189 and adding former
section 1170.95 to the Penal Code.
Section 188, which defines malice, now provides in part: “Except as stated in
subdivision (e) of Section 189, in order to be convicted of murder, a principal in a crime
shall act with malice aforethought. Malice shall not be imputed to a person based solely
on his or her participation in a crime.” (§ 188, subd. (a)(3).) Section 189, subdivision (e)
now limits the circumstances under which a person may be convicted of felony murder:
“A participant in the perpetration or attempted perpetration of a felony listed in
subdivision (a) [defining first degree murder] in which a death occurs is liable for murder
only if one of the following is proven: [¶] (1) The person was the actual killer. [¶]
(2) The person was not the actual killer, but, with the intent to kill, aided, abetted,
counseled, commanded, induced, solicited, requested, or assisted the actual killer in the
commission of murder in the first degree. [¶] (3) The person was a major participant in
the underlying felony and acted with reckless indifference to human life, as described in
subdivision (d) of Section 190.2.”
Senate Bill No. 1437 also added section 1172.6, which allows “those convicted of
felony murder or murder under the natural and probable consequences doctrine to seek
relief . . . .” (People v. Gentile (2020) 10 Cal.5th 830, 843.) Section 1172.6, subdivisions
(b) and (c) create a two-step process for evaluating a petitioner’s eligibility for relief.
(People v. Lewis (2021) 11 Cal.5th 952, 960-962.) First, the trial court determines
whether the petition is facially sufficient under section 1172.6, subdivision (b). (Lewis, at
p. 960.) If the petition is facially sufficient, then, the trial court moves on to subdivision
(c), appointing counsel (if requested) and following the briefing schedule set out in the
statute. (Lewis, at p. 966.) Following the completion of this briefing, the trial court then
determines whether the petitioner has made a prima facie showing they are entitled to
relief. (Ibid.)
3
As our Supreme Court explained, “[w]hile the trial court may look at the record of
conviction after the appointment of counsel to determine whether a petitioner has made a
prima facie case for section 117[2.6] relief, the prima facie inquiry under subdivision (c)
is limited. Like the analogous prima facie inquiry in habeas corpus proceedings, ‘ “the
court takes petitioner’s factual allegations as true and makes a preliminary assessment
regarding whether the petitioner would be entitled to relief if his or her factual allegations
were proved. If so, the court must issue an order to show cause.” ’ [Citation.] ‘[A] court
should not reject the petitioner’s factual allegations on credibility grounds without first
conducting an evidentiary hearing.’ [Citation.] ‘However, if the record, including the
court’s own documents, “contain[s] facts refuting the allegations made in the petition,”
then “the court is justified in making a credibility determination adverse to the
petitioner.” ’ ” (People v. Lewis, supra, 11 Cal.5th at p. 971.) As relevant here, Senate
Bill No. 775 (2021-2022 Reg. Sess.), which took effect on January 1, 2022, amended
section 1172.6 to codify the holdings of Lewis regarding petitioners’ right to counsel and
the standard for determining the existence of a prima facie case and to clarify the burden
of proof at the resentencing hearing as proof beyond a reasonable doubt. (Cal. Const. art.
IV, § 8; Stats. 2021, ch. 551, § 1.)
Defendant’s Petition for Resentencing
On February 27, 2019, defendant filed a form petition in propria persona
requesting resentencing under former section 1170.95. He declared he had been
convicted of first or second degree murder under a theory of felony murder or pursuant to
the natural and probable consequences doctrine and could not now be convicted of
murder because of changes made to sections 188 and 189.
Although the trial court appointed counsel and ordered briefing, prior to the
completion of briefing, on March 2, 2020, the court issued an order denying defendant’s
petition for resentencing. The court reasoned that the jury instructions and jury findings
from defendant’s original trial established his ineligibility for relief as a matter of law.
4
Alternatively, the court found the previous appellate opinion contained facts establishing
that defendant was a major participant who had acted with reckless indifference to human
life under the law as clarified in Banks and Clark.
Defendant timely appealed. After multiple delays for counsel to submit their
briefing, the case was fully briefed on September 15, 2022 and assigned to this panel
shortly thereafter. The parties waived argument and the case was deemed submitted on
November 14, 2022.
DISCUSSION
During the pendency of this appeal, our Supreme Court decided People v. Strong
(2022) 13 Cal.5th 698. Strong held that: “Findings issued by a jury before Banks and
Clark do not preclude a defendant from making out a prima facie case for relief under
Senate Bill [No.] 1437. This is true even if the trial evidence would have been sufficient
to support the findings under Banks and Clark.” (Strong, at p. 710.) Here, the trial court
concluded that the jury’s pre-Banks and Clark findings precluded defendant from making
a prima facie case, and alternatively, that sufficient evidence from our previous appellate
decision established that defendant had acted with reckless indifference as clarified by
Banks and Clark. Because these conclusions do not survive Strong, we will reverse the
trial court’s order and remand for further proceedings consistent with this opinion.
5
DISPOSITION
The trial court’s order is reversed and the matter is remanded for further
proceedings consistent with this opinion.
/s/
Duarte, Acting P. J.
We concur:
/s/
Hoch, J.
/s/
Renner, J.
6 | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484221/ | IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
STATE OF DELAWARE, )
)
v. ) ID No. 1210020566
)
TYARE LEE, )
)
Defendant. )
ORDER
On this 15th day of November, 2022, upon consideration of Defendant Tyare
Lee’s (“Defendant”) pro se Motion for Sentence Reduction (the “Motion”),1 the
sentence imposed upon Defendant, statutory and decisional law, and the record in
this case, it appears to the Court that:
1. On January 6, 2014, Defendant pled guilty to one count of Murder Second
Degree, one count of Attempted Robbery First Degree, two counts of Possession of
a Firearm During the Commission of a Felony (“PFDCF”), and one count of
Conspiracy Second Degree.2 On March 12, 2015, Defendant was sentenced to a sum
of twenty-four years at Level V followed by decreasing levels of probation.3
1
D.I. 42.
2
See D.I. 30.
3
For Murder Second Degree, Defendant was sentenced to thirty years at Level V, suspended after
fifteen years at Level V, for five years at Level IV, suspended after six months at Level IV, for
four years and six months at Level III; for Attempted Robbery First Degree, Defendant was
sentenced to three years at Level V; for each of the PFDCF counts, Defendant was sentenced to
three years at Level V, for a total of six years; for Conspiracy Second Degree, Defendant was
sentenced to two years at Level V, suspended for two years at Level III. See D.I. 34.
2. On August 25, 2022, Defendant filed this Motion, pursuant to Superior
Court Criminal Rule 35(b),4 requesting modification of his Level V sentence.
Defendant raised two claims in the Motion. First, Defendant requests that the Level
V terms for his convictions of Attempted Robbery First Degree and PFDCF to be
modified to run concurrently “under the law change of concurrent sentences.”
Second, Defendant claims that the KEY program, the successful completion of
which was imposed as a condition to his Level V sentence, is no longer available;
Defendant requests a modification to his sentence to reflect such change.
3. When considering motions filed under Superior Court Criminal Rule 35(b),
the Court determines whether any procedural bars are applicable before addressing
the merits.5 Rule 35(b) requires that a motion to reduce imprisonment be made
within 90 days after the sentence is imposed.6 To overcome the 90-day time bar, an
inmate seeking to reduce a sentence of imprisonment on his or her own motion must
demonstrate “extraordinary circumstances.”7 The moving defendant bears a “heavy
4
Defendant did not specifically cite to Superior Court Criminal Rule 35(b) in his Motion. Because
it is apparent from the Motion that Defendant is seeking reduction or modification of his sentence,
the Court will consider the Motion under that rule. See Jones v. State, 825 A.2d 238 (TABLE),
2003 WL 21210348, at *1 (Del. May 22, 2003) (“There is no separate procedure, other than that
which is provided under Superior Court Criminal Rule 35, to reduce or modify a sentence.”).
5
State v. Redden, 111 A.3d 602, 606 (Del. Super. 2015).
6
Super. Ct. Crim. R. 35(b).
7
Id.
2
burden” to establish “extraordinary circumstances” in order to uphold the finality of
sentences.8
4. Defendant was sentenced in 2015 and his Motion was filed far more than
90 days after the imposition of his sentence. Defendant referenced “the law change
of concurrent sentences” as the legal basis for his request for concurrent Level V
sentences. The Court presumes that Defendant is referring to a 2019 amendment to
the Sentencing Act, 11 Del. C. § 3901(d), which expanded a Delaware sentencing
judge’s authority to impose concurrent, rather than consecutive, terms of
confinement.9 However, to the extent that Defendant claims the 2019 amendment
to the Sentencing Act provides some exceptional relief under Rule 35(b), that
argument is misplaced. The 2019 amendment, which was enacted after the
8
State v. Diaz, 111 A.3d 1081 (TABLE), 2015 WL 1741768, at *2 (Del. Apr. 15, 2015) (“In order
to uphold the finality of judgments, a heavy burden is placed on the defendant to prove
extraordinary circumstances when a Rule 35 motion is filed outside of ninety days of the
imposition of a sentence.”).
9
For nearly forty years, concurrent sentences of confinement were strictly prohibited under
Delaware law, since the Delaware legislature explicitly eliminated such sentencing in 1977. The
first lifting of this complete ban on concurrent terms of imprisonment came in 2014, where the
General Assembly amended 11 Del. C. § 3901(d) to allow the sentencing judge discretion in
imposing concurrent sentences, except for certain enumerated crimes, for which concurrent
sentencing is still prohibited. In 2019, another amendment to § 3901(d) was enacted to further
expand the sentencing judge’s authority, by striking a handful of crimes from the 2014
amendment’s list of enumerated offenses for which concurrent sentencing is prohibited. For a
detailed discussion of 11 Del. C. § 3901(d) and its several amendments, please see State v. Thomas,
220 A.3d 257, 263 (Del. Super. 2019) and Fountain v. State, 139 A.3d 837, 840-41 (Del. 2016).
3
imposition of Defendant’s sentence, does not meet Rule 35’s “extraordinary
circumstances” criterion.10
5. Notwithstanding Rule 35(b)’s procedural bar against untimely motions, the
2019 amendment simply does not apply to the instant case. First, the statutory
change in sentencing embedded in the 2019 amendment does not apply
retroactively.11 Defendant’s sentence was imposed in 2015, more than four years
before the enactment of the 2019 amendment. Hence, the 2019 amendment, and its
implications on concurrent sentencing, does not apply to Defendant’s sentence.
6. In addition, even if the 2019 amendment could be applied retroactively to
Defendant’s case, it is of no assistance to reducing Defendant’s overall sentence.
The statute, after being amended in 2019, explicitly provides that “no sentence of
confinement of any criminal defendant by any court” can be made to run
concurrently with any other sentence of confinement imposed for enumerated
offenses.12 Included among those enumerated crimes is PFDCF. Here, Defendant
was sentenced to a separate three-year term, for each of the attempted robbery count
and two PFDCF counts, for a total of nine years. Because PFDCF is a concurrent-
10
State v. Caulk, 2021 WL 2911768, at *2 (Del. Super. July 12, 2021) (“Rule 35(b) is not now,
nor ever has been, an instrument for reexamination of previously imposed sentences in light of
subsequent statutory changes.”) (quoting Thomas, 220 A.3d at 261).
11
Thomas, 220 A.3d at 264 (citing Fountain, 139 A.3d at 841-43) (finding that the 2019
amendment did not explicitly provide for such retroactivity or include special procedures to
address its retroactive application).
12
11 Del. C. § 3901(d) (emphasis added).
4
sentence-prohibited crime, the three-year term for the attempted robbery conviction
could not be made to run concurrently with sentences for the PFDCF. Therefore,
any change to the sentencing mechanism brought by the 2019 amendment, even if
available to Defendant, makes no difference in his case.
7. Defendant’s second claim is regarding the unavailability of the KEY
program in the detention facilities. The Court notes that the KEY program has been
replaced by a new program titled “Road to Recovery.” Defendant is thus obligated
to comply with the terms and conditions of the new program as part of his Level V
sentence.
8. The Court concludes that Defendant’s sentence is appropriate for all the
reasons stated at the time of sentencing. No additional information has been
provided to the Court that would warrant a reduction of this sentence.
For the foregoing reasons, Defendant’s Motion for Sentence Reduction is
DENIED.
IT IS SO ORDERED.
Sheldon K. Rennie, Judge
Original to Prothonotary
Cc: Tyare Lee (SBI #00644379)
Department of Justice, Wilmington, DE
Investigative Services
5 | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484219/ | Filed 11/16/22 P. v. Davis CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
THE PEOPLE,
F083448
Plaintiff and Respondent,
(Super. Ct. No. F15903774)
v.
ROBERT LEE DAVIS III, OPINION
Defendant and Appellant.
THE COURT*
APPEAL from a judgment of the Superior Court of Fresno County. Arlan L.
Harrell, Judge.
Elisa A. Brandes, under appointment by the Court of Appeal, for Defendant and
Appellant.
Rob Bonta, Attorney General, Lance E. Winters, Chief Assistant Attorney
General, Michael P. Farrell, Assistant Attorney General, Lewis A. Martinez, Kari
Mueller, and Louis M Vasquez, Deputy Attorneys General, Plaintiff and Respondent.
-ooOoo-
*Before Franson, Acting P. J., Peña, J. and De Santos, J.
A jury found Robert Lee Davis III (defendant) guilty on charges arising from a
series of commercial robberies. In 2019, this court upheld the verdicts but remanded the
case for a new sentencing hearing. Defendant now argues, and the People concede,
further sentencing relief is warranted in light of Senate Bill No. 136 (2019–2020 Reg.
Sess.) (Senate Bill 136) and Senate Bill No. 567 (2021–2022 Reg. Sess.) (Senate Bill
567). We agree with the parties.
FACTUAL AND PROCEDURAL BACKGROUND
Defendant was prosecuted for his role in several robberies committed in June
2015. The underlying facts are not relevant to this appeal, but a detailed summary can be
found in People v. Islas (July 19, 2019, F075575) [nonpub. opn.]. The case was tried
before a jury in October 2016.
Defendant was convicted on eight counts of second degree robbery (Pen. Code,
§ 211; counts 1, 2, 3, 4, 7, 10, 11 & 12); two counts of attempted second degree robbery
(§§ 211, 664; counts 5 & 6); two counts of assault with a firearm (§ 245, subd. (a)(2);
counts 8 & 9); and one count of unlawful firearm possession (§ 29800, subd. (a)(1); count
14). (All undesignated statutory references are to the Penal Code.) True findings were
made on firearm enhancement allegations pursuant to section 12022, subdivision (a)(1)
(counts 1, 2, 3, 5, 6, 10, 11 & 12) and section 12022.53, subdivision (b) (counts 4 & 7).
Defendant admitted to having served a prior prison term within the meaning of section
667.5, former subdivision (b). He also pled no contest in a related matter (Super. Ct.,
Fresno County, 2016, No. F16906002) to a violation of section 136.1, subdivision (c)(1).
On March 6, 2017, defendant was sentenced to an aggregate prison term of 28
years 4 months. The sentence included the upper terms for multiple counts and a one-
year prior prison term enhancement. The trial court found as follows with regard to
aggravating circumstances:
“First, that the defendant engaged in violent conduct which indicates a
serious danger to society; second, that the defendant had served a prior
2.
prison term; third, that he was on [post release community supervision] at
the time that the offenses were committed …; and that his prior convictions
are numerous and certainly of increasing seriousness.”
In a prior opinion (People v. Davis (July 19, 2019, F075303) [nonpub. opn.]
(Davis I), we affirmed the judgment but “remand[ed] the matter to the trial court to
permit it to exercise its discretion regarding whether to strike the firearm enhancements
in light of [Senate Bill No. 620 (2017–2018 Reg. Sess.)].” The People’s unopposed
request for judicial notice of the records in Davis I is hereby granted. (Evid. Code,
§§ 452, subd. (d), 459, subd. (a).)
On February 28, 2020, further proceedings were conducted pursuant to the
disposition in Davis I. The trial court declined to alter its original sentence. Defendant
did not attempt to file a notice of appeal until nearly one year later. However, by order of
this court in In re Robert Lee Davis III (Aug. 12, 2021, F082439) [nonpub. opn.], the
appeal was deemed timely.
DISCUSSION
I. Prior Prison Term Enhancement
Effective January 1, 2020, the one-year enhancement provided for in section
667.5, subdivision (b) is inapplicable to all prior prison terms except those served for a
sexually violent offense within the meaning of Welfare and Institutions Code section
6600, subdivision (b). (Stats. 2019, ch. 590, § 1.) This amendment, which resulted from
the enactment of Senate Bill 136, has been held to apply retroactively to nonfinal
judgments. (People v. Morelos (2022) 13 Cal.5th 722, 769–770.) The recent enactment
of section 1171.1 confirms the Legislature’s intent for retroactive relief. Section 1171.1
provides, in relevant part: “Any sentence enhancement that was imposed prior to
January 1, 2020, pursuant to subdivision (b) of Section 667.5, except for any
enhancement imposed for a prior conviction for a sexually violent offense as defined in
subdivision (b) of Section 6600 of the Welfare and Institutions Code is legally invalid.”
(§ 1171.1, subd. (a).)
3.
Although Senate Bill 136 had gone into effect prior to the February 2020
proceedings on remand, it appears the issue of defendant’s section 667.5 enhancement
was overlooked by the parties and the trial court. Nevertheless, the record clearly shows
the enhancement was not based on a conviction for a sexually violent offense. Therefore,
as the People appropriately concede, the prior prison term enhancement must be stricken
from the judgment.
II. Senate Bill 567
At the time of the original pronouncement of judgment and when proceedings
were conducted on remand, “former section 1170, subdivision (b) provided the trial court
with broad sentencing discretion to determine whether the imposition of the lower,
middle, or upper term ‘best serve[d] the interests of justice.’ Prior to 2007, an older
version of section 1170, subdivision (b) provided that the middle term was the
presumptive term but authorized the trial court to impose the upper term if it found any
aggravating circumstances. In 2007, the United States Supreme Court found this
sentencing scheme unconstitutional and stated, ‘under the Sixth Amendment, any fact
that exposes a defendant to a greater potential sentence must be found by a jury, not a
judge, and established beyond a reasonable doubt, not merely by a preponderance of the
evidence.’ (Cunningham v. California (2007) 549 U.S. 270, 281.)” (People v. Mitchell
(2022) 83 Cal.App.5th 1051, 1056.)
“In 2007, in response to Cunningham, the California Legislature amended section
1170 to provide the ‘trial judges broad discretion in selecting a term within a statutory
range, thereby eliminating the requirement of a judge-found factual finding to impose an
upper term.’” (People v. Mitchell, supra, 83 Cal.App.5th at p. 1056.) “Most recently,
Senate Bill 567 further amended section 1170, subdivision (b) ‘to make the middle term
the presumptive sentence for a term of imprisonment; a court now must impose the
middle term for any offense that provides for a sentencing triad unless “there are
4.
circumstances in aggravation of the crime that justify the imposition of a term of
imprisonment exceeding the middle term, and the facts underlying those circumstances
have been stipulated to by the defendant, or have been found true beyond a reasonable
doubt at trial by the jury or by the judge in a court trial.” (§ 1170, subd. (b)(1) & (2).)’”
(Mitchell, at p. 1057, italics added.) There is an exception to the italicized requirement:
a sentencing court may rely on prior convictions as evidenced by certified records of
conviction. (§ 1170, subd. (b)(3).)
We agree with the parties on the issue of retroactivity. “When new legislation
reduces the punishment for an offense, we presume that the legislation applies to all cases
not yet final as of the legislation’s effective date.” (People v. Esquivel (2021) 11 Cal.5th
671, 673.) This principle extends “to statutes that merely [make] a reduced punishment
possible.” (People v. Frahs (2020) 9 Cal.5th 618, 629.) To rebut the inference of
retroactivity, “the Legislature must ‘demonstrate its intention with sufficient clarity that a
reviewing court can discern and effectuate it.’” (Id. at p. 634.) Senate Bill 567 took
effect during the pendency of this appeal, and there is no clear indication of a legislative
intent for prospective-only application.
The parties both argue the necessity of another remand. Although defendant
admitted to having served a prior prison term, which established one aggravating
circumstance (Cal. Rules of Court, rule 4.421(b)(3)), the trial court relied on several
additional factors that were neither admitted nor found true by a jury. The trial court
based most of those findings on a probation report, not certified records of conviction as
now required by section 1170, subdivision (b)(3).
The People quote a statement in People v. Zabelle (2022) 80 Cal.App.5th 1098:
“If the record is insufficient to support a trial court’s findings about a defendant’s
criminal history, we will not presume the existence of extrarecord materials, however
likely they are to exist, to address this insufficiency.” (Id. at p. 1115, fn. 6.) We accept
the People’s concession that “[u]nder the particular circumstances of this case,” the
5.
matter “should be remanded for resentencing in compliance with section 1170,
subdivision (b).”
DISPOSITION
The enhancement imposed pursuant to section 667.5 is stricken. The remainder of
the sentence is vacated, and the matter is remanded for resentencing in accordance with
section 1170. In all other respects, the judgment is affirmed.
6. | 01-04-2023 | 11-16-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493064/ | ORDER SUSTAINING OBJECTION OF VOLVO CAR FINANCE TO ORDER CONFIRMING UNCONTESTED AMENDED CHAPTER IB PLAN
STEVEN H. FRIEDMAN, Bankruptcy Judge.
THIS CAUSE came on to be heard on June 8, 2000, upon the Objection to Confirmation (“Objection”) of the Debtor’s first amended chapter 13 plan filed by Volvo Car Finance, Inc. (“Volvo”). Volvo asserts that the procedure established by the Court, and followed by the Debtor, resulting in the confirmation of the Debtor’s first amended chapter 13 plan (“plan”), was improper, and that the valuation of Volvo’s collateral was without proper notice and thus without due process. The Court, having carefully considered the argument of counsel and the applicable provisions of the Bankruptcy Code, Bankruptcy Rules, and Local Rules for the Southern District of Florida, sustains Volvo’s objection and vacates confirmation of the Debt- or’s plan.
This case was commenced on January 18, 2000, with the Debtor’s filing of her chapter 13 petition. Pursuant to 11 U.S.C. § 341, a meeting of creditors was *171scheduled and noticed by the Clerk of Court for February 29, 2000. There were no objections filed by creditors prior to the creditors’ meeting, and at the creditors’ meeting, the chapter 13 trustee (“Trustee”) recommended confirmation of the plan. Subsequently, on March 13, 2000, the Court entered its Order Confirming Uncontested Amended Chapter 13 Plan and the Notice of Opportunity to Object to Amended Plan (“confirmation order”). Based upon the Court’s review of the mailing matrix submitted by the Debt- or with her schedules, and the Clerk’s certificate of service, Volvo did receive the Notice of Commencement which was served upon all creditors, and which delineated the procedure for objecting to confirmation of the plan.
Pursuant to the original chapter 13 plan, filed with the Debtor’s petition, schedules and statements on January 18, 2000, Volvo’s claim, asserted to be in the amount of $19,183.63 and collateralized by a security interest in a 1996 Volvo 960 automobile, was valued at $15,000.00, which the Debtor proposed to pay under her plan at $270.00 per month, over a sixty-month term, at 8% interest. At the February 29, 2000 meeting of creditors, the Trustee recommended confirmation of an amended plan to be submitted by the Debtor. The only change in the amended plan related to treatment of unsecured creditors, and the amount to be paid on unsecured claims. Treatment of Volvo’s claim was not modified by the amended plan, and the confirmation order, which approved the Amended Chapter 13 Plan, was served on all creditors, including Volvo.
In its written Objection to Confirmation, and in oral argument at the June 8 hearing, Volvo asserts two bases which allegedly warrant the vacation of the March 13 confirmation order:
(1) The plan impermissibly understates the value of the vehicle col-lateralizing Volvo’s loan;
(2) The procedure employed by the Court as to confirmation of chapter 13 plans is defective.
Since the two issues are intertwined, the Court shall address them in tandem.
Prior to and at the June 8, 2000 confirmation hearing, the Debtor and her counsel fully complied with Administrative Order 99-2 relating to the procedure for consideration of chapter 13 plans in the Southern District of Florida. Under this procedure, as prominently displayed in this' Court’s standard Notice of Chapter 13 Bankruptcy Case, Meeting of Creditors, Deadlines & Court’s Confirmation Procedures, issued and served in the -instant case by the Clerk of Court on January 25, 2000, the manner for establishing the value of secured creditors’ collateral under 11 U.S.C. § 1322(b)(2) has been supplemented by an administrative order issued by this Court. Pursuant to Administrative Order 99-2, issued by Chief Judge Robert A. Mark on behalf of this Court on March 12,1999, and pursuant to Local Rule 3015-3(A), objections to confirmation of chapter 13 plans must be raised at or before the § 341 Meeting of Creditors, and any written objections must be filed and served on the standing chapter 13 trustee at or before the meeting, or the objection is deemed waived. In the instant case, no written objection to confirmation was filed by Volvo prior to the § 341 Meeting.
In Green Tree Acceptance, Inc. v. Calvert, 907 F.2d 1069 (11th Cir.1990), the bankruptcy court sent out a notice of confirmation hearing, which read in pertinent part
A hearing on the confirmation of the plan will be held.... During this confirmation hearing, the Court may on it’s [sic] own motion receive evidence of the value of collateral and determine allowed secured claims or secured portions of allowed claims, and will consider objections to confirmation of the plan....
At the confirmation hearing, the bankruptcy court heard evidence on the value of the mobile home and ultimately denied confir*172mation for failure to comply with 11 U.S.C. § 1322 (the creditor holding a security interest in the debtor’s mobile home was not present at the initial confirmation hearing). Subsequently, the debtors filed an amended plan, and the bankruptcy court sent notice to creditors that it would hold a hearing on the debtor’s motion to reconsider the court’s ruling on the first plan (the notice did not specifically refer to valuation of collateral). The secured creditor was present at the subsequent confirmation hearing and presented evidence which convinced the court that its security interest had been perfected. At the hearing, the debtor/husband testified that the value of the mobile home was $7,000. In its subsequent order confirming the original plan, the court valued the mobile home at $7,000 and valued the secured claim for the same amount.
On appeal, the Eleventh Circuit Court of Appeals determined that the language of Fed.R.Bankr.P. 3012 mandates a hearing on notice to the holder of the secured claim as part of the security valuation process. The court stated:
Section 506(a) approves of holding [the Rule 3012] hearing in conjunction with the confirmation [hearing], as was done here. However, Rule 3012 requires that specific notice be given that the bankruptcy court will determine the extent to which the claim is secured.
Id. at 1072. The Eleventh Circuit implied that the bankruptcy court’s notice of the first confirmation hearing was sufficient but held that notice of the second confirmation hearing failed to comply with Rule 3012.
In the instant ease, counsel for the Debtor failed tó check, on the Debtor’s chapter 13 plan, the box stating, “IF CHECKED, THE PLAN SEEKS TO VALUE THE COLLATERAL SECURING THE CLAIMS OF THE CREDITORS LISTED BELOW PURSUANT TO 11 U.S.C. SECTION 506(a) AND BANKRUPTCY RULE 3012.” Accordingly, the Creditor was entitled to a negative inference that the debtor would not seek cram-down of its secured claim at the confirmation hearing. For this reason only, the Court rules in favor of the Creditor, on the basis that notice was insufficient pursuant to the holding in Calvert. However, were it not for the oversight of the Debtor in failing to check the appropriate box regarding valuation of collateral on the Debtor’s chapter 13 plan, notice would have been sufficient, and in compliance with Bankruptcy Rule 3012.
The Creditor also argues that the procedure prescribed under Administrative Order 99-2 is defective because it effectively and impermissibly shortens the time period under Bankruptcy Rule 3002 for the filing of a proof of claim. The Court finds the Creditor’s argument regarding Bankruptcy Rule 3002 to be without merit. In In re King, 165 B.R. 296, 299 (Bankr.M.D.Fla.1994), the court ruled that the filing of a proof of claim is a prerequisite to the valuation of collateral pursuant to Rule 3012. The court quoted a footnote to the Calvert opinion, wherein the Eleventh Circuit noted that the bankruptcy court had undertaken the determination of the secured status of claims treated in a chapter 13 plan in conjunction with conducting a chapter 13 confirmation hearing, “‘but only as to claims which have already been deemed allowed.’” Id. (quoting Calvert, 907 F.2d at 1071 n. 1). However, the court rejected the secured creditor’s argument that the debtor could not file a claim on behalf of the secured creditor prior to the Rule 3002 claims bar date. The court reasoned that Fed.R.Bankr.P. 3004 allows a debtor to file a proof of claim prior to the claims bar date, after which the debtor may “quickly file motions to value and move his case along....”
Under the procedure currently followed in this district, a properly-prepared Chapter 13 Plan contains a notice in compliance with Bankruptcy Rule 3012 and sets forth the proposed treatment for the claim of each secured creditor to whom the notice applies. The Court finds that such *173a properly-prepared plan constitutes an informal proof of claim. See generally Charter Co. v. Dioxin Claimants, 876 F.2d 861 (11th Cir.1989). Accordingly, the procedure employed in this district regarding the chapter 13 confirmation process complies with the holding in King.
For the reasons stated above, the objection of Volvo Car Finance, Inc. to this Court’s March 13, 2000 confirmation order is sustained. The Debtor is granted until August 8, 2000 to file an amended chapter 13 plan, which if filed, shall be set for consideration on this Court’s next chapter 13 confirmation calendar. If the Debtor fails to file an amended chapter 13 plan, this case shall be dismissed with prejudice for a 180-day period. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493065/ | Memorandum of Decision Regarding Motion of The United States of America (IRS) for Summary Judgment
LEIF M. CLARK, Bankruptcy Judge.
Came On for consideration the Motion of the United States of America (Internal Revenue Service) for Summary Judgment. After reviewing the Motion, the debtor’s untimely response, and the applicable law, the court finds that the motion is meritorious and should be granted.
Background
The facts of this case are relatively straightforward. On or about April 30, 1997, Franklin Wright was indicted for conspiring to impede the function of the Department of Treasury in collecting taxes and for tax evasion. On December 19, 1997, a jury determined that Wright was guilty of conspiring to impede the function of the Department of Treasury in collecting taxes and guilty of tax evasion. On May 27, 1998, the United States District Court for the Western District of Texas entered its judgment finding Wright guilty of the above crimes. He was subsequently sentenced, and appeal was taken to the Fifth Circuit, which ultimately affirmed the conviction.
Wright’s bankruptcy was filed on July 9, 1998 as a Chapter 11 case. On October 15, 1998, the case was converted to a Chapter 7. On November 19, 1999, the United States of America, on behalf of the Internal Revenue Service, filed a complaint in this court seeking to determine the dis-chargeability of Franklin Wright’s unpaid taxes and interest for tax years 1987, 1988, 1992, 1993, and unpaid income taxes, penalties and interest for tax years 1994,1995, 1996 and 1997. On June 2, 2000, the United States filed a Motion for Summary Judgment on this complaint.1
Discussion
Summary judgment is properly granted when pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. See FED.R.CIV.P. 56; FED.R.BANKR. P. 7056; Celotex Corporation v. Catrett, 477 U.S. 317, 322-324, 106 S.Ct. 2548, 91 *329L.Ed.2d 265 (1986).2 The movant bears the initial burden of informing the court of the basis for its motion, and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. After the movant meets its burden, the party opposing a summary judgment motion must present affirmative evidence and designate specific facts showing there is a genuine issue of material fact for trial. See Anderson v. Liberty Lobby, 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994).3 Although the court must consider the evidence and all reasonable inferences to be drawn therefrom in the light most favorable to the nonmovant, Anderson, 477 U.S. at 257, 106 S.Ct. 2505; Hibernia Nat’l Bank v. Carrier, 997 F.2d 94, 97 (5th Cir.1993), the nonmoving party may not rest on bare allegations or denials in its pleadings, but must respond by setting forth specific facts indicating a genuine issue for trial. See Anderson, 477 U.S. at 257, 106 S.Ct. 2505; Webb v. Cardiothoracic Surgery Associates, P.A., 139 F.3d 532, 536 (5th Cir.1998); Figgie Int’l, Inc. v. Bailey, 25 F.3d 1267, 1269 (5th Cir.1994). The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no issue of genuine fact. Anderson, at 247-248, 106 S.Ct. 2505.4
1. Dischargeability of taxes, penalties, and interest for the year 1997.
The United States asserts that Wright’s taxes, penalties,5 and interest6 for the year 1997 are nondischargeable pursuant to § 523(a)(l)(B)(i).7 We agree. Although Wright’s 1997 tax return was due April 15, 1998, it has not yet been filed. Therefore, the debtor’s tax debt for *3301997 is nondischargeable as a matter of law per the plain language of the statute (ie., no discharge for any tax with respect to which a required return has not been filed). See 11 U.S.C. § 628(a)(1)(B)©. In any event, Wright admitted in his answer that he owes tax liability for the year 1997, and that such liability is nondischargeable and entitled to priority. See Debtor’s Answer at 2. For these reasons, the unpaid inconie taxes, penalties and interest for the tax year 1997, to the extent not paid from the bankruptcy estate, are nondischargeable as a matter of law.
*329(7)IRS Request for Admissions which the debtor has not answered; U.S. Postal Service green card showing the Request for Admissions were sent certified mail, return receipt requested with a returned receipt signed by Annette Wright; facsimile transmittal report showing request for admissions were sent to Franklin Wright.
*3302. Dischargeability of taxes, penalties, and interest for years 1994, 1995, 1996.
The United States asserts that Wright’s taxes, penalties, and interest for the years 1994, 1995, and 1996 are nondischargeable pursuant to § 523(a)(1)(A), (B) and § 507(a)(8)(A)®.8 We agree. The bankruptcy case was filed July 9, 1998. Including filing extensions, Wright’s 1994 tax return was due October 15, 1995, his 1995 tax return was due August 15, 1996, and his 1996 tax return was due August 15, 1997. Wright’s tax returns for the above years all fell due inside the three year window preceding the filing of the bankruptcy petition. They are thus nondis-chargeable as a matter of law. See 11 U.S.C. §§ 523(a)(1)(A), 607(a)(8)(A)©. In any event, Wright admits in his answer that his tax liability for 1994, 1995, 1996 are entitled to priority and are thus non-dischargeable. See Debtor’s Answer at 2. Thus, the unpaid income taxes, penalties and interest for the tax year 1994, 1995, and 1996, to the extent not paid from the bankruptcy estate, are nondischargeable.
3. Dischargeability of Taxes and Interest for the years 1987,1988,1992, and 1993.
The United States asserts that Wright’s taxes and interest due for the years 1987, 1988, 1992, and 1993 are nondischargeable under § 523(a)(1)(C)9 because Wright was convicted in U.S. District Court10 of tax evasion and conspiracy to defraud the Internal Revenue Service for conduct which occurred during such years. The United States asserts that Wright’s criminal conviction for tax evasion necessarily constitutes a willful attempt to evade his tax liability under § 523(a)(1)(C). The United States then adds that principles of collateral estoppel *331bar any attempt by Wright to relitigate in this adversary proceeding issues already decided in Wright’s criminal trial and conviction.11
Collateral estoppel can in fact attach to a criminal conviction to bar relitigation of issues in a subsequent civil proceeding. See Emich Motors Corp. v. General Motors Corp., 840 U.S. 558, 568-569, 71 S.Ct. 408, 95 L.Ed. 534 (1951); see also Tomlinson v. Lefkowitz, 334 F.2d 262, 264 (5th Cir.1964) (issue resolved in favor of the United States in a criminal prosecution may not be contested by the same defendant in a civil suit brought by the Government); Local 167, Int’l Bhd. of Teamsters, etc. v. United States, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed. 804 (1934).12 The Supreme Court noted in Emich that “[s]ueh estoppel extends only to questions distinctly put in issue and directly determined in the criminal prosecution.” 340 U.S. at 569, 71 S.Ct. 408. However, the Court added that
The difficult problem, of course, is to determine what matters were adjudicated in the antecedent [criminal] suit. A general verdict of the jury or judgment of the court without special findings does not indicate which of the means charged in the indictment were found to have been used in effectuating the conspiracy. And since all of the acts charged need not be proved for conviction, such a verdict does not establish that defendants used all of the means charged or any particular one. Under these circumstances what was decided by the criminal judgment must be determined by the trial judge hearing the treble-damage [civil] suit, upon an examination of the record, including the pleadings, the evidence submitted, the instructions under which the jury arrived at its verdict, and any opinions of the courts.
Id. (internal citations omitted) (emphasis added). The difficulty adverted to in Emich is present in this case as well. We have a verdict of guilty on various charges, and the consequent conviction and sen*332tencing. In order to determine whether collateral estoppel applies in the present dischargeability case, the court must necessarily know precisely what issues were actually litigated and necessarily decided in the criminal action. Following the course charted by the Supreme Court in Emich, this court must review such things as the indictment, the pleadings, the evidence submitted, the jury instructions, and any opinions of the court (either at trial or on appeal). Id. The United States has supplied some of this material as part of its summary judgment evidence.
The indictment reflects that Wright was indicted for conspiracy to impede the function of the Department of Treasury in collecting taxes, in violation of 18 U.S.C. § 871, and for tax evasion, in violation of 26 U.S.C. § 7201. Franklin Wright was ultimately convicted on both charges, according to the jury verdict and conviction included in the United States’ summary judgment evidence. A conviction under § 7201 of the Internal Revenue Code requires a showing of willfulness, a tax deficiency, and an affirmative act constituting evasion. See United States v. Wright, 211 F.3d 233, 238 (5th Cir.2000). The Fifth Circuit’s published affirmance of that conviction establishes as a matter of both fact and law that such a showing was in fact made at trial. The elements of the criminal action are virtually identical to the elements for establishing nondischargeability under § 523(a)(1)(C) which requires a showing of a “willful attempt in any manner” on the part of the debtor to evade or defeat a tax. See 11 U.S.C. § 523(a)(1)(C); Matter of Bruner, 55 F.3d 195, 197 (5th Cir.1995).13
Wright’s indictment, the District Court’s criminal judgment, Wright’s tax returns for the above years, and the Fifth Circuit’s decision affirming Wright’s conviction, all establish that the requisite elements for a determination of nondischargeability under § 523(a)(1)(C) have already been actually and fully litigated in the prior criminal action, and those elements were necessary to the ultimate verdict rendered against Wright.14 Further, there are no special circumstances present that would render issue preclusion either unfair or inappropriate in this action. See United States v. Shanbaum, 10 F.3d 305, 310-311 (5th Cir.1994); see also Grogan v. Garner, 498 U.S. 279, 285 n. 11, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991).15 Collateral estoppel thus bars Wright from relitigating whether he “willfully attempted in any manner to evade or defeat such tax” under section 523(a)(1)(C). The United States has thus conclusively established by its summary judgment evidence that the unpaid income taxes, penalties and interest for the tax year 1987, 1988, 1992, and 1993, to the extent not paid from the ¡bankruptcy estate, are nondis-chargeable as a matter of law. See 11 U.S.C. § 523(a)(1)(C).
Conclusion
Based on the foregoing analysis, the United States’ Motion for Summary Judgment should be granted, and the debtor’s Cross-Motion for Summary Judgment should be denied. Judgment will be rendered in favor of the United States that
(1) Franklin Y. Wright’s unpaid federal income taxes and interest for the tax years 1987, 1988, 1992, 1993, to the *333extent not paid from the bankruptcy estate, are nondischargeable;
(2) Franklin Y. Wright’s unpaid federal income taxes, penalties and interest for the tax years 1994, 1995, 1996, to the extent not paid from the bankruptcy estate, are nondischargeable;
(3) Franklin Y. Wright’s unpaid federal income taxes, penalties and interest for the tax year 1997, to the extent not paid from the bankruptcy estate, are nondischargeable.
. The dispositive motion deadline was June 2, 2000. The United States’ Motion for Summary Judgment was filed June 2, 2000. Wright's response to the United States’ Motion for Summary Judgment was due on June 20, 2000. Wright filed a very "untimely” response and cross Motion for Summary Judgment on July 3, 2000. In addition to being untimely, neither Wright’s response nor his cross-motion for summary judgment in-eluded any supporting affidavits or other evidence. Instead, Wright merely made conclu-soiy allegations and statements. The result is that Wright has offered no affirmative evidence nor has he designated any specific facts indicating a genuine issue for trial, reducing our consideration of the United States’ motion to a determination of whether it prevails as a matter of law.
. The admissibility of summary judgment evidence is subject to the same standards and rules that govern the admissibility of evidence at trial. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d 646, 650 n. 3 (5th Cir.1992); Lavespere v. Niagara Mach., & Tool Works, Inc., 910 F.2d 167, 175-176 (5th Cir.1990). Conclusory allegations, speculation, and unsubstantiated assertions are not evidence. See Douglass v. United Services Auto. Ass’n, 79 F.3d 1415, 1429 (5th Cir.1996).
. An issue is genuine if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 249, 106 S.Ct. 2505. A fact is material if it would "affect the outcome of the lawsuit under the governing substantive law." Phillips v. OKC Corporation, 812 F.2d 265, 272 (5th Cir.1987).
. In this case, the United States has submitted the following summary judgment evidence:
(1) Franklin Wright's 1992 tax return;
(2) Franklin Wright's 1993 tax return;
(3) The District Court’s Judgment in Franklin Wright’s criminal case;
(4) The Fifth Circuit's Opinion affirming Wright’s conviction;
(5) The IRS’s Proof of Claim in this bankruptcy case;
(6) IRS records showing tax liability, extensions, penalties, payments, etc. for the years 1987, 1988, 1992, 1993, 1994, 1995, 1996 and 1997;
. Tax penalties related to nondischargeable tax liabilities are dischargeable only if incurred more than three years prior to the filing of a bankruptcy petition. See In re Roberts, 906 F.2d 1440, 1441-1442 (10th Cir.1990).
. Interest on a tax debt is treated as part of the underlying tax. See Hardee v. Internal Revenue Service, 137 F.3d 337, 342 (5th Cir.1998).
. Section 523(a)(l)(B)(i) provides:
Exceptions to discharge
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt—
(1) for a tax or a customs duty—
(B) with respect to which a return, if required—
(i) was not filed;
.Section 523(a)(1) provides:
Exceptions to discharge
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt—
(1) for a tax or a customs duty—
(A) of the kind and for the -periods specified in section 507(a)(2) or 507(a)(8) of this title, whether or not a claim for such tax was filed or allowed;
(B) with respect to which a return, if required—
(i) was not filed; or
(ii) was filed after the date on which such return was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition;
Section 507(a)(8) provides:
Priorities
(a) The following expenses and claims have priority in the following order:
(8) Eighth, allowed unsecured claims of governmental units, only to the extent that such claims are for—
(A) a tax on or measured by income or gross receipts—
(i) for a taxable year ending on or before the date of the filing of the petition for which a return, if required, is last due, including extensions, after three years before the date of the filing of the petition;
. Section 523(a)(1)(C) provides in pertinent part:
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt—
(1) for a tax or a customs duty—
(C)with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax;
. See United States v. Wright, 211 F.3d 233 (5th Cir.2000).
. Collateral estoppel, or issue preclusion, promotes the interests of judicial economy by treating specific issues of fact or law that are validly and necessarily determined between two parties as final and conclusive. Issue preclusion is appropriate only if the following four conditions are met:
(1) the issue under consideration in a subsequent action must be identical to the issue litigated in a prior action;
(2) the issue must have been fully and vigorously litigated in the prior action;
(3) the issue must have been necessary to support the judgment in the prior case;
(4) there must be no special circumstance that would render preclusion inappropriate or unfair.
See United States v. Shanbaum, 10 F.3d 305, 310-311 (5th Cir.1994); Grogan v. Garner, 498 U.S. 279, 285 n. 11, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) (collateral estoppel applies in bankruptcy discharge proceedings).
In the fiéld of taxation, however, collateral estoppel has a somewhat narrower application: "It must be confined to situations where the matter raised in the second suit is identical in all respects with that decided in the first proceeding and where the controlling facts and applicable rules remain unchanged.” See Hibernia Nat. Bank in New Orleans v. United States, 740 F.2d 382, 387 (5th Cir.1984), citing Commissioner v. Sunnen, 333 U.S. 591, 599-600, 68 S.Ct. 715, 720, 92 L.Ed. 898 (1948); Cluck v. United States, 165 B.R. 1005, 1009 (W.D.Tex.1993).
. The converse, of course, is not true. The Government is not estopped to raise in a civil proceeding an issue on which it lost in a prior criminal case because the burden of proof in the earlier case (beyond a reasonable doubt) is greater than the burden in a civil case (usually preponderance of the evidence). See Tomlinson v. Lefkowitz, 334 F.2d 262, 264 (5th Cir.1964); Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917 (1938). The Government might only have failed to prove the issue in the criminal case because of its inability to meet the higher standard of proof there imposed. In the later civil action, where the burden of proof is lower, the quantum of evidence might be sufficient to carry the day. The highly publicized case of O.J. Simpson is the most visible example of this principle in action. See Carey Goldberg "First Keep the Jury Wide Awake,” New York Times (Week in Review) (Sunday, Nov. 24, 1996); Stephanie Simon "Civil Cases Offer Victims Another Chance to Prove a Point," Los Angeles Times (Metro Section) (Monday, Sept. 2, 1996).
. We also note that Wright received more protection in the criminal proceeding than he would in this proceeding in that the criminal trial required the jury to find "beyond a reasonable doubt” that Wright acted willfully to evade his taxes. Thus, the Government's burden in the criminal trial was higher than it would be in the present trial.
. Not only are the legal issues raised in the present case virtually identical to those decided in the criminal proceeding, the controlling facts are also identical. See Hibernia Nat. Bank in New Orleans v. United States, 740 F.2d 382, 387 (5th Cir.1984), citing Commissioner v. Sunnen, 333 U.S. 591, 599-600, 68 S.Ct. 715, 720, 92 L.Ed. 898 (1948).
.If anything, it would be highly inappropriate to permit someone convicted of tax evasion to relitigate the question whether he willfully attempted to evade or defeat the tax. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493066/ | *431
MEMORANDUM OPINION
TERRANCE L. MICHAEL, Chief Judge.
THIS MATTER comes before the Court pursuant to the Objections filed by John Marshall Wheatley, Debtor herein, to Claims #3, #4, #5 and # 6 (hereafter collectively referred to as the “Claims”). An evidentiary hearing on the Objections was held on July 7, 2000. Melinda A. Martin appeared as attorney for the Debt- or. Stephen R. Clouser appeared as attorney for A1 Prueitt (“Mr.Prueitt”) and Michael J. Calore (“Mr.Calore”), the holders of Claims #3, #4, #5 and # 6. Also appearing was James E. Frasier on behalf of Tracy L. Richardson. The following findings of fact and conclusions of law are made pursuant to Bankruptcy Rule 7052 and Federal Rule of Civil Procedure 52.
Jurisdiction
The Court has jurisdiction over this matter pursuant to 28 U.S.C.A. § 1334(b),1 and venue is proper pursuant to 28 U.S.C.A. § 1409. Reference to the Court of this matter is proper pursuant to 28 U.S.C.A. § 157(a), and it is a core proceeding as contemplated by 28 U.S.C.A. § 157(b)(2)(B).
Findings of Fact
Debtor has been involved in litigation with Mr. Prueitt and Mr. Calore since the early 1990s. Each of the Claims arises out of judgments entered by the District Court in and for Tulsa County, Oklahoma (the “State Court”) against the Debtor and/or secured by assets owned by the Debtor. The relevant facts with respect to each claim are summarized as follows:
Claim # 3
This claim arises out of a judgment entered in favor of Mr. Prueitt and Mr. Calore and against Patricia L. Wheatley2 on October 10,1996. The judgment, in the amount of $40,947.81, represents an award of attorney’s fees to Mr. Prueitt and Mr. Calore. This judgment contains no provisions regarding the accrual of prejudgment or postjudgment interest.
Cldim # Ip
This claim arises out of a November 17, 1999, judgment in favor of Mr. Prueitt and against Debtor in the amount of $2,376.21. The judgment represents an award of attorney’s fees to Mr. Prueitt. It contains no provisions regarding the accrual of prejudgment or postjudgment interest.
Claim # 5
This claim arises out of a judgment in favor of Mr. Prueitt and against Debtor on November 7, 1991. The judgment is in “the principal sum of $22,641.10, with prejudgment and postjudgment interest thereon as allowed by law, a reasonable attorney’s fee of $2,500, and all costs.” See Claim No. 5.
Claim # 6
This claim arises out of a judgment entered in favor of Mr. Calore and against Debtor on March 25, 1992. The judgment is in “the principal sum of $10,009.02, with prejudgment and postjudgment interest thereon as allowed by law, a reasonable attorney’s fee of $1,500, and all costs.” See Claim No. 6.
To the extent the “Conclusions of Law” contain any items which should more appropriately be considered “Findings of Fact,” they are incorporated herein by this reference.
Burden of Proof
Federal Rule of Bankruptcy Procedure 3001(f) states that “a proof of claim executed and filed shall constitute prima *432facie evidence of the validity of the amount of the claim,” thereby putting the initial burden on the objecting party. Fed. R. Bankr.P. 3001(f). As one court has noted,
The objecting party carries the burden of going forward with evidence supporting his objection to the validity of the amount of the claim. Matter of Townview Nursing Home, 28 B.R. 431 (Bankr.S.D.N.Y.1983); In re Breezewood, Acres, Inc., 28 B.R. 32 (Bankr.M.D.Pa.1982). Such evidence must be of a probative force equal to that of the allegations of the creditor’s proof of claim. 3 Collier on Bankruptcy, P 502.01[3] p. 502-17 (Rel.10-9/83). If the objecting party succeeds in overcoming the prima facie effect of the proof of claim, the ultimate burden of persuasion then rests on the claimant. Matter of Texlon, 28 B.R. 525 (Bankr.S.D.N.Y.1983).
In re Wells, 51 B.R. 563, 566 (D.Colo.1985), cited with approval in Abboud v. Abboud (In re Abboud), 232 B.R. 793, 796 (Bankr.N.D.Okla.1999), aff'd 237 B.R. 777 (10th Cir. BAP 1999); see also In re Ford, 194 B.R. 583, 587-588 (S.D.Ohio 1995).
Conclusions of Law
Each of the Claims is in the form of a judgment. Neither the principal amount of any Claim nor the statutory interest rate are at issue; instead, the parties disagree as to the manner in which post-judgment interest accrues on the Claims. The issue of postjudgment interest accrual with respect to each of the Claims is governed by Oklahoma law, namely Okla. Stat. Ann. tit. 12, § 727 (West 2000) (the “Interest Statute”). In order to resolve this dispute, the Court must consider the Interest Statute in its 1991 form, together with all subsequent amendments. As it does so, the Court is bound to follow the decisions of the Supreme Court of Oklahoma interpreting the Interest Statute. See Hays v. Jackson National Life Ins. Co., 105 F.3d 583, 587 (10th Cir.1997) (federal court sitting in diversity action bound to follow state law “as announced by that state’s highest court”).
In 1991, the Interest Statute provided for interest on judgments from and after the date of their rendition “at an annual rate equal to the average United States Treasury Bill rate of the preceding calendar year as certified by the Administrative Director of the Courts by the State Treasurer on the first regular business day in January of each year, plus four percentage points.” Okla. Stat. Ann. tit. 12, § 727 (West 1991).3 In 1997, the Interest Statute was amended to provide that the post-judgment interest rate would vary from year to year, and also to provide for the compounding of interest on judgments (the “1997 Amendment”).4 The 1997 Amend*433ment also provided that “[e]ffective January 1, 1998, the method for computing postjudgment interest prescribed by this section shall be applicable to all judgments remaining unpaid rendered prior to January 1, 1998.” See Okla. Stat. Ann. tit. 12, § 727(J) (West 1997). The 1997 Amendment contained similar provisions with respect to prejudgment interest. See Okla. Stat. Ann. tit. 12, § 727(E) and (K) (West 1997).
In 1999, the Interest Statute was further amended to provide for the accrual of interest upon awards of attorneys’ fees and costs. See Okla. Stat. Ann. tit. 12, § 727(A) (West 2000) (the “1999 Amendment”).5 This amendment took effect January 1, 2000. See Okla. Stat. Ann. tit. 12, § 727(J) (West 2000). Prior to the 1999 Amendment, the Oklahoma Supreme Court had ruled that awards of attorneys’ fees were in the nature of costs, and did not accrue interest under the terms of the Interest Statute. See McAlester Urban Renewal Authority v. Hamilton, 521 P.2d 823 (Okla.1974) (hereafter “McAlester”). The comments with respect to the 1999 Amendment indicate the intent of the Oklahoma Legislature to overrule McAles-ter,6
The question before the Court is the proper application of the Interest Statute, as amended in 1997 and 1999, to the Claims. Debtor argues that the amendments are to be given effect from and after the effective date set forth in the statute. Mr. Prueitt and Mr. Calore contend that the 1997 and 1999 Amendments apply to the judgments they hold from the dates those judgments were entered. Messrs. Prueitt and Calore argue that the statute demonstrates a legislative intent to retroactively apply the statute, and that, where such legislative intent is demonstrated, a court is required to apply a statute retroactively. See Sunray DX Oil Company v. Great Lakes Carbon Corp., 476 P.2d 329, 346 (Okla.1970). In making this argument, Messrs. Prueitt and Calore rely on that portion of the 1997 Amendment which provides that “[ejffective January 1, 1998, the method for computing postjudgment inter*434est prescribed by this section shall be applicable to all judgments remaining unpaid rendered prior to January 1, 1998.” See Okla. Stat. Ann. tit. 12, § 727(J) (West 1997); see also Okla. Stat. Ann. tit. 12, § 727(J) (West 2000) (similar provision establishing effective date of January 1, 2000, with respect to 1999 Amendment).
The Oklahoma Supreme Court has provided this Court with some measure of guidance in two separate decisions. In Traczyk v. Traczyk, 891 P.2d 1277 (Okla.1995) (hereafter “Traczyk ”), the court considered the issue of interest accrual on monies awarded under a decree of divorce. The husband argued that, under the Interest Statute, the interest rate under the judgment should vary from year to year. The wife argued that interest under the judgment should remain at the rate in effect on the date the judgment was entered. As it ruled in favor of the wife, the Oklahoma Supreme Court undertook the following analysis:
Husband next asserts the trial court erroneously established a fixed interest rate on the support alimony award. The trial court awarded to Wife $86,275.00 in alimony in lieu of property division with a portion to be paid in a lump sum. The remainder, $70,000.00, was to be paid in monthly installments of $3,200.00. To this amount the court added interest at the rate of 11.71% for a total of $24,-301.00. Husband asserts that the trial court erred in imposing the 11.71% interest rate citing 12 O.S.1991, § 727(B) for support. Section 727(B) provides:
“For purposes of this section, interest [on all judgments of courts of record] shall be at an annual rate equal to the average United States Treasury Bill rate of the preceding calendar year as certified to [sic] the Administrative Director of the Courts by the State Treasurer on the first regular business day in January of each year, plus four percentage points.”
Wife responds by noting that the U.S. Treasury Bill rate for 1990 was 7.71% making interest under the statute 11.71% (7.71% plus 4%). Husband does not dispute this assertion. Rather he argues the rate should not be fixed but should vary each year in relation to the change in the Treasury Bill rate. Other than § 727(B), Husband cites to no authority for his position that the rate of interest should vary each year. Reading § 727 in its entirety reveals that the rate of interest applied to judgments pursuant to § 727(B) is to continue for the life of the judgment. In discussing the effect of an after enacted statute changing the rate of interest on judgments, we said in Timmons v. Royal Globe Ins. Co., 713 P.2d 589 (Okl.1985):
“ ... No term of a judgment may be affected by after-enacted legislation. To hold otherwise would undermine the constitutionally-shielded concept of an ‘accrued’ or ‘vested’ right in the adjudicated obligation ....” (Emphasis added)
We adopt this rationale to this proposition and hold it [the position advanced by the husband] to be without merit.
Id. at 1282; see also Lee v. Volkswagen of America, Inc., 743 P.2d 1067, 1069 (Okla.1987) (holding that “[t]he postjudgment interest rate in effect at the time of the judgment rendition does not vary with any subsequent changes in the statutory rate level”).
Most recently, in Cox v. Kansas City Life Ins. Co., 983 P.2d 1025 (Okla.1999) (hereafter “Cox ”), the plaintiff was awarded a judgment which provided that “post-judgment interest shall accrue ‘from April 8, 1994, at the annual statutory rate which begins at 6.99 percent per annum for 1994....”’ Id. at 1026-1027. After the judgment was entered, the Oklahoma Legislature enacted the 1997 Amendment, which provided for both the fluctuation of the interest rate and the compounding of interest. On the basis of the 1997 Amendment, the trial court in Cox held that interest on the judgment would remain fixed at 6.99 percent until January 1, 1998, *435after which time interest would vary from year to year in accordance with the 1997 Amendment, and would also compound. As it affirmed the ruling of the trial court, the Oklahoma Supreme Court noted that
Kansas City Life argues that the rate of interest in effect when the judgment against it was entered, 6.99 percent, may not be altered. For this proposition Kansas City Life relies on the following language in Timmons v. Royal Globe Insurance Co., 1985 OK 76 ¶ 13, 713 P.2d 589:
... No term of a judgment may be affected by after-enacted legislation. To hold otherwise would undermine the constitutionally-shielded concept of an “accrued” or “vested” right in the adjudicated obligation. After-passed enactments can neither destroy nor alter that right... .[Footnote omitted.]
¶ 16 Timmons v. Royal Globe Insurance Co. does not support Kansas City Life’s claim that the trial court erred. The trial court’s judgment entered on May 12, 1994 provided that post-judgment interest should accrue “from April 8, 1994, at the annual statutory rate which begins at 6.99 percent per annum for 1994.... ” [Emphasis added.] It is thus clear that the trial court intended that interest not be necessarily limited to 6.99 percent but was to be governed by the terms of 12 O.S. § 727. In Tim-mons, however, the trial court’s judgment expressly limited post judgment interest to the rate in effect when judgment was entered.
¶ 17 There is another reason why Tim-mons does not apply to this appeal. Here the trial court applied the new interest rate only prospectively after the passage of the 1997 amendments to 12 O.S. § 727. Those amendments showed that the legislature intended, for the first time, to make changes in the interest rate and compounding apply prospectively. In Traczyk v. Traczyk, 1995 OK 22 ¶ 24, 891 P.2d 1277, we held that 12 O.S. § 727 should be interpreted so that “the rate of interest applied to judgments pursuant to § 727(B) is to continue for the life of the judgment.” Now, however, 12 O.S. Supp.1997 § 727 provides, “... Effective January 1,1998, the method for computing postjudgment interest prescribed by this section shall be applicable to all judgments remaining unpaid rendered prior to January 1, 1998.” The trial court’s judgment correctly followed the current statutory mandate by leaving the 6.99% interest rate in effect through December 31, 1997 and applying the new method of computation called for by the 1997 amendments only to interest accruing from and after January 1, 1998.
Id. at 1028-1029 (emphasis added); see also Fleming v. Baptist General Convention of Okla, 742 P.2d 1087, 1102 (Kauger, J. concurring) (“Should the legislature determine that it is prudent to raise or lower the interest rate from time to time, ... the new rate should apply from the effective date of the change to all outstanding judgments.”) (footnote omitted) (emphasis added).
Under the principles set forth in Traczyk and Cox, the 1997 and 1999 Amendments do not apply prior to their effective date. The Court concludes that, under Oklahoma law: (1) prior to January 1, 1998, the interest rate for postjudgment interest did not vary; instead, post-judgment interest accrued at the fixed rate in effect at the time the judgment was entered; (2) interest upon judgments did not compound prior to January 1, 1998; and (3) an award of attorney’s fees and/or costs did not accrue interest prior to January 1, 2000. Applying these standards to each of the Claims, the Court rules as follows:
Claims # 3 and # J
Each of these Claims is an award of attorney’s fees. As such, prior to January 1, 2000, interest does not accrue on either Claim. After January 1, 2000, interest *436accrues upon both Claims at the rate of 8.87 percent per annum. In the event these Claims are not paid during calendar year 2000, interest shall compound under the terms of the 1999 Amendment. To the extent the Claims are oversecured, interest shall continue to accrue in accordance with § 506(b) of the Bankruptcy Code.
Claim, # 5
The judgment represented by Claim # 5 is comprised of the following components: principal, prejudgment interest, post-judgment interest, attorney’s fees and costs. The claim includes a calculation of prejudgment interest of $1,038.18 which has not been disputed.7 Under the rationale set forth above, the Court finds that:
(1) With respect to the principal amount of the judgment ($22,641.10):
(a) interest will accrue at the judgment rate in effect as of the date of judgment (November 7, 1991) of 11.71%;
(b) said rate shall remain fixed until January 1, 1998, when the rate shall begin to vary in accordance with the 1997 Amendment; and
(c) commencing January 1, 1999, interest shall compound on an annual basis, also in accordance with the 1997 Amendment.
(2) With respect to the award of prejudgment interest ($1,038.18):
(a) no interest shall accrue on the same until January 1,1998;
(b) commencing January 1, 1998, interest shall accrue in accordance with the 1997 Amendment; and
(c) commencing January 1, 1999, interest shall compound on an annual basis, also in accordance with the 1997 Amendment.
(3) With respect to the award of attorneys’ fees ($2,500.00) and costs ($338.12):
(a) no interest shall accrue on the same until January 1, 2000;
(b) commencing January 1, 2000, interest shall accrue at the current rate of 8.87% in accordance with the 1999 Amendment; and
(c) commencing January 1, 2001, if the claim remains unpaid, interest shall compound on an annual basis, also in accordance with the 1999 Amendment.
To the extent the claim is oversecured, interest shall continue to accrue on the claim in accordance with § 506(b) of the Bankruptcy Code.
Claim, # 6
. The judgment represented by Claim # 6 is also comprised of principal, prejudgment interest, postjudgment interest, attorney’s fees and costs. The claim includes a calculation of prejudgment interest of $318.23 which has not been disputed.8 Under the rationale set forth above, the Court finds that:
(1) With respect to the principal amount of the judgment ($10,009.82)
(a) interest will accrue at the judgment rate in effect as of the date of judgment (March 25, 1992) of 9.58%;
(b) said rate shall remain fixed until January 1, 1998, when the rate shall begin to vary in accordance with the 1997 Amendment; and
(c) commencing January 1, 1999, interest shall compound on an annual basis, also in accordance with the 1997 Amendment.
(2) With respect to the award of prejudgment interest ($318.23):
(a) no interest shall accrue on the same until January 1,1998;
(b) commencing January 1, 1998, interest shall accrue in accordance with the 1997 Amendment; and
*437(c) commencing January 1, 1999, interest shall compound on an annual basis, also in accordance with the 1997 Amendment.
(3) With respect to the award of attorneys’ fees ($1,500.00) and costs ($209.04):
(a) no interest shall accrue on the same until January 1, 2000;
(b) commencing January 1, 2000, interest shall accrue at the current rate of 8.87% in accordance with the 1999 Amendment; and
(c) commencing January 1, 2001, if the claim remains unpaid, interest shall compound on an annual basis, also in accordance with the 1999 Amendment.
To the extent the claim is oversecured, interest shall continue to accrue on the claim in accordance with § 506(b) of the Bankruptcy Code.
Conclusion
The Objections to Claims #3, #4, #5 and # 6 are granted in part and denied in part. Claims #3, #4, #5 and # 6 are allowed as modified by the terms of this Memorandum Opinion. At the evidentiary hearing held in this matter, counsel for the Debtor and Mr. Prueitt and Mr. Calore represented to the Court that, upon receipt of this Court’s decision, they would be in a position to present the Court with a judgment calculating the amount of each of the Claims. The parties are directed to submit a joint form of such judgment within ten (10) days. In the event such a judgment is not timely submitted, the Court will prepare and enter its own judgment.
. Unless otherwise noted, all statutory references are to sections of the United States Bankruptcy Code, 11 U.S.C.A. § 101 et seq. (West 2000).
. Patricia L. Wheatley is the spouse of the Debtor. The parties have stipulated that Claim # 3 is secured by a lien upon certain property of this bankruptcy estate; namely, the proceeds of sale of certain real estate which was sold by Order of this Court entered on April 3, 2000. See Pre-Trial Order, Docket No. 121, § 11(3); see also Order Approving Sale, Docket No. 73.
. The parties have stipulated that post-judgment interest was fixed at the following rates under the terms of the Interest Statute:
Year Rate
1991 0.1171
1992 0.0958
1993 0.0742
1994 0.0699
1995 0.0831
1996 0.0955
1997 0.0915
1998 0.0922
1999 0.0887
2000 0.0887
. The pertinent provisions of the Interest Statute read as follows:
C. The postjudgment interest authorized by subsection A or subsection B of this section shall accrue from the earlier of the date the judgment is rendered as expressly stated in the judgment, or the date the judgment is filed with the court clerk, and shall initially accrue at the rate in effect for the calendar year during which the judgment is rendered until the end of the calendar year in which the judgment was rendered, or until the judgment is paid, whichever first occurs. Beginning on the first day of January of the next succeeding calendar year until the end of that calendar year, or until the judgment is paid, whichever first occurs, the judgment, together with postjudgment interest previously accrued, shall bear interest at the rate in effect for judgments rendered during that calendar year as certified by the Administrative Director of the Courts pursuant to subsection I of this section. For each succeeding calendar year, or part of a calendar year, during which a judgment remains un*433paid, the judgment, together with post-judgment interest previously accrued, shall bear interest at the rate in effect for judgments rendered during that calendar year as certified by the Administrative Director of the Courts pursuant to subsection I of this section. A separate computation using the interest rate in effect for judgments as provided by subsection I of this section shall be made for each calendar year, or part of a calendar year, during which the judgment remains unpaid in order to determine the total amount of interest for which the judgment debtor is liable. The postjudgment interest rate for each calendar year or part of a calendar year a judgment remains unpaid shall be multiplied by the original amount of the judgment, including any prejudgment interest, together with postjudgment interest previously accrued. Interest shall accrue on a judgment in the manner prescribed by this subsection until the judgment is satisfied or released.
Okla. Stat. Ann. tit. 12, § 727(C) (West 1997) (emphasis added). .
. The exact language of the 1999 Amendment reads as follows:
A. 1. Except as otherwise provided by this section, all judgments of courts of record, including costs and attorney fees authorized by statute or otherwise and allowed by the court, shall bear interest at a rate prescribed pursuant to this section. 2. Costs and attorney fees allowed by the court shall bear interest from the earlier of the date the judgment or order is pronounced, if expressly stated in the written judgment or order awarding the costs and attorney fees, or the date the judgment or order is filed with the court clerk.
See id.
. The legislative comments with respect to the 1999 Amendment provide that
The proposed changes to the statute governing pre-and post-judgment interest are intended to accomplish two purposes. The first is to allow post-judgment interest on costs and attorney fees, whether they are included in the judgment or in a separate order. This would statutorily overrule McAlester Urban Renewal Auth. v. Hamilton, 521 P.2d 823 (Okla.1974), where the Oklahoma Supreme Court held that interest did not accrue on costs and attorney fees, because they were not part of the judgment.
See Legislative Comments, Okla. Stat. Ann. tit. 12, § 727 (West 2000).
. See Pre-Trial Order, Docket No. 123, § IV(1) (listing as issue to be determined the “calculation of post judgment interest” (emphasis added)).
. See Pre-Trial Order, Docket No. 124, § IV(1) (listing as issue to be determined the "calculation of post judgment interest” (emphasis added)). | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493067/ | JACK B. SCHMETTERER, Bankruptcy Judge.
MEMORANDUM OPINION
The matter before the Court is Fairly Bike Mfg Co.’s (“Fairly Bike”) motion for reconsideration of this Court’s May 15, 2000 order denying its earlier motion to amend and vacate the default judgment entered against it herein over three years ago (“Motion to Amend”). The Motion to Amend was denied after determination that the argument for relief fell within the purview of Fed.R.Civ.P. 60(b)(1) (applicable here under Fed.R.Bankr.P. 9024). The opinion behind the May 15th order held that the one year time limitation provided by that provision had elapsed, and also that threshold requirements for vacating a default judgment had not been met.
Fairly Bike has sought reconsideration of that order based on three arguments: (1) the motion to amend should not have been analyzed under Rule 60(b)(1), but *510rather under Rule 60(a) as an effort to correct a clerical error; (2) Fairly Bike never received a preference from Schwinn under 11 U.S.C. § 547 contrary to the default judgment entered herein many years ago; and (3) various laws, rules, orders and decisions that were applied to Fairly Bike are unconstitutional.
Fairly Bike’s current motion for reconsideration is denied. Its argument does not fall within the purview of Rule 60(a) which deals with clerical errors and the bare bones assertion as to unconstitutionality of various rules and laws have all been waived because it failed to cite legal support for these arguments. Also, this Court determined long ago at the default prove-up hearing that Fairly Bike did not resist over three years ago that it received payments that constituted preferences.
Following denial, this motion for reconsideration is also stricken because the earlier permission to Fairly Bike’s counsel Dr. Liang-Houh Shieh to appear pro hac vice before this Court was revoked on June 28, 2000, and he no longer can file motions on behalf of his client because he is not admitted to the bar of this District Court and his local counsel withdrew some time ago.
JURISDICTION
This matter is before the Court pursuant to 28 U.S.C. § 157 and referred here by Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. Subject matter jurisdiction lies under 28 U.S.C. § 1334(b). Venue lies properly under 28 U.S.C. § 1409. This matter constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(A).
DISCUSSION
FEDERAL RULES OF CIVIL PROCEDURE 60(a) AND 60(b)(1)
Fairly Bike argued in its earlier Motion to Amend that the following statements made by this Court in, In re Schwinn Bicycle Co., 190 B.R. 599 (Bankr.N.D.Ill.1995), were misstatements that it sought to have corrected: (1) Fairly Bike’s counsel argued in this case that Taiwan is part of the People’s Republic of China for purposes of application of a treaty providing method to serve litigation process; (2) Fairly Bike requested this Court to transfer the preference action to Taiwan; and (3) APS International Ltd. specializes in international service. The Motion to Amend was denied because the relief it sought fell within Rule 60(b)(1) which requires that efforts to correct judgments must be brought within one year after entry of final judgment. Over three years had elapsed before Fairly Bike filed its Motion to Amend. In its current motion for reconsideration, Fairly Bike argues that this Court should not have considered the Motion to Amend under Rule 60(b)(1) but as an effort to correct a clerical error under Rule 60(a). However Rule 60(b)(1) applied, not Rule 60(a).
Under Fed.R.Civ.P. 60(a):
Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party and after such notice, if any, as the court orders.
Under Fed.R.Civ.P. 60(b):
On motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect
The occasional case of difficulty in determining whether motions are brought under Rule 60(b) or are brought to correct clerical errors under Rule 60(a) has been recognized in Wesco v. Alloy Automotive Co., 880 F.2d 981, 983 (7th Cir.1989), which set forth the following guidance:
“In this circuit, we have identified the relevant distinction as being between *511changes that implement the result intended by the court at the time the order was entered and changes that alter the original meaning to correct a legal or factual error. Thus, ‘[i]f the flaw lies in the original meaning to the judgment, then Rule 60(a) allows a correction; if the judgment captures the original meaning but is infected by error, [] the parties must seek another source of authority to correct the mistake.’ ”
Id.
Using this standard of evaluation, it is clear that Fairly Bike’s claim for relief from the default judgment did not fall within terms of Rule 60(a) as a clerical error. Fairly Bike did not claim or show that statements in the 1995 opinion of this Court did not reflect the Court’s intentions when the opinion was written. Indeed, they certainly did so. Rather, Fairly Bike contended that it did not take the positions attributed to it. The earlier opinion, however, accurately reflected this Court’s interpretation of Fairly Bike’s arguments at the time the opinion was written. Thus, there was no clerical error in transcription of the opinion, and no relief could lie under Rule 60(a). See Id. at 983 and Brandon v. Chicago Board of Education, 143 F.3d 293, 294 n. 2 (7th Cir.1998).
PREFERENCES UNDER 11 U.S.C. § 547
Fairly Bike continues to argue that it never received payments from Schwinn that constitute preferences. It again asks reconsideration of the refusal to vacate default judgment which determined that Fairly Bike did receive payments constituting preferences under 11 U.S.C. § 547. This latest motion for reconsideration raises the same arguments that Fairly raised in its original Motion to Amend which were considered, but rejected as without merit for reasons stated in the opinion entered earlier. Therefore the default judgment entered against Fairly Bike will not be vacated for those reasons. If Fairly did not appeal the May 15th ruling, the reassertion of arguments deposed of there is a most improper predicate on which to take a belated appeal on these issues now.
UNCONSTITUTIONALITY OF RULES, LAWS, ORDERS AND DECISIONS
Fairly Bike’s counsel also seeks to have certain of the Federal Rules of Civil Procedure, Federal Rules of Bankruptcy Procedure, Federal Rules of Appellate Procedures and Rules of the Supreme Court of the United States as applied to Fairly Bike declared unconstitutional and violative of the Treaty of Friendship, Commerce and Navigation (“Treaty of Friendship”) signed between the United States and Taiwan.
Fairly Bike has alleged that the following rules are unconstitutional: Federal Rules of Bankruptcy Procedure 8002, 8006, 9006(f), 9022; Federal Rule of Appellate Procedure 4(a); Federal Rule of Civil Procedure 6(e), 60(b); United States Supreme Court Rules 33.1 and 39.8; any rules and laws that require that Fairly Bike retain American counsel to represent it; any rules that provides for service by mail instead of by registered mail and express mail; any rules that provide that the service is complete at the time of the deposit rather than at the time of actual receipt; any rules that refuse to accept the Chinese postmark as the filing date or as the date to act or respond.
Fairly Bike also alleges that the following are also unconstitutional and violate the Treaty of Friendship: the appointment of APS International Group as agent for service of process on Appellants; the order for issuance of letters rotatory which seeks international assistance. These latter arguments are another attempt to reargue issues relating to service of process in this Adversary which were decided years ago against Fairly Bike before the default judgment was entered.
Fairly Bike does not direct the Court to any cases or other legal authority that *512support its arguments. It does not even indicate which provisions of the U.S. Constitution or the Treaty of Friendship is violated by the various federal rules.
The U.S. Court of Appeals for the Seventh Circuit has repeatedly made clear that “perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent authority, are waived (even where those arguments raise constitutional issues).” See, e.g., United States v. Brown, 899 F.2d 677, 679 n. 1 (7th Cir.1990); United States v. Petitjean, 883 F.2d 1341, 1349 (7th Cir.1989); United States v. Williams, 877 F.2d 516, 518-19 (7th Cir.1989). The Court does not have a duty to research and construct legal arguments for a party. Head Start Family Educ. Program, Inc. v. Cooperative Serv. Agency 11, 46 F.3d 629, 635 (7th Cir.1995). Because its arguments regarding the unconstitutionality of various federal rules and the violation of the Treaty of Friendship are unsupported by any legal authority and undeveloped, Fairly Bike’s argument is therefore found to have been waived.
CONCLUSION
Fairly Bike’s current Motion for reconsideration is therefore denied.
Moreover, this motion for reconsideration is also stricken from the record because the pro hac vice admission of Fairly Bike’s Counsel Dr. Liang-Houh Shieh has been revoked by this Court. Fairly Bike needs an attorney admitted to practice here to enable it to file motions. Its failure to obtain one will continue to result in defeat of every motion filed by it under the signature of Dr. Shieh. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484380/ | 11/16/2022
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
Assigned on Briefs July 1, 2022
LORI S. FERNANDEZ v. TENNESSEE DEPARTMENT OF REVENUE
Appeal from the Circuit Court for Davidson County
No. 21c442 Thomas W. Brothers, Judge
___________________________________
No. M2021-01417-COA-R3-CV
___________________________________
Lori S. Fernandez (“Appellant”) was employed by the Tennessee Department of Revenue
from 2014 until March 6, 2020, when she resigned. Following her resignation, Appellant
sued the Department and several of its employees (the “Appellees”) for various causes of
action including, inter alia, racial and disability discrimination. Appellees filed a motion
to dismiss which the trial court granted. Thereafter, Appellant filed a Tenn. R. Civ. P. 59
motion to alter or amend the trial court’s order, as well as an amended complaint. The trial
court denied the motion to alter or amend and declined to address the outstanding amended
complaint. Appellant timely appealed to this court. We conclude that the order appealed
from is non-final. Accordingly, this Court lacks subject matter jurisdiction, and the appeal
must be dismissed.
Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed
KRISTI M. DAVIS, J., delivered the opinion of the Court, in which J. STEVEN STAFFORD,
P.J., W.S., and W. NEAL MCBRAYER, J. joined.
Lori S. Fernandez, White House, Tennessee, Pro se.
Herbert H. Slatery III, Attorney General and Reporter, Andrée Sophia Blumstein, Solicitor
General, and Melissa Brodhag and Shanell L. Tyler, Assistant Attorneys General for the
appellees, Tennessee Department of Revenue, David Gerregano, Rosie McClurkan, Kenya
Watson, and Genna Preston.
MEMORANDUM OPINION1
1
Rule 10 of the Tennessee Court of Appeals Rules provides:
This Court, with the concurrence of all judges participating in the case, may affirm, reverse
Appellant was employed by the Tennessee Department of Revenue from 2014
through March 6, 2020, when she resigned. On March 5, 2021, Appellant filed a complaint
against the Appellees in the Circuit Court for Davidson County (the “trial court”).
Appellant alleged causes of action for racial and disability discrimination, retaliation, and
malicious harassment under the Tennessee Human Rights Act (“THRA”), the Americans
with Disabilities Act (“ADA”), and the Tennessee Disability Act (“TDA”). Appellees did
not file an answer but filed a motion to dismiss on April 12, 2021. Appellees asserted that
several of Appellant’s claims were time-barred by statutes of limitation, that the federal
claims were barred by sovereign immunity, and that Appellant failed to state a claim for
which relief could be granted because her allegations were conclusory.
The trial court granted Appellees’ motion to dismiss on August 19, 2021. Within
thirty days of the entry of that order, Appellant filed a motion to alter or amend, as well as
her first amended complaint. On October 29, 2021, the trial court entered an order denying
Appellant’s motion to alter or amend and determining that the first amended complaint was
of no “procedural effect”:
In order for a post-judgment amended complaint to have any
procedural effect, a Plaintiff must first move the Court to set aside its
judgment, and then move the court for leave to amend. Lee v. State Volunteer
Mut. Ins. Co., Inc., No. E2002-03127-COA-R3-CV, 2005 WL 123492 at *11
(Tenn. Ct. App. Jan. 21, 2005). Here, Plaintiff has moved the Court to alter
or amend its judgment on Defendant’s original Motion to Dismiss, however,
Plaintiff failed to set a hearing date and this Court never considered the
motion nor set aside the prior judgment. Accordingly, the previous judgment
of this Court still stands.
Considering Plaintiff’s Motion, sua sponte, the Court respectfully
DENIES Plaintiff’s Motion to Alter or Amend Judgment. Therefore,
Plaintiff’s First Amended Complaint lacks any procedural effect.
Appellant timely appealed to this Court.
Issues
Appellant raises two issues in her principal brief, which we have rephrased and
consolidated: Whether the trial court erred in determining that Appellant’s amended
complaint lacked any procedural effect.
or modify the actions of the trial court by memorandum opinion when a formal opinion
would have no precedential value. When a case is decided by memorandum opinion it
shall be designated “MEMORANDUM OPINION,” shall not be published, and shall not
be cited or relied on for any reason in any unrelated case.
-2-
Discussion
This appeal concerns Tenn. R. Civ. P. 15.01 and the trial court’s treatment of
Appellant’s first amended complaint, which was filed post-judgment but prior to the
judgment becoming final. Tenn. R. Civ. P. 15.01 provides, as relevant:
A party may amend the party’s pleadings once as a matter of course
at any time before a responsive pleading is served or, if the pleading is one
to which no responsive pleading is permitted and the action has not been set
for trial, the party may so amend it at any time within 15 days after it is
served. Otherwise a party may amend the party’s pleadings only by written
consent of the adverse party or by leave of court; and leave shall be freely
given when justice so requires.
This Court recently construed Rule 15.01 under circumstances similar to those in
the case at bar. In Justice v. Nordquist, No. E2020-01152-COA-R3-CV, 2021 WL
2661008 (Tenn. Ct. App. June 29, 2020), the plaintiff sued a psychologist for various
causes of action related to the psychologist’s treatment of the plaintiff’s son during the
course of the plaintiff’s divorce. The psychologist did not file an answer to the original
complaint but did file a motion to dismiss for failure to state a claim for which relief may
be granted. Id. at *1; see also Tenn. R. Civ. P. 12.02. Among other things, the psychologist
argued that he was immune from liability for statements made during judicial proceedings,
that the plaintiff lacked standing, and that the applicable statutes of limitation and repose
had passed. Id. The trial court entered an order granting the motion to dismiss on February
28, 2020. Id. at *2. The plaintiff then filed motions to alter or amend, which were denied
on May 7, 2020. Id. On June 8, 2020, the plaintiff filed his first amended complaint. Id.
Several months later, the plaintiff filed a motion for default because the first amended
complaint was still unanswered. Id. While the defendant psychologist responded to the
first amended complaint with a motion to dismiss, the motion was never ruled on, and the
plaintiff “filed his Notice of Appeal with this Court ‘out of an abundance of caution’ as he
put it in his appellate brief.” Id.
On appeal, the seminal issue was whether this Court had jurisdiction, insofar as the
first amended complaint was not addressed in the lower court.2 Id. We determined that
because the defendant psychologist never filed a responsive pleading to the original
complaint, the plaintiff’s right to file his first amended complaint remained intact while the
2
In civil cases, “an appeal as of right may be taken only after the entry of a final judgment.” In re
Est. of Henderson, 121 S.W.3d 643, 645 (Tenn. 2003) (citing Tenn. R. App. P. 3(a)). A final judgment
adjudicates all “claims, rights, and liabilities of all the parties,” Discover Bank v. Morgan, 363 S.W.3d 479,
488 n.17 (Tenn. 2012), and “resolves all the issues in the case, leaving nothing else for the trial court to
do.” Est. of Henderson, 121 S.W.3d at 645. When an order is non-final, this Court lacks subject matter
jurisdiction to review it. See id.
-3-
trial court’s judgment was still non-final. As Justice is highly analogous to the present
case, we quote it at length:
Plaintiff contends that, as Defendant never filed a responsive pleading
to his original complaint, he had an absolute right to file an amended
complaint notwithstanding that the Trial Court already entered an order of
dismissal as to his original complaint. In support of his contention, Plaintiff
cites Justice v. Nelson, No. E2018-02020-COA-R3-CV, 2019 WL 6716300
(Tenn. Ct. App. Dec. 10, 2019), no appl. perm. appeal filed, incidentally
another case involving Plaintiff. In Justice, the trial court granted defendants’
motion to dismiss plaintiff’s complaint. Id. at *1. Thirty days later, plaintiff
filed an amended complaint. Id. Acknowledging the legitimacy of this
procedural move, we noted:
On September 4, 2018, the trial court entered an order clarifying that
“Mr. Justice filed a First Amended Complaint not a motion to be
allowed to file an amended complaint.” (Emphasis in original.) The
court was reminding defendants that “[a] party may amend the
party’s pleadings once as a matter of course at any time before a
responsive pleading is served[.]” See Tenn. R. Civ. P. 15.01; see
also Adams v. Carter Cty. Memorial Hosp., 548 S.W.2d 307, 308-
09 (Tenn. 1977) (holding that the plaintiff could file an amended
complaint as a matter of course after the trial court granted the
defendants’ motion to dismiss and before that order of dismissal
became a final judgment). Despite finding that “[t]here was never a
motion to dismiss the amended complaint[,]” the trial court ruled
that “[t]he response to the amended complaint reads like a motion to
dismiss and the Court will consider it a motion to dismiss.” The court
also requested additional briefing on the issue.
Justice, 2019 WL 6716300, at *1. The trial court dismissed the lawsuit. Id. at
*2. On appeal, we held that defendants’ response to plaintiff’s amended
complaint was not a motion to dismiss in form or in substance, and that the
trial court erred in effectively dismissing the amended complaint sua
sponte without adequate justification. Id. at *3, 5. For purposes of the instant
case, however, the main point from Justice is that this Court has recognized
a scenario in which a party may file an amended complaint to continue her
case even though the trial court already has dismissed her original complaint
if no responsive pleading to the original complaint was filed and the order of
dismissal has not become final. The first consideration in this scenario is
whether a responsive pleading has been filed. Here, Defendant filed only a
motion to dismiss; he never filed an answer. Regarding the effect this has on
a plaintiff’s ability to amend her complaint, this Court has stated: “[A]
-4-
plaintiff must seek permission from the court to file an amended complaint
only when a responsive pleading has been filed. It is well-settled in
Tennessee that a motion to dismiss is not a responsive pleading.” Mosley v.
State, 475 S.W.3d 767, 774 (Tenn. Ct. App. 2015) (citations omitted).
Defendant’s Motion to Dismiss and to Strike the Complaint does not
constitute a responsive pleading. The next consideration is whether
Plaintiff’s amended complaint was timely filed before the order of dismissal
became final. Regarding the different senses in which a judgment may be
deemed “final,” this Court has stated:
Generally, “a trial court’s judgment becomes final thirty days after
its entry unless a party files a timely notice of appeal or specified
post-trial motion.” Id. (citing State v. Pendergrass, 937 S.W.2d 834,
837 (Tenn. 1996); Tenn. R. App. P. 4(a)-(c)); see also McBurney v.
Aldrich, 816 S.W.2d 30, 34 (Tenn. Ct. App. 1991). Before that time,
the judgment lies “within the bosom of the court” and “may be set
aside or amended on motion of a party or upon the court’s own
motion.” McBurney, 816 S.W.2d at 34. It is in this slightly different,
but substantially related, sense of a final judgment in which the
doctrine of res judicata is implicated here. This Court has referred
to this as the concept of “final completion.” Swift v. Campbell, 159
S.W.3d 565, 573 (Tenn. Ct. App. 2004); see also Lawrence A.
Pivnick, Tennessee Circuit Court Practice § 27:9 n. 22 (2010). In
this sense, then, a judgment may be considered “final” in order to
confer jurisdiction on an appellate court pursuant to Tennessee Rules
of Appellate Procedure Rule 3(a), while not being “final” for
purposes of res judicata because such an appeal is pending.
This is, in fact, the rule in Tennessee, where a “‘a judgment is not
final and res judicata where an appeal is pending.’” Creech [v.
Addington], 281 S.W.3d [363,] . . . 377-78 [(Tenn. 2009)]
(quoting McBurney, 816 S.W.2d at 34); see also Freeman v. Marco
Transp. Co., 27 S.W.3d 909, 913 (Tenn. 2000). Our Supreme Court,
citing the Restatement (Second) of Judgments § 13 cmt. f, has noted
that Tennessee’s rule is a minority position and that the predominant
view in other jurisdictions is that the “taking of an appeal does not
affect the finality of a judgment for res judicata purposes.” Creech,
281 S.W.3d at 378 n. 17 (collecting cases from other
jurisdictions). However, it is an inescapable conclusion that, in
Tennessee, a judgment from a case in which an appeal is pending is
not final and cannot be res judicata until all appellate remedies have
been exhausted.
-5-
In re Shyronne D.H., No. W2011-00328-COA-R3-PT, 2011 WL 2651097,
at *6 (Tenn. Ct. App. July 7, 2011), no appl. perm. appeal filed (footnote
omitted).
On May 7, 2020, the Trial Court denied Plaintiff’s motions to alter or amend.
Plaintiff filed his amended complaint on June 8, 2020, within the time for
appeal (the thirty-day mark landed on a Saturday; the amended complaint
was filed that Monday). For this thirty-day period, the Trial Court’s order
remained non-final and ‘within the bosom of the court,’ thus subject to
change or appeal. As was the scenario in Justice, Plaintiff’s timely filing of
an amended complaint when no responsive pleading was filed had the effect
of keeping the case alive in the Trial Court. However, in the present case, the
Trial Court never ruled on Plaintiff’s amended complaint. Therefore, we lack
a final judgment and, consequently, subject matter jurisdiction to hear this
appeal.
Justice, 2021 WL 2661008, at *3–4.
On appeal, Appellant argues that Justice is highly analogous to the present case and
that the trial court erred in treating Appellant’s first amended complaint as “lack[ing] any
procedural effect.” On the other hand, Appellees argue that the trial court correctly
determined that the judgment of dismissal must have been set aside for the first amended
complaint to become operative.
We understand the difficulties created by parties filing an amended complaint post-
judgment. Indeed, prior to its amendment in 2009, the federal analog to Rule 15.01 was
the same as our current rule regarding amended complaints as of right, and the issue now
before us caused confusion amongst the federal courts.3 Nonetheless, we agree with
3
The commentary to Federal Rule of Civil Procedure 15 provides:
Under the prior version of Rule 15, it was common for plaintiffs to attempt to amend their
complaints “as of right” after the court had granted a motion to dismiss under Rule
12(b)(6). Technically, the window for the amendment was still open because the defendant
had not yet answered (under the old rule, only the filing of an answer closed the time to
amend as of right), but courts understandably puzzled over whether an amendment as of
right was appropriate under those circumstances. Under the old scheme, some cases
asserted that the right to amend once as a matter of course terminated upon
dismissal. Some decisions seemed to say that the right to amend once as a matter of course
continued but that the court nevertheless could deny the amendment if it would be futile.
Other decisions held that the right to amend once as a matter of course continued during
the period between when the court granted the motion to dismiss and when the court
entered final judgment. Regardless of which approach applied, however, once the court
entered final judgment, the party seeking to amend needed to seek post-judgment relief
under Rule 59 or Rule 60.
-6-
Appellant that there is no meaningful difference in this case and Justice. 2021 WL
2661008. Rule 15.01 unequivocally provides that a complaint may be amended “once as
a matter of course at any time before a responsive pleading is served.” Tenn. R. Civ. P.
15.01. And this Court made clear in Justice that the rule contemplates post-judgment first
amended complaints when two criteria are satisfied: 1) no responsive pleading has been
filed, and 2) the first amended complaint is filed within thirty days of the entry of the
judgment, such that the judgment is not yet final and still “within the bosom” of the trial
court. 2021 WL 2661008, at *3 (quoting In re Shyronne D.H., 2011 WL 2651097, at *6).
Appellees argue that Justice is distinguishable from the present case, and that
Carson v. Daimlerchrysler Corp., No. W2001-03088-COA-R3-CV, 2003 WL 1618076
(Tenn. Ct. App. Mar. 19, 2003), is actually controlling. In Carson, a Chrysler customer
filed suit against the company over an allegedly defective vehicle. Id. at *1. She alleged
causes of action for unjust enrichment, indemnity, breach of warranty and violations of the
Tennessee Consumer Protection Act, and requested plaintiff class certification. Id. There
were no allegations in the plaintiff’s complaint that she was actually injured as a result of
her car’s defects. Id. DaimlerChrysler moved to dismiss for lack of subject matter
jurisdiction. Id. The trial court “dismissed the cause of action for mootness and based on
the primary jurisdiction doctrine. The trial court further addressed [the plaintiff’s]
substantive claims and awarded DaimlerChrysler’s motion to dismiss for failure to state a
claim.” Id. Although the timeline is not entirely clear from the opinion, at some point
following entry of the judgment, the plaintiff sought leave to amend her complaint to add
another plaintiff to the suit. Id. at *5. The trial court did not allow the amendment, which
the plaintiff challenged on appeal. Id. This Court agreed with the trial court, explaining
that a court’s decision to deny leave to amend is discretionary, but is “tempered by the
Tennessee Rules of Civil Procedure, which provide that leave to amend shall be freely
given when justice so requires.” Id. (citing Tenn. R. Civ. P. 15.01). The Carson court
noted that “[s]ome of the factors to be considered by the court in considering a motion to
amend include: undue delay in filing; lack of notice to the opposing party; bad faith by the
moving party, repeated failure to cure deficiencies by previous amendments, undue
prejudice to the opposing party, and futility of amendment.” Id. (citing Merriman v. Cont’l
Bankers Life Ins. Co., 599 S.W.2d 548, 559 (Tenn. Ct. App. 1979)). The court ultimately
held that justice did not require “the trial court to grant [the plaintiff’s] post-
judgment motion to amend the complaint to add an additional plaintiff[,]” explaining that
“[i]n order to take further action on this case, including granting [the plaintiff’s] requested
motion to amend, the trial court would first have had to set aside or vacate its final order
dismissing the cause of action.” Id. As “there was no basis to vacate the court’s judgment
dismissing this case[,]” we upheld the trial court’s ruling. Id.
Because the new version of Rule 15(a) cuts off the ability to amend as of right 21 days after
service of a Rule 12(b)(6) motion, this particular problem is not likely to occur.
Fed. R. Civ. P. 15.01, Rules and Commentary (Feb. 2022 Update) (footnotes omitted).
-7-
The circumstances of this case are more analogous to Justice than they are to
Carson. Indeed, procedurally, the case before us is almost indistinguishable from Justice.
While in Carson the issue on appeal was whether the trial court erred in denying the
plaintiff’s motion for leave to amend, here, Justice tells us that Appellant was not required
to seek leave to amend because no responsive pleading was ever filed by Appellees. 2021
WL 2661008, at *4. The analysis employed in Carson is inapposite, then, insofar as the
factors regarding whether leave to amend should be granted do not apply to a first amended
complaint filed as a matter of right. Id.
Appellees also suggest that the present case is different from Justice because
Appellees sought dismissal for reasons other than Appellant’s failure to properly state
claims, such as immunity and statutes of limitation. As such, Appellees note that
amendment would be futile. This was also true in Justice, as the defendant in that case
sought dismissal based on statutes of limitation and repose, and on the basis that statements
made during the course of judicial proceedings are shielded by immunity. Id. at *1. Futility
of amendment played no role in our analysis in Justice because the amended complaint at
issue was a first amended complaint, filed as a matter of right prior to service of a
responsive pleading. Nor did it matter in Justice that the plaintiff attempted,
unsuccessfully, to have the judgment of dismissal altered or amended pursuant to Rule 59.
Id. at *2.
Again, while we are cognizant of the practical issues created by Justice v. Nordquist,
the present case is highly analogous, and a plain reading of Tenn. R. Civ. P. 15.01 is
congruous with Justice. See Fair v. Cochran, 418 S.W.3d 542, 543 (Tenn. 2013) (noting
that “the rules of statutory construction guide” interpretation of the Rules of Civil
Procedure, and that “if the language is unambiguous, we simply apply the plain meaning
of the words used”). Further, Appellant has appropriately raised this issue in her principal
brief. Under these circumstances, we conclude that the trial court erred in determining that
Appellant’s first amended complaint “lacks any procedural effect.” As we did in Justice,
we must conclude that the outstanding first amended complaint renders this an appeal from
a non-final order, meaning this Court lacks subject matter jurisdiction, and the appeal must
be dismissed.
Conclusion
This Court lacks subject matter jurisdiction over this appeal, and the appeal is
dismissed. This case is remanded to the Circuit Court for Davidson County. Costs of this
appeal are taxed to the Appellees.
_________________________________
KRISTI M. DAVIS, JUDGE
-8- | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484411/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
ANNE BERQUIST, No. 84811
Petitioner, .
vs. asi a x
THE EIGHTH JUDICIAL DISTRICT f f= i}
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF NOV 16 2022
CLARK; THE HONORABLE LINDA cummpepin of
MARIE BELL; AND THE HONORABLE “CLE decouir
SUSAN JOHNSON, DISTRICT JUDGE, yh IpEPUTeeeRK
Respondents,
and
THE LAS VEGAS PHILHARMONIC;
AND JERI CRAWFORD,
Real Parties in Interest.
ORDER DENYING PETITION FOR WRIT OF MANDAMUS
This original petition for a writ of mandamus seeks
disqualification of a district court judge in a wrongful termination matter.
Petitioner Anne Berquist filed a wrongful termination suit against her
former employer, real party in interest the Las Vegas Philharmonic (the
LVP) and its board member, real party in interest Jeri Crawford, allevine
various fraud and contract-based claims. After the case was reassigned to
Judge Susan Johnson, she conducted a hearing on the LVP and Crawford’s
joint motion to dismiss. During that hearing, Judge Johnson made
comments about her knowledge of the LVP’s existence when she was in high
school and suggesting that the LVP’s longevity in the community was
indicative of it being a “healthy organization.” Judge Johnson then granted
the motion to dismiss, in part, dismissing all but one of Berquist’s claims.
Berquist moved to disqualify Judge Johnson, arguing that her comments at
the motion to dismiss hearing indicated that she used extrajudicial
Supreme Count
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en
knowledge in rendering her decision, which demonstrated bias in favor of
the LVP. Chief Judge Linda Bell denied the motion, finding that Berquist
did not establish sufficient factual or legal grounds for disqualification.
Berquist filed the instant petition, arguing that the district court applied
the wrong legal standard when ruling on her motion, and this court ordered
real parties in interest to file an answer.
A writ of mandamus “is available to compel the performance of
an act that the law requires... or to control an arbitrary or capricious
exercise of discretion.” NRS 34.160; Intl Game Tech., Inc. v. Second
Judicial Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008) (same).
Although “a petition for a writ of mandamus is the appropriate vehicle to
seek disqualification of a judge,” Ivey v. Eighth Judicial Dist. Court, 129
Nev. 154, 158, 299 P.3d 354, 357 (2013), “[p]etitioner[ | carr[ies] the burden
of demonstrating that extraordinary relief is warranted.” Pan v. Eighth
Judicial Dist. Court, 120 Nev. 222, 228, 88 P.3d 840, 844 (2004); Smith v.
Eighth Judicial Dist. Court, 107 Nev. 674, 677, 818 P.2d 849, 851 (1991)
(observing that “the issuance of a writ of mandamus...is purely
discretionary with this court’). “[A] judge ...is presumed not to be biased,
and the burden is on the party asserting the challenge to establish sufficient
factual grounds warranting disqualification.” Goldman v. Bryan, 104 Nev.
644, 649, 764 P.2d 1296, 1299 (1988), overruled in part on other grounds by
Halverson v. Hardcastle, 123 Nev. 245, 265, 163 P.3d 428, 442-43 (2007). A
judge’s decision that there are no grounds for disqualification is “given
substantial weight and [will] not be overturned in the absence of a clear
abuse of discretion.” Id. Gnternal citation omitted).
Having reviewed the petition, answer, reply, and supporting
documents, we conclude that the district court did not err by denying
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Berquist’s disqualification motion. See PETA v. Bobby Berosini, Ltd., 111
Nev. 431, 438, 394 P.2d 337, 341 (1995) (explaining that whether a judge’s
“impartiality can reasonably be questioned under an_ objective
standard ...is a question of law” this court reviews de novo), overruled on
other grounds by Towbin Dodge, LLC v. Dist. Court, 121 Nev. 251, 112 P.3d
1063 (2005). We first reject Berquist’s argument that the district court
applied an incorrect legal standard when considering her motion. See
Williams v. Waldman, 108 Nev. 466, 471, 836 P.2d 614, 617-18 (1992) (“[I]n
reaching a determination, the district court must apply the correct legal
standard.”). Because Judge Johnson’s alleged bias stemmed from an
extrajudicial source, the “objective reasonable person” standard set forth in
Ybarra v. State, 127 Nev. 47, 51, 247 P.2d 269, 272 (2011) applied, and the
district court’s order made clear that it was applying that standard in its
analysis.' See id. (explaining that the test for evaluating a judge’s
impartiality is “whether a reasonable person, knowing all the facts, would
harbor reasonable doubts about [the judge’s] impartiality.” (quoting PETA,
111 Nev. at 438, 394 P.2d at 341)). We further agree with the district court
that there is nothing in the record to suggest that Judge Johnson’s remarks
indicate an “improper bias or prejudice [because] they [do not] show that
[she] has closed...her mind to the presentation of all the evidence.”
Cameron v. State, 114 Nev. 1281, 1283, 968 P.2d 1169, 1171 (1998). We
cannot conclude that Judge Johnson’s comment about the LVP’s long-
1While we agree with Berquist that the standard pronounced in
Kirksey v. State, 121 Nev. 980, 1005-06, 923 P.2d 1102, 1118 (1996), differs
from the reasonable person standard set forth in Ybarra, 127 Nev. at 51,
247 P.2d at 272, this court recently reaffirmed that the Kirksey standard
applies when the judge “gained knowledge of... alleged prejudicial facts
while acting in her official capacity.” Canarelli v. Eighth Judicial Dist.
Court, 138 Nev., Adv. Op. 12, 506 P.3d 334, 339 (2022).
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standing presence in the Las Vegas community, without more, “would cause
an objective person reasonably to doubt [her] impartiality.” Ybarra, 127
Nev. at 52, 247 P.3d at 272; cf. Jacobson v. Manfredi by Manfredi, 100 Nev.
226, 230, 679 P.2d 251, 254 (1984) (providing that disqualification is not
warranted “merely because [the judge] knows one of the parties’). Because
Berquist failed to meet her burden of demonstrating that disqualification
was warranted, Goldman, 104 Nev. at 649, 764 P.2d at 1299, we are not
convinced that our extraordinary intervention is warranted. Accordingly,
we
ORDER the petition DENIED.?
oe aha. J.
Pieris
Ab gn8 J
Stiglich
cc: Hon. Linda Marie Bell
Hon. Susan Johnson, District Judge
Gibson Lexbury LLP
McDonald Carano LLP/Las Vegas
Jolley Urga Woodbury Holthus
Eighth District Court Clerk
2We decline to address Berquist’s argument that Judge Johnson’s
rulings on the motion to dismiss were clearly erroneous, as there is no
evidence that her ruling on the merits of that motion was influenced by her
extrajudicial knowledge of the LVP’s existence. See Whitehead v. Nev.
Comm’n on Judicial Discipline, 110 Nev. 380, 428 n.45, 873 P.2d 946, 976
n.45 (1994) (stating “the rule that a disqualifying bias must stem from an
extrajudicial source and result in an opinion on the merits”).
8The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
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(0) 19578 eB | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484419/ | NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
MALAY'JA D.,
Appellant,
v.
DEPARTMENT OF CHILD SAFETY, Z.B.,
Appellees.
No. 1 CA-JV 22-0134
FILED 11-17-2022
Appeal from the Superior Court in Maricopa County
No. JD40045
The Honorable Todd F. Lang, Judge
AFFIRMED
COUNSEL
Maricopa County Public Advocate, Mesa
By Suzanne W. Sanchez
Counsel for Appellant
Arizona Attorney General′s Office, Tucson
By Michelle R. Nimmo
Counsel for Appellee
MALAY'JA D. v. DCS, Z.B.
Decision of the Court
MEMORANDUM DECISION
Judge James B. Morse Jr. delivered the decision of the Court, in which
Presiding Judge Jennifer M. Perkins and Judge Michael J. Brown joined.
M O R S E, Judge:
¶1 Malay'ja D. ("Mother") appeals from the juvenile court's order
terminating her parental rights. For the following reasons, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 Mother and Zerion B. ("Father") are the biological parents of
Z.B., who was born in May 2020. DCS became involved with the family
because both Z.B. and Mother tested positive for THC at the time of Z.B.'s
birth.
¶3 Mother admitted to smoking marijuana throughout the
pregnancy. Father acknowledged that he knew about the marijuana use
but did not intervene. Mother also disclosed that she suffers from severe
anxiety, and Z.B.'s paternal grandmother ("Grandmother") indicated that
Mother may also suffer from bipolar disorder.
¶4 In October 2020, DCS filed a dependency petition based on
Mother's substance abuse and mental-health issues. But DCS did not
remove Z.B. from the home at that time.
¶5 Two months later, Mother and Father got into a physical fight.
Grandmother called the police and took Z.B. to stay with his aunt. Mother
and Father were both arrested. Following the incident, DCS removed Z.B.
from his parents' custody and placed him in Grandmother's care for the
remainder of the dependency.
¶6 Mother did not contest the dependency petition, and Z.B. was
adjudicated dependent in January 2021. At that time, DCS indicated that
reunification would require the parents to: (1) establish a safe and stable
home; (2) abstain from abusing illegal substances or prescription drugs; and
(3) maintain a home environment that is free from domestic violence.
¶7 Over the course of the dependency, DCS provided Mother
with substance-abuse assessments and referrals for supervised visitation,
2
MALAY'JA D. v. DCS, Z.B.
Decision of the Court
parent-aide services, and substance-abuse testing and treatment. During
Mother's initial substance-abuse assessment, providers referred her for
additional domestic-violence counseling.
¶8 Mother did not participate in the required substance-abuse
treatment, she consistently avoided substance-abuse testing, and tested
positive for THC when she did participate. Mother repeatedly cancelled
parent-aide sessions and supervised visits to the point she had no
supervised visits with Z.B. in 2021. Mother also failed to act on the referral
for domestic-violence counseling.
¶9 In June 2021, Mother unsuccessfully petitioned the court to
eliminate the requirement for substance-abuse testing and treatment, and
parent-aide services.
¶10 Later that month, without permission, Mother took Z.B. from
Grandmother and did not return him until police intervened. Two months
later, she again took Z.B. without permission while he was on vacation with
Grandmother in Pennsylvania. This time, Mother did not return the child,
but police in Pennsylvania eventually located her, retrieved Z.B., and
arrested her and Father for kidnapping. Pennsylvania authorities
incarcerated Mother for three months. She was released, but the record is
not clear on the ultimate resolution of the charges against Mother.
¶11 After her release, Mother still failed to participate in the
available services. In December 2021, DCS moved for termination under
the nine-month time-in-care ground.
¶12 In April 2022, the juvenile court conducted a termination trial
and, in May 2022, issued an order terminating Mother's parental rights. The
court found that DCS failed to provide adequate services to address the
domestic-violence concerns and declined to consider domestic violence as
a circumstance causing the out-of-home placement. However, the court
found DCS had provided diligent efforts to address Mother's substance-
abuse and mental-health issues.
¶13 The juvenile court also found that termination would be in
Z.B.'s best interests because: (1) Grandmother was willing and able to adopt
him; (2) adoption would provide him with the added benefit of
permanency and stability; and (3) placement with Grandmother would
allow him to maintain his relationships with other family members.
¶14 Mother timely appealed the termination order. We have
jurisdiction under A.R.S. §§ 8-235 and 12-120.21(A).
3
MALAY'JA D. v. DCS, Z.B.
Decision of the Court
DISCUSSION
¶15 Mother argues that the juvenile court erred in finding that
DCS met its diligent efforts burden under the time-in-care ground. She also
claims the record below was insufficient to support a finding that
termination of parental rights was in Z.B.'s best interests. We disagree.
¶16 Parents possess a fundamental right in the custody and
control of their children, but that right is not absolute. Michael J. v. Ariz.
Dep't of Econ. Sec., 196 Ariz. 246, 248-49, ¶¶ 11-12 (2000). Termination of
parental rights is not favored and "generally should be considered only as
a last resort." In re Maricopa Cnty. Juv. Action No. JS-500274, 167 Ariz. 1, 4
(1990).
¶17 This court views the evidence and reasonable inferences to be
drawn from it in the light most favorable to affirming the juvenile court's
order. Ariz. Dep't of Econ. Sec. v. Matthew L., 223 Ariz. 547, 549, ¶ 7 (App.
2010). We review the juvenile court's termination decision for an abuse of
discretion and will affirm if reasonable evidence supports the court's
findings. Mary Lou C. v. Ariz. Dep't of Econ. Sec., 207 Ariz. 43, 47, ¶ 8 (App.
2004). But we review de novo "legal issues requiring the interpretation and
application of § 8-533." Jessie D. v. Dep't of Child Safety, 251 Ariz. 574, 580, ¶
10 (2021) (quoting Ariz. Dep't of Econ. Sec. v. Rocky J., 234 Ariz. 437, 440, ¶ 12
(App. 2014)).
I. Diligent Efforts.
¶18 Mother claims that DCS failed to prove diligent efforts
because it did not provide her with domestic-violence services.
¶19 To pursue termination under the time-in-care ground, DCS
must make diligent efforts to provide parents with appropriate
reunification services. A.R.S. § 8-533(B)(8). What constitutes a diligent
effort will vary by case, but DCS must – at the least – provide services that
have a reasonable prospect of success in remedying the circumstances
causing the child's out-of-home placement. Donald W. v. Dep't of Child
Safety, 247 Ariz. 9, 23, ¶ 50 (App. 2019). DCS is not required to "provide
every conceivable service" or to "undertake rehabilitative measures that are
futile," but it must "'undertake measures with a reasonable prospect of
success' in reuniting the family." Jordan C. v. Ariz. Dep't of Econ. Sec., 223
Ariz. 86, 94, ¶ 20 (App. 2009) (quoting Mary Ellen C. v. Ariz. Dep't of Econ.
Sec., 193 Ariz. 185, 192, ¶¶ 34, 37 (App. 1999)).
4
MALAY'JA D. v. DCS, Z.B.
Decision of the Court
¶20 In this case, the juvenile court found that DCS failed to
provide adequate services to remedy Mother's issues with domestic
violence. Accordingly, it discounted domestic violence as a circumstance
causing the out-of-home placement and found that termination was
appropriate given the other issues that Mother had refused to remedy. If
termination was appropriate without consideration of the domestic
violence, then the court did not abuse its discretion when it implicitly found
that providing domestic-violence services was futile because they would
not have reunited the family. Cf. id. (noting that measures are not futile if
they have "'a reasonable prospect of success' in reuniting the family").
Mother does not challenge the court's findings related to the other
circumstances causing the out-of-home placement.
¶21 Instead, Mother argues that the juvenile court can only
determine futility through the process contained in A.R.S. § 8-846 and Rule
57. We have previously rejected this argument. See Christina G. v. Ariz.
Dep't of Econ. Sec., 227 Ariz. 231, 236, ¶ 21 (App. 2011) (finding that failure
to follow § 8-846 and Rule 57 did not entitle a mother to reversal of the
juvenile court's termination order); see also Vanessa H. v. Ariz. Dep't of Econ.
Sec., 215 Ariz. 252, 256, ¶ 20 (App. 2007) (finding that reunification services
on behalf of the mother would have been futile without considering either
provision). While the purpose behind these two provisions "is to encourage
[DCS] to seek a determination on futility when it appears that reunification
services will no longer assist the parent," their language does not suggest
"that the juvenile court is prohibited from making a determination after the
severance hearing that additional services would have been futile."
Christina G., 227 Ariz. at 237, ¶ 25.
¶22 If DCS does not follow the § 8-846 procedure, it must prove
by clear and convincing evidence at trial that additional rehabilitative
services would have been futile. Mary Ellen C., 193 Ariz. at 193, ¶ 42 (App.
1999). Reasonable evidence supports the juvenile court's finding that DCS
met its burden. The juvenile court did not abuse its discretion.
II. Best Interests of the Child.
¶23 After finding clear and convincing evidence establishing one
of the statutory grounds for termination, the court must determine by
preponderance of the evidence that termination is in the child's best
interests. Alma S. v. Dep't of Child Safety, 245 Ariz. 146, 149-50, ¶ 8 (2018).
At this stage, "the juvenile court's primary concern . . . is the 'child's interest
in stability and security.'" Timothy B. v. Dep't of Child Safety, 252 Ariz. 470,
478, ¶ 31 (2022) (quoting Alma S., 245 Ariz. at 150, ¶ 12). "[T]ermination is
5
MALAY'JA D. v. DCS, Z.B.
Decision of the Court
in the child's best interests if either: (1) the child will benefit from severance;
or (2) the child will be harmed if severance is denied." Alma S., 245 Ariz. at
150, ¶ 13.
¶24 Citing Timothy B., Mother argues that the court's best-interests
finding was insufficient because the court provided no case-specific
evidence that adoption benefitted the child more than permanent
guardianship. 252 Ariz. at 478-79, ¶ 34. Her argument misinterprets that
case.
¶25 In Timothy B., the supreme court recognized that a child's
interest in termination may be "a relevant factor under the guardianship
statute" and remanded to the juvenile court to consider whether permanent
guardianship would be appropriate under the length-of-sentence ground
for termination. Id. But a child's interest in termination is relevant to the
guardianship determination because the court may not establish a
permanent guardianship unless "[t]he likelihood that the child would be
adopted is remote or termination of parental rights would not be in the
child's best interests." A.R.S. § 8-871(A)(4). There is no inverse requirement
in the termination statute. See A.R.S. § 8-533.
¶26 In conducting its best-interests inquiry, the court must still
"consider the totality of the circumstances existing at the time of the
severance determination." Alma S., 245 Ariz. at 150-51, ¶ 13. In some cases,
the totality of the circumstances will include a child's interest in
maintaining the parental relationship through permanent guardianship.
See Timothy B., 252 Ariz. at 478, ¶ 31 (noting that courts should consider
whether a child's interests "are served by termination or maintenance of the
parent-child relationship"); see also Santosky v. Kramer, 455 U.S. 745, 760
(1982) (recognizing a child's interest in preserving the natural relationship
with their parents). But that interest is diminished "once a determination
of unfitness has been made," Alma S., 245 Ariz. at 151, ¶ 15, and can be
overcome by other factors favoring termination, Dominique M. v. Dep't of
Child Safety, 240 Ariz. 96, 98-99, ¶ 12 (App. 2016). The juvenile court
properly considered guardianship before finding that Z.B.'s best interests
favored termination. Accordingly, we affirm.
6
MALAY'JA D. v. DCS, Z.B.
Decision of the Court
CONCLUSION
¶27 For the above stated reasons, we affirm the decision of the
juvenile court.
AMY M. WOOD • Clerk of the Court
FILED: AA
7 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484432/ | IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Benedict J. Doe, :
Petitioner :
:
v. : No. 477 C.D. 2022
:
City of Philadelphia (Workers’ :
Compensation Appeal Board), :
Respondent : Submitted: September 9, 2022
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ELLEN CEISLER, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE CEISLER FILED: November 17, 2022
Benedict J. Doe (Claimant) petitions this Court for review of the April 20,
2022 order of the Workers’ Compensation Appeal Board (Board) affirming the
decision of a workers’ compensation judge (WCJ), which granted the City of
Philadelphia’s (Employer) petition to modify Claimant’s temporary total disability
(TTD) benefits based on the results of an impairment rating evaluation (IRE). The
IRE was performed in accordance with the Workers’ Compensation Act’s (Act)
Section 306(a.3),1 a provision which Claimant argues cannot be properly applied to
1
Act of June 2, 1915, P.L. 736, as amended, added by Act of October 24, 2018, P.L. 714
No. 111 (Act 111), 77 P.S. § 511.3. Section 306(a.3)(1) of the Act requires that an employee who
has received total disability compensation for 104 weeks submit to an IRE pursuant to the
American Medical Association’s “Guides to the Evaluation of Permanent Impairment,” 6th edition
(second printing April 2009) (AMA Guides), for the purpose of determining his degree of whole-
body impairment (WBI) due to the compensable injury. 77 P.S. § 511.3(1). If the IRE results in
a WBI that is less than 35%, the employee shall receive partial disability benefits under Section
306(b) of the Act. 77 P.S. § 511.3(2). Section 306(b)(1) of the Act limits a claimant’s receipt of
partial disability benefits to 500 weeks. 77 P.S. § 512(1).
injuries that occurred before its effective date of October 24, 2018. Claimant also
argues that Act 111, which repealed former Section 306(a.2)2 of the Act and replaced
it with Section 306(a.3), is an unconstitutional delegation of legislative authority.
After review, we affirm.
I. Background
The factual and procedural history of this matter is not in dispute. Claimant
sustained injuries to his hands and face resulting from an electric shock on October
25, 2013, which occurred in the course of his employment. Certified Record (C.R.),
Item No. 4, WCJ Decision, Finding of Fact (F.F.) No. 1. Employer recognized the
injuries via a Notice of Compensation Payable and began paying TTD benefits. Id.
On February 19, 2021, Employer submitted a petition to modify Claimant’s
benefits from TTD to partial, based on a January 19, 2021 IRE. C.R., Item No. 2.
That examination, conducted in accordance with the 6th edition of the AMA Guides,
assigned Claimant a WBI rating of 19%. C.R., Item No. 4, F.F. No. 3(h). In an
October 29, 2021 decision, a WCJ granted the modification petition and changed
Claimant’s benefits to partial status as of January 19, 2021, the date of the IRE. Id.,
Conclusion of Law No. 2. The WCJ declined to address the issue of Act 111’s
constitutionality, but noted that it was preserved for appeal. Id., F.F. No. 8.
Claimant appealed to the Board, which affirmed the WCJ. C.R., Item No. 8,
Board Opinion at 5. Regarding Claimant’s constitutional arguments, the Board
noted that Act 111’s constitutionality has been upheld by this Court in Pierson v.
Workers’ Compensation Appeal Board (Consol Pennsylvania Coal Company LLC),
252 A.3d 1169 (Pa. Cmwlth. 2021), Rose Corporation v. Workers’ Compensation
Appeal Board (Espada), 238 A.3d 551 (Pa. Cmwlth. 2020), and Pennsylvania AFL-
2
Added by the Act of June 24, 1996, P.L. 350, repealed by Act 111.
2
CIO v. Commonwealth, 219 A.3d 306 (Pa. Cmwlth. 2019), aff’d, (Pa., No. 88 MAP
2019, filed August 18, 2020). Id. at 3-4. This appeal followed.3
II. Issues
Claimant argues that Act 111 cannot be retroactively applied to injuries, such
as his, that occurred before October 24, 2018, the date when Act 111 became
effective. He also argues that Act 111 is an unconstitutional delegation of the
General Assembly’s legislative authority.
III. Discussion
In Protz v. Workers’ Compensation Appeal Board (Derry Area School
District), 161 A.3d 827, 830 (Pa. 2017), our Supreme Court struck down former
Section 306(a.2) of the Act as an unconstitutional delegation of legislative authority,
as it simply provided that an IRE would be conducted pursuant to “the most recent
edition” of the AMA Guides. The General Assembly subsequently enacted Act 111,
which, in relevant part, repealed the unconstitutional provision and replaced it with
Section 306(a.3), 77 P.S. § 511.3. Rather than referring vaguely to a “most recent
edition,” Section 306(a.3) specifies that an IRE should be conducted in accordance
with the 6th edition (second printing) of the AMA Guides. 77 P.S. §511.3(2).
Claimant argues that Act 111 contains no retroactivity provision, and that it
therefore cannot be retroactively applied to claims originating before it became
effective on October 24, 2018. Since Claimant’s injury occurred on October 25,
2013, he maintains that his benefits could not have been properly modified due to
the January 19, 2021 IRE.
3
Our standard of review is limited to determining whether the WCJ’s findings of fact were
supported by substantial evidence, whether an error of law was committed, or whether
constitutional rights were violated. Lehigh Specialty Melting, Inc. v. Workers’ Comp. Appeal Bd.
(Bosco), 260 A.3d 1053, 1058 n.3 (Pa. Cmwlth. 2021).
3
As the Board noted, this Court has already considered and rejected that
argument in Pierson, 252 A.3d at 1180. In that case, the claimant sustained a
workplace injury on August 13, 2014. Id. at 1171. On December 21, 2018, his
employer filed a petition to modify the claimant’s TTD benefits based on an IRE
that had been performed two days previously. Id. at 1172. The claimant argued that
Act 111 could not “be constitutionally applied in a retroactive manner,” but only to
“claims that . . . originated on or after the date of the passage of the present IRE
mechanism, October 24, 2018.” Id. at 1174. We disagreed, explaining that “the
104-week and credit provisions of Act 111 were explicitly given retroactive effect
by the clear language used by the General Assembly.”4 Id. at 1180.
Claimant does not explain why the facts in the instant matter are
distinguishable from those in Pierson; instead, he merely repeats the assertions made
by the claimant in that previous case. In the absence of any basis for distinguishing
the instant matter from Pierson, we reject Claimant’s argument as lacking in merit.
We turn now to Claimant’s argument that Act 111 was an unconstitutional
delegation of the General Assembly’s legislative authority. In support, Claimant
relies on the Supreme Court’s observation in Protz that “the General Assembly may
delegate regulatory power to responsible governmental agencies, but not to private
persons.” 161 A.3d at 837 (citing Olin Matheson Chem. Corp. v. White Cross Stores,
Inc., 199 A.2d 266, 267-68 (Pa. 1964)). Claimant maintains that Act 111
“uncritically adopts the 6th edition[, second printing,] of the AMA Guides while
4
Section 3(2) of Act 111 states that, for the purposes of determining the total number of
weeks of partial disability compensation payable under Section 306(a.3)(7) of the Act, an insurer
shall be given credit for weeks of partial disability compensation paid prior to the Act’s effective
date. Pierson, 252 A.3d at 1174 (citing 77 P.S. § 511.3, Historical and Statutory Notes).
4
leaving its authors politically unaccountable,” thereby replicating former Section
306(a.2)’s constitutional infirmity. Claimant’s Brief at 8.
This argument, too, has already been considered and rejected by this Court in
AFL-CIO, 219 A.3d at 306. In that case, the petitioner labor union argued that
Section 306(a.3), no less than its repealed predecessor, unconstitutionally delegated
legislative authority to the AMA, a private entity. Id. at 315. We disagreed, holding
that there was no delegation to the AMA in Section 306(a.3). Id. We explained that
what rendered former Section 306(a.2) unconstitutional was its adoption, “sight
unseen of future standards or editions, without guidance by the General Assembly
as to the basic policy decisions and standards to restrain the discretion of the entity
setting those standards that is problematic.” Id. (emphasis in original). In enacting
Section 306(a.3), by contrast, the General Assembly adopted “as its own a particular
set of standards which already [were] in existence at the time of its adoption.” Id.
at 316.
Claimant, once again, does not explain why the facts in the instant matter are
distinguishable from those set forth in AFL-CIO, or why our decision in that matter
was erroneous. For the foregoing reasons, we affirm the Board.
____________________________
ELLEN CEISLER, Judge
5
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Benedict J. Doe, :
Petitioner :
:
v. : No. 477 C.D. 2022
:
City of Philadelphia (Workers’ :
Compensation Appeal Board), :
Respondent :
ORDER
AND NOW, this 17th day of November, 2022, the order of the Workers’
Compensation Appeal Board, dated April 20, 2022, is hereby AFFIRMED.
____________________________
ELLEN CEISLER, Judge | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484434/ | 21-1669
Badar v. Swissport USA, Inc.
IN THE
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
____________________
August Term, 2022
(Argued: September 29, 2022; Decided: November 17, 2022)
Docket No. 21-1669
____________________
CHAUDHRY BADAR, ALIA DAVARIAR, MUHAMMAD S HAFQAT, BALQEES BADAR,
BILAL BADAR,
Plaintiffs-Appellants,
v.
SWISSPORT USA, INC., PAKISTAN INTERNATIONAL AIRLINES,
Defendants-Cross Defendants-Appellees,
v.
THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY,
Defendant-Cross Claimant.
____________________
Before: JACOBS, BIANCO, and MENASHI, Circuit Judges.
Pakistan International Airlines (“PIA”) failed to transport the body of
Nauman Badar to Pakistan for burial due to a miscommunication by employees
of Swissport USA, PIA’s cargo loading agent. Nauman Badar’s family members
sued PIA and Swissport in New York state court under state law; PIA removed
the action to the United States District Court for the Eastern District of New York
(Irizarry, J.). Following cross-motions for summary judgment and an evidentiary
hearing, the district court held that plaintiffs’ claims are preempted by the
Montreal Convention and dismissed the suit. On appeal, plaintiffs argue that the
Montreal Convention, which preempts state-law claims arising from delayed
cargo, does not apply because human remains are not “cargo” for purposes of
the Montreal Convention and because their particular claims are not for “delay.”
We AFFIRM.
____________________
ANNETTE G. HASAPIDIS, Hasapidis
Law Offices, Ridgefield, CT (Jordan
Merson, Merson Law, PLLC, New York,
NY, on the brief), for Plaintiffs-
Appellants.
JOHN MAGGIO, Condon & Forsyth
LLP, New York, NY, for Defendant-
Appellee Pakistan International
Airlines.
GARTH AUBERT (Thomas Pantino, on
the brief), Fitzpatrick & Hunt, Pagano,
Aubert, LLP, New York, NY, for
Defendant-Appellee Swissport USA,
Inc.
DENNIS JACOBS, Circuit Judge:
When Nauman Badar died, his family arranged for Pakistan International
Airlines (“PIA”) to transport his body to Pakistan for burial in his ancestral
home; but the body never made it onto the plane. After his remains were
located, Nauman was buried in Maryland. The plaintiffs in this suit--Nauman’s
parents, brothers, and sister--sued PIA and its cargo loader, Swissport USA, Inc.,
for damages under state law. The district court dismissed on the ground of
preemption by federal treaty: the Convention for the Unification of Certain Rules
for International Carriage by Air, May 28, 1999, S. Treaty Doc. No. 106–45, 2242
U.N.T.S. 309 (the “Montreal Convention”).
The Montreal Convention sets forth a comprehensive liability regime
governing “international carriage of persons, baggage or cargo performed by
aircraft.” Montreal Convention art. 1(1). The Convention preempts other civil
claims within its scope. Id. art. 29. Among the injuries covered by the
Convention is “damage occasioned by delay in the carriage by air of . . . cargo.”
Id. art. 19. On appeal, plaintiffs argue that the Montreal Convention does not
apply because human remains are not “cargo” and because their claims arise
from complete non-performance rather than “delay”--and that the district court
1
erred in granting summary judgment after a limited (and flawed) evidentiary
hearing.
We affirm the judgment. Human remains are cargo for purposes of the
Montreal Convention; and on the facts found by the district court, the claims
arise from delay. The claims are therefore preempted by the Montreal
Convention.
I
Beginning in 1933, the liability of international air carriers has been
governed by international agreement rather than the local law of individual
nations. Over the years, the comprehensive system of liability created by the
Warsaw Convention (the Convention for the Unification of Certain Rules
Relating to International Transportation by Air1) fragmented into a “hodgepodge
of supplementary amendments and intercarrier agreements.” Ehrlich v. Am.
Airlines, Inc., 360 F.3d 366, 371 n.4 (2d Cir. 2004) (citation omitted). The result
was a “patchwork of liability regimes around the world.” Letter of Submittal, S.
Treaty Doc. No. 106-45, 1999 WL 33292734, at *6 (“Letter of Submittal”).
1
See Convention for the Unification of Certain Rules Relating to International
Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T.S. No. 876, reprinted in note
following 49 U.S.C. § 40105.
2
In 1999, the International Civil Aviation Organization convened a
conference in Montreal to fix the Warsaw Convention and “creat[e] a
modernized uniform liability regime for international air transportation.” Id.;
accord Cohen v. Am. Airlines, Inc., 13 F.4th 240, 244 (2d Cir. 2021). The resulting
“Montreal Convention,” which entered into force on November 4, 2003, e.g.,
Ehrlich, 360 F.3d at 372, hews closely to the text of its predecessor; accordingly,
its “provisions may be analyzed in accordance with case law arising from
substantively similar provisions of its predecessor, the Warsaw Convention.”
Cohen, 13 F.4th at 245.
The Montreal Convention “applies to all international carriage of persons,
baggage or cargo performed by aircraft,” Montreal Convention art. 1(1), and
provides for passengers and shippers to recover for certain injuries, id. arts. 17–
19. As relevant here, the Convention provides that “[t]he carrier is liable for
damage occasioned by delay in the carriage by air of passengers, baggage or
cargo,” id. art. 19, but caps recovery for such damage to cargo at a specified “sum
of . . . Special Drawing Rights per kilogramme,”2 id. art. 22(3). The Convention
2
“Special Drawing Rights represent an artificial ‘basket’ currency developed by
the International Monetary Fund for internal accounting purposes.” Letter of
Transmittal, S. Treaty Doc. No. 106-45, 1999 WL 33292734, at *2. The current value of
3
does not, however, limit or preempt claims for total non-performance of a
contract of carriage: a bald refusal to transport or a repudiation of the carriage
contract is not “delay” for purposes of the Convention. See Wolgel v. Mexicana
Airlines, 821 F.2d 442, 444 (7th Cir. 1987); In re Nigeria Charter Flights Cont.
Litig., 520 F. Supp. 2d 447, 453 (E.D.N.Y. 2007); Paradis v. Ghana Airways Ltd.,
348 F. Supp. 2d 106, 113–14 (S.D.N.Y. 2004), aff’d, 194 F. App’x 5 (2d Cir. 2006).
To achieve a uniform liability regime, the Montreal Convention, like the
Warsaw Convention before it, preempts “all state law claims that fall within [its]
scope.” See Shah v. Pan Am. World Servs., Inc., 148 F.3d 84, 97–98 (2d Cir. 1998)
(cleaned up); see also Cohen, 13 F.4th at 245 (recognizing that when a plaintiff’s
“claims fall under the Montreal Convention, . . . any remedy must be had
pursuant to that Convention”). The self-executing Montreal Convention creates
a federal cause of action for claims within its scope. See Baah v. Virgin Atl.
Airways Ltd., 473 F. Supp. 2d 591, 593 (S.D.N.Y. 2007); see also S. Exec. Rep. No.
108–8, at 3 (2003) (“The Montreal Convention, like the Warsaw Convention, will
provide the basis for a private right of action in U.S. courts in matters covered by
one SDR is $1.31. International Monetary Fund, SDR Valuation (updated Nov. 15,
2022), https://www.imf.org/external/np/fin/data/rms_sdrv.aspx.
4
the Convention.”). That federal cause of action is the exclusive means for
pursuing such claims. “Where an action for damages falls within one of the
Montreal Convention’s three damage provisions, ‘the Convention provides the
sole cause of action under which a claimant may seek redress for his injuries.’”
Seagate Logistics, Inc. v. Angel Kiss, Inc., 699 F. Supp. 2d 499, 505 (E.D.N.Y. 2010)
(quoting Weiss v. El Al Isr. Airlines, Ltd., 433 F. Supp. 2d 361, 365 (S.D.N.Y.
2006)).
II
Nauman Badar died suddenly in his apartment in Astoria, Queens. J.A.
341–42. His family decided to bury his remains in Pakistan, their ancestral home.
E.g., J.A. 224–25, 314, 348–49, 1218. Accordingly, Nauman’s brother Bilal Badar
arranged for a funeral home, Muslim Funeral Services, to prepare the body for
burial and arrange carriage to Pakistan. J.A. 344–46. In accordance with Islamic
practice, the funeral home used no chemicals to preserve the body, which
necessitated burial as fast as possible. See J.A. 223–24, 279. Nauman died on
October 25, 2017; in consultation with Bilal, the funeral home arranged for
transport of the remains aboard Pakistan International Airlines Flight 712, a
5
direct flight from New York to Lahore departing October 28, 2017. J.A. 224, 1219.
Bilal purchased a ticket on the same flight. J.A. 1220.
On the day of departure, the funeral home delivered Nauman’s body to
JFK International Airport to be loaded onto Flight 712. J.A. 354. Bilal repeatedly
sought and received confirmation from PIA employees that Nauman’s body was
on the plane. J.A. 1220–21. However, due to a miscommunication among
Swissport’s cargo loaders, J.A. 744, the pallet containing Nauman’s body and the
body of one other individual was not on board when the plane took off, e.g., J.A.
1260.
When Flight 712 landed in Lahore, Bilal met several relatives to claim the
remains at PIA’s Lahore cargo office. J.A. 363–64, 1224. There, the family
learned that the body was not on the plane and that its whereabouts were
unknown. J.A. 1224–25. For the next several hours, Bilal “called every single
number [he] could find on the web” trying to discover what had happened to the
remains, but he was unable to reach anyone at PIA in New York or to locate his
brother’s body. J.A. 1241; see also J.A. 369, 1225. Around dawn in Lahore the
following day, a text message from the funeral home informed Bilal that
6
Nauman’s body had been located at JFK and that the funeral home had taken
custody of the body and placed it in cold storage. J.A. 1227–28.
The family debated what to do next and decided to bury Nauman in the
United States in order “[t]o get him to a final resting place as soon as possible.”
J.A. 378 (Bilal Dep.); see also J.A. 384. Bilal then booked seats for himself and his
brother and father on the next flight to New York. Back in the United States,
Bilal instructed the funeral home to transport Nauman’s body to a cemetery near
Bilal’s Maryland home, and the three men conducted a burial ceremony there on
November 1, 2017. J.A. 385–86, 1231.
This litigation began in October 2018: Nauman’s brothers Bilal Badar and
Muhammad Shafqat, his sister Alia Davariar, and his parents Chaudhry and
Balqees Badar filed suit in New York state court against PIA, Swissport, and the
Port Authority of New York and New Jersey. Notice of Removal ¶ 1, Badar v.
Swissport USA Inc., No. 18-6390 (E.D.N.Y. Nov. 9, 2018), Dkt. No. 1. They
alleged state-law claims arising from the failure to transport Nauman’s body on
PIA Flight 712, including loss of right of sepulcher, negligence, negligent
infliction of emotional distress, and breach of contract. Id., Ex. A. PIA, which is
majority-owned by the Pakistani government and therefore qualifies as a
7
“foreign state” under federal law, removed the suit to federal court pursuant to
28 U.S.C. § 1441(d). Id. ¶ 4. At no time have plaintiffs pled a claim under the
Montreal Convention.
After completion of discovery, plaintiffs voluntarily dismissed all claims
against the Port Authority. J.A. 9. The remaining defendants, PIA and
Swissport, moved for summary judgment on the ground of preemption under
the Montreal Convention. J.A. 141–61. Plaintiffs cross-moved for summary
judgment and to strike affirmative defenses, arguing that the Montreal
Convention does not apply because human remains are not “cargo” and because
their claims are for non-performance rather than “delay.” J.A. 791–803.
The district court denied both motions. Badar v. Swissport USA, Inc., 492
F. Supp. 3d 54 (E.D.N.Y. 2020). The court held that human remains are “cargo”
under the Montreal Convention, id. at 59–62, but concluded that “there is
insufficient evidence to enable [it] to decide,” id. at 65, whether plaintiffs’ claims
arose from delay or from non-performance because it was “unclear whether
Plaintiffs chose to secure substitute travel for the decedent’s remains or whether
Defendants offered alternate transportation for the remains,” id. at 63–64. Since
this issue was “a fact essential to determining the preemptive effect of Article 19
8
of the Montreal Convention,” the court ordered “an evidentiary hearing . . . to
develop the necessary facts to determine this threshold issue.” Id. at 64–65.
That hearing was conducted via video teleconference on February 10, 2021.
J.A. 16, 1197. Bilal Badar testified that “there was no communication from PIA”
and denied that PIA “ever offer[ed] [the family] an alternative when [his]
brother’s body was not initially transported to Pakistan,” J.A. 1232. His only
contact with PIA, Bilal testified, consisted of a brief phone call several days after
Nauman’s funeral. J.A. 1231–32; see also J.A. 387 (“I received a call from
[PIA] . . . . There was just [‘]I’m with PIA, this is what happened,[’] that’s pretty
much it.”).
PIA employee Paulette Cottone offered competing testimony that PIA
promptly offered to transport Nauman’s body to Pakistan on an Emirates flight
but that the Badar family declined. J.A. 1261. She based this testimony both on
her own “aware[ness] of everything that was going on” in PIA’s New York office
on the day in question, J.A. 1263, and on the fact that the family of the other
decedent left off Flight 712 received and accepted an offer of substitute
transportation, J.A. 1261, 1267, 1269. Defendants also argued that Ms. Cottone’s
testimony was consistent with an affidavit submitted by PIA employee Arbab
9
Hibatullah, J.A. 136–37, and with a contemporaneous email by Ms. Cottone’s
supervisor, Naseem Alavi, in which Mr. Alavi told a Swissport representative
that “[t]he bodies will now be transported to Pakistan by some other carrier,”
J.A. 742. See J.A. 1272–75.
The district court credited Ms. Cottone’s testimony while concluding that
plaintiffs’ “categorical[] den[ial] that PIA ever made an offer of alternative
transportation” was “not credible.” Badar v. Swissport USA, Inc., Civ. A. No. 18-
6390, 2021 WL 2382444, at *3 (E.D.N.Y. June 10, 2021). The email from Mr. Alavi
was cited as corroboration of Ms. Cottone’s testimony. Id. The evidentiary
hearing thus “provided sufficient evidence to conclude that PIA had offered
alternate transportation for Nauman Badar's remains.” Id.
On the basis of this factual finding, the district court held that PIA’s
conduct “did not constitute a complete nonperformance of contract because
Plaintiffs did not afford PIA an opportunity to transport the remains using
alternate transportation.” Id. at *4. Therefore, it concluded, the claims arise from
delay, such that “Article 19 of the Montreal Convention applies and preempts
Plaintiff[s’] breach of contract claim.” Id. The action was dismissed on June 10,
2021.
10
Plaintiffs timely appeal. J.A. 17. They argue that the Montreal Convention
does not apply because human remains are not “cargo” (see Section III), and
because their claims arose from non-performance (Section IV).
III
Whether the Montreal Convention applies to the international
transportation of human remains is a question of first impression in this Court.
The scope of the Montreal Convention is a matter of treaty interpretation,
which we review de novo. Fed. Republic of Nigeria v. VR Advisory Servs., Ltd.,
27 F.4th 136, 148 (2d Cir. 2022). “When interpreting a treaty, we begin with the
text of the treaty and the context in which the written words are used.” Cohen,
13 F.4th at 245 (quoting Ehrlich, 360 F.3d at 375). “The main task of any tribunal
which is asked to . . . interpret a treaty is to give effect to the expressed intention
of the parties, that is, their intention as expressed in the words used by them in
the light of the surrounding circumstances.” Mora v. New York, 524 F.3d 183,
193–94 (2d Cir. 2008) (internal quotation marks, citation, alterations, and
emphasis omitted). “Because a treaty ratified by the United States is not only the
law of this land but also an agreement among sovereign powers, [courts] have
traditionally considered as aids to its interpretation the negotiating and drafting
11
history . . . and the postratification understanding of the contracting parties.” El
Al Isr. Airlines, Ltd. v. Tsui Yuan Tseng, 525 U.S. 155, 167 (1999) (internal citation
omitted); accord Georges v. United Nations, 834 F.3d 88, 92–93 (2d Cir. 2016).
As the district court observed, “while the Montreal Convention itself does
not define ‘cargo,’ the term is generally defined to encompass any load conveyed
by a vessel.” Badar, 492 F. Supp. 3d at 62. Dictionary definitions confirm that
the fact of transportation is the essential quality of “cargo,” not any intrinsic
characteristic of that which is transported. See Cargo, Black’s Law Dictionary
(11th ed. 2019) (“Goods transported by a vessel, airplane, or vehicle”); Cargo,
Merriam-Webster’s Unabridged Dictionary (last accessed Nov. 15, 2022) (“the
lading or freight of a ship, airplane, or vehicle: the goods, merchandise, or
whatever is conveyed”); Cargo, Oxford English Dictionary (2d ed. 1989) (“the
freight or lading of a ship”).
Plaintiffs urge a narrower definition, that “cargo” refers only to
“commercial products” or other items to which society attaches no special
significance. See Appellants’ Br. at 27; Appellants’ Reply Br. at 7. But while raw
materials or commercial goods may be paradigmatic examples, the word cargo is
not so limited. It likewise applies to items invested with emotional, aesthetic,
12
cultural, or religious value. A corpse, which may be precious and venerated,
may still be deemed cargo when transported by air.
The designation of human remains as cargo should not be surprising to
carriers or consignors. The four major U.S. airlines ship human remains through
their cargo departments. 3 Nauman Badar’s body was to be loaded into the
plane’s cargo hold by a “cargo handling agent,” J.A. 547–48; Bilal Badar went to
the “cargo area to sign for and collect Nauman” in Lahore, J.A. 1224 (testimony of
Bilal Badar); and the transportation of the remains was arranged via air waybill,
a type of document used exclusively in the shipment of cargo. J.A. 138–39.
Plaintiffs assert that PIA “does not treat human remains as ordinary cargo,”
Appellant’s Br. at 29, but their main support is a statement from the airline’s
“Cargo Handling Manual,” J.A. 745.
An inclusive reading of “cargo” is especially appropriate here. Whereas
the Warsaw Convention referenced “passengers, baggage, and goods,” Warsaw
3
See American Airlines Cargo, Products, https://www.aacargo.com/ship/
products.html (last visited Nov. 15, 2022); Delta Cargo, Specialized Care,
https://www.deltacargo.com/Cargo/catalog/products/specialized-care (last visited Nov.
15, 2022); United Cargo, TrustUA, https://www.unitedcargo.com/en/us/products/
trustua.html (last visited Nov. 15, 2022); Southwest Cargo, Human Remains,
https://www.swacargo.com/swacargo_com_ui/learn/specialty-shipments/human-
remains (last visited Nov. 15, 2022).
13
Convention art. 1(1) (emphasis added), the Montreal Convention uses the term
“cargo” (which, if anything, is more expansive),4 implying that the Montreal
Convention applies to more than commercial goods. 5 Interpreting “cargo” to
include human remains is also consistent with the purposes of the Convention.
Like the Warsaw Convention before it, the principal aim of the Montreal
Convention is “to achieve uniformity of rules governing claims arising from
international air transportation.” El Al Isr. Airlines, 525 U.S. at 169 (cleaned up;
internal quotation marks and citation omitted); accord Letter of Submittal at *9.
The Convention should therefore be read to avoid lacunae in coverage and
promote uniform rules of liability. See Onyeanusi, 952 F.2d at 793. Excluding
items “not readily viewed as [cargo],” Johnson, 834 F.2d at 723, would impair
that uniformity. The drafters of the Convention created a single exemption for
4
The English version of the Montreal Convention is an “authentic” text of the
Convention, Montreal Convention, final clause, so courts may rely on the Convention’s
English terms without recourse to any another language, e.g., Elmar Giemulla, Final
Clause, in Montreal Convention at Final Clause-1 (Elmar Giemulla & Ronald Schmid
eds., 2017). Cf. Vienna Convention on the Law of Treaties art. 33(1), May 23, 1969, 1155
U.N.T.S. 331 (“When a treaty has been authenticated in two or more languages, the text
is equally authoritative in each language . . . .”). The Court therefore need not interpret
“cargo” to match the (slightly different) word used in the French text: “marchandises.”
5
Even prior to the adoption of the term ‘cargo’ in the Montreal Convention, the
Third and Ninth Circuits had held that human remains qualified as ‘goods’ under the
Warsaw Convention. See Johnson v. Am. Airlines, Inc., 834 F.2d 721, 723 (9th Cir. 1987);
Onyeanusi v. Pan Am., 952 F.2d 788, 791–93 (3d Cir. 1992).
14
objects otherwise classifiable as cargo: “postal items.” See Montreal Convention
art. 2. Courts should not create more.
Finally, plaintiffs observe that Article 22’s limitations on liability are
calculated based on the weight of the “cargo,” and they argue that weight-based
liability for human remains would produce an “absurd result in conflict with
society’s mores.” Appellants’ Br. at 38; see also Christopher Ogolla, Death Be
Not Strange: The Montreal Convention’s Mislabeling of Human Remains as
Cargo and Its Near Unbreakable Liability Limits, 124 Dick. L. Rev. 53, 89–90
(2019) (making a similar argument). In this particular situation, valuation based
on weight may be insensitive, macabre, or even opposed to our better nature, but
it is not absurd: the Convention itself mitigates any potential absurdity. Article
22’s weight-based limitation is a default rule, and consignors and carriers may
opt out: the default cap does not apply if the consignor “has made . . . a special
declaration of interest in delivery at destination and has paid a supplementary
sum if the case so requires,” in which event “the carrier will be liable to pay a
sum not exceeding the declared sum.” Montreal Convention art. 22(3). It is “an
exceptionally rare occurrence” for “the text [to] produce[] a manifestly absurd
result.” In re Dubroff, 119 F.3d 75, 76 (2d Cir. 1997). This is not such a case.
15
We hold that human remains are properly considered “cargo” for
purposes of the Montreal Convention and that the Convention therefore applies
to the international transportation of human remains by air.
IV
Plaintiffs’ second argument is that their claims are outside the ambit of the
Montreal Convention because they arise from non-performance rather than
“delay.” Following an evidentiary hearing, the district court found that plaintiffs
did not accept PIA’s offer to belatedly transport Nauman Badar’s body to
Pakistan, concluded that plaintiffs’ claims arise from delay, and held that they
are therefore preempted. We affirm both the district court’s factual finding and
its analysis.
A
At the outset, plaintiffs challenge the district court’s decision to conduct an
evidentiary hearing and make findings of fact following denial of the parties’
summary judgment motions. But plaintiffs had sufficient notice that an
evidentiary hearing (rather than a bench trial) would be used to “develop the
necessary facts” and to “determine this threshold [preemption] issue,” Badar, 492
F. Supp. 3d at 65; they did not object to that course of action, J.A. 1160–62, 1181.
16
Accordingly, we review only for plain error. E.g., Pescatore v. Pan Am. World
Airways, Inc., 97 F.3d 1, 18 (2d Cir. 1996).
“On plain error review, this court will only grant relief if there was (1)
error, (2) that is plain, (3) that affects substantial rights, and (4) the error seriously
affects the fairness, integrity, or public reputation of judicial proceedings.”
Yukos Cap. S.A.R.L. v. Feldman, 977 F.3d 216, 237 (2d Cir. 2020) (internal
quotation marks and citation omitted); cf. Fed. R. Civ. P. 61 (“At every stage of
the proceeding, the court must disregard all errors and defects that do not affect
any party’s substantial rights.”). Even if it be error to make factual findings
regarding preemption in the context of an evidentiary hearing (rather than a
formal bench trial), and even if such an error was plain, plaintiffs cannot show
any effect on their substantial rights. As plaintiffs concede, if we were to
remand, it would still be the district judge, not a jury, that would decide the
facts. See Appellant’s Br. at 16 n.3; 28 U.S.C. § 1441(d) (“Upon removal [by a
foreign state] the action shall be tried by the court without jury.”). And although
plaintiffs have identified several omitted formalities, Appellants’ Reply Br. at 2–
3, nothing suggests that the district court would make a different finding after a
17
full bench trial. Plaintiffs therefore cannot show plain error in procedure, and we
move on to their substantive challenges.
B
When a district court resolves a factual dispute in the course of
determining a legal issue, this Court reviews factual findings for clear error and
legal conclusions de novo. See, e.g., Fisher v. Aetna Life Ins. Co., 32 F.4th 124,
135 (2d Cir. 2022) (contract formation); Daou v. BLC Bank, S.A.L., 42 F.4th 120,
133 (2d Cir. 2022) (foreign sovereign immunity); Tapia v. BLCH 3rd Ave LLC,
906 F.3d 58, 61 (2d Cir. 2018) (“employer” status under the FLSA); In re Initial
Pub. Offerings Sec. Litig., 471 F.3d 24, 40–41 (2d Cir. 2006) (Rule 23 criteria for
class certification). “A finding of fact is clearly erroneous when[,] although there
is evidence to support it, the reviewing court on the entire evidence is left with
the definite and firm conviction that a mistake has been committed.” Fisher, 32
F.4th at 136 (internal quotation marks and citation omitted). “[W]here there are
two permissible views of the evidence, the factfinder’s choice between them
cannot be clearly erroneous.” Mango v. BuzzFeed, Inc., 970 F.3d 167, 170 (2d Cir.
2020) (quoting United States v. Williams, 943 F.3d 606, 610 (2d Cir. 2019)). An
appellate court owes particular deference to credibility determinations: “[W]hen
18
a trial judge’s finding is based on his decision to credit the testimony of one of
two or more witnesses, each of whom has told a coherent and facially plausible
story that is not contradicted by extrinsic evidence, that finding, if not internally
inconsistent, can virtually never be clear error.” Anderson v. City of Bessemer,
470 U.S. 564, 575 (1985); see also Fed. R. Civ. P. 52(a)(6) (“[T]he reviewing court
must give due regard to the trial court’s opportunity to judge the witnesses’
credibility.”).
The disputed factual finding--that PIA offered plaintiffs alternate
transportation for the remains--was not clear error. Although Bilal Badar
“categorically den[ied] that PIA ever made an offer of alternative
transportation,” Badar, 2021 WL 2382444, at *3; see J.A. 1232, the district court
deemed this denial “not credible,” 2021 WL 2382444, at *3. Instead, the court
credited the testimony of Paulette Cottone, an employee at PIA’s JFK office, who
testified that PIA promptly offered to transport the body to Pakistan, via an
Emirates flight. Id.; see J.A. 1261. Ms. Cottone relied heavily on the fact that PIA
made this offer with respect to the other body left on the tarmac: “It’s not
possible [that PIA offered alternate transport to the other family but not the
Badars.] . . . PIA would not behave that way. . . . [W]e would not make an offer to
19
one and not the other.” J.A. 1269; accord J.A. 1267; see also J.A. 137 (affidavit of
Arbab Hibatullah) (“Alternative travel arrangements were made by PIA to
transport the remains of the other deceased party to Pakistan the next day.”).
Plaintiffs argue that the district court should have excluded Ms. Cottone’s
testimony, which they characterize as hearsay. See Appellants’ Br. at 21–23, 25,
40–42. However, Ms. Cottone’s testimony was corroborated in important
respects by other evidence. 6 And rejection of alternative transport to Pakistan is
consistent with plaintiffs’ desire “[t]o get [Nauman] to a final resting place as
soon as possible.” J.A. 378 (Bilal Dep.). In any event, plaintiffs failed to make a
hearsay objection at the evidentiary hearing (notwithstanding that counsel
6
In a message to PIA staff in Lahore on October 30, PIA employee Arbab
Hibatullah stated that “[w]e are in contact with Mr. Bilal[, b]rother of Nauman
Badar . . . and informed [him] that [the b]odies have been transferred to [Muslim
Funeral Services] who . . . will now book [transportation] on any other carrier’s first
available [flight]. Both the families accepted this and are also in contact with [Muslim
Funeral Services].” J.A. 736. Later that day, Naseem Alavi, PIA’s U.S. country
manager, J.A. 742, wrote that he had “personally contacted families of both [decedents]
and informed them about the situation. They agreed with the arrangements and are
also in communication with [the] Funeral Home.” J.A. 729. And in an email cited by
the district court, Mr. Alavi told a Swissport manager that “[t]he bodies will now be
transported to Pakistan by some other carrier.” J.A. 742. Finally, Ms. Cottone’s
testimony aligns with Mr. Hibatullah’s affidavit, which stated that he had been
“informed that the Badar family decided not to transport decedent’s remains to
Pakistan, but rather intended to have a burial in the United States.” J.A. 137.
20
interposed such objections at other points).7 Instead, plaintiffs’ counsel elected to
attack Ms. Cottone’s testimony on cross-examination. See J.A. 1264–66. Our
review of the admissibility of Ms. Cottone’s testimony is therefore limited to
plain error. E.g., United States v. Miller, 954 F.3d 551, 562 (2d Cir. 2020).
Though framed as hearsay, the thrust of the argument is that the witness
lacked personal knowledge. Ms. Cottone testified that she “did the clerical
preparation of everything for [Flight 712],” J.A. 1259, and that she “was aware of
everything that was going on” due to her position as secretary to Mr. Alavi,
PIA’s country manager at JFK, J.A. 1263–64. This testimony does not
demonstrate direct, personal knowledge of PIA’s offer to the Badars. But
whether or not it was error to receive Ms. Cottone’s testimony, and even if such
error was plain, the failure to exclude her testimony sua sponte did not affect
plaintiffs’ substantial rights given the corroborating evidence, nor did it
“seriously affect[] the fairness, integrity, or public reputation of judicial
7
Plaintiffs did object below, but only on the ground that Ms. Cottone “was not
identified on defendants’ Rule 26a disclosures, nor in their interrogatory responses as a
witness with knowledge in this case.” J.A. 1181. Obviously, this is not an objection to
hearsay; moreover, plaintiffs only made it on the eve of the hearing, leading the district
court to overrule it as “waived and untimely.” J.A. 15 (Minute Order, Jan. 27, 2021).
21
proceedings.” Yukos Cap., 977 F.3d at 237 (internal quotation marks and citation
omitted).
Having thus rejected the procedural challenge (as not plain error), we
conclude that the district court’s finding itself was not clear error. The inference
Ms. Cottone drew from the other evidence in the record--that PIA offered
transportation to the Badars because it did so to the other affected family--is a
strong one; it was not unreasonable for the district court to adopt it. See Palazzo
ex rel. Delmage v. Corio, 232 F.3d 38, 44 (2d Cir. 2000) (“Decisions as to . . . which
of competing inferences to draw are entirely within the province of the trier of
fact.”) (citing Anderson, 470 U.S. at 573–75). The district court’s finding was not
clear error.
C
Given this finding, we conclude that plaintiffs’ claims are for “damage
occasioned by delay in the carriage by air of . . . cargo.” Montreal Convention
art. 19. As several district courts in this Circuit have held, a passenger or shipper
who refuses an offer of delayed transportation, or who makes alternative
arrangements, may not assert a claim for complete non-performance. E.g.,
Vumbaca v. Terminal One Grp. Ass’n L.P., 859 F. Supp. 2d 343, 366 (E.D.N.Y.
22
2012) (Weinstein, J.) (“Article 19 applies . . . [when a passenger] books an
alternative flight without affording the airline an opportunity to perform its
obligations[.]”); In re Nigeria Charter Flights Cont. Litig., 520 F. Supp. 2d 447,
453–54 (E.D.N.Y. 2007) (Dearie, J.) (“In some [cases found to arise from
delay] . . . . plaintiffs either secured alternate transportation without waiting to
find out whether the defendant airlines would transport them or refused an offer
of a later flight.” (internal citations omitted)). One may not “convert a mere
delay into contractual non-performance by choosing to obtain [alternative]
conveyance.” Paradis v. Ghana Airways Ltd., 348 F. Supp. 2d 106, 112–14
(S.D.N.Y. 2004) (Stein, J.) (collecting cases “refus[ing] to allow recovery for
breach of contract when plaintiffs responded to delays . . . by booking alternative
flights”), aff’d, 194 F. App’x 5 (2d Cir. 2006). Plaintiffs appear to concede as
much. Appellants’ Br. at 39 (“[I]f [PIA] had made the offer [of alternative
transportation], then the Convention preempt[s] Plaintiffs’ claims.”).
The air waybill in this case required PIA only to “complete the [c]arriage
with reasonable dispatch,” J.A. 759; that obligation had not been breached at the
time the Badars decided to bury Nauman in the United States. See Paradis, 348
F. Supp. 2d at 112 (noting that an airline which had offered replacement
23
transportation one week later “had not failed to perform its contract obligations”
because the plaintiff’s ticket required the airline only to “carry the passenger and
baggage with reasonable dispatch”). It was plaintiffs who cut off PIA’s ability to
perform under the terms of the waybill. That decision was understandable given
the need to bury Nauman quickly, and it cannot be doubted that plaintiffs found
themselves in a hard situation. But their only recourse against PIA and
Swissport was a claim under the Montreal Convention, a claim which they have
consistently declined to assert.
* * *
We AFFIRM the district court’s judgment dismissing plaintiffs’ claims as
preempted by the Montreal Convention.
24 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493068/ | ORDER IMPOSING RULE 9011 SANCTIONS
ARTHUR B. FEDERMAN, Chief Judge.
On April 28, 2000, this Chapter 7 bankruptcy case was filed. Debtor Hutton Valley Farms was identified as a general partnership. Velma and Ralph Hood were identified as the general partners. Mr. and Mrs. Hood had previously filed a Chapter 13 petition on August 25, 1999, in order to stop a foreclosure sale as to real estate in which the Bank of Houston held a First Deed of Trust. On February 15, 2000, before this Court ruled on a motion to lift the automatic stay filed by the Bank of Houston, the Hoods voluntarily dismissed their Chapter 13 case. The Bank of Houston again scheduled a foreclosure sale for this same real estate for May 1, 2000. On April 27, 2000, Stephen W. Daniels, counsel for the Hoods in their Chapter 13 case, informed the Bank of Houston that the Hoods had transferred their interest in the real estate to a partnership named Hutton Valley Farms, and that he was preparing to file a bankruptcy petition on behalf of Hutton Valley Farms. On that same date, counsel for the Bank of Houston filed a motion to dismiss and a motion for sanctions, and petitioned this Court for an emergency hearing on same. On April 28, 2000, this Court held an emergency hearing at which Mr. Daniels failed to appear. At that hearing, this Court ordered that the scheduled foreclosure sale be conducted as scheduled on May 1, 2000; that the deeds and paperwork be completed, but that no deed be recorded, that no party make any attempt to convey the subject property in any form prior to the foreclosure sale; and that the motion to dismiss and the motion for sanctions would be heard on May 17, 2000. On May 17, 2000, this Court took up the motion to dismiss. After testimony by both Mr. and Mrs. Hood and a representative from the Bank of Houston, I granted the motion to dismiss the case as a bad faith filing.
In conjunction with the motion dismissing the case as a bad faith filing, this Court issued an Order to Show Cause (the OTSC) why Mr. Daniels should not be sanctioned in an amount not to exceed the fees, costs, and expenses incurred by the Bank of Houston as a result of the bad faith filing. Pursuant to Rule 9011 of the Federal Rules of Bankruptcy Procedure, this Court granted Mr. Daniels 21 days from the date of the OTSC to demonstrate why he should not be sanctioned in said amount for his violation of Rule 9011(b)(2).
Rule 9011(b) provides that when an attorney signs a document filed with the Court, such attorney certifies that to the best of his knowledge, information, and belief the document is not being presented for an improper purpose, that the claims contained therein are warranted by existing law or that there is a nonfrivolous argument for the extension or modification of that existing law, and that the allegations have some evidentiary support.1 Rule 9011 also provides that the Court, on its own initiative, may enter an order describing the conduct that purportedly fails to comply with the requirements of Rule 9011(b), and directing the attorney to show cause why it has not violated subsection (b).2
This Court found at the hearing on May 17, 2000, that Mr. Daniels signed a bankruptcy petition and filed a Chapter 7 bankruptcy case in the name of a debtor that owned no assets and had no liabilities. The assets and liabilities listed in the bankruptcy schedules were those of Mr. and Mrs. Hood, not Hutton Valley Farms. The debtor was purportedly formed just prior to the filing in order to hold the real estate subject to the Bank of Houston’s lien, yet no record of a transfer of the real *524estate was recorded. The debtor was formed, and the case was filed, for the sole purpose of stopping the foreclosure sale, since section 109(g) of the Bankruptcy Code specifically forbade another filing by Mr. and Mrs. Hood for 180 days from the date of the voluntary dismissal of their Chapter 13 case.3
Mr. Daniels was ordered to show cause, on or before June 16, 2000, why he should not be sanctioned in the amount of the fees and other expenses incurred by the Bank of Houston as a result of the bad faith filing. In his response to the OTSC, Mr. Daniels waived his night to a hearing and consented to this Court making a ruling based upon his written response.4 In that Response Mr. Daniels argued that he believed the Hoods had transferred all of their assets and liabilities to Hutton Valley Farms, and that it was their intent to do so, despite the fact that no deed was executed or recorded. Additionally, Mr. Daniels stated that he was not familiar with a line of cases that hold that, if a debtor transfers all of its assets to another entity and then puts that entity into bankruptcy, unless there is an attempt to treat the new entity as a separate business as a practical matter, the filing is meant to frustrate creditors and abuse the bankruptcy system.5 This phenomenon is known as the “new debtor syndrome” and such cases are routinely dismissed as a bad faith filing.6 Mr. Daniel’s claim that he was not familiar with this line of cases is not a defense to the OTSC. Rule 9011 specifically requires an attorney to make a reasonable inquiry that the action to be filed is warranted by existing law, and that such action is not for any improper purpose.7
Mr. Daniels also argues that the bankruptcy filing was intended to maximize the return to all creditors, as the Chapter 7 trustee would obtain a better price for the real estate than the Bank of Houston. If that were the case, he should have counseled the Hoods to convert the prior case to Chapter 7, or contest the motion for relief from stay filed by the Bank of Houston in that casé. By dismissing that case, and then filing a Chapter 7 case under a different name on the eve of the foreclosure, he simply delayed the .process more than two months, and caused the Bank of Houston to expend additional funds to obtain the relief to which it would have been entitled.
Mr. Daniels has not demonstrated that he could have had, or should have had, a reasonable belief that this second bankruptcy filing was for a proper purpose. Moreover, the Eighth Circuit recently upheld an award of sanctions severally against a debtor’s attorney.8 I find that Mr. Daniels has violated Rule 9011, and that sanctions are appropriate. I further find that the appropriate amount of the sanctions is the additional fees and expenses incurred by the Bank of Houston as a result of the bad faith filing. The Bank of Houston would have incurred the costs of the foreclosure sale even if this case had not been filed, thus, I will not allow any fees or expenses that are directly related to the foreclosure sale and not to the bankruptcy filing.
Counsel for the Bank of Houston was ordered to submit an itemized account of attorney’s fees, costs, and expenses related to the bad faith filing. As instructed, counsel submitted an itemized account of the Bank of Houston’s out of pocket ex*525penses incurred since April 24, 2000.9 The total fees and costs incurred by the Bank of Houston in connection with the foreclosure sale, the bankruptcy filing, the trustee’s fees, and the updated title work was $6,543.10. Of that amount the Bank of Houston claims it incurred $4,184.00 in fees and $2,359.10 in disbursements. Having carefully reviewed the fees and disbursements, I find that the following fees would have been incurred by the Bank of Houston in conducting the foreclosure sale, even if Mr. Daniels had not filed this second bankruptcy petition:
Telephone conference with Cora Wade regarding payoff on loans: $ 64.00
Attend foreclosure sale in West Plains: 2 hours: 320.00
Telephone conference regarding foreclosure sale and correspondence to be mailed: $ hour 80.00
Telephone conference with Cora regarding status of file and Strategy for obtaining deficiency: Jé hour 53.33
Receipt and review correspondence from Jo Beth Prewitt regarding foreclosure and tractor: .30 hours 48.00
Discussion of Farm Credit cooperation with liquidation action; Correspondence with Eddie Smith regarding same: .30 hours 48.00
The total reduction in fees totals $613.33, leaving sanctionable fees in the amount of $3,570.67. In addition, the disbursements will be reduced by the following amounts:
Trustee’s Fee $1,080.00
Updated Title Work 190.00
Affidavit of Publication 787.00
The total reduction in disbursements totals $2,057.00, leaving sanctionable expenses in the amount of $302.10. After these deductions I find that Mr. Daniels will be assessed Rule 9011 sanctions in the total amount of $3,872.77 for his violation of Rule 9011(b)(1) and (2) of the Federal Rules of Bankruptcy Procedure.
The reduction in the sanctionable amount above does not prevent the Bank of Houston from assessing those same fees and expenses against its collateral if the Deed of Trust so provides.
Based on the above and foregoing, the Clerk of Court shall enter judgment in favor of the Bank of Houston, and against Stephen W. Daniels, in the amount of $3,872.77.
IT IS SO ORDERED.
. Fed.R.Bankr.P. 9011(b).
. Id. at 9011(c)(2).
. ll U.S.C. § 109(g).
. Doc. #17 (Response to Order to Show Cause Why Sanctions Should Not Be Imposed).
. Grunewaldt v. Mutual Life Ins. Co. of New York (In re Coones Ranch, Inc.), 7 F.3d 740, 743 (8th Cir.1993)
. See Meadowbrook Investors’ Group v. Thirtieth Place, Inc. (In re Thirtieth Place, Inc.), 30 B.R. 503, 505-06 (9th Cir. BAP 1983).
. Fed.R.Bankr.P. 9011(b)(1) and (2).
. Wei v. Fink (In re Graven), 186 F.3d 871, 872-73 (8th Cir.1999), cert. denied, June 20, 2000.
. See Letter dated June 6, 2000. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493070/ | O’BRIEN, Chief Judge.
Defendant Charles H. Gray appeals from a bankruptcy court judgment reforming a deed to certain real property, which originally named Defendant Debtor Leo Joseph Callier as sole grantee, to reflect Plaintiff Donna Callier and Defendant Leo Joseph Callier owners as joint tenants by the entirety. For the following, reasons, we reverse the bankruptcy court's judgment.
I
Charles H. Gray obtained a judgment in state court against Debtor Leo Joseph Callier in the amount of $1.3 million on May 15, 1997. On August 8 1997, Mr. Callier filed bankruptcy under Chapter 11. In his bankruptcy schedules, Mr. Callier listed property, which is the subject of these proceedings, known as the Crawford County Farm. He identified his wife (Plaintiff Donna Callier), along with his son and daughter-in-law, as potentially claiming an interest in the property.
The Crawford County Farm was acquired in Leo Callier’s name alone in 1990 or 1991, in a transaction that involved an exchange of another property known as the Christian County property. Sometime prior to acquisition of the Crawford County Farm property, Mr. Callier made a loan to an unidentified friend, and took title to the Christian County property from the friend as security for repayment of the loan. Mr. Callier held the Christian County property in his name alone, and he intended to return the property to the friend upon repayment of the loan. The friend later repaid the loan by purchasing a portion of the Crawford County Farm from the seller for the loan amount. The Calliers paid the seller an additional $150,000 for the purchase. Apparently, the Crawford County Farm property was then deeded to the friend, who then deeded it to Leo Callier in exchange for a deed to the Christian County property. The transaction was structured in this manner for tax purposes. The seller of the Crawford County Farm is not identified in the record, ■ and the deed to Callier was not made part of the record.
During the course of the bankruptcy case, Mr. Gray learned that Mr. Callier executed a contract to sell the Crawford County Farm to his son and daughter-in-law on March 30, 1997, less than two months before Mr. Gray’s judgment was entered against him. Mr. Gray thereupon filed an adversary proceeding to avoid the transfer as fraudulent. Subsequently, the bankruptcy court ordered Mr. Callier to sell his interest in the property by a date certain. Plaintiff Donna Callier then filed this adversary proceeding against Leo Cal-lier seeking a declaratory judgment that the Crawford County Farm is owned by the Colliers as tenants by the entirety and requesting reformation of the deed based on mutual mistake in the conveyance, to reflect joint tenancy by the entirety ownership.
Leo Callier did not contest the declaratory judgment proceeding. Charles Gray sought to intervene, and, both adversary proceedings were called for trial on the same day, December 20, 1998. At the trial, the parties agreed, and the bankruptcy court permitted Mr. Gray to be joined as a defendant in this declaratory judgment proceeding and that it be tried first. Following the trial, the bankruptcy court made oral and written findings of fact *852entered on January 19, 2000, concluding that “[t]here was a mutual mistake in the execution of the deed in the failure to reflect that the Crawford County Farm was to [be] owned jointly by Plaintiff and Defendant in tenancy by the entirety.”
The conclusion was based on findings by the bankruptcy court that Donna Callier and Leo Callier intended to receive and hold the Crawford County Farm property as joint tenants by the entirety. No findings or conclusions were made regarding the intention or understanding of the grantor in the deed. The bankruptcy court ordered reformation of the deed based on the court’s findings and conclusions, and, judgment was entered accordingly.
Mr. Gray asserts on appeal that the bankruptcy court erred in reforming the deed for the Crawford County Farm, based on mutual mistake, because: (1) there was no evidence of mistake in the conveyance on the part of the grantor of the property; and (2) the evidence was insufficient to support a finding of mistake by Leo Callier, grantee party to the instrument, and Donna Callier, in the conveyance. Alternatively, Gray claims that the bankruptcy court erred in applying the equitable remedy of reformation because the equities in the case heavily favor him, not the Calliers. We agree that the bankruptcy court erred in reforming the deed because there was no finding or evidence of mistake in the conveyance on the part of the grantor, and we reverse the judgment without considering the other alleged errors.
II
We review the bankruptcy court’s findings of fact for clear error, and we review the trial court’s application of the law de novo. Bailey v. Amsted Indus., Inc., 172 F.3d 1041, 1044 (8th Cir.1999); In re Waugh, 95 F.3d 706 (8th Cir.1996). When faced with a question of substantive state law, a federal court is bound by decisions of the state’s highest court. Bass v. General Motors Corp., 150 F.3d 842, 847 (8th Cir.1998). The issue here is whether, under Missouri law, a deed conveying real property can be reformed upon a showing of mistake in the original conveyance by only one of two parties to the instrument. We conclude it cannot. In reviewing Missouri law on reformation of contracts, we conclude that the bankruptcy court misapplied the law to the facts and the judgment must be reversed.
Ill
There were two parties to the deed sought to be reformed in this case: an unidentified grantor friend of Leo Callier and Leo Callier, grantee. In general, Missouri law regarding reformation of contracts based on mutual mistake, requires that an alleged mistake be mutual and common to both parties to the instrument in order to justify reformation of a contract. J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261 (Mo.1973). Quoting from an earlier Missouri Supreme Court case, the Hathman court said:
We have concluded from examination of the record that a reformation of the contract on the basis of mutual mistake of fact was not justified. In Allan v. Allan, 364 S.W.2d 578, 581 (Mo.1963), this court said: “(A) mistake affording ground for the relief of reformation must be mutual and common to both parties to the instrument. It must appear that both have done what neither intended *** (A)nd that mutual mistake, in order to justify granting the relief of reformation, must be established by clear and convincing evidence.”
Id. at 267, 268.
The Missouri Supreme Court has consistently applied these principles to reformation of deeds conveying real estate for the past one hundred years. Allan v. Allan, 364 S.W.2d 578, 581 (Mo.1963); Wilhite v. Wilhite, 284 Mo. 387, 224 S.W. 448 (1920); Benn v. Pritchett, 163 Mo. 560, 63 S.W. 1103 (1901).
*853In 1901, the Missouri Supreme Court held, in Benn v. Pritchett, 163 Mo. 560, 63 S.W. 1103 (1901), that a petition in a suit to set aside a deed on the ground of mistake, which merely alleged mistake on the part of one of the parties, did not state a cause of action, since equity will provide relief from mistake only when mutual to both parties to the instrument, or when induced by fraud.
The petition charges simply a mistake of Geary in making the deed to the Pritch-etts. The decree finds that there was a mutual mistake of both parties, notwithstanding no mutual mistake was alleged in the petition. The petition did not state facts sufficient to constitute a cause of action. The decree supplied the substantial fact whose omission made the petition insufficient. Equity will only relieve against mutual mistakes. The mistake of one party to a contract will not entitle him to relief, unless the other party induced him to act under such mistake, which is not this case. Mathews v. Kansas City, 80 Mo. 231; Cassidy v. Metcalf, 66 Mo. 519, loc. cit. 531; Henderson v. Beasley, 137 Mo. 199, 38 S.W. 950; Steinberg v. Phoenix Insurance Co., 49 Mo.App. 255; Bartlett v. Brown, 121 Mo. 353, 25 S.W. 1108; Adkins v. Tomlinson, 121 Mo. 487, 26 S.W. 573; Koontz v. Bank, 51 Mo. 275. A mistake of a conveyancer will not constitute a mutual mistake as a ground for a reformation of the instrument, unless he acted for both parties. Brocking v. Straat, 17 Mo.App. 296, loc. cit. 305. The justice of the peace in this case acted for Geary alone. Mistake on one side, without fraud of some kind on the other side inducing the mistake, will not be sufficient to relieve the party making the mistake. Norton v. Bohart, 105 Mo. 615, 16 S.W. 598.
Id. at 1106.
In 1920, the Missouri Supreme Court, in Wilhite v. Wilhite, 284 Mo. 387, 224 S.W. 448 (1920), again held that reformation of deeds, based on mistake, must involve a mutual mistake of both parties to the instrument.
It may be conceded for the purpose of this discussion that, where an instrument is drawn in language the legal effect of which the parties misunderstand, and which expresses what the parties did not intend to express, a court of equity will reform the contract so as to conform to the intention of the parties. Williamson v. Brown, 195 Mo. loc. cit. 331, 195 Mo. 313, 93 S.W. 791; Corrigan v. Tiernay, 100 Mo. loc. cit. 280, 281, 100 Mo. 276, 13 S.W. 401; McKim v. Met. St. Ry. Co., 196 Mo.App. loc. cit. 547, 548, 196 Mo.App. 544, 196 S.W. 433. However, before a court of equity will entertain a bill to reform a contract on the ground of mistake, the mistake must be mutual; that is, the contract must be written in terms which violate the understanding of both parties. Meek v. Hurst, 223 Mo. 688, loc. cit. 696, 122 S.W. 1022, 135 Am.St.Rep. 531; Benn v. Pritchett, 163 Mo. loc. cit. 571, 572, 163 Mo. 560, 63 S.W. 1103; Wolz v. Venard, 253 Mo. loc. cit. 82, 253 Mo. 67, 161 S.W. 760. The mistake must occur in reducing to writing the contract upon which the parties had agreed; the prior agreement upon the terms of the contract is presupposed. Parker v. Vanhoozer, 142 Mo. loc. cit. 629, 142 Mo. 621, 44 S.W. 728; Robinson v. Korns, 250 Mo. loc. cit. 675, 250 Mo. 663, 157 S.W. 790; Dougherty v. Dougherty, 204 Mo. loc. cit. 237, 204 Mo. 228, 102 S.W. 1099. Proof of the prior agreement, which was erroneously written by mistake, must be clear and convincing. Wall v. Mays, 210 S.W. 871, loc. cit. 872; Crouch v. Thompson, 254 Mo. loc. cit. 487, 254 Mo. 477, 162 S.W. 149; Horine v. Royal Ins. Co. (App.) 201 S.W. loc. cit. 959.
Id. at 449.
Subsequently, in 1963, the Missouri Supreme Court stated unequivocally a third time, in Allan v. Allan, 364 S.W.2d 578 (Mo.1963), that a mistake providing ground for reformation must be mutual and com*854mon to both parties to the instrument, and must be established by clear and convincing, evidence.
At the outset of our consideration of this appeal we deem it appropriate to quote certain established rules applicable to cases of this nature. ‘[A] mistake affording ground for the relief of reformation must be mutual and common to both parties to the instrument. It must appear that both have done what neither intended. *** [A]nd that mutual mistake, in order to justify granting the relief of reformation, must be established by clear and convincing evidence.’ Walters v. Tucker, Mo.Sup., 308 S.W.2d 673, 675, 679. “A mutual mistake presupposes a prior or preceding agreement between the parties, and, this agreement of necessity must be shown.” Dougherty v. Dougherty, 204 Mo. 228, 237, 102 S.W. 1099, 1101.’ Zahner v. Klump, Mo.Sup., 292 S.W.2d 585, 587.
Id. at 581.
The facts in Allan v. Allan reveal that divorce litigation was brought by Thomas Allan’s spouse against Allan to partition and sell the Allan family farm that had been deeded during their marriage from Allan’s parents to Allan and his spouse. Allan’s father died shortly after the conveyance and before the divorce litigation. Allan’s mother was a third party defendant in the lawsuit. Allan and his mother claimed that the deed was given conditionally upon the grantors’ retaining a life estate, and sought reformation of the deed. The deed made no mention of a life estate, but was an ordinary warranty deed. The Missouri Supreme Court concluded that grounds for reformation did not exist, stating:
In order to prevail on the issue of reformation it is necessary to show that the mistake was mutual, i.e., common to both parties. In that connection we should perhaps state that we are convinced that there was an agreement between defendant and his parents that they should have the right to occupy the farm as a home as long as either lived. However, it does not appear to have been agreed that that provision would be written into the deed. No witness testified that there was any agreement or understanding that the grantors would reserve a life estate in the deed.
Id.
Donna Callier argues that evidence of a grantor’s mistake is not a necessary element to the cause of action for reformation of a deed, citing Shaffer v. Dalrymple, 507 S.W.2d 65 (Mo.Ct.App.1974).
In Shaffer v. Dalrymple, a widow sued to have the deeds to two parcels of real estate, held solely in the name of her deceased spouse, reformed to reflect ownership in them both as joint tenants by the entirety. The lower court ordered judgment reforming the deeds on evidence of mutual mistake on the part of the widow and her deceased spouse, even though there existed no evidence in the record that the grantors were mistaken in the grants of the conveyances. The Missouri Court of Appeals affirmed, stating:
It is true, as appellants contend, that a mistake affording ground for relief by way of reformation must be mutual and common to both parties to the instrument, and that the mutual mistake must be established by clear and convincing evidence. Allan v. Allan, 364 S.W.2d 578, 581(1-5) (Mo.1963), and cases cited. But what appellants seem to argue is that there is a lack of evidence of mutuality of mistake as between the parties grantor and the grantees to the two deeds in question. ***
‘The argument ignores the nature of an action for the reformation of an instrument on the ground of mutual mistake of fact, that the parties affected by the mistake are the only ones who are in interest.’ ‘It has been held that all parties who possess an actual interest in the matter must be mistaken, but it is enough if the mistake is mutual as between the real parties in interest, or *855between the parties affected thereby.’ 76 C.J.S. Reformation of Instruments, s 28C., p. 368; ‘On the other hand, it has been held that reformation may be sought on the ground of mistake without joining a party to the mistake where it appears that such party no longer has an interest in the subject matter of the litigation, such as in the case of an action between the grantees of a common grantor.’ 66 Am.Jur.2d, s 100, p. 632. See also 76 C.J.S. Reformation of Instruments s 70, p. 426, stating, ‘The grantor in the deed sought to be correct is a necessary party, at least where the conveyance contains covenants of warranty, ***; but there is some authority restricting the application of this rule and holding that necessary parties to the action do not include grantors who have conveyed their whole title and interest in the property which will be affected by reformation, ***.’ (Italics added.) Both Connecticut General and the Meltons, as grantors, conveyed their entire interests in the lands by the deeds in question. They were not necessary parties to this suit. Rule 62.04(a), V.A.M.R. The inquiry here is only the sufficiency of the evidence to show a mutual mistake of' fact at the time the deeds were made as between respondent and deceased.
Shaffer v. Dalrymple, at 69, 70.
Shaffer v. Dalrymple seem to us clearly contrary to Missouri law of reformation of contracts, consistently articulated by the Missouri Supreme Court for at least seventy-five years prior to Shaffer. In addition to the fact that we are bound to follow the law of Missouri as determined by that state’s highest court, Bass v. General Motors Corp., 150 F.3d 842, 847 (8th Cir.1998), there are additional reasons why we do not find Shaffer to be controlling Missouri law, either generally, or with respect to the facts of this case.
The same appellate court recently declined to follow Shaffer, even though it had the clear opportunity to do so. In Morris v. Brown, 941 S.W.2d 835 (Mo.Ct.App.1997), Morris, who purchased property from one Boone, received title by life estate with remainder in her two daughters as tenants in common. One of the daughters predeceased Morris, who then sought reformation of the deed based on mutual mistake to reflect a life estate in Morris with the remainder in her daughters as joint tenants. The trial court ruled in her favor.
The Missouri Court of Appeals reversed the trial court, specifically holding that evidence was insufficient to support reformation of a deed where there exists no evidence of mistake on the part of the grantor party to the instrument. The Morris court implied that a grantor is inherently a party affected by a mutual mistake and a proposed reformation, whether or not required to be a party to a reformation proceeding itself.2
One of the assigned errors on appeal in Morris was that the petition for reformation failed to plead a cause of action due to failure of the petitioners to specifically plead mistake on the part of the grantor. The appeals court found the petition to be adequate, in this discussion:
A well-pled petition for reformation of a deed because of mutual mistake is characterized by three elements: preexisting agreement between the parties affected by the proposed reformation that is consistent with the change sought; that a mistake was made in that the deed was prepared other than had been agreed upon; and that the mistake was mutual, i.e., was common to both parties.
Wates v. Joerger, 907 S.W.2d 294, 296 (Mo.App.1995); see also Cockrell [v. Pleasant Valley Baptist Church], 762 S.W.2d [879] at 881. Here, in Count II of respondents’ petition, they did request reformation of the deed as a result of mutual mistake. In this respect, the respondents alleged in their petition that “the parties to the deed of February 28, 1973 and, in particular, the Grantees thereof Louise Massey, Norma *856Summers (now Lemons) and Nellie Morris intended that the interest of the Grantees be a survivorship interest. ..L.F. 6 (emphasis added). Although this allegation is not a model in pleading reformation of a warranty deed for mutual mistake and does not specifically mention the grantor, Boone, as to his intent in regard to the deed, giving it a liberal and favorable construction to respondents, we cannot say that respondents’ petition as a whole failed to adequately plead the three necessary elements of reformation based on mutual mistake.
Morris v. Brown, at 839, 840.
The Morris court went on to reverse the trial court, however, in part on insufficiency of the evidence to show mistake on the part of the grantor, Boone. Applying the law to the facts of the case, the court reasoned:
Appellants contend that because Boone never specifically agreed with the grantees to title the property in Massey and Lemons as joint tenants, there never was a preexisting agreement with the grantor, and thus, no mutual mistake supporting reformation. On the other hand, respondents contend that it was not necessary to discuss the specifics of the titling with Boone in that it was implied in the sale agreement that Boone agreed to convey the land in whatever form the grantees desired. They argue that this alone is sufficient to establish a preexisting agreement between the grantor and grantees to find a mutual mistake supporting reformation of the deed. In support of their argument, respondents rely on the testimony of the realtor, Rita Stephens, who handled the sale for the grantor. She testified that the real estate contract here had been lost or destroyed. However, she testified that in this case, as is the case in most sales of real estate, Boone’s only interest or concern in selling the real estate was to obtain the price at which the land was offered, and that it was implied in the agreement to sell, that Boone agreed to title the property in whatever manner the grantees chose, otherwise there would not be a sale. This argument of respondents would certainly have some merit if, in fact, there was a showing that Boone at the time of conveyance was aware of how the grantees wanted the property titled. Otherwise, how could it be said that Boone intended the real estate to be titled as a joint tenancy and it was not, and thus, the alleged mistake in the language of the deed frustrated his intent as to the titling of the property, creating a mutuality of mistake as to what interest was conveyed by the deed? On this issue, there is no evidence that Boone was ever advised that the property was to be titled in Massey and Lemons as joint tenants.
Morris v. Brown at 841. Shaffer v. Dalrymple, 507 S.W.2d 65 (Mo.Ct.App.1974), is not mentioned in the Morris v. Brown decision. Even if the Missouri law of reformation of contracts was not well settled by the Missouri Supreme Court, we would be persuaded by the more recent Morris v. Brown, 941 S.W.2d 835 (Mo.Ct.App.1997).
Finally, even if Shaffer v. Dalrymple, 507 S.W.2d 65 (Mo.Ct.App.1974) was the controlling Missouri law on reformation of contracts, the trial court’s legal conclusions and judgment would not be sustainable. The bankruptcy court did not specifically find that Leo Callier’s grantor was not affected by the alleged mistake or proposed reformation. Nor can the finding be inferred, since the record does not disclose the identity of the grantor, what he understood, what he was told, what he assumed, or, what he intended in the transaction.3 A finding of unaffectedness is critical to the Shaffer rationale that an unaffected grantor need not have been mistaken in the transaction for a viable cause of action to exist between grantees and others.
*857In conclusion, there were two parties to the instrument sought to be reformed in this case: an unidentified grant- or friend of Leo Callier and Leo Callier, grantee. In order to sustain a cause of action for reformation of the deed based on mutual mistake, Missouri law requires that both parties to the instrument must have been mistaken in the conveyance, established by clear and convincing evidence. There was no finding by the bankruptcy court that the grantor party to the instrument was mistaken in the conveyance, and there is no evidence in the record from which such a finding could be made. Therefore, we conclude that the trial court erred in application of Missouri law by reforming the deed, based on unilateral mistake of the grantee Leo Callier.
IV
Accordingly, the judgment of the bankruptcy court is reversed.
. The grantor, Boone, was not a party in the Morris v. Brown lawsuit.
. If anything, the dynamic of the transaction seems to indicate that the grantor might indeed be affected by the alleged mistake and proposed reformation of the deed. As we *857understand the record, the grantor’s participation in the transfer of the Crawford County Farm property was to enable him to get back his Christian County property through a land exchange that would qualify as a like kind property exchange and tax free transfer under 26U.S.C. § 1031. Generally, exchanges must be among the same taxpayer owners to qualify under the statute. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493071/ | ORDER DENYING THOMAS FARESE’S REQUEST TO SCHEDULE COURT ORDERED EVIDEN-TIARY HEARING
PAUL HYMAN, Jr., Bankruptcy Judge.
THIS MATTER came before the Court on July 11, 2000 upon Thomas Farese’s (“Movant”) Request to Schedule Court Ordered Evidentiary Hearing (the “Request for Hearing”) with incorporated Request to Be Transferred to the Southern District of Florida to Attend All Hearings in the Above-Captioned Adversary Proceeding in Person (the “Request to Appear in Person”).
*907In the Request for Hearing, Movant requests that this Court enter an Order setting the following Motions for hearing: Farese’s Objection to Harald Dude as the Person Exercising Debtor in Possession Powers (Renewed); Farese’s Motion for Appointment of Trustee; and Farese’s Renewed Motion for Temporary Mandatory Injunction for the Collection and Payment of Rental Income to the U.S. Trustee. This Court has already entered an Order Setting Hearing for each of the above motions and set each of the motions for hearing on July 19, 2000 at 10:80 a.m. at 701 Clematis Street, Courtroom 6, West Palm Beach, Florida.
In the Request to Appear in Person, Movant requests that this Court enter an Order requiring the United States Marshall Service to transport Movant to West Palm Beach, Florida to appear in person at all hearings in the above-captioned Adversary Proceeding.
The United States Supreme Court, in Price v. Johnston, 334 U.S. 266, 68 S.Ct. 1049, 92 L.Ed. 1366 (1948), rev’d on other grounds by McCleskey v. Zant, 499 U.S. 467, 111 S.Ct. 1454, 113 L.Ed.2d 517 (1991), held that “[ljawful incarceration brings about the necessary withdrawal of limitation of many privileges and rights, a retraction justified by the considerations underlying our penal system. Among those limited is the otherwise unqualified right ... to parties in all courts of the United States to ‘plead and manage their own causes personally.’ ” Id. at 285-86, 68 S.Ct. 1049 (internal citation omitted).
Courts interpreting the Supreme Court’s decision in Price, including the Eleventh Circuit, have held that inmates do not have a constitutionally protected right to appear personally in civil trials. See, e.g., In re Wilkinson, 137 F.3d 911, 914 (6th Cir.1998) (holding that prisoners who bring civil actions “have no right to be present at any stage of the judicial proceedings”); Michaud v. Michaud, 932 F.2d 77, 81 (1st Cir.1991) (finding that courts may exercise discretion in allowing prisoners to attend civil court proceedings initiated by the prisoner and that “[ujnder some circumstances, a prisoner may be forced to forego the right to appear personally in civil lawsuits”); Poole v. Lambert, 819 F.2d 1025, 1028 (11th Cir.1987) (citing Price and holding that an inmate has no absolute right to be present at the trial of his civil action).
In Moeck v. Zajackowski, 541 F.2d 177 (7th Cir.1976), the court stated:
We find no support in the Constitution or in judicial precedent for the proposition that a prison inmate has a fundamental interest in being present at the trial of a civil action to which he is a party, sufficient to outweigh, as a matter of course, the interest of the state in avoiding expense. The due process requirements of the Fifth and Fourteenth Amendments, which guarantee access to the courts, do not grant a prisoner the right to attend court in order to carry on the civil proceedings which he initiates.
Id. at 180; see also Clark v. Hendrix, 397 F.Supp. 966, 968-69 (N.D.Ga.1975) (“While prisoners do retain their right of access to the courts, this does not necessarily mean that a prisoner has some inherent constitutional right to appear personally at a hearing or at a trial with respect to the civil suit which he has filed.”).
In Michaud, the court set forth several factors that a court should consider in determining whether to allow an inmate to attend court proceedings in person, including the burden on the state, the existence of other alternatives, the diligence of the prisoner, and the substantiality of the litigation. See Michaud, 932 F.2d at 81. The court found that because inmates may have to forego appearing personally at court proceedings, courts should “try to fashion other procedures enabling [the inmate] to go forward.” Id.
Based upon the ease law, the Court finds that Movant does not have a constitutional right to appear in person at hearings *908conducted in the above-captioned Adversary Proceeding. The Court finds that Movant’s right to appear does not outweigh the cost to the United States Marshall Service in transporting Movant to West Palm Beach, Florida and housing Movant there for the pendency of the above-captioned Adversary Proceeding. The Court has and will permit Movant to attend and participate in all hearings conducted in the above-captioned Adversary Proceeding and Chapter 11 Case by telephone.
For the foregoing reasons and being otherwise fully advised in the premises, the Court hereby ORDERS AND ADJUDGES that:
1. Movant’s Request for Hearing is DENIED AS MOOT because the Court has already entered an Order Setting Hearing on each of the Motions that Movant requests be set for hearing.
2. Movant’s Request to Appear in Person is DENIED. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493072/ | ORDER
JAMES J. BARTA, Bankruptcy Judge.
The matter being considered here is the motion of Chrysler Financial Corporation, L.L.C., f/k/a Chrysler Financial Corporation (“Movant”) to reconsider an Order dated July 13, 2000 that denied Movant’s motion for leave to file a proof of claim out of time. This Order is based on a consideration of distribution requirements in Chapter 7 cases as they apply to the particular circumstances in this case.
In a Chapter 7 case, property of the estate is to be distributed first, in payment of claims specified in Section 507 (Priorities); second, in payment of allowed unsecured claims that were timely filed or that were tardily filed if the holder of the claim did not have notice or actual knowledge of the case in time for timely filing of a proof of such claim, and if proof of such claim is filed in time to permit payment of the claim; third in payment of any allowed unsecured claim proof of which was tardily filed, but the holder of the claim had notice *169or actual knowledge of the case in time for timely filing a proof of claim; fourth, in payment of any allowed claim for certain fines, penalties or forfeitures; fifth in payment of interest on any claim paid under the aforementioned categories; and sixth, to the debtor. 11 U.S.C. § 726(a).
In a Chapter 7 case, a proof of claim is deemed allowed unless a party in interest objects. 11 U.S.C. § 502(a).
If an objection is made, the Court shall allow the claim except to the extent that the proof of claim was not timely filed; except that if not timely filed, it may yet be allowed to the extent that it was tardily filed as permitted under Section 726(a) or under the Federal Rules of Bankruptcy Procedure. 11 U.S.C. § 502(b)(9).
In a Chapter 7 case, a proof of claim is timely filed if it is filed not later than 90 days after the first date set for the meeting of creditors, except as to certain entities and in certain conditions that are not present in this matter. Fed. R. Bankr.P. 3002(c).
The Court may enlarge the time for taking action under Rule 3002(c) only to the extent and under the conditions stated therein. Fed. R. Bankr.P. 9006(b)(3). In this matter, the conditions at Rule 3002(c) have not been shown to be present, and the record has suggested no other basis upon which the Court may enlarge the time beyond the original deadline.
On March 8, 2000, the Court gave notice to all creditors and parties in interest listed on the Debtors’ matrix that under Rule 3002(c), the last day to file a proof of claim in this Chapter 7 case was fixed as June 6, 2000. The Movant was listed on the Debtors’ matrix in care of its Legal Counsel. On March 24, 2000, the Movant was granted relief from the automatic stay to foreclose on the Debtors’ motor vehicle.
On June 9, 2000, the Chapter 7 Trustee reported that the value of assets collected exceeded the amount of claims that had been filed, and requested an extension of time for filing claims. On June 14, 2000, notice was given to all creditors and parties in interest that the last day to file a claim to share in the distribution from the estate had been extended to July 31, 2000.
The Movant filed proof of claim No. 23 on July 7, 2000, after the last day to file a proof of claim as set by Rule 3002(c), but before the second date set by the Court’s Order, and before the Trustee had commenced distributions under Section 726. 11 U.S.C. § 726(a)(1). Seventeen creditors had filed timely proofs of claim before the June 6, 2000 deadline under Rule 3002(c). Ten creditors including the Movant filed proofs of claim during the extended period. Except for the categories at Rule 3002(c)(1) — (5), there is no provision in the Bankruptcy Code or Rules for an extension of time to file claims in this Chapter 7 case. The Court’s Order that set the date of June 6, 2000 is also a notice that the Trustee has reported that assets available for distribution exceed the amount of allowed claims; that the Trustee has not commenced distributions under Section 726; that a proof of claim may yet be filed in time to permit payment of such claim; and that the Trustee anticipates calculating and making distributions after the date set in the Order. The claims filed during the extended period in this case are tardily filed claims, and are subject to allowance under Section 502, and distribution under Section 726(a)(2)(C) or Section 726(a)(3).
The Movant was listed by the Debtors as the holder of a prepetition claim. The Court finds that the Movant had notice of the claims filing deadline. In the circumstances presented here, the failure to file a timely proof of claim for the reason that the exact amount of the secured creditors’ deficiency was not determined until later, does not annul the Movant’s position as a creditor that had notice and actual knowledge of the case. Based on the record before the Court, the claim is subject to allowance and distribution as a tardily filed claim under Section 726(a)(3). The record has not suggested *170any other basis to permit the claim to be deemed to have been filed prior to June 6, 2000, the deadline under Rule 3002(c).
IT IS ORDERED that the Movant’s request to reconsider and set aside the Order dated July 13, 2000 that denied the motion for leave to file a proof of claim out of time is denied; and that if no objections are filed, the claim will be allowed as a tardily filed claim that may be entitled to a distribution under Section 726(a)(3); and that any objection to the allowance of claims filed in this case will be considered separately after notice. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493073/ | MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S MOTION TO DISMISS
CAROL J. KENNER, Bankruptcy Judge.
By his complaint in this adversary proceeding, Debtor Joseph Donahue seeks (1) a determination that, by virtue of his Chapter 13 plan payments and subsequent Chapter 13 discharge, the federal income tax claims against him for tax years 1989 through 1994 are fully discharged; (2) a further determination that the claims of the United States against his non-debtor wife, Karen A. Donahue, arising from the same income-all his, but reported on a joint tax return-have been discharged by virtue of his completion of his Chapter 13 plan; and (3) an order compelling the United States to release its tax lien against *251the interest of Karen Donahue in the home she owns jointly with the Debtor. The adversary proceeding is before the Court on the motion of the United States to dismiss the complaint for lack of subject matter jurisdiction. The Debtor opposes the motion. For the reasons set forth below, the Court holds that its has subject-matter jurisdiction over all three requests for relief and, accordingly, will deny the motion.
Facts
The complaint recites the following facts, which, for purposes of this motion, I take to be true. In March and August of 1994, the United States filed certificates of federal tax liens against the interests of Joseph Donahue and his wife, Karen Donahue, in their residence.
Joseph Donahue (“the Debtor”) filed a petition for relief under Chapter 13 of the Bankruptcy Code on September 15, 1995. Karen did not join in the petition. At the time, the Debtor was indebted to the United States for income taxes, with interest and penalties thereon, for the years 1989 through 1994. The taxes owing for these years were entirely for income earned by Joseph. None was attributable to income of Karen, but Joseph and Karen filed joint federal tax returns for the years at issue.
The Debtor listed the United States as a creditor in his bankruptcy schedules, and the United States, through the Internal Revenue Service (IRS), filed a proof of claim in the case, asserting a secured claim of $14,605.25, a priority claim of $1,377.26, and a non-priority unsecured claim of $328.00; these amounts included prepetition interest on the taxes owing. Through his confirmed plan, the Debtor paid the secured and priority claims in full and paid $80.13 on the unsecured claim, more than the ten percent that the plan required for unsecured claims. On February 5, 1999, with the Debtor having completed the payments required by the plan, the Court entered a Chapter 13 discharge order in his favor. The Court closed his case on February 18,1999.
On November 29, 1999, the IRS notified both Joseph and Karen Donahue that they continued to owe a total of $2,291.67 for tax years 1989 through 1992. According to the Debtor, this amount consisted of interest that accrued after the filing of the bankruptcy petition. (From the facts recited above, I surmise that it may also have included the unpaid portion of the unsecured claim.) In the same notice, the IRS threatened to levy on the Donahues’ assets if they did not pay the amounts owing.
On January 28, 2000, the Debtor moved to reopen this case in order to seek a determination of his income tax liability for tax years 1989 through 1992. With the motion to reopen, he filed a motion to determine the extent and validity of his tax liability for the years in question. The motion sought no relief with respect to the liability of Karen Donahue. No opposition having been filed, the Court allowed the motion to reopen the case. However, because the relief sought requires the filing of an adversary complaint under the Rules of Part VII of the Federal Rules of Bankruptcy Procedure, the Court denied without prejudice the Debtor’s motion to determine the extent and liability of his liability and directed the Debtor file an adversary complaint.
The same day as the Debtor filed his motion to reopen, the United States reversed its position as to the liability of Joseph Donahue only. On January 28, 2000, the United States issued one or more Certificates of Release of Federal Tax Lien. The certificates released the United States’ tax liens on the Debtor’s residence with respect only to the Debtor’s liability for the taxes. The certificate expressly states that “the lien is not released as it relates to Karen A. Donahue.” In a subsequent letter to counsel for Joseph Donahue, the IRS acknowledged that the tax liabilities of Joseph- — but not Karen-Donahue for tax years 1989 through 1994 have been discharged and that “the bills re*252ceived for tax years 1989 through 1992 were sent in error.”
On March 15, 2000, the Debtor alone filed the complaint commencing this adversary proceeding. In it, he seeks the relief for which he sought to reopen the case: a determination that, by virtue of his Chapter 13 plan payments and subsequent Chapter 13 discharge, the federal income tax claims against him for tax years 1989 through 1994 are fully discharged. Karen Donahue did not join in the complaint, but the complaint also seeks relief as to her liability: a determination that the claims of the United States against her for the same tax years, arising from the same income, have been discharged by virtue of his completion of his Chapter 13 plan; and an order compelling the United States to release its tax lien against her interest in the home she owns jointly with the Debtor. The United States has not yet filed an answer.
Motion to Dismiss
The United States now moves to dismiss the entire complaint on the basis that the Bankruptcy Court lacks subject-matter jurisdiction to adjudicate the income tax liability of a person other than the debtor. The United States argues that the complaint serves no bankruptcy purpose and therefore does not fall within the Bankruptcy Court’s jurisdiction under 11 U.S.C. § 505(a) to “determine the amount or legality of any tax.” The Debtor responds that the Court’s jurisdiction does extend to his wife’s tax liability because (1) the language of § 505(a) permits the court to determine the amount or legality of “any tax, any fine or penalty relating to a tax, and any addition to tax,” 11 U.S.C. § 505(a) (emphasis added), and because (2) the disputed tax will affect the Debtor’s rehabilitation in that “the arrears will all be taken from the income the plaintiff produces.” Plaintiffs Memorandum, pp. 4-5.
The Court begins by noting that the United States’ motion fails to address the claim for relief that the Debtor asserts with respect to his own liability. The Court has jurisdiction to determine the extent to which that liability has been discharged. Therefore, the motion to dismiss must be denied as to the claim for relief concerning the Debtor’s liability.1
This leaves only the question of the Court’s jurisdiction to determine the wife’s liability. Section 505(a) of the Bankruptcy Code authorizes the Bankruptcy Court to determine “any tax” and “any addition to tax” but plainly was not meant to turn the Bankruptcy Court into a tax court of general jurisdiction. The Court can determine a tax under § 505(a) if that determination otherwise falls within its jurisdiction. In relevant part, the Bankruptcy Court’s jurisdiction is limited to “proceedings arising under title 11 or arising in or related to a case under title 11.” 28 U.S.C. §§ 1334(b) and 157(a)-(c).
In this instance, Karen Donahue’s tax liability arose under federal tax law, not the Bankruptcy Code. However, the Debtor is not here disputing her liability on non-bankruptcy grounds. Rather, the claims that the Debtor now asserts arise under the Bankruptcy Code, as a function of the relief to which he is entitled in his Chapter 13 case. In essence, the Debtor is arguing that, by virtue of his successful completion of his Chapter 13 plan, his wife’s joint liability for the tax debt at issue has been satisfied in full. In other words, the satisfaction of her liability is among the benefits to which, under the Bankmptcy Code, he is entitled. For *253present purposes, I need not decide at this early stage of the adversary proceeding whether the Debtor is correct. I need only determine whether a complaint based on that proposition is one that arises either under the Bankruptcy Code or in a case under the Bankruptcy Code. I hold that it arises both under the Bankruptcy Code and in a case under the Bankruptcy Code and, therefore, that the Court has subject-matter jurisdiction over it. Moreover, I hold that this matter constitutes a core proceeding.
ORDER
For the reasons set forth above, the United States’ Motion to Dismiss is hereby DENIED.
. From the Debtor’s recitation of facts in the complaint, it appears that the United States now agrees that its claims against the Debtor and his property are now satisfied or discharged and that the United States can have no further recourse against him or his interests in property to satisfy its claims for tax years 1989 to 1994. In view of the alleged post-discharge collection efforts by the United States, the Debtor is justified in seeking judgment to that effect, and, if there is no disagreement on the matter, the parties can agree to entry of judgment with respect to the Debtor's lack of liability. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493074/ | MEMORANDUM
JAMES J. BARTA, Bankruptcy Judge.
This matter is before the Court on the “Motion for Entry of Default Judgment” (Motion 10) filed by Louis Payne (“Plaintiff’), and the “Objection to Motion for Default Judgment and Motion to Vacate Entry of Default” (Motion 11) filed by Patrick Joseph Lomantini, Debtor (“Defendant”).
This is a core proceeding pursuant to Section 157(b)(2)(I) of Title 28 of the United States Code. The Court has jurisdiction over the parties and this matter pursuant to 28 U.S.C. Sections 151, 157 and 1334, and Rule 9.01 of the Local Rules of the United States District Court for the Eastern District of Missouri.
The Plaintiffs motion will be granted in part and denied in part and the Defendant’s motion will be granted in part and denied in part.
Facts
The operative facts are not in dispute. (See, Exhibit 1 to File Document No. 10 and Affidavit of Defendant, Attached to File Document No. 16). The Plaintiff engaged the Defendant to sell a car to a third party, entrusting the Defendant with the car and its title and a power of attorney to permit the Defendant to conclude the sale. It was agreed that the Defendant was to receive $300.00 as payment and remit the remainder of the proceeds to the Plaintiff. Shortly after the agreement was made, the Defendant sold the car and received the sale proceeds in the amount of $92,000.00 in the form of a check made out to “L & L Enterprises”, a d/b/a used by the Defendant. The Defendant did not turn over the proceeds to the Plaintiff as they had agreed. Instead, the Defendant took the check from the purchaser of the car to the purchaser’s bank and obtained a cashier’s check made out to L & L Enterprises. The Defendant then negotiated the cashier’s check to Mungenast Lexis, St. Louis in payment for a previously purchased car for a customer other than the Plaintiff. Mungenast Lexis issued the Defendant a check for the difference, about $58,000.00, which the Defendant endorsed to DiSalvo Jeep to pay a previous debt owed by the Defendant in the amount of about $22,238.00. DiSalvo issued a check to the Defendant for the difference. The Defendant then endorsed the DiSalvo check over to Suntrup Ford to pay a previous debt of about $32,000.00. The remaining money is unaccounted for in the Defendant’s affidavit.
When the Plaintiff demanded the proceeds of the sale of his car, the Defendant did not turn over the proceeds to the Plaintiff.
The Plaintiff filed suit against the Defendant in state court alleging breach of contract, fraud and conversion. On the eve of trial in state court, the Defendant filed for relief under Chapter 7. The Plaintiff then filed this adversary complaint to determine dischargeability and for a money judgment.
The Complaint
The Plaintiffs amended complaint requested that judgment be entered for his actual damages and costs, alleged that punitive damages were warranted, and requested that the debt resulting from said judgment be found not dischargeable under 11 U.S.C. § 523(a)(2), (4), and (6) for false representation, breach of fiduciary duty, and willful and malicious injury (File Document No. 6). The Defendant appeared by Counsel at pre-trial hearings and was granted an extension of time to answer the Amended Complaint. No answer was filed within the extended time to answer. Before the extension of time to *474answer expired, the Defendant filed a consent to the entry of default and a waiver of additional time to plead (File Document No. 7). The Clerk of the Court entered a default on March 19, 1999. Thereafter, the Plaintiff filed the pending motion for default judgment requesting judgment in the amount of $91,700.00, attorney fees and costs, and punitive damages in an amount equal to the actual damages (File Document No. 10).
The Defendant responded to the Plaintiffs motion for default judgment by filing a request that the Court set aside the default, allow him to file an answer, and allow him to proceed to defend (File Document No. 11). The Defendant objected to any award of punitive damages as being beyond the scope of the pleadings.
The Parties appeared by Counsel at a pretrial hearing and presented brief oral argument with respect to the Defendant’s objection to the Plaintiffs motion for default judgment, and the Defendant’s motion to vacate the entry of default. The Parties were given additional time to submit legal memoranda and thereafter the matter was taken under submission on the record as a whole.
Setting Aside Default
The Defendant raised the prospect of a meritorious defense to the allegations under 11 U.S.C. § 523(a)(2)(A) as cause to set aside the entry of default. No meritorious defense as to Sections 523(a)(4) or (a)(6) has been suggested in this record. The determination of whether to set aside the entry of default is made under the “good cause shown” standard provided in Rule 55(c). The provisions of Rule 60(b), which applies when a default judgment has been entered, are not applicable here. Fed.R.Civ.P. 55(c), Fed. R.Bankr.P. 9024. Generally, in the Eighth Circuit there is a preference for a determination of disputed issues on the merits, and default judgments are not favored. Marshall v. Boyd, 658 F.2d 552, 554 (8th Cir.1981). However, an entry of default under Rule 55(a) will not automatically be set aside. Greater St Louis Construction Laborers Welfare Fund v. Little, 182 F.R.D. 592, 595 (E.D.Mo.1998). Under the provisions of Rule 55(c) for setting aside a default, the Defendant must show good cause. Fed.R.Civ.P. Rule 55(c), Fed. R.Bankr.P. Rule 7055. In determining whether to set aside a default, courts typically examine such factors as whether the defaulting party was blameworthy or culpable, whether the defaulting party has a meritorious defense, and whether the other party would be prejudiced if the default were excused. Greater St. Louis Construction Laborers Welfare Fund v. Little, 182 F.R.D. 592, 595 (E.D.Mo.1998) citing Johnson v. Dayton Electric Manufacturing Co., 140 F.3d 781, 783 (8th Cir.1998). Where a party fails to make an initial showing of good cause to set aside a default order, a court does not abuse its discretion by declining to consider the meritoriousness of the defense or the potential prejudice to the plaintiff. Id. citing McMillian/McMillian, Inc. v. Monticello Insurance Co., 116 F.3d 319, 320 (8th Cir.1997).
The Court’s review of the case law has failed to discover a case where, after consenting to the entry of default and waiving additional time to plead, the defendant then moved to set aside the default. The Court does not find that the Defendant’s conduct rose to the level of “contumacious or deliberate disregard” of the Court’s orders. See Ackra Direct Marketing Corp. v. Fingerhut Corp., 86 F.3d 852, 856 (8th Cir.1996). However, the Defendant’s consent to the entry of default here, was knowing and intentional and was more than a “marginal failure” to meet a deadline. Id. A defendant’s consent to the entry of a default and the waiver of additional time to plead with the expectation that an objection to a motion for default judgment will be filed, may be an economical procedure to attempt to limit the disputed issues. However, in this matter, the Defendant has failed to show good cause for setting aside the entry of default as to *475two sections of the Bankruptcy Code. Even though the case law in this Circuit does not require further inquiry, in the absence of cause, under the specific facts of this casé it is appropriate to examine the Plaintiffs allegations as part of the determination of the motion to set aside the default, and as a basis for the request for default judgment.
In his affidavit opposing the entry of default judgment, the Defendant raised the possibility of a meritorious defense as to one count of nondischargeability regarding false representation under Section 523(a)(2)(A). He also argued that the Plaintiff has not shown that the Plaintiff would be unduly prejudiced by the setting aside of the default as to those allegations. See Johnson v. Dayton Electric Manufacturing Company, 140 F.3d 781, 785 (8th Cir.1998). The Defendant stated that at the time he received the vehicle and power of attorney from the Plaintiff he intended to honor his commitment to pay the balance of the proceeds less the commission agreed upon to the Plaintiff thus raising an affirmative defense to the allegations of intent to defraud at the time the agreement was made, an element of false representation under 11 U.S.C. § 523(a)(2)(A). In this default proceeding, the Plaintiff did not support the existence of the usual badges of fraud as evidence of the Defendant’s intent at the time the Defendant agreed to act as agent for the Plaintiff in the sale of the car. The Court has determined that the Plaintiff will not be prejudiced if this portion of the default were to be set aside, and that the Defendant has raised the possibility of a meritorious defense. Therefore, upon the specific facts of this case, the Court will set aside the entry of default as to the allegations under Section 523(a)(2)(A).
Principal/Agent — Section 523(a)(4)
The Plaintiff alleged that he and the Defendant had a principal/agent relationship. An agency relationship is formed when one person agrees to act on behalf of and subject to the control of a second person and the second person agrees that the first person shall act on his behalf and subject to his control. State ex rel. Bunting v. Koehr, 865 S.W.2d 351, 353 (Mo. banc 1993). Agency is a fiduciary relationship. Id. One who receives goods from another for resale to a third party does not automatically become an agent in the transaction. Whether the one who receives the goods for resale becomes an agent or a buyer depends upon whether the parties agree that his duty is to act primarily for the benefit of the one delivering goods to him or is acting primarily for his own benefit. Bunting, 865 S.W.2d at 354. There are three required attributes of agency. “First, an agent ... holds a power to alter legal relations between the principal and third persons and between the principal and himself; second, an agent is a fiduciary with respect to matters within the scope of his agency; and third, the principal has the right to control the conduct of the agent with respect to matters entrusted to him.” State ex rel. Bunting v. Koehr, 865 S.W.2d 351, 353 (Mo. banc 1993) citing Restatement (Second) Agency §§ 12-14.
Generally, an agent is required to account to the principal for all money and property which may come to him by virtue of the agency relationship. The principal has the burden of proof to show the existence of such a relationship and the receipt of money or property by the agent. The burden then shifts to the agent to show that he disposed of the money or property properly. See In the Matter of the Estate of Stickler (First Christian Church of Dexter v. Leazenby), 551 S.W.2d 944, 951 (Mo.Ct.App.1977). Unless the agent and the principal have agreed otherwise, an agent receiving or holding money or property on behalf of the principal has a duty to the principal not to receive or deal with the money or property such that they appear to belong to the agent. Id. The principal’s trust is in the honesty and not necessarily the solvency of the agent. Id. Unless agreed otherwise, the agent may *476not unilaterally change the right of the principal in the specific moneys received into a debt claim against the agent. Id. Although the agent’s receipt of money or proceeds may be lawful, if the agent uses the money or proceeds as his own, such conduct may be conversion. Id.
Here, the record supports a finding that a principal/agent relationship existed between the individual Plaintiff and the individual Defendant. See In re Farbman (Bell Auto Leasing, Inc. v. Farbman), 244 B.R. 135 (Bankr.N.D.Ill.2000). The Defendant agreed to sell the Plaintiffs car on behalf of the Plaintiff. Neither Party has suggested that the Defendant was at any time the buyer of the Plaintiffs car. The Plaintiff entrusted his car to the Defendant and gave the Defendant the car title and his power of attorney to effectuate the sale. The Defendant sold the car for the Plaintiff and received $92,000.00. Of this amount, the Defendant was entitled to keep $300.00 as payment for his services. It was the Defendant’s duty to turn over the remaining proceeds to the Plaintiff.
It is uncontroverted that the proceeds from the sale of the Plaintiffs car were paid to the Defendant, that the Defendant directed that checks representing those proceeds be made payable to himself (or his company), and that the Defendant used the proceeds to pay certain of his own creditors rather than remit the proceeds to the Plaintiff as agreed. The Defendant breached his fiduciary duty to the Plaintiff when he failed, as Plaintiffs agent, to inform his principal of the sale of the car, when he failed to remit the balance of the proceeds to his principal, when he used those proceeds to make payments to his creditors as though the proceeds belonged to him, and finally when he failed to turn over the proceeds upon the demand of his principal.
The Defendant alludes to a business entity or corporation as the entity responsible to the Plaintiff. The Plaintiffs affidavit stated he did not engage the Defendant’s business to act for him. His agreement was with the Defendant personally. The Defendant did not produce evidence to the contrary.
While it is generally true that merely holding a corporate office will not subject one to personal liability for the misdeeds of the corporation, under Missouri law, an officer of a corporation may be held liable for the tortious acts of the corporation if the officer had actual or constructive knowledge of the wrongful acts and participated in or approved of those wrongful acts. Grothe v. Helterbrand, 946 S.W.2d 301, 304 (Mo.Ct.App.1997) (citations omitted). Here, it is unclear whether the corporation was in existence or what its legal status was at the time the wrongful acts were performed. In any case, the wrongful acts were performed by the Defendant and he is not shielded by the doctrine of corporate limited liability.
When a principal suffers a loss from his agent’s failure to follow the instructions given him, a cause of action arises in favor of the principal. Marshall v. Ferguson, 94 Mo.App. 175, 67 S.W. 935, 936 (Mo. Ct.App.1902). The Court has determined that the Defendant has no meritorious defense to the entry of default upon the allegations under Section 523(a)(4).
Conversion — 523(a)(6)
It has also been determined that a principal’s instructions may be violated in such a way as to authorize the principal to proceed against the agent for conversion. Id. “Conversion is the unauthorized assumption and exercise of the right of ownership over the personal property of another to the exclusion of the owner’s rights.” Ware v. McDaniel, 899 S.W.2d 170, 173 (Mo.Ct.App.1995). “The law of conversion is concerned with possession, not title, and its essence is not in the acquisition of the property by the wrongdoer but in the wrongful deprivation of it to the owner. There need only be some *477repudiation of the owner’s right or some exercise of dominion over it inconsistent with some right.” Price v. Ford Motor Credit Company, 530 S.W.2d at 255 (citations omitted). Proof of conversion can be shown either by a tortious taking, or by appropriation to the use of the person in possession indicating a claim of right in opposition to the rights of the owner, or by a refusal to give up possession to the owner on demand. Houston v. Columbia Federal Savings and Loan Association, 569 S.W.2d 211, 214 (Mo.Ct.App.1978). Any unauthorized act of dominion or ownership exercised by one person over the personal property belonging to another in denial of or inconsistent with the owner’s right is conversion. Jackson v. Engert, 453 S.W.2d 615, 617 (Mo.Ct.App.1970).
Ordinarily, a general debt for money will not support a cause of action for conversion. However, when the money can be identified as a discrete fund placed in the custody of another for a definite application, the misappropriation of those funds makes the holder liable for conversion. Seabaugh v. Seabaugh, 839 S.W.2d 49, 50 (Mo.Ct.App.1992). Money belonging to a principal in the hands of an agent is not a “debt” owed by the agent to the principal. In the Matter of the Estate of Stickler (First Christian Church of Dexter v. Leazenby), 551 S.W.2d 944, 951 (Mo.Ct.App.1977). “Notes, bills, checks and other representatives of value will support a cause of action for conversion where they can be described or identified as specific chattel” Lappe & Associates Inc. v. Palmen, 811 S.W.2d 468, 471 (Mo.Ct.App.1991). The money at issue here is specifically identifiable as a res; it being the proceeds from the sale of the Plaintiffs car which was at all times an identifiable fund. See Walker v. Hanke, 992 S.W.2d 925, 934 (Mo.Ct.App.1999). The Defendant’s misappropriation of those proceeds to pay his own debts was a conversion of the property of the Plaintiff. The Defendant’s contention that this is a simple breach of contract has no merit. The facts support a finding of conversion when the Defendant appropriated the property of the Plaintiff, without the Plaintiffs knowledge, and used the converted property as his own to pay creditors. The Court has determined that the Defendant has no meritorious defense to entry of the default upon the allegations under Section 523(a)(6).
Nondischargeability
The Court’s finding that the Defendant breached his fiduciary duty under the principal/agent relationship supports the determination that the debt in not dischargeable under 11 U.S.C. § 523(a)(4). The Court’s finding that the Defendant knowingly converted funds belonging to the Plaintiff supports the determination that the debt is not dischargeable under 11 U.S.C. § 523(a)(6). The Plaintiff has requested that a nondischargeable judgment be entered for his actual damages in the amount of $91,700.00 plus reasonable attorneys fees and costs. The Plaintiffs amount of actual damages and his entitlement to those actual damages have not been disputed. The amount of actual damages is also a sum certain, and no further hearing is required to determine the amount of actual damages.
Judgment will be entered by default in favor of the Plaintiff for actual damages including reasonable attorney fees and costs. The entry of a default as to nondis-chargeability under 11 U.S.C. § 523(a)(2)(A) will be set aside. If the Parties elect to pursue relief under this section, the Defendant will be granted additional time to respond to the allegations under 11 U.S.C. § 523(a)(2)(A). The Defendant’s motion to set aside entry of default as to nondischargeability under 11 U.S.C. §§ 523(a)(4) and (6) will be denied. Leave for additional time for the Defendant to answer as to those counts will not be granted. A pretrial hearing to receive the Parties’ announcement concerning further prosecution under Section 523(a)(2)(A) will be set by the Court.
*478Punitive Damages
The Defendant’s primary objection to the entry of default judgment was based on the Plaintiffs request for punitive damages which the Defendant characterized as being beyond the scope of the pleadings. The Defendant did not dispute the substantive facts as presented by the Plaintiff and did not contest the award of actual damages including interest from January 15, 1998, or the award of the Plaintiffs reasonable attorney fees and costs.
Under the federal notice pleading rules, the allegations in Plaintiffs pleadings were sufficient to put the Defendant on notice that the Plaintiff claimed to be entitled to relief in the form of punitive damages. The Defendant suffered no prejudice from the lack of a stated amount of punitive damages. Under Missouri law, the entitlement to punitive damages and the amount of the award is within the discretion of the court and is not to be measured by a pre-set formula. Price v. Ford Motor Credit Company, 580 S.W.2d 249, 256 (Mo.Ct.App.1975). However, neither the allegations nor the prayer in the Adversary Complaint clearly set forth a demand for judgment for the relief of an award of punitive damages. See Fed.R.Civ.P. 8(a); Fed. R. Bankr.P. 7008.
The prayer in the Amended Complaint requested the following relief:
WHEREFORE, Plaintiff prays for judgment that the above-referenced debt to Plaintiff be excepted from the debtor’s discharge, that the court enter judgment in favor of Plaintiff in the amount of $91,700.00 plus 9% interest from January 5, 1998, that the court grant Plaintiffs attorney’s fees, and for such other and further relief as the court deems just and proper.
Amended Complaint to Determine Dis-chargeability, Doc. 6, March 1, 1999.
The Defendant alleged that he has a meritorious defense to the award of punitive damages in that he did not have the subjective intent to harm the Plaintiff. This position may be in the nature of an affirmative defense to the award of punitive damages, but it is not a meritorious defense to the allegations under Section 523(a)(6). Where, as here, an agent knowingly converts property of the principal to his own use such that the property cannot be restored to the principal, the agent has wilfully injured the principal. See Burnett v. Griffith, 769 S.W.2d 780, 789 (Mo. en banc 1989). Such an act satisfies the requirement that the conversion be malicious in order to be found nondischargeable under Section 523(a)(6). In re Foust (United States v. Foust), 52 F.3d 766, 769 (8th Cir.1995).
The allegations in Plaintiffs original and amended complaint plainly alleged that the Defendant’s conduct was outrageous and condemnable and stated in Paragraph 22 that punitive damages were warranted. These allegations are sufficient under federal notice pleading rules to put the Defendant on notice that the Plaintiff may seek punitive damages. That the Plaintiff stated no specific amount of punitive damages does not prejudice the Defendant. However, in these circumstances, the failure to set forth a demand for a judgment for punitive damages, and the Defendant’s assertion of a meritorious defense have provided cause to set aside the entry of default as to the request for punitive damages. Under the circumstances of this case, even if a specific amount had been pled, a hearing would be held to determine the appropriateness and amount of any punitive damage award. See Fed.R.Civ.P. 55(b); Fed. R. Bankr.P. 7055.
The purpose of punitive damages is to deter the repetition of certain conduct by the same party by inflicting punishment on that party and to discourage similar conduct by other parties by serving as an example. Burnett, 769 S.W.2d at 787. An award of punitive damages requires a showing of a culpable mental state of the part of the defendant. Id. *479In determining what conduct permits the award of punitive damages, Missouri follows the Restatement (Second) of Torts, § 908(2) (1979) that states, “[p]unitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or reckless indifference to the rights of others.” Burnett, 769 S.W.2d at 789.
If the Parties determine that further proceedings are necessary, the Court will entertain the Plaintiffs request for leave to amend the complaint to include a demand for punitive damages more explicitly. The Defendant will be granted additional time to respond to the amendment, and the matter will be set for such further hearings on the issue of punitive damages as are necessary. No further hearing is required as to actual damages.
ORDER
On consideration of the record as a whole, and consistent with the determinations set out in the Memorandum in this matter,
IT IS ORDERED that the motion of Patrick Joseph Lomantini, Defendant, to set aside the consent entry of default as to the allegations of Louis Payne, Plaintiff, under 11 U.S.C. § 523(a)(2)(A) is granted for cause shown; and that the Defendant’s motion to set aside the consent entry of default as to the Plaintiffs request for punitive damages is granted for cause shown; and
That the Defendant’s motion to vacate the consent entry of default as to the allegations under 11 U.S.C. §§ 523(a)(4) and (a)(6) is denied; and that the Defendant’s request for leave to file an answer or other response to the allegations under Sections 523(a)(4) and (a)(6) is denied; and
That the Plaintiffs “Motion for Entry of Default Judgment” is granted in part and denied in part as set out herein; and that by default, judgment on this Adversary Complaint is entered in favor of the Plaintiff and against the Defendant in that, prior to the commencement of this case, said Defendant as Plaintiffs agent, breached his fiduciary duty to the Plaintiff by failing to inform his Principal of the sale of the Principal’s motor vehicle; by failing to remit the balance of the proceeds of said sale to his Principal; by using the proceeds of said sale to pay the Defendant’s debts, or for the payment of obligations that ultimately were of benefit to the Defendant; and by failing to turn over the proceeds of said sale upon Plaintiffs demand; and
That as a direct result of the Defendant’s breach of his fiduciary duty as Plaintiffs agent, the Plaintiff suffered damages in the amount of $91,700.00; and
That, by default, judgment on this Adversary Complaint is entered in favor of the Plaintiff and against the Defendant, in that said Defendant converted the Plaintiffs property to the Defendant’s own use, without the knowledge or consent of the Plaintiff; and that as a direct result of the Defendant’s conversion, the Plaintiff suffered damages in the amount of $91,700.00; and
That by default, as and for judgment in this matter, the Defendant is to pay to the Plaintiff actual damages in the amount of $91,700.00 plus interest from January 15, 1998, plus attorney’s fees in the amount of $8,935.50, plus costs in the amount of $601.90; and
That this debt and the judgment awarded here are not dischargeable in this Bankruptcy case under 11 U.S.C. §§ 523(a)(4) and (a)(6).
IT IS FURTHER ORDERED that this matter is continued and reset to September 6, 2000 at 10:00 a.m. in Bankruptcy Court No. 1, One Metropolitan Square, 211 North Broadway, 7th Floor, St. Louis, Missouri as a continued pretrial hearing; and that not later than fifteen days after the date of this Order, Counsel for the Parties are to meet and attempt to resolve any remaining disputed issues by agreement; and if the matter is not set-*480tied, the Parties are to agree upon the extent of any further proceedings that may be necessary with respect to the allegations under Section 523(a)(2)(A) and the Plaintiffs allegations and request for punitive damages; and if the matter is not settled, the Parties are to appear at the continued pretrial hearing set out above to select a date for further proceedings on the Plaintiffs request with respect to the allegations under Section 523(a)(2)(A), and with respect to the Plaintiffs request for punitive damages and the Defendant’s opposition thereto. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493075/ | ORDER ON MOTION FOR ATTORNEYS FEES, COSTS AND DAMAGES
ALEXANDER L. PASKAY, Bankruptcy Judge.
THE MATTER under consideration in this involuntary Chapter 7 case is a Motion *566for Attorneys Fees, Costs and Damages filed by the law firm of Miller and Hollander, filed pursuant to § 303(i)(1), (A) & (B) and § 303(i)(2)(A) & (B). Movant seeks sanctions against the initial petitioning creditor, Crossroads Real Estate, Inc. (Crossroads), and petitioning creditor, William R. Seach (Seach).
The record reveals that on January 14, 2000, this Court entered an order and determined that the Debtor, James Lee, is indebted to more than 12 creditors and, therefore, even though Seach joined in the Petition, there was an insufficient number of petitioning creditors. This Court, therefore, dismissed the Involuntary Petition.
The Motion is based on the contention of the Debtor that at the time the involuntary was filed, Crossroads and Seach knew or had reason to believe that the Debtor had more than 12 creditors; that the Petition was filed as a deliberate attempt to cause personal and business financial damage to the Debtor. Movant seeks compensation in the total amount of $22,520 and reimbursement of expenses totaling $930. As noted, the Motion is filed pursuant to 11 U.S.C. § 303(i). The award of fees, costs and damages is contingent in every case on three prerequisites: (1) the court must have dismissed the petition; (2) the dismissal must be other than a consent by all petitioners and the debtor; (3) the debtor did not waive its right to recovery under the statute. In re R. Eric Peterson Const. Co., Inc., 951 F.2d 1175 (10th Cir.Utah 1991). Although it is generally recognized that an award of fees and costs is within the court’s discretion, In re Fox Island Square Partnership, 106 B.R. 962 (Bankr.N.D.Ill.1989), some courts have held that an award of costs and fees is generally appropriate in all cases where the debtor successfully defends against an involuntary petition. In re K.P. Enterprise, 135 B.R. 174 (Bankr.D.Me.1992). The award of fees and costs, according to some courts, becomes a rebuttable presumption. Others, however, have held that the burden shifts to the petitioning creditors once an involuntary case is dismissed and they must prove that an award of fees and costs is inappropriate. In re Ross, 135 B.R. 230 (Bankr.E.D.Pa.1991).
In the present instance, this Court is satisfied that an award of attorneys fees and costs is appropriate based on the fact that the petitioning creditors had a duty to ascertain whether or not this Debt- or had less or more than twelve creditors. However, the amount of the fee award sought in this Court’s opinion is excessive. The case presented no esoteric, novel legal questions. Yet, the attorney claimed to have spent 34 hours on legal research. In addition, the attorney charged a total of $2,400 for travel and billed at the regular hourly rate, which is clearly inappropriate. Considering the schedule submitted by the attorney, this Court is satisfied that the reasonable compensation for attorneys fees in this instance is $17,550 and the attorney is also entitled to a cost reimbursement in the amount of $930.
Accordingly, it is
ORDERED, ADJUDGED AND DECREED that the Motion for Attorneys Fees, Costs and Damages be, and the same is hereby, granted. It is further
ORDERED, ADJUDGED AND DECREED that Miller and Hollander be, and the same is hereby, awarded a reasonable compensation of $17,550 and reimbursement of costs in the amount of $930 for a total award of $18,480. It is further
ORDERED, ADJUDGED AND DECREED that Petitioning Creditor, Crossroads and Seach are hereby directed to pay the amount of $18,480.00 to Miller and Hollander within thirty days from the date of the entry of this Order. Upon the failure of Crossroads and Seach to comply with the directives of this Court, Miller and Hollander may file a motion for the entry of a money judgment against Crossroads and Seach. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484387/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
§
IN RE: YVONNE ROSALES, § No. 08-22-00199-CR
Relator. § AN ORIGINAL PROCEEDING
§ IN MANDAMUS
§
ORDER
The Court GRANTS the Real Party in Interest State of Texas, All attorneys and their staff
involved in this case’s first motion for extension of time within which to file the response until
December 10, 2022. NO FURTHER MOTIONS FOR EXTENSION OF TIME TO FILE THE
REAL PARTY IN INTEREST STATE OF TEXAS, ALL ATTORNEYS AND THEIR STAFF
INVOLVED IN THIS CASE’S RESPONSE TO RELATOR’S PETITION FOR WRIT OF
MANDAMUS WILL BE CONSIDERED BY THIS COURT.
It is further ORDERED that the Hon. Yvonne Rosales, the Real Party in Interest’s attorney,
prepare the response and forward the same to this Court on or before December 10, 2022.
IT IS SO ORDERED this 10th day of November, 2022.
PER CURIAM
Before Rodriguez, C.J., Palafox and Alley, JJ. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484383/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
§
WC 4th AND RIO GRAND, LP, No. 08-22-00073-CV
§
Appellant, Appeal from the
§
v. 345th District Court
§
LA ZONA RIO, LLC, of Travis County, Texas
§
Appellee. (TC# D-1-GN-20-007177)
§
O R D E R
The Court GRANTS the Appellant’s third motion for extension of time within which to
file the brief until November 22, 2022. NO FURTHER MOTIONS FOR EXTENSION OF TIME
TO FILE THE APPELLANT’S BRIEF WILL BE CONSIDERED BY THIS COURT.
It is further ORDERED that the Hon. Brent C. Perry, the Appellant’s attorney, prepare the
Appellant’s brief and forward the same to this Court on or before November 22, 2022.
IT IS SO ORDERED this 15th day of November, 2022.
PER CURIAM
Before Rodriguez, C.J., Palafox, and Alley, JJ. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484406/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
KEVIN PHILLIP RASPPERRY, No. 83894
Appellant, we
VS. = 3 :
THE STATE OF NEVADA, . Fr L. E D
Respondent. : NOV 76 2022
ORDER OF AFFIRMANCE
This is an appeal from a judgment of conviction, pursuant toa
jury verdict, of four counts of driving under the influence resulting in death
or great bodily harm, four counts of reckless driving causing death or great
bodily harm, one count of felony driving under the influence, and two counts
of possession of a controlled substance. Eighth Judicial District Court,
Clark County; Tierra Danielle Jones, Judge. Appellant Kevin Phillip
Raspperry raises nine contentions on appeal.!
First, appellant argues that his speedy trial rights were
violated. We disagree. As to the statutory right to a speedy trial under NRS
178.556, there was good cause for the nearly 22-month delay. See Huebner
v. State, 103 Nev. 29, 31, 731 P.2d 1330, 1332 (1987) (stating that dismissal
is mandatory under NRS 178.556 only if no good cause is shown for the
delay). In particular, the delay in bringing appellant to trial was
attributable to motion practice, the COVID-19 pandemic, and
accommodating the district court’s calendar. As to the constitutional right
to a speedy trial, the delay between arraignment and trial was sufficient to
trigger a speedy-trial analysis, State v. Inzunza, 135 Nev. 513, 516-17, 454
1Pursuant to NRAP 34(f)(1), we have determined that oral argument
is not warranted in this appeal.
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P.3d 727, 731 (2019) (holding that a delay approaching one year is sufficient
to trigger constitutional speedy-trial analysis), but the relevant factors
weigh against a violation. See Barker v. Wingo, 407 U.S. 514, 530 (1972)
(identifying the factors to be balanced in deciding whether the right to a
speedy trial has been violated). The reasons for the delay were valid and
appropriate. Appellant litigated a motion to dismiss which was denied, then
waived his speedy trial rights, and then agreed upon delays for this court to
resolve pending cases relevant to that motion, and the remainder of the
delay was compelled by the district court’s calendar and other pandemic
related delays. See id. at 531 (explaining that deliberate attempts to delay
the trial by the State should weigh against the government, neutral factors
like negligence or overcrowded courts should be weighted less heavily, and
valid reasons may justify appropriate delay); cf. United States v. Olsen, 21
F.4th 1036, 1047 (9th Cir. 2022) (holding that “a global pandemic that has
claimed more than half a million lives in this country ... falls within such
unique circumstances to permit a court to temporarily suspend jury trials
in the interest of public health”); United States v. Smith, 460 F. Supp. 3d
981, 984 (E.D. Cal. 2020) (“Almost every court faced with the question of
whether general COVID-19 considerations justify an ends-of-justice
continuance and exclusion of time [from speedy-trial considerations] has
arrived at the same answer: yes.”). And appellant has not demonstrated
prejudice. See Barker, 407 U.S. at 532 (explaining that prejudice “should
be assessed in the light of the interests of defendants which the speedy trial
right was designed to protect”). Appellant asserted that he faced a more
aggressive prosecution due to the severity of the murder charge and
suffered anxiety due to the length of the delay and severity of the murder
charge. The record does not indicate that the prosecution assignment track
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prejudiced appellant. While the anxiety to the accused is a harm that the
speedy trial right was designed to guard against, see Inzwnza, 135 Nev. at
518, 454 P.3d at 732, as so much of the delay was a consequence of
appellant’s motion to dismiss the murder charge, we conclude that
appellant has not demonstrated a violation of his constitutional right to a
speedy trial.
Second, appellant argues that there was insufficient evidence
adduced at trial to show that he was driving the car that collided with the
victim’s vehicles. He also argues that there was inadequate proof that he
possessed the controlled substances in the backpack in the car.
Viewing the evidence in the light most favorable to the
prosecution, we conclude that a “rational trier of fact could have found the
essential elements of the crime[s] beyond a reasonable doubt.” McNair v.
State, 108 Nev. 53, 56, 825 P.2d 571, 573 (1992) (quoting Jackson v.
Virginia, 443 U.S. 307, 319 (1979)); see Bolden v. State, 97 Nev. 71, 73, 624
P.2d 20, 20 (1981) (holding that a jury’s verdict will not be disturbed on
appeal where substantial evidence supports it). Witnesses testified that a
gray Toyota Avalon, registered to appellant’s mother, careened through a
red light at roughly 100 miles per hour. The Avalon struck an SUV in the
intersection, causing the SUV to strike another car and a bus. The heavily
damaged Avalon came to rest over 200 feet away from the collision. A
medical technician testified that he extricated appellant from the driver’s
seat of the Avalon and saw no one else in the car. A responding officer also
observed appellant being removed from the driver’s side of the vehicle.
Witnesses also testified that a backpack with containers of MDMA and
methamphetamine was recovered from the Avalon. Testing showed
appellant’s blood alcohol content was .205 percent under two hours after the
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collision and revealed the presence of MDMA and marijuana. Based on this
evidence, a rational juror could conclude beyond a reasonable doubt that
appellant was impaired, drove recklessly through the intersection, and
caused multiple collisions resulting in great bodily harm and death while in
possession of controlled substances. See NRS 484C.110(1)(c) (driving under
the influence); NRS 484C.430(1) (driving under the influence causing death
or substantially bodily harm); NRS 484B.653(1) (reckless driving); NRS
453.336 (possession of a controlled substance).
Third, appellant argues that the district court erred in
admitting blood alcohol evidence without an adequate foundation and chain
of custody, pointing to a mistake in the documentation. We discern no abuse
of discretion. See Mcelellan v. State, 124 Nev. 263, 267, 182 P.3d 106, 109
(2008). The State established a chain of custody through the testimony of
the officer who documented the blood draw and the phlebotomist who
performed the blood draws. Nothing in the record suggests that the blood
samples were not those obtained from appellant or that any discrepancy in
the chain of custody rendered it unsound. See Sorce v. State, 88 Nev. 350,
352-53, 497 P.2d 902, 903 (1972). Although the documentation had errors
in that the time of the blood draws was written into the “incident time” box
on the form, testimony established that the samples shared the same event
number as the police report for the collision investigation. Thus, any
discrepancies in the documentation went to the weight of the evidence, not
its admissibility. See Hughes v. State, 116 Nev. 975, 981, 12 P.3d 948, 952
(2000).
Fourth, appellant contends that the testimony of a witness
through a teleconferencing application violated his right to confrontation,
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and the district court failed to make sufficient findings that it was
necessary. We agree.
Courts may permit witnesses to appear by simultaneous
audiovisual transmission at trial provided that such a presentation “is
necessary to further an important public policy and only where the
reliability of the testimony is otherwise assured.” Lipsitz v. State, 135 Nev.
131, 136, 442 P.3d 138, 143 (2019) (applying the standard in Maryland v.
Craig, 497 U.S. 836 (1990), to two-way audiovisual communication); see
SCR Part IX-A(B) Rule 2. Simultaneous audiovisual transmission of
testimony may “be used only after the trial court hears evidence and makes
a case-specific finding that the procedure is necessary to further an
important state interest.” Lipsitz, 135 Nev. at 136-37, 442 P.3d at 143.
Here, the district court noted that administrative orders related to the
COVID-19 pandemic authorized teleconferenced testimony and that the
method of transmission permitted the jury to see the witness and the
defense to cross-examine him, ensuring reliability. See Craig, 497 U.S. at
845-46. However, the district court did not make the required case-specific
findings that the witness who testified via audiovisual transmission was
especially vulnerable to COVID-19 and _ therefore needed the
accommodation. See Lipsitz, 135 Nev. at 136-37, 442 P.3d at 143.
Although the State has not argued that any error in this respect
was harmless, we conclude that our sua sponte review for harmlessness is
appropriate here.? See Belcher v. State, 136 Nev. 261, 268, 464 P.3d 1013,
2The State’s argument that “[a]ppellant fails to explain who his
defense was in any way prejudiced by the use of live audio-visual
transmission[,]” does not meet its burden of proving that any error was
harmless beyond a reasonable doubt. See Medina, 122 Nev. at 355, 143 P.3d
at 477.
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1024 (2020) (providing that where the State fails to argue that error is
harmless, this court may still determine that an error was harmless after
considering the following factors: “(1) the length and complexity of the
record, (2) whether the harmlessness of an error is certain or debatable, and
(3) the futility and costliness of reversal and further litigation.”); Medina v.
State, 122 Nev. 346, 355, 143 P.3d 471, 477 (2006) (concluding that when
State can show beyond a reasonable doubt that Confrontation Clause error
did not contribute to the verdict, reversal is unnecessary); see also Chapman
v. California, 386 U.S. 18, 23-24 (1967) (adopting harmless error standard).
The record in this case, which has only three days of testimony about the
cause of a traffic collision, is not voluminous or complex. The harmlessness
of the error is not debatable given that other witnesses provided similar
testimony as the challenged witness—that they saw appellant in or being
removed from the Avalon following the collision—and other evidence linked
appellant to the Avalon—namely, the vehicle registration in his mother’s
name. See Medina, 122 Nev. at 355, 143 P.3d at 477 (recognizing that court
may consider the extent to which testimony is cumulative of other evidence
and strength of the State’s case in determining whether its admission was
harmless). Because we are confident that a rational jury would have found
appellant guilty without the remote testimony, it would be futile to reverse
and remand because another trial would reach the same result. See Brooks,
772 F.3d at 1172 (concluding that remand for retrial would be futile where
there is overwhelming evidence of guilt). Accordingly, we conclude that the
confrontation error due to the remote testimony was harmless beyond a
reasonable doubt. |
Fifth, appellant contends that the district court erred in
admitting evidence of uncharged conduct. He asserts testimony that the
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vehicle control module did not record the charged event because it was full
of data implied that he had caused other collisions. We discern no plain
error. See Green v. State, 119 Nev. 542, 545, 80 P.3d 93, 94-95 (2003)
(reviewing unobjected-to error for plain error affecting substantial rights).
The reference to the module being full was not an unmistakable reference
to appellant’s prior bad acts as the record indicates that the car appellant
was driving was registered to his mother. See Paiterson uv. State, 111 Nev.
1525, 1530, 907 P.2d 984, 987 (1995) (“An error is plain if the error is so
unmistakable that it reveals itself by a casual inspection of the record.”
(internal quotation marks omitted)). Further, data about the event was
retrieved from one of the victim’s cars, which indicates that the data filling
the module on appellant’s vehicle may have included all events involving
that car regardless of who was at fault. Additionally, appellant did not
demonstrate substantial prejudice given the overwhelming evidence of
guilt.
Sixth, appellant contends that the district court erred in not
inquiring into juror bias when a juror informed the court that he knew a
witness during a break in that witness’s testimony. After being informed of
the juror’s statement, counsel for appellant acquiesced to the court’s plan to
question the juror but then did not object when the court failed to do so after
it reconvened. We conclude that appellant failed to demonstrate plain error
affecting his substantial rights. See Green, 119 Nev. at 545, 80 P.3d at 94-
_ 95; ef., Daly v. State, 99 Nev. 564, 568, 665 P.2d 798, 801 (1983) (recognizing
that a contemporaneous objection is necessary to preserve error related to
a court’s failure to enforce an earlier ruling); McCall v. State, 97 Nev. 514,
516, 634 P.2d 1210, 1211 (1981) (recognizing that the failure to object to an
unqualified juror when grounds for disqualification are known constitutes
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waiver). The failure to inquire into potential bias constituted error that was
plain from a casual inspection of the record. See Sanders v. Sears-Page, 131
Nev. 500, 507, 354 P.3d 201, 206 (Ct. App. 2015) (recognizing trial court’s
duty to question jurors when information suggesting actual bias arises).
However, appellant did not establish prejudice—i.e., that a biased juror
served on his jury. See Preciado v. State, 130 Nev. 40, 44, 318 P.3d 176, 178
(2014) (“A district court’s erroneous denial of a challenge for cause is
reversible error only if it results in an unfair empaneled jury.”); Blake v.
State, 121 Nev. 779, 796, 121 P.3d 567, 578 (2005) (concluding that
appellant not denied right to impartial jury so long as “the jury actually
seated [was] impartial”). The juror’s mere acquaintance with the witness
did not establish actual or implied bias. See United States v. Bradshaw, 787
F.2d 1385, 1390 (10th Cir. 1986) (concluding that, while a potential juror’s
acknowledgment that he was acquainted with government witnesses would
necessitate further inquiry, that fact in and of itself does not compel a
conclusion of bias); Tinsley v. Borg, 895 F.2d 520, 528-29 (9th Cir. 1990)
(noting that, absent actual bias, courts have declined to find implied bias
based on a juror’s personal acquaintance with a witness); see also Tomlin v.
State, 81 Nev. 620, 624-25, 407 P.2d 1020, 1022 (1965) (concluding that
district court did not err in retaining juror after she informed district
attorney’s office she knew a witness but assured court she could remain
impartial). Additionally, trial counsel for both parties did not appear
concerned that the relationship between the witness and juror was anything
more significant than a past work acquaintanceship. Under these
circumstances, we conclude that appellant has not demonstrated that the
trial court’s failure to question the juror affected his substantial rights.
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Seventh, appellant contends that comments made by the
prosecutor indicating that appellant was blaming the car or police
investigation constituted improper disparagement of legitimate defense
tactics. Appellant did not object to either argument, and we discern no plain
error, Valdez v. State, 124 Nev. 1172, 1190, 196 P.3d 465, 477 (2008). A
prosecutor may not “ridicule or belittle the defendant or the case.” Earl v.
State, 111 Nev. 1304, 1311, 904 P.2d 1029, 1033 (1995); see Browning v.
State, 124 Nev. 517, 534, 188 P.3d 60, 72 (2008) (recognizing that a
prosecutor’s disparagement of defense counsel or the legitimate tactics of
defense counsel is improper). But here the challenged comments, when
considered in context, did not belittle the defense case or tactics. See Knight
v. State, 116 Nev. 140, 144-45, 993 P.2d 67, 71 (2000) (observing that “[a]
prosecutor’s comments should be viewed in context” when considering
whether a defendant should be afforded relief). Instead, the comments
responded to the substance of appellant’s cross-examination of State
witnesses, which sought to discredit the investigation or indicate a fault in
the vehicle may have caused the collision. That response was within the
bounds of permissible argument. See Greene v. State, 113 Nev. 157, 178,
931 P.2d 54, 67 (1997) (recognizing rebuttal arguments may permissibly
respond to issues raised by the defense’s closing), receded from on other
grounds by Byford 'v. State, 116 Nev. 215, 235, 994 P.2d 700, 713 (2000).
Eighth, appellant argues that his aggregate sentence was
excessive and disproportionate given the collision was the result of his drug
and alcohol addiction rather than malice.
We discern no abuse of discretion. See Martinez v. State, 114
Nev. 735, 737-38, 961 P.2d 148, 145 (1998) (recognizing that sentencing
courts have wide discretion in imposing sentence); Sims v. State, 107 Nev.
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9
438, 439, 814 P.2d 63, 64 (1991) (recognizing that the legislature and
sentencing courts are afforded great deference and a reviewing court “rarely
will be required to engage in extended analysis to determine that a sentence
is not constitutionally disproportionate” (quoting Solem v. Helm, 463 U.S.
277, 290 n.16 (1983))). A sentence that is within the statutory limits is not
“cruel and unusual punishment unless the statute fixing punishment is
unconstitutional or the sentence is so unreasonably disproportionate to the
offense as to shock the conscience.” Blume v. State, 112 Nev. 472, 475, 915
P.2d 282, 284 (1996) (quoting Culverson v. State, 95 Nev. 433, 435, 596 P.2d
220, 221-22 (1979)). Appellant’s sentence falls within the parameters of the
relevant statutes, and he does not allege those statutes are
unconstitutional. See NRS 193.130(2)(d); NRS 453.336(2)(b); NRS
484B.653(9); NRS 484C.400(1)(c)} NRS 484C.430(1). The district court
sentenced him within the guidelines of NRS 176.035(1) to concurrent and
consecutive sentences, which was in the district court’s discretion, see
Pitmon v. State, 131 Nev. 128, 128-29, 352 P.3d 655, 659 (Ct. App. 2015),
and we conclude that the aggregate sentence imposed is not so grossly
disproportionate so as to shock the conscience and constitute cruel and
unusual punishment. See Harmelin v. Michigan, 501 U.S. 957, 1001 (1991)
(plurality opinion) (explaining the Eighth Amendment does not require
strict proportionality between crime and sentence; it forbids only an
extreme sentence that is grossly disproportionate to the crime).
Lastly, appellant contends that the cumulative effect of errors
during trial warrants relief. “When evaluating a claim of cumulative error,
we consider the following factors: ‘(1) whether the issue of guilt is close, (2)
the quantity and character of the error, and (3) the gravity of the crime
charged.” Valdez, 124 Nev. at 1195, 196 P.3d at 481 (quoting Mulder v.
SupREME COURT
OF
NEVADA
©) 197A Ge
10
Supreme Court
OF
NEVADA
(0) 19474 aR
State, 116 Nev. 1, 17, 992 P.2d 845, 854-55 (2000). Appellant has
demonstrated two errors: the erroneous admission of teleconferenced
testimony and the failure to question a juror regarding potential bias.
While the crimes charged were serious, the State presented overwhelming
evidence of appellant’s guilt. Further, the errors did not have significant
cumulative effect as the error admitting remote testimony was harmless
due to the cumulative nature of the testimony and the record did not
indicate that the juror was biased.
Having considered appellant’s contentions and concluding that
they do not warrant relief, we
ORDER the judgment of conviction AFFIRMED.*
Od xee Rep Od.
Parraguirre
Ab ofr t
Stiglich Gibbons
, ord.
cc: Hon. Tierra Danielle Jones, District Judge
Steven S. Owens
Attorney General/Carson City
Clark County District Attorney
Eighth District Court Clerk
3The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
11 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484413/ | State of New York OPINION
Court of Appeals This opinion is uncorrected and subject to revision
before publication in the New York Reports.
No. 74
The People &c.,
Respondent,
v.
Ronald K. Johnson,
Appellant.
Timothy S. Davis, for appellant.
Kaylan C. Porter, for respondent.
WILSON, J.:
In People v Taranovich (37 NY2d 442 [1975]), we set out the factors to be weighed
when considering whether pretrial delays rise to the level of a constitutional deprivation of
the right to a speedy trial. In this case, the Appellate Division misinterpreted our test in
several material ways. We therefore reverse.
-1-
-2- No. 74
I
The issue in this case is one of pre-indictment, not post-indictment, delay.
Mr. Johnson’s conviction stems from the sexual assault of a 14-year-old girl on October 4,
2006. The time between the crime and Mr. Johnson’s indictment was nearly eight years.
The police found the victim lying on the street, intoxicated and unresponsive. They
took her to the hospital, where she stated that she had met a 15-year-old male who supplied
her with alcohol. She said she did not remember once she began drinking. The day after
her admission to the hospital, the Rochester Police Department (RPD) submitted the
victim’s clothing and the evidence collected through the sexual assault kit to the Monroe
County Crime Laboratory.
The victim remained in the hospital for more than one week. After her discharge
from the hospital, RPD officers interviewed her again. During that interview, she identified
the person with whom she was drinking the night of the assault as “Shamer.” RPD officers
showed her photo arrays containing a picture of Shamer (whose real name was known to
the police), but she did not identify anyone in the photo arrays. The RPD then moved the
case to “field” status, meaning that there were “solvability factors” present and the
investigation would continue. An RPD officer tried to contact Shamer, but he was no
longer residing at the address the RPD had for him. In January of 2007, lacking any further
investigative leads, the RPD moved the case to “office” status, meaning that the RPD had
no “current investigative leads” and would not work on the case absent new information.
In November 2007, thirteen months after receipt by the Monroe County Crime
Laboratory, a forensic biologist in that office processed the victim’s sexual assault kit and
-2-
-3- No. 74
clothing. The analysis detected sperm and semen on multiple swabs taken from the victim
and on her underwear. According to the People, the lab faced a substantial backlog of cases
for DNA testing.
The lab did not begin testing the victim’s sample until December 2009. In January
2010, the lab entered the sample into the Combined DNA Index System (CODIS) database
for comparison with DNA profiles for convicted offenders and persons with open case
files. In February 2010, the lab was alerted that the samples taken from the victim matched
the DNA profile in CODIS for Mr. Johnson; the lab notified the police of the match that
same week. At this point, three years and three months had elapsed from the date of the
assault.
The RPD reopened the case and assigned it to an investigator in April 2010. The
investigator made two attempts to contact the victim by calling her mother. The mother
said she did not have the victim’s number and informed him that the victim no longer lived
with her but that she would pass on the messages.1 In January 2011, having failed to locate
the victim, the investigator closed the case with the notation “victim uncooperative”.
Almost two years later, in December 2012, the investigator received a phone call
from a colleague whose wife happened to work as a counselor for the victim. The victim
had told her counselor that she wished to pursue the case, which was relayed to the
investigator by his colleague. The investigator met with the victim, who said she was
unaware that the investigator had tried to reach her through her mother. The investigator
1
The victim was in foster care and did not, at the time of these calls, live with her mother.
-3-
-4- No. 74
showed her a photo array containing Mr. Johnson’s picture, but she identified one of the
fillers as her potential assailant. Shortly thereafter, the investigator injured his knee and
was out of the office for six weeks.
In August 2013, the case was assigned to an assistant district attorney. Between
August and October 2013, the ADA unsuccessfully attempted to call the victim. In
October, he recruited a different investigator to help him find the victim. That investigator
located and met with the victim, at which time she identified Mr. Johnson as her assailant
from a photo array. Three weeks later, the investigator met with and obtained a DNA
sample from Mr. Johnson, who was incarcerated for an unrelated crime. Thereafter, the
investigator attempted to reach the victim for several months but was unable to do so; her
number was disconnected in November and was disconnected when he tried it again in
February 2014. The ADA nevertheless scheduled a grand jury presentation for February
14. Although the victim was subpoenaed to appear and confirmed that she would do so,
she arrived several hours late, and the ADA did not present the case to the grand jury.
At a subsequent meeting with the victim, the ADA realized that he was missing
some of the police paperwork. The ADA also discovered that one of the officers involved
in the case had passed away, and later realized that he required proof of Mr. Johnson’s age,
which he did not know, to establish the second count in the indictment, namely that the
perpetrator was at least 18 years old. Eventually, he presented the case to the grand jury
on June 4, 2014—7 years and 9 months after the crime. Mr. Johnson was indicted on one
count of rape in the first degree and one count of rape in the second degree.
-4-
-5- No. 74
Mr. Johnson moved to dismiss the indictment, alleging that the delay in prosecution
deprived him of his right to due process under the State and Federal Constitutions.
Following a hearing regarding the delay, County Court denied his motion to dismiss and
Mr. Johnson subsequently accepted the District Attorney’s offer to plead guilty to the
second-degree rape charge in satisfaction of the indictment. Mr. Johnson was sentenced
accordingly. The Appellate Division affirmed the conviction (193 AD3d 1429 [4th Dept
2021]).2 A Judge of this court granted Mr. Johnson leave to appeal (37 NY3d 993 [2021]).
II
In People v Taranovich, we established the following five factors for assessing
speedy trial claims: (1) the extent of the delay; (2) the reasons for the delay; (3) the nature
of the underlying charge; (4) whether there has been an extended period of pretrial
incarceration; and (5) whether there is any indication that the defense has been impaired
by reason of the delay (37 NY2d at 445). Although this case concerns pre-indictment delay
and is analyzed as a due process claim, we nevertheless apply the test established in
Taranovich (see People v Vernace, 96 NY2d 886, 887 [2001]).
The Taranovich framework is a holistic one—that is, “no one factor or combination
of the factors . . . is necessarily decisive or determinative of the speedy trial claim” (id. at
445). We have also noted that the factors must be evaluated “on an ad hoc basis” (id.)—
meaning that the analysis must be tailored to the facts of each case. Here, although reciting
2
The Appellate Division dismissed so much of the appeal from the judgment as challenged
the sentence, as Mr. Johnson had since been resentenced.
-5-
-6- No. 74
the Taranovich factors and correctly acknowledging our subsequent caselaw expounding
on those factors, the Appellate Division deviated from our Taranovich framework in
several significant ways.
With respect to the first factor, the length of delay, as we explained in Taranovich
itself, while the greater the delay, the more likely the harm to the defendant, there is no
specific length of time that automatically results in a due process violation (id. at 445-446).
The Appellate Division noted that “the parties agree that the first factor favors the
defendant” (193 AD3d at 1430).
As to the second factor, reasons for delay, these will vary from case to case, but we
have explained that “a determination made in good faith to defer commencement of the
prosecution for further investigation or for other sufficient reasons, will not deprive the
defendant of due process of law even though the delay may cause some prejudice to the
defense” (People v Singer, 44 NY2d 241, 254 [1978]; Wiggins, 31 NY3d at 13; People v
Decker, 13 NY3d 12, 14 [2009]; Vernace, 96 NY2d at 888). The Appellate Division
“assume[d], arguendo, that the People failed to establish ‘good cause’ for the ‘protracted’
preindictment delay” (193 AD3d at 1430). However, some examination of the reason for
the delay is required. Instead of attempting to evaluate the good faith reasons for the
various periods of delay, the Appellate Division’s conclusion that the second factor favored
Mr. Johnson is based upon an assumption for the sake of argument.
Turning to the third factor, the “nature” of the underlying crime can refer to both its
severity and, relatedly, the complexity and challenges of investigating the crime and
gathering evidence to support a prosecution (see Singer, 44 NY2d at 254; People v Staley,
-6-
-7- No. 74
41 NY2d 789, 792 [1977]). For example, in Taranovich, we noted that a prosecutor may
need to be more thorough in preparing for a felony trial, as opposed to a misdemeanor (37
NY2d at 446). A few other relevant considerations include the availability and willingness
of witnesses to testify or the availability and quality of evidence (see e.g. Decker, 13 NY3d
at 15). Here, the Appellate Division held that its assumption that the People lacked good
cause compelled the result that the “third factor[ ] favors[s] the defendant.” The crime
here—the sexual assault of a minor found unresponsive on a city street—is quite serious.
The nature of the crime here is directly related to the issues of complexity and may,
therefore, account for some of the delay: the victim’s severe intoxication and lack of
memory of the assault rendered her unable to identify her attacker. It is not clear on what
basis the court concluded that its assumption of lack of good faith led to the conclusion that
the third factor favored Mr. Johnson, but that conclusion, apparently based solely on that
assumption with no analysis of the relevant concerns, is not supportable.
As to factor four (extended pretrial incarceration), Mr. Johnson was not incarcerated
pretrial. He was, for some time between the crime and the indictment, incarcerated on a
wholly unrelated matter, which time would not count under this factor.
In analyzing factor five, the Appellate Division held that because Mr. Johnson pled
guilty only to rape in the second degree (Penal Law § 130.30 [1]), which depends solely
on the age difference between the defendant and the victim, “the preindictment delay could
not have ‘impaired’ defendant’s ability to defend himself on the charge of which he was
convicted” (193 AD3d at 1431). This was error. When an indictment contains multiple
counts, if delay impacts the defendant’s ability to defend one count, it may weaken that
-7-
-8- No. 74
defendant’s position in plea bargaining, potentially adversely impacting the resulting plea.3
Thus, the appellate court must consider prejudice measured against all counts pending
when the dismissal motion is made, not merely against the crime of conviction.
The Appellate Division here misinterpreted the Taranovich framework and its
factual and legal review should be made under the proper framework. Accordingly, the
order of the Appellate Division insofar as appealed from should be reversed and the case
remitted to the Appellate Division for further proceedings in accordance with this opinion.
Order, insofar as appealed from, reversed and case remitted to the Appellate Division,
Fourth Department, for further proceedings in accordance with the opinion herein.
Opinion by Judge Wilson. Acting Chief Judge Cannataro and Judges Rivera, Garcia,
Singas and Troutman concur.
Decided November 17, 2022
3
On the facts of this case, we reject Mr. Johnson’s other argument regarding potential
prejudice, in which he asserts the delay prevented him from bargaining for a combined
sentence in this and an unrelated case. His highly speculative contention lacks any record
support, in contrast to Singer, in which the prosecutor and defense counsel had discussed
two close-in-time homicides in the context of negotiating a single disposition by plea and
the prosecutor refused solely on the ground that the defendant had not yet been indicted on
the matter in which the preindictment delay was challenged (44 NY2d at 255).
-8- | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484424/ | Notice: This opinion is subject to formal revision before publication in the
Atlantic and Maryland Reporters. Users are requested to notify the Clerk of the
Court of any formal errors so that corrections may be made before the bound
volumes go to press.
DISTRICT OF COLUMBIA COURT OF APPEALS
No. 22-BS-831
IN RE JENIFER WICKS, ESQUIRE,
Respondent.
A Member of the Bar of the Disciplinary Docket Nos.:
District of Columbia Court of Appeals 2020-D187, 2021-D124, 2021-
Bar Registration Number: 465476 D125.
BEFORE: Beckwith and Easterly, Associate Judges, and Washington, Senior Judge.
ORDER
(FILED—November 17, 2022)
On consideration of the petition of the Board on Professional Responsibility
(“Board”) pursuant to D.C. Bar R. XI, § 13(c), to suspend respondent indefinitely
based on disability, the Board’s motion to file under seal, Respondent’s response
thereto, and it appearing that neither Respondent nor Disciplinary Counsel had
interposed any objection thereto, it is
ORDERED that Disciplinary Counsel’s motion to file under seal is
granted. It is
FURTHER ORDERED that Respondent is indefinitely suspended from the
practice of law based on disability, effective immediately, and any pending
disciplinary matters be held in abeyance pursuant to D.C. Bar R. XI, § 13(g). It is
FURTHER ORDERED that Respondent’s attention is drawn to the
requirements of D.C. Bar R. XI, §§ 14 and 16, relating to suspended attorneys. It is
FURTHER ORDERED that Respondent shall file an affidavit in compliance
with D.C. Bar R. XI, § 14(g), with the court and the Board shall serve a copy of the
affidavit on Disciplinary Counsel.
PER CURIAM | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484441/ | 20-2118
Olivares De Lizama v. Garland
BIA
Straus, IJ
A209 418 019/020
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER
MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Thurgood Marshall
3 United States Courthouse, 40 Foley Square, in the City of
4 New York, on the 17th day of November, two thousand twenty-
5 two.
6
7 PRESENT:
8 DEBRA ANN LIVINGSTON,
9 Chief Judge,
10 JOHN M. WALKER, JR.,
11 ALISON J. NATHAN,
12 Circuit Judges.
13 _____________________________________
14
15 SARA NOEMI OLIVARES DE LIZAMA,
16 IKER EMANUEL LIZAMA-OLIVARES,
17 Petitioners,
18
19 v. 20-2118
20 NAC
21 MERRICK B. GARLAND, UNITED
22 STATES ATTORNEY GENERAL,
23 Respondent.
24 _____________________________________
25
26 FOR PETITIONERS: Manuel D. Gomez, Manuel D. Gomez
27 & Associates, New York, NY.
28
1 FOR RESPONDENT: Brian Boynton, Acting Assistant
2 Attorney General; Cindy S.
3 Ferrier, Assistant Director; Sarai
4 M. Aldana, Trial Attorney, Office
5 of Immigration Litigation, United
6 States Department of Justice,
7 Washington, DC.
8
9 UPON DUE CONSIDERATION of this petition for review of a
10 Board of Immigration Appeals (“BIA”) decision, it is hereby
11 ORDERED, ADJUDGED, AND DECREED that the petition for review
12 is DENIED.
13 Petitioners Sara Noemi Olivares De Lizama and Iker
14 Emanuel Lizama-Olivares, natives and citizens of El Salvador,
15 seek review of a June 5, 2020, BIA decision affirming an April
16 26, 2018, decision of an Immigration Judge (“IJ”) denying
17 their application for asylum, withholding of removal, and
18 relief under the Convention Against Torture (“CAT”). In re
19 Sara Noemi Olivares De Lizama, Iker Emanuel Lizama-Olivares,
20 Nos. A209-418-019/020 (B.I.A. June 5, 2020), aff’g Nos. A209-
21 418-019/020 (Immig. Ct. Hartford Apr. 26, 2018). We assume
22 the parties’ familiarity with the underlying facts and
23 procedural history.
24 We have reviewed the IJ’s decision as modified by the
25 BIA, i.e., minus the IJ’s findings regarding whether Olivares
26 De Lizama’s proposed social groups were cognizable. See Ming
2
1 Xia Chen v. Bd. of Immigr. Appeals, 435 F.3d 141, 144 (2d
2 Cir. 2006). The agency did not err in finding that Olivares
3 De Lizama failed to establish her eligibility for relief based
4 on gang extortion and threats or in denying her request for
5 a continuance to submit corroborating affidavits.
6 I. Asylum and Withholding of Removal
7 The applicable standards of review are well established.
8 See 8 U.S.C. § 1252(b)(4)(B) (“[T]he administrative findings
9 of fact are conclusive unless any reasonable adjudicator
10 would be compelled to conclude to the contrary[.]”); Weng v.
11 Holder, 562 F.3d 510, 513 (2d Cir. 2009) (reviewing factual
12 findings for substantial evidence and questions of law de
13 novo). To establish eligibility for asylum and withholding
14 of removal, an applicant must establish past persecution or
15 a well-founded fear or likelihood of persecution on account
16 of “race, religion, nationality, membership in a particular
17 social group, or political opinion.” 8 U.S.C.
18 §§ 1158(b)(1)(B)(i), 1231(b)(3)(A); 8 C.F.R. §§ 1208.13(b),
19 1208.16(b).
20 The agency reasonably found that Olivares De Lizama
21 failed to establish that she suffered past persecution
22 because she personally experienced only one unfulfilled
3
1 threat in El Salvador. See Mei Fun Wong v. Holder, 633 F.3d
2 64, 72 (2d Cir. 2011) (“[P]ersecution is an extreme concept
3 that does not include every sort of treatment our society
4 regards as offensive.” (internal quotation marks omitted));
5 Ci Pan v. U.S. Att’y Gen., 449 F.3d 408, 412 (2d Cir. 2006)
6 (recognizing that unfulfilled threats do not constitute past
7 persecution). Because the record does not support the
8 conclusion that Olivares De Lizama endured past persecution,
9 she was not entitled to a presumption of a well-founded fear
10 or likelihood of persecution and thus had the burden to
11 establish that she had such a fear on account of a protected
12 ground. See 8 C.F.R. §§ 1208.13(b), 1208.16(b).
13 Olivares De Lizama did not carry that burden. She
14 proposed social groups consisting of single women and of her
15 family. “To succeed on a particular social group claim, the
16 applicant must establish both that the group itself was
17 cognizable, and that the alleged persecutors targeted the
18 applicant on account of her membership in that group.”
19 Paloka v. Holder, 762 F.3d 191, 195 (2d Cir. 2014) (internal
20 quotation marks and citations omitted). “The applicant must
21 . . . show, through direct or circumstantial evidence, that
22 the persecutor’s motive to persecute arises from [a protected
4
1 ground].” Zhang v. Gonzales, 426 F.3d 540, 545 (2d Cir.
2 2005). The agency reasonably concluded that, even assuming
3 Olivares De Lizama’s social groups were cognizable, she
4 failed to establish a nexus between the harm she fears and
5 her membership in those groups because her testimony
6 demonstrated that the gang initiated each interaction with
7 her and her family for financial gain or punishment for their
8 lack of obeisance. See Ucelo-Gomez v. Mukasey, 509 F.3d 70,
9 73 (2d Cir. 2007) (“When the harm visited upon members of a
10 group is attributable to the incentives presented to ordinary
11 criminals rather than to persecution, the scales are tipped
12 away from considering those people a ‘particular social
13 group[.]’”); Melgar de Torres v. Reno, 191 F.3d 307, 313–14
14 (2d Cir. 1999) (explaining that “random violence” and
15 “general crime conditions” are not grounds for asylum).
16 Further, contrary to Olivares De Lizama’s contention, the BIA
17 did not err in citing Matter of A-B-, 27 I. & N. Dec. 316
18 (A.G. 2018), vacated, Matter of A-B-, 28 I. & N. Dec. 307
19 (A.G. 2021), because it did so solely for the long-settled
20 principle that it was not required to decide an issue that
21 was “unnecessary to the results [it] reach[ed].” I.N.S. v.
22 Bagamasbad, 429 U.S. 24, 25 (1976).
5
1 II. CAT Relief
2 Unlike asylum and withholding of removal, protection
3 under the CAT does not require a nexus to a protected ground.
4 See 8 C.F.R. §§ 1208.16(c), 1208.17(a). CAT applicants have
5 the burden to show they would “more likely than not” be
6 tortured by or with the acquiescence of government officials.
7 Id. §§ 1208.16(c), 1208.18(a); see also Khouzam v. Ashcroft,
8 361 F.3d 161, 168, 170–71 (2d Cir. 2004). The agency
9 reasonably concluded that Olivares De Lizama did not
10 establish a likelihood of torture with government
11 acquiescence because her similarly situated family members
12 remain unharmed in El Salvador, and the government
13 successfully prosecuted and imprisoned a gang member who had
14 extorted her family. See Khouzam, 361 F.3d at 171 (holding
15 that for the purpose of “state action [under CAT], torture
16 requires only that government officials know of or remain
17 willfully blind to an act and thereafter breach their legal
18 responsibility to prevent it”); cf. Melgar de Torres, 191
19 F.3d at 313 (finding fear of future persecution weakened when
20 similarly situated family members remain unharmed in
6
1 petitioner’s native country).
2 III. Continuance
3 We review the agency’s denial of a continuance for abuse
4 of discretion. See Morgan v. Gonzales, 445 F.3d 549, 551 (2d
5 Cir. 2006). An IJ “may grant a motion for continuance for
6 good cause shown,” 8 C.F.R. § 1003.29, and only “abuse[s] his
7 discretion in denying a continuance if (1) his decision rests
8 on an error of law (such as application of the wrong legal
9 principle) or a clearly erroneous factual finding or (2) his
10 decision—though not necessarily the product of a legal error
11 or a clearly erroneous factual finding—cannot be located
12 within the range of permissible decisions,” Morgan, 445 F.3d
13 at 551–52 (internal quotation marks, alterations, and
14 citation omitted). The IJ did not abuse his discretion in
15 denying a continuance because Olivares De Lizama had more
16 than five months to obtain affidavits from El Salvador and
17 because she could not show that corroborating affidavits
18 would change the outcome given that the IJ fully credited her
19 testimony without corroboration. See id.; cf. Elbahja v.
20 Keisler, 505 F.3d 125, 129 (2d Cir. 2007) (concluding that an
21 IJ does not abuse his discretion by denying a continuance
7
1 sought to pursue relief that is speculative).
2 For the foregoing reasons, the petition for review is
3 DENIED. All pending motions and applications are DENIED and
4 stays VACATED.
5 FOR THE COURT:
6 Catherine O’Hagan Wolfe,
7 Clerk of Court
8
8 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484435/ | 21-151-cr(L)
United States of America v. Rakhmatov
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held at the
2 Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
3 17th day of November, two thousand twenty-two.
4
5 Present:
6 DEBRA ANN LIVINGSTON,
7 Chief Judge,
8 AMALYA L. KEARSE,
9 JOHN M. WALKER, JR.,
10 Circuit Judges.
11 _____________________________________
12
13 UNITED STATES OF AMERICA,
14
15 Appellee,
16
17 v. 21-151(L), 21-167(Con)
18
19 AZIZJON RAKHMATOV,
20
21 Defendant-Appellant,
22
23 ABDURASUL HASANOVICH JURABOEV, AKA
24 ABDULLOH IBN HASAN, AKHROR SAIDAKHMETOV,
25 ABROR HABIBOV, DILKHAYOT KASIMOV, AKMAL
26 ZAKIROV,
27
28 Defendants.
29 _____________________________________
30
31 For Defendant-Appellant: LAWRENCE MARK STERN, Esq., New York, New York.
32
1
33 For Appellee: DAVID K. KESSLER, Assistant United States Attorney
34 (Susan Corkery, Douglas M. Pravda, J. Matthew
35 Haggans, Assistant United States Attorneys, on the
36 brief), for Jacquelyn M. Kasulis, Acting United States
37 Attorney for the Eastern District of New York,
38 Brooklyn, New York.
39
40 Appeal in No. 21-151 from a judgment of the United States District Court for the Eastern
41 District of New York (Kuntz, J.), and appeal in No. 21-167 from an order denying a post-judgment
42 motion.
43 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
44 DECREED in No. 21-151 that the judgment of the district court is AFFIRMED in part, and the
45 case is REMANDED for further proceedings consistent with this order.
46 In No. 21-151, Appellant Azizjon Rakhmatov appeals from a January 15, 2021 judgment
47 of the district court (Kuntz, J.), sentencing him to 150 months in prison, and a lifetime term of
48 supervised release with special conditions, for conspiring to provide material support to a foreign
49 terrorist organization in violation of 18 U.S.C. § 2339B. In No. 21-167, Rakhmatov appeals from
50 a January 25, 2021 order in which the district court denied his objections raised in a post-
51 sentencing letter that we construe as a motion to correct his sentence pursuant to Federal Rule of
52 Criminal Procedure 35(a). On appeal, Rakhmatov argues that his sentence should be vacated and
53 the case should be remanded to a different judge. A motions panel of this Court has already
54 dismissed as waived by his plea agreement Rakhmatov’s challenges to his prison sentence. In a
55 separate opinion that accompanies this order, we address his challenge in No. 21-167 to the denial
56 of his Rule 35(a) motion. In this summary order, we consider Rakhmatov’s challenges in No.
57 21-151 to the lifetime term and special conditions of supervised release, as well as whether the
58 case should be reassigned on remand. We assume the parties’ familiarity with the underlying
2
1 facts, the procedural history of the case, and the issues on appeal, which we reference here only as
2 necessary to explain our decision.
3 I. Imposition of Supervised Release
4 Rakhmatov challenges the district court’s imposition of a lifetime term of supervised
5 release and objects to nine of the eleven special conditions of supervised release. The
6 government does not object to vacating the lifetime term and special conditions related to
7 electronic device monitoring and location monitoring and remanding the case for further
8 development of the record. We conclude that the lifetime term and seven of the special
9 conditions of supervised release should be vacated. We remand with instructions to vacate them
10 and to conduct further proceedings consistent with this order.
11 A. Term of Supervised Release
12 We first consider Rakhmatov’s challenge to the lifetime term of supervised release.
13 Rakhmatov argues that the term should be vacated given the court’s lack of explanation for the
14 term, the fact that his co-defendants were not sentenced to supervised release, and the substantive
15 unreasonableness of the term for his “one-time” offense involving a “small amount of money.”
16 Appellant’s Br. at 58. We conclude that vacatur is appropriate.
17 “We review sentences under a deferential abuse-of-discretion standard.” United States v.
18 Sampson, 898 F.3d 287, 311 (2d Cir. 2018) (quoting United States v. Young, 811 F.3d 592, 598
19 (2d Cir. 2016)). Where, as with Rakhmatov’s challenge to the term of supervised release, a
20 defendant “did not object when the sentence was imposed, plain error review applies.” United
21 States v. Williams, 998 F.3d 538, 540 (2d Cir. 2021) (per curiam). In reviewing the substantive
22 reasonableness of a sentence, this Court considers, inter alia, whether the sentence can “be located
23 within the range of permissible decisions.” Id. at 542 (quoting United States v. Cavera, 550 F.3d
3
1 180, 189 (2d Cir. 2008) (en banc)). “In reviewing the procedural reasonableness of a sentence,
2 this Court considers whether the district court committed a significant procedural error, such as
3 failing to adequately explain the chosen sentence.” Id. at 540 (quoting United States v. Rosa, 957
4 F.3d 113, 117 (2d Cir. 2020)).
5 “A lifetime of supervised release is an extreme and unusual remedy,” and “cases in which
6 life terms of supervised release have been affirmed have typically involved child pornography or
7 violent crimes.” United States v. Brooks, 889 F.3d 95, 101, 103 (2d Cir. 2018) (per curiam).
8 “Accordingly, the severity of a life sentence of supervised release justifies a closer look at the
9 district court’s decision to impose such a sentence.” Id. at 101. “Ordinarily, a district court is
10 under no obligation to provide elaborate reasons for the sentence it imposes,” but “[w]here a
11 sentence is unusually harsh, meaningful appellate review is frustrated where it is not possible to
12 understand why the sentence was imposed.” United States v. Jenkins, 854 F.3d 181, 194 (2d Cir.
13 2017) (vacating a 25-year term of supervised release where “the district court offered no
14 explanation that might justify imposing what amounts to a lifetime of the most intense post-release
15 supervision”).
16 Here, the district court adopted the probation department’s recommendation of lifetime
17 supervised release, the maximum term permitted by statute. See 18 U.S.C. § 3583(j) (authorizing
18 supervised release of “any term of years or life” for “any offense listed in section 2332b(g)(5)(B)”).
19 The district court, however, provided no explanation for the lifetime term beyond stating that the
20 sentence generally is meant to “recognize[] the seriousness of the defendant’s offense” and “deter
21 this defendant from further criminal activity.” App. 422; see also Williams, 998 F.3d at 541–42
22 (noting that where retribution is the “principal articulated basis” for a sentence, a district court
23 should separately explain its rationale for a term of supervised release). Furthermore, Rakhmatov
4
1 had committed no prior offenses, and two of his co-defendants did not receive supervised release
2 sentences. See U.S.S.G. § 5D1.1 (Application Note 3) (advising that a district court “should give
3 particular consideration to the defendant’s criminal history” in imposing supervised release);
4 Brooks, 889 F.3d at 102 (noting that a district court must consider “the need to avoid unwarranted
5 sentenc[e] disparities among defendants with similar records” (quoting 18 U.S.C. § 3553(a)(6))).
6 Given the lack of explanation for the term imposed, meaningful appellate review is not possible.
7 To be clear, we express no view as to the appropriateness of a term of supervised release
8 in this case or as to the length of such a term. We simply remand and direct the district court to
9 vacate the term of supervised release and further develop the record with an explanation for its
10 reasoning for any newly imposed term.
11 B. Special Conditions of Supervised Release
12 We next consider Rakhmatov’s objections to nine of the special conditions of supervised
13 release. “‘A district court retains wide latitude in imposing conditions of supervised release,’ and
14 this Court generally reviews the imposition of such conditions ‘for abuse of discretion,’” bearing
15 in mind that errors of law, which we review de novo, necessarily meet this standard. United
16 States v. Birkedahl, 973 F.3d 49, 53 (2d Cir. 2020) (quoting United States v. MacMillen, 544 F.3d
17 71, 74 (2d Cir. 2008)). “When the defendant does not object to the conditions, however, we
18 review only for plain error.” United States v. Green, 618 F.3d 120, 122 (2d Cir. 2010) (per
19 curiam). “To establish plain error, the defendant must establish (1) error (2) that is plain and (3)
20 affects substantial rights.” Williams, 998 F.3d at 540 (quoting United States v. Villafuerte, 502
21 F.3d 204, 209 (2d Cir. 2007)). “The sentencing context . . . offers defendants a less rigorous plain
22 error review if [the] defendant lacked sufficient notice of the challenged conditions.” Green, 618
23 F.3d at 122 (citing United States v. Sofsky, 287 F.3d 122, 125 (2d Cir. 2002)).
5
1 The district court record is opaque both as to whether Rakhmatov had notice of the
2 proposed special conditions and whether he made objections sufficient to explain his arguments to
3 the district court. First, the probation department’s sentencing recommendation for a lifetime
4 term of supervised release and the relevant special conditions—district court “Document 448-1”—
5 was dated February 6, 2020, and is court-labeled as having been filed under seal on that date; but
6 no Document 448-1 is listed (even as “Sealed”) on the court’s docket. Second, we have not seen
7 in the record objections by Rakhmatov to any of the proposed conditions of supervised release
8 until his attorney, near the end of the January 14, 2021 sentencing hearing, stated, “I believe I have
9 to object to some of the special conditions of supervised release.” App. 437. But to that
10 statement, the district court responded in part, “You objected to them. So your record is clear
11 that you object to them.” Id. Because our decision as to the challenged conditions would be the
12 same regardless of the standard of review, we need not address which standard of review applies.
13 The district court adopted and imposed the probation department’s recommended special
14 conditions “to the extent they are not erroneous as a matter of law,” App. 430, and did not provide
15 a rationale for the conditions. “A district court is required to make an individualized assessment
16 when determining whether to impose a special condition of supervised release, and to state on the
17 record the reason for imposing it; the failure to do so is error.” United States v. Betts, 886 F.3d
18 198, 202 (2d Cir. 2018). “In the absence of such an explanation, we may uphold the condition
19 imposed only if the district court’s reasoning is ‘self-evident in the record.’” Id. (quoting United
20 States v. Balon, 384 F.3d 38, 41 n.1 (2d Cir. 2004)). “There must be a reasonable relationship
21 between the factors considered by the district court in the individualized assessment and the special
22 condition of release being challenged,” and the condition “must impose no greater restraint on
6
1 liberty than is reasonably necessary to accomplish sentencing objectives.” United States v.
2 Haverkamp, 958 F.3d 145, 151 (2d Cir. 2020).
3 We affirm two of the challenged special conditions. With respect to the condition limiting
4 Rakhmatov’s association with criminal or terrorist enterprises, 1 we conclude that the district
5 court’s reasoning for imposing the condition is “self-evident,” Betts, 886 F.3d at 202, based on
6 Rakhmatov’s offense of providing material support to a foreign terrorist organization.
7 Rakhmatov asserts that the condition is “vague” and “overbroad,” Appellant’s Br. at 60, yet
8 “[c]onditions need not be cast in letters six feet high, or describe every possible permutation, or
9 spell out every last, self-evident detail,” United States v. Reeves, 591 F.3d 77, 81 (2d Cir. 2010)
10 (quotation marks, ellipses, and citation omitted). Indeed, we have upheld similar association-
11 related conditions, assuming the “constitutionally required limitations on the breadth of
12 ‘association,’ including that the prohibition only limits association with [criminal enterprise
13 members] known to the probationer, and excludes ‘incidental contacts.’” Green, 618 F.3d at 123
14 (quoting Arciniega v. Freeman, 404 U.S. 4, 4 (1971) (per curiam)); see also United States v.
15 Johnson, 446 F.3d 272, 281 (2d Cir. 2006).
16 With respect to the condition requiring that Rakhmatov submit to searches of his person
1
The association condition states:
The defendant shall not associate in person, through mail, electronic mail, internet,
social networking, or telephone with any individual with an affiliation to any
terrorist organization, organized crime groups, gangs, or any criminal enterprise or
terrorist enterprise; nor shall he frequent any establishment, or other locale where
these groups may meet.
The defendant shall not access any websites that affiliates with a radical extremist
group, terrorist organization, organized crime groups, gangs, or any criminal
enterprise or terrorist enterprise.
See App. 432.
7
1 and property, 2 we similarly conclude that the district court’s reasoning for imposing the condition
2 is “self-evident,” Betts, 886 F.3d at 202, based on Rakhmatov’s offense. Moreover, the
3 condition’s limitations on searches to circumstances in which reasonable suspicion of a supervised
4 release violation exists and to a reasonable time and manner of search ensure that the condition
5 “impose[s] no greater restraint on liberty than is reasonably necessary,” Haverkamp, 958 F.3d at
6 151. Rakhmatov argues that the subcondition requiring him to notify other occupants that the
7 premises may be subject to searches is “vague and overbroad.” Reply Br. at 44. However, the
8 subcondition is reasonably read to require notice only to others occupying his “house,”
9 “residence,” or “vehicle” and thus “put[s] an ordinary person on notice of the prohibited conduct,”
10 United States v. Carlineo, 998 F.3d 533, 536 (2d Cir. 2021).
11 As to the seven remaining challenged special conditions related to mental health
12 evaluation, medication, polygraph testing, electronic device monitoring, and location monitoring,
13 we remand, directing that the district court vacate these conditions given the lack of
14 “individualized assessment” of the conditions and the lack of “self-evident” basis for the
15 conditions in the record. Betts, 886 F.3d at 202. Again, we express no view as to the
2
The search condition states:
The defendant shall submit his person, property, house, residence, vehicle, papers,
computers, as defined in 18 U.S.C. § 1030(e)(1), other electronic communications
or data storage devices or media, or office, to a search conducted by a United States
probation officer. Failure to submit to a search may be grounds for revocation of
release.
The defendant shall warn any other occupants that the premises may be subject to
searches pursuant to this condition. An officer may conduct a search pursuant to
this condition only when reasonable suspicion exists that the defendant has violated
a condition of his supervision and that the areas to be searched contain evidence of
this violation. Any search must be conducted at a reasonable time and in a
reasonable manner.
See App. 434–435.
8
1 appropriateness of these conditions. 3 We simply remand to the district court to consider whether
2 these conditions are warranted and, if so, to explain its rationale for imposing each of them.
3 II. Reassignment of the Case on Remand
4 Finally, Rakhmatov asserts that the case should be assigned to a different judge on remand
5 based on, inter alia, the district court’s “acceptance, without evidence, of the allegations of
6 [Rakhmatov’s] extremist ideology,” “superficial recitation” of the sentencing factors, and
7 imposition of the maximum sentence that bars appeal. Appellant’s Br. at 62. We disagree.
8 “Reassignment of a case ‘is an extreme remedy, rarely imposed . . . but occasionally warranted,
9 even in the absence of bias, to avoid an appearance of partiality.’” Ketcham v. City of Mount
10 Vernon, 992 F.3d 144, 152 (2d Cir. 2021) (quoting United States v. City of New York, 717 F.3d
11 72, 99 (2d Cir. 2013)). We assess three factors to determine whether reassignment is warranted:
12 (1) whether the original judge would reasonably be expected upon remand to have
13 substantial difficulty in putting out of his or her mind previously-expressed views
14 or findings determined to be erroneous or based on evidence that must be rejected,
15 (2) whether reassignment is advisable to preserve the appearance of justice, and (3)
16 whether reassignment would entail waste and duplication out of proportion to any
17 gain in preserving the appearance of fairness.
18
19 Id. (quoting Gonzalez v. Hasty, 802 F.3d 212, 225 (2d Cir. 2015)). Here, we discern no reason
20 that the district court would have “substantial difficulty” putting aside its original views or that
21 reassignment is warranted for “the appearance of justice.” Therefore, we deny Rakhmatov’s
22 request.
23 * * *
24
3
Because we direct vacatur, requiring the district court to develop the record in the event that the
conditions are reimposed, we need not now consider Rakhmatov’s contention that certain
conditions improperly delegate authority to the probation department.
9
1 We have considered Rakhmatov’s remaining arguments and find them to be without merit.
2 For the foregoing reasons and those in the concurrently filed opinion, we DISMISS as to the
3 district court’s denial of Rakhmatov’s Rule 35(a) motion, AFFIRM as to the imposition of the
4 association and search special conditions of supervised release, and REMAND the case with
5 instructions to vacate the lifetime term of supervised release and the special conditions related to
6 mental health evaluation, medication, polygraph testing, electronic device monitoring, and
7 location monitoring and to conduct further proceedings consistent with this order. As to the
8 lifetime term of supervised release and the special conditions for which we direct vacatur, the
9 district court may invite the parties to further develop the record and may reimpose or modify
10 them. Upon such decision by the district court, either party may restore the matter to the active
11 docket of this Court by letter without filing a new notice of appeal. If either party seeks further
12 action from this Court, the matter will be referred to this panel. See United States v. Jacobson,
13 15 F.3d 19, 22 (2d Cir. 1994) (recognizing that appellate courts may seek “supplementation of a
14 record without a formal remand or the need for a new notice of appeal before the appellate panel
15 acts on the supplemental record”).
16
17 FOR THE COURT:
18 Catherine O’Hagan Wolfe, Clerk
10 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484385/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
NEW WORLD CAR NISSAN, INC., d/b/a §
WORLD CAR HYUNDAI, AND NEW No. 08-20-00147-CV
WORLD CAR IMPORTS, SAN §
ANTONIO, INC., d/b/a WORLD CAR Appeal from the
HYUNDAI, §
Appellants, 53rd District Court
§
v. of Travis County, Texas
§
HYUNDAI MOTOR AMERICA AND (TC# D-1-GN-20-002662)
TEXAS DEPARTMENT OF MOTOR §
VEHICLES,
§
Appellees.
§
ORDER
The reformed briefs have been filed per this Court’s order of October 6, 2022. Therefore,
the Court REINSTATES the appeal.
IT IS SO ORDERED this 14th day of November, 2022.
PER CURIAM
Before Rodriguez, C.J., Palafox and Alley, JJ. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484382/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
§
IN THE INTEREST OF I.A.R., A CHILD, § No. 08-22-00233-CV
Appellant. § Appeal from the
§ 65th District Court
§ of El Paso County, Texas
§ (TC# 2019DCM7904)
ORDER
In order to protect the identity of the minor child who is the subject of this appeal, the Court
has determined on its own motion that it is necessary to identify the child by her initials, I.A.R.,
and the parent by initials as well, in all papers submitted to the Court, including letters, motions,
and briefs. See Tex.R.App.P. 9.8. The Court will also refer to the child and parent by their initials
in correspondence, orders, and in its opinion and judgment.
IT IS SO ORDERED this 15th day of November, 2022.
PER CURIAM
Before Rodriguez, C.J., Palafox and Alley, JJ. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484390/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
BEAU PARRY, Individually and as Next §
Friend to his Minor Daughters, No. 08-21-00094-CV
§
Appellant, Appeal from the
§
v. 120th Judicial District Court
§
JASON A. SHAFFER, VANEZA R. of El Paso County, Texas
SHAFFER, and TEAM TUTTLE, INC. §
d/b/a LEGACY REAL ESTATE (TC#2019DCV1811)
SERVICES, §
Appellees. §
JUDGMENT
The Court has considered this cause on the record and concludes there was no error in the
judgment. We therefore affirm the judgment of the court below. We further order that Appellees
recover from Appellant and its sureties, if any, all costs of appeal. See TEX.R.APP.P. 43.5. This
decision shall be certified below for observance.
IT IS SO ORDERED THIS 16TH DAY OF NOVEMBER, 2022.
JEFF ALLEY, Justice
Before Rodriguez, C.J., Palafox, and Alley, JJ. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484397/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
JOEL ANGEL LOPEZ, § No. 08-21-00170-CR
Appellant, § Appeal from the
v. § 413th Judicial District Court
THE STATE OF TEXAS, § of Johnson County, Texas
Appellee. § (TC# DC-F201900041)
OPINION
Appellant Joel Angel Lopez appeals his conviction for one count of aggravated sexual
assault of a child (Count 1), and three counts of aggravated sexual assault of a child, habitual
(Counts 2, 3, and 4), pursuant to TEX. PENAL CODE ANN. § 22.021(a)(2)(B), and one count of
indecency with a child by sexual contact, habitual (Count 5), pursuant to TEX. PENAL CODE ANN.
§ 21.11(a)(1). The trial court sentenced Lopez to five life sentences, with each sentence to run
concurrently. In two issues, Appellant complains of evidentiary rulings made during the guilt-
innocence phase of the jury trial. We affirm. 1
1
This case was transferred from our sister court in Waco (10th District), and we decide it in accordance with
the precedent of that court to the extent required by TEX. R. APP. P. 41.3.
I. BACKGROUND
A. The investigation
Just after midnight on the morning of November 19, 2018, Sheriff’s Deputy Aaron Glenn
and his partner, Sheriff’s Deputy Cory Anderson, responded to a call regarding a verbal
disturbance and a possible sexual assault. Portions of a recording of the 911 call were admitted
and played for the jury. Andrea McGaughy, who sounds distraught and at times hysterical, can be
heard telling the operator that her 11-year-old daughter, G.B., 2 reported to her that Lopez had gone
into her daughter’s bedroom and “licked her butt,” while her daughter had been asleep.
McGaughy described that Lopez had been staying with the family. She told the operator that Lopez
claimed he had not done anything, but G.B. would not tell her a lie. McGaughy went on to say that
G.B., who had “never . . . ever been touched, would have told [McGaughy] if she was, and [G.B.]
just told her sister, and her sister came right to [McGaughy].”
Along with the 911-call, portions of Deputy Glenn’s body-camera recording of the on-
scene investigation was also admitted and played for the jury. The recording shows the deputies
questioning Lopez, Maggie Van Zandt, and G.B.’s parents who were all present on scene, and
further shows the deputies gathering potential forensic evidence from the home. After Miranda
rights are read to Lopez, and he agrees to answer questions, he can be heard denying the
allegations, claiming he was asleep on the couch with Van Zandt before he was awoken by the
commotion in the home. Lopez says, “they were saying some crazy sh*t.” 3
2
In accordance with Texas Rule of Appellate Procedure 9.10 (a)(3), we refer to the child complainant and any other
child witness by their initials only.
3
The jury was instructed that the body-camera video was admitted for the limited purpose of demonstrating the
investigative process in the case but was not to be used for the truth of any statements asserted therein.
2
B. The SANE exam
When officers left the scene, G.B. was transported to Cook Children’s Medical Center for
an examination by a sexual assault nurse examiner (SANE). Theresa Fugate, the SANE nurse,
testified at trial regarding her examination of G.B. Also, her report was admitted into evidence,
without objection. Fugate read to the jury G.B.’s reporting of what happened, as stated in her own
words, as follows:
I was sleeping in my bed, and he came in my room. I was facing the wall, and he
pulled my pants and underwear down and started licking me down there (and points
to her genital area). And he licked my bottom hole too. I was scared, I didn’t know
what to do. I just didn’t move and kept my eyes closed. Then he left . . . . He came
back in and did the same thing, but then he put his finger in my hole down there
(points to genital area), and he said, ‘You know you like it.’ That really freaked me
out. He kept leaving and coming back in like four or five times. He also kissed up
here (breast, she was pointing to) and put his mouth on my nipples and my neck
and ear. I told my sister. Then we told my mom.
C. The physical evidence
Forensic DNA Analyst Rachel Burch testified regarding the DNA analysis of the SANE
kit and the buccal swabs collected from Lopez. DNA comparison revealed that Lopez and any
patrilineal relative (i.e., his father or son) could not be excluded as a contributor of the DNA profile
extracted from the epithelial and sperm cells obtained from the crotch area of G.B.’s underwear,
such that 99.937% of the U.S. population other than Lopez would not be expected to be a
contributor of the DNA profile. Similarly, Lopez (and any patrilineal relative) could not be
excluded as the contributor of the DNA profile extracted from epithelial cells (which could come
from saliva) contained in G.B.’s anal swab, such that 99.943% of the U.S. population, exclusive
of Lopez, would be expected to be a contributor. In other words, Lopez’s DNA was among less
than 1% of the U.S. population that could be a contributor to DNA profiles extracted from the
3
underwear segment and anal swabs. Burch expressed a 95% confidence level in the DNA
comparison results.
D. G.B.’s in-court testimony
At trial, G.B., who was then fourteen years old, testified about the events leading to the
charges. The night in question, her older sister, Z.B., was staying at their aunt’s house. G.B. was
sleeping on the couch next to the bunk bed. Lopez first came into her room to ask if she wanted
the music left on, then left. About five to ten minutes later, G.B. described, while crying, that
Lopez came back into her room, got on his knees, took her pants and underwear off, and started
licking her vagina. She felt his tongue go in and out of her vagina and felt his beard on her inner
thighs. After Lopez exited the room, G.B. pulled up her pants and kept her eyes shut as she wept.
G.B. repositioned herself to face the back of the couch. Lopez returned to the room a third time,
rolled G.B. over, removed her pants and licked her “vagina again, but he also licked [her] butt,”
which felt “horrible.” She recalled that Lopez smelled like alcohol.
After a couple of minutes, Lopez left the room, and G.B. once again pulled up her pants,
this time attempting to wedge herself underneath the cushions on the backrest of the couch.
Roughly twenty minutes later, Lopez came back to the room yet again, pulled down G.B.’s pants,
moved his tongue in and out of her vagina, put his fingers inside her vagina, pulled up her shirt
and bra, and squeezed her breasts. G.B. could tell Lopez used his finger because she felt a nail
poking her, which hurt. Lopez whispered in her ear, “I know you like it,” which made her cry even
more. Lopez left and came back a fifth time, pulled down G.B.’s pants and licked her vagina again,
but this time his tongue did not go inside of it. Lopez then pulled up G.B.’s pants and left the room.
G.B. pulled up the covers and cried herself to sleep.
4
G.B. testified she did not tell her parents the next day because she felt scared that Lopez
would hurt her again. However, she told Z.B. what happened the following night, and Z.B. told
her parents, who then called the police. G.B. positively identified Lopez in court as the perpetrator.
On cross-examination, defense counsel asked G.B. with whom she had spoken about the
offenses prior to trial. G.B. stated she had spoken to her sister (Z.B.), her brother, the SANE nurse,
the “lady at the Child Advocacy Center,” and her two best friends at school. Regarding her
interview at the Child Advocacy Center (CAC), counsel elicited from G.B. the following:
[Defense counsel]: Did you tell her everything?
[G.B.]: Yes.
[Defense counsel]: Did you leave anything out?
[G.B.]: No, I’m pretty-also pretty sure that they took us to another
lady or something and talked about therapy or something.
....
[Defense counsel]: I’m sorry the [CAC], the lady with the white board that she
wrote on with paper on it, she tore off. Do you remember
her?
[G.B.]: I don’t remember her exactly, but I know I was there.
....
[Defense counsel]: Now, is there a reason why you didn’t tell the lady at the
CAC interview that Joel had put his tongue in your vagina?
[G.B.]: Because I was a little kid and I didn’t know anything about
what that was, but I did feel it and I did tell my sister
everything and so she knew. But I was a little kid. She really
didn’t know what that was either. We just knew what
happened.
5
When counsel asked G.B. if she had told the SANE nurse about oral penetration of her
vagina, G.B. responded, “no” and explained that her mother did not want to “share this to the
whole world” and was “lowkey about it.” Thereafter, upon re-direct examination, G.B. again
recounted the events of the night in question, consistent with her prior testimony.
E. Z.B.’s in-court testimony
Fifteen-year-old Z.B. testified that in November 2018, G.B. told her a “secret” while
“balling [sic] her eyes out.” G.B. told Z.B. that Lopez had touched her the night before and “did
things with his tongue and his fingers.” Regarding what G.B. specifically told her about the assault,
Z.B. recounted that G.B. said Lopez “was basically, like, sticking [] his tongue inside her, inside
of her vagina area, and that’s, like, basically what she told me.”
F. The forensic interview
In response to the cross-examination of G.B. regarding her purportedly inconsistent
statements during the CAC forensic interview, the State offered, and the court admitted into
evidence under the rule of optional completeness, the video recording of G.B.’s CAC interview.
See Tex. R. Evid. 107.
Prior to the publication of the video to the jury, forensic interviewer Kacie Hand testified
regarding her general educational and professional background, as well as the general procedures
and protocols she followed while conducting a forensic interview of a child. Interviewer Hand
explained that a forensic interview is a “nonleading, nonbiased interview where an interviewer and
a child are in one room, and in another room on closed-circuit TV it is being recorded for the team,
which consists of law enforcement, CPS, the District Attorney’s Office, County Attorney’s Office,
and Juvenile Services.” Hand also claimed the CAC was a neutral place for a child to tell their
story about an event in his or her life. The interview, Hand said, is prefaced by a discussion of
6
various parameters meant to put the child at ease (“rapport building”) and understand that they
may relate their story freely and openly, such that the child may be more likely to correct the
interviewer’s understanding of the facts if he or she has misconstrued or misunderstood them.
During these discussions, the interviewer establishes the child’s distinction between a truth and a
lie to “determine the child’s understanding, to see their cognitive ability.” The child can tell his or
her story “in their own words” after being prompted by an open-ended statement, such as, “tell me
why you’re here today,” and is allowed to speak as much or as little as they like, at which point
the interviewer may ask follow-up or clarification questions. During her court appearance, Hand
neither offered testimony about what G.B. told her nor did she express an opinion on G.B.’s
credibility.
Various segments of the November 26, 2018, forensic-interview videorecording were
published to the jury: G.B. described the composition of her household and related that she was
eleven years old, was in the sixth grade, and liked going to school. G.B. summarized the difference
between a truth and a lie: “A lie is something that you make up to hide the truth, and the truth is
like, the real thing that happened.” Hand told G.B. that she defined “truth” as “saying everything
that happened and not leaving anything out;” G.B. agreed to tell the truth. G.B. soon explained she
was brought to the CAC because someone touched her.
Unlike her trial testimony, G.B. said to Hand it was either “every time” Lopez came into
her room or “like, two times” that Lopez whispered in her ear that he “knew she liked it.” In
describing what she wore the night of the assault, G.B. described she was wearing grey leggings
with pink flowers on them, not shorts, as she testified at trial. She also said it was Lopez (not
herself) who pulled up her clothes each time before leaving her room.
7
G.B. stated Lopez “opened up [her] butt” and licked her “pee-pee and [her] butthole” and
came into her room multiple times. While G.B. testified Lopez had whispered in her ear, G.B.
additionally told the interviewer that Lopez bit her ear before doing so. On the recorded interview,
G.B. said Lopez stuck his finger “up there” in her “pee-pee.” She thought it was the second or third
time that Lopez came into her room that he put his finger inside her vagina, though she was not
sure.
When asked during her interview how Lopez acted when he drank, G.B. replied, “like,
crazy,” and relayed that her mother once told her Lopez “got buck naked” and “laid on one of our
beds” while she and Z.B. were out of the house. G.B. did not otherwise describe whether Lopez
had put his tongue in her vagina in the recorded interview.
G. Lopez’s defense
1. Van Zandt’s trial testimony
In support of his defense, Lopez presented the testimony of Maggie Van Zandt, who
testified she had a romantic relationship with him that spanned ten years. Van Zandt mentioned at
trial that her son was then nine years old. 4 Van Zandt, who stayed at the McGaughy house on
weekends, testified that on the night in question, she and Lopez had sex on the couch in the living
room then fell asleep. Van Zandt claimed she generally did not sleep well at night, that she was
overall a light sleeper, such that if Lopez had gotten up at night, it would have woken her up. Van
Zandt testified Lopez was a heavy sleeper, especially when he drank, and that night, Lopez was
drunk. She further described that she and Lopez had sex in the McGaughy house many times,
including on G.B.’s and Z.B.’s bed when the girls were not there. They had sex on the girls’ bottom
4
In one instance of our record, Van Zandt responds affirmatively when Lopez is referred to as her husband. Yet, in
other parts of the record, other parties refer to her as either Lopez’s girlfriend or his wife. To simplify our presentation,
we refer to Van Zandt by her name only.
8
bunk bed about a week before the night in question, and Lopez did not wear protection. The next
morning (the date of the outcry), she observed G.B. to be “[p]erfectly fine and happy and cheery
like she always is.” She testified that she became upset at Lopez at some point after the police
arrived and had indicated she did not want to leave with him but explained that it was only “[o]ut
of frustration, anger, [and] confusion.” Ultimately, she testified she had decided to leave with
Lopez because she “kn[e]w he didn’t do it.”
During cross-examination, Van Zandt first testified she did not know what time she and
Lopez had sex but it was sometime after 11:00 p.m. Later, she testified she and Lopez had sex on
an air mattress next to the couch (not on the couch, as she previously stated) sometime after 3:00
a.m. for thirty to forty minutes. Their son was asleep on a different couch in the living room, across
from the mattress. Van Zandt woke up on the couch around 7:00 a.m. but did not remember when
or how she moved to the couch from the air mattress. When she awoke, Lopez was asleep on the
air mattress. Van Zandt admitted she was unaware of the SANE exam’s DNA results.
2. Lopez’s trial testimony
Lopez took the stand in his defense. He denied having committed the offenses and testified
he got along well with G.B. and her siblings and loved them like they were his own nieces and
nephew. Lopez testified that on the night in question, he and Joseph Brown, G.B.’s stepfather, had
been drinking inside and outside of the house. Around 8:00 or 9:00 p.m., they lit a bonfire and
continued to drink. For the first time, Lopez claimed he and Brown left the house around midnight
to get more beer, and on the way back, they encountered someone who needed a ride, which they
provided. Thereafter, around 2:00 a.m., they tried to go four-wheeling on some private property,
but the gate to the property was locked, so they just drove up and down a dirt road. Lopez did not
remember what time he went back into the house that night but stated he and Brown stayed up to
9
drink some more, and the noise woke up Van Zandt, so she joined them. Eventually, they all turned
in for the night at around 4:00 a.m., at which point, he and Van Zandt had sex for either thirty
minutes or an hour-and-a-half. Afterwards, they went outside to smoke cigarettes, went back into
the house, and went back to sleep. Lopez testified he did not wake up until 8:00 a.m. Contrary to
Van Zandt’s testimony, Lopez claimed he and Van Zandt had sex the night before G.B.’s outcry
and that he (Lopez) had not started drinking at 11:00 a.m. the morning of November 18, 2019 (as
Van Zandt claimed) because he had been at work. Lopez asserted the sperm found on G.B.’s
underwear “[c]ould’ve came from anywhere in the house [because he] had sex in that house
multiple places.”
3. Lopez’s jury argument
Regarding the recording of the CAC interview, Lopez argued to the jury that, “[a]lthough
it was only a week later,” G.B. “didn’t look upset. She was calm. She seemed cheerful, kind of
happy. Had no problem answering any of the questions. Didn’t seem upset by a single one of them.
Not a one.” Lopez also contended G.B. made statements during her interview that “weren’t exactly
correct,” like when she stated Brown rarely drank, when in fact, he and Lopez were “drinking
buddies;” or when she claimed she slept on the top bunk, when Z.B. testified it was Z.B. who slept
on the top bunk and G.B. herself testified that the bottom bunk “was always [hers].” In support of
his attack on the reliability of the DNA results, Lopez also pointed to G.B.’s assertion during the
interview that McGaughy once told G.B. that Lopez had gotten naked and got on her bed when he
was drunk. As to G.B.’s motivation for purportedly fabricating the accusations against him, Lopez
relied on one of G.B.’s statements during the CAC interview, arguing to the jury that G.B. simply
“didn’t like the idea of her mother telling her that [Lopez] had been naked and having sex in her
10
bed, and she felt that was just icky, horrible, awful, and she wanted to make sure it didn’t happen
again. What better way to not make it happen again than to get him out of the house[?]”
The jury found Lopez guilty on all counts. Lopez pleaded “true” to each of the State’s
punishment-enhancement allegations, and after hearing punishment evidence, the jury assessed
punishment for each count at confinement for life. The court sentenced Lopez in accordance with
the jury’s verdicts, and this appeal followed.
II. ISSUES ON APPEAL
In two issues, Lopez asserts the trial court erred in admitting: (1) the testimony of Kacie
Hand; and (2) the videotaped, forensic interview of G.B. (State’s Exhibit 8). Because the first issue
is predicated on the second issue, we proceed in reverse order and address the second issue first.
III. THE ADMISSIBILITY OF G.B.’S INTERVIEW AT THE CAC
In his second issue, Lopez argues the trial court erred in admitting G.B.’s recorded
interview, asserting it constituted inadmissible hearsay that operated to “bolster” trial testimony.
The State counters that Lopez had insinuated, throughout his cross-examination of G.B., that there
was a significant inconsistency between her trial testimony and her CAC interview regarding
whether Lopez had penetrated her vagina with his tongue. Through counsel’s questioning, the
State contends, defense counsel insinuated that an inconsistency in G.B.’s testimony suggested she
had fabricated her allegations against Lopez due to improper influence from others. At trial and on
appeal, the State argues it became necessary to admit the recorded interview in its entirety, after
defense counsel’s questioning of G.B., to counter the false impression he had created about her
prior statement.
11
A. Standard of review
We review a trial court’s decision to admit evidence under an abuse-of-discretion
standard. Walters v. State, 247 S.W.3d 204, 217 (Tex. Crim. App. 2007). The trial court abuses its
discretion only when the decision lies outside the zone of reasonable disagreement. Id.
B. Applicable Law
“Hearsay is a statement, other than one made by the declarant while testifying at trial or
hearing offered in evidence to prove the truth of the matter asserted.” Pena v. State, 353 S.W.3d
797, 814 (Tex. Crim. App. 2011) (citing TEX. R. EVID. 801(d)). “Hearsay statements” are generally
not admissible “unless the statement falls within a recognized exception to the hearsay rule.” Pena,
353 S.W.3d at 814. One such exception is provided by TEX. R. EVID. 107, otherwise known as
“the rule of optional completeness.” Id. In relevant part, this rule provides:
If a party introduces part of an act, declaration, conversation, writing, or recorded
statement, an adverse party may inquire into any other part on the same subject. An
adverse party may also introduce any other act, declaration, conversation, writing,
or recorded statement that is necessary to explain or allow the trier of fact to fully
understand the part offered by the opponent.
TEX. R. EVID. 107. The rule is one of admissibility, permitting courts to introduce “otherwise
inadmissible evidence when that evidence is necessary to fully and fairly explain a matter ‘opened
up’ by the adverse party.” Walters v. State, 247 S.W.3d 204, 218 (Tex. Crim. App. 2007). As
designed, rule 107 reduces “the possibility of the jury receiving a false impression from hearing
only a part of some act, conversation, or writing.” Id. It does not permit the introduction of other
similar, but inadmissible, evidence unless it is necessary to explain properly admitted evidence. Id.
Finally, “the rule is not invoked by the mere reference to a document, statement, or act.” Id.
12
C. Analysis
Lopez complains the admission of G.B.’s recorded interview—which was admitted after
the State invoked a right to completeness under TEX. R. EVID. 107—was erroneous because the
State failed to demonstrate that Lopez’s cross-examination of G.B. had created a false impression
with the jury, and Lopez had not first sought to admit any part of the interview. Lopez argues rule
107 did not apply. And in permitting the State to play the entire interview for the jury, Lopez
contends the trial court admitted hearsay evidence offered by the State to “bolster” the credibility
of G.B.’s trial testimony, thereby depriving him of a fair trial.
“Bolstering” occurs when evidence is admitted for the sole purpose of convincing the fact
finder that a “particular witness or source of evidence is worthy of credit, without substantively
contributing to make the existence of a fact that is of consequence to the determination of the
action more or less probable than it would be without the evidence.” Cohn v. State, 849 S.W.2d
817, 819-20 (Tex. Crim. App. 1993) (quoting TEX. R. EVID. 410); see also Rivas v. State, 275
S.W.3d 880, 886 (Tex. Crim. App. 2009) (explaining that “bolstering” objections are inherently
ambiguous because law concerning bolstering predates promulgation of rules of evidence and
implicates several evidentiary rules).
Here, assuming without deciding whether the trial court erred in applying the rule of
optional completeness, we conclude the record does not support a finding that the admission of
this evidence had the impermissible effect of bolstering G.B.’s credibility or that it had more than
but a slight effect on the jury’s verdict. See Motilla v. State, 78 S.W.3d 352, 355 (Tex. Crim. App.
2002) (directing that non-constitutional error must be disregarded if the appellate court, after
reviewing the record as a whole, has fair assurance that the error did not influence the jury or had
but a slight effect).
13
We examine the bolstering claim, and perform a harm analysis as well, regarding the
admission of the complained-of recorded interview.
1. No evidence of impermissible bolstering of G.B.’s credibility
In arguing that the recorded interview deprived him of a fair trial by impermissibly
bolstering G.B.’s testimony and credibility, Lopez does not direct us to any part of the record or
any legal authority in support of his claim. Nor does he specifically identify which statements
made during the recording improperly bolstered G.B.’s credibility or what those statements
purportedly bolstered. See Rivas v. State, 275 S.W.3d 880, 886 (Tex. Crim. App. 2009) (explaining
that “bolstering” objections are inherently ambiguous because law concerning bolstering predates
promulgation of rules of evidence and implicates several evidentiary rules). Nonetheless, in the
interest of justice, we construe his argument as asserting the recording of the child’s interview
improperly bolstered her trial testimony about Lopez’s sexual assault of her.
First, we examine whether the complained-of recording could have harmed Lopez in the
manner specifically alleged, namely, by bolstering G.B.’s credibility. We note that during his
argument to the jury, Lopez pointed to various inconsistencies between G.B.’s recorded interview
and her trial testimony. For example, defense counsel argued that G.B. claimed Brown rarely
drank, when in fact he and Lopez were “drinking buddies,” or how she claimed she slept on the
top bunk but claimed at trial she slept on the bottom one. And our own review of the record shows
that G.B.’s recorded interview contradicted her trial testimony on other points, such as how many
times Lopez whispered in her ear, whether Lopez also bit her ear, what she was wearing the night
of the assault, and whether it was she or Lopez who pulled up her pants each time he left her room.
Further, as we previously discussed, when confronted on cross-examination with her
failure to tell interviewer Hand that Lopez put his tongue in her vagina (like G.B. testified before
14
the jury), G.B. attempted to explain, but did not deny, her previous failure to make that specific
allegation. She also admitted she did not tell nurse Fugate about Lopez having orally penetrated
her vagina, which admission was corroborated by the SANE medical report. G.B. told nurse Fugate
that Lopez put his finger in her vagina but never mentioned his tongue. As Lopez contended during
his cross-examination, the recording of G.B.’s interview did not, in fact, indicate that G.B. had
said Lopez put his tongue in her vagina at any point during the interview.
Thus, rather than “bolstering” G.B.’s testimony by somehow demonstrating that G.B.’s
testimony was worthy of credit (because it was consistent with her CAC interview), the recording
served to confirm Lopez’s impeachment of G.B. by putting before the jury extrinsic evidence of
G.B.’s prior statements inconsistent with her testimony. That is, the video corroborated Lopez’s
contention that G.B. had made a new allegation at trial that she had not made before, which in turn,
as discussed below, he used to support his theory of fabrication. Thus, the recording did not
constitute impermissible bolstering. See Hernandez v. State, No. 03-07-00040-CR, 2010 WL
391850, at *16 (Tex. App.—Austin Feb. 5, 2010, no pet.) (mem. op., not designated for
publication) (holding videotape of child-victim’s forensic interview did not constitute
impermissible bolstering where it depicted statements contradicting her testimony).
2. Harmlessness of the recorded interview
As discussed, our review of the record shows the recorded interview supported, rather than
undercut, Lopez’s impeachment of G.B., in turn helping support Lopez’s defensive theory of
fabrication on G.B.’s part. That the jury ultimately rejected Lopez’s theories does not convince us
the videotape deprived him of a fair trial by affecting his substantial rights—our task is to assess
the likelihood that the jury’s decision was adversely affected by the error, if any, in admitting the
video, and we must do so in light of the record as a whole, including the testimony, the parties’
15
theories of the case, any physical evidence, and closing arguments. See Motilla, 78 S.W.3d at 355-
56 (in evaluating harm for non-constitutional error, appellate court considers record as a whole,
including the testimony, the parties’ theories of the case, any physical evidence, and closing
arguments); TEX. R. APP. P. 44.2(b) (non-constitutional error must be disregarded unless it affects
appellant’s substantial rights).
Lopez urges the admission of the recorded interview harmed him because “[w]atching
video of a more comfortable, more at-ease young lady in the company of an interviewer asking
her leading questions convinced the jury that perhaps these allegations were true.” But Lopez does
not explain how this was so. Indeed, Lopez argued otherwise to the jury—Lopez emphasized to
the jury that G.B. did not appear to be upset by any of the questions posed by interviewer Hand
during the interview and that, instead, G.B. appeared to be happy and cheerful despite the short
span of time between the interview and the alleged assaults. Lopez then made further favorable
use of the recording when he argued to the jury that it provided a vital clue about G.B.’s possible
motivation for fabricating the allegations against him: G.B.’s vexation with Lopez for his
reportedly prior inappropriate behavior when he got on G.B.’s bed, naked, while he was drunk.
Lopez argued that G.B. found this to be “icky,” “horrible,” and “awful,” which he claimed,
motivated her to “get [him] out of the house” by fabricating the allegations against him.
Given the corroborative (rather than conflicting) effect on Lopez’s impeachment of G.B.
and general defensive theory, in light of the evidence uncovering Lopez’s DNA in the crotch
segment of G.B.’s underwear and anal swabs collected during the SANE exam, the overall
consistency of G.B.’s allegations during her SANE examination and her trial testimony, as well as
Lopez’s testimony relating a different series of events (at times contradicted by Van Zandt) than
that previously presented to police during the police-body-camera footage, we have a fair
16
assurance that error, if any, in admitting the recording did not influence the jury or had but a slight
effect. See Motilla, 78 S.W.3d at 355 (directing that non-constitutional error must be disregarded
if the appellate court, after reviewing the record as a whole, has fair assurance that the error did
not influence the jury or had but a slight effect).
Accordingly, we overrule Issue Two.
IV. THE ADMISSIBLITY OF KACIE HAND’s TESTIMONY
In his first issue, Lopez contends the trial court erred in admitting Kacie Hand’s testimony
about the general procedures and protocols she followed while conducting a forensic interview of
an alleged child-victim. Similar to his second issue, Lopez asserts Hand’s testimony was
impermissibly admitted because it was hearsay that served to bolster G.B.’s testimony. In this
regard, Lopez contends the State’s use of interviewer Hand as a “human lie detector” deprived him
of a fair trial. 5
On review of the record, we have failed to uncover anything that demonstrates Hand
offered hearsay testimony in the first instance or “bolstered” G.B.’s testimony. Indeed, Hand’s
testimony is devoid of any reference to any out-of-court statement made by G.B., either during the
interview, or otherwise. See TEX. R. EVID. 801(d). We find nothing in the record to support Lopez’s
contention that Hand’s testimony—that she conducted her interview in a “nonbiased and
nonleading” manner after assessing the alleged child-victim’s “cognitive ability” by reviewing the
importance of distinguishing between the truth and a lie—amounts to the State’s use of Hand as a
“human lie detector.” See Beard v. State, No. 10-11-00296-CR, 2012 WL 662333, at *3 (Tex.
5
The State contends Appellant did not object at trial on hearsay or “bolstering” grounds and urges us to overrule this
issue as waived. Our review of the record shows that Appellant did object to Hand’s testimony on these grounds, and
thus we refuse to hold that Lopez waived his appellate claims in this regard.
17
App.—Waco Feb. 29, 2012, pet. ref’d) (mem.op., not designated for publication) (overruling
appellant’s “bolstering” claim of error where doctor testified child-complainant’s statements
regarding appellant’s sexual abuse of her to be “reliable,” that he would use the term “reason to
believe” to characterize the reliability of the child’s statements, and that “there’s reason to believe
that her words should be taken seriously,” holding that doctor’s statements were not a direct
opinion on child’s truthfulness). Lopez does not direct us to anything in the record or existing law
that supports his claims in this regard. And while Lopez, citing to Duckett v. State, 797 S.W.2d
906, 915 (Tex. Crim. App. 1990), correctly points out that the State may not “cross the line and
have its expert give a direct opinion on the truthfulness of a child,” he concedes that Hand “did not
offer a direct opinion on G.B.’s truthfulness.”
Again, our careful review of the recorded interview shows that it corroborated Lopez’s
impeachment of G.B. via prior inconsistent statements regarding not only whether Lopez put his
tongue inside her vagina, but also as to several other details she spoke about the events in question.
As such, even if, as Lopez asserts, Hand’s testimony bolstered the credibility of the statements
G.B. made during the recorded interview, it would only show that G.B.’s interview statements—
to the extent they contradicted her trial testimony—were truthful and worthy of credibility over
G.B.’s more severe allegations at trial.
Because we fail to see how any error in admitting Hand’s testimony about the general
procedures and protocols followed while interviewing G.B. affected Lopez’s substantial rights, we
conclude that no harm was shown. See Motilla, 78 S.W.3d at 355; see also TEX. R. APP. P. 44.2(b).
Accordingly, we overrule Issue One.
V. CONCLUSION
We affirm.
18
GINA M. PALAFOX, Justice
November 14, 2022
Before Rodriguez, C.J., Palafox, and Alley, JJ.
(Do Not Publish)
19 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484414/ | State of New York OPINION
Court of Appeals This opinion is uncorrected and subject to revision
before publication in the New York Reports.
No. 88
The People &c.,
Respondent,
v.
Luis Jimenez,
Appellant.
Steven R. Berko, for appellant.
Charles Pollak, for respondent.
Animal Legal Defense Fund et al., amici curiae.
RIVERA, J.:
Defendant was indicted on several counts for striking and severely injuring a small
dog with a broom stick. On appeal, he argues that the indictment should be dismissed
because the prosecutor did not charge the grand jury on justification under
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Penal Law § 35.05 (2), the “choice of evils” defense. We conclude that the instruction was
not warranted under the circumstances of this case.
I.
Defendant was charged with second-degree criminal mischief under Penal
Law § 145.10, aggravated cruelty to animals under Agriculture and Markets Law § 353-a,
and Overdriving, Torturing, or Injuring an Animal under Agriculture and Markets
Law § 353. Defendant testified before the grand jury that J., a former acquaintance,
confronted him on a sidewalk and demanded that he repay a $20 debt. When defendant
refused, J. left and then quickly returned with two metal rods, one in each hand, and
threatened to kill defendant if he did not pay. Defendant picked up a broom and broke it in
half to defend himself as J.’s mother and uncle appeared on the scene. At his mother’s
urging, J. turned and began walking away while the uncle began “tussling” with defendant,
attempting to disarm him of the broom handle. As defendant was engaged with the uncle,
Gigi—a small dog who was in the mother’s care—ran up to defendant and started biting at
his pant leg. While still physically engaged with the uncle, defendant swung the broom
handle and hit Gigi.
During his testimony, defendant explained that J.’s uncle “[got] in the way” while
“trying to stop the fight” as Gigi, who was not on a leash, ran toward them. He then
“[m]istakenly” hit the dog; he “fe[lt] bad for it,” and “didn’t mean to hurt the dog.” In
response to questioning, defendant responded that, when he hit Gigi, J. was swinging the
stick as the uncle was “on [him]” and J.’s mother was holding J. back. Defendant also
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confirmed that, at one point, a surveillance camera recorded J. walking away while J.’s
uncle walked toward defendant and began “pushing” him back. He claimed, however, that
Gigi bit his pant leg but that he “wasn’t really scared” of her; rather, he “was scared of the
people around [him] because [he] was by [him]self.” As J.’s uncle was trying to get the
stick out of defendant’s hand, defendant “ended up hitting the dog mistakenly.” Defendant
testified that throughout the encounter, he was “not trying to hit [anything].” The grand
jury also viewed surveillance footage, which depicts defendant striking Gigi in an upward
motion with the broom handle and knocking her to the ground. A forensic veterinarian
testified that the strike caused Gigi extreme pain, fractured her cheekbone, and left her
blind in one eye.
The prosecutor charged the grand jury on, among other things, the elements of the
three counts. The prosecutor did not instruct the grand jury on justification. The grand jury
indicted defendant on all counts.
Defendant moved to dismiss the indictment on the ground that the grand jury
proceeding was defective under CPL 210.35 (5) because the prosecutor failed to instruct
the jury on exculpatory defenses. Supreme Court reviewed the grand jury minutes in
camera and dismissed the indictment with leave to re-present, based on the prosecutor’s
failure to instruct on justification under section 35.05 (2). The court subsequently granted
the prosecution’s motion to reargue, but adhered to its original decision on the same
grounds. The Appellate Division, with one Justice dissenting, reversed and reinstated the
indictment, holding that, as a matter of law, no reasonable view of the evidence supported
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an instruction on the justification defense (189 AD3d 882, 882-885 [2d Dept 2020]). The
dissenting Justice granted defendant leave to appeal (2021 NY Slip Op 61834[U] [2d Dept
2021]). We now affirm.
II.
Defendant asserts that the grand jury proceeding was sufficiently impaired to
warrant dismissal of the indictment because the prosecutor did not provide an instruction
pursuant to Penal Law § 35.05 (2), the “choice of evils” defense, which would have
allowed the grand jury to consider whether his actions were justified. Defendant maintains
that he chose to hit the dog to avoid a potentially fatal dog bite infection. As limited by
defendant’s argument, we conclude that the evidence does not support the defense.
Under CPL 210.35 (5), a grand jury proceeding is defective, “mandating dismissal
of the indictment” (People v Valles, 62 NY2d 36, 38 [1984]) under CPL 210.20 (1) (c),
when it “fails to conform to the requirements of article one hundred ninety [of the Criminal
Procedure Law] to such degree that the integrity thereof is impaired and prejudice to the
defendant may result” (CPL 210.35 [5]). In turn, article 190 of the Criminal Procedure Law
provides that “[t]he legal advisors of the grand jury are the court and the district attorney,”
and commands that “[w]here necessary or appropriate, the court or the district attorney, or
both, must instruct the grand jury concerning the law with respect to its duties or any matter
before it” (CPL 190.25 [6]). “[F]ailure to furnish adequate or complete instructions may,
in a given case, render the grand jury proceedings defective, mandating dismissal of the
indictment” but “[t]his does not mean, however, that the Grand Jury must be charged with
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every potential defense” (People v Valles, 62 NY2d 36, 38 [1984]). Instead, as the Court
has explained, a prosecutor must instruct a grand jury on “exculpatory defense[s],” which
are those “that would, if believed, result in a finding of no criminal liability” (id.). Failure
to instruct where the evidence supports a complete defense is grounds for reversal (see
People v Lancaster, 69 NY2d 20, 26 [1986]).
Section 35.05 (2) of the Penal Law provides that conduct that would otherwise be
criminal may be justifiable when
“[s]uch conduct is necessary as an emergency measure to avoid an
imminent . . . private injury which is about to occur by reason of a situation
occasioned or developed through no fault of the actor, and which is of such
gravity that, according to ordinary standards of intelligence and morality, the
desirability and urgency of avoiding such injury clearly outweigh the
desirability of avoiding the injury sought to be prevented by the statute
defining the offense in issue.”
The statute further commands that “[w]henever evidence” related to the defense “is offered
by the defendant, the court shall rule as a matter of law whether the claimed facts and
circumstances would, if established, constitute a defense” (id.). Thus, the statute’s plain
text requires a threshold legal determination that the record is sufficient for the factfinder
to conclude that a defendant’s criminal conduct was justified.
This provision reflects a policy decision to absolve a defendant of criminal liability
where they commit an otherwise criminal act out of necessity to avoid a greater injury (see
People v Craig, 78 NY2d 616, 618, 620 [1991]). Choice is a necessary prerequisite to this
justification defense, hence the common reference to it as the “choice of evils” defense (see
id. at 619 n 1). As the Court previously recognized in Craig, the defense is limited in
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application and intended to be available “ ‘in rare and highly unusual circumstances’ ” (id.
at 622, quoting Staff Notes of Temp St Commn on Rev of Penal Law and Crim Code, 1964
Proposed NY Penal Law [Study Bill, 1964 Senate Intro 3918, Assembly Intro
5376] § 65.00 at 317). Indeed, this Court has endorsed the Bartlett Commission’s
illustrative example that the defense would exempt a defendant from criminal liability for
the “ ‘burning of real property of another in order to prevent a raging forest fire from
spreading into a densely populated community’ ” (id., quoting William C. Donnino,
Practice Commentary, McKinney’s Cons Laws of NY, Book 39, Penal Law § 35.00 at 91).
Here, defendant asserts that he chose the lesser evil of striking Gigi to avoid the
greater harm of a potentially-infectious dog bite. However, defendant testified before the
grand jury that he was not afraid of Gigi, that he never intended to hurt her, and that he
struck her by mistake during his struggle with the uncle and as a reaction to the surrounding
circumstances. Thus, by his own account, defendant made no choice at all to strike Gigi,
but acted without intending to hit anything or specifically to hurt her. The record, including
defendant’s own testimony and the surveillance video, forecloses defendant’s argument
that he chose to strike Gigi as an “emergency measure to avoid an imminent . . . private
injury” (Penal Law § 35.05 [2]; see Lancaster, 69 NY2d at 26). Accordingly, the
prosecutor was not obligated to instruct the grand jury on the “choice of evils” defense
under section 35.05 (2) (see People v Thompson, 22 NY3d 687, 697 [2014]; Lancaster, 68
NY2d at 26; Valles, 62 NY2d at 38).
Accordingly, the order of the Appellate Division should be affirmed.
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Order affirmed. Opinion by Judge Rivera. Acting Chief Judge Cannataro and Judges
Garcia, Wilson, Singas and Troutman concur.
Decided November 17, 2022
-7- | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484418/ | Case: 22-2144 Document: 28 Page: 1 Filed: 11/17/2022
NOTE: This order is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
TODD SCHAEFFER,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2022-2144
______________________
Appeal from the United States Court of Federal Claims
in No. 1:20-cv-01498-RTH, Judge Ryan T. Holte.
______________________
ON MOTION
______________________
PER CURIAM.
ORDER
The United States moves to dismiss this appeal as un-
timely filed. Todd Schaeffer opposes and, among other
things, seeks leave to proceed in forma pauperis.
The United States Court of Federal Claims dismissed
Mr. Schaeffer’s complaint, entered judgment in August
2021, and denied reconsideration on December 29, 2021.
On January 7, 2022, the court issued an anti-filing order,
Case: 22-2144 Document: 28 Page: 2 Filed: 11/17/2022
2 SCHAEFFER v. US
directing its Clerk’s Office “to reject any future filings other
than a properly served notice of appeal.” Schaeffer v.
United States, No. 1:20-cv-01498-RTH (Fed. Cl. Jan. 7,
2022), ECF No. 31. The Court of Federal Claims’ docket
reflects that the anti-filing order has been invoked twice:
first, on January 10, 2022, and second, on August 11, 2022,
the latter instance returning as unfiled Mr. Schaeffer’s doc-
uments entitled “Relief” and “Document ZZZZ” received on
that same day. ECF No. 1-2 at 6. On August 17, 2022, Mr.
Schaeffer filed a notice of appeal from the “order filed Jan-
uary 7, 2022, directing the office to reject plaintiff’s filings
without proper notice of appeal,” purportedly entered on
“August 16, 2022.” ECF No. 1-2 at 1.
We lack jurisdiction over an appeal from the trial
court’s judgment or the January 7, 2022, anti-filing order
because an appeal of those decisions is untimely. A notice
of appeal from the Court of Federal Claims must be filed
within 60 days of the entry of judgment or order from which
the appeal is taken. See 28 U.S.C. § 2522; 28 U.S.C.
§ 2107(b). We have held that deadline to be a jurisdictional
rule imposed by Congress with the intent of denying this
court jurisdiction once the filing window has closed. See
Marandola v. United States, 518 F.3d 913, 914 (Fed. Cir.
2008); see also Bowles v. Russell, 551 U.S. 205, 209 (2007).
The notice of appeal here was filed more than 60 days from
the date of issuance of those rulings and is therefore un-
timely. *
* The court notes Mr. Schaeffer’s January 10, 2022,
submission (rejected from filing the same day) cannot rea-
sonably be construed as a notice of appeal from the Janu-
ary 7, 2022, order because he expressly requested relief
from the Court of Federal Claims, see, e.g., ECF No. 10-4 at
152, and does not reasonably indicate an intent to appeal
to this court, as would be required of a notice of appeal by
Rule 3(c)(1)(C) of the Federal Rules of Appellate Procedure.
Case: 22-2144 Document: 28 Page: 3 Filed: 11/17/2022
SCHAEFFER v. US 3
To the extent Mr. Schaeffer seeks review of the trial
court’s August 11, 2022, action refusing to accept his sub-
missions per the anti-filing order, we dismiss his appeal as
frivolous. See Mallard v. U.S. Dist. Ct. for S. Dist. of Iowa,
490 U.S. 296, 307–08 (1989); cf. 28 U.S.C. § 1915(e)(2)(B)(i)
(“[T]he court shall dismiss the case at any time if the court
determines that . . . the . . . appeal is frivolous[.]”). Mr.
Schaeffer’s various filings raise no cognizable argument as
to why his submission should have been docketed after
judgment had already been entered in his case and in light
of the anti-filing order.
Lastly, we address Mr. Schaeffer’s assertions of confi-
dentiality in his submissions to this court. Mr. Schaeffer
contends that the entirety of ECF Nos. 9-1, 9-2, 9-3, 10-1,
10-2, 10-3, and 10-4 should be treated as confidential, be-
cause the “[m]aterials were filed sealed with the agency
and in the trial court” and that confidentiality is necessary
to “protect the reputations of parties.” ECF No. 13 at 2. On
September 10, 2021, the Court of Federal Claims expressly
ordered all of Mr. Schaeffer’s filings be unsealed, ECF No.
10-3 at 28, and we see no justification for sealing his mate-
rials here. See In re Violation of Rule 28(d), 635 F.3d 1352,
1356 (Fed. Cir. 2011) (recognizing a strong presumption in
favor of public access to appellate court proceedings).
Accordingly,
IT IS ORDERED THAT:
(1) The government’s motion is granted to the extent
that this appeal is dismissed.
(2) All other motions are denied.
(3) ECF Nos. 3, 7, 9, 10, and 13 are unsealed.
Case: 22-2144 Document: 28 Page: 4 Filed: 11/17/2022
4 SCHAEFFER v. US
(4) Each side shall bear its own costs.
FOR THE COURT
November 17, 2022 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court
ISSUED AS A MANDATE: November 17, 2022 | 01-04-2023 | 11-17-2022 |
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volumes go to press.
DISTRICT OF COLUMBIA COURT OF APPEALS
No. 21-FM-006
L.S., APPELLANT,
V.
DISTRICT OF COLUMBIA DEPARTMENT ON DISABILITY SERVICES, APPELLEE.
Appeal from the Superior Court
of the District of Columbia
(MRV12-81)
(Hon. Carmen McLean, Reviewing Judge)
(Hon. Katherine M. Wiedmann, Motion Judge)
(Argued September 22, 2022 Decided November 17, 2022)
Pierre E. Bergeron for appellant.
Stacy L. Anderson, Senior Assistant Attorney General, with whom Karl A.
Racine, Attorney General for the District of Columbia, Loren L. Alikhan, Solicitor
General at the time the brief was filed, Caroline S. Van Zile, Principal Deputy
Solicitor General at the time the brief was filed, and Ashwin P. Phatak, Deputy
Solicitor General, were on the brief, for appellee.
Before GLICKMAN and DEAHL, Associate Judges, and THOMPSON, Senior
Judge.
THOMPSON, Senior Judge: In this matter, appellant L.S., a developmentally
disabled ward of the District of Columbia Department on Disability Services (“the
District” or “DDS”), challenges a December 11, 2020, order of the Superior Court
2
affirming an October 1, 2020, order by a Magistrate Judge of the Mental Health
and Habilitation Branch of the Family Court (the “Habilitation Court”) that denied
an emergency motion filed by L.S.’s counsel. We dismiss the appeal as moot
insofar as it asks this court to mandate that the Habilitation Court assess the ability
of L.S. to understand the risks of returning to work at his supported employment
worksite and to order that L.S. not return to work until vaccination against the
COVID-19 virus is available. We affirm insofar as the appeal asks us to hold that
the Superior Court erred in upholding the Habilitation Court’s determination not to
hold an evidentiary hearing on the motion. 1
I. Background
L.S. is an individual with severe intellectual disability who is committed to
DDS for the provision of habilitation services pursuant to an individual support
plan (“ISP”). The services described in L.S.’s ISP include supportive employment.
1
We also hereby grant appellant’s requests to refer to him by his initials in
this Memorandum Opinion and to publish our decision.
3
As of early 2020, L.S.’s supportive employment included work as a custodian at a
Department of Defense (“DoD”) facility in Virginia, where he had worked since
2016. The COVID-19 pandemic and state and local stay-at-home orders led to a
pause in that assignment in March 2020. In August 2020, however, L.S. expressed
a desire to return to work, and DDS sought to facilitate that return. L.S.’s
interdisciplinary team (“IDT”) determined that a number of limitations and
precautions would be implemented to enable L.S. to return to work. These
included limiting L.S.’s work to two days per week for five hours each day; his
wearing a face mask and face shield and observing social distancing protocols;
being individually escorted to and from work; having his temperature checked
upon arrival at work and again at the community residential facility where he lives;
and monitoring him according to Centers for Disease Control and Prevention
guidelines.
Under D.C. Code § 7-1304.13(a), “[p]ersons with an intellectual disability
who have been committed . . . shall have the assistance of an advocate for a person
with an intellectual disability in every proceeding and at each stage in such
proceedings under this chapter” (i.e., the so-called Habilitation Act, declaring the
intent of the Council of the District of Columbia (the “Council”) to “[s]ecure for
each resident of the District of Columbia with intellectual or developmental
4
disability . . . such habilitation as will be suited to the needs of the person”). 2 The
advocate has the duty “[t]o ensure by all means . . . that the [committed] person is
afforded all rights under the law.” D.C. Code § 7-1304.13(c)(3).
In October 2017, the Habilitation Court appointed attorney Pierre Bergeron
as counsel for L.S. to succeed his previous counsel. Mr. Bergeron has advocated
for L.S. in various ways, including by successfully petitioning the Habilitation
Court to direct that speech-language services for L.S. be reinstated and that L.S. be
provided with a communication device.
By motion dated August 26, 2020, Mr. Bergeron filed in both the
Habilitation Court and the Probate Court a motion entitled “Emergency Motion for
an Emergency Order and/or Injunctive Relief to Prevent the Department of
Disability Services and Its Contractor Ward and Ward from Sending [L.S.] to His
Supported Employment Day Program [a reference to L.S.’s job at the DoD
facility]” (the “Emergency Motion”). 3 Referring to an August 14, 2019, “Day
Program Court Report” filed with the court, the Emergency Motion highlighted
2
D.C. Code § 7-1301.02(a)(2).
3
The Probate Court denied the motion, reasoning that the Family Court, not
the Probate Court, was the appropriate forum. Counsel did not contest that
determination.
5
that L.S.’s work “consists in great part of cleaning toilets” at the DoD facility and
referred the court to attached articles stating that COVID-19 can be transmitted via
“aerosolized feces” propelled into the air by toilet flushing. The Emergency
Motion asked the Superior Court to enjoin DDS from restarting L.S.’s employment
“until further order of this Court and when a vaccine protecting against COVID[-
]19 is available.”
The Emergency Motion acknowledged that a decision was made at an IDT
meeting on August 20, 2020, that (then 70-year-old) L.S. should return to his
supported employment and that L.S.’s limited medical guardian (appointed for L.S.
in 2008 in a Probate proceeding) had concurred in that decision. The Emergency
Motion asserted, however, that counsel did not believe that the decision to return
L.S. to supported employment at a “highly contagious” site during the pandemic, at
a time when DDS workers, Department of Defense employees, attorneys, and
others were being permitted to work from home, “belong[ed] to the Limited
Medical Guardian.” The Emergency Motion asserted that because of L.S.’s severe
intellectual disability, he would not be able to process the “potentially deadly risks
6
of returning to work,” which assertedly had not been explained to him by his case
manager or by the limited medical guardian. 4
DDS opposed the Emergency Motion, asserting that L.S. had “not been
declared incapacitated to make a decision whether to maintain his employment and
he ha[d] expressed his interest in returning to work” and arguing that the
Habilitation Act safeguarded L.S.’s decision to return to work. DDS noted that the
IDT decision had been upheld by the DDS Human Rights Advisory Committee
and that the IDT had put safety protocols in place and contended that to grant the
motion would violate L.S.’s civil rights and his right to meaningful employment.
Magistrate Judge Katherine M. Wiedmann denied the Emergency Motion in
a bench ruling on September 17, 2020, and in a written order dated October 1,
2020. Magistrate Judge Wiedmann reasoned that while the Habilitation Court has
jurisdiction to determine whether an individual habilitation plan satisfies the
requirements of the Habilitation Act, it does not have authority to adjudicate a
“perceived violation sound[ing] in tort or some other legal theory stemming from
4
Counsel also asserted that he had asked L.S. whether “he minded waiting
to go[] back to work until the environment is safe,” and L.S. had consented. On
August 31, 2020, the IDT team met again with L.S., who reaffirmed that he would
like to return to work.
7
health and safety concerns” or relating to medical issues. Magistrate Judge
Wiedmann found that the Emergency Motion was not challenging any deficiency
in L.S.’s habilitation plan and emphasized that under the law, L.S. “is presumed to
have capacity to make his own decisions regarding whether he wants to return to
work” and to do so in consultation with his limited medical guardian to the extent
that health and safety issues related to his work present medical issues. The
Magistrate Judge declined to make any determination regarding health and safety
risks at L.S.’s workplace. She also remarked that counsel for L.S. should “proceed
with caution” to the extent that he was advocating the overruling of L.S.’s decision
about returning to work despite his expressed wishes because counsel owed
“[u]ndivided loyalty to [the] client . . . [as] a fundamental tenet of the attorney-
client relationship.”
There followed a petition for review by an Associate Judge. Associate
Judge Carmen G. McLean denied the motion for review on December 11, 2020.
Judge McLean declined to find that the Habilitation Court lacked authority to
address health and safety risks associated with habilitation services; she found it
at least plausible that the question of [L.S.] returning to
work during a pandemic touches on the requirement that
individuals ‘be taught skills that help them learn how to
effectively utilize their environment and how to make
choices necessary for daily living,’ D.C Code
8
§ 7-1305.02, or even the comprehensive evaluation
requirements of D.C. Code § 7-1305.04.
Judge McLean found, however, that the Habilitation Court did not have the
authority to grant the requested relief. She found that the Emergency Motion’s
argument that L.S. lacked the capacity to decide to re-engage in supportive
employment services was without merit as in direct conflict with the legal
presumption of capacity. She noted that under D.C. Code § 21-2002(d), “[a]n
individual shall be presumed competent and to have the capacity to make legal,
health-care, and all other decisions for himself or herself, unless certified otherwise
under section 21-2204 or deemed incapacitated or incompetent by a court,” and
that under the Habilitation Act, “[a] determination by the [c]ourt . . . that a person
14 years of age or older is incompetent to refuse commitment shall not be relevant
to a determination of the person’s competency with respect to other matters not
considered by the [c]ourt.” D.C. Code § 7-1303.13. Judge McLean found no
“provision that identifies or elucidates a procedure for a Habilitation Court to
separately determine an individual’s competency or capacity for discrete
habilitation decisions.” 5
5
Judge McLean also noted that the Guardianship Statute provides a means
to evaluate a developmentally disabled individual’s capacity; various procedural
protections; and a clear and convincing standard of proof.
9
This appeal followed on January 6, 2021. Appellant’s briefs argue that the
reviewing Associate Judge erred in upholding the order by which the Habilitation
Court (1) declined to assume “jurisdiction over . . . the health and safety of [L.S.’s]
habilitation work place” and (2) failed to “assess[] [L.S.’s] capacity to make health
and safety decisions based on the clinical data” and to hold an evidentiary hearing
on these issues.
The record indicates that since the filing of the Notice of Appeal, L.S. has
received a COVID-19 vaccine in February 2021 and a booster shot in November
2021. L.S. returned to work on September 28, 2020 (and as of the date of a review
hearing on October 29, 2020, had not tested positive for COVID-19 and had no
symptoms of the virus). L.S. stopped working for a time in December 2020, but
returned to work in 2021. In addition, on August 12, 2021, the Probate Court,
upon a petition by DDS that relied on an updated psychological evaluation of L.S.,
appointed Diann Dawson as L.S.’s general guardian. 6 As a substitute decision-
maker for L.S., and as a member of L.S.’s IDT, the general guardian agreed to his
6
DDS asked the Probate Court to “expand[] Ms. Dawson’s limited medical
guardianship to a general guardianship.” The petition stated that L.S. was unable
to make decisions or provide consent for decisions relating to habilitation planning.
10
return to work. As of oral argument in this matter on September 22, 2022, L.S.
was continuing to work with the agreement of the general guardian.
II. Analysis
A. Standing and Mootness
We have considered whether to dismiss the appeal for Mr. Bergeron’s lack
of standing, a matter that was discussed briefly at oral argument. The issue is
whether counsel may, through this appeal, pursue a goal — an order that would bar
DDS from facilitating L.S.’s return to work — that is opposed by L.S.’s general
guardian and, apparently, by L.S. himself. 7 See, e.g., Superior Court of the District
of Columbia, Family Court Attorney Practice Standards for Mental Habilitation
Attorneys (“Practice Standards for Mental Habilitation Attorneys”), an attachment
to Superior Court Administrative Order 15-17, at 10 (explaining that certain
7
The issue of standing also was alluded to by DDS’s counsel during a
proceeding before the Habilitation Court on September 14, 2020. Counsel for
DDS raised the issue of whether, if L.S. wished to return to work, his counsel
would “have any legal standing to [pursue an order to] prevent him returning to
work[.]” Magistrate Judge Wiedmann agreed this was an issue (and, as noted
above, in her October 1, 2020, order, she cautioned Mr. Bergeron about his duty of
loyalty to the client).
11
decisions relating to habilitation, such as whether to accept or reject a
recommendation for day program services and decisions about the placement and
location where services are to be delivered “are ultimately the province of the
respondent [ward]”); see also Neilson v. Colgate-Palmolive Co., 199 F.3d 642, 650
(2d Cir. 1999) (quoting 6A Charles Alan Wright et al., Federal Practice and
Procedure § 1548, at 372 (2d ed. 1990) for the principle that “State substantive law
usually provides that the general guardian of a[n] . . . incompetent has the legal
right to maintain an action in h[er] own name for the benefit of h[er]
ward . . . . [and] is the real party in interest”). 8
We ultimately do not rely on lack of standing as a basis for resolving this
matter because, at least arguably, Mr. Bergeron has standing to pursue this appeal
to advance the claim that placing L.S. in a “toxic environment where he can
contract COVID 19 . . . constitutes a denial of habilitation service.” Pursuant to his
duty “[t]o ensure by all means . . . that the [committed] person is afforded all rights
8
But see Ad Hoc Comm. of Concerned Tchrs. v. Greenburgh No. 11 Union
Free Sch. Dist., 873 F.2d 25, 30 (2d Cir. 1989) (noting that “[f]ederal
courts . . . have repeatedly affirmed a court’s power to determine that the interests
of a[n] . . . incompetent will be best represented by a ‘next friend’ or guardian ad
litem and not by an authorized representative such as a . . . general guardian”);
Boyd v. Lancaster, 132 P.2d 214, 217-18 (Cal. Ct. App. 1942) (rejecting argument
that where there is a general guardian, that person alone is entitled to bring a suit
on behalf of the ward such that a suit by a guardian ad litem is not maintainable).
12
under the law,” D.C. Code § 7-1304.13(c)(3), Mr. Bergeron has an obligation to
advocate for the furnishing of the services to which L.S.’s ISP entitles him, even if
(as possibly was the case with respect to L.S.’s discontinued speech-language
services) L.S., and/or his limited medical guardian, was content to forgo them. See
also Practice Standards for Mental Habilitation Attorneys at 8 (“The Mental
Habilitation Attorney’s duty is the representation of the respondent’s civil and
legal rights and interests in any proceeding relating to the respondent’s
commitment . . . .”). It thus appears that — unlike a counsel who is appointed to
represent an individual who is the subject of a guardianship/intervention
proceeding and who must “represent zealously that individual’s expressed wishes,”
D.C. Code § 21-2033(b)(1) — a counsel appointed under the Habilitation Act is
not necessarily obligated to be guided by the client’s wishes (as expressed by the
client or as discerned by the general guardian) or by the general guardian’s
substituted judgment. The “[s]trategic and tactical legal decision[]” to present the
claim for injunctive relief involved here as a denial of habilitative services
plausibly is a claim that may “be made by counsel after consultation”). 9
Practice Standards for Mental Habilitation Attorneys at 10-11.
9
That said, an argument that allowing L.S. to return to an allegedly unsafe
work environment constituted a denial of habilitation services is not the argument
that Mr. Bergeron made before the Habilitation Court, and thus we consider the
13
As the issue of standing is a complex one that has not been fully briefed, we
turn instead to the doctrine of mootness, which the District contends requires that
the appeal be dismissed. 10 The District invokes our case law holding that a
pending appeal generally becomes moot when there occurs an event that renders
the relief sought by a party impossible or unnecessary. See, e.g., Classic CAB v.
D.C. Dep’t of For-Hire Vehicles, 244 A.3d 703, 705 (D.C. 2021) (quoting
Settlemire v. D.C. Off. of Emp. Appeals, 898 A.2d 902, 905 (D.C. 2006)). In
particular, the District relies on two developments since the Emergency Motion
was filed and resolved: first, the undisputed evidence L.S. has received COVID-19
vaccinations and a booster shot, such that the relief sought through the Emergency
argument forfeited. Arguments not raised in the trial court “are normally spurned
on appeal.” Crockett v. Deutsche Bank Nat’l Tr., 16 A.3d 949, 953 (D.C. 2011).
10
Like standing, mootness is “a threshold question of law that must be
resolved prior to, and independently of, the merits of the case.” B.J. v. R.W., 266
A.3d 213, 215 (D.C. 2021); Geary v. Nat’l Newspaper Publrs. Ass’n, 279 A.3d
371, 372 (D.C. 2022). Mootness and standing are related concepts in that,
generally speaking (putting aside the exceptions to the mootness doctrine), the
requisite interest that “must exist at the commencement of the litigation (standing)
must continue throughout its existence (mootness).” Welsh v. McNeil, 162 A.3d
135, 144-45 (D.C. 2017) (Glickman, J., concurring in part).
A Motions Division of this court denied without prejudice DDS’s motion to
dismiss this appeal as moot, but that denial does not bind this merits panel. See
Clark v. Bridges, 75 A.3d 149, 150-51 (D.C. 2013) (citation omitted) (“[A] Merits
Division of this court is not bound by a Motions Division’s decision to deny a
motion to dismiss an appeal . . . unless the motion is denied with prejudice.”).
14
Motion — to prevent Mr. Smith’s return to work until a vaccine was available —
is no longer necessary; and second, the Probate Court’s appointment of a general
guardian for L.S., signifying the Probate Court’s crediting of a July 2021
psychologist’s report that L.S. lacks capacity to make habilitation decisions (such
as the discrete decision to return to work) and the Probate Court’s acceptance of
DDS’s argument that L.S. “is unable to make decisions or provide consent for
decisions relating to . . . habilitation planning,” such as an informed decision about
supported employment. The District argues that the Probate Court determination
renders moot counsel’s request that this court require the Habilitation Court to
assess the ability of L.S. to understand the risks of returning to work at his
supported employment site. 11
11
The District also persuasively addresses why the claims advanced in the
Emergency Motion should not be deemed to fall within the capable-of-repetition-
yet-evading-review exception to the mootness doctrine. See Hardesty v. Draper,
687 A.2d 1368, 1371 (D.C. 1997). It asserts that L.S. is
now fully vaccinated against COVID-19 and has a
substitute decision-maker, resolving the concerns
underlying counsel’s request for injunctive relief. And
because there is now an available COVID-19 vaccine for
everyone in DDS’s care, there is no risk that similarly
situated DDS clients will choose to return to work during
this pandemic in the absence of an available vaccine.
15
Disagreeing with the District on these points, L.S.’s reply brief suggests that
the Emergency Motion “c[ould] only [have] mean[t]” to request an order that L.S.
not be permitted to return to his supportive employment until there is available a
vaccine that “substantially blocks” COVID-19 variants and breakthrough
infections, a goal that has not been achieved. However, we see no indication that
this is what the Emergency Motion contemplated. Mr. Bergeron also asks us to
hold that L.S.’s capacity to understand the risks of and to consent to returning to
work is to be assessed by the Habilitation Court under the Habilitation Act and not
by the Probate Court as part of a more general determination of incapacitation
under the Guardianship Act. We see no reason to reach that conclusion. The
Council has made clear its intent that the provisions of the Guardianship Act (set
out in chapter 20 of Title 21 of the D.C. Code) apply to developmentally disabled
individuals served by DDS just as they do to other incapacitated individuals. See,
e.g., Report on Bill 20-710, the “Guardianship Amendments Act of 2014” before
the Committee on the Judiciary and Public Safety, Council of the District of
Columbia, at 6 & 6 n.18 (Nov. 25, 2014) (discussing amendments to D.C. Code
§ 21-2033 triggered by a decision of this court pertaining to a DDS-involved
developmentally disabled ward). Moreover, the Guardianship Act contemplates a
role for DDS in petitioning for removal of a guardian for failure to discharge his or
her duties as to the ward. See D.C. Code § 21-2049(a)(3).
16
For the foregoing reasons, we dismiss this appeal as moot to the extent that it
seeks an order to DDS “not to return [L.S.] to work” until a COVID-19 vaccine is
available or until there is an evidentiary hearing by the Habilitation Court on L.S.’s
ability to appreciate the health and safety risks of returning to work.
B. Evidentiary Hearing
We now address the claim that the Superior Court erred in affirming the
Habilitation Court’s order given that the Habilitation Court declined to hold an
evidentiary hearing on the safety of L.S.’s supportive employment worksite. At
oral argument, we understood counsel for the District of Columbia to agree that
this claim is not moot. We agree. Even though much has changed since the
Emergency Motion was filed, 12 there could still be issues about the safety of L.S.’s
12
According to the August 14, 2019, “Day Program Court Report” included
in the record, around the time the Emergency Motion was filed, L.S.’s work tasks
included cleaning of toilets and urinals. By contrast, according to an October 8,
2020, Day Program Court Report, L.S.’s work tasks at the DoD facility included
sweeping, dusting, vacuuming, and assisting with trash handling, but L.S. “does
not clean toilets.” This statement was not disputed during the October 29, 2020,
ISP review proceeding, and appellant’s briefs also do not dispute the statement.
Thus, there is no evidence in the record that the particular alleged hazard that
counsel highlighted in the Emergency Motion still exists. Moreover, we can take
notice that more and more people in our community have returned to their places
17
supportive employment work environment. We note that at the annual review
hearing on L.S.’s ISP held on October 29, 2020, Mr. Bergeron proffered that he
had a witness — L.S.’s supportive employment job coach — who would testify
that L.S. did not always wear the face mask he was instructed to wear as part of his
personal protective equipment at the worksite.
We also note preliminarily that, like Judge McLean, we will not assume that
the Habilitation Court is without authority to address health and safety risks
associated with a ward’s ISP habilitation services. We need not resolve the issue
here, but we find it conceivable that hazards attendant to a supportive employment
worksite could amount to a constructive denial of ISP-mandated supportive
employment, and that allegations about such hazards could warrant an evidentiary
hearing.
On the present record, however, we can find no erroneous exercise of
discretion in the Habilitation Court’s determination not to hold a hearing on the
Emergency Motion. During a proceeding before the Habilitation Court on
September 14, 2020, when asked to proffer what witnesses he would present at an
of work, including many Superior Court judges and staff, since the height of the
COVID-19 pandemic. Thus, the work-from-home practices cited in the
Emergency Motion may no longer be the norm.
18
evidentiary hearing on the motion, Mr. Bergeron named only witnesses who would
testify about L.S.’s wishes and would say that they heard L.S. express that he was
willing to wait to return to work. On September 15, 2020, Mr. Bergeron filed an
additional pleading in which he asserted, regarding the claim that the supported
employment worksite was unsafe, that the Habilitation Court could rely on the
“scholarly articles” he had presented with the Emergency Motion, and in which he
requested that the court “take judicial notice [of] how these dangers [would] affect
[L.S.] if he returned to work.” Because counsel did not proffer that he would call
witnesses who would testify about the safety of L.S.’s supportive employment
worksite, we will not disturb the court’s decision not to hold a hearing on the
safety of the work environment. 13
***
For the foregoing reasons, this appeal is dismissed as moot insofar as it asks
this court to mandate that the Habilitation Court assess the ability of L.S. to
13
We note that Mr. Bergeron proffered the job-coach witness after
Magistrate Judge Wiedmann had denied the Emergency Motion and while her
ruling was under review by Judge McLean. The instant appeal does not challenge
Magistrate Judge Wiedmann’s ruling declining to hear, during the ISP review
proceeding, testimony from L.S.’s job coach or testimony about whether it was
safe for L.S. to return to work.
19
understand the risks of returning to work at his supported employment work and to
order that L.S. not return to work until a vaccination against the COVID-19 virus is
available. We affirm the ruling of the Superior Court upholding the Habilitation
Court’s determination not to hold an evidentiary hearing on the Emergency
Motion. It is
So ordered. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484425/ | Notice: This opinion is subject to formal revision before publication in the Atlantic
and Maryland Reporters. Users are requested to notify the Clerk of the Court of
any formal errors so that corrections may be made before the bound volumes go
to press.
DISTRICT OF COLUMBIA COURT OF APPEALS
No. 18-CF-1319
KELBY R. GORDON, APPELLANT,
v.
UNITED STATES, APPELLEE.
Appeal from the Superior Court
of the District of Columbia
(CF1-5776-16)
(Hon. Milton C. Lee, Trial Judge)
(Argued November 17, 2021 Decided November 17, 2022)
Mindy Daniels, for appellant.
David B. Goodhand, Assistant United States Attorney, with whom
Michael R. Sherwin, Acting United States Attorney, Elizabeth Trosman, Chrisellen
R. Kolb, Lindsey Merikas, and Monica Trigoso, Assistant United States Attorneys,
were on the brief, for appellee.
Samia Fam, with whom Shilpa S. Satoskar and Stefanie Schneider,
filed a brief on behalf of the Public Defender Service, as amicus curiae in support
of appellant.
Before BLACKBURNE-RIGSBY, Chief Judge, and MCLEESE and DEAHL,
Associate Judges.
Opinion for the court by Chief Judge BLACKBURNE-RIGSBY.
2
Opinion by Associate Judge MCLEESE, concurring in part and dissenting in
part, at page 51.
BLACKBURNE-RIGSBY, Chief Judge: Appellant Kelby Gordon was convicted
of two counts of second-degree murder, one count of assault with intent to kill while
armed (“AWIKA”), and three counts of possession of a firearm during a crime of
violence (“PFCV”). 1 On appeal, he argues that there was insufficient evidence to
sustain his conviction for AWIKA because the AWIKA “victim” was an unintended
bystander and he therefore did not act with any intent toward her, let alone intent to
kill. Furthermore, appellant argues that the trial court erred by allowing the jury to
find him guilty of AWIKA with respect to the unintended, uninjured bystander based
on the common law doctrine of transferred intent. In O’Connor v. United States,
399 A.2d 21 (D.C. 1979), this court explained that transferred intent “provides that
when a defendant purposely attempts to kill one person but by mistake or accident
kills another, the felonious intent of the defendant will be transferred from the
intended victim to the actual, unintended victim.” Id. at 24. However, the issue of
whether the doctrine of transferred intent can supply the necessary mens rea to
support a conviction of AWIKA as to an unintended bystander who is not injured is
a matter of first impression. For the reasons that follow, we hold that transferred
1
D.C. Code § 22-2103; §§ 22-401, -4502; § 22-4504(b).
3
intent does not apply in this case and we therefore vacate appellant’s AWIKA
conviction.
Appellant also argues that he is entitled to a new trial based on four evidentiary
issues and two issues related to jury instructions. Finally, he argues that he is entitled
to resentencing and an amended judgment. We reject appellant’s argument that he
is entitled to a new trial, but we agree that he is entitled to resentencing and an
amended judgment, and therefore remand for the trial court to address these issues.
I. Factual and Procedural History
On March 24, 2016, around 11:15 am, Gabriel Turner left his mother’s
apartment located in the Parkchester Apartments complex in the Southeast quadrant
of D.C., and walked toward a nearby bus stop on Martin Luther King, Jr. Avenue.
The events that followed were captured by a surveillance camera monitoring the
apartment complex, which first shows Mr. Turner walking on a sidewalk toward his
bus stop. A few seconds later, two other men enter the frame: a Black man with long
dreadlocks (“the shooter”) chasing a third man (“John Doe”) down the same
sidewalk. As John Doe passes by Mr. Turner, the shooter points his weapon in the
direction of the two men in front of him. At that moment, John Doe turns his head
4
toward the shooter, but keeps running and exits the frame. At about the same time,
Mr. Turner collapses onto the ground, and the shooter retreats and runs in the
opposite direction.
Additional surveillance cameras monitoring the apartment complex captured
the shooter’s next movements. From other angles, he is seen crossing the street and
descending down a stairway and into the front door of 2716 Wade Road, SE.
At the time of the shooting, Carol Morris was home at her second-floor
apartment on Martin Luther King Avenue, which was approximately 100-150 yards
from the shooting scene. She was lying in bed when she heard several gunshots,
including one that shattered her living room window and another that shattered her
bedroom window. She ran to the window to look and saw a person lying still on the
sidewalk below her building.
Detective Thomas O’Donnell arrived on the scene after Mr. Turner had been
transported to the hospital, where he later died from his injuries. He attempted to
speak to community members and reviewed footage from nearby surveillance
cameras. A crime-scene officer also recovered a bullet that had pierced the bedroom
window of Ms. Morris’s apartment. One bullet had gone through Ms. Morris’s
5
bedroom and pierced a wall; the other went through her living room and pierced a
mirror hanging on the door of a utility closet, lodging itself about half an inch into
the wall, near a water heater.
Detective O’Donnell soon learned that Detective Lavinia Quigley was
conducting undercover operations in the area, so he contacted her and told that her
he was looking for a “black male, long dreads, black jacket.” Detective Quigley told
Detective O’Donnell that his description sounded like a man she knew by the name
of “Mill or Millie.” The next day, Detective O’Donnell showed Detective Quigley
the surveillance video, and she identified the shooter as “Millie.”
Detective O’Donnell also learned that a person named Nadia Malloy lived in
the apartment at 2716 Wade Road, SE, which the shooter entered after the attack. A
few weeks later, Detective O’Donnell interviewed Ms. Malloy. During the
interview, she said that appellant was her former boyfriend, and that he was involved
in the shooting. According to Ms. Malloy, appellant told her that he shot and killed
an innocent person and ran into her house afterward. Malloy also identified him in
a photograph and said he went by the nickname “Mill.” Police arrested appellant
shortly after this interview. A grand jury subsequently indicted appellant for first-
degree murder and felony murder, in violation of D.C. Code §§ 22-2101, -4502;
6
assault with intent to kill while armed, in violation of D.C. Code §§ 22-401, -4502;
attempted robbery while armed, in violation of D.C. Code §§ 22-1803, -2801, -4502;
and possession of a firearm during a crime of violence, in violation of D.C. Code §
22-4504(b).
At trial, the government presented evidence that appellant confessed to two
individuals: Nadia Malloy, his former girlfriend, and Allen Culver, whom he spoke
to in the D.C. jail while awaiting trial. The government’s evidence also consisted
of: the surveillance footage; Detective Quigley’s identification of appellant; cell-
tower tracking analysis that placed appellant’s cell phone in the area of the shooting
at the time it took place; evidence that there were six casings from a .40 caliber gun
found on the scene; testimony that appellant carried a Glock-like gun; and testimony
from a firearms expert that the six cartridge casings found on the scene were likely
fired from the same type of Glock semiautomatic pistol.
During the defense case, appellant called Detective O’Donnell to testify.
Detective O’Donnell testified that, from the surveillance footage, it appeared that
John Doe also had a handgun at the time of the shooting, suggesting that John Doe
could have been the shooter that killed Mr. Turner.
7
Following the trial, a jury convicted appellant of two counts of the lesser-
included offense of second-degree murder, AWIKA, and three counts of PFCV.
This appeal followed.
II. Discussion
Appellant argues on appeal that there was insufficient evidence presented at
trial to sustain his conviction of AWIKA. He also contends that there were several
errors at trial, which — individually or cumulatively — deprived him of his right to
a fair trial. Specifically, appellant argues that the trial court: (1) admitted prejudicial
“other crimes” evidence; (2) allowed a police witness to make the ultimate
determination of guilt, thereby invading the province of the jury; (3) erroneously
admitted evidence of appellant’s threats to a witness; (4) erroneously admitted
toolmark evidence; and (5) read prejudicial jury instructions. Additionally, appellant
contends that he is entitled to an amended judgment based on merger, and
resentencing due to a conflict between the written judgment and the oral judgment
imposed by the court. We consider each issue in turn.
8
A. Applicability of the Transferred Intent Doctrine
At trial, appellant made a motion for judgment of acquittal (“MJOA”), arguing
that the government failed to prove the elements of AWIKA. In response, the
government argued that there was evidence that appellant intended to shoot John
Doe, and, under a theory of “transferred intent or concurrent intent, then that
intention transfers to the decedent for the homicide but also to Carol Morris for the
assault with intent to kill while armed.”
The trial court denied the motion, finding that there was evidence that
appellant had intent to rob John Doe; the surveillance footage supports an inference
of intent to kill John Doe; and appellant fired multiple shots, two of which ended up
in Ms. Morris’s house. Based on that evidence, the trial court reasoned that “the
evidence supports that [appellant] was not just trying to kill the John Doe and fired
in a manner that had rounds entering Ms. Morris’s apartment, but they also shot Mr.
Gabriel Turner in the back . . . .” 2 Over defense counsel’s objection, the court
2
After the close of all evidence, defense counsel renewed the MJOA, adding
that “there was no indication that the shooting . . . of Ms. Morris’s place was
voluntarily, on purpose, and not by mistake or accident.” The motion was likewise
denied by the judge because he found that there was “sufficient evidence from which
a reasonable jury could conclude that the shots fired at the John Doe [were] on
purpose.”
9
instructed the jury as follows: “If the government proves beyond a reasonable doubt
that Kelby Gordon fired shots actually intending to kill John Doe, but instead
actually assaulted Carol Morris, an unintended victim, then by operation of law, the
defendant’s intent to kill is transferred from John Doe to Carol Morris.”
In his brief, appellant argued that the AWIKA conviction should be reversed
because he could not simultaneously be held liable for second-degree murder and
AWIKA on a theory of transferred intent. In other words, appellant argued that his
intent to kill could only be transferred once – either to Mr. Turner or to Ms. Morris.
In response, the government noted that this court has squarely rejected the idea that
transferred intent is “used up” after its application to one unintended victim. See
Lloyd v. United States, 806 A.2d 1243, 1250 (D.C. 2002) (“[T]he principle of
transferred intent applies to satisfy the element of intent when a defendant harms
both the intended victim and one or more additional but unintended victims.”).
In appellant’s reply brief, he conceded that a defendant’s intent to kill is not
limited to one victim. However, he emphasized that he objected to the AWIKA
conviction because Ms. Morris “was not visible to the shooter, and while she saw a
bullet fly by her head, she was uninjured.”
10
Following oral argument, we ordered the parties to file supplemental briefing.
We asked the parties to address (1) whether there are cases in this jurisdiction
directly addressing the issue of whether the doctrine of transferred intent can supply
the necessary mens rea to support a conviction for [AWIKA] when an unintended
victim is not physically injured, and (2) whether this court should adopt or reject the
reasoning articulated by various state courts who have addressed this issue. We also
invited the Public Defender Service of the District of Columbia to file an amicus
brief addressing these issues.
Satisfied that the issue is fully briefed, we now address whether the trial court
erred by concluding that the intent underlying the murder charges could be
transferred to sustain an AWIKA conviction as to Ms. Morris, who was an
unintended victim and was not physically injured. We conclude that the trial court
so erred, and therefore vacate appellant’s AWIKA conviction.
“The standard by which we review a denial of a MJOA is de novo, and we,
like the trial court, determine whether the evidence, viewed in the light most
favorable to the government, was such that a reasonable juror could find guilt beyond
a reasonable doubt.” Tann v. United States, 127 A.3d 400, 424 (D.C. 2015) (internal
quotations and citations omitted). When reviewing the sufficiency of the evidence,
11
we “giv[e] full play to the right of the jury to determine credibility, weigh the
evidence, and draw justifiable inferences of fact, and mak[e] no distinction between
direct and circumstantial evidence.” West v. United States, 866 A.2d 74, 80 (D.C.
2005) (citing Busey v. United States, 747 A.2d 1153, 1160 (D.C. 2000)).
To obtain a conviction for AWIKA, the government must prove beyond a
reasonable doubt that the defendant (1) assaulted the victim, 3 (2) with the
specific intent to kill, (3) while armed. Washington v. United States, 111 A.3d 16,
23 (D.C. 2015). The issue we must resolve is whether the government presented
sufficient evidence from which a reasonable jury could conclude that appellant
demonstrated specific intent to kill with respect to the alleged assault on Ms. Morris.
Neither party argues that appellant actually intended to harm Ms. Morris, let
alone kill her. Instead, the government argues that the common law doctrine of
transferred intent applies to this case, and as a result, evidence demonstrating
3
We have endorsed varying formulations of assault. In Ruffin v. United
States, 642 A.2d 1288, 1295 (D.C. 1994), we stated that the elements were: “(1) an
act on the part of the accused (which need not result in injury); (2) the apparent
present ability to injure the victim at the time the act is committed; and (3) the intent
to perform the act which constitutes the assault at the time the act is committed.”
The parties do not dispute that Ms. Morris was assaulted, so we take for granted that
she was.
12
appellant’s intent to kill “John Doe” transfers to the assault on Ms. Morris.
Appellant contends that transferred intent is inapplicable here, where the unintended
victim was neither killed nor physically injured, but merely put in fear.
1. This court’s case law on transferred intent
This court has squarely held that the doctrine of transferred intent applies to
first-degree murder. O’Connor, 399 A.2d at 25. In O’Connor, this court explained
that transferred intent “derives from common law murder,” and “provides that when
a defendant purposely attempts to kill one person but by mistake or accident kills
another, the felonious intent of the defendant will be transferred from the intended
victim to the actual, unintended victim.” Id. at 24. However, we have not had many
subsequent opportunities to define the scope or limits of the transferred intent
doctrine, mainly because many cases discussing transferred intent have arisen in a
plain error posture. See, e.g., Ruffin v. United States, 642 A.2d 1288 (D.C. 1994);
Brooks v. United States, 655 A.2d 844 (D.C. 1995); Howard v. United States, 656
A.2d 1106 (D.C. 1995); Dockery v. United States, 853 A.2d 687 (D.C. 2004); West
v. United States, 866 A.2d 74 (D.C. 2005).
13
The parties disagree about whether this court has resolved the question
presented here. The government argues that this court has “repeatedly affirmed”
that the transferred intent doctrine may supply the necessary intent to kill to sustain
an AWIKA conviction, even if the unintended victim is not physically injured. By
contrast, appellant and amicus note that many transferred intent cases have arisen on
a plain error posture, so the question whether transferred intent applies to AWIKA
remains open. The disagreement appears to stem from this court’s decision in Moore
v. United States, 508 A.2d 924 (D.C. 1986). In that case, appellant was convicted
of assault with intent to commit robbery, D.C. Code § 22-401 (formerly codified at
§ 22-501), after he and his accomplice approached two men at gunpoint and shot at
one of the men in order to rob the other. Id. at 925. On appeal, this court considered
whether a defendant could be convicted of assault with intent to commit robbery
even though the assault victim was not the intended robbery victim. Id. Moore held
that that statutory prohibition of assault with intent to commit robbery was not
limited to a single victim, “particularly, where the assault on one victim is used to
effectuate the robbery of another at the scene.” Id. at 926. In reaching this
conclusion, this court noted that the language of the statute, which provides that
“[e]very person convicted of any assault with intent to . . . commit robbery, . . . shall
be sentenced to imprisonment for not less than 2 years or more than 15 years,” did
14
not address the question. Id. at 925 (citing D.C. Code § 22-501 (1981)). Drawing
instead on “common sense and evident statutory purpose,” this court reasoned that
[t]he increased penalty attendant to an assault with intent
to rob, as opposed to a simple assault, is reflective of a
major statutory purpose, to punish an assailant whose
criminal conduct potentially exposes the assault victim to
a greater risk of harm because the assault is accompanied
by an intent to commit another offense. In appellant’s
case, [the assault victim] faced greater danger because he
was with . . . the intended robbery victim. To hold that the
person assaulted must be the same individual the assailant
intended to rob, would disregard the many ways an
assailant may effectuate his intended robbery.
Id. at 926.
A few months after Moore was decided, this court considered a similar
question in Battle v. United States, 515 A.2d 1120, 1124 (D.C. 1986). In Battle,
appellants were convicted of assaulting one person with intent to kidnap another in
violation of D.C. Code § 22-403 (formerly codified at § 22-503). 4 Id. On appeal,
appellants argued that that “the intent to commit the ‘other offense’ (i.e., kidnapping)
[must be] directed to the person assaulted.” Id. This court relied on the rationale
from Moore and rejected appellant’s argument because it “would frustrate the
purpose of § 22-[4]03 in instances where, as here, a defendant assaults one victim
4
D.C. Code § 22-403 provides that “[w]hoever assaults another with intent to
commit any other offense which may be punished by imprisonment in the
penitentiary shall be imprisoned not more than 5 years.”
15
with the intent to effectuate the commission of another crime against a second
victim.” Id. at 1125.
After Moore and Battle came Brooks v. United States, 655 A.2d 844 (D.C.
1995). In Brooks, appellant was convicted of three counts of assault with intent to
murder while armed based on evidence that he fired five or six shots at an intended
victim who was standing with two other people. Id. at 845. One of the bystanders
was also struck in the legs, while the third was not hit, but was put in fear. Id. On
appeal, appellant argued that the trial court erred by “permitting the jury to ‘transfer’
his specific intent to murder [the intended victim] to the act of assaulting the two
unintended victims[.]” Id. at 846. This court reviewed only for plain error because
appellant did not object to the transferred intent instruction below. Id. at 847. On
plain error review, the majority opinion held that, while neither Moore nor Battle
mentioned the doctrine of transferred intent,
a Superior Court judge aware of Moore and Battle, asked
to instruct on transferred intent as in appellant’s case,
would not find it easy to say how that theory differs from
the very definition of § 22-[4]03’s mens rea, which
essentially makes the identity of the person intended to be
assaulted immaterial.
Id. at 848-49. In a concurring opinion, two judges emphasized that the holding of
Brooks was limited to a finding of no plain error, and did “not foreclos[e] an
argument against transferred intent in non-fatal assault cases[.]” Id. at 849 (Ferren,
16
J., concurring). Judge Mack also wrote separately to emphasize that “the factual
pattern in [Moore and Battle] reflected assaults on one victim with the intent to
‘effectuate’ the commission of another crime against a second victim.” Id. (Mack,
J., concurring). 5 In other words, intent was not transferred from one victim to
another. Neither Moore nor Battle involved an unintended victim because in both
5
Despite the concurrences’ caution, one subsequent decision by this court
suggested that Brooks stood for the broader proposition that an individual who is not
a target of a shooting and is not actually shot is the victim of AWIKA. See Dockery
v. United States, 853 A.2d 687, 699 n.11 (D.C. 2004). In a two-sentence footnote in
Dockery, we noted that appellant also questioned “whether an individual who is not
a target of the shooting and is not actually shot is the victim of an [AWIKA].” Id.
Highlighting that appellant failed to preserve this issue, we then stated, with no
analysis, that we have “answered that question affirmatively.” Id. Thus, this court
merely concluded that there was no plain error by the trial court.
The dissent concludes that Dockery controls here because we are bound even
by mistaken analysis in past precedents. But Dockery does not contain any holding
on this issue. Dockery’s only commentary on the issue, beyond stating that it was
not preserved, was to attribute a holding to past cases. Misstating the holding of
prior cases, with no attendant explanation or analysis, is not a holding, as “the
judicial mind was not focused on the issue we now confront.” Mills v. District of
Columbia, 259 A.3d 750, 758 (D.C. 2021) (internal quotations and citations
omitted). As we explained in Brooks, 655 A.2d at 849, the court can make
“observations only to demonstrate that the asserted error in instructing on transferred
intent could not have been ‘obvious or readily apparent’ to the trial judge,” which is
quite apart from issuing a binding ruling on the issue.
17
of those cases, the defendant intended to assault one victim so that he could commit
another crime. 6
Based on the foregoing, our cases indicate that when there is evidence that a
defendant committed an assault to effectuate another felony, the identity of the
assault victim need not be the same as the victim of the other felony to sustain a
conviction such as AWIKA. However, when evidence shows that a defendant
committed an assault to effectuate another felony, there is no need to “transfer” the
defendant’s intent because there are no “unintended victim[s]” who were physically
6
In McCrae v. United States, 980 A.2d 1082 (D.C. 2009), appellant
challenged the sufficiency of evidence to convict him for AWIKA with respect to a
plainclothes police officer who arrived on the scene during a shooting between two
rival gangs. Id. at 1090. This court affirmed and cited O’Connor, 399 A.2d at 25,
without analysis, for the proposition that “that the doctrine of transferred intent is
part of the law in the District of Columbia.” Id. at n.11. However, O’Connor held
only that the doctrine of transferred intent is part of this jurisdiction’s law with
respect to consummated homicide and did not consider its application in the context
of a non-fatal assault. Regardless, “the evidence showed McCrae was one of the six
gunmen who went to Holmead Place with the intent to shoot anyone they saw there.”
Id. (emphasis added).
Similarly, in Matter of E.D.P., 573 A.2d 1307 (D.C. 1990), appellant hit and
kicked three supervisors while attempting to fight with another detainee. This court
highlighted that “appellant was aware of the presence of the three juvenile
supervisors and despite that knowledge he swung his arms and legs without caring
who he hit.” Id. at 1308. Thus, the trial court had correctly concluded that intent
could transfer because “in hitting the three juvenile supervisors[,] [appellant’s act]
was not accidental or incidental, but rather a deliberate attempt to remove any
impediment to his ability to make contact with [another detainee].” Id.
18
harmed by “mistake or accident.” See O’Connor, 399 A.2d at 24. Thus, contrary
to the government’s assertion, the cases stemming from Moore do not decide the
present issue, and, contrary to the dissent’s position, we have not identified any other
binding precedent from this jurisdiction that is on point.
We therefore conclude that this court has never had the opportunity to
squarely address the narrow issue presented in this case – whether the doctrine of
transferred intent can supply the necessary mens rea to support a conviction for
AWIKA when an unintended victim is not physically injured. In other words, we
must determine as a matter of first impression if, “when a defendant purposely
attempts to kill one person but by mistake or accident [puts an unintended bystander
in fear], the felonious intent of the defendant will be transferred from the intended
victim” to the unintended bystander. See O’Connor, 399 A.2d at 24.
2. Other authority on transferred intent
Having identified no binding precedent exactly on point on this issue in our
jurisdiction, we take guidance from other courts. In Harvey v. State, 681 A.2d 628
(Md. Ct. App. 1996), the Maryland Court of Special Appeals reversed appellant’s
conviction for assault with intent to murder after concluding that the trial court erred
19
in instructing the jury on transferred intent because the victim was an unintended
bystander who was hit but not killed. Id. at 644. In reaching this conclusion, the
court conducted a comprehensive analysis of transferred intent and its application in
various scenarios, including “where the unintended target may have been 1) hit and
killed, 2) hit but only wounded, or 3) endangered but missed.” Id. at 634.
First, the Maryland court explained that “[t]he classic transferred intent
scenario was that in which lethal force was directed toward an intended victim,
missed its target, and killed an unintended victim. That was the context in which the
doctrine was hammered out as part of English common law.” Id. The court went
on to explain that the concept of transferred intent derived from a “necessity
principle” specific to homicide cases:
In cases involving the actual consummated homicide of an
unintended victim, the necessity is that the homicidal
agent can only be convicted of the homicide if the law can
attribute to him one of the murderous mentes reae. It is
frequently impossible to do that without resort to the
transferred intent doctrine.
Id at 642. Indeed, the severe punishment attendant to premeditated or deliberate
murder is a reflection of society’s desire to condemn those who set out to take
another’s life and succeed in doing so. Thus, when a defendant intends to kill one
victim, and due to bad aim, kills another, his “culpability under the law and the
resultant harm to society is the same as if he had accomplished the result he intended
20
when he caused the death” of the bystander. Gladden v. State, 330 A.2d 176, 188
(Md. 1974). “The punishment is imposed in accordance with the culpability of the
accused under the law and justice is served by punishing him for a crime of the same
seriousness as the one he undertook to commit.” Id. “The obvious purpose behind
this doctrine is to prevent a defendant from escaping liability for a murder in which
every element has been committed, but there is an unintended victim.” Poe v. State,
671 A.2d 501, 504 (Md. 1996).
By contrast, “non-application of the transferred intent doctrine to cases of
inchoate criminal homicide [including assault with intent to kill] does not create
the punishment vacuum that might be present in cases of consummated criminal
homicide.” Harvey, 681 A.2d at 642-43. For example, “[t]he defendant clearly can
be convicted of attempted murder as to the primary victim and some other crime,
such as criminal battery, as to other victims.” Id. at 643. Moreover, “[i]n the case
of unintended victims who are simply in harm’s way and are not actually injured,
the crime of reckless endangerment is also available to pick up much of the slack
and to make resort to the transferred intent doctrine less compelling.” Id. at 643.
The Maryland court further noted that “extend[ing] the doctrine of transferred intent
to cases where the [un]intended victim is not harmed would be untenable” because
the “absurd result would be to make one criminally culpable for each unintended
21
victim who, although in harm’s way, was in fact not harmed by a missed attempt
towards a specific person.” Id. at 639 (quoting Harrod v. State, 499 A.2d 959, 968
(Md. Ct. App. 1985)). 7
Likewise, the California Supreme Court has explained that
In its classic form, the doctrine of transferred intent applies
when the defendant intends to kill one person but
mistakenly kills another. The intent to kill the intended
target is deemed to transfer to the unintended victim so
that the defendant is guilty of murder. Whatever its
theoretical underpinnings, this result is universally
accepted. But conceptual difficulties arise when applying
the doctrine to other facts.
People v. Bland, 48 P.3d 1107, 1110 (Cal. 2002). In declining to extend transferred
intent to attempted murder, Bland identified an important concern applicable to the
question we must answer in this case:
Assuming an attempted murder scenario where the
defendant fires a shot at an intended victim and no
bystanders are physically injured, one sees that it is
virtually impossible to decide to whom the defendant’s
intent should be transferred. Is the intent to murder
transferred to everyone in proximity to the path of the
7
In Harrod, the defendant swung a hammer, intending to injure his wife’s
friend, but missed. 499 A.2d at 960-61. The hammer struck the wall above the crib
where the defendant’s son was sleeping. Id. at 960. Although the child was
uninjured, the defendant was convicted of assaulting him. Id. at 960-61. The Court
of Special Appeals reversed, holding that the doctrine of transferred intent does not
extend “to cases where a third person is not in fact harmed.” Id. at 963.
22
bullet? Is the intent transferred to everyone frightened and
thereby assaulted by the shot? There is no rational method
for deciding how the defendant’s intent to murder should
be transferred.
Id. (quoting Ford v. State, 625 A.2d 984, 1000 (Md. 1993)).
Considering the foregoing authorities, we are persuaded that extending
transferred intent to situations where an unintended victim is not physically injured
departs too far from the origins of the doctrine, which developed to hold a defendant
fully accountable for the most extreme form of harm. Transferred intent allows a
defendant to be punished “for a crime of the same seriousness as the one he
undertook to commit.” Gladden, 330 A.2d at 188. Thus, if a defendant shoots and
injures “A,” his intended victim, but kills “B,” an unintended victim, applying
transferred intent is necessary to find the defendant guilty of murdering “B.”
Without transferred intent, the defendant could be found guilty of attempted murder
or AWIKA of “A” and perhaps manslaughter of “B,” but he would escape liability
for the more serious crime of intentional murder despite his actions and criminal
state of mind. By contrast, transferred intent is not necessary to hold a defendant
criminally liable for AWIKA when an unintended target does not suffer any physical
injury. If a defendant shoots at “A,” and misses, injuring no one, he may still be
convicted of AWIKA as to the intended victim without transferred intent.
23
Additionally, like the Maryland and California courts, we are concerned with
the potentially expansive liability that would result by extending transferred intent
to assaults on unintended victims who suffer no physical injury. The government
appears to share this concern and asserts that this court’s decision in Lloyd
“suggests” that an unintended victim’s harm must, at minimum, be foreseeable. See
Lloyd, 806 A.2d at 1249. However, as the government acknowledges, Lloyd
assumed, without deciding, that transferred intent would only apply to a foreseeable
homicide victim, and did not consider “a hypothetical situation in which the death
of an unintended victim or victims is entirely unforeseeable.” Id. at 1249 n.5.
Importantly, Lloyd concerned transferred intent to sustain a first-degree murder
conviction; thus, the Lloyd court had no occasion to consider whether foreseeability
would meaningfully limit liability if transferred intent were applied to unintended,
uninjured victims. Indeed, we do not view foreseeability as a meaningful limitation
because, unlike in the case of murder, non-injurious assaults on bystanders can
theoretically occur any time a defendant acts with an intent to kill. If physical injury
to a bystander were irrelevant to transferred intent, many more defendants who are
charged with intent-to-kill crimes could begin to face additional charges for AWIKA
against unintended bystanders who are arguably in harm’s way. 8 We can imagine a
8
It is for this reason that the principles of merger may not be sufficient to
limit liability. A “single assaultive act[] directed at a group of individuals (injuring
24
scenario where defendants are routinely charged with an additional count of AWIKA
any time there is evidence that a bystander was present when they acted with intent
to kill, regardless of the resulting physical harm to the alleged AWIKA victim. For
example, any shooting near an apartment building could lead to additional charges.
Instead of ensuring “that the proper punishment can be imposed,” Ruffin, 642 A.2d
at 1295, applying transferred intent to sustain an AWIKA conviction when an
unintended bystander is not physically injured would expose defendants to up to
fifteen years of additional prison time, even though they caused no additional injury
as a result of their actions and criminal state of mind. See D.C. Code § 22-401. 9
none of them) . . . give[s] rise to only one count of assault.” Ruffin, 642 A.2d at
1296 n.14. However, “[w]here multiple shots are fired at more than one person,
multiple convictions are appropriate.” Id.
9
We note that at least two other courts have concluded that physical injury is
not necessary to apply transferred intent. See State v. Gillette, 699 P.2d 626, 636
(N.M. Ct. App. 1985); Commonwealth v. Melton, 763 N.E.2d 1092, 1098-99 (Mass.
2002). However, as the Alaska Court of Appeals has noted, under such a rule, a
defendant could be found guilty of attempting to kill everyone in a crowded building
when a defendant fires multiple shots at the intended victim. Ramsey v. State, 56
P.3d 675, 681-82 (Alaska Ct. App. 2002). We recognize that, in this jurisdiction, “a
single assaultive act—directed at a group of individuals, but injuring no one—bears
only one count of assault.” McCoy v. United States, 890 A.2d 204, 214 n.28 (D.C.
2006). But, as noted, when multiple shots are fired involving more than one person,
“‘multiple convictions are appropriate.’” Id. (quoting Ruffin, 642 A.2d at 1296).
We reject the reasoning in Gillette and Melton to the extent they failed to consider
this illogical result.
25
In light of the reasons we have articulated, we therefore hold that the doctrine
of transferred intent is inapplicable to sustain a conviction of AWIKA when there is
no physical injury to an unintended victim. 10
Because we determine that transferred intent does not apply to AWIKA when
an unintended victim is not injured, whether appellant was guilty of AWIKA with
respect to Ms. Morris “depends on his mental state as to [her] and not on his mental
state as to the intended victim.” Bland, 48 P.3d at 1110.
To be clear, we do not suggest that Ms. Morris was not harmed by the bullets
entering her home. Ms. Morris was, undisputedly, put in fear by the gunfire,
including by one bullet that flew over her head. However, Ms. Morris was also
entirely unseen by appellant, and she was physically uninjured. Accordingly, we
must vacate appellant’s AWIKA conviction because it is undisputed that the
10
This does not mean that a defendant can never be convicted for AWIKA of
an unintended, uninjured victim. This jurisdiction has adopted the theory of
concurrent intent “[w]here the means employed to commit the crime against a
primary victim [e.g., a hail of gunfire] created a zone of harm around that victim, the
fact[-]finder can reasonably infer that the defendant intended that harm to all who
are in the anticipated zone.” Ruffin, 642 A.2d at 1298 (internal quotations and
citations omitted). This court has only applied concurrent intent in cases where an
unintended victim is foreseeably at risk. See, e.g., West, 866 A.2d at 80 (finding that
an instruction of concurrent intent would have been appropriate “where the
unintended victim’s proximity, known to appellant, exposed her to harm when he
began to fire at the intended victim.”).
26
government failed to produce any evidence that appellant assaulted Ms. Morris with
the specific intent to kill her or in order to effectuate another killing.
B. Evidence of Other Crimes
Appellant next raises several trial errors, including the court’s admission of
“other crimes evidence.” At trial, Detective Quigley identified appellant as the
shooter. Detective Quigley was able to identify appellant because at the time of the
shooting, she was working undercover to investigate appellant for conspiracy to sell
drugs. Before trial, the government explained that Detective Quigley would not
testify about appellant’s drug sales, but that it would present body-worn camera
videos of Detective Quigley interacting with appellant in a hallway while
undercover. The government edited these videos to eliminate any visuals or
discussions about buying drugs. According to the government, these videos “go[]
to the length and nature of [Detective Quigley’s] interaction with [appellant], how
close they are, how long she’s actually speaking to him face to face.”
The trial court found that this evidence was “incredibly probative” of
Detective Quigley’s ability to identify appellant and, after viewing the footage, was
satisfied that the jury would not see any evidence of illegal drug dealing. As a result,
27
the judge allowed the government to show the videos to the jury. Detective Quigley
also testified that she continued to interact with appellant over the phone and through
text messages. She discussed one day when they planned to meet up, and she texted
appellant, “Yeah, how much? I’m about to walk to you.” 11 On appeal, appellant
argues that the trial court erred in admitting Detective Quigley’s testimony about
working undercover, the videos, and text messages because they were evidence of
“other crimes” that were more prejudicial than probative. We disagree and affirm
the trial court on this issue.
A trial judge has “broad discretion to determine the substance, form, and
quantum of evidence which is to be presented to a jury.” Johnson v. United
States, 452 A.2d 959, 960 (D.C. 1982). Our scope of review is limited to whether
the trial court has abused its discretion. Rodriguez v. United States, 915 A.2d 380,
385 (D.C. 2007).
Appellant relies mainly on Drew, which states:
It is a principle of long standing in our law that evidence
of one crime is inadmissible to prove disposition to
commit crime, from which the jury may infer that the
defendant committed the crime charged. Since the
11
One of the two button-camera videos presented at trial took place on the
same day as the text that read, “Yeah, how much?” Detective Quigley testified that
she was texting with “Millie” before meeting up with appellant, as seen in the video.
28
likelihood that juries will make such an improper
inference is high, courts presume prejudice and exclude
evidence of other crimes unless that evidence can be
admitted for some substantial, legitimate purpose.
Drew v. United States, 331 F.2d 85, 89-90 (D.C. Cir. 1964). At trial, appellant
objected only to the videos, 12 and takes issue with them on appeal, insisting that the
videos show clear evidence of illegal drug transactions. The government contends
that the footage is not evidence of “other crimes,” but is rather evidence of prior
contacts with police. Accordingly, the government notes that “[t]his court has held
on several occasions that evidence of prior contacts with the police does not
necessarily amount to evidence of other crimes or bad acts.” Rodriguez, 915 A.2d
at 387 (citing Chappelle v. United States, 736 A.2d 212, 215 (D.C. 1999)). Indeed,
in Rodriguez, this court found no error in allowing police officers to testify that they
knew a defendant “from the area,” reasoning that these were neutral references and
their probative value outweighed the risk of prejudice. Id. at 384, 386-87.
12
During the government’s direct-examination of Detective Quigley, she was
asked about her considerations and priorities while working undercover, including
how she stays safe and how she stays in touch with her backup team. During this
discussion, defense counsel objected to “this entire line of questioning” arguing that
it “has now turned into a drug trial.” The court overruled the objection because “she
didn’t say anything about drugs” and “she could be investigating anything.” Before
the texts were published to the jury, defense counsel was specifically asked whether
he objected, and he declined.
29
Here, the videos reveal more than an officer’s “neutral references” to their
prior contacts with a defendant. The visual element allowed jurors to make
inferences as to what is happening in the footage and likely invited them to speculate
as to why the detective was investigating appellant undercover with a camera.
However, as discussed above, the government agreed to edit the footage to eliminate
visuals of drug interactions and to mute certain portions of the video in which drug
transactions were discussed.
In any event, regardless of how the evidence is characterized (“other crimes,”
“prior contacts” or otherwise), its admissibility is determined by a balance of the
probative value versus the prejudicial effect. Evidence of other crimes “may be
admitted if the government shows that the importance of the evidence to proving a
material fact in issue outweighs its potential for unfair prejudice.” Wilson v. United
States, 690 A.2d 468, 471 (D.C. 1997) (Ruiz, J., concurring). Similarly, evidence of
prior contacts with police, even when relevant, is inadmissible if the danger of unfair
prejudice substantially outweighs its probative value. See Rodriguez, 915 A.2d at
385-86.
We see no reason to disturb the trial court’s conclusion that the probative
value of the videos outweighed their prejudicial effect. As the trial court explained,
30
if [the video clips hurt], that’s not a reason to keep it out.
[It has] to be unfairly prejudicial. And I just have to say,
I don’t see it. The government seems to have been
reasonable in trying to cut out things that might suggest
illegal activity. It’s just a bunch of dudes hanging out in a
hallway.
…
There’s no clear drug transaction on there. The
government’s taken out references and statements about
drugs. You know it’s probative. It’s incredibly probative
because the government’s got to prove identity. And the
video of the actual shooting is . . . the most significant
evidence of that. And the identification of the person on
there by an officer who’s had direct and extended contact
with Mr. Gordon seems incredibly probative. And to the
extent that there is some unfair prejudice, it certainly
seems not to be so substantial that it outweighs probative
value.
While there may have been some risk that the jury would infer wrongdoing
from the fact that the detective was undercover with a camera, or from the footage
itself, we cannot conclude that risk “substantially outweigh[ed] [its] probative
value.” Johnson v. United States, 683 A.2d 1087, 1099 (D.C. 1996) (en banc).
Accordingly, we affirm the trial court’s ruling on this issue.
C. Jury Instructions
Appellant next raises two issues related to the trial court’s jury instructions.
First, appellant argues that the trial court erroneously responded to the jury’s request
31
that it elaborate on the meaning of circumstantial evidence. Second, appellant
contends that the trial court coerced a verdict when it asked the jury to continue
deliberating after they said they were deadlocked. We disagree as to both arguments.
1. Re-instruction on circumstantial evidence
Before the jury was sent to deliberate, the trial court gave instructions that
included an explanation of the difference between circumstantial and direct
evidence. 13 Several hours later, the jury sent the court a note asking, “[C]an you
13
The court read the Red Book instructions:
Now, there are two types of evidence from which you may
determine the facts in this case. There is direct evidence
and there is circumstantial evidence.
So when a witness, such as an eyewitness, asserts actual
knowledge of a fact, that witness’ testimony is considered
direct evidence.
On the other hand, evidence of facts and circumstances
from which reasonable inferences may be drawn is
circumstantial evidence.
So let me see if I can give you an example.
Assume a person looked out a window and saw it snowing.
And they then came to court and testified that during the
course of these events you looked out the window and it
32
elaborate on circumstantial evidence and what it means.” The trial court gave the
parties an opportunity to suggest responses, and the government requested that the
court provide the following additional examples of direct and circumstantial
evidence:
[I]f a child tells their parent that they ate . . . their birthday
cupcake that is direct evidence. Circumstantial evidence
would be if an adult observes the cupcake missing from
the cupcake stand, cupcake crumbs leading to the child,
frosting on the child’s face.
Defense counsel objected to any more examples and requested that the court
“give [the jury] what they asked for . . . an explanation of the difference between
circumstantial and direct evidence.” Defense counsel also asked that the court
include language that, “proof of an ultimate fact may not be based upon mere
was snowing. That would be direct evidence that it was
snowing during the course of the incident.
On the other hand, circumstantial evidence, if a witness
were to come home, no snow on the ground, no snow on
the cars, trees or homes adjacent to the witness’. And the
witness goes in and takes a nap. And when the witness
wakes up, looks out the window, and sees snow on the
ground, on cars, on trees and on other homes and testified
to that fact in court. You can reasonably conclude that it
actually snowed during the time and that that witness was
asleep. That, ladies and gentlemen, is circumstantial
evidence.
The law says that both direct and circumstantial evidence
are acceptable means of proving a fact. And the law does
not favor one form of evidence over another.
33
possibility, speculation or conjecture.” Ultimately, the court decided that another
example would help dispel the jury’s confusion, reasoning that “what we gave them
in the current set of instructions did not answer the question satisfactorily for them.”
Accordingly, the trial court crafted a response that included both an explanation and
another example:
Circumstantial evidence is based on reasonable inferences
drawn from factual evidence. For example, what a witness
may have seen, heard, smelled, felt or tasted,
circumstantial evidence is evidence that tends to prove a
fact by proving other events or circumstances which afford
a basis for a reasonable inference of the occurrence of the
fact at issue.
However, when considering circumstantial evidence, you
must accept only reasonable conclusions and you must
reject any conclusions that are unreasonable or that are
based on speculation or guesswork.
So let me try to give you an additional example of what
we mean by circumstantial versus direct evidence.
If a parent observed their child eat a cupcake and then later
came to court to testify about what they had observed, that
would be direct evidence. By contrast, circumstantial
evidence would be if the parent observed a cupcake
missing from the cupcake stand and cupcake crumbs
leading to the child’s bedroom. And then saw frosting on
the child’s face. The parent could reasonably draw the
inference that the child ate the cupcake.
In determining whether the government has met its burden
of proof, of proof beyond a reasonable doubt, you should
consider all of the evidence both direct and circumstantial.
34
The law does not favor one form of evidence over the
other. You are permitted, ladies and gentlemen, to give
equal weight to both direct and circumstantial evidence.
In the end, you should give all of the evidence, whether it
be direct or circumstantial, as much weight as you believe
it is fairly entitled to receive.
Appellant forcefully argues that the court’s instruction was erroneous because
the cupcake example was unbalanced and too closely mirrored the government’s
evidence. We disagree.
The decision on what further instructions to issue to the jury lies within the
sound discretion of the trial court, and we review for abuse of discretion. Gray v.
United States, 79 A.3d 326, 337 (D.C. 2013) (internal citations omitted). Here, the
trial court was tasked with clearing up the jury’s confusion. “In response to specific
difficulties encountered by the jury, the trial court must clear them away with
concrete accuracy.” Washington v. United States, 111 A.3d 16, 24 (D.C. 2015)
(internal quotation marks and citations omitted). In so doing, “the trial judge must
be especially alert not to send the jury back to resume deliberations having most
recently heard supplemental instructions which are unbalanced.” Davis v. United
States, 510 A.2d 1051, 1053 (D.C. 1986). Considering both parties’ suggested
responses alongside the court’s ultimate instruction, we conclude that the court
35
provided a balanced response that was reasonably crafted to dispel the jurors’
confusion.
Defense counsel urged the court to simply re-read the Red Book instruction.
However, the trial court recognized that it had an obligation to respond as directly
as possible to the jurors’ confusion, and the original instruction “did not answer the
question satisfactorily for them.” While the trial court rejected defense counsel’s
suggestion, it did not fully adopt the government’s proposed response either. The
court edited the government’s suggested example to eliminate the reference to a
child “telling” their parent that they ate a cupcake in order to avoid highlighting the
evidence of the confessions. Additionally, the court was responsive to defense
counsel’s concern that the re-instructions should not merely highlight the senses of
hearing and seeing. It therefore included in its explanation that circumstantial
evidence could be based on “reasonable inferences drawn from factual evidence . . .
[including] what a witness may have seen, heard, smelled, felt or tasted[.]”
Moreover, the trial court adopted defense counsel’s suggestion to remind the jury
that, when considering circumstantial evidence, they must accept only reasonable
conclusions and must reject any conclusions that are based on speculation or
guesswork. In sum, the trial court’s re-instruction represents a compromise that
reflects both parties’ concerns.
36
Appellant also argues that the trial court’s cupcake example was not neutral
and too closely mirrored the government’s evidence. In appellant’s view, the re-
instruction “was an illustration of frosting on the defendant’s mouth and an inference
that he had gotten caught with his hand in the proverbial cookie jar.” Appellant
further argues that the “cupcake crumbs” were an “obvious reference” to the
government’s trail of evidence because at closing arguments, the government
referenced a “path of stones” leading to defendant. We find no obvious connection
between the court’s example and the government’s evidence. The example is neutral
on its face. It merely illustrates a parent observing a missing cupcake, crumbs on
the floor, and frosting on the child’s mouth. There is no language suggesting any
wrongdoing on the child’s part or anything else connecting the example to the facts
of this case. Accordingly, we conclude the trial court’s re-instruction on
circumstantial evidence was balanced, neutral, and cleared the jury’s response with
concrete accuracy, and thus was not an abuse of discretion.
2. Coerced Verdict
Appellant also argues that the judge coerced a verdict when it asked the jury
to continue deliberating after they announced they were deadlocked. We disagree.
37
Twenty minutes after the jury received re-instructions on circumstantial
evidence, they sent the judge another note asking to see Ms. Malloy’s testimony
again. Once the jurors received the transcript of Ms. Malloy’s testimony, they
continued deliberating for two additional hours before announcing a deadlock.
Appellant moved for a mistrial, but the government requested Red Book Instruction
2.601(I) (Initial Instructions to Jury That Indicates It Cannot Agree). The court
followed the pattern instruction to near precision, 14 adding only the context that the
jury had recently requested to review Ms. Malloy’s testimony:
So I recognize that you have indicated to us that you
believe you are deadlocked at this point.
This is a case that took multiple days of evidence. There
are a number of exhibits, a good number of witnesses and
14
The Red Book instruction reads:
Your note indicates that you have been unable to reach a
unanimous decision at this time. [This has been a relatively long
trial—longer than many trials we have in this courthouse. There
were a large number of witnesses who testified and a substantial
amount of evidence received, and I would expect that it would
take some time to reach a resolution of this matter.] My best
judgment is that you have been deliberating for a total of about
[[insert number] [hours] [days]], which is not unusual in cases
such as this. As a result, I am going to ask that you deliberate
further in this case and that you keep an open mind about the case
with a view to listening to others and expressing your own point
of view to see whether you can reach a unanimous decision.
Please resume your deliberations at this time.
38
exhibits. This case is longer than most cases that are tried
here in the Superior Court.
In addition to that, you requested on Friday, after we
responded to your first note, that you wanted to see the
transcript of a particular witness; and then, in response to
a separate note, you indicated that you did not believe that
deliberations would be helpful without first getting that
transcript.
And so we then undertook the efforts to get the transcripts
and delivered them to you this morning for your
deliberations.
Given the delayed start on Friday, my rough estimate—
it’s very rough—is that, between receiving the case on
Thursday, the limited ability to deliberate on Friday and
then this morning’s deliberations, you’ve had about five
hours or so to look at a case that, as I’ve indicated, with
multiple witnesses, a good number of exhibits and that
additional transcript that I gave you, I would expect that it
would take some time to reach a resolution in this matter.
Given all that I’ve just related to you and given the period
of time that you have been deliberating, I am going to ask
you to deliberate further in this case, but to make sure that
you keep an open mind about the case, about the evidence,
with a view towards listening to others and expressing
your very own point of view about the evidence to see if
you can reach a unanimous verdict.
So, with that, ladies and gentlemen, I’m going to ask you
to return to deliberations.
Appellant argues that the language about Ms. Malloy’s testimony is coercive
because it admonishes the jury for not looking more closely at the evidence.
However, appellant never objected to the court’s instructions at trial. Therefore, he
39
must demonstrate plain error. See Guevara v. United States, 77 A.3d 412, 418 (D.C.
2013).
A jury instruction is impermissibly coercive if it “would objectively appear to
force a juror to abandon his honest conviction as a pure accommodation to the
majority of jurors or the court.” Fortune v. United States, 65 A.3d 75, 85 (D.C.
2013) (quotations omitted). “It usually is not coercive for a judge to respond initially
to a deadlock note simply by asking the jury in neutral, careful terms to continue
deliberating . . . Indeed, a pattern jury instruction is available for this purpose.” Id.
at 86.
The pattern jury instructions allow a court to remind the jury of the length of
the trial, the number of witnesses, and the amount of evidence. The trial court’s
instructions here were consistent with this framework. The language about the
testimony transcript merely highlighted the specific evidence the jury indicated it
needed to review. Moreover, the jury had only been deliberating for five hours after
a two-week trial. Considering the jury’s request for the transcript along with the
timeframe of the deliberations, we cannot conclude that these instructions
exacerbated any “danger of coercion that exists where the jury has been deliberating
without result for a considerable length of time[.]” Fortune, 65 A.3d at 85-86
40
(internal quotations omitted). Thus, the trial court did not err – let alone plainly err
– by instructing the jury as it did.
D. Detective O’Donnell’s Testimony as to Appellant’s Guilt
Appellant next argues that Detective O’Donnell invaded the province of the
jury by testifying as to the ultimate issue of guilt. Detective O’Donnell was called
as a witness by the defense. During defense counsel’s direct examination, Detective
O’Donnell testified that the surveillance video showed that “John Doe” appeared to
have a handgun. On cross-examination, the government clarified that “John Doe”
appeared to pull out a firearm after he ran past the decedent, so John Doe’s back was
to decedent when he was killed. The government then asked, over objection, “[I]t’s
also correct that Kelby Gordon is the only one with a gun standing behind the
decedent, right?” The detective responded, “That’s true.” Appellant argues that this
was impermissible testimony about the ultimate issue of fact and guilt.
Appellant relies exclusively on Lampkins v. United States, 401 A.2d 966, 968-
69 (D.C. 1979), for the contention that this testimony invaded the province of the
jury. However, Lampkins considered whether an expert’s testimony “went beyond
helpful background information” and whether the expert opined about an issue
41
which the “jury was as competent as the expert” to assess. Id. at 969. Therefore,
Lampkins is inapposite.
Additionally, Detective O’Donnell did not “tell the jury what result to reach.”
See Steele v. D.C. Tiger Mkt., 854 A.2d 175, 181 (D.C. 2004) (internal citations and
quotations omitted). Before Detective O’Donnell was called by the defense, he had
testified for the government. During his earlier testimony, the detective was careful
to use generic terms to describe the person who shot at John Doe; he used terms such
as “the person,” “the shooter,” “the individual,” “[t]he individual that was behind
Mr. Turner,” and “the person fleeing toward Birney Place.” During the contested
portion of his testimony for the defense, the detective was explaining the location of
the three individuals on the surveillance videos relative to one another. Therefore,
the jury likely understood that when Detective O’Donnell agreed that “Kelby
Gordon” was standing behind Mr. Turner with a gun, he was agreeing as to the
individual’s location behind Mr. Turner, not that the individual was Kelby Gordon.
In any event, we agree with the government that any error in admitting this
testimony was not particularly prejudicial. At this point in the trial, the jury had
heard all of the government’s evidence, and therefore knew that the government’s
theory of the case rested on the two confessions, along with Detective Quigley’s
42
identification of appellant, and cell-tower analysis putting appellant’s phone close to
the murder scene, and not on Detective O’Donnell’s last-minute “identification.”
Moreover, defense counsel could have clarified on re-direct that Detective
O’Donnell had no familiarity with appellant, but declined to do so. In sum, we see
no error in admitting this testimony, and even if there was error, it was harmless
considering the strength of the other evidence in this case.
E. Toolmark Evidence
Next, appellant argues that the trial court erred by admitting prejudicial
toolmark identification evidence. At trial, the government called Christopher
Coleman to testify as a firearms expert. He discussed the markings he had observed
on the six shell casings discovered at the murder scene and two bullets recovered
from Mr. Turner’s body and Ms. Morris’s apartment. Mr. Coleman explained that,
based on this “toolmark evidence,” the six casings “most likely” were fired from
some type of Glock semiautomatic pistol. He further testified that the two bullets
were “consistent” with a Glock, but he could not exclude another type of gun, or say
conclusively that they were fired from the same gun. On re-direct, Mr. Coleman
testified that “all six cartridge cases were fired in the same gun.” Appellant did not
object to Mr. Coleman’s testimony at trial. We thus review only for plain error.
43
Williams v. United States, 130 A.3d 343, 347 (D.C. 2016) (citing Jones v. United
States, 990 A.2d 970, 980-81 (D.C. 2010)).
Appellant cites this court’s holding that “it is error for an examiner to provide
unqualified opinion testimony that purports to identify a specific bullet as having
been fired by a specific gun via toolmark pattern matching.” Williams v. United
States, 210 A.3d 734, 742-43 (D.C. 2019). Williams expressly limited its holding to
the precise issue of an examiner providing “unqualified testimony,” and did not
reach the related issue of whether an expert using toolmark analysis may link a
specific bullet to a specific gun if he does not “do so with absolute or 100%
certainty.” Id. at 740-41 (quoting Gardner v. United States, 140 A.3d 1172, 1184
n.19 (D.C. 2016)). Appellant’s reliance on Williams is misplaced because Mr.
Coleman neither provided unqualified testimony nor matched a specific bullet to a
specific gun. Rather, Mr. Coleman was careful to qualify his opinion, and only
opined on the fact that the six cartridges were most likely fired from a similar type
of unspecified gun. Accordingly, the trial court did not err – let alone plainly err –
by failing to sua sponte strike Mr. Coleman’s testimony. 15
15
Williams v. United States, 210 A.3d 734, 736 (D.C. 2019), was issued after
the trial. However, “plainness is assessed as of the time of appellate review
regardless of the state of the law at the time of trial.” Malloy v. United States, 186
A.3d 802, 815 (D.C. 2018) (internal quotations and citations omitted).
44
F. Evidence of Appellant’s Threat to Ms. Malloy
Appellant next argues that the trial court erred when it admitted evidence that
appellant sent a threatening text message to Ms. Malloy. Specifically, appellant
allegedly texted her: “Bitch, you set me up.” The government contends that this
evidence was admissible as consciousness of guilt and because it rebutted
appellant’s suggestion that Ms. Malloy was cooperating with the government in
exchange for financial benefits. We agree with the government and affirm the trial
court’s admission of this testimony.
At trial, Detective O’Donnell testified for the government that, after the
shooting, Ms. Malloy told him that appellant was connected to the incident. On
cross-examination, defense counsel suggested that police enticed Ms. Malloy to
cooperate by offering her money and other benefits. Defense counsel asked
Detective O’Donnell, “So you agree that if she would assist you, you would get her
someplace to live; right?” Detective O’Donnell explained that he told Ms. Malloy
that he could “assist her in getting alternate housing” if “her helping us in this
investigation was only hindered by the fact that she would be scared to live in her
place[.]” On re-direct, Detective O’Donnell further explained that Ms. Malloy had
45
told him that she was scared to stay in the neighborhood because of “a specific threat
that [appellant] had made to her.” Defense counsel objected to testimony about this
threat, but the trial court ruled that the testimony was admissible to rebut the
“implicit suggestion that Ms. Malloy was looking for other benefits” and it
demonstrated “that she had a reason to fear for her safety, and that was the real reason
that she wanted to get moved.”
Later on in the trial, Ms. Malloy testified for the government. On direct
examination, she explained that she had not wanted to be a witness in a murder trial
because “[they] get threats” and “[t]hey don’t live long.” She then testified, “It was
threatening towards me when he said that I set him up.” 16 During cross-examination,
defense counsel again suggested that Ms. Malloy was cooperating with the
government in order to receive financial benefits, including “services” and
“subsistence.” 17 On redirect, she explained that the government placed her in a hotel
for her safety and covered her travel expenses from the hotel to her job.
16
Ms. Malloy testified in front of a grand jury that appellant sent the threat in
a text message, but that she had deleted the specific text. At trial, the government
elicited testimony from Ms. Malloy that she had testified at the grand jury based on
her memory, and that she had several forms of contact with appellant, including
phone, text, and in person.
17
Defense counsel tried to impeach Ms. Malloy’s credibility with this line of
questioning. He suggested that Ms. Malloy had been trying to move away from the
46
It is well established that “[e]vidence that a defendant made threats to
witnesses against him in a criminal proceeding is relevant to show the defendant’s
consciousness of guilt.” Haney v. United States, 41 A.3d 1227, 1230-31 (D.C. 2012)
(internal citations and quotations omitted). However, the “admissibility of such
evidence has its limits, for it has great potential for prejudice to the accused.” Id. at
1231 (internal citations and quotations omitted). Accordingly, “this court and others
have been alert to perceive serious prejudice from threats evidence when the context
does not clearly warrant its admission.” Id.
Threat evidence is admissible if it is being used to rehabilitate a witness after
their credibility has been impeached. See Mercer v. United States, 724 A.2d 1176,
1181, 1193 (D.C. 1999). In Mercer, defense counsel sought to impeach a witness
by suggesting that her motivation for entering the witness protection program was
to get paid by the government. Id. at 1193. In response, the prosecution was allowed
Parkchester Apartments for years because it was “not the best of communities” and
faced “financial pressure” to give her children nice things. At closing argument, he
asserted that “from the moment [Ms. Malloy] cooperated she’s been treated like a
queen.” He also returned to the theory that Ms. Malloy was desperate to get out of
Parkchester, rhetorically asking “[y]ou don’t think she’s been trying to get out of
that neighborhood for the last 16 years?”
47
to rehabilitate the witness by presenting evidence of an alleged threat in order to
demonstrate that the witness’s true motivation for entering the program was fear. Id.
Here, the trial court’s admission of the threat evidence was consistent with
Mercer and Haney. The trial court considered the context of the threat evidence
before allowing its admission, and found that it was being used to rebut the
suggestions that Ms. Malloy was cooperating for financial gain. The trial court
found that this context “clearly warrant[ed] its admission.” Haney, 41 A.3d at 1231.
Similar to the situation in Mercer, appellant repeatedly suggested that Ms. Malloy
was biased toward the government because prosecutors were offering her cash and
other benefits. It was thus fair to give the government a chance to explain that Ms.
Malloy was merely receiving assistance in order to keep her safe after being
threatened by appellant. Therefore, we see no error in the trial court’s ruling on this
issue.
G. Resentencing and Amended Judgment
Finally, appellant argues that he is entitled to resentencing and an amended
judgment. Appellant contends, and the government concedes, that one of his murder
convictions should be vacated and two of his PFCV convictions should merge into
48
the third. We agree. “When there is only one killing, the defendant may not be
convicted of more than one murder.” Jackson v. United States, 750 A.2d 551, 552
(D.C. 2000) (internal quotations and citations omitted). Additionally, multiple
counts of PFCV merge when only one gun was used and the incidents were not
separated by time and location. Nixon v. United States, 730 A.2d 145, 153 (D.C.
1999), cert. denied, 528 U.S. 899 (1999). Here, there was only one decedent and the
shooting took place within a few seconds in one location. Therefore, we remand to
the trial court to vacate one second-degree murder conviction and two of the PFCV
convictions.
Appellant also argues that his written judgment improperly imposed a
mandatory minimum term of 120 months’ imprisonment, whereas the judge orally
imposed 60 months’ mandatory minimum. At sentencing, the trial court imposed a
sentence of 324 months’ imprisonment for the second-degree murder while armed
offenses, to run concurrently with 60 months for the related PFCV charges.
Consecutive to those sentences, he imposed 120 months for AWIKA and 60 more
months for the related offense of PFCV, to run concurrently to one another. After
discussing the AWIKA and related PFCV counts, he stated, “[T]here’s a mandatory
minimum associated with the firearms violation and the while armed pieces of the
49
sentence, total of 60 months of mandatory minimum time.” 18 Appellant argues that
this clearly demonstrates the trial court’s intention to impose a mandatory minimum
sentence of 60 months, not 120 as reflected on the written judgment. The
government counters that the oral mandatory minimum pronouncement is
ambiguous, so the “rule giving primacy to the oral version of the sentence” does not
apply. See Gray v. United States, 585 A.2d 164, 166 (D.C. 1991) (oral sentence is
only given primacy when it is “clear and unambiguous”). Further, the government
notes that there is also a 60-month mandatory minimum for committing a crime of
violence, or a dangerous crime, while armed. 19 Therefore, the government argues,
because the judge imposed the sentences for second-degree murder while
armed/PCFV and AWIKA/PCFV consecutively, the written judgment accurately
reflects the total mandatory minimum of 120 months.
We agree that the trial court’s oral sentence was ambiguous. While the trial
judge stated the mandatory minimum was a “total” of 60 months, he also stated that
there was a mandatory minimum for the “firearms violation and the while armed
pieces.” Therefore, it is possible that he was acknowledging the 60-month
18
The mandatory minimum sentence for PFCV is five years or 60 months.
See D.C. Code § 22-4504(b).
19
See D.C. Code § 22-4502(a)(1).
50
mandatory minimum that attached to each the “firearms violation and the while
armed pieces of the sentence.” Based on this interpretation, it follows that the
mandatory minimum sentence is 120 months: 60 months for PFCV (“firearms
violation”) that runs concurrent with second-degree murder while armed, and an
additional 60 months for AWIKA (a “while armed” piece). 20
However, because we vacate appellant’s AWIKA conviction and one of the
second-degree murder convictions, and merge two of the PFCV convictions,
appellant is left with one second-degree murder conviction and one PFCV
conviction. While these convictions both have a mandatory-minimum of 60 months,
the judge imposed concurrent sentences for them, and as a result, the judgment
should reflect a mandatory minimum sentence of 60 months. We therefore remand
to the trial court for resentencing in accordance with this opinion.
20
This also makes sense if the trial court imposed the first mandatory
minimum of 60 months for second-degree murder while armed (“while armed”
piece) and the second 60 months for PFCV associated with AWIKA (“firearms
violation”).
51
III. Conclusion
Accordingly, we vacate appellant’s AWIKA conviction because we hold that
the doctrine of transferred intent is inapplicable to sustain a conviction of AWIKA
when there is no physical injury to an unintended victim. Applying transferred intent
in the instant case would be a significant departure from the origins of the doctrine,
which developed to ensure a defendant would not escape liability for the most
extreme form of harm. Additionally, we affirm one of appellant’s second-degree
murder convictions and one of his PFCV convictions, but we vacate his other
second-degree murder conviction and PFCV convictions, and remand for the trial
court to correct the sentencing issue.
So ordered.
MCLEESE, Associate Judge, concurring in part and dissenting in part: I join
the opinion of the court except to the extent that the court holds that the evidence
was insufficient to support Mr. Gordon’s conviction for assaulting Ms. Morris with
intent to kill John Doe while armed. On that issue, I respectfully dissent.
52
I. Factual Background
Viewed in the light most favorable to the jury’s verdict, the pertinent evidence
at trial was as follows. Mr. Gordon fired six shots in the direction of two people:
Gabriel Turner and an unknown person referred to at trial as John Doe. One of the
bullets hit and killed Mr. Turner. It appears that none of the bullets hit John Doe.
Two of the bullets entered Ms. Morris’s apartment, which was approximately 100-
150 yards away from the location of the shooting. One bullet shattered Ms. Morris’s
living-room window and the other shattered Ms. Morris’s bedroom window.
“[G]lass was everywhere,” and one of the bullets would have hit Ms. Morris if she
had not just lain down. The incident terrified Ms. Morris.
II. Analysis
A. Statutory Interpretation of D.C. Code § 22-401
D.C. Code § 22-401 prohibits “assault with intent to kill” (AWIK). Mr.
Gordon has not disputed in this court that the evidence was sufficient to establish
that he assaulted Ms. Morris and that he intended to kill John Doe. The question is
53
whether § 22-401 requires that the victim of the assault be the person whom the
defendant intended to kill. I conclude that this court has already answered that
question in the negative and that we are bound by that prior holding.
Section 22-401 prohibits not only AWIK but also assault with intent to
commit various other offenses, including robbery. D.C. Code § 22-401. In Moore
v. United States, 508 A.2d 924 (D.C. 1986) (per curiam), this court considered
whether § 22-401 (then codified at D.C. Code § 22-501) “requires that the person
assaulted must be the same person the assailant intended to rob.” 508 A.2d at 925.
We treated that issue as one of statutory interpretation, and we made no mention of
the doctrine of transferred intent. Id. at 925-26. We indicated that “the statute in
question does not specify that the intent to rob be directed at the person assaulted.”
Id. at 926 (internal quotation marks omitted). Relying on “common sense” and
choosing to “[g]iv[e] the language of our statute its full meaning,” we concluded that
“it would be nonsensical to limit [the statute’s] scope to situations involving a single
victim.” Id. In explaining that conclusion, we emphasized the statute’s “major . . .
purpose, to punish an assailant whose criminal conduct potentially exposes the
assault victim to a greater risk of harm because the assault is accompanied by an
intent to commit another offense.” Id.
54
I understand Moore to adopt a simple, uniform rule: as a matter of statutory
interpretation, § 22-401 does not require that the victim of the assault also be the
person whom the defendant intends to rob or kill or poison, etc. Thus, there is no
need for the “common law doctrine of transferred intent.” Brooks v. United States,
655 A.2d 844, 846 (D.C. 1995). That is why Moore did not mention transferred
intent.
The court commented in Moore that it would be “particularly” nonsensical to
limit the statute’s scope in cases “where the assault on one victim is used to
effectuate the robbery of another at the scene.” 508 A.2d at 926. I do not view that
comment as a qualification of the court’s unequivocal rejection of a single-victim
requirement under § 22-401 as “nonsensical.” Id. That rejection is not undermined
or limited, in my view, by the court’s passing comment that such a requirement
would be particularly nonsensical in certain circumstances.
The court in this case, however, appears to limit Moore’s application to the
circumstances that the Moore court viewed as particularly nonsensical. Supra at 18.
I disagree with that reading of Moore for two reasons. First, limiting Moore in that
way seems contrary to Moore’s unequivocal statement of its holding. Second, that
reading of Moore seems contrary to Moore’s stated rationale: fulfilling § 22-401’s
55
“major . . . purpose, to punish an assailant whose criminal conduct potentially
exposes the assault victim to a greater risk of harm because the assault is
accompanied by an intent to commit another offense.” 508 A.2d at 926. Limiting
the provision to cases in which an assault is “used to effectuate” another crime would
not fulfill that purpose, as the present case illustrates. The assault on Ms. Morris
was not “used to effectuate” the assault with intent to kill John Doe. Nevertheless,
Ms. Morris was actually (not just “potentially”) exposed to a greater risk of harm
because Mr. Gordon’s attack on John Doe was accompanied by an intent to kill.
That intent doubtless was what led Mr. Gordon to shoot a deadly weapon and nearly
hit Ms. Morris.
In sum, I conclude that Moore precludes the court’s holding that § 22-401 is
inapplicable to cases in which a defendant assaults (but does not physically injure)
a victim through acts intended to kill a different victim. I therefore would hold that
the evidence was sufficient to support Mr. Gordon’s conviction for assaulting Ms.
Morris with the intent to kill John Doe.
56
B. Transferred Intent
Although I would affirm without relying on the doctrine of transferred intent,
I note that I disagree in a number of respects with the court’s discussion of that
doctrine.
1. Binding Precedent
The court concludes that no binding precedent answers the question whether
transferred intent applies to support an AWIK conviction where the victim was not
an intended target and was not physically injured. Supra at 12-18. To the contrary,
however, we have already upheld an AWIK conviction in precisely those
circumstances.
In Dockery v. United States, 853 A.2d 687 (D.C. 2004), the defendant
“question[ed] whether an individual who is not a target of the shooting and is not
actually shot is the victim of an assault with intent to kill while armed.” Id. at 699
n.11 (brackets and internal quotation marks omitted). We noted that the defendant
had not raised that argument in the trial court, but — contrary to the suggestion of
57
the court in this case, supra at 16 n.5 — we did not rely on that fact to resolve the
defendant’s claim. Id. Rather, we upheld the AWIK conviction on the merits,
stating that “this court has answered that question affirmatively.” Id. In my view,
Dockery squarely holds that transferred intent can apply to support an AWIK
conviction where the victim was unintended and was not physically injured.
The court states that Dockery is not binding precedent because Dockery did
not independently analyze the issue, instead erroneously concluding that the issue
had already been decided by this court. Supra at 16 n.5. The court’s description of
the opinion in Dockery appears to be accurate, but it also seems to me to be
irrelevant. We are bound by Dockery even if Dockery rested on an incorrect premise
and even if Dockery’s analysis was incomplete. See, e.g., Galberth v. United States,
590 A.2d 990, 991 n.1 (D.C. 1991) (“Even if . . . [a prior decision] relied on a
mistaken analysis, we are bound by the prior decision in the absence of a change in
governing law.”); M.A.P. v. Ryan, 285 A.2d 310, 312 (D.C. 1971) (“[N]o division
of this court will overrule a prior decision of this court . . . .”) (footnote omitted);
Mullin v. Brown, 115 P.3d 139, 143 (Ariz. Ct. App. 2005) (“This court may not
disregard a clear holding . . . on the purported ground that the analysis supporting it
is incomplete.”) (internal quotation marks omitted). The court in this case also states
that Dockery is not a holding because “the judicial mind was not focused on the issue
58
we now confront.” Supra at 16 n.5 (internal quotation marks omitted). I disagree.
The judicial mind was focused on the precise issue we confront and expressly
decided that issue. The problem is that the judicial mind appears to have committed
a legal error in deciding the issue. In my view, that is not a basis upon which this
court can depart from the holding of Dockery.
2. Necessity
At several points, the court suggests that transferred intent is a doctrine of
necessity, applicable only if the doctrine is needed to ensure that a defendant is
“punished for a crime of the same seriousness as the one [the defendant] undertook
to commit.” Supra at 22 (internal quotation marks omitted); see also id. at 19, 22-
23. I do not doubt that the doctrine has its historical roots in that concern. This
court, however, has not limited the doctrine to that concern. For example, in Lloyd
v. United States, 806 A.2d 1243 (D.C. 2002), the defendants were each convicted of
two counts of murder, one for their intended victim and the other, on a theory of
transferred intent, for an unintended victim. Id. at 1244-46. The defendants argued
that the doctrine of transferred intent was “unnecessary,” because the intended crime
of murder had actually been committed against the intended target. Id. at 1246.
After an extensive discussion, this court disagreed. Id. at 1247-51. In explaining its
59
conclusion, the court quoted the following passage with approval: “Human beings
are not fungible. Therefore, a separate injury to each constitutes a separate crime,
and the law does not give the defendant a discount on the second and subsequent
victims of [the defendant’s] intentional conduct.” Id. at 1249-50 (internal quotation
marks omitted). Lloyd also explained that our earlier decision in Moore was an
“obstacle” to the defendants’ argument, “because in that case the specific intent to
commit a crime was realized against the intended victim, and yet we held that it
could also provide the mental element for an assault against the unintended victim.”
Id. at 1248.
In my view, the court errs by limiting the doctrine of transferred intent based
on a concept of necessity that is contrary to this court’s law of transferred intent.
3. Maryland Case Law
The court’s opinion relies heavily on Maryland case law. Supra at 18-22. I
see no need to consider Maryland law, given the binding authority in this court on
the precise issue before us. Even leaving that point aside, however, reliance on
Maryland law seems unwarranted, because Maryland’s law of transferred intent is
fundamentally inconsistent with ours. For example, Harvey v. State, (Md. Ct. Spec.
60
App. 1996), on which the court in this case primarily relies, focuses on the concept
of necessity and holds that the doctrine of transferred intent is limited to homicide
cases. Id. at 634-44. As I have just noted, however, this court does not limit the
doctrine of transferred intent to situations of “necessity.” Supra at 58. Moreover,
this court has repeatedly applied the doctrine of transferred intent to non-homicide
offenses. In addition to Dockery, discussed above, see, e.g., Hagans v. United States,
96 A.3d 1, 43 (D.C. 2014) (“[T]he doctrine of transferred intent . . . allowed
appellants to be held liable for the . . . wounding of Flores-Bonilla even though the
appellants intended to kill Madhis.”); In re E.D.P., 573 A.2d 1307, 1308 (D.C. 1990)
(“Under the doctrine of transferred intent, the trial judge could find that where a
person attempts to injure one person (W.F.), but injures another by mistake (the three
juvenile supervisors), the intent of the defendant will be transferred from the
intended victim (W.F.) to the actual, unintended victim (the three juvenile
supervisors).”). In my view, the court in this case errs by basing its holding on the
reasoning of a Maryland decision that is incompatible with our law.
There is a second problem with the court’s reliance on Harvey. Harvey’s
analysis rests on the theory that a victim who is assaulted but not physically injured
is “not harmed.” 681 A.2d at 639 (internal quotation marks omitted). As the court
in this case acknowledges (supra at 25), however, assault harms a person even if the
61
person is not physically injured. “[S]imple assault . . . is designed to protect not only
against physical injury, but against all forms of offensive touching, and even the
mere threat of such touching.” Comber v. United States, 584 A.2d 26, 50 (D.C.
1990) (en banc) (emphasis and internal citations omitted); William L. Prosser, Law
of Torts § 10 at 37-38 (4th ed. 1971) (“The interest in freedom from apprehension
of a harmful or offensive contact with the person, as distinguished from the contact
itself, is protected by an action for the tort known as assault. . . . [T]he plaintiff is
protected against a purely mental disturbance of [the person’s] integrity. This action
. . . is the first recognition of a mental, as distinct from a physical, injury. There is a
touching of the mind, if not of the body. The explanation of its early appearance lies
in the obvious likelihood that assaults will result in breaches of the peace . . . .”)
(footnote and internal quotation marks omitted). That is why assault is a tort and, in
this jurisdiction and many others, a crime, even if the victim has not been physically
injured.
Thus, the relevant issue is not whether the unintended assault victim is
physically injured. Rather, the relevant issue, as this court’s cases have framed it, is
whether the defendant’s “criminal conduct potentially exposes the assault victim to
a greater risk of harm because the assault is accompanied by an intent to commit
another offense.” Lloyd, 806 A.2d at 1248 (internal quotation marks omitted). The
62
shots Mr. Gordon fired indisputably exposed Ms. Morris to a great risk of harm, and
they indisputably harmed Ms. Morris, even though Ms. Morris luckily was not
physically injured or killed.
There is a third, related problem with the court’s reliance on Harvey. The
court endorses Harvey’s view that it would be “absurd” for a defendant to be
criminally liable with respect to unintended victims who are in harm’s way but are
not physically injured. Supra at 20 (quoting Harvey, 681 A.2d at 639). That
endorsement contradicts the court’s statement that the court “take[s] for granted”
that Mr. Gordon assaulted Ms. Morris, supra at 11 n.3, because Ms. Morris was an
unintended victim who was not physically injured. The court cannot both take for
granted that Mr. Gordon is guilty of assaulting Ms. Morris and endorse the view it
would be absurd to conclude that Mr. Gordon assaulted Ms. Morris.
4. Policy concerns
Finally, the court relies on two perceived policy concerns. Supra at 22-24.
Given our binding precedent, I do not view those policy concerns as relevant to the
disposition of this case. I do, however, disagree with the court’s policy discussion
in several respects.
63
a. Administrability
The court raises a question of administrability: how should courts go about
determining when intent to kill is properly transferred to unintended victims who are
not physically injured? Supra at 22. In my view, that is not a difficult question. As
I have already explained, the AWIK statute always permits the intent to kill to be
directed at someone other than the assault victim. Supra at 53-54. Thus, there is no
need to transfer intent.
Even if the issue is instead analyzed under the doctrine of transferred intent,
intent to kill is properly transferred, in my view, whether or not the victim was
physically injured or an unintended victim. Supra at 55. I leave open the question
whether transferred intent would be permissible if the danger to victim was entirely
unforeseeable. See Lloyd, 806 A.2d at 1249 n.5 (leaving that issue open). Shooting
a firearm repeatedly in a residential area obviously poses a foreseeable risk of injury
to nearby residents, and Mr. Gordon has not suggested otherwise.
In my view, the harder question is determining when an unintended victim
who was not injured is properly understood to have been the victim of an assault.
64
That harder question, however, will need to be decided whether or not intent to kill
can be transferred for purposes of AWIK.
b. Overly Expansive Criminal Liability
The court also expresses concern that applying the AWIK statute to
unintended victims who are not physically harmed would result in overly expansive
criminal liability. Supra at 23-25. If this were an open question, I would agree that
the court raises a valid concern. I do think, however, that the concern is somewhat
overstated.
First, the court acknowledges that the doctrine of concurrent intent can permit
AWIK liability in cases involving unintended victims who are not physically injured.
Supra at 24 n.10. The court accurately notes that this doctrine has been limited to
cases in which risk to the victim was foreseeable. Id. As previously noted, however,
the same may well be true of the doctrine of transferred intent. Lloyd, 806 A.2d at
1249 n.5 (leaving that issue open). The court suggests that a requirement of
foreseeability would not be “a meaningful limitation,” supra at 23, but the court does
not explain why that requirement is more meaningful in the context of concurrent
intent than in the context of transferred intent. The court’s opinion thus leaves
65
entirely unclear to what extent, if any, applying the doctrine of transferred intent to
unintended victims who are not physically injured would lead to broader liability
than is concededly available under the doctrine of concurrent intent.
Second, the court says that it is taking for granted that Mr. Gordon assaulted
Ms. Morris, supra at 12 n.3. That assault was with a dangerous weapon, so the court
is assuming that Mr. Gordon in any event committed a felony against Ms. Morris
that is punishable by up to ten years of imprisonment. D.C. Code § 22-402.
Third, as the court essentially acknowledges, supra at 23 n.8, the doctrine of
merger would in some circumstances operate to preclude multiple AWIK
convictions in cases involving unintended and victims who are not physically
injured. Compare, e.g., Ruffin v. United States, 642 A.2d 1288, 1296 n.14 (D.C.
1994) (“[S]ingle assaultive acts directed at a group of individuals ([physically]
injuring none of them) have been found to give rise to only one count of assault.”),
with, e.g., Graure v. United States, 18 A.3d 743, 761-66 (D.C. 2011) (permitting
multiple convictions for assault with dangerous weapon where defendant set fire that
placed multiple victims in path of physical injury).
66
Fourth, if the trial court concludes that a separate term of incarceration is
unwarranted in a case involving an unintended victim who is not physically injured,
the trial court will typically have the option of imposing a sentence for that offense
that runs concurrently with other sentences. The trial court in this case imposed a
concurrent sentence on Mr. Gordon’s conviction for assaulting Ms. Morris with the
intent to kill John Doe.
In any event, binding authority establishes that the AWIK statute applies to
cases in which a defendant intends to kill one person and assaults another without
physically injuring that other person. This court has explained the rationale for the
legislature’s decision to treat such conduct as a serious offense: “to punish an
assailant whose criminal conduct potentially exposes the assault victim to a greater
risk of harm because the assault is accompanied by an intent to commit another
offense.” Moore, 508 A.2d at 926. I believe that we are required to abide by that
legislative determination.
For the foregoing reasons, I respectfully dissent from the court’s holding that
the evidence was insufficient to support Mr. Gordon’s conviction for assaulting Ms.
Morris with intent to kill John Doe while armed. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484420/ | Notice: This opinion is subject to formal revision before publication in the
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volumes go to press.
DISTRICT OF COLUMBIA COURT OF APPEALS
No. 19-AA-985
UNITED HOUSE OF PRAYER FOR ALL PEOPLE, PETITIONER,
v.
DISTRICT OF COLUMBIA DEPARTMENT OF TRANSPORTATION, RESPONDENT.
Appeal from the Office of
Administrative Hearings
(DDOT-U100262-19)
(Hon. Robert E. Sharkey, Administrative Law Judge)
(Submitted October 6, 2020 Decided November 17, 2022)
Mickie Bailey was on the brief for petitioner.
Karl A. Racine, Attorney General for the District of Columbia, Loren L.
AliKhan, Solicitor General (at the time of submission), Caroline S. Van Zile,
Principal Deputy Solicitor General (at the time of submission), Graham E. Phillips,
Assistant Attorney General, were on the brief for respondent.
Before BLACKBURNE-RIGSBY, Chief Judge, GLICKMAN, Associate Judge, and
WASHINGTON, Senior Judge.
BLACKBURNE-RIGSBY, Chief Judge: Petitioner United House of Prayer for All
People (“UHP”) received a Notice of Infraction from the District of Columbia
Department of Transportation (“DDOT”) assessing a fine of $60,450 for the
2
unlawful topping 1 of three callery pear, Bradford cultivar trees located on UHP’s
property without a permit. UHP did not top the trees directly, but rather the trees
were topped by Romero Ventures, Inc., (“Romero”), an independent contractor with
whom UHP contracted for landscaping services, through a subcontractor. UHP
unsuccessfully challenged the Notice of Infraction before an Administrative Law
Judge (“ALJ”) with the Office of Administrative Hearings (“OAH”), who found
UHP vicariously liable for topping the trees, either by expressly or impliedly
authorizing Romero to top the trees or, alternatively, ratifying Romero’s actions after
the work was performed.
In this appeal, UHP disputes the factual finding of the OAH that there was an
agency relationship between UHP and Romero. Additionally, while UHP concedes
that there was pruning work performed by Romero without a permit, it disputes the
OAH’s conclusion that the pruning work at issue qualifies as “topping” in violation
of D.C. Code § 8–651.04 and 24 D.C.M.R. 3700.1. UHP also asserts the following
arguments: (1) OAH misinterpreted the statutory and regulatory provisions in light
of the definition of topping; (2) OAH’s failure to join Romero was erroneous; (3)
1
To “top” means, “as defined by the latest edition of the ANSI-A300 pruning
standards, the unacceptable act of tree pruning resulting in the indiscriminate
reduction of the tree’s crown leading to disfigurement or death of the tree.” D.C.
Code § 8-651.02(6).
3
assuming arguendo that Romero was an agent of UHP, UHP is not vicariously liable
for the actions taken by Romero’s sub-contractor in topping the trees because the
work performed was outside of the scope of the agency agreement; and (4) UHP’s
payment of Romero was not a ratification which created an agency relationship
between UHP and Romero.
We conclude that OAH erred in determining that there was substantial
evidence supporting a finding that there was a principal-agent relationship between
UHP and Romero, or that UHP otherwise ratified Romero’s actions. We further
conclude that the OAH erred as a matter of law in concluding that UHP was
vicariously liable for Romero’s actions. Accordingly, we reverse. Because of our
reversal on this question, we do not address the other issues raised by the parties,
including whether DDOT’s decision to proceed against UHP before the OAH was
proper, whether the ALJ’s denial of joinder was proper, and whether the trees were
topped within the meaning of the statute and corresponding regulations.
I. Factual and Procedural Background
UHP is the owner of the multi-unit apartment building located at 1117
McCollough Street, NW Washington, D.C. (“the property”). On the property there
4
are three callery pear, Bradford cultivar trees (“the trees”), which are deemed
“Special Trees” pursuant to D.C. Code Sec. 8-651.02(5) because they have a
“circumference between 44 inches and 100 inches.” See also 24 D.C.M.R. §
3799.1(c) (defining a Special Tree as “a tree within the District of Columbia that has
a minimum circumference of fifty-five inches (55 in.).”). The trees, which are the
focus of this appeal, are located between the sidewalk and the apartment building.
UHP does not perform any of the landscaping on the property; instead, it has always
engaged the services of independent contractors to landscape its D.C. properties.
UHP maintains that it “is not in the business of performing landscaping functions,
but rather is an organization of churches whose founding purpose is to perpetuate its
doctrine of Christianity.”
In order to provide for landscaping and maintenance services at the property
in question at 1117 McCollough Street, NW, UHP entered into the “Independent
Contractor Agreement” (the “Agreement”) with Romero on May 3, 2010. The
Agreement provides that “[t]he performance of work under this Agreement may be
governed by 1) a Statement of Work, if applicable; or 2) oral instructions from a
supervisor or other representative(s) designated by [UHP].” The Agreement further
provides that “[UHP] may from time to time make changes in the scope of services
set forth in a Statement of Work, if applicable, or in any oral instructions from a
5
supervisor or other representative(s) designated by [UHP].” Under the terms of the
Agreement,
[t]he parties to this Agreement recognize that this
Agreement does not create any apparent agency
relationship . . . between the parties. [Romero] shall have
the right to determine the method, details, and means of
performing the services. [UHP] shall, however, be entitled
to exercise general powers of supervision and control over
the results of the services performed by [Romero] to assure
satisfactory performance, including the right to inspect,
the right to make suggestions or recommendations as to
the details of the services, and the right to propose
modifications to the services.
Although the Agreement does not expressly address Romero’s ability to sub-contract
out work, the Agreement implicitly acknowledges that Romero may retain sub-
contractors by requiring that “[Romero] shall also carry workmen’s compensation
coverage in the amounts required by law on . . . any sub-contractor,” however,
“[Romero] shall not enter into agreements of any kind on behalf of [UHP] and shall
have no power or authority to bind or obligate [UHP] in any manner to any third
party.”
Thereafter, UHP and Romero entered into the “Annual Landscape
Maintenance Program,” (the “Program”) in August 2011, which all parties agree was
the governing Statement of Work at the time the pertinent Notice of Infraction was
issued. The Program provides that April through October, “[a]ll ornamental shrubs,
6
bushes, and evergreens will be pruned or sheared as needed in order to ensure a
professionally maintained appearance. This includes tree suckers, shoot growth, and
tree limbs impeding walkways and parking areas (up to 14’ high).”
On October 3, 2018, Matthew Lehtonen, an Urban Forester for the District of
Columbia Department of Transportation, observed the three callery pear, Bradford
cultivar trees in passing and did not notice any damage to the trees or hazardous
conditions posed to the public.
On November 15, 2018, a snowstorm resulted in the trees having several
broken and hanging limbs. Consequently, UHP, through its Administrative
Assistant, Robert Price, notified Romero, of the damage to the trees. Mr. Price asked
Romero to “look around” the property to survey any damage. Mr. Price testified:
I just reached out and let [Romero] know that . . . because
of the storm that we had, [they] might want to look around
because I see some things hanging that don’t look too
good. That was pretty much it. I don’t [] direct them or
anything. But if I see something that kind of looks a little,
I’m not an expert. But if I see a tree hanging and cars
hitting it that can’t be good.
Without consulting UHP, Romero sub-contracted Y.A. Landscaping Services
(“YALS”) to prune and trim the trees, which was completed on or about November
20, 2018. Mr. Price further testified that from his observation Romero “cut the top,
7
they topped the tree,” although he denied responsibility for having directed Romero
to do so. Although he attributed the work to Romero, Mr. Price clarified that he
subsequently learned that it was not Romero who topped the trees, but another
independent contractor hired by Romero (i.e., a sub-contractor). In the OAH’s
October 2, 2019 order, it found that “the [maintenance] contract did not cover or
include the pruning or trimming of trees.” Yet, the OAH noted that “Romero
apparently took this oblique instruction to mean that [Romero] had complete
discretion to do whatever [Romero] decided to do regarding the pruning of the trees.”
On November 20, 2018, Mr. Lehtonen observed that the trees on the property
had undergone “pruning that resulted in indiscriminate reduction of the trees’
crowns[] with intermodal cuts, [and the removal of] more than 75% of the foliage of
each tree.” Mr. Lehtonen admittedly did not observe the trees in the aftermath of
the snowstorm, but did testify before the OAH that based on his prior observation of
the trees approximately six weeks prior to the snowstorm, the trees were not
hazardous or damaged. Therefore, he concluded that by November 20, 2018, the
trees had been topped.
On December 20, 2018, DDOT served UHP with a Notice of Infraction for
the unlawful topping of three protected special trees without a permit, and imposed
8
a fine of $60,450, pursuant to the calculation of fines set forth under D.C. Code
§ 8-651.04(d). 2 DDOT served UHP as the property owner, rather than Romero or
its subcontractor YALS, as the entity that performed the work, based on its asserted
general practice of serving the notice of violation against the property owner. It is
undisputed UHP did not pursue a “Special Tree Removal Permit” prior to the
topping of the three trees, nor did UHP seek a permit within fifteen days after the
trees were topped on the basis that topping was necessary to avoid imminent harm
or danger to person or property because the trees were now “Hazardous Trees,” in
accordance with 24 D.C.M.R. § 3700.2. Had UHP successfully obtained a permit
under either provision of 24 D.C.M.R. § 3700, there would have been no basis for
DDOT to issue a Notice of Infraction and assess a fine thereto.
On January 3, 2019, after UHP received the Notice of Infraction from DDOT,
Romero billed UHP $1,890 for pruning “3 Pear trees along L street,” which UHP
subsequently paid. Shortly thereafter, UHP filed an answer to DDOT’s Notice of
Infraction with a plea of “deny” and requested a hearing with the OAH.
2
“A violation of subsection (a) of this section, or a failure to comply with the
conditions contained in a Special Tree removal permit, shall constitute a violation
subject to a fine of not less than $300 per each inch of the circumference of the
Special Tree in question.” D.C. Code § 8-651.04(d). DDOT “took the cumulative
circumference of the trees, multiplied that by 300 and . . . arrived at the $60,450.00
fine.”
9
UHP then filed a motion with the OAH seeking to join Romero as a third-party
respondent. UHP claimed indemnification, or contribution in the alternative, with
respect to Romero’s actions and the alleged violation. The OAH denied UHP’s
motion to join Romero, explaining that the jurisdiction of the OAH is limited to the
case brought by DDOT, and that the ALJ may not require DDOT to proceed against
a specific party (i.e., Romero).
At the hearing before the ALJ, Matthew Lehtonen, the urban forester
employed by DDOT who issued the Notice of Infraction, testified on behalf of
DDOT. UHP introduced the testimony of Robert Price, the property manager for
the property at 1117 McCollough Court who interacted with Romero, and expert
Keith Pitchford, a certified arborist in tree assessment and risk. UHP denied the
alleged violation, for which DDOT had the burden of proving: (1) the infraction
occurred and (2) UHP was responsible for it. The OAH found that the parties did
not dispute whether the trees were topped without a permit. However, the OAH
noted that UHP disputed its responsibility for the alleged violation because it
contended it could not be held liable for the permitless pruning completed by
Romero through YALS.
10
Citing internal OAH precedent, the OAH stated that “the [s]tatute does not
affix strict liability, [that is] liability without fault, on the person who owns the
property where the trees are located.” But, the OAH concluded, based on general
agency principles, that “[t]he owner of the property who directs or authorizes the
removal or topping of a Special Tree in violation of the Statute can also be held
primarily liable” including by “ratifying the illegal acts of its agents.” The OAH
held DDOT proved by a preponderance of the evidence that UHP violated the statute
(i.e., that the trees on UHP’s property were topped without a permit) by authorizing
Romero to top the special trees without a permit, and by ratifying the acts of its
agents. The OAH concluded that UHP impliedly authorized Romero to top the trees
by Mr. Price’s statement to “look around” the property on November 15, 2018, and
its extensive history of doing business with Romero under contract. The OAH
concluded that Mr. Price had the authority to engage with Romero on behalf of UHP
because that was within the scope of Mr. Price’s duties. Furthermore, the OAH
concluded that UHP ratified Romero’s act of hiring subcontractor YALS to top the
trees by paying Romero for the work. The OAH did not explain how it weighed Mr.
Price’s testimony that he did not “direct” Romero’s conduct in reaching its
conclusion. UHP timely petitioned for review.
11
II. Discussion
The OAH found UHP liable on a theory of vicarious liability, respondeat
superior, based on agency principles. 3 The OAH turned to agency principles, rather
than looking at the agreement between UHP and Romero because the OAH found
that their agreement “did not cover or include the pruning or trimming of trees.” As
such, the OAH specifically held that DDOT proved by a preponderance of the
evidence that UHP violated the statute — i.e., that the trees on UHP’s property were
topped without a permit — by impliedly authorizing Romero to top the special trees
and by ratifying the topping. It found that UHP impliedly authorized Romero to top
the trees by its statement to “look around” the property on November 15, 2018, and
its extensive history of doing business with Romero under the contract.
Furthermore, it found that UHP ratified Romero’s act of hiring subcontractor YALS
to top the trees by paying Romero for the work.
3
In this context, it makes no difference whether we speak of a principal-agent
relationship or a master-servant relationship. See, e.g., Convit v. Wilson, 980 A.2d
1104, 1114 n.14 (D.C. 2009) (“We have used different terms interchangeably to
describe the agency relationship that exists under the doctrine of respondeat superior,
‘including principal-agent, master-servant, and employer-employee.’ Judah v.
Reiner, 744 A.2d 1037, 1040 n.5 (D.C. 2000).”).
12
We affirm an OAH order when “(1) OAH made findings of fact on each
materially contested issue of fact; (2) substantial evidence supports each finding; (3)
OAH’s conclusions of law flow rationally from its findings of fact; and (4) OAH’s
legal conclusions are not arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with the law.” D.C. Dep’t of the Env’t v. E. Capitol Exxon, 64
A.3d 878, 880 (D.C. 2013) (citing Berkley v. D.C. Transit, Inc., 950 A.2d 749, 759
(D.C. 2008)) (cleaned up). “The existence of an agency relationship is a question of
fact.” Henderson v. Charles E. Smith Mgm’t, Inc., 567 A.2d 59, 62 (D.C. 1989).
“[T]o determine whether a principal-agent relationship has been created, the court
must analyze the relationship between the parties in its entirety and determine if two
factors exist. First, the court must look for evidence of the parties’ consent to
establish a principal-agent relationship. Second, the court must look for evidence
that the activities of the agent are subject to the principal’s control.” Id. (emphasis
in original). “[T]he parties’ actual relationship, in spite of contractual language, may
be the conclusive factor.” Giles v. Shell Oil Corp., 487 A.2d 610, 613 (D.C. 1985).
“We defer to the OAH’s findings of fact if they are supported by ‘substantial
evidence,’ [such that] a reasonable mind might accept [such relevant evidence] as
adequate to support a conclusion.” E. Capitol Exxon, 64 A.3d at 880. We assume,
without deciding, for purposes of this analysis, that the trees were topped within the
meaning of the relevant statute and regulations.
13
Before reaching the question of agency, we must determine whether the
OAH’s finding that the agreement between UHP and Romero excluded the pruning
or trimming of the trees was supported by substantial evidence. We conclude that it
was. The relevant provision of the Program governing pruning provides that from
April to October, “[a]ll ornamental shrubs, bushes, and evergreens will be pruned or
sheared as needed in order to ensure a professionally maintained appearance. This
includes tree suckers, shoot growth, and tree limbs impeding walkways and parking
areas (up to 14’ high).” Here, the work was performed in November, and thus it was
necessarily outside the scope of the Program. Likewise, although not directly
testified to during the hearing before the OAH, the images of the trees admitted into
the record reflect that the trees exceeded 14’ in height, further placing the work
outside the scope of the Program. Accordingly, the record reflects substantial
evidence to support the OAH’s finding that the work, and the resulting liability, was
outside the scope of the Program. Thus, we turn to considering whether agency
principles provide a basis for imputing liability onto UHP.
The OAH did not set forth its reasoning for concluding that there was a
principal-agent relationship between UHP and Romero. Indeed, the OAH merely
stated that “it is reasonable to conclude from the evidence that Romero was impliedly
14
authorized by Mr. Price, acting within the scope of his duties for [UHP], to do the
pruning work in any manner determined by Romero in its discretion.” DDOT
concedes as much, stating that “[t]he ALJ’s factual findings are clearly set forth in
the final order . . . and nowhere is there a finding that a master-servant agency
relationship existed between [UHP] and Romero.” 4
On review of the record before us, no substantial evidence exists to support a
finding that a principal-agent relationship existed between UHP and Romero. As a
part of this analysis, we must consider whether Romero was in fact an independent
contractor and not an agent of UHP. “An independent contractor is defined as ‘a
person who contracts with another to do something for him but who is not controlled
by the other nor subject to the other’s right to control with respect to his physical
conduct in the performance of the undertaking.’” Safeway Stores, Inc. v. Kelly, 448
A.2d 856, 860 n.8 (D.C. 1982) (quoting RESTATEMENT (SECOND) OF AGENCY § 2(3)
(1958)). A true independent contractor is not considered to be an agent of the hirer
during the performance of the work for which they were hired and, as such, “a
company is not liable for the acts of its independent contractors.” Whitt v. Am. Prop.
4
Consistent with this position, DDOT argues the operative act to impute
liability onto UHP is UHP’s subsequent ratification of the pruning, even absent a
prior principal-agent relationship.
15
Constr., P.C., 157 A.3d 196, 207-08 (D.C. 2017) (quoting Anthony v. Okie Dokie,
Inc., 976 A.2d 901, 906 (D.C. 2009) (footnote excluded). This is sometimes referred
to as the “independent contractor doctrine.” See, e.g., Shapiro v. Vautier, 36 A.2d
349, 350 (D.C. 1944). Here, the Agreement between the parties is styled as an
“Independent Contractor Agreement,” and thus a prima facie case has been
established that Romero was an independent contractor for whose actions UHP
cannot be held liable. However, there may still be a principal-agent relationship
between UHP and Romero if they consented to establish such a relationship or their
conduct establishes that such a relationship actually or impliedly exists. See
generally Henderson, 567 A.2d at 62.
Looking first “for evidence of the parties’ consent to establish a principal-
agent relationship,” Henderson, 567 A.2d at 62, we turn to the language of the
Agreement between UHP and Romero. Under the Agreement, the parties expressly
disavowed an intention to create a principal-agent relationship in stating that “[t]he
parties to this Agreement recognize that this Agreement does not create any apparent
agency relationship . . . between the parties.”
16
Nor are we persuaded that the actual relationship between UHP and Romero
evidences that “the activities of the agent are subject to the principal’s control.” Id.
at 62 (emphasis in original). The factors we are to consider in determining the actual
relationship between the parties are as follows:
(1) the selection and engagement of the servant, (2) the
payment of wages, (3) the power to discharge, (4) the
power to control the servant's conduct, (5) and whether the
work is part of the regular business of the employer.
Standing alone, none of these indicia, excepting (4), seem
controlling in the determination as to whether such
relationship exists. The decisive test . . . is whether the
employer has the right to control and direct the servant in
the performance of his work and the manner in which the
work is to be done.
Safeway Stores, Inc. v. Kelly, 448 A.2d 856, 860 (D.C. 1982) (emphasis in original)
(internal citations omitted). Safeway Stores further explains that, “[i]n
characterizing the right to control as the determinative factor, we mean the right to
control an employee in the performance of a task and in its result, and not the actual
exercise of control or supervision.” Id. Looking at the relationship between UHP
and Romero through this lens, a review of these factors counsels against finding an
agency relationship.
17
The selection and engagement of Romero by UHP weighs against finding an
agency relationship. The initial engagement as testified to by Mr. Price does not
resemble the manner in which an employer hires an employee. Instead, the parties’
agreement to enter into an independent contractor relationship bears out. UHP does
not have any selection in determining who Romero brings on as an employee or sub-
contractor, nor does UHP direct which of Romero’s employees or sub-contractors
performs work on the UHP properties, including the property at issue here. Cf.
Safeway Stores, 448 A.2d at 860.
The method that UHP paid Romero for its services also weighs against finding
an agency relationship. Romero was paid monthly, based on the terms of the
“Annual Landscape Maintenance Program,” with separate billing for spring cleaning
or optional services. This is unlike how an employee would expect to be paid. Cf.
Schecter v. Merchs. Home Delivery, Inc., 892 A.2d 415, 424 (D.C. 2006) (finding
that a jury could conclude that payment twice a month is common in an employee-
employer relationship).
UHP’s power to discharge Romero also weighs against finding an agency
relationship. Unlike an employer-employee relationship, the Agreement does not
18
provide for the terms of dismissal for cause or without cause. It also does not
contemplate common employer-employee disciplinary concepts antecedent to
termination such as probation or suspension. See id. Instead, the Agreement
provides UHP with the sole authority to terminate, so long as UHP provides no less
than ten days’ written notice and UHP pays for services rendered. The Program
provides comparable authority to terminate the Program on seven days’ notice prior
to the end of the month and payment of any invoice and balance.
Whether UHP had the power to control Romero’s conduct is a narrower
question, although we conclude it weighs against finding an agency relationship.
We start with the language of the Agreement between the parties. In relevant part,
the Agreement provides that “[Romero] shall have the right to determine the method,
details, and means of performing the services.” It also provides that “[UHP] shall,
however, be entitled to exercise general powers of supervision and control . . . to
assure satisfactory performance, including the right to inspect, the right to make
suggestions or recommendations as to the details of the services, and the right to
propose modifications to the services.” Although this language suggests that UHP
had some right to control or supervise Romero’s work, we have held that “the right
to inspect and the right to set standards by which [duties are performed] are not
indicia of control.” District of Columbia v. Hampton, 666 A.2d 30, 40 (D.C. 1995)
19
(quoting Giles v. Shell Oil Corp., 487 A.2d 610, 613 (D.C. 1985)) (internal citations
and quotations omitted). What is more relevant is the right to control the day-to-day
operation or performance. Id.; Giles, 487 A.2d at 613. Here, the contractual
language does not purport to provide UHP with that level of control; nevertheless,
we look to the actual relationship of the parties to see whether control existed in spite
of the contractual language. See Hampton, 666 A.2d at 40.
Looking through the language of the contract to the actual relationship
between the parties leads us to the same conclusion. During Mr. Price’s testimony
before the OAH, he testified, for example, that UHP “can recommend” that Romero
perform certain work, but that “it’s still up to them whether or not they want to do it
or not. [They are not obligated to comply with a request] because they are the
contractor that we hired and we trust their decision making.” He also testified that
he does not “direct” Romero in the performance of its work. This testimony, which
was undisputed, compels us to conclude that UHP did not exercise the level of day-
to-day control comparable to that of an employer-employee relationship.
Additionally, as Mr. Price testified, it is undisputed that UHP is not in the
business of performing landscaping functions as “an organization of churches whose
20
founding purpose is to perpetuate its doctrine of Christianity.” This factor also
weighs against finding an employer-employee relationship.
In considering the five Safeway Stores factors, we conclude that no actual
agency relationship existed between UHP and Romero. The OAH nevertheless
found that the communication between Mr. Price on behalf of UHP with Romero
was sufficient to create an implied agency relationship, given the Agreement
expressly contemplates that “[t]he performance of work under this Agreement may
be governed by . . . oral instructions from a supervisor or other representative(s)
designated by [UHP]” and “[UHP] may from time to time make changes in the scope
of services set forth . . . in any oral instructions form a supervisor or other
representative(s) designated by [UHP].” See FDS Rest., Inc. v. All Plumbing, Inc.,
241 A.3d 222, 237 (D.C. 2020) (“An agency relationship . . . may be created through
actual authority (either express or implied), apparent authority, or ratification.”)
(citing RESTATEMENT (THIRD) OF AGENCY §§ 2.01-4.08 (Am. Law Inst. 2006)). The
OAH based this conclusion on the testimony of Mr. Price that, as a corporate
administrative assistant for UHP, part of his responsibilities include communicating
with Romero on behalf of UHP, and UHP did not, and does not now, argue that Price
lacked the authority to communicate with Romero as he did given his history of
communicating with Romero as a part of his responsibilities. Mr. Price’s testimony
21
was clear that he did not intend to “direct” Romero’s response to the concerns he
raised with the trees. Given the lack of evidence that Romero felt it was compelled
to act consistent with Mr. Price’s request (i.e., that it was subject to UHP’s control),
there is no substantial evidence in the record supporting the ALJ’s finding that
Romero understood it was required to act within the scope of its agreement with
UHP and from which the ALJ could conclude that a principal-agent relationship
existed between UHP and Romero. Accordingly, we further conclude that Romero
was, in fact, an independent contractor.
DDOT argues, nevertheless, that the existence of an agency relationship
between UHP and Romero is “irrelevant” because it “ratified” or otherwise
separately contracted for the “topping” of the trees. The OAH found that UHP
subsequently ratified the tree topping when UHP paid Romero’s invoice without
objection in January of 2019, which was after the Notice of Infraction had issued.
See RESTATEMENT (THIRD) OF AGENCY: RATIFICATION DEFINED § 4.01(1-2)
(“Ratification is the affirmance of a prior act done by another, whereby the act is
given effect as if done by an agent acting with actual authority. A person ratifies an
act by (a) manifesting assent that the act shall affect the person’s legal relations, or
(b) conduct that justifies a reasonable assumption that the person so consents.”); see
also RESTATEMENT (THIRD) OF AGENCY: RATIFICATION DEFINED § 4.01 cmt. d (“To
22
constitute ratification, the consent need not be communicated to the third party or
the agent.”); see also Lewis v. Washington Metropolitan Area Transit Authority, 463
A.2d 666, 672 (D.C. 1983) (stating that a principal who has ratified an agent’s
actions is bound nunc pro tunc to the date of the agent’s actions).
UHP does not dispute that it paid Romero, but contends that ratification
requires the prior existence of a principal-agent relationship. Thus, UHP argues,
because there was no agency relationship, the payment did not operate as a
ratification. We need not definitively resolve the question of whether, in this
jurisdiction, a prior agency relationship is necessary for ratification 5 because, even
assuming it is not necessary, DDOT failed to demonstrate that there was a
ratification. While it is true that payment is often a form of ratification, the mere
fact of payment, without more, is insufficient to constitute manifestation of assent to
be bound by Romero’s prior acts. Indeed, the record fails to reflect evidence that
UHP intended for this payment to affect its legal relations with Romero or to be
bound by the act’s legal consequences. See RESTATEMENT (THIRD) OF AGENCY:
5
This appears to be a question of first impression in this jurisdiction, and not
one in which there is uniformity across all jurisdictions. See generally
RESTATEMENT (THIRD) OF AGENCY: RATIFICATION DEFINED § 4.01 cmt. b (“In most
jurisdictions, ratification may create a relationship of agency when none existed
between the actor and the ratifier at the time of the act.”).
23
RATIFICATION DEFINED § 4.01 cmt. d. Although UHP was aware of the Notice of
Infraction by that date, in transmitting payment to Romero, UHP did not, for
example, agree to abandon its argument that Romero was the actual party
responsible for the topping, as evidenced by the later-in-time Motion for Leave to
Join Romero Ventures LLC as a Third-Party Respondent. Nor can manifestation of
assent to be bound be inferred by UHP “accepting the benefit” of Romero’s actions,
which were completed and irreversible by the time UHP received the invoice from
Romero. Such conduct is explainable, for example, by UHP wanting to maintain its
working relationship with Romero as Romero continued to service its properties.
Id.; see also Dart Drug, Inc. v. Linthicum, 300 A.2d 442, 444 (D.C. 1973). As such,
we conclude that UHP did not ratify Romero’s actions. We also disagree with
DDOT that the conduct at issue here warrants applying an exception to the general
rule that one who engages an independent contractor is not liable for its actions. 6
6
See, e.g., Fry v. Diamond Constr., 659 A.2d 241 (D.C. 1995) (finding an
exception for one who directs an independent contractor to perform dangerous work
or work in a dangerous manner); Shapiro v. Vautier, 36 A.2d 349, 350 (D.C. 1944)
(finding an exception for conduct that “itself amounts to a nuisance or necessarily
operates to injure or destroy the property of [another]”); Taylor v. Tellez, 610 A.2d
252, 254-55 (D.C. 1992) (finding an exception for conduct that constitutes an
intentional tort).
24
Finally, for the reasons set forth supra explaining why Mr. Price’s statement
to Romero to “look around” was insufficient to create an implied agency
relationship, we find that his statements are also insufficient to have created an oral
contract between UHP and Romero concerning the work performed on the three
trees. Moreover, there is insufficient evidence in the record to establish there was a
meeting of the minds between UHP and Romero on this issue sufficient to establish
an oral contract. Accordingly, we also find that this is not a basis for holding UHP
vicariously liable.
III. Conclusion
In summary, we conclude that, even if the three callery pear trees located at
the property were topped by Romero, liability would not be imputed onto UHP
because: (1) there was no agency relationship between UHP and Romero, (2) UHP
did not ratify Romero’s actions in a manner sufficient to impute liability, and (3)
there is not substantial evidence in the record to conclude that UHP reached a
separate oral contract with Romero concerning the trees. Accordingly, we reverse
and vacate the fine totaling $60,450.
25
So ordered. | 01-04-2023 | 11-17-2022 |
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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 20-CV-745
TODD ROSE, APPELLANT,
v.
UNITED GENERAL CONTRACTORS, et al., APPELLEES.
Appeal from the Superior Court of the
District of Columbia
(CAB-8899-18)
(Hon. Hiram E. Puig-Lugo, Trial Judge)
(Argued May 26, 2022 Decided November 17, 2022)
Denise M. Clark, with whom Jeremy Greenberg was on the brief, for
appellant.
Reshad D. Favors for appellees.
Before BLACKBURNE-RIGSBY, Chief Judge, and EASTERLY and MCLEESE,
Associate Judges.
BLACKBURNE-RIGSBY, Chief Judge: Appellant Todd Rose appeals the trial
court’s judgment, after a bench trial, on the merits of his claims of retaliation and
discrimination under the D.C. Human Rights Act (“DCHRA”), D.C. Code § 2-
1401.01 et seq. In December 2018, appellant filed a complaint in D.C. Superior
Court alleging that his employer, United General Contractors (“UGC”), and the
2
business’s owner, Nathaniel Lewis (hereinafter “appellees”), violated the DCHRA
by terminating him due to his disability of Parkinson’s disease and/or in retaliation
for requesting accommodations. Appellant argues that the trial court erred by 1)
concluding that appellant could not establish a claim of discriminatory retaliation,
and 2) failing to conclude that appellees acted with a discriminatory motive in
terminating his employment. We reverse and remand: 1) for the trial court to
determine whether, as relates to the retaliation claim, the November 13, 14, or 15
emails constituted protected activity; and 2) for the trial court to determine, as relates
to the discrimination claim, whether appellant was terminated, in part, based on his
disability.
I. Factual Background
The following facts appear to be undisputed unless otherwise noted. In
February 2017, appellees hired appellant to be their first-ever Glazing Field
Superintendent. UGC had recently secured a high-profile contract to renovate the
Marie Reed elementary school in the Northwest quadrant of D.C., and the project
needed a superintendent to coordinate and oversee day-to-day glazing operations.
As Glazing Field Superintendent, appellant was responsible for all portions of the
project related to glass and glazing. Appellant was charged with communicating
3
between UGC and Gilbane (the general contractor on the jobsite), ordering
materials, maintaining oversight of field staff, conducting quality control, and
ensuring projects were executed within budget and on time.
At the time appellant was hired, appellees were aware that he had Parkinson’s
disease. In the first few months of his employment, appellant excelled in his
position, and Gilbane representatives complimented his work. However, in the
months that followed, his performance declined. Gilbane representatives sent
appellees several emails about incorrect and late installations. During the same
period, appellant began to experience more frequent medical issues, such as
increased falls, due to an issue with an implant that distributed his medication. On
at least one occasion, appellant was late to work because he needed to reset the
battery on his implant.
In July 2017, UGC union liaison Bob Arbour and UGC’s owner, Mr. Lewis,
had a discussion with appellant about changing positions to become a project
manager, which is an office job that does not require field site visits. Following the
discussion, Mr. Arbour emailed Mr. Lewis and UGC’s Vice President, Casey Gwei,
the following:
I just finished talking with Todd about Safety and being
on the project. He has agreed that his time in the field full
4
time has come to a close[.] We discussed being a project
manager and he is willing to make the transition[.] Pay
and benefits will need to be reviewed and agreed upon[.]
However, appellant later declined the position change. Gilbane
representatives continued to raise concerns about the Marie Reed project until they
eventually froze payments to UGC “until resolution of outstanding items [could] be
identified.”
On November 13, 2017, Mr. Arbour emailed appellant to inform him that he
needed to provide UGC’s insurance company with “a current medical clearance . . .
to confirm [his] fitness for duty” by November 17, 2017. On November 16,
appellant’s doctor wrote a note indicating that appellant “is not to do any physical
labor” and “may experience ‘on and off’ time several times a day.” On November
17, appellees gave appellant a letter stating that he had been laid off because UGC
decided to eliminate his position and delegate the functions to the lead foremen on
each project. Within the year, appellees hired a new Glazing Field Superintendent.
Appellant filed a complaint in D.C. Superior Court in December 2018,
alleging that appellees violated the DCHRA by retaliating against him and
terminating his employment because of his disability. Appellant moved for partial
summary judgment asserting that he had made out a prima facie case of disability
5
discrimination and retaliation. In response, appellees filed a cross-motion for
summary judgment asserting that appellant’s discrimination and retaliation claims
failed as a matter of law. Appellees’ cross-motion asserted that they had multiple,
legitimate reasons for terminating appellant, including violations of time and
attendance policies, poor job performance, and lack of work. The cross-motion also
asserted that appellant could not prove that his termination was in retaliation for
requesting accommodations because the temporal proximity between appellant’s
submission of his doctor’s note and his termination was “nothing more than
coincidence.” In opposition to appellees’ cross-motion, appellant noted that, despite
appellees’ assertion that he was terminated for performance and attendance issues,
his termination letter stated, “[T]his layoff is not a statement about your work for
United General Contractors. You have been a dedicated, contributing employee for
nearly one year.” Additionally, appellant noted that, while appellees asserted that
appellant’s position was eliminated due to lack of work, there was evidence that
appellees began to look for someone to fill appellant’s position shortly after
appellant’s termination.
The trial court granted appellant’s motion for summary judgment in part,
ruling as a matter of law that: 1) appellant has Parkinson’s disease; 2) appellant was
qualified for the Glazing Field Superintendent position; 3) appellant engaged in a
6
protected activity by submitting the doctor’s note requesting accommodations for
his disability; and 4) appellant’s termination was an adverse action. The trial court
noted that there was a genuine issue of material fact pertaining to the date on which
the doctor’s note was submitted, i.e., whether it was before or after appellees decided
to lay him off. The trial court denied appellees’ motion for summary judgment
because appellant “presented a prima facie case of discriminatory termination and
retaliation that a jury might credit” and “proffered significant probative evidence
tending to support his contention that [appellees’] stated decision to terminate him
was pretextual.”
At a bench trial, 1 appellees testified about various concerns that led to
appellant’s termination, some of which they had not previously asserted. For
example, Mr. Arbour testified that appellant was laid off for
a combined number of reasons. His ability to perform his
work was declining, not accepting a project manager
[position], not providing us information about his ability
to continue working, his health report, it was just a lot of
different things in the transition that we were trying to let
him go without saying that he was a bad employee.
Because in all actuality, when he first got hired, I thought
it would be an amazing fit at this time, and he wasn’t. And
1
A jury trial was scheduled to begin on March 16, 2020. According to
appellant’s brief, the trial was vacated due to the Covid-19 pandemic, and on May
29, 2020, the parties agreed to proceed with a bench trial.
7
that day he came in, I handed [him] this letter, and he
actually handed back the doctor’s report that morning. But
we made a decision the week prior that we were heading
[towards a decision to] lay him off.
Appellees also repeatedly described their concerns about appellant’s safety.
For example, Mr. Gwei testified that he had conversations with appellant after Mr.
Arbour notified him that “he had observed [appellant] fall downstairs in our office,
and had also observed him fall at another location within our office, and also had
heard complaints in the field about him having fallen on the site.” Mr. Gwei further
explained that he offered appellant a position as a project manager due in part to “the
issues that were thought about, the safety and [appellant] falling on the projects.”
Mr. Lewis likewise testified that he had witnessed appellant fall “many times” on
jobsites, and it was “[q]uite scary.” Mr. Lewis testified that appellees discussed
transitioning appellant to a project manager position because they “knew he had the
mindset but not the physical ability to be a superintendent as he once was before his
condition.”
After the bench trial, the trial court ordered judgment in favor of appellees.
On the retaliation claim, the trial court concluded that appellant failed to meet his
burden to prove a causal connection between appellant’s protected activity and his
termination. The trial court credited testimony that Mr. Arbour gave appellant a
8
termination letter the same day appellant submitted his doctor’s note, which the trial
court referred to as a “request for accommodations.” Thus, the court concluded that
appellant failed to produce evidence that he engaged in a protected activity before
he was laid off. Accordingly, the trial court held that appellant did not establish a
causal connection between the two events and could not prevail on his retaliation
claim.
On the disability discrimination claim, the trial court concluded that appellant
failed to carry his burden to prove that appellees’ legitimate, non-discriminatory
reasons for terminating appellant were pretext for discrimination. Specifically, the
trial court focused on the “overwhelming documentation of problems at the Marie
Reed project.” The trial court acknowledged that appellees had proffered various,
unsupported reasons for appellant’s termination, but concluded that fact alone did
not prove that they had a discriminatory motive. Additionally, the trial court found
it “hard to believe that [appellees] would offer to transition [appellant] from glazing
field superintendent to project manager if there was an underlying discriminatory
animus.” This appeal followed.
9
II. Discussion
Appellant raises two issues on appeal. First, he argues that the trial court
erroneously rejected his retaliation claim on the ground that he did not engage in
protected activity until after appellees decided to terminate him. Second, he argues
that the trial court erroneously rejected his discrimination claim on the ground that
he failed to meet his burden to prove that appellees’ proffered reasons for firing him
were pretext for discrimination. 2 We conclude that a remand is necessary for further
factual findings and for the trial court to more fully respond to appellant’s arguments.
When a case is tried without a jury, this court “may review both as to the facts
and the law, but the judgment may not be set aside except for errors of law unless it
appears that the judgment is plainly wrong or without evidence to support it.” D.C.
Code § 17-305(a). “That standard means that if the trial court’s determination is
plausible in light of the record viewed in its entirety, we will not disturb it whether
or not we might have viewed the evidence differently ourselves.” Hildreth
Consulting Engn’rs, P.C. v. Larry E. Knight, Inc., 801 A.2d 967, 971-72 (D.C. 2002)
2
Appellant’s reply brief argues that appellees’ opposition to his appeal should
be deemed abandoned because appellees’ brief failed to cite to the record. Because
we conclude that remand is warranted on the merits, we need not address this
procedural argument.
10
(quoting Nolan v. Nolan, 568 A.2d 479, 484 (D.C. 1990)). We review de novo the
trial court’s legal conclusions. Id. at 972.
A. Retaliation
“Under the DCHRA, it is an unlawful discriminatory practice ‘to . . . retaliate
against . . . any person . . . on account of having exercised . . . any right granted or
protected under [the Act].’” McFarland v. George Washington Univ., 935 A.2d 337,
355-56 (D.C. 2007) (quoting D.C. Code § 2-1402.61(a)). To establish a prima facie
claim of discriminatory retaliation, a plaintiff must show that “(1) he was engaged
in a protected activity . . . , (2) the employer took an adverse personnel action against
him, and (3) a causal connection existed between the two.” McFarland, 935 A.2d
at 356 (internal quotation marks, brackets, and citation omitted).
“This court has ‘often looked to cases construing Title VII [of the Civil Rights
Act of 1964, 42 U.S.C. 2000e et seq. (1988),] to aid us in construing the D.C. Human
Rights Act.’” Arthur Young & Co. v. Sutherland, 631 A.2d 354, 361 n.17 (D.C.
1993) (quoting Atl. Richfield Co. v. D.C. Comm’n on Hum. Rts., 515 A.2d 1095,
1103 n.6 (D.C. 1986)). However, “we have also observed that [the DCHRA] is
11
different from the federal statutes in other significant ways[.]” East v. Graphic Arts
Indus. Joint Pension Tr., 718 A.2d 153, 159 (D.C. 1998). Thus, while federal
precedent is certainly persuasive, it “does not necessarily dictate the same result
under DCHRA.” Id. at 160.
The trial court found that appellant met his burden to establish that he engaged
in a protected activity by submitting a request for accommodation, and that appellees
took an adverse employment action against him. However, the court found that there
was no causal connection between the two events because appellant failed to prove
that appellees were aware that appellant had requested accommodations before
deciding to terminate him.
Appellant argues that the trial court erred by “omit[ting] the evidence
presented that [he] engaged in protected activity three and two days before his
termination.” Appellant refers to a series of emails that led to his doctor’s note, and
argues that these emails were protected activities, inasmuch as they themselves were
12
informal requests for accommodation or engaged Mr. Arbour in the “interactive
process” of accommodation. 3
Appellant’s communications concerning his limitations were as follows. On
November 13, 2017, Mr. Arbour emailed appellant asking him to provide UGC’s
insurance company “with a current medical clearance . . . to confirm [his] fitness for
duty.” The following day, on November 14, appellant asked Mr. Arbour to “forward
the contact information of the insurance company[.]” He also followed up by asking
Mr. Arbour, “How should I tell my doctor to word this letter??” Mr. Arbour
responded that the letter should say, “To Whom it may Concern: For the standard
Restriction and limitation (if any): Standing, Sitting, Walking, Lifting, Driving and
any Medication Restriction.” On November 15, Mr. Arbour followed up to tell
3
Under the Americans with Disabilities Act, providing a ‘“reasonable
accommodation’ requires an employer ‘to initiate an informal, interactive process
with the individual with a disability in need of the accommodation’ to ‘identify the
precise limitations resulting from the disability and potential reasonable
accommodations that could overcome those limitations.’” Howard v. HMK
Holdings, LLC, 988 F.3d 1185, 1193 (9th Cir. 2021) (emphasis in original) (quoting
29 C.F.R. § 1630.2(o)(3)). While “an employer has an obligation to engage in an
interactive process to determine a reasonable accommodation, such an obligation is
only triggered where the employee has actually requested a reasonable
accommodation.” Badwal v. Bd. of Trustees of Univ. of D.C., 139 F. Supp. 3d 295,
313 (D.D.C. 2015) (analyzing DCHRA claim) (emphasis in original). We therefore
focus on whether appellant’s communications impliedly requested an
accommodation.
13
appellant that Mr. Arbour was “required to reach out to the doctor to confirm any
and all restrictions.” Appellant replied, “So, What are you trying to say?” to which
Mr. Arbour responded, “We have to verify, that’s all[.]” On November 16,
appellant’s doctor wrote a note indicating 1) appellant “is not to do any physical
labor,” 2) due to his condition of Parkinson’s disease, he “may experience ‘on and
off’ time several times a day,” and 3) appellant “must take his medication at certain
times each day and be allowed to sit down to allow his medication to reactivate his
movements.”
We agree with appellant that the trial court should have specifically addressed
whether or not the November 13, 14, and 15 communications between appellant and
Mr. Arbour amounted to protected activity. We therefore remand the case to the
trial court to consider this issue. At trial, appellant argued that he “engaged in
protected activity days before he handed [in] his doctor’s note by asking what
information UGC specifically needed from his provider.” We understand appellant
to argue that, by engaging in a conversation about a forthcoming doctor’s note that
would describe his limitations, appellant impliedly requested accommodations
before he actually submitted his doctor’s note. However, the trial court’s order does
not appear to have considered this argument, and instead focuses only on the timing
between appellant’s submission of the doctor’s note to Mr. Arbour and his
14
termination. Appellees’ brief suggests that “the trial court found that [appellant’s]
only protected activity was the actual submission of his certification.” But at oral
argument, appellees could not point to anywhere in the trial court’s order where it
directly addressed whether or not the November 13, 14, and 15 communications
were protected activity, and we likewise do not see such a discussion in the order.
Appellees further argue that appellant’s communications with Mr. Arbour
could not have amounted to protected activities because appellant “made no explicit
or implied statement that would convey to any reasonable person that Mr. Rose was
making a request for accommodations.” We agree that appellant’s discussion with
Mr. Arbour does not include an explicit request for accommodations; but we view
the question of whether appellant implied that he would need accommodations at
least in part to be a factual issue that the trial court must address on remand. We
note that an employee need not formally ask for an accommodation. See Taylor v.
Phoenixville Sch. Dist., 184 F.3d 296, 313 (3d Cir. 1999). “What matters under the
ADA are not formalisms about the manner of the request, but whether the employee
. . . provides the employer with enough information that, under the circumstances,
the employer can be fairly said to know of both the disability and desire for an
accommodation.” Id.
15
Moreover, even if appellant’s submission of his doctor’s note was the only
protected activity, we do not view the trial court’s reasoning as sufficient to explain
why appellant nonetheless failed to establish a causal connection between the
submission of the note and his termination. The trial court explained that it:
credit[ed] testimony that Mr. Arbour gave [appellant] a
termination letter and [appellant] gave Mr. Arbour the
request for accommodations on the same day. Therefore,
the evidence does not show that [appellees] were aware of
[appellant’s] request for accommodation prior to making
its decision to terminate [appellant].
However, just because the two events happened on the same day does not eliminate
the possibility that the doctor’s note caused Mr. Arbour to terminate appellant’s
employment. Indeed, “[t]he causal connection . . . may be established by showing
that the employer had knowledge of the employee’s protected activity, and that the
adverse personnel action took place shortly after that activity.” Hollins v. Fed. Nat’l
Mortg. Ass’n, 760 A.2d 563, 579 (D.C. 2000). On remand, the trial court should
further explain why it reached the conclusion that there was no causal connection
between the two events.
16
B. Discriminatory Intent
Appellant next argues that the trial court erred by failing to conclude that
appellees terminated his employment because of his disability. While we
acknowledge that there is ample evidence in the record that appellant’s work
performance declined prior to his termination, we remand the case to the trial court
to consider whether appellant was laid off, in part, due to his disability.
The DCHRA prohibits an employer from terminating an employee “wholly
or partially” based on disability. D.C. Code § 2-1402.11(a)(1). “In considering
claims of discrimination under the DCHRA, we employ the same three-part, burden-
shifting test articulated by the Supreme Court for Title VII cases in McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 802 (1973).” McFarland, 935 A.2d at 346
(internal quotations and citations omitted). The employee must
establish a prima facie case that [the employer
discriminated against him]. If such a showing is made, the
burden shifts to the employer to articulate a legitimate
basis for [its action]. If the employer articulates a
legitimate, nondiscriminatory basis for the [action], the
burden shifts back to the employee to demonstrate that the
employer’s action was pretextual.
Id. (internal quotation marks, brackets, and citations omitted).
17
Here, the trial court concluded that appellant failed to prove that his
employment was terminated for a discriminatory reason. Despite appellees’
“shifting” reasons for terminating appellant, the trial court noted that there was
“overwhelming documentation” of appellant’s declining performance at the Marie
Reed project. Additionally, the trial court found it “hard to believe” appellees acted
with discriminatory animus in terminating appellant because they had previously
sought to retain him by moving him to an in-office position.
We agree with the trial court that there is ample evidence in the record
demonstrating that appellant’s performance at the Marie Reed project declined, and
that poor work performance is a legitimate, non-discriminatory reason to terminate
an employee. Additionally, though we consider appellees’ “shifting” reasons for
terminating appellant’s employment strong evidence of pretext, we also
acknowledge that the burden on appellant is to “show both that the reason was false,
18
and that discrimination was the real reason.” McFarland, 935 A.2d at 355 (emphasis
in original) (internal quotations and citations omitted). 4
However, there is a need for the trial court to address whether appellant’s
employment might have been terminated in part due to his disability. At trial,
appellant framed the issue for the trial court as “whether [appellees’] reason[] for
terminating [appellant] was made wholly or partially because of his disability and/or
protected activities.” Appellant also moved for a directed verdict, noting that Mr.
Lewis and Mr. Arbour both testified about their
continual concerns regarding [appellant’s] disability and
the limitations imposed by his disability and that they were
considered in the decision to terminate him. And because
of that, [appellant] would be entitled to judgment on that
based on these admissions that UGC . . . terminated
[appellant] at least partially because of his disability,
which is all that plaintiff must show to succeed on that
claim.
4
We note that appellees have never articulated a clear or consistent reason for
terminating appellant’s employment. The original termination letter sent to
appellant stated “this layoff is not a statement about your work for United General
Contractors. You have been a dedicated, contributing employee for nearly one
year.” As the trial court found, and appellees’ brief acknowledges, “[a]t various
points during litigation, [appellees] have offered excessive absences, financial
considerations, safety considerations, and legitimate business reasons as additional
justifications.” Nonetheless, the trial court found evidentiary support only for
appellant’s poor performance, and appellant continues to dispute appellees’ other
proffered reasons.
19
The trial court denied appellant’s motion for a directed verdict, explaining that
“the testimony here is that they were concerned about his safety. That does not mean
that it was his disability that fueled their decision.” The record does not indicate
whether the trial court considered some of the other testimony in the trial record, nor
whether the trial court considered whether a discriminatory motive could be one of
several motives for the termination.
Important here, the statute provides that it is unlawful to terminate an
employee even partially for a discriminatory reason. D.C. Code § 2-1402.11(a)(1).
The “employee may prevail by proving that the employer’s action was motivated
‘partially’ by a discriminatory reason, even if it also was motivated by permissible
reasons not, in themselves, pretextual.” Furline v. Morrison, 953 A.2d 344, 353
(D.C. 2008). In this case, a “‘mixed motive’ analysis is appropriate.” Id. Under
either the McDonnell Douglas standard or a “mixed motives” analysis, “the burden
of persuasion ‘remains at all times’ with the plaintiff employee to prove that the
employer took adverse action for a discriminatory or retaliatory reason (in whole or
part).” Id.
20
We have not had occasion to squarely address the level of causation necessary
for a “mixed motives” claim. 5 In Babb v. Wilkie, 206 L. Ed. 2d 432, 140 S. Ct. 1168,
1172 (2020), the Supreme Court explained that it need not go any further than the
Age Discrimination in Employment Act’s text in determining when to impose
liability because the ADEA mandates that personnel actions “shall be made free
from any discrimination based on age.” 29 U.S.C. § 633a(a). Because “free from”
means “untainted” and because the statute prohibits “any discrimination based on
age,” the Supreme Court concluded that “the statute does not require proof that an
employment decision would have turned out differently if age had not been taken
into account.” Babb, 140 S. Ct. at 1173-74. Thus, a plaintiff could show a violation
of Section 633a(a) “without proving that age was a but-for cause” of the action. Id.
at 1177.
Similarly, in the Title VII context, a plaintiff need “only present sufficient
evidence for a reasonable jury to conclude, by a preponderance of the evidence, that
‘race, color, religion, sex, or national origin was a motivating factor for any
employment practice.’” Desert Palace, Inc. v. Costa, 539 U.S. 90, 101 (2003)
(quoting 42 U.S.C. § 2000e-2(m)). “It suffices instead to show that the motive to
5
In Furline, 953 A.2d at n.28, we presumed, but did not decide, that an
employer would be entitled to an affirmative defense if it could show that it would
have taken the action for permissible reasons alone.
21
discriminate was one of the employer’s motives, even if the employer also had other,
lawful motives that were causative in the employer’s decision.” Univ. of Tex. Sw.
Med. Ctr. v. Nassar, 570 U.S. 338, 343 (2013). 6
Both the Washington Supreme Court and the California Supreme Court came
to similar conclusions in interpreting their own antidiscrimination statutes, which
both prohibit adverse employment action “because of” protected characteristics. See
Mackay v. Acorn Custom Cabinetry, Inc., 898 P.2d 284, 288 (Wash. 1995) (en banc);
Harris v. City of Santa Monica, 294 P.3d 49, 72 (Cal. 2013). Noting Washington’s
“resolve to eradicate discrimination,” the court reasoned that adopting a standard
akin to “but for” causation would “erect [a] high barrier to recovery” and that
“Washington’s disdain for discrimination would be reduced to mere rhetoric[.]”
Mackay, 898 P.2d at 288. Thus, a plaintiff must only show that a protected attribute
6
“But for” causation is still important in determining the appropriate remedy
in the federal context. Thus, in a Title VII case, a “defendant may still invoke lack
of but-for causation as an affirmative defense, but only to stave off damages and
reinstatement, not liability in general.” Comcast Corp. v. Nat’l Ass’n of Afr. Am.-
Owned Media, 206 L. Ed. 2d 356, 140 S. Ct. 1009, 1017 (2020) (citing 42 U.S.C. §§
2000e-2(m), 2000e-5(g)(2)(B)). Similarly, in an ADEA case, to obtain
reinstatement, backpay, or compensatory damages, a “plaintiff[] must show that age
discrimination was a but-for cause of the employment outcome.” Babb, 140 S. Ct.
at 1177-78. Otherwise, plaintiff can seek “injunctive or other forward-looking
relief” as the trial court deems necessary to redress the injury. Id. at 1178.
22
was a “substantial factor” in an adverse employment decision. Id. Similarly, the
California court undertook an exhaustive analysis of federal and state
antidiscrimination law and concluded that a plaintiff could prevail upon a showing
that “an adverse employment action was motivated at least in part by
discrimination.” Harris, 294 P.3d at 60. 7
The DCHRA prohibits taking a personnel action even partially for a
discriminatory reason, D.C. Code § 2-1402.11(a), a “standard comparable to that in
[42 U.S.C. § 2000e-2(m)].” Furline, 953 A.2d at 353 n.28. The statute was passed
“to secure an end in the District of Columbia to discrimination for any reason other
than that of individual merit[.]” D.C. Code § 2-1401.01. Based on the statutory text
and intent, the statute is violated if an employer took the action with one
discriminatory motive, even if the employer had other lawful motives. A plaintiff’s
burden, then, is to show that a protected characteristic was a substantial factor in the
employment decision. “A ‘substantial factor’ means that the protected characteristic
was a significant motivating factor bringing about the employer’s decision.”
7
In the California context, like the federal context, an employer is entitled to
an affirmative defense if it can show it would have made the same decision for lawful
reasons. See Harris, 294 P.3d at 72. In that case, a plaintiff is not entitled to
damages, backpay, or reinstatement but may still be entitled to declaratory or
injunctive relief or reasonable attorneys’ fees and costs. Id.
23
Scrivener v. Clark Coll., 334 P.3d 541, 545 (Wash. 2014) (en banc). “It does not
mean that the protected characteristic was the sole factor in the decision.” Id.; see
also 42 U.S.C. § 2000e-2(m) (allowing for liability when “the complaining party
demonstrates that race, color, religion, sex, or national original was a motivating
factor for any employment practice, even though other factors also motivated the
practice.”).
Here, when asked why appellant was terminated, Mr. Arbour testified that
appellant was laid off for “a combined number of reasons[,]” including “not
accepting a project manager” position, “not providing us information about his
ability to continue working,” and “his health report.” Mr. Arbour further testified
that “[we] had to lay him off because he’s – the big circle and everything else going
on, it was really hard to do, lack of performance, not showing up to work, falling all
the time. I just don’t want to see him hurt himself.” During closing argument,
appellant’s counsel also argued that appellees’
continual emphasis on supposed concerns regarding
[appellant’s] limitations imposed on . . . his ability to work
demonstrates . . . that animus is directly on their mind and
that [appellant’s] Parkinson’s disease was directly
impacting their decision-making process.
24
While safety concerns about a disabled employee, without more, might not
prove that he was subject to discrimination, the surrounding context here requires a
closer examination of that possibility. The trial court found that appellees’ offer of
the project manager position to appellant negated any discriminatory animus. We
can imagine a scenario where offering appellant a position change would be
consistent with discrimination. For example, appellees might have offered appellant
the project manager position to avoid providing him with reasonable
accommodations that would allow him to keep his position, as the law required them
to do. Appellees did not need to harbor complete animus toward appellant in order
to act with a partially discriminatory motive.
The trial court’s written order should have provided an analysis of the
employers’ testimony regarding their concerns about appellant’s safety in his
position as glazing field superintendent. We pay particular attention to appellees’
repeated description of their concerns about appellant’s safety on the construction
site when describing his work performance. 8 Appellees continued to refer to their
8
For example, when asked in general terms how appellant’s work product
was, Mr. Arbour answered:
Well, taking into [account] his . . . disability, we
understood where he stood – where he was at in his
25
safety concerns when explaining appellant’s declining work performance and their
decision to terminate his employment. The trial court’s analysis of whether
appellees’ safety concerns reflected a discriminatory motive in their ultimate
termination of appellant’s employment is necessary for our consideration of whether
appellees’ actions stemmed, at least in part, from appellant’s disability.
Additionally, a clearer explanation of why the trial court found that appellant
was not terminated even partially because of his disability is also necessary. While
the trial court ultimately concluded that appellant “[had] not established that
capabilities of what he could perform. And he met those
when we first hired him. . . . It just seemed over time there
was more and more – he had more and more complications
in his performance tasks, like showing up for work – not
showing up for work, I should say. He had gotten in a few
different car accidents. He broke bones. He was falling
down. It was just over a matter of time it progressively
got worse.
Likewise, when asked generally about hiring appellant, Mr. Lewis testified that
He told us about his situation. . . . We knew his mind was
sharp, but we had no idea that he had as many limitations
as he has until later on. . . . [W]hen we first interviewed
[appellant], his mobility didn’t seem like it would be a
problem at that time, but as time went on, he explained that
his device that was planted in his chest needed to be
calibrated, and that’s why he was having so many
problems with falling and what-have-you.
26
discrimination was a substantial factor in his termination,” the trial court made this
statement in its analysis under the McDonnell Douglas framework. The trial court
did not squarely address appellant’s argument that his termination was “motivated
partially by a discriminatory reason, even if it also was motivated by permissible
reasons not, in themselves, pretextual.” Furline, 953 A.2d at 353.
III. Conclusion
In sum, we remand the case to the trial court to consider whether appellant’s
communications with Mr. Arbour, before he submitted his doctor’s note, “provide[d]
[appellees] with enough information that, under the circumstances, [they could] be
fairly said to know of both the disability and desire for an accommodation.” Taylor,
184 F.3d at 313. We also remand for the trial court to determine whether appellees
terminated appellant in part based on his disability. See Furline, 953 A.2d at 353.
Accordingly, the judgment on appeal is hereby
Reversed and remanded. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484422/ | Notice: This opinion is subject to formal revision before publication in the Atlantic
and Maryland Reporters. Users are requested to notify the Clerk of the Court of
any formal errors so that corrections may be made before the bound volumes go
to press.
DISTRICT OF COLUMBIA COURT OF APPEALS
No. 19-CF-0687
BRIAN E. MOORE, APPELLANT,
V.
UNITED STATES, APPELLEE.
Appeal from the Superior Court
of the District of Columbia
(2018-CF3-011411)
(Hon. Craig Iscoe, Motions Judge; Hon. Milton C. Lee, Jr., Trial Judge)
(Argued January 13, 2022 Decided November 17, 2022)
Sean R. Day for appellant.
Katherine M. Kelly, Assistant United States Attorney, with whom Michael R.
Sherwin, Acting United States Attorney, and Elizabeth Trosman and John P.
Mannarino, Assistant United States Attorneys, were on the brief, for appellee.
Before BECKWITH and EASTERLY, Associate Judges, and THOMPSON, Senior
Judge. *
Opinion by Senior Judge THOMPSON, dissenting in part, at page 51.
*
Judge Thompson was an Associate Judge of the court at the time of
argument. She began her service as a Senior Judge on February 18, 2022.
2
EASTERLY, Associate Judge: Attorney John Harvey was appointed by the trial
court to represent Brian Moore in a contempt proceeding after Mr. Moore allegedly
violated an order prohibiting him from contacting his then-wife. But Mr. Harvey
subsequently became a witness against Mr. Moore: Mr. Harvey was called by the
United States government in a separate criminal case to testify about two private in-
the-hallway-outside-the-courtroom mid-trial conversations during which Mr. Moore
made hostile remarks about the District of Columbia Assistant Attorney General
(AAG) who had been assigned to prosecute his contempt case. Based on Mr.
Harvey’s inculpatory testimony, Mr. Moore was sentenced to an aggregate of eight
years in federal prison for threatening a public official and obstructing justice (two
counts each).
Mr. Moore challenges his convictions on multiple grounds. We address only
two: his argument that the evidence supporting his convictions was legally
insufficient and his argument that the admission at his trial of Mr. Harvey’s
testimony violated Mr. Moore’s evidentiary attorney-client privilege. Although we
reject Mr. Moore’s sufficiency claims, we hold, based on the record in this case, that
the trial court erred in ruling that Mr. Harvey’s conversations with Mr. Moore were
not privileged and thus his testimony about these conversations was admissible
3
against Mr. Moore at trial. Further, because we conclude this erroneous evidentiary
ruling was not harmless, we vacate Mr. Moore’s convictions.
I. Sufficiency
A. Trial Facts and Procedural History
At Mr. Moore’s May 2019 jury trial for threatening a public official and
obstructing justice, the government called three witnesses: the District of Columbia
AAG who had prosecuted Mr. Moore for contempt, a Deputy United States Marshal
assigned to investigate the threats against the AAG, and Mr. Harvey. Because Mr.
Harvey was the only witness who actually heard what Mr. Moore said, the
government’s case rested on his testimony.
Mr. Harvey, a longtime member of the Superior Court’s Criminal Justice Act
panel, 1 explained that he heard Mr. Moore’s statements because he was Mr. Moore’s
court-appointed lawyer in the contempt case. Mr. Harvey testified that the
1
See Criminal Justice Act (CJA) Attorneys, District of Columbia Courts,
https://www.dccourts.gov/services/cja-practitioner; https://perma.cc/SUG6-DHLU
(last visited Nov. 15, 2022).
4
statements in question were made on two occasions during Mr. Moore’s 2018
contempt trial, which spanned several months so that Mr. Moore, who was not
detained and lived in North Carolina, would not miss too many consecutive days of
work. On both occasions, the statements were made after the AAG sought to alter
Mr. Moore’s conditions of release.
Prior to the first incident on April 12, 2018, the AAG asked the court to
reverse its order discontinuing GPS monitoring of Mr. Moore via an ankle bracelet.
Mr. Harvey and Mr. Moore met in the hallway outside the courtroom to discuss this
development, or more particularly, Mr. Moore’s feelings about this development.
Mr. Moore was “very agitated” and began by saying things like “[f]uck that bitch. I
hate this bitch,” referring to the AAG. Responding to Mr. Moore, Mr. Harvey
explained that the AAG was doing her job as a prosecutor, and it was “just silly on
his part to be angry.” This only further angered Mr. Moore, who not only repeated
“fuck that bitch” but also added “I’ll shoot that bitch.” When Mr. Harvey said,
“Man, what are you talking about?” Mr. Moore replied, “That’s right, Harvey. I’ll
shoot that bitch.” Mr. Harvey told Mr. Moore he was “starting to . . . think [Mr.
Moore was] serious,” prompting Mr. Moore to say, “God damn right, Harvey. Fuck
that bitch. I’ll shoot that bitch.” Mr. Harvey then told Mr. Moore he would have to
withdraw from representing him and left to call Bar Counsel.
5
Mr. Harvey testified that he called Bar Counsel to “find out what [his] options
were.” Mr. Harvey explained that he was aware that, within the scope of his
representation of Mr. Moore on contempt charges, he could not disclose Mr.
Moore’s “secrets” about past criminal activity, but Mr. Harvey’s understanding was
that Mr. Moore’s threats to commit future criminal activity fell outside that
representation. 2 Mr. Harvey also noted that under Rule 1.6 of the District of
Columbia’s Rules of Professional Conduct, he was authorized to “reveal client
confidences and secrets[] to the extent reasonably necessary . . . to prevent” a client
from engaging in a criminal act that he as the attorney “reasonably believe[d] [wa]s
likely to result in death or substantial bodily harm absent disclosure.” See D.C. R.
Prof. Conduct 1.6(c)(1). Mr. Harvey testified that Bar Counsel advised him that the
decision whether to disclose such statements under this rule was left to his discretion.
Relying on a different rule, D.C. R. Prof. Conduct 1.16 (regarding declining
or terminating representation), Mr. Harvey decided to ask the court if he could
withdraw because of an unspecified “ethical problem.” He did not indicate which
2
Mr. Harvey explained to the jury, “If [a client] says, ‘I’m going to shoot the
President,’ that means [they are] going to do something in the future. I cannot
participate in that because, if I give [them] any legal advice, then, basically, I’m
helping [them] and guiding [them] through the process to commit a crime as opposed
to advising [them] about what the legal ramifications are because [they] committed
one.”
6
subsection of Rule 1.16 he wished to rely upon. When the judge asked if Mr. Harvey
reasonably believed that Mr. Moore had used or was attempting to use his services
to perpetrate a crime or a fraud, alluding to D.C. R. Prof. Conduct 1.16(b)(1) and
(2), Mr. Harvey told the court he had “concerns.” But Mr. Harvey later told the
judge that his “reason for wishing to withdraw ha[d] nothing to do with [Mr. Moore]
requesting [Mr. Harvey] to do anything.” His relationship with Mr. Moore had
become “toxic” by this point and Mr. Harvey just “wanted to get out of the case.”
The trial court refused to allow him to withdraw based on the information he
provided. In the meantime, Mr. Moore informed Mr. Harvey that he had just been
“bullshitting” and reassured him, “I didn’t mean it. I didn’t mean it.” 3
Mr. Harvey testified that he told Mr. Moore that he would continue to
represent him but instructed him, “You will never, ever use this kind of language
with me about anybody because, from this point forward, I’m going to believe you.
So if you decide you want to go shoot somebody, you need to keep that to yourself
and don’t make me a part of it.” 4 Mr. Moore responded: “All right, Harvey. I’m not
According to the Deputy Marshal’s notes from his interview of Mr. Harvey,
3
Mr. Moore also apologized and told Mr. Harvey he was “just blowing off steam.”
4
Before the grand jury, Mr. Harvey additionally testified that he warned Mr.
Moore that if Mr. Moore ever threatened the AAG again, he would tell the court.
The transcript of Mr. Harvey’s trial testimony on cross-examination is less clear
7
going—I won’t say nothing like that again. I was just bullshitting.” Mr. Harvey and
Mr. Moore then entered the courtroom and the trial resumed.
Mr. Moore failed to appear at his next scheduled trial date in June 2018. Mr.
Harvey explained to the court that Mr. Moore was training for a new job as a crane
operator and had to attend a certain number of classes within a period of time. The
judge continued the trial until June 29, 2018, and informed Mr. Harvey that if Mr.
Moore did not appear on that date, she would issue a bench warrant for Mr. Moore’s
arrest. On June 29, a Friday, Mr. Moore returned to court and the AAG again asked
the court to either detain him or order him to resume wearing an ankle bracelet. The
court granted the AAG’s request to put Mr. Moore back on GPS monitoring.
Because it was nearing 5 p.m., it was too late for Mr. Moore to get an ankle bracelet
that day; he had to return to the courthouse on Monday morning. Mr. Harvey
testified that Mr. Moore was “pissed off” about this development because it meant
that he would have to miss job training scheduled for Monday. Mr. Harvey
successfully advised Mr. Moore to keep his anger in check while they were before
the judge, but once they were out in the hallway, Mr. Moore expressed his feelings
about whether Mr. Harvey warned Mr. Moore only that he would withdraw, or if
Mr. Harvey explicitly told Mr. Moore that he would tell the court what Mr. Moore
said.
8
to Mr. Harvey. Mr. Harvey explained that Mr. Moore “wasn’t hollering and
screaming, but you could see [from] the expression on his face that he was . . . mad.”
According to Mr. Harvey, they had the following exchange:
Mr. Moore: [I]f I lose my job, I’m going to bust a
cap in this bitch, I’m going to bust a
cap in this bitch.
Mr. Harvey: Man, what are you doing?
Mr. Moore: Man, fuck this bitch. If I lose my job,
I’m going to bust a cap in this bitch
[making a hand gesture simulating a
gun].
Mr. Harvey: I told you what I was going to do if you
ever said something like that to me
again. 5
Mr. Moore: Fuck her. Fuck you.
Mr. Harvey testified he had “no idea what this man was going to do.” Without
further discussion, Mr. Harvey went back into the courtroom and renewed his motion
to withdraw. He also told the court that he would reveal Mr. Moore’s statements to
him if the court ordered him to, which the court did. After hearing Mr. Harvey’s
account of Mr. Moore’s comments, the court immediately ordered Mr. Moore to be
detained and subsequently granted Mr. Harvey’s withdrawal motion. 6
5
But see supra note 4.
6
On cross-examination, Mr. Harvey acknowledged that he also told the court
that his relationship with Mr. Moore was “horrible” and “[u]nhealthy,” that their
discussions had become “unprofessional” because of the profane language both men
9
In addition to this testimony from Mr. Harvey and its two other witnesses, the
government introduced into evidence silent surveillance footage from June 29, 2018,
capturing the second of the two conversations in the courthouse corridor when Mr.
Harvey claimed Mr. Moore had threatened the AAG, as well as still photographs
taken from the video footage. Mr. Harvey’s grand jury testimony was admitted into
evidence in the defense case. Mr. Moore did not testify. The jury quickly convicted
Mr. Moore on all counts of threatening a public official and obstructing justice.
B. Analysis
On appeal, Mr. Moore argues that the government failed to prove that he had
the requisite mens rea to support either of his convictions. Although he briefed this
argument after his evidentiary claim, we address it first for two reasons: (1) “the
Double Jeopardy Clause forbids a second trial for the purpose of affording the
prosecution another opportunity to supply evidence which it failed to muster in the
first proceeding,” Gray v. United States, 155 A.3d 377, 389 n.21 (D.C. 2017)
(internal quotation marks and brackets omitted), meaning Mr. Moore’s evidentiary
claim would be moot should he prevail on his sufficiency claim, and (2) “even
used with each other, and that he had “never wanted to remove [him]self from a
situation as badly as [he] wanted to remove [him]self from this one.”
10
improperly admitted evidence may be considered in evaluating the sufficiency of the
evidence,” Mitchell v. United States, 985 A.2d 1125, 1134-35 (D.C. 2009) (internal
quotation marks omitted), meaning that even if we concluded that Mr. Moore’s
statements to Mr. Harvey were protected by attorney-client privilege and should not
have been admitted at trial, we would have to consider these statements in assessing
whether the government proved its case against him.
We review sufficiency claims de novo. In re S.W., 45 A.3d 151, 154 (D.C.
2012). “When assessing the sufficiency of the evidence, we view the evidence in
the light most favorable to the verdict, giving full play to the right of the fact-finder
to determine credibility, weigh the evidence, and draw justifiable inferences of fact.”
Miller v. United States, 209 A.3d 75, 77 (D.C. 2019) (internal quotation marks and
brackets omitted). “The evidence is sufficient if . . . any rational trier of fact could
have found the essential elements of the crime beyond a reasonable doubt.” Id.
1. Threats Against Public Officials
In a two-paragraph argument, Mr. Moore asserts the government’s evidence
was insufficient to prove that he threatened a public official under D.C. Code
§ 22-851(c) (providing a criminal penalty for “[a] person who stalks, threatens,
11
assaults, kidnaps, or injures any official or employee . . . while the official or
employee is engaged in the performance of his or her duties or on account of the
performance of those duties”) because the government did not prove that he intended
for his statements to reach the AAG who prosecuted him for contempt. Our analysis
is limited to this argument. See, e.g., Sutton v. United States, 988 A.2d 478, 483
(D.C. 2010) (considering sufficiency of the evidence for only the elements of the
crime challenged by the defendant).
Mr. Moore provides no support for the argument that proof of such a mens rea
element is required to establish guilt under D.C. Code § 22-851(c). He cites to only
one case from this jurisdiction, Carrell v. United States, 165 A.3d 314 (D.C. 2017)
(en banc), and appears to assert that this court implicitly held that, in any threats
prosecution, “the government must prove intent for the statement (the conduct) to
reach the target (the result)” because “without that, the statement cannot be intended
to threaten the target.” 7
Mr. Moore’s reliance on Carrell is misplaced. Sitting en banc, this court
7
Mr. Moore also cites to an intermediate appellate court decision from
Massachusetts, Commonwealth v. Maiden, 810 N.E.2d 1279, 1281 (Mass. App. Ct.
2004). He provides no explanation as to how that out-of-jurisdiction decision
informs our understanding of D.C. Code § 22-851(c). See id.
12
reaffirmed in Carrell that the actus reus elements of felony and misdemeanor threats
under D.C. Code § 22-407 and § 22-1810 are that the defendant “(1) uttered words
to another person (2) with a result that the ordinary hearer would reasonably . . .
believe that the threatened harm would take place.” 165 A.3d at 320 (internal
brackets, quotation marks, and footnote omitted). We also made clear that “the
government must prove the defendant’s mens rea to utter the words as a threat, and
that it may do so by establishing that the defendant acted with the purpose to threaten
or with knowledge that his words would be perceived as a threat.” Id. at 317. But
we did not address whether (much less hold that) the government must prove that
the defendant’s purpose was for the threat to reach the target, rather than some other
person.
Certainly we agree that the offense of threats to public officials—like felony
and misdemeanor threats—does not criminalize thoughts in one’s head and therefore
requires proof that the defendant communicated a threatening statement to someone
with the intent (in the sense of purpose or knowledge) that the statement will be
perceived as a threat. 8 But, in the absence of any substantiated argument as to why
8
As the government notes, we have held that the crime of threatening under
§ 22-1810 “[is] complete as soon as the threat [is] communicated to a third party,
regardless of whether the intended victim ever [knows] of the plot.” Beard v. United
States, 535 A.2d 1373, 1378 (D.C. 1988); see also Gurley v. United States, 308 A.2d
13
a threat against a public official must be made with the purpose or knowledge that
that specific individual will hear the threat, cf. Comford v. United States, 947 A.2d
1181, 1188 (D.C. 2008) (observing that it is generally “not enough merely to
mention a possible argument in the most skeletal way, leaving the court to do
counsel’s work” (internal quotation marks omitted)), we are unpersuaded that the
evidence was insufficient on this basis. 9
785, 787 (D.C. 1973); Jackson v. District of Columbia., 541 F. Supp. 2d 334, 343
(D.D.C. 2008). But all that means is that the actus reus element of threatening does
not require the threat to reach the intended victim (at least under the criminal threats
statute); it does not address whether the defendant must have the purpose or
knowledge that the threat will reach the victim.
9
It is undoubtedly the case that, when a threat is delivered only to a third
party, that fact can bear on other elements of the offense. For one, it may bear on
one’s “mens rea to utter the words as a threat.” Carrell, 165 A.3d at 317; see also,
e.g., United States v. Houston, 792 F.3d 663, 665, 667-68 (6th Cir. 2015) (analyzing
a conviction under 18 U.S.C. § 875, a federal threats statute, and holding that, when
the incarcerated defendant speaking by phone to his girlfriend said, “I’ll kill that
motherf[***]er,” referring to his former attorney, a jury could reasonably infer that
the defendant was “caught . . . in a fit of rage in a prison cell . . . [and] that he was
venting his frustration to a trusted confidante rather than issuing a public death threat
to another”). Likewise, it may bear on the actus reus element that an “ordinary hearer
would reasonably . . . believe that the threatened harm would take place.” Carrell,
165 A.3d at 320 (internal brackets omitted); cf. Black v. United States, 755 A.2d
1005, 1008 n.7 (D.C. 2000) (holding that a defendant’s words were “of such a nature
as to convey fear of serious bodily harm or injury to the ordinary hearer” where he
not only stated to a third party that he planned to “put a cap in [the intended victim’s]
hand,” but “asked [the third party] to convey the threatening message to [the
intended victim]” (internal quotation marks omitted)). But, as noted above, Mr.
Moore has not challenged the sufficiency of the evidence on these grounds.
14
2. Obstruction of Justice
Mr. Moore also argues that the evidence was insufficient to prove he
obstructed justice under D.C. Code § 22-722(a)(5) (“A person commits the offense
of obstruction of justice if that person[] . . . [i]njures or threatens to injure any person
. . . on account of the person or any other person performing [their] official duty as
a juror, witness, or officer in any court in the District of Columbia . . . .”).
Specifically, he asserts that “[o]bstruction of justice ‘is a specific intent crime
requiring intent to impair the proceeding,’” relying on Hawkins v. United States, 119
A.3d 687, 695 (D.C. 2015), 10 and that the government did not prove that he intended
to impair the proceedings of his contempt trial. We discern no insufficiency on this
basis.
To begin, we agree with the government’s statement that “obstruction under
[this] subsection[] can include retaliation for past events, and does not require intent
to impair ongoing, or future, official proceedings.” Cf. Mayhand v. United States,
127 A.3d 1198, 1204 (D.C. 2015) (acknowledging a retaliatory act against an
Hawkins predates this court’s en banc “endorsement of more particularized
10
and standardized categorizations of mens rea” in lieu of “specific” and “general”
intent in Carrell, 165 A.3d at 324.
15
individual “on account of” information given to law enforcement constitutes
obstruction under analogous subsection § 22-722(a)(4)); McCullough v. United
States, 827 A.2d 48, 58 (D.C. 2003) (holding § 22-722(a)(4) “was satisfied because
[a witness] was killed in retaliation for giving information to the police about
criminal activity”). Nonetheless, as Mr. Moore points out, the history of the statute
strongly suggests that all obstruction of justice crimes require proof of mens rea of
some kind. See The “Law Enforcement Witness Protection Amendment Act of
1992,” D.C. Council, Comm. on the Judiciary, Report on Bill 9-385 at 3 (May 20,
1992) (“Specific knowledge and intent are required for threatening or intimidating
conduct to be actionable. The intent requirement embraces in comprehensive terms
various forms of obstruction of justice . . . .”). Thus, the fact that obstruction may
be accomplished by a retaliatory act does not obviate proof of “specific intent” that
we have said is required for this crime; it simply means that an act of retaliation is
subject to its own intent requirement, i.e., the intent to retaliate.
It does not follow, however, as Mr. Moore argues, that “[t]here can be no
obstruction without a threat specifically intended to reach” the AAG who prosecuted
him for contempt. Again, assuming in the absence of any persuasive argument to
the contrary, see supra section I.B.1, that the government proved the elements of
threats against a public official, a rational juror could have concluded that Mr.
16
Moore’s purpose in uttering that threat was to retaliate against the AAG.
We thus reject Mr. Moore’s sufficiency arguments about mens rea, and turn
to his argument that the government never should have been permitted to present
Mr. Harvey’s testimony to the jury to begin with.
II. Attorney-Client Privilege
A. Additional Motion Facts and Procedural History
As noted above, after Mr. Harvey reported Mr. Moore’s threats against the
AAG prosecuting the contempt case, the trial court reluctantly granted Mr. Harvey’s
motion to withdraw from representing Mr. Moore. 11 It appears the court informed
the U.S. Marshal’s Service (which provides security for the courthouse), which then
contacted the U.S. Attorney’s Office. The USAO subsequently called Mr. Harvey
11
The court expressed reservations about the ethical necessity of Mr. Harvey
withdrawing, given that Mr. Moore’s alleged threats against the AAG did not, in the
court’s view, create any conflict of interest between Mr. Harvey and Mr. Moore with
respect to the contempt case. The court also seemed to question the sincerity of Mr.
Moore’s statements to Mr. Harvey, noting that “people make threats all the time to
get a judge off the case, to get a prosecutor off a case, [or] to get an attorney off a
case.” The court ultimately yielded, however, to Mr. Harvey’s representations that
his ability to communicate with Mr. Moore had completely broken down.
17
to testify before a grand jury, 12 which returned an indictment against Mr. Moore for
two counts of obstructing justice under D.C. Code § 22-722(a)(5) and two counts of
threatening a public official under D.C. Code § 22-851(c) (one set of charges
pertaining to Mr. Moore’s April statements and the other pertaining to his June
statements).
Prior to trial, Mr. Moore filed a motion in limine to exclude Mr. Harvey’s
anticipated testimony about his communications with Mr. Moore. In support of his
motion, he argued that “[a]ny conversation between Mr. Moore and Mr. Harvey
debriefing [after] hearing[s]” in his contempt case was “presumptively” covered
under the blackletter formulation of the attorney-client privilege, see infra section
II.B.2, and that “the [g]overnment ha[d] not overcome that [presumption] via the
crime-fraud or any other exception to the privilege.” In its opposition to the motion,
the government argued that Mr. Moore’s threatening statements did not meet the
requirements for attorney-client privilege; it also disavowed any reliance on the
crime-fraud exception for its position. In reply, Mr. Moore challenged the
12
Although the grand jury is a judicial proceeding in which the attorney-client
privilege may protect client confidences from disclosure, In re Pub. Def. Serv., 831
A.2d 890, 902 (D.C. 2003), there is no indication in the record that Mr. Moore was
given an opportunity at this juncture to litigate whether his statements to Mr. Harvey
were protected by attorney-client privilege.
18
government’s “piecemeal” approach, focusing on individual statements made to Mr.
Harvey and considering whether they were requests for legal advice in isolation. Mr.
Moore argued that the court should consider these statements in the context of their
entire conversation, which he asserted was more consistent with the purpose and
constitutional significance of the attorney-client privilege.
At a motions hearing in February 2019, Mr. Moore reiterated his written
arguments. Emphasizing that the types of statements Mr. Harvey alleged him to
have made were “textbook [for how] we would expect [a] defendant” to react in a
criminal proceeding “not . . . in [a] vacuum[, . . . but] in real li[fe],” he argued that
such “reaction[s]” to an attorney’s “explanation . . . about . . . why prosecutors take
certain actions” were sufficiently “related to . . . legal advice” to be protected by
attorney-client privilege. He also warned that the court would “eliminate the
privilege almost altogether” and run afoul of existing case law if it “pars[ed] out
specific lines or specific words” in attorney-client communications to determine if
they were privileged. Acknowledging that the attorney-client privilege might
“capture things that are untoward,” he argued such a result would be justified
because society should want defendants to share their “honest and real” feelings with
their lawyers and “to feel comfortable enough to say [even] ill-advised things.” In
response, the government argued that existing case law extended attorney-client
19
privilege only to “communications made with respect to a request for legal advice,”
which, it argued, Mr. Moore’s statements were not. The government also asserted
that Mr. Moore was asking the court to “create a [new] rule”—or at least “expand
the previous interpretation of privilege”—such that “essentially any communication
with a defense attorney with respect to an ongoing case . . . would all be privileged.”
The court denied Mr. Moore’s motion to preclude Mr. Harvey from testifying
at trial. Initially, it reasoned that Mr. Harvey’s “clear[] and unambiguous[]” warning
on April 12, 2018, that he would reveal any future threatening statements (per his
grand jury narrative) “change[d] the context” by “telling [Mr. Moore] that . . . the
confidentiality of [Mr. Moore’s] communications [with Mr. Harvey would] no
longer apply.” It concluded that “under these circumstances,” Mr. Moore’s
“statements were not within even a broad understanding of the seeking of legal
advice” and thus it was “not over[-]parsing” to deem them unprotected by attorney-
client privilege.
Because of the court’s reliance upon Mr. Harvey’s April 12 warning to Mr.
Moore to support its finding that Mr. Moore’s June 29 statements were not covered
by attorney-client privilege, Mr. Moore asked whether the court would “consider
precluding [Mr. Harvey’s] testimony about the threat that occurred prior to the
20
warning . . . on April 12th.” The court subsequently clarified that the warning was
not load-bearing, and that it would allow Mr. Harvey to testify about both
conversations. The court acknowledged that Mr. Moore was “clearly seeking legal
advice” when he asked “why is she, referring to [the AAG], doing this,” at the outset
of his April 12 conversation with Mr. Harvey in the hallway. But the court explained
that the “extended monologue” that followed “about the violent actions” Mr. Moore
contemplated taking against the AAG was just an expression of “anger based on the
legal advice.” Accordingly, the court concluded the April statements were no more
protected by the attorney-client privilege than were Mr. Moore’s June 29 statements.
The court elaborated that Mr. Moore’s “anger [was] completely understandable, and
. . . not . . . unreasonable in any way,” but nevertheless ruled that the communication
of that anger was “not related to the legal advice about how to proceed at trial[,] . . .
to trial strategy[,] . . . to defenses[,] . . . to cross examination of witnesses[,] . . . [or]
to anything except the desire to kill the prosecutor.”
B. Legal Analysis
This case turns on identifying where the boundaries of the attorney-client
privilege lie in the context of communications between a criminal defendant and
their court-appointed counsel, and specifically when it can be said that a defendant
21
is seeking legal advice from counsel related to their court appointment. Because the
legal questions predominate, 13 see In re Pub. Def. Serv. (In re PDS), 831 A.2d 890,
897-98 (D.C. 2003), and in the absence of any argument to the contrary by the
government, we agree with Mr. Moore that our review is de novo.
We emphasize at the outset that the only question before us is the scope of
this evidentiary privilege, held by a client, which abrogates a person’s “general duty
to give what [sworn] testimony one is capable of giving” in a judicial proceeding.
Jaffee v. Redmond, 518 U.S. 1, 9 (1996) (quoting United States v. Bryan, 339 U.S.
323, 331 (1950)). Our concern is not whether and when counsel may ethically
disclose information that a person is in danger, a discretionary decision which is
governed by the Rules of Professional Conduct. See D.C. R. Prof. Conduct 1.6. 14
Although Mr. Moore does not concede that he made threats against the
13
AAG, he argues that such statements would be privileged even if he made them.
14
See also D.C. R. Prof. Conduct 1.6 cmts. [6]-[8] (“This rule is not intended
to govern or affect judicial application of the attorney-client privilege.”); Adams v.
Franklin, 924 A.2d 993, 998 (D.C. 2007) (explicating that “[a]lthough a court order
to compel testimony vitiates Rule 1.6, there still exists the independent basis found
in the attorney-client privilege to preclude compelled disclosure of privileged
communications”); Newman v. State, 863 A.2d 321, 332 (Md. 2004) (“There is a
subtle relationship between the confidentiality required under Rule 1.6 and the
evidentiary rule of the attorney-client privilege. . . . The attorney-client privilege
applies in judicial and other proceedings in which an attorney may be called as a
witness or otherwise required to produce evidence adverse to his client. The rule of
confidentiality embodied in Rule 1.6, however, applies in all other situations that do
not involve the compulsion of law.” (internal citations omitted)).
22
The fact that the Rules of Professional Conduct may permit counsel to make a
disclosure “tells us nothing about the admissibility of the information . . . disclosed.”
Purcell v. Dist. Att’y for Suffolk Dist., 676 N.E.2d 436, 438 (Mass. 1997).
We begin with a review of the animating principles of the attorney-client
evidentiary privilege. We then discuss the cases in which these principles have been
typically applied, distinguish criminal defense cases involving court-appointed
attorneys, and explain why the privilege logically applies more expansively in the
latter context. Lastly we apply our analysis to this case, concluding that Mr. Moore’s
statements to Mr. Harvey were protected by attorney-client privilege.
1. Animating Principles
The attorney-client privilege is “the oldest of the privileges for confidential
communications known to the common law,” Upjohn Co. v. United States, 449 U.S.
383, 389 (1981), and is an integral component of our adversarial justice system, In
re PDS, 831 A.2d at 900 (“Underlying the attorney-client privilege is the premise
that the lawyer and the law office are indispensable parts” of our adversarial justice
system. (internal quotation marks omitted)). Understanding the rationale of the
privilege is central to its proper application. See Upjohn, 449 U.S. at 392 (rejecting
23
a formulation of the privilege that would “frustrate[] [its] very purpose”). 15
The privilege is based on the “fundamental principle” that maintaining the
confidentiality of communications between an attorney and their client promotes
“the ends of justice”:
[P]rofessional communications made by a client to his
counsel[] are always to be excluded from the jury . . .
[because unless] clients [can safely] mak[e] full and
confidential communications to their counsels, and unless
they . . . actually do so, the ends of justice could not in
many cases be attained.
State v. Douglass, 20 W. Va. 770, 780 (1882) (emphasis removed) (cited in John
Wesley Hall, Jr., Prof. Resp. Crim. Def. Prac. 3d § 28:3 n.9 (2021 Update)). To
begin, the privilege recognizes that “[l]awyers cannot give sound legal advice
without being apprised of all pertinent facts, no matter how embarrassing or
inculpating,” and that lawyers would be chilled from truly engaging with their clients
and clients would be chilled from “shar[ing] confidences [with their lawyers] if . . .
15
The observation, repeated by the dissent, see post at 65-66, that the privilege
should be “strictly confined within the narrowest possible limits consistent with the
logic of its principle,” In re Grand Jury Investigation, 599 F.2d 1224, 1235 (3d Cir.
1979) (internal quotation marks omitted); see also Jones v. United States, 828 A.2d
169, 174-75 (D.C. 2003); In re Sealed Case, 676 F.2d 793, 806-07 (D.C. Cir. 1982);
United States v. Ivers, 967 F.3d 709, 716 (8th Cir. 2020), only underscores the need
to understand what, precisely, the logic of the principle demands.
24
lawyers could be turned into witnesses against the[ir clients].” In re PDS, 831 A.2d
at 900 (internal quotation marks omitted); see also Upjohn, 449 U.S. at 390
(recognizing that “the privilege exists to protect not only the giving of professional
advice to those who can act on it but also the giving of information to the lawyer to
enable him to give sound and informed advice”). 16
Moreover, the attorney-client privilege is not reserved only for those clients
who seek legal advice in order to comply with the law. To the contrary, the privilege,
“in its very fundamentals, presupposes . . . the furnishing of legal advice to the
culpable client,” 8 Wigmore on Evidence § 2298, at 572 (McNaughton rev. 1961),
16
Our dissenting colleague concedes that this rationale is “long reflected in
case law,” but cites an article for the proposition that “empirical evidence does not
support the assumption that clients rely on a guarantee of absolute confidentiality
when they decide whether to be candid with their lawyers.” Post at 56 n.3 (emphasis
added). The dissent appears to conflate ethical principles of confidentiality with the
evidentiary attorney-client privilege. But in any event, the longstanding rationale
for the attorney-client privilege is not undermined by one study which appears to
show that clients will confide in counsel when they believe counsel are generally
obligated to keep their confidences. See Elisia M. Klinka & Russell G.
Pearce, Confidentiality Explained: The Dialogue Approach to Discussing
Confidentiality with Clients, 48 San Diego L. Rev. 157, 173 (2011) (noting that when
respondents in the cited study “were asked whether they would . . . withhold
information if the lawyer ‘promised confidentiality except for specific types of
information which he/she described in advance,”’ a small number—only 15.1%—
reported that ‘they would withhold’ information from their lawyer” (citing Fred C.
Zacharias, Rethinking Confidentiality, 74 Iowa L. Rev. 351, 386 (1989))).
25
because a lawyer’s advice “is even more vital when the client misguidedly
contemplates or proposes actions that the client knows to be illegal,” In re PDS, 831
A.2d at 901. “The existence of the attorney-client privilege encourages clients to
make such unguarded and ill-advised suggestions to their lawyers,” who are then
ethically, 17 and in the criminal context constitutionally, 18 obliged “in the interests of
justice and the client’s own long-term best interests[] to urge the client, as forcefully
and emphatically as necessary, to abandon illegal conduct.” Id.; see also Nix v.
Whiteside, 475 U.S. 157, 169 (1986) (noting that a lawyer’s “first duty . . . is to
attempt to dissuade the client from [an] unlawful course of conduct”). Indeed, the
reality, as this court has stated, is that “discouraging clients from illegal conduct is a
regular occurrence in an attorney’s practice.” In re PDS, 831 A.2d at 901. The
privilege recognizes that “[t]he sincere counsel of a trusted advisor will persuade
many clients to comply with the law,” id., and thus that ensuring the meaningful
assistance of counsel generally promotes the rule of law and the administration of
17
See, e.g., D.C. R. Prof. Conduct 1.3(a) (obligating counsel to zealously and
diligently represent their client “within the bounds of the law”); D.C. R. Prof.
Conduct 3.3(b) (obligating counsel to dissuade witnesses from giving false
testimony); D.C. R. Prof. Conduct 1.16(a)(1) (obligating counsel to withdraw from
representation where it would “result in violation” of law).
18
See U.S. Const. amend. VI; Strickland v. Washington, 466 U.S. 668, 686
(1984) (recognizing the right to effective representation).
26
justice. 19
As a corollary to this point, the narrow crime-fraud exception to the privilege
applies only to communications made to further ongoing or future crimes. In re
PDS, 831 A.2d at 906. Communications with a client made in an attempt to dissuade
a client from criminal activity do not fall within this exception and are still
privileged. See 8 Wigmore on Evidence § 2298, at 572-73 (explaining the crime-
fraud exception applies when “the client i[s] concerting with the attorney [in] a crime
or other evil enterprise”); see also In re PDS, 831 A.2d at 895 (explaining the “crime-
fraud exception does not apply where the attorney talks the client out of committing
the crime or fraud he contemplates or stops the client’s scheme dead in its tracks”);
Newman, 863 A.2d at 336 (crime-fraud exception did not apply to client’s stated
plans to harm her children, vocalized to her attorney, because “[t]o permit the mere
statement of intent to defeat the attorney-client privilege would result in the
exception swallowing the privilege.”).
19
There is also a line of jurisprudence which grounds attorney-client privilege
in the privacy rights of the client. See, e.g., State v. Sugar, 417 A.2d 474, 479-80
(N.J. 1980) (observing that “[i]f the rule of law is this nation’s secular faith, then the
members of the Bar are its ministers”; “[t]he necessity of full and open disclosure
by a defendant imbues that disclosure with an intimacy equal to that of the
confessional”; and “[a]ny interference with th[is] intimate relationship . . . may do
profound violence to the individual privacy of the client” (citations omitted)).
27
In short, “[b]y encouraging full and frank discussions between attorneys and
their clients” about past or even future criminal activity, the attorney-client privilege
not only fosters effective representation in individual cases, but also “promotes
broader public interests in the observance of law and the administration of justice.”
In re PDS, 831 A.2d at 900 (citation and internal brackets omitted).
2. The Blackletter Formulation of the Privilege in Different
Contexts
This court has adopted the blackletter formulation of the attorney-client
privilege set forth in Wigmore:
(1) [w]here legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or
by the legal adviser, (8) except the protection be waived.
8 Wigmore on Evidence § 2292, at 554. Although this formulation is still the one to
which so many jurisdictions, including our own, see Jones v. United States, 828 A.2d
169, 175 (D.C. 2003), cede definitional authority, courts have debated the precise
contours of its criteria for several hundred years, 8 Wigmore on Evidence § 2290, at
542-45, with countless decisions examining the content and circumstances of a
communication to determine if it is protected—in other words, how far the scope of
the privilege extends.
28
Relatively few decisions, however, have explored these questions in the
context of the relationship between a criminal defendant and court-appointed
counsel. Wigmore’s discussion of attorney-client privilege is replete with
descriptions of small-town lawyers encountering moral quandaries as they counsel
villagers on all matters of law and life. 20 Although The New Wigmore provides a
more contemporary illustration of attorney-client communications, its analysis,
tracking the available case law, is focused overwhelmingly on those in civil and
corporate spheres: for example, how far the privilege extends when “[t]he client . . .
consult[s] the attorney . . . as a business advisor,” as an “investment advisor,” or as
a “lobbyist, accountant, political advisor, labor negotiator, or interpreter.” Edward
J. Imwinkelried, The New Wigmore: Evidentiary Privileges § 6.11.1, at 952-53
(2010) [hereinafter New Wigmore] (citations omitted) (concluding that the privilege
does not extend to cover those communications). Accordingly, much of the
discussion regarding the application of attorney-client privilege, including the
seminal case, Upjohn, 449 U.S. 383, relates to concerns about canny attorneys and
20
See id. § 2296 at 569 (“[T]he prosecuting attorney of the county, in most of
the states elected by popular vote, is often the chief confidant and consultant of the
local citizens in all sorts of trouble . . . .”); id. § 2303 at 584 (“In view of the
frequency with which some persons seek to obtain informally and gratuitously
valuable legal advice, and the lamentable frequency with which attorneys submit to
such an imposition, especially in rural communities, it is often difficult to determine
whether the consultation is a professional one . . . .”).
29
businesspeople manipulating the principle to shield virtually all their
communications from litigation. See New Wigmore § 6.9.1, at 863 (“Because
modern corporations control such vast amounts of information, the risk is that an
expansive application of the attorney-client privilege to corporate entities will
materially interfere with the operation of the justice system.”). But these concerns
have little or no application to the relationship between a person accused of
committing a crime and their court-appointed counsel.
And yet, the attorney-client privilege plays perhaps its most important role for
the criminal defendant. Given the highest of stakes—a loss of liberty or even life—
we recognize the critical import of “[a] criminal defendant’s ability to communicate
candidly and confidentially with his lawyer” and consider “the right to privately
confer with counsel [a]s nearly sacrosanct.” Nordstrom v. Ryan, 762 F.3d 903, 910
(9th Cir. 2014). And although the privilege is not constitutional in origin, see 8
Wigmore on Evidence § 2290, at 542, a violation of it can doubtless implicate both
the Fifth Amendment right against self-incrimination, since a “criminal defendant’s
self-incrimination rights become completely nugatory if compulsory disclosure can
be exacted through his attorney,” and the Sixth Amendment right to the effective
assistance of counsel, since “[t]he effectiveness of counsel is only as great as the
confidentiality of its client-attorney relationship,” People v. Belge, 372 N.Y.S.2d
30
798, 801, 802 (N.Y. Co. Ct. 1975) (internal quotation marks omitted), aff’d, 376
N.Y.S.2d 771 (N.Y. App. Div. 4th Dept. 1975), aff’d, 359 N.E.2d 377 (N.Y. 1976);
see also State v. Kociolek, 129 A.2d 417, 424 (N.J. 1957) (characterizing the
privilege as “indispensable to the fulfillment of the constitutional security against
self-incrimination and the right to make defense with the aid of counsel”).
What is more, the import of the attorney-client privilege is arguably at its apex
when a criminal defendant is appointed counsel. A criminal defendant who has not
hired their lawyer and is not paying their bills may not have the same confidence as
a paying client that the lawyer is serving their interests and not those of the
government. See generally Jonathan D. Casper, Did You Have a Lawyer When You
Went to Court? No, I Had a Public Defender., 1 Yale Rev. L. & Soc. Action 4, 4-9
(1971). To the contrary, given that the government that is prosecuting an indigent
defendant is also providing them with counsel, a defendant may well perceive
appointed counsel to be a hostile agent. Typically, such a defendant
meets [their] lawyer for the first time in the cell block . . .
. [They] did not choose the lawyer, nor do[] [they] know
[the lawyer]. The lawyer has been sent by the judge and
is part of the system that is attempting to punish the
defendant. It is no easy task to persuade this client that
[t]he[y] can talk freely without fear of prejudice.
Monroe H. Freedman, Professional Responsibility of the Criminal Defense Lawyer:
The Three Hardest Questions, 64 Mich. L. Rev. 1469, 1473 (1966). In this context,
31
the trust that the privilege is meant to foster by strictly limiting counsel’s ability to
become a witness against their client is a critical means of ensuring a meaningful
attorney-client relationship. See id. (“[A criminal defense lawyer] will not be
successful unless [they] can convince the client that full and confidential disclosure
to [the] lawyer will never result in prejudice to the client by any word or action of
the lawyer.”).
3. Ensuring the Attorney-Client Privilege Achieves Its Purpose
in the Context of Court-Appointed Counsel for Criminal
Defendants
Wigmore’s formulation of the privilege requires the existence of a relationship
“[w]here legal advice of any kind is sought . . . from a professional legal adviser in
his capacity as such.” 8 Wigmore on Evidence § 2292, at 554. It thus encompasses
advice from a lawyer regarding any sort of actual or potential litigation, 21 as well as
legal advice about non-litigation matters, but excludes “[a]dvice sought for sundry
21
Although the privilege at one point attached only to particular litigation at
bar, it expanded to include any litigation, including litigation in contemplation. 8
Wigmore on Evidence § 2294-95, at 558-66. Imwinkelried clarifies that today,
“[l]itigation need not even be threatened”; rather, the privilege covers “any
consultations for legal advice, wholly irrespective of litigation or even of
controversy.” New Wigmore § 6.11.1, at 954-55 (internal citations and quotation
marks omitted).
32
nonlegal purposes,” id. § 2296, at 566, such as advice given by attorneys,
particularly those in business law and related fields, who may wear other, nonlegal
hats. See, e.g., 1 Edna Selan Epstein, The Attorney Client Privilege and the Work
Product Doctrine 336 (5th ed. 2007) (“[F]or the privilege to be applicable, the
lawyer must act in a legal capacity, rather than perform any of the other functions
[of] law-trained individuals in our society.”); see also Elizabeth Chambliss, The
Scope of In-Firm Privilege, 80 Notre Dame L. Rev. 1721, 1727 (2005) (“[C]ourts
have denied the protection of privilege where the in-house lawyer was found to be
acting as a business adviser, negotiator, or in some other nonlegal role.” (footnotes
omitted)); Arthur Best, 1 Wigmore on Evidence Supplement § 2296, at 1538-39
(2014) (giving examples, such as “where the attorney acted as a claims adjuster” or
records made by a “store’s risk management and loss control department”). In short,
“[t]he client must consult the attorney in the capacity as a legal advisor . . . .” New
Wigmore § 6.11.1, at 952 (emphasis added) (citations omitted). This court
recognized the need for a legal relationship for the privilege to apply in Jones, 828
A.2d at 173-75, 177, rejecting application of the privilege to the defendant’s
communications with his girlfriend (who happened to be an attorney) when made in
the context of a romantic, rather than attorney-client, relationship.
We have no trouble concluding that the relationship between a defendant and
33
their court-appointed counsel is generally one within which the client is seeking (and
counsel is providing) legal advice within the meaning of the attorney-client
privilege. Unlike many of the civil contexts that Wigmore examines, such a
relationship has no nonlegal objectives. The only reason the client has been paired
with counsel is the client’s need for (and entitlement to) counsel; and counsel’s sole
role is to zealously represent their client in the court-appointed matter. The thornier
question, to which we now turn, is determining when a client’s particular
communications with court-appointed counsel are related to that purpose.
It is clear that a communication need not itself be explicitly about a legal
matter to relate to a legal purpose. See, e.g., Jones, 828 A.2d at 176-77 (noting that
appellant’s “‘scientific’ questions about whether or not his fingerprints might remain
on a glass or whether his semen and hair might be discovered in the bathroom . . .
might fall within the privilege if they were expressed in a communication within a
clearly established attorney-client relationship”). But this court has never addressed
where the line between related and unrelated communications lies, particularly in
the context of court-appointed attorneys and criminal defendants.
“In general, American decisions agree that the privilege applies if one of the
significant purposes of a client in communicating with a lawyer is that of obtaining
34
legal assistance.” Jones, 828 A.2d at 175 (quoting Restatement (Third) of the Law
Governing Lawyers § 72 reporter’s note (Am. L. Inst. 2000)); see also 8 Wigmore
on Evidence § 2310, at 599 (“[T]he client cannot know what is necessary or material
. . . . The test is, therefore, not whether the . . . statement is actually necessary . . . to
the subject of the consultation, but whether the statement is made as a part of the
purpose of the client to obtain advice on that subject.” (internal citations omitted)).
The key consideration is “[w]hy . . . the person ma[d]e the statement to the attorney,”
New Wigmore § 6.11, at 935 (emphasis added). So construed, the “significant
purpose” test sensibly operates in many contexts to exclude communications that are
only “tangentially related” to a legal purpose, Att’y Gen. of U.S. v. Covington &
Burling, 430 F. Supp. 1117, 1121-22 (D.D.C. 1977), particularly where the attorney
and the client are mutually engaged in both legal and nonlegal activities, see id.
(concluding that communications regarding Covington & Burling’s extensive
dealings with bauxite consultants and purchasers were unrelated to the nation of
Guinea’s legal purpose).
But in other contexts, particularly those involving pro bono or court-appointed
attorneys, the “significant purpose” test has been by operation much more
permissive. The Massachusetts Supreme Judicial Court acknowledged this in
Purcell v. District Attorney for Suffolk District, 676 N.E.2d 436, 441 (Mass. 1997),
35
where the appellant informed a legal aid attorney of “his intention to commit arson.”
The court concluded that the privilege applied to the communication because it was
undisputed that “[the appellant] consulted [the lawyer] concerning his impending
eviction,” the lawyer “is a member of the bar, and [the appellant] either was or sought
to become [the lawyer’s] client.” Id. (“This is not a case in which our traditional
view that testimonial privileges should be construed strictly should be applied.”).
Similarly in State v. Boatwright, 401 P.3d 657, 664-65 (Kan. Ct. App. 2017), the
Court of Appeals of Kansas rejected the government’s argument that “[the
appellant’s] threat [to kill his ex-fiancée, made to his court-appointed defense
attorney,] . . . had no relationship to [the attorney’s] representation of [the
appellant].” The court concluded that the threats were made “during the course of
[the attorney’s] representation of [the client], specifically during [a] meeting . . . to
discuss a plea offer,” in a case in which the client was charged with violating a
protective order and stalking his ex-fiancée. Id. at 660, 664. “Although [the client’s]
comment [was] jarring in isolation,” the court recognized that “the expression of
such frustrations is not an uncommon occurrence in the course of an attorney-client
relationship, . . . and may serve as a springboard for discussion and attempts to
dissuade the client on the part of the attorney.” Id. at 664-65 (internal quotation
36
marks omitted). 22
For multiple reasons, we likewise apply the significant purpose test
permissively in the context of communications between a client and their court-
appointed criminal defense attorney that are made during the course of that
representation.
First, as discussed, the typical relationship between a defendant and their
court-appointed counsel has only one objective: representation in the ongoing
criminal case. There is perforce a strong presumption that, any time the client speaks
to their court-appointed lawyer, a significant purpose of that communication is to
receive legal advice in the case for which the lawyer has been appointed to represent
them.
22
We disagree with the government and our dissenting colleague that
Boatwright is distinguishable because it concerns Kansas’s statutorily recognized
attorney-client privilege. Kansas’s statute merely codifies Wigmore’s formulation
of the privilege. State v. Munyon, 726 P.2d 1333, 1337 (Kan. 1986). And while it
is true, as the government points out, that the Kansas Supreme Court has explicitly
interpreted the third element of Wigmore’s formulation—“the communications
relating to that purpose,” 8 Wigmore on Evidence § 2292, at 554—to mean
“communications made in the course of that relationship,” Munyon, 726 P.2d at
1337, that does not undermine our analysis. To the contrary, it buttresses our
expansive application of the privilege in the context of communications between
defendants and their court-appointed attorneys, see infra.
37
Second, as also discussed, for a court-appointed attorney-client relationship
to be meaningful, there must be room for the kind of wide-ranging conversation that
establishes genuine trust. See New Wigmore § 6.11, at 935 (acknowledging that in
any privileged relationship there must be some “‘space’ [for the relationship] to
flourish” (citation omitted)); see also 1 Paul R. Rice, Attorney-Client Privilege in
the U.S. § 5:21 (2021) (“[An] open, dynamic, and unguarded atmosphere” is the
“very goal” of an attorney-client relationship.). Communications between the client
and their court-appointed attorney may be meandering, filled with digressions,
detours and emotional outbursts—but these communications are central to the
enterprise, not distractions or nuisances. 23
Third, the criminal charges a client faces cannot neatly be segmented from the
rest of their life, and even communications that appear to be about something
unrelated may nevertheless be intimately connected to how the client experiences
the criminal case or impact how the client is able to engage with counsel and present
in court. As a general matter, being a criminal defendant is inherently stressful
because of the disruptions to personal and family life, and the potentially life-altering
23
It might even be said that the “occurrence [of an outburst] is proof that the
privilege has worked to achieve that level of unbridled candor which incentivizes
the fulsome information collection essential to optimal lawyering.” Rice, § 5:21.
38
outcomes that hang in the balance. See generally, e.g., Naomi F. Sugie & Kristin
Turney, Beyond Incarceration: Criminal Justice Contact and Mental Health, 82
Am. Socio. Rev. 719, 719-743 (2017); April D. Fernandes, How Far Up the River?
Criminal Justice Contact and Health Outcomes, 7 Soc. Currents 29, 29-45 (2020).
Defendants with court-appointed attorneys are, by definition, low-income, and are
likely to have additional stressors; they will often face “collateral and ancillary . . .
issues . . . [such as] adverse immigration consequences, loss of parental rights, loss
of housing, seizure of property, [and] loss of employment.” Civil Legal Services
Division, The Public Defender Service for the District of Columbia,
https://www.pdsdc.org/about-us/legal-services/civil-legal-services-division;
https://perma.cc/5NZJ-FVXH (last visited Nov. 15, 2022). To hold that forceful
reactions, frustrated venting, or even verbally violent outbursts categorically fall
outside the client’s “significant purpose” of seeking legal representation from court-
appointed counsel unreasonably imposes a crabbed and technical construction of the
privilege on the messiness of human interactions in highly stressful circumstances.24
24
Our dissenting colleague does not dispute that criminal defendants confront
myriad challenges; indeed the dissent recognizes further systemic and societal
constraints, post at 68 n.8, particularly those that plague black and brown defendants.
But our colleague argues that these challenges should not justify expanding the
attorney-client privilege so as to “protect these defendants from prosecution and
punishment.” Id. Setting aside efforts to enlist counsel in criminal activity, we
cannot agree that an individual should be prosecuted and punished using the
39
Fourth, the sort of words or syntax that might alert a court to legal versus
nonlegal purposes in many communications simply has no application in the typical
court-appointed criminal case. In the corporate setting, there is an entire cottage
industry that offers advice to paying clients and their attorneys on how to properly
invoke and maintain attorney-client privilege. 25 But it is unrealistic to expect a
person with court-appointed counsel to follow such formalistic rules in order to
benefit from the privilege. And yet that is what the government advocated at oral
argument: when asked if the attorney-client privilege would have protected a
defendant who carefully framed a potential threat as a question to court-appointed
counsel—e.g., the prosecutor is “out to get me, she’s screwing up my life, and I think
that things would go much better for me in this case if I just shot her. So I’m going
to shoot her. What do you think?”—the government responded that such statements
uncensored thoughts and feelings about their case that they have shared with their
counsel.
25
Law firms post checklists to preserve the-attorney-client privilege and
attorney work-product on their websites, warning in-house counsel to, for example,
(1) “[l]abel privileged communications and attorney work product as such. In top
line write ‘Attorney-Client Privileged Communication,’ ‘Confidential’ and/or
‘Attorney Work Product,’ and set it off with capital letters, bold or different font
color,” (2) “[p]reface communications appropriately. In the first line of body of e-
mail, write, ‘I am writing to provide legal advice regarding [X]’ or ‘I am seeking
legal advice regarding [Y],’” (3) “put in-house counsel recipient in the ‘to’ vs. the
‘cc’ line of the communication” when seeking legal advice, and (4) “[w]here
business and legal advice overlap, consider including a preface that the primary
purpose of the communication is to provide legal advice.” https://perma.cc/N232-
TJSS.
40
“would be privileged.” We reject the suggestion that a statement can relate to the
seeking of legal advice only if a defendant has in-house counsel or a lawyer on
retainer ready to assist an individual in phrasing a statement in a particular way or
prefacing the statement with a verbal marker that the statement is meant to elicit
legal advice.
In short, in order for the significant purpose test to have meaning in a court-
appointed criminal defense relationship, it must recognize the institutional and
human realities and constraints of that relationship.
4. Counterarguments from the Dissent and the Government
Our dissenting colleague takes the position that any statement made to counsel
that may be construed as a threat to a third party must fall outside the attorney-client
privilege. Apart from conflating ethical rules regarding disclosure of confidences
with the evidentiary attorney-client privilege, 26 the dissent argues that we should be
26
See supra note 16 (discussing empirical studies about confidentiality). The
dissent also cites to Nix, 475 U.S. 157, an ineffective assistance of counsel case about
confidentiality and disclosure, not the attorney-client evidentiary privilege. Post at
62 n.4. In Nix, the Supreme Court held a defendant did not receive ineffective
assistance of counsel when the attorney dissuaded the defendant from committing
41
guided by the Supreme Court’s reasoning in Trammel v. United States, 445 U.S. 40,
51 (1980), post at 64, a case about limiting spousal privilege. 27 As for the significant
purpose test for attorney-client communications that we apply, the dissent doubles
down on a construction of the test from the business world where retained counsel
may “w[ear] many hats,” United States v. Mett, 178 F.3d 1058, 1062 (9th Cir. 1999),
disregarding that these situations are a world apart from those in which the only basis
for the relationship is a court appointment to fulfill the defendant’s right to counsel
in a criminal case. 28
perjury by warning the defendant that the attorney would tell the judge the defendant
was testifying falsely. See 475 U.S. at 171.
27
Trammel rejected an expansive conception of spousal privilege that had
been historically grounded in the concept of wives as the legal appendage of their
husbands and without independent ability to waive the privilege. 445 U.S. at 44, 52-
53. To the extent it has any application to our analysis, it supports our holding that
evidentiary privileges are not hidebound to their historical contexts and may be
adjusted to accommodate modern realities.
28
Even in this distinct context, the cases cited by the dissent do not parse
attorney-client communications as strictly as the dissent would in this case, i.e.,
sentence by sentence. See Mett, 178 F.3d at 1064-65 (rejecting the government’s
argument for a broad exception to the privilege and applying “communication-by-
communication analysis” by looking at entire formal memoranda containing advice
regarding retirement plan administration); FTC v. Boehringer Ingelheim Pharms.,
Inc., 892 F.3d 1264, 1267-68 (D.C. Cir. 2018) (holding that multiple
communications with in-house counsel “[i]n the corporate context” were protected
as helping to formulate “settlement and antitrust advice”); In re Kellogg Brown &
Root, Inc., 756 F.3d 754, 760 (D.C. Cir. 2014) (holding that communications were
protected when “one of the significant purposes of [a corporate] internal
investigation was to obtain or provide legal advice”).
42
More fundamentally, the dissent shifts focus from the foundational rationale
of the attorney-client privilege—fostering trust between attorney and client—to the
need to preserve individual “autonomy” and “dignity.” Post at 67-69. Specifically,
the dissent argues that we strip criminal defendants of their autonomy and dignity
by failing to hold them accountable for statements that could be construed as threats
spoken to their lawyer. 29 We disagree. In recognizing that criminal defendants have
a need in our adversarial criminal justice system to be able to trust court-appointed
counsel and communicate about the whole of their criminal case, including feelings
of fear and anger, we acknowledge their humanity—an essential component of
according any individual true dignity. 30
29
Given that indigent criminal defendants do not get to choose their lawyers,
but have lawyers appointed for them, the dissent’s assertion that we are “protect[ing]
criminal defendants at the price of denying their autonomy,” quoting Douglas v.
United States, 488 A.2d 121, 144-45 (D.C. 1985), post at 68, is incongruous. The
Appellant in Douglas had retained counsel. Id. at 127. In that context we observed
that we should not “patroniz[e] . . . defendants” and “rob them of their right to choose
freely how to present themselves before the law.” Id. at 144-45. We engage in no
analogous robbery here, but rather recognize the reality of a lack of choice for
individuals with court-appointed counsel and the impact that has on the attorney-
client relationship.
30
In rejecting the dissent’s categorical rule that all statements made to court-
appointed counsel that may be construed as threats fall outside attorney-client
privilege, we do not embrace the opposite categorical rule and hold that all such
statements are protected. Rather, each claim of privilege must still be examined on
its facts and the context in which the relevant statements were made. See infra
Section II.C.
43
For its part, the government argues that we should narrowly construe the
attorney-client privilege to “protect[] only those disclosures necessary to obtain
informed legal advice which might not have been made absent the privilege.” We
are unpersuaded. To begin with, the Supreme Court case the government cites for
the proposition that protected communications must be “necessary” to obtain legal
advice, Fisher v. United States, 425 U.S. 391 (1976), was not about necessity at all.
Id. at 403-04. Rather, it was about whether a client could protect pre-existing, non-
privileged documents from disclosure merely by providing them to an attorney; the
Supreme Court held they could not. Id. In other words, Fisher does not purport to
set a standard for when a communication “relates” to the client’s legal purpose;
instead, it affirms the proposition that a client may not shoehorn a pre-existing,
discoverable document into a protected communication.
The government relies heavily on two appellate decisions from outside this
jurisdiction that (mis)interpret Fisher as imposing a “necessity” requirement. The
first is United States v. Ivers, 967 F.3d 709, 716-17 (8th Cir. 2020) (holding that a
client’s “tirade” at the end of a phone call with his court-appointed attorneys,
wherein the client threatened to harm a judge, could be separated from the remainder
of the privileged call and was thus not protected by attorney-client privilege); the
other is United States v. Alexander, 287 F.3d 811, 815-816 (9th Cir. 2002) (holding
44
that an appellant’s threats to kill a number of individuals, which he communicated
to his attorney during various phone and mail conversations, were not protected by
attorney-client privilege), abrogated on other grounds by United States v. Plouffe,
445 F.3d 1126 (9th Cir. 2006). But, as commentators have acknowledged, the
approach that the Eighth and Ninth Circuits have adopted does violence to the very
core of the attorney-client privilege:
Testing for Fisher necessity in a segmented, utterance-by-
utterance manner (e.g., was that particular client sentence
in search for legal advice?) could hollow out the privilege
entirely. If Ivers finds a broad following among the
federal courts, attorneys may need to pre-caution their
clients that over-sharing in an immoderate way during
their confidential conversations could cost them the
privilege. The resulting negative impact on the attorney-
client relationship is difficult to overstate.
Rice, § 5:21 (citations omitted). We cannot endorse an approach so antithetical to
the motivating concern behind the attorney-client privilege, especially in the special
context of court-appointed counsel for criminal defendants. 31
31
Other decisions cited by the government and the dissent, post at 57-60, fail
to persuade us that we should adopt the government’s necessity requirement or the
dissent’s proposal to categorically carve out from attorney-client privilege arguably
threatening statements communicated to counsel. A number of these cases are not
on point because, for instance, they address whether an attorney-client relationship
even exists; apply the crime-fraud exception that has not been invoked in this case;
or analyze waiver of the privilege, which likewise is not an issue before us. See,
e.g., State v. Hansen, 862 P.2d 117, 121-22 (Wash. 1993) (en banc) (no attorney-
client relationship and secondarily the crime-fraud exception); Edmund J. Flynn Co.
v. LaVay, 431 A.2d 543 (D.C. 1981) (waiver); Wender v. United Servs. Auto. Ass’n,
45
C. Application of the Significant Purpose Test to These Facts
The trial court in this case concluded that Mr. Moore’s statements to Mr.
Harvey in which he threatened the AAG who was prosecuting him for contempt
were not protected by the attorney-client privilege because Mr. Moore was not
seeking legal advice and because his expressions of anger were not related to
obtaining legal advice. This ruling misunderstands the basic dynamic of the
relationship between a criminal defendant and their court-appointed counsel and too
narrowly construes statements that “relate[]” to the provision of “legal advice”
within that relationship, In re PDS, 821 A.2d at 902, in a way that cannot be
reconciled with the significant purpose test we describe above.
Mr. Moore first made the remarks about the AAG that so alarmed his court-
434 A.2d 1372 (D.C. 1981) (same). An overlapping group have no precedential
value in their own jurisdictions because they are either unpublished or are trial court
rulings. And those that are actually on point are thinly reasoned and reflect a narrow
conception of the privilege that we conclude is inimical to any trusting relationship
between court-appointed counsel and a criminal defendant. See, e.g., Hopkinson v.
State, 632 P.2d 79, 112, 115 (Wyo. 1981) (making a conclusory statement about
whether the privilege would apply to threats after citing Fisher without analysis in
the context of a claim about prejudicial error from a prosecutor’s opening statement);
Jackson v. State, 293 S.W. 539, 540 (Tenn. 1927) (appearing to hold broadly that
any statement about a “contemplated crime” is not protected by attorney-client
privilege).
46
appointed counsel on April 12, 2018. It was the middle of a trial that had spanned
months, and Mr. Moore was standing just outside the courtroom. Like so many
people in his position, he was “agitated” and “angry” about his circumstances, in
particular the possibility that the AAG prosecuting his case might persuade the court
to put him back on a GPS monitor. 32 And like so many individuals facing a loss of
liberty, he made a series of “unguarded and ill-advised” remarks, In re PDS, 831
A.2d at 901, to the lawyer whose sole job was to represent him, about the AAG who
he (not unreasonably) perceived to be his adversary. Having disabused ourselves of
the notion that only an indigent client’s deliberate, carefully crafted requests for
advice on discrete points of law can be said to “relate” to the legal purpose for which
the client has been appointed counsel, we look to whether Mr. Moore’s significant
purpose in speaking to Mr. Harvey was to obtain legal assistance. Undoubtedly, it
was. His central concern was the government’s effort to alter his conditions of
release and how such an alteration might have an adverse impact on his life. And at
least at the outset, Mr. Harvey himself recognized that Mr. Moore’s comments
necessitated his counsel: he tried to explain that the AAG advocating for detaining
32
One also hopes Mr. Harvey was aware of the other stressors contributing
to his client’s state of mind: Mr. Moore was litigating a divorce and the custody
arrangement for his children, was experiencing job instability, and had recently lost
a parent. See the discussion of collateral and ancillary issues supra Section II.B.3.
47
or monitoring him was doing her job and that Mr. Moore’s anger was
counterproductive. Although it was arguably counterproductive to tell Mr. Moore it
was “just silly on his part to be angry,” the fact that Mr. Harvey was ineffective in
counseling his client and failed to help him regain his composure and perspective 33
did not make Mr. Moore’s continuing and intensifying expressions of anger,
manifesting in his threat to shoot the AAG, unrelated to Mr. Harvey’s court
appointment.
For privilege purposes, the conversation Mr. Moore had with Mr. Harvey on
June 29, 2018, was a repeat of April 12. Late in the afternoon that Friday, the AAG
successfully argued for Mr. Moore to be placed on GPS monitoring, and the court
informed Mr. Moore that he would have to return to court the following Monday.
Following the hearing, Mr. Moore, upset that he might lose his job, went outside to
speak with his lawyer and made yet another set of “unguarded and ill-advised”
remarks about the AAG. See In re PDS, 831 A.2d at 901. These remarks too were
within Mr. Moore’s significant purpose to obtain legal assistance and protected by
attorney-client privilege, notwithstanding the fact that on this occasion Mr. Harvey
did not even attempt to counsel Mr. Moore about his concerns and instead
33
Mr. Harvey did not appear to consider this part of his job. See supra note
2. Instead, his immediate reaction was to seek to withdraw. See supra Section I.A.
48
immediately went to the judge to renew his motion to withdraw. Applying the
privilege to this scenario recognizes that this was a missed opportunity for
counseling—whereas not applying privilege would undermine the possibility that
court-appointed counsel could or would forge the relationship to make such
counseling possible. 34
Having determined that the privilege applied to Mr. Moore’s and Mr.
Harvey’s hallway conversation on both April 12 and June 29, we also observe that
no exception applied to take Mr. Moore’s statements outside of the privilege. In
particular, the crime-fraud exception to the attorney-client privilege did not apply
and the government has never argued otherwise. As noted above, “[i]t is
fundamental that th[is] exception applies only to communications made to further
ongoing or future crimes.” 35 In re PDS, 831 A.2d at 906 (citations omitted).
34
It seems beyond dispute that the best outcome for the “observance of law
and the administration of justice,” In re PDS, 831 A.2d at 900, would have been for
Mr. Harvey to convince Mr. Moore that harming the AAG would not serve his
interests—not to tell Mr. Moore to “keep [his plans to shoot the AAG] to [him]self.”
35
The government appears to argue in a footnote in its brief that, because Mr.
Moore’s threats crime was “completed” upon uttering his statements to Mr. Harvey,
these statements fall outside the privilege. The government cites no supporting
authority for this proposition. Moreover, as explained above, supra Section II.B.1,
the attorney-client privilege squarely applies to a client’s statements about
completed crimes. Thus it is unclear why the fact that a statement itself arguably
49
Nothing in the record suggests that Mr. Moore “use[d] [Mr. Harvey’s] advice or
services to pursue a crime or fraud, or [that] the attorney-client communication itself
materially advance[d] a crime or fraud.” Id. at 902. 36
The dissent argues that “[t]here still is no reason to hold that Mr. Harvey’s
testimony about the second set of threats Mr. Moore uttered against the AAG . . .
was inadmissible” because by this point “[a]ny trust that Mr. Moore might have had
earlier that his relationship with Mr. Harvey was entirely confidential (such that
nothing he said to Mr. Harvey could ever result in prejudice) was removed once Mr.
Harvey” “caution[ed]” Mr. Moore that he would “believe” Mr. Moore if he “ever
use[d] this kind of language” again. Post at 69-70; see also id. at 62 n.4. Such a
“caution” is hardly the equivalent of a warning that if Mr. Moore made similar
statements, Mr. Harvey would feel himself free to testify against Mr. Moore in a
constitutes a completed crime as soon as it is uttered would put it outside the
privilege.
36
In a confusing discussion of In re PDS, the government points out our
holding that the false witness statements in that case were unprotected by attorney-
client privilege. The government is correct that, in addition to holding that the
client’s communications with counsel about prior criminal activity were privileged,
we held that any witness statements constituting evidence of the charged crime of
obstruction, which had been given to counsel, were not. 831 A.2d at 910-11. But
this second holding concerning statements by third parties bears no resemblance to
Mr. Moore’s statements to counsel here, and as a result that part of the analysis is
irrelevant.
50
criminal case. But even if Mr. Harvey had given such an express warning, he had
no authority to limit the scope of the privilege, as the privilege belongs to and may
only be waived by the client. See 8 Wigmore on Evidence § 2321, at 629.
D. Assessment of Harm
Having concluded that the trial court erred in ruling that the attorney-client
privilege did not apply to Mr. Moore’s statements to Mr. Harvey, and that Mr.
Harney’s testimony about those statements should not have been admitted at trial,
we consider whether reversal is required. As Mr. Moore does not allege any
constitutional error, we apply the harmless error standard set forth by the Supreme
Court in Kotteakos v. United States, 328 U.S. 750, 764-65 (1946), and ask whether
we can say “with fair assurance, after pondering all that happened, without stripping
away the erroneous action from the whole, that the judgment was not substantially
swayed by the error.” Andrews v. United States, 922 A.2d 449, 458 (D.C. 2007)
(quoting Kotteakos, 328 U.S. at 765). There is only one way to answer this question.
Mr. Harvey was the only witness who actually heard Mr. Moore’s statements, and
those alleged statements formed the entire basis of the government’s charges.
Without Mr. Harvey’s testimony, no jury could have found Mr. Moore guilty of any
of the charged conduct.
51
III. Conclusion
Mr. Moore makes additional arguments on appeal challenging the court’s
instructions to the jury and arguing that the court erred by not allowing him to “meet
with his attorney after the close of the government’s case to make a final decision
whether to testify.” Because we hold that it was error for the court to admit Mr.
Harvey’s testimony about his conversations with Mr. Moore, and it appears highly
unlikely that either the jury instructions or Mr. Moore’s decision about whether to
testify would reflect the same considerations in the event of a retrial, we do not
address these claims. See Beard v. United States, 535 A.2d 1373, 1377 n.4 (D.C.
1988).
For the above reasons, we reverse the trial court’s evidentiary determination
and vacate Mr. Moore’s conviction.
So ordered.
THOMPSON, Senior Judge, dissenting in part: I agree with my colleagues that
the evidence was legally sufficient to support Mr. Moore’s convictions of
threatening a public official and obstructing justice. However, I cannot agree with
52
my colleagues’ quite disturbing conclusion that the testimony on which his
convictions rest was inadmissible because protected by the attorney-client privilege.
This court’s case law endorses the classic articulation of the attorney-client
privilege:
(1) [W]here legal advice of any kind is sought (2) from a
professional legal advisor in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at [the client’s]
instance permanently protected (7) from disclosure by [the
client] or by the legal adviser, (8) except the protection be
waived.
Jones v. United States, 828 A.2d 169, 175 (D.C. 2003) (quoting 8 John Henry
Wigmore, Evidence in Trials at Common Law § 2292 (John T. McNaughton rev.
1961)). “The privilege recognizes that sound legal advice or advocacy serves public
ends and that such advice or advocacy depends upon the lawyer’s being fully
informed by the client.” Upjohn Co. v. United States, 449 U.S. 383, 389 (1981).
The privilege “rests on the need for the advocate and counselor to know all that
relates to the client’s reasons for seeking representation if the professional mission
is to be carried out.” Id. (quoting Trammel v. United States, 445 U.S. 40, 51 (1980));
see also In re Pub. Def. Serv., 831 A.2d 890, 900 (D.C. 2003) (“Lawyers cannot give
53
sound legal advice without being apprised of all pertinent facts, no matter how
embarrassing or inculpating these facts may be.” (internal quotation marks omitted)).
The foregoing should suffice to show why the Superior Court did not err in
ruling that the threats Mr. Moore uttered to his counsel Mr. Harvey — the bases for
his convictions of obstruction of justice and threats in the instant case — were not
covered by the attorney-client privilege. Referring to the Assistant Attorney General
(“AAG”) who was prosecuting him for contempt for violation of a civil protection
order (“CPO”), Mr. Moore told his counsel on April 12, 2018, “I’ll shoot that bitch.”
On June 29, 2018, referring again to the AAG, Mr. Moore repeatedly told his
counsel, “If I lose my job, I’m going to bust a cap in this bitch [making a hand gesture
simulating a gun].” As Mr. Moore was the party asserting the attorney-client
privilege to prevent Mr. Harvey from testifying to the threats uttered by Mr. Moore,
Mr. Moore had the burden of showing that the privilege applied. See Jones, 828
A.2d at 175. That is, Mr. Moore had the burden of establishing that “the statements
at issue were made for the purpose of facilitating the rendering of legal services to
the client.” United States v. Ivers, 967 F.3d 709, 715 (8th Cir. 2020) (internal
quotation marks omitted).
54
Mr. Moore did not meet that burden in advancing his motion in limine to
preclude Mr. Harvey from testifying to the threats, and he has not met that burden
in his briefs in this appeal. He does not claim that he was seeking his counsel’s
advice when he made the threats (indeed he denies that he made the statements), and
nothing in the record indicates that any of his utterances of the threatening statements
related in any way to the purpose of seeking legal advice from Mr. Harvey. Mr.
Moore did not merely make an “unguarded and ill-advised suggestion[] to [his]
lawyer[]” for the lawyer to evaluate and veto. In re Pub. Def. Serv., 831 A.2d at
901. Nor did any of the threats impart information that Mr. Harvey needed to know
to advise or advocate for Mr. Moore in his contempt case. To the extent that Mr.
Harvey needed to understand how profoundly upset and “frustrated” Mr. Moore was
that the AAG had urged the CPO court to require Mr. Moore to resume wearing a
GPS ankle device (which triggered Mr. Moore’s anger and threats to shoot the
AAG), Mr. Moore had already conveyed his anger when he said to Mr. Harvey,
“Fuck that bitch.” 1 No one disputes that the threats were tangentially related to Mr.
Moore’s legal matter (in that Mr. Moore presumably would not have threatened the
prosecutor had she not been prosecuting him), but neither Mr. Moore nor my
1
That outburst caused Mr. Harvey to explain to Mr. Moore that the AAG was
only doing her job and to assure Mr. Moore that it was his (Mr. Harvey’s) job to
“ask the judge to remove” the ankle device.
55
colleagues in the majority have identified any plausible way in which the threats
were related to the purpose for which Mr. Moore sought legal advice or for the
purpose of facilitating the rendering of legal services.
The motions judge analyzed the context correctly:
[T]he nature of the communication in question, here
threatening the prosecutor and stating repeatedly what he’s
going to do, is not related to the legal advice about how to
proceed at trial. It’s not related to trial strategy. It’s not
related to defenses. It is not related to cross examination
of witnesses. It’s not related to anything except the desire
to kill the prosecutor and that is not a legal purpose in the
sense of seeking legal advice and, therefore, it is not a
privileged communication.
Moreover, as the motions judge recognized, it is doubtful at best that the second set
of threats was made in confidence; according to Mr. Harvey’s grand jury testimony,
after the first incident, Mr. Harvey warned Mr. Moore that if Mr. Moore ever
threatened the AAG again, Mr. Harvey would tell the court what he said. 2 Further,
2
See, e.g., Diversified Grp., Inc. v. Daugerdas, 139 F. Supp. 2d 445, 457
(S.D.N.Y. 2001) (“[T]he [attorney-client] privilege is limited to those
communications which were either expressly made confidential, or which the client
could reasonably believe under the circumstances would be understood by the
attorney as such.”). This is not to dispute that the attorney-client privilege belongs
to the client, not the attorney, see ante, at 49, but only to say that a communication
that was not made in confidence does not fall within the scope of the privilege.
56
protecting Mr. Moore’s threats from disclosure as trial evidence does not serve the
purpose of the attorney-client privilege to “promote broader public interests in the
observance of law and administration of justice.” Wender v. United Servs. Auto.
Ass’n, 434 A.2d 1372, 1373 (D.C. 1981). To the contrary, a holding that permits an
accused to prevent adverse testimony by his prior counsel about a threat uttered in
counsel’s presence works against “the need for probative evidence in the
administration of criminal justice.” Trammel, 445 U.S. at 51. 3
3
My colleagues repeat the assumption, long reflected in case law, that the
attorney-client privilege encourages criminal defendants to speak candidly with their
attorneys. Ante, at 23-27. But commentators have found that “empirical evidence
does not support the assumption that clients rely on a guarantee of absolute
confidentiality when they decide whether to be candid with their lawyers”; that “little
or no evidence exists to substantiate the presumption that clients would not confide
in lawyers without the guarantee of absolute confidentiality”; and that “[v]ery few
studies have investigated what clients actually know about confidentiality
exceptions and the effect this knowledge has on representation.” Elisia M. Klinka
& Russell G. Pearce, Confidentiality Explained: The Dialogue Approach to
Discussing Confidentiality with Clients, 48 SAN DIEGO L. REV. 157, 158, 171 (2011);
see also id. at 174 (noting survey findings that “an explanation of confidentiality that
acknowledged specific exceptions” was “roughly as effective as the pledge of
absolute confidentiality” for purposes both of effective representation and gaining
necessary information). My colleagues say further that the relationship of trust that
the attorney-client privilege is meant to foster and protect is a “critical means of
ensuring a meaningful attorney-client relationship.” Ante, at 31. But commentators
have suggested that the key to promoting trusting relationships between indigent
defendants and their attorneys lies elsewhere. See generally Kenneth P. Troccoli, “I
Want a Black Lawyer to Represent Me”: Addressing a Black Defendant’s Concerns
with Being Assigned a White Court-Appointed Lawyer, 20 LAW & INEQ. 1, 48 (2002)
(urging that fostering trusting relationships between indigent defendants and counsel
requires giving the defendants a greater role in selecting who will represent them);
57
I would hold that the attorney-client privilege did not preclude Mr. Harvey
from giving testimony before the grand jury and at trial about the threats uttered by
Mr. Moore while he was Mr. Harvey’s client. Numerous federal and state appellate
courts, including the Eighth and Ninth Circuits, have reached analogous conclusions
on facts similar to those involved here. See, e.g., Ivers, 967 F.3d at 714-16
(defendant’s threats to kill a judge, made during conversation with his attorneys
pertaining to his civil case, were admissible at trial because “[t]hreats of violence are
not statements that fall under the scope of the attorney-client privilege”); United
States v. Alexander, 287 F.3d 811, 815-17 (9th Cir. 2002) (defendant’s statements
to his court-appointed attorney threatening violence against the prosecutor in his
mail- and wire-fraud case “were clearly not communications in order to obtain legal
advice” and thus the attorney did not violate the attorney-client privilege by
testifying about the threats before the grand jury and at trial); United States v.
Thomson, Nos. 94-30083 and 94-30085, 1995 U.S. App. LEXIS 4876, at *3 (9th Cir.
Mar. 13, 1995) (no error in denying motion to suppress attorney’s testimony about
statements Thomson made during a phone call with his attorneys, in which Thomson
threatened the judge presiding over his criminal case and the judge’s family; the
Fred C. Zacharias, Rethinking Confidentiality, 74 IOWA L. REV. 351, 386 (1989)
(concluding that survey results “suggest that the general sense of trust in attorneys
as professionals — rather than particularly strict confidentiality rules — is what
fosters client candor”).
58
court had “absolutely no difficulty concluding” that the statements were not
protected by the attorney-client privilege because the statements “clearly were not
made for the purpose of obtaining legal advice”); State v. Hansen, 862 P.2d 117, 121
(Wash. 1993) (in a phone call with an attorney whom Hansen consulted about
representing him in a civil suit, Hansen made the threat “to get a gun and blow . . .
away” the judge [in Hansen’s felony case], the prosecutor, and the public defender;
the court explained that even “[i]f an attorney-client relationship could have been
found to exist” at the time the threat was made, “the privilege would still not apply”
because “[t]he attorney-client privilege is not applicable to . . . conversations
regarding the [client’s] contemplation of a future crime”); Hopkinson v. State, 632
P.2d 79, 115-16 (Wyo. 1981) (reasoning that it was error to exclude attorney’s
testimony about a threat uttered by the client, because “[w]e cannot imagine a threat
of injury made by a client toward the family and property of an attorney as being
privileged and within those communications protected”); Jackson v. State, 293 S.W.
539, 540 (Tenn. 1927) (finding no error in admission of attorney’s testimony because
“threats made by a client against the life of a person during a professional
consultation with his attorney are not privileged”; “[i]t would be monstrous to hold
. . . that the lips of the attorney would be sealed, when the fact might become
important to the ends of justice in the prosecution of crime. . . . We presume the rule
has never been extended so far, nor will it be.”); cf. Hodgson Russ, LLP v. Trube,
59
867 So. 2d 1246, 1247, 1248 (Fla. Dist. Ct. App. 2004) (where client uttered to his
attorney a threat to kill the client’s sister/adversary if the case was not resolved in
his favor, the threat “was extraneous and was not a communication incident or
necessary to obtaining legal advice” and thus was not privileged and could be
described in the attorney’s interrogatory response in wrongful death action).
Numerous trial courts have similarly allowed attorneys to testify about threats
made by their clients over objections that the testimony would violate the attorney-
client privilege. See, e.g., United States v. Stafford, No. 17-20037, 2017 U.S. Dist.
LEXIS 71835, at *2, *6-7 (E.D. Mich., May 11, 2017) (denying defendant’s motion
to suppress statement he made to his social security disability attorney threatening
to “put a bullet in [the] head” of the social security administrative law judge who
denied his claim, because the defendant failed to demonstrate that his statements
were made in pursuit of legal advice; reasoning that the statements “did not inquire
or relate to legal avenues that might be available to [defendant] and his attorney,”
defendant “was not inquiring about the impact of the ALJ’s decision, his appellate
rights, or alternative legal remedies available to him”); United States v Jason, No.
09-CR-87-LRR, 2010 U.S. Dist. LEXIS 25437, at *4 (N.D. Iowa Mar. 18, 2010)
(permitting defendant’s former attorney to testify about a threatening letter the
defendant sent while the attorney-client relationship was intact, because the
60
statements in the letter were not made for the purpose of seeking legal advice);
United States v. Sabri, 973 F. Supp. 134, 140-41 (W.D.N.Y. 1996) (concluding that
defendant’s statements to his immigration attorney threatening to kill 50 to 100
people to protest delays in his immigration proceedings were not privileged, and
would not be suppressed, because the statements were not related to the legal advice
sought by defendant from the attorney, or to “advice in connection with the
immigration proceedings concerning defendant’s alien status and/or his ability to
leave the country to visit his dying father,” and were not shown to be “relevant or
material to the issues involving the defendant’s immigration status”); see also
D’Amario v. United States, 403 F. Supp. 2d 361, 373 (D.N.J. 2005) (recounting that
attorney, who had represented D’Amario in a felon-in-possession case, was
permitted to testify at D’Amario’s trial on charges of threatening a federal judge,
about a letter that D’Amario had sent the attorney, in which he threatened to shoot
the judge involved in his earlier case). These cases, from across the country, are not
precedential, but, like the appellate decisions cited above, they demonstrate just how
far from the mainstream my colleagues are in their interpretation of the attorney-
client privilege as it applies to communications by indigent criminal defendants.
These cases also show that the Eighth and Ninth Circuit rulings cited above are not
outliers.
61
As support for their novel interpretation under which the attorney-client
privilege protects any communication that an indigent criminal defendant makes to
their attorney (save those that fall under the so-called crime-fraud exception), my
colleagues in the majority cite State v. Boatwright, 401 P.3d 657 (Kan. App. 2017).
Ante, at 35. In Boatwright, the Kansas Supreme Court held that the defendant’s
threat to kill his former fiancée, uttered to the defendant’s attorney, was privileged
and thus not admissible into evidence. The court remarked that a different
conclusion would “call[] for the piecemealing of attorney-client communications
and would fundamentally undermine the attorney-client relationship.” Id. at 664.
Notably, however, the Kansas court was applying a Kansas statute, Kan. Stat. Ann.
§ 60-426(a) (Supp. 2016), under which the attorney-client privilege applies to
“communications made in the course of [a] relationship” in which legal advice is
sought from a professional legal advisor in his or her capacity as such. See id. That
articulation of the privilege does not comport with the law in our jurisdiction, as
described in Jones and other cases, or with the Wigmore formulation. Our case law
requires that to be protected by the attorney-client privilege, a communication must
“relat[e] to th[e] purpose” of seeking legal advice. Jones, 828 A.2d at 175. Thus,
Boatwright does not support the court’s holding in this case.
62
My colleagues in the majority also cite Purcell v. District Attorney for the
Suffolk District, 676 N.E.2d 436 (Mass. 1997), as support for the expansive attorney-
client privilege they have created. In Purcell, the Massachusetts Supreme Judicial
Court considered a scenario in which the client told his attorney about “his intention
to commit arson.” Id. at 441. The court instructed that the attorney would not be
permitted to testify about the conversation. The court reasoned that “[u]nless the
crime-fraud exception applies [as it does where a client informs their attorney of the
client’s intention to commit a crime, for the purpose of receiving legal advice or
assistance in furtherance of criminal conduct], the attorney-client privilege should
apply to communications concerning possible future, as well as past, criminal
conduct[.]” Id. at 441. 4 The court explained that this is because “an informed lawyer
4
But see Nix v. Whiteside, 475 U.S. 157, 174 (1986) (“A defendant who
informed his counsel that he was arranging to bribe or threaten witnesses or members
of the jury would have no ‘right’ to insist on counsel’s . . . silence. . . . An attorney’s
duty of confidentiality, which totally covers the client’s admission of guilt, does not
extend to a client’s announced plans to engage in future criminal conduct.”).
By citing Nix and other materials pertaining to ethical rules, I am not
confusing the ethical rules regarding disclosure of confidences and the attorney-
client privilege; rather, I show that communications about a plan to engage in a future
crime are not confidential, and thus cannot be said to have been made in confidence
(i.e., with a legitimate expectation of confidentiality) and to fall within the scope of
attorney-client privilege. See Cobell v. Norton, 377 F. Supp. 2d 4, 11 (D.D.C. 2005)
(“[A]ny expectation of secrecy must be reasonable in order to support a claim of
privilege.” (citing United States v. Robinson, 121 F.3d 971, 976 (5th Cir. 1997)
(“The assertor of the [attorney-client] privilege must have [had] a reasonable
expectation of confidentiality[.]”))). The statement in Purcell that “[t]he fact that
63
may be able to dissuade the client from improper future conduct[.]” Purcell does
not support the result the court has reached in the instant case, where, as we have
noted, Mr. Moore did not merely suggest or describe an ill-advised course of action
for the attorney to evaluate. Cf. In re Pub. Def. Serv., 831 A.2d at 901. He did not
merely share with his counsel “uncensored thoughts and feelings about [his] case.”
Ante, note 24. Rather, and as the government argues, he uttered a completed threat
against the AAG, thereby committing a crime in Mr. Harvey’s presence. Newman
v. State, 863 A.2d 321 (Md. 2004), is distinguishable on the same basis, as it involved
testimony, by the attorney who represented the client in a divorce and custody case,
not about completed threats as we are concerned with here, but about a conspiratorial
discussion, between the client and a friend during a meeting with the attorney, about
a plan to kill the client’s child or children and cast blame on the client’s husband so
that he would be jailed. 5 Id. at 324.
the disciplinary code permitted [the attorney in] Purcell to make the disclosure tells
us nothing about the admissibility of the information that Purcell disclosed” (which
cites as authority a Florida appellate case that relied on the Florida Evidence Code),
676 N.E.2d at 438, is unpersuasive.
5
The attorney’s testimony “established the possible conspiracy [to commit
first-degree murder]” of which the jury eventually convicted the client. 863 A.2d at
327, 337. The Newman court’s analysis focused on whether the crime-fraud
exception applied and the significance of the fact that the client’s statements were
made in the presence of the friend, but did not analyze whether the communication
was related to the purpose of seeking legal advice. Id. at 333-37.
64
Mr. Moore argues that there is no meaningful difference between the threats
uttered by Mr. Moore and the plans discussed in Purcell and Newman, but we should
be guided by the Supreme Court’s reasoning in Trammel and reject that argument.
In Trammel, the Supreme Court reasoned that when the testimony at issue is about
a crime that was witnessed by a party to a confidential relationship (there, marriage),
rather than about a mere communication between the parties to that confidential
relationship, a holding that the witness is precluded from testifying about the crime
would work against “the need for probative evidence in the administration of
criminal justice.” Trammel, 445 U.S. at 51 (holding that unlike the marital
communications privilege, which protects information privately disclosed between
husband and wife in the confidence of the marital relationship, the spousal
testimonial privilege may be asserted by the witness-spouse only). Just as the
Supreme Court did in Trammel in holding that the witness spouse could elect to
testify about her husband’s crime, we should hold that the trial court did not err in
permitting Mr. Harvey to testify about the threats made by his client Mr. Moore, to
which Mr. Harvey was an ear-witness.
My colleagues in the majority do not seriously claim that Mr. Moore’s threats
fall within the bounds of the attorney-client privilege as this court’s case law has
conceived it. Instead, they conclude that the privilege “logically applies more
65
expansively in the [indigent criminal defense] context.” Ante, at 22. That more
expansive application entails “a strong presumption that, any time [an indigent
criminal defendant] speaks to their court-appointed lawyer, a significant purpose of
that communication is to receive legal advice in the case for which the lawyer has
been appointed to represent them,” ante, at 36, as if indigent criminal defendants do
not have the same range of motives for what they say in conversation as other people
may have. 6 Yet privileges, as “exceptions to the demand for every man’s evidence[,]
6
The rationale for development of the “significant purpose” test that my
colleagues attempt to apply is avoidance of the difficulty of determining, in a
business context, which, among multiple motives, constituted the one primary or one
predominant purpose of a client’s allegedly privileged communication to its lawyer.
See FTC v. Boehringer Ingelheim Pharms., Inc., 892 F.3d 1264, 1267 (D.C. Cir.
2018) (recognizing that “[t]he application of the attorney-client privilege can
become more complicated when a communication has multiple purposes — in
particular, a legal purpose and a business purpose” (citing 1 Restatement (Third) of
the Law Governing Lawyers § 72, Reporter’s Note, at 554 (2000))); In re Kellogg
Brown & Root, Inc., 756 F.3d 754, 760 (D.C. Cir. 2014) (“It is . . . not correct for a
court to try to find the one primary purpose in cases where a given communication
plainly has multiple purposes. Rather, it is clearer, more precise, and more
predictable to articulate the test as follows: Was obtaining or providing legal advice
a primary purpose of the communication, meaning one of the significant purposes
of the communication?”). As the foregoing citations reflect, determining whether
attorney-client privilege applies requires a “communication-by-communication
analysis,” and it is “the nature of the particular attorney-client communication that
is dispositive.” United States v. Mett, 178 F.3d 1058, 1065 (9th Cir. 1999).
My colleagues frame the issue as whether a significant purpose of the
relationship between an indigent criminal defendant and his court-appointed counsel
is to obtain legal advice, but the correct question is a whether a purpose of the
particular communication in issue was to obtain legal advice. Here, there has been
66
are not lightly created nor expansively construed, for they are in derogation of the
search for truth.” United States v. Nixon, 418 U.S. 683, 710 (1974). Accordingly,
privileges are to be “strictly construed and accepted only to the very limited extent
that permitting a refusal to testify or excluding relevant evidence has a public good
transcending the normally predominant principle of utilizing all rational means for
ascertaining truth.” Trammel, 445 U.S. at 50 (internal quotation marks omitted); see
also Jones, 828 A.2d at 174 (recognizing that the privilege is construed “narrowly
to protect only those purposes which it serves”). I am at a loss to discern what public
good comes from a ruling that permits a client who has uttered threats like Mr.
Moore did to escape prosecution or punishment because (as far as the record reflects)
he uttered them only to his court-appointed counsel. 7
Far from any public good flowing from my colleagues’ conclusion, it would
seem to follow from the analysis in the majority opinion that indigent criminal
no showing that the threats Mr. Moore uttered had, as even one of multiple purposes,
the purpose of obtaining legal advice.
7
Nor does the record give us any reason to think that a holding that Mr.
Moore’s threats against the prosecutor were not protected would undermine a large
number of attorney-client relationships. Mr. Harvey, who told the court that he had
been taking court-appointments to represent defendants in criminal cases for 30
years, further testified that in his experience it was unusual for a client to threaten a
prosecutor and that he had never before reported such a threat to the court.
67
defendants can threaten their lawyers, witnesses, or court officials with impunity as
long as they do so in private conversation with appointed counsel. Under the court’s
holding today, it appears that no evidentiary use could be made of a statement such
as the following uttered by the indigent defendant to their court-appointed lawyer:
“You are doing a terrible job for me. I know where you and your family live, and I
am going to torture and kill you all.” Similarly, if a court-appointed defense
attorney disclosed to the court that a defendant who was on pre-trial release had
repeatedly threatened to kill the complaining witness (as Rule 1.6 of the Rules of
Professional Conduct would permit the attorney to do), that information could not
be used to revoke the defendant’s release. These results would be alarming. My
colleagues disclaim an intent to hold categorically that all threats uttered by an
indigent criminal defendant to court-appointed counsel are protected by the
expansive attorney-client privilege the majority opinion creates, see ante at note 30,
but the opinion does not explain what facts and context different from those involved
in this case would call for a different conclusion.
My colleagues’ expansive application of the attorney-client privilege in the
context of indigent criminal defendants appears to reflect an assumption that
indigent criminal defendants, who as they note often are facing traumatic and life-
altering situations, ante, at 37-38, generally are unable to abide by the standards that
68
apply to other members of society, including other criminal defendants. In my view,
such an assumption is patronizing and demeaning, because it fails to acknowledge
the autonomy and agency of Mr. Moore and indigent criminal defendants more
generally. 8 This court has already decided that we may not protect criminal
defendants at the price of denying their autonomy. See Douglas v. United States,
488 A.2d 121, 144-45 (D.C. 1985) (“A trial court . . . should not interfere with a
defendant’s choice [to retain his counsel who is burdened by a conflict of interest
known to the client] solely for the purpose of protecting the defendant’s right to
effective assistance of counsel” “even when disqualification would further the
court’s perception of the defendant’s best interest,” because “[a] contrary holding
would be patronizing toward defendants and would rob them of their right to choose
freely how to present themselves before the law.”). The same rule should apply here.
We should accord indigent criminal defendants “the dignity associated with
8
And beyond that, the court’s analysis proves too much. The court cites the
array of collateral and ancillary issues that plague indigent criminal defendants, such
as adverse immigration consequences, loss of parental rights, loss of housing, seizure
of property, loss of employment, and other disruptions to personal and family life.
Ante, at 38. To the list the court might add, in the case of black and brown
defendants, the systemic racism and race-related micro-aggressions that continue to
take their tolls. There can be no doubt that real-life problems of these kinds burden
many criminal defendants, to the discredit of all of us. But if these problems justify
expanding the attorney-client privilege to protect indigent criminal defendants from
convictions based on threats they utter in the presence of their counsel, why do these
problems not also protect these defendants from prosecution and punishment based
on other crimes that are similarly traceable to the defendants’ difficult life
circumstances?
69
recognition as . . . whole human being[s],” Trammel, 445 U.S. at 52, who are more
than their poverty and accused status; who often are sophisticated and smart; and
who, we should presume, are capable of conforming their conduct to the law in the
context of an attorney-client relationship. We do not accord them the respect and
dignity they are due as human beings when we hold — as the court effectively does
today — that it is too much to ask of them that they refrain from uttering threats
when communicating with counsel, and when we dictate that they may not be held
accountable if that requires permitting counsel to give evidence about the threats. 9
All that said, let us assume arguendo that the expansive attorney-client
privilege the court now affords to indigent criminal defendants is necessary to foster
a relationship of trust between the client and his court-appointed attorney and to
encourage full and frank communications between the two (a rationale that I will
refer to as the “safe-space rationale”). There still is no reason to hold that Mr.
Harvey’s testimony about the second set of threats Mr. Moore uttered against the
9
I appreciate that the court’s ruling is intended to afford expansive protection
to indigent criminal defendants. But as another court once put it, “No doubt there
are occasions when benefits are conferred by those who patronize, but the benefits
conferred are at the expense of . . . dignity . . . . Personal dignity is not honored but
diminished when the capacity to commit one’s self is implicitly denied.” United
States v. Martinez, 883 F.2d 750, 761 (9th Cir. 1989).
70
AAG, on June 29, 2018, was inadmissible. Any trust that Mr. Moore might have
had earlier that his relationship with Mr. Harvey was entirely confidential (such that
nothing he said to Mr. Harvey could ever result in prejudice) was removed once Mr.
Harvey gave Mr. Moore the following caution on April 12, 2018:
You will never, ever use this kind of language with me
about anybody because, from this point forward, I’m
going to believe you. So if you decide you want to go
shoot somebody, you need to keep that to yourself and
don’t make me a part of it. . . . [I]f you can agree to those
terms, I can continue to represent you in this case[.]
That warning let Mr. Moore know that, by uttering additional threats on June 29, he
could well be prejudiced by his counsel’s resultant withdrawal from representing
him. 10 Accordingly, the safe-space rationale cannot justify the court’s conclusion
that the attorney-client privilege protected the second set of threats Mr. Moore
uttered on June 29, 2018.
10
Mr. Harvey testified that by April 12, his relationship with Mr. Moore “had
reached a point where he and I could no longer have dialogue.” | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484391/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
MICHAEL PALMER, §
No. 08-21-00072-CV
Appellant, §
Appeal from the
v. §
311th District Court
§
OFFICE OF THE ATTORNEY of Harris County, Texas
GENERAL, TEXAS, §
(TC# 2019-80718)
Appellee. §
OPINION
Appellant Michael Palmer, appearing pro se, appeals the trial court’s order dismissing his
suit for want of prosecution. 1 We reverse the trial court’s order and remand this matter for further
proceedings.
I. BACKGROUND
In November of 2019, Palmer filed a petition to terminate the parent-child relationship
based on mistaken paternity. Palmer asserted his parentage of H.N. had been adjudicated by an
1
This case was transferred from the 14th Court of Appeals of Texas, our sister court in Houston. We decide it in
accordance with the precedent of that court. TEX. R. APP. P. 41.3.
order of the trial court in a prior case. Palmer requested termination of the parent-child relationship
alleging both, that he did not get genetic testing before the order was entered, and that he did not
contest parentage at the time the order was entered because he mistakenly believed he was the
child’s genetic father. He asserted that misrepresentations were made that led him to conclude he
was the child’s father. The petition further stated the child, or someone on behalf of the child,
receives or has received governmental benefits, and thus, the Child Support Unit of the Office of
the Attorney General has been involved in a court case about the child. Palmer requested the trial
court terminate his parent-child relationship with H.N., terminate his obligation to pay child
support, and make other orders to which he was entitled.
On April 22, 2020, the Attorney General of Texas, representing the State of Texas, filed an
original answer in which it generally denied the allegations of the petition and demanded strict
proof of same. The trial court set the petition for “final trial” on April 26, 2021, but no time was
stated. From email communications exchanged between February and early-April 2021 between
Palmer and the trial court staff, which were all made a part of the record, it appears Palmer was
under the impression that the April 26 hearing would be conducted via “Zoom” videoconference.
For example, on February 26, 2021, Palmer sent an email with the subject line: “Zoom hearing
Request Case 2019-80718.” In that email, Palmer stated: “Please send me the zoom hearing info
for my next trial.” In response, the trial court staff member stated: “Your trial is in April, as the
date nears, I will send out the ZOOM information.” Then, on April 9, 2021, Palmer sent another
email to the trial court staff requesting the “zoom information” for the hearing. He received a
response stating: “Mr. Palmer, I do not have the ZOOM information yet.” Less than a week before
the hearing was set to take place, on April 18, Palmer filed a document titled “Answer to Court,”
in which he complained that the court staff had not yet provided information regarding
2
videoconference details for the hearing.
On April 26, 2021, the trial court called the case for hearing. From the brief transcript of
the hearing, it appears to have been conducted in-person as no mention is made of a
videoconference. Palmer was not present, but a representative from the Office of the Attorney
General of Texas (OAG) responded to the case announcement. After noting that Palmer was not
present and further indicating he had not served the child’s mother, counsel for the OAG asked the
court to dismiss the case for want of prosecution, which the trial court granted on that basis. The
trial court signed an order dismissing Palmer’s case for want of prosecution the same day. Later
that afternoon, Palmer filed his “Notice of Appeal” in the trial court, complaining again that the
trial court “failed to give any information to the zoom hearing when requested on numerous
occasions.” His email exchanges with the trial court staff regarding his requests for Zoom
information were attached.
On May 13, 2021, Palmer filed a document titled “Appellant Statement to the Fourth
Appeals Court” with the Fourteenth Court of Appeals of Texas, the court with appellate
jurisdiction over the case. In that document, Palmer advanced a number of arguments in support
of his position that his parental rights should be terminated, and also complained of the trial court’s
failure to provide him with videoconference information and instructions regarding the April 26,
2021, hearing. Based on a transfer order of the Supreme Court of Texas dated April 22, 2021, the
appeal was transferred from the Fourteenth Court of Appeal District to this Court. 2
II. ISSUES ON APPEAL
We construe Palmer’s “Statement to the Fourth Appeals Court” as his appellant’s brief.
Palmer raises two issues on appeal. First, Palmer argues the trial court erred in not terminating his
2
See Misc. Docket No. 21-0943, Transfer of Cases from Courts of Appeal (Apr. 22, 2021).
3
parent-child relationship with H.N. Second, Palmer argues the trial court erred in dismissing his
case for want of prosecution because it failed to provide him with videoconference instructions.
We address both issues together.
III. DISCUSSION
A. Standard of Review
At the outset, we recognize that Appellant is acting pro se on appeal. As such, we are
mindful to construe his brief liberally and with patience. See Sterner v. Marathon Oil Co., 767
S.W.2d 686, 690 (Tex. 1989). But it is well-settled that a pro se party must nonetheless comply
with all applicable procedural rules. See Canton-Carter v. Baylor Coll. of Med., 271 S.W.3d 928,
930 (Tex. App.—Houston [14th Dist.] 2008, no pet.). This requirement ensures that pro se litigants
do not otherwise gain an unfair advantage over those parties represented by counsel. Id.
Whether to dismiss a case for want of prosecution “rests within the sound discretion of the
trial court, and can be disturbed on review only if it amounted to a clear abuse of discretion.” Fox
v. Wardy, 225 S.W.3d 198, 199–200 (Tex. App.—El Paso 2005, no pet.). “A trial court abuses its
discretion when it acts in an arbitrary and unreasonable manner, or when it acts without reference
to any guiding rules or principles.” Id. (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d
238, 241–42 (Tex. 1985)).
B. Applicable Law
Preservation of Error
To preserve error for appellate review, the complaining party must raise the complaint
before the trial court “by a timely request, objection, or motion” and either obtain an express or
implicit ruling or show that the trial court refused to rule. TEX. R. APP. P. 33.1. Additionally, an
appellate court’s authority to review issues in civil cases is constrained by the arguments that
4
appear in the parties’ briefs. See Pat Baker Co., Inc. v. Wilson, 971 S.W.2d 447, 450 (Tex. 1998)
(per curiam). Simply mentioning an issue in passing is not enough to assign that issue for appellate
review; “parties asserting error on appeal still must put forth some specific argument and analysis
showing that the record and the law supports their contentions.” San Saba Energy, L.P. v.
Crawford, 171 S.W.3d 323, 338 (Tex. App.—Houston [14th Dist.] 2005, no pet.); see also TEX.
R. APP. P. 38.1(i) (stating that the “brief must contain a clear and concise argument for contentions
made with appropriate citations to authorities and to the record”). “This requirement is not satisfied
by merely uttering brief, conclusory statements unsupported by legal citations.” See Canton-
Carter, 271 S.W.3d at 931. Failure to comply with these briefing requirements results in the waiver
of issues on appeal. See id.
Dismissal under Rule 165a
A trial court’s authority to dismiss a suit for failure to appear at trial comes from Rule 165a,
which states: “A case may be dismissed for want of prosecution on failure of any party seeking
affirmative relief to appear for any hearing or trial of which the party had notice.” TEX. R. CIV. P.
165a; see also Alexander v. Lynda’s Boutique, 134 S.W.3d 845, 851 (Tex. 2004). Before
dismissing the suit under Rule 165a, the court must give the plaintiff notice of its intent to dismiss
and a date and time for a dismissal hearing. TEX. R. CIV. P. 165a(1). However, this separate notice
and dismissal hearing is not required if the court specifies in the notice of trial or hearing that a
party’s failure to appear may result in dismissal. See Alexander, 134 S.W.3d at 851–52. A dismissal
without notice violates the party’s due-process rights and must be reversed. See Villareal v. San
Antonio Truck & Equip., 994 S.W.2d 628, 630 (Tex. 1999); Hubert v. Illiniois State Assistance
Comm’n, 867 S.W.2d 160, 163 (Tex. App.—Houston [14th Dist.] 1993, no writ).
After a case is dismissed for want of prosecution, the plaintiff may move to reinstate the
5
case as long as the trial court has plenary power over the case; however, a motion to reinstate is
not a prerequisite to appeal a dismissal for want of prosecution. See Maida v. Fire Ins. Exch., 990
S.W.2d 836, 838 n.1 (Tex. App.—Fort Worth 1999, no pet.); Hosey v. County of Victoria, 832
S.W.2d 701, 703 (Tex. App.—Corpus Christi 1992, no writ). Such a motion gives the trial court
an opportunity to restore the case to the docket without the need for an appeal. See TEX. R. CIV. P.
165a(3) (a timely filed motion to reinstate extends the court’s plenary power and the appellate
deadlines). When a motion to reinstate is filed, it should be granted if it establishes that: (1) the
plaintiff had no notice of the trial or hearing; (2) it had no notice of the court’s intent to dismiss;
or (3) although it had notice, its failure to appear was due to a mistake or accident. Id.
Dismissal under Inherent Power
A trial court also has the inherent power to dismiss—independent of its authority under
Rule 165a—when a plaintiff does not prosecute its case with diligence. See e.g., Villareal, 994
S.W.2d at 630. When dismissing a case under this inherent power, courts may consider the
following factors: (1) the length of time the case was on file; (2) the extent of activity in the case;
(3) whether a trial setting was requested; and (4) whether there were any reasonable excuses for
the delay. Frenzel v. Browning-Ferris Indus., Inc., 780 S.W.2d 844, 845 (Tex. App.—Houston
[14th Dist.] 1989, no pet.)
C. Analysis
As to Palmer’s first issue on appeal, that the trial court erred in not terminating his parent-
child relationship with H.N., we cannot agree based on the record provided. Palmer did not attend
the hearing on his motion to terminate that relationship and, therefore, he did not present evidence
to support his claims. Because he did not present evidence, there was nothing for the trial court to
consider, and there is nothing for us to consider with regard to this issue on appeal. Palmer’s first
6
issue is overruled.
Moving to Palmer’s second issue on appeal, he argues that the trial court’s order dismissing
his case for want of prosecution violated his due process rights because he was not provided Zoom
information for what he reasonably assumed would be a videoconference hearing. We agree that
the procedure surrounding the trial court’s dismissal for want of prosecution violated Palmer’s due
process rights.
As a preliminary matter, we must determine whether the trial court dismissed Palmer’s
case for want of prosecution under Rule 165a or under its inherent authority. If the trial court
dismissed under Rule 165a, it was required to follow the procedure under that Rule for providing
notice of its intent to dismiss and an opportunity for Palmer to be heard regarding the dismissal.
TEX. R. CIV. P. 165a. Here, the dismissal order does not specify whether the trial court was acting
under Rule 165a or its inherent power. However, the record clearly indicates that the trial court
was acting under Rule 165a. First, the record shows that Palmer had recently been active in the
case. For example, between December 2020 through April 2021, he filed a variety of documents
with the court including one in which he requested videoconferencing information. We determine
these filings show that Palmer was attempting to diligently move the case toward trial.
Additionally, these filings are relevant to three of the four commonly-listed factors to be
considered when a trial court determines whether to dismiss a case for want of prosecution under
its inherent power: (1) the extent of activity in the case; (2) whether a trial setting was requested;
and (3) whether there were any reasonable excuses for the delay. See Frenzel, 780 S.W.2d at 845;
Texas Mut. Ins. v. Olivas, 323 S.W.3d 266, 274 (Tex. App.—El Paso 2010, no pet.); Maida, 990
S.W.2d at 842. Second, despite Palmer’s recent filing activity in the case, the dismissal occurred
immediately after he failed to appear at the hearing. And third, during the hearing, the assistant
7
attorney general moved to dismiss the case for want of prosecution based on Palmer’s failure to
attend the hearing, and the trial court agreed.
Having determined that the trial court dismissed this case for want of prosecution under
Rule 165a, we next analyze whether the trial court complied with the requirements for dismissal
under that Rule. Here, the trial court indicated it would dismiss Palmer’s case during the hearing.
Then the trial court signed an order dismissing the case for want of prosecution later that day. But
Rule 165a requires a trial court to give notice to all parties of its intent to dismiss, along with the
time and place of a dismissal hearing. TEX. R. CIV. P. 165a(1). The trial court did not do so in this
case. Additionally, we see no evidence in the record that the trial court specified in the notice for
the April 26, 2021, hearing that Palmer’s failure to appear may result in dismissal. On the contrary,
the closest thing to notice of the April 26 hearing we can see in the record is a one-line email on
February 22, 2021, from the trial court staff to Palmer, which stated “[t]he 4/26/2021 hearing is
for final trial.” Because the trial court dismissed Palmer’s case for his failure to appear at trial
without providing notice of its intent to do so and an opportunity for Palmer to be heard regarding
the dismissal, we determine that Palmer’s due process rights were violated. See Villareal, 944
S.W.2d at 630; Hubert, 867 S.W.2d at 163.
We are mindful that Palmer’s argument in his brief centers around the trial court’s failure
to provide videoconference information for the April 26 hearing. But he does raise this as a due-
process concern, and his argument goes to the direct reason the trial court dismissed his case. We
need look no further than the rule upon which the dismissal was based to see that there was, in
fact, a violation of Palmer’s due-process rights. Accordingly, we determine that this issue was
properly raised in his brief.
The Office of the Attorney General argues that Palmer did not preserve error or meet his
8
burden of proving that the trial court abused its discretion because he did not seek to reinstate his
case under Rule 165a. But, as we stated above, a motion to reinstate is not a prerequisite to an
appeal on the justification of a dismissal for want of prosecution. See Maida, 990 S.W.2d at 838
n.1; Hosey, 832 S.W.2d at 703-704 (concluding that a motion to reinstate is necessary only to
develop facts that otherwise would not appear in the record).
Because we have determined that this issue was properly raised in Palmer’s brief, that his
due-process rights were violated, and that a motion to reinstate is not a prerequisite to appeal on
this issue, Palmer’s second issue is sustained.
Finally, after this case was transferred from the 14th Court of Appeals to this Court, Palmer
filed a number of motions. These include: (1) a September 22, 2021 motion requesting this court
set up a Zoom hearing and venue change to the Texas Supreme Court; (2) a September 27, 2021
“Motion for Zoom Oral Hearing”; (3) an October 4, 2021 “Motion to Order for Termination of
Parental Rights”; (4) an October 8, 2021 “Appeal the Appeals Court 8”; (5) an October 18, 2021
“Motion of Transfer of Venue”; and (6) a November 9, 2021 “Motion of Sealing of Records.”
Each of these motions is hereby denied.
IV. CONCLUSION
We hold the trial court erred in dismissing Palmer’s suit for want of prosecution. We
therefore reverse the trial court’s order of dismissal and remand this matter to the trial court to
reinstate Palmer’s case on the court’s docket.
GINA M. PALAFOX, Justice
November 15, 2022
Before Rodriguez, C.J., Palafox, and Alley, JJ.
9 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484396/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
LAKEWAY PSYCHIATRY & § No. 08-20-00144-CV
BEHAVIORAL HEALTH, PLLC,
§ Appeal from the
Appellant,
200th Judicial District Court
v. §
of Travis County, Texas
MICHELLE BRITE, §
(TC# D-1-GN-19-008088)
Appellee. §
JUDGMENT
The Court has considered this cause on the record and concludes there was no error in the
judgment. We therefore affirm the judgment of the court below. We further order that Appellee
recover from Appellant and its sureties, if any, for performance of the judgment and all costs in
this Court, and for conditional appellate attorney’s fees as specified in the judgment of the court
below, for which let execution issue. See TEX. R. APP. P. 43.5. This decision shall be certified
below for observance.
IT IS SO ORDERED THIS 15TH DAY OF NOVEMBER, 2022.
GINA M. PALAFOX, Justice
Before Rodriguez, C.J., Palafox, and Alley, JJ. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484417/ | State of New York MEMORANDUM
Court of Appeals This memorandum is uncorrected and subject to
revision before publication in the New York Reports.
No. 85
Everhome Mortgage Company,
Appellant,
v.
Nuchem Aber et al.,
Respondents,
et al.,
Defendants.
Mikelle V. Bliss, for appellant.
Anthony R. Filosa, for respondents.
MEMORANDUM:
The Appellate Division order should be affirmed, with costs.
In this foreclosure action, defendant Equity Recovery Corporation (Equity)
established that the statute of limitations began to run on April 30, 2009, when plaintiff
commenced the first action to foreclose the mortgage (see Albertina Realty Co. v Rosbro
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-2- No. 85
Realty Corp., 258 NY 472, 476 [1932]; Freedom Mortgage Corp. v Engel, 37 NY3d 1, 22-
23 [2021]). That first action was dismissed without prejudice based on plaintiff’s failure
to appear for a court conference. Plaintiff did not commence this second foreclosure action
until June 24, 2015, more than six years after acceleration of the debt (see CPLR 213 [4]).
We agree with the Appellate Division that plaintiff failed to raise an issue of fact in
opposition to Equity’s motion for, among other things, dismissal of the amended complaint
as time-barred and for summary judgment on its counterclaim pursuant to RPAPL article
15 (195 AD3d 682, 689 [2d Dept 2021]).
Order affirmed, with costs, in a memorandum. Acting Chief Judge Cannataro and Judges
Rivera, Garcia, Wilson, Singas and Troutman concur.
Decided November 17, 2022
-2- | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484415/ | State of New York OPINION
Court of Appeals This opinion is uncorrected and subject to revision
before publication in the New York Reports.
No. 83
Roxanne Delgado, et al.,
Appellants,
v.
State of New York et al.,
Respondents.
Cameron J. Macdonald, for appellants.
Victor Paladino, for respondents.
Carl E. Heastie, amicus curiae.
CANNATARO, Acting Chief Judge:
In this declaratory judgment action, plaintiffs challenge the constitutionality of part
HHH of chapter 59 of the Laws of 2018 (the enabling act), in which the Legislature tasked
the Committee on Legislative and Executive Compensation with determining, after
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consideration of various factors, whether “the salary and allowances of the members of the
[L]egislature” and certain other state officials “warrant an increase” (L 2018, ch 59, part
HHH, § 2 [2]). The enabling act further provided that the Committee’s recommendation
with respect to any salary changes would become effective unless modified or abrogated
by statute. Inasmuch as defendants have failed to overcome the presumption of
constitutionality afforded to the enabling act as a duly enacted state statute (see Matter of
County of Chemung v Shah, 28 NY3d 244, 262 [2016]), we affirm.
I.
The constitutionality of the enabling act cannot be assessed without an overview of
the framework governing adjustments to the compensation of state officers. Historically,
legislative salaries were “fixed, primarily on a per diem basis, by the [New York]
Constitution, and could be changed only by constitutional amendment” (Dunlea v
Anderson, 66 NY2d 265, 268 [1985]).1 In 1948, however, the Legislature amended article
III, section 6 to provide that legislators shall receive for “services a like annual salary, to
be fixed by law,” with the proviso that compensation could neither be increased nor
diminished during, and with respect to, the term for which the legislator was elected.
Thereafter, the compensation for members of the Legislature and allowances for members
serving as officers or in a special capacity were set forth in Legislative Law §§ 5 and 5-a.
1
Legislative compensation was initially “to be ascertained by law,” subject to a maximum
of $3 per day (see 1821 NY Const, art I, § 9). Beginning in 1846, compensation was fixed
in the Constitution at “a sum not exceeding three dollars per day” and not to exceed an
aggregate of $300 (1846 NY Const, art III, § 6; see 2 Charles Z. Lincoln, The Constitutional
History of New York at 132-133 [1906]).
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Similarly, the salaries of the Comptroller of the State of New York and Attorney General
were set forth in Executive Law §§ 40 and 60, respectively. Salaries for certain other state
officers in the executive branch, such as agency commissioners, were contained in
Executive Law § 169. On their face, those statutes resemble Judiciary Law article 7-B (see
Judiciary Law §§ 221—221-i), which implements the “Compensation Clause” for judges
contained in article VI, § 25 (a) of the New York Constitution.
The Compensation Clause provides that the “compensation” of judges covered by
article VI of the State Constitution “shall be established by law and shall not be diminished
during the term of office for which” the judge was elected or appointed (NY Const, art VI,
§ 25 [a] [emphasis added]).2 In accordance with this mandate, salary schedules were
2
Unlike articles III, § 6 and XIII, § 7 of the New York Constitution, which provide that
legislative compensation may not “be increased or diminished during, and with respect to,
the term for which [the state officer] shall have been elected or appointed,” article VI, § 25
(a) prohibits only diminishment, not increase, of judicial compensation. In addition, article
III, § 6 and article XIII, § 7 of the Constitution require that the salaries of certain state
officers be “fixed by law,” while article VI, § 25 (a) requires that judicial salaries be
“established by law” (emphasis added). We note that, with the exception of a brief period
in the early 20th century, during which the Constitution included a salary schedule for
members of the judiciary, the State Constitution has provided since 1846 that
“compensation” of judges is to be “established by law” (1846 NY Const, art VI, § 7; see
Maron, 14 NY3d at 251; see also Gresser v O’Brien, 146 Misc 909, 916-919 [Sup Ct, NY
County 1933], affd 263 NY 622 [1934]). Although the dissenters rely on cases involving
judicial salaries in part V of the dissent—which unconvincingly attempts to parse the
meaning of the phrase “by law” in the state Constitution (dissenting op at 22-30)—the
dissent self-contradictorily expresses confusion as to why we have chosen to look to cases
involving judicial salaries, questioning whether “those other cases” are “close enough”
(dissenting op at 2). The explanation for our reliance on this Court’s precedent addressing
judicial salaries is simple: Whatever the difference in meaning between “fixed” and
“established,” the critical phrase common to the relevant constitutional provisions for
purposes of this appeal is “by law.”
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typically set forth in statutes enacted by the Legislature (see 4 Charles Z. Lincoln, The
Constitutional History of New York at 590-591 [1906]).
The Legislature altered that practice in 2010 after this Court addressed the
Compensation Clause and related separation of powers issues following “the failure of the
Legislature and the Executive to come to an agreement on legislation effecting a [judicial]
pay raise” from the levels set by the 1998 amendment of the Judiciary Law (Maron, 14
NY3d at 246). We explained that judicial salary increases had been proposed by Governors
on several occasions between 2006 and 2009, but statutes reflecting those increases were
not enacted because the relevant bills “did not [also] provide for an increase in legislative
pay” or because the Legislature refused to also “enact[] campaign finance and ethics reform
measures” demanded by the Governor (id. at 245). Maron reaffirmed that “although the
diminution in value of judicial compensation by inflation was a concern, the drafters [of
the Compensation Clause] decided that the best way to combat the effects of inflation was
to count on the Legislature—the body directly accountable to the public—to assure the fair
and appropriate compensation of the Judiciary” (id. at 254). Thus, we recognized that
“whether judicial compensation should be adjusted, and by how much, is within the
province of the Legislature” (id. at 263). Nevertheless, we concluded “that the State had
unconstitutionally compromised the independence of the judiciary over the course of three
years by linking any decision on whether to increase judges’ salaries with other legislative
initiatives such as the enactment of legislative pay increases and campaign finance reform”
(Larabee v Governor of the State of N.Y., 27 NY3d 469, 473 [2016], citing Maron, 14
NY3d at 245-246, 260-261).
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Notably, in describing “the continuing inertia underlying [the judicial salary]
dispute” (id. at 246), the Maron Court observed that the Senate passed bills in 2007 “calling
for the creation of a commission to review future salary increases for both judges and
legislators” and “a commission to examine future increases in judicial salaries taking into
account the needs of the Judiciary and the State’s ability to pay” (id. at 245; see 2007 NY
Senate Bills S5313, S6550). Like the enabling act here, those bills directed the proposed
commissions to make recommendations, based upon various non-exclusive factors set
forth in the bills, in a report to the Governor, the Legislature and the Chief Judge by a
certain date; those recommendations would “have the force of law” and “supersede
inconsistent provisions of” the Judiciary Law, Executive Law and Legislative Law unless
“modified or abrogated by statute” (2007 NY Senate Bill S5313, §§ 3 [i], 4 [h]; 2007 NY
Senate Bill 6550, § 3 [h]).
Shortly after our decision in Maron, the Legislature passed a law creating the
Commission on Judicial Compensation (see L 2010, ch 567). The 2010 statute, intended
to comply with Maron (see Senate Introducer’s Mem in Support, Bill Jacket, L 2010, ch
567, at 8) and enacted with the support of the Office of Court Administration (see Letter
from Off of Ct Admin, Dec 23, 2010, Bill Jacket, L 2010, ch 567, at 9), closely resembles
the enabling act at issue here. The 2010 statute required the Commission to “make
recommendations with respect to adequate levels of compensation and non-salary benefits
for judges” after assessing a list of non-exclusive factors (L 2010, ch 567, § 1 [a]);
following the Commission’s submission of those recommendations to the Governor,
Legislature and Chief Judge, the recommendations would “have the force of law, and . . .
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supersede inconsistent provisions of article 7-B of the judiciary law, unless modified or
abrogated by statute prior to April first of the year as to which such determination applies”
(id. § 1 [h]).
In Larabee, we explained the effect of the supersession clause contained in the 2010
statute: “Under th[e] new law, when the Commission recommends an increase in judicial
salaries, the increase goes into effect by operation of law on April 1 of the year for which
it is recommended, unless the Legislature passes a statute rejecting the recommended pay
raise” (Larabee, 27 NY3d at 472).3 The Court opined that the enactment of the 2010 statute
remedied “the constitutional violation that led to our decision in Matter of Maron,” and
3
The dissent takes issue with our citation to the facts in Larabee (dissenting op at 13-14).
We look to Larabee in describing the historical background leading to the dispute at issue
in this case. Specifically, in Larabee, we acknowledged that it was “[i]n response to our
decision in Matter of Maron, [that] the [L]egislature passed, and the Governor signed,
legislation establishing an independent Commission on Judicial Compensation, which was
empowered to recommend prospective judicial compensation increases at four-year
intervals after the effective date of the legislation” (Larabee, 27 NY3d 472). The dissenters
are correct that the parties in the recent judicial pay cases did not meaningfully address the
existence of the supersession clause that we explicitly highlighted in explaining that the
2010 legislation created a “process” through which “the issue of judicial compensation
now receives consideration independent of other political matters” (Larabee, 27 NY3d at
472). Perhaps that is because, as plaintiffs have acknowledged since the outset of this
action, “the Legislature may delegate judicial compensation decisions.” In making that
concession before Supreme Court, plaintiffs cited this Court’s decision in Matter of
Benvenga v LaGuardia (294 NY 526, 533 [1945]), and correctly acknowledged “that was
the understanding for almost [100] years” prior to the amendment of article III, section 6
to provide that legislative compensation shall “be fixed by law.” In any event, the facts of
Larabee and our statements therein, like those of the other judicial pay cases, have
relevance to the developments that have led to this case.
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“through this legislatively-created process, the issue of judicial compensation now receives
consideration independent of other political matters” (id.).4
II.
In 2015, as part of its annual budget bill, the Legislature created another similar
commission—the Commission on Legislative, Judicial and Executive Compensation—
which was charged with meeting quadrennially to make recommendations regarding
adequate levels of compensation for members of the Legislature, judges, statewide elected
officials and certain state officers (see L 2015, ch 60, Part E, § 2). The 2015 statute was,
once again, similar to the enabling act challenged in this action. Under the terms of the
2015 legislation, the Commission was required to submit to the Legislature its
recommendations by a specified date; the recommendations would “have the force of law,
and . . . supersede, where appropriate, inconsistent provisions of article 7-B of the judiciary
law, section 169 of the executive law, and sections 5 and 5-a of the legislative law, unless
modified or abrogated by statute” by a date certain (L 2015, ch 60, § 1, Part E, § 3 [7]).
The Commission made recommendations only as to judicial salaries, which first took effect
in April 2016.
A declaratory judgment action was commenced challenging the 2015 statute as an
unconstitutional delegation of legislative authority without reasonable standards or
safeguards. Supreme Court granted the defendants’ motion for summary judgment, and
4
The Commission authorized by the 2010 statute recommended a 27% increase in judicial
salaries that was phased in over the course of three years commencing in 2012 (see
Larabee, 121 AD3d 162, 169 [1st Dept 2014] [Sweeny, J., concurring]).
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the Appellate Division affirmed (Center for Jud. Accountability, Inc. v Cuomo, 167 AD3d
1406, 1411 [3d Dept 2018], appeal dismissed 33 NY3d 993 [2019], reconsid denied 34
NY3d 960 [2019]; lv denied 34 NY3d 961 [2019], rearg denied 34 NY3d 1147 [2019]).
The Appellate Division reasoned that “[t]he factors established by the Legislature” in the
2015 statute “provide[d] adequate standards and guidance for the exercise of discretion by
the Commission” and “the enabling statute contains the [additional] safeguard of requiring
that the Commission report its recommendations directly to the Legislature so that it . . .
[can] exercise its prerogative to reject any Commission recommendations before they
become effective” (id.). In 2019, we dismissed the appeal from the Appellate Division’s
order on the ground that no substantial constitutional question was directly involved (33
NY3d 993 [2019]), and thereafter denied leave to appeal (34 NY3d 961 [2019]).
The Legislature created a similar body as part of its 2018 budget bill—the
Committee on Legislative and Executive Compensation at issue here—which was tasked
with examining the “prevailing adequacy of pay levels” for members of the Legislature,
statewide elected officials, and state officers whose salaries are set forth in Executive Law
§ 169, and determining whether their annual salaries “warrant an increase” (L 2018, ch 59,
part HHH, § 2 [2]). Like the prior statutes and proposed Senate bills, the enabling act set
forth a similar non-exclusive list of factors for the Committee to consider in determining
adequacy of salaries (id. § 2 [3]). The Committee was required to report its findings,
conclusions, determinations and recommendations to the Legislature and the Governor by
December 10, 2018 (id. § 4 [1]). Those recommendations would “have the force of law . .
. unless modified or abrogated by statute” before January 1, 2019 (id. § 4 [2]). The
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recommendations, upon becoming effective, would “supersede, where appropriate,
inconsistent provisions” of Executive Law § 169 and Legislative Law §§ 5 and 5-a (id.).
Following four public meetings, the Committee recommended increasing the base
salaries of members of the Legislature from $79,500 to $110,000 on January 1, 2019, and
that all stipends under Legislative Law § 5-a be set at zero except for the stipends of
approximately a dozen legislators. Additionally, the Committee recommended increasing
the salaries of the Attorney General, Comptroller and the officers listed in Executive Law
§ 169. The Legislature did not subsequently modify or abrogate any of the Committee’s
recommendations. Thus, in accordance with the act, the recommendations acquired “the
force of law” (L 2018, ch 59, part HHH, §§ 1, 4 [2]).
Plaintiffs, three New York resident taxpayers and one member of the New York
State Assembly, commenced this action for declaratory and injunctive relief against
defendants, the State of New York and Thomas DiNapoli, in his official capacity as New
York State Comptroller. Plaintiffs asserted that the enabling act unconstitutionally
delegated legislative authority to the Committee. Supreme Court granted, as relevant here,
defendants’ motion to dismiss plaintiffs’ claims regarding salary increases for statewide
elected officials and commissioners, and the salary increase recommended for legislators
beginning in 2019.5 Upon plaintiffs’ appeal, the Appellate Division unanimously modified
5
With respect to legislative salary increases to become effective on January 1, 2020 and
beyond, the Committee also recommended placing a 15% cap on outside earned income
and prohibiting the receipt of income in certain professions where a fiduciary duty is owed.
Supreme Court concluded that the Committee exceeded its authority by recommending
these limitations and, because the legislative salary increases recommended for 2020 and
2021 were intertwined with those recommendations, the court declared those salary
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the judgment to the extent of issuing a declaration that the enabling act had not been shown
to be unconstitutional, and otherwise affirmed (194 AD3d 98 [3d Dept 2021]). The Court
concluded that plaintiffs’ argument was “foreclosed by [its] decision in Center for Jud.
Accountability Inc. v Cuomo . . . , wherein [the Court] upheld a nearly identical delegation
of authority regarding judicial compensation” (id. at 103 [internal citation omitted]). The
Appellate Division also rejected plaintiffs’ arguments that the enabling act was invalid
because the Governor did not maintain veto power over the Committee’s recommendations
(id. at 104) and because the New York Constitution provides that legislative compensation
is to be “fixed by law” (NY Const, art III, § 6), which plaintiffs construed as meaning
“codified in a published statute passed by the Legislature itself” (194 AD3d at 105).
Finally, the Court held that the Committee did not exceed the scope of its authority under
the enabling act (id. at 107).
Plaintiffs now appeal as of right from the Appellate Division order.
III.
increases to be null and void. Inasmuch as defendants did not cross-appeal, any issues
regarding the propriety of those recommended salary increases are not before us. Similarly,
to the extent that the Committee may have recommended a slight decrease in the total salary
and allowance for the senator holding the office of Vice President pro tempore—who,
incidentally, was not reelected in 2018 and, therefore, experienced no salary decrease
beginning in 2019 under the enabling act (see Vivian Wang, Democratic Insurgents Topple
6 New York Senate Incumbents, NY Times, Sept. 13, 2018; Jesse McKinley, No Lulus for
You: Comptroller Threatens to Withhold Lawmakers’ Payments, NY Times, March 16,
2018)—no party has challenged the Committee’s actions on the ground that one legislator
would have experienced a decrease in compensation. Thus, the dissent’s reliance on that
recommendation is misplaced (see dissenting op at 12-13).
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The New York Constitution dictates that “[t]he legislative power of this State shall
be vested in the Senate and the Assembly” (NY Const, art III, §1) and, therefore, “the
Legislature cannot pass on its law-making functions to other bodies” (Matter of Levine v
Whalen, 39 NY2d 510, 515 [1976]). “The Legislature may not,” for example “grant the
power to repeal general statutes” (Matter of Benvenga v LaGuardia, 294 NY 526, 533
[1945]). This Court has long recognized, however, that although the Legislature alone may
exercise powers inherently and exclusively legislative, “there is a large field in which the
[L]egislature . . . may certainly delegate to others powers which the [L]egislature may
rightfully exercise itself” (Matter of Trustees of Vil. of Saratoga Springs v Saratoga Gas,
Elec. Light & Power Co., 191 NY 123, 138 [1908] [internal quotation marks omitted]). In
that vein, while “[t]he delegation of power to make the law, which necessarily involves a
discretion as to what it shall be, cannot be done, . . . [t]he Legislature may constitutionally
confer discretion upon an administrative agency [or a commission] . . . if it limits the field
in which that discretion is to operate and provides standards to govern its exercise” (Levine,
39 NY2d at 515).
Indeed, the Constitution expressly provides:
“Subject to the limitations contained in this [C]onstitution, the
[L]egislature may from time to time assign by law new powers
and functions to . . . commissions . . . and increase, modify or
diminish their powers and functions. Nothing contained in this
article shall prevent the [L]egislature from creating temporary
commissions for special purposes”
(NY Const, art V, § 3). In the past, such commissions have proposed substantial revisions
to substantive bodies of statutory law that were subsequently enacted by the Legislature.
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For example, the constitutionality of the enabling act creating the temporary state
commission to recommend a comprehensive revision and simplification of the penal law
and the code of criminal procedure (the Bartlett Commission) was upheld under article V,
§ 3 (see People ex rel. Dudley v West, 87 Misc 2d 967 [Sup Ct, Kings County 1976]; L
1961, ch 346 [creating the Bartlett Commission]).
So too here, we conclude that the enabling act was a valid “assign[ment] by law [of]
new powers and functions to” the Committee (NY Const, article V, § 3) even though this
case is distinguishable from those involving the Bartlett Commission because the enabling
act provided that the Committee’s recommendations, unlike those of the Bartlett
Commission, were to go into effect by operation of law, and without further action by the
Legislature or opportunity for direct gubernatorial input. The Constitution expressly
permits the Legislature to assign new powers and functions to such commissions, if
constitutional. We now hold that an assignment is valid under article V, § 3 where the
Legislature creates a temporary commission with a discrete purpose, and has not delegated
the power to make the law or divested the executive branch of supervision but set standards
on the exercise of authority through appropriate guidance sufficient to prevent the
commission from intruding on the Legislature’s law-making function. In the enabling act,
the Legislature fulfilled its exclusively legislative function by exercising its “discretion as
to what [the law] shall be” (Levine, 39 NY2d at 515)6 and assigned a discrete and limited
6
Our cases involving legislative nondelegation do not provide the controlling standard by
which we review the constitutionality of the enabling act. However, in “recogniz[ing] that
executive or administrative rulemaking may entail some policy selectivity without
offending separation of powers doctrine, so long as the basic policy choices have been
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objective to the temporary Committee—i.e., the Committee was tasked with determining
initially if salaries are adequate and if not, recommending appropriate changes. The
Legislature further provided standards7 to govern the Committee in the exercise of its
assigned authority and retained the authority to reject or modify the Committee’s
recommendations, as it deems appropriate, before those recommendations became
effective.
Put differently, the Legislature has made the basic policy determination that salaries
for its members, statewide public officials and agency commissioners must be “adequate”
(L 2018, ch 59, part HHH, § 1) and directed the Committee to recommend prospective
compensation increases for legislators and certain other state officers, in accordance with
the standard set forth in the enabling act. The Legislature has not “delegate[d] power to
enact or repeal laws, or to establish policies and standards” (Peter J. Galie & Christopher
Bopst, The New York State Constitution, 113 [2d ed 2012]). Rather, the field in which the
Committee’s discretion was to operate was appropriately limited (cf. Levine, 39 NY2d at
515). Essentially, the Committee was to recommend salary figures for a limited number
of state elected officials and state officers. Moreover, the enabling act provides the
made and articulated by the Legislature” (Dorst v Pataki, 90 NY2d 696, 699 [1997]), this
Court has necessarily spoken to the essence of the exclusive law-making function that
cannot be conferred to another body. Contrary to the dissent (dissenting op at 16-17), we
believe that question is relevant here.
7
Such standards are necessary because “the Legislature is powerless to delegate the
legislative function unless it provides adequate standards. Without such standards there is
no government of law, but only government by [individuals] left to set their own standards,
with resultant authoritarian possibilities” (Rapp v Carey, 44 NY2d 157, 162 [1978]).
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standards and policies that govern the Committee’s exercise of its authority (cf. id.) via
eight nonexclusive factors that the Committee was directed to consider in analyzing
whether the salaries should be increased and that provided a framework within which the
Committee was to perform its assigned function.8 The Committee’s authority was further
cabined by the requirement that it submit its report directly to the Legislature and the
Governor, so that the Legislature could modify or reject the Committee’s recommendations
before they became effective. Under these circumstances, the enabling act is valid under
article V, § 3.
To be sure, the enabling act differs from other statutes creating temporary
commissions in that the Governor, by signing the act, has agreed to constrain the
executive’s role in approving the recommended compensation increases for legislators and
various executive state officers. The enabling act is, in this respect, distinguishable from
Laws of 2005 (ch 63, Part E, § 31), which created the so-called “Berger Commission” to
recommend closure and consolidation of existing health care facilities. The 2005 statute
provided the Commission’s report was submitted to the Governor and only upon
8
The enabling act directed the Committee to “take into account all appropriate factors
including, but not limited to: the parties’ performance and timely fulfillment of their
statutory and Constitutional responsibilities; the overall economic climate; rates of
inflation; changes in public-sector spending; the levels of compensation and non-salary
benefits received by executive branch officials and legislators of other states and of the
federal government; the levels of compensation and non-salary benefits received by
comparable professionals in government, academia and private and nonprofit enterprise;
the ability to attract talent in competition with comparable private sector positions; and the
state’s ability to fund increases in compensation and non-salary benefits” (L 2018, ch 59,
§ 1, part HHH, § 2 [3]). Any additional factors considered by the Committee would,
necessarily, have to be of a similar nature and kind to the factors listed in the statute.
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gubernatorial approval did the report become effective by operation of law when the
Legislature declined to pass a concurrent resolution rejecting it (id. § 31 [9]). Here, in
contrast, the Governor’s approval of the Committee’s report was not required prior to it
becoming effective by operation of law. Moreover, the Committee differs from the
commissions created in 2010 and 2015 in that each branch of government independently
appointed the members of those commissions, while the enabling act named the five
members of the Committee, only four of whom served (compare L 2010, ch 567, § 1 [b]
and L 2015, ch 60, Part E, § 3.1 with L 2018, ch 59, part HHH, § 1).
Because any “assign[ment] by law [of] new powers and functions to . . .
commissions” is “[s]ubject to the limitations contained in [the state] constitution” (NY
Const, art V, § 3), we must also consider whether the enabling act violates the separation
of powers doctrine. The separation of powers doctrine is “the bedrock of the system of
government adopted by this State in establishing three coordinate and coequal branches of
government, each charged with performing particular functions” (Maron, 14 NY3d at 258).
“While the doctrine of separation of powers does not require the maintenance of three
airtight departments of government, it does require that no one branch be allowed to
arrogate unto itself powers residing entirely in another branch” (Under 21, Catholic Home
Bur. For Dependent Children v City of New York, 65 NY2d 344, 356 [1985]). Because
“[i]t is the correlative oversight of each lawmaking Branch over one another—in essence
a dependency, rather than a separation—that balances the overall power to protect the
public’s interests,” the state constitution prohibits “the ultra vires surrender of power to
any other Branch” (Cohen v State of New York, 94 NY2d 1, 13 [1999]). Here, no such
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surrender of power occurred. In signing the enabling act, the Governor assented, having
no objection to the Legislature’s determination of what the law should be, the specific
members named to the Committee in the statute, or the process that tightly circumscribed
the Committee’s discretion. The Governor, of course, had the opportunity to express any
objections by vetoing the enabling act, but did not do so. Nor did the Governor cede any
authority to propose different legislation in the future or to veto future legislation.9
“[W]hen and where the Constitution requires the courts to act within prescribed
authority, we do not hesitate to decide even the most sensitive governmental disputes”
(Cohen, 94 NY2d at 15). In this case, absent a constitutional violation, it would be “unwise
for the courts “to substitute our own determination for that of the Legislature even if we
would have struck a slightly different balance on our own” (id. at 14-15).
IV.
Our determination that the enabling act was a valid assignment of power to the
Committee finds support in this Court’s prior cases. Indeed, this Court long ago addressed
the very issue we decide today in the context of judicial salaries and recognized that the
9
We note that the Committee did not fully cut the Governor out of the compensation-
setting process. Rather, the Committee recommended that the Governor set the salary of
two tiers of Executive Law § 169 Commissioners within a specified range. Nevertheless,
we caution courts considering the validity of enabling acts that result in the executive
branch effectively waiving veto power or review over the actions of temporary
commissions empowered to make recommendations inconsistent with existing statutes that
such enabling acts should be closely scrutinized to ensure that the limitations on the scope
of the authority assigned to the commission included in the legislation are appropriate
under the circumstances to prevent such bodies from either intruding upon the Legislature’s
law-making function or rendering “the legislative power” immune to “executive
supervision and control” (4 Lincoln, The Constitutional History of New York at 497).
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Legislature may authorize, by statute, other governmental entities to determine whether
judicial salaries should be increased beyond the amount set by statute to the extent that
those entities may deem proper (see Benvenga, 294 NY at 530-531, citing Judiciary Law
former § 143; see also 4 Charles Z. Lincoln, The Constitutional History of New York at
595-596 [1906]). Plaintiffs and the dissent provide us with no basis for distinguishing
judicial compensation from legislative or executive compensation in this respect.
In observing that the Legislature may authorize other governmental bodies to
determine whether an increase in judicial salaries was warranted beyond the level set forth
by statute, the Benvenga Court necessarily recognized that the Legislature could convey
the authority to “supersede” or modify the statute setting judicial salaries to that limited
extent.10 Similarly, here, because the enabling act properly empowered the Committee to
determine whether the salaries of certain state officers “warrant[ed] an increase” (L 2018,
10
The dissent objects to our use of the word “supersede,” rather than “repeal” (dissenting
op at 11). We use the word “supersede” because that is the word used by the Legislature
in the enabling act itself (see L 2018, ch 59, part HHH, § 4 [2]). The dissenters further
object that we are “[u]nable to seriously contend that the Legislature itself repealed the
preexisting statutes” (dissenting op at 11). We do not make any such contention because
we recognize that the preexisting statutes have not been repealed—the relevant statutes
remain on the books. Here, the Legislature conferred limited authority to determine
whether the compensation of the state officers listed “warrant[ed] an increase” above the
levels contained in the published statutes (L 2018, ch 59, part HHH, § 2 [2]). The dissenters
acknowledge that this Court approved of that practice in the context of judicial salaries
(dissenting op at 29, citing Benvenga, 294 NY at 530) and they provide no convincing
explanation for why legislative salaries should be treated differently or why this Court
should not follow Benvenga under the doctrine of stare decisis (see Matter of State Farm
Mut. Auto Ins. Co. v Fitzgerald, 25 NY3d 799, 819 [2015] [“Even under the most flexible
version of the doctrine applicable to constitutional jurisprudence, prior decisions should
not be overruled unless a compelling justification exists for such a drastic step” (internal
quotation marks and citation omitted)]).
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ch 59, part HHH, § 2 [2]), then by necessary implication the enabling act itself must be
read to have provided that the Committee’s recommendations would supersede the statutes
setting forth the pre-existing salaries. In other words, in using the word “supersede” (L
2018, ch 59, part HHH, § 4 [2]), the Legislature simply made explicit that it was permitting
the Commission to engage in the process that this Court endorsed in Benvenga. In any
event, it was the enabling act itself, a duly enacted statute, that provided for the
supersession of prior inconsistent statutes, not a “committee of unelected individuals who
are not directly accountable to public opinion” (dissenting op at 26).
Moreover, such supersession was done for a narrowly defined purpose (see
generally McKinney, 41 AD3d at 252 [upholding the validity of the act creating the “Berger
Commission”]). Critically, the enabling act is not a broad assignment to a commission of
the authority to revise general statutes governing a substantive body of law without the
requirements that such revisions be approved by the Legislature and subject to review or
veto by the Governor (compare Hurley v Public Campaign Fin. & Election Commn., 69
Misc 3d 254 [Sup Ct, Niagara County 2020] [declaring unconstitutional L 2019, ch 59,
part XXX, § 1, which created a Commission to make recommendations for new laws
establishing a system of public campaign financing that would supersede existing Election
Law and State Finance Law provisions unless the recommendations were modified or
abrogated by statute] with Dudley, 87 Misc 2d 967 [Sup Ct, Kings County 1976]
[upholding the validity of the enabling act creating the Bartlett Commission, because the
Commission’s report comprehensively revising the state’s criminal statutes was to be
submitted to the Legislature, which remained responsible for enacting the revised
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statutes]). Rather, the Legislature made the basic policy choice and authorized the
Committee “‘to fill in details and interstices and to make [narrow, limited] subsidiary
policy choices consistent with the enabling legislation’” (Dorst v Pataki, 90 NY2d 696,
699 [1997], quoting Matter of Citizens For An Orderly Energy Policy v Cuomo, 78 NY2d
398, 410 [1991]) on an issue that we have previously recognized may be assigned. That
is, the assignment of authority here was not only consistent with our prior caselaw
addressing judicial salaries (see Benvenga, 294 NY at 530-531; see generally Larabee, 27
NY3d at 472), but also tightly cabined by the terms of the statute.11
In that regard, “‘[a] statute or legislative act is to be construed as a whole, and all
parts of an act are to be read and construed together to determine the legislative intent’”
(Frank v Meadowlakes Dev. Corp., 6 NY3d 687, 691 [2006], quoting McKinney’s Cons.
Laws of N.Y., Book 1, Statutes § 97). Although a de-contextualized reading of the
supersession clause could lead to the misimpression that it permits the Committee’s
recommendations to supersede any inconsistent provision of Executive Law § 169 and
Legislative Law §§ 5 and 5-a, the clause itself provides that supersession will occur only
“where appropriate” (L 2018, ch 59, part HHH, § 4 [2]). In determining when supersession
11
Inasmuch as the narrow scope of the enabling act is consistent with our prior instruction
regarding the use of supersession to effectuate prospective judicial pay raises (see
Benvenga, 294 NY at 530-531), we have no occasion to adopt a comprehensive test for
determining when the enabling act of a temporary commission that provides for the
supersession of certain terms in pre-existing statutes has crossed the line into an
unconstitutional attempt to pass onto other bodies “powers inherently and exclusively
legislative” (Trustees of Vil. of Saratoga Springs, 191 NY at 138) or interfered with the
Governor’s role as an “essential element of the legislative system” (4 Lincoln, The
Constitutional History of New York at 458).
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would be “appropriate,” the clause must be read in tandem with the narrow, discrete
assignment of authority to determine the adequacy of the compensation for the specified
state officials. Therefore, under the enabling act, supersession is permissible only where
the Committee has determined that compensation is not adequate and would not extend to
a general, substantive revision of the statutes at issue (cf. Hurley, 69 Misc 3d at 260-261).
In short, we hold that there has been no unconstitutional assignment of power to the
Committee by the enabling act under the circumstances presented here.
V.
We further reject plaintiffs’ argument that the enabling act violates the requirement
that legislative salaries, as well as the salaries of the Comptroller and Attorney General, be
“fixed by law” under articles III, § 6 and XIII, § 7 of the New York Constitution. This
Court has not addressed the meaning of that phrase in depth, although we have noted that
the Legislature’s practice subsequent to amendment of the Constitution in the 1940s was
to “fix” legislative salaries via enactment of a “general law provision” (New York Pub.
Interest Research Group v Steingut, 40 NY2d 250, 256 [1976]) and that the “constitutional
constraints do not generally prohibit prospective [compensation] adjustments” (Cohen, 94
NY2d at 9). However, federal case law interpreting the Ascertainment Clause of the United
States Constitution, which states that “[t]he Senators and Representatives shall receive a
Compensation for their Services to be ascertained by Law” (US Const, article I, § 6), is
helpful on this question.
Pressler v Simon (428 F Supp 302 [D DC 1976], affd sub nom Pressler v
Blumenthal, 434 US 1028 [1978]) involved challenges both to a 1967 statute that
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authorized the creation of a quadrennial commission to make recommendations to the
President regarding rates of compensation for members of Congress, federal judges and
certain other federal governmental officers and to a separate act providing for automatic
cost-of-living adjustments (id. at 303). After receiving the commission’s report, the
President was required to submit his recommendations as to the exact pay rate for those
positions in the next budget message. Those recommendations would become effective 30
days later, i.e., they would supersede the previous salaries set by statute, unless one House
of Congress specifically disapproved of the regulations or Congress enacted a statute
establishing a different rate (see id.). Prior to enactment of the statute, “[f]or the almost
180 years since the ratification of the Constitution, the precise compensation of members
of Congress was always fixed from time to time by specific legislation without legislative
involvement by the President” (id.).
The D.C. District Court rejected the plaintiff’s arguments that the challenged
statutes violated either article I, § 1 of the Federal Constitution or the requirement of article
I, § 6 that congressional salaries must be “ascertained by Law.” Like the plaintiffs here,
the plaintiff in Pressler urged that “Congress is required itself to fix its pay” in a statute
“that specifically states the amount to be paid” and that this congressional “responsibility .
. . cannot, in effect, be delegated or by-passed in the fashion provided by the” challenged
legislation (id. at 305). The court refused to read the Ascertainment Clause so inflexibly,
reasoning that the plaintiff’s argument amounted to “essentially a matter of form rather
than substance” because “when Congress passed the Acts governing its compensation it
acted ‘by law,’” as required (id.). The court concluded that the word “ascertain” does not
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have “such a narrow and limiting effect that, as a matter of constitutional law, it was
intended to prevent the Congress from developing rational procedures of this type for fixing
congressional compensation by means other than enacting a specific statute fixing each
pay change” (id. at 305-306). Following procedural history not relevant here, the Supreme
Court summarily affirmed on direct appeal (Pressler v Blumenthal, 434 US at 1028).
In 1985, Congress amended the 1967 statute to eliminate the “legislative veto”
device by which Congress could reject executive action through the disapproval of only
one house, instead requiring a joint resolution passed by both houses and presented to the
President for signature (see Humphrey, 848 F2d at 215). The D.C. Circuit upheld the
statute as amended, reaffirming that “the Ascertainment Clause [i]s not to be read inflexibly
so as to require Congress to establish specific figures in specific legislation. Rather, it
suffice[s] that the procedures eventuating in the specific figures were set, i.e., ascertained,
by law” (id.). The Court observed that “Congress retained ultimate power to set its pay
through the already mentioned devices, such as rejection of the President’s
recommendations” (id. at 216). Inasmuch as the ultimate political responsibility to fix the
salary of members of Congress remained with Congress itself, “the animating purpose of
the Ascertainment Clause” was vindicated (id. at 215).
Similarly here, although the enabling act charges the Committee with the task of
recommending compensation levels for various state officers, the Legislature and
Governor both meaningfully participated in setting the salaries at issue and remain
politically accountable for the Committee’s actions because they enacted the statute that
created the process involving the Committee, and the Committee’s recommendations
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acquired the force of law only in the absence of legislative action. That is, compensation
is set according to the process set forth by the Legislature in a duly enacted statute signed
by the Governor and, therefore, remains “subject to statutory regulation” within the
meaning of the New York Constitution (4 Charles Z. Lincoln, The Constitutional History
of New York 765 [1906]). Moreover, the purpose of the 1948 amendment to the
Constitution to allow legislators to fix their own compensation “was to avoid ‘repeat[ing]
the error of inflexibility’ that had resulted from ‘fixing the compensation of legislators . . .
in the Constitution,’” while maintaining such political accountability (Dunlea, 66 NY2d at
268, quoting New York State Joint Legislative Committee on Legislative Methods,
Practice, Procedures and Expenditures, 1946 NY Legis Doc No. 31, at 170). To now read
article III § 6, along with article XIII, § 7, “inflexibly so as to require [the Legislature] to
establish specific figures in specific legislation” (Humphrey, 848 F2d at 215), as plaintiffs
urge us to do would run counter to the purpose of the 1948 amendment. Inasmuch as the
requirement in article III, § 6 that salaries be “fixed by law” was added to the State
Constitution for the purpose of “empowering the Legislature to determine its own
compensation ‘as is done in Congress’” (Dunlea, 66 NY2d at 268 [emphasis added]), we
conclude that Pressler and Humphrey provide persuasive authority that “it suffice[s] that
the procedures eventuating in the specific figures were set, i.e., [fixed] by law” (Humphrey,
848 F2d at 215).
This result is also consistent with New York law addressing judicial salaries, which
have been required by the State Constitution to be “established by law” since 1846 (see
1846 NY Const, art VI, § 7 [emphasis added]; see Maron, 14 NY3d at 251; 4 Charles Z.
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Lincoln, The Constitutional History of New York at 595-596 [1906]). In concluding in
Benvenga that the Legislature may confer the authority to determine whether Supreme
Court Justices’ salaries should be increased, even though those Justices “are State officers
whose compensation must be prescribed by the Legislature,” the Court stated “that [such]
power has been recognized and exercised since 1852” (294 NY at 530, relying on People
ex rel. Morris v Edmonds, 15 Barb 529 [1853], supra).12 Morris explained that, in
mandating that judicial salaries be established by law,
“[t]he [C]onstitution does not require that the amount of
compensation shall be specified in any general statute. It calls
for legislative action. That is the required basis, but the
superstructure may be fashioned pursuant to such provisions as
may be established by the [L]egislature. An act is as essentially
accomplished by law when performed pursuant to a statute, as
if consummated by the statute itself”
(id. at 533-534). Those words, endorsed by this Court in Benvenga nearly 100 years after
they were written and echoed by the federal courts in Pressler and Humphrey over 100
12
The Court noted that “[o]n five separate occasions during a period of nearly one hundred
years, the Legislature has enacted legislation permitting the city to provide for additional
compensation” for Supreme Court Justices (Benvenga, 294 NY at 534). The Court’s
reference to that power being “recognized and exercised since 1852” (id. at 530) was an
acknowledgement that the power that the dissent here assails as undermining the very
structure of the lawmaking process has been exercised and upheld since the phrase
“established by law” first appeared in the New York Constitution the mid-19th century.
That this Court recognized the validity of such a power in 1945, one year before the
amendment providing that legislative salaries must “be fixed by law” was proposed, is
highly relevant to our understanding of the provision because it is a critical “circumstance[]
and practice[] which existed at the time of the passage of the constitutional provision”
(Steingut, 40 NY2d at 258). Contrary to the assertions of plaintiffs and the dissent, the
Legislature’s practice since 1948 of “fixing” legislative salaries via enactment of a “general
law provision” (Steingut, 40 NY2d at 256) does not dictate a conclusion that setting forth
a salary in a statute is the only constitutional means of fixing legislative salaries.
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years after Morris was handed down, remain authoritative today. After all, the
constitutional provisions require legislative and judicial compensation to be fixed or
established, respectively, “by law” (NY Const, arts III, § 6, XIII, § 7 and VI, § 25 [a]), not
“by statute.” Therefore, we decline to effectively overrule this long-standing interpretation
of our State Constitution by reading the words “by law” in articles III, § 6 and XIII, § 7 to
mean something other than what they have always meant in article VI, § 25 (a). The New
York Constitution may indeed use the term “by law” at times to mean “by statute,” but
under the provisions at issue in this appeal, the term “by law” includes the valid assignment
of the authority to determine whether the salaries of state officers should be increased.
VI.
Finally, we conclude that the Committee did not exceed its authority under the
enabling act with respect to the recommended salary increases before us on this appeal. It
is well settled that, where an agency or commission acts “in a manner not contemplated by
the legislative body,” the administrative actions will be struck down (Greater N.Y. Taxi
Assn. v New York City Taxi & Limousine Commn., 25 NY3d 600, 608 [2015]). At the same
time, an agency or commission that is “a creation of a legislative body . . . possesses the
powers expressly conferred by [that body in its enabling act], as well as those ‘required by
necessary implication’” (id., quoting Matter of City of New York v State of N.Y. Commn.
on Cable Tel., 47 NY2d 89, 92 [1979]).
The Legislature directed the Committee to determine whether the salaries of certain
state officials “warrant[ed] an increase” (L 2018, ch 59, part HHH, § 2 [2]), and that is
what the Committee did. To the extent the Committee also observed that the New York
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Legislature functions more like a full-time body than Legislatures in other states, the
Committee did not purport to convert the New York Legislature into a full-time body.
Rather, the Committee considered several of the statutory factors set forth in section 2 (3)
of the enabling act, such as “the parties’ performance . . . of their statutory and
Constitutional responsibilities;” “the levels of compensation and non-salary benefits
received by executive branch officials and legislators of other states and of the federal
government;” and “the levels of compensation and non-salary benefits received by
comparable professionals in government, academia and private and nonprofit enterprise.”
To the extent that the Committee recommended imposing limits on receipt of outside
income after 2019, the question of whether those limits exceeded its statutory mandate is
not before us on this appeal.
Similarly, the Committee did not exceed its authority by recommending a reduction
in the number of tiers in the salary structure governing Executive Law § 169 officers. The
Committee concluded that the then-existing six-tier salary structure was “out of date and
cumbersome” and did not “reflect the current sense of the importance of the various
agencies governed by these public servants.” The Committee recommended simplifying
the tier structure to “to better reflect scope of responsibility, complexity, budget and
workforce based on current data and account for ranges of income.” Because the enabling
act provided the Committee with the authority to examine the adequacy of the relevant
officials’ compensation and the tier structure governs that compensation, the
recommendation to reduce the number of tiers was “not inconsistent with the statutory
language or its underlying purposes” (Greater N.Y. Taxi Assn., 25 NY3d at 608 [internal
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quotation marks and citation omitted]). Rather, the recommendation of reducing the tier
structure to better reflect the workload of section 169 officers was simply a method to
achieve the enabling act’s stated policy goal. Likewise, the Committee’s recommendation
of salary ranges for Tier C and Tier D Commissioners cannot be said to be in conflict with
the enabling act inasmuch as that recommendation is related to the statutory factors of the
state’s “ability to attract talent in competition with comparable private sector positions; and
the state’s ability to fund increases in compensation and non-salary benefits” (L 2018, ch
59, part III, § 2 [3]).
VII.
In sum, plaintiffs have failed to overcome the presumption of constitutionality
accorded to the enabling act. Moreover, the Committee did not exceed its authority under
the statute. Accordingly, the order of the Appellate Division should be affirmed, with
costs.
- 27 -
WILSON, J. (concurring):
In his 1965 Benjamin N. Cardozo memorial lecture, Chief Judge Charles Breitel—
then a Justice of the Appellate Division—explained that the three branches of government
could not easily be hived into “mutually exclusive compartments,” each with its own
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function (Charles D. Breitel, The Lawmakers, 65 Colum L Rev 749, 764 [1965]). Rather,
it was their collaboration in the lawmaking process that made the “system of checks and
balances” work (id.). Although we are not “a parliamentary government where the
Executive branch is also part of the Legislature,” (People v Tremaine, 281 NY 1, 12
[1939]), Judge Breitel reminded us that “lawmaking . . . viewed broadly in order to see the
forest in which the trees grow, fall[s] into no neat classifications” (Breitel, 65 Colum L Rev
at 764-765). Only when the branches of government are healthily balanced can the
lawmaking ecosystem flourish.
That same year, the Ideal Toy Company introduced the game Tip-It, “the wackiest
balancing game ever” (Library of Congress, Catalog of Copyright Entries: Third Series,
Books and Pamphlets Including Serials and Contributions to Periodicals, July-December
1965, at 1790 [1968]). In Tip-It, three equal posts were located equidistant from each other
around a structure balanced on a center support, with a much taller post in the center, atop
which a toy man balanced upside down on his nose. Players tried to remove weights of a
randomly prescribed color from one of three posts without tipping the balance too far in
any direction, which required shifting weights from post to post to obtain the prescribed
color without toppling the delicately balanced man. Although the man could endure some
swaying and leaning, maintaining balance was key.
Today, both authorities guide us as we ensure the balance of power is not “tipped
irretrievably in favor of” any one branch (cf. Anderson v Regan, 53 NY2d 356, 366 [1981
plurality]). It is our job to ensure that the players in the lawmaking process do not shirk
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their burden of overseeing one another and minding the public interest. I concur in
the result reached by the plurality: the Committee on Legislative and Executive
Compensation (the “Committee”) acted permissibly pursuant to a constitutional statute (L
2018, ch 59, part HHH [“Enabling Act”]), which authorized the Committee to set
“adequate levels of compensation” (Enabling Act § 1) for legislators and certain public
officers. However, I arrive at my conclusion concerning this unusual, if not wacky,
statutory scheme through reasoning that differs from that of the plurality. Although the
Governor signed the Enabling Act, the Act itself prevented the Governor from initiating
any further involvement in the legislative and public officer compensation process (except
to the extent that the Committee’s ultimate decision afforded the Governor modest
discretion within the ranges of certain tiers for some executive officers). The removal of
gubernatorial input, even though initially ceded by the Governor, is particularly concerning
in the context of legislative compensation because it leaves the Legislature as the only
governmental guardian of the public fisc in matters of its own salary.
The plurality concludes that this scheme does not unconstitutionally vest legislative
power in other bodies (see plurality op at 12). My concern with the Enabling Act is not
that the Legislature has ceded its authority to another body. Indeed, this is not a difficult
case under our legislative nondelegation doctrine. Rather, the Enabling Act is troubling
because it heavily constrained the executive’s role in a process where his influence was
especially important.1 The plurality spends much of its opinion applying caselaw that
1
Both the plurality and the dissent share some of my concern about the loss of executive
superintendence (see plurality op at 16 n 9; dissenting op at 8, 17). But we do not
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scrutinizes legislative attempts that may have overly empowered the executive. But our
doctrine of legislative nondelegation—designed to ensure that the “legislative power of
this state” not be unconstitutionally divested from the “Senate and the Assembly” (NY
Const, art III, §1; see generally Matter of Levine v Whalen, 39 NY2d 510, 515 [1976])—
does not easily apply, mutis mutandis, to questions of the diminishment of executive power,
which are the important questions raised by the Enabling Act. As we counseled in Matter
of Maron v Silver, “[s]eparate budgets, separate articles in the Constitution, and separate
provisions concerning compensation are all testament to the fact that each branch is
independent of the other” (14 NY3d 230, 259 [2010]). In Maron, we engaged in an analysis
suited to the judiciary’s “unique place in the constitutional scheme” to decide whether a
judicial compensation statute violated our separation of powers doctrine (id.). We must
conduct a similar inquiry for the Governor’s role in legislative and statewide official
compensation as well.
In brief, I find that the Enabling Act substantially weakens the Governor’s ability to
check excessive legislative and executive compensation. I am satisfied, though just barely,
that a narrow construction of the guideposts coupled with heightened judicial scrutiny (that
is, refusing to afford the usual deference we give to the decisions of executive branch
agencies) is sufficient to address the difficult separation of powers problem posed by this
statute. Providing the Governor a decision point after the Committee makes its
understand legal the nature of the problem of executive nonparticipation the same way, nor
do we apply the same standard of review of the Committee’s actions.
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recommendations, as was done with the Berger Commission, would have removed all
constitutional doubt.
I.
We have long held that “[l]egislative enactments are entitled to ‘a strong
presumption of constitutionality’” (Dalton v Pataki, 5 NY3d 243, 255 [2005], quoting
Schulz v State of New York, 84 NY2d 231, 241 [1994]). We “strike them down only as a
last unavoidable result” (White v Cuomo, 38 NY3d 209, 216 [2022], quoting Matter of Van
Berkel v Power, 16 NY2d 37, 40 [1965]), and only where “every reasonable method of
reconciliation of the statute with the Constitution has been resorted to, and reconciliation
has been found impossible” (White, 38NY3d at 216, quoting Matter of Fay, 291 NY 198,
207 [1943]). Although the Enabling Act requires more reconciling than most legislative
enactments, we can sufficiently ensure that its structure does not overcome the
“appropriately heavy burden” imposed on those who would hold a law unconstitutional
(People v Viviani, 36 NY3d 564, 576 [2021]).
A.
The judiciary has blessed various forms of nongovernmental or quasi-governmental
entities for setting public compensation. Here, though, in creating and empowering the
Committee, the Legislature has departed from established precedent by weakening time-
honored procedural safeguards.
For much of New York’s recent history, the compensation of judges, legislators,
and numerous state public officials were outlined in statutes that were intermittently
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updated by the Legislature.2 The result was a halting process whereby the Legislature
would not update pay for decades and then pass large, politically controversial raises once
inflation had embarrassingly eroded government salaries. William G. Joyce, the executive
director of the New York State Motor Truck Association perhaps explained the situation
best when he observed in response to a 1998 pay increase that “[i]f legislators and
commissioners had received a 3-4% increase each year over the last ten years there may
not have been the outcry that we see and hear in the media today” (Letter from William G.
Joyce to James McGuire, Dec. 10, 1998, Bill Jacket, L 1998, ch 630 at 11). He proposed
2
As the plurality notes, New York has historically embraced other compensation practices
as well (see, e.g., plurality op at 2 n 1[describing legislative compensation practices]). Most
notably, since at least the mid-nineteenth century, we have approved legislative attempts
to create a “superstructure” by which judicial compensation decisions might be made (see
plurality op at 24, quoting People ex rel. Morris v Edmonds, 15 Barb 529, 534 [1853]).
We have also allowed the presiding justice—the “designated representative” of the
legislature—to authorize a “reasonable sum . . . as compensation for the expenses and
disbursements” to non-resident justices who were designated to sit in the First Department
(see People ex rel. Follett v Fitch, 145 NY 261, 262-266 [1895]). Even further back, the
Legislature authorized judges to take fees as part of their compensation (see, e.g., L 1818
ch 195, § 4), before the 1846 Constitution introduced the “established by law” requirement
for the judiciary and explicitly prohibited fee taking in a separate section (compare 1846
NY Const art VI, § 7 [requiring compensation to be “established by law” for certain judges
and justices] with 1846 NY Const art VI, § 20 [prohibiting any “judicial officer, except
justices of the peace” from taking fees for personal use]). These and similar fee structures
were gradually abolished as part of a state- and nationwide trend away from facilitative
payments, which were increasingly thought to be “corrupt,” to overcompensate public
servants, and to distort incentives (see generally Nicholas R. Parrillo, Against the Profit
Motive: The Salary Revolution in American Government, 1780-1940, at 114-124 [2013]).
Nevertheless, the supplementary compensation schemes of the nineteenth century typically
added compensation on top of a salary scheme that was also outlined in statutes (see
generally 4 Charles Z. Lincoln, The Constitutional History of New York 494, 593-598
[1906]).
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“finding a means to ensure that salaries remain commensurate with economic conditions
without forcing a vote on this issue after each legislative election” (id. at 11).
As the plurality notes, the Legislature established the Special Commission on
Compensation (the “Commission”) (see L 2010, ch 567), in response to our decision in
Maron (14 NY3d 230), which declared as unconstitutional a policy of linking judicial
compensation to unrelated policy initiatives (see plurality op at 5). In Maron, we said that
“we expect[ed] appropriate and expeditious legislative consideration” of judicial salaries
(14 NY3d at 263). The 2010 act addressed our charge by providing that a newly constituted
Commission would meet every four years “to ensure that the proper salary level is set on a
regular basis” (Senate Introducer’s Mem in Support, Bill Jacket, L 2010, ch 567 at 8).
Importantly, the Commission was designed with an eye towards maintaining the
checks and balances associated with the statute-making and budgetary process outlined in
the Constitution (see Senate Introducer’s Mem in Support, Bill Jacket, L 2010, ch 567 at
8). For instance, each branch of government appointed members to the Commission, many
of whom could not be state employees or members of the state bar (L 2010, ch 567, § 1
[b]). Furthermore, the Commission provided information to each branch, which could
check the Commission if it overreached: after its deliberations, the Commission would
send a report containing its “findings, conclusions, determinations and recommendations”
to the Governor, Legislature, and Chief Judge, and, if not modified or repealed by April 1
of the year as to which the recommendation applied, the recommendations would have the
force of law unless overruled by statute (id. § 1 [h]). Looking back on this system in 2016,
we observed that “through this legislatively-created process, the issue of judicial
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compensation now receives consideration independent of other political matters” (Larabee
v Governor of the State of N.Y., 27 NY3d 469, 472 [2016]).
In 2015, the Legislature and the Governor expanded the ambit of the Commission
to include compensation for legislators, statewide elected officials, and certain other state
officers (see L 2015, ch 60, part E, § 2.1). Like its predecessor, this expanded Commission
included a series of checks and balances designed to emulate those outlined in the
Constitution. For instance, it retained the previous appointment system, giving each branch
a set number of appointees not subject to the approval of other branches (see L 2015, ch
60, part E, § 3.1). Recognizing the heightened perils involved in legislative and executive
compensation setting, the political branches provided heightened checks when considering
those salaries: for “any matters regarding legislative or executive compensation,” the
chair—appointed by the judiciary—would not be able to vote (id.). Importantly, that
recusal meant that the Governor’s appointees could not be as easily overruled (see id. §§
3.1, 3.7). Nor could the Governor steamroll the other branches, as all such
recommendations would require the vote of at least one member from each appointing
authority (id. § 3.7; see also L 2019, ch. 59, part VVV [requiring this procedural protection
be applied to all recommendations instead of only those covering legislative or executive
compensation]).
The 2015 Commission succeeded in issuing recommendations concerning judicial
compensation but failed to issue any recommendations concerning legislative or executive
salaries before its term expired. Therefore, the Governor and Legislature enacted the
Enabling Act that is at issue in this case. Like the Commission, the Committee created by
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the Enabling Act had discretion to recommend compensation changes for legislators and
certain executive branch officials (see Enabling Act, §§ 1-3). Once it issued its
“recommendation,” the Committee’s decision would “have the force of law” unless
repealed by a statute (id. § 4.2). However, the Enabling Act weakened the checks and
balances that had constrained the Commission. For instance, its five appointees (only four
of whom ultimately served) were named in the statute instead of selected directly by
members of the relevant branches (see Enabling Act, § 1).3 Most notably, the Enabling
Act removed the provision in the 2015 law which had given the Governor’s appointees half
of the votes on matters of legislative and executive compensation, and it further relaxed the
requirement that one appointee from each branch had to sign on to all recommendations
involving legislative and executive compensation. Unlike its predecessor statutes or those
creating other force-of-law commissions (see, e.g., St. Joseph Hosp. of Cheektowaga v
Novello, 43 AD3d 139, 143 [4th Dept 2007], appeal dismissed 9 NY3d 988 [2007], lv
denied 10 NY3d 702 [2008] [upholding the Berger Commission, whose recommendations
“would not be implemented” unless the Governor transmitted the Commission’s report to
3
The Enabling Act envisioned a five-member Committee consisting of “the chief judge of
the state of New York” (then Janet DiFiore), “the comptroller of the state of New York”
(Thomas P. DiNapoli), “the chairman of the State University of New York board of trustees
and 52nd comptroller for the state of New York (H. Carl McCall), “the comptroller for the
city of New York” (then Scott M. Stringer), and the chairman of the city university of New
York board of trustees and 42nd comptroller for the city of New York (William C.
Thompson, Jr.) (Enabling Act, § 1). Chief Judge DiFiore did not serve on the Committee,
however, so it only had four members.
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the Legislature with his written approval]), the Enabling Act fully cut the Governor and his
representatives out of the compensation-setting process after the Governor signed the Act.4
B.
Due to its peculiar structure, the Enabling Act worked an unusual transfer of power.
The prototypical challenges to legislative “delegation” involve statutes that risk
excessively aggrandizing the executive branch by giving the executive branch the kind of
sweeping authority that belongs to the legislature.5 Here, the Enabling Act shifted power
from the executive (as well as the legislature) into the Committee. Furthermore, that
transfer of authority altered the balance of power between the legislative and executive
branches, creating a situation where the Governor might be completely divested of legal
authority to stop a lopsided appropriation to be paid directly to the legislators themselves.
This quis custodiet ipsos custodes problem raises significant constitutional questions under
4
The plurality notes that the Committee did not fully cut the Governor out of the
compensation-setting process because it gave him limited authority to set the compensation
for a subset of Executive Law § 169 commissioners (plurality op at 16 n 9). Although the
fact that the relevant recommendations gave the Governor some additional authority over
compensation renders those recommendations less suspect on executive power grounds, it
does not address the fact that the Governor was still at the Committee’s mercy with regard
to the structure of the scheme itself.
5
I use the word “delegate” here with caution, as the Legislature cannot delegate its
authority: our Constitution vests “[t]he legislative power of this state . . . in the senate and
assembly” and no one else (NY Const art III, § 1). The Legislature may, however,
authorize others to take actions backed by the force of law. On occasion, such
authorizations sweep widely enough that we must either narrow the construction of the
statute to save it or else invalidate it as an unconstitutional delegation. Here I refer to the
case law surrounding such statutes when I use the term “delegation” (see generally
LeadingAge New York, Inc. v Shah, 32 NY3d 249, 281 [2018], Wilson, J., dissenting in
part).
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both the State Constitution’s “fixed by law” requirements (art III, § 6; art XIII, § 7) and by
extension our “[s]eparation of [p]owers [d]octrine” (Maron, 14 NY3d at 244).6
The structure of the New York Constitution reflects its concern about the “conflict
of interest” associated with public officials setting their own salaries (see New York Pub.
Interest Research Group, Inc. v Steingut, 40 NY2d 250, 258 [1976]). The most direct
check it places on legislators is the requirement that a legislator’s salary and additional
compensation may not be “increased or diminished during, and with respect to, the term
for which he or she shall have been elected” (art III, § 6; see Steingut, 40 NY2d at 258).
But it also creates a subtler check when it dictates that the compensation of legislators and
certain officials must be “fixed by law” (see art III, § 6; art XIII, § 7). Although “fixed by
law” does not mean that the dollar amounts of relevant salaries must be stated in a statute,
it does mean that the “two essential lawmaking bodies” (Cohen v State of New York, 94
NY2d 1, 12 [1999])—the Governor and the Legislature—must be meaningfully involved
in the process. By contrast, the Constitution removes the Governor entirely from her own
salary-setting process (and that of her lieutenant), instead requiring her salary “to be fixed
by joint resolution of the senate and assembly” (art IV §§ 3, 6). The way to explain the
6
Although the plurality notes (plurality op at 11-12) that the New York Constitution gives
the legislature the power to “assign by law new powers and functions to . . . commissions,”
the fact that it must do so “[s]ubject to the limitations contained in this constitution” (art
V, § 3) means that article V, § 3 cannot end the analysis of the issue. I agree with the
plurality to the extent that article V, § 3 allows the legislature to create commissions, but
that provision merely begins our analysis of the Enabling Act’s constitutionality. Indeed,
even the plurality notes that the legislature may assign new powers and functions to a
commission only “if constitutional” (plurality op at 12).
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disparate constitutional treatment of gubernatorial compensation on the one hand and the
compensation of legislators and public officers on the other is to understand that “fixed by
law” requires meaningful participation by both political branches of government. After
all, gubernatorial assent (or legislative override thereof) is what distinguishes a joint
resolution from law (see NY Const art IV, § 7).
This “separation of powers” approach to compensation represents one of the State
Constitution’s traditional responses to such conflicts of interest. Under the separation of
powers doctrine, one branch of government may not “dominat[e] or interfer[e] with the
functioning of another coequal branch” (Maron, 14 NY3d at 244). Separation of powers
is a somewhat misleading moniker for a system that often aims to control government
officials by “institutional interdependence rather than functional independence” (Cohen,
94 NY2d at 13-14, quoting Lawrence Tribe, American Constitutional Law 20 [2d ed.]
[internal emphasis omitted]). Indeed, the Constitution “makes the Governor a part of our
legislative system” and ensures that the “legislative power . . . vested in the senate and
assembly . . . [is] subject to executive supervision and control” (4 Charles Z. Lincoln, The
Constitutional History of New York 494, 497 [1906]; see also NY Const art IV, § 7).
Incorporating the Governor into the lawmaking process helps protect New Yorkers from
legislative overreach. As we have previously explained, “[i]t is the correlative oversight
of each lawmaking Branch over one another—in essence a dependency, rather than a
separation—that balances the overall power to protect the public's interests, not those
individuals who occupy the offices of those Branches at varying times . . . .” (Cohen, 94
NY2d at 13).
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Not only did the Enabling Act place the power to reject excessively generous
Committee recommendations of legislative compensation exclusively with the Legislature,
it created an additional conflict of interest. Namely, it placed initial compensation
decisions in the hands of a four-person Committee, one of whose members had a financial
stake in the outcome: as New York’s Comptroller, Thomas DiNapoli was a “statewide
elected official” (Enabling Act, § 2.1) whose salary was therefore in question. 7 Although
Comptroller DiNapoli judiciously recused himself from those deliberations, nothing about
the structure of the Committee required his recusal.
Given the particularly acute conflicts of interest associated with compensation, a
proper system of checks and balances was especially important. Instead, the Enabling Act
relaxed the established constitutional protections and introduced additional hazards.
C.
The Enabling Act’s destabilization of the checks and balances in setting
compensation is not so grave as if the Legislature had attempted to set its own
compensation through a joint resolution (cf. Matter of Moran v LaGuardia, 270 NY 450,
452-453 [1936]). Nevertheless, it reduces gubernatorial authority significantly more than
prior delegations to other committees and commissions.
7
The mere fact that the Comptroller was in a position to “determine [what] legislators shall
be paid” raises yet another separation of powers concern (see Cohen, 94 NY2d at 17
[defending the statutory scheme by explaining how it “in no way authorize[d]” the
Comptroller to wield authority over when legislators were paid]). We have no occasion to
address that issue because no party has raised it.
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The Governor approved the legislation creating the Committee. In signing the
legislation, the Governor also had some capacity to approve or reject the members of the
Committee, inasmuch as they were set forth in the text of the statute (see Enabling Act,
§ 1). Indeed, the Governor further facilitated the process by issuing a message of
necessity.8 On the other hand, unlike the 2015 authorizing legislation for the Commission,
the Enabling Act did not give the Governor free rein to appoint whomever he pleased, as
it explicitly listed the members of the Committee. Such a limit on the Governor’s
appointment authority is concerning as a constitutional matter because it risks stripping the
Governor of her appointment power and committing her to a single candidate chosen by
the Legislature (cf. Matter of Prospect v Cohalan, 65 NY2d 867, 874-875 [1985], Titone,
J., dissenting). Nevertheless, the Governor approved the Enabling Act and exercised some
control over its membership.
However, unlike prior commissions and committees, the Committee’s
recommendations automatically became law unless the Legislature blocked them, without
any opportunity for the Governor or his direct representatives to intercede. This structure
8
Generally, the New York Constitution requires that legislation be available to legislators
for three calendar days before it becomes law, unless the governor certifies facts that
necessitate an immediate vote on the bill (see art III, § 14). Because the budget bill with
the Enabling Act in it was introduced on March 30, 2018 (see Budget Bill at 156, Bill
Jacket, L 2018, ch 59), it could not be passed before the beginning of the fiscal year on
April 1 without gubernatorial intervention. Given our Constitution’s appropriation
requirement, failing to pass a timely budget can have serious consequences (see art VII, §
7). Given the tight timeline and significant consequences of failure to pass a budget on
time, the Governor issued a message of necessity to facilitate its quick passage (see
Message of Necessity, Bill Jacket, L 2018, ch 59 at 14).
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stands in distinct contrast to the Berger Commission, whose recommendations were
transmitted first to the Governor, and which would proceed no further unless the Governor
transmitted them to the Legislature (see St. Joseph Hosp., 43 AD3d at 143).
Faced with substantial concerns about the Enabling Act, we must ask if it can be
construed in a way that permits it to pass constitutional muster (see White, 38NY3d at 216).
It can. To start, the structure of the Act itself heavily circumscribed the Committee’s
authority, articulated clear policy judgements, and subjected the Committee to searching
review from the courts. The Committee’s tightly cabined authority meant that its discretion
reached minimally beyond what the Governor would have foreseen when he authorized the
initial legislation, a process over which the Governor exercised constitutional control.
Because the Governor exercised sufficient control over the process given the Committee’s
narrow authority, the compensation of state legislators and statewide elected officials was
still “fixed by law” (art III, § 6; art XIII, § 7) and did not run afoul of our “[s]eparation of
[p]owers [d]octrine” (see generally Maron, 14 NY3d at 260).
The Enabling Act’s saving grace is that the Committee’s decisions must be
subjected to heightened judicial review. Given the constitutional precarity of the Enabling
Act, we must subject the Committee to heightened scrutiny to ensure that the derogation
of gubernatorial power is not excessive. As a general matter, we do not defer to the
Committee’s interpretation of its own jurisdiction because that is a pure question of
statutory interpretation (see Matter of Claim of Gruber, 89 NY2d 225, 231-232 [1996]).
Furthermore, where, as here, that jurisdiction is constitutionally suspect, we apply more
stringent interpretive methods to “avoid, if possible, interpreting a presumptively valid
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statute in a way that will needlessly render it unconstitutional” (Overstock.com, Inc. v New
York State Dept. of Taxation and Fin., 20 NY3d 586, 593 [2013], quoting LaValle v
Hayden, 98 NY2d 155, 161 [2002]). We therefore look not to the most natural construction
of the statute, but the interpretation that avoids constitutional impropriety. Indeed, a
“tincture of constitutional doubt” may help us stomach an otherwise unpalatable
interpretation (see Matter of Jacob, 86 NY2d 651, 680 [1995], Bellacosa, J., dissenting).
This heightened scrutiny requires us to read the Enabling Act narrowly. First, the
Committee’s jurisdiction was highly cabined, limited to recommending specific amounts
of “compensation, non-salary benefits, and allowances” for statewide elected officials and
for the limited set of officials within two clearly defined statutory provisions, section 5-a
of the Legislative Law and section 169 of the Executive Law (Enabling Act, § 1).9 Second,
the Committee’s jurisdiction was circumscribed by eight nonexclusive factors (Enabling
Act, § 2.3).10 Thus, not only did the Enabling Act limit the authority of the Committee to
setting a small set of compensation numbers for a discrete number of governmental
9
The Committee’s recommendations also included limits on outside compensation and
activities, but Supreme Court and the Appellate Division struck those recommendations,
and the State has chosen not to challenge those rulings (2019 NY Slip Op 32723[U], 11-
16 [Sup Ct, Albany County 2019], affd 194 AD3d 98; see also Barclay v New York State
Comm. on Legislative and Exec. Compensation, 65 Misc3d 685, 701-703 [Sup Ct, Albany
County 2019] [finding the recommendations on outside income restriction were advisory
and did not take on the force of law]). Thus, all that is at issue here is the compensation
for legislators and specified executive branch officers.
10
Under the canon of ejusdem generis (backed by constitutional avoidance), even though
the factors are termed “nonexclusive,” we may read these factors as constraining the
otherwise open-ended delegation of “all appropriate factors” to factors that are similar to
those enumerated (see People v Illardo, 48 NY2d 408, 416 [1979]).
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officials, it created justiciable limits on the type of reasons the Committee could consider,
as the court below demonstrated by engaging with a challenge to the Committee’s
reasoning (see 194 AD3d 98, 106 [3d Dept 2021] [considering whether the Committee
exceeded its jurisdiction by finding that the Legislature functioned more as a full-time
body]).
These jurisdictional limits are important because they ensure that the Committee
may only make the kind of decisions expressly contemplated and approved by the
Governor. Were the Committee to set rates of compensation that substantially exceeded
(or fell short of) what a court decided would be “adequate” based on the enumerated and
similar factors (Enabling Act, § 1), heightened judicial scrutiny would substitute for the
Governor’s inability to rein in a runaway Committee.11
Even under this heightened standard of review, the Committee did not, as appellants
suggest, exceed its authorization when it gave the Governor a small amount of discretion
to set some executive officer compensation (see also dissenting op at 13).12 Given that the
11
Petitioners here do not contend that the salaries set by the Committee are excessive when
measured against the enumerated factors; their complaint is purely about the
unconstitutionality of the process, not the result. Supreme Court and the Appellate
Division have demonstrated their vigilance in protecting the public in view of the Enabling
Act’s diminishment of executive authority, and petitioners’ lack of complaint about the
level of the salary increase to some degree confirms that vigilance.
12
In its compensation recommendations for C- and D-tier Executive Law commissioners,
the Committee allowed the governor to choose within a tightly constrained range of
options. For D-tier commissioners, compensation was $140,000-$170,000, while for C-tier
commissioners, the salary was $175,000-$200,000. Furthermore, the governor was not
permitted to decrease compensation during the same term of a specific commissioner
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constitutional concern—and the correspondingly heightened review—is motivated by the
limitation of the Governor’s role in the decision-making process, the grant to the Governor
of some salary discretion within modest ranges tips the scheme somewhat back into
balance. Moreover, this additional authority was not so unprecedented or unexpected that
the decision was beyond the pale of what the Governor authorized or might have
anticipated. The Executive Law regularly permits the Governor to set specific
compensation within much wider ranges (see, e.g., Executive Law §§ 52 [5]; 57; 260; 271;
642). Executive Law § 169 even delegates some compensation-setting to non-
gubernatorial officials (see § 169 [3]). Although the Committee did not have carte blanche
to design a complex set of rules or institutions for setting compensation, it did have the
ability to set a statutory minimum and maximum and provide some discretion to the
Governor using a familiar statutory regime.
II.
I turn next to two of the arguments advanced by my dissenting colleagues. First,
they contend that the Enabling Act’s supersession clause (§ 4.2) constitutes an
unconstitutional delegation of legislative power. But this statute is not a hard call under
our existing legislative nondelegation doctrine, and the supersession clause does not
change that analysis.
unless it was part of an across-the-board reduction applied evenly to all commissioners in
the tier.
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Second, the dissent argues that the State Constitution’s “fixed by law” provisions
(art III, § 6; art XIII, § 7) require that the salaries of legislators and statewide elected
officials be explicitly enumerated in statute. That reading is possible but finds limited
support in the history of the provisions and does not accord with the broader principles
embodied in the Constitution. A better reading of those provisions is that they require
meaningful input from the two lawmaking branches (see supra at 10-13), but still permit
the branches to authorize inferior bodies to exercise some amount of discretion.
A.
The dissent misapplies our familiar nondelegation jurisprudence when it argues that
the Enabling Act delegated the power to repeal statutes to the Committee. Although the
legislature may not divest itself wholesale of the power to repeal general statutes, we do
not infer that the legislature has done so unless it speaks clearly (see Matter of Benvenga v
LaGuardia, 294 NY 526, 533 [1945]). In contrast to the dissent’s proposition that “[n]o
[safeguarding] ‘standards’ can excuse” the supersession clause (dissenting op at 17), the
supersession clause, in the context of this statute, is functionally inconsequential.
Under the dissent’s framework, the legislature could have passed an almost identical
piece of legislation to accomplish the same end. Suppose the legislature has passed a law
setting the compensation of all Executive Law § 169 commissioners as “adequate, as
determined by the Committee after taking into account all appropriate factors including,
but not limited to” the factors outlined in the Enabling Act. Had the legislature passed such
an act, a court would presume that the elements of Executive Law § 169 that were
inconsistent with the hypothetical statute and the Committee’s corresponding
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recommendations would be repealed by implication (see People v Mann, 31 NY2d 253,
268 [1972]). In other words, the supersession clause adds nothing to the dissent’s
constitutional argument: if the Committee had been structured exactly as the Berger
Commission was (that is, so that its structure was decidedly lawful), its recommendations
would supersede inconsistent laws with or without a supersession clause.
The problem with the dissent’s blanket prohibition on supersession clauses is that it
is unmoored from the problems the relevant constitutional provisions were designed to
address. As a result, it is difficult to figure out what types of familiar legislative actions
are constitutionally suspect under the dissent’s analysis. When we interpret the structure
and language of a constitution, we ask what the provision aimed to accomplish and interpret
the text in that light (see Steingut, 40 NY2d at 258). The dissent begins with the familiar
proposition that bicameralism and presentment promote transparency and deliberative
decision-making (see dissenting op at 7-8), but it quickly loses sight of those values in its
rush to condemn supersession clauses. The regime created by the Enabling Act is no less
deliberative or transparent than the permissible hypothetical statutory scheme outlined
above and we should treat it the same way we would the hypothetical act.
The supersession clause at issue here is amenable to our well-established test for
deciding whether the legislature has unconstitutionally delegated the “power to make the
law,” or whether the contested statutory provision merely “confer[s] authority or discretion
as to a law’s execution” (Levine, 39 NY2d 510, 515). I do not need to retread the
plurality’s application of this doctrine (see plurality op at 11-14). Suffice it to say that this
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supposed delegation of lawmaking authority is far narrower than others we have upheld
(see, e.g., Levine, 39 NY2d at 516).
Supersession clauses do not raise novel constitutional problems from a legislative
nondelegation perspective. They do not inherently delegate the power to repeal or
supersede existing statutes, even though they sometimes authorize courts and public
officials to strike a law from “the books” (dissenting op at 13, quoting plurality op at 17 n
10)—books which are themselves assembled under delegated authority (see Public
Officers Law § 70-B [1]). Rather, the authorizing statute repeals or supersedes the
inconsistent laws and the other government entities apply the statute’s directives.
The fact that a law explicitly makes supersession contingent on the judgment of
another person or entity does not change that analysis, as the dissent’s own authority
explains. When the legislature passes a law, it may “provide that [the law] shall take effect
at some future period or upon the happening of some future event” (Corning v Greene, 23
Barb 33, 49 [Sup Ct, Albany Gen Term 1856]). That “future event” may include another
entity expressing its disapproval. Thus, the legislature may “provide that the law should
cease to exist, unless a party affected by it performed an act evincing consent to its
provisions” (id. at 52 [upholding as constitutional a provision that a statute would not come
into effect unless the corporation of the city of Albany consented to the bill]).
Although the dissent claims that “we have never approved a delegation of the power
to ‘supersede’ duly enacted statutes,” we in fact regularly afford inferior bodies
considerable discretion about which statutes to repeal or supersede (dissenting op at 12).
Statutes often do not explicitly provide for the “complete and automatic repeal” of
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inconsistent legislation (dissenting op at 10), and the legislature implicitly or explicitly
authorizes other entities to implement its will. Thus, we often decide whether there is “an
inconsistency between the statutes which is such as to preclude giving effect to both”
(Mann, 31 NY2d at 268) in our own doctrine of implicit repeal, which does not seem to
bother the dissent (see dissenting op at 10). It is not clear whether the dissent would also
invalidate the common legislative practice of passing laws that supersede or repeal any
other inconsistent laws (or permit other existing laws to supersede them) but do not specify
the laws to which they refer. The dissent might read such a practice as an explicit
delegation of the power to repeal statutes to the courts or relevant officials charged with
compiling and enforcing them (see, e.g., Vehicle and Traffic Law § 385 [20] [“Any such
law, statute, ordinance, rule or regulation . . . shall to the degree inconsistent hereafter be
deemed null and void and shall not be enforced”]; General Business Law § 392-h; Public
Authorities Law § 2050-pp; State Finance Law § 97-oooo [3]).
Legislation regularly leaves decisions about the “concrete condition upon which
‘supersession’ [will] occur” to the “discretion” of non-legislative bodies (dissenting op at
10). For instance, we have twice approved regulations passed pursuant to General
Obligations Law (GOL) § 13-101 (3), which permits the transfer of claims except as
restricted by statute or where transfer “would contravene public policy” (see Matter of
Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 871-872 [2003]; Matter of General
Elec. Capital Corp. v New York State Div. of Tax Appeals Trib., 2 NY3d 249, 258 [2004]).13
13
The dissent claims that these cases do not concern supersession (dissenting op at 12 n 4)
but does not explain why the statute there at issue—which authorizes courts and agencies
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Courts have also explicitly blessed supersession clauses in our local government law
(Matter of Sherman v Frazier, 84 AD2d 401, 407-408 [2d Dept 1982]; see also Kamhi v
Town of Yorktown, 74 NY2d 423, 429-434 [1989] [“When municipalities act within their
supersession authority, even local laws that are inconsistent with the Town Law may be
valid . . . . [W]e hold that permitting the town to supersede Town Law § 274-a in its local
application . . . fits comfortably within [Municipal Law] section 10”]; Turnpike Woods,
Inc. v Town of Stony Point, 70 NY2d 735, 737 [1987]). Supersession is routinely applied
in our fire safety regulations, facilitating a statutory scheme that “reconcile[s] and
consolidate[s] existing fire prevention and structural regulations into a single, uniform code
. . . throughout the State” (cf Tarquini v Town of Aurora, 77 NY2d 354, 359 [1991]
[speaking about the scheme broadly though not addressing supersession]; see generally
Executive Law § 383 [1]; Labor Law § 275; People v Oceanside Inst. Indus., Inc., 15 Misc
3d 22, 25 [App Term, 9th and 10th Jud Dists 2007] [enforcing a supersession clause]; Sowa
v Zabar, 67 Misc 3d 1237[A], 2020 NY Slip Op 50772[U] [Sup Ct, NY County 2020]
[same]).
The dissent counters that “the Committee ‘superseded’ far more than just a salary
figure. It . . . . reorganized the statutory tier structure from six tiers to four and reclassified
to overrule the statute’s general decree that claims be transferrable whenever courts and
agencies decide transfers would contravene public policy—is not an instance of
supersession. Presumably under the dissent’s logic, the Enabling Act would have been
constitutionally permissible had it merely said that salaries would be as written in the
statute “unless such salaries would contravene public policy, in which case they will be set
as appropriate by the Committee.”
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officers among the tiers” (dissenting op at 13). The dissent does not explain what, if any,
legal implications the tier structure had aside from its effect on compensation. The “tier
structure” was simply a shorthand way of listing the amount to be paid to each enumerated
officer. If the Committee had first listed the pay of each officer in a dollar amount, one by
one, and then observed that 20 of them were at $120,000 annually, and called that “Tier
C,” what legal significance, in the context of “fixed by law,” could that possibly have?
Under the dissent’s view, the Committee’s recommendation would be less problematic had
it set the compensation of all tiers equal to one another, effectively nullifying the entire
structure; indeed, the Committee’s action would have been less problematic for the dissent
had it scrambled their order, giving Tier E commissioners the most, Tier A commissioners
the third-most, and Tier B commissioners the least, provided it did not also update their
names to put them in alphabetical order. It is hard to articulate why adjusting a shorthand
way of referring to salaries—with no legal significance beyond the dollar amount to be
paid to a particular employee—would change “far more than just a salary figure” such that
it would raise independent constitutional concerns (dissenting op at 13).
The Legislature specified what it wanted and left the Committee to execute its
vision. It put in place safeguards to ensure that the Committee’s discretion was not so wide
ranging as to constitute independent policy judgment. Nothing about the Enabling Act’s
supersession clause raises any novel or unprecedented legal issues in regard to our
legislative nondelegation doctrine. Holding otherwise would call into question at least a
century of jurisprudence and settled legislative practice.
B.
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The dissent is closer to the mark on the whether the Enabling Act was consistent
with our Constitution’s “fixed by law” requirements (art III, § 6; art XIII, § 7). I agree with
the dissent that federal precedent on an analogous provision of the Federal Constitution,
which was made after the relevant amendments to our Constitution were adopted, is
persuasive at best (see dissenting op at 27-28). Our Constitution has a separate history and
structure and must be interpreted accordingly (see id. at 28). I also agree with the dissent
that “fixed by law” might, in some contexts, mean “fixed by statute” (see dissenting op at
24-25).
The fact that “fixed by law” might mean “fixed by statute” does not end our analysis,
however. In the context of the relevant constitutional provisions, we would need to ask
which meaning of “law”—statute or something more capacious—the Constitution was
using. Indeed, it is common in both the Constitution and our case law to use “law” or
“fixed by law” to refer to an order “established by competent authority” (Matter of Mutual
Life Ins. Co., 89 NY 530, 533 [1882]; cf. 1 William Blackstone, Commentaries on the Law
of England at *69 [William Carey Jones ed 1915] [adopting an influential declaratory
theory of law]).14 Even assuming that the Constitution uses the term “law” to mean
“statute,” in the sections in question, we would then need to ask whether a statute that
14
Construing the term “law” to mean “statute” and to exclude regulations, ordinances, or
judicial decisions throughout the Constitution would lead to incongruous results (see, e.g.,
NY Const art I §§ 6 [the power of grand juries to inquire into the conduct of public officers
“shall never be suspended or impaired by law”], 14 [“Such parts of the common law, and
of the acts of the legislature of the colony of New York, as together did form the law of the
said colony . . . . shall be and continue the law of this state”]).
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permits some discretion to non-legislative actors would suffice to fix compensation. The
dissent’s own authorities suggest that “fixed by law” does not preclude providing discretion
to other parties.15 As the dissent notes, the court in Healey v Dudley stated that “law”
meant “statute” in the context of a “fixed by law” provision, but that such a law could allow
the inferior body some discretion if to the extent that the act taken by the inferior body was
“obviously intended” by the legislature (dissenting op at 24, quoting 5 Lans 115, 119 [Gen
Term, 4th Dept 1871]).16 Unlike in the present case, the Healey court confronted a
constitutional provision whose history made clear that the phrase “by law” was meant to
wrest control away from county boards of supervisors, and it still allowed for the possibility
that the legislative fixing might permit some discretion to inferior bodies (see 5 Lans at
15
The dissent also relies on ambiguous dicta from People ex rel. Percival v Cram (164 NY
166 [1900]), but Percival is not helpful here (see dissenting op at 25). As the dissent notes,
in Percival, we found that a statute did not apply to a dockmaster because he was an officer
and therefore not covered by its provisions (see dissenting op at 25). Furthermore, the
language of the constitutional provision referenced in dicta differs from the “fixed by law”
requirement of article XIII, § 7 (compare NY Const art XIII, §§ 2 [“declared by law”], and
7 [“fixed by law”] with dissenting op at 28 [“Pressler interprets the word ‘ascertain’ . . . .
(but) there is no dispute here as to the meaning of the term ‘fixed’ ”]).
16
I agree that the legislature may not delegate its authority, even if it “obviously intended”
to do so (see dissenting op at 24 n 9; see also supra at 10 n 5). My point here is that the
“fixing” required in the statute does not require the legislature to spell out the compensation
in exacting detail in its statutes. Rather, the lawmaking branches might create general
principles by which the compensation is fixed and leave the implementation to an inferior
body, provided that their overall principles still guide the analysis. To the extent that this
system reflects “basic principles of construction” (dissenting op at 24 n 9), it suggests that
the lawmaking branches may fix compensation with the term “appropriate” accompanied
by a set of relevant factors, and leave a delegee to implement the specific details pursuant
to the statute’s guiding principles and identified factors.
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117-118).17 Even in the context of that provision, it is not clear that the legislature could
not authorize some inferior bodies to exercise discretion over compensation. Indeed, our
broader judicial compensation jurisprudence has permitted the legislature to authorize
some discretion over compensation in the past (see, e.g., supra at 6 n 2).18
There is no such clarifying history here. As the plurality notes, we have long
recognized the importance of flexibility to the structure of the legislative “fixed by law”
provision (see plurality op at 23, citing Dunlea v Anderson, 66 NY2d 265, 268 [1985]).
Although I agree with the dissent that flexibility is not the only concern embodied by this
provision (see dissenting op at 26), the imperative for flexibility should color our
interpretation. In the absence of any authoritative historical evidence on this specific
question, we are left to reason from the Constitution’s text and structural principles. The
best way to balance the twin imperatives of flexibility and accountability is to ensure that
17
Brinckerhoff v Bostwick, also cited by the dissent (see dissenting op at 25), was a case
interpreting a statute with similarly clear statutory history (see 99 NY 185, 191 [1885]
[“The construction we give to this [statute] is made quite obvious if we trace the history of
the law embodied therein.”]).
18
Even People ex rel. Noble v Mitchel (220 NY 86, 90 [1917]), which cites Healey, is
somewhat cryptic about the discretion that is consistent with a “fixed by law” requirement
(see dissenting op at 25). Although we agreed that the surrogate’s salary “must be fixed
by the legislature,” we ultimately ruled that the surrogate’s salary must be held in abeyance
because it would have increased his compensation during his term in violation of the
constitution (Noble, 220 NY at 91). Had we thought the discretionary compensation
scheme at issue violated the constitution’s fixing requirement, we presumably would have
invalidated it rather than holding the compensation in abeyance. Whatever principle Noble
established, it did not hold that such a discretionary compensation scheme violated the
State Constitution’s fixing requirement.
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the executive and the legislature both meaningfully participate in the process (see supra at
10-13).
The dissent protests that this arrangement leaves the public with “no one to hold
responsible other than the government at large” (dissenting op at 26). The public disagrees.
New York voters can untangle this scheme and hold their officials responsible (see, e.g.,
Jesse McKinley, Why N.Y. Lawmakers Think They Deserve a $50,000 Raise, NY Times,
Dec. 9, 2018). The legislature regularly authorizes administrative agencies to promulgate
rules with the force of law; the press and public usually figure out whom to hold responsible
even without “a vote of both chambers” (dissenting op at 26).
The dissent also tries unsuccessfully to read something into the fact that the
legislature set many of the relevant salaries in the past by writing the numbers directly into
the statutory text (see dissenting op at 27). “Legislative inaction, because of its inherent
ambiguity, affords the most dubious foundation for drawing positive inferences” (Borquin
v Cuomo, 85 NY2d 781, 787 [1995]). Here, there was not even a rejected proposal, as in
Borquin, but merely a failure to consider the specific scheme at issue today. Because it is
not clear why the legislature did not adopt this approach earlier, this is not strong evidence
for the dissent. We have previously upheld compensation practices that were not
contemplated by the 1946 legislature: for instance, adjusting future legislative salaries
during the lame duck period (Dunlea, 66 NY2d at 269), or withholding salaries until after
a budget has been passed (Cohen, 94 NY2d at 11), or retirement plans for state employees
(Borszeweski v Bridges, 37 NY2d 361, 367-368 [1975]). We should yet again recognize
that a scheme is not unconstitutional merely because it is novel.
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III.
Essentially, the Legislature has removed a great deal of weight from the executive
branch in its version of Tip-It. Because the courts add enough weight to steady the balance
and keep this precarious structure from toppling, I concur in the result.
- 29 -
SINGAS, J. (dissenting):
Our State Constitution prescribes procedures for the function of our government
that all branches are duty bound to follow. Instead of holding the legislature to that
principle, the plurality employs an “interpretive gloss” to excuse the legislature’s
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unconstitutional actions, concluding in essence that they are “close enough to those other
cases” to pass constitutional muster. Indeed, one might be forgiven, after reading the
plurality opinion, for believing that this case concerned judicial pay raises. It does not.
This case involves different legislation, creating a different committee that was given a
different mandate. The law at issue represents the legislature’s attempt to unburden itself
of its unique constitutional power to pass and repeal laws and instead vest that power in a
group of unelected individuals, thereby avoiding the important safeguards of the
constitutionally mandated lawmaking process. It additionally violates specific
constitutional restrictions on how legislative and executive officer pay must be set. Despite
the plurality’s efforts to create one, there is no exception in the State Constitution for pay
raises. I dissent.
I.
As part of a 2018 budget bill, the legislature created the Committee on Legislative
and Executive Compensation (Committee) to “examine, evaluate[,] and make
recommendations with respect to adequate levels of compensation, non-salary benefits, and
allowances pursuant to [Legislative Law §§ 5 and 5-a], for members of the legislature,
statewide elected officials, and those state officers referred to in [Executive Law § 169]”
(L 2018, ch 650, § 1, part HHH [Enabling Act], § 1). The Committee was to be made up
of the Chief Judge of the Court of Appeals along with
“the [C]omptroller of the [S]tate of New York, the chairman of
the State University of New York board of trustees and 52nd
[C]omptroller for the [S]tate of New York, the [C]omptroller
for the [C]ity of New York, and the chairman of the [C]ity
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[U]niversity of New York board of trustees and 42nd
[C]omptroller for the [C]ity of New York” (id.).
The legislature tasked the Committee with determining whether “annual salary and
allowances of members of the legislature, statewide elected officials, and salaries of
[certain] state officers . . . warrant an increase” (id. § 2 [2]). The Committee was directed
to consider several nonexhaustive factors:
“[(1)] the parties’ performance and timely fulfillment of their
statutory and [c]onstitutional responsibilities; [(2)] the overall
economic climate; [(3)] rates of inflation; [(4)] changes in
public-sector spending; [(5)] the levels of compensation and
non-salary benefits received by executive branch officials and
legislators of other states and of the federal government; [(6)]
the levels of compensation and non-salary benefits received by
comparable professionals in government, academia[,] and
private and nonprofit enterprise; [(7)] the ability to attract
talent in competition with comparable private sector positions;
and [(8)] the state’s ability to fund increases in compensation
and non-salary benefits” (id. § 2 [3]).
The legislation required the Committee to “make a report to the [G]overnor and the
legislature of its findings” by December 10, 2018 (id. § 4 [1]). The recommendations
would “have the force of law” and “supersede” inconsistent provisions of Executive Law
§ 169 and Legislative Law §§ 5 and 5-a unless modified or abrogated by statute prior to
January 1, 2019 (id. § 4 [2]).1 Lastly, the legislation provided that, after acquiring the force
1
Legislative Law § 5 set salaries for members of the legislature at $79,500 per year.
Section 5-a provided additional allowances for members of the legislature serving as
officers and in other special capacities. For example, pursuant to the statute, the Temporary
President of the Senate receives an additional allowance of $41,500, and the Chairman of
the Senate Judiciary Committee receives an additional allowance of $18,000. Executive
Law § 169 provided the salaries of various state executive officers, such as the
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of law, the Committee’s recommendations would remain in effect until amended or
repealed, either by statute or by act of the previously established Commission on
Legislative, Judicial, and Executive Compensation (id. § 7).
On December 10, 2018, the Committee—comprising Thomas DiNapoli, Carl
McCall, Scott Stringer, and Bill Thompson2—issued its report (see Report of the
Committee on Legislative and Executive Compensation [2018] [Report]). The Committee
recommended increasing the base salaries of members of the legislature from $79,500 to
$110,000 in 2019, $120,000 in 2020, and $130,000 in 2021 (id. at 5-6, 14-16). Effective
January 1, 2020, and beyond, the Committee recommended (1) eliminating certain
allowances for members of the legislature; (2) placing a 15% cap on outside earned income;
and (3) prohibiting the receipt of income in certain professions where a fiduciary duty is
owed (id.).
Regarding the executive branch, the Committee recommended that the salaries of
the Attorney General and State Comptroller be increased from $151,500, to $220,000 in
2020 (id. at 6, 17).3 Finally, the Committee made recommendations consolidating and
reorganizing the six tiers of commissioners in Executive Law § 169 to four tiers, and
Commissioner of Labor and the Director of the Office for the aging. It divided these
positions into six tiers and set a salary for each tier.
2
Then-Chief Judge Janet DiFiore did not participate in the Committee.
3
The Report also made recommendations to raise the Governor and Lieutenant Governor’s
salaries, but recognized that this could only be accomplished by a joint resolution of both
houses of the legislature (see Report at 16; see also NY Const, art IV, §§ 3, 6).
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proposed salary increases for 2019, 2020, and 2021 (id. at 6, 17-18). For tiers C and D, the
Committee set salary ranges, rather than a fixed salary (id.). The compensation each
individual commissioner would receive within that range would be determined by the
Governor (id.).
Following receipt of the Committee’s recommendations, the legislature took no
action. As a result, pursuant to the Enabling Act, all the Committee’s recommendations
purportedly “acquired the force of law” on January 1, 2019, superseding any “inconsistent”
provisions of Legislative Law §§ 5 and 5-a and Executive Law § 169.
In March 2019, plaintiffs brought this declaratory judgment action as citizen
taxpayers under State Finance Law § 123-b. Plaintiffs alleged, among other things, that
the Enabling Act unconstitutionally delegated legislative authority to the Committee and
violated the constitution’s requirement that legislative salaries be “fixed by law.” Plaintiffs
asked the court to declare invalid the Enabling Act and the Committee’s recommendations.
Defendants moved to dismiss the complaint for failure to state a cause of action.
Supreme Court granted defendants’ motion as to pay raises for the Comptroller,
Attorney General, and executive commissioners, and the 2019 pay raises for the legislature
(2019 NY Slip Op 32723[U] [Sup Ct, Albany County 2019]). The court found that the
legislature had given the Committee adequate guidelines to make recommendations for pay
raises such that the delegation of authority was constitutional (id. at *9-11). However, the
court concluded that the Committee exceeded its delegated authority by recommending
that certain activities be prohibited and that legislators’ outside earned income be limited
(id. at *12-15). Given that those restrictions on outside income were intertwined with the
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2020 and 2021 legislative salary increases, the court invalidated those increases. The court
found these issues severable from the other issues, including the 2019 legislative salary
increase, and therefore upheld the remainder of the law (id. at *17-18). Though defendants
initially appealed the portions of Supreme Court’s opinion that invalidated the 2020 and
2021 legislative pay raises and limits on outside income and activities, they later withdrew
their appeal. Therefore, for legislators, only the portions of the Committee’s
recommendations eliminating certain allowances and providing a raise to $110,000
remained in effect, and legislators are not subject to any of the Committee’s recommended
restrictions on outside income.
The Appellate Division modified the judgment insofar as appealed from by plaintiff
to declare that the Enabling Act “has not been shown to be unconstitutional” and, as so
modified, affirmed (194 AD3d 98, 107 [3d Dept 2021]). Plaintiffs appealed to this Court
as of right (see CPLR 5601 [b] [1]).
II.
The plurality fails to acknowledge the non-delegable core legislative function that
the Enabling Act vests in the Committee: the power to pass and repeal statutes. The
Enabling Act’s supersession clause gave the Committee discretion to determine which
provisions of certain statutes would stand and which would fall. Because a duly enacted
statute may be repealed only by another statute, this was an unconstitutional delegation of
legislative power.
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A.
“The legislative power of this state shall be vested in the senate and assembly” (NY
Const, art III, § 1). Our Constitution has so provided since 1777, when those bodies were
established as the “supreme legislative power within this [s]tate” (1777 NY Const art II).
The legislative power
“covers every subject which in the distribution of the powers
of gover[n]ment between the legislative, executive[,] and
judicial departments, belongs by practice or usage, in England
or in this country, to the legislative department, except in so far
as such power has been withheld or limited by the Constitution
itself, and subject also to such restrictions upon its exercise as
may be found in the Constitution of the United States” (Lawton
v Steele, 119 NY 226, 232-233 [1890], affd 152 US 133
[1894]).
The Constitution prescribes a carefully crafted procedure that the legislature must
follow when enacting a statute. Absent a statement of necessity from the Governor, a bill
must first sit on the desks of legislators for three legislative calendar days (NY Const, art
III, § 14). It must then receive a majority vote of each house (id.), and either be signed by
the Governor or passed by two thirds of both houses following the Governor’s veto (id.,
art IV, § 7).
This “constitutionally proclaimed, deliberative process” is the bedrock of the
legislative function (Matter of King v Cuomo, 81 NY2d 247, 254 [1993]), and serves
several important purposes. First, bicameralism adds “wisdom and experience to the
governing process,” as one house limits the power of the other (Peter J. Galie, Ordered
Liberty: A Constitutional History of New York 44 [1996]; see also INS v Chadha, 462 US
919, 948-949 [1983] [observing that the bicameralism requirement highlights the belief
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among the Constitution’s framers that “legislation should not be enacted unless it has been
carefully and fully considered” by elected officials]). The delay requirement of article III,
§ 14 of our Constitution reflects similar concerns, ensuring that every member “know[s]
the precise character of the bill” and giving “the press an opportunity to communicate the
bill to the people, who would then have time to express their opinions concerning the
measure” before it becomes law (3 Charles Z. Lincoln, The Constitutional History of New
York 236, 239 [1906]).
Of equal importance is presentment, which ensures that the legislative power is
“subject to executive supervision and control” (4 Lincoln, The Constitutional History of
New York at 497). The Governor is an “essential element of our legislative system” (id.
at 458), and presentment provides the Governor the opportunity to “consider a bill from
several points of view, including its constitutionality, its relation to other legislation, and
also its policy or propriety, either general or particular” (id. at 499).
Our Constitution does not permit “the delegation of power to make the law, which
necessarily involves a discretion as to what it shall be,” but it does allow the legislature to
“confer[ ] authority or discretion as to its execution, to be exercised under and in pursuance
of the law” (Moses v Guaranteed Mtge. Co. of N.Y, 239 App Div 703, 707 [1934]
[invalidating statute that gave power to suspend provisions of the Banking Law], revd on
other grounds, 264 NY 476 [1934]). Indeed, the legislature may delegate its nonlegislative
power “with reasonable safeguards and standards, to an agency or commission to
administer the law as enacted by the [l]egislature” (Matter of Levine v Whalen, 39 NY2d
510, 515 [1976]). Delegations of this sort can, and often do, authorize administrative
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agencies to promulgate rules and regulations that have the force of law. Agency
rulemaking is not subject to bicameralism and presentment because it is not an exercise of
legislative power, but rather an exercise of “administrative” or “executive” power (see
Mistretta v United States, 488 US 361, 386 n 14 [1989] [“rulemaking power originates in
the (l)egislative (b)ranch and becomes an executive function only when delegated by the
(l)egislature to the (e)xecutive (b)ranch”]).
The Committee’s recommendations do not follow these established procedures, and
yet purportedly acquired the “force of law” and “superseded” existing statutes through the
legislature’s inaction. The Constitution does not recognize this legislative end-run.
B.
By our constitutional design, the legislature cannot delegate “strictly,” “inherently,”
or “exclusively” legislative powers (Matter of Trustees of Vil. of Saratoga Springs v
Saratoga Gas, Elec. Light & Power Co., 191 NY 123, 133-138 [1908]; see Darweger v
Staats, 267 NY 290, 305 [1935])—“not to the people, not to administrative agencies, and
not to committees of the legislature itself” (Peter J. Galie & Christopher Bopst, The New
York State Constitution 112 [2d ed 2012]; see Corning v Greene, 23 Barb 33, 34 [Sup Ct,
Gen Term 1856] [“An attempt . . . to call in another party to aid in the business, and divide
the responsibilities, of legislation, so that . . . the sovereign function is discharged, in part
at least, by a party unknown and unrecognized by the fundamental law, would be in
contravention of the (C)onstitution, and render the act void”]). The power to enact and
repeal statutes is a nondelegable core legislative function (see Matter of Benvenga v
LaGuardia, 294 NY 526, 533 [1945]; People v Ryan, 267 NY 133, 137 [1935]; Matter of
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Davidson v Walker, 222 App Div 437, 439 [2d Dept 1928] [the legislature “may not
delegate the power to enact a statute, and, conversely, may not delegate the power to repeal
it” (emphasis omitted)], revd on other grounds, 248 NY 357 [1928]). The legislature can
repeal a duly enacted statute only by enacting another statute (Matter of Moran v
LaGuardia, 270 NY 450, 452 [1936]).
Though it is not clear exactly how to define the Committee’s recommendations—
and the plurality makes no effort to do so—they are indisputably not statutes. The
legislature did not vote on them and they were never presented to the Governor (see NY
Const, art IV, § 7). Because the recommendations are not statutes, they could only have
constitutionally replaced Legislative Law §§ 5 and 5-a and Executive Law § 169 if the
legislature independently repealed those provisions (see Matter of Moran, 270 NY at 452).
It did not.
No provision of the Enabling Act expressly provided for the repeal of those sections
nor provided for their complete and automatic repeal upon the Committee issuing its
recommendations. Any repeal is therefore both implied and conditional. Our precedent
recognizes implied repeal only where there is “an inconsistency between the statutes which
is such as to preclude giving effect to both” (People v Mann, 31 NY2d 253, 258 [1972]).
That is not the case here. Nothing on the face of the Enabling Act indicated which portions
of the preexisting statutes the recommendations would supersede, if any. Moreover, rather
than provide any concrete condition upon which “supersession” would occur, the
legislature left that decision to the Committee’s discretion. The Committee could decide
whether to supersede all, some, or none of the preexisting statutes. “While the [l]egislature
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may delegate powers not legislative which it may rightfully exercise itself, it cannot under
the guise of conferring discretion confer authority to make the law” (Moses, 239 App Div
at 707 [citation omitted]). Conferring this discretion on the Committee gave it the power
to repeal statutes and, by implication, the power to enact them. Because the legislature is
prohibited from divesting itself of such powers, the Enabling Act’s delegation of the
supersession power is unconstitutional.
Unable to seriously contend that the legislature itself repealed the preexisting
statutes, the plurality avoids the word “repeal” altogether. As the plurality tells it, the
legislature did not delegate the power to repeal statutes, but merely the power to supersede
them (plurality op at 12-14, 17 n 10). There is no basis to draw a distinction between
supersession and repeal (see Supersede, Black’s Law Dictionary [11th ed 2019] [“To
annul, make void, or repeal by taking the place of . . . . (T)he 1996 statute supersedes the
1989 act”]). The power to supersede a statute is the power to repeal it. That power can be
exercised only through the lawmaking procedures mandated by the constitution.
III.
In any event, the plurality maintains that we “addressed the very issue we decide
today” in Matter of Benvenga, and that this case requires nothing more than a
straightforward application of well-settled precedent (plurality op at 16). The plurality
cites additional cases, contending that this law is “similar” to prior laws and commissions
(see plurality op at 5 [2010 statute “closely resembles” the Enabling Act], 7 [describing a
“similar commission” created in 2015], 8 [characterizing the Committee as a “similar
body”]), even though this Court never passed on those prior delegations (see plurality op
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at 4-9). Contrary to my concurring colleagues’ claims, we have never approved a
delegation of the power to “supersede” duly enacted statutes.4
The plurality asserts, in a footnote, that this dissent violates stare decisis by refusing
to acknowledge that this case is controlled by Matter of Benvenga (plurality op at 17 n 10).
There, the legislature established judicial salaries by statute and authorized a New York
City administrative board to provide additional compensation to local judges (see Matter
of Benvenga, 294 NY at 530-532, citing L 1928, chs 818, 819). The legislature intended
the additional locality pay to supplement judges’ compensation based on local needs, not
to change or replace the statutory salary (see id.; L 1928, chs 818, 819). The statutes at
issue there contained no supersession clause at all—and one was not necessary because the
legislature did not purport to give the City the power to alter or repeal existing statutes
regarding judicial pay.
The plurality finds “no basis for distinguishing” this case from Benvenga (plurality
op at 17). But the Enabling Act delegated more than just the authority to “determine
whether . . . salaries should be increased beyond the amount set by statute” (id.). It granted
4
Matter of General Elec. Capital Corp. v New York State Div. of Tax Appeals, Tax Appeals
Trib. (2 NY3d 249 [2004]) and Matter of Medical Socy. of State of N.Y. v Serio (100 NY2d
854 [2003]) do not concern supersession and are irrelevant to this discussion (see
concurring op at 22-23). Moreover, the concurrence distorts the quote from Matter of Town
of Aurora v Tarquini (compare 77 NY2d 354, 358 [1991] [“the legislation was designed to
reconcile and consolidate existing fire prevention and structural regulations into a single,
uniform code in order to provide a minimum level of protection for citizens throughout the
(s)tate”], with concurring op at 23 [“Supersession is routinely applied in our fire safety
regulations, facilitating a statutory scheme that “reconcile(s) and consolidate(s) existing
fire prevention and structural regulations into a single, uniform code . . . throughout the
State’ ”]). That case, involving administrative regulation of pool enclosures, has no bearing
on the legislature’s ability to delegate the supersession power.
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the Committee the distinct power to “supersede” inconsistent portions of preexisting
statutes, and in some cases provided decreased compensation. For example, in 2018, a
senator holding the office of Vice President pro tempore would have earned an annual base
salary of $79,500 and an additional allowance of $34,000, for a total annual salary of
$113,500 (see Legislative Law §§ 5, 5-a). The Committee eliminated that allowance; a
senator holding the same office now earns $110,000 annually—less than what the
Legislative Law mandates. And in recommending changes to Executive Law § 169, the
Committee “superseded” far more than just a salary figure. It gave an entirely different
branch of government the authority to set certain officers’ salaries within a range. It also
reorganized the statutory tier structure from six tiers to four and reclassified officers among
the tiers. True, one can still find Executive Law § 169 in the Consolidated Laws, but it is
hard to see how that statute “remain[s] on the books” in any meaningful way (plurality op
at 17 n 10). Matter of Benvenga simply does not concern the issue we decide here.
Nor does Matter of Maron v Silver (14 NY3d 230 [2010]) have any bearing on the
issues before us. In that case, we held “that the State had unconstitutionally compromised
the independence of the judiciary over the course of three years by linking any decision on
whether to increase judges’ salaries with other legislative initiatives such as the enactment
of legislative pay increases and campaign finance reform” (Larabee v Governor of the State
of N.Y., 27 NY3d 469, 473 [2016], citing Matter of Maron, 14 NY3d at 245-246, 260-261).
Matter of Maron had nothing to do with supersession. The portions of that opinion that
the plurality cites are nothing more than a factual reference to two failed bills that contained
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supersession clauses (see plurality op at 5). Our decision did not so much as mention those
clauses, much less uphold their constitutionality (see Matter of Maron, 14 NY3d at 245).
After Matter of Maron, the legislature created a Commission on Judicial
Compensation similar to the Committee at issue here (see L 2015, ch 60, part E). That
commission recommended judicial salary increases, which took effect without required
action from the legislature. In Larabee, we considered whether prospective salary raises
effected by the commission adequately remedied the past constitutional violation that led
to our decision in Matter of Maron (27 NY3d at 472). The plaintiffs sought money
damages as compensation for those past violations, which we denied (id. at 472, 475-476).
The plurality once again cites only the facts set forth in that opinion and agrees that this
Court never approved of the supersession clause (plurality op at 6 n 3).
In 2015, the legislature created another commission vested with the power to
supersede statutes, and again we did not pass on its constitutionality. The plaintiffs in that
case did not meaningfully challenge the validity of the supersession power, arguing instead
that the statute lacked adequate standards and safeguards (see Center for Jud.
Accountability, Inc. v Cuomo, 167 AD3d 1406, 1410-1411 [3d Dept 2018]; see infra at 15-
16 [explaining why this analysis does not apply to the present case]). We dismissed the
appeal on the ground that no substantial constitutional question was directly involved (see
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33 NY3d 993 [2019], never addressing the distinct constitutional question of supersession,
which is squarely presented here (see CPLR 5601 [b] [1]).5
IV.
If, as the plurality contends, the Enabling Act truly limited the Committee’s
authority to providing additional compensation above existing levels, then the supersession
clause itself would be superfluous, and the plurality need not defend it at all. But as
discussed above, the Committee’s authority was not so limited, and the plurality therefore
must attempt to defend this delegation. The plurality reasons that the legislature can
delegate the supersession power to a temporary commission, so long as the delegation is
for a “discrete purpose” (plurality op at 12) and is “tightly cabined” by adequate standards
and safeguards (plurality op at 19). That position finds no support in our law.
First, the Committee is not a temporary commission of a sort that this Court has
previously accepted (see NY Const, art V, § 3). In search of relevant precedent, the
plurality cites to cases involving the Bartlett Commission (plurality op at 12-13). That case
law is entirely inapposite. The Bartlett Commission “merely proposed legislation to the
[l]egislature, it did not enact the new law” (People ex rel. Dudley v West, 87 Misc 2d 967,
969 [Sup Ct, Kings County 1976]). The legislature subsequently adopted many of the
5
Insofar as the statute at issue in McKinney v Commissioner of N.Y. State Dept. of Health
(41 AD3d 252 [1st Dept 2007]; see plurality op at 18) authorized a commission to
supersede statutes—and it did not do so explicitly—we did not have occasion to address
the issue (9 NY3d 891 [2007]). Additionally, the recommendations in that case could not
become law without the Governor’s approval and were subject to rejection by concurrent
resolution of the legislature. Whatever constitutional issues those mechanisms may have
raised, they differ substantially from the process at issue here.
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commission’s recommendations by statute passed by both houses and signed by the
Governor. Although the Committee and the Bartlett Commission differ in this most critical
regard, the plurality analogizes the two, reasoning that the Enabling Act was valid even
though it provided “that the Committee’s recommendations, unlike those of the Bartlett
Commission, were to go into effect by operation of law, and without further action by the
[l]egislature” (plurality op at 12). The plurality holds, in other words, that the Enabling
Act was valid even though the Committee’s recommendations, unlike those of the Bartlett
Commission, became law without following constitutionally mandated lawmaking
procedure.
The plurality then attempts to distinguish the Committee from the commission
invalidated in Hurley v Public Campaign Fin. & Election Commn. (69 Misc 3d 254 [Sup
Ct, Niagara County 2020]). That commission, like the Committee here, had the power to
make recommendations that would supersede inconsistent provisions of the Election Law
and State Finance Law (see id. at 258). Supreme Court invalidated that commission’s
enabling statute precisely because it “empowered the [c]ommission to legislate new law
and repeal existing statutes” without following the “proper procedure” (id. at 260-261).
The plurality ignores the clear similarities between the commission in Hurley and the
Committee in this case. Instead, it attempts to distinguish them on the grounds that the
Enabling Act, unlike the enabling statute in Hurley, contains reasonable safeguards and
standards that narrow the scope of the delegation (plurality op at 18, 20).
At this point, the plurality invokes the test we announced in Matter of Levine. That
test asks whether the legislature has provided adequate safeguards and standards such that
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an agency has the power merely to administer and execute the law, not the uniquely
legislative “power to make the law, which necessarily involves a discretion as to what it
shall be” (Matter of Levine, 39 NY2d at 515). It is irrelevant whether the legislature
provided adequate standards here, because the Committee was not charged with executing
or administering the law, and the plurality does not contend otherwise. The Committee
was charged with the exclusively legislative power to repeal statutes. The plurality offers
no rationale for borrowing our precedent concerning delegations of administrative and
executive power (see id.) and using it, without foundation, to justify supersession here
(plurality op at 12-15 and nn 6, 7). Whatever powers and functions the legislature may
constitutionally assign to a temporary commission under article V, § 3 cannot include
legislative powers and functions. Assigning these functions circumvents the constitutional
process and eliminates the Governor’s role. No “standards” can excuse that violation.6
6
As a practical matter, the “standards” and “safeguards” in the Enabling Act had no bearing
on the Committee’s power to repeal duly enacted statutes. The Enabling Act merely set
out the “factors”—such as “the overall economic climate” and “the ability to attract
talent”—that the Committee could consider in making its determinations. It is hard to see
how these “standards” served to “cabin” the Committee’s discretion in deciding which
portions of the statutes to repeal (plurality op at 14 and n 8). And the Committee was
robust in the exercise of its broad authority.
Moreover, contrary to the plurality’s interpretation, the phrase “where appropriate” in the
Enabling Act’s supersession clause in no way limited the Committee’s discretion (see
plurality op at 20). That phrase was clearly included to account for the fact that the
preexisting law would remain unchanged if the Committee made no recommendation as to
a subject, not to enforce the standard that the plurality supplies today. Nor did the provision
permitting the legislature to modify or abrogate the recommendations by statute act as a
meaningful safeguard against inappropriate recommendations (plurality op at 13). That
provision merely restated the legislature’s inherent power to repeal statutes.
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The Constitution, not the legislature, provides the standards and safeguards required for
exercises of legislative power: bicameralism and presentment.
Based on “similar” cases never passed upon by this Court, case law involving
delegations of rulemaking authority to the executive branch, and promises of heightened
judicial scrutiny, the plurality holds that the legislature may assign exclusively legislative
power to a temporary commission where the commission has a “discrete purpose” and the
legislature “set[s] standards on the exercise of authority through appropriate guidance”
(plurality op at 12). This holding “undermines the integrity of the law-making process”
(Matter of King, 81 NY2d at 255). Requiring that the legislature adhere to the
constitutionally defined lawmaking process “is not some hypertechnical insistence of form
over substance, but rather ensures that the central law-making function remains reliable,
consistent[,] and exposed to civic scrutiny and involvement” (id.). Today’s decision fails
to do so.7 As a result, it is possible to foresee all manner of future committees, insulated
from the political process, to which the legislature may offshore certain lawmaking
responsibility.
7
Even accepting the plurality’s overly generous interpretation of our nondelegation rules,
the supersession clause makes no mention of Executive Law § 40 (Comptroller
compensation) or 60 (Attorney General compensation) (see Enabling Act § 4 [2]).
Accordingly, under the plurality’s own analysis, the Committee’s recommendations to
raise the Attorney General’s and Comptroller’s salaries from $151,000 to $220,000 had no
legal effect because they were not within the purportedly “narrowly defined” power to
“supersede” preexisting law addressing the same subject matter (see plurality op at 18, 19).
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Today the plurality gives the legislature a pass. Perhaps this Court will eventually
draw a line to prevent further erosion of the legislature’s exclusive authority to exercise
lawmaking power.
V.
The scope of the legislature’s power to set legislative and certain official’s salaries
is also expressly limited by specific constitutional provisions regarding that very subject.
The text and history of these constitutional restrictions require that a statute provide an
unchanging level of compensation for legislators and constitutional state officers. The
legislature also failed to comply with this mandate.
A.
Since a legislative pay provision first appeared in the Constitution in 1821, the issue
of the amount of power to give the legislature in determining their own salaries has been
the subject of considerable debate. In 1821, the convention opted to provide for a salary
“ascertained by law” with a constitutional cap of three dollars a day (see 1821 NY Const,
art I, § 9). There was some debate about whether to impose a cap at all because “[p]ublic
opinion would . . . always regulate the sum, and it would be such as would be reasonable”
(Nathaniel H. Carter & William L. Stone, Reports of the Proceedings and Debates of the
Convention of 1821, at 420 [1821]). Others argued that there was no reason to think that
the legislature would not “pursue[ ] the very course which public opinion has condemned”
(id.). The convention ultimately agreed that allowing the legislature to fix salaries under a
certain cap would provide needed flexibility while protecting against overcompensation
(see 1821 NY Const, art I, § 9).
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Skepticism for the legislature’s role eventually won out in 1846 when legislative
salaries were fixed at three dollars a day (1846 NY Const, art III, § 6). In 1874 this was
changed to $1,500 per year by amendment proposed by the Constitutional Commission
(id., as amended 1874) and in 1927 to $2,500 by general amendment (1894 NY Const, art
III, § 6, as amended 1927).
In 1946, the Joint Legislative Committee on Legislative Methods, Practices,
Procedures, and Expenditures proposed an amendment to remove a dollar amount from the
Constitution altogether, “[r]ather than repeat the error of inflexibility by fixing the
compensation of legislators and legislative leaders in the Constitution, and thus fail to
provide for changing conditions and circumstances” (Final Report of the New York State
Joint Legislative Committee on Legislative Methods, Practices, Procedures and
Expenditures, 1946 NY Legis Doc No. 31 at 170). This report urged the adoption of an
amendment “to permit the fixing of legislative salaries by law as is done in Congress,” (id.)
thereby “vesting the [l]egislature with the power to adjust salaries by law” (id. at 171). It
noted that exercising this power “of course, would require the consent of the Governor”
(id.). The joint commission was assured that the legislature would not abuse this power:
“Experience proves that empowered to determine the rate of its
own compensation, the [l]egislature would be extremely
conservative, if one may judge by the experience of Congress
and state legislative bodies with the authority to change salary
by law. In revising legislative salaries the [l]egislature and the
Governor would necessarily always be guided by public
opinion” (id.).
This proposed amendment, still in our Constitution today, was adopted by the people in
1948 and provides that “[e]ach member of the legislature shall receive for his or her
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services a like annual salary, to be fixed by law” along with a per diem and other
allowances, both also “to be fixed by law” (NY Const, art III, § 6). For 70 years, from
1948 until the passage of the Enabling Act in 2018, the legislature enacted statutes fixing
legislators’ salaries in the Legislative Law. In 1948 it was set at $5,000 (L 1948, ch 20),
and was amended seven times by statute passed by a majority of both houses and signed
by the Governor between then and 1998,8 when it was fixed at $79,500 (L 1998, ch 630).
In its current form, Legislative Law § 5 still lists $79,500 as legislators’ annual salary.
Regarding executive officers named therein, the 1846 Constitution provided that
they should “receive . . . a compensation, which shall not be increased or diminished”
during their term in office (1846 NY Const, art V, § 1). The proposer of this provision
reasoned that leaving the issue to the legislature would “preserv[e] the accountability of
these public servants, and the amount of compensation they shall receive, to the
representative body” (S. Croswell & R. Sutton, Debates and Proceedings in the New-York
State Convention for the Revision of the Constitution 404 [1846]). Thus, it was left to the
“[l]egislature to fix the salaries” (Problems Relating to Executive Administration and
Powers, 1938 Rep of NY Constitutional Convention Comm, vol 8 at 121). The language
clarifying that this compensation must be “fixed by law” was added in 1874, upon an
amendment approved by the people (see 1846 NY Const, art X, § 9, as amended 1874)
keeping it “subject to statutory regulation” (4 Lincoln, The Constitutional History of New
8
L 1954, ch 314 ($7,500); L 1961, ch 946 ($10,000); L 1966, ch 809 ($15,000); L 1973,
ch 386 ($23,500); L 1981, ch 55 ($28,788 in 1981, $30,804 in 1982, $32,960 in 1983); L
1984, ch 986 ($43,000); L 1987, ch 263 ($43,000).
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York at 765). Pursuant to this provision, until this case, the Comptroller’s and Attorney
General’s salaries were fixed in Executive Law §§ 40 and 60, and periodically amended
by statute approved by both houses of the legislature and signed by the Governor. The
relevant constitutional language today remains unchanged, and provides that “[e]ach of the
state officers named in th[e] [C]onstitution shall, during his or her continuance in office,
receive a compensation, to be fixed by law, which shall not be increased or diminished
during the term for which he or she shall have been elected or appointed” (NY Const, art
XIII, § 7). In their current forms, Executive Law §§ 40 and 60 set the Comptroller’s and
the Attorney General’s salaries at $151,500. The Constitution imposes no specific
requirements as to the compensation of executive officers not named therein.
B.
“In the construction of constitutional provisions, the language used, if plain and
precise, should be given its full effect” and “[i]t must be presumed that its framers
understood the force of the language used and, as well, the people who adopted it” (People
v Rathbone, 145 NY 434, 438 [1895]). The Constitution is “an instrument framed
deliberately and with care, and adopted by the people as the organic law of the [s]tate”
(Matter of King, 81 NY2d at 253 [internal quotation marks omitted]). “[I]nterstitial and
interpret[ive] gloss by the courts or by the other [b]ranches themselves that substantially
alters the specified law-making regimen” is prohibited (id.).
Courts therefore “do not have the leeway to construe their way around a self-evident
constitutional provision by validating an inconsistent practice and usage of those charged
with implementing the laws” (id. [internal quotation marks omitted]). Instead, “[t]he words
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of the Constitution, like those of any other law, must receive a reasonable interpretation,
considering the purpose and the object in view” (Association for Protection of Adirondacks
v MacDonald, 253 NY 234, 238 [1930]). This involves analyzing “the provision in which
the questioned phrase appears,” the “circumstances and practices which existed at the time
of the passage of the constitutional provision,” and “the conduct of the [l]egislature as it
exercised its authority under” the amended provision (New York Pub. Interest Research
Group v Steingut, 40 NY2d 250, 258 [1976]).
The Constitution provides that each member of the legislature “shall receive for his
or her services a like annual salary, to be fixed by law,” “an additional per diem allowance,
to be fixed by law,” and “any allowance which may be fixed by law for the particular and
additional services appertaining to or entailed by such office or special capacity” (NY
Const, art III, § 6). “Neither the salary of any member nor any other allowance so fixed
may be increased or diminished during, and with respect to, the term for which he or she
shall have been elected” (id.). It states that the “provisions of this section and laws enacted
in compliance therewith shall govern and be exclusively controlling, according to their
terms” (id.). It similarly provides that state officers in the executive branch “shall . . .
receive a compensation, to be fixed by law, which shall not be increased or diminished
during the term for which he or she shall have been elected or appointed” (id., art XIII, §
7).
Dictionaries from the time of the amendment regarding legislative salaries define
“fix” as “[t]o set or place definitely; establish; settle”; “[t]o render permanent; to give an
unvarying form to” (Webster’s Collegiate Dictionary 378 [1945]). The term “fixed”
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clearly calls for an unchanging level of compensation. As such, the salaries were not
“fixed” by the Enabling Act, and neither defendants nor the plurality contend otherwise
(see plurality op at 3 n 2). Instead, defendants argue that the Committee’s recommendation
made the salaries “fixed by law.” The Constitution provides that “no law shall be enacted
except by bill” (NY Const, art III, § 13) and states that no bill shall be “passed or become
a law, except by the assent of a majority of the members elected to each branch of the
legislature” with the “ayes and nays entered on the journal” (id. § 14). “Every bill which
shall have passed the senate and assembly shall, before it becomes law, be presented to the
[G]overnor; if the [G]overnor approve, he or she shall sign it” (id., art IV, § 7).
Contemporary cases interpreting similar provisions in the Constitution reached
consistent conclusions. The year before the amendment to article XIII, § 7’s predecessor
was proposed, the General Term was faced with the interpretation of the phrase
“established by law” in the context of setting county judges’ salaries (see Healey v Dudley,
5 Lans 115 [Sup Ct, Gen Term, 4th Dept 1871]). That court opined that “[w]hen an act is
to be done according to law, or a thing is to be established by law, we all understand that
the law intended is a law passed by the legislature, and not by some inferior body acting
under powers conferred by the legislature, unless, from the nature of the case, the act of
the inferior body is obviously intended” (id. at 119).9 The court concluded that the
9
The concurrence again divorces the language of a case from its context to buttress its
arguments (concurring op at 26-27). The phrase “unless the act of the inferior body is
obviously intended” acknowledges basic principles of construction. Here, there is nothing
in our constitutional history or text demonstrating that the Committee’s acts were
“obviously intended.” Moreover, a statute that is “obviously intended” to allow a
delegation cannot overcome a constitutional prohibition against delegation.
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constitutional provision at issue evinced no intent to allow the “inferior body” (there, the
board of supervisors) to set county judges’ salaries. This Court cited Healey in 1917,
stating that a salary of a surrogate, required to be “established by law” (1894 NY Const,
art VI, § 15), “must be fixed by the legislature” (People ex rel. Noble v Mitchel, 220 NY
86, 90 [1917]; see also Brinckerhoff v Bostwick, 99 NY 185, 190-191 [1885] [“Such
expressions as ‘required by law,’ ‘regulated by law,’ ‘allowed by law,’ ‘made by law,’
‘limited by law,’ ‘as prescribed by law,’ ‘a law of the [s]tate,’ are of frequent occurrence
in the Codes and other legislative enactments; and they are always used as referring to
statutory provisions only”]).
Between the adoption of the phrase “fixed by law” in the two constitutional
provisions at issue, this Court considered language in the Constitution stating that “[w]hen
the duration of any office is not provided by this Constitution, it may be declared by law”
(1894 NY Const, art X, § 3 [emphasis added]). The New York City Civil Service
Commission promulgated regulations providing certain hurdles to removing an employee
that the Court concluded, as to the employee, violated statutory rules about removal for
cause, and further concluded that “in the case of public officers such duration of term and
permanence of tenure must proceed from the action of the legislature itself, for so the
Constitution ordains” (People ex rel. Percival v Cram, 164 NY 166, 170-171 [1900]). The
Court explained that “[t]he power cannot be delegated to the civil service commission (if
we assume that such was the statutory intent) nor the term of an office be prescribed by its
regulation” (id. at 171; see also Benton County Council of Benton County v State ex rel.
Sparks, 224 Ind 114, 125, 65 NE2d 116, 120 [1946] [“the term ‘fixed by law’ in its general
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and ordinary sense does not include a salary fixed by an administrative board”]; Colbert v
Bond, 110 Tenn 370, 381-382, 75 SW 1061, 1063 [1903] [“The law ascertaining this
compensation must be enacted by the (l)egislature, the only lawmaking power. This
lawmaking power cannot be delegated to any other body”]; Dane v Smith, 54 Ala 47 [1875]
[“ ‘Established by law’ . . . means declared by legislative enactment. This can be done
only by the lawmaking power”]).
This interpretation is also in line with the purpose of both provisions. The
constitutional conventions and commissions have, over time, expressed uncertainty about
giving the legislature the power to set their own and state officers’ salaries. But in both
cases, ultimately, the fact that the legislature would be directly accountable to the people
provided adequate assurances that this power would not be abused. This history belies the
plurality’s one-dimensional view that the only aim of the 1948 amendment to article III, §
6 was to make the process more flexible. Instead, it was to make the process more flexible,
while maintaining accountability. Handing this power to a committee of unelected
individuals who are not directly accountable to public opinion frustrates this purpose by
removing the onus of the decision-making from the body over which the public exerts
influence through elections. Without a vote of both chambers on whether raises should be
implemented, the public has no one to hold responsible other than the government at large.
For better or for worse, the substantial political difficulties that have impeded statutory
raises were an anticipated consequence, rather than a flaw, of vesting that power with the
legislature.
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In the 70 years after the amendment to article III, § 6, and the over 140 years after
the amendment to article XIII, § 7, the legislature has enacted legislators’, the
Comptroller’s, and the Attorney General’s salaries by statute passed by a majority of both
houses and signed by the Governor. To the extent that the legislature’s contemporaneous
understanding of their own powers factors into the analysis, their decades of uniformly
changing salaries by statute supports the text’s history and purpose.
Federal cases cited by the plurality interpreting the U.S. Constitution’s requirement
that legislative salaries be “ascertained by law” carry little weight (see US Const, art I, §
6). While Congress only has the powers given to it by the United States Constitution, the
state legislature’s power is plenary, “limited only by the national and state constitutions.
For this reason, a list of enumerated powers comparable to [the U.S. Constitution] does not
appear in [Article III]. On the contrary, later sections of this article contain specific
restrictions on the exercise of legislative power” (Galie & Bopst, The New York State
Constitution at 112). Thus, while federal constitutional provisions regarding legislative
powers must be read in the context of granting certain powers, those in the State
Constitution must be read in the context of restricting them. The plurality nonetheless cites
legislative history indicating that the 1947 amendment was passed to align the process for
setting legislative salaries in New York to the process used by the federal government.
From this, the plurality concludes that if Congress can do it, so can we (see plurality op at
23-24). Critically, though, the plurality fails to mention that in 1948 when the amendment
was enacted, no attempt had ever been made to set congressional salaries other than by
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statute. The plurality’s implication that the meaning of our own Constitution may be
changed by Congress’s subsequent actions is analytically suspect.
Moreover, even accepting the similarity of the two provisions, the federal cases the
plurality cites interpreting the U.S Constitution’s Ascertainment Clause carry little
persuasive authority (see Humphrey v Baker, 848 F2d 211 [DC Cir 1988]; Pressler v
Simon, 428 F Supp 302 [D DC 1976 three-judge panel]). First, Pressler interprets the word
“ascertain,” and appears to start with the premise that the “ascertainment” must be
accomplished by statute (428 F Supp at 305 [concluding that statute delegating power did
so “by law” and “it only remains to consider whether or not the verb ‘ascertain’ has such a
narrow and limiting effect that, as a matter of constitutional law, it was intended to prevent
the Congress from developing rational procedures of this type”]). Of course, there is no
dispute here as to the meaning of the term “fixed” and the plurality does not propose that
the Enabling Act somehow “fixed” compensation. Instead, the plurality’s argument
appears to be that the Committee’s recommendations are somehow “law” despite never
receiving a majority vote in either the Senate or Assembly nor being signed by the
Governor (plurality op at 3 n 2 [“the critical phrase . . . for purposes of this appeal is ‘by
law’ ”]). In any event, Pressler’s conclusion that “ascertainment” included directing
another body to follow rational procedures for fixing congressional compensation was
based on federal constitutional history, which did not reflect the skepticism for the
legislature’s role that has motivated the treatment of this issue in the State Constitution.
Our distinct constitutional history elucidates the interpretation of our own Constitution.
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Though the District Court’s decision in Pressler was affirmed without opinion by
the U.S. Supreme Court, the basis for that affirmance is unclear, and may have rested on
plaintiff’s lack of standing (see 434 US 1028 [1978, Rehnquist, J., concurring] [“Our
‘unexplicated affirmance’ without opinion could rest as readily on our conclusion that
appellant lacked standing to litigate the merits of the question as it could on agreement with
the District Court’s resolution of the merits”]). Nonetheless, in Humphrey, the D.C. Circuit
held that the Supreme Court’s affirmance of Pressler was binding on its analysis and
merely adopted the District Court’s reasoning from that case, providing no additional
analysis (848 F2d at 215-216).10
The state cases on which the plurality relies fare no better (see plurality op at 23-
25). People ex rel. Morris v Edmonds dealt with whether judges could be paid additional
compensation beyond that prescribed by the legislature (15 Barb 529, 532-536 [Sup Ct
1853]). When we cited that case in Matter of Benvenga, we made clear that “Justices of
the Supreme Court are [s]tate officers whose compensation must be prescribed by the
[l]egislature, subject to the constitutional provision” requiring them to be “established by
law” (294 NY at 530). We narrowly described the rule from Edmonds, that “the
[l]egislature may confer limited authority to pay additional compensation to such justices”
(id.). Of course, the legislature here attempted to confer authority to determine the
legislators’ entire salaries, repealing those already “fixed by law” (see supra at 12-13). Far
10
The plurality’s replacement of the word “ascertained” with the word “fixed” in that
case’s holding (plurality op at 23) does not change the immateriality of its analysis to the
issue at hand.
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from “endors[ing]” the language the plurality quotes from Edmonds (plurality op at 24),
the Court in Matter of Benvenga only provided a general citation and did not adopt any
language from that case. The plurality simply does not cite a single case supporting its
conclusion that, in this context, the phrase “fixed by law” does not mean “fixed by statute.”
The text and history of the two provisions at issue confirm that to satisfy article III,
§ 6, and article XIII, § 7, the legislature must enact a statute providing for an unchanging
level of compensation. Thus, even if the delegation in the Enabling Act were otherwise
permissible, it would nonetheless be unconstitutional insofar as it allowed the salaries of
legislators, the Attorney General, and the Comptroller to be fixed other than by a duly
enacted statute.
VI.
Our Constitution’s mandates are clear. Only the legislature may pass and repeal
laws, and the legislature itself must fix the salaries of legislators and officers named in the
Constitution. The plurality’s tortured journey to a contrary result leads us far astray from
these settled principles. The legislature must follow the lawmaking process of
bicameralism and presentment to pass and repeal laws. Because the Enabling Act’s
supersession clause instead gives the Committee the power to perform this crucial step, I
would declare that provision of the Enabling Act unconstitutional.
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Order affirmed, with costs. Opinion by Acting Chief Judge Cannataro. Judges Rivera and
Troutman concur. Judge Wilson concurs in result in an opinion. Judge Singas dissents in
an opinion, in which Judge Garcia concurs.
Decided November 17, 2022
- 31 - | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484428/ | IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Jeffry Schott, :
Petitioner :
:
v. : No. 778 C.D. 2021
:
Unemployment Compensation :
Board of Review, :
Respondent : Submitted: August 19, 2022
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ELLEN CEISLER, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE CEISLER FILED: November 17, 2022
Jeffry Schott (Claimant) petitions for review of the March 12, 2021 Order of
the Unemployment Compensation Board of Review (Board) affirming the decision
of a Referee to deny Claimant unemployment compensation (UC) benefits. The
Board concluded that Claimant was ineligible for UC benefits under Section 402(e)
of the Unemployment Compensation Law (Law)1 because he was discharged from
work for willful misconduct. We affirm the Board’s Order.
Background
Claimant was employed full time as Budget Director for the County of
Delaware (Employer) from April 13, 2020, through May 26, 2020. Bd.’s Finding of
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §
802(e). Section 402(e) of the Law provides that an employee shall be ineligible for UC benefits
for any week in which his unemployment is due to his discharge from work for willful misconduct.
43 P.S. § 802(e).
Fact (F.F.) No. 1. When he applied for the position, Claimant stated that he resided
in Boothwyn, Pennsylvania, a municipality in Delaware County. Id. No. 2.
After hiring Claimant, Employer conducted an investigation into Claimant’s
place of residence and determined that Claimant resided in Wilmington, Delaware.
Id. No. 3. At that time, however, Claimant resided in neither Boothwyn nor
Wilmington; he resided in Philadelphia, Pennsylvania. Id. No. 4.
Employer has a policy stating that its employees must reside in Delaware
County, but Employer allows an employee to relocate to Delaware County within
six months after beginning a position with Employer. Id. No. 5.2 Following its
investigation, Employer determined that Claimant had lied about his place of
residence in his application materials; as a result, Employer discharged Claimant for
making false statements in his application. Id. No. 6.
Claimant filed a claim for UC benefits, which the local UC Service Center
denied. Based on its review of the initial claim record, the Service Center found:
[C]laimant stated he thought he had six . . . months to move into
[Delaware C]ounty. [Employer’s] staff informed him that the six[-
]month period was not factual and no one would have cause to offer
him the [six-]month extension since he said he lived in Delaware
2
Employer’s residency policy states in pertinent part:
No [p]erson shall be eligible for employment with the County of Delaware unless
he or she is a resident of, and lives within the geographical boundaries of[,] the
County of Delaware.
An employee who lives in Delaware County at the time of employment and then
decides to move out of Delaware County will lose his/her right to continued
employment with the County of Delaware.
Record (R.) Item No. 4 (emphasis added).
2
[C]ounty. [C]laimant’s actions[] showed a deliberate violation of
[E]mployer’s rule/requirements and willful misconduct.
R. Item No. 6. Therefore, the Service Center determined that Claimant was
ineligible for UC benefits under Section 402(e) of the Law.
Claimant appealed to the Referee, who held a telephone hearing on October
16, 2020. Employer presented the testimony of its Leave Program Coordinator,
Christine Cuthbert, and Claimant testified on his own behalf.
Ms. Cuthbert testified that Employer discharged Claimant for “[f]alsification
of the application process.” Notes of Testimony (N.T.), 10/16/20, at 11. She
explained that Claimant identified his place of residence as Boothwyn,
Pennsylvania, on his job application and “on all his . . . paperwork for his
application,” but the driver’s license he subsequently provided to Employer had a
Wilmington, Delaware, address, “and that’s when we first started questioning where
he lived.” Id. at 11-12. Ms. Cuthbert explained:
I do the paperwork for new hires. When they fill out the paperwork for
new hires, with the I-9 [tax] form, we need [a] driver’s license, proof of
residency. So[] . . . we could take a passport, we take a driver’s license,
social security, and . . . we check to make sure that . . . the driver’s
license matches the items that they have given us . . . on record.
Id. at 20 (emphasis added).
Ms. Cuthbert testified that Employer then “took measures to see where
[Claimant] lived, and . . . found . . . that he was actually coming and going in the
mornings and evenings from the Wilmington, Delaware address.” Id. at 12. She
testified that Employer had “surveillance pictures . . . of [Claimant’s] car parked at
[his] Wilmington address . . . [o]n multiple days.” Id. at 15-16.
Ms. Cuthbert testified that, after the investigation, a meeting took place
between Claimant, Barbara Hatton, and Kate Bryan on May 27, 2020. Id. at 12-13.
3
Ms. Cuthbert was not present at the meeting, but she “sit[s] right outside [Ms.]
Hatton’s office” and “saw the meeting happen.” Id. at 13. She testified:
I did see them enter . . . the office. The meeting did happen, and
[Claimant] was terminated. . . . [T]he only thing I want to add is the
six-month policy, . . . since he stated he lived in the county, the six-
month policy[] . . . does not apply, because it’s more of a falsification
that . . . he was term[inated] for, and not that he lived out of the county.
It’s that he falsified where he lived.
Id. at 14 (emphasis added).
On cross-examination, Ms. Cuthbert testified that Marianne Grace was
Employer’s Executive Director at the time of Claimant’s hiring and was one of the
people responsible for hiring Claimant. Id. at 18. Ms. Cuthbert testified that
Employer discharged Ms. Grace a few weeks after Claimant’s discharge. Id. at 17-
18. Ms. Cuthbert also testified that she was not involved in Claimant’s interview
process, but she knew that he was interviewed by “many people.” Id. at 14-15.
Ms. Cuthbert further testified:
The six[-]month issue would’ve come into play if [Claimant had] said
I’m moving into Delaware County, but I live in Delaware. We would’ve
had him sign an affidavit stating he would move within six months. He
didn’t sign the affidavit because he never revealed [that] he lived in
Delaware. . . . Our entire statement is the falsification of the application
and where [Claimant] stated [he] lived. . . .
Id. at 31 (emphasis added).
Claimant testified that before working for Employer, he worked for the City
of Philadelphia for two years. Id. at 10. With regard to his residency, Claimant
testified:
I lived in Philadelphia, Pennsylvania for about the last two years prior
to taking the job in Delaware County, and I was in the process, literally
4
in the process, like, I had stuff all over the globe. . . . I was moving out
of my condo in Philadelphia, and I was moving back to Delaware
County. Now, my grandmother had died. I was in the process of
purchasing that house[] . . . I explained that to at least six people that .
. . interviewed me. . . .
Id. at 24 (emphasis added).
Claimant testified that the Boothwyn address on his application was his
deceased grandmother’s address and reiterated that he was “in the process” of
purchasing her home. Id. at 25. Claimant testified that when he applied for the
position, his thought process was: “[T]hey’re not going to harass me if I’m not all
the way in Delaware County right now, because I’ve got a lot of things in flux,” so
“I’ll apply for this job.” Id. Claimant further testified:
[Employer] bring[s] me in for eight interviews. . . . They all ask me so,
what’s your situation? How come you don’t work for Philadelphia
anymore? Don’t you have to live there to work there? I said yeah, . . .
I live there, I have a condo there, but . . . I’m moving back to Delaware
County, Pennsylvania. My grandmother just died a year and a half ago.
I’m in the process of buying her house. You know, my kids live in
Delaware. I got all kinds of issues but, you know, I’m going to end up
being in Delaware County at my grandmother’s house, okay? That was
the game plan for me[] . . . .
....
. . . I spoke to . . . eight people. I told them all my situation, and in
each of those interviews, they said don’t worry about it, you’re fine,
you [have] six months . . . to get all your stuff together . . . and switch
your driver’s license and do this and do that.
Id. at 25-26 (emphasis added). According to Claimant, the job description for the
Budget Director position “d[id]n’t say that [he] had to give a full disclosure of
anything before [he] got there.” Id. at 26.
5
Claimant testified that when he applied for the position, he “was living on a
consistent and regular basis at 1850 Larkin Road [in Boothwyn] at . . . [his] deceased
grandmother’s house.” Id. at 27. He also testified that he owns a property in
Chichester, Delaware County. Id. With regard to his grandmother’s home, Claimant
testified that “it’s still in [her] estate currently” and that, for the past year and a half,
his father and uncle have been “arguing about the price of the house so that
[Claimant] can buy it.” Id. at 29-30.
When asked about the Wilmington address on his driver’s license, Claimant
testified:
[P]rior to getting the job in Delaware County, I was offered a position
with the State of Delaware that I turned down to take the job at
Delaware County. So, I went to Delaware and got a Delaware driver’s
license, because that’s where I thought I was going to be, and then
Delaware County offered me the job, and I went to get a Pennsylvania
driver’s license, where I was actually living, and they said oh, we’re
closed [due to the COVID-19 pandemic].
Id. at 28. Claimant also testified:
[T]he reason that I don’t live in Delaware is because my wife and I are
having issues. That’s the bottom line. It’s none of Ms. Cuthbert’s
business, it’s none of [Employer’s] business at all, and I don’t feel that
I have to explain that, but that’s fine. If that’s . . . the issue that they
have, they should have asked me[] . . . , and I did, in full disclosure,
explain my situation to at least six people during the interview process.
Id. at 25.
Finally, Claimant testified:
If I was trying to be deceptive, I would’ve just put the address of the
property that I own [in Chichester] on the application, but that was not
my intent, and that was not the facts of the matter. . . . [Boothwyn was]
where I was living. That’s where I slept on a regular basis. Aside from
6
the times where I had to watch my kids [in Wilmington] because my
wife had to go to work.
Id. at 31-32 (emphasis added).
Following the hearing, the Referee concluded that Claimant was discharged
for falsifying his place of residence on his employment application, which amounted
to willful misconduct. Ref.’s Order, 10/26/20, at 2. The Referee discredited
Claimant’s testimony that he did not deliberately falsify his application because he
was in the process of moving to Delaware County. Id. The Referee explained his
ruling as follows:
[E]mployer[’s] witness argued that [C]laimant was discharged for
providing false information about his residency when he applied for the
position of Budget Director with the County of Delaware. [C]laimant
argued that he did not make a misrepresentation because he was in the
process of moving. For the following reasons, the [R]eferee does not
find [C]laimant’s statements regarding his residency credible and finds
that [E]mployer has met its burden of proving willful misconduct in
connection with [C]laimant’s work.
. . . [E]mployer determined that [C]laimant was living in Wilmington,
Delaware[,] despite stating that he lived in Delaware County,
Pennsylvania[,] when he applied for his position. According to
[E]mployer[’s] witness, had [C]laimant disclosed his residence, he
would have been afforded six months to relocate to Delaware County.
[C]laimant argued that he was never given the chance to move; the
[R]eferee finds [C]laimant’s argument immaterial because [E]mployer
discharged [him] for providing false information when applying for his
position. [E]mployer did not discharge [C]laimant for his place of
residence.
In response to [E]mployer’s basic allegation, [C]laimant stated that he
was going to move to Delaware County, and he actually lived in
Philadelphia County at the time of his application and employment with
Delaware County. In other words, even if [E]mployer was incorrect in
its conclusion that [C]laimant was living in Wilmington, Delaware,
[E]mployer’s material conclusions, i.e.[,] that [C]laimant
7
misrepresented his place of residence in his application, holds true;
[C]laimant did not reside in Delaware County when he asserted that
he did. Since [E]mployer discharged [C]laimant for providing false
information in his application for employment, [he] is still liable for
providing false information even if his actual residence [was] in
Philadelphia rather tha[n] Wilmington. In either case, he
misrepresented his residency when he applied [for] the . . . Budget
Director position. . . .
Id. at 2-3 (emphasis added). Therefore, the Referee concluded that Claimant was
ineligible for UC benefits under Section 402(e) of the Law. Id. at 3.3
Claimant appealed to the Board, which adopted the Referee’s findings of fact
and conclusions of law on the issue of willful misconduct and affirmed the Referee’s
decision. Bd.’s Order, 3/12/21, at 1. Claimant now appeals to this Court.4
Analysis
Our courts have defined “willful misconduct” as: (a) a wanton or willful
disregard of the employer’s interests; (b) a deliberate violation of the employer’s
rules; (c) a disregard for the standards of behavior that the employer rightfully can
expect of its employees; or (d) negligence indicating an intentional disregard of the
3
The Referee also determined that Claimant was liable for a fault overpayment in the
amount of $2,232. Ref.’s Order, 10/26/20, at 3. However, the Board subsequently reversed that
portion of the Referee’s Order, finding:
[C]laimant did not provide false information to the UC Service Center about the
reason for his discharge. [He] reported that he was discharged because [E]mployer
accused him of violating a residency rule, and that is accurate. Because there is
insufficient evidence that the overpayment was due to [C]laimant’s fault, a non-
fault overpayment is assessed under Section 804(b) of the . . . Law[, 43 P.S. §
874(b)].
Bd.’s Order, 3/12/21, at 1.
4
Our scope of review is limited to determining whether constitutional rights were violated,
whether an error of law was committed, and whether the necessary findings of fact are supported
by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S. § 704.
8
employer’s interests or of the employee’s duties or obligations. Grieb v.
Unemployment Comp. Bd. of Rev., 827 A.2d 422, 425 (Pa. 2003). The employer
bears the burden of proving that the claimant was discharged for willful misconduct.
Walsh v. Unemployment Comp. Bd. of Rev., 943 A.2d 363, 369 (Pa. Cmwlth. 2008).
This Court has held that “supplying false information on an employment
application constitutes willful misconduct justifying the denial of [UC] benefits.”
Huyett v. Unemployment Comp. Bd. of Rev., 477 A.2d 900, 901-02 (Pa. Cmwlth.
1984); see Sill-Hopkins v. Unemployment Comp. Bd. of Rev., 563 A.2d 1288, 1290
(Pa. Cmwlth. 1989). To satisfy its burden of proof, the employer must show that
“the [employee’s] falsification or concealment [was] deliberate, and that the
information [was] material to the qualifications of the employee for the job.”
Johnson v. Unemployment Comp. Bd. of Rev., 427 A.2d 724, 725 (Pa. Cmwlth.
1981).
First, Claimant challenges the Board’s findings that he lied about his place of
residence in his employment application and that Employer discharged him for
making false assertions in his application. Claimant’s Br. at 19. According to
Claimant, these findings imply that during the interview process, Claimant
deliberately concealed his living arrangements and, as to that issue, the Board’s
findings are “based entirely on [Ms.] Cuthbert’s [inadmissible] hearsay testimony.”
Id. at 20. We conclude that Claimant has mischaracterized the Board’s findings.
During her testimony, Ms. Cuthbert offered testimony regarding purported
verbal exchanges between other Employer representatives and Claimant about his
residency, and Claimant objected to some of that testimony on hearsay grounds. See
N.T., 10/16/20, at 14, 21, 30. Importantly, however, the Board did not rely on that
testimony in making its findings of fact or conclusions of law. Rather, the Board
9
based its willful misconduct determination on Claimant’s written representations in
his application paperwork, about which Ms. Cuthbert had personal knowledge as the
individual who “do[es] the paperwork for new hires.” Id. at 20; see Bd.’s F.F. No.
6 (“[E]mployer determined that [C]laimant had lied in his application materials
regarding his residence and discharged [him] for making false assertions in his
application.”) (emphasis added).
Next, Claimant asserts that the Board erred in concluding that he committed
willful misconduct because Employer failed to establish, and the Board did not
specifically find, that he deliberately misrepresented his place of residence on his
employment application. He claims that he did not intentionally misrepresent where
he lived, because the unrebutted evidence showed that he was regularly living in
Boothwyn at the time and he believed he had six months to move after he was hired.
Claimant’s Br. at 19, 28-29. We disagree.
It is undisputed that Claimant stated in his employment application that he
resided in Boothwyn, which is located in Delaware County. Bd.’s F.F. No. 2. At
the hearing, Claimant testified that he lived in Philadelphia for the prior two years
while working for the City of Philadelphia, but he was “in the process” of moving
into his deceased grandmother’s home in Boothwyn and was sleeping there “on a
regular basis.” N.T., 10/16/20, at 24-25, 32. The Board, however, rejected
Claimant’s testimony that he was regularly living in Boothwyn as not credible.
Ref.’s Order, 10/26/20, at 2; Bd.’s Order, 3/12/21, at 1; see Russo v. Unemployment
Comp. Bd. of Rev., 13 A.3d 1000, 1003 (Pa. Cmwlth. 2010) (stating that the Board
is the ultimate factfinder and is empowered to make credibility determinations and
reject the testimony of any witness); Korpics v. Unemployment Comp. Bd. of Rev.,
833 A.2d 1217, 1219 n.1 (Pa. Cmwlth. 2003) (“In making [credibility]
10
determinations, the Board may accept or reject the testimony of any witness in whole
or in part.”). While the Board did not use the term “deliberate” in describing
Claimant’s conduct, it found that “Claimant had lied in his application materials
regarding his residence,” Bd.’s F.F. No. 6 (emphasis added), which implies that his
representation was intentional and not unintentional or negligent.
Claimant also asserts that Employer failed to establish that his place of
residence was material to the Budget Director position, because Employer’s job
posting stated that an applicant must be willing to move to Delaware County within
six months after accepting the position. Claimant’s Br. at 29-30. In support of this
claim, Claimant offered into evidence one of Employer’s recent job postings for a
different position, which stated: “Residency Requirement: [Employer] has a
residency requirement for employees. Anyone applying for this job must reside in
Delaware County or be willing to move to Delaware County within six months of
starting employment.” N.T., 10/16/20, Claimant’s Ex. 2 (bold in original) (italics
added). Claimant also testified that during the interview process, Employer’s
representatives told him he did not need to worry about his residency because he
would have six months to move to Delaware County if he got the job. N.T.,
10/16/20, at 26.
“[W]here an employee is fired for supplying false information on his
employment application, an employer must show that the omitted information is
material to the employee’s qualifications for the job in order to establish willful
misconduct.” Bruce v. Unemployment Comp. Bd. of Rev., 450 A.2d 1083, 1085 (Pa.
Cmwlth. 1982) (emphasis added). Whether a given misrepresentation is material
depends on the facts of each case. Sill-Hopkins, 563 A.2d at 1290. The requirement
of materiality, however, is not limited “to formal job prerequisites only.” Scott v.
11
Unemployment Comp. Bd. of Rev., 474 A.2d 426, 427 (Pa. Cmwlth. 1984). In other
words, “it has never been the law that an employee must be truthful only as to matters
concerning specific job prerequisites and may freely provide false or misleading
information as to any other factor which could encourage an employer to select him
or her.” Sill-Hopkins, 563 A.2d at 1290.
In this case, the Board found that Employer has a policy requiring that its
employees reside in Delaware County. Bd.’s F.F. No. 5; R. Item No. 4. Claimant
was aware of Employer’s residency requirement when he applied for the Budget
Director position, as he admitted that the requirement was included in all of
Employer’s job postings. See N.T., 10/16/20, at 22; id., Claimant’s Ex. 2; R. Item
No. 7. Because county residency was a prerequisite to employment with Employer,
any false information about an applicant’s place of residence was necessarily
material to the qualifications for the position. See Scott, 474 A.2d at 427 (holding
that the claimant’s misrepresentation that he had a college degree in business
administration, when he did not, was willful misconduct where the educational
qualification was listed as one of the hiring criteria).
Claimant testified that when he applied for the job, he believed that he had six
months to move to Delaware County and that Employer was “not going to harass
[him] if [he was] not all the way in Delaware County . . . because [he had] a lot of
things in flux” and the job description “d[id]n’t say that [he] had to give a full
disclosure of anything before [he] got there.” N.T., 10/16/20, at 25-26. However,
Ms. Cuthbert, who handled the paperwork for new hires, credibly testified that if
Claimant had disclosed that he lived outside of Delaware County when he applied
for the position, Employer “would’ve had [Claimant] sign an affidavit stating he
would move [to Delaware County] within six months,” but Employer did not offer
12
him that opportunity because he identified his place of residence as Boothwyn. Id.
at 11, 20, 31; see also id. at 5 (Ms. Cuthbert testified that Claimant “filled all his
paperwork out with the address on record of 1850 Larkin Road, Boothwyn, PA”);
id. at 11-12 (Ms. Cuthbert testified that Claimant identified his place of residence as
Boothwyn on his job application and “on all his . . . paperwork for his application”).
We conclude that Employer established that county residency was material to
the qualifications for the Budget Director position. The fact that Employer would
offer a non-county resident an opportunity to move to Delaware County if he or she
were hired is irrelevant, because Claimant stated in his application that he lived in
Boothwyn and, as such, was already a Delaware County resident. Moreover,
Claimant’s representation in his application that he resided in Boothwyn might have
encouraged Employer to hire Claimant over other qualified candidates for the
position. See, e.g., Sill-Hopkins, 563 A.2d at 1290-91 (finding that the claimant’s
failure to disclose that she was denied registration to sell securities in Michigan was
material, even though the job requirements did not include selling securities in
Michigan, in part because her omission may have encouraged the employer to hire
her over other applicants and such an omission was “clearly inconsistent with her
position of trust”).
Finally, Claimant asserts that the Board’s decision is unsupported by
substantial, competent evidence. Claimant contends that Employer’s basis for
discharging him was factually inaccurate, because Employer determined that he
lived in Wilmington when he applied for the job, but the Board found that he lived
in Philadelphia. Claimant’s Br. at 30. According to Claimant, the Board exceeded
the scope of its authority when it found an alternate basis to support Employer’s
discharge of Claimant. Id. We disagree.
13
Our Court has stated that “[i]t is irrelevant whether the record contains
evidence to support findings other than those made by the fact[]finder; the critical
inquiry is whether there is evidence to support the findings actually made.”
Ductmate Indus., Inc. v. Unemployment Comp. Bd. of Rev., 949 A.2d 338, 342 (Pa.
Cmwlth. 2008) (emphasis added). “Where substantial evidence supports the Board’s
findings, they are conclusive on appeal.” Id.
Although Employer determined that Claimant lived in Wilmington, the record
contains sufficient evidence, in the form of Claimant’s own testimony, to support
the Board’s finding that Claimant lived in Philadelphia. Claimant testified that when
he applied for the position, he was living in Philadelphia and was “moving out of
[his] condo in Philadelphia and . . . was moving back to Delaware County.” N.T.,
10/16/20, at 24; see also id. at 25 (Claimant testified that when he was asked during
his interviews if he was living in Philadelphia, he “said yeah, . . . I live there, I have
a condo there, but . . . I’m moving back to Delaware County”); id. at 29 (Claimant
testified that he stated to each of his interviewers: “I have a condo in Philadelphia,
and that’s where I live”). Regardless of whether Claimant lived in Wilmington or
Philadelphia, neither of those cities is located in Delaware County. As the Board
properly determined: “[E]ven if [E]mployer was incorrect in its conclusion that
[C]laimant was living in Wilmington, Delaware, [E]mployer’s material conclusions,
i.e.[,] that [C]laimant misrepresented his place of residence in his application, holds
true; [C]laimant did not reside in Delaware County when he asserted that he did.”
Ref.’s Order, 10/26/20, at 3 (emphasis added); Bd.’s Order, 3/12/21, at 1. While
Claimant testified that he was “in the process” of moving into his grandmother’s
home in Boothwyn and slept there “on a regular basis,” N.T., 10/16/20, at 24-25, 32,
the Board discredited that testimony. Ref.’s Order, 10/26/20, at 2; Bd.’s Order,
14
3/12/21, at 1. Therefore, we agree with the Board that “[s]ince [E]mployer
discharged [C]laimant for providing false information in his application for
employment, [he] is still liable for providing false information even if his actual
residence [was] in Philadelphia rather tha[n] Wilmington.” Ref.’s Order, 10/26/20,
at 3 (emphasis added); Bd.’s Order, 3/12/21, at 1.
Conclusion
We conclude that the record contains substantial evidence to support the
Board’s determination that Claimant committed disqualifying willful misconduct
under Section 402(e) of the Law by falsifying his place of residence in his
application materials. Accordingly, we affirm the Board’s Order.
____________________________
ELLEN CEISLER, Judge
Judges Fizzano Cannon and Dumas did not participate in the decision of this case.
15
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Jeffry Schott, :
Petitioner :
:
v. : No. 778 C.D. 2021
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 17th day of November, 2022, the Order of the Unemployment
Compensation Board of Review, dated March 12, 2021, is hereby AFFIRMED.
____________________________
ELLEN CEISLER, Judge | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484431/ | IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Commonwealth of Pennsylvania :
:
v. : No. 748 C.D. 2021
: ARGUED: October 11, 2022
Kenneth L. Trainer, Jr., :
Appellant :
BEFORE: HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE LORI A. DUMAS, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE LEADBETTER FILED: November 17, 2022
This case raises the novel question of whether a trial court may resolve
a motion for return of property under Pennsylvania Rule of Criminal Procedure 588,
where there is no evidence presented by the Commonwealth, if it orders sale of the
property and return of the cash proceeds to the owner. It cannot. As such, we reverse
the order of the trial court and remand with directions to enter an order directing the
return of the property.1
Appellant, Kenneth L. Trainer, Jr., appeals from the order of the Court
of Common Pleas of Allegheny County directing that a pistol owned by him be
transferred from the possession of the Pittsburgh Police Department to the
1
The Commonwealth Court generally maintains jurisdiction over appeals from civil forfeiture
decisions. See Section 762 of the Judicial Code, 42 Pa.C.S. § 762; Commonwealth v. Irland, 193
A.3d 370, 372 n.4 (Pa. 2018). Although, unlike Irland, no formal forfeiture proceeding has been
instituted, and the Commonwealth denies that it is seeking forfeiture, our jurisdiction over appeals
from adjudications of petitions for return of property is clear and is not here questioned.
possession of a licensed gun dealer “to be sold at fair market value.” Order,
Commonwealth v. Trainer (Allegheny C.C.P., Crim. Div., MD No. 1354-2021, filed
June 8, 2021). The trial court continued, “[a]fter retaining a standard commission,
proceeds are to be remitted to [Appellant].” (Id.)
The record in this case is sparse. The motion for return of property,
brought under Pennsylvania Rule of Criminal Procedure 588 and filed April 21,
2021, avers that Appellant was the subject of an “unsupported” criminal complaint
arising from an allegation of domestic assault on November 4, 2020. (Mot.,
Reproduced Record “R.R.” at 2.) As a result of these allegations, the police took
one Glock 22, .40 caliber semi-automatic pistol bearing serial number BHPB204,
that the Commonwealth has stipulated Appellant owns (see Hr’g Tr. at 4, R.R. at
11). On April 6, 2021, the underlying criminal charges were withdrawn in Pittsburgh
Municipal Court. After the withdrawal of the charges, the police retained possession
of the pistol and Appellant filed his motion for return of property.
The trial court held a telephonic hearing on the matter on June 8, 2021.
The Commonwealth objected to the return and made various allegations concerning
Appellant’s conduct underlying the seizure of the gun and prior conduct.
Specifically, the Commonwealth alleged that the underlying facts leading to the
withdrawn charges were that Appellant had brandished the pistol and threatened to
kill his girlfriend and that this was Appellant’s third arrest for simple assault (each
of which the Commonwealth acknowledged were withdrawn or nolle prossed). This
being the case, the Commonwealth stated that it “cannot in good conscious [sic]
agree to the return” of the pistol. (Id. at 2-3, R.R. at 9-10.) Appellant argued that
with the stipulation of his ownership of the pistol, the burden shifted to the
2
Commonwealth to show that the pistol was contraband and that there was no
evidence to that effect. (Id. at 5, R.R. at 12.)
During the hearing, the trial court stated as follows:
Under [Pennsylvania Rule of Criminal Procedure] 588 . .
. the Commonwealth is required to return the gun if, in
fact, that [sic] he legally owns it and he has not been
convicted of a crime, rather than request that the Court
order it sold and proceeds returned. When the
Commonwealth has submitted evidence of three incidents
involving him brandishing the firearm, the last one, at his
girlfriend, where he allegedly made threats to kill her, even
when those cases are nolle prossed, because it does seem
to me that the Sheriff’s Department would have the right
to deny him a conceal [sic] carry permit under those
circumstances.
[Id. at 5-6, R.R. at 12-13 (emphasis supplied)]. Counsel for Appellant argued that
the issue of a concealed carry permit was separate from his right to the return of the
pistol, to which the trial court replied:
No, I understand that. What I’m saying, though, is if the
Sheriff’s Department has the authority to do that, would
the Court also have the authority, where there are
allegations concerning enough that he is not a responsible
gun owner, to require that a gun that he legally purchased
be sold and the proceeds returned[?]
(Id. at 6, R.R. at 13.) The Commonwealth noted that the conversion of firearms to
cash and return of cash, instead of the firearms, to the owners is “done on a daily
basis in the Court of Common Pleas of Allegheny County under such
circumstances.” (Id.)2 The trial court agreed that the Court of Common Pleas of
Allegheny County “does this routinely” and agreed to sign an order to sell the pistol
2
The circumstances under which this procedure is invoked are not further described in the
record, but such clarification is not relevant to our disposition here.
3
and return the proceeds. (Id. at 7, R.R. at 14.) Appellant then stated his intention to
pursue an appeal and the trial court agreed to stay its order pending the appeal. In
an opinion filed under Pennsylvania Rule of Appellate Procedure 1925(a), the trial
court determined that the pistol was derivative contraband and affirmed its order.
On appeal, Appellant presents one question: whether the trial court
erred by denying his motion for return of property where the Commonwealth
produced no evidence to show that Appellant’s firearm was derivative contraband.
The Commonwealth presents a counterstatement of the question presented: whether
the trial court permissibly ordered the sale of the pistol, with the proceeds to be
remitted to him, in lieu of returning the pistol itself.3 Under either phrasing, we
believe the order of the trial court was clearly erroneous.
Rule 588 provides in relevant part as follows:
(A) A person aggrieved by a search and seizure, whether
or not executed pursuant to a warrant, may move for
the return of the property on the ground that he or she
is entitled to lawful possession thereof. Such motion
shall be filed in the court of common pleas for the
judicial district in which the property was seized.
3
Appellant, in his Concise Statement of Errors Complained of on Appeal under Pennsylvania
Rule of Appellate Procedure 1925(b) (Appellant Br. at Ex. B), raised two constitutional questions.
The first pertained to takings under article I, section 10 of the Pennsylvania Constitution, with
regard to the “transfer-sell-then-pay” nature of the trial court’s order as violating the prohibition
against “private property be[ing] taken . . . without authority of law and without just compensation
being first made or secured,” Pa. Const., art. I, § 10. The second pertained to the order’s deduction
of a “standard commission” for the sale of the pistol violating Appellant’s right to “just
compensation” under both the federal and state constitutions. Because they were not raised at the
hearing, the trial court deemed these issues waived. (Trial Ct. Op. at 2-3.) Despite reservations
about whether there was actually a previous opportunity to raise these issues, Appellant abandoned
them on appeal in favor of pursuing the question not raising a constitutional dimension. (Appellant
Br. at 7 n.1.) At all events, where a case can be resolved on other grounds, we should not reach
constitutional issues. Ballou v. State Ethics Comm’n, 436 A.2d 186 (Pa. 1981).
4
(B) The judge hearing such motion shall receive evidence
on any issue of fact necessary to the decision thereon.
If the motion is granted, the property shall be restored
unless the court determines that such property is
contraband, in which case the court may order the
property to be forfeited.
Pa. R. Crim. P. 588(A)-(B) (emphasis supplied). Under this rule, on any motion for
return of property, the moving party must establish by a preponderance of the
evidence entitlement to lawful possession. Commonwealth v. Mosley, 702 A.2d 857,
859 (Pa. 1997). Once that is established, unless there is countervailing evidence to
defeat the claim, the moving party is entitled to the return of the identified property.
Singleton v. Johnson, 929 A.2d 1224, 1227 (Pa. Cmwlth. 2007). If the
Commonwealth seeks to defeat the claim, it bears the burden to prove, by a
preponderance of the evidence, that the items are either “contraband per se” or
“derivative contraband,” and therefore should not be returned to the moving party.
Commonwealth v. Crespo, 884 A.2d 960, 961 n.4 (Pa. Cmwlth. 2005). Clearly, the
pistol is not contraband per se because its possession, in itself, is not illegal. See
Commonwealth v. Howard, 713 A.2d 89, 92 (Pa. 1998) [quoting Commonwealth v.
Fassnacht, 359 A.2d 800, 802 (Pa. Super. 1977)]. To meet its burden to prove that
an item is derivative contraband, the Commonwealth must establish a specific nexus
between the property and criminal activity. Commonwealth v. Howard, 713 A.2d
89, 92 (Pa. 1998). In this case, the trial court concluded, and the Commonwealth
argues, that the pistol is derivative contraband because it has been “used in the
perpetration of unlawful acts.” Id.
In this case, the trial court erred by not requiring any evidence, first
because that is a mandatory requirement under both Rule 588(B) (“[t]he judge
hearing such motion shall receive evidence on any issue of fact necessary to the
5
decision thereon”), Pa. R. Crim. P. 588(B) (emphasis supplied), and because case
law requires the demonstration by a preponderance of evidence of a nexus between
criminal activity and the property. Of course, these are no more than specific
directives in accordance with the general principle that any adjudication that
involves resolution of disputed facts must be based on competent evidence. The trial
court accepted the prosecutor’s allegations of Appellant’s criminal activity, rather
than requiring evidentiary proof, despite the explicit acknowledgment by the
Commonwealth that all criminal charges against Appellant were withdrawn or nolle
prossed. The trial court correctly noted that “[e]ven where there is an acquittal,
derivative contraband may be subject to forfeiture.” (Trial Ct. Op. at 4).
Nonetheless, the trial court’s citation to cases stating that a conviction is not required
to support a finding that property is derivative contraband is beside the point—the
issue here is a lack of evidence, not the lack of a conviction. “Generally, an
attorney’s statement in an argument does not constitute evidence.” Sch. Dist. of
Phila. v. Bd. Revision of Taxes, 217 A.3d 472, 485 (Pa. Cmwlth. 2019) [citing E.
Norriton Twp. v. Gill Quarries, Inc., 604 A.2d 763, 766 n.9 (Pa. Cmwlth. 1992)
(“[S]elf-serving, unsubstantiated and unsworn statements by counsel are not
competent evidence.”)]. We have carefully reviewed the original record and found
nothing other than the prosecutor’s statements to support the trial court’s finding.4
4
The Commonwealth also relies on Section 5806 of the Judicial Code, 42 Pa.C.S. § 5806
(relating to motion for return of property), which provides:
Contents of motion.--A motion under this section shall:
....
(3) Identify the relief sought, which may include:
(i) Return of the petitioner’s property.
(Footnote continued on next page…)
6
We understand the public safety concerns of the Commonwealth and
the trial court about the gravity and number of offenses alleged to have been
committed by Appellant but in the absence of evidence, a motion for return of
property must be granted and the seized property must be returned. Accordingly,
we reverse the trial court’s order and remand with directions to issue an order
compelling the Pittsburgh Police Department to return the pistol to Appellant.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita
(ii) Reimbursement for the petitioner’s legal interest in the
property.
(iii) Severance of the petitioner’s property from the forfeited
property.
(iv) Any relief the court deems appropriate and just.
42 Pa.C.S. § 5806(b)(3). We need not consider whether the type of relief ordered here might be
appropriate in other circumstances not present in this case. Suffice it to say that, in all cases, in the
absence of competent evidence justifying a different result, the property must be returned.
7
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Commonwealth of Pennsylvania :
:
v. : No. 748 C.D. 2021
:
Kenneth L. Trainer, Jr., :
Appellant :
ORDER
AND NOW, this 17th day of November, 2022, the Order of the Court
of Common Pleas of Allegheny County is REVERSED and this matter is
REMANDED. The Court of Common Pleas of Allegheny County is directed to
issue an order to the Pittsburgh Police Department returning the Glock 22, .40 caliber
semi-automatic pistol bearing serial number BHPB204 to Kenneth L. Trainer, Jr.,
WITHIN 30 DAYS OF THE DATE OF THIS ORDER.
Jurisdiction is relinquished.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484430/ | IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Connect A Care Network, LLC, :
Petitioner :
:
v. : No. 95 C.D. 2021
: SUBMITTED: July 1, 2022
State Workers’ Insurance Fund and :
Elaine Davis (Workers’ Compensation :
Appeal Board), :
Respondents :
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ELLEN CEISLER, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE LEADBETTER FILED: November 17, 2022
Connect A Care Network, LLC (Employer), a home care provider,
petitions for review from the decision of the Workers’ Compensation Judge (WCJ),
affirmed by the Workers’ Compensation Appeal Board, finding that it did not have
a workers’ compensation insurance policy with the State Workers’ Insurance Fund
(SWIF) in effect on May 17, 2016, when Claimant Elaine Davis was injured in the
course of her work for Employer. We affirm.
The sole question raised on appeal is whether Employer had an
effective workers’ compensation policy with SWIF on the date of Ms. Davis’s
injury. Therefore, our recitation of the facts and procedural history focuses on those
aspects of the record relevant to that issue.
Claimant’s initial petition, filed June 14, 2016, alleged that she
sustained extensive injuries when she was assaulted by a client of Employer and
sought total disability benefits. On September 26, 2016, Claimant filed an uninsured
claim petition against Employer and the Uninsured Employers Guaranty Fund
(UEGF). On April 17, 2017, Claimant filed a joinder petition against SWIF
contending that it was Employer’s workers’ compensation carrier on the date of the
injury. On June 20, 2017, SWIF filed a joinder petition against UPMC Work
Partners alleging that it provided coverage for Employer on the date of the injury.
SWIF presented the deposition testimony of Jack Savitz, SWIF’s acting
underwriting manager and records custodian, who testified to the effect that
Employer did not have a workers’ compensation policy in effect with SWIF on the
date of the injury, the policy having been cancelled by Employer effective November
1, 2015, and that Employer was in the process, but had yet to finalize, the application
for a new policy on the date of the injury. Employer presented the deposition
testimony of Bennie Pettway, Employer’s acting Chief Executive Officer and
founder. Ms. Pettway testified that she believed that Employer was insured by SWIF
on the date of the injury. The WCJ specifically accepted Mr. Savitz’s testimony as
credible (WCJ Dec., Finding of Fact “F.F.” No. 29) and rejected Ms. Pettway’s
testimony that she reasonably believed that she had purchased insurance that was in
effect on the date of the injury as “not worthy of belief,” (WCJ Dec., F.F. No. 16).
The WCJ ultimately found that Employer did not have workers’ compensation
coverage through either SWIF or UPMC Work Partners. Thus, the WCJ denied
Claimant’s joinder petition against SWIF and SWIF’s joinder petition against
UPMC Work Partners. (WCJ Dec., Conclusions of Law Nos. 4 and 7.)
2
Of relevance to this appeal, Employer and UEGF appealed the WCJ’s
decision with respect to the finding that Employer did not have coverage in effect
with SWIF on the date of the injury. The Board disagreed and, in an adjudication
dated February 19, 2020, affirmed the WCJ’s conclusion that Employer did not have
a policy with SWIF in effect on the date of the injury. Later, after remand on an
unrelated issue, by Order dated January 8, 2021, the Board made final its February
2020 decision.1
As stated, Employer’s sole issue on appeal is whether the WCJ erred in
finding that it was not insured by SWIF on the date of the injury. It is well
established that a WCJ has jurisdiction to determine questions of insurance coverage.
Overhead Door Co. of Lewistown, Inc. v. Workers’ Comp. Appeal Bd. (Gill), 819
A.2d 635, 639 (Pa. Cmwlth. 2003). This jurisdiction includes authority to determine
whether or not a policy has been cancelled. Workmen’s Comp. Appeal Bd. v. Cicioni,
370 A.2d 1256, 1257 (Pa. Cmwlth. 1977).
SWIF presented the testimony of Mr. Savitz with accompanying
exhibits. (Savitz Dep. at 1-85; Reproduced Record “R.R.” at 109a-93a; Savitz Exs.
1-14, R.R. 194a-326a.) Mr. Savitz testified that Employer initiated workers’
compensation coverage with SWIF on January 23, 2014. (Savitz Dep. at 16.) The
policy was renewed for the period of January 23, 2015, through January 23, 2016.
(Id. at 20-24.) However, this renewal did not remain in effect for the entire year
specified, as there were occasions when Employer paid late resulting in pending
cancellation or cancellation. (Id. at 24-25.)2 Additionally, SWIF received notice
1
UEGF reached a settlement with Claimant for which Employer would be liable.
2
We note in passing that, even if the policy had continued through January of 2016, it would
not have been in effect in May of 2016 when Claimant was injured.
3
from the Pennsylvania Compensation Rating Bureau that Employer had duplicate
coverage with another company, UPMC Work Partners, effective November 1,
2015. (Id. at 25.) Therefore, SWIF canceled Employer’s policy as of November 1,
2015. (Id. at 26; Letter from SWIF dated Jan. 19, 2016, Savitz Ex. 5, R.R. at 256a.)
Mr. Savitz identified the notice of cancellation that SWIF issued, stating that
Employer’s policy was canceled with an effective date of November 1, 2015. (Savitz
Dep. at 33; Letter from Pa. Dep’t of Labor & Indus., dated Feb. 4, 2016, Savitz Ex.
7, R.R. at 260a.) Employer once again applied for insurance with SWIF in March
2016; this application was denied by SWIF because it was missing information.
(Savitz Dep. at 35-40; Appl., Savitz Ex. 8, R.R. at 261a-80a; Letter from Pa. Dep’t
of Labor & Indus. dated April 29, 2016, Savitz Ex. 9, R.R. at 281a-83a.) Mr. Savitz
testified that on May 17, 2016, Employer had no workers’ compensation policy
effective with SWIF, and SWIF was never informed of Claimant’s work injury after
it occurred. (Id. at 43.)
Employer asks the Court to rely upon Ms. Pettway’s testimony to
establish that there was some “ambiguity” as to the status of Employer’s policy with
SWIF and to parlay that ambiguity into a presumption that the insurance policy was
in effect. However, the WCJ is the finder of fact and is free to accept or reject, in
whole or in part, the testimony of any witness. Greenwich Collieries v. Workmen’s
Comp. Appeal Bd. (Buck), 664 A.2d 703, 706 (Pa. Cmwlth. 1995). There is
substantial, competent evidence in the record to support the WCJ’s findings, and this
Court does not have the authority to review her well-reasoned credibility
4
determinations.3 Id. As the testimony presented by Mr. Savitz supports the WCJ’s
findings, they are binding.
In light of the foregoing, the order of the Board is affirmed.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita
Judge Fizzano Cannon and Judge Dumas did not participate on the decision for this
case.
3
The WCJ offered the following reasons for rejecting key elements of Ms. Pettway’s
testimony regarding Employer’s contractual relationship with SWIF:
To the extent that Ms. Pettway testified that she reasonably believed
that she purchased a workers’ compensation insurance policy from
SWIF which was in effect on May 17, 2016, her testimony is
rejected as not worthy of belief for the following reasons: 1) Ms.
Pettway testified that she “never canceled the SWIF policy” yet Ms.
Pettway signed a Cancelation Request/Policy Release on October
26, 2015[,] that was faxed to SWIF by her broker requesting a
cancelation of her workers’ compensation insurance policy with
SWIF effective November 1, 2015. Ms. Pettway’s testimony that
she did not sign that particular form is thoroughly incredible in that
the numerous other documents that she authenticated that contained
her signature reflected the same unusual was [sic] Ms. Pettway
signed the “B” in Bennie; 2) Even though Ms. Pettway testified that
she completed a new application for workers’ compensation
insurance coverage with SWIF on or about March 10, 2016, she
inexplicably denied that it was her signature on the application
forms; [and] 3) Ms. Pettway testified that she received the new
policy after the March 10, 2016 application (although purportedly
she did not sign that application), yet no such policy was submitted
into evidence.
(WCJ Dec., F.F. No. 23.)
5
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Connect A Care Network, LLC, :
Petitioner :
:
v. : No. 95 C.D. 2021
:
State Workers’ Insurance Fund and :
Elaine Davis (Workers’ Compensation :
Appeal Board), :
Respondents :
ORDER
AND NOW, this 17th day of November, 2022, the January 8, 2021
Order of the Workers’ Compensation Appeal Board is AFFIRMED.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484429/ | IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Joseph Kennedy, :
Petitioner :
:
v. : No. 846 C.D. 2020
: SUBMITTED: September 23, 2022
Pennsylvania Parole Board, :
Respondent :
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ELLEN CEISLER, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE LEADBETTER FILED: November 17, 2022
Joseph Kennedy petitions for review of an order of the Pennsylvania
Parole Board, which denied his administrative appeal of his parole violation
maximum sentence date. In addition, Kennedy’s counsel, Richard C. Shiptoski,
Esquire, has filed a petition for leave to withdraw as counsel, asserting that
Kennedy’s petition is without merit. After review, we grant counsel’s petition and
affirm the Board’s order.
In 2010 and 2011, Kennedy was sentenced to two consecutive terms of
one to three years each – the first for carrying a firearm without a license, and the
second for criminal conspiracy and manufacture, delivery, or possession with intent
to manufacture or deliver a controlled substance. (Certified Record “C.R.” at 1.)
Kennedy’s original maximum date was May 12, 2016; however, following his initial
release on parole and subsequent recommitment as a parole violator, the Board
recalculated his maximum date as August 16, 2019. (Id. at 1-2.) Kennedy was again
released on parole on February 9, 2017, but was arrested on May 9, 2017, and
charged with manufacture, delivery, or possession with intent to manufacture or
deliver a controlled substance, simple possession, and firearm offenses.1 (Id. at 8,
12-14.)
On May 10, 2017, the Board lodged a detainer for Kennedy. (Id. at 16.)
That same day bail was set on Kennedy’s new charges at one million dollars (10%),
which he did not post; therefore, he remained in custody on both the new criminal
charges and the Board’s detainer.2 (Id. at 53.) On April 5, 2018, Kennedy pled
guilty to one count each of manufacture, delivery, or possession with intent to
manufacture or deliver a controlled substance, and possession of a firearm
prohibited. (Id. at 28, 53-54, 58.) The remaining charges were nolle prossed and
Kennedy was sentenced to 3 years, 6 months to 10 years of imprisonment. (Id. at
28, 55, 58.) As a result of this new conviction, in September 2018, the Board
recommitted Kennedy to a state correctional institution to serve 24 months of
backtime as a convicted parole violator and recalculated his parole violation
maximum date as December 11, 2020.3 (Id. at 62-63.) The Board did not award
1
The criminal complaint and arrest report issued following Kennedy’s arrest indicate that he
was found to be in possession of three firearms, one of which had an obliterated or altered serial
number. (C.R. at 13-14.)
2
We note that on May 17, 2017, Kennedy waived his right to a detention hearing before the
Board. (C.R. at 24.)
3
While Kennedy’s recalculated parole violation maximum date has passed, he remains
incarcerated under the jurisdiction of the Pennsylvania Department of Corrections. See
Inmate/Parolee Locator, Pa. Dep’t of Corr., http://inmatelocator.cor.pa.gov (last visited November
16, 2022). As such, this matter is not moot because any error in the recalculation of his maximum
date could affect the timing of subsequent sentences he may now be serving. Seilhamer v. Pa. Bd.
of Prob. & Parole, 996 A.2d 40, 42 n.2 (Pa. Cmwlth. 2010).
2
Kennedy credit for time spent at liberty on parole for the stated reason: “conviction
involved possession of a weapon.” (Id. at 62.)
In October 2018, Kennedy filed an administrative appeal contending
that the Board erred or abused its discretion in failing to award credit against his
original sentence for his presentence confinement and time at liberty on parole, and
that the Board incorrectly calculated his maximum sentence date. (Id. at 64-67.)
Kennedy further argued that the Board lacked the authority to recalculate his
maximum sentence date. (Id. at 66.) By decision with a mailing date of July 31,
2020, the Board denied Kennedy’s appeal, explaining that its recommitment of
Kennedy as a convicted parole violator authorized it to both deny him credit for time
spent at liberty on parole and recalculate his maximum sentence date. (Id. at 86-88.)
The Board noted that its decision to deny Kennedy credit for time at liberty on parole
was based on the fact that his new conviction involved possession of a weapon, and
that this reasoning satisfied the requirements announced in Pittman v. Pennsylvania
Board of Probation & Parole, 159 A.3d 466 (Pa. 2017). The Board further
explained that Kennedy had 918 days remaining on his sentence at the time he was
paroled in February 2017, and that his recalculated maximum sentence date reflects
that remaining balance of time. (Id. at 86.) Finally, the Board noted that Kennedy’s
presentence confinement was not solely on the Board’s detainer and, thus, was
credited to his new sentence, not the backtime remaining on his original sentence.
(Id. at 87.)
Kennedy appealed to this Court and counsel subsequently filed a
petition for leave to withdraw as counsel, along with an Anders brief,4 asserting that
Kennedy’s claims are frivolous. In a memorandum opinion filed on May 11, 2021,
4
Following counsel’s filing of the petition and brief in support thereof pursuant to Anders v.
State of California, 386 U.S. 738 (1967), Kennedy filed a brief on his own behalf.
3
this Court noted that we could not determine the timeliness of Kennedy’s
administrative appeal based upon the record before us. See Kennedy v. Pa. Parole
Bd. (Pa. Cmwlth., No. 846 C.D. 2020, filed May 11, 2021) (Kennedy I), slip op. at
4-5. As such, we remanded the matter to the Board to make a factual determination
and/or explain the date discrepancies noted in our opinion. Id., slip op. at 5. We
also held counsel’s petition for leave to withdraw as counsel pending the Board’s
remand decision. Id. The Board has since certified a supplemental record to the
Court, including its Administrative Action of June 1, 2021, in which it found
Kennedy’s administrative appeal to be timely.5 (Suppl. C.R. at 3A.)
The remand having been completed, we must first address counsel’s
petition to withdraw and determine whether he has satisfied the requirements that
appointed counsel must meet before leave to withdraw may be granted. Seilhamer
v. Pa. Bd. of Prob. & Parole, 996 A.2d 40, 42-44 (Pa. Cmwlth. 2010). In that regard,
the following is well established:
A court-appointed counsel who seeks to withdraw
representation because issues raised by the petitioner are
frivolous must fulfill the following technical
requirements: (1) he must notify [the] parolee of [the]
request to withdraw; (2) he must furnish [the] parolee with
a copy of an Anders brief or no-merit letter; and (3) he
must advise [the] parolee of his right to retain new counsel
or raise any new points that he might deem worthy of
consideration.
5
The Board specifically found that its revocation decision was mailed on September 25, 2018,
and that Kennedy’s administrative appeal was signed on October 24, 2018, and received by the
Board on October 31, 2018. (Suppl. C.R. at 3A.) Because the envelope containing Kennedy’s
administrative appeal was not postmarked, the Board accepted the October 24, 2018 date as the
mailing date, pursuant to the prisoner mailbox rule, making Kennedy’s administrative appeal
timely. (Id.) See Kennedy I, slip op. at 3-4 (discussing import of prisoner mailbox rule).
4
Banks v. Pa. Bd. of Prob. & Parole, 827 A.2d 1245, 1248 (Pa. Cmwlth. 2003)
(footnote omitted). Further, “[c]ounsel’s brief or no-merit letter[6] must set forth: (1)
the nature and extent of his review of the case; (2) the issues the parolee wishes to
raise on appeal; and (3) counsel’s analysis concluding that the appeal has no merit .
. . .” Encarnacion v. Pa. Bd. of Prob. & Parole, 990 A.2d 123, 126 (Pa. Cmwlth.
2010) (citations omitted).
Upon review of counsel’s petition and accompanying Anders brief, it is
clear that he satisfied both the procedural and substantive requirements necessary to
withdraw as counsel. With regard to the procedural requirements, counsel: (1)
notified Kennedy of his request to withdraw as counsel; (2) furnished Kennedy with
a copy of his petition to withdraw and Anders brief in support thereof; and (3)
advised Kennedy of the right to retain new counsel, to proceed pro se, and to raise
any additional issues that he deems worthy of review by this Court. Further, in his
Anders brief, counsel set forth: (1) the nature of his review of the case; (2) the issues
that Kennedy sought to raise in his petition for review; and (3) an explanation as to
why he believed that the issues are without merit.
Turning to our review of the merits of the petition for review, Kennedy
first claims that the Board abused its discretion by denying him credit for his time
spent at liberty on parole. Despite Kennedy’s argument to the contrary, the Board
has discretion to award a convicted parole violator credit for the time spent at liberty
on parole, except where he or she is recommitted for the reasons stated in Section
6138(a)(2.1)(i) of the Prisons and Parole Code, 61 Pa.C.S. § 6138(a)(2.1)(i), which
6
Where, as here, “an Anders brief is filed when a no-merit letter would suffice, the Anders
brief must at least contain the same information that is required to be included in a no-merit letter.”
Seilhamer, 996 A.2d at 42-43.
5
does not apply here.7 Further, the Board must articulate the basis for its decision to
grant or deny credit for that time. Pittman, 159 A.3d at 474. “[T]he reason the Board
gives does not have to be extensive and a single sentence explanation is likely
sufficient in most instances.” Id. at 475 n.12. Here, the Board justified its decision
to recommit Kennedy without credit for the time he spent at liberty on parole by
explaining that Kennedy’s new conviction involved possession of a weapon. (C.R.
at 62.) We have repeatedly held that this exact reason is sufficient, under Pittman,
to support the Board’s decision to deny credit. See, e.g., Carroll v. Pa. Parole Bd.
(Pa. Cmwlth., No. 756 C.D. 2020, filed March 30, 2021), slip op. at 6; Hayward v.
Pa. Bd. of Prob. & Parole (Pa. Cmwlth., No. 1735 C.D. 2017, filed July 18, 2018),
slip op. at 5.8 Given the above and the level of deference owed to the Board, we find
that it did not abuse its discretion when it denied Kennedy credit for his time spent
at liberty on parole.
Next, Kennedy argues that the Board lacked the authority to extend or
recalculate his sentence, as imposed by the sentencing judge. Even if it has such
authority, Kennedy claims that the Board erred in its recalculation because it failed
to give him credit for the time he spent incarcerated solely on the Board’s warrant.
While it is true that “the Board does not have the power to alter a judicially[ ]imposed
sentence,” it may require a parolee to serve the remaining balance of his unexpired
term. Savage v. Pa. Bd. of Prob. & Parole, 761 A.2d 643, 645 (Pa. Cmwlth. 2000).
7
Kennedy erroneously claims that Section 6138(a)(2.1)(i) of the Prisons and Parole Code
provides that the Board must grant a parolee credit for time spent at liberty on parole when he
commits a crime other than those specifically listed in that section.
8
We cite our previous unreported memorandum opinions for their persuasive value, not as
binding precedent. Section 414(a) of the Commonwealth Court’s Internal Operating Procedures,
210 Pa. Code § 69.414(a). The Court’s decisions in Carroll and Hayward are particularly
persuasive as they include the same reasoning by the Board for denying credit.
6
See also Hughes v. Pa. Bd. of Prob. & Parole, 179 A.3d 117, 120 (Pa. Cmwlth.
2018) (citing 61 Pa.C.S. § 6138(a)(2), (2.1), and explaining that if parolee is
recommitted as convicted parole violator, he must serve the remainder of the term
that he would have been compelled to serve had parole not been granted, i.e.,
backtime). Here, rather than improperly extending a judicially imposed sentence,
the Board merely determined that Kennedy, as a convicted parole violator, owed 918
days of backtime on his original sentence, and recalculated accordingly. (C.R. at
86.) Finally, the record does not support Kennedy’s contention that he posted bail
on his most recent criminal charges. (See C.R. at 53, 56-57, 87.) Accordingly,
Kennedy’s argument that he was held solely on the Board’s warrant, and is therefore
entitled to credit against his original sentence, is meritless. See Hughes, 179 A.3d
at 121-22 [citing Gaito v. Pa. Bd. of Prob. & Parole, 412 A.2d 568 (Pa. 1980)].9
For the foregoing reasons, we agree that Kennedy’s appeal is without
merit. Accordingly, we grant counsel’s petition for leave to withdraw and affirm the
Board’s order.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita
9
Kennedy attempts to raise additional arguments in his pro se brief, including issues
surrounding previous decisions of the Board, his claim that his maximum sentence date expired
prior to his most recent arrest, and a challenge to his custody for return date. However, these
arguments have been waived because they were not included in either Kennedy’s administrative
appeal or his petition for review. Chesson v. Pa. Bd. of Prob. & Parole, 47 A.3d 875, 878 (Pa.
Cmwlth. 2012) (issues not raised either before the Board or in a petition for review are waived).
Moreover, the only arguments properly before the Court are those pertaining to the Board’s
decision underlying this appeal.
7
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Joseph Kennedy, :
Petitioner :
:
v. : No. 846 C.D. 2020
:
Pennsylvania Parole Board, :
Respondent :
ORDER
AND NOW, this 17th day of November, 2022, Richard C. Shiptoski,
Esquire’s petition to withdraw as counsel is GRANTED and the order of the
Pennsylvania Parole Board is AFFIRMED.
_____________________________________
BONNIE BRIGANCE LEADBETTER,
President Judge Emerita | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484427/ | IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Susan Douglas, :
Petitioner :
:
v. :
:
Unemployment Compensation :
Board of Review, : No. 226 C.D. 2022
Respondent : Submitted: August 26, 2022
BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE STACY WALLACE, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: November 17, 2022
Susan Douglas (Claimant) petitions for review of an order of the
Unemployment Compensation (UC) Board of Review (Board) that dismissed as
untimely her appeal from a Referee’s decision. Upon review, we affirm the Board’s
order.
On February 22, 2021, the Referee issued a decision finding Claimant
ineligible for UC benefits for the compensable week ending October 10, 2020
forward and establishing a non-fault overpayment. UC Board Decision, and Order,
3/14/22 (Bd. Dec.), Finding of Fact (FF) 1. The same day the Referee’s decision
was issued, a copy of the decision was mailed to Claimant at her last known post
office address. Id., FF 2 & 3. The mailing included a notice of the 15-day deadline
to appeal to the Board under Section 501(e) of the UC Law,1 43 P.S. § 821(e). The
Board found that “[C]laimant received the Referee’s decision and was aware of her
ineligibility for benefits on or shortly after March 9, 2021.” Bd. Dec., FF 4.
However, Claimant did not attempt to appeal to the Board until May 17, 2021, well
beyond the 15-day deadline. Id., FF 6.2
Before the Board, Claimant asserted that her appeal was late because
“she is a victim of domestic violence, she has various health issues, and she was not
checking for mail on a regular basis”; further, she did not have cell phone or internet
service. Bd. Dec., FF 7. However, the Board found that, although the Referee’s
decision contained information on how and when to appeal, Claimant relied instead
on advice from her son, who incorrectly suggested that “she was wasting her time
trying to file an appeal” from the Referee’s decision and that “she should apply for
Pandemic Unemployment Assistance (PUA) benefits” instead. Id. at 2 & FF 8-10.
The Board concluded that UC authorities did not mislead or misinform Claimant,
and her delay in filing an appeal was due to her reliance on her son’s misinformation.
Id. at 2 & FF 11. Claimant then filed a petition for review in this Court.3
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §§ 751-
919.10.
2
Confusingly, the Board’s decision states both that Claimant received the Referee’s
decision on or shortly after March 9, 2021, and that to be timely, an appeal to the Board had to be
filed on or before March 9, 2021. Bd. Dec., FF 4 & 5. However, we need not resolve this apparent
inconsistency in the Board’s findings, as Claimant’s appeal on May 17, 2021 was untimely even
if we assume she did not receive the Referee’s decision until on or shortly after March 9, 2021 and
that she had 15 days from that date in order to file her appeal with the Board.
3
This Court’s review of the Board’s order “is limited to determining whether Claimant’s
constitutional rights were violated, whether an error of law was committed, or whether the
necessary factual findings are supported by competent evidence.” Dull v. Unemployment Comp.
Bd. of Rev., 955 A.2d 1077, 1079 n.2 (Pa. Cmwlth. 2008).
2
A timely appeal to the Board from a Referee’s decision is a
jurisdictional prerequisite to the Board’s ability to review the matter. Gannett
Satellite Info. Network, Inc. v. Unemployment Comp. Bd. of Rev., 661 A.2d 502, 504
(Pa. Cmwlth. 1995). The Board is not free to extend an appeal deadline as a matter
of grace or indulgence. Russo v. Unemployment Comp. Bd. of Rev., 13 A.3d 1000,
1003 (Pa. Cmwlth. 2010). Rather, after 15 days, the decision becomes final, and the
Board lacks jurisdiction to consider an appeal, absent extraordinary circumstances.
See Hampson v. Unemployment Comp. Bd. of Rev. (Pa. Cmwlth., No. 1814 C.D.
2019, filed July 14, 2021),4 slip op. at 5-6 (quoting Vereb v. Unemployment Comp.
Bd. of Rev, 676 A.2d 1290, 1292 (Pa. Cmwlth. 1996) (en banc)).
To justify nunc pro tunc relief allowing a late appeal, a claimant bears
a heavy burden of demonstrating extraordinary circumstances involving fraud or
administrative breakdown, or that the claimant’s “non-negligent conduct beyond
[her] control caused the delay.” Hampson, slip op. at 6 (quoting Hessou v.
Unemployment Comp. Bd. of Rev., 942 A.2d 194, 198 (Pa. Cmwlth. 2008)
(additional quotation marks omitted)). Here, Claimant does not allege any fraud or
administrative breakdown. She contends only that her conduct was non-negligent.
We disagree.
Pennsylvania law is settled that “[t]he pressure of life events is . . .
insufficient to excuse an untimely [UC] appeal.” Carney v. Unemployment Comp.
Bd. of Rev., 181 A.3d 1286, 1288 (Pa. Cmwlth. 2018) (additional citations omitted).
This Court has repeatedly held that nunc pro tunc relief was not available in
situations analogous to, or even more exigent than, those in which Claimant found
herself here. See, e.g., Constantini v. Unemployment Comp. Bd. of Rev., 173 A.3d
4
This unreported decision is cited as persuasive authority pursuant to Section 414(a) of
this Court’s Internal Operating Procedures. 210 Pa. Code § 69.414(a).
3
838, 845 (Pa. Cmwlth. 2017) (concluding that claimant’s late appeal was not
excusable, although she was “dealing with several ongoing legal issues, a malware
virus attack on her computer network, lost data from her wireless devices, and
medical emergency appointments during the 15-day appeal period”); Dull v.
Unemployment Comp. Bd. of Rev., 955 A.2d 1077, 1080 (Pa. Cmwlth. 2008)
(denying nunc pro tunc relief where, although claimant had an I.Q. of only 76, delay
was her own fault for failing to seek anyone’s help); Maloy v. Unemployment Comp.
Bd. of Rev. (Pa. Cmwlth., No. 1009 C.D. 2015, filed April 13, 2016), slip op. at 7-9
(denying nunc pro tunc relief where claimant was living around the corner from her
mailing address and depending on neighbors to bring her mail while she was dealing
with her brother’s death, moving, and caring for her daughter and sick mother during
the appeal period); Burgher v. Unemployment Comp. Bd. of Rev. (Pa. Cmwlth., No.
1929 C.D. 2014, filed July 7, 2015), slip op. at 8 (concluding that claimant dealing
with anxiety and stress from layoff did not establish non-negligent circumstances);
Rabe v. Unemployment Comp. Bd. of Rev. (Pa. Cmwlth., No. 1785 C.D. 2013, filed
February 24, 2014), slip op. at 4 (denying nunc pro tunc relief to claimant who was
dealing with financial stress and multiple pending court cases during appeal period);
Menges v. Unemployment Comp. Bd. of Rev. (Pa. Cmwlth., No. 2230 C.D. 2009,
filed April 22, 2010), slip op. at 8-9 (determining that claimant dealing with a death
in the family and lingering effects of a medical condition did not establish non-
negligent circumstances).
Here, Claimant similarly failed to establish that her delay of two months
in filing an appeal to the Board was the result of non-negligent circumstances.
Although she alleged that she was dealing with the pressure of various life events,
4
such events do not constitute non-negligent circumstances justifying nunc pro tunc
relief.
Moreover, the Referee and the Board found as a fact that it was not
Claimant’s various alleged life events, but her decision to follow her son’s incorrect
advice rather than the instructions provided with the Referee’s decision, that caused
Claimant’s appeal to the Board to be untimely filed. Thus, Claimant has failed to
satisfy the requirements for nunc pro tunc relief, and the Board correctly dismissed
her appeal as untimely. Accordingly, we affirm the Board’s order.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
5
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Susan Douglas, :
Petitioner :
:
v. :
:
Unemployment Compensation :
Board of Review, : No. 226 C.D. 2022
Respondent :
ORDER
AND NOW, this 17th day of November, 2022, the order of the
Unemployment Compensation Board of Review dated March 14, 2022, dismissing
as untimely the appeal of Petitioner, Susan Douglas, is AFFIRMED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484437/ | 21-116-cr
United States v. Aponte
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order
filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 17th day of November, two thousand twenty-two.
PRESENT: John M. Walker, Jr.,
Steven J. Menashi,
Eunice C. Lee,
Circuit Judges.
____________________________________________
UNITED STATES OF AMERICA,
Appellee,
v. No. 21-116
HECTOR APONTE,
Defendant-Appellant.
____________________________________________
For Appellee: TIFFANY H. LEE, Assistant United States
Attorney, for James P. Kennedy, Jr., United
States Attorney for the Western District of
New York, Buffalo, NY.
For Defendant-Appellant: TIMOTHY P. MURPHY, Federal Public
Defender’s Office, Buffalo, NY.
Appeal from a judgment of the United States District Court for the Western
District of New York (Siragusa, J.).
Upon due consideration, it is hereby ORDERED, ADJUDGED, and
DECREED that the appeal is DISMISSED AS MOOT.
Hector Aponte appeals the denial—by the United States District Court for
the Western District of New York—of his motion for compassionate release. We
assume the parties’ familiarity with the underlying facts and procedural history.
On March 10, 2022, we remanded Aponte’s case “to the district court for the
limited purpose of clarifying whether Aponte’s transfer to a new facility affect[ed]
[the court’s] reasons for denying his motion for compassionate release.” Order,
United States v. Aponte, No. 21-116, ECF No. 57 (2d Cir. Mar. 10, 2022). The district
court issued an order stating that it had “received no further communication from
Aponte since it denied his motion, and therefore has no information about his
2
current location with the Bureau of Prisons or his current conditions of
confinement.” Order, United States v. Aponte, No. 6:09-CR-6036, ECF No. 158
(W.D.N.Y. March 21, 2022). The district court ordered that Aponte “must file and
serve a response containing that information on or before April 15, 2022” if he
“wishe[d] to apprise the Court of his current location and conditions of
confinement.” Id. After the court extended Aponte’s deadline to respond, Aponte
filed a response indicating that he had been released from the physical custody of
the Bureau of Prisons, he was on supervised release, and he was no longer seeking
compassionate release based on his previous motion. Response, United States v.
Aponte, No. 6:09-CR-6036, ECF No. 161 (W.D.N.Y. April 25, 2022). The district
court then clarified to this court “that Aponte’s transfer to a new facility does not
affect the Court’s reasons for denying his motion for compassionate release.”
Order, United States v. Aponte, No. 6:09-CR-6036, ECF No. 162 (W.D.N.Y. June 8,
2022). The district court further explained “that the issue upon which the matter
was remanded to this Court is now moot.” Id.
3
We agree. Now that Aponte has been released from custody and no longer
seeks compassionate release, his appeal is moot. Accordingly, we DISMISS the
appeal as MOOT.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
4 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484402/ | In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-22-00314-CV
JANA SHEPHERD, APPELLANT
V.
HELEN PAINTER & CO., CATHERINE TAYLOR, AMY DEFOREST, YOUNGER
RANCH, LLC, SCOTT REAL ESTATE, INC., AND SHILA MANLEY, APPELLEES
On Appeal from the 348th District Court
Tarrant County, Texas
Trial Court No. 348-295290-17, Honorable Megan Fahey, Presiding
November 15, 2022
ORDER OF ABATEMENT AND REMAND
Before QUINN, C.J., and PARKER and YARBROUGH, JJ.
Appellant, Jana Shepherd, proceeding pro se, filed an affidavit of inability to pay
costs in the trial court on January 4, 2022. See TEX. R. CIV. P. 145. On October 31, 2022,
the court reporters having worked on this matter filed in the trial court their “Court
Reporters’ Motion to Require Payment of Costs” contesting Shepherd’s claims of
indigence. See TEX. R. CIV. P. 145(e). In connection with the ongoing contest, the court
reporters have filed a request for extension of time in which to file the reporter’s record in
this Court.
From the court reporters’ filings, we learn that the trial court is prepared to hear the
contest to Shepherd’s indigence, as required by Rule 145. To allay any question
regarding the trial court’s jurisdiction to address the controversy, we abate the appeal and
remand the cause to the trial court to conduct the hearing on the court reporters’ contest.
See TEX. R. CIV. P. 145(f)(1). Upon remand, the trial court shall schedule an oral
evidentiary hearing to determine whether Shepherd is indigent. Its decision and findings
supporting that decision shall be included in a supplemental clerk’s record, along with the
reporter’s record transcribing the hearing, and filed with the Clerk of this Court on or
before December 19, 2022. Upon filing of the records, the cause will be reinstated.
Finally, the deadline by which the court reporters must file any reporter’s records other
than that pertaining to the determination of Shepherd’s status as an indigent are stayed
until further order of this court.
IT IS SO ORDERED.
Per Curiam
2 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484403/ | In The
Court of Appeals
Seventh District of Texas at Amarillo
________________________
No. 07-21-00225-CR
________________________
JOSEPH GONZALES, APPELLANT
V.
THE STATE OF TEXAS, APPELLEE
On Appeal from the 140th District Court
Lubbock County, Texas
Trial Court No. 2019-417,224; Honorable Douglas Freitag, Presiding
November 14, 2022
MEMORANDUM OPINION
Before QUINN, C.J., and PARKER and YARBROUGH, JJ.
Joseph Gonzales appeals his convictions on two counts of aggravated kidnapping.
The convictions arose from the following incident. He was the subject of an outstanding
arrest warrant when spied by an officer. The officer followed appellant, who rode as a
passenger in a pickup truck at the time. Eventually, appellant saw the officer, left his
truck, ran towards the home of Ruiz and Saucedo, and entered it. Then, he refused to
exit when called upon by police to do so. At one point, he alluded to having “hostages”
and that the officers would have to kill him. Later, when again told to release the
“hostages,” appellant replied that the officers were “going to have to make” him. An officer
also witnessed appellant holding a knife.
Eventually, Ruiz and Saucedo were released after appellant demanded and
received the opportunity to speak with his girlfriend. Upon her exit, Ruiz both spoke with
an officer and displayed to the official various text messages she sent on her cell phone
while captive. The messages included those stating: 1) “[h]e had a knife and won’t let us
out the house,” 2) “[h]e won’t let us leave. I’m at my house. I’m scared” 3) “[t]he window
in the backroom is bordered [sic] up,” 4) “[w]hat do I do I’m scared,” 5) “[h]e doesn’t know
I have the phone,” and 6) “[t]hey can come in through the back door quitely [sic] or the
back window.” Appellant also surrendered, and during an ensuing search of the house,
the officers found a switchblade knife on the floor. This and other evidence convinced a
jury to convict him of the aforementioned charges.
We address the nine issues raised in appellant’s 91-page brief, and, upon doing
so, affirm.
Sufficiency of the Evidence
Our analysis begins with issues one, three, and four. Through them, appellant
contends that the State failed to prove various elements of the charged offense, such as
the requisite mens rea, fear and intimidation, and the lack of consent. We overrule each
point.
The pertinent standard of review is that described in Zuniga v. State, 551 S.W.3d
729 (Tex. Crim. App. 2018). We apply it here.
2
Next, there are various ways in which one may commit aggravated kidnapping.
Reading the State’s indictment indicates it apparently opted to blend two of the different
ways. That is, it alleged in count one that appellant “did then and there intentionally
abduct . . . RUIZ, without the consent of the said . . . RUIZ, with intent to prevent the
liberation of the said RUIZ, by using or threatening to use deadly force and with intent to
use said victim as a shield or hostage and the defendant did then and there use or exhibit
a deadly weapon, to-wit: knife, during the commission of said offense.” Through the
second, it averred that he “did then and there intentionally abduct . . . SAUCEDO, without
the consent of the said SAUCEDO, with intent to prevent the liberation of the said
SAUCEDO, by using or threatening to use deadly force and with intent to use said victim
as a shield or hostage and the defendant did then and there use or exhibit a deadly
weapon, to-wit: knife, during the commission of said offense.” These allegations reveal
a blending of section 20.04(a)(2) of the Penal Code with section 20.04(b). Per the former,
one commits the crime by “intentionally or knowingly abduct[ing] another person with the
intent to . . . use him as a shield or hostage,” TEX. PENAL CODE ANN. § 20.04(a)(2), and
per the latter by “intentionally or knowingly abduct[ing] another person and us[ing] or
exhibit[ing] a deadly weapon during the commission of the offense.” Id. at § 20.04(b). 1
With that in mind, we turn to the appeal at hand.
The circumstances of the incident described in the opening paragraph to this
opinion came from the evidentiary record before the jury. When read together in a light
1 The legislature defined “abduct” as “to restrain a person with intent to prevent . . . liberation by: . . .
using or threatening to use deadly force,” TEX. PENAL CODE ANN. § 20.01(2)(B), and “restrain” to mean
“restrict a person’s movements without consent, so as to interfere substantially with the person's liberty, by
moving the person from one place to another or by confining the person.” Id. at § 20.01(1). It further stated
that the requisite restraint may be accomplished through “force, intimidation, or deception” if it lacks
consent. TEX. PENAL CODE ANN. § 20.01(1)(A).
3
most favorable to the verdict, they allow a rational trier of fact to find the essential
elements of the crime beyond a reasonable doubt. In utilizing their common sense,
intelligence, and knowledge gained from life experiences, see Clark v. State, 461 S.W.3d
244, 248 (Tex. App.—Eastland 2015, pet. ref’d) (acknowledging a juror’s authority to use
same when determining guilt or innocence), jurors could rationally interpret appellant’s
own use of the word “hostages” as evidence of appellant’s conscious objective and desire
to both seize and hold Ruiz and Saucedo against their will. So too did they see Ruiz’s
text messages revealing that appellant would not “let us leave” and possessed a knife.
That the evidence may have been contradictory or interpreted in different ways
matters not here. As we often iterate, evidentiary conflicts and issues about a witness’
credibility are for the jury to resolve. Robinson v. State, 568 S.W.3d 718, 722 (Tex. App.—
Amarillo 2019, no pet.). Not us. Instead, we defer to its decision regarding those matters.
Id.; Zuniga, 551 S.W.3d at 732-33. And, in so deferring, we find legally sufficient evidence
supporting conviction coming from not only what the officers and “hostages” saw but also
from what appellant himself said.
Charge Error
Through his second, fifth, and sixth issues, appellant contends the trial court erred
in: 1) failing to provide in its jury charge a non-statutory definition of the word “intimidation”
that included reference to a “reasonable belief” of harm; 2) instructing jurors that a
“knowingly” culpable mental state would satisfy the offense; and 3) omitting the passage
“without consent” from the application paragraphs. We overrule them.
Regarding the definition of intimidation, it is somewhat unclear what appellant
wants. We read his contention as suggesting that the trial court erred in failing to define
4
the word “intimidation” and include in that definition a passage requiring the fear arising
from such intimidation to be reasonable. Yet, he cites us to no legal authority requiring
the trial court to define “intimidation” in the first instance. Nor does he provide any
substantive analysis explaining why the definition was necessary, unless, of course, we
deem his reference to instructing a jury on defensive theories as being that missing
substance. And in our assuming that reference is the missing substance, then another
problem arises. If the definition somehow constitutes a defensive issue, as appellant
seems to suggest, he failed to request its inclusion in the charge. Since such a default
waives a defense, Vega v. State, 394 S.W.3d 514, 518-19 (Tex. Crim. App. 2013) (stating
that a trial judge has no duty to sua sponte instruct the jury on unrequested defensive
issues and one cannot complain on appeal about their absence unless requested), the
trial court need not have included it. So whether considered as waived due to inadequate
briefing, see Rule 38.1(i) of the Texas Rules of Appellate Procedure (requiring the
appellant to provide both citation to legal authority and substantive analysis or risk
waiver), or the failure to request a defensive instruction, the complaint was waived.
Regarding the inclusion of the mens rea “knowingly” into the abstract legal
description of aggravated kidnapping, we acknowledge that the mens rea with which
appellant was accused of acting within the indictment consisted only of “intentionally
abducting” Ruiz and Saucedo. Moreover, appellant objected to this before the charge
was read to the jury. Nevertheless, through its application paragraph, the trial court
instructed the jury to find appellant guilty of aggravated kidnapping if it determined that
he “intentionally abduct[ed]” them. The State conceded that inclusion of “knowingly” in
the abstract paragraph was error.
5
Had no objection been uttered by the defendant at trial, then the mistake would be
inconsequential. See Edwards v. State, 228 S.W.3d 450, 452-53 (Tex. App.—Amarillo
2007, pet. ref’d) (so holding when the application paragraph is correct while the abstract
one is not). Yet, objection was made. So, we must determine if appellant suffered some
harm from it; that is, whether the error was calculated to injure the rights of the defendant.
Barringer v. State, No. 07-16-00068-CR, 2017 Tex. App. LEXIS 9327, at *15 (Tex. App.—
Amarillo Oct. 3, 2017, no pet.) (mem. op., not designated for publication). And, harm
must be actual, not theoretical. Jordan v. State, 593 S.W.3d 340, 347 (Tex. Crim. App.
2020). Assessing it requires us to evaluate the whole record, including the jury charge,
contested issues, weight of the probative evidence, arguments of counsel, and other
relevant information. Id. at 347.
As noted earlier, the application paragraphs accurately described the prerequisites
to conviction for aggravated kidnapping. Furthermore, the theory pursued by the State
focused on appellant intentionally, as opposed to knowingly, abducting his “hostages.”
We also note that neither party referenced the mens rea of “knowingly” during their
respective closing arguments. And, as illustrated through our discussions of issues one,
three, and four, the evidence certainly supported the jury’s verdict that appellant
“intentionally abducted” those whom he expressly deemed to be his “hostages.” In short,
we encountered no circumstances suggesting that the mistake was calculated to injure
appellant’s rights.
Regarding the omission of the phrase “without consent” from the application
paragraphs of the charge, appellant concedes he did not broach the topic to the trial court.
This leads us to conclude that even if the omission were error, appellant suffered no
6
egregious harm. This is so because the trial court’s definitions on page two of its charge
covered the matter. That is, the court defined “abduct” to “mean[] to restrain a person . . .”
and “restrain” to “mean[] to restrict a person’s movements without consent.” (Emphasis
added). So, the application paragraphs implicitly required proof that appellant’s abduction
of his “hostages” was without their consent. And, unlike appellant’s insinuation otherwise,
we do not ascribe laziness to the jurors; we do not think them too lazy “to reach back a
few pages into the abstract paragraphs and properly apply the legal rules and concepts
in the abstract paragraphs . . . .” Our obligation is to presume they followed the trial
court’s instructions as presented. De La Torre v. State, 583 S.W.3d 613, 620-21 (Tex.
Crim. App. 2019).
Admission of Text Messages
Appellant next complains, in issues seven and eight, about the admission into
evidence of Ruiz’s text messages. Admitting them supposedly violated evidentiary rules
barring hearsay and his right to confront witnesses. We overrule them.
The standard of review is abused discretion. Tienda v. State, 358 S.W.3d 633,
638 (Tex. Crim. App. 2012). So long as the trial court’s decision falls within the zone of
reasonable disagreement, its discretion was not abused. Id. That said, we begin with the
hearsay objection.
The text messages were written by Ruiz and sent to an unnamed third party. They
describe the abduction by appellant, allude to his knife, reveal her fear, and solicit
assistance from the person. They end with the latter referring to Ruiz as “Mama,” asking
“you okay,” and beseeching Ruiz to “[p]lease answer me.” Given their substance, their
indication of Ruiz being in a highly emotional state while appellant held her as his
7
“hostage,” and the continuation of that state once freed from the house, jurists could
reasonably debate about whether they constituted excited utterances.
Such utterances are statements “relating to a startling event or condition, made
while the declarant was under the stress of excitement that it caused.” TEX. R. EVID.
803(2). “The critical question . . . is not the specific type of emotion that the declarant is
dominated by—anger, fear, happiness—but whether the declarant was still dominated by
the emotion caused by the startling event when she spoke.” Coble v. State, 330 S.W.3d
253, 294 (Tex. Crim. App. 2010). Given the circumstances surrounding the text
messaging and Ruiz’s apparent emotional state while texting, the trial court’s decision to
admit the messages as excited utterances (which is an exception to the hearsay rule) fell
within the zone of reasonable disagreement.
As for the Confrontation Clause attack, admission of a hearsay statement may
implicate a defendant’s constitutional right to confront witnesses. That occurs when the
surrounding circumstances objectively indicate that the primary reason the statement was
made was to establish or prove past events potentially relevant to a later criminal
prosecution, i.e., when they are testimonial in nature. De La Paz v. State, 273 S.W.3d
671, 680 (Tex. Crim. App. 2008); Gilbert v. State, No. 07-16-00378-CR, 2017 Tex. App.
LEXIS 10039, at *4 (Tex. App.—Amarillo Oct. 25, 2017 pet. ref’d) (mem. op., not
designated for publication). Hearsay statements evincing pleas for help or made to
provide information enabling others to end an ongoing emergency situation, such as a
911 call, generally fall outside that realm. Gilbert, 2017 Tex. App. LEXIS 10039, at *4-5.
A reasonable jurist could have interpreted the circumstances surrounding Ruiz’s texts as
comparable to making a 911 call. She was revealing ongoing criminal events, describing
8
her fear while in the midst of those events, and soliciting assistance from the third party.
Thus, deeming them non-testimonial and free from constitutional limitation also fell within
the zone of reasonable disagreement.
Impeach Ruiz
Through his ninth and last issue, appellant argues the trial court erred in excluding
evidence of Ruiz’s reputation in the community for truth and veracity. We overrule the
issue.
To be admissible, an opinion about one’s reputation for truthfulness in the
community must be based on discussions with others about the person or hearing others
discuss the person’s reputation but not just on personal knowledge. Adanandus v. State,
866 S.W.2d 210, 225-26 (Tex. Crim. App. 1993) (quoting Wagner v. State, 687 S.W.2d
303, 313 (Tex. Crim. App. 1985)); Pinion v. State, No. 08-13-00045-CR, 2015 Tex. App.
LEXIS 4018, at *14-15 (Tex. App.—El Paso April 22, 2015, no pet.) (mem. op., not
designated for publication) (quoting Adanandus v. State, supra). That is, the opinion must
be based on a synthesis of observations of and discussions with others resulting in a
conclusion about the individual’s reputation. Adanandus v. State, 866 S.W.2d at 226.
Furthermore, a witness intending to pontificate about another’s reputation is an
appropriate one if he or she has a substantial familiarity with the reputation of the person
about whom the witness is supposed to testify. Lopez v. State, No. 04-07-00472-CR,
2008 Tex. App. LEXIS 2303, at *3-4 (Tex. App.—San Antonio April 2, 2008, pet. ref’d)
(mem. op., not designated for publication); Garza v. State, 18 S.W.3d 813, 824 (Tex.
App.—Fort Worth April 6, 2000 pet. ref’d).
9
Again, appellant endeavored to obtain an opinion from a witness about Ruiz’s
reputation for truthfulness. During voir dire, the witness indicated she lived in the same
community as did Ruiz, the town was small, “everybody knows everything,” and Ruiz was
known to not tell the truth. Further query revealed that Ruiz had a reputation for “[b]eing
a dope head, being on drugs” and having had her children “tooken [sic] away before she
went to prison.” Yet, the witness conceded to having never personally heard Ruiz lie or
to experiencing instances where Ruiz lied to others.
Missing from the foregoing exchange were references to the witness personally
discussing with others the topic of Ruiz’s truthfulness or having others discuss that
particular topic. At best, her voir dire testimony suggested that the “everybody [who] know
[sic] everything” in the small town knew Ruiz lost her children and apparently consumed
drugs. Having a reputation as a drug addict and possibly a less than adequate parent
does not necessarily establish the character trait of untruthfulness, or so the trial court
could have reasonably concluded. Without being provided evidence that the witness
discussed with others or overheard others discuss the topic of Ruiz’s truthfulness, we
cannot say the trial court’s decision to exclude the witness’s opinion about Ruiz’s
reputation in the community for truthfulness fell outside the zone of reasonable
disagreement.
Sua Sponte Correction of the Judgment
While reviewing the record, we discovered that the judgments state appellant pled
“true” to the enhancement paragraphs in the indictment. The reporter’s record actually
reveals that the trial court “accept[ed] and enter[ed] a plea of not true as to each . . .”
10
allegation. Having the authority to modify a judgment so it speaks the truth, we exercise
it by reforming those here to reflect pleas of “not true.”
Conclusion
Having overruled each of appellant’s nine appellate issues and reformed the
judgments to illustrate that appellant pled “not true” to the enhancement allegations in the
indictment, we affirm the judgments as reformed.
Brian Quinn
Chief Justice
Do not publish.
11 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484401/ | In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-22-00189-CR
WILLIAM AUSTIN YOUNG, APPELLANT
V.
THE STATE OF TEXAS, APPELLEE
On Appeal from the 46th District Court
Wilbarger County, Texas
Trial Court No. 12,377, Honorable Dan Mike Bird, Presiding
November 15, 2022
MEMORANDUM OPINION
Before QUINN, C.J., and PARKER, and YARBROUGH, JJ.
Before this Court is a motion to withdraw supported by a brief filed pursuant to
Anders v. California.1 Pursuant to a plea agreement, in March 2019, Appellant, William
Austin Young, was placed on deferred adjudication community supervision for five years
for burglary of a habitation. In June 2022, the State moved to proceed with adjudication
for violations of certain conditions of community supervision. The trial court heard
testimony on the alleged violations and subsequently ruled that Appellant had violated
1 Anders v. California, 386 U.S. 738, 87 S. Ct. 1396, 18 L. Ed. 2d 493 (1967).
some conditions, revoked his community supervision, adjudicated him guilty of the
charged offense, and sentenced him to eighteen years’ confinement.
In support of his motion to withdraw, counsel certifies he has conducted a
conscientious examination of the record, and in his opinion, it reflects no potentially
plausible basis for reversal of Appellant’s conviction. Anders, 386 U.S. at 744–45; In re
Schulman, 252 S.W.3d 403, 406 (Tex. Crim. App. 2008). Counsel candidly discusses
why, under the controlling authorities, the record supports that conclusion. See High v.
State, 573 S.W.2d 807, 813 (Tex. Crim. App. 1978). Counsel has demonstrated that he
has complied with the requirements of Anders and In re Schulman by (1) providing a copy
of the brief to Appellant, (2) notifying him of the right to file a pro se response if he desired
to do so, and (3) informing him of the right to file a pro se petition for discretionary review.
In re Schulman, 252 S.W.3d at 408. By letter, this Court granted Appellant an opportunity
to exercise his right to file a response to counsel’s brief, should he be so inclined. Id. at
409 n.23. Appellant did not file a response.
When reviewing an order revoking community supervision imposed under an order
of deferred adjudication, the sole question before this Court is whether the trial court
abused its discretion. Hacker v. State, 389 S.W.3d 860, 865 (Tex. Crim. App. 2013). The
finding of a single violation of community supervision is sufficient to support revocation.
Garcia v. State, 387 S.W.3d 20, 26 (Tex. Crim. App. 2012). Additionally, a plea of true
standing alone is sufficient to support a trial court’s revocation order. Moses v. State, 590
S.W.2d 469, 470 (Tex. Crim. App. 1979).
By the Anders brief, counsel presents a thorough evaluation of the record and
concedes that reversible error is not present. He acknowledges that Appellant’s pleas of
2
true standing alone were sufficient for the trial court to revoke Appellant’s community
supervision.
We too have independently examined the record to determine whether there are
any non-frivolous issues which might support the appeal. See Penson v. Ohio, 488 U.S.
75, 80, 109 S. Ct. 346, 102 L. Ed. 2d 300 (1988); In re Schulman, 252 S.W.3d at 409;
Stafford v. State, 813 S.W.2d 503, 511 (Tex. Crim. App. 1991). We have found no such
issues. See Gainous v. State, 436 S.W.2d 137, 138 (Tex. Crim. App. 1969). After
reviewing the record and counsel’s brief, we agree with counsel that there is no plausible
basis for reversal of Appellant’s conviction. See Bledsoe v. State, 178 S.W.3d 824, 826–
27 (Tex. Crim. App. 2005).
The trial court’s Judgment Adjudicating Guilt is affirmed and counsel’s motion to
withdraw is granted.2
Alex L. Yarbrough
Justice
Do not publish.
2 Notwithstanding that Appellant was informed of his right to file a pro se petition for discretionary
review upon execution of the Trial Court’s Certification of Defendant’s Right of Appeal, counsel must comply
with Rule 48.4 of the Texas Rules of Appellate Procedure which provides that counsel shall within five days
after this opinion is handed down, send Appellant a copy of the opinion and judgment together with
notification of his right to file a pro se petition for discretionary review. In re Schulman, 252 S.W.3d at 408
n.22, 411 n.35. The duty to send the client a copy of this Court’s decision is an informational one, not a
representational one. It is ministerial in nature, does not involve legal advice, and exists after the court of
appeals has granted counsel’s motion to withdraw. Id. at 411 n.33
3 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484400/ | In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-22-00219-CR
EX PARTE CEDRIC JOSEPH MARKS
On Appeal from the 426th District Court
Bell County, Texas
Trial Court No. 80244, Honorable Steven J. Duskie, Presiding
November 16, 2022
MEMORANDUM OPINION
Before QUINN, C.J., and PARKER and YARBROUGH, JJ.
This one proceeding involves Cedric Marks’s pro se effort to appeal an
interlocutory order and petition for a writ of habeas corpus. The underlying complaints
implicate the trial court’s decision to deny his request to dismiss the criminal prosecution
against him on speedy trial grounds or, in the alternative, to reduce bail. We dismiss in
part for want of jurisdiction and affirm. 1
The State indicted Marks for capital murder. That resulted in his arrest. He
currently awaits trial and remains incarcerated.
1 This appeal being transferred from the Third Court of Appeals, we follow its precedent if it conflicts
with that of the Seventh Court of Appeals. TEX. R. APP. P. 41.3.
Though originally appointed counsel, he opted to represent himself against the
State’s accusations. His time awaiting trial while jailed led him to question both the
purported delay in obtaining a trial and the $1.5 million bail set by the trial court. Efforts
to raise his complaints came in various forms over a period of time. Eventually, they
morphed into one pretrial petition for writ of habeas corpus. Through it, he sought the
dismissal of the indictment because the State purportedly denied him the right to a speedy
trial or, alternatively, a reduction in bail. The trial court heard the petition and denied both
requests after receiving evidence.
Before us is Marks’s combined interlocutory appeal and petition for writ of habeas
corpus challenging the trial court’s rulings. Not being sure whether he actually appeals
them or originally petitions for a writ of habeas corpus, we address his complaints within
the framework of both possibilities.
Speedy Trial
Regarding the matter of dismissal, neither an interlocutory appeal nor a writ for
habeas corpus are available to test a decision rejecting a speedy trial complaint. As said
by our Court of Criminal Appeals, “[t]his Court will not allow its holding to deny
interlocutory appeals from alleged violations of the Speedy Trial Act to be circumvented
by changing the label of an appeal from an application for a writ of mandamus to that of
a petition for habeas corpus.” Ex parte Delbert, 582 S.W.2d 145, 146 (Tex. Crim. App.
1979); accord, Battee v. State, No. 11-22-00088-CR, 2022 Tex. App. LEXIS 3402, at *1
(Tex. App.—Eastland May 19, 2022, no pet.) (mem. op., not designated for publication)
(holding that an appeal from an order denying a motion for speedy trial is not a final,
2
appealable order). Thus, we have no jurisdiction to review, at this time, the decision
regarding Marks’s speedy trial complaint.
Bail
As for bail, the amount of bail may be challenged through a pretrial writ of habeas
corpus. Weise v. State, 55 S.W.3d 617, 619–20 (Tex. Crim. App. 2001). Should the trial
court deny relief, that decision may be the substance of an interlocutory appeal. Diez v.
State, No. 03-21-00043-CR, 2022 Tex. App. LEXIS 2809, at *5 n.2 (Tex. App.—Austin
Apr. 28, 2022, no pet.) (mem. op., not designated for publication). Such a legal remedy
being available, though, an original petition for writ of habeas corpus filed in an appellate
court seeking review of the decision is unavailable. See Ex parte Cruzata, 220 S.W.3d
518, 520 (Tex. Crim. App. 2007) (stating that since habeas corpus is an extraordinary
remedy available only when there is no other adequate remedy at law, it may not be used
to assert claims that could have been asserted on direct appeal). Thus, we have no
jurisdiction over Marks’s original petition for writ of habeas corpus to the extent he uses it
to attack the trial court’s refusal to reduce bail.
Having jurisdiction over his appeal, we, nevertheless, encounter another problem.
Bail and its purported excessiveness were the subject of various evidentiary hearings.
Furthermore, the trial court took judicial notice of the evidence received in an earlier
hearing when opting to deny Marks’s later pretrial writ. Marks did not include that
evidence in the current appellate record. This is fatal to his appeal.
Simply put, an appellant has the burden to present a record showing reversible
error. Amador v. State, 221 S.W.3d 666, 679 (Tex. Crim. App. 2007). That burden goes
unfulfilled when he omits from it relevant portions of the trial court proceedings. Id.
3
Indeed, the omission of relevant evidence from the record allows us to presume that the
missing evidence supports the decision under attack. Morris v. Coffman, 01-09-00493-
CV, 2012 Tex. App. LEXIS 9315, at *8–9 (Tex. App.—Houston [1st Dist.] Nov. 1, 2012,
no pet.) (mem. op.). We so presume here. That is, we presume the evidence missing
from the appellate record supported the trial court’s decision to deny a reduction in bail.
In sum, we dismiss, for want of jurisdiction, Marks’s original petition for writ of
habeas corpus and interlocutory appeal from the order rejecting his speedy trial
complaint. We affirm the trial court’s order denying his pretrial writ of habeas corpus to
the extent he used that extraordinary remedy to seek a reduction in his bail.
Brian Quinn
Chief Justice
Do not publish.
4 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484407/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
THE LAW OFFICE OF DANIEL S. No. 84367
SIMON,
Petitioner,
VS. Ki
THE EIGHTH JUDICIAL DISTRICT i L P= E
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF NOV 16 2022
CLARK; AND THE HONORABLE
TIERRA DANIELLE JONES, DISTRICT
JUDGE,
Respondents,
and
EDGEWORTH FAMILY TRUST; AND
AMERICAN GRATING, LLC,
_Real Parties in Interest.
ORDER DENYING PETITION
This original petition for a writ of prohibition or mandamus
challenges a district court order awarding petitioner Daniel Simon attorney
fees in quantum meruit. Simon argues the district court incorrectly
calculated the attorney fee award. But we already reviewed the challenged
district court order in a direct appeal, Edgeworth Family Tr. v. Simon, Nos.
83258/83260, 2022 WI, 4298625 (Nev. Sept. 16, 2022) (Order Vacating
Judgment and Remanding),' where we vacated the fee award and remanded
for further proceedings. As a result, Simon has no order to challenge, and
his petition is thus moot. See Natl Collegiate Athletic Ass'n v. Univ. of Nev.,
Reno, 97 Nev. 56, 58, 624 P.2d 10, 11 (1981) (“A moot case is one which seeks
to determine an abstract question which does not rest upon existing facts or
We denied real parties in interest’s petition for rehearing on October
31, 2022.
Supreme Court
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rights.”). We decline to hear this moot petition. See Smith v. Eighth
Judicial Dist. Court, 107 Nev. 674, 677, 818 P.2d 849, 851 (1991) (holding
that whether to consider a writ petition is discretionary). Accordingly, we
ORDER the petition DENIED.
[Aer tcl, oJ.
Hardesty
A gs “ , a.
Stiglich
‘ , J.
Herndon
ec: Hon. Tierra Danielle Jones, District Judge
Steve Morris
Rosa Solis-Rainey
Morris Law Group
James R. Christensen
Eighth District Court Clerk
SuPREME CouRT
OF
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ty [947A «Sipe | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484404/ | Supreme Count
OF
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(O) 947A cee
IN THE SUPREME COURT OF THE STATE OF NEVADA
SFR INVESTMENTS POOL 1, LLC, A No. 82771
NEVADA LIMITED LIABILITY
COMPANY, 2
Appellant, r LL E i
VS.
MARCHAI B.T., A NEVADA BUSINESS NOV 16 2022
TRUST, mEAeesH Sse
Respondent/Cross-Appellant. CLERIZDE def COURT
pvp LOLA
vs. [BEPany CLERK
WYETH RANCH COMMUNITY
ASSOCIATION,
Cross-Respondent.
SFR INVESTMENTS POOL 1, LLC, No. 83175
Appellant,
vs.
MARCHAI B.T.,
Respondent.
ORDER OF AFFIRMANCE
These are consolidated appeals from a district court judgment
and postjudgment order after remand in a real property action. Highth
Judicial District Court, Clark County; Elizabeth Goff Gonzalez, Judge. We
review a district court’s legal conclusions following a bench trial de novo,
but we will not set aside the district court’s factual findings unless they are
clearly erroneous or not supported by substantial evidence.! Wells Fargo
Bank, N.A. v. Radecki, 134 Nev. 619, 621, 426 P.3d 593, 596 (2018).
In 9352 Cranesbill Trust v. Wells Fargo Bank, N.A., 136 Nev.
76, 81, 459 P.3d 227, 232 (2020), we held that payments made by a
homeowner can cure the default on the superpriority portion of an HOA lien
1Pursuant to NRAP 34(f)(1), we have determined that oral argument
is not warranted in this appeal.
ZL Boor
Supreme Court
OF
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(O) ITA cB
such that the HOA’s foreclosure sale would not extinguish the first deed of
trust on the subject property.2, We also held in Cranesbill Trust that
whether a homeowner’s payments cured a superpriority default depends
upon the actions and intent of the homeowner and the HOA. /d. at 80-81,
459 P.3d at 231.
In applying Cranesbill Trust following a remand from this
court,? the district court found that the HOA applied the homeowner's
payments to the assessments comprising the superpriority portion of the
lien. We conclude that substantial evidence supports this finding. Radecki,
134 Nev. at 621, 426 P.3d at 596. Although an employee of the HOA’s
management company testified that the HOA applied the homeowner's
payments to the most recent assessments first such that the payments did
not cure the default on the superpriority len, documentary evidence
contradicted that testimony. We will not disturb the district court's
weighing of that evidence. Quintero v. McDonald, 116 Nev. 1181, 1183, 14
P.3d 522, 523 (2000) (refusing to reweigh evidence on appeal). Thus,
consistent with Cranesbill Trust, the district court correctly determined
that the homeowner's payments cured the superpriority default such that
the foreclosure sale did not extinguish the first deed of trust. Based on this
conclusion, we need not address the district court’s equitable analysis. And
although SFR argues that it is protected as a bona fide purchaser, we have
2We decline SFR Investments Pool 1, LLC’s invitation to reconsider
Cranesbill Trust.
3SFR Invs. Pool 1, LLC v. Marchai B.T., No. 74416, 2020 WL 1328985
(Nev. Mar. 18, 2020) (Order Vacating Judgment and Remanding).
Supreme Court
OF
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iO) 19478 Be
previously rejected a similar argument.’ Bank of Am., N.A. v. SFR Invs.
Pool 1, LLC, 134 Nev. 604, 612-13, 427 P.3d 113, 121 (2018).
Based on the foregoing, we
ORDER the judgment of the district court AFFIRMED.®
Dore
Parraguirre
Arend gy
Stiglich ates
cc: Chief Judge, Eighth Judicial District
Department 11, Eighth Judicial District
Thomas J. Tanksley, Settlement Judge
Hanks Law Group
Lipson Neilson P.C.
David J. Merrill, P.C.
Eighth District Court Clerk
4In its cross-appeal, Marchai raises arguments that only need to be
considered if we do not affirm the district court’s judgment. As we are
affirming, we do not address those arguments. And although SFR also
appealed from a postjudgment order regarding the retaxing and settlement
of costs, it presents no argument regarding that order such that we
necessarily affirm it.
5The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484408/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
EZRA KEMP,, No. 84639
Petitioner,
vs.
THE FIFTH JUDICIAL DISTRICT
COURT OF THE STATE OF
NEVADA, IN AND FOR THE
COUNTY OF ESMERALDA; AND
THE HONORABLE KIMBERLY A.
WANKER, DISTRICT JUDGE,
Respondents,
and
THE STATE OF NEVADA,
Real Party in Interest.
ORDER DENYING PETITION
This original petition for a writ of mandamus seeks an order
directing the district court to remand Count 3 to the justice court for a
. preliminary hearing after the district court rejected the plea negotiations.
A writ of mandamus is available to compel the performance of
an act which the law requires as a duty resulting from an office or to control
a manifest abuse or arbitrary or capricious exercise of discretion. NRS
34.160; Round Hill Gen. Improvement Dist. v. Newman, 97 Nev. 601, 603-
04, 637 P.2d 534, 536 (1981). A writ of mandamus will not issue when there
is a plain, speedy, and adequate remedy at law, NRS 34.170, and it is within
the discretion of this court to determine if a petition for extraordinary relief
will be considered, Poulos v. Kighth Judicial Dist. Court, 98 Nev. 453, 455,
652 P.2d 1177, 1178 (1982).
Although no particular deadline is specified for filing a
mandamus petition that challenges a lower court’s decision, the doctrine of
SupReme Court
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laches applies.! State v. Eighth Judicial Dist. Court (Hedland), 116 Nev.
127, 135, 994 P.2d 692, 697 (2000). In considering whether to apply the
doctrine of laches, this court will consider “whether ‘(1) there was an
inexcusable delay in seeking the petition; (2) an implied waiver arose from
petitioners’ knowing acquiescence in existing conditions; and, (3) there were
circumstances causing prejudice to respondent.” Id. (quoting Buckholt v.
Eighth Judicial Dist. Court, 94 Nev. 631, 633, 584 P.2d 672, 673-74 (1978)).
Applying these factors, we conclude that petitioner’s delay
militates against entertaining this petition. In July 2015, petitioner
unconditionally waived a preliminary hearing on Count 3, one of many drug
charges set forth in the criminal complaint, pursuant to plea negotiations.”
After the district court rejected the plea agreement, petitioner moved to
have Count 3 remanded for a preliminary hearing.? The district court
denied petitioner's motion on March 1, 2016, aad a motion to reconsider on
October 4, 2016, because the waiver was unconditional. In September
2021, the district court scheduled trial for May 2022, with a calendar call in
April. In April 2022, petitioner filed this mandamus petition challenging
1The State addresses laches in its answer to the petition. Petitioner
did not respond to that argument.
2The bind-over order was limited to Count 3 and made no mention of
the other charges in the criminal complaint.
3The decision to reject the plea agreement is not before this court.
4The district court entered two orders of remand for a preliminary
hearing as to the other charges in the criminal complaint. As the other
charges had not been bound over to the district court, it is not clear that an
order of remand was necessary. However, we share the district court's
concern that no action had been taken on those counts in the justice court
after the negotiations were rejected. It further appears that when the
petition was filed with this court, the justice court still had not conducted a
supnene Court preliminary hearing on the other charges.
OF
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0) 167A the March 2016 decision to deny his motion for remand. Under these
circumstances, we conclude the over-six-year delay in challenging the
district court’s decision to deny the motion for remand is inexcusable and
that petitioner knowingly acquiesced to the district court’s decision to deny
his motion for remand. And although the State has not identified any
specific prejudice, further delay in bringing this matter to trial could make
a trial more difficult-as witnesses may become unavailable and memories
fade over time. Therefore, we decline to exercise our discretion to consider
this petition, and we
ORDER the petition DENIED.
4 ,
oot PN Claes ET
Parraguirre
AVG Sf
Stiglich Gibbo
&
oy
cc: Hon. Kimberly A. Wanker, District Judge
Jason Earnest Law, LLC
Attorney General/Carson City
Esmeralda County District Attorney
Esmeralda County Clerk
5The Honorable Mark Gibbons, Senior Justice, participated in the
supneme Count decision of this matter under a general order of assignment.
OF
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(0) 197A oi
3 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484409/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
UBALDO SALDANA GARCIA, ~ No. 83971
Appellant, _ ag
ve FILED
THE STATE OF NEVADA, : ae mee
Respondent. NOV 16 2022
ORDER OF AFFIRMANCE
This is an appeal from an amended judgment of conviction.
Eighth Judicial District Court, Clark County; Ronald J. Israel, Judge.}
On March 11, 2013, the district court convicted appellant of 13
counts of sexual assault on a child under the age of 14 years and 14 counts
of lewdness with a child under the age of 14 years. The district court
sentenced appellant to serve two consecutive terms of life with the
possibility of parole after 35 years and various concurrent terms. This .
court affirmed the judgment of conviction. Garcia v. State, No. 62921,
2015 WL 918769 (Nev. Mar. 2, 2015) (Order of Affirmance). The Nevada
Court of Appeals affirmed the denial of appellant’s postconviction petition
for a writ of habeas corpus. Saldana-Garcia v. State, Docket No. 74376-
COA, 2018 WL 6433085 (Nev. Ct. App. Dec. 4, 2018) (Order of
Affirmance).
On October 13, 2021, the State filed a motion to amend the
judgment of conviction to vacate the convictions and corresponding
concurrent sentences imposed for the lewdness counts because they were
pleaded as alternatives to the sexual assault counts. At a hearing on the
motion, appellant agreed that the lewdness counts should be vacated, but
he argued that the remedy should also include a new sentencing hearing.
ocean Caane 1Pursuant to NRAP 34(f)(1), we have determined that oral argument
= is not warranted in this appeal.
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The district court rejected appellant’s request and subsequently vacated
the lewdness convictions and dismissed those counts in an amended
judgment of conviction. This appeal follows.
Appellant argues that the district court should have held a
new sentencing hearing because the redundant lewdness convictions likely
influenced the overall sentence. Appellant further notes that the
sentencing judge did not preside over the trial and therefore did not know
the details about the case, and he argues that the State made inaccurate
statements at sentencing about the victim’s purported recantation.
The district court generally has wide discretion in sentencing
matters, and “absent an abuse of discretion, the district court’s
determination will not be disturbed on appeal.” Brake v. State, 113 Nev.
579, 584, 939 P.2d 1029, 1033 (1997) (quoting Randell v. State, 109 Nev. 5,
8, 846 P.2d 278, 280 (1993)). Having considered the record and the
parties’ briefs, we conclude that the district court did not abuse its
discretion in declining to conduct a new sentencing hearing.” Appellant
_has not cited relevant authority or provided a cogent argument that a new
sentencing is required in the circumstances presented here. See Maresca
v. State, 103 Nev. 669, 673, 748 P.2d 3, 6 (1987) (recognizing “[ilt is
appellant’s responsibility to present relevant authority and cogent
argument”). On multiple occasions, we have vacated or reversed
redundant convictions and related sentences without directing the district
court to conduct a new sentencing hearing. See, e.g., Shue v. State, 133
Nev. 798, 809, 407 P.3d 332, 340-41 (2017) (vacating redundant
2We reject the State’s argument that the denial of appellant’s
request for a new sentencing hearing is not cognizable in this appeal given
that decision relates to proceedings on the motion to amend the judgment
of conviction. See NRS 177.045 (providing that intermediate decisions of
SueKeME COURT the district court may be raised in an appeal from a final judgment).
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convictions and directing the district court to enter an amended judgment
of conviction); Byars v. Staté, 130 Nev. 848, 866, 336 P.3d 939, 951 (2014)
(reversing a conviction where the district court improperly adjudicated
appellant guilty of an offense that the parties agreed had merged with
another offense and requiring the district court to correct the judgment of
conviction); Braunstein v. State, 118 Nev. 68, 78-79, 40 P.3d 413, 420-21
(2002) (concluding the district court properly struck convictions for
lewdness as lewdness and sexual assault are mutually exclusive offenses
when involving the same conduct); Dossey v. State, 114 Nev. 904, 910, 964
P.2d 782, 785 (1998) (vacating redundant convictions and sentences). And
appellant's arguments about his counsel’s performance and _ the
prosecutor’s arguments at the sentencing hearing are not properly raised
in this appeal. See Jackson v. State, 133 Nev. 880, 881-82, 410 P.3d 1004,
1006 (Ct. App. 2017) (“[W]Je conclude that in an appeal taken from an
amended judgment of conviction, the appellant may only raise challenges
that arise from the amendments made to the original judgment of
conviction.”). But even if we considered those arguments in the context of
determining whether a new sentencing hearing is required because of the
combined prejudicial effect of the redundant lewdness convictions and
allegedly improper arguments at the sentencing hearing, appellant has
not demonstrated that the sentencing judge considered improper
arguments or impalpable or highly suspect evidence in imposing
consecutive sentences. See generally Echeverria v. State, 119 Nev. 41, 44,
62 P.3d 743, 745 (2003) (requiring a new sentencing hearing in front of a
different sentencing judge when the State breaches the plea agreement);
Brake, 113 Nev. at 585, 939 P.2d at 1033 (requiring a new sentencing
hearing when the district court improperly relied on the defendant’s
refusal to admit guilt and show remorse); Norwood v. State, 112 Nev. 438,
Supreme Court
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440, 915 P.2d 277, 278-79 (1996) (recognizing that consideration of
impalpable or highly suspect evidence requires a new sentencing hearing
in front of a different district court judge). Instead, the record shows that
the sentencing judge was informed of the facts of the case before imposing
the sentences.2 And the State’s arguments about the alleged recantation
do not amount to impalpable or highly suspect evidence. It also does not
appear that the lewdness counts influenced the sentencing judge’s decision
to impose consecutive sentences for two of the sexual assault counts. A
more reasonable reading of the record, as appellant appears to
acknowledge in his briefs, indicates the sentencing judge imposed two of
the sentences to be served consecutively because there were two victims.
Accordingly, we
ORDER the amended judgment of conviction AFFIRMED.*
© PaCS:
Toranaine A
oe CL)
Agen J. ot A Lh , Sr.J.
Stiglich Gibbons
cc: Hon. Ronald J. Israel, District Judge
Federal Public Defender/Las Vegas
Attorney General/Carson City
Clark County District Attorney
Eighth District Court Clerk
3As appellant notes, the sentencing judge did not preside over the
trial. Nevertheless, there is no indication that the sentencing judge was
not prepared for sentencing in this case.
4The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
Suprneme Court
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4 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484405/ | Supreme Court
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IN THE SUPREME COURT OF THE STATE OF NEVADA
ANTONIO SALAZAR, No. 85313
Petitioner,
vs.
THE FOURTH JUDICIAL DISTRICT Fy LE D
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF ELKO; NOV 16 2029
AND THE HONORABLE MASON E. 5
SIMONS, DISTRICT JUDGE,
Respondents,
and
THE STATE OF NEVADA,
Real Party in Interest.
ORDER DENYING PETITION
This original petition for a writ of mandamus, or alternatively
prohibition, challenges the district court’s denial of a pretrial petition for a
writ of habeas corpus and motion for reduction of bail or own recognizance
release.
Traditionally, a writ of mandamus is available to compel the
performance of an act which the law requires as a duty resulting from an
office or to control a manifest abuse or arbitrary or capricious exercise of
discretion.! NRS 34.160; Round Hill Gen. Improvement Dist. v. Newman,
97 Nev. 601, 603-04, 637 P.2d 534, 536 (1981). A manifest abuse of
discretion occurs when there is a clearly erroneous interpretation or
application of the law, and “[a]n arbitrary or capricious exercise of discretion
1Petitioner alternatively seeks a writ of prohibition. However, “[a]
writ of prohibition . . . will not issue if the court sought to be restrained had
jurisdiction to hear and determine the matter under consideration.”
Goicoechea v. Fourth Judicial Dist. Court, 96 Nev. 287, 289, 607 P.2d 1140,
1141 (1980).
22- Zo
is one founded on prejudice or preference rather than on reason, or contrary
to the evidence or established rules of law.” State v. Highth Judicial Dist.
Court (Armstrong), 127 Nev. 927, 931-32, 267 P.3d 777, 780 (2011) Gnternal
quotation marks and citations omitted). “[T]raditional mandamus relief
does not lie where a discretionary lower court decision results from a mere
error in judgment.” Walker v. Second Judicial Dist. Court, 136 Nev. 678,
680, 476 P.3d 1194, 1197 (2020) (Ginternal quotation marks omitted). Even
when the requirements of a traditional writ of mandamus are not met, this
court may consider advisory mandamus relief “[w]here the circumstances
establish urgency or strong necessity, or an important issue of law requires
clarification and public policy is served by this court’s exercise of its original
jurisdiction.” Schuster v. Eighth Judicial Dist. Court, 123 Nev. 187, 190,
160 P.3d 873, 875 (2007). It is solely within this court’s discretion whether
to entertain a mandamus petition. Gathrite v. Eighth Judicial Dist. Court,
135 Nev. 405, 407, 451 P.3d 891, 893 (2019).
Having considered the pleadings and record, we conclude that
extraordinary relief is not warranted in this case. Petitioner’s challenge to
whether sufficient identification evidence was presented at the preliminary
hearing is the type of challenge disfavored by this court because it does not
present a purely legal issue. See Kussman v. Eighth Judicial Dist. Court,
96 Nev. 544, 545-46, 612 P.2d 679, 680 (1980) (explaining that review of
pretrial probable cause determination through an original writ petition is
disfavored); Ostman v. Eighth Judicial Dist. Court, 107 Nev. 563, 565, 816
P.2d 458, 459-60 (1991) (entertaining a pretrial challenge where the
petition presented a purely legal issue). Petitioner further has not
demonstrated a manifest abuse or arbitrary or capricious exercise of
discretion in the denial of his motion to reduce bail. Petitioner has not
SUPREME CourRT
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(OQ) 1947 cB
2
presented a cogent argument explaining how the district court abused its
discretion in denying his motion to reduce bail. See Maresca v. State, 103
Nev. 669, 673, 748 P.2d 3, 6 (1987). And even were we to examine the justice
court’s decision, we discern no manifest abuse or arbitrary or capricious
exercise of discretion in its decision setting bail in this case. See Valdez-
Jimenez v. Eighth Judicial Dist. Court, 136 Nev. 155, 163-67, 460 P.3d 976,
985-88 (2020). Accordingly, we
ORDER the petition DENIED.?
i } Seer
etn Dy Share Em 3 C.J.
x te
Parraguirre
AAG OL a
Stiglich
cc: Hon. Mason E. Simons, District Judge
Evenson Law Office
Attorney General/Carson City
Elko County District Attorney
Elko County Clerk
2The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
Supreme Court
oF
Nevapa
(0) 19874 EB
3 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493076/ | ORDER ON DEBTOR’S OBJECTION TO AMENDED CLAIM [NO. 35] OF MILFORD MOTORS, INC. (DOC. NO. 107)
ALEXANDER L. PASKAY, Bankruptcy Judge.
THE MATTER under consideration in this Chapter 13 case is the Debtor’s Objection to Second Amended Proof of Claim Filed By Milford Motors, Inc. (Milford Motors). The Court reviewed the Objection and the record, heard argument of counsel and testimony of witnesses and now finds and concludes as follows:
At all relevant times, the Debtor was a principal and the president of Paradise Motors, Inc. (Paradise) and Paradise Motors of Estero, Inc. (Paradise of Estero), Florida corporations. Laurie Negronski (Negronski) was also an officer of the corporations. Milford Motors was in the business of the retail sale of pre-owned automobiles and trucks.
On June 11,1998, the Debtor, Negronski and the principal of Milford Motors, George R. Casto (Mr. Casto), executed an agreement entitled, “Agreement Between Paradise Motors, Laurie Russel Negron-ski, Bob Bean and Milford Motors, Inc.” (Agreement). The signature blocks do not reflect that the Debtor and Negronski signed the Agreement as representatives of Paradise or Paradise of Estero. Pursuant to the Agreement, Milford Motors was to furnish vehicles to Paradise for sale to the general public. The Agreement required Paradise to pay for the vehicles as follows:
UPON PURCHASE OF VEHICLES FROM MILFORD MOTORS INC, PARADISE MOTORS MAY FLOAT OR DEFER PAYMENT ON VEHICLES FOR A PERIOD OF 30 DAYS. AT THE END OF 30 DAYS, PARADISE MOTORS MAY PAY THE VEHICLE IN FULL OR PAY 20% OF THE PURCHASE PRICE AND EXTEND THE BALANCE DUE FOR AN ADDITIONAL 15 DAYS. AT THE END OF THE EXTENDED 15 DAYS, THE BALANCE DUE ON THE VEHICLE MUST BE PAID IN FULL.
(Debtor’s Exh. 2)
The Debtor also executed an untitled document (Supplemental Agreement) as an amendment to the original Agreement to authorize the purchase of vehicles up to the aggregate amount of $100,000.00. Mr. Casto, the president of Milford Motors, drafted the Supplemental Agreement. The Supplemental Agreement is signed by the Debtor, who is identified as Dealer. Although it appears on the face of the Supplemental Agreement that the Debtor was licensed as the automobile dealer, the 1998-1999 dealer licenses were held in the corporate names of Paradise and Paradise of Estero and not by the Debtor, individually. (Debtor’s Exhs. 1 and 2). Pursuant to the Supplemental Agreement, the Debt- or, as Dealer, agreed to pay for the vehicles purchased within forty-five days of the purchase, plus administration fees and eighteen percent interest per vehicle. (Creditor’s Exh. 2).
Mr. Casto, the president of Milford Motors testified that he believed that he drafted the Supplemental Agreement. He also testified that in referring to “dealer,” he was not referring to Paradise or Paradise of Estero, the entities that had the authority from the State of Florida to buy and sell vehicles. (T-53).
It is without dispute that under the Agreement and the Supplemental Agreement, Milford Motors delivered numerous vehicles to Paradise. (Creditor’s Exh. 6). The vehicles would be paid for by checks issued by Paradise’s corporate account. (T-34-37). Milford Motors maintained an inventory list of vehicles at the Paradise *572lots. The name of Paradise appears at the top of the inventory list. (Debtor’s Exh. 6)
Milford Motors did not receive payment as provided under the Agreement and the Supplemental Agreement. Of the twenty-one vehicles delivered to Paradise, five vehicles were returned to Milford Motors upon default in payment. The other vehicles were sold out of trust. Milford Motors is still in possession of the titles for the vehicles that are missing from the Paradise lots. (T-40).
On December 29, 1998, the Debtor signed three checks from the corporate checking account of Paradise, made out to Milford Motors as payee: (1) $6,321.35 for payment for a 1994 Chevrolet; (2) $6,849.50 for payment for a 1995 Toyota; and (3) $9,201.48 for payment for a 1996 GMC Sonoma. The checks were dishonored and returned by the bank for insufficient funds.
On January 26, 1999, the Debtor filed his voluntary Petition for relief under Chapter 13 of the Bankruptcy Code.
Milford Motors filed Proof of Claim No. 35, asserting a general unsecured claim in the amount of $82,900.00. Claim No. 35 amends previously filed Claim Nos. 15 and 32. The amount of the claim is based upon those vehicles that were not returned to Milford Motors and for which Milford Motors has not been paid. The values attributed to the vehicles are the amounts that Milford Motors actually paid for the vehicles.
The Debtor filed an Objection to Claim No. 35 on January 20, 2000, stating that the documents attached to Claim No. 35 were insufficient to support the allowance of the claim. He argues that the debt is a corporate debt of Paradise and/or Paradise of Estero and that he is not personally liable to Milford Motors in any amount. The Debtor testified that he never agreed to be personally responsible for the debts of Paradise. T-61.
Milford Motors argues that the Debtor is personally liable because he signed the Agreement, Supplemental Agreement, and the corporate checks without any indication that he was signing these documents as a representative of Paradise. Further, Milford Motors contends that its position is bolstered by the fact that the Debtor filled out a Credit Application and signed corporate checks without identifying his corporate capacity.
Parol evidence is admissible in those cases in which an ambiguity is found on the face of the instruments regarding the capacity in which the person had signed. See Newport Seafood, Inc. v. Neptune Trading Corp., 555 So.2d 376, 377 (Fla. 3rd DCA 1989) (citations omitted). Here, there is no question that both agreements are ambiguous. The Agreement is ambiguous because while the title to the Agreement names the Debtor as a party, the body of the Agreement does not. Although the Debtor signed the Agreement without referencing his corporate representation, none of the provisions contained within the body of the Agreement place any duties or obligations upon the Debtor in his individual capacity. The Supplemental Agreement is ambiguous because it does not reflect whether the borrower is Paradise or the Debtor. Thus, the intent must be gleaned from oral testimony and any documentary evidence that might shed light on their intent.
Mr. Casto testified that he believed that Milford Motors was conducting business with the Debtor and Negronski in their individual capacities. He stated that that is the reason why he requested and obtained personal financial statements of the Debtor and Negronski and not the corporate financial statement of Paradise.
On the other hand, the Debtor testified that he never agreed to be personally liable to Milford Motors. The Supplemental Agreement contains signature lines for Milford Motors and “Dealer.” Although the Debtor signed the Agreement, he is not an automobile dealer. The State of Florida, Department of Highway Safety *573and Motor Vehicles Dealer Licenses for the year 1998 - 1999 are issued in the names of Paradise Motor Sales, Inc. and Paradise Motors of Estero, Inc. Debtor’s Exhs. 1 and 2. The Supplemental Agreement provides that Milford Motors may take possession of the vehicles upon default in payment and that it is the automobile dealer who is responsible for the deficiency. Further, the Debtor points out that it was Paradise that applied for the line of credit and not the Debtor. The Credit Application is clearly an application by Paradise. Although Debtor and Neg-ronski furnished the requested personal background information about themselves on the Application, nothing in the Credit Application reflects that the Debtor and Negronski were applying for a line of credit in their personal capacities or that they were guarantying the obligations of Paradise.
Milford Motors argues that the checks reflect that the Debtor is personally liable for this debt. The checks were drawn on the corporate cheeking account of Paradise, but signed by the Debtor without identifying that he was signing the checks in his representative capacity. Section 673,4021, Florida Statutes, effective January 1, 1993, provides in part:
(3) If a representative signs the name of the representative as drawer of a check without indication of the representative status and the check is payable from an account of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person.
Pursuant to the express language of the Statute, the Debtor cannot be held personally liable to the extent that he signed checks that identify the corporate account.
However, when viewing all of the documents together in order to determine the Debtor’s liability, the documents reflect the parties’ intention that the Debtor would be personally liable. The documents show that Milford Motors contracted with one corporation, Paradise, and two individuals. All of the documents are signed in an individual capacity and no representative capacity is shown. The bodies of the agreements do not indicate that Paradise is to be solely liable.
It is difficult for this Court to accept the Debtor’s proposition that Milford Motors extended credit up to an amount of $100,000 to Paradise. The Debtor signed the Supplemental Agreement in his individual capacity and the fact that the signature line refers to the signatory as “Dealer” is irrelevant. What is relevant is that Milford Motors requested the personal financial statements of the Debtor and Neg-ronski but not the corporate financial statement of Paradise. This fact strongly indicates Milford Motors’ intent to look to the Debtor and Negronski for the obligations under the Agreement and Supplemental Agreement.
This Court is satisfied that the parties intended and both the Debtor and Negron-ski understood that the Debtor and Neg-ronski would be personally liable for the vehicles purchased. The documents, including the checks, may be indicative of corporate obligations. However, the totality of the circumstances belies that proposition.
Pursuant to 11 U.S.C. § 502(a), a proof of claim filed in proper form is deemed allowed, unless a party in interest objects. Fed.R.Bankr.Pro. 3001(f) provides that a proof of claim executed and filed in accordance with the Federal Rules of Bankruptcy Procedure shall constitute prima facie evidence of the validity and amount of the claim. The burden then shifts to the debtor to show that the claim is incorrect. Only if the debtor meets the burden of responding to the prima facie validity of the creditor’s properly filed claim does the burden shift back to the creditor to prove the existence and amount of the claim. See In re Vines, 200 B.R. 940, 948 (M.D.Fla.1996). The Debtor *574failed to meet his burden and his Objection should be overruled.
Accordingly, it is
ORDERED, ADJUDGED AND DECREED that the Objection to Claim No. 35 be, and the same is hereby overruled and Claim No. 35 is hereby allowed. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493077/ | ORDER GRANTING TRUSTEE WELT’S MOTION IN LIMINE
RAYMOND B. RAY, Bankruptcy Judge.
On July 7, 2000, the Court held a hearing to consider Plaintiff Trustee Welt’s Motion in Limine which seeks a determination that Defendants Randall Leshin, Esq. and Randall Leshin P.A. (collectively “Leshin”) are collaterally estopped from disputing in this adversary proceeding the factual and legal issues resolved pursuant to the final judgment entered on December 3, 1999 (“Final Judgment”) in connection with adversary proceeding styled Welt v. Investment Lease Corporation, Mae Muir, et. al., 96-01325-BKC-RBR-A (“Piper Adversary”).
The Court has carefully considered the Motion in Limine and the arguments made by Trustee Welt and Leshin at the hearing. Furthermore, the Court has considered and takes judicial notice of the history of the above-captioned bankruptcy case (“Warmus Case” or “Warmus Estate”) and the Piper Adversary. Being completely advised in the premises, the Court makes the following findings of fact and conclusions of law.
I. Background
A. Warmus and the American Way Group of Companies
The history of Thomas A. Warmus (“Warmus”) and his American Way group of companies is set forth in the decision styled In re American Way, 229 B.R. 496 (Bankr.S.D.Fla.1999). In American Way, the Court found that:
Warmus first became involved in the insurance business as a life insurance agent in July 1958. On May 15, 1963, Warmus formed the American Way Service Corporation (“AWSC”), an insurance agency. Later, AWSC became a holding company for other corporations in the business of selling vehicle service contract insurance, accident and disability insurance for purchasers of automobiles, and credit life insurance.... Between 1963 and 1988, Warmus formed other companies and the business of AWSC, and its affiliated companies, increased. (footnote omitted). Most of the companies were operated from the same business location in Southfield, Michigan, where one set of employees performed necessary services for all those corporations, including AWSC.
Id. at 507. By early 1994, AWSC and Warmus were suffering acute financial difficulties. In an effort to gain reprieve from his creditors, Warmus and his AWSC filed voluntarily petitions for bankruptcy protection on or about December 5, 1994 (“Petition Date”). After a year in which Warmus and AWSC were unable to reorganize, chapter 11 trustees were appointed and charged with liquidating the estates.
In American Way, the Court found that the American Way group of companies was a “key person operation,” in which all relevant financial decisions and allocations of property were handled by Warmus. Id. at 527. The Court further found that the American Way group of companies epitomized the interrelated corporate structure. Id. at 526 (citing Eastgroup Properties v. Southern Motel Ass’n Ltd., 935 F.2d 245 (11th Cir.1991)). In this regard, the Court *581observed that “Warmus treated all the corporations basically as one and commingled assets as he wanted.” Id. at 507 (footnote 29).
The Piper Adversary involved one of the entities that was owned and/or controlled by Warmus under the umbrella of his American Way group of companies.
B. The Piper Adversary1
In the Piper Adversary, Trustee Welt sued Investment Lease Corporation (“Lease Corp.”), a Delaware corporation, and its sole shareholder Mae (Muir) Van-derPlate (“VanderPlate”), Warmus’ mother-in-law, concerning the ownership of a certain 1989 Piper Saratoga FAA aircraft number N9165N (“Saratoga”).2 (PACP 1). On the Petition Date, the Saratoga was titled in the name of Lease Corp. and was thereafter transferred by Warmus to Van-derPlate immediately following the appointment of a chapter 11 trustee for the Warmus Estate. (PACP 1). Trustee Welt based his ownership claim on the allegation that Lease Corp. was the alter ego of Warmus and that VanderPlate had no real interest in Lease Corp. or the Saratoga. (PACP 1). In particular, Trustee Welt’s claims were based on allegations that Warmus (a) paid for the Saratoga; (b) insured the Saratoga; (c) maintained the Saratoga; (d) flew the aircraft; (e) exercised sole dominion and control over the aircraft; and (f) held himself out to the public as the owner of the aircraft. (PACP 1). Conversely, Trustee Welt alleged that VanderPlate (a) was over seventy (70) years old; (b) had never flown an aircraft; (c) had never owned an aircraft and otherwise knew very little about air-crafts; and (d) lacks the financial ability to own and operate an aircraft. (PACP 1). Accordingly, through the Piper Adversary, Trustee Welt requested a declaratory judgment that the Saratoga was property of the Warmus Estate and requested a judgment finding that the transfer of the Saratoga violated 11 U.S.C. §§ 544 and/or 549. (PACP 1).
C. The Piper Adversary
i. Leshin’s Involvement in the Piper Adversary
Leshin filed an appearance in the Piper Adversary as attorney for Lease Corp. and VanderPlate and assisted them in responding to the complaint and ultimately filing counterclaims for abuse of process, set-off, and breach of fiduciary duty. (See PACP 6, 7 and 27). As an advocate, Leshin aggressively assisted VanderPlate and Lease Corp. in litigating the issues raised in the Piper Adversary by engaging protracted discovery including paper discovery and multiple depositions. (See PACP 8, 9, 16, 19, 20, 29-33, 43, 45, 46, 47, 57-61, 64-67, 72-84, 89-101, 104, 105 and 108). Ultimately, the discovery in the Piper Adversary revealed to Trustee Welt that the proceeds from the sale of the Saratoga were delivered to Leshin. Therefore, Leshin was potentially liable to the estate under 11 U.S.C. §§ 542 and 550. As a result, Trustee Welt requested leave to amend his complaint in the Piper Adversary to include Leshin as a defendant in the case to pursue the proceeds from the sale of the Saratoga. (PACP 127).3
*582Leshin objected to the filing of an amended complaint in the Piper Adversary. (PACP 128). Ultimately, on June 9, 1999, the Court held a hearing on the motion to file an amended complaint in the Piper Adversary (“Amendment Hearing”). (PACP 124). At the Amendment Hearing, Trustee Welt advised the Court and Lesh-in that should the Court fail to grant leave to file the amended complaint, Trustee Welt intended to file a separate adversary against Leshin under 11 U.S.C. §§ 542 and 550 once a final judgment was obtained in the Piper Adversary. (PACP 174). Nevertheless, Leshin indicated his desire not to participate in the Piper Adversary by continuing to object to the filing of the amended complaint. (PACP 174). In particular, Leshin argued that:
[I]f in fact the Investment Lease assets are determined to be property of the estate, then there is a turnover action that could be forthcoming against me or a damage action, but at this stage of the game I would think that much like under Section 550 it would be premature. So, Your Honor, I would respectfully ask the Court to deny leave to amend at this time.... [I]n any event, the trustee is not going to be prejudiced because he will always have his one year to go ahead and file suit if he wants to.
(PACP 174, pp. 15-16). On June 14, 1999, this Court granted Leshin’s request and entered its Order Denying Motion for Leave to Amend. (PACP 145).
Thereafter, Leshin was presented with a second opportunity to participate in the Piper Adversary when VanderPlate filed a motion seeking to add Leshin as a third party defendant. (PACP 149). Once again, Leshin objected to being added as a party to the Piper Adversary. (PACP 151). Consistent with Leshin’s request, the Court again permitted Leshin to remain on the sidelines while the Piper Adversary proceeded to judgment. (PACP 154).
ii. Events Subsequent to Leshin’s Withdrawal
The vast majority of discovery conducted between the parties occurred prior to Leshin’s withdrawal. (See, Piper Adversary, generally). Shortly thereafter, the parties informed the Court that the Piper Adversary was ready for trial.
On the eve of trial, Trustee Welt, Lease Corp. and VanderPlate negotiated the terms of a Final Judgment which acknowledged what the evidence clearly established, that: (a) the Saratoga airplane was improperly transferred, and thus the transfer was avoided pursuant to 11 U.S.C. §§ 362, 544(b) and 549; (b) Trustee Welt may file suit to recover, for the benefit of the estate, the Saratoga or its value, from all initial, immediate, mediate or subsequent transferees pursuant to 11 U.S.C. § 550; and (c) the Saratoga Proceeds are property of the bankruptcy estate pursuant to 11 U.S.C. § 541. (PACP 170).4 Furthermore, Trustee Welt informed Leshin of the terms of the Final Judgment before it was entered and informed Leshin that Trustee Welt intended to seek recovery from Leshin pursuant to 11 U.S.C. § 550. (Adv.C.P. 32, at Exhibit “G”).
On December 3, 1999, the Court entered the Final Judgment. (PACP 170). To date, Leshin has failed to challenge the entry of the Final Judgment.
D. Commencement of the Above-Styled Adversary
On February 2, 2000, Trustee Welt commenced the above-styled adversary case. (Adv.C.P.l). In his complaint, Trustee *583Welt seeks to recover the Saratoga proceeds as property of the estate or as transfers previously avoided pursuant to 11 U.S.C. §§ 542 or 550. (Adv.C.P.1).
On June 6, 2000, Defendants filed an answer to the Complaint and a counter claim against Trustee Welt (collectively “Answer”). (Adv.C.P. 28). In large part, the myriad of defenses and claims brought by Defendants in the Answer are premised upon a challenge to the validity of the factual findings and legal conclusions set forth in the Final Judgment (Adv.C.P.28).
In his Motion in Limine, Trustee Welt seeks to bar Leshin from attacking the factual and legal issues resolved in the Final Judgment based upon the doctrine of collateral estoppel, thereby preventing the relitigation of issues resolved in the Piper Adversary. For the reasons set forth below, the Court finds the application of collateral estoppel to be appropriate due to the specific facts of this case.
II. Collateral Estoppel
The doctrine of collateral estop-pel or issue preclusion bars re-litigation of an issue of fact or law that has been litigated and decided in a prior suit. In other words, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude revisiting the issue in subsequent litigation. Mike Smith Pontiac, GMC, Inc. v. Mercedes-Benz of North America, Inc., 32 F.3d 528, 532 (11th Cir.1994) (citations omitted). The application of collateral estoppel or issue preclusion is committed to the sound discretion of the trial court, and the policy supporting collateral estoppel is to protect litigants from the burden of re-litigating identical issues and to promote judicial economy by preventing needless litigation. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979).
The four prerequisites to the application of collateral estoppel are as follows: (1) the issue(s) at stake must be identical to the one alleged in the prior litigation; (2) the issue(s) must have been actually litigated in the prior suit; (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in the earlier action; and (4) the party against whom the earlier decision is asserted must have had a full and fair opportunity to litigate the issue(s) in the earlier proceeding. Cohen v. U.S., 924 F.Supp. 1164 (S.D.Fla.1996). For the following reasons, the Court finds all of these elements satisfied in this case.
The requirements that the issues be actually litigated and necessary to the judgment in order for issue preclusion to apply are altered somewhat in the context of a consent decree which is intended to avoid litigation. In these circumstances, the crucial inquiry is the intention of the parties as manifested by the consent decree and the evidence. In re Halpern, 810 F.2d 1061, 1064, (11th Cir.1987).
Here, the issue at the very heart of the Piper Adversary was whether the Sar-atoga was property of the bankruptcy estate such that the proceeds from its transfer were recoverable under 11 U.S.C. § 362, 542 544 and/or 549. (PACP 1). Lease Corp. and VanderPlate fully litigated these issues, with the actual aid and assistance of Leshin as counsel. (PACP 6-9,16, 19, 20, 27, 29-33, 43, 45, 46, 47, 57-61, 64-67, 72-84, 89-101, 104, 105 and 108). In fact, at the time these issues were litigated, Leshin had actual knowledge that he was a target under 11 U.S.C. §§ 542 and/or 550, and therefore, Leshin was, in effect, representing his own interests through VanderPlate and Lease Corp. (compare PACP 127 and 128, with Adv.C.P. 28).
In fact, in Leshin’s “counterclaims” filed in this action, he admits to having accepted the Saratoga proceeds in payment for legal services to Dailey, Lease Corp. and Van-derPlate and that, prior to accepting the money, he conducted due diligence to determine whether proceeds from the sale of the Saratoga could be subject to the own*584ership claims of the Warmus Estate. (Adv.C.P.28) Furthermore, the record clearly demonstrates that Leshin was aware that the Court intended the resolution of the Piper Adversary to foreclose further litigation of the issues presented therein when it granted Leshin’s objection to being added as a party defendant. Leshin had at least two opportunities to litigate in the Piper Adversary through joinder motions, but he successfully objected to participating in that matter. Accordingly, the Court finds that Lease Corp., VanderPlate, and Leshin had ample opportunity, and in fact, did fully litigate the issues raised by the Piper Adversary which the parties intended to be foreclosed by the entry of the Final Judgment.
The Court also finds that the issues in this case for which the Trustee seeks the application of collateral estoppel are identical to the issues raised in the Piper Adversary. Therefore, in the interests of justice and fairness, the Court concludes that giving preclusive effect to the Final Judgment is consistent with the policy of the doctrine of collateral estoppel because it protects creditors from the sort of frivolous litigation that continues to plague the Warmus Estate, including litigation by Leshin. Further, it will promote judicial economy by preventing the re-litigation of issues that have been conclusively established by the Final Judgment.
III. Conclusion
For the reasons discussed herein, it is—
ORDERED and ADJUDGED as follows:
1. The Motion in Limine is hereby GRANTED.
2. Leshin is hereby estopped from disputing any of the factual and legal issues resolved in the Final Judgment. In particular, and without limitation, Leshin is hereby estopped from challenging in this adversary proceeding that: (a) the Sarato-ga airplane was improperly transferred and avoided pursuant to 11 U.S.C. §§ 362, 544(b) and 549; (b) Trustee Welt may file suit to recover, for the benefit of the estate, the Saratoga or its value, from all initial, immediate, mediate or subsequent transferees pursuant to 11 U.S.C. § 550; and (c) the Saratoga Proceeds are property of the bankruptcy estate pursuant to 11 U.S.C. § 541. (PACP 170).
. Citations to the record in the Piper Adversary shall be reflected as "PACP_”. Citations to the record in the above-styled adversary proceeding shall be reflected herein as "Adv.C.P_”
. For ease of reference, all of the actions taken in the Piper Adversary are attributed to Trustee Welt, notwithstanding the fact that most of these actions were taken by former chapter 11 trustee Richard Langhorne ("Langhorne’-'). For reasons unrelated to this matter, on October 16, 1998 Langhorne was removed from his position as chapter 11 trustee of the Warmus Estate and as Liquidating Trustee of the Thomas A. Warmus Liquidating Trust ("Liquidating Trust”). On October 20, 1998, the U.S. Trustee's Office appointed Trustee Welt as chapter 11 trustee of the Warmus Estate, and thereafter, this Court approved the selection of Trustee Welt.
.Shortly thereafter, and while the motion to amend was pending, the Court authorized Leshin to withdraw as counsel to VanderPlate and Lease Corp. (PACP 140).
. The settlement also provided that Trustee Welt would not seek to satisfy the Final Judgment against VanderPlate personally. (PACP 170). This agreement was consistent with the allegations of the complaint and the evidence that Warmus used VanderPlate as a mere conduit for the transfer, and therefore, Trustee Welt might not have been able to recover from VanderPlate personally in any event. See, e.g., In re Chase and Sanborn Corp., 813 F.2d 1177 (11th Cir.1987) | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484442/ | 21-2022-cv
Gentes v. Town of Sprague, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 17th day of November, two thousand twenty-two.
PRESENT: ROBERT D. SACK,
RICHARD C. WESLEY,
JOSEPH F. BIANCO,
Circuit Judges.
Robert Gentes,
Plaintiff-Appellant,
v. 21-2022-cv
Catherine Osten, Town of Sprague,
Defendants-Appellees.
FOR PLAINTIFF-APPELLANT: TODD STEIGMAN, Madsen, Prestley &
Parenteau, LLC, Hartford, CT.
FOR DEFENDANTS-APPELLEES: JAMES N. TALLBERG (Kimberly A. Bosse,
on the brief), Karsten & Tallberg, LLC,
Rocky Hill, CT.
Appeal from the order of the United States District Court for the District of Connecticut
(Bryant, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the order of the district court is VACATED, and the action is REMANDED for
further proceedings consistent with this order.
Plaintiff-appellant Robert Gentes appeals from a July 27, 2021 order of the United States
District Court for the District of Connecticut (Bryant, J.) sua sponte staying the case pursuant to
Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), pending the
resolution of an ongoing Connecticut state-court action. We assume the parties’ familiarity with
the underlying facts and procedural history, to which we refer only as necessary to explain our
decision.
BACKGROUND
This lawsuit, as well as the concurrent state-court proceeding, involves Gentes’s
employment as the Business/Facilities Manager for the Town of Sprague Board of Education (“the
Town Board”). In May 2019, the Town of Sprague (“the Town”) brought a state-court action
against Gentes for breach of contract, breach of fiduciary duty, violation of Connecticut General
Statute § 7-349, and negligence, alleging that he mishandled and overspent funds allocated to the
Town Board for Fiscal Year 2018. In July 2020, while the state lawsuit was pending, Gentes
brought this federal lawsuit against the Town and Catherine Osten asserting, inter alia, claims
under 42 U.S.C. § 1983 for alleged violations of his constitutional rights, including the following:
(1) Osten selectively used her powers as the Town’s First Selectman to punish him in violation of
the Equal Protection Clause of the Fourteenth Amendment; (2) Osten retaliated against him for
speaking on matters of public concern in violation of the First Amendment; (3) Osten violated his
2
procedural due process rights under the Fourteenth Amendment by recklessly making false and
stigmatizing public statements about him without an opportunity for a name-clearing hearing; (4)
Osten violated his substantive due process rights by using the powers of her office to punish and
harass him; and (5) the Town is liable, under Monell v. Department of Social Services of the City
of New York, 436 U.S. 658 (1978), for the unconstitutional actions of policymaker Osten.1
Defendants moved to dismiss and/or stay this lawsuit based on the “prior pending action
doctrine” which, according to defendants, warranted dismissal or a stay of the federal lawsuit
during the pendency of the Town’s “parallel,” first-filed state-court action in Connecticut. The
district court denied defendants’ motion, reasoning that the prior pending action doctrine only
applied to two parallel federal actions. However, the district court sua sponte stayed this case
pending resolution of the state-court case pursuant to the Colorado River abstention doctrine.
DISCUSSION
The Colorado River abstention doctrine recognizes that, “while the rule is that the
pendency of an action in the state court is no bar to proceedings concerning the same matter in the
Federal court having jurisdiction, exceptional circumstances may on occasion permit the dismissal
of a federal suit due to the presence of a concurrent state proceeding for reasons of wise judicial
administration.” Zemsky v. City of New York, 821 F.2d 148, 152 (2d Cir. 1987) (internal quotation
marks and brackets omitted) (quoting Colorado River, 424 U.S. at 817–18). However, we have
emphasized that “[a]bstaining from exercising federal jurisdiction ‘is the exception, not the rule.’”
Mochary v. Bergstein, 42 F.4th 80, 84 (2d Cir. 2022) (quoting Colorado River, 424 U.S. at 813).
Indeed, “[w]here a federal court has subject matter jurisdiction, it has a virtually unflagging
1
In addition to these constitutional claims, Gentes asserted common law claims against Osten for
defamation, false light invasion of privacy, and intentional infliction of emotional distress.
3
obligation to exercise that jurisdiction, even if an action concerning the same matter is pending in
state court.” Id. (citation and internal quotation marks omitted); see also Woodford v. Cmty. Action
Agency of Greene Cnty., Inc., 239 F.3d 517, 522 (2d Cir. 2001) (noting that “[t]he abstention
doctrine comprises a few ‘extraordinary and narrow exceptions’ to a federal court’s duty to
exercise its jurisdiction” (quoting Colorado River, 424 U.S. at 813)).
Although we review a district court’s decision to abstain under the deferential abuse of
discretion standard, we have noted that “in the abstention context our review is especially
rigorous.” Mochary, 42 F.4th at 85 (internal quotation marks and citation omitted). Thus, “where
a case does not meet traditional abstention requirements ‘there is little to no discretion to abstain.’”
Id. (quoting Niagara Mohawk Power Corp. v. Hudson River-Black River Regulating Dist., 673
F.3d 84, 99 (2d Cir. 2012)).
District courts follow a two-step inquiry to determine whether abstention is warranted. The
first step is to determine whether the state and federal proceedings are parallel. Mochary, 42 F.4th
at 85. Federal and state proceedings “are parallel when substantially the same parties are
contemporaneously litigating substantially the same issue in another forum.” Dittmer v. Cnty. of
Suffolk, 146 F.3d 113, 118 (2d Cir. 1998) (quoting Day v. Union Mines Inc., 862 F.2d 652, 655
(7th Cir. 1988)). If a district court finds that two actions are parallel under Colorado River, it must
then “weigh six factors, with the ‘balance heavily weighted in favor of the exercise of
jurisdiction.’” Burnett v. Physician’s Online, Inc., 99 F.3d 72, 76 (2d Cir. 1996) (quoting Moses
H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 16 (1983)). These six factors are:
“(1) whether the controversy involves a res over which one of the courts has assumed jurisdiction;
(2) whether the federal forum is less inconvenient than the other for the parties; (3) whether staying
or dismissing the federal action will avoid piecemeal litigation; (4) the order in which the actions
4
were filed and whether proceedings have advanced more in one forum than in the other; (5)
whether federal law provides the rule of decision; and (6) whether the state procedures are adequate
to protect the plaintiff’s federal rights.” Woodford, 239 F.3d at 522 (citations omitted). “In this
analysis, the balance is heavily weighted in favor of the exercise of jurisdiction. Thus, the facial
neutrality of a factor is a basis for retaining jurisdiction, not for yielding it.” Id. (internal quotation
marks, citations, and brackets omitted).
As set forth below, assuming arguendo that the state and federal lawsuits constitute parallel
proceedings, the district court abused its discretion in concluding that the Colorado River factors
warranted abstention pending resolution of the state-court proceeding.2
Although the district court acknowledged the six factors that must be considered in
deciding whether to abstain pursuant to Colorado River, its analysis focused exclusively on the
third and fourth factors—i.e., the avoidance of the risk of piecemeal litigation and comparison of
the progression of the two actions. The district court determined that the avoidance of piecemeal
litigation was the most important factor weighing in favor of abstention given the possibility of
conflicting verdicts because, “[i]f the two cases are allowed to proceed to judgment independently,
a situation could arise in which Plaintiff Gentes prevails on one or more claims in the instant matter
while simultaneously being held liable in the state court action.” Joint App’x at 84. With respect
to the fourth factor, the district court found that it also counseled in favor of abstention because
2
In addition to challenging the district court’s balancing of the factors, Gentes alternatively argues that the
district court procedurally erred by staying the case sua sponte pursuant to Colorado River without
providing him with notice and an opportunity to be heard, especially since defendants had affirmatively
disclaimed application of that abstention doctrine. However, because we conclude that the district court
abused its discretion in its application of the Colorado River factors and abstention is unwarranted here, we
need not address this alleged procedural defect.
5
the state-court action was filed before the federal-court lawsuit, the parties had completed
discovery, and a summary judgment motion was pending.
In reaching its decision based upon these two factors, the district court erred in several
respects. First, after finding that the third and fourth factors favored staying the lawsuit, the district
court failed to carefully consider each of the other factors. See Mochary, 42 F.4th at 86 (“[W]e
reiterate that courts deciding whether to abstain under Colorado River must carefully consider
each of the factors.” (emphasis in original)). Instead, it addressed the other factors in one sentence,
noting that “[n]one of the other Colorado River factors militate against staying this litigation.”
Joint App’x at 84. That conclusion was incorrect. As an initial matter, although the parties agreed
that the first factor (whether the controversy involves a res over which one of the courts has
assumed jurisdiction) and the second factor (whether the federal forum is less inconvenient than
the other forum for the parties) were not at issue here, we have emphasized “the facial neutrality
of a factor is a basis for retaining jurisdiction, not for yielding it.” Woodford, 239 F.3d at 522.
Therefore, these two facially neutral factors weigh against abstention.
Moreover, both the fifth and sixth factors—namely, whether federal law provides the rule
of decision and whether the state procedures are adequate to protect Gentes’s federal rights—
weigh against abstention. Here, the complaint asserts multiple causes of action for alleged
violations of Gentes’s federal constitutional rights, and none of those causes of action will be
litigated in the state-court lawsuit where the Town has brought claims against Gentes under
Connecticut law. Put simply, Gentes has asserted no claims in the state-court proceedings and
cannot obtain relief for the alleged violations of his constitutional rights that he asserts in this
federal proceeding. See Woodford, 239 F.3d at 523 (“Even where there are some state-law issues,
the presence of federal-law issues must always be a major consideration weighing against
6
surrender.” (internal quotation marks and citation omitted)). In addition, even if there were to be
findings of liability against Gentes for all of the state-law claims in the Connecticut lawsuit
(including breach of contract, breach of fiduciary duty, and negligence) based on mismanagement
of the Town’s money, such findings would not necessarily preclude his federal claims because
those claims have different elements from the state-law causes of action. For example, findings
of liability against Gentes on the Connecticut state claims would not necessarily be dispositive as
to federal claims that Osten violated his due process rights, his First Amendment rights, and
engaged in selective enforcement. Indeed, the defendants conceded in the district court that “there
is a possibility that the state court’s determinations may not resolve all issues presented here.”
Dist. Ct. ECF No. 15-1, at 14. In short, there is “substantial doubt” as to whether the “parallel
state-court litigation will be an adequate vehicle for the complete and prompt resolution of the
issues between the parties.” Moses H. Cone Mem’l Hosp., 460 U.S. at 28 (concluding that, under
such circumstances, “it would be a serious abuse of discretion to grant the stay or dismissal at all”).
Therefore, the district court erred in failing to properly consider and balance the fifth and sixth
factors, which both militate against abstention.
Finally, the district court placed undue weight on the third factor in its abstention analysis
based upon its concern about the need to avoid piecemeal litigation. As noted above, because
Gentes’s federal claims have different elements and seek different relief than the Town’s causes
of action in state court, staying the instant litigation will not avoid piecemeal litigation. See
Woodford, 239 F.3d at 524 (“[W]hile all of the claims focus on the conduct of [the defendant],
adjudication of the claims asserted in the state-court actions would not dispose of the federal
claims, and the relief requested by plaintiffs is greater in the federal actions.”); see also All. of Am.
Insurers v. Cuomo, 854 F.2d 591, 603 (2d Cir. 1988) (explaining “[t]here is no threat of piecemeal
7
litigation” in support of Colorado River abstention where “[t]he resolution of the federal
constitutional questions will settle the federal issues, regardless of the outcome of the state
litigation”). In addition, as we have explained, “the primary context in which we have affirmed
Colorado River abstention in order to avoid piecemeal adjudication has involved lawsuits that
posed a risk of inconsistent outcomes not preventable by principles of res judicata and collateral
estoppel.” Woodford, 239 F.3d at 524. Here, because Gentes is a party to both lawsuits, the
doctrines of res judicata and collateral estoppel would prevent him from re-litigating any
adjudicated claims or issues from the state-court action that overlap with his federal and state-law
claims in this lawsuit, and vice versa. Thus, given the absence of a risk of inconsistency, “this
factor certainly does not weigh nearly as strongly in favor of abstention as the district court
believed.” Niagara Mohawk Power Corp., 673 F.3d at 102.
In sum, the district court erred in its application of the Colorado River factors and in its
conclusion that a stay in this case was warranted pending resolution of the state-court proceeding.
This case does not present the exceptional circumstances that are required under Colorado River
for abstention to apply.
* * *
Accordingly, we VACATE the order of the district court and REMAND the action for
further proceedings consistent with this order.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
8 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484453/ | Cite as 2022 Ark. 203
SUPREME COURT OF ARKANSAS
No. CR-22-279
Opinion Delivered: November 17,
MARKUS GENTRY 2022
APPELLANT
APPEAL FROM THE CRAIGHEAD
V. COUNTY CIRCUIT COURT
[NO. 16JCR-19-54]
STATE OF ARKANSAS
APPELLEE HONORABLE CINDY THYER,
JUDGE
AFFIRMED.
RHONDA K. WOOD, Associate Justice
This appeal follows the circuit court’s denial of multiple claims of ineffective
assistance of counsel made by Markus Gentry, who was convicted of second-degree murder
and sentenced to life in prison. Gentry filed the petition under Arkansas Rule of Criminal
Procedure 37. The circuit court denied the petition by a detailed written order but did not
hold a hearing. Gentry now argues the circuit court erred on seven separate claims of
ineffective assistance. We affirm on all points.
I. Factual Background
Markus Gentry received a life sentence after he was convicted of second-degree
murder. We affirmed the conviction on direct appeal. Gentry v. State, 2021 Ark. 26. The
factual circumstances involved Gentry going to a barbershop in Jonesboro where Lewis
Gamble worked. A gunfight ensued. Both men were shot, and Gamble died from his
wounds.
Gentry argued on direct appeal that insufficient evidence supported the conviction
because the killing was justified by self-defense. We rejected that argument by recounting
the following evidence:
Before he died, Gamble told Sergeant Chester that Mark G. [i.e., Gentry] shot him
and that they had not been fighting before he was shot. [Two witnesses] both testified
that they had not heard anyone arguing before they heard the gunshots. The medical
examiner testified that the autopsy did not show that Gamble sustained injuries
consistent with a fight. Also, Gentry did not call for assistance after the shooting but
fled from the barbershop. We have held that flight is probative evidence of guilt.
The jury heard Gentry’s version of events. The jury heard Gentry say that Gamble
shot him in the back of the leg when he got up to leave the shop. The jury heard
Gentry say that Gamble continued shooting as Gentry tried to wrestle Gamble’s gun
away from him.
Gentry, 2021 Ark. 26, at 6 (internal citations omitted). The State also introduced evidence
about Gentry’s membership in a gang. The State’s theory was that Gentry, active at the time
in the Piru gang, shot Gamble out of revenge because he had disrespected Jackie Jones. Id.
at 9. It had been established at trial that Gamble owed money to Jones, Gentry’s maternal
figure. After the jury returned its guilty verdict, the trial proceeded to a separate sentencing
hearing. Gentry had been previously convicted of four crimes involving violence: two
counts of terroristic acts and two counts of first-degree battery. The jury could therefore
sentence Gamble as a habitual offender to a prison term of between forty years and eighty
years, or life. The jury imposed a life sentence.
After our mandate issued, Gentry filed a Rule 37 petition alleging several instances
of ineffective assistance of counsel. Gentry later filed an amended petition. The circuit court
dismissed the amended petition with prejudice by issuing a detailed written order. On
2
appeal, Gentry argues the circuit court erred on seven distinct allegations of ineffective
assistance of counsel.
II. Law and Analysis
Under the two-prong standard from Strickland v. Washington, 466 U.S. 668 (1984),
the petitioner must show that counsel’s performance was deficient and that the deficient
performance prejudiced the defense. See Holland v. State, 2022 Ark. 138, at 2, 645 S.W.3d
318, 321. For the first prong, the petitioner must show that counsel made errors so serious
that counsel deprived the petitioner of the counsel guaranteed by the Sixth Amendment.
Sandrelli v. State, 2017 Ark. 156, at 5, 517 S.W.3d 417, 420. We presume counsel was
effective, and petitioner must highlight specific acts or omissions that did not result from
reasonable professional judgment. Coakley v. State, 2021 Ark. 207, at 2, 633 S.W.3d 328,
330.
For the second prong, petitioner must show the deficient performance resulted in
prejudice so pronounced that it deprived the petitioner of a fair trial whose outcome cannot
be relied on as just. Williams v. State, 2016 Ark. 459, at 3, 504 S.W.3d 603, 605. Petitioner
must show a reasonable probability that the jury’s decision would have been different but
for the deficient performance. Id. Both deficient performance and prejudice must be shown
before a court can grant relief. See id. “There is no reason for a court deciding an ineffective-
assistance claim to address both components of the inquiry if the defendant makes an
insufficient showing on one.” Id. at 3, 504 S.W.3d at 605–06.
When the files and records of the case conclusively show that the petitioner is entitled
to no relief, the circuit court need not hold an evidentiary hearing. Ark. R. Crim. P. 37.3;
3
Lacy v. State, 2013 Ark. 34, at 4, 425 S.W.3d 746, 748. Conclusory allegations unsupported
by facts do not provide a basis for either an evidentiary hearing or postconviction relief.
Barber v. State, 2016 Ark. 54, at 9, 482 S.W.3d 314, 322. We will not reverse unless the
circuit court’s findings were clearly erroneous. Holland, 2022 Ark. 138, at 2, 645 S.W.3d at
321.
A. Extreme-Emotional-Disturbance Jury Instruction
At trial, the jury was instructed on first-degree murder, second-degree murder, and
reckless manslaughter. They convicted Gentry on second-degree murder. Gentry claimed
his trial counsel was ineffective for failing to ask for an extreme-emotional-disturbance jury
instruction, too. The circuit court rejected this claim because Gentry could show neither
deficient performance nor prejudice. The court reasoned that, throughout the trial, Gentry
had maintained that he had shot Gamble in self-defense. The court concluded Gentry could
not show that submission of the extreme-emotional-disturbance manslaughter instruction
would have led to a different outcome.
Gentry argues the circuit erred on the prejudice prong because the jury had convicted
him of the lesser-included defense of second-degree murder; this shows that the jury was
inclined to convict him of a crime with a less-culpable mental state. Had the jury also been
instructed on extreme-emotional-disturbance manslaughter, it would have had “the full
panoply of possible resolutions before it.”
We affirm because the circuit court did not clearly err when it concluded the lack of
an extreme-emotional-disturbance instruction caused no prejudice. As the circuit court
noted, Gentry’s defense all along was self-defense and “he never claimed emotional
4
disturbance.” Gentry never argued at trial that the shooting was a crime of passion. We have
held that a jury should be instructed on extreme-emotional-disturbance manslaughter when
the evidence shows that the defendant killed the victim in the moment following sufficient
provocation, such as “physical fighting, a threat, or a brandished weapon.” Fincham v. State,
2013 Ark. 204, at 10–11, 427 S.W.3d 643, 650. The emotional disturbance or “passion”
must have been “caused by a provocation apparently sufficient to make the passion
irresistible.” Douglas v. State, 2019 Ark. 57, at 8, 567 S.W.3d 483, 490. The evidence falls
short of that here.
Consider the facts presented at trial. This evidence showed that Gentry went to
Gamble’s barbershop with intent to settle a score. Gentry had been upset that Gamble failed
to pay his maternal gang figure, Jackie Jones, for damage Gamble’s relatives caused to her
car. Various Facebook posts showed Gentry’s intent to avenge this act of “disrespect.” And
most importantly, Gentry armed himself with a gun for the encounter and fled from the
scene rather than calling for help. Nor did Gentry’s own testimony provide evidence of
extreme emotional disturbance.
The jury also had options other than just convicting Gentry of first-degree murder
or second-degree murder. For example, the jury could have convicted Gentry of reckless
manslaughter, a lesser-included offense. Or the jury could have acquitted Gentry based on
his justification defense. As the jury rejected his justification defense and the reckless-
manslaughter instruction, an added instruction for extreme-emotional-disturbance
manslaughter was unlikely to yield a different jury decision. Thus, we affirm the circuit
5
court’s holding that the existence of the additional jury instruction was not reasonably
probable to change the outcome of the trial.1
B. Comments During Closing Argument
In his next claim, Gentry argues that trial counsel should have objected to several
alleged misstatements by the prosecutor during closing argument about the justification
defense. The prosecutor told the jury that, to acquit on the basis of self-defense, it must have
“reasonably believed Lewis Gamble was using, or about to use physical force, and that
[Gentry] only used such force as he reasonably believed necessary.” Gentry argues this
misstated the law because the justification defense instead required the jury to acquit if there
was any reasonable doubt on the issue.2 The prosecutor also stated that the jury could
consider the justification defense only after considering guilt on first-degree murder, second-
degree murder, and reckless manslaughter. Gentry argues this misstated the law because the
jury had to consider justification alongside each murder count.
The circuit court denied relief because, at trial, it provided the jury instructions that
accurately stated the law. The jury received AMI Crim. 2d 705 regarding application of the
justification defense. The court correctly noted that jurors are presumed to follow the law.
See Gwathney v. State, 2009 Ark. 544, at 16, 381 S.W.3d 744, 752 (“[J]urors are presumed
1
As we affirm on the prejudice prong, we need not consider whether a hearing would
have been necessary because all the arguments on prejudice involved the record produced
at Gentry’s jury trial.
2
“If the issue of the existence of a defense is submitted to the jury, the court shall
charge that any reasonable doubt on the issue requires that the defendant be acquitted.”
Ark. Code Ann. § 5-1-111(c)(2) (Repl. 2013).
6
to comprehend and follow court instructions.”). The court concluded Gentry suffered no
prejudice.
We affirm this ruling. The circuit court instructed the jury as to the limited weight
it should place on closing statements and accurately instructed the jury about the justification
defense, telling them that, in asserting the defense, Gentry was “required only to raise a
reasonable doubt in your minds.” The court also instructed the jury that the duty to inform
them about the law rested with the court. See AMI Crim. 2d 101. The court explained
these instructions went back with the jury while they deliberated. And Gentry’s counsel also
tried to clarify this issue in his closing, noting that the justification defense “cancels out
everything.” Taken together, we cannot say the circuit court clearly erred when it
concluded Gentry failed to prove he suffered prejudice from counsel’s failure to object.
C. Darius Furlow’s Testimony
On the next claim, Gentry argued his trial counsel should have called Darius Furlow
as a witness. Gentry claimed Furlow would have testified that Gentry “bore no animosity”
toward the victim, Gamble, thus “negating the prosecution’s theory that the murder was
motivated by revenge.” The circuit court concluded Gentry could not show prejudice
because Furlow was not a witness to the shooting, which took place inside a barbershop
where only Gentry and Gamble were present. The court concluded Furlow would not have
even been able testify because of lack of personal knowledge.
Gentry argues that the circuit court’s ruling was erroneous because Furlow’s
testimony would have been admissible. On appeal, Gentry fails to address the court’s core
7
finding of no prejudice but argues about admissibility only. Accordingly, we affirm on this
point.
D. Additional Microscopic Testing
Next, Gentry claimed trial counsel should have requested microscopic examination
of gunshot residue from the victim’s clothing.3 This testing—which could have showed that
Gamble had been shot from close range—could have strengthened Gentry’s justification
defense. The circuit court concluded the absence of this microscopic evidence did not
prejudice Gentry. The court noted the expert testimony on this point already buttressed
Gentry’s defense. An expert had testified that the shrapnel hitting Gamble showed that he
and Gentry were already “wrestling with the gun.” The court also noted that Gentry’s
petition did not identify clothing available for microscopic testing and highlighted Gentry’s
failure to plead on this point: “Gentry did not claim in his petition . . . that had there been
clothing available for microscopic testing and had that clothing contained evidence of
gunshot residue that the jury would have reached a different result.”
We affirm this ruling. The circuit court was correct that Gentry identified no
clothing available for testing. Nor does Gentry argue on appeal how the microscopic
evidence would have been any different from the expert testimony that Gamble suffered an
atypical gunshot wound––the very evidence defense counsel used to bolster self-defense.
This claim was conclusory and failed our Rule 37 petition-pleading standards. We find no
clear error in the circuit court’s denial of this claim.
3
Gentry seeks testing as a form of relief, but he has failed to plead this correctly, failed
identify the evidence to be tested, and failed to meet other necessary requirements. See
Marshall v. State, 2017 Ark. 208, at 4, 521 S.W.3d 456, 459.
8
E. Evidence About Gun Malfunction
Gentry next argued that counsel should have impeached a police officer who testified
at trial that Gamble’s pistol malfunctioned. The police officer had testified earlier at the
pretrial hearing but never mentioned the malfunction. The circuit court concluded this
testimony wasn’t impeachment worthy because the officer’s “testimony regarding the
possible malfunction of the gun at trial was elicited only after further questioning by the
prosecuting attorney—questions that were not specifically asked . . . at the pre-trial hearing.”
The court also found Gentry’s allegation of prejudice conclusory.
On appeal, Gentry argues that “it is unclear what the circuit court would have had
Gentry do to prove prejudice.” But that inquiry doesn’t concern us. Our inquiry is whether
the circuit court clearly erred when it reached its conclusion. Gentry has not formulated a
responsive argument on this point, so we affirm. See Ward v. State, 350 Ark. 69, 74, 84
S.W.3d 863, 866 (2002) (“[W]here a party presents no convincing argument nor cites to
any convincing legal authority, this court will not reach the merits of that point on appeal.”).
F. Sentencing Exhibits 72 & 73
The next claim involved the admission of exhibits 72 and 73 during sentencing.
These were Gentry’s prior convictions and related documents that the State used to prove
Gentry was a habitual offender. Gentry argued counsel should have objected to their
admission because, under the law, the circuit court should have made an independent
finding about prior convictions rather than submit the issue to the jury. See Ark. Code Ann.
§ 5-4-501 (Supp. 2021). Gentry claims this prejudiced him because the exhibits included
information about multiple nolle prossed charges, a plea statement, and departure reports.
9
The circuit court denied the claim. The court noted that Gentry had admitted the
prior convictions during his testimony in the guilt phase of the trial. The court further noted
that the jury had been properly instructed. On appeal, Gentry argues that the circuit court
misunderstood his claim. The issue wasn’t whether Gentry had committed the crimes but
whether, by admitting the sentencing documents, the jury used this other information to
impose a higher sentence on Gentry. Gentry insists this information being presented to the
jury caused him prejudice.
In all, we find no clear error in the circuit court’s ruling that Gentry suffered no
prejudice from the admission of these documents. The nolle prossed charges show only that
Gentry had been charged with crimes, but that those charges, for whatever reason, were not
pursued. And, as the circuit court noted below when denying the claim, the jury was
instructed to consider only the charges for which Gentry pleaded guilty. The plea statement
contained no prejudicial information either; rather, it contained boilerplate language
regarding the first-degree-battery charge that the jury already knew about. And the
departure report contained only notations that identified mitigating factors helpful to
Gentry.
G. Constitutional Objection to Gang Evidence
Finally, Gentry alleged counsel was ineffective for failing to raise a state and federal
constitutional challenge to the admission of gang evidence. Gentry says counsel should have
made these additional arguments for exclusion, citing Dawson v. Delaware, 503 U.S. 159
(1992). The circuit court rejected this claim because it found Dawson and other cited cases
weren’t controlling.
10
On appeal, Gentry again fails to squarely address the circuit court’s ruling. He makes
the conclusory claim that “Gentry was clearly prejudiced.” In any event, the circuit court
was correct that Dawson didn’t apply. That case bars admission of a defendant’s beliefs and
associations “when those beliefs have no bearing on the issue being tried.” 503 U.S. at 168.
Here, we already affirmed on direct appeal the circuit court’s conclusion that gang-related
evidence was relevant. We held that this evidence was “relevant to show identity, motive,
and intent and to rebut Gentry’s justification claim.” Gentry, 2021 Ark. 26, at 10. Even if
Gentry’s counsel had raised a constitutional argument, it would have been rejected. Gentry
cannot therefore show that counsel was deficient for failing to make that argument. Greene
v. State, 356 Ark. 59, 73, 146 S.W.3d 871, 882 (2004) (“Counsel cannot be ineffective for
failing to make a meritless argument.”). Accordingly, we do not find the circuit court’s
ruling clearly erroneous.
Affirmed.
Jeff Rosenzweig, for appellant.
Leslie Rutledge, Att’y Gen., by: Brooke Jackson Gasaway, Ass’t Att’y Gen., for appellee.
11 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484451/ | UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
MERCY GENERAL HOSPITAL, et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 21-1397 (RBW)
)
XAVIER BECERRA, in his official )
capacity as Secretary of the Department of )
Health and Human Services, )
)
)
Defendant. )
)
MEMORANDUM OPINION
The plaintiffs, seventy-five acute care hospitals located in California, bring this civil
action against the defendant, Xavier Becerra, in his official capacity as the Secretary (the
“Secretary”) of the United States Department of Health and Human Services (the “Department”),
challenging (1) the Secretary’s Provider Reimbursement Review Board’s April 15, 2021 Denial
of Request for Expedited Judicial Review pursuant to Title XVIII of the Social Security Act,
42 U.S.C. § 1395oo(f)(1), see First Amended Complaint (“Am. Compl.”) ¶¶ 1–3, 166–83, ECF
No. 7, and (2) the lawfulness of regulatory rule 42 C.F.R. § 413.89(e)(2)(iii) (the “2020 final
rule”), see id. ¶¶ 190–203, pursuant to the Administrative Procedure Act, 5 U.S.C. § 706(2)(A),
see id. ¶¶ 185, 205. Currently pending before the Court is the Defendant’s Motion to Dismiss
(“Def.’s Mot.” or the “Secretary’s motion to dismiss”), ECF No. 25. Upon careful consideration
of the parties’ submissions, 1 the Court concludes for the following reasons that it must grant the
Secretary’s motion to dismiss.
I. BACKGROUND
The Court previously described much of the background relevant to this case in an
opinion resolving the plaintiffs’ initial claim seeking judicial review of a decision by the
Secretary in a prior case, see Mercy Gen. Hosp. v. Azar, 344 F. Supp. 3d 321, 326–33 (D.D.C.
2018) (“Mercy I”), and in an opinion resolving a subsequent motion that sought reconsideration
of the Court’s prior ruling, see Mercy Gen. Hosp. v. Azar, 410 F. Supp. 3d 63, 68–70 (D.D.C.
2019) (“Mercy II”), and therefore will not reiterate that information again here. The Court will,
however, briefly discuss the statutory, regulatory, and factual background of this case as related
to the issues the Court must now consider in resolving the Secretary’s motion to dismiss.
A. Statutory and Regulatory Background
1. The Medicare Program
The Medicare program, established in 1965 as Title XVIII of the Social Security Act,
42 U.S.C. §§ 1395–1395lll (2012) (the “Medicare Act”), “is a federally funded medical
insurance program for the elderly and disabled,” Fischer v. United States, 529 U.S. 667, 671
(2000) (internal citation omitted). Part A of the Medicare Act provides insurance coverage to
eligible beneficiaries for the cost of inpatient hospital care, home health care, and hospice
services, see 42 U.S.C. § 1395c, and Part B provides supplemental coverage for outpatient
hospital care and other types of care not covered by Part A, see id. § 1395k. As the Court
previously explained, see Mercy I, 344 F. Supp. 3d at 328, if Medicare patients fail to pay the
1
In addition to the filings already identified, the Court considered the following submissions in rendering its
decision: (1) the defendant’s Memorandum of Points and Authorities in Support of Defendant’s Motion to Dismiss
(“Def.’s Mem.”), ECF No. 25-1; (2) the Plaintiffs’ Opposition to Motion to Dismiss (“Pls.’ Opp’n”), ECF No. 26;
and (3) the Defendant’s Reply to Plaintiffs’ Opposition to Defendant’s Motion to Dismiss (“Def.’s Reply”), ECF
No. 29.
2
deductible and coinsurance payments that they owe to providers, the providers may seek
reimbursement from the Centers for Medicare & Medicaid Services (“CMS”) for these unpaid
amounts, which are known as “bad debts,” see 42 C.F.R. § 413.89(e). CMS administers the
Medicare program on behalf of the Secretary, see Ark. Dep’t of Health & Hum. Servs. v.
Ahlborn, 547 U.S. 268, 275 (2006), “through contracts with [M]edicare administrative
contractors,” 42 U.S.C. §§ 1395h(a), 1395u(a), which are known as “fiscal intermediar[ies,]” 42
U.S.C. § 1395kk-1(e)(2)(B). The fiscal intermediaries determine the amount of reimbursement
for bad debts providers will receive. See 42 U.S.C. § 1395kk-1(a)(4).
A provider who “is dissatisfied with a final determination of . . . its fiscal
intermediary[,]” 42 U.S.C. § 1395oo(a)(1)(A)(i), “may obtain a hearing . . . by [the] Provider
Reimbursement Review Board [(the “Board”)][,]” id. § 1395oo(a). That provider “may file a
request for a determination by the Board of its authority to decide [a] question of law or
regulations relevant to the matters in controversy[.]” Id. § 1395oo(f)(1). The Board “shall
render such determination in writing within thirty days” and “the determination shall be
considered a final decision and not subject to review by the Secretary.” Id. If “the Board
determines . . . that it is without authority to decide the question,” the provider may “obtain
judicial review of any action of the fiscal intermediary which involves a question of law or
regulations relevant to the matters in controversy[.]” Id. If the Board fails to render a
determination as to whether it has authority to decide the question presented within thirty days,
“the provider may bring a civil action (within sixty days of the end of such period) with respect
to the matter in controversy contained in such request for a hearing.” Id. Moreover, providers
“shall have the right to obtain judicial review of any final decision of the Board[.]” Id.
3
Additionally, the Department has established a process by which a provider entitled to
judicial review under 42 U.S.C. § 1395oo(f)(1) may obtain “expedited judicial review.” See 42
C.F.R. § 405.1842. The Board
must grant [a request for expedited judicial review] for a legal question relevant to
a specific matter at issue in a Board appeal if the Board determines the following
conditions are satisfied:
(i) The Board has jurisdiction to conduct a hearing on the specific matter at
issue . . . [but] [2]
(ii) The Board lacks the authority to decide a specific legal question relevant
to the specific matter at issue because the legal question is a challenge
either to the constitutionality of a provision of a statute, or to the
substantive or procedural validity of a regulation or CMS Ruling. [3]
Id. § 405.1842(f)(1). However, the Board must deny a request for expedited judicial review if
any of the following apply:
(i) The Board determines that it does not have jurisdiction to conduct a
hearing on the specific matter at issue . . . [,]
(ii) The Board determines it has the authority to decide a specific legal
question relevant to the specific matter at issue because the legal question
is neither a challenge to the constitutionality of a provision of a statute, nor
a challenge to the substantive or procedural validity of a regulation or
CMS Ruling[, or]
(iii) The Board does not have sufficient information to determine whether the
criteria specified in paragraph (f)(1)(i) or (f)(1)(ii) of this section are met.
Id. § 405.1842(f)(2).
The Department has also clarified that a “Board decision is final” only when it is “one of
the Board decisions specified in § 405.1875(a)(2)(i) through (a)(2)(iii)” or is “deemed to be final
by the [CMS] Administrator under § 405.1875(a)(2)(iv)[,]” and it is “not reversed, affirmed,
2
The Board has jurisdiction over a claim when a provider “is dissatisfied with a final determination” of their fiscal
intermediary or the Secretary; “the amount in controversy is $10,000 or more[;]” and the “provider files a request for
a hearing within 180 days after notice of the [ ] final determination[.]” 42 U.S.C. § 1395oo(a).
3
The Board “must comply with all the provisions of Title XVIII of the [Medicare] Act and regulations issued
thereunder, as well as CMS Rulings issued under the authority of the [CMS] Administrator[,]” 42 C.F.R.
§ 405.1867,and therefore, does not have the authority to determine the validity of such laws and regulations as they
apply to matters over which they have jurisdiction, see 42 C.F.R. § 405.1842(f)(1)(ii).
4
modified, or remanded by the [CMS] Administrator[.]” Id. § 405.1877(a)(3). The Board
decisions specified in 42 C.F.R. § 405.1875(a)(2) are:
(i) A Board hearing decision . . . [,]
(ii) A Board dismissal decision . . . [,]
(iii) A Board [expedited judicial review] decision, but only the question of
whether there is Board jurisdiction over a specific matter at issue in the
decision; the [CMS] Administrator may not review the Board’s
determination in a decision of its authority to decide a legal question
relevant to the matter at issue . . . [, or]
(iv) Any other Board decision or action deemed to be final by the [CMS]
Administrator.
42 C.F.R. § 405.1875(a)(2). Any Board decision that is final is “subject to judicial review under
[42 U.S.C. § 1395oo(f).]” Id. § 405.1877(a)(3).
2. The 2020 Final Rule
In September 2020, the Secretary issued new regulations governing Medicare bad debts,
which apply retroactively. See 42 C.F.R. § 413.89. To receive reimbursement under these new
regulations for a Medicare bad debt associated with indigent dual eligible Medicare
beneficiaries, 4 a provider “[m]ust submit a bill to its Medicaid/Title XIX agency” and “[m]ust
submit the Medicaid remittance advice received from the State to its Medicare contractor.”
Id. § 413.89(e)(2)(iii). However, a provider may submit alternative documentation when
“through no fault of the provider, a provider does not receive a Medicaid remittance advice
because the State does not permit a Medicare provider’s Medicaid enrollment for the purposes of
processing a beneficiary’s claim, or because the State does not generate a Medicaid remittance
advice[.]” Id.
4
Dual eligible Medicare beneficiaries are patients that “are eligible for both Medicare and Medicaid.” Grossmont
Hosp. Corp. v. Burwell, 797 F.3d 1079, 1081 (D.C. Cir. 2015). As the Court previously explained, “[a]t issue in this
case are the plaintiffs’ claims for Medicare reimbursement of unpaid deductible and coinsurance amounts associated
with dual eligible patients, incurred between the fiscal years ending in October 1995 and December 2004.” Mercy I,
344 F. Supp. 3d at 331.
5
B. Factual Background
The plaintiffs are acute care hospitals located in California that provide services to
patients entitled to benefits under both the Medicare and Medicaid programs. See Am. Compl.
¶¶ 4–81. The plaintiffs previously brought suit, “involv[ing] largely the same [seventy-five]
[p]laintiff providers[,]” Def.’s Mem. at 6, in this Court seeking review of the Secretary’s decision
denying their claims for reimbursement for the Medicare bad debts of dual eligible patients
incurred between the years 1995 and 2004. See Mercy I, 344 F. Supp. 3d at 331. Specifically,
the plaintiffs challenged the Secretary’s “must-bill” policy that required providers to bill the
State and seek remittance advice before they could receive any reimbursement through
Medicare. 5 See id.
The Court, in its decision on September 29, 2018, partially granted the plaintiffs’ motion
for summary judgment,
conclud[ing] that the [CMS] Administrator’s finding that the Secretary’s
remittance advice requirement predated the Moratorium [was] not supported by
substantial evidence, and thus, based on the administrative record before the
Secretary, application of such a requirement to the plaintiffs’ claims violated the
Moratorium. Accordingly, the [CMS] Administrator erred when he concluded
that the remittance advice requirement did not violate the Moratorium. Therefore,
the Court [could not] affirm the Secretary’s denial of the plaintiffs’ claims on the
basis that the plaintiffs failed to provide remittance advices to support their
claims. Moreover, because the [CMS] Administrator did not find that the
plaintiffs failed to bill the state for all of the claims at issue, the Court [could not]
affirm the [CMS] Administrator’s decision denying all of the plaintiffs’ claims on
the alternative ground that the plaintiffs failed to satisfy any billing requirement.
5
At issue in Mercy I was whether the Secretary’s policies were in place prior to August 1, 1987, and therefore did
not violate the so-called Bad Debt Moratorium. See Mercy I, 344 F. Supp. 3d at 329. In 1987, Congress passed the
Bad Debt Moratorium legislation that provided: “[i]n making payments to hospitals under [the Medicare program],
the Secretary . . . shall not make any change in the policy in effect on August 1, 1987, with respect to payment under
[the Medicare program][.]” Omnibus Budget Reconciliation Act (OBRA) of 1987, Pub. L. No. 100–203, § 4008(c),
101 Stat. 1330, 1330–55 (codified at 42 U.S.C. § 1395f note). The effect of the legislation was to “‘freeze’ the
Secretary’s Medicare bad debt reimbursement policies.” Mountain States Health All. v. Burwell, 128 F. Supp. 3d
195, 200 (D.D.C. 2015). The Moratorium remained in place until 2012, see Middle Class Tax Relief and Job
Creation Act of 2012, Pub. L. No. 112–96, tit. III, § 3201(d), 126 Stat. 156, 192–93 (codified at 42 U.S.C. § 1395f
note), therefore covering the period from 1995 to 2004 that was at issue. See Mercy I, 344 F. Supp. 3d at 331.
6
Id. at 354. The plaintiffs then moved for reconsideration, and in Mercy II, the Court remanded
the case to the Department “for the [CMS] Administrator to provide further explanation of the
reasons for finding that the plaintiffs’ documentation was not contemporaneous as required by
[the Provider Reimbursement Manual, Part II] § 1102.3L” and “for further explanation of the
[CMS] Administrator’s conclusion that the [Electronic Data Systems (“EDS”) Corporation]
Reports fail to satisfy the contemporaneous documentation requirement.” 6 410 F. Supp. 3d at
83.
The CMS Administrator subsequently remanded the matter to the Board. See Am.
Compl. ¶ 156. In a Notice of Reopening, dated February 16, 2021, the Board requested that the
parties brief the Board on “[w]hether or not the [plaintiffs] billed the state for the claims at
issue[,]” “[w]hether or not the [plaintiffs’] documentation was ‘contemporaneous[,]’” and
whether or not the alternative documents previously supplied by the plaintiffs “fail[ed] to satisfy
the ‘contemporaneous’ documentation requirement.” Am. Compl., Exhibit (“Ex.”) B (Notice of
Reopening (Feb. 16, 2021)) at 16, ECF No 7-4. Additionally, the Board requested that the
parties brief “the extent to which the [2020 final rule] is relevant and should be taken into
consideration by the Board when adjudicating these cases.” Id.
On March 18, 2021, the plaintiffs requested expedited judicial review pursuant to
42 U.S.C. § 1395oo(f)(1). See Am. Compl. ¶¶ 169–70. The plaintiffs asserted that “the Board
has jurisdiction over their appeal but lacks the authority to decide the legal question of their
6
The plaintiffs had contracted with the EDS Corporation, a contractor used to process crossover claims, “to produce
reports to submit . . . [to the intermediary] as [ ] alternative documentation to the State remittance advices (the ‘EDS
reports’).” Mercy I, 344 F. Supp. 3d at 331 (internal quotation marks omitted) (alterations in original). The CMS
Administrator had determined that the EDS Reports were not valid documents, and rejected “the [plaintiffs]’
contentions that the EDS reports qualif[ied] as remittance advices . . . [because] the EDS reports [we]re not
contemporaneously generated State documents[ ] . . . [and] were not validated, certified[,] or adopted as State
documents.” Id. at 332 (internal quotation marks omitted) (alterations in original).
7
challenge to the [2020 final rule].” Id. ¶ 170. On April 15, 2021, within thirty days of the
plaintiffs’ request for expedited judicial review, the Board denied the plaintiffs’ request, stating
that “the Board has not yet received the information needed to decide the factual and legal issues
and complete the record as required by the District Court’s remand.” Am. Compl., Ex. C (Denial
of Request for Expedited Judicial Review (April 15, 2021) (“Denial Letter”)) at 7, ECF No. 7-5.
The Board specifically noted, in terms of the information it still needed, that it “has not yet
begun considering the parties[’] comments regarding the relevance of the [2020 final
rule] . . . which may or may not eliminate the need for [expedited judicial review] when the
requisite factual findings are made[,] and the issues are reviewed in their totality.” Id.
C. Procedural History
On June 14, 2021, the plaintiffs filed this action seeking judicial review of the Board’s
decision denying the plaintiffs’ request for expedited judicial review. See Am. Compl. at 1. On
December 17, 2021, the Secretary filed his motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(1). See Def.’s Mot. at 1. The plaintiffs subsequently filed their opposition on
January 18, 2022, see Pls.’ Opp’n at 1, and the Secretary filed his reply on March 1, 2022, see
Def.’s Reply at 1. Furthermore, on October 10, 2022, the plaintiffs filed a notice regarding
supplemental authority, namely cases “which were decided subsequent to the motion to dismiss
briefing in this case and are relevant to the ripeness issue.” Notice of Supplemental Authority in
Support of Plaintiff’s Opposition to Defendant’s Motion to Dismiss (“Pls.’ Notice”) at 1, ECF
No. 31. 7
7
Because the Court ultimately decides the issues presented in the Secretary’s motion to dismiss on grounds other
than ripeness, see infra Sections III.A–B, it does not reach the issue of ripeness, see infra n.8. Therefore, the
plaintiffs’ notice of supplemental authority, which only bears on the ripeness issue raised in the defendant’s motion
to dismiss, see generally Pls.’ Notice, does not factor into the Court’s analysis.
8
II. STANDARD OF REVIEW
“Federal [district] courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 377 (1994). Thus, the Court is obligated to dismiss a claim if it
“lack[s] . . . subject-matter jurisdiction.” Fed. R. Civ. P. 12(b)(1). “A motion for dismissal
under [Federal Rule of Civil Procedure] 12(b)(1) ‘presents a threshold challenge to the [C]ourt’s
jurisdiction.’” Morrow v. United States, 723 F. Supp. 2d 71, 75 (D.D.C. 2010) (quoting Haase v.
Sessions, 835 F.2d 902, 906 (D.C. Cir. 1987)). Because “[i]t is to be presumed that a cause lies
outside [a federal court’s] limited jurisdiction,” Kokkonen, 511 U.S. at 377, the plaintiff bears
the burden of establishing by a preponderance of the evidence that the Court has subject-matter
jurisdiction, see Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992).
In assessing a Rule 12(b)(1) motion, the Court must “assume the truth of all material
factual allegations in the complaint and ‘construe the complaint liberally, granting [the] plaintiff
the benefit of all inferences that can be derived from the facts alleged.’” Am. Nat’l Ins. Co. v.
Fed. Deposit Ins. Corp., 642 F.3d 1137, 1139 (D.C. Cir. 2011) (quoting Thomas v. Principi, 394
F.3d 970, 972 (D.C. Cir. 2005)). However, “the [p]laintiff’s factual allegations in the
complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6)
motion for failure to state a claim.” Grand Lodge of the Fraternal Ord. of Police v. Ashcroft, 185
F. Supp. 2d 9, 13–14 (D.D.C. 2001) (internal quotation marks omitted). Moreover, the Court
“need not limit itself to the allegations of the complaint,” id. at 14; rather, the “[C]ourt may
consider such materials outside the pleadings as it deems appropriate to resolve the question [of]
whether it has jurisdiction [over] the case,” Scolaro v. D.C. Bd. of Elections & Ethics, 104 F.
Supp. 2d 18, 22 (D.D.C. 2000); see Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253
9
(D.C. Cir. 2005) (“[T]he district court may consider materials outside the pleadings in deciding
whether to grant a motion to dismiss for lack of jurisdiction[.]”).
III. ANALYSIS
The Secretary argues that this case should be dismissed on jurisdictional grounds for the
following reasons: (1) 42 U.S.C. § 1395oo(f)(1) of the Medicare Act does not confer subject-
matter jurisdiction because the “[p]laintiffs have not received a final decision of the Secretary on
any of their claims in this action[,]” Def.’s Mem. at 11; and (2) there is no jurisdiction under the
federal mandamus statute “because the Secretary does not owe [the p]laintiffs a clear,
nondiscretionary duty[,]” id. at 2, and the “appeals process provides an alternative means of
securing relief[,]” id. 8 In response, the plaintiffs argue that: (1) the Board, through its Denial
Letter, did not adequately issue a determination of its authority to decide the relevant questions,
thus giving the plaintiffs the right to bring this action under § 1395oo(f), see Pls.’ Opp’n at 1–2
(“It is well-established that courts have jurisdiction to review [expedited judicial review]
determinations, which are final agency action.”); and (2) the Court has federal mandamus
jurisdiction pursuant to 28 U.S.C. § 1361 because the Secretary “is not fulfilling the Court’s
directive on remand but rather has refused to provide additional explanation pursuant to the
Court’s remand order[,]” id. at 21. The Court will proceed with its analysis by first determining
8
The defendant also argues that the plaintiffs’ claims should be dismissed due to lack of ripeness given that the
plaintiffs’ “claims on remand from this Court are still pending before the [Board].” Def.’s Mem. at 2. However,
because the Court concludes on other grounds that it does not have subject matter jurisdiction over the plaintiffs’
claims, see infra Sections III.A–B, it need not reach the issue of ripeness. See Ruhrgas AG v. Marathon Oil Co.,
526 U.S. 574, 585 (1999) (“It is hardly novel for a federal court to choose among threshold grounds for denying
audience to a case on the merits.”); Passut v. Cardona, 540 F. Supp. 3d 27, 35 n.6 (D.D.C. 2021) (Walton, J.)
(concluding that, because it lacked subject matter jurisdiction based upon one of the defendants’ Rule 12(b)(1)
arguments, that the Court “need not address the defendants’ other [Rule 12(b)(1)] argument[]”).
10
whether it has subject-matter jurisdiction pursuant to 42 U.S.C. § 1395oo(f) and, if not, whether
exercising mandamus jurisdiction is appropriate.
A. Whether the Court has Subject-Matter Jurisdiction Pursuant to 42 U.S.C.
§ 1395oo(f)
The plaintiffs argue that the Court has subject-matter jurisdiction pursuant to 42 U.S.C.
§ 1395oo(f) for two reasons: (1) the Board failed to issue a “determination [ ] of its authority to
decide the question of law or regulations relevant to the matters in controversy,” 42 U.S.C.
§ 1395oo(f), and therefore the “Board’s [thirty]-day period to issue such determination has
expired[,]” Pls.’ Opp’n at 13, and (2) “it is quite well-established that [expedited judicial review]
determinations are final, appealable decisions[,]” id. at 17. The Court will proceed by first
addressing whether the Board failed to make a determination of its authority to decide the
question of law or regulation, before addressing whether the Board’s rejection of expedited
judicial review constitutes a “final decision” under 42 U.S.C. § 1395oo(f).
1. Whether the Board Failed to Make a Determination of its Authority to Decide the
Question of Law or Regulation
The Court first addresses the plaintiffs’ argument that the Board “did not make the
requisite determination within thirty days” as required by the statute. Id. at 12. At issue
specifically is whether the Board made a sufficient determination of whether it had jurisdiction
or authority over the plaintiffs’ question of law or regulation in its Denial Letter. Id. at 13–14.
In its letter, the Board denied the request for expedited judicial review because it “ha[d] not yet
received the information needed to decide the factual and legal issues and complete the record as
required by the [this] Court’s remand[,]” and “ha[d] not yet begun considering the parties[’]
comments regarding the relevance of the [2020 final rule][,]” which “may or may not eliminate
the need for [expedited judicial review] when the requisite factual findings are made and the
issues are reviewed in their totality.” Am. Compl., Ex. C (Denial Letter) at 7. The Secretary
11
asserts that “the Board relied on the absence of sufficient documentation criterion under
§ 405.1842(f)(2)(iii)” as the basis for rejecting the request for expedited judicial review. Def.’s
Reply at 6. 9 The plaintiffs, on the other hand, claim that, because the letter does not “identify
what information it believes it lacks but needs in order to determine whether it has jurisdiction or
authority[,]” the letter “plainly does not” meet the criteria for rejection set out in 42 C.F.R.
§ 405.1842(f)(2)(iii). Pls.’ Opp’n at 14.
Before the Court can address whether the Denial Letter entitled the plaintiffs to expedited
judicial review under 42 C.F.R. § 405.1842(f)(2), the Court must first address “whether Congress
has directly spoken to the precise question at issue[,]” Chevron, U.S.A., Inc. v. Nat. Res. Def.
Council, Inc., 467 U.S. 837, 842–43 (1984), i.e., whether the Board failed to make a final
determination of its authority to decide the question of law or regulation under these
circumstances. “If the intent of Congress is clear, that is the end of the matter; for the [C]ourt, as
well as the agency, must give effect to the unambiguously expressed intent of Congress.” Id.
When “the plain language of [a] statute is clear, [ ] court[s] generally will not inquire further into
its meaning[.]” Qi-Zhuo v. Meissner, 70 F.3d 136, 140 (D.C. Cir. 1995). To determine whether
a statute is ambiguous, the Court must “look to the structure and language of the statute as a
whole.” Nat’l R.R. Passenger Corp. v. Bos. & Maine Corp., 503 U.S. 407, 417 (1992).
The statute here, see 42 U.S.C. § 1395oo(f)(1), provides in relevant part that a “provider
may file a request for a determination by the Board of its authority to decide the question of law
9
The plaintiffs, citing to Methodist Hospitals of Memphis v. Sullivan, 799 F. Supp. 1210 (D.D.C. 1992), claim that
this Court “already has rejected a nearly identical argument by the Secretary.” Pls.’ Opp’n at 1. Indeed, in that case,
the Court held that the Board “did not determine that it had authority to decide the validity of the Secretary’s reaudit
regulation” when it denied expedited judicial review because of factual issues that had not yet been decided. 799 F.
Supp. at 1215. Therefore, the Court held that the Board “failed to make a timely determination of whether it had or
did not have jurisdiction over the merits of the dispute as required by 42 U.S.C. § 1395oo(f)(1).” Id. at 1216.
However, this Court finds that Methodist Hospitals of Memphis is distinguishable from this case, as the regulation
challenged in Methodist Hospitals of Memphis had already been applied to the plaintiffs’ case, unlike the yet to be
applied 2020 final rule in this case.
12
or regulations relevant to the matters in controversy[,]” id., that the Board “shall render such
determination in writing within thirty days[,]” id., and if it fails to do so, “the provider may bring
a civil action,” id. The Board “must make a determination of whether it has jurisdiction to
decide the issue presented[,]” the issuance of which is “mandatory, not discretionary[;]” and “if it
does not make such a determination, 42 U.S.C. § 1395oo(f)(1) permits the provider to seek direct
judicial review.” Methodist Hosps. of Memphis v. Sullivan, 799 F. Supp. 1210, 1215–16
(D.D.C. 1992), rev’d on other grounds sub nom., Adm’rs of Tulane Educ. Fund v. Shalala, 987
F.2d 790 (D.C. Cir. 1993); see also Clarian Health W., LLC v. Hargan, 878 F.3d 346, 354 (D.C.
Cir. 2017) (“Either the Board granted expedited review over the question presented, or it failed
to decide [the plaintiff’s] request for expedited judicial review of the question within thirty days.
In either event, [the plaintiff] had a right to seek review in the District Court[.]”).
Regarding the “structure . . . of the statute as a whole[,]” Nat’l R.R. Passenger Corp., 503
U.S. at 417, the impact of 42 U.S.C. § 1395oo(f)(1) is to prevent providers from having to pursue
“a time-consuming and irrelevant administrative review merely to have the right to bring suit in a
U.S. District Court.” H.R. Rep. No. 96–1167, at 394 (1980), 1980 U.S.C.C.A.N. 5526, 5757.
Here, that review would not be irrelevant, because the issue would become moot if the Board
determines the 2020 final rule does not apply, and there would therefore be no need for the Court
to intervene. As to the “language of the statute as a whole[,]” Nat’l R.R. Passenger Corp., 503
U.S. at 417, the term “relevant” has different meanings in different contexts. See, e.g., Food
Lion, Inc. v. United Food & Com. Workers Int’l Union, AFL-CIO-CLC, 103 F.3d 1007, 1012
(D.C. Cir. 1997) (“Generally speaking, ‘relevance’ for discovery purposes is broadly
construed.”); Jewish War Veterans of the U.S. of Am., Inc. v. Gates, 506 F. Supp. 2d 30, 42
(D.D.C. 2007) (“The term ‘relevant’ [ ] has a different meaning—and a broader scope—under
13
Fed. R. Civ. P. 26(b) than it does under Rule 401 of the Federal Rules of Evidence.”); Kisor v.
McDonough, 995 F.3d 1316, 1326–25 (Fed. Cir. 2021), cert. denied, 142 S. Ct. 756, (2022)
(rejecting the plaintiff’s argument that “the term ‘relevant’ should be construed broadly[,]” in
favor of requiring that “relevant” records must directly “pertain to” the matter at issue). The
Court therefore finds the phrase “relevant to” to be sufficiently ambiguous so as to open 42
U.S.C. § 1395oo(f)(1) to interpretation. See Nat’l R.R. Passenger Corp., 503 U.S. at 408 (“The
existence of alternative [ ] definitions for [a term] indicates that the statute is open to
interpretation.”).
Prior cases addressing whether the Board failed to make a timely determination have
done so in the context of challenges to laws and regulations that had already been concretely
applied to the plaintiffs in those cases prior to the administrative review. See Methodist Hosps.
of Memphis, 799 F. Supp. at 1212 (involving a challenge to a reimbursement regulation that had
already been applied to the plaintiffs’ case, in that each plaintiff had seen their reimbursement
amounts reduced after a reaudit applying the new regulations at issue); Clarian Health, 878 F.3d
at 349–352 (involving a challenge to a 2010 policy governing a reconciliation process, under
which the plaintiff was required to pay $2.4 million). Here, the plaintiffs sought expedited
judicial review “to decide the legal question” of “the validity of the [2020 final rule]’s
requirement that a provider must bill the state even if it has documentation alternative to the
remittance advice[.]” Am. Compl., Ex. A (Request for Expedited Judicial Review for Mercy
General Hospital et al. (Mar. 18, 2021) (“Request for Review”)) at 2. And, the relevance of the
2020 final rule to the Court’s remand to the Board is still very much an open question, see Am.
Compl., Ex. B (Notice of Reopening) at 16, and the Board notes in its Denial Letter that it has
“not yet begun considering the parties[’] comments regarding the relevance of the [2020 final
14
rule][.]” Am. Compl., Ex. C (Denial Letter) at 7. The statute, see 42 U.S.C. § 1395oo(f)(1),
explicitly states that a provider may request a determination of authority from the Board “to
decide the question of law or regulations relevant to the matters in controversy,” id. (emphasis
added). The statute is therefore ambiguous as to the determination of whether the 2020 final
rule is relevant to the Court’s remand to the Board in this case.
When a statute is ambiguous and Congress’s intent is unclear, the Court must “defer to
the agency’s interpretation as long as it is ‘based on a permissible construction of the statute.’”
Bluewater Network v. EPA, 372 F.3d 404, 410 (D.C. Cir. 2004) (quoting Chevron, 467 U.S. at
842–43). However, “[t]he [C]ourt need not conclude that the agency construction was the only
one it permissibly could have adopted to uphold the construction, or even the reading the [C]ourt
would have reached if the question initially had arisen in a judicial proceeding.” Chevron, 467
U.S. at 843 n.11. Regarding the legislative record, Congress’s stated intent in establishing
expedited judicial review was to create a system that did not “delay the resolution of
controversies for extended periods of time and [ ] require providers to pursue a time-consuming
and irrelevant administrative review merely to have the right to bring suit in a U.S. District
Court.” See H.R. Rep. No. 96–1167, at 394 (1980), 1980 U.S.C.C.A.N. 5526, 5757. Thus, the
Board must acknowledge, through a determination of its authority, when it “lack[s] the
jurisdiction to decide whether the regulation [is] invalid.” Methodist Hosps. of Memphis, 799 F.
Supp. at 1216. The review in question here cannot be considered “irrelevant,” as the question of
whether the 2020 final rule even applies will possibly determine whether there is a question of
law or regulation that even needs to be addressed by the Court. Therefore, a Board hearing is not
an event that Congress sought to avoid by granting expedited judicial review under certain
circumstances. See H.R. Rep. No. 96–1167, at 394.
15
In its Denial Letter, the Board references regulations, see Am. Compl., Ex. C (Denial
Letter) at 6–7, which state that the Board “must deny [expedited judicial review][,]” 42 C.F.R.
§ 405.1842(f)(2), when the Board “does not have sufficient information to determine whether” it
has jurisdiction or authority, id. Here, the missing information is directly relevant to the
challenged regulation, information which “may or may not eliminate the need for [expedited
judicial review] when the requisite factual findings are made and the issues are reviewed in their
totality.” Am. Compl., Ex. C (Denial Letter) at 7. Because the statute only requires the Board to
make a full determination of its authority on a question “relevant to the matters in controversy[,]”
42 U.S.C. § 1395oo(f)(1), it is permissible that the Board deny expedited judicial review until
such time as it can be determined whether the question is even relevant. Accordingly, the Court
concludes that the Board’s Denial Letter was adequate, and the lack of a determination of the
Board’s authority to answer the question of law or regulations does not, under these unique
circumstances, grant this Court subject-matter jurisdiction under 42 U.S.C. § 1395oo(f)(1).
Therefore, the Court will proceed to its analysis regarding whether the rejection of expedited
judicial review constitutes a reviewable final decision.
2. Whether the Board’s Rejection of Expedited Judicial Review Constitutes a “Final
Decision”
In his motion, the Secretary argues that the plaintiffs “have not received a final decision
of the Secretary on any of their claims in this action[,]” Def.’s Mem. at 11, because the
administrative appeals have not been exhausted and accordingly “the Board’s denial of expedited
judicial review [ ] is only an interlocutory ruling[,]” id. at 12. The plaintiffs respond that “it is
quite well-established that [expedited judicial review] determinations are final, appealable
decisions.” Pls.’ Opp’n at 17. The plaintiffs also note that “‘[a] Board [expedited judicial
review] decision’” is included “[a]mong the final Board decisions listed in [42 C.F.R.]
16
§ 405.1875(a)(2).” Id. at 18 (citing 42 C.F.R. § 405.1875(a)(2)(iii)). Further, the plaintiffs claim
that within the meaning of the statute, the list of “final and reviewable decisions must include the
failure of the Board to make the requisite no-authority decision within thirty days.” Id. at 18–19.
The Secretary counters that “the Board’s denial of the plaintiffs’ request for expedited judicial
review of the 2020 final rule is clearly not a final decision; rather, the Board’s denial was an
interlocutory ruling . . . before the potential applicability of the 2020 final rule could be
ascertained.” Def.’s Reply at 1. The Secretary further argues that the “regulation provides for
review of ‘[a] Board [expedited judicial review] decision, but only the question of whether there
is Board jurisdiction over a specific matter at issue in the decision.’” Id. at 4 (alterations in
original) (emphasis omitted) (quoting 42 C.F.R. § 405.1875(a)(2)(iii)). Because in this case “the
Board did not rule that it lacked jurisdiction[,]” the Secretary argues that “the Board’s denial of
expedited judicial review is not a final decision,” and thus the Court lacks “subject matter
jurisdiction under 42 U.S.C. § 1395oo(f)(1).” Id. at 4–5. 10
Before determining whether 42 C.F.R. § 405.1875(a)(2) applies, the Court must first
consider whether 42 U.S.C. § 1395oo(f)(1) addresses the matter. See Chevron, 467 U.S. at 842.
The statute plainly states that “[p]roviders shall have the right to obtain judicial review of any
10
In response to the Secretary’s argument that “42 U.S.C. § 1395oo(f)(1), is inapplicable because [the p]laintiffs
have failed to exhaust administrative appeals remedies on their claims in this action[,]” Def.’s Mem. at 2, the
plaintiffs counter that in Bethesda Hospital Association v. Bowen, the Supreme Court rejected a similar argument
raised by the Secretary. 485 U.S. 399, 404 (1988). There, the Supreme Court noted that the “petitioners stand on
different ground than do providers who bypass a clearly prescribed exhaustion requirement[,]” id. at 404–05,
referencing “an exhaustion requirement that, sensibly, would compel providers to present those claims to the
intermediary that the intermediary actually had the power to address[,]” Banner Heart Hosp. v. Burwell, 201 F.
Supp. 3d 131, 141 (D.D.C. 2016). Thus, the plaintiffs contend there can be no exhaustion requirement when
“neither the Board nor the intermediary has the authority to address challenges to the validity of a regulation.” Id.
When there is a legal question relevant to the matter at hand that is beyond the Board’s authority, “[i]t is this
determination of the Board, or alternatively the Board’s failure to act, that triggers the right of judicial review.”
Bethesda, 485 U.S. at 406–07. However, because the Court ultimately finds that it may not exercise subject-matter
jurisdiction over this case pursuant to 42 U.S.C. § 1395oo(f)(1) because there has been no relevant final decision
issued, it need not reach the issue of whether the plaintiffs are required to exhaust administrative appeals before
seeking judicial review.
17
final decision of the Board[.]” 42 U.S.C. § 1395oo(f)(1). While the statute does provide a list of
what is or is not a final decision, it also states that providers “may file a request for a
determination by the Board of its authority to decide the question of law or regulations relevant
to the matters in controversy” and that “the determination shall be considered a final decision
and not subject to review by the Secretary.” Id. (emphasis added). The plain reading of the
statute indicates that “Congress intended for providers to have access to judicial review any time
that the [Board] makes a no authority determination, so long as the provider timely commences a
civil proceeding.” Affinity Healthcare Servs., Inc. v. Sebelius, 746 F. Supp. 2d 106, 115 (D.D.C.
2010); see also Autumn Journey Hospice, Inc. v. Sebelius, 753 F. Supp. 2d 135, 141 (D.D.C.
2010) (“Congress intended to establish [ ] a framework under which providers have recourse to
immediate judicial review whenever the [Board] makes a no authority determination.”) (internal
quotation marks omitted); Allina Health Servs. v. Burwell, 141 F. Supp. 3d 17, 21 (D.D.C. 2015)
(“[T]he statute is clear that the Board’s authority determination is a final decision and therefore
subject to judicial review.”).
However, as noted above, see supra Section III.A.1, 42 U.S.C. § 1395oo(f)(1) expressly
applies to “question[s] of law or regulations relevant to the matters in controversy[.]” 42 U.S.C.
§ 1395oo(f)(1) (emphasis added). When courts have previously held that an expedited judicial
review determination is a final decision, it has typically been in the context of a challenge to a
law or regulation that was plainly relevant to the matter at hand because it had been concretely
applied to the plaintiffs in some manner prior to the administrative review process. See, e.g.,
Autumn Journey Hospice, 753 F. Supp. 2d at 138 (involving a challenge to the legitimacy of a
Medicare hospice care reimbursement cap that had been applied to the plaintiffs); Allina Health
Servs., 141 F. Supp. 3d at 19 (involving a challenge to calculation methods used to determine the
18
plaintiffs’ payment determinations under Medicare); Affinity Healthcare Servs., 46 F. Supp. 2d
at 109 (involving a group of plaintiffs challenging the regulations that had resulted in the
Department issuing repayment demands). Here, however, the relevance of the 2020 final rule is
still in question, as the rule has not yet been applied to the plaintiffs. See Pls.’ Opp’n at 22
(acknowledging that the “new bad debt regulations have not yet been applied to the [plaintiffs’]
claims at issue”); see also Am. Compl., Ex. C (Denial Letter) at 7 (“[T]he Board has not yet
begun considering the parties comments regarding the relevance of the [2020 final rule], an
intervening event, which may or may not eliminate the need for expedited judicial review when
the requisite factual findings are made and the issues are reviewed in their totality[.]”). It
therefore cannot be said that the determination made by the Board was one of “its authority to
decide the question of law or regulations relevant to the matters in controversy[,]” see 42 U.S.C.
§ 1395oo(f)(1) (emphasis added), as the relevance of the 2020 final rule is still undetermined.
Therefore, the final decision requirement found in the statute does not unambiguously apply in
this case. Further, as previously discussed, the Congressional record does not provide guidance
in cases where the question of law or regulation is not clearly relevant to the facts of the case.
See supra Section III.A.1. Because the statute and Congressional intent are ambiguous, Chevron
deference to the agency’s regulations is warranted. See Bluewater Network, 372 F.3d at 410.
Under the relevant regulatory provision, “[a] Board decision is final and subject to
judicial review . . . only if the decision” meets certain listed criteria. 42 C.F.R. § 405.1877(a)(3)
(emphasis added). Relevant to this case, the provision incorporates by reference an enumerated
set of reviewable Board decisions found in § 405.1875(a)(2) that qualify as final decisions. See
id. That list includes “[a] Board [expedited judicial review] decision, but only the question of
whether there is Board jurisdiction over a specific matter at issue in the decision[.]”
19
Id. § 405.1875(a)(2)(iii) (emphasis added). Specifically, “the [CMS] Administrator may not
review the Board’s determination in a decision of its authority to decide a legal question relevant
to the matter at issue.” Id. Here, “whether there is Board jurisdiction over [this] specific
matter[,]” id., is not in question, see Am. Compl., Ex. A (Request for Review) at 2; rather, the
question of “its authority to decide a legal question relevant to the matter[,]” 42 C.F.R.
§ 405.1877(a)(2)(iii) (emphasis added), is at issue, see Am. Compl., Ex. A (Request for Review)
at 2–3. This latter determination is excluded from the list of final decisions and because a
decision is only final if it meets the criteria set by § 405.1877(a)(3), and a determination of
authority to decide a legal question does not satisfy those criteria, the decision in this case does
not constitute a final decision.
Because the denial of expedited judicial review in this case was not a “final decision”
based on either the meaning of the statute or applicable regulatory provisions, it is best
categorized, as the Secretary urges, as an “interlocutory” decision. See Def.’s Reply at 1. The
legitimacy of expedited judicial review cannot be fully judged “before the potential applicability
of the 2020 final rule [can] be ascertained.” Id. Thus, while under normal circumstances there
may be no exhaustion requirement to obtain expedited judicial review of a challenge to a law or
regulation, see Bethesda Hosp. Ass’n v. Bowen, 485 U.S. 399, 404–05 (1988) (holding that there
is no exhaustion requirement when any further administrative proceeding would be “futile”);
Banner Heart Hosp. v. Burwell, 201 F. Supp. 3d 131, 141 (D.D.C. 2016) (holding there is no
exhaustion requirement when “neither the Board nor the intermediary has the authority to
address challenges to the validity of a regulation”), when the regulation has not even been
applied to the case in question, it would not be “futile,” see Bethesda 485 U.S. at 404, to await
20
the Board’s determination as to whether the challenged regulation is relevant to the matter at
issue.
Accordingly, the Court concludes that it may not exercise subject-matter jurisdiction over
this case pursuant to 42 U.S.C. § 1395oo(f). The Court must therefore turn to the question of
whether it has jurisdiction pursuant to the federal mandamus statute.
B. Whether the Court has Subject-Matter Jurisdiction Pursuant to the Mandamus
Statute
The plaintiffs alternatively seek to have the Court exercise mandamus jurisdiction,
pursuant to 28 U.S.C. § 1361, see Am. Compl. ¶ 2, based on the theory that “the Secretary is not
fulfilling the Court’s directive on remand but rather has refused to provide additional explanation
pursuant to the Court’s remand order[,]” Pls.’ Opp’n at 21. The plaintiffs contend that, by
requesting that the parties submit briefing as to certain questions on remand, “[t]he [CMS]
Administrator has failed to take the actions required by this Court and instead is forcing the
parties to go through additional expense and delay in this already long-delayed case.” Id. at 22.
The Secretary counters that “[n]one of the three requirements for mandamus jurisdiction are
satisfied.” Def.’s Reply at 8. According to the Secretary, rather than “seeking enforcement of
this Court’s mandate, the plaintiffs are effectively asking that it be disregarded.” Id.
Accordingly, the Secretary argues that “the remand process is not yet complete and there is no
reason to cut the process short.” Id. at 9.
The remedy of mandamus “is a drastic one, to be invoked only in extraordinary
circumstances.” Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 34 (1980); see also
Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 289 (1988) (“[T]he writ of
mandamus is an extraordinary remedy, to be reserved for extraordinary situations.”). Thus,
mandamus is available only if “(1) the plaintiff has a clear right to relief; (2) the defendant has a
21
clear duty to act; and (3) there is no other adequate remedy available to the plaintiff.” In re
Medicare Reimbursement Litig., 414 F.3d 7, 10 (D.C. Cir. 2005) (quoting Power v. Barnhart,
292 F.3d 781, 784 (D.C. Cir. 2002)). Moreover, mandamus is available “only where the duty to
be performed is ministerial and the obligation to act peremptory, and clearly defined. The law
must not only authorize the demanded action, but require it; the duty must be clear and
indisputable.” Lozada Colon v. U.S. Dep’t of State, 170 F.3d 191, 191 (D.C. Cir. 1999) (internal
quotation marks and citation omitted).
The Court must first address whether the plaintiffs have a clear right to relief. The
plaintiffs contend that on remand, “[a] party always has recourse to the court to seek enforcement
of its mandate.” Pls.’ Opp’n at 20 (quoting Office of Consumers’ Couns. State of Ohio v. FERC,
826 F.2d 1136, 1140 (D.C. Cir. 1987)). It is true that this Court has the power “to correct any
misconception of its mandate by a[n] . . . administrative agency subject to its authority.” Office
of Consumers’ Couns., 826 F.2d at 1140; see also FCC v. Pottsville Broad. Co., 309 U.S. 134,
145 (1940) (“On review the court may [ ] correct errors of law and on remand the [Department]
is bound to act upon the correction.”); Atlantic City Elec. Co. v. FERC, 329 F.3d 856, 858–57
(D.C. Cir. 2003) (vacating administrative action entirely inconsistent with an initial Court order);
N. States Power Co. v. U.S. Dep’t of Energy, 128 F.3d 754, 759 (D.C. Cir. 1997) (granting a writ
of mandamus to compel a federal agency to comply with a prior mandate). The question before
the Court, then, is whether the Secretary has failed to comply with the orders of this Court on
remand. In Mercy II, this Court concluded that it
must . . . remand this case to the agency for the [CMS] Administrator to provide
further explanation of the reasons for finding that the plaintiffs’ documentation
was not contemporaneous . . . Moreover, this case is also remanded for further
explanation of the [CMS] Administrator’s conclusion that the EDS Reports fail to
satisfy the contemporaneous documentation requirement.
22
410 F. Supp. 3d at 83. The [CMS] Administrator has since remanded the Court’s questions to
the Board. See Am. Compl. ¶ 151. Subsequently, the parties were notified that:
The Board hereby requires the Parties to brief the following consistent [with] the
Court’s decision:
• Whether or not the Providers billed the state for the claims at issue;
• Whether or not the Providers’ documentation was “contemporaneous” . . .
; and
• Whether or not the EDS Reports fail to satisfy the “contemporaneous”
documentation requirement.
Am. Compl., Ex. B (Notice of Reopening) at 17. The Board further requested that “the [p]arties’
briefs [ ] address the extent to which the [2020] [f]inal [r]ule is relevant and should be taken into
consideration by the Board when adjudicating these cases.” Id. Insofar as the Board has simply
requested briefing from the parties on the questions posed to the CMS Administrator on remand,
it has not exceeded or failed to comply with the mandate of this Court. Accordingly, the
plaintiffs do not have a clear right to relief and issuing a writ of mandamus is therefore not
appropriate. 11
The plaintiffs having failed to establish that they have a clear right to relief sufficient to
justify the extraordinary grant of mandamus, the Court concludes that it may not exercise
subject-matter jurisdiction over this action pursuant to the federal mandamus statute. 12
11
Because all requirements must be established to warrant a writ of mandamus, see In re Medicare Reimbursement
Litig., 414 F.3d at 10, and the Court concludes that the plaintiffs have failed to establish the first of these
requirements, it need not consider whether the remaining two have been satisfied.
12
It is worth noting that in Mercy II, the Court “decline[d] to exercise its discretion to retain jurisdiction over this
case” given that “the plaintiffs [did] not allege[] that the Secretary engaged in any [ ] unreasonable delay or
noncompliance.” 410 F. Supp. 3d at 82. The Court noted that “the plaintiffs’ claims have now been pending for
over ten years” and as such urged the Secretary “to resolve this matter as expeditiously as possible.” Id. at 83. The
remand order was issued on October 17, 2019, which now was over three years ago. While the Court does not find
that the Secretary has failed to comply with the remand order at this time, the Court continues to urge the Secretary
to expeditiously resolve this matter. The plaintiffs’ compliance with the Board’s requests will hopefully assist in
accomplishing that objective.
23
IV. CONCLUSION
For the foregoing reasons, the Court concludes that it must grant the Secretary’s motion
to dismiss.
SO ORDERED this 17th day of November, 2022. 13
REGGIE B. WALTON
United States District Judge
13
The Court will contemporaneously issue an Order consistent with this Memorandum Opinion.
24 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484452/ | NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
STATE OF ARIZONA, Respondent,
v.
WADE AARON LIMEHOUSE, Petitioner.
No. 1 CA-CR 22-0211 PRPC
FILED 11-17-2022
Appeal from the Superior Court in Maricopa County
No. CR2003-013550-001
The Honorable Geoffrey H. Fish, Judge
REVIEW GRANTED; RELIEF DENIED
COUNSEL
Maricopa County Attorney’s Office, Phoenix
By Krista Wood
Counsel for Respondent
Wade Aaron Limehouse, Kingman
Petitioner
STATE v. LIMEHOUSE
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Samuel A. Thumma, Judge Cynthia J. Bailey, and Vice
Chief Judge David B. Gass delivered the decision of the Court.
PER CURIAM:
¶1 Petitioner Wade Aaron Limehouse petitions this court for
review from the dismissal of his petition for post-conviction relief. We have
considered the petition for review and, for the reasons stated, grant review
and deny relief.
FACTS AND PROCEDURAL HISTORY
¶2 Limehouse pled guilty to sexual conduct with a minor and
attempt to commit child molestation, both dangerous crimes against
children (“DCAC”) because the victims were under ten years old. In
September 2004, the superior court sentenced Limehouse to a slightly
aggravated term of twenty-three years in prison to be followed by lifetime
probation.
¶3 In March 2022, Limehouse filed his first notice and petition
for post-conviction relief. Limehouse argued that a legislative amendment
to Arizona Revised Statutes (“A.R.S.”) § 13-702 was a significant change in
the law and therefore he should be resentenced as a first-time felony
offender. The superior court summarily dismissed the petition as untimely
and found that § 13-702 did not apply to Limehouse. This petition for
review follows and we review for an abuse of discretion. State v. Gutierrez,
229 Ariz. 573, 577, ¶ 19 (2012).
DISCUSSION
¶4 A defendant must file a claim for post-conviction relief within
90 days after sentencing. Ariz. R. Crim. P. 33.4(b)(3)(A). However, a claim
arising under Rules 33.1(b) through (h) may be filed in an untimely notice
if the defendant “explain[s] the reasons for not raising the claim . . . in a
timely manner.” Ariz. R. Crim. P. 33.2(b)(1). The defendant must also file
the claim “within a reasonable time after discovering the basis for the
claim.” Ariz. R. Crim. P. 33.4(b)(3)(B).
2
STATE v. LIMEHOUSE
Decision of the Court
¶5 Limehouse fails to explain why he waited nearly eighteen
years to file a notice of post-conviction relief. Thus, his claim is precluded.
Limehouse also fails to raise a colorable claim as he does not explain how
the amended statute applies to his case in lieu of the DCAC sentencing
statute, which applies to crimes committed against children under the age
of fifteen. See A.R.S. § 13-705. Limehouse does not dispute the age of the
victims, who were both under ten years old when the offenses were
committed. Nor does Limehouse’s claim of a change in the law amount to
newly discovered evidence. Compare Ariz. R. Crim. P. 33.1(e) (providing
relief if “newly discovered material facts exist”) with Ariz. R. Crim. P.
33.1(g) (providing relief if “there has been a significant change in the law”).
The superior court did not abuse its discretion in summarily dismissing
Limehouse’s claims.
¶6 Finally, Limehouse appears to argue that amendments to
A.R.S. § 13-604 in 1994 and § 13-705 in 2017 are significant changes in the
law and that his sentence violates the Eighth Amendment. Limehouse
failed to raise these arguments before the superior court; therefore, they are
waived. See Ariz. R. Crim. P. 33.16(c)(2)(B) (petition for review must
contain issues decided by the superior court); State v. Ramirez, 126 Ariz. 464,
468 (App. 1980) (court of appeals does not address issues raised for the first
time in a petition for review).
CONCLUSION
¶7 We grant review and deny relief.
AMY M. WOOD • Clerk of the Court
FILED: AA
3 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484445/ | United States Court of Appeals
For the Eighth Circuit
___________________________
No. 21-3009
___________________________
Anthony Slayden
Plaintiff - Appellant
v.
Center for Behavioral Medicine
Defendant - Appellee
____________
Appeal from United States District Court
for the Western District of Missouri - Kansas City
____________
Submitted: September 20, 2022
Filed: November 17, 2022
____________
Before LOKEN, ARNOLD, and KOBES, Circuit Judges.
____________
KOBES, Circuit Judge.
Anthony Slayden worked as a security officer at the Center for Behavioral
Medicine (CBM). Slayden sued CBM, alleging a racially hostile environment,
disparate treatment based on race, retaliation, and constructive discharge in violation
of the Missouri Human Rights Act (MHRA) and Title VII of the Civil Rights Act of
1964. The district court1 granted summary judgment to CBM, and we affirm.
I.
Slayden worked as a security officer at CBM for around 21 years before he
resigned in December 2019. On August 9, 2018, Slayden filed a grievance with
CBM’s Human Resources department about his supervisor Mike Seward’s alleged
harassment. HR had an investigator look into Slayden’s grievance and found his
complaints unsubstantiated.
On July 24, 2019, Slayden filed charges with the Missouri Commission on
Human Rights (MCHR) and the EEOC. The description attached to the EEOC
charge listed specific incidents of Seward’s harassment only until August 10, 2018.
Although the charge indicated that the discrimination was a “continuing action,” and
listed October 16, 2018, as the latest date of discrimination, the description merely
stated that HR decided Slayden’s internal grievance was unsubstantiated on October
16, 2018. Slayden then filed this lawsuit, alleging a racially hostile work
environment, disparate treatment based on race, and retaliation, all in violation of
the MHRA, Mo. Rev. Stat. § 213.010 et seq., and Title VII, 42 U.S.C. § 2000e et
seq. Slayden also argued that he was constructively discharged.
Slayden testified that Seward was the only person who discriminated against
him, and that Seward did nothing that Slayden considered retaliatory,
discriminatory, or harassing after Slayden filed his grievance with HR on August 9,
2018. After filing the grievance, Slayden actively avoided Seward by leaving work
by the back door. Slayden also testified to three incidents that he considered
retaliation by HR, all of which happened in mid-to-late 2019: (1) a letter he received
falsely stating that he requested leave without pay; (2) a written or verbal
1
The Honorable Gary A. Fenner, Senior United States District Judge for the
Western District of Missouri.
-2-
communication about something that Slayden can’t specifically recall; and (3) not
allowing Slayden to come to work for two weeks while he recovered from finger
surgery when his doctor said he could work on light duty.
The district court granted summary judgment to CBM, finding that Slayden’s
hostile work environment and disparate treatment claims were time-barred and that
Slayden failed to exhaust administrative remedies for his retaliation claims. It also
held that, to the extent that Slayden reframed his claims as a constructive discharge
claim, he did not exhaust it.
II.
“We review a district court’s decision to grant summary judgment de novo.”
Beasley v. Warren Unilube, Inc., 933 F.3d 932, 936 (8th Cir. 2019). “Summary
judgment is only appropriate if there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of law.” LeBlanc v.
McDonough, 39 F.4th 1071, 1075 (8th Cir. 2022) (citation omitted).
A.
Slayden first argues that his hostile work environment and discrimination
claims are not time-barred. Under the MHRA, a person must first file a charge with
the MCHR within 180 days of the alleged discriminatory act. Mo. Rev. Stat.
§ 213.075.1. Under Title VII, someone who first files with a state or local agency
(like the MCHR) must file their charge with the EEOC within 300 days of the alleged
act. 42 U.S.C. § 2000e-5(e)(1). Slayden filed his charge with both the MCHR and
the EEOC on July 24, 2019. To be timely, his MHRA claims must have arisen after
January 25, 2019, and his Title VII claims after September 27, 2018.2 Because a
hostile work environment consists of a series of separate acts, Slayden only needed
2
Slayden does not appear to challenge judgment on his MHRA claims.
Regardless, the MHRA’s statutory period is shorter than Title VII’s so the same
analysis applies.
-3-
to file his charge within 300 days of at least one act that is part of the hostile work
environment. See Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 117–18
(2002).
Slayden insists that he filed his claim within 300 days of at least one act of
harassment. He argues that his need to avoid Seward after filing the grievance was
a result of Seward’s “discriminatory animus,” and that he was continually harassed
until Seward resigned in mid-2019. This contradicts the record. Slayden testified
that Seward was the only person who discriminated against him, and that Seward
did nothing that Slayden considered retaliatory, discriminatory, or harassing after
Slayden filed his grievance with HR on August 9, 2018. Slayden further argues that
CBM did nothing to remedy the harassment, and that the failure to take appropriate
remedial action constitutes discrimination. 3 Yet HR had Slayden’s grievance
investigated and found it unsubstantiated.
Last, Slayden argues that HR continued the harassment by threatening
discipline, disciplining him, and giving him baseless write-ups. Although Slayden
testified that “after [Seward] left, human resources continued with the harassment or
false allegations,” nothing in the record supports an inference that any of HR’s
actions constituted harassment based on Slayden’s race. See Bacon v. Hennepin
Cnty. Med. Ctr., 550 F.3d 711, 716 (8th Cir. 2008) (“A properly supported motion
for summary judgment is not defeated by self-serving affidavits. Rather, the plaintiff
must substantiate allegations with sufficient probative evidence that would permit a
finding in the plaintiff’s favor.”) (citation omitted) (cleaned up).
Slayden’s hostile work environment and discrimination claims are time-
barred.
3
Slayden relies on Faragher v. City of Boca Raton, 524 U.S. 775 (1998) to
make this argument. Faragher concerned an employer’s vicarious liability for a
hostile work environment where it had failed to exercise reasonable care to prevent
harassment; it does not support the notion that failure to take remedial action is itself
discrimination. See id. at 807–09.
-4-
B.
Slayden next argues that he exhausted his retaliation and constructive
discharge claims. “The exhaustion requirement may be satisfied if the civil claim
grows out of or is like or reasonably related to the substance of the allegations in the
administrative charge, but the civil suit can be only as broad as the scope of any
investigation that reasonably could have been expected to result from the initial
charge of discrimination.” Fanning v. Potter, 614 F.3d 845, 852–53 (8th Cir. 2010)
(citation omitted) (cleaned up); see also EEOC v. Delight Wholesale Co., 973 F.2d
664, 668 (8th Cir. 1992). He argues that the EEOC charge covered these claims
because they are like or related to the substance of the charge.
i.
While Slayden argues that his retaliation claims are like or related to the
substance of his EEOC charge, he doesn’t address how they are related. We may
consider this argument waived. See Meyers v. Starke, 420 F.3d 738, 743 (8th Cir.
2005) (“To be reviewable, an issue must be presented in the brief with some
specificity. Failure to do so can result in waiver.”).
Slayden’s argument fails on the merits too. Slayden testified to three
occasions he considered retaliation by HR, all of which occurred in mid-to-late 2019.
But the charge’s only references to HR’s actions were about the finding that
Slayden’s August 2018 grievance was unsubstantiated and HR’s failure to provide
a grievance or complaint form when Slayden asked for one. Slayden never claimed
that either action was retaliatory. And none of allegedly retaliatory actions he did
testify to are “like or related to the substance of the allegations in the charge,” nor
can they be “reasonably . . . expected to grow out of the investigation triggered by
the charge.” Delight Wholesale Co., 973 F.2d at 668. “[I]t is well established that
retaliation claims are not reasonably related to underlying discrimination claims.”
Wallin v. Minn. Dep’t of Corr., 153 F.3d 681, 688–89 (8th Cir. 1998) (plaintiff had
not exhausted his retaliation claim when he claimed the retaliation was in response
-5-
to internal discrimination complaints because he failed to allege retaliation in his
EEOC charge).
Slayden’s charge described Seward’s allegedly discriminatory actions, not
HR’s. Slayden also filed his EEOC charge almost a year after filing his August 2018
grievance, yet the charge didn’t indicate that he had any issues with HR after it found
the grievance unsubstantiated. See Williams v. Little Rock Mun. Water Works, 21
F.3d 218, 222–23 (8th Cir. 1994) (plaintiff had not exhausted her race discrimination
claims because her EEOC charge “failed to allege any facts in the narrative section
of her charge which raise the issue of race discrimination,” and the charge “[did] not
even hint of a claim of race discrimination”); see also Henson v. Union Pac. R.R.
Co., 3 F.4th 1075, 1080–81 (8th Cir. 2021) (“It is not reasonable to expect the
investigating agency to look for and investigate discrete adverse employment actions
if they are nowhere mentioned in the administrative charge.”) (citation omitted)
(cleaned up). Because Slayden did not allege retaliation by HR in his charge, he has
not exhausted his retaliation claims.4
ii.
Slayden has not exhausted his constructive discharge claim either. “A
constructive discharge is a discrete act of discrimination or retaliation that stands
separate and distinct from the continuing violation of a hostile work environment.”
Henson, 3 F.4th at 1081. In Henson, 5 we found that a plaintiff’s constructive
4
The fact that Slayden checked a box for “retaliation” on his charge is not
enough to overcome the fact that his charge describes no retaliation by HR. Cf.
Faibisch v. Univ. of Minn., 304 F.3d 797, 803 (8th Cir. 2002) (simply checking the
“sex discrimination” box on the charge form and making a conclusory allegation, as
opposed to particularized account, did not establish a reasonable relationship
between the facts alleged in the charge and a sex discrimination claim), overruled in
part on other grounds by Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369 (2004).
5
Although Henson was decided under the MHRA, we relied on Supreme
Court and Eighth Circuit authority because “in deciding a case under the MHRA,
state appellate courts are guided by both Missouri law and federal employment
-6-
discharge claim was not reasonably related to his charge allegations where the
charge did not assert that he had been or was about to be constructively discharged
and where the alleged constructive discharge did not occur until approximately nine
months after his charge had been filed. Id. at 1082. Here, Slayden’s charge gave no
indication that he was about to be constructively discharged, and Slayden did not
resign from CBM until approximately five months after he filed his charge. As
we’ve made clear, “the civil suit can be only as broad as the scope of any
investigation that reasonably could have been expected to result from the initial
charge of discrimination.” See Fanning, 614 F.3d at 852–53. Because a constructive
discharge could not have been reasonably expected to result from Slayden’s initial
EEOC charge, Slayden has not exhausted his constructive discharge claim. 6
III.
We affirm the district court’s grant of summary judgment.
______________________________
discrimination caselaw that is consistent with Missouri law.” Henson, 3 F.4th at
1081 (quoting Lin v. Ellis, 594 S.W.3d 238, 242 (Mo. 2020) (en banc)) (cleaned up).
6
Slayden’s reliance on Green v. Brennan, 578 U.S. 547 (2016), is misplaced.
In Green, the Court found that because actual resignation is an element of a
constructive discharge claim, the filing period for the claim begins to run only after
the employee actually resigns. Id. at 555–56. Slayden argues that because
discriminatory conduct is an element of a constructive discharge claim, “the natural
progression to discharge is like or similar to the events that form the basis for the
charge and the parameters of the investigation.” Slayden Br. 42. Green dealt with
a constructive discharge claim’s filing period and not the exhaustion of constructive
discharge claims. It doesn’t control here.
-7- | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484450/ | Case: 22-1988 Document: 28 Page: 1 Filed: 11/17/2022
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
ADAM DELGADO,
Petitioner
v.
DEPARTMENT OF JUSTICE,
Respondent
______________________
2022-1988
______________________
Petition for review of the Merit Systems Protection
Board in No. NY-1221-09-0299-X-1.
______________________
Decided: November 17, 2022
______________________
ADAM DELGADO, Ft. Meade, MD, pro se.
CATHARINE PARNELL, Civil Division, Commercial Liti-
gation Branch, United States Department of Justice,
Washington, DC, for respondent. Also represented by
BRIAN M. BOYNTON, DEBORAH ANN BYNUM, PATRICIA M.
MCCARTHY.
______________________
Before NEWMAN, REYNA, and STOLL, Circuit Judges.
Case: 22-1988 Document: 28 Page: 2 Filed: 11/17/2022
2 DELGADO v. DOJ
PER CURIAM.
Adam Delgado appeals a decision from the U.S. Merits
System Protection Board affirming that the Bureau of Al-
cohol, Tobacco, Firearms, and Explosives complied with a
settlement agreement between Mr. Delgado and the
agency. We affirm.
BACKGROUND
The Bureau of Alcohol, Tobacco, Firearms, and Explo-
sives (the “agency”) posted Mr. Delgado in Puerto Rico as a
Special Agent. SAppx 3–5 1. Between 2005 and 2006, Mr.
Delgado repeatedly requested the agency change his post
to Chicago. SAppx 4–5. After multiple denials of his re-
quest for transfer, Mr. Delgado filed an Equal Employment
Opportunity complaint. SAppx 4. Mr. Delgado also filed a
discrimination claim against the agency in the U.S. Dis-
trict Court for the District of Columbia. SAppx 4, 76. Mr.
Delgado continued to request and be denied transfer until
he resigned in 2006. SAppx 4–5.
In 2009, Mr. Delgado filed an appeal before the Merit
Systems Protection Board (the “Board”), alleging that he
had been constructively removed from his position when
the agency refused to transfer him. SAppx 23, 75. The
Board later dismissed the appeal without prejudice so that
Mr. Delgado’s newly obtained counsel could refile an ap-
peal after completing his review of the record. SAppx 76.
Mr. Delgado refiled an appeal in January 2010, alleging
that his supervisor discriminated against him for not
speaking Spanish and threatened his career. SAppx 82.
In January 2011, Mr. Delgado and the agency entered
into a Settlement Agreement (the “Settlement”) to resolve
the district court litigation and the appeal to the Board.
1 “SAppx” refers to the appendix submitted with the
Department of Justice’s Response Brief.
Case: 22-1988 Document: 28 Page: 3 Filed: 11/17/2022
DELGADO v. DOJ 3
SAppx 22–23, 75–76, 82, 89–92. Under the Settlement, the
agency would cancel Mr. Delgado’s resignation, the agency
would then reinstate and post him in Chicago, and the
agency would pay both “the employer’s and employee’s
share of Federal Employee Retirement System contribu-
tions from the date of resignation until the effective date of
cancellation of the resignation.” SAppx 91. The Settlement
also required the agency to pay $20,000 for Mr. Delgado’s
attorney fees and costs accrued in district court and in ap-
peal to the Board. Id. In signing the Settlement, Mr. Del-
gado “waive[d] any claims of back pay or any other
damages of any kind whatsoever.” Id. Mr. Delgado’s ap-
peal to the Board was dismissed as a result. SAppx 96.
The agency cancelled Mr. Delgado’s resignation and then
reinstated and posted him in Chicago. SAppx 117.
Following the Settlement, at Mr. Delgado’s request, the
agency informed Mr. Delgado that it had made $122,581.06
in retirement contributions on behalf of the employer as of
March 2012. SAppx 101, 103, 112. Chief of Payroll Pro-
cessing & Operations Branch Chris Kopeck also suggested
in his correspondence that the agency had overpaid the
contribution by $1,351.48, and that the correct contribution
should have been $121,229.58. SAppx 103.
In March 2016, Mr. Delgado filed a petition for enforce-
ment with the Merits System Protection Board Field Of-
fice, arguing that the agency lacked proof of paying the
Federal Employee Retirement System contributions as re-
quired by the Settlement and that the correct employer
contribution amounted to $156,777.94. SAppx 101. The
Administrative Judge found the agency’s discrepant calcu-
lations for the employer contribution—$122,581.06 versus
$121,229.58—required further attention and clarity.
SAppx 120–21. The Administrative Judge granted Mr.
Delgado’s petition and found that, to comply with the Set-
tlement, the agency must explain its $122,581.06 contribu-
tion computations between April 4, 2006, and July 16,
2011. SAppx 121.
Case: 22-1988 Document: 28 Page: 4 Filed: 11/17/2022
4 DELGADO v. DOJ
In July 2017, the agency provided a statement of com-
pliance with the Administrative Judge’s order. SAppx 135.
The agency explained that it used Chicago rates to compute
Mr. Delgado’s retirement contribution and the agency’s
contributions to be $7,326.35 and $139,341.22, respec-
tively. SAppx 144–45. These amounts were a correction to
the original calculations, which relied on a lower Puerto
Rico locality rate. SAppx 143. The agency noted that
$6,040.18 of the corrected contributions were outstanding
and in process of disbursement. SAppx 146–47.
Mr. Delgado argued in response that the agency’s delay
in correcting the contributions entitled him to back wages,
legal fees, other benefits, a new post and grade, as well as
relocation and transportation costs. SAppx 318. Mr. Del-
gado further argued that the agency’s submission failed to
provide proof of payment, and that it was improper to cal-
culate the contributions using Chicago rather than Puerto
Rico locality rates. SAppx 318. The agency supplemented
its statement of compliance in April 2018, to confirm that
the one outstanding contribution had been made. SAppx
295.
Mr. Delgado continued to argue that (1) Puerto Rico
and not Chicago locality rates apply, and (2) the agency
failed to provide proof of making the required contribu-
tions. SAppx 318–19. He contended that independent con-
firmation from the Office of Personnel Management was
necessary and requested certified copies of documents be
sent to him, the agency, and the Board. Id.
On May 26, 2022, the Board found that the agency had
complied with the Settlement. SAppx 315–20. The Board
also rejected Mr. Delgado’s requests for wages, costs, fees,
and benefits that were outside the scope of the Settlement.
Id. Mr. Delgado timely appeals. We have jurisdiction un-
der 28 U.S.C. § 1295(a)(9).
Case: 22-1988 Document: 28 Page: 5 Filed: 11/17/2022
DELGADO v. DOJ 5
STANDARD OF REVIEW
Our review of Board decisions is statutorily limited.
We must set aside a Board decision when it is “[1] arbi-
trary, capricious, an abuse of discretion, or otherwise not
in accordance with law; [2] obtained without procedures re-
quired by law, rule or regulation having been followed; or
[3] unsupported by substantial evidence.” Hayes v. Dep’t of
the Navy, 727 F.2d 1535, 1537 (Fed. Cir. 1984) (citing 5
U.S.C. § 7703(c)). “Substantial evidence is defined simply
as ‘more than a mere scintilla’ and ‘such relevant evidence
as a reasonable mind might accept as adequate to support
a conclusion.’” DuoProSS Meditech Corp. v. Inviro Med.
Devices, Ltd., 695 F.3d 1247, 1252 (Fed. Cir. 2012) (citation
omitted).
DISCUSSION
We affirm the Board’s determination that the agency
complied with the Settlement. SAppx 315-20. Mr. Delgado
argues that the Board did not have sufficient evidence to
find that the agency paid “the $122,[581.06] employer por-
tion payment” to his federal employee retirement account
as required by the Settlement. Appellant Op. Br. 2. Mr.
Delgado also seeks “back pay, seniority, benefits, moving
costs, attorneys fees, court reporter fees, court costs, an-
nual leave, sick leave, military leave, home leave, home buy
back program and other entitlements.” Id.
We conclude that substantial evidence supports the
Board’s determination that the agency complied with the
Settlement. The agency provided sworn declarations and
evidentiary support showing that the agency paid an ad-
justed contribution of $139,341.22 as of April 12, 2018.
SAppx 146–47, 271–73, 299–301. Mr. Delgado’s demand
for additional evidence for a portion of this payment is un-
necessary where, as here, there is “such relevant evidence
as a reasonable mind might accept as adequate to support
a conclusion.” DuoProSS Meditech Corp., 695 F.3d at 1252.
Requiring additional evidence is also improper because Mr.
Case: 22-1988 Document: 28 Page: 6 Filed: 11/17/2022
6 DELGADO v. DOJ
Delgado appears to concede that payment has been made.
Appellant Reply Br. at 6 (“Mr. Delgado believes that [the
agency] may have made the $122,581.06 payment post the
filing of the Petition to Enforce to avoid sanctions….”).
We also affirm the Board’s rejection of Mr. Delgado’s
requests for wages, fees, costs, and benefits outside the
scope of the Settlement. Mr. Delgado claims that he is en-
titled to these remedies for an alleged breach of the Settle-
ment. Appellant Reply Br. 7. Most of Mr. Delgado’s
requested relief is monetary. “The [Board] does not possess
authority to award monetary damages for the breach of a
settlement agreement.” Cunningham v. United States, 748
F.3d 1172, 1180 (Fed. Cir. 2014). Even for non-monetary
relief, the Board is statutorily limited to enforcing compli-
ance with a settlement agreement. See id.; see also 5 U.S.C.
§ 1204(a)(2). Thus, the Board correctly rejected each mon-
etary and non-monetary request outside the scope of the
Settlement.
CONCLUSION
We affirm the Board’s determination that the agency
complied with the Settlement. We also affirm the Board’s
rejection of Mr. Delgado’s requests for wages, costs, fees,
and benefits outside the scope of the Settlement.
AFFIRMED
COSTS
No costs. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484447/ | USCA11 Case: 21-14215 Date Filed: 11/17/2022 Page: 1 of 8
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-14215
Non-Argument Calendar
____________________
ZURICH AMERICAN INSURANCE COMPANY,
Plaintiff-Counter Defendant-
Appellee,
versus
TAVISTOCK RESTAURANTS GROUP, LLC,
Defendant-Counter Claimant-
Appellant.
____________________
Appeal from the United States District Court
for the Middle District of Florida
USCA11 Case: 21-14215 Date Filed: 11/17/2022 Page: 2 of 8
2 Opinion of the Court 21-14215
D.C. Docket No. 6:20-cv-01295-PGB-EJK
____________________
Before JILL PRYOR, NEWSOM, and BRASHER, Circuit Judges.
PER CURIAM:
This appeal presents the question of whether the COVID-
19-related business losses suffered by Tavistock Restaurants
Group, LLC—a restaurant owner and operator—constituted “di-
rect physical loss of or damage” to its property under a policy is-
sued by Zurich American Insurance Company. In a recently-de-
cided a case involving an insured’s claim for COVID-19 losses un-
der a similar insurance contract provision, we held that, under
Georgia law, “direct physical loss of or damage to” property re-
quires a “tangible change to a property.” Henry’s La. Grill, Inc. v.
Allied Ins. Co. of Am., 35 F.4th 1318, 1320–21 (11th Cir. 2022) (in-
ternal quotation marks omitted). Because none of Tavistock’s al-
leged COVID-19-related losses involved a tangible change to its
property, we conclude that the district court properly granted judg-
ment on the pleadings to Zurich and dismissed Tavistock’s coun-
terclaim. We thus affirm.
I. BACKGROUND
As of March 2020, Tavistock owned and operated approxi-
mately 80 restaurants. Tavistock had an “All Risk” commercial
property insurance policy from Zurich. Under the policy, Zurich
USCA11 Case: 21-14215 Date Filed: 11/17/2022 Page: 3 of 8
21-14215 Opinion of the Court 3
agreed to insure “against direct physical loss of or damage” to
Tavistock’s property. Doc. 82-1 at 14. 1
At the beginning of the COVID-19 pandemic, state and local
governments across the country, including in the communities
where Tavistock operated restaurants, issued stay-at-home orders
that prohibited in-person dining in restaurants. As a result, some of
Tavistock’s restaurants offered only take-out services, and others
were forced to close for a period of time. Later, Tavistock was per-
mitted to resume in-person dining operations. Concerned about
the presence of COVID-19 particulates in the air and on surfaces at
its restaurants, Tavistock took steps to mitigate the spread of
COVID-19 by, among other things, installing new barriers and re-
moving some furniture and workstations at its restaurants.
Tavistock submitted a claim to Zurich for the losses it sus-
tained because of the pandemic. Zurich denied the claim, conclud-
ing there was no coverage under the policy because Tavistock had
not sustained a “direct physical loss of or damage to [its] property.”
Doc. 82-2 at 3.
Zurich filed this lawsuit seeking a declaration that the policy
did “not provide coverage for Tavistock’s claimed losses arising out
of the spread of the COVID-19 [v]irus.” Doc. 1 at ¶ 15. Tavistock
filed an answer to the complaint and brought a counterclaim, seek-
ing a declaratory judgment that it was entitled to coverage under
1 “Doc.” numbers refer to the district court’s docket entries.
USCA11 Case: 21-14215 Date Filed: 11/17/2022 Page: 4 of 8
4 Opinion of the Court 21-14215
the policy because it had “sustained direct physical loss of or dam-
age to” its restaurants due to COVID-19. Doc. 82 at ¶ 169.
Zurich moved to dismiss Tavistock’s counterclaim, arguing
that Tavistock failed to state a claim that COVID-19 losses were
covered under the policy. The district court granted Zurich’s mo-
tion. As a preliminary matter, the court concluded that Georgia law
governed the parties’ dispute because the parties had executed the
insurance contract in Georgia. The court explained that to establish
a direct physical loss under Georgia law, Tavistock had to show
that the presence of the COVID-19 virus “cause[d] a physical
change to [its] restaurants.” Doc. 112 at 9. The court concluded that
the allegations in the counterclaim failed to establish that Tavistock
experienced any physical change to its restaurants due to COVID-
19. Because none of Tavistock’s alleged losses qualified as a direct
physical loss, the district court concluded that Tavistock had failed
to state a claim for declaratory relief. The district court dismissed
the counterclaim with prejudice.
After the district court dismissed the counterclaim, Zurich
moved for judgment on the pleadings on its claim seeking a declar-
atory judgment that there was no coverage under the policy. The
district court granted the motion, relying on its earlier determina-
tion that there was no coverage under the policy for Tavistock’s
alleged losses. The court then entered a judgment in favor of Zur-
ich and against Tavistock. This is Tavistock’s appeal.
USCA11 Case: 21-14215 Date Filed: 11/17/2022 Page: 5 of 8
21-14215 Opinion of the Court 5
II. STANDARDS OF REVIEW
“We review de novo an order granting judgment on the
pleadings.” Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11th
Cir. 2014). “Judgment on the pleadings is appropriate where there
are no material facts in dispute and the moving party is entitled to
judgment as a matter of law.” Id. (internal quotation marks omit-
ted). “In determining whether a party is entitled to judgment on
the pleadings, we accept as true all material facts alleged in the non-
moving party’s pleading, and we view those facts in the light most
favorable to the non-moving party.” Id.
We review de novo an order granting a motion to dismiss a
counterclaim for failure to state a claim. See Lisk v. Lumber One
Wood Preserving, LLC, 792 F.3d 1331, 1334 (11th Cir. 2015). “We
take the factual allegations in the [counterclaim] as true and con-
strue them in the light most favorable to the [non-movant].” Ed-
wards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir. 2010). Yet we
need not accept the legal conclusions in the counterclaim as true.
See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“[T]he tenet that a
court must accept as true all of the allegations contained in a com-
plaint is inapplicable to legal conclusions.”). To avoid dismissal for
failure to state a claim under Federal Rule of Civil Procedure
12(b)(6), a counterclaim must contain sufficient factual matter that,
accepted as true, “state[s] a claim to relief that is plausible on its
face.” Id. (internal quotation marks omitted).
USCA11 Case: 21-14215 Date Filed: 11/17/2022 Page: 6 of 8
6 Opinion of the Court 21-14215
III. DISCUSSION
The policy language at issue here provides that there is cov-
erage only if Tavistock suffered a “direct physical loss of or damage
. . . to” its property. Doc. 82-1 at 14. Although the phrase “direct
physical loss of or damage . . . to” property is not defined in the
policy, we recently interpreted under Georgia law identical lan-
guage in another insurance policy. See Henry’s La. Grill, 35 F.4th
at 1320–21. 2
In Henry’s Louisiana Grill, we reviewed whether a district
court erred in dismissing a restaurant’s claim that there was cover-
age under its insurance policy for COVID-19-related losses. See id.
at 1319. As in this case, the policy afforded covered when the res-
taurant sustained “direct physical loss of or damage to” its prop-
erty. See id. (internal quotation marks omitted). Applying Georgia
law, we explained that this term meant there was coverage only if
the restaurant experienced “a tangible change to [its] property.” Id.
at 1320–21.
Tavistock disagrees with this interpretation, arguing that
Georgia law does not require an insured to demonstrate a tangible
2 The district court concluded that Georgia law applied to the insurance pol-
icy. Because Tavistock does not challenge this determination on appeal, we
assume that Georgia law applies and deem abandoned any challenge to the
district court’s choice-of-law determination. See Timson v. Sampson, 518 F.3d
870, 874 (11th Cir. 2008) (“[I]ssues not briefed on appeal . . . are deemed aban-
doned.”).
USCA11 Case: 21-14215 Date Filed: 11/17/2022 Page: 7 of 8
21-14215 Opinion of the Court 7
change to property to establish direct physical loss of or damage to
property. But this argument is foreclosed by our precedent.
“[W]hen we have issued a precedential decision interpreting . . .
state law, our prior precedent rule requires that we follow that de-
cision, absent a later decision by the state appellate court casting
doubt on our interpretation of that law.” EmbroidMe.com, Inc. v.
Travelers Prop. Cas. Co. of Am., 845 F.3d 1099, 1105 (11th Cir.
2017). Because there is no decision from a Georgia appellate court
casting doubt on our interpretation of Georgia law, we are bound
by Henry’s Louisiana Grill.
Notably, Tavistock does not argue on appeal that the district
court erred in concluding that it had not alleged a tangible change
to its property. Even assuming Tavistock preserved this issue, we
cannot say that the district court erred in concluding that it failed
to allege a tangible change. Although Tavistock alleged that the vi-
rus was present on surfaces and in the air of its restaurants, we rec-
ognized in Henry’s Louisiana Grill that the introduction of the
COVID-19 virus into a place did not result in any tangible change
to the property. 35 F.4th at 1321. We explained that the presence
of the virus in a place did not “effect[] any actual, physical change”
on the property because the “mere presence of the virus . . . did not
destroy or ruin” it. Id.
Tavistock also alleged that it was forced to shutter its dining
rooms due to government orders. But we concluded in Henry’s
Louisiana Grill that a government order requiring a restaurant to
cease in-person dining operations had “no physical effect on the
USCA11 Case: 21-14215 Date Filed: 11/17/2022 Page: 8 of 8
8 Opinion of the Court 21-14215
property” because it “did not destroy, ruin, or even damage any
part of the restaurant.” Id.
Because Tavistock failed to identify direct physical loss of or
damage to a property—a prerequisite to recover under the pol-
icy—Zurich properly denied its claim. 3 Accordingly, the district
court did not err when it granted Zurich’s motion for judgment on
the pleadings or when it dismissed Tavistock’s counterclaim.
IV. CONCLUSION
For the above reasons, we affirm.
AFFIRMED.
3 Because the policy provides no coverage, we need not consider the parties’
arguments about whether any of the policy’s exclusions would have barred
coverage. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484449/ | Case: 22-1360 Document: 26 Page: 1 Filed: 11/17/2022
United States Court of Appeals
for the Federal Circuit
______________________
GUY C. RHONE,
Claimant-Appellant
v.
DENIS MCDONOUGH, SECRETARY OF
VETERANS AFFAIRS,
Respondent-Appellee
______________________
2022-1360
______________________
Appeal from the United States Court of Appeals for
Veterans Claims in No. 20-2370, Chief Judge Margaret C.
Bartley.
______________________
Decided: November 17, 2022
______________________
GUY C. RHONE, Granite Falls, NC, pro se.
BORISLAV KUSHNIR, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, for respondent-appellee. Also represented by
BRIAN M. BOYNTON, ELIZABETH MARIE HOSFORD, PATRICIA
M. MCCARTHY; AMANDA BLACKMON, Y. KEN LEE, Office of
General Counsel, United States Department of Veterans
Affairs, Washington, DC.
Case: 22-1360 Document: 26 Page: 2 Filed: 11/17/2022
2 RHONE v. MCDONOUGH
______________________
Before CHEN, BRYSON, and HUGHES, Circuit Judges.
PER CURIAM.
Plaintiff-Appellant Guy C. Rhone appeals the decision
of the Court of Appeals for Veterans Claims (Veterans
Court) affirming a decision of the Board of Veterans’ Ap-
peals (Board) determining that the Department of Veter-
ans Affairs (VA) lawfully withheld a portion of his
disability compensation payments pursuant to a state
court order for alimony payments. On appeal, Mr. Rhone
argues the Veterans Court erred for two reasons: (1) fed-
eral statutes do not allow withholding of disability compen-
sation for alimony payments; and (2) the VA’s denial of
substantive review of state court garnishment orders vio-
lates his right to due process within the VA adjudication
system. Because the Veterans Court correctly interpreted
the relevant statutes and the VA’s denial of review of state
garnishment orders does not violate due process, we affirm.
BACKGROUND
Mr. Rhone served in the United States Navy from Feb-
ruary 1950 to December 1953 and in the United States Air
Force from November 1959 to August 1988. Rhone v.
McDonough, No. 20-2370, 2021 WL 2678674, at *1 (Vet.
App. June 30, 2021) (Veterans Court Decision). In Febru-
ary 1986, Mr. Rhone and his former spouse, Jo Anne
Rhone, divorced upon entry of a Final Judgment of Disso-
lution of Marriage (Divorce Decree) by the Circuit Court for
Hillsborough County, Florida (State Court). Appx. 251,
255. 1 Recognizing that Mr. Rhone would be eligible for mil-
itary retirement within two years, the Divorce Decree
stated that Mrs. Rhone would receive 40% of Mr. Rhone’s
1 All Appx. citations refer to the appendix filed con-
currently with Respondent-Appellee’s brief.
Case: 22-1360 Document: 26 Page: 3 Filed: 11/17/2022
RHONE V. MCDONOUGH 3
military retirement benefits. Appx. 252, 254–55.
Mr. Rhone appealed, and the District Court of Appeals for
the 2nd District of Florida (State Appellate Court) upheld
the Divorce Decree. Appx. 249–50.
In 1988, Mr. Rhone separated from military service
due to physical disability. Appx. 39, 245. Effective August
10, 1988, he had a combined disability rating of 60%.
Appx. 248. This disability rating was subsequently in-
creased to 70%, effective April 18, 1989. Appx. 242. To re-
ceive his disability compensation, Mr. Rhone elected to
waive a portion of his military retirement pay on July 27,
1990. Appx. 224. Such a waiver is required under 38
U.S.C. § 5305 to receive VA disability compensation. 2 As
the Board found, it is undisputed that Mr. Rhone made
such a waiver. Appx. 48.
Mr. Rhone moved to modify his payment obligation un-
der the Divorce Decree, which the State Court denied in an
April 1990 order. Appx. 230–39. In doing so, the State
Court clarified that the provision regarding Mrs. Rhone re-
ceiving 40% of Mr. Rhone’s military retirement benefits
2 Section 5305 provides that
any person who is receiving pay pursuant to any
provision of law providing retired or retirement pay
to persons in the Armed Forces . . . and who would
be eligible to receive pension or compensation un-
der the laws administered by the Secretary [of the
VA] if such person were not receiving such retired
or retirement pay, shall be entitled to receive such
pension or compensation upon the filing by such
person with the department by which such retired
or retirement pay is paid of a waiver of so much of
such person’s retired or retirement pay as is equal
in amount to such pension or compensation.
38 U.S.C. § 5305.
Case: 22-1360 Document: 26 Page: 4 Filed: 11/17/2022
4 RHONE v. MCDONOUGH
“constitute[s] a provision for the payment from the Former
Husband to the Former Wife of permanent periodic ali-
mony and do[es] not constitute a property division.”
Appx. 230–31; see also Appx. 254–55. Thus, “[t]he Former
Wife is and was, therefore, entitled to an amount equal to
forty percent (40%) of the gross military retirement as per-
manent periodic alimony.” Appx. 231. Mr. Rhone ap-
pealed, and the State Appellate Court affirmed the April
1990 order. Appx. 228–29.
In August 1991, the State Court issued a Continuing
Writ of Garnishment directing the Air Force to withhold
from Mr. Rhone’s military retirement pay the alimony pay-
ment due to Mrs. Rhone. Appx. 226–27. In November
1991, the State Court issued an order to the VA indicating
that the Continuing Writ of Garnishment also applied to
the VA. Appx. 221–22. In December 1991, the VA’s Office
of District Counsel determined that the State Court’s No-
vember 1991 order obliged the VA to make payments from
Mr. Rhone’s disability compensation to Mrs. Rhone.
Appx. 219–220. Mr. Rhone was notified that the VA would
begin withholding a percentage of his disability compensa-
tion effective February 1, 1992. Appx. 218, 214–16.
In June 1996, Mr. Rhone notified the VA of his intent
to renounce his rights to VA benefits. Appx. 202. He sub-
sequently filed a claim for individual unemployability, but
did not receive those benefits due to his renouncement.
Appx. 41; see also Appx. 178–202 (seeking individual un-
employability benefits in 1996–1997). Despite renouncing
his VA benefits, between 1998 and 2001, he repeatedly
elected to receive disability compensation in lieu of retired
pay, but withdrew his election upon being informed by the
VA that it would be subject to garnishment. Appx. 41–42;
Appx. 173–76 (seeking disability compensation in 1998,
but only if no garnishment was paid to his ex-wife);
Appx. 150–66 (seeking disability compensation in 2000 and
then renouncing); Appx. 148–49 (seeking disability com-
pensation in 2001 but failing to pursue benefits).
Case: 22-1360 Document: 26 Page: 5 Filed: 11/17/2022
RHONE V. MCDONOUGH 5
In 2002, Mr. Rhone again sought to receive disability
compensation. Appx. 145–47. This time, he received a dif-
ferent answer from the VA on the garnishment question.
In January 2003, Regional Counsel at the VA determined
that Mr. Rhone’s VA compensation benefits were not sub-
ject to garnishment. Veterans Court Decision, 2021 WL
2678674, at *2; Appx. 143–44. As a result, in August 2003,
a VA regional office (RO) issued a decision determining
that Mr. Rhone’s “compensation benefits were erroneously
withheld,” Appx. 138, and that Mr. Rhone would be reim-
bursed for “all benefits previously withheld,” Appx. 140.
Mr. Rhone was reimbursed for $27,664 in August 2003.
Appx. 117.
The conflicting decisions on garnishment led to further
consideration by the VA. In January 2005, the VA’s Office
of Regional Counsel ultimately determined that “[the] VA
must comply with the validly served Order awarding Jo
Anne Rhone permanent alimony of 40% of the veteran’s
military retirement pay.” Appx. 122. A VA RO notified
Mr. Rhone as to this determination and resumed garnish-
ing his disability compensation in March 2005. Appx. 43,
46. Mr. Rhone objected and appealed. Veterans Court De-
cision, 2021 WL 2678674, at *2; Appx. 43, 117–21.
Mr. Rhone continued his appeal even after Mrs. Rhone
passed away in November 2005, ending the terms of the
Divorce Decree for alimony payments. Appx. 43.
Mr. Rhone’s appeal led to three rounds of Board decisions
and remands by the Veterans Court. Veterans Court Deci-
sion, 2021 WL 2678674, at *2 (discussing remands from the
Veterans Court in March 2011, December 2012, and Octo-
ber 2018).
Following the Veterans Court’s remand in 2018, the
Board issued the February 2020 decision at issue in this
appeal. Id.; Appx. 36–54. Relevant here, the Board found
that the State Court’s November 1991 order to the VA was
“valid on its face” and the April 1990 order provided for
“permanent periodic alimony.” Appx. 36. The Board
Case: 22-1360 Document: 26 Page: 6 Filed: 11/17/2022
6 RHONE v. MCDONOUGH
distinguished Supreme Court cases addressing the division
of community property, rather than alimony, and deter-
mined that the VA legally garnished Mr. Rhone’s disability
compensation under 42 U.S.C. § 659(a) and (h)(1)(A)(ii)(V).
Appx. 37, 46, 51–52. The Board also determined that it
lacked authority to review the state court garnishment or-
der, as this was “the province of state and federal courts,
and not [the] VA.” Appx. 52–53.
Mr. Rhone appealed the February 2020 Board decision
to the Veterans Court. Veterans Court Decision, 2021 WL
2678674, at *1. Affirming the Board, the Veterans Court
determined that 42 U.S.C. § 659(a) and (h)(1)(A)(ii)(V) “au-
thorize[] [the] VA to withhold a portion of a veteran’s VA
disability payment for alimony or child support pursuant
to legal process when a veteran has waived a portion of mil-
itary retirement pay to receive VA benefits.” Veterans
Court Decision, 2021 WL 2678674, at *4. The Veterans
Court explained that, “[b]ecause Mr. Rhone waived a por-
tion of his military retirement pay to receive VA disability
benefits, those benefits are not exempt from apportionment
for the purpose of alimony payment under 38 U.S.C.
§ 5301(a)(1).” Id. The Veterans Court also determined that
the VA lacks jurisdiction to “decide all questions of law and
fact” associated with a state garnishment order because
garnishment is a matter of state law. Id. at *5 (quoting 38
U.S.C. § 511(a)). This appeal followed.
DISCUSSION
Our authority to review decisions of the Veterans Court
is limited by statute. Goodman v. Shulkin, 870 F.3d 1383,
1385 (Fed. Cir. 2017). Our review is limited to legal chal-
lenges regarding the “validity of any statute or regulation
or any interpretation thereof . . . , and to interpret consti-
tutional and statutory provisions, to the extent presented
and necessary to a decision.” 38 U.S.C. § 7292(c). We may
review “a challenge to a factual determination” or “a chal-
lenge to a law or regulation as applied to the facts of a
Case: 22-1360 Document: 26 Page: 7 Filed: 11/17/2022
RHONE V. MCDONOUGH 7
particular case” only if the appeal presents a constitutional
issue. Id. § 7292(d)(2). We must affirm a Veterans Court
decision unless it is “(A) arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law; (B) con-
trary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limita-
tions, or in violation of a statutory right; or (D) without ob-
servance of procedure required by law.” Id. § 7292(d)(1).
I
We first consider whether the VA is statutorily author-
ized to withhold disability compensation for court-ordered
alimony payments. We determine that it is.
Under 38 U.S.C. § 5301(a)(1), VA benefits are generally
exempt from any legal or equitable process, “except to the
extent specifically authorized by law.” One such authori-
zation is found in 42 U.S.C. § 659, which provides an ex-
ception for alimony and child support:
Notwithstanding any other provision of law . . . , ef-
fective January 1, 1975, moneys (the entitlement to
which is based upon remuneration for employ-
ment) due from, or payable by, the United
States . . . to any individual . . . shall be subject, in
like manner and to the same extent as if the United
States . . . were a private person, to withholding in
accordance with State law . . . and to any other le-
gal process brought, by a State agency administer-
ing a program under a State plan approved under
this part or by an individual obligee, to enforce the
legal obligation of the individual to provide child
support or alimony.
42 U.S.C. § 659(a). Thus, § 659(a) allows withholding of
money “based upon remuneration for employment” to pro-
vide alimony obligated under State law. Moreover, money
“based upon remuneration for employment” includes
Case: 22-1360 Document: 26 Page: 8 Filed: 11/17/2022
8 RHONE v. MCDONOUGH
disability compensation from the VA under
§ 659(h)(1)(A)(ii)(V):
[M]oneys payable to an individual which are con-
sidered to be based upon remuneration for employ-
ment . . . consist of . . . compensation for a service-
connected disability paid by the Secretary [of Veter-
ans Affairs] to a former member of the Armed
Forces who is in receipt of retired or retainer pay if
the former member has waived a portion of the re-
tired or retainer pay in order to receive such com-
pensation[.]
42 U.S.C. § 659(h)(1)(A)(ii)(V) (emphasis added). Accord-
ingly, if a veteran has waived a portion of his military re-
tirement pay in order to receive disability compensation,
§ 659(a) and (h)(1)(A)(ii)(V) authorize the VA to withhold
disability compensation for alimony payments. The Board
found that Mr. Rhone had in fact elected to make such a
waiver, making his case fall within the plain language of
§ 659. Appx. 48, 52.
Mr. Rhone argues that § 659 must be read in light of
the Uniformed Services Former Spouses’ Protection Act
(USFSPA), 10 U.S.C. § 1408, which was enacted after
§ 659. 3 Specifically, Mr. Rhone argues that § 1408(d)(1)
3 The USFSPA, § 1408, was enacted in response to
the Supreme Court’s decision in McCarty v. McCarty,
which held that “federal law [on military retirement] pre-
cludes a state court from dividing military nondisability re-
tired pay pursuant to state community property laws.” 453
U.S. 210, 211, 236 (1981). The USFSPA superseded
McCarty by adding § 1408(c)(1), which permits a state
court to treat a portion of a veteran’s retired pay as “divisi-
ble property, i.e., community property divisible upon di-
vorce.” See Howell v. Howell, 137 S. Ct. 1400, 1403 (2017)
Case: 22-1360 Document: 26 Page: 9 Filed: 11/17/2022
RHONE V. MCDONOUGH 9
requires alimony to be paid from “disposable retired pay,”
which does not include disability compensation, and there-
fore § 659 “cannot be applied separately and independently
from § 1408.” Appellant’s Br. at 9–10. He further argues
that this case is governed by the Supreme Court decisions
in McCarty v. McCarty, 453 U.S. 210 (1981); Mansell v.
Mansell, 490 U.S. 581 (1989); and Howell v. Howell, 137 S.
Ct. 1400 (2017). Appellant’s Br. at 4, 6–8, 11–12. We dis-
agree that § 1408 or the cited Supreme Court cases control
here because the cited authority relates to the ability to
treat military retirement pay as community property and
does not speak to whether alimony may be withheld from
disability compensation, the latter being governed by
§ 659. We address both arguments in turn.
Section 1408(d)(1) authorizes the Secretary of the ap-
propriate military department to make payments from a
servicemember’s “disposable retired pay” to satisfy court-
ordered alimony:
After effective service on the Secretary concerned
of a court order providing for the payment of child
support or alimony . . . the Secretary shall make
payments (subject to the limitations of this section)
from the disposable retired pay of the member to
the spouse or former spouse . . . in an amount suf-
ficient to satisfy the amount of child support and
(citing § 1408(c)(1), (a)(4)(A)(ii)). In light of the USFSPA,
states may treat the nonwaived portion of a veteran’s re-
tired pay as community property. § 1408(a)(4)(A)(ii); see
Howell, 137 S. Ct. at 1404 (explaining that the USFSPA
“did not gran[t] the States the authority to treat total re-
tired pay as community property” because “Congress ex-
cluded from its grant of authority the disability-related
waived portion of military retirement pay” (alteration in
original) (internal quotations and citation omitted)).
Case: 22-1360 Document: 26 Page: 10 Filed: 11/17/2022
10 RHONE v. MCDONOUGH
alimony set forth in the court order and, with re-
spect to a division of property, in the amount of dis-
posable retired pay specifically provided for in the
court order.
10 U.S.C. § 1408(d)(1) (emphasis added). Under
§ 1408(a)(4)(A)(ii), “disposable retired pay” is defined as a
veteran’s “total monthly retired pay . . . less amounts
which . . . are deducted from the retired pay . . . as a result
of a waiver of retired pay required by law in order to receive
[disability benefits].” § 1408(a)(4)(A)(ii). While
§ 1408(d)(1) regulates withholding from a certain portion
of retirement pay—defined as disposable retired pay—
nothing in § 1408(d)(1) forecloses the Secretary of the VA
from withholding alimony obligations from disability com-
pensation. As explained above, that separate matter is
governed by § 659.
Mr. Rhone’s reliance on § 1408(d)(1) ignores the fact
that § 1408 and § 659 are directed to different departments
and different sources of money. Section 1408 is in Title 10
of the U.S. Code, which governs the Armed Forces, and au-
thorizes the Secretary of the appropriate military depart-
ment to deduct child support, alimony, or community
property from a member’s disposable retired pay—i.e., the
pay earned for completing a prescribed time in service—in
response to a court order. See § 1408(d)(1). In contrast,
§ 659 is in Title 42 and authorizes the Secretary of the VA
to garnish a member’s disability pay—i.e., the pay the
member receives as compensation for a disability—in re-
sponse to a court order. See § 659(a), (h)(1)(A)(ii)(V). A re-
tired service member with a disability may receive both
retired pay and disability compensation, and § 1408(d)(1)
and § 659 work together to ensure that both forms of pay-
ment to the service member are subject to state orders to
pay alimony. Thus, § 1408(d)(1)’s authorization for the
Secretary of the appropriate military department to deduct
alimony from “disposable retired pay” is irrelevant to
whether the Secretary of the VA may withhold alimony
Case: 22-1360 Document: 26 Page: 11 Filed: 11/17/2022
RHONE V. MCDONOUGH 11
from disability compensation under § 659. Under §§ 1408
and 659, alimony may be paid both (1) by the Secretary of
the appropriate military department by deducting from a
member’s disposable retired pay, and (2) by the Secretary
of the VA by garnishing a member’s disability compensa-
tion. Contrary to Mr. Rhone’s arguments, § 1408 is en-
tirely consistent with § 659, and therefore his view that
§ 1408 supersedes § 659 is without merit.
Mr. Rhone’s argument also conflicts with the legisla-
tive history. The Senate Report accompanying the
USFSPA expressly contemplates § 659 and § 1408 operat-
ing together to provide two, parallel methods for enforcing
alimony obligations. S. Rep. No. 97-502, at 20 (1982), as
reprinted in 1982 U.S.C.C.A.N. 1596, 1615. The Senate Re-
port recognizes that § 659 required the government to
honor “garnishment [orders] to enforce delinquent child
support or alimony obligations” for members of the uni-
formed services while § 1408 “will provide a second method
of enforcing such obligations on the part of members of the
uniformed services who are entitled to retired or retainer
pay.” Id. (emphasis added). The Senate Report further
states that “it is not the intent or purpose of the bill to deny
proper parties the use of the enforcement provisions of
[§ 659].” Id. Thus, Congress did not intend § 1408 to pro-
hibit alimony payments from VA disability compensation,
as Mr. Rhone argues.
None of the Supreme Court decisions relied upon by
Mr. Rhone are inconsistent with the above-discussed stat-
utes because those decisions (1) address community prop-
erty, not alimony, and (2) never address § 659’s impact on
disability compensation. In McCarty—a pre-USFSPA de-
cision—the Supreme Court held that “federal law [on mili-
tary retirement] precludes a state court from dividing
military nondisability retired pay pursuant to state com-
munity property laws.” McCarty, 453 U.S. at 211, 236 (em-
phasis added). McCarty was subsequently superseded in
part by the USFSPA, which permits treating the
Case: 22-1360 Document: 26 Page: 12 Filed: 11/17/2022
12 RHONE v. MCDONOUGH
nonwaived portion of military retirement pay as commu-
nity property. See supra note 3.
The Supreme Court’s post-USFSPA decisions in Man-
sell and Howell also focused on community property rather
than alimony, and considered the limits of § 1408, not
§ 659. In Mansell, the Supreme Court held that state
courts may not “treat as property divisible upon divorce
military retirement pay that has been waived to receive
veterans’ disability benefits.” Mansell, 490 U.S. at 595
(emphasis added). And in Howell, the Court considered
whether a State could first “treat[] as community property
. . . a portion of the veteran’s total retirement pay” and
then, after the veteran waived a portion of his retirement
pay to receive disability benefits, “increase . . . the amount
the divorced spouse receives each month from the veteran’s
retirement pay in order to indemnify the divorced spouse
for the loss caused by the veteran’s waiver.” Howell, 137
S. Ct. at 1402 (emphasis added). Thus, McCarty, Mansell,
and Howell prohibit treating waived retired pay as divisi-
ble community property. Because these cases address only
community property and say nothing about withholding al-
imony benefits under § 659, they do not prohibit withhold-
ing disability compensation for alimony payments as
Mr. Rhone argues. 4
4 To the extent Mr. Rhone argues that (1) federal
laws preempt the garnishment of disability compensation
for alimony (see Appellant’s Br. at 5–8, 12, 16), or (2) that
McCarty invalidated § 659, and specifically
§ 659(h)(1)(A)(ii)(V) (see Appellant’s Br. at 17), he misap-
plies McCarty, Mansell, and Howell’s community property
analysis to incorporate alimony. None of these cases ad-
dress alimony, and thus cannot preempt or invalidate
§ 659, which is directed only to “child support or alimony”
and by definition excludes community property. See
Case: 22-1360 Document: 26 Page: 13 Filed: 11/17/2022
RHONE V. MCDONOUGH 13
Section § 659 is not in conflict with § 1408 or the Su-
preme Court’s decisions in McCarty, Mansell, and Howell.
As previously stated, § 659 and § 1408 work together so
that alimony may be paid from both a veteran’s disability
compensation and military retirement pay. Accordingly,
the Veterans Court correctly determined that § 659 author-
izes the VA to withhold a portion of a veteran’s VA disabil-
ity compensation for alimony when the veteran has waived
a portion of military retirement pay to receive disability
compensation.
II
Mr. Rhone argues that he is entitled, under 38 U.S.C.
§ 511(a), to review by the Board of the state garnishment
order for alimony. Appellant’s Br. at 26–27. He argues
§ 659(a); Compare Howell v. Howell, 137 S. Ct. at 1403 (ex-
plaining that “divisible property” is “community property
divisible upon divorce”), with § 659(i)(2) (defining “child
support” as “amounts . . . for the support and maintenance
of a child . . . which provides for monetary support, health
care, arrearages or reimbursement, and which may include
other related costs and fees, interest and penalties, income
withholding, attorney's fees, and other relief”), and
§ 659(i)(3)(A), (B)(ii) (defining “alimony” as “periodic pay-
ments of funds for the support and maintenance of the
spouse (or former spouse) of the individual, and (subject to
and in accordance with State law) includes separate
maintenance, alimony pendente lite, maintenance, and
spousal support” and “does not include . . . any payment or
transfer of property or its value by an individual to the
spouse or a former spouse of the individual in compliance
with any community property settlement, equitable distri-
bution of property, or other division of property between
spouses or former spouse”).
Case: 22-1360 Document: 26 Page: 14 Filed: 11/17/2022
14 RHONE v. MCDONOUGH
that the VA’s refusal to undertake such a review violates
his due process rights. Id. We disagree.
We have explained that “[g]arnishment is purely a
creature of state law” that is “routinely provided by state
law for enforcement of court-ordered child support and ali-
mony (a judgment debt).” Millard v. United States, 916
F.2d 1, 3 (Fed. Cir. 1990). Because garnishment is a matter
of state law, any violations of due process “would have been
violated by the [state] court that issued the order, not the
United States which merely complied with that order as it
was required to do.” Id. at 8. Thus, any challenges to the
garnishment order are properly heard in the state that is-
sued the garnishment order.
Because garnishment of alimony is a matter of state
law provided by state courts, § 511(a) does not entitle a vet-
eran to a second opportunity for adjudication of that matter
within the VA system. Section 511(a) states that “[t]he
Secretary shall decide all questions of law and fact neces-
sary to a decision by the Secretary under a law that affects
the provision of benefits by the Secretary to veterans or the
dependents or survivors of veterans.” 38 U.S.C. § 511(a)
(emphasis added). Without a decision by the Secretary, the
Board has no jurisdiction. See Bates v. Nicholson, 398 F.3d
1355, 1365 (Fed. Cir. 2005) (“Section 511(a) does not apply
to every challenge to an action by the VA. . . . [I]t only ap-
plies where there has been a ‘decision by the Secretary.’”
(citing Hanlin v. United States, 214 F.3d 1319, 1321 (Fed.
Cir. 2000))). Because garnishment of alimony is a matter
of state law provided by state courts, it is not a decision “by
the Secretary under a law that affects the provision of ben-
efits by the Secretary.” Cf. id. Indeed, Mr. Rhone agrees
that “[a]ny appellate review, if one takes place at all, is
with the same state court that initially ordered the gar-
nishment of the waived retired pay.” See Appellant’s Br. at
27. Thus, the Veterans Court correctly determined that
Mr. Rhone is not entitled, under § 511(a), to adjudication
by the VA as to the merits of the garnishment order issued
Case: 22-1360 Document: 26 Page: 15 Filed: 11/17/2022
RHONE V. MCDONOUGH 15
by the State Court and affirmed by the State Appellate
Court. 5
CONCLUSION
We have considered Mr. Rhone’s remaining arguments
and do not find them persuasive. For the foregoing rea-
sons, we affirm the decision of the Veterans Court.
AFFIRMED
COSTS
No costs.
5 Mr. Rhone also argues that VA General Counsel
Precedential Opinion 4-97, 1997 WL 34674459 (Jan. 22,
1997), violates his due process rights by foreclosing any re-
view within the VA adjudication system of regional office
decisions relating to state garnishment orders. Appellant’s
Br. at 2, 24–29. Our determination that challenges to a
state garnishment order must be heard in the state that
issued the order remains true regardless of whether or not
Precedential Opinion 4-97 is in effect. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484443/ | 21-1024-cv
Edwards v. McMillen Cap., LLC
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
New York, on the 17th day of November, two thousand twenty-two.
PRESENT:
ROBERT D. SACK,
RICHARD C. WESLEY,
JOSEPH F. BIANCO,
Circuit Judges.
_____________________________________
Paul Edwards,
Plaintiff-Appellant,
v. 21-1024-cv
McMillen Capital, LLC,
Defendant-Appellee.
_____________________________________
FOR PLAINTIFF-APPELLANT: Paul Edwards, pro se, Cromwell, CT.
FOR DEFENDANT-APPELLEE: Ander S. Knott, Knott & Knott, LLC,
Cheshire, CT.
Appeal from a judgment of the United States District Court for the District of Connecticut
(Underhill, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Appellant Paul Edwards, proceeding pro se, appeals the district court’s judgment
dismissing his claims. Based on alleged misconduct connected to a 2012 mortgage loan, Edwards
sued defendant McMillen Capital, LLC, (“McMillen”) in February 2018, asserting that McMillen
violated the Truth in Lending Act, 15 U.S.C. §§ 1601–1667f (“federal TILA”), the Connecticut
Truth in Lending Act, Conn. Gen. Stat. §§ 36a-675–36a-686 (“Connecticut TILA), and the
Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. §§ 42-110a–42-110q (“CUTPA”). He
also brought state law negligence, negligent infliction of emotional distress, and breach of the
implied covenant of good faith and fair dealing claims. The district court granted McMillen’s
motion to dismiss the amended complaint, under Federal Rule of Civil Procedure 12(b)(6), on the
grounds that Edwards’s federal and Connecticut TILA and CUTPA claims were untimely, and his
remaining causes of action did not state a claim for relief. We assume the parties’ familiarity with
the underlying facts and procedural history—which we already addressed in our prior precedential
opinion, see Edwards v. McMillen Capital, LLC, 952 F.3d 32, 33–35 (2d Cir. 2020) (per curiam)—
as well as the issues now on appeal, which we discuss only as necessary to explain our decision to
affirm.
I. Timeliness of Edwards’s TILA and CUPTA Claims
On an appeal from a Rule 12(b)(6) dismissal, this Court reviews a district court’s “legal
conclusions, including its interpretation and application of a statute of limitations . . . de novo.”
City of Pontiac Gen. Emps. Ret. Sys. v. MBIA, Inc., 637 F.3d 169, 173 (2d Cir. 2011). “Although
the statute of limitations is ordinarily an affirmative defense that must be raised in the answer, a
2
statute of limitations defense may be decided on a Rule 12(b)(6) motion if the defense appears on
the face of the complaint.” Ellul v. Congregation of Christian Bros., 774 F.3d 791, 798 n.12 (2d
Cir. 2014). Moreover, “[w]hen a district court determines that equitable tolling is inappropriate,
we review the legal premises for that conclusion de novo, the factual bases for clear error, and the
ultimate decision for abuse of discretion.” DeSuze v. Ammon, 990 F.3d 264, 268 (2d Cir. 2021).
A. Federal and Connecticut TILA
Edwards’s federal and Connecticut TILA claims are time barred. Federal TILA aims to
protect consumers “by assuring a meaningful disclosure of credit terms.” Strubel v. Comenity
Bank, 842 F.3d 181, 186 (2d Cir. 2016) (internal quotation marks and citation omitted). Under
the federal law, many claims must be brought within “one year from the date of the occurrence of
the violation,” although certain actions are subject to a three-year statute of limitations. See 15
U.S.C. § 1640(e). Connecticut TILA’s statute of limitations is the same as the federal limitations
period. Conn. Gen. Stat. § 36a-683(b).
Even under the longer three-year limitations period, Edwards’s claims were brought too
late. The mortgage was executed on April 30, 2012, and Edwards filed his earliest lawsuit in state
court on June 24, 2015, three years and two months later. This suit was not filed until February
2018—significantly later still. Therefore, the federal and Connecticut TILA claims are barred by
the statute of limitations.
Edwards contends that these claims are nevertheless timely because of the “discovery rule,”
which allows the statute of limitations to commence on the date the plaintiff discovered, or
reasonably could have discovered, the alleged violation. Edwards does not challenge the district
court’s determination that the discovery rule applies only to open-end transactions and not closed-
3
end transactions. See, e.g., Latouche v. Wells Fargo Home Mortg. Inc., 752 F. App’x 11, 13 (2d
Cir. 2018) (summary order) (“While this Court has not spoken directly on the issue, among lower
courts in this circuit, [i]t is well-settled law that in closed-end credit transactions, like [a mortgage
loan], the date of the occurrence of violation is no later than the date the plaintiff enters the loan
agreement or, possibly, when defendant performs by transmitting the funds to plaintiffs.” (internal
quotation marks and citation omitted)). Instead, Edwards argues that the district court erred in
concluding that his loan agreement was a closed-end transaction. We find his argument
unpersuasive. The district court correctly held that, because the alleged loan transaction at issue
did not contemplate future disbursals or repeated transactions, it was a closed-end transaction to
which the discovery rule does not apply.
These claims fare no better under the rescission-based statute of limitations. If a creditor
fails to “conspicuously disclose” rescission rights, a consumer has three years to rescind the
transaction. See 15 U.S.C. §§ 1635(a), (f); Conn. Gen. Stat. § 36a-683(e). The three-year
extension is measured from the “date of consummation of the transaction.” 15 U.S.C. § 1635(f).
This is defined as “the time that a consumer becomes contractually obligated on a credit
transaction, a matter decided by reference to state law.” Smith v. Wells Fargo Bank, N.A., 666 F.
App’x 84, 86 (2d Cir. 2016) (summary order) (internal quotation marks and citation omitted)
(finding under Connecticut law that the date of consummation was, at latest, plaintiff’s transmittal
of the executed documents to the lender). Here, Edwards was contractually obligated when he
executed the mortgage documents on April 30, 2012. Therefore, his claims would still be
untimely under the rescission-based statute of limitations.
Finally, the district court correctly determined that there was no basis for equitably tolling
4
the statute of limitations. Equitable tolling is appropriate on a rare occasion where “extraordinary
circumstances prevented a party from timely performing a required act, and . . . the party acted
with reasonable diligence throughout the period he [sought] to toll.” Walker v. Jastremski, 430
F.3d 560, 564 (2d Cir. 2005) (internal quotation marks and citation omitted). Here, Edwards does
not allege any “extraordinary circumstances” warranting equitable tolling, and reasonable
diligence by Edwards would have revealed the alleged violation when he signed the mortgage note
in April 2012.
Accordingly, the federal and Connecticut TILA claims were properly dismissed as time
barred.
B. CUTPA
The CUTPA claim is also time barred. CUTPA prohibits “unfair methods of competition
and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Conn. Gen.
Stat. § 42-110b(a). A plaintiff may not bring a CUTPA claim “more than three years after the
occurrence of a violation.” Conn. Gen. Stat. § 42-110g(f). Edwards’s claim, stemming from the
2012 loan transaction, is clearly beyond this three-year period.
Moreover, the continuing course of conduct doctrine does not toll the statute of limitations
here. State law claims are governed by state tolling rules, see Schermerhorn v. Metro. Transp.
Auth., 156 F.3d 351, 354 (2d Cir. 1998) (per curiam), and Connecticut courts apply the continuing
course of conduct doctrine only where a defendant: “(1) committed an initial wrong upon the
plaintiff; (2) owed a continuing duty to the plaintiff that was related to the alleged original wrong;
and (3) continually breached that duty,” Witt v. St. Vincent’s Med. Ctr., 252 Conn. 363, 370 (2000).
A continuing duty exists where there is “evidence of either a special relationship between the
5
parties . . . or some later wrongful conduct of a defendant related to the prior act [or omission].”
Fichera v. Mine Hill Corp., 207 Conn. 204, 210 (1988).
Here, there are no allegations that suggest Edwards and McMillen were in a special
fiduciary relationship beyond a standard borrower-lender arrangement. See Southbridge Assocs.,
LLC v. Garofalo, 53 Conn. App. 11, 19 (1999) (holding that, because a “lender has the right to
further its own interest in a mortgage transaction and is not under a duty to represent the customer’s
interest,” no fiduciary relationship exists in a borrower-lender relationship). Moreover, although
Edwards seeks to rely on McMillen’s alleged ongoing failure to make the requisite TILA
disclosures after advancements of the loan, that allegation of continuing omission does not
constitute additional misconduct from the time of the loan that would trigger application of this
doctrine. See Flannery v. Singer Asset Fin. Co., 312 Conn. 286, 312–13 (2014) (concluding that
continuing course of conduct doctrine did not apply where plaintiff “has not alleged or pointed to
any evidence of any duty owed by, or further misconduct [or a new omission] on the part of, the
defendant following [the principal] sale”). In sum, the district court correctly determined that no
exceptions to the limitation period apply that would render the CUPTA claim timely, and thus
properly dismissed the CUPTA claim.
II. Remaining State Law Claims
The district court granted McMillan’s motion to dismiss the remaining state law claims—
for negligence, negligent infliction of emotional distress, and breach of the implied covenant of
good faith and fair dealing—concluding that McMillan failed to state plausible claims upon which
6
relief could be granted. We agree.1
As noted above, we review a district court’s dismissal under Rule 12(b)(6) de novo. See
Nicosia v. Amazon.com, Inc., 834 F.3d 220, 230 (2d Cir. 2016). To avoid dismissal, a complaint
must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In
making this plausibility assessment under Rule 12(b)(6), we may consider “facts alleged in the
pleadings, documents attached as exhibits or incorporated by reference in the pleadings[,] and
matters of which judicial notice may be taken . . . .” 2 Samuels v. Air Transp. Loc. 504, 992 F.2d
12, 15 (2d Cir. 1993). In addition, “[w]e liberally construe pleadings and briefs submitted by pro
se litigants, reading such submissions to raise the strongest arguments they suggest.” McLeod v.
Jewish Guild for the Blind, 864 F.3d 154, 156 (2d Cir. 2017) (per curiam) (internal quotation marks
and citation omitted). Our substantive analysis of a state-law claim is governed by the decisions
of a state’s highest court, although we also “look to the rulings of the state’s lower courts as
providing important data points for understanding state law.” Schwab Short-Term Bond Mkt.
Fund v. Lloyds Banking Grp., 22 F.4th 103, 120 (2d Cir. 2021), cert. denied, 142 S. Ct. 2852
(2022).
1
McMillan argues, in the alternative, that these remaining state claims are also untimely. The district
court rejected that argument and determined that, although Edwards brought the claims outside the state’s
three-year statute of limitations for tort actions, he could avail himself of Connecticut’s savings statute to
the extent these claims arose out of the same causes of action asserted in his prior state court proceeding.
See Conn. Gen. Stat. § 52-592. Because we conclude that the district court properly dismissed these
remaining state causes of action for failure to state a plausible claim, we need not address McMillan’s
alternative argument on timeliness.
2
Here, Edwards referenced many documents in his amended complaint, including the mortgage note and
loan commitment letter, and thus the district court properly considered those documents in ruling on the
Rule 12(b)(6) motion.
7
First, the amended complaint did not state a claim for negligence because it failed to
plausibly allege the existence of a duty of care based upon the mortgage agreement. See Grenier
v. Comm’r Transp., 306 Conn. 523, 538–39 (2012). In the alternative, Edwards argues that a duty
of care arises from the doctrine of statutory negligence—Connecticut’s term for negligence per se.
See Webb v. Czyr Const. Co., 172 Conn. 88, 93 n.3 (1976). “Two elements must coexist” before
a plaintiff can recover on the ground of statutory negligence: (1) “a plaintiff must be within the
class of persons for whose benefit and protection the statute in question was enacted”; and (2) “a
plaintiff must prove that the violation of the statute . . . was a proximate cause of his injuries.”
Coughlin v. Peters, 153 Conn. 99, 101 (1965). Edwards asserts that he can establish statutory
negligence because he is a consumer protected under several statutes that aim to prevent the injury
he suffered (i.e., McMillen’s “fraudulent scheme”), such as the Connecticut TILA and CUPTA.
However, as discussed above, we have already concluded these statutory claims are untimely, and
Edwards cannot re-cast these same claims as statutory negligence claims under Connecticut law
to circumvent the limitations period established by those statutes. To the extent Edwards relies
upon a list of other statutes to assert a statutory negligence claim, he has failed to set forth any
allegations that plausibly establish how he was within the class of persons protected by the
particular statute or how a violation of that statute proximately caused his injuries. Thus, the
negligence claim was properly dismissed.
Second, the amended complaint failed to state a claim for negligent infliction of emotional
distress, which requires a plaintiff to show that: “(1) the defendant's conduct created an
unreasonable risk of causing the plaintiff emotional distress; (2) the plaintiff’s distress was
foreseeable; (3) the emotional distress was severe enough that it might result in illness or bodily
8
harm; and (4) the defendant’s conduct was the cause of the plaintiff’s distress.” Carrol v. Allstate
Ins, 262 Conn. 433, 444 (2003). In addition, a plaintiff must allege that the defendant owed the
plaintiff a duty to prevent the plaintiff from experiencing the alleged emotional distress. See
Perodeau v. Hartford, 259 Conn. 729, 754 (2002). Here, the conclusory allegations in the
amended complaint about McMillen threatening to exercise its foreclosure rights neither support
the plausible existence of duty that would give rise to a claim for negligent infliction of emotional
distress, nor do they plausibly support the other elements of such a claim. See Twombly, 550 U.S.
at 555 (emphasizing that, in assessing plausibility under Rule 12(b)(6), we “are not bound to accept
as true a legal conclusion couched as a factual allegation” (quoting Papasan v. Allain, 478 U.S.
265, 286 (1986))); accord Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not suffice.”). Accordingly, the district
court correctly dismissed the claim for negligent infliction of emotional distress.
Finally, the amended complaint did not state a claim for breach of the implied covenant of
good faith and fair dealing. This covenant aims to fulfill the reasonable expectations of the parties
and ensure that “neither party [will] do anything that will injure the right of the other to receive
the benefits of the agreement.” De La Concha of Hartford, Inc. v. Aetna Life Ins., 269 Conn. 424,
432 (2004) (internal quotation marks and citation omitted). Here, although Edwards does assert
that McMillen denied him the fruits of the agreement, he fails to explain how McMillen improperly
denied him the benefits of the contract he signed when the complained-of terms were clear and
explicit. See id. at 441 (rejecting plaintiff’s contention that the defendant violated the implied
covenant where the defendant refused to renew the plaintiff’s lease because the “defendant was
not responsible either for the plaintiff’s failure to pay rent or for its failure to attain [a minimum]
9
gross annual revenue” and thus, the defendant “was entitled, under the express provisions of the
lease, to decline the renewal . . . for those reasons.”). To hold otherwise would “achieve a result
contrary to the clearly expressed terms of [the] contract.” Magnan v. Anaconda Indus., Inc., 193
Conn. 558, 567 (1984). In short, the district court properly dismissed the claim for the breach of
the implied covenant of good faith and fair dealing.
* * *
We have considered Edwards’s remaining arguments and find them to be without merit.
Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
10 | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484448/ | USCA11 Case: 21-13936 Date Filed: 11/17/2022 Page: 1 of 6
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13936
Non-Argument Calendar
____________________
IN RE: DAWN OHLSSON,
Debtor.
___________________________________________________
DAWN OHLSSON,
Plaintiff-Appellant,
versus
U.S. BANK NATIONAL ASSOCIATION,
as Trustee for Structured Asset Securities
Corporation Mortgage Pass-Through Certificates, Series 2006-BCI,
USCA11 Case: 21-13936 Date Filed: 11/17/2022 Page: 2 of 6
2 Opinion of the Court 21-13936
Defendant-Appellee.
____________________
Appeal from the United States District Court
for the Middle District of Florida
D.C. Docket No. 8:20-cv-02724-KKM,
Bkcy No. 8:20-bk-00975-CPM
____________________
Before ROSENBAUM, BRASHER, and ANDERSON, Circuit Judges.
PER CURIAM:
Dawn Ohlsson, a pro se debtor who filed for bankruptcy
protection under Chapter 7, appeals the bankruptcy court’s dismis-
sal of her adversary complaint seeking to invalidate U.S. Bank Na-
tional Association’s (“U.S. Bank”) mortgage lien on her residence.
The district court affirmed the bankruptcy court, and so do we.
In February 2020, Ohlsson filed a voluntary petition for
bankruptcy under Chapter 7. Ohlsson’s primary asset was her res-
idence at 3261 Mayflower Street in Sarasota, Florida. Not long af-
ter Ohlsson filed for bankruptcy, U.S. Bank moved for relief from
the automatic stay based on a state-court 2018 foreclosure judg-
ment concerning the property. According to the attached “Agreed
Uniform Final Judgment of Mortgage Foreclosure,” U.S. Bank held
a “first mortgage lien” on the property, it was owed $316,414.48 as
of September 2018, and it was entitled to recover that amount
USCA11 Case: 21-13936 Date Filed: 11/17/2022 Page: 3 of 6
21-13936 Opinion of the Court 3
through a foreclosure sale of the property. Ohlsson responded by
filing an adversary complaint challenging the validity of U.S. Bank’s
mortgage lien and seeking declaratory relief that the mortgage was
a “legal nullity,” and that U.S. Bank had no enforceable interest in
the property.
The bankruptcy court granted U.S. Bank’s motion to dismiss
the complaint after holding a hearing. The court found that it
lacked jurisdiction over Ohlsson’s complaint under the Rooker-
Feldman1 doctrine because Ohlsson sought relief that would effec-
tively invalidate the final state-court foreclosure judgment. The
court also rejected Ohlsson’s argument that U.S. Bank was re-
quired to file a proof of claim to pursue its interest in the property.
The district court affirmed the bankruptcy court on appeal, and
Ohlsson now appeals to this Court. 2
In bankruptcy appeals, we independently examine the fac-
tual and legal determinations of the bankruptcy court, applying the
same standards of review as the district court. Iberiabank v. Geisen
(In re FFS Data, Inc.), 776 F.3d 1299, 1303 (11th Cir. 2015). We
review determinations of law de novo and factual findings for clear
error. HSSM # 7 Ltd. P’ship v. Bilzerian (In re Bilzerian), 100 F.3d
1 The Rooker-Feldman doctrine is named for District of Columbia Court of
Appeals v. Feldman, 460 U.S. 462, 482 (1983), and Rooker v. Fidelity Trust Co.,
263 U.S. 413, 416 (1923).
2 We disagree that Ohlsson’s notice of appeal was untimely, as U.S. Bank as-
serts, given the lack of a separate judgment. See Fed. R. App. P. 4(a)(7)(A).
USCA11 Case: 21-13936 Date Filed: 11/17/2022 Page: 4 of 6
4 Opinion of the Court 21-13936
886, 889 (11th Cir. 1996). Whether a claim is subject to dismissal
under Rooker-Feldman is a legal question we review de novo.
Behr v. Campbell, 8 F.4th 1206, 1209 (11th Cir. 2021).
The Rooker-Feldman doctrine recognizes that “state court
litigants do not have a right of appeal in the lower federal courts.”
Id. at 1209–10. “[O]nly the Supreme Court can ‘reverse or modify’
state court judgments; neither district courts nor the circuits can
touch them.” Id. at 1210. So when a litigant “come[s] to federal
district court[] complaining of injuries caused by state-court judg-
ments rendered before the district court proceedings commenced
and inviting district court review and rejection of those judg-
ments,” the court lacks jurisdiction. Id. (quotation marks omitted).
The doctrine is “limited” and “narrow,” though: “Only when a los-
ing state court litigant calls on a district court to modify or overturn
an injurious state-court judgment should a claim be dismissed un-
der Rooker-Feldman.” Id. at 1210–11. It is not a “broad means of
dismissing all claims related in one way or another to state court
litigation.” Id. at 1212.
Here, the bankruptcy court did not err in dismissing
Ohlsson’s adversary complaint in part for lack of subject-matter ju-
risdiction under Rooker-Feldman. Ohlsson complained of injuries
caused by the state-court foreclosure judgment and U.S. Bank’s at-
tempts to enforce that judgment. See id. at 1212 (“The injury must
be caused by the judgment itself. Period.”). And she invited “re-
view and rejection” of that ruling by seeking declaratory and in-
junctive relief that would nullify the state court’s judgment that
USCA11 Case: 21-13936 Date Filed: 11/17/2022 Page: 5 of 6
21-13936 Opinion of the Court 5
U.S. Bank held a valid first mortgage lien on the property and was
owed more than $300,000, which it could collect by foreclosure
sale. See id. at 1210–11. Specifically, Ohlsson sought declaratory
relief that would invalidate U.S. Bank’s mortgage lien and injunc-
tive relief that would prevent it from enforcing its interest in the
property. The mere fact that Ohlsson’s complaint was not “styled
as an appeal of a state court judgment” does not matter because
“Rooker-Feldman is not so easily bypassed.” May v. Morgan Cnty.,
878 F.3d 1001, 1005 (11th Cir. 2017); see Behr, 8 F.4th at 1210–11
(“[A]ppeals of state court judgments are barred under Rooker-Feld-
man, no matter how the claims are styled.”).
We agree with Ohlsson insofar as Rooker-Feldman does not
bar her arguments based on U.S. Bank’s failure to file a proof of
claim in the bankruptcy proceeding. But the bankruptcy and dis-
trict courts correctly concluded that she was not entitled to relief
on this issue.
Ohlsson mainly relies on Rule 3002, which provides that a
creditor “must file a proof of claim or interest for the claim or in-
terest to be allowed.” Fed. R. Bankr. P. 3002(a). Yet that same rule
makes clear that the failure to file a proof of claim does not invali-
date a lien that secures the claim. Id. (“A lien that secures a claim
against the debtor is not void due only to the failure of any entity
to file a proof of claim.). Similarly, 11 U.S.C. § 506(d) provides that
a lien securing a claim is not void due simply to the “failure . . . to
file a proof of such claim.” As applied here, these rules mean that
USCA11 Case: 21-13936 Date Filed: 11/17/2022 Page: 6 of 6
6 Opinion of the Court 21-13936
U.S. Bank’s failure to file a proof of claim has no effect on the va-
lidity of its mortgage lien.
Nor was a proof of claim called for in this case. Rule 2002(e)
provides that, in a no-asset Chapter 7 case, the trustee may notify
the creditors that it is unnecessary to file claims. Fed. R. Bankr. P.
2002(e). This reflects that an “allowed claim in bankruptcy . . . per-
mits the claimant to participate in the distribution of the bank-
ruptcy estate.” Ziino v. Baker, 613 F.3d 1326, 1328 (11th Cir. 2010).
So if there are no assets to distribute in bankruptcy, there is no need
to make a claim or interest “allowed” by filing a proof of claim. See
id.; Fed. R. Bankr. P. 3002(a). That’s exactly what happened here.
The Trustee notified creditors that there were no assets to distrib-
ute and that filing a proof of claim was unnecessary. As a result,
U.S. Bank cannot be faulted for not filing a proof of claim. And
again, even if there were assets to distribute, U.S. Bank’s failure to
file a proof of claim would not undermine the validity of its mort-
gage lien or its rights under state law. See 11 U.S.C. § 506(d); Fed.
R. Bankr. P. 3002(a).
For these reasons, we affirm the bankruptcy court’s dismis-
sal of Ohlsson’s complaint.
AFFIRMED. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493078/ | MEMORANDUM OPINION
J. MICHAEL DEASY, Bankruptcy Judge.
I. BACKGROUND
The Court has before it “Debtor’s Objection to Allowance of Certain Portions of the Claim of Internal Revenue Service.” The Internal Revenue Service (“IRS”) has filed a proof of claim on behalf of the *136United States of America asserting an unsecured priority claim of $33,773.27 consisting of taxes and interest and a general unsecured claim of $5,135.64 consisting of penalties. The Debtor objects to the IRS’s claim to the extent that it seeks to treat as priority its interest claims for 1993, 1994, and 1995 and its income tax claims for 1994 and 1995. According to the Debtor, these claims, which total $33,-057.38,1 are not entitled to priority status under 11 U.S.C. § 507(a)(8)(A)(i) because more than three years has elapsed between the due dates for filing the Debtor’s 1993, 1994, and 1995 tax returns (i.e., April 15, 1994, April 15, 1995, and April 15, 1996, respectively) and the filing of the Debtor’s instant bankruptcy case (i.e., September 2, 1999).2 For that reason, according to the Debtor, those portions of the IRS’s claim should be treated as general unsecured claims, not priority claims.
The IRS does not dispute that the Debt- or’s tax liabilities for 1993, 1994, and 1995 became due more than three years prior to the filing of the Debtor’s second bankruptcy petition on September 2, 1999. The IRS argues, however, that the three-year look-back period under section 507(a)(8)(A)(i) of the Bankruptcy Code has been tolled pursuant to 11 U.S.C. § 108(c) and 26 U.S.C. § 6503(h) because the Debt- or filed a prior bankruptcy petition during the three-year period following the tax filing dates for the years in question.3 The Debtor filed an earlier Chapter 13 case on May 3, 1996, which case was dismissed on August 22, 1997 and closed on May 7, 1998.4 Due to the automatic stay contained in 11 U.S.C. § 362(a), the IRS was prevented from the date the petition was filed on May 3, 1996 until the date the Debtor’s case was dismissed on August 22, 1997 from taking action to collect on its *137claims.5 According to the IRS, section 6503(h)(2) of the Internal Revenue Code prevented the IRS from taking collection action for an additional six-month period or until February 21, 1998. The IRS argues that pursuant to section 108(c) of the Bankruptcy Code and section 6503(h)(2) of the Internal Revenue Code, the three-year period contained in section 507(a)(8)(A)(i) should be tolled by the period that the Debtor was previously in bankruptcy plus the additional six-month period. In other words, the Debtor’s time in the prior bankruptcy, plus an additional six-month period, should not be included in determining whether the Debtor’s tax debts were due within three years before the filing of his second bankruptcy petition. In the instant case, the effect of tolling would be to extend the look-back period to November 7, 1994 from the date of September 3, 1996,6 which would result in priority status for some portions of the IRS’s claim.
This Court has jurisdiction of the subject matter and the parties pursuant to 28 U.S.C. §§ 1334 and 157(a) and the “Standing Order of Referral of Title 11 Proceedings to the United States Bankruptcy Court for the District of New Hampshire,” dated January 18, 1994 (DiClerico, C.J.). This is a core proceeding in accordance with 28 U.S.C. § 157(b).
II. DISCUSSION
A. Burden of Proof
The Bankruptcy Appellate Panel for the First Circuit recently outlined the burden of proof in claims objection cases.
Fed.R.Bankr.P. 3001(f) provides that “a proof of claim executed and filed in accordance with these rules shall constitute prima facie evidence of the validity and amount of the claim.” If a debtor offers substantial evidence to support its objection to a claim, the claimant is required to come forward with evidence to support its claims, In re Hemingway Transport, Inc., 993 F.2d 915, 925 (1st Cir.1993), cert. denied, 510 U.S. 914, 114 S.Ct. 303, 126 L.Ed.2d 251 (1993), and bears the burden of proving its claims by a preponderance of the evidence. In re WHET, Inc., 33 B.R. 424, 437 (Bankr.D.Mass.1983).
Long v. Matrix Capital Bank (In re Long), BAP No. MB 99-019 (1st Cir. BAP Mar. 31, 2000). It is undisputed that the IRS filed an amended proof of claim on November 15, 1999 asserting a total claim of $38,908.81. On December 3, 1999, the Debtor objected to portions of the IRS’s claim as outlined above. Because the Debtor has offered substantial evidence to support his objection to portions of the IRS’s claim, the IRS must come forward with evidence to support its claim. As indicated by the First Circuit BAP, the IRS bears the burden of proving its claims by a preponderance of the evidence. See id.
B. Treatment of 1993 Interest Claim
The IRS conceded at the hearing on the Debtor’s objection to portions of the IRS’s proof of claim that its claim for interest with respect to the Debtor’s 1993 tax liabil*138ity should be treated as a general unsecured claim. The Debtor’s 1993 tax return was due by April 15, 1994. The IRS assessed liability on May 16, 1994. Pursuant to section 507(a)(8)(A)(i) of the Bankruptcy Code, the IRS’s claim with respect to the Debtor’s 1993 taxes would be entitled to priority status so long as the Debtor filed for bankruptcy no later than April 14, 1997. The Debtor filed the instant case on September 2, 1999. Even if the Court were to find that tolling applied pursuant to section 108(c) of the Bankruptcy Code and section 6503(h) of the Internal Revenue Code and that the IRS was prevented from collecting the 1993 liability from the Debtor for 477 days during the Debtor’s first bankruptcy case from May 3, 1996 until August 22, 1997 and then for an additional six-month period afterward, the 1993 liability would not fall within the three-year look-back period as tolled. The Debtor’s 1993 tax return was due on April 15, 1994, which does not fall after the extended look-back deadline of May 6, 1995, or the even further extended deadline of November 7, 1994. In other words, even if tolling were to apply (either during the period of the Debtor’s prior bankruptcy or during that period plus an additional six-month period), the Debtor’s 1993 tax return was still due before either of these extended look-back periods. Accordingly, the IRS’s claim in the amount of $533.31 for interest on the Debtor’s 1993 income tax liability should be treated as a general unsecured claim.
C. Treatment of 1994 Tax and Interest Claim
The IRS contends that the Debt- or’s liability for taxes and interest for 1994 in the total amount of $15,601.96 should be treated as priority due to the tolling of the three-year look-back period. In order to treat its 1994 claim as priority, the IRS argues that the three-year look-back period should be tolled both by the period of the Debtor’s first bankruptcy case and by the six-month period contained in the Internal Revenue Code.
1. Tolling During Period of Prior Bankruptcy
Section 108(c) of the Bankruptcy Code provides for the suspension of certain non-bankruptcy statutes of limitations with respect to actions against a debtor in bankruptcy. See West v. United States (In re West), 5 F.3d 423, 425 (9th Cir.1993). At issue in this case is whether section 108(c) of the Bankruptcy Code and section 6503(h) of the Internal Revenue Code work together to toll the three-year look-back period contained in section 507(a) (8) (A) (i). The United States District Court for the District of New Hampshire recently affirmed a decision by Chief Judge Mark W. Vaughn of this Court on the issue of whether the three-year priority period under section 507(a)(8)(A)(i) is tolled during the pendency of a debtor’s prior bankruptcy case. See Young v. United States, Civ. No. 99-325-M, slip. op. (D.N.H. Mar. 20, 2000), aff'g Young v. United States (In re Young), Bk. No. 97-10848-MWV, Adv. No. 98-1096-MWV, slip. op. (Bankr.D.N.H. May 5, 1999). The District Court affirmed Judge Vaughn’s holding that the three-year look-back period under section 507(a)(8)(A)(i) is tolled by the length of time the debtor was previously in bankruptcy stating that Judge Vaughn took the “majority, and better reasoned, approach.” Young, slip op. at 1. Judge Vaughn adopted the IRS’s position that Congress’s intent to provide priority treatment to tax claims would be frustrated unless tolling applied. Young, slip. op. at 4. In addition, Judge Vaughn found that discharging the debt “by simply following the literal construction of sections 507(a)(8)(A) and 523(a)(1)(A) would be an absurd consequence unintended by Congress and would allow debtors to manipulate the bankruptcy system.” Id. at 5. See also Palmer v. Internal Revenue Service (In re Palmer), 228 B.R. 880 (6th Cir. BAP 1999) (collecting cases and presenting a recent discussion of the issue). For these reasons, Judge Vaughn held that the *139three-year look-back period under section 507(a)(8)(A)® should be tolled during the pendency of a debtor’s prior bankruptcy case. This Court will adopt Judge Vaughn’s reasoning and holding as affirmed by the District Court.7
2. Additional Six-Month Tolling
Neither Judge Vaughn nor the District Court ruled on the issue of whether the three-year look-back period under section 507(a)(8)(A)® is tolled for the additional six-month period provided by section 6503(h)(2) of the Internal Revenue Code. That issue is ripe for review in the instant case because the Debtor’s 1994 tax liability will be treated as priority if the three-year look-back period is tolled the additional six months; however, the Debtor’s liability will not be treated as priority if the period is not tolled the additional six months.
The IRS argues that common sense dictates that the priority period should be tolled during the additional six-month period when the IRS is prevented from taking collection action by section 6503(h)(2) of the Internal Revenue Code. The Debtor argues that the six-month period set forth in the Internal Revenue Code should have no effect whatsoever on the three-year look-back period. In support of its position, the IRS cites a Senate Report discussing an amendment to section 108(c), which provides:
In the case of Federal tax liabilities, the Internal Revenue Code suspends the statute of limitations on a tax liability of a taxpayer from running while his assets are in the control or custody of a court and for 6 months thereafter.... The amendment to [section 108(c) of the Bankruptcy Code] applies this rule in a title 11 proceeding. Accordingly, the statute of limitations on collection of a nondischargeable Federal tax liability of a debtor will resume running after 6 months following the end of the period during which the debtor’s assets are in the control or custody of the bankruptcy court. This rule will provide the Internal Revenue Service adequate time to collect nondischargeable taxes following the end of the title 11 proceedings.
S.Rep. No. 95-989, at 30-31 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5816-17. See also Waugh v. Internal Revenue Service (In re Waugh), 109 F.3d 489, 493 (8th Cir.1997); Palmer, 228 B.R. at 885.
The Ninth Circuit Court of Appeals is one of the few courts that has directly addressed the issue presented by the instant case. It concluded that the six-month extension period contained in section 6503(h)(2) of the Internal Revenue Code should also be incorporated through section 108(c) of the Bankruptcy Code to toll the running of the priority period. See West v. United States (In re West), 5 F.3d 423 (9th Cir.1993). The Ninth Circuit explained its reasoning as follows.
The six-month extension illustrates a legislative recognition that interruption in collection activity necessitates additional time once the IRS is again free to pursue tax debtors. Although the legislative history is bereft of reasons for granting the extension, common sense dictates that such a period was given in order to provide the IRS with sufficient time to restart and refocus its collection efforts once able to do so. The legislative history of § 108(c), which incorporate § 6503, implicitly acknowledges this purpose ... Adding six months to the priority period in the case of successive bankruptcy petitions preserves this intent.
West, 5 F.3d at 427. The Court finds this reasoning persuasive. Accordingly, the Court holds that the three-year look-back period under section 507(a)(8)(A)® of the Bankruptcy Code is also tolled by the additional six-month period contained in section 6503(h)(2) of the Internal Revenue Code. For that reason, the IRS’s claim in *140the amount of $15,601.96 relating to the Debtor’s 1994 tax liability is entitled to priority status.
D. Treatment of 1995 Tax and Interest Claim
Without tolling, the IRS’s claim with respect to the Debtor’s 1995 taxes would be entitled to priority status so long as the Debtor filed for bankruptcy no later than April 14, 1999. However, the Debtor filed the instant case on September 2, 1999. Because the Court has ruled that tolling applies pursuant to section 108(c) of the Bankruptcy Code and section 6503(h)(2) of the Internal Revenue Code, the Debtor’s 1995 liability falls within the extended three-year look-back period under section 507(a)(8)(A)(i). Accordingly, the IRS’s claim in the amount of $16,922.11 for the Debtor’s 1995 tax liability should be treated as a priority claim.
III. CONCLUSION
For the reasons discussed above, the Court holds that pursuant to 11 U.S.C. § 108(c) and 26 U.S.C. § 6503(h) the three-year look-back period contained in 11 U.S.C. § 507(a)(8)(A)© should be tolled during the pendency of a debtor’s prior bankruptcy case. In addition, the Court holds that the six-month period contained in 26 U.S.C. § 6503(h)(2) serves as an additional period of tolling. In light of the Court’s holdings, the IRS’s 1993 claim in the amount of $533.31 should be treated as a general unsecured claim and its 1994 and 1995 claims in the total amount of $32,524.07 should be treated as priority claims. The other elements of the IRS’s claim that were not contested by the Debt- or should be treated in accordance with the IRS’s proof of claim. This opinion constitutes the Court’s findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052. The Court will issue a separate order consistent with this opinion.
. The IRS’s proof of claim, POC No. 7, includes the following itemization of these portions of its claim:
Kind of Tax Period Date Tax Tax Assessed Tax Due Interest to Petition Date Total
Income 12/31/1993 5/16/1994 $ 0.00 $ 533.31 $ 533.31
Income 12/31/1994 4/10/1995 $10,698.00 $4,903.96 $15,601.96
Income 12/31/1995 5/20/1996 $12,719.00 $4,203.11 $16,922.11
. Section 507(a)(8)(A)(i) of the Bankruptcy Code provides as follows:
(a) The following expenses and claims have priority in the following order:
(8) Eighth, allowed unsecured claims of governmental units; only to the extent that such claims are for—
(i) for a taxable year ending on or before the date of the filing of the petition for which a return, if required, is last due, including extensions, after three years before the date of the filing of the petition.
11 U.S.C. § 507(a)(S)(A)(i).
. Section 108(c) of the Bankruptcy Code provides:
(c) Except as provided in section 524 of this title, if applicable nonbankruptcy law ... fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor ..., and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of—
(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or
(2) 30 days after notice of the termination or expiration of the stay under section 362, 922, 1201, or 1301 of this title, as the case may be, with respect to such claim.
11 U.S.C. § 108(c). The Internal Revenue Code provides at section 6503(h):
(h) The running of the period of limitations provided in sections 6501 and 6502 on the making of assessments or collection shall, in a case under title 11 of the United States Code, be suspended for the period during which the Secretary is prohibited by reason of such case from making the assessment or from collecting and—
(1) for assessment, 60 days thereafter, and
(2) for collection, 6 months thereafter.
26 U.S.C. § 6503(h).
.The case number of the prior case is Bk. No. 96-11219-MWV. The Debtor’s Chapter 13 plan in that case was confirmed on November 15, 1996. In accordance with the Debtor’s plan, the IRS received payments of *137approximately $5,200 before that case was dismissed with the Debtor's consent.
. Section 362(c) of the Bankruptcy Code provides:
(c) Except as provided in subsections (d),
(e), and (f) of this section—
(1) the stay of an act against property of the estate under subsection (a) of this section continues until such property is no longer property of the estate; and
(2) the stay of any other act under subsection (a) of this section continues until the earliest of—
(A) the time the case is closed; •
(B) the time the case is dismissed; or
(C) if the case is ... a case under chapter 13 of this title, the time a discharge is granted or denied.
11 U.S.C. § 362(c).
. If the statute were tolled only by the length of the Debtor's prior bankruptcy case until dismissal, the look-back period would be extended to May 6, 1995. The additional six-month period extends the deadline to November 7, 1994.
. The Court notes that the District Court decision has been appealed by the debtors to the United States Appeals Court for the First Circuit. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493079/ | MEMORANDUM OPINION
m. bruce McCullough,
Bankruptcy Judge.
The Chapter 11 bankruptcy trustee (hereafter “the Trustee”) of Allegheny Hospitals, Centennial (hereafter “Centennial”), one of the above-captioned debtors, seeks in the instant adversary proceeding to avoid as fraudulent, pursuant to 11 U.S.C. § 544(b)(1) and .12 Pa.C.S.A. §§ 5104(a)(2) and 5105, transfers made and obligations incurred by the predecessor of said debtor that allegedly benefitted, either directly or indirectly, the predecessor of Philadelphia Health Care Trust (hereafter “PHCT”), defendant herein. PHCT now moves, pursuant to Fed. R.Bankr.P. 7012(b) and Fed.R.Civ.P. 12(b)(6), for the dismissal of the Trustee’s adversary complaint in its entirety.
STATEMENT OF FACTS1
Effective as of October 31, 1996, three nonprofit subsidiary corporations of PHCT’s predecessor, Graduate Health Systems, Inc. (hereafter “GHSI”), which subsidiaries operated four hospitals (hereafter “the GHSI Subsidiaries”), were merged into SDN, Inc. (hereafter “SDN”), which corporation was (a) then a subsidiary of another of the above-captioned debtors, Allegheny Health, Education and Research Foundation (“AHERF”), (b) a shell corporation without any assets or liabilities prior to October 31, 1996, and (c) a predecessor to Centennial. For the sake of clarity, and because it will not affect the Court’s subsequent analysis, SDN shall hereafter be referred to as Centennial, GHSI shall hereafter be referred to as PHCT, and the GHSI Subsidiaries shall hereafter be referred to as the PHCT Subsidiaries.
Although Centennial ultimately obtained ownership of the PHCT Subsidiaries from PHCT via the aforesaid merger (hereafter “the Merger”), PHCT and Centennial orig*161inally contemplated, as reflected in Resolutions adopted on August 5, 1996, that Centennial, rather than absorbing the assets and liabilities of the PHCT Subsidiaries via a merger, would be substituted as the sole member of, or would obtain from PHCT all of the shares in, each of the PHCT Subsidiaries. On October 2, 1996, PHCT and Centennial agreed, as reflected in a document to which the Trustee refers in his complaint as an Amendment to Agreement (hereafter “the Amendment”), to, inter alia, amend the manner in which Centennial obtained the PHCT Subsidiaries so that such acquisition took the form of a merger.
As part of the Merger, PHCT and Centennial agreed to additional terms, to wit that:
(a) Centennial would provide consideration in several forms to Health Systems International, Inc. (hereafter “HSI”), as well as to an officer of HSI Management Company (hereafter “HSIM”), all of which consideration the parties appear to agree was provided in return for the termination, at or about the time of the Merger, of a preexisting management agreement between PHCT and HSIM;
(b) Centennial would indemnify PHCT to the extent that PHCT either (i) performed on a preexisting guaranty for certain preexisting indebtedness of the PHCT Subsidiaries, or (ii) paid other particular obligations as set forth in the Amendment, including the consideration, as described in the preceding paragraph, that was to be provided by Centennial to HSI and the officer of HSIM;
(c) Centennial would assume liability for, and indemnify PHCT for PHCT’s future payment of, certain obligations of PHCT that, according to a Memorandum of Agreement dated October 31, 1996 (hereafter “the Memorandum of Agreement”), had previously been undertaken by PHCT on behalf of the PHCT Subsidiaries;
(d) PHCT would offset an existing inter-company receivable due to it from certain of the PHCT Subsidiaries (hereafter “the Intercompany Receivable”) with an existing intercom-pany debt that it owed to another of said subsidiaries (hereafter “the In-tercompany Debt”), and that PHCT, after reconciling said intercompany accounts, would either pay to Centennial any net intercompany debt due from itself or would forgive any net intercompany receivable due to itself;
(e) PHCT would contribute $25 million to Centennial, $10 million of which would be paid on October 31, 1996, and $15 million of which would be paid into an escrow account (hereafter “the Escrow Account” and “the Escrow Funds”) on the same date, after which said $15 million would be released in annual $5 million increments to Centennial; and
(f) PHCT would have the right of reimbursement from any funds remaining in the Escrow Account at any particular time for any indemnification claim that PHCT might have against Centennial (hereafter “the Offset Agreement”).
The Trustee now contends that many of the terms just described, or, more accurately, the execution or operation of such terms, constituted transfers made or obligations incurred by Centennial that benefitted, either directly or indirectly, PHCT, which transfers and obligations the Trustee contends he may now avoid as fraudulent pursuant to 11 U.S.C. § 544(b)(1) and 12 Pa.C.S.A. §§ 5104(a)(2) and 5105. In particular, the Trustee appears to attack as a fraudulent conveyance:
(a) Centennial’s absorption of the liabilities of the PHCT Subsidiaries as of October 31, 1996, at least to the ex*162tent that the amount of said liabilities exceed the value of the assets of the PHCT Subsidiaries as of the same date;
(b) Centennial’s incurrence of the obligation to provide consideration to HSI and the officer of HSIM;
(c) Centennial’s incurrence of the numerous indemnification obligations to PHCT;
(d) Centennial’s assumption of the obligations of PHCT that, according to the Memorandum of Agreement, had previously been undertaken by PHCT on behalf of the PHCT Subsidiaries;
(e) PHCT’s elimination of the Intercom-pany Debt, which elimination the Trustee alleges benefited PHCT in an amount approximating $52 million, notwithstanding (i) PHCT’s simultaneous elimination of the Inter-company Receivable, and (ii) that PHCT forgave, after reconciliation of the intercompany accounts, a net in-tercompany receivable due to PHCT in the approximate amount of $3.4 million; and
(f) The Offset Agreement.2
*163As a remedy to accompany a determination that the preceding transfers and obligations constitute fraudulent conveyances, the Trustee seeks, inter alia, a monetary recovery against PHCT for the difference between the value of the assets of the PHCT Subsidiaries merged into Centennial via the Merger and the amount of debt incurred by Centennial via the Merger, said debt comprising both the preexisting liabilities of the PHCT Subsidiaries absorbed by Centennial via the Merger and those additional obligations placed upon Centennial as a result of the same transaction.
PHCT seeks dismissal of the entirety of the Trustee’s adversary complaint under Fed.R.Civ.P. 12(b)(6) for several reasons, to wit that:
(a) The Trustee, as a matter of law, cannot succeed on his first count against PHCT, wherein the Trustee proceeds under 12 Pa.C.S.A. § 5105, because, according to PHCT, Centennial lacked creditors prior to any of the alleged conveyances for which the Trustee now seeks avoidance;
(b) The Trustee, as a matter of law, cannot succeed on his causes of action proceeding under either 12 Pa. C.S.A. §§ 5104(a)(2) or 5105 because, according to PHCT, Centennial neither transferred property nor incurred an obligation that can be the subject of a fraudulent conveyance action against PHCT under either 12 Pa.C.S.A. §§ 5104(a)(2) or 5105; and
(c) The Trustee, as a matter of law, cannot, pursuant to 11 U.S.C. § 550(a), recover from PHCT the relief that the Trustee seeks as a remedy for the alleged fraudulent conveyances.
The Court will now proceed to address each of the three grounds upon which PHCT seeks dismissal of the Trustee’s complaint.
DISCUSSION
The Trustee cites as statutory authority for his fraudulent conveyance actions against PHCT 11 U.S.C. § 544(b)(1) and 12 Pa.C.S.A. §§ 5104(a)(2) and 5105. 11 U.S.C. § 544(b)(1) allows a bankruptcy trustee to “avoid any transfer of an interest of the debtor in property ... that is voidable under applicable [nonbankruptcy] law by a creditor holding an unsecured claim [against said debtor’s bankruptcy estate].” 11 U.S.C.A. § 544(b)(1) (West 1999). 12 Pa.C.S.A. § 5104(a)(2) provides, in pertinent part, that:
A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(ii) intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.
12 Pa.C.S.A. § 5104(a)(2) (Purdon’s 1999). 12 Pa.C.S.A. § 5105 provides that:
A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the *164debtor became insolvent as a result of the transfer or obligation.
12 Pa.C.S.A. § 5105 (Pqrdon’s 1999).
I. Whether the Trustee is precluded from proceeding, against PHCT under 12 Pa.C.S.A. § 5105 for lack of standing, the resolution of which issue turns upon whether Centennial lacked creditors prior to any of the alleged conveyances for which the Trustee seeks avoidance under § 5105?
11 U.S.C. § 544(b)(1) allows the Trustee to pursue his action under 12 Pa. C.S.A. § 5104(a)(2) and 5105 against PHCT for the avoidance of the conveyances alleged by the Trustee to have been made provided that a creditor of Centennial exists, or creditors of Centennial exist, as of Centennial’s petition filing date who then possessed identical causes of action against PHCT. The Court understands PHCT to concede that a creditor of Centennial exists, or creditors of Centennial exist, as of Centennial’s petition filing date who then possessed such causes of action against PHCT under 12 Pa.C.S.A. § 5104(a)(2). Such concession by PHCT is understandable given that the only requirement that a creditor must satisfy to have standing to proceed under 12 Pa. C.S.A. § 5104(a)(2) is the mere existence of a claim against a debtor; put differently, standing for a creditor under § 5104(a)(2) does not depend upon whether said creditor’s claim arose before or after the conveyance that is sought to be avoided by said creditor. In light of this concession by PHCT, the Trustee likewise possesses standing to pursue his fraudulent conveyance action against PHCT pursuant to 12 Pa.C.S.A. § 5104(a)(2).
However, PHCT contends that there does not exist as of Centennial’s petition filing date a creditor of Centennial who then possessed a cause of action under 12 Pa.C.S.A. § 5105 against PHCT for the avoidance, of the conveyances alleged by the Trustee to have been made. PHCT contends as much because (a) a creditor can only proceed under 12 Pa.C.S.A. § 5105 if said creditor possesses a claim against a debtor that arose prior to the conveyance that is sought to be avoided by said creditor, and (b) Centennial, according to PHCT, lacked creditors prior to any of the alleged conveyances for which the Trustee now seeks avoidance. Consequently, PHCT contends that the Trustee lacks standing to pursue his fraudulent conveyance action against PHCT pursuant to 12 Pa.C.S.A. § 5105.
The Trustee responds to PHCT’s position by contending that Centennial possessed creditors prior to each of the alleged conveyances notwithstanding that (a) Centennial was a shell corporation without assets and liabilities prior to the date of the Merger, and (b) most, if not all, of the alleged conveyances occurred no later than the date of the Merger. The Trustee bases the preceding contention upon his position that the claims of the creditors of the PHCT Subsidiaries that were incurred pri- or to the date of the Merger also constitute, because of the Merger, claims against Centennial which are deemed to have arisen against Centennial prior to the date of the Merger.
As an initial matter, the Court notes that before it can ascertain whether Centennial possessed creditors with claims that arose prior to the alleged conveyances for which the Trustee now seeks avoidance, the Court must determine when said conveyances occurred. The parties appear to agree that each of the alleged conveyances, which alleged conveyances are described herein on pages 5-6, occurred on the date of the Merger. With the exception of the Offset Agreement, the Court is inclined to agree with the parties; with respect to any transfer that may have occurred by virtue of the entry by PHCT and Centennial into the Offset Agreement, the Court is uncertain as to the nature of any property interest so transferred and thus, in light of 12 Pa.C.S.A. § 5106(l)(ii), (2), and (3), the date upon which such a transfer was made for purposes of § 5105 as well. However, the Court finds that it *165need not pin down the precise dates of the alleged conveyances given that the Court (a) can safely conclude, and it does not understand either party to dispute, that none of said alleged conveyances occurred prior to the date of the Merger, (b) concludes, based upon the rationale expressed below, that the claims of the creditors of the PHCT Subsidiaries which were incurred prior to the date of the Merger also constitute, because of the Merger, claims against Centennial which are deemed to have arisen against Centennial prior to the date of the Merger, and (c) can thus conclude that Centennial possessed creditors with claims that arose prior to the alleged conveyances for which the Trustee now seeks avoidance.
The predicate for the Court’s conclusion that Centennial possessed creditors with claims predating the date of the Merger, to wit the Court’s holding that the claims of the creditors of the PHCT Subsidiaries that were incurred prior to the date of the Merger also constitute claims against Centennial which are deemed to have arisen against Centennial prior to the date of the Merger, follows because (a) “[t]he surviving ... corporation [in a merger among nonprofit corporations, subsequent to said merger,] shall thenceforth be responsible for all the liabilities and obligations of each of the corporations so merged,” 15 Pa.C.S.A. § 5929(b) (Purdon’s 1995), (b) Centennial was the surviving corporation in the Merger, which means that the preexisting claims of the PHCT Subsidiaries became liabilities of Centennial by virtue of the Merger, (c) “the liabilities of the merging ... corporations ... are not affected” by a merger, 9 P.L.E. Corporations § 481 at 120 (West 1971), which statement of the law (i) is consistent with § 5929(b)’s proviso that “any claim existing ... against any of ... [the merged] corporations may be prosecuted ... as if such merger ... had not taken place,” and (ii) implies that the surviving corporation to a merger, such as is Centennial herein, inherits not only the liabilities of the nonsurviving corporation to said merger (i.e., the PHCT Subsidiaries herein) but also the dates upon which said liabilities were incurred by said nonsurviv-ing corporation, see also DeLCode Ann. tit. 8, § 259(a) (1999) (“all debts, liabilities and duties of the respective constituent corporations [to a merger] shall thenceforth attach to said surviving ... corporation, and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it”)-, Cal.Corp.Code § 1107(a) (West 2000) (“Upon merger ... the surviving corporation ... shall be subject to all the debts and liabilities of each [of the constituent corporations to a merger] in the same manner as if the surviving corporation had itself incurred them”), and (d) the carryover to the surviving corporation to a merger of the dates upon which were incurred the debts absorbed into said surviving corporation preserves for the corresponding claimants the right to challenge as constructively fraudulent under 12 Pa. C.S.A. § 5105 any conveyance by the surviving corporation that occurs on the date of said merger, which result coincides with the principle that “the rights of the creditors [of constituent corporations to a merger] ... are not impaired by the merger.” 9 P.L.E. Corporations § 481 at 120. The Court also notes that its preceding holding, generically stated, to wit that the claims of creditors of a nonsurviving corporation to a merger constitute claims against the surviving corporation thereto which are deemed to have arisen prior to the date of said merger, is not inconsistent with relevant existing caselaw because all such caselaw, to the Court’s knowledge, deals with corporate transactions that were effected other than by way of a merger (i.e., instances wherein a debtor corporation assumed preexisting liabilities other than by virtue of a merger). Put differently, the issue of whether preexist*166ing claims assumed by a debtor corporation in a corporate transaction constitute claims against said debtor corporation which are deemed to have arisen prior to the date of said assumption is, to the Court’s knowledge, one of first impression to the extent that the assumption of said claims by said debtor corporation is effected by way of a merger.3
Having concluded that the claims of the creditors of the PHCT Subsidiaries that were incurred prior to the date of the Merger constitute claims against Centennial which are deemed to have arisen against Centennial prior to the date of the Merger, the Court can also conclude that there existed as of Centennial’s petition filing date creditors of Centennial who then possessed causes of action under 12 Pa.C.S.A. § 5105' against PHCT for the avoidance of the conveyances alleged by the Trustee to have been made. Consequently, the Court must also conclude that the Trustee possesses standing to pursue his fraudulent conveyance action against PHCT in its entirety under 12 Pa.C.S.A. § 5105. Therefore, PHCT’s dismissal motion, to the extent that it is predicated upon a lack of standing by the Trustee under 12 Pa.C.S.A. § 5105, must be DENIED WITH PREJUDICE.
II. Whether Centennial transferred property or incurred an obligation that can be the subject of a fraudulent conveyance action against PHCT under either 12 Pa.C.S.A §§ 5104(a)(2) or 5105?
In addition to PHCT’s position regarding the Trustee’s standing under 12 Pa. C.S.A. § 5105, PHCT also challenges the Trustee’s assertion that Centennial made transfers or incurred obligations that can be the subject of a fraudulent conveyance action against PHCT under either 12 Pa. C.S-A. §§ 5104(a)(2) or 5105. The Court will proceed to ascertain whether each of the conveyances alleged by the Trustee to have been made can, as a matter of law, be the subject of an action against PHCT under either 12 Pa.C.S.A. §§ 5104(a)(2) or 5105.
As an initial matter, the Court holds, as a matter of law, and based in part upon express statutory language, that the Trustee cannot prevail against PHCT under either 12 Pa.C.S.A. §§ 5104(a)(2) or 5105 unless Centennial (a) made transfers to, or that served to benefit, PHCT, or (b) incurred obligations to, or that benefitted, PHCT. With respect to that portion of the Court’s preceding holding regarding transfers made, said holding is dictated by *167the language of 11 U.S.C. § 550(a)(1). See 11 U.S.C.A. § 550(a)(1) (West 1993).4 With respect to that portion of said holding regarding obligations incurred, said holding follows as a matter of logic, if not common sense. Indeed, since PHCT is named as the sole party defendant by the Trustee in the instant adversary proceeding, the Trustee can only obtain herein a remedy as against, or from, PHCT, which fact dictates that PHCT have received something from Centennial that can be avoided in order for the Trustee to prevail herein. With respect to obligations incurred by Centennial, the universe of the same that could have garnered something for PHCT such that relief can be afforded the Trustee as against PHCT is comprised of those obligations (a) payable by Centennial directly to PHCT, in which event the same can potentially be avoided outright, or (b) payable by Centennial to someone other than PHCT but the incurrence of which benefitted PHCT, in which event the Court, under its powers of equity if necessary, can recast the same as transfers of value to PHCT which are potentially avoidable and recoverable from PHCT under 11 U.S.C. § 550(a)(1).5
The Court will now proceed to apply the aforesaid statement of the law to each of the conveyances alleged by the Trustee to have been made so that the Court may ascertain whether said alleged conveyances can, as a matter of law, be the subject of an action against PHCT under either 12 Pa.C.S.A. §§ 5104(a)(2) or 5105.
A. Centennial’s absorption of the liabilities of the PHCT Subsidiaries as of October 31, 1996 (at least to the extent that the amount of said liabilities exceeded the value of the assets of the PHCT Subsidiaries as of the same date).
Because Centennial absorbed the preexisting liabilities of the PHCT Subsidiaries as of October 31,1996, via the Merger, there cannot be any doubt, and the Court does not disagree with the Trustee, that Centennial thereby incurred obligations. However, and unfortunately for the Trustee, he can only obtain potential relief under 12 Pa.C.S.A. §§ 5104(a)(2) or 5105 as against PHCT for the absorption of said preexisting liabilities if, and to the extent that, PHCT was benefitted by said absorption given that said obligations were at all times due and owing to someone other than PHCT.6 Therefore, the Court must resolve the issue of whether PHCT was benefitted by Centennial’s absorption via the Merger of the preexisting liabilities of the PHCT Subsidiaries as of October 31, 1996. If, and to the extent, that PHCT was thereby benefitted, said benefit can be recast as a transfer that is potentially avoidable as a fraudulent conveyance and recoverable from PHCT under 11 U.S.C. § 550(a)(1). If PHCT did not thereby receive any benefit, then PHCT did not receive anything that can, within the equitable powers of this Court, be recast as a transfer that is potentially avoidable and recoverable from PHCT.
PHCT presently contends that it was not benefitted in any fashion by Centenni*168al’s absorption via the Merger of the preexisting liabilities of the PHCT Subsidiaries as of October 31, 1996. PHCT contends as much on the basis that the PHCT Subsidiaries were each separately incorporated, thereby insulating PHCT from the reach of the creditors of the PHCT Subsidiaries. The Trustee concedes that the PHCT Subsidiaries were separately incorporated prior to the Merger, see Trustee’s Compl. ¶ 15, and fails to offer, either in his pleadings or in his brief, any legal theory for how PHCT could have been obligated on the debt of the PHCT Subsidiaries. The Court recognizes the Trustee’s allegations that PHCT guaranteed certain of the preexisting indebtedness of the PHCT Subsidiaries, which allegation does not appear to be disputed by PHCT. However, and unfortunately for the Trustee, Centennial’s mere absorption of the aforesaid preexisting liabilities did not serve to exonerate PHCT from any guaranty obligation that it might have had regarding said preexisting liabilities. Given the Trustee’s failure to offer a legal theory for how PHCT could have been obligated on the debt of the PHCT Subsidiaries, and because the Court itself cannot postulate the same, the Court is at a loss to understand how PHCT benefitted from Centennial’s absorption via the Merger of the preexisting liabilities of the PHCT Subsidiaries as of October 31, 1996. Therefore, the Court is constrained to (a) rule at this time that PHCT was not benefitted by Centennial’s absorption via the Merger of the preexisting liabilities of the PHCT Subsidiaries as of October 31, 1996, (b) hold that said absorption of liabilities thus does not constitute a transfer that can be the subject of a fraudulent conveyance action against PHCT, and (c) dismiss the Trustee’s adversary complaint, and to GRANT PHCT’s dismissal motion, to the extent that said adversary complaint is predicated upon a claim that said absorption of liabilities constituted a fraudulent conveyance to PHCT.7
B. Centennial’s incurrence of the obligation to provide consideration to HSI and the officer of HSIM.
There cannot be any doubt, and the Court does not disagree with the Trustee, that Centennial incurred obligations by undertaking to provide consideration to HSI and the officer of HSIM. However, and as was the case with respect to Centennial’s absorption of the preexisting liabilities of the PHCT Subsidiaries, Centennial’s obligations to HSI and the HSIM officer were due and owing to someone other than *169PHCT, which means that the Trustee can only obtain relief under 12 Pa.C.S.A. §§ 5104(a)(2) or 5105 as against PHCT for said obligations if, and to the extent that, PHCT was benefitted by Centennial’s in-currence of said obligations.
PHCT presently contends that it was not benefitted in any fashion by Centennial’s incurrence of obligations to HSI and the HSIM officer, which obligations both parties appear to agree were incurred by Centennial in connection with the termination, at or about the time of the Merger,of a preexisting management agreement between PHCT and HSIM (hereafter “the Management Agreement”). PHCT contends as much because, according to PHCT, the PHCT Subsidiaries rather than PHCT were liable as the sole obligors on the Management Agreement prior to the Merger. The Court is inclined to agree with PHCT that, if the PHCT Subsidiaries rather than PHCT were liable as the sole obligors on the Management Agreement prior to the Merger, then PHCT was not benefitted in any fashion by Centennial’s obligations incurred in return for the termination of said agreement. The Trustee disagrees, implicitly if not explicitly, with the preceding position of PHCT, however, essentially contending that (a) PHCT rather than the PHCT Subsidiaries was solely hable under the Management Agreement, and (b) PHCT was thus benefitted by Centennial’s incurrence of obligations so as to terminate said agreement. PHCT, on page 7 of its Reply to the Memorandum of Chapter 11 Trustee in Opposition to Motion to Dismiss, which document was filed on July 31, 2000, offers the following documentary language which PHCT contends establishes that the PHCT Subsidiaries were solely liable for fee payments due under the Management Agreement:
“Source of Payment GHS[I] shah be responsible for billing each hospital [(i.e., each of the PHCT Subsidiaries)] for its appropriate portion of the management fees [due under this Management Agreement] and remitting payment to HSIM....”
However, the Court cannot presently conclude that said language, when viewed in isolation, establishes that which is asserted by PHCT; indeed, it is equally plausible that said documentary language merely memorializes an internal cost accounting scheme of PHCT, whereby, for cost accounting purposes only, PHCT would apportion to each of the PHCT Subsidiaries a portion of the aforesaid fees that were paid by PHCT under the Management Agreement, which fee obligation was perhaps solely that of PHCT. Because the Court is not able at this stage of the litigation to determine whether PHCT was solely liable under the Management Agreement, and thus cannot presently determine as well whether (a) PHCT was benefitted by Centennial’s incurrence of obligations so as to terminate said agreement, and (b) Centennial’s incurrence of said obligations can constitute a transfer that is potentially avoidable as a fraudulent conveyance, the Court must DENY WITHOUT PREJUDICE PHCT’s dismissal motion to the extent that it is predicated upon the lack of a potentially avoidable transfer in the form of obligations incurred by Centennial to HSI and the HSIM officer.
While the Court denies PHCT’s dismissal motion to the extent just described, the Court notes that, in order to prevail under either 12 Pa.C.S.A. §§ 5104(a)(2) or 5105 with respect to the obligations incurred by Centennial to HSI and the HSIM officer, the Trustee must ultimately establish not only that PHCT was thereby benefitted (and thus that Centennial made a transfer that is potentially avoidable and recoverable from PHCT) but also that PHCT, in return for said benefit, failed to provide to Centennial reasonably equivalent value. With respect to the issue of “reasonably equivalent value,” the Court does not presently offer any view as to whether the same was obtained by Centennial presuming, arguendo, that Centennial, by incurring obligations to HSI and the HSIM *170officer, made a transfer to PHCT that is potentially avoidable as a fraudulent conveyance to PHCT.
C. Centennial’s incurrence of the numerous indemnification obligations to PHCT.
The Court understands PHCT to argue that, as a matter of law, none of the numerous indemnification obligations running from Centennial to PHCT constitute fraudulent conveyances. However, the Court is uncertain as to whether PHCT, in support of the preceding position, argues that (a) said indemnification obligations cannot, as a matter of law, be the subject of a fraudulent conveyance action against PHCT, or (b) Centennial received, as a matter of law, reasonably equivalent value in return for said indemnification obligations.
The Court holds, and without any doubt, that said indemnification obligations, since they run directly from Centennial to PHCT, constitute obligations that can be the subject of a fraudulent conveyance action against PHCT under either 12 Pa.C.S.A. §§ 5104(a)(2) or 5105. PHCT appears to argue for a contrary holding by asserting that the incurrence of said indemnification obligations by Centennial did not, or will not, benefit PHCT. However, the Court must reject said reasoning because (a) obligations of Centennial are potentially avoidable as fraudulent conveyances vis-a-vis PHCT provided that they are either payable to, or their incurrence benefitted, PHCT, see supra pp. 166-67, (b) the aforesaid indemnification obligations are obviously payable to PHCT regardless of whether a benefit also ran to PHCT, and (c) PHCT was clearly benefit-ted by said indemnification obligations in any event given that, absent said obligations on Centennial’s part, PHCT could only resort to common law, as opposed to a contract, for the reimbursement that is the subject of the indemnification obligations.
As for a contention by PHCT that Centennial received, as a matter of law, reasonably equivalent value in return for said indemnification obligations, the Court does not understand PHCT to have formally predicated its dismissal motion vis-avis the Trustee’s claim that said obligations constitute fraudulent conveyances upon such a contention. Nevertheless, the essence of PHCT’s dismissal motion and PHCT’s reply to the Trustee’s opposition to said motion raises the issue of whether Centennial received, as a matter of law, reasonably equivalent value in return for said indemnification obligations. The Court, therefore, will address the issue at this time and hold that Centennial did not necessarily receive, as a matter of law, reasonably equivalent value in return for the aforesaid indemnification obligations; put differently, the Court simply cannot ascertain at this time whether Centennial received such reasonably equivalent value. The preceding conclusion applies with equal force to those obligations incurred by Centennial to indemnify PHCT for performance by PHCT of a guaranty of any indebtedness of the PHCT Subsidiaries because, although the PHCT Subsidiaries would have received, as a matter of law, reasonably equivalent value in return for said indemnification obligations had they incurred the same simultaneous to the undertaking of guaranty by PHCT (guaranty of debt of PHCT Subsidiaries would constitute value equal in amount to such an indemnification obligation undertaken by said subsidiaries), said indemnification obligations were incurred by Centennial rather than assumed from the PHCT Subsidiaries, and said indemnification obligations were incurred on the effective date of the Merger, which date is subsequent to the date upon which PHCT undertook its guaranty obligation.
Therefore, the Court must DENY WITHOUT PREJUDICE PHCT’s dismissal motion to the extent that it pertains to any of the numerous indemnification obligations running from Centennial to PHCT.
*171D. Centennial’s assumption of the obligations of PHCT that, according to the Memorandum of Agreement, had previously been undertaken by PHCT on behalf of the PHCT Subsidiaries.
Consistent with the analysis in parts A and B above, the Court holds that (a) Centennial incurred obligations in the form of those obligations which it assumed which had previously been undertaken by PHCT on behalf of the PHCT Subsidiaries, (b) the Trustee can only obtain relief under 12 Pa.C.S.A. §§ 5104(a)(2) or 5105 as against PHCT for Centennial’s assumption of said obligations if, and to the extent-that, PHCT was benefitted by Centennial’s said assumption, (c) PHCT was clearly benefitted by Centennial’s said assumption given that, absent said assumption by Centennial, PHCT would have remained liable on the obligations so assumed by Centennial, and (d) the aforesaid assumption of obligations by Centennial can be recast as, and thus constitutes, a transfer that is potentially avoidable as a fraudulent conveyance and recoverable from PHCT under 11 U.S.C. § 550(a)(1). In light of the preceding, the Court must DENY WITHOUT PREJUDICE PHCT’s dismissal motion to the extent that it is predicated upon the lack of a potentially avoidable transfer in the form of those obligations assumed by Centennial which had previously been undertaken by PHCT on behalf of the PHCT Subsidiaries. With respect to the issue of “reasonably equivalent value,” the Court does not presently offer any view as to whether the same was obtained by Centennial in return for its assumption of the obligations just described.
E. PHCT’s elimination of the Inter-company Debt, which elimination the Trustee alleges beneñtted PHCT in an amount approximating $52 million.
The Court agrees with the Trustee that the elimination of the Inter-company Debt, which debt the Trustee estimates at approximately $52 million, constitutes a transfer of assets from Centennial to PHCT that is potentially avoidable under 12 Pa.C.S.A. §§ 5104(a)(2) or 5105 and recoverable from PHCT pursuant to 11 U.S.C. § 550(a)(1). See 12 Pa.. C.S.A. § 5101(b) (definition of “transfer” includes “release [from indebtedness]”). However, said transfer ultimately is not avoidable as a fraudulent conveyance because Centennial, as a matter of law, received reasonably equivalent value from PHCT in return for said transfer.
The Court acknowledges that PHCT does not formally assert as a ground for the dismissal of any portion of the Trustee’s fraudulent conveyance complaint that Centennial received, as a matter of law, reasonably equivalent value in return for any particular conveyance alleged by the Trustee to have been made' to PHCT. However, and as PHCT points out in its Reply to the Memorandum of Chapter 11 Trustee in Opposition to Motion to Dismiss, the Trustee failed to make any mention of the elimination of the Intercompany Debt in his adversary complaint, instead first advancing as a fraudulent conveyance the elimination of said debt in his opposition memorandum, which memorandum, of course, was not filed until after PHCT had moved to dismiss. Because of the timing of the Trustee’s allegations regarding the elimination of the Intercompany Debt, the Court finds it appropriate for PHCT to offer, via its reply to the Trustee’s opposition memorandum, as a separate ground for said dismissal motion that Centennial, as a matter of law, received reasonably equivalent value from PHCT in return for the elimination of the Intercompany Debt. Therefore, the issue of whether Centennial, as a-matter of law, received reasonably equivalent value from PHCT in return for the elimination of the Intercompany Debt is properly before the Court at this time. As the Court will explain in the ensuing paragraph, Centennial, as a matter of law, received reasonably equivalent value from PHCT in return for the elimination'of the *172Intercompany Debt, which conclusion dictates that said elimination of debt is not avoidable as a fraudulent conveyance.
The Court concludes that Centennial received reasonably equivalent value* from PHCT in return for the elimination of the Intercompany Debt by virtue of PHCT’s simultaneous elimination of the Intercom-pany Receivable, which receivable due to PHCT exceeded in amount the Intercom-pany Debt by some $3.4 million.(which $8.4 million net receivable due to PHCT was forgiven by PHCT as part of the Merger transaction). The Trustee argues for a contrary holding by the Court by contending that the elimination of the Intercompa-ny Receivable constitutes illusory consideration on PHCT’s part because, prior to the Merger, said receivable due to PHCT was not likely collectible by PHCT from those PHCT Subsidiaries liable to PHCT. However, and unfortunately for the Trustee, the Merger served to, inter alia, make Centennial liable for the payment of the Intercompany Receivable to PHCT. Because Centennial assumed both the Inter-company Debt, which became an asset to Centennial, arid the Intercompany Receivable, which became a liability of. Centennial (and no less so because of the unlikely prospect that it would have been paid prior to the Merger), the elimination of the latter constitutes real, rather' than illusory, consideration that was given to Centennial in return for the elimination of the former. Moreover, because the Intercompany Receivable exceeds in amount the Intercom-pany Debt, the elimination of the former necessarily constitutes reasonably equivalent value given in return for the elimination of the latter. Cf. In re Parkway Calabasas Ltd., 89 B.R. 832, 839 (Bankr.C.D.Cal.1988) (hypothetical merger of two affiliated limited partnerships outside of bankruptcy would eliminate the harm occasioned to the creditors of one of said partnerships, as well as the unjust enrichment occasioned to the creditors of the other partnership, by virtue of the former partnership’s payment of the debt of the latter partnership, which payment, absent said hypothetical merger, would constitute an avoidable fraudulent transfer).8
Because Centennial, as a matter of law, received reasonably equivalent value from PHCT in return for the elimination of the Intercompany Debt, the transfer to PHCT in the form of said elimination of debt is not avoidable as a fraudulent conveyance under either 12 Pa.C.S.A. §§ 5104(a)(2) or 5105. Consequently, the Court must dismiss the Trustee’s adversary complaint and GRANT PHCT’s dismissal motion to the extent that said complaint is predicated upon a claim that the elimination of the Intercompany Debt constituted an avoidable fraudulent conveyance to PHCT.
F. The Offset Agreement.
The Court agrees with the Trustee that the right of reimbursement granted to PHCT from funds remaining in the Escrow Account for the satisfaction of indemnification claims against Centennial constitutes a transfer of some sort of property interest from Centennial to PHCT that is potentially avoidable under 12 Pa. C.S.A. §§ 5104(a)(2) or 5105 and recoverable from PHCT pursuant to 11 U.S.C. § 550(a)(1). Therefore,' the Court must DENY WITHOUT PREJUDICE PHCT’s dismissal motion to the extent that it is predicated upon the lack of a potentially *173avoidable transfer in the form of that which PHCT obtained via the Offset Agreement. However, the Court does not presently offer any view as to whether PHCT provided reasonably equivalent value in.return for Centennial’s execution of the Offset Agreement.
III. Whether the Trustee can, as a matter of law, recover from PHCT, pursuant to 11 U.S.C. § 550(a), the relief that the Trustee seeks as a remedy for the alleged fraudulent conveyances.
The third ground upon which PHCT bases its dismissal motion, to wit that 11 U.S.C. § 550(a) does not provide for the type of remedy sought by the Trustee as relief in his adversary complaint, is partially addressed in part II of the instant memorandum. In said part II the Court holds, inter alia, that any obligations incurred by Centennial that are payable to someone other than PHCT but which are proven by the Trustee to have benefitted PHCT will be recast by the Court as transfers of value to PHCT, which transfers will then be potentially avoidable as fraudulent transfers under 12 Pa.C.S.A. §§ 5104(a)(2) or 5105 and, if so avoided, may then be recovered from PHCT under 11 U.S.C. § 550(a)(1). See supra p. 167. The nature of any such recovery granted under 11 U.S.C. § 550(a)(1) will likely be a monetary judgment against PHCT for the difference between the obligations assumed by Centennial that are recast as transfers to PHCT and any consideration given by PHCT in return for said recast transfers. The remedy described in the preceding sentence is authorized by § 550(a)(1), which provision allows for the recovery by the Trustee of, inter alia, the value of any property transfer that is avoided under, inter alia, 11 U.S.C. § 544, which statutory provision is the one under which the Trustee proceeds in his adversary complaint. Of course, the amount of the recovery sought by the Trustee in his complaint will necessarily differ from that which the Trustee can now potentially recover given that the Court, in part II above, orders the dismissal of that portion of the Trustee’s complaint which ultimately sought a judgment merely for the difference between the amount of the preexisting liabilities of the PHCT Subsidiaries as of October 31, 1996, which liabilities were absorbed by Centennial via the Merger, and the value of the assets of the same subsidiaries which were likewise assumed by. Centennial via the Merger.
Of course, the Trustee need not seek a remedy under 11 U.S.C. § 550(a) to the extent that he succeeds in avoiding any obligation of Centennial which is payable directly to PHCT — i.e.‘ the indemnification obligations discussed above — given that such successful avoidance will eventually, if not automatically, result in the striking of any claim by PHCT against Centennial’s bankruptcy estate based upon said obligation.
Finally, and of .course, the Trustee is authorized under li U.S.C. § 550(a)(1) to seek from PHCT the recovery of any property interest that was conveyed to PHCT via the Offset Agreement if, and to the extent that, said transfer is successfully avoided as a fraudulent transfer under 12 Pa.C.S.A. §§ 5104(a)(2) or 5105.
CONCLUSION
PHCT’s motion to dismiss the Trustee’s adversary complaint in its entirety pursuant to Fed.R.Bankr.P. 7012(b) and Fed. R.Civ.P. 12(b)(6) is GRANTED in part, DENIED WITH PREJUDICE in part, and DENIED WITHOUT PREJUDICE in part. PHCT’s dismissal motion is granted and the Trustee’s adversary complaint is accordingly dismissed to the extent that said complaint is predicated upon a claim that the following constituted fraudulent conveyances to PHCT:
(a) Centennial’s absorption via the Merger of the preexisting liabilities of the PHCT Subsidiaries as of October 31, 1996 (at least to- the extent .. that the amount .of said liabilities *174exceeded the value of the assets of the PHCT Subsidiaries as of the same date); and
(b)The elimination of the Intercompany Debt.
PHCT’s dismissal motion is denied with prejudice and the Trustee’s adversary complaint may accordingly proceed to the extent that PHCT’s dismissal motion is predicated upon a lack of standing by the Trustee under 12 Pa.C.S.A. § 5105. Finally, PHCT’s dismissal motion is denied without prejudice and the Trustee’s adversary complaint may accordingly proceed to the extent that said complaint is predicated upon a claim that the following constituted fraudulent conveyances to PHCT:
(a) Centennial’s incurrence of the obligation to provide consideration to HSI and the officer of HSIM;
(b) Centennial’s incurrence of the numerous indemnification obligations to PHCT;
(c) Centennial’s assumption of the obligations of PHCT that, according to the Memorandum of Agreement, had previously been undertaken by PHCT on behalf of the PHCT Subsidiaries; and
(d) The Offset Agreement.
: The facts set forth below, unless otherwise indicated, are not the subject of dispute between the parties as reflected by their pleadings and briefs.
. PHCT contends in its dismissal motion, its brief in support thereof, and its reply memorandum to the Trustee’s opposition memorandum that the Trustee’s adversary complaint suffers from numerous pleading deficiencies, at least one of which deficiencies, it is asserted by PHCT, is sufficiently serious such that the Trustee should be directed to accordingly amend his complaint. The Court holds, after an examination of the Trustee’s adversary complaint and a consideration of the parties’ other papers and oral arguments, that the state of the Trustee’s pleading in said complaint is legally deficient so as to merit either a direction to amend or the dismissal, in part, of said complaint only to the extent that the Trustee pursues as a fraudulent conveyance PHCT’s elimination of the Intercompany Debt. The preceding holding is warranted with respect to the Trustee’s pursuit of a claim based upon PHCT's elimination of the Intercompany Debt because the Court cannot locate within any portion of the Trustee’s complaint a reference by the Trustee, either implicitly or explicitly, to PHCT's elimination of the Intercompany Debt, which observation compels the Court to conclude that PHCT cannot have been placed on notice as to that part of the Trustee’s fraudulent conveyance action. However, because the Court subsequently holds that the Trustee cannot prevail against PHCT on his claim that PHCT’s elimination of the Intercompany Debt constituted a fraudulent conveyance, see infra pp. 171-73, it would be pointless for the Trustee to, and thus the Trustee need not, rectify the aforesaid pleading deficiency. With respect to all of the remaining parts of the Trustee's fraudulent conveyance action, the pleadings within the Trustee's complaint, in the Court’s view, sufficiently set forth the basis for said action such that PHCT received adequate notice of the same. The Court concludes as much because the five terms, broadly speaking, of the Merger transaction attacked by the Trustee as fraudulent conveyances aside from PHCT’s elimination of the Intercompany Debt are clearly pled in parts of the Trustee's complaint that are tiren (a) explicitly incorporated, via paragraphs 63 and 68 therein, into the portion of said complaint formally setting forth the Trustee's two counts therein, and (b) implicitly incorporated as well into the same portion of said complaint by the Trustee's use of the phrase "the Graduate Transaction” to refer to all parts of the Merger transaction. Said conclusion by the Court is also warranted because (a) the touchstone of whether a pleading satisfies Fed.R.Civ.P. 8(a)(2), which rule is made applicable to the instant proceeding pursuant to Fed.R.Bankr.P. 7008(a), is whether said pleading provides "fair notice” of the claims pursued therein, which notice the Court concludes is provided by the Trustee’s complaint with respect to all portions of his fraudulent conveyance action against PHCT excepting for the extent to which the same is predicated upon PHCT's elimination of the Intercompany Debt, and (b) the heightened pleading standard invoked by Fed.R.Civ.P. 9(b) with respect to pleadings asserting, inter alia, fraud, which rule is made applicable to the instant proceeding pursuant to Fed.R.Bankr.P. 7009, does not apply to a constructive fraudulent conveyance action initiated by a bankruptcy trustee. See In re O.P.M. Leasing Services, Inc., 35 B.R. 854, 862-863 (Bankr.S.D.N.Y.1983) ("the high degree of [pleading] particularity required in a complaint involving active fraud ... [is] inappropriate ... [in an] action involving] merely constructive fraud”); 10 Collier on Bankruptcy ¶ 7009.03 at 7009-4 (Bender 1998) ("When a trustee in bankruptcy pleads a claim of fraud, [whether it be constructive or active fraud,] cases have held that the Rule 9(b) requirement of particularity is relaxed”).
. Although neither party cites the Court to, and the Court’s own research likewise fails to reveal any, relevant caselaw wherein a debtor corporation assumed preexisting liabilities by way of a merger, the Court is aware of bankruptcy court decisions, including those cited to by the parties, involving leveraged buyouts wherein bankruptcy courts split on the issue of whether preexisting claims assumed by a debtor corporation in an LBO constitute claims against said debtor corporation which are deemed to have arisen prior to the date of said assumption for purposes of a fraudulent conveyance analysis. See In re Sverica Acquisition Corp., Inc., 179 B.R. 457, 464-466 (Bankr.E.D.Pa.1995) (arguably answering issue in negative); In re Morse Tool, Inc., 148 B.R. 97, 131-132 (Bankr.D.Mass.1992) (answering issue in negative); In re Everfresh Beverages, Inc., 238 B.R. 558, 578-581 (Bankr.S.D,N.Y.1999) (arguably answering issue in the affirmative). Nevertheless, and as set forth in the text preceding this footnote, none of the decisions, including Sverica, Morse Tool, and Everfresh, clearly set forth a fact pattern wherein a debtor corporation assumed preexisting liabilities by way of a merger. For instance, Sverica is silent as to the manner in which preexisting liabilities were assumed by the debtor corporation therein, while in Morse Tool preexisting liabilities were assumed by the debtor corporation therein via a straight purchase of assets and liabilities within the context of a spinoff from a parent corporation; with respect to Ever-fresh, the Court therein implied that a merger was involved, see Everfresh, 238 B.R. at 581 (first full sentence at top of page), although the opinion’s statement of facts fails to reveal as much. Consequently, said decisions, in addition to not being binding upon this Court, are not particularly helpful with respect to the issue in question that is faced by this Court.
. Outside of the bankruptcy context, a result entirely similar to that called for by 11 U.S.C. § 550(a)(1) is provided by 12 Pa.C.S.A. §§ 5107(a)(1) and 5108(b)(1).
. The recasting as potentially avoidable transfers of those obligations incurred by Centennial which were payable to someone other than PHCT but the payment of which benefitted PHCT is equitable, if not called for explicitly by Pennsylvania’s fraudulent transfer law, because (a) the assumption of such obligations by Centennial, if, and to the extent that, said assumption benefitted PHCT, thereby releases PHCT of obligations that it would otherwise have had, and (b) the term "transfer” is defined for purposes of Pennsylvania's fraudulent transfer law to include a release from indebtedness. See 12 Pa.C.S.A. § 5101(b) (Purdon’s 1999) (definition of "transfer” includes "release [from indebtedness]”).
.The parties agree that PHCT, as part of the Merger, agreed to, and did, forgive the net intercompany receivable due to itself in the approximate amount of $3.4 million; therefore, none of the obligations absorbed by Centennial were due and payable to PHCT.
. PHCT appears to argue that the preexisting creditors of the PHCT Subsidiaries as of the date of the Merger — who, as explained in part I of the instant memorandum opinion, constitute, because of the Merger, the lone creditors (a) with claims against Centennial predating the Merger, (b) who could have proceeded against PHCT under 12 Pa.C.S.A. § 5105 with respect to transfers effectuated via the Merger, and (c) by which the Trustee can also proceed under 12 Pa.C.S.A. § 5105 against PHCT regarding transfers effectuated via the Merger — could not have proceeded against PHCT under § 5105 with respect to Centennial's absorption via the Merger of the preexisting liabilities of the PHCT Subsidiaries as of October 31, 1996, even if PHCT had somehow been obligated on said preexisting liabilities because, according to PHCT, said creditors could not have been harmed by Centennial’s said absorption. PHCT appears to argue that said creditors would not have experienced any harm by virtue of said absorption because, while said creditor’s claims were merged into Centennial via the Merger, so too were all of the assets of the PHCT Subsidiaries, and if said creditors could only have looked to said assets for the satisfaction of their claims prior to the Merger, then their financial predicament would not have been affected by the Merger given that, immediately after the Merger, said assets were still the only ones to which said creditors could look for said satisfaction. The Court detects a flaw in, and thus disagrees with, the preceding analysis of PHCT, however. In particular, the Court, contrary to the view of PHCT, concludes that if said creditors could have reached PHCT prior to the Merger, then the extinguishment of PHCT’s liability with respect to their claims via Centennial’s absorption of said claims would have harmed said creditors by adversely affecting their financial predicament, to wit removing from said creditors an avenue by which their claims could be satisfied.
. The Court need not ponder whether the Trustee would have a viable fraudulent conveyance action against PHCT for the elimination of the Intercompany Debt if Centennial’s acquisition of the PHCT Subsidiaries had been effected other than by merger because (a) said acquisition, in fact, was effected via the Merger, and (b) the Trustee does not allege, and the Court cannot envision, that PHCT forced upon Centennial the form in which said acquisition was effected. In fact, with respect to the latter point, PHCT asserts that the form of Centennial's acquisition of the PHCT Subsidiaries was amended in October 1996 at the specific request of AHERF, parent to Centennial, so as to allow AHERF to recover substantial Medicare recapture payments which were estimated by AHERF to approximate $25 million in amount. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493080/ | *387MEMORANDUM OPINION1
JUDITH K FITZGERALD, Chief Judge.
The matter before me is Citicorp Venture Capital, Ltd.’s (“CVC”) objection to the Creditors’ Committee’s post-confirmation fees and expenses submitted pursuant to my Order of April 20, 2000. That Order required the Creditors’ Committee to file
(1) a summary of all professional fees and expenses incurred in relation to this adversary that are not included in the $1,248,000 administrative fees incurred during the four-month plan confirmation delay;
(2) a statement of post-confirmation U.S. Trustee fees incurred and/or paid through the date of this Order.
The Creditors’ Committee filed its “Summary of Post-Confirmation Date Fees and Expenses Incurred and/or Paid to: (1) United States Trustee; and (2) Professionals in Connection With This Adversary Proceeding” (“Summary of Fees”) on May 17, 2000. CVC filed its “Response ... in the Nature of an Objection” (“CVC’s Response”) on June 15, 2000. I heard argument on July 12, 2000.
The Creditors’ Committee requests that CVC’s claims be subordinated by the following amounts:
1.The profit on CVC’s illegal claims trading, in the amount of $5,434,058.12
2. The additional administrative expenses incurred by the Papercraft estate during the four-month delay in confirmation of the BDK Plan, in the amount of $1,248,000 ...
3. Interest and dividends lost by creditors during the four-month delay in confirmation of the BDK Plan, in the amount of $956,250 ...
4. United States Trustee fees incurred and/or paid by the Papercraft estate from the date of confirmation through May 2, 2000, in the amount of $16,900 ...
5. Additional professional fees and expenses incurred and/or paid by the Papercraft estate or BDK from February 14, 1992, through April 30, 2000, in the amount of $2,974,373.15 ... and2
6. Such other and further relief as this Court deems appropriate.
Summary of Fees, Adv. Docket No. 209, at 7.
The parties agreed at the hearing on July 12, 2000, that the amount of U.S. Trustee fees at issue is $4,750, not the $16,900 originally claimed. I will enter an order reflecting the parties’ agreement on this point.
Many of CVC’s objections merely restate the issues that were litigated, appealed, and dealt with by me on remand. However, in light of the parties’ most recent submissions, the following points require additional explanation.3
*388
Delay in Confirmation
CVC cites to the transcript of a hearing befóre me held on August 29, 1991,4 in support of its argument that I granted an extension of the exclusive period to file the plan of reorganization based on the existence of pending litigation with Debtor’s landlord, Second Pennsylvania Real Estate Corporation (“Second Pennsylvania”). According to CVC, in light of the Second Pennsylvania litigation, the earliest the plan could have been confirmed was the last week of,November of 1991, less than two months before the actual confirmation date of January 21, 1992. See CVC’s Response, Adv. Docket. No. 211, at notes 6 through 10 and accompanying text. However, at the August 1991 hearing, in addressing the existence of the Second Pennsylvania litigation and its effect -on the progress of the case, counsel for the Debtor stated that the Debtor did “not intend to be paralyzed by the prospect of litigation with Second Pennsylvania”, Transcript of August 29, 1991, at 5, and “assure[d] the Court that one way or another a plan will be filed by September 18 [1991].” Id. at 4. Nonetheless, I extended the exclusivé period one week, from September 18 to September 25. This Adversary complaint was filed a month later, on October 31,1991.
At the trial on this matter, on November 15, 1994, I noted that the plan could have been confirmed despite the problem with Second Pennsylvania. Transcript of November 15, 1994, Adv. Docket No. 159, at 84.5 Furthermore, Kenneth Klee, formerly of Stutman, Treister & Glatt, lead eoun-sel for the Creditors’ Committee in the Adversary, testified that, based on entries in Debtor’s counsel’s fee application which indicated the amount of time spent on Second Pennsylvania litigation and the disclosure statement between March or April and October of 1991, the delay in preparing the disclosure statement in this case was not the result of the Second Pennsylvania litigation. Transcript of November 15,1994, at 84, 86-90.6
There also existed an issue regarding American Technical Industries, Inc. (“ATI”) but it was addressed in the BDK plan filed shortly after the ease was commenced. See In re Papercraft Corporation, 187 B.R. 486, 501 (Bankr.W.D.Pa.1995), where I found that consideration had been given to the ATI issue prepetition and, therefore, this was not cause for the delay in filing the disclosure statement. Based on the record, I concluded that the Second Pennsylvania and ATI issues did not account for the delay in filing the disclosure statement in this case. No other explanation for the delay was offered. The only other event occurring at the time was the undisclosed purchase of notes by CVC in breach of its fiduciary duty.7 “There is nothing unusual about a court finding credible one plausible explanation of the significance of documentary evidence.” Papercraft Corporation v. Citicorp Venture Capital Ltd., 160 F.3d 982, 989 n. 5 (3d Cir.1998). The evidence amply supports the conclusion that the delay was the result of CVC’s claims purchasing *389activities.8
Amount of Interest
I have reexamined the evidence with respect to the amount of interest attributable to the delay and conclude that Mr. Victor’s assessment of lost interest income in the amount of $956,250 is appropriate. Mr. Victor’s Declaration provides that
In connection with the BDK Plan, creditors received new debt securities with a face value of $33,750,000 with an annual interest rate on the debt securities of 8.5%. On a monthly basis, this translates into $239,062 of lost income incurred as a result of the delay in confirming the BDK Plan. Again, assuming a four month delay due to the actions of CVC, the cost to creditors in the aggregate is $956,250.
Victor Declaration, supra, at ¶ 26b. The calculation is:
$33,750,000 x .085% = $2,868,750 interest per year
$2,868,750 + 12 months = $239,062.50
interest per month $239,062.50 x 4 months = $956,250
The Creditors’ Committee argued at the July 12, 2000, hearing that Mr. Victor’s calculation of lost income was correct because the securities from which the interest stemmed have not been issued as the result of this litigation with CVC. The four month period Mr. Victor referred to occurred preconfirmation and is the period in which the plan was not confirmed but should have been. The order confirming the plan provides that “The BDK Notes shall accrue interest from the Effective Date and shall mature 10 years from the Effective Date.” Order Confirming Plan at 10, ¶ 12.9 The plan fixes the term in which the notes will be held at interest and not distributed to creditors. Thus, but for CVC’s conduct, the plan could have been confirmed at least four months before it was, the securities would have been issued four months earlier, the interest would have begun and the distribution of principle and interest would have been made four months before it now will be. Hence, creditors have lost the ability to use their money from the distribution for four months.
CVC argues that what was “lost” was only interest on the $956,250 because the principle investment will earn the same amount of interest over the ten-year investment term. At first blush, CVC’s argument seems meritorious. Upon further analysis, however, it fails. The investment term itself is delayed in implementation for four months which, once expired, cannot be recaptured. Time lost cannot be regained. Under the Creditors’ Committee’s analysis, the four month period is treated as a preconfirmation delay. Under CVC’s analysis, it is a post-confirmation delay. Under either analysis, the $33,750,000 principle earns $956,250 in simple interest at 8.5 percent over four months. Because the creditors will be for*390ever deprived of the use of their funds for four months as the result of CVC’s conduct, they are entitled to recoup the 8.5 percent rate of return utilized in the plan as the measure of lost earnings.10 CVC’s claim will be equitably subordinated by the $956,250.
Amount of Fees and Expenses
CVC makes various arguments as to why the fees and expenses itemized by the Creditors’ Committee should be reduced, if considered at all, on the grounds that not all of them can be attributed to CVC’s conduct. I find, however, that none of the amount at issue incurred during the pre-confirmation delay or associated with the Adversary would have been incurred but for CVC’s conduct. Therefore, all of it is attributable to CVC and CVC’s claim is to be subordinated by that amount. Accordingly, CVC’s argument for reduction in the fees and expenses is rejected.
American Rule
CVC also argues that the subordination of its claim should not include the amount of the Creditors’ Committee’s fees because under the American rule litigants are to bear their own attorneys’ fees absent statutory or contractual authorization. See Davies v. Continental Bank, 1989 WL 63235 at *5, M.D.L. No. 745, CIV. A.Nos.86-6508, 86-7516 (E.D.Pa.1989). See also Hall v. Cole, 412 U.S. 1, 4, 93 S.Ct. 1943, 1945, 36 L.Ed.2d 702 (1973). The American Rule does not apply to the circumstances at issue. The Creditors’ Committee isn’t asking for payment of attorneys’ fees as such. Rather, the fees at issue depleted funds otherwise available to creditors of this estate due to CVC’s conduct in breach of its fiduciary duty. That is, CVC’s conduct caused the amount available to the estate to pay creditors to be reduced. To assure the creditors the distribution they should have received but for CVC’s conduct, I find it necessary to restore the fund by subordinating CVC’s share of distribution by the amount of fees and expenses incurred by professionals who are to be paid from estate assets that would not have been incurred but for CVC’s breach of its fiduciary duty.
Conclusion
In accordance with the foregoing and the opinion of the Court of Appeals, CVC’s maximum recovery cannot exceed $10,553,-541.88.11 Based on the foregoing and using the $10,553,541.88 as the starting point, its recovery is further subordinated by lost interest income of $956,250, administrative costs of $1,248,000 incurred during the delay in plan confirmation, fees and costs through April 30, 2000, of $2,974,373.15, and post-confirmation U.S. Trustee fees of $4,750. These amounts total $5,183,373.15. Thus, CVC’s unsubordinated distribution will be $5,370,168.73.
An appropriate order will be entered.
. The court’s jurisdiction was not at issue. This Memorandum Opinion constitutes our findings of fact and conclusions of law.
. Since the Creditors’ Committee filed its Summary of Fees the 26th Report on Compensation Paid and Expenses Reimbursed to Professionals has been filed showing a total of post-confirmation professional fees in the amount of $3,282,859.76. Adv. Docket No. 951.
. CVC argues at note 1 of its Response to the Creditors’ Committee Summary of Post-Confirmation Fees and Expenses that it has not profited and that the "imaginary paper profit” is based on a "hypothetical estimated intrinsic value” which did not reflect the market value of the BDK units. At trial and again in my Memorandum Opinion of April 20, 2000, I rejected CVC’s method of valuation of the BDK units. Its renewed argument in this respect is without merit.
CVC also argues that it should be paid its claim in full because if CVC had not bought claims, its share would have gone to the selling noteholders anyway and, therefore, creditors were not harmed. This argument is without merit inasmuch as CVC breached its fiduciary duties in purchasing the claims and is precluded from benefitting as a result of its conduct.
. This transcript is reprinted in Volume 2 of CVC’s Appendix to its brief on remand as Exhibit 3.
. The cover page of this transcript incorrectly reads "November 15, 1995”.
. Sée note 5, supra.
. I note that at the August, 1991, hearing neither Debtor nor CVC disclosed CVC’s efforts to acquire financial information and its trading in claims. Thus, the court was not given the complete picture of the circumstances that caused delay at that time. As I found in my opinion of April 20, 2000, Debt- or’s filing of competing plans, when a pre-negotiated plan was filed at the outset of the case, is unusual. The fair inference from the events is'that CVC used its status on Debtor’s board of directors and on Debtor's affiliates’ boards of directors, together with its then newly acquired vote blocking position for the BDK plan to influence Debtor to file the CVC plan, thereby delaying the entire process. In re Papercraft Corporation, 247 B.R. 625, 629-30 (Bankr.W.D.Pa.2000).
. After the BDK disclosure statement was approved, the plan confirmation hearing was set but CVC used its new position as a noteholder to assert objections to the plan, despite having participated in approving it prepetition. Although CVC's assertion of objections to the plan did not necessarily cause a delay between the filing of the disclosure statement and confirmation of the plan, its conduct led to increased professional fees in this case because its objections had to be addressed and plan language changed to reflect a compromise reached by the parties.
. The Plan defines "Effective Date” as "the date on which this Plan shall take effect, as provided in sections 6.19 and 12.2 of this Plan....” BDK Plan at 5. Section 6.19 refers to mergers that would take place before the Effective Date. Section 12.2 states that "Except as provided in section 6.19 or ARTICLE XI, paragraph p., the Effective date ... shall occur ... on the first Business Day on which no stay of the Confirmation Order is in effect that is more than ten (10) days ... after the Confirmation Date” and the mergers. Article XI concerns retention of jurisdiction to, inter alia, determine rights to distribution pursuant to the Plan (¶ d) and to resolve any disputes concerning implementation of the Plan (¶ f).
. In reality, the creditors will also lose interest on the $956,250 interest earnings and will be forever deprived of the opportunity to use their principle and interest for four months. Lost opportunity damages, however, must be nonspeculative. See Hershock v. Fiascki, 1992 WL 164739 (E.D.Pa.1992). I cannot assess what those damages will be.
. CVC’s claim based on the face value of its purchases was $60,849,299.10 and, if nothing was subordinated, its recovery under the confirmed plan would be $15,989,676.56. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493081/ | ORDER
WM. THURMOND BISHOP, Bankruptcy Judge.
This matter came before the Court on the plaintiffs adversary complaint seeking: (1) a determination, pursuant to Section 505 of the Bankruptcy Code, that he was not liable for a Trust Fund Recovery Pen*400alty assessment made against him by the defendant, pursuant to 26 U.S.C. § 6672 in the amount of $75,608.97; and (2) for an award of attorney’s fees pursuant to 26 U.S.C. § 7430. A trial was held in this matter on December 14, 1999. After considering all of the evidence presented at trial, a judgment in favor of the defendant is hereby entered on both counts of the complaint for the reasons set forth below.
FINDINGS OF FACT
The plaintiff, Glen Sheppard, is an individual who filed a Chapter 13 bankruptcy case on November 5, 1998, and is the debtor in this bankruptcy case.
3 M Construction Company, Inc. (“3 M Construction”) failed to fully pay its Form 941 federal employment tax liabilities for the tax periods ending June 30, 1996, September 30, 1996, and December 31, 1996.
As a result of these unpaid liabilities, the defendant assessed a Trust Fund Recovery Penalty against Sheppard on June 28, 1999 in the amount of $75,608.97 based upon the outstanding “trust fund” portion of 3 M Construction’s unpaid employment taxes for the periods ending June 30, 1996, September 30, 1996, and December 31, 1996. The trust fund portion of 3 M Construction’s liabilities represented the employee’s portion of the FICA tax and the employee’s income tax withholding. The assessment was made after the defendant determined that Sheppard was a “responsible officer” of 3 M Construction and that he willfully failed to ensure that the trust fund taxes of the corporation were remitted during the periods at issue.
In 1988, Sheppard founded CHS Engineering Associates, Inc. (“CHS Engineering”) to provide architectural design services for construction companies. He was the President of this corporation and was responsible for the payment of the payroll and employment tax liabilities for the corporation.
In early 1994, CHS Engineering was hired by 3 M Construction to provide architectural design services for a project where 3 M Construction was the general contractor. 3 M Construction had been formed in the early 1970s by George Phillip Murphy. At the time 3 M Construction hired CHS Engineering, Murphy was the President and sole shareholder of 3 M Construction.
After completing the project, Sheppard and Murphy entered into discussions regarding the merging of their businesses into a “design-build” operation where one corporation would provide both the design and construction for building projects.
While Sheppard and Murphy entered into discussions about formally merging their businesses at that time, no formal merger occurred. However, Sheppard and Murphy began operating their businesses together during 1994. To this end, in October 1994, Murphy hired Sheppard as an employee of 3 M Construction. Murphy appointed Sheppard as the Vice-President of 3 M Construction and granted him a salary equal to his own. Murphy remained the sole shareholder of 3 M Construction. On December 8, 1994, Sheppard was granted signature authority over 3 M Construction’s corporate bank account at First Citizens Bank. All corporate expenditures were paid out of this account, including payroll.
As Vice President of 3 M Construction, Sheppard was responsible for all the architectural design aspects of 3 M Construction’s business. In this position, Sheppard had primary responsibility for hiring any “design” consultants required for a project, which included architectural engineers, electrical engineers, and plumbing engineers and determining how much they were to be paid, even though he consulted with Murphy prior to any hires. All of these contractors were paid directly by 3 M Construction, not CHS Engineering, and were supervised by Sheppard in his position as Vice President of 3 M Construction.
*401In his position of Vice President of 3 M Construction from October 1994 until he left the corporation at the end of 1996, Sheppard was responsible for calculating the estimated construction costs of 3 M Construction. Sheppard also was responsible for the scheduling and procurement of supplies for the construction projects of 3 M. As a result of his knowledge of the costs of potential projects, Sheppard worked directly with Murphy in preparing bids for new projects and negotiated contracts with clients and subcontractors on behalf of 3 M Construction. Sheppard signed every construction contract entered into by 3 M Construction as its design agent.
Sheppard also was substantially involved in the financial affairs of the corporation from the time he was hired until he left the corporation at the end of 1996. Sheppard assisted Murphy in the hiring of Raye Albers as the bookkeeper of the corporation in the fall of 1994. After she was hired, Sheppard worked closely with Alb-ers to teach her the financial side of the construction business and to assist her with the corporation’s financial affairs. Sheppard assisted Albers in the preparation draw requests for 3 M Construction with respect to its various projects. Sheppard also sat down with Albers once a month to review the accounts receivable of the corporation and to develop a payment schedule for the corporation’s accounts payable. Sheppard then discussed the payment schedule with Murphy and they jointly agreed as to how the corporation’s liabilities would be paid. Both Sheppard and Murphy then signed checks on behalf of the corporation to pay the corporation’s expenses, including payroll. In fact, one of Sheppard’s duties as Vice President of the corporation was to sign checks for the corporation when necessary to pay corporate expenses. While Murphy was the sole owner of the corporation, Sheppard and Murphy were clearly partners in the business and jointly made corporate decisions, including the payment of corporate creditors.
During 1995, 3 M Construction’s business grew at a healthy pace. However, the corporation experienced cash flow problems. To this end, Sheppard made personal loans to 3 M Construction to assist with the payment of payroll. Further, from the time he was hired until the end of 1996, Sheppard personally guaranteed lines of credit for supplies on behalf of the corporation. Sheppard also co-signed loans for the purchase of a vehicle and office equipment for the corporation. As a result of the expansion of the business, Sheppard also began spending more time at the corporation’s construction sites and became more involved in the day-to-day management of the corporation’s projects. These management responsibilities continued through the end of 1996.
Sheppard first became aware that 3 M Construction had not timely paid its Form 941 federal employment tax liabilities at the end of March 1996 when Albers came to him with the corporation’s unfiled Form 941 tax return and informed him that the corporation had not paid its outstanding tax liability for that period. Sheppard then contacted with Neal Meyer, the corporation’s accountant, to discuss the unpaid taxes and'to develop a plan to pay the liabilities for the first quarter of 1996. Based upon these discussions, Meyer negotiated an installment plan with the IRS to satisfy this liability. However, despite Sheppard’s testimony that he monitored the installment agreement and recalled that payments were scheduled to satisfy the first quarter of 1996 liability, no payments were in fact made on this liability until 1997, after Sheppard had left the corporation.
• The tax problems continued to get worse for 3 M Construction during the second quarter of 1996. The corporation failed to make any federal'tax deposits with respect to its federal employment tax liability for this period. As a result, at the end of the quarter (June 30, 1996), the corporation had an unpaid federal employment tax lia*402bility of $18,550.72. Sheppard became aware of this liability in July 1996. However, Sheppard took no actions to assure that the liability was satisfied. While Sheppard had discussions with Albers and Murphy regarding the nonpayment of the tax liabilities, no payments in fact were made on the tax liability at the time even though the corporation had adequate funds available to satisfy the liability.
3 M Construction continued to shirk its tax responsibilities for the remainder of 1996. Despite accruing a federal employment tax liability in the amount of $33,434.49 for the third quarter of 1996 and a liability of $39,172.55 for the fourth quarter of 1996, the corporation made no payments with respect to these liabilities. Instead, the corporation continued to prefer its other creditors over the defendant.
Sheppard gave notice to Murphy that he was going to leave the corporation in September 1996. However, Sheppard continued to work until the end of 1996 and his responsibilities with respect to the corporation did not change after he gave notice of his departure. In fact, Sheppard continued to sign checks on behalf of the corporation up until December 31, 1996. Sheppard also received a salary from the corporation through the end of November 1996 and wrote the check paying his own salary for October 1996.
Despite 3 M Construction’s financial difficulties during the later part of 1996, the corporation had more than sufficient funds available to satisfy its federal employment tax liabilities. Further, despite his knowledge that the corporation had not paid its federal employment tax liabilities for the second, third, and fourth quarters of 1996, Sheppard continued to pay corporate creditors to the detriment of the defendant by signing corporate checks. The following chart reflects the funds available to 3 M Construction and the payments made on behalf of the corporation by Sheppard:
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While Sheppard signed 637 checks on 3 M Construction’s corporate account between May and December 1996 in the total amount of $555,806.65, none of these checks was to the Internal Revenue Service with respect to the corporation’s outstanding employment tax liabilities, even though sufficient funds were available in the corporation’s account to satisfy these liabilities.
Sheppard also made a $50,000 loan to 3 M Construction to assist the corporation with its financial difficulties. While it is unclear whether this loan was made before Sheppard left 3 M Construction or after he departed, Sheppard did not designate that these funds be applied to the corporation’s federal employment tax liability and took no actions to ensure that the funds were used for that purpose, even though he was aware that the corporation had not paid its tax liabilities.
ANALYSIS
I. Trust Fund Recovery Penalty
Sections 3102(a) and 3402(a) of the Internal Revenue Code (26 U.S.C.) require an employer to withhold federal income *403taxes and the employees’ share of social security taxes from the wages paid to its employees. The taxes withheld from each employee’s wages constitute a special fund held in trust under Section 7501 of the Code for the exclusive use of the United States. These “trust funds” shall not be used to pay the employer’s expenses, including salaries, or for any other purpose. The withholding tax liability arises as soon as wages are paid, not when the quarter’s tax return is due. Begier v. I.R.S., 496 U.S. 53, 61, 110 S.Ct. 2258, 110 L.Ed.2d 46 (1990).
Section 6672 of the Internal Revenue Code imposes liability for a company’s unpaid “trust fund” taxes upon any person “required to collect, truthfully account for, and pay over any tax ...” who willfully fails to do so. Section 6672, the “Trust Fund Recovery Penalty” provision, is a collection device designed to ensure that the unpaid trust fund taxes are paid, if not by the defaulting corporate employer, then by those persons responsible for the default. Smith v. United States, 894 F.2d 1549, 1553 (11th Cir.1990). It. is a liability separate and distinct from that of the delinquent corporation. Plett v. United States, 185 F.3d 216, 218 (4th Cir.1999).
Personal liability under Section 6672 properly is imposed upon the person or persons who were: “(1) responsible for collecting, accounting for, and remitting payroll taxes, and (2) who willfully failed ho do so.” Plett, 185 F.3d at 218; 26 U.S.C. § 6672; see O’Connor v. United States, 956 F.2d 48, 50 (4th Cir.1992), Malloy v. United States, 17 F.3d 329, 331 (11th Cir.1994); Williams v. United States, 931 F.2d 805, 810, reh’g granted and opinion supplemented, 939 F.2d 915 (11th Cir.1991); Smith, 894 F.2d at 1553; Thibodeau v. United States, 828 F.2d 1499, 1504 (11th Cir.1987); Roth v. United States, 779 F.2d 1567, 1571-72 (11th Cir.1986); Howard v. United States, 711 F.2d 729, 734-35 (5th Cir.1983). The person required to collect, account for, and remit payroll taxes is generally referred to as a “responsible person.” Plett, 185 F.3d at 219. However, a company may have multiple responsible persons for purposes of Section 6672. Id.; O’Connor, 956 F.2d at 50.
In a Section 6672 ease the Government first should submit evidence of a tax liability and assessment. Tax assessments are presumptively correct, Welch v. Helvering, 290 U.S. 111, 115, 54 S.Ct. 8, 78 L.Ed. 212 (1933), and Certificates of Assessments and Payments evidencing a tax assessment and liability are presumed correct and establish a prima facie case of liability. United States v. Pomponio, 635 F.2d 293, 296 (4th Cir.1980); United States v. Chila, 871 F.2d 1015, 1017-18 (11th Cir.), cert. denied, 493 U.S. 975, 110 S.Ct. 498, 107 L.Ed.2d 501 (1989).
Once the Government has submitted evidence that taxes were assessed and unpaid, individuals against whom the trust fund recovery penalty has been assessed have the burden of proving by a preponderance of the evidence that they were not “responsible persons” or that they did not “willfully” fail to pay over the unpaid trust fund taxes. Pomponio, 635 F.2d at 296 (4th Cir.1980); see In re Landbank Equity Corp., 973 F.2d 265, 270-271 (4th Cir.1992).1
The Certificate of Assessments and Payments admitted into evidence with respect to the Trust Fund Recovery Penalty assessment against the plaintiff established a prima facie case of the plaintiffs liability. The burden therefore shifted to the plaintiff to prove, by a preponderance of the evidence, that (1) he was not a “responsible officer” or (2) that he did not “willfully” fail to pay over the unpaid trust taxes to *404the defendant. The plaintiff has failed to meet its burden on either point.
(a) Responsibility
In order to determine whether an individual is a responsible officer, this court must “undertake a pragmatic, substance-over-form inquiry into whether an officer or employee so ‘participate[d] in decisions concerning creditors and disbursement of funds’ that he effectively had the authority — and hence a duty — to ensure payment of the corporation’s payroll taxes.” Plett, 185 F.3d at 219 (citing O’Connor, 956 F.2d at 51). The important inquiry “is whether the person had the ‘effective power’ to pay the taxes — that is, whether he had the actual authority or ability, in view of his status within the corporation, to the pay the taxes owed.” Plett, 185 F.3d at 219. The following factors serve as indicia of the requisite authority:
1. Served as an officer of the company or as a member of its board of directors;
2. Controlled the company’s payroll;
3. Determined which creditors to pay and when to pay them;
4. Participated in the day-to-day management of the corporation;
5. Possessed the power to write checks; and
6. Had the ability to hire and fire employees.
Id.; Thibodeau, 828 F.2d at 1503-04; George, 819 F.2d at 1011; Roth, 779 F.2d at 1569.
Based upon the evidence presented at trial, there is no doubt that Sheppard was a responsible officer of 3 M Construction. Sheppard’s responsibilities as Vice President of the corporation and his actions in that position clearly satisfy the standard enunciated above as he satisfied all six factors enunciated in Plett.
First, Sheppard was an officer of the corporation as he was named Vice President of the corporation by its President and only shareholder. Second, Sheppard also had control over the company’s payroll. Sheppard was primarily responsible for determining the salaries of all the design contractors and employees of 3 M Construction and worked closely with the company’s bookkeeper to schedule payments of the corporation’s payroll. Third, on most occasions, Sheppard and Murphy jointly determined what creditors to pay and when to pay them. Fourth, Sheppard participated in the day-to-day management of the corporation as he oversaw all of the design aspects of the business, while also managing construction projects and reviewing the day-to-day finances of the corporation. Fifth, Sheppard had the ability to write checks on behalf of the corporation and exercised this authority thoroughly during periods at issue during 1996. Sixth, as head of the design aspects of the corporation, Sheppard had the ability to hire and fire employees in this area, even though he consulted with Murphy before making these decisions.
The plaintiff has argued that he was not a responsible officer of 3 M Construction because he was not “ultimately” responsible for any decisions made by the corporation as Murphy was the sole shareholder of the corporation and could fire him at any time. However, this argument is without merit as liability under Section 6672 is not limited to the person with ultimate fiscal control, but encompasses all persons in a position to exercise authority over the corporation’s financial affairs, which included Sheppard. Plett, 185 F.3d at 222, Smith, 894 F.2d at 1553; Thibodeau, 828 F.2d at 1504; George, 819 F.2d at 1011; Roth, 779 F.2d at 1572; Howard, 711 F.2d at 734-35. Further, ownership of the company is not necessary for an individual to be a responsible officer. Plett, 185 F.3d at 222; Thibodeau, 828 F.2d at 1504. The fact that one responsible person reported to another and served in his or her position at the will of another responsible person does not affect the duty to collect, account for or pay over *405trust fund taxes. Plett, 185 F.3d at 221; Smith, 894 F.2d at 1553; Thibodeau, 828 F.2d at 1504; Roth, 779 F.2d at 1572.
Further, even if Sheppard’s unconvincing assertions that he had no independent authority to sign checks for the payment of taxes without the express approval of Murphy were true, this would still not reheve him of responsibility under Section 6672. An otherwise “responsible person” is not relieved of responsibility despite instructions not to pay the trust fund taxes by an owner or CEO of the company who has the power to fire that individual. Thibodeau, 828 F.2d at 1504; Roth, 779 F.2d at 1572; Howard, 711 F.2d at 734.
(b) Willfulness
To determine whether a responsible person “willfully” failed to collect, account for or remit payroll taxes to the United States, the court must “inquire whether the ‘responsible person’ had ‘knowledge of nonpayment or reckless disregard of whether the payments were being made.’ ” Plett, 185 F.3d at 219 (citing Turpin v. United States, 970 F.2d 1344, 1347 (4th Cir.1992)). A responsible person’s intentional preference of other creditors over the United States with knowledge of the nonpayment of payroll taxes establishes his willfulness as a matter of law. Plett, 185 F.3d at 219; Pomponio, 635 F.2d at 298. An intentional preference is shown by establishing that the responsible person knew or recklessly disregarded the existence of an unpaid payroll tax deficiency. Plett, 185 F.3d at 219; Turpin, 970 F.2d at 1347. A showing of willfulness does not mean that the responsible person acted with a “bad motive or the specific intent to defraud the Government or deprive it of revenue.” In re Lynch, 187 B.R. 353, 357 n. 9 (Bankr.N.D.Ala.1995).
As Sheppard was responsible officer of 3 M Construction, his failure to pay the trust fund taxes of the corporation was necessarily willful. Sheppard was aware of the corporation’s employment tax deficiencies for the second quarter of 1996, the first period at issue, in July 1996. Despite this knowledge, Sheppard continued to prefer other creditors over the defendant by writing checks to satisfy corporate liabilities, including his own salary. Sheppard’s preference of other creditors over the defendant was substantial, as he wrote 637 checks totaling $555,806.65 during the second, third, and fourth quarters of 1996 without making any payments to the defendant for employment taxes even though corporate funds were available during to pay the outstanding liability for each period. In fact, nearly five’ times the necessary funds to satisfy the corporation’s trust fund tax.liability were deposited in the corporation’s bank account during December 1996 alone.
As the plaintiff was a responsible officer of 3 M Construction during the second, third, and fourth quarters of 1996 and he willfully failed to ensure that the corporation’s, trust fund taxes were satisfied for this period, the Trust Fund Recovery Penalty assessment against the plaintiff in the amount of $75,608.97 -must be upheld in its entirety.
II. Attorney’s fees
The plaintiff has also petitioned this court for an award of administrative and litigation costs with respect to this matter. In order for an award of costs, the plaintiff must have been a “prevailing party” in this litigation. 26 U.S.C. § 7430(a). In order to ' be • á prevailing party, the plaintiff must have substantially prevailed with respect to the amount in controversy or substantially prevailed with respect to the most significant issue or set of issues presented in' this litigation, 26 U.S.C. § 7430(c)(4)(A).
As the plaintiff has not substantially prevailed as to any issue in this matter, he is not a prevailing party in this litigation and is not entitled to an award of administrative costs or litigation costs.
*406JUDGMENT IS ORDERED in favor of the defendants on both counts of the complaint.
AND IT IS SO ORDERED.
. The Supreme Court has decided to consider the issue of the burden of proof in taxes that are presented to the Bankruptcy Court. Raleigh v. Illinois Dept. of Revenue, - U.S. -, 120 S.Ct. 784, 145 L.Ed.2d 659 (2000), granting certiorari in In re Stoecker, 179 F.3d 546 (7th Cir.1999). | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493082/ | MEMORANDUM OF OPINION
EUGENE R. WEDOFF, Bankruptcy Judge.
This adversary proceeding has been brought against the debtor in this Chapter 11 case by a seller of fresh produce, seeking to enforce a trust created by the Perishable Agricultural Commodities Act (“PACA”). The proceeding is now before the court on motions for injunctive relief, filed by the plaintiff, and a motion to dismiss, filed by the debtor. For the reasons discussed below, because the debtor is a restaurant whose purchases of perishable agricultural commodities did not exceed $230,000 annually, the debtor is not a “dealer” subject to PACA. Accordingly, plaintiffs motions for injunctive relief will be denied, and the debtor’s motion to dismiss granted.
Jurisdiction
Whether property of the debtor is subject to a trust affects the nature and extent of property of the debtor’s bankruptcy estate, and so a proceeding to enforce a trust is a core proceeding under 28 U.S.C. § 157(b)(2)(A). See Zimmerman v. First Union Nat’l Bank (In re Silva), 185 F.3d 992, 994 (9th Cir.1999) (determinations of the nature and extent of estate property are core proceedings). Therefor e, this court may enter a final order deciding the pending motions.1
Findings of Fact
The debtor in this Chapter 11 case, Reservoir Dogs, Inc., does business as “Johnny D’s,” and will be referred to by that name in this opinion. Johnny D’s has only one business — the operation of a restaurant and bar located in Schaumburg, Illinois. Sysco Food Services Chicago, Inc. (“Sysco”) is in the business of selling and shipping fresh produce to restaurants, and Johnny D’s was one of its customers. In the course of their dealings, Sysco shipped to Johnny D’s, on at least one occasion, produce totalling more than one ton in a single day. However, the invoice cost of the produce purchased by Johnny D’s never exceeded $230,000 in any calendar year.
On July 24, 2000, Johnny D’s filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Title 11, U.S.C.). At the time of the bankruptcy filing, Sysco held unpaid invoices in the amount of $46,796.90 for produce sold to Johnny D’s.
On August 21, 2000 Sysco filed an adversary complaint and two motions against Johnny D’s. The adversary complaint alleges that Johnny D’s is a “dealer” subject to the provisions of the Perishable Agricultural Commodities Act of 1930 as amended (“PACA”) and seeks to enjoin Johnny D’s from transferring or dissipating its cash (asserted to be trust funds under PACA) to the extent of Sysco’s claim. The motions sought a temporary restraining order and preliminary injunction to prevent Johnny D’s from any such transfer or dissipation pending final adjudication of the complaint.
After receiving briefs on the issues raised by the complaint and motions, and after a hearing at which the parties agreed to the facts stated above, the court took the matter under advisement.
Conclusions of Law
PACA and its history. Resolving the issues now before the court requires *424an understanding of several aspects of the history of PACA. As the Second Circuit explained in George Steinberg & Son, Inc. v. Butz, 491 F.2d 988, 990 (2d Cir.1974), the Perishable Agricultural Commodities Act was passed in 1930 “for the purpose of regulating the interstate business of shipping and handling perishable agricultural commodities such as fresh fruit and vegetables” so as to prevent “fraudulent rejections” by purchasers of such commodities in times of declining market prices. PACA, in its original form, “[essentially ... provide[d] a system of licensing and penalties for violations” and applied this system to any buyer who was a “commission merchant, dealer, or broker.” Id.
1. The definition of “dealer.” In the present case, Sysco only argues for PACA applicability on the ground that Johnny D’s is a “dealer” (rather than a commission merchant or broker) regulated by PACA. Originally, PACA defined “dealer,” in relevant part, as follows:
The term ‘dealer’ means any person engaged in the business of buying or selling in carloads any perishable agricultural commodity in interstate or foreign commerce, except that ... (B) no person buying any such commodity solely for sale at retail shall be considered as a ‘dealer’ in respect of any such commodity in any calendar year until his purchases of such commodity in carloads in such year are in excess of twenty....
PACA, ch. 436, § 1(b)(6), 46 Stat. 531, 532 (1930); see Consolidated Citrus Co. v. Goldstein, 214 F.Supp. 823, 825 n. 3 (E.D.Pa.1963) (quoting the statutory text). In 1962, the definition of “dealer” was changed to the current form, removing the reference to “carloads,” and inserting a dollar value in the retail exception:
The term “dealer” means any person engaged in the business of buying or selling in wholesale or jobbing quantities, as defined by the Secretary [of Agriculture], any perishable agricultural commodity in interstate or foreign commerce, except that ... (B) no person buying any such commodity solely for sale at retail shall be considered as a “dealer” until the invoice cost of his purchases of perishable agricultural commodities in any calendar year are in excess of $230,000....
7 U.S.C. § 499a(b)(6).2 Thus, from its inception to the present, PACA has defined “dealer” as including a buyer of perishable agricultural products in quantities above a defined threshold, but has provided an exception for buyers who purchase “solely for sale at retail” unless these purchases were at a level substantially higher than the ordinarily applicable purchase threshold.
2. The USDA’s determination that restaurants are not “dealers.” As outlined above, there is nothing in the definition of “dealer” under PACA that would prevent its being applied to restaurants. However, from the inception of PACA, the Secretary of Agriculture declined to subject restaurants to PACA’s licensing and regulatory system. As noted in Royal Foods Co. v. L.R. Holdings, Inc., 1999 WL 1051978 at *4 (N.D.Cal.1999):
In 70 years of administering the Act, the Department [of Agriculture] has never licensed restaurants, regardless of what quantities of perishable goods they buy, even though the Act states that “no person shall at any time carry on the business of a ... dealer ... without a license valid and effective at such time.” 7 U.S.C. § 499c(a).
Moreover, in explaining a regulation adopted in 1996, the Secretary of Agriculture stated that this omission reflected a *425policy determination: “Restaurants traditionally have not been considered subject to PACA by USDA or Congress unless the buying arm of the restaurant is a separate legal entity, and is buying for and/or reselling the product to another entity.” 61 Fed.Reg. 13385-01, 1996 WL 134593 at 13386 (1996); see also Magic Restaurants, Inc. v. Bowie Produce Co. (In re Magic Restaurants, Inc.), 205 F.3d 108, 114 n. 7 (3d Cir.2000) (citing private correspondence from the USDA confirming its position that “[rjestaurants are not considered ‘dealers’ ”.).
3. Creation of the statutory trust. In 1984, two years after the last change in the statutory definition of “dealer” discussed above, Congress added the trust provisions on which Sysco now relies, providing, in part:
Perishable agricultural commodities received by a ... dealer ... and all inventories or food or other products derived from perishable agricultural commodities, and any receivables or proceeds from the sale of such commodities or products, shall be held by such ... dealer ... in trust for the benefit of all unpaid suppliers or sellers of such commodities ....
7 U.S.C. § 499e(e)(2). The purpose of this new provision was “to increase the legal protection for unpaid sellers and suppliers of perishable agricultural commodities until full payment of sums due have been received by them.” H.R.Rep. No. 98-543, at 2 (1983), reprinted in 1984 U.S.C.C.A.N. 405, 406. The definition of “dealer” was not changed.
4. Lower license fees for “retailers.” The most recent amendments to PACA, in 1995, included provisions gradually eliminating the license fee that had been charged to certain dealers — retailers and grocery wholesalers — who were subject to PACA regulation. Pub.L. 104-48, § 3. The House Report accompanying this legislation explained its operation, in part, as follows:
Section 3 phases out license fees for retailers and grocery wholesalers. It defines the term “retailer” as a person who is a dealer engaged in the business of selling any perishable commodity at retail. Approximately 4,000 retailers are currently estimated to be licensed under PACA. Those businesses such as grocery stores and other like businesses that predominantly serve those consumers purchasing food for consumption at home or off the premises of the retail establishment are considered to be included in the definition of retailer. It is not the intent of the Committee that the definition of retailer be construed to include foodservice establishments such as restaurants, or schools, hospitals and other institutional cafeterias.
H.R.Rep. No. 104-207, at 7 (1995), reprinted in 1995 U.S.C.C.A.N. 453, 454.3 Again, the 1995 amendments made no change in the definition of “dealer.”
Restaurants as “dealers” under PACA. The history of PACA, outlined above, provides the background for resolving the dis-positive issues raised by the pending motions. The first issue is whether, simply due to its status as a restaurant, Johnny D’s is excluded from regulation under PACA. This issue is certainly debatable. On one hand, the statutory definition of a “dealer,” subject to PACA regulation, would plainly include restaurants — all buyers of sufficient amounts of fresh produce (and other perishable agricultural products) are covered by the definition of § 1(b)(6) of PACA (7 U.S.C. § 499a(b)(6)), as set out above. This has led several courts to conclude that particular restaurants were “dealers” under PACA, based on the “plain meaning” approach to statutory construction. See, e.g., In re Magic Restaurants, Inc., 205 F.3d 108, 114-15 (3d Cir.2000); Royal Foods Co. v. L.R. *426Holdings, Inc., 1999 WL 1051978 at *4 (N.D.Cal.1999); Sysco Food Services of Seattle v. County Harvest Buffet Restaurants, Inc. (In re Country Harvest Buffet Restaurants, Inc.), 245 B.R. 650 (9th Cir. BAP 2000). On the other hand, the consistent and longstanding contrary interpretation of the Secretary of Agriculture/USDA has led other courts and judges to conclude that restaurants are excluded from the definition of dealer. See, e.g., In re Old Fashioned Enterprises, Inc., 245 B.R. 639, 643-44 (D.Neb.2000); In re The Italian Oven, Inc., 207 B.R. 839, 843-44 (Bankr.W.D.Pa.1997); In re Magic Restaurants, Inc., 205 F.3d 108, 117-18 (3d Cir.2000) (Rendell, J., dissenting).
The opinions giving deference to the administrative interpretation of PACA are supported by the reenactment doctrine. As explained by the Supreme Court in Lorillard v. Pons, 434 U.S. 575, 580, 98 S.Ct. 866, 870, 55 L.Ed.2d 40 (1978), “Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it re-enacts a statute without change.... ” This presumption may be particularly appropriate in the present situation. As noted above, Congress reenacted PACA in 1995 without changing the definition of dealer, and the legislative history of the 1995 amendments appears to affirmatively adopt the USDA’s exclusion of restaurants from that definition. As noted above, the House Report accompanying this legislation expressly states an intent that restaurants should not be included in the class of “retailers” whose license fees would gradually be eliminated. The only apparent ground for this exclusion is that restaurants are not “dealers” subject to licensing under PACA — precisely the position adopted by the USDA.4 Certainly, if Congress had believed that restaurants were dealers subject to PACA licensing, it gave no reason for excluding them from the fee reductions prescribed by the 1995 legislation.
However, it is unnecessary to reach the question whether restaurants generally are included in PACA’s definition of “dealer,” since it is clear that Johnny D’s is within the definition’s “retail” exception.
Restaurants as “retail” businesses. The retail exception to PACA’s definition of dealer, as discussed above, provides that “no person” shall be considered a “dealer” if the person purchases fresh produce “solely for sale at retail” in quantities not exceeding $230,000 annually. Since it is acknowledged that Johnny D’s annual purchases of perishable agricultural commodities never exceeded $230,000, Johnny D’s would be within the exception as long as its purchases were solely for sale at retail.
As the term is ordinarily used, there can be little question that a restaurant is a “retail” operation. The dictionary definition of the noun “retail” is “the sale of commodities or goods in small quantities to ultimate consumers — opposed to wholesale.” Webster’s Third New International Dictionary 1938 (1981). ‘Wholesale,” in turn, is defined as “the sale of goods or commodities in quantity usu[ally] for resale (as by a retail merchant).” Id. at 2611. Restaurants, of course, do not sell food for resale — rather, they serve individual portions to the ultimate consumers of their products. Thus, under the ordinary meaning of the words, restaurants must be considered retail, rather than wholesale businesses.
Sysco attempts to avoid this conclusion with two unpersuasive arguments. First, it contends that because restaurants process fresh produce before they serve it, they cannot be retailers. Yet there is nothing in the definition of “retail” that precludes the adding of value prior to sale. A “retail” bakery, for example, may well *427transform flour, sugar, eggs and shortening into the breads and pastries ultimately offered to its customers. This hardly turns a neighborhood shop into a wholesale bakery. Sysco’s argument on this point simply ignores the ordinary meaning of “retail.”
Sysco’s other argument focusses on the legislative history of the 1995 amendments to PACA. As discussed above, the House Report to this legislation states the intent that restaurants should not be considered within the newly created class of “retailers.” From this, Sysco deduces a congressional understanding that restaurants do not engage in “sales at retail.” This argument is plainly mistaken. The only reason that the 1995 legislation created the new class of “retailers” was to effect a gradual elimination of license fees for that class, and, as noted above, the apparent reason for Congress’s exclusion of restaurants from the class of “retailers” was its understanding that restaurants were not subject to licensing under PACA. Nothing in the House Report suggests that because restaurants should not be considered “retailers” for purposes of license fee reductions (as defined in 7 U.S.C.-§ 499a(b)(ll)), they do not sell “at retail” for purposes of the exception to the definition of dealer in 7 U.S.C. § 499(a)(b)(6). Indeed, another section of the House Report — using “retailer” in its ordinary meaning — states expressly that restaurants are retailers. In describing entities in the “fruit and vegetable marketing chain,” the Report notes that “[t]he chain begins with the grower who raises produce for marketing and ends with a retailer defined as a business that exclusively sells to consumers.” H.R.Rep. No. 104-207, at 13 (1995), reprinted in 1995 U.S.C.C.A.N. 453, 460. The Report then defines several of these entities, including shippers, brokers, and commission merchants, and concludes with a definition of “retailer” — “a business only selling to consumers; includes retail grocery chain stores, independent retailers, institutions and restaurants.... ” Id.
There appears to be no prior reported judicial decision construing the retail exception. However, it is noteworthy that the Third Circuit concluded that a particular restaurant was a “dealer” under PACA only because its purchases exceeded the amount required for the retail exception: “[W]e are constrained ... to hold that a restaurant ... which purchases produce in wholesale or jobbing quantities (and in excess of $230,000 per year), is a ‘dealer’ under 7 U.S.C. § 499a(b)(6)....” Magic Restaurants, 205 F.3d at 114-15.
Johnny D’s, having purchased produce not in excess of $230,000 per year, solely for sale at retail, is excepted from the definition of “dealer” under 7 U.S.C. § 499a(b)(6), even if the definition would apply to restaurants making larger annual purchases. Accordingly, Johnny D’s is not subject to regulation by PACA, and there is no basis for the relief sought in Sysco’s complaint or its motions for injunctive relief.
Conclusion
For the reasons stated above, the debt- or’s motion to dismiss is granted, and the motions of Sysco Food Services Chicago, Inc. for a preliminary injunction and a temporary restraining order are denied. A separate order will be entered consistent with this opinion.
. Federal district courts have exclusive jurisdiction over bankruptcy cases. 28 U.S.C. § 1334(a). However, pursuant to 28 U.S.C. § 157(a), district courts may refer bankruptcy cases to the bankruptcy judges for their district, and, by Internal Operating Procedure 15(a), the District Court for the Northern District of Illinois has made such a reference of the pending case. When presiding over a referred case, a bankruptcy judge has jurisdiction, under 28 U.S.C. § 157(b)(1), to enter appropriate orders and judgments as to core proceedings within the case.
. The Secretary of Agriculture has defined "wholesale or jobbing quantities” as "aggregate quantities of all types of produce totaling one ton (2,000 pounds) or more in weight in any day shipped, received, or contracted to be shipped or received.” 7 C.F.R. § 46.2(x). In 1962, the exception for "purchases solely for sale at retail” had a limit of $90,000. Pub.L. 87-725. The limit was raised to $100,000 in 1969 (Pub.L.91-107), to $200,000 in 1978 (Pub.L.95-562), and to the present $230,000 in 1981 (Pub.L.97-98).
. The new definition of “retailer/' added to PACA by the 1995 legislation, is set out at 7 U.S.C. § 499a(b)(ll): "The term 'retailer' means a person that is a dealer engaged in the business of selling any perishable agricultural commodity at retail.''
. In adopting the 1996 regulation noted above, the USDA rejected a comment from a restaurant expressing concern that the regulation "might bring restaurants under the jurisdiction of PACA.” The agency responded simply, "Since restaurants are not subject to the PACA, [the] change in the regulation will not impact restaurants.” 61 Fed.Reg. 13385-01, 1996 WL 134593 at *13386. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493083/ | ORDER DISALLOWING CLAIM
PETER J. McNIFF, Bankruptcy Judge.
In this reopened chapter 7 case, the debtors objected to allowance of the claim filed by the chapter 7 trustee on behalf of the Converse County Treasurer. The Treasurer filed a response to the claim objection, and the court held a hearing on June 13, 2000.
No supporting documentation is attached to the claim nor was it introduced at the hearing. On order of the court, the Treasurer provided the documentation, and having considered the arguments of the parties and the supplemental documentation, the court finds and- rules as follows.
The determinative issue in this case is whether the debtors have personal liability for unpaid ad valorem taxes which are the basis of the Treasurer’s claim. The taxes were imposed against personal property of the debtors during the tax years 1987 through 1994. The majority of the taxes accrued on a 1976 mobile home. The liquidated amount of the claim is $948.84. The debtors object that a Wyoming taxpayer has no personal liability for unpaid ad valorem taxes and therefore, the taxes do not create an allowable unsecured claim entitled to distribution from the estate.
Taxation is a legislative function and taxes can only be assessed through statutory authority. Chevron U.S.A., Inc. v. State, 918 P.2d 980, 984 (Wyo.1996). These Converse County delinquent taxes are personal property taxes imposed under Wyoming’s Ad Valorem Taxation statutes, Wyoming Statutes Ann. §§ 39-13-101 through 111 (Lexis 1999).
*484Ad valorem taxes are generally imposed by jurisdiction over the actual property being assessed. On review of the Wyoming ad valorem tax statutes, the court found no statutory provision creating personal liability for the taxpayer. The ad valorem statutes are also different from the statutes imposing sales and use tax. Those sections contain provisions specifically imposing liability on the taxpayer. See, Wyo. Stat. Ann. §§ 39-15-103(c)(ii) & 39 — 16—103(c)(ii) (Lexis 1999).
The enforcement of a delinquent ad va-lorem tax is by imposition of a lien and subsequent foreclosure. Wyo. Stat. Ann. § 39-13-108(d)(Lexis 1999). The enforcement provisions also state that “[n]o deficiency judgment shall be rendered against any party to an action pursuant to this subsection.” Wyo. Stat. Ann. § 39-13-108(d)(iv) (Lexis 1999).
Although discussing an earlier tax statute, the Wyoming Supreme Court has stated that there is no taxpayer liability for assessed property taxes. Big Horn County, Board of County Com’rs of v. Bench Canal Drainage Dist., 56 Wyo. 260, 108 P.2d 590, 592 (1940). Based on the apparent lack of specific language imposing personal liability on a taxpayer for personal property taxes and the other factors discussed, the court rules the debtors have no personal liability for the ad valorem taxes which constitute the basis of the Treasurer’s claim.
The effect of such a conclusion is fatal to allowance of a claim in a chapter 7 case. In a chapter 11 case, a nonrecourse creditor’s claim is specifically entitled to distribution from the estate. 11 U.S.C. § 1111(b). In re Krisch Realty Associates, L.P., 174 B.R. 914, 918 (Bankr.W.D.Va.1994). However, there is no provision under chapter 7 for a nonrecourse creditor to assert a claim against the estate. In re Allen-Main Associates Ltd. Partnership, 223 B.R. 59, 63 (2nd Cir. BAP 1998).
Under 11 U.S.C. § 502(b)(1), a claim that is unenforceable against the debtor must be disallowed. To the extent the Converse County Treasurer has an enforceable lien under Wyoming law, that lien is unaffected by this ruling.
Accordingly, IT IS ORDERED that unsecured claim number 21 of the Converse County Treasurer for unpaid ad va-lorem taxes is disallowed. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484459/ | DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
TORRIS BERNARD HILL,
Appellant,
v.
STATE OF FLORIDA,
Appellee.
No. 4D22-1618
[November 17, 2022]
Appeal of order denying rule 3.800 motion from the Circuit Court for
the Nineteenth Judicial Circuit, Martin County; Sherwood Bauer, Jr.,
Judge; L.T. Case No. 43-2003-CF-001639A.
Torris Bernard Hill, Arcadia, pro se.
No appearance required for appellee.
PER CURIAM.
Affirmed.
GERBER, CONNER and KUNTZ, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484460/ | DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
SCHNEIDER ST. FLEUR,
Appellant,
v.
STATE OF FLORIDA,
Appellee.
No. 4D21-3584
[November 17, 2022]
Appeal from the County Court for the Fifteenth Judicial Circuit, Palm
Beach County; Mark T. Eissey, Judge; L.T. Case No. 502021MM0005284.
Carey Haughwout, Public Defender, and Benjamin Eisenberg, Assistant
Public Defender, West Palm Beach, for appellant.
Ashley Moody, Attorney General, Tallahassee, and Sorraya M. Solages-
Jones, Assistant Attorney General, West Palm Beach, for appellee.
PER CURIAM.
Affirmed.
CIKLIN, LEVINE and KUNTZ, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484458/ | DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
VATESHEA ANORA CURE,
Appellant,
v.
LAGO FUNDING CORP.,
Appellee.
No. 4D21-3555
[November 17, 2022]
Appeal from the County Court for the Seventeenth Judicial Circuit,
Broward County; Robert W. Lee, Judge; L.T. Case No. COCE21-050755.
Vateshea Anora Cure, Pembroke Pines, pro se.
Amanda C. Rolfe of Rolfe & Lobello, P.A., Jacksonville, for appellee.
PER CURIAM.
Affirmed.
CIKLIN, LEVINE and KUNTZ, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing. | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484457/ | Supreme Court of Florida
____________
No. SC21-1407
____________
FRED SOMERS,
Appellant,
vs.
UNITED STATES OF AMERICA,
Appellee.
November 17, 2022
CANADY, J.
This Court has for review two questions of Florida law certified
by the United States Court of Appeals for the Eleventh Circuit in
Somers v. United States, 15 F.4th 1049, 1056 (11th Cir. 2021),
regarding an element of Florida’s assault statute, section
784.011(1), Florida Statutes. We have jurisdiction. See art. V,
§ 3(b)(6), Fla. Const.
I. BACKGROUND AND CERTIFIED QUESTIONS
In 2013, Fred Somers pleaded guilty to a federal indictment
charging possession of a firearm by a convicted felon in violation of
18 U.S.C. § 922(g)(1). Based on his four prior “violent felony”
convictions, the district court determined that Somers should be
sentenced to enhanced penalties under the Armed Career Criminal
Act (ACCA), 18 U.S.C. § 924(e), and imposed a sentence of 211
months’ imprisonment. 1 Critical to the district court’s imposition of
the ACCA-enhanced sentence was its conclusion that Somers’s
1998 Florida conviction for aggravated assault with a deadly
weapon under section 784.021(1)(a), Florida Statutes (1997),
qualifies as a “violent felony” under the ACCA.
Somers appealed his federal conviction and sentence for
possession of a firearm by a convicted felon, and the Eleventh
Circuit affirmed. United States v. Somers, 591 F. App’x 753 (11th
Cir. 2014). In 2016, Somers filed a collateral challenge to his
enhanced sentence under 28 U.S.C. § 2255. He argued, inter alia,
that his Florida aggravated assault conviction was not a “violent
1. Under the ACCA, a defendant who unlawfully possesses a
firearm and has three prior convictions for either “serious drug
offenses” or “violent felonies” is subject to enhanced penalties.
Specifically, a ten-year maximum sentence becomes a fifteen-year
mandatory minimum sentence with a statutory maximum term of
life. 18 U.S.C. § 924(e)(1).
-2-
felony” under the ACCA because it lacked the requisite mens rea.
At the time, Eleventh Circuit precedent foreclosed Somers’s
argument, which resulted in the district court denying his motion.
Nonetheless, the district court granted a certificate of appealability,
concluding that “reasonable jurists could disagree on whether
aggravated assault under Florida law is a violent felony under the
element[s] clause” of the ACCA. United States v. Somers, 4:12CR6-
RH-MJF, 2019 WL 1236055, at *3 (N.D. Fla. Mar. 18, 2019), aff’d,
799 Fed. Appx. 691 (11th Cir. 2020), vacated and superseded on
reh’g, 15 F.4th 1049. To qualify as a violent felony under the
elements clause of the ACCA, the predicate conviction must have
“as an element, the use, attempted use, or threatened use of
physical force against the person of another.” 18 U.S.C.
§ 924(e)(2)(B).
On appeal to the Eleventh Circuit, Somers maintained that the
Florida offense of aggravated assault is not a “violent felony” under
the ACCA because it can be committed recklessly and therefore
does not satisfy the elements clause. The Eleventh Circuit initially
affirmed the district court’s denial of the § 2255 motion based on its
prior precedent in Turner v. Warden Coleman FCI, 709 F.3d 1328,
-3-
1337-38 (11th Cir. 2013), abrogated on other grounds by Johnson v.
United States, 576 U.S. 591 (2015), concluding that a Florida
aggravated assault was a “violent felony” because “by its definitional
terms,” its first element—a simple assault—included an intentional
and unlawful threat “to do violence” to the person of another.
Somers v. United States, 799 F. App’x 691, 692 (11th Cir. 2020).
Somers filed a petition for rehearing in which he asked the
Eleventh Circuit to revisit its precedent. In June 2021, while the
petition for rehearing was still pending, the United States Supreme
Court issued its opinion in Borden v. United States, 141 S. Ct. 1817,
1821-22, 1834 (2021) (plurality), holding that a crime that requires
only a mens rea of recklessness cannot qualify as a “violent felony”
as defined by the ACCA’s elements clause.
After supplemental briefing by the parties regarding whether a
Florida aggravated assault conviction still qualifies as an ACCA
predicate conviction in light of Borden, the Eleventh Circuit granted
Somers’s petition for rehearing and certified the following two
questions of Florida law to this Court:
1. Does the first element of assault as defined in Fla.
Stat. § 784.011(1) -- “an intentional, unlawful threat by
-4-
word or act to do violence to the person of another” --
require specific intent?
2. If not, what is the mens rea required to prove that
element of the statute?
Somers, 15 F.4th at 1056.2
Before we can answer the certified questions, we must clarify
what is being asked. For the most part, the parties interpret the
first certified question as simply asking, “Is assault a specific intent
crime in Florida?” “Specific intent is most commonly understood as
‘designat[ing] a special mental element which is required above and
beyond any mental state required with respect to the actus reus of
2. The reason the Eleventh Circuit is asking about simple
assault rather than aggravated assault—which is the predicate
felony at issue—is because
[t]o decide whether an offense satisfies the elements
clause, courts use the categorical approach. . . . The
focus is . . . on whether the elements of the statute of
conviction meet the federal standard. Here, that means
asking whether a state offense necessarily involves the
defendant’s “use, attempted use, or threatened use of
physical force against the person of another.” If any—
even the least culpable—of the acts criminalized do not
entail that kind of force, the statute of conviction does
not categorically match the federal standard, and so
cannot serve as an ACCA predicate.
Borden, 141 S. Ct. at 1822 (citations omitted).
-5-
the crime.’ ” Somers, 15 F.4th at 1053 (quoting 1 Wayne R. LaFave,
Substantive Criminal Law § 5.2(e) (3d ed. 2017)). But the
Government correctly recognizes that whether Florida assault is a
specific- or general-intent crime “is largely beside the point.”
Amended Response Br. of Appellee at 17. Indeed, if the Eleventh
Circuit were simply asking whether assault in Florida is a specific
intent crime, as that phrase is most commonly understood, the
answer would do nothing to help the Eleventh Circuit determine
whether Somers’s Florida aggravated assault conviction qualifies as
a “violent felony” under the ACCA’s elements clause. Further, the
most common understanding of “specific intent” is not the only way
in which the phrase is understood or used. “Specific intent” may be
used “to denote an intent to do [a specific act] at a particular time
and place,” LaFave, supra, § 5.2(e); that is, “intentionally engag[ing]
in specific conduct,” id. at § 5.2(a). As the Eleventh Circuit
recognizes, “specific intent” can also mean “[t]he intent to
accomplish the precise criminal act that one is later charged with.”
United States v. Ortiz, 318 F.3d 1030, 1036 n.10 (11th Cir. 2003)
(quoting Black’s Law Dictionary 814 (Deluxe 7th ed. 1999)). To
discern what the Eleventh Circuit is actually asking in the first
-6-
certified question, we look to the United States Supreme Court’s
opinion in Borden, 141 S. Ct. 1817—which was the catalyst for the
certified questions—and then to what the Eleventh Circuit said in
Somers.
In Borden, the Supreme Court held that the phrase “use . . .
against the person of another” in the ACCA’s elements clause “sets
out a mens rea requirement—of purposeful or knowing conduct.”
141 S. Ct. at 1828, 1829 n.6. It also stated that the elements
clause “demands that the perpetrator direct his action at, or target,
another individual.” Id. at 1825. A crime that can be committed
with a mens rea of mere recklessness therefore cannot qualify as a
crime of violence under the elements clause because “[r]eckless
conduct is not aimed in [the] prescribed manner.” Id.; see also id.
at 1833 (“ ‘[A]gainst the person of another,’ when modifying the ‘use
of physical force,’ introduces that action’s conscious object. So it
excludes conduct, like recklessness, that is not directed or targeted
at another.” (citation omitted)). It should be noted that the term
“specific intent” is not found in the Borden opinion. That term did
not become prominent in Somers’s proceedings until Somers
-7-
included it in the supplemental briefing that was ordered by the
Eleventh Circuit in the wake of Borden.
In Somers, the Eleventh Circuit explained that
the elements clause [of the ACCA] requires both the
general intent to volitionally take the action of using,
attempting to use, or threating to use force and
something more: that the defendant direct the action at a
target, namely another person. Specific intent to direct
action at another satisfies this latter requirement, as does
“knowing conduct.” Borden, 141 S. Ct. at 1828 (holding
that the elements clause’s “against the person of another”
phrase “sets out a mens rea requirement -- of purposeful
or knowing conduct”).
Thus, if Florida aggravated assault requires a mens
rea of specific intent to use, attempt to use, or threaten
to use physical force against the person of another, then
Florida aggravated assault qualifies as an ACCA violent
felony predicate and Somers’s ACCA-enhanced sentence
must stand.
Somers, 15 F.4th at 1053-54 (emphasis added) (footnote omitted).
Thus, it is clear that the Eleventh Circuit is not actually
concerned with whether Florida assault is a specific intent crime as
that phrase is most commonly understood; rather, the court is
asking whether the first element of section 784.011 requires specific
intent to direct the prohibited action (a threat to do violence) at
another. Asking whether the first element of a crime requires
specific intent to direct action is different than asking whether the
-8-
crime is a specific intent crime. We therefore rephrase the first
certified question as:
Does the first element of the assault statute, section
784.011(1), require not just the general intent to
volitionally take the action of threatening to do violence
but also that the actor direct the threat at a target,
namely another person?
II. ANALYSIS
Section 784.011(1), Florida Statutes, defines “assault” as “an
intentional, unlawful threat by word or act to do violence to the
person of another, coupled with an apparent ability to do so, and
doing some act which creates a well-founded fear in such other
person that such violence is imminent.” The statute thus requires
proof of three elements: (1) an intentional, unlawful threat by word
or act to do violence to the person of another; (2) an apparent ability
to carry out the threat; and (3) creation of a well-founded fear that
the violence is imminent.
To answer the rephrased first certified question, we need not
look further than the plain language of section 784.011(1), which
confirms that assault does require what the Somers court refers to
as “specific intent” to direct action at another. The act that section
784.011(1) prohibits (when the second and third elements also
-9-
exist, of course) is an intentional threat to do violence to another
person. It is important to clearly understand what is meant by the
words “threat” and “violence” in the statute.
“Where, as here, the [L]egislature has not defined the words
used in a [statute], the language should be given its plain and
ordinary meaning.” Debaun v. State, 213 So. 3d 747, 751 (Fla.
2017) (alterations in original) (quoting Sch. Bd. of Palm Beach Cnty.
v. Survivors Charter Sch., Inc., 3 So. 3d 1220, 1233 (Fla. 2009)).
“When considering the [plain] meaning of terms used in a statute,
this Court looks first to the terms’ ordinary definitions[, which] . . .
may be derived from dictionaries.” Id. (alterations in original)
(quoting Dudley v. State, 139 So. 3d 273, 279 (Fla. 2014)). Because
the Legislature did not define “threat” or “violence” in chapter 784,
we will refer to dictionaries in order to ascertain the plain and
ordinary meanings of the terms.
The 1972 edition of Webster’s Seventh New Collegiate
Dictionary, which was published not long before the 1974
enactment of section 784.011, defines “threat” as “an expression of
intention to inflict evil, injury, or damage.” Webster’s Seventh New
Collegiate Dictionary 920 (1972). Similarly, the American Heritage
- 10 -
Dictionary New College Edition of 1979 defines “threat” as “[a]n
expression of an intention to inflict pain, injury, evil, or punishment
on a person or thing.” American Heritage Dictionary New College
Edition 1340 (1979). The definition in the contemporaneous Black’s
Law Dictionary is consistent. It defines a “threat” as “[a]
communicated intent to inflict physical or other harm on any
person or on property.” Threat, Black’s Law Dictionary (5th ed.
1979). The use of the term “threat” in the assault statutes thus
targets a specific type of conduct: an “expression” of an intent or a
“communicated intent” to do violence to another.
The term “violence” also has a clear meaning: the use of
physical force to cause harm. See American Heritage Dictionary
New College Edition 1431 (defining “violence” as “[p]hysical force
exerted for the purpose of violating, damaging, or abusing”);
Webster’s Seventh New Collegiate Dictionary 993 (defining “violence”
as “exertion of physical force so as to injure or abuse”). In section
784.011(1), the “violence” is specifically limited “to the person of
another,” so for the purposes of the statute, “violence” means “the
use of physical force to harm another’s person.” Section 784.011(1)
- 11 -
therefore prohibits an intentional expression of an intent to use
physical force to harm another’s person.
Given the plain language of section 784.011(1), the statute
simply cannot be violated without the actor “direct[ing] his action
at[] or target[ing] another individual.” Whether or not section
784.011(1) requires “specific intent” under any particular
understanding of that term, it certainly demands the intentional
directing of action or “[s]pecific intent to direct action at another” to
which Somers refers. This is especially true considering that the
statute contemplates the existence of “such other person” who has
developed a well-founded fear that such violence is imminent as a
result of the threat. We therefore answer the rephrased first
certified question in the affirmative.
Because we have answered the first certified question—albeit
rephrased—in the affirmative, there is no need to address the
second question directly, though we believe our answer to the first
question essentially answers the second question anyway. Because
section 784.011(1) does require that the intentional threat to do
violence be directed at or targeted towards another individual, it is
“aimed in that prescribed manner” referred to by the Supreme
- 12 -
Court in Borden, 141 S. Ct. at 1825, and therefore cannot be
accomplished via a reckless act. The fact that an assault cannot be
committed by a reckless act under Florida law means that a
violation of section 784.011(1) requires at least knowing conduct.
III. CONCLUSION
For the reasons explained, we answered the rephrased first
certified question in the affirmative and conclude that the first
element of Florida’s assault statute, section 784.011(1), requires not
just the general intent to volitionally take the action of threatening
to do violence, but also that the actor direct the threat at a target,
namely, another person. We therefore return this case to the
Eleventh Circuit Court of Appeals.
It is so ordered.
MUÑIZ, C.J., and POLSTON, LABARGA, COURIEL, GROSSHANS,
and FRANCIS, JJ., concur.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION
AND, IF FILED, DETERMINED.
Certified Question of Law from the United States Court of Appeals
for the Eleventh Circuit – Case No. 19-11484
Joe DeBelder, Interim Federal Public Defender, Tallahassee,
Florida, and Megan Saillant, Assistant Federal Public Defender,
Gainesville, Florida,
- 13 -
for Appellant
Jason R. Coody, United States Attorney, Tallahassee, Florida,
Robert G. Davies, Appellate Chief, Assistant United States Attorney,
Pensacola, Florida, and Jordane E. Learn, Assistant United States
Attorney, Northern District, Tallahassee, Florida,
for Appellee
Ashley Moody, Attorney General, Henry C. Whitaker, Solicitor
General, Jeffrey Paul DeSousa, Chief Deputy Solicitor General, and
Rachel R. Siegel, Deputy Solicitor General, Tallahassee, Florida,
for Amicus Curiae State of Florida
- 14 - | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8484456/ | Supreme Court of Florida
____________
No. SC22-1387
____________
IN RE: AMENDMENTS TO THE FLORIDA RULES OF GENERAL
PRACTICE AND JUDICIAL ADMINISTRATION AND THE CODE
OF JUDICIAL CONDUCT.
November 17, 2022
PER CURIAM.
We have determined that it is necessary to address judicial
papers—that is, records made or received by a justice or judge in
connection with the transaction of official business—and their
treatment. Our existing rules already address judicial papers
generally by defining them as administrative records of the judicial
branch and by outlining their custody, when they are considered
confidential, and how long they must be retained. However, the
Court has not adopted rules to explicitly address the treatment of
judicial papers upon a judge’s or justice’s departure from the
bench. We do so now.
The Court, on its own motion, amends Florida Rule of General
Practice and Judicial Administration 2.420 (Public Access to and
Protection of Judicial Branch Records) and the Code of Judicial
Conduct to clarify the treatment of judicial branch records at the
conclusion of judicial service and the continued expectation of
judicial confidentiality. 1 The amendments are intended to resolve
any uncertainty and inconsistency as to those two subjects.
BACKGROUND
Rule 2.420 “govern[s] public access to and the protection of
the records of the judicial branch of government.” Fla. R. Gen.
Prac. & Jud. Admin. 2.420(a). Rule 2.420(b)(1) defines “[r]ecords of
the judicial branch” as “all records, regardless of physical form,
characteristics, or means of transmission, made or received in
connection with the transaction of official business by any judicial
branch entity.” These records include both “court records” and
“administrative records.” Fla. R. Gen. Prac. & Jud. Admin.
2.420(b)(1)(A)-(B). “Court records” are “the contents of the court
1. We have jurisdiction. See art. V, § 2(a), Fla. Const.; Fla. R.
Gen. Prac. & Jud. Admin. 2.140(d).
-2-
file” as maintained by the clerk, whereas “administrative records”
are “all other records made or received pursuant to court rule, law,
or ordinance, or in connection with the transaction of official
business by any judicial branch entity.” Id.
“The custodian of all administrative records of any court is the
chief justice or chief judge of that court, except that each judge is
the custodian of all records that are solely within the possession
and control of that judge.” Fla. R. Gen. Prac. & Jud. Admin.
2.420(b)(3). The custodian may have a designee. Id.
Rule 2.420(b)(4) explains that confidential information within
judicial branch records “is exempt from the public right of access
under article I, section 24(a) of the Florida Constitution and may be
released only to the persons or organizations designated by law,
statute, or court order.” Then, rule 2.420(c)(1) provides that the
records of a court’s decision-making process “shall be confidential,”
describing these records as follows:
Trial and appellate court memoranda, drafts of opinions
and orders, court conference records, notes, and other
written materials of a similar nature prepared by judges
or court staff acting on behalf of or at the direction of the
court as part of the court’s judicial decision-making
process utilized in disposing of cases and controversies
-3-
before Florida courts unless filed as a part of the court
record[.]
Further, canon 3(B)(12) of the Code of Judicial Conduct states that
“[a] judge shall not disclose or use, for any purpose unrelated to
judicial duties, nonpublic information acquired in a judicial
capacity.”
The Florida Rules of General Practice and Judicial
Administration also include a records retention schedule, which
specifies the amount of time each type of administrative record
must be retained before it may be destroyed, although the records
may be retained beyond the time listed. The retention schedule
provides the following regarding confidential, court decision-making
records:
MEMORANDA—LEGAL: Court’s decision-making
This record series consists of memoranda, drafts or other
documents involved in a court’s judicial decision-making
process.
RETENTION: Retain until obsolete, superseded or
administrative value is lost.
Further, the retention schedule includes these details for
“Administrative Records: Public Officials/Court Administrators:”
This record consists of office files documenting the
substantive actions of elected or appointed officials and
the court administrator. These records constitute the
-4-
official record of a judicial branch entity’s performance of
its functions and formulation of policy and program
initiative. This series will include various types of
records such as correspondence; memoranda; statements
prepared for delivery at meetings, conventions or other
public functions that are designed to advertise and
promote programs, activities and policies of the judicial
branch entity; interviews; and reports concerning
development and implementation of activities of the
judicial branch entity. “These records may have
archival value.”
Retention: 10 years.
As to requests for access to judicial records, rule 2.420(m)(1)-
(2) says that “[r]equests for access to judicial branch records shall
be in writing and shall be directed to the custodian” and that “[t]he
custodian shall be solely responsible for providing access to the
records of the custodian’s entity.”
AMENDMENTS
As we have explained, rule 2.420 and canon 3 already govern
the treatment of judicial records (including confidential records) and
judges’ use of nonpublic information obtained in a judicial capacity.
However, we have determined that it is prudent to amend rule
2.420 and canon 3 to resolve any remaining uncertainty and
inconsistency in the treatment of judicial branch records at the
-5-
conclusion of judicial service and in the continued confidentiality of
nonpublic information.
Specifically, we amend rule 2.420(b)(3) (Custodian) to provide
that “[a]t the conclusion of service on a court, each justice or judge
shall deliver to the court’s chief justice or chief judge any records of
the judicial branch in the possession of the departing justice or
judge.” This amendment accounts for justices’ and judges’
departure from the bench and formally relieves them of their role
under rule 2.420 as records custodians.
We also amend canon 3(B)(12) to provide that “[a] former judge
is expected to maintain the confidentiality of nonpublic information
acquired in a judicial capacity.” This language is intended to
emphasize the expectation of judicial confidentiality beyond
retirement and to communicate as much to the public.
Accordingly, we amend the Florida Rules of General Practice
and Judicial Administration and the Code of Judicial Conduct as
reflected in the appendix to this opinion. New language is indicated
by underscoring; deletions are indicated by struck-through type.
The amendments shall become effective immediately. Because the
amendments were not published for comment previously, interested
-6-
persons shall have seventy-five days from the date of this opinion in
which to file comments with the Court. 2
It is so ordered.
MUÑIZ, C.J., and CANADY, POLSTON, LABARGA, COURIEL,
GROSSHANS, and FRANCIS, JJ., concur.
THE FILING OF A MOTION FOR REHEARING SHALL NOT ALTER
THE EFFECTIVE DATE OF THESE AMENDMENTS.
Original Proceeding – Florida Rules of General Practice and Judicial
Administration and Code of Judicial Conduct
2. All comments must be filed with the Court on or before
January 31, 2023, as well as a separate request for oral argument if
the person filing the comment wishes to participate in oral
argument, which may be scheduled in this case. If filed by an
attorney in good standing with The Florida Bar, the comment must
be electronically filed via the Florida Courts E-Filing Portal (Portal).
If filed by a nonlawyer or a lawyer not licensed to practice in
Florida, the comment may be, but is not required to be, filed via the
Portal. Any person unable to submit a comment electronically must
mail or hand-deliver the originally signed comment to the Florida
Supreme Court, Office of the Clerk, 500 South Duval Street,
Tallahassee, Florida 32399-1927.
-7-
APPENDIX
FLORIDA RULES OF GENERAL PRACTICE AND JUDICIAL
ADMINISTRATION
Rule 2.420. Public Access to and Protection of Judicial Branch
Records
(a) [No Change]
(b) Definitions.
(1) – (2) [No Change]
(3) “Custodian.” The custodian of all administrative
records of any court is the chief justice or chief judge of that court,
except that each justice or judge is the custodian of all records that
are solely within the possession and control of that justice or judge.
At the conclusion of service on a court, each justice or judge shall
deliver to the court’s chief justice or chief judge any records of the
judicial branch in the possession of the departing justice or judge.
As to all other records, the custodian is the official charged with the
responsibility for the care, safekeeping, and supervision of such
records. All references to “custodian” mean the custodian or the
custodian’s designee.
(4) – (6) [No Change]
(c) – (m) [No Change]
Committee Notes
[No Change]
Court Commentary
[No Change]
-8-
APPENDIX TO RULE 2.420
[No Change]
CODE OF JUDICIAL CONDUCT
Canon 3. A Judge Shall Perform the Duties of Judicial Office
Impartially and Diligently
A. [No Change]
B. Adjudicative Responsibilities
(1) – (11) [No Change]
(12) A judge shall not disclose or use, for any purpose
unrelated to judicial duties, nonpublic information acquired in a
judicial capacity. A former judge is expected to maintain the
confidentiality of nonpublic information acquired in a judicial
capacity.
C. – F. [No Change]
Commentary
[No Change]
-9- | 01-04-2023 | 11-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493137/ | MEMORANDUM OPINION
ARTHUR B. FEDERMAN, Chief Judge.
The Chapter 7 trustee objected to debtors’ claim to a homestead exemption in their lake cabin and to both debtors’ claim to the head of household exemption. This is a core proceeding under 28 U.S.C. § 157(b)(2)(B) over which the Court has jurisdiction pursuant to 28 U.S.C. § 1334(b), 157(a), and 157(b)(1). The following constitutes my Findings of Fact and Conclusions of Law in accordance with Rule 52 of the Federal Rules of Civil Procedure as made applicable to this proceeding by Rule 7052 of the Federal Rules of Bankruptcy Procedure. For the reasons set forth below, I will sustain the trustee’s objections.
*749
FACTUAL BACKGROUND
On October 31, 2000, debtors Robert and Leslie Soper filed a Chapter 7 bankruptcy petition. According to the petition, they live at 11210 Gill Street, Sugar Creek, Missouri 64054.1 They own the real estate at that address, and they represented to the Court that they do, indeed, reside at that address. They also own real estate in Rocky Mont, Missouri.2 The debtors valued the property at 11210 Gill Street at $48,500.00 with a lien of $43,900.00. They valued the property in Rocky Mont, Missouri at $55,000.00 with a lien of $51,390. The debtors represented that the Rocky Mont, Missouri property contains a vacation cabin on the lake where they spend most weekends and at least one month every summer.3 They argued that the combined equity in both homes is less than the allowed homestead exemption in Missouri, and that they spend a significant amount of time in both homes. They, therefore, attempted to exempt the equity in both pieces of real estate as their homestead.
The debtors also represented that they have one minor child born May 29, 1983, and that they are her sole source of support.4 Debtors both claimed a head of household exemption in the amount of $850.00 in an attempt to exempt their equity in a 1996 JetSM and a 1964 15 horsepower outboard motor. Neither debtor, however, attempted to exempt the sum of $250.00 for their dependent. The debtors claim that they both are employed and both contribute equally to their daughter’s support, therefore, they are both entitled to claim the exemption. On February 8, 2001, this Court held a hearing on the trustee’s objection. At the hearing, the parties agreed that there are no disputed facts and submitted the matter for a legal determination. The issues are clearly defined. Can a married couple living together claim a homestead exemption in more than one home? Can a married couple living together each claim the head of household exemption for a dependent child?
DISCUSSION
Debtors are allowed to exempt up to $8000.00 of equity in as a homestead from the claims of creditors:
1. The homestead of every person, consisting of a dwelling house and appurtenances, and the land used in connection therewith, not exceeding the value of eight thousand dollars, which is or shall be used by such person as a homestead, shall, together with the rents, issues and products thereof, be exempt from attachment and execution. The exemption allowed under this section shall not be allowed for more than one owner of any homestead if one owner claims the entire amount allowed under this subsection; but, if more than one owner of any homestead claims an exemption under this section, the exemption allowed to each of such owners shall not exceed, in the aggregate, the total exemption allowed under this subsection as to any one homestead.5
It is well-settled law in Missouri that a married couple living together can claim *750only one homestead.6 While there are no recent cases in Missouri, the older cases cited have never been questioned. The language of the statute itself speaks of the homestead in the singular. I, therefore, will sustain the trustee’s objection to the debtors’ claim of a homestead as to the Rocky Mont, Missouri property.
Debtors are also allowed a head of household exemption in Missouri in the amount of $850.00 plus $250.00 for each dependent under eighteen years of age.
Each head of a family may select and hold, exempt from execution, any other property, real, personal or mixed, or debts and wages, not exceeding in value the amount of eight hundred fifty dollars plus two hundred fifty dollars for each of such person’s unmarried dependent children under the age of eighteen years, except ten percent of any debt, income, salary or wages due such head of a family.7
The head of household exemption, which permits a debtor designated the head of household to protect property of debtor’s choice from the claims of creditors, may be claimed by only one person in each family.8 I will, therefore, sustain the trustee’s objection to one head of household exemption in the amount of $850.00. Debtors have ten days from the date of this Memorandum Opinion to amend their exemption schedules and decide which personal property they wish to exempt with the one head of household exemption they are allowed.
An Order in accordance with this Memorandum Opinion will be entered this date.
. Doc. #1.
. Id. at Schedule A.
. Though not relevant to my decision regarding debtors’ exemptions, debtors’ bankruptcy schedules indicate that they also own a 32 foot 1997 Chris Craft Boat with a fair market value of $85,000.00 and a lien of $108,980.00. Debtors' Statement of Intention indicates that they intend to retain the boat and reaffirm the debt. Schedule D. Debtors’ schedules also indicate that the monthly payments on the boat total $999.00 per month. Schedule J. Debtors appear to have $142,649.86 in unsecured debt, and they represent that their net monthly income is $3,193.60 while their monthly expenses are $4,276.00. Schedules F, I, and J.
. I note that debtors failed to disclose that they had a dependent on Schedule I, but they filed an affidavit to that effect in response to the trustee's objection.
. Mo.Stat.Ann. § 513.475.1 (Supp.2001).
. Palmer v. Omer, 295 S.W. 123, 125, 316 Mo. 1188, 1193 (Mo.1927); Scheerer v. Scheerer, 229 S.W. 192, 197, 287 Mo. 92 (Mo.1921); Rouse v. Caton, 67 S.W. 578, 579, 168 Mo. 288 (Mo.1902); White v. Smith, 104 Mo.App. 199, 78 S.W. 51, 52 (1904); Gladney v. Berkley, 75 Mo.App. 98, 1898 WL 2036 *1 (Mo.Ct.App.1898).
. Mo.Stat.Ann. § 513.440 (Supp.2001).
. In re Arnold, 193 B.R. 897, 901 (Bankr.W.D.Mo.1996); In re Sartain, 61 B.R. 1007, 1009 (Bankr.W.D.Mo.1986); In re Crippen, 36 B.R. 7, 9 (Bankr.E.D.Mo.1983). | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493138/ | Memorandum Opinion on Debtor’s Complaint to Determine Dis-chargeability of Debt
BENJAMIN COHEN, Bankruptcy Judge.
The State of Vermont contends that the debtor owes personal income taxes for 1991 and 1992. The debtor contends that those debts are dischargeable.
The matter before the Court is the debt- or’s Complaint To Determine Discharge-ability of Debt filed on August 13, 1999. After notice, a trial was held on September 20, 2000. Mr. Alan G. Schmidt, the debtor and Mr. Michael J. Antonio, his attorney, appeared in court. Mr. Timothy Collins, *806Special Assistant Attorney General representing the Vermont Department of Taxes (VDT) and Mr. Sylvester Stempel, a representative of the State of Vermont Department of Revenue, appeared by video-teleconferencing.
I. Background
Section 523(a)(1)(B)® of the Bankruptcy Code provides that a discharge granted to a Chapter 7 debtor does not discharge a debtor from any tax debt for which a return, if required, was not filed. 11 U.S.C. § 523(a)(1)(B)®.
The debtor admits that he did not file personal income tax returns for 1991 and 1992, but he alleges in his complaint that he was not required to file those returns because he was not domiciled in Vermont in those years.1 The debtor concludes that the tax debts the State of Vermont contends he owes for those years were therefore discharged by the order entered by this Court on December 6,1999.2
The State of Vermont contends that the debtor was domiciled in Vermont in 1991 and 1992, and therefore was required to file Vermont income tax returns for those years. The state concludes that the debt- or’s failure to file the returns renders the debtor’s Vermont personal income taxes for 1991 and 1992 non-dischargeable pursuant to 11 U.S.C. § 523(a)(1)(B)®.3
II. Legal Framework
A. Applicable Bankruptcy Statute
Section 523(a)(1)(B)® of the Bankruptcy Code provides that a discharge granted to a Chapter 7 debtor does not discharge a debtor from any tax debt for which a return, if required, was not filed. 11 U.S.C. § 523(a)(1)(B)®.
B. Applicable Vermont Statutes
Section 5822 of Title 32 of the Vermont Statutes Annotated imposes a tax, “for each calendar year or fiscal year ending during that calendar year upon the income earned or received in that taxable year by every individual, estate and trust.” Vt. Stat. Ann. tit. 32, § 5822 (emphasis added). Section 5861 of the same title requires, “[e]very individual” who is subject to taxation for any taxable year under section 5822 to file a Vermont income tax return if that individual is required to file a United States income tax return for that year and either earned more than $100.00 in “Vermont income,” if a resident of that state, or received more than $1,000.00 in gross income from activities which occurred in Vermont, if a nonresident. Vt. Stat. Ann. tit. 32, § 5861.
The “Vermont income” of a “resident individual” includes all of that individual’s adjusted gross income for the applicable taxable year less certain exempt sources which are inapplicable to the present controversy. Vt. Stat. Ann. tit. 32, § 5823(a). *807In contrast, the “Vermont income” of a “nonresident individual,” includes only income earned by virtue of activities conducted in Vermont. Vt. Stat. Ann. tit. 32, § 5823(b).
An individual is considered a resident of Vermont, and a “resident individual,” for that portion of a taxable year in which domiciled in Vermont. Vt. Stat. Ann. tit. 32, § 5811(11) & (13).
C. Vermont Domicile Law
A domicile in Vermont is the, “place where a person lives or has his home, to which, when absent, he intends to return and from which he has no present purpose to depart.” Piche v. Department of Taxes, 152 Vt. 229, 565 A.2d 1283, 1285 (1989)(quoting Tower v. Tower, 120 Vt. 213, 138 A.2d 602, 607 (1958)). This concept has two essential elements: residence and intention. Id. “No question is made as to what elements are necessary to constitute domicile. The fact of residence, and the intent to make the place of residence the home of the party, must concur.” Fulham v. Howe, 62 Vt. 386, 20 A. 101, 103 (1890). “But continuous inhabitancy is not necessary. Mere absence, however long continued, so it be for a temporary purpose, and with the intention of returning always in mind, will not effectuate a change of domicile.” Id.
In Vermont, in order to change domicile, an individual must move to a new residence and dwell there with the intent to remain indefinitely. Godino v. Cleanthes, 163 Vt. 237, 656 A.2d 991, 993 (1995). “To make a change in domicile effective there must be a move to the new residence and dwelling there, coupled with an intention of remaining there indefinitely.” Piche v. Department of Taxes, 565 A.2d at 1285 quoting Walker v. Walker, 124 Vt. 172, 200 A.2d 267, 269-270 (1964). “[N]o certain or definite duration of residence is requisite to accomplish the acquisition of a new domicile.” Dailey v. Town of Ludlow, 102 Vt. 312, 147 A. 771, 773 (1929). “Indeed, it has been said that a day or an hour will suffice for the acquisition of a domicile.” Id.
Essential to a change of domicile, however, is the intent to abandon the previous domicile. Piche v. Department of Taxes, 565 A.2d at 1285. “Although one can change domicile by moving to a new residence and dwelling there with the intent to remain indefinitely, ‘[a]n essential ingredient of the intention requirement is the intent to give up the old domicile.’ ” Godino v. Cleanthes, 656 A.2d at 993 (quoting Piche v. Department of Taxes, 565 A.2d at 1285).
In Town of Georgia v. Town of Waterville, 107 Vt. 347, 178 A. 893 (1935), the Supreme Court of Vermont explained:
A change of domicile is effected only by the concurrence of an act and an intention. The absence of either of these thwarts the change. The necessary act is the actual transfer of bodily presence from the town of the residence. The necessary intention is a fixed and definite determination to remain in the new town or, at least, such a determination not to return to the old one.
Id. at 895 (emphasis added).
III. Issue
Was the debtor domiciled in Vermont during the calendar years 1991 and 1992?4
If the debtor was domiciled in Vermont in 1991 and 1992, he was a resident of Vermont for those years. Vt. Stat. Ann. tit. 32, § 5811(11) & (13). If he was a Vermont resident during those years, Ver*808mont law required him to file Vermont income tax returns for those years. If he was required to file those returns but did not, the Vermont taxes owed by him for those years are non-dischargeable in bankruptcy. 11 U.S.C. § 523(a)(l)(B)(i). For the reasons stated below, the Court finds that the debtor was domiciled in Vermont in 1991 and 1992.
IV. Findings of Fact
A. The Debtor’s Testimony
Mr. Schmidt testified that in conjunction with his employment as a commercial fisherman, he physically resided on a fishing boat in the Atlantic Ocean for about 300 days of each of the calendar years 1991 and 1992. These 300 days, he explained, were comprised of separate trips of six to ten days. He also explained that when the boat was not at sea, it was docked in a New Hampshire port where it remained for about two days after each sea run.
Mr. Schmidt testified that he, of course, lived on the boat when it was at sea, but that when the boat was in port, he resided in Connecticut, that is except once a month, when he returned to Vermont to visit his daughter and former girlfriend.
Mr. Schmidt testified that he is originally from Connecticut. He claims that Vermont has never been his full-time domicile5 He testified that he moved to Vermont in 1988 or 1989 with his girlfriend and their daughter, and the girlfriend’s other two children, but after six months, he moved back to Connecticut. His girlfriend and the three children remained in Vermont.
Mr. Schmidt testified that he returned to Vermont in the -winter of 1989 to work as a snow maker and after a period of four months returned to Connecticut. According to his testimony, since the winter of 1989, Mr. Schmidt has not worked in Vermont and except for periodic visits to see his daughter, he did not return to Vermont.
B. Additional Facts
In contrast to the debtor’s testimony, the facts before the Court establish not only that the debtor was domiciled in Vermont in 1991 and 1992 but also that he was domiciled in Vermont in 1990 and did not, as required by Vermont law if he intended to change his domicile, give up that domicile to claim another. Those facts are:
1. Contrary to the debtor’s assertion that he was not domiciled in Vermont in 1990, Mr. Schmidt filed a state of Vermont income tax return for 1990.6
2. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1990, Mr. Schmidt filed a Vermont income tax return for 1990 in which he stated that his “City/Town & State of Legal Residence as of 12-31-90” was “Troy, Vermont.” Defendant’s Exhibit IB.
3. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1990, Mr. Schmidt filed a Vermont income tax return for 1990 in which he described his mailing address as “P.O. Box 82, Troy, Vermont.” Defendant’s Exhibit IB.
4. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1990, Mr. Schmidt filed a Vermont income tax return for 1990 in which he indicated that 100 percent of his income was subject to Vermont income taxes, even though it is apparent that most of his income for that year was not earned in the state of Vermont, but instead was *809earned as a “Fisherman” on a boat in the Atlantic Ocean. Defendant’s Exhibit IB.
5. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1990, a “W-2” form attached to the Vermont income tax return filed by Mr. Schmidt for 1990 shows that he worked in Jay, Vermont for at least a portion of the year for a company named “Jay Peak, Inc.,” which paid him wages totaling $2,377.90. Defendant’s Exhibit IB.
6. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1990, Mr. Schmidt filed a Vermont income tax return for 1990 in which he represented himself to be a full-time Vermont resident for purposes of claiming a “Vermont earned income credit” in an amount which would only have been available to him as a full-time Vermont residence. In fact, that portion of the form on which he claimed the credit specifically states “residents complete lines 41 and 42.” Defendant’s Exhibit IB.
7. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1990, on February 11, 1992, Mr. Schmidt filed an amended Vermont income tax return for 1990, in which he claimed his daughter, his girlfriend, and his girlfriend’s son, (all of whom he admits were residents of Vermont during 1990) as dependents. He also represented that those persons lived in his home for the entire calendar year. Defendant’s Exhibit IB.
8. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1990, in his amended 1990 Vermont income tax return for 1990, Mr. Schmidt again claimed all of the income earned by him during that calendar year as a fisherman outside of that state subject to Vermont income taxes. Defendant’s Exhibit IB.
9. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1991, in the spring of 1991 Mr. Schmidt purchased a 10-acre parcel of unimproved land in Jay, Vermont for $17,000.00.
10. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1991, on the ‘Vermont Property Transfer Tax Return” filed by him with the VDT on May 29, 1991, (in connection with his purchase of the Vermont acreage), Mr. Schmidt listed his mailing address as “P.O. Box 82, Troy, Vermont.” Plaintiffs Exhibit 1.
11. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1991 and 1992, on the ‘Vermont Property Transfer Tax Return” he filed in connection with his purchase of the Vermont acreage, Mr. Schmidt stated that the intended “primary use of property after transfer” was for his “primary residence.” Plaintiffs Exhibit 1. He admitted at trial that when he purchased the property he intended to build a house on it and to occupy the house as his primary residence.
12. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, Mr. Schmidt paid the reduced primary residence tax rate on the transaction. That rate is one-half of one percent of the purchase price and is available only to one who intends to use property as a primary residence. Plaintiffs Exhibit 2.7
*81013. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, in response to a May 3, 1993, letter inquiry from the VDT regarding the progress, if any, made by him toward the construction of his residence on the acreage, Mr. Schmidt reported, “I have started. We have a well, barn 20V40' by 16' high. I have the blue print and now I am waiting for the power company to put power to the property.” Plaintiffs Exhibit 3. He admitted at trial that he was in the process of trying to build a house on the property when he formulated the response to the department’s letter.
14. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, Mr. Schmidt built a barn on the property and obtained blueprints for the construction of a house on the property. He admitted at trial that some of the construction of the barn occurred in 1992.
15. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, Mr. Schmidt held a Vermont driver’s license during both years but did not hold a New Plampshire driver’s license for either year. He did however hold a Connecticut driver’s license, but that fact of course indicates his residence in that state prior to moving to Vermont in 1988 or 1989.
16. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, on March 11, 1991, Mr. Schmidt filed an application with the Vermont Department of Motor Vehicles for a Vermont driver’s license. On the application, Mr. Schmidt stated that his mailing address was “P.O. Box 82, Troy, Vermont” and that his “legal address” was “N. Jay Rd., Jay, Vermont.” Defendant’s Exhibit 2.
17. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, during each of those years, Mr. Schmidt’s automobile was registered in the state of Vermont. No vehicle owned by Mr. Schmidt during that period of time was registered in either Connecticut or New Hampshire.
18. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, on February 17, 1992, Mr. Schmidt purchased a 1978 Dodge pick-up truck in Vermont, from Mr. James Buchanan, who lived in Derby, Vermont. Defendant’s Exhibit 4.
19. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, on February 19, 1992, Mr. Schmidt registered the truck purchased by him in Vermont with the Vermont Department of Motor Vehicles. On his registration application, Mr. Schmidt listed his address as “P.O. Box 82, Troy, Vermont.” Defendant’s Exhibit 3. He was issued a certifícate of title for the truck by the Vermont Department of Motor Vehicles. The certifícate of title lists the “name and address of vehicle/vessel owner” as “Schmidt, Alan G., P.O. Box 82, Troy, Vermont 05868.” Defendant’s Exhibit 6.
20. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, Mr. Schmidt maintained a bank account in Vermont during those calendar years.
21. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, Mr. Schmidt obtained and held a Vermont resident fishing license for and during those calendar years.
22. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, Mr. *811Schmidt did not, during those years, lease or purchase any real property in New Hampshire on which to live during the times he was not at sea. Furthermore, no evidence was offered by Mr. Schmidt either that he leased or purchased any real property in Connecticut.
23. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1991, federal tax data supplied by the Internal Revenue Service to the VDT indicates that, on his 1991 federal 1040 tax return, Mr. Schmidt reported his address to be “P.O. Box 82, Troy, Vermont.” Defendant’s Exhibit IB.
24. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1991, federal tax data supplied by the Internal Revenue Service to the VDT indicates that Mr. Schmidt attached to his 1991 1040 tax return a form 1099 from Community National Bank in Derby, Vermont showing interest paid by that entity to him during that year in the amount of $103.00. Defendant’s Exhibit IB.
25. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1991, federal tax data supplied by the Internal Revenue Service to the VDT indicates that Mr. Schmidt attached to his 1991 1040 tax return a form from Community National Bank in Derby, Vermont showing mortgage interest paid by him to that entity during that year in the amount of $977.00. Defendant’s Exhibit IB.
26. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar year 1991, federal tax data supplied by the Internal Revenue Service to the VDT indicates that, on an application filed by him with the Department of State for a passport, Mr. Schmidt listed a Vermont address: “P.O. Box 102, Troy, Vermont 05868.” Defendant’s Exhibit IB.
27. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, in those years during the times that he was not at sea, Mr. Schmidt “visited” (his characterization) his daughter, and her mother, at least once a month in Vermont, where he lived with them both before taking the job out of state.
28. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, during the times in those years that he was not at sea, Mr. Schmidt spent more time in Vermont than he did anywhere else. According to his testimony, Mr. Schmidt visited Vermont once a month during the years in question. And, on the domicile statements provided by him to the VDT, he indicated that he spent about four days out of each month of those years in Vermont. Plaintiffs Exhibits 6 & 7.8
29. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, according to the domicile statements provided by him to the VDT, Mr. Schmidt did not file income tax returns with the state of Connecticut in either of those two years even though Connecticut was the only other state in which he was physically present for any appreciable time during those years.9 Plaintiffs Exhibits 6 & 7.
30. Contrary to the debtor’s assertion that he was not domiciled in Vermont dur*812ing the calendar years 1991 and 1992, Mr. Schmidt did not, during either of those years, establish a domicile in New Hampshire. The only time he spent in New Hampshire during that period was going to and from his employer’s boat and boarding and disembarking from that boat.
31. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, Mr. Schmidt did not, during either of those years, establish a domicile in Connecticut. According to his testimony, he spent less time in Connecticut during those years than he did in Vermont. He did not buy, lease or rent land in Connecticut during those years and did not, as stated before, file Connecticut income tax returns. He did not testify that he considered himself a domiciliary of Connecticut during 1991 or 1992. And there is nothing in his testimony to establish domicile there.
32. Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, there is no evidence that during either of those years, did Mr. Schmidt establish a domicile on the boat owned by his employer, or anywhere else on the Atlantic Ocean. He lived on the boat for short intervals of temporary duration while the boat was at sea on its regular fishing expeditions. His presence on the boat, therefore, was merely temporary and intermittent, rather than permanent or indefinite.10
33.Contrary to the debtor’s assertion that he was not domiciled in Vermont during the calendar years 1991 and 1992, in numerous documents executed by him during those years, Mr. Schmidt stated that his mailing address was “P.O. Box 82, Troy, Vermont” and/or that his street address was “N. Jay Rd., Jay, Vermont,” which, he admitted at trial, were the mailing address and street address of his girlfriend and daughter, with whom he was living when he took the job in New Hampshire.
V. Conclusions of Law
The Court must conclude that Mr. Schmidt was domiciled in Vermont in 1991 and 1992. The only evidence contrary is *813Mr. Schmidt’s self-serving testimony. All of the credible evidence proves that Mr. Schmidt’s absences from Vermont for portions of 1990 through 1992 were temporary and solely for purposes of employment. Throughout that period, he considered Vermont his home. He always intended to return to Vermont. He never intended to remain indefinitely in New Hampshire, Connecticut, or afloat on the Atlantic Ocean.11
*814Mr. Schmidt was not, as he contends, a domiciliary of another state who occasionally visited Vermont. He was a domiciliary of Vermont with an out-of-state job. That domicile in Vermont could not change simply because his employment required him to be absent from Vermont for temporary, yet extended periods of time.12
Mr. Schmidt received his mail in Vermont. He had a Vermont driver’s license. He had a home in Vermont where his daughter and the mother of his daughter lived. He returned to that home every month. That home ostensibly was the same home he lived in when he took his out-of-state job. He purchased land near his home in Vermont to build a new home. He made efforts, although incomplete efforts, to build that home. His bank account was in Vermont. He purchased a car in Vermont. He registered the title to that ear in Vermont. He made payments on a mortgage on property in Vermont. Simply put, Mr. Schmidt’s domicile was Vermont.
VI. Conclusion
Because Mr. Schmidt was domiciled in Vermont during the calendar years 1991 and 1992, he was required by Vermont law to file Vermont income tax returns for those years. His failure to file those returns makes the Vermont taxes owed by him for those years non-dischargeable in bankruptcy. 11 U.S.C. § 623(a)(l)(B)(i).
A separate order will be entered in accordance with this opinion.
ORDER
In conformity with and pursuant to the Memorandum Opinion entered contemporaneously herewith, it is ORDERED, ADJUDGED AND DECREED that:
1. Judgment is entered in favor of the defendant and against the plaintiff;
2. The debtor’s personal income tax debts for 1991 and 1992 are non-dis-chargeable pursuant to 11 U.S.C. § 523(a)(l)(B)(i).
.In his complaint and other pleadings the debtor also included his objection to the defendant’s attempt to collect Vermont income lax debts for 1993 and 1994. The debtor claimed that those debts were also discharge-able. In an order and memorandum opinion entered on June 7, 2000, on a motion for summary judgment by the State of Vermont, this Court found that those debts were non-dischargeable. This Court specifically found that a decision in favor of the defendant by a hearing officer in a state administrative proceeding requiring the debtor to file 1991 and 1992 Vermont income tax returns was binding on this Court and that because the debtor had not filed those returns, (which the debtor admitted), the debts for the taxes represented by those returns were not dischargeable.
. That is, the debtor contends the debts are not non-dischargeable pursuant to section 523(a)(1) of the Bankruptcy Code. II U.S.C. § 523(a)(1).
. On October 27, 1994, and on November 29, 1994, Mr. Sylvester Stempel, an employee of the Vermont Department of Taxes, mailed letters to Mr. Schmidt requesting him to file Vermont income tax returns for 1991 and 1992. In those letters Mr. Stemple informed Mr. Schmidt that an estimated assessment of the Vermont income taxes due for those years would be made if he did not provide returns. Mr. Schmidt did not respond to either letter. As promised, the VDT prepared estimated assessments against Mr. Schmidt for 1991 and 1992. Mr. Schmidt did not appeal either assessment.
. Vermont law is clear that if the facts establish that Mr. Schmidt was domiciled in Vermont in 1990, and did not give up that domicile with the intent not to return, Vermont remained his domicile in 1991 and 1992. As quoted above, “Although one can change domicile by moving to a new residence and dwelling there with the intent to remain indefinitely, ‘[a]n essential ingredient of the intention requirement is the intent to give up the old domicile.’ ” Godino v. Cleanthes, 656 A.2d at 993 (quoting Piche v. Department of Taxes, 565 A.2d at 1285).
. In contrast, the debtor filed a 1990 income tax return in Vermont in which he indicated that 100 percent of his income was subject to Vermont income taxes.
. The debtor’s action in 1990 are important for at least two reasons. First, Mr. Schmidt testified that Vermont has never been his full-time domicile. His actions in 1990 prove otherwise. Second, as stated above, if Mr. Schmidt was domiciled in Vermont in 1990 but did not change that domicile and intend to give up that domicile, he remained domiciled in Vermont in the years after.
. Although Mr. Schmidt’s property was unimproved, and consisted primarily of forest, the reduced rated is, according to Mr. Stempel, available to a purchaser of unimproved property as long as the person builds and occupies a primary dwelling on the property within two years after purchasing the property. Mr. Schmidt’s payment of the reduced rate, therefore, is clear evidence of his intent in the spring of 1991 to return to the Vermont property and to build a house on it within the two years following his purchase of the property and clear evidence of his intent to occupy that house as his primary residence. Otherwise he would have paid the higher (one and one-quarter percent) rate applicable to non-primary residence property. Whether the debtor completed a house within the two-year period *810does not diminish the evidence establishing his clear intent in 1991 to make Vermont his home.
. Accepting Mr. Schmidt’s testimony, he spent about 300 days of each of those years at sea and spent about 65 days of each year on land. If Mr. Schmidt visited Vermont 12 times each year (once a month), and each visit lasted about four days, then Mr. Schmidt spent 48 of the 65 days he had on land in 1991 in Vermont and 48 of the 65 days he had on land in 1992 in Vermont.
. According to Mr. Stempel, New Hampshire does not have a personal income tax. Had Mr. Schmidt paid Connecticut income taxes during the years in question it would not only indicate that he may have considered himself a domiciliary of that state but, in addition, he would have been entitled to a credit for those payments against his Vermont tax liability.
. There is also no evidence that Mr. Schmidt occupied the boat because of his desire to make the boat his home. He did not testify that he intended or desired to make the boat his domicile. And it is apparent that he lived on the boat only because of his employment.
There is also no evidence that suggests that Mr. Schmidt could have lived on the boat indefinitely even if that had been his intent. The boat was neither designed nor intended to be a permanent residence for the fisherman. It was intended instead for fishing expeditions of short durations and, incidental to that purpose, temporary berths were provided for the fisherman.
There is also no evidence that the boat was offered to or provided to Mr. Schmidt as a permanent residence. Instead, Mr. Schmidt occupied the boat solely at the pleasure of his employer. He did not own the boat. He did not rent or lease a residential berth on the boat. Therefore, he had no legal right to live on the boat indefinitely and therefore no right to remain on the boat once his employment was interrupted or terminated. Consequently, Mr. Schmidt would not have had the authority to make the boat his domicile.
There is also no evidence that Mr. Schmidt ever intended to make the boat his domicile, or in fact considered it to be his domicile. He occupied the boat only on a temporary basis. His presence on the boat was dictated by his employer. He could not have lived on the boat indefinitely even had he so desired, absent the permission of his employer. And the boat was not, during the times he occupied it, being provided as a permanent residence. It was instead provided only as a temporary accommodation to serve the object of his employer’s business.
And finally, there is no evidence that suggests that Mr. Schmidt did not intend to return to Vermont. Quite to the contrary, the evidence establishes that on most occasions when the boat returned to port, Mr. Schmidt returned to Vermont. Vermont was the precise place where he lived before going to New Hampshire. It was the same place he returned to be with the same people he lived with prior to going to New Hampshire. It was where he had a place to stay. It was where his daughter lived and went to school. It was where the mother of his child lived. It was where he owned property on which he someday wished to build a home. It was where his car was registered. It was where he had a driver’s license. And it was where he had a fishing license.
. This ruling is consistent with, and probably required by, the decision of the Vermont Supreme Court in Piche v. Department of Taxes, 152 Vt. 229, 565 A.2d 1283 (1989), which involved a very similar factual situation to Mr. Schmidt’s. At issue in Piche was a taxpayer’s liability for 1981 through 1983 Vermont income taxes. The taxpayer claimed that he was not liable for the taxes because he was not domiciled in Vermont during those years. The taxpayer was a domiciliary of Vermont in 1980. His address was 41 Barrett Street, South Burlington, Vermont. In December 1980, he and his wife separated. One week later, he accepted employment with the merchant marine and was sent to Virginia by his employer. He spent approximately one month in Virginia loading his ship and left port on it in February 1981. In early April he received injuries while aboard the ship and returned to his home (where his estranged wife continued to reside) in South Burlington, Vermont. On April 24, 1981, his wife obtained a temporary restraining order prohibiting him from remaining in the home. He moved into his grandmother’s home, also in Vermont, where he remained for five weeks while recovering from his injuries. When fully recovered, he returned to his ship, then in the Pacific Ocean.
For the next two years, the taxpayer worked on board the ship while it was both in port in Virginia and at sea. During the period of his employment on the ship he spent some of his free weekends at his brother-in-law’s home in Virginia. His stay in Virginia was for the purpose of working there, and he intended to remain there as necessary for his employment. In June 1983, he was transferred to Florida and assigned to a new ship where he remained until he resigned at the end of November 1983. In January 1984, the taxpayer returned to Vermont and reconciled with his wife.
Between the time the taxpayer first left Vermont in December 1980, and when he returned in January 1984, he made five trips to Vermont. The first was in 1981 after his injury. He returned again in December 1982 when he spent about a week at his grandmother’s house. His last three visits occurred between June and December 1983.
Throughout his employment with the merchant marine, the taxpayer’s employment records listed 41 Barrett Street, South Burlington, Vermont, as his permanent and emergency address. His wife received mail for him at that address, including mail sent from his employer. During the years in question, he was registered to vote in Vermont and maintained banking arrangements in Vermont, Florida and Virginia. He and his wife’s federal income tax returns for 1981, 1982 and 1983 were filed jointly as a married couple and listed 41 Barrett Street as their home address. At no time during the period did the taxpayer file any income tax returns with the State of Virginia.
The tax commissioner found that when the debtor left Vermont in 1980, the debtor did not intend to abandon his Vermont domicile and, in fact, did not abandon it during the years in question. The Supreme Court of Vermont affirmed the tax commissioner’s decision. “We think these findings of fact fairly and reasonably support the Commissioner’s conclusion that Mr. Piche was domiciled in Vermont during 1981, 1982 and the first half of 1983.” 565 A.2d at 1285.
This Court’s decision is also consistent with Godino v. Cleanthes, 163 Vt. 237, 656 A.2d 991 (1995), a non-tax case. The issue in Godino was in personam jurisdiction over a defendant in Florida in an action brought by a lender against a borrower to collect on a promissory note. Prior to the suit, the defendant was living in Vermont in a house she owned. In December 1992 she left Vermont for Florida. She sought state services in Florida and in May 1993 obtained a full-time job. She then leased an apartment in June 1993. However, she retained her home in Vermont, retained her Vermont driver’s license, and continued to register her car in Vermont. Suit was filed against her in a Vermont court in August 1993. The plaintiff claimed that the defendant was a domiciliary of Vermont, even though she was living in Florida, and that personal jurisdiction over the defendant could be exercise by the Vermont court based on domicile.
The trial court dismissed the action because of lack of personal jurisdiction but the Supreme Court of Vermont reversed, citing the defendant’s retention of the house, driver's license, and car registration as sufficient evidence that she intended to retain her Vermont domicile. That court explained:
Plaintiffs alleged that defendant resided in Wardsboro, and the parties' submissions show that defendant owns a residence there. Further, the parties’ submissions *814show that defendant registered her car in Vermont and retained her Vermont driver’s license. These facts, taken as true and viewed most favorably to plaintiffs, show that defendant has her home in Vermont and was only temporarily absent.
Although one can change domicile by moving to a new residence and dwelling there with the intent to remain indefinitely, "[a]n essential ingredient of the intention requirement is the intent to give up the old domicile.” Id. Defendant's retention of the home, license, and registration evidence the opposite intent, the intent to keep the old domicile. Consequently, plaintiffs have met their prima facie burden of proving personal jurisdiction. 656 A.2d at 993.
. And even when it did require him to be outside of Vermont, the evidence is clear that Mr. Schmidt considered and treated Vermont as his home. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493141/ | ORDER
ARTHUR N. VOTOLATO, Bankruptcy Judge.
Heard on November 1, 2000, on the Motions of Elliot Cohen, Esq., Timothy Conley, and Paul Buff for leave to file late proofs of claim in this 1997 Chapter 11 case. The bar date for filing claims in the case was June 30, 1998. All of the Mov-ants, who are former directors of the Debtor, NECO Enterprises, Inc. (“NECO”),1 seek to file contingent claims against the estate for indemnification, depending on the outcome of litigation pending in the state court.
This dispute is precipitated by following facts: On December 14, 1997, DEPCO commenced an action for money damages in the Providence County Superior Court against the former directors, officers and advisers of NECO. The Movants are some of the named defendants in that litigation, and one of their defenses is that they were unaware that NECO’s bylaws contained an indemnification provision until Joseph Butler, the Chapter 11 Trustee, through discovery in the Superior Court litigation produced a copy of the bylaws on October 20, 1999, well after the June 30, 1998 bar date. All of the Movants testified that they never read the bylaws prior to October 1999, although they served as directors since 1989, and there is no evidence that the bylaws were not accessible or available to them for inspection during the entire time that they served as directors.
*509In addition to the bylaw provision in question, Movant Paul Buff actually felt it necessary to, and did in fact negotiate on his own behalf a separate and additional indemnification agreement with NECO when he resigned from the Board in 1992, testifying that after he received his privately executed indemnity agreement in early 1992, he placed it in a box and never thought of it again until October 1999, when his attorney asked him if such an agreement existed.
Upon consideration of all of the evidence, I agree with, adopt, and incorporate herein by reference the arguments of the Trustee, and rule that the Motion must be and is DENIED. For years, the Movants were directors of a publicly traded company, and it is inconceivable that they never had access to nor had explained to them the company’s bylaws, before October 1999. In December 1997, all of the Movants were named as defendants personally in the Superior Court action challenging their actions as directors of NECO. At about the same time, on December 23, 1997, NECO was petitioned into an involuntary bankruptcy proceeding, and the Movants admit that they had full knowledge of the bankruptcy. Ordinary prudence, due diligence, and the exercise of reasonable business judgment suggest that this would have been the logical time for the Movants to determine whether they had claims for indemnification against NECO. Instead, they rely on the naive (and unacceptable) contention that they simply were unfamiliar with the company bylaws until December 1999. In my view this conduct may not amount to excusable neglect as to these Movants, all of whom are charged with a relatively high degree of sophistication and business acumen. See Pioneer Inv. Servs. Co. v. Brunswick Assoc. Ltd. Partnership, 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993). This conclusion is even more inevitable in the case of Paul Buff, who actually negotiated for and obtained a separate indemnification agreement when he resigned from the board in 1992. Buffs suggestion that he was not aware of his right of indemnity against NECO is rejected, as is the argument that the Movants simply forgot, or never bothered to inquire about it.
The Movants’ finger pointing at the Trustee is irrelevant and does nothing to support their position. He is not their keeper. Nevertheless, instead of disallowing the claims outright, I will accept the Trustee’s alternate recommendation and allow the claims as tardily filed, for purposes of distribution under the Chapter 11 plan.
Enter judgment consistent with this order.
. Paul Buff also served as the Vice President of NECO. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493142/ | MEMORANDUM OF DECISION
JAMES A. PUSATERI, Chief Judge.
This matter is before the Court on the surviving debtor’s motion to enforce the discharge she received on confirmation of her chapter 11 plan of reorganization. The Internal Revenue Service (“IRS”) opposes the motion. Debtor Leona Julia Tuttle appears by counsel Gary H. Hanson and Wesley F. Smith of Stumbo, Hanson & Hendricks, LLP, Topeka, Kansas. The IRS appears by counsel Jackie N. Williams, United States Attorney for the District of Kansas, and Katja M. Eichinger, Trial Attorney, Tax Division, U.S. Department of Justice. The Court has reviewed the relevant pleadings and heard the arguments of counsel, and is now ready to rule.
FACTS
The relevant facts are not disputed. The debtors filed a chapter 11 bankruptcy petition in 1993. Appeals of a significant issue delayed progress in the case for a long time. In the interim, Mr. Tuttle died. Finally, Mrs. Tuttle proposed a plan under which she would retain her homestead and its contents and sell substantially all the rest of her property to pay her creditors. *737Her plan was confirmed in December of 1999.
When the debtors filed for bankruptcy, they owed the IRS a priority claim and a general unsecured claim. After filing, they incurred postpetition taxes of slightly more than $11,000 as an administrative expense of their case. Under Mrs. Tuttle’s liquidating plan, she was to pay the administrative expense taxes as soon as the liquidation was complete. She was to pay the priority claim of $40,586.56, plus post-confirmation interest, from the proceeds of sales of assets and then any remaining balance over a ten-year period. The parties agree that Mrs. Tuttle has now paid the IRS all amounts called for under her plan.
Under 11 U.S.C.A. § 523(a)(1), the priority portion of the debt to the IRS would be nondischargeable. Neither the debtor’s counsel nor counsel appearing for the IRS before the plan was confirmed realized that the IRS had been accruing interest against the debtor on the priority portion of the debt for the six years between the time the debtors filed for bankruptcy and Mrs. Tuttle’s plan was confirmed. Such interest is commonly referred to as “gap interest.” From April 1993 to December 1999, the gap interest accrued against Mrs. Tuttle totaled $30,043.95.
The IRS now contends that the gap interest was not discharged on confirmation of Mrs. Tuttle’s plan, and that it may recover the interest from her even though she has paid the IRS all the money called for under her plan. The debtor contends that she received a discharge that covered all of the IRS’s prepetition claim, including the gap interest or, if that is not a correct interpretation of the Bankruptcy Code, that the IRS agreed to accept the amount provided by her plan as full payment of its claim.
DISCUSSION AND CONCLUSIONS
Before Congress passed the Bankruptcy Reform Act of 1978,1 repealing the 1898 Bankruptcy Act and substantially overhauling the entire bankruptcy system, the Supreme Court held that the unpaid portion of a nondischargeable prepetition tax claim plus postpetition interest on the claim survived a debtor’s discharge in a liquidation bankruptcy case. Bruning v. United States, 376 U.S. 358, 84 S.Ct. 906, 11 L.Ed.2d 772 (1964). The Court indicated that the postpetition interest was not a claim against the bankruptcy estate, but continued to be enforceable against the debtor personally after the discharge. Id. at 361-63, 84 S.Ct. 906. The only provision of the Bankruptcy Act considered by the Court in that ease was one declaring: “ ‘A discharge in bankruptcy shall release a bankrupt from all provable debts, except such as (1) are due as a tax levied by the United States.’ ” Id. at 360, 84 S.Ct. 906 (quoting part of § 17 of the Federal Bankruptcy Act, 11 U.S.C. § 35, repealed eff. Oct. 1, 1979). To support its ruling, the Court relied on three basic points:
1. “In most situations, interest is considered to be the cost of the use of the amounts owing a creditor and an incentive to prompt repayment and, thus, an integral part of a continuing debt.” Id.
2. “Nor is petitioner aided by the now-familiar principle that one main purpose of the Bankruptcy Act is to let the honest debtor begin his financial life anew.... [The section setting out the exceptions to discharge] is not a compassionate section for debtors. Rather, it demonstrates congressional judgment that certain problems — e.g., those of financing government — override the value of giving the debtor a wholly fresh start. [Footnote omitted.] Congress clearly intended that personal *738liability for unpaid tax debts survive bankruptcy. The general humanitarian purpose of the Bankruptcy Act provides no reason to believe that Congress had a different intention with regard, to personal liability for the interest on such debts.” Id. at 361, 84 S.Ct. 906.
3. “The basic reasons for the rule denying post-petition interest as a claim against the bankruptcy estate are the avoidance of unfairness as between competing creditors and the avoidance of administrative inconvenience. [Footnote omitted.] These reasons are inapplicable to an action brought against the debt- or personally. In the instant case, collection of post-petition interest cannot inconvenience administration of the bankruptcy estate, cannot delay payment from the estate unduly, and cannot diminish the estate in favor of high interest creditors at the expense of other creditors.” Id. at 362-63, 84 S.Ct. 906.
Since the new Bankruptcy Code went into effect, a number of courts have applied the reasoning and result of Bruning not only to chapter 7 cases, but also to chapter 11 cases. See, e.g., Johnson v. IRS (In re Johnson), 146 F.3d 252 (5th Cir.1998) (chapter 7); Hardee v. IRS (In re Hardee), 137 F.3d 337 (5th Cir.1998) (chapter 7); Burns v. United States (In re Burns), 887 F.2d 1541 (11th Cir.1989) (chapter 7); Hanna v. United States (In re Hanna), 872 F.2d 829 (8th Cir.1989) (chapter 7); Ward v. Board of Equalization (In re Artisan Woodworkers), 204 F.3d 888 (9th Cir.2000) (chapters 11 and 12); Fullmer v. United States (In re Fullmer), 962 F.2d 1463, 1467-68 (10th Cir. 1992), overruled in part on other grounds in Raleigh v. Illinois Dept. of Revenue, 530 U.S. 15, 120 S.Ct. 1951, 147 L.Ed.2d 13 (2000) (chapter 11). However, having considered a number of provisions in the new Code, particularly some in chapter 11 and chapter 13, this Court is convinced that the courts have been too hasty in applying Bruning, a liquidation case, to reorganization cases. Instead, the Code specifies how tax claims that would be nondis-chargeable in chapter 7 are to be paid in chapter 11 and 13 reorganizations, and it does not require gap interest to be paid.
When the debtors filed their chapter 11 petition, the IRS had a tax claim entitled to priority under § 507(a)(8). The IRS filed a proof of claim, so its claim would have been deemed allowed pursuant to § 502(a) unless a party in interest objected to it. If an objection had been made, postpetition unmatured interest would have been disallowed under § 502(b)(2). This provision incorporates the longstanding general rule that interest stops running on the filing of a bankruptcy petition. See United Savings Ass’n v. Timbers of Inwood Forest, 484 U.S. 365, 372-73, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988); see also City of New York v. Saper, 336 U.S. 328, 330, 69 S.Ct. 554, 93 L.Ed. 710 (1949) (indicating rule had been borrowed from English bankruptcy system and followed in United States for nearly 200 years). Section 506(b) establishes an exception to the general rule by providing that holders of oversecured claims are entitled to be paid postpetition interest to the extent the value of their collateral exceeds the amount of their claim. This raises a negative inference, consistent with the general bankruptcy rule, that postpetition interest on undersecured or unsecured claims is not allowable except to the extent that some other Code provision authorizes it. See United Savings v. Timbers, 484 U.S. at 372-73, 108 S.Ct. 626 (§ 506(b) denies postpetition interest to undersecured creditors and to oversecured creditors to extent such interest plus principal amount of claim will exceed value of collateral). Another provision with an important bearing on this discussion, § 523(a)(1), provides that taxes entitled to priority under § 507(a)(8) are nondischargeable.
Coupled with Bruning, these provisions have led courts to adopt the following rea*739soning. For most unsecured taxes, the IRS has a priority claim against the bankruptcy estate that does not include postpe-tition interest. However, while § 502(b)(2) generally prevents the collection of postpe-tition interest from the bankruptcy estate, it does not prevent the interest from accruing. As Bruning declared under the Bankruptcy Act, since the principal owed for a priority tax is made nondisehargeable by § 523(a)(1) of the new Code, postpetition interest on the tax is also nondis-ehargeable. Thus, although the interest is not recoverable from the bankruptcy estate, it accrues while the case is pending and survives as a claim against the debtor because it is nondisehargeable. All the Circuit courts and most of the lower courts that have considered the question since the new Bankruptcy Code went into effect have simply relied on the reasoning of Bruning or other pre-Code cases to provide the rationale for continuing to except gap interest from discharge, with little analysis or discussion of the relevant provisions of the new Code. See, e.g., Johnson, 146 F.3d 252 (chapter 7); Hardee, 137 F.3d 337 (chapter 7); Burns, 887 F.2d 1541 (chapter 7); Hanna, 872 F.2d 829 (chapter 7); Ward v. Board of Equalization, 204 F.3d 888 (chapters 11 and 12); Fullmer, 962 F.2d 1463, 1467-68 (chapter 11). The courts do correctly point out that the legislative history does not declare that the Bruning result was rejected by the Code.
Of course, Bruning involved a liquidation bankruptcy case in which the non-disehargeable tax claim was not paid in full by the bankruptcy estate. Its reasoning and result still seems correct under the provisions that apply to unpaid nondis-ehargeable priority taxes in chapter 7 cases under the new Code. However, would Congress have had any reason to mention Bruning if it was establishing a rule for reorganization cases that required full payment of tax claims that would be nondisehargeable in liquidation cases? This approach would have limited the reach of Bruning, but not raised any apparent need to suggest that it was being overruled in the new legislation.
This Court is convinced that Congress protected priority taxes in reorganization cases by requiring their full payment rather than by making them nondisehargeable. This is most clear in chapter 13. Section 1322(a)(2) declares that, unless the claimholder agrees to different treatment, a chapter 13 plan must “provide for the full payment, in deferred cash payments, of all claims entitled to priority under section 507 of this title.” After completing all payments under the plan, the debtor is entitled to a discharge. See § 1328(a). As pointed out earlier, although oversecured claims are entitled to postpetition interest under § 506(b), the negative inference of that provision (and the longstanding general bankruptcy rule) is that interest is not allowed on other claims, including unsecured priority claims. In his chapter 13 bankruptcy treatise, Judge Keith Lundin states that priority claims are not entitled to postpetition interest during the chapter 13 repayment period, citing numerous cases so holding, with the limited and rare exception of a case where all the unsecured creditors would be paid in full in a chapter 7 liquidation. 2 Chapter 13 Bankruptcy, Second Ed., § 7.35 at 7-87 to -88 (1994). Certain debts are excepted from a chapter 13 discharge, but not taxes covered by § 523(a)(1). See § 1328(a).2 Since priori*740ty taxes are not nondischargeable in chapter 13 cases and gap period interest is not required by § 1322(a)(2) to be paid, such interest is certainly discharged under § 1328(a). Unlike the situation in Bruning, then, at least to the extent of gap interest, it cannot properly be said that Congress has decided the problem of financing government outweighs the value of giving the debtor a fresh start in chapter 13. Nevertheless, Congress did not mention Bruning in the legislative history of chapter 13. In this Court’s view, the likely explanation for this omission is that Congress had no reason to think that the Bruning liquidation decision should have any impact on the new chapter 13 reorganization provisions.
In language similar to that used in § 1322(a)(2), priority tax claims are afforded similar treatment in chapter 11 cases. Section 1129(a)(9)(C) requires that, unless the claimholder agrees otherwise, a plan must provide: “with respect to a claim of a kind specified in section 507(a)(8) of this title, the holder of such claim will receive on account of such claim deferred cash payments, over a period not exceeding six years after the date of assessment of such claim, of a value, as of the effective date of the plan, equal to the allowed amount of such claim.” While this provision requires the plan to provide for prepetition interest, since that is included in the “allowed amount” of the claim, and post-confirmation interest, since the deferred payments must, on the effective date, have a present value equal to the allowed amount of the claim, it imposes no requirement that interest accruing between those two periods — gap interest— be paid. For corporations, partnerships, and other entity-debtors that either continue in business after consummation of their plans or do not liquidate substantially all their property under their plans, tax debts covered by § 523(a)(1) are not excepted from the discharge they receive on confirmation of a chapter 11 plan. See 11 U.S.C.A. § 1141(d). Thus, like individuals who receive a chapter 13 discharge, such entity-debtors clearly receive a discharge of gap-period interest. Still, as with chapter 13, Congress did not mention Bruning in the legislative history of chapter 11.
It is true that § 1141(d)(2) excepts from the chapter 11 discharge for individuals “any debt excepted from discharge under section 523 of this title,” and that this can be construed to mean any unpaid portion of the IRS’s priority claim is not discharged. For several reasons, the Court believes this construction is flawed. First, the Supreme Court has twice held that when Congress used the word “claim” in a Bankruptcy Code provision, the word includes all the rights the creditor holding the claim has against the debtor. See Dewsnup v. Timm, 502 U.S. 410, 415-18, 112 S.Ct. 773, 116 L.Ed.2d 903 (1992); Nobelman v. American Savings Bank, 508 U.S. 324, 330-32, 113 S.Ct. 2106, 124 L.Ed.2d 228 (1993). In the present context, the most relevant of those rights are to recover the principal amount of the claim, plus interest not only for the period before the debtor filed for bankruptcy and after the debtor’s plan is confirmed, but also for the gap period between filing and confirmation. Significantly, however, when Congress specifically directed in § 1129(a)(9)(C) how tax claims must be paid under a chapter 11 plan, it said they must be paid the allowed amount of the claim plus prepetition and post-confirmation interest, but did not mention gap interest. Dewsnup and Nobelman indicate Congress’ use of the word “claim” in this provision means all the claim rights are satisfied by making the required payments. Second, since § 1129(a)(9)(C) requires everything else about the claim to be paid, gap interest is the only part that *741would be made nondischargeable by § 1141(d)(2). When a Code provision specifically mandates full payment of a claim plus post-confirmation interest, one should presume the claim is not also nondis-chargeable except to the extent the mandated payment is not made. Additional priority taxes disclosed by a post-confirmation audit could also be nondischargeable because the plan would not be paying them as required by § 1129(a)(9)(C). See Grynberg v. United States (In re Grynberg), 986 F.2d 367, 370-71 (10th Cir.1993). Third, the rationale that Congress concluded the problem of financing government overrides the value of giving the debtor a wholly fresh start, at least to the extent of gap interest, is much weaker in the reorganization chapters since gap interest is undeniably dischargeable for individual chapter 13 debtors and entity chapter 11 debtors. Indeed, it is surprising to think that Congress deliberately chose to declare in § 1129(a)(9)(C), in terms that exclude gap interest, how tax claims are to be provided for by a plan of reorganization, only to require the gap interest to be paid anyway in some unspecified manner outside the plan by making such claims nondischargeable. Fourth, leaving the IRS’s gap interest out of plan requirements but making it nondischargeable jeopardizes the debtor’s performance under the confirmed plan because the IRS could attempt to collect the gap interest as soon as the debtor’s plan goes into effect, a problem other Code provisions prevent the debtor from solving in the plan, absent cooperation from all other creditors. Thus, reading § 1141(d)(2) to require a debtor to pay gap interest post-confirmation, even though § 1129(a)(9)(C) does not, creates a potential obstacle to an individual chapter 11 debtor’s performance under a plan that must be considered at least an administrative inconvenience and probably unfairness to other creditors, circumstances not involved in Bruning. In most cases, an individual chapter 11 debtor will have little or no property that is not being used to perform under the plan, and consequently, no way to pay the gap interest without jeopardizing his or her plan performance. In sum, the Court is convinced that Congress intended for priority tax claims to be fully satisfied when paid as specified by § 1129(a)(9)(C), and not to leave some component of such claims to be paid in some other unspecified manner.
Unfortunately, this Court believes it is not free to apply this reasoning to cases coming before it. In Fullmer v. United States (In re Fullmer), 962 F.2d 1463, 1467-68 (10th Cir.1992), overruled in part on other grounds in Raleigh v. Illinois Dept. of Revenue, 530 U.S. 15, 120 S.Ct. 1951, 147 L.Ed.2d 13 (2000), the Tenth Circuit declared that Bruning applied to a person who had obtained confirmation of a chapter 11 plan, making postpetition interest on a prepetition tax claim survive the bankruptcy as a personal liability. Later, in ruling that gap interest on secured tax claims had been discharged by confirmed plans, the Circuit stated: “We conclude §§ 523(a)(1)(A) and 507(a)(7) [now (8)] clearly authorize the exception of tax debts and interest from dischargeability under 11 U.S.C. § 1141(d)(2) only when the governmental entity holds an unsecured claim to that debt.” United States v. Victor, 121 F.3d 1383, 1390 (10th Cir.1997). An argument might be made that these decisions are not controlling because the Fullmer court was merely rejecting the debtor’s argument that gap interest had been improperly collected from the bankruptcy estate, not that § 1129(a)(9)(C) precluded his personal liability for it, see 962 F.2d at 1467, and the Victor statement is mere dicta with respect to an unsecured priority tax claim. While a panel of the Tenth Circuit should be free to accept such an argument, however, this Court feels constrained not to do so.
Consequently, the Court must reluctantly conclude that gap interest on the IRS’s priority claim was not discharged by confirmation of the debtor’s plan.
*742The debtor also asserts that the IRS agreed to the treatment it received under her plan or should otherwise be equitably estopped from collecting gap interest. However, another disturbing aspect of the rule that gap interest on a priority tax claim survives confirmation of a chapter 11 plan is that, even if they do not eliminate the debtor’s liability for gap interest, the Code provisions discussed above clearly do prevent the IRS from forcing the debtor to provide in the plan for the payment of gap interest. If the IRS includes postpetition interest in its claim, the interest must be disallowed under § 502(b)(2) if any interested party objects to it. Furthermore, under § 1129(a)(9)(C), the IRS can only insist that all of its claim except gap interest must be paid. Consequently, the Court is unwilling to rule that the IRS is estopped from trying to collect gap interest because it agreed to or acquiesced in the treatment it received under the debtor’s plan. Finally, the Tenth Circuit has indicated that equitable estoppel is rarely, if ever, appropriate against the government. DePaolo v. United States (In re DePaolo), 45 F.3d 373, 376-77 (10th Cir.1995). At least affirmative misconduct is required, id., and the debtor does not allege that any occurred here.
For these reasons, the Court is forced to conclude that gap interest on the IRS’s priority claim against the debtor was not discharged by the confirmation of her plan. The IRS is also not estopped from trying to collect the interest.
The foregoing constitutes Findings of Fact and Conclusions of Law under Rule 7052 of the Federal Rules of Bankruptcy Procedure and Rule 52(a) of the Federal Rules of Civil Procedure. A judgment based on this ruling will be entered on a separate document as required by FRCP 9021 and FRCP 58.
. Pub.L. No. 95-598, reprinted in 1978 U.S.C.C.A.N. (92 Stat.) 2549-2688 (codified as all of title 11, portions of title 28, and other miscellaneous provisions of the United States Code) (largely effective October 1, 1979).
. Under the new Bankruptcy Code as passed in 1978, the only debts covered by § 523(a) that were excepted from the chapter 13 discharge were those for alimony and support under § 523(a)(5). See Bankruptcy Reform Act of 1978, Pub.L. No. 95-598, § 1328(a)(2), 1978 U.S.C.C.A.N. (92 Stat.) 2549, 2650. Congress has since amended § 1328(a)(2) to add two other subsections of § 523(a) to the excepted debts, but has not added priority taxes covered by § 523(a)(1). See Student Loan Default Prevention Initiative Act of 1990, part of the Omnibus Budget Reconciliation Act of 1990, Pub.L. No. 101-508, § 3007(b), 1990 U.S.C.C.A.N. (104 Stat.) 1388-25, 1388-28 (adding student loans cov*740ered y § 523(a)(8)); Criminal Victims Protection Act of 1990, Pub.L. No. 101-581, §§ 2 & 3, 1990 U.S.C.C.A.N. (104 Stat.) 2865 (adding debts incurred through impaired driving covered by § 523(a)(9) and restitution included in a sentence on the debtor's conviction of a crime). | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8493143/ | OPINION
DONALD R. SHARP, Chief Judge.
Now before the Court is the Joint Notice of Disposition of Property (“Notice”) filed by John W. Chung (the “Debtor”) and the Chapter 11 Trustee of this bankruptcy estate and the objections thereto filed by Northeast Medical Center, L.P., an interested party (“NMC”). The Court considered the pleadings filed, the arguments of counsel and the record in this case. This opinion constitutes the Court’s findings of fact and conclusions of law required under Fed.R.Bankr.Proe. 7052 and disposes of all issues before the Court.
FACTUAL AND PROCEDURAL BACKGROUND
On February 10, 1997, the Debtor filed his petition for relief under Chapter 11 of the Bankruptcy Code and Joyce Lindauer was appointed as Chapter 11 Trustee (the “Trustee”). The subject matter of the dispute before this Court is a cause of action for breach of contract and conversion of the Debtor’s property pending in the 6th Judicial District Court of Fannin County, Texas filed in October,1998 (the “District Court Action”). On July 10, 1998, the Trustee abandoned the Debtor’s potential *863lawsuit against NMC for damages allegedly sustained in an “employment dispute.” 1 In conjunction with same, however, the Trustee filed a complaint for turnover of property against NMC. The property consisted of office furnishings and equipment scheduled by the Debtor in the amount of $75,000 and gold coins in the amount of $150,000. The adversary proceeding ultimately was resolved by the Trustee’s motion for dismissal on the basis that a plan of reorganization was confirmed that provided 100% payment to all creditors of the estate and because the Trustee was “unable to verify the existence of the alleged assets.” Following the notice of abandonment of the employment claims, but prior to the resolution of the adversary proceeding, the Debtor filed the District Court Cause of Action.2
Notwithstanding the Trustee’s admitted inability to verify the existence of the assets in controversy at the time she dismissed the adversary, the Trustee now joins the Debtor in filing a Notice of Disposition of Property. The notice seeks approval of the transfer to Debtor of the estate’s interest in the assets and this Court’s order allowing the Debtor to pursue his claims in state court. NMC objected and the matter came on for regular hearing after which it was taken under advisement.
DISCUSSION
The Trustee and Debtor assert that no damage or expense to the estate will result from allowing the Debtor to pursue his claims against NMC in the state court and requests this Court’s order allowing same. The Trustee and Debtor further assert that it would be beneficial to the estate for the Debtor to continue his claims in the District Court Action for the value of the property allegedly converted, provided that any recovery upon such claims be first applied to the remaining amounts due to creditors of the estate under the plan of reorganization.
NMC filed two pleadings objecting to the relief sought in the Joint Notice of Disposition of Property. Such pleadings, while replete with argument, fail to provide any authority or evidence based upon which this Court can deny the relief requested by the Debtor and the Trustee.
NMC avers that the dismissal of the claims in the adversary proceeding was “final for all purposes and the statute of limitations has expired.” NMC appears to misconstrue the intent of the order. Although the order became final, the dismissal was without prejudice to refiling according to the specific language of the Agreed Motion of Dismissal and Agreed Order of Dismissal. NMC glosses over the specific language of the Agreed Order of Dismissal it executed as Defendant which provides that the matter is “dismissed without prejudice” to refiling especially, according to the Agreed Motion of Dismissal, upon “credible evidence as to the existence of the alleged assets”. In addition, respecting the finality argument, it is not the Trustee who seeks to prosecute claims against NMC on behalf of the estate, rather it is the Debtor. Neither does the Trustee intend to subsidize the cost of the prosecution with estate assets. The dismissal encompassed only the Trustee’s actions on behalf of the bankruptcy estate to obtain turnover of property. No language in the Agreed Motion of Dismissal or Order on same binds the Debtor or prohibits him from pursuing the action. Certain of the Debtor’s rights were preserved in the District Court by the pending action there. Other of the Debtor’s rights were preserved by confirmation of the plan. Also, property and rights re-vested in the Debtor under 11 U.S.C. *864§ 1141(b) following confirmation. 11 U.S.C. § 114.1 (b). NMC’s finality argument thus fails.
NMC argued at trial that the statute of limitations has expired. The appropriate Court in which to raise that objection is the state court where the action is being pursued.
NMC advocates that the Debtor lacks standing to bring the cause of action in the District Court in October 1998. The appropriate venue in which the Debtor’s standing in such action may be challenged is such Court. NMC also objects to the Trustee’s right to bring such action. The Trustee’s standing and right to proceed is not relevant given that she does not seek to prosecute the action against NMC before the District Court on behalf of the Debtor’s estate; neither does she seek to prosecute claims against NMC in this Court at this juncture.
NMC fails to support its claim that the Debtor never acquired standing to bring the cause of action for conversion of the property which was the subject of the adversary proceeding. With respect to the employment related claims, the effect of abandonment by a trustee, whether accomplished by affirmative act under 11 U.S.C. § 554(a) or (b) or by failure of administration under sub-paragraph (c), is to divest the trustee of control over the property because once abandoned, property is no longer a part of the bankruptcy estate. 4 Collier on Bankruptcy § 554.02 (15th Ed.) 554-7, 554-8. Drake & Mullins, Bankruptcy Practice § 5.16 (1980). Thus, the Debtor had standing to pursue such claims upon abandonment and, the record shows that he did so. As to the Debtor’s standing to pursue action respecting the property which was the subject of the adversary, notwithstanding that such property vested in the Debtor upon confirmation, the appropriate forum in which to object to the Debtor’s standing at the time of the filing of the action is the Court in which the action was filed.
NMC challenges the District Court’s jurisdiction. The appropriate Court in which to raise that objection is the state court where the action is being pursued.
According to the Joint Notice, because no estate funds will be utilized to prosecute the action, this Court cannot find any negative impact on the estate or its creditors likely to result if the Debtor is permitted to go forward in the District Court. Certainly, none has been demonstrated. Should the action resolve itself in favor of the Debtor, there is a possibility of early completion of payments to creditors required under the plan. Challenge to the propriety of early payment under the confirmed plan of reorganization is not ripe for consideration.
Finally, NMC’s Supplemental Objection observes that the Trustee discloses no method or agreement for the allocation of proceeds, if any, from the Debtor’s causes of action. The Joint Notice specifically states that recovery is to be applied first to remaining claims. In addition, at trial movants represented in open court that any funds recovered would be returned to the estate. Until adjudication of the cause of action, further specifics on method are premature.3,4
*865
CONCLUSION
NMC’s objections are meritless and, therefore, NMC’s objections are overruled. An order will be entered accordingly.
. The breach of contract claim was scheduled by the Debtor as unliquidated in the amount of $0.00.
. This Court is not aware of the specific counts alleged in the District Court Action and has not been apprised as to whether they include employment claims abandoned by the Trustee as well as conversion claims.
. NMC opines that the Trustee has taken action solely for the benefit of the Debtor and that she is in violation of her duties made a part of the appointment in this case. The evidence supports this Court's contrary conclusion.
. The Joint Notice of Disposition of Property was filed Pursuant to Rule 6007. Given the Court’s conclusion that the rights to pursue the causes of action in State court reverted to the Debtor on the Trustee's abandonment of same and upon the confirmation one might conclude that the Court lacks subject matter jurisdiction of this matter and that it should be dismissed. However, in this case the Bankruptcy Court retained jurisdiction under the terms of the confirmed plan and specifically Section 3 of same of disputes of exactly this nature. | 01-04-2023 | 11-22-2022 |
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